Skanderbeg Capital recently caught up with Edward Wright, a Director at Greenscape Capital Group, to chat about the emerging market in environmentally friendly luxury retail products.

This post is slightly longer than the usual, but well worth the read.

Read time: ~10 minutes

The bio:

Mr. Wright, until 2006 was the Executive Vice President of Retail in North America for Cartier, a top international luxury brand with a storied history dating back to the 1800’s. Prior to Cartier, Mr. Wright held the position of President of Baume & Mercier since 2002. While at Cartier, Mr. Wright was responsible for the development and operations of the entire North American retail division.  His success and extensive experience in the luxury retail business coupled with his more recent shift to the “green” investment world positions him at the forefront of an ever growing trend of investors.

The Q and A:

Skanderbeg Capital Group (SCG): A new focus of yours, via a directorship with Greenscape Capital, is on eco-luxury products in the retail sector; what is the common tendency of consumers in this market and how sustainable is that tendency?

Edward Wright (EW): “We’re on the cusp of a major shift in consumer tendency – consumer mindset really.  I don’t believe it’s a question of whether or not the tendency is sustainable or not, rather it’s a question of how long will it take for this shift become mainstream and generally accepted?

We’re really just seeing the beginnings of the consumer knowledge base for sustainable and environmentally friendly products.”

SCG: What led you to delve into sustainable/environmentally-responsible business in the first place?

EW: “I’m predisposed to have some fundamental inclination towards sustainability and the green shift.  I have children – when you have kids you think much more deeply about your individual impact on the environment, the lasting impact of your actions, even the impact of your investments.

Having spent a lot of time in Europe, where the green movement is much more established, I have a unique perspective on what is possible and I’m excited about the prospects.  I know it’s just a matter of time before what I’ve experienced there, migrates to North America.

I have a friend who heads up a global eco-packaging company based out of China and over the course of many discussions regarding international markets for sustainable consumer goods, he suggested I meet his contacts who are at the forefront of the green shift here in Canada.

I met Bryan Slusarchuk and was immediately enthralled with the idea and the chance to be a part of Greenscape Capital Group.  I was given an early introduction to Tina Hoffer, Managing Director at Lela Designs.  Her passion and keen business sense were immediately apparent.  I remember thinking that emerging companies like Lela, with a bit of capital behind them, would really take off.

I recognized something that luxury retail conglomerates already do all over the world outside the green space – that is, you can really thrive as a group if you can capitalize on the synergy created between multiple ventures with the same ultimate philosophy.

If the fundamentals are solid – then each of companies can play off one another to benefit themselves, but also the group as a whole.”

SCG: Do companies “go green” from some inner moral inclination, or is this move merely a recognition of the fact that there is indeed a trend?

EW:  “I think it is largely a moral issue.  For many, it really is something that they believe in.  However, there are those who will see this shift in consumer mentality – the shift towards sustainable and environmentally responsible products – as an opportunity to capitalize, in a PR sense, on consumer ignorance.

We are on the cusp of this shift – in North America  – and people have expressed a concerted desire to make a change, but they don’t always know the difference between a truly responsible company, and one who’s just done some fancy PR work.

SCG: In light of this, the same question can reasonably be applied to individual investors. What drives an investor to seek out environmentally conscious and responsible companies for potential investment?

EW: “Not every investor is so morally driven.  Many, of course, are just looking for returns.

Regardless of what the investment community thinks or from where their investment decisions come from, in a short period of time this shift in mentality will drive global demand for these types of products.

SCG: So, what constitutes a truly green investment? For example, does the multinational oil conglomerate that spends millions on land reclamation and rehabilitation achieve such a status? Or, must a company be purpose built for environmental protection or stewardship? – and where does Greenscape fall in the mix?

EW: “A business has to be realistic about its approach.  If you are a purpose built green company who specializes in wind power generation, for example, then that’s one thing.  But if you’re, say, a retail goods company, you have to consider your responsibility to your shareholders.  If, for example, you need to package your product in such a way that it is marketable, and for this particular product that requires a small plastic window to highlight it’s qualities.  Well using plastic, a fundamentally detrimental material for the environment, was necessary in this case.  But overall if you’ve managed to manufacture it, package it, box it, and ship it in the most environmentally responsible way possible (save for the plastic window) then that’s something.

A truly green company, whether purpose built for environmental stewardship and innovation or just a plain old retail goods manufacturer, has to have the right intentions and the right short, medium, and long term goals and purpose.”

SCG: How do eager, well-intentioned investors see through the fray, identify truly environmentally conscious products and organizations, and avoid falling victim to deception or misdirection?

EW: “Well you need to do your due diligence.  Today, the availability of information is remarkable.  One’s ability to research a product, a corporation, or a stock puts so much power in the hands of the individual.

However, I think the government plays a role here too.  There needs to be some well defined standards in this space, some accreditation procedures to really hold the corporations accountable.  Al Gore has been tirelessly advocating this type of legislation since the 1980s.

SCG: What value proposition does a company like Greenscape Capital offer consumers, that isn’t already being offered in the marketplace today?

EW: “It really comes down to the synergy I mentioned earlier.  Greenscape is going to be able to get ahead of the curve by utilizing this sort of shared knowledge base – and in some senses a shared services base – and to be able to leverage it for success in this new space in the market.”

SCG: This really is a relatively new space of the market to be in. Is there any risk that being a “green” company is simply a fad or a short-term trend and that in 10 years time, nobody will care whether or not company’s are acting in environmentally responsible ways?

EW: “No, is the short answer.  I would think quite the opposite – in 10 years time, if your company isn’t acting environmentally responsible, you’ll simply be cast aside and abandoned.  This is just the tip of the iceberg.  Anyone who thinks that the disastrous environmental situation that we currently find ourselves in is just going to disappear is living in a dream world.  Even if we manage to solve some of the big problems, climate change for example, there will be others.  That much is certain.

For a long time people were in a real state of denial.  We all bought gas guzzling SUVs for years (at least in North America) and the manufacturers followed suit;  they too were in denial about a number of these environmental issues.

We’re getting to the point now where the consumer awareness is driving the types of goods and services that are on the market.  This shift is really starting to take hold.

Today, and this is really what is going to get North America caught up with Europe, there’s money.  As people continue to learn and the market evolves accordingly, there will be a greater financial resource base to draw from in the quest to innovate.  The really smart companies are already well on their way.”