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Dan Hendrix: The Future of Interface is Bright & Greener than Ever | GreenBiz

Dan Hendrix: The Future of Interface is Bright & Greener than Ever

Because of the enduring green epiphany of its charismatic founder, Ray Anderson, the influence of Interface has always been outsized in the world of sustainability.

In the wake of Anderson’s death last autumn at age 77, following a nearly two-year battle with cancer, the focus has shifted to Daniel Hendrix, Interface’s CEO and president. Yesterday, at theGreenBiz Forum 12 in New York City, senior writerMarc Gunther caught up with Hendrix to see how the billion-dollar carpet maker is moving ahead with its founder’s eco-vision.

At Interface, sustainability continues to evolve from an operations focus into tool for innovation and market development, Hendrix reported. One example of this shift will soon be found up in the air.

After a four-year development process, the company’s carpet tiles were okayed for use on commercial jets. Developing the product required reducing the weight of the tiles by nearly half, while meeting stringent fire and toxicity standards as well as passing Boeing’s grueling performance tests.

Southwest Airlines will be among the first to start using the tiles as part of its Green Plane initiative, a project to outfit a Boeing 737 cabin with green products. “It’s a big win for us, and for the airline industry,” said Hendrix.

Promoted to his post in 2001, Hendrix has been running Interface’s day-to-day business for over a decade. Hendrix, who will celebrate his 30th anniversary with the company next year, worked closely with Anderson through an acquisitive period in the 1980s to scale-up the business. A decade later, when Anderson had his green epiphany and declared this intention to transform how the company would make tiles, Hendrix recounted that he was a disbeliever: “I thought Ray had lost his mind.”

It didn’t take long for Anderson to convert Hendrix, or the rest of the company. To aid his effort, Anderson turned to a green “dream team” to make the case to his colleagues. A veritable who’s-who of sustainable manufacturing, the team included Paul Hawken, Bill McDonough, and Amory Lovins, among others. The case altered the thinking of Interface’s leadership, and re-set the company’s course towards a goal of making carpets using less oil, water, and other inputs, with less waste overall.

The company has tracked these metrics steadily since 1996. Since then, the company has lowered the oil intensity of its products to 60 percent from 90 percent, Hendrix reported. Roughly 40 percent of its carpet are produced from post-consumer recycled materials, remade from used carpet tiles where fiber is shaved off for reuse, and the heavy backing is re-melted to recapture its embodied energy. “We’ve seen an 82 percent reduction in water use, and a similar improvement in waste sent to landfill,” Hendrix said.

One of the latest efforts to deepen Interface’s green practices is a program to develop environmental product declarations, or EPDs, a sort of successor to a life cycle assessment (LCA). “It creates transparency,” said Hendrix, as a kind of environmental nutritional label for each product, showing key content such as carbon footprint, toxicity data, and water usage.

“It’s like an LCA but with more detail. It takes a lot of the mystery out of what impact this product has on the environment,” said Hendrix. “It’s far from being standardized. And we’re one of the first to pursue it in the U.S.”

After nearly 20 years of sustainability efforts, the process of extending green practices within the organization, born with Anderson, continues today. “Ray gave Interface a wonderful gift: There’s a tremendous emotional capital that continues to motivate our people to get up everyday and think there’s a higher purpose than just a paycheck,” Hendrix said.

Interface is looking to its employees for guidance on how and where to innovate. “We call the exercise ‘appreciative inquiry,'” said Hendrix. “We interviewed employees and a few customers, to help push towards a goal of zero emissions.” A lesson that emerged from this exercise was to cross-pollinate staff between offices, sending high performers from Bangkok to Europe, or from the U.S. to Australia, to learn and to exchange innovative ideas.

For more on Anderson’s legacy, check out Joel Makower’s memorial to the ” iconic and iconoclastic industrialist“. And in the first of an ongoing series called “Radical Industrialists” here at GreenBiz.com, read an essay contributed by Interface’s Lindsay James and Mikhail Davis, “Mind the Void: Interface after Ray.”

Photo by Sophia Wallace.

Check out the original story here: http://www.greenbiz.com/blog/2012/01/25/dan-hendrix-future-interface-bright-greener-ever 

GreenBiz

Why the Big Apple Can Be the World’s First VERGE City | GreenBiz

Why the Big Apple Can Be the World's First VERGE CityAs if recent football results weren’t enough to heat up the rivalry between New York, Boston, and San Francisco, add to the contest the quest for title of “greenest city.”

At the GreenBiz Forum 12 in New York City today, this rivalry took the form of a panel question: Can the Big Apple be the first VERGE city in the U.S., or maybe even the world?

Of course, New York has a long history of leadership in finance, media, and fashion. But green? Why not Masdar, or one of the new built-from-the-ground-up green utopias, asked session moderator Andrew Shapiro, co-founder of GreenOrder.

The city’s strength is partly its age, size and complexity. “The reality is that the majority of cities aren’t green field opportunities,” said panelist David Bartlett, IBM’s vice-president of industry solutions during the session. “Old infrastructures are where the opportunity for innovation lies. I think that makes New York the best candidate,” he added.

The city’s aged infrastructure is more opportunity than obstacle, said panelist Steve Cohen, Director and CEO of the Earth Institute at Columbia University, pointing out that it’s better for a city like New York to have an aged subway, in need of repair, than to have to build a new system from scratch, at nearly insurmountable costs.

“It’d be nice to have a computer controlled subway system, but I’d rather have what we’ve got, than to dig up the whole city today,” said Cohen. That said, the city has a track record of committing to billion-dollar scale green infrastructure, from the 3rd Water Tunnel, to the 2nd Ave Subway line. “This city is used to spending billions on capital. We’re not going to go through the anti-tax disinvestment cycle,” that has taken hold in other areas of the country, said Cohen.

In New York, the political leadership starts with Mayor Michael Bloomberg, who has led a sweeping effort to ready the city for the stresses of climate change and an additional million residents expected by 2030. The resulting blueprint, PlaNYC (pronounced plan-why-see) points the way to increased building efficiency, higher levels of renewable energy, less waste, cleaner air and water.

The technology tools that will make possible this smarter, more efficient future are entering service today. “There’s a huge proliferation of smart sensor technology where we can see — with much better x-ray vision — what’s happening with our building, with our transport system, with our energy networks,” said Bartlett. “Visibility, control, and automation, they’re the heart of smart.”

“No one is listening holistically to buildings,” said Bartlett. There’s automation device by device, or system by system, but no one is watching the sum of the systems, and doing do can deliver savings of 40 percent or more. “It’s a concept I call ‘the building whisperer,'” he said.

The city’s competitive edge also includes its “brain base”. “Boston is known as a college town,” said Cohen. “But we have more students in New York City than there are people in Boston,” said Cohen, implying perhaps this may be a reason the Giants will have an edge over the Patriots in Super Bowl XLVI.

The city is deepening its considerable R&D resources. Cornell University recently beat out Stanford University, winning a beauty contest to build a cutting-edge green campus for a new engineering school on Roosevelt Island.

Uptown, Columbia University is building a new satellite campus in northern Manhattan, which will be home to a brain and behavior research science center, along with additional capacity for engineering, business and continuing education. “The west side of Manhattan used to be full of factories and stevedores,” said Cohen, “And now those stretches are filled with brain workers.”

In many ways, cities offer more fertile ground for VERGE technologies to flourish than national or regional efforts. City mayors are “among the least ideological people around because the do real things: making sure the garbage gets picked up,” Cohen said. “The best minds in the world want to be here,” and even if they don’t want to live here, “It’s never hard to have a meeting here,” he added.

The challenges facing cities mirror the larger test facing the nation. At the national level, pragmatism is painfully absent, and has led to the polarization of energy debates into debilitating over simplifications, most recently with the Keystone XL pipeline, about which Cohen writes at his blog at Huffington Post.

The issue we need to address is America’s role in a sustainable global economy. How do we compete and protect the planet that sustains us? How do we ensure that other nations join us in an effort to achieve global sustainability?

“We’re talking about a post-industrial way of living. It will require innovation and creativity,” said Cohen today. “This is a little bit like arguing about landlines for telephones 20 years ago.” Energy technologies now on the blackboard may make debates about pipelines quaintly obsolete in the near future.

The rivalry for greenest city continues next week, as the GreenBiz Forum 12 heads to San Francisco on January 30 to ask a similar question: Can San Francisco be America’s first VERGE city?

My friend and GreenBiz impresario Joel Makower suggested the Bay Area may be the natural leader of the greenest city race, at least until the final minutes of the contest, when it fumbles away its lead to lose by a hair to New York.

No hard feelings from here in Giants land: At least in the green race, both cities can be winners.

Manhattan photo via Shutterstock.

Check out the original story at GreenBiz.com, here: http://www.greenbiz.com/blog/2012/01/24/why-big-apple-can-be-worlds-first-verge-city

GreenBiz

Clean Energy Makes Big Strides, but Just How Sustainable is the Growth? | GreenBiz

Clean Energy Makes Big Strides, but Just How Sustainable is the Growth?

Global investment in clean energy capacity expanded by 5 percent in 2011 to $260 billion. The growth comes despite the considerable drag from economic crisis in Europe and weak growth in the U.S.

The new research, compiled by Bloomberg New Energy Finance, was announced yesterday in New York at United Nations headquarters building, site of the Investor Summit on Climate Risk & Energy Solutions.

Up from $247 billion in 2010, last year’s rise in spending on clean energy capacity offered reasons for optimism along with rising cause for concern. Note that this data includes spending on renewable energy technologies, but not advanced coal, nuclear or conventional big hydro.

The good news: Spending has quintupled in the past seven years, with outlays for solar power leading the expansion — soaring by 36 percent to $137.5 billion during 2011.

And in the global horse race for green energy leadership, the U.S. regained its lead over China for the first time since 2008. U.S. spending hit a record, at $55.4 billion, up 35 percent, as investment in China rose by just one percent to $48.9 billion.

“The performance of solar is even more remarkable when you consider that the price of photovoltaic modules fell by close to 50 percent during 2011, and now stands 75 percent lower than three years ago, in mid-2008,” Michael Liebreich, chief executive of Bloomberg New Energy Finance, said in a statement.

But lurking behind those big numbers are worries that U.S.’ resurgence in 2011 may turn out to be the lunge that precedes a stumble. Spending in the U.S. was buoyed by a big surge of stimulus funds, originally set aside in the 2008 stimulus bill, that will taper off sharply in the year ahead.

“The U.S. jumped back into the lead in clean energy investment last year,” Liebreich added. “However before anyone in Washington celebrates too much, the U.S. figure was achieved thanks in large part to support initiatives which have now expired.”

As those incentives shrink, the global wind and solar industries are set to consolidate. Supply in both the wind and solar markets exceeds demand significantly, leading to bankruptcies and pullbacks. In the solar space, Solyndra is the most visible, but one of a growing number of startups that crashed under pressure from falling solar cell prices.

Dominated by mature conglomerates such as GE and Siemens, the outlook for wind is dimmer than for solar: Global investment fell by 17 percent to $74.9 billion. To try to compete with lower-cost Chinese manufacturers Vestas, the world’s largest producer of turbines, yesterday announced it was shuttering a factory, and cutting 2,335 jobs, or about 10 percent of its staff.

Of course, oversupply means lower-cost energy systems for buyers. And even as subsidies are declining in the wealthy West, non-financial policy support remains resilient. In the U.S., renewable portfolio standards in 29 U.S. states represent a $400 billion investment opportunity, as other states finalize similar commitments.

Meanwhile, stepped up subsidies in emerging markets — especially Brazil and India — are upgrading energy services to virgin markets. Spending in these areas will replace some of the investment that is retreating in North America and Europe, said Ethan Zindler, Head of Policy Analysis at Bloomberg New Energy Finance.

Financial innovation remains a weak spot, however, especially in the U.S., where clever capital solutions could help fill the gap left by shrinking federal subsidies. Given the multi-billion dollar scale of many clean-energy investment projects, there’s been a dearth of the sorts of high-efficiency financial instruments that can bundle up batches of projects, and finance them at low cost in public markets, Zindler added.

There have been some promising precedents — such as PACE loans and solar lease-to-own programs. But nothing has yet emerged to substitute for large-scale, multi-billion federal subsidy programs. Proposals such as green bonds or a national infrastructure bank are stuck in the starting gate, said Zindler.

Institutional investors, meanwhile, are hungry for more diversified ways to put money into greener projects. “Investors need diversified, sustainable strategies that maximize risk-adjusted returns in a volatile investment environment,” said Ceres head Mindy Lubber, which directs the Investor Network on Climate Risk, a network of 100 institutional investors with collective assets totaling about $10 trillion.

The retreat of subsidies may enhance the competitiveness of products and strategies already honed to deliver higher efficiency and energy savings, said Marc Vachon, vice president of ecomagination at GE. He added that GE’s ecomagination product line is growing at twice the rate of the rest of the company, having already generated $85 billion in revenues to date.

The event saw the release of two other reports of note for folks following investment trends in green business and clean tech:

• Global investment consultant Mercer issued a new report showing how leading global investors, including the nation’s largest public pension fund, CalPERS, are integrating climate change considerations into investment risk management and asset allocations. The report, “Through the Looking Glass: How Investors are Applying Results of the Climate Change Scenarios Study” comes on the heels of a Mercer report last year showing that climate change could contribute as much as 10 percent to portfolio risk over the next 20 years.

• Deutsche Asset Management also released a new report, “2011: The Good, The Bad, and the Ugly,” describing generally mixed results on climate investments and policy in 2011 but projecting long-term growth in cleaner energy markets to continue. Positive trends included China and Germany’s continued low-carbon leadership, the U.S. Environmental Protection Agency’s issuance of new rules on hazardous air pollutants, Australia’s new carbon legislation, and Japan’s commitment to supporting the deployment of more renewable energy.

The report also highlights negative trends such as the weak performance of cleantech public equity stocks in 2011 and the expiration of several U.S. federal renewable energy incentive programs, including the “highly successful” Treasury Grant Program that expired Dec. 31, 2011. The report noted that the TGP program, in 2 1/2 years, leveraged nearly $23 billion in private sector investment for 22,000 projects in every state across a dozen clean energy industries.

Last but not least, a plug. If you, like me, have concluded that the “end of coal” is all but inevitable to prevent catastrophic climate change, check out this remarkable presentation — which ended with a standing ovation — by Richard Trumka, President of the AFL-CIO at yesterday’s summit.

Trumka, a former miner, spoke with passion about how the “end of coal” message is landing on the ground in blue-collar coal country, even as he acknowledged the dire need to address climate risks and build a low-carbon economy.

His message is cause to reflect on how labor’s interests are often misunderstood and under-represented in climate policy discussions. Where coal miners see their jobs, housing values, and culture imperiled, it’s no surprise that the politics of climate change become hard to swallow — no matter how chaotic the climate change signals may be. The same labor issues vex the proposed XL Pipeline, about which Trumka says labor remains divided, and natural gas fracking as well.

Read the transcript here or watch his talk below, starting just before the 14-minute mark. It’s well worth the 15-minute running time. If the embedded player isn’t working, point your browser here: http://www.unmultimedia.org/tv/webcast/2012/01/2012-investor-summit-on-climate-risk-and-energy-solutions-2.html:

Wind turbine photo CC-licensed by Samuel Stocker.

GreenBiz

How EnerNOC is Evolving Smart Grids and Building Energy Management | GreenBiz

How EnerNOC is Evolving Smart Grids and Building Energy Management

When I first met EnerNOC co-founder Tim Healy back in 2007, he was riding high on the results of a successful IPO. Catching up with Healy just a few weeks ago, I was struck by the dimming of the outlook for cleantech in the intervening years.

Five years ago, EnerNOC’s IPO was a bellwether in all-too-brief moment of exuberance for cleantech that marked that year. Listing in late May 2007 at a price of $26, EnerNOC’s IPO was a hit. The share price surged 20 percent in its first day of trading, and nearly doubled to $50 within six months.

At the time, EnerNOC offered something counterintuitive amidst all the breathless coverage of next-gen solar panels and complex batteries recipes. Rather than generate clean energy, EnerNOC was helping to solve energy shortages by reducing demand.

By taking control of commercial customers’ big equipment — think office building air conditioning systems — and turning them down briefly during periods of peak demand, EnerNOC could cut its customers’ bills by negotiating discounts with utilities. The plan helped utilities too, by giving them a way to cut the risk of costly blackouts.

These days, the atmospherics around cleantech are decidedly less exuberant, damped by partisan bashing, cheap natural gas and especially economic recession. EnerNOC’s stock has settled into a range just above $10 in recent months. Yet its business model has thrived and evolved, establishing demand response (or demand reduction, DR) as a fast-growing business and attracting a raft of competitors.

“We were among a small pack at the beginning competing for a land grab in the demand response market,” said Healy, the company’s CEO and chairman.

By most measures, EnerNOC scored well in that land grab. From a few dozen utility partners in 2007, the company now has contracts with hundreds and has expanded internationally, most recently to the United Kingdom and New Zealand. And its technology has evolved dramatically.

In the early days, said Healy, demand reduction amounted to relatively simple on-or-off decisions. During times of peak demand, equipment would simply be shut off.

“We call that DR with a machete,” he said.

These days it’s more like DR by microscope and tweezers. The combination of EnerNOC’s remote management software and advances in customers’ equipment — from freezers to digital lighting — make it possible to throttle down demand incrementally, following complex priorities. This ultra-fine control minimizes disruptions to operations, while delivering maximum dollar savings and maintaining grid stability.

This evolution toward automatic response technologies has accelerated DR’s business, and opened new opportunities. Where requests for reductions used to arrive a day or hours ahead of anticipated needs, these days contracts call for response times of minutes or seconds.

This is drawing EnerNOC and its peers into the role of automated grid management. The company’s recently-inked 150-megawatt DR project with the Alberta (Canada) Electric System Operator delivers not DR per se, but rapid response to grid variations to help maintain stability in the regional grid.

The fast-growing scale of wind and solar in recent few years has opened up a surprising variant for EnerNOC’s technology that works in reverse to demand reduction. In the Northwest, the Bonneville Power Administration has experienced periods when its dams and windmills spin out too much power, which can overload the grid. So the BPA has been searching for a way to increase demand on short notice.

EnerNOC is helping it to do so. In a pilot project, EnerNOC can push excess power to commercial facilities to heat up ceramic brick room heaters and/or boost the temperature of water heaters. The technology essentially stores excess electricity as heat, which can be drawn down later.

“We’re not just curtailing load. We’re ramping load up too,” said Healy. In addition to making more heat, making more cold also works. Cold storage facilities, for instance, can pull in surplus juice to chill their facilities to lower temperatures or make more ice, essentially storing excess load as cold.

Next Page: EnerNOC’s move into grid management, ‘persistent commissioning’ and more.

In addition to grid management, EnerNOC is also using demand reduction as a stepping stone to enter the broader field of energy management, to run the buildings and campuses of its clients. This gives EnerNOC a broader marketplace, for sure, but also brings it into head-on competition with bigger, deeper-pocketed incumbents such as Johnson Controls, IBM and Siemens.

It’s been a natural extension of EnerNOC’s expertise. As the company has grown, its software engineers have had to master an increasing diversity of software standards, control protocols, and other arcana — the code that runs offices, buildings, and the machines inside them. Expertise in these software layers has opened up a new frontier the EnerNOC: smart building systems.

“We want to drive towards a goal of ‘persistent commissioning,’ ” said Healy, where EnerNOC provides not just demand reduction services but real-time management of building systems.

The approach permits on-the-fly performance optimization, as well as the ability to detect faults. By mapping regular user patterns — escalators are always off from midnight ’til 6 a.m., for example — software can learn to take action if, for instance, an escalator motor energizes at 3 a.m.

“Managers have information systems for their finances, sales, manufacturing, practically every aspect of their operations,” said Healy, “Everything except energy. There needs to be better intelligence for the customer and utilities.”

Meanwhile, the DR market continues to mature.

“We’re seeing sectors coming to us that weren’t on our radar a few years ago,” said Healy. EnerNOC has recently begun to develop DR services for big farms, orchards and vineyards. They’re a natural fit. Big agriculture operations use lots of power to run remote irrigation pumps and other machines. These can be temporarily turned down with little harm to the crops. Installing intelligent sensors and controls on this network of pumps can deliver energy savings and other benefits too, such as reduced labor needs and fault detection.

Another potential growth segment is commercial sites that have until recently been too small to invest in DR: drug stores, convenience shops and gas stations. With all the fridges and display cases, these sites, in aggregate, face sizeable energy bills, yet are often too small to invest individually in smart energy management systems.

“If you could bring a packaged solution to these guys,” said Healy, “bundling up a series of outlets, you could see 10 percent or better savings at each site.”

I asked if the slow growth of power demand poses a drag on EnerNOC’s outlook. After all, during the recession, U.S. electricity consumption actually shrank and has grown only very slowly since. Healy told me overall electric demand growth is secondary to other trends.

First, there’s a coming wave of power plant retirements. With the EPA’s adoption of mercury rules on Dec. 21, utilities across the nation must shutter scores of their oldest, dirtiest plants, and will have to find alternatives. Secondly, the renewable energy standards now in place in most states drive demand for the sorts of grid stabilization services that EnerNOC is expanding into. Next, utilities continue to scale up spending on efficiency programs, an area where EnerNOC is positioned to help meet goals.

Plus, with overall growth flat, companies are working to shave costs: “One of the common refrains we’re hearing from customers is, ‘My top line isn’t growing, what can I do to cut costs to improve my bottom line?’ ”

And lastly, even if some factories have eliminated one of three shifts, for instance, they’re typically running daytime shifts at max, such that peak demand is still high.

“Even though overall usage is down or flat in some areas, we still continue to see peak records being set,” said Healy.

EnerNOC has some $1.3 billion in projects in its pipeline, Healy said. That’s roughly five times last year’s revenue of $280 million. The healthy pipeline has led many analysts to tag EnerNOC’s shares as undervalued. Thinking back to the IPO, Healy couldn’t agree more.

For more on EnerNOC, check out this podcast of Chrissy Coughlin’s conversation with Tim Healy here for GreenBiz.com.

GreenBiz

How SolarReserve Navigates Darkening Prospects for Big Solar in the US | GreenBiz

How SolarReserve Navigates Bleak Predictions for Solar in the US

On the sun-baked plains outside Tonopah, Nevada, a huge white pillar is inching upwards, as concrete piles up towards an ultimate height of some 60 stories. The slender structure is evidence of the tangible progress — and rising risks — facing a dwindling number of developers of large-scale power plants in the deserts of the western U.S. slated to make electricity by converting the sun’s heat into power.

I recently caught up with Kevin Smith, the Chief Executive Officer of SolarReserve. The Santa Monica, Calif. company is building the tower that will sit at the heart of its $900 million Crescent Dunes Solar Energy Project. Smith emphasized that while the tower attracts a lot of attention, it may be that the project’s ability to store the sun’s energy will become its most competitive virtue, particularly at a time when as the solar market is being rocked by plummeting prices for photovoltaic panels, a competing technology.

Topping out at over 600 feet, the Crescent Dunes solar tower will rank among the tallest structures in Nevada. It has to be that tall to absorb the reflected light from some 10,000 billboard-sized mirrors that will be installed in concentric half circles around its base. Once complete, the pillar will be capped with a collector, at which all those mirrors will point, focusing the sun’s rays. Where the reflected rays converge, temperatures will hit over 1,000 degrees Fahrenheit.

To make electric power, this thermal energy can be used immediately to generate steam in a turbine. Or the heat can be stored, absorbed in molten salts kept in insulated containers. This trick solves the intermittency problem that bedevils most renewables. Drawing on this stored heat, the facility can control when and how much electricity to make, and command a higher price from utilities by supplying power when demand is highest.

This ability to deliver power on demand makes the Tonopah project different from all but a very few large-scale renewable energy installation in the U.S. Windmills and other kinds of solar farms can store energy only by using costly battery banks, or pumped air storage or pumped hydro, both of which require relatively rare sighting conditions. Tonopah’s design is the largest of its kind, building on precedents set by a pair of smaller solar towers that have been operating in Spain and Arizona.

Since construction started in Tonopah last August, Smith would seem to have plenty to celebrate. Once the tower is complete, laying out the field of reflecting mirrors will follow. Come December 2013, the project is slated to begin feeding up to 110 megawatts of power into the western grid. What’s more, Tonopah is just one of a backlog of some 3,000 megawatts of energy projects SolarReserve has in its pipeline, including contracts to build two other solar towers in Spain and California.

But, when asked there would expect to see more projects in the U.S. further out, Smith was pessimistic. While financing for current projects is locked in, the Dec. 31 expiry of the so-called 1603 Treasury grant program — which offers a 30 percent federal cash grant to qualified renewable energy projects — threatens to stall the development of future large-scale solar plants.

The grant, along with many other renewable energy subsidies has been drawn into the toxic politics stemming from the failure of Solyndra, which was granted $535 million federal loan guarantee to commercialize a novel design for tube-based solar panels. Critics have gone on the warpath, questioning practically all renewable-energy projects that have received federal funds. SolarReserve was offered a $737 million loan guarantee by the DOE last May to help build the Tonopah project.

The hostile partisanship, together with shrinking federal funding, is souring a hot market here. “Unfortunately, U.S. policy is going in the opposite direction of much of the world,” Smith told me. “We’d love to have our home market continue to develop, but it looks like the next 12 months will be pretty flat.” In response to this uncertainty, SolarReserve has been expanding its development efforts overseas.

Were SolarReserve to de-emphasize U.S. projects, it would be another in a series of setbacks for U.S. solar technology and developers. Beyond the partisan backlash and broader economic recession, a key cause for these woes has been the plummeting cost of conventional photovoltaic panels, which have collapsed by roughly half over past two years.

The downward price spiral was the key culprit and Solyndra’s crash, and others have followed suit. U.S. players Evergreen Solar and SpectraWatt have likewise gone under. Just before Christmas, energy giant BP, once famous for a commitment “Beyond Petroleum”, fully exited the solar business, saying it “can’t make money” selling panels. Analysts agree that this brutal shakeout will continue, jeopardizing mature and startup solar players alike.

Plummeting PV prices are affecting SolarReserve’s competitors too. Indeed, its progress in Tonapah is all the more notable given the attrition rate of other efforts to build very large concentrated solar thermal (CST) projects. Once regarded as a low-cost way to capture the sun’s energy, many CST facilities have been done in by the tumbling price of conventional solar panels. To date, solar farms totaling 3,000 megawatts of capacity have switched from CST to conventional panels. That SolarReserve has avoided having to make such a switch is partly due to the edge offered by its ability to store energy.

Complicating any discussion on the future of solar is that, for all the harm ultra-cheap PV panels have done to some U.S. manufacturers, they have provided windfall savings for many panel buyers and many project developers. In the U.S., the industry is closing out its biggest ever year, with upwards of 1,700 megawatts worth of solar brought on-line, nearly double the 887 megawatts installed in 2010. Blue-chip investors continue to pile into new projects, too. Last week, Google laid out $94 million to fund four new solar power farms near Sacramento, Calif.

Come 2013, when SolarReserve’s solar tower starts to glow, the sight will surely attract tourists, press and industry attention. Here’s hoping the tall tower won’t mark the nadir of home-grown U.S. solar technology, as well.

GreenBiz

Avon’s CSR Report Gives Its Paper, Water & Energy Use a Makeover | GreenBiz

Avon's CSR Report Gives Its Paper, Water & Energy Use a Makeover

Makeup is sometimes used to conceal embarrassing flaws. Today, with the release of its latest corporate responsibility report, cosmetics giant Avon opted to reveal more about its sustainability and philanthropic work than in the past. Titled “The Beauty of Doing Good” and available online-only atresponsibility.avoncompany.com, the self-assessment covers 2009-2010 and is the third such evaluation in the company’s 125 year history.

Avon wanted to increase transparency across the “three pillars” of its corporate responsibility missions: empowering women, sustainability and philanthropy. “Presenting the report online, in an interactive format, saves paper, but also lets us update the data more frequently,” said Susan Arnot Heaney, Avon’s Global Director of Corporate Responsibility. She added that Avon plans to publish a full report every odd year, with continuous updates of new developments, performance data, news and achievements as they happen.

Produced in accordance with the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines, Avon’s corporate responsibility report aims for GRI Level B standards, a notch higher than the Level C achieved in Avon’s last self-assessment. The update includes a GRI Content Index listing of all standard disclosures covered in the report.

As with all such efforts, the details tell all the good stuff. Little familiar with Avon’s sustainability story until now, I was expecting to find a focus on organically sourced beauty care products. That’s in here, in the form of Avon’s policy to promote sustainable palm oil practices. I also anticipated an update on Avon’s support of breast cancer research (about to celebrate its 20th anniversary), and prevention of violence against women (founded 2004), both of which are touched on here too.

What surprised me is how much Avon has in common with the Fords and Fedexes of the world: Like big manufacturing and distribution companies, Avon is trying to drive up its energy efficiency, improve resource optimization, and chop down its waste. On those topics, here are a handful of achievements highlighted by Heaney when we chatted:

• Paper. By volume, Avon’s paper consumption leaves a larger footprint on the planet than do its cosmetics ingredients, Heaney explained. Surprised? Turns out that Avon is one of the largest commercial printers in North America. Famous for a direct-sales model embodied by “the Avon lady,” Avon has no retail outlets. Instead the company relies on “brochures” that agents pass on directly to customers every two weeks.

For instance, the current holiday edition of the North American version of this small-sized catalog was bigger than usual, but suggests the huge amount of printing Avon does: The publication numbered over 200 pages, with upwards of 15 million copies printed.

To formalize its effort to cut the impact of this river of ink and paper, Avon last year launched Hello Green Tomorrow, a broader green agenda that included the Avon Paper Promise: a comprehensive policy for promoting responsible use and protection of forest resources, and developed with input from World Wildlife Fund (WWF) and several other environmental NGOs. In October 2010, Avon joined (by invitation) the Global Forest & Trade Network (GFTN), WWF’s initiative to eliminate illegal logging and drive improvements in the world’s most valuable and threatened forests.

As part of this pledge, Avon has set a target to buy 100 percent of its paper from certified and/or post-consumer recycled content sources by 2020 with a certification preference of Forest Stewardship Council (FSC). As of 2011, 74 percent of Avon’s brochure paper met the Avon Paper Promise commitments, and approximately 25 percent of paper used in Avon’s product brochures is sourced from FSC certified forests.

• Reforestation. In 2010, as part of Hello Green Tomorrow, Avon contributed $2.1 million to a Nature Conservancy Program to help restore 5,000 acres in the Atlantic Rainforest in South America. Latin America is increasingly important to Avon, accounting for $4.6 billion of Avon’s $10.9 billion in 2010, making it Avon’s largest global market. In 2011, Hello Green Tomorrow expanded its support for reforestation efforts to Indonesia.

• Green buildings. Avon launched its Green Building Promise worldwide in 2010 as well, formalizing a long-held commitment to design and build all new major buildings and renovations in accordance with LEED (or local equivalent) certification standards.

The company achieved Gold in Zanesville, Ohio (U.S.), Sao Paolo, Brazil, and Guarne, Colombia; Platinum certification in Shanghai, China; BREEAM Very Good in Northampton, U.K. At its new U.S. Headquarters in New York City, Avon is aiming for LEED Gold for Interiors, awaiting final certification.

• GHG emissions reductions. At its manufacturing operations, Avon exceeded their initial goal of 25 percent GHG emissions reduction, on a 2002 base, four years early with a 31% reduction reached by 2008. The company has committed to a further 20 percent reduction by 2020. Overall, this would cut GHG emissions by 40 percent from 2002 levels.

• Material use & waste reduction. In 2010, Avon increased by seven percentage points to 76 percent the share of waste that was reused at its global manufacturing sites. In its distribution centers, the rate rose to 80 percent.

• Water use reduction. In 2010, Avon reduced overall water usage by 10 percent in manufacturing operations, both in absolute and per unit terms, and by 23 percent throughout administrative facilities and distribution centers in absolute terms. Avon’s long-term goal is to reduce water intensity by 40 percent by 2020.

There’s plenty more in the report. And if you simply must read it in print, you can build your own version of the report and generate a custom PDF through their site.

GreenBiz

Despite Boom in Renewables, Risks Could Hurt Further Growth | GreenBiz

“Alternative” energy is officially not so alternative anymore. Last year, for the first time ever, spending on projects to generate electricity from renewable sources eclipsed the amount spent to build conventional fossil fuel plants.

In 2010, renewable projects drew $187 billion in investment, 19 percent more than the $157 billion spent to build or augment conventional generating plants, fuelled by natural gas, oil and coal, according to analysis released by Bloomberg New Energy Finance for the Durban climate talks.

As the clean energy sector comes of age it must now reckon with the challenges of more mature industries. Namely, managing the risk posed by larger, more complex projects. According to “Managing the Risk in Renewable Energy,” a report released this week by the Economist Intelligence Unit and Swiss Re, minimizing financial risk is one of the most “acute” challenges facing the sector in the near term.

The renewable energy sector will face an even more uncertain future if it fails to manage the growing risks associated with larger, more complex projects, EIU found. The study was based on survey of 284 senior-level renewable energy executives.

The survey found that renewables have moved to center stage. Power companies increasingly view renewable energy as central to their business strategies, and are developing larger and more complex renewable energy projects. Billion dollar projects, once rare, have become regular.

Worry is rising among renewable energy investors that some of the other 100 or so governments supporting clean energy will cut public subsidies as part of austerity measures, the report found. Fiscal crisis in Europe and economic malaise in the U.S. suggest public support for renewable energy is more likely to shrink than grow in the near term. For example, solar feed-in tariffs are being slashed across Europe: lowered by 15 percent in Germany and up to 70 percent in the U.K.

As public funds dry up, the appetite for renewables remains strong, siginaling a shift to more private funding. “Risk management measures such as insurance will be key to encourage further private sector investment,” said Agostino Galvagni, Chief Executive Officer Swiss Re Corporate Solutions in a statement. “Additional investments into renewable energy are needed to achieve the transition to a low-carbon economy,” he added.

A major issue in renewable energy projects is their high up front costs. Projects are typically capital-intensive and highly leveraged, with up to up to three quarters financed through debt. As companies seek to scale up investments, overcoming financial risks is one of the biggest challenges, according to 76 percent of the survey respondents.

Among plant investors, owners and operators surveyed, other significant concerns included political and regulatory risk (62 percent) while weather-related volume risk comes in third for wind power producers (66 percent). These risks increase further as projects grow in scale and complexity.

The report revealed that while companies are sophisticated in using insurance elsewhere in their businesses, the dearth of risk-management tools in the renewables space has limited their use. About two-thirds of respondents already use insurance to transfer risks. But only half of respondents said they are currently transferring risk successfully, for example through insurance to hedge against the risk of weather-related reductions in output of a solar park or wind farm. Instead, because of the limited availability of suitable risk-transfer mechanism, many retain the risks related to renewable energy assets on their balance sheets due to.

The use of solutions such as weather-based financial derivatives is slowly picking up, even though only 4 percent of wind power producers apply them to their projects. Many solutions on the market today are unsuitable for small-scale projects. In the survey, executives say they would transfer more risk if suitable risk-transfer products become more widely available in the future, particularly more standardized and cost-effective products.

With the next round of global climate talks expected to founder in Durban, the need to develop more efficient private sector investment tools for technologies that mitigate climate change, such as renewables, is only growing. The toll for climate related damage is expected to continue to rise in coming years. In 2011, the U.S. eclipsed the prior worst-year record for extreme weather events, with 14 such events doing more than $1 billion in damage. In 2008, the prior record year, the tally was nine such events.

“New technologies and innovation in renewable energy will be the only possibilities left should a global policy regime to reduce carbon emission not materialize,” says Andreas Spiegel, Swiss Re’s Senior Climate Change Adviser in a statement.

As the reports sponsor, Swiss Re is eager to “better understand how insurance can mobilize financing for renewable energy projects and identify the most cost-effective ways to reduce risks,” Spiegel added. Insurance can help lower construction and operational risks, by covering losses in the case of accident or delay.

For deeper dive into the survey’s findings, check out the EIU’s summary analysis here [PDF]. Cribbed from that analysis, here are the reports key findings, as well, according to Aviva Freudmann, Research Director at EIU.

1. Renewable energy is growing in strategic significance in the power industry, and is the focus of ever-larger investments.2. As renewable energy projects grow in number, scale and complexity, the industry faces a growing range of risks — as well as significant challenges in managing them.

3. Plant financiers and operators consider financial risks the most significant, particularly in early project stages.

4. Industry players are becoming more cautious, taking a variety of measures to reduce their exposures and transfer the remaining ones. One emerging way to manage certain risks is to diversify by geography and by technology.

5. By a wide margin, the industry chooses insurance to transfer financial risks to third parties, followed by capital-market instruments such as catastrophe bonds.

6. For operational risks, industry players seem unsure whether to continue using current risk transfer mechanisms, which focus on insurance and capital-market instruments. Many transfer operational risks to hardware suppliers.

7. Confusion abounds on how best to manage weather-related volume risks. The industry calls for a broader range of risk transfer products to cover such risks.

Solar farm photo via Shutterstock.

GreenBiz

Method, Deutsche Bank, Bloomberg Among Firms Betting on WindMade | GreenBiz

Would knowing that more wind energy was used to manufacture a cell phone lure you to buy it instead of a similar model made with regular power?

The wind industry hopes so. It’s making a high visibility bet that most consumers will be swayed by a new WindMade label that will start appearing on products in the coming year.

The strategy has plenty of precedents. Remember the iconic “Intel Inside” branding campaign? In the course of a few years, by pasting a simple label on practically every PC, Intel transformed its brand image from just-another-chip-maker to that of an industry powerhouse.

The wind industry is hoping its new label — a circular blue swirl — will make visible wind’s growing, green impact on business and the economy. To that end, WindMade.org, a nonprofit debuted backed by WWF and the Global Wind Energy Council, last week unveiled its first class of companies that will use the mark.

At a press conference in New York, WindMade revealed that — led by the likes of Bloomberg, Deutsche Bank, LEGO and Motorola Mobility — more than a dozen companies had signed on to new logo. (Find the full list at the bottom of this post.)

Companies can qualify to use the mark by documenting that they source at least 25 percent of their power from wind energy. The wind power can come either from company-owned turbines, a long-term power purchase agreement, or by buying high quality Renewable Energy Certificates (RECs) approved by WindMade.

The label will show the precise percentage of the wind energy share in the product. And companies have the flexibility to certify global, regional or facility level operations, a distinction that will be also clearly displayed on the label.

Companies see the label’s potential to burnish their brand’s green reputations. The wind industry, meanwhile, is betting the allure of the mark will drive more companies to opt for wind, spurring demand for wind power, and leading to increased investment in new wind capacity.

“It is Motorola Mobility’s intent through our participation in the WindMade initiative to encourage greater use of renewable energy sources like wind and solar around the globe,” said Bill Olson, director office of sustainability and stewardship at Motorola Mobility in a statement.

WindMade has evidence that consumers will be drawn to the new symbol. In a survey of 31,000 consumers, two thirds “told us they would favor WindMade products, even at a premium,” said Morten Albæk in a statement. Albæk is senior vice president of global marketing at Vestas, the Danish wind turbine manufacturer spearheading the initiative.

Next page: Does the world really need another eco-label?

In the wilds of real-world retail environments, plenty can go awry with eco-labeling, however. There’s growing of confusion over the number of labels. According to Ecolabelindex, 426 labels circulate in 246 countries and 25 industries.

In the organic food space, for instance, a proliferation of standards and authenticating bodies — some independent, some industry backed, others from by government — has left many consumers confused and skeptical. In the UK, despite costly, complex efforts to track the CO2 footprint of select groceries, consumers proved only mildly interested, if at all, in the CO2 “nutrition lable”.

The precedent suggests that consumers may simply tune out from abstract numbers. A sample of the WindMade label a hypothetical product could earn is below.

windmade label

That said, wind energy looks less vulnerable to these sorts of confusion. It’s certainly easier to verify wind content than, say, how sustainably a given fish was caught. And wind energy is less abstract that CO2: windmills are widely recognized, and as an energy source have positive, broad public support.

There’s also plenty of precedent: a growing number of big companies have made renewable energy a public priority. Last year, for instance, Intel was the nation’s largest corporate buyer of renewables, with 1,493 gigawatt-hours of electricity, enough to meet about a third of its total worldwide needs — and equivalent to the annual demand of about 150,000 homes. Kohl’s food markets and Whole Foods stand out for meeting 100 percent of their electricity demand with renewable energy.

Intel’s leadership in renewables begs the question: Someday, will all those Intel Inside labels on computers carry another label showing the chips are WindMade, too?

Until then, check out WindMade’s complete first class of corporate pioneers and founders:

Wind turbine photo via Shutterstock.

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GreenBiz

Tiffany’s CEO: How to Keep a Supply Chain Sparkling | GreenBiz

Sitting in his sun-soaked office at Tiffany & Co.’s Manhattan headquarters, chairman and chief executive officer Michael J. Kowalski reminded me of Breakfast at Tiffany’s. In the 1962 classic, Audrey Hepburn coos over Tiffany’s 5th Avenue flagship store, “Nothing very bad could happen to you there.”

It’s a moment few CEOs could resist repeating. Kowalski mentioned it not just to remind me of Tiffany’s enduring image, but to make a point about sustainability. “That’s certainly the spirit our brand promises,” Kowalski said. “We believe in acting in a responsible manner across a range of issues.”

That Tiffany’s has not only survived but thrived in the 50 years since the movie was made was never a sure thing. In recent decades Tiffany and the broader jewelry industry have had to navigate through a series of environmental and human rights challenges that could have easily have proven fatal to their brands’ reputations.

Over the past 20 years — a period roughly coinciding with Kowalski’s career at Tiffany — the industry has faced blood diamonds, conflict gems and dirty gold. The scope of these challenges has been, arguably, tougher than at any time in the industry’s history.

And few, if any, were at first prepared to respond these crises, Kowalski reflected. Indeed, jewelry’s allure has almost always been unconnected to its origins: “For a long time, neither jewelers nor their customers knew or cared very much where or how these things came from,” Kowalski said.

That’s no longer the case, of course. Just how much this reality has been turned on its head in the 15 years since Kowalski was appointed president (he was promoted to CEO three years later) was evident when we caught up recently to discuss one the latest of the environmental challenges facing big jewelers: The simmering controversy over a proposal to extract copper, gold and other precious metals from an undeveloped site in coastal Alaska.

Even in resource-rich Alaska, the Pebble Mine, as the project is known, has become a lighting rod, pitting developers against local and far-off environmentalists. The site sits at the headwaters of Bristol Bay (home to Sarah Palin), and is part of the watershed that supports the world’s largest run of sockeye salmon, a renewable resource critics of the project say would be imperiled by mine runoff. The mine could potentially become North America’s largest open pit operation, given how big the find looks.

Mine developer the Pebble Partnership and other proponents of the project point to the financial gains and jobs growth promised by the venture. The Pebble site is estimated to hold many hundreds of billions of dollars worth of gold and other precious metals. The Pebble Partnership is a 50:50 joint venture between a subsidiary of Anglo American and Northern Dynasty Minerals.

While project approval is still being hotly contested, Tiffany is steering clear. Along with a growing roster of its peers, the company has signed the Bristol Bay pledge, vowing not to buy gold from the mine, were it built, and expressing “their opposition to the proposed mine, and [recognizing] the Bristol Bay watershed as an ecosystem of international significance.”

“We’re not geologists, but in our experience with mining over the past 20 years, we have reached the conclusion — as have many NGOs and local Alaska residents — that the risk is simply too great,” Kowalski told me. “Despite the best of intentions, the location of this mine is so inherently problematic that it is simply not worth the risk of a catastrophic event.”

Tiffany is also a signatory to the No Dirty Gold campaign, a broader industry-wide commitment requiring, among other things, that gold be mined with the consent of nearby communities, with humane labor practices, while protecting the environment.

The roots of Tiffany’s engagement on theses issues, stretches back to the early ’80s when, for purely commercial reasons, Tiffany broke with long-standing sourcing practice. At the time, most companies bought finished jewelry, polished gems and refined metals from middlemen, Kowalski explained.

Tiffany began to shift towards directly owning and managing more stages of its manufacturing process. The motivation wasn’t green, though. The company was growing quickly and faced challenges assuring the flow of top quality raw materials. “Our goal was to improve quality, manage the budget better, and capture more profits in the middle stages of the production chain,” said Kowalski.

The focus soon proved invaluable in other areas, as well, as concerns about blood diamonds, or conflict diamonds, began to flare in the early 1990s.

“Blood diamonds weren’t remotely on our radar screen — or the industry’s — when the stories first surfaced,” Kowalski recalled. “Starting in 1992, as we committed to cutting and polishing our own diamonds, we were buying directly at the mine head,” explained Kowalski, “So we could identify exactly where more of our diamonds were coming from, at a time when the public was rightly horrified by the atrocities going on in Sierra Leona and elsewhere.”

Today, quality and cost control remain top priorities for Tiffany’s supply chain operations. “We are without a doubt the most vertically integrated jeweler in the world,” said Kowalski. “That’s been a strong profit driver, but it’s also allowed us to exercise leadership on CSR issues.”

Reaching complete, 100 percent control over all the metal and gems moving through its factories and store is an elusive goal though. Even as the share of goods it can track back to raw materials grows every year, “There is never perfect certainty,” Kowalski said.

“We’re not all the way there, ” he said, “but we’re confident that over time, with respect to diamonds in particular, we can identify the mine of origin, and obviously therefore attest to the social and environmental conditions at those mine sites.” Tiffany abides by the Kimberley Process Certification Scheme, a multilateral agreement to curtail the trade in conflict gems.

Soon after the blood diamonds crisis, precious metals became the next hot spot on the company’s radar, and the next focus of supply chain improvements.

“Around 1995, we began receiving a fair amount of unsolicited mail asking us to take a position, to oppose the New World gold mine that was planned right outside of Yellowstone National Park,” said Kowalski. “As with diamonds before, at that point, we didn’t have any visibility to our gold or silver supply chain.”

Tiffany came out publicly in opposition of the New World bid, while also overhauling its supply chain for gold and other precious metals. In 2004, it opposed another proposed project, a gold mine in the Cabinet Mountain Wilderness in Montana.

Today, all of the gold and silver used in Tiffany’s U.S. operations come from a single mine: Bingham Canyon, owned by Rio Tinto, at a site not far from Salt Lake City. Ore from the mine is refined in New England, under Tiffany’s supervision.

For all the changes in environmental practice that Kowalski has overseen, Tiffany remains publicly shy about its green agenda. “We’ve been very cautious in this respect,” said Kowalski. “We believe it’s something that our customers expect of us: the knowledge that Tiffany has acted in a responsible way in the sourcing, in the processing, of what you buy from us.”

It’s an approach that, Kowalski hopes, means Tiffany’s signature robin-egg blue brand will never be tainted with charges of greenwashing.

Photo courtesy of Tiffany & Co.

GreenBiz

What’s Next for PUMA’s Groundbreaking Sustainability Plans? | GreenBiz

Jochen Zeitz has had a busy year. I recently caught up with the long-serving Chairman and CEO of PUMA, the sports gear company where Zeitz blended an evangelical commitment to sustainability with smart branding to return the nearly defunct brand to the top tier of global sports fashion.

As a business story, Zeitz’s success is nearly legendary: he pulled PUMA out of the basement and up to a podium position in the global sportswear market, while boosting share price by 4,000 percent.

Among sustainability watchers, Zeitz has won plaudits for his commitment to develop an environmental profit and loss (EP&L) statement. By estimating a dollar figure on the value of its use of ecosystem services — any resource provided by nature, from clean water, to crop production, wildlife habitat, storm surge protection and so on — PUMA is expanding on the precedent set by carbon footprinting efforts and other self-assessment techniques.

The tool can identify where in its supply chain these costs are highest, and help PUMA develop responses to address these hot spots.

The first results of PUMA’s effort were unveiled last May, when PUMA announced a price tag of $133 million for its toll from water use and greenhouse gas emissions.

As the company outsources the bulk of its manufacturing, it follows that PUMA’s direct operations accounted for about only $10 million of this total. Its supply chain made up the balance. By impact, greenhouse gases (GHGs) and water were split evenly. The top culprits: Cotton farming, cattle ranching for leather, and rubber production accounted for more than half of water use, and about a third of GHG emissions.

Shortly before PUMA released these landmark results, Zeitz revealed he was moving up at PUMA’s parent company. In March, after 18 years of service Zeitzpassed the mantle on to a 32-year-old successor, Franz Koch. Notably, Zeitz was even younger — just 30 in 1993 — when he took over PUMA’s top spot. The move made him the youngest-ever corporate chairman of a listed German company.

Now 48, Zeitz’s new post will let him focus on sustainability more broadly. Zeitz’s new joint role at PUMA’s owner, PPR SA, straddles two titles: He is both chief sustainability officer as well as head of the company’s sport & lifestyle group. PPR, a $19.4-billion apparel empire, includes a variety of luxury fashion brands such as Bottega, Gucci and Yves Saint Laurent.

As Zeitz’s focus shifts to a broader set of brands, his immediate challenge is whether he can repeat his successes at PUMA in developing sustainability practices and metrics. Developing the framework and practices for the EP&L at PUMA spanned a decade or so. “We wanted to get it right internally first before going public,” Zeitz told me. PUMA worked with PricewaterhouseCoopers and Trucost to develop the first version of the EP&L assessment.

Zeitz told me the challenges PUMA faced in developing its EP&L measurement were internal and external. Behind company walls, the process involved incremental, disciplined reinforcement of sustainability as a value.

“It needs to be clear that it’s must be a part of the everyday decision-making process,” Zeitz said. When people are accustomed to established practices, changes in workflow, remuneration, priorities and so on can be difficult, and can’t be rushed.

External aspects of the projects are complicated by a lack of direct control over trading partners and suppliers. To collect critical data from PUMA’s network of external suppliers, the exercise demanded similar shifts of business cultural and practices among PUMA’s partners. “Data collection is a challenge,” Zeitz says. Difficulties surfaced in terms of different standards in different markets, difficulty in securing cooperation from second and third tier suppliers.

With that foundation built, the next stages may come more quickly. Where the first EP&L measured water use and greenhouse gas emissions through PUMA’s supply chain, the next phase — due in 2012 — will include dollar assessments of social impacts as well as broader environmental measures.

In the third phase, sometime after that, “we want to look holistically, at the positives of business,” Zeitz said. Business brings benefits that aren’t well measured either, he added, such as improving health, education and quality of life. “That’s something we want to start valuing,” Zeitz says. “At the end of the day, we have a new method of accounting, really, that looks at the world more holistically.”

Zeitz concedes the process will take time. After all, it’s taken a half-century or so to evolve today’s accounting standards. “This may go quicker, with modern technology,” Zeitz said, but until then, this is one tool among many to help develop greener solutions.

Meanwhile, Zeitz is open to sharing the intellectual property — the methods, standards, and processes — behind PUMA’s EP&L with other companies, including other sports gear players. “Yes, absolutely. For those who are serious and want to associate themselves with what we are doing in an open manner, we will be open with this process,” he said. “We have already had a number of requests from the automotive, chemical and beverage industries, as well as from one of our competitors.”

Eco-initiatives are gaining momentum in the sports apparel biz. In September, Adidas joined PUMA and Nike in a commitment to “detox” its supply chain and production processes by 2020. BusinessGreen reported that Adidas has been negotiating with suppliers, rivals and peers to create an inter-industry standard for toxicity reduction, following Greenpeace’s “Dirty Laundry” report, which revealed the use of and pollution from hazardous chemicals in textile production.

Photo courtesy of PUMA.