Gary Hirshberg, the president, chairman, and CEO of Stonyfield Farm, has a better reason for doing business.
The landscape of sustainable business is filled with landmines. Questions like “Does offsetting carbon really matter?” “Is recycling a scam?” and “How do I know where my materials come from?” abound, while incentives to even bother answering them are scarce. But after 30 years in the organic food business, Stonyfield Farm founder Gary Hirshberg has found a way to defuse the situation. Instead of asking CEOs to think about a moral imperative, he suggests we talk about their bottom lines. It’s something that those who want business to make a difference have been pushing for years. Hirshberg has been making it happen.Hirshberg’s organic yogurt company, which garners $320 million-a-year in sales, is a poster child of responsible commerce. For decades he’s been preaching the gospel of saving the planet, but now he’s humming a different tune: sustainability as a way to save money. Truckloads of it.GOOD: You’re an unlikely businessman-your background is in ecology and organic farming. Odd match, no?Gary Hirshberg: I felt that business was the last place on earth I wanted to be. I saw business as the source of all things bad in terms of the planet. I was really offended by it.Yet your business was a huge success. You sold 85 percent of it to a massive multinational food conglomerate, Groupe Danone, in 2001.I partnered with a great company. It took someone visionary to do the kind of deal that they did with me, and they have brought us into their inner circle. I will feel that we are really successful when we have Danone switching their purchases of significant commodities to organic.Do you feel like Danone is the exception or the rule? Could this happen at Nestle? could this happen at General Mills?We’re at the beginning stages of a sustainable trend in business, but I think we need to be very, very careful about how we proceed. Bio-fuels are a step backward, for example. And similarly the discussion of recycling should really be about source reduction. We are talking about some big shifts here, and we’re a long way away. But the fact is that you can’t name a large company now that doesn’t have an organic investment. Nabisco, Kraft, they all have something going organically. That gives me hope that Danone is not the outlier.But at the end of the day, you’re a yogurt company. Is this kind of thinking applicable across all businesses?This is absolutely applicable across all of commerce. If you give me 20 minutes with any CEO, I guarantee you I’ll come away with five ideas that dramatically reduce their carbon footprint and get them investing in sustainability-all while making them profitable.So what’s the hold up?I have 30 years of experience of talking about the moral imperative of saving the planet. And nobody really listened. Now I’ve shifted my rap to talking about the profitability of saving the planet. And people are listening. We need to shine a very bright light on the inherent un-profitability on depending on non-renewable fuels and conventional agribusiness. Waste is really too expensive now. The concept of waste doesn’t even exist in nature. Nevertheless, we’ve allowed it because it’s been cheap. The reality is that all businesses use non-renewable fuels, all businesses generate waste. But waste can be food; waste can be energy. It will have to be for us to have any hope for our children. The idea of waste is a flawed concept. We have to re-engineer our thinking.How can we do that?What If I held up a grande latte from Starbucks and asked how much water goes into making that? You would logically say 16 ounces. But in fact, it’s 350 liters of water that goes into making every latte, when you look at the full life cycle. What goes into the packaging? What goes into that insulated wrap? What goes into the lid? What goes into the coffee grind? What goes into the filtering of the water? We have to understand that’s real. We have to make that transparent.So one take away is that this isn’t necessarily about being altruistic, it’s about saving money, that’s what’s going to motivate people.Altruism is not going to drive anything. This is all about what’s good for me. This is all about shareholder return.What’s your take on the different companies and nonprofits that have sprung up to measure and document the relative sustainability of different companies? Is that the right approach?It’s a part of the mix. We need standards. We need measures. If you can’t measure anything, you can’t improve it. At the same time, the standards-like organic standards and carbon footprint measures-cannot be an end in themselves. In other words, just being able to call yourself an A, B, or C corporation is not going to do it. I think what a lot of people define as sustainable is not. Eco-efficiency is not sustainability. Reducing your footprint is not sustainability. It’s foundation work on the way to that. But sustainability is about the restoration of ecological integrity. It’s about building back topsoil, building back diversity, building and rebuilding water aquifers. It’s about taking C02 out of the atmosphere, not just putting less in. Carbons offsets are a particularly controversial area. I believe they are essential to create a currency that will help us to incentivize investments in reducing carbon footprints. But a friend of mine very correctly called carbon offsets a morning after pill. You know, ‘Oh, I screwed up, I need to go do something.’ And we just need to be careful that we don’t set up standards so people can say ‘I’ve done my part, now I can do my bad shit over here.’Well that’s why this whole trend of green washing is so interesting. Is the fact that Exxon Mobil feels like they have to pay the money to put those commercials on the air a good thing?I like that it will cause observers, consumers, activists, shareholders, and the media to then challenge them to prove that they are actually doing something. But the reality is that while they’re doing this, massive amounts of money are being diverted to the McCain campaign because he’s got an aggressive drilling agenda that’s going to make them a lot of money. So what has to be exposed is not what the companies are willing to say, but what they’re actually doing. Corporate social responsibility is a 360 degree commitment. It’s not enough to have a great corporate philanthropy program or even to be in the organic food business if you’re discriminating against women and minorities or dumping toxic waste. So, in the rating system, we’ve got to be very, very careful that a company can’t get a good grade when they’re doing something as pernicious as spending millions of dollars to create policy that is completely contrary to what their PR says. That should not be a free pass.
