Green Transition

Consumer Demand: Driving the Green Transition

The Green Transition Scoreboard tots up $2 trillion in consumer green demand.

By Maria Olga Pinochet

In 2009, The Green Revolution, a survey by Grail Research, found that 85% of US consumers buy green products. Growing consumer demand for greener products and company practices is influencing business plans worldwide. The UN Global Compact-Accenture CEO Study 2010 confirms sustainability is considered a key driver for growth. Increased demand spans traditional consumer segments, including business-to-business transactions and government spending.

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09:47 pm by csrwiretalkback[7 notes]

Towards a Healthy Renewable Energy Future

We can do 100% renewables by 2050.

By Leslie Danziger

The Green Transition Scoreboard® shows $787.6 billion has been invested in renewable energy from 2007–2010 with another $571 billion in firm commitments. Significant momentum in renewables includes growth in solar energy: US solar capacity doubled in 2010 (Bloomberg); US solar power market reached $6 billion in 2010 (Wall Street Journal); US solar grew sharply in 2010 compared to Europe (Reuters). The planet is awash with daily energy from the sun. Reports confirm there is enough solar energy in the southwest US alone to power the entire country (Rep. Giffords, D-Ariz.). Bridgette Meinhold, Desertec Foundation, adds: “If 0.3% of the Sahara Desert was a concentrated solar plant, it would power all of Europe.“

Solar and wind energy have reached maturity and are already cost competitive in many markets, even with the direct and indirect subsidies and other “externalities” – costs not factored into market prices – of fossil fuel and nuclear energy. These externalities often include negative impacts on public health.

Harvard Medical School reports in Full Cost Accounting for the Life Cycle of Coal that “each stage of the life cycle of coal – extraction, transport, processing, and combustion – generates a waste stream and carries multiple hazards for health and the environment…costing the US public a third to over one-half a trillion dollars annually.”

The public is aware of national security threats posed by dependence on foreign oil but less aware “the taxpayers are underwriting the military costs of protecting its delivery from the most dangerous parts of the world and the transportation system that supports oil consumption” (NewEnergyNews.net). 

Japan’s nuclear crisis illustrates the “externalities” of nuclear power that Japanese taxpayers will bear economically and in radiation-related health risks. Heavily subsidized, costly nuclear reactors can cause health risks for thousands of years, yet nuclear is still touted as clean and cost effective. Even without factoring in the cost of these health risks, economist John Blackburn of Duke University shows solar energy is already cheaper than nuclear. Thus, renewable energy wins, even without a level playing field.

Extreme weather in all parts of the world – early indicators of climate change – exemplify “externalities” in burning fossil fuels. Institutional investors are taking these changes seriously (IIGCC). Mercer with 14 other institutional investors in “Climate Change Scenarios – Implications for Strategic Asset Allocation“ calls for shifting 40% of portfolios to hedge against risks and capitalize on low-carbon opportunities. 

Recent reports advocate an orderly transition to a renewable energy future that can provide safe, abundant energy and a healthy, sustainable global economy for generations to come. WWF/Ecofys has mapped out a course to achieve 100% Renewable Energy by 2050 “which is technically and economically possible with concrete steps starting now.” Stanford University’s “Providing All Global Energy With Wind, Water, And Solar Power" and UNEP’s “Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication" all agree with the findings of the Green Transition Scoreboard® that this transition is well under way. 

About Leslie Danziger

Leslie Danziger is Co-Founder and former Chairman of Solaria Corporation, a developer and manufacturer of advanced solar modules and systems solutions and CoFounder and former Chairman and CEO of LightPath Technologies, an optical technologies developer and manufacturer, which she took public. She has been featured in Business Week and the Wall Street Journal. She holds two patents and was named the New Mexico Inventor of the Year. She currently serves on the Advisory Boards of Equal Access, WorldBlu and Ethical Markets Media. She is a member of the Solar Circle and the American Solar Energy Society.

About the Green Transition

“Towards a Healthy Renewable Energy Future” is part four of five exploring the sectors driving the Green Transition. Stay tuned for the final Green Transition Talkback posts on Consumer Demand, contributed by members of the Green Transition Scoreboard® research team. For part one in the series, read Hazel Henderson’s “Good News on the Green Transition;” part two by Rosalinda Sanquiche, “Efficiency: Bedrock of the Green Transition;” and part three by Timothy Jack Nash, Corporate R&D: Global Investments in Green Innovation.” For more information, please view the associated press release.

Talkback Readers: Do you think we can reach 100% renewables by 2050? What will it take to get it done? Tell us on Talkback! 

09:16 pm by csrwiretalkback[67 notes]

Corporate R&D: Global Investments in Green Innovation

When companies compete to be the “greenest,” rapid innovation springs.

By Timothy Jack Nash

Corporate spending on Research & Development is an informative signal for the direction of the overall economy. R&D strategies and budgets are often laid out in a long-term horizon, so they give a good indication of a company’s heading. When companies in a sector start competing to be the ‘greenest’ company, it spurs rapid innovation. This can lead to advertising campaigns touting environmental benefits that increase consumer awareness, such as Audi’s Superbowl ad.

Since no global research has been conducted on the extent of private corporate “green” R&D, the Green Transition Scoreboard® (GTS) research team is, to our knowledge, the first to compile these figures. Our final total of $163,813,743,000 in investments and commitments to R&D since 2007 is by no means exhaustive, as R&D for green innovation is not always segregated and reported on its own by companies (although more than 1400 companies have produced GRI-compliant sustainability reports). Additionally, limited time for research challenged our team to look for big numbers first, counting commitments above $100 million. There are likely thousands more companies globally who are investing in green R&D that have not been included in this figure. Many do not report such R&D investments for competitive reasons. If you have access to press releases or audited statements for companies we have not listed, please email us.

These company case studies are illustrative:

LG Group – South Korean electronics giant LG Group has pledged investment of 20 trillion won (about $18 billion) through 2020. Half of the investment will go to R&D for eco-products that use fewer materials, are more energy efficient and reclaimed and recycled. The other half is slated for retrofits and new facilities that will cut 50 million metric tons of greenhouse gas emissions per year until 2020 (and save trillions of won in energy expenses).

IBM – Data centers are known power hogs, so IBM’s focus on efficiency and energy management systems is not surprising. Having invested $1 billion per year since 2007, IBM is positioning itself as a leader in the ‘Smart Planet’ revolution. By designing and selling components for intelligent systems, smart buildings and grids, IBM is banking that smart companies are going to be investing in green.

Audi – The automobile industry has certainly passed a ‘tipping point,’ with almost every company in the sector competing to create the greenest car. Audi’s strategy is to invest heavily in human capital and innovation, hiring 1200 experts in lightweight construction and electric vehicles this year and investing more than €9.5 billion in green R&D before 2015. If this photo of the Audi R-8 e-tron prototype is any indication, they’re hiring some good people: http://www.mygreentreasure.com/wp-content/uploads/2009/09/r8.jpg. 

The Green Transition Scoreboard® will continue its research into this key R&D component of the global green transition, digging deeper in our next report.

About Timothy Jack Nash

Timothy Jack Nash is President and Founder at Strategic Sustainable Investments, a consulting firm tailoring more sustainable portfolios. Timothy earned his Bachelor of Arts in Economics from Dalhousie University in Canada and his Master’s in Strategic Leadership Towards Sustainability from Blekinge Institute of Technology in Sweden. He has worked for Ethical Markets Media as a Senior Sustainability Advisor since 2008, and helped co-develop the Green Transition Scoreboard® with Hazel Henderson. He currently resides in Toronto, Canada.

About the Green Transition

Corporate R&D: Global Investments in Green Innovation” is part three of five exploring the sectors driving the Green Transition. Stay tuned for Green Transition Talkback posts on the Renewables sector and Consumer Demand, contributed by members of the Green Transition Scoreboard® research team. For part one in the series, read Hazel Henderson’s “Good News on the Green Transition;” and, part two by Rosalinda Sanquiche, “Efficiency: Bedrock of the Green Transition.” For more information, please view the associated press release.

Talkback Readers: How can ‘smart’ companies lead the way toward a Green Transition and push the overall sustainability movement forward? Tell us on Talkback!

09:15 pm by csrwiretalkback[49 notes]

Efficiency: Bedrock of the Green Transition

Research shows, efficiency investments pay back fast.

By Rosalinda Sanquiche

The Green Transition Scoreboard® (GTS) tracks private sector investments since 2007 in green technologies, including investments in Efficiency and Green Construction. Efficiency in use of energy and materials is basic, often simple to implement and offers the fastest, best bang for investments.

Of the $2 trillion tracked by the GTS, only $282 billion has gone to Efficiency and Green Construction, just over 14 percent, making this huge potential the most challenging to quantify. The McKinsey & Company report, Unlocking Energy Efficiency in the US Economy, estimates efficiency investments can yield $520 billion in returns in the USA alone by 2020. According to The Energy Report: 100% Renewable Energy by 2050 by WWF and ECOFYS, maximum energy efficiency will become central to all economic activity, saving nearly £4 trillion a year through reduced costs by 2050.

PriceWaterhouseCoopers confirms efficiency investments’ rapid payback periods from 12-24 months – compared to renewables payback of 7-10 years. Bloomberg Businessweek reports expected revenues for energy efficiency to expand by 13% annually through 2020.

A flood of reports from 2010 and early 2011 agree efficiency is the critical measure countries can take toward energy independence, supporting business and managing climate change: “Energy Efficiency Plan 2011,” European Commission; “A New Growth Path for Europe,” German Federal Ministry for the Environment; “Sizing the Climate Economy,” HSBC; “Energy Efficiency: The Untapped Business Opportunity,” Carbon Connect; Survey on Economic Recovery and Sustainability, SustainAbility and Globescan.

GTS defines efficiency to include hybrid vehicles and other products requiring less energy to run. Green Construction is defined as built to LEED standards or incorporating multiple green building elements above that of the standard used at the time of original construction. Figures include green engineering and design services; lighting, HVAC and water heating equipment; and materials such as insulation and windows. Since public-sector information is not recorded, the GTS total includes some government buildings – appropriate, given the Low Carbon Construction Innovation and Growth Team, UK Department for Business, advises governments must take leadership to overcome the ubiquitous perception that “only regulation will create demand for energy efficient retrofit.”

Private sector investing is doing an admirable job of driving the transition, despite low government support. The GTS subtracted figures for government buildings, energy generation equipment and energy monitoring services and hardware and still found billions of dollars invested in efficiency. 

Greater efficiency leads toward greater employment. Compared to other options for improving energy performance of buildings, the European Commission found implementing low or zero energy/carbon buildings/passive house requirements gave the largest energy and carbon savings and resulted in the largest number of jobs created.

Even the US Department of Defense recognizes benefits of efficiency, establishing a Strategic Sustainability Performance Plan that incorporates improving energy efficiency, acknowledging energy independence as a security issue. Similar plans have been issued from the US White House, Department of Transportation and other government entities, all of which can follow private sector initiatives solidly leading the way.

About Rosalinda Sanquiche

Rosalinda Sanquiche, MA, is Executive Director of Ethical Markets Media and principal author of the Green Transition Scoreboard® Report. Formerly, she worked for the American Wind Energy Association in Washington, DC, and for the North Florida Land Trust. She has written on the construction industry and environment for Builder/Architect and various outlets and has served on the advisory board of the EthicMark® Award for advertising. Rosalinda currently serves as treasurer for the Northeast Florida Green Chamber and is an advisor to Collins Capital Management.

About the Green Transition

“Efficiency: Bedrock of the Green Transition” is part two of five exploring the sectors driving the Green Transition. Stay tuned for Green Transition Talkback posts on Corporate R&D, the Renewables sector and Consumer Demand, contributed by members of the Green Transition Scoreboard® research team. For part one in the series, read Hazel Henderson’s “Good News on the Green Transition.” For more information, please view the associated press release.

Talkback Readers: What investments in efficiency has your firm made or is planning to make? Share your experience on Talkback!

03:11 pm by csrwiretalkback[56 notes]

Good News on the Global Green Transition

New reports show shifting investment greenward is prudent and do-able.

By Hazel Henderson

Ethical Markets Media (USA and Brazil) now reports over $2 trillion invested in the green private sector since 2007 in the 2011 Green Transition Scoreboard® Report. Thus, we call for pension funds to shift 10% of their assets under management (AUM) away from risky hedge funds, dark pools and commodity ETFs into cleaner, green companies. Importantly, the 2011 Report includes news of two key studies from Mercer in New York and WWF/Ecofys/OMA in Amsterdam that buttress our call.

Mercer’s report, Climate Change Scenarios – Implication for Strategic Asset Allocation, upped the ante. Backed by IFC and 14 pensions funds with AUM of some $2 trillion, the report calls for 40% of institutional funds to switch toward “climate-sensitive assets” both for hedging risk and capturing opportunities in low-carbon companies. Mercer’s Craig Metrick told us this huge research effort will be ongoing with annual updates.

Meanwhile, the WWF/Ecofys/OMA report, The Energy Report, shows how the global economy can shift to “100% Renewable Energy by 2050.” We will be further analyzing this expansive report and interviewing their researchers as to exactly how this goal can be reached.

Both studies call for accelerating upfront capital investment so as to scale the green technologies already competing price-wise with fossil fuels and nukes: energy efficiency, wind and solar PV. This is also why we at Ethical Markets Media track these private sector investments and benchmark $1 trillion per year through 2020 to bring them to scale. While capital cost may be higher for some technologies, the fuel is abundant and free. All these studies point out the absurdities of 90% subsidies still given to fossil fuel and nuclear energy, decades after their maturity, while renewables and efficiency receive less than 5%.

Globally, two additional studies now indicate the green transition has reached a tipping point. The Threshold 21 World modeling in “Towards a Green Economy" finds investing $1.3 trillion annually (some 2% of global GDP) over 10 key sectors can kick-start the green transition, reduce poverty and limit wasted resources. The UN Environment Program and World Meteorological Organization issued a summary "Integrated Assessment of Black Carbon and Tropospheric Ozone,” reconfirming what I and many others have stated: the obsessive focus on carbon dioxide (CO2) and its pricing has always been too narrow, and should include soot, VOCs, methane, mercury and other chemicals from fossil fuels harmful to humans and the environment. I have studied atmospheric chemistry since founding Citizens for Clean Air in 1964 and remember the helicopter ride we arranged for Senator Robert F. Kennedy to show him all the sources of air pollution around New York City and how the costs were “externalized” from company balance sheets and national accounts (GDP). Kennedy went on to become our champion and made his famous speech in 1968 at the University of Kansas! 

All these systemic reports finally may shift governments, pension funds and companies toward greener policies worldwide.

About Hazel Henderson

Hazel Henderson, D.Sc.Hon., FRSA, founder of Ethical Markets Media, is a futurist and author of award-winning Ethical Markets: Growing the Green Economy. Her editorials are syndicated worldwide by InterPress Service. She leads the Transforming Finance initiative, created the Green Transition Scoreboard® and developed with Calvert Group the systems alternative to GNP, the Calvert-Henderson Quality of Life Indicators. In 2010 she was honored as one of the “Top 100 Thought Leaders in Trustworthy Business Behavior 2010” by Trust Across America.

About the Green Transition

"Good News on the Global Green Transition" is part one of five exploring the sectors driving the Green Transition. Stay tuned for Green Transition Talkback posts on Efficiency and Green Construction, Corporate R&D, the Renewables sector and Consumer Demand, contributed by members of the Green Transition Scoreboard® research team. For more information, please view the associated press release.

Talkback Readers: Are we at a tipping point for a Green Transition? What will it take to shift investment? Share your thoughts on Talkback!

07:11 pm by csrwiretalkback[17 notes]



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