Harnessing Economic Power with Green America’s Russ Gaskin

August 14, 2013

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored to have with us today Russ Gaskin. He’s the Chief Business Officer of Green America. Welcome to Green is Good, Russ. RUSS GASKIN: John, thank you for having me. JOHN SHEGERIAN: Hey, you know, Russ, we’re so thrilled to have you on. You’re going to be talking about a great subject and the great things you do over there at Green America, but talk a little bit about the Russ Gaskin journey. How did you become the Chief Business Officer of Green America prior to? Was this a dream at first always or tell us the journey leading up to this. RUSS GASKIN: That’s kind of a funny story. It’s a long story, so I won’t share the whole thing, but in 1992, I finished a project after college and I was gonna go into the Peace Corps and I went up to BC to do an internship because there was kind of a two-month waiting period, so they said, “Well, you should do some kind of internship. It’s gonna be good for your Peace Corps experience.” I came out to BC. I met with one organization, Green America, which was then called Coop America, and they basically offered me a job and the job was to become the first coordinator of the Coop America business network and it was basically the first try at an association of socially responsible business owners where we would help them access the national marketplace of consumers who wanted to support them and we would give them discounted business services and really help this sector of “green businesses” emerge and succeed, so I said, ‘Peace Corps? Eh, I’m gonna go to Green America,’ so that’s when I came there about 20 years and I’ve done various things working to grow the business network at first. I think I stopped running that when we were at a thousand businesses as members, and then in the mid-’90s, I took over a group called Social Investment Forum, which is basically similar but it’s a trade association for institutions and financial professionals that do socially responsible investing. JOHN SHEGERIAN: Perfect. So, now you’re the Chief Business Officer of Green America and I’m holding in my hand this fascinating 2013 Small Business Sustainability Report that says, ‘the big green opportunity for small business in the U.S.’ I assume this took a lot of work. This is a big think report, and I really want you to share with our listeners what does this report mean and is this a good sign and are we headed in the right direction? Tell a little bit about this big report that’s in my hand here. RUSS GASKIN: The reports of big green opportunity is actually a number of signs and I think the most important signs first are the green economy is growing really rapidly and when we say green economy, we’re talking about that segment or those segments of industries that really prioritize the needs of people and planet and so part of the report we actually look across all of the studies that have been done in the last several years across industries and document the growth that’s happening so when we look, for example, at the green building construction overall, in the past 10 years, shrank 17% but in the U.S. during that same period, and that’s a U.S. figure, at the same time in the U.S., the green building market increased 1,700%. That’s probably the most extreme example because of things like LEED certification for buildings, green building and construction has really taken off but every sector we’ve looked at; food, energy, finance, they were all showing the similar types of patterns of the green segments really taking off and taking market share from overall industry. JOHN SHEGERIAN: Russ, who should be reading this? Was this done for media purposes? Was this done for small business owners to read it and to realize they better get with the program? Was this done for young entrepreneurs who really want to jump into the marketplace but are looking for interesting new niches to get involved with? Who did you write this for and who is the expected audience? RUSS GASKIN: We did a study for ourselves. We wrote the report for everyone you listed so if you are interested at all in green markets, if you’re interested in small business and its needs and prospects, etcetera, you should be looking at this report. We did it, Green America, and we have two partners and I’ll talk about them but Green America did it because basically, our mission has always been to grow this “green economy” and so we’re always looking out there and trying to understand what are the incentives? What are the barriers at any given point in time that we can influence so that we can help catalyze the growth of this part of the economy, right? So, in this case, we were really interested in we were hearing a lot of things about how big enterprise firms were really embracing sustainability, both in operational efficiency — the top 50 Fortune companies have bloom boxes, for example. Almost all of them do and that’s increased their energy efficiency, etc. No small business has a bloom box and so there’s just a variance that we were really interested in and kind of concerned about like, what’s happening with the small businesses? Because they don’t have the resources to go out and do the research either on operational efficiency or on green markets, right? So, what’s happening out there with small businesses in terms of sustainability and the economy and the market opportunities and the operational efficiency opportunities. That’s why Green America did it because we want to understand what’s happening with small business owners, what’s not working, what is working that maybe we can build upon and what do they really need in order to see and understand and take advantage of these emerging opportunities and markets JOHN SHEGERIAN: Got it. For our listeners who just joined us, we’ve got Russ Gaskin on with us right now from Green America and for those who want to see this amazing report that I have in my hands, I haven’t read the whole thing but I thumbed through it. It is chock full of amazing information. Please go to www.biggreenopportunity.org. You can download The Big Green Opportunity for Small Business in the United States. It’s a great report. Talk a little bit about the trends here. Small business owners, are they now in the United States saying, ‘You know what, being green is good. I gotta embrace sustainability because it’s good business. It’s gonna bring me more business, more profits, etc.’? Is that the trend you’re seeing? RUSS GASKIN: Some are. We interviewed several dozen businesses. We surveyed 1,300 small business owners and basically, what we found was there was a pretty neat segmentation and we took the ones with the most green products and services. In other words, in their marketing, in their product and service design, they had really integrated sustainability and also, they had integrated sustainability into their operations so they were doing things around renewable energy, water efficiency, waste efficiency, energy efficiency and so we called the ones who had deeply adopted those practices the deep green. Makes sense, right? And, then we had a light green segment. We had three segments and each was about a third of our sample so in the light green segment, they were doing almost nothing and then we had a mid-green segment, so we found that the deep green segment, those businesses were performing better than the other two segments on almost every dimension that we tested including basic financial performance. JOHN SHEGERIAN: Gotcha, gotcha. What was your biggest surprise that you found in this study? RUSS GASKIN: The biggest surprise was when we looked across those three segments, they weren’t reporting any difference between the segments and profitability and we had seen studies, for example, that said well, some businesses that are embracing green products and services are getting a 19% premium on sales price so we were thinking well, what the heck? Why would the deep green businesses not be reporting higher profits? We did see across the whole sample, all 1,300 business, that they were reporting to us that their green products and services were more profitable than their non-green products and services but between these three segments, there was no difference in reported profitability and then we realized as we did the interviews it’s because these deep green businesses, they do have higher costs and that’s a reality because if you’re gonna do fair trade, if you’re gonna pay better wages for the stuff you’re getting, if you’re going to invest in renewable energy, these things cost money, right? JOHN SHEGERIAN: Mhmm. RUSS GASKIN: And, so if you’re going to redesign for a green marketplace, that costs money. If you’re going to buy more sustainable organic ingredients or whatever, that all costs money, so the good news was that, in fact, we didn’t see the profit difference being reported among the green segments so there was certainly, profit-wise, no penalty and the great thing is that these deeper green businesses are internalizing some of these costs that other businesses tend to push out so let’s let those producer communities worry about their schools, about their community development, etc. That’s the attitude of traditional business, but the green business owners were saying, ‘No, we want to pay fair wages and we’re gonna incorporate that cost of doing business into our cost structure,’ and they’re getting rewarded by the marketplace for practices like that. JOHN SHEGERIAN: Interesting. I’m on your site now and again for our listeners, it’s www.biggreenopportunity.org. Great website and I looked at your partner section. I’m right here right now and I see large great companies like eBay, Bank of America, UPS. Were they involved with the research? What’s their involvement and why are they on your website? RUSS GASKIN: We had two research partners in this project, Association for Enterprise Opportunity is the nation’s umbrella organization that promotes micro enterprise so that’s businesses of five or fewer employees and then Ecoventure International is basically an on the ground kind of market development firm. They go into, for example, they’re working with the State of Maryland and they’re identifying how to build value chains (is what they call them) at the local level so how do we build green businesses? Actually, we’ll meet market demand locally in Maryland and they’re very successful at doing that so we had two other parties with complementary interests and then each of us went out and basically found a corporate sponsor who had interest in the research as well so in our case, eBay sponsored Green America’s participation in this, basically funded our costs, etcetera. They’re very interested in the fact that this shift is happening in the marketplace and they have 17 to 20 million followers on eBay and they’re starting to see more transactions around sustainable products and services, more buyer preference around those things, so they’re really trying to understand the shifts and the incentives and the barriers because they’ve basically got a whole marketplace to themselves and they’re seeing the shift happen as well. JOHN SHEGERIAN: That makes a ton of sense. We’re down to the last two minutes or so here, Russ, and I just have a question for you. Are there any things that doesn’t jump out? This is a great report and really, I applaud all the great work you’re doing because this is the kind of stuff that we need to be a catalyst to help America reboot itself and jumpstart the economy with a lot of this green economy work that should be done but are there any nuggets of secrets that are contained here and that you want to share with our audience that came out from all this massive research and great research you did? RUSS GASKIN: Well, one nugget is that green consumers right now are different than mainstream consumers so any small business owner or any business that wants to be selling to that segment really needs to do their research and really needs to understand what they care about and what the notions of these greener, socially concerned consumers are because it’s not just about price, quality, etc. They’re gonna reward businesses that, like I said, are internalizing some of these social and environmental costs and basically taking responsibility for their total impact. The businesses, of course, need to get really good at communicating that stuff but they need to understand the shift that’s happening. Consumers or customers, they’re not just interested in bottom line anymore. They want more meaning. They want more integrated value in the stuff that they’re buying so that’s the shift that I think business owners need to start understand to capitalize them as emerging green economy. JOHN SHEGERIAN: That’s so well put, and I want our listeners to go to Russ’s great site, BigGreenOpportunity.org. Download this great report, The Big Green Opportunity for Small Businesses in the United States. Engage more. Russ, we’d love to have you back on the show and to talk about more of your great work over at Green America and for our listeners out there, this is, again, proof that you’ve gotta get involved with this green economy. Russ Gaskin, you are a sustainability leader and leader for change in the United States and truly living proof that green is good.