Can business be sustainable? Interview with Ellen Pabst von Ohain

Since a few decades Ellen Pabst von Ohain, New Yorker based in Germany, has been doing business and consulting other small and medium enterprises on marketing, strategy, and sustainable communications as well as teaching sustainability classes to business students.

So it is easy to guess that we talked about sustainability in private sector – how have the attitudes and actions of businesses changed over the last decades, can business be sustainable and how does the future for sustainability look like.

Ellen, how and when would you say your path to sustainability began on a personal level?

I have always been an outdoor person and have been active with the organization Boy Scouts of America, not only in the USA but wherever I was living around the world. 

I did a lot of camping, hiking, and all that stuff when I was a kid. I was a poor city kid, born and raised in the Bronx. My community worked hand in hand with a non-profit to get me and other kids out of the city to the country in summer, when the school was closing. That is how I saw my first cow. I don’t know how old I was but I was like “Oh wow!”.

I believe that was quite something, though it is such a different experience from mine! And what was your journey to sustainability professionally?

I have an MBA in International Business Strategy and back in the USA I had my own business and I was a consultant for startups. I settled down with my family in Germany in 1998. By 2005 I was doing a lot of coaching and strategy for businesses here. 

Then I was fortunate to get nice clients – it was a typical Mittelstand (small and medium-sized enterprise) family business passed down to the family from the grandfather. They were one of the largest and most important printers in Germany. They concentrated on offset printing – with those big “Heidelberg” machines that cost millions and take the whole floor. They had a couple of those. Their business was fine, but they wanted to expand. And one of the ways they wanted to do it was to attract big international global companies. 

They were interested in something I knew nothing about. They said to me, “We want to be FSC certified. Find out everything about it and tell us what we have to do.” I started to research and I found out that FSC is an independent accreditation and all you have to go through to get accredited and to get certified. I told my clients as an adviser, “You do not want to do that. It costs too much money, it takes a lot of time, plus you have to recertify after two years, which costs more money. And what do you get out of it?” One thing led to another and I advised them not to be involved in that because I did not see the benefit. Thank goodness, they paid no attention to me, went through the process, and became certified. That was actually kind of the eye-opener for me – immediately after that, my client got a very small job for McDonald’s because they were looking for certified suppliers. My client was one now officially and so they made the right choice. And they taught me to make the right choice. And that was the beginning. After that, other small businesses were asking about this certification and its benefits and so my clients kind of turned me into it, otherwise, I would still be, you know, whatever direction I was in before. 

Ellen Pabst von Ohain, personal archive photo

Interesting! So actually it was not you pushing the idea of sustainability, rather the opposite.

That came later. I tried to push later. The more I learned, the more I realized what I kind of knew instinctively. Because you kind of get the gut feeling that something is not right or something could be better. I never sat down to think about this. But you kind of know when the companies are not operating up correctly. 

In my case, I was very lucky because I never worked, at least knowingly, with an unethical company. The opposite is true. Most of the small businesses I worked with were extremely ethical.

How do you see sustainability integrated into businesses nowadays? 

What I noticed is a couple of things in terms of where the business is going. On a smaller basis, working with the Mittelstand companies, I think ethical and sustainable practices are being integrated and are planned to be integrated more and more. 

Because the EU has strong compliance, there is more and more pressure along the entire supply chain to embrace more sustainable practices.

So you have institutions or small companies asking what is all this sustainable stuff and what they have to do with it because they find out that some companies won’t do business with them unless they become more sustainable or accredited. And many small businesses are afraid. Because it is – do this or lose business. So there is this pressure going on on the business side, often generated because of compliance, because of the laws that are changed.

In February of 2019, I was at the GreenBiz conference in the USA. I went specifically to find out what is the pulse going on over there. There is also pressure there, but it is not coming from compliance, because that would mean the government setting policy and we don’t see that. Although there are lots of regulations and rules, probably as many there as there are here, they are not enforced. There are not huge fines and if there is a lawsuit brought against the company for environmental action, the process takes forever. 

So where is the pressure or, let’s call it increased interest, coming from? It is coming from the consumer market. Companies are not stupid, they want to make a profit. And they start to understand that your generation, millennials, and your younger brothers and sisters, Gen Zs and whoever comes in the future are becoming aware of what deal you are getting for the future and you are not happy about it, you want us, my generation, to do something about it. And if we do not do something about it, there are so many products in the market – you are not going to buy from us. So I cannot say that is a general theme for everyone, but it is increasing in terms of attitude. Your generation is now globalized because many young people around the world have the same kind of feeling. And that is something companies cannot ignore anymore. 

How do businesses you met at GreenBiz see sustainability?

Honestly, my impression after talking to a lot of big companies and big brands was that nobody or very few can give you the big picture of what sustainability is. For Americans sustainability means environment. That’s all that it is. They don’t understand a homosexual issue or religious freedom is a sustainable issue. They don’t understand the universal health care is a sustainable issue. 

I spoke to Walmart, General Motors, Nike, Facebook… The list was enormous. And of course, I am talking to the representatives so they are careful about what they say. But it was a conference for sustainability professionals. And so you would assume that they understand what they are doing. I can’t say they did, but I can’t say their intentions were not in the right place. What I found overall was that many of these companies sent representatives and many of them have 100,000-200,000 workers globally, and the sustainability department consists of one person and his or her assistant.

But in comparison to five years ago, they never would have had a sustainability department, sustainability would have meant something abstract for them that falls under the marketing department as a marketing tool. I have been watching the US market for a very long time and ten years ago the companies were talking that they are green and had no idea what that meant. If you were green or called yourself green, you had a benefit where you can charge at least 19% more for the same product and people who would buy it at that price point because it was green. Five years later you had enough internet information and enough consumer interest to check what being “green” actually is and to realize that there was not very much behind it, that it was a marketing trick. Then they got really mad and there was a lot of finger-pointing around that time, and companies started to wake up and to say they need to do something. 

So ten years ago they talked about “greenness” but did not understand it, five years ago they talked about the things that they should do. Then companies started to report what they were doing. So that was the progression. What they were doing from a point of view of an outsider from Europe or a practitioner’s point of view is the tip of an iceberg. But again, in comparison, all I can do is be very positive and hopeful about the future.

So it seems many people in business struggle to define sustainability. What would be your definition for it? 

That is the question I don’t have an answer for. I think there is not yet, I am thinking about it. 

What we do not have are general rules. No rule says this is what sustainability is and it doesn’t answer your question, but it answers your question in a negative way. We do not have a universal template that is kind of accepted everywhere. The only thing we have got and that companies are excited about, at least the ones I can see, is the UN SDGs (Sustainable Development Goals), the 17 sections. Companies are really happy about it because they have something specific that they can focus on and check a box. They think that checking the box makes them sustainable, they forget about the other 16 things. There are millions of companies in the world doing millions of different things. No company can be sustainable, I do not believe it.

I think the most sustainable company is no company. So either that or you have got to have a system where your company exists primarily for purpose, and as a sidebar, you happened to make a lot of money out of it too.

And that is kind of the model I would like to see, I am trying to work towards it for the future. Currently, we do the absolute opposite. Firstly, our purpose is to make a profit, and on the second thought we ask is this something good for everyone? 

I don’t know if the old companies can do that, I think their DNA is based on the original concept. But I see many of the new startups and many younger companies wanting to start that DNA from the beginning. I think in the future we are going to have global monsters that have always been around and continue to be around and they do their business kind of the way they do it, with a lot of philanthropy and lots of social services, etc. But basically, they are money-making machines for shareholders. And then I see the whole parallel universe happening where you have more purposeful companies, products, and services who are also making money. That is what I see. 

What is an exemplary sustainable business for you?

I do not think any company is really sustainable, every company does a little bit. Usual models that people drop out are Patagonia and Steelcase. They are two very different companies and they are sustainable in their way.

Patagonia started years ago by a mountain climber. He could not find products that served him when he was up in the mountains, so he started this company, to make stuff that he could use. And he often talked about all the years he spent in the mountains climbing, he could see the impact and the change. So the DNA of this company from the start was being conscious of environmental issues – they started at this point and everything that came after have more or less stayed true to that.

During the economic crisis in the States in 2008-2010, people were not buying so much stuff. So the management board of Patagonia decided to set up the platform on eBay and make it easier for people to buy and sell used Patagonia stuff. They said to their customers to not buy new products unless they intend to keep it for a really long time, and if the clients are tired of the products (because it will not wear out as it is such high quality), sell it on eBay. That was the market they were looking for, which was contrary to everything else the market was doing – the planned obsolescence, designing products to break so that people buy more. If the customer sold an old jacket on eBay, they would make some money, eBay would have its cut, and Patagonia would have its cut. So Patagonia was making money twice off the same product. Not only it is sustainable as a product but it is also a very good business. That is the kind of thing I would like to see more in terms of the cleverness of how companies can act sustainably and still make a profit. I think they are beginning to look at it now. 

Steelcase I thought were always environmentally sensitive. I went to see their presentation in the States. They told us the story – their employees were interested in social programs and suggested that Steelcase invests and helps out a woman who had a social startup. Steelcase supported the startup and even sent their teams to help the company. The win-win was for the startup because they could start their business, employees were very happy which made them more loyal to Steelcase and Steelcase got a partner because the startup was providing ethical textiles. It is a perfect example of a perfect little story. 

On the other hand, what are the biggest greenwashing practices in the businesses that you could tell about?

I work with German companies that operate fairly sustainably in terms of the supply chain and reducing energy, water usage, transportation, and whatever it is. They are kind of good companies. But they strategically choose not to tell that to their market. Why not? Because there is so much greenwashing on the market so they are afraid that their customers will not believe them. And they do not want to be labeled as a lying company even though they may be performing with excellent standards. And that is where certification becomes important. Because of what we know about marketing – there is more impact if someone else promotes you, not if you say how fabulous you are. And that is kind of what certification should be about. But it gets confusing for the consumer. When we talk about the consumer, I do not always mean the end-user. Here in Germany, the consumer is the other middle man, most of the business here in Germany is not B2C, it is B2B. So if they do not know which certification they should get and there are some not transparent, questionable certifications floating around, how should the end-user know which one to go for? 

What do you think is important for our society to solve the current environmental and other issues we face? 

It is not going to happen overnight, but I think we need to start from the beginning. I think that in kindergarten we have to teach kids what is a sustainable, ethical situation. 

I would wish as long as I was lucky, to be dragged out of the city, to the country. It was a revelation. For me and all the kids. I would make the opportunity available for every city kid to go out to the country and to understand – this is what the tree looks like and this is what the tree provides, and this is why you cannot throw garbage there. Have them reconnect. I hate to say that, it sounds so cliché, but reconnect back with nature. That is not what I want to say – I want them to understand that they are so much more than who they look in the mirror – they are humans, and human makes them analog, we are not digital. And there is no reason to fight that. And if we are analog humans, we are tied in, whether we like it or not as species to the other species on this earth. 

In the end, what would be your advice for future entrepreneurs?

I think for the future we need to change track, we need to be mindful and careful, but really what it means is to be thoughtful, to think before you jump into doing. 

If the company wants to be sustainable… Do you want to know what I think the sustainable company is? It is a purpose product or service made sustainably. If the business is trying to establish themselves like that, they are going to have a lot of barriers, because we do not have enough infrastructure to support that, we are building it now but in such a fragmented and slow way. So new businesses may have to invent or establish that infrastructure for them to operate within that structure. Because right now there are not enough supply chains, there are not enough sustainable processes. What I see positive is that more entrepreneurs want to do it sustainably – and that is good. They will find out what the challenges are and will maybe fix it.

Note – photos from Pexels and personal archive of Ellen Pabst von Ohain.