'Green Giants' Prove That Sustainability Sells

Our 21st-century economy is being reshaped by consumers searching for "in me, on me and around me" products -- solutions that make daily life more sustainable.

Fast food restaurants like McDonald's are confronting stagnant revenues as consumers search for foods that deliver on taste, price and health. A recent Gallup poll found that 73 percent of Americans want a strong emphasis on renewable energy.  In fact, solar now represents over 50 percent of new power generating capacity in the U.S. As the millennial generation comes of age, they are placing an increased emphasis on corporate social responsibility in deciding what to buy and who to work for.

The cumulative impact of these mega trends is a multitrillion-dollar global Green Economic Revolution driving the emergence of a new generation of green companies. These companies are using innovations in clean tech, organic agriculture, artificial intelligence and the Internet of Things to deliver products that align value with values. Think autonomous cars, net zero energy buildings, and farm-to-fork restaurants as examples of how sustainability innovation is reshaping our economy, the environment and individual businesses.

The question is: How does your business harvest this growth opportunity?

Freya Williams, CEO of Futerra North America, addresses this question in her new book, "Green Giants." Her book profiles nine companies with green products that achieve $1 billion or more in annual sales.  The result is a compelling set of business cases that prove sustainability sells.

Green giants prove sustainability sells

Winning customers and growing sales is the bottom-line business case for sustainability. Numerous companies are already taking advantage of this strategy.

Target: Target’s Made to Matter line encompasses approximately 100 products in food, baby, beauty and household categories. These products are defined by their reduced waste and packaging, lack  of additives or harsh chemicals, and reduced sugar and other dietary criteria. In 2015 the Made to Matter product line achieved $1 billion in annual sales with 30 percent sales growth.

Toyota and Tesla: Toyota is on track to globally sell 1.4 million hybrid cars in 2016. This represents 17 percent annual sales growth. Tesla Motors announced the 2017 launch of an all-electric car selling for $35,000 before tax incentives with a 200-mile range on a full charge. And the company has received $10 billion in pre-orders.

Costco: Costco is now America’s largest organic grocer. Its Kirkland Organics brand achieved $4 billion in 2015 sales.

Walmart: Walmart deployed a Sustainability Index to qualify vendors and products. A company that scores No. 1 on this index within its product category, or a minimum 80/100 score, qualifies as a Sustainability Leader. The sales of Sustainability Leader products exceeded $1.5 billion in 2015.

Williams notes that these companies are not green unicorns. Mirroring 'green giant' best practices is a new generation of companies like Patagonia, Method and Warby Parker that are rapidly growing toward $1 billion in annual green revenues.

Green giant sales success is also having a “pivoting” impact on competing companies. To remain relevant, a number of these green giants' competitors are adopting green business best practices as well. As Williams summarizes, the business case for sustainability is that green sells. And the proof is in the growing number of companies succeeding at winning customers and growing revenues with green products.

How to sell a billion dollars in green products?

Based on the evidence, the obvious question is how to align your company with the Green Economic Revolution. A related question is: Can the best practices used by green giants to grow revenues be applied to your business? That will be the focus of the second part of this three-part article series.

The third part of this article series will profile one of my favorite companies and CEOs. Clif Bar, and its CEO Kevin Cleary, are best-in-class leaders in using sustainability best practices to grow business results. The third article in the series will profile the company's latest innovations, which are achieving 17 percent annual growth.

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