A few months ago, I was faced with an interesting situation: I had a shiny new MBA from MIT Sloan and a job offer from McKinsey, but my start date wasn’t until January.  These unusual circumstances presented a unique opportunity to pursue a personal goal of using my business background to achieve tangible environmental results.

Long an admirer of EDF’s practical approach to solving problems through corporate partnerships, I jumped at the chance to take on an externship with the Green Portfolio Project team as they worked to replicate the early success of their partnership with KKR.

As EDF and KKR’s Green Portfolio Project has proven, sound environmental management can provide a substantial source of value creation for private equity firms and their portfolio companies.  So far, that project has focused on identifying and implementing environmental initiatives at companies PE firms already own.

However, by considering environmental management during the due diligence process, private equity firms could identify similar cost saving opportunities in the companies they are looking to buy.  The current focus of environmental due diligence is aimed primarily at risk mitigation.  By considering environmental initiatives early on in the process, a PE firm might be able to identify a few million dollars in operational savings, which could influence bid prices.

For example, if the PE firm recognized an opportunity for a fleet efficiency project, the resulting decrease in operational expenses would lead to an increase in cash flow, allowing the PE firm to pay down debt more quickly and realize a higher sales price upon exit.  Once the deal is consummated, the private equity firm could add the environmental cost saving projects identified during the due diligence process to the hundred-day operational improvement plan.

By looking at environmental management as a way to add value, not just mitigate risk, PE firms can improve their due diligence process and deliver better returns to their investors.

A few days ago I attended a meeting put on by the National Association of Environmental Managers (NAEM). NAEM offers an important service by enabling mid-level corporate EHS and Sustainability practitioners to network, benchmark, and learn from on another.

The event I attended, hosted by Siemens Healthcare, offered several interesting presentations, including one on the major drivers of sustainability action. One of the presenters mentioned that California and Europe were driving companies to adopt increasingly stringent requirements on their direct and indirect operations. This was not an entirely unexpected observation, as Europe and California have consistently led the United States in their approach to environmental regulation.

But then a member of the audience raised his hand and said that this status quo has changed. Now, it's Wal-Mart, not federal or state regulators that are driving corporate environmental performance.  The environmental manager noted that Wal-Mart’s recently announced Sustainability Index and other corporate goals are trickling down to the supplier level (a big chunk of the US economy) and driving corporate environmental actions more than anything else.

If this thinking is true, it represents a monumental step-change in the way that companies think about environmental regulation and improvements in environmental performance over time.  What do you think?  Is Wal-Mart a bigger driver for environmental innovation than EPA?

Last month, I traveled to Atlanta for the 2009 Hybrid Truck Users Forum (HTUF) annual conference. The event brings together truck manufacturers, suppliers, fleets and NGOs to discuss hybrid and high-efficiency vehicle technologies with a focus on reducing emissions. It’s amazing to see how the market has grown in just a few years.  In 2005, there were no hybrid trucks on the market, and now there are at least 37 models on the road, in over 100 fleets.

Hybrid trucks can reduce both greenhouse gas emissions and fuel consumption by 30-50%. Over the 8-15 year lifetime of a truck, those fuel savings add up. Still, in a tough economy, many fleets who want to purchase hybrids don’t have the cash to do it. That’s why we’ve created an incentives guide, to help fleets find funding opportunities for hybrids. Read more »

This is a guest post from Dominique Browning.  It ran on her blog "Personal Nature" on November 4th.

Because electricity is so readily available, we take it for granted. We forget how quickly we’ve gotten used to turning on the lights. As recently as the 1930s and ’40s—within living memory—Lyndon Johnson was just beginning to electrify rural areas of central Texas, which today include the state’s high-tech corridor. Watching the lights come on across the beautiful Hill Country was one of the proudest moments of Johnson’s life.

So it is fitting that the most exciting new development in the story of electricity is happening in the capitol city of Austin. The city is becoming a clean energy lab, staking out a leadership position in our energy future. The goal of the ambitious Pecan Street Project is to invent and deploy, at a significant scale, the most innovative urban power system possible. EDF has partnered with the city, Austin Energy, the University of Texas and corporate partners like Cisco, Oracle, Gridpoint and Applied Materials to develop the project.

Read the rest of the post on Dominique's blog.

A corporate sustainability manager's job is never done.  These harried multi-taskers deal with everything from phasing Styrofoam cups out of the cafeteria to setting company-wide carbon reduction goals.

And now they need to blog, tweet and manage Facebook fan sites—so said the line up of experts at the recent Social Media for Sustainability conference, hosted by Just Means.

Panel after panel covered the hows and whys of using social media to engage employees, customers and other stakeholders.  But the big idea, underscored in nearly every presentation, was much more fundamental:  It's all about transparency. Read more »

Farmed salmon continues to one of the most problematic entrees on America's dining room tables.  While popular and inexpensive, it also has one of the worst reputations for environmental impacts of any seafood.

Yet a handful of forward-thinking salmon farmers are innovating new ways to raise this fish – to lessen the impact on our ocean environments, coastlines and natural fish populations.  This is one of a series of innovative practices that have the potential to radically change how salmon is farmed, if they are widely adopted by the farmed salmon industry.

One of these innovations is Integrated Multi-Trophic Aquaculture (IMTA) , a very old idea that is being used to reduce the considerable pollution generated by salmon farms.  Read more »

Several people pointed me to Mary Tripsas' post at the New York Times called "Everybody in the Pool of Green Innovation" this weekend – it really struck a chord. The article focused on two initiatives involving major corporations to share patents that protect the environment and foster new innovations. Through the Eco-Patent Commons companies like Xerox, IBM, Nokia, and Ricoh, working with the World Business Council for Sustainable Development, pledge to make environmentally beneficial patents available in the public domain. The Eco-Patent Commons now includes 100 patents from eleven participating companies.

Meanwhile, Creative Commons, the innovative engine behind CC licensing for content sharing, is helping launch a new initiative to increase patent-reuse called GreenXchange. Partnering with Nike and Best Buy, they have a "vision of creating an open innovation platform that promotes the creation and adoption of technologies that have the potential to solve important global or industry-wide challenges" and are using their expertise in crafting licenses and legal language to both protect patent-holder interests while enabling easy reuse.

The motivation for these initiatives is captured in Mary's quote of Dr. Sara Slaughter from MIT's Sloan Sustainability Initiative saying, "We all want to save the planet, and the problems are bigger than any one firm, sector or country."

Indeed, we need to do a lot fast and being really good at sharing resources is critical – sharing within businesses, across businesses, across business sectors, between the private sector and the public sector, and across national boundaries. This sharing is enabled by what I call the "sustainability commons" – that virtual place where people and our sustainability resources interact. Read more »

In my last post, I identified some of the challenges and opportunities we are addressing in our work with private equity firms to adopt sound environmental management strategies across their portfolios.

In order to address these challenges while creating lasting environmental change in the PE sector, we are pursuing a three-pronged outreach strategy, consisting of:

1. Targeted outreach:  Reaching out directly to leading PE firms to demonstrate the business and reputational value of environmental management and to provide tools and resources for implementing environmental management programs.
2. Capacity building: Exploring innovative ways to engage PE sector service providers (including management consultants, accounting firms and software developers) to build the infrastructure needed for widespread adoption and implementation of environmental management as an industry best practice.
   
3. Community engagement:  Building excitement and engagement within the broader PE community (e.g., Limited Partners, trade associations, academia, media) to promote environmental management as a strategy for improving operations and building value. Read more »

This month, Oakhurst Dairy took delivery of its first hybrid truck as part of a suite of efforts to reduce the local dairy’s impact on the environment. Oakhurst expects the truck to use nine fewer gallons of fuel per day and help avoid about 52,000 pounds of CO₂ annually. While $30 a day in fuel savings may not seem like much, over the lifetime of a truck, it add ups!

At EDF, we’re excited about this truck for two reasons. Not only is it the first hybrid to go into service in a dairy, but it is also the first truck to hit the road as part of the Northeast Hybrid Truck Consortium. In 2008, EDF was awarded over $750,000 by EPA Region 1 through the National Clean Diesel Funding Assistance Program and MassDEP. The money will help fleets around New England offset the incremental costs of new hybrid trucks, up to $40,000 per truck.

Sound too good to be true? It’s not! Read more »

• Jason Mathers will be at the North American Council for Freight Efficiency Symposium on November 3^rd in Chicago.

• Emily Reyna will be attending Opportunity Green November 7^th and 8^th at UCLA. Opportunity Green inspires a collaborative culture of new thinking and unconventional ideas that pushes change in unexpected ways.

• Elizabeth Sturcken is guest lecturing for a Sustainable Business class at the Haas School of Business, UC Berkeley on November 10^th.

• Net Impact North America Conference 2009 on November 13^th -14^th is designed to mobilize members through an exciting array of keynotes, panels, case studies, simulations, and special events. Rachel Beckhardt Hinchliffe will be leading a panel on Climate Corps; she and Robyn Scrafford will be conducting interviews for MBA students interested in applying for the 2010 Climate Corps fellowship program. Jana Holt will be manning a booth at the conference, and Kirk Hourdajian will be attending.

• Beth Trask will be at the Behavior, Energy and Climate Change Conference in Washington, D.C. on November 15^th-18^th.

• Thomas Murray will be guest lecturing in Dan Esty & Stephen Ramsey's Environmental Management & Strategic Advantage course at the Yale School of Management on November 16^th.

• Kirk Hourdajian will be at The Deal Economy 2010 on November 18^th and 19^th at the Union League Club in New York City.

• We will also be launching  a series of conference calls on the Innovation Exchange. Sign up to receive our blog posts and get updates on upcoming podcasts.

Look for us at these conferences – and let us know if you’ll be there so we can watch for you as well!

You can always see where we’re going to be – and what conferences we’re watching – on the Innovation Exchange Calendar.