In the last two weeks, I’ve had conversations on my radio show with two gentlemen who work with very different ends of the business spectrum.
Last week, I spoke with Graham Russell, Executive Director of CORE Colorado. CORE is a non-profit business association dedicated to promoting more environmentally and socially responsible business practices in Colorado and the Rocky Mountain West. CORE’s constituency tends to be small to medium businesses, and Graham is much more interested in reaching traditional businesses rather than preaching to the choir.
Much of the attention to sustainability in the business world is on the big companies. CORE, in conjunction with the University of Colorado at Denver Business School, recently undertook a survey of small-medium businesses to fill in the picture. The study found a surprising amount of initiative and progress among businesses that don’t necessarily think of themselves as “green”. The reasons for change vary – in some cases, business owners just feel it’s the right thing to do. Others are driven by competitive and customer pressures. A few cited compliance with regulation – but having said that, most small businesses hate regulation.
The picture is very different for big business. In my interview today, with Will Sarni, CEO of DOMANI Sustainability Consulting, he pointed out that many of the biggest industrial companies in the US have joined in the United States Climate Action Partnership to lobby the federal government for more greenhouse gas regulation. For big companies, acting unilaterally to reduce emissions – if it raises costs – serves as a “prime mover disadvantage”. So, they want a level playing field, at a new level.
Between big and small businesses, there are also big differences in the amount of “greenwashing” going on, being the act of making oneself sound more sustainable than one really is because it’s good PR. According to Graham, greenwashing is big company branding issue. Smaller businesses can’t afford the PR machinery to create the story in the first place. In the big companies, according to Will, greenwashing backfires pretty quickly given the ever increasing level of transparency in the marketplace. Given the current economic climate, many companies that aren’t really sincere about sustainability are abandoning the story and just focusing on hanging on to their “base”.
Notable, and to me shameless, exception being Detroit’s Big Three, offering to come up with greener cars, if we will only save them. Like a drunk, showing up at church on Sunday and offering repentance, with a bottle hidden in his pocket. The last so called “American” car I bought was a piece of junk, and I’ve been driving mostly Japanese, but “made in North America” cars ever since. I have no sympathy.
But I digress….
I’ve been impressed with the thinking of Bob Willard on how companies evolve into sustainability. He sees sustainability in business as a continuum. Yes, a lot of companies start out ignoring sustainability, actively resisting it, then grudgingly complying with whatever it is they are pressured to do. To me, greenwashing is a stage in which a company recognizes that someone out there – customers, employees, regulators, investors – cares about sustainability. So, they are at least acknowledging those values by making sustainability claims, even if they aren’t sound. Eventually, they realize it’s in their own self interest to be real about it, and move forward. I’m still impressed from my conversation with Don Beck two weeks ago, with his willingness to meet people where they are and open the way for them to evolve.
One big constraint on sustainability is that businesses are tending to view it as a cost, therefore something to be avoided. Maybe we decide to endure the cost, because it’s the “right thing to do” and customers value it. But the real opportunity for business, according to Will, is seeing sustainability as a top line focus. That is, innovating new products in the business to business, or business to consumer, markets that help customers save energy and reduce waste. This involves rethinking the product itself, and creating new value.
A prime example, and well worth rethinking, is the automobile. One of the most mind-blowing ideas I’ve heard in the last year is the idea that electric cars can become an interactive part of an intelligent electrical grid. One of the issues with wind power in particular is that it blows more at night, when demand for electricity is lowest. And there’s nowhere to store the juice. Except in millions of cars, with their batteries plugged in, resting in their garages for the night.
