Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses
August 21, 2015
E. Freya Williams demonstrates how sustainability and profitability can go hand-in-hand by profiling nine powerhouse companies that do it right.
Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses by E. Freya WilliamsA decade ago, sustainability and anything green were all the rage in business until skepticism about the cost to profits got it shunted aside to the CSR department. Today, a new generation of green 2.0 companies have learned from the mistakes of their predecessors and are proving the skeptics wrong by converting sustainability into billion dollar brands. Natura, Chipotle, the Toyota Prius and Tesla Motors (as well as IKEA, Whole Foods, Unilever, GE's Ecomagination and Nike Flyknit) each earn more than $1 billion in annual revenue from a product or service with sustainability or social good at its core—not kale, but everything from airplane engines to shoes to cars and much more. These are not alternative companies catering to the granola set and trying to compete with the big boys. These are the big boys that every other company is now trying to compete with.
Acting sustainably and profitably have long been perceived as mutually exclusive, but the evidence now points to the contrary—if done right. In Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses (AMACOM; August 19, 2015; $27.95 Hardcover), E. Freya Williams investigates what has enabled some of today's most profitable companies—the "Green Giants" of business—to succeed where so many others have failed at converting sustainability into billion dollar revenue streams. She captures the significance of this inflection point in business history to distil the blueprint for these behemoths' success so others can learn from them and avoid the mistakes of their predecessors--for example we now know that "guilt does not sell" and that it's best to "lose the crunch," seek "male ego friendly, not just eco friendly," and aim for "preresponsibility" and "truthsparency."
One of the world's leading experts on incorporating sustainability into brands, including Coca-Cola and Kraft, Williams shines a spotlight on the "Green Giants," nine powerhouse companies that have succeeded in building wildly successful businesses while selling products and services designed to help consumers to live happier, healthier, more environmentally conscious lives. Ranging from entrepreneurial startups to business lines incubated within major multinationals, collectively, these organizations represent over $100 billion in annual revenue and outperform their competitors in the stock market by 11%.
Through original research and exclusive interviews, Williams has pinpointed six factors or traits that "Green Giants" have in common that account for their uncommon success and that set them apart from the first generation of green companies and their cautionary tales:
- Iconoclastic leadership, marked by an inner sense of conviction, the courage to stand up and change things, commitment, and a constructive contrarian streak.
- Disruptive innovation, marked by embracing counterintuitive ideas, engaging problem solvers, and striving to make products better, not just greener.
- A higher purpose—like Unilever's "To make sustainable living commonplace" and Chipotle's "Food with Integrity"—which, paradoxically, spurs profits.
- Built in, not bolted on—that is, integrating sustainability into core business strategy and structures, including governance and cost.
- Achieving mainstream appeal by seeking to satisfy the needs or desires of wide-ranging customers, rather targeting a small niche of true green believers.
- A new behavioral contract, putting buzzwords like transparency, responsibility, and collaboration into action, through consistent behavior, to build their brand.
By adopting these strategies, green giant companies have grown remarkably faster than their conventional counterparts. Chipotle now outperforming rival Burger King is just one example. They've proven that sustainability is not a fleeting fad but an escalating business imperative. Based on UN estimates, the market for "green trade" will grow to 2.2 trillion by 2020. This represents an opportunity no business can afford not to seize.
"To build a green giant, you need to embrace sustainability as a business reality, a business opportunity, and a business driver, and then you need to build it into the core structures that drive your business," writes Williams.
Packed with specific strategies, practical steps, and examples from the Green Giants plus "Next Billion" companies like Patagonia and Warby Parker who are on their way, Green Giants is a book of urgent concern for all entrepreneurs, brand marketers, and business leaders.
Now is the window of opportunity to ensure that we—and the brands we build—are on the right side of history. Green Giants will lead us there by example.
ABOUT THE AUTHORE. Freya Williams is CEO of Futerra North America. Futerra is a global sustainability communications and consulting firm whose clients include Danone, SAB Miller, Estee Lauder, Kering, OVO Energy, AXA Insurance and Unilever. Throughout her career she has advised these and other organizations including Coca Cola, the United Nations, SAP, Tetra Pak, The Economist, Waste Management, Kraft and many others on how to incorporate sustainability, responsibility and social good into their brands, as well as brand sustainability and CSR initiatives already in place.
A veteran of the communications industry, Freya is the strategic mind behind brand initiatives and campaigns including Coca Cola's PlantBottle, Hellmann's switch to free range eggs and the awardwinning Copenhagen campaign in support of the United Nations at the crucial COP15 climate change conference in Copenhagen (the campaign recruited 6 million supporters in 60 days, 70% of whom had never joined a climate movement before).
An early pioneer of the modern sustainable business movement, Freya's experience has given her an insider's perspective on the trials and tribulations of incorporating sustainability into a business and the opportunity to experience the movement's successes and failures firsthand. Freya has built up a wealth of data on the business case for sustainability as well as an instinctive sense of what works and what doesn't. She is also intimately familiar with the challenges of forcing change through large, complex, often siloed organizations where skeptics outnumber believers—and has developed strategies and tools to overcome those challenges. She has built an exclusive network of senior marketing and sustainability executives, many of whom are interviewed for this book. Freya has the experience of building her own sustainable business as cofounder of OgilvyEarth, the sustainability and CSR communications practice within the global agency network Ogilvy and Mather.
Freya's sweet spot is making sustainability relevant to the mainstream consumer. The topic of mainstreaming sustainability was introduced to the world in Mainstream Green: Moving sustainability from niche to normal, the influential paper Freya coauthored in 2011. Since then, mainstreaming has become one of the dominant dialogues in sustainable business and Freya is sought out for her expertise on the topic. Green Giants takes the ideas explored in Freya's research to the next level, showing that the idea of mainstream sustainability has moved from an ambition to a reality, and validating the argument that sustainability does have mainstream potential, if done right.
Freya's work has been featured on Marketplace, and in The Financial Times, Newsweek and even The Onion. She is a regular public speaker who has lectured at Columbia, Wharton, Harvard, and The Economist Innovation Forum. Her work at OgilvyEarth was awarded with a Cannes Lion for marketing excellence, a David Ogilvy award for innovation in market research and an Atticus Award for outstanding thought leadership for her booklet From Greenwash to Great: Great Green Marketing without the Greenwash.
Prior to founding OgilvyEarth, Freya spent 10 years as a senior brand strategist, advising major global blue chip clients as diverse as Dove, Goldman Sachs, Hershey, Kodak and American Express on their brand and marketing strategies. A native Brit, she has lived in the US since 2000.
The "billion dollar brands" idea made its debut in an awardwinning submission to the Admap prize, the ad industry's most prestigious essay competition. Freya's mission, as her career showcases, is to help move sustainable business, behaviors and brands into the mainstream. She lives in New York and you can follow Freya on Twitter.