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October 2011 - Terra Infirma


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31 October 2011

The quickest way to kill your green business


What's the worst mistake you can make when greening your business? The fastest way to bring it to a grinding halt? Kill it for good?

Answer: make your customers take the pain.

Only a small minority of customers will compromise on the quality or price of your product or service in return for green credentials. Most will expect to to deliver on performance, price AND planet. If you can't do all three, they'll find someone who can.

So, if you can't do all three, go back to the drawing board. A dead green business helps no-one.

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28 October 2011

Is the renewable energy industry getting greedy?

Twitter and the green press is buzzing with the UK solar industry leaping up and down as they fear the Feed-in Tariff (FiT) is going to get cut by the Government. Apocalyptic predictions are flying about - the industry will crumble, investment dry up, the earth will end...

If you aren't an energy geek, the FiT is a premium rate for locally generated renewable energy and it was designed to ensure a healthy return for investors to encourage uptake. The (capped) cost of the scheme is paid for by all electricity consumers.

What's happening now is the price of solar panels is plummeting, so uptake is going through the roof (excuse the pun) - almost three times as much installed as expected - as people take advantage of the better return on investment (ROI). The Government is said to be considering cutting the FiT for a second time to maintain the original ROI.

FiTs aren't universally popular, even in the green community. Commentator George Monbiot has criticised the FiTs for shunting cash from people who are often struggling to pay their electricity bills to those who already have the money to invest in renewables. I wouldn't go that far - in fact I'm a big supporter of the FiT - but I think the industry still has to be mindful where that money comes from - and the current financial pressures on those householders.

If the Government does reduce the tariff to reflect the new, lower cost of solar, investors will get the same return as originally intended, more panels can be installed under the same cap and there won't be any further increase in consumer bills. So what's the problem? Who loses? How will this kill the industry?

Renewable industry players might have to take a little less profit than they had hoped (but no less than they were promised), but why shouldn't the FiT track the capital costs of technology? It is after all a subsidy, not a right.

There's a parable about a goose that laid golden eggs...

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26 October 2011

Making sustainability relevant to stakeholders

Everyone who has tried to spread the green message has come up against the wall of indifference. What's wrong with people? Don't they understand the world is in peril? Why won't they do anything?

What happens if you shout louder? People seem to take even less notice. So you start railing against the world - why can no-one grasp the issues instead of you?

The problem of course is people have plenty of priorities and will resist having another one. Yes, they care about the polar bear, but what's that got to do with their paper-pushing or lever-pulling job at Megacorp plc?

It's this gap between global issues like climate change and/or high level concepts like sustainability and the day to day pressures of completing that paperwork or finishing that widget that you need to bridge. And you bridge it not by trying to beat your values into their brain, but by putting that issue into the context of the world they inhabit.

Here are some tactics for doing this:

  • The human interest story: we respond to 'people like us' telling us their story - which is why TV reporters always interview the Western aid worker in famine stories rather than the poor victims (I hate this, but they do it for a reason);
  • Getting people involved in generating solutions: if people work out what this means to their job function, they make the bridge themselves and get a much deeper understanding than you telling them;
  • Tailor training and awareness material for particular job functions. So marketers get trained in green marketing, accountants in the business case for sustainability, product developers in eco-design etc;
  • Tap into any organisational cultural traits. If another issue is a key plank of the culture - eg innovation, health & safety, hygiene, third world development, charitable donations etc - then try to piggy back on that issue rather than trying to create a new plank.

But overall, we have to remember it is about them, not you. This can be tricky - I must admit I occasionally get dragged into a debate with a climate change "sceptic" online and I often forget that others are watching and may give the other guy the benefit of the doubt - particularly if I start batting down the same old tired arguments with a bit too much zeal.

Putting the old ego in the back pocket for a while and getting yourself into their world is the way to win people in the long term.

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24 October 2011

On Yer Bike!

I love cycling. I'm rarely happier than buzzing along a country lane in the sun with a cool breeze, heading towards a distant teashop for a cuppa and a slice of cake.

On the wider scale, cycling is great for us all. It makes us healthier, gives us better local air quality and makes our cities quieter and more convivial. Some cities like Copenhagen have more than a third of commuters travelling by bike, yet in other countries (ie here in the UK) urban cycling is the preserve of the notorious MAMIL (Middle Age Man In Lycra).

So how can a responsible business encourage its employees to cycle? Here are a few ideas:

  • Take part in a bike to work scheme or similar to subsidise cycle purchases;
  • Offer cyclists mileage rates for business travel;
  • Provide decent, secure, covered cycle storage in convenient locations (I saw some notorious 'wheel bender' stands at a nature reserve today grrrr... if in doubt, ask an expert);
  • If your business is in a city centre, provide/sponsor public cycle stands and/or air pumps;
  • Provide lockers and showers;
  • Provide free cycle maintenance classes;
  • Provide cycle proficiency classes;
  • Organise social cycles to create a buzz;
  • Encourage senior staff members to cycle to lead the way;
  • Publish cycle-related stories in company newsletters;
  • Create cycle challenges to see which team can cut car use the most;
  • Ensure cycles can access your site safely;
  • Enhance links between cycle paths/routes and your site (including signage);
  • Sponsor new cycle routes where appropriate/possible;
  • Provide free cycle route maps and other information;
  • Provide cycles for business trips - including folding cycles for journeys involving the train) and, where appropriate, getting around site;
  • Lobby trade bodies, economic development quangos and local authorities to factor cycling into their plans.

Boosting cycling is an obvious, cheap, quick win for any organisation wanting to go green. It can also contribute to what I call Corporate Civic Responsibility (enabling the local public to be more sustainable by using your financial muscle).

So what are you waiting for? Get in the saddle!

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21 October 2011

Waste Is A Verb, Not A Noun

Here's the latest in my Green Business Confidential podcast series. It's called "Waste is a verb, not a noun" and it is all about the effect of the word 'waste' on us psychologically - but don't worry, I don't get too metaphysical on you all.

Audio MP3

Or, you can download it here and listen on your MP3 player:

GBC10 Waste Is A Verb, Not A Noun

You can get the whole podcast series here or subscribe on iTunes.

Play

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19 October 2011

Build your own green supply chain

One of the key green business challenges is the supply chain. For most businesses 60%+ of their carbon footprint lies in their suppliers. We have now gone way beyond the days of drawing the limit of responsibility around the factory fence - true green businesses have to address the whole supply chain.

But herein lies the challenge. Current supply chains are set up for conventional products and "green" supply chains tend to be weak - single suppliers, hobbyists masquerading as businesspeople, low capacity, high price. If you want to truly transform your business, simply choosing the marginally greener of the available conventional suppliers is not going to get you very far.

The answer is: build the supply chain you need. Easy to say, difficult to do, but here are some ideas taken from contributors to The Green Executive:

• Collaborate to boost demand: Royal Mail claim to have brought commercial hydrogen vans forward by a decade by collaborating with other European postal services;

• Create volume: Marks & Spencer wanted high grade recycled polyester in their school uniforms, but it was expensive due to low volumes. They found by purchasing low grade recycled fibre in bulk for cushion stuffing, they could bring down the price of the high grade material;

• Work with suppliers: go in and help key suppliers provide a better product and service. if you have to, invest in them and beat them into shape;

• Invest in R&D: collaborate with researchers to develop better green solutions;

• Play conventional suppliers off against each other to get the product or service you need;

• Copy InterfaceFLOR who realised that the most sustainable raw material for making new carpets was using old carpets. Can your products become your raw materials?

None of these are simple and many require you to have substantial purchasing power and or investment resources. But building a green supply chain can be, and has been, done.

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18 October 2011

Green Academy November Sessions

As usual, we will be holding two Green Academy on-line sessions on 2 Nov 2011. Each session lasts for one hour. You need access to a computer with sound or a computer and a telephone. You will receive a workbook to apply the learning to your organisation prior to the start of the session.

This month's sessions are:

11am GMT: Basic level: Carbon Footprinting

Contents:

  • The mechanics of climate change;
  • The basics of carbon footprinting;
  • How to do a simple calculation;
  • How to simplify the footprinting process;
  • A worked example and produce a basic footprint using your bills.

Cost: £45+VAT. To register for the basic level session click here (Paypal)

 

2pm GMT: Advanced level: Green Business Leadership

Content:

  • Why brilliant leadership is the difference between the best green businesses and the rest;
  • Skills, knowledge, attitudes and behaviours;
  • Case studies of great (and terrible) green business leaders.

Cost: £45 + VAT. To register for the advanced level session click here (Paypal)

 

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17 October 2011

The deadliest word...

The word I like to hear least when I'm working with a client or a group of businesspeople is "but...". "But" creeps in like a dark cloud on the horizon, hanging ominously over the conversation.

"But we're an energy intensive business."

"But if it was that easy we would have done it already."

"But we can't afford to, even if we wanted to."

"But this is the way we've always done it."

"But we're in [insert business sector] - it's fine for all these other companies, they don't face the pressures we do."

"But" takes the momentum out of a venture. It deflects and distracts attention from the major point. It kills enthusiasm and introduces cynicism. Of course the word "but" can stop you heading off on a wild goose chase, but (!) all too often it is cover for all our personal fears, laziness, inertia, lack of initiative - all those things that stop you doing something you know you really should do.

So how can you get over the "buts"? Here are a few methods I use:

  • Don't preach. When people listen to someone ranting about something, their mind fills up with "buts". Converse instead;
  • Get people involved in developing solutions - this generates a 'can do' attitude;
  • Throw a question back at the doubter - "If you can't afford to do it now, how are you going to survive if your competitors are winning more business than you?"

The "buts" you want to hear are positive - "this is going to take a lot of effort, but I think it will be worthwhile." That "but" is music to my ears.

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14 October 2011

Treehuggers won't save the world

There's an old joke about engineers and their pragmatism:

An optimist says the glass is half full;

A pessimist says the glass is half empty;

An engineer says the glass is twice as big as it needs to be.

I'm an engineer and proud of it, and I also like to think of myself as a pragmatic environmentalist - solutions driven rather than an idealist. And more and more, I believe that it is the pragmatic environmentalists who are key to delivering sustainability.

Treehuggers have their heart in the right place, but sometimes I worry about where their minds are. In one of my brief flirtations with one of the major green groups, I found plans were being made to go to the local station and hand out sweets to commuters to thank them on behalf of society and the planet for travelling by train. "What a load of sanctimonious, patronising claptrap - and what good would it do, anyway?" was my immediate reaction. I didn't go back.

My serious point is that if you are trying to transform an organisation, you must guard against letting your passion (or any one else's) boil over into self-righteousness. People will simply switch off, and if you try turning up the volume, they'll put in earplugs.

Pragmatism means finding what works, not what's ideologically pure. It means ignoring the mantras, platitudes and shibboleths and doing what will make a difference. It means appreciating why others may not be as driven to go green as you are, understanding their viewpoints and not treating them with contempt.

But overall, it means getting things done.

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12 October 2011

The Price of Doing Nothing


So why bother? There's a recession on, times are tight, people are cautious. Why not sit it out and deal with all this green stuff when things get better? Or never?

Well, if your competitors decide to go green they will:

  • Spend less on compliance;
  • Cut the risk of prosecution with attendant legal costs, potential fines and PR fall out;
  • Cut their energy, waste, water and raw material costs;
  • Recruit better staff and retain them for longer;
  • Source more sustainable supplies of raw material;
  • Win more contracts;
  • Retain more existing customers.

They'd be mad not to wouldn't they?

And if you think I'm just being flippant, I recently came across a case where a medium-size company lost 60% of their business overnight when their biggest customer decided they weren't taking green issues seriously enough.

That's no joke.

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10 October 2011

Richard Branson (and me): fossil fuel is fuelling the recession


Sir Richard Branson said something very interesting this week. Speaking at the Slowlife Symposium in the Maldives (above, and no, I wasn't there, unfortunately), he said:

“If we don’t have alternative fuels we are going to have the mother of all recessions.”

This is music to my ears as a. I believe our unsustainability is a major contributing factor to the ongoing global economic slump and b. many, many more people will listen to SRB than me.

In my view, the modern economic system was built on cheap debt and cheap energy - both of which have come to a rather sudden end. The first is much debated in the press, mainly because it was the debt bubble bursting that triggered the current situation. However, despite much arm waving from the prestigious International Energy Agency and others, few people are talking about the second.

The economy has stalled because of lack of demand. Look at the pressures on households - yes many have sadly lost their jobs - but everyone is being hit by rocketing domestic energy prices, road fuel prices, food prices - and we wonder why people are not spending? We need to cut those bills to get the economy going again which will mean improving efficiency and finding alternative energy sources to replace expensive oil.

Flipping into positive thinking mode, we might be able to kill two birds with one stone. By going hard on renewable energy and energy efficiency we can mitigate those rising energy prices and generate new jobs and green business opportunities. As Branson said, it's the "biggest entrepreneurial opportunity of our lifetime."

There has been much debate about whether we can decouple economic growth and carbon emissions, but I'm increasingly convinced we will be forced to do so one way or another. Let's make it the good way.

Photo and Branson quotes courtesy of thisismission.com

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7 October 2011

It won't happen by magic...

I am very saddened by a large organisation I know well which has lost its way on sustainability. It had been rated best in class by independent evaluators, but the pipeline of green projects has suddenly dried to a trickle, employees are getting cynical and partners are getting frustrated.

What happened? A change in management bringing a change in management style. In tough times, they say, we must focus on a smaller list of priorities. The revised list has no mention of sustainability at all.

When they are challenged on this, the weasel words come out. Of course we are still committed to sustainability, it's a cross cutting theme, it's embedded in each of the new priorities, we consider it all the time, it doesn't have to be written down to be important.

Utter nonsense.

To do sustainability properly it must be embedded in the culture, systems, infrastructure, strategy and product/service of the organisation. That won't happen unless the leadership say "this is a priority for us, we want you to do it." Clear unambiguous commitment and direction is required.

To say to your staff and partners "we want A, B, C and D", and expect "E" to somehow happen by magic, osmosis or ESP is idiocy.

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5 October 2011

Trust - the magic ingredient

Do people trust you?

Do they believe you will do what you say you will do?

Do they believe you are telling the truth, the whole truth and nothing but the truth?

Well if you are serious about green business or corporate social responsibility, then trust is the magic ingredient. To facilitate change inside the organisation as a Green Executive, you must be trusted as an individual. To reap the rewards of green business in your marketplace and indeed the jobs market, your organisation must be trusted.

Marks & Spencer is a trusted brand. Its Plan A sustainability programme was developed to protect that trust in the 21st Century.

Apple is trusted to create great products, but it is not trusted on green issues or supply chain working conditions.

Leadership guru Warren Bennis lists Bennis lists five Cs for trust:

  • Competence: the technical and managerial competence to engage properly and deliver on promises;
  • Constancy: that you can be relied upon to do what you says you will do, even when the going gets tough;
  • Caring: stakeholders have to feel that their welfare is of genuine concern;
  • Candour: openness, transparency and honesty;
  • Congruity (or authenticity).

How many do you score on? How many would your boss get? The organisation?

If you've got it, cherish, nourish and protect it - it is priceless.

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3 October 2011

Exclusive: Chris Huhne on the Green Energy Economy

Last Thursday UK Energy & Climate Change Secretary Chris Huhne MP spoke at an event on the Green Energy Economy organised by Newcastle Liberal Democrats (full disclosure: I'm a party member and councillor). Compared the the usual shallow platitudes that MPs of all persuasions trot out about the green economy, Huhne gave the audience a pretty heavyweight discourse - maybe a bit too technocratic at times for parts of the audience - on the current state of play, what the Government is trying to achieve, and how it is trying to achieve it.

Huhne is an economist by background, and the really interesting part of the speech for me was his opinions how countries get out of economic slumps. He argued that it was never the prevalent industry of the time that got the economy going again, but fast growing emerging sectors - such as the motor industry in the 30s taking over from heavy engineering. The green sector is one of the fastest growing at present, so that's why the low carbon economy is one of the main thrusts of the Government's growth strategy.

On his energy sector reforms, he argued that, while consumers would find a 7% increase on the cost of each unit of energy consumed, once you factor in energy efficiency measures such as the Green Deal, the average bill should go down. This fact was, he said, being deliberately ignored by sensationalist elements in the press.

For a heavyweight speech, we had an appropriately heavyweight audience with at least two University Profs, a clutch of top businessmen from the region and quite a few students taking sustainability-related courses. Unsurprisingly, the questions were excellent - here's a summary of them along with Huhne's answers (both paraphrased - any errors are mine):

Q1. When you implemented the previous Government's Feed-in Tariff scheme, why did you cap the amount of tariff available and the size of the installation.

A: In the time between the previous Govt designing the scheme and it coming on line, the cost of solar panels in particular has fallen. The profit margin would have been excessive given that ordinary consumers are footing the bill, in fact a 'dash for solar' could have caused significant economic hardship to people who are already feeling the squeeze. So [Huhne] had to scale the FiT back to give a good, but not excessive, return and cap the total to protect the consumer. The department is currently working on a more intelligent system which would track technology costs automatically.

 Q2: Industry doesn't feel the Govt is sending out a consistent message and won't act until it hears one.

A: Everything in the coalition agreement on the environment has either been implemented or is well on the way, plus the renewable heat initiative which wasn't in it. While some policies have had to evolve, such as FiTs, there has been no inconsistency of purpose, despite what you may read in the press.

Q3: Subsidies for biomass energy could kill off the panel board industry which relies on a source of clean recovered wood.

A: There is plenty of biomass available, but the supply chains are weak. The answer is to develop the supply chains, rather than scale back biomass energy.

Q4: All these technologies require a huge amount of public subsidy - is this sustainable?

A: Public subsidy is required when a technology is immature. Costs are falling fast eg cost of solar is dropping by 6% year on year - so the cost differential relative to other forms of energy will soon disappear. We need more onshore wind as that is the most cost-effective and [Huhne] thinks the turbines are beautiful (Huhne cracks joke about having been booed at other events for saying that [and he consequently took flak in the local press]).

Q5: Are you squeezing out energy intensive industries like steel and aluminium?

A: Nobody wants these industries to simply disappear overseas as there would be no ecological benefit - and we need steel in particular to build more wind turbines. [Huhne] and Business Secretary Vince Cable are currently putting together a strategy for such industries.

 

Overall, Huhne was very well received and it was great to hear both the Government view directly and his response to tough expert questions, as opposed to his message being 'filtered' through an often cynical media (whether pro- or anti-green).

Picture courtesy of Tracy Connell

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