Yesterday, I wrote about some of the new indicators coming out of the Rio +20 conference, including a corporate initiative to value natural capital. On first glance, I have to admit that I couldn’t get past the idea that it was an exercise in advanced greenwashing. Looking closer at the corporate initiative report, it seems I was partly correct, and more encouraging, partly very wrong. There are certainly some vague, non-impactful promises, but there are also some examples of what seem to be a serious commitment to changing business practices.
The report is a collaboration between the Corporate Eco-Forum (CEF) and The Nature Conservancy. The Corporate Eco-Forum is an invitation-only membership group for companies serious about incorporating sustainability into their business model. Its members currently represent 18 industries and have a combined revenue of over $3 trillion. Their membership list includes some companies with particularly bad sustainability reputations (I’m looking at you, Duke Energy), so there is a real concern over greenwashing.
What CEF and The Nature Conservancy released yesterday was the sustainability commitments from 24 of the companies. The report starts out with quotes from leaders, the business case for adopting more sustainable practices, a framework for action (including putting a price on nature), and then profiles each of the commitments. The first thing I noticed was that each company has a specific pledge. General Motors, for instance, pledges to, “Achieve landfill-free status at 100 manufacturing sites and 25 nonmanfacturing sites, thereby conserving natural resources,” by 2020. The pledge offers a set number of targets and a timeline. The more specific a pledge, the more a company can be held accountable to their promises.
Other standouts include Patagonia, TD Bank, and Kimberly-Clark, which pledges to transition 50 percent of wood fiber to alternative sources by 2025. Some companies pledged to change their own corporate practices and others pledged to fund sustainability projects. Enterprise car rental pledged to fund planting 50 million trees, for example. Arguably, switching their entire fleet to hybrids would be a more impactful decision, but we have to start somewhere.
The most blatant example of greenwashing was Duke Energy, who touted that they would restore the American chestnut tree to Central Appalachian forests, but only pledged to conduct field tests to assess the viability of reintroducing the species to surface-mine lands. Given the environmental destruction Duke has brought to the Appalachian region, they could do substantially more than just study whether it can be reintroduced.
The most interesting pledge, and the one that I read with the most skeptical, was from Dow Chemical. This is the same company that manufactured napalm, after all. Dow, also in collaboration with TNC, is attempting to price out the economics of ecosystems by putting a value on the environmental resources they use. Dow is analyzing the ecosystem services provided to their Freeport, TX site, which manufactures 44 percent of Dow products sold in the U.S. They recently added another site in Santa Vitoria, Brazil.
Experts from both organizations conducted business and conservation relevant analyses related to three ecosystems: fresh water, air quality, and coastal natural hazard mitigation. Putting a price on ecosystem services starts to make their worth show up in balance sheets and conserving them or using them in a more sustainable way starts to have an impact on a company’s bottom line. Depleting them becomes a production cost to avoid, as opposed to now where they are not valued, at all.
So far, only one progress report has been released and it will be interesting to see how it develops, particularly if they release their methodology so other companies can begin to evaluate the economics of their ecosystem use. Ultimately, corporate self-regulation won’t bring about the level of change we need, but incorporating strong sustainability practices in corporate culture is not a bad first step.