L. Hunter Lovins believes capitalism and sustainability go together like, well … 100 percent recycled fiber containerboard and biodegradable soy-based adhesives.
The founder and president of the not-for-profit Natural Capitalism Solutions has become a leading disciple of the principle that sustainability and profits go hand in hand. She’ll talk about how sustainable business practices can help profits as well as save humanity during a 7:30 p.m. speech at the University of Iowa on Thursday.
Mi Rancho Tortillas Chief Operating Officer Joe Santana had “no earthly interest” in sustainability when Lovins met him a couple years ago, Lovins said, “but he wanted to sell to Walmart.”
Walmart had begun ranking suppliers on a sustainability score card, and rewarding the suppliers who do well on the ranking system with more purchases, Lovins said. The card asked 15 questions such as whether the supplier had measured its carbon footprint and whether the supplier was taking steps to eliminate waste packaging.
After talking with Lovins, Mi Rancho retrofitted its lighting systems with more efficient lighting and eliminated unnecessary packaging to reduce waste. The company saved $450,000 over two years, Lovins said, and helped cement its supplier relationship with Walmart.
When companies known for dominating their sector of business such as Walmart go green, Lovins said it’s pretty clear that there’s a business case.
“This is precisely steely eyed capitalism,” Lovins said in an interview Wednesday.
One way sustainable solutions improve the bottom line is by reducing exposure to price swings in commodities such as gasoline, diesel fuel and paper, Lovins said. If you use 50 percent less of something than you did last year, it doesn’t matter as much if the price of the commodity goes up by 50 percent.
“This is not a red or a blue issue,” Lovins said. “It’s about how we create jobs in our communities and drive prosperity.”
Lovins said Iowa is already a leader in some aspects of sustainability, obtaining a greater percentage of its electric power from renewable wind energy, and a large share of its motor fuel from renewable ethanol.
While Lovins believes the biofuels industry must eventually shift away from cornstarch as its feed stock, she considers corn-based ethanol a viable interim step toward economic prosperity and energy independence.
“Each penny increase in the cost of gasoline we import from the Middle East drains over a billion dollars from the U.S. economy,” Lovins said.
“Is corn ethanol sustainable? No. Is it better than imported oil from the Middle East?” Yes.”
Lovins probably can stray from the straight and narrow path of environmentalism easier than most because her background gives her plenty of credibility in the field where environmentalism meets economics. She co-founded the Rocky Mountain Institute with her former husband, Amory Lovins, before the term “sustainable” was minted.
Although she often uses it dozens of times in a day, Lovins detests the term “sustainable.”
“It’s a horrible word and I refused to use it for many years until the United Nations had a conference on it,” she said.
Lovins believes the term now is probably overused, and that some degree of “greenwashing” — spending more money on green marketing than on engaging in green practices — goes on at many companies.
She’s not too concerned about that.
“Hypocrisy is the first step to real change,” she said, citing the example of GE’s “Ecomagination” campaign.
“At first, all they did was ‘badge’ as green products they were already making,” Lovins said. “Their CEO, Jeff Immelt, set a goal of reducing GE’s carbon emissions 1 percent.
“Within two years, the green products doubled in sales,” Lovins said. “GE cut their carbon emissions 4 percent. Immelt once said that if Ecomagination were a separate company, it would be (ranked on the) Fortune (500 list at) 130.”
Lovins said consumers are rapidly becoming more astute about evaluating companies’ green claims, and she believes companies that overstate their sustainability improvements eventually will be punished by the market.
“I don’t mind if a company is greenwashing,” Lovins said. “It is a first step.”
Lovins speech will center on many of the lessons from her most recent book. Its title, “The Way Out: Kick-starting Capitalism to Save Our Economic Ass,” is representative of Lovins’s informal style.
She favors southwestern dress, and her speech is peppered with westernisms.
Asked if her own lifestyle is sustainable, Lovins laughes.
“Absolutely not,” she admitted. “I’m always flying all over the planet.”
She does frequent video conferences and webcasts, she said, but there are still lots of folks who like to meet face to face.
“It’s hard to drink a scotch with someone on the Internet,” she said.