September 13th, 2010

The Low Profit Limited Liability Company (L3C): A new model for Cleantech?

BOSTON -

The L3C or Low Profit Limited Liability Company is a relatively new form of the LLC (Limited Liability Company), that, for now, is only known about and talked about by its advocates, but is quickly spreading across the nation and becoming a revolutionary new way of doing business.

The L3C differs from the LLC in that the primary purpose of the L3C cannot be to make a profit, but rather the purpose of the business must be to achieve a social benefit, with profit as a secondary or ancillary purpose.  The name itself, Low Profit Limited Liability Company, is a bit of a misnomer.  The business is not restricted in how much profit it can make at all.  ‘Show me the Money’ just can’t be the number one goal.

“The L3C must be organized and operated at all times to satisfy the following requirements:

1. The company must “significantly further the accomplishment of one or more charitable or educational purposes,” and would not have been formed but for its relationship to the accomplishment of such purpose(s);

Continue Reading >

Tagged B Corp, clean tech, cleantech, CSR, L3C, law, legislation, Low Limited Liability Company, Social Entrepreneurship |

May 21st, 2010

Sustainability and Social Media – A Match Made in Marketing Heaven

BOSTON -

With the constant fluctuation of energy and natural resource prices, more and more companies are evaluating and embracing sustainability not only to cut and stabilize energy costs, but also to drive innovation and ensure competitive advantage. “Becoming environment-friendly can lower your costs and increase your revenues. That’s why sustainability should be a touchstone for all innovation” states a 2009 Harvard Business Review article. Walmart’s new Supplier Sustainability Assessment is the strongest indicator yet that sustainability is quickly becoming a valuable business tool. A well executed sustainability program can reduce employee turn-over and enable for a methodical and process driven approach to evaluating resource use, a prevailing theme at this year’s CRO Summit.

The social media tie-in? A recent Burson-Marsteller study found that “79 percent of the largest 100 companies in the Fortune Global 500 index are using at least one of the most popular social media platforms: Twitter, Facebook, YouTube or corporate blogs”. Clearly, if Fortune 500 companies see value in engaging in sustainability efforts and are communicating about them via social media channels, it is a sure sign that a critical mass has been reached. Just like that lonely tree in the forest, if you’ve got a breakthrough idea and no one knows about it, it may as well be useless. Green and clean-tech companies should be especially in-tune to digital media as it not only allows them to look for prospects, but also funding, partnerships, and visibility. Social media (in conjunction with an integrated web strategy) can provide significant leverage to that effort. Engaging stakeholders about sustainability efforts in a meaningful way helps to build credibility and the sales pipeline. According to McKinsey & Company “Digital channels can unify that experience and prevent the leakage of opportunity. Across a range of B2C and B2B clients, we’ve seen companies accelerate revenue growth by tightening the coordination of the end-to-end experience.” With the potential of a 10-20% revenue increase, social media can make a powerful impact. This free (aside from staff time) low-hanging fruit can also do wonders for overall SEO (Search Engine Optimization) efforts as well.

In Boston (referred to by some as the Silicon Valley of the East) companies like enerNOC, Harvest Power and GreenTech Media these companies speak sustainability and communicate their learnings through social media. As innovators, these companies naturally appeal to progressive, early adopters who are tech-savvy entrepreneurs. Harvest Power provides a good example of a well executed social media campaign because they take the time to share and engage with their online-constituents via Twitter @HarvestPower and their blog. Harvest understands that like any other communication vehicle, Twitter is just another platform where the conversation happens to be just 140 characters in length. Companies who fail to keep up with social media are allowing technology to pass them becoming obsolete and irrelevant. This is a huge mistake as they are passing up an effective, measurable tool that helps with lead acquisition, nurturing, visibility and branding.

While advising clients on how they can start building a social network I always recommend starting with goal setting and developing a solid communications strategy that incorporates various on-line and off-line channels. Starting small and testing the waters is often the best approach. With so many great (and free) ancillary tools available to connect, grade, and analyze, users can quickly fine-tune and optimize online campaigns. At the end of the day communicating about sustainability needs to be succinct and engaging, according to the CSR Reporting blog. Those afraid to harness these new communication tools do so at the risk of alienating their companies from the now mainstream web 2.0 digital world we live in.

Does your company use social media to communicate sustainability initiatives? What were the results and what did you learn?

Tagged CSR, harvard business review, Marketing, social media, Sustainability |

November 5th, 2009

Why I hate the word ‘green’ and you should too

What is 'green'? -

If you haven’t noticed, the word ‘green’ is getting thrown around a lot these days. I go to a lot of conferences, meetings, and talking with a lot my peers about ‘green’ things and I have started to notice that although the word is around me all the time, I hardly ever use it, and if it happens to slip out I get the nasty sensation like I do when I accidentally swear in front of my girlfriend’s parents.

When people around me use it, and they’re not quoting someone else, I notice it makes me gringe a little bit and I become a little suspicious of whatever they say next. Don’t get me wrong, I like to breath clean air, drink clean water, I don’t want to get cancer and we have many other problems that need to be fixed. However, I don’t think the word ‘green’ is helping us get there.

When someone uses the word ‘green’ in reference to a product, service, action, or company I always ask these two questions, if the situation is correct and it doesn’t sound too argumentative.

1) What do you mean by the word green?

I’m always curious to see how they define it. I tend to find that most people don’t have a definition. This is especially important for businesses that are trying to be ‘green’ but never define what they mean by it.

2) Why is [insert whatever they were talking about] green?

This question usually looses people. Without a clear definition it is difficult to describe why something is or is not ‘green’.

That brings me to Reason #1: There is no USEFUL definition for the word ‘green’ in the context of environmentalism.

Anything can be ‘green’ depending on how you spin it. For example, I could make two equally compelling arguments why using glass bottles is ‘green’ and is it not.

The definition of the word ‘green’ is like the definition of the word efficient, it always depends on the parameters and the goals.

Also, ‘green’ applies to everything. Duh! Everything we do relates to the environment is some way but the current definition of the ‘green’ doesn’t address this.

What can do we do about this?

Honestly, I don’t really know but here are a couple thoughts. On a personal level, stop using the word.

On a macro level, it should be treated just like the word efficiency. It’s different for each industry, for different products or services and there are standards that determine what is or is not ‘green’ in each segment.

There are some companies that are trying to do this but they’re all in their infancy: RateItGreen, IzzitGrren, Wal-Mart’s Sustainability Index, The Global Reporting Initiaitve.

With the exception of Wal-Mart none of these companies make a stand and actually take a shot at defining it, they just leave it up to their users.

Reason #2: Green Washing

The lack of a definition leads to green washing by companies.

Just in case you don’t know, green washing is a company or organization that is claiming to use ‘green’ practises (whatever that is) with their products or services in order to sell more products when no real effort is being made.

Green washing is rampant. Here’s a blurb straight from Wikipedia….

In December 2007, environmental marketing firm TerraChoice gained national press coverage for releasing a study called “The Six Sins of Greenwashing” which found that more than 99% of 1,018 common consumer products randomly surveyed for the study were guilty of greenwashing. A total of 1,753 environmental claims made, with some products having more than one, and out of the 1,018 studied only one was found not guilty of making a false or misleading green marketing claim. According to the study, the six sins of greenwashing are:

• Sin of the Hidden Trade-Off: e.g. “Energy-efficient” electronics that contain hazardous materials. 998 products and 57% of all environmental claims committed this Sin.

• Sin of No Proof: e.g. Shampoos claiming to be “certified organic,” but with no verifiable certification. 454 products and 26% of environmental claims committed this Sin.

• Sin of Vagueness: e.g. Products claiming to be 100% natural when many naturally-occurring substances are hazardous, like arsenic and formaldehyde (see appeal to nature). Seen in 196 products or 11% of environmental claims.

• Sin of Irrelevance: e.g. Products claiming to be CFC-free, even though CFCs were banned 20 years ago. This Sin was seen in 78 products and 4% of environmental claims.

• Sin of Fibbing: e.g. Products falsely claiming to be certified by an internationally recognized environmental standard like EcoLogo, Energy Star or Green Seal. Found in 10 products or less than 1% of environmental claims.

• Sin of Lesser of Two Evils: e.g. Organic cigarettes or “environmentally friendly” pesticides, This occurred in 17 products or 1% of environmental claims.

In April 2009, TerraChoice published a second report on the subject. This report noted the emergence of a seventh Sin – the ‘Sin of Worshiping False Labels’.^[14]

• The Sin of Worshiping False Labels is committed by a product that, through either words or images, gives the impression of third-party endorsement where no such endorsement actually exists; fake labels, in other words.

There is so much green washing that there is an index that is trying to stop the issues. It’s called The Green Washing Index.

Many, including myself, will argue that green washing can be a good thing, but it still really pisses me off.

Reason #3: It doesn’t spur useful action

Due to the broad use, the lack of a clean definition, specifics, and lying companies, it makes it difficult for consumers and organizations to take meaningful action. In addition, the continued use of the word ‘green’ without figuring out exactly what it means will make action even harder.

Penn and Teller have a great skit on why some aspects of the ‘green’ movement are ‘bullshit’ as they like to say. This skit really gets to the core of the issue regarding the definition of the word and how the lack of definition spurs actions that are not useful and pretty stupid.

If you have time, watch the whole thing, it’s pretty good. The clip that starts at 13:25 highlights how environmentalists are taking advantage of a lack of definition of ‘green’ with carbon credits.

Reason #4: The word polarizes people, and it shouldn’t.

The last reason I hate the word ‘green’ is that the word divides people politically. No one wants dirty air, water, cancer or a dirty environment. I understand that the debate is more centered around the best way to eliminate these things and not if they are bad themselves.

It needs to be remembered that environmentalism is a moral issue, like child labor, slavery, or having a 40 hour work week. So, when someone asks me if I mind paying a carbon tax I respond ‘hell no’ just like I don’t mind paying taxes for roads, education, and the ‘tax’ that is associated with an economy not based on slavery.

It can be easily argued that any of these issues (child labor, slavery) limits the productivity of an economy. However, we’ve made a moral choice to eliminate child labor and salvery and I would argue the economy is better because of it.

Helping the environment is no different. This is a moral issue, not an economic issue, but it will have beneficial economic consequences. It seems like it will hurt the economy but in the short run it will only lead to innovation and growth.

My question to you

I’m always interested to hear others’ opinion on this word.

Do you think green is a useful word? Why?

Do you use the word green? Why?

Tagged CSR, green, green washing |