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.