By Reed Shapiro
Two weeks ago I was lucky enough to join the business, non-profit, and individual members of 1% for the Planet for the 3rd Annual Global Summit conference in Portland, Oregon. As I pursue a degree in sustainable business management, there are few places I can think of more fitting than this venue to have an ear to the ground on emerging business best (and positive) practices.
For those who don’t know, 1% for the Planet is an initiative started in 2002, by Yvon Chouinard—the founder of Patagonia—to donate 1% of sales revenues to environmental and social-justice non-profit organizations on an annual basis. 1% for the Planet focuses on raising the percentage of philanthropic giving to the environment above its measly current contribution of 3% ($11 of $390 billion given annually). 1% delivers climate action funding from over 2,100 businesses to over 3,800 non-profits making positive environmental and social impacts.
In 2018, the 1% network drove over $25 million in contributions to environmental stewardship, conservation, and a host of other beneficial programs. The network is made up of a range of everything from owner-operator solo consultancies to billion-dollar companies like Patagonia. This diversity shows up in the feel of the conference, and the milieu in which this mission-driven movement races into the future. Some might say this holds promise for the future of charitable giving. As Yvon put it the first night of the conference, we shouldn’t be thinking about environmental giving as “charity,” but rather as the cost of doing business, or “our rent,” for living on the planet.
Our Role in the Show
For the past two years, Carbon Credit Capital has been invited by the 1% team to help them offset the emissions associated with putting on an event with global attendance. The 1% team purchases carbon credits against the emissions for flights, hotels, food, and taxis. At the conference, announcements are made to encourage the 350 attendees to do the same.
At day’s end, after the keynote speakers, panels, and workshops, there’s me with a cellphone, Square credit card reader, and a menu of carbon offset “bundles” for everyone to choose from. Attendees are broken down into four regions (Local, South West, Mid West, East Coast), each with geographic boundaries and generic carbon emissions calculations about maximum and minimum flight or car miles from within those boundaries. Individuals and companies that purchase these carbon offset bundles over the three days of the conference (companies if all attending employees are covered) is recognized as a carbon-neutral attendee (both individually, and as a company).
Last year, the 1% team and a slew of attendees voluntarily mitigated over 19 metric tonnes of CO2-equivalent (over 42,000 pounds of emissions). This year, with this year’s increase in attendees, the total is 16.29 metric tonnes before including the 1% team, which last year contributed over 8 metric tonnes themselves. Perhaps this number can grow more with retroactive help from the 1% team.
Playing Part of Building a Movement—The Bigger Picture
Ultimately, while I enjoyed working with new partners and clients and making a name for myself as “the guy in the blazer,” there is a much bigger story to tell about what is happening in this network of small, medium and large businesses.
Many conferences feature sponsors paying big bucks to talk about their great insights to a group who over-paid to get someone else’s success story that was specifically crafted so you can’t glean enough to copy that success. A different dynamic prevailed in Portland. Over the course of the 72 hours, it became clear that all of it designed to give the rest of us a spot at the table in ways that were accessible to us, and replicable for others. Here is an example.
Caroline Duell unwittingly created a product, that drove the birth of a company, and became the force behind banning toxic ingredients from sunscreen internationally. All Good started out as Caroline’s personal healing balm, made with herbs she grew herself. Over time, she had realized that two specific chemicals (avobenzone and oxybenzone) ubiquitously used in sunscreen were disrupting the genetic health of coral reefs and humans alike. Just one or two drops of either chemical in a body of water as large as 12 Olympic swimming pools is enough to kill a reef, let alone mess up our own endocrine systems.
All Good’s story is one of an individual creating a good product that sparked a values-aligned community, one which put a premium on not harming its users, and its users’ environments. As this community grew, so did its collective impact. She gained a serious following of fans of her goop. Soon, All Good was recognized as one of very few companies in the world not using these toxic chemicals. It became the posterchild for non-toxic sunscreen and personal care products.
In July of 2018, Hawaii banned the two chemicals (and therefore the sale of any product containing them). This blow to companies that rely on the compounds was even backed by an endorsement from the FDA in February of this year. THE FDA, the same organization hesitant to require labeling GMO foods. All Good Products fomented a wave that swept across a state, one of the historically most stodgy and dubiously governed federal agencies, and now the world.
There’s Something Bigger, Happening Better Here
All Good is a small company—just one company, a proverbial drop in the bucket of firms and cash flows and global financial markets—started and run by a woman whose house-rocking speech sounded more like The Dude than Jamie Dimon or Simon Sinek. But that drop in the bucket supports lobbying and advocacy for environmental and conservation legislation, and habitat protection by giving one percent of its revenues to non-profit organizations committed to those causes. Duell says it all happened because of better business—it all started with the idea to create a healing product, not with dreams of billion dollar profits.
Yvon Chouinard, in a one-on-one conversation with Kate Williams, the CEO of 1% for the Planet, said much the same. Patagonia was born out of his need for good climbing gear, in an arena where bad climbing gear could get you killed. As it happened, a lot of other people wanted good gear to keep them safe and prepared, as well—go figure. Patagonia is, by any definition of the word, a successful company. But Yvon considers their contribution to safety and quality, as well as their stewardship of the environment and the natural resources they use to make their real products. These are higher on the list of things he’s proud of than their billion-dollar balance sheet. Running the company this way has made what could have been “sticky situations” on ethics and impact no-brainers.
Most companies would think that donating millions of dollars in sales from Black Friday is a terrible idea. Yvon thought it was a great way to stand up to the Trump Administration’s election and a rebuke of the Paris Agreement. As the announcement went out, the projected sales of $2 million grew to over $10 million. Yvon had been a little concerned about the money they might miss out on. However, in the aftermath of that day and in the following months, Patagonia realized they had picked up a significant percentage of new customers, who became repeat buyers. The money Patagonia gave away from Black Friday ended up being a cheaper marketing investment than Patagonia’s typical spend to acquire new customers per person. A one-time stunt, after all the hoopla, resulted in sticky business and recurring accounts and, them’s the facts.
Marc Randolph, the co-founder of Netflix, addressed the conference the next morning. He gave his recount of how Netflix became what it was after being $50 million in the hole and laughed out of a meeting at Blockbuster. It turns out Yvon Chouinard, Caroline Duell and Marc Randolph all found that the product, service, and impact of their firms were ultimately higher considerations than the business part of their companies; this holistic approach works. Netflix, which Marc noted was founded (and still operates) on the premise that “No one knows anything,” is now valued at over $160 billion, and Blockbuster is, well, busted.
This is a much different lens than, “we’re going to make this product cheaper than those guys, market the hell out of it, and make a boat load of money.” This is a, “we’re going to do it right, do the best we can, and the fact that it makes money is a by-product, or an afterthought” lens.
That Doesn’t Sound Like the Right Way to Make Money?!
So, a bunch of environmentalists got together and shared stories. Great. Who else cares? The lesson is that the conventional wisdom that spending money without a direct, project-related return is always a bad idea may really be seeing its day. NYU Stern’s Center for Sustainable Business has found that products marketed as sustainable in the CPG sector grew 5.6 times faster than conventional products from 2013 to 2018. Of course, many “green” bandwagon investments are hollow and susceptible to greenwashing. Blindly funding a cause that is tangential, or strapped-on to your brand is rarely good business.
Ultimately, consumers want a healthy body and mind, and a healthy planet on which to live healthy lives. While the ESG investors, funds, and State pension plans may still be afraid to spend significant portions of their portfolios on what they consider symbolic gestures, the 30-50% of the consumers their portfolio companies depend upon for growth as a company eat it up. This is the world we live in now: people live, sleep, eat, and shop their values in mainstream numbers. Companies slow to the game will be dining on their faster-moving competitors’ dirt—if they are not already.
Brewing Scalable Positive Impact
The 1% for the Planet network is different from corporate philanthropy. The Global Summit was a convening of businesses, non-profits, and individuals from around the world deadest on making a positive impact through their actions on this earth, no matter how big a commitment, or small a contribution. This isn’t a club, literally, anyone can join. And with every new 1%-er, or B Corp comes not just a check to a charity, but a platform to co-create positive impact on our own terms—the type that consumers want, the world needs, and that the smartest of us would be wise to study. If the keynotes from this conference are any indication, when your business aligns its values, passions, and key campaigns with what they feel is right, you will not be disappointed with your financial performance.