Big business courts the green queen
Companies that used to shun the nonprofit Rainforest Alliance are now actively soliciting its approval.
NEW YORK (Fortune) -- Twenty years ago, Corporate America and environmentalists squared off regularly and acrimoniously across the globe. Today, large companies can't stop talking about their green initiatives, and groups like Rainforest Alliance (RA) deserve a slice of the credit.
Founded in 1987, the New York-based non-profit is one of the world's largest sustainability certifiers, and has helped Fortune 500 companies like Kraft (Charts), McDonald's (Charts, Fortune 500), Whole Foods (Charts, Fortune 500), and Goldman Sachs (Charts, Fortune 500) view sustainability in a new light. Annual sales of Rainforest Alliance-certified bananas, coffee, and cocoa just passed $1 billion dollars, and RA is the world's leading certifier of Forest Stewardship Council (FSC) forestlands, which are managed under strict environmental and labor standards. Executive director Tensie Whelan recently sat down with Fortune's Matthew Boyle to talk about how far her organization has come, and what still needs to be done.
301 Moved Permanently
The Rainforest Alliance turns 20 years old this year. How have your focus and methods evolved over the past two decades?
We spent the first couple years figuring out how to address this issue of tropical deforestation that everyone was worried about, but no one was doing anything about. We started by saying, we don't want to do boycotts. People are cutting down forests for economic reasons, not because they are bad people. So how do we reengineer the system to address that? How do we use the market to simulate conservation and change? Now a lot of people talk that way, but back then nobody did.
How has Corporate America's view of environmental groups changed?
There's been a major shift in the past three to five years. Corporate execs who used to think that environmentalists were crazy whackos are now willing to sit down and talk to them. And environmentalists who thought that CEOs had horns are willing to talk as well. And it is more than just talk. There was an interim phase where companies just gave money to environmental groups to make themselves look pretty. That lasted for a few years, but now they are really doing something.
Can you give an example of a company that has gotten religion?
Chiquita (Charts, Fortune 500). They were under attack in Europe and the in the U.S. for labor practices, rainforests, and chemical use. And they saw their license to operate being challenged. The other banana companies had similar issues, but Chiquita decided to do something.
What about more recent work?
We have just announced, along with publisher Scholastic (Charts), that the new "Harry Potter" book will be published on FSC-certified paper. That's 12 million copies - that's huge. The paper purchase for it is 22 million pounds, the largest purchase of FSC-certified paper to be used in a single book printing to date. Also, all of Holiday Inn's restaurants - 1,000 in all - will carry Rainforest Alliance certified coffee. Whole Foods is working with us to certify the products they bring in that are not organic. And we just signed an agreement with Mars to work on sustainable cocoa in West Africa.
You're also getting into sustainable tourism?
Tourism is a major source of GDP for many developing countries. We are seeing growth in tourism to biologically sensitive areas, and governments are rightfully worried. The way we're tackling it is to work with tour operators - who package lots of small operations - to green their supply chains. If you go to an operation that is certified, it is guaranteed that they will pay attention to pollution on the beaches, the protection of animals, and take care of their workers. This is more than just not washing your towels in hotels.
What are some industries that might benefit from certification?
Right now there are efforts underway to establish sustainable certification in mining, livestock, oil and gas, and in biofuel crops like sugar, palm oil and soy. For livestock, we are in the process of developing a certification standard, and the plan is to have them ready by 2008 or 2009.
What big companies do you admire?
I think Unilever (Charts) is pretty incredible. I sit on their sustainable agriculture advisory board. They have really embraced sustainability in an exemplary way - from tomatoes to olive oil to fish - and they really don't talk about it.
That will probably start to change.
At DuPont, the CEO has really made it a key issue. (For more on DuPont, see "Chemical Reaction") Some companies say we will do a bit here and there, but DuPont has done it everywhere. And it's not reactive; they see it as a business opportunity.
Do a lot of American companies still say that they don't see sustainability as a business opportunity?
Yes. A lot of them aren't leading in a big time way. They are doing certain initiatives, or something specific with one product. But it's not across their business. Goldman Sachs is one company that is looking at sustainability across everything - from their investments to the companies they work with.
They are somewhere in between. It's trickled down, or should I say, has been pushed down, into certain silos. But it's a lot more complicated than they thought. Here's a funny story I heard from the companies we work with: The sustainability guys [inside global corporations] have been trying to get their American units to focus on this, but the [American] marketing people would have nothing to do with it. But when Wal-Mart made its commitment, the marketing people all of a sudden called up and said, "What is this sustainability thing?"