More Companies Finding Benefits from Reducing GHG Emissions

Forward thinking companies are gaining a competitive advantage and expanded profits by leading the way in addressing climate change.

According to a recent report from Goldman Sachs, companies that are leaders in environment; and good governance policies have outperformed Morgan Stanley Capital International World Index by 25 percent. Seventy-two percent of the companies outperformed industry peers.

That’s why I was intrigued by a new report, The Economic Case for Climate Action. It maintains that companies that implement climate-protection programs can enhance their financial performance by cutting energy and materials costs in industrial processes, facilities design and management and fleet management. They can enhance core business value through sector performance leadership and first-mover advantage, gain easier access to capital, improve corporate governance, strengthen their ability to drive innovation and improve government relations. Doing this helps companies retain competitive advantage, enhance their reputation and brand equity and increase their ability to capture market share and differentiate their products. Such programs increase companies’ abilities to attract and retain the best talent; increase employee productivity and health; improve communication, creativity and morale in the workplace and achieve better stakeholder relations.

The report provided examples of companies that are using proactive climate change measures to gain a business advantage. For example:

• DuPont pledged in 1999 to reduce its greenhouse gas emissions 65 percent below its 1990 levels by 2010 and obtain 10 percent of its energy and 25 percent of its feedstocks from renewables. The company made this announcement in the name of increasing shareholder value and delivered on that promise, when, during the same period, the value of DuPont stock increased 340 percent as the company reduced global emissions 67 percent for a savings, to date, of $3 billion.
• ST Microelectronics pledged to become carbon neutral (zero net CO2 emissions) by 2010 with a forty-fold increase in production. Figuring out how to do this drove the company’s innovation, taking it from the twelfth-largest microchip manufacturer in the world to the sixth. ST gained market share, won awards, and believes it will have saved almost a billion dollars by the time it meets its goal.
• Wal-Mart the world’s largest retailer; pledged to reduce energy use at its stores by 30 percent over three years; become carbon neutral; become 100 percent powered by renewable energy; double the efficiency of its vehicle fleet; build hybrid-electric long-haul trucks and sell millions of compact fluorescent light bulbs.

These companies realize that cutting carbon emissions and other greenhouse gases is a winning strategy. Using energy more efficiently not only reduces carbon emissions, and reduces risk and costs.

Add comment May 16th, 2008

Smart Technology Helps Make Buildings More Sustainable

As buildings get smarter and the devices in them can communicate with networks, we will be better able to collect and interpret EHS data and meet sustainability objectives. Some buildings, like the Louvre Museum in Paris and the Sears Tower in Chicago, are already smart, and their networks enable energy efficiency and reduce pressure on the grid. In addition, they enable consistent monitoring and collection of data to minimize risk.

It seems to me that smart buildings should be part of a sustainability strategy that proposes to get ahead of incidents, not just respond to them. One of the providers of networked controls for these buildings, Echelon, a technology company, works closely with Duke Energy, one of our clients. Duke Energy’s “Utility of the Future and Save-a-Watt programs are integral to our vision of embracing the latest and most reliable networking technologies to bring about a new age in electricity delivery, distribution and management — one that is driven by knowledgeable consumers, customer-service and energy efficiency.” Those words come directly from CEO Jim Rogers at an Echelon event yesterday.

Echelon, which is celebrating its 20th anniversary this week, was founded by one of the co-founders of Apple, Mike Markkula. Here’s how he describes his vision: “Twenty years ago I founded Echelon with the simple idea that if tiny computers could be embedded all around us, monitoring and sensing their local environment and communicating that information with others of their kind, we could transform industries. We saw a world of smart buildings, factories, homes and utility networks that used our technology to run more efficiently; lower costs; and improve quality, productivity and comfort. It took a tremendous amount of invention and innovation to bring that idea to reality – a reality that has exceeded my imagination. Today there are devices around the world networked with our technology, bringing intelligence to the infrastructure all around us and driving change across these industries and more.”

So when Echelon built its corporate headquarters in San Jose during the California energy crisis a few years ago, it “ate its own dog food,” integrating its LONWorks open source embedded network technologies into the building at an incremental cost of about $3 per foot. Now its systems can make energy use plummet by 30 percent within three minutes, which is a good way to respond to the threat of rolling blackouts. The Bay Area in California is often subject to such blackouts during heat waves, as are most Southwest cities.

As humans get smarter about integrating devices and platforms, we can mitigate the effects of climate change. I admire Mike Markkula.

Add comment May 16th, 2008