In preparing for the Sustainable Brands 11 Conference, in June, I have been interviewing panelists including Ben Packard, VP Global Responsibility, Starbucks; Steve Arbaugh, VP Brand Marketing, Interface; Jennifer Schwab, Chief Sustainability Officer, Sierra Club Green Home and Bonnie Nixon, Executive Director, The Sustainability Consortium. The subject of our session is emerging sustainability standards, which are defining what sustainability means in every industry, business and product class. I thought I'd share some initial insights.
In a Harvard Business Review article, I called the sustainability standardization process a"greening frenzy," because it's a bit like a feeding frenzy in the wild. The definition of what is sustainable, like a carcass, is up for grabs, and numerous contending voices are trying to claim the prize. How the process plays out will have competitive implications for almost every business.
The flooring company, Interface, has been a pioneer in sustainability and thus has a long-term view of how it has evolved. Steve Arbaugh describes how the company started out charting its own course, identifying Interface's sustainability issues and then defining its own goals and targets. Over time other companies have done the same, and Steve sees common threads emerging.
For example, almost every manufacturer has targets for carbon footprint, waste reduction, water use, etc. These have become generic standard expectations across industries. What many companies have not yet recognized is that these standard sustainability performance metrics set up an inescapable improvement trajectory. Once you claim your product is manufactured with "39% post-consumer waste," there is only one way: up. The end game is 100% for things like recycling and other positive attributes, and zero for bad attributes like waste, CO2 emissions, etc. Like inexorable improvements in microprocessor speed, standard expectations and trajectories are set by the mere selection of metrics.
A parallel is "amenity creep" in the hospitality industry. As one hotel adds an amenity, say free Internet or a breakfast buffet, customers begin to expect it in all hotels. Then it's no longer an amenity but a requirement. Sustainability creep is occurring in the same way. What was last year's differentiating sustainability goal is this year's generic sustainability standard.
This isn't occurring completely by accident. Civil society stakeholders are also at work influencing sustainability standards. The goals of organizations like PETA and Greenpeace are to see entire industries shift to more sustainable practices, not just individual companies. Sierra Club's GreenHome is an enterprise founded to provide home remodelers with a vetted list of contractors and product suppliers. While it's not a certification per se, providers have to pass a "Green Check" process to be recommend by GreenHome. CSO Jennifer Schwab says that Green Check sets criteria in eight areas that are ambitious but not so stringent that no one can meet them. However, sustainability creep is built in. Over time as more contractors meet the criteria, and the costs of doing so decline, GreenHome reserves the right to raise its standards. When it does so, it provides guidance to help its providers improve. The goal is to improve standards across the home building industry.
The sooner companies recognize and get into the greening frenzy the better their chances of influencing the process. Business participation is critical, because companies bring innovative capacity and intimate knowledge of the industry. More important, companies are the only entities that can make standards real, by embodying them in products and services. Starbucks' experience with the LEED green building certification provides a good example.
Starbucks was interested in having its cafes LEED certified but was hindered by the cost of certification, which was designed to evaluate individual designed buildings. Providing LEED documentation for each of its thousands of stores was prohibitive. The solution, according to Ben Packard, was to work with LEED to find a way to fulfill the intent of LEED by helping Starbucks shops certify on a massive scale. This type of engagement in the standards process can improve and extend the impact of the standards' intent while responding to business realities.
While the greening frenzy is well underway in most industries, corporate action can dramatically accelerate the process. Wal-Mart's brainchild, the Sustainability Consortium, is the 1,000 pound gorilla that seeks to define sustainability standards for every one of the 100,000-plus SKUs on the chain's shelves. As one VP put it to me, "Wal-Mart is everyone's biggest customer, and next to Wal-Mart the US EPA is nothing." Wal-Mart's action has put thousands of companies smack dab in the middle of the greening frenzy. The Consortium's outcomes will have important and ongoing business implications.
Given the growing greening frenzy, ignoring sustainability in your industry is increasingly risky. The old saw --"If you're not at the table, you're on the menu" -- holds. Getting a seat at the table and helping to shape sustainability standards is something every company should consider, and fast.
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