Little Green Lies


BusinessWeek – October 29, 2007

BusinessWeek must be one of the most venerable periodicals in the business community. Few magazines can acclaim to the level and depth of business discussion. Most CEOs and business leaders read or at least skim the magazine on a regular basis.

As their cover story, BW decided to cover the idea that "going green" was a good thing for business.  I have discussed this issue before and it was good to get BW’s opinion and coverage on the story.  Their perspective is quite interesting.

In the article, real business issues are discussed such as the fact that going green means spending money that might be better served by investment in some other area. The article also discusses carbon credits (something that I have publicly said I detest many times) and points out that many of these programs are shams, may not really helping the cause, and tend to be used for PR purposes only.

It may be interesting to you to read the comments of other sites on this article as well.  Check out:

The Business of Green
“Little Green Lies”
Green Markets: Valuing Renewable Energy Credits (RECs)
The Underside Of Green Business

It is a great article and my highlights below will not do it justice.  Make sure you follow the link to the original story at the end.  Once again, I have to point out that this posting precedes that date of the publication but that is only because magazines follow the silly habit of post-dating their issues.

The company features its environmental credentials in its marketing and has decorated its headquarters with green trophies and plaques. Last year Time honored Schendler as a "Climate Crusader" in an article accompanied by a half-page photo of the jut-jawed executive standing amid snow-covered evergreens.

"Who are we kidding?" he says, finally. … "I’ve succeeded in doing a lot of sexy projects yet utterly failed in what I set out to do," Schendler says. "How do you really green your company? It’s almost f—— impossible."

With rising consumer anxiety over global warming, businesses want to show that they’re part of the solution, says Chris Hunter, a former energy manager at Johnson & Johnson who works for the environmental consulting firm GreenOrder. "Ten years ago, companies would call up and say I need a digital strategy.’ Now, it’s I need a green strategy.’"

And while some environmental advances pay for themselves in time, returns often aren’t as swift or large as competing uses of corporate cash. That leads to green projects quietly withering on the vine. More important, and contrary to the alluring Lovins thesis, many major initiatives simply aren’t money-savers. They come with daunting price tags that undercut the conviction that environmental salvation can be had on the cheap.

Schendler grits his teeth over the failure of modest proposals, such as his plan last year to refurbish one of the resort’s oldest lodges to use less energy. He estimated the $100,000 project would have paid for itself in seven years through lower utility bills. But the money went for new ski lifts, snowmobiles, and other conventional purchases. "The availability of capital is not infinite," says Donald Schuster, vice-president for real estate.

Beaten back frequently, the environmental executive concedes that he made a mistake last year when he pushed the resort to make audacious green claims based on the purchase of "renewable energy credits."

Aspen Skiing is far from alone in making suspect claims of green virtue. Setting aside questionable renewable energy credits would wipe out the climate-saving assertions of dozens of major corporations celebrated for their environmental leadership. Office products retailer Staples has used [carbon credits] to turn a 19% spike in emissions since 2001 into what it claims to be a 15% decline, the company’s sustainability reports show. PepsiCo and Whole Foods Market have employed the credits to make declarations that every bit of pollution from electricity they use is negated.

Much corporate environmentalism boils down to misleading statistics and hype. To make real progress, genuine accomplishments will have to be sorted out from feel-good gestures.

Schuster recalls. "One of my concerns was that we were committing capital based on theoretical returns without any real opportunity for a look back on the actual returns."

Back in 2003, FedEx announced that it would soon begin deploying clean-burning hybrid trucks at a rate of 3,000 a year, eventually sparing the atmosphere 250,000 tons of greenhouse gases annually from diesel-engine vehicles. … Four years later, FedEx has purchased fewer than 100 hybrid trucks, or less than one-third of one percent of its fleet. At $70,000 and up, the hybrids cost at least 75% more than conventional trucks, although fuel savings should pay for the difference over the 10-year lifespan of the vehicles. FedEx, which reported record profits of $2 billion for the fiscal year that ended May 31, decided that breaking even over a decade wasn’t the best use of company capital.

But even as he helped launch this campaign, Schendler had a queasy feeling. At some level, he suspected the [carbon credits] weren’t causing any new windmills to be built. They weren’t literally offsetting anything. He felt torn.

This is a fairly long article so please click through to read in its entirety or go to the newsstand and by the full magazine. Also, there is a podcast that is linked from that article and you may want to listen to the story behind the story.

Technorati Tags: ,
Tags: , , , , , , , , , , , , , , , , ,