The end of garbage

p12608In nature, nothing goes to waste. The excrement of one species (forgive me if you are reading over breakfast) becomes food for another.

Why can’t we design the industrial economy to be like nature?

This isn’t a new idea. During the American Revolution, iron pots were melted down to make armaments. I take notes with a pen made out of recycled bottles. The gospel of “natural capitalism” or “cradle to cradle” has been spread by  such pioneering environmental thinkers as Paul Hawken and Bill McDonough.

Lately, though, I’m pleased to report, the idea of eliminating waste is gaining traction among big global companies, which increasingly are talking about — and acting to bring about — what is called the circular economy.

As regular readers of this blog know (see this and this), I’ve long been excited by the idea of a zero-waste world. I wrote a story for FORTUNE called The End of Garbage in 2007. Recently, I revisited the topic for Ensia, a magazine and website about environmental solutions.

Here’s how my story begins:

Don’t let fashion go to waste,” says H&M, the global clothing retailer that booked $20 billion in revenues last year. So I brought a bag of old T-shirts, sweaters and khaki pants to an H&M store in Washington, D.C., where it took them, no questions asked, and gave me a coupon for 15 percent off my next purchase. H&M takes back clothes in all of its 3,100 stores in 53 countries.

Next, I pulled an ancient iPod and an iPhone 4S with a cracked screen from a desk drawer. On the website of a company called Gazelle, I answered a few questions and learned that the company would pay me $37 for the pair. (Without the cracked screen, the iPhone would have been valued at $135.) I printed out a free shipping label, and they were on their way. Not to landfills, but to a new life.

Meanwhile, not far from my home, a garage owned by the Washington Metrorail system is about to undergo a makeover. Existing lighting fixtures will be replaced by LEDs that are expected to reduce energy usage by 68 percent. The LEDs will be manufactured, owned and monitored by Philips, which will take them back when they need to be repaired or replaced.

Welcome to the emerging world of the circular economy.

I go on to write about McKinsey & Co., Philips, Sprint, Best Buy, all of whom are getting serious about circular business models. This is getting real, folks. You can read the rest here.

Is the sharing economy really green?

sharing1So many assumptions underly conventional wisdom about all things green. That biofuels are better for the planet than burning fossil fuels. That bans on plastic bags help the environment. That electric cars reduce CO2 emissions. That eating meat is bad for the climate.

All these things are true, I believe. But what I believe doesn’t matter. The question is, where’s the evidence? On biofuels, plastic bags and electric cars, the environmental impacts depend on where the crops to make biofuels are grown, what replaces plastic bags, the electricity mix that powers the electric car and how the cows that went into your burger were raised.

The point is, the “environment” is an extraordinarily complex system, as is the economy. That’s the underlying message of a story that I wrote last week for the environmental website Ensia headlined Is Sharing Really Green?

Here’s how it begins:

I’m a big fan of the sharing economy. On a recent trip to San Francisco, I stayed in a house I found onAirbnb and made my way around the city using uberX. I’ve written favorably about house sharingcar sharingbike sharingand getting rid of stuff you no longer want via yerdle. At environmental conferences, I’ve listened to evangelists for the sharing economy such as Lisa GanskyRobin Chase and Andy Ruben. Participating in the sharing economy can save money, open people up to new experiences and build a sense of community among strangers.

But I’m not convinced the sharing economy delivers the environmental benefits its proponents claim.

Because the sharing economy enables more efficient use of underutilized assets — a car that might otherwise sit in a driveway, an extra room in a home, an electric drill or even a wedding dress — conventional wisdom holds that the sharing economy is “green.” With a little help from Google, it’s easy to find headlines like “How Web Sharing Sites Can Save the Planet” and “The Sharing Economy for a Sustainable Future.” Graham Hill, the founder of Treehugger and LifeEdited, has said the sharing economy “makes a lot of sense financially and environmentally as well.” In her book, The Mesh: Why the Future of Business Is Sharing, entrepreneur and investor Lisa Gansky writes: “Using sophisticated information systems, the Mesh [her term for the sharing economy] also deploys physical assets more efficiently. That boosts the bottom line, with the added advantage of lowering pressure on natural resources.” In an interview with Treehugger, Roo Rogers, co-author with Rachel Botsman of a book called What’s Mine is Yours: The Rise of Collaborative Consumption, declared: “In my opinion — having been an environmentalist all my life — collaborative consumption has the potential to have the biggest environmental impact that we could ever have hoped for.”

But where’s the evidence? It’s hard to find.

I probably could have written that the evidence is non-existent, but the sharing economy is so new and so hard to measure that it’s no surprise that the case for its “green” benefits remains unproven.

I hasten to add that there are still good reasons to patronize Airbnb or Zipcar or Rent the Runway or the many other sharing sites that seem to be proliferating. There’s little harm done when we make personal choices based on our assumptions about what’s good for the planet.

But when big companies or, worse, governments set policy without questioning their assumptions, the consequences can be negative on a much broader scale. I’m afraid that happens a lot more often than it should.

You can read the rest of my story here.

How to read a sustainability report

voices_gunther2It’s no exaggeration to say that a new corporate sustainability report is published nearly every day of the year. After all, most of the Fortune 500 now generate reports, many of which read like paeans to exemplary business behavior. If companies behaved as well as they are portrayed in these reports, the world would be a much, much better place.

Still, CSR or sustainability reports can be a useful starting point for looking at a company and its impact. In my latest story for the environmental website Ensia, I offer a guide to reading these reports. Here’s how it begins:

Corporate sustainability reports have been around since … well, it’s hard to say.  The first report may have been published by “companies in the chemical industry with serious image problems” in the 1980s, or by Ben & Jerry’s in 1989 or Shell in 1997. No matter — since then, more than 10,000 companies have published more than 50,000 reports, according to CorporateRegister.com, which maintains a searchable database of reports.

But who really reads them? As a reporter who covers business and sustainability, I do. Maybe you do, too — as an employee, investor, researcher or activist.

Here, then, are five tips to help you make sense of the next report that lands on your desk or arrives via email.

You’ll have to read the Ensia story to learn more but the key word to remember is context. The best corporate reports put their data in context, by comparing it with prior years or previous goals or industry peers or even the needs of the earth. Few reports meet this standard, alas.

Thanks to Steve Lydenberg and Bill Baue for their help with this story.

Illustration courtesy of Ensia

Free market environmentalism

AlfedPalmersmokestacksI believe in the power of markets.

I believe in environmental protection.

I believe in limited government.

Can those beliefs be reconciled?

I believe they can, even though environmental problems are often seen, correctly, as a form of market failure. We can’t allow businesses or individuals to pollute public goods such as rivers, or the air, or the earth’s atmosphere. The question is, how do we best correct those failures?

My preference is for strong and simple regulation or taxation, designed to (1) recognize the power of competitive markets to generate wealth and aggregate information to devise the best solutions to problems and (2) minimize, as much as possible, the ability of powerful interests to game the system, i.e., crony capitalism.

These are, obviously, complicated questions, perhaps best left to environmental economists. But I took a crack at the issue of clean energy policy in a column just published by Ensia, a lively, online environmental magazine published by the by the Institute on the Environment at the University of Minnesota.

The column ran under the headline A Market-Friendly Approach to Energy. Here’s how it begins:

The world needs clean energy. Clean energy subsidies? Maybe not.

Consider the Fisker Karma, an electric car with a base price of $95,900.  A friend of mine bought one. He earned $7 million last year, and took advantage of a $7,500 U.S. federal tax credit available to buyers of electric cars.

Fisker itself got government help, too, in the form of $192 million from the U.S. Department of Energy. So did A123 Systems, which sold battery packs to Fisker; it got $129 million in energy department grants and another $125 million in tax credits and grants from the state of Michigan.

None of this helped Fisher, A123 or, more importantly, the planet.

The column goes on to argue against the vast array of subsidies to clean energy and fossil fuels favored today by the federal government and many states, and instead proposes a carbon tax. (Ideally, a revenue-neutral carbon tax.) A carbon tax would discourage dirty energy and promote  clean energy, without favoring solar or wind or biofuels or nuclear or electric cars.

The column concludes:

…Contrary to popular wisdom, we don’t need a comprehensive national energy policy any more than we need a comprehensive food strategy to stock supermarket shelves or a comprehensive laptop strategy to keep Apple or Dell in business. What markets do very well is separate winners from losers. As the economist Michael Giberson put it: “When values are diverse and knowledge is dispersed, letting a thousand energy strategies bloom really is the best approach.” To do that, we have to get the government out of the way.

You can read the rest here. While you’re at it, take a look at the excellent journalism being published by Ensia.

Deep green investing: a closer look

A divestment rally at Harvard

A divestment rally at Harvard

As you’ve no doubt heard, Bill McKibben and his allies at 350.org have launched a  a national campaign to persuade colleges, universities, churches, foundations and, yes, people like you and me, to stop investing in the fossil fuel industry. The campaign raises interesting questions as, I’m sure, McKibben hoped it would. Among them:

Does divestment make sense as a strategy to curb climate change?

If those of us who are concerned about climate change want to align out investments with our beliefs, what options are available?

In a column called Deep Green Investing published last week by Ensia, a lively new online magazine about environmental solutions, I argued that, by itself, divestment will probably not accomplish much. Having said that, the campaign could prove useful as one of a number of tactics being deployed by 350.org, the Sierra Club and others that are aimed at bringing about political change–namely, taxes or caps on global warming pollutants, EPA rules to curb coal-burning, etc.

In The Nation, Mark Hertsgaard argues that these grass-roots climate efforts have already produced results–350.org galvanized opposition to the Keystone Pipeline, which may have persuaded President Obama to delay a decision after the election, and the Sierra Club’s Beyond Coal campaign has, along with cheap natural gas, helped drive the decline of coal in the US. Hertsgaard writes:

As important as the victories themselves was how they were won. Both the Sierra Club and 350.org eschewed the inside-the-Beltway focus and top-down political strategy of big mainstream environmental groups, as exemplified by the cap-and-trade campaign. Instead, they emphasized grassroots organizing at the local level on behalf of far-reaching demands that ordinary people could grasp and support. Their immediate goal was to block a specific pipeline or power plant, but their strategic goal was to build a popular movement and accrue political power.

This is the political context in which the divestment movement makes sense. It won’t shake up the oil industry–the Ensia story explains why–but it’s a useful organizing tool.

But what might the campaign mean for investors? Today, I’m taking a closer look at a couple of “deep green” broadly-diversified mutual funds that have decided, unlike most other funds that market themselves as green or socially responsible,” to cleanse their portfolios of companies that extract fossil fuels. [click to continue…]

Welcome, Ensia!

Ensia calls itself “a new magazine and event series showcasing environmental solutions in action.”

Read that description carefully and you’ll see how this media venture  got its  name. It took me a while.

Even as the traditional press continues to shrink–my former employer, Time Inc., just this week eliminated another 500 jobs, or 6% of its workforce–new outlets arise. I’ve been particularly impressed lately by the work of such nonprofit underwriters of journalism as Pro Publica, EnvironmentalHealthNews and the Food and Environment Reporting Network. Ensia, too, is a nonprofit, published by the Institute on the Environment at the University of Minnesota, which formerly published a magazine called Momentum, and funded by a major grant from the Gordon and Betty Moore Foundation, which supports environmental causes.

voice-green-investing-gunther-mainI’m pleased to be a contributor. Jon Foley, director of the Institute on the Environment (and a lively presence on Twitter as @globalecoguy), asked me to write an occasional opinion piece about business and sustainability. My first one looks at some issues raised by Bill McKibben’s campaign to get institutional investors to divest from fossil fuel companies, and how individual investors might want to think about divesting. Here’s how it begins:

In the investing world, past performance is no guarantee of future returns. When it comes to climate science, predicting the future is more straightforward: If we burn all of the fossil fuels on the books of the big oil, coal and gas companies—2,795 gigatons, to be precise—or even most of them, we’re headed for trouble. Bill McKibben, the writer and environmental activist, calls this global warming’s terrifying new math. In response, McKibben and his allies at 350.org have launched a coast-to-coast campaign to persuade colleges, universities, churches, foundations and, yes, people like you and me, to stop investing in the fossil fuel industry.

“It does not make sense,” McKibben says, “to invest my retirement money in a company whose business plan means that there won’t be an earth to retire on.”

His logic is unassailable. But divestment alone won’t deliver the change we need—only political action can do that. And, while it is possible to cleanse your personal portfolio of fossil fuels, it’s not as easy as it sounds. Here’s why.

You can read the rest of the column here. I’m going to dive into this topic in more depth here on the blog in a day or two.

Meantime, browse around Ensia. I think it’s off to a good start.