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


[Corporate Social Responsibility] - < CEO Study Media Coverage -- Strong CSR Tie-ins >

Thanks to Jay

CSR Community Members:

Below is a sampling of the global media coverage from the announcement of IBM's 2008 CEO Study. In all, more than 1,100 CEOs from around the world were interviewed, making this the largest survey of its kind ever done.

The growing importance of CSR to business was one of the five major findings of the study, and that is reflected in much of the coverage.

Managing Change (, 5/7/08)

Managing Change

Matthew Kirdahy, 05.07.08, 12:48 PM ET

Managing change is an inevitable task for the modern chief executive, yet almost one in five feel a lack of control over the process, a new study from IBM suggests.

According to The Enterprise of the Future, a biennial global study conducted by IBM (nyse: IBM - news - people ), the number of CEOs successfully managing change increased to 61%, from 57% in 2006. At the other end of the spectrum, those corporate leaders reporting "limited or no success" in managing change increased to 19%, from 12%.

Today's CEOs are running their companies in a dynamic business environment, with industry-wide or global events not always within their control.

Overall, CEOs rate their ability to manage change 22% lower than their expected need for it, a "change gap" that has tripled since 2006. In other words, eight in 10 CEOs are expecting "change," but only six in 10 say they have been able to adapt successfully.

The idea of change is very broadly defined in this, the third edition of IBM's study, conducted in conjunction with the Economist Intelligence Unit. The first was published in 2004. This is the largest CEO sample size to date. Change is really defined by the 1,130 CEOs in this focus group, rather than by IBM.

The report includes business and public sector leaders from 40 countries across a variety of industries and geographic locations. Of the companies included, 19% employ more than 50,000 people, while 22% have less than 1,000 employees.

IBM asked these CEOs, in person, what they think has driven this change by listing nine external forces affecting every industry--market, socioeconomic, macroeconomic and technological factors, people skills, globalization, regulatory concerns as well as environmental and geopolitical issues. Based on CEO responses, the top three were market factors, people skills and technological factors.

More specifically, CEOs said that if they are to successfully manage change, they must focus on their customer base.

How do they intend to do this? CEOs said they will invest company resources into global integration, partner collaboration and corporate social responsibility (CSR). Woven into that trio is the hunt for talent, which is scarce these days.

Jim Guyette, president and CEO of Rolls-Royce North America (other-otc: RYCEY.PK - news - people ), had comments published in the study.

"A few years ago, we were a national company," Guyette said. "Now we're a global company. Our integrated supply chain must adapt to meet demand in 50 countries. We're going to have to bring people in from the outside."

In IBM's research, Nintendo (other-otc: NTDOY.PK - news - people ) is described as an exemplary organization since it partnered or collaborated successfully by directly connecting with customers to meet the demands of the changing marketplace. The Japanese videogame company's wildly popular home gaming console, the Wii, is a product of that.

On the CSR front, IBM features Marks & Spencer (other-otc: MASPY.PK - news - people ), a British retailer that has dedicated approximately $390 million over five years to becoming a more socially responsive operation.

A vast majority of companies worldwide are acting as M&S has, but some CEOs are struggling to put CSR into practice, according to the research. The concern about environment issues varies by continent.

In the study, IBM learned that CEOs said they intended to invest 25% more of their company's resources in specifically CSR-related activities over the next three years.

"Our company is investing extensively in corporate social responsibility," said Yves Carcelle, chairman and CEO of Louis Vuitton. "We need to be a reference in this domain. As the leader in the luxury industry, we have to stay ahead."

Largest CEO Study of its Kind (CNBC Worldwide Exchange, 5/6/08)
Bridget Van Kralingen discusses the highlights of the largest CEO Study of its kind - IBM's Global 2008 CEO Study.


CEO Study -- Marc Chapman Interview (Fox Business News, 5/6/08)
Marc Chapman appears on Fox Business News during the Noon hour on May 6.

Fox Business News:

IBM CEO survey uncovers info-hungry 'green' customers (C/Net, 5/6/08)
May 6, 2008 9:39 AM PDT

Posted by Martin LaMonicaPost a comment

In a sign of "green" going mainstream, an IBM survey of CEOs finds that socially oriented customers are wielding more power, aided by social networking on the Web.

The survey, published Tuesday, drew on face-to-face interviews with 1,130 CEOs around the world. It found that CEOs feel less prepared as they would like to deal with the pace of change.

CEOs identified two types of customers that are the primary sources of that change.

The first is the information omnivore, the type of consumer who is comfortable making his or her opinion known through Web-based tools like social networks.
CEOs said that these proactive consumers, or "prosumers," can be a positive influence if companies can design products based on consumers' expressed preferences.

In addition to being demanding about products, customers are carefully watching corporations' behavior, the study found.

Expectations for corporate social responsibility are rising. Concern over environmental issues has doubled over the past four years, with most of that reflected in Europe and in the Asia-Pacific region.
CEOs said they will increase investments 25 percent over the next three years to better understand socially minded customers, which chief executives identified as the fastest-growing trend.

IBM itself primarily serves large enterprises, rather than selling directly to consumers. It does an annual survey of CEOs to find direction on their business directions and how they intend to sell to their customers.

In the area of clean tech, IBM has a number of initiatives including data center energy efficiency and reducing waste from silicon solar cells. IBM also has a decades-long corporate social responsibility practice.

Fast-changing world troubles top executives (Daily Telegraph -- UK, 5/8/08)
Bosses fear they can't adapt quickly enough to deal with today's 'white-water world'
By Roland Gribben
576 words
8 May 2008
The Daily Telegraph
(c) 2008 Telegraph Group Limited, London

CHIEF executives are struggling to cope with a fast-changing business environment and the arrival of the "information omnivore'' along with the "socially minded'' customer, according to an IBM study.

The bosses say they are enthusiastic about tackling the wider range of challenges confronting them but admit that a bigger "change gap'' has emerged because they are failing to adapt fast enough.

Four years ago IBM found chief executives were able to cope with priorities of the day in the shape of customer trends, market factors and the competition. Now they find that a wider and more demanding list headed by people skills, market factors and technology is proving more taxing for the business mind.

People are just as important as market factors in the executive mind. Environmental issues are now said to demand twice as much of their time.

Change is hitting them from all directions. One Canadian chief executive described the business environment as a "white-water world'', while the head of a US group commented: "We are successful but slow.''

The findings, based on interviews with more than 1,100 chief executives from 40 countries and 32 sectors, surprised the IBM study team. Peter Korsten, head of the project, said there was little difference among executives about the opportunities and size of the challenge.

Two years ago the IBM research showed that two thirds of company heads were anticipating considerable change over a three-year period, with 57pc anticipating they would be able to cope. This time, 83pc are forecasting significant change but just 61pc believe they are up to the job of managing it.

The catalogue of challenges listed by the chief executives in the latest survey also includes a desperate search for the industrial, technical and management skills needed to support geographic expansion and fill the gaps left by the "baby-boomer'' generation heading for retirement. They rated the lack of talent as the biggest barrier to global integration, ahead of regulatory and budgetary hurdles.

Technological advances reshaping value chains, influencing products and services and changes in the interaction between companies and customers also figured prominently in the list.

Increased investment holds the key to handling the change being demanded, according to most interviewees. It is particularly needed to accommodate the "information omnivores'' who demand a wide variety information and broadcast their views worldwide via the internet.

They have become more demanding, switching a passive role for deeper involvement with the companies selected for their business. The majority of chief executives do not regard them as a threat but as an opportunity to meet heightened expectations and cash in on the new opportunities.

The "socially minded'' customer has chief executives acknowledging that corporate social responsibility behaviour attracts more critical interest. An increasing number of customers are making social judgments before taking buying decisions, says the study. European and Asia-Pacific business heads are leading the way in focusing on environmental issues.

The shifts in expectations from more demanding customers and greater purchasing power in emerging markets are influencing changes in the business models of global companies, says IBM. Three out of four chief executives plan to take their companies into new market , while 85pc are banking on the partnership route to meet the challenge and deliver growth.

Dutch Top Managers are very content with themselves (De Telegraaf -- Netherlands, 5/6/08)
Study: Hunger for change

Amsterdam – Top managers in the Dutch business world are remarkably more content with the way they handle change in their organisations than their peers elsewhere.

Almost three quarter of the CEO´s says to be succesful in addressing corporate changes needed in relation to changes in the market, resourcing and technological developments.

This information comes from the Global CEO Study of IBM, the largest study ever done amongst CEO´s in 40 countries. This bi-annual study was done around the turn of the year by the IBM Institute for Business Value, a renowned think tank, amongst 1130 CEO´s. In NL around 70 CEO´s were interviewed.

The study shows that the pressure on CEO´s to push changes in their organisation has increased largely. By now, 83% of the CEO´s think big steps are needed within 3 to 5 years to keep their organisations leading, compared to 65% in 2006.

The uncertainty whether their measures will have the effect expected, is also increased.

Nevertheless 6 out of 10 CEO´s around the world say they are handling change in their business succesfully. Remarkable is that in our country even 73% of the interviewed CEO´s is content with the way things go. It is unclear why the Dutch CEO´s are so optimistic.

According to topmanager Peter Korsten of the IBM Institute for Business Value, the men and women in the boardroom have 3 main reasons to work on their organisation.

First of all marketfactors are mentioned as a big driver. "However the influence of this phenomenon has decreased significantly in the last 4 years". You see emerging markets like India and China offering big enough markets. Next to that there is a lot of concern about the ability to keep qualified employees with the company and whether these employees are utilised to the fullest from a global perspective. Also the way technology is used (in the broadest way) is vital for corporates, says Korsten.

He refers to more secure communication and solid networks.

The focus in the business world has shifted over the last years from plain surviving to swiftly change  in a higher gear. That is also the experience of KPN-CEO Ad Scheepbouwer. "We have seen more changes in the last 10 years, than in the previous 90". Next to that customers have a growing need for an individual approach. According to the IBM Institute for Business value, self-conscious consumers and the possibilities of emerging markets will determine the business models in the next coming years.

The majority of the CEO´s intend to partner to capitalize on global integration opportunities.

Companies invest in new customers (O Globo -- Brazil, 5/6/08)

(Summary in English)
Executives increase bet in conquest of consumers, research says

SÃO PAULO.  Even faced with a possible recession in the United States and its effects over the global economy, two thirds of the directors-executive (CEOs) of medium and big companies with different ranks of global action wager in an increase of the purchase power of the consumers in the world and, by that, are elevating by 27.5% the total investments in resources of its companies to conquer this new clients.

That slice is 19% bigger than there are two years, reveals to third edition of the "Global Study with CEOs" carried out by the IBM, that will be presented today by the world president of the company, Sam Palmisano.  

CEOs see change on the horizon ( -- Ireland, 5/6/08)

There has been a dramatic increase in the number of global business leaders who see important change ahead, according to an IBM study of CEOs around the globe.
The Enterprise of the Future study shows 83 percent of CEOs expect substantial change in the future. This represents an increase of 28 percent since 2006.

"The enterprise of the future accepts change as a permanent state in an organisation. Those CEOs who demonstrate the capacity to manage major change know they can beat the competition by reaching new classes of customers," said Ginni Rometty, senior vice president of IBM Global Business Services.

"And it's clear that out-performers are distancing their enterprises from the competition based on their organisational capacity to take advantage of change," she added.

The IBM Global CEO Study is based on interviews with 1,130 CEOs, business and public sector leaders from 40 countries participated in structured interviews during 2007 and 2008. The report reveals the number of CEOs successfully managing change increased from 57 percent to 61 percent since 2006. The amount of CEOs reporting limited or no success in managing change rose from 12 percent to 19 percent.

"Both numbers have gone up. It is not as if there is a big change in terms of people not being able to handle change. That is the good news," said Susanne Dirks, leader at the Global Centre for Economic Development in the IBM Institute for Business Value, speaking with ENN.

The CEOs pointed to their customer base as the source of the most important change and said they would have to make substantial investment increases to reach the new customer set. In particular the IBM study identified two emerging consumer sets; the information omnivore and the socially-minded customer.

"The information omnivore is a challenge in terms of that customer being very demanding and doing a lot of research before they make any decisions. They want to be much more actively involved in the producing cycle of products," Dirks told ENN.

Social-minded consumers tend to weigh up the societal and ethical issues surrounding a company and its product before making a decision to purchase. The rise of this consumer set is evidenced by the growth in popularity of Fair Trade products.

"The socially minded customer is a challenge because they will take social responsibility and things like that into consideration before they purchase the product," said Dirks."

Overall, CEOs are planning a 22 percent increase in investment over the next three years to serve these more sophisticated and demanding customers and 25 percent increase to reach social-minded customers.

"The company that is ready for those changes can tailor products that fit the socially minded or the omnivore type of customer. Change is a challenge but it is also a big opportunity," said Dirks.

"Nintendo, for example, was losing market share and managed to improve the market share by addressing their customers and working with them on the solution and having them advise their new customers," she highlighted.

Additionally, 75 percent of surveyed CEOs said they plan to actively enter new markets while 85 percent intend to form partnerships in order to capitalise on global integration opportunities.

06-05-2008  ENN:  by Bryan Collins

Companies under 'green' pressure ( -- South Africa, 5/6/08)

Tue, 06 May 2008 14:10

Companies are under growing pressure worldwide to cater for consumers demanding environmentally friendly services, says a research report released by IBM on Tuesday.

"Customers are increasingly demanding socially-minded products, services and even supply chains... the more socially-aware customer evaluates an enterprise's corporate social responsibility profile before making purchasing decisions," says the 2008 global CEO study, entitled "The Enterprise of the Future".

The findings of the report are based on interviews IBM conducted late last year and earlier this year, with more than 1000 CEOs and business leaders in 40 countries and 32 industries.

Most business people identified the changing demands of their customers as a pressing issue.

"Two new and more demanding classes of customers emerged: the 'information omnivore' and the 'socially-minded customer'," states the report.

So-called socially-minded customer

The so-called socially-minded customer is not only concerned about 'green' issues but also demands social responsibility practices across all services.

"While increasing CEO concern about environmental issues has doubled over the past four years globally, this concern is not evenly distributed world wide," the study says.

"Asia Pacific and European CEOs lead the world in focusing on environmental issues, followed by the Americas."

It quotes Vinod Mittal, managing director of Mumbai-based steel manufacturer ISPAT Industries, who believes it pays to be "green".

"I see corporate responsibility going through three phases. People start to consider issues like the environment because they are compelled to do so.

Makes business sense

"Then they realise that it actually makes business sense. Eventually they move beyond compulsion and selfish motives to become passionate because it is the right thing to do," says Mittal.

The report also talks about "information omnivores" - consumers who are becoming more actively involved in information sharing and often create entertainment and advertisement content for their peers.

"In the future, we will be talking more and more about the 'prosumer' - a consumer/producer who is even more extensively integrated into the value chain. As a consequence, production processes will be customised more precisely and individually," says Hartmut Jenner, CEO of Alfred Karcher GmbH.

"These customers are swapping passive roles for much deeper involvement... Although these customers are more demanding, the majority of CEOs do not see them as a threat, but as an opportunity," the report concludes.

The top manager in pursuit of customers with difficulties (La Repubblica -- Italy, 5/7/08)                                                                                  
This article is dedicated to IBM Global CEO Study 2008, based on face-to-face interviews with 1,130 CEOs from 40 countries across 32 industries and designed to capture insights on how the challenges CEOs face today will impact the future of business. According to the study most CEOs are surprisingly optimistic about the opportunities that come with change.

However, despite the optimism more CEOs are failing to manage major change, putting their business strategies and growth at risk and CEOs rate their ability to manage change 22 percent lower than their expected need for it. Moreover, 83 percent of surveyed CEOs expect substantial change in the future – an increase of 28 percent in just two years – and they point specifically to their own customer base as the source of the most important changes they will have to address.

Indeed, two classes of customers emerged: the 'information omnivore', and the 'socially-minded'. For this reason one the trends identified in the study concerns the CEOs will to increase their investment to reach these customer sets.

IBM judges the future enterprise as "acquisitive of change" (Le Monde Informatique -- France, 5/6/08)
(English Summary)

In accordance with Daniel Chaffraix, IBM France Manager, the futur company will be "acquisitive of change, innovative and avant-gardist in its clients approaching, inherently revolutionary, incorporated to the global scale, authentic and responsible". These are the main conclusions of a survey of 1130 business leaders led by IBM. 95% of them have been questionned in face to face by IBM management.

IBM study: CEOs accept change as a permanent state (CIO Magazine -- Australia, 5/8/08)
-- Wake-up call for A/NZ executives --

Author: Sandra Rossi 08/05/2008 09:10:11;1798474846;pp;3

Seeking insight into the 'enterprise of the future' IBM yesterday released the findings of what it claims is the biggest global study of CEOs ever conducted.

Based on face-to-face interviews with 1,130 CEOs from 40 countries across 32 industries, including 69 executives in Australia and New Zealand, the study identified the main challenges likely to shape the future of business.

It revealed widespread concern by CEOs about their organisation's ability to absorb and manage change as well as a widening gap between winners and losers in the global economy.

Surprisingly, a high number of CEOs saw change as an opportunity to build new competitive advantage.

Overall, 83 per cent of respondents expect substantial change in the future, an increase of 28 per cent in just two years.

But CEOs believe their ability to effectively manage change is increasing at a far slower pace.

CEOs point specifically to their own customer base as the source of the most important changes they will have to address, as two new and more demanding classes of customers emerge.

They are the 'information omnivore', and the 'socially-minded' customer. Of all the trends identified in the study, CEOs plan their biggest increases in spending to be directed at responding to these two customer sets.

The "information omnivore" craves all types of information and often broadcasts its views and expectations worldwide via the Internet.

These customers are described in the study as producers creating entertainment and advertising content for their peers, while demanding flexibility and responsiveness from companies with whom they choose to do business.

Although these customers are more demanding, the majority of CEOs do not see them as a threat, but as an opportunity for differentiation based on meeting the heightened expectations of this group, and capitalising on new market opportunities that will emerge, the study said.

Overall CEOs are planning a 22 per cent increase in investments in the next three years to serve these more sophisticated and demanding customers.

The investment is even more pronounced among financial out-performers.

CEOs of firms with higher net profit margin growth indicate that investments targeted at information omnivores will increase 36 per cent over the next three years.

The majority of these new investments will be dedicated to new operational capabilities that improve collaboration and product innovation, and are more oriented to transparency and tailored to specific market segments.

The study shows the impact of the information omnivore is driving investment in every major geography.

Respondents also agreed there is a significant rise in customer expectations around corporate social responsibility ('CSR') which will play an important role in differentiating an enterprise in the future.
The study findings show customers are coalescing around organisations' CSR profile - including, but not limited to "green" initiatives -- and are increasingly demanding socially-minded products, services, and even supply chains.

CEOs indicated that while customers have always cared about societal issues, those concerns are now more frequently turning into action as the more socially aware customer evaluates an enterprise's CSR profile before making purchasing decisions.

To better understand and reach the new socially-minded customer, CEOs plan to increase their investments by 25 per cent over the next three years, the largest percentage increase of any trend identified in the study.

The study shows that while increasing CEO concern about environmental issues has doubled over the past four years globally, this concern is not evenly distributed worldwide.

Asia Pacific and European CEOs lead the world in focusing on environmental issues, followed by the Americas.

CEOs also revealed that CSR reputations are also an important tool to attract and retain employees.

Overall, CEOs recognise CSR is critical to maintaining current market share.

IBM Global Business Services senior vice president, Ginni Rometty, said the enterprise of the future accepts change as a permanent state within their organisations.

"Those CEOs who demonstrate the capacity to manage major change know they can beat the competition by reaching new classes of customers, and making bold moves to shift business design around principles of global integration," Rometty said.

"And it's clear that out-performers are distancing their enterprises from the competition based on their organisational capacity to take advantage of change."

According to IBM's A/NZ strategy and change practice leader, Matt English, the global findings are broadly consistent with trends in the local market.

English said the change gap is as strong locally as it is globally, and is a wake-up call to businesses in A/NZ.

He said this gap highlights an urgent need for CEOs to sharpen capabilities throughout their organisations, and the pressure is on to manage change effectively.

However, local CEOs revealed significant differences from the global findings in relation to the external forces that will shape their business and investment opportunities.

"The CEOs interviewed from Australia and New Zealand highlighted people skills as the greatest external force impacting their business in the next three years," English said.

"We also found that local CEOs view corporate social responsibility as a key business opportunity, and plan on dramatically increasing their focus and investment in this area."

Global integration was another significant factor in the study's findings revealing fundamental shifts in expectations from these more demanding customers.

The increased purchasing power of these customers in emerging markets is driving major changes in the business models of organisations worldwide.

CEOs plan bold moves around business designs that facilitate faster and more extensive collaboration on a worldwide scale, and rapid reconfiguration when new opportunities appear.

An estimated 86 per cent of respondents plan substantial changes in the capabilities that distinguish leading organisations - their knowledge and asset mix.

CEOs expect to carefully calibrate business model designs based on principles of global integration, which includes global searches for sources of expertise, resources and assets that can help it differentiate.

Moreover, to take advantage of global integration opportunities, 75 per cent intend to actively enter new markets and 85 per cent plan to partner to capitalise on global integration opportunities.

IBM's 'enterprise of the future' study was conducted in conjunction with the Economist Intelligence Unit with interviews conducted in late 2007 and early 2008.

Participants represent private and public sector organisations with 19 per cent of companies employing more than 50,000 employees while 22 per cent have less than 1,000 employees.


Start-Ups Race to Produce 'Green' Cars

Thanks to Brian for this great alternative cars article

Start-Ups Race to Produce 'Green' Cars
May 6, 2008; Page B1

Spurred by the belief that the market for fuel-efficient vehicles is about to take off, a slew of tiny car companies is springing up in Europe and the U.S. They are racing to produce the next "green" car, betting that soaring demand will allow them to survive alongside the giants of Detroit, Stuttgart and Tokyo.

Most of the upstarts were founded in the last 12 months and have financial backing from venture-capital firms. They are headed by former top engineers and designers from the likes of Germany's Volkswagen AG and storied U.K. racecar builder McLaren. Responding to soaring gasoline prices and a tightening noose of emissions regulations in Europe and the U.S., the companies are working on a new generation of hybrid and electric vehicles.

The Fisker Karma is a plug-in hybrid car.

Many of the green start-ups are hoping to ride the coattails of California-based Tesla Motors Inc. Founded in 2003, Tesla unveiled an electrically powered sports car in 2006. The Tesla roadster went into production last month and has presold the first year's output.

One problem: Competition from the industry giants is real. Daimler AG, Toyota Motor Corp., General Motors Corp., Renault SA and Mitsubishi Corp. are all developing new-generation electric vehicles.

Some of the start-ups plan to build and sell cars, going head-to-head with the likes of Toyota, maker of the successful Prius hybrid. Others hope to outsource manufacturing to bigger companies, or even to sell the technology altogether, taking advantage of a growing trend among large auto makers to buy key technologies from outside firms.

[Car Cast]1
Car Cast:2 David Patton and Mathew Passy discuss the vehicles of the future, a slump in used luxury car prices and what it means for consumers and auto makers.

"In the past 20 years a lot of the car companies felt it was an advantage to develop and own things exclusively. That's changing," says Henrik Fisker, a former design director at Ford Motor Co. and Aston Martin. Mr. Fisker now heads California-based Fisker Automotive Inc., which he started in 2007 to develop a plug-in hybrid sports car, the Karma. He hopes to put his 125-miles-per-hour car on the market for $80,000 to $100,000 late next year.

Gordon Murray, former technical director at McLaren, left with a team of senior McLaren engineers last year. The 61-year-old Briton, who was born in South Africa, formed Gordon Murray Design Ltd. and moved to a red-brick building on the outskirts of London. He plans to use his team's expertise in lightweight plastic composite materials, developed while building Formula One race cars and the Mercedes-Benz McLaren SLR sports car, to make a small city car. He has backing from Silicon Valley venture-capital firm MDV-Mohr Davidow Ventures.

The car will be lightweight and capable of incorporating a variety of power trains, Mr. Murray says, including hybrid, electric and gasoline. He is working on 14 variations of the vehicle, and his team is developing production-ready prototypes.

"Being independent gives the design team an opportunity to make a radical break with the past," he said.

Mr. Murray has no interest in assembling his car or building a dealership network to sell it. He hopes to sell the design to a big car company or other corporation -- "like Sony for example" -- that is eager to add a green vehicle to its portfolio.

Other small start-ups are joining the party. Last year Murat Guenak, a former head of design for the Volkswagen brand, joined Switzerland-based start-up firm Mindset AG. Mindset got financial backing from Swiss investment firm Spirt Avert AG to develop a new electric hybrid car. Last December, France's industrial-and-media conglomerate Bolloré Group teamed with Italian design house Pininfarina Group to start building an electric car with a new battery technology.

The upstarts are entering a notoriously tough market. But analysts say shrinking research-and-development budgets at the big auto makers -- and their interest in outside help to develop key technology -- may have opened up the road for smaller players.

Large car companies now develop and make about only 20% of a new car in-house, according to Ferdinand Dudenhöffer, Professor of Automotive Research at Germany's Gelsenkirchen University of Applied Sciences. Last month, for example, Daimler unveiled battery technology for the Mercedes-Benz S-Class limousine that it developed jointly with tires-and-parts supplier Continental AG. Daimler cut its spending on research and development to €4.148 billion ($6.39 billion) last year from €7.241 billion in 2000.

Another bad omen is that previous efforts to launch green cars have been plagued by problems. Honda Motor Co.'s Insight car, launched in 1999, and VW's Golf Ecomatic, launched in the early 1990s, both fuel-efficient vehicles ahead of their time, didn't win mass-market acceptance. The smart car, launched by Daimler in the U.S. this year, took at least 16 years and billions of euros in losses to make it from the initial design to its most recent version.

Norwegian firm Think Global AS first developed an electric vehicle in 1994, but it hasn't been able to produce the cars in large numbers. Initially, that was due to a lack of demand from customers and more recently to problems developing sufficient production capacity and batteries for its most recent model, the TH!NK city. Think has also spent years wading through the process of getting the vehicle certified with national safety authorities.

Write to Edward Taylor at edward.taylor@wsj.com4

Focusing on Solar's Cost

Thanks to Norbert


Focus, focus: Sunrgi's concentrated photovoltaic module consists of lenses that focus sunlight on a high-efficiency solar cell, and a special heat sink designed to dissipate the extreme heat produced by such an intense concentration of the sun's rays.
Credit: Sunrgi

Technology Review - Published by MIT
Wednesday, May 07, 2008
Focusing on Solar's Cost
Sunrgi claims that its concentrated photovoltaic system outshines the competition.
By Tyler Hamilton

A Hollywood-based solar startup says that it will soon be able to produce electricity from the sun at costs that are competitive with fossil-fuel generation. The key is the company's dramatic improvement in the performance of concentrated photovoltaic technology.

Sunrgi, which emerged out of stealth mode last week, has created a concentrated photovoltaic system that uses a lens to focus sunlight up to 2,000 times onto tiny solar cells that can convert 37.5 percent of the sun's energy into electricity. Stronger concentrations of sunlight allow engineers to use much smaller solar cells, making it more economical to use higher-efficiency--but higher-cost--cells. Sunrgi, for example, will use cells based on gallium arsenside and germanium substrates.

Paul Sidlo, one of seven founding partners of Sunrgi, says that the system uses four times less photovoltaic material than other approaches, which typically aim for 500 times sun concentration. This includes systems being developed by California rivals SolFocus and Soliant Energy.

"We've miniaturized everything," Sidlo says. "What this leads to is reduced cost, and the big breakthrough here is all about lower cost." The company has also designed its system to be produced on slightly modified computer assembly lines, enabling further savings through high-volume production. The higher efficiency also means that a solar park built with Sunrgi's modules could use one-sixteenth of the space needed with conventional thin-film solar cells, adds Sidlo. The result is lower real-estate costs for developers.

Sunrgi estimates that its system will be capable of producing electricity at a wholesale cost of five cents per kilowatt-hour. Prototypes have been built and tested both in the laboratory and in the field, and the company expects to start commercial production in 12 to 15 months. "It's quite an aggressive claim," says Daniel Friedman, a solar-energy researcher at the U.S. National Renewable Energy Laboratory (NREL). He says that most others in the space are still working toward seven or eight cents per kilowatt-hour. "I can't say Sunrgi won't achieve what it's claiming, but right now, it's just on paper, and costs like that are only going to be a reality at the large manufacturing level," he says. "Even then, the five-cent figure sounds really optimistic."

Arguably the biggest breakthrough for Sunrgi is in the area of heat management, which is essential to any concentrated photovoltaic system. The intense heat created by concentrating the sun so much can reduce both the efficiency and the life of the solar cell. At 2,000 times sun concentration, temperatures can exceed 1800 °C--similar to the heat from an acetylene torch, and hot enough to melt the solar cell.

Cells in such systems are usually cooled through a combination of heat conduction, air or liquid convection, and radiation; the goal is to remove as much of the heat as quickly as possible, says Sunrgi partner KRS Murthy, who has been labeled the "thermal wizard" by his colleagues. "At each stage of conduction, convection, and radiation, we've made an improvement over what others have done," he says.

For example, connected to the bottom of each cell is a small fluid-filled chamber that acts as a heat sink. Murthy says that the fluid contains high-temperature composites and nanomaterials that rapidly remove the heat from the cells. This "super cooling" allows the cells to stay cool enough to work, about 10 to 20 °C above ambient temperatures. Murthy won't say what materials are in the fluid. "It's our secret."

Electronics engineer Thomas Forrester, another founding partner at Sunrgi, says that the chamber isn't filled with much: "We're talking as little as drops of liquid." But it's enough, he says, to absorb the heat and move it to another part of the cell so that it can dissipate rapidly into the environment. Future versions will attempt to capture that waste heat as useful energy. "We have patents pending on other designs that do this," he says.

Simon Fafard, founder and chief technology officer at Ottawa-based Cyrium Technologies, a maker of high-end cells for the concentrated photovoltaic market, says that the heavy-duty heat sinks that Sunrgi relies on leave little room for error during manufacturing. "It also makes testing the cells a bit more of a challenge," he adds.

Forrester says that's why most of the founders of Sunrgi have an expertise in manufacturing. "The question people ask us is, why hasn't any other solar company done this?" he says. "Well, we're taking a different approach that directly applies principles from chip manufacturing. That's one of the keys to our technology."

But other challenges remain. Concentrated photovoltaic systems need direct sunlight to work, meaning that they must be designed to track the sun through the day. Fafard says that Sunrgi's system, at 2,000 times concentration, will need to use tracking with pinpoint accuracy to keep the light focused on the tiny solar cells. He compares it to looking at a star through a telescope: the higher the magnification, the more accuracy is required to keep the star within view of the lens. This makes Sunrgi's system potentially more vulnerable to the elements. "Wind would definitely be bad," says NREL's Friedman. "If the thing is shaking even a little bit, the light will go off the cell."

The need for direct sunlight also means that concentrated photovoltaic systems don't work on cloudy or hazy days when conventional solar systems can at least capture some of the sun's energy. "So it makes the most sense for places like Phoenix, Spain, Australia," says Fafard.

Sidlo says that Sunrgi will initially be targeting utility-scale developments and is in talks with strategic partners, including manufacturers. The company is currently self-funded but says that it is talking with top venture capitalists.

Copyright Technology Review 2008.