By Andrew Winston
Here's my attempt to capture the most important stories that
affected the greening of business in 2010. To keep this to blog
length, it's going to be quick, so see the links for more on these
stories.
The first five are macro-level issues that
affect the context for business:
1. The climate bill dies in the U.S. Senate.
Any hope for a national approach to tackling the largest challenge
facing humanity petered out pathetically this year (see the complete, sad tale in a Pulitzer-worthy
New Yorker article). Unfortunately for every other country, this is
a global story. When the U.S. can't get its act together, the world
can't create global policies, and thus the Cancun meeting last week
resulted in some nice agreements to raise funds for adaptation
-- arranging the deck chairs on the Titanic, anyone? -- but no
binding targets on carbon.
2. Nature strikes back/Climate change is real.
Ironically, given the rising debate in the U.S. on the science, the world got hotter, a lot hotter, this
decade and this year. Russia saw its worst drought in 1,000 years
(video), and Pakistan was overcome by flooding
(video). Scientists will always give the caveat
that you cannot blame climate change for any single weather event,
but let's get real - this is what devastating climate change looks
like on the ground. These weather events also directly affect
resource availability, bringing me to my next point...
3. Resources get very tight. The drought in
Russia destroyed 40% of its wheat crop, so Putin pulled wheat -- 1/6 of the global trade
in the crop -- off the global market, driving up wheat prices. The floods in
Pakistan helped double the price of cotton. And I could write
a book on the topic of rare earth metals, those precious elements
that make nearly every green technology possible and go into every
iPhone. China mines 95% of these metals, and it needs them all now,
making the U.S. "vulnerable to rare earth shortages." We're
also vulnerable on fossil fuels. We learned from the massive spill
in the Gulf of Mexico that readily accessible oil is a thing of the
past -- we don't dig one mile under the ocean for the heck of it.
So most natural resources are getting more scarce, from oil to
metals to crops. Smart companies like Hitachi are trying to find
solutions, such as its new plan to develop rare earth recycling technologies.
4. China, China, China. Did I mention rare
earth metals? Or the rise of the world's largest solar producer
from a manufacturing base of nearly nothing a few years ago? Or how
about China's unparalleled (and some would say illegal) support for its renewables companies, which
has the World Trade Organization fretting about trade
barriers? China is very serious about its green ambitions, with
support from the very top, and the business
community is taking note.
5. Renewables are for real and moving fast. Ok,
there's some good news. The market for renewables is growing fast.
About 45% of Portugal's electricity comes from renewables, and this
is up from 18% in just five years. Germany, not
really the sunniest country in the world, added 1% of its electric needs in solar in
2010 alone (it took 10 years to get the first 1% online, and just 8
months for the second 1%). No wonder HSBC says the market for clean
tech and climate change solutions will top $2.2 trillion by 2020.
Now for the company-level stories:
6. Supply chain pressure continues to rise (a.k.a.,
Wal-Mart doesn't slow down). Even coming out of the
recession, this was a big year for green supply chain
announcements. In February, Wal-Mart said it would eliminate 20 million metric tons of GHG
emissions from its supply chain. Then in October, the retail giant
announced it would double the amount of locally-grown produce on
its shelves (and former sustainability exec Matt Kistler indicated
this year that products getting higher scores in its Sustainability
Index would get more shelf space). We also saw big
announcements from P&G and Kaiser Permanente on supplier scorecards, IBM greatly increasing its demands on
suppliers, and Pepsi using detailed carbon lifecycle data to
make suppliers rethink how they grow Tropicana oranges.
7. Zero is the new black. Companies seem to be
tripping over themselves on the path to "zero waste." GM announced
that 62 of its plants now send zero waste to
landfill, and UK retailer Marks & Spencer reached a 92% diversion
rate on the way to its zero goals. And Sony one-upped everyone by setting a goal of
zero environmental impact across its operations
by 2050.
8. Big goals were back. Recession-schmecession.
Sony wasn't the only one setting aggressive targets. Panasonic said
it wanted its GHG emissions to peak by 2018 and it would greatly increase
sales of eco-products. Unilever has probably gone the furthest,
announcing it would double sales by 2020, but halve total
environmental impact (among other big goals). Unilever's leaders are serious about driving these plans
into the operations of the whole company.
9. Electric vehicles storm the market. The
Nissan LEAF was just named 2011 European Car of the Year, and GE announced it would buy 25,000 electric
cars. Since the auto industry is one of the biggest in the
world, there will be ripples from this movement. Enough said.
10. Small guys can do it too. It's easy to get
caught up in the tales of giant companies. So one of my favorite
stories of the year is a simple example of eco-efficiency and
savings from 10-employee Bowman Design with just 2,000 square feet
of office space in Southern California (where else?). See founder
Tom Bowman's description of his company's path to a 65% reduction in GHG emissions and $9,000 savings
annually (ok, I'll admit that I didn't mind that Tom
name-checked my book Green to Gold in his article, but I
don't know him).
11. (Bonus!) The Military gets serious about
green. Honorable mention to the government and military,
which is technically not "green business". But they're not kidding
around, from plans to greatly reduce reliance on oil and diesel in
Army operations, to Navy sustainability plans and test flights of
planes running on biofuels. Go military
green!
Looking Forward to 2011
No list would be complete without utterly over-confident
predictions of the future. It's obvious that the pressures/themes
above will continue to get stronger in the coming year. In
particular, and in addition...
- Supply chain pressure will evolve and get more sophisticated
(such as retailers who said in August they would not buy fuel from Canadian oil sands).
This shift will be partly driven by...
- A data explosion around green is brewing. Companies will know
more than ever about their impacts up and down the value
chain.
- Water will become a very big topic for business (it began this
year, but there will be some great stories in my 2011 wrap up a
year from now). My first couple of blogs of the New Year will look
at water strategy.
- Biomimicry, the design principle that suggests looking to
nature for great ideas, will gain currency
- Energy innovation will be the order of the day (e.g., the Paris metro station that captures body heat to
warm a nearby building)
But here's my final, shocking prediction: climate change
policy won't matter (much). Even though the failure of the
bill was my #1 above, #2 through 10 tells me that for business,
the logic of green does not depend on believing in climate
change, or in having a law in place. The natural resource,
supply chain, innovation, and profit drivers are just too
strong.
Business will be getting a lot greener in every sense of the
word, no matter what political battles are waging. We're going to
stop debating climate in the business community and just focus on
the larger case for prosperity, for companies and countries
alike.
I'm sure I missed many, many great stories. Please share your
favorites here, and have a merry green new year!
Andrew Winston works with
leading companies to drive growth with environmental thinking.
He is a globally recognized expert on sustainability and is
author of Green Recovery and co-author
of Green to Gold, the best-selling guide to what
works - and what doesn't - when companies go green. (This post
first appeared at Harvard Business Online.)