Archive for April, 2011

How to Run a Sustainable Business

For Judy Wicks, good business is about quality and caring.

For twenty-six years, restaurateur Judy Wicks poured her energies into the White Dog Café in Philadelphia.  Though the restaurant started and remained relatively small, there have been many other ways that Wicks has measured growth. She’s never bought into the dominant paradigm that growth is defined solely by increased profits, even though she does believe that economic exchange can be one of the most satisfying and meaningful ways that humans interact. As Wicks sees it, growth is also about increasing knowledge; expanding consciousness; developing creativity, deepening relationships, increasing happiness and well being – and having fun.

“Money is simply a tool, she emphasizes. “Business should really be about relationships – with everyone we buy from and sell to, everyone we work with, and with the Earth itself.”  Wicks made a conscious decision to stay small; to be one special restaurant rather than a chain. She hung a sign in her closet that she’d see each morning: “Good morning beautiful business.” The sign reminded her of the farmers who were already out in the fields picking fresh organic fruits and vegetables; and the pigs, cows, chickens that were out in the pastures, enjoying the morning sun and fresh air. She would think of the restaurant’s bakers coming early in the morning to put cakes and pies in the oven, and she’d even remember the growers down in Chiapas, Mexico, growing the organic fair trade coffee beans that made her restaurant so fragrant each morning.

Callout Title
“Good morning, beautiful business.”

The relationships and beauty she’s after have been reflected over the years in various programs, activities and spin-offs. For example, her decision to pay staff a “living wage” was the result of her realization that the people she worked with were very important to both her and the business. A living wage is a voluntary commitment by a business owner to pay employees the minimum amount needed to cover the cost of living in a particular location. It’s typically far above the federally mandated minimum wage, and at first Wicks refused to consider it.

Then one day she stood in the kitchen with three of her kitchen staff as they chopped vegetables and sliced meat.  “Looking at their faces, I had an instant realization,” she recalls. “Of course I wanted to pay Brian, Tyrone and James enough to live on – to buy food, clothes, pay their rent and other expenses. How could I not pay people working at the White Dog enough to cover basic needs?”

A table for seven billion, please.

Another epiphany came when she drove to a favorite hiking location, a forest north of Philadelphia. “The beautiful ferns that I loved were crumpled to the ground like brown tissue paper because of the drought we were having,” she recalls.  “And the creek, once rushing waist-deep, had no water at all, only dust-covered rocks. ‘This is what it will be like, I thought, when global warming brings drought and fire to some parts of the world and storms and floods to others.’” Her personal connection with nature prompted a commitment to purchase 100 percent of the restaurant’s electricity from renewable sources.

The White Dog became known for serving healthy food from local sources. It was worth the extra effort to her for several reasons: the direct relationships with farmers and growers build community and provide transparency about quality; local food reduces “food miles” and carbon emissions; and the much fresher food is superior in taste and nutrition. She was especially concerned about the drawbacks of standard factory and feedlot farming of livestock, so she made an effort to find local sources of grass-fed beef and pasture-raised pork. Still another chapter in her business evolution followed an “aha” realization that she was part of a much wider food system. She became as much an activist as business owner, sharing her hard-earned market niche with other restaurants throughout the city. “I had to move from a competitive mentality to one of cooperation in order to build a local economy based on humane and sustainable farming.”

The White Dog soon became an education and support center. When the farmer who supplied the restaurant with organic pork needed a refrigerator truck to expand his business and supply other restaurants, Judy Wicks lent him $30,000, which he has since paid back. Every year, Wicks staged a Green Dog Day to talk about green business practices and launch new green initiatives, which included a compost project that supplied compost to inner city school gardens; a solar hot water system to heat dishwasher water, and a ban on bottled water.

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“I receive not only a modest financial return, but also a ‘living return.’”

The White Dog Cafe mixed good intentions and good nutrition.

Judy Wicks’ overall vision – a sustainable global economy based on a worldwide network of sustainable local economies – has now spread to many other communities. She co-founded BALLE, the Business Alliance for Local Living Economies, in 2001, which now includes 80 or more local networks and over 20,000 locally owned businesses.  One of the best examples of BALLE’s mission is Sustainable Connections in Bellingham, Washington, which now has 600 independent businesses in its membership. Recognizing the need for a new generation of farmers to provide locally grown food, that program has offered apprenticeships to 30 or more new organic farmers in the past three years.

Choosing a place and taking responsibility for it is the first step in building a local living economy, she asserts. Ten years ago, she sold her stocks and put her life savings into The Reinvestment Fund, a Philadelphia community investment group that loans money to support things like affordable housing, local businesses, and community centers. “I soon discovered that the wind turbines producing renewable energy for our region, including my own home and business, were financed by The Reinvestment Fund,” she recalls. “From my local investment, I receive not only a modest financial return (which has recently outperformed the stock market), but also a ‘living return’  – the benefit of living in a more sustainable community.”

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Prospecting for Energy Savings in Business

U.S. business will play a key role in achieving President Obama’s call for 80% of U.S. electricity from clean energy by 2035 or before, and the billions of dollars saved can also put people back to work. Forward-looking companies and federal incentives have stimulated industrial process innovations, lighting upgrades, and fleet fuel efficiency improvements, but there is still a mother lode of opportunity to generate much less industrial energy per unit of product – a third to a half less.

Profit isn’t the only stimulant.  Especially important in the U.S. are renewable energy standards set by twenty-nine states, mandating that increasingly percentages of electricity must be generated by renewable technologies in specified time periods. (Another five states set ambitious voluntary goals.) Together, these states consume close to half the country’s electricity; when New York called for 24 percent; Illinois 25 percent, and California, 33 percent, renewable energy as an industry swiftly moved from fantasy to reality. EPA’s declaration that greenhouse gases would be indeed be regulated as air pollutants was another stimulant, as is the virtual guarantee that Congress will eventually pass a climate change bill, putting a price on carbon emissions.

Another key policy strategy that may soon be on the table is the incremental shifting of subsidies away from the coal, oil and gas industries – which annually amount to $47 billion or more – and toward renewable energy. Belgium, France and Japan have phased out subsidies for coal, and Germany intends to phase out the entire industry.  encouraging innovation and helping to shift automakers toward efficiency.  Another great idea is share the profits of efficiency improvements along the whole supply chain, making designers, builders/manufacturers and marketers stakeholders in innovation.

Where Industry Spends Energy, and How to Spend Less of It

Industrial Processes (these percentages are author estimates based on various sources)

40% petroleum refining and chemical manufacture

19% steel

8% other metals

9% paper

7% cement

5% food processing

Heat generated in industry and power generation often goes up the stack or into the nearest river. Yet energy expert Tom Casten estimates that the waste heat could provide up to 20 percent of U.S. electricity needs (up from its current 7 percent) if it was used to turn turbines. The concept is simple: when you have waste heat, generate electricity; when you generate electricity, use all the waste heat. Called cogeneration, this technology is already widely used in metals, glass, and silicon manufacturing. Waste heat can also be used to heat or cool (with absorption chillers) buildings and campuses. Denmark and the Netherlands generate 40 percent of their electricity with cogeneration, and also widely employ “district heating” in buildings.

The petrochemical industry uses more energy than any other manufacturing sector, yet certain trends may begin to significantly reduce energy consumed. For example, research is expanding in the field of green chemistry, using chemicals that come from living organisms (such as microbial enzymes or soybeans) rather than once-living organisms (such as fossil fuels). Green chemistry pathways typically use less energy per unit of product because they take place at room temperature and have fewer intermediate steps. (However, this transition will be gradual because some chemical pathways and reactions are centuries old standard practices.) If organic agriculture takes a larger share of the market, less energy-intensive nitrogen fertilizer (which comes from fossil fuel) will be necessary to produce the same yields. Trends that may reduce energy consumed in the manufacture of energy-intensive plastics include a backlash against plastic containers because of health and environmental effects; a trend toward localization, reducing the need for plastics in shipping; and a gradual transition to plastics made with green chemistry.

By using recycled rather than virgin steel, paper, aluminum, plastics and other materials, the worlds’ most energy-intensive manufacturing industries can radically reduce energy use. For example, the recycling of steel cans in the U.S. is currently only 60 percent, but as that percentage increases, more efficient equipment that utilizes recycled materials can be used. According to the Environmental Policy Institute, if three fourths of steel production were to switch to electric arc furnaces using scrap, energy use in the steel industry could be cut by almost 40 percent. Similarly, if all cement producers worldwide used the most efficient dry kiln process in use today, energy use in the cement industry could drop 42 percent.

It’s a similar story throughout the industrial sector: recycling and changing the processes in energy-hungry industries like paper, cement, aluminum, transportation equipment, and fabricated metal products can reduce overall energy consumption in manufacturing by 50 percent or more. However, in some cases, cultural change may produce larger reductions than efficiency improvements. For example, more than one-sixth of the energy used in the food processing industry is used in animal slaughtering and processing. Only a reduction in meat eating will significantly reduce energy use in this case. About half of the paper manufactured is used for packaging and wrapping paper; about 30 percent is printing and writing paper; and 20 percent is newsprint and household uses. With a noteworthy trend toward more regional buying; the failure of many newspapers and magazines; the reduction of paper use from cost-conscious changes in office policy; and increased use of electronic products like Kindle, only toilet paper is likely to remain at current levels of production. (And even there, a transition to a narrower width and less “fluffy” paper can reduce materials and energy use).

The innovative European experiment with “extended producer responsibility” (also known as the Take-Back Law) may well lay the groundwork for a radically different flow of materials through the global economy. This law requires manufacturers to take their products back at the end of their useful lives. Rather than ending up in a landfill at the end of their useful lives, packaging, electronic products and other goods are collected at central locations and sent back to manufacturers. This brilliant political innovation encourages designing for durability, modularity, and non-toxicity in products, and increases recycling by closing the loop in the flow of “nutrients,” just as nature does. EU countries have also adopted industry-altering efficiency standards for 23 different appliances and electrical end-uses, from battery chargers to street lighting. Even more ambitious is Japan’s Top Runner program, which sets appliance standards based on the most efficient products already on the market. Though voluntary, this program successfully relies on Japanese pride in quality products to set – and mentor – new performance levels.

Commercial (Service-providing offices, businesses and government.)

30% lighting

14% heating

13% cooling

10% office equipment

7% water heating

6% water heating

6% ventilation

4% refrigeration

“We can compost and conserve all we want at home,” writes Time Magazine journalist Lisa Takeuchi Cullen. “But as soon as we hit the office, we turn into triplicate-printing, paper-cup-squashing, run-our-computers-all-night-so-the-boss-thinks-we’re-working earth befoulers.” A single office worker can easily go through 10,000 pieces of copier paper a year, in cahoots with computers that collectively burn $1 billion worth of energy a year when they are not even being used. Offices, stores, and public buildings consume more than 70 percent of the electricity used in the U.S., and are responsible for more than a third of the country’s carbon dioxide emissions. Heating, cooling and powering the se buildings has become one of humanity’s biggest energy challenges.

The challenge is to design and construct (or retrofit) greener buildings that provide light, heat, coolness and electricity for equipment far more efficiently. At the Ford Motor Company’s Rouge River Plant, a 10.4-acre, heat- absorbing roof surface was replaced by a “green roof” of hardy plants that keep the building cooler in summer and warmer in winter, reducing energy consumption by 25 percent. Two New York City office buildings – one recently constructed and the other – the iconic Empire State Building, built back in 1931 – are also raising the bar of green building design. The 4 Times Square Building, 48 stories high and with 1.6 million square feet of office space, was designed with sophisticated energy software to ensure that lighting, windows, and heating/cooling systems work together optimally. 15 kW of photovoltaic panels were integrated right into the sides of the building – doubling as a construction material – and two large fuel cells supply 100 percent of night-time electrical needs and 5 percent of peak load needs. The hot water by-product from the fuel cells helps heat the building as well as its potable water.

The Empire State Building project, which will save building occupants $4.4 million a year, demonstrates that a combination of computer-age logic and upgrades to windows, lights, plug-load controllers and air conditioning systems can reduce energy consumption by forty percent in existing buildings – a critical finding since at least 10 percent of the energy a building uses in its lifetime is consumed in construction and demolition. The U.S. Green Building Council, which administers the coveted LEED certification awards for building efficiency, has recently added awards for building retrofits. These include installing automatic shutoffs – occupancy sensors – for lighting, and snooze controls that power computers down automatically after 15 minutes of idle time, cutting a machine’s energy use by 70%.

One of the most interesting heating and cooling innovations for a large building is the Eastgate Centre, Zimbabwe’s largest office and shopping complex. Convection tubes used by African termites to keep their mounded, high-rise colonies cool inspired this passive cooling design. Taking advantage of large temperature swings from dusk to dawn, the design breathes fresh, cool air into the building, reducing energy consumption by 90 percent compares with conventionally cooled buildings. A similar strategy has recently been used at a London building across from Westminster Palace.

And the British are also front-runners in the adoption of LED lighting.  Buckingham Palace has recently been given a royal makeover, including the conversion of 60-foot high ceiling lights, chandelier fixtures, and exterior lights which last as long as 22 years. So stingy with electricity are the LED bulbs that lighting the palace’s entire façade requires less electricity than running an electric teakettle.

There’s no doubt that compact fluorescent bulbs have already led the way to light bulbs that are semi-permanent, more like plumbing fixtures. But currently designed, CFLs contain mercury, which typically becomes a hazardous waste when the bulb finally burns out. Most CFLs are not dimmable, so they always use maximum power regardless of how much light is needed. Still, they have saved a lot of energy and reduced a lot of greenhouse gas emissions already; from 2001 to 2006, global sales of these energy miser bulbs more than tripled, from 750 million bulbs to 2.4 billion. Maybe CFLs just need a deposit system that ensures they’ll be recycled.  And since LED bulbs have a few problems of their own, CFLs are likely to be around for awhile. LED light works better as a spotlight rather than a multi-directional light. Although their lifetime is up to four times as long as a CFL, the quality of light degrades over time.

However, one thing is certain: the Edison bulb, which converts 90 percent of its electricity to heat, is headed for the museum, unless it can be radically upgraded.  Various studies suggest that completely converting the world’s fixtures to LED technology could slash carbon dioxide emissions from lighting by up to 50 percent in 20 years. In the U.S., lighting currently consumes about 6 percent of all energy use. With a boost from federal stimulus funds, lots of cities have already installed the low-maintenance LED bulbs for street and parking garage lighting. Three major California cities, Los Angeles, San Jose and San Francisco have by 2010 installed about a quarter of a million bulbs.  The next major market is likely to be office, retail, and government buildings.  There are about half a million federal buildings alone in the U.S., according to Earth Policy Institute, and they will pioneer the use of LED lighting.

As a result of these many converging and interacting forces, governmental policies are beginning to yank global energy systems in a new direction, just in time.

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