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Top 10 Green Business Stories of 2009
January 11, 2010
We're all excited to focus on 2010 after a rough year for so many, but I want to think back on 2009 just one more time. The greening movement slowed along with the rest of the economy, but not by much, and some things moved ahead fast. With a couple of weeks off over the holidays behind me, and a bit of time and perspective since, I thought it would be fun to list the most important sustainable business stories of the last year.
Let me first clarify what I mean by an "important" or "top" story. These are some things that happened, evolved, or exploded on the scene that will have a long-range impact on companies and how they operate. Some are obvious (Copenhagen, duh), some are much less known (stirrings at the bottom of the pyramid).
But mostly, to be honest, since no list like this could ever be complete, these are the stories that I found personally and strategically interesting…or that a few of my colleagues found compelling (thanks to Chris Laszlo, Michelle Lapinski, Robyn Luhning, Will Sarni, and the team at SLM for their input.) I'll admit to a U.S. and a "green" bias (vs. triple bottom line).
Ok, here it goes: my favorite 10 stories, oversimplified (and one from the theater of the absurd), along with some very brief thoughts on what the future holds on these issues…
1) Copenhagen fails…or does it?
When the world could take a break from talking about Tiger Woods in December, all eyes were on Copenhagen for history's largest multi-party talks. Most of the big name countries came in with some promises for emissions cuts. But then not a lot got done in the first 11 ½ days of the negotiations. As one participant from a major NGO said, this was the first time that the presidents of countries arrived at a meeting like this with nothing really agreed to already. President Obama managed to squeeze a mildly interesting agreement to agree some more from China, India, Brazil, and South Africa. Pros: First time China, India, and U.S. were at the same table with everyone acknowledging a serious problem. Cons: Where was the EU or, say, the rest of the world? Looking forward, who knows what the policy framework that companies face will be. But even if the countries can't step up,regional agreements for trading regimes and city-level commitments to cut emissions are flourishing, all of which will affect businesses profoundly.
2) The debate over climate science rages on (in the U.S. at least)
hacked climate email "scandal," the timing of which was horrible and suspicious, remains a big story…but not because the emails demonstrate anything that changes the overall scientific story. (See AP analysis, "Science not faked, but Not pretty"). I argue all the time that, in a way, the science doesn't matter - there are incredibly powerful reasons to cut carbon regardless of the specter of climate change (see 8 here, including national competitiveness and national security). Also, not to be cheeky, but if the world is warming (which the American Meteorological Society confirms - the 2000's were the warmest decade yet), then all the skeptics better hope that the problem IS anthropogenic. If not, we're really in trouble since that means we can't do anything about it. But, again, there are lots of reasons to cut carbon anyway. Looking forward, this story has major legs, particularly on Fox News. It will continue to embolden deniers and undermine efforts to create a commitment to action in this country for a long time to come.
3) The EPA steps in
If the Congress won't legislate, the EPA - at least under this administration - will regulate emissions. It began with the agency setting up a Toxics-Release-Inventory like system that requires large emitters (10,000+ in all) to report greenhouse gas emissions. Going beyond this form of regulated transparency, the EPA declared GHGs a public health threat and made it clear it will impose rules if it has to. Looking forward, prepare for some restriction on carbon, either legislative or regulatory…pick your poison. I think most businesses would prefer the former, so look for continued lobbying from smarter companies for a congressional solution.
4) Wal-Mart keeps the pressure up (and saves the rainforest?)
I can't really overstate the importance of Wal-Mart's role in the green business movement. As one of the "superpowers" of greening in this country, and now the world - along with GE and IBM and a few others - the retail giant keeps raising the green bar for its own operations and, more importantly, suppliers. Wal-Mart has started asking all suppliers 15 key questions, which are the first major step toward a product-level eco-label. In much less covered news, Wal-Mart Brazil "asked" its 20 biggest suppliers (Unilever, Nestle, P&G, etc) to sign an agreement banning all soy and beef sourced from the Amazon (see my first-hand report on the meeting in Sao Paolo here). This is the leading edge of a large movement - retailers and consumers increasingly want to know where something came from, who made it, and so on. Looking forward, expect more of the same from the big guns and start taking part in this vital value chain conversation.
5) Domino's employees deliver a new kind of openness.
Here's a quick story of your worst PR nightmare. Two of your own employees decide to do disgusting things to your food, film it, and put it up on YouTube. Millions watch it. As a Domino's spokesperson put it in USA today, "Nothing is Local Anymore." Looking forward, expect that what you do anywhere, good or bad, will become public record. Learn to embrace transparency before it swallows you.
6) IBM starts building a "smarter planet"
Was IBM the first company to talk about using IT to reduce environmental impacts (tackling the "other 98%" of emissions that were not directly attributable to IT energy use)? Of course not. But Big Blue's the loudest and most effective at it. The campaign is a brilliant piece of positioning, but most importantly it's backed up by real projects the company has worked on, from redesigning distribution systems in Asia to reduce miles to rethinking traffic patterns in Stockholm. Looking forward, green IT will be a huge force in the 2010s. How can it help your business?
7) The demise of Detroit
For years, U.S. automakers have had to deal with higher cost structures than their foreign competitors, mostly from pension and health care costs. But starting in 2008, sales started to plummet for the "Big 3" due to a much bigger problem - they weren't making the cars people wanted. When the green wave hit and energy prices rose fast, their less-green product portfolio became a huge liability. It came to a head in 2009 and GM, once the most powerful company in the world, went bankrupt (more on my take on this story in my new book Green Recovery). GM and others missed the green wave. But at the same time, innovation in the industry is at an all-time high with new business models from companies like Better Place, electric or hybrid-assist cars coming out in 2010s from pure players Tesla and Fisker, and similar new offerings from the giants Nissan, Ford, VW, and yes,GM's Chevy Volt. Looking forward, there may be hope for Detroit yet. But it's important to think about how your industry might get shaken up as badly, as fast. What brought about the demise of Detroit can, and will, happen again elsewhere.
8) Some of our biggest capitalists get serious about climate and make noise
"We must put a price on carbon and a cap on carbon emissions." So said GE's CEO Jeff Immelt and VC giant John Doerr in a very important op-ed in the Washington Post in August. Two of our top business leaders made the strong case that we need legislation to drive innovation and keep our country competitive. At the same time, a few big brands publicly dropped out of the U.S. Chamber of Commerce, including PG&E, Apple, and Nike (which technically just left its board seat, not the whole chamber). Looking forward, while these were isolated events, but could indicate a continued evolution in how the business community interacts with the legislative world. The out-of-date response from the U.S. Chamber represents, as Will Sarni suggests, "the screams of the dinosaurs." The modern business leaders know we need a framework to stay competitive. Oh, and the title of Doerr and Immelt's piece? "Falling Behind on Green Tech", which brings me to…
9) China emerges as a green tech leader…and the world's biggest emitter
China is nothing if not complicated. As skeptics of global agreements point out to me frequently, China is building a coal plant every week. True, but the country is also becoming the world's biggest producer of solar technologies, is riding up the learning curve on wind very fast, and is investing in green infrastructure, including $50 billion to build 16,000 miles of high speed rail. Looking forward, the level of investment and application of China's famous labor economies will drive down the cost of clean technologies the world over. Good news for the planet, less good for the U.S. if we don't get off the stick.
10) The bottom of the pyramid becomes a source of innovation
Because I admittedly lean focus mainly on the environmental stuff, let me end with a great sustainability trend that transcends just "green." The Wall Street Journal published an interesting piece in October about innovation in India. By focusing on the bottom of the pyramid, firms are coming up with entirely new ways to provide products and services, from a $200 bank "branch" (basically a guy and a card scanner) to a $23 stove. In the medical realm, we hear stories of radically cheaper eye surgery or prosthetic feet or knees (from Jaipur, India) for $20 instead of $10,000. Looking forward, more companies will realize that a "bottom of the pyramid" strategy isn't just about serving a new market; it can help you radically rethink your business. It's a dramatic new source of innovation.
And, finally, one stinker of the year from the land of "Huh?"
10 1/2) Forbes names Exxon green company of the year
What can I say about this one? The story was about Exxon's growing business in natural gas. Is natural gas cleaner than coal? Of course. Does Exxon produce an awful lot of it? Sure. But calling the company that has been the major source of funding to undermine scientific consensus on climate the "green" leader defies belief. (More on how crazy I think the media has become in its quest for "counterintuitive" here.) Looking forward, expect more crazy stories from a desperate media.
So, besides a few hiccups, even with the worst economic conditions in decades, the real leaders made a great deal of green progress in 2009, all with enormous pressures and tight resources.
I look forward to what 2010 will bring in new developments!