Book Excerpt: Sustainable: Mining the Green Gold

I am excerpting on this blog roughly 10% of my next book, The New Technology Elite due out in February (and available for pre-order on Amazon – see badge on left) . Chapters 6 through 17 cover 12 attributes of what I call the elite. Here are excerpts from Chapter 17 which focuses on being Sustainable. Note: the text is going through the publisher’s edits and subject to change.

Tony Prophet of HP, whom we met in Chapter 2, says it is a source of personal pride for him that the HP supply chain is sustainable. The comment is noteworthy given the dimensions of the HP supply chain are already extremely complex. It goes way beyond tackling carbon and other emissions from its products to those in its supplier operations and product packaging. HP’s numbers are impressive—1.4 billion KWH of electricity customers saved from 2008 through 2010 using high-volume HP desktop and notebook PC families; recycled over a billion ink cartridges using HP’s “closed-loop” process, which uses plastic from returned cartridges to make new ones; over 2 billion pounds of other electronic parts recycled since 1987.⁴

Prophet also talks about fair labor practices around the world and sourcing of “conflict minerals.” He says that at a time when demanding analysts like “The Greenmonk” expand the definition of “sustainable” for the high-tech industry.

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Tom Raftery has been pushing for sustainability for a long time. An Irishman who lives in Spain, Raftery bleeds green. After a stint at the Cork Internet Exchange, a “hyperefficient data center,” he is now an analyst at Redmonk and looks for environmental improvements across many industries, but particularly in technology. Typical of his comments is this one:

Facebook has a very efficient data center in Prineville, Oregon [as we discussed in Chapter 8]. Its PUE is 1.07, which is near the theoretical maximum (of 1.0), but it is powered by Pacific Corp, 63 percent of whose electricity is generated by burning coal—very definitely not Green. Same with Microsoft’s Dublin, Ireland, data center—again a very respectable PUE of 1.2, but run on the Irish electricity grid, 87.5 percent of which comes from fossil fuels—again, not Green.

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There is a reason why Raftery calls his iPhone choice “a funny one.” In many sustainability forums, Apple is the devil personified. It does not help that the company rejected in 2010 a resolution that would require it to publish a CSR (Corporate Social Responsibility) report centered on its greenhouse gas emissions, toxic waste, and recycling. Apple’s “Board of Directors recommended shareholders vote against the resolution because they believe Apple has addressed sustainability reporting and that a formal report would add little value and involve unnecessary time and expense.”⁵

Jeff Swartz, CEO of Timberland, the shoe company, has commented on his blog,

CEOs of publicly traded companies in the fashion industry don’t get the “pass” that comes to the supercool Apple leaders and their ubercool company. Meaning, my shareholders and my consumers insist that we create profit, quarter by quarter, and that we do it . . . in a sustainable fashion, both in terms of environmental practice and in terms of transparency and safe working conditions in the supply chain. Why does a bootmaker get held to a higher standard than an iPad maker?

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Hollywood introduced us to the moral issues in Blood Diamond, a movie starring Leonardo DiCaprio. That movie was set in Sierra Leone, but the action has since moved east in Africa, particularly to the Democratic Republic of the Congo, around a number of minerals we need in our high-tech devices.

The bland industry term for that is “conflict minerals,” but as the Huffington Post reported:

It’s a war which most people know nothing about, despite the fact that we’re all directly connected to it. Armed groups are fighting over the lucrative minerals that power our cell phones and laptops, leaving a trail of human destruction that has no equal globally since World War II.¹³

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The Mountain Pass Mine in the Mojave Desert in California has plentiful deposits of bastanite, from which several rare earths are extracted. Mining operations ceased at Mountain Pass in 2002 amid environmental concerns, although processing of previously mined ore continued at the site. Mining has since restarted to the consternation of environmentalists. The dilemma is minerals critical for newer cleantech versus environmental risks for which the mine was closed in the first place. And are we replacing one dwindling resource, fossil fuels, with another, rare earths? Is that really sustainability?

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An area where some tech companies have shown sustainability creativity is product packaging.

Dell claims that it slashed over 18 million pounds of packaging from 2008 to 2010 by focusing on a “three C’s” packaging strategy: cube, content, and curbside recyclability.¹⁸ The cube involves the reduction of size so that packaging is more efficient, from the size of the boxes that hold a product’s components to the number of items that can be moved per shipping pallet. Dell has also boosted the percentage of recycled products that goes into its packaging content. The company increased its usage of recycled foam, and has used more recycled plastic as well. An estimated 9.5 million half-gallon milk jugs went into Dell’s packaging—enough to stretch about 1,500 miles. Bamboo, a fast-growing, sustainable plant material, has also made its way into Dell’s packing materials. The third is focus on materials customers can easily recycle in their neighborhood garbage collections.

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Jeremiah Stone, in the SAP Labs division of the software company, provides a perspective on how the definition of sustainability has evolved in just the last couple of years.

In Stone’s words:

When we launched our program in late 2008, SAP’s starting position was a strong solution set in environment, health, and safety management with its long-time partner, Technidata. Otherwise, it was a blank sheet as far as our sustainability portfolio was concerned.

First, we predicted a strong shift from sustainability reporting to performance management solutions, particularly around greenhouse gas (GHG) emissions and reduction in energy consumption. Second, we expected that this increased focus on GHG emissions and corresponding energy costs would drive significant investment in carbon footprint and energy management solutions. Finally, we expected to see an accelerated demand for solutions addressing Design for Environment (DFE), and sourcing driven by stricter procurement policies.

Two major factors have delayed market maturation following our initial investment. The first was the “great recession” of 2009, and second was the failure of COP-15 (the 2009 Copenhagen Climate Convention) to deliver a global carbon reduction framework. These two factors have led to a slowed proliferation of Chief Sustainability Officers (CSO) with significant budgets for IT purchases or projects, and a cautious carbon legislation climate particularly in the United States and Australia.

In contrast, the BP Macondo well blowout, several mining disasters, and multiple food contamination scares from China to Germany have increased short-term awareness of operational risk and product compliance and stewardship. Further, the continued growth of the global consumer, or “middle” class continues its march unimpeded, driving demand for commodities ranging from rare earth minerals required for production of high tech gadgets to increased energy required to feed these gadgets and increasing proliferation of modern housing and facilities.

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Ray Lane, lead cleantech partner at Kleiner Perkins, the venture capital firm, provides his perspective on the changing definition:

You can see the evolution in the decade Kleiner Perkins has been investing in cleantech. We started out with biofuels, solar and wind. We next invested in conversion tech, coal to gas, thermal electrics, and waste heat to energy. Now we’re investing in storage, fuel cells, etc., and in water. Two years ago we hadn’t done anything in water, and now we’ve done three investments in clean water. We are also focused on agriculture from productivity of seeds to producing sugars.