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 ECOLOGICAL
INTELLIGENCE

DANIEL GOLEMAN

BROADWAY BOOKS

New York
 For all the grandchildren,
And their grandchildren's grandchildren

Copyright © 2009, 2010 by Daniel Goleman

All rights reserved.

Published in the United States by Broadway Books, an imprint of
the Crown Publishing Group, a division of Random House, Inc"
New¥ork.
www.crownpublishing.com

BR 0 A DWA¥ BOO K S and the Broadway Books colophon are

trademarks of Random House, Inc.

Originally published in hardcover in slightly different form in the .

United States by Broadway Books, an imprint of the Crown Publishing
Group, a division of Random House, Inc., New York, in 2009.

Library of Congress Cataloging-in-Publication Data

Goleman, Daniel.
Ecological intelligence: the hidden impacts of what we buy / Daniel
Goleman. - 1st pbk ed.
p.em.
Originally published in 2009 as: Ecological Intelligence: how knowing
the hidden impacts of what we buy can change everything.
I. Environmentalism-Economic aspects. 2. Consumer behavior-
Environmental aspects. 3. Environmental responsibility-Economic
aspects. 4. Industries-Environmental aspects. I. TItle.
HC79.E5G635201O
333.7-dc22
2009045836

ISBN 978-0-385-52783-5

Printed in the United States of America

10 9 8 7 6 5 4 3 2

First Paperback Edition

This book was printed on paper that contains 20 percent

postconsumer-recycled fibers. The interior was printed using soy-based
inks and the cover was printed using vegetable-based inks.
 13

TOUGH QUESTIONS

With the advent of methods for radical transparency, what the

marketplace offers today may become out of synch with what
shoppers will want tomorrow. These new approaches to manag-
ing information herald a coming flood of data about the hereto-
fore unnoticed consequences of a host of common ingredients in
everyday products. What had previously been successful brands
may be in danger of becoming tainted in our minds.
For companies, staying ahead of the waves of consumer pref-
erences that point-of-purchase transparency seems on track to
create requires early detection of which aspects of products are
problematic, so that companies can develop better altematives-
sooner rather than later. To judge such risks, businesses need the
executive's equivalent of mindful shopping, gathering new infor-
mation and acting on it rather than reflexively denying the facts

177
 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

(as cigarette companies did for decades with evidence on cancer). How would we have to change our thinking? For a company to
Decision makers need to be among the first to know what's com- leverage this opportunity, its core group-the most influential de-
ing. And everyone in a core group of decision makers will need to cision makers-would have to come on board. The danger here is
see more clearly than ever before how to weigh the risks and re- groupthink, the collective denial that the company's products
alize the benefits. have flaws or dangers. The cigarette industry's fight against the
Art Kleiner is editor in chief of the review Strategy + Business. data on cancer stands as the classic case: the industry won a
When we met over lunch in the boisterous atmosphere of Me- pitched legal battle for decades, but lost the war. Such groupthink
trazur, a restaurant perched in an alcove overlooking the giant con- can be seen in Detroit's resistance to hybrids before the oil price
course of Grand Central Station in New York City, I posed Kleiner shock hit, even as Toyota's Prius grabbed market share from it.
"
a hypothetical business scenario: Let's say in the near future the In contrast, the U.S. toy industry responded to revelations of high
field of epigenetics, the study of which molecules turn what genes lead levels, and the ensuing enormous public alarm, by calling
on and off, begins to identify certain industrial chemicals as possi- for an independent agency to inspect and certify the safety of its
ble triggers of genes known to be active in specific diseases. Those toys.
chemicals happen to be crucial to a wide range of products. What Another answer lies in shifting perspective beyond the short
should a company do? Kleiner rattled off a series of tough ques- term. NWe're caught up in the moment-it's tough to take the
tions that skeptical executives would have to answer before con- necessary corrective when there's no immediate crisis," a top ex-
sidering changing their company's use of such chemicals: ecutive at a global consumer goods company told me. NPart of
Do we care about it? This raises the fundamental issue of values, making a decision like this is trying to find a net present value in
priorities, and ethics. Executives who embrace social responsibility these long-term choices."
or environmentalism as a business imperative will answer this with One cognitive trap here involves the costs that have already
an enthusiastic yes. Those whose business decisions are driven by been sunk into present ways of operating. The executive added,
financial concerns alone will drop the inquiry here, except to the NIf you've invested ten million dollars on Project X or a new fac-
extent that there may be easy cost savings. But there are a great tory, financial theory says that because that money's already
many businesspe.ople who are somewhere in the middle-for spent, it should have zero effect on your decision for what to do
whom bottom line concerns mix with other considerations-who next. But emotionally, almost no one can ignore it. The decision
might continue down this loose decision tree. to pursue a short-term gain rather than to follow a long-term
What would we lose ifwe ignore this? The answer may be company 'plan that might not pay back right away is, to some ~egree, a de-
or brand reputation, or market share. Such an answer would cision around risk. And for someone who wants to manage risk,
likely revive the discussion even among those who initially an- the short term is the more appealing answer."
swered no above. What's the harm? Is the evidence refutable? Raising the flag of

178 i79
 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

doubt was the tactic deployed by the tobacco industry for decades benefit calculus? Exactly when, fiscally speaking, does virtue pay?
to fight the accumulating medical evidence linking dgarette smoke For instance, a book publisher tells me that he does not use recy-
to lung cancer. This tactic remains in use by many industries. An· cled paper because at present it's too expensive. UBut," he added,
other version of this don't-rock-the-boat school of thought makes U
we always talk about finding ways both to cut cost and do the
the counterargument that what we do is no worse than what our right things-those imperatives fight each other. But one day
competitors are doing. These spins satisfy those who would rather those lines will cross. We're monitoring what others are doing
not make any change at all. about this, talking to paper mills about costs. Soon there will
What information exists that I need to be aware of? Answers here come a tipping point when one publisher makes the shift, and the
might come from Life Cycle Assessment, among other sources. rest of us will follow."
What are the costs of changing? Product ingredients have been What are the logistics ofchange? Any major change will cost money
chosen because they have some benefit-they add pliability, and the aggravations of changing. Some suppliers might have to be
durability, shelf life, texture, and the like. Any switch in ingredi- dropped or persuaded to alter their practices or sources. Long-
ents or processing risks a drop in quality, increases in costs, lower standing relationships and priorities might need to switch.
margins, and lower profits, not to mention a drop in sales-plus Are the changes worth it? Those executives who hold that the
internal chaos in supply chain management. In the past, busi- ubusiness of business is business" will be more reluctant to
nesses contemplating such shifts did not have clear information change; their singular mission lies in maximizing shareholder
on the risks and had to guess at the benefits of changing. But ex- value. Such executives will be reluctant adopters, at best-until
ecutives have had a much more detailed sense of the costs of they see how ecological transparency might help their company
changing, or good reason to fear what these costs might be. So the prosper. Kleiner's questions address the understandable skepti-
result has been inertia: why change? cism of this group.
Do we really want to know? UWhat if we find out we've been poi- The subtext of these ten questions and their answers revolves
soning kids with additives in what we sell?" was the way Kleiner around values, which dictate strategic priorities. These answers
put it, posing an extreme case for facing discomforting facts.Find- assume as the standard business mind-set a Friedman-esque guid-
ing out something like this would raise both emotional and legal ing prindple in which all that matters is the bottom line. Ecolog-
issues. One corporate strategy has been to leave the actual risk ical changes are fine only if they bring no net effect in costs or
unknown and justify any change a company makes on the increases in sales. This mind-set sees sodal responsibility as an ir-
grounds that customers want it, rather than admit some risk, . ritation. a distraction from business fundamentals.
which might open the way to liability problems. But that view becomes outmoded the more ecologically intelli-
If we decide to change, how do we titrate our response to fit the cost- gent the public becomes, and to the degree that market shifts

181
180
 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

make such trade-offs pay. In theory, as marketplace transparency to the closing of the plant for seventeen months. Sales dropped
grows, stonewalling or ignoring data works less well; when we, throughout India. The company responded by pointing out that
the customers, know the facts, we will act on them anyway. Eco- the Coke plant drew its water from a deep aquifer that, techni-
logically intelligent companies will be proactive: businesses will cally, had no immediate relation to the surface water local farmers
want to be the first to know about epigenetic data, collaborate used. The villagers were victimized by the drought, the company
with suppliers to make shifts, see marketplace feedback as action- argued, nut by the bottling plant's wells. And it pledged to put
able information, and perceive the change as a business opportu- back more water into the local aquifer than it used.
nity that will bring added value, not just added' costs. The company had already begun to educate itself about water
u~e. In 2002 Coke executives undertook an analysis of the world's
supplies of fresh water, its growing scarcity, and the depletion of
aquifers. But this top-down overview was of little relevance to lo-
cal operations people who run bottling plants like the controversial
THE ECOLOGICAL EVOLUTION
one in Kerala. Internal studies revealed that operating managers
Throughout 2004 and 2005 Kerala, a state in India's south, un- simply regarded water from a municipality as an assured supply.
derwent a severe drought, with a 60 percent decrease in annual They never asked the question "Where does that water corne
rainfall. As crops failed, small farmers suffered an epidemic of sui- from?" Even when the occasional plant manager did have con-
dde. But even as villagers ran out of water, the local coca-Cola cerns about the local watershed, there was no support from the
bottling plant near the village of Plachimada had no lack, even in- company for addressing them.
creasing its output. With the factory running at full tilt, its gates The company's attitude toward water management focused orr
saw up to eighty-five truckloads of Coke drive off daily, each bear- operational performance-wastewater treatment and efficient
ing more than ten thousand bottles. water use within the plant. It typically had ignored not only
That triggered a protest at the plant by local villagers that began where its water came from but also the overall availability of wa-
on April 22, 2002, and continued for several years. Over that time ter for the local area. As Jeff Seabright, Coke's vice president for
the plant became a flash point, the bright red trucks a symbol of environment and water resources, admits, "'It took a real ,;ake-
water profligacy and corporate indifference. The Coca-Cola com- up call before we started to think beyond the four walls and pay
pany became vilified in the Indian press, where it exemplified hoW attention to the larger system."
corporate operations helped cause the chronic dehydration suf- In a world where 40 percent of people have no reliable source
fered by millions of Indian villagers. of safe drinking water and shortages daily destroy habitats, that

Dedsions by the local village coundl and the Kerala courts led attitude could not last. Coca-Cola convened meetings on water at

183
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 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

each of its twenty-three divisions throughout the world and had Coca-Cola had discovered its devalue chain. Insights like these
local managers complete an exhaustive three-hundred-question shifted the scope of thinking about water from the single water-
survey to identify the water issues at each site. By raising the en- shed a bottling plant draws on to all those watersheds tapped at
tire organization's awareness of water use, the iniative began a any point in the company's supply chain. Coke needed to consider
companywide conversation, with people who usually did not talk all the major uses of water, as well as the ways and rates at which
to one another now engaging the issue together. At that point, as those sources were renewed. In Seabright's words, UIf we are
Seabright tells it, the company realized it lacked crudal expertise wasting water or polluting we have no legitimacy to stand on. U

in aquatic ecosystems and the dynamics of watersheds. It turned This second wake-up call enlarged the mission of Coke's water
to the World Wildlife Fund for help. initiative to look at its total water demand, as well as that of its
That created a small crisis for WWF, which had long taken con- suppliers, to get them to see themselves as part of a larger system
tributions from corporations (as well as the general public) but whose water use could be measured and improved. That also got
maintained its distance and independence. WWF had to rethink Coke to look beyond its own bUSiness to see the need to engage
its strategy and mission, realizing that it could gain leverage by other corporate partners to build political will for the overall
partnering with business. Suzanne Apple, the WWF coordinator management of water. The CEO Water Mandate. one expression
of the Coca-Cola project, points out that Coke is the world's sin- of this initiative, evolved under a United Nations umbrella. It
gle biggest customer for sugar, as well as purchasing large num- urges companies to show progress in areas that range from water
bers of aluminum cans and immense amounts of glass, tea, and a use in their direct operations, supply chain, and watershed man-
long list of other items. uIf we can work with a company like agement to becoming more transparent about all this.
Coca-Cola and shift their purchasing to sustainable sources," she The target of ecological transparency is being met at Coca-Cola
observes, Uit can have a huge impact." in part by asking auditing firms to measure and report on their
But the issue at hand was water, more particularly the mind- water use in countries like India so that they have verifiable
set that viewed water only in terms of its use in products, clean- benchmarks against which to show improvement. Companies
ing, and processing, or of challenges like how to reduce the water meeting the Water Ma~date pledge to set incrementally better
used to make a liter of Coke from 3-plus liters to somewhere un- targets for their water use, to help their suppliers become more
der 2.5 liters. WWF expanded that myopic view by analyzing a water efficient, and to do what they can to help with local water
bottling plant's total water footprint, from suppliers through dis- shortages and improve water cleanliness. At its Plachimada plant,
tributors and retailers. Sugarcane, it turns out, requires some of Coca-Cola installed a sophisticated rainfall-harvesting system de-
the most intense water use of any crop. That expanded analysis signed to recharge local groundwater reserves. It also dug a bore
concluded it takes more than 200 liters of water simply to grow well for the nearby village, sending over two tankers of fresh wa-
the sugarcane that goes into that one liter of Coke. ter daily to keep the well filled.

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 DANIEL GOLEMAN ECOLOGICAL INTElLIGENCE

As for its worldwide operations, Coke has taken a fresh look retailer's initial conservation initiatives were driven by the need to
at water management. In 2006 Coca-Cola and its franchisees protect its sullied image.
processed 80 billion gallons of water, some ending up in drinks, A more proactive approach begins in the next stage of Senge's
but most used in making the drinks. Coca-Cola has set measura- model, with voluntary compliance; the drivers here often come
ble targets for itself toward the goal of ensuring that by 20 I0 all from the realization that taking environmental measures can save
wastewater from Coke plants worldwide is returned to the local money and improve reputation and brand value. The surge in
water supply clean enough to support aquatic life. companies finding ways to save on energy exemplifies this, from
The company has been making efforts to understand the wa- Wal-Mart dropping $25 million per year in diesel costs by putting
tersheds where it operates and the local sodal and economic is- small generators in the cabins of its trucks to Adobe Systems
sues surrounding water, and undertaken the responsibility to lead retrofitting its headquarters to LEED standards and saving the
in this area globally. In July 2007, Coca-Cola's CEO, E. Neville Is- $1.4 million in costs within ten months. Such benefits to the bot-
dell, announced to the triennial UN Global Compact Leaders tom line can create a virtuous cycle, as the initial savings lead to
Summit that his company's guiding prindple in the years ahead a search for more ways to find such gains.
would be "We should qot cause more water to be removed from Beyond this search for savings comes the next level in Senge's
a watershed than we replenish." progression, integrating sustainability into a company's strategy,
That shift to sustainability as a means to create value can be typically by discovering a range of ecologically sound business op-
seen in terms of five discrete stages in the evolution of a business, portunities. For a public company to reach this stage requires
each with its own drivers, in the view of MIT's Peter Senge and his meeting the constant challenge of showing it can be profitable as
colleagues at the Sodety for Organizational Learning. The earliest it becomes more ecologically intelligent. The internal signs that a
stages describe the conventional business response, as reflected in company has reache~ this benchmark include shifting responsi-
the assumptions behind Kleiner's questions. The assumptions in- bility for sustainability from an executive whose main job focuses
clude that a.ccommodating to ecological needs will be costly, un- on stakeholder management to leaders of business units and cor-
necessary, and bad policy. porate executives like COOs. In a company sustainability holds a
This results in companies digging in their heels, denying the need, meaningful place in strategy and its implementation, shaping cap-
sowing doubt. Any move toward ecological improvement comes ital and budget allocations, core operations, and R&D. It drives
from reaction to outside pressures, whether regulations that require the pursuit of significant new markets and the rethinking of sup-
lower air emissions or some activists picketing an annual meeting. ply chains alike.
And those moves are limited to doing the least amount necessary to Procter & Gamble aims to integrate sustainability into strategy.
meet minimum requirements. Lee Scott, Wal-Mart CEO, admits the "We use Life Cycle Assessment a lot in our sustainability program, "

186 187
 DANIEL GOLEMAN
ECOLOGICAL INTELLIGENCE

says Len Sauers, vice president for global sustainability at P&G. trade-offs like higher price or poorer performance. "We think we
P&G did extensive life-cycle analyses for energy impacts of its make the largest impact by targeting the huge middle," Sauers
product lines for everything from disposable diapers to shampoos. says. "With Tide Cold Water the price is the same and the quality
The ve~ worst impacts turned out to occur not during transport or is the same-there are no trade-offs. As a company we think this
extraction of raw materials but dUring the phase when customers is the way we can make the biggest difference. LCA let us discover
used certain products. The singular villain was consumers' need to this."
heat water for laundry detergents. Another incremental improvement by P&G can be seen in its
"That was by far the biggest contributor to our com~any's en- "compaction" initiative, which involves finding ways to get the
tire energy footprint," says Sauers. As a result, the company's same effect from smaller amounts of their products. For instance,
R&D unit developed Tide Cold Water, a laundry detergent that a liquid laundry detergent that used to require half a cup per
cleans clothes without consumers having to heat the water in the load has been concentrated so that one-quarter cup suffices.
washing machine. According to Sauers, if everyone in the United That, says Sauer, means "the bottle is smaller, you need less ship-
States converted to such a detergent, it would reduce by 3 percent ping material, and get more energy savings by increasing trans-
the total household energy use (a savings of nearly 90 billion kilo- port efficiency. If this were done with all laundry detergent in
watt hours) and eliminate up to 34 million tons of carbon dioxide the U.S., we'd take 140 million pounds of materials out of the
release (roughly equivalent to 8 percent of the Kyoto Agreement system from what's not used and eliminate 42 million distribu-
target for the United States). tion miles.;'
There are, Sauers says, no adverse trade-offs to using Tide Cold One motivator for companies like P&G has been Wal-Mart's
Water and one great advantage: it is no more expensive t~an reg- eCO-friendly packaging mandate, which demands its suppliers
ular detergents and cleans just as well. P&G calculates that the minimize packaging. Charmin toilet paper and Bounty paper
money saved in energy costs from not haVing to heat laundry wa- towels now both come in a version with far bigger rolls, resulting
ter is equivalent to the price of the box of detergent-in this in less space needed per. unit for packaging and during transport.
sense, "it pays for itself." In an ecologically transparent market- Other benefits include using fewer cardboard cores for the rolls
place, Tide Cold Water represents an optimal product, at least in and haVing fewer wrappers end up in landfills.
terms of its energy pr.ofile. "Our company is dedicated to finding more and more incre-
P&G market research finds that up to 10 percent of shoppers mental improvements like this," Sauers reports. LCA analyses
will "inconvenience themselves"-for example, pay more-to get show that after heating water for cleaning clothes, the next ma-
an environmentally superior product. But up to an additional 75 jor contributors to the company's energy footprint are the mate-
percent will buy sustainable products if they have no adverse rials used in making laundry products and disposable diapers. and

188 189
 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

home use of dishwashing soap and shampoos (these no doubt pany, practicing the three swarm rules: know your impacts, favor im-
also result from the use of heated water). provements, and share what Y9U learn. Buy one of Eosta's mangoes
"The company's latest five-year business goals for sustainability or oranges, and you'll find a sticker with a three-digit number on
target finding at least twenty billion dollars in innovative sustain- it. Go to the website www.natureandmore.com. punch in that
able products," says Sauers. "Several such product initiatives are number, and you will find a message from the farmer who grew
already in the development pipelines. Every business unit is it along with a profile of his operation and its merits. For exam-
working on sustainability now, and we expect them all to be con- ple, Fazenda Tamandmi, a mango farm in the equatorial state of
tributing. We're looking at our supply chain and asking suppliers Paraiba in Brazil, introduced a new yariety that needs less water
to bring new ideas to us for product improvement." to grow and a drip irrigation system to optimize a scarce water
What P&G's business strategy now seeks, as Sauers puts it, is supply in this parched climate, sharing the methods with smaller
"innovation, which leads to a better product, at lesser cost, that's local farmers.
more environmentally sustainable, with no trade-offs to the con- An interview with the farm's owner, Pierre Landolt, reveals that
sumer. We've integrated sustainability into the rhythm of our he left Europe to start the farm back in 1977, hoping to bring bet-
business." ter agricultural technologies to a poverty-stricken region with a
At the apex of corporate ecological intelligence are companies tough climate. A slide show takes you to the mango grove and
founded with this mission foremost in mind. Typically the shows an aerial view of the spread, and workers sorting and boxing
founders foresaw these business opportunities while competitors the mangoes for shipping. A chart displays results from an inde-
were still at the stage of mere compliance; these visionary entre- pendent evaluation, from wages and salaries and an atmosphere of
preneurs made ecological goals part of their mission from day one. respect to irrigation and pest management through innovation-
Take Eosta, Europe's largest distributor to retailers of organic the operation's most outstanding rating.
produce, a $100 million business. Volkert Engelsman left his job "We're trying to build awareness bridges," says Engelsman, "so'
as an executive in the commodities division of Cargill to found a customers can know about our growers. These are 10cal l2ommu -
company that would intentionally contribute to a better environ- nities and we know these people, whether in Egypt or Brazil. We
ment, health, and social responsibility. He told me, "We saw we want to highlight their contributions."
could only do this if we financed the company in a way that we'd That awareness serves to decornmodify Eosta's products. While
be held responsible for all three of these goals. So our start-UP for most food distributors a banana is a banana, Engelsman sees a
capital was from green investment funds. The financial bottom premium in personalizing the shopper-grower relationship. "We
line is our barometer for success, but not the only one." serve an awareness elite, people who are concerned about health,
·
th e enVIronment, . . " h e toId m.
soaallssues, e "We don't try to com-
Eosta stands as the exemplar of an ecologically intelligent COlD-

190 191
 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

pete with the lowest prices but to capitalize on the benefits of our Zimbabwe tells us all their workers' children go to school, that's
growers-they're not just organic but also socially and environ- an achievement-but not in New Zealand."
mentally responsible." The environmental ratings revolve around water conservation,
If a grower's produce has a higher ranking on the Eosta scales, composting, and other indicators of organic farming best practice;
his fruit will sell at a higher price. "We might charge twelve euros auditors travel to each farm twice a year in scheduled visits and
for a high ranking, ten for a lower one," says Engelsman. "We twice a year unannounced. And the health ratings are based on
pass that increase on to the grower; we take a fixed commission. the nutritional qualities, taste, and other attributes of the food it-
That rewards the good things they are doing." self as it arrives at Eosta's warehouses. Fazenda ramandua, that
Engelsman believes in the power of a transparent market- farm in a semiarid region of Brazil, for example, rates four of five
place-transparent in the cost chain as well as the quality of stars on both ecology and social responsibility. To know how its
Eosta's produce. One way Eosta embodies this transparency can mangoes rate on health, you'd need to get one from a recent ship-
be seen in what it calls a "trace and tell" system. Every fruit or ment.
vegetable it sells can be tracked back to the specific grower it came Many retailers that carry Eosta's produce value its ratings as
from and its ranking displayed. "Today's customer has health, en- bulletproof ecological transparency, according to Engelsman.
vironmental, or social concerns that he supports by giving to Some retailers that carry Eosta brands, he says, want to avoid
causes like Greenpeace, " Engelsman told me. "We want to let our the kind of scandal that hit a major British supermarket chain
customers use their buying power to support what they believe when the BBC ran a documentary revealing that its organic
in, and we can only do that by giving them full information, the peanuts from Asia were harvested using some child labor. In such
whole story behind our products: who grew it and a threefold an environment, brands will win by monitoring and anticipat-
quality rating that reflects its ranking on healthiness, environ- ing consumer preferences and hot spots proactively, changing
mental, and social qualities." ahead of the curve, and reassuring the marketplace via trans-
Eosta puts great effort into rating its products, hiring outside parency.
experts in nutrition and ecological impact to assess every crop of Most Eosta suppliers are in the Southern Hemisphere; trans-
fruit and vegetables it sells. Independent auditors evaluate the portation is one of the company's major ecological costs. "We
three aspects of, say, an apple to come up with its rankings. A launched a climate-neutral program to offset all our emissions.
grower wins. higher social ratings by, for example, contributing to We do a full LeA on all greenhouse gas emissions throughout our
local schools or clinics, profit sharing with employees, or cultural supply chain, from farm to plate, under the supervision of Ger-
efforts like putting on a music festival for the community. "social many's national certification agency."
indicators vary by local reality," says Engelsman. "If a farmer in More proactively, Eosta has driven an innovation that lessens

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 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

release of methane, a greenhouse gas. "If you collect all the green place the need for mineral fertilizers that cause the problem in the
waste from a city and throw it on a landfill, it starts rotting," En- first place."
gelsman says. "You cause anaerobic fermentation that makes Eosta represents the new breed of start-ups and entrepreneur-
methane. But if instead you put green waste in compost and keep ial outfits that incorporate ecological intelligence into their DNA
turning it in the right way, you avoid methane emissions and end from the start. But the more common path for companies is to
up with stable compost that will increase your soil fertility- retool an existing mission to embrace sustainability and other
which replaces mineral fertilizer-and increase the soil's water- hallmarks of ecological intelligence. That was the case at ABC
holding quality so there's less runoff. You also enhance the pest Carpet & Home, a trend-setting retailer in Manhattan. Paulette
resistance of crops. Cole told me that when she took over as owner and CEO in 2004,
"On the other hand," Engelsman adds, "if you use the nitrogen "We decided we should become mission based and use our plat-
fertilizers standard in conventional farming, you'll get greater form to lead a paradigm shift in retail, using beauty as a tool for
yields but the crops will be more susceptible to pests, so you need change. We do green with style."
pesticides. Producing and applying fertilizer contributes sixteen One of the first initiatives was a letter the company, a founding
percent of all global greenhouse gases, especially nitrous oxide, member of the Sustainable Furniture Council, sent to its furniture
which is three hundred-times more aggressive than CO 2 ," suppliers, most in North Carolina. "We told them we were going
The company managed to get Kyoto-approved carbon credits to educate our consumers by putting labels on furniture explain-
for the composting done by the organic farms in its supply chain. ing responsible forestry. We see ourselves as a model for other
Eosta has set up joint ventures with these local farmers and co- stores; we believe we will increase the demand for responsibly
operatives to produce compost that will replace nitrogen fertilizer managed woods. So we invite you to get on board.
in several developing countries. Selling their carbon credits pro- "Many of our vendors took us pretty seriously, though some
vides the farms a supplementary income stream. were skeptical," Cole said. "You're asking a business to add costs
"We're ,taking this to scale in a joint venture with the World and work." So ABC Carpet & Home partnered with nonprofits
Bank," Engelsman says. "You can do this with any field crop- like Rainforest Alliance, asking them to provide their services to
citrus, avocado, anything. Most agriculture takes place near rivers and share their expertise with furniture makers, like criteria for
and in deltas, where chemical fertilizer runoff causes eutrophica- responsibly managed wood and where to source it. They warned
tion. The World Bank has financed a program to hire people to them about countries where paperwork "certifying" sustainability
cut back the algae this causes before it chokes off the oxygen was often a cover for black market woods and educated the com-
aquatic life need. But we said, instead of burning the algae or panies about healthy forestry practices.
other alien vegetation, we'll use it for compost and gradually re- "We're sharing this information with our suppliers so we can

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 DANIEL GOLEMAN ECOLOGICAL INTELLIGENCE

get the products we want," Cole said. At the time we spoke, about logically intelligent enterprise, he was determined, would do no
40 percent of ABC Carpet & Home's reproduction furniture offer- harm to the biosphere; Anderson has resolved that his business
ings bore a "goodwood" label, certifying that the wood is either will be completely sustainable. His concern about environmental
reclaimed or ethically logged. That label is one of more than a crises comes coupled with a vision for business, the realization
dozen the retailer uses to educate its customers and reassure them that the only institution powerful and perva"sive enough to tum
of the ecological pedigree of its products. Other eco-items include th~se problems around is "the institution that was causing them

organic bedding; formaldehyde-free upholstery; linens made in the first place: Business. Industry. People like us."
from organic cotton, silk, and natural dyes; and "Organic Baby &
Little Ones," toxin-free products for children.
A 3,500-square-foot space on the third floor shelters ABC
Home & Planet, which consolidates sustainable offerings from the
rest of the store's six floors. Museum-like displays educate shop-
pers about, for example, the differences between organic, natural;
and cruelty-free wool, organic cottons, and natural dyes. Alto-
gether the retailer's offerings are tagged with any of thirteen dif-
ferent labels, each telling the product's ecological backstory.
"We're educating our customers and modeling for other retail-
ers," says Cole.
Ray Anderson, CEO of Interface, a carpet tile company, re-
members his conversion experience well. It began at a sales meet-
ing in 1994, when he was asked to give his reps· some talking
points on Interface's environmental philosophy. His reply was
"That's simple. We comply with the law."
That less-than-inspiring response led Anderson to ponder the
environment more deeply, until he had an awakening: "I realized
I was running a company that was plundering the earth."
So Anderson set his company the task of becoming what he
calls a "restorative enterprise," one that takes nothing from the
earth that cannot be replaced, regenerated, or recycled. This ecO-

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