A Promise for a Better World

What is a promise? An agreement, a guarantee, a pledge, a handshake, a contract? We often hear about brand promise, that is, what benefits a brand delivers to its loyal customers. The next decade promises to bring more sustainable products, more responsible corporations and a new valuation on money that includes not only financial returns, but social returns as well. We see a trend among Fortune 1000 firms who are now hinting what their vision on brand and image promises for the next decade in the products they are producing today.

Fortune 1,000 corporations now represent some of the largest economies in the world. Their buying power and influence on consumer behavior and perception is enormous, almost unwieldy. The potential to abuse such power for corporate profit is high. However, the pace and visibility of modern business is also different than it was 25 years ago. Shareholder, consumers, advocacy groups, government and philanthropic organizations have enormous power as well, a market-based check and balance that is not perfect, but can surprise as technology and access to information have made corporate behavior much more transparent in this 24-7 world. Market movers are shifting their product and service strategies with the stealth and force of a tiger.

Realizing that they can create better products for a better world while also reaping strong financial returns for shareholders; many Fortune 1,000 firms are now reinventing the brand and corporate promise to their customers and shareholders to now include elements of corporate social responsibility and social response product development.

We share some of the trends we see in this mega trend transforming our futures:

GE, the mammoth $163.4 billion diversified products company is touting its Ecomagination initiative focused on new brand promises from products ranging from advanced membrane technology to clean coal technologies, advanced light solutions using compact fluorescent, halogen or LED technology, water desalination products and cleaner burning locomotive and aircraft engines.

With sales exceeding $25.6 billion Tyson Foods is the world’s largest meat-processing company. It serves retail, wholesale and foodservice customers in more than 80 countries. Seeking to be more than a meat processor, Tyson Foods is now utilizing its waste food by products (animal fats, vegetable oils and greases) as a feedstock for synthetic and renewable fuels production in a strategic partnership with Syntroleum Corporation. Tyson Foods has also teamed with ConocoPhillips to produce the next generation of renewable diesel fuel.

With sales topping $348.6 billion, retail giant Wal-Mart is an economy unto itself. Wal-Mart has been reinventing its corporate reputation and brand promise by taking a serious look at ethical product sourcing, procurement of renewable energy, waste reduction and more active promotion and sale of sustainable products, many of which are certified like ten fish products that the Marine Stewardship Council certifies as having met more stringent environmental criteria. Wal-Mart is now looking at the products it carries from food to clothing to electronics and working with industry trade associations and others to help identify more sustainable products it can promote and provide to consumers.

LP Corporation, the $2.2 billion wood products company is promoting their promise to save energy through their Radiant Barrier LP TechShield® product line.

And, Toyota Motor Corporation has perfected the concept of a brand promise. With more than $202.8 billion in sales in 2007 the company is outpacing all other automotive manufacturers in production and sales worldwide. Having led the automotive revolution into and era of more fuel-efficient vehicles with the hybrid synergy drive, Toyota is beloved by its customers and now revered by its peers.

We see promises for a better world in each of these firms listed. We also see them in dozens more now shaping the money markets. Every sector, financial, real estate, industrial products, energy, automotive, consumer products and so on has social response leaders now promising a better future. These firms are shaping the products we used to associate with price, quality and performance in an economically competitive world. They are also shaping new products based on a socially responsible competitive world. The competitive landscape has shifted and the tigers are on the prowl.

Tell us what “promises for a better world” you see unfolding from Fortune 1,000 firms.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

“Dare to Dream” Big: How New Social Response Partnerships Are Spawning Effective, Timely and Innovative Corporate & Social Collaborations

Addressing the Gap in 21st Century Science & Engineering Leaders - A unique collaboration between ExxonMobil, The Harris Foundation, and 19 University Campuses sets the stage for a new era of social response leadership.

Across the next ten to twenty years, the U.S. may face a critical shortage of engineers, scientists and other technically trained workers as the baby boomer generation settles in on retiring and reinventing their futures. There are an estimated 77 million baby boomers (those born between 1946 and 1964) in the U.S. The first large wave of them began to retire in 2006 and, the U.S. Bureau of Labor Statistics has estimated that as many as “10 million jobs will go unfilled in 2010” as this first wave of the boomer generation retires. With much of the know-how, technical expertise and historic understanding of how large systems work embedded in the minds of millions of engineers, scientists and other technical experts of the boomer generation, there is great potential to have a critical gap in knowledge for 10-to-20 years.

Think about it, the knowledge, know-how and intellect of energy distribution systems; oil refineries, pipeline transport and storage; transportation, water, research and innovation infrastructure has largely been built, managed and defined by millions of baby boomers. To their credit, it is an amazing accomplishment that the U.S. has had such a promising and talented workforce. To our potential detriment, without new blood in technical and science disciplines, the U.S. stands to lose its global prominence it has held from a competitive, innovation, and quality of life standpoint.

Seeking to address this gap in knowledge and expertise, The Harris Foundation and ExxonMobil have teamed up to create the ExxonMobil Bernard Harris Summer Science Camp (BHSSC). The BHSSC is a two-week camp, free to qualified students, that offers innovative programs to “enahce middle school students’ knowledge in science, technology, engineering and mathematics (STEM) while encouraging youth to stay in school and fostering leadership and citizenship”. The BHSSC summer program will, through the help of ExxonMobil reach more than 1,000 students as it is implemented at 19 universities with a total of 20 camps. During the two-week program students will attend classes in STEM curriculum taught by faculty of participating universities and secondary classroom teachers. The program will also feature hands on individual, group and teaming projects, field excursions and guest speakers – each focused on creating a well rounded experience that encourages students to meet their full potential in STEM disciplines.

The Harris Foundation is a non-profit organization that was founded in 1998 by Bernard Harris a M.D. and past NASA astronaut, physician and businessman. The Harris Foundation “supports programs that empower individuals, in particular minorities and economically and/or socially disadvantaged, to recognize their potential and pursue their dreams”. To date more than 2,500 K-12 students have participated in The Harris Foundation programs. The partnership with ExxonMobil will help Bernard Harris and his social foundation achieve much greater reach, in pursuit of a better future. As the philanthropic arm of ExxonMobil, the ExxonMobil Foundation has provided funding to K-12 and higher education levels in support of improving math and science education. In 2006 the ExxonMobil foundation provided $139 million in worldwide contributions of which $54 million was dedicated to education. By helping non-profits like the Harris Foundation, ExxonMobil is demonstrating the power of its corporate citizenship program and philosophy to address social needs, particularly in education.

A podcast through the Grassroots Learning Project at Oregon State University (OSU) (one of the 19 participating universities) offers an audio dialog Chester Bateman, Assistant to the Dean for Technology, College of Education from OSU and Dr. Bernard Harris as they discuss The Harris Foundation and the ExxonMobil Bernard Harris Summer Science Camp program.

World Inc. is not just about how companies are innovating superior products based on Socially Responsible Product Development, it’s also about how leading socially responsible firms develop new leaders while addressing social concerns plaguing our near future. Dr. Bruce Piasecki, author of World Inc. notes, “It is my view that with the right kinds of social leaders, large multinational corporations can play the key role in solving the long list of challenges facing society in the 21st century.”

In a world where every little bit of initiative and leadership counts, we commend ExxonMobil and The Harris Foundation as well as the 19 participating universities for their “World Inc.” type of leadership, for their willingness to collaborate and discover new and unique models to achieve goals, and specifically for working to address social needs while working to enhance science, technology, engineering and mathematics education in the U.S.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Big Companies, Big Time Energy Agreements, and a Little Bit of Social Response Sweetener

Shell, Luminant, PG&E and Pepsi seek to transform the energy and power markets through social response energy solutions…

With the sun high in the sky, a cool wind at their back and a tasty cold beverage near their side, four companies are aiming to lead corporate renewable energy development and pricing strategy in the U.S. Each case is an example of social response leadership, or how firms are delivering on social need in parallel with shareholder value.

This week Shell and Luminant announced that they are teaming up to develop the world’s largest wind farm, a 3,000 megawatt generation site in the panhandle of Texas. At 3,000 MWs the Shell and Luminant development would be four times the current largest wind farm in the world, the 735-megawatt Horse Hollow Wind Energy Center, which was completed by FPL Energy, Inc. in late 2006, and also in Texas. Luminant is a subsidiary of TXU, the prominent Texas utility that recently was acquired by private equity firm Kohlberg Kravis Roberts & Co. (KKR).

Last week Pacific Gas & Electric (PG&E) announced that they had signed an agreement to purchase 553 MWs of power from Solel Solar Systems the Israeli parent company that has built its “patented and commercially-proven solar thermal parabolic trough technology” in the Mojave Dessert. An incredible amount of electricity, the PG&E purchase of 553 MWs of solar power is enough to power 400,000 homes in northern and central California.

Fong Wan, vice president of Energy Procurement, PG&E noted, “The solar thermal project announced today is another major milestone in realizing our goal to supply 20 percent of our customers’ energy needs with clean renewable energy…Through the agreement with Solel, we can harness the sun's climate-friendly power to provide our customers with reliable and cost-effective energy on an unprecedented scale.”

PG&E is among the cleanest energy providers in the U.S. In fact they currently supply 12 percent of their energy from qualified renewable energy sources, as defined under the California Renewable Portfolio Standard (RPS). PG&E says that more than 50 percent of the energy they deliver to their customers comes from sources that emit no CO2.

And in even sweeter deal making news, PepsiCo has retained the leader board as the #1 purchaser of green power in the U.S. with 1,105,045,154 kWh per year. PepsiCo tops the USEPA list of Green Power Purchasers which includes retail, finance, government and industrial giants like Wells Fargo, Whole Foods, US Air Force, Johnson & Johnson, Starbucks, IBM, HSBC, DuPont, Kohls Stores, Staples and The World Bank Group to name a few. What’s even more impressive is that in addition to PepsiCo, two of the firms’ largest manufacturing and bottling companies have recently joined the USEPA Top Green Purchasers list. Both the Pepsi Bottling Group, Inc. and PepsiAmericas, Inc. have decided to purchase 100% of their electricity from renewable generation sources. Pepsi Bottling is rated #4 and PepsiAmericas is rated #13 on the USEPA Green Power list.

The Pepsi Bottling Group (PBG) is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages — some of the world's most recognized consumer brands. PBG became a publicly-traded company in March 1999 through one of the largest initial public offerings in the history of the New York Stock Exchange. PBG generates nearly $13 billion in annual sales. It operates in the United States, Canada, Greece, Mexico, Russia, Spain and Turkey, accounting for more than one-half of the Pepsi-Cola beverages sold in North America, and about 40 percent of the Pepsi-Cola system volume worldwide.

With $3.7 billion in revenue, PepsiAmericas is the second largest Pepsi-Coal anchor bottler with operations in 15 countries around the world. In total, the company serves a population of more than 122 million people.

Working with Sterling Planet the PepsiCo team of companies are offsetting 100% of their electric use (a whopping 1.72 billion kilowatt-hours) through the purchase of renewable energy credits. Founded in 2000, Sterling Planet has become the nation’s leading retail provider of renewable energy through direct sales and electric utility partnerships. Sterling Planet is also entering into new U.S. energy market spaces with Energy Efficiency Certificate also know as White Tags.

Social response product development is this Century’s New Renaissance, a rebirth of scientific discovery coupled with a sustainable industrial revolution and a new-age focus on how to address social need through knowledge of the past, vision for the future and adaptation of technology for greater ecologic, economic and equitable potential. Big firms like PepsiCo, Shell, Luminant and PG&E are beginning to advance this new renaissance through the power of alliance formation, partnership, purchasing agreements and by discovering that there is value in social response energy solutions, for their reputation, their customers and their shareholders. What we call “World Inc.” companies, these firms are using the power of their size and strength of their leadership to redefine energy production, distribution and use in this new century.

What other examples of social response product development and capitalism do you see transforming new markets like energy? Do market leaders like PG&E, Sterling Planet and PepsiCo have a shot at truly creating more sustainable supply chains, energy production and delivery or products? Let us know your thoughts on how you see corporations going green impacting the future of money and markets.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

Want to buy a ton of CO2? Just Use your GE Earth Rewards MasterCard

The New Greed for Green: Whether it’s Greener Homes, Planes, Computers, Coffee Pots or Financial Services, It’s all about Money! Money! Money!

Money doesn’t grow on trees. At least that’s what my father said a quarter of a century ago. My father was, and remains right. I can’t go out and pick a Franklin, Hamilton or Grant off of my 80 year old Maple tree. However, in a world that is increasingly constrained by carbon and looking at everything from reforestation to offset CO2 to the use of waste wood products for biofuel production from conversion of cellulosic material, the notion of money not growing on trees is taking on a new meaning. The human relationship with the natural world is disingenuous, distant and devoid of long-term social consequence. We’re the ants, marching one by one, building our financial nests but often forgetting how the interplay between money and markets hinges upon the long-term health and vitality of ecosystems.

In this new century a child is born into a world of media frenzy world where the speed of information and money transaction is measured in milliseconds. We’re seeing real-time multi-billion real estate, finance and private equity transactions occur daily before our eyes as the movement of money is at an all time high and its impact on social and environmental needs is also at its greatest.

The latest installment of this dizzying money culture is the “GE Green Card”, a credit card based way for consumers to “keep the change” for the environment. Titled the “Earth Rewards MasterCard” the GE financial tool may sound a bit gimmicky, however its intentions are routed in this new economy we term ‘social response capitalism’ where the tools, processes, services and products of our past are now being innovated from scratch or redeployed to provide social and environmental value like no other time in history. In addition, GE is educating consumers about the environmental impact of their daily lives, whether from use of their car, their home, or their day to day consumer purchases.

Using the GE Earth Rewards MasterCard consumers will be able “to dedicate one percent of their purchases to fund projects that offset carbon dioxide emissions”. GE will use its finance empire to pool the monies and once a year they will invest them in projects that reduce carbon dioxide.

The GE concept is not that bad of an environmental finance tool. There are other organizations like 1% For the Planet whose business members dedicate 1% of their annual revenues to environmental organizations. 1% For the Planet has 682 members who have contributed more than $21 million.

We have traditionally placed monetary value on the utility that earths natural resources provides us, but not on their depletion, waste or value to produce – including the cost of CO2. What is the value of the earth producing a gallon of petroleum over geologic time? What is the value of a pristine forest land on the top of a West Virginia mountaintop versus the value of coal removed from mining and earth blasting? With GE and other financial institutions testing the consumer demand to use financial tools to help mitigate carbon emissions, we will likely learn to valuate CO2 much quicker – particularly in this era of immediate transaction.

In his recent blog on the GE Earth Rewards card, renowned speaker, writer and corporate environmental strategist Joel Makower smartly asked, “Can all of this actually transform our consumptive behavior? Is GE joining the teeming masses of marketers seeking to encourage consumers shop their way to environmental redemption?”

Joel Makower also noted…“It's too early to tell, of course, but Earth Rewards has the potential to catch on with the large middle market increasingly concerned about climate change but willing to make only small, incremental changes, if that. (GE envisions a potential market of 25 million Americans.) Earth Rewards doesn't require consumers to change habits: It's a conventional credit card with a green sheen. Some would say that's a bad thing -- consumers need to make radical changes in their daily habits -- but it's also a realistic approach”.

Joel Makower’s thoughts are in step with World Inc. While some companies like Toyota and HP take more radical steps to innovate new products for social response, other firms like GE find a niche in redefining existing services, like their credit and financial service, to provide social and environmental value to those consumers that are willing to take smaller actions. While it may be necessary to take even more proactive approaches to climate change, we must understand that not every consumer has the financial or political power to make sweeping change. Thus, some consumers prefer tools, like the GE Earth Rewards card, as a way to contribute to a better world.

The success in the GE Earth Rewards card is already here in our view. Sure we can debate how much money actually goes to carbon sequestration or renewable energy projects, but the fact that GE is pushing the envelop across all of their product segments, be them big engines – power production – appliances – or financial tools. GE embodies its notion of ecomagination and is redefining its future through careful, targeted and strategic launch of social response products and services, World Inc. style.

Mark C. Coleman
Senior Associate & World Inc. Case Leader, AHC Group, Inc.
Mark@ahcgroup.com

The Privatization of Business can be Aligned with Social Response Capitalism Goals

Reflections on "World Inc.": Questions from Government, Corporate & Social Leaders

Since the release of Bruce Piasecki’s new book, World Inc.: When It Comes to Solutions - Both Local and Global - Businesses Are Now More Powerful Than Government, and the launch of our Blog World Inc. "For Better or For Worse?", we’ve received many insightful questions from government, corporate and social leaders. We have decided to use this blog entry as an opportunity to address a one of the questions we feel are important to our pursuit to have more dialog and interaction on how business going global is colliding with business going green.

Question: There appears to be an emerging trend to take public companies private, and out of the hands of shareholders. What effect will this trend have on your thesis?

There is indeed a trend for firms to go through the transition from public to private ownership. We’ve seen this with firms like Georgia-Pacific who was acquired in 2005 by one of the largest private firms in the world, Koch Industries, Inc. for $21 billion. We also see the impact of private equity firms like the Carlyle Group, Blackstone Group, and Bain Capital. In February 2007 the electric utility TXU accepted a $45 billion offer from two leading private equity firms, Texas Pacific Group and Kohlberg Kravis Roberts, along with global investment bank Goldman Sachs to take the company private. The TXU deal was the largest private equity buyout to that date in time. As these examples show, the privatization of business is a significant trend to watch. We do not believe that these mega money deals will preclude private mega-corporations from having to operate in a world now being defined by social response capitalism we call “World Inc.”.

Although public firms have seemingly greater financial reporting and accounting standards to adhere to, private firms often undergo similar internal review from their leadership who oversee and manage finance and governance protocols. Businesses often prefer private ownership as it offers certain flexibility in making swift decisions, particularly in agile and industries in which companies compete heavily on price, quality and performance.

The ability to shift ownership from public to private has its downsides. Companies go public to increase investment and grow capital resources to maximize production and profit. Public firms that can compete on price, product performance and “social response” attributes like corporate social responsibility, environmental practices and sustainability metrics will yield new investment from shareholders and may develop competitive advantage over their peer private and public competitors. The privatization of corporations puts fears in the minds of some investors, environmentalists and consumers. Private companies do not have to report their financial statements as stringently as publicly traded firms have to do through SEC disclosure rules. With a perceived veil over their financials and operations, some investors fear the private companies may not be as open about their environmental and social efforts, and may actually minimize those efforts over time due to lack of financial scrutiny.

Some organizations, like SEIU, have studied and reported on the impact private equity firms have through their enormous buyouts of public companies. SEIU sees mega money buyout trends as impacting how companies go green and report social and governance performance. With 1.9 million members who have assets exceeding $1 trillion in pension funds, SEIU is a strong and fast growing union in North America. SEIU is the U.S.’s largest union of health care workers, property services works and the second larges union of public services workers. Thus labor groups like SEIU, large pension funds that invest in private equity firms and others will be interesting to watch over time on how they influence private company reporting of social, environmental and governance metrics.

But we see upsides in private corporations and private equity deals. Private firms we’ve encountered in our 25 year history as management consultants actively benchmark with public competitors and peer companies. This tells us that while firms may go private, they don’t necessarily completely veil themselves from the outside world. In addition, government and the public will always serve as stakeholders to any firms, public or private. So as firms go private, they may lose shareholder influence. They won’t however, rid themselves of government, societal and non-governmental organizations influence on their products, operations and long term stewardship of natural resources.

In the case of TXU, their decision to go private resulted in stronger environmental and alternative energy policies and operations. For example, the Kohlberg Kravis Roberts & Co. (KKR), Texas Pacific Group (TPG), and Goldman Sachs & Co., equity buyout of TXU was said to have the following benefits:

1. Planned coal-fueled generation units reduced from eleven to three, preventing 56 million tons of annual carbon emissions. This scale-back represents a 75 percent reduction in new coal capacity. In addition, the company is committed to continuing its efforts to meaningfully reduce existing carbon emissions and seeks to join the United States Climate Action Partnership (USCAP).

2. A $400 million investment in demand side management energy initiatives. TXU will implement an aggressive demand reduction program through a $400 million investment in conservation and energy efficiency activities over the next five years.

3. Increased commitment to exploring renewable energy sources and investing in alternative energy technologies. TXU will reduce mercury (Hg) emissions, sulfur dioxide (SO2) and nitrogen oxides (NOx) by 20 percent from 2005 levels, as previously committed, through reductions at existing units and installation of emission controls on the new Oak Grove and Sandow units. TXU will reduce its own carbon emissions by increasing efficiency of its generating facilities by up to 2 percent. TXU will become a leader in providing electricity from renewable sources by more than doubling its purchase of wind power to more than 1,500 MW, maintaining its status as the largest buyer of wind power in Texas. TXU will also promote solar power through solar/photovoltaic rebates. The company also intends to join the FutureGen Alliance, a non-profit consortium of companies supporting FutureGen, the U.S. Department of Energy project intended to create the world’s first near-zero-emissions fossil-fuel power plant.

The TXU example tells us that perhaps there is promise and benefit in firms going private from a social response perspective.

Global environmental and social needs have ballooned to the point where the roles of governments and businesses are no longer mutually exclusive. Businesses are taking on the role of government in providing social products and services to the world’s population that is impoverished, unhealthy and uneducated. Governments are taking on roles for creating wealth and providing incentives for new technology. In our view, the book World Inc. is mostly about recognizing that a transition in how we value products, services and investments through advanced capitalism is upon us. The role of private equity firms and companies in creating a better world by delivering social products is as important as the public firm. The World Inc. thesis on how public and private companies are innovating superior products, delivering on their bottom lines and providing societal value based upon social response capitalism will be played out in the next decade. We believe there will be winners and losers from both sides of the publicly held and privately held corporation.

Mark C. Coleman
Senior Associate, AHC Group, Inc.
Mark@ahcgroup.com

Seeking Social Response Solutions for Clean Water: How Some Firms Are Working Now to Mitigate the Potential Risk of Global Natural Resource Wars

You think business and society is carbon constrained…look at water. Future resource wars are inevitable without swift social response.

If the world’s population continues to grow, if we continue to expand our economies, and if we continue to use our resources more quickly than natural processes can replenish them – then resource wars are inevitable. I say this because there simply are not enough resources, be them oil, gas, water, timber, fisheries or agriculture land available for us to continue our rate of consumption unabated. This is known. Yet, we are slow to adopt strategies that can serve to mitigate the risk of future resource constraints and worse yet, resource wars and catastrophic resource failures.

Proclaimed as the “Blue Planet” approximately 71% of the earth’s surface is covered with water. This sounds promising until you consider that about 97.5% of the water on earth is saline, while the remaining 2.5% is fresh water. And the majority of fresh water (68.7%) is currently in the form of ice. With a world population of 6.6 billion people and growing, the amount of fresh water for hydration, hygiene, agriculture, industrial production and ecosystem health gets stretched thin quickly.

The Business for Social Responsibility (BSR) summarizes the challenging water issues society now faces in this new century. According to BSR, industry accounts for 23% of the total fresh water use worldwide. The United Nations estimates that more than 1.4 billion lack access to clean, fresh and potable water.

With so much attention on climate change, clean energy and alternative transportation fuels and technologies, often other significant environmental issues and social response actions taken by leading corporations are overlooked or understated. We focus on water in this blog because it is literally life line for all human existence and life on earth. Water is a big time resource issue in this new century. Companies like Pepsi, Coors Brewing, Coca-Cola, Diageo, and numerous others taking very proactive measures to conserve, protect and enhance the quality of water for their customers, communities they serve and future generations.

Water is something that we take for granted. It’s likely more precious to human health, quality of life and the sustainability of our planet and future generations than oil, yet we place tremendous economic value on oil, and very little on water. Water is essential to life, yet we pollute and waste it daily with for products, services and activities that on the surface – provide economic utility – but in reality – may be irrational choices we’ve made to earn a buck. If we continue to undervalue water and utilize it for wasteful products and processes, we will constrain future growth and ultimately impact global ecosystems and human health.

Social Response Water Leaders
Coca-Cola’s corporate social responsibility efforts focus on numerous issues including climate change, accountability, packaging, manufacturing processes and water. Coca-Cola recognizes the value of water to its brand, reputation and long-term longevity as a global beverage company. Coca-Cola has developed a Corporate Water Pledge that essentially state’s that they will reduce, recycle and replenish the water they use. First they will reduce and recycle water from their manufacturing operations. Secondly they will replenish water by developing watershed protection program, community water partnerships and developing rainwater harvesting structures in regions that lack access to clean and potable water. Imagine if big oil reduced, recycled and replenished?

In addition, Coca-Cola is working in partnership with the World Wildlife Fund (WWF) to conserve water in seven of the world’s most critical eco-regions. The seven eco-regions in which Coca-Cola and WWF are collaborating include: the Yangtze River, the Rio Granda/Rio Bravo in U.S. and Mexico, Southeastern U.S. Rivers and Streams, the Mesoamerican Reef, Mekong River on the Tibetan Plateau, Rivers and Lakes of Coastal East Africa, the Danube River in Europe. Coca-Cola and WWF are addressing unique conservation and watershed issues in each of these seven eco-regions.

In Burkina Faso, one of the poorest countries in the world, Diageo worked with to deliver its Water of Life initiative with NGO partner WaterAid. Together Diageo and WaterAid enhanced access to clean water, improved sanitation, and provided effective sanitation and hygiene education to local community organizations.

As global risks of water (price, availability, quality, conservation) impact consumers and communities, pressures will increase on corporations and governments to provide solutions. Whether delivered by corporations like Coca-Cola, NGOs like WaterAid or governments, the worlds growing population is thirsty for clean water, and is placing new demands on water for sanitation, agriculture and industry. We see the life-cycle of water as a social response product growth market in this new century.

Mark C. Coleman
Senior Associate, AHC Group, Inc.
Mark@ahcgroup.com

Electricity, the New Alternative Transportation Fuel: Ford & SCE team up to accelerate commercialization of plug-in hybrid-electric vehicles

“We see electricity as itself an alternative fuel in support of transportation”

That was the statement made last week by John Bryson, chairman of Rosemead, Calif.-based Edison International (NYSE: EIX), parent company of Southern California Edison (SCE) as SCE and Ford Motor Company accelerate the commercialization of plug-in hybrid vehicles and rechargeable battery technologies.

To date, plug-in hybrid vehicles and advanced battery technologies have largely been laboratory scale demonstrations. Ford and SCE have teamed up to bring more real world experience and real world customer data to this promising technology and application. Together, SCE and Ford are seeking to test the viability of mass producing and mass deploying plug-in hybrid recharging technologies in the future. To get there, the companies will test up to 20 plug-in hybrid vehicles in the SCE electric service territory which serves 13 million people in central and coastal Southern California. SCE is providing the real-world test conditions and electric power grid and Ford is providing the plug-in hybrid vehicles. The partnership will test vehicle durability, driving range and overall reliability impacts on the power grid.

Talking about the new partnership with SCE, Susan M. Cischke, Ford senior vice president for sustainability, environment and safety engineering stated, “They [SCE] have the wire-side knowledge about the grid and all the issues there…By partnering with these two industries...we're hoping that it does accelerate the commercialization and certainly drive some of the cost issues down”.

Some proponents have criticized plug-in hybrid vehicles because they are recharged by from the power grid using electricity that may be generated from coal, oil or gas which still contributes to CO2 emissions and other greenhouse gases. In addition, plug-in hybrids may add additional power demand to an already constrained power grid potentially causing reliability issues. However, many advocates for plug-in hybrid technology note that vehicles can be recharged in the evenings when electric demand is lower. And, renewable energy technologies like wind can be utilized in the evening to provide clean electric power – thereby minimizing concern over additional climate change impact. Further, plug-in hybrids can be regional/localized sustainable mobility solutions. Offsetting localized emissions from the tailpipe is of high interest to many cities and regions nationwide. Plug-in hybrid technologies might just be one technological and infrastructure solution to mitigate localized pollution and air quality impacts.

Thinking about what makes a good social response leader, one that addresses near-term customer needs and expectations along side business growth goals, we view Ford and SCE’s partnership on plug-in hybrid vehicles a good sign of the future. The merger of old and new (existing electric infrastructure with newer mobility technologies) to create more sustainable solutions to transportation is a step in the right direction. As the concept and potential viability of electricity as a transportation fuel unfolds, we will look toward Ford’s and SCE’s outcomes with great interest and enthusiasm. As big time infrastructure and product leaders, the Ford and SCE partnership might just result in an innovative game changing technology for the energy, transportation and utility sectors.

Mark C. Coleman
Senior Associate, AHC Group, Inc.
Mark@ahcgroup.com