July 2009

Why posterity matters

July 30, 2009

First David Brooks, then Tyler Cowen and now Francesca Rheannon got me thinking this week about posterity and legacy and why they matter so much. Francesca, who is our guest blogger today, is a contributing writer at CSR Wire (where this originally ran) and a host and co-director of SeaChange Radio, an excellent over-the-air and Internet-distributed series of conversations about sustainability. I’m a regular listener on iTunes, and part of SeaChange’s advisory board.

Americans are inconsistent when it comes to long-term thinking.  As individuals, we are able to plan for the future–we save for our kids’ college education, or our own retirement. But in business, people often focus on the next deal, the next headline or the next quarter at the expense of the future. I’ve found that when I’m facing an important decision, or even a trivial one (“Should go out for a muffin or a run?), thinking long-term points me towards an answer. “Thinking past ourselves” is the way Francesca puts it.

When my granddaughter starts kindergarten this September, she’ll be going to PS 11, a public school set in the heart of a predominantly African-American community in Brooklyn, NY.

Francesca Rheannon

Francesca Rheannon

The school has pledged itself to a sustainable future for children. The day I visited, enormous, colorful cutouts of animals and sea creatures festooned the halls. It turns out the displays were part of the school partnership with Amnesty International, which guides every grade in adopting a cause. The early grades chose the environment: preserving the rain forest, keeping the planet’s waters clean, and saving animals from extinction. The connection between human rights and the right to a healthy environment for all living beings was implicit. The kids also get the connection between a healthy environment and personal health: they grow vegetables together in the community garden next door to the school. All these activities show the core of the school’s philosophy: “the importance of children thinking past themselves,” in the words of the school’s principal. It seems to me to be the core concept of sustainability, as well. [click to continue…]

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Our houses leak, our light bulds produce more heat than illumination, our big screen TV sets draw power when they are turned off, and that’s just the start of it.

U.S. businesses and individuals could save money, curb emissions of global warming pollutants, reduce our dependence on foreign oil and cut energy consumption by 23% by 2020, merely by taking sensible, practical steps to use energy more efficiently, says a report from McKinsey & Co. released today.

Energy efficiency creates jobs

Energy efficiency creates jobs

What’s more, energy efficiency is the very best way to create so-called green jobs – yes, even better than subsidizing solar or wind power – because it makes the economy more productive in the long run.

So what’s standing in the way?

Unfortunately, there are lots of barriers to more efficiency—some structural, some behavioral and some stemming from a lack of access to capital–and so there is no simple or single program that will get us where we need to go, according to Ken Ostrowski, a senior partner at McKinsey who led the effort behind the report, called Unlocking Energy Efficiency in the U.S. Economy. Indeed, that’s part of the problem. For a variety of reasons, market forces on their own don’t work very well when it comes to energy efficiency.
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The LEED-platinum Chartwell School

The LEED-platinum Chartwell School | Photo credit: Michael David Rose

There’s no such thing as a free lunch, or free electricity. But green buildings, when designed right, can operate without monthly utility bills.

They’re known as zero net energy buildings, and they are generating lots of talk these days. General Electric says it will deliver zero net energy homes by 2015. The California Public Utilities Commission has set a goal of having all new homes use zero net energy by 2020. The U.S. energy department wants to develop “marketable Zero-Net Energy Commercial Buildings, buildings that use cutting-edge efficiency technologies and on-site renewable energy generation to offset their energy use from the electricity grid by 2025,” according to this announcement. Blair Kamin, the Pulitzer Prize-winning architecture critic of the Chicago Tribune, recently profiled Chicago’s first zero-net energy home.

Are zero-net energy buildings a stretch goal—a distant dream—or a present-day reality?

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New smart appliances from GE will do great things. They will save energy, reduce greenhouse gases, curb  demand for power on the utility grid, generate “green jobs” in America and—oh, I almost forgot—clean your clothes, wash your dishes and keep your ice cream from melting.

GE's smart best-in-class hybrid water heater

GE's smart best-in-class hybrid water heater

They will also be financed, in part, with your tax dollars, if, as seems likely, the company has its way. Incentives for manufacturers like GE that make super-efficient appliances are already part of the Waxman-Markey climate-change bill awaiting action in the U.S. Senate. As GE explained it, the government would provide “awards” to best-in-class appliances of $75 per dishwasher, $200 per refrigerator and $300 per water heater, paid directly to the manufacturers. As I read Section 214 of the bill (and I could be wrong, since it’s not easy reading), the government would also pay retailers who sell best-in-class appliances.

Did you know that the government was going to subsidize appliance manufacturers? Me neither.

Last week, GE executives came to Washington to talk with government officials and reporters about their smart appliances. When combined with a smart electricity meter, a smart grid and distributed renewable energy, GE’s water heaters, washers, dryers, dishwashers, refrigerators and stoves would help enable the company to provide zero net energy homes by 2015. That’s very cool. (Here are details from GE.)

While appliances are not the most exciting or profitable of GE’s businesses—the company tried, without success, to sell off its appliance business a couple of years ago—GE does have a history of innovation in the business. GE gave us the first self-cleaning oven, the first fully automatic clothes washer and the first refrigerator that dispensed ice and water through the door (which saves energy along with wear and tear on the biceps muscle).

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So much is going on in the world of business and sustainability that no one can keep up with it all. I’ve decided, as a result, to occasionally feature guest posts  from smart people who follow topics I don’t. Today’s post comes from Mindy Lubber of Ceres, a coalition of institutional investors and environmental groups that works to integrate sustainability into capital markets. Mindy has spoken at FORTUNE’s Brainstorm Green conference, and she’s one of those people who moves easily between the world of advocacy and the realities of corporate America. Her topic today is the folly of financing new coal plants in the developing world.

ceres_logo_color_bigIn Washington, it’s a popular climate conundrum everyone talks about: Even if the U.S. lowers its greenhouse gas emissions, China and India are on track to dwarf the entire Western World’s as they build enormous coal-fired power plants. Politicians regularly say we must get China and India to use less coal, the dirtiest of fossil fuels, to power their emerging economies.

But who do you think is financing all these new coal plants in the developing world?

Try the World Bank, the Asian Development Bank and other international public financial institutions supported by the world’s wealthiest nations.
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You want a car that gets good gas mileage and you want energy-efficient appliances (or at least I hope you do). But do you want a low-carbon investment portfolio?

The Green Century Balanced Fund is betting that you do. The Boston-based mutual fund says it is the first U.S.-based fund to disclose its carbon footprint, which is 66% less than the carbon intensity of the S&P500 Index.

GCFLogo

Let’s be clear what we’re talking about here. This isn’t an accounting of how much energy the mutual fund company uses in its offices or how often its staffers get on planes. It’s an analysis of the tons of carbon emissions per million dollars of revenue that are generated by the companies held by the Balanced Fund, compared to the firms in the S&P500.

Why would you care? Not merely because you want to invest in mutual funds and companies that are greener and cleaner than average (although, again, I hope you do) but because those funds and companies will over time outperform their peers—an arguable but much iffier proposition.

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General Electric and Wal-Mart are the two most important companies in America, for different reasons: GE’s reputation for management excellence means that its ideas spread widely, while Wal-Mart’s size and clout put it at the center of the consumer economy. Last week Wal-Mart announced its plans for a sustainability index, generating lots of excitement, and today GE releases a citizenship report that demonstrates that the $183-billion company is becoming not just cleaner and greener, but more open.

“We just crushed our energy consumption goals,” Bob Corcoran, GE’s vice president for corporate citizenship, told me when we talked recently about the report. “We have crushed our greenhouse gas emission goals. I feel very good about that.”

He added: “I’m sitting in a building right now” – GE’s corporate HQ in Fairfield, Connecticut – “that has solar panels on the roof.”

As you’d expect from the company that popularized the precision-driven Six Sigma approach to quality, GE’s citizenship report, its fifth, has no shortage of facts, numbers and metrics. But what struck me most about the report were the insights it offers into the changing GE culture.

GE is the No. 1 U.S. wind turbine maker

GE is the No. 1 U.S. wind turbine maker

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Seattle surely has more coffee shops per capita than any American city, so the arrival of another one would ordinarily not get much attention. But a newly-renovated coffee shop called 15th Avenue Coffee and Tea in the city’s Capitol Hill neighborhood is attracting interest—because it’s a Starbucks in disguise.

YOUR neighborhood coffeeshop is a Starbucks!

YOUR neighborhood coffeeshop is a Starbucks!

Crazy as it sounds, Starbucks, which has its headquarters in Seattle, operates 16,000 stores around the world and has spent countless millions to build its brand, is going undercover.

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Green jobs, 1930s-style

July 17, 2009

What a fabulous hike I enjoyed today during my vacation in the San Juan Islands! It turns out that my day was made possible by Franklin D. Roosevelt and his Civilian Conservation Corps — the original “green jobs” program, and maybe the best.

The view from atop Mt. Constitution

The view from atop Mt. Constitution

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I’ve been on vacation this week in the San Juan Islands off the coast of Washington state…biking, relaxing, reading, eating well. On our bike rides, we’ve seen cows, horses, sheep, an alpaca, fields of wildflowers, historic sites (check out the Pig War), a vineyard, snow-capped mountains, harbor views and an old limestone factory. As I write this, I’m sitting in our hotel room on Orcas Island, enjoying a good book (The Rise of Theodore Roosevelt by Edmund Morris), savoring the view, (below) and getting ready to sample a local beer.

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