Green Wombat

Ikea, the purveyor of cheap chic modern furniture and housewares, said today it will stop handing out disposable plastic carry bags in the U.S. in an effort to radically reduce the tens of millions of bags its customers send to landfills every year or that end up littering the landscape. Starting March 15, shoppers who insist on plastic bags to tote their designer kitchen gadgets to their cars will be charged 5 cents per bag. Ikea will donate the proceeds from the "Bag the Plastic Bag" initiative to non-profit green group American Forests to pay for tree planting. The company will encourage customers to buy its reusable Big Blue Bag and is cutting the bag’s price to 59 cents from 99 cents. "The amount of plastic bags we use and toss is overwhelming," Ikea said in a statement. "According to the Environmental Protection Agency, the U.S. consumes over 380 billion plastic bags, sacks and wraps each year. Each year, Americans throw away some 100 billion polyethylene plastic bags, and less than 1 percent of them are recycled."  Ikea said plastic bag use at its British stores has fallen 95 percent since the Swedish company introduced the program in the U.K. Ikea spokesperson Mona Astra Liss told Green Wombat the 5 cent charge represents the cost of producing a plastic bag. "We thought this was a fair price and a good hook into making a difference as we ease customers into thinking ‘reusable’ bags," she wrote in an e-mail. Ikea hopes the program will halve the 70 million bags its customers use annually in the U.S.

The Ikea program is notable in that it’s one of the few initiatives by a distributor of plastic bags itself to discourage their use and and to pass on at least some, if a tiny, part of the environmental cost of consumers’ "paper or plastic" habit.

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Wal-Mart (WMT) chief H. Lee Scott said today that the retail giant would work with suppliers to make their manufacturing processes less dependent on planet-warming fossil fuels. Scott announced Wal-Mart’s "Sustainability 360" initiative at a speech in London. He also said Wal-Mart is collaborating with suppliers to shrink the amount of product packaging by 5 percent by 2013. "Think about the multiplier effect of more than 60,000 suppliers around the world," Scott told the audience in his lecture at the Prince of Wales’s Business & the Environment Programme. "The impact of this packaging effort will be equal to removing 213,000 trucks from the road, and saving about 324,000 tons of coal and 67 million gallons of diesel fuel per year. We believe this effort could save the global supply chain nearly $11 billion. Our supply chain alone could save $3.4 billion." As part of the company green offensive, Scott announced a new "ethical sourcing initiative."  The company will work with suppliers to help them use environmentally sound manufacturing processes.  He cited the case of a Brazilian candy maker that wasn’t properly disposing of waste water. "So our auditors sat down with the factory’s management, explained that sustainability can be profitable, and made recommendations," Scott said, according to a transcript of the speech posted on Wal-Mart’s site. "These managers were skeptical, but they took on the challenge. The next time we visited the factory, we saw a new waste management program." He said 200 Wal-Mart staffers are working on the initiative. Scott also noted that 45 percent of the toilet paper sold in the company’s U.K. stores comes from timber certified as sustainable. "Eventually, we want to use only sustainable timber and pulp-based products to manufacture our brands," he said.

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The white box from Salesforce.com (CRM) lands with a thud on my desk. More swag – corporate tchotchkes packaged in big dead-tree boxes and cushioned
with piles of non-biodegradable
styrofoam pellets. Usually Green Wombat swears an oath to Rachel Carson and recycles
what’s recyclable. But Salesforce.com – like a growing number of companies proclaiming their green cred – has just announced it’s going completely carbon neutral by financing renewable energy projects to offset greenhouse gas emissions from its corporate operations. So I do a
double-take when I spy the FedEx

(FDX) label on the box:
Salesforce’s San Francisco headquarters is located one block – about 300 feet – from Green Wombat’s abode at Business 2.0 magazine. (I can practically see Salesforce CEO Marc Benioff from my 29th floor perch. Google map
above.)  The FedEx tracker, however, shows the box has traveled more than 40 carbon-belching miles to reach Green Wombat.

Let’s follow the swag’s sojourn: Last Friday – three days after the Web-based software company unveils its Earthforce carbon neutral initiative – a FedEx truck arrives at Salesforce’s Market Street office to pick up the package – and half a dozen others sent to B2 writers and editors – and drive it over the Bay Bridge to FedEx’s hub in Oakland.

On Monday, the swag gets trucked back to San Francisco to a FedEx facility. From there, it’s driven to the Business 2.0 tower and delivered to Green Wombat.
And what’s inside the box, you may be wondering?
The contents: a Salesforce-embossed coffee mug, some Salesforce branded chocolates and a folder – with a photo of a polar bear, whose habitat is threatened by global warming, on the cover. The folder contains press releases, including one on the company’s Earthforce program – irony noted – all sitting in a nest of styrofoam.

The point here is not to bash Salesforce – its commitment to being carbon neutral is ahead of the curve – but to note that if companies hope to reap the public relations, environmental and economic benefits of going green, it takes more than whipping out the checkbook and buying carbon credits. Increasingly, consumers and public watchdogs will want to know what companies are doing to directly reduce their greenhouse gas emissions. A good place to start is corporate marketing departments. Think of the greenhouse gases that could cut and landfill space preserved by just saying no to tchotchkes – or at least packaging them in appropriate sized boxes stuffed with old newspapers rather than styrofoam. So, if your company is in downtown San Francisco and insists on sending Green Wombat branded bric-a-brac, just drop me a line and I’ll take a carbon-free stroll and pick it up.

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photo originally uploaded by tjean314

Nobody will accuse ExxonMobil (XOM) of greenwashing. The world’s largest oil company released its energy forecast for the year 2030 yesterday and, in contrast to the sunflowers-and-bears imagery promoted by competitors BP (BP) and Chevron (CVX), ExxonMobil predicted a fossil-fuel future marked by skyrocketing oil and gas consumption and soaring greenhouse gases emissions. Dependence on Middle East oil will grow. Not that there’s anything wrong with that: "The progress of people around the world is driving demand for more
energy," the report states. "We are a world on the move and liquid fuels are essential to meet those demands….By 2030, energy demand will increase by about 60 percent, compared to 2000. The global energy mix will look very similar 25 years from now. Oil, gas and coal will be predominant." ExxonMobil argues that solar, wind and other renewable energy sources will only provide 1 percent of the word’s needs by 2030 – about the same as today – despite the hundreds of millions of dollars being pumped into renewable energy companies and projects as well as state and national mandates to sharply increase the
use of alternative energies. While the oil giant correctly points out that China and India’s growing middle classes will lead to an explosion of demand for cars, it assumes the vast majority of them will run on gasoline. (Meanwhile, the United Nations  warned today that deaths from air pollution are likely to spiral as car ownership increases in Asia. Some 600,000 people in Asia die prematurely each year from air pollution, according to the UN report.)  ExxonMobil’s forecast report predicts that technological fixes – like capturing emissions from coal-fired power plants and higher efficiency vehicles – will reduce the impact on global warming. But it’s curious that in an increasingly carbon constrained world, with efforts to limit greenhouse gas emissions snowballing, that ExxonMobil would so baldly stake its future on the status quo. Will it be a matter of time before Wall Street decides that such a strategy is just too risky and punish companies accordingly? Not just yet, apparently. ExxonMobil’s stock is up 1.46 percent today.

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China’s voracious appetite for energy, its growing contribution to global warming and gargantuan pollution problems present huge opportunities for green tech entrepreneurs and investors, according to a panel of venture capitalists and seasoned China hands who spoke this morning on the People’s Republic’s impact on energy technology. "China will be the driver for clean tech in the future, more so than Europe and the U.S.," said Bryant Tong, a managing director at San Francisco VC firm Nth Power at the event sponsored by The Women’s Technology Cluster, a San Francisco-based incubator. Added Charles Wu, a partner at private equity firm TianDi: "The investment opportunity is enormous. One of my partners is involved in a company that went from $0 to $100 million in one year. You can’t do that in the U.S. In solar, wind and clean coal, there’s a lot of demand." The panelists identified wind power as a particular hot area for investment as China moves to build massive wind farms along its coasts. One overlooked opportunity: tapping China’s cadres of chemical engineers and other highly educated workers to develop green technology for export. "China not only has large numbers of IT engineers but large numbers of chemical engineers," said Wu. "How many chemical engineers do you see running around here?"

Former top Bechtel executive Cordell Hull, now chairman of Infrastructure World, said the fact that China is bringing online two 600-megawatt coal-fired plants every week and plans to build two 1,000-megawatt nuclear plants each year means that renewable energy’s portion of the power grid will be relatively small. But that’s a massive market, given China’s pledge to get 20 percent of its electricity from solar, wind and other renewable energy by 2020 and spend more than $60 billion to make that happen. "China has a history of pretty much fulfilling its national planning objectives," said Hull, who has 30 year’s experience working on China projects. "This is going to happen."  One growing opportunity: providing technology and solutions to alleviate the severe air and water pollution caused by China’s reliance on dirty coal for energy. As the 2008 Beijing Olympics approaches,  the Chinese government is ratcheting up spending on pollution control, he noted.

Still, pitfalls abound for green tech companies contemplating the Chinese market, cautioned the panelists.

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Sun Microsystems will build a virtual version of its Blackbox portable data center in Second Life, the online world. Sun is promoting the Blackbox – essentially a data center in a shipping container – as an energy efficient and green alternative to building massive power-hungry server farms. Dave Douglas, Sun’s VP of Eco-Responsibility, mentioned to me last week that the company wants to introduce Second Life’s 1.4 million residents to the environmentally friendly aspects of the Blackbox. As you’ve probably read elsewhere, First Life companies – aka reality-based enterprises – are increasingly opening up shop in Second Life to market their wares and cash in on its Internet economy, where denizens buy and sell a host of virtual goods using real money. Who knows, when Second Lifers begin to build their own tech companies they just may want to buy a Blackbox to power their businesses.

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I just returned from the Society of Environmental Journalists‘ annual conference, where a hot topic of conversation was Wal-Mart. Like nearly everything the world’s largest retailer does, its recent conversion to the green gospel will have an outsized impact on global warming efforts and the market for environmentally sensitive products and organic food.  When Wal-Mart (WMT) announces it favors capping greenhouse gas emissions and creating a carbon trading market, even flat-earth politicos tend to listen. The company sent its VP for corporate strategy and sustainability, Andrew Ruben, to the SEJ conference in Burlington, Vermont, to talk about the company’s environmental initiatives. "We have a goal of using 100 percent renewable" energy, he said Friday at a panel on "Corporate Green," though he acknowledged Wal-Mart has no time line to achieve that target.

But it’s clear that Wal-Mart sees going green as good for the bottom line. Ruben said the company has retrofitted its fleet of 7,200 trucks with a device that reduces the amount of diesel they consume while idling, saving $25 million in annual fuel costs and cutting many metric tons of greenhouse gas emissions. And there’s no denying Wal-Mart’s ability to influence consumer behavior. For instance, after the company increased the amount of shelf space devoted to high efficiency light bulbs from 5 percent to 20 to 30 percent, some stores reported an immediate 10 percent jump in sales of compact fluorescent bulbs. Ruben said Wal-Mart is trying to sell 100 million such light bulbs this year, which would reduce greenhouse gas emissions by 25 metric tons.

But prominent environmental author Bill McKibben said such efforts, while

praiseworthy, do nothing to change the consumerist culture that’s the root cause of global warming.
"Climate scientists tell us we need an immediate 70 percent reduction in the use of fossil fuels" to avert catastrophic climate change, he said. Thinking that you can solve global warming by "taking the American middle class, high consumption lifestyle and rejigger it a little….is a fantasy. What’s the purpose of getting people to use energy efficiency light bulbs? So people will have more money to spend at Wal-Mart. That model won’t work."

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There are days when it seems the current rage for all things green is about to jump the shark. Take today’s deal between two brands not often mentioned in the same breath:  MTV and Wal-Mart. The former voice of youth culture and the merchandiser to middle America are teaming up on a joint venture called Everyday Green. The initiative is "designed to promote sustainability and demonstrate to consumers how to work environmentally-friendly products into their lives," according to the announcement.  MTV’s New York City retail store has been turned into an eco exhibit where shoppers can ride a bike to power a wall of energy efficient light bulbs and learn about wasteful household appliances, recycling, etc.  Among the green products for sale alongside organic t-shirts and re-useable water bottles are LCD television sets. Hmmm. Now if they can just hook that bike up to the electricity-sucking TV…..For more on other companies jumping on the green bandwagon, check out Madison Avenue West, written by my Business 2.0 colleague Susanna Hamner.

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Attention Wall Street types and financial entrepreneurs keen to go green. The U.S. Environmental Protection Agency and the U.S. Department of Agriculture today announced they’re hooking up to promote water quality trading markets.

The idea is to clean up rivers, lakes and oceans by letting those who restore wetlands and reduce agricultural runoff to sell credits to sewage treatment plants and other facilities required to maintain water quality levels under the federal Clean Water Act. In other words, if Big City Sewage Plant can’t or won’t meet its water quality targets it can buy credits from Farmer Brown who has gone organic and thus slashed the amount of contaminants running from her land into a nearby river. Pollutants such as nitrogen, phosphorus and sediment can be traded.

Here’s the green to be made: while there are a few scattered water quality trading markets around, there’s a business to be built in setting up and brokering these markets. That means opportunities for consultants, traders and software engineers. The feds hope to provide $3 million in funding for such markets in 2007.

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