Archive for the ‘Sustainability’ Category
Ambition, not patience, the operative word at Nau
I only knew my hometown sustainable clothier Nau by what I read and saw in the media. Sadly, they closed their doors so fast I didn’t have a chance to buy any of their clothes. I suspect they would have been right up my alley.
Even though I didn’t really know Nau, something about them seems very familiar: venture capital. Or more precisely, reliance on venture capital. I spent more than 20 years in high tech. Venture capital is the lifeblood of most tech startups.
Venture capital, however, is not patient capital. Most VCs are seeking to make their money back plus a handsome profit within three to five years, usually by selling to a larger company or going public. Nau had reportedly raised $34 million since its founding in 2005. Its inability to close another round of financing led the company to shut down last week.
Nau was in many ways the perfect candidate for venture capital. They had name-brand management, an incredible commitment to innovation and ambition as outsized as any venture capitalist. The media took notice. Fast Company reported in June 2007, “The business plan projects $11 million in revenue this year (2007), growing to $260 million and 150 stores by 2010.” Nau CEO Chris Van Dyke told the magazine:
“We’re challenging the nature of capitalism. We started with a clean whiteboard. We believed every single operational element in our business was an opportunity to turn traditional business notions inside out, integrating environmental, social, and economic factors. Nau represents a new form of activism: business activism.”
In the end, none of that was enough as Nau could not survive in the suddenly tight-fisted capital market. Its plan to grow to $260 million in revenue by 2010 clearly required a constant stream of capital.
Having seen this story line play out over and over in high tech (especially in the dotcom era), I’m hardly surprised by Nau’s fate. I only wish the universe would have rewarded Nau for its commitment to doing the right thing for Earth and its inhabitants.
Some day soon, I hope to be reading case studies of what the Nau founders could have been done differently. Maybe these study authors will answer the question uppermost in my mind: Should Nau have hitched its wagon to the race horse team of VCs or reined in its ambition to change the world overnight and settled into a trotting pace that could be sustained indefinitely?
Even more than financial capital, patience is in short supply in business. I understand the world needs big, audacious ideas like Nau’s to meet the urgent social and environmental needs of our time. But it seems to me there’s a lot to be said for thinking big — and starting small.
Tags: ambition, Nau, starting small, Sustainability, VC, venture capital
Posted in Business & Economics, Oregon, Sustainability | 1 Comment »
Painful choices along the path of sustainability
Imagine for a moment you’re an executive for a fertilizer company. And let’s say you have a genuine commitment to the triple bottom line: people, planet, profit. Worldwide demand for fertilizer is off the charts, so that’s good for your company’s finances (profits). You sell a terrific product that dramatically increases crop yields, making a meaningful contribution to the world’s food supply (people) and to increased biofuel production (planet).
End of story, right? Well, not exactly. A New York Times article on the worldwide fertilizer shortage gets at some of the potentially agonizing tradeoffs in following a commitment to sustainability.
First, the good (taken from the article):
“Putting fertilizer on the ground on a one-acre plot can, in typical cases, raise an extra ton of output,” said Jeffrey D. Sachs, the Columbia University economist who has focused on eradicating poverty. “That’s the difference between life and death.”
And now the bad:
Environmental groups fear increased use, particularly of nitrogen fertilizer made using fossil fuels. Because plants do not absorb all the nitrogen, much of it leaches into streams and groundwater. That runoff has long been recognized as a major pollution problem, and it is growing. A barometer of the pollution is the rising number of dead zones where rivers meet the sea. In the Gulf of Mexico, for instance, nitrogen runoff from fields in the Corn Belt washes downstream and feeds plant life in the gulf. The algae blooms suck oxygen from the water, killing other marine life. More than 400 dead zones have been identified, from the coasts of China to the Chesapeake Bay, and the primary reason is agricultural runoff, said Robert J. Diaz, a professor at the Virginia Institute of Marine Science.
You’re the fertilizer executive. With one hand you’re helping to eradicate poverty, plus you’re creating good jobs in your company because your product is in such high demand. With the other, you’re helping to destroy marine life and adding to greenhouse gas emissions because of the fossil fuels required to make a usable form of nitrogen.
My in-laws and their ancestors have been farming in Oregon since the 1850s. I remember my mother-in-law saying awhile back that it wasn’t until chemical fertilizers came along in the 1950s and 60s that they were able to move out of pure survival mode. For them, it meant the difference between a family farm that remains in operation today and one that would have long ago been plowed under.
I believer her, and I still wish the runoff from agriculture wouldn’t find its way into the murky Willamette River running through my hometown of Portland.
I understand why the financial bottom line rules in business. Who really wants to confront the choice of feeding the poor or destroying ecosystems?
Tags: fertilizer shortage, New York Times, Sustainability, triple bottom line
Posted in Business & Economics, Sustainability | No Comments »
Another attack on Wal-Mart’s green claims
Earlier this month, I asked the question, “Is a green Wal-Mart good enough?” Author and big-box retail critic Stacy Mitchell certainly doesn’t think so. In a post for Beacon Broadside last Friday, Mitchell says, “The best case scenario for Wal-Mart’s sustainability initiative is to make a highly polluting operation somewhat less so.”
She dismisses most greenwashing efforts as “clumsy and transparent,” but acknowledges that Wal-Mart is different. The company, she says, “has developed a far more sophisticated, and ultimately much more dangerous, approach to manipulating environmental sentiment for its own expansion and profit.”
Thanks to Jessica at Beacon Broadside for the heads up.
Tags: Stacy Mitchell, Sustainability, Wal-Mart
Posted in Business & Economics, Marketing, Sustainability | No Comments »
Greenwashing companies aren’t the only villains
Nothing like Earth Day to focus attention on greenwashing.
The Center for Media and Democracy, no fan of the PR industry, is a good example. Its authors define greenwashing as “the unjustified appropriation of environmental virtue by a company, an industry, a government, a politician or even a non-government organization to create a pro-environmental image, sell a product or a policy, or to try and rehabilitate their standing with the public and decision makers after being embroiled in controversy.” A bit wordy, but sounds about right.
An East Coast PR executive cites a study by TerraChoice, an environmental marketing firm, that found 99 percent of the 1,753 claims of green consumer products they recently reviewed were “guilty of greenwashing.”
As prevalent and disturbing as greenwashing is, many in the media and environmental groups may be too focused on the actions of those who want us to believe they are doing some good for the Earth, when they’re really not. I’m equally disturbed by the vast numbers of businesses that make no effort or claim to be green. Some of those guilty of greenwashing are at least trying to improve their practices. Wal-Mart, for example.
I can’t cite statistics, but I would wager that most businesses have still done little or nothing to become more Earth friendly. Instead of spending inordinate time fact-checking green claims, we should be urging, cajoling or, if necessary, shaming offending businesses into cleaning up their acts. Not to defend greenwashing, but companies that make green claims open themselves up to public scrutiny. That’s more than can be said for the green-avoiding majority who are happy no one’s asking them the hard questions.
Tags: Earth Day, green claims, greenwashing
Posted in Business & Economics, Climate Change, Communications, Marketing, Sustainability | No Comments »
Bottled water: When it’s time to say no to branding
Several years ago I attended a conference on branding. One of the keynote presenters began his talk by holding up a bottle of water. If marketers can successfully brand water, they can brand most anything, he quipped. His comments were meant to get the creative juices flowing among his audience. Hell yes, we can brand anything! And indeed, we do.
I thought of that marketer’s attempt at inspiration yesterday when I was listening to a talk by Maude Barlow, author of “Blue Covenant: The Global Water Crisis and the Coming Battle for the Right to Water.” Barlow, a Canadian, is known internationally for her tireless advocacy for every human’s right to water. When asked what people could do to help solve a water crisis that is worsening by the day, her first response was, stop buying bottled water. (She also encouraged her audience to check out Food & Water Watch, where you can find many of the issues and facts Barlow cites to make her arguments.)
Like I suspect most everyone else who hears Barlow speak, I left yesterday with a vastly heightened concern for the world’s clean water sources. The water crisis is no less urgent than climate change. “The issue of water is an issue of life and death,” Barlow said. “Without water, you die.” And without clean water, you die. The number one killer of children worldwide is dirty water. “In every single case, it was preventable,” Barlow said.
If the marketing superstar I heard a few years back were back on the podium today I would hope he’d hold up the bottle of water and deliver a cautionary tale. We have the know-how to take nothing more than packaged tap water and persuade others it really is different and better than — your tap water and the tap water of every other bottler. In fact, the average American consumed 29 gallons of bottled water in 2007.
With the ability of marketers to brand anything also comes great responsibility. It may give marketers a great sense of accomplishment when their creativity helps produce a multi-million dollar brand from something as basic as tap water. But they must also own up to their role in exacerbating the global water crisis (and adding to pollution from non-recycled plastic bottles).
Marketers committed to sustainability need to constantly ask: For whom and for what are we going to use our skills today? Just because we can brand anything doesn’t mean we should.
Tags: bottled water, brand, Branding, Marketing, Maude Barlow, Sustainability, The Natural Step Network, water crisis
Posted in Food and Drink, Marketing, Sustainability | No Comments »
Shopping ’til we drop on Earth Day
Earth Day is nearly here. Just in time for retailers and producers to stoke the consumption of all things green and revive their flagging fortunes in today’s tough sales environment. Advertising Age (reg. required) asks, “Is Earth Day the New Christmas?”:
As April 22 approaches, marketers of all stripes are bombarding consumers with green promotions and products designed to get them to buy more products — some eco-friendly, some not so much. And while that message seems to contrast with the event’s intent, the oxymoron seems to have been lost on marketers jumping on the Earth Day bandwagon in record numbers. This year it seems that just about everyone has found a way to attach themselves to what is fast becoming a marketing holiday that barely resembles the grass-roots event founded in 1970.
Leave it to American commerce to dress up consumerism on a day that is meant to remind us of the harmful effects of excessive and inequitable consumption. If business and industry wanted to make a sustainability statement, they would close up shop on Earth Day and challenge us to buy less and give more. Oh wait, isn’t that what Christmas is supposed to be about?
Tags: Advertising Age, Christmas, Consumerism, Earth Day
Posted in Business & Economics, Consumerism, Marketing, Sustainability | No Comments »