Jim Boyle shares an inspirational story of how he put his vision of a sustainable society into action by creating the Progressive Business Leadership Network, and then went on to create the Sustainability Roundtable, Inc. (www.sustainround.com). The Sustainability Roundtable, Inc. provides a new model of sharing that allows companies and governments to reach sustainability goals faster and at less cost through collaboration.
I remember in the late 80's through early 2000's the complaints I would hear about "fads" in quality. TQM, ISO, Lean, Re-engineering... the list of buzzwords goes on and on. A funny thing happened on the way though. American quality has gotten significantly better over the last 25 years. The truth is, any given label might have been a fad, but the trend was (and still is) quality improvement in US manufacturing.
A fad has a relatively short term lifespan and may be vague. A trend last a long time. I remember when people thought jogging was a fad. Health consciousness is the trend.
The term "Green" is the current hot word for anything that may be or pretends to be environmentally friendly. But sustainability (defined as meeting today's needs without sacrificing the resources of future generations) is a trend. We are not acting sustainable now, but momentum is in place to drive forward putting the systems in place to become sustainable.
How do I know... some of the biggest companies in the world like Walmart and Proctor & Gamble are forcing their suppliers to create continuous improvement systems to become more sustainable. If you cant put a good sustainability management system in place, you lose Walmart or P&G as a customer. These players are just too big to ignore.
At the World Economic Forum the most discussed topic is sustainability. The top leaders know their businesses will die if they don't have clean water and breathable air. When the big boys lead the rest will follow because their pocket books depend on it.
One big hurdle for the laggards and haters will be putting sustainability management systems in place in their companies. I'll talk about what a sustainability management system is in a future post if you don't already know (hey, maybe it will be the next buzzword that people call a fad!).
Will there be resistance? You bet. Will people say it is a fad? Of course. Will new terminology replace the current language? Absolutely. But the trend is there. Get on board or get out of the way.
In the end we as individuals and businesses pollute because it is free or nearly free to do so. The actual costs of our actions are recognized elsewhere in taxes, healthcare or put off for future generations to pay. They are called externalities.
All of the products (like water, coal, oil and other extracted things) and services (like air that does not make us sick and allows food to grow) that we get from the earth and atmosphere are ecosystem services. And those services have a price.
The solution is to value these ecosystem services. “This is nothing to do with corporate social responsibility and the green agenda, it is hard-nosed economics,” says Chris Knight, assistant director of the forestry and ecosystems team within PwC’s sustainability practice in the Financial Times.
The challenge is to link the scientific data with business and personal choice. And the way businesses and individuals make choices is based (mostly) on cost and benefit. Also known as accounting in business speak.
The World Business Council for Sustainable Development, a global coalition of some 200 companies, is about to release a guide to corporate ecosystem valuation.
A new report, The Economics of Ecosystems and Biodiversity, aims to put a price on those products and services that we get from nature, so we can recognize the costs. I believe there is nothing more critical to sustainability than paying the price of all we consume at the time of use.
The Financial Times article referenced here is "Biodiversity: Valuing nature can cut business costs" published on March 21, 2011.
To see the report The Economics of Ecosystems and Biodiversity you can go to www.teebweb.org.
Whatever business you are in, the best way to put yourself on a track to long term success is to master the green trends of your industry.
Are you a builder? Green building is the only growing trend in the space. A pest control company? People want green solutions over the conventional. Parts supplier to a major manufacturer? Manufacturers are requiring carbon footprint and input reports more than ever before and will continue to do so.
Not only will it reduce your costs, it will put you ahead of your competition.
Bloomberg's BusinessWeek.com has a great article today showing how Siemens went from nearly being toppled from a bribery scandal to completely turning the company around. All of it was done by following megatrends, with green leading the way. See the article here: http://www.businessweek.com/magazine/content/11_06/b4214018593359.htm
If a company with over 400,000 employees can make a turnaround in a short period, surely you can.
Sometimes they say the devil is in the details. For those that care about sustainability and jobs, the God is in the details. Tax rules and regulations that will decrease energy use and increase jobs without sacrificing tax dollars. Its a rare, true win-win-win. Win for business, win for jobs, win for the environment and energy security. It adjusts the EPAct Section 179D from a tax deduction to a tax credit.
In previous years if you bought a $50,000 HVAC or building management system you could deduct (reduce your income) by $50,000. Assuming a 35% tax bracket this would have saved you $17,500 in taxes, making your net cost of the new system $32,500. This was still a great deal for a building owner.
The new proposal (and it is just a proposal, not law yet) will allow you to have a tax credit of the $50,000. So instead of saving 17,500 in taxes you will save the entire 50,000 in taxes, bringing your net cost on the system to ZERO.
The tax system will not suffer from a loss of revenue though. Although the building owners will pay less taxes when making the upgrades, the employers and employees doing the work will add to the tax rolls.
A report of energy subsidies from 2002-2008 by the Environmental Law Institute shows that subsidies for traditional fossil fuels and corn ethanol totaled 87 Billion dollars. During the same period, subsidies for traditional renewable energy and carbon capture and storage were a paltry 14.5 billion. Although some would argue corn ethanol is renewable, it is not sustainable and uses nearly as much fossil fuel to produce as the energy that it creates. So it is essentially unsustainable.
Green energy would benefit significantly by simply removing all subsidies. It would make the price of dirty energy more expensive than clean energy. Even a tea partier can like that.
The Empire State Building has gone to 100% wind power for one reason. It is cheaper than using coal and prices are more stable.
Not only are operating costs lower, but the building owners are able to attract the best tenants and higher rent because of the switch. "Clean energy and our nearly 40% reduced consumption of watts and BTUs gives us a competitive advantage in attracting the best credit tenants at the best rents" said Anthony E. Malkin, president of Malkin Holdings, which runs the building, in an announcement.
"Everything that we're doing at the Empire State Building is about business and bottom line, that's the first and most important thing," Malkin said. "We're not about paying more to do something qualitatively different, we're about market-ready solutions. We didn't know we were doing green power until the bid was won by Green Mountain."
I speak to building owners all the time. Two of the biggest objections I hear is "my building is too big for this" and "my building is too small for this." Those are excuses to stop people from doing better because change is scary. Embrace the change. You will feel better and you'll prove your a better business-person than the others.
Read more: http://www.greenbiz.com/blog/2011/01/06/empire-state-building-turns-100-green-power#ixzz1AvO0hNvE
Code and government officials meeting in Charlotte, North Carolina voted to improve the 2012 International Energy Conservation Code (IECC) standard by 30%. This is a great start on the road that we need to travel for energy neutral buildings. This is action that was not taken by Washington, but by state and local government agencies that see the need.
Buildings are responsible for 50% of the energy consumption and CO2 emissions in the US. Without fixing this we will never become energy independent or truly reduce our greenhouse gas output.
According to Edward Mazria, CEO of Architecture 2030, "By the year 2035, three-quarters of the built environment... will be either new or have been renovated, and that is the opportunity for this sector to basically slow down and reverse the destructive trend of global warming."
See this clip from the PBS show E2 (pronounced E-Squared): The Economies of Being Environmentally Conscious, hosted by Brad Pitt.
Does doing the right thing pay in the pocket book. Hell Yes! A recent study of 144 LEED Certified homes that included apartments, townhouses and duplexes and single family homes recently showed a 40% savings in utilities. 64% of the properties surveyed were NOT single family dwellings.
For commercial property owners utilities can make up 35% of a buildings overhead so this savings will go straight to the bottom line. Add to that the fact that you can charge a higher rent for a green rental and you quickly can see the benefits.
Estimates to remodel or build to LEED standards range anywhere from 2-15% of the building or remodeling cost. If it is financed in the same way as the rest of the building, and incentives are thrown in, the investment is cash flow positive from day 1.
For more info on the study go to: http://www.alliancees.org/index.php/RT_PreOcc/
After a summer hiatus, the blog is back. Here I will continue to show that sustainability is not only good for your neighbors, but good for the bottom line.
A big piece of news that crossed my desk recently is that the beverage maker Sunny Delight, makers of Sunny D, Veryfine Juices and several other brands, achieved zero waste to landfill from its 6 plants in the US recently.
They started this quest in 2009, with a goal of reaching zero waste by 2013, and hit it three years ahead of schedule. As recently as 2007, 36% of waste in plants went to landfills.
According to the company's sustainability report, in the first six months of working toward the goal, it was able to change waste from an expense to a revenue stream by sorting trash and, when possible, recycling it.
In addition to waste reduction, the company has been able to cut energy use by 8% and water use by 9% — dropping carbon emissions by 17% in the process and reducing operating expenses.
As they work on their own processes the company is also now turning to its supply chain to help reduce total emissions and waste.
For entrepreneurs and funders that want to make a difference.
Greater Good Entrepreneur is a video podcast where I interview entrepreneurs that are making a difference in the world.
Feel free to reach out to me with success stories or for help.
Jim Verzino
617-669-2125
jim@jimverzino.com
