GREEN INNOVATION& DESIGNFINANCIAL TIMES SPECIAL REPORT | Thursday September 16 2010

InsideClive Cookson looks athow companies suchas Riversimple withits two­seat carpowered byfuel cells arethinkingaheadPage 4

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Big namessee whichway the windis blowing

Sustainability is now the keydriver of innovation. So pro-claimed three prominent busi-ness thinkers – CK Prahalad,

Ram Nidomolu and MR Rangaswami –in the Harvard Business Review a yearago.

“In the future, only companies thatmake sustainability a goal will achievecompetitive advantage,” they warned.“That means rethinking business mod-els as well as products, technologies andprocesses.”

Rethinking products and businessmodels requires huge effort, and inputfrom all parts of a company. As theauthors note, it is a process that caneasily take a decade to achieve. Yet inresearch covering 30 big companies,they found that the decision to “green”a company’s products and servicesquickly became a “motherlode of organi-sational and technological innovationsthat yield both bottom-line and top-linereturns” – even in the midst of a reces-sion.

Green innovation has been one of themost striking trends in business in thepast five years, with a variety of bigmultinationals and household namesreshaping their businesses along greenprinciples.

One of the first was General Electric,which with much fanfare in 2005launched its “ecomagination” initiative.The company put all its environmentalgoods – energy-efficient lighting, windturbines, eco-friendly paints and manymore – under a single “ecomagination”brand, and pledged to increase the valueof the portfolio, and to pour researchand development dollars into it.

GE has come under some criticism forincluding products in the brand thatsome do not regard as green, such asnuclear power technology and fossil fuelpower components that qualify becausethey are more energy-efficient thantheir predecessors. However, it has con-tinued to expand the product range.

Competitors were swift to follow.Philips announced it too would separateout the revenues from its green prod-ucts, including energy-efficient lighting,and that they would account for a risingproportion of the company’s revenuesand profits. Siemens has been increas-ing the value of its green product portfo-lio, including wind turbines.

In part, companies are responding toexternal pressures. In many regions,including the European Union, the US,China and Japan, companies are facingincreasing environmental regulation.They are also under pressure from con-sumers, civil society groups, and a smallbut growing – and increasingly vocal –chorus of well-organised investors whodemand higher green standards.

However, the financial crisis and

recession have exerted very differentpressures on companies. With the focuson survival and protecting profits andrevenues, many have been less keen totrumpet their environmental creden-tials.

That does not mean the issue hasgone away, however, says SolitaireTownsend, co-founder of Futerra Sus-tainability Communications. “I wouldsay the opposite, in fact – we’re seeing alot of interest in green product innova-tion from big companies.”

She points to Unilever, which thisyear announced an initiative to focus ongreening its vast product portfolio.“Unilever realised that if it wanted todecouple its economic growth from itsemissions, it had to make products thatwould reduce consumers’ environmen-tal footprints – and that this was not anice-to-have, but the only availableoption,” she says.

GE also recently launched its“Ecomagination Challenge”, which itcalls an “innovation experiment”. Inconjunction with several venturecapitalists, it is offering $200m for ideasthat would revolutionise the power grid,renewable energy, and energy in build-ings.

In the past few weeks, Sony has alsojoined in, inviting designers and inven-tors from all over the world to come upwith ways to “repurpose” existing tech-nologies to solve environmental prob-lems. Setting up its Open Planet websitein early September for people to submittheir thoughts, the company explained:“We’re not looking for ideas for buildingenvironmentally friendly new products.Instead, we’re looking for unusual,incremental or radical new applicationsthat use existing technologies to tackleenvironmental issues.”

“To have such big companies doingthis is serious stuff,” says MsTownsend. “These are very big compa-nies who are putting very big budgetsinto this. It is not about the little quirkygreen toys that some companies werecoming up with a few years ago – thesolar backpacks and so on, that are nicebut don’t really get to the root of greeninnovation.”

This evidence of growing involvementfrom big companies in green innovationdefies those who predicted that therecession would put an end to environ-mental initiatives, she says.

Perhaps this should not be surprising.

Governments’ environmental regula-tions are still in place, and the financialimplications of greening companies stillhold good. These can be benefits to –rather than a burden on corporations’bottom lines, according to the HBRarticle.

One area of concern to Ms Townsendis smaller companies. “My worry is thatsmall businesses, for whom innovationis high risk and high effort, are the oneswho are going to be feeling the pinch intheir research and development,” shesays. “That could suffer in the reces-sion.”

This could prove to be a problem in

the future. Small businesses are one ofthe most important sources of “sustain-able innovations”, according to KatieWebber, campaign director of the May-day Network, a coalition of businessesbrought together by the Prince ofWales.

For companies seeking ideas on howto redesign their products and services,the most valuable resource could betheir own staff, says David Grayson,professor at the Doughty Centre for Cor-porate Responsibility at Cranfield.

He urges organisations to look for anew breed of “social intrapreneurs” –entrepreneurs within a big organisation– among their own ranks. “Engagingemployees is absolutely essential,” hesays. “If you support intrapreneurs inthe right way, you could see hugelyprofitable ideas come out of it.”

He points to companies such asGoogle, which allows employees to use20 per cent of their working hours asfree time. They can spend this on greenprojects that could benefit the companyin the future.

Marks and Spencer is another. Underits “plan A” initiative to reduce its envi-ronmental footprint, and those of itscustomers, the company offers grants toemployees to fund ideas that will fur-ther the programme.

“I’m not suggesting these methodswill work for all companies, but theyshow some of things that are possible,as a way of furthering innovation

within companies,” says Prof Grayson.Giving employees time to think, and

redesigning products will not be enoughin itself, however.

Ian Cheshire, chief executive of King-fisher, suggests businesses will have tothink more radically. He is encouraginghis executives to think of how busi-nesses services will evolve in the nexttwo decades. For instance, he says,whereas now retailers focus on sellinggoods that consumers take home andkeep, in future a more common modelcould be to rent goods, effectivelychanging their consumption model frombuying a good to buying a service.

Kingfisher has worked closely withEllen MacArthur, the yachtswomanwho has turned green evangelist. Shehas set up a foundation with the aim of“working with education and businessto inspire people to rethink, redesignand build a sustainable future”.

She says she is pleased with theresponse so far, but warns that compa-nies need to think beyond “green”labels. “I’ve met an encouragingnumber of chief executives and engi-neers whose work is guided by a realdesire for change.” says Ms MacArthur,

“And the conclusion I’ve come to isthat we should perhaps forget the col-our of the flag and think in a morecomprehensive, encompassing way, oras Michael Braungart [the green designguru] would say, encourage plain ‘good’business, not ‘green’ business.”

Fiona Harvey finds thatreshaping products andservices around sustainableprinciples is a business issuethat will not go away –despite the recent financialcrisis and recession

No sunset industry: wind power has a bright future but initial financing can be a problem. See article on Page 2 dreamstime

Five green indicators of material importance

Green design is a newdeparture for most compa-nies, lying outside their tra-ditional expertise.

The principles that gov-ern conventional productdesign – such as, does itwork, will it last, could it bemade any cheaper – all stillapply, but there are a hostof other considerations,from whether the raw mate-rials are ethically sourced,to what happens at the endof a product’s life.

There are five key envi-ronmental indicators thatcompanies need to keep inmind: cutting down ongreenhouse gases; energy;water; waste; and otherresources.

Designers should also beaware of any possibleimpact on biodiversity.

For instance, a campaignby Greenpeace recently ledseveral luxury goods com-panies to re-examine theirsupply chains, to ensurethey took no leather fromcattle ranches in the Ama-zon, where cows are raisedon land that was once rain-forest.

The best products andservices should tick severalof these boxes, says Soli-taire Townsend, co-founderof Futerra SustainabilityCommunications, whichadvises companies on theirenvironmental impact.

“If you have a productthat reduces energy use,but uses more water, that isnot good enough,” sheexplains.

Companies seeking thegreatest impact shouldfocus on products andservices that help reducethe environmental footprintof consumers, she advises.

“That is where the big winsare.”

This is borne out byresearch from Ricoh, whichfound that nearly two-thirds of the environmentalimpact of its products overtheir life cycle came fromtheir use, rather than theirmanufacture or disposal.

Designers of green goodsand services should “beholistic” – and iconoclastic,says Hugo Spowers, founderof Riversimple, a UK com-pany whose hydrogen fuel-cell cars are to be tested onthe streets of Leicester.

He says: “Designers andentrepreneurs of green busi-nesses have to go beyondjust the product itself andlook at the whole value net-work. You need to startagain from the bottom up,so that legacy constraintsdon’t terminally compro-mise the outcome.”

When designing thehydrogen car, the companytook nothing for grantedabout conventional car

design. Rather than evalu-ating components to seewhether they were lighteror more efficient, it exam-ined their place in thewhole system.

“Counter-intuitively, ifyou resist the temptationto compare componentsdirectly, you may chooseone that is heavier, more

expensive or less efficient,because it delivers a carthat is lighter, cheaper ormore efficient overall,” MrSpowers explains.

“The [conventional] carcompanies still start with ametal-bashing philosophy –some of them think that theanswer is to open the boot

of their existing models andslap in a massive heavy bat-tery. But, as the sayinggoes, ‘You shouldn’t startfrom here’.”

Breaking the mould inseeking new approachescould also mean smashinganother taboo and collabo-rating closely with rivals.

Greenpeace, for instance,helped to bring together agroup of companies, includ-ing bitter rivals Coca-Colaand PepsiCo, to find alter-natives to the use of damag-ing greenhouse gases inrefrigeration units. Inanother example of compa-nies forming unusual alli-ances, a group of UK retail-ers have banded together toshare delivery vehicles.

But companies shouldalso be prepared to dealwith other conflicts of inter-est, says Malcolm Fox,director of sustainabilityprogrammes at NSF Inter-national, which certifiescompanies’ environmentalcredentials.

He notes that designing agreener version of a productcan cannibalise a com-pany’s sales, or create rival-ries within the business.

There are ways roundthis. Mr Fox says: “Greenversions [of products orservices] are often designedin response to tangible mar-ket demands – it’s easy tosee the benefits of low-solvent paint or a moreenergy efficient refrigera-tor. These can command aprice premium that differ-entiates them without riskto existing product portfo-lios. Manufacturers can goto market with two prod-ucts and increase volumes.”

However, consumers canbe “sceptical” when theyencounter green alterna-tives to products, he warns.“Whether or not productsare seen as better, they arecertainly seen as different,and tend to attract anentirely new customer base– with all the uncertaintiesthat can entail.”

Tom Wagland, managerof the environmental groupat Ricoh Europe, adds thatcompanies looking to maketheir products more envi-ronmentally friendly mustpay close attention to the“end-of-life” phase – whenproducts are thrown away.

His company espouses the“cradle-to-cradle” modelpropounded by WilliamMcDonough, the US archi-tect and environmentalguru, and Michael Braun-gart, a chemist.

This is the idea that atthe end of their lifespan,products should be able tobe reused or recycled insome fashion into otherproducts of equivalentvalue.

The growing number ofcompanies using thisapproach must find waysnot just of reducing thewaste from their manufac-turing processes, but ofthinking beyond the prod-uct to what it could becomein the future.

Design principlesFiona Harvey onthe key points thatcompanies needto keep in mind

Pioneersdisplaytoweringambition

When Holger Giebel, chiefexecutive of Hanover-basedTimberTower, told his windenergy contacts he wantedto build turbine towers outof wood, they were scepti-cal. In an industry domi-nated by steel and concrete,the idea seemed bizarre.

“They were very suspi-cious and thought we werecrazy,” he says. “It seemedas inappropriate to them asusing wood to build a carengine.”

But when Mr Giebelexplained further, theybecame interested. Steelturbine towers are veryheavy and have to be trans-ported in large pieces onspecial vehicles. To fitunder motorway bridges,their diameter is limited to4.2m. This restricts theirmaximum height to 110m.

By contrast, wooden pan-els are relatively light andmodular, so can be trans-ported much more cheaplyon standard trucks, andonce on site used to buildwider, taller towers. Highertowers are more efficient.

“Every extra metre corre-sponds to an extra per centin revenue,” says MrGiebel. The first timbertower will be built overthe next few months inHanover with a turbinebelonging to VensysEnergy, which is based insouthern Germany andowned by China’s Gold-Wind. It will generate1.5MW of energy.

TimberTower uses spruceand pine, although mostwoods are suitable, so thecompany hopes the ideawill prove attractive in for-ested areas such as NorthAmerica and Scandinavia.

In addition to beinggreener to manufacture andtransport, each timbertower locks up 367 tonnes ofcarbon dioxide that wouldhave been released if thetimber had been burnt orthe tree had been left to rotor die.

The fact that Mr Giebeland his partners understoodwind power and worked inthe sector for 10 yearshelped establish credibilityfor TimberTower, he says.

“Lots of people in greenenergy have ideas aboutmaking the world a betterplace, but they have notthought of their potentialcustomers, and this is par-ticularly true of techies.”

Having the courage of hisconvictions also worked forAlex Berger, chief executiveof Johannesburg-based AAPCarbon, which has designedthe world’s first system toproduce clean electricityfrom waste gases at ferro-chrome smelting plants.

Production of ferro-chrome, which is used tomake stainless steel, tradi-tionally involves flaring offwaste gases into the atmos-phere. “Industry experts ini-tially thought our plan to

EnergyFrom wind powerto solar, new ideasare making asignificant impact,writes Jane Bird

Continued on Page 2

Designing a new,greener version ofan existing productcan cannibalise acompany’s sales

Spruced up: TimberTower’swooden turbine tower

Inside this issueInformation technologyMore innovation is needed to offsetthe growing use of computers, especiallyin China and India, writes Rod NewingPage 2

EducationSustainability is nowan integral part ofmany curriculums,says George ColePage 2

BuildingsOwners, architectsand contractors all

have a role to play in boosting energyefficiency, writes Dan Ilett Page 3

TransportRobert Wright finds thateverything boils downto basic physicsPage 4

LuxuryIt may not be a

necessity but anindulgence can still beproduced sustainably,writes Dan IlettPage 4

2 ★ FINANCIAL TIMES THURSDAY SEPTEMBER 16 2010

Green Innovation & Design

Pioneersdisplaytoweringambition

ContributorsFiona HarveyEnvironment Correspondent

Clive CooksonScience Editor

Robert WrightTransport Correspondent

Jane Bird, George Cole,Dan Ilett, Rod NewingFT Contributors

Andrew BaxterCommissioning Editor

Steven BirdDesigner

Andy MearsPicture Editor

For advertising details, contact:Liam Sweeney,Tel +44 (0)20 7873 4148,Fax +44 (0)20 7873 4006,E­mail liam.sweeney@ft.com

capture and clean this gas togenerate electricity was tooambitious,” says Mr Berger.

The doubters were worriedabout waste gas impurities, stor-age, safety, expense and fluctua-tions in supply. But AAP Car-bon gained financial backing forits system, which is customisedto the ferro-alloy industry andeliminates the need for storage.

Its first implementation willbe switched on shortly at Inter-national Ferro Metals in Buffels-fontein, South Africa.

To generate electricity, thesystem uses internal combus-tion engines developed by GEJenbacher of Austria. With acapacity of 17MW, it does theequivalent of capturing 160,000tonnes of CO2 a year or taking45,000 cars off the road.

The new system will generate140,000MW hours of electricity ayear — about 12 per cent ofIFM’s overall energy consump-tion – helping ensure continu-ous operation in a region whereelectricity supplies are unrelia-ble.

AAP Carbon is designing asimilar system for Tata Steel’sRichards Bay smelting plant,and hoping to sign up furthercustomers in South Africa,which accounts for more than60 per cent of global ferro-chrome production.

In the UK, Martin Wright,managing director of Bristol-based Marine Current Turbines(MCT), has fought hard to wincredibility for his tidal powertechnology and has raised some£38m funding, of which about£7m came from government.

Tidal power has the advan-tage of being more predictablethan wind and is more energy-efficient, says Mr Wright. Thecompany’s 1.2MW SeaGen proto-type tidal turbine is feedingelectricity into the grid inNorthern Ireland and can sup-ply the needs of 1,500 homes.

It is “on the cusp of commer-cialisation,” but will need up to£30m more to become fully com-mercialised, Mr Wright says.“Otherwise, it will wither on thevine.”

To achieve this, he says, gov-ernments should create incen-tives for energy companies tobecome customers. “Subsidiesare not necessary, but govern-ments should use their legisla-tive powers to create a market.”

This would let investorsunderstand the level of risk anddecide how much capital todeploy.

“It’s no good expecting some-thing just out of the eggto be massively capital-efficienton day one,” says Mr Wright.“But the single most importantthing is that there has to be amarket.”

Even the relatively developedsolar market is not yet fullycommercialised. While solarpanels are cheap to maintain,installation is labour-intensiveand expensive.

Dow Chemical has received$20m of US government fundingto develop a roof tile, or shingle,that is “intuitive and straight-forward” enough to be installedby existing roofers.

The shingle, which is in pilotproduction in Michigan, isdesigned for the US. RusselMills, Dow’s global director ofenergy and climate changepolicy, acknowledges that itmay not suit countries withdifferent climates and construc-tion methods.

Once US sales of the shinglehave taken off, Dow will look atadapting it for other markets.

But as with all renewableenergy, the challenge is bring-ing the cost down, says MrMills. “Whether green or brown,it looks exactly the same to theconsumer, so it has to be pricedcompetitively.”

Despite progress, coal willcontinue to be by far the world’sbiggest source of fuel for at least20 years, he says.

Continued from Page 1

Design schoolsaim to makeenvironment amatter of course

If tomorrow’s products are to bedeveloped with sustainability atthe core of their design, today’sstudents need to be educated inits importance.

Many design institutions havemade sustainability an integralpart of their curriculums, butthere is still some way to go.

In 2007, Mariano Ramirez, anindustrial design lecturer at theUniversity of New South Wales,Australia, published the resultsof an online survey of industrialdesign course leaders from 221schools around the world. Morethan half the respondents (52per cent) reported that sustaina-ble design courses were compul-sory or core subjects in theircurriculum.

Mr Ramirez concluded thatthe results sent “a strong mes-sage to industry that moreindustrial designers are graduat-ing with an increased awarenessof their responsibilities to theenvironment and to society”.

One in five industrial designstudents graduating from DelftUniversity of Technology in theNetherlands specialises in sus-tainability. Han Brezet, head ofthe design for sustainabilityresearch programme at Delft,says it is important that stu-dents “learn that there is not anendless amount of energy, mate-rials or space in the world”.

“The importance of sustaina-bility is stressed early on in ourcourses,” says Conny Bakker,assistant professor at Delft’sdesign for sustainability pro-gramme. Third-year studentsalso have the option of doing asix-month sustainability project.

In the UK, the Design Schoolat Loughborough Universitycovers sustainability in its first-year core module. Students areencouraged to take a life cycleapproach to design – for exam-ple, can a product be reused, orelements of it reused or recy-cled?

Vicky Lofthouse, senior lec-turer in industrial design, says:“The development of corporatesocial responsibility has seensustainability being linked tobusiness strategy. We tell ourstudents that their job prospectsare affected by this strategy –you can’t afford to ignore sus-tainability.”

UWIC – the University ofWales Institute, Cardiff –removed an environmentaldesign module from its architec-tural design course. “We wantedto reflect the fact that all build-ing design must be consideredfrom an environmental angleand that it’s wrong to see it as aseparate design approach,” saysNick Evans, senior lecturer atUWIC’s architectural design andtechnology department.

UWIC’s students also exploreethical issues, analyse case stud-ies and conduct exercises onsustainable design. Mr Evanssays students are assessed ontheir ability to use sustainabledesign intelligently. “It’s notjust about putting a wind tur-bine on top of a house – we’renot interested in designs thatsimply include eco-bling.”

John Currie, director of theScottish Energy Centre at Edin-

burgh Napier University, sayshis institution introduced anenergy engineering course in1980. He notes that manyaccreditation bodies insist thatsustainability is a core compo-nent of design courses. “Design-ing for sustainability is anessential part of the job,” hesays.

At Brunel University, sustain-ability is a compulsory topic forfirst-year design students andan optional module for final-year students. “We want stu-dents to develop their own per-sonal and ethical position onsustainability, and draw on thiswhenever they design,” saysDavid Harrison, design profes-sor at the school of engineeringand design.

Teaching resources on sus-tainability have been developedto help institutions cover thetopic in depth. Tracy Bhamra,director of research at Lough-borough’s Design School and MsLofthouse have produced theToolbox for Sustainable DesignEducation, a series of modulesfor engineering and designcourses, available online.

The Industrial Designers Soci-ety of America (Isda) publishesOkala, a 72-page document oneco-design for designers anddesign students. Okala (whichmeans “life sustaining energy”in the indigenous Hopi lan-guage) has been produced bySteve Belletire, an industrialdesign professor at SouthernIllinois University, Carbondale;Louise St Pierre, an industrialdesign associate professor at theEmily Carr Institute of Art and

Design in Vancouver; and PhilipWhite, an assistant professor atthe School of Sustainability inArizona State University.

More than 7,000 copies ofOkala have been distributedworldwide. “It’s essential thatsustainability becomes part ofthe design student’s DNA,” saysMr Belletire.

Sustainable design educationhas come a long way, but prob-lems remain. Lesley Morris,head of design skills at the UK’sDesign Council, says: “Weshould be teaching sustainabledesign from the bottom-up, andthat means in schools. There,you are not only reaching thedesigners of the future, but theconsumers of future designs.”

The Design Council runs anEco Design Challenge forschools. Martin Charter, direc-tor of the Centre of SustainableDesign in Farnham, southernEngland, says students shouldbe encouraged to create sustain-able design concepts for the realworld. “A wooden computer isinteresting, but how commercialis it? I think there’s still anissue about what’s being taughtin design schools.”

Mr White at Arizona says:“We can’t ignore the social sideof sustainability, but this isproving difficult to define andmeasure.”

Even so, Mr Belletire is opti-mistic, and says: “I believe thatin 10 years’ time, sustainabilitywill be an integral part of everydesign curriculum around theworld.”

EducationSustainability is nowan integral part ofmany curriculums,writes George Cole

Good ideas can overcomechallenges to win funding

Life is much tougherfor entrepreneurs withinnovative green ideasthan for their counter-

parts in other new sectors,because their projects takelonger to become commercialand cost more money.

Moreover, the industry is sur-rounded by complex, evolvingregulation. And the numerousgovernment initiatives and poli-cies aimed at stimulating green-tech development sometimesdistort the market.

While a digital media com-pany could expect to achieverevenues within a year onstart-up funds of €5m, a typicalgreen-tech venture would needmore than five years to generaterevenues and €50m, says Chris-tian Reitberger, general partnerat Wellington Partners, a pan-European venture-capital firm.For wave or tidal power it couldbe 10 years and €100m.

Despite this, seed capital isavailable for good green ideas.“It’s a myth and an unjustifiedlament that business angelsonly provide €500,000 start-upfunding – they have shown theycan raise €5m by joining forcesin consortia,” Mr Reitbergersays.

In the US, start-up funding of$50m is not unusual. On theother hand, the regulatory cli-mate is unhelpful, says RonNorman, a member of PA Con-sulting’s energy capital marketspractice, based in Boston.

Green innovation in the US islargely driven by non-commer-cial priorities such as reducingunemployment. This twists anddistorts the market, he says.

“The energy industry has highcapital costs and long time-horizons, whereas near-term jobprogrammes are the antithesisof this, coming and going witheconomic events and politicalwhim.”

States such as Texas havechosen to build wind energyplants in areas of high popula-tion, which might bring short-term construction job gains,whereas in the long term theplants might be better locatedelsewhere.

In California, legislators facepressure to postpone laws man-dating the reduction of green-house gases because of publicprotest at extra fuel costs at atime of high unemployment.

US government policy alsodictates percentages for differ-ent forms of renewable energy.But rather than focusing on try-ing to pick winners, Mr Normanadvocates a regulatory environ-ment similar to the acid rain“cap and trade” programme ofthe 1990s.

This created a set of long-standing rules enabling indus-try to invest efficiently and themarket to respond, he says.“Unfortunately, that’s not whatwe’re seeing today with lots ofissues round green technology.”

Large-scale government loansin the US have also had a seri-ous market-distorting effect. InMarch last year, California-based solar start-up Solyndrawas awarded $535m, and the fol-lowing June, Tesla Motorsreceived $465m to build an elec-tric vehicle. This has made lifedifficult for their competitors.

Europe has also had problemscaused by government interven-tion. In Spain, the withdrawal oflarge-scale subsidies for solarpower in 2008 brought an end tohuge growth. However, govern-ment feed-in schemes for solarpower in Germany, the UK,France and Italy have provedhighly successful.

Europe’s green-tech ventures

are outstripping the US inreturn on investment, accordingto the British Venture CapitalAssociation. Between 2004 and2008, the VC industry in Europehad three times as many 10-foldreturns on investments than theUS, and was significantly morecapital-efficient, it says. “Onaverage, a $100m exit in Europereceived $40m of VC financingcompared with $70m in the US.”

These results are even moreimpressive, given the fact thatEurope has fewer large-scalegroups to buy start-ups – effec-tively Siemens, Alstom andAreva, compared with numer-ous US corporations with deeppockets. This weakens the nego-tiating position and limits theoptions for European companiesseeking a trade sale or IPO.

The high return on invest-ment reflects the fact that Euro-pean ventures tend to be morecapital-efficient, with cheaperlabour and lower staff turnover.By contrast, bigger budgets ena-ble US companies to spend moreon marketing, says Mr Reit-berger. “The comparative fru-gality of European ventures is agood discipline that tends toguarantee efficiency.”

Another strategy adopted bystart-ups in Europe and the Mid-dle East is an incrementalapproach to fundraising. Israel-based EnStorage, which makesenergy storage systems, hasdone this – initially raising $2mand closing a further $15mround last April.

Entrepreneurs in Europe andthe US are continuing to sufferfrom the banks’ aversion to risk.

Chinese ventures do not havethis problem. Suntech, YingliSolar and Trina Solar haveraised up to three times theirrevenues in working capital,and are exploiting the advan-tage. “They are using theiraccess to debt as a competitiveweapon,” Mr Reitberger says.

The fact that fledgling compa-nies cannot show a track recordfor their technologies deprivesthem of access to working capi-tal. “This debt gap is a big prob-lem,” says Mr Reitberger. Other,non-infrastructure related tech-nology companies escape thisbecause the semiconductors orwireless technologies on whichtheir innovations are based arewell established, he says.

In countries struggling tocatch up with green innovation,complex international regula-tions such as the Kyoto proto-col’s Clean Development Mecha-nism can make life harder. Topresent their businesses in themost favourable light to inves-tors, they need to understandthe rules on carbon credit trad-ing units.

These can act as “deal sweet-eners”, enabling companies toaccess new sources of financeand making projects financiallyviable by reducing entry costs,says Johannesburg-based GlennHodes, head of Africa CarbonAsset Development, whichadvises green-tech ventures.

Sub-Saharan Africa is thefinal frontier for green innova-tion, and with only 3-5 per centof the global market in carboncredits, has historically beenslow to capitalise on its marketpotential, behind countries suchas China and Mexico, says MrHodes.

African entrepreneurs aregradually building their exper-tise in this area, he says. “Butbanks also need to gain a betterunderstanding of carbon financ-ing with successful examples, asthis would lower their percep-tion of risk.”

FinancingJane Bird looks athow green start­upsraise the capital theyneed to grow

Han Brezet:students mustlearn there isnot an endlessamount ofenergy ormaterials

Fledgling companiescannot show a trackrecord, which deprivesthem of access toworking capital

Powerful argument for cutting IT energy consumption

The information technologyindustry accounts for about 2per cent of global carbon dioxideemissions – about the same asthe airline industry. Althoughthe technology is increasinglypower-efficient, more innovationand design are required to offsetthe growing use of computers,especially in China and India.

“The focus on innovation hasled to a host of developments,through green ideas and exoticnew equipment,” says SumirKarayi, chief executive of 1E, apower management softwarevendor that claims to havecumulatively saved its custom-ers 4m metric tonnes of carbondioxide emissions.

He adds: “It has also sparkedthe redesign of technology andthe revival of old ideas that

have gained a new relevance toreduce resource use and cutgreenhouse gas emissions.”

According to The Greening ofBusiness, a white paper fromT-Systems, the IT services armof Deutsche Telekom, existingenergy-conservation approachescan nearly halve carbon dioxideemissions.

However, there is potential toreduce them by 75 per cent. Thiscomes from better use of servercapacity (35 per cent), optimis-ing cooling (20 per cent), moreenergy-efficient equipment (15per cent) and reducing data andapplications (5 per cent). Thisstill leaves enormous opportu-nity for innovation and design.

Computer processors arebecoming greener, as each gen-eration has smaller transistorsthat require less power. Also,manufacturers have movedfrom improving performance byraising the speed of their proces-sors, which increases energyconsumption, to using multipleprocessors, or “cores”, on thesame chip to share the load.

Power management has

improved and there has been ageneral move from power-hungry desktops towards lap-tops with long battery life.

“Globally, the number ofinstalled PCs is growing at 10per cent a year,” says Jim Tully,vice-president for electronics atGartner, the analyst, “but theirtotal energy consumption isonly growing by 0.9 per cent. Indata centre servers, you get amultiple benefit because proces-sors with more cores requireless cooling.”

He points out that although alot of attention is given to serv-ers and datacentres, govern-ments and regulators look ataggregate energy consumption.Gartner expects personal com-puters to consume 272 terawatthours of energy globally in 2010,against 136TWh for servers.

Nevertheless, the design ofdatacentres is receiving a lot ofattention. Datacenter 2020 isresearch being carried out byT-Systems and Intel, the proces-sor manufacturer, into designfor energy-efficient data centres,focusing on reducing power

usage effectiveness (PUE). Thisis determined by dividing theamount of power entering adata centre by the power usedto run the computer infrastruc-ture within it. It is expressed asa ratio, with overall efficiencyimproving as the quotientdecreases towards 1.

The annual average for PUE iscurrently 1.9. Reducing the fanspeed in the cooling systemreduced it to 1.55 and improvingcold and warm air isolation inthe room bought it down to 1.48.The project objective is toreduce it to 1.3.

Eric Woods, an analyst atPikeResearch, a clean technol-ogy market intelligence com-pany, points out that innovationis required to design more flexi-ble power and cooling equip-ment. “While IT servers mightbe replaced every three years,”he says, “the data centre infra-structure is expected to last 10to 15 years.

“As IT becomes more dynamicwith virtualisation and cloudcomputing, a new dynamic datacentre infrastructure is emerg-

ing that is more closely inte-grated with the IT assets it sup-ports, flexible in its deploymentand adaptable to rapidly chang-ing operational conditions – likea green data factory.”

As Mr Woods says, the overalldesign of computer systems ischanging rapidly. Virtualisationsoftware converts dedicatedcomputing equipment, such asservers and storage, into a sin-gle shared infrastructure. Thisallows spare capacity on physi-cal machines to be utilised,sharply reducing the number ofservers required.

The next stage is to use intel-ligent software, both on themachine and on the network, tomanage energy consumption bythe servers. Simon Mingay, vice-president for research atGartner, says: “It monitorsserver usage to see if it can turndown or turn off components,reduce processor speed or shutdown memory modules. It sub-stantially improves energy effi-ciency, particularly where aserver has a ‘bursty’ load.”

The final step in the new com-

puting architecture is “cloudcomputing”, in which multipleorganisations use a shared pub-lic infrastructure.

“It is not aimed at energy effi-ciency or being green, but hasthe potential to deliver order ofmagnitude improvements aboveanything we have seen so far,”says Mr Mingay.

Giles Hutchins, global directorfor sustainability at Atos Origin,points out that IT encouragesgreen innovation through col-laborative websites, such asEco-Patent Commons andGreenXchange.

Eco-Patent Commons is oper-ated by the World BusinessCouncil for Sustainable Develop-ment and enables several largecompanies to share their envi-ronmental patents.

Still in beta testing, Green-Xchange was set up by Nike,Best Buy and Creative Com-mons, a not-for-profit company,for community-based knowledgetransfer. “People can share pat-ents,” says Mr Hutchins, “tocome up with new ideas andnew green solutions.”

ComputingRod Newing findsthere is still plenty ofroom for improvement

Making waves: tidal power can take a decade to generate revenues AFP/Getty Images

FINANCIAL TIMES THURSDAY SEPTEMBER 16 2010 ★ 3

Green Innovation & Design

Retrofitting case study Gårdsten project, SwedenFor all the heritage and culturethat many of Europe’s buildingsembody, architects have realisedthey pose a problem for thefuture. They waste a lot of energyand heat. The regulations aroundlisted buildings are inflexible forretrofit projects and the materialsneeded to modernise them arestill too expensive.

But a project near Gothenburgin Sweden has bucked this trend.Gårdsten is a housing estate thatwas built for low­income familiesin the early 1970s. Beforerenovation, its residential blockswere dilapidated, and plagued bystructural problems and leaks.

By the late 1990s, 60 per centof tenants were unemployed andthe tatty estate had become ahotspot for crime. In addition, thedivide between ethnic groups waswidening.

“It was a slum,” says KatarinaAhlqvist, managing director ofGårdstensbostäder (GårdstenHousing), the public housingmanagement company in chargeof renovating the estate. “Therewere no companies or shops inthe area and there was garbageeverywhere.

“We had to start by giving

people hope for the future. That’swhy it was important to developGårdsten economically,environmentally and socially. Wehad to do that in conjunction withthe tenants – that’s why theproject has been successful.”

Today, Gårdsten looks and feelsvery different. The residentialbuildings are no longer concreteeyesores but modern blocks,complete with orderly lines of hot­water solar panels on their roofsand neat gardens that theresidents tend.

The entire estate runs onrenewable energy – a mixture ofwind and solar power. Eachtenant is given a discount on rentif they use less power or hotwater than allocated in their all­inclusive rental package.

The management company saysenergy consumption has beenfalling continuously, because of“a greater consciousness of theresidents. The individualmonitoring of each unit is allowingresidents to reduce theirhousehold energy consumption,with the incentive of savingmoney.”

The facelift included somestructural changes. A refit of

insulation and ventilation systemsled to almost all heat generatedbeing captured and reused.

The Gårdsten blocks are nowequipped with their owngreenhouses, energy­efficientutility rooms (designed foroptimum sunlight) and anaerobicdigestion units that turn rubbishinto biogas and provide compostfor the vegetable patches. Thelighting for common areas is allsensor­controlled.

“The project has created 1,300jobs over 14 years. But it’s veryimportant that we always see howwe will get our money back. Wehave to be very systematic aboutthat – and this way, you’ll alwayshave the tenants with you,” saysMs Ahlqvist.

The total cost of the initialrenovation was about €12m,which was part­funded by theEuropean Union and SwedishEnergy Agency.

“We did have financial supportfrom the EU, but we were workingwith several partners and thatlowered our infrastructure costs,”says Ms Ahlqvist. “Our partnersmade this much easier.”

Dan Ilett

Sustainability worries begin to hit home

Viewers of Star Trekwill have beentreated to a visionof a future contain-

ing sleek buildings thathouse bright corridors,thronged with people instrange robes. No one everworries about where theenergy comes from – thatproblem was solved longago.

Emphasis on such aclean, Utopian future is adistorted view of what thecoming decades are likelyto bring: a planet with 8bnpeople trying to live as com-fortably as possible withlimited resources andenergy supplies.

Almost 40 per cent ofenergy consumption can beattributed to buildings, theUS Department of Energystates. To address theseproblems, the constructionindustry has to make newbuildings more sustainable.But how will it achievethat?

“It’s our view that archi-tects know how to designefficient buildings; the chal-lenge is getting them builtto design,” says Peter Lacy,managing director of Accen-ture’s sustainability serv-ices practice. “Buildingowners, architects and con-tractors play a role in deter-mining building efficiency.All parties have incentivesto cut costs, so good designis rarely translated into thebuilding as built.

“A sustainable buildingwould be not only resourceefficient but have the low-est possible environmentalimpact through its life cyclethough design, construc-tion, use and demolition. Itwould be determined byproximity to mass transportand workplaces and helpoccupants live sustainablythrough its design.”

Some 41 per cent ofenergy used in buildings ison space heating, whilelighting and water heatingtake up 26 and 20 per centrespectively, according to

the US Energy InformationAdministration.

To balance these figures,architects in Scandinaviaand Germany have becomefond of an energy-efficientdesign standard calledPassivHaus – where a build-ing is so airtight that itrequires no central heating.It takes heat from everydayappliances and even thehumans who live in it. Thetechnology has been aroundfor 20 years.

When combined withsolar technologies for heat-ing water, buildings becomealmost self-sufficient, apartfrom the energy used forlighting and appliances.

But passive houses havetheir limits: “There is a dis-cussion on whether itshould be called ‘passive’ orjust ‘energy-efficient’,” saysMattias Westher, energystrategist for Poseidon, aSwedish property company.

“The risk with a passivehouse is that you get veryadvanced set-ups, so youneed a lot of control sys-tems. These are sometimestroublesome and can beexpensive.”

But the passive housedemonstrates that insula-tion remains one of the big-gest challenges in the hous-ing industry today, espe-cially for retrofits on oldhousing stock.

A study by McKinsey, themanagement consultancy,found that carbon emis-

sions in large cities couldbe cut by 50 per cent ifevery building was insu-lated properly.

Such evidence of leakybuilding stock highlightsthe fact that designing new,sustainable buildings isalmost an easier task thanretrofitting the old ones.

One of the biggest differ-ences between the old andnew is that sustainablebuildings are beingdesigned as part of the“smart grid” – an updated,digitised and networkedelectricity grid that man-ages energy demand andmakes better use of everyappliance.

Architects are designingbuildings and populatedareas as IT systems to pluginto the grid, to generatepower and make intelligentdecisions about when toswitch on and off.

For example, Panasonic’sEco Ideas House – a concepttechnology – works as onebig appliance, maximisedfor energy efficiency.

The building materialsare made from low-impactresources for maximuminsulation. Fuel cells, solarpower and batteries gener-ate and store power. Theseare linked to the electric-vehicle-charging infrastruc-ture, which could use thecar as an energy storagedevice.

LEDs light the Eco IdeasHouse at a fraction of theusual cost, while sunlightand natural wind coolingcan be controlled via thehome energy managementsystem.

“Of all the things thatneed to be worked on, themost important is thehuman-building interface,”says Paul Ruyssevelt, prin-cipal at Ruyssevelt Consult-ing, an energy managementfirm. “There are lots ofthings going into buildingsthat will make them morecomplex. So the interfacebetween people and build-ings has to improve enor-mously.

“There are some good sys-tems in the domestic sectorthat are self-learning. Ifyou’re too warm, you pressa button; if you’re too cold,you press another. It buildsyour profile. Some systemsare cleverer, in that theyinteract with the externalclimate but they need to bemore integrated into thebuilding to predict what thenext day might be like.”

Mr Ruyssevelt’s fear isthat rather than makingpeople more efficient,energy-efficiency technol-ogy will result in moreenergy being used.

“We need these manage-ment systems because his-tory tells us that with everyefficiency, we use moreenergy. We either deny peo-ple things or control thembetter.”

New buildingsOwners, architectsand contractors allhave a role to play,writes Dan Ilett

Flower power: once a slum, the Gårdsten estate has been transformed

Well insulated: a typical continetal European PassivHaus

Panasonic’s EcoIdeas House worksas a big appliance,maximised forenergy efficiency

4 ★ FINANCIAL TIMES THURSDAY SEPTEMBER 16 2010

Green Innovation & Design

New train of thought helps improve energy efficiency

It might seem odd to associatethe huge trains that carry ironore across Western Australia’soutback with concern for theenvironment. But RichardCohen, general manager of the1,300km of railways operated byRio Tinto, one of the biggestminers, in the Pilbara region,would love to take improve-ments in the environmental per-formance of its diesel-electriclocomotives a stage further.

At present, when each train’sthree locomotives apply thebrakes to a 33,000-tonne, 230-wagon laden train, the electricmotors on its six axles turn intogenerators, producing electric-

ity. The energy is dissipated byheating up banks of electricalresistors. If some of the electric-ity could be stored and used torestart the train, the saving infuel and carbon-dioxide emis-sions could be substantial.

The iron ore trains are anexcellent illustration of the chal-lenges all transport modes facein trying to improve theirenergy efficiency.

All boil down to basic physics.Environmental performanceimproves when the most effi-cient use is made of the fuelthat accelerates a vehicle; whenthe vehicle becomes easier toaccelerate; when the frictionthat dissipates momentum isreduced; and when the energygenerated slowing the vehicle isstored and reused.

The US’s General Electric,builder of the Evolution locomo-tives that form much of RioTinto’s fleet, has already takenone key step by overhauling its

engine design. Further designimprovements, such as a betterturbocharger and higher pres-sure pistons, have allowed GEto replace its 16-cylinder enginewith a 12-cylinder model produc-ing the same power. Fuel con-sumption has fallen by at least 3per cent.

The improvement echoessteps taken in both the carindustry and aviation, wherecomputer-assisted design ofpistons and turbine blades,and electronic control of fuelinjection, have substantiallyimproved the forward momen-tum extracted from each milli-litre of fuel. Modern marineengines consume far less fuelthan even relatively recent pred-ecessors, while some ships nowrecover and use the heat inengines’ exhaust gases.

Lorenzo Simonelli, chief exec-utive of GE Transportation, thelocomotive-building division,says the company is investing to

create the locomotives that willbe needed to keep rail competi-tive over the next 10 to 20 years.

“People have to get more onto rail,” he says. “It’s the rightthing to do – and it’s the modeof transport that’s most effi-cient.”

Rio Tinto’s diesels carryadded weight to prevent their

wheels from slipping. In trans-port modes where the mainweight is the vehicle itself, areduction in weight can be oneof the most effective means ofsaving energy.

The Boeing 787 Dreamliner islighter – and more fuel-efficient– than older airliners because it

uses composite materials farlighter than traditional alumin-ium fuselages.

Japan’s Shinkansen trainsconsume less energy than otherhigh-speed trains because theyneed less strong bodies and areconsequently far lighter.

Reducing drag from air fric-tion can also have a markedimpact. Germany’s Siemensclaims the redesigned nose of itsVelaro-D high-speed train willcut energy consumption by 10per cent compared with previ-ous versions.

The hulls of the E-Class shipsof Denmark’s Maersk Line – theworld’s largest container ships –are covered in a non-toxic paintthat stops build-up of barnaclesand other sea creatures fromincreasing the water drag on theships’ hulls.

Yet the biggest potential sav-ing for trains such as RioTinto’s – the harnessing andreuse of the power from braking

– has been unrealised until nowbecause of the technology’scomplexity. There has been anattempt on electrified railwaysin recent years to use more suchenergy by feeding currents gen-erated during braking back intothe overhead wire or third railfor another train to use.

The main problem is that,when no other train is accelerat-ing, rheostatic braking – as thebanks of resistors are known –is still required.

For non-electrified transportmodes, the challenge is fargreater – to produce a batteryrobust enough to surviverepeated cycles of charging anddischarging but light enoughnot to waste the energy savingsin the effort of dragging the bat-tery around.

While such technology isalready widely used in hybridcars, it is far more difficult tohandle the huge electrical loadsgenerated when slowing down

trains such as Rio Tinto’s. ButMr Simonelli says new invest-ments should ensure GE canproduce effective hybrid dieseland battery-electric locomotives.“We’re investing $150m insodium battery technology thatallows the hybrid to become areality,” he says.

Henry Posner, a US railwayinvestor, says that, even withEvolution locomotives’ fuel-saving levels, the small IowaInterstate Railroad which hecontrols was surprised to beable to justify buying new loco-motives because the fuel sav-ings would fund them.

It is hardly surprising, then,that Mr Cohen, running farheavier, more energy-intensivetrains says he is keeping inclose contact with GE about try-ing out the far more revolution-ary hybrid technology when it issufficiently developed.

“It’s something very interest-ing on our horizon,” he says.

TransportRobert Wright findsthat everything boilsdown to basic physics

Premium brands respond togrowing consumer awareness

A luxury is an indulgencerather than a necessity, sodemonstrating it is “sus-tainable” is no easy task.

“[Sustainable luxury] is,of course, an oxymoronbecause luxury essentiallymeans ‘not needed’, whichgoes against thinkingaround sustainable con-sumption,” says DorothyMackenzie, chairman ofDragon Rouge, a sustaina-ble branding agency.

“However, if oneconsiders a luxury isoften a superior ver-sion of somethingthat has a justifia-ble function, thenthere can be a casefor the concept of sus-tainable luxuries.

“In fact, many of the fac-tors that contribute tosomething being perceivedas a luxury can support amore sustainable approachto consumption.”

Ms Mackenzie argues thattailoring and craftsmanshiplead to an appreciation ofthe value of materials andthe skill in design and crea-tion. She says it creates adesire to use something fora longer period of time andhas more intrinsic meaning.

“We have to think of ‘lux-ury’ as being different fromsimply high-priced and pre-mium,” she says. “Sustaina-

ble luxuries could be rolemodels for a more sustaina-ble approach to consump-tion overall. Use lessresource and derive morevalue from it. Use things formuch longer and don’twaste anything.”

Consumers and non-governmental organisationshave put pressure on theluxury products industrythat it has never felt before.

Greenpeace now ranksthe top 18 technologybrands in the world on theirenvironmental efforts, forc-ing them to take note.

Luxury vehicles areranked by the same govern-ment carbon performance

statistics (and taxes) as anyother car – meaning per-formance and fuel economyare linked to brand status.

Luxury brands havestarted to react. The RangeRover – one of the world’smost luxurious and stylish4x4s, has long beenregarded as a gas-guzzling“Chelsea tractor” by envi-ronmental protesters. LandRover, the company thatmakes the car, hasresponded.

Earlier this year, VictoriaBeckham fronted a cam-

paign for Land Rover toshow off a lighter andsmaller version of theRange Rover – the Evoque.The company says this willhave a front and four-wheeldrive option that will emitabout 130g per kilometre ofcarbon dioxide and achievemore than 58 miles per gal-lon on the 2.2 litre engine.This compares with CO2output of 299g/km and 25mpg on the 2002 2.9 litreRange Rover.

“There is a move awayfrom pure indulgence tomuted signs of intelligentpurchase around design,engineering and sustaina-bility, so we are responding

to that,” says PhilPopham, managing

director of LandRover.

“Our aspira-tion is to bebest in class onoperations andcustomer prod-uct against [our]

competitor set by2018. To achieve

this we’ve set somevery challenging targets,which involve engaging ourworkforce to deliverthrough a programmecalled ‘environmental inno-vation’. Yes, the brand ben-efits but this is about beingresponsible and future-proofing our business.”

But how do you define“responsible” or “sustaina-ble” actions? The terms arelargely open to interpreta-tion, as few globally andlegally binding standardsexist, making it difficult tovalidate such claims. As a

result, industry associationsare responding to theirmembers’ needs and havestarted to interact with theNGOs to build frameworksfor sustainable and ethicalproduction.

For example, the WWFrecommends that jewelleryconsumers seek bench-marks or goods validated byorganisations such as theResponsible JewelleryCouncil and the Frameworkfor Responsible Mining.

“Some luxury brands areclearly aiming to adoptresponsible and ethical rawmaterial sourcing policies,such as De Beers avoidingconflict diamonds andBoucheron ensuring goldcomes from socially respon-sible mines,” says Ms Mac-kenzie.

Bang & Olufsen, the lux-ury sound systems firm,says it follows a sustainableapproach when developingproducts for a life cycle ofup to 15 years.

“Many householdsthroughout the world haveperfectly working productsthat are 20-30 years old,”says John Bennett-Therkild-sen, vice-president of opera-tions at B&O. “But we domake repairs and spareparts available for a longtime after a product hasceased to be manufactured.

“In the design phase ofevery product, we carry outtests that simulate the dis-mantling process for theproduct’s disposal after 15to 20 years of use to ensureour designs can actually beseparated into the appropri-ate fractions.”

Luxury goodsDan Ilett finds thatindulgence can stillbe sustainable

Fresh approachaids mission tocurb emissions

In 2008, Adnamslaunched East Green,“the UK’s first carbon-neutral beer”, showing

that any product, howeverancient, can be redesignedto reduce its environmentalimpact.

“Every stage in the devel-opment of East Green, fromthe growing of the hops tothe packaging, has beendesigned to minimise ourcarbon emissions as far aspossible,” says Andy Wood,managing director of theSuffolk company.

Adnams produces EastGreen in a new brewerywith an energy recoverysystem that recycles all thesteam created during thebrewing process and uses itto heat 90 per of the nextbrew. All the malting bar-ley is grown locally in EastAnglia to reduce emissionsfrom transportation, a natu-rally pest-resistant strain ofhops is used to cut pesticidespraying and the finishedbeer is distributed in alightweight bottle.

The beer illustrates thepoint that, while many peo-

ple think of design as anactivity that concentrateson the look and feel of aproduct, it encompasses farmore than that.

“Design thinking is a wayof looking at challenges andproblems in a holistic way,”says Marianne Guldbrand-sen, head of design strategyat the Design Council inLondon. “By asking thebasic questions, designerscan help multidisciplinaryteams rethink the problemand come up with innova-tive solutions.”

Green redesign may focuson the “upstream” (produc-tion and manufacturing)stages – as with East Green

beer – or on the “down-stream” (use and disposal)stages, she says.

A good downstreamexample is Procter & Gam-ble’s redesign of its deter-gents. The US companysays Ariel Excel Gel, its lat-est generation of laundryproducts, uses 20 to 50 percent less energy duringwashing because the gel is

active at temperatures aslow as 15°C.

“During the laundry lifecycle, 70 per cent of energyconsumption happens dur-ing the product’s use, heat-ing the water needed towash,” says P&G. “Elimi-nating the need to heat thewater cuts energy use dra-matically.”

The transport sector isfull of examples of greenredesign at various levels.Every car manufacturer istrying to improve its down-stream performance, byselling vehicles that go fur-ther for every unit of fuelconsumed. But there arealso some impressiveupstream achievements.

For instance Toyotamakes cars in Europe withjust 23 per cent of theenergy per vehicle todaycompared with 1992, whenthe Japanese companystarted European manufac-turing. By rethinking everystep of the production pro-cess, it has stopped sendingany waste to landfill fromits 11 European plants.

Redesign in transport canalso take place at a servicelevel. Ms Guldbrandsensays Streetcar is a goodexample here, because itenables urban inhabitantsto drive a car occasionally,when they have to, withoutowning one. Every Street-car on the road replaces 26

privately owned cars.Ocado, the internet-based

home delivery service forfood and groceries, isanother example of greenservice redesign. Its “greenvan” delivery slots save fuelwhile reducing road traffic,by clustering deliveries inthe same area. The com-pany estimates that eachOcado van can replace upto 20 cars on the roadbecause people no longermake individual journeys tothe supermarket.

Riversimple, a youngerand equally innovative UKcompany, is carrying out amore fundamental redesignof the car itself. It is devel-oping a two-seater for localuse, powered by hydrogenfuel cells, which will pro-vide highly energy-efficientpersonal transport.

Another aspect of greenredesign is what happens tothe product at the end of itslife. Steelcase, the interna-tional office furniture com-pany, redesigned its deskchairs to produce a range

called Think. Steelcaseworked with McDonoughBraungart Design Chemis-try, a US-based sustainabil-ity consultancy, to come upwith a chair that is 98 percent recyclable by weightand contains 37 per cent re-cycled materials.

Steelcase says a non-

expert can dissemble Thinkfor easy recycling in fiveminutes, using commonhand tools.

But traditional, longestablished products suchas beer and chairs are notthe only targets for greenredesign. There is muchscope for cutting the energy

consumption of informationtechnology, too.

Wyse Technology of Cali-fornia, takes advantage of“cloud computing” toinstall “thin clients”instead of conventionaldesktop computers inoffices. These access theircomputing power – for

applications and data – overa network, so local energyconsumption is only one-10th that of the PCs theyreplace. Thin clients emitless heat, so offices requireless air conditioning.

There is more on green ITon page 2 of this report.

RedesignClive Cooksonlooks at activity ina range of sectors

Going local: Riversimple’s innovative two­seat car, powered by hydrogen fuel cells

What happens tothe product at theend of its life isanother aspect ofgreen redesign

A sociallyresponsible snakefrom Boucheron

Reducing drag fromair friction can have amarked impact insome transport modes