Sustainable Cities Take Center Stage

This article is part of a series of excerpts from the fifth annual State of Green Business Report, looking at trends in corporate sustainability. Download the free report from GreenBiz.com, and see all of our trends here.

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While national governments grapple with economic issues and policy gridlocks, pushing sustainability measures to the side, cities are picking up the mantle. Some of the world's largest cities are emerging as laboratories of innovative technologies, business models, and efficiency measures, many of them with salutary environmental and social outcomes. To the extent that the green economy flourishes, it is becoming clearer that it will likely be a bottom-up, grassroots evolution.

It makes sense. Cities are where more than half the global population lives. In developing countries, urban growth is exploding, stretching demands for food, water, energy, jobs, and mobility to the breaking point and beyond. In the developed world, the need for upgrading older infrastructure is driving leaders to invest in new, cleaner and more-efficient technologies.

During 2011, the role of cities in sustainability became increasingly evident. New York City Mayor Michael Bloomberg and former President Bill Clinton merged their respective sustainable city initiatives to create the C40 Cities Climate Leadership Group, a network of large cities around the world committed to implementing climate-related actions at the local level. The combined group, in turn, formed a partnership with the World Bank to help cities accelerate actions to reduce greenhouse gas emissions.

A sampling of cities' sustainability initiatives, courtesy of C40:

• Seoul plans to retrofit 10,000 buildings by 2030.
• Austin has a zero-waste plan for 2040.
• London aims to have 100,000 electric vehicles on the streets by 2020.
• Buenos Aires is implementing a network of dedicated bus and taxi lanes to improve fuel efficiency.
• Tokyo is introducing higher energyefficiency standards for large urban developments.
• São Paulo plans to reduce the use of fossil fuel on public transportation by 10 percent each year, aiming for 100 percent use of renewable fuels by 2017.

Such ambitious projects build on efforts these and other cities already have made over the past few years to divert waste from landfills, reduce greenhouse gas emissions of municipal operations, harness a growing percentage of power from renewable energy, purchase electric or ultra-efficient vehicles, and leverage their substantial buying power toward purchases of other greener goods and services. Leadership examples abound, from Copenhagen to Curitiba.

Some future-focused cities are helping to usher in a new wave of IT-enabled "mesh" businesses that promote sustainability by facilitating access to transportation services, real estate, tools, and many other things. As mesh companies grow and succeed -- and as cities recognize the benefits they bring in the form of such things as economic development, reduced congestion, and social connectivity -- a few cities are beginning to identify and nurture the conditions that make mesh businesses successful.

Mesh builds on an older but still growing trend to support local economies, especially local growers and producers of food. Farmers markets, community-supported agriculture, food cooperatives, food swaps, slow-food movements, and more are flourishing in both struggling and well-to-do neighborhoods, and they are providing the inspiration for other, non-food-related community enterprises. All of these are helping to reinvigorate cities in both the developed and developing worlds.

The latest developments in information and communications technologies are also spurring cities to create new, smarter infrastructure systems that promote energy and resource efficiency while providing new products and services. For example, the convergence of energy, information, building, and transportation technologies -- which is the basis for a technology framework we've dubbed VERGE -- is spurring the development of smart grids, smart buildings, smart transportation systems, and more. Each of these holds great promise to make cities more livable and efficient -- in a word, sustainable.

The implications for business are implicit, if not explicit: Cities are gaining enormous power to create markets for both local and sustainably produced goods and services, in some cases helping create economies of scale that make these things cheaper and more widely available. Such efforts further support business by making cities more desirable places to live, shop, and work, attracting employees and customers. City leaders recognize this. A survey by the Carbon Disclosure Project and KPMG of leaders of 58 cities around the world, representing 8 percent of global population, found that nearly 8 in 10 believe the physical impacts of climate change directly or indirectly threaten the ability of local businesses to operate successfully. As cities compete to attract companies and a highquality workforce, sustainability will likely be part of their competitive strategies.

One development from the last year may epitomize cities' growing potential as hotbeds of sustainable innovation. The cutting-edge conference TED, which brings together people from the worlds of technology, entertainment, and design to promote "ideas worth spreading," each year grants a TED Prize to a visionary individual. For 2012, it designated "The City 2.0" as its prize winner, for the first time granting the prize to an idea, not an individual. TED's organizers are using the prize to solicit ideas for what The City 2.0 -- "a real-world upgrade tapping into humanity's collective wisdom" -- should be and how to make it a reality.

We'll wait to see what that collective wisdom brings forth. At its best, it will unleash the brightest ideas from around the world for redesigning how people live, work, play, travel, and shop in more sustainable ways.

City photo via Shutterstock.