Joel Makower: Two Steps Forward

Why Best Buy Is Rooting for the Smart Grid

2009-06-29T09:32:15-07:00

The retail giant that helped bring car stereos, camcorders, and CD players to the masses wants to be homeowners' best friend in the emerging world of smarter, greener technology.

Best Buy hasn't been front and center as a green business leader. The corporate responsibility section of its website focuses primarily on Energy Star appliances and e-waste recycling, which the company rolled out to all of its 1,000 or so U.S. stores earlier this year. Beyond that, the company seems to be engaged in the usual efforts to reduce its environmental footprint.

Behind the scenes, however, Best Buy has aspirations to become consumers' go-to resource for a range of green products and services, from e-vehicles to solar panels to a myriad of gizmos designed to help households plug into the smart energy grid as it rolls out in the coming years. The company's thinking, along with its initial efforts, suggests that the mainstreaming of next-gen green products is within view.

At first blush, a company better known for stereos than solar panels may seem an odd match to be ground zero for green tech. But there's a logical link. As the wired and wireless connections grow among home energy systems, electric vehicles, and information technology, consumers will need a reliable resource for finding products and expertise, as well as the ability to make everything work together as advertised. That's where Best Buy hopes to come in.

If you scan the landscape of what's coming over the next few years, you begin to see the opportunities: plug-in electric cars that not only can recharge from a household outlet, but which can serve as an energy storage device to power your home as needed; plug-and-play home solar or wind energy devices that can be installed by homeowners; smart home appliances like refrigerators and dishwashers that can negotiate with the local utility to take advantage of the lowest-possible energy rates, or power down to reduce grid stress; home energy meters and related gadgets that allow you to program lighting, heating, cooling, and appliances so as to maximize comfort and minimize energy bills; the ability to control all this remotely via any computer or smart phone; and more.

"When you turn to the smart grid, the ability to take complex technologies that are going to plug into the home, utilize home area networks, communicate back over broadband to utilities — it's going to be a fairly complex system," Rick Rommel, Best Buy's Senior Vice President, Emerging Business, explained to me recently. "We think that's a place where Best Buy can take our experience in in-home systems sales, support, and installation and apply it to the smart grid."

The fruits of these aspirations are just now finding their way into Best Buy stores. In the past few weeks, the company introduced electric bicycles at 20 stores in Portland, Ore., Los Angeles, and the San Francisco Bay area (as well as online). It also plans to offer a cool electric motorcycle, the Enertia, made by Oregon-based Brammo, in which the retailer's venture capital arm, Best Buy Capital, made an investment last fall. "An electric scooter is really just a battery and a computer on wheels," Rommel points out.

If they get traction from customers, e-bikes and motorcycles could become an entry point for Best Buy as a purveyor of other electric vehicles — both sales and rentals. "The change that's in front of us right now is the transition from gasoline to electric," says Rommel. "And if you look at the disruption that this transition in technology does to sales channels, it opens up opportunities for companies like Best Buy to begin to participate." The company hasn't made any announcements — and Rommel wouldn't say — but what follows could be small neighborhood electric vehicles like the Peapod or the Zenn. And maybe even e-vehicle rentals: "We've heard that the Zipcar community is increasingly asking for secondary cars like trucks and vans that you need just once in a while," says Rommel. "So why invest in a really expensive second vehicle when you can get it only when you need it?"

And then there's the service piece — the critical need to help consumers install and maintain all these gizmos. That's where the Geek Squad comes in. Rommel sees the Best Buy unit — the company bought the Minneapolis startup that specialized in repairing and installing PCs in 2002 — as a natural component of its greentech strategy. "We've been the smart friend that helps the consumer do it themselves, or when they need help in the home we'll do it for them. And that has allowed them to make more sense and get more value from the complex products you put in the home. From a consumer's point of view, if one device that connects to my home area network that does home energy management doesn't work, who do you think they're going to call? Geeks make high-tech house calls, and that is a tremendously valuable asset in a home environment that's becoming increasingly complex."

The story can potentially spin out from there. If Best Buy can garner a following of greentech-minded consumers, the company could play a pivotal role in working with utilities, product manufacturers, and others to design consumer-friendly products — just, as I imagine, it already does for everything from cell phones to flat-screen TVs — along with the technologies that integrate them, leveraging the smart-home communications standards that are beginning to emerge. There's potential for the company to help accelerate markets.

It's a compelling story line, to be sure, but equally important is that it illustrates the potential for incumbent companies to be key players in advancing green technology. While cutting-edge innovation will likely come from countless start-ups, it will be up to the mass merchandisers to accelerate market uptake beyond the green devotees and early adopters.

In the case of Best Buy, it appears to be an early adopter itself, potentially gaining a competitive edge as the green economy truly fulfills its promise.

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The 'Gigaton Throwdown' and the Big Hairy Audacious Question

2009-06-24T07:05:36-07:00

Some of my favorite questions begin with the same four words: "What would it take..." What follows those four words can be just about anything, as in: What would it take to ... make solar energy as cheap and efficient as fossil fuel-based electricity?... routinely build zero-waste factories?... recycle 90 percent of the waste in my city within five years?... make organic foods cost-competitive with conventional ones? ... make airplanes operate on electric power? ... create zero-energy low-income housing? And so on.

Such big, hairy audacious questions get past the ideal to the real, looking at the specific changes in technologies, policies, capital flows, and cultural norms that would be required to achieve a goal.

Sunil Paul has asked one such audacious question — and answered it, too. His Gigaton Throwdown report, released today, asks: What would it take to aggressively scale up clean energy to have a major impact on job growth, energy independence, and climate change over the next 10 years? Specifically, the report examines what it would take "to reach gigaton scale for nine technologies currently attractive to investors."

To attain gigaton scale, a single technology must reduce annual emissions of carbon dioxide and equivalent greenhouse gases (CO2e) by at least 1 billion metric tons — a gigaton — by 2020. For an electricity generation technology, this is equivalent to an installed capacity of 205 gigawatts (GW) of carbon-free energy (at 100% capacity factor) in 2020.

The good news, the study concludes:

Eight of the nine technologies that we analyzed are capable of aggressive scale-up to avoid at least 1 billion tons of carbon dioxide equivalent emissions (CO2e) reductions by 2020. Of these nine, there are seven — building efficiency, concentrated solar power, construction materials, nuclear, biofuels, solar photovoltaics, and wind — that are ready to scale up aggressively today. One, geothermal, can scale up fully after an intense period of research, development, and deployment of pilot plants for new engineered geothermal systems. Combined, these eight technologies can meet over 50% of new global energy demand with reliable, clean, low-carbon energy and would avoid over 8 gigatons of CO2e reductions globally.

The bad news: Annual investment in these technologies must grow more than threefold in the next 10 years to make good on climate stabilization goals.

The Gigaton Throwdown project began two years ago, when Paul — part of a wave of successful tech entrepreneurs who found their way to cleantech after the one-two punch of 9/11 and the dot-com bust — heard a friend say, "You know, you clean technology guys could make a bunch of money and not make that big of a difference." As Paul told me recently, "It struck me that, 'Wow, he's right. Many of these technologies could increase by a factor of 10 and I'd do well, but it just would not make that big a difference.' That essentially started a quest on my part to find out what does it take to really make a difference."

A big part of the challenge was creating a framework: How do you think about a problem of this magnitude? The notion of gigatons, says Paul, "made a lot of sense because one gigaton per year is enough to make a major difference by 2020. We chose an amount that matters and we chose a time frame that's relevant to entrepreneurs and investors."

Paul engaged dozens of people — the mailing list of people connected to the project listed more than 130 names, including venture capitalists, academics, entrepreneurs, lawyers, policy makers, nonprofit leaders, and corporate types from utilities, energy companies, Wall Street investment houses, engineering firms, and others. A group of post-docs at the University of Michigan and Stanford, and faculty at Drexel and Berkeley did a lot of the heavy lifting.

Their report (download - PDF) looks at nine "pathways" that could achieve gigaton scale. One of the pathways, wind power, was found to be already growing fast enough to achieve gigaton scale.

The wind industry has been growing at an annual rate of 28% over the last decade and will soon reach 100 gigawatts (GW) of installed capacity globally. At currently projected growth rates, it will exceed half a terawatt (TW) of installed capacity by 2020 and deliver close to 2 gigatons of CO2e reductions. Efficiency technologies, solar, biofuels, and nuclear all offer solutions that have been tested and deployed and can scale more rapidly than the current projections. These are not laboratory curiosities. They are active technologies that are supplying power in multiple markets. With sound policy support, they will do much more.

Meanwhile, another technology, plug-in hybrid electric vehicles (PHEVs), was seen to face "severe challenges to achieving massive scale in the near-term."

To reach the gigaton target, the [auto] industry would need an estimated 300 million PHEVs on the road in 2020. This is equivalent to the total number of new cars to be added to the fleet worldwide in the next 10 years. While perhaps technically feasible, the disruption to current operations, the junking of existing vehicles, and the sheer amount of capital needed for this transition make this pathway infeasible by 2020 in our estimation. We do not include PHEVs in our gigaton projections.

What would it take for technologies reach gigaton scale? In a word: policies. At least, that's the principal conclusion of the Gigaton Throwdown report. And that makes sense, to a point. The Obama administration and Congress — not to mention their counterparts in other countries — are focusing on energy and climate issues like never before. This is a time for policy makers to step up with the right kinds of laws and incentives at a scale sufficient to make a difference. The report urges a range of policy prescriptions: long-term stable carbon pricing, loan guarantees, tax credits, government purchasing, renewable energy standards, fuel standards, efficiency standards, and more — a lengthy list that has long comprised the wish list of the clean-energy community.

But it's not all about government — and it's not even all about money. The markets for clean technology involve a coordinated effort in three principal areas: technology, policy, and capital. Each of these plays a role in scaling technologies, clean or otherwise, and each of these "levers" must be pulled in proper sequence so as to create sustained, orderly markets that can exist without subsidies. Oh, and education, too — lots of it, to encourage legislators, business executives, investors, and voters about these critical needs.

"We sort of already get the technology pieces of it," Paul responded when I pointed this out. "And we know there is a lot of capital sitting on the sidelines that is ready to invest given the right kind of long-term opportunity." What's needed now, he says, is political leadership and action.

"The single most important action to direct this flow of capital is stable policy that establishes a meaningful price on carbon," he explained. "This will encourage investment across the clean energy sector and allow capital to flow to the most cost-effective technologies."

There's no shortage of capital needed: The eight technologies at gigaton scale represent an investment opportunity of over $5 trillion dollars over the next 10 years, according to the report. At this scale, says Paul, clean energy — including efficiency improvements — would meet close to two-thirds of the new global capacity requirements in 2020.

I'm not able to quibble with such figures — or the overall strategy, for that matter. In fact, despite some skepticism about the approach, I like the overall vision. Thinking in gigatons should become the new metric for considering technologies, policies, and investments. Paul says that at least two companies — Serious Materials, a green buildings materials start-up based in Silicon Valley, and Novozymes, a Danish company focusing on biofuels and other "bioinnovations" — have already started doing so, with others to follow. Paul says his own investment firm, Spring Ventures, is doing likewise.

If that's the case — if "gigaton-scale" becomes a lens through which innovators and policymakers view their work — the considerable efforts of Paul and his colleagues will represent a valuable contribution to moving clean energy technology forward to achieve the scale and speed it deserves.

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Will Radical Transparency Save the Earth?

2009-06-16T20:25:41-07:00

There's a growing school of thought that unfettered information about the environmental impacts of our world will smoke out the bad guys and help the good guys win.

I wish it were that simple.

I've just finished reading Ecological Intelligence, the new book by Daniel Goleman, whose 1997 bestseller, Emotional Intelligence, helped broaden our thinking about what it means to be "smart." (It's not the IQ test, stupid.) Now, he's turned his sights on the environment — specifically, the quantity and quality of information available about the environmental impacts of the things we buy. His highly readable book describes how the lack of good information belies the hidden impacts of our purchases — the way they are sourced, manufactured, used, and disposed of when they are no longer of use.

Goleman calls for "radical transparency," a term I've been hearing increasingly lately, one of those coinages that sneaks up on you en route to becoming a full-fledged meme. Goleman didn't invent the term — it's been around for some time — but it is a central theme of his book: the virtuous circle that develops when companies, voluntarily or not, lift the veil of secrecy to reveal the ingredients and sources of their products, enabling consumers to make smarter choices, thereby moving markets toward less-harmful products. That cycle, argues Goleman, can occur only when we fully exploit the full arsenal of technologies and human networks:

Psychologists conventionally view intelligence as residing within an individual. But the ecological abilities we need in order to survive today must be a collective intelligence, one that we learn and master as a species, and that resides in a distributed fashion among far-flung networks of people. The challenges we face are too varied, too subtle, and too complicated to be understood and overcome by a single person: their recognition and solution require intense efforts by a vastly diverse range of experts, businesspeople, activists — by all of us.

I can't argue with the premise, but my 20 years of watching the green marketplace leaves me, well, unsold.

Like Goleman, I am a steadfast believer in the power of transparency: the more we know, the smarter decisions we can make. But I'm more skeptical than Goleman about how willing and able consumers are to actually harness such information to make changes in the way they shop and live. At least, not at the scale and speed needed to transform the marketplace toward one that embraces sustainability, in all its many forms.

Here's what I see as the central flaw in Goleman's case: While he is correct in stating that the complexity and sheer number of products and manufacturing processes requires the collective intelligence of the global village, actual shopping choices are still made at the individual level. And it's here that saving the Earth often takes a back seat to simply saving the day.

It's been almost exactly 20 years since the first-ever survey of Americans' attitudes toward making green purchases, by an outfit called the Michael Peters Group, told us that a whopping 89% of shoppers said that they were concerned about the environmental impact of the products they purchased. And nearly as many — 78% — said that they were willing to pay as much as 5% more for a product packaged with recyclable or biodegradable materials compared with its conventional counterpart.

Since that August 1989 survey, dozens of market researchers have unearthed similarly tantalizing findings describing consumers' interest in aligning their purchases with their environmental concerns. But behind those impressive numbers are some conditionals that aren't always picked up. They sound something like this: "Yes, I'd happily pick the greener product — IF it comes from a brand I know and trust, IF I can buy it where I currently shop, IF it is at least as good as the product I'm currently buying, IF it doesn't require me to change habits, IF it doesn't cost more, and" — this last one is significant — "IF it is somehow better — for example, that it lasts longer, performs more effectively, saves money, is healthier for my family, or will be perceived by others as cool."

That's a pretty high bar to clear. The result is that while the research data haven't changed much over the past 20 years — neither have most consumers' purchases.

Can radical transparency change this? Admittedly, things are different now. Companies are opening up — some voluntarily, others less so — disclosing more about their ingredients and supply chains than ever before. Technology is helping too: the myriad blogs, widgets, websites, and apps, and the networks they enable, are allowing more information to be shared faster and more effectively than ever before. An emerging era of Environmental Product Declarations is upon us, using an ISO-blessed standard for reporting life-cycle impacts. Everyone from Washington to Wal-Mart are demanding companies to provide more information about the environmental (and health) impacts of what they do, and much of the information that results is being made public.

Says Goleman: "These new approaches to managing information herald a coming flood of data about the heretofore unnoticed consequences of a host of common ingredients in everyday products. What had previously been successful brands may be in danger of becoming tainted in our minds."

But content is of little use without context. Goleman and I are both fans of a website called GoodGuide, in which a team of researchers and credentialed experts have pulled together millions of data points about thousands of products, on everything from toxic ingredients to the climate policies of its manufacturer. It makes comparing products easy, providing a high-level view for those who want to know simply "Is it good?" and a deeper dive for those wanting the gory details. GoodGuide's growth trajectory during its roughly 14 months of operation suggest that there's a hunger for this information, and that's encouraging.

Says Goleman:

Radical transparency promises to create a marketplace mechanism that takes the consequence of shoppers' choices to scale: each individual purchase, aggregated with all the others, becomes tantamount to votes on the nature of the goods they buy. As businesses respond by making more of the improvements that shoppers want, shoppers can feel empowered by seeing that their ethical choices matter.

In reality, this positive feedback loop hasn't worked very well. On the one hand, when it comes to green business practices, many companies are walking more than they're talking — that is, they're making more green improvements than they're taking credit for. One reason is that many of their green achievements are about "doing less bad" — using fewer toxic ingredients, creating less waste — which are tough stories to tell. Moreover, a lot of their most significant efforts don't end up directly in the products or packaging — they're embedded in their suppliers, perhaps far upstream — or aren't part of the value proposition for those products. (If I'm buying potato chips, should I care that the potato processors are recycling their rinse water, thus saving millions of gallons of water and hundreds of thousands of dollars a year? Or do I just want a salty, crunchy underpinning for my guacamole dip?)

Moreover, these things aren't being done so much for the planet as for profits; the fact that it has a positive environmental impact (or, at least, a less negative one) is a happy outcome. Does consumer power born of radical transparency play a role in spurring companies to make such changes? Likely not.

The same is true with one of the stories Goleman tells, about how Procter & Gamble did a life-cycle study of several of its products, measuring their impacts at seven stages, from materials selection through manufacturing, use, and disposal. When they plotted the various impacts on a 3-D bar chart, one of the bars loomed far longer than any other: the home-use stage of liquid laundry detergent — specifically, the energy used when people do their wash in hot water. The result, Tide Coldwater, has significant potential: if everyone in the U.S. used it, we'd reduce household energy use by about 3 percent.

Neither radical transparency nor consumer concerns about hot-water use had anything to do with this move. No one told them to do it. It was simply good business: a win-win-win for the company, their customers, and the environment.

That's where Goleman's thesis falls short, discounting that change happens fastest when there's something in it for everybody. Sure, increased information will get some consumers to change a little, prodding manufacturers and markets along the way, but unless companies make products perceived to be better, however that's defined or measured, and can make money doing it, we won't see wholesale change at the scale required. And all of the data in the world won't get mainstream consumers — the 80% or 90% who aren't true-blue green consumers — to become part of the solution.

Note: Daniel Goleman's response can be found here.

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Intuit Helps Small Business Capture a 'Green Snapshot'

2009-06-07T18:13:54-07:00

Can the company that tamed financial accounting do the same for carbon accounting?

That's the aim of Green Snapshot, a just-launched free service of Intuit, the company that makes popular financial management software like Quickbooks and TurboTax. Snapshot is aimed at the same market as those products: millions of small and midsized companies, few of which have the time, temperament, or temerity to calculate their company's carbon footprint, let alone take action to reduce it.

The program is fairly straightforward: It automatically mines your Quickbooks data, culls the various payments you've made, and taps an online database that assigns a rough carbon equivalent to each of the payees. Based on that information, it instantly creates a carbon footprint analysis, along with a set of recommendations of ways to lower it.

It's simple and quick. Did I mention that it's free?

At first blush, Intuit may seem an unlikely source of such a program. But if you think about what Quickbooks and similar programs do, it makes sense. In essence, those financial management programs take a jumble of business information (expenses, payroll, income, payables, receivables, etc.) and organizes it in the form of income statements, balance sheets, budgets, and other documents. The goal: understanding your finances in order to help you manage your money and your business more effectively.

Snapshot does the same, taking disparate business information about purchases and activities and organizes it. The goal: understanding the parts of your business that have the greatest contribution to global climate change in order to help you manage those activities and your business more effectively.

The idea for Snapshot began in 2007 when Rupesh Shah, Director, Corporate Sustainability at Intuit, who joined the company eight years ago with a freshly minted MBA from Northwestern University, was tapped for Intuit's first environmental post. Shah had worked in product development, which turned out to be a good fit: The company wanted someone who could mesh improving the company's footprint and engaging its workforce with the potential to develop new products.

That last part was key. "We could do a lot of stuff with employees, or supply chain, or packaging, but that wasn't going to make a big difference," Shah explained to me recently. "Where we could make a big difference was from a customer-facing perspective. So once we started to throw some examples out about what Intuit could do and what opportunities our customers could have around green, then [senior management] started to get it, and then they started to invest in it."

Shah saw an opportunity to help small businesses, Intuit's core audience. "Everyone recognizes they're very important in the environmental game but few people have been able to really engage them."

He got that right. Since the dawn of the green business movement, small and midsized firms have been largely left out of the picture. Regulators and activists have focused on large industrial players — the ones with the spewing smokestacks, drainpipes, and dumpsters — all but ignoring the roughly 98 percent of the companies around the world that have under 100 employees. With the exception of a relative handful of green business programs sponsored by local governments and chambers of commerce (most of which have pretty low barriers to entry), there are few robust and affordable resources to help the countless printers, dry cleaners, parts manufacturers, warehouses, hair salons, restaurants, and butchers, bakers, and candlestick makers that are the backbone of most countries' economies.

Shah also understood another key: "The key hypothesis I had was that in order to get them in the game we had to make it super easy for them."

Along the way, Shah met Michael Gelobter, founder of Cooler, a company I profiled in 2007 that utilizes complex life-cycle databases to provide an economic model, rather than an engineering-based one, for determining the climate footprint of a given purchase. It's a blunt-instrument approach that's cheap and fast — and yields pretty accurate data.

Cooler's database became the engine for Snapshot. As Shah explains: "Snapshot reads your Quickbook data, pulls every dollar the business has spent over the past twelve months, and works with Cooler's economic input-output matching engine. It looks at the payee and the vendor of every transaction and tries to match it to the closest of about 1,000 carbon categories that the Cooler engine has. And for each of those carbon categories there's a carbon intensity — emissions per dollar spent." The result is a report detailing a company's carbon footprint and cost-effective opportunities to reduce it.

Presently, the system typically matches about 8 of 10 transactions. The report you get shows which transactions weren't included in the carbon footprint calculation. In the coming weeks, Intuit plans to add the ability for users to link those unmatched transactions to the Cooler engine, and each user's contribution will help make the system smarter for everyone.

I asked Shah, what's in this for Intuit? Is there a business model here that the company hopes to exploit?

"We have a business model that we're testing," he responded. "The savings engine has a bunch of actions that we recommend. About half of the actions are behavioral — clean your HVAC, drive smarter — and about half involve buying something — an Energy Star computer, or some other greener product." Intuit is planning to point customers to retailers and earn affiliate fees, though Shah quickly noted, "We haven't made a penny yet, and I don't think that we're going to make any meaningful money any time soon."

Beyond that, Shah hopes Snapshot will help small businesses to communicate their environmental achievements to their own customers. "I was struck when I was interviewing small businesses, how many of them were trying to get their customers to see that they're doing something green. But there's no real authentic way to message that." Shah believes Intuit can play a role in providing "a little bit more transparency and legitimacy for those claims around green."

Will it work? Hard to know — the product is barely a couple weeks old — but you've got to like the strategy: a free add-on to a popular product that provides genuine value to customers and, just maybe, to Intuit itself, all the while burnishing the software company's green cred.

As Shah put it: "Our goal in this was not pure charity or philanthropy. It's to build a tool for customers that they would find valuable, help increase the reputation of Intuit, both as a corporate citizen but also from an innovation perspective, and to try to monetize this. We'll see."

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The Green Future of the "New GM"

2009-06-02T22:31:44-07:00

What to make of this week's bankruptcy filing by General Motors? The beginning of the end? The end of the beginning? A death? Rebirth? Something in between?

Given the months-long anticipation of this development, much already has been written and said, and many fingers pointed. GM, as Paul Ingrassia recently opined in the Wall Street Journal, made "decades of dumb decisions." And while there's truth to that, GM, Chrysler, and the other automotive companies didn't create this mess by themselves. It took a village — unions, consumers, regulators, and assorted others — to bring the car companies to their knees.

What of the environmental community? That term, of course, is a loose one, given that this "community" rarely speaks with a singular voice. As a rule, environmentalists have long been harsh critics of GM, citing the gas-guzzling Hummer, the company's participation in an industry lawsuit against California's regulation of carbon dioxide as a pollutant, its longstanding opposition to government-mandated fuel-efficiency regulations, and that "fact" that it "killed" the electric car. Of course, it wasn't just GM. Many other car makers — foreign and domestic — sided with GM on the lawsuits and the regulatory stance, marketed gas-guzzling behemoths, and dragged their collective feet on developing alt-fuel technologies. But the iconic GM got the brunt of the activists' criticism.

Today, many of these criticisms are nearly moot. GM reportedly has found a buyer for Hummer, something it has been trying to do for the past year. Several weeks ago, the White House proposed the first federal standard for greenhouse gas tailpipe emissions, and said it would harmonize those standards both with California's proposed "Pavley" emissions standards and with national corporate average fuel economy standards. And, of course, GM has been working for more than two years on its revolutionary Chevy Volt, an "extended range" electric vehicle that's received high praise from activists and engineers alike. Even with the bankruptcy, the Volt remains on track to hit the market at the end of next year.

In my recent book, I chronicled how GM began changing the conversation with the environmental community, beginning in late 2005, as the company promoted biofuels as a potential alternative fuel. In late 2006, GM leaders briefed a group of environmentalists about the Volt, even before it unveiled the car to the press, helping to ensure a group of supportive voices at the car's debut in early 2007. (Remarkably, the greenies kept their promise of confidentiality: There were no leaks.)

Over the past year, and especially over the past six months, GM stepped up its outreach to the major environmental groups, engaging them several times in conference calls and face-to-face meetings, seeking their support during the federal government's deliberations over its fate. GreenOrder, the sustainability strategy firm with which I am affiliated, helped facilitate many of these calls, which included Elizabeth Lowery, GM's Vice President, Environment, Energy, and Safety Policy, and — on two occasions — Rick Wagoner, GM's now-vanquished CEO. The calls offered an opportunity for GM's leadership to engage directly with one of its key stakeholder groups to describe its vision and plans, field questions, and listen to concerns.

I was struck by the civility of the whole affair, as two battle-scarred warriors — Big Auto and Big Green — came together, if not as friends, at least as colleagues with shared goals. The enviro leaders were surprisingly supportive — surprising, that is, because of the animosity and lack of trust that had grown and hardened over the years between the two camps. The activists offered support and encouragement to the auto maker. It was heartening to witness the rapprochement, though in the end, it may have been too little, too late.

But those conversations may yet prove their value, as the "New GM" emerges in the coming months. Before the economy tanked last fall, GM seemed to be "getting it," shifting its focus toward vehicle electrification and renewable fuels for the vehicles on its drawing boards. Its R&D leaders were pondering a world in which there could someday be 2 billion vehicles, roughly twice as many as today, and what that might mean for safety, road congestion, and the environment. They were designing prototypes of small neighborhood electric vehicles. And they were thinking about the second and third generations of the Volt technology that will follow in 2011 and beyond.

No one really knows what form the New GM will take, of course, but from what I can tell, all these efforts will continue. Earlier this week, on the day GM filed its bankruptcy petition, Beth Lowery sent an email to her network of environmental leaders and other stakeholders, offering her perspective of what the filing meant for the car company's future. It said in part:

The New GM will focus on reinventing not just ourselves, but transportation systems around the world. An essential starting point is vehicle electrification, including our new advanced battery lab in Warren, Michigan, where we will continue to develop battery technology to support electric vehicle programs such as the Chevrolet Volt. Also, we will continue to work with partners to develop the infrastructure necessary to support advanced technologies, from flexible-fuel vehicles to urban electric vehicles.

I'm encouraged by that. While it will take months, if not years, to see whether and how the New GM will survive, let alone thrive, there are rays of hope amid the corporate carnage. And while the cynics and skeptics may deride the taxpayer-funded New GM as "Government Motors," I still have high hopes that in the coming years, it actually could stand for "Greener Mobility."

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The New Normal and the Need for "Radical Evolution"

2009-05-18T22:45:49-07:00

This morning we launch Greener By Design, our second annual conference on green product design. As the show's host, I've pondered how to introduce the event this year, given all of the economic turmoil. Has the environmental aspects of products and materials been back-burnered given the economic turmoil? Have companies abandoned the luxury of thinking about the green aspects of their projects? Has saving the planet been given a back seat to saving the day?

As I've looked at the twelve months that have passed since last year's conference, a lot has changed. The economy, for starters. One year ago, we were in a mild recession, though most of us didn't yet know it, and the banks were still assumed to be rock-solid pillars of the community. Few had heard of "credit default swaps." Bernie Madoff wasn't yet a household name.

Energy prices have changed in the past twelve months. Oil and natural gas are about half the price they were back then. Corporate budgets have been cut to the bone, and some bone has been nicked away, too. Consumer spending has gone into a tailspin. There's far less appetite for luxuries and frills; it's back to basics.

And, of course, the politics have changed dramatically. There's a new regime in Washington, D.C., and it "gets" the link between a healthy environment and a healthy economy.

But for all of this, much remains the same inside companies. There's a strong need to cut costs and improve efficiencies. There is pressure to reduce energy costs and climate impacts. There are the growing calls for transparency and accountability about a company's environmental "footprint," especially within business-to-business supply chains. Technology marches on, with new advances in energy, materials, and other green and clean technologies. And there's the continuing need to innovate — to improve what you're already doing and to come up with the Next Big Thing.

The bottom line: product innovation and environmental sustainability remain high on corporate agendas.

In prepping my remarks to deliver this morning, and to test my theory that the greening of products continues to grow, I scoured the headlines on GreenerDesign.com, one of my company's websites. I picked out a dozen stories:

It's interesting to note that all of these stories have been reported in the past 75 days — since early March. The greening of products seems alive and well, economy notwithstanding.

True, none of these is earth-shattering, but what product developments truly are? Even the leading automotive companies, which are undergoing a dramatic (and painful) transition to an electric-powered world, are doing it incrementally. That's how progressive companies address environmental change — with what Angela Nahikian, Director of Global Environmental Sustainability at Steelcase, the global contract furnishings company, calls "radical evolution." That pace of change may seem slow to outsiders, and even to some insiders. But that's how transitions happen in big business.

How companies are transitioning to greener designs will be the focus of the 30 or so speakers and sessions at Greener By Design. One thread of the conference — whose subtitle is "Greener Products for Leaner Times" — is how companies should operate under what is being called "The New Normal": the economic conditions and social attitudes that have shifted as part of the financial turmoil — and in some cases, well before that.

For example, for years, we've been seeing a move toward what I call "relocalization" — the repatriation of food, energy, and commerce to local communities. In an age of toxic toys, tainted food, and what Thomas Friedman has dubbed petro-dictators, people are taking increasing comfort in knowing where their stuff comes from and how it's made, and by whom. They want to know the source of their food, that their fuel and household energy isn't supporting dictators or blatant polluters — and the supply won't be cut off or manipulated willy-nilly. They want to know that the merchants and manufacturers they patronize aren't shipping jobs overseas, and that the banks where they do business are investing their money locally. (Michael Shuman covered much of this nicely in his 2006 book The Small-Mart Revolution.)

There's also a reprioritization taking place: People are rethinking what's really important, and what it means to "live well." Turns out, it's having more toys requires having more debt. There's a growing resurgence of living within one's means, of being more self-sufficient. There are more people taking up sewing, knitting, and canning — and not just women, or those with low incomes. And more vegetable gardening, including one famous one at 1600 Pennsylvania Avenue.

Amid all this, people are reconnecting, responding to a sense that they have lost touch — with their communities, their planet, each other.

Given these trends — relocalizing, repriortizing, and reconnecting — how do companies think about their next generation of products and services? What are the new designs — of products, but also of business models and systems of commerce — that will align with The New Normal? And how will tomorrow's products be not just greener, but better?

I'm looking forward to the conversation.

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Clean Technology and the Aroma of Emerging Opportunity

2009-04-28T22:27:37-07:00

I'm writing this from Northern California wine country, where I've come for my annual infusion of hope.

No, it's not an alcohol infusion, though there's some decent vintage flowing. The hope comes from the conversations I've been having with a collection of venture capitalists, entrepreneurs, and corporate innovation leaders, at an annual gathering convened by VantagePoint Venture Partners, the cleantech venture fund to which I am an advisor. Each year, this event reinvigorates and reminds me why I love what I do for a living: The copious innovation and ingenuity taking place in the emerging green economy by companies both large and small.

This is no conclave of companies that are "going green" or "greening up." The businesspeople present here in Napa are at the center of a revolution that even some of them aren't yet able to clearly see: a mash-up of energy technology, information technology, building technology, vehicle technology, material technology, and water technology — and the products, services, and businesses that stand to transform our lives over the next decade or two, just as much as, say, the Internet has.

This is hardly the only cleantech conference I attend during the course of a year, but it's the only one that includes a frank and open discussion among a small group of big companies about their perspectives and strategies on cleantech and the green economy, and how they're addressing them. The participants aren't corporate marketing executives or even chief sustainability officers. Rather, the representatives of the global companies present have titles like Vice President, Strategic Planning and Development; Senior Vice President of Emerging Business; and Chief Innovation Catalyst. They are joined here by the founders of two dozen or so entrepreneurial cleantech companies.

As much as I love hearing from the entrepreneurs — each one's presentation offers a cram course in a technology or trend, as well as some innovative approach to addressing it — it's the big corporations that I find most interesting. The VantagePoint event is a rare opportunity to get past the marketing pitches and well-scrubbed executive talking points to hear the real skinny: how some of the world's largest companies are thinking about sustainability and harnessing it as an foundation for innovation.

It's nearly impossible to relate the full measure of the discussions, but I thought I'd share some tidbits about several companies, including a chemical company, a consumer products company, and a major retailer. The rules of engagement for this event are what's known as the Chatham House Rule — in essence, that the information discussed can be shared, but not the individuals' names or affiliations. The Chatham House Rule typically governs meetings where people want to share information openly and speak freely, but not beyond the immediate group.

First, the chemical company. For several years, it has been engaged in an aggressive effort to do with biology what chemistry can't do, creating products that are manufactured at lower temperatures and with far fewer toxic inputs. The company says it is pursuing what it dubs "unique, disruptive science with significant market opportunity." In the lab are a range of biofuels, biomaterials, bioadhesives, and more. For example, there's a carpeting fiber made from corn instead of petro-based nylon that requires nearly a third less energy and emits nearly two-thirds fewer greenhouse gases. It is being manufactured at a repurposed polyester factory. The demand is there from both consumers and corporate buyers, the company says, though pricing is a challenge: With oil prices down, the cost of nylon has dropped by nearly two-thirds over the past year, making the bioproduct less competitive than the petro-based one. Still, the company is optimistic over the long term. "We see many places where biology can win over chemistry."

Next up, the consumer products company. It has created a set of sustainability design principles for all of its thousands of products — "supported by sound and transparent assumptions, good science, and substantiated by data" — and has amped up its commitment to make these products with significant environmental improvements and no price premium to customers. And at the same time, it aims to reduce its overall emissions of carbon dioxide and waste, and use of energy and water, by 20 percent within five years.

Along the way, the company is asking the tough questions: Given that almost all of its packaging is petroleum-based, "How do we make packaging from alternative, renewable material" — and do so without adding costs? There are promising experiments — in one case, working with a Brazilian company to make plastics from sugar.

Many of these innovations are coming from new kinds of partnerships, in which it is working with others to find breakthrough green innovations. That's a new approach for the company, and one it views as its path forward. "Companies that don't adopt an open innovation approach won't be competitive in 10 to 20 years," says the executive. "You have to look outside your walls."

Finally, the retailer. It's probably not the one you think — this one hasn't been particularly visible in the green world — but its ambitions are significant: It wants to become the hub for your home energy needs. For this retailer, that involves selling a vast range of emerging products: electric bikes and scooters, maybe even electric cars; home energy optimization products, including both hardware and software that monitors your energy use and helps you control it; solar panels and other renewable energy products.

And services: shared-use vehicles, solar installation services, home energy audits, and the like. This retailer views a multi-billion-dollar opportunity in becoming the go-to place for homeowners and small businesses to save energy and costs and to buy and install cutting-edge green technologies into their homes and offices.

What these three companies have in common, other than their vast global reach, is a strong vision of where the world is going and what's needed to succeed in the coming years. They understand that markets are shifting, as technology inexorably marches forward. Combined with growing environmental and energy concerns and emerging markets around the world, it creates an unparalleled opportunity to manufacture and sell products with more benign inputs and outcomes. And they're doing this amid one of the worst economies ever, pushing forward with the understanding that tough times often create the best opportunities to advance breakthrough change.

Their efforts are buttressed by innovations coming from hundreds of start-ups that are creating the next-gen building blocks of the green economy — ambitious entrepreneurs, many with awesome track records of creating transformative technologies and companies. Some of them are here, sharing their innovations with their larger corporate brethren, both parties looking for the Next Big (Green) Thing.

There's a palpable sense of excitement here in Napa, as companies large and small sip cautiously the fine wine of emerging opportunity and inhale the delicate aroma of hope. For the moment, at least, it's intoxicating.

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The Future of Green Product Design

2009-04-22T00:01:00-07:00

We're about a month away from our upcoming conference, Greener By Design 2009, and I wanted to share what's coming and why I think this will be an extraordinary event. I also want to share information about a limited number of unpublished deep-discount registrations I have available for a few lucky blog readers. (More about that in a moment)

Greener By Design focuses on the intersection of product design, innovation, supply chains, and sustainability — how both large and smaller companies are baking environmental thinking into their products and manufacturing processes in a way that makes products not just greener, but better. This year's theme, "Greener Products for Leaner Times," reflects the elephant in the room — the economy — and how companies are aligning green considerations with the need to make products cheaper, lighter, simpler, and more energy efficient.

Suffice to say, this is no mean feat, though part of the problem is perceptual. Most companies still view that designing and building greener products is a costly endeavor resulting in products that are inferior, either in quality or in their ability to be cost-competitive with their conventional counterparts. As we report regularly on GreenBiz.com (and GreenerDesign.com), this is no longer the case. Companies making everything from clothing to cleaners to chips are finding their way.

And it's not just small innovative companies, though many of them are leading the pack. According to a recent survey by the research firm Forrester, a large number of companies are developing greener products, looking at outside factors as well as who within companies are pushing for product changes. Eighty-four percent of the consumer product strategy professionals surveyed said that their companies have environmentally conscious or socially responsible products in development or on the market.

We saw ample evidence of that at last year's Greener By Design (click here for video and other highlights), with companies ranging from 3M to Nike to Xerox — as well as upstarts like IceStone and Method — shared their learning and insights.

That trend has only grown over the past year, as the twin pillars of environment and cost-cutting have led companies to accelerate plans, as Forrester found. Much of the pressure is coming from retailers like Wal-Mart, which itself is ramping up efforts to push suppliers to innovate, reducing or eliminating packaging, making products more energy-efficient, and reducing toxicity — without raising prices. Clearly, this is no longer a "nice to do." It is the future of product design.

This year's event builds on that theme, as well as on last year's success. It includes keynotes from green design master Bill McDonough and iconoclastic entrepreneur Tom Szaky of Terracycle, along with the kinds of panels you'd expect. But also things you wouldn't: a hands-on workshop on innovation, by the renowned firm Systemic Inventive Thinking; small, consultative "guru" sessions with designers and innovators, in which attendees can pose their own design questions and challenges; and an Innovators Showcase, with entrepreneurs doing lightning-fast elevator pitches of their creations. We'll also have products on display from the latest electric vehicle to a new machine that's about to be released across Whole Foods Markets that I can't yet describe. (Click here for the current agenda.)

One of the things that most impressed me about the audience at Greener By Design is the sheer diversity of professionals it attracts. In my opening remarks last year, I scrolled the job titles of everyone in the room across the screen. It was a remarkable assemblage: designers, brand managers, and supply chain professionals, of course, but also engineers, biologists, chemists, and chief marketing officers, among many others. It was that diverse and high-level mix that contributed to the event's success just as much as the program itself.

So, about that discount: Thanks to the generous, record sponsorship we've had this year — from Autodesk, HP, Steelcase, UL Environment, and others — I have a handful of sponsored conference passes for less than half-price of the going rate — sort of my Earth Day gift. I'd like to make them available first to loyal readers of this blog — first-come, first served, and there are only a couple of minor qualifications required for eligibility.

If you're interested, send a note ASAP.

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The Seven Sins of Greenwashing: Is Everybody Lying?

2009-04-15T07:19:24-07:00

An updated version of the 2007 report The Six Sins of Greenwashing has just been released. And like its predecessor, this version offers sensational findings: of 2,219 products making environmental claims that researchers found in North American retailers, "over 98%" committed one of several "sins." The 2007 report identified six such sins. This year's edition adds a seventh.

I suppose that's what passes for progress these days.

First, some background. In 2007, TerraChoice, a Canadian research firm that operates the Canadian government's EcoLogo program, sent research teams into six category-leading "big box" stores with orders "to record every product-based environmental claim they observed." TerraChoice then assessed each of the claims to see if they passed muster — that is, that they were specific, substantive, and could be backed up with some reasonable proof points, among other criteria. All told, out of just over 1,000 products, "all but one made claims that are either demonstrably false or that risk misleading intended audiences."

Late last year, TerraChoice repeated the process, though extended its reach: Its researchers were sent into retailers in the U.S., Canada, the U.K., and Australia. The track record was slightly better: 25 products found in North American stores were deemed "sin-free," says TerraChoice. The trends were similar in the other countries.

At first glance, those findings seem dire and depressing. But much like some of the eco-claims themselves, TerraChoice's report doesn't hold up to scrutiny. What's really going on here? Are manufacturers truly that overwhelmingly misleading? Is just about everyone out there pulling the green wool over our collective eyes? Or has TerraChoice set a bar so unreasonably high that even the most well-intentioned companies can't clear it, and lumped the imperfect claims together with the truly bad ones in order to make its point? In other words, who's greenwashing who?

Truth is, there's a little of each going on.

First, honor is due. TerraChoice has performed a public service here, calling attention to the fact that so many companies are making claims that are anything from fuzzy to fraudulent. The groundwork they've done here is invaluable, even if the conclusions they've drawn from it are, in my opinion, a bit misleading.

At first glance, TerraChoice's methodology seems reasonable. They put products making green claims through their filter that asks, in effect:

Is the claim truthful?
Does the company offer validation for its claim from an independent and trusted third party?
Is the claim specific, using terms that have agreed-upon definitions, not vague ones like "natural" or "nontoxic"?
Is the claim relevant to the product it accompanies?
Does the claim address the product's principal environmental impact(s) or does it distract consumers from the product's real problems?

Products that failed to meet such requirements committed one or more "sins." As you can see, almost every product has done so.

Is the bar too high? Scot Case doesn't think so. "Manufacturers are doing a lot of great things," Case, the TerraChoice executive who headed the study, told me recently. "They are making significant advances. The challenge seems to be that their rhetoric is outpacing the actual improvements that they're making. So, we found all of these products — many of them make wonderfully specific, legitimate environmental claims. And they would be perfect, except that they want to take one more step and make an outrageous claim. And that's why the percentage of products that end up on the sinner's list is so high. It's because the marketers don't seem to know when to stop."

I asked for an example. "A product will make a claim that it contains 30 percent post-consumer recycled content," Case explained. "That's a good, simple claim. But then what they'll do is add on top of that that 'This is the greenest product ever made.'"

I countered that such a statement, should it truly exist, isn't an environmental claim so much as the typical hyperbole that is part and parcel of marketing of all types. It's akin to a mattress company claiming that their product is "Your ticket to a better night's sleep," or a beer company's claim that its product, "Tastes great. Less filling." It's not provable; it's just hype. Consumers are left to use their own smarts to discern the difference.

"I think that the challenge is that in this particular sector, we've got to be particularly precise with our language," responded Case. "Because what we're talking about are things that consumers can't see. When a manufacturer claims, for example, that their product is energy efficient, or that it meets the Energy Star standard, that's not something that I as an average consumer can test. When I'm walking the store down the refrigerator aisle, I don't have some sort of magic device to know if it's really energy efficient or not. So it seems appropriate that a manufacturer should be willing to provide proof and to make that proof widely available for me and other consumers."

(You can listen to a podcast of my entire conversation with Case here.)

Now, before we go further, it should be noted that not long ago, Case bought a refrigerator he believed to be energy efficient, but which ended up uising twice as much electricity as the manufacturer claimed. So, he's got some cold, hard experience here about misleading green claims. However, it sounds to me like he was a victim not of greenwashing, but consumer fraud.

But that's not what much of the "greenwashing" documented by TerraChoice is about. Some of it is about companies like SC Johnson, the maker of such venerable consumer brands as Glade, Pledge, Raid, and Windex, which has taken aggressive measures to reduce the toxic ingredients of its products and processes. Its Greenlist rating system — about which I've written in the past — has been systematically reducing the toxic ingredients and packaging of all of its products since 2001. Greenlist has won a bevy of awards, including honors from environmental groups and a Presidential Green Chemistry Award.

But Greenlist is a self-certified claim — that is, it has not hired an independent third-party organization like Case's to verify the claim. Thus, it's verboten — a "sinner," according to TerraChoice.

I asked Case about Greenlist. "It's a wonderful program," he acknowledged. But, he added, "The litmus test for whether a label was legitimate or not was quite simple: Can a consumer find out exactly what that label means?"

I suspect they can, if they conduct the same 10-second Google search I just did. The top result was a page on SC Johnson's website that provided as much information as I think any reasonable consumer would want or expect, with deeper links for those who want to know more.

The point here isn't to debate Greenlist or anything else. It's that, as I've pointed out before, a lot of what's called "greenwash" is in the eye of the beholder. What for some consumers might be a reasonable and meaningful marketing claim can be seen by others to be a travesty of justice. Sometimes the criticism is justified; often it's nit-picking.

I don't really know how many of TerraChoice's "sinners" amount to nit-picking. That's one of the ironic problems with the study: It lacks transparency and accountability. There are no products named, no sinners shamed. Are the "sins" detected by TerraChoice really all that egregious or, as I suggested last time, are the accused companies more sloppy than sinister? We don't know. Is SC Johnson as big a sinner as the toy company Case described that put its own green seal on a product because it decided unilaterally that wood was a greener choice than plastic? It's hard to tell. We are left with only the sensational factoid — ninety-eight percent! — and not the supporting evidence. We must make up our own minds whether to believe the facts, and what to make of them.

Kind of like some of the "sinners" TerraChoice is trying to fight.

No doubt, countless consumers, already suspecting the worst about companies' green motivations, will accept TerraChoice's findings as gospel — after all, it confirms their suspicions — not bothering to question what's behind them.

In the end, I can't help but wonder which is worse: the companies that aren't being fully truthful or transparent about their claims, or the consumers who will walk away from the green marketplace in frustration, dismissing all green products — the good ones and the rest — as cynical ploys by uncaring companies intended solely at separating consumers from their wallets.

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Earth Day, Green Marketing, and the Polling of America, 2009

2009-04-12T21:34:46-07:00

Here we go again. In the run-up to yet another Earth Day, here is my third annual take on the bounty of polling data on consumer environmental attitudes that seems to hit my in-box this time each year. (See here for the 2007 and 2008 installments.) This year is no different. I've counted more than a dozen different surveys, market segmentations, and opinion polls since Barack Obama became president. By my estimation, that's a record.

I jumped the gun a couple months ago, marveling at how Americans continue to claim their environmental shopping cred, even during horrendous economic climes. ("Why do nearly all of the surveys seem so gushingly optimistic, even during pessimistic times?" I asked. I'm still scratching my head.) But those polls were just the leading edge of the 2009 data wave.

So, what do they all tell us? As usual, a little bit of everything. Consumers are both more willing and less willing to shop green than in previous years. Consumers care more and care less about environmental issues given the economic times. Consumers are willing and not willing to pay more for greener goods. You get the point.

But one thing remains fairly consistent across nearly all of these studies — and most of the ones I've reported on in recent years: Vast majorities of consumers say they have adopted greener habits in their daily lives, and shop for at least some products with a keen eye on their environmental provenance and energy and climate impacts. In other words: the marketplace is getting greener — way greener, if you were to believe the numbers.

You may wish to not believe them, based on your own experiences and observations. I certainly have doubts. Either way, here is a taste of what the studies are telling us about American consumers in 2009:

Consumers are more aware of green issues and are finding practical ways to be eco-friendly while also saving money in today's difficult economic times, according to the 2008 GfK Roper Green Gauge study. Nearly three-quarters (72%) of Americans say they know a lot or a fair amount about environmental issues and problems (up 7 points from 2007) and 28% often seek out environmental information (up 5 points). Seventy-six percent have bought energy-efficient light bulbs and 58% have purchased energy-saving appliances. Consumers are purchasing paper products made from recycled papers (72%), green household cleaning products (64%), and environmentally-safe laundry detergent (57%) despite the fact that they cost more. However, those who say the environment is a greater concern than the economy has dropped from 69% in 2007 to 55% in 2008.
Nearly seven in ten Americans (67%) agree that "even in tough economic times, it is important to purchase products with social and environmental benefits," and half (51%) say they are "willing to pay more" for them, according to the 2009 BBMG Conscious Consumer Report. BBMG found that 77% of Americans agree that they "can make a positive difference by purchasing products from socially or environmentally responsible companies," and are actively seeking information to verify green claims. On the other hand, nearly one in four U.S. consumers (23%) say they have "no way of knowing" if a product is green or actually does what it claims, signaling a lack of confidence in green marketing, revealing what BBMG called a widespread "green trust gap."
The number of Americans who say they almost always or regularly buy green products remains unchanged since last year — at 36%, after tripling the previous year from 12% in 2007 to 36% in 2008, according to Mintel consumer survey data. Cost remains an impediment to the green market's growth. Mintel found the majority of adults are willing to pay "only a little extra" for green products.
More shoppers in North America, Europe, China, and Japan systematically purchased green products in 2008 than in 2007, according to a report by the Boston Consulting Group. In the United States, 16 percent of consumers — one in six — were systematic shoppers for green products in 2008. Some 61 percent said the environment is in a very bad state.
Americans currently have a higher skepticism "about mainstream reporting" on climate change than at any other time in the past decade, according to a Gallup poll. As recently as 2006, significantly more Americans thought the news underestimated the seriousness of global warming than said it exaggerated it, 38% vs. 30%. Now, according to Gallup's 2009 Environment survey, more Americans say the problem is exaggerated rather than underestimated, 41% vs. 28%. Six in 10 Americans indicate that they are highly worried about global warming, including 34% who are worried "a great deal" and 26% "a fair amount." Overall worry is similar to points at the start of the decade, but is down from 66% in 2008 and 65% in 2007.

I'll be the first to tell you that some of this stuff is hard to report with a straight face. For example, according to Roper:

72% of parents discuss the importance of protecting the environment with their children on a regular basis (up 11 points from 2007). Not only are more American families having the "green talk," they are also emphasizing actionable issues. More are discussing recycling (86%, up 3 points), conserving energy (79%, up 5 points) and conserving water (76%, up 7 points). . . . Additionally, 88% of parents say they teach the importance of protecting the environment to their children by example (up 6 points from 2007).

Call me a cockeyed cynic, but I have a hard time believing that eight in ten parents are teaching their kids about saving energy and water, and that nearly nine in ten preach to them about "protecting the environment." (If it was the other way around — kids teaching parents – I might be more inclined to believe it.)

It's also hard to find solace in some of the rosier findings — for example, that 82 percent of Americans say they're still buying green products despite changes in the economy, according to EnviroMedia Social Marketing, or the 2009 Cone Consumer Environmental Survey finding that 34 percent of American consumers indicate they are more likely to buy environmentally responsible products today and another 44 percent indicate their environmental shopping habits have not changed as a result of the economy — when you also learn how utterly confused consumers are about what and who to trust. For example, according to BBMG, Wal-Mart was simultaneously named by consumers as the most and the least environmentally responsible company:

When asked unaided which companies come to mind as the most socially or environmentally responsible companies, 7 percent of Americans named Wal-Mart, followed by Johnson & Johnson (6%), Procter & Gamble (4%), GE (4%), and Whole Foods (3%). Wal-Mart also topped the list of the least responsible companies (9%), along with Exxon Mobil (9%), GM (3%), Ford (3%), Shell (2%) and McDonald's (2%).

And the kicker:

Interestingly, 41% of Americans could not name a single company that they consider the most socially and environmentally responsible.

Any questions?

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Reinventing Mobility: It's Not Just the Cars, Stupid

2009-04-06T21:52:05-07:00

For all the aiding and abetting taking place on behalf of the automobile industry — the transfusions, the transformations, and the TLC — one thing remains constant: It's all about the cars. The quest, as just about everyone sees it, is to figure out how Detroit automakers and their global competitors can build smart, compelling, and reliable vehicles that appeal both to our pragmatism and passions — and do so profitably and more ecologically. That's the basic drill, right?

Well, maybe not. The near-obsessive focus on building greener vehicles — just about every global auto maker is now in a drag race to create an electric vehicle or plug-in hybrid — obscures the bigger challenge, and the bigger opportunity: to reinvent our personal transportation systems in ways that are better in every way — economically, socially, and environmentally.

Consider: It's become dogma in the United States and other developed and developing countries that "Cars give us freedom." Entire generations of Americans have been reared on that assumption. Detroit was built on it.

But cars are a burden: You have to purchase them, maintain them, fuel them, park them, and insure them. If you live in a city and lack a garage, the challenges and costs multiply. They're expensive and a hassle, and they sit idle 95 percent of the time. When you actually use them, there's the challenge of getting around on ever-congested streets and highways. Not exactly "freedom."

What gives us freedom isn't cars, but mobility, the ability to go where and when you want in the way that's most appropriate and affordable for your needs and style. That's true at every point on the economic spectrum. Indeed, in emerging economies, mobility is a prerequisite to sustainability. When people can move freely from hither to yon, they're better able to have a job, trade goods, seek an education, obtain health care, perhaps even explore other places to broaden their horizons.

So, why, in the digital age, when just about every product and service is undergoing fundamental change, if not outright reinvention, is our transportation future still rooted in the mode of manufacturing and selling cars, electric or otherwise? Why aren't the titans of industry reimagining the larger system in which these vehicles operate? As we try to reinvent the auto industry, shouldn't that be part of the equation?

Dan Sturges thinks it should be. "There's a role for auto companies if they stop focusing on making cars and start thinking about enabling people to move."

Sturges has taught me a great deal about mobility, a subject about which he's both extremely knowledgeable and passionate. A former car designer for General Motors, Sturges now focuses on developing community-improving transportation systems — how to marry an array of personal vehicles with public transit while leveraging the latest in digital telecommunications to create integrated and efficient mobility systems. As an entrepreneur, Dan led the effort to invent the first mass-produced neighborhood electric vehicle (NEV), the GEM car, now owned by Chrysler. These days, Sturges is the visionary behind Colorado-based Intrago, a company that makes "size-appropriate transportation options for people to move about local environments." (Full disclosure: I'm on Intrago's advisory board.)

In Sturges' world, all the talk about alt-fueled vehicles — whether from the major automakers or any of the dozens of start-ups, from Apterra to Zenn — is necessary, but hardly sufficient, especially if cities are too congested for these vehicles to get around. That inefficiency is already apparent, he says. "Here in Denver, we have an average 1.1 people occupancy per vehicle. That's a 20 percent load factor. An airline cannot stay in business a week at a 20 percent load factor." And yet, says Sturges, our national conversation on environmentally responsible transportation has us simply transfering all of that inefficiency over to electric vehicles instead of gas-powered ones. The result is a lot of energy wasted to move all those empty seats. Moreover, he says, studies have shown that in some cities as many as 40 percent of the vehicles on the streets are driving around looking for parking. Simply switching to electricity, even from renewable sources, to power all those underutilized vehicles trolling for a place to park won't get us very far, in terms of our energy and climate goals.

So, we'll need not just new types of vehicles, but new types of vehicle systems.

We're seeing some of this already. There's Zipcar, City Car Share, I-Go, and other forms of car sharing and mircorental services, which provide alternatives to car ownership. In Paris, there's Véllib, the system of 20,000 rental bikes and 1,500 automated stations — roughly one every 300 meters throughout the city center — which affords members with low-cost bike rentals (the first half-hour is free) that can be returned to any station. In Ulm, Germany, Daimler has launched Car2Go, a similar system using small NEVs. As the company describes:

The principle is simple yet brilliant: Whenever you need a car, you can book (spontaneously or in advance) one of 200 car2go that are in Ulm. With a minimum amount of effort, an almost free choice of return location, and without fixed costs. That represents modern mobility for us, which improves the quality of life, and sets Ulm in motion.

Vélib, Car2Go, and the car-sharing services represent parts of the larger system Sturges envisions. "Once you start to see the congestion issue, then you can have a discussion of how can we reinvent or rethink the way that we move. And at that point it gets really interesting. This digital revolution — the thing that's enabling the car sharing and enabling our iPhones to become hitchhiking tools — is a really exciting new world, where this three-dimensional web is unfolding around us."

In that three-dimensional web, you might not own a vehicle, but have access on demand to whatever style and size you need — a small NEV for a quick jaunt to the market, a minivan for a family vacation, a slick sedan for a client meeting, a convertible for a nice day, a sturdy pick-up for a trip to Home Depot. The cars might be delivered to you or be available within reasonable proximity of where you need it. The rental rate might adjust based on time and convenience: If you need a vehicle delivered to your door within 30 minutes you'll pay a higher rate than if you're more flexible about where and when you get it. Of course, all of this is as simple as tapping an icon on your smart phone, texting a request, making a call, or showing up at a kiosk.

And it's not just cars. In the "smart multimodal transportation future," as Sturges calls it, there's a world with a diverse array of transportation choices, from shared electric bikes and scooters to private vehicles of all kinds. (Intrago, Sturges' company, offers technology to create such personal vehicle networks.) "You jump from one mode to the next mode," he says. "The future urban traveler we see is more like Tarzan, swinging from vine to vine." You already do that when you take an airplane trip: You drive or take public transit to the airport, fly to another airport, then "swing" to whatever mode of transport is appropriate and affordable to take you wherever you're going. In Sturges "Tarzan" world, we'd do that locally, too. The result: We'd get there with less wear and tear on ourselves and the planet, and maybe faster, too.

The thing is, it makes economic sense. According to AAA (Download - PDF), the typical midsized car costs about $23 a day — every day, 365 days a year — when you factor in a gas, maintenance, tires, insurance, license, registration, depreciation, taxes, and finance charges (assuming driving 15,000 a year). At that rate, your basic two-car garage runs a cool $16,500 a year. Cutting that in half to own just one vehicle can still leave more than enough to afford all the vehicle sharing and mobility services — even taxi rides — that you need.

Of course, there's a cultural mind shift needed for all this to happen. What will it take for consumers to give up one of their family cars? Could owning fewer cars become a status symbol? Could we reach a point where not owning any car is the ultimate in luxury? That cultural challenge seems nearly as big as the technological ones.

And can the big guys — the General Motors and Chryslers — play in this new world of transportation services, or will their laser-like focus on selling cars lead them to become dinosaurs, even if they survive their current travails? I asked Sturges if the Big Three would be really able to turn the ship toward this new direction. "There is so much talent in Detroit," he replied. "I don't think you need a new ship. You've got all kinds of engineering resources and really bright people. But they'll need less of a focus on selling cars, and more of a focus of enabling people to move. They need to move off the idea that people need one car that can go everywhere and do everything. But I don't think you have to throw the whole thing out. I think you just have to be imaginative."

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