The greening of corporate America
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Business is the only mechanism on the planet today powerful enough to produce the changes necessary to reverse global environmental and social degradation.
Back in 1989, Fred Krupp, President of Environmental Defense, was having lunch with his three young sons at McDonalds. At the end of the meal he looked at the mound of waste on the table – Styrofoam burger packages, cups, paper, plastic straws – all about to get dumped in the waste bin, and he thought, “There has to be a better way.”
Environmental Defense, one of the nation’s leading environmental nonprofit organizations, approached McDonalds about working together to reduce its packaging and therefore the amount of waste generated by its restaurants. Eliminating the Styrofoam box was one of over 40 different things McDonalds eventually agreed to do.
“It was the first time that an environmental organization and a company like McDonalds - not a green company – had shown that you can have that kind of a win-win project,” says Gwen Ruta, director of Corporate Partnerships for Environmental Defense.
Because they were buying fewer materials and paying less to throw them away, the innovations ended up saving the company money. And it was good press. An industry leader in the fast food business, the greening of McDonalds was immediately noticed by other companies. Soon Burger King and other fast food restaurants followed suit. The overall industry change supported the burgeoning recycling industry and relieved the enormous burden of fast food trash being dumped into increasingly strained landfills across the country.
Today, McDonalds can boast that 31.5% of its total packaging material is from recycled paper, and 40% of its corrugated shipping boxes are recycled. Among a host of other environmental accomplishments, the company has also developed biodiesel recycling programs using restaurant’s used cooking oil in Australia, Brazil, and some European countries. In 2005, the company received the EPA Climate Protection Award for joint efforts to promote natural refrigerants for equipment, reducing greenhouse gas emissions.
“I think, in general, there is so much integration where really good environmental practices make sense for business,” says Bob Langert, McDonald’s Vice President of Corporate Responsibility. “There are always things that really don't make sense today. But if you keep the infrastructure changing and technology changing with new ideas, these things can become more efficient over time.”
Certainly one corporation positioning itself as a burgeoning giant of efficiency is Wal-Mart. Last fall President Lee Scott shocked America’s corporate business community by announcing Wal-Mart’s goals to increase fuel efficiency in the company’s truck fleet by 25 percent over three years (doubling that within 10 years), as well as reduce energy use at its stores by 30 percent. Scott also vowed to reduce the company’s greenhouse gases by 20 percent in seven years, and cut solid waste from U.S. stores and Sam’s Clubs by 25 percent in three years. In addition, the company intends to invest $500 million in sustainability projects ranging as widely as examining the use of porous concrete in Wal-Mart parking lots to defray waste water run-off, to alternative refrigerant technologies.
Already the massive buying power of the #1 U.S. retailer, with its 6,400 discount and grocery stores and 565 warehouse stores, has heavily impacted its supply chain. Almost overnight Wal-Mart changed the national fishing industry by declaring that within 5 years it would only purchase wild caught seafood that was certified as sustainably harvested by the Marine Stewardship Council. The same supply-chain pressure has transformed the organic cotton industry, which, in 2002, was producing around 6 million tons of organic cotton. Today, Wal-Mart and Sam’s Clubs purchases alone account for almost 10 million metric tons.
Strangely, considering the fanfare over its green initiatives, Wal-Mart executives are media-shy and would not make themselves available for interviews about the company’s new green policies - a stance which does nothing to alleviate the suspicions of many long-time environmentalists who feel that Wal-Mart’s new image is only a marketing ploy to gain popularity and defray public focus from the company’s abysmal employee policy records.
Yes, Wal-Mart has started a campaign to sell one compact fluorescent light (CFL) bulb to each of its 100 million regular customers in the U.S. And yes, according to Scott McCall, VP of divisional merchandise for Wal-Mart, if every household in America changed just one standard light bulb to a compact fluorescent lamp, Americans would save $800 million in annual energy costs and the reduced air pollution would be equal to removing 1.2 million cars from the road for a year.
“So what?” ask some unconvinced environmentalists. Changing out light bulbs at its stores will save Wal-Mart over $7 million per year on its electric bill. And improving fuel mileage in Wal-Mart’s trucking fleet by one mile per gallon could save the company more than $52 million per year. Energy savings = money savings. It’s just good business. In some camps, the vision of a company that netted $11,231 million dollars in fiscal 2006 making even more money by implementing sustainability measures just doesn’t create much enthusiasm.
But it’s a start in the right direction.
“Right now it seems that the conversation coming out of Wal-Mart is that, ‘It's good for us and it's good for the world,’” says Dixon de Leña, co-founder of Integral Partnerships and a consultant to Fortune 50, 100 and 500 firms for over 25 years. “There is no doubt in my mind it’s the beginning point for the transition.”
 Gwen Ruta, director of Corporate Partnerships |
Shadowy figures at the back of a room
For many Fortune 500 companies and multinationals however, representing an “enormous force for environmental change” can also translate as being “a target with a lot more to lose.”
The Big Guys got that way through strict adherence to the rules of competitive open market economics, or, in other words, the established business model of unlimited growth and profit at any cost. Overturning that philosophy for environmental reasons, or even appearing to slow it down, is tantamount to breaking rank and running at the first sign of enemy fire.
Check this story that never reached the mainstream press. Whether true or not, it gives a feel for the delicacy with which the multinationals approach the subject of researching and “correcting” their environmental and energy policies.
“About five years ago, it’s rumored that all the big environmental groups that were trying to reach out to corporations were invited to Davos, Switzerland near the time of the World Economic Forum. They were asked to talk to some not really well-known people who work for some of the multinationals,” says de Leña. “And they would go into a room in a hotel, and half the room is well lit, so they can do their presentation. And there are people sitting close to the tables near them. But the other half of the room is darkened. There is clearly someone sitting back there, but they can't be seen by the presenters. They're just watching, listening. Then a side door would open and a shadowy figure would enter or exit. And the presenters would ask, ‘Who was that?’ And the people who had invited them basically responded, ‘Oh, that's not your concern…’”
Anyone who has seen Al Gore’s An Inconvenient Truth has probably, at one point or other, been puzzled how corporations and government leaders can still turn a blind eye to the facts regarding environmental and climate degradation. And while certainly inertia, stupidity, and profiteering all play their part, there is a much more subtle dynamic involved that often goes unrecognized. One reason corporations are so slow to embrace going green is that they are survival-driven organizations.
According to de Leña - whose Fortune 50 and 500 clients in the software, finance, technology, insurance, and telecommunications industries come to him for advice in developing transformational leadership and management skills - survival-driven businesses are not hand-to-mouth organizations. On the contrary, they are highly successful and some can be rated as top places to work nationally and internationally. In this context, survival-driven means a particular structure and investment a corporation has in its image in the world of commerce.
 Dixon de Leña, co-founder Integral Partnerships |
“I've worked with company managers whose grandfathers worked for the same companies they are working for, and who have spent 20-30 years in their career. They look out from a place of absolute attachment to the model of business they've had, maybe, for generations. And when you say, ‘This could all go away in the next 20 to 50 years,’ they look at you like you’re nuts. It's just not possible.”
Dwelling above the crowds in the corporate skyscraper mindset, information like An Inconvenient Truth doesn’t get marginalized. It doesn’t exist. It never even gets on the radar screen. In this mindset your entire life - the people you know, the executives you play golf with, the communities you live in, the club you eat lunch at, the charity dinners you attend, the schools your children go to, the books you read, the television you watch, the environment you live in 24/7 – supports only one thing: the current established business model of unlimited expansion and profit at any cost.
Fortunately this outdated mindset is changing. Corporations like Wal-Mart and McDonalds are the first dominoes in a line of many to come.
“Part of what I do has been to introduce corporate America, very senior-level people right up to the chairman of the Board and CEO, to transformational breakthrough ideas and communicate them in a way that is palatable,” says de Leña. “I've had Tibetan lamas go in and teach meditation to senior executives in some of the largest corporations in the world. And they weren't dressed in saffron colored robes either.
“The mere fact that they could sit with two or three executives who are deathly afraid of Wall Street ever finding out that they even go to therapy - or even thought of going to therapy because the stock price might go down - the fact that they're sitting there in a hotel room trying to even get a taste of what all this is about is encouraging.”
What can you do to help change corporate America? If you are working in a corporation, don’t be afraid to introduce new ideas about everything from more holistic management concepts to recycling programs for the coffee break rooms. Start in-house environmental awareness chat groups online. Request that lighting fixtures be changed to compact fluorescents.As a consumer, buy green, buy local and talk to store managers asking them to stock more green, sustainable and organic products. Enquire about companies’ green policies. Visibility and voices count!