Showing posts with label Wal-Mart. Show all posts
Showing posts with label Wal-Mart. Show all posts

Tuesday, September 28, 2010

Resources

Resources: The Revolution Begins
BY: CHIP GILLER AND DAVID ROBERTSMarch 1, 2006
http://www.fastcompany.com/magazine/103/essay-resources.html


Let's talk about your butt--specifically, what it's sitting on.

Chances are, your chair is an unholy medley of polyvinyl chloride and hazardous chemicals that drift into your lungs each time you shift your weight. It was likely produced in a fossil-fuel-swilling factory that in turn spews toxic pollution and effluents. And it's ultimately destined for a landfill or incinerator, where it will emit carcinogenic dioxins and endocrine-disrupting phthalates, the kind of hormone-mimicking nasties that give male fish female genitalia and small children cancer (or is it the other way around?). Now, envision what you might be sitting on in 2016. Actually, never mind: Office-furniture outfit Haworth already built it. It's called the Zody, and it's made without PVC, CFCs, chrome, or any other toxic fixin's. Ninety-eight percent of it can be recycled; some 50% of it already has been. The energy used in the manufacturing process is completely offset by wind-power credits, and when the chair is ready to retire, the company will take it off your hands and reuse its components.

Unsurprisingly, Haworth is motivated by more than woodsy altruism. "Haworth fundamentally believes that by being sustainable, you can be more profitable," says its president and CEO, Franco Bianchi. The lumbar-pampering chair isn't cheap to produce--nor, at $700 to $1,100 each, particularly cheap to buy--but the company believes there's money to be made at the sweet spot where quality meets environmental consciousness.

In isolation, the story of the Zody is a font of warm fuzzies. But if the world is to avoid ecological catastrophe over the coming decade (Sorry, did we say "ecological catastrophe"? We meant "multiple, overlapping, mutually reinforcing ecological catastrophes"), it's going to require more than benign furnishings. What we need is nothing less than another industrial revolution--a wholesale conversion of the familiar model of brute-force resource- and waste-intensive industry to a model that mimics nature in its fecundity, flexibility, and efficiency. And quickly, please.

That Sinking Feeling

Last year, more than 100 citizens of the tiny Pacific island nation of Vanuatu permanently fled their seaside village because a succession of strong waves and storms threatened to swallow it up. These unlucky folks and their counterparts on other low-lying islands and buckling shorelines are involuntary trendsetters, the world's first climate-change refugees. And according to the Institute for Environment and Human Security at the United Nations University, they may be joined by as many as 50 million other environmental refugees by 2010.

If you're under 40, experts say, you're likely to see the end of cheap crude oil in your lifetime.

The same fossil-fuel addiction that drives climate chaos also fouls the air and dangerously distorts foreign policy. And things are only going to get messier: Experts differ on exactly when we're going to run out of cheap crude, but the consensus is that if you're under 40 (and particulate pollution doesn't kill you early), you're likely to see it in your lifetime.

In the meantime, billions more people will be lining up for whatever's left. By 2050, the global population is expected to hit 9.2 billion, up from today's 6.5 billion. That means the world is adding a Dallas a week, and some of the fastest-growing spots on the planet--think China and India--are those most rapidly upping their per-capita demand for natural resources. We're razing rainforests, wiping out thousands of species, slurping up a dwindling supply of fresh water, and contaminating virtually every living creature with a witches' brew of more than 70,000 synthetic chemicals. In fact, because toxic chemicals tend to drift northward and accumulate in Arctic food chains, the breast milk of some mothers in Greenland now technically qualifies as hazardous waste.

Sound grim? Don't just sit there crying into your phthalates. There are options--choose one!

The first option is an old standby: doing nothing. Resource wars will break out, environmental refugees will swarm the globe, people--mostly poor people--will starve from drought and be wiped out by intense storms. The world's rich will survive and probably prosper (they tend to), but wealth disparities will skyrocket, presumably at a significant cost to global political stability.

A second option: Educate the world's population to the point of enlightenment so we all accept that we can live with much less, materially speaking. The rich get poor, the poor stay poor--voluntary simplicity, worldwide. Ahem.

Let's talk about the third option, then: the next industrial revolution.

Reuse, Recycle, Rejoice

For decades, environmentalists have scolded the world's industrialized societies, warning that they must grow less, consume less, slow down, sacrifice. Human nature being what it is, that message found a rather modest audience.

But a group of big thinkers has emerged in the past decade to put a new twist on the green dream--people like William McDonough, Michael Braungart, Amory Lovins, Janine Benyus, and Paul Hawken. Rather than taking ecological principles primarily as moral prohibitions, they suggest, why not see them as design challenges? Why not aim to build a democratic, market-based civilization of prosperity and plenty that puts humanity in a nurturing, rather than omnivorous, relationship with the ecosystems it inhabits? Far from utopian, they say, it's largely achievable in the next decade or so--and would ultimately cost far less than our present trajectory.

Architect McDonough and chemist Braungart, authors of the landmark book Cradle to Cradle, contend that every material used in the manufacturing process should ultimately either biodegrade harmlessly or be reusable with no loss of quality (unlike today's recycling, which is actually downcycling). This radical model entirely eliminates the concept of waste, including pollution; or, as they put it in their book: Waste equals food.

Lovins, a sustainable-energy expert and head of the Rocky Mountain Institute, a green think tank and consulting firm, is similarly fixated on eliminating waste--especially wasted energy. He estimates that preventable energy loss costs the global economy more than $1 trillion a year and argues that efficiency is the most affordable energy source in the United States. In a 2004 book, Winning the Oil Endgame (partly funded by the Pentagon), Lovins and his RMI crew lay out a market-centric strategy for weaning the United States off oil over the next couple of decades through efficiency efforts and the strategic use of existing technology. Net savings to the U.S. economy: $70 billion a year by 2025.

Green Is Green

Lofty and appealing ideas, these, but what's actually happening on the ground?

To begin with perhaps the most ambitious example: As part of the China-U.S. Center for Sustainable Development, McDonough's architectural firm is designing and overseeing construction of entire city districts in China. Some 400 million rural Chinese are expected to migrate to cities over the coming decade, and the government wants urban centers to absorb the influx with minimal ecological impact. The goal is to create dense urban areas that generate more power than they consume through smart building techniques and solar technology--a high-profile demonstration of cradle-to-cradle principles, if it actually happens.

To date, though, McDonough has made more concrete progress with corporate clients, including BASF, Nike, PepsiCo, and Ford Motor Co., which famously commissioned the architect to oversee a top-to-bottom overhaul of its historic River Rouge plant in Dearborn, Michigan.

The past few months have seen blue-chip companies tripping over themselves to go green.

In fact, the past few months have seen blue-chip companies tripping over themselves to go green. General Electric vowed to improve the energy efficiency of its operations by 4% a year and double its revenues from relatively clean products to $20 billion by 2010. Wal-Mart, which has contracted with Lovins and RMI for advice, has unveiled plans to double the fuel efficiency of its new trucks, cut greenhouse-gas emissions from existing stores by 20%, and develop a model green store. Energy giant BP just unveiled a new alternative-energy division, which it says could produce $6 billion in annual revenue by 2015.

Whole Foods announced in January that it would buy enough wind-power credits to offset energy use at all of its U.S. stores, and Starbucks, which said in 2005 that it would buy wind energy to meet 20% of electricity needs at its U.S. stores, is this year adding 10% postconsumer recycled content to its ubiquitous paper cups. That should cut the need for new tree fiber by more than 5 million pounds a year, the company says. Even McDonald's is shooting to get its first green-building certification for a restaurant in Savannah, Georgia.

These heavyweight corporations don't need a windmill to see which way the wind blows. And their sheer size means that even tentative, incremental efforts have the potential to move markets. But the most ambitious, inventive ideas are bubbling out of more agile, adaptable small and midsize companies.

Take outdoor-clothing maker Patagonia. Ten years ago, it led the pack in switching to 100% organic cotton; now it's asking folks to return their old Capilene underwear (yes, they'd like you to wash it) to be recycled into new garments.

In a similar vein, Hartmann & Forbes, which makes handwoven window coverings from sustainably grown grasses and bamboo, just launched a program to take them back at the end of their useful lives. Q Collection, an upscale furniture maker, outflanks competitors by eschewing formaldehyde, polyurethane, and flame retardants. GDiapers are made of reusable cloth with flushable, compostable inserts. IceStone is a glossy countertop material of recycled glass and concrete.

Perhaps no other area is seeing as great a flurry of development as clean energy. Solar cells are shrinking, wind turbines are getting more efficient, and hydrokinetic energy--from the natural movement of water--is being tapped as never before. Energy company Energetech, for example, is teaming up with desalination company H2AU to develop technology that harnesses wave power and uses it to make ocean water drinkable. A prototype in the waters off of Port Kembla, Australia, last year beat expectations; a full-scale version could power 1,400 homes a year, at a competitive cost, or produce 260 million gallons of potable water--with zero emissions.

There are thousands of others, small firms and startups creating nontoxic, modular, recyclable products; modeling more efficient production; reducing their pollution. As in any new wave of innovation, many--perhaps most--of these companies will fail, but each will add to the expanding store of practical wisdom.

Flushable diapers and fancy chairs notwithstanding, we will never recover the thousands of species lost, the old-growth forests and Appalachian mountaintops leveled, or the lives cut short by poisons and pollution. There is already enough carbon dioxide in the atmosphere to guarantee at least some climatic disruption.

The real engine of environmental progress will turn out to be not government action but imagination and entrepreneurial spirit.

The European Union and U.S. states and cities are picking up some of the legislative and regulatory slack, but at the national level here, action to address these problems has been anemic at best and counterproductive at worst--a collective failure of will that could come back to haunt us. But if McDonough and company are right, the real engine of environmental progress will turn out to be not government action but the imagination and entrepreneurial spirit of thousands of market-savvy, environmentally minded innovators.

As GE CEO and newly minted eco-evangelist Jeffrey Immelt is fond of saying, "Green is green."

Chip Giller is founder and editor of Grist.org, an online environmental magazine. David Roberts is a Grist.org senior writer.
http://www.fastcompany.com/magazine/103/essay-resources.html


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Few. . . "are interested in designing at the nexus of racial tension, bureaucratic apathy, confused residents, limited funding, and shoddy infrastructure (yet). . . when you give people good things, good things will come."
~Walter Hood

This Land is Your Land
BY: DAN MACSAI
http://www.fastcompany.com/magazine/149/this-land-is-your-land.html


The daffodils sprouting from raised beds, the bikers speeding down smoothly paved pathways, the metal bollards lining the promenade along Oakland's shimmering Lake Merritt -- all of it just pisses Walter Hood off. "Everything seems like it's dropped out of nowhere," the landscape designer says, pointing out the offenses. The newly renovated lakefront looks pleasant, much in the way most American public spaces -- downtown plazas, suburban libraries, neighborhood playgrounds -- look pleasant. "It's like, okay, we'll put in the grasses and the rocks and let's do the stupid green roof over a garbage-compactor thing," he continues. "That's the playbook of landscape architecture. But this is the centerpiece of our community. It should add up and become something larger."

Hood, obviously, did not design the park around Lake Merritt. To see what "something larger" means to him, you have to go to Lafayette Square Park, about a mile away in a poorer, less verdant part of town, where local kids play catch on a grassy, artificial hill that Hood created to echo the domed observatory it displaced. Or to the towering De Young Museum, in San Francisco, where eucalyptus appear to blossom inside the building, thanks to a series of slits in the walls. ("It feels like we're outside," one visitor remarked while peering at the flora.) Or to any of the half-dozen cities across America -- including Pittsburgh; Buffalo; Jackson, Wyoming -- where Hood is now transforming street corners and highway underpasses into public spaces that are relevant, even meaningful, to the communities they serve: black and white and brown, rich and middle class and poor. "We invest very little in the public realm, and that's sad," he says. "Because when you give people good things, good things will come."

A designer who tackles the mundane things of this world may not seem revolutionary at a time when Michael Graves is making teapots for Target, but in landscape architecture, Hood is very much breaking new ground. For decades, modernists such as George Hargreaves, Michael Van Valkenburgh, and Peter Walker -- all white, all Harvard educated -- reigned over the profession with their clean-cut office parks and pristine college campuses, much in the vein of Lake Merritt. "Then Walter came of age, and nobody knew what to do with him," says Charles Waldheim, chair of Harvard's department of landscape architecture. "He was finding value and producing meaning in places that seemingly had none."

Before Hood started designing Splash Pad Park in 1999, for example, it was a deserted traffic island under Oakland's I-580 freeway. "Some people wanted it to be a dog park, others wanted an underground creek, and a few wanted something completely different," says longtime Oakland resident Ken Katz, 67. Today, it's all of the above -- and then some. Cement tiles blanket the apron in front of an amoeba-shaped fountain, engraved with the names of the donors who made the installation possible. Grassy knolls are dotted with palm trees from the original island, as well as newly planted dogwood, a water-hungry plant that thrives off the underlying swampland. "It's a hybrid space," Hood says. "Everyone can find a way in." And they do. Every Saturday, the park hosts a massively popular farmers' market and concert series.

This is public space as Hood believes it should be: multitasking, respectful of the land, rooted in -- and watered by -- the community. "Think about the history of civilization," Hood tells me, as if I'm one of his architecture students at UC Berkeley. "The agora, the piazza, the theater, the street, the Colosseum -- we define ourselves in the public realm. And in America, our public realm is sad. We have to be told how to act." He deepens his voice. "Sit here, look there, understand this, don't walk here, don't do that. It's crazy."

Take the Oakland Museum gardens, designed by Dan Kiley, which are similar to many parks in that the grassy areas are surrounded by railings or raised concrete edges. "You can never get in them. They're always at an edge," Hood says, criticizing a "functionless aesthetic" that is "just about moving people" past green spaces, not into them. "I can never be in the garden, only on the concrete," he says.

Contrast that with Lafayette Square Park, where a semicircular wedge slopes upward from the walkway, inviting patrons onto its grassy surface. And while Hood does use these kinds of formal elements to affect the human experience, he tries to leave the rest up to the public. "I would rather design for a place that gets worn and messy than try to keep something in a pristine state that doesn't seem lived in," Hood says. Outside the De Young, we notice a museum employee on his back, napping in the middle of a large grass triangle, without anyone (or anything) telling him to keep off. "What a great picture," Hood says, smiling as he snaps one with his iPhone.

It's the ultimate validation -- a use of the space that he always intended yet never planned.

"Being a person of color," Hood says, "people tend to look at what I do, because it's outside the norm, and make special allowances." His voice changes pitch as he mocks those who pigeonhole him: " 'Oh, that's just Walter. He does the art thing, he does the inner-city thing, he does the community thing.' "

The thing is, all of that is true. Hood, 52, grew up during desegregation in Charlotte, North Carolina, and has spent more than 20 years living and working in the heart of Oakland, so he does feel a strong connection to the black community. "You'd have to be pretty dense not to have that experience affect you," he says of his childhood. He has chosen to work almost exclusively in the public realm -- no expensive condo buildings, no corporate complexes. And he has focused his work almost entirely on urban environments.

This is by choice. Hood would love to create art for art's sake -- to, as he puts it, "live on a hill in Italy, with a beautiful cantina and a nice frickin' easel and paints, and just chill." And he's talented enough that he could cash in on corporate gigs and enjoy a cushier life: His long list of accolades includes a Rome Prize and a National Design Award. But he believes he can and should do more. Besides, few others are interested in designing at the nexus of racial tension, bureaucratic apathy, confused residents, limited funding, and shoddy infrastructure.

Hood's success has come largely because he has learned to be a community whisperer, creating spaces that have elements the residents want before they even know it. "Nine times out of 10, the thing they are asking for isn't really what they want," he says, "because they're basing everything on a very particular worldview. It's my job to elevate our conversation, knowing that they're thinking like this" -- he brings his hands together -- "and I'm thinking like this" -- he spreads them apart.

The night before our tour of the Bay Area, Hood was in L.A., meeting with residents of its mostly black, middle-class Crenshaw district about the forthcoming arrival of light rail in the area. He had planned to discuss how to make the various stations more historically significant. Instead, he found himself fielding angry questions about the installation itself, because the city-hired consultants hadn't bothered to explain exactly what light rail was and how it would be built. "These people thought it was going to be just as intrusive as the freeway, because that's all they knew," he tells me, shaking his head.

Had Hood been involved from the start, he would have bussed the Crenshaw residents to San Diego, so they could see an existing system firsthand. Educating the users of his spaces and developing a dialogue with them is part of his process. For instance, in 2006, he took a group from Coliseum Gardens in southern Oakland to two creek-front parks, one a woodsy space in Berkeley and the other a more urban setting in San Jose. He expected his focus group to prefer the Berkeley site, because it was lusher and more stereotypically parklike. But they liked the one that was harder, more developed, deeming the woods "scary," to use Hood's word. "I could do my own thing," he says, "but it wouldn't be as interesting as listening to the people."

Last year, Hood was commissioned to revitalize public spaces in Pittsburgh's historically black Hill District. As soon as he got the twin gigs -- the Garden Passage, a walkway with an art installation at the city's civic arena, and a neighborhood-wide plan called the Green Print -- he hosted a barbecue and did walking tours to get a sense of the community. There were issues aplenty: rising vacancy rates, diminishing foot traffic in stores, long-standing resentment of the new civic arena (its predecessor had displaced local housing in the late '50s), and apathy among residents that stemmed, Hood says, from the belief that they live in a "derelict" community. "Except they don't," he continues. "Ecologically, these communities are the same as the suburbs. They're just suffering from neglect."

With help from a local not-for-profit, Hood collected thousands of color photographs from Hill District residents. When construction begins on the $1.5 million Garden Passage next spring, those images will be embedded in giant glass "curtains" adorning the four terraces along the steps. Hood used a similar technique with historical photos at the Abraham Lincoln Brigade Memorial in San Francisco. "The idea," he says, "is that the community that once existed in this place is brought back through another set of layers, like a great performer taking a final bow." Hence the name of the Pittsburgh piece: Curtain Call.

Hood is putting a greater emphasis on green space, too. He affectionately and euphemistically calls the Hill District "a village in the woods," but he hopes to blur the line between the village part and the woods part with, among other things, a clever deployment of flora. He's also turning the streets and corners of several major avenues into vibrant destinations, instead of mere passageways, by adding more seating and lighting. "These corners and streets are vital gathering places," says resident Celita Hickman, 48. By letting people be where they already want to be and do what they already want to do, Hood hopes to reinvigorate the corridors -- and the businesses that line them.

That Hood has not only this vision but also a notion for how to bring it to life "impressed the stew out of me," Hickman says. "He didn't get quite a blank canvas, but he really did embellish. He's a master of that. Seeing things that we don't see. Bringing out something that's already existing and beautiful, and enhancing it."

Hood is more direct, and his explanation of what he is doing summarizes his life's work well. "People were asking me the other day, 'So when is the Green Print gonna start being implemented?' " he says, flashing a grin. "The beauty of this project is it's already there. We just have to dust off the bookshelf and put the stuff back."
http://www.fastcompany.com/magazine/149/this-land-is-your-land.html

Wednesday, November 11, 2009

Save The World, Inc.

For Love or Money?
VIEWPOINT April 3, 2009, 3:00PM EST
For Love or Money
Is forming a nonprofit the way to solve social ills, or is it more efficient for business to do it?

TIM DELANEY
President and CEO
National Council of Nonprofits
Washington, D.C.

As a nonprofit you have an opportunity to get foundation dollars. Foundations are required to spend at least 5% of their assets every year on either internal operations or contributions to nonprofits. But with asset values down so much, it's becoming harder to get funding.

Sometimes there's no direct link between the issue and a sustainable business model. Take human rights in China, for example. I don't see a way to take that on through a for-profit model. Whereas I can see setting up a nonprofit where you get a foundation and some individuals to invest their dollars knowing they will not get a [monetary] return on it.

As a nonprofit you have the ability to wear the white hat. I started a nonprofit center on leadership ethics and public service. If it had been a for-profit consulting firm or law firm, there may have been pressure to give the client the answer they want instead of the right answer.

WILLIAM FULBRIGHT FOOTE
Founder and CEO
Root Capital, a nonprofit investment fund
Cambridge, Mass.

If you can use a for-profit model, you should. There's going to be a Darwinian flush on the nonprofit side as the financial meltdown causes funding to be reduced. So if you don't have to be out with your hat in hand, you are in a better position.

Business has the ability to scale. If you can bring the engine of business and real capital to bear, you can really move the needle. You can unlock billions and even trillions of dollars to address problems that are so huge. There just isn't that kind of money in the philanthropic world.

You have to be a starry-eyed romantic to think you won't have the dilemma of profit vs. the public good [if you use the for-profit model]. But the answer is to build awareness so that you have real consumer demand and shareholder pressure for ethical sourcing and environmentally responsible production.

—As told to Amy Barrett


SOCIAL ENTREPRENEURS April 3, 2009, 3:00PM EST
BusinessWeek Magazine
Making a Profit and a Difference aren't mutually exclusive. Five entrepreneurs show how it's done

As the economy reels, enterprising individuals who apply business practices to solving societal problems are gaining support from public and private sectors
By Stacy Perman

Social entrepreneurs—enterprising individuals who apply business practices to solving societal problems, such as pollution, poor nutrition, and poverty—are now 30,000 strong and growing, according to B Lab, a nonprofit organization that certifies these purpose-driven companies. Together, they represent some $40 billion in revenue.

The idea of blending a social mission with business is not new. One of the founding forces behind the movement, the Ashoka Foundation, since its inception 1981 has granted multiyear living stipends to support more than 2,000 fellows dedicated to finding answers to a host of social ills through business ventures. Indeed, the concept of building a profitable business model in which doing good is an intrinsic part of the business and not just a philanthropic sideline has been gaining ground in recent years. Sally Osberg, president and chief executive of the Skoll Foundation in Palo Alto, Calif., another guiding force within the social venture community, says the number of institutes, universities, and organizations that are now tapping into social entrepreneurship has mushroomed since former eBay (EBAY) President Jeff Skoll established the foundation in 1999.

Now, as the economy reels, both the government and the private sector are looking for inventive ways to bring back prosperity, and many are counting on these entrepreneurs as a powerful tool for change. "Social entrepreneurship correlates to this growing realization that entrepreneurs are the key to a vibrant economy and to solutions that are badly needed," says Osberg. It's not all pie in the sky, says Bo Fishback, vice-president for entrepreneurship at the Kauffman Foundation in Kansas City, Mo. "Many social entrepreneurs have shown they can accomplish their mission," he says. "They can deliver on the social good and report a cash flow."

Not surprising, then, that they've caught the attention of such venture capitalists as those at Acumen Fund, a nonprofit that invests in companies that try to alleviate poverty, and Bay Area Equity Fund, which backs businesses aiming to make social or environmental improvements to San Francisco's needier neighborhoods. (See these additional resources for entrepreneurs seeking funding sources that back social ventures.) President Obama has even suggested starting a new government agency to help socially conscious startups gain more access to venture capital.

WHO YOU LIKE BEST
In January, we asked readers, staffers, and members of the social venture community to nominate candidates whose trailblazing companies, in operation for at least a year, aimed to turn a profit while tackling social ills. The 200-plus nominations we received included such entrepreneurs as Alex Mittal, whose Philadelphia-based Innova Materials makes antimicrobial products for private industry, then uses revenues from these efforts to develop water purification systems for the developing world. Kirsten Tobey and Kristin Richmond, founders of Revolution Foods, deliver nutritious lunches to more than 100 schools (that's 20,000 meals a day) in low-income areas in San Francisco and Los Angeles. Rachel Sterne, another social entrepreneur, encourages those living under repressive regimes to post their own reportage at her profit-sharing Web site, Groundreport.com. You can take a look at each of the 25 ventures we profiled in our slide show, then vote for the business you feel holds the most promise.

Some attribute social models pioneered by small outfits to the social responsibility efforts espoused by large corporations. For instance, about three years ago, Wal-Mart Stores (WMT), the world's biggest retailer, launched a program to promote sustainability, urging its many vendors to produce ecofriendly products while encouraging its consumers to buy them. General Electric (GE) made its green mark manufacturing high-efficiency incandescent light bulbs, and such manufacturing giants as Clorox (CLX) have begun to roll out their own lines of "green" cleaning products. In March, Cadbury (CBY), manufacturer of England's top-selling chocolate bar, announced a deal to use 15,000 tons of Fair Trade certified cocoa from Ghana by the end of this summer for its popular Dairy Milk bar. The company said the move would improve the standard of living of thousands of Ghanaians by tripling the sales of cocoa farmers there.

One of this year's finalists, Daniel Lubetzky, founder of $25 million Peaceworks, which works as a catalyst for peace by encouraging joint snack-food ventures among people of different backgrounds in volatile regions around the world, says it is not enough to impose an artificial business model on a social issue. Lubetzky, who was awarded a $1 million grant from the Skoll Foundation in 2008, says that doing good alone will not ensure success. "I had an earlier company that totally tanked," he says. "I didn't understand the product line well, but I was passionate about the mission. The failure taught me that one can't advance a social mission if the business model doesn't sell. You can't just sell a social mission. You still have to come up with the best product with the best prices." Given the current economic climate, that rings particularly true.

For a look at all 25 businesses, flip through this slide show. More elements of this special report are available here.

Perman is a staff writer for BusinessWeek in New York.
http://www.businessweek.com/smallbiz/content/mar2009/sb20090330_541747.htm

Thursday, July 16, 2009

Green Power: Buyer Beware

To Heck with Green
With consumers feeling blue, companies are dialing back on green marketing. In a survey of 72 companies by Duke University's Fuqua School of Business, chief marketing officers ranked environmental issues lowest on a list of five priorities over the coming 12 months. Even Wal-Mart (WMT), which has beaten the sustainability drum in recent years, is going easy. Green issues were mentioned in 12 of its press releases in the year through Sept. 11, compared with 29 during the same period last year. (Advertising Age)
—Edited by Harry Maurer & Cristina Linblad
http://www.businessweek.com/magazine/content/08_39/c4101newsyoun254243_page_2.htm

Green Power: Buyer Beware

Utilities are offering renewable options to customers for a fee—but most of the extra revenue is going to marketing
by Ben Elgin and Diana Holden
Business Week Online
Green Biz September 18, 2008, 5:00PM EST text size: TT

It's one of the latest ways big business claims to be curbing global warming: More than 750 utilities across the country now offer customers the chance to pay a premium on their electricity bills to generate "green power." But it turns out that, in many cases, most of the money goes for marketing costs, and little can be traced to the generation of additional renewable energy.

Lisa Baker of Atlanta jumped at the opportunity last summer to protect the environment when Georgia Power invited consumers to pay extra to "help bring more renewable power to Georgia." Paying the minimum annual premium of $54 "is equivalent to planting 125 trees or not driving 2,000 miles," the utility, a unit of giant Southern Co. (SO), boasts on its Web site. Baker, a 33-year-old freelance writer, joined more than 4,000 other customers who signed up for the Green Energy program. "I wanted [the utility] to know there's a market for renewable power," she says.
But public records show that more than 60% of the $239,000 spent during the second quarter of 2007, when Baker signed up, went to advertising and administration. "They are preying on people's good will," says Stephen Smith, executive director of the Southern Alliance for Clean Energy, an advocacy group in Knoxville.

Georgia Power says the 60% figure has now dropped to only 15% of overall costs. The company adds that much of the rest goes to purchases from a local landfill that generates methane from decomposing garbage.

But buying gas-powered electricity from the landfill doesn't appear to achieve any additional environmental benefit: The renewable gas-from-trash is now actually less expensive than conventional sources like coal. "Any utility would use the landfill gas [without customers' green premium]. It's a no-brainer," says Smith.

Georgia Power counters that electricity generated by landfill methane was more expensive than other power when the program began in 2006. In addition, the company says it aims to reduce the green premium by as much as 22%.

More than 600,000 U.S. households have signed up for utility-sponsored programs claiming that they reduce greenhouse gas emissions that contribute to climate change. That's nearly double the figure from 2004, according to the federally funded National Renewable Energy Laboratory in Golden, Colo.

But given their eagerness for environmental bragging rights, many of the power companies are strangely reluctant to explain with specificity how extra payments from consumers produce green energy that wouldn't be generated otherwise.

"ALL ABOUT PR"
In July the Florida Public Service Commission pulled the plug on Florida Power & Light's green energy program after an audit found that more than half of the premiums collected went to marketing and administration instead of renewable energy purchases. The program, known as Sunshine Energy, had more than 38,000 participants paying an additional $9.75 a month. In a regulatory hearing in July, Public Service Commissioner Nathan Skop described the program as "all about PR and of little substance."

Florida Power & Light staunchly defends the program, arguing that billboards, newspaper ads, and bill inserts were needed to alert consumers. The utility says that the rest of the money went to new solar-power installations and the purchase of renewable energy credits. RECs are certificates indicating that a green power developer, such as a wind farm, has generated environmentally friendly energy. Purchasers of RECs take credit for funding the clean power. Florida Power & Light won't disclose, however, most of the sources that supplied RECs to its Sunshine Energy program, citing confidentiality obligations.

Utilities devoting only a modest slice of voluntary green premiums to renewable power generators is something of a pattern. Duke Energy's (DUK) GoGreen Power program in Indiana has signed up more than 1,100 customers, who pay a premium of at least $5 per month. According to Duke's marketing literature: "Purchase of GoGreen power ensures that a specified amount of electricity is produced from renewable sources." But records for 2007 reveal less than 18% of the premiums, or about $15,800, went to brokers to buy RECs; 48%, or $42,950, went to marketing the program.

Duke says that while it has had to spend significant amounts to recover GoGreen's start-up costs, the program has nevertheless already contributed to protecting the environment.

Elgin is a correspondent in BusinessWeek's Silicon Valley bureau . Holden is an intern in BusinessWeek's Atlanta bureau.
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