Institute For The Future

Green business and the future of sustainability

I've recently been doing some work on the future of sustainability. The project is part intellectual history (how are people and organizations going to define and think about sustainability in the future?) and sociology of practice (how will these ideas be put into practice?). it's a classic example of how being a futurist is (or can be) exactly the same as being an historian of science: you're asking all the same kinds of questions, and using the same approaches just along a different time axis.

So I was interested to see that the New York Times has a special section on green business. It's got a number of interesting articles-- Denmark's mixed experience with wind power is eye-opening, for example-- but for me, the pieces were illuminating as data-points on two big trends.

Consumer choice. One is the growing ability of consumers to better measure the environmental impacts of everyday choices, and a growing variety of tools to reduce those impacts. Both are equally important.

To simplify a bit, in the past, information was more high-level, and choices were binary. You could know in general terms whether certain kinds of products were likely to be environmentally sound, and you could either buy them or not; but that was about it. Companies and products could pitch themselves as organic or environmentally-friendly, but the claims were sometimes more accessible than the proof.

Now, however, consumers are slowly getting access to more information about the energy required to produce or transport goods, and the environmental impacts of goods and services. As an article on labeling notes,

 

Just as food products are labeled with calorie and nutritional information, consumer products are beginning to bear details about their environmental impact, like the amount of greenhouse gases produced in making, transporting and selling them.

 

The evolution of the concepts of "food miles" and "carbon footprint" don't just represent a growing general awareness of environmental impacts of agriculture, industry, and modern life in general; they also reflect an attempt to make sense of information that wasn't easily available in the past.

(Incidentally, providing this information to consumers can also be a revealing exercise for companies. When it decided to create a label showing "the energy used in making the shoes, the portion that is renewable, and the factory's labor record," shoemaker Timberland "was surprised to find that more than half of the energy used (and greenhouse gases generated) in making a pair of shoes comes from processing and producing the raw materials. The next-biggest energy drain is the retail environment (think of all those brightly lighted malls), followed by factory operations and, finally, transportation — almost a complete inversion of what Timberland had assumed.")

Where the choice used to be buy or don't buy, other options are emerging. Utilities are starting to offer access to green power, subsidies for installing solar panels, or rebates for conserving energy. Expedia offers travlers the chance to buy carbon offsets with their airline tickets (and doubtless some airline will soon claim to be greener than competitors, thanks to their modern fleet of planes, in-flight trash reduction efforts, etc.). Terrapass offers drivers the option of zeroing out their car's emissions.

The critical thing here is the proliferation of both knowledge about the environmental impacts of goods and services, and the growth of choices in how to deal with those impacts. And all the indicators are that consumers will have more of both in the future.

Competitive advantage. Vermont hopes that its natural beauty and environmental ethic will attract green businesses to the state. Of course, states have long offered businesses incentives to attract factories, call centers, or corporate headquarters; the Times notes that

What makes Vermont’s pitch unusual is that officials view the state itself as a lure for moving a company here or enlarging an existing one. Officials are trying to use the clean air, open space and connection to the earth, which brought early environmentalists here in the 1970s, to attract businesses.

This kind of pitch is likely to become more common in the future, and even move from the level of markets and quality of life to something more basic: you should relocate your business here because we've got great quality of life and environmentally-conscious consumers now, and government simulations show we're going to have stable water supplies in 20 years even as mean temperatures increase and snow packs get smaller.