Corporation or Consumer: Who’s Driving Us toward Sustainability?

As a consumer, it’s nice to think that you’re in the driver’s seat. Each dollar you spend goes to this retailer, then to that supplier and on to such-and-such manufacturer, quite often ending up at so-and-so corporation and/or global conglomerate. Where and on what you spend that dollar determines which companies earn profit and influences how other companies make products as they try to compete on the open market. That is the win-win scenario often outlined by “free market” proponents, is it not?

Of course, there are other variables, such as the limited knowledge consumers have of any given product beyond store shelves. How many of us really know (or want to know) where that t-shirt, canned corn or package of steak came from? That has led to some of the so-called “greenwashing” problems the natural foods industry has experienced, leaving catchphrases like “all-natural” essentially meaningless. It is also why we have USDA Organic and other eco-labeling organizations that vet products and companies claiming to be “green.”

Consumer push for “Organic”

So, is it consumers or the democratic government (and NGOs helping them) that are driving us toward a more sustainable marketplace? Statistics from the Organic Trade Association seem to point at consumers, with U.S. sales of organic food and beverages growing from $1 billion in 1990 to $24.8 billion in 2009 (add another couple billion for non-food organic products). Surely, this would point to an increasingly aware, sustainability-focused populace.

Or does it? According to National Geographic‘s Greendex, a survey tracking global consumer choice in regard to environment, U.S. consumers continually rank last among the 17 countries surveyed. And given that Canada ranks second to last, that makes North American a fairly dismal market for the environment.

Indeed, author Joel Makower, who wrote about “The Green Consumer” way back in 1990, argues today that very little has changed in the past 20 years; there are no more green consumers today than there were when he wrote the book. Yet even Makower admits that progress is undeniable. But if not consumers, who do we thank?

Perhaps green business is driving.

There is certainly plenty of evidence that businesses are all about sustainability in today’s market. Just try to find a major corporation without a corporate sustainability statement and/or specific sustainable goal. Just look at Alcoa’s reduction of CO2 emissions by 44 percent from 1990 levels, or Colgate’s long-term sustainability plan, or the recently upgraded UPS goal of increasing fuel economy for its entire delivery fleet at least 20 percent by 2020.

Now, however, far and loud these companies shout their mission to make the world a better place for all residents, plants and animals alike, but it’s highly unlikely that any of them are pushing sustainability solely out of the kindness of their hearts. The fact of the matter is that energy efficiency, renewable energy generation, regional materials sourcing, fleet efficiency and more save money as well as Earth, not to mention reduce liability and improve quality.

That, as it stands, may be the most solid point in arguing that business is driving society down the road to sustainability. Although things are rarely that simple, and just as it is unlikely that corporations are going green for the sake of being green, it is equally unlikely that any one cause is wholly responsible for, or even the majority factor in, the green zeitgeist.

While environmentalists may be frustrated as ever with inaction on climate change in the U.S. Congress, there’s little denying that regulation has had some effect on industrial environmental impact, especially among the most energy-intensive industries. Indeed, going green does not signify more greenbacks for all corporations. The fossil fuel industries have long fought hard against legislation that would bring about true change in the regulatory landscape. For these companies, it is still cheaper to pollute, and it is impossible for them to deliver their product (upon which nearly every consumer and business relies) without polluting. Nevertheless, even in the coal industry there is attention paid to environmental issues. Such companies may fight hard against profit-cutting, environment-saving regulation, but it’s a safe bet that all them expect a carbon tax or some other more aggressive policy at some point.

It takes a village.

In the end, consumer and corporation are far from the only drivers. A recent TriplePundit article by Dave Pederson, Supply Chain Director for Resources Global Professionals, expounds on nine individual drivers of corporate sustainability. To corporation and consumer he adds investors, NGOs (also briefly mentioned), business customers, resources shortages (i.e. fossil fuels and water), returns on investment, employee recruitment and retention, and the power of brand equity…good luck, BP).

All of these, says Pederson, are working together to push sustainability onward and upward for public corporations, even with a lack of meaningful government incentives (in the void left by lagging federal regulation, Pederson points to states like California that are picking up the slack).

Still, given the free market(ish) system that we in North America rely on, much of the weight rests upon the consumer and the corporation. Both have the power to facilitate real change. 20 years ago, Joel Makower lobbied for a new age of green consumerism, even stating that real difference could be made if just 10 percent of the population became savvy eco-shoppers. As of now, he not too subtly laments, little has changed. Although he still holds out for a sustainable world with consumers in the driver’s seat.

For now, however, businesses are at least closest to the driver’s seat (sometimes I wonder if anyone is driving at all). Whether it’s due to increased profit margins, brand equity, eco-savvy investors, tax incentives, or pressure from NGOs, businesses are getting greener and greener. And consumers support that in bunches.

It’s a long road ahead and it’s unlikely that any one driver can take us the whole way, but at least it’s no longer a question of whether we’re moving. Now it’s a matter of whether we’ll get there in time.

Photo Credit: Noize Photography & Richard Smith

Posted on August 5th in Going Solar by Dan.