Author Archives: GreenBiz.com

Does sustainability lead to better companies?

We debate an age-old chicken-and-egg question when we get together with other sustainability leaders: Are sustainable businesses more successful? Or are successful businesses more sustainable?And, honestly, does it really matter which came first?Sustainability and good business go hand in hand, whether sustainability drives business results or is the result of good business practices. No matter how you cut it, sustainable practices and transparent supply chains help everyone — from businesses to suppliers to consumers and everyone in between.The Sustainability Consortium (TSC) has released its 2018 Impact Report, "Transparent Supply Chains for Better Business." In this latest analysis — based on numbers from the Sustainability Index used by Walmart, Sam’s Club and a handful of other retailers — we see rapid year-over-year improvements in the transparency of consumer product supply chains. And with that increased transparency comes the incentive and the willingness to tackle any issues uncovered. We see rapid year-over-year improvements in the transparency of consumer product supply chains. So, what is the real driver of transparency in supply chains? As chief executive of TSC, I would like to think that creating more sustainable products alone is a big enough driver. The truth is that transparency for the sake of transparency is not enough for most companies. Ultimately, it must hit the bottom line.I often talk about the leaders and laggards of sustainability. If supply chain transparency weren’t a good business decision, it would remain niche and wouldn’t go mainstream. And yet at TSC, we know sustainability is good for all businesses. Consumers and investors are increasing their demand for transparency in the supply chains of the companies they buy from and invest in. Organizations that create that transparency have more consumer and investor trust, which leads to loyalty and business value creation.Recently, Starbucks announced a ban on plastic straws. Consumers can wrap their heads around the plastic straw issue much more than, say, wastewater from textile plants. Saying "no" to a straw being offered can be satisfying and easy for consumers to feel like they are taking a stand and making a more sustainable choice. You might try to argue that one sustainability issue is more important that the other. But the fact is consumers care about this issue, Starbucks created a policy, and they are being rewarded. The support for Starbucks’ decision resulted in stock that ticked up 2 percent on average volume.Smoking gunA recent McKinsey & Company analysis done for TSC showed that 50 percent of the stock market value of the largest consumer goods companies is contingent on their ability to continue to grow their businesses year-on-year. And the Paris Climate Agreement and Science Based Targets Initiative means those companies must deliver a dollar of sales in 2050 with only about 10 percent of the greenhouse gases that same dollar of sales generated in 2015.This is the "smoking gun," a direct link between company valuation and climate action.We see a similar overall trend in the 2017 Sustainability Index, where supply-chain transparency is increasing. Comparing data from 2016 to 2017, we see that fewer organizations reporting zeroes in their supplier scores, and average scores are rising. We also see that companies that respond to the Index year-over-year are scoring highest and have improved the most. These companies have set systems in place to improve, and it is clear that the companies that are aiming for better transparency are getting there quickly.Our data shows us that suppliers committed to improving scores are committed to increasing their transparency. Companies such as Starbucks and many TSC members are already reaping the benefits of being a more successful, and more sustainable, business.Let's block ads! (Why?)

Cheers to clean power adopters, activists and evangelists

Bottoms up! Actions by local actors — a.k.a. cities, states and businesses — are pushing the United States closer to realizing the promise of the Paris Agreement on reducing emissions and limiting global temperature increases to 2 degrees Celsius. Even though the federal government has abdicated its leadership role.That's the optimistic conclusion of a report (PDF) released this week by the America's Pledge initiative, aka the climate action group fronted by California Gov. Jerry Brown and former New York mayor Michael Bloomberg. You can consider the analysis a teaser for the invite-only Global Climate Action Summit in September, organized by the pledge team along with a baker's dozen of well-known NGOs. The analysis out this week offers some prescriptive guidance of how to accelerate progress, and it won't surprise you even remotely that at least four are explicitly focused on the clean power transition. Those suggestions involve:Doubling down on renewable energy — So far, 29 states (from both ends of the political spectrum) have set goals for their own electricity mix. Virginia and New Jersey are among the latest to speak up. And from a civic standpoint, it's hard to argue with the $25 million solar plant that will boost Albuquerque, New Mexico, from 3 percent renewable energy now to 25 percent by September. Accelerating retirement of coal power — Since 2010, about 270 coal-fired power plants have been shut down, primarily for economic reasons. But the pace of closures isn't fast enough, especially in regulated markets where ratepayers can help prop up those that aren't financially viable, according to the report. One plan to watch: Xcel Energy's proposal to accelerate the retirement of up to one-third of its coal fleet. Retrofitting building for energy efficiency — Programs continue to crop up all over the place. One example is Retrofit Chicago, which has helped reduce electricity consumption at 88 participating commercial buildings across the city by up to 18 percent.Electrifying building energy use — When many people hear the word "clean power" they automatically think about renewable electricity. But shifting the heating and cooling loads of buildings away from fossil fuels is a growing concern, especially considering the growing body of data about the impact of methane (a huge part of the natural gas production process) on the climate.By the way, even though cities get a lot of attention for their proclamations about renewable energy and zero waste commitments, I'd be remiss if I didn't point out that plenty of innovation is coming from rural America.A report (PDF) published this week by the National Rural Electric Cooperative Association estimates that the 900 electric co-ops that it represents are purchasing nine times as much solar power today as they did just five years ago. The average project is also much larger: 1 megawatt versus 25 kilowatts in 2013. Here are five articles and blog posts that might charge you up:Congress gets educated. On energy storage, that is. This NRDC perspective is a good update on the state of state projects and policies. Now, federal lawmakers are trying to bone up.Facebook brings the sun to Oregon. The giant social media company is teaming up with Pacific Power to develop more than 437 megawatts of solar power, including more than 100 MW near its data center in Prineville.  Strange but true. Scientists are studying the consequences of a "wind drought" in Britain that has slowed turbines to a crawl.Clarity on efficiency. Here's what New York state could do to reduce energy consumption more quickly.Mohawk plants a solar flower. The commercial flooring company is sponsoring the installation of 10 SmartFlower systems around the United States. The first one is taking root in Bronzeville, Illinois — renowned for its concentration of African-American businesses. Finally, a moment to be self-promotional: The nomination window is shrinking for our VERGE Vanguard Awards, honoring innovators and pioneers in clean energy, zero-emissions transportation and the circular economy.Let's block ads! (Why?)

There’s a new market cropping up for venture capitalists: data-loving farmers

Technology investors are discovering a new and largely untapped market: farmers in heartland America eager to fly drones, employ robots and crunch big data to boost their business.In 2017, tech startups in the agriculture sphere raised $670 million to develop software management, big data analytics, automated equipment and other cutting-edge tools that help farmers grow crops with scientific precision, AgFunder reported. Agriculture is one of the last major sectors to experience the digital revolution, and it’s a market ripe for growth.New technology lets farmers manage their fields down to the square foot — tracking plant health, soil moisture and estimated profit in real time. That requires advanced software, sensors and state-of-the-art imaging technology.To meet such needs, investors raised more money for ag tech startups in 2017 than during the previous two years combined.Digitized farming: the next big thingSatellite and machine learning technologies help farmers better manage the productivity and efficiency of their operations while reducing their environmental footprint.Startup FarmShot turns satellite data into high-resolution images that farmers can use to monitor crop health; and pinpoint fertilizer, water and pest management needs. The value proposition is clear, and FarmShot recently was snapped up by Syngenta Ventures, the most active venture capitalist in the farm tech space last year. The value proposition is clear, and FarmShot was recently snapped up by Syngenta Ventures, the most active venture capitalist in the farm tech space last year. John Deere is also making big acquisitions as it expands its precision agriculture offerings. Last year, the tractor giant acquiredstartup Blue River Technology for $305 million.Blue River uses machine learning, computer vision and robotics to optimize farm inputs. With this technology, sprayers and other farm equipment can predict and apply the exact amount of fertilizer and herbicides down to individual plants.If these technologies come to scale, the improvements to agriculture’s climate and water impacts would be tremendous.Farm management software soon a $1.6 billion marketWhile it grabs fewer headlines than satellites and machine learning, farm management software is just as important to farmers, investors and the environment. It facilitates the entire ag tech revolution.A vast majority of American growers plan to invest in such software this year — the first and most critical step toward digitizing their operations. This market alone is expected to soon reach $1.6 billion.Because they make the promises of big data a reality for time-constrained farmers, software startups have high valuations. Granular, for instance, was purchased by Dupont for $300 million.Decision management software such as Granular’s helps growers analyze and act on hundreds of data points about their operations, making farming more economically and environmentally sustainable.Farmer-run data startup breaks new groundAg tech startups may have piqued investor interest in Silicon Valley first, but precision agriculture startups are expanding rapidly around the country. Ag tech startups may have piqued investor interest in Silicon Valley first, but precision agriculture startups are expanding rapidly around the country. In Indiana, father-son duo Steve and Chris Fennig — third and fourth-generation corn and soy growers — built MyFarms. Their ag data solutions startup makes it easier for farmers, ag retailers and consumer-facing companies to integrate, analyze and act on sustainability information.The Fennigs represent a fresh crop of farmers who will adopt and even develop new technology to meet business and environmental needs.Expect to see more of that in coming years. There’s a brand new ag world out there, and we can only imagine what comes next.Let's block ads! (Why?)

Closed Loop launches Circulate Capital to take on ocean plastics in Asia

Closed Loop Partners today is announcing a new venture, Circulate Capital, to invest in companies, innovations and projects that prevent marine plastic waste originating in Asia.Like Closed Loop, which was founded in 2014 to invest in recycling infrastructure in order to put more recycled materials back into manufacturing supply chains, Circulate Capital, which is an independent spinout, will focus on jumpstarting waste management and recycling infrastructures — in this case, in South and Southeast Asia.The new venture will be led by Rob Kaplan, Closed Loop’s co-founder and managing director, who previously served as director of sustainability for Walmart and led corporate responsibility and brand strategy for wine and spirits maker Brown-Forman. Circulate Capital will be based in Asia, though the exact domicile of the fund is still being worked out based on legal and regulatory considerations.Tackling the recycling problem in Asia will be no small feat. Up to 95 percent of plastic in the world's oceans pours in from just 10 rivers, according to research published late last year. Eight of those rivers are in Asia. (The other two, the Niger and the Nile, are in Africa.) The Yangtze River alone, Asia’s longest, topped the list, dumping up to an estimated 1.5 million metric tons of plastic waste a year into the Yellow Sea.Much of the problem stems from the rapid development seen in Asia over the past 30 years, especially China’s burgeoning consumerist lifestyle, which has overwhelmed the nation’s sparse waste management infrastructure.It’s not just China. Roughly 60 percent of all the plastic in global waters originates in five countries — China, the Philippines, Thailand, Indonesia and Vietnam, according to a 2016 study by McKinsey & Co.’s environmental business unit and the nonprofit Ocean Conservancy.Exponential growthThe idea for the fund came from some of the same investors that helped create the original Closed Loop Fund — companies like Coca-Cola, Procter & Gamble, Unilever and Walmart — all of which were confronting significant roadblocks to sourcing recycled material in their far-flung supply chains. Closed Loop has focused on growing recycling in U.S. municipalities. Asia wasn’t part of its mandate.“The reality is that these countries have been exponentially growing in the last 10 to 15 years,” Kaplan explained to me recently. “Their consumption is exponential, and their waste production is exponential. That type of growth happened over 50 to 100 years in the United States and Europe. So, our investments in waste and recycling infrastructure, and the policies and consumer behavior and awareness of those topics, had time to evolve. In Asia's markets, we have within the same generation people consuming different types of products and producing different types of packaging.” The reality is that these countries have been exponentially growing in the last 10 to 15 years. Their consumption is exponential, and their waste production is exponential. The rise of public concern about ocean plastics, and the recognition of the scale of Asian countries’ contribution to the problem, also played a factor, leading Closed Loop to partner with PepsiCo, 3M, P&G, the American Chemistry Council and the World Plastics Council to launch a $150 million initiative last October called Closed Loop Ocean to focus on waste management and recycling solutions in Southeast Asia. The Ocean Conservancy served as the project’s lead nonprofit partner.But Kaplan and his team recognized that addressing Asia's challenges required a more intensive effort.“We realized that in order to properly take this on, it was going to be very difficult to run it as a side project out of a U.S.-based firm,” said Kaplan, who will serve as CEO of Circulate Capital. “We needed to devote the resources, the people, the talent and the attention in a very focused, discrete way, and it was going to be difficult to do that out of Closed Loop Partners, given all the commitments we already had.”The new fund came together quickly, he said. “When we created this project, we expected it to take several years to ramp up. But given the rate of change and the interest in ocean plastic, it's becoming an issue that everyone is very concerned about, so we decided to accelerate that project.”Circulate Capital is part of a growing drumbeat of activity related to ending plastic waste. In recent months, U.S. cities from Manhattan to Malibu, California, have announced straw bans or phaseouts, as have companies like Starbucks, McDonald's and American Airlines. In April, U.K. Prime Minister Theresa May announced a proposal to ban straws and other plastic items.Meanwhile, U.N. Secretary-General Antonio Guterres warned last year that unless steps are taken to curb the pollution, plastics could outweigh fish in the world’s oceans by 2050.A new viewWhile environmental concerns about plastic waste have been around for decades, public concern has been stoked in recent years by social media, such as the graphic video of a sea turtle with a straw stuck in its nose, which has been viewed more than 30 million times. A new generation of millennial consumers and their younger brothers and sisters are growing up with a new, less-favorable view of plastics.“The awareness of the issue has changed, and that's caused consumer engagement and consumer activism, which you don't see often in an environmental topic like climate change,” Kaplan said. “Governments are paying attention, too, so the awareness of the problem has skyrocketed, but awareness of the solutions has lagged. That's why we feel like it's important to accelerate and lean in on this topic as quickly as possible, because we need to start investing in those solutions.”The solution set for recycling in developing countries isn’t necessarily the same as in developed ones, where trash trucks ply city streets for garbage and recycling bins, then unload their haul into centralized municipal recycling facilities.In most Asian countries, there are informal waste collection systems, explained Ben R. Jordan, senior director of environmental policy for Coca-Cola, which is an investor in Circulate Capital, and which earlier this year announced “World Without Waste,” a global goal to help collect and recycle the equivalent of 100 percent of its packaging by 2030.Some of those systems perform quite well, Jordan said, collecting up to 80 percent of beverage containers through informal scavenging systems. But it’s just a start. “There is a real opportunity from our standpoint to both formalize some of those informal systems, but also potentially include other plastics in those systems and reduce the leakage over there,” he told me.According to Circulate Capital, a 45 percent improvement in plastic leakage is possible by improving waste management and recycling in China, Indonesia, Vietnam and Thailand.Of course, this is easier said than done. The complexities of investing in emerging markets is nontrivial, including labor, corruption and human rights issues. Entrepreneurs don’t have access to banks and other cornerstones of starting and scaling a business that their counterparts in developing economies take for granted. The complexities of investing in emerging markets is nontrivial, including labor issues, corruption and human rights concerns. Moreover, there’s a lack of a track record investors can fall back on: People haven't been making money in this space as investors. There are few trusted investment partners in Asia who have deep experience in this space, another quality that makes for a stable investment environment in developed economies.As a result, the risk to investors can be significant, Kaplan said. “In the U.S., investing or providing a loan to a municipality is probably one of the safest things you can do to support collection. In some of these markets, it's one of the more risky things you can do.”Kaplan said he expects the fund to be up and running and making its first few investments by the first quarter of 2019, and that it will make a few more investments by the end of next year. The initial $150 million in capital will come from existing Closed Loop Fund investors.Inevitable market?I asked Kaplan what we might expect from Circulate Capital over the next couple of years. “In two years, what we'd like to be able to show is what types of interventions can work and scale to prevent plastic from being mismanaged, as well as waste in general being mismanaged, and directing it out of the environment and back into consumer goods and retail and plastic supply chains,” he said.“At the same time,” he continued, “we want to be able to demonstrate this is an investable market that investors should be looking at and should be thinking about investing in, either directly with us or on their own.”I asked Coke’s Ben Jordan the same question. He struck a similar theme: “In the next two to three years, I think it’s more about demonstrating what’s possible. We talk a lot about how to identify the investment opportunities that can be easily replicated. That’s a part of the world where a lot of innovation goes on. A real hope is that over the next two or three years, the investments that Circulate Capital makes are in technology and projects that are meaningful on their own as individual projects and initiatives but can be easily and quickly replicated across that part of the world.” We talk a lot about how to identify the investment opportunities that can be easily replicated. Susan Ruffo, who heads international initiatives at the Ocean Conservancy, which provides technical support to Circulate Capital, points out that the new $150 million fund is only a tiny fraction of what’s needed to solve Asia’s waste and recycling challenges.“Our estimates are that it would take about $5 billion a year in just that region to solve the problem. So, we know that Circulate Capital alone can’t solve it with their investments.”Even if Circulate Capital and others can make a meaningful dent in Asia’s plastic waste problem, there are other burgeoning hotspots that will also need to be addressed.“It’s sort of a moment in time,” Ruffo explained. “If you look at development trajectories, it’s not going to be too long before countries in Africa become big sources of waste.”Still, Rob Kaplan remains optimistic about the prospects for change.“I feel like it's solvable,” he told me. “When you talk about many other environmental issues, there's a political divide that you have to overcome. In this case, we're all aligned. Nobody is for ocean plastic waste, right?”Let's block ads! (Why?)

From Cape Town to Charlotte, there's a partner for every purpose

This is third in a series on the role of public-private partnerships in realizing smart, sustainable cities, systems and industries. The first and second articles can be found here and here.Public-private partnerships (PPPs) are evolving in creative and powerful ways. This article continues to describe the high-level shaping of public-private ecosystems in cities — focusing on the diverse types and roles of key partners.As described previously, cities interested in starting a public-private smart cities program typically partner first with their local electric utility company. But a diverse array of business partners also may have a critical role to play.Cities and businesses partner for reasons that are "obvious and not-so-obvious," explained Gordon Feller, co-founder of Meeting of the Minds, a knowledge exchange platform that convenes a leadership summit on PPPs and urban innovation for smarter sustainable cities. An obvious reason is that public resources are limited: "When cities, counties and states want to make smart sustainable cities possible, they are going to have to turn to private resources to do it — technology resources, financial resources and others." More insights, more eyeballs. Less obviously, "technology transformation is happening so fast, and the urban impacts of climate change are being felt [so much], that public sector leaders have to look elsewhere for insights." And "the issues are so big that we need all hands on deck — more insights, more eyeballs."Through strategic platforms such as Envision Charlotte, "needs and the ability to implement are matched between a city and private sector businesses," said its executive director, Amy Aussieker.Public-private-plusAdditionally, Envision Charlotte’s "public-private-plus" model underscores the powerful impact of working with local universities. Such partners can be key, as they "provide analytical and research expertise, are looking for juicy issues to study and are ideally located in the same geography," explained Aussieker.Metro Lab Network, a leader in organizing these relationships, helps connect universities ("the R&D department") with cities ("the test-bed"). Reported Aussieker, "It offers great value within a PPP, eliciting an ‘aha moment’ about the potential of shared resources." For example, Envision Charlotte makes use of data analytics resources within its local university. "[Participants in] Envision America picked up on this" and seeded more of these city-university relationships. Nonprofits can provide a neutral zone — a buffer so that city governments feel more comfortable. In fact, public-private-plus collaboration has helped an entire PPP ecosystem-building strategy to emerge organically in Portland, Oregon. This place-based strategy was spearheaded by the Technology Association of Oregon (TAO) in collaboration with the Portland State University (PSU) Master of Urban and Regional Planning (MURP) program. With a goal to better understand what’s required to attract and retain technology talent, "it became clear that a high-quality civic environment in which to live and work was key," reported Skip Newberry, TAO’s president and CEO. This led to the local technology community itself engaging in creative play with local government. "Innovation labs are now in place — for smart cities, cybersecurity and trust, and digital health and wellness."As the process unfolded, weekend hackathons became month-long sprints, leading to regional challenges such as the Greater Portland Mobility Tech Challenge. This was driven in strategic collaboration with GreaterPortland Inc. (GPI), a public-private economic development collaborative."The purpose of the challenge was to activate Greater Portland’s smart cities ecosystem, bringing together public and private-sector problem solvers to address the region’s most confounding mobility challenges," Lloyd Purdy, Greater Portland’s VP of regional competitiveness, said. "The challenge created a safe place for public and private partners to come together and explore problems, opportunities and collaborations. Five of the mobility challenges pitched by public agencies resulted in active public/private partnerships."TAO is one of 55 regional Technology Councils of North America (TecNa). Other councils may wish to take a page from the TAO/GPI playbook to create regional public-private ecosystems for smart cities.Public-private triangulationUniversities, nonprofit partners and others create a healthy triangulation within a PPP, which allows real discussions to happen. Feller of Meeting of the Minds said, "The third sector is everyone else — nonprofits, universities, the media. This triangulation mitigates the bilateral dynamic" between the long-term-oriented taxpayer-paid public sector and the shorter-term-oriented shareholder-beholden private sector."This third sector also brings a third kind of accountability — that is, to the next generation," continued Feller. "It uses tools not in the public or private toolkits to look at impacts. It brings new metrics to the conversation, which helps to engage and reward more players." At the end of the day, money [for public-private city projects] has to come from somewhere. With nonprofits and foundations on the team "there is also a funding model that comes through," Sokwoo Rhee, leader of the Global City Teams Challenge (GCTC) at the National Institute of Standards and Technology (NIST), said. This adds complexity, but it also enables conversations. "Nonprofits can provide a neutral zone — a buffer so that city governments feel more comfortable."Rhee explained the gap that exists between the perspectives of city governments and technology providers. "Providers want to sell products, which makes sense. Governments want to buy products that are guaranteed to work for them. But with a new technology, they are not sure it’s going to work… Even if a solution [works in one setting], it has to be verified to work someplace else. So, the prime partners and nonprofits have to play the role that is missing."Public-private funding sources"At the end of the day, money [for public-private city projects] has to come from somewhere. This process is not very well established," observed Rhee. It typically involves some mix of funding from taxpayer dollars, consumer revenues, private partners, corporate investors, federal and state governments and foundations.Several important efforts have succeeded in creating tools to help cities and their partners identify financing sources and to document what works and make this process a little less mysterious.The Smart Cities Financing Guide provides valuable information about ways city leaders can get around tight budgets and high project costs to build the smart cities they envision. The guide was developed for the Smart Cities Council and includes several dozen alternatives to traditional financing options.  In addition, the Financing Sustainable Cities initiative provides technical assistance to accelerate and scale-up investments for sustainable urban projects. Its toolkit provides access to a catalog of investments made in cities, including information about a project’s funding source and long-term financing, as well as a description of the assets and contracts put in place.Public-private-startup partnership"A newer model that we hope to see more of is one where startups complete the picture in a public-private ecosystem, bringing new technologies and business models into play, and attracting funding with them," said Kent Lucas of 30x Partners, an advisory firm focused on technology startups for cities and smart transportation."Increasingly, large corporations act as investment partners in technology accelerators and commercialization platforms," Lucas reported.  TechStars Mobility Accelerator, a public-private initiative operating in downtown Detroit invests in startups with offerings that impact how people and goods move across all modes of transportation, including pedestrian."Another possible source of funding that should gain traction is crowd-sourcing platforms; these can provide cities a source of startup technology funding with the co-benefit of involving local citizens and former residents to help advance a city or region."Public-private-citizen partnershipFinally, a city’s most plentiful partner is its citizens. Citizens are variously called "private citizens" or "the public." To that end, they are the quintessential public-private partner.Recently, Cape Town, South Africa, was able to avert "the dreaded day zero, when the taps would run dry and people would have to line up for a daily water ration" and dispel the dark no-rain cloud over its head by assertively engaging its citizenry in water conservation. It managed to reduce usage by 50 percent, and have restored viability as a trusted, well-functioning city. The latest report from Cape Town declared, "The city will not run dry this year or next" — that is, if people keep up the restrictions they've been practicing. Increasingly, large corporations act as investment partners in technology accelerators and commercialization platforms. That anecdote supports a core concept behind the Cool Block — that a city’s best partner may be its citizens. In the Cool Block (an application platform created for the Cool City Challenge, which I manage), a city asks its citizens to take action not only in the area of water stewardship, but also low-carbon living, resiliency-building and livability enhancement within their neighborhoods. The city curates public and private local resources to help those actions. Californians who have participated in the Cool Block pilots in Palo Alto, San Francisco and Los Angeles say they have deeply appreciated the program because it gives them a sense of agency, while creating meaningful social connection with their immediate neighbors — that original collaborative fabric we have allowed to fray. Dreaming bigRhee visualized a future where smart city public-private partnership is writ large: "My dream is that a PPP model could become regional, or even national. There doesn’t have to be 19,000 ecosystems built."To realize that vision, "solution providers have to come closer to a unification. GCTC’s goal is to create that common ground" so that "smart city solution providers can come up with a [metaphorical] T-shirt that can be sold to millions, not hundreds."To that end, GCTC groups similar public-private project clusters into SuperClusters so that commonalities can take shape."SuperClusters create Blueprints consisting of a technology plan updated each year, a description of how and what to do, and a collection of best practices proven to work." Rhee hopes "to make Blueprints available to as many cities as possible."The next article in this series will describe how to get the public-private playspace ready for smart partnerships and point to a few compelling, even urgent, invitations to play.Let's block ads! (Why?)

Why companies are betting big on batteries

This article is drawn from the Energy Weekly newsletter, running Thursdays.As a creature of the outdoors, I take immense pleasure in relocating to my back patio with my laptop (weather permitting) to finish out my summertime workdays so that I can watch the solar lights spring into life across my garden as darkness falls. That's provided the rechargeable batteries are in working order, of course.I found it telling that the centerpiece of Bloomberg NEF's 2018 New Energy Outlook was the huge impact that falling prices for lithium-ion batteries will have in propelling solar- and wind-generating electricity to a much larger percentage of the worldwide mix — an estimated 50 percent by 2050.Here's a data point that will charge you up: prices already have tumbled by 80 percent since 2010, and we're nowhere near the bottom. "We see $548 million being invested in battery capacity by 2050, two-thirds of that at the grid level and one-third installed behind-the-meter by households and business," said Seb Henbest, lead author of the report.Several states are doing all in their power to motivate investments: New York is calling for 1.5 gigawatts of capacity by 2025; California is calling for a slightly lower number but at more accelerated pace. New Jersey and Massachusetts are also looking to do their part.  Batteries appeal to risk managers who love hearing more about solutions to improve corporate resilience.  While anecdotal examples of real-life commercial and industrial installations are still few and far between, just this week, power company Enel's EnerNOC division (which it acquired last year) announced a contract with Canadian food packaging company Amhil for a system with a capacity of 2.34 megawatts. The technology will be used to help the company participate in the regional demand response program. (The company can tap into the battery when it's asked to curtail consumption, without affecting production.) Over the next 11 years, the system could help shave roughly 20 percent of Amhil's electricity bill. There's also the bonus of extra resilience during grid disruptions.I'm betting these sorts of deals will become much more common in the months to come, as businesses get creative with ways of financing and justifying them. The good news is that batteries appeal to risk managers who love hearing more about solutions to improve corporate resilience.Speaking of innovation, now's your chance to speak up. If you're an entrepreneur working on technology relevant to clean power, zero-emissions transportation or the shift to a circular economy, consider applying for the VERGE Accelerate fast-pitch competition before the July 30 deadline. And if you know a more established individual or company who you would consider a clean economy visionary, check out the call for nominations for the inaugural VERGE Vanguard Awards.And finally, five random articles for energy wonks:Some like it cool: The amount of electricity used to crank up the air-conditioning in American buildings during the hot summer months has surpassed all of the power used in the U.S. during 1955. The NRDC ponders the health implications.Not in my backyard:  A solar development plan in the Pacific Northwest encounters neighborly resistance. (New York Times)A milestone in Germany: Where clean power beat out coal during the first half of 2018. (Bloomberg)And you thought China was growing fast: India's investments in renewable electricity rose 22 percent during the first half. Oops, they fell in China. (Quartz)Who needs clean power? A draft of the EPA's plan to kill the Clean Power Plan is circulating around Washington. As you might expect, it's apparently far friendlier to coal-generation facilities. (New York Times)Until next week, lights out.Let's block ads! (Why?)

As subsidies wane, market forces drive the growth of renewables

Solar panels cover the sloping roofs of the police headquarters in Mainz, a picturesque city on the Rhine whose most famous inhabitant was Johannes Gutenberg, inventor of the printing press. The station’s rooftop photovoltaic system was installed more than 10 years ago and is run by UrStrom eG, one of hundreds of citizens’ cooperatives that have driven Germany’s renewable energy revolution. "It was our first project," said UrStrom’s Klaus Grieger, a retired software developer.The introduction of government incentives such as feed-in tariffs in the 1990s allowed citizen cooperatives such as UrStrom to invest in the wind turbines and small-scale solar installations that now dot the wine-growing region around Mainz. Under the tariff policy, renewable energy producers could sell their electricity at above-market prices guaranteed for 20 years — a subsidy scheme that jump-started renewable power in the country and was copied across Europe. The share of renewables in Germany’s electricity consumption rose from less than 5 percent in 1990 to almost 37 percent in 2017, and much of that energy was citizen-owned or operated.Now that system of incentives is changing, and with it Germany’s renewable sector. Under pressure to reduce power bills — German consumers pay a "renewable surcharge" totaling $29 billion per year — and in recognition of falling technology costs, Germany recently switched from fixed tariffs to putting out wind and solar energy projects for competitive bidding. The move has upset citizen cooperatives, which find it hard to compete against big companies on the open market. But it’s been good news for consumers. Auctions late last year yielded solar and wind prices below 6 cents per kilowatt hour, rivaling the cost of fossil fuel-generated power. Prices for new offshore wind have been hailed as "zero-subsidy" renewable power. It is estimated that almost half the renewable energy capacity expected to be added from 2017 to 2022 will be driven by auction. Germany’s changeover is part of a widespread global shift in how solar and wind energy is being generated, one with the potential to accelerate the energy transition by increasing competition, reducing costs and scaling up deployment. But it is also shaking up the renewable energy industry, generally to the advantage of larger players.Countries such as the United Kingdom, Mexico, Germany and Morocco are partially or wholly switching from feed-in tariffs to market-based competitive bidding. Sixty-seven countries had renewable tender policies by early 2017, up from nine in 2009, according to the International Renewable Energy Agency (IRENA). The International Energy Agency estimates almost half of the renewable energy capacity expected to be added from 2017 to 2022 will be driven by auctions. For many, this shift signals a maturing of the sector."As the sector evolves," said Diala Hawila, IRENA’s program officer dealing with auctions, "the question for governments about what support level to provide is answered by: Let the market tell you."What the market has found in the past year is record-low renewable prices, a result of falling technology costs (especially solar), growing market penetration and the emergence of medium-to-large industry players. Solar PV prices dropped to as low as 3 cents per kilowatt hour in auctions in Abu Dhabi, Chile, Mexico and Saudi Arabia, for instance. Fossil fuel power currently ranges from 5 to 17 cents. While "it’s dangerous to think these low prices can be replicated everywhere," said Hawila, they nevertheless show that globally renewable power is approaching grid parity with oil, coal and nuclear power.That’s critical to reducing the world’s carbon emissions: Cheap, unsubsidized renewable power gives countries a solid economic reason to switch from fossil fuel energy. Auctions play a role in this revolution by "enabling industry to build on technology that has become cost-efficient, establish larger scale, and further lower prices," said Rana Adib, executive secretary of REN21, a renewable energy policy network based at the U.N. Environment Program.Yet the market-based system has its drawbacks, resulting in a bumpy transition in many countries. Aggressive competition can result in unrealistically low bids that don’t materialize into actual projects — something that only will be known a few years from now. And the drive to lower prices is winnowing out the small players that were instrumental in nurturing the early phase of renewables. Community energy groups find it hard to compete in the new renewable market, which is not a problem for countries such as China or India that have hardly any such cooperatives, but is a major issue in Germany. Renewable energy developers are also consolidating as global players rise and smaller local ones go bust in countries such as Japan. "Competition is good for deployment, but it can end up squeezing the sector," said Hawila.The squeeze is evident in India, where a shift to auctions has roiled the wind industry in the past year, resulting in one of the lowest levels of new capacity in recent times. The slowdown is attributed to confusion over interstate transmission charges and the fact that low prices from the first auction — almost half the previous tariffs — led to several states trying to backtrack on existing projects commissioned under the older, more expensive feed-in tariffs. The lull has had ripple effects down the supply chain, with many domestic manufacturers going out of business. Meanwhile, developers have begun merging as competition intensifies.  For large solar projects in Germany, local cooperatives may have to merge to compete in auctions. Still, industry leaders expect prices will stabilize this year and capacity will expand again, exceeding conventional energy additions in the next few years. "They’ve squeezed [the prices] as much as they could for now," said Arunabha Ghosh of the Council on Energy, Environment, and Water. Regulatory certainty — such as guaranteed power purchase agreements — is important to attract the institutional investments India’s renewable sector needs, he said. He believes smaller players eventually will play a role in more decentralized renewable energy generation. Unlike European countries, he notes, India doesn’t face political opposition from incumbent industries "because energy systems are still growing and there’s room for everyone to have a share of the market," said Ghosh.The incumbent industry is certainly on the minds of members of the energy cooperatives in and around Mainz, the capital of the German state of Rhineland-Palatinate. Many here believe the new rules, including caps on renewable capacity addition, were brought in at the behest of the coal and nuclear industries, which still employ thousands of people in parts of the country. This western state, on the other hand, is dotted with wind turbines and solar PV arrays, many installed and run by villages, municipalities, and cooperatives. Renewable energy created jobs here at a time of rural exodus and also boosted civic budgets. Cooperatives prospered. The UrStrom eG energy cooperative, for example, set up its first installation in 2005 with tariffs at 54 cents a kilowatt hour, guaranteed until 2025; by 2017, UrStrom had 11 photovoltaic installations and a waiting list of investors.Now the 200-member cooperative is re-evaluating its situation. For large solar projects, cooperatives may have to merge to compete in auctions, said UrStrom’s Grieger. A more likely solution: smaller projects that use the electricity on site or locally. The group also had been planning to enter the wind energy market but gave up the idea: It couldn’t afford to invest the resources needed to make a bid, given that they faced the likelihood of losing to larger companies. "Wind power will no longer be local," Grieger said.Experts agree that Germany’s new market approach is tending to concentrate renewable energy generation. Wind projects are being sited in the windier northern part of the country, and a cross-border solar auction saw all bids go to Denmark, where regulations governing land-based solar plants are less stringent, noted Alexander Knebel of the German Renewable Energies Agency, an industry group. Like many others, he believes local participation is critical at a time of rising opposition to wind turbines in some parts of the country. "[T]he active involvement and the ownership of renewable energy plants in the hands of the people is crucial for the continued high approval of the energy transition," said Knebel.Not everyone concurs with this emphasis on the local. Fabian Joas of the energy think-tank Agora Energiewende believes it’s natural that "only the pros" would be left in a mature market. Still, "completely subsidy-free investment is very risky," he said. "As a country, do you want only hard-core financial investors owning your energy assets? In Germany, the answer is no. ... Revenue-stabilizing mechanisms will continue to be needed to keep capital costs down and medium players in the game."Countries can and should use a mix of polices or tinker with auction design to achieve objectives beyond cost, such as location or local content, said IRENA’s Hawila. That’s already happening. Some countries are exempting some smaller projects from competitive bidding. Others such as South Africa mandate a percentage of domestic ownership and local employment in wind and solar projects. Mexico tweaked its auction system to create space for community projects. Such policy experimentation is as critical to driving renewables now as technological innovation once was, experts say.Yet despite the challenges, "we are seeing a major shift" in renewable power generation, said REN21’s Adib. Last year saw renewables dominate new additions to the electric grid. Much of that investment was in China, but the share of renewables has grown even in small countries such as Cape Verde, Rwanda and the Marshall Islands. "We need to build on these dynamics and take advantage of the lower costs and market approach to scale up the transition," said Adib.Let's block ads! (Why?)

Unilever's Thomas Lingard: What we can learn from James Bond

Thomas Lingard, global climate advocacy and sustainability strategy director at Unilever, shared his passion for James Bond films and the parallels with business action on climate change, as part of the Talanoa Dialogue at the U.N. Climate Conference in Bonn this May.While many aspects of the "business and climate change" story are about business cases, or technical issues, I was determined to tell it as an action-adventure story.I thought for a while. I thought about the archetypal action-adventure stories and James Bond films came quickly to mind. And the more I thought about it, the more I realized that they were actually a great way to think about what is happening now in business.Consider the evidence:1. The threatIn the James Bond stories, there’s always a clear threat. It’s usually some crazy terrorist organization that’s about to unleash havoc on the world, usually within 90 minutes of the film starting. And in our business and climate change story, there’s also a clear threat — and that threat is climate change. It’s the catastrophic impact that it will have on our customers, on our factories, on our agricultural value chains and our supply base if we don’t rapidly scale up action, peaking global emissions by 2020 and achieving a net zero economy by 2050.2. The charactersIn the James Bond films, the main character is the eponymous lone secret agent. But this is where our business and climate change story is even more exciting. Rather than one lone agent, thousands of businesses are taking action on climate change. If you look at the We Mean Business platform, you’ll see that over 1,200 significant commitments have been made by businesses. These businesses have a combined market capital of $16.7 trillion — equivalent to 20 percent of the global economy.Over 410 companies have committed to science-based targets to reduce their emissions footprint in line with the Paris Agreement already — nearly 1,000 more are going to do so before 2020. But it’s more than just talk. Forward-looking businesses are already shifting their energy supplies. Unilever, for example, has 109 sites in 36 countries where the factories are supplied by 100 percent renewable grid electricity. We have factories on every continent doing that, and our ambition is to be carbon positive in our operations by 2030, supporting the generation of more renewable energy than we use, and making the surplus available to the communities in which we operate.3. The role of governmentThe last comparison is really where the magic happens, and why I believe this is such a relevant story for the Talanoa Dialogue. Both our James Bond story and our "business and climate change" story have this similarity, which is that neither character can succeed without the critical role of the government.In the James Bond films, Bond is always called in for a meeting with the government, somewhere in London at the start of the film. When he arrives he gets three things:First, he gets direction — he’s told what the threat is, where to go to fix it and the deadline for fixing it.Second, he’s given some tools — perhaps a watch that becomes a laser, a car that becomes a submarine, or a pen that fires a poison dart — which will enable him to be more effective in his mission.Third, and perhaps most significant, the government gives him his trademark "License to Kill." And this is fundamental because it changes the operating framework in which he is able to act. His "license to kill" means he is permitted to cause disruption to the status quo in order to achieve the necessary outcome — the higher goal of saving humanity from doom and destruction.In the "business and climate change" story it’s exactly the same. First, we need this unequivocally clear direction from government. We need this in the form of long-term, loud and legal policies that set the direction of travel so we are clear where we are going: a peaking of global emissions in 2020, and steady decline to a net-zero emission economy by 2050.Second, we need the right policy tools. Things such as carbon pricing; tighter emissions standards for power stations, vehicles and appliances; laws to protect forests and guaranteeing rights of indigenous people; and regulations that support financial disclosure of climate related financial risks in line with Task Force on Climate-related Financial Disclosures (TFCD). These policy tools — and others like them — can allow business already standing ready to act, to scale up and do more.Right now we have some of this direction, some of these tools, in some parts of the world. But we need consistent global direction, all of these tools, in all parts of the world. The Paris Agreement was a brilliant start in bringing the world together around a common agenda.  Business responded accordingly, with pledges of action and a heightened sense of optimism and ambition.But we are nearly three years since the Paris Agreement. We are in the implementation phase and yet still find ourselves needing more clarity, more certainty and a greater sense of urgency, in the form of clearer signals from governments. For it is the suite of policy measures that together have the transformative potential to change the operating environment for business; to move from the status quo to a new scenario in which ever more momentum and action to drive down emissions cities, agriculture and energy would emerge, and investment in low or zero carbon technologies would rocket.The good news is that governments have the opportunity to unleash this transformation. They have the opportunity to do this by sending a really clear signal that enhanced ambition of NDCs (Nationally Determined Contributions) will come by 2020.Specifically, they have the opportunity to send that signal at COP24 in Katowice. And if they do, they might just give business a "license to kill climate change."Let's block ads! (Why?)

The power of engagement and intrapreneurism in sustainability leadership

The following is excerpted from "All In: The Future of Business Leadership," by David Grayson, Chris Coulter and Mark Lee (Routledge, 2018)Daniel Pink wrote in his remarkable book "Drive" about what motivates people, saying it boils down to three things. "It’s about autonomy, the desire to steer your own ship; it’s about mastery, the ability to be able to steer that ship well; and it’s about purpose, knowing that your journey has some wider, broader meaning." Engagement also requires that people feel they are treated fairly; that they are listened to; and that they are cared for.Google is a company that has been built on a culture of radical, constant innovation. In 2017, it topped the  Fortune " Best Places to Work" list for the sixth year in a row. A range of programs and benefits help foster what employees say is a "safe and inclusive" workplace at this hive of high performers. Employees can make use of any of a number of channels of expression to communicate their ideas and thoughts. These include Google Plus conversations, a wide variety of surveys, Fixits (24-hour sprints wholly dedicated to fixing a specific problem), TGIFs (Google’s weekly all-hands meetings, where employees ask questions directly to the company’s top leaders and other executives about any number of company issues), and even direct emails to any of the Google leaders.Employees are empowered (both equipped and encouraged) to take initiative and bring forward new ideas. Google provides its employees with 20 percent of their work time to be spent on their own projects.One of us (David) has previously written about the potential of social intrapreneurs, who are:People within a large corporation who take direct initiative for innovations that address social or environmental challenges while also creating commercial value for the company. . .. They leverage existing infrastructures and organizational capabilities to deliver social value on a large scale. . .. Social intrapreneurs aim to generate entirely new forms of commercial value through significant innovations in products, services, processes or business models for their employers.Social intrapreneurism is likely to be a powerful extra force driving progress toward the U.N. Sustainable Development Goals. Some companies are now putting selected employees through Intrapreneur Labs and other training programs, running "Dragon’s Den" style competitions where intrapreneurs can pitch their ideas, and have established Intrapreneurs’ Innovation Funds.Google was one of the first companies to send young leaders with intrapreneurial potential to the Aspen Institute for Business & Society’s First Movers program. Several well-known Google products originated with intrapreneurs including Google News, Gmail, AdSense, driverless cars, Google Glass and the pioneering use of Google mapping tools to help landmine clearance and to prevent illegal logging.Transparency and opennessWhen we ask what is driving businesses around the world to take more responsibility for their environmental, social and economic impacts, one thing that is invariably mentioned is social media and intensifying global connectivity. Don Tapscott discusses this in his book "The Naked Corporation." He argues that if businesses are going to be naked, then they had better be buff! In this context, "buff" means being responsible, coherent and consistent in the way they do business.Another element of a sustainability culture, therefore, is fast becoming a willingness to embrace transparency. Over the lifetime of the Leaders Survey, we have seen an explosion not just in the percentage of large companies producing annual sustainability reports, but also in their quality and rigor. The consulting firm KPMG has tracked the trends in corporate responsibility reporting since 1993. In their latest analysis, they conclude: "Corporate Responsibility reporting is standard practice for large and mid-cap companies around the world. Around three-quarters of the companies studied in this survey issue CR reports." The explosion of standards, certification schemes and industry codes of practice are contributing to the inexorable growth of this culture of transparency. Companies such as Nike and M&S now publish details of all their suppliers’ factories. SC Johnson’s "What’s Inside" initiative publishes comprehensive details of all its product ingredients. Companies such as Legal & General, the insurance giant, publish exhaustive details of and rationale for their corporate tax strategy.For all their imperfections and susceptibility to "free-rider" criticisms, the explosion of standards, certification schemes and industry codes of practice are also contributing to the inexorable growth of this culture of transparency. We also see transparency becoming more common in the actions of corporate sustainability leaders. For example, Google’s executive chairman shares with all Google staff practically the same material that the Board of Directors saw at their most recent meeting, including launch plans and product roadmaps. Rick Ridgeway shared his view that Patagonia has only been able to achieve all that it has because it has always remained a family-owned business and had the freedom to pursue long-term strategies including transparency, which he suggests encourages innovation.In our internal operations, top management will work as a group, and with maximum transparency. This includes an "open book" policy that enables employees easy access to decisions within normal boundaries of personal privacy and "trade secrecy." At all levels of corporate activity, we encourage open communications, a collaborative atmosphere, and maximum simplicity while we simultaneously seek dynamism and innovation.Transparency alone, of course, is of limited value without a parallel commitment to engage with critics; what John Browne, the former CEO of BP, describes in his 2015 book "Connect" as "radically engaging." Other sustainability leaders also share openly. Tesla made its battery technologies available to competitors: According to Elon Musk in June 2014, "Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology." Another example is GSK sharing its compounds library with other bona fide researchers.We recognize in some cultures such transparency represents more of a stretch. It is going to be fascinating to see how corporate cultures of transparency and accountability develop in societies with less of a tradition of either transparency or accountability.Let's block ads! (Why?)

Episode 131: Talking circular strategy with HP Inc. and Hewlett Packard Enterprise

Week in ReviewTune in around 10:24 for a roundup of news.Why public opinion on climate change matters to businessZen and the Triple Bottom Line3 challenges in reporting climate resilience and how to overcome themFeatured StoriesTalking circular economy with both HP Inc. and Hewlett Packard Enterprise (24:30)The former operating units of the legendary Silicon Valley technology wizard Hewlett Packard — now completely separate companies — are devoting considerable resources to creating more circular methods of design, production and supply chain management. HP Inc. attributes $700 million in new revenue in 2017 to this mindset. This segment features highlights of interviews with Nate Hurst, chief sustainability and social impact officer for HP Inc., and Christopher Wellise, CSO of Hewlett Packard Enterprise.Lessons in how sustainability creates business value (37:35)The new book, "All In: The Future of Business Leadership," considers two decades of innovation in corporate sustainability from dozens of businesses such as Natura, Marks & Spencer, Nike, Patagonia and Walmart. One of the three co-authors, SustainAbility Executive Director Mark Lee, weighs in. Watch for the excerpt July 14 as part of our ongoing GreenBiz Reads column. What's new at GreenBiz?News, events, webcasts — the list goes on. Keep your finger on the pulse of the latest in sustainability by keeping up with GreenBiz.• Calling all clean economy visionaries. Nominations are open for the inaugural VERGE Vanguard Awards, highlighting the dreamers, pioneers, entrepreneurs, designers, engineers, business leaders, policymakers and investors on the cutting edge of an equitable, inclusive transition to a clean power grid, a zero-emissions transportation system and the circular economy. Suggest someone worthy of recognition by our Aug. 3 deadline.• How fast is your pitch? Entrepreneurs are encouraged to apply for VERGE Accelerate, a series of fast-pitch competitions that take place on the main stage of VERGE 18. This year, we're featuring three different sessions highlighting innovators in clean energy, transportation and the circular economy. • We've launched a new daily newsletter lineup! Monday's GreenBuzz and Wednesday's VERGE Weekly are essentially unchanged. But the lineup now includes: Transport Weekly (Tuesday), Energy Weekly (Thursday) and Circular Weekly (Friday). You must subscribe to each newsletter in order to receive it.  Please visit this page to choose the newsletters you want to receive.• Check out Center Stage, which features the best of live interviews on sustainable business and clean technology, conducted on stage at GreenBiz and VERGE conferences.• The GreenBiz Intelligence Panel is the survey body we poll regularly throughout the year on key trends and developments in sustainability. To become part of the panel, click here. Enrolling is free and should take two minutes.Stay connectedTo make sure you don't miss the newest episodes of GreenBiz 350, subscribe on iTunes.Have a question or suggestion for a future segment? E-mail us at [email protected].Let's block ads! (Why?)