Nike Considered designs will lower the company's environmental footprint.
Earlier this month, I attended a seminar on sustainability innovation in the tech industry at Dreamforce 2010, salesforce.com’s 8th annual conference (anyone familiar with Dreamforce, or with salesforce.com’s CEO Marc Benioff, should recognize this massive understatement—imagine a sales event-rock concert-thought leadership expo and you’ll get a rough idea). Titled “How Efficiency, Collaboration & Innovation Can Help Mitigate Climate Change”, the session brought together Eric Olson, Senior Vice President at Business for Social Responsibility; Lorrie Vogel, General Manager of Nike Considered; and Ted Howes, co-lead of IDEO’s Energy Practice, to share their thoughts on the role of technology in solving one of society’s biggest challenges.
I was particularly intrigued by Lorrie Vogel’s discussion points, which covered two exciting topics: Considered Design, Nike’s closed-loop design vision, and the GreenXchange, an open platform for sharing patented design information (which I will cover in my next blog post). For this discussion, I want to discuss Considered Design and some thoughts about the broader implications that sustainability implementers of all types can draw from Nike’s model.
At its core, Considered Design represents a coordinated approach to tackling what sustainability means (definition) and how it is achieved (implementation). For a major footwear and apparel manufacturer, sustainability issues cut to the heart of business: making core products in a completely new way, without sacrificing quality. Considered Design serves as Nike’s big first step toward realizing a long-term vision of closed-loop design for all of its products.
The initiative began as a set of design ideals (or “ethos” in Nike-speak) adopted by the company. Yet, despite clear vision from company leadership, Nike’s designers struggled with the task of incorporating sustainability principles into their work. The overarching issue the designers faced resonates with many who have considered the issue of sustainability: How, and where, do we start? Nike management answered with the Considered Index, a technology-based tool that gives designers real-time feedback on how well their products measure up against the expectations and goals embedded in the Considered Design ethos. To develop this tool, Nike calculated the lifecycle environmental footprint of all products and processes—from idea generation through final production—and used the results to identify the four areas where design could most influence the company’s overall environmental impact: materials; waste; solvents; and innovation. The Considered Index provides designers with real-time feedback on the predicted environmental footprint of a given product using detailed data for all materials used in Nike’s commercial products. Every available material and design element carries a score within the Considered Index, and built-in benchmarking shows how a product-in-development would rate against the company average. Some highlights of the impact this effort has had so far:
Reduced waste: A new shoe box, planned for use with all shoe products by 2011, uses 100% recycled fiber and features a design that reduces fiber content by roughly 30% over previous models.
Reduced pollution: By 2009, 76% of Nike shoes contained environmentally preferred rubbers (up from 3% in 2004), which are patented formulas that reduce toxins by more 95% yet mimic the performance and look-feel of traditional rubber. There is no cost difference.
Reduced GHG emissions:
Eliminated the use of potent greenhouse gas SF6 from all footwear products.
Reduced carbon emissions from owned facilities and business travel by 18% between 1998-2005 despite facility growth of 6% over that period.
Better farming practices & industry transformation: Organic cotton represents 14% (>21 million pounds) of the cotton fiber used in Nike Apparel products, making Nike the 3rd largest retail user of organic cotton in the world. Nike currently incorporates most of the organic cotton fiber as blend material in apparel, using a minimum 5% blend for 86% of cotton products. The 5% blend has become an industry standard for yarn suppliers who supply a range of other brands and Nike plans to double the minimum to 10% by 2015, a decision likely to ripple across the apparel supply chain.
The Nike Environmental Design Tool, a public version of the Considered Index, was recently released along with supporting data and methodology for public use. Nike documents its sustainability goals and progress in detail in its Corporate Responsibility Report. So what can we pull from this, apart from a clear illustration of Nike’s elegant approach to lightening the environmental load of its consumer products? One of the lessons is that successful sustainability efforts require at least two key elements: first setting a clear vision for sustainability within the organizational context (definition), and then providing employees with the tools to incorporate that vision into their regular job function (implementation).
Energy efficiency, renewable energy, and green buildings - all are hot topics today as the public becomes more aware of its energy use and environmental impacts. We focus on how we can reduce energy use in our homes, offices, cars, and appliances, yet there is a little known piece of the puzzle many of us are missing: water. Supplying, treating, and delivering clean water to our population requires significant amounts of energy. Additionally, significant amounts of water are required to produce electricity in our fossil fuel plants. As water supplies dwindle and water and energy demand increases it’s clear that the water-energy relationship is going to be stressed; this is an issue we cannot ignore.
California consumes roughly 38 billion gallons of water a day to supply its cities and farms. The electricity consumed by California's water infrastructure alone accounts for approximately 7.7% of state’s total electricity requirements. In response to drought conditions and limited conventional supplies, water managers are increasingly looking to unconventional sources (such as desalination) that require significantly more energy per gallon than current supply options today. If we continue down this path, supplying water in the future is going to require significantly more energy, further stressing the water-energy relationship.
While there has been wide scale innovation in the energy sector in the last several decades, the water sector has been lagging. However, a group of experts, entrepreneurs, and volunteers aim to change that. Imagine H2O recently launched its 2010 Water Energy Nexus Prize Competition, its second annual global business plan competition for water startups. The 2010 competition will award $100,000 in cash and services to the world’s most promising water businesses that save energy. Winners are also provided access to Imagine H2O’s Incubator Program that provides free start up services and connections to water leaders, potential customers, and financiers.
This competition is a great opportunity for start-ups looking for assistance in developing their ideas and technologies into successful companies. Last year, fifty entrepreneurs applied for Imagine H2O’s 2009 award (aimed at water efficiency). The competition awarded its grand prize to Fruition Sciences and named two runners up: Rainwater HOG and WaterSmart Software Inc. Follow Imagine H2O’s competition on the web via Twitter or by joining their online community.
The California Sustainability Alliance is pleased to share with you an exciting opportunity for cleantech startups, IBM’s SmartCamp Silicon Valley.
The event, to be held on September 8th and 9th, will bring together entrepreneurs, investors, and experienced mentors who want to build a Smarter Planet. Focused on helping society become more instrumented, interconnected and intelligent, SmartCamp will provide five selected startups with world-class mentorship and a direct route to seed and venture capital. The winner will receive a three month mentorship with IBM and an invitation to the international SmartCamp finals in Ireland on November 15th. Applications are due before August 8th, at http://ibm.com/ie/smarterplanet/smartcamp.
The Alliance will be participating in the event, and we can’t wait to hear all of your great ideas! In the meantime, tell us – what kind of technologies would you like to see to make our planet smarter? What cleantech startups are you most excited about?
In sunny Southern California, no discussion of sustainability would be complete without mention of solar power. At the recent Los Angeles Business Council2010 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 :
Equipment manufacturing and assembly
Professional services
Installation
Monitoring and maintenance over the solar panels’ 20+ year lifetime
Reduces transmission needs and costs (development of new transmission lines takes years and is very costly and litigious)
Signals a commitment to attract cleantech businesses
Saves ratepayer money
At the same time, it is essential to get the details right. Here are the variables DeShazo noted as being of particular importance:
Tariff structure – DeShazo recommended using a cost recovery plus reasonable rate of return structure
Program targets – Commercial targets tend to be best due to larger roof space available, which improves cost effectiveness
Program size – The program needs to be large enough to exceed fixed costs, and should be large enough to attract manufacturers to the region; DeShazo recommended a 500 MW program cap
Phase-in period – DeShazo recommended a long phase-in period, such as dividing a 500 MW total cap into equal parts over a 10 year period
Application & implementation – The process should be timely, transparent, simple, and fair to customers
To start with, the study recommends the following tariff structure and annual targets:
Commercial sector – 40 MW installed each year, with a $0.22-$0.16/kWh FiT
Residential sector – 5 MW installed each year, with a $0.34-$0.18/kWh FiT
Non-profit/Government – 5 MW installed each year, with $0.28-$0.18/kWh FiT
While these tariffs are lower than elsewhere, there is more sun in Los Angeles than in some other areas, such as Germany, that have successfully implemented FiTs; as a result, a lower FiT rate can still produce a similar rate of return. DeShazo also emphasized the importance of reevaluating the FiT every one or two years, to enable the program to be tweaked in light of changing market conditions.
In the panel that followed, ARB Chairman Mary Nichols agreed with DeShazo about the importance of maintaining flexibility in implementation, even as governments and corporations adopt and remain committed to ambitious goals. She also noted that in her experience there is often confusion about policy goals, which makes implementation design difficult – is the goal of renewable policy to develop and support a local cleantech industry? To improve air quality? To mitigate climate change? Different implementation approaches flow from each of these related yet distinct goals.
What do you think? Are FiTs a good idea, or is the long term commitment too big of a liability for utilities (and ultimately their ratepayers)? And which policy goals are most important to you? Do you think FiTs are the best way to achieve those goals? Might other types of incentives be better?
The California Sustainability Alliance recently attended the Los Angeles Business Council2010 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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