Greedy For Green
Posted by Fred Cohn on May 10, 2011
Hairdresser-turned-entrepreneur Horst Rechelbacher founded Aveda, the beauty products company, in 1978; when he sold it two decades later to Estée Lauder, it was worth a cool $300 million. A comfortable retirement fund, to say the least, but the Austrian-born mogul was loath to kick back. Instead, the Austrian-born entrepreneur has devoted himself to a new mission: marrying the seemingly opposed realms of business and the environment. He has also started a new company, Intelligent Nutrients, devoted to organic, environmentally friendly health and beauty products. We asked Rechelbacher about his life, his mission, and his honest answer to this question: How can you do well and do good at the same time? Here’s his response.
Q: You’re a proponent of “green” business practices. What’s going to make this happen?
A: This is the time for it to happen—an awakening period for us humans. Nature is giving us a wake-up call and saying “whoa.” It’s also a consumer awakening—almost a religious awakening. Business has to reinvent and redefine itself. It’s an amazing genetic responsibility.
Q: That’s a moral argument—how do you make it a business argument?
A: Businesses do work morally, sooner or later. Who is watching the business? It’s always the customer. It doesn’t work to act like the customer is stupid—the customer is only stupid for so long. Look at the lawsuits: Cosmetic companies and sunscreen companies are being sued [for toxic products], just like the tobacco companies were sued.
We have to manage the old while creating the new. This is why BP has bought Solarex. They know they’re going to run out of petrochemicals. What’s going to power all the buildings we’re building now?
Q: What about today’s MBAs? What incentives are there for them?
A: These new business students, they’d better become champions of the environment. If they join companies that don’t do it, they are not going to become the new entrepreneurs. The cultural creators—those are the ones that always kick ass.
Human beings can do it. The technology of how to fix things is already here, but sometimes it’s not highly developed yet. It needs a new generation of people who know to focus their intelligence on fixing things, restoring things.
Q: In other words, a generation that’s commited to sustainability?
A: “Sustainability” is not a good word. Sustain what? Relationships that aren’t good? We need to repair, to renew.
Q: Still, it’s clear that some pretty powerful forces are arranged against change. Isn’t it entirely possible that these forces will continue to prevail?
A: Let me give you an example: Ford and GM had electric cars that they used in California—leasing, not selling them. They couldn’t make the kind of money they wanted, because the cars don’t break down—they’re not complicated enough to make more money in maintenance. So what did they do? They buried the cars. Called them back and shredded them. What happened after that? The intelligent people got together with Tesla [to develop solar-powered cars]. The car costs $120,000, and the waiting list is two years.
Who is buying it? Not just people who want to be cool and hip and first. The majority of these buyers believe that this is what’s needed in the future.
That’s what business is. Some people see the future; some only see the present. Some follow the money right now; some entrepreneurs see where the money will be in the future.
After [Ford and GM] buried the car, guess what they’re doing now—they’re back building them again. Why? It took an entrepreneurial company to say, “We’re going to kick your ass, guys.” The board was outdated in their thinking, constipated and stuck in their own paradigm. Now they’re looking at Tesla and saying “Oh shit! We’ve got to go back, because we already have the technology.” And BMW is building hydrogen cars. The awakening of the rich corporate mind is happening right now.
Q: So you’re saying that greed in itself can be a motivator for environmental change?
A: Greed and need. Human nature is “eat or be eaten.” It’s the survival of the species. Yeah, greed is part of our nature. But there’s this other side that operates from the heart. I do believe that we are “getting it” as a global society. We are beings of higher consciousness. Nature is teaching us that there’s something we need to do. If you look at the intelligent community of this planet, those are the ones who are definitely leading
the new corporations, or even the old corporations. And what are rich old corporations doing? They’re buying new entrepreneurial companies.
Q: Is that why Estée Lauder bought Aveda?
A: First they bought the company because it was a really good idea for making money. Then I left the company. [Sometime after that], they were totally into preserving what I did and getting organic certification for their products.
Q: Surely greed works in the opposite direction, though.
A: Public companies have a challenge: the shareholder. The average investor is looking for short-term gain. [With that in mind] how do you reinvent and build for the future? That’s why the executives at GM said, “Let’s kill the car.” That’s why big companies are stuck.
Look at energy companies. It’s loud and clear. Anybody who’s in the petroleum business right now is making huge profits. Anything related to petroleum has doubled and tripled in cost. When the price is driven into madness, people have no choice but to look at alternatives. How can we get resources that are more sustainable? And equally available? That’s why BMW has invested for at least 20 years in hydrogen technology. Why is Germany already getting resources from solar and wind? If you ride on the autobahns, you have fields of solar entities and windmills. But not in France and Italy. They have a different mindset. Why don’t they do it? They know they’re going to run out. They’re at $8 a gallon—and we’re going to have that too.
I’m a student of science. I saw what was going to happen 20 years ago. I met Dubai’s minister of oil and asked, “When are you guys going to run out?” He said “Shhh! How did you know?”
Q: The tobacco companies are still around. Doesn’t this run counter to your argument that good practices will win out?
A: Look at how quickly they’re diversifying their companies. Yes, they’re still in their old business, because there are still people addicted to tobacco. But their biggest growth is in undeveloped countries. They didn’t have to tell ’em the truth. That’s why everybody’s still smoking in China. Eventually, as more people become intelligent, the transparency will develop. You can never hide the truth. More transparency is going to be created. The majority of people want to be good. You just have to convince people—and that’s called good marketing.
Q: What is making today’s consumers more intelligent?
A: It’s part of the women’s movement. They read labels; they have good jobs; they’re responsible. They’re people who are smart about science and interested in our culture. And they’re mothers, so they want to preserve [the planet] for their children. It’s the male’s nature to conquer. You see very few women out hunting; at least, I have very few women who try to hunt on my property!
The average woman puts 17 different types of products on her body. They’re exposed to dioxins in cleansers and shampoos. The majority of dyes use petrochemicals. Anything you put on lips goes into the bloodstream. It causes bladder cancer and liver cancer. And it’s in mother’s milk—that’s why cancer in children has increased 125 percent since the ’70s. Sperm count is down 47 percent. We are losing the ability to reproduce. We live in a world we’ve never lived in before.
All of this crisis is a great opportunity. That’s where the eco-preneur comes in, bringing new paradigms. Beauty products are supposed to make you beautiful—how can they make you sick? Look at the brilliant brainwashing. The gorgeous models— they’re so sexy. It was only when the culturally creative people started addressing this that change started happening.
Q: What’s behind your own environmental awareness?
A: People tell stories when they build a company. It becomes a mission, a vision, and it becomes part of your success. I did it with shampoos. [As a hairdresser], every time I mixed a hair color, it hit my lungs. When you color gray hair, that gassy smell penetrates into your core. I constantly went out [to suppliers] and said “Can you give me something that is not unhealthy?”
If you spend a lot of time in silence, you become a listener, a student of yourself, which is called the mind/body relationship. If you get into the mind, you realize there’s a body connected to it. Then when you get into the body, you realize there’s a greater body. And you go “Oops! I am that body”—which is the Earth. It’s evolutional. My education is street education. I realized I have to continue to learn about the world we live in, so now I’m a true student—an ongoing student. I’m a simple guy who loves animals and flowers and nature—and who pays attention.