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`Green' Merchandise Is Only a Beginning

THIS Earth Day saw a lot of talk about ``green'' businesses and environmentally responsible merchandise.

``There is now a $200 billion to $300 billion market for environmentally conscious products,'' President Clinton said in his speech to mark the occasion. White House environmental chief Katie McGinty talked about how a ``well-designed environmental policy is a stimulus to economic growth.''

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But what if most of the hustle to tap a more environmentally aware market misses the point? What if much of what passes for a more-enlightened approach to manufacturing and distribution these days merely continues along an accelerating path of resource depletion, pollution, and overconsumption?

These are the troubling questions raised by Paul Hawken in his recent book, ``The Ecology of Commerce: A Declaration of Sustainability.''

Mr. Hawken knows about business management. In the 1960s he started Erewhon Trading Company, the first natural-foods wholesaler in the United States. In the '70s, he and a partner formed Smith & Hawken a highly successful catalog company that peddles gardening equipment. When he left the company in 1991, it was grossing about $60 million a year.

``I helped create part of the entrepreneurial mythos of the '80s,'' he told a business magazine. His firm also was winning awards for its business practices and donations to worthy causes. But if all such ``socially responsible'' businesses (there are about 2,000, he figures) were added up, their combined annual sales of $2 billion would amount to only 1/100th of 1 percent of the total worldwide. Which means that President Clinton's $200 billion to $300 billion potential market for ``environmentally conscious products'' still is a relative drop in the bucket.

``If every company on the planet were to adopt the best environmental practices of the `leading' companies ... the world would still be moving toward sure degradation and collapse,'' Hawken writes. ``Rather than a management problem, we have a design problem, a flaw that runs through all business.''

The fundamental flaw is that while nature is cyclical, business is essentially linear. And the result (even setting aside acquisitiveness and corruption) is that ``doing business in the latter part of the 20th century is an energy intensive endeavor that gulps down resources,'' he adds.

Two years ago, an international organization of foresighted board chairmen and CEOs known as the Business Council for Sustainable Development said much the same thing in its book ``Changing Course.'' ``The bottom line is that the human species is living more off the planet's capital and less off its interest,'' they wrote. ``This is bad business.''

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What both Hawken and this high-level business group are saying is that most environmental costs of doing business are ``externalized.'' This means the steady depletion of resources (farmland, forests, water, fisheries) as well as pollution are either ignored or spread throughout society. Worse yet, they are often given tax breaks or subsidies.

Part of the answer is ``full-cost pricing'' and ``life-cycle analysis'' of products and the way they are manufactured. This will require ``profound changes in the goals and assumptions that drive corporate activities, and change in the daily practices and tools used to reach them,'' the executives' group wrote.

Hawken goes farther in his call for a ``restorative economy'': decentralizing business, entirely eliminating waste, and reducing energy and natural resource consumption in industrialized countries by 80 percent over the next 50 years, for example.

``Industrialism is over,'' he writes. ``The question remains how we organize the economy that follows. Either it falls in upon us, and crushes civilization, or we reconstruct it and unleash the imagination of a more sustainable future into our daily acts of commerce.''

Hawken, who was successful in marketing before taking up a second career as a writer, sees the move to sustainability coming largely through business. It's a prospect both scary and exciting.

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