Will Big Business save the Earth? Maybe it will, says Jared Diamond (Guns, Germs, and Steel, Collapse), who until recently assumed corporations were environmentally destructive, greedy, evil and driven by short-term profits:
The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image — one attained by, say, avoiding oil spills and other environmental disasters — reduces criticism from employees, consumers and government.
Let’s start with Wal-Mart:
Obviously, a business can save money by finding ways to spend less while maintaining sales. This is what Wal-Mart did with fuel costs, which the company reduced by $26 million per year simply by changing the way it managed its enormous truck fleet. Instead of running a truck’s engine all night to heat or cool the cab during mandatory 10-hour rest stops, the company installed small auxiliary power units to do the job. In addition to lowering fuel costs, the move eliminated the carbon dioxide emissions equivalent to taking 18,300 passenger vehicles off the road.Wal-Mart is also working to double the fuel efficiency of its truck fleet by 2015, thereby saving more than $200 million a year at the pump. Among the efficient prototypes now being tested are trucks that burn biofuels generated from waste grease at Wal-Mart’s delis. Similarly, as the country’s biggest private user of electricity, Wal-Mart is saving money by decreasing store energy use.
Another Wal-Mart example involves lowering costs associated with packaging materials. Wal-Mart now sells only concentrated liquid laundry detergents in North America, which has reduced the size of packaging by up to 50 percent. Wal-Mart stores also have machines called bailers that recycle plastics that once would have been discarded. Wal-Mart’s eventual goal is to end up with no packaging waste.
One last Wal-Mart example shows how a company can save money in the long run by buying from sustainably managed sources. Because most wild fisheries are managed unsustainably, prices for Chilean sea bass and Atlantic tuna have been soaring. To my pleasant astonishment, in 2006 Wal-Mart decided to switch, within five years, all its purchases of wild-caught seafood to fisheries certified as sustainable.
Diamond found himself mightily impressed with Chevron:
Not even in any national park have I seen such rigorous environmental protection as I encountered in five visits to new Chevron-managed oil fields in Papua New Guinea. (Chevron has since sold its stake in these properties to a New Guinea-based oil company.) When I asked how a publicly traded company could justify to its shareholders its expenditures on the environment, Chevron employees and executives gave me at least five reasons.First, oil spills can be horribly expensive: it is far cheaper to prevent them than to clean them up. Second, clean practices reduce the risk that New Guinean landowners become angry, sue for damages and close the fields. (The company has been sued for problems in Ecuador that Chevron inherited when it merged with Texaco in 2001.) Next, environmental standards are becoming stricter around the world, so building clean facilities now minimizes having to do expensive retrofitting later.
Also, clean operations in one country give a company an advantage in bidding on leases in other countries. Finally, environmental practices of which employees are proud improve morale, help with recruitment and increase the length of time employees are likely to remain at the company.