Experts Gather to Discuss the State of Green Business

Experts Gather to Discuss the State of Green Business

More than 500 people gathered Monday for the State of Green Business Forum in San Francisco, an all-day event that marked the release of the State of Green Business 2009 report from the editors of The report attempts to measure the adoption of green business practices in the U.S.

The Forum featured more than a dozen industry leaders to bring various aspects of the report to life: water management, green jobs, innovation and energy efficiency. Executive Editor Joel Makower also assembled a panel of advisors of President Barack Obama to discuss the new administration and its efforts to jumpstart a green economy.

In opening up the forum, Makower presented an overview of the finding of this year's report: in a nutshell, companies are doing OK, but there's plenty of room for improvement.

"Is all of this green activity we read about actually moving the needle?" Makower asked. "The answer, in aggregate, is not so much." Executive Editor Joel Makower presenting the findings of the State of Green Business 2009. Photo by Christina Koci Hernandez. Joel Makower In running down a list of latest news stories, Makower offered examples of corporate environmental successes, all occurring since Nov. 4, 2008. Among them are beverage companies committing to grow their sales without using more water to make products, an apparel company incorporating green design principles into all its products, an IT company that developed energy management tools to dramatically cut companywide energy use, and a consumer products company selling $20 billion in greener products.

Despite the green success stories, the details of the State of Green Business Report are a mixed bag, but that progress is much slower than what we need. Makower outlined eight of the 20 indicators in the report that highlighted the good, the bad and the neutral in green business practices.

Among the sinking indicators Makower discussed were electronic waste and carbon intensity; in both cases companies in the U.S. are making slight improvements -- in total electronics taken back for recycling and the amount of CO2 equivalent generated per dollar of economic activity, respectively -- but that those improvements are failing to outpace the growth of the problems at hand.

On the more promising side, energy efficiency and paper use are areas in which U.S. businesses are swimming along well: "Energy efficiency is back on the table," Makower explained in looking at the long and steady decline in the amount of energy needed to power the economy year after year. In looking over the trends of the last few years, Makower said he expects that improved energy efficiency is something he expects to see as part of the discussion in businesses nationwide for years to come.

For the first time, water use was included as a metric in the State of Green Business report. The editors classified water use in corporate America as a success story, with the number of gallons consumed per dollar of GDP dropping some 25 percent between 1997 and 2007.

One of the more than 500 attendees asks the panelists as question at the State of Green Business Forum at PG&E Auditorium in San Francisco. Photo by Christina Koci Hernandez. Attendee asking question John Davies, vice president of GreenBiz Intelligence, led a panel discussion "Is Water the New Carbon?" to explore the ways in which companies are preparing for future water scarcity issues around the world.

Many industry sectors face a significant amount of risk associated with water disruptions but "an amazing number" of Fortune 500 companies have no understanding of their exposure, according to Jason Morrison, director of the Pacific Institute's Economic Globalization and the Environment Program. The public is increasingly expecting companies to manage their impacts, regardless of whether they have direct control.

Joel Makower introducing fellow panelists at the Forum. Photo by Christina Koci Hernandez. Joel Makower "When you look at corporate reporting, for example, now it's mostly focusing on direct operations," Morrison said. "It's what companies can understand best, it's where they have the best data, it's where they have direct control. Very few have given thought to their indirect water use, their embedded water in their supply chain."

There are, however, companies working to minimize risk. For example, a lifecycle analysis taught Levi Strauss & Co. that 49 percent of the water impacts for a pair of 501s can be traced to growing the cotton to make the pants, while consumer laundry after the product is purchased accounts for an additional 45 percent, according to Michael Kobori, a panelist and vice president of supply chain social and environmental sustainability for Levi Strauss & Co.

In addition to internal programs to improve impacts from its own internal operations, the company is trying to educate consumers in a number of ways, such as including cold-water wash directions on care labels and forming a partnership with Procter and Gamble and Wal-Mart. Wal-Mart featured displays in about 800 of its stores with the jeans alongside bottles of Procter & Gamble's Cold-Water Tide, which was marketed as a preferred cleaning method for the jeans that would save consumers money.

Meanwhile, Frito-Lay has embarked on a facility with an extensive water reclamation system that recaptures and reuses the water from washing corn and potatoes in its bid of "trying to get off the water grid as much as possible," according to Al Halvorsen, Frito-Lay's director of environmental sustainability.

Robert Shelton, a director for the management consultancy firm PRTM and the co-author of the book "Making Innovation Work," led a lively discussion about the opportunities and challenges of taking on "Innovation as a Green Strategy."

For many the approach entails adopting new business models -- and the view that products and services are not only solutions to customers' needs, but often are also extensions of a firm's own practices in aligning environmental responsibility and business success, panelists said.

"It's not just a case of changing the product or changing out materials in the product -- companies are taking entirely new approaches to the type of value they are adding," Shelton said. "Innovation in the green space, or any space, (involves) not just the product or the technology, but has to do with the way we think about the value added, the way we deliver it and ultimately the way companies make money."

From right to left: Autodesk's Dawn Danby, Peter Williams from IBM, IDEO's Valerie Casey, and Robert Shelton from PRTM discuss Innovation as a Green Strategy at the Forum. Photo by Christina Koci Hernandez. Panelists The concept of sustainability, said Valerie Casey, the Global Practice head at IDEO, is "fully integrated into all of the work that we do." Developing broad contextual vision is a top-of-mind concept within the firm, she said. The idea, she said, is key to the company's work with clients as well as the efforts of the Designers Accord, a global coalition she founded among designers, corporate leaders and educational institutions that focuses on integrating sustainability into practices and production.

Being attuned to the range of customers' needs as well as anticipating and adapting to industry trends can shape business models -- and the solutions a firm offers, according to Dawn Danby, the program manager for Sustainable Design at Autodesk. Growing emphasis on interdisciplinary teams throughout the design process in architecture, for example, informed the development of fullscale analysis software that enables complex data sets relating to sustainable design to be applied to specific projects, she said.

And Peter Williams, CTO for Big Green Innovations at IBM, said turning corporate practices and strategies for addressing energy efficiency, water consumption and other environmental issues into highly successful business solutions for customers is a hallmark of the company's work.

Acknowledging the progress in the green sphere, Shelton asked the panel whether today's innovators will be able to avoid the Groundhog Day syndrome that has turned back the clock on progress in the past.

"So how do we know it's going to be different this time around?" Williams countered. "Well, we've discovered we can make a boatload of money by doing it."

Green services and solutions related energy and cost savings are likely to be resilient throughout the recession, Williams added.