Getting The Green Thumbs Up

Two weeks ago, Newsweek released its 2009 Green Rankings, rating America’s 500 largest companies for environmental sustainability. Not surprisingly, food and beverage companies rated below the curve. In comparison with finance, insurance and tech companies, it seems rather intuitive that companies in the manufacturing sector would have a significantly greater impact on the environment.

Though Coca-Cola Enterprises was ranked the greenest food and beverage company on Newsweek’s list, it was still 36th when compared with all 500 companies spanning 15 sectors. And while it may be disheartening to learn that food companies were not just out-greened by techie nerds and neck-tied bankers, but also—when the scores in each sector are averaged—by oil and natural gas companies too, a deeper look at the numbers reveals some interesting trends.

The Newsweek list uses three categories to determine its Green Rankings—environmental impact, green policies and reputation. The first is typically a losing game for food and beverage companies. A manufacturing plant will always have a more substantive impact on the environment though that impact may be somewhat offset with green policies.

A look at the numbers reveals that the food and beverage industry has chosen to green up its act in regard to green policy. The Newsweek methodology in this area took into account corporate policies that had been adopted to mitigate negative environmental impact. Unlike the first category, the adoption of such policies is completely at-will, undetermined by the inherent function of each industry. Food and beverage companies averaged a substantially higher score on the green policies scale than the overall average.

The final determiner in the Newsweek study was corporate reputation among industry-specific CEOs and insiders. Such a factor essentially rewards PR points to companies who best publicize their efforts towards sustainability. Awarding points this way is not a problem specific to the Newsweek list, but rather Newsweek seems in step here with the growing incentive for companies to greenwash their environmental policies—spinning rather small measures or even basic business practices as green in order to garner positive media attention.

I recently had the pleasure of spending a day in Kettle Foods’ Beloit, Wisconsin potato chip manufacturing plant. Kettle is a company that is truly committed to environmental sustainability and stewardship. From responsible energy sourcing to large-scale recycling programs and over-all waste reduction, Kettle has employed sustainability initiatives for which it has been recognized as a leader in environmental responsibility. And the kicker? These initiatives have had an overall positive effect on Kettle’s bottom line.

While most of Kettle’s sustainable practices have required an initial capital investment—whether retrofitting company cars to run on refined used cooking oil or installing wind turbines and solar panes to reduce the amount of energy sourced from the grid—nearly all of those investments, through a reduction in utility and material costs, will pay off over time. Many of them already have. This means that Kettle is building tremendous goodwill among its customers—and the company has the wind-powered-potato-chip-plant fan letters to prove it—by effecting a net reduction in overall operating costs.

And though greenwashing may be a media-savvy practice now, I predict that it won’t fool the masses—or media—for long. Talking with the employees at Kettle, there was a clear enthusiasm for the green practices they had adopted and a conviction that they were doing the right thing by their customers and by the environment.

Food manufacturers have already gone a long way toward offsetting the environmental impact inherent to their businesses. And scoring PR points or earning goodwill for such initiatives isn’t greenwashing if those initiatives are having a positive, measurable and real impact on the environment. Once the sustainability hype has died down a bit and the public is more astute in evaluating what is green and what is not, companies like Kettle that are making a real effort to mitigate their environmental impact won’t need to scrap quasi-green policies for real ones.

In the meantime, food companies shouldn’t be afraid to tout their green initiatives.

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