“They aren’t trying to compete with the big boys. They are the big boys. And they will be the big boys of the future.”
These are Freya Williams' words in the introduction of her refreshingly optimistic book, Green Giants, which argues that financial success and values of sustainability and responsibility can indeed go hand in hand. The crux of this case-study based book is that some corporations differentiate themselves because they “view sustainability and social good not just as where businesses spend their money, but how they earn it.” These companies follow up words with actual actions through their business strategy, and still turn over a healthy profit. Their approach to sustainability is not just reactive and riddled with compensatory gestures.
Williams has identified six common factors to “generate over $100 billion in combined annual revenues from their sustainable business strategies” Namely:
An Iconoclastic Leader. Each of the Green Giants' sustainability journeys can be attributed to the passion and determination of one person, always in a position of leadership in the company and usually the CEO. Williams identifies 4 Cs of Iconoclastic Leadership – conviction, courage, commitment, and contrarianism. She points to Paul Polman of Unilever as a sterling example of this- Polman eliminated quarterly reporting on his first day on the job in order to allow for longer-term strategy and investment. When asked about how this might affect his duty to shareholders, Polman replied in an interview with Forbes Magazine: "I'm not just working for them. Slavery was abolished a long time ago. I don’t have any space for many of these people that really, in the short term, try to basically speculate and make a lot of money,”
A Disruptive Innovation. Williams says the key to Green Giants success is an innovation that disrupts a category, rather than just a more responsible or efficient model of existing products.
A Higher Purpose. Contrary to what many people may assume, Williams insists that "businesses with a purpose beyond profit tend to outperform the competition on—you guessed it—profit". She evidences this through the research conducted by Jason Denner of the consulting group POINT380, who concluded that the "annual returns of publicly traded Green Giant companies have averaged 11.7% higher than their leading competitors over the past five years."
Built In, Not Bolted On. Sustainability for these companies is not a reaction to bad press, it's not there to compensate for bad practice, it's not a separate department which organises philanthropic gestures completely unrelated to the activities of the business. For the Green Giants, sustainability is integrated into the structures of their business governance and strategy. This enables sustainability "to become a revenue driver, not a drag."
Mainstream Appeal. Rather than marketing only toward the "perfect" environmental and socially conscious consumer, these companies find their success through appealing to people who normally wouldn't take "green" values particularly seriously. There needs to be a quality and incentive other than just the "greenness" of their products for the company to be a success.
A New Behavioral Contract. Green Giants sign up to a set of values, which must be followed up by actions in order to be considered legitimate. As Williams puts it, "Corporate reputation today is built through actions, not advertising. Your behavior is your brand."
As proof of how these values can lead to success, Williams names nine “giants”: Chipotle, Unilever, Whole foods, Natura, Tesla, IKEA, GE Ecomagination, Nike Flyknit, and Toyota Prius.
Companies qualify as a giant if they A) are earning over 1 billion in revenue per year, and B) can prove their commitment to sustainability is a core part of their business strategy and approach. You can find an overview breakdown HERE of why each company qualified and what their innovations were that earned them this Giant status. I remain optimistic that many more Green Giants that will appear over the next few years as consumers are increasingly expecting corporations to have and exhibit some kind of moral compass.
But despite these carefully curated arguments as to how and why the Green Giants are succeeding, I found myself focusing on one question: Is all this sustainability activity real, or is it just compensating for otherwise damaging activity? In the introduction, Freya admits “these companies are not 100 percent perfect. Tesla and Toyota (with its prius) promote private ownership of automobiles rather than the use of public transport: GE is involved in the controversial practice of hydraulic fracturing, or “fracking”; and IKEA sells furniture that some consider disposable, for example. But sometimes perfection is the enemy of progress” She concludes: “The green giants (…) are the best thing we’ve got”
I felt this was an unsatisfactory answer to such a gaping question. "They’re the best thing we’ve got". Reading this, I asked myself: are these nine companies really the best thing we’ve got? Do they really exemplify what companies should be striving towards? Should we be rewarding these companies on their vocal sustainable philosophies in the first place? My worry is that many of these large companies are inherently doing more damage than good, and that all this effort to reconcile business with sustainability might be futile in the long run. I struggle with this question often – what’s the point in praising corporations for their socially and environmentally responsible activity, when at the end of the day it might just all be a ploy to give them the green light, or the “social license to operate”, to continue with their harmful practices on a larger scale?
The more I have thought about this question, the more I’ve come to believe (and in turn agree with Williams) that just because something isn't perfect, doesn't mean we shouldn't try at all. Locating sustainability at the core of business operations, as opposed to keeping it at arm’s length through purely philanthropic activity, can unlock immense potential for sweeping social and environmental change- as these Giants prove.
Whilst these nine examples may not serve as a perfect template for marrying sustainable philosophy with economic success, and in some cases the company’s operations might be causing more social and environmental harm than good, the intention of Williams’ book is one that I agree with: namely disproving the simple misconception that helping society and the environment is a financially burdensome activity, seen as a "nice to have" that isn't really worth it for companies. So in conclusion, I think this is a testament to consumers for demanding and rewarding businesses with social purpose, but also a testament to how powerful a mindset can be. The ripple effect of this responsible attitude towards businesses' place in society can be tremendous when amplified through the actions of billion dollar businesses. That is something commendable and something we can be excited about. Or maybe I’ve just been infected by Williams’ contagious optimism.