Today, big-brand companies seem to be making commitments that go beyond the usual “greenwashing” efforts undertaken largely for public relations purposes. In Eco-Business, hot off the press, Peter Dauvergne and Jane Lister examine this new corporate embrace of sustainability. Here, they answer a few questions about their new book.
What is “eco-business”?
Eco-business is a corporate strategy to turn sustainability policies and programs into a tool to boost market control and growth as well as project an image of corporate responsibility. We introduce the term to avoid the misunderstandings that arise from the many meanings of “sustainability” that range from fine-tuning technologies to a new world order—a murkiness that some firms shrewdly exploit to placate policymakers and gain customers.
How did the idea for this book come about?
Why, we wondered, were big-brand companies like Walmart and Coca-Cola now making sweeping promises of future sustainability? Was it even possible for such companies to produce zero waste or zero toxics or zero deforestation? Was it conceivable that these firms might one day use 100% renewable energy or conduct 100% sustainable sourcing? We wanted to understand why, after decades of deceptive spin, big-brand companies in particular were making such promises, even though the chances of keeping them would seem slim to hopeless. We were curious, as well, to investigate whether making these “commitments” might be doing some good. Is there any real progress? Or is this just greenwash gone wild? If so, why over the last 5 years have so many activist groups partnered with big-brand companies?
Why are so many companies now making big eco-business promises?
For decades now, environmentalism and consumer demand have been nudging firms to look for ways to improve environmental and social performance. So have corporate-NGO partnerships, laws, and fears of future regulation. Yet it is a “perfect storm” within the global economy that is now accelerating the uptake of eco-business. Pressures and incentives are arising from globalizing supply chains, fluctuating commodity prices, and rising resource scarcities; and new opportunities are emerging in the fast-growing markets of China, India, and Brazil. In this context, eco-business is good business: good for corporate reputations, lowering risks, and achieving efficiencies and savings and growth.
How does corporate sustainability foster the growth of big retail?
Eco-business legitimizes the consumption of even more discount goods. Defining sustainability in corporate terms is enabling big retail to achieve competitive advantages by increasing efficiency and productivity, reducing waste and uncertainty in supply chains, and opening new markets. In both developed and emerging economies, it is also increasing demand for cheap goods by building big brand credibility among consumers who expect brands to be value-priced and responsible.
Today’s consumers are more cautious than in the past. How are companies using eco-business to gain consumers’ trust and drive sales?
Eco-business goes well beyond labeling niche products as “fair trade” or “ethical” or “sustainable.” Notably, it is “greening” conventional goods: reducing package size, increasing recycled content, and tracking “input sources.” Companies are adopting eco-labels (some legitimate and some not). And they are personalizing sales strategies to target “more discerning” shoppers. Interactive company websites and social media sites, for example, increasingly allow for consumer feedback to build brand loyalty and trust.
How are companies like Walmart benefiting from sustainability programs?
Eco-business includes codes of conduct, life-cycle analysis, and supplier scorecards. Audits, green purchasing policies, and reporting are also helping firms like Walmart to manage home operations and control suppliers for innovation and competitive advantages. Gains include higher quality inputs, lower consumer prices, and better profit margins. Sustainability programs are also helping firms to improve brand value and standing – thus increasing consumer trust as well as, at the end of the day, sales.
Why are NGOs partnering with companies? What are the benefits and drawbacks?
NGOs are frustrated that environmental problems continue to outpace solutions. At the same time, NGOs can see a potential governance reach from partnering with big brands that far surpasses any government mechanism. Organizations like the WWF and the Sierra Club are looking to Coca-Cola, McDonald’s, and Walmart to accelerate the greening of global supply chains. Some quantifiable gains are taking place: for at least some goods, for example, energy use and waste per product sold is going down. Turning sustainability into eco-business, however, privileges private interests over public concerns. Despite some modest benefits, ultimately NGO partnerships with big brands are restricting the ability of NGOs to query and alter an underlying cause of today’s environmental crisis: ever-strengthening consumerism and unequal globalization.
Is the corporate takeover of sustainability a catastrophe for the global environmental movement?
Eco-business presents a quandary for environmentalists. Never before have they had such an opportunity to team up with corporations to trim down waste, extend recycling, and enhance efficiency across global supply chains. Yet partnering with big-brand companies brings a risk of cooptation – and an even greater danger of undermining any chance of achieving the political and economic changes necessary for true sustainability. Eco-business is fundamentally about sustaining business, not sustainability of the earth. It is a competitive strategy to make and sell more stuff. Those environmentalists supporting eco-business are well aware that doing so could backfire as discount consumerism surges. Nonetheless, many are willing, even eager, to engage eco-business, often sacrificing some ideals and, yes, risking a “catastrophe” in the hope of finding a sustainability path through, rather than around, the corporate world.