Doing well by doing good: social and environmental responsibility can be profitable
by Vicki Wolf, October 2005

What do a food retailer, a sports clothing company and a carpet manufacturer have in common? They are all very successful companies demonstrating that caring for people and the planet is good business.

Whole Foods’ motto is “Whole Foods, Whole People, Whole Planet.” A leading food retailer, Whole Foods supports sustainable agriculture by selling organically and biodynamically grown foods to help reduce pesticide use and promote soil conservation. The company also participates in training farmers all over the world how to farm more sustainably by supporting the Earth University in Costa Rica.

To reduce waste and consumption of non-renewable resources, Whole Foods participates in recycling programs, and water and energy conservation. The company promotes re-usable packaging and reduced packaging. Whole Foods also encourages environmentally sound cleaning and store maintenance programs.

The company gives back to the community by donating 5 percent of after-tax profits to not-for-profit organizations, and it has a program that financially supports team members for doing voluntary community service.

As an example of another company, Patagonia, a successful sports clothing company includes the following statement in its definition of quality: “. . . we believe in using business to inspire solutions to the environmental crisis.”

The company’s latest marketing campaign is asking customers to send in their tattered underwear for recycling. Patagonia also prints its catalogues on 100 percent recycled paper; makes clothes with 100 percent organic cotton instead of cotton grown using pesticides; and makes fleece from recycled soda bottles.

Patagonia uses recycled and reclaimed materials in building new stores, some of the company’s stores are wind-or solar- powered.

As a member of “1% for the Planet,” an affiliation of companies that give 1 percent of their profits to environmental organizations, Patagonia gave $22 million last year to grass roots efforts to heal and care for the planet. The company also offers an environmental internship program that allows employees to take two months off to participate in environmental projects.

In the last decade, Interface, Inc., the world's largest commercial carpet manufacturer, has been showing the world that solutions to reduce waste can be profitable, creative and practical.

Dan Hendrix, president and CEO says, "We at Interface believe that by striving for sustainability we are discovering better ways to make a bigger profit."

The company’s vision is “to be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions: people, process, product, place and profits – by 2020 – and in doing so we will become restorative through the power of influence.” To become a sustainable enterprise, the company has seven goals:

1. Eliminate waste: eliminating all forms of waste in every area of business
2. Benign emissions: eliminating toxic substances from products, vehicles and facilities
3. Renewable energy: operating facilities with renewable energy sources, including solar, wind, landfill gas, biomass and low impact hydroelectric
4. Closing the loop: redesigning processes and products to close the technical loop using recovered and bio-based materials
5. Resource-efficient transportation: transporting people and products efficiently to reduce waste and emissions
6. Sensitizing stakeholders: creating a culture that integrates sustainability principles and improves people’s lives and livelihoods
7. Redesign commerce: creating a new business model that demonstrates and supports the value of sustainability-based commerce

Interface has a carpet reclamation program that has diverted more than 3,000,000 yards of carpet from landfills since 1994. Interface also makes a carpet backing from a minimum of 40 percent recycled material. Researchers are working to develop new carpet backing materials that recycle back into original material.

The company’s unique carpet design reduces manufacturing and fitting waste enough to save 9 percent of the materials and half the installation by using irregular shapes and surfaces, like leaves on a forest floor, to make the edges of carpet tiles invisible. At the other end of the responsibility spectrum, many corporations have paid the price for being careless about the way they treat the environment and the way they treat people.

The International Center for Corporate Responsibility (ICCR), an association of 275 faith-based institutional investors, is a leader of the corporate social responsibility movement. Leslie Lowe, director of ICCR’s Energy & Environment Program, says the organization calls corporate pollution an off-balance-sheet environmental risk. Shareholders may be buying a liability rather than an asset when a company’s activities lead to law suits and reputation problems.

For example, the use of asbestos caused health problems that resulted in $200 billion in liability suits world wide. Half of the companies responsible for asbestos-related illness and deaths were American companies. Many of them have gone bankrupt, according to Lowe.

Monsanto paid a $700 million settlement for PCB pollution in Alabama.

There are 1,500 superfund sites now listed as top priority by the Environmental Protection Agency (EPA) for clean-up of toxic waste. Lowe says there are really twice as many sites that need clean-up. She says if the EPA can discover the companies responsible for the waste, they may be held liable. The average cost for cleaning up a superfund site is $25 million.

In addition to being a watchdog over corporate activities in the United States, ICCR also works to increase awareness about environmental and social problems in developing countries, where some of the worst environmental and human damage is being perpetrated by American companies.

When an oil company digs a well, a toxic sludge of water, mud and heavy metals is expelled along with the gas and oil. Dumping this kind of sludge is illegal in the United States. But in Ecuador, located in the northern Amazon region, the environmental laws at the time didn’t address this issue. Here, Texaco (later acquired by Chevron) dumped the toxic sludge into the forest and rivers, leaving the indigenous people without access to clean water.

Chevron, Shell and other oil companies operate in Nigeria, in the Niger Delta, where environmental laws and enforcement are “a farce,” according to Lowe. “Royalties paid to the government end up in foreign bank accounts, never to be seen by the people,” says Lowe. “Meanwhile, the soil is killed because water used to irrigate crops is polluted, and fishing is ruined as well.. Children have birth defects and many people have cancer. The companies blame these problems on poverty to hide their bad conduct,” she adds.

In India, a campaign to boycott Coca-Cola products was conducted last spring in response to environmental problems created by the company’s operations in the state of Kerala, which included depleting ground water needed for drinking and farming. “If companies are doing bad things, such as exploiting workers or polluting the environment, consumers can choose someone else,” says Lowe. “You can’t dump poison on one side of the globe without people knowing about it on the other side within seconds.”

Ultimately, consumers and shareholders have the power to persuade the U.S. government and companies to be socially and environmentally responsible. Corporations have much political power, and they are influenced by the way consumers spend money.

You can make a world of difference by becoming aware of which companies are socially and environmentally responsible and choosing to use their products and services.