Peak sustainability? Thankfully, not….

Dave Stangis and Tod Arbogast at the GreenBiz Forum

Dave Stangis and Tod Arbogast at the GreenBiz Forum

Have we reached “peak sustainability”? It’s an intriguing, and a worrisome idea, the notion that the much-hyped green business wave of the late 2000s has come and gone. But a day spent at the GreenBiz Forum in New York, where the idea of peak sustainability was bruited about, leads me to believe — and to hope — that we are nowhere near a peak.

Peak sustainability is a term coined by John Davies, a vice president and senior analyst at GreenBiz, who works with dozens of big companies. As part of the excellent  State of Green Business 2013 report, John has tracked the hiring of sustainability professionals by big companies and found that it has leveled off in recent years. He wrote:

It appears the wave of major companies hiring their first full-time sustainability executives crested long ago….If hiring a senior executive to champion and coordinate sustainability efforts full-time is a leading indicator of future efforts, there’s a case to be made that such efforts may have plateaued…. Could it be that pretty much everyone who’s coming to this party has already arrived?

sportsillustratedMeantime, marketing and media devoted to corporate sustainability, as well as to all things green, appears to be slipping. The high profile greening initiatives at GE, IBM and Walmart are lower profile lately. Remember the cover story on global warming in, of all places, Sports Illustrated? That ran way back in 2007. If SI has returned to the topic, I missed it. Its parent company, Time Inc., laid off its sustainability team as the magazine business slumped.

But as the GreenBiz Forum unfolded, an array of speakers, including both senior executives from big companies and idealistic young entrepreneurs, described how they are moving sustainability initiatives forward inside their organizations. Not fast enough, surely not boldly enough, but often in innovative ways that are likely to spread. Some examples:

Microsoft’s carbon fee: The technology giant has since last July imposed an internal carbon fee on all its divisions, requiring them to pay a “tax” for each ton of greenhouse gas emissions that they generate, whether by operating data centers, taking business trips or heating and cooling office buildings. Tamara (TJ) DiCaprio, MSFT’s senior director of carbon and energy, said that the carbon fee is helping to focus executives throughout the company on efficiency, as well as creating a pool of revenue–roughly $10 million this year–that can be deployed to finance efficiency measures and buy renewable energy credits and offsets to help the company achieve its carbon-neutral goal.

Asking each division to pay a cost of carbon, she said, drives environmental accountability through the organization. “Suddenly, on their p-and-l, people see a carbon fee,” she said. How much is MSFT charging per ton? She declined to be specific, saying only that “we started with a price that wouldn’t shock the system.” But she said the company projects that the $10 million in annual revenues generated by the fee is expected to grow to $50 million by 2020.

This is an innovative notion, and one that other companies–Shell and Disney, among them–have put into place. They’ll all be better prepared if governments around the world come to their senses and choose to price carbon. For more, here’s a recent GreenBiz interview with TJ.

yerdle-city-squareSharing is caring: Instead of trying to make big companies “less bad,” as they have done for much of their careers, Adam Werbach and Andy Ruben started Yerdle last fall to try to change the way people think about consumption. Yerdle is a platform for giving things away, and getting things you need, all at no cost–as a way to discourage wasteful consumption and encouraging sharing. [See Joel Makower's story, Can yerdle turn consuming less into the next big thing?]

So far, Adam said in his presentation, things are going well–the website has about 10,000 members, most in San Francisco, it is growing at a rate of about 6% per week, and it is rolling out this week in New York. He talked about his own career trajectory, as he moved from leading the Sierra Club to consulting for Walmart to his startup. Incremental change is valuable, Adam acknowledged–he talked some about the benefits of reducing the materials and energy that go into a plastic fork–but he’s more excited by the potential for changing the way that people consume. “It’s a lot more fun talking about the good” than it is trying to minimize the bad, he said.

“Sharing will become the new shopping,” he said. We can only hope.

Wall Street, friend of the planet?: Erika Karp of UBS and Matt Arnold of JPMorganChase are working from the inside out to raise awareness of the environmental risks and opportunities facing the big investment banks and their clients. They’re both passionate about sustainability which made my job–moderating their conversation–easy.

Erika oversees all of global sector research at UBS, and says she is having some success persuading analysts that research into ESG–environmental, social and governance–provides a window into the quality of corporate management. “Arguably, all these ESG metrics are a proxy for quality,” she said. If her hypothesis is right, companies that pay heed to their long-term environmental risks and opportunities will over time outperform their peers. That remains to be seen.

Matt described JPMorgan’s extensive efforts to first understand the environmental risks of hydraulic fracturing, and then to work with nearly 100 of the bank’s clients that engage in fracking, in an effort to persuade them to share best practices. That’s gone well, he said. Harder, he said, has been making the case that the big banks should turn away from financing companies that build coal plants in the developing world, particularly in places like India where hundreds of millions of people desperately need electricity.

There was much more packed into the day–sober talk about the energy, food and water risks from Andrew Steer of the World Resources Institute, an inspiring presentation from Kavita Shukla, the young founder of Fenugreen, which makes paper that keeps fruits and vegetables fresher, longer–check out her story–and sage advice on navigating a CEO transition from two veteran sustainability executives, Tod Arbogast of Avon and Dave Stangis of Campbell’s. Tod and Dave have been at this a long time, and both worked for CEOs who were strongly committed to environmental responsibility–Andrea Jung at Avon and Doug Conant at Campbell. Jung was forced out and Conant stepped down, but their successors are not pulling back on sustainability efforts, according to Tod and Dave.

Peak sustainability? No. Slow and steady progress? Yes. More to come tomorrow from the GreenBiz Forum.

Comments

  1. I’d agree, Marc.

    The definition of Peak Sustainability in the report is nonsensical – CSOs are a means to an end not an end in themselves. All the metric is measuring is the maturing of the sustainability as a leadership issue idea.

    When we start running out of sustainability ideas is when sustainability will peak, and we’re a long way off that yet!

  2. Mark, In agreeing with you, I’d say that CSR is just in its infancy. Most new buildings are not “net zero”; sustainable companies are producing no more (and sometimes less) recyclable packaging in the name of volume reduction; there are trace pharmaceuticals in the water supply; regardless of what you think of the technology, there are no long term solutions for coal or nuclear waste in use; design and production cycles for products such as apparel and electronics are shorter, resulting more products; nanotechnology is used with food and apparel with unknown possible future impacts. Species and habitats are still threatened. I could go on…
    CSR will need dedicated staff to steer and develop programs and respond to currently unknown challenges. Will diversity teams, financial staff or other professionals be RIFed when their metrics are achieved ? Not likely.
    A long term, wider context reveals the future potential for these efforts and hopefully the profession for those of us who enjoy the career challenges.

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