What happens downstream?: Scott Mattoon's blog

I'm excited to see the launch of Connected Urban Development happen here in San Francisco this week.  It is fitting that Cisco should jump into the fray with a community building initiative centered on ICT's role in sustainable development.  They've been among the vanguard of companies innovating in IT and in International Development since their beginning.  John Chambers, et al have a long record of prioritizing Cisco's role in bridging the digital divide and investing in our shared future.

But do we need Yet Another Climate Change Initiative?   Clearly, Cisco can do great things in fulfilling their commitment to the Clinton Global Initiative and help to reduce carbon emissions, but are they detracting from other important programs already well underway to address the same issues?   I hope not, and I certainly will watch this space to see what actually occurs after the conference closes today.  If the list of business and government leaders they've assembled for the event is any indication, CUD is already doing much to help foster the all important public-private partnerships that are so hard to sustain over the life of a long ranging initiative like this.

Among the programs whose mission overlaps with CUD are ICLEI and Natural Capitalism Solutions.  Both organizations have been at this Sustainable Urban Development business long before global warming entered the business world's conscience.  ICLEI (International Council for Local Environmental Initiatives) was founded in 1990 to help local governments connect with each other and develop cost effective means of sustainable development.  Hunter Lovins and her posse at NatCap Solutions have made available an incredibly valuable resource for urban climate change programs: The Climate Protection Manual for Cities.  Neither of these two veteran groups appear to be involved in Cisco's climate_change_initiative_come_lately.   Hopefully the connections will be made soon enough and some real efficiencies can be gained in collaborating on development of environmentally sustainable cities.  I'll see if I can run over to the conference at lunch time and help Cisco build their network.  Maybe I'll even get to meet my new business idol, Robin Chase, TEDster and CEO of GoLoco, who is on the conference agenda today.

Dave Douglas kicked off the EnergyCamp "Unconference" and incited a heated debate by asking the opening session panel, "Do we need five big innovations or billions of little ones?"

Hunter Lovins responded first, saying we have the technology to get to sustainability: efficiency first, to buy time, then follow the model of nature, strive to produce products locally, at ambient temp, using waste from one production as inputs to the next.  The economics are beginning to make sense, as evidenced by the emergence, in China, of the world's first green billionaire.

Adam Werbach answered facetiously, "Kill the experts."  What he means is that the "experts'" legacy thinking is getting in the way.  Grass roots non-experts, in the shape of WalMart employees, have turned off the lights in coke machines in WalMart's employee break rooms (and Pepsi machines too).  Once Coke saw sales dip, they responded by putting up a  "My light is out but it's cold inside"sign, then saw their sales rise while Pepsi's fell.

Ted Nordhaus said our priority is to grapple with inexpensive energy, which is a root cause of climate change.  This will be a process of unleashing human power to change the political reality, he predicts.

Michael Shellenberger claimed that international policy alone is not a solution.  He cites that, since Kyoto, GHG emissions have risen in Canada and the EU faster than in U.S.

The panelists' positions having been posed, debate ensued over many topics, especially the potential role of nuclear power in solving climate change.  Nice to see some substantive disagreement - Sun did a great job picking a panel that would not mimic the too oft aligned community of experts.

More from the Unconference coverage here.

The New York Times ran an Ope-Ed piece by Jared Diamond last week entitled "What's Your Consumption Factor?" In it, Diamond posits that living standards are not tightly coupled with consumption rates.  To support his thesis he cites the relative living standards of Western Europeans, who consume only about half as much oil per capita as Americans, yet by many reasonable measures live better than Americans - they have longer life expectancy, fewer diseases, lower infant mortality, more vacation time, better financial security after retirement, better public schools, and greater support for the arts.

Mr. Diamond's essay suggests that consumers can stave off resource depletion and environmental degradation while enjoying stable or improving living standards. How?  By reducing waste and consuming less.

While I agree with his claim as it relates to today's socioeconomic conditions, I take a different position for the long view: ultimately, living standards are tightly coupled to the rate of consumption of natural resources, but they are inversely related.  A higher rate of consumption will accelerate the depletion and degradation until a global scale tragedy of the commons is experienced.  Living standards will eventually suffer if patterns of consumption continue unchecked.  Some environmentalists would say we're already seeing evidence of this inverse relationship, citing trends like rising cancer rates, increased traffic related deaths, and species loss.

I don't think Diamond's point is to deny this relationship between living standards and consumption; his is focused at the consumer level, which is where he says action should be taken to avert tragedy.

What concerns me about Diamond's call to action is two fold :

First, the path to higher living standards is not obvious in the context of shrinking rates of consumption.  We can't look to Western Europe's economy for the answer.  Modeling after them is merely a postponement strategy.  Western Europe is among the population of one billion in the developed world that consumes at 32 times the rate of the rest of the world.  By most predictions, that gap will narrow as the developing world plays catch up.  The other 5.5 billion people on Earth are racing to use more oil and metal and timber and plastics, and they'll produce more GHG's and pollutants and landfill along the way.   Add to the mix a predicted 2.5 billion additional people before global population levels off at nine billion by mid-century.  These growth trends are playing out in a closed loop system made of finite resources, so consumption as we know it will inevitably slow down.  But this slow down will not be voluntary.  Natural limits will dictate this ultimatum.  Can we rely on consumers to make choices that steer clear of these natural limits?  Maybe, but we don't have any evidence they will do so within current market structures and under current modes of commerce.

Second, consumers do not have the tools to be successful in their new mission to save us from diminishing living standards. 

Diamond's conclusions conform nicely to the IPAT equation, but only in one dimension.  IPAT is a model developed in 1970 to better understand forces affecting the environment, where (I)mpact is a function of (P)opulation, (A)ffluence, and (T)echnology (I = P x A x T).   IPAT does not purport to quantify environmental impact, only to describe relationships between wealth, population and the environment.  Technology, in IPAT's modern interpretation, is the dampening force against the negative effects of Population and Affluence.  Technology can be used to prevent pollutants from entering the environment.  McDonough's Cradle to Cradle model for sustainability uses Technology to isolate technical nutrient cycles into closed loops thereby preventing them from mixing with (contaminating) natural nutrient cycles.  The field of Industrial Ecology is based on this mitigating potential of Technology.  Government and industry can apply Technology in myriad designs for a sustainable economy.  But the consumer does not have an active role in these designs.  Consumers appear to be left with just one method: "Stop shopping".  This focus on the A in IPAT is a version of what Paul Ehrlich called "environmental roulette".  It leaves an awful lot riding on the chance that consumers will alter their self-interested behavior.  Diamond does not incorporate Technology into his prescription for consumers.  Yet, without better tools for making smart choices, consumers will have difficulty tapping their enormous potential to influence the Impact equation.

So, how can Technology be applied to this seemingly intractable consumer dilemma?   My resolution for 2008 is to write substantively about this here on downstream.  In particular, I hope to propose uses of Information Technology to better address the consumers' sustainability dilemma.

I've gone toe to toe with plenty of climate change skeptics over the last year or so.  I felt I had pretty compelling arguments for why their denial arguments lacked merit.  I've become facile with responses to statements like these:

"We live in a world of risks.  The risk of climate change is akin to the risk of Earth being hit by an asteroid."

"Many scientists disagree with the conclusions of the IPCC."

"The costs of taking action on climate change are too high."

Of all the rebuttals I gave, none are as compelling or as simple as the case made by the chap in this YouTube video.  What he gives us is a very articulate and rational application of the precautionary principle, and uses it to effectively neutralize the climate change skeptics' reasons for inaction.

The precautionary principle says that, when confronted with reasonable doubt about the environmental, health, or social outcome of a particular action, it's best to err on the side of caution. 

Several governments have adopted policy based on the precautionary principle.  The EU, for example, banned the import of growth hormone injected beef from the U.S., even though they did not have specific proof of the ill effects of eating such beef.  (The ban was later ruled to be illegal by the WTO - a very un-precautionary decision.) 

The U.S. may be on the brink of adopting precautionary based emissions reduction legislation.  The Senate Environment and Public Works Committee voted today to send a bill to the Senate that would cap GHG emissions in this country.  This bill is exactly the kind of action that the YouTube chap is referring to when he sets the context for "column A" in his 2x2 grid.  This grid, and the accompanying argument, is something we can all bring to the skeptics that are advocating for the status quo.  Do we really need proof of catastrophic impacts before we take action?

Noah Kagan described the Blended iPod video as the best example of viral marketing on the web right now.  It had been viewed 4,499,819 times by the time I watched it while listening to Noah at the Opportunity Green conference at UCLA today.

He was making a point to this audience of green entrepreneurs that you've got to "keep it real" by making your eco message accessible and entertaining.  Viral marketing on the Internet is the essential tool and is the key enabler of the green business movement.

Noah shared the stage with Günther Lie, Director of Interactive Marketing at Method Products, in a panel interview called Green 2.0 - Connecting Our Community.  Günther observed that the marketing messages directed at prospective green customers are infused with shame and guilt.   I'd say that's right, and, to an extent, is why businesses' participation in communities online is so crucial to the green sea change washing over the economy.  Social pressure on a scale only possible through online communities is driving conformity to new social standards.  The green ethos is coalescing first online.  What was briefly a meme in early online communities is now a code of conduct among those communities with intention.  The price of admission to an effective, thriving community is having a working knowledge of eco and social responsibility.  Businesses lacking the vocabulary of CSR, carbon offsets, and radical resource efficiency need not apply.  You won't get noticed taken seriously on worldchanging.com, treehugger.com, openthefuture.com, openarchitecturenetwork.org, care2.com, witness.org, or the myriad other huge, vibrant online communities shaping our socially and environmentally just future unless you accept an informed role in the cause.

The New York Times ran a piece on the front page of today's Business Day section about the emergence of executive positions chartered with sustainability in American corporations.  The story's headline, "Companies Giving Green An Office," suggests the elevated status of this new crop of executives is a provisional mantle granted whilst the real CxO's figure out whether a separate position is essential to the integration of sustainability in their companies, or even whether the whole environmental responsibility thing will blow over.

In her cursory exploration of the trend, Claudia Deutsche reports that the role has moved from a compliance measure and appeasement of critics to an integral decision making position entrusted with responsibility for not only how to spend money, but also how to make money.  This is certainly the case for Sun's own Office of Eco Responsibility, headed by VP Dave Douglas,  which is responsible for the development and marketing of certain products, including Project Blackbox, in addition to internally facing environmental and energy efficiency initiatives.  I am not convinced that capitalizing on market opportunities is what drove the companies cited in the story to formalize these executive positions, however.

Of the eight companies cited in the article (Sun was not one of them,) seven have senior executives dedicated to environmental or sustainability programs, one (Hilton Hotels) has a subset of sustainability, (carbon footprint,) tacked on to his traditional office, and one (G.E.) has two officers focused on the environment.  The list of these executive positions is summarized below.

Company	Title	Executive Name
Dow Chemical	Chief Sustainability Office	David E. Kepler
DuPont	Chief Sustainability Office	Linda J. Fischer
General Electric	Vice President, Ecomagination  Vice President, Corporate Environmental Programs	Lorraine Bolsinger Stephen Ramsey
General Motors	Vice President for Environment	Elizabeth A. Lowery
Hilton Hotels	Executive VP for Brands	Ernest Wooden Jr.
Home Depot	Vice President for Environmental Innovation	Ron Jarvis
HSBC Group	Deputy Sustainable Development	Francis Sullivan
Owens Corning	Chief Research and Development and Sustainability   Officer	Frank O'Brien-Bernini

Clearly, this is good news for advocates of the environment and for sustainable business, but for anyone who has been following sustainability in business, this article was hardly a news flash.  These eight companies have had significant environmental programs in place for years (albeit, some weaker than others).   Two relevant aspects of the trend were unfortunately missed in the coverage of this newsworthy trend:

1. What drove most of these eight huge multi-nationals to put meaningful programs in place was brand protection from years, if not decades, of media attention and watchdog attacks that constantly badgered the companies to be more environmentally responsible.
   
2. Dozens of other Fortune 500 companies have joined the ranks of these giants, recently adding executive offices focused on sustainability, many of which are responses to market opportunities rather than gestures to stay out of the hot seat.
   

What drives companies to adopt a sustainability program is not necessarily indicative of the effectiveness of the program.  Both Dow and DuPont, originally incited to come up with environmental policies by critics, are now truly innovating for the environment and helping industry improve environmental processes.  Dow's focus on efficiency led to more than 200% ROI on energy efficiency initiatives from 1981 to 1993.  DuPont committed to "improve the value of our products and services per unit of natural resource employed," and has delivered on that goal year after year.    eBay, Google, and Yahoo! on the other hand, largely motivated by branding opportunity and a sense of responsibility, have moved rapidly to develop energy efficiency programs,  yet Google's solar panels program, perhaps the most aggressive of all undertaken by these Internet giants, will reduce their energy use by about 30%.  Admirable, but not exactly radical.  It leaves one to wonder what they'll do for an encore.

Nice to see the trend covered on the front page of the NYT Business section, but a deeper look into the drivers of the trend and a wider view than just these eight companies would make the article more valuable.  Hopefully Ms. Deutsch will put this trend on her regular beat.

Opening the Thursday morning session at the TED conference, the TED House Band riffed on Herbie Hancock's most recognized theme.  Appropriate choice, as the Jazz master's melodies are among some of the most frequently mashed-up, sampled and otherwise adapted in variation.   So much of the spirit and content at TED 2007 is a mashup of hit themes in the use of technology to solve the world's problems. 

"I'm scared. I don't think we're going to make it." 

John Doer opened his keynote with these attention getting words, inspired by his daughter who said to him, "I'm scared and I'm angry.  Dad, your generation created this problem and you better fix it."  The topic of this dinner table conversation was, of course, global warming.

John made a very compelling and emotional appeal to the crowd to use the power of business and commerce to address his daughter's mandate.  He cited plenty of examples of where this is already happening.  E.g., WalMart has made going green a top priority. Their campaign to sell more compact fluorescent light bulbs alone will reduce carbon emissions by 20M tons.

"Consumers don't know what the real costs are," he testified.

If I get the chance, I want to ask him, "John, if consumers did know the real costs, would they behave differently?"  It's a question I ask a lot of people.  In December I asked a panel of top executives, including Bob Fischer, Chariman of The Gap, and Elliot Hoffman, founder of Just Desserts and the New Voice of Business.  Their unanimous answer, like everyone else I ask, was "Absolutely".

This is a subtext of so many conversations at TED.  How do we connect consumers to knowledge of the impact of their decisions.   And the adjunct I like to insert in the dialog, what if we could do it real-time, at the point of purchase, and avert the behaviors that are driving the problem that scares John Doerr and angers his daughter?

John closed the keynote with a call to action.  "Going green is the largest economic opportunity of the 21st Century. Make Going Green your Next Big Thing.  Go carbon neutral by going to climatecrisis.org to offset your carbon.  Do it like WalMart - go big.  Think outside of the box."  The TEDster's, I know, are already there. Let's hope we can tap the amazing portfolio of innovations, many of them circulating in the aisles here, like the Open Architecture Network, and mash them up and assemble the economic widgets and transaction models and networking and knowledge to empower consumers to be the world they want for their children.

---

Resources for going Carbon Neutral:

• Drive Neutral
• Carbon Planet
• Chicago Climate Exchange

What would it look like if consumers could know the real costs?

• Wares Wiki - a conceptual social network for using bar codes as index into a wiki of relevant data on consumer products, by Scott Mattoon
  
• Wiser Business - a conceptual model for building awareness of individual business's environmental and social profile, by Paul Hawken & Co.
  
• Reveal Labelling - a conceptual consumer products rating and labelling system
  

The HBR book, Built To Last: Successful Habits fo Visionary Companies, professes that the companies who stick to their core values and consistently operate under a set of core principles are invariably the ones who sustain their greatness over spans of time involving economic difficulty and all manner of challenges. Sun's not on the list of the 20 companies covered - they only studied large corporation who have been around for 75 years or more, but I think we stand a great chance of being high on the list when 02057 rolls around.

With the news of Sun earning Ceres Company statusmy belief is reaffirmed that Sun has what it takes to to Last a long long time. Implied by the coveted Ceres distinction is an adoption of the Ceres Principles, which are:

• Protection of the Biosphere
• Sustainable Use of Natural Resources
• Reduction and Disposal of Wastes
• Energy Conservation
• Risk Reduction
• Safe Products and Services
• Informing the Public
• Management Commitment
• Audits and Reports

I am proud to work at the first California tech company to receive this distinction from such a respected institution. It's more evidence that Sun is working to be sustainable in every sense of the word.