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By Ulf J. Froitzheim

For the inhabitants of Erkheim in the eastern Allgäu region in southern Germany, "blockhead" doesn't mean simpleton – it's their community's landmark visible from afar. A monumental structure shaped with the angular features of a man's head which, from the South, seems to watch the traffic on the autobahn A96 from Munich to Lindau on Lake Constance. Taking the nearby autobahn exit will not, however, bring you to a theme park for contemporary art but rather to an industrial park. Looking at it from the rear, the 20-meter high sculpture turns out to be a five-floor office building – including a glass staircase tower and a panorama platform.

In 1996, the wood house specialist Baufritz of Erkheim treated itself to a double luxury for the 100-year company anniversary: Where ordinary low-building architecture would have fulfilled the purpose, the artist Diether Kunerth of Ottobeuren was allowed to put this vertical eye-catcher on a greenfield site. Since that time, the company has been provided with an architectural 'statement' adjacent to the autobahn but does not use it as an advertising medium. The wooden figure's forehead would actually be large enough for a man-sized neon headband bearing the Baufritz logo. But what would that look like? It would be disrespectful towards the artist and an eyesore in the landscape.

Baufritz has its own priorities – not only when it comes to special investments, but also regarding the ordinary daily purchase of raw materials and fabricated materials. Dagmar Fritz-Kramer, who is managing the family-owned company in its fourth generation, might actually be pleased that wood, as the lion's share of the company's purchase volume, has been available now, for some time already, at unbeatably low prices on the market. But she doesn't feel comfortable with it. "Forestry management is now in a situation similar to that of milk farmers", the 38-year-old is outraged. If the price paid for one square meter of forest were less than for a pack of cigarettes, reforestation would not pay. The result would be that the gravel underneath the tree stumps would be exploited; and some time later, those holes in the landscape would be filled with construction rubble. Future floods would complete the environmental disaster.  And we didn't even mention yet the failed chance of replanting trees to reduce CO2. Dagmar Fritz-Kramer's conclusion: "I prefer to pay a decent price for wood."

It's easy for her to say because her customers feel the same way. House builders who order their individualized wooden houses in Erkheim fit the "LOHAS" category. They are people who are health-conscious, environmentally aware and at the same time stylish and who can afford to pay for their "Lifestyles of Health and Sustainability". According to the motto "luxury – yes please, but only with a clear conscience", this educated and well-heeled clientele only buys sustainably produced items, i.e. without any uncontrolled exploitation of nature, without the use of problem chemicals, and without the exploitation of people.

Add to this privileged avant-garde those consumers who at least care for sustainability within their financial means, and you will find that the group of critical consumers meanwhile gained such an importance on the market that it can no longer be ignored even by many companies whose end customers are outside the ecological niche. This is backed up by a current survey conducted by the Institut für Demoskopie Allensbach (IfD – Institute for Public Opinion Research) ordered by the Kerkhoff Competence Center (KCC) St. Gallen among 202 executives in purchasing on the subject of "Green Procurement". The survey results are exclusively published by impulse. For example, more than half of those interviewed in the area Business-to-Consumer (B2C) assume that the eco label is "important" or even "very important" for their end customers.

For the others, it may become important at any time – if something happens which is detrimental to their company's reputation. "Consumer protection is vitally important", says Matthias Händle, managing partner of the Osnabrück-based family-owned company Hamm-Reno. "If you don't keep that in mind, you'll run a huge risk for the company." Minimizing that risk is also considered part of sustainable management by the boss of the second-ranked company in Germany's footwear business. That's why Reno had itself audited, and that's why there'll be soon certificates in all Reno shops which document one thing: The company sells only shoes tested for noxious substances. Of every model to be included in the company's product line, its purchasing department has one specimen each checked beforehand for residues. Upon delivery of the goods, another sample will be sent to its laboratories. Only when the chemists have given their go-ahead, the batch is sent to the retail stores.
But Händle has to live with a residual risk: Even if the random sample had been negative, the manufacturer might have used leather from a different tannery for part of the shipment.

Unscrupulous Junk Dealers

Unlike Dagmar Fritz-Kramer who has wood and gypsum even tested for radioactivity, Händle cannot, however, pass on the costs for the incoming goods inspections. "We invested a lot in this topic; it's reasonable, it's necessary", says the manager, "but today's consumer also expects it from us." Since nobody would find it normal to have poisonous substances in a shoe, nobody would pay higher prices for non-toxic shoes. But unfortunately, what happens sometimes: There are still many tanneries, in Italy for example, which have not yet banned the toxic hexavalent chromium from their production. "All too often" Händle had to reject contaminated shoes - and later discovered these harmful rejects at cheap prices in some outlets whose buyers could not have been so naive not to suspect why the manufacturer had made them such a cheap offer.

Although unscrupulous junk dealers still have their customers, Jens Hornstein, sustainability expert of Kerkhoff Consulting in Düsseldorf, is certain that the public's sensitivity and awareness is growing. He thinks that too much happened already. Every single scandal – from rotten meat to carcinogenic plasticizers in toys – would increase the consumer's desire for safe, sustainably produced goods. "And that has retroactive effects on the companies' purchasing policies", says Hornstein.

The Allensbach study shows that this process is running in stages. According to the study, two out of three larger companies in the producing industry already carried out the auditing of their direct suppliers in terms of the environmental, climatic and social compatibility of their production. Only one in four of those interviewed had no such plans as yet. But it's not yet a rule that companies actually bother about where their own suppliers are getting their intermediate products from. For Hornstein, this is careless: "If a company is serious about sustainability, it must take into account the entire procurement chain." So far, larger companies do it more than small companies – as the study shows. B2C providers have come further than those from the sector Business-to-Business (B2B).

But the consultant Jens Hornstein believes to have discovered signs that a rethinking process has started even in the business client market. Key roles might be the subjects of energy savings and climate protection: If buyers of large fleets of company cars switch to fuel-saving models which is good for a company's finances as well as for its image, the entire automotive industry will get moving – all the way down to the suppliers of the system supplier.

But as always, it's the little things that cause the problems. Nowhere has it been bindingly laid down what exactly "sustainable" is to mean in concrete terms. Every company, every association, every certifying institute defines its own criteria and applies its own yardstick and standards. That even applies in the LOHAS market whose participants have dealt with such subjects the longest already. Take wood, for example: Dagmar Fritz-Kramer can choose between the seals of quality of the Forest Stewardship Council (FSC) and of the Program for the Endorsement of Forest Certification Schemes (PEFC). Despite a seal, it's possible that logs will be transported over great distances. That's why the head of Baufritz frequently chooses small ecologically-minded silviculturists, or tree farmers, in the Allgäu region – even if they cannot afford the expensive certification process. She takes the responsibility for telling her customers that this is ecologically sensible. And she has the necessary credibility for it after having been awarded the Deutsche Nachhaltigkeitspreis 2009 – the German sustainability award – because she likes to exceed the usual standards with various extras in organic architecture.

It's much more difficult for companies whose industrial buyers are confronted – completely out of the blue – with the daunting task of implementing a sustainability strategy specified by the company's general management. "There is still a lot of non-transparency in this area", says Kerkhoff partner Hornstein who actually profits, with his team, from that confusion in the market. Yet, consultants aren't the only 'jungle' guides who are clearing a path for greening buyers. For example, Deutsche Bank customers wanting to invest in resource-saving technologies may invite one of the specialists of the Berlin-based Greentech team. Its first two team members, Felix Holz and Peter Hintz, are physicists and will accompany the financial consultant. "We are independent sparring partners for general management", explains Holz, who had worked for a long time in the field of renewable energies. He promises "constructive talks with impulses and stimuli from a different perspective". After such a visit, the entrepreneur will at least know about all the things that need to be considered – from eco-balance to grants and fundings, as well as whom to contact.

Sometimes, however, no pressure from customers and no outside look will be necessary to become aware of the benefits of a more sustainable management. That's the case when one of the largest items in cost accounting is "gas and electricity". This happened to the married entrepreneurs Annette Imhoff and Christian Unterberg-Imhoff. As owners of the laundry leasing specialist Larosé, they started up a new laundry line in their Nonnweiler operation in Saarland this year. The new line drastically reduced energy consumption. Formerly, the waste heat from laundry mangles went unused and evaporated. Now, a heat recovery system uses the waste heat for preheating the water of their washing machines. "We are using all the heat that can be reused", explains Annette Imhoff. Even waste water will first run through the heat exchanger before flowing into the sewage system. The graduate in business administration is the daughter of the legendary chocolatier Hans Imhoff and she is not satisfied that utility companies will give them good volume discounts for gas, water and electricity: "Even if electricity is only half the price, I still have to pay for it." Ergo, Larosé applies the efficiency rule: Not more consumption than necessary – that will be good for the environment and increases competitiveness.

The three presented companies all have one thing in common: They are among the 23 percent of those interviewed who, according to Allensbach, are the drivers and doers when it comes to the subject of sustainability. They simply follow their own corporate philosophy; whereas 76 percent of those interviewed will submit to the legislator's intent and 69 percent will yield to the customer's demand. "Sustainability not only relates to the ecology", as Reno boss Händle formulates the views held by the family-owned companies. It would also have to do with how a company is being managed – and there would be other priorities than just short-term profit maximization. Baufritz is old (113 years); the parent company of Hamm-Reno is older yet (121); and even Larosé, founded only in 1977, is an offshoot of the long-established company Stollwerck. The generation of today's 40-year-old owners will not be the last. Or, as Händle says: "We would really like to get a little older yet."