When Wal-Mart says the word, companies listen – and the word right now is "sustainability." The retail giant announced this past month that all of its suppliers, including meat and poultry companies, must develop comprehensive programs to promote sustainability and transparency – or else contemplate a future without Wal-Mart as a customer. Yet as meat, poultry and other kinds of companies feel their way toward the sustainable future, the big issue, according to green-guru Joel Makower, is that few companies and their leading executives have any sort of encompassing strategy for approaching sustainability.
Makower, who will keynote the MEAT&POULTRY-sponsored Sustainability Summit at the Worldwide Food Expo in October, says too many companies do "random acts of greenness," as he calls them. What often is missing is an understanding of how practicing increased environmental sensitivity, reducing the carbon footprint, and improving corporate as well as social functions ensure a long-term future. These are the key ingredients of corporate sustainability that work together to create a better business.
"One of the challenges is that companies are still trying to figure out just what’s going on out there," he says. "We don’t yet have an answer yet for the question, ‘How good is good enough for a business to be perceived as green?’ "
His 1990 book, "The Green Consumer," was one of the first to identify a new kind of attitude among consumers that would influence buying and lifestyle choices. Since then, Makower has consulted with hundreds of companies, offering advice on how to put green words into green action and become, potentially, more profitable in the process. He is the co-founder and executive editor of Greener World Media Inc., publisher of GreenBiz.com and the related sites ClimateBiz.com, GreenerBuildings.com, GreenerDesign.com, and GreenerComputing.com. Makower’s newest book, "Strategies for a Green Economy: Opportunities and Challenges in the New World of Business," published last December, describes how companies can succeed in the marketplace and at the same time keep with customer, societal and political demands to reduce environmental impact – and do so in a way that aligns with core business goals.
Greening the top line
He categorizes the history of corporate sustainability efforts into three periods. First came the era of compliance in the 1970s and ‘80s, after federal and state agencies began implementing broad and powerful environmental laws, such as the Clean Water and Clean Air acts. Then followed, in the 1990s, a time of "doing well by doing good," as Makower describes –
a period when businesses tried to grow the bottom line through efficiency measures that also improved the corporate reputation. "Now we have moved into a period when we’re asking, ‘How does being green help grow my top line?’ And that’s a really interesting conversation," he says. "Can being sustainable, being more green, lead to more and better product innovation? Can it lead to fundamental yet profitable changes?"
Officials with Wal-Mart Stores Inc. think so. At its Sustainability Milestone Meeting last month, CEO Mike Duke told the retailer’s suppliers that meeting the company’s set of sustainability and transparency standards will improve product quality, stimulate innovation, reduce the environmental impact of manufacturing, and institute greater transparency in the manufacturing, distribution and retailing chain. Wal-Mart’s new sustainability initiative "will put the customer in charge," Duke said. "Customers want and expect retailers to have greater transparency.
When companies don’t have transparency, they don’t have the trust of their customers."
"Absolutely he’s right," Makower comments. "This move by Wal-Mart has some very sound business rationale to it – and it’s going to unleash disclosure." In a comment he posted on his blog at www.readjoel.com shortly after Wal-Mart’s meeting, he wrote: "This is a solid first effort. It’s important to note that over the past year, Wal-Mart engaged some 20 universities, a handful of environmental activist groups, associations like Business for Social Responsibility, many of its key suppliers, and a small army of consultants. Patagonia’s iconoclastic founder, Yvon Chounaird, has played a role. It’s gone through a great deal of thinking and more than a few iterations. This was not some slap-dash effort."
He believes, that the Wal-Mart initiative could indeed revolutionize the retail supply chain, including its pipeline for meat and poultry products. "There’s no question that this is a significant move. If it becomes the default standard in retailing, then Wal-Mart becomes the new EPA," he says.
The question of costs
But what about concerns in commodity industries such as food production that meeting new standards such as Wal-Mart’s and implementing sustainability initiatives in general add unrecoverable costs? "It’s a valid concern that this will cost more – but so have a lot of things that companies have had to do to meet public expectations, such as improve workplace safety," he points out. "The public is beginning to see that low-cost has a price, and we’re going to have to do something about that price if we want to hold on to consumer trust."
He continues: "Agribusiness is not different than most industries in that it has waste and wastefulness issues. It is being asked to make some changes and it says these are hard to do. I’m sure they are.
But agribusiness is up against a hard wall on the other side – environmental issues, consumer trust issues, and now, as in the example of Wal-Mart, new standards from key customers. The early adapters are going to gain a competitive foothold. The laggards will get a free ride for a while, but they won’t last and they’ll find that they’ll be playing by others’ rules."
Makower already sees examples of sustainability leadership in U.S. manufacturing as well as abroad. "There are actually thousands of these initiatives taking place right now in the business world," he says. But he adds "green achievements can be hard to market, in part because so many things fall into the category of ‘doing less bad.’ That’s a hard case to make to the public."
Still, he’s beginning to see some changes in boardrooms and production plants. "The first thing a company needs to do is understand its environmental footprint – not just within the four walls of its operation but in the entire chain it’s operating in, from how the raw materials for a company’s products are produced to the landfill products and packaging eventually goes into. Then it needs to determine what it can control – the lowhanging fruit," he advises. "But what the leading companies are doing beyond that is asking, ‘How do we stay competitive in a world where sustainability is not just a standard from a customer but a guiding principle in the marketplace? How do we remake our company to reflect this new reality?’"
Steve Bjerklie is M&P’s East Coast correspondent, based in Franconia, N.H. He has worked as a journalist covering the meat and poultry processing industry for more than 25 years.
Sponsored by MEAT&POULTRY, the 2009 Sustainability Summit is being presented in conjunction with the American Meat Institute’s Worldwide Food Expo, held at Chicago’s McCormick Place Oct. 28-31. Joel Makower will be the keynote speaker for the event. His presentation is scheduled for Oct. 28 at 10 a.m. Prior to the show floor opening each day, attendees are invited to attend educational sessions focusing on sustainability for three consecutive mornings, Oct. 28-30, from 8-11 a.m. All WWFE attendees are invited to sit in on these thought-provoking presentations. Attendance is included in the registration fee for the WWFE. For event registration or to get more information on the Sustainability Summit, go towww.worldwidefood.com.
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