Green is the new bottom line
TEXT OF INTERVIEW
MARK AUSTIN THOMAS: 2006 may go down in history as the year corporate America went green — and not as in dollars. For every banner headline reporting soaring energy costs and warnings about global warming, there was another CEO finding the gospel of environmental awareness. Even Victoria’s Secret changed its ways. The company will now mix in a little recycled paper with its racy catalogues, all 360 million of them. Sam Eaton is our Marketplace Sustainability Desk Reporter. Welcome Sam.
EATON: Thanks.
THOMAS: Sam. what does it say when even lingerie companies are getting in on the game?
EATON: I guess printing push-up bras on recycled paper is one way to draw attention to corporate sustainability Mark. It also speaks to some of the pressure some of these more visible companies are feeling from shareholders and environmental groups to clean up their ways. But I think what’s interesting about 2006 is that it’s not really the question of morality and doing the right thing that’s driving the shift in corporate America. It’s all about profits. One of the biggest companies to green this year was Wal-Mart. It’s launched a program to buy only sustainably-harvested fish. It’s become one of the world’s largest buyer of organic cotton. It’s also pushing its vast network of suppliers to cut back on packaging and waster. Now this isn’t a company known for turning a blind eye on he bottom line and that’s why so many people in the business world are watching Wal-Mart so closely.
THOMAS: OK so profits and shareholders are pushing for change at the large corporations. What’s causing small businesses to think green?
EATON: Two words Mark: Venture capital. Investors are basically falling all over themselves trying to pump cash into startups that have anything to do with clean energy. Money flowing into the market from venture capital and private equity firms has quadrupled over the past few years to $2 billion this year and that’s only expected to grow in the coming years as global warming, high oil prices and energy security concerns drive innovation and demand for alternatives.
THOMAS: Are there risks for companies who jump on this bandwagon?
EATON: Well startups are always risky. I mean that’s been reflected in the market volatility for some of these clean energy companies. Analysts say despite the potential for 20 to 30 percent annual growth for the sector, investing in the market isn’t for the weak of heart. And on the corporate side, we saw this year how a company that reinvents itself as clean and green can sometimes get into hot water. Just look at BP’s problems. Here’s an oil company that repositioned itself with the logo Beyond Petroleum, so when it had several oil spills this year in Alaska’s North Slope, the company found itself in the hot seat, trying to repair its image as an environmentally-friendly company.
THOMAS: How seriously should we take this trend Sam? I mean is corporate America going to save the planet?
EATON: Mark it’s a pretty big rock to throw into the pro-environment pond, but I don’t think anyone is holding their breath for corporations to drive the changes that are needed to really address things like global warming and energy use. Government will ultimately have to play a role. Many states, like California, have been stepping in with their own energy initiatives but so far the federal government has remained largely absent from the debate. I guess that’s one we may be talking about at the end of next year.
THOMAS: Thanks, Sam.
EATON: Thanks.
THOMAS: Sam Eaton covers Sustainability issues for Marketplace. And in Los Angeles, I’m Mark Austin Thomas. Thanks for joining us. Have a great day.
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