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Cities are uniquely positioned to drive the sustainability revolution—whether in concert with national governments (as is possible in some countries) or on their own (which is necessary in some countries).

Cities lead the way in greening transportation, the built environment, food production, procurement, economic development and more, with impacts far beyond their borders. What can cities—and regional clusters of cities—do to create a living model of the green economy?

What do cities do?
Cities perform four key roles, each of which can have significant impact on quality of life, economic prosperity, and environmental sustainability, and provide powerful leverage for change.

Cities express and leverage the public will.
Government, though out of fashion in some US circles these days, is simply “what we do together”—a collaboration to create viable communities and the systems that sustain them. Through general planning processes, zoning and building standards, and economic development policies, cities define the landscape of the rest of our lives—for example by building distributed generation into it.

Cities collect and spend money.
By operating eco-efficiently, in facilities and fleets, cities act as skillful fiduciaries of the public trust and set examples for other developers and operators. By establishing green procurement standards—perhaps in collaboration with local universities, hospitals and businesses to provide economies of scale—cities provide consistent market demand for the businesses of the new economy. By using their bonding authority, cities can guide capital formation and investment to accelerate the new economy.

Cities gather and dispense information.
Cities collect lots of data—their spending, building permits, infrastructure, and more—and can provide open access to most of it, as Palo Alto is doing, both to support transparency and democracy and to fuel the innovation with open APIs. Cities—and regions—can track the resource “metabolism” of energy and materials, and make those and other community sustainability indicators available in interactive scoreboards that let people see progress and compete to do better—in real time.

Cities provide shared services.
In addition to formal educational services, cities can provide technical assistance to support entrepreneurship and the green evolution. In addition to the operating infrastructure of urban life, cities can convene conversations about what we want that future infrastructure to be.

The key:

  • Set compelling goals—not just energy efficient buildings, but net zero buildings. Not just an iconic project or two, but requiring all new buildings to be net zero, all renovations, or, over time, the entire city?
  • Streamline policies, programs and practices. The biggest problem with regulation isn’t that it demands better—or safer— performance; it’s that too often its burdensome or unpredictable. But it doesn’t have to be; design thinking can make it better/faster/cheaper—and more effective.
  • Integrate. Commit to systems-based, multi-stakeholder and trans-disciplinary approaches. Traffic isn’t just a transportation problem; it’s a planning and design problem. Land use isn’t just a planning problem; its a water and hence energy problem. Addressing these issues systemically can challenge existing habits and turf but drive leapfrog innovation and orders of magnitude greater financial benefits.
  • Encourage engagement and open feedback. Giving people a clear line of sight that connects their needs, actions and impacts—and that lets them see how theirs connect with those of others—is one of the most effective drivers of innovation and improvement we’ve seen.

Cities face the challenges we all face: Do we try to slow the damage? or build the regenerative capacity of the living systems that sustain the human experiment. Do we apply band-aids? or build lasting solutions? Do we leave money on the table? or define the markets of the future? In each of these challenges, cities will be pivotal players.

—Gil Friend, Chief Sustainability Officer, City of Palo Alto

This post is a submission to Masdar Engage.

When I learned of Nelson Mandela’s passing earlier this month, I spent the afternoon in tears.

Not tears of grief alone, but of love, admiration, awe, inspiration at the contribution this one man has made—both to the people of South Africa on their long path to freedom, and to the people of the entire world in our daily challenge to understand what it means to be a human being.

There is no passion to be found playing small—in settling for a life that is less than the one you are capable of living.
― Nelson Mandela

Thank you, Madiba.

This month I began serving as the Chief Sustainability Officer of the City of Palo Alto.

As many of you know, I’ve been dedicated for the last 41 years, since cutting my teeth with Bucky Fuller’s World Game in 1972, to connect the human economy with the laws of nature—the time-tested, open-source principles that govern the living systems that underlie the human enterprise and all we hold dear.

After more than 20 years advising corporations and governments, I’ve found myself hungry to shift from an external advisory role to bringing all my experience to bear in one place—as a responsible executive with his ass on the line. This is a great opportunity to do that—in a remarkable community with a passionate citizenry, a tradition of innovation, a geyser of entrepreneurship and, I’m told, a pretty decent university.

Their question to me:

How can we make Palo Alto the greenest city in the country?

My question to them:

What can one small, innovative city contribute to the sustainability revolution?

It’s a thrilling opportunity—one that opens many new possibilities on innovation and influence, and that hearkens me back to my earliest labors in the sustainability vineyards, back at the Institute for Local Self Reliance in the early 1970s. But that’s a story for another time.

Natural Logic will continue operating under the leadership of my remarkable colleagues, notably Natural Logic principal (and long time friend and colleague) Michael Kleeman, senior associate Shripal Shah and others. My own role in client engagements will be much more limited and leveraged, after fulfilling current commitments. I’ll of course continue to speak, blog, tweet, podcast, etc., actively, as well as support a very small portfolio of individual coaching and thought partner clients.

There’ll be more details to come over the coming weeks—and hopefully a chance to speak directly, if that makes sense! Meanwhile, you’ll be able to follow my exploits on my  CSO twitter site and a blogging venue TBA, as well as my usual social media coordinates.

My new contact information for City of Palo Alto business and “sustainable city” matters: gil dot friend; the domain is cityofpaloalto dot org; 1-650.329.2447. For all other matters, please continue to use my Natural Logic coordinates.

My friend Jonathan Koomey‘s invited perspective article, “Moving beyond benefit-cost analysis of climate change”, was just posted by the open access on-line journal Environmental Research Letters.  Here’s the abstract and the introduction.

Abstract

The conventional benefit–cost approach to understanding the climate problem has serious limitations. Fortunately, an alternative way of thinking about the problem has arisen in recent decades, based on analyzing the cost effectiveness of achieving a normatively defined warming target. This approach yields important insights, showing that delaying action is costly, required emissions reductions are rapid, and most proved reserves of fossil fuels will need to stay in the ground if we’re to stabilize the climate. I call this method ‘working forward toward a goal’, and it is one that will see wide application in the years ahead.

Michael Totten‘s comment:

Outstanding article, Jonathan Koomey. I particularly liked this passage, “Delaying action eats up the emissions budget, locks in emissions-intensive infrastructure, and makes the required reductions much more costly and difficult later. The IEA, using the ‘working forward toward a goal’ approach, estimated the costs of delay at about $0.5 trillion US for every year we put off serious climate action [13].

Conversely, early action through technology deployment brings the costs of technologies down through learning-by-doing, which is one manifestation of increasing returns to scale [19]. Because of these and other factors, our choices now affect our options later, which is known in the technical literature as path dependence [19, 20]. Luderer et al highlight the importance of such effects to the economic outcome on climate mitigation, but most conventional models of the economy ignore them [19, 21], with the likely effect of overestimating the costs of reducing emissions.”

My comment:

It’s so clear. Who wants to waste half trillion a year?

Which means the only obstacles are (1) those that profit from the delay, and (2) those that are disinformed by those that profit from the delay.

[I fully intended my recent posting, 5 things I’ve learned in 8 weeks of sustainability conferences, to be provocative. (No surprise there. You may have noticed that I’m inclined to challenge familiar thinking and push the boundaries of what’s possible, profitable and purposeful.) But some readers were more incredulous than provoked, and challenged or at least questioned some of the claims and data I reported. I’ll provide clarifications—and some corrections—next week—once we recover or rewrite the draft that vanished last week. Until then, here’s my sustainability briefing for this week. (You can also listen to me read it to you—and while you’re at it you can subscribe to my new Sustainability Briefing podcast.]

There are two big conferences I’ve been tracking this week. They’re worlds apart, and not just geographically.

The first: the UN Climate Talks in Warsaw, where the global community, as we call it, continues to struggle to find a deal to prevent the gathering storm of climate change. It’s not looking good.

“The talks,” as Reuters reports, “have stuttered over several issues, particularly whether rich nations should pay developing countries for losses suffered due to the effects of climate change, and the lack of ambitious pledges to cut emissions.” In fact 800 people from Greenpeace and WWF & other groups walked out of the talks—the first mass this has happened—to protest lack of progress towards a global deal.

Meanwhile in Philadelphia, some ten thousand people have gathered for Greenbuild, focusing on the $100b green building industry—an industry reportedly doubling in size every three years. Hillary Clinton keynoted last night (and Bon Jovi performed!), but what particularly stands out for me is the growing movement toward “net zero”—not just less damage, but no damage.

Integral Group, a Bay Area design and engineering firm, has, for example, designed 41 net zero energy buildings at last count—buildings that use no more energy than they generate. But what’s notable is this: they didn’t cost a dime more to build, and in some cases less that “normal” or even energy efficient buildings! What’s the ROI of lower operating costs gained through less capital investment? It’s a deal so good that you can’t do the math. In fact it’s an offer you can’t refuse.

It’s not a niche phenomenon—net zero will be required the goal for all new homes in California in 2020 (and for all new commercial (and 50% of existing commercial) structures by 2030).

And it’s not just buildings. Companies as diverse as BT, Dell and Thrive Natural Care are talking about delivering “net good.” Dell has set its target at 10x—delivering ten times more energy savings and climate benefit from their products as it takes to produce and operate them—and while it’s not completely clear how that will be calculated, it’s a commitment worth watching.

At one level, the difference between the climate talks in Warsaw and Greenbuild in Philadelphia is the difference between seeing a vast problem or seeing a vast opportunity. It’s both of course—I don’t mean to downplay the seriousness of the climate tumult ahead. But in my view a primary focus on the opportunity—what Jigar Shah calls building creating climate wealth—a trillion dollars worth of it—is what will let loose the creativity to build a new economy—one that nurtures nature, that makes investors very, very happy, and that uplifts humanity—all seven-going-on-ten billion of us.

I’ve received a number of responses to yesterdays’s post, 5 things I’ve learned in 8 weeks of sustainability conferences, ranging from incredulous to disagreeing, about some challenging statements I made comparing fossil fuel profits with subsidies, and clean energy investment with fossil and nuclear investment.

I’ll post additional clarifications, references (and if necessary corrections) shortly—probably tomorrow.

Thanks for your patience—and your interest!

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 exceeded investment 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 for Unilever— 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.)

1) If you’re wrapping up your Q4 planning and budgeting season, this is a perfect time to invite Natural Logic‘s support for getting your sustainability initiatives designed, elevated and approved. This could include Rapid Diagnoses of your current commitments, risks and opportunities—in as little as two weeks—and our help building Sustainability Roadmaps to get you closer to where you really want—and need—to go.

Ready to go deep? Check out our massive value discovery process. (If you can’t wait, here’s a quick self-assessment you can run right now.) Interested? Drop us a line—or give me a call at +1-510-435-6346.

2) It’s always “employee engagement” season—and always time to take that trending topic from superficial to substantive. How? With on-demand Sustainability In Practice eLearning for your entire organization; Strategic Coaching for executives, teams, leaders and emerging leaders; Thought Partnership With a Thought Leader™ for the spacious thinking that you really need to do but never get to do; or even collaboration in the development of the sustainability simulation gaming that we are creating, together with a handful of sponsoring companies. (No link yet; call if interested).

Want a quick start? Grab our Green Business Field Guide audiobook!

There they go again!

Mother Nature Network has joined the “top 10 list” phenom with 10 people to follow on Twitter who are working to save the world. For some reason (one never knows the logic) they put me at the top of this list—which includes such worthies as Al Gore, Bill McKibben, Marc Gunther, Summer Rayne Oakes, Danielle Brigada, Adam Werbach, Kate Sheppard, The SOAP Group, David Quilty.

But I’m not completely happy about it. Here’s what I posted to MNN’s comments:

Thanks. I’m honored to be in such august company.

But to be clear: I’m not working to save the world. I don’t believe in saving the world. The world doesn’t need saving. This ball of rock will continue hurtling through space at 18,000 miles a hour, and the thin film of life that coats it will eventually recover from any perturbation that we throw at it.

The human experiment, however, this thing we call civilization, and all we hold dear (including what indigenous cultures call “all our relations”), well that’s another story. I am working to save that—or more accurately, to help it [continue to] evolve.

My focus: to re-invent the economy of this planet, in one generation.

My “north star” (thank you Bucky Fuller): “a world that works for 100% of humanity, in the shortest possible time, through spontaneous cooperation, without ecological offense, or the disadvantage of anyone.”

The question at the heart of all my work: “Life in service of business? Or business in service of life?

We interrupt our regularly scheduled programming for this week (which was going to be a rant on why “scale”—as in “will it scale?”—is not all it’s cracked up to be, why it’s part of the problem, and what to do about it), to bring you early reviews of two books that I’d like you to read right now. Seriously.

Optimism of any kind is in short supply these days. I should know; as a lifelong, congenital optimist, lately I find myself struggling daily to maintain focus and momentum in the face of the news from the atmosphere, and from Washington. There’s plenty of good news, to be sure: the accelerating pace of technical and business innovation;  the continuing spread of solar grid parity, now covering most of the US; the emergence of Africa; and so much more. And still, some days it takes a supreme act of will—kind of like Wile E. Coyote’s ability to keep running as long as he doesn’t look down—to do the work to drive the change to open the future.

That’s why it’s so encouraging to have two new books for two days carrying messages not of hope—hope, after all, is not a strategy—but of grounded optimism. What do I mean by that? Not just “wouldn’t it be nice” and “all will be well”—that’s the optimism—but also “this can work, for these reasons” and “here’s what it will take,” based on actual experience—that’s the “grounded” part. In the case of these two books: detailed, richly textured views of a future that is both within reach and that we might actually want to bring into being – and want to live in. And fairly substantive sketches of the roadmaps that might take us there—from people who’ve been deep in the work—and elements that might belong on your roadmaps.

As you know, I’ve long seen sustainability – or more specifically the opportunities that a sustainability lens discloses—as the biggest business opportunity of the century. Jigar Shah, founder of Sun Edison and founding CEO of the Carbon War Room, sees me one and raises me one. Creating Climate Wealth,”” says his promo kit, “is about how climate change—the biggest challenge of our time—can be turned into a $10 trillion dollar wealth-creating opportunity.” But Jigar is not just throwing around big numbers;  the book lays out a strategy for reaching our 2020 climate change goals through 100,000 companies worldwide, each generating $100 million in sales.

In an even more expansive vision, Jonathan Porritt (co-founder of Forum for the Future) brings us a detailed and evocative look back from 2050 at The World We Made. Through the motif of a history teacher offering “50 snapshots…drawn somewhat randomly from things that have happened over the last 30 years or so,” Porritt provides an engaging roadmap of change in nearly every domain of concern, from climate, energy, agriculture, food and water, to economics and finance, politics and security, technology and manufacturing, and more. His hat trick is that the read is wide and deep at the same time, both substantive and quite evocative. And it’s built on the sort of specifics that make sense, that are believable extrapolations of things we know now or can see just around the corner, and that can make money.

I’ve just gotten both books, so I haven’t read them in depth yet. But I will. You should too.