Fortune Brainstorm Green, and the limits of corporate sustainability

Harrison Ford at Fortune Brainstorm Green

Harrison Ford at Fortune Brainstorm Green

The 2013 edition of Fortune’s Brainstorm Green conference was, by most accounts, a hit. We had a record number of attendees, including more than 50 CEOs of companies and nonprofits, big and small; plenty of entertaining and informative conversation; and a healthy dose of fun, with celebs like Harrison Ford, will.i.am and (my favorite) ultra marathon runner Scott Jurek. As co-chair of the event since the first Brainstorm Green in 2008, I love to reconnect with colleagues and sources, meet new folks and learn from and, occasionally, by inspired by our top-notch speakers. The theme of the conference has been a constant: How can business profitably help solve the world’s most important environmental problems?

Unavoidably, the challenge of an event like Brainstorm Green (as well as a conundrum for anyone who writes about corporate sustainability) turns on the question of how much to cheer or jeer the efforts of companies that are trying to “go green.” My job, as I see it, is to do both–to applaud the leaders, to prod the laggards, and to do my best to tell one from the other. That’s difficult balance to do in a conference setting where the mood is one of bonhomie, where the speakers are our “guests,” and where the presumption is that everyone is doing the best they can. The trouble is, that’s usually not good enough.

Mark Tercek at Brainstorm Green

Mark Tercek at Brainstorm Green

As Mark Tercek, the CEO of The Nature Conservancy, who I interviewed at Brainstorm Green, put it in his excellent new book, Nature’s Fortune:

Nearly every precious bit of nature–teeming coral reefs, sweeping grasslands, lush forests, the rich diversity of life istelf–is in decline. Everything humanity should reduce–suburban sprawl, deforestation, overfishing, carbon emissions–has increased.

Sad but true.

So if corporate America is changing for the better when it comes to the environment–and no doubt, many companies are–the pace of change is too slow and the ambitions of business leaders are too modest. Incremental change is not getting us where we need to go.

Eco-efficiency, recycling when it makes economic sense (but not when it doesn’t), the occasional solar panel on a retailer’s roof (but a continued dependence on fossil fuels), modest targets for greenhouse gas emissions reductions  — they’re not getting us where we need to go.

Why not? What struck me at Brainstorm Green is that companies aren’t getting much help. They’re not getting help from the US  government, which, above all, needs to take action to curb carbon emissions, and they’re not getting help from consumers, who, for the most part, are unwilling to pay extra for “green” products or services, or to reward the more responsible companies with their business.

Under those circumstances, it’s probably naive to expect any but  a handful of most forward-thinking companies to demonstrate environmental leadership. Which is why only a handful or two of companies are truly pushing the envelope — Patagonia, Unilever, Nike, Coca-Cola on water, Starbucks, Google on energy and climate, Walmart with its supplier index, and a handful of others, all of whom were represented at Brainstorm Green. Others are going only so far as they have to go.

Tom Steyer

Tom Steyer

“Counting on the good will of private enterprise, which I have tremendous respect for, will not work,” said Tom Steyer, the investor, environmentalist and philanthropist, during a panel on Wall Street and sustainability.

So, for example, while banks are willing to seek out opportunities in clean energy–financing solar power or energy efficiency projects–they will not  turn away from money-making deals to finance coal plants or oil exploration in Canada’s Tar Sands. And why should they, so long as coal and oil companies and their customers, i.e., you and me, can freely emit all the carbon pollution they want into the atmosphere.

As Amanda Starbuck of the Rainforest Action Network told me by email, after joining in a breakout session titled “Are Big Banks Green, or Brown or Both”:

I think we concluded at breakfast this morning that big banks are significantly brown, only a very little green, and that the current generation of CSOs (chief sustainability officers) have a serious challenge on their hands to fundamentally shift the banking industry from short term thinking to long term investment, if we’re to rise to tackle environmental threats on the scale of climate change. RAN will continue to push!

That’s good, but until the reputational costs of financing coal exceed the benefits–an unlikely prospect–we can’t expect banks to turn away from coal. It will take either strict EPA rules or a steep price on carbon or even cheaper natural gas to get rid of coal plants in the US.

Bob McDonald of P&G

Bob McDonald of P&G

Meantime, well-established public companies  have few incentives to turn away from business as usual so long as business as usual delivers shareholder returns. Bob McDonald, the CEO of Procter & Gamble, delivered what amounted to a corporate commercial–yes, we all know by now that Tide Cold Water has big energy-saving potential. The fact is, the most disruptive innovations in laundry detergent in recent years have come from Method, a startup, and rival Unilever runs circles around P&G when it comes to sustainability.

As Method founder Adam Lowry noted, Method was the first company to concentrate its detergent into smaller bottles (ahead of Small & Might All, then owned by Unilever) and it now offers the most ultra-concentrated detergent on the market. Method also makes some bottles for its dish and hand soap out of ocean trash. Of course, until a whole lot more mainstream consumers embrace Method, its cleaner, greener products won’t have the impact they should.

Linda Greer of NRDC

Linda Greer of NRDC

The most sobering presentation of the conference came from Linda Greer, the plain-spoken director of the health and environment program at the Natural Resources Defense Council, who described manufacturing in China as an “environmental apocalypse” and said western multinationals have ignored “egregious pollution problems” there. They may report on greenhouse gas emissions but they ignore the horrors of air and water pollution to which they contribute. Greer did not name names, alas, but we’ll invite her back next year to learn more about who’s doing a good job of dealing with conventional pollutants and health risks in China, and who’s not.

Now, all the news at Brainstorm Green was not bad–not by a long shot. Indeed, there were presentations and conversations that were encouraging and, yes, inspiring. I was impressed by GM’s CEO, Dan Akerson. David Crane of NRG remains the most creative utility executive around. I learned about some great green startups, and about an innovative partnership between Coke and inventor Dean Kamen. And  I loved hearing the story of a small company called Mountain Hazelnuts that is having a big impact in Bhutan. So I promise more cheers (and no jeers) in my next blogpost, in a day or two.

Comments

  1. Stuart says:

    Marc,
    You quote and write:

    “Nearly every precious bit of nature–teeming coral reefs, sweeping grasslands, lush forests, the rich diversity of life istelf–is in decline. Everything humanity should reduce–suburban sprawl, deforestation, overfishing, carbon emissions–has increased.”
    “Sad but true.”

    I say this statement is incorrect. North America, Europe and Russia are clearly environmentally better off than they were 50 years ago. Wouldn’t you agree?

    There is every reason to believe that as Asia becomes wealthier (assuming we allow this to happen) it will be better off 50 years from now. The same can be said for the rest of the world.

    Unfortunately, the environmentalist obsession with carbon emission reductions threatens both economic growth and diverts attention from “traditional” pollution and wildlife issues. This obsession is particularly troubling as there is an insistence that somehow we can materially reduce carbon emissions without the use of nuclear power, a notion that violates the laws of algebra and physics. (whether nuclear adoption is a better option than increased carbon in the atmosphere is a different question)

    Stuart

    • Marc Gunther says:

      Stuart, you’re right that the US and EU are in many ways better off environmentally than they were 50 years ago, and not just because they are wealthier, but because they passed laws regulating air and water. They also exported a lot of dirty industry to the developing world. But Mark Tercek is correct that globally, the oceans are acidifying (a little understood but dangerous threat), biodiversity is declining (ditto) and, most important, carbon emissions are growing.

      Re nuclear, like you, I wish environmental groups would support it with the same enthusiasm that they support wind and solar power and electric cars.

      But what you call “the environmentalist obsession with carbon emission reductions,” I would call prudent concern about the not-so-distant future of the planet.

      • Three replies.

        Don’t forget Russia, I contend it also is in environmentally better shape than 50 years ago. (Although for different reasons than the U.S. and Europe.)

        My point about wealth creation is that it affords people the “luxury” to be concerned about the environment and pass the laws that you mentioned.

        Your belief that carbon emissions pose a threat is certainly with merit, but there are no free lunches. The fact remains that all the talk and energy put forward on carbon reductions over the past 25 years have done nothing to meaningfully impact carbon emissions. Wouldn’t you concede that our planet would be “healthier” if these efforts regarding climate change had been concentrated on what I am calling more “traditional” environmental concerns – concerns for which a broader consensus would be more easily reached? I believe you have addressed this point before.

        • Ed Reid says:

          Stuart,

          In the ~35 years since climate concerns shifted from cooling to warming, there is still no unique, broadly accepted GOAL for CO2 emissions reductions, no PLAN to achieve that absent GOAL and no TIMELINE for its achievement. (“You’ve got to be careful, if you don’t know where you’re going, because you might end up someplace else.”, Yogi Berra, American philosopher)

          The increases in CO2 emissions, as well as the increases in the emissions of criteria pollutants, are occurring in Asia. The increasing emissions of criteria pollutants in Asia are the result of failure to install appropriate control equipment, or to operate that equipment on a regular basis. China, demonstrably, is experiencing dramatic air quality and human health problems as a result.

          If the nations of the globe are concerned about reducing carbon emissions, the first logical step in that process would be halting the increases in carbon emissions. There currently appears to be little interest in halting the increases in emissions on the part of the nations which are responsible for the increases. That does not bode well for a reversal of course.

  2. Can you imagine aligning the gears of two giant machines; the economy and ecology?

    It will require a transmission containing ecocommerce, shared governance and symbiotic demand.

    It will not take brute force, but elegance.

    • Very gracefully put. I enjoy reading about the new developments out there now like the solar powered trans-american flight, and the solar panel parking lot. Neither of these are corporate initiatives, but the greater their success, the harder their technology will be to ignore.

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