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Environmental Transformation of the U.S. Economy
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03/09/07
Article Index
Filed under: The Green Wave, Sust. Purchasing, Sustainable Finance, Sust. Manufacturing, Sust. Infrastructure
Posted by: Brian Kuehl @ 7:42 am

Click on the article title to jump directly to the article.  We encourage you to leave comments or add information to the articles by clicking the “comment” button located at the end of each article.

Sustainable Infrastructure
NEW: Water, Water Everywhere and Not a Drop to Drink: Adding Water to the Sustainability Equation, Betsy Otto, American Rivers

NEW:  Sustainable Infrastructure Solutions, Chris Lotspeich, The Second Hill Group

NEW:
Living Buildings and the Competitive Advantage of High Performance, Brandon Smith, Cascadia Region Green Building Council

Sustainable Manufacturing

Green Chemistry: Turning the Ship, John C. Warner, University of Massachusetts Lowell, Center for Green Chemistry

Life Cycle Assessment: A Tool for Sustainable Manufacturing, Tom Swarr, United Technologies Corporation; Jim Fava, Five Winds International

The Quest for a Manufacturing Model that is Sustainable, Mike Bertolucci, Interface Research Corp.

Thinking Like an Ecosystem,  Reid Lifset, Journal of Industrial Ecology

Sustainable Finance

Turning the Ship: Transforming the Everyday, Peter Liu, New Resource Bank

Sustainable Investing and Portfolio 21, an interview with Carsten Henningsen, Progressive Investment Management

Green Energy 3.0: This Time, It Is Different, Jackson W. Robinson, Winslow Management Company

Green Insurance Products, Stephen G. Bushnell, Fireman’s Fund Insurance Company

Sustainable Purchasing
Providing Incentives to Coffee Suppliers to Produce High Quality, Sustainable Coffee, Ben Packard, Starbucks Coffee Company

Talking Until You’re Green in the Face: Environmental Communications Comes to the Fore, Don Millar, The Element Agency

On the Power of Purchasing and the Potential of 1%, Terry Kellogg, 1% For The Planet

Promoting Green Products and Services: Cure for Asthma and Global Warming?, Arthur B. Weisman, Green Seal, Inc.

Power of Local Government Dollars, Michelle Wyman, International Council of Local Environmental Initiatives, USA (ICLEI-USA)

The Green Wave
Climate Change as a Driver of US Market Behavior, Truman Semans, Pew Center on Global Climate Change

Ford Motor Company and the Green Wave, Dan Esty, Yale Center for Environmental Law and Policy

Has the Era of Green Business Finally Arrived?, Joel Makower, GreenBiz.com

Turning the Ship: Environmental Transformation of the U.S. Economy, Brian Kuehl, Harvard Loeb Fellow and The Clark Group, LLC

2 comments
02/16/07
Providing Incentives to Coffee Suppliers to Produce High Quality, Sustainable Coffee
Filed under: Sust. Purchasing
Posted by: Brian Kuehl @ 3:59 pm

By Ben Packard, Director of Environmental Affairs, Starbucks Coffee

New Approach to Purchasing
After years of traveling to coffee-growing regions around the world, we have come to deeply appreciate the care that goes into producing high-quality coffee. These visits are always worthwhile, especially when we have been able to engage directly with farmers, observe their best practices, gain insight about their short- and long-term challenges and identify ways that Starbucks can contribute to the sustainability of their business and community. More important, they have helped to raise our awareness about the need for a more sustainable approach to coffee production – one that touches on every essential aspect of the supply chain – from farming to processing to exporting.

The Conservation Principles for Coffee Production, a set of multi-stakeholder criteria launched in 2001, became the original platform that Starbucks used to evolve and eventually develop a more holistic set of coffee-buying guidelines that is now known as Coffee and Farmer Equity (C.A.F.E.) Practices. These guidelines were designed to ensure the sustainable supply of high-quality coffee; achieve economic accountability; promote social responsibility within the coffee supply chain; and protect the environment.

C.A.F.E. Practices encompasses various sustainability measures that are defined by 28 criteria, extending to both the farming and processing of coffee. The criteria, which serve as the basis for a comprehensive scorecard, fall under four focus areas: product quality; economic accountability; social responsibility; and environmental leadership.

Thousands of participants – from our largest coffee suppliers to many small-holder farms and cooperatives – have applied and been approved as C.A.F.E. Practices suppliers since 2004. When suppliers apply to C.A.F.E. Practices, they must undergo a third-party evaluation to verify the degree to which their practices are aligned with the criteria.

In 2004, Starbucks opened a Farmer Support Center in Costa Rica, which has allowed us to work more closely with farmers and suppliers on their sustainability measures and coffee quality. Shortly thereafter, suppliers in that region began applying and were approved under C.A.F.E. Practices, and the number has kept growing ever since.

Economic Transparency
The coffee market has always been prone to ups and downs, mostly related to the balance between supply and demand. Back in 2001, coffee prices fell to a record low of $0.42 per pound ($0.91 per kilogram), and fluctuated near the bottom for several years. These particular market conditions created a climate of economic instability that had an impact on many farmers and their communities. Today’s market conditions are greatly improved, evident by recent prices of coffee traded on the New York “C” market (the worldwide reference used by coffee traders). In fiscal 2006, world coffee prices averaged $1.04 per pound ($2.29 per kilogram).

We believe that with any product there is an inherent link between quality and price. Through our close working relationships with coffee farmers and suppliers, we have always emphasized the importance of quality as the best, most sustainable driver of higher prices

paid. We understand that coffee farming, like any business, must be profitable to be sustainable. Furthermore, we know that when coffee farmers do not earn enough to cover their production costs and/or provide a reasonable income; they may switch to other crops or perhaps stop growing coffee altogether. In fiscal 2006, Starbucks purchased 294 million pounds (133 million kilograms) of coffee and paid an average price of $1.42 per pound ($3.12 per kilogram).

Starbucks commitment to pay premium prices for premium quality coffee has not wavered over the years. It is an approach that not only serves the short- and long-term economic interests of coffee farmers and suppliers; it also serves Starbucks interests by creating an incentive for farmers to improve quality and increase production that in turn contributes to a more sustainable supply of high-quality coffee which we depend on to support Starbucks continued growth.

To help assure that the farmer receives an equitable share of the price paid by Starbucks, a requirement for economic transparency is included in our coffee contracts, including all of our contracts with suppliers participating in C.A.F.E. Practices. This provision stipulates that our suppliers must provide credible evidence of payments, usually in the form of receipts indicating payments made at all levels along the coffee supply chain, including prices paid to farmers. In fiscal 2006, 98 percent of our coffee contracts included an economic transparency clause requesting documentation of payments made to various participants in the supply chain. In 95 percent of these contracts, economic transparency was required to the producer level.

Requiring coffee suppliers to provide evidence of payments was almost inconceivable several years ago, especially given the diffused and complex nature of the coffee supply chain and the historical lack of record keeping. However, since Starbucks instituted this requirement, a notable change has started to take place in the specialty coffee industry, with more serious attention now being focused on assuring that farmers receive an equitable share of the purchase price. We believe this ultimately benefits coffee farmers and other key suppliers who add value along the supply chain.

Barriers
While we are encouraged by the progress to date, institutionalizing this new requirement has come with certain challenges:

•    Standardized Economic Tracking Mechanism for Entire Coffee Industry
Currently, the coffee industry does not have a standardized mechanism in place that allows all parties across the coffee supply chain to easily submit evidence of payment in a consistent, uniform manner. We receive different forms of documentation – from a simple receipt for the coffee cherries that the farmer delivered to the mill to full purchase agreements that include more levels along the coffee supply chain. These documents not only differ in quality, they reflect variations in currency, industry standards and laws, units of measure and are prepared in many different languages.

•    Continued Emphasis on Relationships, Communication and Training
As our demand for coffee grows and our already complex supplier network expands, we understand the importance of staying in touch with and training our suppliers so they understand how to complete the application forms for C.A.F.E. Practices, manage the required verification process, and adapt their practices to improve their scores. We must also seek efficiencies on our end that enable us to respond more quickly to the needs of our suppliers.

•    Verifiers and Improved Systems Needed
Our plan to buy more sustainable coffee in the future can only be realized if our network of approved suppliers participating in C.A.F.E. Practices grows. The process of approving more suppliers will involve conducting a great number of inspections by third-party verifiers. At the end of fiscal 2006, we had 143 trained and approved verifiers in the field, which was 43 more than the previous year.

Going forward, we expect that more verifiers will be needed to keep pace with the increasing number of verifications that will be required. We see the need for more trained verifiers as an opportunity, and we are encouraged by the interest farmers have shown in becoming approved C.A.F.E. Practices suppliers. And because of this, verifiers will need to be responsive to the increasing demand of more inspections.

•    Extending C.A.F.E. Practices to Africa and Asia Pacific
Increasing our focus on C.A.F.E. Practices in Africa and Asia Pacific has proven to be difficult, as expected. In both Africa and Asia Pacific, Starbucks has been working to introduce C.A.F.E. Practices to coffee farmers, processors and suppliers. Progress has been slowed by realities of local coffee industries, lack of financial transparency, minimal understanding of C.A.F.E. Practices among local suppliers, and too few trained verifiers.

We realize there may be a need to consider regional guidance for C.A.F.E. Practices to make the criteria more relevant to unique conditions in Africa and Asia Pacific. Also, the need for more locally based support through regional Farmer Support Centers has been confirmed.  In Kenya, Starbucks has been collaborating with the African Wildlife Foundation (AWF) on various sustainability initiatives as a first step toward advancing C.A.F.E. Practices in Africa.

Given our optimistic mindset at Starbucks, we choose to view the barriers outlined above as opportunities for improvement. The amount of time, energy and resources needed to implement and manage C.A.F.E. Practices across such a complex, diverse and sprawling supply chain is considerable – and at times more than we anticipated.

When we first introduced C.A.F.E. Practices, we were inspired and motivated to help create a better future for coffee farmers and their communities, based on a shared interest to sustain the production of high-quality coffee. We did expect the process to involve challenges, but these challenges have not changed our vision. In fact, our vision – and commitment – has only deepened.

Ben Packard is Director of Environmental Affairs for Starbucks Coffee

2 comments
02/15/07
Talking Until You’re Green in the Face
Filed under: Sust. Purchasing
Posted by: Brian Kuehl @ 6:00 am

Environmental Communications Comes to the Fore

By Don Millar, President of The Element Agency (http://www.theelementagency.com/green/)

Today’s broadened concern about the environment has created new opportunities for smart businesses to communicate in a way that connects much more deeply with target audiences than traditional advertising and marketing ever has before.

With every opportunity, however, comes barriers and this one is no different.  The barriers to successful environmental communications include the seeming inability of traditional ad agencies to communicate effectively about meaningful values combined with self-styled green police using blogs to hold companies to account.

But the biggest barrier is probably the old-school thinking of the companies themselves.  A recent Financial Times article referred to green communication as a matter of “corporate hygiene” – a mindset as stuck in the past as a horse and buggy is compared to a hybrid car.

We advise clients to think in terms of opportunity not obligation, in other words, provide authentic examples of environmental progress, then play offense.  This thinking needs to replace defensiveness.

It is also imperative that the communications provide an honest representation of what the company is doing – the public, and even activist interest groups, do not expect perfection nearly as much as they look for sincerity and progress.  

This mindset is a reflection of the fact that the audience for green communications has changed – it’s no longer a narrow, highly motivated niche but a mainstream swath of the public.  Naturally, this means a different message and a higher profile for green attributes.

Understanding this new, broader audience gets to the central point of green marketing today – environmental values should stand at the center of a company’s brand and overall image.  

British Petroleum (BP) is a great example with their “Beyond Petroleum” campaign.  They got out early, put their alternative energy research and development front and center but didn’t pretend they are something they aren’t.

We took the same approach with a Canadian client, Epcor, a power and water producer.  We zeroed in on the great work they do cleaning up water pollution at a high profile site.  This got them important notice from green activists as an innovative and sound approach to the environment on this specific issue, building credibility for future work.

The main thing for businesses today is to move quickly, be authentic and then do what we call “greening their brand” – putting an important, values-based message front and center.

Don Millar is President of The Element Agency a communications, advertising and online firm specializing in environmental communications from offices in New York, Vancouver and Mexico City.   dmillar@theelementagency.com.

1 comment
02/14/07
On the Power of Purchasing and the Potential of 1%
Filed under: Sust. Purchasing
Posted by: Brian Kuehl @ 6:00 am

By Terry Kellogg, Executive Director of 1% For The Planet

At its best, the field of environmentally preferable purchasing can take credit for the birth and development of the natural and organic product market, projected to reach global sales north of $100 billion next year.  On a micro level, it can now boast of significant success stories like the Toyota Prius and EPA’s Energy Star program.  The broader LOHAS (Lifestyles of Health and Sustainability) market paints an even more compelling picture: estimated at $230 billion in the US alone.  

Even with double digit compound annual growth rates for more than a decade, however, the LOHAS market is still seen as largely untapped.   Its remaining potential exists because more than 30% of Americans seem ready and willing to support companies whose values are perceived to be in line with their own.  And to this day there are many categories with underdeveloped values-oriented offerings.

Stories about the LOHAS market over the next two years will be headlined by more mainstream (Wal Mart and GE have already perked up) entrants.  These players will underscore the market’s transition from a niche opportunity to a powerful segment that no company can afford to ignore.

But this market is not cut out for companies with unexamined practices looking to make a quick buck where flush demand coupled with relatively thin offerings has created very attractive margins.  The interplay between conscious consumers and companies hoping to gain their preference has already helped to establish very high expectations for performance standards across a wide range of initiatives.  Ignorance of these expectations could spell disaster for a new entrant.

In looking for a way in, some companies will take a piecemeal approach to reducing their own ecological footprint or developing a more sustainable product line.   There is a tremendous amount of information available to guide such decisions and almost without exception, case studies illustrate a strong correlation between environmental gains and positive business results, particularly in the early stages of adaptation.

Even for the well-informed, however, there remains the challenge of moving effectively beyond low hanging fruit.  Today’s paradigm offers a finite supply of cash positive investments that yield solid environmental gains.  Positioning ahead of the curve requires an appetite for risk that too few companies are ready to embrace.  Thus the critical requirement for additional investments aimed at changing today’s paradigm.
 
A subtly different way to approach the LOHAS market is to ask: how can we as a company maximize our potential to affect change on a macro scale, and how can we do it in a way that best supports our long-term business interests.  Looking through this lens, opportunities will emerge that tightly knit sustainable business practices with overall business strategy.  Theses initiatives will garner the internal resources required for success; and their success will ensure both their longevity and the opportunity for similar efforts down the road.  Many such initiatives will be the same as those surfaced through a purely internal assessment of options.  But overall, they are more likely to maximize returns to both the environment and the sponsoring enterprise.

1% For The Planet (1%FTP) is an increasingly attractive initiative for many companies.  Members of 1%FTP – companies that commit at least one percent of their sales (or the sales from a brand) to environmental causes every year – have grown in number from 90 to nearly 500 in less than two years.  They hail from nearly every sector imaginable, and range in size from billion dollar publicly-traded entities to pre-revenue start-ups and family owned businesses.  They are attracted to the network for a wide range of reasons including connectivity – with other members, with causes they care about and with committed consumers.

1%FTP is a tool that can help address important barriers that still exist in the LOHAS arena.  Because it’s a program that has the potential to be adopted widely (unlike labeling schemes limited to certain sectors) it also has the potential to become recognized and acted on widely.   One Percent also reflects the kind of clear and powerful commitment that easily resonates with a wide audience.  This helps address the challenge of effectively communicating what can be confusing initiatives that lack relevance to enough people.

As a tool to affect change, it is hard to match the potential embodied in purchasing power.  But for the market to work effectively in this regard, a spectrum of meaningful choices must be available with enough information to drive consumer decision-making. The growth of the legitimate LOHAS segment speaks to the steady erosion of these barriers.  One Percent works to align and reward committed companies and activists, two powerful macro-societal change agents.  In doing so, 1%FTP places a significant amount of potential power in the hands of a consumer base that appears ready and eager to use it.

Terry Kellogg is the Executive Director of 1% For The Planet.  Prior to joining 1%, Terry ran Timberland’s Environmental Stewardship department and worked for the renewable energy retailer Green Mountain Energy.  Terry began his career in environmental work at the Greater Yellowstone Coalition in Bozeman, MT.
 

1 comment
02/13/07
Promoting Green Products and Services: Cure for Asthma and Global Warming?
Filed under: Sust. Purchasing
Posted by: Brian Kuehl @ 5:00 am

By Arthur B. Weissman, Ph.D., President and CEO, Green Seal, Inc.

Almost like the Arctic ice breaking up, the public’s awareness of global warming and its responsibility for causing it has broken through dramatically in the past year.  Soon people may realize that the products and services they purchase can affect the climate, their health, or the rest of the living world.  At that point, the continuing effort to promote green products and services may indeed succeed in making the world more sustainable.

For several decades, a small group of quasi-governmental or private national organizations around the world has been quietly promoting a green economy by identifying green products and services.  The tools they have employed typically include developing environmental leadership standards, certifying products and services that meet the standards, licensing use of a seal or logo to certified products and services, and working with institutional purchasers to green their procurement and operations.  In the United States, Green Seal, Inc., has been active since 1989 as the national program (although it is a non-profit organization).  There are now around three dozen such programs around the world, organized through the Global Ecolabeling Network.

Recent Developments and Directions

In the past few years there has been a veritable explosion of interest in certain institutional and industrial sectors in green products, services, and operations.  Environmental standards that received little attention for years suddenly became adopted as the de facto product standards by government agencies and other large purchasers, causing industry to scramble to meet the standards.  For example, Green Seal’s standard for institutional cleaning chemical products was adopted by Massachusetts for cleaning its facilities, then by other States and even US EPA, and last year New York State required all its elementary and secondary schools to be cleaned by products meeting the Green Seal standard or its Canadian equivalent.

Concomitantly, these large public and private institutions are increasingly looking at their entire operations, including their purchasing and facilities management, from an environmental and energy perspective.  In these assessments, the institutions seek available environmental standards to ensure that the products and services they buy and their operational practices are environmentally responsible.  We have had direct experience in evaluating purchasing and facilities management at the World Bank, University of Miami, and other institutions.  They can collectively exert a significant pull on the market in a more sustainable direction.

Lately, this kind of greening of institutions and the supply chain through adoption of environmental standards and criteria has extended to large retailers.  Initially certain retailers like Home Depot and Lowe’s adopted environmental standards and certification for particular commodities like wood, primarily under pressure from advocacy groups.  Now, however, they are increasingly embracing green standards across a range of different categories.  The world’s largest retailer, Wal-Mart, has committed to greening its product line by using environmental criteria or metrics assembled in a scorecard to evaluate each product along with traditional measures of price, performance, and availability.

The big question is whether the use of environmental standards and certification will successfully transition to the consumer world.  Programs like Green Seal were originally intended for consumers, but it was too difficult in the 1990s to break into the consumer market.  Nor is it clear even now whether consumers will truly pay attention to environmental and social considerations in their purchasing on a regular basis.  If they did, consumers could collectively cause an enormous pull toward sustainability.  Consider it like an anti-SUV movement – something like the current fad for hybrid cars magnified many times.

In the meantime, we continue to work primarily in the institutional realm to make products and services more healthful and environmentally responsible.  The health angle on everyday products and services is extremely powerful, and could potentially reach to the consumer level.  In the janitorial industry, for example, there is growing awareness of the effect of building materials and chemicals on human health, particularly with respect to respiratory systems.  Cleaning chemicals themselves are now implicated in the asthma epidemic in schools nationwide, as some products still contain powerful respiratory irritants and asthmagens.

In fact, New York State is sponsoring an update and revision of Green Seal’s environmental standard for cleaning chemicals to ensure that it protects sensitive and vulnerable populations such as children.  We will be working at the frontier of science and its applications to the marketplace in this revision project, because the science behind asthmagenicity and related effects is still uncertain.  We are including nationally-recognized pediatric health experts and experts from such agencies as the Center for Disease Control.  At the end, it is hoped that the revised standard will identify the current environmental leadership products in the market and also those that are specially formulated to protect the most sensitive and vulnerable populations.

Another highly significant area to which these tools could be applied is energy and climate change.  The Federal government’s Energy Star program may be able to guide the consumer market for goods and appliances, and a likely cap-and-trade policy may take care of industrial output.  In between, institutional buyers and facilities will need guidance on reducing their energy and carbon impact.  For example, a current evaluation Green Seal is conducting for The Pentagon includes finding efficiencies in its lighting systems and heating, ventilating, and air-conditioning systems.  Just this one enormous building can yield tremendous savings, but consider the result multiplied thousands of times.  Directing institutions to energy-efficient, low-carbon-impact products, services, and systems could be the next frontier for our programs.

Major Obstacles

Green Seal and its sister programs have faced enormous hurdles over the years, especially from U.S.-based multinational companies that saw us as a threat to their marketing hegemony.  While some countercurrents remain in industry, their blatant opposition from the 1990s is largely past, thanks to the greening movement in Europe and other forces.  Still, promoting green products and services in the U.S. economy and getting environmental standards and certification incorporated on a larger scale are a challenge.

As much as industry, corporate America, and governments at all levels are beginning to embrace green practices – from green building construction and maintenance to green operations and green procurement – on the whole they continue not to consider the environmental effects of their actions.  This is largely due to cultural norms and traditional practice, rather than conscious opposition.  After all, we are all engaged in a kind of cultural revolution in trying to consider and incorporate the environmental aspects of our economic activities, after centuries of paying scant attention to them (externalities largely unchecked).  Institutions tend to take time to change course and incorporate new paradigms, and that is what is happening now.  For some of us the progress is excruciatingly slow, especially given the magnitude and severity of the world’s environmental problems, including loss of species and biodiversity, deforestation and other habitat loss, climate change, and pervasive toxic pollution.

The wild card may be the consumer market.  It is a market where tens of millions of dollars are required to establish brand recognition; where sellers continue to emphasize appearance, price, and superficial performance above all other characteristics; where consumers say one thing and buy another (many more profess to buying green than actually do so); where service providers like hoteliers fear to do anything to compromise what they call guest satisfaction.  Yet, if everything aligns correctly, the consumer market can much more quickly make changes for the better.  In fact, let us declare for once and all that no green product should perform less well than comparable leading brands if the green products movement is to take hold.  The reason the hybrid car is selling is not just that it is environmentally preferable but also that it saves on fuel and drives well.  Nor can we expect consumers to pay more for green products out of altruism or abstract concerns.  That might be the exciting result of large retailers promoting green products:  they can control costs in the supply chain by creating the needed economies of scale.

If industry makes green products that perform as well and are price-competitive, is the battle won?  Perhaps – if we know for sure which products are green.  And that is where we come back to environmental standards, certification, and labeling programs.  Independent, credible groups like Green Seal are striving to provide the technical and evaluative framework for the greening of the economy.  The time is growing more ripe – and more urgent – for both consumers and institutions to embrace this framework.

Arthur B. Weissman, Ph.D. is President and CEO of Green Seal, Inc.

1 comment
02/12/07
Going Green, Buying Green: The Power of Local Government Dollars
Filed under: Sust. Purchasing
Posted by: Brian Kuehl @ 6:00 am

By Michelle Wyman – Executive Director, International Council of Local Environmental Initiatives, USA (ICLEI-USA)

Eighty percent of Americans now live in cities. By 2050, 90 percent will. Cities are also where most of the energy derived from fossil fuels is consumed, where economic and political power is concentrated, where decisions that are felt everywhere are made.  That’s why cities are the places that have the most direct and effective access in the effort to reduce global warming pollution and pioneer sustainable development.

Cities across the country and, indeed, around the world are demonstrating their commitment to sustainable development and climate protection through “green purchasing” initiatives, also known as “sustainable purchasing” or “environmentally preferable procurement.” Doing so also reflects the cities’ commitments to fiscal responsibility, social equity, community and environmental stewardship.

U.S. cites large and small can exercise their significant buying power to have both a direct impact on the market because of the volume of products and services they procure and an indirect impact by spurring similar action across the private sector. They do so while also increasing their bottom line. The growing emphasis on green purchasing presents unprecedented opportunity for the business community.

Think about all the local government facilities in your city: courtrooms, city halls, office buildings, police and fire stations, recreational facilities, parking lots, and libraries. Consider their computers, photocopiers, refrigerators, fax machines and lighting, heating and cooling needs. Cities also deal in landscaping, catering, conferences and meetings as well as vehicle fleets.

If cities choose to make all of their buildings, products and services “environmentally friendly,” it’s dizzying to consider the widespread and long-lasting benefits for our lives today as well as those of our children and grandchildren and for the business community. It’s estimated that replacing 500 incandescent exit signs with ENERGY STAR versions would save $25,700 a year and $208,300 life cycle on maintenance and energy costs and 119 and 1,190 tons of carbon emissions, respectively.

There are plenty of important lifestyle changes that people can and should be making on an individual basis, but the impact of even simple changes at the city level can quickly multiply by the thousands and beyond. Together, U.S. state and local governments spend more than $385 billion on goods and services and billions more to power those products.  For cities embarking on a path to slash carbon emissions, purchasing greener, more energy efficient products and services can make a huge difference. It’s estimated that by specifying energy efficiency in purchasing policies we could cut energy costs in half, not to mention significantly reduce global warming pollution.

Cities aren’t just viewing green purchasing as a one-time cost savings; they are calculating the direct and indirect costs for the full life cycle of products. It’s about how we create, use and dispose of the products. Seattle’s Environmentally Responsible Purchasing Policy directs departments to consider life cycle effects from: pollution, waste generation, energy consumption, recycled material content, depletion of natural resources, and the potential impact on health and nature. This opens even more windows for local governments and for business.

Not only can local governments pack a financial punch at the point of purchase, they can shift the market in favor of energy efficiency. Adopting a formal policy of green procurement sends a message to manufacturers, service providers and the market as a whole: “We’re demanding green products and services. You must supply them.”
Here in the U.S., plenty of cities are establishing or ramping up sustainable purchasing policies.

The city of Chicago passed its own standards for energy-efficient buildings, the Chicago Standard, and the writing was on the wall that new construction and major renovations must achieve the Leadership in Energy and Environmental Design (LEED) standards.

Same thing for Austin, Texas, which in 2000 passed a resolution requiring all public projects larger than 5,000 square feet to be LEED certified.

In Denver, which has launched the “Greenprint Denver” initiative to further encourage sustainable purchasing and other green practices, the Wellington E. Webb Municipal Office Building was built in 2002 to Energy Star qualifications to consolidate 40 agencies and provide the city government with a number of energy saving measures.  In addition, Denver voters approved a $378 million bond in May, 2005 for the creation of a new justice center, which will be built to LEED certification standards. New York City has earned the nickname “the Big Green Apple” by switching all of the traffic signals to energy-efficient lighting (LEDs), saving $6 million a year, and replacing about 200,000 refrigerators in public housing with energy-efficient versions, saving $7 million a year. Cities like Charlotte, North Carolina, and Houston, Texas, are greening their municipal vehicle fleets by adding more fuel-efficient and hybrid vehicles.

By making green choices, local governments can encourage citizens and businesses in the community to follow their lead. After the city moved further along the green spectrum, the private sector in New York quickly followed suit, with green building design becoming the new status symbol. Landmarks of the sustainable building craze include the Conde Nast Building at 4 Times Square, the residential Solaire in Battery Park City and the Hearst Tower.

Of course, making sustainable purchasing choices also enhances the sheer quality of life in communities. It provides direct health benefits for city employees as well as less global warming and air pollution, all of which makes these cities cleaner and safer places to live, work and raise families. Taxpayers can also rest assured that their money is being spent in an efficient manner. As the head of the Commission for a Sustainable London 2012, which is planning a “green” Olympics, said recently, “Sustainability isn’t just about buying recycled paper - it’s about using purchasing power to do some good.”

It’s easy to see why sustainable purchasing practices have taken hold in so many cities.

At ICLEI-Local Governments for Sustainability, we work closely with more than 240 cities in the U.S. and more than 800 around the world working to improve the global environment through local action. We provide resources, tools, and technical assistance to help local governments measure and reduce greenhouse gas emissions in their communities through our Cities for Climate Protection ® (CCP) campaign. We are engaged with ENERGY STAR, a joint program of the Environmental Protection Agency and the Department of Energy designed to alert consumers to more energy efficient appliances and equipment. Through this partnership and our work with cities designing sustainability and climate protection plans, we strongly encourage cities to go green when possible.

As more cities sign the U.S. Mayors Climate Protection Agreement (which commits a city to the Kyoto target of reducing emissions 7 percent below 1990 levels by 2012) and join the CCP, there will be a surge in demand from local governments for green products and services that will help them meet their emissions reductions goals.
The sustainable purchasing movement has grown leaps and bounds in the global market as well. In 2002, the World Summit on Sustainable Development in Johannesburg committed public authorities to “promote public procurement policies that encourage development and diffusion of environmentally sound goods and services.”

ICLEI is a partner in Promoting an Energy Efficient Public Sector (PePS), working with 40 municipalities in Mexico to make green purchasing choices. Mexico’s government sector energy conservation activities began in the early ’90s and have burgeoned into perhaps the broadest government end-use program in the world, impacting hundreds of government facilities. The country’s energy management agency, CONAE, an ICLEI partner which houses our Mexico office, provides a strong example of how limited resources can be leveraged into enormous savings. The Administración Pública Federal (APF) program, for example, is a lighting initiative that has resulted in audits and retrofits in almost one thousand Mexican government buildings.

ICLEI-Canada also serves on the North American Green Purchasing Initiative (NAGPI) steering committee that works to coordinate green purchasing activities, engage other stakeholders and pool information and resources. ICLEI-Europe is leading a collaborative, continent-wide effort on sustainable procurement. This is an extensive effort that includes trainings and workshops, surveys and research, and multi-country partnerships. We recently co-hosted the sixth EcoProcura ® conference in Barcelona, Spain, where 360 delegates from 53 countries gathered to provide a mechanism for dialogue between the private sector and the public sector to advance sustainable product innovation and further promote a market for sustainable products and services.

Despite the enthusiasm for sustainable purchasing, plenty of challenges remain. City staff who ultimately implement these policies require proper training as to the merits of green purchasing and the options available to them. Agencies shouldn’t feel pressured not to procure a more expensive product or service if, when you calculate the associated use and disposal costs, it will actually save the city money. This underlying philosophy – saving money, saving energy, creating better communities – must also become part of the culture within local government.

As with many policies, the scope of local government purchasing makes it inherently difficult to monitor and enforce. Some governments are addressing this through permanent mechanisms and tools in municipal management to ensure unwavering implementation, effective monitoring and continual improvement. Competing laws and bureaucracies can sometimes stand in the way, raising questions as to a city’s authority.  A more centralized system might allow policing of purchasing and blocking undesirable products.

Some vendors and businesses claim they are excluded by green purchasing policies. In reality, they are entering a market of great possibility. Rather than harming industry, sustainable procurement is a market-based tool which provides incentives to stimulate innovation and improve the sustainability of production patterns. As the international regulatory framework and consumption patterns change in the context of current events and demands, sustainable procurement provides an opportunity for companies offering innovative solutions to find markets for their products and to develop further.

The most well-known example is Wal-Mart which announced in the fall of 2005 that it plans to increase fuel efficiency in its truck fleet by 25 percent over three years and doubling it within 10 years; reduce greenhouse gases by 20 percent in seven years; reduce energy use at stores by 30 percent; and cut solid waste from U.S. stores and Sam’s Clubs by 25 percent in three years. Wal-Mart is also now the biggest seller of organic milk and the biggest buyer of organic cotton in the world and is working with suppliers to figure out ways to cut down on packaging and energy costs. Wal-Mart is taking such profound steps because it’s good for the environment, and their investments represent revenue increases and a positive presence in local communities.

The EPA recently ranked Wells Fargo & Co., which uses some 550 million kilowatt hours of renewable energy to light up its financial centers each year, the top buyer of “green” power in the country. The financial giant is among 40 Fortune 500 firms that have committed to doubling their renewable energy purchases this year.

There is clearly a new level of awareness about global warming – President Bush gave it credence in his State of the Union address the day after 10 CEOs from the likes of Duke Energy and General Electric called on the government to address the problem – and a burning desire on the part of the world’s citizens to take action now to curb global warming pollution. This is a desire that only burns hotter with every day. People are making changes in their daily lives and demanding that their elected officials – at the local, state and federal level – make changes on a larger scale.

Local governments have an invaluable role to play in promoting the use of green products, services and buildings. The great thing about green purchasing is that cities don’t have to start from scratch or move toward these goals in isolation. By working together, cities can learn from each other and send powerful and consistent signals to the market. Government organizations find that green procurement policies reduce overall costs, offer significant opportunity to use materials, resources and energy more effectively, improve employee health and stimulate markets for innovative new products and services. With sustainable purchasing, cities can set the pace and lead the way as they have done in so many other aspects of climate protection and sustainable development.

Michelle Wyman is Executive Director of ICLEI-USA

Resources:
Promoting an Energy Efficient Public Sector
North American Green Purchasing Initiative
ICLEI-Europe’s Sustainable Procurement Program
EPA’s Environmentally Preferable Procurement Program
EPA and DOE’s ENERGY STAR Program
ENERGY STAR’s purchasing and procurement information
Center for a New American Dream’s Procurement Strategies Program

4 comments
01/28/07
Welcome!
Filed under: The Green Wave, Sust. Purchasing, Sustainable Finance, Sust. Manufacturing, Sust. Infrastructure
Posted by: Tracy Parsons @ 12:04 pm

Welcome to the official Blog of Turning the Ship: Environmental Transformation of the U.S. Economy.

Starting February 5, 2007 our contributors will be posting their articles here. For detailed information about the program, please visit www.turningtheship.com

5 comments