LewisPerkins

Big Businesses Move Closer to Real Sustainable Innovation
BY FC EXPERT BLOGGER LEWIS PERKINS
Wed Jun 17, 2009 at 6:05 PM

Make sure to stay tuned as I will be sharing my thoughts on that gathering with you all next week.

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The tide of sustainable initiatives continues to shift rapidly. Over the last few years, as we have all been working to create strong, authentic and lasting initiatives, I have watched what was once the cutting edge of conversation become the norm. Two years ago, we were all scrambling to put programs in place to track our carbon footprint, energy output, water usage, etc… Today, having a tracking program in place is “table stakes.” I recently went on a sales call to a major hotel chain’s corporate office and was asked specifically to report on our company’s environmental goals and reductions achieved. This information won us the bid. Soon, those numbers will be expected reporting as a part of government compliance. Green will be the new OSHA.

Over the next few weeks I will be attending and speaking at several conferences on the green movement, including Sustainable Brands 09 and the LOHAS (Lifestyles of Health and Sustainability) Forum.  Each of these conferences will explore areas of sustainable growth and marketing from companies of all sizes.   The past year has seen tremendous growth and a more earnest understanding of sustainable initiatives, coupled with a very tough economic climate.   Our new administration has raised the conversation and the funding levels to new heights.   I will look forward to reporting back to you on what I see and learn.

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Last week I had the benefit of meeting the team that is revolutionizing the way restaurants will look at their waste. The group is Fox Pollutions Systems from the UK and Germany and I met them in the corporate offices of Ted’s Montana Grill. They have developed a unit which is installed in restaurants to capture the food prep and table scraps that would otherwise be hauled off with the garbage. In the case of some dense communities (such as Manhattan), the cost of hauling off food waste is attached to a tip fees in the hundreds of millions of dollars annually.

This device (called the FoxSMB2) is like a small dishwasher size stainless unit that fits under the sink (similar to a disposal). The machine will reduce the waste by over 60% of its original weight, minimizing costs to dispose while creating a sustainable product that could even be used as waste to energy. Imagine the day when a city such as New York could be powered via food waste. The water “squeezed” out of the scraps is then treated to reduce methane (a major global culprit of climate change) and sent to the city’s waste water treatment facilities along with other used water.

I first heard about this group from Annie White, the director of Global Green USA’s CORR (Coalition for Resource Recovery) program, who told me that more than 1,100 tons of food is sent to waste EVERY DAY in New York City. That is about the same as paper, metal, plastic and glass combined. Using a tip fee of $100, the costs to tax payers and businesses for disposing trash is roughly $450 million a year. Enter the FoxSMB2 unit and you have a solution for reducing the waste and the cost by more than half, and creating a material which can solve energy issues. In areas where the waste materials is not needed for energy, it can simply be composted. The technology isn’t new. It has been used in Europe on ships by both the UK Navy, Cruise lines and other merchants for years. We are finally getting around to using this technology to solve social and environmental issues AND save money (the leading driver these days). I give great kudos to the team developing this technology and to Annie White and her colleagues who are bringing it to the restaurant industries. Ted’s Montana Grill has been testing it in their Midtown Atlanta location and hopes to test downtown where the conditions more closely resemble those of a New York restaurant. If all goes well, I hope we see these devices in every food preparation station in America or the World.

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“Marketing used to be about advertising, and advertising is expensive. Today, marketing is about engaging with the tribe and delivering products and services with stories that spread.” – Seth Godin from his book “Tribes.”
A colleague recently asked me “in today’s world of greater authenticity and transparency, how do you know what’s for real and what’s not? How would we know if companies speak the truth or are merely continuing a next generation of green-washing (where companies said they were environmentally responsible in one aspect or another … but in many more ways, their claims were unfounded or exaggerated at best)?

Go to my FastCompany Blog to read the rest of this article:
http://www.fastcompany.com/blog/lewis-perkins/new-wave-authenticity-marketing-real/companies-are-marketing-authenticity-it-real

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Read the rest of this entry »

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This response to my recent posting on Jack Welch and Conscious Capitalism deserves a post all unto itself. The author is Scott Seydel. He writes:

It’s interesting that most of the Wal-Mart critics have said that the company’s success has rested solely on it’s badgering of supplier manufacturers and underpaying employees. I’ve been involved with the WMS Sustainable Value Network now for over half a decade and have found that and “cost” and “price” are contributive factors in serving the big box’s customers, it’s the inventory, brand names, greeters, convenience, and efficient service that differentiated Wal-Mart and Sam’s stores from Sears and K-Mart.

In initiating the Sustainable Value Network, Lee Scott found a way to reduce costs further by
taking “head space” out of packaging — and got lower freight costs, more shelf space, and reduced product packaging expense off the ledger in the process …
specifying laundry detergents with twice the washing power — with the same effect on size and space, plus more washing per bottle and less “water” as a standard diluter.
packaging that recycles at high values so that baled spent wholesale packaging can be sold rather than having to pay for sending it to the dumpster and landfill
prohibiting non-recyclable and other packaging that contaminates recycling streams (PVC and Styrofoam) or poison the atmosphere in production, and in doing so, increasing the fluidity of the value chain ….. (as example, the fresh protein tubs and platters can be sent back for recycling versus the yellow expanded polystyrene trays that float around at landfills).
I could go on, and on, and on with a long list but you get the idea.
Every penny that WMS saves or makes in these changes is going to reducing costs, easing recycling, or better serving to their customers (why carry home a four pound jug of Tide when concentrated a two-pounder will wash more clothes?)
The impact has been startling for those of us who are struggling to effect some of these changes without the commercial clout that WMS holds as “the” major buyer. The Sustainable Value network has altered the way all packaging is being considered for every buyer ….. not a bad service for the retail trade since they have also seen reduced costs of packaging, freight, and through added shelf space.
The effect has also contributed or been the primary driver in building new business concepts and products …… food trays made from corn-based plastic and fruit and nut trays made from palm frond wastes in Malaysia ………. kickstarts for a big company (Cargill/NatureWorks) and a startup (EarthCycle).
When I asked if the WMS shareholders were happy with all of these efforts to trim costs, streamline product flows, and recycle spent materials, all I got was a blank stare. The answer was, in fact, “many if not most of our clients are the hardest working people in the world, who often have two jobs and still earn total wages that are less than what our government characterizes as the poverty line, and every penny we can shave off of our cost of delivering products to them raises their standard of living to levels you and I take for granted.”
Yes … I agree that at Wal-Mart, it’s the “low prices …. always” but if this were really the only element in the WMS success, every street vendor selling sunglasses on Manhattan’s boulevards would rapidly become a major retailer. WMS knows it clients, loves everyone of them, treats them like family, and is the ultimate guardian of their living standard.
I concur in you observation, and know a dozen other companies that fit that customer focused model.
Scott Seydel is President of The Seydel Cos., which develops, manufactures and markets textile process chemicals. He is also the President of EvCo. Through EvCo Research, he has also made significant contributions to the recycled food packaging product industry in more than three dozen countries. Seydel has also founded the Manhattan Prospect, a venture which will be announced at the awards. He is also the Chairman of the Board for Global Green, USA. To me, he is a mentor and friend.

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Right now, denizens of young corporate leaders and entrepreneurs who are fighting the good fight – getting investors and their corporate leaders on board with new and more sustainable ways to view business – are perking up at the recent words from former GE Chairman and CEO, Jack Welch.

If you have been reading my blog, you have followed my discussions of sustainability as a part of corporate consciousness for the past months. Today, I was pointed towards the latest word from Mr. Welch, publicly stating that it was “a dumb idea” for executives to focus so heavily on quarterly profits and share price gains.

Wait, wasn’t it Welch who originally created the “shareholder value movement” in the early 80s? When and where was this statement made? Click here for the full article in the Financial Times. The big quote was this: “It is a dumb idea,” he said. “The idea that shareholder value is a strategy is insane. It is the product of your combined efforts – from the management to the employees.” Welch also says, “our main constituencies are your employees, your customers and your products.”

Welch’s statement fits perfectly within my view that corporations must shift from a shareholder-centric business model to instead embrace a stakeholder-centric model, which values the relationship to employees, customers, vendors, suppliers and community citizens. Back in November, I wrote a blog entry – “Sustainable Strategy Goes Mainstream” – in which I quoted Jeff Immelt, current Chairman and CEO of GE.

I had just seen Immelt speak at the Business for Social Responsibility conference in New York where he said that he believed the modern corporation (or at least GE) has four major tenants for future operation.; the big take away from his talk was his belief that corporations can and should exist to solve social and environmental issues as a result of their operations, products and services. As a point of interest, the person who sent me the FT article was Jeff Klein, executive director of FLOW Idealism.

FLOW was created by a group of corporate leaders (John Mackey, Whole Foods Market Founder included) who believe just what Immelt stated above. This is the concept of Conscious Capitalism. Quite simply, corporations can and will exist to serve the people who keep them in business. After all, aren’t corporations in existence to provide some product or service for humanity, not the other way around?

A great example is Whole Foods Market’s Whole Planet Foundation which provides $200 (or less) microloans for budding entrepreneurs world-wide (many of whom reside in third world communities). I just learned about the program last month when I was in the Whole Foods in Columbus Circle (NYC) and was asked if I wanted to donate $1 to the cause. This type of program is beyond philanthropy; it is a way that our consumerism can shift communities, changing lives and whole countries. With programs such as the Whole Planet fund, we can begin to return to being world citizens from our most recent role of mere consumers.

It is encouraging to see a corporation take inspiration from the brilliance of Professor Muhammad Yunus, the recipient of a 2006 Nobel Peace Prize for his creation of Bangladesh’s Grameen Bank – a pioneer of microcredit and a tool to empower the poor. Now, GE just lost their AAA rating, so maybe Welch was brought back in to the media arena in order to restore investor confidence, rather than out a true belief in shifting the corporate model. We shall see.

Regardless of intent, his words are bound to have a ricochet effect throughout the corporate world. I look forwarding to watching and listening. How about you?

PS: for those of you wishing to learn more about the concept of Conscious Capitalism, I suggest you check out Michael Strong’s book Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the Worlds Problems or John Mackey’s audio CD called Passion and Purpose: The Power of Conscious Capitalism.

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