Risk and Reward for The Chief Climate Officer

gal_hannan.jpgWith the wild and woolly weather over the past few years, there are bound to be ramifications throughout the business world. For example, two consecutive years of volatile weather have proved disastrous for companies that rely on predicable temperatures to sell cold-weather clothing like coats and sweaters.

So, while the $200 billion apparel industry has adding the job title “weather forecaster” to its staff, we predict the implications will be so great as to ultimately drive for the creation of a new C-level player dubbed The Chief Climate Officer. Joining the ranks of the Chief Green Officer and the Chief Sustainability Officer, it is inevitable that industries and companies that rely heavily on the weather, and reducing risk associated with it, will find the need for leaders who can assess the comprehensive strategic issues associated with weather and make smart decisions hinged on it.

One interesting new company, Storm Exchange Inc., helps corporations maximize shareholder value by reducing the financial impact of unplanned weather on earnings. In other words, they hedge against the weather and write insurance policies based upon it. The company states that while most businesses routinely hedge risks such as currency and interest-rate fluctuations, many simply hope to get lucky when it comes to the variability of the weather—a practice that has given prominence to what Wall Street calls “the weather excuse.”

Department stores that sell apparel are among the retailers most exposed to weather fluctuations. Much of their survival depends on favorable weather: if it’s raining or snowing or very cold, consumers are less likely to go shopping; if the weather is too warm in the fall, consumers will hold off on purchasing winter wear; and if the weather is too mild in the summer, consumers will avoid purchasing summer wear. Operating results can be further weakened by inventory build that follows lower-than-expected sales volumes.

In an interesting first, a large manufacturer and supplier of overcoats to department stores, has taken out a $10 million insurance policy with Storm Exchange against unusually warm weather. Weatherproof signed a contract that guarantees it would be paid as much as $10 million if daily temperatures in New york City are lower than the historic average for December, 37 degrees. The higher the temperature this month above 37, the more Weatherproof makes.

With climate creating such serious monetary implications over the past few years, including the possible move towards a cap and trade system, its anyone’s guess what the next innovative business model will be that harnesses the opportunities in climate change. Let’s just hope they impact all three of our bottom lines and spur some solutions-oriented innovative thinking.

My Kindle burns at both ends / It will not last the night

kindle.jpgThe web is abuzz with talk of Amazon’s new e-book reader, the Kindle, which will launch tomorrow at a swanky gala at the W Hotel in NYC, timed to coincide with the finest media coverage that money can buy. Some say it’s a dreadful bit of industrial design destined for the dustbins of failed electronic devices, others say it will define the future of reading. Personally, I’m obsessed with its ecological impact.

Here’s what I’m trying to figure out: is the Kindle a vast improvement over the current dead-trees approach to publishing? At first glance, it seems like it definitely is. There are around 3 billion books sold worldwide each year, which adds up to an awful lot of trees being cut down, shipped off for processing, ground into pulp, made into paper, shipped off to printing houses, printed with toxic inks, glued with toxic glues, shipped to distributors, shipped to vendors, and finally shipped to recipients.

With the Kindle, you can summon a book directly through the aether. Just click a button, and the magic of the internet and cellular telephony will deliver it to you in seconds. Carbon footprint: zero. But it’s not really zero, of course. First, all the materials for the device have to be individually fabricated and/or sourced. This includes metals (likely toxic), plastics (ditto), and perhaps glass and ceramic (perhaps less toxic). Then the devices need to be assembled, shipped to distributors, and then shipped to recipients, who will then discover that, unlike dead-tree books, these Kindles take power to operate. Carbon footprint? Unknown. And then there’s the matter of planned obsolescence and the dirty little problem of consumer electronic waste. Starting to long for dead trees?

Of course, this all begs some deeper questions: can we fabricate a book out of entirely recycled and non-toxic materials? Sure. And could we do the same thing with the Kindle? Certainly. And we could even power it with renewable energy — one could do worse than trekking into the wilderness with a solar backpack and a slim little Kindle filled with hundreds of books. Assuming all recycled non-toxic materials for both, I’m thinking that the Kindle might just come out way ahead in the ecological race. And with humankind’s current technophilia, I’m suspecting that even a non-eco Kindle (or its inevitable sexier kin) will eventually displace the analog book.

But deeper still, what happens when climate change reaches a tipping point (looking closer and closer these days), and Amazon becomes just another jungle? E-ink may be as easy on the eyes as paper, but in the end, it may be far more ephemeral.

Nash Impact

hatch.jpgThis past weekend, we attended the 2007 Net Impact Conference at Vanderbilt University in Nashville, TN to discuss and discover what the next generation of MBA students will do to make our world more sustainable.

This year’s conference, the world’s largest ever gathering of socially responsible graduate business students and young professionals, attested to the dramatically increased interest among leading corporations in corporate social responsibility with more than 30 major organizations, an unprecedented number for this fast-growing event, pledging their support and sponsorship for the conference. We saw flagship logos from the likes of Dow, Dupont, Starbucks, McDonalds and Microsoft purposefully displayed throughout the conference, and Dow even sent their Chairman & CEO, Chad Holliday, down to keynote the conference. There was no mistaking that the era of CSR has arrived in full force, and it’s no surprise considering the following stats:

  • 79% of MBA’s indicated they would seek employment that is socially responsible in the course of their careers, and 59% said they would do so immediately following business school.
  • 89% said business professionals should take social and environmental impacts into account when making business decisions.
  • 81% agreed with a statement that businesses should work toward the betterment of society, although only 18% believed most corporations are currently working toward that goal.

We found the opening remarks by Patagonia’s founder Yvon Chouinard quite refreshing in a creatively pessimistic way. Interviewed by Andy Savitz, author of The Triple Bottom Line, Yvon pulled no punches in his brutally realistic outlook of the status quo, indicating with abrupt hand gestures the dissonance between projected population growth on the one hand, and non-renewable natural resources and ecosystem stability on the other.

Along with an overabundance of fantastic panels, covering everything from The International Business Challenge: Balancing your company’s identity with local culture to Making Waves: How social entrepreneurs bring about change, egg’s own Marty McDonald was a featured speaker on the subject of Green Branding: Engaging the Consumer, along with Nick Aster of TreeHugger.com, Perry Goldschein of SRB Marketing, Inc. and Brian LaValle of EcoMedia.

Happy takeaways: the conference’s use of the old-school Hatch Show Print shop for all of their design and printing, and a few memorable foodie visits including the very well-known Loveless Cafe, and the considerably less well-known Smokin’ Ed’s Barbecue.

A Hummer Stuck in the Mud

The famous car-truck that provokes such deep anger in the eyes of good carbon-fearing, clean air-loving citizens is struggling amidst a sea of societal change. As both oil prices and awareness of the increasing problems associated with global warming rise, General Motors has gone to its genius branding mavens to spin the brand back into consideration. Good luck.

Going from a less than serious 2002 positioning in the days of oil and roses geared toward macho hipster cred (reflected in such gratuitous tunes as Happy Jack by The Who), Hummer has finally whiffed the burnt edge of a wanton carbon brand personality and thrown down with a sudden humanistic face. Here we can see the new “green branding” happening before our very eyes in all its gorgeous ability to maneuver public sentiment and orient toward market success.

Titled ‘HUMMER HEROES‘, the campaign will show how rescue workers, among others, rely on the vehicle to help them help those in need. Because the brand has come to, in the words of Hummer Marketing Director Megan Stooke, “represent an icon for all things evil”, it’s high time we change it into a force for good.

Wow, evil to good in a fall campaign through gross ratings points.

The ad agency Modernista aims to position the vehicle as a force for good by portraying how rescue workers and owners rely on Hummers to help others. In a few weeks, the GM brand will launch a microsite, Hummer Helps, that will encourage owners to send in stories and photos that illustrate how they assisted the needy with their SUVs.

Says Martin Walsh, the brand’s general manager,”The unparalleled capabilities of a Hummer make them the ideal disaster-response vehicle.” Indeed, a more palatable frame than the unparalleled disaster creating capabilities of the Hummer.

This new campaign could be effective for the skeptics who either discount any man-made effects of global warming, refuse to care, or simply refuse to deny their ego the luxury of a 6000 lb, 8.6 miles per gallon steel truck to get them to the gym. What could be more convenient, or necessary in this case, than wrapping the brand in a gauzy, feel-good aura of social responsibility amidst national and global crises happening around us regarding such things as consumption, energy security, population growth, demand for natural resources, pollution, and terrorism.

Sometimes the best way to deal with the thought of such overbearing consequences is sheer denial. Bummer. No, Hummer.

Running the Talk: egg’s Carbon Neutral Journey Continues

carbonfund_lg.gifIn our last installment of Running the Talk, we began the journey towards carbon neutrality, and quite the journey it has been. Finally, a few weeks ago, we pulled into the garage, parked the car, got out and came inside. The trip is over, our itchy eyes have been opened, and we have seen the carbon neutral world. Sorta’.

egg has been a green power buyer since 2005, but story after story weighed down on us like a high-pressure front until one news item led to the last carbon that broke the compound’s back, and we felt the burning urge to take a stand. After all, not too many companies out there have undertaken such an endeavor, much less ad agencies—none that we are aware of—so if not us, who? We declare, the carbon neutralization of the branding and advertising worlds starts here!

In spite of the warming debate among the few holdouts, we felt the need to step up, not only to the green power purchasing plane, but beyond. Nothing less than a strategic carbon reduction plan, with the ultimate goal of full-bore carbon neutrality, would do.

Our carbon inventory included all of the energy emitted from our staff and contractors employed to make the powerful stuff we create, but not clients, supply chain, or media. It’s a start, right? In the process, though, we decided our next steps should include quantifying the carbon inventory for the execution of an average website, online ad plan, event, print ad and TV spot, so that we can add these carbon neutral marketing tools to our powered up list of socially responsible solutions. Next up: The Carbon Neutral Super Bowl spot with offsets starting at $100,000.

Overall, our steam heat and bus use were the biggest carbon hogs, with airline travel and paper usage a close second. Recommendations for energy efficiencies include “the little things” like (#3) installing SNAP CO2 savers to reduce computer energy usage by up to 80% in sleep mode, and (#11) opting for two day UPS shipping instead of overnight, (# 12) adjusting paper margins to reduce the # of pages printed, but we are most charged with (#19) the idea of organizing other tenants to create critical mass to encourage our landlord to install waterless urinals in the men’s bathrooms, low-flow faucets, and hopefully bike racks, and lockers. Communal compost bins would be icing on the carbon cake. Now if we can just find the time to gather all of those tenant signatures.

Greenwashing Works. (No surprises there.)

bp-subvertpreview.jpgWell, at least in The British Isles it appears to. And if past trend patterns are any indication, it will probably prove itself over here as well within a year or two. They are definitely ahead of us on the green issues across the pond, so we should predict the fallout of the green advertising and marketing push of late stateside–indicating the success in opinion polls of brands like Chevy, Dow, BP, GE, Wal-Mart–to show up in polls here soon enough indicating people’s perception that the greenest brands are those that advertise it the most. (Was that really a surprise to anyone?)

The sad truth is that lowest common denominators factor in when taking the broad pulse of the green movement and that in the end, whoever shouts the loudest, gets the prize. In spite of the fact that none of these companies above are doing as much as it seems like they are from their ad campaigns, the public will end up with a positive opinion of them. If I recall correctly, BP and Wal-Mart both have looked pretty good in recent surveys. And only if you make egregious mistakes will you come out harmed from this practice.

It all begs the question a bit of what exactly is greenwashing, and how does one identify it? But then, does it even really matter? We talk a lot about the need for transparency because we believe that the consumer now has a wealth of information at their fingertips to unravel the true corporate stories through the web, but is the diligence really there? One recent report indicates that companies just need to have a few things in place for consumers to give them the social or environmental thumbs up. (Anyone for a quick carbon offset bump?)

Let the green guns blaze, and caveat emptor.

Thinknic

raft.jpgIn the fleeting shafts of summer sunlight, we trekked through Discovery Park to the Daybreak Star Center to attend Salmon Nation’s AMERICAN HERITAGE PICNIC today. Open to members of both Chefs Collaborative and Slow Food Seattle, we were obviously anticipating great food, but keynote and RAFT founder Gary Nabhan was the main course.

Gary Paul Nabhan, Ph.D., is a writer, lecturer and world-renown conservation scientist. He is Director of the Center for Sustainable Environments at Northern Arizona University, and has become a leading voice for conserving and renovating native plant agriculture in the Americas. Over three decades, he has worked with more than a dozen indigenous communities on cross-cultural initiatives to revive indigenous foods to prevent diabetes, to restore ancient agricultural landscapes and to honor traditional knowledge. Gary spoke of the need to support (by enjoyment) the threatened foods of “the Salmon Nation”, which constitutes the extensive water and food shed of the many Pacific Northwest Salmon species.

A food conservation rockstar in his own right, Nabhan shared the spotlight with luminary Seattle chefs such as James Beard Foundation award winners John Sundstrom from Lark, Thierry Rautureau from Rover’s, Tamara Murphy from Brasa, and Fernando Divina from Tendrils. The local vittles bill of fare was mouth-watering beyond belief and constituted such delicacies as Lummi Island Wild Salmon’s wild reefnet-caught salmon with heirloom tomato and roasted corn relish, mountain niche farm rotisserie leg of Navajo-Churro lamb stuffed with chard and olives, wild chanterelle and lobster mushrooms, Makah Ozette potatoes, local corn, peppers, and tomatoes, wild huckleberries, and locally made cheese from Mt. Townsend Creamery and wines from Willamette Valley Vineyards. Phew! A perfect case study of how the idea and precepts of sustainability can work through the notion of what we extol at egg as “enlightened self-interest”. Indeed, today, selling sustainability couldn’t seem easier.

Greener than thou

burn2.jpgpope2.jpg

500,000 youths made the pilgrimage. They brought tents and blankets, sunblock and plenty of water. In keeping with the green spirit of the festival, every participant was given a backpack made of recycled nylon, a flashlight operated by a crank instead of batteries, and color-coded biodegradable trash bags so that personal garbage could be easily recycled. Meals were served on biodegradable plates. The entire festival was carbon offset, of course, and energy levels ran high as people played together, all gathered on this vast plain for a common purpose.rally.jpg

And all the prayer books were printed on recycled paper.

Burning Man in Black Rock City, Nevada? Or Save Creation Day in Loreto, Italy? In one of the strangest green confluences to date, Sunday, September 2nd, 2007 may go down in history as the day when the green movement definitively transcended cultural pigeonholes.

Yes, both the Burners and the burn-in-Hell-ers have gone green this year. It’s enough to make an eco-conscious branding agency smile.

It was a global convergence in messaging. Pope Benedict, resplendent in green vestments, regaled the youthful masses with the charge: “New generations will be entrusted with the future of the planet, which bears clear signs of a type of development that has not always protected nature’s delicate equilibriums. Courageous choices that can re-create a strong alliance between man and earth must be made before it is too late.” Meanwhile, the more scantily clothed (but no less devout) Burners proclaimed: “Beginning with the advent of the modern age, we have regarded nature as a beast that we can tame. If Burning Man has taught us anything, it’s that we can collaborate with nature.”

And not to be outdone by one another, both events will leave a lasting solar legacy after the crowds have dispersed and the carbon-offsetting trees have all been planted — the Vatican is installing solar panels on the roof of its main hall, and Burning Man LLC is donating solar panels to a small nearby town in Nevada.

Is humankind finally seeing the light?