Novelis: Towards a circular economy

novelis_evercanAs regular readers of this blog know, I find the circular economy to be one of the most exciting ideas in corporate sustainability. This is the idea, sometimes called closing the loop, that when we are done with products, they can be recycled and made into something else, with zero waste. It’s inspired by nature, of course, where nothing goes to waste.

To show the way to the circular economy, consider the aluminum can. Aluminum has the wonderful property of being able to be recycled after use, with no degradation in quality (as opposed to say, PET plastic, which tends to break down every time it is recycled.) Recently I heard about a company called Novelis that has made aluminum recycling the core of its business model. A $9.8 billion company based in Atlanta, Novelis has created a new product called the ‘evercan’ which is guaranteed to have at least 90 percent recycled content–a breakthrough that the company hopes to produce and market with a big beverage company.

Novelis is profiled in my latest story for Guardian Sustainable Business. Here’s how it begins:

Recycling aluminum is a no-brainer – or, at least, it should be.

Producing aluminum beverage cans out of recycled scrap, instead of by mining bauxite and manufacturing new ingots, saves energy, carbon emissions and money. The same is true for the aluminum that goes into cars, planes, electronics and buildings.

If businesses and consumers want to get serious about creating a circular economy – where everything, once used, is made into something else and nothing goes to waste – aluminum is a very good place to start.

Yet the recycling rate for aluminum cans in the US is a mere 55%. That’s below the global average of about 70% and well below rates of better than 90% than Scandinavian countries can boast – or Brazil’s 98% recycling rate.

The low US rate represents an enormous waste of materials and energy – and a big opportunity. Atlanta-based Novelis is aggressively seizing that opportunity.

The $9.8bn firm converts aluminum into flat sheets, most of which is then turned into beverage and food cans. Novelis is already the world’s biggest aluminum recycler, and it aims to do more. Its chief executive, Phil Martens, says the company wants to turn its “whole business model from a traditional linear one to a closed-loop one”.

I’m delighted that Novelis’s CEO, Phil Martens, has agreed to speak at Fortune Brainstorm Green, the magazine’s conference about business and the environment. Next year’s Brainstorm Green will be May 19-21 at the Ritz Carlton in Laguna Niguel, CA. I’m once again co-chair of the event. Watch this space for future announcements of speakers and topics.

Fortune Brainstorm Green, and the limits of corporate sustainability

Harrison Ford at Fortune Brainstorm Green

Harrison Ford at Fortune Brainstorm Green

The 2013 edition of Fortune’s Brainstorm Green conference was, by most accounts, a hit. We had a record number of attendees, including more than 50 CEOs of companies and nonprofits, big and small; plenty of entertaining and informative conversation; and a healthy dose of fun, with celebs like Harrison Ford, will.i.am and (my favorite) ultra marathon runner Scott Jurek. As co-chair of the event since the first Brainstorm Green in 2008, I love to reconnect with colleagues and sources, meet new folks and learn from and, occasionally, by inspired by our top-notch speakers. The theme of the conference has been a constant: How can business profitably help solve the world’s most important environmental problems?

Unavoidably, the challenge of an event like Brainstorm Green (as well as a conundrum for anyone who writes about corporate sustainability) turns on the question of how much to cheer or jeer the efforts of companies that are trying to “go green.” My job, as I see it, is to do both–to applaud the leaders, to prod the laggards, and to do my best to tell one from the other. That’s difficult balance to do in a conference setting where the mood is one of bonhomie, where the speakers are our “guests,” and where the presumption is that everyone is doing the best they can. The trouble is, that’s usually not good enough.

Mark Tercek at Brainstorm Green

Mark Tercek at Brainstorm Green

As Mark Tercek, the CEO of The Nature Conservancy, who I interviewed at Brainstorm Green, put it in his excellent new book, Nature’s Fortune:

Nearly every precious bit of nature–teeming coral reefs, sweeping grasslands, lush forests, the rich diversity of life istelf–is in decline. Everything humanity should reduce–suburban sprawl, deforestation, overfishing, carbon emissions–has increased.

Sad but true.

So if corporate America is changing for the better when it comes to the environment–and no doubt, many companies are–the pace of change is too slow and the ambitions of business leaders are too modest. Incremental change is not getting us where we need to go. [click to continue...]

Meat lovers, rejoice! Cattle could be a climate-change solution.

cattle-ranch-sierra-nevada-mountainsIt’s become a truism of the environmental movement. Eating meat is bad for the planet. A few years back, a couple of researchers published a study claiming that livestock is responsible for 51 percent — 51 percent! — of the world’s greenhouse gas emissions. The FAO says it’s closer to 18 percent, but still…

Jim Howell, a lifelong rancher and the CEO of a company called Grasslands LLC, says this conventional wisdom is ill-informed and misleading. More important, he has set out to disprove it. Grasslands owns four cattle ranches in South Dakota and Montana, where the company is monitoring the environmental impacts of its unconventional approach to ranching — called holistic management — and forging relationships with nonprofits like The Nature Conservancy and the Natural Resources Defense Council, hoping to turn them into allies. Last month, Howell’s partner, mentor and friend, Allan Savory, who is a Zimbabwean farmer, politician and environmentalist, delivered a TED talk called “How to Green the World’s Deserts and Reverse Climate Change” that rapidly attracted about half a million views. Their argument, in brief, is that traditional ranching methods can degrade land and threaten biodiversity but that, when managed well, cows can actually be restorative.

What’s most interesting (to me, anyway) is that Howell, Allan Savory and their investor-partners in Grasslands believe that they can use markets to drive their unorthodox ideas about ranching to a much, much larger scale. They argue that holistic management is better for business, better for the land, better for the climate and, not incidentally, a way to raise more cattle on less land than conventional methods and thus help feed a hungry, growing planet.

If it sounds too good to be true….well, their arguments have been controversial for decades, and certainly since 1988, when Savory described his methods in a 564-page book called Holistic Resource Management,  In a book review[PDF, download] in the Journal of Soil & Water Conservation, a Berkeley range ecologist named James Bartolome wrote: “Holistic resource management itself is a model for a management system with little novelty and severe technical problems…Those who apply Savory’s approach do so at their peril.” The Savory Institute has compiled a portfolio of supporting evidence, including peer-reviewed papers, but the debate rages on.

Jim Howell

Jim Howell

Howell, 44, comes from a family that has been ranching in Colorado since the late 1800s. He intends to bring further science and economics to bear on the question of whether ranching, done right, can help regenerate the planet, improve the farm economy and, as one of his investors, John Fullerton, puts it, “harness the power of capital and markets to shift the course of capitalism onto a more just and sustainable path.” A former managing director at JP Morgan, Fullerton is now president of the Capital Institute and an investor in Grasslands LLC, along with Larry Lunt, a private investor and environmentalist who runs a family office called Armonia. The Savory Institute, a for-profit company that carries out Savory’s work–Howell’s wife is CEO–is also an owner of Grasslands. Other investors will be brought on as Grasslands grows, as its owners expect it to. [click to continue...]

Turning JP Morgan green from the inside out

Matthew Arnold

Matthew Arnold

Can Wall Street become a friend of the earth? For nearly a decade now, most of the big investment and commercial banks have had chief sustainability officers, but it’s never been clear to me what they can and cannot do.

To find out, I spoke recently with Matt Arnold, the head of environmental affairs for JP Morgan Chase, who I’ve known for years. Matt, a lifelong environmentalist, was refreshingly honest.

In my latest column for the Guardian Sustainable Business website, I report on what I learned. Here’s how the story begins:

Deep inside the belly of the beast known as JPMorgan Chase toils a lifelong environmentalist and former Eagle Scout named Matthew Arnold who is trying to help turn the bank, if not green, well, a bit greener. It’s a daunting job.

Arnold, 51, joined the company in autumn 2011 as head of the office of environmental affairs because, he says, of the sheer scale of the opportunity; last year, the bank booked $99.9bn (£64bn) in revenue and $21.3bn (£14bn) in profits, providing credit and raising capital of more than $1.8tn, for everything from home mortgages to credit cards to corporate bonds and IPOs. The bank manages another $1.4bn in assets (as of September 2012) for clients. If Arnold can help steer even a slice of that towards more sustainable ventures – for example, towards wind and solar energy and away from coal – he will be doing his part to make Wall Street a friend of the earth. But can he?

“The position I’m in now has the greatest potential for impact of anything I’ve done,” Arnold says. “Yet there’s no manual for this. There’s not a clear roadmap.”

You can read the rest of the column here.

On Wednesday, by coincidence, at the GreenBiz Forum in New York, I’ll be interviewing Matt and Erika Karp, who is head of global sector research at UBS, to talk about the role of Wall Street in promoting sustainability. Matt and Erika will also be joining us this spring at Fortune Brainstorm Green.

 

 

Is CoolPlanet Biofuels too good to be true?

Imagine a company that says it can produce virtually limitless amounts of cheap gasoline, create arable land for food production and solve the climate crisis–all at once.

That’s the promise of CoolPlanet BioFuels.

Mike Cheiky

Mike Cheiky, the company’s founder and CEO, spoke about CoolPlanet’s “negative emissions technology” at Brainstorm Green, FORTUNE’s conference about business and the environment. Yes, negative emissions.

Does that mean, I asked him, that the more you drive a car powered by CoolPlanet’s biofuels, the more CO2 will be pulled out of the air? Yes, he replied.

“The world doesn’t have too much carbon,” Cheiky explained. The problem’s is that the carbon’s in the wrong place. There’s too much in the atmosphere, causing global warming,  and not enough in the soil. Essentially, Cool Planet has a plan to use plants to remove it from the air and then restore it to the land.

Before you decide that this is too good to be true, you should know that Cheiky, a veteran entrepreneur, has persuaded Google, General Electric, BP, ConocoPhillips, NRG Energy, Exelon and venture capital firms Shea Ventures and North Bridge Venture Partners to invest millions of dollars–he won’t say how many millions–in CoolPlanet Biofuels.

“We have been poked and prodded so many ways by so many people,” Cheiky told me. “GE sent 17 people to do their due diligence at a time when we had only 15 employees.”

These investors wrote him checks, he added, because of his track record. “I’ve done six start-ups in my career,” he went on, “and I’ve never had a down round. They’ve all been very successful.” [click to continue...]

Look who’s coming to Brainstorm Green

Next April, FORTUNE will again bring together some of the smartest people we know in sustainability for Brainstorm Green, the magazine’s annual conference on business and the environment.

This is will be our 5th Brainstorm Green–hard for me to believe, since I’ve been involved since the beginning–and we’ve again got a first-rate lineup of leaders from corporate America, the  environmental movement, the investment community and government, as well as a scattering of interesting writers, thinkers and doers about “green.”

Once again, the event will be held at the spectacular Ritz Carlton in Laguna Niguel, CA. Dates are April 16-18, 2012.

Alan Mulally

New faces for 2012 from the corporate world will include Alan Mulally, the president and CEO of Ford; Rob Walton, the chairman of Walmart; Andy Taylor, the chairman and CEO of Enteprise (they buy more cars than anyone in America); C. Larry Pope, the chairman and CEO of Smithfield Foods (they make more hot dogs than anyone in America, as I wrote in Smithfield Foods: Sustainable Pork?); Vance Bell, the chairman and CEO of Shaw Industries (the world’s largest carpet manufacturer, see my blogpost, This carpet has moral fiber); John Faraci, the chairman and CEO of International Paper; Gary Hirshberg, the CE-Yo of Stonyfield Farm; Russ Ford, the executive vice president of Shell; Bea Perez, the chief sustainability officer of Coca-Cola; and Trae Vassallo of Kleiner Perkins. [click to continue...]