Companies Take Eco-Concerns Seriously at ECO:nomics Conference

Published by GreenerWorld Media on GreenBiz.com
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March 21, 2008

Last week's ECO:nomics Conference, the Wall Street Journal's first gathering dedicated solely to the topic of sustainability, offered a snapshot of what may be a pivotal moment in time. One after another, CEOs of industry-leading global companies repeated the fact that CO2, waste, and the environmental and physical constraints of the planet are very real issues and absolutely critical concerns for business.

The roster of corporate leaders at the conference -- which included heads of General Electric, Wal-Mart, Duke Energy, Dow Chemical, Archer Daniels Midland and many more -- clearly articulated the pressing reality of eco-concerns and the imperative for business. The speakers offered a clear commitment to rapidly address energy use (appropriate enough, given it was the conference's focus), but also other challenges that could be more broadly framed in the context of triple bottom line sustainability, and to accelerate change by identifying new technologies and resources, developing new ideas, working with new partners to share information and offering incentives.

Throughout the presentations by the invited speakers and the subsequent Q&A sessions with members of the audience, the overarching message seemed to hold true: corporations and their leaders are taking environmental concerns very seriously, they are committed to making change and are actively exploring ways to respond.

Jeffrey Immelt, CEO of GE, couched his commitment in the context of fiduciary responsibility to his shareholders: "It's about getting ahead of risk," he explained. Placing these new environmental challenges squarely within the realm of the primary levers of corporate financial effectiveness -- risk mitigation, revenue generation and cost reduction -- highlights the ways that CO2, energy access and energy costs have become fundamental concerns for business. In addition, successfully addressing these issues can mean a major windfall for a company: GE, for example, sold $10 billion of wind turbines last year.

At the same time, these gains are not necessarily coming back to the U.S. Andrew Liveris, the head of Dow Chemical, commented that the company has made capital investments of around $60 billion outside of the U.S. last year because this country's energy policy -- or lack thereof -- makes it difficult for businesses to accurately gauge the economic impacts of these investment decisions. Immelt reinforced this message, stating that the United States could have a competitive edge if we don't put our "heads in the sand."

The consistency of the message from these CEOs was so clear and undisputed that the carbon-oriented interviews sounded repetitive by noon on the first day, and audience members began raising questions about topics not on the agenda. Water was a subject mentioned a number of times, as was global political stability, another major risk factor for big businesses operating in a global economy.

Unfortunately neglected throughout the conference, the business realities of implementing significant changes in business practices rarely came up among the interviewers' questions. But Wal-Mart CEO Lee Scott was among the few leaders who gave us a glimpse of the issues, when he spoke of the challenges of consumer education at the point of purchase. Scott also advocated using pricing (and taking lower margins) to help customers make sustainable choices.

Jim Rogers, the head of Duke Energy, opened his talk by commenting that with an issue of this magnitude, we have to address it with optimism and confidence about our ability to solve it. And the urgent need to solve these problems was driven home by Christophe de Margerie, CEO of Total, who argued that his assessment of the impact of peak oil was even more dire than the recently worsened estimates provided by Cambridge Energy Research Associates, a leading advisor to international energy companies.

De Margerie spoke candidly and advised other CEOs to take the risk of being exposed to those who do not agree. He said it is the right thing to do, and that companies should be really clear on what is doable and what is not, and what is doable at what cost and how it will be managed. He also advocated accountability for "full cycle" impact (taking into account the entire lifecycle of products, from manufacturing to disposal), and advised CEOs to explain the "real debate," arguing that using the term "clean energy" is misleading, when the debate is not about clean or not clean, but about the real implications of the various alternatives to fossil fuels.

De Margerie provided a fitting summation in his talk: he advocated being optimistic about the potential, and stated the need to be more vocal about the importance of these topics. In closing, de Margerie threw out the comment that the economic impact of implementing these changes will be "relatively" limited compared to the impacts of not acting.

Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html.

The Environment and the Business of Business

Opening Talk:
The Environment and the Business of Business
Jeffrey Immelt, Chairman and CEO, General Electric

Notes from Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

The Wall Street Journal ECO:nomics conference opened up on the evening of March 12, 2008 with a very animated interview of Jeffrey Immelt, Chairman and CEO of General Electric.

Beginning by talking about GE’s business drivers, Immelt explained the reasons the company was engaged in the “eco”-conversation including: technology availability, global risk and the potential impact of regulations. As CEO of a global conglomerate, Immelt’s job is to get ahead of risk and generate earnings for his investors.

It was a bristly talk, with Immelt early on stating, “I don’t believe in hobbies” and “I’m a capitalist.” On Carbon Caps, “you’re either going to get ahead or get stopped.”

Advocating an 80% reduction by 2050, Immelt declared that we are already paying higher energy prices and that will continue. His appeal: this country could have a competitive edge if we don’t put our “heads in the sand.”

Articulating a number of issues, Immelt explained that 12 states have their own cap and trade systems and we can’t build coal fired power plants -- there is no regulatory tapestry for energy (this is in comparison to other industries). Immelt commented that when you really look around you can see that all industries are regulated. The current lack of an energy policy creates a particularly challenging environment for business because of the difficulty of evaluating the financial impact of business decisions.


Energy Policy Facilitates Business Decision-Making

Companies use financial business cases as a basis for justifying decisions. Caps, taxes and other charges, and price impacts, set the parameters and provide some fixed values so that variables can be evaluated (you could also think of this as the implications of selecting various scenario options). You often hear the business environment referred to as a “playing field”. There’s a context to work in and you are trying to get to a goal.

In order to define how you are going to get from point A to point B – you need to be able to figure out what point B is. In today’s unknown energy context, every product and service is fair game to question, as well as create or re-create .

Companies need to establish the constraints that they have to work with (the Carbon Cap will certainly be a significant one)– something like the boundaries of the playing field . Alternatively, it might be even better to think of business as a game of pin ball where different obstacles each get a different point value, and you have to, not only get to the goal, but also reach it in one piece - gaining as many points along the way as possible. I wouldn’t be surprised if Immelt played football – another possible analogy.

Immelt also commented that Clean Energy is the “best export story” we have going, including gas, wind, and nuclear which has been stopped in the US.


Diverse Energy Sources Required
Need to Slow Demand Growth through Efficiency & Conservation

Stressing the need for access to energy diversity, Immelt was the first to state something that all the Energy CEOs repeated. Timing generally seemed to be the reason for:

• Nuclear: All CEOs consistently expressed a perceived need for nuclear as a component of a total energy portfolio, required to deliver existing energy requirements during the transition from current fossil-based energy to future renewable sources.
• Government Regulation: Was advocated as a means to spur action. “It’s about getting ahead of risk.” A long term competitive cap is an “inevitability.”
• Carbon Sequestration: Immelt implied that this was necessary and would be figured out….
• Conservation: An absolute necessity given rising energy costs and the reality of energy availability and current technology solutions.

Patricia Woertz, Chairman, President and CEO of Archer Daniels Midland, echoed the need for diversity adding that it is a “corporate responsibility” to have an impact on the future.

Referring to GE’s Ecomagination “Commitments”, Immelt advocated for greater R&D investment, comparing energy industry R&D spend valued at 2%, to that of the health care industry which spends 8% of revenues on R&D.

Fred Smith, from the Competitive Enterprise Institute (CEI), warned not to rush in too fast, “make sure you’re thinking before you act.” He commented that the Environmental Protection Agency was a partner of theirs (which I couldn’t help thinking was a little scary). In response to Allan Murray’s re-enforcement of Fred Smith comments, Immelt asked annoyed/jokingly, “now really, tell me what you like best about today’s energy policy?”

Commenting again, that conservation and efficiency are the best things we can do immediately, Immelt highlighted the need for analytical studies to really figure out and be educated in the decision process.

Lee Scott, CEO of Wal-Mart was asked to comment and just gave Immelt a sort of ‘right on’ reinforcement of everything he had said. He joked that the one advantage that Wal-Mart has over GE was that they were used to criticism.

I personally left the room thinking “this is going to be entertaining.” I think that’s the first thing I said to another person as we walked out….

Side Note
After Immelt’s talk the audience was invited to Cordials in the Bar. It was particularly interesting to hear people’s take on Immelt’s comments. Apparently statements such as “I don’t believe in hobbies” and “I’m a capitalist” were interpreted by some to mean he doesn’t care about the environment and that he is all about the money. Personally, I didn’t take his comments that way at all. But I’ll admit it is hard for me to imagine anyone who lives on earth really not caring at all about the environment. Can anyone honestly state that they care nothing for the environment – the idea itself sounds almost absurd.

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html

Sales Job: Will Consumers Spend Green to Go Green?

Sales Job: Will Consumers Spend Green to Go Green?
H. Lee Scott, Jr., President and CEO, Wal-Mart Stores

Notes from the Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

If there was any debate whether CEOs cared about the environment, it was obviously clear that Lee Scott, CEO of Wal-Mart, did when he spoke the next morning. Scott, much humbler and softer spoken than I had seen him at the Wal-Mart CEO Sustainability Summit back in October, started by explaining Wal-Mart’s classic story -- the company continued to adhere to the mission set by founder Sam Walton who created the Wal-Mart Five & Dimes to support Americans in saving money while living better.

He described the Wal-Mart demographic, commenting that most of the conference audience had probably never been to a Wal-Mart. He communicated the statistic that 20% of Wal-Mart customers did not hold a bank account. Scott went on to explain that the company’s sales were actually affected on a monthly basis by consumer spending that was tied to a twice-monthly pay check cycle, demonstrating how Wal-Mart customers are living hand-to-mouth, paycheck-to-paycheck.

He also commented that there are things one can do as a business manager that are cost-effective, but that are wrong. We have to eliminate waste and it offers an appropriate way to reduce cost. Revenue generation will also come because people will want better products and will choose them – this is already being seen in stores in higher income areas where consumers are purchasing organics. Price sensitivity for the Wal-Mart customer is significant.

Scott reiterated Immelt’s position stating that a “carefully crafted” carbon program is inevitable and probably needed. But even with significant reductions, Wal-Mart will grow its carbon footprint by 8-9% per year just from new store growth.

Commitment at the Grass Roots Employee Level

Scott reported that 500K people (a third of the Wal-Mart work force) had taken the PSP, Wal-Mart’s Personal Sustainability Program. This was good to hear. Considering the payroll size, it’s difficult not to excuse the fact that a significant number of Wal-Mart employees are still unaware of the company’s “sustainability” commitments.

Visiting a store a couple weeks ago, I asked a number of Wal-Mart associates if they had experienced the PSP program. One person had heard of PSP but wasn’t sure what had happened to it. While Wal-Mart is now recognized as the largest distributor of organics, an associate stocking shelves in the food section could not identify whether they had any organic products and a manager quickly brushed off the question saying whatever you find on the shelves is what’s there.

None of the employees I spoke to had seen the company’s internal communications video that had been distributed to the supplier CEOs who attended Wal-Mart’s October Summit. The DVD provides an overview of what specific Wal-Mart businesses are doing about sustainability in their area. The DVD is called “Sustainability 101” and includes a short inspirational video called “Spirit of Sustainability” where Wal-Mart executives talk about how powerful an experience it is for Wal-Mart to be participating in impacting the “sustainability of life on earth”, empowered “to become leaders in sustainability.” Twelve “Sustainable Value Network Profiles” are presented in short videos covering:

• Greenhouse Gas
• Global Logistics
• Sustainable Buildings
• Ops & Procurement
• Packaging
• Chemical Intensive Products
• China
• Electronics
• Food & Agriculture
• Forest Products
• Jewelry
• Seafood
• Textiles

Certainly I can appreciate the challenges of reaching all Wal-Mart associates and addressing these remaining gaps. The PSP was developed as a voluntary mechanism to encourage awareness and support interested associates in personally incorporating sustainability into their lives by setting relevant personal goals such as weight loss, smoking cessation, recycling, etc. Wal-Mart still has a tremendous amount of work to do to get an organization of its size and scale mobilized to operate in a new paradigm, let alone to be aware of the work that the company is doing. Scott repeated a message I heard him say in Bentonville as well, “We are not green” we have a long way to go…

Sustainability As a Business Opportunity

During his interview in Santa Barbara, Scott reiterated that the business opportunity of sustainability was huge. With implementation of the Packaging Score Card this February (the first of more than 10 score cards to be implemented), Wal-Mart had already reduced packaging by 10-15%. Scott provided the example of the Nutrigrain Snack Bar that eliminated a cardboard insert without any impact on the stability of the product. The cardboard insert never actually served any real purpose – it was simply a waste that could be eliminated.

Scott jokingly commented as he lifted the plastic water bottle that was given to him to drink while on stage at the super posh and palatial Bacara Resort & Spa, “I am surprised that this conference should have bottled water.”

Pricing for Sustainability

Scott challenged business to address pricing to allow for sustainable choices, stating that it used to be that organic or sustainable items were higher margin, but the price needs to help the consumer make the better choice. Scott also provided some specifics about how the company intended to use end caps [shelves located at the end of store isles] to provide higher visibility and sales support for sustainable products. Wal-Mart also intends to use point of purchase displays for “story telling” about sustainable choices.

Scott believes you “don’t have to make [financial] tradeoffs” for sustainability. He also stated “there are certain chemicals that just shouldn’t be products”. A similar statement is made by Ray Anderson, CEO of Interface Carpets, in an excepted movie clip from The Corporation. See blog posting titled “Addressing Negative Associations with term 'Sustainability'"
on this site.

Scott said his managers were approaching this work by reflecting on their own experience, and looking to the future generation of management and asking what would they want us to have done.

Scott acknowledged Wal-Mart suppliers for doing the work involved in addressing the sustainability of their products. It’s commonly held in the consumer products industry that Wal-Mart tends to make what many suppliers consider "unreasonable" demands on price and value. This was not reflected in the first question taken from the audience. The CEO of a Wal-Mart supplier from China was the first to comment.

What About Consumer Education?

Ellis Yan, CEO of TCP out of China, the largest global producer of CFLs, spoke about his company’s adoption of Wal-Mart’s PSP program - a wonderful case study to be investigated and evangelized within Wal-Mart. Apparently Wal-Mart actively supported the work that led TCP to eliminate 80% of their waste. Ellis also proudly stated that TCP was now recycling 95% of their glass, the most significant material component the company works with. At the same time, Ellis challenged Lee Scott, in such a nice non-confrontational Chinese way, in regard to addressing consumer education and awareness.

Scott’s response was that the company’s focus was on the customer base. He commented that the work of sustainability “takes everybody” and that the NGOs have been wonderful resources to push Wal-Mart further than they were comfortable. He mentioned that they were doing an Earth Day tab [a newspaper advertising insert] but that they were still struggling with how to approach in-store signage. Controversy about what to communicate was leading the company to hold out on communicating messages that may be misleading or contradictory to new information that might become available in the future. Figuring this out is part of a process that Wal-Mart is currently engaged in.

Sustainability Integration

The last phase of RVN’s Sustainability: Where to Begin Methodology, involves the “Integration” of sustainability into a continuous improvement process. This is particularly important now as we don’t have a clear picture of what a sustainable company looks like. In this context, companies have more impetus than ever to keep pushing the boundary further and further in their work, experimenting and adding new technologies and processes as they come online, finding new and more creative ways to conserve, reuse and restore so that business (and now life) can be sustained.

Ideas for Wal-Mart

In regard to the challenge of reaching consumers, Wal-Mart might expand its sustainability-minded approach even further and consider how its current available resources can be tapped to address this issue. For example:

• Each Wal-Mart has a large TV aisle that could be used for running targeted audio visual communications that reach both customers and the remainder of its million and a half employees.
• Wal-Mart could partner with not-for-profits at the retail level who could answer questions or host information booths in the stores.
• Green Jobs Program information could be hosted in stores, combining sustainability education and new economic development in Wal-Mart communities, leading to more sales for Wal-Mart. Reference Van Jones’ work at http://ellabakercenter.org/page.php?pageid=5

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html

On the Line: Global Manufacturers Try to Adapt

On the Line: Global Manufacturers Try to Adapt
Andrew Liveris, President, CEO and Chairman, The Dow Chemical Company

Notes from Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

Another impressive CEO, who clearly knows his stuff, Andrew Liveris talked about world energy costs rising from $8 billion in 2002 to $26 billion last year. Commenting on Cap and Trade, Liveris explained that market volatility and instability is an issue that makes achieving margins very difficult.

Humans Have An Environmental Impact

As a US company that for some time has been managed by non-US born CEOs, Dow Chemical’s approach is to adhere to the “best” standards in the global market.

When the question came up on whether this [Eco, Carbon, etc.] is a business opportunity or a “should” the response was “all of the above.” Liveris provided the example of how Chinese companies were implementing sustainability measures in an effort to win production through “good will.”

Dow Chemical’s goals for the period of 2005-2015 intend to capitalize on the opportunity of population growth, through:

• Affordable housing
• Clean water
• Health
• Nutrition
  

“I am a scientist,” Liveris stated point blank “there is a human impact.” Does one really need to be a scientist to figure this out…

The audience was polled for the first time. Using little remote control devices we were asked to select responses based on questions posted on a Powerpoint slide. On a yes/no question, 75% of the audience polled believed that there could be a 50% reduction in CO2 by 2050.

Liveris commented, “we are so wasteful as a society.” Why not teach consumers this can be done.

Need for a US Energy Policy

Affordability of change influences the pace of business efforts. Government needs to step in. Liveris complained that he spent $60 Billion in capital outside of the US last year because of the US energy policy context. The US needs a coherent energy policy so that companies can determine their stance and start taking action. Today 80% of Tcf Natural Gas is not accessible. He said that Natural Gas needs to be put back on the table as every energy input needs to be on the table – “this is the price of being on the planet.” Liveris provided stats about Michigan where the average consumer’s bill has doubled in the last 4 years -- and it's cold in Michigan -- the bill could represent 40% of a consumer’s income.

Liveris was asked to comment on Washington lobbying and said, “why am I there trying to herd cats?” He implied that he didn’t want to be herding cats – that it’s a waste of his time - and threw out a statement that sounds like a cheer, “this country has skill, needs the will.” He provided the example of acid rain and the achievement of the Clean Air Act as a fix.

“Volatility and uncertainty kill demand”, was Liveris response to questions regarding Dow’s climate change interests/motivations. He stated that a signal at the 50-60%+ CO2 reduction level was needed to be a sufficient signal.

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html

Oil: The End of an Era?

Oil: The End of an Era?
Christophe de Margerie, CEO, Total
Daniel Yergin, Chairman, Cambridge Energy Research Associates (CERA)

Notes from Wall Street Journal ECO:nomics Conference

Santa Barbara, California

March 12-14, 2008

Di Margerie opened the talk stating appropriately in his French accent we need to get “more clever.” We need to reduce consumption.

The two speakers disagreed on peak oil. Di Margerie believes the situation is worse than does CERA, a leading advisor to international energy companies, governments, financial institutions, and technology providers.

While Yergin reiterated issues causing instability for business, he also listed what he called the “above ground risks” of change such as:

• Cost
• Political Climate
• What others will do
• What the implications of not changing will be

Peak Oil Has Been Overestimated

While di Margerie appeared to have subtle disagreements with Yergin on a superficial level, it was in the next level of detail that the issue became apparent. Di Margerie explained that CERA had estimated peak to be 120 million barrels/day, only recently revising this estimate to 105 million barrels/day. Di Margerie simply states it is not possible, the reserves are simply not there. The problem is the much more straight forward one – of simply not finding new fields at the same rate of pumping efficiency.

Di Margerie’s best estimates put peak at 100 million barrels/day.

He stressed “we need to think of the future.” His statements were clear. He accepts the implications of decisions. He described the need for financing, attention and support for development of alternative energy. The issue of getting economically viable alternatives is complicated. “We can not face the demand with fossil energies.”

Total is making commitments to reduce significantly by 2012. “We need to think seriously about reducing consumption.” The primary focus is to get the company’s organization/culture to know that “we’re serious about this.” First we will work to do better at what we know how to do – this speaks to efficiency and reduction of energy use. Second, we will invest in other energies - ones we use the way they are or ones we create through a process. Problems to be solved are 2nd generation bio mass.

Commitment in the Context of Severe Challenge

In response to the commitment di Margerie so clearly expressed in the context of severe challenge, I asked if he had some guidance to give other CEOs based on his experience.

His response was:
Take the risk of being exposed to those who do not agree. It’s the right thing to do. Be really clear on what is doable and what is not, and what is doable at what cost and how it will be managed. Consider “full cycle” impact – explain the real debate. This is what I can do.

Di Margerie explains that his 100 million barrels /day is actually optimistic because he would need Iraq and Iran to deliver as well as having improved access in places like Nigeria and other countries with political issues.

Be optimistic on potential. Need to be more vocal about the importance of this. Economic impact will be “relatively” limited [versus alternative of not acting].

Di Margerie went on to explain that Total was never considered (especially in EU) as “nice.” He wants to change this image - Participate in the debate - Find a way. He explicitly stated the need to go to end consumers and market yourself. Do what we need to do to “get it done.”

He commented on the point that messaging needs to be real (fact based) – it's misleading to use the term “clean energy”- it's not about clean or not clean but about being transparent on what the real implications are of the alternatives.

Possible study

I would love to do a study with just 3-4 companies; the perfect candidates would be GE, Wal-Mart, Total and Dow Chemical. The objective would be to see what we can understand and learn from their experience and get really specific on how to support them in picking up the pace and moving along the challenging process of change that they are obviously committed to. Each of these CEOs expressed deep unwavering commitment to going the long haul and a very realistic mind set about the fact that what they are embarking on won’t be easy but that it must be done - there is no other choice.

Each of these companies has in this commitment what it takes to engage their company in a deep corporate transformation effort.

Tell the rep from DWS Skudder to make sure that he’s got all these guys in his investment pool. He could also probably safely add Edison International, ADM, Chevron and Computer Associates.

So now to the last talk of the conference….

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at http://www.revischlesinger.com/blog.html

California Green: Promises and Pitfalls on America’s Environmental Frontier

California Green: Promises and Pitfalls on America’s Environmental Frontier
Arnold Schwarzenegger, Governor, State of California

Notes from Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

Schwarzenegger described alternative energy as a boon for the California economy -- certainly a very wise business decision to nurture it from a sustainable economic perspective. Generally speaking, Schwarzenegger came across as a savvy business man who was working through the challenging organizational politics of getting anything done in government.

He explained that a Carbon Cap like the one instituted in California sets a standard of acceptance - and attributed GE’s decision to lobby in Washington for a National Cap to the success the company experienced in sales of (I’m assuming) Ecomagination products in California.

The Business of Government

Schwarzenegger spoke about the need to reengineer [excuse me for using a business term] the California state budgeting process so that it allowed for more long term stability rather then defensive reactions to economic shifts.

He described his role in Sacramento as the “Tax Terminator” – this of course got a laugh from interviewer Kimberley Strassel of the Wall Street Journal Editorial Board. According to Schwarzenegger taxes were being issued to deal with deficits that were a result of poor financial management. He stated emphatically that we need to fix the budget system because the process was simply flawed. The issue needs to be addressed so that the rest of the important issues in California can be addressed.

I personally found it rather ironic; he sounded as if he'd been prepped well by a solid speech writer who had been at the conference from the beginning. He was basically repeating the same message that the CEOs delivered when explaining the need for Carbon Caps. It's very difficult to make spending decisions when you don’t know how much you have to work with (in the case of the California Budget) or if you don’t have a baseline for evaluating the value of how much you have to work with (in the case of companies trying to determine an effective strategy for achieving share holder value, while making significant new technology investments to meet existing and new demand while reducing waste/increasing efficiency).

Schwarzenegger provided a few nice quotes. “We need to hand this world to the next generation in better shape then we inherited it.”

I particularly enjoyed his response to an audience comment, when he stated, “We don’t want to force anybody to do anything.” Schwarzenegger at that moment sounded like a seasoned change management consultant, going on to explain that you can never force anyone to do anything. Instead Schwarzenegger talked about modeling - Do! and Inspire! - Using the words inform, guide, demonstrate, and good ideas. He reiterated that Washington needs to recognize that this is important. We need a vision for a country and world. We need to come up with an energy policy where we are not reliant on fossil fuels. “It’s all about technology.”

John Bryson, Chairman, President and CEO of Edison International, was called upon to comment and touted the success experienced by Edison in California. Schwarzenegger passed the accolades back, exclaiming we need to come together and we need good partners to get things done.

What About Nuclear?

This was a common question. All of the CEOs had stated that nuclear should be on the table as a possible option. There was a lot of reiteration that we need to consider all the options if we want to be able to transition from current use plus new use (from growing population and growing energy using appliances) to an 80% reduction in CO2 by 2050.

The reason that everyone generally seemed to agree that nuclear should go back on the table was because of the tremendous reduction of nuclear waste that had been achieved as well as a belief that the capacity to store the minimal waste that was left was feasible and something that should be evaluated as a possibility.

A Slow Process to Get Things Done in a Consensus System

When an audience member asked, “how are we going to get utility grade and scale solar into the grid (referring to current “Caps”)?” Schwarzenegger provided an entertaining comment. He explained that in government it’s much more difficult to get things done than in private industry. He asked the audience to imagine the governor's role as that of a painter having to consult with 120 artists (legislators) on how to make a stroke of paint. Consider the complexity of selecting color, thickness, weight and texture, the discussion of every aspect considered, an approach that has its benefits but takes a much longer time to get anything done.

Reconciling a Love for Big Cars

Another really fun aspect of Schwarzenegger’s interview was his response to the recurring question about what the speakers are doing in their own lives. Schwarzenegger answered that he loved big cars and admitted that he owned 2 Hummers. One had been converted to run on Bio diesel, the other he apparently fitted with a test hydrogen engine. Schwarzenegger added that he had a third car that had a special engine that recycled its exhaust and converted it into Hydrogen which could then be reprocessed through the engine. Finally, the hill by Schwarzenegger’s home had been fitted with Solar panels as well.

Another question that came from the audience was whether government can help with solar energy transmission issues. Apparently the issue so far has been the physical environmental impact of running wires and creating eye sores. Schwarzenegger agreed that there is a need to build more delivery lines. Uniformity and certainty in the laws was desired.

Schwarzenegger reiterated that the government consensus decision making process takes more time.

I personally found the conference generally optimistic. We have some really solid leaders in our industry leading companies who are in touch with the realities of the issues, would like to have more information, resources and support in helping them figure this out, and who, regardless, are each deeply committed to figuring out what each of their companies is going to do...

Why? -- Because this is the unquestionable reality of today’s business context…

There is simply nothing more to it….

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html

Addressing Negative Associations with the Term “Sustainability”

Addressing Negative Associations with the Term “Sustainability”
Activists Aren’t the Only Ones Who Care About the Environment

Notes from the Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

One of the first conversations I had upon arriving at the Wall Street Journal ECO:nomics Conference was with a sales representative from one of the sponsoring companies who expressed frustration with how loose people in her office are in their personal sustainability practices, even as the company is a model in product development and execution.

She described how fellow employees reacted to her advocating double-sided printing and how fellow residents in her upscale neighborhood get foggy-eyed when she explains that her household only needs the one car that is provided by her company to support her sales travel. Her husband bikes and trains to work. As an environmental engineer working on transportation systems, he is committed to walking his talk.

This sort of cultural phenomenon of complacency makes sense at a company with low turn-over, where 25-year anniversary parties are regularly celebrated. It’s also not surprising that America’s large upper-middle and middle class, with its limited understanding of the seriousness of the “eco” issues, is also expressing a strong desire to preserve the status quo.

Summing Up the Issues

• Negative stigma associated with environmentally-motivated activity
• Lack of awareness of the gravity of “eco”- related issues
• Inconsistent levels of understanding of “eco”-related impacts

Actions That Can Be Taken:
Design and Implement an Educational Engagement Program

The best approach is to design a program that is specifically targeted to address gaps in awareness or understanding that will vary according to each organization, culture and group of employees.

For companies and organizations where personal opinions/perspectives are clouding the ability to make decisions and get things done, a level-setting exercise like this can be a very useful vehicle to get everyone on the same page. This then creates a fact-based platform from which to move forward.

Arnold Schwarzenegger, Governor of the State of California, provided some very entertaining color to this issue when he explained that in government it’s even more difficult to get things done than in private industry. He asked the audience to imagine the role of governor as that of a painter having to consult with 120 artists (legislators) before placing a stroke of paint – consider the complexity of selecting color, thickness, weight and texture and discussing every aspect considered each step of the way.

Fairly, he commented that this consensus-oriented approach has its benefits but takes a much longer time to get anything done. I couldn’t help thinking that the State of California might also benefit from some general sustainability education (if this is not already happening), not to mention structured regular updates with new information and science that is becoming available every day.

Places to Start

Over the past couple of years I’ve been working with a global team of coaches and consultants to redevelop a grass roots sustainability awareness and engagement program for a main stream business audience.

The original program was developed by an NGO called the Pachamama Alliance http://www.pachamama.org/ which has been particularly successful working with indigenous tribes deep in the Ecuadorian rainforest to help preserve their land vis-à-vis impending oil interests.

In more recent years, the Pachamama Alliance developed a multi-media engagement program called the Awakening the Dreamer Symposium (the name is inspired by the indigenous Achuar tribe they are working with and their “dream” culture), see http://www.awakeningthedreamer.org/.

The program reviews the current sustainability context using interactive, audio-visual components and breakout activities. The topics it covers are:

• Where are we? -- Review of current statistical trends in the areas of Environmental Sustainability, Social Justice, and Personal Fulfillment
• How did we get here? -- Exploration of how unexamined assumptions have led to unintended consequences, the effects of which are increasingly being recognized and measured
• Where do we go from here? -- Review of emerging trends and solutions, and an interactive exploration of individual response through group breakouts

The newly redeveloped business program currently referred to as the BATD has been delivered in San Francisco, Boston and London. It is available to be delivered as a generic overview program or as a customized tool for specific business audiences or companies. For more information, please contact Revital Venture Network at (415) 436-9300 or info@RVNConsulting.com.

Free Web-Based Multi-Media Tools

With the mass availability of audio-visual and multimedia pieces through the internet, there are quite a few short, easy to understand videos that outline the current sustainability situation and why it’s important.

A few that I personally like to use as discussion starters (I recommend watching them in this order):

1) Trailer for a soon to be released feature length film: www.speciesalliance.org/video.php. This 10 minute ‘short’ outlines the current stats on species extinction. It presents the perspectives of various experts such as:

• Richard Leakey, anthropologist son of also famous anthropologists, Louis and Mary Leakey, who discovered some the oldest remains of man, a particularly famous set of bones called “Lucy”.
• Paul R. Ehrlich, Bing Professor of Population Studies and President of the Center for Conservation Biology at Stanford University, making the particularly compelling point that species loss is not just about losing the pandas and the polar bears, but rather the potential of losing species that are endemic components necessary for human life.

2) Ray Anderson Interview, excerpted from the movie The Corporation: http://www.youtube.com/watch?v=RcRDUIbT4gw. (You can also search http://www.youtube.com/ for key words ‘Ray Anderson’ and ‘Sustainability’). This 10 minute video has Ray Anderson, CEO of Interface Carpets, largest global commercial carpet manufacturer, telling the story of how he was introduced to the topic of “sustainability.” He reports on how his company has responded to what he describes as a “paradigm shift.”



3) The Story of Stuff, http://www.thestoryofstuff.com/. A little longer (20 minutes) animated piece that presents a somewhat entertaining story, easy for a mass consumer audience to understand. It basically explains that companies and individuals have been operating in a linear fashion on a finite planet and that it’s just not sustainable over the long haul.

While producer Louis Fox, founder of Free Range Graphics, marvels at the popularity of this piece, Free Range Graphics has actually created more than one hundred short educational media pieces. A particular award-winning favorite is, The Meatrix, a word-play on The Matrix, where Leo the Pig chooses to take the red pill leading Moophius the Cow to reveal “the truth” about factory farming. The animated video ends at a website where consumers can search by zip code for retailers that offer local, sustainable and organic food in their area. This clip along with two sequels is found at http://www.themeatrix.com/.

Sustainability Transformation

Implementing the kind of change associated with something that might be called a “paradigm shift” or more commonly referred to in business as “culture change” or “corporate transformation” is not an easy task. Interface, the largest global commercial carpet manufacturer has been credited with successfully embracing this level of change and as a result ended up creating its own sustainability consulting firm to respond to requests for more information from companies interested in learning from Interface’s change process.

At the Wal-Mart CEO Summit in October 2006, Jim Hartzfeld, Managing Director of this consulting firm called InterfaceRAISE, explained Interface’s approach to what RVN likes to call “sustainability transformation”. Jim Hartzfeld is, by the way, the guy who dropped Paul Hawken’s book, The Ecology of Commerce, on the desk of Ray Anderson as he was preparing a kick off speech for Interface’s first environmental policy meeting.

With the commitment of Ray Anderson, Interface’s CEO, the company quickly succeeded at getting everyone aligned and working hard on a long haul path to becoming a sustainable company. This has included things like eliminating toxic dyes and materials, finding replacements to achieve comparable quality and execution, developing new types of carpets to eliminate toxic backings, and developing a commercial carpet leasing program that would allow the company to take complete responsibility for the entire life cycle of their products including recycling all component parts.

Certainly there’s a long way to go. After all, there still isn't an example of a truly “sustainable” global company – producing no waste, powered by 100% renewable energy and producing only products and services that provide either neutral or added value to the world with no negative impact.

In the excerpted video, Ray Anderson articulates the success Interface has achieved. Between 1995 and 1996, Interface experienced a $200 million increase in sales without any increase in materials extracted from the earth, alternatively described as materials throughput.

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html

WSJ ECO:nomics Conference, Observations & Takeaways

Notes from Wall Street Journal ECO:nomics Conference
Santa Barbara, California
March 12-14, 2008

One of the most interesting things about the Wall Street Journal Conference was the consistent message delivered by each one of the CEOs who spoke, exceptionally intelligently and with tremendous integrity, to their responsibilities as leaders of their companies (their fiduciary responsibility to shareholders) and the logic of pursuing an alternative energy, waste elimination path.

Each CEO clearly articulated the challenges, as well as the responsibilities, of a CEO operating in an unstable context (including doing “what’s right”) where there was no clearly defined playing field that could be used as a basis for decision-making.

Consistent CEO Message

There was literally no debate - however much the Wall Street Journal interviewers tried to stir some up. Each CEO consistently stated:

• CO2, rising energy prices, and limited access to new supplies of fossil fuel-based energy present very real business risks
• The situation could also be seen as a major revenue opportunity (for the energy companies-it’s their only hope of maintaining consistent future revenue growth)
• Conservation/efficiency is a critical first step in the right direction
• Everyone needs to get engaged so we can quickly move in the right direction while serving rapidly growing energy needs.

Listening to these CEOs (and granted this is after all what I do. I help guys like these get this kind of work done), you could really tell that they were serious -- that they are taking what’s going on in relation to energy very seriously.

I was particularly impressed with:

• Jeffrey Immelt, Chairman and CEO, General Electric
• Lee Scott, Jr., President and CEO, Wal-Mart Stores
• Andrew N. Liveris, President, CEO and Chairman, The Dow Chemical Company
• Christophe de Margerie, CEO, Total (Paris-based, world's fourth-largest oil and gas company)

Each of these CEOs spoke with a level of integrity that made it clear that they are ready to take on (if not already somewhat engaged in) the kind of work that will be required to successfully position their companies for the future. In addition, there was a strong appeal to also address consumer culture and human behavior to quickly shift from current modes of operating, to modes that are sustainable – this means lasting and not destructive to our environmental resources (including air, water, food) or our companies' physical, social or economic resources. They also requested action on the political front to establish clear guidelines and level the global playing field.

By the middle of the second day, the talks already sounded like “same old, same old.” From a business perspective, the narrow scope of Carbon and the distracting couching of Climate Change were obviously too narrow a focus for what had the potential to be a much broader discussion.

About the author; Revi Schlesinger heads RVN Consulting, a network of experts aligning to support the success of large-scale corporate sustainability integration initiatives. Continue the conversation at www.ReviSchlesinger.com/blog.html