Friday, December 15, 2006

Environmental Issues Ahead for Corporations


I'll digress briefly from the conversation about carbon emissions and delve a bit deeper into the larger scale environmental issues that will challenge corporations in the next 5-10 years. The regulatory environment relative to climate change is in flux. Companies will be affected by stronger environmental rules and regulations that will impact their operations in nearly every way. It will become obvious, as leading companies begin to outperform the laggards, that is in the corporate world's best interest to stay ahead of the regulations. Outperforming companies will have adopted sustainable business activities and will be selling their success to their competitors in the form of consulting services.

As an example, here is a short excerpt from a recent article on the hazards of electronic wastes:
Priorities will include launching pilot projects to establish take-back systems for used electronic products; strengthening global collaboration on fighting illegal traffickers of such products; and promoting best practices through new technical guidelines.
Why not be ahead of the curve?

From another perspective, that of an employee of a company selling highly accurate and high quality instrumentation to the pharmaceutical industry among others, it is good to see citizens of that industry contributing toward a sustainable future.

Abbott Recognized for Sustainable Activities

Genzyme's Environmental Commitments

Friday, December 08, 2006

Offsetting Business Travel Emissions


So, what small actions will I take to be a sustainable business person? My first step will be offsetting carbon emissions from business travel through CarbonFund.org. Carbonfund was recently recognized as the #1 organization for voluntarily offsetting carbon emissions. Their robust verification methods along with value priced offsets make them the leader that they are. I had the pleasure of meeting a member of the Carbonfund team at a NetImpact meeting in Cambridge, MA in September. We have kept in touch over the past few months and he has agreed to help me record my business travel and guide me through my project. In the short term, I will simply purchase enough offsets to negate my auto mileage for the good ol' '97 Camry. CarbonFund offers three vehicles for offsetting carbon emissions, efficiency projects, supporting renewable energy, and reforestation. I plan to support renewable energy and energy efficiency projects.

In January 2007, I plan to set up a carbon fund account to more easily track and maintain my offset balance for the remainder of the year. I'll be chronicling the setup process here in the hopes that it will help others that may be interested in taking similar actions can use my experience as a resource.

Thursday, December 07, 2006

Green Job Changer?


I decided to leave Seven Cycles and the bike industry and join Thornton Inc. a manufacturer of instruments to accurately measure water purity in a variety of industries.

Seem like an odd transition? Not really. I spent six years in positions of increasing responsibility with Festo Corporation, a global pneumatic and electronic controls and service provider, before transitioning into the bike business in 2001 to pursue my newfound passion for cycling. Festo serves some of the same industries as Thornton, pharmaceutical and semiconductor to name a few, So I have a basic expertise in their operating procedures. Festo is also of similar size to Mettler-Toledo, Thornton's parent company, equipping me to navigate internally as well.

It was not an easy decision to make. Seven Cycles is one of the premier companies in the bike business, one that is striving to do things differently and better than any other company. In fact, its manufacturing system based upon lean manufacturing (minimizing waste) meshed with my overall interest in sustainable business. In the end, despite my affinity for Seven's mission and engagement in their success, It became clear after conversations with friends and family that the opportunity with Thornton was something I would not pass up.

For someone interested in sustainable business and renewable energy, why go back "to the dark side" as one of my associates called it? First of all, "the dark side" is probably not the best term. The fact of the matter is that all companies have the potential to make tremendous positive and negative impacts in the global community. Certainly there are companies that are currently making great sustainable strides, but the ones that have yet to take action to minimize their environmental impact represent the bulk of the world's businesses and therefore the greatest potential. Therefore, is it not in my personal best interest to accept a career growth opportunity with someone I have worked with before and in the planet's best interest for me to take some small action to spread the sustainable gospel to a new place? I think so.

Tuesday, November 07, 2006

Climate Change and The Bottom Line


The latest cover story from Inc. Magazine relates nicelty to the recent publication of the Stern Report on the impacts of climate change on the global economy.

As with any report, there are those that love it and those that hate it and those tat will just try and ignore it. What are we to do? Spend a small percentage of overall global GDP to stem the increasing carbon emissions contributing to climate change on the assumption that it will help? What is climate change is not happening? Will we have spent those billions for nothing? As I read somewhere before, the same argument can be made for buying insurance and investing in standing armies...it is a "what if?" scenario.

The World Business Council for Sustainable Development reports from Socialfunds.com that the investment world continues to ask for companies' assessment of their risks associated with climate change. I am glad someone is. The investment world's clout is an important element in the climate change battle. Do I have a say in this effort? If my 401k is in the right place I do.

At least this article highlights 50 companies that are taking action on their own, whether it be for altruistic reasons or otherwise. Thank you to them all.

Thursday, October 12, 2006

"Outdoorsey" Folks' Impact on the Environment


As my wife and I drove to Bar Harbor, ME for a family wedding over the weekend, I found my thoughts wandering toward the environmental impact of sports that would be considered "outdoorsey"; cycling, mountain biking, hiking, bike racing, rock climbing, kayaking, horseback riding, skiing, etc. You get the picture. The fact that I had two bikes strapped to the roof of my now not so fuel efficient Toyota Camry, acting as additional drag to help me burn more dead dinosaur and million year old rotten plant matter, made the thinking all that more pertinent.

Earlier the same morning, I got my butt kicked at the USGP of Cyclocross in Gloucester, MA, one of the best 'cross races in the country. I intended to use the same bike for some much looked-forward-to riding on the carriage trails in Acadia National Park.

How many millions of gallons of gas and diesel are burned transporting us to the activities we enjoy? How many barrels of oil are used in the manufacture of the synthetic fabrics and high tech gear all of us recreational folks "need"? Are the activities enjoy in danger due to the very activity we enjoy? Talk about a conundrum?

Sunday, September 24, 2006

Outdoor Industries Support Sustainable Efforts


We are getting ready for the Interbike Trade Show, starting on Wednesday, Sept. 27th. The past few weeks have been a flurry of activity, creative energy, and some good-natured stress. In a few days, in what seems to be a few minutes, it will all be over and we will be laughing about the things we were worrying about.

The headline of this post is a good thing. Tradeshows and expos consume many thousands of megawatt hours of electricity yearly, and the fossil fuel emissions associated with the airline transportation for the hundreds of thousands of global attendees is an important contributor to green house gas emissions. At least it's more efficient than everyone driving individually.

I still imagine a day when every last bit of manufactured materials or transportation energy will be reused or created from a sustainable source. Well, 100% reuse may not be physically possible, but any part of the item that does not get remanufactured will dissolve harmlessly into the environment. Utopian? Yes. Hopelessly utopian? No.

Friday, September 22, 2006

New Greening of America

Newsweek's the New Greening of America.

This article came up in conversation last week as I attended an after work networking event with the Green Drinks crew. It was a refreshing evening, with talk among like-minded professionals about engaging capitalism in the quest to "save the planet".

Wal*Mart's commitment to greening their supply chain may have some teeth. In correspondence with a business acquaintance familiar with both the practice of sustainability and what Wal*Mart is seeking to accomplish, he is cautiously optimistic about their capabilities and their intent. The reality of the situation is that once Wal*Mart sees a potential cost savings they can pass along to their shareholders, they'll pursue it with dogged determination. This effort is driven by the potential cost savings, but the fact that it may potentially clean up their image is certainly being massaged by their spin doctors. Perhaps they are thinking that reducing fossil fuel use will make people forget about the whole healthcare/part time worker issue?

Speaking of healthcare, Wal*Mart, and sustainability, what would happen if Wal*Mart applied its buying power to something like fluorescent light bulbs, not just for sale, but for its own use? It's already happening. Look what's happening as it enters prescription drugs. 70% savings on some drugs; what does that mean to the consumer? What would 70% off of sustainably produced coffee do? Make the workers suffer? Increase sales and therefore create more revenue for the workers?

I attended the Portsmouth Crit today. I'll not bore you with recapping the race. It is enough to say I showed up, started and lasted less than 1/2 the 45 minutes. Lame. Soon after, I found myself reading news on the Portsmouth Herald website about wind energy and the fact that citizens in the oh so much more environmentally aware country of Denmark actually do not ALL want wind energy. What?! You mean they are not ecstatic over every last wind energy proposal?

Thursday, June 08, 2006

Declaring War on the Cul-de-Sac


I grabbed the June 2 edition of the Wall Street Journal at Logan Airport on my way to catch a flight to Charlotte, NC. As I read through the articles there were two related to energy issues and sustainable development and the economic connections between the "free market" and regulation that caught my eye. The first was, with a similar title as the header of this post, entitled The Suburbs Under Siege located on the front page of the Weekend Journal section. The second headline read, "Rising Energy Costs Pinch Low-Income Shoppers". What's the relationship?

The beloved cul-de-sac, a standard feature of subdivisions from coast-to-coast, seems to be losing its luster to local and regional planners. While homeowners clamor for lots that occupy the low-traffic "bottom of the bag" (the term "cul-de-sac" is "bottom of the bag" in French) and developers work to squeeze as many as they can into a development to cash in on the higher prices consumers will pay, local planners are finding the traffic congestion they contribute to a problem. Living in Massachusetts, where the sprawling suburbs of other areas are not as common, I have not experienced the lure of the cul-de-sac. Little did I know that the city I was destined to land in that day is one of the areas where the cul-de-sac is under attack. The outflow of population from central cities starting in the 1960's and the desire for winding country-like lanes and quiet side streets helped fuel the cul-de-sac fire. While communities from Minnesota to Oregon to South Carolina changing zoning ordinances to limit the number of cul-de-sacs in new developments, what will people do? Luckily, there are many other community design options to create quiet and pleasant streets. Small, well-defined traffic circles, speed tables, narrow roads, and woonerfs are some options. Walkable Communities has some nice photographs of these and other options. Of course, as far as source reduction goes, people will still be driving.

Now, rising energy prices will, by necessity, curb the purchasing power of lower income shoppers. A simple analysis shows that energy costs, rent, and transportation will consume a larger percentage of a low earning families' income. It is far easier for someone earning $80k per year to absorb a 50% increase in a heating bill than someone earning $25k. This fact is echoed in recent retail sales statistics that indicate strong sales at high-end stores like Nordstrom and Neiman Marcus while Dollar General and even the mighty Wal*Mart warn that their core customers are concerned about energy costs. We shall see how things pan out. What if the people that lived in the cul-de-sacs could walk to the Wal*Marts and Dollar stores? Would the fuel savings keep the pace of sales flying at these retailers?

Then, the final bit of press that caught my attention, enough to pry $3.99 out of my pocket, was the US News and World Report with the cover reading, Global Warming; Can We Live With It?. I suppose there is some rationale for thinking about how to live with it, since global action to address it does not seem to be making progress.

Tuesday, May 16, 2006

Remembering My First Exposure to "Sustainability"


I recently prepared my thoughts on sustainability in an organized way and found one of the passages I read sometime in 2000 or 2001 from Natural Capitalism that helped me realize that our industrial production systems are broken.

Here it is.
A striking case study of the complexity of industrial metabolism is provided by James Womack and Daniel Jones in their book Lean Thinking, where they trace the origins and pathways of a can of English cola. The can itself is more costly and complicated to manufacture than the beverage. Bauxite is mined in Australia and trucked to a chemical reduction mill where a half-hour process purifies each ton of bauxite into a half ton of aluminum oxide. When enough of that is stockpiled, it is loaded on a giant ore carrier and sent to Sweden or Norway, where hydroelectric dams provide cheap electricity. After a monthlong journey across two oceans, it usually sits at the smelter for as long as two months.

The smelter takes two hours to turn each half ton of aluminum oxide into a quarter ton of aluminum metal, in ingots ten meters long. These are cured for two weeks before being shipped to roller mills in Sweden or Germany. There each ingot is heated to nearly nine hundred degrees Fahrenheit and rolled down to a thickness of an eighth of an inch. The resulting sheets are wrapped in ten-ton coils and transported to a warehouse, and then to a cold rolling mill in the same or another country, where they are rolled tenfold thinner, ready for fabrication. The aluminum is then sent to England, where sheets are punched and formed into cans, which are then washed, dried, painted with a base coat, and then painted again with specific product information. The cans are next lacquered, flanged (they are still topless), sprayed inside with a protective coating to prevent the cola from corroding the can, and inspected. 
The cans are palletized, forklifted, and warehoused until needed. They are then shipped to the bottler, where they are washed and cleaned once more, then filled with water mixed with flavored syrup, phosphorus, caffeine, and carbon dioxide gas. The sugar is harvested from beet fields in France and undergoes trucking, milling, refining, and shipping. The phosphorus comes from Idaho, where it is excavated from deep open-pit mines—a process that also unearths cadmium and radioactive thorium. Round-the-clock, the mining company uses the same amount of electricity as a city of 100,000 people in order to reduce the phosphate to food-grade quality. The caffeine is shipped from a chemical manufacturer to the syrup manufacturer in England.

The filled cans are sealed with an aluminum "pop-top" lid at the rate of fifteen hundred cans per minute, then inserted into cardboard cartons printed with matching color and promotional schemes. The cartons are made of forest pulp that may have originated anywhere from Sweden or Siberia to the old-growth, virgin forests of British Columbia that are the home of grizzly, wolverines, otters, and eagles. Palletized again, the cans are shipped to a regional distribution warehouse, and shortly thereafter to a supermarket where a typical can is purchased within three days. The consumer buys twelve ounces of the phosphate-tinged, caffeine-impregnated, caramel-flavored sugar water. Drinking the cola takes a few minutes; throwing the can away takes a second. In England, consumers discard 84 percent of all cans, which means that the overall rate of aluminum waste, after counting production losses, is 88 percent. The United States still gets three-fifths of its aluminum from virgin ore, at twenty times the energy intensity of recycled aluminum, and throws away enough aluminum to replace its entire commercial aircraft fleet every three months.
Wow.

Wednesday, April 12, 2006

Greening Business


I attended a portion of Harvard Business School's "Green Week" recently, a screening of the 2001 Documentary The Next Industrial Revolution and a panel discussion labeled "Bringing Environmental Sustainability to Business".

I read Cradle to Cradle by William McDonough and Michael Braungart a few years ago. I found the book interesting in its content and its form. It was printed on pages made of plastic resins and inorganic fillers designed to be recycled by conventional methods. From a content perspective it was full of the visionary messages promoting sustainability one would expect along with examples of how industry benefits from adopting design methodologies based upon natural models. It was worth the time I spent reading it.

The documentary, narrated by Susan Sarandon with a bit of an "advertorial" tinge to it, is worth viewing. It regurgitated a fair amount of Cradle-to-Cradle's content and added information in the form of interviews with Mr. McDonough and Mr. Braungart along with the people involved in the profiled projects. The projects from Rohner/Designtex, Ford, Nike, Oberlin College, and Herman Miller were very interesting, informative, and most of all, inspirational. There are companies and organization that are taking sustainability seriously. The changes are incremental, not sweeping and discontinuous as one may hope, but realistic in their scope and their execution.

What was most interesting to me was the incalculable benefits to the employees of the companies that undertook these projects. There was a profound sense of connection, accomplishment, and dedication by the people involved. They were engaged in vision-chasing in a way that appealed to them on a gut/personal level. How do you value that? Businesses reap the financial benefits of these projects, in part fueled by the productivity increase brought on by happy and engaged people. There is a power in this that cannot be underestimated.

What I am most concerned about from a long-term perspective is Ford's River Rouge project. This greening project started in the late 90's and was slated to take 20 years. Will the company be here in 20 years? With the immense financial pressure to reduce costs in the highly pressured automotive industry will this commitment last? Is the Greener Miles program for Ford vehicle owners a sign that their commitment is firm?

The panel discussion took place the afternoon following the documentary's screening. With the title "Bringing Environmental Sustainability to Business" I had high hopes for learning more from enlightened professionals. The panel was dedicated to discussing how sustainability was integrated in their companies; at what level and with what results (if any). The panel represented a fair cross-section of companies, including:
Tom Votta, Deputy Director at Chemical Strategies Partnership (CSP)
Paul Ligon, Upstream Waste Management
Eric Hudson, President and CEO of Recycline
Ed Costa, Director Global Technology Value Solutions (TVS) HP Financial Services
Jim Stanway, Project Manager Wal Mart
Professor Richard Vieter introduced the panel. Though I do not know any business school professors, he fit my preconception; tall, bespectacled, respectable, and somewhat stodgy looking. He led off the conversation with a healthy dose of skepticism, wondering if companies reap benefits in the form of competitive advantage and higher profitability when they undertake sustainable projects. While he indicated that there is some value in the concept, his overall tone was clearly pessimistic.

Mr. Votta led off the panel discussing CSP's efforts to help companies reduce the amount and number of chemicals they use. The main thrust of their efforts are to engage companies in the leasing of chemical services. In this business model, companies hire outside entities to provide the service they would normally buy the chemicals to perform. The vendors' incentives are to most efficiently and conveniently provide the service, not simply sell the product. In this way, waste is dramatically reduced and efficiencies increase. Everyone makes money. The incremental efficiency gains fall over time. The longer the system has been in place, the less efficiency there is to ring out of it. The example Mr. Votta used was that of automotive paint services. Companies like DuPont & PPG become part of the production flow, taking responsibility for the paint process. They are paid for the service of painting a chassis, not simply delivering paint in a sealed container. Therefore, it is in Dupont's or PPG's best interest to reduce waste as much as possible. The next step; eliminate the nasty chemicals found in the paint process in the first place.

Next up was Jim Stanway of Wal*Mart. He was candid about the fact that Wal*Mart launched their multi-faceted sustainability project as a response to the attacks Wal*Mart has been weathering over the past few years. Let's face it, Wal*mart is an enormous target. They are accused of everything from destroying small, downtown America to health care abuse, to driving slave labor practices in the third world. Whether or not people "like" Wal*Mart is irrelevant, they are supply chain management geniuses and have the purchasing power to direct the creation of the goods they sell. What Mr. Stanway was very good at was integrating Wal*Mart's core mission of [and I paraphrase] "Improving the quality of life of the average American by lowering prices" into the reason they are working on sustainability. It is not a "fluffy feel-good" project, it is something they view as yielding competitive advantage in the marketplace allowing them to sell more and increase the returns to their shareholders. What started as a defensive strategy turned into a core plank of their corporate strategy and marketing efforts with a large focus on their operations and influence in China.

The key elements of Wal*mart's program are:
  1. Zero Waste: Mr. Stanway keyed on excessive packaging as one of the main culprits, and I agree it is a good place to start. The fact is that everything is waste. Every item in a store that does not have an end-of-life design for complete reusability or biodegradation is waste. 
  2. 100% Renewable Energy: This requires Wal*Mart to play the part of investor. They do not have any interest in operating power plants, so their goal is to look upstream to the power providers and create demand for renewable energy. Signing long-term energy procurement contracts will do this. This is similar to what some military base administrators have done as a response to President Clinton's Executive Order 13123 from 1999.
  3. Sustainable Products: With Wal*Mart's clout in the supply chain, perhaps they will have an impact on their vendors' material and packaging procedures and practices. After all, they are an enormous force in the marketplace, and the opportunity for change is real and recognized.
I am sure they will be under the spotlight by environmental and SRI groups. Let's they're committed and serious.

Eric Hudson of Recycline stepped up the podium to share information about Recycline. I learned about Recycline a few years ago, I believe in 2001, when I started attending local events focuses on sustainable business. Eric was sometimes in attendance and helped encourage my continuing interest and research on sustainable business. Recycline was launched as a company to change the way we make things, appealing to "green" consumers that were willing to pay a premium for environment friendly products. As Eric mentioned, the Preserve toothbrush, Recycline's original (and still selling)product manufactured from used Stonyfield Farm yogurt cups, is the #1 selling toothbrush in the $40 billion natural food sector. More importantly, as the product matures, costs come down, more companies pay attention to green consumers, and the Preserve makes its way into larger retailers. A moment in the question and answer session that garnered a few chuckles was when Eric was asked about supplying a product like the Preserve, one dedicated to sustainability, to a company like Wal*Mart, one perceived as being on the other end of the sustainable spectrum. Of course Eric was seated next to Mr. Stanway. The potentially awkward moment was laughed off with a succinct answer about evaluating each distribution opportunity with equal and deliberate rigor.

I was looking forward to Ed Costa's talk about what HP is doing in the sustainability realm. I attended the 2005 CERES Conference in Boston and heard a member of HP discuss sustainability reporting and what it means to the company. While HP receives good marks for its reporting and its commitment to reusing old equipment, the overall electronics industry is still struggling mightily with what to do with its products when they are used up. It is a monumental task, dealing with this "e-waste". E-waste contains harmful substances like cadmium, lead, and mercury. Here is where I start to wonder about what we are doing with the health of our peoples and our planet when it somehow becomes OK to release known carcinogens into the environment we live in. Why is this acceptable? But I digress.

Ed showed us a video co-produced by the EPA highlighting HPs reuse program, a successful effort to keep old computers out of landfills. What happens when they really are scrap? The answer to this question, with all due respect to Ed, was less than satisfactory. They are disposed of "responsibly". There is no such thing. This is where regulation, undertaken properly, will help move industry in the right direction. Ed mentioned RoHS and producer take back legislation. This is a stronger concern for electronics manufacturers serving the European market. When it becomes in the suppliers financial best interest to create a product that they can reuse and "mine" for the creation of the next wave of products, they will act. I challenge HP to look beyond regulation and design the toxins out of their products in the first place. An ounce of prevention is worth a pound of cure.

The final speaker of the afternoon was Paul Ligon of Upstream Waste Management. I must admit that the idea WM came up with, of digging upward though companies' waste streams to reduce their waste and therefore increase their efficiency was quite interesting. He quoted an interesting statistic, for every $1.00 spent on disposal, a company spend $3-10.00 generating the waste. I suppose the sales pitch goes that if you eliminate that dollar in disposal costs, you have the potential to reap a $3-10.00 contribution to the bottom line. WM just takes a small cut. In any case, they analyze the customer's production systems, which are for the most part linear in today's manufacturing environment, and look for used and/or damaged materials that are no longer part of the value stream. By digging into these areas WM helps the company fix problem areas, reduce waste, and increase profitability. Upstream WM is the fastest growing and most profitable portion of WM's business.

With my interest in the impact of transportation on our energy use, I followed up with Mr. Ligon after the talk, remembering his comment at the beginning of his presentation that WM has one of the largest truck fleets in the world and thousands of landfills under management. Opportunity! With a diesel trash truck averaging 3 mpg, emitting particulates and GHGs linked to asthma and climate change, and oil topping $70.00/barrel, lets fire up the alternative fuels. I talked briefly with Terry Huie, an associate of Mr. Ligon's also attending the event about their work in biofuels, landfill gas, and the fact that in 10-20 years we'll be mining landfills for much more than methane.

With reports like the EPA's Toxics Release Inventory reporting the "good news" on toxic emissions reductions, there is still plenty of work to do.

Wednesday, March 15, 2006

Global Petroleum Showdown


Since I am clearly an expert on international politics, energy policy, and diplomacy, I thought I would take a few minutes to investigate the impending international conflicts over access to petroleum-based energy.

From today's NYTimes
House Advances Iran Sanctions Bill

Seems that the United States would like to add a potentially severe economic penalty to any country that would dare question our wholehearted desire to promote democracy and freedom in the Middle East. Well, since China and Iran have a mutually beneficial relationship to the tune of $9.5 billion a year (up 23% in 2005) in trade, we'll be annoying our symbiotic partner, China, in the Pacific Ocean Freighter Exchange.

The commentary in the Asia Times from February 10, 2006,
China's energy insecurity and Iran's crisis, indicates that it is more important for China to maintain a friendly relationship with the United States than pursue energy deals with Iran, potentially helping them fuel their nuclear energy aspirations. According to the Energy Information Agency, China's dependence on foreign oil reached 40% in 2004 and their growing economy accounted for about 1/3 of the global demand-increase from 2001-2004. It is clear that a stable Middle East/Persian Gulf is critical to China's continued growth.

Speaking of nuclear energy and economic growth, what about India? Various headlines from The Economist to Pravda have weighed in on President Bush's recent visit to India and subsequent deal with the government of India to share nuclear energy technology.

Dr Strangedeal

George Bush thinks nuclear agreement with India could help lower fuel prices

It will remain to be seen how the decision to share nuclear technology with India, a country sanctioned by the United States in 1998 for their nuclear testing, will affect long-term energy prices and nuclear weapons proliferation. With these mixed signals received by Iran and North Korea, the international negotiations with these countries over the next few years should be interesting.

In the words of Senator Lieberman (D-CT)
We are heading towards two-thirds [reliance of] each country on ... foreign oil. Let's recognize this problem before it becomes an intense competition which can actually lead to military conflict.
Is this the beginning of Senator Barack Obama's 2008 campaign platform?

Monday, March 06, 2006

The Luxury of Travel


"Flying Kills" may be an overstatement, and incomprehensible for some people, like how individually driving large inefficient vehicles can contribute to poor air quality, or how one person's decision to block an intersection contributes to traffic congestion. Of course, it's all the miniscule individual actions that add up to a larger problem, or in some cases, a solution.

Air travel is not something that will just go away. What is the global economic adder attributed to air travel? It must be in the trillions of dollars globally. There are technologies that help reduce the need for travel, like using online presentation services or video-conferencing. What about recreational travel? This is less likely to be curbed by technology, though if we take a page out of the movie Total Recall perhaps we will live the utopian world where memories of vacations are implanted in our brains. It will save us time, money, and help save the planet!

An excerpt from the article, that references the silver bullet of hydrogen fueling the planes, the same technology that many in the transportation sector thinks will save us,
...The airline companies keep talking about hydrogen planes, but if ever the technological problems were overcome, they would be an even bigger disaster than the current models. "Switching from kerosene to hydrogen," the Royal Commission says, "would replace carbon dioxide from aircraft with a three-fold increase in emissions of water vapor." Biofuels for airplanes would need more arable land than the planet possesses. The British government admits that "there is no viable alternative currently visible to kerosene as an aviation fuel."
The quote brings me back to the conversation I had with my friend about alternatives to long-lasting plastics that depended on corn for their raw materials. Eureka! The answer is biofuels! Oops, everyone else wants it too.

An element of the debate about conserving resources is geo-political stability. With emerging economies like India and China looking for sources of energy and striking deals to fuel their growth, the potential for conflict with the existing economic powerhouses of the West increases. In addition, these emerging economies may not be so keen to join others of the "peaceful" world in refusing sanctioned countries' energy sales. The emerging economies need the energy and the sanctioned countries need the money. That sounds like a win-win to me. In the long run, prices will rise, the squeeze on affordable energy and potable water will ensue, and voila! more violent conflicts.

The EU makes the following statement from "A New Energy Policy for Europe":
A number of converging factors support a renewed interest in developing a New Energy Policy (NEP) for Europe, inter alia: the lasting difficult situation on the oil and gas market, in particular the increasing import dependency and the resulting need for diversification, the growing importance of climate change, the need for increased transparency on energy markets and further integration of national energy markets with the energy market liberalisation nearing completion. These challenges are highlighted in a series of Commission Communications relating to several aspects of energy policy (from renewables, the biomass action plan and energy efficiency to competition and the operation of internal market). They are also reflected in the refocusing of the IEA's activities in connection with the 2005 and 2006 G8 focus on Energy, and the intensification of energy dialogues with third countries.
All these comments, quotes, and conjecture presents market opportunities.

Excerpt from the remarks of Sir Nick Stern, Head of the Stern Review on the Economics of Climate Change, at the Oxford Institute of Economic Policy Distinguished Lecture: 'What is the Economics of Climate Change?’ (31 January 2006), are best viewed along with these Powerpoint slides.
But I think nevertheless it's fairly clear that most of the action, or the lion's share of the action, in terms of choosing ways of moving forward, choosing how to save energy, choosing how to reduce carbon and so on, those choices will largely be by the private sector. So there's a very serious question of how does a government set the right kind of incentives for the private sector.

Now the private sector is actually quite specific on this point. They have a slogan which actually makes a lot of sense: the incentive structure should be loud, long and legal. But the loud, long and legal is actually vulgar for clear, long and credible. There's a difference between loud and clear and there's a difference between legal and credible. But if you're thinking about investments in the kinds of infrastructure and durables that we're talking about, it must be the case that the incentive structure is clear, long term and credible. And putting those kinds of incentive structures together is actually quite difficult. You have to try to bind yourself going forward in a way that governments find it quite difficult to do; a problem the economists have studied right across the board in other areas, including monetary policy, competition and so on.

Saturday, February 25, 2006

Building Blocks

Just as evolutionary biologists search for evidence of the primordial spark that catalyzed the reaction of methane, ammonia, and hydrogen to spit out the first amino acids leading to DNA, industrial engineers and sustainable business disciples must determine the makeup of manufacturing DNA. What is it made of? What core components of the millions of natural and man made compounds that end up in the manufactured products we buy and sell are reusable and harmless? Imagine if we completely eliminated thousands of chemicals that are harmful to the ecosystem (I include humans in the ecosystem) and focused on the materials, whether natural or synthetic, that are benign and reusable with low energy input. Would we have a menu of earth-friendly manufacturing ingredients to design and build every product we use? Would the warnings given to pregnant women to avoid eating some species of fish for fear of exposure to high mercury content be a thing of the past?

On a somewhat tangential but related note, I got to thinking about Corporate DNA as I picked up "The Sustainability Advantage" by Bob Willard again. I bought the book a few months ago in one of my intense moments of book buying. Of course, many of these books sit on a shelf or in a pile with other overlooked tomes awaiting my eyes' attention. As I started reading it again the section I left off with discussed the ingredients of a successful and sustainable businesses. The core ingredient is committed people. To create committed people, four elements are necessary in the person's perceptions; Clarity, Relevance, Meaning, and Involvement. From page 48 of "The Sustainability Advantage",
...visions inspire commitment by satisfying the Clarity, Relevance, and Meaning factors. A purpose is inspirational when it is clear, it relates to the success of the business, and it resonates with employees' personal values as a worthwhile goal. Corporations that adopt a sustainability goal as a higher purpose in their business mission will therefore create an energized workforce of people who only need the Involvement factor to be fully committed to the cause.
I found my thinking turning back to DNA's double helix. Companies are made up of people and ideas that are implemented through actions and the use of tools. Tools are computers, printers, fax machines, drill presses, lathes, vertical mills and so forth. The four factors listed above are required to unleash the creative talent of the people to use the tools. Where does sustainability come in? Mr. Willard's assertion is that a company with a high level goal to reduce its impact on the natural world or act as a restorative force for the environment provides the Clarity, Relevance, and Meaning people need. Would the researchers for a company seeking to eliminate all the potentially dangerous materials in their products be more engaged and therefore more effective in their work? Will the employees of these companies feel a heightened engagement in their companies? Will the companies' leadership help the employees understand the relevance of the companies' decision and what the employees can do to help?

Four Electric Power Companies in Midwest Agree to Disclose Climate Risks

In response to shareholder requests, four U.S. electric power companies in Missouri and Wisconsin have joined other utility companies by agreeing to assess and disclose the potential impacts from foreseeable regulations to reduce carbon dioxide and other greenhouse gas emissions. All four companies - Great Plains Energy, Alliant Energy, WPS Resources, and MGE Energy - have proposed building new pulverized coal-fired power plants that could be especially vulnerable to policies limiting greenhouse gas emissions. Similar shareholder requests are still pending with Dominion Resources in Richmond, Va. and Peabody Energy in St. Louis, Mo. The companies are among more than two-dozen U.S. businesses - including seven electric power companies, four oil and gas companies, six real estate firms, four big-box retailers, two insurance companies, two banks and one auto company - with whom investors filed global warming shareholder resolutions as part of the 2006 proxy season.

Read CERES' press release.

Monday, February 20, 2006

Quantification

The sdEffect was mentioned in two places recently, the WBCSD and GreenBiz. The authors of the report worked to quantify sustainable development activities in the language of finance; company valuation. This is extremely important to continue the movement of sustainable business activities into the "mainstream" thoughts of our capitalist business leaders. I found this excerpt interesting in its assessment of what the future holds for these studies:
Several important trends are converging to help facilitate more of this type of analysis in the future. 

  • First, as more and more measurement of corporate SD and its impacts takes place, an increasing amount of data suitable for translation is becoming available (e.g. continuously improving sustainability reporting, Corporate Knights Corporate Citizenship Database, etc.). 

  • Second, as stakeholder pressure continues to build to better understand the actual quantitative financial impact of corporate SD practices, and to more fully engage the financial community on SD, additional support is being provided for innovative projects such as this one. 

  • Third, global environmental issues such as climate change, which are now being commonly recognized as posing huge financial risks, are forcing unprecedented integration of considerations of sustainability in financial decision-making and in the operation of world capital markets (e.g. EU Emissions Trading Scheme).
Perhaps the largest opportunity lies in helping companies NOT on the leading edge of sustainability understand what they can do to maintain their competitiveness in their markets. These companies will need guidance to decipher the sustainable reporting methods available to them.

This Environmental Finance
article introduces the challenges facing large corporations seeking to report both the financial and social affects of their sustainability efforts. The importance of quantifying the financial impacts of sustainable activities, as demonstrated by the folks at sdEffect, will only grow as shareholders demand information.

An article from
The Christian Science Monitor's tackling "Bad Growth" (is the term "bad" used in a moral context?) contains an important piece of information from an energy company's senior executive. Carbon regulation is only a matter of time. The risks to a power generator investing in a power plant with a thirty year lifespan with regulatory uncertainty in the next 5-10 years is real and worrying. Do we start to see the need to quantify sustainable business activities financially?

Why should ethical investors worry about zoning battles?
Shapiro: As investors, we are concerned about the financial and reputational risk of the companies that we invest in. So if a big-box store is going to start encountering problems with placing their stores in an area ... this ends up being litigated, [or at least] slows their whole process down, at a great cost to the company and to its shareholders.

Are companies starting to change their growth strategies?

Shapiro: In
[Target's] 2004 sustainability report, they state that they, on average, are adding 100 new stores a year. And they delineate their decision processes for placement of those stores. So I think more and more companies are becoming cognizant of the concerns from the investment side as well as the public side. [And] a bank in North Carolina - BBandT - has recently issued a statement that it will not provide funding of private development of land that was acquired through eminent domain. It's the first bank to do so.

Are there other examples?

Seitchik: One area that investors are getting very focused on right now is the area of global warming and the risks that are associated with the potential regulation of global warming. The CEO of
Cinergy [a leading electric utility] has come out and said: "We know that greenhouse gases are a problem. We know they're going to be regulated in the future. And when we go to invest in a plant, it has a 30-year investment horizon. So there's a real risk to us - not only as managers of a company but also as investors - if we don't take into account the potential regulatory and litigation risks that come with that." So we're starting to see a lot more research in the area of risk-management around environmental issues.
John Elkington was interviewed recently, and I found some of his words most interesting and even reassuring. As the founder of SustainAbility Mr. Elkington feels that the challenges are numerous, varied, and complex, but there are many people working to overcome them.

I had lunch with a friend today. He helped me realize that the thoughts and ideas I have about career fulfillment and sustainable business are not irrational ideas to be stamped out by my inner critic, but were to be coddled and nurtured to help me find my clear way. As I continue to investigate sustainable business activities it is clear that it is an emerging discipline presenting many opportunities for learning and growth.

Tuesday, February 14, 2006

"Live Green Go Yellow"

The cynic within immediately thinks that the only reason there is a connection between GM and ethanol is because in some way there is a corporate quid pro quo. I can see the memo among the GM and ADM executives, something along the lines of, "we at GM will support the ethanol market while you at ADM purchase GM vehicles, promote GM vehicles, and create an ethanol blend that just so happens to run just right in GM vehicles, OK?"

Is this a poor perspective? Perhaps, but I am sure there have been high level conversations about market potential, it just makes business sense.

I suppose the timing is just right, considering President Bush's comments in his
State of the Union Address January 31st,

"...America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper, and more reliable alternative energy sources -- and we are on the threshold of incredible advances.

So tonight, I announce the Advanced Energy Initiative -- a 22-percent increase in clean-energy research -- at the Department of Energy, to push for breakthroughs in two vital areas. To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy. (Applause.)

We must also change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We'll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years. (Applause.)

Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025. (Applause.) By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle Eastern oil a thing of the past. (Applause.)"


Capital just so happens to avoid risk. If the federal government provides generous subsidies for the production of corn-based ethanol, it will attract investment. Of course, the long-term risk is that the subsidies will go away before the industry stands on its own two feet, which could then scare off the investors. The wind power and photovoltaic industries have struggled with similar on again/off again government support. We shall see how long the money flows.

GM Promotes E85 "Flex-Fuel" Vehicles

The World Business Council for Sustainable Development posted the news of GMs new campaign promoting the E85 vehicles. There are also numerous ads from companies like ExxonMobil, BP, Ford, Toyota, etc. promoting their commitment to reducing GHG emissions. These companies either supply petroleum products, a diminishing resource, or rely on their inexpensive and ready availability. It is in their economic best interest to change their message. In the case of the petroleum companies, they are rebranding themselves as energy companies, or at least emphasizing that small component of their businesses. They need new markets to develop and new products to manufacture and sell. Guess what? It's a good thing. They have the capital and the expertise. Take the hundreds of billions of R&D dollars and sink it into renewables and see how quickly there are solar cells dotting suburbia and and wind turbines dotting the landscape.

The domestic automobile companies are reacting to higher gasoline prices and competition from abroad. Efficiency matters.

Some news from the European Commission on biofuels,
Commission Urges New Drive to Boost Production of Biofuels

The Economist just so happens to have made a mention of ethanol, especially in the wake of President Bush's State of the Union Address.

Ethanol
Life after subsidies
Feb 9th 2006 - From The Economist print edition

A much-maligned alternative to oil comes of age


IT MUST rank as one of history's unlikelier conversions. President Bush is an oil man from Texas, and a reformed heavy drinker. But in his recent State-of-the-Union speech, the president declared that America is “addicted to oil”, and trumpeted the virtues of ethanol—an alcohol-based fuel. The virtue of ethanol is that it can power “flex-fuel” cars that can run on either petrol or alcohol. Mr Bush says he wants a vast expansion of the country's tiny ethanol industry. In particular, he wants “cellulosic ethanol”, prepared using an advanced technology, to become commercial within six years.

Will it happen? Ethanol will not replace oil anytime soon, but Mr Bush nevertheless has put his finger on something big. This once-sickly, over-subsidised industry is brimming with optimism.

America has traditionally made ethanol from corn. Alas, this is much less efficient than Brazil's sugar-cane ethanol or that using the cellulosic method. But the farm lobby's power means that America doles out billions in subsidies to corn ethanol—and imposes tariffs on imports of the greener, cheaper Brazilian variety.

High oil prices, government support and the promise of new technology have led to a veritable boom in production of American-style ethanol. Several billion dollars of investment led by agribusiness giants such as Cargill and Archer Daniels Midland are going into new production plants for corn ethanol. Daniel Kammen of the University of California at Berkeley argues that corn ethanol is not as bad as it seems: using it releases less greenhouse gas than burning petrol, he calculates, and its spread helps develop infrastructure for the much greener ethanol that should come onto the market in a few years' time.


But the biofuel to watch is cellulosic ethanol. It is made efficiently using powerful catalysts and enzymes to speed up natural processes. And it does not rely on valuable crops: it can use waste products such as straw, corn stalks or agricultural debris. Royal Dutch Shell has a joint venture with Canada's Iogen which plans to open a commercial plant by 2009. DuPont and Genencor, a biotechnology firm, are also busy developing better catalysts.

The best reason for optimism is the arrival of entrepreneurial capital. Paul Allen and Bill Gates, co-founders of Microsoft, have both made recent (but unrelated) investments in ethanol firms. Richard Branson, a British airline boss, has jumped into the fray with Virgin Fuels, a new firm that vows to invest $300m-400m in ethanol over three years. Vinod Khosla, a venture capitalist at Kleiner Perkins, has also put his own money into start-up firms developing cellulosic ethanol and speaks with the zeal of a convert: “Bush is too cautious, it can take off much sooner than six years!” Perhaps. But will that mean an end to subsidies? Don't count on it.

Sunday, February 12, 2006

Buzz About Blogs

Two articles appeared recently in The Economist about blogs. The texts of both of them are included in this posting. There is not much said that is new or outstanding, more analysis of the continued fragmentation of media. Savvy corporations must make the investment to monitor the blogosphere as they do other forms of media. What are customers saying? What must we do to keep our image spotless and clean? How do we take advantage of this media channel to increase brand loyalty and reach new customers? Are these the customers we want to appeal to in the first place?


The blog in the corporate machine
Feb 9th 2006 CHICAGO From The Economist print edition

Bloggers can be vicious, but they can also help companies avert disaster

THEY have always had their critics, but corporations are having an especially hard time making friends of late. Scandals at Enron and WorldCom destroyed thousands of employees' livelihoods, raised hackles about bosses' pay and cast doubt on the reliability of companies' accounts; labour groups and environmental activists are finding new ways to co-ordinate their attacks on business; and big companies such as McDonald's and Wal-Mart have found themselves the targets of scathing films. But those are just the enemies that companies can see. Even more troubling for many managers is dealing with their critics online—because, in the ether, they have little idea who the attackers are.

The spread of “social media” across the internet—such as online discussion groups, e-mailing lists and blogs—has brought forth a new breed of brand assassin, who can materialise from nowhere and savage a firm's reputation. Often the assault is warranted; sometimes it is not. But accuracy is not necessarily the issue. One of the main reasons that executives find bloggers so very challenging is because, unlike other “stakeholders”, they rarely belong to well-organised groups. That makes them harder to identify, appease and control.

When a company is dealing directly with a labour union or an environmental outfit, its top brass often take the easy route, by co-opting the leaders or paying some sort of Danegeld. Until a couple of decades ago, that meant doling out generous union contracts and sticking shareholders, taxpayers or consumers with the bill. More recently, the fashion has been for “corporate social responsibility”. This might involve spending money on a pressure group's pet project; or recruiting prominent activists to a joint committee, dedicated to doing good works.
In the blogosphere, however, a corporation's next big critic could be anyone. He might be an angry customer or a disgruntled employee—though that sort of tie to the company is not essential; nor does he need lots of industry experience or lengthy credentials to be a threat. All a blogger really needs to devastate a company is a bit of information and plausibility, a complaint that catches the imagination and a knack for making others care about his gripe.

Mike Kaltschnee's site, HackingNetflix.com, became a force to be reckoned with for Netflix, a video-rental outfit that delivers to people's homes. When Netflix said it was not interested in Mr Kaltschnee passing on questions from consumers, he posted the exchange online, hurting the firm's reputation among loyal customers. The company now treats him much more respectfully and his site has gained a large following.

Increasingly, companies are learning that the best defense against these attacks is to take blogs seriously and fix rapidly whatever problems they turn up.

One firm that could have saved itself a lot of trouble is Diebold, an Ohio-based firm that makes automated cash machines. After America's presidential election in 2000, which featured a vote-counting fiasco in Florida, the firm decided to expand a part of its business that made electronic voting machines by acquiring Global Election Systems (GES) in early 2002. The deal turned into a disaster when computer scientists and voting-rights groups educated the public about problems with machines such as those made by GES. The critics complained that GES's voting devices could not leave an audit trail because, among other flaws, they did not print paper ballots. By 2004 the mainstream print and broadcast media were also hammering away on this issue, leading several states, including Ohio, to reject GES's machines.

Evolve24, a consultancy which analyses corporate reputations and watches online trends closely, has used its blog-sniffing software to find out what was available on the internet before Diebold bought GES. It discovered that not only were a couple of voting-rights activists calling attention to the machines' drawbacks on their blogs well before the acquisition, but also that research papers highlighting the problems were available on technical websites. Diebold did traditional forms of due diligence before buying GES, such as verifying its financial health. But by ignoring the blogosphere, it failed to spot some crucial risks.

Although its response was much quicker than Diebold's, Kryptonite, a firm that makes high-priced bicycle locks, also learned the hard way how important blogs can be. In September 2004 word spread quickly through the blogosphere that U-shaped locks by Kryptonite and other firms could be picked, quickly and easily, using only the plastic casing of a Bic pen. Then somebody made a video showing how to do it, and posted it on the Engadget blog site, one of the most popular on the internet. After Kryptonite discovered the problem, it came up with a plan to take care of its customers and improve its locks. But Donna Tocci, Kryptonite's media chief, says that she now checks 30-40 blogs every day.

Not all company interactions with bloggers involve damaging criticism. Sometimes a careful look at what is happening online can help managers to avoid over-reacting. After the invasion of Iraq, when American consumers turned against all things French, a big French drinks company noticed that its brand names were popping up on boycott lists. But an analysis by BuzzMetrics, which specialises in scrutinising blogs and other online forums for corporate marketers, revealed that those who were pushing hard for a boycott tended to be “Budweiser drinkers”, who would not have been natural customers for the firm's wines and spirits anyway.

A hair of the blog
Many big companies have been looking eagerly for ways to tailor their advertising to specific groups of consumers. They have found that web logs and internet discussion groups, which bring together people of similar interests, can help them turn hot links into cold cash. But besides trying to get out their message, companies are also learning that blogs can provide early warning signs of potential problems.

They are increasingly turning to firms that can help them sort through the blogorrhea to find what they need. There is a lot to sift, considering that some 27m blogs are online. Last month, responding to growing interest in their services, BuzzMetrics agreed to merge with Intelliseek, another firm that specialises in analysing blogs for business. BuzzMetrics has ties to Nielsen, a media-research firm; Intelliseek has a clutch of former executives from Procter & Gamble, a consumer-goods giant.

Max Kalehoff, vice-president of marketing at BuzzMetrics, says that many of the firm's clients want it to analyse blogs so as to gauge the seriousness of bad news. Drugs firms, for example, want to know what questions are on patients' minds when they hear about problems with a medication. Car companies are looking for better ways to spot defects and work out what to do about them.

Steve Rubel, of CooperKatz, a public-relations firm, reckons that companies should also have a ready-made plan for influencing bloggers if a crisis does occur. Mr Rubel runs the firm's Micro Persuasion practice, which helps companies improve their marketing by using blogs and other conversational media. He recommends setting up a “lockbox blog” that is hidden behind an internet firewall, but can be made visible to the public at short notice. Any websites or video clips that companies might want to direct the public to in an emergency, for example, could be prepared in advance. Then, he likes to tell clients: “in case of emergency, break glass and blog.”



From blogs to brands
Jonathan Fenby
From The World in 2006 print edition

Out of chaos, a new order

The democratization of information unleashed by the internet—now increasingly connected to mobile phones and other portable devices—has been gloriously chaotic. According to one count, 80,000 new blogs (online journals) are now created each day. But in 2006 more big companies will muscle in, and rules of sorts will start to spread.

Participatory information sites and channels will blossom, with “citizen-reporters” busying themselves not only in writing and in sound through podcasting, but also with images using digital cameras and phones. As well as supplying leads and feeds for conventional media (witness the remarkable video images of the aftermath of last July’s London bombings captured by surviving passengers on their mobile phones), these will develop their own mass through their range of reporting. And as corporations follow the example of Microsoft and others in buying into the blogosphere, sites will emerge with resources far beyond those of the original individual exponents of the genre. These mega-blogs will become part of an interconnected information universe that will increasingly move editing from the traditional newsroom to the recipient’s computer.

The essence of the original blogs was that they were individual expressions of information and opinion, however eccentric or extreme. This raised an obvious credibility question. Some blogs may have been accurate, but many more clearly come off the wall. For every dissection of the CBS report on President Bush and the National Guard, we had 1,000 rants and 100,000 accounts of daily activities of interest to nobody except the author. The limits of the free-for-all were well demonstrated by the chaos that resulted when the Los Angeles Times opened its online editorial page to unrestricted contributions.

Such problems will encourage the growth of a more responsible online-information system that exploits the mediumÂ’s possibilities, but which also adheres to self-imposed standards that would have been seen as unacceptably restrictive by the original bloggers. The idea that the internet meant complete freedom will have to die in at least a part of the forest if the medium is to realise its potential as an information tool. Serious providers will have to accept that they are not free from responsibility.

This will not come about primarily through any legal constraints, which remain cloudy in the blogosphere. Rather, a group of information websites will emerge from the world of blogs—small in relative number, but weighty in impact—which accept that the internet is not just a licence to peddle prejudices and pursue individual interests. The hierarchy of links pioneered by Google will become a key factor, discriminating in the good sense between the reliable and the dross, and creating a virtuous online circle. Thus can brands be built.

This will present newspapers, already hit by declining circulations, with an extra challenge, and the growth of video and audio feeds from citizen-reporters will drive at least the smaller broadcasters to try to co-opt them as contributors. Conventional media enterprises will have to find creative ways of drawing on the proliferating sources of content and channels of distribution to satisfy their customers. If they do not adapt, fast, they may all too easily find themselves overshadowed as new media come of age, taking their responsibilities seriously and exploiting new ways of connecting with consumers.

Friday, February 10, 2006

Industrial Nutrient Content

Joel Makower's recent article posted on GreenBiz about Timberland's new "nutritional label" started my thoughts spinning back to my readings on sustainable manufacturing methods. In fact, the concept of Industrial Nutrients first came to my attention as I read "Cradle to Cradle" by Bill McDonough and Michael Braungart a few years ago.

Timberland, perhaps better known in some circles as the outfitter of trendy urban teens, is also well-known for its efforts at social responsibility. The program, revealed in another GreenBiz article, Timberland Introduces New Packaging Initiative, as well as the Timberland website, is anothe step in providing production information to consumers. Consumers that have a strong desire to support a company that strives to minimize its impact will no doubt benefit by such labeling.

The problem, as Joel points out in his article, is that few people will understand what the measures of energy used to manufacture the product means. To make an embodied energy measure make sense, one would have to relate it to something people understand on a daily basis. Perhaps equating the energy in the shoe to how long you could run your refrigerator, or television, or hair dryer on that amount of energy. On the other hand, the fact that they are providing this information may motivate some consumers to look into energy use and renewable energy. It also puts them ahead of the game, assuming more companies feel the need to provide this information and reduce their energy use.

I am reminded of a conversation I had with a coworker some time ago as we solved the world's problem of the day. What he suggested was a global currency based on energy. Instead of paying with Andrew Jackson or George Washington, we would have an electronic card that linked to an account that stored "watts" of currency. It makes sense. Every good or service requires energy in its manufacture and delivery. The computer I am typing on contains components built from raw materials sourced from all over the world. As the product comes together, the costs and prices of the components are inherently valued with an energy component, though it is monetized in a different form of currency. To make the system more complete and accurate, the valuation would also incorporate any impacts on the environment that add a social cost or reduce the value of natural capital. Perhaps the carbon trading schemes that have been proposed over the past twenty years would mesh nicely with a currency based upon energy.

As I am not an environmental economist, I am unfamiliar with how the harvest of wood or the mining of iron ore would be valued as a "cost" to the natural world. Since I am also not an international currency trader, I have no foundation for how "watts" would be valued across borders. Would goods produced with energy from Nigeria have a different value than the same goods produced with energy from Canada? I suppose the country of production would not be so important as how the energy was produced and how it impacted the ecosphere. Have I just developed a thesis?

My thoughts also turned back to my involvement with the AltWheels Transportation Festival. One of the ideas we had was to provide the same form of label for the cars, trucks, and bicycles that were on display at the event, with a relative comparison of emissions between the vehicles. When people see the difference in the amount of "something" and they know the "something" is bad (in this case carbon emissions), they may have a stronger understanding and potentially a reaction.

Monday, February 06, 2006

From The Economist

"This doesn't mean that managers will junk all their BlackBerries, Palm Pilots and mobile phones. They will still love them and buy the latest models that come out. But they won't be in the briefcase. That is partly because the most fashionable business people will not have briefcases. They will have sleek black bicycle panniers to go with the most fashionable management accessory of 2006, the bicycle.

Managers will arrive at work in cycling shorts, having ridden on a very expensive machine that is greatly over-engineered for a commute to work. They will boast in the bike shed that the frame is from Japan, the gears from Canada: they will be riding the ultimate granular bicycle."


The manager of the future will be armed with the latest in micro-mobile technologies. Employees will take advantage of technologies that promote productivity anywhere and anytime. The best part of this scenario is that each electronic gizmo will be built in a zero waste or "cradle-to-cradle" production system. The producer will ultimately be responsible for the life cycle of the product, including its disposal. It will not just be thrown away. Rather, it will be in the economic best interest of companies to design and manufacture products that are nearly 100% reusable to capture the valuable resources that would normally be added to a landfill."

Zero waste; what will that mean to life?

Article here

Sunday, January 22, 2006

When Your Avocation is Your Vocation

My object in living is to unite,
My avocation and my vocation
- Robert Frost in Two Tramps in Mud Time

This is an area that confounds me, and lately has become something of a challenge. Where does work stop and leisure start? Is there a difference and if so, where is the dividing line? Is it truly possible to have work one is completely passionate about and not take over one's life, or is that the goal?

Working back in the bike business, I find it all too easy to fall into the trap of working too much. The recreational activity that used to be a symbol of release and freedom becomes a symbol of work, and depending on how work is going that day or week, that may not be a good thing.

There are people that are thrilled to work, play, and live an activity. They actively seek a career that combines a hearty passion for an activity with the receipt of a pay check. That is reason to celebrate, and to be admired and respected.

I suppose there is a balance for everyone, a combination of personal time and work. We'll all just find our own way to strike that balance.

A comment from James J. Owens Asst Professor at the Marshall School of Business,

"JO: Any final thoughts you would like to share?

RE: Mr. Eckert: I’ve tried to demonstrate my belief that there is more to life than business. But, if you can find a job in which your avocation and vocation align, it’s very satisfying. I spend a lot of time working, but I can honestly say that I enjoy it. That sure beats the folks out there who have to get up everyday and do something they don’t want to do."