Hyperquake Blog

HyperQuake strategists continue to participate in a 13-week webinar entitled “Sustainability Boot Camp” hosted by Sustainable Life Media. In the third session, William Sarni, CEO of DOMANI, presented his thoughts on the topic “Innovation Opportunities in Response to Today’s Environmental Hot Buttons: Climate Change, Water & Waste.”

In his presentation, Sarni points out that 2009 will be marked as the year when sustainability went mainstream–the year where the old paradigm of abundant materials and limitless energy was openly (and successfully) challenged by environmental and social performance. Large opportunity areas such as Revenue, Risk Management and Reduced Operating Costs expose business opportunities as not simply about compliance.

In a September 2009 exclusive, Newsweek released their first annual Green Score Rankings. In it, a strong correlation between Green performers is made to companies that are successful overall. It summarizes that sixteen out of eighteen companies with high green scores had a 10-15% better stock performance than peers. This information suggests that perhaps voluntary sustainability isn’t really voluntary anymore- both in terms of business success and critic review.

Innovation for sustainability is really no different, then, than other realms of innovation and very similar to HQ’s own definition and approach to innovation. It requires foresight, open collaboration, creativity and discipline. It’s about taking risks, accepting failure and knowing that true innovation is about improvement, not efficiency.

Sarni points to Google (by way of their creativity) and GE (for their discipline) as being good stewards of innovation. He also states that sustainability is like innovating inside the box– knowing and working within certain parameters.

Sarni also shared an example where companies are putting aside their competitive nature to come together for mutually (and globally) common ground. Eco-Patent Commons is an initiative of the World Business Council for Sustainable Development (WBCSD) organization that was founded on the commitment that anyone who wants to bring environmental benefits to market can use these patents to protect the environment and enable collaboration between businesses that foster new innovations.

Three general bucket areas that are getting the most attention are carbon, water and waste. Carbon is probably the most difficult for the general consumer population to grasp, given its diversity and complexity, but initiatives like the Carbon Disclosure Project are sure to build general knowledge and application.

The Carbon Disclosure Project is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. Thousands of organizations from across the world’s major economies measure and disclose their greenhouse gas emissions and climate change strategies through CDP.

Many companies are building their brand image by way of reduction goals and strategies. Cisco and IBM communicate well about their intentions and others, like Dupont and BASF are able to reframe their image. Reducing your carbon footprint is becoming widespread terminology and labeling initiatives are in the works. The Carbon Trust has launched a new carbon reduction label to provide a measure of a product’s carbon footprint (embodied GHG emissions) across its life cycle.

Other companies are focusing on product innovation to reduce carbon. Calera, funded by Vinod Khosla – venture capitalist, has come out with a process that takes CO2 from the air to make cement. Would this make it possible to simply build our way out of any CO2 issues? Carbon taxes or credits for removing CO2 ($25-100/ton in Europe) such as those proposed by Al Gore could make Calera cement virtually free for builders.

Water, the second of the three large buckets, is in some ways following the footsteps of carbon. Full disclosure initiatives and labeling are a few directions where it may be heading. But even with such references as T. Boone’s “water is the new oil,” it is clear that there are many differences– the basic right for humans to have water being one such difference.

The business implications to climate change and water scarcity are quickly becoming key issues. Some estimate that as much as 47% of the world’s population will face a severe shortage by 2030 (Ceres/Pacific Institute) and already some companies are feeling the effect. Waste, for most, its about material use and packaging and has large social implications around the world, as well as being a big financial opportunity for most companies. Nike, for instance, has created $40 million in annual savings after a $3 million investment through various initiatives, and a Subaru factory in Indiana is close to zero waste, 97% of waste is recycled and none going to landfills

While some experts suggest not making too bold of statements (or at least not too early), others encourage the move, saying that it forces action and results. I for one, am interested to see how sustainability goals and benchmarks plays out in 2015 and 2020, with consumer interest on the rise and so many companies making their initiatives public.

Tags: strategy, sustainability