The Age of Corporate Environmentalism

Surprise--big business has learned that it's pretty easy being green.

Katherine Mangu-Ward from the February 2006 issue

Ask Bob Langert about the Environmental Protection Agency (EPA), and he starts to chuckle. "When we meet the regulators, it's kind of nice," says the senior director for social responsibility at the McDonald's Corporation. "We just got an award from the EPA. When we see the regulators, we always hope it's because they're giving us an award."

Such coziness between big business and big government might make readers nervous--but it's not what you think. McDonald's won this year's Climate Protection Award by cooperating with Greenpeace to build a prototype McDonald's restaurant with greener refrigerant technologies, which reduce problematic emissions from cooling units and cut energy costs by 17 percent. Cooperation between corporations and greens was done right, and everybody won.

Well, almost everyone won. It was a shame to lose a perfectly good bad guy.

The idea of the rich corporate villain gleefully dirtying Mother Earth is powerful and appealing. Children of the 1980s encountered this supervillain in comics, movies, public awareness videos, and science textbooks. Times were good for mandatory recycling, for mandatory emissions reductions, for anything mandatory aimed at restraining corporate polluters.

But in the late '90s, something peculiar started happening. The men in suits were still middle-aged, round, and white. They were still just as concerned with profit and golf. Very few of them sported tie-dyed attire, aside from the occasional whimsical Jerry Garcia tie. But the men in suits started caring. Or at least acting like they cared. Which, if you ask a spotted owl, is the same thing.

So environmental activists across the nation bought their own ties and started dealing with corporations as almost-equal partners in planet saving. Businesses in turn learned that it's pretty easy being green.

"What's hot right now are voluntary environmental programs," says Jorge Rivera, assistant professor at the George Washington University business school. Mandatory environmentalism is "effective, but expensive," Rivera says, and it often produces nothing but "greenwashing," where companies satisfy the letter of the law as quickly and as cheaply as they can rather than making a serous effort to innovate. (In some cases, this actually means an increase in environmental damage, as when harmful emissions are converted to less-regulated but more harmful forms.) And since "a lot of the big, obvious stuff has already been done," Rivera notes, it isn't really effective to mandate uniform change to bring about marginal gains. So to ward off excessive regulation, help the bottom line, and get brownie points at the same time, companies started playing nice with environmental groups.

Meanwhile, by the end of 2000, Greenpeace, Environmental Defense, et al. were realizing that the government wasn't a reliable ally anymore. Corporations started to look awfully appealing when the alternative was George W. Bush. Gwen Ruta, director of corporate partnerships at Environmental Defense, claims private initiatives are "the wave of the future," in part because "we're in a rather uncertain regulatory period. How aggressive will the government be in the next few years in creating regulations?

We don't know. And so we're looking to partner with companies to go beyond regulations." Unlike in the '80s, when an adversarial relationship with government simply sparked more grassroots enthusiasm, Bush's unwillingness to increase environmental regulation seemed contagious. The widespread excitement about saving the planet was spent, perhaps because the "a lot of the big obvious stuff" had already been done. And green activists weren't generating headlines the way they used to. The radicals broke away, with groups like Friends of the Earth and the Earth Liberation Front determined to continue in a pure anti-corporate vein, but well-established environmental groups decided their best option was to play nice.

As the environmental bureaucracy became an emasculated dispenser of the occasional award, many greens decided that they had no choice but to suck it up and try to figure out how to work with men who consider bowties a daring fashion statement. Ruta works with companies to help them "keep moving forward, aside from government regulation." Her project has brokered deals with McDonald's, Starbucks, UPS, Bristol-Myers Squibb, and Federal Express.

Oily P.R. Stunts

Environmental groups are (mostly) thrilled to have made so much progress--FedEx drivers in San Francisco use hybrid delivery trucks, Starbucks uses fewer disposable cups--but are still understandably wary of the corporations' motives. Perhaps you too suspect that companies are making nice with greens only for the good P.R. And perhaps you suspect that they only make changes when there's a profit to be made. If so, you are almost completely right.

But there are better and worse ways to strike the balance between the demands of shareholders and the demands of Greenpeace. For an example of a company apparently trying to single-handedly save the planet through expensive public relations alone, one needn't look farther than the corporate darling of serious environmentalists and greenish consumers alike: BP

BP is first among many companies that have opted to do their environmental penance in the glare of the spotlight. British Petroleum (recently rechristened BP, following KFC's model in removing unsavory words from its brand name) has been much ballyhooed for its commitment to the environment. Most of the ballyhooing is being done by BP itself.

A gas and oil company with $225 billion in revenue, BP is part of an industry that will keep environmental advocacy groups in business for as long at it exists. Yet these days BP is styling itself "Beyond Petroleum" and declaring that it's "thinking outside the barrel." BP's Environmental Team has crafted an elaborate advertising campaign and rebranding effort, recently expanded to the Web. Its goal: to convince the world that a company that sucks dead dinosaurs out of the earth, turns them into gasoline, and delivers that gas to SUVs can also be environmentally friendly enough to use a green and yellow sunburst (or is it a flower?) as its logo.