208-596-6500 | If the ecological value set can create profits, what then is a green company?
At the EcoSector Portal, I like to showcase and help grow companies that expand the understanding of ecology and produce outcomes coherent with this value set.
In the end, it is not my definition of ecology that matters – the ultimate right to make that assessment exists in the collective mind of society. But perhaps I can influence that thinking a bit here…
Let’s look at Wal-Mart’s recent steps forward into the ecological value set. The story was first reported in the August 2006 edition of Fortune magazine. In March 2008, Wal-Mart announced the formation of a The Cleantech Accelerator Project in partnership with the Cleantech Group to recruit business partners for Wal-Mart that can help them achieve the following objectives:
- generate zero waste
- be supplied by 100% renewable energy
- sell products that sustain resources and the environment
“Generating zero waste” in itself reflects a highly evolved ecological understanding. The idea is laid out beautifully by green architect Bill McDonough in his book “Cradle to Cradle”.
Does this make Wal-Mart a “green” company? My short answer is, “not yet”.
In the interest of full disclosure, let me say I put in a fair amount of energy (successfully) fighting Wal-Mart’s attempt to knock out a farm and build a “supercenter” in my home town. For the moment, I want to set aside all the reasons I would fight such a proposal again, and instead look at certain fundamental issues that relate broadly to the notion of green business.
I say Wal-Mart is “not yet” a green company, because their primary mission is “not yet” to protect the health of the biosphere. In Wal-Mart’s own words, their mission is “Saving people money so they can live better.” This statement doesn’t reflect what I call an “ecological value proposition”.
So, Wal-Mart is “not yet” a green company because they are not yet driven by an “ecological value proposition”. However, they clearly have become a top-tier consumer of environmentally designed goods and services, which significantly distinguishes them from other major corporations. This is a form of leadership.
For them to become a green company in my view, I would like to see their mission become “Assuring the health and vitality of people and the biosphere”. Inside of this new mission, Wal-Mart’s core task, conveying goods to consumers, would become a way of producing this new outcome. By following ecological design, their products will naturally cost far less as the huge volume of waste that considered conventional today is continuously filtered out of their supply chain. So, they don’t need to give up their old mission to add this new one.
As a green investor, I’m much more excited by the companies Wal-Mart is hiring to provide the goods and services and design the strategies they are using to achieve their sustainability goals.
For example, wearing both my investor and environmental hats, I would much rather own shares of stock in Blu Skye, the consulting firm that sold Wal-Mart on the idea of going green in the first place. Now there’s a green growth company. They are in the business of shifting people’s mindset and their method involves providing consulting services that realign corporate cultures to the ecological value set. Here’s what, to me, makes Blu Skye an exciting green business:
- As a small company, Blu Skye’s potential for fast percentage growth is much larger than Wal-Mart’s – this potential for growth is what matters to investors.
- Because they can influence company after company, Blu Skye can create vast ecological progress in society. This appeals to my sense of environmental leadership.
Unfortunately, most people can’t purchase shares in Blu Skye because the company, like most other leading firms in the Eco Sector, does not have publicly-traded stock.
Should you add Wal-Mart to your green investment portfolio? The question is worthy of consideration for green-minded investors who may not be able to invest in the privately-held green companies Wal-Mart is hiring to achieve their sustainability objectives. Here’s why…
- First, once the ecological value set penetrates peoples’ minds, it tends to influence day to day decisions in a way that unfolds and expands over time. The seed has clearly been planted at Wal-Mart, and is taking root. It is simply now a matter of time until Wal-Mart publicly acknowledges that it’s primary mission is to take care of the planet.
- Second, in pragmatic investment terms, Wal-Mart is going to make a hell of a lot of profits by following ecologically derived business strategies. For example, on March 2008, they announced a new prototype store that uses “up to 45% less energy than their baseline supercenter”.
Personally, I wish Wal-Mart would just stop building new stores – the very act of building new stores is among Wal-Mart’s most environmentally destructive activities. But compared to what is considered “normal” business in the world today, cutting energy costs by 45% is a big deal environmentally. And it also can create a lot of future profits for them. Via ecological redesign, similar savings are available across their entire range of business costs. Wal-Mart is so huge that every new step in the direction of ecological values can produce very significant growth in profits.
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Apr 08
Where is the Eco-Sector?
I recently looked over the U.S. Dept of Commerce’s “NAICS” listings while doing some research for a client. NAICS stands for “North American Industry Classification System”. It is a numbered system categorizing every aspect of the U.S. economy. Supposedly…
The list starts with 2-digit numbers for top-tier categories, such as “11 – Agriculture, Forestry, Fishing and Hunting”, and extends down to 6-digit numbers for fine distinctions, such as “111219 – Other Vegetable (except Potato) and Melon Farming”.
I started searching for the part of the economy I care about most, all things “eco”. Here are some results:
There is no index entry for “ecology”.
There is no index entry for “ecosystem”.
There is no index entry for “climate”.
Okay, how about “environment”?
Here we get a handful of listings, such as “813312 – Environment, Conservation and Wildlife Organizations”, and “541620 – Environmental Consulting Services”. If you do this search yourself, you’ll find all listings with the word “environment” are 6-digit numbers, the lowest tier of the category system.
I first did this little exercise back in 2001. Now, with updated “2007″ codes, nothing has changed. As an industry, we “ecopreneurs” are all but invisible to federal policymakers. The numeric mapping illustrates with elegant simplicity that “environment” is the lowest priority.
My thought is that if “62 – Health Care and Social Assistance” is a top-tier listing, there should be a similar top-tier listing for “Ecosystem Health Care and Assistance”. This would reflect the importance of healthy ecosystems to the health of people. It would be a great place to start defining the Eco-Sector for all those who track the economy.
Of course, our government officials like to keep things friendly, so when my above searches netted no results, there was a courteous tag line included:
If you cannot find your activity when doing this search,
email Dr. NAICS. or call 1-888-75NAICS.
I sent Dr. NAICS an email requesting a new top-tier category for the Eco-Sector…
Dear Dr. NAICS,
I would like to request that you add a top-tier category for “Ecosystem Health Care and Assistance”.
This would reflect the importance of healthy ecosystems to the health of people and begin to recognize the economically valuable activities of millions of Americans working in the Eco-Sector toward these objectives.
I recently posted a article on this subject at http://ecosector.com/blog/?p=31
Thank you for your consideration. I look forward to your thoughts.
Kindly,
Mark Winstein
Founder
www.EcoSector.com
208-596-6500