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Danone’s carbon reduction collaboration with SAP has additional cost, recruitment and retention benefits

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Danone

Most of the news these days is around energy efficiency wins, so it makes a welcome change to hear a pure carbon reduction story from Danone.

In 2008 Danone set very aggressive carbon reduction goals for itself. It decided to reduce its carbon emissions 30% by end of year 2012. This was a deliberately ambitious aim because it meant galvanising everyone in the company to become involved, if the aim were to be met. On a call with Danone CIO Jean-Marc Lagoutte last week I learned that Danone have already passed their 30% target – an impressive achievement.

How did they do it? They used a combination of information and incentives. On the incentives front, 30% of every plant manager’s bonus was made dependent on carbon reductions. While on the information front, Danone rolled out a carbon calculation and management system which made the full lifecycle carbon emissions of every aspect of every one of Danone’s 35,000 products readily available.

Danone teamed up with SAP to co-innovate on this project. SAP was an easy choice according to Lagoutte because Danone was already an SAP house, so the majority of the data their carbon system would need was already in their SAP system. It has now been rolled out to the majority of Danone’s affiliates and should be in all of them by 2013. Danone is hoping that this will become a standard offering from SAP so that it will be covered under SAP’s standard maintenance contract. SAP in turn have said that they do plan to offer the solution to new customers.

Next steps for Danone, said Lagoutte, include calculating the water footprint of its products, the effect on biodiversity and when labeling standards have been reached, making that information available to consumers.

Internally in Danone, a carbon master has been appointed for every country business unit. The carbon master is in charge of carbon reductions for that business unit. Making one person per unit responsible and arming them with the information the need to affect that change was obviously critical to the success of this program (that and the incentivising of the plant managers to ensure buy-in).

I asked Jean-Marc if it were just the carbon footprints’ of their products ingredients which were considered but he said that no, it was everything in the lifecycle, including their suppliers’ carbon footprints and the packaging. In fact, several of the carbon reduction wins that Danone achieved came from reductions in packaging. Four packs of Danone yoghurt sold in France had a cardboard surround. This has been done away with, for example, with a consequent carbon footprint reduction.

Other changes were to substitute the PET used in plastic bottles with a mix of recycled plastic and bio-plastic (from cane sugar). This change reduced the carbon footprint of Actimel bottles by 70%.

As well as reducing Danone’s carbon footprint, this project is also saving Danone significant costs on several fronts. PET was one of the most expensive ingredients which Danone used. Substituting bio-plastic, not only reduces Danone’s carbon footprint, but saves them money as bio-plastic is cheaper. Other packaging reductions also lead to easy cost and carbon reductions.

Also, this project led to Danone’s needing to revisit all their processes, many of which hadn’t been examined in quite some time. This re-assessment identified inefficiencies and led to many reductions and simplifications of processes.

And because all purchasing contracts had to be re-negotiated with a carbon dimension, all of Danone’s suppliers had to sell themselves once more to Danone. This led to big improvements in the supply contracts.

Finally, the carbon reduction program generated a lot of internal pride in Danone around the company’s goals and achievements. This has led, according to Lagoutte, to significant recruitment and retention benefits for Danone.

A win for the planet, a win for SAP and several nice wins for Danone!

Photo Credits Tom Raftery and sashafatcat

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Australia rolls out carbon tax – unambitious but better than nothing!

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CO2

The Australian parliament passed the Clean Energy bill, 2011 during the week – the effect of which will be to introduce a carbon tax there commencing in July of 2012. The bill still has to be ratified by the senate but with Julia Gillard’s government and the Australian Green party holding a significant majority of seats in the upper house, this is expected to be a formality.

The tax will initially price carbon at A$23 (?17) per tonne in 2012-13, A$24.15 in 2013-14 and A$25.40 in 2014-15. Carbon trading will commence in 2015-16 with a price floor of A$15, rising by 4% per annum.

The interesting thing about this carbon tax implementation is that rather than it being a burden on the tax payer, Australia introduced a series of extra payments and compensations for family’s which will see most workers earning up to A$80,000 (?59,350) a year receiving an extra A$300. This will benefit the less well off the most because:

The tax-free threshold for wage and salary earners to rise from A$6,000 a year to A$18,200 from July 1, 2012, and to A$19,400 from July 1, 2015.

This way of implementing a carbon tax is one I have been advocating for some time but it is not always popular. In fact, when I brought it up at the Green Economy 2011 conference in Dublin earlier I was pooh, pooh’d by former UN Climate Change chief, and current global advisor on climate change for KPMG Yvo De Boer, who said in an uncharacteristically misanthropic comment “Experience tells us that is you give people more money, they will go down to B&Q’s and spend it on patio heaters”. While it may have been a facetious comment, it fails to take into account that, if there is a proper price being levied on carbon, then the problem of the purchase of porch heaters quickly solves itself.

Back to the Australian carbon tax – kudos must be given to Oz for getting this law through parliament despite what must have been one of the most dishonest and vitriolic anti-science campaigns yet mounted against climate change. As Graham Readfearn notes:

They paid millions of dollars for adverts on television, in newspapers and online. They flew in climate change deniers from across the globe. They held rallies, engaged prominent right-wing media personalities, threatened scientists and turned the cold non-partisan findings of peer-reviewed science into some kind of blood sport.

But despite what was surely the dirtiest and most dishonest campaign ever waged before the Australian public, from next July major industrial emitters of greenhouse gases (about 500 of them) will have to pay $23 for every tonne of their pollution under laws passed earlier today.

The fact is that the Australian example is extremely unambitious – a starting price of ?17 per tonne of CO2 and a goal of reducing Australia’s emissions 5% by 2020? The bill scraped through parliament by the slenderest of majorities (74-72) so it is likely that any proposals seen to be more demanding would have failed.

Having said that, Australia has passed a carbon tax. That’s more than we can say for most other countries.

Well done Australia.

Photo credit Francesco Cavallari Photography ?

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Green Shoots at Microsoft: Public Sector Engagement: EU, UK

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As I have written previously, Microsoft is finally beginning to pull together a coherent green story under new sustainability supremo Rob Bernard. The company is also missing a bunch of tricks, but more on that later. But back to the good. Yesterday came news that Microsoft is signing a non-exclusive five year deal with the European Environmental Agency (EAA) with a goal to “make environmental information more accessible to citizens in Europe”. A laudable goal. As I have written before We Are The Watchdogs. But in order to be watchdogs we need open data, transparently collected and shared. Its somewhat ironic that Microsoft is providing its services and software for free; given the EU sometimes has an issue with freebies. It will be interesting to see whether the EEA’s new web presence still uses Google custom search like the current one. The first step is to build a Web 1.0-style publishing portal, which will be based on the usual Microsoft middleware, and some Microsoft Live services, such as Virtual Earth. The EAA has wider ambitions that just publishing data however. According to the press release Professor Jacqueline McGlade, Executive Director of the EEA said:

“This collaboration is a first of its kind to establish a two-way communication on the environment. Until now, authorities, including the EEA, have communicated their data to the public. But local observers, who are often the first to notice real change in their environment, had difficulties sharing their observations with others. This partnership will provide them a platform to do exactly that”.

Likesay, this is pretty much a canonical Greenmonk story. We are all watchdogs, we are all observers. Science progresses most effectively when research and data are widely distributed. Over 500 million people-that’s a lot of eyeballs. Interestingly enough the EAA is including Turkey in the scheme – so its taking the long, wide view. The EAA has a 13 year history of Open Data, such as making greenhouse gas information available to all, but normally focuses on EU policymakers, rather than citizens. Its great to see them turning the funnel the other way…

In other Microsoft related eco news, brought to my attention by Dominic Campbell, the first social media manager at a UK local authority, Wakefield Council saves over £4m while cutting carbon emissions.A skeptic might say this story was just greenwashing, but at Greenmonk we tend to focus on outcomes, rather than looking for hyprocrisy. As Jamie Hailstone writes: “the council will save more than £4m and cut carbon emissions by 35 tons.” There is a virtuous circle created by marketing efficiency as green. Green is Lean. Microsoft’s virtualisation team could learn a lot from the case study – there is nothing wrong with quick wins. Final bonus link: check out this sexy story about Virtual Earth running on Wind powered-servers.

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Repak launch Carbon Calculator using AMEE

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We here at GreenMonk have written about AMEE several times in the past because we really support what they are doing (quick reminder – they enable any climate campaign to use a common standard for Carbon-Footprint Profiling and Measurement, for more, check out their FAQ).

Recently I’ve been delighted then to note that Repak have started to use AMEE’s services. Repak are an industry funded organisation based in Ireland. Repak was created to help grow packaging recycling in Ireland and to aid businesses comply with their legal obligations to fund the recovery and recycling of the packaging on the goods or services they supply, as set out in the Waste Management (Packaging) Regulations 2007(pdf).

Repak have just launched an easy to use household Carbon Calculator using AMEE’s backend. Answer a few quick and easy questions and you are presented with a report outlining your current carbon footprint.

Repak.ie's Carbon Calculator

As well as estimating your carbon footprint, you also get a comprehensive series of recommendations on ways to reduce your CO2 emissions with handy information and tips such as:

  • turn down your thermostat by just one degree – each degree drop can reduce your bill by 10%
  • think about the temperature on your immersion heater – can you reduce this by a degree or two?
  • as much as 15% energy (and CO2) savings can be achieved by turning down the brightness and contrast levels on your TV
  • a laptop, on average, consumes around 30% of the power of a desktop, whilst in ‘on-mode’.
  • a well-filled A-rated dishwasher load once a day will be more efficient than many kitchen sinks full of hot water, or a running tap, to wash many dishes
  • digital radios consume up to 5 times the energy of a traditional analogue radio.
  • travelling by rail will result in about a third of the CO2 emissions of the equivalent domestic or short-haul flight in Europe. A similar journey for two people in an average-sized car would result in under two thirds of the CO2 emissions compared with flying

This is a really cool resource to help people realise the impact their day-to-day activities are having on the environment. More importantly though the calculator goes the next logical step and gives practical advice on how to reduce those Kgs of CO2.

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Data Center Energy Efficiency: money in the bank

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Barclays Bank and technology provider HP have just signed a deal to roll out new cooling technology at Barclays’ new Gloucester data center. According to the press release

HP’s Dynamic Smart Cooling (DSC) solution contributes significantly to a package of energy saving measures which will allow Barclays to save up to 13.4% of total energy used for its data centre. These energy saving measures will significantly reduce its carbon footprint by approx 7470 tonnes of CO2 per year.

Barclays joined the CBI climate change task force last November. Its climate change targets for 2006-2010 include:

• Reduce CO2 emissions by 20 per cent by 2010 (using 2000 as the baseline year)
• Reduce carbon intensity from 16.8 tonnes to 12.9 tonnes CO2 per £m of UK income(using 2005 baseline.) Carbon intensity is a measure of emissions relative to business growth and it allows comparisons to be made between companies.
• Reduce energy consumption in offices and branches by 20 per cent per employee (FTE) (using 2005 as the baseline)

The data center is as good a place as any to start, but it would be interesting to hear more about Barclays energy efficiency plans for its large real estate portfolio.  I also think its a shame that Barclays isn’t putting a pounds sterling figure on potential savings. To be a beacon for others it needs to translate the technical gubbins and low carbon talk into simple bottom line improvements. Shouldn’t be that hard for a bank. On the other hand of course, your carbon mileage may vary (that is, energy prices will certainly change).

According to Greenbang the big Wall Street investment banks, in conjunction with a number of energy companies, have also made some useful progress in establishing best practices for energy investment with a Carbon Principles scheme.

This effort is the first time a group of banks has come together and consulted with power companies and environmental groups to develop a process for understanding carbon risk around power sector investments needed to meet future economic growth and the needs of consumers for reliable and affordable energy.

JPMorgan, one of the banks involved, this week made its own bold gamble in carbon trading, acquiring ClimateCare, a British company that pioneered carbon offsetting. According to the Guardian ClimateCare “makes reductions of greenhouse gases such as C02 on behalf of individuals and companies around the world, and invests in wind power, hydro power, biomass, human energy and cooking-stove projects in developing countries.”

Like many others I am very skeptical of current approaches to offsetting. The idea that I can fly as much as I want as long as I later pay my absolution: “It’s not just about confession and saying my Hail Marys.” That said, its clear that the mechanism businesses find most compelling, to the point of fetish, is that of the market. Markets are a religion for some people, and they are the people with money to invest. Carbon trading could end up defining business in the 21st Century in much the same way that oil consumption defined the 20th.  I am not alone – according to S2 Intelligence businesses will spend $595 billion by 2010 on systems to support green accounting (yet again thanks Greenbang). Or as Computerworld puts it Green IT spend to outstrip Y2K within two years.

Finally I would just like to say JPMorgan’s research arm should be strongly applauded for making some of its climate-related research publicly available, for example this study into Europe, airlines and climate change targets.As I have argued before wider access to solid information is key to better outcomes. Well done old blue blood Wall Street bank.

Regarding the photo above I had not heard of carbon neutral bank cards before- this one from Barclaycard. Thanks very much sh1mmer for allowing me to use the photo with a Creative Commons Attribution 2.0 license.

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The 2% Solution: Impact of IT, The New Low Carb Diet

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I recently blogged about a figure I had read, that emissions due to IT were in the region of 2% of global totals, but couldn’t find/remember the source. Well the number just popped up again, thanks to a heads up by Local Government 2.0 maven (and RedMonk community platinum card holder) Dominic Campbell.

The estimate in question came from a report by Intellect, a UK technology industry trade association. The report, High Tech: Low Carbon, aims to “set out the issues relating to the energy demands of products and services together with a clear action plan for the sector to address them.”

According to the report, the energy use related to ICT (information communications technologies) currently accounts for about 2 per cent of global carbon dioxide emissions. If all else remained equal, a straight-line projection based on growth in both sectors would suggest that by 2050, we could see a five-fold increase in emissions related ICT and a six-fold increase in the emissions related to consumer electronics (CE).

However, we are already seeing massive improvements in the energy efficiency of both sectors, which is already helping to mitigate this risk. Intellect believes the industry can exceed the target set by the CBI Climate Change Task Force for a 30 per cent improvement in the efficiency of electrical equipment by 2030.

Its good to see some positivitity here, some of it even warranted. IT can indeed make massive strides in improving efficiency. Indeed- the entire industry has been arguably doing the opposite for the last 40 years, so there is plenty of room for improvement. The PC era was about unfettered abundance machismo, as was Internet version 1.0. But what comes next will be working with constraints. Speeds and feeds never remotely considered efficiency, except perhaps in odd places like mainframe I/O.

Perhaps unsurprisingly a vendor-led IT consortium supports IT accounting. As far as I am concerned though they are responding to a need, not inventing one. I am going to read the full report and comment some more but in the meantime I just wanted to flag the number for myself, and people like Dennis Howlett.

IT needs to get its act together, but so so other industries. Well done Intellect for putting a stake in the ground on the 2%, but thinking about the other 98. Lets get on that Low Carb(on() Diet.

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Green is a form of Lean

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Many of us are thinking through the implications of greener supply chains.

Al has been giving it some lately, for example, with his thoughts on the Carbon Added Tax. Over at SAP Research Andreas Vogel is leading the charge. IBM is doing some solid work here, as is BT. But we’re beginning to see a potential backlash, based on the Greens are Dreamers frame. The argument is that green thinking and approaches will be jettisoned as economic conditions toughen. But is that necessarily the case? Jason Busch from SpendMatters nails it in a post entitled How Will Green / Sustainable Procurement Play in a Recession?

While it would be easy to dismiss green and sustainable procurement practices as a luxury for companies to invest in when times are good, I actually believe that they could help organizations to buoy their top lines and pull up from a spiraling downturn or period of contraction. Whether it’s better marketing the benefits of green supplier practices to customers to spur pent-up demand or making investments in supplier development initiatives which reduce unnecessary packaging, supplier-focused sustainability initiatives have the potential to drive sales and reduce cost.”

I hold a similar line: it seems daft to argue, as the Bush Administration repeatedly has, that efficiency efforts harm economies. Efficiency can help you cut cost, even if (especially if?) its energy costs we’re talking about. Jason gets some great comments on his post. For actionable advice why not try Paul Gooch’s suggestion:

A former employer of mine ran an internal initiative called WRAP…waste reduction always pays. This applies as much to purchasing as any functional activity. The benefits go straight to the bottom line, and in the process you reduce your energy usage, carbon footprint, etc

But Lisa Reisman really distills the arguments to 100% proof: “green is a form of lean”. Thinking about carbon consumption is not just protectionist sabre-rattling: its an efficiency argument. It strikes me at the moment many economists and business commentators just aren’t thinking through their positions. We’re seeing rhetoric as the primary argument. Greens are luddites. Localisation means a return to the stone age. And so on. Green is a form of lean.

The implications for software and services companies are clear – keep investing in Green, recession or not. You can always change your marketing to read “cost-cutting”. If however you’re relying on a return to abundance as a primary planning assumption you could be in major trouble. Spend matters green or not.

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On CES, Greening, and Gizmodo as Eco-Pranksters

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Its a laudable goal CeBIT would begin the long road to greening by fully supporting the Climate Savers Computing Initiative. But I should point out the power used at trade shows is just absurd – all those banks of screens talking to nobody in particular.

Should we should reconsider the Gizmodo guys as eco-pranksters (have you seen the video, where all the huge screens start turning off, one after another? Maybe they should join the Green Forge.) I still don’t really understand why so much anger was directed at Gizmodo, people talking about lawsuits and so on. Annoying yes. Business threatening- come on people, get some perspective.

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On Small Changes, Small Cars, Tax and Pollution

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It’s fair to say that encouraging people to change their behaviour in small ways can have a big impact – cumulatively – on reducing carbon footprints and environmental impact in the long-term.

But how Governments and authorities manage and cajole the public to change personal behaviour can be a problematic process – and something that’s difficult to get right. One obvious avenue available is to incentivise change by introducing tax-breaks on ‘environmentally friendly’ products and services, and hiking tax on high-polluters. That seems to be the idea behind planned changes to the Congestion charge policy in London, which – rightly or wrongly – from next year, is being turned into an environmental charge based on carbon dioxide emissions from cars.

You can read more about it in detail here, but in short, the plan is that whereas currently nearly everyone pays £8 per day, by 2009, cars which emit more than 225 g/km of CO2 will be charged £25 ($50) a day to drive into central London. Ouch. But the flip side – the ‘tax-break’ – is that if you drive a car that emits less than 120g/km of CO2, then access is free. The idea is to move people from gas-guzzlers to eco-friendly fuel-sippers, and thus see CO2 levels in the city fall. Nothing wrong with that you might think, but there’s a potential flaw…

Sales of these small, ‘sub-120g/km’ cars are soaring across the south-east of England. A new report by CEBR (report not available openly) suggests that this ‘environmentally-driven’ policy could actually end up causing CO2 levels to rise. That’s because it’s predicted the changed system will have a net result of up to 10,000 extra cars a day entering central London. And that can only lead to an increase in congestion, and a slow down in traffic speeds. As anyone who understands the internal combustion process will tell you, the problem with (even highly efficient, and small) engines, is that they’re at their least efficient when the car is sat stationary or moving at low speeds. So despite the fact that most of these additional cars will be classified as ‘environmentally friendly’ and driving around congestion charge-free, the extra traffic and congestion they create could mean CO2 levels actually rise.

Kit like this will unsurprisingly fall into the £25-a-day bracket come next year

You will, doubtless, be surprised to hear that kit like this will cost £25-a-day to drive in central London come next year…

Whether the report’s predictions prove true, only time will tell. One potential caveat to consider is that it was commissioned by Land Rover – who aren’t exactly known for their small cars (in fact, every vehicle they currently sell falls into the £25-a-day category). In the auto-industry, nothing is ever quite as black and white as it first seems… but there’s plenty of support for it’s predictions in the form of academics for instance, who have no reason for bias.

The big questions it begs, is how governments, authorities and legislators drive a process of adoption for new, more environmentally friendly products and technologies, without having the entire process back-fire on them at ground level? The message they’re putting out to people here is ‘do this, and because you’re helping save the planet, we’ll reward you’ – but in fact, that ‘reward’ might end up having quite the opposite effect on the planet’s health. Don’t ‘reward’ people’s for changing their behaviour, and they’ve no reason to change. So the carrot-stick approach is difficult. I suspect this policy might go down in history as being one of those top-down processes, that on paper looked great – but which back-fired terribly on the ground by having precisely the opposite impact to what was originally intended. Another case which will show the need for grass-roots level innovation and adoption, rather than top-down? I think so.

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Stop The Madness: run events where your people are

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I love Lisbon. Its a fantastic city. I love Portugal. Great country. But the more I think about it the more absurd it seems that IBM flew a bunch of analysts and staff there for a conference last week, particularly given that one of the key themes of event was economic greening.

The simple fact is that the great majority of people attending were from London.  The industry analyst business in Europe is not particularly geographically distributed. I don’t believe there was a single Portuguese analyst at the show. Most of the IBMers were based in London too.

I think one idea behind holding such events in various far-flung venues is to “share the love”, not favouring one geography over another. Another reason is just the loveliness of the place.

I appreciate that the analyst business is fairly unusual but many industries do travel a lot. But couldnt’ we do things closer to home? Pareto distributions are likely to indicate the best place to hold an event.

Not only would running last week’s event in London have been far less carbon intensive, but it would also have been far less impactful on our productivity and home life. Missing half days of work on either side of a journey is hardly ideal. Even worse, as far as I am concerned, is missing my family. I got home at 11:45pm, having eaten nothing but a pretty nasty British Airways sandwich, and my wife was already in bed. I don’t know about you but its nice to actually get some decompression time.

No rest for the wicked. This morning I just got back on a redeye from New York. The situation in this case was somewhat different. IBM held its US event in Stamford, Connecticut,which is in easy driving distance of most of IBM’s senior executives. What is more it is the home of the biggest and most successful analyst firm in the world- Gartner Group.

I must admit that last year I was slightly put out by the fact “we were all travelling to Gartner”. It just seemed a bit off that all of the other analyst firms, including RedMonk, had to go into Gartner territory. Today I hope I am looking at the situation in a more mature fashion. I hope fewer Gartner people had to travel either, saving more carbon miles.

So what is my call to action? Hold events where the people are. London may be more expensive than other cities, but its where most of the people in my business at least live and work. if you’re organising a conference find somewhere close to home. Don’t travel unneccessarily. You might even consider using a tool like dopplr so that you know where your co-workers are going to be at any given time,so you can reduce travel accordingly. I met a guy from IBM yesterday who was doing exactly that.

And perhaps we will all have better home lives, as well as doing our bit for our carbon footprint. It makes sense to me. What about you?

 

picture of the Statue of the Discoveries, Lisbon, courtesy of Welland.