Addressing Resource Scarcity with ‘The Big Pivot’ Author Andrew Winston
April 23, 2014
JOHN SHEGERIAN: Welcome back to Green is Good and we’re welcoming back for a return visit, Andrew Winston he’s just written a new book, The Big Pivot, if you remember he wrote Green To Gold, welcome back to Green is Good, Andrew Winston. ANDREW WINSTON: Glad to be here. Thanks for having me. JOHN SHEGERIAN: Hey thank you for being back and for our listeners who didn’t hear the last show when you were on years ago, and I’m so humbled Andrew because you helped make Green is Good one of the most listened shows out there, you were one of my first guests and I’m so glad you came back. Share a little bit about your journey leading up to becoming one of the great sustainability and green thought leaders in the world. ANDREW WINSTON: Thanks those are your words not mine. But I appreciate that. JOHN SHEGERIAN: I’m allowed to say that. ANDREW WINSTON: I spent the first half of my career in traditional business roles. I was in consulting at Boston Consulting Group right out of college and then was in media companies and then went through the dot com crash and was trying to find myself after that part of my career and wanted to connect my business knowledge and training with some passion and some values that I had. And I cared about environment in a really broad sense, not really in the tree hugger way, frankly, but in a practical sense of kind of resources, and how do we operate on this planet and are we able to provide enough for people being prosperous on the planet and I just kind of had a sense back in 2000, 2001 that things weren’t going right and I started reading some great books at the time, the cannon of kind of green, and sustainability and just decided I needed to shift what I was doing. And went back to school and got a degree in environmental management, and I already had an MBA, and I kind of put those two together, and started working with a professor there, Dan Esty, and we wrote Green To Gold, which came out in ’06, and that kind of kicked off my career in this field. I spent a few years researching and writing that book and talking to companies all over the world, and trying to understand what green business meant. And I’ve spent the last 8 years continuing that quest. To try to understand how can companies make sustainability part of their business and why should they, and I think the case for it has only gotten more compelling, and that’s kind of the reason for my work now. JOHN SHEGERIAN: Andrew, again like I said, I was so humbled when you came on years ago when I first started this show, maybe it was 4 and a half, 5 years ago to talk about Green to Gold and for our listeners out there who haven’t read it yet again, again Green to Gold is one of the must reads for sustainability, anything you’re interested in with regards to sustainability, and of course its available at Amazon and all the great bookstores around the world. But now you’ve written The Big Pivot, and I’m so excited for you to share with our listeners, what does this, you’ve evolved, the world has evolved, the sustainability revolution has evolved, what is the big pivot, and who exactly needs to be pivoting at this point? ANDREW WINSTON: Yeah it’s a good question in some sense, everybody needs to be pivoting that’s really the point, and I think, Green to Gold, I’m sure everybody listening will go pick it up if that haven’t at already, but Green to Gold is fundamentally the story of why green is good for business. And how you can save money, and innovate, and drive revenues and build your brand, and all the kind of basic business case for what people call sustainability. The Big Pivot is really a kind of leap from there, and takes a much, I think, harder stance about how fast we need to go, and where we need to head. Because I think what’s happened in the last few years is the facts on the ground have gotten more stark, and just this week there’s the new report out from the Intergovernmental panel on climate change, and my take on the problems that we face, the big challenges, are so large that the world needs to change in a very fundamental way, and I think business can lead that change. In the book I kind of narrow down the big forces coming to bear on society and business to a few, and so the subtitle of the book is about how we do business in a hotter, scarcer, more open world. And so it’s about those three things, hotter, the climate is changing, making more extreme weather, and forcing change on how we live our lives. Scarcer is about resources, about the price of commodities, and the price of everything that goes into our economy and how it’s basically, continued to rise for the last 10, 15 years and will probably continue to rise. And then transparency is just this incredible move towards openness, and knowledge, and data, about everything going on in our lives, and in companies, value chains. What happens in a supply chain, or a factory, or across the world, is now kind of open to public scrutiny. So those are kind of the pressures. Those combined tell me we need a very big pivot. We can kind of talk about what that means. JOHN SHEGERIAN: You know, the other night I was watching one of the rising common shows out there it’s actually new, Vice. And they had the whole climate change issue, and how the velocity of climate change is, we’re actually ahead of schedule, and it’s picking up. And you talk about resource scarcity, both in commodities, and just in stuff like water. So, Andrew, help me, and the listeners understand, who has the onus here, where is the burden, is it governmental, is it business, is it intergovernmental and business, where do you posit that in your book, The Big Pivot? ANDREW WINSTON: Yeah, well look, my work is on the private sector. That’s always been where I focus. But I think there’s kind of a rational, kind of practical, kind of logic to that. Which is, society is basically, government, business, private sector, and citizens. There’s kind of this three legged stool. Everybody needs to change, in pretty fundamental ways. But, I think I’m not going out on a limb to say the government, at least in the US is kind of broken, at the federal level, we can’t get much done or passed, that means it’s hard for global negotiations to go anywhere on things like climate change or price on carbon, and I think consumers, we care but we’re busy. Right? Our lives are busy, and we’re shown for 40, 45 years of Earth days and all these missions to make us do 50 things that save the Earth that, we’ll do things if they’re easy or they’re cheaper? We have a lot going on right? We’re trying to raise our kids and lead our lives, and it’s kind of hard to know what the right choice is all the time. I really believe it comes down to business, as the sector with tremendous power and resources. The fortune 200, the 200 biggest countries in the world are about 30 percent of the global economy. Just those 200, let alone the biggest 1,000 companies. And they have tremendous political power, that’s not a surprise. And they decide, in a way, what products are made, and the innovations that drive how we live our lives. So I put the onus on business, because I think we have the resources, and skills, and talent to do it. And we have the technologies that can help us get there. And there is a much cleaner, much greener, world, with energy that’s vastly lower in carbon that’s mostly renewable energy. And with products that are very low in toxicity or nontoxic that we recycle and reuse and bring back into the kind of cycle of products development and use materials over and over again. There a couple of kind of key basic ideas of what a sustainable world actually looks like, and I think business is already on the path to building that. JOHN SHEGERIAN: What I love about your writing, and I’ve read Green to Gold, is that you give so many real life examples. So talk a little bit about what you mean about businesses stepping up to the challenges of resource scarcity, climate change, and how they can innovate and continue to innovate to help us out of the mess that we’ve gotten ourselves into, and lead us to a more sustainable planet. What do you put in The Big Pivot about this issue? ANDREW WINSTON: Right, well The Big Pivot is fundamentally—I lay out 10 key strategies that I think are basically required. About how business needs to operate. The question I’m trying to answer in the book is if you believe these problems are as deep as they are, and as fast moving as they are, what does that mean for what a business needs to look like. Not necessarily what capitalism as a whole system needs to look like, but what business need to look like within that to help bring about the changes within our system. And I lay it out in a few kind of big buckets, and the first is about the kind of vision and the direction and the way companies see the future, and that breaks down into things like fighting short term pressure. All the pressure from Wall-Street and from investors on quarterly performance. And so companies have to kind of proactively push back on that. And talk about the medium and longer term and talk about the things they need to do that take some investment and some thinking. And that’s all kind of innovation it’s not even just necessarily sustainable innovation, just the ability to invest in our future. And it also means companies need to set goals differently. Set them based on science, based on how fast we need to move. And we are seeing a lot of companies do that. You know, there’s a growing number of big companies that are investing a tremendous amount in renewable energy, that are moving their business to 100% renewables. Ikea is one retailer I love that is on its way to 100% renewables. Apple is actually almost at 100% renewables for all data centers and offices. Wal-Mart doesn’t have a huge percentage of renewables, but is the largest buyer of renewables in the country because it’s so big. They have solar on I think 1,300 stores. And all of this is good for their business, it’s actually lowering their cost. This isn’t some huge expense. And there’s a handful of other really big companies that have set their goals kind of at that level. At that’s let’s be 100% renewable by 2020 or 2025, or let’s cut carbon by 30 percent in the next 5 years. This is the kind of motion we need to see. And that drives tremendous change in all of the industries that support that. It drives the costs down of solar and technologies that improve fleet efficiency in trucks or store efficiency with lighting because these companies are creating big markets for these new technologies. And that helps all of us. JOHN SHEGERIAN: And that helps all of us. For our listeners out there who just joined us today we are so honored to have back on the show Andrew Winston. Please look at his website www.AndrewWinston.com. His two books, Green To Gold, and now The Big Pivot, available on Amazon.com, BarnesandNoble.com and finer bookstores around the United States and of course we have listeners around the world. Buy them, read them, open your heart, open your mind, we all have to be part of the solution. Andrew, let’s go a little bit about—it’s one world, and we all have to be part of the solution obviously. So you talk about shareholders that are clamoring for really short term gains, short term benefits. Dividends to the stocks that they invest in. You’re saying that they should be encouraging leaders of big corporations to think longer term, because ultimately it will benefit them as citizens of the United States and citizens of the world that we live in. Talk a little bit about other public perceptions. You mentioned some great brands, iconic brands, let me see—Ikea, Apple, Wal-Mart, and so many others you’ve written about. When you’re studying, when you’re learning, when you’re understanding, the state of the human condition, do people really care? Does the man or woman on the street really care if companies are focused on sustainability? Or do they just want to have their good tasting Big Mac? Or a great tasting coffee at Starbucks? Do they really if these companies are getting more sustainable or not? ANDREW WINSTON: Well now we’re getting philosophical I suppose. I think the data on that is somewhat mixed. But I think in some ways, nothing’s changed in 40 years. I think the percentage of people who really buy their products and think hard about green in every choice and will pay more for green, because in recent history that has been the case for some products. It seems like you have to pay more at times. That percentage is kind of single digits and has been for a long time. But what has changed I think kind of profoundly is the group of people that want the products they buy to be responsibly made. To be obviously non toxic and safe for them and their family. But responsibly made in that the people who made it throughout the value chain were paid a living wage. That they know there weren’t horrible working conditions. That the carbon footprint is low. I think that percentage of people who want those things so long they don’t have to pay anymore, all else equal. Same kind of quality, same price. They want to know that that’s better. That’s growing to like everybody. The percentages in surveys show that is 40, 50, 60 percent of people kind of growing all the time. And I think especially among millennial and kind of the next generation, the very new moms today and new parents and kids coming out of school, they just have a deeper understanding that there is a global crisis on some of these issues, and that we need to change our behaviors. I do think we are seeing that, but let’s be honest, people don’t want to spend more if they don’t have to. I think it’s sometimes the discussion of what do you mean by more. If you pay more for a LED light bulb up front, you’re saving money over time. So it actually isn’t more. If you pay more for organic food, potentially, that might be better for you and your community. And that has benefits that aren’t easily measured. I think we have to think kind of broader about value. And I talk about that in the book for companies, thinking much broader about what is value, and what are we getting out of an investment. And I think that’s true for us as a consumer as well. JOHN SHEGERIAN: And I agree with you about the millennials. I have a 27 year old daughter and a 21 year old son and they couldn’t agree more with what you just said. They are very concerned with what they’re eating, what they’re drinking, how they’re living, and with regards to the brands that they associate with, and with regards to the millennials of course, Andrew, we happen to be the digital immigrants, you and I, but for the millennials, they’re the natives now. The digital natives. So share how you explain and layout in The Big Pivot the issue of social media and what that’s done to corporate transparency and how is that affecting the sustainability movement? ANDREW WINSTON: Yeah, I think it truly is both, I guess for good and bad from a company perspective. I think I’m an early digital native, I’d like to think that. I’m Gen X. I’d like to believe that I was little when Pon came out and the first data but, yes, I agree I watched my kids, and last night my 10 year old was on a Google Hangout with friends, and I realized I don’t even know how to do that. JOHN SHEGERIAN: Well you’re younger than me so that’s right. I’m the immigrant and you’re going to be—we’ll give you that. I’m going to give you that one. ANDREW WINSTON: I’m an early immigrant. Anyways, I think that the transparency pressure is both, what I lay out in the book when I said earlier there’s hotter, scarcer, most open, there’s kind of a huge opportunity along with each of those. With hotter there’s clean tech. With scarcer there’s kind of the move to innovate and these markets in the developing world, and then in transparency you’ve also got all the open innovation opportunities. This ability to ask people, your customers, your consumers, your employees for help thinking about big issues. And you’ve got you know, crowd funding, we just had a movie come out, Veronica Mars, and I mentioned in the book that was completely crowd sourced right. It was on Kickstarter. And you’ve got the ability for people to come together and innovate together, create pools of pressure on companies to make change happen. Like change.org. There’s some great examples of even like a group of 4th graders getting together and pushing Crayola to develop a recycling program for their markers. They just didn’t have them. And 9 year olds wrote in and said “hey, we really like your markers but we can’t recycle them.” And my point kind of tongue in cheek is that companies need to figure out these issues before a 9 year old does right. And this allows them to kind of listen. Social media allows you to listen. Twitter allows you to listen. And say what are the issues we’re not thinking of? Along our value change that create footprint issues that create sustainability problems? And then, let’s talk to people about how we can solve them together. JOHN SHEGERIAN: The climate economy is potentially weeding out powerful corporations. What do you mean by that, and whose going to have the toughest time adapting? We’ve got about 3 minutes left but I want you to share your thoughts on that important issue. ANDREW WINSTON: Well look, we’ve got to be honest with ourselves. We’re talking about a massive transition I think fairly quickly away from carbon. Unless there’s some surprising technology advance and carbon sequestration or placing carbon in other products or something. Coal is in trouble. I think everybody knows that. I’ve talked to utility and energy executives and CEOs, and I think they know coal is going away. Natural gas is a huge debate in this country. Whether it is a bridge in some way but it has to be much cleaner. It burns much cleaner than coal, but right now there’s leaks in the process. There’s the fracking concerns about water and about just use of land. It has to be done in a much better way I think for it to be a good bridge. But we’re going to see change. And I know that sounds cold, but we have change in industries all the time. And there are early leaders in technology that disappeared. Like Lain Computer and there were horse and buggies once. And there was electric typewriters. I grew up in an IBM family. IBM made the transition from typewriters to computers but some didn’t. There’s going to be changes and the opportunity from this, to every other sector, that relies on energy and that is going to drastically cut energy use and cut fossil fuel use. That just saves tremendous money and provides amazing resilience for businesses if they have their own power, they don’t need to worry if a grid goes down or if a hurricane rolls through, or if there’s a huge spike in energy prices. And that’s why you’re seeing some companies get it and move to renewables as quickly as they can. So think about all of the business that is built around that. We’re talking about multi trillion dollar industries in energy building, transportation, consumer products, finance, that are all going to shift. And that means amazing opportunities for those that make the shift. But there will be sectors or groups that don’t come along for the ride. And we have to figure out what does that mean for those people in our society and how do we help them. But we can’t stop that progress. JOHN SHEGERIAN: Got it, got it, and for our listeners out there again, please buy Green to Gold, The Big Pivot, Big Pivot is Andrew Winston’s new book, radical practical strategies for a hotter, scarcer, more open world. These books will truly, truly, change your thinking. Open your heart, open your mind. And help us all, become part of the sustainability solution. Andrew Winston thanks for coming back on Green is Good for our listeners out there, www.AndrewWinston.com. Andrew, thank you for being a wonderful sustainability evangelist and ambassador. You are truly proof that green is good.