Letters From The Earth

Action, not intent

November 16, 2009

During the last several months many of us have read or watched the debate and dialogue on climate change, sustainability, carbon footprint, cap and trade, and other green initiatives. We can't get away from it. You can't pick up a newspaper or magazine or watch a news program on television without some reference to a globe in trouble environmentally. Biofuels, forest certification, harnessing greenhouse gas emissions, all of these and the above have been commonplace. These issues are not simple, and just discussing and reading about them doesn't make us better or, to be blunt, make our businesses more sustainable. We need commitment to change. We need action, not lip service.

This became clear to me when a friend sent me an article from the September issue of Packaging Digest. The article cited a study titled "The Business of Sustainability," co-authored by MIT Sloan Management Review (MIT SMR) and the Boston Consulting Group (BCG). The study said that "corporate leaders aren't following through on sustainability." While corporate leaders believe that "sustainability-related issues will have an impact on their business, few are taking decisive action to make the changes that are necessary to improve and reduce carbon footprint." There's "a gap between intent and action."

A great example of this is the horrific mining of Canadian oil sands. Royal Dutch Shell, a Fortune 500 company, is heavily involved in this project. The Shell ads on television portray a company comfortable in its commitment to "green energy" whether it be wind, solar, or geothermal. The truth is that Shell's carbon footprint has increased dramatically with its involvement in oil sand production in Alberta, Canada. A recent study concluded that Shell's carbon intensity will rise 85 percent as it becomes more involved in the Canada project. "When Shell's total resources are taken into account, the amount of greenhouse gases emitted per barrel of oil equivalent produced will far outstrip all of their competitors." Where is their commitment to sustainability? Think of the incongruity of those ads versus the environmental impact of oil sand production.

The automotive and oil industries have a serious problem. Today they are not friendly, are totally dependent on hydrocarbons, and don't appear to want to change. One begets the other and I don't see any commitment to becoming more sustainable. They don't get it. I didn't say it was simple, but these two industries have increased "the gap between intent and action."

The report by MIT SMR and BCG continued with the finding that "a majority of companies are not acting decisively to exploit the opportunities and mitigate the risks that sustainability presents. The finding should be a wake-up call to executives that if they mean to make progress on sustainability, it's time to get serious."

The study interviewed 1,500 corporate executives, and while 92 percent said they were trying to address issues of sustainability, "most said they were either not taking bold action or falling short on execution."

Less than a third said their company has developed a clear business case for sustainability. Less than 45 percent said their organizations were pursuing basic sustainability strategies such as reducing or eliminating emissions. The majority of sustainability actions undertaken to date appear to be limited to those necessary to meet regulatory requirements.

What I really like most of all about this study was the comment by Michael Hopkins, editor in chief of MIT SMR: "One of the most interesting findings was that the more you know about sustainability, the more it matters. Executives who have been thinking and strategizing around the issues are much, much more likely to see the competitive advantage that a sustainability strategy can grant."

Sixty-eight percent of business leaders who focused on action oriented sustainability issues saw financial gain.

The findings of the study support the audit approach to improving sustainability. All the more reason, in my view, for the narrow web label industry to embrace TLMI's new certification standard, LIFE (Label Initiative For the Environment). This standard forces action, causes an organization to reduce or eliminate emissions, and improve efficiencies in packaging and design for reuse or recycling.

The economic experts in the world believe that the world's population will grow from 6.8 billion to 9 billion by 2050. That's just 40 years. California and China are already running out of water. There is no question that the polar ice cap is melting. Shipping companies are now opening up new routes through formerly impassible seas north of Siberia. Based on just these three points, we need to make changes and focus on sustainable practices. We need action, not intent. Our industry must reduce its carbon footprint. We must follow the metrics that have been laid out in the LIFE agenda. If we don't, we're at risk.

Another Letter from the Earth.
Calvin Frost is chairman of Channeled Resources Group, headquartered in Chicago, the parent company of Maratech International and GMC Coating. His email address is cfrost@channeledresources.com.