Why corporate environmental initiatives make good business sense.

Commentary about business and finance.
Sept. 14 2007 7:26 PM

The Greening of Hype

How solar panels generate more free publicity than clean electricity for businesses.

Westport Wash & Wax proudly bills itself as the only solar-powered carwash in the state of Connecticut. The proprietors, brothers Craig and Scott Tiefenthaler, have just covered the roof of their business with 18 panels. The total cost: $21,000, with the state's taxpayers footing 60 percent of the bill.

This sort of behavior drives economists and global-warming skeptics to distraction. Even with the massive government subsidy, it'll take seven years for the owners to recoup their investment. And on sunny days, the panels provide only enough juice to run the shop's refrigerators and lights. "To run my main motors, I'd need a city block of solar panels," says Craig.

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At first blush, the carwash has all the hallmarks of a greenwash: a feel-good gesture that detracts attention from painful efforts that could really influence energy use. People who are serious about using less energy could skip the carwash altogether and bathe their vehicles with a hose and cold water. And if they're truly freaked out about global warming, perhaps they should drive their Porsche Cayenne SUVs less frequently.

But the Tiefenthalers, who have no advertising budget, have clearly made an economically rational choice. Within two weeks of installing the panels in August, the carwash was featured in the two local newspapers, a Web site covering Westport, and the cable-news channel that covers Fairfield County. The New York Times has called, too. "We regard it as an effective form of advertising because of the image we're trying to maintain and create," Craig says.

For companies large and small, going green is now a surefire way to cut through the clutter. A recent issue of the New York Times travel section included a brief article—complete with Web address—describing in loving detail the features of the Proximity Hotel, a green inn in Greensboro, N.C. Some hot hotels feature roofs with happening pool scenes. The Proximity's roof features solar panels and a vegetable garden.

The Wall Street Journal recently profiled Citigroup's efforts to save $100 million on energy costs. Among the measures: turning off escalators and a failed effort to crank up the heat in a Tampa office from 72 to 78. (It failed because sweltering employees revolted.) Citigroup is going through one of its periodic dark nights of the soul. The giant bank is on the hook for billions of loans to private-equity deals, and its stock sits at April 2000 levels. Were Citigroup to trumpet loudly its efforts to improve the bottom line by jacking up ATM fees, it would be pilloried. But when an unloved Fortune 500 company turns the office into a sweatbox, it is hailed as a planetary savior.

In the current zeitgeist, green companies that do what they're supposed to do—save money, raise profits—can earn valuable free air time that doubles as an objective third-party endorsement. And for an embattled company, going green is the ultimate conversation changer. Wal-Mart, the poster child for low wages, skimpy benefits, and unfashionable merchandise, has been lauded for its no-brainer efforts to increase the mileage of its mammoth truck fleet and its decision to offer more organic foods. Google, whose CEOs fly around the world in their own Boeing 767, is reaping a huge propaganda jolt from the 1.6-megawatt solar installation recently activated at its headquarters. (Double bonus: Google uses the system to charge plug-in hybrid cars!) In July, McDonald's earned a supersize portion of positive press when its U.K. unit announced it would convert 155 delivery trucks to run on biodiesel made from McNasty leftover french-fry grease.

The media love these stories, in part because advertisers—who are increasingly building their brand images by associating themselves with alternative energy—love the content. As a result, many companies might be better off dispensing with high-concept advertising altogether. (I don't get about half those Geico caveman ads, anyway.) Forget about the focus groups and the Gucci-wearing ad hipsters. Buy a few solar panels, offset some carbon and crank out some press releases—on recycled paper, naturally. Let word slip that your CEO lunches on organic salads and has started eating with his hands rather than using wasteful plastic utensils and paper plates. And if something really bad happens, like an accounting scandal, roll out the big guns: go carbon-neutral.

Patriotism used to be the last refuge of scoundrels. Now that refuge might be environmentalism. Imagine how much better off Britney Spears would be if she had shown up at the MTV Music Video Awards in a Prius, performed in a bustier laden with light-emitting diodes, and concluded by suggestively planting a tree to offset the emissions created during her disastrous show.

This article also appears in the Sept. 24, 2007, issue of Newsweek.

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