During these last months we've witnessed the implosion of capitalism as usual. In the process some basic assumptions have gone kaboom, for instance, the notion that you can repackage and sell highly questionable  loans, and that as long as you keep them moving from one owner to the next, they'll never come back and bite you in the assets.

 

 

Over the course of the centuries, countless opportunists and ne'er-do-wells have based their lives on the proposition that "I may be worthless in this town, but in the next town I'll be okay." Ironic as it seems, a similar intuition appears to have been fueling the titans of Wall Street. Just keep on moving that debt downstream and everything will be fine!

Only it's a small world now, and the frontier isn't limitless, and the bucks have stopped here and brought down the house.

It's not entirely a bad thing when a system collapses. The destruction of the old makes room for the new: you can't have a phoenix without ashes.

We now have a once-in-a-lifetime opportunity to erect a sustainable economic system—which is to say, an economic system that's dramatically different from the one that we're witnessing in its death throes.

Kudos to the Obama Administration for pledging to make clean tech and green jobs centerpieces of the new economy.

However, a truly comprehensive sustainability makeover would do more than that. It would address all the deep structures of our current economy that have made it so unsustainable.

Here's my starting list of what would be required to create a truly sustainable economy.

Make It Real. Assets need to have real value. This is a complicated subject, too complicated for a post of this length (never mind my easily boggled brain). The basic point is this: don't pass off junk as having value. Sustainability requires assets to have verifiable worth.

Make It Sustainable. The economist E.F. Schumacher said it years ago: small is better. Local is also almost always better, too—it builds community, and it also reduces the financial and environmental costs of shipping things around the globe. In an increasingly carbon-challenged world, that's no small matter.

The current economic system favors the big, global players. We need to do more than support clean tech and green jobs. We also need to tilt the playing field to favor the small and local.

Police the Bad Actors. The last few news cycles have been dominated by stories about fraud on a massive scale. The financier Bernard Madoff was arrested for running a $50 billion Ponzi scheme, while prominent New York City lawyer Marc Dreier was arrested for a $100M fraud that involved, in the words of The New York Times, "selling phony debt to hungry hedge funds looking for deals." By today's $700 billion bailout standard, $50 billion is chump change, and $100 million is even chumpier. Still, scandals like these say a lot about the culture of corruption on Wall Street.

While there will always be criminals and con men, we seem to have been doing an especially good job these last years of creating a culture (in the sense of a petri dish) for bacteria like these to thrive in. In a sustainable economy, we'd throw the book at the crooks, and we'd also work night and day to put an end to the culture that sorta kinda makes it okay to betray people's trust in the first place. Corruption and sustainability are incompatible.

Transform the Story. Capitalism isn't only about externalities--the free market, or the rules and regulations (or lack thereof) that govern it. It also has an internal aspect: it's an idea that inhabits our minds.

For years, our story about capitalism has been what Professor Ed Freeman of the University of Virginia has called "cowboy capitalism." It's a model that "conceptualizes business as a competitive jungle resting on self-interest and an urge for competition in order to survive." 

As Freeman himself has pointed out, that's not the only possible story about capitalism. The free market can also be tethered to the greater good. Why not a more ennobling story about capitalism that brings an end to the historic schism between greed and service? Why not a narrative about capitalism that positions it as the engine of green and ethical change?

A softer, more gentle capitalism is not necessarily a weaker capitalism.

And this isn't just talk: models are emerging. There is the ascendance of socially responsible business, which we might think of as "greener business," and there is also the still bolder concept of the social enterprise, which marries the wealth-creation mission of business with the service mission of the non-profit sector. The leaders of the Obama Administration should use the bully pulpit to espouse both of these approaches and in the process help to foster the emergence of a new narrative about the nature and purpose of capitalism.

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Are these idealistic views realistic? Are these things achievable? In my view, yes. It wouldn't cost a lot of money to tilt the playing field toward small and local. As for propagating a new story of capitalism, the total cost of that would be a few well-chosen sentences at an Obama press conference plus whatever time it takes to develop favorable legal and financial incentives for socially responsible businesses and social enterprises.

Nor should we forget that this appears to be a time of rare consensus, when people at all points along the political continuum agree that we can only get out of our current mess by pursuing dramatic change. The diem is here and it's ripe for the carping.

The one thing that's required to push the "go" button on all this is a slight but crucial shift in focus. Instead of simply applauding the Obama Administration for its laudable eco-plans, we need to also be asking, Are clean tech and green jobs alone enough to make our economy truly sustainable? If not, what's missing? What else do we need to do?

You get the right answers by asking the right questions, and you get the right questions by looking through the right lens.

The lens is the first step.

The lens is everything.

 

Image courtesy of Wikimedia.

In this world of rapidly diminishing resources, there's one commodity that we have too much of—greenwashing.

The last few weeks have seen yet more examples of the same old same old:

--The American Coalition for Clean Coal Electricity (ACCCE), a coal industry-funded organization, launched an ad campaign featuring adorable lumps of coal singing variations on familliar holiday songs. Sample titles include "Deck the Halls (with Clean Coal)" and "Frosty the Coalman." A sample line: There must have been some magic in clean coal technology/For when they looked for pollutants there were nearly none to see. One little problem, though: many people view "clean coal" as an oxymoron. (Update: the ACCCE has now pulled this campaign. They were getting lots of grief about it ... only lumps of coal for reviews.)

--Don Blankenship, the CEO of Massey Energy, the fourth-largest coal producer in the US, jumped the shark in a recent speech with comments like, "I don't believe climate change is real," "The greeniacs are taking over the world," and "Al Gore, Nancy Pelosi and Harry Reid don't know what they're talking about, they're totally wrong. What they do is nonsense ... pretty simple, they're all crazy." Meanwhile his company's 2008 social responsibility report proclaimed its commitment to "address emissions issues, operations and facilities in the United States and abroad, as well as significant resources allocated to research ..." Writing in The Huffington Post, Kevin Grandia had a word for this: greenwashing.

--Last month, smack-dab in the middle of its highly-publicized Green Week, NBC laid off the entire staff of the Weather Channel's Forecast Earth, the only one of the station's programs that focused on climate change. Maybe it was just bad timing, but it exposed the Peacock to charges of being less than wholehearted in its commitment.

Does that make NBC's Green Week a scam? Not necessarily. Greenwashing is a complicated subject—and so is life inside companies. Sometimes the corporate left hand doesn't know what the corporate right hand's doing. Sometimes it does know but goes ahead anyway.

If you're inclined to view this as too gentle on corporations, you might want to re-consider. We all have competing impulses. We want to save money and we also want that fancy, spoil yourself vacation. We want to go fishing by ourselves and also spend time with our kids. Why should big ol' sprawling corporations be any different?

I've been tracking green marketing—and greenwashing—since the early 1990s, when I founded and wrote a newsletter called Green MarketAlert. Almost twenty years have passed since that very early chapter in green consumerism's history, yet things are in many ways the same. Some companies try to do their green advertising right, others feel drawn to test the edge—and a handul gallop far beyond it and are just plain outrageous.

Many companies are also still climbing the learning curve. It's not that it's taken them two decades to get the message, but that as green has gone more mainstream, more and more companies are needing to get educated. Scot Case, a vice-president with TerraChoice, an environmental marketing firm, says, "People who've been in this business for a while have learned that green marketing is really complicated. A lot of manufacturers are currently climbing that same learning curve. When they go astray, it's often not due to intentional misrepresentation but because they're still learning."

Another similarity is the continuing shortfall in guidance and enforcement. The Federal Trade Commission (FTC) issued guidelines in the early 1990s, but they haven't been updated since, get this, 1998. That's ... last century! The guidelines, says Case, "are completely inadequate."

Earlier this year the FTC did hold hearings on environmental marketing, but no updates have been published yet. And even if its guidelines are made current, it doesn't have an enforcement budget. Which makes the guidelines toothless as well as outdated.

To fill the gap, TerraChoice has published an informal guidance document called The Six Sins of Greenwashing. On the off chance that you're about to commit greenwashing but are open to being saved, here they are:

Sin of the Hidden Trade-Off. Your claim might be true, but what did you give up to get that claim? Scott Case calls this a "Houdini trick—you focus everyone attention's on one aspect and hide the other stuff." Bully on you if you got your lumber from a sustainably harvested forest in Outer Marzbekistan … but what were the energy costs involved in transporting it from there?

Sin of No Proof. You make a claim but don't back it up. The best way to prove a claim? Formal product certification.

Sin of Vagueness. Six Sins cites garden insecticides promoted as "chemical-free" as an example. "In fact, nothing is free of chemicals. Water is a chemical. All plants, animals, and humans are made of chemicals as are all of our products … (W)atch for other popular vague green terms: “non-toxic”, “all-natural”, “environmentally-friendly”, and “earth-friendly.”

Sin of Irrelevance. The claim is true but meaningless. "No whales were harpooned in the making of this toilet."

Sin of the Lesser of Two Evils. Six Sins cites "organic tobacco" as an example. It's another Houdini trick. You shout "Lookee here!" because you're trying to draw attention away from something big and problematic.

Sin  of Fibbing. Also known as lying.

Although a useful document, The Six Sins of Greenwashing has its limitations. For one thing, you have to know about the document to use it, and it doesn't exactly have Gideon's Bible status in corporate marketing offices. Plus, it will only be sought out by marketers who'd rather not sin. Frankly, Scarlett, hard-core greenwashers won't give a damn.

Things have also changed, though, even as they've stayed the same. Most of all, the scale is vastly different now. As green has gone mainstream, green marketing has done the same--and so has greenwashing, its black-sheep cousin.

Our global environmental crisis has also intensified. Twenty years ago, people hadn't even heard the term "climate change." Now they're getting flooded by it.

The fat is in the fire now, and that makes it all the more important for green advertising to be consistently credible. Otherwise it will be considerably more difficult for purchasers to make knowledgable green choices, and this will have a dampening effect on consumers and producers alike.

At this point, it's pretty clear that next January will see the swearing-in of the first genuinely green Administration in our history. While the bulk of the media attention to date has been on Obama's support of clean tech and green jobs, a comprehensive Administration commitment would attend to the other important moving parts as well—and that includes green marketing.

Here's hoping the Obama Administration nudges the FTC to promptly issue updated environmental marketing guidelines with real teeth, and that it also gives the Commission the sort of enforcement budget that will let it put its money where its incisors are.

The Greater Toronto Airports Authority (GTAA) and the Toronto Region Conservation Authority (TRCA) have formed Partners in Project Green, “North America’s largest eco-business zone.”

Under the project, approximately 12,000 hectares of industrial and commercial area have been set aside in an effort to enhance the current businesses operating within and around the Toronto Pearson International Airport. In addition to improving existing offices, the project is expected to generate additional business leasing in the airport area.

Partners in Project Green began by recognizing that greening business operations has become a key component to success.  As economic purse strings tighten, the costs of doing business rise, and new environmental regulations take effect, investing in environmental technology like energy efficient lighting, recycling waste products from business operations, and more, make sense as ways to reduce costs.

The project also operates on the fundamental philosophy that by working together businesses can achieve more for the environment than they could working apart.  The project is expected to mark the Toronto region as an area flourishing in eco-businesses, green jobs, and implementation of green technology practices.

October 9th was the official kick-off of the project, and ceremonies included words from politicians, John Gerretsen, Ontario Minister of the Environment, Donna Cansfield, Ontario Minister of Natural Resources and project leaders like Lloyd McCoomb of GTAA, and Brian Denney of TRCA. Complete with a view of the stars from the center of the airport, businesses and the public gathered to learn more about the economic advantages of going green and reducing environmental issues associated with operating a business.

The Project Green Eco-Business Zone (the project’s official name) will provide various programs through which businesses can identify ways to operate in a manner that is safer for the environment and makes good business sense. Running a business from a retrofitted green building, for example can reduce its carbon footprint and trim energy costs. Other solutions include creating more and better commuting options for employees, the ability to buy green office supplies at cheaper costs, perform energy audits, create waste reduction plans, install stormwater management bio-swales, make use of natural landscaping, and offer open, vegetated spaces.

More than 250 businesses are taking part in the project alongside supportive local communities.

(This is the first installment of The Visionary Times, a recurring column focusing on positive-change projects from around the world that stand out for their transformative nature and practical potential.)

How does positive change happen? Some say it’s mainly driven by science and technology——solar power, for instance. For others, the work mostly comes from our inner being. We must, in Gandhi’s phrase, "be the change we wish to see in the world.”

There’s another approach to enacting change -- transforming the systems and processes that determine what can get done, and what does get done, and how it gets done.

Rewriting the rules to favor progress toward sustainability is no picnic. Institutional inertia, red tape, and the politics of ego are just a few of the obstacles that need to be addressed. It requires persistence and patience, and there’s not much glory, but that isn’t keeping cadres of quiet heroes from driving change.

One system that’s attracting special attention is how we organize our, er, organizations. There are currently three institutional sectors——private, public and non-profit. This structure is so embedded in our consciousness that it’s easy to view it as fixed and unchangeable, like our need for oxygen. This is an illusion. "People created our current organizational forms and people can change them too,” says Heerad Sabeti, co-founder and co-chair of the Fourth Sector Network, a volunteer group that has done seminal work in this area.

The need for transformation is obvious. As presently structured, our organizational forms keep people from, to paraphrase the Army, being all they can be. The for-profit form -- especially for publicly traded companies -- requires people to focus solely on profits. Executives can even be sued for subordinating the maximization of profits to a social purpose.

By contrast, the non-profit sector has historically depended on grants and donations, which fosters a mindset that discourages initiative and innovation. As for the public sector, one word says it all: bureaucracy.

People are much more complex and multi-dimensional than these rules of the road allow for. They want to be entrepreneurial and heart-centered. They want to prosper and serve. Our current organizational forms require them to choose Column A or Column B. They deliver half a loaf. Neither people nor the planet fully benefit.

Despite these institutional obstacles, people are rapidly building hybrid organizations that are both profit-driven and have a social purpose.

They have their work cut out for them. "We currently force social entrepreneurs to choose between being a for-profit or non-profit, although this is often a make-do and make-work solution," says Alan Abramson, senior fellow at the Aspen Institute and a professor at George Mason University, This has brought people to a basic question: "why not create a new legal space that has been designed to help social entrepreneurs flourish?"

Momentum is building for a fourth organizational sector that combines the best of the for-profit and non-profit forms, and the potential payoff is immense.

Imagine:

New organizational forms that not only permit, but actually encourage, people to combine kick-ass entrepreneurialism with a strong social purpose.

These organizational forms deployed with the support of millions of people around the world.

The emergence of a robust alternative to our current "greed is good” business culture.

The vast genius of capitalism——all that innovative energy!——unleashed to advance the public good.

This is the promise of the Fourth Sector.

The concept has gotten surprisingly little press, the one notable exception being a major article in The New York Times. It’s captured lots of underground attention, though, attracting professors, students, lawyers, foundation executives, social entrepreneurs and, yes, the occasional snake oil salesman too.

A wealth of Fourth Sector-related activity is bubbling up in the United States and across the world. Harvard, Stanford, and Duke are among the universities that have established social entrepreneurship centers in their business schools. Venture capital firms for social enterprises are springing up. Certification programs for social enterprises have been launched. Vermont has enacted a statute that confers formal legal status on some types of social enterprise, although the jury is still out on whether there’s steak there or just sizzle.

This boom is growing out of multiple on-the-ground vectors. The trend for businesses to be more socially conscious has been growing. This is reflected in a multitude of new terms: socially responsible business, green business, the "triple bottom line” (financial, social and environmental), and so on.

Meanwhile the non-profit sector has become more business-like in its operations. Foundations are increasingly demanding metrics; more and more non-profits are creating for-profit subsidiaries to fund their operations. A fourth organizational sector comprised of hybrid organizational forms is the logical culmination of these trends. It has the potential to take root across every industry.

This is a hydra-headed movement without a strong gravitational center. If there is a center point, it is the Fourth Sector Network, which has received funding from the Aspen Institute and the W.K. Kellogg Foundation and will be convening the first major Fourth Sector assembly in 2009.

If anyone warrants credit for the Fourth Sector vision, it is Network co-founder Sabeti, who’s been working for years behind the scenes to bring the concept to fruition. Sabeti brings a strong distaste for the spotlight to his work. This is reflected in his views on how best to nurture the Fourth Sector.

"The movement needs to be collectively owned and created,” Sabeti says. "The old models of command-and-control organizing and charismatic leadership will just perpetuate the problems we’re trying to solve. Instead, we need to develop structures that distribute leadership, facilitate massive collaboration, and advance systemic solutions.”

Names have special power: they organize energy around a shared perception. The Fourth Sector is, among other things, a luminous descriptor. It shines a higher-level spotlight on what all the current on-the-ground activity is pointing towards -- a new and sustainability-friendly organizational sector. It helps change agents understand the sea they’re swimming in.

So here’s another spin on how positive change happens. It happens when we can see and understand it. It happens when it gets a name.

Carl Frankel is Senior Writer at Matter Network, and an entrepreneur specializing in sustainability. He is also the author of Out of the Labyrinth: Who We Are, How We Go Wrong, and What We Can Do About It.

(Image courtesy Wikimedia commons.)

" />Dan Beard is the Chief Administrative Officer (CAO) for the U.S. House of Representatives. For the past year and a half, he has been leading the "Green the Capitol" initiative that aims to reduce the House of Representatives' carbon footprint.

Matter Network's John Gartner spoke with Beard about what he has learned rolling out an organization-wide sustainability directive, including how to communicate with employees and suppliers.

 Listen to the interview here. 

Matter Network: What previous experiences in the private sector helped to prepare you for your work in greening the House of Representatives?

Dan Beard: None. The biggest challenges have been people problems and I don't think there's anything particular about the private sector that prepares you for that. Life experiences prepare you more than anything else. It is also managing people and changing the way they do business. There's an attitudinal problem that people don't like change. We are a fishbowl where there are two sides to every issue -- Republican and Democrat -- and I don't think greening is any different. We've gotten a lot of criticism, and the Republican leader has called for my removal, primarily because we've been leading this greening effort and he doesn't believe that it is a good thing.

MN: Have you learned anything constructive from this criticism about the greening initiative?

DB: Yes, I think one of the most important things is I've learned to speak about the entire exercise in a different way. I've always thought that this was the right thing to do, and I naively assumed that people would agree. Many people don't. So I've learned to speak about it for the positive, measurable impact it will have: Things like the amount of money and energy savings tend to get you further than if you just talk about it being the right thing to do.

MN: Going carbon neutral is an "in" thing these days with many organizations and it makes for a good PR story. What other benefits do you see for organizations that go carbon neutral?

DB: I take issue with people who view going carbon neutral as a PR exercise. Carbon is a measure of what you are doing to perform your daily job. That's the real value of using carbon as a measure. The tangible benefit is that you are saving money and saving energy. If you are working towards the goal of being carbon neutral, that's a real positive value to achieve. I think being carbon neutral has gotten a bad rap.

MN: What about companies that just buy carbon offsets and may not do anything different in terms of conserving energy or using renewable resources? Can they do more to improve the image of carbon neutrality?

DB: There are some people who are trying to game the system. Those of us who are trying to reduce the amount of carbon released into atmosphere shouldn't be viewed as [conducting] a PR stunt. As long as there is a voluntary system, this is the approach we're going to have to take. If I replace 30,000 light bulbs with compact fluorescent bulbs and I save the organization $120,000 a year, is that a stunt? It is irresponsible on my part not to do that ... not to use less energy.

MN: As part of the greening -the-capitol process, you've asked employees to partner with you. What are the best ways of  giving employees incentives to help to make an organization sustainable?

DB: Make greening an integral part of your business at every level ... of what every employee does in [your] organization. I have 700 people in this organization. Rather than asking four people to be responsible for greening, I'm asking every employee. For example, for our procurement person -- we're going to have a greening requirement for those companies who provide products to us.

MN: So is their participation in the greening process now part of every employee's job performance evaluation?

DB: I have only gotten it down to the supervisory level as far as their evaluations, but we'll eventually get it down to every employee. The point is this isn't a 2 X 4 that we are clubbing people over the head with. We are trying to unlock imagination and creativity on the part of our employees. For example, the woman who runs our office supply store -- it was her idea to use 100 percent post consumer recycled paper. She found the companies and she evaluated them and then made the selection.

MN: Another trend in business is the creation of the role of chief sustainability officer. Do you think that distinct role is necessary, or can it be shared among the CTO, CIO, CEO and other executives?

DB: I really like the idea. We don't have one in my organization, and if we did, I guess it would be me. I think it is important, given the role of sustainability in the future of doing business, that you designate someone to have that responsibility. Then, you really have someone who comes to work in the morning, and it's the first thing they think about.

MN: The House, as part of the federal government, can have tremendous influence on suppliers in demanding sustainable products. Are there strategies that other organizations can adopt in negotiating with suppliers?

DB: I think what you're going to see is every business and organization, including federal, state and local governments, begin to make these kind of [sustainable product] requirements on their suppliers, and it will become an integral part of the way we do business. That's how you drive it through the economy.... It's going to create markets.

MN: What has been your biggest frustration so far in the process of greening the House?

DB: The biggest frustration has been the age-old problem that people don't like change. If I had a dollar for every time someone said, "Oh, we don't do it that way," I'd be a rich man.... It's dealing with human nature. Driving that change and dealing with the nature of human beings has been so frustrating because for me it is so obvious that we should be moving in that direction. The biggest lesson I've learned is that I tend to be impatient in making these changes. I have to learn to be more patient in working with people who don't feel as I do about adopting these (sustainable) changes quickly.

Related article: Corporate Sustainability Officers Identify Opportunity

As environmental consciousness shifts into a higher gear, business is leaving behind dated notions like doing the minimum to remain in compliance in favor of seeking out new opportunities that also benefit the bottom line. Companies are hiring chief sustainability officers or similar high-level positions to green operations from the boardroom down to the vehicle fleet.

"This is not dressed up philanthropy," said Nicola Acutt, associate dean of the Presidio School of Management, which offers an MBA in sustainable management. "This is really about business opportunity and shifting the thinking around environmental performance and risk management toward value creation."

Companies vary in their approaches to green staffing and how they structure those positions within the corporate culture.

Interface makes modular carpet. In 1994 its founding CEO, Ray Anderson, had an epiphany after reading Paul Hawken's book, "The Ecology of Commerce". Since then Interface has been greening every aspect of its business, from energy consumption, to design, to sales. Erin Meezan is its vice president of sustainability. Her team works with every Interface business unit, each of which has its own sustainability staff, and offers technical assistance on everything from waste programs to employee engagement. They do strategic planning at every level, and work on projects and partnerships external to Interface.

"I report directly to the CEO [Dan Hendrix], which is pretty huge," said Meezan. "I also have regular interaction with our CFO and with our business-level presidents. I think that really helps. I'm not removed from what's happening."

Chip-maker Intel is also a leader in sustainable initiatives, winning such commendations as the No. 1 corporate citizen on Corporate Responsibility Officer's 2008 list. Dave Stangis has been director of corporate responsibility since 2000, when he convinced his superiors the position was necessary. Stangis said he is almost like an internal consultant. "I run a management review committee made up of the directors and the vice presidents of most of the business units inside the company, from operations, to products, to legal, to communications. We as a group of people set strategy and policy," he said. "The chief marketing officer might be involved, the CEO, the chairman, the person running all of our factories worldwide."

Both Meezan and Stangis spend time each day educating employees about what they can do in their jobs to help meet sustainability goals and they say employees are generally receptive.

"It's enough for many people that this is something the company values, just like we value making money and making carpet," said Meezan.

Neither company's sustainability teams are held to profit and loss statements because corporate services are seen as serving all the businesses, according to Meezan. However, their efforts do improve the company's bottom line.

Business schools are getting on board with these changes, offering sustainable management degrees like the Presidio School or adding green electives in an effort to groom future CSOs.

"[Companies] are looking for someone who can think differently, bring innovative ideas, learn and adapt quickly to changing circumstances, commit people and resources, and make things happen that add value to [their] bottom line," said Acutt, the associate dean.

Stangis sees merit in green MBAs but said nothing beats on-the-job experience. If Intel were to hire someone to replace him, communication skills and government or public policy experience would be expected.

For advice, thought leadership, technical help, and networking, sustainability officers turn to non-government organizations. Environmental nonprofits are interested in cooperating because they believe that business has the power to drive change throughout society. Rick Duke is the director of the Center for Market Innovation, a liaison with business, at the Natural Resources Defense Council. "With the emergence of global warming as the signature environmental challenge, corporations are part and parcel of addressing the problem," he said.

NRDC works directly with CSOs, CEOs and other high-level industry executives to formulate climate change legislation that the business community can support.

In early 2007, NRDC and other environmental groups joined with 27 companies in the U.S. Climate Action Partnership, which publicly called for a cap on emissions and 60 to 80 percent reductions by mid-century. Duke said it's been a useful step in the political debate because it proves to legislators that business would prefer legislation to uncertainly, so they can plan accordingly.

In addition, "there's growing understanding that it's largely an opportunity for profit and growth for the companies that get on the right side of things and get ahead of the issue," said Duke.

"I don't think any company can move itself toward sustainability with solely the people they have on staff," said Meezan. "It's critical for the person in charge of sustainability to have these outside resources, not just to figure out what's going on, but to help them make the case internally."

Leaders like Interface and Intel know what it takes to turn a company's sustainability policies around. At Interface, an important step was opening up the culture to tolerate failure, to encourage experimentation.

Additionally, "don't underestimate the value of setting really aggressive goals," said Meezan. Interface is striving for "Mission Zero" its promise to eliminate any negative impact the company might have on the environment by 2020. "We still don't know exactly how we're going to get there," said Meezan. "But by continuing to drive for zero, we're going to look at things that we wouldn't consider if we were only striving for 50 percent."

Leadership needs to come from the top. "If companies think they're just going to hire a CSO because they need to have somebody to talk to the press and to write that part of the annual report … but the CEO is still disengaged and the board doesn't really understand it, ultimately they're not going to get their money's worth out of having that person," said Meezan.

Part of Intel's success came from moving beyond quarterly thinking to longer term planning, allowing it to measure changes more accurately.

"We spent about $20 million on [energy] conservation projects, but we saved more than $40 million," said Stangis. "Plus today people are caring about the 500 million KW hours [of electricity] we saved as well. So it turns out to be a win-win-win, but you have to change the way [you measure] value. And that's where you'll see sustainability officers adding value to companies."

George Kehler has 15 years of managing energy resources and setting energy policy. While working for Dow Chemical he oversaw efforts to reduce the company's energy bill and purchased renewable energy assets. Now, as Director of Sustainability and Carbon Management, at expense management company Cadence Network, he works with clients on their sustainability and carbon reduction initiatives. He spoke with Matter Network about large corporation's varying viewpoints on sustainability and strategies for simultaneously reducing emissions and costs.

MN: When you were working at Dow Chemical the company joined a group that was purchasing green energy. Why?

GK: Dow is a large energy consumer.... [we recognized that] the economy is driven by hydrocarbon energy and that there are a finite amount of hydrocarbons left at a reasonable price. The forecasts said that oil energy will be peaking between 2010 and 2020 and will only get more costly. Also, the amount of CO2 that is being produced and our constantly consuming fossil fuels is not a sustainable action for a big energy consumer like Dow or for the world at large.

If you are looking at increasing shareholder value, it is not just the profits that you make -- it also has to do with stock price. Companies that are admired may be more attractive to certain investors.

MN: How does investing in renewable energy today line up with a corporation's shareholder interest?

GK: Wind is pretty darn close compared to fossil fuels as an energy source in a lot of areas. Solar energy cost has significantly dropped, but it is still clearly more expensive. At face value they may not be cost effective, but through rebate programs and tax incentives, and when you start to go through a true financial analysis and have accelerated depreciation, you can make the case for wind and solar. Because of these tax breaks you can start bringing down the cost to where from a shareholder value perspective, it is cost effective.

MN: Is there additional business value for companies that are viewed as being sustainable?

GK: Being admired will have an impact on a corporation. Fortune magazine did a survey and found that of the top 10 most admired U.S. companies, 7 have written sustainability or corporate responsibility reports. None of bottom 10 produced these reports. If you are looking at increasing shareholder value, it is not just the profits that you make -- it also has to do with stock price. Companies that are admired may be more attractive to certain investors. Also a college kid might be more likely to consider working for an admired company, so they will attract more talent. Forward thinking companies understand that [being admired for sustainability] has value.

MN:: How does the risk of fluctuating energy prices factor into a company's cost assessment?

GK:: Risk is a factor for estimating energy expense. With wind most of the cost is in the capital to install a tower and turbine. When you buy power from a wind farm you can fix your price, with perhaps a slight escalation. Oil prices change almost minute by minute. Companies looking at long term power costs can commit to long term investment. But interest in long term commitment depends on the customer. It is influenced by what they think will happen in the marketplace. If you believe that energy prices will drop, you don't want to commit to energy costs today. Each company has different perspective -- some may want to fix 50 percent of their energy cost to reduce variability.

MN:: Why are companies paying more attention to sustainability than in years past?

GK:: Energy is no longer cheap, and it is having a huge impact on many companies. Since 2000 oil has gone from $20 per barrel to more than $90. A lot of companies are bringing back the technology that was originally developed in the 1970's with new twists and turns. There is a huge drive for energy efficiency at many organizations, and they are pushing for it in Washington D.C. They recognize that not consuming a kilowatt of power is much cheaper than trying to produce an extra kilowatt.

MN: What is typical reason for companies to resist measuring their sustainability?

GK: The two biggest issues are cost and time. Some people within companies work very hard to get management to agree, but unless we get senior management to buy in, it is tough to push something through. Fortunately, it is becoming quite common for senior management to be discussing sustainability. It is becoming ingrained in the board room. The toughest challenge in working with some clients is the upfront cost -- sometimes you have to spend money to make money. Also, taking the time to look at their carbon footprint is a cost. For companies, it comes down to "Do you want to be proactive or reactive?"

MN: How likely is it that the federal government will institute a carbon cap and trade system, and how is it factoring into your recommendations?

GK:: California's climate change initiatives have made people deal with this issue. I don't believe federal legislation will happen in 2008, but expect it in 2009 with a new president and a new congress. Various bills are being discussed and introduced. We've clearly passed the tipping point -- it's not a question of if but when for a carbon cap system. Companies today have two choices, wait and do nothing until you see the legislation and then react, or they can react now and understand what their carbon emission position is so that they are prepared to respond as legislation rolls out.

MN:: What are companies doing with the money that they are saving through energy efficiency?

GK:: Some companies take some of those savings and use it to understand the carbon footprint, while others will use it to buy renewable energy if it costs more. It is a forward thinking thing to do for those companies.