Risky Business

Green Business Still Needs To Be About Business

By Matthew Bandyk

Posted: January 27, 2009

Via Kelly Spors, I read this essay at GreenBiz.com by Joel Makower, author of one seminal book for the current "green" movement, The Green Consumer. His argument, as I understand it, is that the "going green" business practice needs to be more than just putting out environmentally-friendly products and making those products in green-conscious ways. It also needs to take on the problem of what Makower sees as excessive consumption: people buying too many things.

Encouraging your customers to buy less stuff? Seems paradoxical, but Makower gives an example of something Patagonia did recently: it cut down on 30 percent of its clothing line, deciding that, in the words of Patagonia founder Yvon Chouinard, "two styles of ski pants are all that anyone needs."

For me, this is where the whole "going green" mantra goes off-course. It's one thing for businesses to offer products that cater to consumers' desire to be kinder to the environment.  That is simply what good entrepreneurs do: they see something that people want, and they provide it for a price. And running your business in an energy-efficient way is, again, just a smart business practice.

But it's quite another thing for businesses to take it upon themselves to diminish the "problem" of a materialist society.

First, this has problems as a business practice. This is pretty much the exact opposite of "the customer is always right." The customer wants ten different styles ski pants? Sorry, buddy--Yvon Chouinard knows exactly how many you need. But, of course, there's nothing stopping the customer from going to the next guy who will indulge the desire for excessive ski pants.

Now there's certainly a case to be made that doing what Patagonia did, for example, could be good for the company in the long run. It could build their brand and make them be a more credible, trustworthy company to the consumer. That's very possible. But it also seems clear that consumers are always going to want tons of choices. That's how we got so much stuff out there in the first place: people were willing to pay for it. If one company starts paring back the choices it offers, that might work for that company, but there's going to be many more businesses out there willing to offer as many kinds of ski pants as our hearts desire.

So I don't deny that a "buy less" message could work as a marketing strategy--I just doubt it will work for most companies most of the time. And that brings me to my second point--even if it makes a little sense as a business practice, it really does not make sense as an environmental practice.

Is materialism yielding too much pollution? Maybe so, but that's a question for policymakers, not businesspeople. It's not realistic to expect a substantial number of businesspeople to voluntarily sell less stuff to their customers. People have many different motivations for going into business, but making money will always be the most important. That's nothing to criticize--the profit incentive has produced a lot of great things. But when that profit incentive creates problems, turn to the law to deal with those problems, and let businesses be businesses.

S&P 100 Sustainability Reports

The vast majority of the S&P 100 now report on their sustainability efforts. For more details, check out this analysis by the Sustainable Investment Research Analyst Network (SIRAN): http://www.siran.org/pdfs/SIRANPR20080717.pdf It seems obvious to me that businesses are willing to “take it upon themselves to diminish the ‘problem’.” As Mike said, the traditional business model is changing –it has to. Successful businesses understand this, and they’re adopting best practices that reflect this new awareness.

Tim Albinson of CA @ Jan 30, 2009 17:11:38 PM

Green business; less marketing

"The customer wants ten different styles ski pants?" Well, not really - not before they've been exposed to a lot of sophisticated and expensive marketing about those ski pants. If Yvon Chouinard has decided to get out of the business of creating desire where need doesn't even exist, good for him.

Max of MA @ Jan 29, 2009 20:31:01 PM

Green Business = More With Less

I'd like to echo and adjust Mike's statements about Green Business. I don't think Green Business is about selling less as much as it is about doing more with less. Over the decades, the U.S. economy has shown that it can do more with less when the incentives are in place. Cars, for example, use 1/2 the steel they did in the 50's and 60's, yet they protect us in collisions better than they did back then.

So, you don't have to give up the profit motive when you run a green business, but you do have to make some sacrifices and, hopefully, you operate in an economy where there are incentives to do so.

Don of MD @ Jan 28, 2009 15:34:53 PM

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Risky Business

Risky Business

Matt Bandyk, a reporter for U.S. News, explores capitalism from where it all begins, with the entrepreneur, whose risk taking and experimentation provide the roots from which the rest of the economy grows. As much courage as it takes to create one's own business, even the entrepreneur needs some help, and this blog will look at news, trends, and practical advice for starting and running a small business.

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