Though even that can be profitable. The ecoefficiency initiatives that characterized early sustainability efforts delivered nearly half a billion dollars to Interface‘s bottom line 1996-2012—contributing more than a third its total operating income in that period (and probably kept the company alive during the 2001-2 real estate downturn, according to its late CEO Ray Anderson).
Growing top line revenue makes a much more interesting story to most companies than trimming expenses, even as dramatically as Interface has done. After Natural Logic helped Levi Strauss & Co build its sustainability strategy a few years ago, Levi’s® took its learnings to market. In a big way. Guided by lifecycle assessments that pegged the biggest shares of footprint for a pair of blue jeans to growing cotton and laundering the jeans—both activities outside its direct control—the company took responsibility and took two bold steps (among many others):
In fact nearly half of the 2600 respondents to the latest Sloan/BCG sustainability survey say they’ve “changed their business models as a result of sustainability opportunities,” and more than one-third reported profit from their sustainability initiatives.
Where can companies find those opportunities?
We’ve learned, in our work with Natural Logic‘s clients, that the real opportunity lives in deep innovation at the constellation of profit, brand, risk —and purpose. Taken together, in their interactions and interdependencies, this constellation opens the door to a new level of business value in service of societal and environmental impact.
In fact many of the 29 companies that participated in WBCSD’s Vision 2050 project (“a new agenda for business laying out a pathway to a world in which nine billion people can live well, and within the planet’s resources, by mid-century”) found that what the world really needs—and what they know how to do—and perhaps is what they’re really here to do.
And yet… while 49% of CFOs (in a recent Deloitte study) saw a significant link between sustainability performance and financial performance, “only 39% feel that it is ‘very’ important to communicate the value of sustainability to their employees.”
To be continued…
It’s this: The best of “sustainability”—for all the momentum, progress and enthusiasm of the past decade—just isn’t good enough. But the problem is not just with the word (though I’d like to go on a fast and just stop using it for a month).
No, what if the entire “sustainability” conversation is misconceived? What if we’re asking the wrong questions, in the wrong ways? What if we’re setting our sights far too low, settling for what’s reasonable, familiar, predictable, when the challenges of the both the human prospect—and economic success for both businesses and nations—require something far bolder and more disruptive.
If the International Energy Agency is correct, and we need to leave 70-80% of proven fossil fuel reserves in the ground to have a reasonable chance against the worst of climate change, what’s the future of the global energy industry? (And a global finance industry that will have to figure out how to strand those assets.) Will you be a winner or a loser?
If some of the most significant companies in the world didn’t even exist a decade or so ago, what will your industry look like a decade from now? Will some upstart disrupt the ground out from under you? Or will you burn your own bridges, and reinvent your own future?
If a planet moving toward a population of nine billion by 2050 demands unprecedented breakthroughs in how we do everything—to sustain that population in health and freedom, and in ways that restore and renew the living systems that sustain us all—will you be able to find and execute the business models that enable you to thrive economically?
Here’s the biggest challenge—one Natural Logic faces nearly every day: Most people—including many of the best executives at many of the world’s best companies—still act as though they have to choose between making money and making sense, as though there’s a necessary tradeoff between economic success and environmental well being. In fact, the growing body of data—from both our own direct experience with our clients and the trends we are tracking around the world—points to some of the biggest business opportunities of the century. As a 40+ year veteran of this field, I am staggered again and again at the scale of the financial opportunity—and the opportunity to make a difference—for the companies, entrepreneurs and investors willing to embrace it.
While some cite “fiduciary duty” to justify their reluctance,fear or resistance to change, others—from Interface to Unilever—see fiduciary duty as one of the very reasons to drive change, as a partner to vision, innovation and courage.
Where can you find these opportunities? How can you capture them? We’ll explore some specific examples in coming weeks.
In his latest blog post, veteran journalist Marc Gunther asks Have I fallen in love with Walmart? It’s a long, thougthtful piece, responding to an even longer piece in Grist.
“I’ve written dozens of stories about the retail giant, Gunther writes. “…I’ve been critical at times…but most of my coverage of the company’s sustainability effort has been laundatory [sic].”
Now here comes Stacy Mitchell, a smart reporter, with a six-part series in Grist called Walmart’s Greenwash: Why the retail giant is still unsustainable. She assails Walmart for promoting suburban sprawl, making only token efforts to buy renewable energy and selling cheap throwaway stuff. She also faults mainstream environmental groups for focusing “on the small bits of good that Walmart could do—reduce PVC in packaging, for example—while ignoring the much larger consequences of its ever-expanding business model.” She also says that she has been “shocked by just how much of a public relations boost the media have given the company and how little public accountability they have demanded in return.”
Here’s the comment I posted at Marc’s site:
Thanks for this piece, Marc, and the thoughtful perspective. WalMart’s a mixed bag, to be sure (ain’t we all!), but it’s just way too easy to criticize, and damn hard to transform a large organization, and to get everything right. (Once again, who of any of us has?)
I completely agree with you re “The Sustainability Index” — WalMart’s “100% renewable energy/zero waste/only sustainable products” declaration has probably generated more sustainability awareness in businesses around the country than any single from regulators or NGOs. We’ve seen an immediate and profound impact on the flow of companies that come to us at Natural Logic, and the kind of assistance they’re looking for. WalMart deserves ample credit for moving the agenda at tens of thousands of companies.
But I strongly disagree with you about “Cheap Stuff.” As Dave Gustershaw of Interface is fond of pointing out, each additional kilogram of stuff moved an additional kilometer means (all things being equal) more environmental impact, so the challenge of “sustainable consumption” — and the related challenge of “how can companies make more money selling less stuff?” — are on a very short list of questions at the heart of the matter. (The others: getting the prices right, and escaping the trap of short-term-ism — but more on those another time.) I just don’t buy it when companies say “we’re just responding to consumer demand” and then spend billions to _shape_ that consumer demand.
By the way, why would buying solar “put the company at a competitive disadvantage” when it doesn’t do that for “Kohl’s, Whole Foods Markets, Starbucks and Staples”?
PS: WalMart isn’t us. The “us” who shop there (or don’t) do have substantial impact on what they do, and yes, markets do move business decisions, but it feels just a wee bit too simplistic, in these days of TARP x 11, to suggest that “we’re all one.”
We lost a giant this week. An insipration. A friend.
There have been many moving and eloquent tributes. Here’s mine.
Ray Anderson was a man of big heart, generous spirit, penetrating vision, fierce commitment.
He inspired and taught so many – including me – that yes, we could dream our dreams, and even bigger dreams. AND bring them in to being in the world. Even in the supposedly cold, hard, just-the-facts ma’am world of business.
Ray was able to show, at Interface, that sustainable business leadership could be bold, not tentative, and that it could be profitable.
For all his visibility, so much of what Ray did was invisible. But indispensable. (Few people know that Ray was one of the people that Walmart CEO Lee Scott turned to shape Walmart’s pivotal sustainability initiatives.)
I’ve heard Ray speak dozens of times — every chance I got, really — starting in 1994 (at Pam Lippe & James Nixon’s pioneeing sustainable economy conference in New York, and soon after at U of Oregon) when the spear in the chest story was still fresh, and “Tomorrow’s Child” was already the culmination of his talk, as it would remain for the next decade and a half.
I watched his journey unfold, as he brought in his “dream team” of Benyus, Browning, Fox, Hawken, Lovins, Lovins, McDonough, Piccard, Porritt, Quinn, Robèrt, Stahel to help figure out the HOW of the WHAT that was increasingly clear. As he turned to The Natural Step to help build shared framework that could get the entire Interface organization aboard — down to the fork lift drivers.
I watched him in the film The Corporation (actually I watched him hold the film together), and thought “This man is a prince” — in the very best, archteypal sense of the word.
We’ve been in retreat together, with the Tipping Point Network, and with his leadership team, and it was clear that what you see is what you get.
Most recently, we were together at the Sustainable Industries breakfast in San Francisco — he the keynote, me introducing him and handling the Q&A. He recounted his journey through the motif of “What if a company…?”, chronicling the successes down to the dollars and tons, concluding “I know this is possible, since this is my company, and we have done this. I told him then that I’d heard him speak 20 times over the past decade and a half, and that it kept getting better and better.
A lot of executives get hung up on “the business case” for sustainability. Not Ray. He understood (as I’ve written before) that the business case doesn’t tell you what to do; your heart does. “What’s the business case,” Ray would ask, “for destroying the planet?”
Tuesday evening, as many of us were reeling from the loss, a friend asked “With Ray gone, who will step up now?” I knew immediately how I would answer her, and posted this video:
Who? Me. And you.