Green is good

No, it's not just greenwash. Business in the U.S. really has become cleaner and greener. Environmentalists actually have embraced market-based solutions. And the politics are about to get very interesting, says Fortune's Marc Gunther.

By Marc Gunther, Fortune senior writer

(Fortune Magazine) -- Big business and environmentalists used to be sworn enemies - and for good reason. General Electric (Charts) dumped toxins into the Hudson River. Wal-Mart (Charts) bulldozed its way across America. DuPont (Charts) was named the nation's worst polluter. The response from the environmental movement: mandate, regulate and litigate. Those days are mostly over.

Today big companies and activists are at least as apt to hammer out a partnership over a cup of sustainably grown coffee as to confront one another in court. No, they do not always see eye to eye, but the areas of common ground are getting broader. Why? For one thing, because there is money to be made. "The opportunity to provide environmental solutions is going to be one of the big four or five themes of our generation of business leadership," Jeffrey Immelt, the chief executive of GE, told the 25th anniversary dinner of the World Resources Institute.

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Like Immelt, Fortune sees big changes ahead. For the past 30 years, most of what passed for environmentalism in corporate America was driven by two things: compliance and efficiency. Industry stopped polluting the air and water after it became illegal or unprofitable to do so.

Going a step further, some companies also recognized that by reducing their consumption of energy and materials, they could save money, help the planet and maybe clean up their image. Now we're at the threshold of a different era, one in which smart companies are trying to figure out how to profit by solving the world's big environmental problems.

This era won't be about efficiency - although there are still lots of gains to be made there - but about increasing revenues and inventing entirely new businesses. That, at least, is what DuPont has set out to do, albeit with mixed results. That's also why GE is selling wind turbines as fast as it can produce them.

Global warming is the game changer. A number of influential Fortune 500 CEOs, including GE's Immelt, Wal-Mart's Lee Scott, the heads of America's four biggest carmakers and utility industry leaders like Jim Rogers of Duke Power and Peter Darbee of PG&E, have agreed that climate change is real and that national action is required to slow, stop and then reverse the growth of greenhouse-gas emissions. That is a very tall order.

Transitioning to a low-carbon economy will require new ways to generate power, run our cars, grow our food and design, build, heat and cool our homes and offices. Only business is capable of innovation on that scale.

And many businesses are taking up the challenge with verve. We identify ten companies that are ahead of the learning curve on the strategic value of environmentalism in their industries. Selecting them was difficult - another sign of how the world is changing.

We began by soliciting nominations from environmentalists and consultants who have worked in the trenches of corporate America. They nominated nearly 100 companies. We decided to concentrate on bigger firms because their environmental footprint is more important. (We could not, however, overlook the remarkable story of Patagonia). We also left out two very big companies, GE and Wal-Mart, whose environmental initiatives have been widely covered.

Like Arnold Schwarzenegger, Fortune is basically optimistic. As the statistics show - and we highlight a few of them - the U.S. has made enormous progress in some areas, while backsliding on others. Change for the better is certainly possible; building a sustainable economy is a plausible goal.

And what is sustainability? The ability to meet our present needs without compromising the ability of future generations to meet theirs. Getting there won't be easy - and business will have to help take us on the journey.

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