Coca-Cola Enterprises

The anatomy of a latte

February 25, 2009

Have you ever wondered how much water it takes to make a Starbucks grande latte? I hadn’t until I met Jason Clay.

Jason is a Missouri farm boy who earned a Phd in anthropology from Cornell, wrote a definitive book on agriculture and the environment and is now senior vice president for market transformation at the World Wildlife Fund. (I wrote this column about him last year for fortune.com.) He’s one of those people who is always bursting with both facts and ideas, so I was pleased to run into him today in Atlanta, where we had both been invited to speak to senior executives of Coca Cola Enterprises, the big bottler of Coke products and a FORTUNE 500 company in its own right. CCE is doing great work on sustainability, but that’s another story.

Jason’s presentation was mind-expanding, as usual, but my favorite part came when he analyzed the “embedded water” in a Starbucks latte. There’s a terrific video about this at the WWF website; view it by clicking on the coffee cup.

Here’s the breakdown, by liters, of the water needed to make that latte:

0.1 for the water itself
2.5 to make the plastic lid
5.5 to make the paper cup and sleeve
7.5 to grow the sugar
49.5 to feed the cows that make the milk
143 to grow the coffee

That adds up to more than 200 liters of water to make a latte.

Now, this doesn’t mean we should stop drinking lattes. The water to grow coffee, after all, comes in the form of tropical rainstorms, which are abundant. And a bowl of Rice Krispies with milk has a much bigger water footprint: According to Jason, roughly 58% of all the water on the planet used by people for any purpose—farming, manufacturing, cooling nuclear power plants, swimming pools, showers—is used to grow rice. His point is that we, collectively, need to better understand the full environmental impacts of all that we consume. Then we need to make and grow things more efficiently, and consume less of them.

That not as simple as it may sound. One common mistake in the world of business and sustainability is to optimize for a single outcome—sell more organic cotton, say, or wild-caught fish, or fair trade tea—without understanding the overall impact of  products on water, energy, soil, land use, even poverty alleviation. Favoring organics might, for example, limit the development of genetically modified foods that require less water and fewer fertilizers. Clay’s open to the idea of GMOs as tools to grow more calories on less land. “Let’s be a little more neutral on the technology,” he says, “and a little more focused on the results.”

The need for clear thinking about such matters is urgent because population and, more important, consumption are growing fast.

“We’re beginning to wake up to the fact that we live in a finite world,” Clay says. “Business as usual is not going to set things right.”

“The average cat in Europe has a larger environmental footprint than the average African over a lifetime because of the fish it eats,” he says. [I’m going ask Jason for the data to back up that claim next time we meet.]

So what’s he doing to provoke change? He’s working with big companies like Coca-Cola, Mars, Procter & Gamble and Wal-Mart, urging them to take a thorough, science-driven approach to their supply chains, so they use less water, produce fewer greenhouse gases, make less waste and protecting forests. That’s because these companies have scale and clout.

“Working with 300 to 500 companies is easier than working with 6.7 billion consumers,” he says.

Of course, consumers should be urged to reduce, reuse and recycle, but Clay argues that it’s unrealistic to expect even committed and well-informed consumers to drink their coffee black or switch from Rice Krispies to oatmeal.

“Consumers shouldn’t be asked to make those choices,” Clay says. “We think they ought to have only good choices on the shelves.”

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A new green sheriff in town

February 12, 2009

Coca Cola Enterprises claims its aluminum cans contain more than 50% recycled content.

Clorox claims its Greenworks all-purpose cleaner is made with plant and mineral-based ingredients.

And GE claims its compact fluorescent lightbulbs use up to 75% less energy and last up to 10 times longer than standard bulbs.

How do we know that those claims are true?

The fact is, we don’t. My experience tells me that the risk of exposure and embarrassment is enough to deter any big brand-name company from lying about the environmental attributes of its products. But there’s lying, and then there’s telling a selective truth or merely leaving out inconvenient facts.

What we need is a reliable, independent and trusted source to analyze such claims, the way websites like Politifact separates truth from fiction in the political arena. One organization that could emerge as a standard-setter, fact-checker, product-tester and verifier has been around for more than a century—Underwriters Laboratories. These are the people who test thousands of products to make sure they meet strict safety standards. Last month, Underwriters Laboratories launched a new subsidiary called UL Environment. It’s intended to help industry and the public make sense of the “green” claims that are flooding the marketplace.

Think of UL Environment as the new green sheriff in town.

“There’s a lot of greenwashing out there,” says Marcello Manca, who is vice president and general manager of UL Environment Inc. “We want to get rid of some of the confusion.”

I spoke by phone with Marcello, who’s based in Milan, Italy. He’s an Italian who got an engineering degree from the University of Nevada, spent 13 years working in Nevada and California, and then returned home to Italy. The president of UL Environment is Steve Wenc, a Chicago native now based in Geneva. UL has 66 offices, clients in 104 countries, 127 inspection centers and it employs about 5,000 engineers, scientists, chemists and technicians. A nonprofit that oversees a group of for-profit subsidiaries. UL is paid by the manufacturers of the products it tests and certifies.

Marcello told me that UL Enviromnent initially plans to focus on two categories, building materials and consumer goods. The company intend to begin by verifying environmental claims about energy, water use and recycled content.

“One of our employees recently purchased an all-natural mattress for his newborn child because he didn’t want his son to be exposed to chemicals,” Marcello told me. But because manufacturers of products ranging from household cleansers to children’s toys are not now required to disclose their ingredients, claims like “all-natural” are hard for consumers to verify.

UL Environment also hopes to establish standards for sustainable products, working in an open and transparent manner with manufacturers, retailers and NGOs. This, too, will require the cooperation, and financial support, of manufacturers, many of whom are existing UL clients.

“We’re taking a very pragmatic approach,” Marcello says. “Our intention is not to make the world perfectly green from the outset. We know that’s Mission Impossible.”

Finally—and this gets really interesting—UL Environment would like to take a broad look at company operations. So, for example, if a product claiming to be “green” is made by a supplier in China who pollutes a nearby river or the air, UL Environment could decide that the product failed to meet its standards.

“There is a school of thought that says that you cannot build a green product unless you are a green company, too,” Marcello says.

What’s intriguing about all this is that standards are enormously important to business. Think about how the organic standard has affected the food industry. Or how the Energy Star rating has driven appliance-makers to sell more efficient dishwashers or refrigerators. Or consider the impact of the LEED building standards on the real estate industry. An array of sustainability standards has the potential to drive green business practices deep into the economy.

Of course, that makes it sound simple, and it’s not. Devising standards and getting them recognized is a long and complex process, requiring value judgments. As my friend Joel Makower is fond of asking, “How green is green enough?”

What’s more, Marcello says: “Doing it right is expensive. Doing it right takes a lot of passion.”

UL Environment will have to convince manufacturers, retailers and consumers in the midst of a global recession to invest in environmental claims verification and sustainability standards. It won’t be easy. But it will worth watching closely.

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