by Joel Makower on 4 January, 2011 - 00:47
There's a lot to be said for viewing the year just passed through the rear-view window.
Toyota's hybrids hit the wall, so to speak, in terms of being seen as a paragon of safety. BP spouted all too vividly the perils of the petro-based economy. The bigger peril, climate change (or global warming, or whatever it's called) became, somehow, a non-issue, politically speaking. Indeed, the political climate in the United States turned against pretty much all things environmental. Meanwhile, toxic substances and gender-bending chemicals found their way into everything from mattresses to baby bottles. I could go on.
But please, kind readers: Step away from the ledge. There's much to be hopeful about.
I've just finished an annual ritual, combing the past year's stories — all 2,139 of them — published on GreenBiz.com and its sister sites in order to identify significant trends in the world of sustainable business. I do this each year in preparation for our annual State of Green Business report, the 2011 edition of which will be released on February 1, the eve of the first of three State of Green Business Forums we'll be staging this year. The report identifies 10 key trends and 20 key indicators that show how, and how much, companies are transforming their operations in environmentally responsible ways.
Doing this review is tedious and time-consuming, but also heartening. There was much to celebrate over the past 12 months. Here, in no particular order, are 10 stories we published that I believe represent significant, hopeful developments:
General Electric is by no means the first or only company to make a significant pledge to buy large quantities of electric and plug-in vehicles, though its recent commitment is one of the largest. In doing so, large fleet buyers like GE (and Enterprise, Frito-Lay, UPS and others) are proving that there is a mainstream market for these vehicles — that they're not just the playthings of well-to-do techies and greenies. And GE's initial purchase of 12,000 vehicles from General Motors, including the Chevy Volt, was a strong vote of confidence for the re-emerging U.S. automaker.
For two decades, the world's largest consumer packaged goods company pretty much out stayed of the green marketplace. Its few forays were either ill-conceived (such as early 1990s commercials claiming that diapers were compostable) or focused solely on money-saving benefits (such as its successful Tide Coldwater detergent). But that changed in dramatic fashion with a series of long-term goals which, if met, would bring the company's factories to be 100 percent renewably powered, use 100 percent renewable or recycled materials for all products and packaging, and send nothing to landfills. Those bold goals are mid-century but the company set 10-year interim benchmarks that would set a trajectory for how products are designed and manufactured going forward. P&G still won't necessarily be overtly marketing green, but it could demonstrate that significant green commitments aren't incompatible with mainstream products and profitability.
The sustainability-minded carpet maker said it would complete something called "Environmental Product Declarations" or EPDs — detailed documents explaining the life-cycle impacts — for all of its products by 2012. EPDs analyze products from their raw material stage to disposal and are certified by independent third parties. In doing so, Interface took the lead on a growing trend of product transparency — not just for carpets, but for a wide range of other goods whose ingredients had previously been protected as trade secrets. We'll be hearing more about EPDs in the future, as more companies follow Interface's lead and make product transparency a core ingredient in their operations.
Transparency doesn't come without a great deal of investigation and quantification, the metrics of which are still in their infancy. Those metrics took a leap forward, at least for one industry, with the emergence of the Eco Index, a project of the Outdoor Industry Association, a trade group of apparel, footwear, and equipment manufacturers. The Index, a web-based tool, provides guidelines, indicators and metrics aimed at enabling companies to score individual products related to their materials, packaging, manufacturing and assembly, transportation and distribution, use and service, and end of life. This is a terrific example of industry collaboration to solve collective challenges and get all players speaking the same language and using the same yardsticks. The presence of leadership companies like Levi's and Timberland will help ensure that the Index isn't intended for just a small circle of niche players.
Sustainable agriculture hasn't generally been the domain of large food growers or retailers, residing principally in the world of locavores, farmers markets, and natural food stores. But the world's largest retailer is helping to bring it into the mainstream with a commitment to support local farmers and their communities. Specifically, Walmart pledged to sell $1 billion in food sourced from 1 million small and medium farmers and provide training to farmers in sustainable farm practices, all while increasing these farmers' income. And while $1 billion over five years represents a tiny fraction of Walmart's annual grocery revenue — more than $250 billion in 2009 alone — it signaled that sustainable ag has matured into a mainstream means of production.
Large chemical manufacturers have been turning gradually to green chemistry in recent years, but Eastman Chemical Company's goal — to derive two-thirds of revenue from new products that have sustainability benefits relative to other products on the market — represents a new direction for the 90-year-old Fortune 500 firm. Eastman also laid out some broader goals, such as working with customers to help them meet sustainability plans, using sustainability as a key factor in identifying growth opportunities, and using its internal Innovation and Sustainability Council to manage investments and determine priorities. It's not a 180-degree turnaround for the company, which claims to already derive one-fourth of its revenue from greener alternatives, but it sends a message that a fundamental shift is underway for an industry long linked to some of humanity's and the planet's worst health impacts.
Amid political squabbling over whether curbs on carbon emissions would harm the economy, Nike reached a milestone, and did so profitably. The world's leading maker of athletic footwear and apparel announced it had dialed back its greenhouse gas emissions to 2007 levels. And it did this despite having announced in 2009 that it would stop buying carbon offsets and concentrate instead on reducing emissions through curbing business travel and reducing the embedded energy in materials and energy used in its manufacturing process. None of this, it seemed, hurt the bottom line. While Nike's fiscal 2010 revenue dropped 1 percent from the previous year, "We've never been more profitable," reported Nike President and CEO Mark Parker in the company's 2010 annual report, adding: "Gross margins came in at 46.3 percent for the year — that's a record." Nike has proved that addressing climate change can go hand in hand with scoring points with investors.
This is the latest milestone in a decade-long effort GM has undertaken, getting 76 of its 145 plants worldwide to be "zero-waste." On average, 97 percent of the waste at these 76 sites gets recycled or reused to make new car parts, while 3 percent is incinerated to generate energy. The car maker is hardly the only company these days pursuing a waste-free goal, though it's been doing it longer than most. What's most remarkable about its achievement is that the company didn't put the brakes on its zero-waste efforts during its financial woes, bankruptcy, and multiple management changes, showing that eliminating waste can be and enduring and profitable pursuit.
The Korean industrial company was just one of several Asian manufacturers to make significant commitments last year to clean technology and greener products. Panasonic unveiled a three-year plan called "Green Transformation 2012," which it said will lay the groundwork for it to become the world's leading "Green Innovation Company" by 2018, Panasonic's 100th anniversary. Hitachi, which reached its century milestone in 2010, said it would put environmental innovations at the core of the company's operations for the next 100 years. Samsung said it spent $865 million during 2009 to develop greener products and make its manufacturing sites more efficient as part of a multi-pronged efforts to become one of the world's most environmentally friendly companies. And NEC Corp., Japan's largest PC maker, unveiled plans to invest $1.1 billion over eight years in battery and smart grid technologies. LG, for its part, said it would spend nearly $18 billion over the next decade cutting its carbon footprint by 40 percent and developing greener products. The ultimate impact of these efforts won't be known for years, but collectively, they made it loud and clear that Asian firms view green and clean innovations as their path forward to growth and profitability.
This was a largely unreported yet landmark achievement. Nearly all corporate charters, at least for large companies, mandate that management keep their eye focused solely on the financial bottom line, with no regard for environmental or social impacts. Indeed, diverting profits to invest in reducing those impacts could be seen as a violation of management's fiduciary responsibility to shareholders and subject the board to lawsuits or worse. Intel's board sought to change that, amending its charter to require that its Corporate Governance and Nominating Committee "Reviews and reports to the Board on a periodic basis with regards to matters of corporate responsibility and sustainability performance, including potential long- and short-term trends and impacts...." It was the highest elevation to date of the triple bottom line as a matter of shareholder concern.
That's my list. What's your most hopeful green business story of 2010? Feel free to weigh in below.
This blog reflects the personal opinions of individual contributors and does not represent the views of Futurelab, Futurelab's clients, or the contributors' respective employers or clients.