Why Best Buy Is Rooting for the Smart Grid
The retail giant that helped bring car stereos, camcorders, and CD players to the masses wants to be homeowners' best friend in the emerging world of smarter, greener technology.
Best Buy hasn't been front and center as a green business leader. The corporate responsibility section of its website focuses primarily on Energy Star appliances and e-waste recycling, which the company rolled out to all of its 1,000 or so U.S. stores earlier this year. Beyond that, the company seems to be engaged in the usual efforts to reduce its environmental footprint.
Behind the scenes, however, Best Buy has aspirations to become consumers' go-to resource for a range of green products and services, from e-vehicles to solar panels to a myriad of gizmos designed to help households plug into the smart energy grid as it rolls out in the coming years. The company's thinking, along with its initial efforts, suggests that the mainstreaming of next-gen green products is within view.
At first blush, a company better known for stereos than solar panels may seem an odd match to be ground zero for green tech. But there's a logical link. As the wired and wireless connections grow among home energy systems, electric vehicles, and information technology, consumers will need a reliable resource for finding products and expertise, as well as the ability to make everything work together as advertised. That's where Best Buy hopes to come in.
If you scan the landscape of what's coming over the next few years, you begin to see the opportunities: plug-in electric cars that not only can recharge from a household outlet, but which can serve as an energy storage device to power your home as needed; plug-and-play home solar or wind energy devices that can be installed by homeowners; smart home appliances like refrigerators and dishwashers that can negotiate with the local utility to take advantage of the lowest-possible energy rates, or power down to reduce grid stress; home energy meters and related gadgets that allow you to program lighting, heating, cooling, and appliances so as to maximize comfort and minimize energy bills; the ability to control all this remotely via any computer or smart phone; and more.
"When you turn to the smart grid, the ability to take complex technologies that are going to plug into the home, utilize home area networks, communicate back over broadband to utilities — it's going to be a fairly complex system," Rick Rommel, Best Buy's Senior Vice President, Emerging Business, explained to me recently. "We think that's a place where Best Buy can take our experience in in-home systems sales, support, and installation and apply it to the smart grid."
The fruits of these aspirations are just now finding their way into Best Buy stores. In the past few weeks, the company introduced electric bicycles at 20 stores in Portland, Ore., Los Angeles, and the San Francisco Bay area (as well as online). It also plans to offer a cool electric motorcycle, the Enertia, made by Oregon-based Brammo, in which the retailer's venture capital arm, Best Buy Capital, made an investment last fall. "An electric scooter is really just a battery and a computer on wheels," Rommel points out.
If they get traction from customers, e-bikes and motorcycles could become an entry point for Best Buy as a purveyor of other electric vehicles — both sales and rentals. "The change that's in front of us right now is the transition from gasoline to electric," says Rommel. "And if you look at the disruption that this transition in technology does to sales channels, it opens up opportunities for companies like Best Buy to begin to participate." The company hasn't made any announcements — and Rommel wouldn't say — but what follows could be small neighborhood electric vehicles like the Peapod or the Zenn. And maybe even e-vehicle rentals: "We've heard that the Zipcar community is increasingly asking for secondary cars like trucks and vans that you need just once in a while," says Rommel. "So why invest in a really expensive second vehicle when you can get it only when you need it?"
And then there's the service piece — the critical need to help consumers install and maintain all these gizmos. That's where the Geek Squad comes in. Rommel sees the Best Buy unit — the company bought the Minneapolis startup that specialized in repairing and installing PCs in 2002 — as a natural component of its greentech strategy. "We've been the smart friend that helps the consumer do it themselves, or when they need help in the home we'll do it for them. And that has allowed them to make more sense and get more value from the complex products you put in the home. From a consumer's point of view, if one device that connects to my home area network that does home energy management doesn't work, who do you think they're going to call? Geeks make high-tech house calls, and that is a tremendously valuable asset in a home environment that's becoming increasingly complex."
The story can potentially spin out from there. If Best Buy can garner a following of greentech-minded consumers, the company could play a pivotal role in working with utilities, product manufacturers, and others to design consumer-friendly products — just, as I imagine, it already does for everything from cell phones to flat-screen TVs — along with the technologies that integrate them, leveraging the smart-home communications standards that are beginning to emerge. There's potential for the company to help accelerate markets.
It's a compelling story line, to be sure, but equally important is that it illustrates the potential for incumbent companies to be key players in advancing green technology. While cutting-edge innovation will likely come from countless start-ups, it will be up to the mass merchandisers to accelerate market uptake beyond the green devotees and early adopters.
In the case of Best Buy, it appears to be an early adopter itself, potentially gaining a competitive edge as the green economy truly fulfills its promise.
June 29, 2009 in Business Practices, Clean Tech, Trendwatching | Permalink | Save This Page | Comments (1)
Will Radical Transparency Save the Earth?
There's a growing school of thought that unfettered information about the environmental impacts of our world will smoke out the bad guys and help the good guys win.
I wish it were that simple.
I've just finished reading Ecological Intelligence, the new book by Daniel Goleman, whose 1997 bestseller, Emotional Intelligence, helped broaden our thinking about what it means to be "smart." (It's not the IQ test, stupid.) Now, he's turned his sights on the environment — specifically, the quantity and quality of information available about the environmental impacts of the things we buy. His highly readable book describes how the lack of good information belies the hidden impacts of our purchases — the way they are sourced, manufactured, used, and disposed of when they are no longer of use.
Goleman calls for "radical transparency," a term I've been hearing increasingly lately, one of those coinages that sneaks up on you en route to becoming a full-fledged meme. Goleman didn't invent the term — it's been around for some time — but it is a central theme of his book: the virtuous circle that develops when companies, voluntarily or not, lift the veil of secrecy to reveal the ingredients and sources of their products, enabling consumers to make smarter choices, thereby moving markets toward less-harmful products. That cycle, argues Goleman, can occur only when we fully exploit the full arsenal of technologies and human networks:
Psychologists conventionally view intelligence as residing within an individual. But the ecological abilities we need in order to survive today must be a collective intelligence, one that we learn and master as a species, and that resides in a distributed fashion among far-flung networks of people. The challenges we face are too varied, too subtle, and too complicated to be understood and overcome by a single person: their recognition and solution require intense efforts by a vastly diverse range of experts, businesspeople, activists — by all of us.
I can't argue with the premise, but my 20 years of watching the green marketplace leaves me, well, unsold.
Like Goleman, I am a steadfast believer in the power of transparency: the more we know, the smarter decisions we can make. But I'm more skeptical than Goleman about how willing and able consumers are to actually harness such information to make changes in the way they shop and live. At least, not at the scale and speed needed to transform the marketplace toward one that embraces sustainability, in all its many forms.
Here's what I see as the central flaw in Goleman's case: While he is correct in stating that the complexity and sheer number of products and manufacturing processes requires the collective intelligence of the global village, actual shopping choices are still made at the individual level. And it's here that saving the Earth often takes a back seat to simply saving the day.
It's been almost exactly 20 years since the first-ever survey of Americans' attitudes toward making green purchases, by an outfit called the Michael Peters Group, told us that a whopping 89% of shoppers said that they were concerned about the environmental impact of the products they purchased. And nearly as many — 78% — said that they were willing to pay as much as 5% more for a product packaged with recyclable or biodegradable materials compared with its conventional counterpart.
Since that August 1989 survey, dozens of market researchers have unearthed similarly tantalizing findings describing consumers' interest in aligning their purchases with their environmental concerns. But behind those impressive numbers are some conditionals that aren't always picked up. They sound something like this: "Yes, I'd happily pick the greener product — IF it comes from a brand I know and trust, IF I can buy it where I currently shop, IF it is at least as good as the product I'm currently buying, IF it doesn't require me to change habits, IF it doesn't cost more, and" — this last one is significant — "IF it is somehow better — for example, that it lasts longer, performs more effectively, saves money, is healthier for my family, or will be perceived by others as cool."
That's a pretty high bar to clear. The result is that while the research data haven't changed much over the past 20 years — neither have most consumers' purchases.
Can radical transparency change this? Admittedly, things are different now. Companies are opening up — some voluntarily, others less so — disclosing more about their ingredients and supply chains than ever before. Technology is helping too: the myriad blogs, widgets, websites, and apps, and the networks they enable, are allowing more information to be shared faster and more effectively than ever before. An emerging era of Environmental Product Declarations is upon us, using an ISO-blessed standard for reporting life-cycle impacts. Everyone from Washington to Wal-Mart are demanding companies to provide more information about the environmental (and health) impacts of what they do, and much of the information that results is being made public.
Says Goleman: "These new approaches to managing information herald a coming flood of data about the heretofore unnoticed consequences of a host of common ingredients in everyday products. What had previously been successful brands may be in danger of becoming tainted in our minds."
But content is of little use without context. Goleman and I are both fans of a website called GoodGuide, in which a team of researchers and credentialed experts have pulled together millions of data points about thousands of products, on everything from toxic ingredients to the climate policies of its manufacturer. It makes comparing products easy, providing a high-level view for those who want to know simply "Is it good?" and a deeper dive for those wanting the gory details. GoodGuide's growth trajectory during its roughly 14 months of operation suggest that there's a hunger for this information, and that's encouraging.
Says Goleman:
Radical transparency promises to create a marketplace mechanism that takes the consequence of shoppers' choices to scale: each individual purchase, aggregated with all the others, becomes tantamount to votes on the nature of the goods they buy. As businesses respond by making more of the improvements that shoppers want, shoppers can feel empowered by seeing that their ethical choices matter.
In reality, this positive feedback loop hasn't worked very well. On the one hand, when it comes to green business practices, many companies are walking more than they're talking — that is, they're making more green improvements than they're taking credit for. One reason is that many of their green achievements are about "doing less bad" — using fewer toxic ingredients, creating less waste — which are tough stories to tell. Moreover, a lot of their most significant efforts don't end up directly in the products or packaging — they're embedded in their suppliers, perhaps far upstream — or aren't part of the value proposition for those products. (If I'm buying potato chips, should I care that the potato processors are recycling their rinse water, thus saving millions of gallons of water and hundreds of thousands of dollars a year? Or do I just want a salty, crunchy underpinning for my guacamole dip?)
Moreover, these things aren't being done so much for the planet as for profits; the fact that it has a positive environmental impact (or, at least, a less negative one) is a happy outcome. Does consumer power born of radical transparency play a role in spurring companies to make such changes? Likely not.
The same is true with one of the stories Goleman tells, about how Procter & Gamble did a life-cycle study of several of its products, measuring their impacts at seven stages, from materials selection through manufacturing, use, and disposal. When they plotted the various impacts on a 3-D bar chart, one of the bars loomed far longer than any other: the home-use stage of liquid laundry detergent — specifically, the energy used when people do their wash in hot water. The result, Tide Coldwater, has significant potential: if everyone in the U.S. used it, we'd reduce household energy use by about 3 percent.
Neither radical transparency nor consumer concerns about hot-water use had anything to do with this move. No one told them to do it. It was simply good business: a win-win-win for the company, their customers, and the environment.
That's where Goleman's thesis falls short, discounting that change happens fastest when there's something in it for everybody. Sure, increased information will get some consumers to change a little, prodding manufacturers and markets along the way, but unless companies make products perceived to be better, however that's defined or measured, and can make money doing it, we won't see wholesale change at the scale required. And all of the data in the world won't get mainstream consumers — the 80% or 90% who aren't true-blue green consumers — to become part of the solution.
Note: Daniel Goleman's response can be found here.
June 16, 2009 in Business Practices, Green Marketing, State of the Art | Permalink | Save This Page | Comments (12)
Intuit Helps Small Business Capture a 'Green Snapshot'
Can the company that tamed financial accounting do the same for carbon accounting?
That's the aim of Green Snapshot, a just-launched free service of Intuit, the company that makes popular financial management software like Quickbooks and TurboTax. Snapshot is aimed at the same market as those products: millions of small and midsized companies, few of which have the time, temperament, or temerity to calculate their company's carbon footprint, let alone take action to reduce it.
The program is fairly straightforward: It automatically mines your Quickbooks data, culls the various payments you've made, and taps an online database that assigns a rough carbon equivalent to each of the payees. Based on that information, it instantly creates a carbon footprint analysis, along with a set of recommendations of ways to lower it.
It's simple and quick. Did I mention that it's free?
At first blush, Intuit may seem an unlikely source of such a program. But if you think about what Quickbooks and similar programs do, it makes sense. In essence, those financial management programs take a jumble of business information (expenses, payroll, income, payables, receivables, etc.) and organizes it in the form of income statements, balance sheets, budgets, and other documents. The goal: understanding your finances in order to help you manage your money and your business more effectively.
Snapshot does the same, taking disparate business information about purchases and activities and organizes it. The goal: understanding the parts of your business that have the greatest contribution to global climate change in order to help you manage those activities and your business more effectively.
The idea for Snapshot began in 2007 when Rupesh Shah, Director, Corporate Sustainability at Intuit, who joined the company eight years ago with a freshly minted MBA from Northwestern University, was tapped for Intuit's first environmental post. Shah had worked in product development, which turned out to be a good fit: The company wanted someone who could mesh improving the company's footprint and engaging its workforce with the potential to develop new products.
That last part was key. "We could do a lot of stuff with employees, or supply chain, or packaging, but that wasn't going to make a big difference," Shah explained to me recently. "Where we could make a big difference was from a customer-facing perspective. So once we started to throw some examples out about what Intuit could do and what opportunities our customers could have around green, then [senior management] started to get it, and then they started to invest in it."
Shah saw an opportunity to help small businesses, Intuit's core audience. "Everyone recognizes they're very important in the environmental game but few people have been able to really engage them."
He got that right. Since the dawn of the green business movement, small and midsized firms have been largely left out of the picture. Regulators and activists have focused on large industrial players — the ones with the spewing smokestacks, drainpipes, and dumpsters — all but ignoring the roughly 98 percent of the companies around the world that have under 100 employees. With the exception of a relative handful of green business programs sponsored by local governments and chambers of commerce (most of which have pretty low barriers to entry), there are few robust and affordable resources to help the countless printers, dry cleaners, parts manufacturers, warehouses, hair salons, restaurants, and butchers, bakers, and candlestick makers that are the backbone of most countries' economies.
Shah also understood another key: "The key hypothesis I had was that in order to get them in the game we had to make it super easy for them."
Along the way, Shah met Michael Gelobter, founder of Cooler, a company I profiled in 2007 that utilizes complex life-cycle databases to provide an economic model, rather than an engineering-based one, for determining the climate footprint of a given purchase. It's a blunt-instrument approach that's cheap and fast — and yields pretty accurate data.
Cooler's database became the engine for Snapshot. As Shah explains: "Snapshot reads your Quickbook data, pulls every dollar the business has spent over the past twelve months, and works with Cooler's economic input-output matching engine. It looks at the payee and the vendor of every transaction and tries to match it to the closest of about 1,000 carbon categories that the Cooler engine has. And for each of those carbon categories there's a carbon intensity — emissions per dollar spent." The result is a report detailing a company's carbon footprint and cost-effective opportunities to reduce it.
Presently, the system typically matches about 8 of 10 transactions. The report you get shows which transactions weren't included in the carbon footprint calculation. In the coming weeks, Intuit plans to add the ability for users to link those unmatched transactions to the Cooler engine, and each user's contribution will help make the system smarter for everyone.
I asked Shah, what's in this for Intuit? Is there a business model here that the company hopes to exploit?
"We have a business model that we're testing," he responded. "The savings engine has a bunch of actions that we recommend. About half of the actions are behavioral — clean your HVAC, drive smarter — and about half involve buying something — an Energy Star computer, or some other greener product." Intuit is planning to point customers to retailers and earn affiliate fees, though Shah quickly noted, "We haven't made a penny yet, and I don't think that we're going to make any meaningful money any time soon."
Beyond that, Shah hopes Snapshot will help small businesses to communicate their environmental achievements to their own customers. "I was struck when I was interviewing small businesses, how many of them were trying to get their customers to see that they're doing something green. But there's no real authentic way to message that." Shah believes Intuit can play a role in providing "a little bit more transparency and legitimacy for those claims around green."
Will it work? Hard to know — the product is barely a couple weeks old — but you've got to like the strategy: a free add-on to a popular product that provides genuine value to customers and, just maybe, to Intuit itself, all the while burnishing the software company's green cred.
As Shah put it: "Our goal in this was not pure charity or philanthropy. It's to build a tool for customers that they would find valuable, help increase the reputation of Intuit, both as a corporate citizen but also from an innovation perspective, and to try to monetize this. We'll see."
June 7, 2009 in Business Practices, Climate Change | Permalink | Save This Page | Comments (0)
The Green Future of the "New GM"
What to make of this week's bankruptcy filing by General Motors? The beginning of the end? The end of the beginning? A death? Rebirth? Something in between?
Given the months-long anticipation of this development, much already has been written and said, and many fingers pointed. GM, as Paul Ingrassia recently opined in the Wall Street Journal, made "decades of dumb decisions." And while there's truth to that, GM, Chrysler, and the other automotive companies didn't create this mess by themselves. It took a village — unions, consumers, regulators, and assorted others — to bring the car companies to their knees.
What of the environmental community? That term, of course, is a loose one, given that this "community" rarely speaks with a singular voice. As a rule, environmentalists have long been harsh critics of GM, citing the gas-guzzling Hummer, the company's participation in an industry lawsuit against California's regulation of carbon dioxide as a pollutant, its longstanding opposition to government-mandated fuel-efficiency regulations, and that "fact" that it "killed" the electric car. Of course, it wasn't just GM. Many other car makers — foreign and domestic — sided with GM on the lawsuits and the regulatory stance, marketed gas-guzzling behemoths, and dragged their collective feet on developing alt-fuel technologies. But the iconic GM got the brunt of the activists' criticism.
Today, many of these criticisms are nearly moot. GM reportedly has found a buyer for Hummer, something it has been trying to do for the past year. Several weeks ago, the White House proposed the first federal standard for greenhouse gas tailpipe emissions, and said it would harmonize those standards both with California's proposed "Pavley" emissions standards and with national corporate average fuel economy standards. And, of course, GM has been working for more than two years on its revolutionary Chevy Volt, an "extended range" electric vehicle that's received high praise from activists and engineers alike. Even with the bankruptcy, the Volt remains on track to hit the market at the end of next year.
In my recent book, I chronicled how GM began changing the conversation with the environmental community, beginning in late 2005, as the company promoted biofuels as a potential alternative fuel. In late 2006, GM leaders briefed a group of environmentalists about the Volt, even before it unveiled the car to the press, helping to ensure a group of supportive voices at the car's debut in early 2007. (Remarkably, the greenies kept their promise of confidentiality: There were no leaks.)
Over the past year, and especially over the past six months, GM stepped up its outreach to the major environmental groups, engaging them several times in conference calls and face-to-face meetings, seeking their support during the federal government's deliberations over its fate. GreenOrder, the sustainability strategy firm with which I am affiliated, helped facilitate many of these calls, which included Elizabeth Lowery, GM's Vice President, Environment, Energy, and Safety Policy, and — on two occasions — Rick Wagoner, GM's now-vanquished CEO. The calls offered an opportunity for GM's leadership to engage directly with one of its key stakeholder groups to describe its vision and plans, field questions, and listen to concerns.
I was struck by the civility of the whole affair, as two battle-scarred warriors — Big Auto and Big Green — came together, if not as friends, at least as colleagues with shared goals. The enviro leaders were surprisingly supportive — surprising, that is, because of the animosity and lack of trust that had grown and hardened over the years between the two camps. The activists offered support and encouragement to the auto maker. It was heartening to witness the rapprochement, though in the end, it may have been too little, too late.
But those conversations may yet prove their value, as the "New GM" emerges in the coming months. Before the economy tanked last fall, GM seemed to be "getting it," shifting its focus toward vehicle electrification and renewable fuels for the vehicles on its drawing boards. Its R&D leaders were pondering a world in which there could someday be 2 billion vehicles, roughly twice as many as today, and what that might mean for safety, road congestion, and the environment. They were designing prototypes of small neighborhood electric vehicles. And they were thinking about the second and third generations of the Volt technology that will follow in 2011 and beyond.
No one really knows what form the New GM will take, of course, but from what I can tell, all these efforts will continue. Earlier this week, on the day GM filed its bankruptcy petition, Beth Lowery sent an email to her network of environmental leaders and other stakeholders, offering her perspective of what the filing meant for the car company's future. It said in part:
The New GM will focus on reinventing not just ourselves, but transportation systems around the world. An essential starting point is vehicle electrification, including our new advanced battery lab in Warren, Michigan, where we will continue to develop battery technology to support electric vehicle programs such as the Chevrolet Volt. Also, we will continue to work with partners to develop the infrastructure necessary to support advanced technologies, from flexible-fuel vehicles to urban electric vehicles.
I'm encouraged by that. While it will take months, if not years, to see whether and how the New GM will survive, let alone thrive, there are rays of hope amid the corporate carnage. And while the cynics and skeptics may deride the taxpayer-funded New GM as "Government Motors," I still have high hopes that in the coming years, it actually could stand for "Greener Mobility."
June 2, 2009 in Business Practices, Clean Tech, Trendwatching | Permalink | Save This Page | Comments (4)
Clean Technology and the Aroma of Emerging Opportunity
I'm writing this from Northern California wine country, where I've come for my annual infusion of hope.
No, it's not an alcohol infusion, though there's some decent vintage flowing. The hope comes from the conversations I've been having with a collection of venture capitalists, entrepreneurs, and corporate innovation leaders, at an annual gathering convened by VantagePoint Venture Partners, the cleantech venture fund to which I am an advisor. Each year, this event reinvigorates and reminds me why I love what I do for a living: The copious innovation and ingenuity taking place in the emerging green economy by companies both large and small.
This is no conclave of companies that are "going green" or "greening up." The businesspeople present here in Napa are at the center of a revolution that even some of them aren't yet able to clearly see: a mash-up of energy technology, information technology, building technology, vehicle technology, material technology, and water technology — and the products, services, and businesses that stand to transform our lives over the next decade or two, just as much as, say, the Internet has.
This is hardly the only cleantech conference I attend during the course of a year, but it's the only one that includes a frank and open discussion among a small group of big companies about their perspectives and strategies on cleantech and the green economy, and how they're addressing them. The participants aren't corporate marketing executives or even chief sustainability officers. Rather, the representatives of the global companies present have titles like Vice President, Strategic Planning and Development; Senior Vice President of Emerging Business; and Chief Innovation Catalyst. They are joined here by the founders of two dozen or so entrepreneurial cleantech companies.
As much as I love hearing from the entrepreneurs — each one's presentation offers a cram course in a technology or trend, as well as some innovative approach to addressing it — it's the big corporations that I find most interesting. The VantagePoint event is a rare opportunity to get past the marketing pitches and well-scrubbed executive talking points to hear the real skinny: how some of the world's largest companies are thinking about sustainability and harnessing it as an foundation for innovation.
It's nearly impossible to relate the full measure of the discussions, but I thought I'd share some tidbits about several companies, including a chemical company, a consumer products company, and a major retailer. The rules of engagement for this event are what's known as the Chatham House Rule — in essence, that the information discussed can be shared, but not the individuals' names or affiliations. The Chatham House Rule typically governs meetings where people want to share information openly and speak freely, but not beyond the immediate group.
First, the chemical company. For several years, it has been engaged in an aggressive effort to do with biology what chemistry can't do, creating products that are manufactured at lower temperatures and with far fewer toxic inputs. The company says it is pursuing what it dubs "unique, disruptive science with significant market opportunity." In the lab are a range of biofuels, biomaterials, bioadhesives, and more. For example, there's a carpeting fiber made from corn instead of petro-based nylon that requires nearly a third less energy and emits nearly two-thirds fewer greenhouse gases. It is being manufactured at a repurposed polyester factory. The demand is there from both consumers and corporate buyers, the company says, though pricing is a challenge: With oil prices down, the cost of nylon has dropped by nearly two-thirds over the past year, making the bioproduct less competitive than the petro-based one. Still, the company is optimistic over the long term. "We see many places where biology can win over chemistry."
Next up, the consumer products company. It has created a set of sustainability design principles for all of its thousands of products — "supported by sound and transparent assumptions, good science, and substantiated by data" — and has amped up its commitment to make these products with significant environmental improvements and no price premium to customers. And at the same time, it aims to reduce its overall emissions of carbon dioxide and waste, and use of energy and water, by 20 percent within five years.
Along the way, the company is asking the tough questions: Given that almost all of its packaging is petroleum-based, "How do we make packaging from alternative, renewable material" — and do so without adding costs? There are promising experiments — in one case, working with a Brazilian company to make plastics from sugar.
Many of these innovations are coming from new kinds of partnerships, in which it is working with others to find breakthrough green innovations. That's a new approach for the company, and one it views as its path forward. "Companies that don't adopt an open innovation approach won't be competitive in 10 to 20 years," says the executive. "You have to look outside your walls."
Finally, the retailer. It's probably not the one you think — this one hasn't been particularly visible in the green world — but its ambitions are significant: It wants to become the hub for your home energy needs. For this retailer, that involves selling a vast range of emerging products: electric bikes and scooters, maybe even electric cars; home energy optimization products, including both hardware and software that monitors your energy use and helps you control it; solar panels and other renewable energy products.
And services: shared-use vehicles, solar installation services, home energy audits, and the like. This retailer views a multi-billion-dollar opportunity in becoming the go-to place for homeowners and small businesses to save energy and costs and to buy and install cutting-edge green technologies into their homes and offices.
What these three companies have in common, other than their vast global reach, is a strong vision of where the world is going and what's needed to succeed in the coming years. They understand that markets are shifting, as technology inexorably marches forward. Combined with growing environmental and energy concerns and emerging markets around the world, it creates an unparalleled opportunity to manufacture and sell products with more benign inputs and outcomes. And they're doing this amid one of the worst economies ever, pushing forward with the understanding that tough times often create the best opportunities to advance breakthrough change.
Their efforts are buttressed by innovations coming from hundreds of start-ups that are creating the next-gen building blocks of the green economy — ambitious entrepreneurs, many with awesome track records of creating transformative technologies and companies. Some of them are here, sharing their innovations with their larger corporate brethren, both parties looking for the Next Big (Green) Thing.
There's a palpable sense of excitement here in Napa, as companies large and small sip cautiously the fine wine of emerging opportunity and inhale the delicate aroma of hope. For the moment, at least, it's intoxicating.
April 28, 2009 in Business Practices, Clean Tech | Permalink | Save This Page | Comments (1)
The Future of Green Product Design
We're about a month away from our upcoming conference, Greener By Design 2009, and I wanted to share what's coming and why I think this will be an extraordinary event. I also want to share information about a limited number of unpublished deep-discount registrations I have available for a few lucky blog readers. (More about that in a moment)
Greener By Design focuses on the intersection of product design, innovation, supply chains, and sustainability — how both large and smaller companies are baking environmental thinking into their products and manufacturing processes in a way that makes products not just greener, but better. This year's theme, "Greener Products for Leaner Times," reflects the elephant in the room — the economy — and how companies are aligning green considerations with the need to make products cheaper, lighter, simpler, and more energy efficient.
Suffice to say, this is no mean feat, though part of the problem is perceptual. Most companies still view that designing and building greener products is a costly endeavor resulting in products that are inferior, either in quality or in their ability to be cost-competitive with their conventional counterparts. As we report regularly on GreenBiz.com (and GreenerDesign.com), this is no longer the case. Companies making everything from clothing to cleaners to chips are finding their way.
And it's not just small innovative companies, though many of them are leading the pack. According to a recent survey by the research firm Forrester, a large number of companies are developing greener products, looking at outside factors as well as who within companies are pushing for product changes. Eighty-four percent of the consumer product strategy professionals surveyed said that their companies have environmentally conscious or socially responsible products in development or on the market.
We saw ample evidence of that at last year's Greener By Design (click here for video and other highlights), with companies ranging from 3M to Nike to Xerox — as well as upstarts like IceStone and Method — shared their learning and insights.
That trend has only grown over the past year, as the twin pillars of environment and cost-cutting have led companies to accelerate plans, as Forrester found. Much of the pressure is coming from retailers like Wal-Mart, which itself is ramping up efforts to push suppliers to innovate, reducing or eliminating packaging, making products more energy-efficient, and reducing toxicity — without raising prices. Clearly, this is no longer a "nice to do." It is the future of product design.
This year's event builds on that theme, as well as on last year's success. It includes keynotes from green design master Bill McDonough and iconoclastic entrepreneur Tom Szaky of Terracycle, along with the kinds of panels you'd expect. But also things you wouldn't: a hands-on workshop on innovation, by the renowned firm Systemic Inventive Thinking; small, consultative "guru" sessions with designers and innovators, in which attendees can pose their own design questions and challenges; and an Innovators Showcase, with entrepreneurs doing lightning-fast elevator pitches of their creations. We'll also have products on display from the latest electric vehicle to a new machine that's about to be released across Whole Foods Markets that I can't yet describe. (Click here for the current agenda.)
One of the things that most impressed me about the audience at Greener By Design is the sheer diversity of professionals it attracts. In my opening remarks last year, I scrolled the job titles of everyone in the room across the screen. It was a remarkable assemblage: designers, brand managers, and supply chain professionals, of course, but also engineers, biologists, chemists, and chief marketing officers, among many others. It was that diverse and high-level mix that contributed to the event's success just as much as the program itself.
So, about that discount: Thanks to the generous, record sponsorship we've had this year — from Autodesk, HP, Steelcase, UL Environment, and others — I have a handful of sponsored conference passes for less than half-price of the going rate — sort of my Earth Day gift. I'd like to make them available first to loyal readers of this blog — first-come, first served, and there are only a couple of minor qualifications required for eligibility.
If you're interested, send a note ASAP.
April 22, 2009 in Business Practices, Clean Tech, Green Marketing | Permalink | Save This Page | Comments (0)
AT&T's Driving Ambition
Today, AT&T made a major announcement: that it will invest more than a half-billion dollars over the next decade to purchase more than 15,000 alternative-fueled vehicles — 8,000 vans powered by compressed natural gas, and another 7,100 hybrid passenger cars. The telecommunications giant estimates that the new vehicles will save 49 million gallons of gasoline and reduce carbon emissions by 211,000 metric tons over the 10-year deployment period — equivalent to removing the emissions from more than 38,600 traditional passenger vehicles for a year.
You can hear a podcast interview I did last week with two AT&T executives about why — and how — they did this.
Making a commitment like this is no mean feat. For starters, it means placing a decade-long bet on a dynamic technological market: No one really knows exactly what the technological landscape of automobiles and delivery vans will look like in 2019 — the fuels, powertrains, and other innovations that will become the state of the art. Moreover, there's the problem of ensuring that there's a critical mass of natural gas fueling stations ready when the vehicles hit the streets. Toward that end, AT&T is contracting to have between 35 and 40 fueling stations built on its property, Jerome Webber, AT&T's vice president of fleet operations, told me last week. That's hardly enough to accommodate 8,000 vehicles, but the company hopes that it will help stimulate a market for more.
In some regards, the AT&T announcement represents another in the continuing series of corporate environmental initiatives that my colleagues and I at GreenBiz.com see (and report on) every day, despite the recession and credit freeze. But it's more than that. It also marks the resurgence of AT&T as an environmental leader.
Say what?
Odds are, you haven't heard much lately about AT&T from an environmental perspective. But the company was a pioneer in such fields as industrial ecology, design for environment, and telework. It still funds an Industrial Ecology Faculty Fellowship Program, annual grants intended "to stimulate interdisciplinary research involving social and environmental issues, engineering, science, economics, management, business, law and public policy issues." The company's iconic Bell Labs (now part of Alcatel-Lucent) fostered and supported some of the leading thinkers on such topics, the ones who wrote the textbooks now used in progressive engineering schools on how to integrate ecological systems thinking into product design and manufacturing.
As GreenBiz.com reported in a 2001 article on AT&T:
Industrial ecology systematically studies the environmental consequences of production and consumption. It addresses product-life-cycle planning that examines how the design, production, use, and final disposal of products affect the environment.Industrial ecology includes the creation of eco-industrial parks that provide for the cleaner production of goods. The field also considers extended producer responsibility, known as product stewardship; eco-efficiency; and environmental policies that produce social and environmental benefits to the company and to society as a whole.
AT&T is sometimes erroneously credited with inventing the concept of industrial ecology. In fact, it was first introduced to the general public in 1989 by Robert Frosch and Nicholas Gallopoulos, research scientists at General Motors, who believed that
industrial systems should emulate the best features of biological ecosystems, thereby reducing energy and material consumption and waste generation. The benefits of such operations are reduced environmental damage and increased sustainability for both natural resources and human activities.
Today, that's still cutting-edge thinking.
But AT&T — specifically, Thomas E. Graedel and Braden Allenby, two company engineers — popularized the concept, at least among some early green business thought leaders and practitioners. While at AT&T, Allenby, for example, wrote more than 100 publications and four books: "Industrial Ecology," "Design for Environment," Industrial Ecology and the Automobile," and "Industrial Ecology: Policy Framework and Implementation." (He also has contributed scores of thought-provoking essays to GreenBiz.com since its launch in 2000, archived here.)
Design for environment (DfE) is one means by which the principles of industrial ecology can be implemented today, within the overall perspective of a global economy that is increasingly service oriented. As a U.S. EPA fact sheet (Download - PDF) puts it:
DfE pursues industrial ecology principles by requiring that industrial designers and managers think in terms of cycles or complex systems rather than traditional linear process flow diagrams. DfE locates environmental concern within the most positive stages of the production process. Rather than trying to mitigate environmental consequences of production after the products have been defined and the processes designed, DfE encourages consideration of environmental issues to help shape the context of the industrial designer or process engineer in the same way that manufacturability, cost competitiveness, and consumer satisfaction currently shape that context.
And then there's telework, defined as "working from home or nonoffice locations during normal business hours," which AT&T pioneered in 1992. The company became a champion of the concept long before telecommunications and information technology — not to mention rising real estate and facility prices — made working from home a fairly common practice among many large companies. As recently as four years ago, AT&T — which, of course, benefited from sales of telecommunications products and services resulting from telework - boasted $180 million in business benefits annually from increased productivity by employees and reduced real estate needs from telework. (We've brought telework trends up to date in our annual State of Green Business report.)
So, why this trip down memory lane? AT&T isn't the first or only green business pioneer to fall off the radar. (Another early adopter is 3M, whose environmental mission statement was written in 1975 and still sounds fresh today, and who began a highly successful Pollution Prevention Pays program that same year. Haven't heard much from them lately, though their early initiatives continue.) AT&T is basically a different company today than then, having absorbed BellSouth, Cingular, and several smaller companies. (3M, for its part, lost its pollution prevention czar and got distracted by a myriad other things. Every company has a story.)
As Beth Shiroishi, AT&T's VP for Citizenship and Sustainability, told me last week: "At the close of the BellSouth-Cingular merger, we really still had almost four different operating companies with different programs, operations, even different cultures. At that point, we took a look across all the operations and said, 'What are the best practices? What do we want to be from a holistic standpoint?' A lot of good work had continued throughout those mergers, but looking operationally across the board, we took a couple of steps to really manage that, including elevating citizenship and sustainability to the board of directors." AT&T created an officer-level steering committee to help manage sustainability throughout the company, says Shiroishi, "and then we put in place kind of an expert team structure to look at all the issues and integrate that into our business." She says the company is committed as ever to being an environmental leader.
That remains to be seen, but the vehicle commitment represents a respectable re-boot. "We're all fired up about this," says Webber. "This is the right thing to do and we're doing it, and that's exciting. If you think about it, you've heard certain things coming out from the administration about infrastructure and jobs. This is the real deal."
March 11, 2009 in Business Practices, Clean Tech, State of the Art | Permalink | Save This Page | Comments (1)
