The Corporation As Sustainable Enterprise

April 4, 2004

By Michael Jessen

You’ve seen the film The Corporation or you’ve read the book, perhaps both. You’re mad as hell at capitalists and the ruin they’ve rained on the planet and its people.

The record of serious ethical breaches by many leading corporations has led a sceptical public to question the value our dominant institution. From industrial pollution to exploitation of workers, the sins of the corporation are being exposed and chronicled daily.

Big business determines everything from what we eat to our political process. Corporations control the world. Of the 100 largest economies in the world, 53 are transnational corporations. Wal-Mart is bigger than 163 countries.

Are all corporations amoral, self-interested, callous and deceitful? Must they behave like a classic psychopath?

Corporate sustainability was a major theme at the recently concluded Globe 2004 (http://www.globe2004.com) conference in Vancouver. Corporate “good guys” Ray Anderson, chairman of Interface Inc. (http://www.interfaceinc.com) and Jeffrey Hollender, president and CEO of Seventh Generation (http://www.seventhgeneration.com) confirmed that it is possible to maintain a profitable business operation in the face of new social, shareholder, consumer, and government demands for sustainability and corporate accountability.

Both Anderson and Hollender are committed to setting examples of corporate behaviour that other companies are finding hard to ignore.

Anderson was staggered to learn in 1995 of the volume of raw materials needed to produce his company’s carpets, textiles, chemicals, and architectural flooring. Upon examining his company’s entire supply chain, he found that Interface’s factories and its suppliers’ extracted from the Earth and processed 1.224 billion pounds of material to produce $802 million worth of products.

As Anderson writes in his book Mid-Course Correction – Toward Sustainable Enterprise: The Interface Model (Chelsea Green Publishing, 1998), the revelation “made me want to throw up.”

He realized his company’s use of irreplaceable, non-renewable, exhaustible, and precious natural resources could not go on indefinitely.

“My company’s technologies and those of every other company I know of anywhere, in their present forms, are plundering the earth,” Anderson writes. “This cannot go on and on and on.”

Anderson has reduced waste and improved resource efficiency at Interface while reaching new profit levels, proving that a corporation can be sustainable and profitable. Interface has reduced production costs by one-third in the past 8 years, saving the company $222 million.

The company has gone from a petroleum and carbon-based manufacturing entity to one using more sustainable alternatives like recycled plastic and renewable plant materials. Interface became “energy neutral” when it started substituting methane gas from a capped European landfill for natural gas. To learn more about Interface’s modular flooring products, visit http://www.interfaceFLOR.com.

“I have challenged the people of Interface to make our company the first industrial company in the whole world to attain environmental sustainability, and then to become restorative,” writes Anderson. “To me, to be restorative means to put back more than we take, and to do good to Earth, not just no harm.”

Interface pioneered a new business paradigm for success: “Doing well by doing good.”

For Anderson, the business case for sustainability was rooted in his values. “To be clear, we want to do good because it’s the right thing to do,” he says. “We have to get our hearts right.”

A pioneer in the world of environmentally proactive business for more than 15 years, Hollender has stated his company grew from an “attempt to unite my personal values with my business goals.” Seventh Generation is the leading producer of environmentally responsible home cleaning products.

Hollender believes his company must think about the impacts of its products to society over the generations on a global scale.

The label on every Seventh Generation product has the following quote from the Great Law of the Iroquois Confederacy: “In our every deliberation, we must consider the impact of our decisions on the next seven generations.”

The Vermont-based company makes a natural dish washing liquid that uses only ingredients that do not pose any chronic health risks and are safe for the environment. “If every household in the U.S. replaced just one bottle of 28 oz. petroleum based dishwashing liquid with our 28 oz. vegetable based product, we could save 118,700 barrels of oil, enough to heat and cool 6,800 U.S. homes for a year!” says the label.

Hollender is the co-author with Stephen Fenichell of the book What Matters Most: How a Small Group of Pioneers is Teaching Social Responsibility to Big Business, and Why Big Business is Listening (Basic Books, 2003).

His involvement in a number of enterprises convinced Hollender that business is the most powerful force on the planet.

“But I questioned how could it be a better force?” he says. “So, I wanted to write about how we could be a better influence. I also wanted to unmask the businesses that appear to look good, but aren’t. But as I did my research and interviews, I discovered many companies who are doing good and are attempting to significantly change their corporate cultures and long-term goals.”

Seventh Generation’s own Corporate Social Responsibility Business Practices (2003) are an excellent model of ethical standards, accountability, employment practices, business relationships, and community involvement. It is available at http://www.seventhgeneration.com/data/1437_1.pdf.

Paul Dolan is another entrepreneur who is out to change the world. Dolan is the president of Brown-Forman (http://www.brown-forman.com/), one of the largest American-owned companies in the wine and spirits business. Dolan spent 15 years with Fetzer Vineyards (http://www.fetzer.com), transforming it into a genuinely sustainable company.

Through the 1990s, Fetzer earnings grew an average of 15% a year as sales doubled. At the same time, Fetzer reduced the amount of waste hauled to the landfill by 97%. In 2002 production facilities sent less than 40 cubic yards to the landfill, compared to the starting volume of 1,700 cubic yards. Fetzer now farms its grapes entirely organically, and is helping dozens of other independent growers convert to organic farming. Fetzer’s commitment is to use only organic grapes by 2010.

The company has a Sustainability Team, called E3, which manages for the triple bottom line. E3 has helped find more efficient motors, insulate better, switch from petroleum to biodiesel fuel and start an employee commuter van program. Fetzer also sponsors English-as-a-Second-Language programs for its Spanish-speaking workers and has opened its organic garden to local educators.

In 1994, Dolan challenged his team to build a new administration building that didn’t deplete natural resources in its construction and operation. The award-winning result (which cost the same as a conventional building) is a rammed earth building that doesn’t require any insulation. It has solar panels on the roof for energy and ceilings finished with staves from an old beer tank. Much of the wood was reused from existing structures, including oak floors salvaged from a condemned office building.

Dolan has chronicled how he and his staff transformed Fetzer into a sustainable company in the book True to Our Roots: Fermenting a Business Revolution (Bloomberg Press, 2003).

Dolan believes in using conversation to change the world. “If you keep sustainability in the everyday conversation, you’ll focus on it,” he recently told interviewer Marjorie Kelly. “If not, you won’t do much. That’s what we will organize around at Brown-Forman. In the production area, teams will be challenged to organize themselves so they discuss it and set goals for themselves that they can measure.

“It’s not necessary to set individual goals,” says Dolan. “We set broad-range goals like zero waste, or recycling 100% of the water back into the vineyards.”

These are just three examples of corporations that support responsible business practices. There are more, but it is currently still hard for consumers to find them. Many businesses like The Body Shop (http://www.thebodyshop.ca) and Patagonia (http://www.patagonia.com) put their social and environmental commitment up front. Other companies are still in the learning stages.

But as Jeffrey Hollender says, it is not just the CEO who is responsible. “All of us have a responsibility in what we buy and what legacy we leave in terms of ethics and responsibility,” he says. “Change won’t happen without us. Consumers, media, government, etc., put on pressure and have an impact – we are the market.

“This is a project and a process for all of us,” says Hollender. “We can make a difference.”

RESOURCES - Joel Bakan, a University of BC law professor and Rhodes Scholar, is the author of the Corporation: The Pathological Pursuit of Profit and Power (Viking Canada, 2004, 228 pages, $37.00). Bakan teamed with Mark Achbar and Jennifer Abbott to produce a film (http://thecorporation.tv/) of the book. The film has received numerous awards at film festivals. This week, Bakan’s book was the number 2 non-fiction best seller according to the Globe and Mail.

Michael Jessen is a writer and consultant on sustainability issues. He can be reached by telephone at 250-229-5632 or by e-mail at zerowaste@shaw.ca. His business, Zero Waste Solutions has an award-winning web site at http://www.zerowaste.ca.


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