Business and the Sustainability Trend
The ongoing trend for sustainable business ideas and reform is evident. From large multi-national corporations to smaller “green-tech” startups, the importance for environmental and social responsibility is known and of great interest. However, profitability remains first and foremost, in some cases impinging on a corporation’s responsibility and action.
Year after year, companies pay exorbitantly high prices for 30-second pieces of airtime during the Super Bowl. And while the commercials’ messages generally go the humoristic, light-hearted route to captivate their audiences, this year’s Colgate-Palmolive commercial was notably different. The aired commercial, which reached 111.9 million people, was a “call to action” to conserve water. The commercial begins by following a man who enters his bathroom, turns on his faucet, and begins to brush his teeth; the shot rests for a brief moment on his toothbrush, with toothpaste applied (presumably Colgate). The faucet remains open and a small, dirt-covered hand enters the frame to wash a piece of fruit under the running water. While the faceless man continues to brush his teeth, the shot remains on the running faucet, as an empty drinking bowl is filled and a young girl cups her hands under the running water to have a drink. The commercial identified the company’s and their viewers’ social responsibility — ending the ad with the message “please turn off the faucet.”
The Super Bowl, professional football’s largest, most coveted annual event, is widely considered a national pastime by many Americans; a day in and of itself that represents a celebration, a competition and, community. In addition to the main sporting event, the advertisements during the televised spectacle have a fan following of their own, garnering hundreds of millions of views between the actual televised event and online streaming. Colgate’s 30-seconds of airtime — worth a cool $5 million — changed the tone from funny to serious and meaningful.
The context in which Colgate launched their message is surely a significant one: The company chose a day, in front of a huge national audience, about teamwork and camaraderie — the nature of the football game that in turn permeates its audience. The commercial harnessed the already-present sentiment of community and compassion to impart a sense of cognizance and of a global community. And while the national platform on which the company’s social and environmental responsibility message made sense, whether the company was motivated by its intrinsic responsibility, or something more — like its public image — is not easily determined.
The Super Bowl platform on which Colgate has so evidently made its campaign known — as a company which can now be publicly perceived to supply consumer products while retaining environmental and social stewardship point of view — has accessed the minds of viewers who both are and are not familiar with the corporate sustainability platform.
Colgate-Palmolive is just one recent example of an ongoing trend for sustainable business that includes large multi-national corporations and smaller companies alike.
In 2007, Levi Strauss conducted the apparel industry’s first product life cycle analysis (LCA) in which a pair of jeans, in this case, was assessed for its total environmental impact — from the sourcing of the cotton to manufacture the pair of jeans to their washing in the laundry machine, once the product has been purchased. In collaboration with its manufacturing partners and its consumer, the company has saved 1 billion liters of water since 2011 through its campaign Water<Less™.
Bill Gates announced in November 2015 that he plans to personally invest a much as $2 billion into clean, or zero carbon, energy technologies. His announcement came in conjunction with the United States and India agreeing to expand their research into development funding for clean energy research.
“Bill Gates’ seed funding gets the ball rolling on some really ambitious ideas and is representative of the green tech movement: The green technology startup culture as well as investing in it,” said Read Flusser, a Columbia general studies student who was selected by University’s Business School to be part of its Innovation and Entrepreneurship Program for his Bamboo Feedstock For Advanced Biofuels proposal. From a sustainable startup standpoint, Flusser said: “There are huge amounts of funding for it [green technology] in Silicon Valley because all of those guys are interested in funding green technologies. A lot of the new biofuel and bioenergy startups have all been funded in that area.”
The “green” or “sustainable movement” in question is nonetheless still business however, and new, alternative technologies still have to be a viable (price) competitor for perhaps less environmentally favorable business plans.
“The environmental startup scene is aggressive, however the weakness in the sustainability scene is that there are those that think that being green is enough. Because the idea is ‘green’ and because it helps the earth, they think that they will be able to persevere,” said Flusser. “If it is going to function it has to be cheaper than the alternative. There is no green solution that will actually work for the majority unless it beats out the worst solution.”
Flusser took a personal example to demonstrate his point, in talking about coal versus bamboo as an energy resource: “Coal, for example, is $25 a ton relative energy-wise to bamboo. So, in order to beat out coal, I have to get below $25 a ton, that is the only way I can do it.”
However, there are sustainable solutions that effectively demonstrate its price-favorability. This, Flusser said, is important. “Someone does not give a business money to not see it back; they give it to get a return.” Flusser added, “Maybe they will take a smaller return because they know it is a good cause, but for the most part you need to show profitability.”
And how about for big businesses like Colgate-Palmolive, who launch sustainability initiatives once the company has long been profitable? In some cases, such green initiatives require the company to restructure its production to make it more sustainable. Furthermore, companies look to renew, or relaunch, its internal company culture to make it more green-oriented.
Flusser comments that sometimes it is hard to tell if such efforts are sincere or merely for public image: “The steps taken for sustainable action is not only for the branding; all of these companies are suppose to be very progressive. But, it is hard to tell,” said Flusser.
Indeed, one must be cognizant of green washing, or when a company presents an environmentally responsible public image but actually operates otherwise. Flusser again contributes one of his own example from his research on Bamboo: “If you look at bamboo on the internet, there is a lot of amazingly positive information, but no one is taking steps to utilize the material.”
What is in a name?
One example in which green washing has been suggested is in association with British Petroleum. The history, or track record, of the corporation’s public actions and campaigns certainly leave room for speculation into its environmental stewardship and concern: In 1998, then British Petroleum quit the Global Climate Coalition — the climate change denial group funded by the oil industry — and merged with Amoco soon after, changing its name to BP Amoco. With the eventual shortening to BP with an accompanying slogan “Beyond Petroleum,” the company’s first quarter earnings in 2010 (10 years after the slogan re-brand appeared) were less than 2% could be attributed to alternative energies.
The most recent BP logo exhibits a subliminal message: Green in color and in the shape of a sun, or even a flower, the logo seems to confer a sense of environmental stewardship and awareness, (regardless of whether or not the reality is such). Indeed, as is the case in the BP example, the trade-off between alternative energy and big oil seems to reduce down to money (e.g. big oil returns) versus public image and corporate values.
To drive home the point, VCs (venture capitalists) want to invest in green projects, says Flusser, but if the business does not show profitability, it is still not going to get funded.
In other words, business profitability is first and environmental responsibility is still, second.
