World is Green

Forbes has a collection of possible green jobs which have a future in the coming years.

The greening of industry is creating a constellation of new careers, and they’re not your everyday forestry professions. Many of them are environmental twists on old professions, like law, or in Makower’s case, journalism. Others are engineering careers tied to research in renewable technologies like wind energy and ethanol production. For instance:

– Emissions brokers: In a market economy, credits to emit greenhouse gases can be traded on an exchange, and brokers facilitate the deal. If the U.S. ever moves to a mandatory trading system, expect this field to boom.

– Bio-mimicry engineers: This new branch of science uses Mother Nature as a model for solving engineering problems. For example, Atlanta’s Sto Corp. created a self-cleaning paint that repels dirt whenever it gets wet, just like the lotus leaf does.

– Sustainability coordinators: Corporations from AstraZeneca to Wal-Mart are now employing managers to oversee the economic and environmental components of company efforts.

– Green architects: With an increasing focus on energy-efficient buildings, a growing number of architects and developers are getting certified to become specialists in green design.

Universities–particularly business schools–also see opportunity. Schools such as Stanford, the University of Michigan, the University of North Carolina and the University of Michigan offer joint M.B.A./environmental science masters degrees. Derrick Bolton, director of admissions at Stanford’s Graduate School of Business, says many students are taking positions with corporations that have a commitment to the environment.

Makower’s advice to students pursuing a green job is to learn all they can about business. The most exciting things are happening in product design, research and development, manufacturing, and buildings and grounds. “If you go into the environmental part of a company, you become ghettoized,” he says.

The slideshow has more jobs. If you follow the jobs; a pattern emerges. A green job is not a new kind of job except say, a Sustainability Coordinator, but it is more of a twist on the old jobs. A emissions trader is a trader first; a bio-mimicry engineer is a engineer first and so on.

Makower has some good advice. It is important to gain a skill and then have a green tinge to it and not get pigeonholed into a environmental division. If the current trend continues then environmental/sustainability principles will become part of business (like quality standards, customer focus, financial analysis). Good design will have sustainability principles but there cannot be one ‘green designer’. In that sense, environmental divisions will become redundant. The environmental lens will become part of the other lenses used by executives.

Writing this blog post, I realise that I need to rethink of where I am going!

It’s been raining Khosla for sometime now here. In a Gristmill article, Timothy E. Wirth, Vinod Khosla and John D. Podesta write about the economic rules that create new markets and how they can make a difference in the clean energy market.

Voters, investors, activists, business leaders, and policy experts are pushing for clean energy to create jobs, limit climate change, and reduce America’s dependence on foreign oil. And yet, progress is slow: oil imports and carbon emissions continue to rise. Why?Because the rules of the game — the laws, regulations, subsidies, and tax credits that shape the energy market and the way it acts — continue to make fossil fuels a less expensive, more convenient choice for consumers.

These rules are both the heart of the problem, and the key to a solution.

…Change won’t come until the price is right. That price is set by the market, the market is shaped by rules, and the rules favor fossil fuels.

If we want to change the future, we have to change the rules…

The rules today give oil and gas companies — the most profitable industry in the history of the world — billions of dollars in tax breaks and research subsidies…The rules perpetuate our energy habits…We need new rules that will make the best choice for the country also the best choice for consumers.

…Today, we are on the cusp of a similar revolution in energy, but the old rules are still in place. There is a lot of money ready to invest, but too few good investment opportunities. To enable those emerging products and technologies to succeed, the most important thing we can do is change the rules…

The future of energy is not terribly complicated to envision:

• Clean energy: We’ll use new, renewable sources of energy: more biofuels and less oil, more wind and solar, and less coal and natural gas.
• Energy efficiency: Our homes, office buildings, cars, and appliances will require less energy, and we’ll have better ways to manage that use.
• Carbon capture: Emissions from coal-fired power plants will be captured and pumped underground.
• A “smarter” grid: Digital technology will finally come to the electric power grid, making it more efficient, more reliable, and better able to draw on renewable resources. It should become a national grid, like our highway system, so any renewable or non-renewable electricity generated in any part of the country can be transmitted to market.

Here are five more rule changes that would reduce emissions, give consumers new choices, launch new businesses, and accelerate the profitable transition to new energy technologies:

Put a price on carbon.

Putting a price on carbon dioxide — through a cap-and-trade system similar to the one that reduced acid-rain pollution at low cost — would end the use of the atmosphere as a free garbage dump and create a market for any technology that reduced global-warming emissions.

Set “carbon efficiency” standards for vehicles.

The debate over fuel efficiency standards has bogged down in finger-pointing between Washington and Detroit. To break the impasse, Congress should pass tough standards for “carbon efficiency.” If companies had to reduce the average carbon emissions of their fleet, it
would encourage them not only to build lighter, more efficient vehicles, but also to build cars that can run on biofuels and on electricity — rather than simply updating the internal combustion engine.

Make energy efficiency the business of utilities.

Today, in almost every state, utilities make more money as their customers use more energy. We should flip those incentives. Utility companies in California are compensated for helping their customers reduce their energy use. They make money by helping customers install better insulation and use more energy-efficient products. When a utility can make more money helping people save energy rather than use energy, that’s a smart set of rules.

Modernize the electric power grid to be more efficient and better deliver clean energy.

Nearly every sector of the economy has been made more efficient with the introduction of information technology — but not the electric power grid, which still operates on 50-year-old technology. A modernized, digitally connected national electricity grid will be more secure, reliable, and resilient, allowing quicker restoration of power after outages and the ability to avert large-scale blackouts. Renewable electric power should be given priority access to such a grid.

Increase government support for clean energy.

No industry of any consequence to the country has grown and thrived without government support. According to the Government Accountability Office, the oil industry alone received more than $140 billion in subsidies and tax breaks between 1968 and 2000. In the 21st century, the U.S. government has just as much interest, if not more, in the success of clean energy.

These five rule changes will help build a market-based system in which companies and consumers can advance the national interest by acting in their own self-interest.

…We can try to scold people into embracing sacrifice — and change nothing — or we can offer the kind of choice that can change the world, which is choice that is cheaper, cleaner, better. Choice is what markets do best, but not if government is standing in the way with old rules that favor the industries of the past.

Climate change and oil dependence are pushing us toward a clean, renewable, efficient energy future. The profits to be made in making and selling these technologies are pulling us in the same direction. With one strategic leap, we can wipe out two of the biggest threats to our children’s well-being while creating the high-tech industries that will employ them in the future.

If we just change the rules.

Vinod Khosla has a large portfolio of energy investments which I had blogged about yesterday. Since the time I had known his interest in bio-fuels he has moved on. This intrigued me and I wanted to understand his thinking behind the “energy issue” and what could be the possible solutions.

Khosla on his website provides some resources to the issues close to his heart. In one of the essays titled Environmentalists vs Pragmatists (Download: Word Doc) he comes out with a strong case against the ideas of Dr. Hermann Scheer. Dr. Scheer is a Member of the German Parliament and he has introduced a novel solar scheme in Germany which has transformed the solar industry in Germany and makes it a world leader in this area.

Sometime back, Scheer and Khosla had a debate on “how” to solve the energy issue and the related pollution problems. Scheer backs renewable energy; especially solar cells, and wind; he is against the electric grid and prefers a government mandated, higher cost, distributed, solar generation for every home.

In this essay, apart from making a case against Scheer’s ideas; which he calls Scheer nonsense and he provides a good look into his understanding of “the energy issue”, what kinds of solutions will work, his investment philosophy, and thus, leading to his investment decision making.

Recently, I was on a panel with Dr. Herman Scheer, a member of the German parliament and the president of EUROSOLAR (The European Association for Renewable Energy) and a much honored “environmentalist”. Suffice it to say that there was great commonality of goals but significant disagreement about “how”……India, China, and other countries are rapidly industrializing and bringing basic electric power services to their peoples. Their development, like US electric power, follows least-cost options. Our least-cost electric power options – coal-fired power plants – are by far our most destructive and dangerous ones…

…As such, we must address some basic rules: For any energy scheme to be viable, it must be cost effective, and it must be scalable. If solutions don’t get adopted in India and China global warming control efforts are futile. To scale, they must make economic sense in China and India….If we allocate the same carbon emission per person worldwide (an equal right to pollute for every human) we are toast at anywhere near current levels of US emissions or even at levels of carbon emission in Europe…To achieve these goals, we must provide services that consumers want and prefer over their non-sustainable fossil competitors, while at the same time be profitable for business…

…Applications that meet the engineering needs but fail to meet the commercial ones are doomed to failure, which provides one of the key reasons for my disagreements with Dr. Scheer. …

Two things Khosla suggests are important to understand. First, it needs to be a low-cost option; commercially viable and acceptable in India and China; and second, an equal right to pollute for every human; which is the argument of per capita emissions that I have made several times.

Read the rest of this entry »

Vinod Khosla is one of the most successful venture capitalists in the world, mostly as a General Partner at Kleiner Perkins and before that he was one of the founders of Sun Microsystems. He recently started Khosla Ventures where using his own money he has been making investments in the areas of clean tech, environmentally friendly technologies and micro-finance. (Trivia: I had the opportunity to work in Deeshaa Ventures which was based on the idea of RISC (Download : RISC paper) co-authored by Atanu Dey and Khosla)

For sometime now he has been a big proponent of alternative energy and the way to end the reliance on oil. On his website he provides a good set of resources on his ideas in these areas.

Khosla gave a speech as part of the Management of Technology Lecture Series earlier this month at the Haas School of Business in Berkeley. VC Ratings was there and provides a fantastic overview of his energy portfolio. (Hat tip: Peak Energy Delicious)

Most of the companies are based around the general themes of making coal, materials, efficiency and oil more efficient. Then, he further refines them by grouping his investments according to the type of energy that the portfolio companies are trying to improve or harness. Here are the specific investment themes and companies that fall into each category:

1) Cellulosic - Mascoma, Celunol, Range Fuels, 1 stealth startup

2) Future Fuels - LS9, Gevo, Amyris Biotechnologies, Coskata Energy

3) Efficiency - Transonic Combustion, GroupIV Semiconductor, 1 stealth startup

4) Homes - Living Homes, Global Homes

5) Natural Gas - Great Point Energy

6) Solar - Stion, Ausra

7) Tools - Nanostellar, Codon Devices, Praj

8) Water - 2 stealth startup

9) Plastic - Segetis, 1 stealth startup

10) Corn/Sugar Fuels - Altra, Cilion, Hawaii Bio

The list of startups provides far more information about Khosla’s efforts in this area than has been revealed before. Khosla’s web site only lists two cleantech startups. And a few others such as Altria and Cilion have been publicly announced listing Khosla Ventures as an investor.

The best part of the above list is not even the sheer scale of his investments. It is his understanding of the big picture in energy options and dividing all his investments based on specific area including energy efficiency. He is betting wide in this area which may suggest that one, he is not yet decided on the best combination of alternative energy options that will be needed or two, we can interpret that it is a combination of sources combined with energy efficiency measures that will make the difference.

All in all, this is amazing and one to follow.

Rana Kapoor, the CEO and MD of Yes Bank, writes in the Financial Express about the opportunity for financial intermediaries in India in the sustainability field.

The sustainable finance niche in India represents a hitherto untapped yet potentially tremendously rewarding opportunity, and the time is right for socially responsible and sustainable investing (SRSI).

The concept of ‘sustainable finance’ and the recognition of availability and use of municipal financial resources determine the future of every community. It links four basic elements—vision, environment, plan and public—for a comprehensive planning approach.

Unlike its developed counterparts in the West, India has the opportunity to grow in a way that mitigates the costs of environmental and social degradation. This, in turn, presents a vast range of opportunities for India’s financial sector, given its unique role as an economic intermediary and vast ambit of influence over diverse stakeholders.

There are numerous global voluntary initiatives focused primarily on the financial sector, such as the UNEP-FI and the Equator principles, that banks can use as tools to translate their respective visions of sustainability into action plans. In addition to mitigating risks and enhancing a bank’s risk management capabilities, the incorporation of these principles opens up new markets and avenues for product differentiation. Those financing infrastructure projects, for example, can focus on green businesses or support initiatives in microfinance to help alleviate poverty.

I believe that India’s growth story provides tremendous opportunities for its financial intermediaries—from funding sustainable projects in the areas of efficient resource management to offering innovative products and services in the areas of carbon emission trading and microfinance, among others—to use sustainability as a strategic tool to enhance its own as well as the country’s competitive advantage.

In my quest to understand Sustainability and its linkage to business; Geoff Wells has been playing the role of a mentor to me for the past year. Geoff Wells is currently the Joint Managing Director of Imperative Plus Pty Ltd and a Adjunct Professor at the International Graduate School of Business in Adelaide where I studied my MBA.

Geoff has been blogging  for a few months now. If you are interested in sustainability and business and want to understand from a leading thinker in the field, look no further.

Check out his blog here.

The McKinsey Quarterly runs an interview (free reg) with Al Gore and David Blood “former US Vice President Al Gore and David Blood, previously the head of Goldman Sachs Asset Management, set out to put sustainability investing firmly in the mainstream of equity analysis. Their firm, Generation Investment Management, engages in primary research that integrates sustainability with fundamental equity analysis”

What did the history of sustainability investing teach you?

David Blood: Sustainability investing has a long history, starting back with the first wave of negative-screening strategies, where investors excluded entire sectors based on a set of ethical criteria. This strategy remained niche; returns were lackluster due to the fact that your investment-opportunity set was limited. The next wave of sustainability investing was called the positive-screening, or best-in-class, approach. That’s the philosophy of the Dow Jones Sustainability Indexes and the KLD Broad Market Social Index—these indexes replicate the underlying benchmarks but select only the best performers on environmental, social, and governance parameters.

However, the problem with this approach is that it’s difficult to get a real sense of what’s happening in those businesses, because it’s basically a one-size-fits-all approach, often using questionnaires for decision making. In addition, often one team does the sustainability research and then hands it over to the investment team to do the financial research. That approach, we believe, has too much friction in it because it misses the explicit acknowledgment that sustainability issues are integral to business strategy. So in setting up Generation, we saw the need to fully understand sustainability issues alongside the fundamental financial analysis of a company.

The Quarterly: What do those executives and companies that are doing this well see differently?

David Blood: The first is that they understand their long-term strategy. Secondly, they understand the drivers of their business—both financial and nonfinancial. The leading CEOs are the ones who explicitly recognize that sustainability factors drive business strategy.

In our minds, the best businesses have always understood the importance of culture and employees and ethics. And they get it in their soul. But what’s now becoming true—particularly for the industrials, the retailers, the pharmaceuticals, the utilities, and a broader array of industries—is that managers are realizing that there are broader factors affecting how they operate. They can recognize that over the next 25 years their strategy will depend on leveraging new opportunities and must operate within the changing context of business.

The Quarterly: Is this approach possible in all sectors? Clearly, the pharmaceutical industry is an interesting case. Can you get there in tobacco? Fast food? Or are these just sectors that are fundamentally, somehow, no-go territory?

David Blood: There are material sustainability challenges in all industries. In the fast-food or food-manufacturing industry, there’s a very strong move toward healthy living and eating, organic food, and the implications for sustainable agriculture. And how do food companies deal with the upstream challenges of these trends, challenges such as water use? While we don’t invest in it, the tobacco sector faces a whole host of issues which are very much sustainability driven—not just the health impact of the product. But, again, sustainable agriculture is a big story, as is litigation risk. In another sector, like financial services, the key sustainability issue is how a company manages its human capital. In the energy sector, climate change is one of the most significant issues. In the health care sector, we look at ethical marketing practices between companies and doctors. Even in industries like luxury goods there are issues around excessive materialism, authenticity, and consumption.

What I’m describing here is what we call a materiality-based approach to investing. Rather than looking at 50 different tick-box sustainability criteria, we think you need to tackle the three or four long-term issues that will really affect corporate profitability.

The Quarterly: Any final thoughts for executives trying to understand this trend toward sustainability investing?

Al Gore: Be part of the solution and not part of the problem. Your employees, your colleagues, your board, your investors, your customers are all soon going to place a much higher value—and the markets will soon place a much higher value—on an assessment of how much you are a part of the solution to these issues.

Steve Jobs released yesterday a note on the Apple website about a “Greener Apple”. This was Jobs’s attempt to communicate to the stakeholders of Apple about its environmental programs till date and its future plans.

When Greenpeace released its “Guide to Greener Electronics” report, I was shocked to find Apple at the bottom of the list. I use a iBook G4 and a iPod Nano. I know what it means to use well designed products. I also knew that Apple’s laptops are one of the best in terms of energy-efficiency.

Good Design is one of the basis for a environmentally friendly product. It did not make logical sense that Apple could be at the bottom of the heap. As Jobs said, “Apple is already a leader in innovation and engineering, and we are applying these same talents to become an environmental leader.”

Now Steve Jobs letter explains how Apple is ahead of the other computer manufacturers and what its plans are for the future.

Some highlights:

Apple completely eliminated the use of CRTs in mid-2006.

Apple products met both the spirit and letter of the RoHS restrictions on cadmium, hexavalent chromium and brominated flame retardants years before RoHS went into effect.

Apple plans to completely eliminate the use of arsenic in all of its displays by the end of 2008.

Apple plans to reduce and eventually eliminate the use of mercury by transitioning to LED backlighting for all displays when technically and economically feasible.


Apple plans to completely eliminate the use of PVC and BFRs in its products by the end of 2008.

Apple recycled 13 million pounds of e-waste in 2006, which is equal to 9.5% of the weight of all products Apple sold seven years earlier. We expect this percentage to grow to 13% in 2007, and to 20% in 2008. By 2010, we forecast recycling 19 million pounds of e-waste per year — nearly 30% of the product weight we sold seven years earlier.

In the above comparison Jobs in his own style clearly demonstrated how much ahead Apple is compared to its competitors and at the sametime pointing to Greenpeace about its method of rating companies.

Jobs highlighted the importance of design and materials, especially the iMac.

Producers must also take responsibility for the design and material choices that create the product in the first place. It is these choices that fundamentally determine the weight and recycling value of material waste at the end of a product’s life. The iMac is a world-class example of material efficiency, having shed 60% of its weight since its debut in 1998. Our designs use aircraft-grade aluminum, stainless steel and high-grade plastics that are in high demand from recyclers, who recover and resell these raw materials for use in other types of products. Few of our competitors do the same.

Unique Lessons

Some unique lessons come out of this note from Jobs.

One, that communicating with your stakeholders is important. As Jobs suggests, even abandoning Apple’s policy of not discussing about the future is important in this scenario. By providing some information about its future environmental plans to its competitors Apple is gaining by communicating to its customers, shareholders and other stakeholders and gaining reputation.

Two, the viral nature of the note from Steve Jobs. Jobs previously wrote about his now famous “Thoughts on Music” suggesting the move to a non-DRM music from iTunes. That created waves. A sincere, direct note from the CEO was a great viral marketing idea. He replicates this again.

Three, What is the methodology used by Greenpeace in its report? Is is just based on plans or plans on releasing plans as Jobs suggest? Greenpeace needs to be have a more transparent and robust methodology in releasiing its reports.

Fourth, the importance of design and innovation in general and to environmental performance in particular. The iMac and the generational change seen in the iPod are both examples of how design can be useful in cutting down size, creating a better product and improving the environmental performance.

Alan Atkisson writes an article which puts a lot of things in perspective and acts as a guide to the future to the people “in our line of work”. He says, “The phrase “our line of work” refers to people working in a professional capacity on the issues of sustainable development, or in training to do such work.”

He suggests that climate change has hit bit big time for three reasons. One, Hurricane Katrina; Two, Al Gore’s ‘An Inconvenient Truth’ and Third, the Stern Review on Climate Change. Now the situation is in the political and economic realm.

Due to the Climate Change issue, the sustainability field and the professionals working in this field have a great new task ahead. To stop convincing people about the issue and “rolling up our sleeves, and working on scaling up implementation.”

The most important thing is,

…that professionals in sustainability will have to offer in the future is not ready-made solutions, but an ability to improvise, adapt, innovate, and dream up still more visionary-yet-feasible ideas about how to transform a global civilization or rescue ecosystems in trouble. This is going to require even more exertion, more creativity, more risk; celebrating victory and going home is not an option.

Here’s the summary: In the next few years, people who have been working on sustainability, especially where it touches the climate-and-energy nexus, are going to be seriously tested — not by resistance to their ideas, but by the ever-increasing demand for them.

Alan is so right. Even in my simple job things are changing. What was not possible in 2006 is becoming much needed in 2007. The talk is about implementation, about ideas, about what can you do?

When I decided to train myself to work in the Sustainability field at the start of my MBA (almost two years back) most of my friends thought I was a fool, especially from the money point of view.

However, things have changed in the last two years. I can see the momentum building. There is a greater need for people to work in this area and the leaders; both companies and individuals; who will be part of the solution at this point in time will have a great future in the coming years and decades.

Bill Drayton: these “hybrid value chains” are a no-brainer; the divergence of the consumer and citizen sectors was a “nonsensical historical accident” in the first place, and their reintegration is “profoundly important for the health of both.” Business must use social networks to reach new markets. And the citizen sector needs the marketplace to gain financial sustainability.