Exxon, the Rockefellers, and the Future of Big Oil
Last week, the Rockefeller family made an historic challenge to Exxon Mobil Corp., the company founded by John D. Rockefeller in 1870 (as Standard Oil), and in which dozens of family members still hold stock. The challenge came in the form of a shareholder resolution to require an independent chairman of Exxon's board of directors, so that the company can better maximize long-term shareholder value in a rapidly changing energy environment.
Making the board chair independent of the CEO may seem a technical governance matter, but it has great significance. The family argued that having a board that was independent from the day-to-day operations of company management would enable Exxon to better assess the risks and opportunities that are altering the energy and environmental landscape — and that Exxon might alter its business strategy based on a different set of assumptions than those under which the company has been operating.
Research conducted by my colleague Ron Pernick and me at Clean Edge in 2006 looked into Exxon and its set of assumptions about our energy future. Exxon has long adopted a stance that renewable energy will be a negligible part of the energy mix for the foreseeable future, and that operational and market conditions will remain static and relatively unchanging. At the time, we wondered, given the realities of our increasingly volatile global energy marketplace — growing demand, declining production, global security issues, climate change, rising food costs, and other business, social, and environmental challenges — whether Exxon's narrow view would leave the company at risk from competitors and less able to seize new opportunities and adapt to shifting market conditions.
We found some of Exxon's assumption flying in the face of the facts — for example, that only 2% of the world's energy will come from renewable sources by 2030, despite estimates by the Renewable Energy Policy Network that already attribute 4% of the world's energy to new renewable sources. The company consistently underestimates the annual growth of solar, wind, geothermal, biofuels, and other alternative energy resources. Moreover, company statements — as underscored by its actions — is that they are waiting for a major breakthrough in renewable energy technology, at which point it will deploy its significant resources in bringing that technology to market.
There is good reason for the Rockefellers and other shareholder to be concerned about this strategy. By placing nearly all of its emphasis and focus on oil and gas, Exxon risks losing out on the new markets for renewables and places the company strategy within an outdated model of energy markets. As the renewable energy market has developed, it has become clear that our energy future won't be based on a single breakthrough, but on dozens, even hundreds, of smaller ones — new technologies, products and services, and business models. Everyone from GE to Goldman Sachs to Google seems to get this, and are investing accordingly.
So, diversifying investments more aggressively into clean-energy research and development would position Exxon to be better able to adapt to changes, capitalize on anticipated carbon trading schemes and expected developments in the regulatory environment, hedge its bets, and build new business opportunities as alternatives to petroleum-based technologies gain market traction.
Instead, the company seems to be biding its time, waiting for renewable energy markets to develop rather than jumping in to help build them. As a result, rather than taking a proactive role in advancing these technologies, Exxon runs the risk of either not having sufficient access to a viable partner when it finally decides to enter the renewables market in a substantive way, or of arriving too late and losing first-mover advantage, if not significant market share. Most of the other majors — BP, Chevron, Shell — have at least some robust renewable energy programs in place — wind, solar, geothermal, fuel cells, tidal power, and more — albeit relatively small ones in terms of revenue. But at least they're gaining experience and partners in the renewables space.
There are billions of dollars being invested by some pretty smart people in the notion that there's a Moore's Law of energy — that is, that innovation can make clean energy both ubiquitous are cheap. They're betting that energy can follow the path of microprocessors, hard-disk storage, and wireless telecommunications, where costs have plummeted as technology has steadily improved — and carbon can, in effect, be taken out of the energy equation. If even some of these bets pay off, Exxon's assumption — that oil and natural gas will remain the dominant energy sources for decades to come — could put them at a competitive disadvantage. Hence, the interest of long-term, multi-generational shareholders like the Rockefeller family.
It doesn't take much to roil the markets, as Exxon found out last week. At the same time that it revealed gusher-level profits, it's stock took a dive. The reason: Exxon's oil production was down 10 percent, continuing a yearlong decline. It's unclear whether the company will continue to have difficulty finding sufficient new reserves to replenish the billions of barrels it is pumping out of the planet, but if the trend continues, Exxon could find itself in trouble.
It's not too late. By changing strategies, Exxon stands to capture a better foothold in the evolving energy market and a significant percentage of revenues that would otherwise be lost.
Experts believe that the most viable technologies for the near term — such as cellulosic ethanol, next-generation solar technology, and plug-in hybrid technology, along with copious amounts of energy efficiency — represent the future of energy. With the likelihood of such events as a carbon tax or carbon caps within the next decade, the conditions for market acceptance of lower-carbon solutions become more attractive. The concept of negawatt programs is gaining traction, with power companies investing in conservation (average cost of $350/kilowatt) over coal ($1,000/kilowatt). The emergence of small, lightweight, long-running lithium-ion batteries has helped create a market for notebook computers, cell phones, and other portable devices. Efforts to scale that technology for use in automobiles could do for that industry what improved batteries did for computer and phone companies, building a market for hybrid, plug-in, or electric vehicles with great efficiency, acceleration, and range — at the same price or cheaper than today's gas-powered vehicles.
It's not just technologies that are changing. So are markets. For example, until relatively recently, the distribution of gasoline has been controlled by entities with an interest in keeping alternatives out of the infrastructure — the oil companies. But Wal-Mart and other independent retailers with large fuel distribution networks are largely impartial to the type of fuel they carry, and their market reach to consumers can accelerate the growth of alternative products and infrastructure. Large fuel purchasers like the Defense Department are actively creating conduits for the market acceptance of oil and gas alternatives by encouraging economies of scale and increased R&D. There are other disruptive technologies on the horizon that could gain market acceptance, further dampening demand for oil and gas. By waiting for a single "breakthrough" technology, Exxon is overlooking that this sector is engaged in an iterative process that is building a new approach to energy applications; waiting for the perfect solution is a potentially dangerous approach, from a business strategy perspective.
The modern history of innovation suggests that being big is no assurance of survival. Consider that six of the thirty multinationals included in the Dow Jones Industrial Average 20 years ago are gone today (Allied-Signal, American Can, Bethlehem Steel, Texaco, Union Carbide, and Woolworth), and a seventh, AT&T, exists in name only, the original entity having been scattered into multiple companies. Several others — Eastman Kodak, IBM, Sears, and Westinghouse — look radically different today than then. In many industries, the dominant players not that long ago are gone. Burroughs, Data General, Digital Equipment, NCR, Sperry, Univac, Wang — all leading computer manufacturers of the 1970s and 1980s — are cases in point.
The Rockefellers' efforts are aimed at ensuring that Exxon doesn't follow this path, and that it will overcome its stubborn, decidedly non-green, outlook toward one that recognizes the realities of a world in which carbon and climate become significant business considerations.
Will the strategy work? The odds are long, but we'll know more after the company's annual meeting on May 28. If history is any indicator, Exxon is likely to downplay dissent in favor of its own hellbent course.
May 5, 2008 in Business Practices, Clean Tech, Money Matters | Permalink | Comments (5)
The 2008 Shareholder Season
Some of the most important voting of the year doesn't involve candidates or political parties. It's taking place between shareholders and the companies they own.
It has become an annual rite of spring: a bumper crop of shareholder resolutions filed by activist investors aimed at compelling companies to address any of a wide range of social and environmental issues. This year is no different.
A new report on the 2008 season — the majority of companies hold their annual meetings in the spring — has been published by As You Sow (Free download). And while its intended audience are foundations, whose endowments typically include large stock holdings, the report offers insight for anyone interested at the state of the art of shareholder activism.
First, some background. Shareholders file all sorts of proxy proposals at annual meetings. Many have to do with corporate governance — such issues as selection of directors, appointment of auditors, and approving company stock plans. There are also social proxy proposal, frequently introduced at annual meetings by activist pension funds, especially those representing public employees and schoolteachers; universities (remember how schools divested investments in companies doing business in South Africa during Apartheid?), labor unions, foundations, and large faith-based institutional investors (what I lovingly refer to as "Little Sisters of the Immaculate Investment").
Over the past decade of so, shareholder proposals from such organizations have grown, from just over 200 in 1999 to 368 last year, according to As You Sow's "Proxy Season Preview." Environmental topics have historically accounted for the largest category of social proposals filed, covering such issues as greenhouse gas emissions, recycling, water, forestry, genetically engineered food, nuclear waste, oil production, protected lands, and environmental justice.
Many of these proposals never come up for a vote, but that's part of the process, As You Sow explains.
The goal of shareholder advocates is to change a company's practice or policy. Most shareholders prefer to do this through a "good faith" dialogue with the company. Shareholders file proposals if a dialogue is not going well or the company is unresponsive. Filing a proposal can often bring the issue to the company's attention and lead to a dialogue or change in policy or practice, in which case a proposal is no longer warranted and ultimately withdrawn.
Even when votes are held, success doesn't always require a majority vote. While most social and environmental proposals receive votes in the single digits, a significant number have received 20% to 50% in the last few years. "These votes are comparable to or better than traditional governance proposals and serve as further evidence that social, environmental, and reputational risks are being viewed as legitimate concerns in their own right by mainstream investors," says the report.
Because of this, proposals tend to be repeated year after year, largely in hopes of garnering bigger and bigger support. Indeed, says As You Sow, many of last year's top issues will dominate this year's crop of proposals, though 2008 will also see a slew of new proposals and shareholder campaigns. Major issues include global warming (50+ proposals covering climate change, greenhouse gas emissions, energy, and related issues), sustainability (35+ proposals), and animal welfare (25+ proposals).
One topic entering the picture is "toxic TVs." On February 19, 2009, all television signals in the U.S. will convert to digital broadcast, rendering millions of analog TVs obsolete. This so-called Digital Deadline is likely the largest government-mandated planned obsolescence in U.S. history. Tens of millions of TVs are expected to be discarded as consumers purchase new digital sets rather than obtain a low-cost converter which will allow current sets to function. Absent a responsible recycling system, this flood of TVs will add to the growing electronic-waste stream, much of which is sent to unsafe overseas recycling facilities. As You Sow filed a proposal at Best Buy asking the company to study the feasibility of using its stores as a take-back venue for e-waste and to give special consideration to have infrastructure in place for the digital switchover next year.
If nothing else, the "Proxy Season Review" is a good primer on environmental topics companies are being asked, or forced, to confront. Historically, a handful of leadership companies break ranks with their corporate brethren, taking a bold stance on a topic that has become a sore spot with investors and activists.
What topics and companies will be the talk of the 2008 proxy season? What will be the next domino to fall?
We should all take stock.
April 28, 2008 in Money Matters, Trendwatching | Permalink | Comments (3)
GreenBiz and GreenYour: Something Old, Something New
Something old is new again. GreenBiz.com, of which I am executive editor, has just relaunched with a new, improved format. The new site — the result of a revamping of the somewhat antiquated technology platform on which the site was originally built in 1999 — now reflects the topics you deal with daily: energy and climate; the various aspects of daily operations, from purchasing to cleaning to fleets; the design of products and packaging; the more efficient use of energy, water, and materials; and the way you communicate all of this through marketing, PR, and reporting. There are also sections for smaller businesses and on green careers.
Kudos to the team, headed by Matt Wheeland and Carlie Peterson, for making it all happen.
The new look represents the beginning of a forthcoming wave of new products and other enhancements we'll be making in coming months. Look for new newsletters and sites, and a few surprises.
And while we're on the topic of GreenBiz, please check out Greener by Design, our forthcoming conference on the mainstreaming of green product design at both big companies (Clorox, Dupont, GE, GM, IBM, Nike, Procter & Gamble, Wal-Mart, Xerox, and others) and smaller ones (Method cleaning products, TerraCycle garden products), as well as insight into how green innovation happens inside big organizations. There will also be some features that are not your usual conference fare — such as Green Gurus @ Play, during which conference participants will engage in small consulting sessions with select speakers and panelists (on a first-come, first-served basis); Innovative Flashes; and other experiential opportunities that get past conventional talking heads.
(Also, per my style: almost no speeches or presentations — rather, conversations facilitated by pro's, such as Marc Gunther of Fortune.)
Registrations are rolling in nicely, and the event — June 12 and 13 — is likely to sell out. Don't say you weren't warned.
Meanwhile, my colleagues at GreenOrder have launched a new site that offers a world of green possibilities. GreenYour.com is a smart and information-packed site offering tips and products on the greening of just about everything.
The site features more than a dozen categories of topics — appliances, personal care, energy use, lawn and garden, clothing, car, food and drink, travel, etc. Each category drills down further into subcategories and sub-subcategories — for example, under "Office and School" there are business operations (building, business travel, career, company values, lighting, mail, staff commuting) and office supplies and equipment (batteries, cell phone, computer, copier, copy paper, mobile device, printer).
Under each are clearly written tips, fact, and products. If you register (free), you can register your own tips, products, and resources — the wisdom of crowds.
It's a work in progress, but off to a promising start. For all of the hundreds (thousands?) of consumer-facing websites out there, no one offers such clear, no-nonsense, and accessible information on life's basics. The fact that experts can add their own two cents will no doubt make the site richer and richer over time.
As they say, none of us knows as much as all of us.
April 28, 2008 in Green Marketing, State of the Art, Trendwatching | Permalink | Comments (2)
Earth Day, Green Marketing, and the Polling of America, 2008
It's time for my (second) annual survey of surveys — the bounty of public opinion polls on green topics that seems to sprout every spring in time for Earth Day. A half-dozen or so years ago, there were perhaps a couple such surveys. Today, there are more than a dozen, ranging from substantive to silly to self-serving.
All told, they paint a portrait that hasn't changed much over the past twenty years: The public wants to buy green products and support good companies. Of course, what this means — and how to define both "green" and "good" — is where the devil meets the eco-details.
But there's something slightly different about this year's bumper crop of data. A shred of realism seems to be creeping into the mix. Whereas such polls traditionally were pretty enthusiastic, a few now acknowledge that the green marketplace is no bed of organic roses, thanks in large part to consumers' lack of understanding of key environmental issues, and their innate distrust of companies' green proclamations.
The overly enthusiastic tone of some polls is understandable, once you scratch the surface. Market researchers proffer tantalizing sketches of the various eco-minded personalities, hoping to entice corporate clients to pay the big bucks for more in-depth and customized data. And then there are the fairly blatant self-serving surveys. A provider of videoconferencing technologies reports that a significant number of workers would prefer to participate in an important meeting by phone or web conference! Well, of course.
So, what did this year's surveys reveal? Here are highlights:
- Almost four in 10 Americans are preferentially buying products they believe to be environmentally friendly, though almost half (48%) erroneously believes such products are beneficial for the planet, as opposed to simply being less harmful, according to the 2008 Green Gap Survey from Cone LLC and the Boston College Center for Corporate Citizenship. It also found that Americans are pretty open to companies' green messages: 47% trust companies to tell them the truth in environmental messaging; 45% believe companies are accurately communicating information about their impact on the environment; and 61% say they understand the environmental terms companies use in their advertising.
- Gallup's annual environment poll found that 28% of Americans say they have made "major changes" in their lifestyles to protect the environment. Forty percent say they worry "a great deal" about "the quality of the environment," ranking far below the 60% who worry about the economy and the 58% who worry about the availability and affordability of healthcare.
- Almost 200 million Americans buy green products, reports the market research firm Mintel, which also found that the number of new products with an environmentally friendly claim has grown substantially over the past five years — from five such product launches in 200 to "a staggering" 328 in 2007. "Price, perceived value and convenience drive these purchases as more and more people take on a green lifestyle," the company reports. "Thanks to manufacturers' recent moves, consumers can now find more choices of environmentally friendly products than ever before." (Mintel doesn't put these 328 new green products into perspective, one of my pet peeves. So I will: There are about 20,000 new product introductions a year in just the food and beverage category.) Another Mintel study reported that "over one-third of adults (36%) claim to 'regularly' buy green products," triple the number 16 months ago.
- Consumer recall of advertising with green messaging is very high, with more than a third (37%) of consumers saying they frequently recall green messaging and an additional third recalling it occasionally (33%), according to Burst Media. (Again, some perspective would be helpful here: How does 37% compare with overall add ad recall?) One in five (23%) respondents say they seldom or never believe green claims made in advertisements. Two-thirds (65%) of respondents say they "sometimes" believe green claims made in advertisements, and 12% say they "always" believe green advertising claims. More than 40% of consumers frequently or occasionally research the claims made in green advertisements.
- Consumers expect to see significant company commitments to environmental leadership before they buy the green marketing hype, according to marketing firm EcoAlign. Seventy-seven percent of consumers think that an operational commitment to energy efficiency or green energy is the single most important quality of a corporation trying to be an environmental leader. When respondents asked which of 12 major companies they thought were most committed to using or providing renewable energy. GE dominated with 81%, while Toyota came in second at 65%. However, 54% of consumers had difficulty naming any company that supplied renewable or green energy. GE and BP received the most mentions, but only represented 4% to 5% of responses. (In reality, neither firm supplies much if any green energy, though both manufacture solar panels and GE manufactures wind turbines; BP has a tiny renewable energy division, representing less than 1% of its total revenue.)
- One in ten Americans say that they have looked up their personal or household's carbon footprint, according to Harris Interactive. Younger Americans are more likely to have done so. Almost one in five (18%) Echo Boomers (aged 18-31) say they have looked up their carbon footprint, compared to 11% of Gen Xers (aged 32-43), 9% of Baby Boomers (aged 44-62), and 6% of Matures (63 and older). Regardless of whether they are calculating their carbon footprint, Americans claim that they are doing things that will reduce it and their carbon emissions. Almost two-thirds say they may have reduced the amount of energy they use in their home, 43% have purchased more energy-efficient appliances, 27% they have started purchasing more locally grown food, and 21% have stopped drinking bottled water.
- Only 3% of consumers "always" buy green products and 66% said that they "sometimes" purchase them, according to the Shopper Environmental Sentiment survey from corporate real estate giant Jones Lang LaSalle. The survey was taken across 34 Jones Lang LaSalle-managed shopping malls. Around 40% said that they were willing to "do what it takes" to protect and improve the environment, and more than half always recycle at home. Almost two thirds of respondents were interested in learning more about simple ways to save energy.
It's a mixed bag of data, to be sure — and more than a little bewildering. Are consumers really making "major changes" in their lifestyles and purchases, as Gallup reports? Are individuals' carbon footprint numbers on their way to becoming as ubiquitous as cholesterol numbers, as Harris suggests? Are we making more environmentally conscious purchase decisions, as Cone and others report? Will four in ten consumers really "do what it takes" to solve our environmental problems, as Jones Lang LaSalle found? As I have stated so many other times (see here, here, here, and here), I'm a tad skeptical.
One thing is clear: The din is growing. A Nielsen BuzzMetrics report, Sustainability through the Eyes and Megaphones of the Blogosphere, found that the "buzz around sustainability" grew 50% last year. Given the dozens of new books, TV specials, Earth Day events, and green advertising campaigns abounding this April — with more of all of these to come — it's safe to say that the buzz will continue for a while.
The question, as always, is whether (or when) the frenzy will yield to fatigue.
April 20, 2008 in Green Marketing, Trendwatching | Permalink | Comments (8)
A Deeper Dive into the Business of Water
Water hasn't yet risen to the level of energy and climate as a pressing issue for most companies, but the conversation seems to be flowing lately. And that conversation includes two concepts likely to enter the green lexicon.
One of those, "virtual water," received currency last month when its foremost proponent, Professor John Anthony Allan from King's College London and the School of Oriental and African Studies, was given the 2008 Stockholm Water Prize. Allen coined the term back in 1993 to refer to the amount of water embedded in the production and trade of food and consumer products. A cup of coffee, for instance has 140 liters (about 37 gallons) of virtual water, when you consider the amount of water used to grow, produce, package, and ship the beans. Similarly, a hamburger contains 2,400 liters (634 gallons) of virtual water.
The concept of virtual water (also known as embedded or embodied water) is of more than academic interest. As water concerns flood a greater number of regions, the embedded water of common products provides a useful understanding of how water resources are impacted by global trade. For example, it explains how and why nations such as the U.S., Argentina, and Brazil "export" billions of gallons of water each year — in the form, say, of water-intensive grain or meat — while others like Japan, Egypt, and Italy "import" billions.
The concept also could be useful in national agriculture policy, much as "embedded energy" has aided policy makers' understanding that growing and processing corn to produce biofuels can require significantly more energy than the process yields. (Not that this knowledge has dissuaded policymakers from supporting energy-intensive biofuels, of course.) And it may become a factor in the price of many raw materials, should carbon taxes or trading systems illuminate the energy and carbon intensity of things like aluminum, glass, and plastic.
There are other implications. Virtual water calculations will, no doubt, lead companies, individuals, and others to calculate their "water footprint," the full measure of the water embedded in the products they buy and the activities in which they engage. And it may accelerate interest in what Peter Gleick, co-founder and president of the Pacific Institute, calls the "soft path," a much more integrated, sophisticated approach to water in which different types of water — potable water, gray water, brown water, etc. — are used for their highest and best use, rather than using potable water — the highest quality, for flushing toilets, watering lawns, etc.
Last year, in an interview, Gleick expressed to me how little companies understand the water embedded in their systems.
There are very poorly understood or appreciated connections between business and water. Every business uses water in one form or another. Some use a lot of water, some not so much, but for many businesses, water is a surprisingly large component of production, either directly or indirectly, in the supply chain. So, for example, the beverage industry may use three or four gallons of water to produce a gallon of soft drink or beer or milk, but often a thousand times as much water is used in the upstream part of the process, perhaps to grow the sugar that goes into a soft drink. Similarly, in the textile industry, it takes water to make clothing but it takes a lot of water to grow fiber.
Businesses are often unpleasantly surprised where a local community objects to their use of water or there's a drought that affects their supply chain or there's a water contamination problem that results in their license to operate being removed. We're seeing more and more examples where businesses that don't pay attention to the water required to run their business run into unpleasant surprises.
Gleick went on: "I actually think the risk to companies is larger in some ways for water than it is for energy. There are substitutes for energy. You can replace oil or electricity with biofuels or with renewables. Water has no substitutes."
Coca-Cola recognizes that. And over the years, it has bumped up against activists, communities, and others for its water use — which is, of course, the fundamental ingredient of all of its beverages. In recent years, a series of developments pressed the need for a more comprehensive global water strategy. In the late 1990s, it began acquiring water brands (its principal U.S. offering is Dasani). In 2002, the company faced protests in India about the company's drawing down of groundwater resources. A year later, it began reporting water quality and quantity as a material risk to its business in its U.S. Securities and Exchange Commission Form 10-K for investors.
In response to this Coca-Cola "developed and continues to evolve one of the more sophisticated water stewardship programs in the private sector," according to a new report from Business for Social Responsibility (Download — PDF). "As of March 2008, no other organization in the world has publicly pledged to achieve "water neutrality" across global operations that span more than 100 basins and sub-basins around the world."
Water neutrality. It's a compelling idea in the age of carbon-neutral and zero-waste commitments. But water is a bit different from carbon and waste: unlike the other two, there's a finite amount of water. And as Gleick points out, there's no known substitute for it. Moreover, as BSR points out:
True sustainability as it relates to water will involve more than "neutralizing" the volume of water that [Coca-Cola] uses. This is because fluctuations in the amount and quality of water available to a given community or ecosystem play an important role in sustaining the diversity and proper functioning of river ecosystems and watersheds.
Coke announced its water-neutral goal last summer. The company committed to "set specific water efficiency targets for global operations by 2008 to be the most efficient user of water among peer companies" and that by 2010 it would "return all the water that we use for manufacturing processes to the environment at a level that supports aquatic life and agriculture."
Coke will need to work hard to keep its goal afloat. The BSR report notes that last year, six organizations — Twente University, WWF, Coca-Cola, World Business Council for Sustainable Development, Water Neutral/Emvelo Group, and UNESCO-IHE — came together to investigate the benefits of water neutrality as a meaningful milestone. The groups developed three criteria for legitimate use of the term:
- Defining, measuring, and reporting one's "water footprint";
- Taking all action that is "reasonably possible" to reduce the existing operational water footprint;
- Reconciling the residual water footprint (amount remaining after a company does as much as possible to reduce footprint) by making a "reasonable investment" in establishing or supporting projects that focus on the sustainable and equitable use of water.
There are more than a few squishy issues here — the definitions of "reasonable investment" and "reasonably possible," for starters. But we've got to start somewhere. Over time, I hope, the bar will rise.
Can it work? Will "water neutral" become the Next Big Thing in the field of corporate resource efficiency? Can it actually make a difference? It's a nascent idea, so it remains to be seen. But the high likelihood of continued water crises suggests that more and more companies will be learning about "virtual water" and "water neutrality."
For now I'm guessing that only a handful of companies — those whose products and reputation are most linked to the precious resource — will be willing to take the plunge.
April 3, 2008 in Business Practices, State of the Art, Trendwatching | Permalink | Comments (9)
The Death and Rebirth of "50 Simple Things You Can Do to Save the Earth"
50 Simple Things You Can Do to Save the Earth is back in print, updated for the 21st century.
If that doesn't send a mild shiver down your spine, then you are under 25 years old.
If you somehow didn't catch the early 1990s, 50 Simple Things, published a few months in advance of Earth Day 1990, was a cultural phenomenon. It caught a wave of interest — notably, media interest — in all things green, which propelled the book's sales to cult-like status. The book sold 5 million copies in all, about a third in one of the 20-odd languages in which it eventually appeared.
The principal author and publisher, John Javna — who the first time around hid behind the anonymity of "The EarthWorks Group," basically himself and some helpers — eventually got discouraged and cynical about the book's impact. By the mid 1990s, he had taken the book out of print and took his family, and his newfound wealth, to rural Oregon, where he's been ever since.
I first met Javna in 1988, when green books were just a glimmer in both of our eyes. By 1990, we were both working on our respective tomes — his 50 Simple Things and my book The Green Consumer. I distinctly recall him sitting in my office in early 1990, explaining how his book would succeed because it would be "first, cheap, and simple." And it did. His book was a blockbuster; mine was merely a bestseller. (In 1992 I penned one of the books in the series, 50 Simple Things Your Business Can Do to Save the Earth, which was attributed to, and published by, the EarthWorks group.)
In the wake of the original 50 Simple Things, Javna began to understand that his "first, cheap, and simple" book may have had an unintended consequence: While it made environmentalism more accessible to the masses, it may have lulled readers into thinking that snipping six-pack rings or choosing paper over plastic was all they needed to do to address pressing issues like climate change, water and air pollution, and the squandering of natural resources.
"I had this sense that the simple things that we talked about in the book were not the way to go," Javna told me recently. "I just thought, this is not solving problems, and in some ways it's even creating problems because people think that they're addressing an issue in a deep way when they're just skimming the surface. You could say that that book was a mile wide and an inch deep.
It turned out that there weren't 50 simple things we can do to save the earth — just a half-dozen or so rather difficult ones.
Eighteen years later, the book is back. It looks pretty much the same — Javna recycled quite nicely the look and feel — but the concept is different. The new edition of 50 Simple Things was written by Javna along with his two kids, 18-year-old Jesse and 14-year-old Sophie. Indeed, it was Sophie who inadvertently inspired the project. "After the green-washing and stuff in the '90s, people just sort of wandered away and lost interest and went back to buying their gas-guzzling cars and not voting for the environment at all. And it just became a sub-issue, even though the environment itself was getting worse and worse.
"For years I thought about it — what would be a way to engage people in a simple way? People did buy and use the book, and a lot of people were pretty encouraged by it, and so I thought, 'What's a way to engage them in a way that really would make a difference?'"
"Then Sophie asked me, 'Why don't we compost anymore? And I started to give her my real answer — you know, about how you can recycle all you want. It's not going to take the mercury out of the air, so don't bother.
"And I just sort of stopped myself, and I thought, 'This is crazy because she is in fact the future generation I was talking about when I was talking about 'Let's try to protect the planet' in 1990. And I had really turned my back on her, on the effort to protect her. So I made the decision that I really couldn't afford to be cynical — not if I love my children. I decided that probably the most powerful thing I could do was find a way of engaging people in environmental actions through a new version of 50 Simple Things, but in a way that really mattered.
In this new edition, each of the "things" is an entire issue chosen and developed by an environmental group — 50 in all, from the Alliance to Save Energy to the Wilderness Society. Both large and small groups are represented — the Sierra Club and Environmental Defense, but also Green for All and As You Sow. Each of the "things" has its own page on the book's website (slated to go live on April 1), with additional information and resources.
The book in some ways raises its sights by asking readers to lower theirs. Javna's hope is that everyone who reads the book will do at least one of the "things." Says Javna: "A simple thing is a commitment to an issue. The book says pick one of these issues, not a whole lot of them. Pick one issue and commit yourself — an issue that fits in your life, an issue that feels comfortable to you — and then make that a part of your life. That can be your commitment to trying to change the shape of the world, to protect the life-support system of the planet."
It will be interesting to watch the book unfold anew. A lot has changed — but in some ways not much has. People are still looking for answers — and simple ones are pretty compelling.
Of course, Javna's book will have to compete with all the others — a recent issue of the book industry bible, Publishers Weekly, listed no fewer than 70 green books coming out this spring and summer, many advocating easy ways to live an eco-friendly lifestyle. They include at least one derivative title — Go Green, Live Rich: 50 Simple Ways to Save the Earth and Get Rich Trying as well as a spate of eco-fabulous titles: the Eco Chick Guide to Life; Green Chic: Saving the Earth in Style; Green, Greener, Greenest: A Practical Guide to Making Eco-Smart Choices a Part of Your Life; Green Is the New Black: How to Change the World with Style; and Gorgeously Green: 5 Simple Steps to an Earth-Friendly Life.
Oh, right: and Green Living for Dummies.
With this abundance of green-is-chic books, will it be enough to merely "save the earth"? We'll see.
March 23, 2008 in Trendwatching | Permalink | Comments (7)
Where Are All the Clean, Green Jobs?
The promise of the green economy and the clean-tech revolution is that they will bring a new wave of job opportunities — productive and respectable jobs at every part of the economic spectrum, from line workers to senior managers. Nonprofit groups like the Apollo Alliance have made this part of their raison d'etre. A steady drumbeat of studies since the late 1990s has told us that burgeoning markets for solar, wind, clean transportation, and other technologies would represent the next big wave of job creation. Cities and states have been positioning to become clean-tech hubs, eyeing the workforce development potential. Organizations representing low-income populations have been viewing the green economy as an entry point for those near the bottom of the economic ladder.
So, now that clean technology and the greening of business seem to be in full swing, where are all the jobs? So far, they're nowhere in sight — at least not in any appreciable numbers.
The reasons are many and varied. Most of the big companies in the clean-energy business — the BPs, GE, and PG&E's of the world — don't seem to be going on hiring sprees, typically creating clean-tech business units from within. So, too, with much of the green business activity — it has to do with efficiency, with doing more with the same or fewer resources, and that includes human resources. Few of the start-ups are undergoing massive hiring, and when they do, they're more often in the market for engineers and other skilled professionals. And the jobs that are being created are disperse, geographically, meaning that there are few robust Silicon Valley-like clean-tech clusters, where companies congregate and jobs proliferate.
Despite such obstacles, there seems to be new energy building behind the notion of a Big Green Job Machine. Last week in Pittsburgh, for example, a Good Jobs, Green Jobs conference, organized by the Sierra Club and the United Steelworkers union, drew more than 900 people from business, government, nonprofits, academe, and labor unions to share strategies for increasing job opportunities in the environmental and clean-tech sectors.
There were about 8 million green jobs in the U.S. in industries that attracted $148 million in investment in 2007, up 60 percent from the year before, Lois Quam, managing director of alternative investments at Piper Jaffray, told the conference. I haven't yet seen the research on which this was based, but I'm intrigued. As I noted in our State of Green Business report, tracking green job creation has been difficult. One reason is that green jobs, at least by my definition, aren't often identified as such, and can be found throughout companies of all sizes and sectors. Does a procurement manager — whose job entails implementing her company's environmentally preferable procurement mandate, thereby seeking out and purchasing millions of dollars a year of recycled, energy-efficient, and other green products — count as a "green job"? What about the loading dock laborer whose job it is to make sure all packaging materials are recycled? Or the facility manager working to replace maintenance staples with green cleaning products? Are these counted among the "green jobs"? Possibly, but I doubt it.
Fact is, there's no good definition of "green job." Consider this report, released last week, by Raquel Rivera Pinderhughes, professor of urban studies at San Francisco State University. Titled Green Collar Jobs: An Analysis of the Capacity of Green Businesses to Provide High Quality Jobs for Men and Women with Barriers to Employment (Download - pdf), it focuses on opportunities in the San Francisco Bay Area. According to Pinderhughes,
Green collar jobs are blue collar jobs in green businesses — that is, manual labor jobs in businesses whose products and services directly improve environmental quality. . . . What unites these jobs is that all of them are associated with manual labor work that directly improves environmental quality.
Pinderhughes lists 22 types of green collar jobs, from food production (using organic and/or sustainably grown agricultural products) to furniture making (from environmentally certified and recycled wood), from parks and open space (maintenance and expansion) to printing (with non-toxic inks and dyes and recycled papers). It's a good list, but it doesn't seem to cover all that's out there.
Another report, Green-Collar Jobs in America's Cities (download - pdf), released for the Pittsburgh event, lays out steps for creating comprehensive green-collar job strategies at the local level. It also profiles some of the great work already underway around the country. The guide — published by Green For All, the Apollo Alliance, the Center for American Progress, and the Center on Wisconsin Strategy — focuses on local green jobs in clean energy industries: energy efficiency, renewable energy, alternative transportation, and low-carbon fuels.
Yet another new report, Greener Pathways, from the same consortium, profiles some of the best examples in the U.S. where work is underway to develop green jobs, including green construction career development in California, Iowa's biofuels job-training bonds, wind technician training in Oregon; and Pennsylvania's green re-industrialization.
It's all very encouraging, but it feels like there's one key group that's not yet at the table: companies. A look at the impressive speaker roster for the Pittsburgh event reveals only eight of 86 speakers from the private sector — and only three large companies: BP, Gamesa, and Johnson Controls.
Why aren't bigger companies more engaged? Do they not foresee a need for talent in this arena? Are their labor pools overflowing? Or are they simply not tuned in to the opportunity? Any ideas?
For now, groups like the Apollo Alliance and Green for All will have to go it alone, and they have their work cut out for them, helping to ensure, in the words of Green for All founder and president, Van Jones, that "the clean-tech wave lifts all boats." It won't be easy, especially without the active participation of companies in the clean and green sector.
As Jones told me recently: "The next set of challenges have to do with going from rhetoric to reality."
March 17, 2008 in Clean Tech, Trendwatching | Permalink | Comments (9)
Clean Energy Trends 2008
The latest annual edition of Clean Energy Trends has just been published. My colleagues and I at Clean Edge have identified five key trends affecting clean-energy markets and produced our annual forecast of markets for four clean-energy technologies. And, working with our partners at New Energy Finance, we've analyzed the investment trends of the past year.
As we point out in the free, downloadable report, 2007 was a very strong year for clean energy technologies, with no signs of a slowdown in 2008. That said, with all of the uncertainties facing the economy, there are some potential speed bumps. One of the biggest is whether and how U.S. policies will extend the production tax credits for wind and solar, both of which are expiring at the end of the year. If these credits aren't extended before they expire, we could see the growth of solar, wind, and other renewables come to a standstill in the U.S., much as markets for wind power did at the end of 2006, when those credits expired for several months. During that period, the wind market simply flatlined. According to research by Navigant Consulting, more than 100,000 jobs within the solar and wind industry are in jeopardy, if the same thing happens again.
The problem is that Congress, in its infinite wisdom, seems to have an appetite to extend tax credits for only two years. That's not long enough to do the long-term planning that any emerging industry needs to scale up.Critics of clean energy like to point out that without subsidies and regulation, clean-energy sources would never be getting a foothold in the market. But that misses an important and critical point: all energy technologies are subsidized - some to the tune of billions of dollars a year. What would happen to oil and gas prices if those industries had to do away with federal subsidies and tax credits (not to mention the costs of fighting wars in oil-rich countries).
The five trends we cover in this year's Trends report cover electric cars (how all of the action seems to be from smaller players, not the major automotive companies); sustainable cities (the emergence of new, fossil-fuel, carbon-neutral cities - in the Middle East, of all places); wind (how the U.S. market is being driven by foreign companies); geothermal energy (it is experiencing a global renaissance, particularly as large, utility-scale projects); and shipping (the new push to create cleaner oceangoing transport, including putting sails on freighters).
You can download the free report here.
March 11, 2008 in Clean Tech, Trendwatching | Permalink | Comments (0)
Green Corporate Communications: The Unstoppable Urge to Talk the Talk
I've spent the past few weeks on the road talking about the State of Green Business, listening to the questions and concerns of audiences at the companies and conferences I've addressed. There's one constant query: In a world gone green, how does a company make itself heard, credibly and authentically? And how does it do this in a way that minimizes the risks of being charged with greenwash, or worse?
The questions themselves represent a sea change. For years, companies have been satisfied to walk more than talk — that is, do more, environmentally speaking, than they'd publicly disclose. It's not that these companies were being virtuous, or that they didn't care about the world knowing of their green commitments and achievements. Far from it. But the corporate risks of sticking one's neck out, calling attention to what a company is doing right, often unwittingly illuminates environmental problems about which the public wasn't aware. (You're using 10% organic cotton? Why? Oh, because growing cotton requires intensive pesticides, harming groundwater, farmworkers, and wildlife? Gee, why only 10%? Why not 20%?)
So, being humble was a virtue. Of course, companies maintained hope that some enterprising reporter or activist would catch them in the act of being good and lead to positive press or word of mouth. It happened from time to time, but not often enough.
Now things are changing. As the conversation has ratcheted up in recent months, being quiet is no longer an asset. Companies are being pressed to talk about what they're doing — and not doing — by customers, employees, investors, activists, and others. Previously reclusive companies are rethinking their taciturn strategies.
Suffice to say, shyness isn't something that becomes a lot of companies, many of which have no problem shouting their stories from the rooftops. Some of these stories are worthy of attention; many aren't. Unfortunately, there's no correlation between signal and noise, as a recent study by the U.K. firm Genesys Conferencing found out:
U.K. companies are failing to match fine words with positive action in implementing green policies throughout the business, with fewer than one third of respondents believing that they are moving strongly or very strongly to adopting 'green' policies in their organisations.
"Visitors to any company's website today are almost certain to find a stated commitment to the environment," says Jerona Noonan, sales director, Genesys Conferencing. "Yet, as this survey shows, to-date in most businesses this has not been put into practice in the form of positive environmental initiatives.
The need to align the walk-talk ratio has caught the attention of those in the business of helping companies tell their stories. They, in turn, are sharing their insights with the rest of us. A sampling of what's crossed my in-box in recent weeks:
confirms the existence of a green gap between the communications and language commonly used by companies and stakeholders in the energy and environment space and customers' understanding, acceptance and perceptions of value around terms such as energy efficiency, energy conservation, demand response, smart energy and clean energy. The green gap in communications contributes to a growing misalignment between customers' stated intentions, e.g., their desire to be more green or frugal with energy consumption, and their actual behavior
Translation: When it comes to energy and environment, companies don't speak to consumers in a language they understand, undermining green behavior.
For example, most consumers can't articulate the difference between the "energy conservation" and "energy efficiency" and only one in three Americans understands the term "smart energy." Four in ten don't know what "demand response" refers to (and the rest are probably lying — it's pretty geeky terminology).
What does it all mean? The sum of all of these reports is pretty clear: Talking the green talk is no simple matter, what with the lack of definitions, the high expectations, and the countless critics and watchdogs ready to pounce if you don't get it right. The public is hungry for companies to look up to, but they don't trust what they hear. Like an oft-spurned lover, they are cautious and wary of being seduced — though always hoping that this time it just might be the real deal.
February 18, 2008 in Green Marketing | Permalink | Comments (10)
The State of Green Business, 2008
My colleagues and I at GreenBiz.com have just published State of Green Business 2008, an accounting for how, and how much, the greening of business is moving the needle on environmental issues.
The simple answer: not much — and certainly not enough.
I'd been thinking about this report for a good five years, but it was only last year that my team and I got to it. Probably a good thing: The state of data on business and the environment likely wouldn't have been sufficient in previous years to accomplish this.
The free, 64-page report includes the top green business stories of the year just passed — a lengthy piece I'd previously debuted in this blog (see here, for example). But the heart of the report is the GreenBiz Index, a set of 20 indicators of progress on the greening of business.
It began with a simple question: With all that's been going on in this arena — all of the things I write about here, and the 1,000 or so news stories we reported last year on GreenBiz.com, ClimateBiz.com, GreenerBuildings.com, and GreenerComputing.com — what was the actual impact? Was all this activity actually moving the needle on climate change? Was it reducing our use of energy, water, and materials? Was it making any difference?
We set out to find out.
It was extraordinarily difficult, one of the more challenging exercises I've been through. The quantity and quality of available data were wanting, to say the least. Some of the things we set out to measure weren't possible — for example, it turns out there's no current data on the use of water by business and industry in the United States, the focus of our inquiry. In other cases, we had to cobble together our own indices, such as piecing together the quantity of materials - cardboard, aluminum, steel, and glass - used for packaging.
But the effort was worth it. We believe that the GreenBiz Index represents the best accounting of business progress on the environment.
Of course, I'll look forward to your comments. We'll be updating this annually.
The report is free, downloadable here.
January 30, 2008 in Business Practices, State of the Art, Trendwatching | Permalink | Comments (6)
Clorox Aims to Show that 'Green Works'
Can a major consumer packaged goods company with a name indelibly associated with household bleach become a leading light in the green marketplace? That's the hope of Clorox, the Oakland-based company, which this week is launching its first new brand in twenty years: Green Works, a line of cleaning products that are, in the company's words, "at least 99 percent natural" — made from coconuts and lemon oil, formulated to be biodegradable and non-allergenic, packaged in recyclable bottles, and not tested on animals. The initial launch includes five products: an all-purpose cleaner, a glass cleaner, a toilet bowl cleaner, a dilutable cleaner, and a bathroom cleaner.
It's an intriguing moment. Green Works enters the marketplace with a near perfect storm of market conditions: growing mainstream consumer demand for green products that don't require compromise or sacrifice; significant interest from Wal-Mart and other big retailers in pushing greener products to the masses; a product that seems competitive with the leading green brands; and endorsement from Big Green.
That last item comes in the form of an "alliance," just announced, with the Sierra Club, which has endorsed Green Works and whose logo will appear on Green Works labels starting around Earth Day. Sierra Club will receive an unspecified financial payment. Sierra Club doesn't often endorse products, especially ones from big companies. The last one I can recall was Ford's Mercury Mariner Hybrid SUV, back in 2005.
The idea of Clorox as a green leader may strike some as odd. The company is known mostly for its flagship product, Clorox Bleach, which is seen by some as a stain from an environmental perspective, though the company says the product is misunderstood and safe. (Green Works products do not contain bleach.) Household bleach, it explains, is a water-based solution containing six percent sodium hypochlorite, whose chemical symbol, NaOCl, is essentially table salt (sodium chloride, or NaCl) with a molecule of oxygen. That is, bleach comes from, and degrades into, salt. (You wouldn't want to drink it, but you wouldn't want to eat a cup of salt, either.) Moreover, the company points out, bleach's disinfectant properties are essential to public health — endorsed by the World Health Organization and others.
Some environmentalists warn against using bleach, pointing out that it is toxic and corrosive and can create suspected carcinogens in the water supply. Suffice to say, Clorox refutes this. "The bleach cycle — from production to use to environmental fate — is simple and sustainable," it maintains.
So, can The Clorox Company become a green brand leader? I spent some time last summer talking with the company about Green Works, part of a small consulting project. I was asked to help Clorox think through how it was positioning both Green Works and the company itself in advance of the product launch. I met with the Green Works brand and marketing managers, as well as the company's corporate responsibility staff — a relatively new function there.
What I found was that the company — whose brands include Glad, Formula 409, Liquid-Plumr, S.O.S. Pads, Kingsford charcoal, Ever Clean kitty litter, Brita water filters, Hidden Valley salad dressings and, as of about ten weeks ago, Burt's Bees personal care products — had a relatively blank slate from an environmental perspective. It did not have any significant skeletons. It enjoyed a solid compliance record, has joined several voluntary programs to reduce waste and emissions, and has received modest recognition for its performance. Except for concerns about bleach, it has been largely off activists' radar. From an environmental perspective, it was neither a leader nor a laggard.
Under CEO Don Knauss, who joined the company in 2006 from Coca-Cola, Clorox began to recognize that environmental and social sustainability are of growing importance for the company. By the time I showed up in July, Clorox had undertaken efforts to reduce its packaging and had begun to inventory its carbon footprint across its North America operations. (Among other things, the company is working to make the Green Works manufacturing process carbon neutral.)
Green Works seems to have potential to be a breakthrough brand — a line of cleaners competitive, environmentally speaking, with the leading green brands like Seventh Generation and Method, effective enough to wear the Clorox label, priced less than other green cleaners, and enjoying widespread distribution; Wal-Mart, for one, will be featuring the products in its stores. If one of the goals of the green consumer revolution is to get brand leaders to create greener products at affordable prices, this seems a significant step in the right direction.
Green Works' roots go back about three years, when a small group of individuals within the company began investigating the green-cleaning market and conducted market research. Through a market-segmentation exercise, they identified a slice of the consumer market they dubbed "Chemical Avoiding Naturalists," consumers who wanted greener cleaners but felt the incumbent products didn't work well, came from brands they didn't know or trust, were too expensive, and weren't always available where they shopped. These are the folks who want strong, effective cleaners, but worry about their health effects — the ones who say, "Let's open the windows and send the kids outside — we're going to clean now!"
As the team developed and tested products with real consumers, they recognized they had a potential hit. "We were actually in a perfect position as a company," Jessica Buttimer, Green Works' director of marketing, told me last fall. "We have the Clorox brand. We have these distribution channels and great relationship with Wal-Mart. We have the science to make an efficacious product. And we have the scale to charge just a 20 percent premium, not a 100 percent premium." Moreover, Buttimer and her team found that consumers trusted the Clorox brand and the fact that a greener cleaner was coming from a company they'd known for years.
But the kicker was that the product actually did what it was supposed to do. "We did blind testing versus the market leaders," says Buttimer. "We were at parity or better in performance, which as a chemical company, you can imagine, was a huge surprise — that these things, with 99% or more natural ingredients, work as well as Lysol, 409, and Pine-Sol."
Time will tell whether Green Works will be a game-changer — whether it will make green cleaning more affordable and accessible to the masses. But the potential is there. Clorox doesn't launch a new brand unless it sees a $100 million or greater market opportunity.
But there's a potentially bigger story here. Clorox — a 95-year-old, relatively stodgy company — seems to have discovered its green gene. CEO Knauss has identified sustainability as one of three core consumer trends with which he wants to align Clorox products. The combination of Green Works, Burt's Bees, and Brita give it a toehold in that market space, a foundation on which it can build more offerings. Already, additions to the Green Works line are being planned.
All of which has invigorated the company, says Buttimer, a thirtysomething mother of two who has become the corporate face of Green Works. "I can't keep my calendar clear of associate marketing managers, our entry-level positioning and marketing people, asking, 'How do I work on this project?' Or people coming to me and announcing, 'My parents are members of Sierra Club.' Everyone wants to be involved."
Moreover, she adds, "What's really exciting is that we're building knowledge and confidence within the rest of the company that we can do the same things with a lot of our other product lines."
A green Clorox? Anything's possible.
January 13, 2008 in Business Practices, Green Marketing | Permalink | Comments (18)
News Flash: 110% of Consumers Shop Green!
This just in: pretty much every consumer is concerned about the environment and is thinking conscientiously about what they buy — how it's made, under what conditions, and by whom. All you have to do is make good, green stuff and they'll buy it! We've reached the tipping point!
Sound too good to be true? It is, of course. But you wouldn't know it from the marketing studies I've been seeing — and the breathless headlines that result. As they continue to invade my in-box, I find myself getting increasingly irritated. Can market researchers be accused of greenwash? I'm beginning to wonder.
Two examples:
I don't profess to have studies that refute these, but you don't need to be a social scientist to know that neither of the above conclusions is on the money. Half of consumers do not consider sustainability when buying packaged goods — everything from cosmetics to cleaners, Rice-a-Roni to razor blades. (Do half your friends and family members shop this way?) And to think 90% of us are "conscious consumers" when it comes to the planet? C'mon. Half of us aren't even conscious about what we put into our bodies.
Such studies aren't new. They have been coming out for years, boasting about the high percentage — usually, a significant majority — of consumers that say they are integrating environmental and social considerations into their purchases. I've written about some of these in the past (see here, here, and here).
I don't mean to suggest that any of these research firms are misleading us. I know many of these people, and they are as earnest and diligent as the day is long. They ask questions, get answers, and crunch the numbers. But common sense — or simply looking around — shows us how far reality is from these numbers. Walk the aisles at your local supermarket or big-box retailer. How many of the products you see reflect sustainability values? How about the companies that make them? How about the stores that sell them? How many shoppers are bothering to ask such questions?
Things are changing in ways that make some of these reports more sinister than seductive. Over the past six months, the G-word — greenwashing — seems to have risen from the dead to become a vibrant part of the conversation. There's now a Greenwashing Index, a Greenwash Brigade, greenwash lists, and lots of handwringing. And, of course, the Six Sins of Greenwashing.
It's all good. As the number of companies making green claims grows — by the way, has anyone actually measured that growth? — we need vigilant watchdogs, even though there's far from unanimity about what is, and isn't, greenwash. (Ad Age's list of 2007's best and worst is telling — note that GE (via NBC Universal), Toyota, and Wal-Mart all showed up on both the good and bad lists.)
In that light, these green consumer studies seem something of a sucker punch. "Come on, jump in. There's a vast audience waiting to buy what you sell. But it better be damn green, and your messaging better be pitch perfect in both tone and content. And your company better not have any skeletons, or be doing anything environmentally untoward or selling other products that don't seem green."
We want it both ways. We want companies to do better, to green up their products, and to distribute them far and wide. We have high hopes and higher expectations. But we lack standards and basic agreement about how good things have to be — the products as well as the companies that make them.
How does a company operate in an world of hyped-up market research, few norms or standards, and sky-high expectations from consumers and activists who monitor their every move?
I'm not suggesting that we take whatever companies dish out. We need to shift products and markets in significantly greener directions. And they need to be good-quality, affordable products. Anything less is wasting our time and money — both limited resources, one of them nonrenewable.
What do you think? Should we be flaunting studies that don't jibe with societal or market realities, then punish manufacturers that seek to tap those markets if they are less than perfect? How do we accelerate the growth of the green economy and still maintain high standards? How do we encourage companies that are trying, while pushing them to aim even higher?
To what standards should we hold companies? To what standards should we hold ourselves?
January 10, 2008 in Green Marketing | Permalink | Comments (8)
Gary Hirshberg: Changing the Culture and 'Stirring It Up'
I've long been an admirer of Gary Hirshberg, the idealistic and iconoclastic "CE-Yo" of organic yogurt maker Stonyfield Farm, which he co-founded in 1983. I first met Hirshberg a decade later, in 1993, when researching my book about corporate social responsibility, Beyond the Bottom Line. I recall being impressed at the time by his passion and commitment, but also his humbleness and honesty. "I think whatever your definition is of social responsibility," he told me at the time, "if the message is, 'Look how great we are,' then you're missing the boat." It was a refreshing change from so many companies' arm-waving, self-congratulatory approaches to social responsibility, both then and now.
Hirshberg not only didn't miss the boat, he caught a wave, becoming the market leader in organic yogurt, the third best-seller after Dannon and Yoplait, with steady annual growth. In 2001, Stonyfield hitched a ride with a much bigger vessel, the French food conglomerate Danone, which subsequently took controlling interest in the company but left Hirshberg firmly at the helm. Indeed, in the deal, Danone ended up with about 80% of the company, but Hirshberg ended up with majority control of his board.
All of which further empowered Hirshberg to pursue, and align, his dual missions of commerce and environmental sustainability. His $300 million-a-year company — built with almost no traditional advertising — has been carbon neutral since 1996, the first company to do so, long before it became corporate chic. And it's not just by writing a check to offset its emissions. Over the past decade, the company (via the tireless efforts of Hirshberg's sister, Nancy, Stonyfield's VP of Natural Resources) has reduced its facility energy use and the associated carbon emissions per pound of product by one-third. Stonyfield's products are 100% organic, and it has helped hundreds of family farms convert from conventional farming. The company has worked to minimize waste, going so far as to collect used yogurt cups and lids and recycle them into useful products. And it uses its product labeling for activism, devoting precious real estate on yogurt lids to advance environmental causes.
Hirshberg's company has been an ardent supporter of such causes. Stonyfield's Profits for the Planet program has given 10% of company profits to organizations "that help protect and restore the environment." Hirshberg got Danone to agree to maintain the program for at least 10 years after he leaves the company, whenever that is; he has no plans to do so. And he has funded his own campaigns, lately focusing on climate change. (I sit on the board of Climate Counts, which Hirshberg launched last year to rate companies on their climate commitment and performance. In 2006, I also co-wrote and executive produced a Stonyfield funded Internet movie on climate change.)
I talked with Hirshberg recently on the occasion of his just-published book, Stirring It Up: How to Make Money and Save the World. It was a wide-ranging conversation, focusing not just on his company but the larger worlds of green marketing and green business. (An excerpt from that interview can be heard on GreenBiz Radio.)
I don't usually care for books like this — the success stories of socially-minded entrepreneurs. There's been a steady stream of them over the years, and they tend to border on vanity publishing. So, I was pleased that Hirshberg's offering doesn't follow in this mold. It's an easy, enjoyable read, inspiring and informative, integrating his personal journey with insights and takeaways for others.
It's clear that Hirshberg's zeal goes well beyond yogurt, or organics, or climate change. He sees his mission in part to infect other businesses — both entrepreneurs and conglomerates — to help them understand the potential for producing products, and profits, while following the basic tenets of environmental sustainability and social responsibility.
Perhaps ironically, Hirshberg's entrepreneurial journey was inspired by the food giant Kraft: After touring a Kraft-sponsored pavilion on the future of food at Disney World's Epcot Center in Florida in 1982, he decided he wanted to build a company that was everything Kraft was not. He was struck by the fact that 25,000 people came through that exhibit every day — about the same number that visited the New Alchemy Institute, the nonprofit he ran at the time, every year. As he told me: "I said to my mom, who was the senior buyer down at the Epcot Center, 'I need to become Kraft, if I want to move my values and my ecologic proposition into the mainstream. I've got to have that kind of reach.' I wanted to become as efficient as they were in reaching the consumer."
Funny thing is, he pretty much did it. Fourteen years after that epiphany, Stonyfield passed Kraft in sales of yogurt, and has really never looked back. Its yogurt business is now five times Kraft's.
But there's an even more delicious irony. Kraft has recently begun making organic products: Macaroni & Cheese, Cheese Singles, Oreos, and more. Says Hirshberg: "The reality is that while I set out to be like Kraft, I'm now very pleased to tell you they've set up to be like us."
Talk about just desserts.
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(Postscript: I'll be conducting a one-on-one interview with Hirshberg on February 19, at the Commonwealth Club in San Francisco. Info and tickets here.
January 6, 2008 in Business Practices | Permalink | Comments (4)
The Hottest Tickets for 2008
A new year, a new calendar of green and clean events. Mine is looking awfully busy, with new conferences and events joining old reliable ones.
This spring, three new events will be hot (and pricey) tickets. In chronological order:
- ECO:nomics — the Wall Street Journal's first-ever environmental event, March 12-14, in Santa Barbara, Calif. This is about as high-level as it gets, featuring CEOs Jeff Immelt of GE, Andrew Liveris of Dow, James Rogers of Duke, Lee Scott of Wal-Mart, and Patricia Woertz of ADM. Plus: John Doerr, Vinod Kholsa, Robert Lutz, Robert Reich, and Arnold Schwarznegger. Oh, and Ed Begley, Jr. Being the Journal, there will be a healthy representation from the neocon crowd, such as Fred Singer of the Competitive Enterprise Institute, no doubt talking about how all this corporate do-good stuff is a distraction from the business of making money; Junk Science author and Fox News columnist Steven Milloy; and Red Cavaney of the American Petroleum Institute. Clearly, the Journal doesn't want any riff-raff: There's a $3,495 registration fee — if you can score an invitation.
- Aspen Environment Forum — the premiere of the Aspen Institute's foray into the environmental world, March 26-30, in Aspen, Colo. The conference is an outgrowth of the Aspen Ideas Festival I've written about in the past. The emphasis here is on conversation over cachet, with four dozen or so thought leaders: NGO leaders like NRDC's Frances Beinecke, Earth Policy Institute's Lester Brown, Pew Center's Eileen Claussen, and the Rocky Mountain Institute's Amory Lovins; entrepreneurs like Energy Innovation's Andrew Beebe and New Resource Bank's Peter Liu; environmental justice advocates Majora Carter of Sustainable South Bronx and Van Jones of the Ella Baker Center; and an assortment of corporate types, journalists, scientists, and others. I'll be leading a session on corporate environmental strategies. Registration is $1,700, though discounts are available to "government and non-profit employees, international guests, and university faculty and students."
- Brainstorm: GREEN — Fortune magazine's entry, April 21-22, in Pasadena, Calif. Another invitation-only event, this one will focus, as its name implies, on interactive brainstorming. Organizer (and GreenBiz blogger) Marc Gunther, senior writer at Fortune covering corporate environmental and social responsibility, has brought together a diverse group of speakers, including CEOs (Dell's Michael Dell, Sam's Club's Doug McMillon, Dupont's Chad Holiday), NGO leaders (NRDC's Beinecke, US Green Building Council's Rick Fedrizzi, Ceres' Mindy Lubber), and assorted others from Autodesk, Conservation International, Goldman Sachs, GreenOrder, Herman Miller, Marriott, McDonald's, McKinsey, Union of Concerned Scientists, and more. As Gunther told me recently: "I'm hoping to get beyond the discussion of companies 'going green' to ask what impact they are having, and whether they are changing fast enough, given the scale of the problems." I'll on a panel titled "The Green Consumer: Myth or Reality," with Sam's Club's McMillon and Gary Hirshberg of Stonyfield Farm, moderated by Arianna Huffington. Admission is $2,000, but, like the Journal event, you've got to apply.
There are others. This year, being even-numbered, brings back the biennial GLOBE conference (March 12-14, in Vancouver), which brings together a vast audience of corporate and NGO types from Canada, Europe, and the U.S. This year's GLOBE features a piggy-back conference Auto FutureTech Summit 2008, another premiere event, co-produced by HyrbidCars.com impresario Brad Berman.
And finally, the fourth annual Clean-Tech Investor Summit, co-produced by my colleagues and I at Clean Edge (February 6-7, in Palm Springs, Calif.). As in past years, we'll assemble 500 or so clean-tech entrepreneurs, thought leaders, and investment professionals for presentations and conversation in a solar-drenched locale. Should be good.
Keep in mind, those are just the highlights. There are many more opportunities to learn and schmooze this year. Check the calendars on GreenBiz.com and Clean Edge for more.
Just remember to offset those travel emissions.
January 1, 2008 in State of the Art, Trendwatching | Permalink | Comments (9)
Introducing . . . The Eco-Friendly Cigarette?
What would you say if I introduced you to an environmentally friendly cigarette — one made of organically grown tobacco, with organic cotton filters, rolled in eco-friendly paper, all manufactured with renewable energy, with a portion of proceeds going to environmental charities?
I'm guessing you would call it greenwash. And you'd be right. After all, a cigarette is a cigarette, in terms of the health effects on its users. No green manufacturing techniques would render it "good." At best, it would be "less bad," but not by much.
Given that, I'm bemused and bewildered by the recent efforts by bottled water companies to aggressively market a less-bad product. Two examples:
At a recent conference at which I spoke, attendees were given bottles of Ice Mountain Natural Spring Water, with signs promoting its "New Eco-Shape™ Bottle." Among its green characteristics: it is made with 30 percent less plastic than the "average" bottle of its size. And it features a label that is 30 percent smaller.
That's not all. It is "100 percent recyclable" . . . "Easy to carry" . . . and "flexible so it's easier to crush for recycling."
It doesn't take a PhD in marketing to see that these claims are pretty thin. A label that's 30 percent smaller?!? If that's the pinnacle of environmental achievements, we should all give up now.
And then there's the latest blast from Fiji Water, which is trumpeting that in 2008 it will introduce "the first 'carbon negative' consumer product." According to the announcement:
As one of the fastest growing, leading premium bottled water brands in the world, Fiji Water's new aggressive environmental program — Fiji Green — aims to "green" every step in the life cycle of its products, from packaging and shipping to the use of renewable energies and land preservation efforts. As a result, Fiji's will lessen its environmental impact by actually reducing carbon in the atmosphere with every bottle of Fiji Water produced and sold. No other major beverage brand has ever made a similar commitment to help mitigate the effects of climate change.
And there you have it: the eco-friendly cigarette — two bottled-water brands that are attempting to "green up" their products, and their images, by doing less bad.
Bottled water isn't a cigarette, of course. It doesn't cause cancer, emphysema, birth defects, and the like. So, my analogy is, admittedly, a bit dramatic.
But bottled water causes plenty of problems. Its production taxes the water tables of the communities where bottling plants are located, according to the Earth Policy Institute. Farmers, fishers, and others who depend on water for their livelihoods suffer from the concentrated water extraction when water tables drop quickly.
And then there's the energy use. EPI notes that:
In contrast to tap water, which is distributed through an energy-efficient infrastructure, transporting bottled water long distances involves burning massive quantities of fossil fuels. Nearly a quarter of all bottled water crosses national borders to reach consumers, transported by boat, train, and truck.
Or consider the fact sheet I re