Peter Knight is returning to the UK and reflects how sustainable business is developing in the US.
What a rollercoaster ride! It has been five years since I moved to New York to open our US office. My arrival here coincided with the worst financial crash since the Depression, a time when you were unsure whether there would be any cash in the ATM, let alone a market for sustainability advice.
Now that we have a thriving business and another office in Los Angeles, I am heading back to rejoin our London team. This is my last Letter from America.
It was this magazine’s founder and publisher, Toby Webb, who said I should plot the difference between the European and US attitudes to corporate sustainability. I doubt if I fully followed his instructions, so let me do so now, starting as I have so often done, with the trivial.
The biggest difference between the way US and European business operates is centered on whether visitors are offered a drink or not.
Food and drink
On the east coast there is no tradition of hydrating your visitors. It is not deemed rude or cruel to drink your Starbucks in front of your thirsty guests, or indeed eat an entire takeout meal without sharing. I have learned to pre-hydrate and, like a touring cyclist, I now always carry a muesli bar.
Honing in on Toby’s serious question: American businesses believe that their European colleagues are somehow sustainably better endowed.
Reality is far more complicated.
US business – especially multinationals with substantial global exposure – are as advanced in their sustainability thinking as any of their European peers, if not more so. I am always surprised, and delighted, by how seriously many companies consider the likes of the Global Reporting Initiative, the Carbon Disclosure Project (CDP) and the Dow Jones Sustainability Index.
For every Ikea, Puma and Unilever making sustainability news, there are US equivalents that hold a strong green line, such as Interface, Patagonia, Bloomberg and behemoths like DuPont and GE.
Granted, there are many substantial companies – especially those in the business-to-business market – that have not given sustainability much thought, let alone developed suitable programmes. But therein lies the joy of the US: there are unknown businesses that dwarf those in the FTSE 100 where the owners don’t possess passports and hardly leave their state. They may not have bumped into the sustainability agenda yet, but they will.
This is because corporate sustainability is rapidly percolating through supply chains, with a growing realisation that issues ranging from human trafficking to carbon emissions are real and have to be managed. Driving this change are the policies of giant companies such as Wal-Mart, McDonald’s, GE, IBM, HP and Cisco Systems whose diktats are impacting their suppliers.
This can be seen in the way the US business community, and not the bickering politicians, is taking the lead on climate change.
Hurricane Sandy and the severe drought affecting much of the corn-growing heart of America have – rightly or wrongly – brought climate change to the fore. Business realises that climate change will eventually contribute to higher energy prices and that is why most leading US companies complete the CDP and set themselves energy-efficiency targets.
The dysfunctional political climate is making it tough on businesses, especially small ones. Europeans believe that the US is a low-tax, business-friendly country, but in this they are mostly wrong. If you are based in a city, you pay federal, state and city taxes (there are exceptions). The federal government is brutal in its taxation of small businesses, taking much more than the UK.
Old fashioned services
And the country’s infrastructure is rotten, its banking system antiquated. For example, getting simple banking and telecom services in New York City is a lot more difficult than in London. The banks run Neanderthal systems and large businesses still insist on paying by cheque. Getting a reliable telecoms line can be a huge problem and dealing with the communications companies reminds me of the early days of British Telecom.
But the US remains a wonderfully upbeat, diverse and spirited country, and newcomers have always been warmly welcomed and allowed to flourish, providing many jobs along the way.
The UK, though, is in many ways more egalitarian and offers an environment where businesses can start and grow. An American friend left New York in his 30s to set up shop in the UK and is now a very wealthy man. “I came to the UK to live the American Dream,” he says.