Green Growth 50: Learning From Companies Boosting Profits While Cutting Emissions

EBay at its very core pioneered the circular economy — of finding new homes for treasures that might otherwise have ended up at the dump. “Avoiding items going into a landfill is very important to our customers,” says Steve Priest, CFO of eBay. “Driving the circular economy is part of everything we do.” But finding new shelves for Beanie Babies is just a small component in eBay’s sustainability efforts, which prioritize slashing greenhouse gas emissions. In eBay’s case, these are mostly tied to electricity used to power vast data centers. Since 2017 eBay has cut its carbon emissions by 29% to 88,000 tons per year. The e-commerce giant became carbon neutral this year and is aiming to achieve a 100% renewable electricity supply for all its offices and data centers by 2025.

This goal might be attainable in the next few years as eBay’s biggest clean energy projects are yet to come online. The White Mesa Wind Project in Texas (a joint venture with Apple, Sprint and Samsung) began operating this year, producing 75 peak megawatts for the four companies, enough to power 20,000 homes. Meanwhile, the Ventress Solar Project in Louisiana, a virtual purchase power agreement between eBay, McDonald's, and BP’s Lightsource division, will generate 345 MW. “We collaborate with our tech peers when some sustainability issues come up, where banding together makes more sense,” says eBay's chief sustainability officer Renee Morin.

Such efforts have earned eBay the no. 11 spot on our inaugural Forbes Green Growth 50 list. Using emissions data from Sustainalytics and financial data from FactSet Research Systems, we honed in on U.S. companies with market caps greater than $5 billion, that started with more than 100,000 tons of carbon dioxide equivalent emissions in 2017, and have since successfully reduced their emissions while simultaneously growing profitability (as measured by an absolute increase in net income or operating income from 2017-2020). Going in, we figured these criteria would produce a list of more than 100 companies. But green growth is harder than it looks — both Weyerhaeuser and Edison International, ranking no. 21 and no. 10 on our list, grew earning less than 2% since 2017.

Is there a connection between cutting carbon emissions and boosting earnings? eBay’s Priest thinks we’ve reached the point where companies that don’t care about green will find it nearly impossible to deliver growth. “Customers want to be associated with corporations that take their environmental responsibilities very seriously. Those that do will continue to drive loyalty from their customer base.”

This is a strategic emphasis echoed by Stephan Tanda, CEO of Aptar, which took the no. 1 spot on the Green Growth 50. Aptar makes myriad drug delivery systems and dispensing products for consumer goods, especially foods and cosmetics. “We look at everything we do through a sustainability lens.” Most of Aptar’s facilities in Europe are already certified landfill free. By the end of the year, Aptar is looking to achieve “80% disposal avoidance.” It’s a business that involves reconciling contradictions — most of their products are plastic, which he says actually has a pretty low carbon footprint relative to alternative containers. A new Aptar product is a “mono-material” lotion pump with no metal parts, entirely recyclable.

Consumer demand for such new products is arguably more impactful than the kind of government policy circus on display at the recent COP26 meetings in Glasgow, Scotland.

“Governments don’t impact what we do that much. Consumers and patients and customers demand what we do,” says Tanda. They will pay for the carbon transition because it is what they want. Listening to the consumers is how Tanda aims to “future proof our business.”

That approach has worked for electricity giant AES, which landed no. 15 on the Green Growth 50 list after reducing emissions by 22%, replacing coal-fired power plants with wind, solar and batteries — “a winning combination that can decarbonize 90% of the grid,” says Chris Shelton, president of AES Next. Because the costs of renewables kept going down, they were able to shift customers over under a “green, blend and extend” program.