Sustainability at McDonald’s. Really.

coffee-cupHere’s a question. Which trio of companies has done more for the environment…

Patagonia, Starbucks and Chipotle?

Or Walmart, Coca-Cola and McDonald’s?

I don’t have an answer. Patagonia, Starbucks and Chipotle have been path-breaking companies when it comes to sustainability, but Walmart, Coca-Cola and McDonald’s are so much bigger that, despite their glaring flaws, and the fundamental problems with their business models, they will have a greater impact as they get serious about curbing their environmental footprint, and that of their suppliers.

Small and mid-sized companies create sustainability solutions, as a rule, but the impact comes when big global corporations embrace them. Size matters.

All that is by way of introduction to my latest story for Guardian Sustainable Business, about McDonald’s coffee-buying practices and the role of the consumer in driving them to scale.

Here’s how it begins:

Across the US, McDonald’s last week introduced pumpkin spice lattes made with Rainforest Alliance-certified espresso. No such assurance comes with McDonald’s drip coffee. Why? Because consumers haven’t yet shown Mickey D’s that they care.

That’s gradually changing, says Bob Langert, the vice president of sustainability for McDonald’s, and not a moment too soon. As the world’s biggest fast-food chain, which has 34,000 restaurants in 118 countries, seeks to make its supply chain more environmentally friendly, McDonald’s is trying to enlist its customers as allies.

That’s why the pumpkin lattes marketing features the little green frog seal of approval from the Rainforest Alliance. That’s also why McDonald’s fish sandwiches, for the first time, feature a blue ecolabel from the Marine Stewardship Council certifying that the pollock inside comes from better-managed fisheries.

By talking to consumers about its sustainability efforts, McDonald’s hopes to build brand trust and loyalty. Until recently, people had to dig into the company’s website to learn about its environmental performance.

“We’ve had sustainable fish for many years, but we didn’t tell people about it,” Langert told me during lunch in Washington DC. (He ordered fish.) “We feel there’s a tipping point coming. We see the consumer starting to care. Consumer expectations are rising.”

What McDonald’s is doing with its coffee isn’t innovative. Starbucks paved the way. But if McDonald’s, Dunkin’ Donuts, 7-Eleven, Walmart, Costco, Target and others follow, the world’s coffee farmers will be a lot better off.

Meantime, McDonald’s is leading the way as it encourages potato farmers to use fewer pesticides and less fertilizer, as the story goes on to say. And it could potentially have a huge impact as it tackles its most important supply chain–beef.

Elitists will scoff at everything McDonald’s does, of course, and some of their criticisms have merit. A Big Mac, it’s safe to assume, has a big carbon footprint. Eating too much food from Mickey D’s (or anywhere else) makes people fat. I’d like to see fast-food chains pay their workers better, even if that means customers will have to pay more for breakfast or lunch. But on the environment, McDonald’s is moving in the right direction. Just as important, the company is trying to move its customers along, too.

You can read the rest of my Guardian story here.

An odd couple? HR and sustainability

savitz(5)Today’s guest post comes from Andrew Savitz, the author of a new book called  Talent, Transformation and the Triple Bottom Line: How Companies Can Leverage Human Resources to Achieve Sustainable Growth (Wiley 2013). As you can guess from the title, Andy argues that employees are the key to creating sustainable companies, but that they–and their colleagues  in human resources–are often overlooked when companies embark on environmental programs. I think he’s onto something. I’ve long thought that the single biggest business driver of corporate sustainability initiatives is the way they help better companies attract better people and motivate the ones they have.

Andy has been his career working with companies on social and environmental issues. A lawyer by training (and before that a Rhodes scholar at Oxford), Andy has been a congressional staffer, the general counsel for the Massachusetts Office of Environmental Affairs and head of the environmental advisory practice at PriceWaterhouseCoopers (PwC). Since 2005, he has led a consultancy called Sustainable Business Strategies.

Here’s our online conversation:

Marc: You say that you’ve written the book “in large measure to bridge the gap between sustainability and HR.” HR? Really? Why do we need human resource people to get involved with sustainability? They don’t know anything about carbon emissions, say, or LED lighting, do they? [click to continue...]

Can shopping save the world? Maybe not, but it can help.

The activist and filmmaker Annie Leonard, who created an Internet sensation back in 2007 with her 20-minute animated movie The Story of Stuff — it’s been viewed more than 15 million times — is back with the new video called The Story of Change.

In the video, she urges “viewers to put down their credit cards and start exercising their citizen muscles” to build a more just, sustainable and fulfilling world.

Turning for inspiration to Gandhi and the Rev. Martin Luther King Jr., she argues that buying “green” is no substitute for the hard work of political organizing.

“The solutions we really need are not for sale at the supermarket,” she says.

The movie runs for about six minutes. Take a look:

The idea that we need to take political action to deal with big environmental and social problem is both inarguable and unremarkable. It should be obvious that we can’t shop our way to the regulation of carbon pollution or to a more equitable tax system.

But I think Leonard has it exactly backwards when it comes to the power of consumers. Like many on the left, she seems to see the economy into “people” (good because we pursue health, happiness, well-being) and “corporations” (bad because they pursue profits, exploit and pollute). But, for the most part, we get the corporates that we deserve. Those that meet the needs of people thrive. Those that fail to satisfy will wither away. Put simply, the power of consumers is formidable.

That’s why I think that environmental and social activists ought to devote more, not less time, to changing consumer behavior. The food we eat, the cars we drive, the size of the houses we build and buy and other choices we make have significant global environmental consequences–particularly because Americans are, on a per capita basis, among the biggest polluters on the planet. [See my 2010 blogpost,  Can behavioral economics help save the planet?] [click to continue...]

Behavioral economics at Starbucks

Starbucks generates 4 billion paper cups a year. Yikes! That’s about 12 cups for every man, woman and child in America.  The company has been working hard, with an array of partners, to build a system to enable these cups to be recycled.

Meantime, though, there’s a way to reduce some of that waste: Charge customers 10 cents for every paper cup they use.

As it happens, the company already does just that. It just doesn’t do it in an effective way. The result is that Starbucks is missing a big opportunity to have a lighter environmental footprint.

Let me explain. Starbucks now offers its customers 10 cents off the price of any beverage if they bring their own mug. It doesn’t make a big deal out of this but the information is available on its website on a page headlined Make A Difference. It says:

Join the movement. Bring a reusable travel mug and get a 10 cent discount on any Starbucks beverage, anytime.

One person can save trees, together we can save forests

Which sounds great. Except that if Starbucks really wanted to save trees, it wouldn’t offer discounts to people who bring mugs. It would charge a dime to everyone who does not.

Notice, I’m not suggesting that Starbucks change its prices. I’m only recommending that the company change the way it talks about its prices. [click to continue...]

At Starbucks and Thanksgiving Coffee, it’s not just a cuppa joe

A coffee farm in Costa Rica

Aside from being in the coffee trade, Starbucks and Thanksgiving Coffee would appear to have little in common.

Seattle-based Starbucks is a FORTUNE 500 company (2011 revenues: $11.7 billion) that sells its brews all over the world, pursues global dominance (its latest outpost is Helsinki) and owns an iconic  brand. The company bought about 428 million pounds of coffee last year.

Thanksgiving Coffee is a family-owned, artisan roaster that sells most of its coffee to grocers, specialty stores and restaurants near its home base in Mendocino County, CA, where the other popular crop is often smoked. Thanksgiving bought about 500,000 pounds of coffee last year.

Yet the big coffee company and the little one share a couple of important goals.

First, they want to win the trust of their customers and, of course, their own employees. One way to do that is by showing them that their coffee is ethically-sourced. Starbucks talks about responsibly grown coffee, citing its Coffee and Farmer Equity (CAFE) Practices, a set of social, economic, environmental and quality guidelines. Thanksgiving’s slogan is ““Not Just a Cup, but a Just Cup.”  Reputation matters, whether you are big or small.

But, even if reputation didn’t matter (and to most customers, it probably doesn’t), Starbucks and Thanksgiving need to devote their attention to the social and environmental practices of their growers, upon whom they depend for a reliable supply of high-quality coffee. If their coffee farmers run into trouble–because of low coffee prices, poor environmental practices or climate change–Starbucks and Thanksgiving will struggle, too.

The other day, I wrote about the Fair Trade movement and its efforts to improve the lives of coffee growers. (See my blogpost, A Schism over Fair Trade.) About 9 percent of the coffee sold by Starbucks in the US is certified as Fair Trade; about 75%  of Thanksgiving’s coffee is Fair Trade certified. Today, I’ll dig a bit deeper into the ways Starbucks and Thanksgiving work with growers. [click to continue...]

A schism over Fair Trade

Paul Rice is a man on a mission.

The 51-year-old president and CEO of Fair Trade USA, who has led the group since 1998, says he wants the practice of Fair Trade to become bigger, engaging more consumers and helping more farmers around the world. To that end, Fair Trade USA last year quit the international Fairtrade Labelling Organizations, or FLO, an international federation of fair trade groups, to pursue a vision that Rice calls “Fair Trade for All.”  He and his allies want to broaden the definition of Fair Trade, which when it comes to coffee now requires importers to buy from grower-owned co-operatives. The “Fair Trade for All”  permits buying from collections of small farmers and even coffee estates, or plantations, that are deemed to be worker-friendly.

“Fair Trade can be more than a tiny market niche,” Rice says. “It can be scalable and significant.”

Bringing in plantations will make it easier for big coffee buyers like Green Mountain Coffee Roasters, Starbucks and Whole Foods to buy more Fair Trade products–and that’s exactly the problem, his critics say.

Including bigger farms, they argue, will endanger the co-ops that are the heart and soul of the Fair Trade movement.

“Fair Trade is designed to change commerce,” says Rodney North of Equal Exchange, a cooperative that sells Fair Trade and organic coffee, tea, chocolate bars, cocoa, bananas and almonds.  “We shouldn’t be changing Fair Trade to accommodate commerce.” [click to continue...]

When “green business” isn’t enough

Into my inbox every day come press releases about this company putting solar panels on a roof or that one making its fleet more efficient. These incremental steps are laudable but  also (1) boring (2) old  hat and, most importantly, (3) unlikely to get us the environmental change we need.

Transformational change, by contrast, usually requires entire industries or groups of industries to work together, often with NGOs, sometimes with government. That’s  been going on for years–Unilever and WWF organized fisheries, NGOs and companies to form the Marine Stewardship Council back in 1997 to promote sustainable fishing practices–but lately, there seem to me more of these cooperative but complicated efforts. That’s reason for optimism.

Last fall, for example, I attended a Starbucks “cup summit” at the MIT Media Lab where the company, with the help of business guru Peter Senge, brought together paper companies, NGOs, government officials and rivals like Green Mountain coffee to figure out how to design a system to eliminate waste from coffee cups. [See The Starbucks Cup Dilemma in Fast Company.] Now Alcoa, with the help of sustainability consultant BluSkye, leading a broad and even more ambitious effort to drive up recycling rates across the US.

Reclaiming (valuable) aluminum cans

To learn about the Alcoa initiative, I met last week  in San Francisco with Jib Ellison, the founder of BluSkye,  and talked by phone with Kevin Anton, Alcoa’s chief sustainability officer.

The problem, as they both described it, is simple: Between $1 billion and $2 billion worth of aluminum cans end up in landfills each year.

Now that’s waste! [click to continue...]

Why I’m (still) an optimist

Happy New Year! And good riddance to 2011, a year during which we made little or no progress on some of the issues that I care most about: climate change, the long-term federal debt, social mobility (aka the American dream), and our dysfunctional Congress. Yet I remain an optimist.

Texas drought 2011

I could write many words about our woes. Instead, I’ll try to be succinct. On the climate issue, global emissions of carbon dioxide from fossil-fuel burning jumped by the largest amount on record in 2010, we learned recently, and 2011 surely brought further increases.  Concentrations of CO2 are 39% above where they were at the start of the industrial era and approaching the point when some scientists say it will be nearly impossible to contain global warming, the Guardian reports. Neither the US nor the UN moved closer to regulating CO2. In a discouraging development, Republicans Mitt Romney and Newt Gingrich backed away from their once-sensible support of greenhouse gas regulation, in what can only be seen as shameless pandering to the know-nothing wing of the Republican Party. Discouraging, too, was the Fukushima nuclear disaster, which will slow down the growth of carbon-free nuclear power. So will the failure of Solyndra. Meanwhile, the U.S. suffered massive flooding of the Mississippi and Missouri Rivers, a terrible drought in Texas, record wildfires and at least 2,941 monthly weather records that were broken by extreme events, according to the NRDC.. Coincidence? Uh, no.

Like the atmospheric concentrations of CO2, the federal budget deficit has been growing.That’s no coincidence either. We’re living beyond our means, whether by burning fossil fuels or taxpayer dollars, and sticking future generations with the cleanup bill. Just last week, the White House asked for a $1.2 trillion increase in the federal debt limit, raising it to about $16.4 trillion. According to Marketplace Radio, that amounts to about $52,000 for every American. For a typical  family of four, that’s bigger than the mortgage. [click to continue...]

Starbucks: We are indivisible

I’m not much for patriotic displays, but I’m proud to wear this red, white and blue wristband inscribed with the word INDIVISIBLE.

I hope you’ll wear one, too. They’re available, beginning Tuesday, at Starbucks, for a donation of $5 or more to a project called Let’s Create Jobs for USA.

The program aims to create thousands of jobs across the country, by investing community development financial institutions (CDFIs) — mostly credit unions and community banks — that will then lend to small businesses, nonprofits, housing and commercial developers, micro-enterprises and the like, all to spark the economy and create jobs.

I’m a fan of this project,  for several reasons.

First, there’s no more front-of-mind issue in America today than jobs. So this a great example of how a big company can help tackle an important  problem–while enhancing its reputation as a business that supports its communities.

Second, Let’s Create Jobs for USA underscores the fact that, despite the rhetoric from politicians, jobs are best created by the private sector.  If you’re anti-business, you’re anti-jobs.

Ben Packard

Third, although credit for the campaign ultimately belongs to Howard Schultz, Starbucks CEO, Let’s Create Jobs for USA unfolded as it did because of a connection between Ben Packard, vice president of global responsibility at Starbucks and Mark Pinsky, president and CEO of the Opportunity Finance Network, a national network of CDFIs. Ben, Mark and I serve together on the board of Net Impact, a great organization of students and young professionals whose purpose is to inspire and equip young people to use the power of business to make the world a better place.

Let’s Create Jobs for USA is very much in the spirit of Net Impact. [click to continue...]

Aron Cramer: Business needs to step up

Aron Cramer

Today, I’m pleased to publish the first in a series of guest posts from Aron Cramer, the president and CEO of BSR. BSR (formerly Business for Social Responsibility) works with its 250 member companies to promote a more just and sustainable world, through research, consulting and industry collaborations. Aron, who’s a longtime colleague and friend, has worked all over the world on business issues ranging from labor rights in global supply chains to Internet freedoms in China to the meaning of “sustainable consumption.” Here, looking ahead to BSR’s 2011 conference in San Francisco, he writes about the need for business leaders to step outside the boundaries of their companies to re-energize the sustainability agenda.

Most years, people are reluctant to see summer fade into fall. But the summer of 2011 was a bit of a bummer, bringing hurricanes and earthquakes in the American Northeast; ongoing political stagnation in the United States, Europe, and Japan; and signs that the world’s mature economies are stuck in neutral—and may remain that way for some time. Leaving this summer behind feels like a relief.

It’s up to business to turn things around. That’s why BSR has made redefining leadership as the theme of the BSR Conference 2011.

We view this opportunity as having four dimensions, which we outlined in our most recent annual report. In this series of blog posts, I want to elaborate on each one, beginning with the need for business leaders to invest in the infrastructure required for sustainability. [click to continue...]