Climate Change and the Cusp of Lost Opportunity
On the eve of this week's UN Climate Change Conference in Bali, two new reports show how tantalizingly able we are to reduce our climate footprint -- and how frustratingly far we are from taking the needed steps to do so.
McKinsey & Co., the global management consultancy, last week released a report showing how the U.S. can reduce greenhouse gas emissions by one-third to one-half by 2030 "at manageable costs to the economy." McKinsey analyzed more than 250 options, including efficiency gains, shifts to lower-carbon energy sources, and expanded carbon sinks.
The McKinsey study follows on the heels of other studies over the past year or so (see, for example, here, here, and here). All have similar conclusions: climate change can be addressed, in large part, with minimal hit to the global economy -- but only if we act sooner than later.
Those two parts of the equation -- profitable solutions resulting from immediate action -- are simple enough, though they seem to elude many corporate chieftains and policymakers. McKinsey drives it home in no uncertain terms, stating that many of the opportunities available to us are "negative cost," meaning they involve investments that pay for themselves over time. In fact, it says, the cost of not acting is significant:
Many of the most economically attractive abatement options we analyzed are "time perishable": every year we delay producing energy-efficient commercial buildings, houses, motor vehicles, and so forth, the more negative-cost options we lose.
For example, says McKinsey, the cost of building energy efficiency into an asset -- a building, a car, a manufacturing process -- when it is created "is typically a fraction of the cost of retrofitting it later, or retiring an asset before its useful life is over."
McKinsey calls for a portfolio of "strong, coordinated policies" to capture greenhouse gas reductions efficiently across industry sectors and geographies, as well as accelerated development of "a low-carbon energy infrastructure" -- everything from plug-in hybrid vehicles, to cellulosic biofuels, to carbon capture and sequestration -- along with streamlined approval and permitting procedures to speed up energy infrastructure investments (including, alas, new nuclear power plants).
The McKinsey report was joined last week by a new report from the Confederation of British Industry, the U.K.'s counterpart to the U.S. Chamber of Commerce, which reached similar conclusions. "The next two or three years will be critical," it begins. "A much greater sense of urgency is required if the U.K. is to meet its targets for reducing greenhouse gas emissions at an affordable cost, and to establish an international leadership role in the low carbon economy of the future."
This, from a country that already seems well on its way to progress on the climate front, as I noted a few months ago. Yet despite a flurry of activity on climate in the U.K., the CBI concluded that it's not enough.
Already it is clear that the government's targets for cutting greenhouse gases by 2020 are unlikely to be met solely through measures taken in the U.K. Its longerterm goals for 2050 are also very challenging, and will not be achieved without significant additional effort.Failure to act now will mean that the costs of tackling climate change in the future will be much higher. The U.K. will also miss out on the commercial opportunities that will emerge on the pathway to a low carbon economy.
The report calls for a shift to a world "where carbon becomes a new currency -- so that consumers and businesses are rewarded for making the right choices. Carbon has to be priced according to supply and demand, under a system which leads to lower emissions, crosses national borders, and rewards good behaviour."
This needn't break the bank, says CBI. Its analysis of additional actions to be taken amount to an investment of around £100 a year per U.K. household (equivalent to about US$205 at today's rates).
This investment will help pay for a more sustainable way of life and shift resources to those parts of the economy providing low-carbon products and services. Some households would pay less than this, depending on things such as their current use of energy and how successfully they take up cost-effective measures to improve energy efficiency.
It all seems so rational. And yet . . .
For us Americans, it would be easy to shrug this off to the lack of leadership on climate issues from both the White House and Congress over the past -- well, dozen years or so. And while leadership has been sorely lacking in this arena, there's a critical role for business and consumers. The CBI report, in fact, identified consumers as "the essential driver for change."
Combining the emissions for which they are directly responsible with those that they influence through their purchasing decisions, they have an impact on some 60 per cent of U.K. emissions. As voters, they have a powerful influence on public policy. They need the information, the incentives, and the opportunity to make low carbon choices.
That last sentence is the key. For citizens to take the lead -- as shoppers, voters, employees, or investors -- we'll need reliable and consistent information about the consequences of our choices, much wider access to energy-efficient products and services than is currently available, and incentives to encourage changes in well-ingrained habits.
That's where the road to a low-carbon future involves a partnership between consumers and companies -- and, ideally, their political leaders.
December 2, 2007 in Climate Change | Permalink | Save This Page | Comments (5)
The Greening of Travel and Tourism, from Asia to Alabama
My travels over the past month have included speeches to two very different audiences on the same topic: The future of travel and tourism, as seen through an environmental lens. Based on these and other calls I'm getting, it seems that this industry is starting to pay attention . . . but only starting.
The two speeches -- in Bangkok, to the Incentive Travel & Conventions, Meetings Asia/Corporate Travel World conference; and in Gulf Shores, Alabama, to the Gulf Coast Convention and Visitors Bureau -- were striking as much more for their similarities as differences. Both audiences are just beginning to come to grips with a new reality on travel and tourism.
That reality is this: Up to now, the conversation taking place on the environmental front has basically to do with "the impact of travel and tourism on the environment." Increasingly, however, it's turning around: there's a growing awareness of "the impact of the environment on travel and tourism."
(The New York Times wrote on a similar topic this week, in an article on climate change and tourism.)
Indeed, both of my audiences' regions had experienced the tragic ravages of nature: Hurricane Katrina, which swept through the Gulf Coast (though 2004's Hurricane Ivan made more of a direct hit on Alabama's coast); and the 2004 Indian Ocean earthquake and tsunami. Both events decimated their respective tourism industries for a time, and both regions are still grappling with lingering effects, including a more cautious tourist market sensitive to disruptions born of natural disasters.
The two events at which I spoke were different in one key respect. The Asian conference was more business-to-business -- the audience included airlines, hotel operators, corporate travel buyers, meeting planners, and the like, mostly focused on conferences, events, and the "incentive travel" industry -- while the Alabama event was more consumer facing -- Alabama's Gulf Coast attracts largely families and retirees from the South and Midwest, with relatively few conventions or business meetings.
Those differences are significant, and they mirror what's going on in the larger marketplace of green goods and services. There's far more, and more substantive, action on the B-to-B front, as companies in most sectors are leaning lean on upstream suppliers and service providers to reduce costs and environmental impacts and offer their downstream customers less-toxic, better-packaged, and more energy-efficient goods and services. Corporate and some government policies are mandating venues and travel options that include at least some environmental considerations, and a growing number of conferences and meetings are calling themselves "green," whether from reduced waste, lower carbon footprint, or other activities.
Meanwhile, the green consumer marketplace is more of a slog, as I've noted in the past, with fewer genuine success stories among environmentally improved products and services. With the exception of ecotourism -- tours and travel packages that combine some sort of ecological theme, often aimed at well-heeled travelers -- green leisure travel hasn't yet caught on.
As I said, the industry as a whole is just waking up to the realities of a more eco-conscious world. And, to a large extent, they seem to have at least one foot firmly planted in denial that their world will somehow be affected by the world's environmental woes.
They couldn't be more wrong, of course. As the Times made clear, everyone from ski resorts to dive shops are feeling the heat, as it were, from climate change, as tourist-attracting natural wonders -- snow-packed slopes, vibrant coral reefs -- shrink or disappear altogether. In the developing world, where a much greater portion of the economy depends on tourism, this can be particularly devastating. As the Times noted, "In much of Africa, for instance, tourism is the major source of income and often the only source of foreign currency."
It's not just ecotourism spots that are vulnerable. Any destination that depends on visitors arriving by air -- whether tourists or business travelers -- could be hit hard, especially more remote locations like Australia and New Zealand, as well as U.S. hotspots like Las Vegas and Orlando, Fla. Droughts could be another factor crimping the industry, if water rationing limits showers, pool use, water park operation, etc. Don't even think about another SARS-like outbreak of infectious disease, which, some experts say, will be another all-too-frequent manifestation of climate change, and which could dampen people's willingness to travel for both business and pleasure.
Here's one small but significant example of what we're up against. In Bangkok, I gave an hour-long keynote speech that, among other things, challenged the Pacific Rim travel industry to consider how it will remain competitive in an eco-conscious or carbon-constrained world, especially as destinations in Europe and North America increasingly embrace recycling, energy efficiency, sustainable foodservice, carbon offsets, and other practices aimed at reducing the impacts of travel, meetings, and events.
For about two minutes of that hour I spoke about how some companies are starting to use a new, improved generation of teleconferencing technology as a means of reducing business travel, if only by a fraction. For example, I told them, Vodafone has adopted a policy in which employees are now required to justify why they need to fly somewhere, as opposed to using one of the company's 200 teleconferencing centers (or, presumably, simply telephoning). The policy reduced the company's air trips by 20 percent in one year.
"How do you compete in a world in which a portion of business travel is replaced by teleconferencing?" I asked them.
Simply asking, it seems, was a no-no. "Makower Raises Delegate Ire at IT&CMA Meet", trumpeted one industry publication, noting that
His speech prompted a walk out by two Jet Airways executives and upset other suppliers, many of whom were there representing hoteliers and airlines.
Lianne Kelly-Maartens, marketing manager for Sun International in India, said it was the wrong audience for a reduced travel argument. She said she couldn't believe her ears when he started to advocate reduced travel and more video conferencing (with its implied reduced role for hotels) as the way of the future.
“I am well aware of the need to embrace change for the sake of the environment but many people in the audience sponsored the keynote speakers’ attendance through their delegate fees,” said Kelly-Maartens. “It’s like the Rifle Association presenting at a gun control convention.”
Did I mention denial?
(Quick aside: Was it my imagination, or has it been reported that airlines are starting to create teleconference centers inside their major hubs as a nifty means of accommodating both travelers and telecommuters? I swear I'd heard that, but can't find a reference. Anyone?)
It strikes me, as I told both the Asian and Alabaman audiences, that amid these challenges lie opportunities. The Alabama Gulf, fiercely competing with a host of Atlantic and other Gulf beach destinations, might create a competitive advantage by forming a regional commitment to green excellence. That would likely be appreciated by, among others, the growing Boomers population frequenting its towering condos. The region is well on its way, with impressive recycling, biodiesel, land use, and other initiatives already taking place. Such efforts might even help to create new markets for green weddings, business meetings, and other events they're not yet attracting. Meanwhile, Pacific Rim countries, needing to attract Japanese, Australians, and North Americans to remain economically viable, have similar opportunities to compete among themselves to create more environmentally conscious hotels, exhibition halls, and the like, which these travel buyers have increasingly come to expect.
Of course, none of this may stave off the devastation some regions may face in spite of their greenest efforts, should nature wipe out their prime attractions, or should energy markets crimp long-distance travel. Even without an apocalypse, the industry could be in for a tough time.
November 2, 2007 in Business Practices, Climate Change, Green Marketing, Trendwatching | Permalink | Save This Page | Comments (2)
Cooler and the Quixotic Quest for Carbon-Neutral Consumption
The notion of carbon-neutral shopping looms large for many in the environmental world. If only we could shop without guilt, knowing unquestionably that the global warming impacts of our purchases were being rendered harmless, we'd all feel that we were being part of the solution to climate change.
It's a compelling and nearly rational notion.
Of course, an even better bet is to buy less stuff, and to make sure the stuff we buy is made using materials and processes that minimize harm to the environment (and, especially, to the people who make the stuff). And to use the stuff we buy for as long as we can, repairing and refurbishing it when possible, or making sure the stuff has another useful life. And to ensure that the stuff is disposed of in ways that ensure it will have nutritional value in the earth or in industrial materials cycles.
But, inevitably, we'll still end up buying more (and more) stuff. So, the quest for carbon-neutral shopping continues.
It hasn't been easy. Consumers interested in neutralizing the carbon impacts of their purchases -- by purchasing, either directly or indirectly, carbon offsets -- quickly find themselves in an informational morass. Carbon-neutral products and services have been coming fast and furious: credit cards that invest a portion of your purchases in offsets, services that allow you to offset your driving or air travel -- or just about anything else. Some of these have been roundly criticized for their methodology, resulting in geeky debates over technicalities about which even the experts don't agree.
And so, into the fray, comes Cooler, an Oakland, Calif-based start-up founded by a veteran environmental leader, in partnership with some of the largest environmental groups, using a pioneering methodology incubated at one of the nation's leading universities. It's partnering with 400 online retailers -- an impressive list, including Apple, Bloomingdales, Circuit City, Dockers, eBay, Florsheim, Godiva, and on down through the alphabet to Zales, Zappos, and Zones.
Suffice to say, it caught my eye.
Actually, Cooler first caught my eye two years ago, when its founder, Michel Gelobter, then head of the nonprofit Redefining Progress, invited me in to show me his green shopping idea. I'd heard the pitch before -- not from him, but from probably a dozen others: a means to help consumers make a difference with every purchase. At the time, Gelobter's budding company was planning a climate-neutral credit card. I was dubious about its prospects, and said so.
Fast-forward two years. The service, launched this week, has come a long way. The credit card idea has disappeared, at least for now. The service allows consumers to have all purchases made through any of its 400 online retail partners rendered carbon neutral.
As the company describes it:
Consumers who shop through ClimateCooler.com pay the same prices they would going directly to the retailer. The company uses a product-level carbon calculator that is the first global warming solution to address the impact of almost any consumer good or service sold in the U.S. Fees paid back to Cooler by the stores on its site are invested in renewable energy and pollution prevention projects approved by some of the world's best known environmental organizations.
That's half the story. The other half is a service launched by Cooler to help retailers -- online or off -- to more easily create carbon-neutral offerings for their customers, not just for a few products, but all of them.
What's makes Cooler -- well, cooler -- is that it utilizes an innovative database developed at the University of California at Berkeley. Called LEAPS (for Life-cycle Environmental Assessment of Products and Services), it provides an economic model, rather than an engineering-based one, for determining the climate footprint of a given product.
In the engineering model, companies conduct a life-cycle analysis (LCA), a costly and time-consuming methodology that examines all aspects of a product's environmental impacts, from the sourcing of its raw materials, through its manufacturing and use, to what happens to it at the end of its useful life. LCAs are comprehensive in their findings, but can take thousands of hours and many months to complete.
LEAPS -- which Gelobter calls "the country's only product and service carbon calculator" -- uses economic data, a blunter instrument yielding less-precise data, but doing so far faster and more cheaply, and with reasonable accuracy, maintains Gelobter. Analyzing the economic flows -- not just of the materials and processes that go into a product, but also including other related business activity, such as business travel or office operations -- LEAPS has created data for 1,100 product categories.
There are limits to LEAPS. Because it provides data only for product categories, not for individual products, there's no way to compare, say, Coke versus Pepsi. But it may be the best thing currently available to help consumers understand the impacts of the widest possible spectrum of their purchases.
On the offsets side, Cooler has partnered with Environmental Defense, the National Wildlife Federation, and the Natural Resources Defense Council, as well as Gold Standard, a European organization just now entering the U.S. scene, widely regarded as the international marker for high-quality carbon offsets. Gold Standard projects must meet very high criteria to ensure that they contribute to the adoption of additional sustainable energy projects, rather than simply funding existing projects. The four nonprofits monitor Cooler's offset projects to ensure a high level of integrity.
All told, Cooler is a compelling business. I've poked and prodded a bit to find the greenwash potential, the thing that critics will zero in on to show that it isn't all it's cracked up to be. I haven't found it, though I'm sure others will; they always do.
Of course, there's that whole consumption thing. Gelobter is quick to say that, "We don't want people to have any excuse for buying. We don't want to help people absolve their sins. We actually want to solve this problem." But, he adds, "People are going to continue to shop. And forty percent of Americans' carbon footprint comes from everyday consumer products and services." Cooler, he says, can mitigate much of that.
Gelobter says his principal concern is getting business on board. "Our biggest challenge is helping companies understand that getting to their carbon footprint is not all that hard. The people who have been leading the way, to their credit, have been digging deep into their operations and to where their products and supplies come from. And that's really important work. But we have to do that more quickly and in so many arenas that there actually isn't the manpower to do it all that way for the next five to ten years."
Can Cooler get companies and consumers to act, and act responsibly? That will be the acid test. And while shopping will never likely be truly carbon-neutral, Gelobter and his team are proving that it can come close.
And that's probably good enough for most of us.
October 9, 2007 in Climate Change, Green Marketing | Permalink | Save This Page | Comments (14)
Google's $10 Million Search for the Keys to the Plug-in
Google today is launching a fascinating experiment in clean-tech investing in the form of a worldwide search for products, services, and technologies that can advance the market for plug-in electric vehicles. And it plans to invest a total of $10 million in the ones it likes.
The request for proposal just issued by Google.org, the company's philanthropic arm, invites "entrepreneurs and companies to show us their best ideas" with the aim of making "catalytic investments to support technologies, products and services that are critical to accelerating plug-in vehicle commercialization." Google.org says it will invest between $500,000 and $2 million in the companies it believes stand the best chance of advancing plug-in technology.
Think of it as "The Apprentice" meets "An Inconvenient Truth."
As the company explains in a "Googlegram" it distributed this morning:
We realize that this type of open call for proposals is not the usual model for investment, but we wanted to use a process that was open to new ideas and new entrants. Part of our goal is to get as many people as possible to work on solutions to our vehicle emissions challenges. We welcome and expect to receive submissions from a wide variety of companies -- from cutting edge battery technologies to innovative service businesses - and from companies of all sizes. We also encourage participants from all over the world to submit proposals. This is a global challenge, and it will take all of us to solve it.
Entrants are asked to submit a five-page proposal by October 15. Those entries selected will be asked to submit a more complete business plan, which will then go through the usual vetting and due diligence processes. (Read an FAQ doc here.)
Why the open RFP? "It is, admittedly, an unusual approach, but we felt as though we wanted to reach the largest number of people with potentially interesting products, services, or technologies that could advance plug-in vehicles," Dan Reicher, Director of Climate Change and Energy Initiatives at Google.org, told me earlier this week. "We felt these technologies, services, products need to be developed sooner rather than later given the climate challenge that we've got. We thought this would be an interesting way to get maximum response."
A worldwide competition for the chance to have Google invest two million bucks in your fledgling firm? "Interesting way," indeed.
As the Googlegram puts it:
This open RFP process is a new approach to mission-focused investing, and we're interested to see what we can learn from it, both in terms of opportunities and gaps that exist in this space today, as well as ways that we can improve on this solicitation process for future investments. Our focus on learning is the primary reason we decided to narrow this first RFP to investments in private companies, rather than a combination of grants and investments.
The RFP is the latest in a string of efforts by Google to advance electric vehicles. Earlier this year, Google.org launched the RechargeIT Initiative that aims to "reduce CO2 emissions, cut oil use, and stabilize the electrical grid by accelerating the adoption of plug-in hybrid electric vehicles and vehicle-to-grid technology." RechargeIT to date has focused on philanthropy, committing $1 million in donations to nonprofits, and has created a small demonstration project that, the company says, will eventually lead to 100 or more plug-in hybrids in Google's corporate fleet. In addition, the foundation is putting its money toward advocacy and policy matters related to growing the plug-in hybrid market.
So, how will Google vet what could be a tsunami of investment proposals? "We're going to take advantage of the talent we have here at Google," explains Kirsten Olsen, Project Manager for RechargeIT initiative. "We have a lot of people here who have experience either screening business plans or have worked for electric vehicle companies." Eventually, she says, they'll whittle down the initial pool and use Google.org's management team, along with outside advisers, to choose the company that will comprise Google's investment portfolio.
I suggested to Reicher the potential for Google.org to receive countless business plans from small, struggling players with little to offer beyond a promising idea -- the kinds of things that many of us working in this space see on a daily basis. "We're not looking to fund research," he replied. "We're looking for commercially viable products, services, and technologies." On the other hand, he said, "some of these may look like earlier-stage ventures."
In the end, Reicher emphasized, these are investments, not grants. "We're going to put money to work in an equity-like way and expect to make something on it." But it's clear that making the most bang for the buck is not Google.org's mission. And, in Google's typically quirky way, there's a significant fudge factor here: Google.org isn't committed to how much it will actually invest -- "we could invest less than $10 million, we could invest more," says Reicher. It doesn't have any goals to actually make money, though it could easily do so if any of the investments take off. Instead of setting out internal rates of return, he says, "We have a specific problem we're trying to solve."
It will be interesting to watch, both to see what products and services eventually come out of this quirky experiment, but also how much the RFP investment approach itself is replicated by others. On the one hand, it seems obvious to invite the best and the brightest to compete for a relatively small but meaningful pool of money. On the other hand, like so many of Google's other innovative initiatives, no one has done this kind of thing before -- or at least done it well.
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September 12, 2007 in Clean Tech, Climate Change, Money Matters | Permalink | Save This Page | Comments (6)
Climate Change: A Mixed Report on Reporting
Corporate sustainability reporting has come a long way in a relatively short time. It wasn't that many years ago that most reports were essentially glossy, happy-talk brochures detailing a company's good, green deeds. Over time, as those reports became more detailed -- and more forthcoming -- the bar rose higher and higher. Today's leading-edge reports cover a wide range of information, including comprehensive details on what a company is doing right, what it's not, and how it plans to do better.
For companies, corporate sustainability reporting can be one of those no-win situations: the more they know about their operations and performance, the more they realize how little they really know -- and how many changes need to happen, including the need to produce better, ever more comprehensive reports. Suffice to say, this doesn't always win points for the good folks who spend countless hours compiling, writing, and rewriting the reports in the first place.
All of this is compounded when it comes to reporting on climate change, which large companies are increasingly expected to do. For both leadership and laggard companies, the pressure is growing to provide detailed breakdowns of their climate emissions -- by facility or business unit and type of gas emitted (there are six major greenhouse gases) and, for some companies, to report emissions produced by upstream suppliers and downstream customers. There are protocols for reporting these things, and the data need to be verified by independent third parties for reports to be considered credible.
So, how are companies doing? Good, but not good enough. That's my interpretation of the findings from two recent reports.
One of those reports, from the Global Reporting Initiative and KPMG's Global Sustainability Services unit (download - PDF), surveys the types of climate change reporting being done by companies. It found that while almost all companies are reporting on climate change, "on closer examination companies reported far more on potential opportunities rather than financial risks for their companies from climate change." In other words, companies are representing the financial impacts of climate change in a much rosier scenario than is likely the case.
To understand the folly of that, consider last fall's Stern Report, which noted that the costs of extreme weather alone could reach 1% of world GDP by the middle of the century, and that the economic disruption could approach those associated with the great wars and the economic depression of the first half of the 20th century. Hardly a rosy scenario.
The GRI/KPMG authors seemed rightfully surprised at companies' optimistic outlook. "A surprising two-thirds of companies reported new business opportunities from climate change, and nearly half of the companies surveyed reported involvement in emissions trading," it noted. A wide range of other business opportunities related to climate change ranged from manufacturing components for low-emission hybrid electric vehicles to selling energy-efficient laundry detergent.
But not much on risks. The GRI/KMPG folks tried to be charitable.
The low rate of reporting on risks from climate change may be because companies see climate change not only as a threat but also as an opportunity for new products, services and trading. Risks could be perceived to be beyond current business planning horizons, or companies may not have identified, explored or quantified risks associated with climate change and may therefore not be in a position to report on risks.
Such rationalization aside, companies seeking to remain competitive will need to view their world through a broader, more realistic lens. Many companies in the GRI/KPMG survey acknowledge that climate concerns could raise energy prices, but that's hardly the only risk. As a spate of earlier reports on the topic have made clear, risks to business from climate change include:
the potential for physical damage due to changing weather patterns, fines and business constraints due to regulatory requirements, legal costs from possible litigation, investment risk from shareholder demands, changes in the competitive landscape as companies adapt to climate change, and possible brand damage if a company develops a reputation as a "climate change villain."
Clearly, companies can do better.
The other report (Download - PDF) comes from the Association of Chartered Certified Accountants and the FTSE Group, the U.K.'s equivalent of Dow Jones. It assesses the performances of 42 U.K. companies seen as leading environmental reporters. It, too, found mixed results, with most companies' reports failing to live up to these evaluators' expectations. Company reports variously had too little quantitative information, provided insufficient context to explain their impacts and trends in their climate emissions, and had inadequate management goals for reducing emissions. Most companies didn't reveal their public policy positions -- whether they were lobbying against climate regulation at the same time they were making public pronouncements about their climate leadership.
Some of this may seem picayune, criticizing companies for being less than perfect rather than commending them for their efforts. But the time for celebrating mediocrity is behind us. Companies need to step up -- to comprehensively report their climate policies, practices, commitments, goals, opportunities, and risks, and do it clearly. The stakes -- for companies and the rest of us -- are too high to accept anything less.
And the benefits to companies of doing so are considerable. Climate emissions, for all intents and purposes, represent inefficiencies, opportunities to improve operations, reduce risks, and save money, not to mention being seen as a leader in the eyes of employees, recruits, customers, and others. In that light, well-done climate reports are hardly an end unto themselves, but the beginning of a continuous improvement cycle -- an opportunity to discover ways not just to be a better corporate citizen, but to be a better business.
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August 19, 2007 in Business Practices, Climate Change, State of the Art | Permalink | Save This Page | Comments (2)
The Global Water Tool: Making Corporate Water Data a Little Less Dry
World Water Week is upon us, an annual fete of all things H2O. The event, held in Stockholm, is the leading global meeting place for experts from businesses, governments, science, NGOs, academe, and United Nations agencies. This year's event features the launch on Tuesday of a remarkable Global Water Tool, a free online resource to help companies calculate water consumption and efficiency across a portfolio of facilities around the world.
The tool is the product of the World Business Council on Sustainable Development, a Geneva-based organization of some 200 international companies representing 30 countries and 20 industrial sectors. Nearly all of its members have core businesses that depend heavily on water: Alcan and Alcoa (aluminum production), ConocoPhillips and Shell (oil production and refining), Dow and Dupont (chemicals and ag products), Rio Tinto (mining), Lafarge and Holcim (cement), Pepsico and Suez (water and beverages).
Indeed, pretty much all large companies depend heavily on water.
One of the challenges such companies face is assessing the potential risks posed by water's uneven quality and quantity from place to place, and even from time to time in the same place. For companies, the questions are many: How many sites are in extremely water-scarce areas? Which sites are at greatest risk? How that will change in the future? How many employees live in countries that lack access to improved water and sanitation? How many suppliers are in water-scarce areas now, or will be in ten or twenty years?
Few companies can comprehensively answer such questions, leaving them at risk for disruptive water shortages and droughts. A recent study by the Pacific Institute found that while most corporate sustainability reports address freshwater use, "few offer insight into many water-related risks facing businesses. Most reports lack context, quantitative data, supply chain information, and consistent methods and definitions," the institute reported. That's a risk unto itself, akin to being a timber company that isn't measuring and tracking the future of forests.
As I've noted in the past, water issues are of growing concern to business, especially with the rising tide of concern about climate change:
Unlike climate issues, where problems and their solutions have global impacts, water will be seen as a mostly local issue requiring local actions. But, if as experts predict, warmer climates and lowered water tables lead to widespread disruptions, activists and regulators will begin to connect the dots, foisting regulations or global treaties upon the business community.
It's not just the poorest economies where water is a concern. Wealthy nations, too are increasingly facing water stress for their plants, animals, and humans. In Australia, for example, what's been called the worst drought in a thousand years is pitting farmers selling food for export -- a major source of national income -- against households, communities, and industries needing water on the domestic front.
The World Water Tool aims to help companies evaluate and address water risks and impacts in their operations and supply chains in order to minimize risks. The tool is the brainchild of Jan Dell, vice president of CH2M Hill, the global engineering and construction firm, which has been doing water risk analyses for big companies for years. Dell was frustrated at the dearth of readily accessible up-to-date data about water at the local level around the world. Each time her firm did an analysis, they had to go online, pull data from a series of databases maintained by United Nations and other organizations, and put it together in some comprehensible way. It wasn't easy or efficient, even for experienced pros.
With good reason. Gathering data about water for a far-flung operation can be more complex than analyzing something like greenhouse gas emissions, which itself can be overwhemling for many companies. With climate, you simply add up the data from each location to measure your company's footprint; a ton of carbon is the same wherever you go. With water, your company's footprint depends in part on local water conditions. If water is scarce, even the most efficient operation may be too much. When it's plentiful, conservation measures may not make sense. So, you need to understand the local situation to make sound business decisions. For example, in areas with lots of water, it may not be cost effective to put in energy-intensive water recycling facilities.
"It occurred to me a that a tool could be created, and that it shouldn't be a commercial one," Dell recounted to me last week. With the strong backing of CH2M Hill chairman and CEO Ralph R. Peterson, Dell donated countless hours in partnership with WBCSD and its member companies to create a tool that would simplify the data gathering and analysis process -- and to make it free to all users.
The resulting tool has two parts: an input sheet and an online map. The input sheet contains the company's site location and water use information. After entering your company's water use figures, the sheet automatically provides outputs, including water indicators compatible with the Global Reporting Initiative requirements and downloadable metrics charts that demonstrate the company's data combined with both the country and watershed figures.
The online mapping feature enables companies to plot their sites with external water datasets (from the U.N.'s Food and Agriculture Organization, World Health Organization, and Unicef, among others) and download those locations in a map. These datasets provide several key metrics, including renewable water resource per capita, mean annual relative water stress index, and access to improved sanitation. The tool is linked to Google Earth, which provides spatial viewing of a company's site locations in relation to detailed geographic information, including surface water.
The product of all this is a comparison of your company's water uses with key external water-related data; key water GRI Indicators, inventories, risk and performance metrics and geographic mapping; an assessment of relative water risks in your company's portfolio; and the calculation of water consumption and efficiency data.
It sounds complex, but it's not. The tool is fairly intuitive to use. Says Dell: "It could have been a spaceship, but we really tried to build a bicycle that everyone could ride."
Poring over such calculations and assessments may seem, well, dry, to most of us, but they are nothing short of revolutionary for those inside companies seeking to understand how climate change and other environmental challenges create both risks and opportunities.
Of course, the goal in all of this is for companies to take action, "not just to collect data and make charts," as Dell put it. But one tends to follow the other, and that makes the World Water Tool an essential part of any big company's efforts to quench its thirst for water in a way that is sustainable -- economically, environmentally, and socially.
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August 12, 2007 in Business Practices, Climate Change, Sustainability | Permalink | Save This Page | Comments (4)
GE Earth Rewards: Credit Where (Carbon) Credit Is Due
General Electric today is introducing Earth Rewards, a credit card aimed at reducing cardholders' carbon emissions. It's perhaps the most visible sign yet that climate change is reaching not just the mainstream, but Main Street.
A carbon-reducing credit card from GE may seem incongruous at first, but even a cursory look connects the dots. GE Money, GE's consumer and small business financial services unit, provides private-label credit card programs and other services for national and regional retailers in 55 countries. And GE's Ecomagination initiative has committed the company to introducing new environmentally focused products and services. So, Earth Rewards is GE Money's contribution to GE's overall goal of making money by helping its customers become cleaner and more efficient. (Note: GE is a client of GreenOrder, with which I am affiliated.)
The Earth Rewards card will invest 1% of consumer purchases made with the card in carbon offset projects. (Consumers can opt to get a half-percent cash back, in which case only one-half percent of their purchases will fund offsets.) The company isn't claiming that the card will necessarily render purchases "carbon neutral," though its promotional material explains that an average consumer charging $750 per month on an Earth Rewards card -- that's $9,000 a year in purchases -- would offset all of the emissions he or she is likely to produce in a year.
The launch of the card is accompanied by the release of a standard for carbon credits in the United States. The standard, which will be used by GE's joint venture with AES Corp. to develop and sell carbon credits, aims to ensure that the offsets purchased by GE on behalf of its credit card customers "are scientifically verified and provide a positive, measurable environmental benefit," in the words of the company. AES and GE plan to generate 10 million metric tons of greenhouse gas credits annually by 2010, some of which will be purchased by GE itself on behalf of its Earth Rewards customers.
According to GE:
If 100,000 cardholders spend $750 per month, the annual offsets retired would total approximately one million metric tons, equivalent to removing more than 175,000 cars from American roads for one year. If those 100,000 cardholders receive their statements electronically, they could save more than 50,000 pounds of paper, sparing 600 trees and more than 500,000 gallons of wastewater associated with paper production collectively.
GE turned to GreenOrder to help develop the standard. Among GE's concerns were that given all the questions over the quality and authenticity of some carbon offsets, that theirs would be seen as credible. "GE realized that there was controversy about the offset market, about whether carbon reductions were really resulting from the offsets," says Nicholas Eisenberger, GreenOrder's managing principal. "And they realized that they have a lot at stake in addressing those concerns proactively."
GreenOrder and GE consulted with the World Resources Institute, The Nature Conservancy, ClimateCHECK, the Pew Center for Climate Change, and others, and conducted an evaluation of the major global standards for offsets -- both regulated and mandatory -- in order to craft a standard that addressed things like additionality, verification, and the myriad other techno-geeky issues surrounding offsets. You can download the standard here (PDF).
GE's market research found that the promise of Earth Rewards appealed to consumers. "We found that consumers had increasing interest in how they could take steps to make a change to address global warming," Peter O'Toole, director, public relations at GE, told me this week. "In theory, people want to contribute to make a positive change to address warming. Realistically, it has to be a baby step."
GE explored various ways to make the card appealing to consumers. For example, one idea was to give consumers credits toward the purchase of such things as Energy Star appliances or compact fluorescent light bulbs (both of which GE makes). "What we found was that a fairly small group of consumers would go out and do that," says O'Toole. "And a large subset of that small group is the kind of active green that already would have done these things. So this wouldn't be attractive to that group."
In the end, GE determined that Earth Rewards had to appear similar to existing credit card reward schemes. GE found that the combination of cash back and offsets received the most enthusiastic response. (However, purchasers applying for the card will find that 1% for carbon offsets and no cash back is the default offering.) Says O'Toole: "We worked hard to figure out a tipping point that would get an enthusiastic response from consumers and I think we've found it."
GE's isn't the first carbon-focused credit card -- or the last. In March, the Dutch-based Rabobank introduced the Climate Card, which claims to offset consumer purchases. Earlier this month, U.K.-based Barclay Bank announced the Barclaycard Breathe card, which will "donate half of all profits to carbon reduction projects around the world." It's unclear exactly how the bank will calculate "profits," but Barclay has guaranteed at least £1 million (just over US$2 million) in donations towards environmental projects in its first year.
Stateside, Bank of America is readying plans to introduce its own card, probably in the next few weeks, contributing a portion of consumers' purchases to an environmental organization to invest in carbon offset projects. And there are still other climate-focused credit card schemes forthcoming from smaller, start-up ventures, often in partnership with leading environmental groups.
Can all of this actually transform our consumptive behavior? Is GE joining the teeming masses of marketers seeking to encourage consumers shop their way to environmental redemption? GE's O'Toole readily acknowledges that Earth Rewards is no silver bullet. "You can't spend your way to completely solve your own contribution to climate change," he says. "This is just one tool in a toolbox of things people should be using to reduce their carbon footprint." Toward that end, the Earth Rewards website offers calculators and other tools. GE says it will be sending monthly communications to customers to give them feedback on how they are reducing their impacts.
It's too early to tell, of course, but Earth Rewards has the potential to catch on with the large middle market increasingly concerned about climate change but willing to make only small, incremental changes, if that. (GE envisions a potential market of 25 million Americans.) Earth Rewards doesn't require consumers to change habits: It's a conventional credit card with a green sheen. Some would say that's a bad thing -- consumers need to make radical changes in their daily habits -- but it's also a realistic approach.
Incremental realism versus radical change: I'll bet a lifetime of carbon credits on the former, any day of the week.
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July 25, 2007 in Climate Change, Green Marketing | Permalink | Save This Page | Comments (12)
Could Air Travel Ever Be Green?
My travels this week take me to Detroit and Chicago for meetings and speeches. By the time I return home to California on Wednesday night, I'll have taken -- if my accounting is correct -- 51 plane flights during the first half of 2007.
I'm not bragging, mind you. Indeed, it's rather embarrassing (and more than a little exhausting). But like many of my environmental professional brethren, air travel is far and away my biggest personal and professional footprint. And it's not likely to change any time soon.
This reality notwithstanding, the airline industry seems poised to finally confront its environmental impacts -- and mine. The past few weeks have seen a flurry of activity, with airlines announcing greener planes, carbon neutral flights, and other initiatives aimed at lightening their environmental load, so to speak. Energy and climate friendliness are becoming competitive marketing positions for aircraft and engine manufacturers. And policy makers are making some tentative first steps to bring airline emissions back down to earth.
Those emissions are significant -- between 2 and 3 percent of global greenhouse gases, according to the International Governmental Panel on Climate Change, though other estimates are much higher. For example, according to U.K. government data released last month, emissions from flights departing the U.K. contributed approximately 13 percent of that country's greenhouse gas emissions in 2005 and could double by 2050. And experts point out that such figures do not take into account aviation's non-CO2 climate gases, which significantly contribute to the impacts of flying from hither to yon.
Indeed, air travel is growing "at unprecedented rates, yet substantial reductions of aviation greenhouse gas emissions are not possible in the short to medium term," write aviation consultants The Hodgkinson Group, authors of a new report on strategies for airlines on aircraft emissions and climate change. It notes that over the next 20 years, more than 27,000 new aircraft will be delivered, and the number of air travelers will double to 9 billion. The report (e-mail to request a copy) points out that
not only are emissions from air travel increasing significantly in absolute terms but, against a background of emissions reductions from many other sources, their relative rate of increase is even greater.
Moreover,
without government action to significantly reduce aviation growth within the U.K., for example, aviation emissions may be greater than those forecast for all other sectors of the economy. As a result, aviation may exceed the carbon target for all sectors by 2050;
There are signs that the world's airline executives are starting to feel the heat. Earlier this month, at the annual meeting of the International Air Transport Association in Vancouver, executives acknowledged that public pressure is leading them to change course. ""We've lost the PR battle and we're not going to win the emissions battle by chattering with more PR about the past. They (the public) want to see action," Leo Van Wijk, chief executive of KLM Royal Dutch Airlines, told his colleagues, according to Reuters.
Activists are paying attention, too. Last week, Greenpeace handed out free "climate-friendly train tickets" at four U.K. airports to to travelers making domestic trips wiling to cancel their flights. The group aimed to demonstrate that flying causes ten times more damage to the climate than taking the train. Traveling a slightly different course, a group called Plane Stupid held demonstrations at the offices of EasyJet to protest what they dubbed the "climate-wrecking effects of short-haul flights."
It's not just air travelers and activists. Regulators around the world are starting to get on board. The European Union decided last year that airlines that fly within the bloc will have to trade pollution allowances beginning in 2011. (Not surprisingly, U.S. regulators vehemently oppose that.)
Even without public, activist, and regulator involvement, airline action would likely be taking off, and not because of climate concern. The real motivator: soaring fuel costs, which are cutting into many airlines' profit margins.
All of which explains why Boeing and Airbus, the world's two principal airline manufacturers, seem hellbent on out-greening each other, if one were to believe recent reports. Boeing's forthcoming and much-touted Dreamliner 787 colossus (it carries up to 330 passengers across oceans) promises to be 20 percent more fuel efficient than anything flying today. Meanwhile, Airbus says its A380 superjumbo is cleaner per passenger-mile than the competition.
As with so many other technologies, competition also is coming from upstarts. For example, discount airline EasyJet recently announced a prototype for an "ecoJet" that it claims could reduce CO2 emissions by half compared to existing short-haul aircraft. That should make the Greenpeace protesters happy(er). The company said that the ecoJet prototype was based entirely on existing technologies, including an "open rotor" technology designed in the 1980s after the OPEC oil crisis ratcheted up oil prices. According to reports:
It will cut fuel burn by a further 15% with wings and fuselage constructed from lighter aluminium composite material. A further 10% will be saved by slower inflight speed and, in a development not linked to the aircraft, changes to air traffic control across Europe.
And Virgin Atlantic impresario Richard Branson has announced a partnership with Boeing and engine maker GE to design biofuels that can be used in commercial aircraft. Branson aims to test the fuel in a Boeing 747-400 aircraft by the end of 2008.
In general, however, the response of the airline industry to climate change can be characterized as -- well, going nowhere fast. The Hodgkinson Group report points out that the most common airline responses have been, broadly: to continue, more or less, with business as usual; to argue that the problem can be solved by improving air transport technology and infrastructure along with more efficient operational practices; and arguing that a global industry solution should be developed, working through the International Civil Aviation Organisation -- a classic ploy in many industries to avoid any one company breaking from the pack.
Hodgkinson concludes that airlines should consider a mandatory emissions offset market as part of a long-term strategy -- along with technological, operational, and management improvements -- as a sustainable, long-term solution to deal with their climate impacts.
That's not likely any time soon, given the industry's historic recalcitrance on the issue. Meanwhile, some airlines appear to be seeking shortcuts to real action: A handful have resorted to selling offsets to customers to mitigate the climate impacts of their flights -- a decidedly imperfect solution, as I've noted in the past. This year alone, several airlines have introduced carbon-neutral schemes, including Air Canada, Cathay Pacific, Delta, SAS, and Virgin Blue. British Airways launched a similar plan in 2005, although it has been criticized for being under-marketed and poorly conceived.
Note the absence of most of the world's major carriers -- apparently, they're still in a holding pattern about whether and how to address this.
Will we reach a point where airline climate policies and performance become a decision point for consumers? Will airlines eventually compete on their greenness? Will travelers, especially business travelers, abandon their coveted frequent-flyer programs to switch loyalty to more eco-friendly flyers? Can we move airlines to act faster than they seem to be doing on their own?
Even better: Can we figure out ways -- really, truly effective ways -- not to fly at all?
As an unabashed road warrior, I'll be the first to admit that this is a journey that's going to be one bumpy ride.
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June 24, 2007 in Business Practices, Climate Change, Trendwatching | Permalink | Save This Page | Comments (8)
'Climate Counts' Reveals Which Companies Are Walking the Walk
At last, the climate revolution is getting -- well, consumer-friendly.
Today marks the launch of Climate Counts, a new nonprofit initiative to rate major consumer brands on their climate commitments and performance. The project, on whose board I sit, represents the first time big companies have been rated consistently on climate using a comprehensive, consistent, and credible set of metrics.
This is no small matter. As climate change has grown in public consciousness, companies increasingly are stepping up to the plate, making commitments to reduce their greenhouse gas emissions, or announcing carbon-neutral products, services, or events. There's a steady stream of business announcements, as we report daily on ClimateBiz.com. (Business for Social Responsibility recently compiled a list of companies and projects that have committed to going carbon neutral, downloadable here.)
But which of these is real, and which are mere marketing gimmicks? Which companies are making substantive commitments and progress, and which are mere window dressing? Until now, it's been hard to discern.
Climate Counts began about a year ago, an offshoot of Climate: A Crisis Averted, the four-minute "documentary from the future" produced by the yogurt company Stonyfield Farm. (I was co-writer and executive producer of the movie.) Gary Hirshberg, Stonyfield's "CE-Yo," who spearheaded the project, wanted to do more to engage consumers directly in the climate action movement. Climate Counts was the result.
The data released today rate 56 companies on a 100-point scale based on more than 20 criteria in four categories:
- How well does the company measure its climate footprint? (up to 22 points)
- How much has the company done to reduce its global warming pollution? (up to 56 points)
- Does the company explicitly support (or express intent to block) progressive climate legislation? (up to 10 points)
- How clearly and comprehensively does the company publicly disclose its climate protection efforts? (up to 12 points)
You can view and download the scorecard and its criteria here.
The scorecard methodology was developed by GreenOrder, the strategy firm (with which I am also affiliated) that has helped a number of big companies address sustainability challenges and opportunities. GreenOrder also served as third-party verifier of the data collection process. All of the rated companies were shown the data Climate Counts collected about them -- compiled from a range of publicly available sources -- and were invited to amend or correct the information. Most did; a few did not.
The 56 rated companies garnered scores ranging from 77 to zero. You can view the individual company ratings alphabetically, by ranking, or by sector. There's also a downloadable pocket-sized guide (PDF) you can use while shopping. You can even get the Climate Counts score of a particular company delivered to your cell phone.
And the whole shebang, including all of the company ratings, is available in a downloadable 65-page report (PDF).
This first batch of rated companies reflect major consumer brands in eight sectors -- Apparel/Accessories, Beverages and Beer, Consumer Electronics, Food Products, Food Services, Household Products, Internet and Software, and Media. There will be a new batch of ratings every six months or so, and all company ratings will be updated annually.
There were a few surprises. For example, the company that scored highest was Canon, the consumer electronics company, which has not been very visible as a climate leader. On the one hand, that's rather refreshing: a company doing good, green work but not necessarily banging the drum. On the other, it's risky: Being humble about one's corporate climate performance will no longer be seen as an asset. Increasingly, as Climate Counts underscores, companies are expected to be public and transparent about their climate commitments and performance.
Other companies in the top ten include Nike, Unilever, IBM, Toshiba, Stonyfield Farm, General Electric, Motorola, and Hewlett-Packard, with News Corp. and Coca-Cola tied for tenth place.
Companies who fared worst include Amazon.com, Wendy's, Darden Restaurants (Red Lobster, Olive Garden, and others), Burger King, Jones Apparel (Anne Klein, Nine West, and many other brands), Clorox, Yum! Brands (KFC, Pizza Hut, Taco Bell, others), Levi Strauss, and eBay.
What does it mean to be a low-scoring company? The 16 companies that scored 10 points or less haven't taken even the first meaningful steps to address their climate impacts. Few of these companies have measured or assessed their climate footprint, set clear policies or goals, or demonstrated that they take their climate actions seriously and are ready to engage the public in their plans.
On the eve of the Climate Counts launch, I asked Gary Hirshberg his thoughts on how this project turned out. "What surprised me is how elegantly simple and workable this rating tool actually is," he responded. "The scoring system effectively measures a minimal level of commitment. We focused on which companies are doing the basic stuff needed to make themselves a good climate citizen. It will do exactly what we wanted it to do in terms of letting consumers and investors know which companies are doing that."
Hirshberg also said that he was "wowed" by how useful the tool was for his own company. (Stonyfield rated a respectable 62 points, sixth overall, a score that Hirshberg admits he expected to be higher; its parent company, Group Danone, fared less well, scoring 50 points.) "The scoring gave us a very simple and reliable way of knowing internally if we are doing everything we could be -- which it turns out we're not -- and it gave me an incredible index for goal-setting. This isn't just a one-time tool. This is setting up a continuous improvement process."
As a result of going through the Climate Counts scoring process, Stonyfield is setting up ten "Mission Action Plan" groups -- teams engaged on different aspects of company operations, from transportation to processing to purchasing. "They're focused on what it's going to take to improve our score," says Hirshberg. For example, he says, Ryan Boccelli, Stonyfield's Director of Logistics, is now using the metrics of the Climate Counts scorecard to better manage Stonyfield's relationship with Ryder, the company's national transportation partner. "Ryan now has an index, a language, and a team because everyone else is able to use the same language. It's really revolutionized our abilities."
That's the ultimate goal, of course. Rating companies and educating consumers about leaders and laggards on climate change is just the means to an end. The goal is to move the needle -- to get companies to use their ratings as a tool for improvement. I asked Hirshberg his vision of "wild success" for Climate Counts. His relatively modest response: That rated companies, on average, double their scores over the next twelve months.
We'll see in a year from now, when these companies are re-rated, whether that vision comes to pass -- and whether the public ratings of companies can change the climate on corporate action.
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June 19, 2007 in Business Practices, Climate Change, Green Marketing | Permalink | Save This Page | Comments (6)
London Goes Carbon Crazy
To paraphrase Kermit: It isn't easy being red, white, and blue.
Arriving in London this past week was something of a shock to the system, a jolt of reality that was both delightful and disarming. The town seems to have gone carbon crazy, offering up a display of initiatives from both the public and private sectors that highlighted how far behind the U.S. has fallen. The consciousness about carbon here seems to be sky-high.
Within minutes of deplaning at Heathrow on Wednesday, I was greeted by this intriguing headline: "GREEN LABELS FOR SHOPPERS." Suffice to say, as someone who's been tracking green consumer and labeling issues for nearly two decades, it caught my eye.
The story, in the Evening Standard, turned out to be more than typical British tabloid hyperbole:
Everything we buy could have "carbon footprint" labels to tell us how green the product is under a government plan unveiled today.Just as food carries warnings on salt, sugar, and fat, the new labels would carry a sign or figure to alert shoppers to the CO2 emissions used.
The label could be based on a "traffic light" system that would show red for highly wasteful products and green for those with lowest impact on the planet. The scheme, which will be the first in the world, was unveiled by climate change minister Ian Pearson.
Note the use of the words "would" and "could." The program, created jointly by Britain's Department for Environment, Food, and Rural Affairs and the Carbon Trust, a government advisory body, is far from ready to go. The announcement, in fact, kicked off an 18-month research project to determine which stages of the manufacturing process should be included in the calculation.
Still, it's an ambitious, even audacious, plan, and some players already are moving things along. Walkers Snacks Ltd., a maker of crisps (potato chips, to us Yanks), already has added carbon labeling to its products. (Walker is a unit of Pepsico.) And Tesco, the U.K.'s largest supermarket chain, announced in January that it would be the first supermarket chain in the world to assign a carbon label to every product on its shelves. It said the label would record the amount of carbon dioxide emitted during the production, transport, and consumption of the 70,000 products it sells.
Tesco is the largest U.K. supermarket, but hardly the only one that has found its green gene. Britain's four top chains -- Tesco, Asda (owned by Wal-Mart), Sainsbury, and Morrisons -- are vying to out-green one another in the public's eyes, variously improving their products and practices. "An out-and-out arms race," as one of my London friends put it. And none of them is even considered the "greenest" supermarket. Those bragging rights belong to the Waitrose chain, according to one report.
Meanwhile, Marks & Spencer, which sells both groceries and apparel, announced plans earlier this year to go carbon neutral by 2012 and has a 100-point action plan to get there. The program is called Plan A ("Because there is no Plan B") and is aggressively touted in its stores.
London itself is greening up its act, with Mayor Ken Livingstone -- Britain's counterpart to Arnold Schwarzenegger, at least from an environmental perspective -- vowing to reduce the city's carbon emissions by 60% within 20 years. Overall, nearly 200 British cities have a signed a pledge to take action, known as the Nottingham Declaration.
In the midst of all this, of course, was President Bush's seemingly sudden change of heart on Kyoto -- or, at least, his pronouncement that the climate crisis is, after all, real and that the U.S. "takes this issue seriously." His words were widely derided by the British and other Europeans. ("Leading from the rear on emissions," opined the Financial Times). I found myself having to do a bit of explaining of and apologizing for my country's laggard ways.
On my first full day in London, I met with Julia Hailes, arguably the birth mother of the green consumer movement. Hailes co-authored the 1987 bestseller "The Green Consumer Guide" and co-founded, with John Elkington, the think tank SustainAbility. (I wrote the U.S. edition of the book, published as "The Green Consumer" in 1990, as well as the U.S. edition of two other books Hailes co-authored.) She recently authored a new edition.
I asked Hailes about the government's proposed carbon labeling program, expecting her to be enthusiastically supportive. To my surprise, her enthusiasm was tepid. "I'm interested as opposed to excited. I'm not convinced it in itself is going to go far enough," she told me. "I think that the process of doing it is, at the moment, more significant than the end result, because I'm not sure that the end result will be all that speedy or effective."
Hailes said that another idea being discussed in government circles and elsewhere is "personal carbon trading," in which individuals are allocated carbon credits -- say, for travel and home energy use. Individuals who needed more credits could buy them from others who didn't need them -- a personal cap-and-trade system that could help to put a value on carbon for everyday consumers.
Said Hailes: "If you start having carbon quotas for people, one of the real benefits of that is people are going to start evaluating the value of what they're buying versus the carbon credits they're expending, in the same way that somebody on a diet is asking, 'Is that chocolate cake good enough for me to break my diet?' Or someone on a budget asks, 'Do I really want to spend my money on that?'"
It was clear that carbon labeling and personal carbon trading are part of a larger effort to foment a carbon mentality among British consumers.
You could see signs of it everywhere -- in stores, in media, in billboards and broadsides. ("Lower carbon footprint, lower price," read one bus shelter ad for the Renault Eco2 automobile.) This is not entirely surprising for a place where gas sells for the equivalent of $6.50 a gallon, thanks to taxes designed to discourage consumption. (Gas sells for about that price in Norway, too, where this is being written, despite the fact that Norway is the third-largest crude oil exporter in the world.)
In another sharp contrast with the U.S., carbon and climate are now part of a broad political consensus in Britain. "No one from any of the political parties would come out in opposition to environmental regulations these days," said one business reporter I met with. Even the Confederation of British Industry, the trade group for mainstream business (the equivalent of the U.S. Chamber of Commerce), has an effort underway to "analyse the barriers, beyond carbon price, to realization of the opportunities, especially in residential and corporate energy efficiency and low carbon power generation."
Granted, sometimes the Brits can go a bit overboard. Example: A radio station is urging Londoners to stage a one-hour blackout during the summer solstice as "one huge message to the world." On June 21, from 9-10 p.m., citizens are being asked to switch off their lights and appliances. It's called Lights Out London.
Call it symbolic, a midsummer night's dream, or whatever. But it's yet another sign of how climate fever has caught on here -- a vivid contrast to the American approach, which seems to favor living in the dark all year long.
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June 3, 2007 in Climate Change, Green Marketing, State of the Art | Permalink | Save This Page | Comments (5)
Shining a Bright Light on Energy Efficiency
Energy efficiency came back into the limelight this week, a seemingly rare but welcome occurrence. Given the magnitude of our climate and energy challenges, the opportunities to use energy more efficiently and effectively have remained largely unexploited, as I've noted in the past. In our gadget- and gizmo-obsessed culture, in which status is expressed by what we can show for ourselves, not necessarily by what we do, being energy efficient is a decidedly tough sell.
Example: We'll spend irrationally on solar panels, whose economic payoff may be years away, if ever, but whose existence offers a "Hey, look at this" opportunity for both individuals and institutions. But we'll shun smaller investments that have more immediate economic and environmental payoffs: insulating buildings, installing devices that ration energy use to the times and places it's actually needed to provide comfort or service, and upgrades of appliances and other energy hogs with the latest models that do the same job with far fewer tons of coal, barrels of oil, and the like.
True, it's hard to get green cred for bragging about your company headquarter's R-34 insulation, but that may well be the wiser choice from an economic and environmental perspective.
It's not either/or, of course -- we need both clean energy and efficiency. It's simply that one of those two seems to have a much better press agent.
So, it was gratifying to see two significant developments this week that gave energy efficiency its rightful place in the sun. The first was the launch of the Clinton Climate Initiative's global Energy Efficiency Building Retrofit Program, which brings together four of the world's largest energy service companies, five of the world's largest banks, and sixteen of the world's largest cities to reduce energy consumption in existing buildings.
Under the program, four big energy technology and service companies -- Honeywell, Johnson Controls, Siemens, and Trane -- will conduct energy audits, perform building retrofits, and guarantee the energy savings of the retrofit projects. Groups like the American Society of Heating, Refrigerating and Air-Conditioning Engineers and U.S. Green Building Council will help the cities develop programs to train local workers on the installation and maintenance of energy-saving and clean-energy products. Meanwhile, Citibank, UBS, Deutsche Bank, ABN AMRO, and JP Morgan have agreed to provide $1 billion each in financing for both public- and private-sector building owners to undertake these retrofits at no capital cost. The resulting $5 billion kitty effectively doubles the existing global market for building energy retrofits.
This is no small matter. Buildings are responsible for roughly half of greenhouse gas emissions in most cities, and over 70 percent in older cities such as New York and London. And most buildings, large and small, leak heating in winter and cooling in summer, among other wastefulness. A handful of basic activities and technologies, along with a modicum of changed habits, can slash energy use between 25 and 50 percent. The Clinton Initiati