Of course, you don’t have to lease a Leaf to drive this first generation of electric cars. Enterprise Rent A Car just announced they will begin renting the Leaf in January in many cities.

However, companies are struggling with how to evolve their operations and product offerings to meet this growing consumer expectation. A common call to action among speakers at the recent Sustainable Brands 2010 conference (SB10) was the need for innovation in strategy, product design and messaging.

To capture this theme I conducted video interviews with SB10 speakers and attendees that I thought had unique insights on customer expectations and how to deal with issues of greenwashing, product certification and consumer engagement. This interview with with Lee Ann Head, VP of Market Research with Shelton Group profiles what consumers want, what they don’t want and how they relate to green brand messaging.

About 90 seconds into her video interview is an insightful discussion on the Sunchips video ad focused upon their “completely compostable” chip bag. Focus groups ranks this as the best ad among those targeting the green consumer. Yet behind this success lurks growing consumer awareness that “compostable” packaging does not decompose in today’s waste management system. Is this type of advertising an example of vision or greenwashing? What are the dangers of a future backlash from consumers self-educating themselves on sustainable practices who could potentially call it a “greenwash?”

Charles McGlashan is an elected county supervisor in Marin County, a community of approximately 250,000 people located across the Golden Gate from San Francisco. He is a Democrat who views the “American Way” and free enterprise as the path for developing price competitive sustainable solutions for restoring jobs, the economy and the environment. And most importantly, he is a doer. In the role of Chairperson of the Marin Energy Authority he led the effort to create an electric utility that today has sourced 78% of its electricity from solar, wind and hydro generation.

The National Renewable Energy Laboratory reports that 800 electric utilities offer “green” power. But the average price for this green power is approximately 2 cents more than non-renewable sourced electric power. McGlashan and Marin Energy Authority have broken the price barrier by offering renewable energy for less.

The implementation of the Marin Energy Authority will also result in a 500,000 ton annual reduction in CO2 emissions equaling about a 13% reduction in the entire county’s current emissions levels.

3p readers will recall that California’s historic global warming solution bill AB32 mandates a 20% reduction in CO2 by 2020. With the 2011 full implementation of Marin Energy Authority the county of Marin will have leaped into a statewide county-leadership position in achieving AB32’s goal.

The following video interview with McGlashan is the first of a three-part article series on public policy options available to America for providing consumers with competitively priced renewable energy while also restoring jobs and the environment.

A key question is whether this interest in derisking is just a fad reflective of a temporary string of bad luck or self-serving acions? Or has the world reached a critical mass of risk that requires de-risking?

The answer may lay in the emerging market research that point to consumers embracing de-risking as a key lifestyle component. And there is also growing business documentation that aligning with this de-risking trend affords an attractive revenue growth path for businesses offering de-risking solutions.

One such example is The Millennial Generation. They are heavily engaged in de-risking activities that address environmental and economic threats to their future. They use the word “cool” when they achieve a de-risking task, identify a de-risking technology or overcome Corporate America’s efforts to stop them. A perfect example is their victory in re-engineering the sourcing of music and movies away from a higher cost carbon-based system to a digital-system providing lower cost, transportability and a dramatically lower emission-footprint. The Millennial Generation intuitively sense that their economic power (and their dearth of political power) is their path for achieving change and they are flexing their economic power through collective purchases of “cool” goods and services enabled through their Internet-cloud of starfish-shaped collaboration. Patagonia and Apple are leading examples of companies The Millennial Generation point to as being “cool” that are also realizing impressive business results.

The Millennial Generation’s moms, defined as Concerned Caregivers, are not far behind the Millennial Generation’s de-risking procurement activities. Their de-risking focus is upon “wellness” for themselves and their family. Today there are 25 million Mommy Bloggers, up from 20 million only last year, that are blogging across a broad range of risk-issues including air quality, product labeling, diet and finances. Women in the U.S. are a procurement juggernaut controlling 75% of consumer purchases and they represent approximately $8 trillion in annual buying power. Evidence of the merger of their buying power and de-risking focus includes Package Facts’ recently released study entitled “Green Household Cleaning Products in the U.S.” which found green-cleaner sales revenues grew 229% between 2005 and 2009. While still only 3% of total-category-sales this rate of growth represents a doubling in size and a tripling in market share. Other examples includes Rainforest Alliance certified coffees achieving year over year doubling of their sales revenues and the Organic Exchange report that the sale of organic apparel and home textile products grew by 35% in 2009 to $4.3 billion of retail sales. Companies successfully connecting with Concerned Caregivers include P&G, Walmart, Clorox and Target.

A new de-risking leader has emerged over the last two years that I have labeled Sustainable CEOs. These business pioneers first embarked upon de-risking in anticipation of increased government rulemaking over green house gas emissions. In the process they discovered that lowering emissions can also reduce operating costs. Companies including Ford, Walmart and P&G are now pushing this emissions/cost reduction formula into their supply chain through formalized programs that require the reporting and achievement of sustainability-linked performance metrics. An emerging group of Sustainable CEOs are looking strategically at de-risking as path for revenue growth. Leaders here include 7th Generation and Timberland.

What is the market potential of “de-risking?” My current economic analysis forecasts a $10 Trillion global revenue economy by 2017 in goods and services that reduce personal and environmental risks. The major economic reason for this revenue growth is that goods and services that offer lower risk solutions are now gaining price competitiveness with higher risk goods and services. One example is the recent NREL report that 850 utilities offer green energy with the price premium charged to the consumer falling 50% from 3.4 cents per kWh in 2000 to 1.75 cents per kWh. Electricity is a classic example of de-risking’s economic potential as this industry faces escalating prices from its fossil-fueled generation while renewable energy is achieving lower prices from global technology innovations and economies of scale. Today, utility scale solar panels now cost 60% less than just five years ago and wind power is price competitive on a kWh basis against coal fired power generation.

This same downward price trend is being achieved across the fullest range of “green,” “sustainable,” “organic” or “non-toxic” products and services. A favorite example is Amanda’s, a Berkeley, California fast food restaurant serving organic and natural foods (including cheeseburgers, their #1 sales item) in a non-toxic dining environment. Amanda’s average customer meal price is $6, the same as McDonalds.

Finally, is it too much of a stretch to see in The Tea Party’s “Throw the bums out” slogan an alignment between voters and consumers frustrated by business and government leaders that view risk as something to be managed, engineered or ultimately paid for by the voter/consumer through the degradation of their environment, health and finances? In fact, this merger of consumer/voter focus upon de-risking is actually occurring in America’s communities from Republican Palm Desert, California to Democratic Gainesville, Florida. Today 1,000 cities in the United States, through the U.S. Conference of Mayors, are now committed to taking action to protect the climate with many embracing farmer markets, the financing of roof-top solar power/energy efficiency equipment through property taxes and the pursuit of economic development created by growing green industries. America’s cities are defining a new, buy-local economy that is sustainable, renewable, healthier for individuals and financially viable producing local jobs and tax revenues.

While de-risking will surely pass onto the lexicon of past clichés its implementation by consumers (and potentially voters) is a growing force for restoring the economy, environment and jobs.

1. 1,000 residential chargers, 1,300 commercial chargers, and 60 Level 3 fast chargers for electric vehicles in San Diego County
2. 1,667 networked electric vehicle charging stations in San Francisco, Sacramento and Los Angeles
3. 75 publicly accessible E-85 (85% ethanol, 15% gasoline) fuel stations.

These investments begin the process of:

1. Reducing dependence upon high-risk oil sourced overseas or from deep offshore drilling
2. Increasing human wellness from shifting to lower emission vehicles and fuels
3. Creating domestic jobs producing domestic fuels (and vehicles).

For example, 1000 Nissan all electric Leaf cars operating in San Diego are estimated to save ANNUALLY more than 1.7 million gallons of gasoline and reduce greenhouse gas emissions by nearly 5,000 tons of CO2.

Each city recharging station is estimated to annually displace over 150,000 gallons of gasoline per year and reduce greenhouse gas emission by over 800 tons.

The new E-85 fuel stations are estimated to reduce petroleum use by over 24 million gallons annually and reduce emissions by an estimated 170,000 tons per year.

Technology is no longer a barrier to Energy Independence or solutions that enhance rather than impair human and environmental wellness. Commitment by our government, businesses and ourselves is now the only remaining barrier to achieving Energy Independence and the de-risking of our economy and environment from reliance upon overseas or deep water sourced petroleum.

The municipal electric utility Austin Energy serving Austin, Texas was the top electric utility having sold in 2009 almost 765 million kWh of green energy or over 10% of national green energy sales. Rounding out the top five utilities were Portland General Electric (Oregon), PacifiCorp (Ore. and five other states), the Sacramento Municipal Utility District (Calif.), and Xcel Energy (Col., Minn., Wis. and New Mexico). The renewable energy common denominator for these top five utilities was their supplies of wind power.

The City of Palo Alto Utilities in California had the greatest percentage of customer participation in a utility green energy program. One out of five of their customers purchased green energy. This level of participation was double the level of participation of Portland General Electric that ranked second in the percentage of their customers buying green energy. Rounding out the top five were Madison Gas and Electric Company (Wis.), the Sacramento Municipal Utility District, and the City of Naperville (Ill.)

Most telling is the dramatic narrowing in the price difference between green energy and non-green energy sold by the utilities. In 2000 the price for green energy was 3.4 cents higher. RNEL reports that today this price difference has fallen to a 1.75 cents per kWh.

The U.S. Department of Energy (DOE) reported that the average residential price for electricity in 2000 was about 8 cents per kWh (the total average price for all customers was about 6 cents). At these 2000 electricity price levels buying green energy represented an approximately 50% price premium. Today the average price for electricity has increased to almost 10 cents per kWh with residential customers on average paying almost 12 cents per kWh. At these price levels the price premium for buying green energy has dropped to approximately 10% more in cost. And there was even one utility, Edmund Electric, where the price for green energy was LESS than the price for non-green energy.

The comparison of NREL’s research on falling green energy prices and the EIA’s documentation of utility electric price increases defines the growth potential for the utility industry and green energy. It appears only a matter of timing when increasing fossil-fueled electricity prices and decreasing green energy prices reach price parity.

Two additionally telling issues add to this economic analysis. One is the potential cost at the meter for “clean coal.” Electricity fueled by coal represents 50% of our nation’s total electricity generation. A U.S. DOE study estimates the current cost to recapture and store CO2 emissions from coal fired power plants to be $100+ per ton of CO2. The DOE references an analysis performed by SFA Pacific, Inc. that found electricity would cost 2.5 to 4 cents more per kWh if current CO2 sequestration technology was deployed at existing coal fired power plants. At today’s prices for green energy the cost for “clean coal” added to the current average utility prices would result in green energy achieving at least price parity, if not moving into a position of being the lower priced electric energy supply alternative.

The second issue is the potential for future utility price increases beyond the potential of price increases tied to the costing of CO2 emissions at the meter. The utility industry faces massive new investments in power plants, transmission lines and smart metering systems. A Moody’s 2009 study projected electric utility capital expenditures through 2019 to be 150-250% of the industry’s previous year’s annual depreciation and amortization rates. This means the industry will have to raise external sources of funds for which they will seek rate increases to reflect this increase in their capital costs. In addition, coal has become a global commodity trading at prices three times historical norms. This globalization price for fossil fuels further adds to the potential for utilities filing for rate increases.

Globalization is having an opposite effect upon green energy’s costs. Globalization is creating manufacturing economies of scale that are driving down the per-unit cost for green energy. A UNEP funded study found that global investment in renewable energy green has grown six fold from $22 billion in 2002 to $155 billion by 2008. The ramifications of this scale of capital investment is evidence by the manufacturing capacity growth in Europe, China and the United States that has created a global market for solar panels which is now delivering panels priced 50% lower at approximating $3 per DC watt. At this panel price in many parts of the U.S. a solar power system is price competitive with utility supplied power.

The implications for electricity prices and green energy are:

1. The price premium for green energy is going away. The price for green energy is declining. The price for non-green electricity is increasing. Even without Federal legislation the time is rapidly approaching where green electricity will “cost less, mean more.” Federal legislation reflecting the price at the meter and pump of fossil fuels’ externality costs will only accelerate the timing of this sea changing pricing event.
2. Customers are increasingly buying green. Beyond the topic of electricity there is a sea change occurring in consumer buying behavior. Market research has document that the overwhelming majority of consumers will buy the more sustainable product versus the less sustainable product if their prices are at least in parity. Today’s green electricity sales by utilities are only 5% of their total sales. This is representative of the green market segment that will pay more to go green. However, the consumer implications when green energy achieves pricing parity are massive for the utilities, our economy and our environment. The economics of green energy holds the promise of providing rate stability and environmental recovery.

The good news is that no one is expected to turn green overnight, but brands are expected to be truthful about their progress. “Restaurants should be honest about the extent to which they’re green. It’s OK to say you’re taking steps and not where you want to be,” Roth says.

Roth’s “secret green sauce” recipe to help avert the skeptical activist is to “prove it conclusively.” He cites the Green Restaurant Association, which is a third-party endorser of legitimate green practices by restaurants that has been around for 15 years but only recently gotten the industry’s attention. “I’m enthusiastic about their methodology because it’s about progress: It’s easy to enter, but to maintain affiliation you have to get progressively better every year,” he says.

In terms of getting the word out, social-media vehicles seem to be the method of choice among the experts I spoke with. Menken says that since it is only the activists and business people who have been getting the word out about green practices, “quick serves need to reinvigorate their messaging by going directly to the consumer. In the consumer space and the restaurant industry, these companies need to directly engage customers through blogs, online, and Twitter. Skip the influencer and go peer to peer.”

Roth agrees. “It’s a new paradigm,” he says. “With the development of social media, companies who are effectively communicating green practices are engaging their customers through this medium. Engage your own consumer as if you, the entrepreneur, are involved. It’s a communal premise—it’s not advertising.”

Benchmarks and Basics
That premise is exactly what seems to have helped Amanda West launch her restaurant, Amanda’s, in Berkeley, California, in 2008 that serves “quick-service foods that are better for both customers and the environment.” West’s background as a blogger on healthy and enviro-friendly living gave her the perfect forum, and credibility, for attracting dozens of local media, including television, restaurant guides, eco-publications, and other grassroots endorsements to create buzz about her store and attract patrons.

“I started out doing monthly e-mail newsletters to anyone I met,” West says, including to a local news reporter she met at a city council meeting who became Amanda’s first TV interview. “Networking is really effective. I met a woman at a Chamber of Commerce meeting who does East Bay green tours. We’re the first stop of the tour.”

West says she also donates a lot to community organizations involved with health and the environment, including the local public radio station. “A lot of people say they heard about us from that,” she says.

In some ways, small-scale operators like West may have an advantage in the green marketing trend. For example, a large company can promote its groundbreaking sustainability program on a national level, but still miss the local piece that consumers experience.

No matter the size of the quick serve, West’s advice is that “it is important to be authentic when you’re marketing. People appreciate our Google spreadsheet we embedded in our Web site that says what we’re doing well and what could do better. That’s really transparent. If you say you’re doing something well, why not say what you’d like to do better?”

Here’s the list from Scarborough Research: http://www.weknowthelocals.com

1. San Francisco/ Oakland/ San Jose
2. Washington, D.C.
3. West Palm Beach/ Ft. Pierce, Fla.
4. Seattle/ Tacoma
5. Buffalo, N.Y.
6. Austin, Texas
7. Fort Myers/ Naples, Fla.
8. Boston
9. Wilkes Barre-Scranton, Pa.
10. Jacksonville, Fla.

However, I reached out to Walmart to inquire on how they were engaging their 2+ million associates, located across four continents, in turning their announced strategies into tangible results. The answers to my questions are best practices that every human resources leader in America should post onto their bulletin board.

“We have a volunteer associate sustainability program at Walmart,” explained Candace Taylor, Walmart’s Director of Sustainability. “This program asks our associates this basic question, What one thing could you do to make a difference in terms of your health, your community or the natural environment?” From asking this question Walmart has now successfully engaged approximately half of their U.S. associates and more than half of associates in other markets such as Brazil and Canada to take action on making a difference. That’s at least 500,000 people around the world focusing upon wellness, their community and the environment.

“In many cases our associates first focused upon the question of personal health,” Taylor observed. “We have seen a tremendous number of associates who have quit smoking or have achieved significant personal weight loss. What we are now seeing is that from this first tier of success associates are expanding their focus onto how they can volunteer more in their local communities and understand actions they can take that benefit the natural environment. In addition, as more associates report their successes we are seeing more associates volunteer to participate in this program.”

Chapter Six of my book The Secret Green Sauce profiles eight green team best practices harvested from companies who are having implementation success achieving profits through reducing their environmental footprint. The first two best practices on this list are the very same ones that Walmart has used to anchor the start-up of their program, namely a focus upon “Volunteers”> and “Start With Low Hanging Fruit.” One of my favorite examples from within my business network is a company where their first green team was started by their Human Resources manager with volunteers drawn from across the company. After much brainstorming they elected to first focus upon an idea for using glassware rather than paper cups in the company kitchen. Today, this singular volunteer effort is achieving $12,000 in annual savings with a corresponding reduction in their paper waste stream. And it was achieved without senior management attention or company funding. I have heard stories like this from company after company where measurable bottom line profits and positive environmental impacts are being achieved from empowering volunteer-associates on the question of how to adopt sustainability.

Another key best practice Taylor identified was Walmart’s continuous recognition of associates and their stories of achievement. “Each store and department in Walmart has the freedom to determine who to recognize,” Taylor explains. “And we also recognize associates at our annual corporate meetings. For example, last year we recognized an associate who brought to our attention the value of taking the lights out of break room vending machines. This action saves the company $1 million a year!”

That is number seven, Celebrate Success, on my list of green team best practices. Companies that are succeeding in growing their green revenues and profits are doing so by growing their associates’ support through recognizing their contributions. Some do it like Walmart through management recognition while others hold cook outs or social events that mix fun, sustainability and profits.

Executive and management sponsorship is also critical to sustaining green team success and is why I listed it as number three on my green team best practices list. This too is a hallmark of the Walmart program. “We not only offer time for associates to adopt sustainability projects but we offer this same opportunity to our managers and leaders,” Taylor notes. “We are now seeing affinity groups emerge around issues like recycling or water conservation that includes participation by both associates and management. We even have examples of volunteers networking to find managers and leaders who will volunteer their time in support of a team’s efforts.” IBM’s legendary president Thomas Watson, Sr. introduced many innovations in human resources development tied to engaging associates that he summarized in a one word motto, “THINK.” At this critical stage in business where our economy and environment is searching for solutions the dynamic of Walmart’s associate/management engagement articulately captures Watson’s vision. Businesses in my network that are enabling collaborative management/associate thinking are succeeding in growing green revenues, profits and environmental improvements.

And my interview with Taylor has now provided me with a new, number nine best practice for a company seeking to adopt human resources activities in support of going green. This new best practices is: Green Teams Will Grow Leaders. “One benefit from our program is that our company is now discovering new leaders among volunteering associates,” Taylor notes. Taylor is actually such an example having begun her involvement in sustainability as a volunteer in the Real Estate Department where she worked. Her own volunteer efforts as a captain of the associate sustainability program provided her the opportunity to earn her current job as the Director of Sustainability. Taylor led a team of associate volunteers in her department and provided personal examples of how she began composting and using reusable shopping bags to lower her impact on the environment.

A lot of the businesses in my network shop at Walmart. Even more lust to be one of their suppliers. Now there is a growing additional reason for businesses to focus upon Walmart. This new reason comes from their pioneering efforts at developing human resources best practices that are producing measurable results for the environment, wellness and profits.

1. Los Angeles
2. Washington, D.C.
3. San Francisco
4. Denver
5. Chicago
6. Houston
7. Lakeland
8. Dallas-Fort Worth
9. Atlanta
10. New York

EPA first issued its ranking of cities with the most Energy Star labeled buildings last year. This year, Los Angeles remains in first place; the District of Columbia picks up second; Denver and Chicago move into the top five; and Lakeland and New York City are new to the top 10.

In 2009 nearly 3,900 commercial buildings earned the Energy Star, representing annual savings of more than $900 million in utility bills and more than 4.7 million metric tons of carbon dioxide emissions.

Since 1999 nearly 9,000 buildings across America have earned the Energy Star as of the end of 2009, representing more than a 40 percent increase over last year’s total. Overall annual utility savings have climbed to nearly $1.6 billion and greenhouse gas emissions equal to the emissions of more than 1 million homes a year have been prevented.

Energy use in commercial buildings accounts for 17 percent of U.S. greenhouse gas emissions at a cost of over $100 billion per year. EPA awards the Energy Star to commercial buildings that perform in the top 25 percent of buildings nationwide compared to similar buildings. Thirteen types of buildings can earn the Energy Star, including schools, hospitals, office buildings, retail stores and supermarkets.