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.

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?

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.

Over a dozen states have funding programs to help bring down the cost of a hybrid, and several of these are open right now. For current opportunities see our pages for New York, Texas, New Jersey and New Hampshire.

One brand new state program that will open this winter is California’s Hybrid Voucher Incentive Program (HVIP). The program will reduce the cost of an eligible hybrid truck up to $45,000 at the point of sale. There are no applications to fill out and no waiting around for a rebate. The California Air Resources Board has selected CALSTART to administer the program, and CALSTART is working with CARB to finalize the implementation manual in the next few weeks. Take a look and let CALSTART know ASAP if you have any comments.

At the national level, EPA is now accepting applications for the 2009-2010 National Clean Diesel Funding Assistance Program (DERA). Last year’s program was extremely competitive – EPA received over 600 applications – totaling over $2 billion in requests — for the $300 million it eventually funded.

If at first you don’t succeed, try, try again.  While many hybrid replacement projects submitted by private fleets last year did not get funded, EPA tells us that those applications scored favorably and is encouraging fleets to try again.

If you know of any opportunities we’ve missed, please let us know!

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.

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.

The rapid rise in social media has heightened our society's expectations for transparency.  Writer and psychologist Daniel Goleman calls it the new "radical transparency."

In our brave new world of camera phones and Twitter, the "closed door meeting" has become a quaint, old-fashioned notion.  The idea of "message control" is as antiquated as the fax machine.  In the conference's opening panel, Seventh Generation's Jeffrey Hollender got our attention with a prediction:  "Successful companies will be those brave enough to expose what their competitors won't."

Many companies are already exploring this new frontier, particularly for their supply chains.  Patagonia's Footprint Chronicles and China's PCH International, offer interesting examples.

But what does all this have to do with the already overloaded sustainability manager?  At EDF's Innovation Exchange, we believe transparency is actually going to make his or her job easier.   Reducing a company's footprint is just too complex to tackle alone.  Sustainability managers need to be able to share more, collaborate more and get comfortable with learning right out in the open—both within and across industries.

So how can anyone carve out the time to tweet and blog?

The conference offered a couple of ideas.  For starters, in-house communications staff can help.  Given the changes in the media landscape, they should be spending less time issuing news releases and more on social media.

Perhaps the most exciting idea was offered by eBay:  The company had to figure out how to keep 2,000 members of its employee green team engaged.  The solution?  Let them be social media ambassadors.  You'll now find eBay Green Team members carrying on a lively conversation with eBay shoppers, and the world at large, via Facebook, Twitter and a website.

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.  The basic idea behind IMTA is this:  growing lots of plants and animals together uses resources more efficiently by mimicking nature – where nothing goes to waste.

First some background:  Since salmon farming happens in the open ocean, waste from uneaten feed and excrement from the salmon cages is directly released into the ocean.  These wastes can cause algal blooms, alter the types of animals that live under the cages and reduce the water quality – all of which undermine a healthy ocean ecosystem.

Waste happens even with the best feeding practices, but one farm found a way to use the principle of IMTA to turn these wastes into extra income, reduce its financial risks and reduce its impact on the environment.

Cooke Aquaculture in New Brunswick, Canada has partnered with the University of New Brunswick, St. John, to build an IMTA site at a farm to grow seaweeds, mussels and (coming soon) sea cucumbers alongside traditional salmon pens.  This farm uses the waste from the salmon pens to feed these other species, so that the only feed added to the system is for the salmon.

Not only does this reduce the amount of waste entering the ocean, but it also provides additional crops for the salmon farm to sell.  Estimates show that using an IMTA system can bring in 10% more profits than farming salmon alone.  More importantly, if the salmon crop fails, the IMTA system can keep the farm from going bankrupt.

More money, less risk for the farmer, less impact on the fragile ocean ecosystem:  Now that's a good idea that the rest of the farmed salmon industry should consider.

* Teresa Ish is an international expert on aquaculture sustainability standards and a consultant to EDF's Ocean Program.  This the first in a series of eight blog posts about innovations in salmon farming.  Teresa can be reached at teresa@kuulakaiconsulting.com.

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. Patents are an excellent example of what can live in the commons and be shared – they represent certified knowledge and innovation though, of course, only cover a small portion of collective knowledge and innovation about sustainability.

In his post in March, Andrew Hutson talked about the importance of innovation exchange and the need to overcome fear of sharing. In addition to GreenXchange, he highlighted work being done in the Global Social Compliance Program and in multi-stakeholder forums, such as those hosted by Business for Social Responsibility.

What are the other resources we need to share, to enable rapid, widespread, green innovation in business? I think the list includes:

• data of all kinds – benchmarks, baselines, risk, and cost, and more;
• software to support modeling, analysis, workflow, and collaboration;
• ideas and knowledge to describe what we know and what we're learning – research results, project designs, metrics being used captured as research papers, white papers, and blogs posts;
• training materials like "how-to's", syllabi, reading lists, lecture notes, and entire classes and courses;
• org-charts and descriptions describing who needs to do what work in what structure with what responsibilities and how long its going to take;
• contracts and licenses that align incentives to promote sustainability while preserving business interests;
• calendars so we know who is doing what when and if we should join; and
• [what else? - please add your comments below]

We also need the human bit. Smart, dedicated people contributing, using, filtering, and improving our shared resources. We need channels that allow us to discuss what we are doing and learning, ways to find each other, venues for small, private conversations as well as large, inclusive discussions. We need imaginative incentives that encourage widespread participation.

The Sustainability Commons represents aggregated public goods – social assets. These assets will create new business opportunities, giving companies a leg-up to "stand on the shoulders of giants" while we rapidly address the environmental challenges we face.

This content is cross-posted on TriplePundit.

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.

As my colleague Tom Murray wrote in a post last week, we have teamed up with the human-centered design firm, IDEO, to create a suite of stakeholder engagement resources for our work with PE.  IDEO's focus "lies at the intersection of insight and inspiration, and is informed by business, technology and culture," which is a natural fit with EDF's approach to finding innovative solutions to environmental problems through transformative business partnerships.

The resources designed by IDEO will help us in our three-pronged approach by:

1. Educating key stakeholders about the role environmental management can play in operating more efficient companies and creating business value for investors,
2. Inspiring stakeholders to take action and
3. Catalyzing change by providing an accessible framework that allows PE firms and their portfolio companies to take action.

With IDEO's track record of transforming markets and business through innovative design solutions, we are confident that together we can transform the PE sector.

We will continue to write about the progress of these stakeholder resources and are eager to share with you the fruits of our collaboration with this world-class design firm.

This content is cross-posted on TriplePundit.

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! In fact, we’re still recruiting fleets to participate in the consortium.

Not in Region 1? EPA is currently accepting proposals for the 2009 round of Clean Diesel Funding. The RFP is open until December 8, so if a cleaner, more fuel-efficient truck is on your holiday wish-list, check out the EPA website for details about how to apply.

Later this week I’ll be writing an update on where the market stands on incentives for hybrid truck purchases, then stay tuned for an update on the number of trucks on the road.

• 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.