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A push for businesses to be sustainable

Marketplace Staff Jun 9, 2010

A push for businesses to be sustainable

Marketplace Staff Jun 9, 2010


Kai Ryssdal: For all it’s current problems, BP is still a major global energy company — one that has a pretty good sense of supply and demand. Every year, the company releases something called the “Statistical Review of World Energy.” It’s a snapshot of how much energy — oil, natural gas, hydroelectric and nuclear — we’re consuming. The 59th edition came out today. In the introduction CEO Tony Hayward wrote this about the oil spill: “Eventually,” he said, “this disaster will lead to a safer and better energy world.” When that might happen is anybody’s guess. But what is certain right now is that the environmental costs of doing business can be pretty high. After the Exxon Valdez spill in 1989, a group of investors and environmentalists started a nonprofit group called Ceres, with the express purpose of helping companies be more sustainable in how they do business.

Mindy Lubber is President of Ceres. Mindy, welcome to the program.

Mindy Lubber: Great to be here.

Ryssdal: You know, sustainability can mean a lot of different things to a lot of different people. How ought it be defined in the business and economic sense?

Lubber: Well, it does mean a lot of different things, and I don’t have the perfect definition. But we have to look at the impact of the company and what it means to the future of the company and the planet. And climate change and water shortages are just perfect examples of sustainability. But so are labor practices and safety issues. I mean, BP, even during Lord Browne’s tenure — who was a leading environmentalist and passionate about climate change — had a record of not being at the top of their class on worker safety issues. The ethic of dealing with environmental and safety issues and human right issues has to be integrated into the core workings and strategic plans of companies, and it will make a difference.

Ryssdal: That’s a good point about Lord Browne, the prior CEO of BP, because despite his inclination in that regard, he wasn’t able to move that enormous company enough to prevent something like this from happening. You and groups like you depend, in essence, on advocacy to get it done. Is that effective?

Lubber: Well, it’s one way, but advocacy in our case is making the business case to business after business after business that acting on sustainability issues is in their interest and they need to do it. And we’re seeing more of it happen. We see Jeff Immelt at GE, he is spinning the farm, his Ecomagination program that is about manufacturing and developing things like engines that are low carbon. They’re expecting to make $25 billion in 2010 from low carbon products, more eco-efficient products. So this isn’t only about Jeff Immelt being a good guy or caring about the environment, which maybe he does and maybe he doesn’t — he is seeing the opportunities.

Ryssdal: So, for your money, Jeff Immelt, good guy or not, ought to be required by the SEC and by securities to report somewhere on his balance sheet, in plain written English, the impact of sustainability on his business — of what global warming is going to cost and what it’s going to benefit.

Lubber: Absolutely. Right, and that’s just straight business practices. If you’re an investor, you look at those SEC filings to decide “do I want to invest in GE or Caterpillar or any other company out there?” And you expect to understand the risks that companies face. Risks of climate change are as real as risks of not having enough uranium to mine to produce your product.

Ryssdal: When you or your staff meet with companies to join your network and sign onto the principles that you have come up with, and it doesn’t work and the sales pitch doesn’t take. What do these companies and CEOs say to you when they elect not to sign on?

Lubber: I think what we’re looking to do is work with companies that want to make massive changes. They don’t have to be the perfectly green company — in fact, I don’t know of any company that fits that title.

Ryssdal: No easy thing, though. I mean, the word you use “massive change” is a scary prospect.

Lubber: Sure, some people look at sustainability challenges as big, scary risks and addressing them means we’re going to go back to the Dark Ages. I would argue it’s absolutely the contrary. The clean energy future is where we’re going to see the growth in our economy and we need to build it with a vengeance.

Ryssdal: Mindy Lubber, she’s the president of Ceres. It’s a group that works with investors and companies on sustainability. Mindy, thanks so much for your time.

Lubber: Thank you. Take care.

Ryssdal: Climate change and the global economy were the subjects of a day-long American Public Media sustainability conference here in L.A. It’s called “Moving by Degrees.” Check it out.

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