What business can learn from Sea-Monkeys

If you were one of those kids who looked forward to science class, you probably remember Sea-Monkeys.

I wasn’t into science but, as I recall, you could order Sea Monkeys from the back page of a comic book. According to Wikipedia, Sea Monkeys are the brand name for a

variant of brine shrimp… a species which enters cyptobiosis,  a natural state of suspended animation, allowing their cysts (dormant saclike embryos) to be distributed and sold as a dry powder. When the “eggs” are poured into saltwater, the Sea-Monkeys start to come out of their cysts.

Now, it turns out,  the coating that kept the brine shrimp alive can do more than entertain science geeks on a Saturday night. Its properties have inspired a startup company called Biomatrica, which makes a “room temperature stabilization technology” used to preserve vaccines and other medicines that would otherwise have to be refrigerated. Don’t ask me to explain how the science works — yes, I should have paid more attention back in high school — but I can tell you that this product is potentially a very big deal. Think of how it can help overcome the challenges of delivering medicine to the many places in the world without an electricity grid, where keeping them reliably cold is all but impossible.

Janine Benyus

The story of Biomatrica, one of a number of companies using a practice known as biomimicry to drive innovation and become more sustainable, was recounted yesterday by Janine Benyus, the biologist who dreamed up the idea of  biomimicry. She now leads a consulting firm and a nonprofit to spread its ideas; their website defines biomimicry as” an emerging discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems.”

Janine spoke on a panel today at the first GreenBiz Innovation Forum, a two-day event intended to help business rethink their products, processes and business models to make them more sustainable. She was joined by John Warner, the president of the Warner Babcock Institute for Green Chemistry.

Benyus and Warner are among the most original, creative and inspiring thinkers you’ll find anywhere in the sustainability world. They made a bit of news during the GreenBiz event by disclosing that they will be working together in the future, at least for certain clients. They’re both big thinkers: This is a crude way of putting it, but Benyus and Warner are trying to transform industry to become more like nature and less like, well, industry — by using more benign materials and processes, by becoming more efficient and generating less waste.

John Warner

Green chemistry, Warner explained, “is a science of active pollution prevention.” His institute works in a variety of industries–solar energy, industrial chemicals, pharmaceuticals, personal care and cosmetics–to reduce or eliminate substances that are hazardous to human health or to the planet. His institute says:

Green Chemistry presents industries with incredible opportunity for growth and competitive advantage. This is because there is currently a significant shortage of green technologies: we estimate that only 10% of current technologies are environmentally benign; another 35% could be made benign relatively easily. The remaining 65% have yet to be invented!

The benefits to consumers and to the environment of green chemistry are obvious. Business gains because if hazardous materials are eliminated from products or manufacturing processes, the cost of disposing and handling those materials should disappear as well. “If you render the molecules safe in the first place, you don’t have the expense of exposure controls.” Warner said most major chemical firms are at least dabbling in green chemistry, and some are taking it very seriously. [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.

Paul Hawken’s winning investment strategy

If you believe that companies that are strongly committed to socially and environmentally sound practices will outperform their peers in the long run, then you would expect so-called socially responsible investment (SRI) funds to deliver superior returns to investors.

The trouble is, they don’t. Sure, some years the mutual funds run by the Calvert, Domini, Parnassus and the rest do very well—they excelled during the tech boom of the late 1990s because they tend to eschew heavy industry—but other years, they lag market indexes. Over time, most track the broader market.

paul-hawkenOver the three years ending December 31, 2009, for instance, among the big SRI funds, Calvert Social Investment is down by a cumulative 13.02%, Domini Social Equity is down by a total of 16.2% and Parnussus Equity Income is up by 0.14%. Only Parnussus performed significantly above the S&P500, which was down by 15.9%,

Why haven’t they done better. Some of us have long believed that the problem with conventional SRI funds is that their definition of “socially responsible” is not nearly as rigorous as it could or should be.

Paul Hawken has been vocal in his critique of the SRI establishment, and since 2005 he has put his money where his mouth is. In a partnership with Baldwin Brothers, a Massachusetts-based investment firm, Hawken has overseen the Highwater Global Fund, a fund for qualified investors (i.e., the rich) that invests in companies “that have a clear sense of current global trends and future societal needs.” His results have been impressive, to say the least.

Since inception in the fall of 2005, Highwater is up by a total of 52.55%. During the three years ended in December (the same period cited above), Highwater is up by a total of 19.75%.  This is, in part, because Hawken and the other fund managers are very picky about what stocks they hold. More than 90% of the FORTUNE 500 fail their screens.

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