How to spot Greenwash

I got a very nice email from Kim Hallwood at Futerra who forwarded the Greenwash guide. It's great reading, and if you're really busy they have a quick read section! There's also a Greenwash USA guide too.

It's a superb overview on how to spot Greenwash and the signs to look for. Thanks Futerra.

Corporate Responsibility OR Greenwash?

In the Carbon MBA we share one or two modules with other masters courses and Sustainable Consumption is one of them. It's a great module as business approaches engage with more community and grassroots approaches. The majority on the course from other masters appear, at first glance, anti-big business. Perhaps they see me as anti-grassroots!

This week, businesses, particularly multi-national companies, were under scrutiny for not caring about the environment, labour rights and ethics. We were treated to the story of stuff which reaffirms all the stereotypical negative stuff about businesses. You know the sort of thing: they slash and burn forests, make workers work too hard and pollute the environment.

It's good to be challenged, but we mustn't get lazy and just be anti-business. What struck me in the class debate was the poverty of clarity in criticisms of business practices, yet at the same time people demanded that there should be high levels of transparency from MNCs. MNCs should be transparent, but lets argue on what we know not what we think we know. For example, some argued that marketing and advertising were evils that created unsustainable consumption. If it's that easy then a few marketing campaigns will change the behaviour of individuals and reduce emissions - bingo - we have solved climate change. Hmmm...It's not as simple as that is it?

Wal-Mart - the largest supermarket in the world with over $400billion in revenues - has launched a supply chain sustainability index. It's not perfect and there are critics, but it's an enormous job and pushes those in the supply chain to do the same. VW-Audi are pursuing their PowerTrain Strategy to make all their models electric or bio-fuel. What's interesting is that Wal-Mart's customer base are not the organic/muesli/liberal type, more the Joe the plumber. Equally, not all car manufacturers are adopting VW-Audis strategy. With both companies, there's an element of saving money, gaining a competitive advantage and more profit or simply doing the right thing.

So, some businesses are ahead of the customer and government. Some need to do more - a lot more. But all businesses whether they are limiteds, plc's, co-ops or public sector have to run so that they pay their way and balance the books or make a surplus. It's not profit that is differentiating which businesses follow sustainable practices. It's the people running them. If we can influence them, then changing a billion dollar industry is going to have a big impact.

Blogs as a learning tool

One of our latest modules: Theories of Sustainable Consumption has, as part of our homework, a request from tutors that we all use blogs to write down our thoughts. It's a great idea for sharing ideas and resources.

I'm really looking forward to this course as it looks at some of more radical green ideas that people are doing now. In marketing and innovation we talk of diffusion of technology, here we're talking about the diffusion of ideas - I think the term is social diffusion of ideas. I remember recycling 10 years a ago and people thought I was a bit mad - well we've come a long way.

Perhaps the Transition Towns movement will eventually diffuse into society - who knows, but if we can find out what works early on then it becomes easier to reduce emissions. So, I'm looking forward to sharing all those crazy ideas and trying to be as open minded as possible.

Here's a quick reminder why we need to figure all of this out....

Climate Talks Jargon buster

With many thanks to The Guardian's Damian Carrington

Copenhagen: The venue in December for the final UN negotiations to deliver a successor to the Kyoto treaty. There are preparatory meetings in Bangkok and Barcelona before then.

Carbon intensity: How much fossil fuel you have to burn to make something or deliver a service. Reducing carbon intensity does not mean cutting overall emissions, but it does mean that a country can expand its economy without driving up emissions at the same rate.

Implicit targets: A diplomatic phrase deployed by India to describe targets India has chosen for itself and for which it will not be held to account by anyone else. Appearing to cave in to foreign demands for specific cuts would be political poison in Dehli.

Mitigation: This simply means actions to reduce global warming, most importantly cuts in greenhouse gas emissions.

Afforestation: The replanting of trees. About 20% of all global carbon dioxide emissions come from the destruction of forests. Preventing that is the main focus of the UN talks but China is also keen on creating new forests.

Cap and trade: One way of setting a limit on greenhouse gas emissions for a region or industry. Polluters are given carbon permits that add up to the cap. They can then sell permits if the have cut their emissions to those who have not. In theory, it allows a market to deliver cuts efficiently.

Carbon tax: A direct tax on activities that result in carbon emissions. Much less bureaucratic than cap-and-trade but cannot deliver an exact cut in overall emissions.

Offsetting: Paying for reductions in emissions elsewhere to compensate for polluting activities. Popular on a voluntary basis for flights, but criticised on a national level for allowing rich nations to butt their way out of making cuts at home.

Peak emissions: The time at which global greenhouse gas emissions stop growing and begin to fall. Scientists say that year must be 2015 if dangerous climate change is to be averted but current trends will not achieve this.

Intergovernmental Panel on Climate Change (IPCC): The international scientific body, involving thousands of scientists, used by the UN since 1988 to provide a neutral source of information on climate change. Its reports are approved by national governments. It was awarded the Nobel peace prize along with Al Gore.

Carbon Combat!

As part of our consultancy project with Adnams I mentioned that we were on a quest to find the holy grail of carbon reductions. We ran a project with two Hotels in the Adnams group: the Swan and the Crown. Both are old buildings restricted by planning regulations and by-laws in Southwold, but the staff are keen and aware of environmental issues.

Our project, named Carbon Combat at the suggestion of the hotel teams, involved a competitive element and a financial incentive. For a four week period each hotel team battled to see who could save the most carbon emissions. Each week, after meter readings, posters were displayed in staff rooms and in other areas where staff would notice them. We used a baseline of the last three years' meter readings and the staff were told that all financial savings would be passed on to the hotel team that saves the most emissions.

The project ran at short notice and at the busiest time of the year for both hotels. Guidance was given on "quick wins" or low hanging fruit: switching off lights; keeping fridge doors closed; changing lightbulbs to low energy bulbs; switching off the gas when not needed in the kitchen. All staff - from cleaners, chefs, bar staff and waitresses - were encouraged to think about how to reduce emissions and guests were discreetly guided with quirky messages in their bedrooms.

The results are very interesting. The Swan won with a 32% reduction for the four weeks year on year. The Crown still managed a respectable 9% reduction. The Swan did have an advantage in that they had more efficient boilers and a newer kitchen. The Crown serves more covers using a more inefficient kitchen. However, emissions per room were higher for the Crown than for the Swan.

What's pretty clear, we think, is that around 9%-10% of the reduction in emissions was due to behavioural change - the switching off of lightbulbs and so on. Even the sceptics in the hotel still wanted to beat the other team and there was much discussion on the best method and how the figures were calculated. We're clear that "green teams" are not enough: there needs to be financial incentives -we recommend up to 50% of the savings to be passed on to the staff- with a competitive element attached to it.

What's pleasing is that the management team were very happy - they saved £1000 in the four weeks - and they're looking to extend the project all year round to all four hotels. We will also be recommending to Adnams that they extend the project to their retail outlets and offices. A 10% reduction is easily within reach and given that Adnams have signed to the Guardians 10:10 campaign - it's all come together nicely.

The End of Charity part 2

Nic Frances did what he said he would do: become an actor. He is now an actor that can have lots of rests in between jobs as his company Cool NRG has succeeded in gaining approval from the UN for its programmatic CDM project that starts in Mexico. You read can more about it here and here.

The End of Charity

Every now and then someone comes along and inspires you. On the Carbon MBA course, we're lucky to have master classes from people of all walks of life. We've had Carbon specialists talking about Kyoto to finance directors discussing their company. All have been excellent, but none as inspirational as Nic Frances. Frances is one of those people who have the ability to inspire all sorts of people in different ways. He has been a priest and then became a charity worker before losing faith in "doing good". He now calls himself a social entrepreneur, but has decided to sell his businesses and become an actor. Hardly bog-standard MBA stuff.

His book The End of Charity highlights his journey from Jesus to selling to carbon credits in Mexico. It's well worth a read and I would jettison any MBA text book that has the word(s)excellence or value-added or blue skies or whatever the latest business jargon is in fashion.

He had a failing business that he turned around by getting to grips with the Carbon market, and, indeed, made a very good carbon margin. In Victoria in Australia, he realised that he could gain carbon credits by giving away low energy light bulbs. The price of carbon was A$10 a tonne, each pack of four light bulbs saved one tonne of carbon per annum and cost A$5 to distribute. The carbon margin being A$5/tonne. His failing business was saved. He did the same in the UK. In September last year he distributed over 4 million light bulbs via the Sun newspaper. They gained carbon credits for the energy companies and he took a cut. According to external audits 85% of the bulbs are used. This means a huge reduction in emissions.

So what? Well, no charity could match that nor could any government; in fact no organisation of any kind has matched what he has done to reduce emissions. And, it gets better:
Frances hopes in the next few weeks to have approval from the UN for his Clean Development Mechanism (CDM) project in Mexico.

CDM projects, put simply, are carbon offsets. An energy company in the UK may miss its EU-ETS targets and can buy emissions reductions elsewhere - in this case Mexico. There are skeptics about offsets, but they are highly regulated and will reduce global emissions AND reduce poverty. Frances' company - Cool NRG -is giving away 30 million low energy light bulbs to low and middle income households across Mexico starting in the city of Puebla. It is estimated it will cut 8.1 million tonnes of CO2 over ten years. It will also save US$165 million in lower energy bills AND save the Mexican government US $585 million in electricity generation infrastructure costs and US $200 million in reduced household electricity subsidy payments each year. Cool NRG make an IRR of 15% if the price of carbon is around €15/tonne. A lot more money is made if projections of the price of carbon rising to €30-€50/tonne in the next 5-10 years are correct.

Some interesting facts emerge from this: the saving to the Mexican people is the equivalent of one weeks income and the money saved is five times the annual US aid budget to Mexico. This is money direct to the people without NGOs or governments saying what it can be spent on.

It's a work of genius from an entrepreneur who wants to make money. Can Oxfam do this - yes they can, but they don't. Can any NGO do this - yes they can, but they don't. What some people don't like is that it makes a carbon margin; what they fail to understand is that "doing good" doesn't work. It needs to be both.