November 8, 2011

This seems a bit of an oxymoron. After all, how much can banks contribute to environmental sustainability? Banks do not require a lot of water to operate or release toxic pollutants into the air. To my knowledge the printing of money does not have a large carbon footprint. While banks and all office-based enterprises can be made more energy and paper-efficient, saving significant expense, it won’t save the world.

But in reality the financial industry can have a major impact on global climate change and energy issues by how it finances new projects. Banks provide the capital that every new project or business needs to start and grow. To maximize its payback for money lent or invested and to reduce risk of loss, “green” is being recognized as very important. Several major banks and investment houses are beginning to recognize that investment in green buildings and clean and smarter infrastructure is needed in the U.S. and can result in good returns and low risk of failure. They recognize this as good economics and not being “cool” in any way. A study by AT Kearney showed that between 2008 and 2009 (during the economic crisis), companies that had a sustainability focus (i.e., listed on the Dow Jones Sustainability Index or Goldman Sachs SUSTAIN list) outperformed equivalent companies across the board by 10 to over 25%. That certainly would be preferable companies for financial firms to invest in.

And then there is growing concern about climate change. The banking community is now taking the cue from the overwhelming majority of the scientific community that now believes climate change is real and could potentially do extreme damage to manmade structures and projects. The risks and liability are real. The United Nations Environmental Programme estimated that lost value of buildings and structures because of climate change could total $1 trillion every year by 2040. This is forcing the insurance and banking industries to look into more investments in projects that are less vulnerable to storms, etc. and/or represent positive steps for climate change mitigation.

Finally, many investment houses are beginning to recognize that companies or projects with potential environmental issues represent a major investment repayment risk. Incidents like last year’s BP Deepwater Horizon resulted in reputational issues for the firm, as well as the billions of dollars spent to clean up natural areas and places where people live, work, and play. Companies now realize that the government and the public will expect nothing less than complete restoration of a site to its pre-accident condition, money not withstanding. While BP was flush with cash, most others would have had to declare bankruptcy and not pay back investors. Financial institutions are now including “what if” environmental risk in their calculation of whether to invest or not.

CCES can help your firm develop a viable and recognized sustainability program and can help determine whether projects have potential high climate change risk or not.

November 1, 2011
More and more corporate upper management understands the picture that in these tough financial times, going “green” or being more sustainable is not an idealistic statement of millionaires or old hippies, but is smart business and engineering management. While technology can help reduce one’s energy use, water use, and waste generation, etc., ultimately for such a program to sustain long-term benefits for the company, its employees have to cooperate and make it a part of their everyday lives to work with these technologies. How can companies get employees and other stake-holders to keep their interest up in a sustainability program in the long term? There is no one answer to this question, but here are 3 possible strategies to engender cooperation.
1. Keep it Simple. The biggest source of opposition to such a program even among people sympathetic to its goals for the company and the Earth is that it involves more work. People feel overwhelmed at work more and more, that they are doing more with less support. And, of course, there is more and more involvement in home duties, as well. A company begins a well-intentioned “green” program and workers think that there will be more things they have to do (and paperwork to fill out) as part of their duties. So make it easy. At least start up with items that involve no work at all, such as installing motion sensors to turn off their lights or easily programmable thermostats (through a Smart Phone) for individual comfort. Minimize paperwork to prove compliance.
2. Make It Fulfilling. People, in general, get excited at the start of a new, interesting program like a “green” or energy-saving program, but lose that fresh feel for it in time. How can one maintain enthusiasm for (and compliance with) such a program? A good way is to develop a regular internal “newsletter” of some type to chart the progress of your program. Let employees know just how the company is benefiting from the “green” program – how much lower the carbon footprint is, how much less waste has to be disposed, etc. And, most important, how much money the company has saved by these initiatives. Perhaps the company can put back some portion of the money saved and return it to the employees in terms of a party or in a gift (i.e., provide each a free CFL or a free energy saving tips) to take home. Another idea is to set up on an Intranet site a forum for employees to ask questions, receive answers, and share experiences.
3. Reward and Punishment. Professionals say it works for mice and for children, so why not for adults, too. Some companies have included individual behavior as a goal on employee’s annual review and will get increased bonuses and other benefits from meeting these goals. It is critical, of course, to be very clear on what the goals are to be met and give the employees full direction on how to achieve these goals.
CCES can help your company prepare a smart, sustainability program with maximum financial benefits and engenders cooperation from your employees and stakeholders.

October 25, 2011

The International Code Council (ICC) is in the process of rolling out final standards for Green Construction, called International Green Construction Codes (IgCC), in March 2012 (www.iccsafe.org/cs/IGCC). The IgCC is intended to be an enforceable code for municipalities to seamlessly adopt and enforce for future building construction. It is intended to reduce the negative impacts of the built environment on the natural environment for the purposes of reducing the costs of potential adverse effects on a municipality, such as flooding. The IgCC is not intended to be a rating system or replace LEED. Points will not be accumulated. It is meant as minimum requirements for future design and construction and to drive the industry toward more green construction. It is intended to be focused and enforceable by municipal Dept of Buildings officers.

The IgCC will contain a “model” code which municipalities can adopt or modify. There are also unique regional requirements. There will likely be two levels of standards, a “green” building standard and a higher “high performing” standard. IgCC contains ANSI/ASHRAE 189.1 as a compliance option. Minimum standards in IgCC include:

• Energy use conservation and efficiency (zEPI for large buildings, sub-metering)

• Water use conservation and efficiency (rain harvesting, plumbing, irrigation stds.)

• Indoor environmental quality (indoor air quality, HVAC stds., materials use)

• Materials and resource conservation (waste management planning, recycling)

• Site development and land use (protection of parklands, agriculture, floodplains)

• Operations & maintenance (building maintenance stds., building user education).

IgCC will contain separate standards for new and for refurbishing existing buildings. Commissioning will be required for most projects.

The ICC will present the draft standards at their annual conference in November in Phoenix for the public to make final comments. They are expecting to publish them final in March 2012. They plan on upgrading them every 4-5 years, but will do the first upgrade earlier, based on the early results of adoption of these standards in municipalities. Will this become the norm for all or many states or municipalities? This is hard to say, but diverse places, such as the States of Maryland, Rhode Island, and Oregon and Cities of Phoenix and Boynton Beach, FL have already passed resolutions stating it will adopt the IgCC standards as mandatory. Plus others are “on the fence” waiting for the final standards to be published to decide. Therefore, building owners and builders should prepare to understand and potentially comply with these standards.

CCES can help your facility prepare an analysis of the impacts of IgCC on your future buildings and strategize cost-effective options to comply with such codes in your area.

Oct. 17, 2011

More and more U.S. organizations see the financial advantages of setting and attempting to meet sustainability goals. However, many others are still waiting for the “right time” to start such a project. Some consider sustainability a risk, a venture into the unknown, which, of course, fosters avoidance. However, a solid body of U.S. and global companies has developed successful sustainability programs, setting and meeting strategic goals. Information about such programs are now posted in various registries, and, therefore, lessons can begin to be learned about how to overcome potential program barriers and what the most cost-effective successes were. This article summarizes a recent detailed survey of executives involved in sustainability programs.

A White Paper published by Tririga in July 2011 (http://www.tririga.com/information-center/whitepaper-view/sustainability-chasm-strategies/index.html) summarizes a survey of 130 executives from large companies and public service organizations, most of which have at least initiated a formal sustainability program. The survey found that the following activities were the focus of organizations that have achieved their sustainability goals:
• 91% improved facility energy efficiency
• 77% improved equipment and operations servicing and maintenance, and
• 75% improved space utilization (i.e. space optimization)

Energy savings, as discussed in earlier Environmental News for YouTM, is the most successful strategy given unit energy prices at record levels (cost per kwh electricity or per gallon of oil). Planned, site-specific energy audits followed by implementation of reasonable findings are virtually guaranteed to pay for themselves and more. Plus it’s an effective way of reducing greenhouse gas (GHG) emissions, the most common (but not the only) measurement for sustainability. 40-50% reductions in energy use (and the concurrent reduction in energy expenses) within 5 years of beginning the process was shown to be typical and fairly consistent across type (office building, retail, etc.) and U.S. region (arid vs. wet, cold vs. warm). Remember the power of energy savings from a business point of view. Saving energy expenditures is money “in the bank”, directly raising profits. The alternative way to raise profits, increasing sales or revenues, takes quite an investment (sales staff, ads, etc.), is not guaranteed, and can change from year to year. Energy savings stay consistent and grow (as unit costs grow) in the future.

As the numbers above show, many companies have found success and benefits from improved facility maintenance planning and implementation of improved processes. This includes preventative maintenance. A previous Tririga study determined that a well-maintained preventive maintenance program pays for itself and more resulting in a ROI of 545% compared to performing no preventive maintenance. Executives cited that such a program reduces: the number of expensive “emergency” repairs; the number of expensive capital purchases; and both energy consumption and maintenance labor staff needed. For some companies, part of this investment in improved facility maintenance is continuous commissioning. Although not required, many large, new processes and buildings undergo commissioning by a specialized firm to ensure that it has been built to spec and that the equipment and operations are functioning optimally and as designed. Deviations affecting performance sometimes happen during construction. There is also a segment of commissioning which focuses on maintenance of equipment and operations, including continuous commissioning and review after operation begins. The survey showed that those that implemented continuous commissioning had it pay for itself and more. Besides these direct savings, improved facility maintenance lowers risk and better ensures that production and other goals are more likely to be met, pleasing those in the C Suite.

The other area in the survey which many executives reported success in and benefits for implementing is space optimization. Space reduction offers an opportunity for organizations to reduce expenses, such as rent, energy, water and maintenance labor, as well as reducing environmental impact. Especially with downsizing, more facilities have an excess of space for its needs. Companies that implemented optimization strategies for space, such as combining functions, putting related operations and groups near each other, and encouragement of staff to work from home, all were shown to result in direct cost savings. This either frees up space for other, new functions and ventures or to no longer lease. Freeing up space also means not heating or lighting it, reducing energy, resources usage (and expenses) even compared to “green” space.

Get more useful information in our blog: www.CCESworld.com/blog
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This Environmental News for You is meant to provide background on sustainability programs performed by other organizations. CCES experts can help you in the technical aspects of how you can benefit and how to get started with and see benefits from your sustainability program.

October 12, 2011

Virtually all states that have nonattainment areas for ozone have passed a rule called nitrogen oxide (NOx) Reasonably Achievable Control Technology (RACT). With many regions not in attainment for ozone approaching 4 decades, several states have or are considering toughening this rule to reduce NOx emissions, a precursor for ozone. In New York, the NOx RACT rule, found in 6NYCRR Part 227-2, was amended in 2010. All large combustion sources must meet these “reasonable” standards, defined as standards that are technologically achievable and not overly expensive.

The revised rule in New York (which may be adopted by other states) contains new NOx emission limits for different fuels for different-sized boilers, any boiler with a maximum heat input of 25 mmBtu/hr or greater. Any boiler below that level must undergo a formal annual tune-up. The revised NOx RACT rule contains more stringent NOx emission limits, which will go into effect on July 1, 2014, for combustion of coal and of No. 6 fuel oil are particularly stringent. A number of boiler and burner vendors have told me that their equipment simply cannot meet the new limits. This is particularly telling as equipment vendors are usually optimistic that their units can meet stringent standards. If they admit their equipment cannot, then it really is believable that the limits cannot be met. Therefore, New York State may be using NOx RACT as a means of virtually eliminating the use of coal and No. 6 fuel oil altogether in the state.

What is a facility to do? First, one must recognize that this rule must be addressed promptly. Even a deadline date several years down the road gives little time to waste because of the time necessary to strategize, design, and order new equipment. In New York, the time is now. If a facility operates boilers combusting coal and/or No. 6 oil, it needs to review any old stack tests to determine how the units have performed in the past. It is likely that emissions measured would not meet the future limits. Simply saying that you will “clean the tubes” or otherwise tune-up your units will probably not achieve compliance. And as you saw above, even installing more modern burners will likely not achieve compliance either. So what are your choices? De-rating boilers such that they would be exempt from emission limits could work – if this gives you the proper operating flexibility. Proof of de-rating by some type of physical fuel flow restriction, such as a plate or nozzle, may be necessary. Another possibility is fuel switching to a different fuel and burner upgrades to attain the emission standard. Fuel switching will also cause decreases in emissions of other pollutants and CO2, a greenhouse gas.

CCES can help your facility in any state assess the NOx emissions of your boilers and strategize cost-effective options to lower them to comply with future regulations.

October 3, 2011

Sustainability is all the rage as many significantly-sized companies are evaluating it and seeing how it can fit into company plans and maximize economic benefits. We in the environmental community believe that sustainability programs almost always deliver a good return on investment (ROI) because of the economic benefits of reducing waste, water, energy use, etc. However, some C-Suite executives claim that sustainability projects do not have an acceptable ROI. Why the disconnect over the same numbers? How can the CFO’s ROI calculations be more severe than those of the EH&S Director?

Remember that ROI is a ratio of returns of a project over its total invested cost. An ROI may not appear good because the project’s total cost is made early, while the benefits, the time it takes to recover the money before the return is made, may be years in the future. Some companies’ ROI calculations take timing (such as different worths of current and future money) more strongly into consideration. This can be countered by emphasizing the long-term gains that will continue well into the future, once the effort or technology is in place, it will not be pulled out and savings will continue. In fact, in the energy and water realms, savings should increase as unit costs are expected to rise sharply for these commodities in the farer future.

Another disconnect is that sustainable projects produce indirect monetary returns, such as fewer compliance fines, enhanced consumer feelings toward the company, improved employee health and productivity, and reduced employee turnover. How do these real factors get quantified in a traditional ROI calculation? In confronting a “cold” calculation from a CFO, these hard-to-estimate, but real benefits should be brought up.

Some companies take risk into consideration when calculating ROI. If the strategies and technologies necessary for a sustainability project are considered unproven, then this may be factored into the calculations negatively. You can point out that sustainability is really “smart” projects and usage of resources which at various times have been scarce and expensive. Let the C-Suiters know that the company has likely already done many “smart” projects in the past to optimize resource usage. This is nothing new.

The same thing goes with the benefits of a sustainability program. Sustainability projects that reduce business risk (i.e., improve access to diversified sources of energy and water, reduce impacts of climate change-related actions, such as severe storms, etc.) should be recognized and credited for raising the potential ROI.

CCES experts can help your company develop smart strategies for a sustainability program and for projects that maximize your company’s financial benefits and acceptance.

September 26, 2011

The Greenhouse Gas (GHG) Reporting Rule (GHGRR), found in 40 CFR Part 98, has a major deadline in front of us. The first reports of GHG emissions for 2010 are required to be submitted to the USEPA electronically by this Friday, Sept. 30. The USEPA set up an electronic data submission system called e-GRRT, which stumbled upon its unveiling, but was finally up and operating last month. So the Sept. 30 deadline for 2010 data is still in force for those industries affected by Part 98 in 2009. The submission deadline is expected to return to April 30 in 2012 and beyond for the prior calendar year.

The GHGRR has gone through a number of amendments just in the last couple of months. For example, GHG emission calculation methodologies underwent technical changes for natural gas and petroleum processes (Subpart W) and for semi-conductor manufacturing facilities (Subpart I). The GHGRR allows usage of alternative methods to collect data and calculate GHG emissions, the Best Available Monitoring Methods (BAMM). The USEPA extended the timeframe that affected facilities in several industries to use BAMM without receiving prior permission from the USEPA.

One of the controversial portions of this rule is the treatment of data in terms of confidential business data. The USEPA wishes a balance between receiving plant data that can substantiate the calculation of accurate GHG emissions with the desire to not reveal publicly confidential business secrets. In April of this year, the USEPA tentatively ruled on the issue, stating that all input data would be held by the Agency in confidence at least until 2013. Final confidentiality policy is found in this USEPA memorandum: http://www.epa.gov/climatechange/emissions/downloads11/documents/CBI-final-data-category.pdf.

Well, if you are a facility that must submit your first GHG emissions report to the USEPA this week, there is little more you can do at this time. You certainly deserve hearty congratulations and a respite from the pressure you have been under to ensure the data can even be submitted to e-GRRT I know; I’ve been there. But at some point, it’s critical to evaluate where you stand and see how you can improve your system to serve you and your company in the future. Emphasis on system. Hopefully, you have developed a systematic approach to data gathering so that you gather the right data, reliably and accurately from people who understand the process and the need. Hopefully, your system is also reliable in terms of compiling the potentially large quantities of diverse data and can properly store data properly, and calculate GHG emissions per the rule requirements, and integrate not only with e-GRRT, but with your other environmental and even business software. If your system cannot do all of that yet, then it certainly can be optimized and that is a worthy and cost-saving effort for you to work on before the next year’s data is due on April 30, 2012.

CCES has helped others and can help you develop a robust Part 98 data system.

People say we should ignore polls; the country should make decisions based on pure science or pure economics. But the reality is that governments and companies take their cues from public opinion, want to be seen on the “right” side and certainly not in the forefront of something divisive, even if is beneficial. Several studies show a “green gap” between what people tell pollsters about living sustainably and actually doing it. Americans say they want to live sustainably and are willing to pay a premium to do so. But purchase behavior at the store is different. Price and value, not sustainability, rule.

A comprehensive survey by Ogilvy & Mather showed 4 categories of Americans:

• 16% “super greens”, who actually make decisions based on sustainability norms

• 33% “upper middle greens”, who make some decisions based on sustainability

• 33% “lower middle greens”, informed, but make most decisions based on cost

• 18% “green rejectors”.

The problem with the green movement, according to Ogilvy Earth study is that it is too polarized and is trying to counter the green rejectors who are too idealistic to change. The green movement will grow by swaying much of the 33% lower middle greens to be upper middle greens and the 33% upper middle greens to become super greens.
What makes people become more “green”? Two factors: guilt and social costs. If green becomes the norm, people will follow, as they want to show off as “correct” on the issue.

Therefore, to market “green” products better, Ogilvy Earth concluded their research by recommending the 3 P’s: Personal, Plausible, Positive.

• Get away from the “green” tag. Surveys showed that many people perceive that a brand marketed in a highly “green” way is only for the wealthy elite or old hippies, and not for them. Make the product normal and do not scream in big bold letters how green it is. Make prominent that it is a good product that also happens to be good for the environment, if mentioned at all.

• Make it normal. … to be sustainable. Make it personal. On energy bills, there is often a bar graph showing how much electricity you used that month, the same month the year before, and what the “typical” household uses. Surveys show this is very effective in getting people to reduce their electricity usage – that it’s personal and that others use less. Try to do something similar in your messaging.

• Eliminate the “sustainability” tax. Walmart saw that Twinkies were cheaper than apples. How can positive social behavior (eating healthier) succeed when the healthy alternative, already perceived as less satisfying, is also more costly? Walmart made them equal. “Green” cleaning products are perceived as not as effective as conventional ones and more costly. Don’t “tax” virtuous products.

• Bribe shamelessly and punish wisely. Give prizes, rewards for being green. As for “punishment”, one major gym chain charges its members more if they use the gym less than frequent users, hoping to encourage greater use, increasing the chance of renewal. Can something similar happen with “green” products?

• Don’t stop innovating and educating. Introduce new products and designs and educate consumers. Some seek this. For others (lower middle), an innovation may hit home and get them to try things they would not earlier.

• Package normally. Just because a product is “green”, it does not have to be packaged in burlap and colored green. It can still be packaged as stylishly as a non-green product. “Showing” green is outside the norm, which you do not want.

• Hedonism over altruism. Change is more likely occur if glamorous. An example is “organic chocolate”. While this may repel some, this can appealing to people’s strong desires, while assuaging some guilt. Toyota and Ford have marketed their hybrid and electric cars through standard means that it is a good, reliable car with the fact that it pollutes less and saves gasoline costs as a sidelight.

Business Attitudes

According to the Ogilvy Earth studies, businesses are reluctant to go green for a major reason. Managers and the business itself are reluctant to change anything (put their “necks” on the line) for something out of the mainstream without a virtual guarantee of success or major benefit to the company. The company is concerned that either the green efforts will not be appreciated because few people are interested or people will be skeptical about green claims and believe it is greenwashing. It is easier to do nothing.

Present facts of the business benefits of going green to counter worries. The key is not to sell ideology (save the Earth), but instead have a company do good because it will be good for careers and the business. As they get used to the good acts, more will come.

Get more useful information in our blog:

www.CCESworld.com/blog
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This Environmental News for You is meant to provide background on green attitudes. CCES experts can help you in the technical aspects of your sustainability or “green” program.

Let’s face it: it’s tough to sell a corporate “green” program in-house. You know of the many financial advantages for your company if it develops a robust program. But most companies – especially in these tough times – are conservative and don’t want to spend money on a program with even the slightest risk of not meeting goals. The manager recommending the program may put his/her job on the line should that small chance of something going wrong occurs (even if it’s not his/her fault). The status quo is tempting. Here are some ideas on how to frame a program to get senior management buy-in.

It’s all in a name. It’s not fair, but the phrase “green” has lost its cache, perhaps because of the public debate about climate change. Companies are worried about image. Here’s a suggestion. Implementing energy efficiency, et al. is smart operations. Call it the company’s “Smart” program. You would think everyone would favor that!

Keep it simple (and be smart). Don’t try to change the whole company in one year. Just have modest goals. Repeat them and the solutions often, but keep it simple. And monitor and show off the success. Just concentrate on one or two items only (reduce electricity, fuel, or water), and even then only one small portion of the item (lighting, fleet). Senior management has so much on their plate. They will want to know the progress on the program, but feed it to them gradually and simply.

Make it meaningful, fulfilling, but to the point. Some people are still idealistic and will feel a closeness and loyalty to a company that institutes a “Smart” or “Green” program. Don’t just give the facts about Kwh and boiler upgrades, but frame it in terms people can identify with, such as cars taken off the road, trees planted, and, of course, GHG emissions reduced and money saved (yes, always the bottom line). Getting the company certified “green” in some way, such as LEED certification of a new building, with the nice photo-op can improve the program’s image. And to strengthen your image with your employees, your company can give away an inexpensive gift, such as a compact fluorescent or sensor or arrange a webinar on home energy saving.

Tie the program to other successful ones. Associate your program with other initiatives to help forward it and assure longer-term acceptance. For example, state that the recent gains of the “green” program will reduce expenses so to enable your firm to expand its production or transportation network, etc. or to delve into new markets.

Give the boss what he/she wants. When it comes down to it, your job is to make your bosses and their bosses happy. What’s in it for your bosses? Saving money? A photo opportunity? Keeping up with your competitors? It’s important to know what makes these people tick and the deeper meaning of what they are looking for in the program.

CCES has helped others and can help you develop an organized, responsive, and goal-oriented “Smart” program.

Sept. 6, 2011

The roles of the renewable energy and green manufacturing sectors, the so-called “Clean Economy”, are set to be major issues in next year’s national elections and perhaps even sooner.

While some, such as the Tea Party and other conservatives attack anything to do with climate change and environment (funny, those two concepts appear in my company’s name!), they are more accepting of the “clean” economy, even though it derives from good climate change and environmental practices. Economists of all parties acknowledge that the clean economy is already a fast-growing piece of our attempted economic recovery and that if managed the right way, the US could be world leaders in the field and be able to make more money and develop jobs. Political candidates have been and will continue to have photo-ops in front of US solar panel and wind turbine manufacturing plants. But are currently policies optimizing the growth of the clean economy and its economic and environmental benefits?

We may not have to wait long for an answer. The so-called “Super Committee” which must come up with federal spending cuts by December to head off larger, across-the-board cuts, will need to address energy and clean economy policy issues. First, many environmental groups are lobbying hard to eliminate all energy subsidies or certainly subsidies to industries working in fossil fuel areas and keep and expand incentives for renewable fuels. However, many in the political arena oppose subsidies for renewable fuel development, stating that the federal government should not “pick winners and losers” in the business sphere and, of course, because they favor fossil fuel companies. In the atmosphere of cutting federal spending and heavy lobbying, it will be interesting to see what the Super Committee will recommend in spending cuts affecting the fossil fuel and renewable energy industries.

In fact, the clean economy and energy policy goes to the heart of the matter of the role of federal government. Developing policies to change our entire country’s energy profile from fossil fuels to renewable sources of energy is an enormous task with tremendous potential impacts if done poorly (unemployment, pollution, cost, energy shortages, etc.). This begs for government involvement and reaching out to industry, academics of all types (energy experts, economists, environmentalists, etc.), environmental groups, citizen groups, etc. But we also live in an era where many are calling for less government involvement and have the US take a chance on “the market” to settle what our future energy profile should be. This is a scary thought to not use our best intellectuals to analyze options and to make the best long-term decisions based on the available information.