Eco-Advantage Blog

February 12, 2008 | Andrew Winston | Comments (0)

Moving Along

{Originally posted here on my blog]

Today I spoke at a conference of small-medium sized moving companies all under the North American Van Lines (NAVL) brand. To put the industry in green context: 20% of U.S. energy goes to moving goods/logistics. And 20% of that – or 4% of all energy – is spent on idling trains and trucks.

NAVL is an old-style business, 75 years old this year. But I heard some new talk from one member who’s been sprinting down the Green to Gold path. John Prager runs Prager Moving in Naperville, IL – 35 employees, one big warehouse, and 10 trucks or so. John has attacked all aspects of his business and used the green lens to create value. Generators keep the trucks warm so movers don’t idle the engines – which they may do for 8 hours in front of your house to make sure the truck starts again. The warehouse has new, lower-energy lighting. Prager offsets 25% of its energy with wind power from Community Energy, making it one of the largest privately-owned renewable energy buyers in Illinois – all at a cost of $250 per month.

John knows these actions are the right things to do and they have reduced the company’s footprint. But John talks passionately about the many other benefits: reduced costs, happier employees, and higher revenues and brand value – Prager has something to market and differentiate itself on in a commodity world (price and quality in moving are hard to compete on).

But here’s the interesting part: John named his program “Moving 2 Green” so he had a marketing hook. Then some colleagues in his NAVL affiliation asked to “join” the program. He didn’t realize he had a program to join. So John said, Sure, but you have to meet a set of criteria. He put together a short list of actions they had to agree to and he’d give them the “official” seal of approval. Cost to colleagues: nothing. But each company needs to agree to steer business to other “Moving 2 Green” movers – it’s a positive network effect.

I love this kind of story. No matter the size, companies discover that green is just better business. John’s colleagues will want to follow, will want help doing it, and then will want credit for it in the marketplace. They’ll want a legitimate “label” on their green actions (by the way, check out www.ecolabelling.org, co-founded by a friend of mine, Anastasia O’Rouke, for an unbelievable list of all the labels out there).

I warned John that soon he may not be moving people – he’ll be spending his life putting his green seal on his colleagues’ operations.

January 23, 2008 | Andrew Winston | Comments (0)

MBAs: Your Future (Green?) Execs

[Originally posted on my site here]

BusinessWeek seems to have taken on the self-appointed role as debunker of green business, which as I’ve written before is an odd switch from the beginning of 2007. This week the magazine takes a harsh perspective on an interesting new survey about interest in green values at work.

PR firm Hill & Knowlton talked to MBA students globally and asked them what factors would influence career and job choice. They ranked the factors by % that said it was “extremely” or “very” important. Here’s the list from the study:

Career opportunities…………………………………95 Corporate culture/working environment………….86 Compensation and benefits package…………….85 Employee satisfaction………………………………84 Quality of products and services………………….75 Financial performance/growth potential………….73 Corporate governance and ethics…………………58 Social responsibility/community involvement…..49 Brand and marketing message……………………48 Environmental/green policy…………………………34

BusinessWeek looked at this and declared “Green Isn’t Gold for MBAs” and pointed out that green stuff is at the bottom. Now, color me optimistic, but I think these numbers — 49% on CSR and 34% on green — are actually pretty high. Of course career opportunities and money are going to be nearly universal; it’s like asking consumers about price and quality versus other considerations — of course they come first. I would expect that very few MBAs would pick on environmental considerations alone.

But I’m amazed that one-third or more of these MBAs consider green as important as those other factors (remember, this is ‘extremely’ or ‘very’ important). And where would those numbers have been 5 years ago? What’s the trajectory on this?

What was interesting, and BusinessWeek does get to this after its sensational headline, was what happened when the questions got more specific. Two-thirds won’t work for tobacco and half don’t want to work for energy or autos — those are just the two biggest sectors in the world. Finally, to cap it off, 1 in 5 American MBAs — and 42% and 38% in EU and Asia respectively — would be inclined not to take an “attractive” job offer from a company with a poor environmental reputation.

If you’re recruiting for top talent, and you’re not tackling green issues, wouldn’t it worry you that 20-40% of your pool of applicants may have no interest in you?

And the numbers may be rising as you look at even younger cohorts. Monster.com did a survey of undergrads recently and found that 92% wanted to work for a green company. They were so impressed by this finding, they launched a green careers website. The recruiting giants are convinced even if BusinessWeek isn’t.

January 23, 2008 | Andrew Winston | Comments (0)

Russia Rising?

[Originally posted on my site here on January 14, 2008]

A couple of weeks ago TIME Magazine surprised many with its pick for Person of the Year…not Al Gore, who they probably figured had run out of room on his mantel, but Vladimir Putin. The story was about the rise of Russia back into the top rungs of global powerhouses.

The choice was interesting to me personally because I had just gone to Russia for the first time to speak to execs in Moscow about greening. At a meeting of industrialists held by the International Chamber of Commerce Russia, a few Westerners presented some perspectives on climate change (Sir Nicholas Stern), the greening of business (me), NGOs and their role (Peter Seligmann, founder of Conservation International), and Russia’s place in the world (James Wolfensohn, former head of the World Bank – Jim and his son Adam were kind enough to invite me along). As you might guess, I was wowed by the company I was in.

There were some culturally fascinating moments – like when a Russian environmental minister basically asked why they should listen to Americans since the U.S. is the biggest emitter (a fair point no doubt). Or the moment where discussion turned to how to build a culture of environmental awareness and get employees – or as they call them in an amazing throwback, “workers” – involved. Someone actually pointed to the works of Lenin on how to deal with workers.

Why do we care about Russia? Well, depending on how you measure it, it’s the 3rd (or top 5) emitter of GHGs. Mr. Wolfensohn cited some remarkable statistics. RAO UES, the utility that produces 70% of the country’s electricity is responsible for 2% of all emissions globally. And one “town” with power generation and smelters apparently has emissions equal to France. Gulp.

My overall impression was one of a country and industries just coming to the green topic. That’s both terrifying and exciting – imagine the opportunity to adopt what the 3M’s, DuPont’s, Toyota’s, and other eco-efficiency mavens of the world have done. But can Russia apply the same lessons? Are the same structures in place that can get all the ‘workers’ on board? Can you follow the same Green to Gold logic and path? It’s unlikely, but frankly, I don’t really know – you need real knowledge of a culture to make that kind of assessment.

The “how” may vary greatly in different cultures, but I suspect the “why” is pretty consistent. The natural world pressures component of the Green Wave is not going away. And going green will be better for business and will allow you to compete. In this case, we made the argument to them was that a country that wants to operate on the world business stage – one that wants to be a world supplier – will need to green its operations.

A final thought from Peter Seligmann really stuck with me. In response to the legitimate complaint that we were representing the worst offenders, he said that, yes, the U.S. doesn’t really have a leg to stand on (and in fact our administration was battling global action in the Bali negotiations while we were in Moscow). The Chinese couldn’t really lead either since they are trying to manage growth and prosperity. So, he said, why not Russia? Why shouldn’t you take the lead? It’s a good call to action for anyone really. And with all due respect to the fast follower business model, isn’t leading a lot more fun?

January 23, 2008 | Andrew Winston | Comments (0)

2008, The Wave Continues…

[Originally posted on my site here on January 6, 2008]

The New Year is always a time for taking stock, looking both back and forward. How did your company handle the shifting sands for business in 2007, the greening of society? Companies across many industry groups were scrambling and strategizing about how to best manage the environmental impacts of everything they do. Green issues were huge in ’07 (see my upcoming strategy e-letter on the crushing flow of media to green issues in 2007 here in a few days).

But 2007 was just the beginning. It was not a fad – or a bad dream for some – but a fundamental shift in how we all do business. Why? Well the Green Wave was a big part of it: the two big forces of the natural world – real resource constraints like water shortages and climate change – and the rising pressure from stakeholders got stronger. But what was the strongest reason to belive it’s not a fad (and one that became much clearer in 2007 )? In short, green business is better business – companies are slashing costs, driving new revenues, reducing risk, and enhancing brand value. Why go back if your business is better?

But the tipping point year is over now and the game is on. So what environmentally-driven challenges and questions will your business face in 2008 and how will you handle them?
I could pick many trends (I believe that most aspects of the Green Wave are getting stronger and still changing fast, even in tougher economic times), but I’ll highlight just a few of the forces that will grow stronger in ‘08 and the coming years.

The “greening of the supply chain” grew legs this past year with Wal-Mart adding its substantial weight to a movement that had been gaining steam for years. The leviathan started asking suppliers to redesign packaging and reduce fossil fuel use, and even demanding more information on exactly how much energy a product used in its creation, from procurement to manufacturing to distribution. The B2B greening pressure means every company will need to track much more data on its operations. This is where we’re headed: a world where every product will carry information with it about how it was made – the energy, water, resource use – who made it and where, how much they were paid, and on and on.

Clearly this won’t all happen in ’08, but it has already begun in earnest. The pressure for more data is part of a larger movement toward transparency in all we do. Dole now puts a sticker on its organic bananas with a farm number on it. Go to Dole’s website and pick the farm number and watch as Google Earth zooms you to a satellite view of the farm itself. This is a fun use of transparency.

Other stakeholders are using the same tools for more critical uses, to expose much more information about where your products, or your energy, come from. Look at Appalachian Voices, a small but very smart NGO that works to combat mountain-top removal mining practices. Put in your zipcode at their site, and see a very clear picture of the mountains that were cut down to power your life. I spoke to Mary Ann Hitt, the director of this group, and for good reason, companies should be nervous about what she and other innovative NGO leaders will do with new technologies. Google is enamored with this kind of interesting use of their tools and has built Appalachian Voices’ data into the popular Google Earth program. Every version includes an overlay of all the mountains destroyed anywhere (along with some other overlays under the “Global Awareness” check-box including WWF maps, biodiversity hotspots, etc).

Are you ready for this level of exposure and expectation of openness?

So next December, when many of your resolutions have fallen by the wayside and you’re not as organized or as on-time as you hoped (I’m shooting to fully adopt the Getting Things Done workflow approach and we’ll see how it goes…), will you be able to say that you made your business better? That your company is on a more profitable path using the green lens? Will you have an action plan to stay ahead of the curve on this critical business issue?

Good luck and Happy (Green) New Year!

January 23, 2008 | Andrew Winston | Comments (0)

Green Cleaning Revolution

[Originally posted on my site here on October 29, 2007]

I’m incredibly excited about cleaning floors at the moment. Ok, stay with me. I spoke at a large convention last week, the International Sanitary Supplies Association. It may not sound like there would be much green action, but there is definitely cutting-edge innovation happening back in the supply chain hidden from view. I saw what appears to be a remarkable green innovation at this conference.

First, full disclosure: This story is about Tennant, a quiet public company that makes cleaning equipment, and they hired me to speak. But I can say that the industry gave Tennant the Innovation Award at this conference– so it wasn’t just me. I also checked this out with some of their test customers, so I’m really just reporting what I heard and saw.

So, here’s the big innovation: water. Tennant just launched a floor cleaning machine called Echo that uses no chemicals at all. The machine oxygenates tap water to split it into an acid and base (alkaline) that are safe to touch, then it sprays the two streams on the floor. In 45 seconds, the two polarized water streams mix and become plain water again. But in the process, the mixture grabs all the dirt off the ground. Sounds too good to be true, but it seems to work. Test customers included the Minneapolis Target Center (where the Minnesota Timberwolves play) and Unicco, a building contractor that services many malls in the Northeast.

I talked to Jay Souza from Unicco, which manages the janitorial services for the malls, and he said Echo actually cleans better than a chemical-driven machine. The floor also dries faster. Most importantly, there is absolutely no safety issue. The thing takes tap water so there’s no handling of toxic chemicals and no safety concerns.

The catch? It costs about $1,000 more (they’re $5,000 machines and believe it or not, there’s a $5B market for these things). The payback period from not having to buy chemicals is in the range of 1-2 years. When I talked to the purchasing guy from Unicco, Greg Zifcak, he said he couldn’t be happier to pay more to avoid all the safety concerns – the short-ish payback was not even that vital. The other small catch: it doesn’t clean every kind of surface or all kinds of dirt (oil-based things like brake fluid are created to resist water). But I got the impression that it cleans the same floors as regular machines. So, there will still be a need for chemicals for many uses…for now. But this innovation covers an awful lot of surfaces out there.

How did this all happen? The CEO, Chris Killingstad, arrived on the scene of this quiet 138-year-old company a few years back. He told everyone that they would no longer be a “non-residential service something, something” (I can’t even remember what their mantra was it was so nondescript). Now, he said, we’ll be an “environmental cleaning solutions company.” Ta-da. That created the mindset for R&D to run free. Borrowing the idea for the technology from other industries and countries (Japan apparently uses these ionized streams for things like cleaning wounds), came up with the idea to use the recombination step as a cleaning process, and went from idea in January 2006 to launch in less than two years.

This kind of innovation is sort of head-slapping in its obviousness – in retrospect. And enormously valuable to the company that can hit on it first.

World, meet the Prius of floor cleaning.

January 23, 2008 | Andrew Winston | Comments (0)

BusinessWeek Moves the Debate

[Originally posted on my site here on October 22, 2007]

Well, it was bound to happen around now. Once every magazine had done a cover story on the wonders of going green (my previous post here), the media had to turn on itself and declare it all a sham. It’s the normal course of things.

BusinessWeek’s cover this week, “Little Green Lies,” certainly tries to be incendiary. The subhead: “The sweet notion that making a company environmentally friendly can be…profitable is going up in smoke.” But dig in and the reality of the article is equal parts insightful and inane/obvious (a bit more of the latter perhaps). And it doesn’t actually say anything all that different than green business writers/thinkers have been saying. If one of the main messages is that it’s not so easy to go green, I can only say, no kidding.

And in a funny turn, BusinessWeek managed the feat of starting the cover parade in January and taking just 9 months to totally contradict itself. But let’s look at a couple of the specific complaints.

First we have the repeated stories of eco-champion Auden Schendler at Aspen Skiing failing to get his management to green light green expenditures. The story seems to be that the ROI was not always enough. On this one, I couldn’t agree more…in part. Yes, any investment in a company competes for cash with all other options. And, yes, looking at pure ROI, some energy efficiency investments won’t look great (they may take 5-10 years or more). But as a reader of Green to Gold knows, I don’t believe that traditional cost/benefit analysis is doing a very good job. It doesn’t take into account intangibles at all.

What’s the value of reducing risk of energy spikes? (By the way, how do some of the ROI calculations from not that long ago when oil was $40/barrel look now?). What’s the marketing value of walking the talk? How will employees feel?

The other point the article brings out is that it’s tough to convince people and move a culture. Not everyone buys it – the story of one manager not believing the high ROI for a project is, sadly, not surprising. This is partly a legacy of green guys in a company not getting business respect. So, again, the idea that this is all hard is not shocking.

But a core criticism in the article – the attack on Renewable Energy Credits (RECs) as a way for companies to offset emissions – is a deeper and much more important question. It’s incredibly complicated how or if RECs create real demand and generate renewable energy. Lowering the costs for wind generators (by paying them the additional value of the REC) should in theory drive growth (Micro Econ 101). But the article is fairly devastating on the scale of the REC vs. the cost of generation. One argument could be that the market for RECs has to grow much more so that the price rises (Micro Econ 101 supply and demand). That would potentially expand production. But the point that a REC today doesn’t exactly mean less fossil fuel today is well taken.

But I focus on another lesson here: RECs and all offsets should be a last resort (no skiing pun intended). First, cut emissions through eco-efficiency. Second, generate renewable energy onsite. Then seek the highest quality offsets.

In the end, this article is a sign that we’re evolving. The author may not realize it, but the piece is telling companies to look at the full value chain environmental impact (not just measure emissions at owned facilities, a mistake Nike makes, according to the author) and measure emissions completely before making claims. I couldn’t agree more.

If I’ve learned a couple things (or strengthened some assumptions) in the year since Green to Gold came out it’s this: we’re just getting started, companies have a long way to go, and it’s not easy. I started reading this article thinking it was so odd as a juxtaposition with the Wal-Mart meeting the other day that really was the starter’s pistol on this movement: strange, I figured, that it’s getting started in earnest right when BusinessWeek declares it over. But the reality is that this article doesn’t match the aggressive title and sub-title – the content is actually a sign that all of this is for real. Only fundamental shifts in how business works cause this kind of scrutiny and warrant tough questions.

This piece is actually making the case for a main arm of the Green to Gold story: know your footprint, do things that actually reduce yours or your customer’s, and then take credit for it. As the Aspen Skiing Company shows, getting frustrated with lack of progress – as Schendler so rightfully does – and getting some of those steps reversed, is a recipe for trouble.

We’re at an odd junction in the greening of business. Millions of business people are just now coming to the table and seeking some easy wins. They’re moving incrementally, or trying to skip steps entirely. At the same time, some “old-timers” who have been working hard for years are getting frustrated at the lack of speed. It’s like they’re finally not alone in the wilderness and they want to start running. The problem is that everyone else is just starting their training for the race. Like Schendler, the leaders are getting impatient and pushing hard. I’m not sure which force will win, but it’s going to be an interesting battle.

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