This picture of Brazil cutting rain forest for fuel is too powerful to not share. It’s from this week’s cover story in TIME, The Clean Energy Scam. Check out the story. It reinforces the extra due diligence that needs to be paid to anything relating to green business, the environment and politics. Perceived short-term progress can turn backwards quickly (although the article makes it seem like questions about ethanol are just starting which leaves out the major year of debate in 2007). With any “green” progress will be tradeoffs and articles like this bring them to light. When progress starts looking like the opposite, it gets scary.
I had the opportunity last week to attend the Clean Tech Investor Summit in Palm Springs presented by Clean Edge. Ron Pernick and team put together a diverse agenda for attendees. Sessions covered everything from green building and carbon markets to “clean coal” and Wall Street’s take on clean tech.
The range of topics covered and companies represented illustrates the growing influence clean tech is having on businesses across industries. Thursday’s corporate keynotes brought together representatives from Wal-Mart, BP and Cisco. Each provided a different slant on going green either through internal initiatives or product development. Hearing perspective from an operations/business person, scientist and engineer showed how sustainable thinking is being incorporated into every level of an organization.
Matt Kistler, Wal-Mart’s senior vice president of sustainability, claims that it will spend more for products that are environmentally-friendly and last longer, but not necessarily at a higher cost. Wal-Mart’s goal is to one day use only renewable energy and create zero waste. Mark has been in a sustainability role for 90 days – likely not an uncommon level of experience in most companies that are starting green initiatives. The BP chief scientist comes from an academic background and Cisco’s green engineer recently joined the company from American Power Conversion Corporation. Diverse backgrounds and diverse approaches to green.
The keynote on “clean coal” from Greg Boyce, Chairman and CEO of Peabody Energy, also drew a lot of attention. The conference organizers were quite open-minded to invite a coal company to speak at a clean tech event and Boyce was equally brave to accept the invite. Whether or not you agree with the idea of “clean coal,” isn’t listening to companies with different propositions and participating in a “friendly” debate what clean tech is all about? Whether or not investors and consumers buy into the idea is another story.
Over the next 25 years, Greg says there will be a 75% increase in coal use. And a quarter of the world’s coal reserves. As the price of oil continues to rise, companies are bound to give clean coal a second look. Tech Review discusses a new porous material that can soak up 80 times their volume of carbon dioxide. The material could be used in coal gasification plants. The idea of clean coal has created a great deal of discussion in the industry. Questions that came up in the Q&A following Greg’s keynote included: should there be a national charge on coal to help companies move to clean coal? Why should there be a public subsidy? Why shouldn’t the coal industry pay? My thought: the sun as a resource is endless; let’s make sure the long-term solutions are a (BIG) part of this mix!
In the Bay Area alone, there are at least three or four more clean tech conferences taking place this month. Industry discussion and excitement around clean tech keeps moving.
— Barbara DeConto, Text 100 Clean Tech Practice
Anyone who grew up near my childhood home of tropical Rochester, NY can likely relate to the stories my parents would tell about walking to school with 20 foot snow drifts reaching the telephone wires. Well, according to this image I just saw on BusinessWeek’s green blog, they might have been telling the truth. The surface temperature change in the Great Lakes region is profound. The poles are another story. Not news to most of us, 2007 was the second hottest year on record. Maybe the tropics and Rochester really will meet.
Industry heavyweights, political leaders and celebrities gathered in Davos Switzerland this week for the World Economic Forum and one of the primary issues up for discussion was sustainability. Check out this video from Forbes TV which highlights Al Gore, Bono and Bill Gates.
Corporations in attendance included Campbell’s, who Forbes TValso interviewed. Following Davos, will companies in attendance take a stronger stance on sustainability or were they just in for the great company at the event? I’d love to hear your comments.
— Barbara DeConto, Text 100’s Clean Tech Practice
This weekend’s news: “The U.S. House of Representatives on Saturday passed a Democratic rewrite of U.S. energy policy that strips $16 billion in tax incentives away from Big Oil and puts it toward like wind and solar power.”
In a time when it’s standard to see overall clean tech and renewable energy funding or incentives barely put a dent into what’s going into fossil fuels, it’s a big moment when $16 billion is in the same sentence as renewable energy. David Roberts at Grist talked yesterday morning about the need for a national renewable energy standard, highlighting a new 150-page report, “Renewing America: The Case for Federal Leadership on a National RES.” I’m curious what David and the report’s authors think about yesterday evening’s news.
Many states have enforced similar measures but we’ve yet to see big action at a federal level. Reuters sums up how the skeptics feel… House Republican leadersaid the bill “cuts the lifeblood of our economy off at the knees by increasing taxes to pay for green pork projects.” Green pork?
Clean tech, clean energy and whatever else you call them are new industries that need new infrastructure and new innovation. Aside from the often talked about reduced reliance on fossil fuels and global warming benefits of cleaner energy, what gets me excited about this “green pork” are the jobs already being created around the country. The same people talking about green pork are raising red flags about losing U.S. jobs and our ability to compete in a global market. The same way Silicon Valley become a global hub for technology innovation (and helped boost Calif. to become the world’s sixth largest economy), clean energy can do it again for the U.S. It’s a nice goal, right?
Century-old incentives and subsidies are what got fossil fuels to where they are today. Let’s not forget that when we try to compare the real cost of our energy. Those coal plants have had some help along the way (understatement).
How a bill like this could impact the clean tech industry is a good topic for a policy communications expert like Sean Garrett at 463 Communications. Maybe he’ll have something to add…
John Dessauer, editor of John Dessauer’s Investor’s World, is in the camp of those who are worried that alternative energy has become too popular among investors: “Alternative sources of energy, including ethanol, have already been fully exploited by Wall Street. Not much opportunity is left for us in that category.”
Knowing how soundbites work, I’m not going to take that quote at face value and will assume that there is context missing. Because if there is not opportunity left for us in that category (i.e. clean tech), there are going to be a lot of sad VCs, corporations and consumers in a few years. Fully exploited by Wall Street? There are hundreds of startups – many of which are still in stealth mode – who haven’t even come close to liquidation events. Leading VCs like Draper Fisher, Kliener Perkins, VantagePoint Venture Partners, Mohr Davidow Ventures are betting the farm on this industry.
I’d be willing to venture that the fun is just starting in alternative energy investing. Take solar for instance. There has been some industry consolidation, new players from the tech industry like Applied Materials are entering the game, and companies in China are becoming billion dollar players over night. If we haven’t come close to deciding who the industry leaders are going to be, how could there not be much opportunity left? That’s like saying the tech industry was dead in 1979 when Apple and Microsoft were a few years old.
Dessauer goes on to point out:
“Wall Street is ignoring what I see as an obvious and highly profitable profit opportunity” to exploit the move towards greater energy efficiency: Technology stocks.
Most of my time is spent working with some of the biggest technology companies so I definitely agree that there is tremendous opportunity for these companies to make a real and substantial impact, something that should be reflected in how investors view them. The article names a few: Cisco, Intel and Philips Electronics. The list goes on from here. IBM, Sun, the PC makers… they all are doing things to address the way energy is consumed, managed and distributed by businesses and consumers.
Getting back to “alternative energy investing is fully exploited.” If we take the short-term view that Wall Street has trained some of us to adopt, maybe Dessauer is right. Ethanol gets over hyped, investors flock to it, some stocks don’t perform, and then we call it exploited and move on to the next thing. Same could go for solar. Silicon supply finally catches up with demand. Some solar companies face a margin squeeze, and people only looking three to six months out ditch the market entirely and move on to something else. It could happen. But then you could look at the solar market differently, as Todd Woody’s “Big Solar’s Day in the Sun” did in the June issue of Business 2.0 that just hit the stands. He shows the deals happening today for “industrial-strength solar energy sold to public utilities in 20-year contracts measured in gigawatts.” This industry is starting to align for the long-term.
So investors could move on. Or, they can stick around and find the renewable energy winners in a market that is certaintly not going anywhere. Maybe we need to look again at how we define alternative energy. If a big technology company can come up with a much more efficient way to get solar or wind power to the power grid and into your home, could they be in the same circle as the company making the solar panels? If we take that view, renewable energy becomes a much bigger space and the investing opportunities are endless. I’d like to think that’s where we’re heading.
In celebration of Earth Day, here are two fun videos.
Todd Woody talked about KQED’s Where We’ve Been, Where We’re Headed on Green Wombat earlier this week. Check it out for a look at what could have been in the Bay Area without some forward looking people.
Joel Makower produced Climate: A Crisis Averted, a ‘mock-unmentary’ from the future.
It wasn’t Marc Gunther’s columns at CNNMoney.com, articles in FORTUNE magazine or his four books that caught my attention. It was the regular attention he gives on his blog to many of the topics I’m paying attention to: CSR, sustainable business, energy and the environment. Gunther covers the impact of business on society from all angles. It’s not a new topic to him. He’s covered the underlying issues for years and has talked with many of the businesses and people that have impacted where we are today. I’m happy to share some of his thoughts with the readers of Clean PR.
Swain: A lot of large and small companies are starting from scratch with sustainability initiatives and are afraid to open the door to criticism by talking publicly; do you have any advice for when and how a company should approach this dilemma?
Gunther: The first thing you want to do is some homework, and then you want to start down the path to sustainability. No one’s there yet. No one’s perfect. Having said that, I’m a big believer in transparency, as well as in talking with people outside a company, including critics. You’ll get credit for openness. You’ll put a human face on your company. Your critics will appreciate being invited in. And you might get some good advice for free. Smart companies—Dell and Goldman Sachs come to mind—have told me recently that they have learned a lot by being open and talking about their business with NGOs.”
Some companies have successfully made sustainability part of their corporate brand identity; aside from having the products and business practices to substantiate the social responsibility message in their brand, are there any key things you’ve noticed some companies doing that separate them from the rest?
I don’t think there are a lot of companies, at least not big ones, that have made sustainability part of their brand identity. Starbucks, maybe, and Whole Foods are both admirable. Some small and mid-sized companies have also built brands around being green—Stonyfield Yogurt, Seventh Generation, Tom’s of Maine (which is now part of Colgate). I’m sure I’ve forgotten some. There are no secret strategies. You measure your impact on the environment, try to reduce your footprint, buy green power, promote recycling, sell organic products, and then tell the world what you are doing.
What role do you see technology playing in addressing the climate crisis; are you seeing some companies apply green technologies as a core component to their CSR practices? Any thoughts on which technologies or renewable sources of energy hold the most promise for corporate America?
I’m not an expert on either technology or renewables, but I’m told that many renewable energy sources have great potential. Everyone loves wind power, and it’s more economical than it used to be. The solar energy business (meaning PV installations to generate local electricity) is growing rapidly, thanks to some creative new business models. S.C. Johnson has done well by burning methane gas from a local landfill to generate electricity. PG&E Corp. is experimenting with everyone from wave power to cow power (burning manure) to plug-in electric hybrids. There are also big gains to be made in energy efficiency. Green building is taking off like crazy. It’s a very exciting time for renewable energy and once we get a tax or cap on greenhouse gases, things will only get better.
Some people have started to use the term greenwashing to describe a company who is exaggerating or misleading the public with their green credentials; how do you know the difference when you talk to a company? Also, when a company comes out making a big claim, do you check in with them at a later date to see that they are following through?
I probably don’t check back as much as I should. But when I find a company stretching the truth, I do try to report on it. Last fall, I wrote about Kimberly Clark which failed to keep its promises about sourcing pulp. Greenpeace tipped me off. I think some of the big investment banks can fairly be accused of talking bigger than they act. I don’t really care whether Citigroup buys recycled paper; I want to know whether they are underwriting coal plants.
Any thoughts about how the result of the 2008 elections could impact the progress of corporate sustainability?
I don’t think they will matter a lot. The big issue is regulation of greenhouse gases. It’s less and less a partisan issue—one leader has been Gov. Schwarzenegger. McCain and Lieberman sponsored a bill to regulate GHG.
Curiously, I think the absence of vigorous government regulation of business for most of the last 27 years has spurred CSR. Companies have stepped in to fill the gap.
There’s a combination of business, academia, government, non-profits and venture capital pushing this space ahead; is one group leading the way or is it a team effort?
NGOs are leading the way in the sense they are pushing change. They are also trusted by the public, for the most part. Business is close behind. I won’t be popular for saying this but I find that much of academia and government is irrelevant on these issues. There are exceptions, of course—people like Stu Hart at Cornell, CK Prahalad at Michigan, others at Berkeley, UNC and Yale have done great work and are influencing business. They’ve also taught me a lot, for which I’m grateful.
Have you heard from business leaders who read Faith and Fortune and became a more socially responsible business as a result?
Not so much business leaders as students or young people just getting into the business world. Some have written to me to say that they took away from the book the idea that they can make a positive difference in the world by working in corporate America. I’m a fan of groups like Net Impact and Business for Social Responsibility because they communicate that message.
Suggestions on how PR people can best work with you?
Well, I’ve been swamped with story pitches lately. If you don’t know me, a concise email to firstname.lastname@example.org is the best way to get my attention. I try to respond to all emails to me (as opposed to mass emails.) I’m sorry to say that I can’t return all phone calls; if I did, I’d never get any work done.
My first, best piece of advice is to visit my website and blog at www.marcgunther.com to see what stories I write for the magazine and for CNNMoney.com. I’m far more interested in big brand-name companies than in startups, for example. Like most reporters, I want to do stories that are surprising, ideally with a little conflict or drama. Stories that get people talking, or blogging. Because I only do about six to eight stories a year for the magazine, I want to make each one special.
Thomas Friedman wrote a 4,000 word piece in yesterday’s New York Times Magazine on The Power of Green. I haven’t had a chance to start reading it but wanted to post the link so others who have some time can check it out. A lot of people are talking about it, and from what I hear its conclusion would have been a nice ending to my blog post from earlier today, showing that Americans will come through and take the actions required to carry the “green” movement long into the future, making it bigger than any of us have imagined. One quote from the first page:
Well, I want to rename “green.” I want to rename it geostrategic, geoeconomic, capitalistic and patriotic. I want to do that because I think that living, working, designing, manufacturing and projecting America in a green way can be the basis of a new unifying political movement for the 21st century…a new green ideology, properly defined, has the power to mobilize liberals and conservatives, evangelicals and atheists, big business and environmentalists around an agenda that can both pull us together and propel us forward.
You can also check out Thomas on video.
Last Monday I returned from vacation and as usual it was a hectic week catching up at work. My publications and RSS feeds piled up. The size of the pile itself is newsworthy. Yes, Earth Day is around the corner (April 22). And the Supreme Court did rule that the Clean Air Act gives the federal government the power to regulate carbon dioxide emissions from vehicles. Still, it’s hard to keep up when every publication, from tech’s CIO Magazine and mainstream outlets like Fortune, Time, Newsweek and Vanity Fair to the monthly newsletter for my wife’s baby group, was focused on giving people the information they need to make smarter decisions to live more sustainably.
I have a file from when I actively started tracking news coverage in clean tech and sustainable business in December 2005. At the time there were a few stories covering the greening of the data center, Vinod Khosla’s push for ethanol, and some buzz about solar power (of course there were niche green publications covering a lot more). Not much really changed until late summer 2006 when coverage started to go more mainstream. The past eight months have been a blur. What will be interesting is to see how this hype cycle plays out. How long will this coverage sustain itself? Has there been enough of a shift in popular thinking for the public to have enough knowledge and motivation to carry out everything being talked about when/if the media moves on to the next hot topic? The coverage keeps taking on a new life; what’s next?
Some would argue that this press attention isn’t going anywhere. Things have changed enough that we’re never going back. New environmental TV shows are popping up and outlets like NBC are setting trends giving their chief financial correspondent Anne Thompson the environmental beat, and some of the world’s largest corporations like GE, SC Johnson and Dow Chemical are spending significant ad dollars to drive their eco message.
We’re absolutely right thinking that press attention isn’t going anywhere if we think the way many of us are accustomed to — in the short-term. It will, without question, be with us until the conclusion of the 2008 elections (unfortunate comparison given that this issue is much bigger than politics). But global warming and sustainable thinking, as the scientists and people a lot more knowledgeable than me will tell you, aren’t short-term issues. They stretch into future generations and require that the public be the drivers to take them forward with or without the help of the media’s attention.
This issue cuts to the core of the American identity. Our society was built on consumption. I look around my house and it is filled with gadgets (iPods, entertainment system, computers, cameras) and my sports room is piled high with gear (2 pairs of skis, 2 surfboards, 3 backpacks, 2 tents, 2 sleeping bags, soccer balls, 3 bikes, snowshoes, avalanche gear…the list goes on).
This isn’t scientific. We drive too much, we fly too much, we eat too much, we wash our clothes and dishes too often, we have too many clothes, our homes are unnecessarily large, we buy junk that needs to be replaced too often, and we buy junk that shouldn’t ever be replaced because it’s junk. Straight and simple. That’s the American Dream. It’s what people have been fighting for. The rewards are plenty. I sure do like my toys and hobbies. The downside is junk and excess, not too mention what is done to the other animals who we share planet earth with that rely on the same resources as us.
And here I am. Consumer of junk. The reason this is a long-term problem. The solution? We either innovate like we’ve never innovated or we digress in ways that go against what’s in our blood, what makes us all American. I’ll get off my soapbox and let us innovate. I’m optimistic.