For green business, blue skies ahead. For climate policy, who knows?

The renewable energy and clean tech industries let loose a collective sigh of relief today. President Obama’s re-election means they still  have a friend in the White House.

Clean energy was a big winner yesterday,” said Frances Beinecke, president of the Natural Resources Defense Council. “American voters not only re-elected a president who made green jobs a cornerstone of his first term and his campaign, they also rejected some of the shrillest champions of Big Oil and Big Coal.”

As Nick Robins, HSBC’s climate research analyst, said today:

Obama’s victory essentially protects key climate policies from repeal, particularly the regulation of carbon dioxide by the EPA, most notably in the power and auto sectors. It also offers the chance of extending the Production Tax Credit for wind energy when it expires at the end of this year.

True enough, but the today’s inefficient, hodge-podge collection of EPA rules, clean-energy subsidies and state mandates — while better than nothing — is no substitute for a rational economy-wide policy to deal with climate change.

Could this election usher in a carbon tax or cap-and-trade regulations to limit global warming pollution? That’s impossible to know,  but there’s no evidence that climate action has climbed to the top of the president’s to-do list.

Obama made a passing reference to climate change in his acceptance speech, saying: “We want our children to live in an America that isn’t burdened by debt, that isn’t weakened by inequality, that isn’t threatened by the destructive power of a warming planet.”

But his all-but-absolute silence about global warming during the campaign means that he has no mandate from voters to act on the issue. Worse, he has made close to zero effort to persuade Americans that the issue matters, a failure that will surely cast a shadow over his legacy if it isn’t rectified during a second term.

To see what’s next for climate and green business after the election, I reached out to some smart people in the business world and in Washington to see what opportunities, if any, they see.

The first, and maybe the best, opening will arise when the president and the lame-duck Congress face the so-called fiscal cliff in the next 60 days. The government will need revenue to avoid painful spending cuts and tax increases, and a tax on carbon emissions could become an option. [click to continue…]

What sustainable consumption looks like

Three “green” products that recently arrived at my house got me thinking about the idea of sustainable consumption.

Which of these three do you think moves us closer to sustainable consumption?

Which takes us farther away?

This is a bottle of dish and hand soap from Method. The package is made from recycled ocean plastic.

This is an LED bulb from IKEA.

And these are SUNNAM solar-powered lamps, also from IKEA.

Two of these products — the dish soap and the bulb — move us in the right direction. The solar lamp? No. And I say that as an admirer of Method and IKEA.

To understand why, let me try to define sustainable consumption: It’s the consumption of a product that leaves the world no worse off–and ideally better off–than if it were never made. But it’s got to be more than that–the product has to be appealing and affordable, too. Very few products meet that test today. But it’s not hard to see what sustainable consumption would look like–products would be made using renewable energy, and they would be made into something else when they are done. A world powered by renewable energy with zero waste would be sustainable, more or less, or at least a lot more sustainable than the polluting, wasteful, throwaway system of production and consumption that we have now. [click to continue…]

Expo West: Beyond chocolate and chia

Today’s guest post comes from the aptly-named Catherine Greener, the CEO of co-founder of consulting firm Clear Green Advisors. Cat, as she’s known, is one of the sharpest people in the world of environmental consulting. A native of Detroit who is trained as a industrial engineer, she’s an expert in manufacturing, among other things, and began her career as a maintenance supervisor for Pontiac Motors. Cat knows how things get done, and she knows business, too–she has an MBA from Michigan and has advised Procter & Gamble, FedEx, Shell, Nissan and Ingersoll Rand, among others. She filed this report after a trip to Natural Products Expo West, a giant trade show held every year in Anaheim, CA.

Back at my desk in Boulder after three days at Natural Products Expo West, the largest convention of people in the natural, organic and supplements industries, I am tired and I have a list of people to email or call. But I am filled with an optimism that is rare after attending a trade show.

At Expo West, as it’s known, about 50,000 or so vendors, retailers, buyers and product seekers convened in Anaheim to learn about emerging ideas and and exciting new products in these high growth businesses, which encompass everything from raw organic energy bars to shampoo made from beer. I took the opportunity to listen to legends like Gary Hirshberg of Stonyfield Farm, meet authors including Paul Greenberg (Four Fish: The Future of the Last Wild Food) and enjoy a beer with Adam Lowry, Co-founder of Method, one of the leaders of a new wave of young entrepreneurs.

Expo West overwhelms the senses. The vast convention center is filled with organic chocolate that will stop you in your tracks, essential oils, raw vitamin drinks, gluten-free grilled cheese sandwiches— and something even for the eyes—the chance to be photographed with Fabio.

I attend Expo West to see trends. This year’s product trends were easy to spot: raw, GMO-free, gluten-free (and delicious) and Chia, which is not just for “pets” anymore, but is being added to foods for its health benefits (Omega-3’s and fiber).

But for me, at least, the most interesting trend at this year’s Expo West had nothing to do with products; it had to do with the companies that were exhibiting–the emergence of the Benefit Corporation, or “B-Corp”.

King Arthur Flour proudly displayed their B-Corp logo next to their other 3rd-party certifications.  Why should this matter? Shouldn’t only the quality of the product matter to the shopper? “Consumers are interested in the type of company that you are, just as much as the kind and quality of the product that you make,” explains Tom Payne, Director of Marketing, at King Arthur Flour.

I may be going out on a limb, but it feels like a movement is growing here. Companies that are good for the world want to “occupy your cart, refrigerator or cupboard.” And shoppers seem ready to listen.

Consumers want to know more–not just about what they are buying, but who they are buying from. They want to know if there is “pink slime” in their kid’s lunch, or if their cans have BPA in the liner, and, if so, why a company felt the need to use it there. If a company can assumer its customers that it is providing them with the most natural and healthy product possible, and that it cares about the community and the planet, and that it embraces a new way of doing business, it can build a powerful brand around transparency, authenticity and trust.

I look forward to Expo West 2013. As for trends, I think we are going to see even more Certified B Corps. It’s the right marketplace. It’s the right message.

Big business’s big innovation problem

To create a new green economy, industrial capitalism must destroy itself. Disruptive, radical, breakthrough innovation is needed, on a mass scale. Government isn’t delivering the change we need. Can business step up to the challenge?

Innovation is on my mind because I’m just back from the GreenBiz Innovation Forum, a two-day event devoted to “sustainable innovation.” The San Francisco confab brought together smart and dedicated business people who engaged in lots of stimulating conversation and did some fun stuff—like trying to build a tower out of uncooked spaghetti, tape and a marshmallow. There’s video, photo and print coverage here.

I came away wondering whether the emerging orthodoxy of green business – one that is willing to settle for incremental changes by big companies, and clever but insubstantial breakthroughs by small ones—is going to get us where we need to go.

Two examples:

Procter & Gamble sets “carbon intensity” targets, meaning that it will produce its products (Tide, Bounty, Cascade, Crest, etc) with less energy. But because of the company’s growth imperative, it will pollute more, not less, in absolutely terms. [See P&G: A bold green vision but…]

Stonyfield Farm devises a corn-based yogurt cup, which gets us closer to a zero-waste, cradle-to-cradle consumption model. But the bigger challenge is to get  petroleum out of cars, trucks and planes, not yogurt cups.

These initiatives deserve applause, and their stories are worth sharing. But let’s not fool ourselves into thinking that they are the kinds of innovations that will deliver the environmental change we need.

Tim O'Reilly

The GreenBiz event was a reminder that big, multibillion dollar corporations aren’t good at disruptive innovation, even when they try. They don’t attract the right people; inventors and creative thinkers are repelled by cultures with lots of meetings, process, politics, budgets  and bureaucracies. Big companies are slow to move. They aren’t about having fun—and as Internet mogul Tim O’Reilly noted in a lively and provocative talk at GreenBiz breakthroughs are often driven by people  (the Wright brothers, the hackers who started the computer revolution, the Google guys) who want to have fun or make something cool.

Even when facing existential threats, big companies don’t cannibalize themselves, as Clayton Christensen has written. Newspapers didn’t invent Craiglist, which destroyed their classified business. The record industry tried to fright iTunes. My cool new “barefoot” running shoes (below), which challenge the business of conventional running shoes,  come from Vibram, an upstart, not from Nike or Adidas. Ford and GM didn’t invent Zipcar, and BP ain’t going beyond petroleum. [click to continue…]

How to innovate…sustainably

So I have a confession to make: I’m kind of bored by eco-efficiency.

Yes, I know that this week’s announcement of new government standards for refrigerators and the super-insulated double-hung windows in the Empire State building and Yahoo’s new ‘chicken coop’ data center in upstate New York are all important ways to conserve energy, reduce greenhouse gas emissions and save the planet.

But what really gets me jazzed is innovation that gets us closer to a sustainable world, not incrementally, but by leaps and bounds: innovative business models like Zipcar and RecycleBank, innovative products like P&G’s Tide coldwater or Method’s 8x laundry concentrate, and innovative ways of thinking about business like Waste Management’s Green Squad, which helps companies reduce waste before it’s created.

That’s why I’m excited about the first Greenbiz Innovation Forum this month (October 19-20) in San Francisco. It’s about “models, methods and mindsets for transforming business” to make it more sustainable. My friends and colleagues at Greenbiz, led by Joel Makower, have put together a terrific group of speakers, as well as hands-on opportunities for all of us to learn how to think more creatively.

I’m looking forward to reconnecting with Janine Benyus of the Biomimicry Guild,  architect and designer Bill McDonough of cradle-to-cradle fame and Aron Cramer, author of a new book called Sustainable Excellence. (They’ve all spoken at FORTUNE’s Brainstorm Green conference.)  I’m eager to meet author Hunter Lovins of Natural Capitalism Solutions, John Warner, a pioneer of the green chemistry movement and Tim Brown, the CEO of Ideo, among others.

Corporate executives who will talk about how they foster innovation include Stephen Meller and Len Sauers of P&G, Scott Elrod of Xerox PARC, Jim Hall of Waste Management, and Adam Lowry of Method. I’ll be moderating a panel with Adam and Andrew Williamson of Physic Ventures, a venture capital firm that invests in “companies that are developing technologies, products and services to enable consumers to adopt more sustainable lifestyles.”

I hope to see you there–you can request an invitation here.

And if you are in the solar business, I could well see you the week before (October 12-13) in Los Angeles, where I’ll  be moderating a CEO panel at Solar Power International 2010, North America’s largest business-focused solar industry convention. I’ll be speaking with Tony Clifford, the chief executive officer of Standard Solar; Dan Shugar, the chief executive officer, Solaria; Terry Wang, chief financial officer, Trina Solar; and Matthew Baker, commissioner, Colorado Public Utilities Commission. We’ll talk about what’s needed to dramatically speed the growth of the solar business in the U.S., and you can be sure innovation will be a big part of our conversation.

In between, I’ll be at the Society of Environmental Journalists 20th annual conference in Missoula, Montana. I’m a newcomer to SEJ, but I did get to last year’s conference in Wisconsin and it was a great learning opportunity. This year there will be lots of talk about the west–water, wolves, natural parks and such–as well as panels about nuclear power (which isn’t popular with the SEJers I’ve met), the BP oil spill, nanotechnology and and even geoengineering–perhaps the most innovative approach imaginable to the climate crisis.

Revolution in the laundry room

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…]

The evolution of laundry detergent

“People are very entrenched in the way they do their laundry,” says Adam Lowry, the co-founder and chief “greenskeeper” at Method. And that’s a problem, as we’ll explain in a moment.

Method is an eight-year-old company that makes “environmentally-friendly cleaning products that are safe for every home and every body.” Started in a San Francisco bachelor pad by Lowry—a former climate scientist!—and his friend Eric Ryan, privately-held Method now has more than $100 million in annual revenues, about 100 employees and a good deal of buzz for its style as well as its green products. Although Method was the first company certified as a Cradle to Cradle company in the U.S., it’s probably better known for its packaging aesthetic than for its commitment to sustainability.

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“If your brand position is, hey, we’re the green alternative to the toxic stuff, and everyone else offers green products, you’re no longer differentiated,” Lowry says. “It’s also not very interesting.”

“We’re trying to create broad appeal, way beyond the green consumer, for products that have ‘green’ as one of their qualities,” he says. “There have been far to many green things that have been designed to be green, and they suck.”

Lowry spoke today at the Greener By Design conference in San Francisco, hosted by my friend Joel Makower and run by Greener World Media. (I’m a senior writer at Greenbiz.com, a GWM media property.) He’s an interesting guy—34, with a chemical engineering degree from Stanford, who worked for the Carnegie Institution before starting Method.

Method is at the forefront of changes sweeping the home cleaning business. (No pun intended.) Premium brands like Method, Seventh Generation and Restore are growing. The big players in the industry, meanwhile, are introducing green brands, like Clorox’s Greenworks and SC Johnson’s Nature’s Source. All tend to talk about themselves as plant-based, biodegradable, natural, non-toxic, chlorine-free and the like. I confess, I can’t even begin to sort out the competing green claims.

Method, though, was the first cleaning company to introduce a triple-concentrated laundry detergent back in 2004. That was a simple and very good idea—it reduced packaging, appealed to retailers because it saved shelf space and shipping costs and was easier for consumers to shlep home. At first consumers balked—they weren’t sure they were getting enough detergent for their money—but with a big push from Unilever, which introduced a product called Small & Mighty All, and an even bigger push from Wal-Mart, the idea caught on. Now most laundry detergents are compacted.

“We thrive by making the market change and getting our competitors to follow our innovations,” Lowry says. “You now can’t buy at Wal-Mart or Target a non-concentrated laundry detergent.”

Even so, there’s lots of waste in the laundry biz. Most customers fill the cap on the bottle to the brim. More is better, they figure. Lowry says Method would like to find a way to get people to use only the detergent they need, and to deliver it with less packaging.

“We have a quandary.” Lowry says. “We make a lot of plastic bottles. I’d rather make a refill system.”

If consumers were willing to bring their empty containers back to the store and refill them, they could eliminate the packaging associated with each purchase and, presumably, save money. Restore is trying out a refill system for its products in cooperation with Whole Foods Markets in the Midwest. (Here’s a link to the Restore website that explains how it works.)

The problem is, it’s inconvenient. “If you don’t bring consumers along with you, the most wonderful innovation is useless,” Lowry says. Plus have you ever seen how much coffee is spilled on the floor in supermarkets where people grind the beans themselves? The aisles could get pretty sticky once people start dispensing laundry detergent.

Method is working on the next big idea in laundry detergent, Lowry tells me, but he won’t say much more than that. “It will bring fundamental change to the category,” he says. He will say that when he thinks about the future of laundry detergent – and it’s a good thing someone is – he sees an evolution from plastic bottles to a refill model to a subscription model to a service model.

“We want to get paid for cleaning people’s clothes, not for selling liquid. The business model has to change,” he said.

No, I don’t know what he’s talking about either, but one can envision a smart washing machine that would dispense exactly the right amount of detergent and no more, then clean your clothes, separate the rinse water from the detergent and the dirt, and then  recycle the water and detergent and do it all over again. A closed-loop system, if you will.

“When I think about Method in the future,” Lowry sats, “I want to be able to revolutionize every product category in which we compete.” Continuous improvement is the name of the game. Method is worth watching. And it’s clearly about a lot more than pretty bottles.

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