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2013 will see an acceleration in the investing attractiveness of companies embracing sustainability. The three drivers behind this investment trend are:

Emerging sustainability accounting standards. The world's 3000 largest companies face over $2 trillion in liabilities created by their environmental impacts. This is equal to 50 percent of their EBITA profits. The accounting industry is now exploring how to instruct corporations to report this off-balance sheet liability in their 10K. The growing awareness of this accounting change has begun to influence equity investment analysis.

C-suite engagement. There is growing awareness among CEOs, COOs and CFOs on how the solving of root cause problems with sustainable best practices will grow profits through lower costs and increased competitiveness. The result is the greening of the global supply chain and a focus upon product designs that "cost less, mean more."

The consumer search for "In me, on me and around me" solutions. Consumers are increasingly focused upon being smarter, healthier and greener. Consumers are moving past endearing ads about polar bears. They are increasing their focus upon how a product impacts their lives.

Based on these drivers, here are five industry megatrends that every investor should consider running from, running toward or embracing:

Run from coal

Coal is a fuel that the world increasingly cannot afford. Coal’s appeal is its price competitiveness on a therm-per-pound basis. That is a false cost analysis based on coal’s significant externality costs. I have shoveled coal. It is dirty. The cost to clean coal is high and climbing higher. Coal is also on a collision course with water. Producing electricity from coal takes a tremendous amount of water and last summer’s drought brought a curtailment of coal-fired power production due to a lack of water or because water supplies were too warm for effective cooling. China, which now accounts for half of the world’s coal consumption, is confronting a water choke point to its expansion of coal-fired power plants. In a not too distant future, China will have to choose between using water to support coal-fired electricity generation or for the production of food and the servicing of urban citizens. This also applies to U.S. states like Georgia, Alabama and Arizona that use a higher percentage of coal for electricity production and are increasingly confronting water supply constraints. Investors beware! Bottom-fishing for coal companies, or companies that rely upon cheap coal-fired electricity for their competitive advantage, have risks similar to attempting to catch a falling knife.

Run toward natural gas

Hydraulic fracturing has upended the energy industry. Natural gas’ growing supply and price competiveness is stealing market share from coal. It is blunting the growth of renewable energy. It is poised for global revenue growth. A telling example is the recent milestone shipment of LNG from Norway to Japan through an Arctic shipping-lane emerging due to global warming. The only potential overhype for natural gas is its potential growth in vehicle transportation because a gaseous fuel is typically not competitive against liquid fuels’ energy density. While the evidence is still emerging on how hydraulic fracturing might be a long-term risk to water supplies, the natural gas industry has been effective in adopting technologies, operating practices and lobbying that is limiting its current exposure to the type of constraining regulation now confronting coal. Sempra is an example of a company positioned to realize revenue growth from generating electricity with natural gas and delivering its through pipelines and LNG ports.

Run toward LED

Lighting is a significant cost because it accounts for approximately 20 percent of U.S. commercial and residential electricity consumption. LED is a technology solution that cuts electricity costs by using one-tenth the electricity of an incandescent lightbulb. LEDs have a much lower heat signature that reduces the cooling load of a building further saving energy and money. The auto industry has fallen in love with LED lights for their looks and most especially because of their limited energy requirements on a car's battery. LED technologies are benefiting from Moore’s Law that is pushing production costs toward price competitiveness against all other lighting technologies. Winners in this space include the LED lighting manufacturers plus lighting contractors, building owners and cities that benefit from lower operating costs due to LED street and signal lighting.

Run toward car companies

The car industry has embraced sustainability based upon their analysis that the price of gasoline is not going to go down and stay down, no matter how much we drill. Their 2013 strategy is to redefine a "fun" car as being turbo-charged and digitally connected while also introducing fun-to-drive hybrid and hybrid-electric cars that are becoming affordable. Their challenge is the Millennial generation that is increasingly viewing car ownership as a cost to them and their environment that should be minimized. For the Millennial generation, it is Apple’s “Think Different” mentality that drives their car purchase behaviors compared to their parents' “See The USA In Your Chevrolet.” 2013 should see continued record-breaking car sales assuming gasoline prices continue to remain in the $4+ per gallon range and the Fed’s monetary-easing policy continues to make car-financing almost cost-free.

Embrace results

Sustainability's underlying investment appeal is its ability to deliver profits by solving root cause environmental and social problems. Apple and its superior product designs are the poster child for how investors and consumers are focusing upon results. Apple products just work. Apple’s shift to the cloud is reducing costs and waste streams. Apple has become a revenue-generating machine because its digital products, apps and software are just darn cheap, have no consumer waste stream and often are free through seamless updates to an owner’s iPhone, iPad and computers. Apple’s continued results-based success with consumers is setting the performance bar for all businesses. Yes, Apple needs to improve its fair labor practices. Yes, they need to incorporate recycling more aggressively into their product designs. But the great news for Apple, and every other business that seeks to copy Apple’s results-focused strategy, is that consumers are rewarding companies with purchases if they see evidence of "mean more and cost less" results.

The final article in this series to be posted tomorrow is on Sustainable Economics in 2013.

Bill Roth is an economist and the Founder of Earth 2017 He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.

By Symon Hill and Anna Simpson

On-the-go access to energy and communications is changing our relationship to the world around us.

In a touring exhibition that visited London in 2012 and will be at the Sydney Festival until March 2013, the Chinese artist Song Dong displayed all the contents of his mother's flat – over 10,000 everyday objects. Not exactly the contents of a backpack, though there were several backpacks among the halls of a single person's sprawl.

Song's mother, the artist explains, would cling onto everyday objects because they offered her a sense of security – something anyone who has lived through political upheaval or the fear of scarcity will understand. But a new generation of consumers is cultivating a very different relationship to personal belongings. Living light is their aspiration, their daily needs answered by a single object – a sleek smartphone or slender tablet.

In years to come, people may live lighter yet, suggests Gerd Leonhard, CEO of the Futures Agency. These personal devices, with all their cloud-based functionality, will have moved into our minds. If we require energy on the move, our clothes will harvest it through integrated photovoltaic or piezoelectric generators...

We're witnessing the rise of the modern nomad, "defined not by what they carry but by what they leave behind." That's the definition The Economist proposed nearly five years ago, in a feature written in anticipation of a wireless world, called Nomads at Last.

A tide of consumers favor access over ownership

What the author didn't foresee was today's triple whammy of nomad-friendly trends. Anytime-anywhere connectivity is one of them. Then there's the rise of decentralised energy, in which anyone who can afford the kit is able to generate, store and even sell their own power. And finally, there's the tide of consumers who favour access over ownership, met by the rapid growth of peer-to-peer lending and sharing schemes.

With the likes of Airbnb, the light-footed can feel at home anywhere in the world. Already, for many, the bedroom wall has been replaced by Pinterest as a place to hang your favorite things…

So, what does all of this mean for sustainability? Fewer belongings and more sharing may hold promise for resource-efficiency – but it all depends on tight management. One counter-trend could be unnecessary maintenance to ensure hygiene: more washing of clothes, sheets and towels, and so on. Fleura Bardhi, a research professor in consumer behavior at Northeastern University, Massachusetts, is interested in the evolution of "alternative relationships to the material world." After all, new nomadism isn't simply about being on the move: it's about a world in which "your own place" and "your own stuff" no longer make such a difference – to your productivity, your wellbeing, and even your identity.

"Our relationships to place and people are becoming more 'liquid', they're changing constantly," says Bardhi. "It means we also have to adapt and change. The most successful are those who can adapt very quickly."

This could be good news for behavior change: the less attached we are to our bad habits, the more easily we can switch to better ones. But it could also go the other way: a more sustainable action may never become a habit if the context is always changing. For the business community, the implications of a shifting world go far beyond working from home and video conferencing. Daniel Pink, author of Free Agent Nation, anticipates a shift towards self-employment.

"If you look the underlying economics of why firms exist – such as high transaction costs and coordination problems – then, as those forces dissipate, companies themselves might become less necessary," Pink said.

Indeed, if individuals can maintain their professional profile through their own networks, the attraction of an official job title could fade. As Pink puts it: "When talented individuals can have the communications and computing power companies once had, they need organisations far less than organisations need [them]."

What role might these highly adaptable "free agents" play in building resilience around them? Already, greater connectivity is helping relative strangers identify common problems and engage in fruitful collaborations – from spontaneous one-offs to organised "hackathons."

If sharing more space and more stuff means we also develop a greater sense of our dependence on common resources – including each other – then there's much to look forward to.

Content to roam

Symon Hill visited a Bedouin community in the West Bank.

"We'll put it on Facebook," joked Nisreen as she posed for a photojournalist. It's not an unusual comment for a 17-year-old girl. But it was surprising to hear it in the desert.

Nisreen lives in the Bedouin community of Al Rashayda, a collection of tiny tented settlements spread over several miles in the southeastern corner of the West Bank. Once nomadic, its movements are now restricted by the Israeli army's training exercises.

Nisreen's cousin Ali [pictured] is leading goats over the hills. If he needs to contact his family, he will use his mobile phone. Meanwhile, young men are texting on phones that appear to be swinging from the top of a tent. Looking up, I see the tent's wooden frame has electricity sockets, with phone chargers plugged in.

The community's goats and camels are kept well away from the sparkling solar panels that make this communication possible. Funded by UK aid money, they were fitted by Christian Aid and the YMCA, along with a water pipe that the electricity helps to power.

"We thank God the water is here," said Nisreen's mother. It means a bath every three days rather than weekly. Nisreen and her sister Tahany use it to sustain a vegetable patch.

Christian Aid emphasizes that the pipe and solar panels were requested by the villagers themselves. The villagers told me the initiative came from a young woman, who I couldn't meet because she was busy with the olive harvest. She's also studying through the Open University. The internet helps.

Symon Hill is author of The No-Nonsense Guide to Religion. Anna Simpson is Managing Editor, Green Futures.

[image credit: gckphoto: Flickr cc]

Apple may be the world’s valuable company and brand, but to sustainability and corporate social responsibility advocates, the company is often a pariah. A patent application the company filed last year, first revealed on the Apple Insider blog, shows that some of that cash on which Apple is sitting could be invested in a new clean energy technology.

Filed last year, the application describes a set of rotating blades that converts rotational energy from a wind turbine into heat that is then stored in a vessel containing “low heat capacity fluid.” The system would then selectively transfer the heat as needed from that low heat capacity fluid to a “working fluid” and hence would generate electricity. Heat, not rotational energy, would would be the result of the turbine’s blades rotating; and even more exciting, energy could be used when needed, as when there is little or no wind.

The bugaboo of conventional wind power turbines is the inconsistent amount of energy generated due to the fluctuations in the speed of wind. There is not often enough wind during peak demand, and conversely turbines could produce excessive amounts of energy during periods of low demand. Plus the pesky issue of energy storage hinders the ability of wind power to contribute effectively to local grid systems. So according to the lead author of the patent application, Jean Lee, “what is needed is a mechanism for mitigating variability and/or intermittency associated with the production of electricity from wind energy.”

One key component that would allow this technology to work is the friction between the rotor blades and that low heat capacity fluid. That fluid could be ethanol, nitrogen, an inert gas or mercury. In turn that insulated vessel-containing fluid could both obtain and store energy from the wind turbine and generate energy when wind is lacking. During such times a conductive rod or radiator would boil that fluid and the resulting steam would rotate another turbine connected to a generator.

Why would Apple pursue this? As is the case with many technology companies, much of the company’s carbon footprint lies in their data centers that are always ravenous for energy. As Fast Company’s Ariel Schwartz points out, Apple’s business will rely more and more on cloud technologies such as iTunes and of course, iCloud. So as Apple dabbles in clean energy, it would only make sense they develop their own--proprietary, no doubt--technology.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

Image courtesy U.S. Patent Office

The cost of solar energy continues its downward trajectory, but it is still out of reach for many individuals and organizations. Oakland-based Mosaic, however, is doing its part to make solar more accessible and affordable. Its collaborative investment model is leading the way to making the rise of the sharing economy entrench itself within the energy industry.

The way Mosaic works is similar in concept to crowdfunding sites such as Kickstarter and Indiegogo. But, unlike those successful sites, which are generated by donations with occasional promises of incentives, Mosaic provides a rate of return that varies by project. In turn this small startup, which for now has 14 employees, offers the opportunity for investors and true believers to put their money where their mouths are--and for as little as $25 per individual.

The results are opportunities for organizations such as affordable housing communities and nonprofits that seek power from the sun but cannot afford the cost of installing solar energy systems. One of Mosaic’s latest projects is a solar array on top of the Youth Employment Partnership (YEP), Oakland’s largest and oldest youth employment training agency. The 40-year-old nonprofit has trained at least 30,000 youth via various programs and has refurbished 50 homes in east Oakland for low-income families. Last month, YEP held a ribbon-cutting ceremony on its roof after its quest to raise over $40,000 for a 196-panel installation proved successful. Mosaic provided the platform through which over 50 investors could raise enough money to offer YEP a 60-month loan. The project will eventually save the organization a minimum of $55,000 over the next 10 years and, according to the San Jose Mercury News, $160,000 over the life of the project.

Additional projects are on the drawing board, including affordable housing projects in Salinas and San Bruno. The process for investors is seamless. First, Mosaic links investors to solar projects in need of financing. Later, as the solar array generates power, it gains revenue by selling electricity to that solar customer. That project, in turn, uses the revenue to pay yields to those investors. Mosaic so far has received seed money in the form of a grant from the Department of Energy as well as financial backing from San Francisco-based Spring Ventures.

Like any investment fund, pooling money in Mosaic has its risks. Anything could go awry, from bad weather or inverters or other equipment not performing the way the manufacturer had promised; suppliers that go bankrupt or the termination of local government rebate or tax incentives could affect a project’s financial performance as well. Investors have access to prospectuses on Mosaic’s site outlining each project’s risks. Nevertheless, in a world where someone passionate about affordable senior housing, or clean energy--or both--can do his or her part for as little as $25, Mosaic may be onto something that could easily be replicated in other industries. So far, the $1.1 million invested in several projects have benefited from a 100 percent on-time payment rate. So far, this sharing model is working and shining bright.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

Image credit: Mosaic

As a lead-up to Abu Dhabi Sustainability Week, January 13-17, Masdar sponsored a blogging contest called “Engage: The Water-Energy Nexus.”  The following post was among the finalists.

By Andrew Kear, PhD

Establishing a sustainable balance between energy and water is fundamental to the survival of humanity.  This energy-water crisis relates to nearly all of the present and future environmental problems confronting our planet – from climate change to fossil fuel dependence, from over-population to agricultural practices.  The complex interrelationships and resulting problems defy simple solutions.

Arguably, technology is no panacea and historically, it has created new and unforeseen problems.  For example, the present global unconventional natural gas boom spurred by technological innovations such as horizontal drilling and hydraulic fracturing, has opened vast non-renewable energy supplies at the expense of water quality, quantity, and availability.  Achieving sustainable (i.e. renewable) global energy solutions will not eliminate water insecurity, especially in water-poor nations, but it will remove one unnecessary stressor to our precious water resources.

​At what level of action and in what manner should we address the energy-water crisis? While water and energy policy are largely regarded as separate arenas, specifically in the U.S. context, they should be treated holistically within the same political debate.  Thus, redefining water and energy as inseparable is critical.  From the grassroots to the global political sphere, immediate problem redefinition and political action are prerequisites to stalling the energy-water crisis.  In the affluent world, individuals can eat less meat, pressure politicians, drive less, buy local food, direct consumerism to greener products, and form broad coalitions promoting social/political change.  Individual lifestyle changes and political action in the global north are insufficient and political institutional action at the municipal, state, regional, nation-state, and international level must follow.

Governmental policy solutions range from the one-size-fits-all, prescriptive command-and-control style regulations to market-based initiatives (MBIs) to more sustainable options. For example, renewable portfolio standard policies (RPSs) mandate that major energy providers produce a certain percentage of their energy from renewable supplies such as wind and solar by a certain date.  Not only will these state and national policies advance water conserving energy sources, it will create a business opportunity where technological advancements and economies of scale can reduce prices.  This, in turn, will enable the developed world to transfer this technology to the developing world, moving them up the energy ladder to renewables and effectively skipping the fossil fuel addiction completely.

What can individuals, businesses, the collective, and governments do to achieve energy sustainability and increase water security?  Enact RPSs, promote sustainable practices, transfer renewable energy technology to the global south, fundamentally redefine how energy relates to water, and replace the fossil fuel paradigm with a renewable, water-conserving paradigm.  This requires immediate action from the individual to the global level and with present policies, our energy and water are running out.

[image credit: fox_kiyo: Flickr cc]

When the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants launched in 2012, it focused attention on the high levels of indoor air pollution caused by the widespread use of primitive cookstoves in undeveloped countries. The new coalition also helped to shine a spotlight on a largely invisible but critical piece of the global warming puzzle, and that is the "black carbon" pollutants from primitive cookstoves used by an estimated three billion people worldwide, a number that is bound to shoot up along with the pace of population growth.

Now researchers have added another element of urgency to the clean cookstoves movement, with studies showing a link between the use of primitive cookstoves and outbreaks of bacterial meningitis. However, in order to realize the full benefits of cleaner alternatives, researchers are also beginning to explore the intricate network of issues that surround the simple act of cooking.

Simple cookstoves, complex issues

At its most basic level, the clean cookstove issue is a straightforward matter of public health. As described in a new article by  Cheryl Dybas of the National Science Foundation (NSF), primitive cookstoves that are used indoors with little or no ventilation can expose a household to high levels of smoke from burning wood, charcoal, coal, animal dung or agricultural waste.

The result is premature death from heart and lung disease, especially among children, at an estimated rate of 4 million people per year. Pneumonia in children and low birthweight in infants have also been linked to cookstove smoke.

Despite their small size, cookstoves also encompass a wide, complex network of social, economic and environmental issues. Depending on the type of fuel used, and the effort or expense involved in obtaining it, primitive cookstoves can put enormous stress on local natural resources, especially when charcoal is involved. Fuel gathering can also constrain a household's ability to use time more productively, contributing to long-term economic malaise.

Some advocacy organizations have pointed out that fuel-gathering in remote areas also exposes women to a higher risk of sexual violence, though at least one researcher has cautioned against assuming that clean cookstoves could provide a universal solution.

New threat from cookstove smoke

According to Dybas, the latest twist in the cookstove story is a possible link to meningitis in Africa's "meningitis belt," which covers approximately 300 million people in The Gambia, Senegal, Mali, Burkina Faso, Ghana, Niger, Nigeria, Cameroon, Chad, Central African Republic, Sudan, South Sudan, Uganda, Kenya, Ethiopia and Eritrea.

Studies are showing that households exposed to smoke from cooking over open flames are nine times more likely to contract meningitis, a potentially deadly inflammation of the membrane around the brain and spinal cord.

Clean cookstoves in context

The clean cookstove movement provides a seemingly simple solution, but all too often it's the transition from point A to point B that proves complicated.

For example, dry-season dust in the meningitis belt could also be a significant factor, which would not be addressed by transitioning from one mode of cooking to another.

Depending on the type of clean cookstove, another factor is the willingness or ability of the household to keep the new equipment in good working condition and to use the proper fuel, as recently reported by National Geographic.

To examine cookstoves in a broader context, NSF has provided a grant for a first-of-its-kind study that expands the public health issue to include coordinated research by atmospheric, engineering, statistical and social scientists.

This quote from Sarah Ruth, a program director at NSF, sums it up:

"The adoption of more efficient cookstoves could lead to significant improvements in public health and environmental quality, but research has usually focused on the effects on individual households, local air quality, or the weather and climate system. By integrating the physical, social and health sciences, these scientists are providing a more complete analysis of the costs and benefits of improved cookstoves."

New alliances for clean cookstoves

In the meantime, the clean cookstove movement continues apace. The Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants is a project of the U.S. with Bangladesh, Canada, Ghana, Mexico, Sweden, the U.S. and the UN Environment Programme.

The coalition, in turn, coordinates with other public-private programs already underway, most notably the Global Alliance for Clean Cookstoves, which aims to develop a market for clean cookstoves.

To underscore the level of corporate interest in this type of project, the Alliance was kickstarted by the Shell Foundation. Dow Corning and Morgan Stanley are among the other major private sector partners.

The transition to cleaner, locally produced cooking fuels could also have a ripple effect on sustainable economic development as well as public health, as envisioned by the clean cookstove project CleanStar Mozambique. This project also has some private sector heavyweights behind it, including Novozymes and Bank of America Merrill Lynch, as well as the Soros Economic Development Fund.

Another good example of the integrated approach is a new organization called Engineering for Change (E4C), which describes itself as a "growing community of engineers, technologists, social scientists, non-governmental organizations (NGOs) and local community advocates who are passionate about improving quality of life."

[Image: Primitive cookstove by Engineering for Change]

Follow me on Twitter: @TinaMCasey.

The connection between microfinance and sharing economy might look a bit strange at first, but these two have actually quite a lot in common. After all, both of them are disruptive concepts that empower people and offer alternatives to the current economic system.

At the same time, there’s a big difference in their level of maturity – while the sharing economy is still at its infancy stage, microfinance is in an adolescent stage, with a total of $70 billion in loans, more than 100 million “customers,” one Nobel Peace Prize winner, and even a feature on the Simpsons.

The similarities between microfinance and the sharing economy, together with the differences in their maturity levels, provide a great opportunity for the sharing economy to learn some valuable lessons from the more experienced microfinance, just like a young kid learning from his older sibling.

There are many lessons to be learned from microfinance, but these are the four most relevant ones to the future of the sharing economy. Applying them correctly can help the sharing economy move forward successfully and maybe even get its own mention on the Simpsons.

1. Keep it real

Prof. Rodrigo Canales of Yale School of Management describes a belief that was once common among some microfinance people. “My grandchildren will have to go to a dictionary to see what poverty was, because through microfinance, we've solved poverty.” This sort of expectation is unrealistic because no matter how effective microloans are (and in some cases they aren’t), they just can’t fix all the problems that cause poverty, such as a bad education system, non-functioning government, violence and so on.

Similarly, you can also find voices in the sharing economy who view the sharing economy as the ultimate fix. “We can neither survive nor live well unless we share,” Neal Gorenflo wrote on the preface for “Share or Die.” Well, just like microfinance alone won’t save us from poverty, it doesn’t seem likely that sharing alone will be the answer to our problems.

The ability to keep it real when it comes to the impact of microfinance has helped not just to acknowledge its limits, but also to better understand how it should be used within these limits in order to maximize its impact. Keeping it real when it comes to the sharing economy will probably provide us with similar results and, eventually, with greater impact.

2. More scale doesn’t necessarily equal more impact

One of the most important issues the sharing economy is dealing with now is how to effectively scale up. In the microfinance sector scaling was and still is a challenge. For a long time the dominant thought was that if you want to increase impact, you need to grow, or in other words, more scale equals more impact.

While in some cases this equation is indeed correct, we need to remember that bigger is not always better. As Ignacio Mas and David del Ser wrote earlier this year in the Stanford Social Innovation Review, “it is the ambition of scale, rather than pure greed, that pushes most MFIs and their managers to be more financially driven, and social objectives take a back seat.”

Prof. Canales adds another argument. “Scale is going to mean lower cost. Lower cost does allow you to reach more people. But if you have a lower cost in your business model, you cannot provide more costly services. Then you've constrained your business model in a way that if there's a population that requires a more costly service, you're opting out of that,” he wrote.

The bottom line is clear. Thinking about scaling up? Prepare for tradeoffs, even substantial ones.

3. Greater profitability can attract the wrong investors

Impact might not be the only place where organizations in the sharing economy might need to make tradeoffs once they grow. Their whole identity might be in jeopardy as they grow and become more profitable, attracting capital from investors solely interested in maximizing their return on equity.

While not everyone believes greedy investors are the cause of some of the scandals we have witnessed in microfinance in the last couple of years, others believe that “microfinance has been hijacked by profiteers.” Yet I believe both sides would agree that IPOs, like those of Compartamos or SKS, increased the tension between the social and commercial components of the microfinance’s identity, often shifting companies from a social to a commercial orientation. Companies in the sharing economy who might be considering such a path should take that into consideration.

4. If you want to stay true to the mission, you have to stay true to the mission

This is a quote from Tony Sheldon of the Yale School of Management. What Sheldon means is that organizations with a social mission should learn from microfinance that first, there are implications for every step they take to move forward and they need to remember that. Second, they shouldn’t ignore tradeoffs no matter how strongly they believe they can avoid them.

And last but not least, eventually it’s not the organization’s level of profitability, its size or whether it’s a nonprofit or a for-profit that matters, but the extent to which the organization stays true to its mission. Once you remember to keep it your first priority, the remaining pieces of the puzzle will fall into place.

[Image credit: elFrank70, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons the New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

There are three drivers that are pushing sustainability into an investment megatrend in 2013.

Driver #1: Emerging sustainability accounting standards

One of these drivers is the accounting industry’s investigation into accounting policies and practices that will account for the financial liability of a company’s environmental impacts. KPMG, in their “Expect The Unexpected” white paper, reported that in 2008, the world’s 3,000 largest public companies by market capitalization were estimated to be causing $2.15 trillion of environmental damage.

This off-balance sheet liability is equivalent to seven percent of their combined revenues and 50 percent of their EBITDA (earnings before interest, taxation, depreciation and amortization). In response, a Sustainability Accounting Standards Board was launched in 2012 with funding by the Bloomberg Philanthropies and the Rockefeller Foundation. The organization’s main goal is to establish and maintain industry-specific sustainability accounting standards for use in Form 10-K and 20-F. What this means for investors is that sustainability is now a CFO issue. A Deloitte white paper entitled Sustainable Finance: The risks and opportunities that (some) CFOs are overlooking reports that half of surveyed CFOs are planning capital investments that support the implementation of sustainability initiatives.

Driver #2: Sustainability is now a C-suite area of focus

Sustainability is now being adopted by the C-suite as a valuable tool for growing profits and competitive advantage. Walmart’s CEO, Mike Duke, has embraced a corporate strategy to advance Walmart’s everyday low price competitiveness through sustainability. He hosts two milestone meetings per year for his leadership team focused upon adopting sustainable best practices in operations and merchandise procurement. Similar to achievements by Ford and DuPont, Walmart’s CFO, Charles Holley, reported at a recent milestone meeting that Walmart now earns $230 million annually through its waste management program.

Driver #3: Consumers are demanding smarter, healthier and greener solutions

The consumer is the ultimate driver in sustainability’s emergence as an investment megatrend. But consumers don’t call it sustainability. They are actively searching price competitive “in me, on me and around me” solutions that are healthier, smarter and greener. Attractive investment opportunities that are emerging as smarter, healthier and greener solutions win price competitiveness through manufacturing economies of scale. Much maligned solar power is an example.

If oil had dropped in price as much as solar panels it would be selling for $10 per barrel. A report by ILSR projects that unsubsidized solar will grow from .1 percent of U.S. electricity supply to 10 percent by 2023, as it wins price parity against utility supplied electricity. Hawaii provides a current example where the price of rooftop solar is now lower than utility supplied electricity resulting in a 75 percent leap in construction applications to install rooftop solar electricity systems.

Tomorrow's article will profile five sustainability trends shaping stock valuations in 2013.

Bill Roth is the Founder of Earth 2017 He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.

We humans are a funny bunch around new ideas.

Yes, we’re excited to hear about them. But far less keen to act on them.

Certainly, when it comes to green innovation, there are plenty of obvious reasons for non-adoption, as the Exposing & Closing The Green Gap study highlights.

But even if you eliminate barriers like high price, it’s difficult to start the surge. Why?

In a conversation with Jim Nelson, a marketer at BC Hydro, I learned more about the myriad of subtle, not-so-rational reasons that stop us before we start.

Hydro’s expertise on the subject stems from its own particularly tough sell. As Nelson says, “We’re trying to convince consumers to save energy in a market with few incentives – BC’s power comes from hydro dams, so it’s clean. And our energy has one of the lowest price tags for power in North America. So people see no big benefit in saving energy from a wallet, or smog perspective.”

Certainly, incentives and programs have moved the needle. But the Hydro team also understands there are more subtle barriers to action they need to cross, seven of which Nelson mapped out for me. If you’re in the business of marketing green innovation (or any innovation, for that matter), these might be the keys you’ve been looking for. At the very least, they give us a glimmer into the irrational world of our own psychology.

Status Quo Bias Status Quo Bias is an irrational preference for the current state of affairs. What’s interesting here is that the bias isn’t against inferior alternatives, or a lack of information on alternatives. It’s against ANY change from the status quo.

Semmelweis Reflex The Semmelweis Reflex is a metaphor for the reflex-like tendency to reject new evidence or knowledge simply because it contradicts established norms, beliefs or paradigms.

Mere-exposure Effect The Mere-exposure Effect  is a psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them. It can be something as simple as preference for a face you’re familiar with, or ‘warming’ up to an idea only after being exposed to it a number of times.

Loss Aversion Loss Aversion refers to people’s tendency to strongly prefer avoiding losses over acquiring gains. Some studies suggest that losses are twice as powerful, psychologically, as gains – I would hate to lose $100 much more than I’d feel great about winning $100.

Knowledge Bias Knowledge Bias refers to the tendency of people to choose the option they know best, rather than the best option. This includes well-known principles like the curse of knowledge, when having in-depth knowledge of a subject prevents us from thinking about it from a less-informed perspective.

Anchoring Anchoring is the tendency to rely too heavily on a past reference or one piece of information when making judgments. Think of how we judge a "good" price for a product based on the first price we see – any subsequent price we see is judged high or low based on our first price.

Hyperbolic Discounting Hyperbolic Discounting is our preference for rewards that arrive sooner rather than later. And the longer the delayed reward, the less we value it. Think long-term payback through energy efficiency vs immediate reward via lower equipment price.

So what to do with my green innovation?

Unfortunately, once a negative perception to a product or behavior is established, it’s difficult to detach. This explains our collective frustration at not moving more quickly to shift to more sustainable behavior, despite the knowledge that inaction is to our detriment.

That said, forewarned is forearmed. In Hydro’s case, understanding these drivers enables the marketing team to adjust programs and fail forward faster. How will they impact your next green innovation?

[Image credit: cuantofalta, Flickr]

Last week Qatar-based Al Jazeera Media Network announced that it will acquire the American cable news channel Current TV. Co-founded by Al Gore and Joel Hyatt in 2005, the supposed left-leaning rival to MSNBC had problems attracting viewers and keeping hosts. Terms of the deal were not publicly disclosed, but the purchase of the struggling cable TV news channel could have cost Al Jazeera as much as $500 million. Current TV most likely will disappear within a year and a new Al Jazeera America will be headquartered out of New York City.

Not everyone is thrilled with the news. Time-Warner Cable announced almost immediately after the deal that it would remove Current TV from its lineup. Some observers are foaming at the mouth because of the inconvenient truth that Current TV was sold to the emir of a fossil fuel-rich nation. Charges of Al Gore’s hypocrisy, incidentally, are nothing new: the Gore family has had a long history with Occidental Petroleum and Armand Hammer.

The real truth, however, is much more nuanced: as the Washington Post’s Dominic Basulto reminds us, Al Jazeera is paying for potential eyeballs, not Current TV’s content. Considering the sad state of cable TV in the U.S. (look what happened to Oprah Winfrey’s dis-OWN’d new channel), this is by far the best possible deal that Gore and Hyatt could snag.

Critics who are quick to slam Al Jazeera for its scathing coverage of the Second Iraq War miss an important point: this media company is far more than a channel with a critical voice on American involvement in the Middle East. Al Jazeera is a font of information on regions of the world (The Balkans, Latin America) that often go underreported, and has not been shy about criticizing the governments of its neighbors (though it's relatively silent on Qatar, of course).

Then there is the attack over Qatar’s status as the bastion of the oil and gas industry. No breaking news here, folks: Qatar ranks high globally on the carbon footprint per capita index. The little thumb in the Gulf has a long way to go before it can say it is a serious hub of sustainable development. Yet Qatar is emerging as a clean energy and sustainability laboratory. Its leaders understand that oil and gas are finite resources, and the country needs to diversify if it plans to maintain the high standard of living its citizens, and expat guests, enjoy. And besides solar energy or green construction, technology and media are a couple additional ways for Qatar to diversity its economy.

So, even though Time-Warner’s political move temporarily dented Al Jazeera America’s future reach, the purchase of Current TV is still a winner for Al Jazeera. Currently only 4.7 million U.S. homes have access to the channel, but that can increase to as much as 40 million once the deal is finalized. And Al Jazeera could reap even more opportunities here in the U.S.: the company’s English web site garners about 40 percent of its site visits from the U.S. Add Al Jazeera’s brilliant The Stream, a web community that integrates social media and live news. Coverage of sustainability is not yet a focus of Al Jazeera, but do not be surprised if that changes.

Despite the large media companies telling us otherwise, there is still a dearth of international news on cable television. Sure, Fox’s Bill O’Reilly may fume at Gangnam Style and MSNBC’s Rachel Maddow updates us on Uganda’s homophobic government, but a serious analysis of international events is still lacking on most cable TV packages. So the banter over Gore’s cashing out is just that: banter. Not only was this the best possible deal for a dying cable TV news channel, but the acquisition of Current TV could be positive news for a TV audience who struggle to find a decent source of--news.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). He writes frequently about sustainable development in Qatar.

Image source: Al Jazeera English