The broad fear and culpability over humanity’s impact upon the earth and its climate now hold a powerful influence over nearly all social institutions. Bearing the brunt of concern are those organizations that harness and process the planet’s resources to feed, house, transport and entertain billions. As these businesses wrestle with an apparently nonnegotiable imperative to go green, the responses are at once inspiring, insipid and even sublime. To wit:
- While environmentalism is something of a modern religion, the sharp edge of an ancient faith recently sliced into the neck of a Northern California turkey, the start of a plan to establish the West Coast’s first kosher meat business that’s also based on “sustainable farming practices.” Addressing Jewish religious guidelines and ethical concerns about large farms that give confined livestock hormones and non-organic feed-and which after slaughter are often shipped long distances-the operation intends to sell the pampered poultry to local consumers only. Since a major tenet of sustainable food is reducing greenhouse gas emissions, these birds will have a smaller carbon claw-print than their butter-balled counterparts, from egg to the dining room table.
- Last December, a
based firm announced plans to install kiosks at that city’s airport, so travelers could conveniently purchase certified carbon offsets, thus easing personal guilt for choosing to fly. While company officials could not reveal details of the developing program, the San Francisco Chronicle lavished fulsome front-page attention to the concept, as is its wont over anything green. But as Time magazine’s Jesse Ellison so trenchantly put it last year, “The similarity between sales of carbon offsets and medieval church indulgences is striking, not least because there’s about equal proof that the two actually work.” San Francisco-
- One of the more aggressive corporate sustainability programs is being waged by the Fiji Water Company, which bottles its blue gold in the South Pacific and markets the product in North America and parts of Europe. By planting trees, using energy from renewable sources and other steps,
intends to eventually mitigate its footprint by 120 percent, enough to go “carbon negative.” With a website featuring a green water droplet and earthy New Age music, the firm works closely with several conservation organizations and communicates frequently about the efforts. It is one of Fiji ’s largest employers, accounts for more than 15 percent of the country’s exports and supports dozens of civic ventures- not that the virtues matter so much. Fiji
Fiji Water, after all, is an international poster child for “greenwashing,” accused of draping an environmental veil over a business that bottles water in plastic and transports it at least 5,000 miles in fossil-fuel powered ships, a pair of fundamental ecological flaws.
The liabilities of mass marketing bottled water raise troubling questions about that entire industry, even though the product remains wildly popular. A carbon cap-and-trade system may soon develop, facilitating a large-scale business-like reduction in greenhouse gas emissions that’s far more effective than individual dispensations. And a fresh, organic kosher turkey guarantees a superb meal, a blend of religion, ethics and environmentalism at its very best. As these examples suggest, finding the sweet spot of an authentic sustainable business-and communicating about it in a way that does not overstate legitimate green qualities-is one of the more perplexing challenges now facing executives. Part of the snarl rests in the myriad of definitions for sustainability.
Many insist on a reduction or elimination of fossil fuel and a greater use of renewable energy. Others evolve out of a concern for the conservation of water, forests and other natural resources. One of the better versions comes from an early 1980s United Nations commission, which defined sustainability as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” It sounds reasonable, yet is still open to profoundly wide interpretation.
In fact, since no one wants to be part of an unsustainable business, the very proposition is arguably a confidence game at which most companies will invariably fail. Nearly all human activities release carbon dioxide and most, if you just track backward, involve fossil fuel, including the construction of things that produce alternative energy. And then there’s that pesky financial dimension, where sustainability is sine qua non.
Nevertheless, a growing number of corporations are taking the green thing seriously in their strategy, operational actions and interactions with stakeholder groups.
“At least 20 percent of the Fortune 1000 American companies are now issuing corporate sustainability reports, which in some ways are becoming the new annual report,” explains Chad Upham, a principal with Covive, a San Francisco-based sustainability consulting firm. “The reports are a tool for companies that want to mitigate risk and be perceived as credible. It represents a change from when corporations simply gave out philanthropic gifts without addressing what stakeholders really wanted. And it started with leading brands that in the 1990s were targets for activism.”
There are few sectors in business immune from some kind of criticism, whether it’s over labor practices, relations with foreign governments or the quality and costs of services provided to consumers. For seasoned executives, sustainability and the green movement is in some ways merely the latest piece of “reputational” terrain over which to navigate. But it’s one filled with ruts and unexpected chasms.
“One of the outgrowths of globalization over the past decade is that companies can no longer hide the harm,” adds Upham. Indeed, with CNN and other networks, the consequences of a company’s actions or practices, anywhere in the world, however isolated, can be almost instantly shared worldwide. Given the ubiquity of social networks, YouTube and the ever-running interactive and participatory commentary across the entire Internet, a corporation’s public image now is controlled by the masses. Claiming you’re green when you’re really not can set off a whole lot of chattering that’s not particularly good for business.
The term greenwashing was coined more than 20 years ago in an essay about the hotel industry’s practice of placing placards in rooms asking guests to consider reusing towels to reduce water use and ostensibly save the planet. Although a lame contention at best, the lodging industry has been struggling with going green ever since. “If you were to ask four hotel industry people to define biodegradable, you’d get four completely different answers,” observes Glenn Haussman, the editor-in-chief of Hotel Interactive, an online site that covers the industry. “The entire business is fractured over the meaning of sustainability. And the worst thing is that there are no systematic standards on which hoteliers can make decisions. A lack of hotel-specific criteria threatens to lump those with a conscience in the same group as those trying to pull a marketing heist on unsuspecting guests.”
That is, a hotel will claim in its literature and on its website that it is green, when in reality its building is no different that most others. “Another problem is that a lot of investors in this industry build hotels with the idea of flipping the property,” observes Haussman. “So why spend the extra to construct a green building when ownership is going to change?”
There are, however, standards, if an investor chooses to follow them. Haussman cites the Proximity Hotel in
What’s considered indefensible is when a company devotes significantly more money on green advertising claims than it does on environmentally sound practices. Ads with fluffy language about being “eco-friendly,” which make irrelevant claims about being best in class of a dirty class, or which emphasize one tiny attribute when the rest of the operation is not so clean are other signs of greenwashing. It’s also obvious when green products that represent only a small percentage of sales are featured in corporate marketing.
A classic case is British Petroleum’s vaunted “Beyond Petroleum” campaign, which is credited by environmentalists with changing the dialogue around fossil fuels, but which also coopted and twisted their very language and messages. Granted, BP purchased a solar company. But the investment was minuscule compared to expenditures on finding and producing oil and gas and refining and marketing petroleum products.
Accusations of greenwashing can also be levied against targets that some of us might not suspect. New York Times columnist and author Thomas Friedman clearly thinks of himself as a card-carrying friend of the planet. But while he was giving an Earth Day lecture at
It was the kind of mau-mauing that hasn’t been seen since the 1960s.
So, how does one fashion a company with flak-proof sustainability credentials, and who does it well? Leadership is an essential for an effective corporate sustainability effort, says Nicholas Eisenberger, the managing principal at GreenOrder, a New York-based sustainability strategy and marketing firm. He cites a company that his company has worked closely with, General Electric, and its “Ecomagination” strategy. “Jeff Immelt was intimately involved with this from the very start,” explains Eisenberger, “listening to stakeholders and then working to get GE’s business units to examine the growing demand for greener product that also cost less to operate. This includes building the least polluting aircraft engines that are possible. But while the effort starts at the top, it’s an ethic that also has to be believed throughout an organization.”
Credibility and relevance are also critical to any green activity, since stakeholders will accept the effort only if it’s related to a firm’s real business. “When Michael Dell first began donating profits to plant trees, it didn’t resonate,” explains Eisenberger. “You never see a tree in a computer store.” But when Dell devoted money to improving battery life-spans and recycling, his company then had a credible green activity.
Another firm with strong sustainability credentials is
So, should every company pour efforts into environmental sustainability? “I now see green as table stakes in most industries,” says Eisenberger. “Environmental groups routinely call companies to task for greenwashing, and the Federal Trade Commission is becoming active over greenwashing claims.” But others say that firms in certain industries shouldn’t bother.
“I just don’t think it’s wise for, say, a financial services company to look for ways to go green,” says another New York-based consultant who counsels corporations on reputation management. “Relating an environmental program to that particular business would be a stretch. And it’s especially true for an industry with a set of problems much more acute than global warming.”
The fact is that some sustainability practices are increasingly sophisticated, while others are nothing but metaphorical turkeys. Make an unsupportable claim about being green, however, and the connected and conversant world might turn against a company and its products, almost guaranteeing a fate similar to that tasty kosher organic bird.
A former executive editor of California CEO, Jay Stuller spent 23 years in public affairs with Chevron and co-authored Perfect Power: How the Microgrid Revolution Will Unleash Cleaner, Greener and More Abundant Energy, with Robert Galvin, the retired chairman and CEO of Motorola, and Kurt Yeager, former president of the Electric Power Research Institute.