Sustainability, employee engagement and shifting consumer habits, all's possible says GME's Paul Thomas.
Green Mountain Energy, founded in 1997, is the longest selling retailer of carbon offsets in the country with a lofty mission: To change our dependence on power generation from coal and nuclear energy to renewable sources.
With a clear environmental mission and a dedicated consumer base, why would a company like Green Mountain Energy [GME] bother publishing an annual sustainability report?
"The [sustainability] report gives us an opportunity to write about everything we are doing. When you build a company of people who are passionate about the environment, the report becomes a forum to talk about everything we are doing," says former President Paul Thomas.
The day of our interview, Thomas was still President of the company he has led since 2000. Two days later, news of his stepping down was delivered to my inbox along with a quote:
"I am extraordinarily proud of what we have collectively accomplished at Green Mountain and know that the potential for driving meaningful change is nearly limitless if businesses, like ours, can put market forces to work to solve societal problems."
Thomas is referring to the recent acquisition of GME by New Jersey-based NRG Energy.
Merging Two Cultures & Winning Over the Skeptics
How did the company overcome hesitance from employees, customers and investors alike about the acquisition?
"Our society is transforming as a whole from being oil-driven to something very different driven by renewable sources and technology. The question is how do we get from here to there as a society? NRG is a good example [of a company addressing] this dilemma. They are the largest investors in solar production in the country. Now, Green Mountain is a part of their initiative to make NRG a cleaner company – their activities are genuine and we fit well," he explains.
What about shifting work cultures?
Thomas says the company has undergone several shifts since the 1990s. "We started with a lot of environmental enthusiasts with a low level of business skills. It would have been a lot of hot air if we didn’t drive value to customers. Today we are also a good sales organization, a customer-service driven company," he says, transitioning from being an environmental company to a good business.
But back to the 2011 sustainability report, which follows several other companies' lead in shutting off downloadable PDFs in favor of an interactive all-you-can-consume website. The company has come a long way from its formation in the 1990s. According to the report, GME contributed to avoiding 4.5 billion pounds of CO2 emissions, which is "equivalent to not driving a car for six billion miles or planting 6.5 million trees."
"Remember that in 1997, this was just an idea," reminds Thomas. "We've also increased recycling and all our material now is made from 100% post-consumer recycled content," he added.
GME also expanded its innovative Sun Club, which asks customers to pay an additional $5 a month to help the company invest in solar projects. The money donated is then distributed to fund solar projects nationwide in coordination with nonprofits. 2011 marked the biggest year yet in contributions.
But what is sustainability without employee engagement?
Transparency in Action: "Bagels with the Tall Guy"
GME encourages its employees to bike, bus or take the subway in its New York office and participants in 2011 doubled past years' numbers, according to the report. The report also makes public GME's paper and publishing standards as well as its contributions and partnerships with organizations like EarthShare.
Green Mountain Energy's answer to town halls is what the staff quirkily call "Bagels with the Tall Guy." Thomas explains:
"I'm 6'6'' tall. My predecessor was bald so it used to be called "Bagels with the Bald Guy." It is just an informal communication forum for employees to ask me anything that is on their mind. Nothing is off the table and the conversation is purposely unstructured."
While all is fair game, Thomas admitted that not everyone attends every month. But what it does is allow "us to be transparent. I believe that employees are effective when they have more context of their job and how they are contributing. Their role makes more sense and there is less doubt about how they fit in and how they can make a difference," he added.
Public Policy & Sustainability
With the Rio+20 Summit coming up, I asked Thomas what the government and public policy makers can do to help support the growth of businesses like GME.
Pointing to a fundamental disconnect, he said, "The public is ahead of policy makers because there is a fundamental misunderstanding between individuals who are concerned about the environmental and their willingness to make purchasing decisions."
"In the last 10 years, we have seen a sea change in the public's attitude. But policy makers have not caught up with that," he continues, adding:
"Green Mountain can focus on market changes by aligning ourselves with the social and environmental benefits of our product. That’s a powerful combination. We've proven that green business works, that there is a market for us, and that we can drive a lot of societal benefit while providing good jobs and careers for individuals, and meaningful returns for investors."
Thomas also cautioned activists and skeptics to keep in mind the regulatory barriers in the market for green energy. "Every state has its own approach ranging from Texas that is competitive and has an open market for electricity to states where the old monopolistic system is still there. We are not allowed to compete in those states!" he emphasized before adding, "We cannot sell green electricity without having permission to enter the states and compete first and foremost."
A significant barrier but one that hasn’t stopped Green Mountain Energy from scaling the heights and pursuing its mission. His advice for aspiring social and environmental entrepreneurs? "Keep at it, we've done it and shown that green businesses can thrive. It's possible."