America’s commercial buildings are on the cusp of being radically redesigned into Prius-like hybrid energy centers. These buildings will create value by guaranteeing lower energy bills, plus increased worker productivity, while also delivering climate-changing environmental impacts.
Like hybrid electric cars, this is a global trend. The cost of enabling technologies is falling – driven by global economies of scale. In the U.S., the only question that impacts when “hybrid electric buildings” will be built in your town is tied to the pace of change in utility and regulatory policies that remove the legacy distinctions between energy solutions that sit “behind the meter” versus those supplied through the utility grid.
Hybrid electric building design
Today’s hybrid electric car uses more than 100 microprocessors to collect data that is feed into a smart operating system. These microprocessors integrate traditional gasoline engines with electric generators and regenerative brakes to achieve superior MPG results. The car’s microprocessors also feed information into dashboards, designed to be productivity tools that coach a driver on how their behaviors can reduce costs and emissions.
Hybrid electric buildings will mirror this design. Like hybrid cars, they will have extensive sensor systems – collecting big data that smart systems will use to optimize integrated design components – like rooftop solar, onsite batteries and load-controlling technologies – to achieve occupant comfort, electrical reliability and lower cost.
The top four business buzzwords used today define how sustainable businesses are winning customers in the 21st century. These four key buzzwords (in order) are:
These buzzwords are the building blocks upon which sustainable companies design products, operations and marketing. The following are best practices tied to these four business buzzwords that are proven to win customers:
In the six years since I published my initial research predicting a disruptive and distinctively green economic shift that I labeled the green economic revolution, the global sale of sustainable goods and services is measured in the trillions of dollars. The question is no longer whether a sustainable economy is developing. In 2014, the question is: Which companies will be the revenue growth winners?
20th century’s Commodity Economy hits revenue growth wall
The 20th century commodity economy, built upon commoditizing products and people, has hit a revenue growth wall. The information age has now raised consumer awareness to levels in which they expect products to cost less and mean more. Customers expect “everyday low prices.” Armed with unprecedented awareness through information age technologies, they also expect products to be healthy and responsibly sourced. The commodity economy’s business best practice of slashing prices to ever-lower levels by avoiding or undervaluing externality costs like human obesity and climate change is losing customers and revenues to sustainable best practices that deliver both value and values.
Ford is taking another huge leap toward filling the void created by our lack of a national energy policy with the launch of its new F-150 pickup truck. Ford is stealing the spotlight at the North American International Auto Show by engineering a full-size pickup truck with an aluminum body. This is a bet-the-company move by Ford. The F-150 is both America’s and Ford’s vehicle sales leader. It has been the U.S. truck sales leader for 37 consecutive years. Losing this bet will rank with the Edsel. Winning it will be comparable to the success of the iconic Mustang.
Easing America’s heartland into sustainability
The new F-150 delivers everything America’s heartland loves about pickup trucks. This is a full-size truck. It screams tough. Ford’s technology innovations underpin this visual impression. Its use of aluminum delivers “military grade” metal toughness. They claim their truck beds are now more dent-resistant than past steel trucks.
What an aluminum-alloy body also delivers is lighter weight. Ford claims cutting 700 pounds from last year’s F-150 without sacrificing size. Reduced vehicle weight means increased carrying and towing capacity. It also means higher fuel economy.
In 2013 corporate social responsibility moved from “do good” actions to a business best practice. The following five 2014 CSR game-changers will accelerate the links between profits, environmental responsibility and social good.
1. Climate change economics
Climate change remains the 800-pound gorilla in the room for CSR. The politics of climate change are unlikely to change in 2014. But the path to profits through deployment of proven best practices that cut costs and reduce emissions will accelerate.
Ford just launched a concept car called the C-MAX Solar Energi that is designed to recharge its batteries within 8 hours through the solar cells installed in the car’s roof. The car’s batteries, solar cells and Fresnel lens system are sized to allow the typical commuter to drive to and from work on free solar energy. If Ford is successful in commercializing this technology then the pump price pain of car ownership will be broken. It will also be a global technology breakthrough for reducing urban smog and greenhouse gas emissions tied to climate change.
Three Design Elements
The C-Max Solar Energi is the integration of solar cells, solar-concentrating Fresnel lens and smart software that allows the car to track the sun to optimize solar energy flowing to the car’s batteries. The foundational element in the car’s design is the installation of SunPower solar cells integrated into the vehicle’s roof. These solar cells deliver a higher solar capacity per square foot, can curve to the car’s roof contours and add only a few pounds of additional weight.
The second design element is a carport-like structure holding a Fresnel lens – a series of lenses that concentrate the sun’s rays – sending that solar energy onto the car’s solar cells when the vehicle is parked under the canopy. The third design step integrates the operation of the Fresnel lens canopy with the car through smart software that maintains solar energy focused upon the car’s solar cells as the sun travels through the sky. Working together these integrated design elements will, on-average, recharge the car’s batteries during an eight-hour day.
Corporate social responsibility made the leap in 2013 from being a “do good” corporate responsibility to a best practice for growing profits. During 2013 my articles on TriplePundit profiled businesses and business leaders that successfully won customers and cut costs by making a difference. In 2013, the top five CSR profit-making best practices were:
- Selling affordable, good food
- Winning customers with trustworthy behavior
- Turning trash into cash
- Gaining competitive advantage by deploying clean technologies
- Hiring women leaders
Here are some examples.
Good affordable food wins
The economic reality is that sustainability’s triple bottom line includes planet, people and profit. The great news for businesses and individuals is that there are a growing number of sustainable best practices on how to grow business profits or individual wealth. These best practices have been developed by credible and experienced people. Their best practices are proven to cut costs, reduce environmental impacts and increase human health. Most can be implemented in a relatively short time often without investing a dime.
Five proven sustainable best practices that grow individual wealth
The following are five sustainable best practices proven to put money in your pocket, improve your health and make a difference:
Here’s the easiest and least-costly way to reduce your pain at the fuel pump. Every day we collectively waste four million gallons of gasoline due to low tire pressure.
An estimated quarter of our automobiles and about a third of light trucks (including sport utility vehicles, vans, and pickup trucks) have one or more tires under-inflated by 8 pounds per square inch (psi) or more below the level recommended by the vehicle manufacturer. The fuel waste penalty from under-inflated tires is 1.5 billion gallons per year. At $3.50 per gallon we are collectively throwing away $5.25 billion a year from having under-inflated tires. Drivers with under-inflated tires face increased fuel costs of 12-15 cents per gallon.
Generation Z, the first generation born in the 21st century, will most likely buy a Zero Net Energy (ZNE) home as their first new home purchase. A ZNE home and its promise of low or no monthly utility bills will align with this generation’s fiscal prudence gained from the hard lessons of the Great Recession.
ZNE homes will be designed around information age technologies that will be attractive to this generation, many of whom probably held a smart phone or tablet computer before holding a book. And when this generation is ready to buy their first home, their purchase options will be shaped by emerging public policy like California’s Title 24 building code revisions that target all new residential construction being ZNE by 2020.
What is a zero net energy home?
The simplest definition for a ZNE home is a home that annually generates onsite renewable energy that is equal to its annual energy consumption. Today, this definition is already being achieved by thousands of home owners across the U.S. that have installed rooftop solar systems that generate enough electricity to turn their meters back to an annual net zero. But this current solar path to ZNE ignores the economic and environmental benefits of smart and energy efficiency technologies. It is also being challenged by electric utilities claiming a distortion in the cost allocation of grid services when a homeowner can avoid payment to the utility while still using the grid to supply their home with electricity.
California’s massive building code revisions, called Title 24, target achieving sea-changing growth in energy efficiency investments by eliminating the conflicted and uncertain economics that currently constrict energy efficiency project financing. Title 24 is a huge bet by California that smart, energy efficient and renewable energy technologies can be grown to economies of scale that will deliver price competitiveness. It is also an unprecedented path for sparking growth in a construction industry still recovering from the Great Recession.
If successful, Title 24 will open the door to increased amounts of energy efficiency financing, expanded sources of capital and lower financing costs. If successful, Title 24 will revolutionize the economics of smart building technologies that will reshape America’s homes and offices to be cleaner, smarter, healthier and less costly to operate.
Starting in 2014, California is implementing a tsunami of building code revisions called Title 24. These revised building codes will move California’s residential and commercial buildings toward Zero Net Energy (ZNE). In a ZNE building, the annual energy consumption is equal to its annual production of renewable energy. Under Title 24, all new residential construction is to be ZNE by 2020 with all new commercial buildings achieving this ZNE goal by 2030.
Title 24 moves building design toward “comprehensive building solutions.” This building design approach first focuses upon reducing energy consumption through the integration of smart and energy efficient technologies. The final design step after reducing the building’s energy consumption is to install onsite renewable energy generation like solar panels.
A food earthquake just hit south of the border. Mexico has successfully passed legislation placing an 8 percent sales tax on sugary soft drinks in response to their obesity epidemic. This is a significant public policy threat to the revenues of industrial beverage companies like Pepsi and Coca-Cola. It also raises public policy questions for the U.S. as it struggles with its own national epidemic of obesity and diabetes.
Health care costs expand with waistlines
Mexico and the United States are two of the world’s fattest countries. In the U.S. 31.8 percent of adults are classified as obese. In Mexico, it is 32.8 percent.
Heightened obesity levels increase human suffering. Obesity is linked to type 2 diabetes, coronary heart disease, stroke, hypertension and arthritis. Today, 25 million Americans have type 2 diabetes. 27 million have chronic heart disease. 68 million have hypertension and 50 million have arthritis.
Heightened obesity levels also place a heavy cost burden upon our national economy and family budgets. In the U.S., the cost of treating obesity-related diseases is $48 billion. The Harvard School of Public Health estimates that the added costs of lost work days, increased medical insurance rates and lost wages results in a $190 billion cost impact upon our national economy.
Twitter is about to launch their initial public offering. This public event has brought new focus to the fact that Twitter’s Board of Directors is all male. When Twitter CEO Dick Costolo was challenged on this issue by Vivek Wadhwa, a Fellow at the Stanford University Arthur & Toni Rembe Rock Center for Corporate Governance, Mr. Costolo responded by calling Wadhwa the “Carrot Top” of academic resources. Carrot Top is of course a cringe-worthy red-headed comedian no one wants to listen to. At the risk of being called the “Don Rickles of economists,” I’ll share four documented business reasons (in addition to the obvious ethical argument) for CEO Costolo to have women serving on Twitter’s Board of Directors:
Unilever is a pioneer in the art of winning customers and creating competitive advantage with brand authenticity through their positive impacts upon human and environmental well-being. Their CEO, Paul Polman, has staked his professional career on a strategy that says a business can achieve ambitious financial results by also achieving ambitious CSR results. Their business and sustainability results are establishing best practices in product design, marketing, branding and business operations.
Unilever’s CEO links financial success and sustainability
Unilever has successfully sold its products to 2 billion worldwide households. Most Americans would recognize their products like Dove Beauty Bar or Hellman’s mayonnaise (know as Best Foods west of the Rockies). Their annual revenues are approximately $66 billion. The company’s goal is to grow revenues in excess of $100 billion.
CEO Paul Polman is convinced that “…businesses that address both the direct concerns of citizens and the needs of the environment will prosper over the long term.”