Multinational Companies Find the Power of Going Green

Jan 25, 2012

Topics: Sustainability, Technology

What do UPS banning left turns, Waste Management helping customers eliminate waste, Maersk slowing down its ships, and Patagonia advertisements urging readers to buy less have in common?

They all represent what sustainability expert Andrew Winston calls “heretical innovation.” In an age of growing competition for dwindling natural resources, Winston says companies can’t afford to reject even outlandish-sounding ideas in their quest to go green.

“The logic of decoupling the economy from carbon has nothing to do with politics,” Winston told an audience of approximately 750 attending the Outdoor Industry Association Industry Breakfast presented by The North Face at last week’s Outdoor Retailer Winter Market in Salt Lake City. “It’s really about business.”

Winston cited examples of global companies that are using heretical innovations to set and reach stretch goals to green their businesses and unlock value. Subaru and General Motors are working toward establishing zero-waste assembly plants (i.e., plants that send nothing to landfills). After learning that the biggest environmental impact of its products occurs during their use, Unilever launched a global campaign to urge consumers to take shorter showers. The same motivation is behind Proctor & Gamble’s Tide Coldwater, which is designed for cold water washing, thus reducing energy used to heat water.

Many multinational corporations are going green not so much because of government mandates, but because it can help them delay expensive capital projects, cut raw material costs, and create entire new product categories while burnishing their brand with consumers. While research indicates consumers are not willing to pay much of a premium for more sustainably made products, a lack of green credentials can disqualify products from consideration.

“What I hear over and over again is that sustainability is the tiebreaker,” said Winston, author of Green to Gold and Green Recovery, two books that have helped Winston Eco-Strategies land consulting engagements worldwide. “It’s also become a deal-breaker. When Toyota launched the Prius — the world’s first mass-produced gasoline-electric hybrid car — it surveyed buyers and found that 60 percent were not interested in looking at any other car.”

This same sort of thinking spurred Walmart to set lead content limits on children’s toys that are 85 percent stricter than the federal government’s.

“Compliance does not matter anymore,” Winston said. “The private sector is setting tighter standards.”

The trend is certainly at work in the retail industry, where retailers within and beyond the outdoor industry are requiring vendors to comply with restricted substance lists (RSLs) and provide third-party certifications and audits. This is just one reason that outdoor industry companies, via their participation in the OIA Sustainability Working Group, are driving the development of Eco/Apparel Index tools, which provide product designers and developers with a way to measure and manage the environmental and social impacts of products.

The only way companies can unlock the full power of going green, however, is by imagining how climate change and other environmental risks could affect their businesses. To get started down that road, Winston suggested three questions outdoor companies might want to ponder:

  • What happens if ski seasons get shorter and choppier?
  • What happens if Texas becomes drier and cotton yields decline?
  • Can we entirely close the apparel production loop?

These issues have the potential to significantly alter not just the outdoor recreation industry, but the entire business landscape.

“The outdoor industry has the ability to say that we’re not just out there saving the planet, we’re saving ourselves,” said Winston.

Given the product innovation seen on the floor of the Salt Palace last week, OIA has no doubt the industry’s best days lie ahead.

Winston’s presentation will be available online February 1 at outdoorindustry.org/ou. The slide presentation is available now on Andrew Winston’s Web site at andrewwinston.com/mediadownload.