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Studio C: APP's Aida Greenbury on tackling deforestation

Published April 16, 2014


When Asia Pulp & Paper (APP) announced a pledge to protect millions of acres of land from deforestation, it caught the attention of corporations and environmentalists the world over. In this Studio C video from GreenBiz Forum 2014, APP's managing director, Aida Greenbury, discusses the importance of partnerships with Greenpeace and other major players to turn this ambitious plan into reality. "We cannot work alone," she said. "To tackle deforestation and protect forests, we need help from a lot of other people."

 

 

California Energy Commission's Robert Weisenmiller on the future

Published April 16, 2014
California Energy Commission's Robert Weisenmiller on the future

This story first appeared at Energy Efficiency Markets.

Before its retirement in 2012, the San Onofre Nuclear Generating Station (SONGS) represented about 16 percent of the local electricity generation supply covering an average of 1.4 million homes serviced by Southern California Edison, San Diego Gas & Electric and the city of Riverside in southern California. The plant was especially important because of its location on a critical transmission path between Orange County and San Diego. As a result, its closure created a shortage of electricity and a shortage of voltage support that is necessary to move power between Los Angeles and southern Orange County/San Diego.

Reid Smith of Energy Efficiency Markets interviewed Robert Weisenmiller, chairman of the California Energy Commission, about what the retirement means to energy efficiency markets in California.

Reid Smith: Earlier this month, the CPUC decided to replace much of the energy from the retired SONGS with new energy efficiency capacity. Can you give me some background about how and why this decision came about?

CPUC chairman Robert WeisenmillerRobert Weisenmiller: Following SCE's announcement of its intentions to retire San Onofre, the California energy agencies examined Southern California reliability issues exacerbated by the short-term closure and permanent retirement of San Onofre. A preliminary plan was prepared by the staff of the member organizations and discussed at a public workshop conducted by the energy commission in September. The plan relies upon a mix of resource additions and transmission system upgrades in the appropriate Southern California regions.

Resource additions can help mitigate against reliability threats as a result of growing loads. These include pursuit of additional capacity with a goal of 50 percent preferred resources and 50 percent conventional generation with triggers and contingency plans if any of these resources do not come to fruition. The 50 percent level was an increase over what was approved for SCE in December 2012.

The recommended reliance upon 50 percent preferred resources is acknowledged to require changes from business as usual, and current EE and DR programs will need to be reformed and expanded to meet the targets. The CPUC decision is the next step forward toward the 50 percent preferred resources as outlined in the Joint Southern California Reliability Plan.

Smith: What does this decision mean for the energy efficiency market in California?

Weisenmiller: This decision reinforces California's historic and ongoing commitment to invest in energy efficiency. It will enhance that market by increasing opportunities for energy efficiency providers and ratepayers when it comes to energy efficiency upgrades that save energy and money. This is especially critical in the Southern California area that was served by SONGS. For the first time, California is trying to pursue these preferred resources in very specific geographical areas.

Smith: Specifically, the CPUC decision requires SCE and SDG&E to procure capacity from preferred resources or energy storage. What are these preferred resources and why are they preferred over other resources?

Weisenmiller: The collaborating agencies worked with SCE and SDG&E to develop a comprehensive blueprint to ensure reliability while balancing carbon-reduction strategies to help fight climate change. One of the recommendations included targeting 3,250 MW of preferred resources — including local energy efficiency, demand response, renewable generation and storage —- to meet approximately 50 percent of needs. The only way to meet energy needs of a growing population and recovering economy in the face of climate change and loss of power plants is to create a balanced portfolio of preferred and conventional resources. These recommendations were then refined in the CPUC proceeding.

Smith: Does this decision differ from decisions in the past about how to replace retired generation capacity? How so?

Weisenmiller: California's energy resource loading order policy that provides a higher priority to investment in energy efficiency, demand response, renewable energy and distributed generation (preferred resources — localized solar PV, fuel cells, energy storage, combined heat and power systems, etc.) than investing in natural gas power plants (conventional resources) and electricity system upgrades to meet California's growing electricity demand. The state is committed to investing in cost-effective low-environmental impact preferred energy resources. Electricity reliability is of the utmost importance and with the closure of SONGS, a combination of preferred and conventional energy resources is necessary. This is a unique opportunity to fundamentally transform the electricity system in southern California as we work to meet our energy and environmental goals.

SONGS image by Jason Hickey via FlickrSmith: Will energy efficiency capacity procurement be more common in California and across the country as a way to meet energy demand in the future?

Weisenmiller: Yes. Preferred resources will play an increasing role in California's energy future.

Smith: The energy commission released a report in January that looked at how to replace energy from SONGS with energy efficiency resources. Did this report influence the CPUC decision in March? How closely did the Energy Commission and CPUC work together?

Weisenmiller: The energy commission and CPUC worked closely over the last year. The partnership encompassed several agencies and solicited public input. However, the CPUC decision was based upon the evidentiary record in its proceeding.

Smith: Who came together, in addition to the energy commission and CPUC, in order to make this decision? Utility partners, policy-makers, business owners, etc.?

Weisenmiller: The energy commission, the CPUC, Air Resources Board, the California Independent System Operator, State Water Resources Control Board and Southern California Air Quality Management District collaborated as a cross-agency working group. Public input was also important and the group spent months gathering and analyzing information. As discussed above, the CPUC commissioners unanimously adopted their decision based upon their evidentiary record.

Smith: Is there anything you would have liked to have seen in the CPUC decision? Any improvements in future years?

Weisenmiller: The agencies will track progress in acquiring the portfolio of preferred and conventional resources, and may further refine these programs in future years.

Smith: In the next year, what are you most excited about for the energy efficiency industry in California?

Weisenmiller: In early 2014, the energy commission released its Integrated Energy Policy Report that focused on strategies and actions to increase the energy efficiency of new and existing buildings. We are excited about:

  1. The rollout of the Prop. 39 programs to retrofit California schools so dollars can be shifted from paying energy bills to funding education.
  2. Implementing new building efficiency standards (Title 24) in July.
  3. Continuing the public dialogue under AB 758 on the best ways to achieve deep retrofits to existing buildings.
  4. Developing and approving new appliance standards to conserve both energy and water.

The original version of this story mistakenly referred to the subject as the chairman of the California Public Utilities Commission. That error has been corrected. Sunrise image by Chuck Abbe via Flickr.



Meet the world's first chief resilience officer: Patrick Otellini

Published April 16, 2014
Meet the world's first chief resilience officer: Patrick Otellini

This month, San Francisco’s first earthquake czar broke ground by stepping into the role of the world’s first Chief Resilience Officer.

Patrick Otellini brings a background in public policy and extensive knowledge of the city’s inner workings. After spending a decade in the private sector managing complex planning, building and fire code issues, he moved to City Hall. Otellini was first appointed to the city’s forward-thinking Soft Story Task Force, convened by then-Mayor Gavin Newsom. In 2012, he was named by Mayor Ed Lee as the Director of Earthquake Safety, which he will continue to oversee in his newly expanded role.

Otellini’s position is the first of 99 others to be filled in cities around the world, part of the Rockefeller Foundation’s 100 Resilient Cities Centennial Challenge. Their $100 million investment will fund 100 chief resilience officers in selected cities, along with a suite of other services in an effort to build future-proof cities.

Regardless whether you live in one of Rockefeller's selected 100, Otellini's insights are bound to shed light into what the burgeoning movement means for resilience in your city.

Shana Rappaport: You’ve been hired to make San Francisco the most resilient city. What statement does it make that the role of chief resilience officer is coming to cities around the world?

Patrick Otellini: I think it’s starting to bring to a global platform what we’ve known locally for a long time. We saw it after [Hurricane] Katrina in New Orleans, and after several other disasters, that it isn’t about surviving anymore, about just making it through the disaster. It’s about recovery, it’s about thriving after the disaster.

Rappaport: How does the role of a chief resilience officer for a city differ from that of a chief sustainability officer — or, in San Francisco’s case, the head of the Department of Environment?

Otellini: It’s different because resiliency is an all-encompassing term. At some point, it actually becomes such an encompassing term that it’s very hard to define. It’s not just sustainability. It’s not just seismic safety. It’s not just energy assurance. It’s all of these things together. I think we’ll see CROs serving as point people for other departments doing the work. The nice thing is that it’s not my job to be the expert on sea level rise. It’s my job to know what our city experts are saying, and to help them coordinate not just regionally but nationally, even internationally.

Rappaport: How is your definition of long-term resilience expanding to encompass both one-time disasters — like the earthquakes [for] which we’re especially at risk here in the Bay Area — as well as the longer-term things like sea-level rise and other climate-related disruptions for which we need to be planning?

Otellini: I think my personal definition of resilience is actually less important than what the community’s definition of resilience is. That’s something, in fact, San Francisco has done very well: looking to the community to define what it means to make our city more resilient. We’ve heard loud and clear that it’s not only seismic safety, about making sure we’re prepared for the big one, but also things like energy assurance, like protecting our infrastructure, like rebuilding our city’s seawall to be able to adapt to climate change — all these things are major concerns.

Rappaport: What are some examples of places that exemplify resilience? Are there other cities or models you’ll be looking to in crafting the resilience plan for San Francisco?

Otellini: If you take a national lens, I think it’s really interesting to look at places like New Orleans that have, after being so devastated, really banded together as a community to create a resilience strategy. There’s no easy solution to handle the kind of challenges they face. What’s coming out of New Orleans is really exciting and cutting edge, as far as resiliency goes.

Internationally, the city of Rotterdam has done a lot to address resilience. Their whole city is below sea level, so they’ve had to deal with climate change faster than anybody else. In the not-so-distant future, we may very well be implementing in the Bay Area some of the same technologies they’re using.

It’s things like this that get me really excited. The answers are out there; it’s just a matter of talking to the right folks and learning the lessons they have already. And then, of course, trying to implement them as efficiently as possible.

Rappaport: What’s the big picture opportunity you see for the private sector in creating a resilient city and how you plan to engage them?

Otellini: There are huge opportunities for the private sector. Think back to 10 years ago, before people were really considering LEED-rated buildings [Leadership in Energy and Environmental Design]. It was kind of obscure, until the community started saying to developers and owners, “If I’m going to rent this building, and you want to have me as a corporate tenant, it better be LEED-rated.” That started to drive change within the community.

I’d like to see the private sector respond that same way on the bigger picture of resilience: Not just demanding a LEED-rated building, but one that’s seismically safe, energy efficient outside of the LEED requirements and more.

It also comes down to the basic issue of continuity — about whether businesses are going to be able to maintain their operations in a post-disaster environment, about how quickly they can get up and running after one. Ensuring systems have emergency power to operate, these are resilience challenges and opportunities where I think it makes sense financially for the private sector to be involved. There’s a huge advantage for business to embrace this — as well as government.

These efforts have to take place in our communities: we’re bolstering up our own city infrastructure, we’re retrofitting our own buildings, and we’re asking the private sector to respond the same way. As long as we’re walking in lockstep with one another, it’s a very consistent message. These issues are really critical, especially with the tech boom happening here in San Francisco. Most of these tech businesses cannot afford to be offline for 24 hours.

One of the things that we like to advertise to our private-sector partners is a program called BORP. It’s a program run out of the Department of Building Inspection, and it stands for Building Occupancy Resumption Program (PDF). In a major earthquake, this program allows businesses, before the earthquake happens, to have a structural engineer of their choosing do an evaluation of the building. After the event, they can self-deploy a green, yellow or red tag to jump the queue of inspections and get back into business as quickly as possible.

Rappaport: What are some of the models you’re seeing of cities and companies working together strategically to bolster resilience? What do you think it will take to effectively share, replicate and scale those models across cities?

Otellini: Well, more broadly, one of the things that really excites me about the Resilient Cities Challenge is that Rockefeller has established a couple of key, private-sector platform providers to provide services to all these cities, essentially for free. In a municipality, we get inundated with people coming through the door saying, “I have the best new product for you. I have this great thing that can help make your life easier.” You hear it so often that you begin to become desensitized to what their actual goal is.

Having identified partners provide some normalcy to the process — beginning to use a common language, in a common platform — is going to be very valuable to achieve our goals. I think this is hugely important and a really exciting part of the resilience effort.

Rappaport: What are some of the most significant barriers you envision having to overcome?

Otellini: Building capacity in the community is a difficult thing; it’s very hard to initiate substantial behavior change. Take the simple example of recycling: just getting people to separate trash takes years, plus a culture of everybody being focused on that behavior change. That’s a small example of what we need to do on a much bigger scale, which is challenging because people don’t like to think about long-term or abstract problems. Especially when considering our hard-to-reach, vulnerable populations in the community — these are folks that are focused on making sure there’s a meal on the table, not, “What am I going to do in the 72 hours after an earthquake?” That’s too big of an issue for them to tackle.

Taking resilience out of the academic world and making it tangible for people in their day-to-day life, that’s probably the biggest challenge we face. To create an effective paradigm shift is no easy task.

Rappaport: What are your thoughts on the role of fear in engaging citizens and bolstering resilience? How can we better engage city stakeholders — whether it’s businesses, citizens, city folks — in resilience efforts?

Otellini: I definitely try not to use fear tactics; I think it is dangerous and can backfire. For example, earthquake messaging for the last several decades has been really doom and gloom — "The big one’s coming. Everyone’s gonna die." But we’ve backed off that. Now we talk about being prepared, about knowing and building a network with your neighbors.

That said, I think fear has its place. If you see a map where half of the city you know and love is underwater because of sea-level rise, or is in ruins from an earthquake, that’s certainly going to make you start thinking. But in the long term, I think the most effective strategy for behavior change is to approach it in a much more accessible way, one that people can respond to positively, as opposed to out of fear.

Rappaport: Let’s imagine you and I talk again five years from now. What do you hope to have accomplished?

Otellini: That’s a great question, especially because we really want — and need — to be thinking about big picture items. If I’m shooting for the stars here, I would love to see us have a comprehensive strategy for rebuilding our sea wall.

That is not an easy fix, but in San Francisco that’s one of our key vulnerabilities. It is seismically unsafe and not ready to handle what we plan to be ready for, including adapting to climate change, as far as sea-level rise goes. It has all of our major lifeline utilities passing through it. It has the Trans-Bay Tube passing through it. Talk about an Achilles’ heel of our city; in my personal opinion, it’s the sea wall. Five years from now, if we can say we have a plan and action items to address it, I think that will be huge for San Francisco.



Inside Panasonic's B2B energy play

Published April 16, 2014
Inside Panasonic's B2B energy play

Panasonic wields enormous influence globally when it comes to technologies for energy-efficient lighting, refrigeration, heating, air-conditioning and renewable energy production.

One not-so-subtle reminder: The first thing you may notice at Panasonic's new North America headquarters is the logo-splashed Tesla electric vehicle parked strategically near the front door. That's because Panasonic's Japanese parent company supplies lithium-ion batteries for the Tesla Roadster, Model S and soon the Model X, with a 2-billion-unit commitment over the next four years.

Many of those forward-moving technologies are alive in that 340,000-square-foot building. Leading architecture firm Gensler designed the Newark, N.J. structure, which Panasonic's U.S. operating unit hopes will reduce its carbon footprint by at least 50 percent compared with its previous facility 10 minutes away. Panasonic has applied for a Platinum LEED certification covering the interior and a Gold certification for the exterior.

"The move was engineered specifically to live the commitment to the principles of the company, which are around innovation and collaboration and sustainability," said Betty Noonan, chief marketing officer for Panasonic North America.  

That mantra is being sounded more loudly across the company as Panasonic's 100-year anniversary approaches in 2018 — and as it seeks to diversify away from the increasingly cutthroat (and low-margin) consumer electronics business. Each operating company around the world is encouraged to interpret the eco-mandate in ways most relevant for their unique geographies, Noonan said.

Exhibit A: Panasonic recently adopted a hazard pay policy for workers stationed in polluted Chinese cities.

In the United States, the combined sustainability, innovation and collaboration mandate has lead the company's Eco Solutions group to assume a relatively unique role: one focused on end-to-end management of renewable energy projects for commercial, government and industrial customers.

"My mandate is solution-oriented in that we are focused not on products per se, but in development, engineering, project integration and financing, backend asset management and service," said Jamie Evans, managing director of Panasonic Eco Solutions North America, which reports both to the U.S. operating unit and a global division run out of Osaka, Japan. "That enables us to offer a more customized and innovative message."

A business-to-business powerhouse

Even though the Panasonic brand is well established with consumers, it actually carries even more weight in business-to-business (B2B) channels. According to Noonan, almost 85 percent of the company's annual revenue comes from B2B contracts related to digital signage, avionics, automotive and other industrial applications, not to mention its substantial footprints in lighting controls, energy-efficient appliances and refrigeration equipment, HVAC equipment and solar modules.

Against that backdrop, Panasonic's quest in North America to woo small developers, building management companies and commercial customers makes sense. In early April, the unit created a new organization called Panasonic Enterprise Solutions Company that will oversee both Eco Solutions as well as Audio/Visual projects, as well as combinations of technologies from both.

"More than ever, our customers are relying on our ability to deliver integrated solutions that are both creative and made-to-order," said Jim Doyle, named to head the company after serving in the same role for Eco Solutions. "Ultimately, our goal is to engineer custom solutions, by partnering with customers to achieve results that leverage our experience, high-end products, onsite services and engineering know-how."

To date, Eco Solutions — in collaboration with strategic partner Coronal Group — has been involved with roughly 50 solar energy projects that are in varying states of completion, Evans said.

Examples range from the 498-kilowatt ground-mounted display for the University of Colorado at Boulder to a multi-phased arrangement with retail real estate investment trust Macerich that could yield more than 10 megawatts of clean energy capacity across shopping centers in Arizona, California, New York and Connecticut. A new joint venture with Global Investment Renewable will accelerate development of municipal projects. "We're now looking to bring an efficiency and velocity to building and financing these deals," Evans said.

The recent reorganization also will sharpen Panasonic's focus on installations using high-definition LED technologies. The company actually is behind the world's biggest outdoor video display project to date, at the Texas Motor Speedway: the board has an active display area of 20,633 square feet. Panasonic is also behind a similar display at Churchill Downs, home to the famous Kentucky Derby, Noonan said.

Given Panasonic's extensive battery business and its planned experiments with solar and energy storage in Japan, in places such as the Fujisawa Smart Town, which is now under construction, I asked Evans if the U.S. Eco Solutions team will focus on energy storage or energy efficiency initiatives. For now, that's not a priority. "Energy efficiency and batteries and some other capabilities are ones that we are having discussions about at a strategic level and thinking about," he said.

Walking the talk

You can see myriad demonstrations of Eco Solutions technologies and sustainable design principles in action at the 12-story new building in Newark, corporate base for about 800 employees.

Daylight harvesting sensors and controls are used throughout the workspace, while up to 90 percent of the offices and cubicles on any given floor have access to natural lighting. Panasonic solar panels are used on the roof, and low-flow water fixtures and rainwater capture systems have reduced water usage by at least 37 percent vis a vis comparable buildings. Most of the on-site cafeteria is used for customer tours, because Panasonic refrigerators and appliances figure prominently in its green products portfolio. "We're trying to live the creed, live the things that we sell," Noonan said.

Although the building has been occupied only since late summer 2013, Panasonic already has collected two sets of quarterly data measuring the new facility's energy consumption using ISO 14000 systems transferred from Secaucus, N.J. "As of December, we were about 52 percent under what we would have been," said David Thompson, Director of Corporate Environmental Department, Panasonic North America.

Top image of the Panasonic booth at the 2014 Consumer Electronics Show by Kobby Dagan via Shutterstock



Alissa Sasso

Environmental Defense Fund
Alissa Sasso is a chemical policy fellow at EDF. Alissa earned a BA in Ecology and Evolutionary Biology with a certificate in Environmental Studies from Princeton University.

Reid Smith

Reid Smith is a writer and editor based near Portland, Oregon.

RMI: How applying Deep Retrofit Value makes for Better Buildings

Published April 15, 2014
RMI: How applying Deep Retrofit Value makes for Better Buildings

Buildings consume more energy than any other sector — 42 percent of the nation's primary energy and 72 percent of its electricity. And at current trend and performance levels, fossil fuel use in commercial buildings will increase, not decrease, by 2050, when 65 percent of today's commercial square footage is predicted to be still standing.

This is why in 2011 President Obama announced the Better Buildings Initiative and launched the Better Buildings Challenge to push CEOs, university presidents, state and local government leaders, building owners and others to commit their organizations to reduce their annual energy use by 20 percent over 10 years while showcasing the best energy-saving strategies and their results.

Better Buildings has scored major wins in its first two years: More than 170 organizations are in the Better Buildings Challenge, committing more than 3 billion square feet of building floor space. With clear success garnering broad support for energy savings in the near term, the Better Buildings Initiative has driven the commercial and industrial sectors onto the path of mitigating climate change and reducing fossil fuel dependence.

But to reach the finish line, commercial buildings must become closer to being 40 percent more energy efficient by 2050. Achieving these deeper levels of savings more broadly will require a scaling up of investment in energy efficiency. RMI's new practice guide on how to calculate and present value from deep energy retrofits can help drive that investment.

The importance of value

A 2012 Urban Land Institute survey underscored the importance of calculating and presenting value. It found that lack of demonstrated value was the leading impediment to greater adoption of building sustainability and proving that value at the property level the most important intervention.

Thermostat image by Robert S. DonovanIn addition, a June 2013 survey of U.S. buildings sector executives by The Economist indicated that better valuing the "co-benefits" of energy efficiency — such as improved thermal comfort and tenant retention — would increase investment. While the most advanced building-owner decision makers already reference these values on an ad hoc basis, they typically are not taking them into account on a systematic, portfolio level. Attributing the value of the energy efficiency investments to the value of the portfolio can be difficult due to numerous factors that influence value. For example, the local economy can increase tenant demand for an office space just as well as greater comfort and efficiency.

Scaling investment

As a pre-condition to wide-scale capital investment by the private (and public) sectors, a complete set of value and risk considerations must be better integrated into retrofit decision-making practices. New decision-making practices in the real estate investment and lending mainstream are a powerful way to bring more capital to bear on a climate-change imperative.

Better Buildings partners and other leaders are demonstrating energy efficiency investment methodologies that others can use, including appropriately acknowledging the value proposition. "Through the Better Buildings Challenge, our partners are leading by example and sharing their strategies with other organizations," said Maria T. Vargas, senior advisor and Better Buildings Challenge director at the Department of Energy. "By focusing on portfolio-wide improvements and showcasing real solutions, these organizations are helping to accelerate energy efficiency across the marketplace."

To help the industry begin sorting through the value and risk considerations, Rocky Mountain Institute released a practice guide, "How to Calculate and Present Deep Retrofit Value for Owner-Occupants." You can use this report to rethink and even refine real estate energy strategies and retrofit decision making, to test enhanced retrofit strategies and to drive energy efficiency even deeper on new projects.

Early wins

The Better Buildings Initiative has made great progress in getting the U.S. commercial building sector on track for substantial energy savings through implementation of industry-tested strategies. For example, Better Buildings Challenge partners are saving on average 2.5 percent annually over the previous year's energy use, and have delivered more than 100 solutions that other organizations can adopt to achieve significant energy savings in their buildings.

Thermostat image by Jiri Hera by ShutterstockIn some cases Better Buildings Challenge partners are achieving deeper levels of savings in already-efficient buildings. TIAA-CREF, a leading financial advisor that reduced energy intensity in its real estate investment portfolio by 15 percent by 2011, spent just over $6 per square foot ($1.01 million) on one 158,000-square-foot office building that was already in the top 10 percent in the U.S. for efficiency performance. The investment increased the building's Energy Star rating from 92 to 98, where a rating of 100 indicates the office building is the most energy efficient in the U.S. The retrofit will result in energy savings of 27 percent, or $89,000 annually.

What's required to reach climate and energy goals

The above examples show that energy efficiency pays off, and not only in energy cost savings. Leaders such as TIAA-CREF are investing in efficiency because it provides numerous benefits, including making the building more attractive to tenants and enhancing company reputation and leadership.

The new RMI Deep Retrofit Value practice guide is intended to help others properly calculate and present the value of these benefits in order to rapidly accelerate energy efficiency investment. The first guide focuses on owner-occupants, and ensuing guides over the next two years will be tailored for investor-owners and lenders. These guides can help drive investment in efficiency helping the Better Buildings Initiative reach its important goal of reducing building energy use.

This story first appeared at Rocky Mountain Institute's RMI Outlet.

Building image by aini via Flickr.



How Yerdle and Patagonia are boosting the sharing economy

By Nikki Gloudeman
Published April 15, 2014
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Tags: Business Models, Consumer Products, More... Business Models, Consumer Products, Consumer Trends, Partnerships
How Yerdle and Patagonia are boosting the sharing economy

As the collaborative economy gains traction, partnerships have formed to bolster this waste-reducing trend that keeps products and services flowing through a shared loop. One collaboration gaining fresh notice involves Yerdle, an online marketplace for exchanged goods, and Patagonia, the mega-retailer of outdoor clothing and gear.

The two first paired up in November for an anti-Black Friday event in San Francisco, during which items brought for sharing on Yerdle could be exchanged for a free item from Patagonia's pre-used Worn Wear collection. The same day, Worn Wear products also were put up for grabs on the Yerdle app.

Since then, the two have continued to support one other's mutual interest in the burgeoning sharing economy. In addition to customers exchanging Patagonia goods on Yerdle, Patagonia contributes excess Worn Wear products from its warehouses. Meanwhile, Yerdle promotes these products to its customers. Currently, Yerdle hosts nearly 1,000 Patagonia products, which are among the 10 most popularly exchanged goods on the site. 

Nellie Cohen, corporate environmental associate at Patagonia, says the collaboration provides natural synchronicity with the brand's aims. "What we're trying to do with Worn Wear is help our customers get the most out of stuff they already own," she said. "With Yerdle, we can further engage with customers in the sharing space."

Here's why this partnership works — and how other companies can follow suit to participate in the growing collaborative economy.

A mutually beneficial partnership

Through their collaboration, both Yerdle and Patagonia have gained significant market advantages. Patagonia products, generally regarded to be of high quality, add cache to Yerdle's product stream. They also create what Andy Ruben, co-founder of Yerdle, calls a "flywheel effect"; when people see Patagonia products on the site, they're more inclined to add their own Patagonia items to the stream. 

At the same time, Patagonia is able to showcase its commitment to durable, high-caliber products, reaching both new and existing customers who see that its products boast a long life cycle. In addition to exposure on the Yerdle site, customers frequently talk about Yerdle products on Pinterest, Facebook and other social media channels, further extending reach and brand loyalty.

Jeremiah Owyang, chief catalyst at Crowd Companies, a council dedicated to helping companies tap into the collaborative economy, says the Yerdle partnership allows Patagonia to showcase a "commitment to sustainability by encouraging the sharing of used goods over buying anew, proof of durable goods, and proof of a thriving community around its brand."

Both Yerdle and Patagonia are engaging with the collaborative economy movement in other ways as well. Each, for instance, works with ifixit — a global community of people helping each other fix things — to repair used items.

Yerdle also works closely with other brands known for durable items, including the San Francisco-based bag company Timbuk2. "Similar to Patagonia, this company will stand behind its products, regardless of time since the initial purchase," Ruben said.

The collaborative economy takes off

The Yerdle-Patagonia partnership is one of many at the heart of a sharing economy movement that's reshaping how people interact with their stuff. The market has proliferated to include everything from pre-used products (led by sites such as Yerdle, Threadflip and, of course, ebay) to transportation services (Uber, Lyft, Sidecar) to places to stay (airbnb, HomeAway). A recent Crowd Companies survey revealed anticipated growth throughout the sharing economy between the end of 2013 and the end of 2014, including an anticipated 46 percent boost in the sharing of pre-owned goods. 

There are multiple reasons this trend is taking off. Not having to purchase new products or services, of course, saves money. Environmental benefits include a reduction in waste and supply-chain impacts. And through sharing with others, customers gain a sense of community often lost in the traditional marketplace experience. 

Beyond these advantages, the trend is also asking companies to rethink how they design products in the first place. "From a product lifestyle perspective, it comes down to how we are designing for reusability, and how we can ensure that the things we make as a brand live a really long life," Cohen said of Patagonia. 

As the sharing economy grows, Ruben envisions other companies adopting a similar mentality. In the future, he says, we "will see brands spending more energy designing for hand-offs." 

This kind of thinking will help not only brand loyalty and sustainability, but also customers engaging in the sharing process. The question, Ruben says, is this: "How many people can one Patagonia jacket keep warm?"

Photo of second-hand fleece pants from Patagonia's Worn Wear collection via Instagram

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Water stress magnifies impacts of U.S. droughts

By Andrew Maddocks
Published April 15, 2014
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Tags: Agriculture, Water
Water stress magnifies impacts of U.S. droughts

Dried-out fields and dwindling reservoirs are becoming all too common across the United States as companies, farms and municipalities stagger along under years-long droughts. Worsening dry conditions affect two-thirds of Texas. California's historic drought shows no signs of improvement. Exceptional to moderate drought conditions extend in pockets from Oklahoma north through Minnesota. And in Colorado, The Denver Post wrote, "comparisons to the Dust Bowl are no longer hyperbole — they're accurate."

"Years of Living Dangerously," a new Showtime series about climate change, turned its lens on how drought devastated the small town of Plainview, Texas in its first episode, which aired Sunday night. Drought drove a Cargill beef-processing plant — Plainview's largest employer — to close in 2013. More than 2,000 jobs disappeared in a town of 22,000.

In Plainview — and every other drought-stricken place across the United States — a precipitous drop in rainfall is only part of a much broader story. Underlying water stress is one important piece of that complicated puzzle. When drought strikes where baseline water stress is high, it exacerbates regions' water woes.

Plainview in perspective

As drought withered once-rich grazing lands and increased feed prices across Texas, ranchers had to sell their herds to stay in business. The state's cattle herds are now at their lowest level in half a century, the Showtime episode explained. That meant less business for Cargill.

The company's now-shuttered Plainview plant sits within the Brazos River basin. The Brazos is the longest river in Texas — and what the show didn't mention is that the river is also extremely water-stressed.

WRI's Aqueduct project recently evaluated, mapped and scored stresses on water supplies in the world's 100 largest river basins. The Brazos ranked 13th most stressed among the world's largest rivers. The river's extremely high stress level means that 80 percent or more of its naturally available surface water supply is already being used by farms, homes, businesses and energy producers.

All users in the basin, therefore, compete for limited resources. So even in non-drought conditions, Plainview and the surrounding area would have cause for concern. While infrastructure and management interventions — such as water reuse systems — can help improve water access in the area, the fundamental reality is that all users are extremely vulnerable to changes in available supply, such as those that occur during drought.

A national trend

Plainview's plight is emblematic of a broad, national trend. Drought and water stress overlap in many regions facing water shortages in the United States. The Aqueduct project shows that 66 percent of California's irrigated agriculture is exposed to extremely high water stress. Two of the United States' largest river basins also face extremely high stress — the Colorado and the Rio Grande, which provide water supplies to eight states. More than 30 million people depend on the Colorado alone for water. Both of these rivers rank in the top 18 most-stressed river basins around the world, when analyzed by population.

Infographic by WRI AqueductThese risks are projected to increase. Climate change generally will make precipitation more extreme, variable and unpredictable in the years ahead. Additionally, hotter average temperatures mean drier soil, so farms may face greater risks to their crops and ranchers to their herds, even if it rains more regularly.

How can we ensure a water-secure future?

There is hope, however, for solutions. As the steady stream of national-level coverage and this video series demonstrate, national awareness amongst all stakeholders is starting to build — from individual water users to politicians, business people and celebrities such as Don Cheadle, who hosted the Plainview story.

That attention can only help further some of the approaches that aim to bring water demand more in line with available supply for agriculture, industry and municipalities. For example, some companies are starting to realize that water risks pose serious implications for their bottom lines. Cargill participates (PDF) in the CDP's water-risk disclosure program. Tools such as CDP's survey are essential as more investors seek water-risk information and companies take water risk evaluation and mitigation more seriously. California is among the states leading the way in researching demand-reduction strategies. And in Australia, another notorious drought hot spot, the government has invested heavily in water efficiency and created an innovative water-rights trading system to cap overall demand and preserve water for the surrounding environment.

Wherever drought and water stress overlap, reducing water use is an essential step toward long-term economic, social and political stability. We're starting to figure out solutions to the world's water woes — but truly creating a water-secure future will require more information, research and innovation.

This article originally appeared at World Resources Institute and is reprinted with permission.

Drought image by Terry Shuck via Flickr.

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Real estate benchmark takes sustainability to the capital markets

By Nils Kok
Published April 15, 2014
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Tags: Buildings, Real Estate, More... Buildings, Real Estate, Standards & Certification
Real estate benchmark takes sustainability to the capital markets

On April 1, the organization I direct, the Global Real Estate Sustainability Benchmark, launched its 2014 Survey, marking the start of the annual assessment of the sustainability performance of property portfolios around the globe. GRESB was launched in 2009, with the purpose to provide pension funds and their trustees with more information on the “greenness" of their investments in real estate.

If you work in the green building industry, GRESB may not be familiar to you, as it focuses on providing sustainability data to investors in property companies (REITs) and private equity real estate funds, rather than assessing the greenness of individual assets. But though those two worlds seem far apart, they are in fact closely linked.

Where LEED and its global equivalents provide a standardized assessment on the energy efficiency, water efficiency and other environmental characteristics of buildings including offices, shops and schools, GRESB aims to provide the global industry standard for the assessment of the environmental, social and governance (ESG) performance of real estate portfolios. Those portfolios typically include anything ranging from just a few to hundreds of individual assets, and are managed by professionals such as Brookfield, Prologis, Prudential and Vornado.

A "nutritional label" for the capital market

GRESB's goal is to provide real estate investors with the tools they need to monitor and manage sustainability performance accurately, and to prepare for increasingly rigorous ESG obligations. Investors need this information to better understand immediate sustainability risks surrounding issues such as flooding or regulation regarding minimum energy-efficiency requirements. They also need it to zoom in on sustainability-related investment opportunities, such as the repositioning of inefficient assets that might otherwise become obsolete. It's about protecting and enhancing shareholder value, based on academic evidence that sustainability and financial performance are positively related in the real estate sector.

In a recent issue of the Economist, this argument is further laid out: Better information helps to steer investments away from polluters, and capital to those that manage ESG risks and opportunities in a positive way. USGBC CEO Rick Fedrizzi describes LEED as "a nutritional label, like on a box of animal crackers," and GRESB tries to provide exactly that, but…now for the capital market (read this CNBC article for more information about the future of the real estate sector).

To add some more acronyms to the mix: The GRESB benchmark is aligned with other globally recognized reporting frameworks such as the Global Reporting Initiative (GRI), the Principles for Responsible Investment(PRI) and the Dow Jones Sustainability Index (DJSI). But those frameworks are typically sector-agnostic and focus mostly on large, listed companies, whereas GRESB examines sustainability-related issues specifically for the real estate sector. This includes strategies, policies and objectives, as well as measuring environmental performance data regarding energy and water consumption, GHG emissions and waste. The benchmark also investigates the use of voluntary standards and certifications such as LEED and Energy Star, so in the end, all actions taken at the asset level roll up into a metric for the portfolio. 

GBIG, a new tool developed by the USGBC, will help with that aggregation. The data that GRESB collects, and the ratings it provides, are not meant just for socially responsible, mission-driven investors, such as Calvert, the Catholic Brothers or Trillium, but rather for your average pension fund, its fiduciary manager or its investment consultant. These capital providers are typically significant in size, and the pool of capital using GRESB data now includes more than 100 institutional investors, fund managers and property companies managing $6.1 trillion in assets. And that excludes a part of the capital market that has not even started to seriously think about the implications of sustainability for investments: the debt market.

Sure, there are some loans to green buildings, but not many banks will incorporate sustainability characteristics in their underwriting of corporate bonds or commercial mortgages. Some action is on the horizon, though — with, for example, a recent green bond offering by Unibail Rodamco, Europe's largest REIT.

The real estate industry's sustainability push

In the meantime, the real estate industry has taken notice. Following pressure from investors, regulators and building occupants, the industry has started to look more closely at sustainability issues, with many property companies and fund managers integrating sustainability into their overall business strategies.

In 2013, 550 property companies and funds participated in the GRESB Survey (here's the complete list of reporting companies and fund managers), managing $1.6 trillion in value. While 550 companies and funds may sound trivial, the GRESB database covers 49,000 assets in 46 countries.

In 2014, GRESB is looking forward to further increasing the transparency of the real estate sector, starting at the portfolio level, then drilling down into the sustainability performance of individual assets. Imagine the opportunity in improving the efficiency of those 49,000 assets for cost savings and carbon reduction.

Key photo by Mara008 via Shutterstock

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