Green Washing

In today's market there are many claims: Zero Waste, Carbon Neutral, Sustainable; yet there is limited agreement on what these statements mean. Businesses and consumers alike are in search of consensus on such statements. There is market demand for validation by trusted sources of how product offerings meet their claims of environmental value.

We will see the rise of new sources of green data collection (Lucid Design Group, Fat Spaniel), and green certifications across a range of offerings will help differentiate products. (LEED , SCS, CCOF)

Conversation with Ullas Naik from Globespan Capital

Executive Green: How does Globespan approach investing across a theme as broad as CleanTech?

Ullas Naik: It is challenging to look across so many distinct business categories. Our approach is to look at the value chain within a category and place strategic investments in the leaders in each area.

For example with the Solar market, we have invested in three phases of the value chain:

At the raw material stage, Calisolar innovation focuses on addressing the global shortage in silicon. The company has introduced innovation in the area of “dirty silicon” in order to achieve competitive advantages in feedstock costs, wafer yields and solar cell efficiency.

Globespan’s investment in Advent Solar is focused on increasing the performance of photovoltaic (PV) cells and modules. Bringing PV efficiency to a price point that is competitive with traditional forms of energy production (Coal and Nuclear) is crucial to building a sustainable solar market.

Solar Power Partners is a leader in driving the adoption of solar energy by reducing the initial capital costs required for a business to deploy solar by offering a power purchase agreement (PPA). The company focuses on deploying solar energy facilities that add real value to commercial businesses, institutions, and government facilities.

EG: Why did you invest in SPP?

UN: We are excited by SPP’s current customer base, and the company has a great pipeline of business. SPP has the third-highest number of PPAs in the solar market (behind MMA Renewable Ventures and SunEdison) and the company is closing the gap.

PPA companies are currently mostly aimed at the commercial sector and could emerge as the key driver for the adoption of renewable energy. The underlying providers are thinking creatively about how to accelerate and scale the growth of the solar market. PPA companies are reducing the financial barriers for businesses to enter the solar market, and increased amount of purchasing creates greater efficiencies downstream. For example SunEdison placed a billion dollar order with First Solar.

EG: How important are subsidies to the success of the solar market?

UN: Innovation will drive the price point of solar and other renewable energy sources down over time. However, for the next 3-5 years, subsidies are critical in order to let a new market grow.

The enormous uptake and positive impact in Spain and Germany are good examples of the benefits of subsidies and feed-in structures.

EG: What investment categories are interesting to you?

UN: We are dedicated to following a value chain-oriented strategy, similar to the one we have employed in the solar industry, to other markets. We are currently looking at opportunities in clean coal, wind, biofuels, building materials, etc.

EG: Are you concerned by the limited number of people in the marketplace with domain knowledge?

UN: Similar to some of the investments we made in the early days of the Internet boom, CleanTech companies will require executives that will adapt from new and adjacent industries.

When we look at investing an “A” round of capital, we prefer that the founding team have domain expertise; but as the company scales and needs professional managers, we look for executives with proven startup experience and will take a chance on managers who come from other domains.

EG: Is CleanTech investing important you on a personal level? Why?

UN: Yes, it is very important to me. Climate change is real, and as a global society we are seeing the detrimental effects of it almost every day. It is important to me to drive the creation of more carbon-neutral options and sustainable business practices for my two children as well as the next generations. I am privileged to be in a position where I can try to make a big difference and hopefully derive profits in the process by building new companies that will reverse the effects of decisions that were made in the past.

Al Gore joins Kleiner Perkins Caufield & Byers

Further confirmation that Silicon Valley's new engine of innovation will be Green: diligent investor Al Gore joins KPCB, emphasizing the importance placed on insights into current and future policy.



Mr. Green will be calling the shots:
Mr. Gore’s part-time duties will entail investigating the growth potential of start-up companies focused on the alternative energy sector, and then weighing in on whether Kleiner Perkins should finance those companies. [NYTimes]

California Clean Tech Open

Executive Green congratulates all the participants and winners of this years California Clean Tech Open (CCTO).

Hosted at the San Francisco Palace of Fine Arts, the CCTO featured the innovation of passionate entrepreneurs that are meeting the challenges of developing a more sustainable economy.

It was inspiring to see so many bright minds come together to be part of the solution. In attendance where different capital classes (Venture, Debt, Investment Banking, etc) strategizing on how to fund businesses to maturity, people identifying how their skill set can fit into the Green Frontier, and Exhibitors raising the public’s awareness about their offerings.

Winners and runners up are:

Smart Power Award

Winner - Lucid Design Group

Lucid creates real-time feedback on the environmental performance of buildings and homes to engage, educate and motivate occupants to better conserve environmental resources.

Runner Up - Federspiel Controls

Federspiel Controls provides a wireless control system called the Federspiel Advanced Control System (FACS). FACS performs supervisory control of HVAC systems, reducing energy consumption and improving maintenance and operations.

Air, Water and Waste Award

Winner - Microvi Biotech LLC

Microvi Biotech is leading a modern environmental biotechnology revolution that will make the decontamination of water resources cost-effective and conventional treatments obsolete, and forever change the current ways of providing pollution control, remediating water resources, and treating industrial and municipal wastewater.

Runner Up - EarthGuard

EarthGuard manufactures environmentally friendly plastic packaging.

Green Building Award

Winner - BuildFast

BuildFast is a building materials manufacturing company that has developed an innovative House Kit solution to help governments and nonprofits build low-income and post-disaster housing around the world - an untapped, multi-billion dollar market

Runner Up - Enverity Corporation

Enverity Corporation develops and markets web-based enterprise software applications that automate and facilitate improved corporate data management and reporting (initially focused on environmental, health, safety compliance and greenbuilding).

Transportation Award

Winner - Syncromatics

Syncromatics provides real-time bus tracking systems for transit operators; our services bring efficiency to routes and information to riders, while cutting the operating costs of bus fleets. Syncromatics uses GPS and cellular networks to transmit location, speed and passenger information from buses to your web browser in under 5 seconds.

Runner Up - Hum Cycles

Hum Cycles is the first production electric motorcycle to rival any gasoline sportbike. More importantly, the motorcycle and the company will be at the cutting edge of environmental sustainability. Hum Cycles is designed from cradle to cradle with recycled and recyclable materials, is non-toxic and amazingly efficient.

Renewables Award

Winner - 1-Solar

1-Solar, Inc., has patent-pending technologies, proof-of-principle prototypes and industry experiences to design, manufacture and market the next generation of inverters that have double to triple the life of current technology inverters, yet cost less.

Runner Up - Tahoe Water Systems

Tahoe Water Systems provides a self-contained solar/wind based solution that is competitively priced in acquisition, installation and operational costs.

Energy Efficiency Award

Winner - NiLA Inc.

The NiLA Lighting System uses 50% to 70% less electricity and generates 75% less heat than tungsten or high intensity discharge (HID) lights, thus substantially reducing air conditioning costs and creating a more comfortable working environment for its first target market - stage set lighting for the entertainment industry.

Runner Up - Ahwahnee Technology

Today, lighting consumes roughly 20% of our global electricity, wasting more than 70% of it as heat. This whole process causes nearly as much CO2 as that made by all cars. Ahwahnee energy-efficient lighting is the simplest way to cut 10% of global electricity usage and greenhouse gases.

Conversation with Ann Edminster on Green Building

Ann Edminster
Co-chair
U.S. Green Building Council’s LEED Homes Committee
Ann Edminster, M.Arch., is an environmental design consultant and educator whose work focuses on investigation and evaluation of building materials and systems. She is co-chair of the U.S. Green Building Council’s LEED Homes Committee and past co-chair of the LEED Materials & Resources Technical Advisory Group. She is co-author of Efficient Wood Use In Residential Construction: A Practical Guide to Saving Wood, Money, and Forests and has been an invited speaker at dozens of regional and national green building conferences over the past decade. Her background includes more than 25 years of work as a residential designer.

Executive Green: How did you start thinking about Green Building?

Ann Edminster: The combination of my degree in Architecture and the fact that I cannot stand waste of any kind started me thinking early in my career about how to build more efficiently and sustainably.

EG: What are some the recent changes you have seen in Green Building?

AE: It seems like at the start of this year (2007), consumer awareness moved past Why should I build green? to Let’s find solutions on how to build sustainably. Finally we have momentum in the industry. LEED is a starting point for builders, architects, businesses, and consumers to agree on a measurement of quantifying resource efficiency.

EG: What is LEED?

The Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ is the nationally accepted benchmark for the design, construction, and operation of high performance green buildings. LEED gives building owners and operators the tools they need to have an immediate and measurable impact on their buildings’ performance. LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality.

EG: How are different government bodies using LEED to help create change in the building process?

AE: Governments are adopting LEED and using it as a standard. Some Local, State, and Federal bodies now mandate that construction of public structures complies with LEED guidelines. They incentivize sustainable building projects in the private sector with perks such as expedited permit processing and relief on fees.

EG: Do you have any concerns about all the recent attention to Green Building?

AE: The industry is in a very exciting time, and the increased attention to sustainable building practices will result in a net positive for the industry.

A building is a place where art meets science. For example the placement of a window can be viewed by the structural engineer for how it will affect the strength of the building, by the architect for the light aesthetics [MSOffice1] it will provide, by the facility manager for its affect on heating and cooling, and so on. With so many people involved and everything so interconnected, there are many areas where people can create ideal or sub-optimal results.

Green Building by the Numbers
Courtesy of U.S. Green Building Council

The value of green building construction starts is expected to exceed
$12 billion in 2007. (Source: McGraw-Hill Construction Analytics)

Size and Impact of the U.S.-Built Environment (all commercial, residential, and industrial):

* Represents 20% of 2001 U.S. economy (Source: National Institute of Standards and Technology and the National science and Technology Council: Construction Industry Statistics, 1995)

* Comprises 14.2% of the $10 trillion U.S. GDP (Source: 2006 U.S. DOE Buildings Energy Databook)

Energy consumption:

* Buildings represent 39% of U.S. primary energy use (includes fuel input for production). (Source: 2003 U.S. DOE Buildings Energy Databook)

Electricity consumption:

* Buildings represent 70% of U.S consumption. (Source: 2003 U.S. DOE Buildings Energy Databook)

Water use:

* Buildings use 12.2% of all potable water, or 15 trillion gallons per year. (Source: U.S. Geological Service, 1995 data)

Materials use:

* Buildings use 40% of raw materials globally (3 billion tons annually). (Source: Lenssen and Roodman, 1995, “Worldwatch Paper 124: A Building Revolution: How Ecology and Health Concerns are Transforming Construction,” Worldwatch Institute

Waste:

* The EPA estimates that 136 million tons of building-related construction and demolition (C&D) debris was generated in the U.S. in a single year. (Source: http://www.epa.gov/epaoswer/non-hw/debris/about.htm and U.S. EPA Characterization of Construction and Demolition Debris in the United States, 1997 Update)

* Compare that to 209.7 million tons of municipal solid waste generated in the same year. (Source: U.S. EPA Characterization of Municipal Solid Waste in the United States, 1997 Update. Report No. EPA530-R-98-007)

EG What business opportunities do you see in Green Building?

AE: Many different products go into a building, and we will see innovation across the board in the efficiency of how materials are sourced and developed.

Businesses and Governments have begun to measure resource efficiency (CO2 emissions, Water consumption, etc.). We eventually will see an application that will take the LEED checklist and move it to translatable metrics.