Episode 154 - Strategies for the Green Economy with Joel Makower
GreenTalk Radio host Sean Daily talks about business strategies and opportunities in the new green economy with author and GreenBiz.com executive editor Joel Makower.
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Sean Daily: Hi and welcome to GreenTalk, a podcast series from GreenLivingIdeas.com. GreenTalk helps listeners in their efforts to lead more eco-friendly lifestyles through interviews with top vendors, authors and experts from around the world. We discuss the critical issues facing the global environment today, as well as the technologies, products and practices that you can employ to go greener in every area of your life.
Hey, everyone, welcome to GreenTalk Radio, this is Sean Daily. Well, I have a very special treat for you today on today’s episode. We’re going to be talking on the green economy and my guest to be talking with me about that is Joel Makower, a name that will be known to many of you.
Joel is one of today’s leading voices on business, the environment and the bottom line for doing business in the green economy. Joel has 20 years’ experience advising companies about green strategy and marketing and has authored over a dozen books on business and sustainability, including his current book, “Strategies for the Green Economy.” Joel’s also a frequent commenter in print, broadcast and online media and regularly speaks to companies and business groups around the world.
In addition to being the co-founder and chairman of Greener World Media, whose online properties include such respected sites as, GreenBiz.com, Joel’s also the founder and principal of Clean Edge, Inc., a research and publishing firm focusing on clean technologies.
Joel is a graduate of journalism from the University of California at Berkley, is an advisor to numerous startups and non-profit organizations. The Associated Press has called Joel the “guru of green business practices.”
So, Joel, welcome to GreenTalk Radio.
Joel Makower: Thanks so much.
Sean Daily: Well, I’ve been a big fan for a long time, have been a big fan of both the website and your books, so excited to talk to you today about this very important topic. So, why don’t we just start with, is the green economy, this idea of the green economy as you talk about it in the book and certain other people like Van Jones, and certainly even Barack Obama, has talked about it, is that a reality now for the majority of businesses and consumers? Or, is it sort of this niche idea or dream?
Joel Makower: Well, Sean, I think it’s sort of whatever you want it to be in that, you know, there’s really no definition of what a green economy is. In fact, there’s no definition of what a green business is. And that’s a little bit of a challenge for both businesses and for people trying to figure out this green economy.
But something is definitely taking place here and, in some ways it’s new and, in other ways, it’s just a continuation of something that’s been going on for a while, but 20 years I’ve been tracking it, which is the companies are understanding that being a greener, more environmentally responsible business, usually means that they’re a better business.
And so, regardless of whether this is about saving the Earth or trying to green up your image, it’s just about reducing waste and improving efficiency and improving quality and reducing risks and attracting talent and, of course, reducing cost and maybe even growing sales. So those are things that really do just contribute to being better businesses and then how that translates economy-wise in terms of lots of companies doing that and creating opportunities for the overall society, both domestically and globally. I mean, that’s what this is all about and that’s where we’re now trying to direct all of this into a more coordinated fashion.
Sean Daily: Now you – I want to drill in there since you brought it up. And, you talk about this in Chapter 5 about, and this is a topic we talk about on this show quite a bit with guest, is this really fundamental, important and, unfortunately, confusing question of what exactly does make a green business or business green? And, you know, with only a few exceptions with things like the Forestry Stewardship Council, FSC, LEED certification, there’s almost a complete lack of standardization around really what defines a business or a product being green in various areas. And, there’s certainly been a lot of companies and marketers who have sought to exploit that vacuum that exists.
What exactly, in your estimation, does a company need to do – what goals do they need to hit to be green and call themselves green?
Joel Makower: Yes, that’s a good question. And, you know, you mentioned LEED and Forest Stewardship Council, those aren’t even about businesses, those are about products.
Sean Daily: Right.
Joel Makower: So, the question is, to make it even more complicated, can an ungreen business have green products or can a green business have ungreen products? So, it gets very complicated, very quickly. But, you know, in – there is no standard, you know, like there is for green building, for green business. And there is not absolute checklist because so much of the answer to your question about what does it mean or what does it take to be a green business, results in, it depends. It depends on what your business is; it depends on what your biggest impacts are; it depends what you’re already doing and the relationships you have with your suppliers.
But, in general, it means having a full understanding of what your impacts are, really understanding, not just things that happen within your office or business parameters, your factory gauge, if you’re a manufacturer, but in the larger segment of the products and services that you offer.
So, just for example, Levi Strauss figured out that the biggest impact of making a pair of 501 jeans, the two biggest impacts have nothing to do with anything that they do, it has to do with growing cotton and washing jeans at home. And so, you know, everything in between is really, I mean, it’s probably 1% of the life cycle impacts, in other words, the impacts on the air and water and soil and things like that, waste and waste streams and other environmental impacts.
So, you know, they’re working on how do they, you know, how do they work with the cotton industry to source more sustainable cotton. And, they actually have a partnership with Procter & Gamble to design some jeans that work in collaboration with cold water laundry detergent.
So, first of all, what do you know? And then, now that you know what the problem is, what are you doing? You know, are you – do you have a plan and is it, you know, a real plan with, you know, specific targets and timetables and maybe even bold, audacious goals? These days, you see a lot of companies, you know, that are, you know, committed to zero carbon or zero waste or 100% renewably powered, but it doesn’t have to be one of those all or nothing kinds of goals. It can just be saying, we want to, you know, achieve this level of reductions or improvements over the next three to five years and probably never get you to perfection.
And so, you know, what do you know and what are you doing? And then, how are you talking about this, you know, are you talking about this both internally and externally, upstream to your suppliers and downstream to your customers? And not just simply waving your arms and saying, “Hey, look at all the cool stuff we’re doing.” But, actually, you know, saying, “Look, this where we’re trying to get and this is where we are now. And we’ve got some other issues and the things that we’re doing we realize aren’t perfect, but they’re part of a process that we’re on.”
So, I think that, while we don’t have a specific definition of a green business, a company that can demonstrate that it understands its impacts, has a plan in place to something about them and is talking about them openly and authentically, is also a pretty good start.
Sean Daily: So, it’s like these companies basically who are in this current environment need to self-regulate. And, it’s – we’ve been seeing leadership from interesting places. You know, businesses like Wal-Mart that aren’t generally on people’s top environmentally geared companies, are providing a lot of leadership with regards to their supply chains. And we’re seeing, you know, them sort of self-regulating, not only with themselves, but with their various suppliers and the vendors that they’re working with. So, is that what we can expect in your estimation moving forward of is it really just more of the self-regulating environment and expecting it there? Or, do you think the government is going to start taking a larger role?
Joel Makower: Well, it’s both/and. I mean I think with so much of the stuff that Wal-Mart is doing, and it’s, frankly, what most companies are doing, in fact, I’d say the vast majority of companies, fall in the category of “doing less bad.” In other words, how do we pollute less, waste less, use less energy to kind of, you know, create some of these fossil fuels and other things that have been causing all these problems.
And that’s largely, I mean, the government isn’t – assuming it falls within some really low bars of regulation – regulatory compliance – the government hasn’t played much of a role there. In some places, you know, in states and some counties, there’s some higher bars, but that’s a lot of what Wal-Mart’s doing. It’s pushing it’s suppliers to reduce less – create less waste.
And they’re doing this not because they’re trying to save the Earth, although they don’t wake up every morning saying, we don’t care about the Earth, it’s simply that this is, as I said before, good business, where, if they can get their suppliers to reduce packaging, it may mean lower shipping costs; it may mean less restocking costs; it may mean less disposal costs of waste back behind the store where all the cartons and pallets and things come in. There’s definitely business benefits for doing that.
But, the other side of that, which is I think where government is going to start to play a role in the coming months and years, is – sort of the leading edge of all this, which is not simply about how do we do less bad or even how do we improve the bottom line by reducing our impacts, but how do we grow the top line? How does green sustainability, whatever we want to call it, become a foundation, a platform for innovation and new products and new markets and whole new business models. And, you know, whether it’s electric cars or green power or sustainably and locally grown food or a whole range of other things that we’re starting to see in the green economy. That’s where this not only becomes exciting but also becomes very profitable and sustainable from a business perspective and actually begins to move the needle on a lot of environmental problems we face.
Sean Daily: Now, let’s talk about the, if you don’t mind shifting gears a little, I want to talk about the elephant in the room here, which would be the economy in the U.S. and other places. It’s kind of interesting, Joel, is we’re having this interview, the backdrop we’re facing, you know, with the world, particularly the U.S. economy, is very interesting because we’re facing a deepening global recession as well as, on top of all of the well-documented environmental problems that we have in the world.
And, in the U.S., there’s this view held by many that there’s been an economic bleed off happening for the better part of a decade or more, where the U.S. has been really losing jobs. And, in many cases, I think shipping jobs overseas to places like India and China and I think there’s this idea that there’s this hope as we’re in this climate of hope with Barack Obama and, you know, the advent of our new administration, that there’s this hope that this will – the green economy will be a panacea for many of these things and business opportunities around clean tech and clean energy and other legs of the green economy will help sort of offset this. Do you think that’s a realistic vision?
Joel Makower: Well, panacea, is maybe a little bit strong in that it says that this is the answer. I think that a lot of green economy initiatives, well-designed and deployed, can be a pathway or one of the pathways that we use to get ourselves out of this economic mess. I mean, we see a lot of great opportunities out there in green transformational opportunities. We see the car companies, you now, going through this very tough time, maybe even on their deathbed for, you know, some of the companies, hopefully not. And we see a lot of autoworkers and others that are being affected by that.
What’s interesting is, you know, you take a wind turbine, your wind turbine, one of those giant windmills that you see in some parts of the country, it has about 8,000 machine-tooled parts and some tons of steel, you know, it’s not unlike a car in that regard. I mean, it’s very different than a car, obviously, but from a manufacturing perspective and from the perspective of the skills that are needed to create that. And, you know, so we have these abandoned auto plants, we have these laborers, these skilled workers who are in need of good jobs and we have this opportunity to redeploy them.
So, you know, that is where some of this, you know, starts to become a pathway. Van Jones, you mentioned earlier, he talks about, you know, how do we use the green economy to address social issues, you know. How do we get some of the most dispossessed kids to put down a handgun and pick up a caulking gun and be part of this great effort, hopefully, to be lead by Obama and the new Congress and their state and local counterparts, to weatherize every home and building in America. And, not simply as a bailout, but because these are actually – these make money, so you could use a revolving fund where the fund gets repaid by the savings of energy that owners and residents of those buildings get to enjoy and it goes back into the treasury and then gets to fund more buildings, meanwhile, we’re creating lots of jobs.
So, there are many pathways here and I think, you know, a lot of it’s, you know, how do they get deployed and who, are the vested interests, you know, going to be lobbying against this because they’re the incumbent interests as we’ve seen so often in the past and are they going to win and are we going to have the moral leadership and political authority to carry this through?
Sean Daily: And what’s your vision on that? What’s your, if you had to guess, do you think that’s going to be successful or is it going to run into roadblocks?
Joel Makower: Well, if I had a crystal ball, I’d be a rich man.
Sean Daily: Sure enough.
Joel Makower: But I wake up most mornings on the optimistic side of the bed and, like I think most people involved in this space, I’m extraordinarily excited and encouraged by what President-elect Obama is saying and by the his – not just the passion, but very much the intellectual rigor that’s going into designing some of these things. And, of course, it’s not just one man or one administration behind this, it has to be Congress as well and it has to be the business community, you know, standing up and saying, “Yeah, you know, this is – this is great, under the circumstances, this is something we want. We may not have wanted this in times when we were flush or in – but this is what we have to do to get where we want – back to where we want to be.”
So, it’s going to take an entire community and an entire nation to really support this and that’s where remains to be seen. I mean, you know, we’re in unchartered territory here economically and we’re in unchartered territory here politically. And so, you know, anything goes, but I’d have to say, looking at what the people that Obama has brought together and, you know, in the energy and environmental and policy arenas, I think that he’s got a moment in time.
I mean, that’s the real thing. I mean, in a week or two or three after September 11, 2001, George Bush had a moment in time, where he could have said at the time, you know, we can never let this happen again. In order to insure that, I’m going to put a dollar or two dollar tax on gasoline, it’s going to be painful, but you can see what happens when we don’t pay attention to this stuff. And we’re going to plow that money back into a green economy and, you know, alternative energies and alternatives to oil. You know, he had that opportunity and, obviously, he squandered it and, you know, six weeks later, people wouldn’t have paid a nickel more for a gallon of gas because we’d largely forgotten about that.
Barack Obama has that same window of opportunity here. And, you know, the question is will he seize it and will he succeed.
Sean Daily: Yeah, absolutely. And, you know, you mentioned that story about the opportunity to do things like that that Bush had after September 11th and it reminds me of sort of the, you know, war bond mentality and things that happened, you know, when America rallied around other causes, for example, war. It certainly seems a lot more uplifting to rally around a new, you know, clean sustainable economy rather than one based on war. And, I guess, as you put it, the question is whether or not that’s going to happen.
My other question regarding the economy is, you know, we’re obviously, we’re looking at the stock market being at its lowest levels in ten or more years and, in some cases. What effect, if any, do you see the recession, the current recession and deepening recession, having on this rise of the green economy, both in U.S. and globally?
Joel Makower: Well, it makes it challenging, certainly. If you can’t get credit, then you can’t invest in some of the things you need to do. And, if people are hurting, you know, they’re going to be paying attention to more basic needs like, you know, housing and food than, you know, climate change and environmental issues.
But, I want to go back to something you were saying before about, you know, this moment in time and, you know, really helping us, you know, understand this moment. You know, one of the things that, you know, people ask me lately, if you had Obama’s ear or, you know, if you could ask one thing of Obama, what would that be? And, you know, my glib answer is, leadership and vision. You know, there’s a 1,001 policy prescriptions on what we need to do and people much smarter than I have laid those forth.
There’s a group called the Clean Techs for Obama, which is – was a campaign organization that’s now sticking together as a policy group, of which I’m a part. And they’ve laid out all kinds of great visions and policy prescriptions. But, here’s I think one of the big challenges and you talked about before about it’s much nicer doing this than say fighting a war in terms of bringing the country together.
One of the things we desperately need is that we, as a society, don’t really have a vision of what happens if we get this right. We have lots of visions, Al Gore helped us with that, saying what happens if we get it wrong, but what happens if we get it right in terms of not just the environment, but the economy and public health and job creation and community wellbeing. Because there’s, you know, this isn’t just about saving the Earth and it’s not just about energy independence or getting off of foreign oil, all those nice campaign slogans.
This is actually, if we get this right, about a better life. And so, we don’t have a vision of that. And I think President Obama will have this great moment to help us understand that vision and help paint that picture and help us realize and say, wow, this isn’t just about the birds in the trees, this isn’t just about people living in coastal communities, this isn’t just about Katrina victims, this isn’t just about the polar bears.
This is really about a fundamental way that we can transform our economy and our world in ways where we end up with better products and services, these very cool electric cars that we can plug in at home and maybe don’t even have to own, you know, we sort of borrow them when we need them and a whole bunch of other things, healthier food and local – stronger local communities. If he can paint that picture and get us excited, he’ll get the public excited and then, you know, the politicians, the members of Congress and local legislatures will see a parade that they’ll have no choice but to get in front of.
Sean Daily: Well, speaking of things economic, we need to take a break right here to hear from our sponsor and we’ll be right back. We’re talking on the new green economy. We’re speaking with Joel Makower who is the co-founder and chairman of Greener World Media and author of the book, “Strategies for the Green Economy.”
We’ll be right back on GreenTalk Radio. Thank you, everyone.
Sean Daily: And we’re back on GreenTalk Radio. This is Sean Daily. My guest is Joel Makower, he’s the co-founder and chairman of Greener World Media and author of the book, “Strategies for the Green Economy.”
Joel, we were talking about a lot of things before the break, including the underpinnings of this green economy and what we can hope to expect from the administration in terms of leadership moving forward, company self-regulation and other things. I wanted to ask you, joining in a little bit, you were talking just before the break about, you know, some of the people in this country that don’t maybe have as much connection to some of these issues and the resonances maybe isn’t there.
And, in your book, you actually talk about it, the ungreens, the 3% of the population who essentially have no real ecological consciousness or identification with environmental concerns. Should companies out there even be concerned about that segment of the population? And, if so, how should they be reaching out to them?
Joel Makower: Well, it goes back, in some ways, to something I was saying just before the break which is, you know, I think the people who don’t like hybrid cars for some reason, probably see them as, first of all, that the people who drive them are holier-than-thou. Or that they represent a change to a kind of car that they don’t want to have to be forced into. And so, the question is, how do we get everybody, you know, you’ll never get everybody, but how do we get, you know, the majority of people, the overwhelming majority, excited about this, and that’s his vision for, you know, what is this like – this isn’t just about, you know, switching from one car to another, although that may be part of it.
You know, we talked – it’s been this myth for well my whole life and probably, you know, since World War II that cars give us freedom, that’s the American way, that we have to have cars because they give us freedom. When you look at, you know, if you have a car, you’re not necessarily free. You’ve got to park it and if you don’t have a driveway or a street, you have to pay to park it. You have to insure it, you have to fill it up with gas. You have to keep it maintained. You have to keep it insured. And you’ve got this thing that may cost 20, 30, $40,000, it’s sitting idle 95% of the time; it’s not a great use of funds.
What gives us freedom is the ability to have mobility, not to own a car It’s to get into a vehicle and to get wherever we want to go whenever we want to do that in whatever style, whether it’s small and peppy or big and roomy, that we want to have. And so, you know, what if we had a world where people – we didn’t really need to own cars. What we had was we had some access to mobility and we had – we were able to tap that fairly easily and fairly effortlessly. Maybe the car even shows up at our door and whatever car we need that particular day and when we don’t want it the 95 or 98% of the days when we’re not actually driving, someone else gets to use it. And, so that may be a better thing, it may be cheaper, it may free us up in some ways, it may allow us to use our money for other kinds of things besides owning and insuring and parking a car.
So, all I’m saying is that that’s a vision that no one seems to have understood or we haven’t seemed to –because nobody’s offered to sort of portray that vision and, frankly, we’re not ready to implement that vision but we’re on our way towards that and it’s one small part of the green economy.
So, you know, those are the people who will say, you know, I liked my record collection and I didn’t want to give them up, but when CDs came along, I sort of resented them at first because I had to go and buy them. But, you know what? They were much better and they were smaller and I could access the songs better and I can access them on different things. And then, when iTunes and the iPod came along, that really upset me, because, all of a sudden, I had all these CDs that I didn’t – couldn’t do anymore.
Sean Daily: Right.
Joel Makower: And so, you know, you get the point that, you know, CDs didn’t replace vinyl because we were running out of vinyl, but because it was a better way of doing things and that’s what the green economy has to be.
Sean Daily: Now, you’re known as the “guru of green business practices,” so I want to pick your brain a little bit here, if I might [laughter] about strategy. And, also since your book is “Strategies for the Green Economy”…
Joel Makower: No spiritual advice here.
Sean Daily: Okay, I’ll stick to just the economic side. You know, there are a lot of business people out there with large companies or even, you know, budding entrepreneurs that are interested in getting involved in this. And, so I’m curious, you know, what in your view are some of the more environmentally and even economically significant opportunities that are emerging for companies in this green economy?
Joel Makower: Well, there’s a lot of them. I mean, some of them are just simply the means of doing what you do now more efficiently and more effectively or with lower impact and maybe improved customer experience.
But there’s a whole range of new businesses that are opening up and what’s interesting is there’s a whole bunch of new business models. So, you take solar, for example, I mean solar energy has been just around the corner for 30 or 40 years and, guess what? It’s still just around the corner. But one of the big – that’s changing because it really is actually being implemented, but it’s not being implemented by individuals except for some fairly wealthy types and even by most businesses, because you can’t afford this. And the problem is that we’re not used to owning our means of power production, we’re used to buying kilowatt hours or, more specifically, you know, as Amory Levins likes to say, you know, cold beer and warm showers, instead of the other way around. We just want the services that they provide.
And so, nobody wants to spend 20 or $30,000 to buy solar panels on their roof, and it’s going to take ten years to pay it back and you have to maintain them and all kinds of things. Kind of what I was saying about the cars. But what we want are the services, the renewable energy at a fixed price because the sunshine never increases in cost.
And so now there’s companies that are coming out and saying, okay, how do we provide solar services? We’ll put the solar panels on your roof but we get to own them. We’ll sell you the kilowatt hours and , if there’s any extras that you’re not using, we’ll sell them into the grid and keep that money and we’ll, you know, also get some tax deductions and things and tax credits, and we’ll make a business out of that.
And someone else is coming in and saying, you now, solar energy is really complicated to install and it’s more like home remodeling than say, Direct TV. And so, we’re going to come up with a way of making it plug and play so you can call someone and they show up or maybe do a lot of it on the internet and then all of a sudden someone shows up and in a couple of days installs this thing and shortens the sales cycle and shorten the installation process, make it more plug and play.
And someone else is coming along and saying let’s use what we learned on the web where we have not just customers but members and they help recruit other members and it gets kind of viral. So everyone comes together and buys solar together and brings down the price.
Those are there examples of three companies, actually, there are more than three companies, that are out there, that have figured out how to take just the basic solar services and innovate on it and deploy some of what we learned on the internet and other marketing and economies of scale and create new business opportunities.
We’re seeing those kinds of things throughout the economy. Not just with new things like solar, but old things like packaging and water and transportation and, of course, energy of all sorts. And that’s what’s really exciting is that we have a way to invent – a way to some really cool, new business opportunities.
Sean Daily: Yeah. Any final words of advice for green business and/or green entrepreneurs out there or would be?
Joel Makower: Well, you know, it’s going to be tough the next some months and this is going to be, a you know, a rough patch and the temptation to want to sort of step away and saying, look, you know, let’s come back to this when we can afford to do that. And, you know, if you’re looking at that perspective, it may be a year or two before that happens. But this isn’t necessarily about changing everything and costing more and being inconvenienced. This is a real opportunity to really rethink what we’re doing and to seize some opportunities.
So, you know, I guess the advice is, stick with it. Don’t let the economic times, you know, mask the opportunities and there’s some really exciting things that are going to be happening, I truly believe over the coming weeks and months. And, you know, let’s all try to rally together and be part of it in whatever small ways we can.
Sean Daily: Well, unfortunately, that’s all the time we have on today’s episode. My guest has been Joel Makower, he’s the co-founder and chairman of Greener World Media and executive editor at GreenBiz.com. He’s also author of the book, “Strategies for the Green Economy.”
You can find out more about Joel online at his websites at GreenBiz – B-I-Z.com, and Makower.com – M-A-K-O-W-E-R.com.
If you’re interested in topics related to green business and the green economy, I encourage you to check out other episodes of GreenTalk Radio, as well as articles we have on the GreenLivingIdeas.com website, under the topics, “Work” and the “Office,” section.
Joel, thank you so much for being with us today.
Joe Makower: My pleasure, Sean.
Sean Daily: And thanks to all of you out there for listening in. As always, we’ll see you next time on GreenTalk Radio.
Thanks as always to everyone listening in today. Remember for more free, on-demand podcasts, articles, videos and other information related to living a greener lifestyle, visit our website at www.GreenLivingIdeas.com. We’d also like to hear your comments, feedback and questions. Send us an email at [email protected].
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