Steps towards sustainable business
It must be the season for newspapers and magazines to look at how well businesses are doing in greening themselves. The New York Times and the Guardian have run supplements, while Fast Company and Business Voice have prominent articles. The NYT looks most interesting in terms of trends; it suggests that we have reached the third phase of businesses improving their environmental impact.
Phase 1 was reducing their energy consumption by cleaning up their own direct consumption. Phase 2 was trying to encourage their consumers to clean up their consumption (albeitoften by selling them more stuff. Now Phase 3 is about addressing the carbon impacts of their supply chain.
A couple of quotes from the article give a flavour of it:
“Carbon footprint is absolutely new territory,” said W. Drew Schramm, a senior vice president at the furnishings company Herman Miller and a member of the committee on social responsibility at the Institute for Supply Management, a trade group. “We’re not sure how we’ll measure it, we’re not sure how we’ll deal with it, but we’ve told our suppliers, ‘Get ready, because we’re going to ask you a lot of questions.’”
In September, Wal-Mart announced a pilot program with suppliers of seven common items — DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda — to measure and reduce the amount of energy used in making and distributing them. In marketing and store displays, Home Depot gives preferences to its EcoOptions line of environmentally friendly products, and the company has said it would favor suppliers that came up with a new category of green product, like a recyclable power tool.
I’m probably willing to give Herman Miller slightly more credence here, since their business model doesn’t involve exporting environmental impact (e.g. by driving to the store) to their customers, and because it’s generally in the business of long-life products rather than encouraging consumption. (Its Mirra chair is currently 96% reusable on the cradle-to-cradle model, and it was engaging with its supply chain five years ago). But it is still good, obviously, that companies are wrestling with this.
From a ‘greened business’ perspective, of course, the emissions created by your suppliers in your service would be included in your products as a matter of course. Otherwise you get the current ‘China Syndrome’ (the other side of the Wal-mart coin) of exporting your dirty secrets to someone else, along with the absurdity of being able to green your footprint by simply outsourcing everything.
In fragmented supply chains that is difficult, and the excuses are already starting to be made:
General Electric, for one, does not include supply-chain emissions when it calculates its carbon footprint. “We’ve drawn the boundary around activities over which we have operational control, and our reduction efforts are focused within that boundary,” said Peter O’Toole, a G.E. spokesman.
But that’s not a long-term response; either sectors will end up collaborating to create common industry standards, or – certainly in Europe – they will be regulated, if governments are serious about carbon reduction. The NYT quotes Hewlett-Packard’s Bonnie Nixon Gardner:
If you’re going to make a real difference, you have to let go of your corporate ego… Many of us are operating in the same regions, with the same suppliers, even in the same factories, so our voice together is going to be much more powerful.”
Timberland, likewise, is working with competitors to “create a common means of evaluating the supplier’s carbon footprint.”
Fast Company, meanwhile, has a list of 50 things business are doing to green themselves. They’re snapshots, obviously, but they give a sense of the current landscape.
In case that cheers you up, it’s worth turning to the Guardian’s Green Guide, the paper’s annual survey of environmental progress. It’s clear that business is heading in the right direction, but probably not at the right speed. Some quick points: only 68 of the FTSE 100 firms were willing (or able) to disclose their carbon emissions (there’s data attached to the article); while six of the world’s ten largest companies are in the oil or the car sector, and are likely to make environmental haste slowly. 75% of NGOs and the general public agree (according to a MORI poll) that “industry and commerce do not pay enough attention to their social responsibilities” while 48% of investors and 30% of ‘captains of industry’ agree. (And only 26% of Conservative MPs; maybe David Cameron has a tougher task then he anticipates in creating a ‘green Conservatism’).
On the positive side, the same MORI poll reports that 45% of businesses say that environmental degradation is the most important issue facing business – placing it top of the list. (A recent Shaping Tomorrow poll which I can’t currently find had a different result, to my surprise but not theirs). And the two articles on initiatives by London, and by individual American states, suggest that more local approaches may be more effective than waiting on governments. Businesses wanting a ‘no excuses’ approach to ethics and environmentalism can check in with the Co-op.
Business Voice, the CBI’s monthly magazine, asks if the UK can be the “world’s green champion?” [No links, since site was down at timw of writing]. There are profiles of various ‘cleantech’ (environmental technology) companies, all of which seem small and fairly early stage to me. The answer seems to be ‘up to a point’, especially in marine energy technology (all that sea and all that technical North Sea oil expertise), providing the government will back the industry with appropriate investment. The role of government – as a regulator or enabler – is critical to getting to green business on a sufficiently quick timescale. But Business Voice, and the corporate lobby in the US, would be complaining loudly if the government suggested that regulation or sanctions were necessary to reduce carbon emissions rapidly enough to bring global warming under control.
Thanks to Core 77 for the NYT lead.