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Companies Seek Environmental Seal of Approval

By Brian Walsh on January 27, 2006No Comment

One percent sounds like a small number.  Many people might consider it statistically insignificant, no more than a number just waiting to be rounded off.  

But one percent of a company’s revenues — its total sales, not just its profits — can be a very significant number, especially when it is combined with one percent of the revenue of hundreds of other companies.  Then you start talking about a considerable chunk of change.  When this money is then contributed to organizations dedicated to environmental protection, it can make a measurable impact.

That is the goal behind “1% For The Planet” (1% FTP), an organization started in 2001 that recognizes companies that donate at least one percent of their total revenues to environmental causes.

“Since companies are at the nexus of a lot of the issues facing the environment today, it’s a reasonable expectation to ask them to help address them,” explains Terry Kellogg, Executive Director of 1% FTP.  “Companies can only do so much to minimize their environmental footprint and make their operations sustainable.  At some point, I believe they should take an additional step and make a financial contribution to make up for their impact on the environment.” 

When a company joins 1% FTP, the organization certifies that they donate at least 1% of their total revenue to one (or more) of over 700 approved environmental organizations.  In exchange, the company is licensed to use the 1% FTP logo on its marketing materials, and is listed on all of the organization’s public outreach efforts.   The 1% FTP logo is, in effect, striving to become an environmental seal of approval, letting consumers know that a company is committed to environmental preservation. 

In a crowded marketplace, companies are often looking for ways to set themselves apart.  Corporate Social Responsibility (CSR) has emerged as one effective way for companies to differentiate themselves to consumers.  “For many of our member companies, their donations of 1% of their revenues are the backbone of their CSR initiative.  It provides something very tangible that establishes their credibility with consumers” Kellogg notes. As the membership expands, consumers will increasingly have more choices in supporting companies that in turn support causes consumers deem to be important.  Kellogg maintains that at its core, 1% FTP “provides consumers the opportunity to become engaged in environmental causes.” 

Kellogg is not worried about companies joining for the wrong reasons.  Since membership in 1% FTP requires such a hefty commitment, it attracts companies which are very dedicated to the environment.  As he explains, “1% of revenues is a very high bar, so only the most committed companies are going to step up to that bar. It commits companies to giving whether or not they break even in a given year.  The revenue commitment says: ‘this is an integral part of doing our business.’” 

Companies benefit not only from the marketing exposure they gain; many use their membership in 1% FTP as an opportunity to network with other companies that share their values, which can help build their business.  According to Kellogg, many companies donate their money to local, grass roots environmental organizations.  They then are able to build collaborative relationships with those organizations, so that their impact becomes greater than just their monetary donation.  As Yvon Chouinard, founder of Patagonia, Inc., puts it, “Every time I’ve done the right thing for the environment I’ve made a profit.”  Chouinard co-founded 1% FTP with Craig Matthews, who runs the fly-fishing company Blue Ribbon Flies.

For companies for whom it is strategically advantageous to be aligned with environmental causes, 1% FTP is an innovative approach to CSR.  Most 1% FTP member companies are involved in the outdoor living sector, so their philanthropic focus is aligned with their business focus.  But the model can be applied to other causes.  As Kellogg points out, “If someone came up with 1% for arts and humanities, for example, we would whole-heartedly endorse it and help them understand how our model is successful.” 

The movement is growing:  there are currently over 240 participating companies, and an average of 3-4 new companies join each week.  “In a few years, we hope to have over 1,000 companies participating in our organization,” Kellogg says.  He sees parallels to the organic food movement, which started out with a few companies marketing their organic bona fides and has become a very large and incredibly profitable industry.  Kellogg reflects, “We would love to see our logo ubiquitous in the marketplace, so it becomes for companies not a question of ‘are you doing this?’ but rather ‘why aren’t you doing this?’” 

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