Michael Kramer of Natural Investments and founder of the Kuleana Green Business Program interviewed Joel Makower. Joel Makower, author of Strategies for a Green Economy and Chairman and Executive Editor, Greener World Media (GreenBiz.com)will be the keynote speaker at the Kuleana Conference & Trade Show on May 6th at the Sheraton Keauhou Bay Resort.
(1) What is your definition of a business that is “green”, “socially responsible” or “triple-bottom-line”?
It sounds odd, but I don’t think any company ever really achieves the state of being “green” or “socially responsible.” But they can move in those directions. In other words, companies can be “greener,” but probably never “green.”
In essence, being greener has to do with operating in a way that aligns a company’s business goals and objectives with the needs of the environment and the people they impact — employees, suppliers, customers, neighbors, etc. The goal is not merely to “do less bad” — that is, to reduce or even eliminate a company’s negative impact on the environment (though that’s an admirable goal), but also to find ways to have a positive influence, creating profitable products and services that are better for people and the planet.
(2) What are the key factors necessary for a business to transition to a triple-bottom-line approach?
It all starts with self-awareness — fully understanding how your company impacts the environment. Most companies don’t understand this. They may know what happens within their walls, but that may be only a small portion of their actual impacts. For example, when Levi Strauss examined the impact of a pair of “501” jeans, they found that more than 95 percent of the life-cycle impacts took place outside of their normal sphere of influence — that is, within their offices, contract factories, distribution centers, and retail outlets. The biggest impacts came from two places: growing cotton and washing jeans at home. So, while they’ve done the basic “greening up” activities within their own operations, they’re focusing their efforts in supporting sustainable cotton production, and they’re partnering with Procter & Gamble to design a line of Signature jeans (the Levi’s brand sold at Wal-Mart, Target, and other discount chains) that can be washed effectively in cold water.
Of course, once you fully understand your impacts, you need a comprehensive plan in place to address them. Ideally, it will be supported form the top down and the bottom up, and becomes a part of how individuals’ performance is assessed. It can be a long-term plan over many years, and your company may never reach perfection, environmentally speaking, but you need to be able to demonstrate to a wide range of parties — customers, employees, the community, activists, and others — that you’re taking things seriously, that you’re on the case.
Third, you need to be talking about all this openly and authentically — not just proclaiming “Hey, we’re going green!” but putting it into context, talking about how your initiatives fit into the larger picture. The public wants to know that you understand that each individual commitment or achievement, however impressive, is only part of a larger journey your company is on to reduce or eliminate its negative impacts.
If you can demonstrate that you understand your impacts, have a plan in place to do something about them, and are open and authentic in how you talk about it, I believe you’ve got the key ingredients to succeed.
(3) What evidence is there that companies can be equally, if not more, profitable by becoming green?
A great many green business initiatives are about improving efficiencies that they eliminate practices that resulted in waste and pollution. Examples are energy and water efficiency, paper reduction, and pollution prevention measures. In most cases “pollution” represents something that a company bought, didn’t sell, and often had to pay to get rid of — that is, it’s an inefficiency. So, reducing these are good for the bottom line.
Beyond that, being a greener business can produce other sources of business value: increased sales, reduced costs, improved quality, reduced risk, increased ability to attract and retain talent, new products and markets — and, of course, improved reputation and customer loyalty. Not all of these are hard costs that can be easily measured, but smart companies are finding they can derive such benefits, even if they don’t always show up on a balance sheet.
(4) What has the economic downturn done thus far to either stunt or accelerate the “green economy”?
It’s done a little of each. Much of going green involves efficiency — energy efficiency, waste reduction, pollution prevention, and the like — which can cut costs, improve quality, and reduce risks, which are good to do in any economy. So, greener businesses often are more competitive, able to withstand challenging times.
But the recession and the credit freeze is also slowing or stopping a great many initiatives, notably those that require any significant investments. This means that building retrofits, or upgrading to more efficient motors or building air conditioning systems may not be possible at this time. It is possible that the federal stimulus efforts will enable state governments to create incentives and subsidies for energy efficiency or renewable energy. But this remains to be seen.
(5) How will the new Administration’s green jobs agenda truly impact this nation?
No one’s really sure, though nearly everyone is hopeful. The good news is that President Obama “gets” green jobs and the benefit they can bring to the economy. He understands that green jobs may be a pathway back to prosperity. But it’s unclear how many jobs the government can create. And we don’t really know how to define a “green job,” other than some obvious things like solar panel installers or wind farm developers. There are literally hundreds of potential green job categories. So, there will likely be some squabbling among policymakers, activists, companies, and others about what really is, and isn’t, a green job. All of which may hinder the growth of these jobs. As I said, no one’s really sure.
(6) In the next 4 quarters, what green subsectors do you anticipate will witness the most significant economic growth and job creation?
Anything having to do with energy efficiency will be on a growth trend for the next year. That includes auditors, weatherstrippers, makers and installers of “smart” meters and other gadgets that help companies and homeowners understand and track their energy usage.
Beyond that, it’s really hard to predict. We’re in uncharted waters, both environmentally and economically.
