If the raw material for your product came from a tiny island in the middle of the Pacific Ocean, you’d probably go the extra mile to reduce your company’s environmental impact, too. Last November, Fiji Water made the bold commitment to take its bottled water “carbon negative,” earning public raves – and raspberries – depending on who’s doing the talking. In this SLM interview, Thomas Mooney, Fiji Water’s senior vice president for sustainable growth, explains how the company is planning to make good on its high-profile promise – and answers the criticism that “bottled water” and “sustainable” don’t belong in the same sentence. (To listen to our conversation with Thomas, click here.)

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SLM: Thomas, I understand you're Fiji Water's very first SVP for sustainable growth. Why don't you begin by telling us exactly what's in your inbox at the moment.

Thomas: Well, starting January 1 of this year we became the first carbon negative bottled-water product in the world. We've also entered into a partnership with Conservation International to protect the largest rainforest in Fiji, an area called the Sovi Basin.

Back in November, we made a public commitment that by 2010 we're going to reduce by 25% the greenhouse gas emissions associated with the entire product lifecycle - from making the product to putting it in consumers' hands and everything in between. For example, we're working both to reduce the amount of materials we use in our product packaging and to increase the amount of recycled content our packaging contains. Right now we use recycled content in our cases but not in our bottles, and we think there's an opportunity to use a lot more of it.

The environmental impact of product packaging was actually one of the biggest surprises we had during the process of measuring our carbon footprint. People often talk about the distance between Fiji and the markets we serve, but it turns out that, like almost all other packaged beverages or foods, our product's single biggest contribution to greenhouse gas emissions comes from the packaging itself -  the energy required to manufacture it. So that's why packaging is major focus of our environmental efforts.

We've also made a commitment that by 2010 at least half the energy that powers our bottling facility in Fiji will come from renewable sources. Since then we've made a lot of progress on technical solutions for that. For example, we're looking at installing a wind farm that would be designed specifically for the area. It's a process that's going to take time, but I would say we're well on track.

In addition, we think there's a tremendous amount of room for improvement in the way we ship our product. We can't bring Fiji any closer to Los Angeles or San Francisco or New York, but we can certainly influence how our product travels from Fiji to those markets. For example, we want to keep our product on ships for the bulk of the journey, using rail or trucks to deliver the product only as a last resort. The greenhouse gas emissions per ton per mile are far lower for large ocean vessels than they are for rail or trucks.

Finally, we're focusing more on recycling. Another thing that surprised us when we measured our carbon footprint was the degree to which recycling impacts that footprint. Recycling a Fiji Water bottle so that that material can be reused wipes out a third of the overall emissions associated with the product's manufacture and transport. There's no single thing we can do to change the way we do business that has as big an impact as what you the consumer do when you're done with our product, so we're working on a number of public initiatives to increase U.S. recycling rates. That will in turn help reduce the carbon footprint of our product as well as all the other bottled beverage products out there on the market.

SLM: Why the decision to go carbon negative instead of just carbon neutral? Did it have something to do with the fact that Fiji is so far away from your points of sale?

Thomas: Actually, no. We're obviously sensitive to people's concerns about how far the product travels, but ocean freight is not our number-one or even number-two driver of emissions. It is an important number overall, but Fiji Water bound for the U.S. and other markets around the world travels on ships that are regularly scheduled and would have been making the trip anyway. For the record, though, we do tax ourselves with our fair share of the carbon emissions associated with those voyages.

I think the decision to go carbon negative has more to do with the overall philosophy of our company. We see ourselves as being in the business of making the world better, not just leaving things the way they were. That applies to the nation of Fiji, where we've become the country's most important driver of economic development. It also applies to our consumers in many markets because the bottle of water they drink today replaces the processed beverage they were drinking a few years ago. The idea that we as a business should be making things better is the main driver behind our decision that we should take out more greenhouse gas emissions than we put in and not just balance the amount. In doing so, we give our consumers the opportunity to be a part of the solution as well.

SLM: You mentioned earlier that Fiji Water is somehow taxing itself for its greenhouse emissions from ocean freight. How are you measuring and accounting for your carbon footprint?

Thomas: We've adopted the WRI/WBCSD Greenhouse Gas Protocol, which is an internationally recognized accounting framework. We decided early on that we didn't want to just count the Fiji Water company emissions but the product lifecycle emissions as well. Which I think is fair - if you as a consumer pick up a bottle of Fiji Water and we tell you that it's carbon negative, you don't care about who controls which assets, or that a company that is not Fiji Water made the packaging or owns the ships that transported that bottle of water to market. To you, the entire lifecycle and supply chain of that product is one thing, and if we say the product is carbon negative that's what we have to mean. In the terms of the GHG Protocol, we are accounting for Scope 1, 2, and 3 emissions - not only direct emissions from our manufacturing operations but also emissions both before bottling (packaging materials, etc.) and after bottling (shipping and transport).

SLM: Fiji Water has stated that after reducing its greenhouse gas emissions 25% it will offset 120% of the remaining emissions through investment in renewable energy projects - hence "carbon negative." Does your collaboration with Conservation International figure into that?

Thomas: Yes and no. We have two different projects in the works with CI. The first - the protection of the 50,000-acre rainforest in Fiji's Sovi Basin - is purely a conservation effort and is therefore unrelated to our efforts to make Fiji Water a carbon negative product. If anything, think of it as what Kyoto forgot: It is an effort to avoid deforestation and in doing so prevent what we estimate to be about 10 million tons of carbon dioxide from being released into the atmosphere by keeping those trees in place.

Our second project with CI - a reforestation effort in Fiji - does help offset the emissions associated with our business. Rather than go to the open market to purchase the offsets that we needed, we wanted to know that things were being done right. That to us meant having direct control over the project, essentially being able to look out the window and see the trees growing. CI is a highly credible partner in this effort, providing both technical advice and independent verification that we are taking out of the atmosphere at least 120% of the greenhouse gases that our product puts in throughout its lifecycle.

SLM: Credibility is definitely key, especially given the increasing public skepticism about companies' green claims. In November, when Fiji made it's big announcement, Michael J. Brune, executive director of the Rainforest Action Network told the New York Times: “Bottled water is a business that is fundamentally, inherently, and inalterably unconscionable. No side deals to protect forests or combat global warming can offset that reality.” How do you respond to that?

Thomas: Well, of course, we disagree. Bottled water does not replace water that comes from the tap. Instead, it replaces something else that people were buying in packaged form. If you look at beverage industry figures you'll find that the growth of bottle water essentially matches the decline in carbonated soft drink sales. That means that people are trading their Cokes or Pepsis for bottled water - a product that is not only healthier but also has a much smaller environmental footprint, in terms of both greenhouse gas emissions and packaging materials. It takes a lot more energy and packaging to keep a carbonated beverage in place. When you think about it that way, as the bottled water industry grows the overall environmental impact of the beverage industry in fact goes down. It's just a matter of putting it in context. We certainly don't argue that the environmental impact of bottled water is lower than that of tap water. But that's not what we're replacing.

The other part of it is, what would happen to the island of Fiji if our company wasn’t there? The million people who live there deserve the benefits of economic development, and the way they're going to achieve that is through trade with the rest of the world. Neither you nor I nor Mr. Brune can bring Fiji closer to those markets. If Fiji Water just went away, Fiji would lose 3% of its GDP, 20% of its exports, and several hundred of its best-paid manufacturing jobs. Who's going to replace that? The country would have to find other ways to generate the income it needs, most likely involving activities that have a higher environmental impact than Fiji Water does. The Sovi Basin, until a few years ago, was a logging concession. A decision had already been made to log that entire area but, thanks to the efforts of Conservation International and later our own, that's been turned around. The bottom line is, if there is no Fiji Water to export, the island of Fiji will export something else.

Hear Thomas discuss his efforts to communicate with eco-savvy – and increasingly eco-skeptical – consumers at Sustainable Brands ‘08!