Best Green Business Stories of 2011

Harvard blogger Andrew Winston discusses notable developments in sustainability, from Fukushima to Solyndra and more

By Andrew Winston

Posted on Harvard Business Review: December 17, 2009 3:31 PM

Yes, it’s December again somehow: time to look back on what we’ve learned and oversimplify into a handy list. Here’s my take on the 10 big stories in sustainability and green business this year:

1. The usual sustainability drivers got stronger
Ok, this one is cheating a bit, but on a fundamental level, the top themes in green business haven’t actually changed too much (see the 2010 list). So, rather than take up valuable list real estate with these perennial favorites and big-picture drivers, I’ll quickly list them in one big bucket of mega-trends:
• The rise of the consumer around the world, related to…
• China, China, and China. From relentless demand for resources to bamboo-like 9% growth to vicious competition for the technologies and industries of the future, China will be the big story for a long time.
• The greening of the supply chain. Big organizations keep asking more of their suppliers.
• Increased demand for transparency and its close partners, (a) the quest to define and develop useful sustainability metrics and (b) the growing sustainability data explosion.
• The military continues to lead the way on energy and climate.
• The ongoing failure of policy at a global level (with the important exceptions of some successes/workarounds such as new mileage targets for cars and trucks and a carbon tax in Australia).

These drivers underpin a number of stories from 2011, but a few new themes came out as well. Here’s the rest of my top 10 stories, with callouts for companies and examples that typify the trend.

2. Malthus strikes back: Coca-Cola takes an $800 million hit on commodity costs
Coca-Cola was not alone in facing increasing costs in 2011; one of my clients, Kimberly-Clark, took an earnings hit from record pulp prices. These companies are notable victims of a new reality: resources are constrained and input prices are fundamentally rising.

For over 200 years, from Thomas Malthus to the Limits to Growth gang, many people have made the case that it won’t be long before we’ll run out of food, energy, materials, and on and on. It’s an idea that has enthralled many, but has seemed to be wrong. But this year, something felt different as we hit 7 billion hungry, striving humans on the planet. While “running out” isn’t really the right phrase, it’s clear that delivering many commodities to market is getting harder and more expensive (we don’t dig for oil a mile under the ocean for the heck of it). And the dangerous mix of supply crunch and rising demand is only increasing, across nearly all commodities.

In January, China “seized” its rare earth metals (meaning it wouldn’t export them anymore). In June, the New York Times declared a warming world hostile to food production. The best analysis of the resource scarcity mega-trend came from asset manager Jeremy Grantham. His analysis of commodity availability on a finite planet is compelling, thorough, and absolutely fascinating. Here’s the gist: after 100+ years of fundamentally declining resource prices, the data show a rising trend for nearly every input into our society. Business as usual is no more.

3. Climate Change Arrives: Texas weather triumphs over (some) ignorance
Climate change is here. The list of “once-in-a-century” storms, floods, and droughts this year is too long to list. I know, I know—no single storm or season “proves” climate change. Was a year like 2011 possible in a world without climate change? Of course. But please. Was a year like 2011 likely? Not at all. In the words of climate scientist Jim Hansen, we’ve loaded the dice in favor of extreme weather events.