This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.


Business' social contract: an Interview by McKinsey Quarterly

Thanks to Laurie for forwarding this interestign article from McKinsey Quarterly
(See attached file: Social Contract.pdf)

A cost curve for greenhouse gas reduction

A cost curve for greenhouse gas reduction

A global study of the size and cost of measures to reduce greenhouse gas emissions yields important insights for businesses and policy makers.

Per-Anders Enkvist, Tomas Nauclér, and Jerker Rosander

2007 Number 1

The debate about greenhouse gases is heating up. Across a wide spectrum, some voices argue that emissions and climate aren't linked, while others urge immediate concerted global action to reduce the flow of emissions into the atmosphere. Even the advocates of action disagree about timing, goals, and means. Despite the controversy, one thing is certain: any form of intensified regulation would have profound implications for business.

Our contribution on this topic is not to evaluate the science of climate change or to address the question of whether and how countries around the world should act to reduce emissions. In this article we aim instead to give policy makers, if they choose to act, an understanding of the significance and cost of each possible method of reducing emissions and of the relative importance of different regions and sectors. To that end, we have developed an integrated fact base and related cost curves showing the significance and cost of each available approach, globally and by region and sector. Our other purpose is to help business leaders understand the implications of potential regulatory actions for companies and industries. Indeed, regulation is already on the minds of many executives. A recent survey1 indicates that half of all companies in Europe's energy-intensive industries regard the European Union's Emissions Trading Scheme (EU ETS) as one of the primary factors affecting their long-term investment decisions.

As the baseline for our study, we used the "business-as-usual" projections for emissions growth2 from the International Energy Agency (IEA) and the US Environmental Protection Agency (EPA). We then analyzed the significance and cost of each available method of reducing, or "abating," emissions relative to these business-as-usual projections. Our study3 covers power generation, manufacturing industry (with a focus on steel and cement), transportation, residential and commercial buildings, forestry, and agriculture and waste disposal, in six regions: North America, Western Europe, Eastern Europe (including Russia), other developed countries, China, and other developing nations. It spans three time horizons—2010, 2020, and 2030—and focuses on abatement measures that we estimate would cost 40 euros per ton or less in 2030. Others have conducted more detailed studies on specific industries and geographies. But to our knowledge, this is the first microeconomic investigation of its kind to cover all relevant greenhouse gases, sectors, and regions.

Reading the cost curves

The cost curves we developed show estimates of the prospective annual abatement cost4 in euros per ton of avoided emissions of greenhouse gases,5 as well as the abatement potential of these approaches in gigatons of emissions. The abatement cost for wind power, for example, should be understood as the additional cost of producing electricity with this zero-emission technology instead of the cheaper fossil fuel-based power production it would replace. The abatement potential of wind power is our estimate of the feasible volume of emissions it could eliminate at a cost of 40 euros a ton or less. Looked at another way, these costs can be understood as the price—ultimately, to the global economy—of making any approach to abatement cost competitive or otherwise viable through policy decisions. A wide range of assumptions about the future cost and feasible deployment rates of available abatement measures underlie the estimates of their cost and significance. For example, the significance of wind power assumes that actions to abate greenhouse gases will have already begun across regions by 2008. The volumes in our model (and this article) should be seen as potential abatement, not as forecasts.

Our model for the "supply" of abatement can be compared with any politically determined target ("demand") for abatement in the years 2010, 2020, and 2030. The science of climate change is beyond the scope of our study and our expertise, however. We thus compare, for illustrative purposes, our findings on supply with three emissions targets discussed in the debate—targets that would, respectively, cap the long-term concentration of greenhouse gases in the atmosphere at 550, 450, or 400 parts per million (a measure of the share of greenhouse gas molecules in the atmosphere). The goal of each target, according to its advocates, is to prevent the average global temperature from rising by more than 2 degrees Celsius. Any of these emissions targets would be challenging to reach by 2030, for they would all require at least a 50 percent improvement in the global economy's greenhouse gas efficiency (its volume of emissions relative to the size of GDP) compared with business-as-usual trends.

A simplified version of the global cost curve (Exhibit 1) shows our estimates of the significance and cost of feasible abatement measures in 2030—the end year of a period long enough for us to draw meaningful conclusions but short enough to let us make reasonably factual assumptions. We have developed similar cost curves for each sector in each region and for each of the three time frames.

At the low end of the curve are, for the most part, measures that improve energy efficiency. These measures, such as better insulation in new buildings (see "Making the most of the world's energy resources"), thus reduce emissions by lowering demand for power. Higher up the cost curve are approaches for adopting more greenhouse gas-efficient technologies (such as wind power and carbon capture and storage6) in power generation and manufacturing industry and for shifting to cleaner industrial processes. The curve also represents ways to reduce emissions by protecting, planting, or replanting tropical forests and by switching to agricultural practices with greater greenhouse gas efficiency.

We have no opinion about the demand for abatement or the probability of concerted global action to pursue any specific goal. But the application of our supply-side research to specific abatement targets can help policy makers and business leaders to understand the economic implications of abatement approaches by region and sector, as well as some of the repercussions for companies and the global economy. Our analysis assumes that the focus would be to capture all of the cheapest forms of abatement around the world but makes no judgment about what ought to be the ultimate distribution of costs. Of course, the ability to pay for reducing emissions varies greatly between developed and developing economies and among individual countries in each group.

For simplicity's sake, we compared our cost curve with the 450-parts-per-million scenario—in the midrange of the targets put forward by advocates. This scenario would require greenhouse gases to abate by 26 gigatons a year by 2030 (Exhibit 2). Under that scenario, and assuming that measures are implemented in order of increasing cost, the marginal cost per ton of emissions avoided would be 40 euros. (As a point of reference, since trading under the EU ETS began, in 2005, the price of greenhouse gas emissions has ranged from 6 to 31 euros a ton.)

We had to make many assumptions about future cost developments for these measures and the practical possibilities for realizing them. We assumed, for instance, that the cost of carbon capture and storage will fall to 20 to 30 euros per ton of emissions in 2030 and that 85 percent of all coal-fired power plants built after 2020 will be equipped with this technology. These assumptions in turn underpin our estimate that it represents 3.1 gigatons of feasible abatement potential.

In a 25-year perspective, such assumptions are clearly debatable, and we make no claim that we are better than others at making them. We believe that the value of our work comes primarily from an integrated view across all sectors, regions, and greenhouse gases using a uniform methodology. This model allows us to assess the relative weight of different approaches, sectors, and regions from a global perspective.

The supply of abatement approaches

Our analysis offers some noteworthy insights. It would be technically possible, for one thing, to capture 26.7 gigatons of abatement by addressing only measures costing no more than 40 euros a ton. But because these lower-cost possibilities are highly fragmented across sectors and regions—for instance, more than half of the potential abatements with a cost of 40 euros a ton or less are located in developing economies—an effective global abatement system would be needed to do so. Politically, this may be very challenging.

What's more, power generation and manufacturing industry, so often the primary focus of the climate change debate, account for less than half of the relatively low-cost potential (at a cost of up to 40 euros a ton) for reducing emissions (Exhibit 3). The implication is that if policy makers want to realize abatement measures in order of increasing cost, they must also find ways to effectively address opportunities in transportation, buildings, forestry, and agriculture. This potential is more difficult to capture, as it involves billions of small emitters—often consumers—rather than a limited number of big companies already subject to heavy regulation. Looking at specific measures, nearly one-quarter of the abatement potential at a cost of up to 40 euros a ton involves efficiency-enhancing measures (mainly in the buildings and transportation sectors) that would reduce demand for energy and carry no net cost. The measures we include in this category do not require changes in lifestyle or reduced levels of comfort but would force policy makers to address existing market imperfections by aligning the incentives of companies and consumers.

Further, we found a strong correlation between economic growth and the ability to implement low-cost measures to reduce emissions, for it is cheaper to apply clean or energy-efficient technologies when building a new power plant, house, or car than to retrofit an old one. Finally, in a 2030 perspective, almost three-quarters of the potential to reduce emissions comes from measures that are either independent of technology or rely on mature rather than new technologies.

The role of developing economies

Even though developed economies emit substantially more greenhouse gases relative to the population than developing ones, we found that the latter account for more than half of the total abatement potential at a cost of no more than 40 euros a ton. Developing economies have such a high share for three reasons: their large populations, the lower cost of abating new growth as opposed to reducing existing emissions (especially in manufacturing industry and power generation of high-cost developed markets), and the fact that tropical countries have much of the potential to avoid emissions in forestry for 40 euros a ton or less (Exhibit 4).

Forestry measures—protecting, planting, and replanting forests—make up 6.7 gigatons of the overall 26.7 gigatons of the potential abatement at a cost up to 40 euros per ton.7 We estimate that for no more than 40 euros a ton, tropical deforestation rates could be reduced by 50 percent in Africa and by 75 percent in Latin America, for example, and that this effort could generate nearly 3 gigatons of annual abatement by 2030. Major abatements in Asia's forests would cost more, since land is scarce and commercial logging has a higher opportunity cost than subsistence farming in Africa and commercial agriculture in Latin America.

In agriculture and waste disposal, which produce greenhouse gases such as methane and nitrous oxide, developing economies also represent more than half of the 1.5 gigatons of possible abatements costing no more than 40 euros a ton. Abatement measures in this sector would include shifting to fertilization and tillage techniques that generate fewer emissions and capturing methane from landfills.

Reducing growth in energy demand

An additional 6 gigatons—almost a quarter of the total abatement potential at a cost of 40 euros a ton or less—could be gained through measures with a zero or negative net life cycle cost. This potential appears mainly in transportation and in buildings. Improving the insulation of new ones, for example, would lower demand for energy to heat them and thus reduce emissions. Lower energy bills would more than compensate for the additional insulation costs. According to our model, measures like these, as well as some in manufacturing industry, hold the potential to almost halve future growth in global electricity demand, to approximately 1.3 percent a year, from 2.5 percent.

As for measures that would have a net cost, we found that around 35 percent of all potential abatements with a net cost of up to 40 euros a ton involve forestry; 28 percent, manufacturing industry; 25 percent, the power sector; 6 percent, agriculture; and 6 percent, transportation.

A power perspective

The power sector represented 9.4 gigatons, or 24 percent, of global greenhouse gas emissions in 2002, the latest year that consistent global figures are available across all sectors. In the IEA's business-as-usual scenario, emissions from power generation will increase to 16.8 gigatons a year in 2030 as a result of a doubling of global electricity demand. Five key groups of abatement measures costing 40 euros a ton or less are relevant to the power sector: reducing demand, carbon capture and storage, renewables, nuclear power, and improving the greenhouse gas efficiency of fossil fuel plants. Combined, these measures hold the potential to reduce the power sector's total emissions to 7.2 gigatons by 2030 (Exhibit 5).

Among power generation technologies, nuclear (at 0 to 5 euros a ton for avoided emissions) is the cheapest source of abatement and nearly cost competitive with power generated by fossil fuels. We estimate that abatements from carbon capture and storage could cost 20 to 30 euros a ton by 2030; those from wind power could average around 20 euros a ton, with a wide cost range depending on the location and on the previous penetration of weather-dependent electricity sources. In our model, the overall additional cost to the power sector of achieving the target of 450 parts per million, compared with the business-as-usual scenario, would be around 120 billion euros annually in 2030. This figure illustrates the very significant potential implications, for companies in the power sector, of any further actions that regulators may take to reduce greenhouse gas emissions.

Addressing the abatement potential described above would likely create a major shift from traditional coal and gas power generation to coal plants with carbon capture and storage, to renewables, and to nuclear power. In our model, coal-fired plants using carbon capture and storage would increase their share of the world's power generation capacity from nothing in 2002 to 17 percent by 2030; renewables (including a big but slow-growing share for large-scale hydropower), to 32 percent, from 18 percent; and nuclear power, to 21 percent, from 17 percent. Fossil fuel power generated without carbon capture and storage would decrease to 30 percent, from 65 percent.

Low-tech abatement

The role of technology in reducing emissions is much debated. We found that some 70 percent of the possible abatements at a cost below or equal to 40 euros a ton would not depend on any major technological developments. These measures either involve very little technology (for example, those in forestry or agriculture) or rely primarily on mature technologies, such as nuclear power, small-scale hydropower, and energy-efficient lighting. The remaining 30 percent of abatements depend on new technologies or significantly lower costs for existing ones, such as carbon capture and storage, biofuels, wind power, and solar panels. The point is not that technological R&D has no importance for abatement but rather that low-tech abatement is important in a 2030 perspective.

What are the implications?

Our analysis has revealed a number of important implications for each sector and region, should regulators choose to reduce emissions. We summarize the primary overall conclusions below.

Costs for reducing emissions

For the global economy, the cost of the 450-parts-per-million scenario described in this article would depend on the ability to capture all of the available abatement potential that costs up to 40 euros a ton. If that happens, our cost curve indicates that the annual worldwide cost could be around 500 billion euros in 2030, 0.6 percent of that year's projected GDP. However, should more expensive approaches be required to reach the abatement goal, the cost could be as high as 1,100 billion euros, 1.4 percent of global GDP.

If, as some participants in the climate debate argue, the cost of reducing emissions could be an insurance policy against the potentially severe consequences of unchecked emissions in the future, it might be relevant to compare the costs with the global insurance industry's turnover (excluding life insurance)—some 3.3 percent of global GDP in 2005.

Cost-conscious regulation

Should regulators choose to step up current programs to reduce greenhouse gas emissions, they should bear in mind four types of measures to restrain costs:

1. Ensuring strict technical standards and rules for the energy efficiency of buildings and vehicles

2. Establishing stable long-term incentives to encourage power producers and industrial companies to develop and deploy greenhouse gas-efficient technologies

3. Providing sufficient incentives and support to improve the cost efficiency of selected key technologies, including carbon capture and storage

4. Ensuring that the potential in forestry and agriculture is addressed effectively, primarily in developing countries; such a system would need to be closely linked to their overall development agenda

Shifting business environment

For companies in the power sector and energy-intensive industries, heightened greenhouse gas regulation would mean a shift in the global business environment on the same order of magnitude as the one launched by the oil crisis of the 1970s. It would have a fundamental impact on key issues of business strategy, such as production economics, cost competitiveness, investment decisions, and the value of different types of assets. Companies in these industries would therefore be wise to think through the effects of different types of greenhouse gas regulation, strive to shape it, and position themselves accordingly.

No matter whether, how, or when countries around the globe act to reduce greenhouse gas emissions, policy makers and business leaders can benefit from a thorough understanding of the relative economics of different possible approaches to abatement, as well as their implications for business and the global economy.

About the Authors

Per-Anders Enkvist is an associate principal and Tomas Nauclér and Jerker Rosander are principals in McKinsey's Stockholm office.

The authors would like to thank Richard Duke, a project manager of the underlying research effort, as well as acknowledge the contributions of Malavika Jain, Thomas Koch, Enrico Villa, and Nick Zuo to this article.


1 Review of EU Emissions Trading Scheme, conducted by McKinsey on behalf of the EU Commission, was published in November 2005. Its findings reflect responses from 167 companies and 163 other institutions.

2 Growth in emissions is driven mainly by the increasing demand for energy and transport around the world and by the deforestation of tropical areas.

3 Launched in spring 2006, the study has been conducted as a joint effort with the Swedish utility Vattenfall. However, the views expressed here are ours alone, and we are solely responsible for any errors. The results of the study have been reviewed by an academic panel consisting of professors Dennis Anderson (Imperial College London), Lars Bergman (Stockholm School of Economics), and Steve Pacala, Robert Socolow, and Robert Williams (Princeton University).

4 Calculated as the annual additional operating cost (including depreciation) less potential cost savings (for example, from reduced energy consumption) divided by the amount of emissions avoided. This formula means that costs can be negative if the cost savings are considerable. Possible costs for implementing a system to realize the abatement approaches are not included.

5 Such as carbon dioxide, methane, nitrous oxide, and sulfur hexafluoride.

6 A technology for separating greenhouse gases from the combustion gases of fossil fuels and industrial processes and then storing the greenhouse gases in natural underground cavities.

7 As trees grow, they bind greenhouse gases. When they are cut down and burned, the greenhouse gases are released back into the atmosphere.

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CRO: Integrating IBM... IBM takes on the challenge of weaving corporate social responsibility efforts into its core business practices.

Integrating IBM
Submitted by Danielle on Wed, 2007-04-04 15:00. Business Ethics | Social Responsibility

Stan LitowIBM takes on the challenge of weaving corporate social responsibility efforts into its core business practices.

By Abby Schultz

After creating supplier conduct principles in June 2004, IBM developed a tutorial to train more than 4,000 procurement officers to look at the labor and environmental practices of potential suppliers at the same time as questions of cost, quality and delivery of products and services.

"It's important your workforce is aware of the program, so they are able to be the ambassadors on a day-to-day basis," says John Gabriel, IBM's Manager of Supply Chain Social Responsibility.

By creating the principles, and training its global procurement workforce, IBM is achieving the Holy Grail of corporate social responsibility (CSR) efforts today: integration. That is, IBM is weaving social and environmental concerns into its core business practices. As many of its executives like to say, corporate social responsibility is "part and parcel" of how IBM does business.

"A lot of companies are really working on this, struggling to make sure [CSR] is integrated," says Rev. David Schilling, Director of the Global Corporate Accountability Program for the Interfaith Center on Corporate Responsibility, a group of 275 faith-based institutional investors. "We've worked with many, many companies in the supply chain—in the apparel, footwear, toy and automotive industries—and you can tell pretty quickly whether the CSR function and the supply chain labor standards are ancillary or core to the business approach," he continues. "I think IBM is really trying to align those two, which is critical."

A lot of attention is being paid today to the topic of integrating social and environmental concerns into core business practices. In a 2006 report titled "From Challenge to Opportunity: The Role of Business in Tomorrow's Society," executives from the World Business Council for Sustainable Development say businesses will make their biggest contribution to society through core business operations—"through technologies and products that enable the world to address its environmental and social challenges." Real societal change, the report asserts, will not come from philanthropic efforts.

Many companies are wrestling with what this all means. For some companies, of course, corporate responsibility evolved as a way to stay out of trouble. But that outlook is changing.

"More progressive companies are starting to see that by outperforming their peers on sustainability, and having a keen awareness of the way sustainability is shaping their industry, they can create value and exploit new markets for products and services," says Matt Loose, advisor at SustainAbility, a think tank and consulting firm in London.

Not all of IBM's stakeholders would agree that IBM has a perfect record when it comes to integrating corporate responsibility into core business practices. Many non-governmental organizations (NGOs) and socially responsible investors are watching closely to see if conditions at factories that supply parts for IBM and others show real improvement, and they remain concerned with manufacturing operations in China, where workers are limited to joining a single government-run trade union.

Stakeholders also remain concerned with some of IBM's business practices. The SEC is currently conducting formal investigations into how IBM disclosed earnings and equity compensation in the first quarter of fiscal year 2005, and into potential accounting irregularities involving a customer, Dollar General, according to KLD Research & Analytics, an investment research firm.

In 2004, IBM was notified that the SEC is considering recommending a civil action against IBM for possible accounting irregularities related to an $11 million transaction in fiscal year 2000 with Dollar General, a customer of IBM's Retail Stores Solutions unit, according to IBM's 2006 annual report. The SEC is also conducting a formal investigation into IBM's disclosures of earnings and expensing of equity compensation in the first quarter of 2005, the report said.

Keeping With Tradition
IBM argues corporate social responsibility has always been part of how it conducts business. The social responsibility material on IBM's website tells readers IBM is "based on a set of fundamental values," and from its inception in the early 1900s, the company "staked out a territory few corporations were willing to approach in that time, the idea of the corporation as partner, citizen, neighbor and participant in the world's affairs."

Stan Litow 

Stanley Litow, IBM's Vice President of Corporate Community Relations, points out that IBM has been issuing environmental reports since 1935, has integrated corporate philanthropy since World War II, and has encouraged employees to volunteer in their communities since the days of Thomas J. Watson, Sr., IBM's first president, through the first half of the 20th century. Today, IBM is a recognized leader in community relations.

"A lot of things that are corporate citizenship are part of the company's DNA," Litow says.

IBM, however, no longer operates in separate silos, with the operations chief in Tokyo working independently from the operations chief in the United States. The company is integrated from top to bottom, and the function of corporate citizenship is integrated in the same way marketing or research is integrated. Four years ago, IBM set up a Corporate Citizenship Council, with Litow as its head, and division heads of environmental affairs and product safety, government programs, workforce relations, investor relations and integrated supply chain, among others, as members. The group meets every other month, and communicates electronically in the time between to collaborate, problem solve and conduct strategic planning on CSR issues and to communicate corporate social responsibility priorities throughout IBM's business operations.

"For example, the environment—it's about how you manufacture goods, but it's also about how you incentivize employees to be environmentally aware and conscious," Litow says. "If you haven't set up a management structure, you end up spending resources in an inefficient fashion."
Encouraging Industry Collaboration

About the same time IBM was establishing the Corporate Citizenship Council, Bradley K. Googins, Executive Director of the Boston College Center for Corporate Citizenship, got a call from Litow. IBM was exploring the idea of working collaboratively with other companies on strategic planning issues related to corporate citizenship. A subsequent gathering of executives revealed companies were spending time on how they should report social and environmental performance, but, unlike financial reporting, they weren't using the data they gathered to manage their business, Googins says. "By the time a company is reporting out, it's honestly much more of a communication vehicle than a management tool," Googins says. Litow bristles at the emphasis given to social and environmental reporting, saying, "the real benefit or value to a company is less in terms of what happened in the past, and more in terms of going into the future—strategic planning for the company, it's vital."

Out of this meeting, IBM, with the assistance of the Center for Corporate Citizenship, and AccountAbility, a non-profit think tank based in London, founded the Global Leadership Network, which Litow chairs. The idea of the network is to help companies integrate corporate social responsibility within core business practices. An initial group of 10 companies, including 3M, General Electric, FedEx and Omron, has grown to 25, with this year's addition of Home Depot, Wells Fargo and Dow Chemical. The network allows companies to exchange best practices and have access to an interactive toolkit where they benchmark their practices against others. A company that believes IBM's supplier conduct principles can be applied to their business can look at how their ideas stack up against IBM's, Litow explains.

"What the Global Leadership Network allows you to do is to plan across the various departments within your company and to contrast that externally against what other companies are doing and to provide yourself with a roadmap toward getting better," Litow says.

IBM's supply chain practices are a good illustration of how CSR becomes part of day-to-day business decisions. IBM has a huge global supply chain: The company buys $36 billion a year in goods and services from 30,000 suppliers in approximately 80 countries. The company created a department to address supply-chain corporate social responsibility in 2004 and placed it within the Global Procurement area instead of Compliance or Communications because "that's where the point of influence exists with who we do business with," says John Gabriel, the Manager of Supply Chain Social Responsibility.

A major effort of this department was to work with HP and Dell, as well as electronics manufacturing companies like Flextronics, Jabil and Sanmina-SCI, to write a uniform set of supplier principles around labor and environmental practices. The principles, called the Electronic Industry Code of Conduct (EICC), was created in October 2004 and has now been signed by 25 members.

Last year, members of the EICC Group sat down with two NGOs, the Centro de Reflexión y Accíon Laboral (CEREAL) and the Catholic Agency for Overseas Development (CAFOD). The purpose of the two-day session was to discuss CEREAL's concerns with labor practices at factories in and around Guadalajara, Mexico—practices CAFOD had drawn attention to two years earlier in a report titled, "Clean Up Your Computer."

"We were able to discuss issues in more detail and to get to the root cause of the situation and then to understand what we can do to make improvements," says Gabriel. Among areas needing attention: letting workers know their rights and how to voice concerns they might have with hours, safety, or daily workforce practices.

This effort by IBM and other EICC companies wins praise from Schilling at the Interfaith Center on Corporate Responsibility. "I'm sure there's some tension, but they really, in my estimation, have taken seriously the charges of specific labor rights abuses in factories where they are sourcing," Schilling says.

Focusing on Green
Environmental concerns touch every aspect of IBM's business. "The environment matters in research, in product design, in manufacturing, throughout procurement, in the way we distribute and ship our products and materials around the world, through our services business interest, and of course, environmental concerns directly intersect with the work we do with governments, in terms of communications, and real estate and the like," says Wayne Balta, IBM's Senior Vice President of Environmental Affairs and Product Safety.

IBM developed its product stewardship program in 1991. The effort, part of its global environmental management system, encourages the company to use environmentally preferable materials, including as much recycled and recyclable materials as possible, and to design for disassembly for when a product reaches the end of its useful life, Balta says.

Over the years, IBM, among other computer companies, has faced pressure from NGOs and socially responsible investors to recover and recycle electronic equipment, particularly personal computers. The take-back of old IBM PCs now falls into the hands of Lenovo Group Ltd. of China, which bought IBM's PC business in 2005. In its 2006 CSR report, IBM details how materials are recovered in its "product end-of-life management operations." In 2005, 1.6 percent of a total 53,670 metric tons of products and waste collected ended up in landfills, 16.26 percent less than the previous year. Nearly half of the material was recycled, and some 37 percent was resold.

The environmental section of IBM's corporate responsibility report lays out the business case for IBM's environmental efforts in dollars and cents. IBM estimates savings and cost avoidance from its environmental initiatives was $255.5 million in 2005, compared to that year's expenses of $105.6 million.

Tying Responsibility to the Bottom Line
IBM's corporate responsibility efforts sometimes look like straightforward philanthropy, but its business interests often are in the picture. Several years ago, the research labs at IBM were working on grid technology—software that joins idle desktop computers into massive supercomputers. In 2003, the technology enabled scientists to find 44 potential smallpox treatments. Today, the World Community Grid (as it is now called) joins 500,000 computers worldwide for scientific, humanitarian research. At the same time, several IBM customers are considering whether the technology can be used to harness idle computer time to solve problems within business and governments, IBM's Litow says.

Projects such as the grid are proof to Litow as well as stakeholders that corporate responsibility brings value to the bottom line.

"I think IBM has been quite ahead of the curve on this for some time," says Googins at the Center for Corporate Citizenship. "They inherently understand this as a business issue. I think they were one of the leaders at understanding philanthropy is misguided. It's not about the money; it's about how a company makes the money. Now, they are clearly one of the leaders at how to integrate this into the business."

Green nanotechnology: Nanotechnology need not be the new asbestos. It has the potential to be the new penicillin: a panacea for polluting industries and a shot in the arm for U.S. technology leadership

Thanks to Sharon for this one
The Wedding Of Green Science And Nanotechnology

379 Words
26 April 2007
CMP TechWeb
© 2007 CMP Media LLC. All rights reserved.

Nanotechnology need not be the new asbestos. It has the potential to be the new penicillin: a panacea for polluting industries and a shot in the arm for U.S. technology leadership.

A new report issued today by the Project on Emerging Nanotechnologies, an initiative backed by the Woodrow Wilson International Center for Scholars and The Pew Charitable Trusts, calls for a strong marriage between nanotechnology and green science to build a sustainable society. And it calls on the federal government to do the officiating.

"Nanotechnology could help us make every atom count -- for example, by allowing us to create ultra-efficient catalysts, detoxify wastes, assemble useful molecular machines, and efficiently convert sunlight into energy," the report says. "It could potentially contribute to long-term sustainability for future generations, as more green products and green manufacturing processes replace the old harmful and wasteful ones."

The report, Green Nanotechnology: It's Easier Than You Think, summarizes several green nanotech successes and makes policy recommendations to protect the $8.3 billion the U.S. already has invested since the U.S. National Nanotechnology Initiative was launched in 2001.

Green nanotechnology already is under development in labs across the country. A new, environmentally friendly method of layering semiconductor materials -- selective deposition -- is being developed by Farhang Shadman, director of the National Science Foundation's Semiconductor Research Corp., and his research group at the University of Arizona in Tucson.

University of Oregon chemist James E. Hutchison is working on a semiconductor manufacturing process, a green way to pattern metal at nanoscale called biomolecular nanolithography.

Yi Li, a chemist with the Georgia Institute of Technology in Atlanta, is developing a nanomaterial that could replace the toxic tin-lead solder used to wire electronics products.

As the many examples cited in the report suggest, green technology isn't some fringe movement to "Think Different"; it "could be the largest economic opportunity of the 21st century," as venture capitalist John Doerr put it.

Whether that opportunity pays off, the report says, depends largely on policy decisions made by the federal government. Citing recommendations by experts and interested parties, the report says, "There is an urgent need for data on nanomaterials in order to resolve environmental, health, and safety questions."

The Case for Burying Charcoal: Research shows that pyrolysis is the most climate-friendly way to consume biomass.

Thanks (again) Norbert! interesting concept, although the article seems to gloss over some points, as the comments point out.  The math in the Tech Review article seems wrong - the energy produced through pyrolysis, burning of the methane and burying of the char is less than if complete combustion had occurred.  However, if the source is carbon-neutral, the overall system should be carbon-negative.  The summary of the original article states "
Black carbon sequestration appears to be more efficient in general than energy generation, in terms of atmospheric carbon saved per unit of biomass; an exception is where biomass can efficiently displace coal-fired generation."  

What intrigues me is how this example relates to efficiency vs. effectiveness.  Although the individual steps are not optimised, the overall system delivers energy, captures carbon and maintains the soil from which the biomass is obtained.  It also shows promise in scaling down so that it can be distributed, shortening the overall cycle.  The last comment about how South American Indians used slowed burning techniques to clear and enrich the soil is fascinating - an alternative to 'slash and burn'?

       Regards, Norbert


The Case for Burying Charcoal by Tyler Hamilton
Research shows that pyrolysis is the most climate-friendly way to consume biomass.

Carbon capture: Heating biomass such as wood pellets (right) in an oxygen-free environment produces char (left) and byproducts such as methane that can be burned. Research shows that turning biomass into char and burying the char is a good way to avoid releasing greenhouse gases into the atmosphere.
Credit: U.S. Department of Energy

Technology Review - Published by MIT
Thursday, April 26, 2007
The Case for Burying Charcoal
Research shows that pyrolysis is the most climate-friendly way to consume biomass.
By Tyler Hamilton

Several states in this country and a number of Scandinavian countries are trying to supplant some coal-burning by burning biomass such as wood pellets and agricultural residue. Unlike coal, biomass is carbon-neutral, releasing only the carbon dioxide that the plants had absorbed in the first place.

But a new research paper published online in the journal Biomass and Bioenergy argues that the battle against global warming may be better served by instead heating the biomass in an oxygen-starved process called pyrolysis, extracting methane, hydrogen, and other byproducts for combustion, and burying the resulting carbon-rich char.

Even if this approach would mean burning more coal--which emits more carbon dioxide than other fossil-fuel sources--it would yield a net reduction in carbon emissions, according to the analysis by Malcolm Fowles, a professor of technology management at the Open University, in the United Kingdom. Burning one ton of wood pellets emits 357 kilograms less carbon than burning coal with the same energy content. But turning those wood pellets into char would save 372 kilograms of carbon emissions. That is because 300 kilograms of carbon could be buried as char, and the burning of byproducts would produce 72 kilograms less carbon emissions than burning an equivalent amount of coal.

Such an approach could carry an extra benefit. Burying char--known as black-carbon sequestration--enhances soils, helping future crops and trees grow even faster, thus absorbing more carbon dioxide in the future. Researchers believe that the char, an inert and highly porous material, plays a key role in helping soil retain water and nutrients, and in sustaining microorganisms that maintain soil fertility.

Johannes Lehmann, an associate professor of crops and soil sciences at Cornell University and an expert on char sequestration, agrees in principle with Fowles's analysis but believes that much more research in this relatively new area of study is needed. "It heads in the right direction," he says.

Interest in the approach is gathering momentum. On April 29, more than 100 corporate and academic researchers will gather in New South Wales, Australia, to attend the first international conference on black-carbon sequestration and the role pyrolysis can play to offset greenhouse-gas emissions.

Lehmann estimates that as much as 9.5 billion tons of carbon--more than currently emitted globally through the burning of fossil fuels--could be sequestered annually by the end of this century through the sequestration of char. "Bioenergy through pyrolysis in combination with biochar sequestration is a technology to obtain energy and improve the environment in multiple ways at the same time," writes Lehmann in a research paper to be published soon in Frontiers in Ecology and the Environment.

Fowles says that there would be an incentive for farmers, logging communities, and small towns to convert their own dedicated crops, agricultural and forest residues, and municipal biowaste into char if a high enough price emerged for the sale of carbon offsets. "Every community at any scale could pyrolyse its biowaste ... motivated by doing their bit against global warming," he says.

Fowles believes that storing black carbon in soil carries less risk, would be quicker to implement, and could be done at much lower cost than burying carbon dioxide in old oil fields or aquifers. And he says the secondary benefits to agriculture could be substantial: "Biochar reduces the soil's requirement for irrigation and fertilizer, both of which emit carbon." Fowles adds that it has also been shown to reduce emissions of greenhouse gases from decay processes in soil. This would include nitrous oxide, a potent greenhouse gas. "Biochar has been observed to reduce nitrous-oxide emissions from cultivated soil by 40 percent."

David Layzell, an expert on bioenergy and plant sciences at Queen's University, in Kingston, Ontario, says that finding the right balance between energy generation from biomass and sequestration of its char is a major area of research with global implications. "The issue of how much you should burn and how much should go back to the land is partly an economic issue and partly a sustainability issue. We don't have the full answers to this, but that's the kind of research we need."

Copyright Technology Review 2007.


Burying Energy by hsfrey  4/26/2007 1:37 AM

The energy we get from burning carbon fuels comes from the oxidation of the carbon. Charcoal represents a large proportion of the carbon, and hence the energy in the fuel. By not burning the fuel completely, we'd simply get less energy out of it, so we'd have to burn more OTHER fuel to make up for the fuel we buried.
This is like saying that you put half as much CO2 into the atmosphere if you dump half of your gasoline onto the ground and don't burn it.
What am I missing here?


Re: Burying Energy by Buckwheat469  4/26/2007 2:32 AM

It does sound a bit odd to have all of this usable energy in the form of carbon that we would just be burying. I like the idea of using it in fertilizers of some sort to enhance the growth of plants, but I know that the governments, in their infinite wisdom, will just bury it in fear. The point is that we would be reducing the CO2 in the atmosphere by burying a large portion of the plant byproduct, but if the plant produces a net zero CO2 footprint, then what is wrong with using the char for fuel and releasing the CO2? In the long-run, if we use the char in place of coal then we would be reducing the CO2 emissions by not using buried stores while allowing other plants (like grasses and mosses and other things) to grow while we used crops and trees and other biomass for fuel.

Re: Burying Energy by RickJ  4/26/2007 4:03 AM

The paper summary notes that displacing coal combustion by burning the char is better than burying - which makes sense, but the tech review summary does not make this clear.

Sequestering Carbon their goal by nekote  4/26/2007 5:35 AM

The goal would seem to be to sequester Carbon that mostly comes out of the atmosphere.

In essence, an entry for Branson's prize of $25 million for the best way to sequester a Gigaton, per year, of Carbon (or is it CO2?).

This effort is to have a negative - not 0 - carbon foot print.


Re: Burying Energy by zephod  4/26/2007 5:29 AM

I think you're missing the crucial difference between fossil and bio-fuel. Using fossil fuels is always carbon-positive (ie adding carbon to the cycle); burning biomass is carbon-neutral. But this burying of char, indeed energy inefficient, would have the benefit of making the whole process carbon-negative (ie taking carbon out of the cycle). Plus, the char works apparently as a natural soil enhancer. It almost sounds to good to be true, doesn't it?

a better use than burying by djs  4/26/2007 4:33 AM

Higher temperature pyrolysis of biomass, to a CO + H2 mixture looks better. Adding more hydrogen (from water electrolysis, powered by solar cells) produces liquid fuels (methanol, gasoline by Fischer-Tropsch, etc) - the biomass thus can serve to make a "hydrogen economy" actually work by carrying the hydrogen in a convenient form in addition to furnishing the biological energy content.

Credit due to South American Indians by ericzundel  4/26/2007 6:46 AM

Charles C. Mann's book, "1941" describes how South American Indians used controlled burning to enrich the soil in a similar manner described in this article.  Their slow burning of biomass created carbon rich soil that greatly improved agricultural yields.  Furthermore, the effects are much more long lasting than other soil amendments, such as adding nitrogen fertilizer.  The "black earth" created hundreds of years ago is still supporting crops today.

Biomass and Bioenergy
Volume 31, Issue 6, June 2007, Pages 426-432
Result list |  previous  < 7 of 9 >  next  

doi:10.1016/j.biombioe.2007.01.012    How to Cite or Link Using DOI (Opens New Window)  
Copyright © 2007 Elsevier Ltd All rights reserved.

Black carbon sequestration as an alternative to bioenergy
star, open

Malcolm FowlesCorresponding Author Contact Information, a, E-mail The Corresponding Author
Department of Technology Management, The Open University, Walton Hall, Milton Keynes, MK7 6AA, UK
Received 25 November 2005;  revised 16 January 2007;  accepted 16 January 2007.  Available online 6 March 2007.


Most policy and much research concerning the application of biomass to reduce global warming gas emissions has concentrated either on increasing the Earth's reservoir of biomass or on substituting biomass for fossil fuels, with or without CO2 sequestration. Suggested approaches entail varied risks of impermanence, delay, high costs, and unknowable side-effects. An under-researched alternative approach is to extract from biomass black (elemental) carbon, which can be permanently sequestered as mineral geomass and may be relatively advantageous in terms of those risks. This paper reviews salient features of black carbon sequestration and uses a high-level quantitative model to compare the approach with the alternative use of biomass to displace fossil fuels. Black carbon has been demonstrated to produce significant benefits when sequestered in agricultural soil, apparently without bad side-effects. Black carbon sequestration appears to be more efficient in general than energy generation, in terms of atmospheric carbon saved per unit of biomass; an exception is where biomass can efficiently displace coal-fired generation. Black carbon sequestration can reasonably be expected to be relatively quick and cheap to apply due to its short value chain and known technology. However, the model is sensitive to several input variables, whose values depend heavily on local conditions. Because characteristics of black carbon sequestration are only known from limited geographical contexts, its worldwide potential will not be known without multiple streams of research, replicated in other contexts.

Keywords: Carbon sequestration; Black carbon; Fossil fuel displacement

star, openA prior version of this paper was published in Renew issue 165, Jan–Feb 2007.
Corresponding Author Contact InformationTel.: +44 0 1908 652105; fax: +44 0 1908 653718.

Biomass and Bioenergy
Volume 31, Issue 6, June 2007, Pages 426-432

Are you familiar with a book called Factor Four?

Thanks to Ben for forwarding this link... I took a quick peek and it's interesting

Hi Jean-Francois

Are you familiar with a book called Factor Four?  (See  The whole premise of this book is that there is an efficiency revolution waiting to happen -- that we could reduce energy consumption by half and still live twice as well (or, alternatively, reduce our consumption fourfold with no different to our standard of living).

I could not agree more with this article.

Cheers, Ben

From the web site:

Questions and answers on FACTOR FOUR

1. What is FACTOR FOUR?

The idea behind FACTOR FOUR is that natural resources can be used more efficiently in all domains of daily life, either by generating more products, services and quality of life from the available resources, or by using less resources to maintain the same standard. This idea was first put forward in the book "Factor Four: Doubling Wealth – Halving Resource Use" (Ernst Ulrich v. Weizsäcker, Amory Lovins and L. Hunter Lovins, Earthscan Publications Ltd., London, 1997 [11995]). The book contains 50 examples of novel or improved technologies that increase resource efficiency.

2. Is FACTOR FOUR a Utopian ideal, a goal or a system of indicators?

FACTOR FOUR as a decision-making tool draws attention to resource efficiency. The factor "4" is not meant as a fixed numerical value. A new technology may only be three times as efficient as the one previously in use. Where several technologies and processes are combined, in turn, a much higher efficiency factor may be achieved. But FACTOR FOUR is normative in setting up the target value of halving resource use.

3. What do the concepts "ecological rucksack", material intensity and "ecological footprint" stand for?

These concepts illustrate the different ways humans use natural resources. The ecological footprint refers to land use, to the space that a country's citizens need for erecting houses, growing/raising food on fields and pastures, building traffic links, etc. Reducing this value to the individual yields the size of the ecological footprint. It varies with different individual and local lifestyles, which use up more or less land. The basic issue is Earth's ecological carrying capacity. How many people can live on the available habitable land? How much raw material can be extracted from a piece of land, how much waste can it absorb without suffering serious harm?
The ecological rucksack describes the ecological impact of an individual product or process, while material intensity refers to the weight of all materials moved for a certain purpose (e.g. building materials, excavated earth moved on construction sites, or energy sources). Ecological rucksacks contain the leftovers of a process (e.g. excavated earth). They are mostly "filled" in developing countries, and can be calculated to express the environmental impacts of individual products, economies, or human beings.
The idea refers to material flows, which affect the environment directly (e.g. resource extraction) or indirectly (energy consumption for transport). Both the ecological rucksack and footprint help assess the environmental effects of ways of living, working and producing.

4. Are FACTOR FOUR-products and technologies more expensive than conventional technologies? – Do they make a good bargain?

Be it in entertainment electronics or computer hardware, initial prices are often high. That holds true for all new technologies. But prices tumble once a technology is established on the market and mass production sets in. With FACTOR FOUR technologies, an additional bonus is that potentially high up-front costs are balanced by low running costs as resources like energy, e.g. power or petrol, are saved. So in the end they do make a good bargain.
Some technologies only start paying their way when prices for raw materials and energy reflect the ecological cost of generation and consumption, i.e. when prices tell the ecological truth. Since new technologies consume much less energy, their running costs do not rise dramatically. And finally, many FACTOR FOUR products are pretty cool.

5. How can I support the FACTOR-FOUR idea?

Not just companies but all of us can support FACTOR FOUR. FACTOR FOUR is not an organisation of which you can become a member or for which you can donate. But we can all seek ways and means of saving resources and energy in our own working and private lives. Even slight changes in our habits can have huge effects. More and more often, you will find new or improved technologies, especially for the home. The Wuppertal Institute's web site helps you find the details for the products and producers you are interested in.

6. Is there a testing authority for FACTOR FOUR technologies? Or a reliable certificate?

The Wuppertal Institute's web portal creates a platform to aid the distribution of resource-efficient technologies. Information provided by the inventors and producers describes the technologies presented here according to criteria determined by the Wuppertal Institute. There is no official certificate. External experts, e.g. the German testing authority TÜV, can be consulted where necessary and are invited to contact producers on their own initiative.
The FACTOR FOUR portal also enables users to share their experiences with new technologies. This will create a communication platform linking producers, experts and the interested public in an effort to enhance the quality of FACTOR FOUR solutions.

7. An eco-analysis has just been conducted at our company. Isn't that enough?

The eco-analysis has determined your company's resource use, and you are probably planning or have initiated measures for saving raw materials and energy. FACTOR FOUR technologies help you realise them. Or you develop your own efficient technologies, first for streamlining processes in your company, later as a saleable product. FACTOR FOUR has a place both in production- as well as in product-oriented environmental protection. FACTOR FOUR technologies can have a positive impact both on your costs and your turnover and increase profits. If you want to go a step farther, FACTOR FOUR is the right solution for you.

8. Does FACTOR FOUR only work in "rich" countries? How does the idea benefit the so-called developing countries?

In industrialised countries FACTOR FOUR opportunities can help prevent adverse effects on nature by reducing resource use without impairing the standard of living. In so-called developing countries they can help improve the standard of living without over-exploiting nature. Countries on the brink of economic take-off discover short-cuts to wealth that circumvent adverse effects on the environment.
FACTOR FOUR technologies are no one-way-street for export articles from industrialised to developing countries. Traditional skills from poor countries (e.g. for cooling spaces during the hot season) can contribute to saving raw materials and energy in richer countries (e.g. by reducing the demand for air conditioning in private homes and office buildings).
FACTOR FOUR technologies can equally benefit poor and rich countries and all social strata. The challenge is to find attractive, institutionally and culturally adapted solutions for the different target groups.

9. Does FACTOR FOUR stand for unlimited technological progress and against ideas of the simple life?

No, FACTOR FOUR is open to many lifestyles. The unlimited possibilities of FACTOR FOUR encourage change, and technological progress is part of social change.

Forester - Greening of IT: This report outlines the key drivers of green IT and the range of green imperatives taking hold in the design, manufacture, operation, and disposal of computer systems and devices

Thanks to Andy for forwarding the abstract

The Greening Of IT    
April 19, 2007                
Christopher Mines, Frank E. Gillett                

Environmental responsibility is emerging as an important topic for corporate IT organizations and their technology suppliers. This report outlines the key drivers of green IT and the range of green imperatives taking hold in the design, manufacture, operation, and disposal of computer systems and devices. Both IT management and technology suppliers still have much work to do to overcome organizational and other barriers to making corporate IT a greener place.


Why Conservation Is the World's Best Energy Source

Thanks to Norbert for this great article

Why Conservation Is the World's Best Energy Source
Lloyd Alter, Toronto on 04.25.07
Science & Technology (alternative energy)

conservation%20graph.jpgCheck out the graph. The USA uses a lot of energy, but squeezes a billion dollars of gross national product out of a quarter as much as China. That's good. However it uses almost twice as much energy per billion bucks of GNP as Britain and Japan. How do they do it? People in Europe or Japan live rather well and get to shop at Muji and Conrans, have decent health care and even public transit, so it can't be quality of life. Perhaps it is that they tax gas to death so that cars are smaller and used less often. Perhaps energy for heating is priced so that people tend to keep the thermostat down and avoid air conditioning. Perhaps they live in denser cities. Perhaps land is expensive because they preserve more of it for agriculture instead of development. Perhaps they conserve.

Yet even in thrifty Europe only one third of all the energy produced is put to work. The rest disappears into the air or sea through leaky pipes and poor insulation. In cars, 70 to 80 percent of the energy burned does not end up being used for the purpose of moving the car, it goes out the tailpipe or heats the radiator fluid.

All the VC money is chasing wind and solar, hydrogen and ethanol; perhaps green investors should read about how "One reliable source of energy is not even close to being depleted: Simply saving it may be the safest and cleanest option mankind has. It also happens to make a tidy profit." Read a remarkable series of articles on Conservation as the World's Best Energy Source in ::der Speigel

Stratfor Public Policy Intelligence Report -- Corporate Environmental Initiatives: The Many Shades of 'Green'

Thanks to Lucy for this one :-)

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Corporate Environmental Initiatives: The Many Shades of 'Green'
By Kathleen Morson and Bart Mongoven

In the lead-up to Earth Day on April 22, the news pouring out of corporate America would have it seem that "going green" is all the rage in industry. The Financial Times on April 18 printed a 1,000-word essay by Michael Dell on steps the information technology industry can take to make itself greener. Home Depot announced new environmental initiatives April 17, while ConocoPhillips announced two days earlier that it supports a cap-and-trade system for reducing greenhouse gas emissions, and that it wants the environmental concerns associated with
tar sands in Alberta, Canada, monitored carefully. Meanwhile, suppliers are bracing for another meeting next week with Wal-Mart, whose trend is to squeeze producers to make greener products, but not at the cost of higher prices.

This flurry of news and announcements is in large part the culmination of the yearlong preparation for Earth Day by the corporate "green PR" industry. However, because of the growing volume of claims to greenness over the past few years, consumers are having a hard time differentiating between empty public relations campaigns and corporate decisions that represent meaningful change -- if, in fact, they are paying attention at all. Research shows that most consumers do not care about the environment enough to let it influence their buying decisions. Furthermore, those who do care do not believe that companies are doing much to change their environmental performance.

From Wall Street to consumers, the dominant perception remains that corporate attention to "sustainability" and the "triple bottom line" (economic, social and environmental goals) are meaningless gestures designed to appease small special interest groups. Although this view is largely true right now, there is much more to the story. First, it ignores the fact that many companies' marketing arms are convinced that a dramatic shift is coming within a decade -- that consumers will begin to select products based on how well they think products reflect their values -- and are driving industry proactivity. Second, it assumes that all pro-environment corporate initiatives are petals from the same flower.

The Differences

Corporate attention to social issues, however, falls into three categories: empty public relations, reactions to a real or perceived change in the market and intentional transformation of the market for a company's own gain. Until analysts, executives and consumers begin to differentiate clearly among these drivers, they will remain confused about how the world is changing.

Once the drivers have been distinguished, however, it will be easier to see what the marketing professionals are beginning to notice: In the West, the relationship between consumers and corporations is entering a new era. The result will be a battle over whether the market or a government is the primary regulator of corporate activities. As companies are faced with more and more demands from society, then, they will seek to even the playing field by aiming for a consensus on the "best practices."

Differentiating among Corporate Actions

In order to determine which of the three drivers is behind a company's green initiatives, we must first determine whether the firm is making real changes and, if so, what it has to gain from them:

1. Public Relations

Social initiatives that are merely public relations campaigns are fairly easy to recognize. Importantly, a PR campaign that coincides with a real initiative does not fall in this category. The key question is whether the company is changing its products, its management structure or its core management processes. If it is doing none of these, the initiative can be easily categorized as a public relations effort. In many cases, however, the conclusion that a company is making a public relations push nonetheless is an important event in the lifecycle of an issue.

For instance, BP's five-year "Beyond Petroleum" advertising campaign is largely a public relations exercise. To be fair, however, five years ago it was revolutionary for an oil company to claim human activity was having an effect on the climate and to suggest that oil companies had not acted responsibly. Through the public relations campaign, BP carved out a niche for its brand, provided fertile ground for news stories about the company's investments in renewable energy and opened doors for it within many European governments and international organizations. Without this campaign, it is difficult to imagine the oil industry moving as far as it has on the political issues relating to climate change. At the same time, it has led many to adjust their view of "big oil," and see it as less of a monolithic, malignant presence in the economy. Still, "Beyond Petroleum" is a campaign to tell consumers about a renewable energy program that is not in itself revolutionary and is not transforming energy markets.

Less-strategic green public relations efforts tend to surface around Earth Day. Home Depot, for example, announced April 17 an "Eco Options" labeling program for certain products it sells, and said it will give away 1 million compact fluorescent lightbulbs. Though this initiative is noteworthy and will help create markets for greener building products, at the end of the day, Home Depot still sells nongreen and energy-inefficient items. This announcement therefore is more of a public relations "good neighbor" approach than a significant change in how the company does business.

2. Reacting to Market Transformation

Most "corporate social responsibility" initiatives seen today are reactions by companies to the changing marketplace -- in which certain companies gain and others lose. As consumers begin to expect more from companies, certain products, processes and corporate relationships can become liabilities.

In this category, change often is driven by downstream customers of companies that are involved in high-profile battles with nongovernmental organizations (NGOs). Most jewelry retailers, for instance, have agreed to use diamonds that are certified as "conflict-free" by the mining companies. In doing this, the jewelers created a market for certified diamonds. The result is that most mining companies now proudly broadcast that they are purveyors of conflict-free diamonds. The claim is not empty rhetoric or public relations. Companies and NGOs worked together to set up tracking systems for diamonds across their chain of custody -- thus, these diamonds are not, to the best of anyone's knowledge, used to finance war.

Another example of reactions to market transformation is the phaseout of polyvinyl chloride (PVC) from increasing numbers of consumer products. In the example of PVC, the collective power of market transformation is apparent. The first significant moves in the marketplace away from the plastic occurred when some specialty retailers made the decision to phase out PVC from their packaging because of environmentalist pressure. (These companies did not have a stake in PVC and could find alternatives easily.) Then Wal-Mart began to ask suppliers not to use PVC packaging. Companies in the electronics, toy, medical equipment, building material and automotive interior industries soon followed, deciding to reduce or eliminate their use of PVC. This was classic market transformation. PVC is a legal product never shown by any regulatory authority to be a threat to human health. Ultimately, the companies and industries that reduced their use of PVC did so out of fear that the plastic could come to be seen as a threat to human health. They found that they could turn this potential vulnerability into a possible advantage by moving early and developing alternatives.

3. Actively Transforming the Market

These companies usually are innovators that believe their technological advances give them a leg up on the competition, and that they therefore can profit by driving either voluntary industry-wide changes or actual policy changes.

The classic example of this is Dupont's championing of the Montreal Protocol in the late 1980s, a treaty that outlawed chlorofluorocarbons (CFCs), the then-dominant refrigerant in use globally. Dupont gave itself a lead in the research and development of the most easily substituted alternative to CFCs. That Dupont has a financial stake in solving the problem of the ozone hole does not make its participation in the protocol wrong, even though it had a clear self-interest in supporting the phaseout of CFCs. A ban on CFCs is still good for the environment, but it also was good for Dupont's profits.

More recently, General Electric (GE) has emerged as a powerful agent of market transformation, particularly on energy-related issues. The company's highly promoted "Ecomagination" program, a corporate strategy (with accompanying public relations) to develop a product line of energy-efficient, less polluting products (including engines, lightbulbs and washing machines), started in 2004 by selling $6 billion worth of environmentally friendly products. Three years later, annual sales of those products topped more than $11 billion -- and GE is banking on reaching $20 billion in sales by 2010. GE is now lobbying for energy-efficiency legislation and a carbon cap with other corporate and NGO members of the U.S. Climate Action Partnership. GE has a financial stake in pushing for this legislation, since it has been preparing since 2004 to make the type of machinery and products needed in a carbon-constrained world.

Another example of companies actively changing the market lies in the jewelry industry. Having been caught off guard on the issue of conflict diamonds, the jewelry industry is determined not let that happen again. As such, it has taken a lead in developing a code of conduct for the mining industry, the Initiative for Responsible Mining Assurance, on issues such as how gold-mining companies treat indigenous people who live near mines. In this case, the jewelry companies are transforming the market -- and the mining companies could find themselves having to react. High-end jewelry companies such as Tiffany & Co., a member of this initiative, do not care if the price they pay from wholesalers increases a bit because of limitations in mining practices. They already mark their prices high. What they care about is protecting their brand name and image. They can help shift the market tastes toward "responsibly minded jewelry" and make a profit as one of the companies selling this jewelry.

Why Does this Matter?

Why does figuring out a company's driving motivation behind social initiatives matter? For executives and investors, it provides a basis for understanding what the wave of corporate social initiatives will mean to companies and markets. Companies in the first two categories -- especially in the second -- are reacting to the changing world, often quickly. Some are trying to catch up to competitors, some are trying to differentiate themselves and others want to minimize the risks of regulatory change or tort liability. Those in the third category are dictating where their industry will go in the future.

The move toward public policies based on market transformation rather than regulation has a number of advantages for business. It is, by definition, the market at work, which means change is likely to be more efficient and timely than structures imposed by governments would be.

The problem is that companies in the third category -- sometimes the most innovative, sometimes the cleverest and sometimes just the lucky ones that end up in the right place at the right time -- will never go away. Redesigning a laptop computer might be expensive, which is why market advantage awaits the company that can redesign a laptop on its terms and schedule, and then impose its design standards on its competitors.

The key variable here is the assumption that the consumer cares, or will soon care, that companies are making changes. Although studies repeatedly show that consumers care very little about the social values of the companies from which they buy, studies also show this attitude is changing. In an effort to avoid lagging behind a potential consumer trend, then, some major corporations are acting quickly to make tangible changes to their products and processes. Some have gone a step further, and have seized the initiative from consumers completely and led the charge on market transformation.

At the same time, however, corporations crave predictability. Redesigning a laptop computer, a toy or a plane engine is time-consuming and expensive. With this in mind, the companies that find themselves in the second category -- those forced to react to market transformation -- are yearning for some definitions on what it means to be socially responsible, and are beginning to demand a rational order to the chaos they see around them. Although its focus is far broader than environmental issues, the
International Organization for Standardization (ISO) is becoming the forum for this debate. ISO 26000, a voluntary set of guidelines on corporate social responsibility, is set to be released in 2008. Though this will not address all issues, it will provide a starting point for discussions.

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Article - How green can IT be?

Thanks to Andy for this one

Earth Day Special: How green can IT be?
We track the eco-progress of some of the technology industry's biggest companies -- and explore why it's so hard to find anyone to independently evaluate their progress
4/20/2007 4:50:00 PM
by Briony Smith

Data centre energy consumption consortium The Green Grid has been fast acquiring new members like Microsoft, Dell, APC, VMWare, Intel, and Novell that all hope to get green while pulling in the green. Here we examine what some of the new consortium's members are up to, eco-wise.


Rebecca Brown, manager of environmental programs at Dell Canada, said the company has adopted the European Union's Restriction of Hazardous Substances (RoHS) Directive and strives for energy efficiency in its products.
With a goal of 100 per cent landfill avoidance, Dell has had a recycling program in place since 2005 that offers recycling to its consumer customers at no cost, while corporate customers pay a small, cost-covering fee. Dell will pick up, ship, and process its used products; it works with the National Cristina Foundation to donate usable machines to local charities, and has recently debuted an ink cartridge recycling program. Dell is also a member of the EPA's Climate Leaders Program.


Ross Chevalier, chief technology officer with Novell Canada, said the firm was keen to get in on The Green Grid, as Novell wants to reduce the ecological footprint of data centres everywhere. "Our offering builds in nicely with (eco-friendly) blade computing, and the use of Linux and virtualization reduces the ecological footprint," he said. Novell's software can run efficiently on less powerful hardware; users can also pick and choose the features that they want from their operating system, rather than having to upload a feature-heavy one that takes up a lot of power, according to Chevalier. He said that virtualization and server consolidation cuts down on cooling and power costs, as well as reducing the physical size of the data centre.


EMC is another member of the EPA's Climate Leaders Program, according to Iain Anderson, the client solutions director for EMC Canada. He said that the company has pledged to reduce its greenhouse gas emissions by eight per cent per square foot by 2012. To get there, the company is using automated lighting and computer equipment, and energy-efficient cooling and power systems for their data centres. Intra-campus shuttles are provided at the company's headquarters. EMC is also RoHS-compliant.


"It's about (individual companies) being selfish," said AMD senior strategist Larry Vertal about participation in The Green Grid. "The clear trend toward energy conservation in data centres is increasing at an incredible rate, and if we don't get together to create some standards and best practices, it will -- (we note,) selfishly -- affect all our businesses." However, Vertal said, AMD considers environmental stewardship a part of overall social responsibility. It targets the issue through "the products we produce, leadership in initiatives, and walking the talk," he said. AMD has been pioneering energy-efficient chips since 2001 with the debut of its Direct Connect architecture. The company reduced its carbon dioxide emissions by 40 per cent between 2002 and 2007, and energy usage by 30 per cent in the same timeframe. AMD phased out its old fabrication plant in favour of upgrading an old one for energy efficiency and building a new one that is sensitive to emissions and reuses waste heat, and will help them get to its goal of reducing its PFC emissions by 50 per cent by 2010. AMD is also constructing a new corporate building that will run on 100 per cent renewable energy and will boast North America's largest water reclamation facility. It has also surpassed its EPA Climate Leader Program goal of a 40 per cent reduction in greenhouse gases. "We believe that business can benefit from environmental actions…A business can do well as a business while doing good for the environment," said Vertal.


Frances Edmonds, director of environmental programs with HP Canada, said that HP has pledged to reduce its emissions by 20 per cent below 2005 levels by 2010. HP has redesigned the packaging of its ink and laser cartridges, eliminating PVC, making it smaller and lighter, and increasing the recycled material content. "We estimate that, in North America alone, we have eliminated 37-million pounds of carbon dioxide in 2007," said Edmonds. It also has an ink and toner cartridge recycling program in place. Edmonds said that HP is on track to achieve its goal this year of diverting a billion pounds of hardware and supplies from the landfill, courtesy of its rigourous recycling program. It is RoHS-compliant, and attempts to use as many non-hazardous and energy-efficient materials as possible.


Another Climate Leader with the EPA, IBM prides itself on its long-running commitment to greenness. Its first energy conservation policies were formalized in 1974, according to IBM's director of corporate environmental affairs, Edan Dionne. She said that the company managed to reduce its carbon dioxide emissions by 40 per cent between 1999 and 2005. "Many people make 'commitments,'" she said…although Dionne pointed out that IBM is committed to reducing its emissions by another 12 per cent by 2012. Energy conservation practices, such as energy efficient lightbulbs, semiconductors, and heating, cooling, and lighting systems, and purchasing renewable energy  are "really good for business," said Dionne. "They offer a tremendous savings." Revamped, greener product design includes more recycled components, earth-friendly powder coating (instead of liquid paint), and improved upgradeability, while the company's recycling program-which was started in 1989-resulted in less than one per cent of recycled materials going to the landfill last year. (IBM was the first to reach the goal of diverting one billion pounds of product from the landfill, which it did a few years ago.)

Reaching outside parties who could comment on these companies' green initiatives was difficult.
The Ottawa-based
Electronics Product Stewardship Canada declined to comment, as they felt it was a conflict of interest (several of the companies mentioned are its clients). Greenpeace Canada, based in Toronto, could not think of anyone who could comment. The Toronto Environmental Association acknowledged that companies need to do more for extended product responsibility, but it did not wish to comment on the companies' respective green initiatives. Co-executive director Franz Hartmann said that he wouldn't want to discuss corporate claims without third-party validation.

It can be difficult to rank companies in terms of their green factor, according to. John Laumer, a senior writer with the popular, influential Brooklyn-based Web site He said in an e-mail, "Corporate reputations are typically based on what industry would call 'trailing indicators,' i.e. where they were and not at all about what they are going. This results in a bumpy game of PR leapfrog. One year, Dell does a little better than Apple on green criteria and watches the bottom line to see if it made a difference. If not, they drop back into a 'me too' profile.  Then, Apple tries an innovation, and the rest of the pack positions around it. It's like watching a tight speed skating race where breakaways are rare."

When it comes to reaping the benefits of eco-initiatives, HP and Novell seem to be the companies in this group best poised to rake in the green-generated dollars, according to Drue Reeves, vice-president and research director for data centre strategies for the Midvale, Utah-based Burton Group. "HP has a slight edge because it has the tightest integration with management (software HP Power Manager)…(Novell will do well because they have) a virtualized operating system or platform -- people looking at green data centres will look at consolidation," he said.

Laumer is leery of tech corporations' eagerness to promote their greenness, saying that it is difficult to parse out which are the truly committed environmental crusaders. "Are they trying to integrate green design and marketing into the corporate DNA?  Or have they just built a PR 'ghetto' that pumps out me-too press releases and keeps up with the pack of competitors?" he asks. "Do they understand life cycle valuations or are they focused only on operating impacts?  Have they invested real capital into breakthroughs or are they just trying to take credit for what regulations like RoHS are mandating for all producers?... Suddenly everyone is fawning over energy efficiency as if it were a new problem."


Andy Makowski
Executive Client IT Architect, Communications Sector
Technical Sales Architect Organization
IBM Canada Ltd
3600 Steeles Avenue East
Markham, Ontario, CANADA, L3R 9Z7