greenfutures No.91 January 2014
Informal fruits Valuing the unofficial life of cities
Includes
EnergyCulture – our latest Special Edition
Why family businesses have a head start in sustainability India’s train odyssey to set entrepreneurs on the right track Energy’s big shift towards a local, low-carbon system
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“The really important thing is not to reject anything”, the American cultural theorist Susan Sontag wrote in an early diary. She was 16, partway through a term at the University of California, and had just been offered a scholarship to Chicago. “When I think”, she exclaims, “that I actually considered not accepting this new experience! How disastrous (though I would never have known!) that would have been –” We’ve all been there, in the gratification of the moment when we realise the value of something we almost didn’t accept. So many things might have prevented us. There’s the inevitable comfort of the familiar, the fear of the unknown – sometimes disguised rather disdainfully as the assumption that whatever it is wouldn’t be worth the effort. The thrill of knowing – after the event – that we were indeed right to push the boat out is tinged by the fear that we so nearly didn’t: for a moment, we peer into the gulf of what is and what might have been, and it churns the stomach like vertigo. Terrified, Sontag determines to “begin by going out and grabbing at experience”. It’s impossible to consume all the experiences on offer. The most positive choice is always a rejection of some alternative. However much we value novelty, and aspire to do things in new ways – to innovate – it takes a good deal of effort to keep spotting the opportunities and make space for them in our lives. It means undoing habits that we have perhaps carefully honed – for maximum efficiency as well as ease. Doing things differently is a risk: it might take longer, cost more, and disrupt our plans and projections. The cost of not doing so, though, could be disastrous – says Sontag, even if it’s a quiet disaster that she envisions, one she may not even have noticed at the time. It’s the anticipation of such a disaster that prompts the CEO of TA Corporation Group, Neo Tiam Boon, to declare he will stay in post for no more than a decade. He’s not worried about missing out himself: he is worried that the company – which he currently stewards on behalf of his family – could miss out without a fresh perspective at the helm [see ‘Family valued’, p16]. Similarly, it’s to build resilience in the face of disaster that the Informal City Dialogues – a collaboration of Forum for the Future, Next City and The Rockefeller Foundation – urges city officials to look outside the safe sphere of regulation, recognising the great social, environmental and economic value of informal networks and services, whether that’s fruit sellers in Bangkok, community-run food gardens in Manila, or garbage pickers in Nairobi [see ‘The unofficial story’, p14]. And it’s to ward against a stagnant system that Greg Barker, the UK energy minister, and Jonathon Porritt champion a new decentralised ‘energy culture’, led by the big 60,000 [see ‘An irrepressible sense of potential’, p20 and ‘Energy plus’, p21]. But fear is not the only impetus for innovation. Many of us also experience the desire to learn and to grow through new adventures. Embracing this desire is both gratifying for individuals, and can prompt the innovation we need to put our fundamental systems on a more sustainable footing. Unleashing this momentum is a main theme in my new book, ‘The Brand Strategist’s Guide to Desire’, available to order from www.palgrave.com.
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Green Futures January 2014
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Contents
Number 91, January 2014
26
6
12 16
19 8
14
37
42 Features
Energy Culture Special Edition
14 T he unofficial story In cities across the world, informal networks are delivering essential services. Ben Goldfarb uncovers their value.
20 A n irrepressible sense of potential Jonathon Porritt reports on the growing momentum of community energy in the UK.
16 F amily valued With their eye on the next generation, family businesses could have a head start in sustainability, finds Anna Simpson.
21 E nergy plus Fiona Harvey examines the benefits of renewable energy for communities.
30 T raining for success An 8,000km Indian train odyssey is equipping young entrepreneurs with the skills to succeed in social business, says Charukesi Ramadurai.
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22 R ise of the energy citizens New business models are transforming the prospects for community energy and revitalising support for renewables. Martin Wright reports.
24 Energy’s big shift The path towards a localised, low-carbon energy system. 26 Tech talk ICT is set to be a big player in distributed energy, says Will Simpson. 28 Farm power Farms and rural communities are providing fertile land for growing renewables, as Tess Riley discovers.
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Briefings
Regulars
Partner viewpoints
The latest in green innovation, including:
35 Sally Uren Three reasons to see brands are a sustainability solution
37 Light freight? Shipping on course for energy efficiency savings Sustainable Shipping Initiative
4 Wind-powered water A desalination plant with a difference 6 Solar-rich state Dubai moves forward on renewables
36 Tomorrow’s leaders Ros Leeming, Parliament Manager, International Fund for Animal Welfare
38 Catching them young Children learn about sustainable fishing Marine Stewardship Council
42 T he Green Futures interview Marlys Appleton, President and founder of Avtaar America, Founder-Director of Avtaar Management Solutions
39 Going local Investigating distributed business models Ecover
10 Riding Le Tube Cycling goes underground in Lyon
47 Feedback Readers respond online, in print and in tweets
40 Asia’s edge Looking east to stay ahead WWF-UK
12 Hacking the future Top five solutions from ‘hackathons’ around the world
48 Jonathon Porritt Escaping the ideological standoff between ‘precaution’ and ‘innovation’
41 A good read Making a sustainable book Arjowiggins Graphic, Pureprint Group
7 Water fight The rise of superhydrophobic materials 8 Natural filters Carbon-scrubber mimics birds and fish
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Briefings
China sunrise China’s installed solar capacity predicted to more than double in 2014 Over the course of 2014, China expects to install a record 12GW of solar power, according to a report by the Chinese Bureau of Energy. That’s more than twice the amount (5GW) solar market research and analysis firm NPD Solarbuzz expects to see installed by the US over the same period. Nevertheless, if the projections are correct both countries will still end up more than doubling their installed capacity to date: by the end of 2013, China’s installed capacity was approaching 9GW, compared to 4.2GW in the US. According to data from the World Resources Institute, approximately 95% of China’s current solar revenue comes from exports. However, increasing domestic demand is beginning to shift the focus of China’s solar industry away from international distribution. As Nathaniel Bullard, Director of Content at Bloomberg New Energy Finance, puts it, “We are seeing a rotation towards domestic Chinese and Japanese demand as drivers of the industry.” Low manufacturing costs, government
Wind-powered water A desalination plant with a difference in Dafeng
China’s first wind-powered desalination plant will go into service before the end of the year, providing 10,000 tons of fresh water a day to the coastal city of Dafeng, 300km north of Shanghai. The plant is expected to supply bottled water as well as feed nearby industrial complexes at the port, and will be powered
the country’s waterways showed that, of the more than 50,000 rivers with catchments of 100 square kilometres counted in the 1950s, little more than 27,000 still exist. Most of these waterways, the research concluded, had been subject to over-exploitation by farms or factories. While northern China has struggled with water scarcity and desertification for centuries, in recent years attention has shifted to coastal cities where rapid urbanisation has taken a heavy toll on water demand. According to the UN, coastal urban conurbations – which now hold 40% of the population and contribute some 60% of the GDP – have a per capita water resource of less than 500m3 per year; the level defined as ‘extremely scarce’ by the world body. China is not alone in looking to renewable energy for long-term water security. Saudi Arabia is the largest producer of desalinated water in the world, accounting for at least 17% of total world output, but, according to the World Bank, it burns the equivalent of 1.5 million barrels of crude oil a day to produce this fresh water. Saudi Arabia plans to invest $11 billion to 2020 as part of the King Abdullah Initiative for Solar Desalination, which aims to gradually convert all desalination plants to solar power, using reverse osmosis. – Peter Shadbolt
The opening of Dubai’s 13MW solar (PV) plant in October 2013, the biggest to date in the region, marks the first step of the second largest state in the oil and gas-rich United Arab Emirates in plans to generate 5% of the country’s electricity from renewable sources by 2030. The plant is the first move under the Dubai Integrated Energy Strategy 2030 plan to diversify away from oil and gas towards more renewables, clean coal and nuclear. The plan includes the creation
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of a giant 40 square kilometre solar park containing both PV and thermal that will eventually have a capacity of 1GW – although even then gas will still account for 71% of the nation’s energy. The first $35 million, 13MW solar PV plant is designed to generate 24 million kilowatt-hours of electricity and will displace some 15,000 tonnes of carbon dioxide emissions a year, according to developer First Solar. It is the first time that OPEC member
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Photo: Ablestock.com/Thinkstock
Reflecting on energy security?
Source: ‘Taking off the stabilisers’, The Economist, 12 October 2013
sector’s prospects. “The cost of solar modules is decreasing and will continue to decrease,” she says. “In a few years, solar will reach grid-parity, thereby realising large-scale deployment.” Changhua Wu, Greater China Director for the Climate Group in Beijing, agrees that “with the technology and the government initiatives, now is the time for solar”. – Josh Bateman
Dubai moves forward on renewable energy targets
350,000
The number of bicycles in sharing schemes in China alone. Asia has the largest number of shared bicycles in the world.
Domestic demand looks skyward
Solar-rich state
Photos: gjp311/iStockphoto/Thinkstock; First Solar
Blowing the salt out of the water
by a large-scale 2.5MW wind turbine producing the 40,000kWh of electricity required each day to power it. This is part of an ambitious programme under the 12th Five Year Plan announced in February 2013 to quadruple the production of desalted water by 2020. While detailed polices for China’s desalination industry have yet to be confirmed, it’s expected that desalinated water producers will benefit from a special Government fund earmarked for the renewable energy industry. China currently produces 180 million gallons of fresh water through desalination every day, with almost 60 conventional plants, but the Government aims to boost this to 800 million gallons a day with the construction of nearly a dozen new 200,000-ton-a-day plants. Despite its commitment to desalination, analysts believe that plants like the one in Dafeng are merely a drop in the bucket in the context of China’s water problems. Of its 668 cities, 400 suffer water stress. “I don’t think it’s very scalable”, said Simon Powell, Head of Sustainable Research at the Chinese investment group CLSA in Hong Kong. “On my numbers, an industrial desalination plant needs 500MW to 1GW of power – that’s a lot of wind turbines.” Meanwhile, China’s accelerated rate of aridity is causing alarm. A recent survey of
initiatives and technological advancements are enabling industry growth in China. Beijing-based Sherry Zhang, a research analyst at The China Greentech Initiative, observes that China is acquiring technological expertise in solar: “Most of China’s manufacturers strategically go out and purchase leading technologies in the world, or through partnerships in joint ventures.” She also expects to see more industry consolidation. “Right now, there are more than 500 companies in the solar space. In the future, you will see fewer solar players, but with stronger capabilities.” However, there are challenges ahead. If supply continues to exceed demand, as has been the case recently, companies will face solvency issues; this will temper the long-term development of the industry domestically. An oversupply will also create problems for the industry globally, particularly in countries with higher labour and production costs that lack the flexibility to lower their pricing strategies accordingly. Even taking into account these challenges, Zhang is bullish about the
Dubai, sitting on 6%, or some 4 billion barrels, of the world’s oil reserves has set out to harness the power of the Middle Eastern sun. But solar panel prices are plummeting, due in large part to China’s massive expansion of its solar PV manufacturing industry, making the plant much cheaper than it would have been even a few years ago. Moreover, it is part of Dubai’s strategy to reduce demand for gas for domestic power generation, with electricity demand set to rise by 5% a year. International friction with Dubai’s neighbour Iran has eased somewhat after the recent elections and talks in Geneva over Tehran’s nuclear ambitions that had foreign ministers from the US and Europe suddenly rushing to Switzerland in the hope of a breakthrough. But tensions remain high in the region, with Egypt back under military rule, no end in sight to the Syrian civil war and renewed violence in Iraq. That so-called geopolitical risk has made the price of oil see-saw, making diversification attractive for oil-rich Dubai. – Jeremy Lovell
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Testing the water
Water fight
Singapore launches tidal turbines and a micro grid test-bed
Superhydrophobic materials could boost efficiency
about enough to power 70 fluorescent light bulbs. Currently, Singapore gets about 80% of its electricity from imported gas. It has steadily been switching to gas from fuel oil under the Singapore Green Plan, first drawn up in 1992, which aims to promote greater environmental sustainability with targets for air quality, energy efficiency, water, waste, health and nature. The Government claims that many of the initial targets set – such as raising carbon intensity by 25% from 1990 levels by 2012 – have already been met. It has now issued more ambitious goals for 2030, including reducing the amount of energy used per dollar of gross domestic product
Guauging the potential for PV and biofuels
MIT scientists have dramatically reduced the time it takes for water droplets to rebound from superhydrophobic materials (water-shedding surfaces). Specially designed macroscopic ridges cause water droplets to split and recoil from the surface, reducing contact times by up to 40% compared with other hydrophobic materials. The research team believes this could help to prevent the build-up of ice on aeroplane wings and water on turbine blades. “If you can make the blades stay dry longer, you get a bump up in efficiency”, says Kripa Varanasi, the Doherty Associate Professor of Mechanical Engineering at MIT, who co-authored a paper on the findings for Nature. The self-cleaning, non-corrosive and non-rusting characteristics of superhydrophobic materials could also keep structures in pristine conditions for greater lengths of time, without the need for environmentally detrimental materials such as detergents or tin and copperbased anti-fouling paint.
by 20% by 2020 and 35% by 2030, from 2005 levels. But it also admits that its scope for renewable power is limited. It has no hydro or geothermal power sources, low wind speeds and limited scope for solar, so every little bit helps. “Singapore has undertaken continual and a diverse range of efforts to explore all energy options and to enhance our energy security”, said S Iswaran, a Minister for Home Affairs, Trade and Industry, speaking at the inauguration ceremony for the Pulau Ubin test bed. “As part of that effort, this micro-grid test-bed will help us assess the reliability of renewable energy sources … [and] to better understand how intermittent energy sources can be integrated into our energy system and electricity market without compromising overall grid stability.” The micro-grid incorporates biodiesel from recycled cooking fuel, supplied by Alpha Biofuels, and solar photovoltaics (PV). In the past the island’s tiny population, numbering less than 100 people, have mainly got their power from diesel generators. Solar energy is one of the more promising renewable energy sources for Singapore, and the costs of the technology are coming down. However, notes Iswaran, challenges include limited land area for solar farms and cloud cover. The Housing and Development Board is testing PV in housing estates, and recently launched its largest solar-leasing tender to date for a company to own and operate solar panels, producing up to 5MWp, on some 125 blocks in Ang Mo Kio, Sengkang, Serangoon North and Buangkok. – Jeremy Lovell
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Photos: Anna Simpson
Source: www.vision2020.info
Smooth sailing: new materials could reduce drag on hulls
infectious diseases: the self-cleaning nature of hydrophobic materials means that water does not remain on them long enough to stagnate. Such superhydrophobic materials could potentially benefit millions of lives, including those of the most marginalised. Varanasi’s team are confident that contact times can be further reduced for their superhydrophobic material by refining the surface textures. “I hope we can manage to get a 70 - 80% reduction”, he says. – John Duffy
Recycling robot reduces waste concrete and water
£17 billion
The amount the UK economy could save per year by 2020 through the reduction of food wasted by households, businesses and the public sector.
Professor Ivan Parkin, Materials and Inorganic Chemistry Professor at UCL, believes they have the potential to be used in a wide range of applications. “They could be used in a new generation of self-cleaning paints, in water transport by reducing friction in pipes and, in the longer term, in superhydrophobic hulls for ships, which would reduce drag and the energy required for transportation.” Presently, the largest obstacle facing the technology is maintaining the strength of the material. The nano-sized rough surfaces needed to repel the water are easily destroyed by even small amounts of abrasion. Despite this shortcoming, the technology has already begun to appear on the consumer market, with companies such as NeverWet producing superhydrophobic sprays. Once perfected, the technology could theoretically be applied to countless objects and processes. It might also lead to improvements in desalination and hygiene by providing cheap, clean drinking water and reducing the transmission of
Concrete progress
Photos: aragami123345/iStockphoto/Thinkstock; ERO
Singapore, Asia’s leading oil trading and refining hub whose main energy source is imported natural gas, is testing a range of renewables with a view to enhancing its energy security. In October 2013 it launched a renewable energy test bed on the tiny island of Pulau Ubin. Then, in early November, it installed two small tidal turbines to sound out the potential for tidal energy in the low currents around its shores. The two prototype low-flow turbines, stationed between Singapore’s main island and the offshore Sentosa resort, will indicate the value of developing larger ones. Their current capacity is so small that, even if everything goes according to plan, they will only generate 1kW per hour of electricity –
Ever wondered where waste concrete ends up? A student at Sweden’s Umeå Institute of Design, Omer Haciomeroglu, has: his ERO Concrete Recycling Robot design [pictured] aims to recycle concrete without producing the waste associated with current crushing machines and hydrodemolition systems. In Europe, the US and Japan alone, over 900 million tonnes of concrete is wasted every year. The ERO concept
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uses water jets to crack the concrete surface of buildings and ‘peel’ it off, which avoids damaging the rebar (steel used to reinforce concrete structures). Concrete that would otherwise end up in landfills is then sucked up and separated from dust and rebar, before being repackaged on site for use in new pre-fabricated buildings. The robot can even scan its surroundings and determine the best route for carrying out the operation. Although other hydrodemolition systems already exist, none claim to be able to recycle the huge amount of water necessary for the process. However, the majority of the water used by the ERO robot would be separated from solids via a centrifugal decanter and used to clean the rebar of dust and rust, ensuring that very little of it is wasted. As Haciomeroglu puts it, “This is meant to be a provocative alternative that would turn the heads of investors and contractors towards truly sustainable concepts.” This new approach to concrete recycling could also pave the way for
more efficient business. “I could buy the aggregate and rebar from your concrete building before you even deconstruct it, which creates a whole new range of future business opportunities.” Haciomeroglu has taken steps to ensure the design is feasible, carrying out extensive research into the background of concrete recycling. Interviews with experts in the field in several international locations, as well as consultations with mechanical engineers, have helped to ensure the project is realistic in its aims. Concrete production already accounts for 5% of annual anthropogenic global CO2 emissions (those produced by human activities), and, by 2050, concrete production is set to be four times the 1990 level. As Jonathon Porritt, FounderDirector of Forum for the Future, has pointed out, “sustainability doesn’t get much tougher than in concrete”. Therefore, innovative designs and concepts like the ERO robot could have a drastic impact on the way we use, and reuse, concrete in the future. – Alex Fenton
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Natural filters
Energetic workout
Filtering efficiency could soar for carbon capture
CO2-scrubbing solution mimics bird and fish biology The lungs of birds and the swim bladders of fish are the inspiration behind a new microvascular filtering system for removing carbon dioxide from the exhaust fumes of electric power stations. Existing carbon dioxide scrubbing solutions rely on considerable amounts of expensive packing, often running down towers of up to 30m in height to ensure a large-surface area for carbon dioxide exchange. The new solution – a gas exchange system made up of small tubes that work in a similar way to blood vessels – draws upon the biological attributes of avian lungs, which have an extremely efficient gas exchange system to support the oxygen requirements of energy-intensive flights. Fish, on the other hand, require precise control over the pressure in their swim bladders to adjust their buoyancy and move up or down in the water column, a technique which the solution also employs. “Biological systems [have] spent an incredible amount of time and effort moving towards optimisation”, says lead researcher Aaron Esser-Kahn, from the University of
California Irvine. “We’re trying to learn from nature.” The research team’s model involves the use of alternating, micro-sized tubes made of porous materials for efficient gas exchange. One tube would carry waste fumes, the other a carbon dioxide absorbing liquid. The greenhouse gas would pass between the tubes and be transported away for appropriate disposal. For optimum effectiveness, the tubes must have the largest amount of surface area possible for exchanging gas. Using computer simulations, the team was able to calculate the effectiveness of the nine possible packing solutions for the gas exchange tubes. Both the hexagonal pattern used by birds and the square pattern from fish swim bladders were very efficient. However, the most effective pattern – two small tubes alternating with each large tube – is not found in nature. Pilot tests show that it is 50% more efficient than the bird lung and swim bladder alternatives. Roger Aines, a researcher from the Lawrence Livermore National Laboratory,
UK gym converts workout energy into building power A health club in Bristol has installed new equipment that harnesses the energy produced during workouts, feeding 100W per hour back into the building’s power supply. The 42 cross-trainers, bikes and treadmills at Cadbury House Club, in Congresbury, are all self-powered: the user’s energy is converted into electricity, with any surplus channelled into the gym’s power supply. It’s one of the first gyms in the world to install the ARTIS Technogym machines, at a cost of £600,000. Technogym claims its ARTIS line is the most energy efficient on the market, with its treadmills consuming 30% less energy than comparable models. Users can also connect their smartphones to the machines to access their individual training programs. Jason Eaton, general manager of the health club, says spiralling energy prices were one of the main reasons for installing the new machines. “In order to avoid having to pass on these increased costs to our members, and keep their fees at a reasonable level, we decided to invest in the Technogym equipment. It’s a win-win situation really.” At the moment, the surplus energy produced by the machines flows is unmetered, making it difficult to tell exactly how much energy is being fed back into the building, and any resulting cost savings. However, Technogym plans to install software that will provide a breakdown of input and output energy for each of the machines in the near future. “This kind of technology is new to the industry, so we’re still experimenting with it at the moment”, says Eaton. However, Dr Tzern Toh, a research associate in electrical engineering at Imperial College, London, is concerned that the cost of retrofitting a gym or installing such equipment can also
calls the work by the Esser-Kahn group “an exciting development” for carbon dioxide capture systems. “Creating surface area is the biggest problem in capturing carbon dioxide”, he says. “There is an enormous amount of gas to be transferred, and it is just too slow if you can’t use a lot of transfer surface – just like a bird’s lung.” The researchers are now looking for ways to improve the efficiency of their carbon capture units by modifying the sizes and wall thickness of the membrane tubes. It may also be possible to modify the filter design to work with other applications, such as car exhaust pipes. – Ian Randall
Counting the cost
Companies are failing to understand the impact operations and supply chains are having on their environmental costs. This is the verdict of the Cambridge Natural Capital Leaders Platform (CNCLP), which has devised an online toolkit to make it easier for companies to measure and report their use of natural capital. Whereas environmental profit and loss balance sheets, first used by Puma in 2011, help to identify environmental challenges – such as soil health, or the availability of fresh water – they fall down on informing companies about the scale of their impact and any associated risks. The E.Valu.A.Te toolkit aims to fill this gap.
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The CNCLP say that the solutions E.Valu.A.Te can prompt are beneficial to both the environment, the future of the business, and current stakeholders. “It [information on natural capital costs] can improve decision-making, stabilise supply chains, save costs, capture new revenue streams and inform strategy”, says Eve Zabey, Natural Capital Manager at the World Business Council for Sustainable Development. “But knowing what to measure, manage and report is far from straight-forward.” By helping companies to review and rethink strategies, E.Valu.A.Te could at least bring a standardised methodology to natural capital accounting, and encourage companies to manage the ecosystems and raw materials they are trading on more responsibly. The alternative, as Liz Murray, Head of Scottish Campaigns and Policy at the World Development Movement, puts it, “brings the complex processes of ecosystems into the market place and leaves them subjected to financial markets”. – Rich McEachran
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Photo: Thinkstock
Getting the measure of natural capital
Launched in November 2013 by the University of Cambridge Programme for Sustainability Leadership, in partnership with companies like Mars, Nestlé and SABMiller, the toolkit takes the form of an interactive practical guide. Companies are given scenarios and – using details about their current operations – can find out how costs related to greenhouse gas emissions, for instance, or water consumption can be reduced. The scenarios work by comparing a ‘business case’ with a ‘counterfactual’ use of natural resources. This allows businesses to assess different management options and the net impact of their activities, relative to an alternative strategy – the impact of the introduction of a new crop or seed variety, for example, or moving from handpicking to mechanical harvesting. Counterfactual scenarios can also include a forest or other natural habitat prior to its conversation into agricultural land, allowing the company to see what kind of eco-system the site would have supported had the conversion not taken place.
Photos: Purestock/Thinkstock; Erika Mitchell/iStockphoto/Thinkstock
New toolkit reveals companies’ natural capital impacts
outweigh the benefits. “The price of electricity is many times less than the cost of the equipment and it may take months or years of electricity savings to recoup the investment.” But Ben Ross, a senior advisor in sustainable energy at Forum for the Future and a Director of Bristol Green Doors CIC, counters: “Successful businesses plan for the long term, and with energy costs predicted to rise for the next 17 years there’s a real business case to invest sooner rather than later.” Moreover, says Ross, this is an exciting opportunity to reconnect people with energy, and create further financial incentives to improve their health: “Once you’ve got your smart phone plugged in and the meters wired to record the energy you generate, you could receive discounts from your membership bill for the electricity you plug back into the system!” Nevertheless, for gyms that do not use substantial amounts of energy for other
purposes, such as air-conditioning, it may soon be possible for such equipment to power the gym when it is in use. Since 2008, The Great Outdoor Gym Company (TGO) has been pursuing a similar idea, installing electricity-generating outdoor gyms at nearly 400 sites. Although each piece of its equipment can generate up to 700W, at a normal workout the average user produces between 50W and 100W. TGO claims a typical set of equipment should generate 1kWh of energy per day, depending on use. Installations of TGO’s Green Heart outdoor gym, which generates electricity that is used in LED lighting, or is fed back into local buildings and the National Grid, are being rolled out across the UK following a pilot in Hull last year. The company has also fitted Sir George Monoux Sixth Form College in Walthamstow with equipment that charges students’ phones while it is being used, and sends surplus energy back into the school. – Koray Yilmaz
Power walking: gym members’ energy
“The smallest actions can lead to the biggest changes, and the smallest people can make the biggest changes” Maya Penn, the 13-year-old CEO of Maya’s Ideas, an eco-friendly clothing and accessories company.
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Riding Le Tube
Off-the-shelf PV
Cycling goes underground in style in Lyon
IKEA rolls-out affordable solar panel package to UK stores
Cycle-friendly innovation is back in style in Lyon. France’s second city’s Vélo’v bikeshare scheme blazed the trail for Vélib in Paris, London’s ‘Boris bikes’ and a host
A different sort of hill view
of other public cycle hire initiatives. Now Le Tube, a new tunnel, gives cyclists, pedestrians and buses their own 2km carfree route beneath the hilly Croix-Rousse. This is no dark, drab or dingy underpass: far from it. Le Tube is a kind of continuous art experience, with sound effects and projected images combining to create a fantasy realm of light. It accommodates three lanes of traffic – a two-way cycle track and sidewalk for pedestrians, as well as a bus lane separated from foot and bike traffic. However, its green sheen is slightly tarnished by exhaust from diesel buses, with potential hybrid replacements still only at the trial stage. The ancillary tunnel that has been developed into Le Tube had to be built due to regulations introduced after the 1999 Mont Blanc tunnel fire; the Croix Rousse road tunnel, which runs parallel, was opened in 1952 and didn’t meet with the new safety requirements. The
Greater Lyon area had the option to build a tube which would serve solely as an escape route from the existing tunnel, but decided to see it as an opportunity to create an innovative new piece of urban infrastructure. It claims it is the longest tunnel in the world dedicated to ‘soft’ modes of transport. Le Tube cost a total of €282.8 million to build, and was opened to the public on 5 December 2013. “This is a world first, and just like with the Festival of Lights [a long-standing annual event, also held in December], we will soon be imitated”, Lyon mayor Gérard Collomb told the assembled French media. It’s not quite the first tunnel of its kind, however: the Tyne Cyclist and Pedestrian Tunnel, which runs for 270m under the River Tyne, opened in 1951. Now Grade II-listed, it’s closed for refurbishment until August 2014, so cyclists seeking an underground ride better head to Lyon for the time being. – Roger East
IKEA is now offering off-the-shelf solar power packages to UK consumers, in a move that could help to mainstream domestic solar power systems. It is the first major retailer to offer a comprehensive home photovoltaic (PV) installation service, having teamed up with Hanergy, a thin-film PV supplier, to produce the package. According to Giles Bristow, Head of Energy at Forum for the Future, “Schemes such as this have the promise to significantly reduce the upfront costs to UK homeowners and make these technologies so much more accessible. Purely by virtue of IKEA offering this bundle in their stores, consumers will see that this technology is ready for the mainstream and available to almost everyone with a well-sited roof (and the ability to follow the flat-pack instructions).”
Will Ikea make roof panels mainstream?
Underground heating
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emissions by 2025, and Islington Council expects the scheme to reduce emissions by 500 tonnes a year. According to Huggins, research by the Trust “has shown that for [a majority] of industrial processes recovering waste heat can reduce sector-level carbon emissions by between 3-7%”. He says that “each year between 10-40TWh is lost from industrial processes alone [and] to put that into context 40TWh is roughly what the entire food, drink and tobacco manufacturing industries in this country uses annually”. He believes emissions could be reduced by 750,000 tonnes a year, a process that further schemes to capture excess heat would help to speed along. – Rich McEachran
Feeling the heat in more ways than one
that is generated, for a payback period of roughly seven years. Research conducted by IKEA suggests the barriers in the solar power mass market have included high initial costs, misconceptions about payback periods, confusion of technical terms and options, and concerns over aesthetics – all of which IKEA claim to address. Hanergy have introduced “the next generation all-black” solar panels to give consumers more choice over their roof’s new look. Joanna Yarrow, Head of Sustainability, IKEA UK and Ireland, sees the scheme as part of IKEA’s ambition to make a more sustainable way of life attractive and easy for as many people as possible: “We’re excited to be able to help customers take positive actions at home for both the environment and their wallets. We know that our customers want to live more sustainably and we hope working with Hanergy to make solar panels affordable and easily available helps them do just that.” The company ran a successful trial in their Lakeside store in July 2013, which now sells on average one PV package a day. Consequently, the scheme was rolled out in their Southampton store on 3 October, with plans for it to become available in all 17 of their UK stores by August. A similar scheme by Better Planet Solar PV Installations provides domestic installations that range from 2kWp to 4kWp, priced from £5,999. Other highstreet retailers such as B&Q and Tesco currently only offer solar heating panels, which are more limited in scope and do not provide access to Feed-in tariffs. – Sejal Patel
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The number of countries to have defined renewable energy targets, up from 118 in 2012. Supporting policies are in place in 127 countries, of which two-thirds are developing and emerging economies. Photos: Ikea
improve the efficiency of boilers, heat pumps and [other] equipment”, explains Paul Huggins, Associate Director of The Carbon Trust. Similar projects have been launched on a smaller scale in Stockholm and Paris. The latter saw heat transferred via a staircase; Paris Habitat, the social housing organisation behind it, said that the project wouldn’t have been possible if it weren’t for this feature, as it would have been too costly to build passages to convey the heat from the metro to the 17 flats. The London scheme provides a further indication that the technology can be replicated successfully. The city hopes to see a 60% drop in CO2
Photos: Clement Saunier/Flickr; ultraforma/iStockphoto
Warming homes with excess heat from London’s Tube A journey on the London Underground is hot and sticky at the best of times. Now, a waste heat recovery scheme hopes to make it worth the sweat by finding good homes for all excess warmth. The unnamed scheme – which has received £2.7 million funding from Islington Council and a further £1 million from the European Union – will capture excess heat from a vent at a Northern line station. From there it will be piped into the council’s Bunhill Heat and Power Centre, which already captures secondary heat generated by a local power station, using it to warm 700 homes in the borough. The added heat from the Underground will provide warmth for a further 500 properties. The project is part of CELSIUS, an EUwide initiative dedicated to implementing practical solutions to smart city heating and cooling. By putting a low-cost and readily available source of heat to good use, the scheme offers a smart response to rising energy price rises and brings a fresh perspective to the growing debate around how best to tackle fuel poverty as winter sets in. “Recovering waste heat and using it to warm incoming air or water can significantly
For a typical semi-detached house, a standard 3.36kW PV system will cost members of IKEA’s free-to-join loyalty scheme, Family Members, £5,700 – considerably less than the £7,000 average price-tag for solar PV systems, according to Which? estimates. The price includes an in-store consultation and design service, as well as installation, maintenance and ongoing energy monitoring to measure the individual home’s energy generation and consumption. The panels will be fitted by Microgeneration Certification Scheme installers – a prerequisite for customers to be able to benefit from Feed-in Tariffs. The average semi-detached householder could earn up to £768 a year from the combination of reduced bills and being paid for the energy
Source: ‘Renewables 2013 Global Status Report’, www.ren21.net
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Butt-free streets
awareness”. Though it didn’t win any prize money at the Boston Cleanweb Hackathon in May, CrowdComfort was awarded the judges’ ‘Most polished pick’ award. EnerNOC, who hosted the event, also invited CrowdComfort to share its offices, and are now using its data to reduce the energy usage of buildings. In addition, CrowdComfort joined the cleantech incubator company North Shore InnoVentures (NSIV) last October, meaning it will benefit from the $60,000 grant NSIV recently received from the Massachusetts Clean Energy Centre.
Vancouver recycling scheme reduces toxic cigarette waste
Cigarette butts are ripe for criticism: they are non-biodegradable, toxic and they litter streets – not to mention the severe health impacts of smoking in the first place. The City of Vancouver and international recycling company Terracycle have taken up the challenge of minimising the problem with an innovative pilot programme. As part of Vancouver’s ambitious green goals, the Cigarette Waste Brigade has installed 110 recycling receptacles on several blocks across downtown areas of the city, with the aim of reducing the level
of butt litter – with environmental benefits. Not only is it keeping butts off the streets, but also out of landfill. Once collected from the receptacles, the toxic waste is recycled. Cellulose acetate extracted from filters is melted down for use in the production of industrial plastics – a process that reduces leakage of toxic chemicals into water streams, and offers a low-carbon alternative to fossil fuel-based polymers. Terracycle, which is funding the project, also sells recycled plastics to supermarkets. Any
tobacco remnants are composted. The programme wants to make cigarette waste easy to collect and recycle and have a wider environmental impact by closing the recycling loop. Its success will depend on encouraging smokers to use the receptacles and educating them about the effect discarded butts have on the environment. “We’ve heard loud and clear from the public that they want more efforts to reduce litter…especially cigarette butts”, says Sadhu Johnston, Vancouver’s Deputy City Manager. “Social media [reaction] and media coverage has been very positive.” Is this the most effective approach to tackling butt litter? Of course, the best way to reduce the number of butts dropped in public would be to prevent people from starting to smoke in the first place, and help others to quit. Yet it’s impossible to stop everyone from smoking overnight, prompts a spokesperson for the David Suzuki Foundation, a science-based environmental organisation which maintains that efforts are needed to address the litter problem in sustainable ways. John Merzetti, organiser of the West End Clean-up project, a Vancouver-based group whose ‘butt buyback’ scheme inspired the pilot programme, says that it is a positive step forward. In addition, he urges that ‘no smoking’ and littering bylaws continue to be enforced. If the programme is a success, Terracycle will look into replicating it globally. – Rich McEachran
2 Recycling Monster is a recycling bin with a twist. A hidden microphone allows it to listen to the sounds items make as they are dropped into the receptacle, and alerts
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Top five solutions from sustainability ‘hackathons’ Hackathons – in which software enthusiasts gather in one place to delve into data and develop social, environmental and public health solutions – are now more popular than ever. Around 1,000 sustainability professionals attended the recent BSR Sustainability Hackathon in San Francisco, for example, to hear the ideas pitched by competing teams. These events benefit from the increasing amount of data now available. For instance, the European Commission recently announced that it will provide open access to environmental data collected by Copernicus, Europe’s Earth Observation System. Such data can provide the impetus
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not only for sustainable solutions but also for enterprise. As one judge at a Chicago Hackathon stated, “Hackathons are a good reminder that mining public data can lead to great businesses.” Here are five of the top solutions to come out of recent hackathons:
data collected can be used to identify where energy is being wasted. Co-founder Galen Nelson describes the app as “a gateway drug to hook people on energy consumption
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1 CrowdComfort, the world’s first crowdsourced thermostat to be developed into an app is now freely available on iTunes. It allows building residents, workers or visitors to report real-time, site-specific comfort levels (temperature wise), and the
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Photos: Ingram Publishing/Thinkstock; Abbie Images/iStockphoto/Thinkstock
Hacking the future
Photos: omada/iStockphoto/Thinkstock; Stockbyte/Comstock Images/Thinkstock; Stockbyte/Thinkstock; TongRo Images/Thinkstock
Vancouver highlights the environmental impact of discarded butts
people when they have deposited something which is not recyclable. The Recyclebots team said during a presentation on the device that their the aim is to “slightly embarrass the user, but all in good fun, to educate them on the right habits”. The idea was awarded £1,000 for coming in first place at the Singapore Clean & Green Hackathon last November, and a further £5,000 for winning the Starhub challenge, which grants the team a Samsung mentorship and development package. At present the project is still in its infancy, but thanks to the funding it has now received it should become a marketable product within the next year. Recyclebots are also working on an accompanying website which will offer further recycling tips. 3 EV Ping is an app for electric vehicle (EV) drivers, which allows them to easily communicate with other EV owners using Quick Response (QR) codes on their dashboards, which can be scanned by smart phones. This should make the lives of electric motorists less stressful by letting them determine whether they should wait in the queue or find another station. It also removes the need to constantly check station availability, asking owners charging their cars to ‘Text me when done’ or tell other EV drivers how long they’re going to be. This allows the app to create a queuing system and suggest other nearby charging points if users don’t want to wait. The hack won the $1,000 first prize at the Hacker League Sustainability Hackathon, which took place
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in California last April, and the resulting app has now gone live. The business is also expanding thanks to its ‘launch, grow, mature’ business model, although at present the app is only available in the US. 4 BikeMe, created during the Great Beijing Cleanweb Hackathon held in July 2013, uses data recently released by Datatang (a Beijing online data sharing platform) to identify well-used long distance commuting routes, and suggest new bus routes. Equally, it can also identify short distance routes that could be improved for walkers and cyclists with additional infrastructure. The potential goes further than this, however. For example, the data could be sold to transport companies, ensuring that they build bike sheds in the right locations. The team plans to expand
on their work by developing an app which recognises people’s form of transport and offers rewards for cycling, thereby encouraging greener travel. When the app arrives, users will also be able to ask it to ‘bikeme’ to the nearest café/shop offering discounts for cyclists. 5 Windshed is a programme created by WattTime that monitors the amount of wind energy being fed into the electric grid at any moment, using data from regional grid operators (currently only in the US). It also highlights when ‘wind energy traffic jams’ are occurring and clean energy is being wasted. This information allows progressive consumers to base their energy use around the level of supply from renewable sources, and shift their consumption away from fossil fuels. The programme is already up and running with the help of $3,500 prize money from the San Francisco BSR hackathon, which took place in November last year; the Windshed website shows the current clean electricity supply in 18 US states. WattTime also plans to encourage wind farms to pay for smart thermostats to be installed in local homes, so that they can benefit from ‘rush hour’ wind energy that might otherwise be wasted.– Alex Fenton
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In cities across the world, informal networks are delivering essential services. Time to recognise their value, says Ben Goldfarb.
A local residents’ committee fought flooding in Bangkok
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Photo: Next City
Baseco, Manila: an 80-square-metre community garden provides fresh veg for locals and customers across the capital
companies: potable water, waste collection, even ambulances. In the global south’s municipalities, these underground economies, unregulated neighbourhoods, and undocumented businesses flourish beneath a regulated veneer. In Lima, Peru, ‘shadow economies’ – from orange juice vendors on bicycle carts to traditional healers peddling bat carcasses – account for 60-70% of total economic activity. In some Asian cities, informal jobs contribute to the production of global commodities like garments, textiles, and sport shoes – employing up to 85% of the workforce. These informal structures don’t just drive economies – they also administer crucial resources and enhance urban resilience. In Accra, Ghana, a patchwork of unregulated urban farms grows everything from cucumbers to papayas, strengthening food security. In Nairobi, Kenya, garbage pickers sort through waste, performing the recycling services that the city disregards. Slum-dwellers all over the world devise innovative ways to obtain potable water, including digging makeshift wells, installing rainwatercollecting cisterns and relying on vendors selling individual plastic bags of water. “These are cities where the government honestly doesn’t do much”, says Will Doig, Next City’s editor for the Informal City Dialogues. “Informal systems are some of the best sustainability systems they have.” For all their nimbleness and ingenuity, informal systems confer hazards as well as benefits. Accra’s
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Photo: B A Raju/Next City
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In October 2011, as rising floodwaters threatened to submerge Bangkok, the Thai Government stumbled. Officials issued conflicting reports and warnings. The city’s governor assured citizens that everything was under control, even as water began to pour into Bangkok’s northern suburbs. The flood’s toll – 815 people dead and $45 billion in damages – was exacerbated by a government that proved unprepared in the face of a crisis. Yet even as the Thai Government was bungling the disaster, Bangkok’s citizens began springing into action. In Sai Noi, a suburb, a local residents’ committee came together to fight the flood with sand bags and water pumps, distribute food and water, and defend the area from looters. Thanks largely to the swift work of the residents’ committee – which collected money from neighbours to buy a new pump, and initiated a system of barter and labour exchange to rebuild homes – not a single resident was killed or injured, and villages were restored in less than a week. Writing in Next City, a media organisation dedicated to connecting cities, the Cambodian journalist Dustin Moasa marvelled that, “With minimal help from the government, the neighbourhood had survived the worst disaster ever to hit Thailand.” The Sai Noi residents’ committee isn’t an isolated success story. All over the world, similarly informal systems and networks are delivering services typically provided by government or big private sector
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Metro Manila, and the Institute of Economic Affairs (IEA) in Nairobi. Between 2012 and 2013, the Dialogues brought together an eclectic group of stakeholders in each city, from government officials in London to slum leaders from South Africa. In early 2013, stakeholders in each city convened to develop ‘futures scenarios’: visions of what the six cities – Accra, Bangkok, Chennai, Lima, Manila, and Nairobi – will look like in 2030. Later, the same groups got together and used those future scenarios to come up with innovations that will help those cities remain resilient against the pressures like climate change and population growth and create a more inclusive city for the informal sector. The innovations range from an initiative that will provide legal knowledge and access to affordable legal support to informal groups in Bangkok to an economic forum for local traders to promote more secured livelihoods of the sector in Accra. The Rockefeller Foundation has awarded generous grants to organizations in each of the six cities as seedfunding for the innovations. As the world’s urban planners gain a better appreciation for the informal sector, some designers are also trying to apply its lessons in developed nations. Baltimore-based architects Kuo Pao Lian and Pavlina Ilieva argue for “self-generative communities”: urban environments that mimic the mixed-use layouts, energy independence and versatility of informal systems. Lian and Ilieva have drawn inspiration from informality in cities like Tijuana, Rio de Janeiro and Caracas when designing urban environments in Baltimore, Dallas and New Orleans. “You’re seeing massive populations [in informal communities] creating their own electricity, collecting their own water, building their own dwellings, educating their own children, against a backdrop of poverty and violence”, says Lian. “We’re not celebrating that situation, but we can learn from it.”
Chennai: illegal sewage channels can lead to polluted coastlines, but eradicating community-based systems isn’t the answer
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As cities develop, governments push informal economies to the edges
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The unofficial story
urban farms are watered with untreated gutter water, perhaps contributing to cholera outbreaks; Nairobi’s garbage pickers burn themselves with chemical waste; and illegal sewage channels in Chennai, India, pollute groundwater and coastlines. In other words, the informal institutions pioneered by the urban poor are boundlessly creative, but they can also create new public health and environmental problems. For this reason – and because governments can feel undermined by informal solutions – such systems are frequently targeted for harassment or eradication, often with ruinous consequences for the people who depend on them. In Johannesburg, South Africa, urban ‘street cleansing’ programs have swept away unlicensed food vendors whose stalls are critical sources of nutrition and income for impoverished families. “As cities develop, governments often try to push informal communities out to the edges, marginalising them geographically, socially and economically – or try to formalise them”, says Jessica Rosen, sustainability advisor at Forum for the Future. That’s a problem, says Rosen, since many of the qualities intrinsic to informal communities – their mobility, their adaptability and their reliance on social networks – are the same ones that make them so valuable. In Bangkok, where state hospitals can’t meet the needs of the city’s eight million residents, a corps of over 4,000 volunteer ambulances acts as a vast first-responder system. Although Bangkok’s ‘body-snatchers’ have been accused of thievery, taking bribes and even witchcraft, Doig warns that simply formalising the ambulances would likely make them less effective. “Ideally you would figure out a way to use the ambulance system’s flexibility and nimbleness to work with the city and the hospitals”, he says. “The goal is to integrate the formal and informal, to let them coexist.” Durban, South Africa, offers a vision for how municipalities might nourish informal systems without suffocating them. For years, Warwick Junction, a sprawling marketplace on the edge of Durban’s inner city, thrived as a hotbed of informal trade – but it was also neglected and run-down. Instead of bulldozing the bazaar, in 1996 the city launched the Warwick Junction Project, an initiative headed by South African architect Richard Dobson that built pedestrian bridges, provided childcare and established buyback programs for cardboard salvagers. Keith Hart, the anthropologist who coined the term informal sector has called Warwick Junction a model for how poor people can “enliven a city centre, generate employment for themselves and expand services” in cooperation with urban planners. Can the success of Warwick Junction be replicated? That’s the question that the Informal City Dialogues, a collaboration funded by The Rockefeller Foundation, with Forum for the Future and Next City, set out to answer. Over two years, this global, multistakeholder project aimed to foster a conversation about the role of informality in creating inclusive and resilient future cities. Crucially, the Dialogues involved six local partners: the African Center for Economic Transformation (ACET) in Accra, Chulalongkorn University Department of Urban and Rural Planning in Bangkok, Transparent Chennai in Chennai, FORO Nacional Internacional in Lima, Ateneo de Manila University School of Government (ASoG) in
Ben Goldfarb is a postgraduate at Yale University and the Editor of Sage Magazine.
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With their eye on the next generation, family businesses could have a head start in sustainability, finds Anna Simpson.
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The flower of youth can be a business asset
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Photo: Ya Kun Kaya Ortigas/Carlos C. Palma/Flickr
Leaders plan for succession well in advance of their exit
For one, the next generation can be primed from a young age, witnessing their family’s values in action around them. Blood ties aside, family businesses often nurture relationships with employees, partners and suppliers over many years, building a culture of trust and loyalty. And, with an eye on the future, leaders start planning for succession well in advance of their exit, long before a typical three-month notice period. What does this long-term approach mean for sustainability? It certainly doesn’t mean every family business is necessarily a leader, but it does mean they are primed to address some key challenges – from strong value chain management and resource stewardship to an appetite for innovation and a clear social purpose. I met Jamie Lim, Regional Marketing Director of the carpentry firm Scanteak, and the daughter of its founders, at the launch in Singapore of new research into succession issues within Asian business families, conducted by Singapore Management University’s (SMU) Business Family Institute (BFI) with a grant from Deloitte Southeast Asia. Lim’s slick and stylish garb is appropriately set off by her 10-month-old babe in arms. “This could be something that she will like”, Lim explains to me: “so we can start investing in her now. In family businesses, young talent can learn the soft skills that they would not learn in any business school. This helps us such a lot. My brother and I were exposed from a young age, going to meetings and so
Photo: DenKuvaiev/iStockphoto/Thinkstock
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Nguyen Binh, a Director and Board Member of one of Vietnam’s most successful enterprises, speaks with pride of his mother. She has held the titles of Chairwoman and Chief Executive of Refrigeration Electrical Engineering (REE) for the past decade, having started her career with the company in the 1980s. For her son, Madam Nguyen is “a true pioneer … decisive and modern”. When he accepted her invitation to join the firm, his motivation was not only “to bring the company to greater heights, continuing her legacy”, he asserts: “I also wanted to help the REE Family grow from strength to strength”. Charles Tan – a second-generation employee of Sunray, one of the largest interior developers in Singapore – tells a similar story: “After my graduation from RMIT University, I returned to the family business. Topmost on my mind was the Chinese proverb […] that I am to remember my roots. Truly, I want to give back to the Sunray Family who supported me.” Businesses can struggle to inspire such commitment among their employees, particularly as more people aspire to flexibility and variety in their working life. Strong values can make a difference to staff engagement and retention, but defining them is one thing – instilling them in the hearts and minds of the workforce another. In this, family businesses (defined as those in which at least two relatives are involved, through ownership and/or management) have a head start, thanks to their intergenerational approach.
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is the key to ensuring the business stays fresh and competitive. “As a CEO I’ve been there for eight years, and I’m not prepared to be there for too long – because sometimes we take things for granted. If we assume we are doing well, we are discouraging new blood and new ideas from coming in. I strongly believe that CEOs should not be at the helm of a company for too many years; maybe 10 years is good enough.” Choosing a successor will only go so far towards ensuring innovation. “In the face of mounting resource and climate-related business challenges, there is a real opportunity right now to groom a pool of environmentally-aware next generation leaders, and equip them with the skills to shift their family business onto a more sustainable path”, says Jie Hui Kia, a Futures Advisor at Forum for the Future, Singapore. If you really want to drive innovation, there’s also a need to invest in research and development. The long-term mindset of family business helps to foster longer-term investment strategies – argues Professor Annie Koh, Vice President for Business Development and External Relations at Singapore Management University, and Academic Director at BFI. “If you don’t have patient capital to wait for ideas to take on a life of their own, there will be no innovation.” Such capital
Kaya toast as Loi Ah Koon used to make it
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To maintain a family business you must be receptive to change
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Family valued
on: we made connections. Now we are connecting with our business partners’ kids, so the second or third generation can continue that network. Normally it would take a long time to build up that rapport with a business partner – but we know that our parents trust them, and we know that their parents trust them, and we probably even met them when we were young…” This approach to relationships has ramifications throughout the supply chain, Lim claims, putting the emphasis on quality and longevity, above cost. “When my parents started they really had to find their sources; some of the suppliers have been with us for 15-20 years, and so it would take a lot more than a better price to convince us to make a transition.” It has also meant that Scanteak looks to the future of the stock: “We now only use plantation teak which means that for every tree cut down, they have to plant another” – a strategy which has been in place for over a decade. When Lim joined the firm, she asked her father for permission to rebrand it for the next generation of consumers, moving away from the traditional aesthetics established through Indonesia’s long history of teak furniture production, and instead focusing on lifestyle. She came up with the concept for an awardwinning television advert, which tells the story of a young boy caught doodling on a table by his father. “The angry father tells him off, only to find that he was scribbling the words ‘I love you Daddy’. Fast-forward to the future, and the father gets the son a desk as a graduation present – with a message engraved on it.” The theme of education is not accidental. “Business families understand that training and development needs are of paramount importance in ensuring success of the next generation”, says Tam Chee Chong, Regional Managing Partner at Deloitte Southeast Asia. Anecdotes of inter-generational learning and mentoring recur, with the younger generation frequently reporting to long-serving employees to ensure their insights and techniques are passed on. Such is the secret behind the success of Singapore’s popular kaya toast (a traditional breakfast served with eggs) brand, Ya Kun. Its founder, Loi Ah Koon, grew up watching his father’s meticulous preparation of the toast, learning “to make sure it was crispy and good”. But does such an emphasis on tradition get in the way of innovation? Not necessarily, the BFI-Deloitte report indicates. In a survey of 83 business families, mostly from Southeast Asia, the research team found that 61% see research, development and innovation as one of their top three priorities for the next three to five years, alongside expanding into new markets and growing new lines of business. “In order to maintain a family business, you must be very receptive to changes and you must be very fluid”, Neo Tiam Boon, the second-generation CEO and Executive Director of property and construction firm TA Corporation Group, told me at the launch event. “There’s no need [for my generation] to maintain the same business that our late father started [specialising in public housing in Singapore]. Innovation, for me, is continuously introducing new ideas into a business. If something has been there for 10 years, it can’t be left unchanged 10 years down the road. You have to be very creative in your designs.” and in meeting requirements.” For Neo, planning his own exit and successor
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They have to live up to the family name in every product or service
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Daughter on a mission: Ruth Yeoh has driven YTL’s environmental agenda
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a big part in inspiring my passion for protecting the environment and growing my commitment to the cause”, she told the publication Green Prospect Asia, recalling in particular the experience of planting trees with her father on the island of Pangkor Laut – one of her earliest memories, and “particularly influential in instilling such values within me”. She also remembers accompanying her father on business trips to New Zealand, where she remarked not only on the country’s natural beauty but also the active role of communities in protecting it. Working to her vision and direction, YTL has set up systems to monitor energy, water, waste effluent, solid waste and consumables, across all its divisions – and targets to reduce its impact. One success story is a 10% reduction in carbon emissions at the YTL Power Seraya plant, through efficiency measures and a switch to less carbon-intensive fuels. Another is the installation of energy meters on the high-speed rail service KLIA Ekspres, which runs from KL International Airport to Kuala Lumpur and in which YTL is a major shareholder – resulting in a 5.3% reduction in energy cost per trip. Ruth’s talent and determination speak for themselves, but it’s difficult to tell whether these measures would have been implemented so rapidly were it not for her influential position in the family. While non-family businesses may not be able to fast-track innovative policies, perhaps by overriding the hesitations of wider stakeholders in the way that a family business can, there are lessons they can learn. The value of nurturing relationships over generations, building both trust among employees and partners and commitment to the company’s social role is certainly one. As the Chinese proverb goes, “If you want one year of prosperity, grow grain. If you want 10 years of prosperity, grow trees. If you want 100 years of prosperity, grow people.” Anna Simpson is Editor, Green Futures.
a greenfutures Special Edition
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Photo: A Journey Through Time V/YTL
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is easier to set aside in family businesses, she notes, which are often privately held, and so experience less pressure to meet shareholder demands or targets set on a quarterly reporting basis. For these reasons – their capacity to fund innovation and their emphasis on social capital – claims Koh, if any business can lead change in sustainable development, a family business can. Moreover, they have an added incentive, she says: “They have to live up to the name of the family in every product or service that bears their name.” This incentive – the family name and its reputation as a brand – drives many family businesses to take both their environmental and social responsibilities seriously, through both corporate policies and philanthropy. “If we look around us, in any part of the world, most educational institutes and hospitals carry family names”, Koh observes. Stephanie Draper, Deputy Chief Executive at Forum for the Future, agrees that family businesses, such as Swire, YTL and Huntsman, have a sense of responsibility and reputation that makes them well placed to lead the charge on social and environmental issues. “At Forum for the Future, we are keen to see this go beyond traditional philanthropy and reach into the heart of the business”, she adds. John Riady, the grandson of the founder of Lippo Group, a major Indonesian conglomerate established in 1950, illustrates the potential. “My father didn’t build all this for me. The word he uses is ‘stewardship’, and this is the word I would also use. It means that the businesses you own, you don’t really own: you are its steward. You have a responsibility to grow it and to also use it responsibly. Hopefully, our businesses can be a blessing for the people of Indonesia.” Riady’s interest in the future stretches well beyond the interests of his family: his personal ambition, he declares, is to train and educate the next generation of Indonesians. He is an Associate Professor and Dean at the country’s leading private university, and oversees BeritaSatu, one of Indonesia’s largest multimedia organisations, owned by Lippo Group. “It’s a country full of inequalities: many people do not have medication, many do not have access to health care”, he explains. “It’s a country without the infrastructure necessary to empower people to be able to do what they can do. I grew up during a time of transition; it was a time of political upheaval and social and sectarian violence. All these experiences have really shaped my views and why I am in business.” Perhaps the most striking (and frequently cited) example of leadership in sustainability among family businesses is the Malaysian infrastructure conglomerate, YTL. The real leader on this front is Ruth Yeoh, who before the age of 30 was driving the environmental agenda within the business as Executive Director at YTL Singapore Pte Ltd and Director at YTL-SV Carbon, an in-house carbon credit and clean development mechanism consultancy that she established to help companies within the group – and also across Malaysia – “go clean and green”. One year after Ruth Yeoh joined her father’s company, in 2005, YTL produced its first sustainability report – two years before the Malaysian stock exchange required any CSR disclosure. Ask Ruth about the roots of her environmentalism, and she points to her father, Tan Sri Francis Yeoh. “[He] played
Energy Culture
The currents connecting people to power
Energy Culture is a Green Futures Special Edition, produced in association with the Low Carbon Hub and the Community Energy Coalition. www.greenfutures.org.uk
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Green Futures January 2014
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Energy plus
“An irrepressible sense of potential” Jonathon Porritt reports on the growing momentum of community energy in the UK. I’ve had the privilege of visiting a number of community-owned sites, both in the UK and abroad, and I’m always left with an irrepressible sense of its potential – not just to mitigate fuel poverty but to raise living standards across the board. After all, it comes with a whole raft of benefits, from opportunities to build social cohesion and create new jobs, as well as to reduce emissions of greenhouse gases. And with share options available for as little as £1 on some projects, with returns of 4% per annum, it’s financially inclusive to boot. So how much energy are we actually talking about, and what impact might it have on the economy? A recent report by ResPublica, ‘The Community Renewables Economy: Starting up, scaling up and spinning out’, suggested that 5.2GW of community renewable electricity is achievable by 2020, or soon after. Independent researcher Rebecca Willis, in turn, cites a potential value of £6 billion to the energy economy. It’s clearly an investment opportunity that is starting to resonate with consumers, with share offers in communityowned schemes regularly exceeding targets well in advance of closing dates. People love the idea that they can take energy matters into their own hands! Community ownership can never be the complete solution to our current energy crisis. We need to shift the entire system onto a more sustainable footing, diversifying our energy sources through renewable energy projects at both large and small scale. But combine community energy with options such as farm-based renewables, and the potential becomes really exciting.
Fiona Harvey examines the benefits of renewable energy for communities.
Photo: Andrew Aitchison/Ashden; Cover photo: jesskatew/Flickr
Jonathon Porritt is Founder Director of Forum for the Future. His latest book, ‘The World We Made’, is available to buy from theworldwemade.com
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Greg Barker, the Conservative energy and climate minister, has championed the idea that more of our energy should be decentralised and low-carbon. With “sufficient financial rigour, affordable expansion [of local energy schemes] is achievable”, he says. “We can build the Big Sixty Thousand.” The prize, he believes, will be “growth, jobs, economic resilience, unprecedented consumer choice, and a cleaner, safer environment – and energy security.” But signs of the ‘Big Sixty Thousand’ taking over the energy reins are still hard to find. Communities represent “a largely untapped source of renewable energy investment”, says James Beard of the Renewable Energy Association. Could greater awareness of the benefits tip the scales? This is the aim of the Community Energy Coalition, a group of 30-plus influential and trusted civic society organisations with a shared vision of community energy at scale in the UK, by 2020. In 2013, the Coalition – whose members include The Co-operative, the National Trust and the Church of England, convened by Forum for the Future – ran the first Community Energy Fortnight to encourage groups to set up their own projects. Giles Bristow, Director of Programmes at Forum for the Future, says, “The value of visible support for community energy from known and trusted organisations can’t be underestimated. With a collective reach of over 16 million members, the Coalition’s ability to raise awareness of the potential is vast.” One of the UK’s most active regions, with excellent solar resources as well as wind, hydroelectricity and the potential for marine energy, is the south-west. There, the sustainable energy centre Regen SW supports 179 community projects, including the Bath and West Community Energy group, which has raised more than £2 million in share offers and installed a range of solar products. Chief Executive Merlin Hyman reports “a huge amount of interest in community energy, and some excellent initiatives”. But, he warns, people must be prepared for hard slog: “Most communities find it takes a great deal of time and effort.” One hurdle is funding. A useful source is the Government’s £15 million Rural Community Energy Fund. This works in two stages, making available up to £20,000 for an initial investigation into feasibility, after which qualifying projects can receive up to £130,000 to support planning applications and develop a robust business case to attract private sector investment. Private funding is also available, from mission-led organisations such
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as Good Energy and Triodos Bank, and increasingly from social impact investment funds, which aim to create returns for communities beyond the balance sheet. For instance, Resonance manages a community share underwriting fund which provides match-funding for projects of up to £1 million. In November 2013, it supported the launch of Leicestershire’s first community energy share offer, which will enable John Cleveland College to install a renewable woodfuel heating system. This will significantly reduce energy costs for the college, support the market for local woodfuel, and give students first-hand experience of low-carbon technologies. Daniel Brewer, Founding Director of Resonance, says, “There is significant opportunity to generate meaningful amounts of energy at a community level: more than individual households could achieve, and yet not enough for major energy companies to afford to spend time on. Underwriting community shares can turn a bunch of volunteers into a viable business, allowing people to invest directly in their own communities, and bypassing the need to get caught up in the opaque mainstream financial system. It’s a catalyst for giving power and autonomy to communities, whatever they want to do – whether that’s more woodfuel heating, or insulating the homes of older people.” Another interesting new development is the advent of crowdfunding, whereby thousands of people contribute a small amount – from a few tens or hundreds of pounds to a few thousand each – to get projects off the ground, and then share in the revenues when they arrive. Julia Groves, Managing Director of Trillion Fund, and Chair of the UK Crowdfunding Association, says: “Crowdfunding is expanding the community of investors from neighbourhoods to nationwide. Whereas, to date, local community projects have tended to raise less than £1 million, crowdfunding has the potential to fund larger scale renewable sources of energy to rival generation from traditional coal and gas-fired power plants.” Money isn’t the only measures of success. For Peter Spark, an energy entrepreneur, there are advantages well beyond the commercial: “Community energy brings people from all walks of life together, working towards a common goal that makes a real difference to their local area.”
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COMMUNITY ENERGY BRINGS PEOPLE FROM ALL WALKS OF LIFE Together
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At key moments in the political cycle, the subject of energy policy lurches back into the headlines. We’re seeing this now, in the build-up to the 2015 General Election – a debate fuelled by the Big Six, once again, hiking up their prices. Cue a political exchange of fire in which politicians fight it out in the media to see who can gain the biggest short-term political advantage, regardless of the long-term consequences for energy policy. Far too many people in the UK seem resigned to being powerless observers in the debate, and unmoved by the horrendous prospect of people having to choose between heating and eating. But while the Big Six battle it out for dominancy in an energy system that has clearly been broken for a long time, throwing in the odd offer of free loft insulation or a low-energy light bulb for good measure, an underground movement with much more promise is gaining momentum. The UK is seeing a surge in community-owned energy, spear-headed by the likes of The Cooperative Group, the National Trust, and the Low Carbon Hub in Oxfordshire, to name just a few. This is a sector replete with opportunities and enthusiasm – as well as commendable perseverance in the face of numerous legislative and policy barriers, political inertia, and supine kowtowing by politicians to the incumbent heavyweights in the industry.
Fiona Harvey is the environment correspondent for The Guardian. More information: ukcec.org
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Carbon Hub raised the finance locally and installed the PV panels. The result is that the Bus Company uses the cheap, green electricity generated by the panels, investors get a fair return, and the Hub receives the payments from the UK’s Feed-in-Tariff (FITs) programme to support local communities to develop their own renewable schemes. This backs the rise of ‘energy citizens’ where locals can buy into renewables, whether it is a community or a corporate scheme. Everyone’s a winner. Like most community renewable programmes, the Hub’s model depends on the FITs – but Hammond is pragmatic about the risk of further cuts. “The other side of the coin is that the cost of the kit – such as solar PV – is coming down rapidly. So financially it still stacks up for us: we can still make it work.” The Hub is also adept at identifying smart financial mechanisms which can boost the returns for local investors. Mechanisms like the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), which provide tax relief on investment sufficient to boost the annual ROI, are “a whole lot better than putting it in a building society”, as Hammond says. Expertise of this sort can make all the difference when it comes to encouraging local people to invest for the benefit of their communities. With the help of the Hub, a group of locals
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Photo: Low Carbon Hub
Getting connected Above: Westmill Solar Co-operative, the largest UK community owned solar farm Right: Switching on of Oxford Bus Company’s solar PV installation
No Finance Director likes a wasted asset. But not everyone is as adept at spotting one as Luke Marion. Marion is FD of the Oxford Bus Company (OBC), and the asset in question is a roof over its main depot. It might be doing a good job keeping the buses dry, but Marion reckoned it could work harder. Vast, sprawling and – crucially – south-facing, it struck him as the ideal site for a massive photovoltaic (PV) plant. The roof could accommodate a system with a peak performance capacity of 140kW – enough to produce a quarter of the company’s total energy needs. At a stroke, Marion realised this could both cut its bills and help achieve its carbon target. But the upfront costs – around £150,000 – “just didn’t stack up”. Which is where the Low Carbon Hub came in. Set up by community renewables expert and sometime government adviser Barbara Hammond, the Hub helps local companies and communities develop renewable installations for community benefit. It works like this. The Hub draws on the expertise of Hammond and its founders – all veterans of Oxford’s community renewables scene. Supported by a £1 million European Intelligent Energy Fund, they partner with local communities to develop, finance and manage renewable energy schemes for community benefit. In the case of the OBC, the business made the roof space available and the Low
Photo: Adrian Arbib
New business models are transforming the prospects for community energy and revitalising support for renewables, too, as Martin Wright discovers.
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An investment worth having Communities setting up a new renewable energy enterprise can take advantage of the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) to make the projects more attractive to investors. These schemes offer income tax and capital gains reliefs. Individuals can benefit from 50% tax relief on the amount invested under SEIS and 30% tax relief on the amount invested under EIS, having a significant positive impact on their overall return.
Power bills have plummeted, says one resident, Lucy Conway: “People used to pay 65p per unit when they were reliant on diesel. Now it’s just 21p.” But it’s not just financial benefits. Eigg has shown what it feels like to be in control. And this, says Giles Bristow, Director of Programmes and energy lead at Forum for the Future, is one of the great unsung benefits of a community energy culture. For most of the UK, by contrast, it’s still early days, says Bristow. “The whole regulatory system – whether it’s about planning, or grid feed-in - is geared to the ‘Big Six’ utilities. It just doesn’t understand community energy.” As a result, local communities continue to face hefty obstacles, such as access to finance for the initial capex. Support to overcome these obstacles, from pioneers like the Low Carbon Hub, WREN or Energy4All, can unleash a whole range of additional benefits, adds Bristow: “Once people own their energy supply, they get more engaged with the whole issue. So they’re more likely to look for ways to cut consumption – especially if they are still relying on the ‘Big Six’ for part of their needs. It has a huge democratising effect.” With the right policy environment, Bristow believes the UK could see 3.5GW of installed capacity which is entirely community-owned. That’s the same amount as both new reactors planned for the Hinckley nuclear plant: “We’re only just beginning to see what happens when people become energy citizens.”
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People like the idea that profits stay local
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Rise of the energy citizens
interested in setting up a micro-hydro scheme at Osney Lock, in West Oxford, were able to raise £600,000 in a share offer in just three weeks. “The Hub was incredibly helpful in offering advice as to how to market the share offer and structure the whole thing”, says Saskya Huggins, Director of Osney Lock Hydro IPS. She calculates that, over the 40-year life of the scheme, they should generate £2 million of income, which can be reinvested in further local community energy work. This kind of local multiplier effect is at the heart of the Hub’s vision, explains Hammond: to work with communities so that the surplus income from renewables can be invested directly in further schemes – or in helping local households become more energy efficient. “That work is much less developed, but our aim is to ‘power up’, by creating new renewable capacity, and then use the income to ‘power down’ by reducing overall energy demand.” Green commitment is the spark for many community energy initiatives, but it’s not compulsory, says Paul Phare, Development Director of Energy4All, a group which helps to advise on such schemes. Many people who decide to invest are motivated as much by a combination of decent returns – which can be as high as 10% annually over 20 years on some wind schemes – as by the thought that they’re doing something for their home territory. “They like the idea that profits are staying in the local area.” The idea of harvesting energy close to home is a motivator, too. Take Cornwall. It’s blessed with a bounty of local resources – such as wind, waves, sun, hydro and biomass. Yet much of its power comes from energy companies far away. Now, a group of local enthusiasts in one Cornish town have formed the Wadebridge Renewable Energy Network (WREN), a co-operatively owned social enterprise which has installed 6.5MW of renewables – including ‘repowering’ a local wind turbine. Over 1 in 10 local adults are members of this Ashden Award-winning scheme: proof that enthusiasm for home-grown energy isn’t restricted to a few fringe enthusiasts. What’s novel in the UK is fast becoming normal elsewhere in Europe. Dutch co-op Windcentrale is just one of many which is attracting investment by appealing both to people’s concern for the planet and their pockets. Its latest offering saw all 6,648 shares in a new wind turbine, priced at €200 each, sell out in just 13 hours. Impressive, but perhaps not surprising given a projected annual return of 8.5%. In Germany, meanwhile, one local energy co-op is even negotiating to buy the Berlin city grid. Others are using local sources such as wind and biogas to pursue a dream of energy independence. Feldheim, just outside Berlin, has even managed to go completely off-grid, cutting its bills by one-third as a result. In Britain, there are rare pockets which the grid never reached, such as the Scottish Isle of Eigg. Until recently, the islanders were dependent on noisy, polluting and increasingly expensive diesel generation. But after buying out their feudal owner, they took control of their power supply, too. Eigg Electric is an Ashden Award-winning community-owned company which supplies over 90% of residents’ requirements through a mixture of solar, hydro and wind – pumping power into a local grid which runs around the island.
Martin Wright is Founding Editor of Green Futures and a Visiting Judge for the Ashden Awards for Sustainable Energy. More information: www.lowcarbonhub.org www.energy4all.co.uk
Green Futures January 2014
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Energy’s big shift
4 million
The number of households which could be powered by existing renewable energy projects in the UK, developed by businesses, communities, farmers and the public sector.
Which path towards a localised, low-carbon energy system?
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0.3%
80% – The percentage of the UK public that wants to reduce the use of fossil fuels and their own energy usage.
In Germany, community energy accounts for 46% of all energy produced from renewables. In the UK this figure stands at just 0.3%.
[Source: UK Energy Research Council]
[Source: European Commission]
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20% Photo: Photos:SCRIBERIA xxxxx
46%
Photos: xxxxx
80%
[Source: Smartest Energy]
550MW
The UK community energy capacity by 2020 on current trends, compared with less than 60MW today. [Source: ResPublica]
9.8%
20% – The proportion of energy which the EU aims to generate from renewable sources by 2020 – more than double the 2010 level of 9.8%. [Source: European Commission] www.greenfutures.org.uk
Green Futures January 2014
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Tech talk
Fast forward The vision of creating districts that act as an ‘internet of energy’ is still a way off. But when it eventually comes to pass, some credit may have to be given to a European Commission project that has already sketched out what Europe’s energy systems may one day look like. The ICT Roadmap for Energy Efficient Neighbourhoods (IREEN), was launched in September 2011 to encourage energy-positive buildings, and eventually whole districts by emphasising the role of technology in delivering energy efficiency at a neighbourhood level. The project has received funding from the European Union Seventh Framework Programme. IREEN was created over a period of two years with the help of over 200 experts representing the ICT, energy and construction sectors across Europe, coordinated by Manchester City Council. It makes a number of recommendations: flexible and pay-per-use pricing schemes; “modular and configurable monitoring control systems” to manage neighbourhood energy services, such as LED public lighting; and using chargeable electric vehicles as storage for microgrids. It also recommends the use of web and mobile applications to engage the local community, and e-learning and gamification to raise awareness of energy usage and encourage participation. Mari Sepponen, an Energy Systems Research Scientist at the VTT Research Centre in Finland who contributed to the IREEN Roadmap, believes early engagement of
Will Simpson explains why ICT will be a big player in distributed energy.
Will Simpson is a freelance writer specialising in environmental resource issues. More information: www.innoz.de
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Berlin’s Micro Smart Grid includes a carsharing station
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Photo: Yao Meng Peng/iStockphoto/Thinkstock
A successful energy system needs to be smart
also in Berlin. “They are both used to create the algorithms”, Toprani explains, “and Motbus also works as a central controlling unit to bring in communication from the smart meters from every producer and consumer.” Central to the successful working of an energy hub is the idea that data surrounding energy generation, availability and use will be shared around the network in order to enhance its efficiency as a whole. This raises a number of contentious issues, not least around governance and privacy. As smart grids become more prevalent, these questions will become more pressing. Toprani believes the role of ICT giants will add fuel to the fire when it comes to managing personal data. Martine Tommis, Co-ordinator of the EU’s ICT Roadmap for Energy Efficient Neighbourhoods (see ‘Fast forward’ p9), shares his concern: “Who owns the data: the company or the individual? The idea is that technology is used to share the data, but with whom?” If the community energy movement wants to avoid hitting a wall, now could be the time to start talking tech.
Photo: Corina Shafer/Flickr
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Question: what do a car-sharing station, an office and a popular TV show have in common? Answer: a smart grid in Berlin. Distributed energy systems require a number of things before they can get off the ground. Some of these are obvious: a level of community engagement and consent is a prerequisite, as is capital investment and a long-term funding model. Another essential but often overlooked factor is digital technology. Quite simply, a successful energy system is unthinkable without the data and algorithms to make it ‘smart’. At present there are estimated to be around 300 smart grid systems in the EU. One of the smallest examples is Micro Smart Grid, a Berlin-based project run by InnoZ, an NGO funded by Deutsche Bahn that promotes decentralised energy production and consumption. It currently has three clients: a carsharing station, an office and the popular television show of Gunter Heir, but is looking to take on another 10 by the end of 2016. At present the grid produces 54kW of solar power in addition to a micro combined heat and power plant and three small noise-reduced wind turbines. Balancing these outputs to ensure the grid runs smoothly, InnoZ’s Energy Economist and Analyst Vipul Toprani explains, depends on significant data crunching and the creation of algorithms. At the moment this happens through the cloud, which just means that the data is sent to two external processing units, Motbus and Mathlab,
all stakeholders is critical in planning an effective energy system: “All too often, city planners just make the plans by themselves without taking the energy aspects of the whole neighbourhood into consideration. There’s a need for more collaboration and information-sharing between planners and energy experts from an early stage. Architects’ plans should be sent to an energy engineer who knows how energy efficient the building is likely to be, how energy efficient the neighbourhood is, and how the building will affect this.” But with so many factors to take into account, where should a planning committee begin? “If I was advising someone who wanted to look at this”, says Sepponen, “I would say the first principle is to minimise energy demand in the area, and the second is to minimise distribution losses. Then you should look at what kind of energy sources could be used, and how you can optimise the energy system. What are the different energy demands within it, and what’s needed to meet them? This strategic thinking – matching the energy sources with demands – is what we really need.” Knowing what to ask is one thing, and who to ask is another. In future, we’ll likely be looking to algorithms. The IREEN Roadmap and Reference Guide offer some answers and are available at www.ireenproject.eu
Europe: on the road to a smart, low energy future?
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Green Futures January 2014
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Farm power
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Photo: Uphouse Farm/National Farmers Union
Almost 40% of UK farmers are investing in renewable energy
such diversification will only become more important to farmers. For Tobi Kellner, Renewable Energy Consultant at the Centre for Alternative Technology, clean energy generation offers a tremendous opportunity: “In some cases, additional income from renewables may be the only way for the next generation to make a farm financially viable.” Individual farmers play a crucial role in developing farm-based energy schemes, but they can’t do it alone – not yet, and not at scale. The National Farmers’ Union has called on the UK Government to broaden its scope of community energy support criteria to include rural businesses that demonstrate a significant level of community benefit. Almost 40% of UK farmers are investing in renewable energy compared with just 5% in 2010 – but they are doing so in spite of the system rather than because of it, says Iain Watt, an energy specialist at Forum for the Future: “While pockets of government are quite supportive, the overall message seems to be that small-scale renewables will only ever play a role at the margins, while all the effort goes towards big centralised solutions. We need to change this mind-set by demonstrating that smaller, community-scale energy can play a substantial role in the energy system.” One organisation doing just this is the National Trust, one of Britain’s largest landowners, which has committed to generating 50% of its energy from renewables by 2020, and has installed around 250 small and medium-scale renewables on its land. It is collaborating with Good Energy on a £3.5 million pilot renewables programme which, if successful, will see 10 times that amount invested. The Trust also works further afield to help communities
develop renewables elsewhere, such as the Anafon Community Hydro Scheme in North Wales. Tim Crisp, Director at Sustainable Charlbury CIC, is adamant that such programmes must direct as much financial and social benefit back to the local community as possible. Sustainable Charlbury CIC was established in 2007 to reduce the carbon emissions of this Cotswolds town. In partnership with Cornbury Estate, which (subject to planning permission) has provided 30 acres of land on a 20year lease, and the Low Carbon Hub, which works across Oxfordshire on carbon reduction projects that benefit communities, it is developing Southill Solar, a 5MW solar farm which members hope will be complete by mid-2014. The Feed-in Tariff and the revenue from the power purchase agreement will provide approximately £85,000 annually for the community (that’s £1.5 million over the life of the project). The projected IRR for investors is 5%, but this could be enhanced through the Enterprise Investment Scheme to 8.5%, and to 12.5% through the Seed Enterprise Investment Scheme. “By making large-scale energy projects community-owned, and returning a financial benefit to the shareholders and to the community at large, Sustainable Charlbury CIC sets a framework for a sustainable local energy future”, says Crisp. It’s clear that some farmers and rural communities already have the skills, land and access to subsidies to enable them to invest in on-farm renewables, thanks in part to support from organisations like the Low Carbon Hub and the National Trust. What they lack is the infrastructure to help them take on-farm energy production to scale,
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as farmer Peter Thompson points out: “I don’t see much stopping farmers becoming energy neutral. The real challenge is enabling farmers to become major generators for their communities and beyond. Buying new plant and machinery is second nature to farmers, so the first step is pretty easy. Supplying others is far more challenging.” This is what we need to work towards. Tess Riley is a freelance environmental journalist and communications consultant. More information: www.forumforthefuture.org/farmpower
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Renewables could make farms financially viable
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Our food system generates roughly a quarter of all global greenhouse gas emissions, in large part due to agriculture’s heavy reliance on fossil fuels. But far from demonising farms, many see them as part of the solution. One reason is farmgenerated renewable energy. In the UK, over 70% of the land area is in the agricultural sector. In China and the US, two of the world’s largest food producing nations, this figure is 55.7% and 45% respectively. Large amounts of land combined with significant volumes of animal or plant waste make farms an obvious place to turn to, not just for food but also for biofuel, solar and wind energy. If we’re going to move towards a decentralised, sustainable energy system, farms and rural communities will play a significant role. Take Nigel Joice, the award-winning Norfolk poultry producer whose farm generates 8,500 tonnes of manure a year. Three years ago, Joice invested a £1.8 million bank loan in an on-farm biomass plant to help meet his goal of turning the farm’s manure into an asset, and – with the addition of solar panels – to become energy-positive. An Environment Agency licence to use poultry litter rather than woodchip to heat the chicken sheds is now bringing Joice closer to realising that vision. Over the last year, Uphouse Farm has cut its gas consumption by 92% and solar panels are expected to reduce its (grid) electricity use by 80% during daylight hours. What’s more, the anticipated eight-year return on investment has been cut in half, thanks to improved feed conversion from the poultry litter. Joice is now earning money through the Renewable Heat Incentive and Feed-in Tariffs. With an increasingly unpredictable climate for crops and question marks over agricultural subsidies,
Photo: loraks/iStockphoto/Thinkstock
Tess Riley finds fertile land for growing renewables.
Biomass and solar bring good returns to poultry farmers Nigel Joice and son
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Training for success An Indian train odyssey is equipping young entrepreneurs with the skills to succeed in social business, says Charukesi Ramadurai.
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Photos: Joseph Bastin/iStockphoto/Thinkstock
Photos: Jagriti Yatra
All mentors must have been running a commercially viable social enterprises for a minimum of 10 years to be selected for the scheme. The Jagriti Yatra team argues that social enterprise is the key to long-term sustainable development in India. This is borne out by a recent report by WWF, ‘Green Game-changers’, which claims that small business and social enterprises in India and other parts of Asia are tackling local and international challenges in a variety of innovative ways, sending “ripples across the globe”. In particular, many entrepreneurs are embracing a concept known as, “Jugaad”, – the creation of innovative solutions to problems using fewer resources [see ‘Frugal plenty’ in the Green Futures special edition India: innovation nation, p4]. However, no matter how frugal they are, in the absence of mentorship and guidance many small businesses struggle to get off the ground. Byzantine bureaucracy, corruption and infrastructural challenges can all take their toll on fledgling operations. In fact, India ranks among the world’s worst countries in terms of encouraging entrepreneurs: 166th out of 183 countries, according to World Bank figures from 2011. A poll conducted by Gallup in 2012 seems to bear this out: nearly half of the 5,000 Indian adults surveyed said that the Government was a significant stumbling block to starting a business, while only 37% of current business owners and 28% of those seeking to start a business said that they knew someone who can offer advice about business management. This is where a project like Jagriti Yatra can make a difference. It helps young entrepreneurs to identify market needs and make business plans, and offers insights into the challenges of starting a social enterprise and the skills needed to keep it economically sound. This process often continues long after the train journey has been completed. In Kapoor’s case, Jagriti Yatra set him up to spend six months at Deoria, a village in Uttar Pradesh, where he leased land and interacted with farmers to understand their lives and their problems. This led to the creation of Jagriti Agro Tech (note the homage in the name), which supplies organic fruit and vegetables online under the brand
I Say Organic; the produce is sourced from farmers in five surrounding states, connecting them directly to markets. Kapoor received Rs.10 million (roughly £98,100) from his family to start the business, which now employees 20 people. The absence of middle-men has allowed him to pay farmers 25% more than market rates for their produce, and he is now in conversation with external investors, promising a five-fold growth of the business. Extended placements like the one Kapoor benefited from are just one of the ways Jagriti Yatra provides follow up support. During last year’s journey, participants were asked to form teams and present business ideas; 15 of these teams were then selected and called for a follow-up meeting session called Biz Gyan Tree (meaning the ‘Tree of Business Knowledge’) in February. Here, mentors helped the teams to refine their business ideas, trained them in formal business plan writing and provided leads for financial investment. Ben Kellard, Head of Sustainable Business at Forum for the Future, says social enterprises need a wide range of skills and knowledge in order to be successful, from the kind of business planning advice that Biz Gyan Tree offers, to guidance in understanding consumer needs. “They also need to learn rapidly in order to refine their offer and business model to ensure it meets the need and makes money”, he adds. “The Jagriti Yatra project is a great example of how to help social entrepreneurs gain these skills and apply them, setting them up for success.” In the last five years, over 225 yatris have started their own social enterprise, and roughly half of them are already established in small towns and villages. “By taking a national perspective, the ‘travellers’ will get insights into how they could grow their enterprises beyond their state borders”, says Kellard. Rema Subramanian, partner with Ankur Capital, an angel fund that invests in social enterprises, including Daily Dump [also featured in India: innovation nation, p7] is also enthusiastic about the scheme: “Most of us lead cocooned lives with our version of problems and solutions. A journey like this opens up our minds to the realities out there.” She isn’t worried about a lack of formal business
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training among the aspiring social entrepreneurs, given that most do not come from business backgrounds. “A sleek PowerPoint presentation or Excel spreadsheets with fancy business plans have very limited value if the entrepreneur has not actually got their hands dirty”, she adds. Aditi Prakash certainly takes a hands-on approach to her business: she makes designer handbags from traditional Indian textiles that have been largely forgotten by modern generations. As Prakash began experimenting with her bags, a friend participating in a trade fair in New Delhi suggested sharing a stall. With the help of a local tailor she managed to make 100 bags, which sold exceedingly well. Prakash now works with three skilled tailors and provides livelihood to dozens of women from the village. Over 400 Pure Ghee handbags, each of them entirely handmade, are sold across the country every month. Prakash’s most recent collection of bags, called Allika (‘weaving’ in the local language), was made by weavers in the south Indian state of Andhra Pradesh. The bags are made solely from organic cotton and organic dyes like indigo, and are one of Prakash’s bestselling ranges. Another collection called Mashru – meaning ‘permitted’ in Arabic – uses a fabric popular among the Muslim community of Gujarat. Since the religion forbids them from letting their skin touch anything made from animals, the fabric is glossy silk on the outside and cotton on the inside. Prakash, a graduate from the National Institute of Design in Ahmedabad, is also passionate about recycling and makes it work for her commercially. “In the name of recycling, people make and sell things which look dull and are poorly finished”, she says. “When I cut the cloth for my bags, my women sort through the bigger pieces and create a colourful patchwork out of it.” These limited edition bags – the Tutti Frutti collection – have also proved popular with her customers. “However,” she adds, “I would never cut out cloth just to make a patchwork bag.” In Bangalore, the Information Technology capital of India, Kuldeep Dantewadia’s organisation, Reap Benefit, works with school and college
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over 225 yatris have started their own social enterprise
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Yatris on the learning journey
When Delhi-born Ashmeet Kapoor, 28, returned to India after seven years in the US, he knew that he wanted to start a social venture based around energy or agriculture. However, this electrical engineer, with a master’s degree in entrepreneurship from Brown University, an Ivy League institution, was also aware of his own ignorance about rural India, having only experienced it from a distance. To remedy this he went on a 15-day, 8,000km train journey across India – the Jagriti Yatra, meaning ‘Journey of Awareness’. For the past five years, this project has been taking 400-450 young people, chosen from thousands of applicants, to 12 destinations in India. On the journey, these yatris (translated as ‘travellers’) meet successful social entrepreneurs, in order to learn techniques which they can apply to their own business ideas. The role models come from a variety of backgrounds: Anshu Gupta of Goonj in New Delhi, for instance, works with clothing for the underprivileged, while Dr. S. Aravind of Aravind Eye Care in Coimbatore provides quick turn-around, low-cost eye surgeries.
Jagriti Yatra: the fast track to success for social enterprises?
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We could come back every night and analyse business plans
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The Barefoot College in Tilonia, Rajasthan, run by Sanjit ‘Bunker’ Roy, a Jagriti Yatra mentor
not really running a business. But we would come back every night and we would have to analyse the business plans of the enterprise we visited. That gave me an understanding of how successful entrepreneurs were doing it.” The journey also gave them an insight into some of the most pressing needs in rural areas of India. “It opened my eyes to the fact that providing a livelihood was more the need of the hour than bringing in services to rural areas,” says Kapoor, “which is why I thought of I Say Organic.” While Dantewadia claims he “came across so many new conversations and perspectives about my country, which I kept thinking over, long after I got off the train. I realised that there was no one right approach to development work.” There is considerable potential for social enterprises in India to foster change, but the problem has always been for such projects to sustain themselves commercially. This is compounded by a cultural hesitation to discuss money matters. However, by unapologetically focusing on this aspect, Jagriti Yatra has provided a platform for participants to see how a social project can work successfully as a business. As Prakash says, “In my business, I always wanted to balance the social and commercial sides because I never saw myself purely as a do-gooder. For the first time, I got a sense of how this is possible.” Charukesi Ramadurai is a freelance writer and journalist from India.
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Photo: Jagriti Yatra
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children to “make green a habit” from a young age. The aim is to encourage students to make an impact on their immediate environment by reducing and managing waste, while using natural resources responsibly. They also help educational institutions – and increasingly corporates who are taking their sustainability aims seriously – to go green. Dantewadia candidly admits that the young people Reap Benefit works with were initially cynical about their approach because “we were talking about concepts like global warming that they could not relate to at a personal level”. However, the enterprise is clearly doing something right: they have now worked with over 60 schools as well as numerous corporate clients. Reap Benefit also designs waste/water management, carbon footprint management and energy optimisation solutions, and helps organisations with auditing. It acts as a consultancy for educational institutions too, training staff in waste, water and energy management techniques. Dantewadia claims his business has evolved in an organic not a planned-manner. Profits from work with corporates and private schools, and sales of environmental products like composting enzymes, are ploughed back into the business, making for a circular business model – an approach that Prakash has also adopted. According to these entrepreneurs, exposure to a business ethos was one of Jagriti Yatra’s biggest contributions to their success. Prakash says, “When I went on the yatra, I was selling bags but
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*Some recent work placements include: Marks and Spencer, Unilever, Friends of the Earth, DEFRA, Sainsbury’s, Islington Council, Carillion, Ecover, Welsh Assembly Government, IIED, Fairtrade Foundation, Green Party, TUI Travel, Innocent Drinks, EDF Energy, Kingfisher, Interface www.greenfutures.org.uk
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SallyUren
Forum for the Future’s Network is a global community of leaders, united by their ambition and capacity to create real and lasting change. For more information, visit www.forumforthefuture.org New to the Forum Network Since the last issue of Green Futures, NewsUK, China Navigation Company, Swire Pacific Offshore , Swire Oilfield Services, Reckitt Benckiser and FareShare all joined the Network and The Crown Estate and BSkyB have accepted the challenge of becoming Pioneers partners!
Johnson Matthey +44 (0)20 7269 8400
Sony Europe www.sony-europe.com
Julie’s Bicycle www.juliesbicycle.com
Swire Oilfield Services www.swireos.com
Kimberly-Clark Europe www.kimberly-clark.com
Swire Pacific Offshore simon.bennett@swire.com.sg
Aimia www.aimia.com
Crest Nicholson Plc +44 (0)1932 580 555 www.crestnicholson.com
AkzoNobel +44 (0)1928 511 695
Cultura Technologies Ltd. www.culturatech.com
Kingfisher becky.coffin@kingfisher.com
Target www.target.com
Alliance Boots Ltd Richard.Ellis@allianceboots.com
Delhaize Group mhellstedt@delhaizegroup.com www.delhaizegroup.com
Kyocera Document Solutions Tracey.Rawling.Church@KyoceraMita.co.uk
Tata Global Beverages www.tataglobalbeverages.com/
Lafarge Tarmac Ltd www.lafargetarmac.com
Taylors of Harrogate Simon.Hotchkin@bettysandtaylors.co.uk
Levi Strauss & Co www.levistrauss.com/
Thomson Reuters www.thomsonreuters.com
L’Oréal USA www.lorealusa.com
Technology Strategy Board www.innovateuk.org
Marine Stewardship Council (MSC) +44 (0)20 7811 3315
Technology Will Save Us www.technologywillsaveus.org
Marks & Spencer Plc PlanA@marksandspencer.com
Telefónica UK simon.davis@O2.com
Mondelez www.mondelezinternational.com
Tesco Plc +44 (0)1992 806 790
NewsUK www.news.co.uk
Tetra Pak Ltd +44 (0)1978 834 018
Nike Inc sarah.severn@nike.com
The CarbonNeutral Company www.carbonneutral.com
OgilvyEarth +44 (0)20 7309 1226 kathleen.enright@ogilvy.com
The Coca-Cola Company www.coca-colacompany.com
AMEC +44 (0)1912 726 128 Arjowiggins Graphic jeremy.taylor@arjowiggins.com ARMOR SA Sean.LOFTUS@armor-group.com Ashden +44 (0)20 7410 7023 Aviva Investors +44 (0)20 7809 6000 Azaria International priyanka.kripalani@azaria.in +91 22 2285 6161 www.azaria.in Bank of America Merrill Lynch +44 (0)20 7996 2054 Barclays Bank Plc www.barclays.com Benchmark Software +44 (0)1458 444 010 Blue & Green Tomorrow alex@blueandgreentomorrow.com simon@blueandgreencommunications.com www.blueandgreentomorrow.com
Delphis Eco +44 (0)20 3397 0096 www.delphisworld.com Diageo Plc carolyn.panzer@diageo.com eBay Inc lmay@ebay.com Ecover +32 3 309 2500 www.ecover.com EDF Energy +44 (0)7875 110 289, darren.towers@edfenergy.com Ella’s Kitchen and Earth’s Best sarah@ellaskitchen.co.uk EnergyDeck www.energydeck.com Energy Saving Trust +44 (0)20 7227 0398 www.energysavingtrust.org.uk FareShare www.fareshare.org.uk Finlays +44 (0)20 7802 3239
Panasonic UK Ltd +44 (0)1344 853 325 PepsiCo UK & Ireland Andrew.Slight@pepsico.com
Firmenich SA +41 227 802 435
PHS Group emmawood@phs.co.uk www.phs.co.uk
FirstGroup Plc Kate.Broome@FirstGroup.com
Plexus Cotton Limited +44 (0)151 650 8888
Food and Drink Federation +44 (0)20 7420 7132
Pret A Manger Ltd +44 (0)20 7827 8888
FoodTrade ed@foodtrade.com
Pureprint Group +44 (0)1825 768 811
Bupa +44 (0)20 7656 2343
GlaxoSmithKline www.gsk.com
Quintain Estates and Development Plc rbeeson@quintain.co.uk
Burberry Limited +44 (0)20 3367 3100
Green Ink s.chater@greenink.co.uk www.greenink.co.uk
Rail Safety and Standards Board +44 (0)20 3142 5380
Bowman Ingredients www.bowmaningredients.co.uk BP Shipping www.bp.com/shipping BSkyB daniella.vega@bskyb.com BT Plc +44 (0)7730 426 189 Eric.Anderson@bt.com
C&A philip.chamberlain@retail-sc.com Cafédirect +44 (0)20 7033 6056 Capgemini Ltd +44 (0)870 904 5761 Cargill +44 (0)1932 861 916 Carillion Plc +44 (0)1902 316 258 Certis Europe www.certiseurope.co.uk Chi Group www.chigroup.co China Navigation Company simon.bennett@swire.com.sg City of London +44 (0)20 7332 1431 ClimateCare +44 (0)1865 591 000, business@climatecare.org www.climatecare.org
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GrowUp +44 (0)7862 259 566 www.growup.org.uk Hammerson www.hammerson.com Heineken UK +44 (0)1432 345 277 HSH Group www.hshgroup.com IGD +44 (0)1923 851 919 Ingersoll Rand www.ingersollrand.com Innovia Films +44 (0)1697 342 281 Interface Europe Ltd +44 (0)20 7490 3960 Jaguar Land Rover fleedham@jaguarlandrover.com John Lewis Partnership +44 (0)20 7592 4413
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Reckitt Benckiser Group Plc www.rb.com Rexam Plc John.Revess@rexam.com www.rexam.com Royal Dutch Shell Plc +31 610 974 798 RSA Insurance Group Plc www.rsagroup.com RWE npower +44 (0)1793 892 716 Sainsbury’s Supermarkets Ltd helen.ireland@sainsburys.co.uk SC Johnson www.scjohnson.com Shell Foundation www.shellfoundation.org Skanska +44 (0)1923 776 666 Small World +852 2799 3998 www.interiorsourcing.com
Three reasons why I see brands as a sustainability solution.
The Co-operative Group www.co-operative.coop The Converging World wendystephenson@theconvergingworld.org The Crown Estate Sustainability@thecrownestate.co.uk www.thecrownestate.co.uk The Jordans & Ryvita Company Ltd +44 (0)1767 319 415 Triodos Bank +44 (0)117 980 9770 TUI Travel Plc +44 (0)1293 645 911 Twin jessicafrank@twin.org.uk, www.twin.org.uk Twinings www.twinings.co.ukU-Ming www.uming.com.tw/ Unilever Plc Karen.Hamilton@unilever.com +44 (0)20 7822 5917 United Biscuits Alice_Cadman@unitedbiscuits.com United Coffee Hazel@unitedcoffeeuk.com www.unitedcoffee.com University College London s.chesters@ucl.ac.uk Veja aurelie@veja.fr Virgin Unite www.virginunite.com Volac +44 (0)1223 208 021 Whitworths www.whitworths.co.uk Willmott Dixon Ltd +44 (0)7814 003 046 WWF-UK +44 (0)1483 412 395
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Photo: Nick Woodford/Forum for the Future
ABF Plc Rosalyn.schofield@abfoods.com
Colep UK Limited grant.coupland@colep.com +44 (0)1427 858491 www.colep.com
Are brands the problem or the solution when it comes to creating serious change? At Forum for the Future, we look for levers we can pull to bring down some systemic barriers to sustainability. I’m definitely in the camp that sees brands as a lever, rather than a barrier. Why? Partly because I think the box of potential solutions to our current sustainability crisis is a bit on the empty side. But mostly because I think brands have the potential to shift systems. ‘How on earth can brands do that?’, I hear you cry. In three ways. First up, brands can lead, and create demand, when hitherto there was none. Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses”. Brands have the ability to give people what they want before they know they want it. They also have the ability to normalise behaviours, expectations and desires. Take the story of shampoo. Before the advent of indoor plumbing, washing hair was inconvenient and happened only about once a month. Instead, women brushed their hair a hundred times a night to spread natural oils and remove older, excess oil and dirt. In 1930, Dr John Breck of Springfield, Massachusetts, developed one of the world’s first pH-balanced shampoos. At first it was known only in New England in the US. Then Breck’s son Edward took over the company. He hired an illustrator named Charles Sheldon to draw pastel portraits of ‘Breck girls’. It was a stroke of branding genius that made Breck shampoo synonymous with beauty. By the 1950s, most middle-class women washed their hair once a week. In the 1970s, Breck girls migrated from illustrations to real people, including models, and brands began running highprofile campaigns to convince women to wash their hair every day. As a result of daily shampooing, women washed the natural oils from their hair, which created the need for this new stuff we call conditioner. Granted, the story doesn’t shine with sustainability lustre, but it shows the power of brands to change the way we behave. Mike Markkula, one of the first investors in Apple, came up with the Apple Marketing Philosophy. “The idea of understanding a consumer’s needs before they actually needed what Apple was making has remained a hallmark of the company throughout its history. The idea of empathising with a consumer before a market was even developed
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set Apple on the path of perpetually looking forward to find how people would behave.” Just imagine if this brand magic was applied to the challenge of creating demand for sustainability. There are already successful examples out there. Method, for example, has redefined the relatively boring cleaning category into one festooned with good looking and safe products. Second, brands can bring long-term research and development ambitions to life. Many businesses have an R&D pipeline, but bringing those future insights into the development of today’s products can be challenging. By asking how might my brand deliver these future innovations – in a way that resonates with my consumers’ (often anticipated) needs, brands can act as the super-highway for product innovation. Take Unilever’s Pureit, a water purifier for domestic use in those countries where unsafe drinking water is still the norm. The innovation behind this simple device comes from Unilever’s R&D laboratory in Bangalore. The brand is the mechanism which brings this potentially life-saving device to market. Third, brands can create the conditions for wider change. This is an emerging area, and one which is potentially the most game changing. Nike’s business strategy is all about shifting to a closedloop business model. Such a model isn’t possible today: the infrastructure simply isn’t in place. How can Nike create the conditions to be able to make that shift over time? For one, its free Making App encourages designers to use the Nike Materials Sustainability Index Database, giving them the information they need to see the environmental impact of material choices. This is helping to drive demand for sustainable materials by empowering designers to make better choices. And then there is Launch 2020, an open innovation competition to find game-changing solutions to sustainability challenges that can scale in two years. So, brands can create demand, bring innovations to market, and influence the world around them. Clearly, one brand can adopt all three strategies, or switch between them depending on the market and product. But a brand unwilling to experiment with any of these strategies, in my view, will become a brand from the past, not a brand that can last.
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It was a stroke of branding genius
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3M www.3m.com
Sally Uren is CEO, Forum for the Future. @sallyuren
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Pressure points
Light freight?
Ros Leeming recently left the UK Government to lobby for change from the outside. She tells Katie Shaw what she hopes to achieve.
Skyscraper-sized vessels and industry-wide initiatives point shipping towards a sustainable future.
Currently: Parliament Manager at the International Fund for Animal Welfare Class of: ‘07-‘08 Individual leader I most admire: David Attenborough, for his quiet leadership and ability to connect people with the environment in a way that they find entertaining and fun Organisation I most admire: The National Trust, for its understanding that sustainability is always a journey and you can only lead at the pace that people are prepared to follow.
I’m looking forward to having opinions again During my time in the Government, I tried to take society, the environment and economics into account in equal measure – but that’s not always the most appropriate approach as the reality is that trade-offs must usually be made. Any one department will have multiple objectives that it’s trying to achieve, and you have to hope that one won’t negatively impact the other. As a civil servant, you look at everything through your
Government officials need data Government officials usually aren’t experts on their policy area. One of the things that surprised me most going into the Government was that one person may have worked on, say, pensions, transport and agriculture. Their strength is being able to walk in with no prior knowledge and, within two weeks, be able to talk about a subject as if they know it really well. Because of this, officials need others to provide data and evidence if they’re going to change a policy. A lot of people don’t realise that the Government needs a lot of the information to come from stakeholders, so they only provide rants, and miss out facts that could support a change in policy. You get a lot of protestors outside the DECC office making vague demands. I used to think, “Give me three key actions that you’d actually like us to do.”
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I’m looking forward to having opinions again – being subversive, even
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Ros Leeming
I don’t believe in reincarnation I always wanted to work on climate change, because I believe that we’re here only once, and I feel a huge moral burden. I had been focusing on climate change, on the basis that it seems irreversible, but of course this also applies to species extinction. So that’s why I chose to make the change from working on the Energy Bill team at DECC to working here, at the International Fund for Animal Welfare.
analytical standpoint and are obliged to be unbiased, but the trade-offs mean that conviction is needed, and this is the job of ministers. I’m looking forward to having opinions again – being subversive, even.
Forum for the Future’s Masters in Leadership for Sustainable Development has shaped the career of some of the most ambitious and influential people working for a desirable future. www.forumforthefuture.org/masters
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Photos: Maersk
Tomorrow’s leaders
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environmentally friendly way. In 2012, The China Navigation Company voluntarily adopted a policy to send vessels only to yards with verified accreditation issued by a reputable, independent third party against all industry standards, as well as preferably being an ‘A’ member of the International Ship Recycling Association – going beyond legislative requirements. As Simon Bennett, General Manager for Sustainable Development, CNCo, says, the harm caused by ship recycling yards with poor health, safety and environmental standards “can be mitigated by a commitment from shipowners to not support those yards commercially”. It’s this kind of innovation that the Sustainable Shipping Initiative (SSI), a cross-industry coalition formerly facilitated by Forum for the Future and WWF, now a standalone charity, seeks to support. Ship-owners, charterers, operators, shipbuilders, engineers, marine financiers and supply chain managers recently met in Singapore for the launch of its ‘Case for More Action’ report, which details the practical tools the shipping industry can use to reduce its environmental footprint. Helle Gleie, leader of the SSI, remarks, “From new vessel types, and new financial models to propulsion through kites and bacteria-based fuels, it is clear that the maritime sector is driving innovation. Our new tools and our recommendations for future action will accelerate this even further.” – Duncan Jefferies
The Majestic Maersk can carry 18,000 twenty-foot containers, but with a lighter footprint than other sea giants
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It’s the most energy efficient container vessel ever made
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I worked in the Government to understand the system I understood going into the Government that, while civil servants can champion evidence-based policy making, it is still a world that revolves around four-year cycles and political agendas. I worked there to understand the way in which decisions are made, and my plan was always to eventually move on and use this knowledge to press Parliament and the Government effectively. I’ve seen a lot of good and bad lobbying, and I’m looking forward to sharing and applying what I learnt during my time in the Government.
Stand the 400m long Majestic Maersk on its stern and it would tower over the roof of the Empire State Building (381m). As the world’s largest container ship, it can transport roughly 18,000 twenty-foot containers, or around 182 million iPads – one each for every person in Brazil. A single link from its anchor chain weighs 500 pounds. It’s the first of a new generation of Triple-E class ships, a name which is derived from the class’s three design principles – economy of scale, energy efficient and environmentally improved. Maersk has ordered 20 of these vessels, costing $190 million each. Fuel-saving and emission-reductions features account for around $30 million of the price tag, though the Majestic still gets through 21,200 gallons of fuel per day. To put this into perspective, a Boeing 747 burns approximately 36,000 gallons of fuel over the course of a 10-hour flight, while the typical car gets about 25 miles per gallon. So despite having a large C02 footprint (3-4% of global emissions), shipping is still the least environmentally damaging way of transporting freight, emitting 3g of C02 for every ton of goods transported 1km. Rail, by comparison, emits 18g of C02 per ton. The cost of installing fuel-saving technologies will be dwarfed by savings made over the ship’s lifetime; using the Clean Cargo Working Group’s methodology, which measures grams of C02 emitted per container moved 1km, it is the most energyefficient container vessel ever made. It uses 20% less fuel than the previous holder of the title, the Emma Maersk, and 50% less than the industry average on the Asia-Europe trade lane. The ship’s U-shaped hull creates more space in the cargo holds for containers, while an unusual ‘twin-skeg’ design – two engines, each driving a separate propeller – allows the ship to run more efficiently at slower speeds, using fewer propeller revolutions and distributing pressure better than the Emma Maersk’s single engine system. A waste heat recovery system has also been included in the Majestic to reuse energy from the engines’ exhaust gas for extra propulsion, reducing fuel consumption by around 9%. The remainder of the Triple-E vessels that Maersk has purchased should feature even more efficiencies, says Signe Bruun Jensen, Global Advisor, Maersk Line Environment & CSR, as “the pace of innovation is so rapid”. All the materials used to build the ships have been documented in a ‘cradle-to-cradle passport’ to ensure they are reused or disposed of in an
For more information on the SSI visit ssi2040.org or email info@ssi2040.org
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Catching them young
Going local Ecover asks what a distributed business model really means.
MSC-labelled fish is on the menu at 4,000 UK primary schools
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MSC is a Forum for the Future Partner. www.msc.org
www.greenfutures.org.uk
Photos: Digital Vision/Thinkstock
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Over the past three years, more than 30 in-store campaigns have also taken place around the world in conjunction with major retailers, resulting in a 500% increase in sales of MSC products. Contract caterers like Compass and global restaurant chains such as McDonalds have also made large-scale commitments to the MSC label – the latter introducing it in all of its European restaurants and 14,000 US sites. While the MSC is keen to engage with consumers of all ages on sustainable consumption, according to Michel Kaiser, Professor of Marine Conservation Ecology at Bangor University, “if one is to affect behavioural change you need to take the long term view and realise that it is the next generation that will be most receptive to these messages”. Indeed, a recent survey of 4,000 US adults by the Natural Marketing Institute found that the percentage of Generation Y who “buy as many green/eco-friendly products as they can” had risen to 36% in 2012 from 31% in 2009. And from going into primary schools and talking to children, MSC staff have seen first-hand how the generation that follows on from Gen Y intuitively understands the importance of this issue too. MSC-labelled fish is now on the menus at some 4,000 primary schools across the UK, supplied via the local authority, which chooses what’s on the school menu. Many of the contracts they can select from include the option to serve sustainable fish. However, some local authorities are stopping their support for central catering contracts, while academies are being encouraged by the Government to make their own healthy eating standards. Because of this, it is more important than ever to ramp up the MSC’s Fish and Kids project and reach more schools. Launched in 2006, Fish and Kids encourages schools and restaurants in England to serve sustainable, MSC-labelled seafood. It gives children, teachers, parents and caterers the opportunity to find out why choosing sustainable seafood is vital for the future of fish, fishing communities and the environment. With the help of Murdock, the friendly, sustainable fish-eating cat and mascot for the project, the scheme is able to communicate with children on their level, teaching them about the food chain from boat to plate and responsible consumption. Moreover, by engaging with young consumers while they are still living at home, the MSC is also engaging with their parents: a child’s knowledge and enthusiasm about sustainable fishing should encourage the rest of the family to support it too. – Charlotte Owen
Photos: Zute LightfootAlamy
Tucking into a sustainable school dinner?
According to the Food and Agriculture Organization of the United Nations (FAO), approximately 87% of the world’s fisheries are overexploited or fully exploited. In fact, the fleet needs to be as much as one third smaller in capacity if we want our oceans to continue to teem with life. Consumers have an important role to play here: by making more responsible purchasing decisions, they can help to drive change within the fishing industry. Buying Marine Stewardship Council (MSC) certified seafood directly rewards well-managed fisheries for their sustainable practices. The more MSC-labelled, demonstrably sustainable produce bought, the larger the market for certified sustainable seafood becomes. If they want to tap into this market, fisheries operating below the MSC standard will have to reduce their environmental impact and acquire MSC certification, thereby adding to the number of sustainable fisheries in operation. “Eventually, we hope that every wild-caught fish will be able to bear the MSC label”, says James Simpson, Communications Manager at the MSC. “It’s going to be a long journey, but we’re making significant strides: 10% of the world’s wild-captured fish are already in the programme.” To make this figure 100%, more consumers will need to understand what the MSC label means. Fortunately this is happening. In September 2012, an independent survey carried out on behalf of the MSC found that 30% of consumers who buy fish at least once every two months are aware of the MSC ecolabel for sustainable and well-managed fisheries – up from 23% in 2010. What’s more, over 9% of all respondents were able to accurately describe, without any prompting, what the MSC ecolabel stands for, as opposed to 5% in 2010. “There’s a rise in interest right across the board”, says Simpson. “We’ve also seen a huge increase both in terms of the number of mentions of sustainable fishing online and in print, and the amount of people interested in sustainable fish and related issues. It’s becoming something people are really interested in.”
You’re an international company in an otherwise heavily centralised sector, and you want to ‘go local’. First things first: what does a distributed business model even look like – in terms of manufacturing, sales and branding? That’s the question the ecological cleaning products brand Ecover is boldly trying to answer – a frontier few businesses have broached. To find out, Ecover has launched Glocal, a pilot project in partnership with Forum for the Future to explore producing cleaning products using local materials and local manufacturing methods. Find a commercially viable way of doing so, and the Glocal team will have developed a new business model for the bio-economy. According to Tom Domen, Long Term Innovation Manager at Ecover, this pioneering work has significant potential: “Glocal is helping us envision a model in which Ecover goes beyond producing and distributing globally to become a knowledge centre and a catalyst for local production and local businesses.” Ecover is running a pilot project in Mallorca, the geography of which – a manageable size, clearly defined boundaries, part of the EU – makes it a perfect testing ground to explore potential scenarios. The team has mapped all the available sources of biological materials – or biosources – particularly focusing on waste streams, to work out viable ingredients for the three selected pilot products. Ecover is investigating the opportunities presented by satellite data to map biosources globally in the future. In Mallorca, the team is experimenting with turning the selected materials into products such as peroxide bleach – a natural bleach unlike toxic, commonly used chlorine bleach – and soap, with guidance from Mallorcan locals, including a peroxide bleach expert. In parallel, Ecover has been investigating local packaging and distribution options. The ideal scenario is that the packaging is made locally to the high standards set by Ecover. In spring 2011, the company implemented the use of PolyEthylene, a green plastic made from sugarcane affectionately known as Plantastic that is 100% renewable, reusable and recyclable. Taking this to a local level, however, is not simple: diverse waste collection models, reclamation systems and reuse cultures are just some of the complications. Not a company to fall at the first hurdle however, Ecover is committed to working through issues like this. And solutions are beginning to emerge. For example, a shop in Mallorca sells detergents out of big barrels from which customers re-fill their own bottles – and can even add different fragrances to the mix. A closed-loop system isn’t impossible to envision in the longer term. So what have they learnt? Most importantly, says Domen, the need for ongoing experimentation in order to understand specific local conditions. A
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neat illustration of this is the commercial viability of any new cleaning products in Mallorca, an economy underpinned by tourism. The odd visitor may be happy to buy an expensive soap, but for hotels – which constitute most of the market – price is key: any local product must compete on price with cheap imports. The opportunities presented by a Glocal business model go beyond supporting local economies. Current production of cleaning products depends on a diverse and complex value chain, exposing the manufacturer to resource scarcity and uncertainty. By turning to local areas, mapping their resources, making use of ‘waste’ products and putting an idiosyncratically local stamp on the final product, there are opportunities to strengthen Ecover’s resilience as a business. The rise of distributed manufacturing technologies makes such a vision possible. According to Anna Warrington, Principal Sustainability Advisor at Forum for the Future, exploring new, sustainable ways of manufacturing is critical across the business spectrum: “Given the challenges we face, civil society and investors are looking for companies to deliver something revolutionary rather than just evolutionary. Once we have captured the learning from Ecover’s pilot project and established a long-term vision, we can start to work out how this might be scaled up elsewhere.” A fundamental question is branding, which Effi Vandevoorde, Corporate and Legal Affairs Manager at Ecover, believes is key to ensuring an ethical company such as Ecover lives up to its market expectations: “There has been lots of innovation in waste and packaging in recent years but it’s the stuff inside the bottle that’s key. We want to create a product working in partnership with the local areas where it will be used – not at their expense. Is it an Ecover product or a Mallorca product? It’s both. That way we live the values of our brand.” – Tess Riley
Mallorca: sun, sand and locally produced cleaning products?
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Mapping local resources could strengthen ecover’s resilience as a business
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Tomorrow’s consumers learn the importance of sustainable fishing.
Ecover is a Forum for the Future Partner. www.ecover.com
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Asia’s edge
A good read
Western companies should look east to stay ahead, says Dax Lovegrove of WWF.
The World We Made aims to be the most sustainable book of its kind ever produced.
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Solar panels beneath the Shanghai Bund skyline
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Photos: Arjowiggins
Dax Lovegrove is Head of Business, Sustainability & Innovation, WWF-UK. www.wwf.org.uk
Photos: iStock/Thinkstock
There’s a major opening for western firms with cleantech solutions
arise from efforts across Asia to address pollution, congestion, resource scarcity and other challenges. China is set to spend over $500 billion in the next five years on renewables, energy efficiency and cutting air pollution, and this presents a major opening for Western firms that can bring cleantech solutions to the continent. The massive expansion in on and off-grid renewable energy in India and China presents new avenues for Western renewables providers, whose expertise can complement Asian home-grown initiatives. Californian-based Solaria is such a business establishing operations in China. When it comes to improving air quality, firms such as Terra Motors seek to electrify the tuk tuk, which could make a huge contribution to cutting smog in Asian cities. And BioLite, which used to provide equipment solely for camping, now provides clean cooking stoves for export to replace polluting ones. Western businesses can build on Asian interests in frugal product innovation, bringing new approaches to business models. For instance, the car-sharing services brought by Zoom to India help to leapfrog car ownership and cut congestion and pollution. Collaborative consumption solutions that are increasingly being tested out in the West could accelerate the dematerialisation of eastern systems. The green economy has much to offer to those firms that make the most of Asian-Western innovation flows. Go to www.wwf.org.uk/innovation to see WWF’s new collection of stories and insights in this space.
It’s often assumed that e-books are the most environmentally friendly form of the written word, but that’s not necessarily true. As shown by the production of Jonathon Porritt’s new book, The World We Made, a paper-based book that is sustainably designed and printed can have less of an impact on the environment than an electronic equivalent; it all depends on what criteria we use to define their sustainability. Jonathon’s book is written from the perspective of Alex McKay, a history teacher looking back from the year 2050, reflecting on the technological, environmental and social challenges that had to be overcome to create a world that works for the majority of people. As Jonathon says, “A brilliant, fairer and genuinely sustainable world is still available to all of us by 2050 – if we start making it happen right now. So it was particularly important for me to leave no sustainable stone uncovered when producing, creating and manufacturing this book.” Arjowiggins Graphic, a manufacturer of environmental paper solutions, and Pureprint Group, an award-winning print and marketing company, therefore set out to create the most sustainable book of its kind. Printing The World We Made on four different types of 100% recycled Forest Stewardship Council (FSC) certified paper reduced its environmental impact by 17,120kg of landfill, 371,887 litres of water, 35,013kWh of electricity, 3,105kg of CO2 and greenhouse gases, and 27,817kg of wood, according to Arjowiggins Graphic’s Environmental Benefit Statement, which shows savings made by using recycled papers compared with using virgin fibre papers (non-recyled papers). “The average CO2 emissions for a book is around 4kg of CO2, so we’re proud to have created a book that produces less than half of this amount”, says Angela De Vorchik, Operational Marketing Manager, Arjowiggins Graphic. “Not only does this reduce the book’s carbon emissions and divert waste paper from landfill but it also provides a really simple way to communicate its commitment to the environment.” For the printing process, Pureprint Group, a carbon-neutral company based in East Sussex, used inks made from vegetable-based oils, and no isopropyl alcohol (which creates toxic emissions) was applied, in order to reduce ground-level ozone. Pureprint also diverts 99.5% of all its waste from landfill, only uses electricity produced from renewable resources and was awarded the Queen’s Award for Enterprise for Sustainable Development in 2013. The book was dispatched directly from the printers to warehouses in the US, UK and Australia to cut out any unnecessary transportation. Climate Care then
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offset residual emissions (1.8kg per book) to make it completely carbon neutral. So, a big improvement on your typical printed book then – but how does this compare with an e-book? Apple has stated that the total life cycle of an iPad 2 will produce 130kg of CO2 emissions, which equates to the CO2 emissions from about 32 books (based on the average of 4kg of CO2 per book across the publishing industry), or 72 copies of The World We Made. That’s roughly the number of books you’d need to read on an iPad or other e-reader to realise its environmental benefits over a printed book. Many tablets and e-readers also contain rare earth elements, which are typically obtained in ethically unsound ways from warring regions of Africa. What’s more, these devices are often manufactured in China under working conditions that would be considered unacceptable in the West. And they’re typically upgraded well before they reach the end of their useful life, with last year’s model ending up in landfill or a toxic e-waste dump in the developing world. That’s not to say the printing side of the book business is perfect – far from it. Around 40% of all the books published each year end up pulped, and there’s still a way to go before all the paper used by publishing industry is the recycled kind championed by the Arjowiggins Graphic, sourced from certified suppliers like the FSC. But as the production methods employed on The World We Made demonstrate, truly sustainable printed books need not be classified under ‘fiction’. – Duncan Jefferies Arjowiggins Graphic and Pureprint Group are Forum for the Future partners. www.recycled-papers.co.uk www.pureprint.com
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Avergae emissions for a book are 4kg of co2
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What can Western and Asian firms learn from each other? How can they collaborate around solutions that tackle regional, national and international challenges? This is the focus of WWF’s latest ‘Green Game Changers’ report. Asian innovations are already sending ripples across the globe. Centralised green policies in China that support responsible businesses and clean technologies for the nation and beyond are on the rise. For example, in 2013, the Chinese Government deployed a policy to offer almost $10,000 to buyers of electric vehicles, boosting firms such as BYD which have already become giants in manufacturing electric vehicles (EVs) and batteries. Chinese firms plan for strong growth in domestic EV use, but they also have ground-breaking technology in light and heavy-duty EVs for export. India is well known for its entrepreneurial spirit, so vital for building resilience in the face of fast-moving global challenges. Entrepreneurs are embracing frugal innovation across the country to achieve more with fewer resources. The Economic Times in India reports multinational businesses have set up over 750 R&D centres over the last two decades to drive innovation for both local and global markets. Bangladeshi bottom-of-the-pyramid microfinance services are highly unconventional and successful in their methods. Borrowers do not provide collateral in the traditional sense to secure loans, and yet the instances of successful pay back are extremely high, thanks to obligations placed on individuals by the wider community. This model is expanding westwards and linking up with the financing of micro renewables. There are incoming Asian innovations of this nature for Western businesses to adapt to and work with. There are also export opportunities that
Scrap paper for recycling at the Greenfield paper mill
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That’s the way I was used to thinking: analytically
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she first had to see the value of what she terms ‘sustainability risk management’ herself. “When you’re in a corporate environment and you have to go against the mainstream, one of the basic requirements is your own belief that what you are doing is legitimate and correct.” She describes the intense research process she threw herself into at the time, delving into papers on the potential impacts for business and industry of climate change and resource shortages and applying rigorous economic frameworks to them – in her words, “connecting the dots”. “For lack of a better word, I was not educated about these things, but once I began researching the issues, it became eminently clear how important these newly emerging risks were”, she admits. “We were a mainstream asset manager across various classes: bonds, equities, private equities, real estate. In those days sustainability risk was not considered risk at all. Risk was seen as financial risk, business risk, event risk and so on. Sustainability risk is all about acknowledging the externalities, the effect your behaviours are having on others. I could see this within an economic framework – and that’s the way I was used to thinking: analytically. This gave me the confidence and enthusiasm to push the concepts.” Conviction is one thing; communication another. Appleton describes her approach in the language of a marketer: rebranding, translating, creating messages. There’s a lesson here for anyone trying to promote sustainability in the mainstream. First listen to your audience; then adapt your message. “We had to take issues around environmental and social aspects and translate them into the language of risk. We called it ‘enhanced due diligence’ – because that was part of the rhetoric the portfolio managers and research teams were used to hearing. You really had to demonstrate how these things could impact the bottom line.” I ask her for an example – the sort she would have used to make her point. She picks the potential impact of water shortages on the many semiconductor manufacturers in Hong Kong. “In their production processes they need a lot of clean water. If there’s a shortage of water, what’s their back-up plan? If they all have the same one – to truck it in from a few other reasonably local sources, for instance – then that’s a recipe for disaster.” Appleton describes one ‘aha’ moment with the Project Finance team – an asset class that gathers funds for large projects, such as infrastructure. They looked through the externality checklist, and began to discuss the impact of developments on indigenous peoples and their ability to disrupt the infrastructure. It’s not that this ‘social’ risk was unknown, Appleton
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Photos: iStock/Thinkstock
Woman of steel: Marlys Appleton of Avtaar American and Avtaar Management Solutions
“We had a $700 billion investment portfolio.” The year is 2005, the company AIG Asset Management. Marlys Appleton had been working there for four years when she was asked to take part in a ‘management development’ exercise which, she recalls, defined both her attitude to risk and her career. She went on to become the Chair of the Sustainability Steering Committee, and Vice President, Sustainability Initiatives for AIG Global Investment Group. Today she is the President, founder and 100% owner of the wholesale metals trading and recycling firm Avtaar America, and Co-Founder-Director of the Indian company Avtaar Management Solutions. She is also on the board of the non-profit Women’s Network for a Sustainable Future, which aims to support women as agents of change for sustainable practices in the business world. Back in 2005, Appleton was one of a small group charged with investigating how climate change issues might affect the company’s portfolio, and researching progressive behaviour in corporations to see what AIG could learn. “My first though was ‘What does this have to do with me?”, she admits. “My background was analytics and this sounded more like softball!” Based on the group’s findings and acceptance by the CEO, Appleton was asked to chair an internal committee to convince the asset class business units, to take the risk seriously, and help them change their governance and approach to risk. What had they found? Put simply, that high-impact, low-probability events – such as those related to a changing climate and environmental degradation – could affect the performance of the investment portfolio. But not everyone was listening. “There was considerable resistance”, she recalls. “Just because you convince the CEO of a company, it doesn’t mean all the lieutenants fall in line. We had to tell reluctant people who thought they knew everything already that this was a risk worth putting in the main category, and then give them the tools to assess it themselves. My role was to lead that effort.” Before Appleton could convince anyone else,
Photos: Marlys Appleton
Anna Simpson meets Marlys Appleton, an early champion of sustainability risk management on Wall Street.
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stalled during the financial crisis. Her ambition had been to expand the global investment platform for long-term risk assessment to the liability underwriting side of the business. However, after the crash there was no funding for new programmes. (Her established programmes remain in place, she is happy to say.) After 25 years on Wall Street, she was ready for a new challenge. “I decided that I wanted to do something more independently. One of the biggest exports in the US is high quality scrap metal, and this is also one of the biggest inputs into the steel production process. By using recycled steel you reduce the carbon emissions and water footprint significantly – and it’s less costly. I looked at the big emerging markets for scrap steel – Turkey, China, Korea, India, and so on. India is a big steel producer: by 2020 they could well be the second largest steel manufacturing country in the world [after China]. I found a partner in India who knew the business, and that was the genesis of Avtaar.” Fundamentally, Appleton believes, she wouldn’t have started the business without her experience in helping others to understand sustainability. Appleton also credits her time chairing the Sustainability Steering Committee as a process that brought her entrepreneurial skills to the fore, and informed her decision to seek out more autonomy. There’s a long way to go before sustainability risk management is common in financial markets, Appleton admits. If she could make one change to the world of finance, I ask, what would it be? “To encourage CFOs and others working in investor relations to consider long-term risk and to bring it up in their quarterly calls”, she replies, “even if the Wall Street analysts don’t ask! The main impediment is short-termism.” However, she adds, there’s a need for regulation as well as advocacy. “I am encouraged by the work of some progressive organisations in assessing all manner of sustainability risk – GE, Allianz and Deutsche Bank, and non-profits such as WWF, to name a few. That said, had you told me in 2007 that by 2014 we would still not have any climate change legislation, I would have thought it implausible.” Anna Simpson is Editor, Green Futures.
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It’s not just about how boards behave: it’s how the whole chain of command behaves
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Risky business
hastens to clarify – but that the right value hadn’t been placed upon it. This exercise turned the fixed income team, into one of the biggest supporters internally of this new risk review. It was for this team that her group developed a carbon calculator which focused on sensitive sectors such as metals, mining and energy companies, and quantified their potential to adapt to future carbon-related regulations. “Externality is a key analysis of sustainability risk. We open our eyes to costs to which we were able to close our eyes in the past.” If the language of risk and externalities was one tool in Appleton’s change-making kit, proxy voting was another. Proxy, she explains, is an annual voting process for issues relating to all the public companies in which you hold shares. “We had a proxy voting committee and they took their role very seriously. There are all kinds of questions that fall under proxy voting issues: transparency, reporting on a company’s vulnerability to climate change, etc. What we did was educate the proxy voting committee on how they might vote on sustainability issues.” Appleton became the first nonportfolio manager member of the committee, voting exclusively on sustainability-related issues. This could only happen after she and her team convinced internal and external counsel and legal teams that by taking into account such risk, they were indeed upholding their fiduciary responsibility to manage funds prudently. She considers this a fundamental achievement. Another essential factor in minimising risk is governance, Appleton maintains. “It’s not just about how boards behave”, she explains: “it’s how the whole chain of command behaves. Good governance won’t necessarily gain you a lot that you can quantify, but poor governance will almost always comes back to hurt you.” Take the BP oil spill, she says, referring to the 2010 Gulf of Mexico disaster in which 4.9 million barrels flowed into the sea over 87 days. “If the questions that might have been asked of that company had been informed by sustainability, that would have been a good thing”, Appleton observes. “What happened with BP was a case of governance risk: down to poor safety policies or lack of enforcement. It’s clear that they saw citations [reports of health and safety incidents] as a cost of doing business, and didn’t take them seriously. This I see as a result of poor governance and it doesn’t just occur at board level, but also at project and division level.” In contrast, it was the strong governance of some metal and mining giants that prompted Appleton to consider starting her own company in metals. “I became fascinated by it while doing research into the sustainability reports of the [the mining and natural resource group] BHP Billeton and Anglo American and [the aluminium manufacturer] Alcoa. I saw that these guys had been looking at environmental issues, such as water and waste, for a long time. They’re also big supporters of education and healthcare in developing nations, because they know that if they don’t, they won’t have a workforce. What really surprised me was that they had put together a rigorous intellectual framework to consider these issues – particulary BHP Billeton, the Australian mining giant.” Come 2010, Appleton was looking for a change. Her progress mainstreaming sustainability at AIG had
Water: a source of pressure for steel manufacturers - and risk analysts
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Feedback However, the consequential effects of global warming are already here – storms, droughts, forest fires of increasing severity and frequency – all of which will increase in the next few decades, making the world a disaster zone well before then. Perhaps Forum for the Future should endorse low-level use of solar radiation management geoengineering now, without slackening its promotion of sustainability. – Colin Baglin
Water, water, anywhere? Geoengineering the future I support all that Forum for the Future is doing to promote sustainability, especially green energy. But, in order to avoid the imagined, but all too likely, horrors identified in Jonathon Porritt’s ‘Conversation with the future’ [See GF90, p21], I believe that we need to do more. Not just more of the same – wind, wave, solar, nuclear energy, etc. – as these methods are too slow and cannot keep pace with the increase in global energy use. The US Energy Information Administration predicts a 46% increase in CO2 emissions by 2040, resulting in a further 2ºC increase in Northern hemisphere temperatures. In the short to medium term, I believe we need to use geoengineering to counter global warming caused by CO2 emissions. Jonathon’s vision of the future sees some geoengineering systems – air capture and ocean fertilisation – being used in 2050.
I would have expected aquaponics to get a mention somewhere! [See ‘Crops take shelter’ in GF90, p26, which looked at indoor food production] – Tim Tess Riley [author] responds: Thanks Tim – paragraph seven does mention it, which is good news. There are a lot of impressive things happening in that field so it wasn’t possible to go in depth into each method, but hopefully it gives an overview.
Governing for sustainability
I couldn’t agree more with this article [See GF90, p28] in terms of acknowledging that governance is such an important issue when thinking about creating big change. It’s not a sexy topic, but good governance provides the essential foundations for things to flourish, and needs to be given the same attention as some of the more whizzy innovations that emerge. This topic shouldn’t be exclusive to just the national and regional leaders of countries either; it’s perhaps even more relevant when thinking about new and emerging organisations and power structures.
www.greenfutures.org.uk letters@greenfutures.org.uk @GreenFutures Comments may be edited for publication.
Having worked on the Sustainable Shipping Initiative (SSI) over the last three years, I’ve experienced first-hand how the governance structure has evolved to fit the growing and changing needs of the project. Working through the appropriate structures was something that took much more time than we had anticipated, but it’s one of the things I am most proud of having achieved. We’ve now established the SSI as a separate legal entity with its own trustee board, spinning it out of Forum for the Future. We hope this will allow the initiative to grow and flourish and create even more impact within the industry. It seems that there is very limited knowledge about what the options for alternative governance structures are – be that for new bodies or established structures looking to adapt. As far as I’m aware, there is no obvious place where people can go to learn and share their experience of governance structures. In addition, there seems to be a resistance to talking about the nitty gritty of how these things work. I know it would have been useful for me to discuss these matters with others facing similar design challenges. Plus, it’s my hunch that there is also room for innovation in the options for new forms of governance. Most importantly, when designing governance structures for the future we must acknowledge that these structures can’t be static. They need to be flexible and adaptive, yet resilient and appropriate for the needs of the community they’re working to support. If we don’t work with the evolving forces around us, then we’re not going to get the get anywhere close to effective governance for sustainability. – Louise Armstrong, senior advisor at Forum for the Future
@tess_riley: Great to see @SoilAssociation’s focus on the impacts of #cotton. Read @GreenFutures’ #cotton special? http://bit.ly/12GgWdQ @CambridgeAroma: @GreenFutures @tui_travel Fuel efficient [sic] applied to air travel is an oxymoron
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JonathonPorritt
We’re trapped in an ideological stand-off
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shortages induced by further population growth, or decreased, indicating the power of technology to secure new supplies? Ehrlich promptly accepted the bet – and lost on every one of five counts! More tellingly, our societies have not collapsed into the kind of polluted hell-hole that Ehrlich saw as inevitable. Despite huge increases in human numbers, most indicators of human progress have moved in the right direction, particularly on longevity, access to education, reduced mortality from contagious diseases, and so on. “But at what cost to the natural world?” is Ehrlich’s continuing refrain. We’ve eroded so much of our natural capital (in terms of fresh water, soil, forests, fisheries and so on), and so profoundly destabilised the climate (through our still-increasing use of coal, oil and gas) as to profoundly jeopardise all the gains that we’ve made over the last few decades. And so the debate goes on, reflected in the anguished plea of the CEOs quoted above to let innovation rip. Paul Sabin’s The Bet uses that very personal battle between Ehrlich and Simon to demonstrate eloquently why we’re now so fundamentally trapped in an ideological stand-off that just gets more and more vicious – especially in the US. It wasn’t always like this. Richard Nixon described the environment as ‘a cause beyond party and beyond factions’ in his State of the Union address in 1970, inviting his Democratic opponents to join him in a bi-partisan approach to addressing pollution and population growth. George Bush Senior picked up on that theme in the early 1990s, distancing himself from Ronald Reagan’s earlier constant campaigning to dismantle as much environmental regulation as he could get his hands on. Bush’s pro-environment enthusiasm didn’t last long, and nor did Margaret Thatcher’s ‘green period’, but at least they were capable of listening to other people. President Obama must think back ever so nostalgically to those golden days. Today’s Republicans (and their militant wing in the Tea Party) see anything to do with the environment as antimarket, anti-progress and anti-God himself! But as Sabin’s subtitle implies, the bet between Ehrlich and Simon is still in play. We’re engaged in a massive gamble regarding the future of humankind, and more and more people believe the odds on a happy outcome are getting longer by the year. Which is precisely why we do indeed need to be driving innovation harder than we’ve ever done before – but not without due precaution every step of the way. Jonathon Porritt is Founder Director of Forum for the Future. His latest book, ‘The World We Made’, is available to buy from theworldwemade.com. www.jonathonporritt.com
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A ‘slow travel’ air cruiser over Incheon Bridge, South Korea, 2041 Image courtesy of SeymourPowell
Photos: Nick Woodford / Forum for the Future
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The CEOs of the world’s biggest chemical and agribusiness companies recently petitioned the presidents of the EU Commission, Parliament and Council to downgrade the Precautionary Principle and focus instead on a new ‘Innovation Principle’. On what grounds? That taking an excessively precautionary approach to policy-making and regulation is holding Europe back in the cut-throat world of global competitiveness. I’m not sure this was terribly wise. The Precautionary Principle is what it is precisely because the majority of EU citizens have lost what trust they might once have had in these industries – with good reason, for the most part. Does it really make sense to imply that ‘precaution’ and ‘innovation’ are polar opposites, or to address society’s widespread anxiety about the impact of some products by petitioning EU decision-makers to give them even greater licence to innovate with even fewer regulatory constraints. This is already such a polarised world, so why make it worse? Polarisation on environmental issues has been the name of the game for so long that few question when that game first came into being. Paul Sabin nails that historical sweep in his new book, The Bet: Paul Ehrlich, Julian Simon and our Gamble Over Earth’s Future, taking us back to the birth of the modern environment movement in the late 1960s in the US. Of Sabin’s two protagonists, Paul Ehrlich is by far the better known. Author of The Population Bomb in 1968, and so-called ‘high priest of the ecoapocalypse’, he has spent the best part of 50 years warning people that we’re living way outside the Earth’s natural carrying capacity, and that the sheer weight of human numbers will eventually trump the power of technology and innovation – even when it is not held back by unnecessary precaution! At the start of his academic career, Julian Simon subscribed to more or less the same world view. But he soon came to see things very differently, dismissing Ehrlich and all other supporters of the ‘limits to growth’ thesis as misguided fools or ‘dangerous false prophets’. Simon’s best-known book, The Ultimate Resource, was published in 1981. Shortly after that he challenged Ehrlich to a bet: would the price of five key raw materials (copper, chromium, nickel, tin and tungsten) have increased by the end of the decade, indicating
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