At first glance, a windswept plain in northern Oregon might not seem the most obvious spot for Google to be spending $100m.

But this is where one of the world’s biggest wind farms is taking shape and the money the internet group has put into it is just a slice of the $915m Google has invested in renewable energy projects over the past two years.

It is not alone: on the other side of the world, the parent of the Danish toy group, Lego, is spending around DKr3bn ($500m) on a wind farm off the German coast. Sweden’s Ikea has a collection of wind farms located from Scotland to France and Germany.

“We have no desire to become a power utility,” says Rick Needham, Google’s head of energy and sustainability. Neither do Ikea or Lego, but what all three do want is to promote the use of green electricity.

Observers might ask: so what? Companies have been brandishing their environmental credentials since at least the 1980s, the decade when Ed Woolard, then chief executive of the DuPont chemicals group, said CEO stood for “chief environmental officer” at his company (then under fire from critics who labelled it one of the world’s worst polluters).

But something different is happening now. A small but prominent group of companies has begun to adopt far grander green strategies requiring large outlays of money and a change to the way their businesses operate.

This more thrusting version of corporate sustainability may itself prove unsustainable. And it is easy to dismiss it as merely another public relations tactic in an age when the term “greenwash” – using green PR to whitewash corporate misdeeds – has entered everyday language.

While some companies certainly are parading their green credentials as a marketing strategy to court consumers who are ever more responsive to environmental issues, many businesses do appear to be moving well beyond greenwash. Some believe we are at the beginning of a fundamental shift in corporate behaviour that will intensify as companies face increasingly severe problems from soaring population and limited resources.

That will be the message in the Brazilian city of Rio de Janeiro later this month when more than 100 world leaders gather for the UN’s Rio+20 sustainability conference, named because it comes 20 years after the 1992 Rio earth summit.

Business leaders will play a greater role this year than in previous meetings, with many saying that companies are now at the vanguard of crafting initiatives, while governments repeatedly fail to agree effective or policeable policies for sustainable global growth.

Business involvement in the 1992 summit was trifling, says Rachel Kyte, vice-president of sustainable development at the World Bank. “It was a different era.”

By contrast, executives are this year expected to account for one of the largest non-government groups in Rio, and will meet for several days ahead of the formal summit. They will devise their own sustainability strategies and deliver them to officials.

“It’s designed to feed into governments on a quite large and ambitious scale and it’s the first time this has happened,” says Georg Kell, executive director of the UN Global Compact, a green business initiative behind the move.

What this will achieve is still unclear. But the gathering in Rio will nonetheless highlight that it is harder for a company to try to pass itself off as a green champion by planting a few trees in an Indonesian rainforest or publishing a sustainability report.

Today, some corporations are making far more radical changes. Walmart, the retail group, is driving thousands of suppliers to make greener goods. Puma, the sports goods maker, has introduced an environmental profit and loss account to prioritise which parts of the business to make greener. Under pressure from Greenpeace, McDonald’s has promised not to sell chicken fed on soy beans, a crop responsible for deforestation in the Amazon.

Many observers note the number of companies taking such steps remains small and doubt whether companies – whose ultimate objective is profit – can really steer the agenda without far more robust direction from governments. Dirty heavy industry and oil companies face particular criticism for peddling greenwash.

Still, many companies undoubtedly feel under more immediate pressure to overhaul their business models amid forecasts that the world’s population will jump from 7bn to 9bn by 2050, largely driven by emerging economies. The consequent strains on water, food and energy resources have encouraged many executives to imagine how their businesses might cope with – or exploit – a world of $150-a-barrel water, let alone oil.

At the same time, no single nation or bloc of countries appears to have the will or ability to drive an international agenda in what US political scientist, Ian Bremmer, has described as a “G-zero” world, as opposed to one led by groups such as the G7 or G20.


This offers companies a historic opportunity, says Paul Polman, the 55-year-old Dutchman who for the past three and a half years has run the sprawling Unilever conglomerate, producer of household products such as Flora margarine and Dove shampoo.

Mr Polman is regarded as a doyen of the corporate sustainability movement. In 2010 he told investors who disagreed with his green strategy, “don’t put your money in our company”, and he relentlessly promotes group efforts ranging from concentrated detergents (which use less water) to teaching Indian gherkin farmers to use fewer pesticides.

Speaking over coffee in his London office, he says such actions are required because of the looming strain on resources, coupled with the pressure of climate change, and politicians hobbled by short-termism.

“You don’t see governments now being as much in charge as we would expect,” he says. “It’s a unique opportunity for companies to increasingly take that responsibility to offer solutions.

“What you will see in Rio is an incredible galvanising of businesses that say: ‘I see the costs every day, I see the effects every day, I cannot function if society doesn’t function. We need to take charge’.”

There are some who say business has already taken the lead. “If you think about where the bright spots on the landscape of innovation and interesting thinking and pronouncements are, it’s almost exclusively now coming from business,” says John Elkington, a leading figure in the corporate responsibility movement.

“There is this new breed of CEOs who are not in this simply to feel comfortable as they swim up and down the club swimming pool, so they can say: ‘I’ve got a report, have you got a report?’ They are saying: ‘This is fundamentally about the future of capitalism and we’re going to have to get this right’.”

Still, there are obvious limits to what a corporation designed to deliver value to shareholders is prepared to do without government regulation.

Put another way, would Coca-Cola ever have delivered the ban on large sugary drinks that New York City’s mayor, Michael Bloomberg, announced last week?

This lies at the heart of the argument made by at least one executive heading to Rio this month. James Cameron, of the London-based Climate Change Capital investment group, agrees that companies are doing far more to deliver environmental objectives.

“But in many respects they’re not designed to do that,” he says. “It’s an uncomfortable fit. These businesses are still designed to make profits and distribute them to shareholders.”

The challenge, he thinks, is to harness the expertise being developed inside major companies and use it more effectively.

Meanwhile, the pool of green champions is still very small. They make up only about 1 per cent of companies with revenues above $1bn, says David Metcalfe, chief executive of the Verdantix research and advisory group, who divides such businesses into two.

First, there are the “evangelicals”, such as Unilever, Dutch electronics group Philips or Britain’s Marks and Spencer, for whom sustainability is “a belief system”, often driven by a CEO’s views on long-term trends such as resource scarcity. Although Google stresses that it intends its wind farm to be profitable, the venture is still an example of a company branching into a non-core business to prepare for a new commercial landscape.

Then there are “sustainability capitalists”, such as GE or Siemens, which invest in ventures such as wind energy or technology to make water usage more efficient because they see short-term growth opportunities.

Despite what Mr Metcalfe describes as “desperate” efforts to establish a link between sustainability and profits, he says “the jury is absolutely still out” on whether such a connection exists, and suggests today’s corporate sustainability drive may be fragile.

“The big question is to what extent do the evangelicals manage to convert people and at what speed?” he says “I think a lot of boards will be positively or negatively influenced by whether the evangelicals succeed.”

There are already hints of retreat. This year UK supermarket group Tesco revealed it was retreating from a plan to put carbon footprint labels on products, announced in 2007 during more prosperous times.


Finally, there is perhaps the most fundamental question about ambitious corporate sustainability policies: are they making much of a difference?

“At a gross level, the answer is clearly ‘no’,” says John Sauven of Greenpeace UK, pointing to the relentless rise of carbon emissions, overfishing, forest devastation and species loss across the world.

“But when you look at individual corporate behaviour, you do see some quite significant changes,” he adds, explaining that global businesses such as Nestlé and Unilever can have a large impact when they decide to make their enormous supply chains as environmentally sound as possible.

“That is quite a difficult thing to do,” he says. “It’s also a relatively new thing for them to do. But they are doing it and they are investing quite considerable sums of money.”

This is undeniable. But we may have to wait until Rio+30 to see if these ventures will genuinely transform the way we do business.

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