Energy efficiency 101: 26 MBAs learn strategies for cutting energy and costs

Last week (from May 18th-20th) we gathered our 2009 class of Climate Corps Fellows for a three-day training in our San Francisco office. The 26 Fellows arrived from across the country, and were joined by EDF staff, representatives from some of the 23 Climate Corps host companies, and a few media observers (SF Chronicle, for a crash course in energy efficiency approaches for office buildings and data centers.

The textbook for training was the Climate Corps Handbook, a reference manual on energy efficiency investment opportunities that we wrote for the Climate Corps Fellows to consult throughout their fellowships. The Handbook outlines EDF’s recommended steps for identifying and prioritizing building energy efficiency measures, and explains how to benchmark the energy efficiency of one building against others in the region. It also provides an introduction to the types of efficiency options that exist in commercial buildings— in lighting, office equipment, HVAC and water heating—and in commercial data centers.

The Climate Corps Fellows will be spending the next ten weeks working with staff at their host companies to identify and analyze promising options for cutting energy use in various building systems and the equipment contained in those buildings. The Fellows are all MBA students, so they’re coming in with a strong background in financial analysis and business strategy, but we wanted to make sure they had a basic grounding in the types of systems (lighting, commercial HVAC, etc.) and equipment (servers, PCs, etc.) that they would have to analyze over the summer, and some typical strategies for improving efficiency in those areas. We teamed up with efficiency experts from Rocky Mountain Institute to develop training modules that would give each Fellow the background to have informed discussions with facilities staff at their companies about energy efficiency opportunities in buildings.

All-in-all, it was a jam-packed three days. One highlight of the first day was our trip to PG&E’s Pacific Energy Center for an afternoon class on lighting efficiency in a classroom rigged up with all the lighting technology you’d be likely to find in a commercial space—from old T12 linear fluorescents (the energy-wasting dinosaurs of office lighting) to state-of-the-art LED fixtures.

On Day 2, we took a behind-the-scenes tour of the building systems at One California Street, led by the Chief Engineer there. One California was one of the first high rises built in San Francisco (in the late 1960s) and over the years the building’s engineering staff has worked hard to retrofit systems to improve performance and reduce energy use (and keep up with California’s stringent energy efficiency codes). The Chief Engineer took us to the building’s mechanical rooms, and up to the roof to see the upgraded cooling tours and the cables controlling the buildings new high efficiency elevator system.

Day 3 was spent discussing practical on-the-ground tools and strategies for the Fellows’ summer work. Jeff Crystal, our very first Climate Corps participant (who analyzed energy efficiency improvements for EDF’s New York City headquarters in summer 2007), trained the Fellows in the Excel-based Climate Corps Financial Analysis Tool, which he helped build during his internship. Emily Reyna, a 2008 Climate Corps alum, who we’ve hired to help run the program this year, was on hand to discuss the strategies she used to overcome hurdles during her summer at Cisco Systems (where she helped identify an opportunity for $8 million in annual energy savings).

By the end of the last day, I was tired, and I’m sure the Fellows were as well. But the mood in the room felt energized—everyone seemed excited to head to their host companies and get started. We’re all looking forward to seeing what they come up with.

Stay tuned to this space for updates from our staff and the Fellows themselves as the summer progresses!

PC power management software: IT's Low-Hanging Fruit

If you’re reading this, you probably own a computer. Your company might own a hundred or a hundred thousand. Aggregating all our humming little buddies, we produce a lot of emissions, and we squander two valuable resources: energy and money.

Speaking of money, venture capitalists are opening their minds (and checkbooks) to the opportunities presented by energy efficiency. The New York Times reported last week, “Venture capital is starting to move away from its infatuation with alternative energy… [towards] applying information technology to improve the efficiency of energy consumption.”

Where your computer is concerned, the early birds are already in flight. Companies like 1E, Verdiem and, yes, the U.S. EPA are offering you, me and the world’s biggest institutions easy access to these energy savings. Their PC power management software can conveniently control entire networks, so routine power-downs take less effort – because who’s feeling energetic at the end of the day anyway? Another software feature sidesteps pesky patching problems by enabling remote access to turned-off machines.

According to an independent report commissioned by 1E, powering down PCs at night and during weekends could save $2.8 billion a year in the U.S., about £300 million in the U.K. and about €920million in Germany. Verizon found that installing this type of software on 63,000 of its computers saved the company 7,700 tons of carbon, or in a more plausible metric, about $1.3 million. Supplementing global public access to such technology, the EPA offers two open-source programs: EZ Wizard and EX GPO.

PC power management software is one of 15 green business innovations highlighted in EDF's Innovations Review 2009. These represent some of the most promising practices and technologies for driving efficiency and creating new business opportunities – while protecting the planet.

With the help of the global Just Means community, we will be hosting a dialogue on one innovation per week over the next 15 weeks. We thank you in advance for granting life to these ideas by exploring them here and exporting them to work. Who knows? If your boss is smart, you’ll get a promotion.

Look no further for energy efficiency…

Climate Corps TrainingLast week, Millie wrote about the then-upcoming Climate Corps training, as well as what it takes to get 26 students placed in what David Baker of the San Francisco Chronicle calls “an unusual summer assignment: helping cut corporate America’s energy bills.”

The training took place over the past three days in our San Francisco office and was by all counts a resounding success.

In his post for Grist, Todd Woody calls the fellows “green moles” and asks the question that’s on everyone’s mind:

Why don’t these wealthy corporations hire their own corps of energy efficiency experts?Mainly, the guys who keep the lights on don’t talk to the gals who pay the bills, and no one wants to make more work for themselves or ask for money for capital improvements, especially at a time when the global economy it teetering.

Enter the tech-savvy MBA with dark green eyeshades who can bridge the gap between the two worlds. Half this year’s Climate Corps members are trained engineers who didn’t sweat solving boot camp exercises like, “How many gallons of gasoline equivalent would be saved every year by replacing a 60W incandescent light bulb running 4,000 hours with a CFL?”

Stay tuned for more about the fellows and tales from the training.

New Online Calculator for Fleets Measures GHG Emissions

The crux of our work with corporate fleets is getting them to consider greenhouse gas emissions as one variable when making vehicle purchasing and use decisions. Relatively minor decisions, when multiplied over hundreds of vehicles traveling 20,000+ miles a year can add up to significant differences in emissions. Being able to understand what decisions impact emissions and to track emissions over time are important skills for the 21st century fleet manager.

Tracking emissions of hundreds to thousands of vehicles dispersed across the country is easier said than done. Medium-to-larger fleets that use a national fuel card typically have good information about the type and volume of fuel their vehicles are consuming. With this information, they can calculate the carbon dioxide (CO2) emissions from their vehicles. The data required to calculate emissions of the other greenhouse gases from vehicles – nitrous oxide (N2O), methane (CH4), hydro fluorocarbons (HFCs) {most commonly HFC 134a}- are a different story.

For N2O and CH4, fleet managers need to know the emissions control technology used and miles traveled for each unit. Unfortunately, mileage data is notoriously unreliable for fleets because relying on drivers to code in correct mileage information adds human error. Matching each unit with its specific emissions control technology, such as EPA Tier II or California LEV, is possible. But as they've never had a reason to track this before, most fleets don't have this information readily available. As for HFC emissions from air conditioner leakage, most fleets have no way of tracking these emissions. Getting this information from a dispersed fleet is a data collection nightmare.

Fleets with good fuel data face their own version of the infamous 80-20 rule, except in their case it's more of a 95-5 rule. Carbon dioxide accounts for about 95% of greenhouse gases from passenger vehicles (on a CO2E basis). With good fuel consumption data, it's straightforward to calculate emissions. The other three gases account for about 5% of the emissions, but – as they are vastly more complex to track – it can take 95% of the effort to track them.

To help fleets overcome this paradox, we created a fleet GHG emissions calculator that estimates total fleet greenhouse gas emissions from fuel consumption data alone. The fuel data is directly used to calculate emissions of CO2. Emissions of N2O, CH4 and HFCs are estimated based on their prominence among greenhouse gas from transportation source as reported in the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006, Table 2-15.

We worked with NAFA Fleet Management Association to develop this calculator and unveiled it at the annual NAFA I&E held in New Orleans in April. Over the two days EDF had the calculator on display, we were visited by a few hundred fleet managers from a wide cross-cut of private and public fleets. An additional fifty fleet managers joined our seminar on measuring greenhouse gases. Based-on the conversations we had in New Orleans and since, it appears that the calculator is filling an important niche.

We encourage fleet managers that have good fuel data to use our tool. For the few fleets that have the more complete data needed to measure non-CO2 emissions, they might want to follow the more complex calculation protocol put forth by the EPA Climate Leaders program. At minimum, we encourage all fleets to start to create data collection systems

If you have thoughts on ways we can improve on the calculator, we'd love to hear them. The calculator can be found at: A technical background piece [pdf] is also online.

Keeping Your Eyes on the Partnership Prize

By Gwen Ruta

With the global economy in turmoil, corporate environmental initiatives could have faced a fatal blow. The good news is that companies today have not forgotten that green business is good business. The question that remains for many executives is not whether to embrace environmental sustainability, but how to get it done.

One path of action that has gained traction in recent months is for businesses to partner with Non-Governmental Organizations (NGOs) on environmental initiatives. On a macro level, this is a good thing. Both businesses and NGOs have a lot to learn from each other; neither can solve today’s global environmental challenges going solo; and it will take a newfound collaborative spirit and sharing of best practices to both address challenging issues like climate change and succeed in today’s challenging economy.

But on a micro level, businesses and NGOs should avoid the dating game unless their relationships are meaningful and lasting. It’s not the volume of business/NGO partnerships that will change the world, but the quality of the results produced.

It’s been almost twenty years since Environmental Defense Fund (EDF) worked with McDonald’s on our first partnership to conserve resources and cut waste. Since then, we’ve found time and again that these unique relationships can achieve remarkable business and environmental results. Most recently, our “green portfolio” partnership with KKR, the giant private equity firm, resulted in $16 million in annual savings from measures that included reducing truck fuel usage at US Foodservice, cutting paper consumption at Primedia, and improving material use at Sealy. And that’s just the start. We’re now working with KKR to roll the project out to its entire portfolio of companies.

So what’s the recipe for success? While no two partnerships are alike, we’ve found the following principles invaluable for us over the years.

1. Have a clear end goal in sight. Both partners must be clear about what they are trying to achieve together. Tons of greenhouse gas avoided? Costs savings through efficiencies? Employee awareness around eco-innovation? Spell out the goals and ensure that all parties involved are committed to them.

2. Measurement is key. We’ve all heard the maxim “you manage what you measure.” Progress can only be celebrated when you know where you started. And quantitative results make is clear when success has been achieved.

3. Mutual commitment is a must. If one side of the partnership is doing all the work, the risk is lack of buy-in from the other side. The project will lose momentum and results will be far less impressive than they could be.

4. Timelines matter. Set up check-ins and updates to make sure that both sides are achieving intermediate objectives, increasing the likelihood that partnership goals are achieved within the agreed upon timeframe. This keeps stakeholders focused and engaged in the project at hand.

5. Objectivity ensures transformational change. At EDF, we take no funding from our corporate partners. We act as advocates for eco-innovation, not corporate consultants. This enables us to push our partners beyond their comfort zone and keeps our eyes on the right prize – transformational environmental change.

6. Transparency enables economies of scale. Even if a partnership involves only two partners, the results can transform an entire industry – as long as they are widely and publically shared. For example, EDF teamed up with FedEx to develop a cleaner, more fuel-efficient delivery truck. We spread the news and the technology, and within two years of our partnership, no fleet tradeshow was complete without a hybrid offering.

7. Communications shouldn’t be taken lightly. In any NGO-business partnership, it’s critical to track communications closely. Both sides need to agree on how the partnership will be characterized to outside audiences and not over – or under-state the commitments and the work at hand. This will prevent message distortion and avoid “greenwashing.”

NGOs have deep expertise in social and environmental issues combined with an unwavering passion to make the world a better place.

Corporations have the power of commerce and markets on their side, helping catalyze change quickly and enabling scalable concrete results.

This combined ability to capitalize on rather then cower from today challenges, both environmental and economic, will enable companies and NGOs to achieve and maintain long-term success.

Partnerships will play a significant role in this success, but only if they are treated as value-creating relationships, not marketing maneuvers. Through such collaborations, the environment moves out from the sidelines to become a key driver of innovation and growth.

This column originally appeared on Environmental Leader.

The next generation of energy conscious business leaders

By Millie Chu Baird

Just in time for training next week, we’ve made our 26th (and final) Climate Corps Fellow match!

EDF’s Climate Corps program recruits and trains MBA students (Fellows) from leading business schools in energy efficiency strategies and financial assessment. The Fellows then spend their summer on-site at host companies, conducting a detailed analysis of energy reduction opportunities. Each Fellow’s goal is to work with their host company to produce a detailed, actionable investment and implementation plan to cut costs and reduce energy use and greenhouse gas emissions. For the Fellows, it's a one-of-a kind experience, spending their summer having real-world impact on a company's business and environmental performance.

Next week we are bringing all the Fellows to our San Francisco offices to get 2.5 days of training by our staff and also Rocky Mountain Institute (RMI), widely-recognized experts on building energy efficiency. The training will include modules on building energy efficiency, the latest thinking on data center efficiency, exercises and discussion about energy efficiency finance, a tour of One California Street’s building systems and a lighting seminar at the Pacific Energy Center.

Apparently a seat at the training is the hottest ticket in town; EDF staff members from all over the country have been calling to see if they can also attend! We had to cap the number of participants based on how many chairs we could squeeze into our largest conference room.

What a great problem to have. Last summer the Climate Corps program consisted of 7 Fellows and 7 host companies. This year, we’ve nearly quadrupled the size of the program to include 26 Fellows at 24 host companies. We were able to scale up by partnering with Net Impact, a preeminent network of MBA students and corporate leaders interested in the intersection of business and social responsibility. Through Net Impact, we received 160 applications from students at every top-notch business school in the country.

It was quite a task to find the best matches from this student pool for the 24 companies that EDF recruited nationwide! In these economic times, you’d think that a paid internship with EDF and a marquee company would be a no-brainer, but finding the right matches of geography and industry-type are more difficult than you would think. (So you have a husband in Boston – what’s the big deal about relocating to the Bay Area for the summer?) After painstaking interviews, tough decisions and yes, some negotiations, we’ve finally got our ’09 cohort of stellar Climate Corps Fellows.

With all the logistics going on behind the scenes, it’s easy to forget the point of this program: helping companies save energy – and money. I can’t wait to see what kinds of opportunities these 26 Fellows discover this summer!

The Best Little Government Program You Never Heard Of

Everyone's heard of agricultural extension agents – the people who sit down with farmers and ranchers to provide expert advice on what fertilizer to use and where to get a loan for a new harvester.

But who knew – there's another team of government experts who do the same thing for manufacturers.  No, not tips on fertilizer use…but ideas about how manufacturers can run their businesses more intelligently.  Their staff includes engineers, efficiency experts, and a wide range of other smart people.

The Commerce Department's Manufacturing Extension Partnership ("MEP") has 1,600 – you read that right – experts who help companies do manufacturing better and cheaper.  (Technically, the MEP does this in partnership with states, not all by itself.)  The MEP supports 59 centers in nearly 400 locations in every state and Puerto Rico.  You can find one near you on the MEP website.

The MEP's bread and butter has been helping manufacturers cut costs, with a focus on "lean" manufacturing techniques.  But increasingly, the MEP has been focusing on sustainability.  What does that mean?  Two things:  (1) minimizing energy use and environmental impacts and (2) seeking out business opportunities in clean energy and energy efficiency.

I was lucky enough to be invited to do a couple of presentations to the MEP's annual conference in late April 2009.  You can see my slide deck below.   I tried to communicate the great work that Duke University has been doing, under the watchful eye of our own Jackie Roberts, in documenting all of the ways that companies can make money as we move towards clean energy and energy efficiency.

But what I learned as a listener down there was this:  MEP is very eager to be part of the climate / clean energy solution.  And as far as they're concerned, they are successful only if the companies they are working with are successful.

If you know of manufacturers that would like to get some low-priced, expert help, give the MEP a call…. or let me know, and I'll get them in touch with the right people.

Climate Change: Current Policy Landscape and Implications for U.S. Industry
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