April 22nd, 2010 by Amit Chatterjee

On behalf of Hara, I would like to congratulate the City of Palo Alto on their selection as an Infoworld Green 15 winner. This award recognizes Palo Alto’s sustainability leadership and effective management of what we call organizational metabolism — the sum of the collective resources consumed and expended. No matter what business you’re in, managing and optimizing your organizational metabolism matters to you, and Palo Alto is a great example.

Palo Alto is just one example of our customers across industry types from Safeway and News Corporation to Intuit and Aerojet, that are leading their peers into the post-carbon economy, by enabling an auditable environmental system of record and accessing best practices in order to increase their operational efficiency, maximize value and manage risk. We look forward to enabling other members of the Hara community to join these organizations as a sustainability leader by effectively managing and optimizing your energy, water and waste abatement strategies while reducing carbon emissions. 

Happy Earth Day!

April 20th, 2010 by Michel Gelobter

This week marks the 40^th anniversary of Earth Day. Although a lot of us wish we were doing better by the planet, I can’t help but marvel at what is arguably the high water mark for U.S. engagement on environmental issues that we are seeing today.

The only period that really competes in American history is the intense few years that followed the first Earth Day and that saw the passage of the Clean Air Act, the Clean Water Act, and other landmark legislation that shape today’s regulatory landscape. The reason I think we may be doing even better today is because Earth Day now finds us in the middle of an all-hands effort to reshape the economic landscape.

The environmental laws of the 70s, 80s, and 90s focused primarily on traditional pollutants and the massive effects that relatively small quantities of toxic materials had on human and ecosystem health. Today, this year, our focus is much more on what Hara calls “organizational metabolism,” or the full resource throughput of the economy, and therefore the actual efficiency of the economy as a whole.

This broader focus is incredibly good news. 

First, its good news for the more traditional, health-focused environmental issues because, after all, more than 70% of them stem from energy use and related activities. So, as we aim to reduce fossil fuel use (or at least emissions) over the next four decades, we can expect to see that 70%  come down as well.

Second, how much cooler is it to be part of fixing the economy than to be slapping down regulations? Obviously the two go hand in hand, but Earth Day 2010 gets to be about not just stopping pollution, but also about building our future economy, about being more economically efficient, about growing and profiting.

Third, an Earth Day that is about economic and environmental rebirth, is a celebration that is being shared by a more diverse and widespread audience than ever. Average Americans get to celebrate a new green jobs sector and spending less at the pump, communities of faith can marry their concern for social justice with creation care, and businesses get to see their stock price rise as a function of how lean and clean they’re working.

When you’re in the thick of change, it’s easy (and even wise) to focus on the troubles on the horizon. But as you celebrate Earth Day 2010, look around…remind yourself of how deeply we all need and care for our planet, and then notice how much bigger an agenda we’re tackling and how many more people and companies are tackling it than ever before. 

What sets a new high water mark?  A flood.

April 1st, 2010 by Michel Gelobter

Last week saw the quiet release of bi-partisan draft legislation sponsored by Senators Kerry (D – Massachusetts), Graham (R – South Carolina), and Lieberman (Independent – Connecticut), a.k.a. KGL. With health care finally off the table, the legislative agenda is opening up and there is a sense that, once again, climate legislation is possible this year.

To recap…the EPA is already starting to regulate greenhouse gasses under the Clean Air Act, a blunt instrument mostly because the Act was built to stop pollutants measured in parts-per-million rather than tons-per-year.  Greenhouse gasses can be reduced at a profit, but only if the Federal Government has the power to bring economic tools and incentives to bear as well. The House of Representatives has also passed legislation to stop global warming that relies heavily on cap-and-trade, or the creation of a emission permit system that would encourage trading and market mechanisms.

The KGL draft’s most striking feature is its repudiation of cap-and-trade in favor of a straightforward price on carbon, or climate pollution. The bill also takes a more sectoral approach, preferring to regulate industry sectors than the economy as a whole. At the end of the day, the bill requires cuts of 80% by 2050, but it’s not clear yet that it will have the regulatory teeth to reach that goal.

Who’dathunk? Just two weeks ago, climate legislation was pronounced dead. Yet here we are with the Senate back to starting down a bi-partisan path toward comprehensive energy and climate change action. Interesting times indeed…

April 1st, 2010 by Michel Gelobter

The greenhouse gas reduction targets for California are aggressive – the State means business when it comes to addressing global warming. The other aggressive part of California’s climate agenda are the timelines.

First, under California law (enacted by Assembly Bill 32 or AB32) there are a number of “early actions” that are already in effect, and some of them affect everyday commerce:

• Over 40,000 auto shops will soon be required to ensure that tires on the vehicles they service are properly inflated – a policy that could increase fuel efficiency by up to 20%.
• A limited set of high-impact consumer goods (certain air fresheners, pressurized gas dusters, and the like) and emissions/sales of high-impact gasses (Sulfur Hexafluoride – SF6 – a greenhouse gas almost 30,000 times more potent than CO2)
• Retailers must comply with a sort of “bottle bill” for refrigerants which makes them responsible for safely collecting refrigerant containers
•  Heavy-duty trucks are required to meet new fuel efficiency standards and large cargo boats need to plug in when docked to reduce the use of diesel engines in ports.

See arb.ca.gov/cc/ccea/ccea.htm for more details on AB32’s existing provisions.

AB32 is not the only game in town that’s driving action today. A slew of additional renewable energy/conservation requirements are helping to ensure that California will play a leading role nationally for renewables and efficiency. An anti-sprawl measure passed in 2008 (SB375) sets clear guidelines by which urban development will help cut emissions, and 2010 is the year California must meet a requirement that 20% of its electricity be generated from renewable sources.

All told, California has a lot going on when it comes to regulating climate pollution and energy use. As I hinted above, there’s a strong tradition of 12-14 Northeastern states (nescaum.org) following suit on almost everything that California does. So, whether you do business in California or not, get ready, cause its regulations are coming to a government near you.

March 17th, 2010 by Michel Gelobter

The last few weeks, I’ve covered a range of federal actions that are driving energy and carbon onto the business agenda. For all that action though, the real action is in the states, starting with California.

I had the privilege in 2002, of helping California legislators craft what has become the world’s most aggressive climate change law, the California Global Warming Solutions Act. The law is aggressive because it essentially mandates compliance, by all of California, with the Kyoto Protocol. This means reducing emissions back to 1990 levels by 2020 (a more than 15% decrease from emissions levels today and a 30% decrease from what emissions were expected to be absent the law). Although the law gives the state significant time, it also mandates reductions of up to 80% of 1990 emissions by 2050.

Reporting under the law has already started for sources larger than 25,000 tons and anyone in the state generating more than 1 MW of electricity. The regs here, like EPA’s, embody a whole host of calculation methodologies for power generation, refineries, cement plants, biomass conversion, and fuel use. If you have to report, you usually know who you are, but watch that pretty low power threshold. A lot of co-generation facilities are being subsumed under this rule.

The law’s major provisions kick in in just 2 years (2012). They are sweeping and involve:

· Substantially stepping up building and appliance efficiency standards;

· Getting the overall mix of energy up to 33 percent renewables;

· Developing a state-level cap-and-trade system;

· Controlling transportation related emissions, including a Low Carbon Fuel Standard; and

· Creating lasting revenue streams from fees for water use and other systemically large sources of greenhouse gas (pumping water accounts for 20% of California’s electricity use!)

All told, these measures represent a set of near-term changes and opportunities for business-as-usual in almost every sector. And the nature of the California law means that the changes will keep rolling out for the foreseeable future.

And did I mention that over a dozen Northeastern states are trying to opt-in to essentially just follow suit and adopt California’s program?

March 5th, 2010 by Michel Gelobter

Climate regulations have been cropping up and even implemented for quite a while in Europe, California, and some Northeastern states.  But the US federal government has been catching up fast and with it comes the kind of detailed attention to regulation the world’s leading environmental agency is famous for.

Check out the EPA’s “Mandatory Reporting of Greenhouse Gas Rule” often referred to as MRR. 300 pages long, and almost half of that are detailed specifications for how to calculate emissions from ammonia manufacturing to aluminum smelting.  And those details aren’t just about compliance…they can be a roadmap to efficiency because, unlike toxic pollutants, when you figure out how to optimally reduce climate pollution you’re usually also saving a lot of energy, materials, and money.

These rules were effective January 1, 2010, but we’ll be learning a lot more about how companies use them, which of many alternative approaches to reporting allowed are most efficient, and how many of the specific rules apply to any one given company or facility.

One thing that’s clear now is that software is going to play a big role in keeping track of the diverse types of emissions sources out there and all the ways you can calculate an industrial carbon, and for that matter energy footprint, under the regulations.  As supply chain tracking deepens, we’ll need to know how to account for those emissions not just at the source, but down the chain in finished products.  Comprehensive, real-time analysis will make it possible to grow production while driving down emissions and energy costs.  The big wins will accrue to those who’ve learned how to find patterns in the details.

Climate change is a big picture business.  But as regulation becomes real, the details come fast and furious.  That’s why an enterprise solution that provides companies with a comprehensive environmental and energy system of record, like Hara, is so necessary – enabling visibility and control of the details across stakeholders so you can focus on the big picture.

February 19th, 2010 by Michel Gelobter

I want to take a break from the details this week to talk about the big picture. Since the end of last summer, we’ve seen an ever accelerating set of activities by companies and by governments on the energy and global warming front. These have a lot to do with what I called “pincer actions” last week. 

Taking a step back, I want to make the case that, when it comes to America’s energy future, this particular quarter is likely to be the most important one for a decade in either direction.

Why? Take a look at a sampling of what’s going on in the US and the world:

• We’ve just concluded the first global warming summit where all the world’s major emitters came up with the first joint plan since the 1992 summit in Rio.
• Tens of billions of energy-oriented stimulus dollars are finally hitting the street in real dollars to real businesses and households.
• This is the first quarter of mandatory reporting under Federal clean air regulations for major carbon emitters.
• President Obama just released $8 billion in loan guarantees for new nuclear plants.
• There are at least three versions of Senate legislation aimed at curbing global warming and stimulating clean tech investments.
• The Securities and Exchange Commission just issued guidance that climate change really matters to investors.

And there’s much more to come in the next few weeks. 

There is bi-partisan consensus that America needs a new energy policy, and rumors that up to a dozen Republican senators are willing to consider climate change legislation.  At the same time, the Democrats no longer have a filibuster-proof majority and a number of bills and lawsuits have been filed to slow the EPA’s momentum in regulating carbon.  More than anything else, this twelve week period will be distinguished by the new rules of the road for energy and climate that will be laid down, or not. 

Two milestones will mark the end of this quarter – the 40^th anniversary of Earth Day, and the beginning of the silly-season of mid-term congressional elections. In the midst of great turmoil and great progress, which of these powerful forces will we remember ten years from now?

February 12th, 2010 by Michel Gelobter

Yes, there are national climate laws already…

The first of what I referred to last week as “pincer actions” are the EPA’s new climate regulations, some already in force and more even proposed.

How can the EPA regulate greenhouse gasses (GHGs) when the Congress has yet to pass a climate bill?  Well, in early 2007, the Supreme Court simply ruled that climate pollution met the threshold of the Clean Air Act, one of our country’s earliest and most powerful environmental laws.  This is the law that communities use to stop urban development when a region’s air quality is bad, and it underpins many, if not most, environmental impact challenges to new construction.

Effective January 1, 2010, EPA took the first of many steps under this ruling…EPA mandated reporting of GHGs from large facilities emitting 25,000 tons of greenhouse gases or more.  But it’s the next two steps that really count… EPA followed this new reporting rule with both an endangerment finding and a proposed rule regulating large emitters.

Of these two, the endangerment finding is most fundamental.  It lays the groundwork for a broad regulatory agenda based on the facts it establishes that greenhouse gasses are a threat to human health and welfare.

What does this all mean for your climate and energy agenda?

• If you’re one of the estimated 10-15,000 facilities that burn coal or emit more than 25,000 tons of CO2, start counting now.  You have to report your emissions for this year by March, 2011.
• If you depend for energy or supplies on one of these facilities, it’s worth considering that their price is going nowhere but up until we’ve stabilized global carbon emissions.
• If neither category above applies to you, now’s a great time to start taking stock of when and how your greenhouse gas profile is going to intersect with shareholder value and your broader organizational values.  Are you at a competitive advantage because you buy your power from a greener source?  Can you deepen your relationships with employees, customers, or investors by getting ahead of the regulatory curve on global warming? Many leading organizations are already taking action to manage carbon and energy in order to improve business efficiency (reduce cost), maximize brand and shareholder value, and manage risks.

The Supreme Court’s 2007 decision started the ball rolling inexorably towards greenhouse gas regulation.  The speed and direction of that regulation is still pretty uncertain, but for some it’s here already.  For the rest of us, it’s around the corner.

February 12th, 2010 by Joel Riciputi

Last week we had the pleasure to partner with Groom Energy Solutions and our customer News Corporation to deliver a webinar titled Energy and Environmental Management Across the Global Enterprise. From all indications the webinar was well received with participants coming from across industry and organization types including retail, high-tech, consumer packaged goods, travel, life sciences, energy and government agencies at all levels.

So what did it cover? News Corporation presented a powerful case study that helps cut through the noise that is prevalent around these issues today, hitting on a range of highly interesting information from the company’s current global energy initiatives to their longer-term plans across the entire organization of more than 1,000 locations. The slide that may have grabbed the most immediate attention was on their making the hit show 24 carbon neutral, featuring an arms crossed, stern faced, Kiefer Sutherland staring out at the audience.

As a leading industry analyst, Groom spoke to the key drivers for why companies are implementing energy and environmental management solutions. And that takes us to the premise of this post and what you may find of most interest. During the course of the event we ran a quick poll asking the attendees to rank what they saw as the top drivers. With hundreds of responses, here’s how it fell out:

1. Cost Saving: 49%
2. Company brand/image: 26%
3. Request From Customers: 12%
4. GHG Regulation: 11%
5. Investor Pressure: 2%

As you can see, cost savings was far and away the number one driver. That certainly backs up what we’re seeing with our customers as they seek to grow and profit while reducing their environmental impact. Given, it’s just one snapshot in time and external factors such as the recent SEC guidance may start to play a bigger role. But as more and more businesses seek to effectively manage what we call their organizational metabolism (the sum of the collective resources consumed and expended), it always comes back to the bottom line.

February 4th, 2010 by Michel Gelobter

Last week I was excited to write about new SEC guidance on how every company should disclose the risks and opportunities from climate change to their bottom line. But this is just one strategy that the Federal Government can and will be taking to promote climate action and reduce energy use whether or not Congress passes legislation.

It turns out that, if you believe the science of climate change, the Federal  Government (and anybody running it) can claim a mandate to take action under existing laws. The National Environmental Policy Act pushes every agency to include important environmental impacts in their decisions and activities. The Supreme Court ruled in 2007 that greenhouse gasses were a pollutant under the Clean Air Act, and therefore could be regulated aggressively. Late last week, the President signed an Executive Order mandating that federal operations reduce their carbon footprint by 28% by 2020.

The Obama Administration appears to be serious about getting greenhouse gasses under control, and they don’t appear to be shy about using all the legal tools in their arsenal to do so. There is widespread consensus that a climate-specific law would be the best way to achieve deep change, but until the political climate for that is ripe, we can expect aggressive use of all the tools at the Executive Branch’s disposal.

I like to call these steps “pincer actions” because, rather than taking climate head-on, they represent a multitude of angles (SEC disclosure, health risks, procurement, etc…) for closing in on a policy. And, like military pincer actions, they evoke a sense of inevitability and sometimes panic. Perhaps Senators Graham and Kerry said it best in a New York Times op-ed piece a few months back…

“The message to those who have stalled for years is clear: killing a Senate bill is not success; indeed, given the threat of agency regulation, those who have been content to make the legislative process grind to a halt would later come running to Congress in a panic to secure the kinds of incentives and investments we can pass today.” (Read more)

So what’s a company to do? First, don’t panic. Hara’s solution can help any company get on top of voluntary and non-voluntary disclosure requirements.

Second, thrive. Hara goes far beyond measurement and accounting to empower you to plan and innovate your way to big savings and increases in productivity.

Third, stay tuned to this blog. Over the next few weeks, I’ll be covering the elements of the Administration’s pincer strategy on climate one by one and explaining what they may mean for you or your supply chain. There’s a lot going on and we’ll be making sense of it right here.