A law making its way through the halls of Congress would enforce CSR programs with heavy fines and civil lawsuits. In other words, lawyer Michael Levine writes, the time has come for companies to walk the walk, before they make you walk the plank.

If you are reading this, your company may already be voluntarily implementing substantial corporate social responsibility (CSR) and corporate citizenship programs. If not, take note: legislators are attempting to pass a bill that would, in effect, require corporations to affirmatively engage in CSR efforts.

In this climate, corporations need to review their existing CSR efforts and consider whether they are at risk of being sued or subjected to governmental oversight. Corporations should consider the extent to which they wish to become part of the legislative process. Otherwise, they may find themselves subject to compulsory CSR guidelines and left with no say or meaningful input into their own CSR programs.

What CSR and supply chain professionals need to know is that the pending legislation would expose those companies importing or selling products made in "sweatshops" to litigation, monetary penalties and governmental investigation. In a related vein: several free trade agreements (such as those negotiated with Peru, Colombia and Panama, and those sought with Korea and Malaysia), may not receive congressional approval unless they incorporate more stringent mechanisms to ensure compliance with certain labor rights and standards.

Though the bill and agreements discussed below may not become law, or may be drafted in a different manner, companies still need to be concerned. The drafting of such legislation --- with bi-partisan support --- signals that legislators on both sides of the aisle may believe that the current system of voluntary CSR monitoring is not working.

This suggests that some on Capitol Hill may believe that corporations will address CSR issues only if they are mandatory and only if they face substantial monetary or other penalties. (The bill in question provides for monetary damages, injunctive relief and attorney's fees, as well as for companies to be subjected to investigation by the Federal Trade Commission, which will publish the names of violators and the information about the violations in the Federal Register.)

More about the legislation: S. 367, titled the "Decent Working Conditions and Fair Competition Act," has been sponsored by Sen. Byron Dorgan, a Democrat, and by Sen. Lindsey Graham, a Republican. In sum, this bill allows private plaintiffs, including retailers' competitors, to sue corporations that have engaged in unfair competition and deceptive trade practices by having obtained merchandise from "sweatshops," which are, in substance, companies that violate "core labor standards" (i.e., the laws of the countries in which companies that made the merchandise are located) or international human and labor rights standards.

The bill also prohibits such goods from being imported into or sold within the United States. Corporations that violate the act: 1) Must pay a minimum of $10,000 for each violation of the Act, or the "fair market value of the goods," whichever is greater, with willful or knowing violators being required to pay more; 2) Must pay a prevailing plaintiff's litigation costs, including their "reasonable" attorneys' fees; 3) May be subject to injunctive relief (which conceivably could take the form of a court order requiring them to refrain immediately from future violations). Under the bill, the Federal Trade Commission is charged with investigating complaints from workers of violations of the Act.

At a Senate Commerce, Science and Transportation Committee hearing on February 14th, 2007, interested parties testified about the bill. First, former workers of foreign companies that allegedly violated labour and other rights spoke. Others that testifed included Charles Kernaghan, Executive Director of the National Labor Committee, an NGO that investigates and reports about labour and trade issues; James English, International Secretary-Treasurer of the United Steelworkers; and Steven Jesseph, President and Chief Executive of the Worldwide Responsible Apparel Production (WRAP) program.

Kernaghan spoke of the continued existence of substandard work conditions and illegal practices of foreign manufacturers under the current system in which CSR efforts are voluntary. Kernaghan also testified that workers in China who made furniture products had suffered maimed hands and broken fingers because of unsafe working conditions and practices.

It is far from certain that CSR efforts will become mandatory under this bill, or future variants of it. In the free trade agreement context, efforts to forge a compromise are underway. On the table at a Feb. 14th hearing of the House Ways and Means Committee, for example: whether (as Democrats insist) tougher labour protections and enforcement mechanisms are necessary parts of future trade agreements with Central American countries. Also of concern: balancing the need for free trade with the danger of lost U.S. jobs.

In the meantime, here are some takeaways: corporations must seriously and regularly review their CSR programs, taking steps such as analysing whether related supply-chain monitoring and information processing are functioning effectively. Given that CSR is not something to be taken lightly in the current climate, governments of countries seeking to enter into free trade agreements with the United States also have a strong incentive to proactively address CSR issues as a means of attracting and retaining business.

Retailers participating in joint-CSR initiatives must consider whether the information they share in those efforts could be used by a competitor to sue them. Finally, corporations should ensure that their concerns about compulsory CSR are presented in the legislative process. For example, motivating competitors to sue each other could result in decreased incentives to participate in joint-CSR initiatives and reduced transparency and disclosure of CSR efforts.

Should this occur, the losers would be the workers who might be at risk if protections are decreased, as well as the stakeholders, who stand to learn less about how companies address their CSR challenges. After all, why reveal one's program, "warts and all," if it provides a roadmap for your competitors to sue you?

Michael A. Levine is a partner in law firm Epstein Becker & Green's Labor and Employment and National Litigation practices, and chair of the firm's Corporate Social Responsibility group.

This article first appeared  at GreenBiz.com

Posted by James Murray on April 30, 2007 | Permalink | Comments (0)

We all know a picture is worth a thousand words, but according to Amy Sims of practical environmental charity Global Action Plan visual displays can be worth even more to your firm's environmental strategy.

A bold visual representation of people's unsustainable habits can pack a powerful punch. Like nutrition-guru Gillian McKeith's televised tactic of filling a table with all the fatty foods one has gorged on in a week; showing people how wasteful they can be in their daily lives has wow factor (with possible exception of one woman who, to McKeith's chagrin, found the heaving mountain of chips and curry before her simply 'delicious').

It is a lesson Global Action Plan has certainly learnt in its work helping businesses change behaviours and limit their environmental impacts. One of our most popular tools for accomplishing this is the Carbon Gym. Preaching to people about changing their behaviour for the greener good can be as effective as telling a teenager to keep their room clean but this gym is a workout for the brain and body. The gym is comprised of our Energy Bike, Carbon Rower and Carbon Weights with each piece of equipment designed to physically engage the user in a way that emphasises the scale of some of their environmental impacts.

Yes you know that you should switch to energy efficient lightbulbs and that a polar bear will be granted the gift of ice once you do. But even with the furry fellow tugging at your conscious and some jumbled energy saving figures tucked into the memory, it remains on a to-do list. People who ride our Energy Bike pedal to power a series of everyday appliances, the more power they use; the harder it is to pedal. Riders can easily illuminate an energy efficient bulb but when the current is diverted to power an old-fashioned bulb instead - sha-zam, the connection is made - it requires much more muscle. They see the light, feel the difference, and they remember. Feedback has been fabulous, for example we've had employees who've ridden the bike tell us they always turn their monitors off at lunch now because they remember the feeling of powering it.

The Carbon Rower and Carbon Weights teach people about the differences in carbon emissions through resistance. The weights illustrate the different levels of carbon created through various lifestyle choices. People feel the weight of CO2 that is produced by different forms of travel; by different types of house insulation; and by food travelling from different locations. They are challenged to lift the weight of carbon their choices produce. The rowing machine is specially adapted so when in use it inflates three columns representing the amount of CO2 emitted travelling 2kms by air, car and train. This enables rowers to visualise the amount of CO2 produced by their travel choices.

Similarly, many businesses who participate in our workplace programmes develop creative displays to impact a sustainable message on everyone in the building.

Paper use in workplaces is so extraordinary you'd think staff had shares in the timber industry. The average UK office worker uses up to 100 sheets of paper every day, working through a phone book worth of paper, or more, every week. But fortunately some companies are conjuring up striking displays to encourage staff to turn over a new leaf. Investec built an 8-storey tower of printer paper boxes in its atrium to show staff how much paper they were using every week.

A tourism management company in London created a veritable paper aquarium, with everyone pitching in to fill the tank. All waste bins were removed from the office and staff were asked to toss all waste paper into a spare glass fronted office in the main area.  Employees just chucked in all of their paper waste in the room for two weeks, and as it filled up all passer-bys saw paper level rise day after day. The exercise of carrying paper waste to a designated spot and seeing the accumulation got everyone talking about the display. As an awareness raising tool this display scored.

But you have to make sure that whatever environmental display you choose it suits its target audience. At John Brown Citrus Publishing staff at the publishing company created posters with environmentally-friendly tips on them and it clicked that some of the cleaning staff primarily spoke Portuguese so posters were made bilingual.

Recognising the needs of the people in a workplace and tweaking displays so they have as wide an impact as possible is a simple yet powerful way to create change. From an 8-foot tower of paper boxes to a small adjustment in signage, displays have the power to move people in a more sustainable direction.

Amy Sims is Communications Manager at Global Action Plan.

Created in 1993, Global Action Plan is a practical environmental charity that has worked with thousands of people and organisations to help them make positive changes to reduce their environmental impact at home and at work.

Posted by James Murray on April 27, 2007 | Permalink | Comments (0)

The Institute of Directors (IoD) went green at its annual conference at the Royal Albert Hall in London today, which for an organisation as traditionally stuffy and conservative as the venue it chooses for its annual shindig represents a pretty seismic shift.

To put it in context, ever since the IoD was founded in 1903 it has always been part of the UK's old school business community (I was once denied entry to its headquarters on Pall Mall because I was wearing, shock horror, jeans).

Until very recently its pronouncements on the environment could have fitted on the back of a postcard. And that postcard would probably have read something along the lines of: "The environment is there to help us maximise profits. Would all regulators, politicians and mung bean-eating hippies who think otherwise kindly bugger off and leave us alone to get on with the serious business of making money and lobbying for low taxes and even less regulation".

So to see the organisation unveiling a new climate change microsite for IoD members and handing over a sizable chunk of its keynote slots to speakers with an environmental or CSR drum to beat must have proved quite a shock to the system for some of the more traditional members of the 2,500-strong audience.

The morning session was dominated by an hour long debate on how to be a "good" director featuring chief executive of Cafedirect Penny Newman; Rory Stear, executive chairman of clock work radio inventors Freeplay Energy; Director of the Institute of Business Ethics Phillippa Foster Back; and John Elkington, founder of management consultancy SustainAbility.

A few home truths were delivered to the rapt audience as Elkington argued that despite great strides forward in recent years CSR was still confined to the periphery of many businesses. "Many companies are seeming to do something [on CSR and the environment], but it is not going back into the guts of the business," he observed, arguing that as a result firms are at risk of "seeing very profound reverses [to their brand value] that cascades through their business".

In a recommendation bound to concern some of the older members of the audience, Elkington argued that to counter these risks firms needed to appoint younger executives to the board with a better understanding of environmental and CSR issues. "Many of the companies [that have had brand damage in recent years], like Shell and Nike, did pick up on the early warning signals," he said. "But they didn’t pick up on the importance of the problem."

Foster Back added that there was also a need for board level directors to improve communication channels with the rest of the business if they are to turn CSR and environmental policies into a reality. "The board really has to listen to the rest of the business to pick up on potential CSR issues," she said. "You also need to constantly monitor the say-do gap because if it gets too wide you are actually opening yourself up to more risk [of bad publicity]."

However, both Stear and Newman insisted that there are major benefits to be had by firms that do run successful CSR and environmental initiatives, including improved staff morale and retention rates, and enhanced brand value.

But if these benefits were a bit too wishy-washy for some in the audience, it was left to Elkington to hammer home the solid commercial case for adopting environmental best practices. The "market gate keepers" such as Wal-Mart, Tesco and the public sector were realising the importance of climate change and were beginning to force environmental standards onto their massive supply chains, he argued. "We are at the beginning of a period of convulsive change… and it is going to happen far faster thah people expect," he predicted.

To further highlight the urgency with which green business models should be adopted the afternoon session featured a live satellite broadcast from the Arctic Circle in which explorer Jim McNeill explained how 40 percent of the Arctic ice had disappeared in the last 40 years.

So has the IoD really changed its spots? Is the environment and the transition to a low carbon economy really a top priority for the business group's 55,000 members?

Well, with the Albert Hall's car park dominated by a display for the latest Bentley it looks like some of the IoD members' environmentally unsustainable habits are still alive and kicking.

Speaking in his opening keynote, IoD director general Miles Templeman neatly summed up the growing tension between the group's increasingly influential cabal of dedicated green businesses, such as Cafedirect and Freeplay Energy, and its more traditional priorities.

In a nod to the growing concern about environmental issues he argued that business had a critical role to play in tackling the problem of climate change and that there needed to be a greater acceptance from the business community that the shift towards a low carbon economy presented an opportunity rather than a threat. However, he qualified his support for environmental best practices by observing that "it is important that we don't save on CO2 but lose on jobs".

He added that the IoD wanted the UK to take a lead on tackling climate change, "but not at the cost of competitiveness".

This caveat is an extremely complex one and lies at the heart of much of the current support for green business models demonstrated by groups such as the IoD and the CBI.

It can be argued, quite rightly, that with investment in new green technologies essential to reducing carbon emissions it is critical that the economy remains healthy and competitiveness is protected if climate change is to be tackled.

However, the assertion from the IoD that cuts in carbon emissions must always come second to jobs and competitiveness means it can not be relied upon to support a large number of environmental initiatives, which at first glance appear to hinder economic competitiveness.

The EU carbon trading scheme, for example, will hamper European competitiveness in the short term if, as expected, it starts to impose large-scale costs on the most polluting industries. Without China, India and the US signed up to the scheme those firms forced to shell out for the most carbon credits are likely to up sticks and move to countries outside the trading mechanism.

If the IoD sticks to its guns over competitiveness being its top priority then it could well shed its green image at this point and begin to oppose the trading mechanism along with any other form of environmental restrictions that are not adopted globally.

The fact is that as with any economic transition the move towards low carbon business models will mean job losses. However, as with any technology upgrade, jobs lost in the most polluting sectors will be replaced by jobs in the new clean technology industries. Legislation, like the carbon trading scheme, that makes some industries less competitive will by definition make the new low carbon industries that replace them more competitive. According to some economists the net effect on the economy of this transition will be positive.

The IoD and other business groups need to realise this and ensure that in their desire to protect their members' jobs and competitiveness they do not lobby against the very environmental policies that will boost the jobs and competitiveness of the new breed of entrepreneurs who will make up their membership in the low carbon economy.

It will be interesting to watch the imminent internal battle between the new green wing of organisations like the IoD and the old school "jobs first" hierarchy. For the sake of the entire green business movement it is a fight that the new breed of environmentally-aware executives must win.

Posted by James Murray on April 27, 2007 | Permalink | Comments (0)

IT is responsible for the same level of CO2 emissions as the aviation industry, according to new figures from IT industry analysts Gartner.

The study estimates that CO2 emissions released during the manufacture, distribution and use of ICT equipment are responsible for approximately two percent of total global carbon emissions - making ICT as polluting as the airline industry.

The estimates were based on figures for average energy use and global market size for PCs, servers and associated cooling infrastructure, fixed and mobile telephony, local area network (LAN), office telecommunications and printers. Estimates for the embodied carbon emitted during the design, manufacture and distribution of PCs and cell phones were also added to the total giving a figure for ICT's total carbon footprint.

Simon Mingay, research vice president at Gartner, said the final estimate was reasonably accurate, but admitted that with figures for the embodied carbon of servers and printers unavailable and with a wide range of consumer electronics not included in the research it could be argued the IT industry's overall carbon emissions are greater still.

"When we were going through the numbers and they were beginning to stack up it really did become pretty sobering," he said. "You also have to consider that if nothing is done IT's CO2 emissions are only going to increase."

He added that the revelation that IT is responsible for the same level of CO2 emissions as aviation meant the sector could expect "greater scrutiny" from regulators and customers in the future as concerns about emissions continue to grow.

However, Gartner insisted that while IT's enormous carbon footprint was a cause for concern the IT industry was in a far better position to tackle the problem than its counterparts in the airline sector.

"The good news is that because there are such big inefficiencies [in IT] there are opportunities to make big improvements in carbon emissions pretty quickly," said Mingay.

He argued that simple steps such as optimising datacentre layout to reduce cooling requirements, encouraging staff to turn off PCs and making better use of automated turn-off capabilities could slash IT's carbon emissions with minimal investment. "The problem of PC's being left on, for example, is death by a thousand cuts," he said. "Everyone thinks that leaving their machine on makes little difference, which is true, but if you consider up to 60 percent of PCs are left on overnight the cumulative effect for 880m PCs worldwide is massive."

Gartner also predicted that with half of IT departments expected to declare an environmental strategy and over one third likely to have one or more environmental criteria in their top six buying criteria by 2010 IT vendors would make rapid strides in limiting carbon emissions associated with manufacturing and distribution processes.

"Embodied carbon accounts for well over half of IT equipments' lifetime CO2 emissions and there is currently no differentiator between different machines' embodied carbon because all the vendors have the same supply chain," observed Mingay. "But they will soon all start doing full environmental lifecycle assessments and when they do that they will recognise opportunities to improve efficiency. I'd expect to see vendors make progress over the next two to three years and begin to try and differentiate themselves based on their full energy lifecycle."

Posted by James Murray on April 26, 2007 | Permalink | Comments (0)

European Commissioner Jose Manuel Barroso yesterday insisted he was confident that attitudes towards global warming in the US government were changing and that progress was being made in developing a joint EU-US strategy for tackling the problem, despite reports that negotiations ahead of a showpiece summit on the topic next week are close to deadlock.

Diplomats from the EU and US are currently working on a joint declaration on energy security ahead of next Monday's summit meeting between Barroso, President George Bush and German Chancellor Angela Merkel. But according to reports in the Financial Times yesterday only 50 percent of the declaration has been agreed with the US continuing to resist European calls for caps on carbon emissions and a formal connection between climate change and energy policy.

However, responding to questions from Institute of Directors' (IoD) director general Miles Templeman following his keynote address at the business gorup's annual conference, Barroso insisted that while there is not yet a consensus between the US and Europe on how best to tackle climate change the issue is now "very high on the agenda" and progress is being made towards an agreement.

He added that while the US has "not yet accepted the European position on having [carbon emission cutting] targets" there was a new urgency to negotiations.

Barroso insisted that the widely held perception in Europe that the US was dragging its heels in developing a climate change policy was misguided, noting that the US had invested heavily in developing green technologies.

He also claimed that the US government's traditional scepticism about climate change legislation was changing. "Public opinion has changed, Congress has changed," he said. "I believe we have a better opportunity than ever to work together."

However, Barroso insisted that an US-EU agreement on climate change policy was essential if India and China are to be encouraged to sign up to a global emissions reduction agreement.

Posted by James Murray on April 26, 2007 | Permalink | Comments (0)

I've never been a big fan of self-regulation. I'd hardly regard myself as a rampaging hedonist, but the idea of regulating yourself still sounds like a bit too much of an oxymoron.

Sadly it is a fact of life that left to their own devices many people will set up internal regulations that allow them to do pretty much what they like. If we were all capable of regulating ourselves there would be no need for any form of legislation and we could do away with all lawyers and spend the rest of days kicking back in some kind of earthly nirvana. Unless I've missed something we're not quite there yet.

There are many reasons to oppose self-regulation as a means of governing corporate activity, running from the fact that it is inherently undemocratic for an unelected cabal to decide what should and should not be regulated, through to the more obvious problem that there are no sanctions to punish those that decide that regulating themselves is not in their best interest.

However, the most compelling argument against self regulation is that it simply doesn't work.

Self-regulation has long been a bete noire of the environmental movement on the grounds that it is the principle delaying tactic for firms wishing to avoid moving towards sustainable business models.

Firms under pressure to address their environmental impact will often respond by claiming that they are aware of the problem and plan to tackle it by regulating themselves - which sounds great in principle as it allows legislators to avoid implementing unpopular and complicated new laws.

But while some companies, particularly within consumer facing industries, get brand value from regulating themselves and have an incentive to do so successfully, others have no such incentive and simply set up internal environmental regulations that are never policed and never open to third party assessment. As a result these polluting firms get environmentalists off their back and more importantly head off proper regulations while investing next to nothing in actually transforming their business to meet their internal environmental targets, many of which are probably not strict enough in the first place.

No where is this scandal more obvious than in the auto industry where for over a decade car manufacturers managed to head off European legislation imposing legally binding fuel efficiency targets upon new vehicles through the simple expedient of telling lawmakers that they would instead hit their own voluntary targets.

In 1998, the car manufacturers promised they would cut average emissions from new cars down from 188 grams per kilometre to 140 by 2008. But with no incentive for them to reach this target and no punishment if they failed they are expected to miss the voluntary target by almost half.

After almost a decade of seeing this self regulation fail the European Commission has finally got off its backside and proposed legally binding targets, but rather than thanking its lucky stars for the ten years of grace they received the auto industry has been lobbying ferociously to torpedo the new law and has already managed to get the emission targets watered down.

If you ever wanted to know why environmentalists are so hostile to self regulation, this sorry little affair provides your answer.

However, several recent developments have forced me to reassess my views on environmental self-regulation, albeit only slightly.

A couple of weeks ago, leading garden chain Wyevale declared that it was to stop selling patio heaters because of their not inconsiderable contribution to climate change.

Environmentalists have been lobbying for years for a ban on these grossly inefficient outdoor heaters, citing studies from the Energy Saving Trust which show they consume enough energy every hour to boil 400 cups of tea. Now Wyevale has decided to do what the government didn't have the nerve to do and ban them from its stores.

The move represents quite a gamble for Wyevale, which reportedly sold £250,000 worth of heaters last year. But the company has obviously calculated that the positive publicity it gains from being seen to be environmentally responsible will outweigh any lost sales.

A spokesman for Friends of the Earth welcomed the move, claiming that with the decision following on from a similar commitment from electrical retailer Currys to stop selling incandescent bulbs it demonstrated a shift in corporate priorities.

"In the past these types of companies would simply say they were responding to customer demand and keep selling polluting products," he said. "But now some are realising that even though these products are legally allowed they are so damaging they should not be selling them."

Self regulation may have a decidedly mixed record of success when it comes to imposing complex regulations on companies that have little to gain from complying with them. But when the self control in question is a simple ban on a polluting product then evidently self regulation can work, particularly when the company imposing the ban stands to generate positive PR.

There is also the hope that self regulating decisions such as those taken by Wyevale and Currys will embarrass either their rivals or even the government into following their lead.

I remain unconvinced that corporate self regulation alone can deliver the scale of business transformation required to deliver the cut in carbon emissions required – too many businesses will simply not see the benefits in complying with internal environmental regulations and the sight of them failing to meet their own standards will only fuel the accusations of greenwashing that do so much harm to the entire green business movement.

But with governments unwilling or unable to develop strong, equitable and well thought out environmental regulations responsible businesses can fill the regulatory void with their own sustainable best practices - and refusing to sell polluting products is perhaps the simplest and most effective place to start.

Meanwhile, those businesses that can not see an immmediate PR benefit in environmental self regulation should look at the experience of the European car industry and ask if meeting the voluntary targets in the first place would have proved cheaper for them in the long run than having to now comply with strict new emissions laws.

Posted by James Murray on April 25, 2007 | Permalink | Comments (1)

Eight leading British retailers joined forces yesterday to launch a major new campaign to help consumers cut their personal CO2 emissions.

Called We're in this Together the new campaign aims to provide people with practical solutions that will help cut their household emissions by one tonne over three years.

Organised by the non-government Climate Group, the campaign has already signed up support from B&Q, Barclaycard, British Gas, Marks & Spencer, O2, Royal & SunAlliance, BskyB and Tesco, and expects more companies, including HSBC and National Express, to join over the course of the year.

Under the scheme each of the companies involved have pledged to offer and develop specifically green services and products: B&Q has announced a half-price loft insulation offer; Barclaycard is launching a new "green" credit card; British Gas is offering free household energy audits; O2 has said it will reward customers who keep their old handset when changing their contract; BskyB has committed to sending out free software to customers that will switch off its set top box when not in use; and Royal & SunAlliance announced a trail scheme that would provide drivers with a "black box" that could telll them if they were not driving in a way that maximises fuel efficiency.

Meanwhile, M&S boss Stuart Rose said the company's latest green initiative would see it introduce "Think Climate" labels on clothes advising people to wash them at 30 degrees and Tesco chief executive Sir Terry Leahy said the supermarket would cut the price of energy efficient light bulbs in half.

"Our customers tell us that they want to do more in the fight against climate change, but want our help to make it easier and more affordable," he added. "To this end, we have set ourselves a target to sell 10 million energy saving light bulbs in the coming year [and] a big part of helping customers to buy green products is to bring the price down."

Speaking at the launch event in Central London, Prime Minister Tony Blair said the new campaign highlighted how the business community had realised that environmental best practices can provide a commercial advantage.

The campaign is likely to attract some criticism for focusing on headline-grabbing individual offers rather than company wide transformations, but it is also compelling evidence of the extent to which major retailers are willing to adapt their products and services to attract the increasingly influential "green pound".

Posted by James Murray on April 24, 2007 | Permalink | Comments (0)

Few sectors have jumped on the green marketing bandwagon faster than the world's IT companies, but in their rush to associate themselves with the environmental business zeitgeist have some of the largest names in software opened themselves up to charges of environmental hypocrisy?

That certainly seems to be the case at Microsoft, which last week took a break from talking up the green credentials of Vista and helping to promote the Live Earth concerts to launch a PR stunt that will see the company offer free taxis to Londoners.

Under the scheme, Microsoft has had 20 London taxis branded with Office 2007 livery and said that anyone hopping into the cabs between 7:30am and 9:30am can get a trial of the new software and a ride within zones one and two of the capital for free.

Attempting to explain the rather tenuous link between Microsoft Office and free taxis Darren Strange, UK product manager for Microsoft Office 2007, claimed that "as the weather gets hotter and the tube more unbearable, we are helping London's workers have a better day by laying on free cabs to keep them fresh in body and mind. Office 2007 is all about helping workers do their job better and, by allowing them to get a free taxi to work, we hope this will help them too."

That's right free taxis. Not free Tube travel, not free bicycles, not even free bio-fuel powered taxis, just good old-fashioned gas guzzling London cabs – for free.

Obviously someone within Microsoft's marketing department thought (or more likely didn’t think) that despite the company having recently pledged its support for the Live Earth concerts it was still a good idea for it to not only start paying for people's cabs in one of the most congested cities in the world but also start slagging off its public transport network.

A spokesman for Microsoft admitted that at no stage had an environmental impact assessment of the publicity campaign been undertaken, although he did add that it was thought none was necessary as the cabs would have been on the roads anyway.

Valid as this point maybe it has not stopped some commentators from branding the campaign as further evidence of Microsoft's environmental irresponsibility.

Meanwhile, on the other side of the Atlantic Microsoft's arch rival Google also found itself under fire today for its failure to divulge details about the power consumption of one of its new datacentres.

Writing at The Register, Ashlee Vance argued that while the search giant was happy to rejig its logo to show its support for World Earth Day it was less happy to inform people about its own contributions to global warming, or, as Vance puts it, its "possible penguin killing".

According to Vance, Google has recently purchased 800 acres of land in Oklahoma, and while the company has not confirmed what the land will be used for a new datacentre looks a safe prediction. Perhaps coincidentally, perhaps not, depending on your level of cynicism, the move was announced just days after the state's Governor signed a new law giving the largest corporate energy users the right to keep power consumption figures secret.

Vance argues that secrecy over energy consumption is becoming something of a habit for Google, noting how when asked about the energy and water consumption of a new datacentre in South Carolina Google's head of strategic development Rhett Weiss claimed that "we're in a highly competitive industry and, frankly, one or two little pieces of information like that in the hands of our competitors can do us considerable damage. So we can't discuss it."

It is not quite the transparent, environmentally responsible answer you'd expect from a company that has made a huge amount of marketing collateral from its free bikes for staff, its subsidies for employees wanting to buy green cars, and its pledge to never be "evil".

As Vance observes: "No such company can with a straight face claim that its energy consumption is a proprietary secret in this day and age (I doubt a rival could do much with the energy info anyway without knowing more details about a given data centre). Our most demanding energy eaters should disclose their toll on the environment."

It would be easy to paint Microsoft and Google's PR snafus as another example of corporate greenwashing, of large global companies trying to associate themselves with environmental good causes while refusing to make the changes required to back up their marketing rhetoric. But, for me, these embarrassing incidents look more like classic cases of internal communication breakdown.

What these two episodes illustrate - besides the ability of journalists to slam any company that departs from environmental best practices - is the damage that can be done when green thinking is not embedded at all levels of an organisation's marketing department.

Both Microsoft and Google have made pretty good progress in developing greener business models and while they both still have a long way to go they are not amongst the worst environmental offenders in the IT sector. However, these recent instances prove that while green strategies have been launched they remain stand alone initiatives rather than an entrenched part of the corporate culture.

Were green thinking properly embedded within Microsoft's marketing department it would be inconceivable that anyone could suggest a publicity campaign that supported cars and criticised public transport without someone else pointing out that this was a daft idea, in complete opposition to the prevailing public opinion, and in direct contradiction with the company's high profile green business campaigns.

Equally, if Google were taking a truly holistic approach to its environmental strategy it would have realised that hiding behind disingenuous arguments about corporate confidentiality in an attempt to evade questions on its environmental impact only undermines the good work it has done to establish itself as a leader in the adoption of green business practices.

What Microsoft and Google have shown is that as well as getting attacked for deliberate green washing firms will also increasingly face criticism if just one small part of their marketing and communications strategy falls out of synch with environmental best practices.

As such marketing execs right across the business need to assess how all their campaigns and communications fit into the company's overall green strategy before they give them the green light. Those that continue to fail to take this simple precaution will soon find themselves clearing their desks and looking for one of those Microsoft branded taxis to give them a free lift to the dole office.

Posted by James Murray on April 23, 2007 | Permalink | Comments (3)

The news last week that managed hosting specialist Rackspace is to open a state of the art datacentre running on power generated from burning woodchips may seem to some like evidence that the burgeoning green IT movement has finally taken leave of its luddite senses. But if some environmentalists are to be believed Rackspace's plans for a genuinely low carbon datacentre could provide a template for how growing numbers of businesses source their energy as we transition towards a low carbon economy.

Under its new plans Rackspace has committed to building a data centre at a site in Slough that not only makes use of the latest energy efficient hardware and software, but also sources all its energy from the local Slough Heat & Power biomass energy station, which generates hot water and electricity for local businesses by burning wood chips and fibre cubes made from used paper and cardboard. Any excess power the plant generates is then sold back to the national grid.

According to Slough Heat & Power this energy is extremely "low carbon" as the CO2 released when the woodchips are burnt was absorbed out of the atmosphere as the trees grew. The combined heat and power (CHP) plant is also highly efficient, as unlike conventional power stations the heat generated from producing electricity is captured and used to provide steam or hot water.

Jacques Greyling, managing director of Rackspace in Europe, Middle East and Africa, said that the 100,000 square feet site should be able to gain 90 percent of its energy from the local power station while a connection to the grid and onsite diesel generators will provide back up in the event of a power outage.

He also claimed that the power was no more expensive than that sourced from the grid and that the new facility would both appeal to customers increasingly interested in reducing their own carbon footprint and mitigate the risk of future legislation governing the energy consumption of datacentres.

The use of a local biomass-fired power station sidesteps the problems of reliability typically associated with more high profile means of microgeneration such as solar panels and wind turbines, which are not only costly but are often worse than useless for supporting mission critical systems such as those found in datacentres because of their inability to guarantee a constant supply of power.

It is a model that many environmentalists would like to see adopted on a wider scale. In his recent book Heat – How to Stop the Planet Burning radical journalist George Monbiot explores the viability of CHP systems and assesses how biomass and, on a larger scale, hydrogen powered CHP facilities capable of powering individual sites or local energy grids could potentially play a role in enhancing the efficiency of electricity generation and reducing the UK's carbon footprint.

At first glance the idea of Rackspace's wood-fired datacentre may look like a rather primitive solution for reducing the firm's carbon footprint, but in fact CHP plants represent one of the more technically feasible sources of clean energy and it would be no surprise to see growing numbers of firms and business estates investigating how this model could also work for them.

Posted by James Murray on April 23, 2007 | Permalink | Comments (0)

Several months ago I attended a press conference at the Office of Government Commerce (OGC) to launch its latest strategy for "professionalising" government procurement and estate management.

Speaking at the press conference to unveil the new Transforming Government Procurement document, OGC chief executive John Oughton said that the latest strategy was defined by a desire to deliver "value for money", which rather begs the question what was the government department in charge of all public sector procurement trying to deliver before? But, anyway, I digress.

After listening to an hour of civil servants talking about how they plan to get yet more value for money from our taxes by improving the government estate and getting different departments to work together when procuring goods and services, I asked if, in the light of the recent Stern Report and the government's targets for reducing carbon emissions, there was a case for focusing on vale for the environment as well as value for money?

There was, as I recall, a short silence – which was hardly surprising given that there was just a page on sustainable procurement in the whole 28 page strategy document – before one of the civil servants mentioned something about a cut in carbon emissions due to a recent fleet procurement deal and Oughton said that a separate Sustainable Procurement Action Plan would be available shortly featuring more details on how the government plans to help achieve its environmental targets and that the OGC did not want to pre-empt it.

Said Action Plan did indeed arrive in early March providing 60 pages on how the government plans to "be among the European Union (EU) leaders in sustainable procurement by 2009".

But if the government is big on sustainability Action Plans sustainability action is proving much more elusive, according to a damning new report from the National Audit Office (NAO).

The report found that the majority of government departments and agencies are failing to meet targets to make new buildings and major refurbishments sustainable and concluded that as a result it is not delivering value for money and is in serious danger of missing its targets to cut emissions by 30 percent by 2020.

While a few departments were singled out for praise the report found that in 2005-06 only 35 percent of new builds and 18 percent of refurbishments had carried out or planned to carry out environmental assessments.

Moreover, of those that did carry out assessments the majority of projects failed to achieve the NAO's top sustainability rankings of "excellent" or "very good".

The NAO said that a "fragmentation of policy responsibility among government bodies" and "lack of sufficient knowledge and expertise" were contributing directly to the lack of environmental awareness across government construction projects and recommended "that the bodies with central responsibility for sustainability in construction – including Defra, OGC and possibly the DTI – should establish a source of expertise available to all departments"  and provide more best practice support and advice for other departments.

It also warned that Whitehall needed to do more to challenge the perception that there was a conflict between value for money and sustainability, adding that contrary to perceptions amongst many civil servants environmentally sustainable projects tended to deliver more cost savings in the long term than those projects that ignore environmental considerations.

"When I last reported on construction in 2005, I emphasised the need to consider both the costs and benefits over the whole life of a building, not just the initial capital required," said head of the NAO Sir John Bourn. "Despite this, today's report highlights a continuing failure by departments to consider the long-term value of sustainability in their new builds and refurbishments."

The report is just the latest piece of evidence to highlight the hypocrisy at the heart of the government's recent environmental rhetoric.

Earlier this year a similar study from the Sustainable Development Commission concluded that the government would miss its target to reduce carbon emissions by 12.5 percent by 2010 and also revealed that many government departments were failing to record even basic environmental metrics.

Meanwhile, the farcical saga surrounding the DTI's Low Carbon Buildings Programme grants scheme took another twist today after The Guardian reported that the government has shut the household grants scheme down until May as it works out a better way of distributing grants.

According to several of the renewable energy installation providers effected by the decision the government also warned them that the delay could be extended if they complained to the press - something a government spokesperson denied.

Despite complaints that some installation firms have had to lay off staff as sales have plummeted, the government insisted that with the budget for the scheme having recently increased and demand for grants continuing to climb the delay was necessary to improve the allocation process and ensure that the grants were being properly spent on renewable energy installations.

However, once again the dichotomy between the government's rhetoric about the importance of tackling climate change and its ill conceived environmental policies has once again been laid bare.

It would be nice to think that these latest developments will embarrass the government into prioritising environmental considerations across civil service projects and finally sorting out its shambolic environmental grant and incentive schemes. But given embarrassment is an emotion that appears to have been surgically removed from all Members of Parliament it is far more likely that the government's inadequate environmental actions will continue to lag far behind its impressive rhetoric.

Posted by James Murray on April 20, 2007 | Permalink | Comments (0)

Governments need to undertake a complete overhaul of the tax system if they are to ever promote environmental best practices, according to controversial new proposals from unconventional Dutch entrepreneur Eckart Wintzen.

Speaking to an audience of investors and entrepreneurs at the Library House CleanTech conference earlier this week, Wintzen insisted that current tax systems built around income and value added tax were contributing directly to "ridiculous" environmentally unsustainable business models and that government's should instead tax based on the value a product extracts from the planet.

According to Wintzen, who founded global IT services giant BSO Atos Origin and now runs Ex'tent Green Venture Capital, governments have developed an almost surreal tax system where the highest taxes are levelled on manpower, where there is a big and renewable surplus of resources, while scarce and finite resources, such as oil and other essential raw materials, are hardly taxed at all.

It is this scenario where "our most scare resources cost almost nothing" that has led to the astounding profligacy of western economies, Wintzen argued. "If you buy a camera and it breaks you throw it away, because it will almost always cost more to fix it rather than replace it," he observed. "But in other countries where the material costs are high and the repair costs low you would get it fixed… We need to move towards a more services-focused economy, or what I call an immaterial economy."

He also argued that the low cost of resources had enabled a potentially dangerous level of globalisation that pays no consideration to the environment – a system where tomatoes that could have been grown with limited environmental impact in America are instead grown in heated greenhouses in the Netherlands and then flown to the US.

To tackle these environmentally damaging business models Wintzen proposes that Income and Value Added taxes should be replaced by a Value Extracted Tax (VET) which would be levied on all products and services based on the damage they have done to the environment and the cost of repairing that damage. Under the scheme, "every element, every mineral going into a product will be taxed".

A proposal for such a wide reaching green tax would cause many to balk at the complexity of imposing such a system, but speaking to GBN after his keynote speech Wintzen insisted it was perfectly feasible. He pointed out that scientific calculations for measuring the financial cost to the environment of different resources and processes were already well established and that companies kept all the records and accounts required to levy the correct tax. "Yes, it would be complex," he admitted, "but VAT is bloody complex… it would be no more complex than VAT."

Wintzen, who has already presented his idea to the Dutch finance minister and is "trying to get in touch with Al Gore" to talk about the plan, proposed that governments should begin the transition towards a VET system by forcing all firms to calculate and report on the environmental damage they do each year - something growing numbers of companies are doing already through CSR reports.

A universal labelling system - similar to that currently being piloted by the Carbon Trust - would then ensure that the environmental cost of each product is communicated to customers, before VET would then be gradually introduced as VAT and income tax were phased out, ensuring that the overall tax burden remains the same.

Wintzen accepted that gaining widespread political support for his proposals will prove difficult, particularly given that it ideally needs to be imposed right across the EU if it is to prove successful. However, he insisted that if such a tax regime were imposed it would resolve many of our environmental problems at a stroke.

"If all the damage done to the planet is paid for we would have a totally different economy," he said. "Products would change and environmentally damaging products would simply become unaffordable… if you repaired products that were broken rather than throwing them away you would get taxed less."

Realistically, Europe's finance ministers are more likely to agree to replace the euro with magic beans than they are to adopt Wintzen's drastic proposals. However, his plans have plenty to recommend them and he is right to highlight the absurdity of a tax regime that completely fails to discourage the consumption of scarce and strategically important resources.

Politicians would be advised to take a good long look at the idea of VET and in particular the way in which properly proportionate green taxes offer arguably the simplest means of forcing organisations to adopt environmentally sustainable business models.

Posted by James Murray on April 20, 2007 | Permalink | Comments (0)

British Gas has today launched a major new business division called British Gas New Energy designed to provide households and businesses with a wide range of low carbon products and services.

Alongside offering customers green energy tariffs and carbon offsets certified by the EU and the UN, the new business will also offer a wide range of services designed to improve the energy efficiency of customers' buildings.

In particular the company has pledged to only install A-rated high efficiency boilers, continue to develop its insulation installation programme, and also provide installation of both solar panels for heating water and photovoltaic cells.

British Gas said it had also inked an agreement with six local authorities that will see customers buying solar panels costing from £4,300 will qualify for a discount on their council tax of up to £500. The company said it hopes that other councils will also sign up to the new scheme.

An additional new service will see British Gas New Energy provide householders with Energy Performance Certificates (EPCs), which under recent legislation will become mandatory for those selling homes from June. The company said it had trained 500 of its engineers to carry out EPC surveys and give houses an EPC certificate detailing their energy efficiency.

"Most UK homes are poorly insulated and the energy loss and emissions levels from them are much higher than they could be," said Sam Laidlaw, chief executive of British Gas parent company Centrica. "We can use our expertise in the green energy sector to help home owners significantly reduce their impact on the environment and take a lead in this rapidly growing new business area."

The company admitted that the it will "take some time" for the new business unit to turn a profit, but argued that "overall the future UK market for domestic energy efficiency products, including microgeneration and energy efficient boilers, EPCs, loft and cavity wall insulation, has the potential to be worth several billion pounds per annum as awareness of the need for energy efficiency increases".

To coincide with the launch of the new business, British Gas committed to reduce its own energy usage by 10 percent on December 2006 levels by the end of 2007 and announced plans to cap emissions from its company car fleet from next month.

The company also said it would continue investment in new green technologies such as fuel cell domestic boilers, which are estimaed to slash household carbon emissions by half.

Posted by James Murray on April 19, 2007 | Permalink | Comments (1)

With the greening of business moving swiftly into the mainstream, there's been a renewed focus on greenwashing -- "what corporations do when they try to make themselves look more environmentally friendly than they really are," in the words of the watchdog group Sourcewatch.

The increased scrutiny isn't necessarily a bad thing. Companies should be held accountable for what they say and do. And there are plenty of examples where companies have attempted to apply a green sheen to their far-from-perfect environmental records. In the early 1990s, a handful of consumer-product companies were publicly spanked for their misleading green statements by the U.S. Federal Trade Commission as well as a consortium of state attorneys general led by Minnesota's then-A.G. Hubert Humphrey III.

But the feds, and most state and local governments, have opted out of policing green claims. With good reason: There are few agreed-upon standards for being a green business. (This is not the case for green products, for which there are numerous -- some would say too many -- certification schemes.) True, the FTC in 1992 promulgated some Green Marketing Guidelines, which say, in effect, that if you want to call something "recyclable," it's not enough that the claim be technically true; average consumers must be able to actually recycle it in their community. But again, that's about products, not companies.

More recently, we the people have assumed the role of green police, determining who's naughty and nice from a green-marketing perspective. With the help of blogs, wikis, and good old fashioned protests and press releases, activist groups and self-styled experts are exercising their constitutional right to have a point of view on the topic -- and broadcast it far and wide.

Is it a blessing or a curse? Probably a little of each. For starters, there's far from unanimity of opinion. Do BP's, or Wal-Mart's, or GE's green initiatives render them benevolent leaders or malevolent greenwashers? You can find passionate opinion claiming both.

I've been seeing the "G" word showing up more and more, in both local and national media. And while it's generally good that we maintain high standards for companies' seeking to claim environmental leadership, I can't help but ponder the hypocrisy of it all: how much more we expect of companies than of ourselves.

When I speak to audiences about the greening of business -- nearly every week these days, or so it seems -- I often conduct an informal poll to see how audience members behave in their personal lives: how many drive hybrids or carpool to work, or are simply driving less; how many have installed solar panels or purchase green energy for their homes; how many use organic or low-toxic gardening techniques; how many seek out locally produced goods; how many have taken the basic measures at home -- have installed energy-efficient light bulbs and appliances, water-saving devices, insulation and weatherstripping, and the like.

Some audiences are more tentative than others in volunteering answers, but even the most enthusiastic groups tend to have only a handful of members who appear to taking more than a few token actions.

That is, few of us have gone very far out of our way to make changes that we all know are necessary to address today's environmental challenges.

This admittedly unscientific research has limited value, of course, except to raise the inevitable question: Why aren't we doing what we're asking companies to do?

I'm guessing that in the few seconds it took for you to read the preceding question you've already formulated some kind of answer: It's hard to do everything right ... It takes too much time and costs too much ... I want to do these things, but never seem to get around to it ... My spouse/partner/friends don't share my interest in being environmentally responsible ... I'm not sure which products and companies are truly the good ones ... I have doubts that if I do these things that it'll really make a difference.

Sound even a little familiar? Does that make you malevolent? Probably not, though reasonable minds will disagree.

One need modify the above statements only slightly to make them appropriate for companies. As I've found over the past twenty years of engaging CEOs and line employees of companies both big and small, they, too, find it hard to do everything right, and though their intentions may be honorable, there always seem to be competing priorities. It may be that few of their competitors or trading partners are acting green, and being a pioneer can be lonely, not to mention set oneself up as a target for all kinds of slings and arrows. And they often wonder whether one business can really make a difference.

I'm not for a minute suggesting that companies be let off the hook. As I've said, they need to be held to high standards, especially those making green claims. But all of this begs a question that I've been asking audiences and discussing with hundreds of people over the past couple of years: What must a company do to be considered "green"? What is the minimum level of policies, programs, performance, and progress that a company must exhibit to be seen as green?

Or, more to the point: How good is "good enough"?

I don't have an answer to this question -- none of us does, and that's a problem. We know what it means to be "organic," or to be a "green building." There are standards for both. But we don't know what it means to be a green business. As with beauty, green is in the eye of the beholder.

As another Earth Day approaches, and the PR machines of activist groups and corporations alike rev up to promote countless campaigns, products, announcements, and self-promotional consumer tips, we'll no doubt see more than a few stories on greenwashing -- tales of companies that, despite their green-minded statements or claims, are far from perfect. (I've already been interviewed for several stories, both print and broadcast.)

As we watch and read these stories and, perhaps, proffer some inner expression of support -- "Attaboy! Nail those bastards!" -- it may well be worth committing a split second or two to self-reflection: "Am I really doing all that I can to address the environmental problems that concern me most?" "Do I profess one thing and do another?" "Do my friends think I'm greener than I really am?" "Am I holding others to a higher standard than myself?"

And, in the process, perhaps acknowledge that there is, indeed, a little greenwasher in all of us.

Joel Makower is the founder and Executive Editor of Greenbiz.com

This article first appeared at Greenbiz.com

Posted by James Murray on April 19, 2007 | Permalink | Comments (0)

Where do you find the greenest community in the western world? A rural village where everyone grows their own vegetables in a communal allotment and walks their kids to the local school, one of those new zero carbon suburban Passivhaus developments like BedZed in the UK where the buildings require next to no heating, or perhaps one of those virtually car free Dutch towns where everyone whizzes round on bicycles?

Nope, according to award winning architect and urban designer Chris Choa, the answer is Manhattan.

That's right; crowded, grid locked, high rise New York is "unintentially the greenest city in the world".

Speaking at Library House's inaugural Cleantech conference earlier this week, Choa who works for international environmental urban design practice EDAW, argued that far from being the polluting monstrosities they are often perceived to be very densely populated cities are in fact "the greenest places on the planet".

According to Choa, the secret to the green lifestyle inadvertently lived by many New Yorkers lies in the city's unusually high population density and the co-location of residential and commercial properties which allow many people to walk to work.

This high population density can only be supported by high-rise living, but Choa insists that apartment blocks are, again inadvertently, amongst the greenest buildings around. "In an apartment you have at most two external walls and, unless you are on the top or bottom floors, apartments above and below you," he said. "There is a lot being done to make houses like those at the BedZed development greener, but densely populated apartments are still much greener than the greenest green home."

Co-locating commercial and residential properties also cuts emissions associated with travel as people can "live 80 percent of their lives within five minutes of home", said Choa. In contrast, cities such as London, which are "in love with low rise", are doomed to see any improvement in the energy efficiency of homes and offices undermined by the fact people still have to commute long distances to work.

Choa also argued that public services and mass transit systems become far greener and more efficient when population density is high. He claimed that the unreliability of the London Underground network is a direct result of the city's low population density which means that the Tube can not generate enough revenue per kilometre of track to justify the investment necessary to deliver reliable services. In contrast, the tightly packed five districts of New York, he argued, generate enough revenue per kilometre of rail to underpin sufficient investment.

This high-density school of urban planning is becoming increasingly influential amongst architects interested in environmental sustainability and Choa's speech was followed by a presentation from Khaled Awad, director of property for Abu Dhabi's Masdar project for a new alternative energy city and R&D hub.

He detailed how the plans for the new city had been developed to follow the same principles of high density living found in Manhattan, adding that the walled city - which will be powered using renewable energy from a concentrated solar power plant and wind farm - had been developed using integrated design approaches that should allow people to live within 200m of all essential services.

Whether Europe with its traditional love or low rise buildings can ever embrace high density urban living is debatable and when questioned about the widespread cultural opposition to crowded cities and the perception that they have a lower quality of life, Choa admitted that as a life long fan of city living he was "biased" in his claims that well designed high density cities could improve quality of life.

However, while it is unlikely Europe will embrace high density living any time soon, it does remain inherently carbon inefficient to have a scenario such as that currently found in the City of London where hundreds of thousands of people commute up to a hundred miles or more to work each day before heading home in the evening to leave just a few thousand full time residents.

And while it may be difficult to get Brits and other Europeans to turn their backs on rural and suburban living city planners and businesses choosing new office locations need to be more aware that one of the biggest steps they can take to both reduce carbon emissions and improve their staff's work life balance is to better integrate transport networks and commercial and residential properties.

Living in an apartment just round the corner from work may not be everyone's idea of the perfect home, but may be it is time we took a few more lifestyle tips from the Big Green Apple.

Posted by James Murray on April 18, 2007 | Permalink | Comments (1)

Despite a public commitment from the European Union to lead the fight against climate change Europe is lagging behind the US in terms of venture capital investment in clean technology, according to new research released yesterday by investment research firm Library House.

The report entitled "Cleantech Goes Mainstream" found that while overall investment in clean technology companies is increasing with over £270m of venture capital invested in European Cleantech companies last year the continent is "increasingly lagging behind the US".

Recent data from investor group Cleantech Venture Network supported these claims, finding that while US venture capital funds invested over $800m in the second quarter of 2006, representing 13 percent of the total market, their European counterparts invested just $120m.

The report also found that the lack of European backing was creating an opportunity for US investors to fill the void, with US-based venture capitalists participating in more European cleantech deals last year than investors from any European country bar the UK.

In fact the UK was the dominant source of clean tech investment in Europe, with 40 percent of all European venture capital backed cleantech companies based in the UK. The report argued that the greater availability of capital in the UK was being driven by government support with almost half of UK cleantech deals having received public sector support.

Jonathan Kestenbaum, CEO of the National Endowment for Science, Technology and Arts (Nesta), which recently launched a £50m fund aimed at environmental, healthcare and ICT companies, said that the relative success of the UK was evidence that greater government support was required across Europe to stimulate investment in early stage clean tech companies. "We need to see more public funds acting as trailblazers by partnering with other investors and by taking risks with the kind of innovative entrepreneurs who may be able to provide solutions to some of these [environmental] issues," he said.

Speaking at its inaugural cleantech conference, Library House CEO Doug Richards argued that with venture capital investments proving three times more effective at increasing gross economic growth and driving innovation than other forms of investment the development of the European cleantech sector was being hampered by a lack of support from specialist investors.

"We need to see even more investment from public sector and also private venture capital firms," he said. "For investors, there is a significant opportunity in the sector as cleantech companies offer a rich vein of opportunities. Many early venture capital investments in the sector have paid off handsomely as investee companies have grown and exited, achieving market capitalisations of billions of euros in the process."

However, several other speakers at the event argued that the problem in Europe was not down to a lack of cleantech investment, but a lack of viable companies for venture capitalists to invest in. Both Neil Rimmer of Index Ventures and Ziad Tassabehji of the Abu Dhabi based Masdar Clean Tech Fund, claimed that the "shortage of great [cleantech] deal flow" in Europe was because "there was more money than [available] good deals".

Tassabehji also suggested that the current hype surrounding clean tech and in particular bio fuels in the US could have clouded some investors' judgment and could actually hamper the development of important green technologies. "Within weeks of the State of the Union address [in which President Bush unveiled plans for an almost fivefold increase in biofuel use] we saw countless biofuel companies emerge and in my opinion many of those companies are ridiculously over valued," he said. "Other [clean tech] subsectors like carbon sequestration, water purification and energy storage, which there are a real world need for, are seeing far slower deal flow."

Separately at the conference, Library House launched a new online subscription information service called VenturePedia Cleantech designed to address the current disconnect between potential investors and innovative private cleantech companies. Richards said the new service would track cleantech companies and venture capital deals around the world and provide potential investors with insight about how different companies, sectors and regions are performing and which companies are securing or seeking backing.

Posted by James Murray on April 18, 2007 | Permalink | Comments (0)

Few innovations illustrate the green potential of IT better than online and video conferencing. The recent boom in adoption of these next generation communication technologies has indisputably helped slow the still rapid growth in corporate travel and there is reason to hope that as these collaboration systems continue their march into the mainstream they could even lead to an overall reduction in carbon intensive business trips.

But, if my recent experiences are anything to go by, there is a danger that the environmental benefits of online meeting tools could be being undermined by some firms' failure to utilise the technology fully.

Over the past few months I have enjoyed/endured several product briefings with US IT companies, where instead of either a simple phone conversation I have been invited to sign into a popular online meeting site.

Once there all the great funtionality found in such collaboration suites has been instantly available - and yet all the portal has been used for is to walk me through a PowerPoint presentation detailing all the bells and whistles of whichever new product the person on the other end of the phone is trying to promote.

The only collaboration involved has been in the form of the phone conversation and the only reason I can see for using an online meeting to go through the presentation rather than just sending over the PowerPoint via email is that it means the other people in the meeting can be sure I am on the right slide and not idly surfing the web when I should be learning about their latest exciting acronym strategy.

Basically, vendors using online conferencing suites in this way are shelling out for next to no real benefit.

Of course, the only damage being done it to their marketing budget and from an environmental perspective it is great that the US execs I talk to are not being flown over to the UK when in most cases the briefing works pretty much as well over the phone - particularly if you have met the person you are talking to at least once in the past.

But my concern is that this failure to make full use of online conferencing capabilities is not confined to press briefings. If, as I suspect must be the case at some firms, this technology is being used to simply force PowerPoint presentations upon people rather than provide a genuinely collaborative forum for work and discussion then users will not only fail to maximise their return on investment but will ultimately alienate users of the technology.

Using conferencing technologies in this limited way also means that as soon as you have to undertake a task more complicated than simply passing on information - something you can do just as easily and at a lower cost using the phone or email - you are likely to think online conferencing can't help and will instead resort to getting in the car and travelling to meet your colleagues to work on the issue in hand.

Web conferencing is indisputably a Good Thing, cutting costs, driving productivity and reducing carbon emissions. But firms must be careful that in the rush to implement such systems they ensure that users are aware of the full functionality and that online conferencing portals are being used to genuinely replace unnecessary face-to-face meetings and not as a costly and at times intrusive addition to meetings that were going to be held over the phone anyway.

Posted by James Murray on April 17, 2007 | Permalink | Comments (3)

As owner and managing director of London-based lighting and electrical retail chain Ryness, James Shortridge spent much of last year witnessing first hand the growing demand for green technologies. As such he always suspected that an online business addressing this emerging market would prove popular, but that has not stopped him being taken aback by the success of Ecoelectricals.co.uk since it was launched by Ryness earlier this year.

"We went live in January and I've been really pleasantly surprised by the results," he says. "We're getting good numbers of orders everyday and it's all been achieved with very little marketing."

The secret to Ecoelectricals success lies in the simplicity of the idea. While other electrical retailers are increasingly offering energy efficient appliances and light bulbs alongside their traditional products Ecoelectricals stocks nothing but energy efficient bulbs and appliances that are rated in the most energy efficient A band by the Energy Savings Trust. "To paraphrase John Lewis it is a case of never knowingly selling energy inefficient products," observes Shortridge.

As a result, customers don't have to go through the hassle of checking the energy efficiency of the products they are interested in against other options as they know everything on the site is amongst the most efficient models available.

For Shortridge, a law graduate who gave up a career in banking as a fund manager to join Ryness back in 2004, the idea always felt like a winner. "What became obvious last year was that all we seemed to sell in store was energy efficient light bulbs, but we weren't enjoying the same success with them on our website, so we decided we'd try and address the problem and launch a purely green website," he remembers. "Once we'd decided we'd try to do it for lighting we realised there was no other place to buy other energy efficient electrical devices and decided to expand what we'd offer on the site to a wide range of appliances and gadgets."

Besides operating as a retail channel the site also aims to educate customers about the range of different energy efficient products available and the cost savings they can deliver.

"There is a real issue at the moment with this impression that if you are going to buy energy efficient lighting you have to buy these swirly bulbs that stick out of the top of your lamp shade and don't work with dimmer switches," complains Shortridge. "But we've got dimmable bulbs and a wide range of shapes and sizes and we need to get that message across because people are confused by this new market and some retailers will take advantage of that confusion [to keep selling inefficient models]."

One area where customers are clear however is in their belief that energy efficient products tend to be more expensive than standard models. It is an impression Shortridge is desperate to challenge. "Again education is critical," he claims. "We need to get the message across that yes this bulb may cost £15 but it will save you more than that pretty quickly."

To help communicate this message Ecoelectricals also sells a number of energy metering gadgets that measure how much energy a device uses and how much it is costing the customer. "Once you have this kind of meter the natural step is for you to move towards more energy efficient devices and also try to conserve energy where possible," says Shortridge, who claims the little monitoring dashboards are amongst the site's best seller. "For example, everyone knows you shouldn't fill up a kettle when you only need one cup of tea, but you are far more likely to do it when you can actually see what boiling the full kettle is costing you."

Shortridge is also hopeful the success of the site coupled with Ryness' purchasing power will help drive innovation in an electrical appliances industry that he accepts has been guilty of dragging its heels when it comes to developing energy efficient products. But with new EU legislation threatening to outlaw the most energy profligate products and customers more and more concerned about the environment he is confident manufacturers' attitudes are beginning to change.

Ecoelectricals can also expect a fillip in the next couple of years if Gordon Brown gets his way and convinces his European counterparts to back a 5 percent VAT rate for energy efficient products. Shortridge won't be holding his breath for a change that he predicts will take a long time to reach fruition, but insists that such incentives are vital if the government wants to help accelerate demand for these products.

"If you look at the popularity of electric cars in London a big part of that is down to the fact they don’t have to pay the congestion charge," he argues. "Market forces will have a huge role to play in combating climate change, but we need incentives to help drive those market forces."

In the meantime, Ecoelectricals is on the prowl for new products and revenue streams with Shortridge keen to expand the company's fledgling business-to-business customer base and investigating whether selling solar panels online would prove a hit with customers. "The thing with this sector at the moment is that it is moving so fast that we'll see a lot more products become available in the next six to nine months," he says. "We're going to keep investigating new products and expanding what we offer."

Posted by James Murray on April 16, 2007 | Permalink | Comments (0)

IBM and US electricity provider CenterPoint joined forces this week to form a new coalition dedicated to accelerating the adoption of so called Smart Grid technologies capable of enhancing the reliability and efficiency of electricity networks and informing users how much power they are consuming.

Executives from the two companies said that the new coalition would provide a global forum for energy and technology providers to share knowledge and best practices, promote industry standards and undertake strategic pilot projects. They added that more utility and technology companies from the US, Europe and Asia-Pacific are expected to join the group in the next few months.

"The Intelligent Utility Network will transform the way power is delivered, managed and used," said Guido Bartels, General Manager, IBM Global Energy & Utilities Industry. "As the group grows to include other utility companies and partners, members will have unique opportunities to apply new ways of thinking, new technologies and management strategies."

The idea of a "smart" electricity grid capable of closely monitoring energy flow and usage across an entire network and potentially even providing broadband and power over the same wires has long been a goal of grid operators who see it as an ideal way of improving fault detection, better matching power supply to demand, providing new services to customers and ultimately developing a "self-healing grid".

However, as pressure on energy providers to enhance their green credentials has grown many firms have also realised the potential for intelligent grid technologies to enhance energy efficiency and reduce overall power consumption.

One of the main goals of the new coalition is to develop and encourage adoption of integrated grid monitoring and communication technologies that can be used to show users how much energy they are using and also provide them with real time price signals for the power they are using.

In theory, this would encourage users to not only be more energy savvy, but also avoid using power when prices are highest at times of peak demand, thus reducing both their bills and the pressure on the grid.

This monitoring capability could also provide the foundation for numerous services and technologies designed to reduce consumption. For example, one pilot scheme in Washington State announced last year by IBM, Whirlpool and the U.S. Department of Energy allows households to set how much money they wish to spend each month on energy and then receive notification if they on track to exceed this amount.

Integrating the analytical information with electrical appliances themselves can further enhance energy efficiency, and in the second part of the pilot project Whirlpool has developed a washing machine that powers down elements of its operation when it is notified that the grid is under pressure.

Widespread adoption of smart grid technologies remains years away, but utility providers are increasingly convinced that such networks are feasible and with energy and technology companies apparently willing to co-operate in developing the standards that will be essential to smart grid development the idea of a network that automatically optimises itself to save power no longer seems like a pipe dream.

Posted by James Murray on April 13, 2007 | Permalink | Comments (2)

Environmentalists must shed their nagging "serious treehugger" image and become "hip and sexy" if they are to gain the public and political support required to tackle climate change.

That was the central message from Californian Governor Arnold Schwarzenegger's keynote speech at a global warming conference at Georgetown University yesterday, and while it is a bit bizarre to be taking advice on what is "hip and sexy" from a man who regards bodybuilding and posing pouches as attractive he may well have a point.

It is no coincidence that the environmental movement has got closer to the mainstream than ever before at a time when its PR strategy has finally got its act together and helped establish green issues as part of the zeitgeist. Old school environmentalists may sneer at the marketing machine in action, but the truth is that political and economic change is impossible without the marketeers' ability to mobilise public support. In many ways turning solar panels and other green products into desirable consumer items is just as important as making them more efficient and cost effective.

Encouragingly there is also plenty of evidence to suggest that environmentalists' reinvention as members of the in-crowd could be sustainable in the longer term. The green movement has always resonated with the young meaning it speaks to the demographic that ad men and women love more than any other; it is centred on new technologies and innovation which is inherently glamorous; it has ethical behaviour at its core at a time when the idea of doing good is riding high in the zeitgeist; and most importantly the burgeoning green business movement has access to the arguably greatest aphrodisiac of them all – money. Given this context it is surprising it has taken until now for the green movement to throw off its hemp and sandals image and emerge as a sexy and vibrant trend.

This may all seem pretty frivolous to the traditional treehuggers, but Schwarzenegger is right that getting rid of the killjoy image is one of the last big hurdles the environmental movement must leap if it to finally reach the political and business mainstream. As he observed: "I don't think any movement has ever made much progress based on guilt. Guilt is passive, guilt is inhibiting and guilt is defensive. ... Successful movements are built on passion, they're not built on guilt. They are built on passion, they are built on confidence and they are built on critical mass."

Hyperbole aside there is an important message here for any firm looking to implement green business models. Sustainability projects will only work if those implementing them are empowered and positive about the changes rather than feeling obligated and guilty. People are more likely to turn their PCs off at the end of the day for example if they are encouraged rather than ordered to do so. Developing a strong financial and risk case for any green business initiative is of course essential, but the branding and marketing of a project both internally and externally is just as important to its success.

Whether its installing building insulation or reengineering a whole supply chain environmental best practices need to be branded as part of a positive, innovative revolution rather than as a necessary chore if they are ever going to gain widespread support.

However, if Schwarzenegger is on the money with his highlighting of the importance of a "sexy" image to the success of the environmental movement he could not be more wrong about what should be done once it has gained mainstream influence.

It appears that the main reason Schwarzenegger wants environmentalists to throw off their nagging treehugger image is because they spend a lot of their time nagging him.

Talking about the criticism he has received for running a fleet of big cars he argued that their criticisms were misguided and pointed to his converting of his cars' engines to run on biodiesel as evidence of how investment in technology rather than living "the lives of Buddhist monks in Tibet" is the answer to curbing carbon emissions. "We don't have to go and take away the muscle cars," he said. "We don't have to take away Hummers or SUVs or anything like this, because that's a formula for failure. Instead we have to make those cars more environmentally muscular."

In essence, what Schwarzenegger and many other politicians seem to be saying is that environmentalists should stop behaving "like prohibitionists at the fraternity party" because technology will ensure everything will be alright without anyone having to make any major sacrifices or fundamental changes to their lifestyles and business models. According to Schwarzenegger, he doesn't need to get rid of his private jet after all.

But while this "technology will save us" message makes for great political oratory it is a recipe for long term climatic disaster. Schwarzenegger is right that the development of green technologies are likely to deliver more environmental benefits than prohibitionist regulatory measures – but why does it have to be an either or equation? Why can't you run a car on biofuels and still replace the SUV with a model that is greener still? Given the scale of the global warming crisis we are simply not in a position to regard these two different strategies for fighting climate change as mutually exclusive.

Under pressure from voters it is very hard for politicians to be honest about the scale of the challenge posed by reducing carbon emissions and in fairness to Schwarzenegger he has done more than most to begin the transition towards a low carbon economy – most notably in his proposals to put a legal cap on car emissions as part of a plan that will force manufacturers to invest more in greener technologies.

But there is a danger inherent to this approach of reassuring people and businesses that they do not have to make fundamental changes, because failing to face up to the fact that certain products and behaviours are simply unsustainable will only make it harder for politicians to push through the necessary changes when they realise we are not reducing carbon emissions fast enough to stabilise the climate.

For example, Schwarzenegger has publicly vowed to support the Hummer and the SUV by claiming that biofuels or hydrogen cells can make them environmentally friendly, but where does he go if, as many scientists believe, biofuels are proved to be more environmentally damaging than conventional fuels or hydrogen cells fail to make the transition from the lab to the production line? Does he change his position and urge people to avoid gas guzzlers or does he allow them to continue to pollute and see his environmental credentials go up in smoke?

Environmentalists do indeed need to become sexier and they must work harder to paint green lifestyles and business models as a positive choice rather than an onerous necessity. But they must also use their new found glamour and influence to push for the real changes necessary to deliver a low carbon economy and not kow tow to politicians who are unwilling to make the difficult long term decisions required to accelerate the green revolution.

Posted by James Murray on April 12, 2007 | Permalink | Comments (2)

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