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April 29, 2010

LA Business Council Sustainability Summit, Part Four: Renewables and Feed-in Tariffs
Corporate Sustainability - clean energy, economy, energy efficiency, green business - Joanna Gubman

In sunny Southern California, no discussion of sustainability would be complete without mention of solar power.  At the recent Los Angeles Business Council 2010 Sustainability Summit, which the Alliance attended as a Cooperating Organization, a full panel was devoted to renewable energy, both solar and wind.

The panel opened with a talk on feed-in tariffs (FiTs), which are guaranteed rates for excess on-site renewable power generation to be sold back to the grid (equivalent to allowing a utility customer’s electric meter to run negative and produce income for the customer). The presentation was given by J. R. DeShazo, Professor of Public Policy and Director of the UCLA Luskin Center for Innovation. As an author of Designing an Effective Feed-in Tariff for Greater Los Angeles, a study recently conducted in partnership with the LA Business Council, DeShazo was able to give an in-depth review of the FiT value proposition and of important variables impacting program success.

Los Angeles has aggressive renewable generation goals, aiming for 20% renewable power this year and 40% by 2020. Mayor Antonio Villaraigosa has also set a goal of eliminating coal from the generation mix by 2020. However, achieving these goals will be a challenge. Today, only 14% of the city’s generation mix is from renewable sources, falling significantly short of the 20% renewable portfolio standard (RPS) target. To help close the gap, DeShazo’s study recommends implementing a carefully designed FiT, focusing on large multifamily, commercial, and institutional buildings with plenty of roof space available for solar. The study found that such a program would contribute approximately 3% to the city’s RPS. Beyond this contribution, a well-designed feed-in tariff has several significant benefits :

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April 22, 2010

LABC Sustainability Summit Part 3: Villaraigosa’s Keynote
Corporate Sustainability - economy, green business - Joanna Gubman
Los Angeles Mayor Antonio Villaraigosa

The California Sustainability Alliance recently attended the Los Angeles Business Council 2010 Sustainability Summit as a cooperating organization – here’s part three in our series on what we learned there. The event was brimming with impressive speakers and panelists, including Los Angeles Mayor Antonio Villaraigosa, who expressed pride in his perfect attendance record at this 3rd annual event.

The mayor began by expressing his perspective on the sustainability value proposition, which he believes contributes not just to the environment but also to jobs and the overall economy. He then took a quick dive into the financial crisis currently facing the city of Los Angeles, which has tried to raise electricity rates in order to maintain solvency. He explained that he believes rates need to go up not just to keep the city solvent, but also to enable action on important policy goals. In particular, the city is heavily reliant on coal for its power generation. While this choice helps to keep rates down, Villaraigosa expressed his conviction that the city must change its generation mix to incorporate more low-carbon sources such as natural gas and renewables.

Villaraigosa spent the remainder of his keynote addressing one of his passions – improving public transit in Los Angeles. He focused on Measure R, which was approved by LA County voters in 2008 with an overwhelming two-thirds majority. The measure provides $40 billion in funding over the next 30 years for numerous transportation projects, including several related to sustainability, such as:

  • Doubling the size of the rail system in Los Angeles County
  • Building a “subway to the sea”
  • Establishing bikeways and pedestrian improvements
  • Maintaining low fares for public transit while expanding service
  • Carpool lanes

Measure R is an unprecedented investment in public transit; and to make it even more impressive, Villaraigosa has championed accelerating the timeline from thirty years to ten. While completing the numerous projects in Measure R will be a challenge – it requires cooperation amongst all 88 cities in Los Angeles County – the initiative will be a true game-changer, vastly improving both environmental sustainability and quality of life for Los Angelenos. Measure R is also expected to create 166,000 jobs and save 10 million gallons of gasoline annually, contributing to economic growth and energy independence. Emphasizing the diverse benefits of this project, Villaraigosa called on business, academia, and health professionals to work together in support the initiative, concluding, “The time to act is now.”

As a former Angeleno, I can’t wait to see my hometown finally build a more sustainable transit system. For those of you currently living in Los Angeles County, tell us – how is implementation of Measure R affecting your daily life? What do you think the County’s transit priorities ought to be?

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April 20, 2010

LABC Sustainability Summit Part Two, Keynote by CPUC President Michael Peevey
Corporate Sustainability - economy, green business - Joanna Gubman

For part two of our series on the recent Los Angeles Business Council 2010 Sustainability Summit, we’ll be covering the first of the two morning keynotes. These speeches were given by California Public Utilities Commission President Michael Peevey and Los Angeles Mayor Antonio Villaraigosa. We’ll be reviewing Michael Peevey’s keynote here – but stay tuned for a discussion of Mayor Villaraigosa’s keynote later this week.

Both keynotes (and many of the panelists as well) centered around the idea that it’s time to move from talk about sustainability to action on sustainability. Peevey illustrated the magnitude of the challenge ahead by outlining the requirements of AB 32. Today, he explained, California emits 13 tons of carbon per person per day. To meet AB 32 goals, these emissions will have to drop to 10.5 tons per person per day by 2020, and to 1.5 tons by 2050. For comparison, 1.5 tons of carbon per person per day is roughly equal to India’s carbon intensity today.

To meet such aggressive goals, Peevey emphasized, radical changes will be necessary. In particular, Peevey expressed a belief that realignment of market forces, while preferred by many major corporations such as Safeway (as we discussed previously in our review of the first panel), will be insufficient to meet the goals and deadlines set by AB 32. As with many of the speakers at the conference, Peevey was unafraid of controversy, stating that while AB 32 has many “command and control” requirements, he believes such strong mandates are necessary to achieve the state’s greenhouse gas reduction targets.

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April 16, 2010

LA Business Council 2010 Sustainability Summit
Corporate Sustainability - economy, green business - Joanna Gubman
Getty Center facilities, certified LEED-EB Silver

Building a Green Economy: Connecting Sustainability to Business and Job Creation-The Los Angeles Business Council’s annual sustainability summit was held on April 6th at the Getty Center, a museum overlooking the city that is impressive not only for its extensive art collection, but also for its beautiful, LEED-EB Silver facilities.

The day’s events featured three panel discussions and keynote speeches, with participants representing major public and private organizations such as Safeway, Jones Lang LaSalle, the California Air Resources Board, LA Unified School District, Southern California Edison, the LA City Council, Kyocera Solar, Arden Realty, and others. Notable panel participants and keynote speakers included Los Angeles Mayor Antonio Villaraigosa, California Attorney General Jerry Brown, LA City Controller Wendy Greuel, and Michael Peevey, President of the California PUC.

The summit featured a terrific collection of speakers and panelists, and we were thrilled to be in attendance as a cooperating organization. We’ll be sharing what we heard with all of you in this short blog series, beginning with this report on the first panel of the day, Discussion of Best Practices among Sustainable Industry Pioneers.
This was a dynamic panel full of sustainability leaders who aren’t afraid to speak out on controversial topics. Focusing primarily on the drivers for sustainability and on how an organization can get started, all of the panelists emphasized the need to be proactive, innovative, and persistent. As in the recent SVLG Corporate Sustainability Symposium, Sustainability Showcase Award winner Jones Lang LaSalle was again represented, this time by Lauralee Martin, Executive Vice President and Global Chief Operating and Financial Officer. She stated that the hardest part of initiating a corporate sustainability program is getting past stakeholders’ confusion on the subject of sustainability: Why is sustainability important to business? What should be measured? What goals and commitments should be adopted? Getting past this confusion, Martin said, requires passion and persistence.

Echoing this theme, when asked how he was able to help revitalize Oakland as mayor, Jerry Brown (now the California Attorney General) immediately boomed, “force of will”; he quickly added that a receptive and change-oriented public is also essential to get past inertia and regulation. Brown’s heartfelt outburst was easily the most memorable moment of the day.

Kevin Ratner, President of Forest City Residential West, also commented on the need to have internal and external stakeholders be educated on and receptive to the benefits of sustainability. Internally, staff members need to stop viewing green as a cost, and instead recognize it as a savings opportunity. Vendors and contractors also require a similar culture change. Residents of Forest City’s multifamily developments also require education in the behavioral aspects of sustainability, in order to ensure that their buildings are operated in a green manner.

Joseph Pettus, Senior VP of Fuel and Energy at Safeway, agreed that it is essential for a corporation to understand that “green is a profit center”. All of Safeway’s environmental initiatives, including reducing GHG emissions by 10% in 2006, the first year of their corporate GHG reduction program, either earn or save money. Pettus stressed that none of Safeway’s actions have been undertaken out of fear of legislation or any other “stick” approach. Rather, Safeway has been “going for the carrot”, pursuing the financial and other benefits that come with adopting sustainability. As the top commercial electricity consumer in the state, Safeway’s business practices can have a significant impact on California, so we were happy to hear their unambiguous recognition of the sustainability value proposition.

Venturing into more political territory, Pettus added that Safeway wants a map, not directions. In other words, Safeway supports government establishment of market frameworks (it publicly supports cap and trade, for example), but does not support mandates for specific actions. The company prefers that the path to achieving policy goals be determined by the private sector, in the context of a market designed to support those policy goals. Pettus also emphasized the need to maintain flexibility, stating that he thinks California is not yet ready for auctioning of carbon credits, given today’s economy.

While agreeing that flexibility is essential, Attorney General Jerry Brown seemed somewhat concerned by Pettus’ comments, stating that it’s important to first take bold steps, and then adjust. While policymakers taking this approach may not have a lot of support, he feels it is necessary to take risks and innovate – and that business has an important role to play in pursuing innovation. Stating his belief that we now live in an “era of limits”, Brown summed up his perception of the central challenge of sustainability, which is whether we can “visualize long term problems and avoid them efficiently by acting now”.

Despite the difficulties both corporations and government agencies face in taking a long term perspective, all of the panelists seemed to feel that sustainability is slowly but surely moving into the mainstream. In fact, Lauralee Martin of Jones Lang LaSalle has found that commercial property owners express even greater interest in sustainability today than they did before the economic downturn, as owners recognize the potential to save money and be more attractive to potential tenants by reducing energy costs and increasing sustainability. Expressing her confidence in the sustainability value proposition, Martin stated that in the future, sustainability will be inseparable from the rest of business. Here at the California Sustainability Alliance, we could not agree more.

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April 8, 2010

Silicon Valley Leadership Group 2010 Environmental Sustainability Symposium Part 2
Corporate Sustainability - economy, green business - Joanna Gubman

Sharing of best practices is central to the mission of the California Sustainability Alliance, so we were particularly thrilled to observe the many organizations openly sharing their experiences and learning from one another at this year’s Silicon Valley Leadership Group (SVLG) Environmental Sustainability Symposium. This is the second posting in our two-part series documenting this great event. In part one, we discussed the keynote speeches; here, we’ll be delving into the panel sessions.

But first, we’d like to share with you a few of the big takeaways from this year’s event, themes we heard numerous keynote speakers and panelists bring up repeatedly throughout the day:

  • Take a long view – align your company around important human challenges, rather than around next quarter’s earnings; make sure everyone agrees on what’s coming in the 21st century economy and what goals the company should pursue
  • Use sustainability as an opportunity to better understand your business processes and improve both economic and environmental performance
  • Collaborate – internally, with competitors, with non-competitors, and with policy-makers
  • Engage employees and customers; be transparent
  • Get specific, both in terms of what each individual can do to contribute, and in terms of metrics

In addition to the keynote speeches discussed in our previous post, the symposium included several panels addressing frameworks for implementing initiatives, the benefits of collaboration, procurement issues, reporting, and more.

Collaboration Shaping Sustainability

This panel focused on collaboration in datacenter energy efficiency. However, we believe that many of the lessons learned in the IT industry are more broadly applicable to corporate sustainability. In particular, panelists emphasized collaboration both within an organization, and across organizations.

Within an organization, panelists expressed that any sustainability initiative is highly dependent on collaboration between the energy buyer, facility manager, and IT manager. All three individuals need a common language and strong communication to adopt a holistic approach to sustainability.

Across organizations, panelists stressed the importance of standards and open communication to enable economies of scale and innovation that would be impossible to achieve if each organization acted alone. This communication should be both between competitors, who can benefit from the economies of scale and regulatory stability that standards provide, and between companies operating in different market sectors, which can benefit from adopting innovative technologies developed elsewhere.

Procurement Drivers: Demands from the Supply Chain

The main driver for sustainable procurement is customer demand, particularly from large volume purchasers. However, there is a great deal of ambiguity as to what makes a product sustainable or unsustainable: How much recycled content is enough? What efficiency is enough? Whatever standards are adopted, moderator Alicia Culver of the Green Purchasing Institute suggested several options for performance verification including third party verification, site visits/photographs/data, and trustworthy eco-labels.

As representatives of large corporations (NVIDIA, FlexTronics, and HP), the panelists agreed that first-hand verification from site visits, photographs, and electronic data are essential to ensuring environmental performance at a large scale. However, they also trust eco-labels such as ENERGY STAR® and WaterSense®, which can simplify the green procurement process for organizations of any size.

Panelist Judy Glazer, Director for Global Social and Environmental Responsibility (SER) Operations at HP, stated that sustainability in procurement is similar to quality in procurement, which we thought was an interesting perspective. In both cases, investment is necessary, but the organization gets something important back in return. The other panelists agreed with Glazer, but emphasized that sustainability can save money in addition to providing other benefits. Panelists also stressed the importance of understanding an organization’s processes and practices (such as through carbon inventorying) in order to identify ways to be more economically and environmentally sustainable.

Operational Innovation: Greening Your Operations

Buy-In

EBay, which served as the event host, was an active participant in the green operations panel. Amy Skoczlas Cole, Director of the Green Team at EBay, began by commenting on how essential it is to approach sustainability from both the top down and the bottom up. For example, EBay once replaced office trash bins overnight with recycling and compost bins. There was significant blowback because employees had not been given any training and were confused as to what is recyclable or compostable. Had their grassroots Green Team been involved earlier, and training been given to all employees, Cole believes the process would likely have gone more smoothly. Cole also emphasized that every employee can innovate in sustainability, so it is important to integrate sustainability into regular job function, rather than considering it a side project.

Also on the subject of gaining buy-in from diverse stakeholders, Michael Jordan, Sustainability Practice Leader at Jones Lang LaSalle (JLL) suggested calculating the theoretical minimum energy required to conduct a task such as heating and cooling a building, in order to establish reach goals and see how far the team can get. Lisa Neuberger-Fernandez, Strategy and Policy Lead for Global Corporate Citizenship at Accenture, agreed that goal setting is important to focus attention. For example, Accenture has a goal of 40% carbon reduction per employee by 2012, relative to a 2007 baseline. Additionally, Neuberger-Fernandez feels that it is important to set up a framework so that as sustainability ideas come in from employees and the executive committee, it’s easier to prioritize. We agree that a goal-oriented, holistic, and structured approach is essential to success.

Travel

Travel is a major concern for certain types of businesses, in terms of both carbon and quality of life. Lisa Neuberger-Fernandez of Accenture spoke to this issue, which can be difficult for companies such as Accenture that regularly deliver business services on-site. As a first step, Accenture tries to eliminate unnecessary travel. While Accenture finds videoconferencing to be somewhat helpful, office communicator and WebEx-type applications are more helpful in achieving this objective. However, sometimes on-site interaction and data access is necessary. In these cases, Accenture staggers client visits whenever possible, so only one person is on-site at any given time. This saves on travel costs, carbon, work-life balance, and travel time/productivity. Accenture’s practices are great examples of how small, simple changes can contribute significantly to the triple bottom line.

Green Leasing/Retrofitting

Because facilities represent a significant percentage of most corporations’ greenhouse gas emissions, panelists also spent some time addressing the complex issues of green leasing and retrofitting. Numerous resources are available documenting best practices in these areas, including the Alliance’s own Green Leases Toolkit, yet each organization’s approach to sustainability in its built environment will be unique to its business practices and corporate culture.

For organizations looking for inspiration – and specific information on sustainability measures and economics – Adobe, a participant in this panel, provides information on all 85 of its LEED certified buildings for free to anyone who requests it. Pushing the envelope, Adobe is not just retrofitting buildings where it is the owner-occupier. For example, the company is a full-building tenant at an office building in Seattle. Two years into their ten year lease, they decided to pursue LEED EB Platinum, without landlord assistance. This didn’t just make environmental sense – it turned out that the payback for achieving LEED Platinum was only two years, making the retrofit a good economic investment as well.

Michael Jordan of JLL agreed that simple things like window replacement and placing of heat shields between radiators and exterior walls can achieve significant progress towards reach goals, without requiring significant investment. And, he added, working towards reach goals can result in unexpected savings. For example, JLL’s Empire State Building retrofit was originally designed to include a new $20 million chiller, but in the end it wasn’t needed due to increased efficiency. That project had a $13 million total incremental cost, but achieves $4.3 million in annual savings, yielding a terrific three year payback.

Having recently recognized Jones Lang LaSalle with the 2009 Commercial Buildings Sustainability Showcase Award, we at the Alliance were thrilled to see JLL sharing its perspective and best practices with symposium attendees. Whether you were able to make the SVLG conference or not, if you are interested in more details on how JLL is demonstrating holistic adoption of sustainability best practices, we hope you’ll visit our JLL Showcase and watch the video of JLL’s Southwest Sustainability Practice Lead discussing how the organization is paving the way for sustainability in California’s built environment.

Goal Setting and Performance Reporting

Reiterating a common theme of viewing inventorying as an opportunity, panelists in this session emphasized that CSR reporting has value beyond the basic act of reporting – it is a good way to develop and articulate a sustainability strategy. They also discussed the importance of buy-in from the numerous staff members at an organization whose leadership or data is required to conduct rigorous reporting. Offering some practical advice, panelists mentioned some of the arguments they have successfully used to persuade colleagues and leadership to contribute:

  • Customers are doing similar reporting
  • Competitors are doing similar reporting
  • Inventorying helps an organization understand operations and save money
  • It’s better to stay ahead of the regulatory curve, and to play a part in shaping forthcoming regulation

Panelists also stressed the importance of defining a vision and guiding principles at the start, in order to have a framework for any initiatives. Some recommended websites and resources for individuals interested in exploring innovation in sustainability reporting, including:

  • Ceres.org, an investor-driven non-profit looking at the intersection of economics and corporate social responsibility
  • Feltron.com, website of graphic artist Nicholas Felton, who does an annual report on himself
  • Presentation by Saul Griffith, an entrepreneur who has also done a personal GHG inventory and analysis of what it would take to get to 80% reduction

We certainly enjoyed attending this event, and believe that businesses of all sizes can benefit from the best practices shared to better integrate sustainability into their operations, products, and services. For those of you who couldn’t attend, we hope the above discussion gave you some useful tips as you devise your own corporate sustainability strategy and adopt measures to green your operations. And please stay tuned for our next blog entries, to cover the recent LA Business Council Annual Sustainability Summit and Stanford Electric & Fuel Cell Vehicle Showcase!

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