The First Real Step

It’s tried and true: you can’t manage what you don’t measure.

At the risk of sounding like a brazen promotion for Climate Earth, I will say what I believe: begin by counting all your carbon because you can’t manage what you don’t measure. Of course you don’t have to use Climate Earth. But do count ALL your carbon, not just your direct emissions and your electric use. This once common practice is a narrow approach and is rapidly fading. The notion that a company that designs and sells a product is not responsible for the emissions of CO2e released in the production, packaging and transportation of that product is like saying that a company is not responsible for the commercial success of its own products.

On December 30 of last year, a Wall Street Journal article drove this point home (http://online.wsj.com/article/SB123059880241541259.html). Dell’s quest to be “the greenest technology company on the planet” is noble, but they chose to measure only a tiny fraction of their actual carbon footprint (approximately 5%). No one questions that a manufacturer must look at the cost and quality of components. The same is true for the cost and quality of services from outsourced manufacturing partners. What materials you use, what partners you chose are key strategic decisions.

In the same way, the manufacturer of a product has control of the carbon footprint of the materials and processes used to produce that product, if they chose to control it. In short, carbon is joining cost and quality as a strategic metric, and knowing the carbon footprint of materials and processes in your products now has measurable value. Carbon emissions produced in the manufacturing and transportation of any product, what we call the carbon intensity of a product, is a key metric for predicting increasing costs of a product. Why? Because cap and trade legislation or a carbon tax will be passed by congress as early as December of this year, and almost certainly in 2010.

House Energy and Commerce Chairman Henry A. Waxman plans to hold at least two hearings a week until he rolls out a comprehensive overhaul of the country’s environmental policy before the Memorial Day weekend. (http://www.politico.com/news/stories/0309/19768.html)

It is now clear that carbon emissions will no longer be free. It is also clear that major direct polluters will pass that cost on to everyone downstream. On top of that, as the economy recovers, China, India, and the US will once again be in fierce competition for oil, which will add volatility to oil prices and drive them up.

Counting all your carbon, both direct emissions and indirect supply chain emissions, is economically smart, competitively critical and environmentally responsible.

Begin at the Beginning

If you are wondering where to begin, get a copy of Joel Makower’s new book, Strategies for the Green Economy. (http://www.makower.com)

Joel has been writing and working in the green economy for twenty years. The first ten years he focused on “spreading the green consumer mantra.” He spent the next “more encouraging” ten years working with and writing about companies. The 40 or so short chapters are digestible, practical, to the point and easy to read. The book ranges from providing a three page history of the green movement (a very nice backgrounder), to addressing the tough questions of what consumers are saying, what they are doing and how to reconcile the two. It’s a must read for any executive “in the green,” and is especially powerful for those contemplating a shift.

Green Leadership

Helping executives lead the new carbon-constrained economy.
My blog is written from and inspired by three core perspectives:

First, that the combined creativity and economic power of business is the only force strong enough to lead us into a new carbon constrained economy.

Second, businesses that are dragged kicking and screaming—or even lagging—in the new economy will not survive the next 10 years.

Third, by leading our economy into a new era of innovation and responsibility, the truly great business leaders can transform the negative and well-deserved image of business. Rather than being unethical, ruthless profiteers, creative leaders will provide economic and ecological well-being and opportunities for people to be more positively engaged and more productive.

It’s clear that being a green business leader no longer has anything to do with being part of a fringe movement. It is now the foundation on which every successful and thriving business will be built. Being a green enterprise now means being highly efficient and competitive in a market that is less and less tolerant of companies that are not overtly and transparently demonstrating their commitment to people and planet.

In short, my goal in these posts is to help business leaders figure out what it means to lead into the new era, what a green strategy might look like, and how to avoid pitfalls and inevitable arrows of real leadership.