The Wall Street Journal’s third annual ECO:nomics conference: Creating Environmental Capital wrapped up last week and I’m pleased to report that it delivered on the promise of frank, highly strategic, executive-level discussions. The conference will return next year; here’s hoping that we have some new energy and carbon legislation in place by then and that the focus continues to shift from risk management to more transformative approaches in which sustainability is viewed a business opportunity.
Some parting thoughts from the conference:
The potentially revolutionary
Algae that feed on carbon dioxide, using sunlight to fix the CO2 into hydrocarbons that can be refined into gas and diesel just like what comes out the pump today: can/should they be genetically engineered for enhanced productivity? BP and Exxon are placing big bets on J. Craig Venter’s work in synthetic genomics. Interviewed at the conference, this “life designer” goes beyond biomimicry and creates new organisms though the “software of life,” DNA.
U.S. Energy Secretary Steven Chu, fresh from the inaugural ARPA-E Energy Innovation Summit, was the final and perhaps most anticipated speaker at last week’s ECO:nomics conference. Throughout the conference, regulatory uncertainty had been the greatest complaint of energy execs and venture capitalists alike. In comparison, the recession had up to this point been addressed rather cursorily: while it has certainly sapped financing for potentially disruptive technologies, the established players at the conference largely claimed that they had not reduced their innovation spend.
*image from energy.gov
In the CleanTech space, solar may be hot, the future of the smart grid may be bright, but Ron Gonen, CEO of RecycleBank, is proving that recycling can be sexy too.
At its ECO:nomics conference, the Wall Street Journal announced its first ranking of the Top 10 venture-backed, clean technology companies. The survey “seeks to identify green companies that have the capital, executive experience and investor know-how to succeed in an increasingly crowded field.” CEOs from three of the ten firms—John Baumstark of Suniva, Cree Edwards of eMeter, and RecycleBank’s Gonen—were on hand at the conference for an elevator pitch competition titled “Uncovering the Next Big Thing.” After the pitches and follow-up questions, the audience voted on who they would fund with a hypothetical million dollars. RecycleBank won the three-way race with nearly half of the votes.
Allan Murray, Deputy Managing Editor of the Wall Street Journal, suggests that the Journal started its ECO:nomics conference several years ago largely because of the near certainty of federal carbon legislation. At the third annual ECO:nomics conference this week, prospects for such legislation (e.g., a price on carbon) are murkier. This uncertainty was one of the key themes running through a suite of energy-focused sessions on the conference’s main day. The sessions covered a wide spectrum of the energy sector, from fossil fuels (oil, gas, coal) to renewables (solar and wind); from established electric utilities to young ventures with potentially revolutionary technologies.
For the most part, the traditional energy executives carefully advocated for their place in a diversified energy portfolio and avoided aggressive, competitive comparison to each other. Though it may not have been universally accepted, the prevailing notion that ALL of these energy sources (nuclear included) are necessary in the near future went largely unchallenged. Further reinforcing the coalition-like atmosphere was the general preference, among those who were asked about it, for a national clean energy standard that includes nuclear and clean coal rather than a narrower renewable energy standard. The audience, able to weigh in on several questions via voting devices, tended towards a similar mindset, answering the questions “Can coal be clean?” and “Should America build significantly more nuclear power plants?” in the affirmative 56% to 44% and 66% to 34% respectively. In fact, the only truly feisty debate of the day was between thinkers Amory Lovins of the Rocky Mountain Institute and Michael Shellenberger of the Breakthrough Institute over the low cost potential of renewables and whether energy efficiency reduces or increases consumption (Jevon’s paradox).
With kids as one of its core demographics, The Walt Disney Company is obviously quite interested in what kids care about. Speaking at the Wall Street Journal’s ECO:nomics conference, Disney President and CEO Robert Iger discussed how kids as young as five are becoming increasingly concerned about environmental issues. It doesn’t stop with this “generation green.” Disney, like many other companies, has heard similar concerns from other customer groups, shareholders, and employees (current and potential). According to Iger, addressing the company’s environmental impacts is not only the right thing to do morally but the right thing to do for shareholder value. The business case boils down to brand value, based on the assertion that reputation can drive long-term growth.
But are customers willing to pay more for green products and services? The audience of mostly corporate execs pressed Iger on this several times. I am not aware of any studies that could convincingly challenge the consensus of doubt in the room on this question. However, while acknowledging that many customers shop for value (especially in a recession), Iger challenged the notion that everything that is better for the environment must also cost more. He suggested one way to lower costs on environmentally preferable products is to aggregate buying power, something Disney is beginning to pursue as a member of the Sustainability Consortium with Walmart.
It is a testament to how far the sustainable business conversation has come that new partnerships between large corporations and environmental NGOs are meeting with less and less surprise and skepticism from both the business and environmental camps. Certainly, some actions are still capable of raising eyebrows, such as the Environmental Defense Fund opening an office in Bentonville, Arkansas to work with Wal-Mart. However, the positive impacts of such partnerships on both the economic and environmental bottom lines are increasingly well documented. This is not to say that any given corporation today would immediately recognize the value in or be comfortable partnering with an NGO, but preconceived notions are giving way to a new sense of possibility and we may be nearing a tipping point.
Gwen Ruta, Vice President of Corporate Partnerships at EDF, is co-facilitating a working group session on “Working with NGOs” at this week’s ECO:nomics conference in Santa Barbara. She is interested in gauging the mindset of business executives given the state of the economy and the recent Copenhagen climate summit. In this context, Ruta seeks to continue increasing the visibility and familiarity of EDF to corporate leaders and to broaden EDF’s influence in the private sector.
The Wall Street Journal’s Environmental Capital blog may have closed up shop earlier this year but the name lives on in the Journal’s third annual ECO:nomics conference: Creating Environmental Capital. The event, focusing on the “most urgent issues in business and the environment,” continues to draw a host of prominent executives, venture capitalists, entrepreneurs, policymakers, and nonprofit leaders. Robert Iger, Disney President and CEO, Steven Chu, U.S. Secretary of Energy, and Amory Lovins, Chairman and Chief Scientist of the Rocky Mountain Institute, are among this year’s speakers. The format of frank, highly strategic, executive-level discussions has apparently struck a chord, with many participants returning year after year. Three days in Santa Barbara can’t hurt either.
I will be writing from the conference starting this Wednesday and I invite your comments on what promises to be a stimulating agenda. Against the backdrop of carbon regulation uncertainty and the lingering recession, the 2010 program has a stronger focus on energy than in years past, with a series of sessions on oil, coal, wind, solar, and even genomic approaches to biofuel production. Later, a clean-technology elevator pitch session will feature execs from eMeter, Recycle Bank, and Suniva. New to the lineup this year are working group sessions (closed to the press) on topics ranging from Financing Green Projects to Working with NGOs, in which participants discuss and determine action priorities.
The Millennium Ecosystem Assessment, WWF’s Living Planet Report, and countless other publications testify to the massive and urgent need for change. However, human society has great inertia: even getting people to recognize a problem, let alone agree on a course of action, can be an excruciating process (see the debate over climate change). Although some caution is warranted when it comes to major course corrections, exponential change, feedback loops, and tipping points mean that we have a limited window of time in which to react effectively. As a simplification, we can imagine creative solutions being driven from the bottom-up or from the top-down; this paper discusses the potential of each path. I will argue that the major environmental crises we face require doing both simultaneously though I’m more optimistic for the bottom-up approach given the present political climate.
Several concepts of creativity will help frame this discussion. In arguing for systems theories of creativity, Hennessey and Amabile distinguish between “Big C” (eminent) creativity: relatively rare displays of creativity that have a major impact on others” and “Little c” (everyday) creativity: daily problem solving and the ability to adapt to change.” Innovation then is the implementation of creative (i.e., novel and appropriate) ideas. They also discuss the idea that creative thinking often opposes, rather than advances, existing societal agendas and proposes new ones in their place. This argument echoes Schumpeter’s concept of creative destruction: “that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter considered this process of industrial “mutation” and integral feature of capitalism, of which entrepreneurs were the driving force. Extending the application of these frameworks to the challenge of sustainability is natural, logical and useful. I would also argue that imitation can be a form of creativity to the extent that it results in reinvention. For example, Biomimicry and Crade to Cradle are two design philosophies that re-imagine products and processes by looking to nature for inspiration. Principles like “waste = food” are self-evident in the natural system but have been ignored in human society.