(Bansal & Roth, Why Companies Go Green: A Model of Ecological Responsiveness, 2000)
Whether it is resource scarcity, government legislation or a CEO with a vision, many companies have embarked on long term strategies with the role of CSR being a key element in moving companies forward. For Procter and Gamble (P&G), it was a strategic decision made in their new detergent centre in Lima, Ohio during the 1960s that brought about a fundamental change in the way business was conducted and helped P&G win a massive boost in market share (Visser, 2011). Embedded in the new department were five essential principles:
- Do what is right
- Work together
- Get results
- Develop continuously
- Do it all – simultaneously (Sanford, 2011)
The introduction of systemic thinking led to the removal of phosphates from washing powder after learning about its effect on water supplies. In addition, P&G also pressed for legislative change in Michigan. When the new law came into force P&G were the only company to still have products on the shelf (Visser, 2011). This policy change also saw P&G staff taking part in the clean-up of local rivers. Not to be left behind, Unilever, one of P&G’s fiercest rivals developed the Cleaner Planet Plan which aims to help both the company and end consumers reduce environmental impacts within the laundry sector. Unilever has also set ambitious targets to double business while halving their absolute environmental footprint (Visser, 2011).
For Seventh Generation, America’s largest non-toxic, natural cleaning products company, environmental impact has always been at the core of their business practice. The cleaning products are all designed with “cradle-to-cradle” principles. Named after the Great Law of the Iroquois Confederacy, the company “considers the impact of our decisions on the next seven generations” (Visser, 2011) (Sanford, 2011). Jeffery Hollender led Seventh Generation to almost 40% annual growth when in charge by providing a brand that people could trust. His goal was to do well by doing “good” and 40% growth must surely be considered a success in any business especially as this growth continued has continued during the recession (Visser, 2011).
Another widely acclaimed company is Interface Flor, the carpet manufacturing company, formerly led by Ray Anderson, who was one of Time Magazine’s Heroes of the Environment in 2007 (McDonough, 2007). In 1994, when preparing for a speech Anderson read Paul Hawken’s “The Ecology of Commerce” and was deeply affected by it (Visser, 2011). Since then Interface Flor have created Mission Zero, what Werbach calls a North Star goal otherwise known as a Big Hairy Audacious Goal (Werbach, 2009) (Collins & Porras, 2006). It’s an ambitious project which includes making “profits, leaving the world a better place than when we began” using techniques such as Life Cycle Analysis and Biomimicry to help understand and minimise environmental impacts (Interface Flor, 2008) (Visser, 2011). There are few companies as transparent as Interface (key data is found on their website) and fewer still where the ethos runs right through the entire company from the boardroom to the factory floor. The business implications have been significant for them as costs have decreased while profits have increased (Visser, 2011). They have cut fossil fuel use and both water and landfill use by 80% (McDonough, 2007). Ray Anderson also highlights the remarkable increase in the company’s stature due to this genuine approach to making a business more sustainable (Visser, 2011).
In 1977 Coca Cola had to leave India after locals complained about the amount of water the used (Douglas, 2005). It then returned an in 2004 was again forced to leave after it plant was shut down in Kerala due to the rate of depletion that had taken place. The effects were not just environmental but also social as women were force to walk even further to fetch water (Visser, 2011). With the world facing global increasing global water shortages, Coca Cola has now pledged to be water neutral.
Within the apparel sector, some of the standout performers are Patagonia, Timberland, Puma and Levis. Patagonia has recognised the polluting elements of their products and is reacting accordingly (McSpirit, 1998). One per cent of its sales goes towards the protection and restoration of the natural environment, more importantly and this is where they leap ahead of their competition is with the Common Threads Initiative. Patagonia are swimming against the tide of disposable clothing and are actively encouraging their customers to buy better products and promoting the reuse, repair and recycle of said products. Customers are encouraged to send products back to Patagonia, where they are repaired for free and returned (Patagonia, 2011). The fact that outdoor companies are making forays into sustainability is no surprise. Not only is their livelihood dependent on maintaining a pristine ecosystem, their clientele and staff generally have a great affinity for the great outdoors seeking to preserve that which serves them so well in life.
As the literature reviews demonstrates, additional questions are being asked about the role of the firm beyond that of making money. Businesses have such a wide reaching impact on the lives of people and the quality of the earth on which we rely that the role needs to be redefined for our times, while increased global interconnectivity demands that businesses function in a transparent manner. When that is combined with the knowledge we have about anthropogenic climate change, it seems rather foolhardy that companies would still want to operate on a “business-as-usual” basis, when there are many new opportunities for businesses to create “thick value” as will be described in the next chapter (Haque, 2011).