Recycle Bank

Big business’s big innovation problem

October 21, 2010

To create a new green economy, industrial capitalism must destroy itself. Disruptive, radical, breakthrough innovation is needed, on a mass scale. Government isn’t delivering the change we need. Can business step up to the challenge?

Innovation is on my mind because I’m just back from the GreenBiz Innovation Forum, a two-day event devoted to “sustainable innovation.” The San Francisco confab brought together smart and dedicated business people who engaged in lots of stimulating conversation and did some fun stuff—like trying to build a tower out of uncooked spaghetti, tape and a marshmallow. There’s video, photo and print coverage here.

I came away wondering whether the emerging orthodoxy of green business – one that is willing to settle for incremental changes by big companies, and clever but insubstantial breakthroughs by small ones—is going to get us where we need to go.

Two examples:

Procter & Gamble sets “carbon intensity” targets, meaning that it will produce its products (Tide, Bounty, Cascade, Crest, etc) with less energy. But because of the company’s growth imperative, it will pollute more, not less, in absolutely terms. [See P&G: A bold green vision but...]

Stonyfield Farm devises a corn-based yogurt cup, which gets us closer to a zero-waste, cradle-to-cradle consumption model. But the bigger challenge is to get  petroleum out of cars, trucks and planes, not yogurt cups.

These initiatives deserve applause, and their stories are worth sharing. But let’s not fool ourselves into thinking that they are the kinds of innovations that will deliver the environmental change we need.

Tim O'Reilly

The GreenBiz event was a reminder that big, multibillion dollar corporations aren’t good at disruptive innovation, even when they try. They don’t attract the right people; inventors and creative thinkers are repelled by cultures with lots of meetings, process, politics, budgets  and bureaucracies. Big companies are slow to move. They aren’t about having fun—and as Internet mogul Tim O’Reilly noted in a lively and provocative talk at GreenBiz breakthroughs are often driven by people  (the Wright brothers, the hackers who started the computer revolution, the Google guys) who want to have fun or make something cool.

Even when facing existential threats, big companies don’t cannibalize themselves, as Clayton Christensen has written. Newspapers didn’t invent Craiglist, which destroyed their classified business. The record industry tried to fright iTunes. My cool new “barefoot” running shoes (below), which challenge the business of conventional running shoes,  come from Vibram, an upstart, not from Nike or Adidas. Ford and GM didn’t invent Zipcar, and BP ain’t going beyond petroleum. [click to continue…]

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Sustainable consumption: Opportunity or oxymoron?

August 19, 2010

Imagine that you’re the chief sustainability officer of a FORTUNE 500 company. During a meeting with your CEO, you say: “We need to talk to consumers about using less.”

Improbable? Sure.

Impossible? Perhaps not.

An important conversation to start? Absolutely.

So, at least, says Aron Cramer, the CEO of Business for Social Responsibility (BSR), a nonprofit association of companies, whose mission is to promote a just and sustainable world.

“The American model of consumption cannot be extended to the entire world, and won’t be, because the planet simply can’t support it,” Aron told me, when we spoke by phone the other day. Yet billions of people around the world want to improve their standard of living. Figuring out how they can enjoy a better life, without destroying the environment, “is the mother of all innovation challenges,” Aron says,

Last month, BSR published a 26-page report called The New Frontier in Sustainability: The Business Opportunity in Tackling Sustainable Consumption [PDF, free download). It’s an attempt to get business leaders to think about what sustainable consumption might look like.

The topic “has been the third rail of sustainability politics,” Aron told me, but he added, with his usual optimism, that “more companies are ready to have this discussion.”

If nothing else, the report makes clear the urgency of the issue. Citing a WWF report [PDF], it says:

By recent estimates, our global footprint now exceeds the world’s capacity to regenerate by about 30 percent, and if our current demands continue, by 2030 we will need the equivalent of two planets to maintain our lifestyles.

And yet:

…countless people have insufficient access to basic needs like food, clean water, and adequate shelter, and they also lack access to the resources they need to improve their lives. In 2006, the 1.2 billion people in the OECD countries had an average annual income per capita of US$30,580, while the 5.4 billion people in the rest of the world earned an average of US$3,130. Of those, 19 percent suffer from hunger, 28 percent are drinking polluted water, and 29 percent are illiterate.7 More than 2 billion people continue to rely on less than US$2 per day to meet their needs.

The question is, what business opportunities, if any,  await companies that figure out how to give poor and middle class people what they want in a sustainable way? [click to continue…]

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