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New York Post


Why Business Went Green

April 01, 2007

By Nicole Gelinas


IN its store, Whole Foods trumpets how environmentally friendly it is. But at checkout, employees give out plastic and paper bags so generously one would think they are paid by the bag. Two weeks ago, Whole Foods used 13 heavy-duty bags, doubling every single plastic bag, to pack the 22 items I bought.

Bruce Piasecki, a veteran corporate environmental consultant, likely would argue that Whole Foods' virtuous environmentalism exemplifies the current economic revolution. I'd say their organic theology wrapped in plastic bags is just good old-fashioned business.

In "World, Inc.," Piasecki says that big companies that have long competed on price or quality now must add a third item to the "new trinity of corporate strategy": social-response capitalism.

Multinational firms, responsible for more than 40 percent of global trade, Piasecki argues, should sell more environmentally friendly products manufactured through more sustainable processes because customers and investors want them to. Successful firms will understand that they need to craft a "social response" to confront the world's "severe . . . social problems," including climate change and the rising price of oil.

Instead of convincing readers we are in a brave new world, Piasecki's evidence proves that good managers anticipate and respond to market demands, government regulations and variables like oil prices, just as they always have.

The "social-capitalist philosophy" behind Toyota's development of the hybrid Prius, Piasecki writes, "could very well be the key to our collective long-term survival." But he never makes the sale on why Toyota's success with the Prius isn't an example of regular old capitalism.

Years ago, Toyota bet that the Prius would succeed because of coming higher gas prices and a significant consumer market that would start to care about carbon emissions. Toyota planned well - but that's just good business. Piasecki also argues that potential corporate investors are revolutionizing the business world by analyzing each company's devotion to "social-response capitalism" as a major risk factor. Investors should consider whether a company is properly anticipating and planning for new market demands or government regulations. But this is just a new part of the age-old question of which corporate executives are planning well now to profit in the future.

Piasecki's belief that "empowered" consumers, investors and corporations can fix the world through "social-response capitalism" ignores an inconvenient truth: While some affluent consumers love their stylish low-water washer-dryer combos and their trendy Priuses, the wealthy consumers leading this market haven't shown that they want to make even the tiniest changes to their behavior.

Whole Foods may preach organic, but it's made residents of Manhattan's environmentally conscious Upper West Side into cogs of a plastic-bag-to-landfill delivery system. If Whole Food shoppers, investors and executives are supposed to save the planet, we are doomed. But at least when the Arctic finishes melting, the earth will be waterproofed by a Whole Foods' plastic-bag lining.

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