Forward-thinking companies are coming to realize that sustainability isn't just good for their bottom lines; it makes it easier to win over customers and compete in the market, said three corporate greening experts convened at Climate One on Friday, April 15. As new tools such as carbon accounting software become more sophisticated and widely adopted, the panelists said, benefits will accrue not only to more efficient companies but to customers better able to trust companies' green claims.
A tricky starting point, said Eric Olson, Senior Vice President, Business for Social Responsibility, is for companies to figure out whether they should they be listening to their customers, or leading them. Olson leans toward the latter. "There is a school of thought that says what we are talking about is so complex that what consumers want is for us to solve the problem for them," he said.
"They're not going to sit down and ask for fair trade coffee – they don't even know what that is. But they do know that they want a product that doesn't have practices behind it that they wouldn't believe in," he added.
In a relatively recent shift, companies aren't making green strides just because regulators forced them to. "Sustainability leadership about five years ago was very compliance oriented. Sustainability leadership today is about competitive advantage. It's about innovation," said Glen Low, Principal, Blu Skye, a sustainability consultancy.
"Five years from now, what will sustainability look like? It won't look like PR; it won't look like compliance. Ideally, you'll have moved to system-level changes where the costs of things that have been, from an economics point of view, externalized actually do get internalized – whether it's carbon, whether it's water," he added.
In a rapidly changing landscape, smart companies that pivot toward efficiency now, be they small firms or industry giants, will be big winners, said Michel Gelobter, Chief Green Officer, Hara. "There are a lot of companies, like a Wal-Mart, that are taking pretty aggressive actions right now," he said. "The biggest value of scale is the size of the bets that you can win. The best use of large capital is winning big-risk bets. There's a history of very big industries emerging from these kinds of pivotal moments." Sustainability represents one of those pivotal moments, he said.
All the positioning among agile companies looking to gain a green edge has led to a relatively new development, said Eric Olson: companies influencing policy in a progressive direction. "It's a very tricky space to work in, to be honest," he said. “What’s the difference between lobbying for your near-term tactical interest versus trying to influence policy in a way which has strong elements of the common good?"
We have seen it with climate legislation, he said, citing the emergence of coalitions such as the US Climate Action Partnership and Business for Innovative Climate & Energy Policy (BICEP). These companies, Olson said, are clamoring for Congress to act, by stating: "We need a level playing field. We need incentives. We need long-term, predictable signals around the cost of energy sources in order to be as competitive as we should be."
– Justin Gerdes
April 15, 2011
Photos Ed Ritger
The Commonwealth Club of California