5 Things I've Learned in 8 Weeks of Sustainability Conferences by Gil Friend
- Category: Vision
- Published on November 12, 2013
- Written by Gil Friend
For most of the past eight weeks, I’ve been on the road at sustainability conferences*: New Metrics,Sustainability Applied, a private company briefing, Cities Alive, Net Impact, the SRI Conference, CleanTech Future.
Keynoting some, moderating some, occasionally a civilian. (I missed SXSWeco, alas, and Bioneers and the San Francisco Green Festival for the first time in maybe forever.) I’m tired but enriched—fired up, actually—and want to share a few impressions with you.
We’re headed for a world of hurt
We don’t know whether we face step function changes in climate – such as suddenly losing the Greenland ice shelf – and we may not know until – and if – it happens. But we do seem to be witnessing a serious acceleration of extreme climate events. A single billion-dollar storm event per year in the 1980s, five per year in the 1990s and oughts, and more than eight per year so far this decade—and now the Philippines super storm with landfall winds 50% more intense than Katrina’s. The deniers and their bought-and-paid-for cronies and legislators can dissemble all they want; insurers are taking this seriously—as are coastal cities around the world, who see the massive call on infrastructure investment coming.
We’ve turned the corner
And yet, the shift toward a renewable—or perhaps even regenerative—economy is accelerating faster than many of us expected. Solar is at grid parity right about now, and investment in renewables exceededinvestment in fossil and nuclear energy combined last year. Companies are not only realizing substantial cost savings from eco-efficiency – $450 million over 10 years for Interface Flor, $395 million in two years forUnilever— but also substantial top line revenue gains from sustainability focused product innovation – half a billion or so for Levis, $130 billion for General Electric. (See Creating A Regenerative Economy, the recent piece in Fast Company by John Fullerton and Hunter Lovins.)
Defective thinking + massive economic distortions hold us back
Yet people—and companies—who should know better continue to assume, based on habit more than data, that greener will cost them more money, or make them less money; that you have to choose between making money and making sense. You don’t. (See above.) The opportunity would be even more dramatic were it not masked by the massive economic distortions of both direct subsidies transfer payments and tax loopholes, and the indirect subsidies of un-monetized externalities. When the subsidies to the coal industry exceed the market cap of industry, that’s not a business; that’s a dead man walking. When the subsidies to the oil industry are three times greater than the profits of the oil industry, that’s not a business; that’s transfer payments from taxpayers to shareholders, and one day taxpayers might just say “enough!” When half of Walmart’s employees require public assistance to compensate for insufficient wages, that’s not a business; it’s a scandal. (Here’s a new metric for you: what’s the ratio of your company’s profit to the direct and indirect subsidies it receives?)
Disruptive innovation is good news or bad, depending on where you sit, but it’s comin’ ta getcha!
We are in an era of entire industries being turned on their heads – the time when business model innovation may be even more significant than technical innovation. Think AirBnB, which put as many beds under management in seven years as the leading hotel chains did in 70. Think ZipCar, which claims a 10x improvement in capital efficiency – and a profound challenge to the automobile industry. Think 3-D printing. The list goes on. Here’s the deal: you have two choices: blow up your own business model and work like hell to make sure that you’re the one to replace it with something better and more profitable; or dig in your heels and hope to hell that somebody else doesn’t blow your business model out from under you (though they probably will). There is no third choice. (And, by the way, money isn’t what motivates your people.)
Software, finance & cities are key—but there’s still plenty to do in the world of stuff
Software will eat the world, Marc Andreesen promised us, and we see its transformative impact in Sungevity‘s “virtual solar design,” Verizon’s smartgrid enabled thermal storage, WeatherBug‘s big data for home-specific thermodynamic profiling and Climate Corporation‘s hyper-granular crop insurance. FinTech may have the world for dessert, as “socially responsible investment” grows up from the negative screens that got it started; performance parity with less diversification has most asset managers’ attention, but the real game is outperformance. Massive outperformance. GE’s venture into the industrial Internet, for example—where big data meets meets big things that spin—promises to deliver more to the bottom line from a 1% improvement in jet engine efficiency than the total current profit of the airline industry.
There’s more to talk about—engagement, infrastructure, China, more—but that’s enough for today. I’ll have more to add in coming weeks. Meanwhile, my questions for you—whether as a company executive, a government official, an investor or a citizen:
- How will you protect yourself from these trends?
- How will you benefit from them?
- How will you drive them?
- How will you even discuss them?
My suggestion: Talk with me. That’s what we’re here for.
(*You can find my tweetbooks for several of these conferences here.)