Tech helps fuel green businesses

It can be tempting to dismiss talk of sustainability in business as greenwash. But after spending a few days moving among the green-business elite, I feel like people are proving that concern for the planet is a source of innovation every day.

I spent the earlier part of the week at the Fortune Brainstorm Green conference in Laguna Niguel, Calif., where representatives from leading-edge companies shared stories of how they profit from green technologies or products. This group is hardly representative of the business world as a whole and people well-versed in corporate sustainability probably didn't walk away with radical new ideas.

But for someone who follows green-technology business developments every day, it reminded me of how deep the potential is for tech and business innovation. And in many cases, the Web and IT play a significant role, particularly for us consumers. Here are some of the ideas that were floating around.

The recession has boosted the case for 'going green'

The leaner economic times have increased focus on lowering costs. That makes investments in energy efficiency an easier sell because they typically have a relatively quick payback--on the order or months or a few years--and the technology is readily available.

Power consumption from electronics--think giant data centers--is one of the fastest growing consumers of electricity. At Dell's headquarters, IT is about one third of its electricity bill, with the rest split between lighting, and heating and cooling. By adopting virtualization in its data center, the company saved $50 million in energy, space, and labor over 18 months, according to Dell Chief Information Officer Robin Johnson. PCs are automatically shut down at night by software to save energy.

But energy is just one natural resource that corporations need to use wisely. Coca Cola, for example, has invested in water treatment facilities in some countries it operates in, a move that benefits the community and the company since it needs water and a healthy local economy to operate. Scarcity of natural resources and doing more with less is the premise behind IBM's Smarter Planet campaign which seeks to apply tech to transportation, urbanization, water, and energy efficiency.

"Whether you are a climate denier or not...there is a universal acceptance of the growing contention for resources," said Rich Lechner, vice president for energy and environment at IBM, told me. There's a strong economic component, too. "At the public sector, there's a real interest in sustainable economic development," he said.

Tech helps bridge gap between economy, ecology

Pick your area and you'll find that technology can make Earth-friendly choices easier to make. Green buildings have historically been trophy homes or corporate headquarters designed to make a statement about a company's commitment to the environment. That's still the case, but the gap, if there is one at all, between paying a premium for green goods is narrowing for products, such as efficient lighting or materials made from recycled content.

Everyone knows we can lower the cost of clean energy and clean transportation, but there's a lot of innovation that can happen in materials and waste reduction. The first sustainability initiative at Wal-Mart was when one executive reduced packaging for a toy, which eliminated the need to ship 215 containers from China. Now, Wal-Mart is driving those reductions--and cost savings--through its supply chain of partners.

Dell developed packaging for a Netbook that is made of bamboo, sourced sustainably from China. The cost is the same as other packaging materials, and Dell expects it can be compostable. It also gives the company options if prices fluctuate for different packaging materials, according to Oliver Campbell, senior manager for global packaging engineering at Dell.

The key is for employees to reconsider the environmental footprint of their jobs, people said. Chemistry companies, for example, can seek to make products from plants rather than fossil fuels or make more environmentally benign chemicals.

"We're looking at things in different ways. We're looking through the lens of sustainability and developing new technologies to address really big problems," said Scott Elrod, vice president and director of hardware systems Laboratory at the Palo Alto Research Center, which is developing technologies for cheaper water treatment or techniques to convert carbon dioxide from power plants into a liquid fuel.

It starts at the top

Sustainability in business is different from corporate social-responsibility programs, which monitor the social and environmental impact of corporations, because sustainability can touch so many parts of a company, said Roger Ballentine, president of Green Strategies. But my impression is that this doesn't happen unless somebody high up in the organization makes a very visible commitment.

Bill Ford was considered a renegade when he began pushing Ford Motor to build fuel-efficient vehicles 10 years ago, including hybrids. He was also personally involved in the development of the Rouge River plant in Michigan, which took a number of steps to reduce its environmental impact. Those moves then, which may have seemed risky, have helped the company's position now, say employees.

"We wouldn't have the hybrid Escape if it weren't for Bill Ford. I was at Chrysler at the time and wondered, 'What are they doing?'" said Susan Cischke, group vice president for sustainability, environment, and safety engineering at Ford. Since then, the momentum has picked up and spread to different areas. "It used to be that sustainability was a side thing and you put out a report once a year. Now it's integrated into the core of the company," said Cischke.

IT is key ingredient to eco-products and services

Car-sharing service Zipcar wouldn't be in business if it weren't for the Web and RFID technology. People reserve cars over the Web, using a PC or wireless device, and then access the cars with a card.

Arguably, it's a green business because it lets people in cities use cars occasionally, which eases congestion and promotes use of public transportation. The company estimates that each car it rents equates to 20 cars being taken off the road and a reduction of vehicle miles overall, said Zipcar CEO Scott Griffith.

Tech tools also help consumers manage their personal environment footprint, such as software to manage electric-car charging or to improve home energy efficiency with energy monitors. Another example: Ford on Friday released an application for its in-car software to help consumers find the most energy-efficient driving route.

Perhaps the bigger impact comes from using tech and the Web to inform consumers. The Sustainability Consortium, originally formed by Wal-Mart in 2008, is a group of companies and academics that are trying to create labels to convey the environmental attributes of goods, much the way nutritional labels work for food. It's incredibly complex, given that most of a product's environmental footprint stems from the supply chain of partners so this sort of system is unlikely to happen fast or be perfect.

"We are hoping to develop a tool to allow consumers to make better decisions and be better informed so they're making purchase decisions based on more than just price. That's the vision," said Matt Kistler, senior vice president of sustainability at Wal-Mart stores.

Information is a key part of recycling goods at the end of life, too. Furniture maker Herman Miller is a pioneer in designing products so that they can be recycled and made into new products. But until consumers know that old goods can be recycled, all green-oriented businesses will struggle to scale up their efforts, said Michael Volkeman, the company's former CEO.

For all the positive reinforcement around the prospects for green business, there wasn't a whole lot of optimism regarding policies to adequately address climate change in the U.S. That why businesses and consumers have a big role in shaping the future, said Yvon Chouinard, an icon in the world of business and sustainability. "The new generation, they vote with their dollars," he said. "If companies don't get this, they will be left behind."