Key Messages
The Dark Side Of Corporate ‘Sustainability’: Uncovering The Myths Behind Greenwashing
Have you ever wondered why companies are exploring sustainable practices? While they may tell you that it’s because they want to do their part to save the world and be eco-friendly, that isn’t always the case.
What many of these companies are really after — is to increase profits and market share.
You’ll find this out when you take a look at the cleaning products section in your local supermarket – row upon row of “eco” products with green labels tout the company’s sustainability credentials.
But when looking at these products, ask yourself – are they truly as eco-friendly as they proclaim? Once you uncover the secrets of corporate environmentalism, your perspective may change.
In Eco-Business: A Big-Brand Takeover of Sustainability, author Raphael Drozdzynski takes us on a journey, unveiling why Greenpeace and Coca-Cola share a common cause; how a company can track a single banana from Peru to your breakfast plate; and why soft drink giants can carry more clout than some governments.
With all this information about corporate sustainability practices being exposed, you can make better informed choices on what really matters and drives sustainable change in society today.
The Dangers Of Eco-Business: How Companies Pursue Profit Despite Negative Impacts On Social Justice And The Environment
Eco-business practices may seem like they are focused on protecting the environment, but ultimately their primary driving force is profits.
This is because restructuring a business to be more sustainable often results in increased efficiency and reduced manufacturing costs – which translates directly to more profit for the company involved.
Take the example of Toronto’s Fairmont Royal York Hotel, who invested $25,000CAD into energy conservation.
In the end, they ended up generating over $200,000 CAD annually in savings – meaning more money in the pocket of the hotel.
This type of eco-business has a negative impact on social justice and environmental conservation in the long run.
That’s because it allows companies to produce more goods with lower per-unit costs – which results in an increased total environmental impact even if there’s a decrease in water, energy, and material consumption each unit produced.
For instance, Coca-Cola’s increased production due to decreased production costs have had a taxing effect on sugar cane suppliers – leading to soil fertility dropping by 40% within 20 years in Papua New Guinea alone.
And as eco-businesses become increasingly successful, their power over economics also grows – which can be witnessed through Coca-Cola’s control over commodity producers that surpasses that of the United Nations.
All this dissected proves that Eco-Businesses are primarily motivated by profit and not by concerns for health of planet and society at large.
The Rise Of Eco-Business: Economic And Social Factors Behind The Trend
Several economic and social factors have motivated companies to embrace eco-business ideas.
One of the main driving forces behind this shift is globalization, which has forced companies to make production processes more cost effective.
To maintain control over their outsourced manufacturing, firms are turning to sustainable practices.
This was evident in American toy manufacturing company Mattel’s experience with production outsourcing in China in 2002.
Unable to monitor every aspect of the process due to numerous facilities producing parts, they suffered from over 25 product recalls in a decade.
In response, Mattel implemented a new strategy centered around efficiency and sustainability which resulted in improved product quality.
Another factor influencing eco-businesses is commodity price fluctuations – a major threat to profitability.
Companies are engaging in extraction processes so that they can better regulate their pricing, eliminating the possibility of sharp swings like those seen when oil prices fell from $200 a barrel in 2013 to just $50 in 2014.
Coca-Cola is one such example; investing heavily into water production helped stabilize their supply costs.
Finally, corporations are jumping onto the eco-business bandwagon because of the large and growing middle class in developing countries providing untapped potential for revenue growth.
Hindustan Unilever saw great success by expanding its retail outlets from 6.1 million to 6.6 million stores in India alone – leading to a 14% increase in sales volume!
Sustainable approaches allow businesses to produce goods faster and more efficiently than ever before so that they can meet rising demands while minimizing costs along the way.
The Profits Of Eco-Business: How Investing In Sustainability Leads To Tremendous Gains
Adopting eco-friendly practices isn’t just about staying afloat in today’s competitive market – it can be a major asset that leads to tremendous profits.
Studies have shown that eco-business opportunities will be worth an impressive $6 trillion over the next 40 years, demonstrating that being green pays off!
It’s all about efficiency: by targeting the hidden costs of operations, businesses reap incredible benefits when it comes to cutting costs and boosting bottom-line earnings.
For instance, Walmart reduced lighting from 32 to 25 watts and saved a whopping $200 million annually!
An additional benefit of going green is “green” labeling, which builds customer trust and boosts sales.
Homes labeled “Energy Star” are marketed as reducing operational costs in heating, cooling and water delivery by 20 or 30 percent – not to mention added value for resale value.
All this has tapped into a new market as well: according to Electronic Research Institute, the smart grid market will reach a staggering $2 trillion over 20 years in part due to improvements in energy consumption through optimization – up to 40%.
Therefore, it is evident that by embracing eco business practices, businesses can increase profits and tap giant markets with potential worth trillions of dollars!
Companies Benefit From Going Green Through Supply Chain Tracing, Life Cycle Assessments, And Sustainability Codes Of Conduct
Eco-businesses can maximize their environmental impact by taking charge of the supply chain.
By tracing every step of the manufacturing process and controlling it, companies can identify and eliminate any kind of waste in the process.
An example is Home Depot, who faced allegations from Rainforest Action Network about selling endangered or old-growth wood.
To address this issue, Home Depot looked at every product that it sold to know exactly where these products were sourced from.
This eventually led to RAN calling off its boycott.
To further increase efficiency, eco-businesses can also use a life cycle assessment (LCA) and figure out where exactly the most damage is being done so that improvements can be made to cut down on energy or resources used in that stage.
Companies like IKEA have successfully employed this technique; they improved their supplier’s energy efficiency by 37 percent with an LCA and saved nearly €350,000 each year!
Finally, eco-businesses can ensure suppliers adopt green approaches by setting up a sustainability code of conduct.
Hewlett Packard started this trend in 2000 and now has seen many benefits such as 8 percent fewer greenhouse gases than 10 years ago and 89 percent less energy consumed in their new server system which costs 77 percent less than traditional servers.
Their waste production has also reduced significantly by 37% since 2012!
Becoming An Eco-Friendly Business: The Benefits Of Certifications, Transparency And Tracking
Companies that want to be known for their eco-friendly efforts need to gain recognition for these activities, as well as inspire trust and loyalty from customers.
One way of doing this is by using eco-labeling or eco-certification from government sources in order to establish a green image.
This has been very successful for many companies – namely General Electric, who reportedly earned $17 billion in annual revenue four years after launching its Ecomagination project.
Unfortunately, due to the influx of products with “green” labels on them, many consumers are growing more skeptical and cautious when it comes to buying eco-friendly items.
This has led to some companies taking an extra step and reporting back on their sustainability initiatives, being fully transparent about their environmental credentials.
It has become increasingly common for Fortune 500 companies to report on traits such as carbon emissions (an example of this being that in 2003 only 20 percent were openly reporting numbers while in 2010 it had increased to 75 percent).
Other companies have even gone above and beyond by allowing customers to track certain products right back through each stage of production – Disney allows its customers to trace individual Mickey Mouse T-shirts, whilst Dole gives people a chance to track bananas all the way back to their farm of origin using Google Earth.
Overall, through initiatives like eco-labeling and sustainability reporting businesses can establish credibility as an eco-business without the worry of accusations of greenwashing .
The Pros And Cons Of Working With Corporations For Sustainable Business Initiatives
Governments and NGOs can certainly benefit from partnering up with eco-businesses if they want to make dramatic progress on the environment.
However, this kind of collaboration needs to be taken with caution.
Eco-businesses may be able to provide crucial resources, but by lending them too much power, corporations could start exploiting their relationships and going downhill with bad practices.
For example, if two organizations join forces, one corporation may end up using their strength over the other: such as when Unilever and Procter & Gamble were fined for fixing prices when introducing an eco-friendly laundry detergent.
Not only that, but an overly close relationship could prevent an NGO from speaking out against its collaborating partner’s wrongdoings.
That doesn’t mean we should avoid these collaborative relationships though; a case in point is Greenpeace and Coca-Cola who worked together to reduce greenhouse gas emissions all around the world back in 2009.
It just means that governments and NGOs have to take great care when deciding which companies to collaborate with when it comes to sustaining the environment – it is still important for them to hold corporate entities accountable for their actions so that eco-businesses are kept properly in check if we want some real positive change here.
Wrap Up
The final summary of this book is that eco-business is ultimately about expanding profits, rather than environmental protection or social justice.
Eco-friendly practices may help reduce water and energy usage as well as waste production in the short term, but they often lead to increased consumption in the long term.
If looking to have a real impact on the environment, shoppers should ignore the green hype surrounding different brands and instead focus on decreasing their overall consumption.
This will result in less pressure being placed on natural resources, ensuring that future generations have the same access to them.
