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Slipping Green Through the Back Door

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Laguna Niguel, CA -- America is going green, but not the way environmentalists had planned it. The unlikely hero is none other than Corporate America, which is giving consumers the green whether they realize it or not. Why? Because it's good for the customer, it's good business, and let's face it, as MGM Senior Vice President of Environment and Energy Cindy Ortega articulates, "It is also good for employee morale and retention -- people want to work for companies who care about the world around them."

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Photo by Mathew Wilson (Courtesy of Flickr)

Here's a great example of this sales strategy as employed by The Home Depot: "Over 70 percent of the wood we now sell is certified. But you won't find us advertising or promoting that fact," said Ron Jarvis, senior vice president of Environmental Innovation for The Home Depot at its Atlanta headquarters. Jarvis was in Laguna Niguel recently to attend "Fortune Brainstorm Green," a high level conference attended by many prominent green industry corporate and NGO executives.

"Our data shows that most customers will not pay extra for sustainable wood, and in some cases, they consider "green" wood a negative. We believe that FSC wood is the best way to go for both quality and sustainability reasons, so, most of the wood we sell in developing countries is FSC certified. We do believe in educating our customers and employees about sustainability, but at the same time the voice of the customer is always our top priority. Thus including FSC wood without charging a price premium is the right thing to do, and thankfully, due to our enormous volume and purchasing power, we can make this equation work business-wise," Jarvis explained.

Jarvis' competitors at Lowe's also have a couple examples of this same premise. "There are multiple variations of a "green" consumer. In fact, according to the 2011 US LOHAS Consumers Trends poll, 83 percent of consumers identify with "green" at some level. However, the greenness of consumers changes with multiple factors, including the economy and available income, as well as age and generations," said Michael Chenard, Director of Corporate Sustainability for Lowe's at its Mooresville, NC headquarters. "Today, 100 percent of the bathroom faucets Lowe's carries are WaterSense (low flow) certified, and that's been the case for more than three years. Lowe's also has more in-stock Energy Star-qualified appliances and lighting fixtures than any other major home improvement retailer."

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Graph by Natural Marketing Institute (NMI), 2009 LOHAS Consumer Trends Database

Keeping with the theme of "going green through the back door," shipping giant UPS is using sophisticated software and data to develop the cheapest, most fuel efficient way to move packages from point A to point B. These savings are passed along to the consumer, according to Scott Wicker, UPS' chief sustainability officer at its Atlanta headquarters. Also in attendance at Fortune Brainstorm Green, Wicker said UPS is testing all types of fuel efficient vehicles in its massive fleet, including full electric, hybrid, compressed natural gas and liquefied natural gas, among others. Vehicles that operate out of central depots in large urban areas are the best prospect for going full greenfleet because of the range limitations of electric and other nascent technologies. "We also use telematics to monitor over 200 data points via satellite from our trucks, which helps us train the drivers in maximum fuel efficient driving techniques and ensure they are taking the shortest routes, not letting the engines idle excessively, among other factors," Wicker said. Alas, out of over 100,000 vehicles, only about 2,600 are truly alt-fuel at this time. Wicker says that number will grow over time, but not surprisingly, cost will ultimately trump all other considerations.

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Photo by Schnaars (Courtesy of Flickr)

How about the clothes we wear? Levi's is also employing the "going green through the back door" technique. "We are committed to the Better Cotton Initiative because we believe it can change the way cotton is grown around the world, positively impacting the environment and supporting 300 million people engaged in cotton farming around the world -- without creating higher prices for consumers," said Brianna Wolf, Manager of Environmental Sustainability at Levi Strauss & Co. "Last fall, we started blending the first Better Cotton harvest into Levi and Denizen products. To date, we've produced more than five million garments containing a Better Cotton blend." However, you won't find a label identifying clothing made with Better Cotton quite yet. "Participating brands are holding off on direct product labeling during this start-up phase, to allow supply to scale to meet demand. For now, we encourage consumers to learn more about Better Cotton and support brands who are integrating it into their product lines at bettercotton.org," explained Wolf.

And what about that all-important cup of morning Joe? While many consumers are frustrated by Starbucks' lack of recyclable cups, the company does take good care of its key suppliers -- the coffee growers toiling in the fields of faraway places. "When someone buys a cup of our coffee, they probably don't know that the beans are produced with social, environmental and economic best practices in mind. Our C.A.F.E. Practices coffee-buying program includes rigorous sourcing standards covering: fair wages and benefits; access to medical care and education; specific high standards for conservation and biodiversity; amongst other criteria." said Kelly Goodejohn, Director of Ethical Sourcing for Starbucks. "For the past ten years we have partnered with Conservation International on C.A.F.E. Practices. Currently, 84% of our coffee is ethically sourced through this model. By 2015, 100% of our coffee will be third party verified or certified, ensuring that all the coffee we purchase has been grown and processed responsibly."

Indeed, there are some case histories that bear out the thesis that mostly due to the economy, consumers simply have not embraced going green over the past several years. This is a bitter pill to swallow for green opinion leaders, but may explain why products like Clorox Green Works home cleaning products have gone straight up, then plunged back to earth with a resounding thud. Recall that Green Works was launched in 2008 with great fanfare, and zoomed to over $100 million in sales within two years. Inexplicably, sales started to drop off, and even a price reduction to parity with non-green competitive products could not revive Green Works. Adding insult to injury, general opinion of experts was that the Green Works products performed very well, and backed up the claims made by Clorox. This is worthy of mention because a number of green products have been rushed to market without proper testing, bringing a black eye to the movement when consumers felt snake bit by paying premium prices for products that did not live up to their hype.

"In the past, consumers have felt that purchasing green products would require some form of sacrifice -- spending more money or an inferior design. Today, that has changed," declared Joel Babbit, CEO and co-founder of online daily green news magazine Mother Nature Network (MNN). "Not only have prices become more comparable -- but the associated savings in lower energy bills, water usage, and using lesser quantities that come with green products often result in a cost advantage. On the design side -- as opposed to the clunky or boring approach so common just a few years ago -- many of the most innovative and attractive products now entering the market are green."

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