As point person for finance and risk management, the Chief Financial Officer plays a critical role in advancing corporate sustainability. Much support for this theme came in the form of a lively and highly quotable CFO panel discussion at the Silicon Valley Leadership Group’s annual Sustainable Corporation conference, held on May 2^nd.

For those requesting investment dollars to make a company’s products or operations more sustainable, visiting the CFO’s office can be about as much fun as a root canal. A CFO’s traditional focus on quarterly results and return on investment criteria makes ‘no’ a common answer for investment requests, especially those justified mainly on qualitative merits of sustainability. But it doesn’t have to be this way.

Three Chief Financial Officers, Lauralee Martin of Jones Lang LaSalle, Mark Hawkins of Autodesk, and Chuck Boyton of SunPower shared their experience and advice on effective cases for corporate sustainability. The conversation was moderated by Gil Friend of Natural Logic.

The panelists each described how their respective companies are committed to sustainability. In so doing, they provided a view into the CFO’s motivations and contributions, and the importance of being strategic, shareholder value-driven, and numbers oriented. Among the conversation’s punchier points:

• carbon is not how CFOs think
• calling something a sustainability investment can result in problems from the start
• economics versus the environment is a false choice
• there’s a need for bold action, and the world won’t be saved with two-sided paper
• there has to be numbers, and there has to be math
• CFOs love to find real value, and push it out to investors

Lauralee Martin of JLL noted that "carbon is not how a CFO thinks”. Rather, cases for carbon reduction and improved sustainability must be equated with economic opportunity – meaning energy savings, cost/revenue dollars, brand, risk management and the like.

For instance, while their direct carbon footprint is small, JLL manages a huge real estate footprint on behalf of their clients. Through efficiency efforts, JLL has helped clients save $125M in energy costs, and reduce carbon footprints accordingly. Further, this cash savings amounts to an increase in client property values of $2 billion. This is an example of the need she sees for "doing something bold” for sustainability, and at the same time, producing the kind of "value a CFO loves to find and push out there to investors”.

At Autodesk, CFO Mark Hawkins stresses support for "numbers and math”. Efficiency efforts in the company’s data centers are demonstrating measurable energy savings of 60%, and a clear business case for investment.

At the same time, he notes that a far more leveraged opportunity for Autodesk is helping their customers "imagine, design, and create a better world” through use of new sustainability-related features in the company’s design software offerings. Along these lines, Autodesk is actively expanding its product capabilities related to energy efficiency in building design, and is engaging in new software partnerships with a rapidly expanding market of clean technology companies.

SunPower, a manufacturer and integrator of solar photovoltaic systems, is striving to "change the way the world is powered”. Sustainability is core to the company’s mission and business value, and as such, reputational risk is taken very seriously. CFO Chuck Boyton notes that it is hard to quantify such risk, but it’s important to frame these intangibles as "our reputation is a huge asset and must be protected accordingly”. Also, he sees reducing freight costs and improving supply chain efficiency having strong sustainably benefits and value to customers.

As a group, the CFO panelists agreed that sustainability is most compelling in terms of what makes, and keeps, a company valuable to its shareholders. While two-sided paper is a smart thing to do, CFOs are motivated by higher level needs, strategies and opportunities. They stressed that sustainability should not be treated as a check-the-box exercise.

For those seeking investment, it is important to get the dialog right, and focus on the potential for high-value impacts. In CFO terms, the panelists all agreed that saying ‘yes’ to sustainability-related initiatives becomes easy when it means setting new standards for products and operations, establishing new levels of performance, and growing markets.

Historically, despite the size of the opportunity, advanced information technology solutions for efficiency have been slow to materialize. This is likely due to hardware and software dependencies in traditional building management systems (BMS), cost issues, and organizational alignment challenges. More recently, however, rapid advances in the price/performance of IT coupled with cloud-based computing have given rise to a wide range of new software-based facility resource management (FRM) solutions.

Further, many of these solutions include adaptive monitoring and control systems that learn from operational experience, and provide for occupant needs with a high degree of precision and efficiency. Typically designed to augment standard BMS functionality, these solutions provide advanced capabilities such as HVAC and lighting optimization, continuous commissioning, predictive maintenance, integrated fault detection, diagnostics, and prioritized work order generation.

In practice, FRM solutions are showing excellent returns. George Denise, a senior executive at Cushman Wakefield, described Cushman’s joint work with client Adobe Systems. Adobe’s San Jose headquarters has three office towers, comprising two million square feet. In addition, Adobe occupies numerous smaller sites around the world. They have implemented IBIS, an enterprise energy management software product from Integrated Building Solutions, Inc., across 12 sites, including their San Jose location. IBIS capabilities include extensive energy analytics, real time monitoring, continuous commissioning, and automated work order generation. The IBIS installation has an ROI of 30%. Also, Adobe has implemented an advanced HVAC optimization and control solution from Optimum Energy, achieving a 49% ROI.

And Darrell Smith, Senior Operations and Facilities Manager at Microsoft, described a major information technology initiative targeting Microsoft’s 118 buildings located near their headquarters in Redmond, Washington. The location includes 15 million square feet of space and seven different BMS platforms, generating 500 million data points a day. Challenged with the energy management, maintenance, and reporting across this extended campus, Microsoft is piloting a new facility and energy management solution from ICONICS, Inc. The solution will provide new capabilities for ongoing automated commissioning, fault detection and diagnostics, and prioritization and monetization of alarms. Microsoft is targeting energy savings of 6-10%, and payback in less than 18 months.

In an example of the power of adaptive controls, a new system is being tested on the UC Davis campus to optimize outdoor lighting. Davis is physically the largest campus in the University of California system. Outdoor lighting of buildings, roads, parking lots and bike paths is a major cost. A pilot solution from Lumewave provides wireless network management of outdoor lighting, including control, sensing and metering, diagnostics, logging and reporting. It enables geo-located organization and control of lighting assets, and ‘over the air’ programming. Somewhat futuristically, the solution can even interpret motion sensor data to light the anticipated path of a cyclist on a bike path.

These examples highlight how new information technologies are converging with traditional facilities management functions. This trend is explored in detail in ‘Facilities Resource Management Solutions – Emerging IT Tools Reshape Building Energy Management’ a major report released this week by AltaTerra Research. The report describes the complex and rapidly-evolving market for FRM solutions. It features new capabilities for energy and resource management in facilities, and profiles 25 solution providers and products.

There are a lot of savings to be had in commercial energy use. Commercial and industrial facilities account for nearly a third of US energy usage. Another third is transportation, and the remainder is residential and industrial. Remarkably, the DOE estimates that nearly 30% of commercial energy use is wasted through avoidable inefficiencies. Doing the math, this means approximately 10% of all US energy use is being wasted through inefficiencies in commercial facilities.

Yet to realize these savings, structural hurdles must be overcome. Disaggregated data, misaligned organizational incentives, heterogeneous and dated energy management infrastructure, and issues with business case credibility have been common issues, slowing energy efficiency investment.

The great news for facilities professionals is that a host of new IT-based solutions for Facilities Resource Management (FRM) solutions have emerged to address building energy efficiency in new and innovative ways. Over the last decade, information and control technologies have improved significantly, and it has become more cost effective to collect and analyze large amounts of operational data. These developments have led to the emergence of new application software, control systems, and IT-enabled devices, evolving Facility Resource Management (FRM) to a new level. Building upon the BMS, facilities professionals now have access to a range of add-on solutions for continuous commissioning, automated demand response, tenant engagement, and other advanced capabilities.

These solutions offer compelling business cases; most of them claim 20-30% savings on facility energy bills, right in line with the DOE’s predictions. Yet various FRM solutions are attacking the problem from different angles, to the point where it can be confusing for a customer to figure out just which approach is best for their situation. And of course there is some overlap, meaning that applying multiple FRM solutions may not have the cumulative effect you might hope.

In November, AltaTerra Research is releasing a landscape report on Facilities Resource Management Solutions: Emerging IT Reshapes Facility Energy Management. The report will define FRM capabilities and explore 25 different FRM solutions being offered by vendors today. Please join us this Wednesday, October 26 at 11:00 AM PT for a free preview of our FRM report.

General Motors’ electric vehicle, the Chevy Volt, is much in the news lately – and not in the way GM had hoped. Excerpting from the March 6, 2012 Wall Street Journal article by Jonathan Welsh:

At an executive briefing I recently attended, a panel of Fortune 500 CEOs was asked if their organizations aspired to leadership in sustainability. Polite laughter broke out, with comments like "would we really want to be up here advocating for the alternative?”

They went on to say aspiration is no longer the issue with sustainability– every business wants to be good at aligning economic interests with environmental and social concerns. The real questions are about focus and competency. They admitted being less clear on "what exactly does the organization need to do?”, and "how do we effectively get there?”

These questions are complicated, and with good reason. As an operating philosophy, sustainability has implications for an organization’s strategy, processes, roles, and technology infrastructure. Further, if affects all functions within an organization. Yet when done right, organizations are enhancing brand value and reputation, differentiating their products, managing risk, using resources more efficiently and saving money.

Figure 1: Top-Level Sustainability Competency Model

Over the past few years, major companies such as Intel, Whole Foods, Starbucks, and HP have been regularly identified as sustainability leaders in investment indices such as the Dow Jones Sustainability Index, and press rankings such as Newsweek’s Green Company Rankings. A common attribute shared by these organizations is that they are developing new competencies for sustainability across multiple business functions.

Our competency model above outlines the scope and dimensions of sustainability within an organization. Leaders are performing traditional functions in new ways, incorporating new strategies, competencies and technology related to sustainability. Goal setting, customer interaction, design and certification of products, energy sourcing, employee engagement, vendor management, corporate reporting, risk management, and facility energy efficiency are all examples of functions being transformed in the context of sustainability.

We see many specific examples of leadership in sustainability, coming from a wide variety of organizations and functions. In the coming months, we will be involving a number of these organizations in online briefings and case study reports, so their insights can be shared with a broader audience. Our goal is to get below the headline level, to explore economics and the detailed ‘how’ questions most useful to those considering similar efforts.

An outstanding leadership example in facilities resource efficiency is Adobe Systems. In 2011, for each of its three headquarters high rise towers in San Jose, California, Adobe earned an EPA Energy Star rating of 100. This puts them in the top 1% for energy efficiency among similar facilities. At an upcoming online conference in March, we will hear representatives from Adobe, Cushman-Wakefield, and the US EPA Energy Star program describe their extensive efficiency program, leading practices and metrics for building energy management, monitoring, and related incentive structures.

Another such example is IKEA, and their efforts in sourcing renewable energy. IKEA has become a leading commercial adopter, with on-site solar at 85 percent of their U.S. stores by the end of 2012. IKEA is one of a number of major organizations significantly scaling their solar deployments around the country, in response to falling solar prices and broadening a broadening of incentive programs. Later in March, we will hear from IKEA and others in an online conference focused on the details of how and why organizations are moving beyond experimentation with solar solutions to broad-scale deployment.

In summary, it is exciting to see how major corporations and institutions around the world are benefiting by embracing sustainability. Yet it is still early, and organizations are looking to learn and develop new competencies across a wide range of business functions. We remain focused on providing relevant market analyses, frameworks, and leading practice examples, to help organizations convert a philosophy of sustainability into new operating competencies.

As 2011 rapidly comes to a close, we take a quick a look back at some of the key developments of the past year – ones that will likely shape the market in major ways going forward.

Chinese Solar Panels Fuel Growth & Protectionism

While low-cost panels from China have fueled a rapidly growing U.S. solar market, they have also become a point of contention. In October, a handful of U.S. solar manufacturers led by SolarWorld formally accused Chinese companies of dumping panels in the U.S. market. This complaint could lead to tariffs being levied on Chinese-made panels. In turn, this could halt or reverse the trend of rapidly declining solar panel prices crucial in stimulating overall market growth. China has retaliated, launching an investigation of its own on U.S. solar subsidies and incentives. Both sides appear wary of starting an all-out trade war, but the result of the dumping allegation will certainly impact the U.S. market moving forward. If accepted, the trade allegations will lead to higher costs for new solar customers and impact market growth.

Electric Vehicles Enter the Mass Market

The Chevy Volt and Nissan Leaf hit the U.S. markets this year to much fanfare. While sales of the Volt have been less than expected, the car has received a number one ranking in Consumer Reports Customer Satisfaction Survey. Electric vehicle sales volume is anticipated to increase significantly in 2012, and retail-oriented companies are already deploying strategies to allow customers to recharge while shopping. As part of the ECOtality program, leading organizations, such as Walmart, Walgreens, and IKEA, have begun deploying EV-charging stations across the US. Corporations are also installing EV-charging stations to allow employees to recharge at work and purchasing EV’s for employees use.

Renaissance in U.S. Domestic Fossil Fuel Production

The U.S. is undergoing a renaissance in domestic fossil fuel production, thanks to the use of hydraulic fracking. Fracking, now used in more than one-third of all natural gas wells, is expanding oil and natural gas production in the U.S. and putting downward pressure on prices. In 2010, natural gas production grew for the fifth year in a row, increasing by 4.4 percent compared to 2009—driven by improved horizontal drilling and hydraulic fracking technologies. Prices have dropped from the 5-year (2005-2009) Henry Hub price of $7.28 Mcf to $4.52 Mcf in 2010, as the supply of natural gas has increased. Dropping natural gas prices have created a more difficult environment for many renewable energy projects, which must compete against natural gas-fired power plants on price. Yet many see fracking as a potential environmental and public health concern. Last week, a report from the EPA indicated that fracking was "likely” responsible for contaminating nearby ground water in Pavillion, Wyoming. Despite these concerns, fracking appears here to stay and will continue to affect the market for renewables in the future.

The ‘Solyndra Flu’

In September, solar panel manufacturer Solyndra filed for bankruptcy two years after receiving a $528 Loan Guarantee from the DOE. The company’s failure, dubbed the ‘Solyndra Flu’, a term referenced by Cromwell Schubarth of the Silicon Valley Business Journal, has dulled enthusiasm for clean tech products in the marketplace, and made investors increasingly wary. Conservatives in Congress are openly questioning the loan guarantee program and President Obama’s entire clean technology agenda. This failure has increased the partisan divide around renewable energy. A recent poll by Pew Research found that support for increasing renewable energy funding remains positive at 68%, it has dropped markedly in the past year—fueled by a dramatic drop in Republican support. The effects of Solyndra’s failures may be temporary, but gaining political support for new renewable energy legislation has become a much more difficult prospect in the immediate future.

At Hara’s Executive Summit held on September 20^th, new CEO Dan Leff described energy cost savings as a ‘here and now’ opportunity, a clear call to action for corporations and institutions. Yet to realize these savings, structural hurdles must be overcome. Disaggregated data, misaligned organizational incentives, heterogeneous energy management infrastructure, and issues with business case credibility have been common issues, slowing energy efficiency investment.

"This low hanging fruit has been hanging low for about 20 years” said Jim Sweeney, a Summit speaker, and Executive Director of Stanford University’s Precourt Energy Efficiency Center. "There seems to be an electric fence around that orchard – the question is, what is that electric fence?”

In this context, Hara introduced Mr. Leff, an energy industry veteran, and presented the company’s latest product development roadmap, outlining a number of new capabilities for energy management. While careful not to dismiss carbon management and sustainability, the clear direction going forward is to help customers save money on energy. Hara aims to provide better data, enterprise-level integration, and business support for efficiency investments in a way that is CFO-relevant.

Hara’s direction is consistent with other major players in this growing software market. Sustainability-related offerings from SAP, IBM, CA, Enablon, C3 and others are increasingly focused on helping customers drive measurable cost savings in energy use at an enterprise level. This was highlighted as a major trend in AltaTerra’s June 2011 industry landscape report titled ‘Enterprise Sustainability Management Solutions: Reference Architecture and Buyers Guide’.

Customers and experts presenting at the summit described energy costs ranging from 5-30% of operating profits, with a savings potential of up to 10% of operating profits. They also detailed the different ways that energy costs add up – directly on energy bills, and indirectly through freight and MRO (maintenance, repair, and operational costs).

Customers agreed that energy saving opportunities abound within most large organizations, and are very material to the bottom line. Not only that, many customers are demanding energy & GHG reduction programs at their suppliers. The challenge remains getting better visibility to energy use data, and establishing better enterprise-level disciplines for identifying and executing the highest-return efficiency improvements.

Hara provided a preview of new functionality currently under development – some of which will be released in the next 45 days, followed by additional releases in 2012. The outlines of three new modules included ‘Insight’, which will report enterprise-level energy performance, and analyze energy investment broadly in terms of a percentage of the organization’s operating profit. The new ‘Modeling, Forecasting and Budgeting’ module allows organizations to model best and worst-case enterprise-level energy cost scenarios, based on a range of internal and use and pricing variables. And a new module for ‘Efficiency Planning and Optimization’ supports top-down target setting for energy efficiency and cost savings objectives, enforcement of ROI calculation disciplines, and advanced project portfolio analysis.

We will continue to actively track Hara’s progress in development of this important new functionality, and in a larger context, highlight customer experience with deploying energy management capabilities.

Learn more about Hara, C3, and other sustainability management vendors in AltaTerra’s latest report "Enterprise Sustainability Management Solutions: Reference Architecture and Buyer’s Guide.”

Last week, we had the opportunity to discuss how companies are engaging employees in sustainability with two leading sustainability executives, Suzanne Fallender from Intel Corporation and Leilani Latimer from Sabre Holdings. The briefing was able to shed light on many of the complexities that managers face to effectively engage a diverse set of employees in a company’s sustainability efforts.

A major concern is how to appeal to a diverse group of employees. Companies must not treat employees as one unified group, but instead segment them based on how they like to be engaged and what matters to them and to create engagement programs accordingly. Some employees will be actively involved in every meeting, others will only look at group emails, and some may chose to only show up at events every once in a while.

Suzanne and Leilani listen to their employee base and develop engagement initiatives that meet their needs and are aligned with company goals. At Intel, Suzanne helps the company’s diverse functional groups determine the best way to integrate sustainability into their jobs and contribute to company goals. For example, with the IT group, they decided to implement more appropriate computer refresh times and reduce employee travel by using IT technology. At Sabre Holdings, Leilani has found that their original approach of using employee engagement software comprised of personal sustainability actions was not the best fit for employees. Instead, employees wanted to have workplace sustainability actions that they could implement on the job to help reach corporate goals. Because of this finding Leilani worked with AngelPoints to tailor the software library of sustainability actions available to include more workplace items such as reducing paper use and improving energy efficiency in offices.

Intel and Sabre Holdings not only tailor their employee education and engagement programs in a way that is most fitting for different types of employees, but also employee incentive structures. At Intel, they found that employees are motivated by their variable performance bonus so the company decided to link bonus pay with sustainability goals by adding environmental metrics into the company’s operational goals. One successful way Sabre Holdings motivates employees is through competitions, which include small monetary awards that the winning team can donate to environmental NGO of choice.

The right incentive structures for employees will vary from company to company, depending on geography, cultural norms, socio-economics, functional roles, team and individual personalities, etc. Figure 1 is a visual depiction of the different motivations that we’ve seen propel employees to be engaged and change their behavior with regards to sustainability. The salary/bonus slice is typically the common denominator among employees to be motivated to act. A combination of extrinsic motivations (e.g. salary/bonus, competitions, recognition, etc.) and intrinsic motivations (e.g. inherent sustainability interest, growth opportunities, etc.) may be useful to implement in order to address multiple types of employee motivations.

We have learned from Intel’s and Sabre Holding’s experiences and our own research what comprises an employee engagement program around sustainability including how it should be unique for different employee groups and how employee sentiment needs to be gauged on an on-going basis. What should be tailored within an engagement program includes the communications, incentives, goals and actions implemented, etc. because of differing employee characteristics within an organization.

To learn more about this topic visit AltaTerra’s on-demand recording at https://altaterra.site-ym.com/store/view_product.asp?id=821340.

To learn more about engaging employees in sustainability you can participate in our other upcoming web conferences on this topic including:

• Leading Employee Practices for Sustainability: Information Tools for Managing Engagement on August 18th
• Leading Employee Practices for Sustainability: Greening Employee Benefits on September 14th

Among sustainability professionals, a question we frequently hear is how to better engage ‘rank and file’ employees. Akin to the proverbial herding of cats, this is no easy task.

Organizations have come to understand that reaching ambitious sustainability goals and leadership status in the marketplace requires mass action. Also, it’s recognized that engaged employees, in general, are happier, more productive in their jobs, bring more innovative ideas, stay with the organization longer, are sick less, etc.

Along these lines, making real progress requires new capabilities for:

• Educating employees on sustainability
• Institutionalizing sustainability across company operations
• Creating performance incentive structures that motivate employees to act in alignment with sustainability goals

At AltaTerra, we are developing an online conference series, "Leading Employee Practices for Sustainability,” that showcases cutting edge practices, policies, and tools that industry leaders are currently using to engage employees in sustainability.

For example, in the corporate policy arena, we have a speaker from Intel describe how and why sustainability performance incentives were integrated into the company’s employee bonus program. In the corporate practices area we will feature a web conference on green benefits packages including a speaker from Beneplace. In addition, we will highlight multiple examples of IT tools that are used for employee engagement at large, to operationalize green team or employee initiatives, and to display current resource use data.

An interesting element of employee education and engagement is the use of resources such as software applications or websites. Many sustainability leaders first use their corporate intranet as a tool for company-wide education. Some intranets also have the ability to collect employee ideas and feedback.

More progressive companies are using social media to engage employees and often customers using such tools as Just Means, Facebook, Twitter, and dedicated websites. Companies are also beginning to use software programs such as those from AngelPoints, CloudApps, GreenNurture, and Tripos Software, and others for overall employee engagement. For more information on the IT tools used in employee engagement please stay tuned for the AltaTerra research report that will be released along with the web conference series.

The first online conference titled, "Leading Employee Practices for Sustainability: Performance Incentives & Alignment”, will take place Thursday, July 28^th from 11am to 12:30pm Pacific Time. To register for the event or the event recording visit: http://www.altaterra.net/events/event_details.asp?id=168800

The remaining events in the series will take place August 18^th and in early September. Stay tuned for more details!

Organizations around the world are elevating resource efficiency and sustainability from a tactical to a strategic concern, and they are moving aggressively to improve environmental performance in facilities, processes and products.

For many, this has meant new information management challenges, related to energy and water use, solid waste, toxic materials, carbon emissions, and other factors.

Often, sustainability management requires new types of information not previously tracked—e.g. details of energy and water use, product environmental attribute data, and GHG emissions. Furthermore, for IT, sustainability represents an expanded organizational paradigm, requiring approaches that span traditional boundaries between enterprise systems and facilities systems, design systems, suppliers, and customers.

In the rapidly growing market for Enterprise Sustainability Management (ESM) software and services, there is no "one size fits all” solution. Establishing an effective information architecture means taking a comprehensive view of sustainability, and putting in place capabilities that serve the organization’s highest-value needs.

In our new research report "Enterprise Sustainability Management Solutions” we present a clear, six-level reference architecture defining and classifying essential capabilities for sustainability management—from the enterprise level down to the device level. We profile and analyze offerings from nineteen key ESM solution providers, relative tonineteen specific capabilities described in the top three levels of the reference architecture. Example key findings include:

• Over the past few years, sustainability thinking has shifted away from a carbon focus to a concern with general sustainability and energy savings, notably in the US market.
• For many organizations, a combination of powerful market forces has elevated sustainability to a strategic level, with immediate implications for operations, products, and brand value.
• Leadership in sustainability requires organizations to adopt a broad range of new processes, practices and information management capabilities.
• Sustainability requires new types of information not historically tracked in many organizations – e.g. details of energy usage, water use, product environmental attribute data, GHG emissions.

Leading providers are identified in four distinct market segments. In conclusion, we present recommendations for how organizations can establish effective enterprise architectures for sustainability.

But why is a retail chain like Macy’s entering the business of refueling vehicles? The answer is that PEVs introduce the need for a new paradigm in the process of vehicle refueling.

Currently, refueling an internal combustion car is a relatively quick and simple process for the consumer. You pull into a gas station, swipe your credit card, pump your gas, and just a few minutes later you’re back on the road. But PEVs are nowhere near as quick to refill. Depending on the current charge state of the battery, they can take several hours to charge to full. Even quick-charging stations that are just topping off your battery can take a half hour or longer to finish the job.

To be sure, this is one of the primary drawbacks of PEVs. The concept of "range anxiety” captures this: it’s not just the worry that a 100-mile range might not be enough to get you to your destination and back, it’s that there’s no quick way to drop in somewhere and top off your charge if you end up needing to do so. Car owners aren’t used to the kind of planning constraints introduced by PEVs, and that’s historically been the primary impediment to mainstream PEV adoption.

But given the strong market interest in PEVs today, it’s clear that there’s been a change in the consumer’s mindset. Whether it’s rising gas prices, concern over climate change, or just the result of a long, slow process of consumers acclimating to a new normal, people are ready to give PEVs a try. And while it’s likely that in the medium- to long-run, technology will improve to the point where PEVs can be charged within minutes, for now the fundamental issue of long recharges is still present.

Which brings us back to Macy’s, and the need for a new paradigm in vehicle refueling. Consumers can’t pull into a gas station and fill up in just a few minutes. Because charging takes time, it needs to be done in parallel with other activities, and hanging out at the gas station won’t do the trick. This is why you hear talk of home charging stations: why not charge up while you sleep? And it’s why many employers are investigating on-site charging stations: why not charge up while you’re at work? And that’s why Macy’s and other retailers will be installing charging stations: why not charge up while you shop?

Consumers need to multi-task their PEV charging, and the places people spend the most time are home, work, and out shopping. Whether it’s a grocery store, a department store, or the local strip mall, anywhere consumers spend an hour or more of their time is a prime candidate for charging station installation. Over time, we’ll see vehicle refueling shift from concentrated stations to a more distributed model using existing commercial parking space. The opportunity to serve as This is what the new paradigm will look like.

Of course, in order for that transition to occur, a lot of planning must be done by businesses, electric utilities, and municipalities. This planning has already begun, but it needs to be encouraged and supported. Recently, AltaTerra hosted an excellent webinar on the subject of municipal investment in PEV charging infrastructure, featuring speakers from the City of St. Paul, Minnesota, and Pacific Gas & Electric Company. The recording of that webinar can be accessed here: http://www.altaterra.net/events/event_details.asp?id=151965.

• Economic development – Cities are fighting to take advantage of the growing U.S. solar market, which is one of the fastest growing industries in the U.S. By creating local solar markets, cities can attract more solar companies and benefit from an increase in tax revenue from new businesses.
• Job creation – With unemployment rates still high, many cities are looking to find new ways to add jobs. According to the National Solar Jobs Census, solar industry jobs are expected to increase 26% (24,000 jobs) by August 2011 in the U.S., compared to expected growth of 2% for the rest of the economy.
• Climate protection – 1,049 mayors have joined The U.S. Conference of Mayors' Climate Protection Agreement and vowed to reduce carbon emissions in their cities below 1990 levels. To address climate change goals, many cities are installing solar in combination with other efforts to reduce carbon emissions.
• Reduced energy costs – Tight budgets have cities looking to cut costs whenever possible. Solar, particularly when financed with a power purchase agreement, often allows a city to reduce energy costs immediately with no or low initial capital costs. 
  

• Many commercial customers are still unaware of the benefits of solar water heating. 
  
• Low natural gas prices are making it hard for SWH to compete in some areas even with incentives.
• Financing mechanisms such as power purchase agreements (PPA) and renewable energy service contracts (RESCO) are starting to be utilized for solar water heating, but are yet to be widespread.
  

• Building and facilities energy management solutions will become more widely adopted and integrated with enterprise-wide resource management systems.
  
• Corporate and institutional buyers will increasingly require suppliers to certifiably green their products.
  
• Corporate reporting will continue to migrate online and start to integrate financial and other types of performance in a single report.
  
• Financial executives will increasingly weigh in on environmental responsibility and cleantech procurement.
  
• In addition to business, institutional verticals such as municipalities and universities will move beyond planning to start to execute sweeping environmental performance improvement programs. (Stay tuned for our upcoming series on environmental sustainability activities in municipalities.)

A strange voting pattern in California may provide a clue. On California’s ballot was Proposition 23, which sought to delay and effectively kill many of the provisions of California’s 2006 Global Warming Solutions Act (Assembly Bill (AB) 32). Despite a conservative voting trend on other ballot initiatives, California voted overwhelmingly to keep the Global Warming Solutions Act intact—by a strong 22 percent margin.

Political opponents to AB 32 cite the high cost of renewable energy and cleaner technologies, and the drag these costs are placing on consumers and businesses. They also cite problems with cap and trade. Both are valid concerns. Cap and trade is burdensome and should be constructed carefully, if implemented at all. And despite falling prices and the prospect of long-term fuel savings, renewable energy solutions have higher upfront costs today.

But this election was clearly about the economy and jobs. In California, where the unemployment rate exceeds 12 percent, a shift toward clean technologies has in fact meant jobs and growth, rather than a ‘drag on the economy.’ The electorate understands this, with ‘green’ jobs growing 10 times faster than the state average since 2005, and nearly $9 billion of venture capital invested in clean technology—a sign of more jobs to come in the future.

For energy and climate legislation to advance nationwide in the U.S., the connection to domestic jobs and investment must be obvious—especially where it’s needed most, in the industrial heartland. A national renewable portfolio standard holds such a promise—a ‘made in America’ renewable energy and energy efficiency strategy.

In spite of a disenchanted electorate, Californians understand ‘made in California’ renewable energy, and what this means for their economy. Nationally, the U.S. Congress would be well-served to understand the larger opportunity in this election day lesson.

And skepticism abounds, as some green claims have shown to be green in name only (greenwashing). Compounding the issue is a dizzying array of competing standards and labels, many of which are still loosely defined and enforced.

Amidst this confusion, buyers should be pleased to learn about an emerging trend in marketing environmental claims of 'green' products: environmental product declarations (EPDs). EPDs are scientifically based and provide real transparency. They describe product ingredients and environmental impacts that occur across a product’s lifespan.

EPDs differ from other current green product claims in that they are based on an internationally accepted ISO standard (ISO 14025), refer to a product’s life cycle assessment (LCA), and are verified by an independent third party. Since EPDs depend upon LCA, the breadth of the environmental analysis of a product’s impact is much greater than that of other current reporting standards. For example, Scope 3 emissions only involve analyzing carbon across a product life cycle. LCA encompasses energy, water, material use, solid waste, greenhouse gases and other emissions, and the associated environmental impacts of those resources and waste streams.

The fact that EPDs are verified by an independent, third party should help to lessen consumer skepticism. And since they are based on accepted international standards and have analysis and reporting rules per product category, EPDs allow consumers to compare products 'apples to apples.'

To learn more about EPDs, LCA, and how companies use LCA for sustainable product innovation register for the online conference on October 20.

By Jaclyn Pitera and Don Bray

At AltaTerra Research, we consult with companies developing ‘green’ products and services for both new and established markets. In many cases, the environmental benefits of these new offerings are direct and apparent to buyers, such as a solar-powered device. In other cases, benefits depend on people working in new ways, product substitution, or other complicating issues.

Yet one unmistakable theme runs through nearly all our work, across industries and markets: information and communication technology enables a greener economy. IT can support more efficient, cost-effective, and ecologically sound services at every level of every market and industry.

A visible example is videoconferencing, which has the potential to reduce some types of travel. Most examples are behind the scenes, in industrial and commercial infrastructure, or embedded in products, such as the electronics inside that solar device.

This summer, in our newsletters and at conferences, we’re talking about what we’re seeing on this topic—from global, economy-wide research with IT consulting giant Accenture to developing products with startups in new markets. Today, we touch on an industrial example: how renewable energy is getting greener both in the production phase and in the use phase—in large part because of IT, including computer modeling, process and product control, and systems communications.

Regarding the production phase, we’ll be presenting Thursday in a session at Intersolar North America called "Delivering on the Promise of Sustainable PV Manufacturing." Solar companies are working to improve the environmental footprint of their already green products and are now starting to work together, sharing information and tools to advance the environmental benefits of their field.

In the use phase, a key example for renewable energy is what is called "system monitoring.” System monitoring is the communications apparatus that is increasingly being overlaid on the operating solar power and other alternative energy generators. System monitoring can thus be considered a portal for communication and control of the entire system and its integration with the utility mains, creating a key part of the emerging smart grid.

The information technology that is embedded in and runs on top of alternative power systems is a rapidly growing and increasingly contested industry. As Jon Previtali and I wrote recently: "Something interesting is happening in renewable energy and ‘self-generated’ power. As solar and other onsite and green power generation equipment becomes more widely deployed, a market is emerging in the information technology responsible for gathering and reporting useful information about what’s happening in the growing network of hardware. It is, to use two phrases much vaunted in their day, the ‘Internet of things’ in ‘new energy.’”

In the late 1990s, when cleantech was just forming as a field of venture financing, many of the entrepreneurs came from high tech companies. There wasn’t always a natural fit with energy and other industrial products in highly regulated markets, but there wasn’t any shyness about using information and communication technology to improve the product offering at any phase: computer modeling and design, supply chain improvement, manufacturing control, distribution networks, product monitoring, user display.

Commercial uptake of Property Assessed Clean Energy (PACE) financing is set for dramatic growth. A Johnson Controls study estimates that today's nascent U.S. commercial PACE market could represent around $18 billion each year. 

The idea behind PACE is simple: financing energy improvements that save money by recognizing that they save money and are part of the property they improve. PACE programs provide real estate owners a loan for energy upgrades which is paid back through property taxes over a five to twenty year period.

The idea got its start in United States municipalities in Colorado and California, has spread to other locales and now has the support of about 20 states, in part with the help of a statement issued last fall by the White House. Starting with residential energy efficiency retrofits, the market is expanding to include other technologies, including solar power, and commercial real estate, including large projects. How far the model will spread to other countries and how deeply it will affect the business marketplace is today an open question.

That was one of the conclusions of a lively webcast teleconference we held recently called "PACE Funding: Energy Market Breakthrough?” Attendees came from government, finance, manufacturing and energy project development, dialing in from three continents and several U.S. states.

The main speaker was Cisco DeVries, who helped develop the first program in California and is now President of Renewable Funding, which is working with organizations around the U.S. to implement programs. David Gralnik, Senior Vice President of Renewable Energy at Jones Lang LaSalle, provided a perspective on opportunities and barriers for PACE financing in commercial real estate—including commentary on a controversial stance taken by the mortgage organizations Fannie Mae and Freddie Mac.

Dave Gralink touched briefly on a PACE-funded large commercial energy retrofit at a luxury hotel in San Francisco. We’re seeing other commercial projects take place in locations where PACE programs have been in place for some time. For example, just north of San Francisco, a 1,000‐square‐foot solar thermal system was financed by the PACE-style Sonoma County Energy Efficiency Program at a winery. It is expected to save the business $95,000 in natural gas costs each year. Solar thermal can have a simple payback in just a few years, but financing the initial cost means that the return on investment is immediate.

While prospects for passage of the American Power Act may be slim according to some on Capitol Hill, a new national energy policy for America is surely needed. This legislation calls for increased domestic energy production, including offshore drilling with veto-rights from states, loan guarantees for nuclear plant construction and federal funding for:

· carbon-capture technology

· low‐carbon power generation, especially natural gas

· R&D for renewable energy and energy efficiency

The bill sets a pollution reduction target of 20% by 2020 and 80% by 2050 from 2005 levels.

It’s Earth Day—and the 40th one. We realize there’s a lot of competition for your attention on environmental topics.

Amid ongoing debates about climate policy, climate science and its implications, the media has grabbed Earth Day as its own, featuring resplendent nature pictures, healthy living tips, puzzling weather trends, and lots of product hype. Even eco-icons like Stewart Brand, the original editor of the put-solar-on-your-farm-cabin Whole Earth Catalog, is looking to stay in the game with a new book that appears to be advocating, of all things--big cities, nuclear power and genetic engineering?

Meanwhile, back at the office, corporate managers of various kinds are working day-to-day to interpret and respond to new environmental issues in the corporate marketplace.

Our experience at AltaTerra Research is a steady, daily flow of indicators pointing to one thing: a global transformation in business. And we have mountains of evidence to prove it.

This week, some of our consultants are polishing a summary of the recent Silicon Valley Leadership Group conference on corporate sustainability. It brought together more than 100 companies at the leading edge of this corporate trend.  There was remarkable consensus among executives about what they have learned. Here’s an excerpt from a draft of our conference report:

·       Corporate sustainability will create winners and losers. Companies that integrate sustainability into their strategy will have greater access to capital, talent, and natural resources. 

·       Green is not a fad. New requirements for environmentally-preferable products and services are driven by fundamental, transformational forces in the global marketplace, including rising standards of living, resource costs and supply limitations, global energy, climate, environmental regulations, stakeholder pressures, competition, and rising customer expectations.

·       Green markets are vast. Across industries, opportunities exist for innovation and competitive differentiation to improve the resource efficiency and environmental performance of products.

·       Sustainable product innovation takes many forms. Green innovation involves improvements to existing products or development of fundamentally new products. 

Forty years after the first Earth Day, environmental issues have shifted from being associated with a particular sub-culture to being an international, compulsory issue to address in corporate competitive advantage. For managers around the globe, with a variety of job titles, Earth Day has become an everyday affair.

Where Do Good (sustainability) Ideas Come From?

July 14, 2009 | Posted by seanbrady in Exchange

• Lime Energy has grown from 50 people three years ago to about 400 today
• Sustainability has taken a hit with the financial crisis, but energy efficiency is "sensible sustainability"
• Energy efficiency is a mature and growing industry with growing ranks of skilled engineers
  

• LED lighting will expand a great deal
• Web-based controls will shut off loads and reset temperature setpoints and schedules remotely
• Electricilty will be stored and re-used during peak periods