As painful as this recession has been, there is reason to cheer. According to research firms like The Hartman Group and Natural Marketing Institute, the age of the “conscious consumer” has dawned. It seems that during these tough times, each and every one of us has been reminded that our buying decisions matter. The result is both a renewed frugality and a desire to make sure that our purchases count.

EcoUnit is a firm believer in conscious consumerism, as evidenced by our resuable bag program and product promotions that we run. EcoUnit credits, which are earned when consumers take part in our programs, are explicitly designed to foster this type of mindful, responsible consumerism. Every time an EcoUnit participant takes part in one of our programs they deliver a double environmental benefit - the choice they have made is in itself environmentally preferable, and the EcoUnit credits they earn go back into the environment.

In a recent test, EcoUnit and Ray’s Food Place offered shoppers 5 EcoUnit credits when they chose organic salad mix at select stores. The shoppers could use their EcoUnit credits to support local environmental projects. True to form, Ray’s shoppers took advantage of the opportunity to make their purchases count (in this case, by helping the local environment), and they chose the organic option 24% more than usual.

Ultimately, we don’t want shoppers to consume more. But when they shop, we want them to select items that are environmentally preferable. Organics, which are both better for you and better for the earth since they’re grown with no pesticides or toxic fertilizers, are an excellent choice for the conscious consumer. And since they earn EcoUnit credits which support the local environment, there is a double environmental benefit. Power to the conscious consumer!

For those in California, the past 2 weeks have been filled with stories about Palo Alto beginning its plastic bag ban (last week) and San Jose struggling to pass legislation. Many other municipalities around the nation on are the same track, trying to find a solution to the plastic bag problem. As I outlined in a recent post, the entire grocery industry is tuned into this issue and is eager to take a stand.

Of course there are other stakeholders involved, not the least of which is the plastics industry. In parallel with their efforts to block legislation, they are working with government to encourage more recycling. A recent article in the Sacremento Bee  discusses the “Got Your Bags?” initiative - designed to remind people to use reusable bags - as well as a renewed attempt to encourage recycling of plastic bags. In fairness to the plastics industry, the 2007 law that mandated stepped up recycling efforts has had little impact, in large part because there was no funding for an awareness campaign to encourage recycling.

For their part, grocers are increasingly realizing that it’s in their best interest - financially as well as environmentally - to encourage the use of reusable bags. Disposable plastic and paper costs them from $30-$60K per store, which represents 10-20% of a store’s annual net income. Finding ways to lower this cost, in particular ways that are deemed a reward rather than a punishment by their customers, is simply smart business for grocers.

Having been a solution provider to virtually every industry on earth, I have come to recognize that the grocery industry as a whole is relatively conservative. New technologies, solutions, and business models are simply not embraced and adopted overnight. And frankly, until recently, I believed the same could be said about sustainability (see recent blog post). So I was pleasantly surprised during last week’s Food Marketing Institute Sustainability Summit to see the strides that grocers are making towards more sustainable operations.

Yes, it’s easy to find grocery chains with new LEED buildings, improved lighting and more efficient refrigeration. But what is truly heartening is the extent to which real progress is being made among the products on store shelves. Many grocers are looking to expand their selection of organics, some with private label offerings. And many are taking a hard look at their sourcing policies in important areas like sustainable seafood practices. Futhermore, several leading grocers are helping their customers understand which products are environmentally preferable through shelf tags. In my view, more responsible sourcing combined with improved customer education are critical steps towards enabling more responsible consumerism.

Another area of increasing activity among grocers is around the “bag issue”. Based on at least 30 conversations that I had with grocers during the Sustainability Summit, it’s clear that grocers realize that they need to go beyond providing a discount for use of reusable bags. Nearly every grocer has a committee looking at new programs that they can put in place to significantly impact the use of reusable bags at their stores.

Clearly, leaders in the grocery industry have begun to recognize that their responsibility extends to the products on their shelves and the buying behaviors of their customers. With this new mindset, we can expect great strides to be made by the grocery industry over the coming months and years.

On the eve of the Food Marketing Institute’s Sustainability Summit, I feel compelled to point out the importance of adopting sustainable products and processes by grocery retailers.  Certainly some have heeded the call and have made sustainability a hallmark of their operations. But too many grocers continue to hold on to the outdated belief that they are simply a middle man between product manufacturers and their customers.

Increasingly, the evidence points to the fact that consumer buying habits are a reflection of their values. The widely publicized Cone Survey shows that fully 90% of Americans consider themselves “conscious consumers”. Not only do they want to purchase products from manufacturers that reflect their values, they want to buy from retailers who reflect these same values. The entire value chain - from raw materials to packaging and production to the point of sale - is under scrutiny by the increasingly conscious consumer. As the Hartman Group so effectively tells us, it’s not just what they buy, it’s where they buy it.

If you don’t believe me, take a look at what Greenpeace is doing to Trader Joe’s.  With its website and series of email campaigns entitled “Traitor Joe’s”, Greenpeace is exposing Trader Joes’ irresponsible seafood sourcing practices. How long can a grocery retailer - already hit with reduced consumer spending amid historically razor thin margins - afford to maintain unsustainable practices? The answer is obvious, and it’s equally obvious that grocers need to get ahead of the game by rapidly adopting more sustainable practices throughout their operations.

By the way, if fear is not motivation enough, the fact that sustainability-minded consumers spend significantly more than the average consumer at the grocery store should be enough to move smart grocers in the right direction.

When was the last time you took part in a creek clean up?  It had been a while since my last one, so I thought it would be worthwhile to spend some time cleaning up my community and learning about the state of the waterways. Wow, was it educational.

Over the past 18 months I have participated in countless meetings on disposable bags - the paper and plastic bags that are commonly provided at grocery stores and other retailers. The environmental side will tell you about the horrible toll that these bags - in particular the plastic - take on our environment. They will site studies that show the volume of plastic bags in our waterways and the thousands of birds and sea creatures that die every year from these bags. The other side - typically made up of a few lobbyists from the plastics industry -  are quick to call into question those studies, reminding us of the convenience that these bags provide us in our everyday lives. They claim that bags are only a tiny fraction of the waste that pollutes our streets and waterways.

So I thought a little time spent in a local creek might shed some light on exactly who is right. What I saw in Stevens Creek was crystal clear: it’s true that by weight plastic bags make up only a minor percentage of waste, but by quantity they were easily 40% of all the waste items we removed! Not only were they numerous, they were in various phases of degradation, resulting in thousands of tiny bits of plastic. Since this stuff never fully decays, it’s easy to see how it is ingested by wildlife or will eventually wash out to sea, ending up in the gigantic plastic swamp in the Pacific.

So, to answer the question, plastic bags are a real problem. And at a consumption rate of 500 billion plastic bags per year globally, they are a huge problem. I am more convinced than ever that we need to get rid of non-biodegradable plastic bags entirely…and while we’re at it, we need to get rid of the wasteful and energy-intensive paper bags as well. It’s time that consumers be rewarded for making reusable bags an everyday habit.

Having spent the past 3 weeks in Italy, I’ve had an opportunity to compare how a country with a long history has adjusted to environmental challenges. The first impression is that the Italians, and probably Europeans generally, live a far more sustainable lifestyle than Americans.  Average car size is tiny, translating to far better MPG. Homes are smaller, and single family homes are few. Cities are much more conducive to walking, and public transportation is widely available. Use of electricity for “luxuries” like air conditioning is far less. Even trash cans, while plentiful, are of a size that discourages waste. Public bathrooms are almost always outfitted with a non-paper drying mechanism. And bath/showers essentially force conservation of water.

At the same time, I experienced plenty of examples of eco-waste. The “system” and all of its inefficiencies undoubtedly takes an unnecessary toll on the environment. But more specifically, restaurants often times use excessive amounts of paper.  Bottles, whether glass or plastic, are of small size. And recycling opportunities are fewer than I had expected.

It’s clear that Italy’s eco-efforts are very much a result of longstanding realities. For example, the small high-MPG vehicles are largely a reaction to pre-automobile streets. Similarly, the lack of natural resources has forced Italians to consume according to their needs rather than to their wants.  So while I did not see evidence of a keen awareness of our environmental challenges, I saw a people who have spent many decades arriving at a sustainable lifestyle.  Ultimately, while America has exported McDonald’s and consumerism to the old world over the past 50 years, I expect that during the next 50 years America will need to import a lot of learning from our old world brothers across the Atlantic.

The more I read, listen, and learn, the more I realize how unbelievably wasteful our current economy is.  The examples are plenty, and the statistics are staggering.  Consider this: in the normal course of business, over 1 million pounds of resources are extracted, used, and cast aside as waste per year for each American in the U.S. economy.  This does not count the weight of the water that’s also involved.  So again, over 20X the body weight of each American flows through the economy each day!  And the vast majority of these resources - once a part of our natural capital - are cast aside as waste.

Why is this? What’s happening here? First, we’ve already established that historically capitalism has not really accounted for the cost of natural capital.  So it was easy to waste, because costs are minimal.  Second, recycling has been a low priority, so the vast majority of products are made with “virgin” resources.  Third, wealth as we’ve defined it results from pushing these single-use resources through factories and disposing of them at an ever more rapid pace.  In the end, at the pinnacle of capitalism, we are generating waste streams that simply boggle the mind.

I don’t think any of us regret that the industrial revolution occurred - tons of good has come from it and from capitalism, even the old wasteful capitalism - but it’s clearly time to re-define progress.  It’s time to trim the fat. It’s time to expose the waste that is rampant in virtually all aspects of our economic lives (efficiency of gasoline engines, % of electricity wasted from the grid, excessive energy use in poorly designed buildings…the list is virtually endless) and profit from finding ways to reduce it. Successful companies in the 21st century will factor in the real cost of natural capital and innovate ways to make our limited resources more productive.

All of us who have studied economics have heard the term “externalities”. Conceptually it’s pretty simple - as defined in Wikipedia, an externality is “an impact (positive or negative) on any party not involved in a given economic transaction.” You can read more about it on http://en.wikipedia.org/wiki/Externalities. The word itself has a sort of dismissive feel about it, but in fact this term has come front and center in the new eco-aware economy.

Natural Capitalism talks about how externalities - both in the form of valuable resources that are consumed in the production of goods as well as pollution, waste, and other by-products of industrial processes - somehow got lost in the “story of capitalism”. In other words, as amazing and powerful as capitalism is, capitalism as we have known it over the past 100 years somehow manages to disregard the huge toll we take on our planet when we consume valuable resources (trees, clean water) and dispose of products at end of life (toxic chemicals, non-recycled paper and metal).

So the new capitalism will need to incorporate these externalities into the true cost of doing business. We will see a rapid rise in the cost of resources. We will see a price tag placed on pollution. We will see companies forced to incorporate the cost of handling their products at end of life. Once market forces begin to incorporate these costs, we will be on the fast-track towards a sustainable economic system.

A few months ago I wrote about the possibility of a carbon tax in California in my post “What Gets Measured Gets managed”. You can check it out at http://www.ecounit.com/blog/?p=17. Well, the speculation is over and it’s now official - northern california will impose a carbon tax on its largest corporate carbon emitters. For more info you can read this overview: http://www.treehugger.com/files/2008/05/bay-area-carbon-tax.php

I am naturally suspicious of government regulations, but I’m willing to chalk this up to “a step in the right direction” given the immediacy of the climate crisis. Let’s watch this one closely…

During my quest to understand where all this is headed, I ran across Natural Capitalism which is essentially a manifesto for the new green economy. I will not endorse the entire book until I’ve read it in its entirety, but the first couple chapters have me intrigued. Clearly, others have thought about how capitalism - and all of the positive energy that it unleashes - can co-exist with a healthy respect for our environment.

Similar to my thoughts on the less is more economy, the authors of Natural Capitalism discuss how “resource productivity” will be the force that drives the next industrial revolution. Whereas human productivity (making the same amount of things with fewer people) was the primary source of progress thus far, the new economy will be driven by our ability to do more with the same amount of raw inputs. In other words, in the new economy we will be able to do more with less - make more, faster, better, safer products with the finite resources available to us.

They support this line of thinking with some interesting facts, namely the almost disgusting level of waste/inefficiency in the current economy. The evidence is everywhere (the U.S. economy actually utilizes something like 37% of the energy that is produced…the rest is wasted at various points of storage, distribution, etc…). A factoid from the book that I found interesting is that in the U.S. economy, the weight of all materials used to produce the goods that the average American consumes in 1 year is 2 million pounds! I’m not sure how much weight I actually consume, but it’s certainly not 2 million pounds…making the rest waste.

There is more to the story, and I intend to uncover it and share the key points on this blog. In the meantime, take a look around you and become more aware of the waste that you produce even at a personal level. Many new opportunities will come to those who help make our use of resources more efficient.