Just as there is money to be saved, so is there money to be made. As Fast Company reported in November 2007, General Mills sells its oat hulls, a Cheerios by-product, as heating fuel, earning more than it used to spend to dispose of them. Customers include U.S. Steel and the University of Iowa. And according to the National Homeowners Association, the market for green (energy-efficient and low-waste) buildings hit $7.4 billion in 2005 and is projected to reach $38 billion by 2010. Enterprise Rent-A-Car uses energy savings as a differentiator; 334,000 of its vehicles, about half its fleet, get more than 28 miles per gallon. (This is nearly 10 times the number of fuel-efficient cars and trucks offered by Enterprise’s closest competitors.) Major retailers, including Costco and Wal-Mart, now favor suppliers that can demonstrate prowess in sustainability.
Perhaps most important, the companies that figure out how to escape the bubble early — how to contribute to an infrastructure or create a product line that embodies ecological principles and cuts greenhouse gases dramatically — will end up shaping the future of their industries. Toyota, Honda, Sony Europe, GE, Shell, and many other companies are reorienting themselves this way. GE initially committed to doubling its R&D investment to $1.5 billion for its suite of Ecomagination technologies, which include wind power turbines, energy-efficient appliances, desalination systems, and low-emission aircraft engines and locomotives. The company has since increased those investments substantially. It is well ahead of its growth plan to double revenues to $20 billion from $10 billion for that growing product category over five years, and by the first quarter of 2008, total orders since inception had surpassed $70 billion. A related investment division, GE Energy Financial Services, announced in early 2008 that it had raised its 2010 renewable energy investing target by 50 percent to $6 billion, and had just topped $3 billion in actual investments. It’s notable that many of the division’s investments in wind and solar power, landfill gas, electricity grid efficiency, and lithium-ion batteries go to a wide range of small and midsized companies, not just its own projects. GE’s investments are improving the overall growth prospects for the renewable energy and clean-tech sector.
All of these examples show that learning to live beyond the bubble can be exciting, profitable, and strategically powerful. However, it is not easy. In many industries, no clear guidelines for change exist. It is up to managers to figure out how to balance the long-range imperatives of technological and operational change with the day-to-day imperatives of short-term business. No one can take on a challenge like this alone, which means that an effort starts with talking to other people — and often ends there. What seems obvious to one person is far from obvious to another, and one group’s urgent necessities present questionable premises for others. Given the immense uncertainties and risks involved, the only thing surprising about such communication breakdowns is that we still view them as surprising. Sustainability innovators must learn to foster engaging conversations that build mutual understanding and the ability to work together.
Executives at GE, for instance, started by asking questions about how to expand their various businesses in the long term, a move that was closely tied to the company’s traditional emphasis on growth and innovation. After asking current and potential customers about their vision and needs for clean energy and clean water 15 years into the future, they saw that meeting these needs represented significant opportunities for GE. But they found they had limited credibility in selling high-efficiency electric motors, lighting systems, and equipment to customers unless they could answer with a resounding “yes” the question many customers asked: “Are you using these products in your own facilities?” That, in turn, led GE to a wave of rethinking its own processes and practices, new investments, and major remodeling.