Big Green, Green Collar Jobs

Dartmouth College is one of the eight Ivy League schools in the US. “Big Green” is smaller and less well-known than the Harvard or Yale. It's motto sums it up: Vox clamantis in deserto ("the voice of one crying in the wilderness"). The red brick and white column campus with greens is set in the small town of Hanover, N.H. in the Upper Valley along the Vermont/New Hampshire border with a tight-knit community of an outdoor orientation [and a reputation for partying the cold winters away]. They even say the Dartmouth rugby team is half-decent.

Big Green

Tuck Business School is a top ten school where hyper-competitive Wall St types go to advance their careers, but also home to a solid Net Impact chapter and the Allwin Initiative. Tuck ranked 1st in the WSJ ranking, 15th in the FT Global ranking. The aims of making the B-school education current and contextually relevant in a multi-polar world has helped Allwin Initiative find a solid niche in the crowded syllabus and competing agendas [see IFC GBSN]. This offers a pertinent example of the current reality of the prevailing stakeholder approach to modern business: business thrives in stable societies with healthy environments. In a global world, every corner starts to matter. Pat Palmiotto administers the AI program, which includes a Nonprofit Board Fellows program and consulting opportunities in places like South Africa, getting MBAs the coalface experience they need to look less like McKinsey-types in suits, and more like 21st century business leaders. I have attended a few in the last five years, and the day always offers a handful of sharp insights and new colleagues in the sustainability field.

Thayer School of Engineering building is next to the B-school, and playing in engineering offers a strong competitive advantage for the AI. The challenges of fitting onto one planet without a “Mad Max” ending in a century or two will require some very smart creators of widgets and some very smart sellers of widgets. One Planet Leaders included a broad range of reference material on it, including from the WWF. MIT Sloan enjoys the same advantage. It was at AI in January, 2005 is where I first had an in-depth conversation with the first sustainability person at Wal-Mart, well before Lee Scott’s post-Katrina re-awakening [see 21st Century leadership speech] that running a good store may include being responsible to your consumers and staff. Businessweek covered the thrid year of AI in 2005. The most recent AI drew 300 Tuck students, nearly ¾ of the class, a reflection of great leadership by the Tuck Net Impact chapter, a stacked agenda, and the right kind of band playing!

Green Collar Jobs

Big green also describes the report this week that “green investment” may create 2 million jobs. “Green collar” is the catchy phrase floating around efforts to identify the positives of the sustainability field, where innovation attracts new business models and new ways of managing resources that covers the “green” or environmentally-friendly means of conducting business. In New Hampshire, as in emerging markets like Malaysia and Brazil which I visited over the summer, has a mix of rich and poor. You do not have to drive far [in the state car, the Subaru!] down one of the winding roads to find the reality that much of New Hampshire has rural poor. The state’s politics reflects the mix: McCain ’00 handily beat Bush ’00. The people are hardy, talk straight, and need decent jobs.

The U.S. may create 2 million jobs over two years by investing in a rapid green economic recovery program, according to “Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy,” a report prepared by the Political Economy Research Institute at the University of Massachusetts-Amherst under commission by the Center for American Progress. $100 billion green investment package would create nearly four times more jobs than spending the same amount of money within the oil industry, and reduce the unemployment rate to 4.4 percent over two years.

This being the height of political season in the US, talk of jobs in a tough economy matters [although the buzz around Sarah Palin’s hockey-mom lifestyle distracted from real social and political issues for a while]. Some of the green collar talk may simply be re-branding. No-one would think of calling “green collar” the guys I remember seeing late at night or on early morning runs in Durban, South Africa, guys who would be manfully struggling up a hill pushing a shopping trolley [carts] loaded up with cardboard boxes or soda cans. No-one would tell them they are part of the sustainable solution, they simply knew collecting enough stuff that some scrap collector paid them rands and cents for would put food on the table. Making their own jobs. It is not unreasonable to project a raft of new types of jobs, and more jobs, where the environment comes to have a value it should always have had, and “externalities” is a term that goes extinct. Brazil ranks high in aluminum can recycling - who knew, there is an international ranking - recycling 95% of canswhile the debate on enviromental footprint of cans vs bottles rages on in the US.

Scrap and waste management is never going to be a glamorous industry, but waste management services in the US is up over 40% over three years, outstripping the S&P500 of around 3%. The mafia-tainted wranglings in Naples ensured garbage remained an ugly word early this summer. Garbage rotted on the streets in the heat for weeks, before crisis politics saw the trash shipped by rail to Germany. The city of Hamburg accepted the waste management contract and its issue for 1,000 euros per ton. The look of things to come?

Hamburg, a city of 1.8 million, produces 1 million tons of garbage a year, 700,000 tons of that from private households. Fiedler says about one third is recycled by compost plants and scrap processors. Incineration work costs 250 to 350 euros (392 to 550 dollars) per ton.

New York City ships its garbage to South Carolina. Radioactive waste floated around the world until a German magazine covered dumping in Africa.

The “big green” in waste management in the US, Waste Management Inc, up 10% over 5 years, but share price has been choppy. WMI, has had its hands full with labor union challenges of late. But the firm has been moving forward into the gap sustainability introduces for them: more firms are seeking ways to reduce waste, process it in a more environmentally-friendly way, and potentially earn back revenue from the energy of biomass power generation. WMI was able to roll out a new sustainability service business, franchising their skill in waste management and the software that sits behind it.

Ranking Green

Good quality analysis of “green” or “environmentally-friendly” business will become increasingly relevant as more and more firms tout “green” credentials, just like their safety records. Media-driven ranking tables remain a key measure for a meritocracy as a market-capitalist society aims to be. Firms watch rankings like the Fortune Most Admired and Best Companies to Work For, universities watch the US News & World Report college rankings, and students wait anxiously for their GMATs or SATs, a standardized academic test which determines who goes to Ivy Leagues and public elites like Michigan and Chapel Hill, and who does not. MBAs are all to familiar with GMAT scores. Years in the industry, including a few at leading research shop KLD in Boston, helped my BS filter pick up greenwashing or the PR spin that investor relations would seek to push. Alonovo.com presented a new approach to the business model, doing better with Amazon.com.

Word this week of a new rating shop seeking to develop a US News standard ranking of “green” companies bears watching, partly for who is involved, and what the results of the ranking reveal. As a forthcoming article for Responsible Investor on the practical problems of ESG integration describes, the frequency and currency of the data upon which major ESG analysis is made remains a weakness. Equally challenging is that no objective assessment of sustainability, and therefore performance attribution integrating ESG factors, is available. Money management is a competitive business, and scores must be kept, and for scores, we need goalposts standing clear and tall. Investment professionals manage around USD 70 trillion of “other people’s money”, excluding sovereign wealth funds. Practitioners in investment centers like Boston, Sao Paolo, Cape Town and Zurich are feeling compelled to integrate more sustainability thinking into their investment decisions.

Evaluating sustainability is seldom forward looking: GE’s US$10 billion ecomagination businesses have only recently been rewarded with ratings [Greenorder built the brilliant ecomagination campaign in 2005, the 2007 report keeps score], GE itself increasing objectives for 2012. Lagging analysis of company sustainability performance remains a major barrier to comparing and contrasting investment ideas. ESG data collection itself remains a competitive advantage, on top of the added value from analysis, so perhaps a new ranking will use advertising-supported dollars to fund new ways of coverage, or deeper coverage, or both. Quality research is expensive, and becoming more expensive: on 10 September Credit Suisse announced plans to charge new clients for access to its research analysts. Money managers must trade-off deeper understanding with the added costs of idea R&D. But perhaps a leading media journal may harvest the fields of “green” claims in advertising to fund better research. That would make a good use of the Google business model [advertising-drives revenue] to green business. In this, Google’s tenth year, that would match the GOOG motto of “do no evil”! GOOG is up 300% since the IPO via Dutch-auction, still a favourite listing of a company removing the usual payoff to Wall St insiders, not the usual old boys' i-banking launch.

My experience with the Business Ethics 100 taught that crisp, clean data fed through a rigorous and objective criteria based on sustainability philosophy will reveal mostly the better companies, but also some anomalies. Enter the political index committee stage right. Then the oldest cynic, or the index chair, or the person who’s name is on the firm’s door may affect the outcomes. A ranking must include some external review, perhaps an advisory board of some ilk, and a transparent process that may not necessarily reveal so much it may be gamed by big-spending corporations, but offers confidence in the approach. Perhaps a surprise winner will pop out the top as Green Mountain Coffee Roasters GMCR did for BE100 in 2006 – a year before their first-ever CSR report!

Okapi

Finally, a positive note from CNN on a “mythical” animal in Africa. The American Museum of Natural History in New York next to Central Park [yes, the same one Stiller fumbled around in Night at the Museum] was where I first saw the giraffe-relative, the okapi, in the diorama from 19th century exploring. A basic modern technology, the camera-trap, brought good news that it still exists in the wild. Smart animal, it uses its amazing camouflage to remain scarce from humans. In another positive role for zoos [see SRI-Extra 14 August on the hotel zoo in Manaus], the Bushmeat and Forests Conservation Program at the Zoological Society of London had the funding to place cameras in the Virunga National Park in the civil war-torn Democratic Republic of Congo. While fashion magazines are reeling from reduced advertising in tough economic times, perhaps they should ditch trotting out the full-page '90s supermodels like Naomi Campbell and Claudia Schiffer, for a beautiful natural creature with these characteristics...

The okapi's face and long legs resemble those of the giraffe, their closest-living relative, but they look more like horses with long necks. The average height of their shoulders is 1.6 meters (5 feet, 3 inches). They have a short, dense, velvety coat and dark prehensile tongue long enough to clean their own eyelids and ears.

Over the Horizon II/II: Hyperdermics Overboard

The past week has had me pondering the role of whistleblowers, and the ethics of average people looking to do business. The Year of the Whistleblower [2002] seems more than just five years ago, but that was when Enron, Worldcom et al were still fresh in our minds [see excellent Business Week article 2002 Year of the Whistleblower: The personal costs are high, but a new law protects truth-tellers as never before]. Aside from Homer Simpson, I know no employees at nuclear facilities, but there is someone I would love to talk with. Media reported the sentencing of the nuclear plant engineer in Eerie, PA who fudged reporting of a six-inch steel core corroded by acid to within millimeters of a breach of a nuclear plant owned by FirstEnergy Corp. No luminous fish have been found! AP reports from Ohio:

Jurors on Tuesday convicted a former nuclear plant engineer of hiding information from government regulators about the worst corrosion ever found at a U.S.reactor. Prosecutors said Andrew Siemaszko and two other workers lied in 2001 so the Davis-Besse plant alongLake Erie could delay a shutdown for a safety inspection. Months later, inspectors found an acid leak that nearly ate through the reactor's 6-inch-thick steel cap.

What was he thinking? The fracture leaked again during patching in January of this year [where was Homer?!], and the company aims to request another two nuclear operating licenses.

Front page this week was news that a Halliburton man admitted to millions of dollars of bribes [US$180m] to win natural gas contracts in Nigeria in the 1996-2000 period, when current US Vice President Dick Cheney was CEO. The man faces years in prison, but no word on the Nigerian side of the deal, nor the living conditions of the man’s wife and children and their gilded lives his lifestyle must have afforded. Coverage of the case makes for fascinating reading, including the indirect path to the case, following on an unrelated case in France that led investigators in France, the US and Switzerland to hunt down the frauds. Bribing officials subjects executives and their companies to prosecution under the U.S. Foreign Corrupt Practices Act. A French magistrate began looking into the matter in October 2003, uncovering shell corporations in Gibraltar and bank accounts in Switzerland. U.S. investigators joined the hunt in January 2004, according to Halliburton SEC filings, all of this monitored by accountability activists. Perhaps the SEC investigation will pick up further interesting stories... Elsewhere, whistleblowers face an uncertain future. Merck & Co. has agreed to pay $650 million to settle two long-standing lawsuits involving whistleblowers over Medicare pricing practices and related marketing activities. But Wyeth had a suit brought on vaccine training dropped. The landmark Sarbanes-Oxley Act of 2002 gives those who report corporate misconduct sweeping new legal protection. An executive who retaliates against a corporate whistleblower can be held criminally liable and imprisoned for up to 10 years. But this week the US Department of Labor, charged with enforcing the federal law protecting corporate whistleblowers at publicly traded companies, was revealed to have been dismissing complaints on the technicality that workers at corporate subsidiaries are not covered. It was left to Vermont Democrat Sen. Patrick Leahy, who helped craft the whistleblower provision as part of the Sarbanes-Oxley corporate governance act [2002], to say the law was meant to cover workers in corporate subsidiaries. "Otherwise, a company that wants to do something shady, could just do it in their subsidiary". [reported in WSJ 4 Sept 2008].

Then there is the case of sailors and the decisions they make, over the horizon. I hiked another piece of the Appalachian Trail this week with an ex-merchant marine officer who spent some time on coastal freighters carrying crude oil up from the Gulf of Mexico to New York and Boston harbours in the 1970’s and 1980’s. You have time on a hike to think, aloud or alone, and to talk or not talk, as the rhythm of your footfalls and your thoughts dictate. The path is steep to the alpine zone about 3 miles up. As we hiked boulder by boulder, we talked through his experience of sailors making decisions over the horizon, in “international waters” where no-one may see, and where no-one may care what happens, and law is in the eye of the beholder. This is a long way from the moves by food companies this week that pledged not to use cloned livestock meat nor milk, a voluntary action responding to a survey by Center for Food Safety. Of course, my local VT favourite, Ben & Jerry’s, is represented by Unilever, the Anglo-Dutch parent, but in a reflection of how far things have come, includes Kraft, Wal-Mart and Tyson Foods.

What is the business case for maritime pollution? Stories of marine pollution are disappointing. Yes, they make me angry. In 1975, the US National Academy of Sciences [NAS] estimated ships dumped 14 billion pounds of garbage at sea. BILLION. Weak enforcement of the United Nations/International Maritime Organization International Convention for the Prevention of Marine Pollution (MARPOL) fails to prevent ships to illegally dump waste oil from bilge and storage tanks into the ocean. A 2001 study from the [NAS) reports that:

Approximately 10–25% of commercial ships violate MARPOL and discharge more than 65 million gallons of waste oil at sea each year, nearly 3 times the amount spilled in catastrophic oil tanker accidents.

One of the stories the ex-officer described shipping of oil north along the US East Coast. After delivering the different grades of oil to NY or Boston the grades of aviation fuel, gasoline, heater and heavy oil, the ships would head south to the South for the next pickup. All the freighters were of similar design, and their tanks had a small inefficiency where a trace amount of oil remained behind that could not be sucked out. Before loading the next load of grades of oil, the ship would pump out the old using seawater. Pure oil, intentionally pumped directly out into the ocean, would jet out of the tanks for a few minutes until the tanks were cleared. The practice was usual. For every one of the loads.
For every one of the ships.
For years.

After a year-and-a-half of advocating, the EU is finally sanctioning this practice. Apparently, the shipping companies and the sailors who manned them needed some kind of bureaucrat to write some kind of regulation to deter the activity. It is likely however, that thousands of gallons of commodities are spewed over the side when no-one is looking over the horizon, when no-one is looking. The impact of business-as-usual is accumulative, and must be making the oceans more dirty, not more clean, according to Oceana.

The pollution of the sea from hydrocarbons (crude oil, fuel, petrol, oily waste, etc.) is a global problem that entails between two and ten million tonnes of these products reaching the sea each year. Although the bulk of public attention is focused on the oil slicks caused by major oil tanker accidents, chronic dumping of these substances – in other words, the residue from ordinary maritime traffic – is three times higher. Washing out the tanks of oil tankers, dumping bilge water and minor spillages on board or in port are the main sources of hydrocarbon pollution of marine origin.

A mid-July, 2008 investor conference call with ExxonMobil and sustainability investors illustrated some of the challenges we face in the sustainability+investment practice integrating ESG factors into investment practice. Scheduled to cover ExxonMobil Environmental/Climate Change initiatives and reporting with the VPs for Safety Health & Environment and Public Affairs, while the PPT slide deck covered a range of issues, no answer was available live nor within 24 hours on what number of tankers shipping XOM oil, and what percentage of tankers, are double-hulled and which are double-skinned. Of these tankers, how many transport XOM oil in environmentally sensitive harbor areas like San Francisco, Valdez etc? Perhaps this is unsurprising from a company that still fought the Exxon Valdez case through 2008, all the while touting corporate citizenship and their technologies for hybrids in full-colour multimedia advertisements. The XOM climate change webpage has not been updated since 29 Feb. 2007. Maybe Gabelli's new green theme investment may offer some answers: Gabelli's eponymous firm is making more noises about exploring the alternative energy and green space. The CEO of Gamco Investors said in a Bloomberg Television interview that he is launching a hedge fund to invest in environmentally-friendly companies. This week the DJSI announced its revisions for 2008, and Alex Barkawi, MD for Indexes at SAM that calibrates the index, commented that "there remains significant room for improvement and thus wide scope for a continued strong sustainability momentum". WSJ even posted a full page congratulatory advertisement on p.C7 tucked in the Money & Investing section, in black & white.

Integrity is not cheap. A working definition of integrity is what one does when no-one is looking. Perhaps it was because I was getting a little more fatigued near the top of Mt Lafayette on the Bridle Path 9 mile loop in Franconia Notch State Park past Falling Water, but I could not understand why sailors and engineers on ships would try and be “company men” by taking short cuts to save “the company” some amount of dollars. The “Company Man” fascinates me: how the average worker calculates the risk and returns of their actions, and expects what they do for “The Company” is good for them vicariously through the company. The sailor that has seen crewmen eject pollutants overboard after regulations direct it is illegal, by the authorities and their company which sought to comply with the rules, and be tacitly and explicitly rewards with a nudge, a wink or a pat on the checkbook by their bosses. There are some happy endings, including this report from the NJ Star-Ledger:

Federal authorities will collect $4.75 million in fines and payments from a Danish company that admitted responsibility in federal court in Newark Thursday for illegally discharging oil sludge and oil-contaminated bilge water into international waters in 2006.

In another report from 2000 in Canada, a military patrol plane first documented a 12-kilometre long slick while on routine surveillance in mid-October, 1999, leading to the successful prosecution of a Singapore-flagged vessel owned by a Scots firm. Identifying cuprits is made somewhat easy by oil having a particular "fingerpint" based on where it originates from. Ahead of the last weekend of summer this year [these dates are officially established in the US, summer is officially over!], the Labor Day weekend, there were dramatic media reports that prime beaches in New Jersey were shut in part in Avalon due to medical garbage washing up on shore. The sizeable legal community in the NY/NJ/PA tri-state area will no doubt be bringing in experts to inflate to the right economic costs. Avalon was named by National Geographic Adventure magazine as one of the nation's 10 best places to live, work and play. TV captured the hapless Mayor valiantly trying to sound more on top of this mini-disaster than FEMA following Katrina, while seeming friendly enough to attract the beach crowds his local businesses relied upon. Early on the investigation expected that someone dumped medical waste off the coast, as had been cleaned up many times before. Turns out a 30-year veteran dentist had taken his boat out and dumped the junk over the side. The dentist is from a once grand section of suburban Philadelphia, Wynnewood, an early stop on the R5 from 30th St Station on the way out to Villanova. What was he thinking?

The dentist is charged with unlawfully discharging a pollutant and unlawful disposal of regulated medical waste. Each charge carries a maximum prison term of five years. Fines could total $125,000 if he is convicted on both counts. No word on the environmental costs, nor ruined walks at sunset along a clean beach. At least this nasty little incident offers some very pointed, local sound-bites for the Net Impact conference at Wharton 13-15 November [the Investments track continues to build nicely].

What was he thinking?

***
Update: Suzlon are now reported to be speeding their integration plans for the German wind firm REpower they purchased to speed the technology transfer. Perhaps they are seekin solutions to the high speed/high load failures reported on 2.1MW turbines by Deere & Co. and Edison Mission Energy.

Over the Horizon I/II: Green Ships

On a clear day you can see the Cape. Well, not quite, but it feels that way. In early Fall, when the cold air is crisper, you may look out from one of the Boston financial district’s few skyscapers at the bay-wide view. The vista from the main boardroom at private wealth manager Atlantic Trust offices in Boston offers fantastic views of the Charles River and the rolling tree-covered suburbs of greater Boston stretching to Winchester, Arlington and Newtown. Across the floor, the view is of Boston bay dotted with 34 small islands, the bay tracked with small craft wakes, the busy ferries [including the airport water taxi] and the few steady large ships. Logan Airport lands and launches jets on 2 minute intervals. The Atlantic Ocean is hardly seen to roll waves toward shore, at the far end of the view [see also the real-time harbor hazeview shots]. Cape Wind, the offshore wind farm buffeted by local politics, is too far away to see, over the horizon in Nantucket Sound.

The maritime shipping industry has many players. A large portion of the industry remains in the hands of privately owned firms and patriarchs [just two shipping firms are in the FTSE4Good ethical index], and like the fishing industry, directly links into the livelihoods of villages and individual entrepreneurs from Anchorage to Zanzibar. Investment bank, Jeffries, will host their 5th Annual Shipping, Logistics & Offshore Services Conference on September 16-17, 2008 in New York with more than 60 companies in crude tankers, dry bulk, gas & chemical carriers, inland barges, logistics, product tankers, offshore services and offshore supply vessels. Shipping still moves the bulk of global trade; it literally carries globalization's hopes. The prices of shipping have soared lately, driven by increased operating costs because most ships are oil-powered, and oil has jumped from US$10 to 140 and back to 100 in the space of 2 years. FT reports Brazilian iron ore miner Vale this week notified Chinese steel mills of a 20% price hike midway through the 2008/9 contracts, following a negotiated 96% price increase by Australia producers, citing transportation costs. So the German Gerolsteiner water and Costa Rican-grown Starbucks coffee will surely follow prices north. Personally, I wonder what mixed freighter is shipping back the cubed meters from the Geneva apartment, and where it is dropping its ballast water?

A “green” ship was one of the most interesting items I picked up at the excellent interactive sustainability program offered by World Wildlife Fund in Gland. Switzerland in 2007-2008, the One Planet Leaders [OPL] program. One colleague in the cohort presented a digital animation of a projected container ship in 2025, “the E/S Orcelle, Wallenius Wilhelmsen Logistics' visionary concept car carrier with a ‘zero emissions’ capability which carries no ballast water on board” [“E/S" = environmental ship, nice touch!]. Originally unveiled by Wallenius Wilhelmsen Logistics at the World Expo 2005 in Japan, the E/S Orcelle

“was designed for the year 2025 using only renewable energy sources, including the sun, wind and waves as well as fuel cell technology, to meet all its propulsion and onboard power requirements”.

The privately-held firm was motivated not by activist sustainability investors like CalPERS, Walden, AP2 or Winslow Green, but by the impetus of enlightened owners and rare talent, seeking to attract the brightest new maritime engineering minds of Gen X and Y with their greater concerns for sustainability. The “green flagship” plays with design concepts in the same way as concept cars at auto shows, hoping that some – like the Chevrolet Volt – may attract sufficient interest to be built, against expectations of engineers and marketers calculating costs and benefits using extrapolations of current states of play. Like Steve Jobs and Apple, sometimes one does not need focus groups; just build a cool widget that works. In a similar way to a current engagement we are am working on in Geneva, Wallenius Wilhelmsen Logistics in 2007 launched the Orcelle Fund as the philanthropic arm of that supports the development of alternative energy initiatives aimed at making shipping more sustainable [pitch for grants here], funded by the award money that Wallenius Wilhelmsen Logistics received as the 2007 recipient of the Thor Heyerdahl International Maritime Environmental Award, named for a legendary seafarer of recetn times. The Orcelle Fund is a grant-awarding body will provide seed capital for high-risk development projects for alternative maritime energy sources and energy-efficient technology. Last week W&WL launched M/V Aniara claiming "the world's largest and most environmentally adapted car and truck carrying ship" in Bremerhaven, Germany built at the Daewoo Shipbuilding and Marine Engineering yard in Korea.

Another development this week was news of a solar ship. Driven less by concerns of environment than saving on the high operating costs of bunker oil today [NYKK reported 11% increase in Q2, 2008], Japan's largest shipping company outfitting its ships with solar panels for propulsion. Nippon Yusen KK announced plans to spend $1.37 million to have Nippon Oil Corp develop a 40-kilowatt solar panel system, with 328 panels, for its ships to be finished in December, 2008, to provide 0.2% of the ship's power from solar. NYKK want to have a finished commercial system that produces 2% by 2010, at similar costs. NYKK expects to reduce ships’ carbon dioxide output by as much as 2 percent, equal to 20 tons a year. Unsurprisingly, the lead client is Toyota. Hopefully, that will include Sir Paul's next Lexus hybrid, so Huffingtonpost.com will not be covering his embarassment!

The maritime industry has a material impact on the sustainability solution. The European Community Shipowners’ Association (ECSA) produced a paper earlier this year with the support of the International Chamber of Shipping (ICS), describing the industry as the “backbone of globalization” (Climate Change and Shipping ECSA Position Paper, January 2008) estimating that shipping carries some 90% of world trade. European shipping makes up 41% of the global total. Estimates in 2006 by the International Energy Agency (IEA) and the Stern Review on the Economics of Climate Change that the industry’s global share of CO2 emissions is around 10%, compared to 76% from road transport, and 12% from aviation. The industry is seeking sustainability solutions, including the upcoming Seatrade Sustainability Seminar in Singapore next month. This week the EU pressed with a new warning that the International Maritime Organization (IMO) must act quickly to find consensus of ways of reducing carbon dioxide (CO2) emissions. IMO’s Marine Environment Protection Committee (MEPC) is meeting in London next month. See also the Green Atlantic for Sustainable Development. My impression is that the environmentally sensitive Scandinavian countries like Sweden, Denmark and Norway are near the forefront of sustainability moves, but players from other countries prefer business as usual. Pressing the regulatory angle to the political spectrum is the SustainableShipping Forum in late October in Washington D.C. ACI’s 3rd Green Shipping conference agenda is how ship owners and managers are now driving environmental programs forward. Pressure at an international level has added a line item to the signature coding for each ship to now include their status on “green” criteria. The ISO 30000 series standards cover ship recycling management systems.

I am awaiting news of a green shipping-themed private equity fund from my brother-in-law in NY. A former colleague has stepped out to seek his niche in developing this theme for private equity owners, similar to Green Maritime Partners [read the comments to the IHT posting for a priceless illustration of the sustainability paradox we deal with on sustainability+investment engagements]. There is a market. Perhaps from cool new inventions like the ship-scale kitesurfing [see MV Beluga Skysails] Under German captain Lutz Heldt the vessel completed a 12,000 mile round-trip maiden voyage from Bremen, Germany to Venezuela, the United States, and then to Norway [see video], arriving on March 13, 2008 well-reported by Treehugger.com. The ship was at sea for nearly two months, giving the “skysail” concept ample opportunity for testing and tweaking. Inventors are exploring other examples of “windships” are being explored, with modular sailing rigs for larger vessels.

So once my mate Lodewyk has practiced not face-planting while kitesurfing off Cape Cod, he has a new place to take his MIT-quality engineering skills!