Impact investing is small but rapidly growing. Currently it accounts for $50 billion globally, according to Bart Houlahan, Co-Founder of B Lab, a non-profit that helps entrepreneurs solve social and environmental problems. While this is a very small part of the capital markets, it is the most rapidly growing segment.

Investors assume impact investing means giving up profits. According to Jane Ambachtsheer, Partner & Global Head of Responsible Investment at Mercer, some investors and investment managers think impact investing means giving up profits and from a fiduciary point of view they are not allowed to do that. Data actually shows the opposite to be true. If you invested in the Global 500 companies in 2005 you would have a total return of approximately 40% by 2011. That’s not bad. But if you put your money in companies in either the Carbon Disclosure Leadership Index (CDLI) or the Carbon Performance Leadership Index (CPLI), your return would have been approximately 80%. Over this six year period, companies that devoted resources to managing their carbon delivered double the return to their investors than companies that did not. Doing good equals doing well. See more details in my article CDP Canada 2011: Key Highlights.

“Impact investing can provide good return on investment,” according to Julia Langer, Chief Executive Officer of Toronto Atmospheric Fund, a fund who has invested more than $50 million in local climate solutions and has helped Toronto save more than $55 million on its energy bills. “It’s not just about feeling good. But you need to know how to value it.” For more on how environmental, social and corporate governance (ESG) factors are valued by the financial industry, see my article Investment Bank, VC, Credit Rating Agency Talk Sustainability.

Investors don’t know how to value climate change risks in their portfolio. They either don’t realize or don’t know how to deal with the climate change related risks in their investment. If you hold stocks in BP or Shell, how much climate change related risks are there in those investments? Analysts at HSBC found those investments could face a loss in market value of up to 60% should the international community stick to agreed emissions reduction targets. The analysts found a massive over valuation of oil, coal, and gas reserves held by fossil fuel companies. This carbon bubble could lead to another financial crisis, according to Lord Nicholas Stern, a professor at the London School of Economics. His warning is supported by Citibank, Standard and Poor’s and the International Energy Agency. There is also arguably a water bubble in the market, says Ambachtsheer. Investors have exposure to these underlying bubbles but few know how to value them, or even know they exist. These resources need to be priced appropriately and knowledgeably.

Both Langer and Ambachtsheer think more people who are able to talk about impact investing issues should be sitting on investment committees so that they can conduct these dialogues knowledgeably. Increasingly, shareholders are filing proposals and resolutions to managements related to climate change, environment, and sustainability issues. I highlighted six examples in the article Investors Increasingly Concerned With Climate Change Risks.

There’s a language barrier between the sustainability and financial communities. For their part sustainability practitioners can help this cause by being able to talk in the language of investors. Houlahan of B Lab suggests that discussing impact investment using hard measures and common investment metrics would make it easier to move this discussion into the mainstream investment space, allowing analysts to directly compare impact investments to conventional investments.

Externalities continue to distort the markets. If the costs related to pollutions, health care, and other externalities resulting from fossil fuels are priced directly into the energy then we would have a “much truer economy,” according to David Martin, co-founder & general partner at Capital for Aboriginal Prosperity and Entrepreneurship Fund. Indeed, the International Monetary Fund found that Canadian governments spent $26 billion in 2011 subsidizing energy. That works out to be $787 of energy subsidies per year for each Canadian. (See: The Real Price We Pay for Fossil Fuel Energy) The U.S. figures are even higher: $4.7 trillion in total, or $1,611 per year for each American. This is a case where the public picks up the costs while the shareholders pick up the profits, says Martin. As more and more of our economy are owned by foreigners, these profits may not even stay within the country.

Regulations could promote progress. Eight countries around the world have implemented requirements for hatch funds and other institutional investors to disclose how they are addressing ESG factors, according to Ambachtsheer. “These regulations have been very effective. It forces the investment committee to talk about these factors and show us what they are doing. We wouldn’t tell them what to do but it would force them to put it on their agenda.” For public company disclosure requirements in Canada, see New Environmental Disclosure Guidance From Canadian Regulators.

The climate is bringing change to the way we should value our portfolio. Whether it is for financial return, doing the right thing, or both, we need to learn to adapt. Or as the President of Strategic Sustainable Investments Tim Nash likes to put it: Don’t let your money do what you wouldn’t.

Images: Green Living Show

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The release of the study by the International Monetary Fund (IMF) is widely covered by mainstream media around the world in the New York Times, Washington Post, Financial Times, and in a particularly good analysis from the Wall Street Journal. But it was strangely almost untouched by the Canadian media. I looked at the data in the full report (PDF), focusing on the Canadian portion. With additional data provided to me by the IMF Washington office, I was able to do some further calculations. The energy subsidies are higher than I expected. In fact, far higher.

What the general public is mostly unaware of is the prices we pay for energy are subsidized prices. When we pay $50 at the gas pump, the gas we got is actually worth more than $50. When we pay $100 for our hydro bill, the energy we used is actually worth more than $100. Why’s that? It’s because the government financially subsidizes the energy we use. They have been doing this for years. But most of the general public are not aware of this. The energy prices we consumers see are below market levels.

You might think: Isn’t that great? The government is paying for part of my gas! Let’s trace it backward, where does the government get their money to subsidize your gas? That’s from government revenues. Where does the government get their revenues? Mostly from taxes. The federal government of Canada gets more than 80 percent of their revenue from two sources: income taxes and consumption taxes (source: StatsCan). Who pay the government those incomes taxes and consumption taxes? That’s the taxpayers. You get the picture … it’s you. The gas you get from the pump is paid partly by you at the gas station. The other part of the cost is also paid by you, but indirectly through the withholding tax from your paycheque and through the GST you pay when you go shopping.

And this is the part I’ve always wondered: What’s the real price of the energy we use? Are the energy subsidies large or small? What’s the fully loaded energy price compared to the ‘sticker price’? This is a very complicated calculation as multiple levels of federal, provincial, and commercial players are involved. But thanks to the economists at the International Monetary Fund who did an extensive study on this subject, we now have some good data.

According to the IMF study and the additional data they provided to me, Canada spent $26 billion on energy subsidies in 2011. The Canadian government’s revenues were $665 billion in that year. In other words, 4% of the government revenues were spent on energy subsidies. (Note that the IMF calculation uses U.S. dollar, but the Canadian dollar was at virtual parity with the U.S. dollar over the year of 2011, with $1 USD equalled $0.989 CAD).

Let’s put these numbers into more relatable context. How much energy subsidies were made for each person? According to StatsCan the Canadian population was 33,476,688 in 2011. That works out to be a whopping $787 of energy subsidies for each Canadian for the year. This is a far higher number than I expected. On average each Canadian paid $787, mostly through our income tax and GST, for our energy in 2011 and probably a similar amount year after year. Remember, this is on top of the payments we make at the gas pumps and through our hydro bills. For a family of four, this amounts to over three thousand dollars per year spent invisibly on energy.

With this in mind, are fossil fuels really that much cheaper than renewable energies? The IMF cites many downsides to putting so much public money into subsidies and keeping energy prices—at least the ‘sticker prices’—artificially low, not least of which is giving the false impression to the general public that fossil fuels are much cheaper than renewable energy. Subsidies distort resource allocation by encouraging excessive energy consumption, artificially promoting capital-intensive industries, reducing incentives for investment in renewable energy, and accelerating the depletion of natural resources.

According IMF First Deputy Managing Director David Lipton, removing these subsidies worldwide could lead to a 13 percent decline in CO₂ emissions and generate positive spillover effects by reducing global energy demand. It would also strengthen incentives for research and development in energy-saving and alternative technologies. That’s the reason the IMF is urging governments the world over to reform subsidies for products from coal to gasoline, arguing that this could translate into major gains both for economic growth and the environment.

So next time you hear someone say they prefer fossil fuel to renewable energy because they are cheaper, tell them they have been paying $787 a year on top of their bills for those fossil fuels without knowing it.

Special thanks to the International Monetary Fund for providing additional data for these calculations.

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The Globe and Mail’s reaction: “Very strong on climate change … If you are a Canadian environmentalist, you can be glad in your heart. If you are part of the Canadian oil industry or the Canadian government trying to get the Keystone pipeline approved, not so good … It’s the kind of thing that might signal a negative decision on Keystone.”

I have cued up the video to start at 18:21 where the climate change portion starts. The text transcript follows (highlights are mine).

After years of talking about it, we are finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar – with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before – and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.

But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods – all are now more frequent and intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late.

The good news is, we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.

Four years ago, other countries dominated the clean energy market and the jobs that came with it. We’ve begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year – so let’s drive costs down even further. As long as countries like China keep going all-in on clean energy, so must we.

In the meantime, the natural gas boom has led to cleaner power and greater energy independence. That’s why my Administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.

Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long. I’m also issuing a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next twenty years. The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.

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What is this new cardboard box? Instead of using regular one-time-use cardboard boxes to deliver office supplies to their customers, Grand and Toy custom designed a reusable box they called the Boomerang Box. Once a shipment is delivered, customers save the empty Boomerang Boxes until they are picked up by Grand and Toy’s delivery staff at the next shipment.

The Boomerang Box comes in three sizes and features a stackable design to minimize storage space needs, while the sturdy, corrugated material allows the boxes to be reused for an average of six to 10 delivery cycles.

Each Boomerang Box has a unique barcode that allows it to be tracked throughout the shipping cycle. A customer can log in to their Grand and Toy online account page and see a dashboard display that tracks how many Boomerang Boxes they have received and how many they have returned. As we have learned from the ‘Mainstream Green’ study by Ogilvy & Mather, making results tangible to the end user is a key in motivating green actions. Allowing end users to easily track how many boxes they have used and returned helps drive positive actions. (See: 12 Ways To Turn Green Intentions Into Green Actions)

The Boomerang program’s pilot, launched in 2012 with 695 Grand and Toy Vancouver customers (representing 5,800 locations) and 23 BMO Financial Group locations in the Greater Toronto Area, was a success. Jim Johnston, director of environmental sustainability and compliance at BMO Financial Group, liked the results. “By partnering with Grand and Toy, we saw an innovative opportunity to reduce waste at many of our Toronto branches and offices. We look forward to expanding the program to all of our locations across Canada and the United States.” According to Kevin Edwards, Vice President Marketing at Grand and Toy, the pilot saved more than 46,000 one-time-use boxes.

In fact, the Canadian pilot was so successful that Grand and Toy’s US parent OfficeMax decided to try the same concept in the US with Boeing as the pilot site. The Boeing trial was also a great success and the Boomerang Box program is currently being rolled out in the US as well. (See: YouTube video)

I am seeing a trend clearly taking place in Canada that businesses are using sustainability to differentiate themselves from their competitors, especially in industries at risk of being commoditized. A few months ago, I wrote an article focusing on the commercial real estate industry in which Andrew MacAllan, Senior Vice-President & Managing Director of Oxford Properties, told me they don’t want to be in the commoditized business of renting out plain office boxes. Instead, they want to offer office space that can help their clients, such as RBC, to attract and retain talents, reduce operational and environmental footprint, and foster team collaboration. Oxford Properties want to use sustainability to differentiate themselves from their competitors. (See: Oxford Properties Building New RBC Headquarters)

Much like commercial real estate, delivering office supplies could easily be run like a commoditized business, but it can also be run as a value-add service that integrates with clients’ in-house sustainability programs. Rather than positioning themselves as plain stationary suppliers, OfficeMax and Grand and Toy show they want to play a role in helping their clients’ green initiatives, save operational costs, and reduce environmental footprint. The key is to understand your clients’ goals and partner with them to achieve those goals. It makes business sense. It makes environmental sense. And it helps form stronger client relationships. It’s a wonder the role a cardboard box can play in a business strategy.

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A few years ago, green start-up Intelligent Energy, the proud owners and developers of a world-class hydrogen fuel cell, faced a real challenge. The world was proving slow to grasp the potential of their technology, so they turned to an unusual source for help. Instead of asking an adman or management consultant about the best way to sell their cell, Intelligent Energy looked to a team of designers.

Over the following years, Intelligent Energy worked with their design partners to produce a compelling product application for their clean technology that would engage mass customers and business partners. The resulting ENV bike was the world’s first hydrogen fuel cell powered motorcycle—sleek, elegant and emitting nothing but pure water vapour. More importantly, this helped Intelligent Energy licence the technology to Suzuki, then later to others soon to launch fuel-cell scooters. TIME magazine called it “one of the most amazing inventions of 2005″.

Intelligent Energy’s example highlights a key way that design can help build a sustainable future—by helping cleantech succeed and scale-up. Great design helped the company turn raw technology into a useful and familiar product concept. It created something really new, imaginative and exciting that catches the eye. It helped make a new clean technology attractive to funders and investors, as well as for users and consumers: the two main audiences we need to win over in future.

Humanizing clean technology

The International Council of Societies for Industrial Design describes design as the “innovative humanization of technologies”, suggesting an important role in making new technology understandable and usable. Cleantech itself has a reputation of being too “techie” and impenetrable, which led green guru John Elkington to write in his book, the Zeronauts: “One of the missing links in this area, is the connection to consumers”.

This growth-threatening gap in the cleantech story, around humanizing the technology, is what design can help fill. This is about more than just consumers but about connecting cleantech to people. Operating as a bridge between technology and people, between production and consumption, designers are especially good at turning basic kit into winning products and meaningful solutions.

Compact fluorescent lamps, the most everyday of clean technologies, illustrates this well. Consumers initially rejected these energy efficient alternatives, not just due to additional expense but also because the new curly-bulb shape stuck out of their lamps. Today, the lamp’s design largely mirrors the incandescent bulbs they aim to replace.

Objects of desire for cleantech investment

One wonders how much design could help high-potential companies in the Guardian’s Cleantech 100. All these inspiring, early-stage tech companies are jostling for position in the race for scarce funding and resources and they will need to compete within and across sectors.

One cleantech investor once told me: “If you are an investor you see maybe 200 to 300 companies a year and invest in only three or four. It is about getting across immediately why them, why the technology, why the management team, etc.” Being incredibly clear on the commercial proposition at those early stages is life critical. Yes, there’s the business plan, a great management team and a proven technology, but great design could give a cleantech company the edge.

The economic case for design in business is well proven. High growth start-ups are more likely to embrace design, while shares in design-led business have outperformed the FTSE 100 by 200% over the last few years.

Green technology, great design

When cleantech by design works properly, the results can be amazing. One current favourite, spotlighted in the Cleantech 100 and the picture gallery of sustainable product design, is Nest, the learning thermostat. It’s smart, beautiful and cool to use. You program it to meet your daily energy needs, then it learns and adapts to your behaviour, even switching off when you’re away.

The automotive sector uses design well to mainstream its clean and green technologies. The success of the breakthrough second generation Toyota Prius was attributed as much to design, which simply made the hybrid vehicle ‘normal’, as much to any technological factor. Tesla gets this intuitively too, via the sleek design of the soon-to-be-launched Tesla Model S electric-powered family sedan.

Even renewable micro-generation can benefit from great design. How much of Quiet Revolution‘s success is down to the effectiveness of their turbines in comparison to their great design and branding? While Solar Century’s C21 integrated solar tile design means you avoid lengthy planning applications for roof installation.

Designing for cleantech success

I’m not saying design is a substitute for other ingredients essential for scaling up cleantech, such as the right financing structures; an injection of investment; favourable policy signals; and better green public procurement, etc. But design can help cleantech in the same ways it did with the digital technology revolution at the turn of the millennium. Don’t forget that an iPod is little more than a wearable hard-drive with great branding, product design and user interface.

From a broader view, cleantech is perhaps the most exciting tech revolution of the 21st century and our future survival—economically and environmentally—may rest heavily on these new green and clean technologies.

At the moment though, I don’t see the cleantech sector turning to designers en masse; or see the design industry getting behind cleantech in anything like the way they should It’s a missed opportunity either way.

Photographs: PR

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Scheduled for completion in the third quarter of 2014, the new national headquarters for RBC, named RBC WaterPark Place, is located in Toronto’s waterfront between Bay and York Streets on the north side of Queens Quay West, just south of the Gardiner Expressway (Google Map). With its advanced systems for deep lake water cooling and air circulation, window glazing, and advanced plumbing and lighting features, the new building being developed by Oxford is expected to be the first LEED Platinum office tower in Toronto.

While everyone likes a new building, RBC builds their new headquarters with specific business objectives in mind: attract and retain talents, reduce operational and environmental footprint, foster team collaboration, and further their corporate social responsibility. How does an office building help these business objectives? How can a property developer help a corporate tenant with these goals? I find out by talking to Andrew McAllan, Oxford Senior Vice President and Managing Director of Real Estate Management, and Nadeem Shabbar, RBC Vice President of Corporate Real Estate.

As Canada’s largest bank, RBC has many office buildings in Toronto. When the new headquarters open, three of their existing downtown office buildings will relocate to the new one. Bringing staff together into one building is expected to foster more collaboration. But RBC goes one step further. Staff in the new building will interact with each other more closely through what RBC called the ‘Reflection’ floor layout. And this is where office tower developer Oxford Properties enters the collaboration. The floor plan along with its lighting and air circulation systems are custom designed for the Reflection layout.

The new floor layout is dominated by workstations surrounding the outer parts of the floor, each equipped with a desk and computer monitors. There will be almost no assigned offices or desks, even for senior level staff. Everyone can ‘check in’ through the computer self-serve reservation system for an available workstation of their choosing.

The result of this ‘musical chair’ system is that staff will regularly find themselves sitting next to people from other teams or departments. This helps foster cross-function group collaboration. I was told a small team working on a project can choose workstations next to each other.

Another result is that less floor area is needed for a given number of staff since staff on the road would not be occupying empty desks or offices. Smaller floor area means lower real estate costs, lower operational footprint, and lower environmental footprint.

Instead of storing their personal items at their desks or offices, staff can store items in assigned lockers. The entire floor is almost all open concept. The only enclosed spaces are the meeting rooms, all located at the centre core of the floor. The meeting rooms are all equipped with wall monitors. Staff can easily connect their laptops to the wall monitors without the hassle of dealing with projectors.

To implement these business strategies, RBC collaborates with Oxford to help custom design the building’s windows, lighting, and air circulation systems to facilitate this office plan.

Oxford Properties develops and manages many office towers in Toronto and has been championing green office buildings for both their lower operational costs and better employee engagement. ‘People want to feel that they are going to work in an environment that is more than just a sterile box,’ said Andrew McAllan, Oxford Senior Vice President and Managing Director of Real Estate Management.

A great employment experience may include bike racks, showers, composting program, special garbage handling, and smart air conditioning, all of which are found in many Oxford run office towers. Certain properties have green teams and green competitions between tenants. Some have dashboards in building lobbies that display live energy usage and environmental metrics.

As the anchor tenant of RBC WaterPark Place (flyover animation), RBC was involved from the early stages of development. This close collaboration allows Oxford to build more than a low-cost ‘box’, but custom design floor plans that facilitate RBC’s business strategies while providing high quality natural lighting and better air circulation at lower running costs. When completed the first LEED Platinum office tower in Toronto has a chance become a showcase of how a corporate building can bring sustainability, business strategies, and employee engagement all together.

Images courtesy of RBC

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The August 2012 supplement to the February 2012 Green Transition Scoreboard annual Global Green R&D Report (PDF) tracks more than $241 billion of investments companies are making in green R&D. Major investment in green R&D by large companies is evidence of a management bet on increasing revenues from consumers who are demanding green products. For smaller companies who are purely focused on green industry, these investments illustrate the tremendous growth opportunity in green sectors.

Multinationals Investing Billions Into Green R&D

Large multinational corporations are investing billions into green R&D. They’re not doing it for good PR; they’re doing it to enhance revenues.

Samsung is betting more than $21 billion on solar panels, LED lighting, and batteries for electric cars, expecting to earn more than $32 billion in annual revenues by 2020.

Since 2005, General Electric has been investing $1 billion per year into their Ecomagination initiative. The gamble has paid off well, generating $18 billion in revenues through 2010 and becoming so profitable that GE is doubling down, earmarking $2 billion (PDF) per year for green R&D through 2015.

Carlos Ghosn, CEO of the Nissan/Renault alliance, is also seeing the potential to profit from the growing green economy. He believes that electric cars will make up 10 percent of global auto sales by 2020, and is investing €4 billion to ensure that his company gets a large share of the market.

Growing Group of Smaller Green Tech Companies With A Global Reach

There is also a growing group of smaller companies that focus solely on green technologies.

Some of the pure plays are on companies that promote energy efficiency for the end user, such as Owens Corning and Cree Inc., which are producing the next generation of insulators and efficient LED lights.

Utilities are getting smarter at energy delivery, and there are plenty of firms like Maxwell Technologies that are designing ultra-capacitors that optimize energy storage and power delivery, and like Elster Group that delivers energy management solutions to measure and control the flow of water and electricity.

Finally, there are renewable energy technology firms, like First Solar, Yingli Solar, Vestas and Natcore, that are innovating more cost-effective ways of producing energy from the sun and wind.

Research & development investments are key drivers growing the green economy. They are resulting in new products that meet human needs, while minimizing the impact on our natural environment. Significant investments in green R&D symbolize that a company has integrated sustainability into their core strategy. They serve as a strong indicator for investors who are betting on increasing consumer demand for green products.

The green transition is happening at an extraordinary rate. Investors seeking growth opportunities should take note, and consider companies that are positioning themselves as innovators in this space.

Full disclosure: Co-author Henderson is invested in CREE, FSLR and NXT.CA.

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Eight-nine per cent of Ontarians feel their communities would benefit environmentally and economically by incorporating green alternatives, according to a new survey conducted by Research House. Green product manufacturers and suppliers may look into upcoming community development projects such as public parks and community centres for potential collaboration opportunities.

The April 2012 survey focused on Ontario consumer perceptions around creating greener communities, and what cities and developers could be doing to foster the development and implementation of green building products.

To create greener communities, Ontarians feel that local municipalities should take action to foster the development and expand the use of innovative eco-friendly products in Ontario. According to the survey:

• 96 per cent of respondents feel municipalities could do more to ensure shared community spaces such as parks and recreation centres incorporate environmentally friendly products.
• 94 per cent also agreed that new residential and commercial developments could include more green products, such as eco-friendly roofing and patio solutions.
• 93 per cent feel companies should make greater investments in the research and development of environmentally sustainable building materials.
• 83 per cent of respondents feel investment in green building and product solutions is just as important as investing in major healthcare, military and technology sectors.

The survey was conducted in March by Research House over the phone with one thousand adult Ontario residents on behalf of Ontario Tire Stewardship. The regions surveyed include the Greater Toronto Area, Central Ontario, Western Ontario, Eastern Ontario, and Northern Ontario.

“Factoring environmental sustainability into our business practices, and the community spaces we share and the products we use every day isn’t just a trend. It’s a necessary, everyday consideration that extends beyond World Environment Day, to preserve our environment, health and the livelihoods of future generations,” says Andrew Horsman, Executive Director, Ontario Tire Stewardship.

“Addressing this shift, Ontario has an ambitious Used Tires Program that focuses on the environmental and economic benefits of responsible tire recycling, and investment in research to create innovative tire derived products in Ontario.”

Western Ontario was found to be slightly more likely than Eastern and Central Ontario to agree that investing in sustainable solutions is just as important as investing in other sectors such as technology, military and health care, while the Greater Toronto Area is at the average.

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When I got the card from Walmart, I thought it looked a little unusual as the paper has bumps all over its surface. It reminds me of decorative art paper from specialty art stores. On the back side is instruction on how to grow the card. It is really quite simple, essentially:

• Tear the card into pieces
• Bury the pieces in a pot filled with soil
• Add water

I have not grown mine yet. But I love the card so much that I asked Walmart for the name of the card manufacturer, which turns out to be a Canadian company called Botanical PaperWorks. According to their web site, the seeds embedded in the paper will germinate and grow into a plant of flowers, herbs, or vegetables, depending on the seeds used in the paper. And the paper composts away in the soil. “Plantable paper is a biodegradable eco-paper that is made with post-consumer materials (no trees harmed for this paper!) and embedded with seeds.” You can see several photos of what the grown plants look like at Botanical PaperWorks’ web site.

In addition to a green environmental message, I also feel a card that grows conveys a sense of development, progress, nurture, and a promising future … perfect for sending out to clients. (Disclaimer: I have no relation with the card manufacturer.)

Photos by Carbon49

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While some ‘green’ businesses do little more than changing light bulbs and focus on greening their reputations, TD Bank take a long term view and green themselves slowly and steadily from the inside out. In this exclusive interview, TD Chief Environmental Officer Karen Clarke-Whistler explains how this long term approach is applied to real estate management and energy conservation.

TD is the second largest bank in Canada and sixth largest in North America. Their long term goal is to embed environmental thinking into all aspects of the business (see How to Embed Sustainability Into Corporate Culture), from internal operations and supplier relationships, to lending practices and investment (see TD’s views on asset management and sustainability). An approach to reach that goal—which I find very commendable—is to gain the knowledge internally first and then spread the best practices outwards. This approach is used in their current program on net-zero energy building. This is an ambitious challenge to retrofit or construct buildings like their bank branches to consume the same amount of energy that they produce.

With more than 1,100 branches in Canada and 1,250 branches in the U.S., TD operates a lot of buildings. Like other financial institutions, buildings are where much of the energy is consumed and therefore much of the carbon footprint is generated. And that is where lessons on energy conservation in buildings can be learned and best practices formed before the knowledge is applied to TD’s real estate lending practices and spread to their clients.

How does TD learn about net-zero energy building? As Karen Clarke-Whistler tells me, they put substantial resources into constructing two pilot branches. “Our first step is to construct a new build in Fort Lauderdale to test out the concept. This was built to LEED platinum standards and began operation in May 2011. However, most of our existing facilities require retrofit. Our 25-year-old London, Ontario branch is the pilot for retrofit.”

The two sites allow energy performance data to be collected under two different climates. A number of other factors were also considered. “We selected the London location by first identifying the TD sites across Canada that would be able to house the amount of solar panel capacity needed. We then looked at which of those sites had the ability to include a community focused component, such as an amphitheatre. Finally, we considered how power may be connected to the local utility’s electrical grid.” (See Solar System: Performance, Income, Payback Period.)

The retrofit system in the London branch began operation in October 2011. It has a ‘Green Energy Park’ available for the public to use. The local school next to the park can use the amphitheatre in the park to learn about sustainability. TD also provided the school with TV monitors to allow students to track the power generated by the solar panels (similar to how LoyaltyOne displays their solar power meters in their staff room).

The knowledge gained from the pilot branches will be used in other facilities. “We are assessing the pilots for performance. TD’s in-house architects will use this experience to develop our internal green building design standards which are used for building our facilities and learn how to scale these best practices for our operations.” In the future, the knowledge may be used in TD’s real estate lending practice and help clients make greener buildings themselves.

TD, who is part of the United Nations Principles for Responsible Investment Initiative (UN PRI), takes a long term and large scale approach to going green. Looking back, TD reached carbon neutral in 2010. At that time, TD was the first North American based bank and among the few banks in the world to reach that status. These days more and more financial institutions declare reaching carbon neutral, which is great. But many reached the goal primarily through purchasing carbon offsets. In 2010, 51% of TD’s carbon footprint was neutralized by carbon offsets. It is encouraging to see TD, who just released their 2011 Corporate Responsibility Report, did not rest there but are investing significant amount of time and resources to learn how to lower their long term energy consumption and greenhouse gas emissions. The learning from the net-zero energy building program should help TD reduce their greenhouse gas emissions further and therefore reduce the need to purchase carbon offsets in order to achieve carbon neutral.

Deep learning does take more time than changing light bulbs. TD devotes the time and resources to do it right.

Images of TD Fort Lauderdale branch used with permission from TD.

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