Thursday April 24th 2014,
The Company Ethicist

What Consumers Don’t Know About Corporate Sustainability: Q&A with Joel Makower

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Many people assume companies support sustainability because their customers demand it. Not so, says Joel Makower, the executive editor of GreenBiz.com. Companies have a variety of motives for going green, he says. Below, Makower also refutes another common perception: that companies claim more credit for their sustainability programs than they deserve

You argue that consumers have been slow to embrace sustainability. How so?

Consumers are very resistant to change unless sustainability or green equals better, however better is defined — cheaper to buy, cheaper to operate, higher aesthetics, cooler for my image, longer lasting. There has to be something that’s better, and being green in of itself does not make something better.

What drives companies to care about sustainability?

Sometimes it’s their competitors. You see Ford and GM, FedEx and UPS, Coke and Pepsi competing on sustainability because their reputation demands that. Sometimes the driver is innovation or regulation — the need to solve an issue before government comes in and tells us how to do it. E-waste is a good example of that. Sometimes business leaders see that sustainability is the future, and that the company needs to shift to a more sustainable model. A lot of companies are driven by risk — the risk of doing business in a world where they accelerate disruption of supply chains, customers or commodities.

How can you distinguish companies that are dedicated to sustainability from those that want good PR?

I don’t think there are many companies that are just talking the talk without walking the walk. I think it’s quite the opposite. Companies are doing much more than they’re saying. For example, GM has about 140 assembly plants around the world and about 100 of them have achieved 0 rate landfill, which is a really remarkable achievement. They’re dedicating millions of dollars a year to improve overall efficiency, but it has nothing to do with selling Chevys so they’re not going to promote it in a Chevy showroom. If they were to promote it, they’d probably get attacked by environmental critics saying, “If you’re going to talk about that, what about the internal combustion engines?”

Do companies embrace sustainable practices for their own benefit or for the customers’?

It depends on the sector and on what’s driving it. A company with a big supply chain is probably going to do it more for their own benefit. GM isn’t having 0 landfill factories because it helps their customers, but they are building more efficient cars because their customers demand it. The upstream tends to be more for themselves, and the downstream is more for their customers. But it’s not black and white. Walmart is pushing suppliers way upstream to be transparent about it and to reduce the chemicals that go into a lot of their toys, baby products and personal care products, so the ultimate end product is better for the consumer as well as for the environment.

Where does a company that wants to be more sustainable start?

The main thing is to understand what you do that causes the most damage to the planet. Often a company’s biggest impact is not where it expects. Understanding where a company’s biggest impacts is — sourcing materials, manufacturing process, sales and distribution, customer’s use, or end of the product’s life — is the starting point.

Image via Can Stock Photo

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About The Author

Courtney Buchanan is a business writer who frequently contributes to The Company Ethicist.

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