Exxon, the Rockefellers, and the Future of Big Oil
Last week, the Rockefeller family made an historic challenge to Exxon Mobil Corp., the company founded by John D. Rockefeller in 1870 (as Standard Oil), and in which dozens of family members still hold stock. The challenge came in the form of a shareholder resolution to require an independent chairman of Exxon's board of directors, so that the company can better maximize long-term shareholder value in a rapidly changing energy environment.
Making the board chair independent of the CEO may seem a technical governance matter, but it has great significance. The family argued that having a board that was independent from the day-to-day operations of company management would enable Exxon to better assess the risks and opportunities that are altering the energy and environmental landscape — and that Exxon might alter its business strategy based on a different set of assumptions than those under which the company has been operating.
Research conducted by my colleague Ron Pernick and me at Clean Edge in 2006 looked into Exxon and its set of assumptions about our energy future. Exxon has long adopted a stance that renewable energy will be a negligible part of the energy mix for the foreseeable future, and that operational and market conditions will remain static and relatively unchanging. At the time, we wondered, given the realities of our increasingly volatile global energy marketplace — growing demand, declining production, global security issues, climate change, rising food costs, and other business, social, and environmental challenges — whether Exxon's narrow view would leave the company at risk from competitors and less able to seize new opportunities and adapt to shifting market conditions.
We found some of Exxon's assumption flying in the face of the facts — for example, that only 2% of the world's energy will come from renewable sources by 2030, despite estimates by the Renewable Energy Policy Network that already attribute 4% of the world's energy to new renewable sources. The company consistently underestimates the annual growth of solar, wind, geothermal, biofuels, and other alternative energy resources. Moreover, company statements — as underscored by its actions — is that they are waiting for a major breakthrough in renewable energy technology, at which point it will deploy its significant resources in bringing that technology to market.
There is good reason for the Rockefellers and other shareholder to be concerned about this strategy. By placing nearly all of its emphasis and focus on oil and gas, Exxon risks losing out on the new markets for renewables and places the company strategy within an outdated model of energy markets. As the renewable energy market has developed, it has become clear that our energy future won't be based on a single breakthrough, but on dozens, even hundreds, of smaller ones — new technologies, products and services, and business models. Everyone from GE to Goldman Sachs to Google seems to get this, and are investing accordingly.
So, diversifying investments more aggressively into clean-energy research and development would position Exxon to be better able to adapt to changes, capitalize on anticipated carbon trading schemes and expected developments in the regulatory environment, hedge its bets, and build new business opportunities as alternatives to petroleum-based technologies gain market traction.
Instead, the company seems to be biding its time, waiting for renewable energy markets to develop rather than jumping in to help build them. As a result, rather than taking a proactive role in advancing these technologies, Exxon runs the risk of either not having sufficient access to a viable partner when it finally decides to enter the renewables market in a substantive way, or of arriving too late and losing first-mover advantage, if not significant market share. Most of the other majors — BP, Chevron, Shell — have at least some robust renewable energy programs in place — wind, solar, geothermal, fuel cells, tidal power, and more — albeit relatively small ones in terms of revenue. But at least they're gaining experience and partners in the renewables space.
There are billions of dollars being invested by some pretty smart people in the notion that there's a Moore's Law of energy — that is, that innovation can make clean energy both ubiquitous are cheap. They're betting that energy can follow the path of microprocessors, hard-disk storage, and wireless telecommunications, where costs have plummeted as technology has steadily improved — and carbon can, in effect, be taken out of the energy equation. If even some of these bets pay off, Exxon's assumption — that oil and natural gas will remain the dominant energy sources for decades to come — could put them at a competitive disadvantage. Hence, the interest of long-term, multi-generational shareholders like the Rockefeller family.
It doesn't take much to roil the markets, as Exxon found out last week. At the same time that it revealed gusher-level profits, it's stock took a dive. The reason: Exxon's oil production was down 10 percent, continuing a yearlong decline. It's unclear whether the company will continue to have difficulty finding sufficient new reserves to replenish the billions of barrels it is pumping out of the planet, but if the trend continues, Exxon could find itself in trouble.
It's not too late. By changing strategies, Exxon stands to capture a better foothold in the evolving energy market and a significant percentage of revenues that would otherwise be lost.
Experts believe that the most viable technologies for the near term — such as cellulosic ethanol, next-generation solar technology, and plug-in hybrid technology, along with copious amounts of energy efficiency — represent the future of energy. With the likelihood of such events as a carbon tax or carbon caps within the next decade, the conditions for market acceptance of lower-carbon solutions become more attractive. The concept of negawatt programs is gaining traction, with power companies investing in conservation (average cost of $350/kilowatt) over coal ($1,000/kilowatt). The emergence of small, lightweight, long-running lithium-ion batteries has helped create a market for notebook computers, cell phones, and other portable devices. Efforts to scale that technology for use in automobiles could do for that industry what improved batteries did for computer and phone companies, building a market for hybrid, plug-in, or electric vehicles with great efficiency, acceleration, and range — at the same price or cheaper than today's gas-powered vehicles.
It's not just technologies that are changing. So are markets. For example, until relatively recently, the distribution of gasoline has been controlled by entities with an interest in keeping alternatives out of the infrastructure — the oil companies. But Wal-Mart and other independent retailers with large fuel distribution networks are largely impartial to the type of fuel they carry, and their market reach to consumers can accelerate the growth of alternative products and infrastructure. Large fuel purchasers like the Defense Department are actively creating conduits for the market acceptance of oil and gas alternatives by encouraging economies of scale and increased R&D. There are other disruptive technologies on the horizon that could gain market acceptance, further dampening demand for oil and gas. By waiting for a single "breakthrough" technology, Exxon is overlooking that this sector is engaged in an iterative process that is building a new approach to energy applications; waiting for the perfect solution is a potentially dangerous approach, from a business strategy perspective.
The modern history of innovation suggests that being big is no assurance of survival. Consider that six of the thirty multinationals included in the Dow Jones Industrial Average 20 years ago are gone today (Allied-Signal, American Can, Bethlehem Steel, Texaco, Union Carbide, and Woolworth), and a seventh, AT&T, exists in name only, the original entity having been scattered into multiple companies. Several others — Eastman Kodak, IBM, Sears, and Westinghouse — look radically different today than then. In many industries, the dominant players not that long ago are gone. Burroughs, Data General, Digital Equipment, NCR, Sperry, Univac, Wang — all leading computer manufacturers of the 1970s and 1980s — are cases in point.
The Rockefellers' efforts are aimed at ensuring that Exxon doesn't follow this path, and that it will overcome its stubborn, decidedly non-green, outlook toward one that recognizes the realities of a world in which carbon and climate become significant business considerations.
Will the strategy work? The odds are long, but we'll know more after the company's annual meeting on May 28. If history is any indicator, Exxon is likely to downplay dissent in favor of its own hellbent course.
May 5, 2008 in Business Practices, Clean Tech, Money Matters | Permalink | Save This Page | Comments (6)
The 2008 Shareholder Season
Some of the most important voting of the year doesn't involve candidates or political parties. It's taking place between shareholders and the companies they own.
It has become an annual rite of spring: a bumper crop of shareholder resolutions filed by activist investors aimed at compelling companies to address any of a wide range of social and environmental issues. This year is no different.
A new report on the 2008 season — the majority of companies hold their annual meetings in the spring — has been published by As You Sow (Free download). And while its intended audience are foundations, whose endowments typically include large stock holdings, the report offers insight for anyone interested at the state of the art of shareholder activism.
First, some background. Shareholders file all sorts of proxy proposals at annual meetings. Many have to do with corporate governance — such issues as selection of directors, appointment of auditors, and approving company stock plans. There are also social proxy proposal, frequently introduced at annual meetings by activist pension funds, especially those representing public employees and schoolteachers; universities (remember how schools divested investments in companies doing business in South Africa during Apartheid?), labor unions, foundations, and large faith-based institutional investors (what I lovingly refer to as "Little Sisters of the Immaculate Investment").
Over the past decade of so, shareholder proposals from such organizations have grown, from just over 200 in 1999 to 368 last year, according to As You Sow's "Proxy Season Preview." Environmental topics have historically accounted for the largest category of social proposals filed, covering such issues as greenhouse gas emissions, recycling, water, forestry, genetically engineered food, nuclear waste, oil production, protected lands, and environmental justice.
Many of these proposals never come up for a vote, but that's part of the process, As You Sow explains.
The goal of shareholder advocates is to change a company's practice or policy. Most shareholders prefer to do this through a "good faith" dialogue with the company. Shareholders file proposals if a dialogue is not going well or the company is unresponsive. Filing a proposal can often bring the issue to the company's attention and lead to a dialogue or change in policy or practice, in which case a proposal is no longer warranted and ultimately withdrawn.
Even when votes are held, success doesn't always require a majority vote. While most social and environmental proposals receive votes in the single digits, a significant number have received 20% to 50% in the last few years. "These votes are comparable to or better than traditional governance proposals and serve as further evidence that social, environmental, and reputational risks are being viewed as legitimate concerns in their own right by mainstream investors," says the report.
Because of this, proposals tend to be repeated year after year, largely in hopes of garnering bigger and bigger support. Indeed, says As You Sow, many of last year's top issues will dominate this year's crop of proposals, though 2008 will also see a slew of new proposals and shareholder campaigns. Major issues include global warming (50+ proposals covering climate change, greenhouse gas emissions, energy, and related issues), sustainability (35+ proposals), and animal welfare (25+ proposals).
One topic entering the picture is "toxic TVs." On February 19, 2009, all television signals in the U.S. will convert to digital broadcast, rendering millions of analog TVs obsolete. This so-called Digital Deadline is likely the largest government-mandated planned obsolescence in U.S. history. Tens of millions of TVs are expected to be discarded as consumers purchase new digital sets rather than obtain a low-cost converter which will allow current sets to function. Absent a responsible recycling system, this flood of TVs will add to the growing electronic-waste stream, much of which is sent to unsafe overseas recycling facilities. As You Sow filed a proposal at Best Buy asking the company to study the feasibility of using its stores as a take-back venue for e-waste and to give special consideration to have infrastructure in place for the digital switchover next year.
If nothing else, the "Proxy Season Review" is a good primer on environmental topics companies are being asked, or forced, to confront. Historically, a handful of leadership companies break ranks with their corporate brethren, taking a bold stance on a topic that has become a sore spot with investors and activists.
What topics and companies will be the talk of the 2008 proxy season? What will be the next domino to fall?
We should all take stock.
April 28, 2008 in Money Matters, Trendwatching | Permalink | Save This Page | Comments (3)
Follow the Money: The (Slow) Rise of Green Financial Services
Markets for environmental products and services tend to cluster in categories. Makers of computers and other electronics, for example, have almost unanimously embraced energy efficiency, product takeback, and the like, as demands accelerated from from customers, activists, shareholders, and regulators. Energy and environmental considerations are also becoming commonplace in appliances and most other energy-consuming goods -- with the notable exception of automobiles. It's hard to find a dishwasher, for instance, that doesn't boast about its energy-saving features.
We seem to be on the cusp of a cluster of green financial services -- everything from energy-efficiency mortgages to green consumer banks to climate-friendly credit cards. It's hardly approaching a tipping point, but financial services companies seem increasingly interested, almost eager, to cater to green-minded consumers and companies.
A new report from the United Nations Environment Programme Finance Initiative has nicely documented the trend, showing what's happening and where, and what it might take for such services to garner even greater interest.
The report (Download - PDF) looks at the current crop of green products and services, in North America, Europe, Australia, and Japan. It notes that "Relative to their North American counterparts, banks in other developed regions have traditionally been more proactive and innovative with respect to 'green' product and service development." As usual, we Americans are green laggards.
One reason is that U.S. banks have gone through a wave of consolidation in recent years, leaving fewer, larger banks. As a result, says UNEP,
it becomes more challenging to integrate innovative banking products, including "green" products and services, into their respective portfolios. In a less competitive environment, banks are not given a high incentive to innovate and thus differentiate themselves from peers with state-of-the-art offerings, such as "green" financial products and services.
When they do offer green products and services, it's usually because of one of two drivers, says UNEP: they are either "board-driven" (when a bank's leadership recognizes the opportunities or risks of an environmental issue, then responds by defining one or more optimal products or services) or "client-driven" (where a bank recognizes a considerable demand and fills a niche). For example, in the area of emissions trading, the board of Paris-based BNP Paribas made an executive-level decision to enter the climate change market long before clients expressed the need for such a service. Conversely, Italy's Banca Intesa waited to establish an emissions trading desk until a considerable number of corporate clients requested the service, which over time became highly profitable.
Of course, activists have played a role, too, with environmental and shareholder organizations demanding that financial institutions adopt sustainable banking policies and practices, such as the Equator Principles, which govern project financing, especially in the developing world. Some groups, such as BankTrack, also provide advice on improving bank sustainability policies. Last year, for example, BankTrack engaged with several European banks, including ABN, AMRO, Citigroup, HSBC, and Rabobank, to review their environmental initiatives.
What impressed me most about the UNEP report was its exhaustive catalog of green banking products and services, including examples from around the world. Consider the world of retail banking -- the kinds of services typically available to individuals and small businesses. A sampling of green offerings:
That doesn't include any of several green credit cards that, variously, donate a portion of sales to environmental groups, offset emissions associated with purchases, or reduce interest rates for green products and services, among other schemes.
Such products seem to be paying off for some banks. For example, the goGreen car loan offered by Australia's mecu -- in which the bank provides low interest rates to cars based on their greenhouse gas rating, the offsets the car's carbon emissions during the life of the loan -- has led to a 45% climb in car loans at the bank. Meanwhile, Barclays has issued nearly 11 million of its Breathe carbon neutral debit and credit cards.
And then there's the corporate and investment-grade banking category, featuring another wide spectrum of offerings, involving project finance, securitization, bonds, technology leasing, carbon finance and emissions trading, and other products and services. The UNEP report offers examples of each.
There's more to come, says UNEP, including green commercial real estate, carbon markets, clean technology, and climate-related insurance, to name four broad markets expected to gain traction in coming years.
For all the promise, however, UNEP remains skeptical about the U.S.
There continues to be minimal environmental leadership, or at least awareness, in North America's retail banking sector. The popular perception is that the consumer and [small and midsized company] banking space remains relatively neutral in terms of environmental impact; a stance that overlooks the formidable influence, positive and negative, that clients wield over the use and management of natural resources.
Moreover, UNEP acknowledges that most green financial products and services remain either in the nascent stage of development or haven't yet proven themselves in the marketplace. As a result, "any rigorous measurement or ranking of these designs would be overly speculative and risk misrepresenting some designs over others."
Still, the growth of green finance seems inevitable, as banks and other financial institutions recognize the pressing environmental need and the growing customer demand for more socially responsible financial services.
And that, at the end of the day, money is the root of all evolutions.
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September 23, 2007 in Green Marketing, Money Matters | Permalink | Save This Page | Comments (4)
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)
The Confounding Complexities of Building Green
A survey released last week by the World Business Council on Sustainable Development found that key players in real estate and construction overstate the extra costs of green buildings by some 300 percent, "creating a major barrier to more energy efficiency in the building sector."
Respondents to the 1,400-person global survey (Download - PDF) -- co-chaired by United Technologies and Lafarge, both global companies heavily in the building sector -- estimated the additional cost of building green at 17 percent above conventional construction, more than triple the true cost difference of about 5 percent.
At least, that's what the WBCSD's press release told us, and what most news organizations dutifully reported.
The study itself told us something else: It's not just the money, honey.
Building green turns out to be an overly complex proposition, with a fragmented value chain and a confounding lack of integration and coordination among the various players. Moreover, the study found, incentives to reduce energy use usually are split among these players "and not matched to those who can save the most through energy efficiency."
Even a brief examination of the motivations and interests of the players involved with the creation of a building reveals the disconnect when it comes to making them green:
There are other players: leasing agents, local authorities, lenders, construction specifiers, and on and on. Each brings their own interests to the party. Conclude the authors:
The complexity of interaction among these participants is one of the greatest barriers to energy-efficient buildings.
That's a worrisome finding, one that suggests that even at cost-parity, making buildings greener might be a tough sell.
"I'm not sure when it started, but the industry developed in a very expert-oriented way," Bill Sisson, Director of Sustainability at United Technologies, told me recently. "The industry evolved itself around areas of expertise and investment. As it evolved over time, you have this structure that doesn't naturally lend itself to a common set of decisions being made through the process."
Along the way, this leads to decisions that are short-term, at best, or at least ones that aren't in everyone's best interests. "It's sad, but in many cases you find the marble in the lobby gets higher preference to a new higher-performing chiller or mechanical system because of who makes the decision, and which one is valued more," says Sisson, who led the WBCSD project on behalf of UTC.
What do to about this state of affairs? The WBCSD study concluded that financiers and developers are the biggest barriers to more sustainable approaches in the building value chain.
WBCSD identified eight factors that influence decision-makers about sustainable buildings, four of which "are the main barriers to greater consideration and adoption by building professionals and are the most significant in influencing respondents' consideration of 'sustainable building'." They include:
Sisson points out that a small but growing number of building professionals are attempting to avoid the industry's stovepiped mentality by employing an integrated design process, in which the various players get together -- virtually or face to face -- to examine various trade-offs. This may seem like an obvious solution to fragmentation, but it's nothing less than revolutionary for the building industry.
For example, in working with its own customers, United Technologies -- whose Carrier division has been one of the prime movers in the green building sector, and one of the original conveners of the U.S. Green Building Council -- has borrowed some tools and techniques from its aerospace division. "If you think of an aircraft as a building with wings, it's got all the same basic ingredients -- power systems, environmental control systems, creature comforts," explains Sisson. "And aircraft manufacturers are very sensitive to fuel consumption. So, to design an aircraft effectively you need to bring concurrent engineering thinking into the design of the aircraft."
UTC is beginning to deploy some of this same "concurrent thinking" in its building division. Says Sisson: "We have to go beyond just thinking about air conditioning. We have to think about how the air conditioning is part of the building system, and how customers can more effectively make those trade-offs" -- for example, between building orientation, the number of windows, or the thickness of insulation on the one hand, and the size of the air conditioning system on the other. (And how all of this relates to the cherished marble lobby.)
It's not just about building greener buildings, of course. It's also about building more profitable ones. Lighting, cooling, and maintenance make up as much as 85 percent of a building's fifty-year life-cycle cost, and the lion's share of those costs are locked in during the design phase, before any construction begins. So, thinking through costs, benefits, and trade-offs early on has a high leverage factor.
Moreover, there is evidence that an energy-efficient building can command a premium. According to the Green Building SmartMarket Report 2006, professionals expect greener buildings to garner an average 7.5% increase in value over comparable standard buildings, together with a 6.6% better return on investment.
Sisson acknowledges that the WBCSD report defines the business levers, but falls short of citing specific recommendations. His WBCSD working group is now engaged in scenario planning, forecasting, and modeling to come up with a robust set of recommendations on the policy, finance, technology fronts, with the aim of breaking through the barriers to make building green an easier process for everyone involved.
Of course there's an additional front to be addressed: human behavior. Developers and all the other players need to change their habits, break the cycle from "that's the way it's always been done" to "how can we do it better?" As the WBCSD report makes clear, that's a question that often goes unasked.
And it's not just the building community that has issues here. Building occupants can thwart even the best-designed and implemented green schemes. As Sisson puts it: "Just because you give the most energy-efficient building to a user, doesn't ensure that it will be used in the most energy-efficient way."
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August 28, 2007 in Business Practices, Money Matters, Trendwatching | Permalink | Save This Page | Comments (2)
Climate Change's Winners and Losers
I've long maintained that one of the biggest mistakes that the environmental community -- and many of us -- made around climate change is relegating it to being an "environmental issue." It is, of course, but it's also a public health issue, a human rights issue -- and a huge economic issue.
Now that the public conversation about climate change has morphed from the "whether" to the "when" and "how," the topic has come out of the closet somewhat. Pundits and other professionals are finally beginning to discuss our climate future from an economic and business perspective: who stands to gain and lose as the climate shifts?
That's a question addressed by two noteworthy articles published this month: a discussion on "competitive advantage on a warming planet" in the March issue of Harvard Business Review, and a cover story in the April Atlantic on "who loses -- and who wins -- in a warming world."
The HBR article, by World Resources Institute president Jonathan Lash and WRI senior financial analyst Fred Wellington, is presented as "a guide for identifying the ways in which climate change can affect your business and for creating a strategy that will help you manage the risks and pursue the opportunities."
It doesn't exactly deliver all that, but it's well worth reading anyway. After all, this IS Harvard Business Review, the big Kahuna of corporate strategy journals.
Lash and Wellington write that companies' management of climate change is different from other environmental issues from a risk perspective -- it's not simply about regulatory compliance, potential liability from industrial accidents, and pollutant release mitigation. Climate risk is different because the impact is global, the problem is long-term, and the harm is essentially irreversible. Moreover, they say, it's not simply a risk for energy-intensive industries like utilities and chemical manufacturing.
In fact, the most important distinctions to be made when considering environmental risk assessment aren't between sectors but within sectors, where a company's climate-related risk mitigation and product strategies can create competitive advantage.
Lash and Wellington go on to describe the six types of risk: regulatory risk (the impact of emissions caps or carbon taxes); supply chain risk (disruptions or price hikes in materials or energy, in many cases because of the huge distances such supplies are shipped); product and technology risk (companies' varying ability to identify ways to exploit new market opportunities for climate-friendly products and services); litigation risk (the threat of lawsuits for significant carbon generators, similar to the suits faced in the tobacco, pharmaceutical, and asbestos industries); reputation risk (companies found guilty in the court of public opinion for selling or using products, processes, or practices that have a negative impact on the climate); and physical risk (the direct impacts of droughts, floods, storms, rising sea levels, etc.).
The authors proffer "four key steps" to "improving your company's climate competitiveness," none of which will be big news to companies already engaged in this space (but may be news to many of HBR's readers): quantify your carbon footprint; assess your carbon-related risks and opportunities; adapt your business in response to the risks and opportunities; and "do it better than your competitors."
There's some good stuff here, including a several prototypical questions companies might ask themselves (e.g., "How will changes in customer demand patterns affect pricing?" "What threats do we face from low-carbon substitute products?") and an interesting analysis of auto companies' vulnerability to risks and their ability to seize opportunities. It begs the question: Where would your company sit on a similar diagram of your sector?
Meanwhile, over at The Atlantic, journalist Gregg Easterbrook has done a yeoman's job of wrestling with the complex topic of divining climate change's winners and losers. (The article is online, but accessible to subscribers only.) As Easterbrook puts it:
If the global climate continues changing, many people and nations will find themselves in possession of land and resources of rising value, while others will suffer dire losses-and these winners and losers could start appearing faster than you might imagine. Add artificially triggered climate change to the volatility already initiated by globalization, and the next few decades may see previously unthinkable levels of economic upheaval, in which fortunes are won and lost based as much on the physical climate as on the business climate.
The Big Question about climate change, in Easterbrook's world, is: "What in it for me?"
His answer covers a great deal of ground -- and water. (My favorite section: "A 401(k) for a Warming World," with suggestions of what types of stocks to favor or avoid.)
Take land. As has been widely written, a warming world could shift the greenbelt northward, rendering parts of the U.S. Midwest (and other regions at similar latitude) arid and currently frozen land arable. "Climate change could place Russia in possession of the largest new region of pristine, exploitable land since the sailing ships of Europe first spied the shores of what would be called North America," writes Easterbrook. "The snows of Siberia cover soils that have never been depleted by controlled agriculture. What's more, beneath Siberia's snow may lie geologic formations that hold vast deposits of fossil fuels, as well as mineral resources."
Similarly, in the water world, Europe could get inundated by rising seas, but formerly frozen parcels near the poles could suddenly become hot spots, at least in real estate terms. Counsels Easterbrook: "While staying ready to sell your holdings in Europe, look for purchase opportunities near the waters of the Arctic Circle," whose disappearing icebergs could open lanes for shipping and other commerce.
Perhaps. Easterbrook knows as well as anyone that this is all so much conjecture, a bit of a parlor game for now. And whoever the real "winners" and "losers" turn out to be isn't really the point. What's significant -- at least for the time being -- is to ponder such questions. Doing so is the best chance we have of moving the climate conversation into the many arenas in which it needs to take place: beyond the birds and the trees and into the realm of people, their communities, and the economic systems on which we all rely.
And that's what's in it for us.
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March 18, 2007 in Climate Change, Money Matters | Permalink | Save This Page | Comments (5)
At New Resource Bank, Money Talks ... Green
A lot of environmental types get squeamish when the talk turns to money and finance. They believe that most notions of capitalism fly in the face of sustainability, and vice versa. Money is so unseemly, it seems.
Of course, it doesn't have to be that way. Over the past few years, we've seen most of the world's largest banks adopt the Equator Principles, reining in some of their more egregiously unsustainable practices, such as lending money for huge, Stalinesque dams and power plants all but destined to bankrupt developing nations. It hasn't ended such travesties, but it has slowed them down.
Perhaps more important, we've also seen the growth of new models of financial services aimed steering capital toward beneficial uses. A few big banks have discovered this emerging market, such as the Bank of Tokyo-Mitsubishi, which established a business unit last year to provide financing for customers in environmental businesses. But big banks, as a rule, have shunned eco-entrepreneurs. Or, at least, they've done little to cater to their special needs.
Which is why I'm excited about New Resource Bank, a recently launched commercial bank based in San Francisco. NRB is one of a small number of community banks focusing on the needs of sustainably-minded businesses.
The bank's origins go back about two and a half years, when Peter Liu, the bank's founder and vice chairman, found himself among a group of individuals being asked by California Treasurer Phil Angelides to help implement the state's Green Wave initiative, which called on the state's two large public pension funds -- the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS) -- to invest $1.5 billion in clean technologies and environmentally responsible companies.
Liu, whose career path includes executive positions at Chase Manhattan Bank and Credit Suisse First Boston as well as a clean-tech advisor to CalPERS, saw an opportunity. While venture capitalist and pension funds were investing untold millions in clean and green technologies, there was little action from banks, the most conservative end of the capital chain. "Oftentimes there are boxes that banks put things in, and they haven't created a box for 'organic' or 'renewable,' where they can understand the credit needs of these businesses," Liu recently told me.
For example, he explained, a developer of small local renewable energy projects might have trouble getting funding from conventional banks, or even local community banks. "They may understand real estate, but they don't understand that there are other things that can have cash flow, like energy projects," says Liu. "These can have a similar credit profile as real estate, so if a banker took the time to understand the security and soundness of the project, it's more likely to get financed than comparing it to land or a house or apartment." The same is true for producers of organic meat and produce, which cost more to produce but which garner higher prices in the marketplace. Bankers may miss the big picture -- seeing only the higher-cost side of the equation and basing their calculations accordingly.
Liu pulled together a management team of banking and sustainability professionals, as well as an all-star roster of founding organizers and investors, to create a bank that would cater to such businesses. He rounded it out with more than 200 smaller investors -- including such green luminaries as Interface chairman Ray Anderson, sustainability wine maven Paul Dolan, and former Organic Trade Association president Bill Wolf. (I am a minor investor as well as a member of the bank's advisory board.)
Among the bank's models is Triodos Bank, a European financial institution with branches in Germany, The Netherlands, Spain, and the U.K. According to Triodos' mission statement:
Triodos Bank finances companies, institutions, and projects that add cultural value and benefit people and the environment, with the support of depositors and investors who want to encourage the development of socially responsible and innovative business.
"We spent a lot of time talking to the founders of Triodos," says Liu. "They had a compelling concept -- that values could be a differentiating brand in terms of selling banking services. The importance of the Triodos business model is that they can attract deposits broadly by focusing lending on certain things about which people share their values." Liu believes that New Resource Bank will similarly succeed by attracting depositors who want to see their money used for more sustainable purposes.
Time will tell, of course, but Liu and his colleagues are banking on the rising interest among consumers and businesses in products and services with green values. Banking in particular has been in need of some fresh ideas given the growing industry consolidation, with a handful of big banks dominating the scene and standardizing their services -- often leaving behind those needing tailor-made services.
New Resource Bank's official opening is November 14 (when the full complement of online banking services will debut), but last week at the Solar Power 2006 conference in San Jose, Calif., Liu announced the bank's first green financial product: a partnership with solar panel maker SunPower Corp. that will allow customers to more easily finance residential solar energy installations. (Robert Lorenzini, a co-founder of SunPower, is an investor in the bank.) Liu believes the customized home-equity lending, combined with tax credits, can make solar affordable to many California residents for whom it is currently out of reach.
It's a promising start for a young bank, and a ray of hope that at least some in the financial community are ready, willing, and able to help grow the next generation of sustainable businesses.
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October 24, 2006 in Business Practices, Money Matters | Permalink | Save This Page | Comments (1)
What’s a Clean Earth Worth?
What's a clean earth worth to your company's bottom line?
That seemingly academic question was addressed in large part last year by the United Nation's Millennium Ecosystem Assessment, a four-year international scientific assessment of the condition of earth's ecosystems. It concluded that that 15 out of 24 of the ecosystem services it studied are being degraded or used unsustainably, while only three of the ecosystem services have been enhanced in the past 50 years.
The significance of this to the private sector is nontrivial. Natural systems provide a wealth of tangible and intangible services to business -- some $33 trillion worth of "free" deliverables a year, say experts. Those services include fertile soil, fresh water, breathable air, pollination, species habitat, soil formation, pest control, a livable climate, and a host of other things most of us take for granted. And none of which appear on companies' balance sheets.
The ecosystem trends of particular concern to businesses reads like a litany of well-covered topics: climate change, water scarcity, biodiversity loss, invasive species, overexploitation of oceans, nutrient overloading into water systems, and so on. Each has specific implications for business operations, from reduced access to raw materials to increased regulation to heightened awareness by customers and communities.
Now comes a new report, from a group whose corporate members are as varied as Chevron, Chiquita, and Cisco, saying that businesses need to pay closer attention to the natural systems on which they rely. According to Environmental Markets: Opportunities and Risks for Business (PDF), published this week by Business for Social Responsibility, the role of such services in business "can no longer be taken for granted."
Moreover, says BSR, "It is likely that in the foreseeable future, attention to these services will become similar to the attention companies give to other corporate assets, such as infrastructure. In this case, the 'infrastructure' is the environmental services upon which the company relies." It continues:
As hard, tangible value is assigned to environmental services, companies will be well served by exploring potential investments, as well as their exposures associated with them. Some companies are beginning to see increased value for their real estate, a new ability to ensure consistent and high-quality supplies of raw materials, more cost-effective environmental management, cheaper cost of compliance and regulatory "goodwill."
Failure to do so could pose potential risks and uncertainties to companies. In a report last year (PDF) that discusses the implications of the Millennial Assessment findings for the business community, the authors summarized the risks of ignoring the downward trend of nature's services to two key issues:
- If current trends continue, ecosystem services that are freely available today could cease to be available or could become more costly. Once internalized by primary industries, additional costs that result will be passed downstream to secondary and tertiary industries and will transform the operating environment of all businesses.
- Loss of ecosystem services also could affect the conditions within which businesses operate, influencing customer preferences, stockholder expectations, regulatory regimes, governmental policies, employee well-being, and the availability of finance and insurance.
BSR decided to take on this issue after engaging in a dialogue with “several dozen thinkers” from inside and outside companies in recent months to learn what issues will be most important to them over the next two to five years, Aron Cramer, BSR’s president, told me recently. “This one rose to the top because it addressed marketplace solutions of current importance that are only going to grow in importance in the coming years.” Moreover, he said, a recent invitation to BSR member companies to engage in an initiative to turn these ideas into practical policies and programs yielded positive responses from about 20 large companies. “It suggests some positive developments are going to come out of all this,” he said.
Clearly, BSR isn't the first group to address these risks (see also the World Bank's guide to biodiversity for the private sector, released last year), but it is by far the largest business association to address this topic. The BSR report describes market mechanisms being used to protect ecosystem services (emissions trading, conservation banking, philanthropic programs); lists some of the risks companies face when they engage in environmental markets (high transaction costs, increased regulatory scrutiny, lack of guarantees) as well as the opportunities associated with engagement (regulatory certainty, avoid project delays, enhancing economic development in emerging markets); and suggests questions companies should ask to get started.
Among the questions it asks:
Most of these services are currently provided free of charge and would be prohibitively expensive or impossible to replicate with technology. If they are worth so much in their natural state, how should companies invest in environmental services to assure their continuity for sustained business operations now and into the future?
It's a question that is no longer academic.
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August 13, 2006 in Money Matters, State of the Art | Permalink | Save This Page | Comments (1)
The NASDAQ Clean Edge U.S. Index
My colleagues at Clean Edge and I are proud to announce the NASDAQ Clean Edge U.S. Index, an index that tracks U.S.-based clean-energy stocks.
According to the official press release:
The NASDAQ Clean Edge U.S. Index includes companies engaged in the manufacturing, development, distribution, and installation of emerging clean-energy technologies such as solar photovoltaics, biofuels, and advanced batteries. The five major sub-sectors that the index will cover are Renewable Electricity Generation, Renewable Fuels, Energy Storage & Conversion, Energy Intelligence, and Advanced Energy-Related Materials.
The introduction of such an index -- as well as the participation of such a powerhouse as NASDAQ -- is yet another milestone for the fast-growing clean-technology marketplace. As my colleagues Ron Pernick, Clint Wilder, and I reported in our Clean Energy Trends 2006 report, global markets for biofuels (manufacturing and wholesale pricing of ethanol and biodiesel) will grow from $15.7 billion in 2005 to $52.5 billion by 2015. Wind power (new installation capital costs) will expand from $11.8 billion in 2005 to $48.5 billion in 2015. Solar photovoltaics (including modules, system components, and installation) will grow from an $11.2 billion industry in 2005 to $51.1 billion by 2015. And the fuel cell and distributed hydrogen market will grow from $1.2 billion (primarily for research contracts and demonstration and test units) last year to $15.1 billion by 2015.
The new index (symbol: CLEN) tracks 47 companies listed on listed on NASDAQ, the New York Stock Exchange, and the American Stock Exchange.
Ours isn't the first clean-energy index. There's the WilderHill ECO index, the WilderHill New Energy Global Innovation Index, the Vortex-Cleantech Index, and others.
So, why another? A number of differences exist between our index and others based on our selection criteria and weighting methodology. (If you compare the various indexes you will see some of the differences.) Our goal is to track the industry and develop an index that we believe best reflects the opportunity for U.S.-listed clean-energy companies. And we believe that the combination of NASDAQ and Clean Edge make for a very promising partnership moving forward.
May 9, 2006 in Clean Tech, Money Matters | Permalink | Save This Page | Comments (4) | TrackBack
The Restless Growth of 'Patient Capital'
The dissonance of two societal trends -- the resurgence of venture investing and the rise in environmentally and socially responsible enterprises -- has given birth to the notion of "patient capital."
Much like its gastronomical brethren movement, slow food, patient capital is a backlash against institutionalization -- in this case, of money as a means of earning, well, a fast buck. Rather, say its adherents, money should be a means of creating wealth -- the kind that enriches society, the environment, and our collective soul just as much as investors' financial standing.
This conversation is nothing new. For years, entrepreneurs and business folks interested in socially and environmentally responsible business have questioned the wisdom and appropriateness of our modern engines of capital formation and wealth creation. The past few decades have seen the emergence of new methodologies and metrics for integrating social and financial returns: screened portfolios, shareholder advocacy, double bottom line, triple bottom line (and even a quadruple bottom line), stakeholder capitalism, natural capitalism, restorative economics, social return on investment, blended value, sustainable development, and on and on. All of these question the notion, as Milton Friedman wrote in his famously titled 1970 New York Times article, "The Social Responsibility of Business Is to Increase Its Profits," that the sole purpose of business is to make money.
(My favorite rebuttal to Friedman, by the way, came in 1979 from Kenneth Mason, then president of Quaker Oats, who said: "Making a profit is no more the purpose of a corporation than getting enough to eat is the purpose of life. Getting enough to eat is a requirement of life; life's purpose, one would hope, is somewhat broader and more challenging. Likewise with business and profit.")
Over the years, Friedman's assertion has been burnished by the corps of capitalists seeking ever-higher, ever-faster financial yields for their investments. The boom cycles of venture capitalism -- in which twentysomethings armed with a screwdriver and a vague idea could raise a few million dollars based on a sketchy business plan and few proven management skills -- have only underscored that fast bucks were there for the taking. The short-term mindset of Wall Street, in which "long-term thinking" involves anything beyond six months (or, for some, six weeks), is what happens when "get rich quick" is taken to an institutional level.
Enter "patient capital." The term describes an amorphous but emerging set of business models. It is rooted in the notion that pursuing maximum growth and maximum shareholder value often dilute a company's social and environmental mission, and that achieving financial, social, and environmental benefits can take time. At its forefront are companies like Patagonia and Newman's Own -- for-profit businesses with strong social and philanthropic missions not likely to meet The Street's purely financial expectations. Right behind them are countless companies whose founders and investors support the values of sustainable business, clean technology, and "local living economies." Some of these are "traditional" businesses in that their structures and financial models are much like conventional businesses. Others harness innovative new models, such as "B corps" -- private companies that donate all of their profits to charity -- the Newman's Own model, since replicated by others.
Does "Patient capital" represent the future of business -- a world in which "sustainable businesses" yield "sustainable returns" -- or yet another "alternative" model destined to be fringe? It's too early to tell, but I'll look forward to the discussion at the upcoming Investors Circle annual conference. Though the notion of "for-benefit" social enterprises may be a tough concept for hardbitten Wall Street types to swallow, the time is ripe for a new style of business, one that expands the reach of both venture investing and philanthropy, bringing value to all parties without the social and ecological carnage that emanates all too frequently from our capitalistic world.
April 30, 2006 in Money Matters, Trendwatching | Permalink | Save This Page | Comments (3) | TrackBack
The New Value Prop
Forget the "triple bottom line." Get ready for the "blended value proposition."
Before you glaze over about yet another sustainability-minded catchphrase, consider that this brave new term is being bandied about in the nation's top business schools -- or, at least, those with sustainability programs. It's been a featured topic in mainstream business and investing publications, and has been uttered by the venerable John Elkington, who coined "triple bottom line" in the first place.
The BVP concept is embedded in the growing world of social enterprise and social entrepreneurs -- the moniker given to nonprofit businesses that David Bornstein, author of How to Change the World, describes as entrepreneurs with the "determination, savvy, and ethical fiber to advance an idea for social change in society on a large scale." The notion of social enterprise, which has gained traction in the U.K., also is being seen by China's government as a means of meeting the needs of its communities and providing training, employment, education, and other benefits to its citizens.
But how to measure those benefits?
The BVP offers a means of quantifying the social value companies and nonprofits create along side the traditional financial stuff. Jed Emerson, the father of BVP, explains that in the past we have limited our perception of business profitability because we focus solely on economic gain and have financial systems to track that. He says, "We've lost sight of the reason we create companies and make investments: to make our lives better -- the manifestation of the human drive toward value."
As Emerson puts is:
Value is what gets created when investors invest and organizations act to pursue their mission. Traditionally, we have thought of value as being either economic (and created by for-profit companies) or social (and created by nonprofit or non-governmental organizations). What the Blended Value Proposition states is that all organizations, whether for-profit or not, create value that consists of economic, social, and environmental value components -- and that investors (whether market-rate, charitable, or some mix of the two) simultaneously generate all three forms of value through providing capital to organizations.
How, exactly, does this relate to daily business? For starters, it flies in the face of the triple bottom line. Rather than measure a company's value (or lack thereof) in separate economic, environmental, and social "bottom lines," Emerson proposes a single, "blended" calculation.
Emerson -- who started his career as a social worker before working for a foundation set up by George Roberts, a partner in the leveraged buyout firm KKR, who was interested in using a market approach to helping the homeless -- began collecting data and crunching numbers to understand why some nonprofits were far more effective than others. Doing this required developing methodologies for SROI, or social return on investment.
That methodology became the basis for helping large foundations invest their endowments in companies that weren't perceived to be undermining the social problems the foundations were trying to solve. It was only a matter of time before the BVP migrated to assessing overall corporate value.
The idea of creating a single metric to judge companies' value to society is not farfetched. Indeed, it is gaining credence not only in the socially responsible investing community but also among some enlightened corporate leaders, who understand how the BVP can articulate a company's broader shareholder value. That, in turn, could reduce the pressure for blockbuster quarterly returns, and all the social and environmental problems that result when companies think only in the short term.
Of course, having a nifty methodology is one thing; getting it accepted and put to use by the incumbent players is quite another. The business world's generally accepted accounting principles -- not to mention government regulations for corporate financial reporting -- can take decades to change, assuming there is even widespread support for doing so. Emerson would be the first to admit this isn't likely to happen soon.
But there's something compelling about BVP that could help it gain currency. Unlike socially responsible investing, with is laden with "good" and "bad" companies, BVP does not strive to be so virtuous. It acknowledges, for example, that there's value in creating economic wealth, so long as it is balanced with creating other forms of value. That idea alone could blunt the skeptics.
BVP has a long and arduous path ahead, but don't count it out quite yet. Those frustrated with the slow growth of "triple bottom line" thinking in the corporate world would be wise to tune in to the BVP conversation taking shape. It's bound to be instructive -- no matter where it all ends up.
March 18, 2006 in Money Matters, Trendwatching | Permalink | Save This Page | Comments (2) | TrackBack
Insurers Place a Premium on Climate
The National Association of Insurance Commissioners (NAIC) voted unanimously last week at its quarterly meeting in Orlando, Fla. to establish a task force to examine the impact of climate change on the U.S. insurance industry and on insurance consumers. The task force will look at how a warming climate may affect the availability and affordability of insurance for consumers and the financial health of insurance companies. It also will consider actions necessary "to enable state regulators and insurers to mitigate and otherwise respond to these problems."
As I noted in a post late last year, the insurance industry is taking increasingly aggressive action on climate change. Shaken by the losses they're seeing from hurricanes, droughts, diseases, and some of the other early signs of global climate chaos, large insurers are starting to press their corporate clients on the topic.
The NAIC action comes on the heels of devastating back-to-back hurricane seasons that caused a record $30 billion in U.S. insured losses in 2004 and as much as $60 billion in insured losses from Hurricane Katrina alone in 2005. According to a December 2005 study by the Ceres investor coalition, U.S. insurers have seen a 15-fold increase in insured losses from catastrophic weather events in the past three decades -- increases that have far out-stripped growth in premiums, population and inflation over the same time period. The study, Availability and Affordability of Insurance Under Climate Change: A Growing Challenge for the U.S., warns of larger financial losses in the years ahead if climate change trends continue and no actions are taken to face the challenge.
The American insurance industry is far from alone in its concern. For example, the Association of British Insurers last year issued a report, Financial Risks of Climate Change (PDF), which used insurance catastrophe models to examine the financial implications of climate change through its effects on extreme storms (hurricanes, typhoons, and windstorms). It concluded that
Climate change could increase the annual costs of flooding in the UK almost 15-fold by the 2080s under high emissions scenarios. If climate change increased European flood losses by a similar magnitude, annual costs could increase by a further $120 - 150 billion (€100 - 120 billion).
Moreover,
Under high emissions scenarios (where carbon dioxide levels double) insurers' capital requirements could increase by over 90% for US hurricanes, and by around 80% for Japanese typhoons. In total, an additional $76 billion could be needed to cover the gap between extreme and average losses resulting from tropical cyclones in the US and Japan. Higher capital costs combined with greater annual losses from windstorms alone could result in premium increases of around 60% in these markets.
Though some may find it hard to be sympathetic toward the insurance industry, you've got to admit that it's not a pretty picture.
Not that the industry isn't fending for itself. Last week, reports MSNBC, Berkshire Hathaway, the investment group run by Warren Buffett, raised the price of hurricane insurance as a precaution against the possible impact of climate change. Berkshire's insurance subsidiaries lost $3.4 billion from the 2005 U.S. hurricane season -- a significant drag on otherwise healthy annual results. Berkshire is one of the world's largest providers of cover against very large catastrophes, partly by reinsuring companies offering home and property insurance.
As goes Berkshire, so goes the industry -- along with the insurance premiums of companies across the land, and the prices they, in turn, pass along to you and me.
March 14, 2006 in Climate Change, Money Matters | Permalink | Save This Page | Comments (4) | TrackBack
The True Cost of Our Daily Bread
Here's a competition you can really sink your teeth into.
Sustainable Ventures is offering a $10,000 prize for a study on "Our Daily Bread, What Does It REALLY Cost?" The competition aims to encourage the development of integrated social, environmental, and financial metrics.
Sustainable Ventures is a nonprofit dedicated to inspiring and educating "beneficial owners" -- those lucky souls with pension and trust funds invested in their names -- to take an active role in the management of their investments. It develops curricula to inspire these individuals to influence their fund managers to achieve integrated performance -- social, environmental and financial -- rather than financial performance alone.
The winning study of the "Daily Bread" competition must provide an analytical framework of "integrated performance metrics" -- the social, environmental, and financial costs associated with a loaf of bread. (Why bread? "Because many people eat some form of grain-based staple on a daily basis," says the group.)
The first phase of the effort invites individuals and teams of researchers to identify the integrated metrics for bread. The second phase will be to disseminate these metrics to the marketplace "so people can make more informed choices about the products they buy and the services they use."
"These metrics will underlie the evaluation of integrated business performance and create the tools to encourage people to make choices that protect and restore our world," say the organizers.
There are two dates that qualified individual candidates or teams of researchers can submit papers for prize consideration:
Throughout the award process, a Candidate Online Forum is available to encourage participants to work in teams, add materials for discussion and initiate and participate in new discussion topics.
Sounds like a worthy exercise, any way you slice it.