Going for the green Featured

7:00pm EDT February 23, 2010

When it comes to consumer products, there is new meaning to the phrase, “global implications.” A product’s impact on the planet, as well as the person, is now a part of the shopping process for a growing number of consumers. More and more people want to feel like they are doing their part to make the earth a better and cleaner place.

Companies that are able to address the needs of these eco-savvy consumers by having a positive impact on the environment could position themselves for success in the coming decade.

Daniel Goleman, author of “Ecological Intelligence: How Knowing the Hidden Impacts of What We Buy Can Change Everything,” spoke with Smart Business about this new marketplace and the companies and consumers that populate it.

Businesses are finding that more customers are no longer tolerant of companies using any means necessary to produce a product. What brought us to this point?

I think it’s a conjunction of two mega-trends. One is the growing sense of anxiety and unease about the state of the planet, and I’m talking not just about global warming. People are seeing just a steady drumbeat of headlines about toxic chemicals in products they’ve used for years. We’re using up nonrenewable resources all because of, basically, our individual decisions when we go shopping.

The other massive trend is that transparency is coming to the marketplace and it’s coming in the form of new information systems that make it possible for a company or a consumer to track the specific downside or ecological impact of industrial processes and the products that drive them. A new consumer awareness is merging with a consumer anxiety and it’s creating a new marketplace reality.

Why will a business save money later by investing in better ecological practices now?

Instead of looking at an ecological improvement as a cost-saver, people are looking at it as a money-maker. It’s a top-line advantage. It’s going to be competitive in the marketplace. You gain or lose market share in the day-to-day marketplace of the future on the basis of your brand’s reputation in this domain.

That means if you can get a top-line advantage, you can manage more development costs in the beginning because it’s a smart R&D investment. Also, as these market pressures go through the supply chain, it means you can take these innovations to scale much more quickly.

It’s a ‘two-for’ really. It resolves the old tension between voices for social responsibility in business that say, ‘We should do it because it’s the right thing,’ and other voices that say, ‘No, we can’t do it unless you can show a strong business case for it because our first duty is to shareholder profits.’ Now those two things align going into the future.

Are smaller businesses better able to make these changes or is this the domain of big business due to a large company’s profit margins?

You can do this on any scale. What Wal-Mart is doing as a giant company is asking smaller companies, which, in turn, ask smaller companies and so on, to get better at looking at how they make their respective products. What this does is create a fantastic entrepreneurial opportunity particularly for small companies.

Small companies can be far more original in their thinking and far more innovative in coming up with better ways of doing even one thing. But if you do one thing better than anyone else in a marketplace that’s looking for that one thing, you have a tremendous business opportunity.

So, I think that even though this is happening on a mass scale, for smaller companies, whatever your niche is, whatever your product or service is, if you start getting more ecologically intelligent about how you do what you do, it’s going to become a marketplace advantage.

Ecological Intelligence: How Knowing the Hidden Impacts of What We Buy Can Change Everything

By Daniel Goleman

Broadway Books ©2009, 276 pages, $26