April 2010

Revolution in the laundry room

April 29, 2010

I’ve joined the laundry-detergent revolution. Well, revolution may be stretching it  — but changes unfolding (sorry!) in laundry rooms across America show how innovation can move us closer to a sustainable economy.

The revolution metaphor is useful because it’s a reminder that real innovation is more likely to be driven by upstarts, insurgents and rebels–like Method, one of my favorite companies–than by powerful incumbents who want to preserve the status quo.

Take a look:

Over the last several years, big, wasteful jugs of  laundry detergent like this one from Procter & Gamble’s Tide  have all but disappeared from grocery store shelves. These jugs were good for marketing people who plastered messages on the package but they weren’t good for anyone else.Tide

Today, the new normal is concentrated 2x (meaning half the liquid in every load) detergents like Unilever’s Small and Mighty All, which use less packaging and water, saving money on shipping costs and waste. Tide sells lots of 2x as well.. The 2x packages are convenient, easy to store and pour. all+small+mighty

But the greenest, smartest and most innovative detergent is an 8x concentrate from Method, which uses less water in a smaller package and should save consumers money. This is good for everyone except news P&G or Unilever, which have profited from the  overdosing of laundry, as we’ll explain. new-method-laundry-detergent1-538x1024

Method is a privately-held company that was started in 2000 by Adam Lowry, a former climate scientist, and his friend Eric Ryan in their San Francisco bachelor pad. [click to continue…]

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A tipping point on BPA?

April 27, 2010

Muir-Glen-Coupons-259x300So is BPA–the controversial, much-debated chemical that, right now, is almost surely lurking somewhere inside a can in your kitchen cabinet–dangerous? Or is it safe?

Scientists can’t come to agreement. Nor can regulators. Nor, unsurprisingly, can corporate America.

Fact is, it’s a daunting job for companies to figure out how to deal with BPA, as recent events at General Mills and The Coca-Cola Co. show. General Mills inched away from the chemical, by agreeing to keep it out of its Muir Glen brand of organic tomatoes. By contrast, Coca-Cola opposed a shareholder resolution asking the company to report on its plans to deal with BPA. The resolution got 22 percent of the vote at Coke’s annual meeting last week.

While the science of BPA remains clouded, there’s growing evidence that consumers aren’t willing to wait around for a decisive verdict from the lab. So smart companies at the very least should explore alternatives.

As Rich Liroff of the Investor Environmental Health Network wrote recently in a guest post here:

smart companies will change the way they communicate about BPA and as well as search for alternatives to better align themselves with consumer concerns. Some companies could gain reputational benefits and free media attention from supporting proposed legislation restricting use of BPA.

The IEHN supported the Coca-Cola resolution on BPA.

Some background for readers who haven’t followed the debate:  Bisphenol A is a chemical that’s widely used in products ranging from plastic water bottles to eyeglass lenses. As I wrote (How Wal-Mart Became The New FDA)  back in 2008:

BPA is everywhere, used to make polycarbonate, a rigid, clear plastic for bottles, bike helmets, DVDs and car headlights. It’s also an ingredient in epoxy resins, which coat the inside of food and drink cans. About 93% of Americans tested by the Centers for Disease Control had the chemical in their urine.

Since then, the debate over BPA has only intensified. Canada and Denmark have banned the [click to continue…]

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Wind power gets high

April 25, 2010

Windlift Testing April 3 - 2009Not far from where Orville and Wilbur Wright flew the first airplane in Kitty Hawk, North Carolina, Rob Creighton and his partners at a start-up company called Windlift are testing a contraption designed to capture high-altitude wind energy and turn it into electricity for off-the-grid users.

Potential customers include the U.S. military, chic eco-resorts in remote locations and poor people in the global south in desperate need of power.

Creighton, an 36-year-old MBA who grew up in Minnesota, tests his machines in the Outer Banks for the same reason as the Wright brothers did: There’s lots of wind there. His company is one of several — others include Google-backed Makani Power, Joby Energy and KiteGen — working in a relatively obscure but promising corner of the renewable energy business. They are deploying different technologies and business strategies, but all are driven by the fact that winds increase in power and consistency as you get higher above the ground. (If you are a scientist or engineer and want to know more, here is a link to a 77-page PDF presentation that includes such topics as “dancing kites”!)

I met Rob last week at a conference on energy and climate organized by the Center for Sustainable Enterprise at the Kenan-Flager business school at the University of North Carolina. Turns out that his obsession with kites goes back to his boyhood, when he enjoyed canoeing in the Boundary Waters; to help speed things up, he’d rig a makeshift kite to his canoe. [click to continue…]

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Sanjeev Chadha: Why is PepsiCo building dams?

April 24, 2010

Sanjeev2Today’s guest post comes from Sanjeev  Chadha, the chairman and CEO of PepsiCo India. Sanjeev, who is 50, joined the company in 1989, as part of the team that brought Pepsi products to India and while the brands are doing well, they have been controversial because of their impact on water in a country where water shortages are an issue. Here he writes about how PepsiCo has responded to the expectations of Indian citizens–by both reducing its own water use and helping communities do a better job of gathering and storing water, to the point where PepsiCo now says it has a “positive water balance” in India, a global first for the company.

Images from space illustrate an Earth plentiful with vast blue oceans, seemingly providing our world with an endless supply of this necessary resource. What the pictures don’t show are the millions of people with no access to a clean water supply. Water shortage is a global crisis.

In my home country of India, a lack of fresh water supply has long been an issue among all classes of society. Our consumers range from urban businesspeople to farmers in the countryside. All Indians are acutely aware of the fallout of long-standing issues – from heavy farming and pesticide use to poor sewage treatment and industrial pollution – that impact the nation’s lack of fresh water. As a nation steeped in agriculture, water is of particular concern to farmers, who understand that we need to immediately find better ways to conserve water.

The company I work for, PepsiCo, takes these issues very seriously and is actively making a difference. Not so long ago, environmental activists in India targeted PepsiCo and other beverage companies operating in India  for consuming excessive groundwater in local communities. As you can imagine, our executives were surprised by these accusations, as we work to employ safe water and bottling practices in PepsiCo facilities around the world. In response, we continued to improve efforts to reduce water use in our plants and took additional action to provide local communities with the clean water they need.

In 2003, we took this a step further.  We launched a country-wide effort to achieve a Positive Water Balance in India by 2009. Essentially, this means that for all water used in our manufacturing process, we would give the same amount of water back to local communities, through in-plant processes to reduce our water use, as well as programs and interventions to create greater freshwater access in local areas. You can learn more about Positive Water Balance from the World Business Council for Sustainable Development.

Check Dam Sept 2009We also recognized the need for on-the-ground action in these communities. Replenishing water supplies only partially solves the problem; villagers also need tools to better manage these expanded water resources. It’s an important part of our role to invest in and aid our neighbors. And at PepsiCo’s facilities in India, we saw an opportunity to better manage water resources in these areas by working directly with community members.

After assessing several areas near our beverage manufacturing locations,  we determined that the creation of check-dams would be the best way to manage and rejuvenate the water supply. [click to continue…]

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Fighting poverty and global warming in Africa

April 22, 2010

Tree planting in Tanzania

Tree planting in Tanzania

Rarely do you find a business that attacks two big problems–global poverty and climate change–at the same time.

This week, I came across two such ventures. As it happens, they have a lot in common: Both operate in East Africa, both work with the very poor, both were started by executives who came out of the fossil-fuel industry and both are made possible by 21st century cutting-edge technology.

One is called TIST, which stands for The International Small Group and Tree Planting Program. (You can tell it wasn’t started by a marketing guy.) TIST organize small groups of farmers to plant trees, generate income from global carbon markets and reverse the devastating effects of deforestation in Tanzania, Kenya, Uganda and India. It’s been operating for less than a decade but has signed up a remarkable 65,000 farmers.

“It’s growing on its own by 50 to 100% a year,” says Ben Henneke, a veteran energy executive who started TIST after visiting Tanzania on a church mission back in 1998.

The other is Dissigno. A San Francisco-based startup, Dissigno operates a power and lighting project in Tanzania that provides villagers with battery-powered LED lights that are recharged with solar power. The company, which also has solar businesses in the U.S. and the Czech Republic, has big plans, hoping to expand its power and lighting business to Ethiopia, Botswana and South Africa.

“There are 1.6 million people around the world who don’t have power,” says Gary Zieff, a founder of Dissigno. “That’s a business opportunity for us.”

I met Henneke and Zieff at an energy and climate conference organized by Center for Sustainable Enterprise at the Kenan-Flagler business school at the University of North Carolina. Next week I’ll tell you about another entrepreneur who spoke at UNC about his plans to bring high-altitude wind power to the global south. Since I spend most of my time writing about big companies and the government, it’s great to connect with entrepreneurial energy.

TIST traces its origins to a service at an Episcopal church in northern Virginia where parishioners including Ben Henneke and his wife, Vannesa, were encourage by the rector join in a service mission. As Henneke recalls, Vannesa whispered to him: “Maybe we’re supposed to go to Africa this summer.” He replied: “I hope you have a nice time, dear.” Six months later, they found themselves in Tanzania, and they were astounded by what they saw. People were poor even by the standards of Tanzania, where annual per capita income [PDF] is about $440 a year. [click to continue…]

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How to be a HIP Investor

April 20, 2010

R. Paul Herman

R. Paul Herman

Make money by making the world a better place.

What’s not to like about that? So appealing is the idea of doing well by doing good that a significant slice of the financial services industry is devoted to persuading people that they can invest with their values without sacrificing returns. That’s what so-called socially responsible mutual funds are all about.

R. Paul Herman, the founder and CEO of an investment advisory firm called HIP Investor, goes a step further:  He argues that companies that are leaders in sustainability and corporate responsibility are likely to outperform their peers. Those companies can be identified by using publicly-available data, he says. So by constructing an index of big companies, and investing more money into the better companies and less into the not-so-good, Herman says he both promote good corporate behavior and make money for his investors.

HIP stands for Human Impact plus Profit, Herman explained today during a talk at the  Kenan Flagler business school at the University of North Carolina. (I’m in Chapel Hill for a couple of days, participating in a conference called Global Innovations in Energy organized by Kenan Flagler’s Center for Sustainable Enterprise.) I interviewed Herman, who gave a talk about HIP investing and his brand-new book, called The HIP Investor: Make Bigger Profits by Building a Better World. He’s a personable, 41-year-old Wharton grad who did a stint at McKinsey and worked at Ashoka.org and the Omidyar Network before starting HIP.

The core of his argument, as expressed on the HIP website, goes like this:

Our world of more than six billion people faces many human problems that need solutions, many of which can be served by companies.  By solving these human needs profitably through products and services (from Walmart’s $4 generic drug program to ICICI Bank’s micro-loans to Vestas’s wind turbines), a company can benefit customers, inspire employees, engage suppliers,  and deliver sustainable profitable growth for its investors.

Well, sure. Like many, I believe that Herman’s fundamental investing thesis makes sense.  I wrote it right into my bio: “Companies that make the world a better place—by serving their customers, their workers and their communities—will deliver superior results to their owners in the long run.”

The challenge for an investor comes in identifying those better companies and deciding whether they are fairly priced by the market. [click to continue…]

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Earth Day at the mall

April 18, 2010

AI-edhmug402222523486_5e1894e314Somehow Americans manage to turn every holiday—from Christmas to Valentine’s Day, Mother’s Day, Father’s Day, the 4th of July, Veterans Day, Memorial Day, so-called President’s Day and the rest —into a shopping opportunity.

Perversely, this is now happening to Earth Day, as companies try to persuade us that we can  shop our way to a cleaner, greener planet.

Crazy, isn’t it? Along with coal plants, gas-guzzling SUVs and climate deniers, the American way of producing and consuming and discarding, buying lots of stuff we don’t need that isn’t going to make us happy anyway is, not to put too fine a point on it, trashing the only planet we have.

This is not what the first Earth Day–40 years ago, in 1970—was all about. It was a political event. It was about building an environmental movement. It was led by young people and scientists and counter-culture types and it arrived at a time when support was building for other political and social movements as well—the opposition to the Vietnam War, the feminist movement and the gay rights movement, all of which were inspired by the civil rights movements of the 1950s and 1960s.

None of these were mainstream, at least not at first. None were about shopping.

Earth Day led to the environmental laws of the early 1970s, which brought real and dramatic change: Our air and water are cleaner, parks and wilderness have been conserved, species have been protected.

Today, Earth Day is mainstream. An recent MBA grad I know says that’s a good thing. She told me by email:

I think it’s generally good if green is mainstream as more companies are offering environmental products.  That way we Berkeley types aren’t the only crazy ones!

I’m not so sure. Buying a T-shirt or tote bag won’t curb climate change or protect endangered habitat. That takes politics, organizing, hard work.

Here are some of the Earth Day products that have been brought to my attention  in the days leading up to the 40th anniversary.BagsinARow copy These are bhappybags — I’m not making this up — and they are described as an “attractive yet durable line of reusable shopping/tote, [click to continue…]

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Nicholas Eisenberger: Signs of intelligent life on the smart grid

April 17, 2010

NickToday’s guest post comes from Nicholas Eisenberger, a senior strategist at Green Order, who joined us as a moderator at FORTUNE’s Brainstorm Green conference about business and the environment earlier this week. Here, he reports on a discussion he led about the smart grid.

A Harvard-educated lawyer, Nick, who is 40,  has been an Internet and clean tech entrepreneur, an investor and a managing principal at Green Order, a consulting firm that advises big companies including General Electric, General Motors and HP. Sustainability issues are in his DNA: Nick works closely with his father, Dr. Peter Eisenberger, a professor of Earth and Planetary Sciences at Columbia University, and the former Director of the Columbia Earth Institute, on the development of a venture to capture carbon directly from air, called Global Thermostat LLC.

In recent years, the vision for a smarter electricity grid has been painted vividly by a broad spectrum of academics, entrepreneurs and utility company executives. By now, the story’s familiar: Improving the grid with intelligent infrastructure – in turbines, transmission lines, toasters and everything in between – promises to greatly reduce the nation’s energy consumption and carbon emissions, spur the growth of renewables, enable the broad use of electric cars, and save Americans billions.

The vision is compelling…but the job of making it real is enormous.

The grid is an immensely complex (if still technologically primitive) ecosystem populated and shaped by hundreds of utilities and regulatory agencies with widely varying priorities, thousands of suppliers offering non-standard approaches, and millions of customers with vastly different needs. Can we evolve the current power infrastructure into a far more advanced state?  Is it mostly still hype, or is there evidence that the smart grid has already been born?

This was the topic of a panel I moderated earlier this at Fortune’s Brainstorm Green conference about business and the environment.  With representatives from GE, Cisco, Google, and a leading cleantech venture firm on the panel and executives from major utilities, automakers, IT companies, smart grid start-ups, and other players around the table, I wanted to tease out what’s happening now, not more talk about tomorrow.

What did we learn?  The full realization of the smart grid – from turbines to toasters, as GE’s Kate Brass said – remains decades away.  But progress has been encouraging in the last year. The federal government has allocated over $4 billion of stimulus funds to smart grid projects.  This is expected to lead to the deployment of an additional 18 million “smart meters” – digitized metering devices that are one of the core building blocks of the smart grid – on top of the 10 million already in place. Likewise, there are now over 40 gigawatts of power use that can be turned down remotely when demand peaks, helping to reduce the need for costly (and still largely dirty) new power plants nationally. [click to continue…]

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Biotech and organic food: a love story

April 15, 2010

Pamela Ronald

Pamela Ronald

Earlier this week at FORTUNE’s Brainstorm Green conference about business and the environment, I led a conversation about food and agriculture during which a communications executive named David Kalson asked the question: Can organic food and transgenic food be part of the effort to make agriculture more sustainable? I answered “yes, I think so,” and referred him to an excellent book called Tomorrow’s Table: Organic Farming, Genetics and the Future of Food (Oxford University Press, 2008) by Pamela Ronald and Raoul Adamchak.

In the preface to the book, Sir Gordon Conway, the former president of the Rockefeller Foundation, calls Tomorrow’s Table “a tale of two marriages.” The first is the marriage between Pamela, a scientist whose research focuses on the genetic engineering of plants, notably rice, and Raoul, a teacher and lifelong organic farmer. The second is the potential marriage of two techniques: Genetic engineering and organic agriculture, which now cannot work hand-in-hand because, at least in the U.S., rules governing organic farming prohibit genetic engineering of crops.

The conversation at Brainstorm reminded me to post the edited transcript of a (long-ish) interview that I recently conducted with Pamela Ronald, who is a professor of plant pathology at the University of California, Davis. We talked about the book, her work on rice and what her family eats for dinner.

Marc: How and why did you get involved in the genetic engineering of crops?

Pamela: Genetic engineering is not really a discipline. It’s just a tool. I’m a research scientist. I do plant genetics. I became interested in genetics in college. I had a fantastic teacher and I got very interested in understanding how plants and microbes could communicate.

Gunther: Where was this?

Ronald: Reed College. I had spent a lot of time backpacking in the Sierra Nevada Mountains as I was growing up. I’ve always been interested in plant biology. My mother and grandparents were excellent gardeners and small-scale farmers.

Gunther: Well, then, how did your interest evolve into using, as you say, the tool of genetic engineering as opposed to conventional plant breeding? [click to continue…]

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Brainstorm Green: What a zoo!

April 14, 2010

headerThe unexamined life is not worth living, said Socrates.

“Leading an examined life in business is a pain in the ass,” said Yvon Chouinard.

Chouinard, the legendary founder of Patagonia, spoke yesterday at Brainstorm Green, FORTUNE’s conference about business and the environment.

He was talking about the challenge that companies will face as Wal-Mart and its partners in a broad-based sustainability consortium go forward with their sustainability index, a bold  effort to measure the environmental impact of tens of thousands of consumer products. It may not be easy for companies to track–and disclose–the pollution caused by their products, but it’s a vital step in the right direction.

Brainstorm Green is, in part, about the examined life: We try to take an honest look at the environmental impact of business, and see what progress if any we’re making towards a more sustainably economy. For three days this week in beautiful Laguna Niguel, CA., we brought a diverse group of business and environmental leaders together to talk about ways in which corporate America can help solve  environmental problems. We discussed electric cars, renewable energy, nuclear power, the smart grid, energy efficiency, water, sustainable supply chains, oceans, engaging employees around green, food and agriculture, green marketing, geoengineering and what sustainable consumption might look like.

We had a great lineup of speakers, more than 100 in all, including Chouinard, Bill Ford, Lee Scott of Wal-Mart,  Stewart Brand, the explorer Sylvia Earle, Lew Hay of FPL, NRG Energy’s David Crane, Bill Gross, Starbucks’ Cliff Burrows, Scott Griffith of Zipcar, Sally Jewell of REI, the leaders of the Environmental Defense Fund, Natural Resources Defense Council, Nature Conservancy and Sierra Club..

This year, we added a new, er, twist to the event, as you can see here.

For the first time, we featured animals at Brainstorm Green, thanks to the fabulous Julie Scardina of Sea World. She brought a menagerie—hawks, an eagle, a lemur, an adorable baby kangaroo, flamingos, and a 14-foot-long boa constrictor  that took a liking to FORTUNE’s managing editor, Andy Serwer.

Brad Markel_6557

Photo by Brad Markel

That was hilarious–you can see watch it unfold on video here–but not so funny were the reminders from Julie that climate change and habitat destruction are putting the squeeze on numerous species of animals that play valuable role in the earth’s ecological systems, particularly in the tropics. [click to continue…]

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