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The £1,035.13 million (€1,461.09m) Robeco Chinese Equities Class D EUR Acc fund top ranked the UK Registered Fund sector out of 251 funds over the past one year to 30 June 2015 with +34.85%. The fund just pipped the AXA Framlington Health R Inc fund, which posted a performance of +33.57%.

However, the latter was ranked top overall for both the past three and five-years to the cut-off date with +93.59% and a spectacular +151.57%, respectively. By contrast Robeco Chinese Equities Class D EUR posted +56.37% (23rd rank) and +49.30% (92nd rank) over these two respective periods.

The investment objective of the Robeco sub-fund, which launched back in 2004 and has since mid-2007 been managed by Victoria Mio, Senior Portfolio manager, is to provide long-term capital growth by taking exposure of at least two-thirds of its total assets to equities in companies with their registered office in China or a significant part of their economic activities based there.

Mio, who worked in China for five years prior to joining Robeco and has held a senior position at JPMorgan Chase & Co., was a Certified Public Accountant in the US. The fund’s trailing 3-, 5- and 10-year annualised returns as at 16 July 2015 were +14.28%, +7.65% and +15.77%, respectively. And, at present the fund’s net asset allocation is split 98.44% in stocks and 1.56% in cash.

In terms of regional asset allocation, Asia (Emerging) accounts for 91.23%, Latin America 8.52% and Asia (Developed) 0.25%. The fund’s top 5 sectors are: Financial Services (39.60%); Technology (18.08%); Industrials (7.16%); Communication Services (7.13%) and Healthcare (7.07%).

At the stock level, Tencent Holding Limited represented 8.39% of the entire fund, followed by China Construction Bank Corp (6.15%) and China Mobile Ltd (6.07%). Collectively the top five holdings accounted for almost a third (30.5%) of the entire fund’s investments.
Within the US Mutual funds sector, which displayed the best peer group average over the past three and five years at +43.15% and +78.83%, the $1,933.53m Eventide Gilead N fund retained its top ranking over the past one, three and five years with performances of +18.20%, +116.18% and +207.31%, respectively. It outpaced the consistent $1,190.93m Parnassus Endeavor Fund in second place with +13.86% over the past year, +81.55% (2nd rank) over three years and +143.46% (2nd) over last five. The average fund size of the US Mutuals sector stood at US$499.56m. 

Alquity was founded in 2010 by Paul Robinson, to offer investors a more responsible way to invest by achieving strong returns whilst putting something back and creating a Virtuous Circle of investment. On its fifth birthday, he talks to Liz Jones
 

Growing up with an independent financial advisor as a father, going into the City as a young man was an obvious move for Paul Robinson, founder and ceo of Alquity Investment Management.

It’s not an industry he particularly likes, however describing it as ‘psychopathic’. “It’s an industry where the concept of trust is absent and that’s not an unwarranted reputation,” he says. But Robinson and his business, now celebrating its fifth birthday, looks to do things differently.

Alquity – the word is a fusion of ‘Altruism’ and ‘Equity’ – is a shared values investment business. “Through our funds, such as the Africa fund and the Future World fund, we invest in fast growth emerging markets where we think we can get clients good returns,” Robinson explains.

“We look at all the businesses we invest in on an environmental, social and governance basis (ESG). As well as looking at all the numbers, we look at how they behave. Do they treat their workers correctly? Do they respect the environment? Not from an ethical standpoint but because if you do those things properly you get better returns in the long run.”

On top of that, the business then donates up to 25% of its revenue to fund things like microfinance to help the poorest in the communities where it invests. He believes that while helping people who are poor just because of where they were born is a good end it itself, actually helping these people get their first foot on the economic ladder has a far wider impact. Indeed, he feels that Alquity is helping to build the economy that it is investing in. “It makes no sense to invest in these emerging economies and then leave half the population economically inactive on the side,” he says.

Robinson has always been an entrepreneurial spirit. He ran a software company at the tender age of 14 and built up his own multi-million fund management business in Hong Kong, after several years working for Standard Life and Scania Group. He also worked with several African charities (between breaks in his financial career), where he developed a deep love for the continent. “So one day when I was out with friends and saw a photograph of a young girl sitting at a locked water tap, we started to talk about what we could do about it.” Robinson’s entrepreneurial spirit kicked in once more and he and his friends went on to set up One Water – the bottled water company where 100% of the profits are donated to fund water projects in Africa. Today it is sold in Starbucks and is the only water sold in World Duty Free shops in UK airports. Over 10 years One Water raised more than $20m, giving clean drinking water to 2.5m people.

Robinson believes business should be about enlightened self interest. Alquity has three core pillars: its first responsibility is good returns for its investors. “We need to deliver as good or better returns as a regular investment company like JP Morgan but with a ESG focus.”

In 2013 Alquity delivered a 15.3% return from its Africa fund while JP Morgan did 5.1% from theirs and Investec returns were negative.
While acknowledging that this doesn’t happen all the time, Robinson is keen to disprove the notion that investors aren’t giving something up in order to invest responsibly.

Such results are achieved through gaining a deeper undestanding of the businesses in which it invests. Robinson believes this approach is doubly important when you’re dealing with developing markets. “You need to see how the managers work and how transparent they are,” explains Robinson and gives the example of how far they’ll go: “One of our fund managers went to look at a car company manufacturing in Laos. It took six hours in a taxi just to get there from the airport. You have to do the work,” he emphasizes.
“Disclosure in Asia isn’t that good but we just don’t ask for it. We explain how disclosure wil help them. How Alquity will help them.”
The second pillar of the business is to secure a source of “Alpha”. That’s investment speak for opportunties that will give an extra return. “If you look at typical funds they’ll go for AAA rated stock. We look at A-C grade investments.”

Robinson is a firm believer that real benefits and returns come from stocks with momentum and that is found most in the journey of a company going from C to A. Alquity’s third pillar is transforming lives, with 25% of the fund’s C money going into micronfinancing schemes. “It’s about giving a hand up, not a hand out,” says Robinson. “I believe in capitalism in a meritocracy. You have to give everyone the chance to win as it makes no economic sense not to do so.”

In the last 12 months, Alquity has gone from one to five funds. His goal now is to grow those funds to critical mass so that they can all compete with the likes of Fidelity.

“If a fund is less than $50m, investors aren’t interested and it won’t open any doors,” he explains. The age of a fund is also important because investors like to see a track record of growth of at least three years.

The Africa fund is established at $60m but the newer ones are currently under $20m. The Asia fund has grown from $4m to $20m in the last 12-18 months and the India fund has grown from $1m to $8m.

In 10 years time, Robinson is convinced everyone will invest the ESG way. He is realistic enough to know that Alquity isn’t going to change Africa on its own but firmly believes it has a really good chance of changing the industry.  

John Dewar & Sons has achieved a 34% reduction in GHG emissions since 2006 and a 46% reduction in water use since 2009 through its partnership with the Scotch Whisky Association (SWA).

Since 2010 the Bacardi-owned whisky maker has also seen a 30% reduction of waste to landfill at its five malt distilleries.

“Working with companies like John Dewar & Sons, the SWA is implementing an award-winning, industry-wide environment strategy,” said David Williamson, Public Affairs & Communications Director, for the Scotch Whisky Association. “It’s the first of its kind here in Scotland. Our aim is to reduce our emissions and increase our investment in renewables – at a time when production is growing.”

In Scotland, estimates are that 36 bottles of Scotch whisky are exported every second in an industry that supports some 35,000 jobs.

“The environment is so important to Scotch whisky,” commented Iain Lochhead, operations director for John Dewar & Sons Ltd. “We are so closely tied to the air, the water and the landscape where we grow our barley and distil our whiskies that it’s crucial we have a sustainable future. Without our barley, there is no Scotch whisky industry.”

“By reducing carbon emissions, we believe we are playing our part in making the environment in Scotland sustainable,” added Lochhead. “Because we use natural ingredients to make our whisky, we want to return at least as much as we take away.”
 

Picture credit: © Pmakin | Dreamstime.com - Malt Whisky Photo

A new WWF cost-benefit analysis of Forest Stewardship Council (FSC) certification on a cross-section of forest operators finds that tropical and small or medium producers, regardless of geography, can benefit significantly from attaining FSC certification.

The Profitability and Sustainability in Responsible Forestry: Economic impacts of FSC certification on forest operators report found that on average, the companies examined earned an extra US$1.80 for every cubic metre of FSC-certified roundwood or equivalent, over and above costs associated with certification. 

The outcomes were achieved through price premiums, increased efficiency and other financial benefits. Results varied significantly by company size and geography. Tropical companies as well as small- and medium-size enterprises – regardless of geography – showed financial gains, while temperate and large producers were found to experience small losses. On average, it took the companies that were studied six years to break even on their investment in FSC.

“The results of WWF’s new report challenge the assumption that the costs of FSC certification, particularly in the tropics, are greater than the benefits,” said Rod Taylor, Director, WWF’s Global Forests Programme. “This study shows that while the investment costs of entering into an FSC certification process can be considerable, for tropical forest operators and small or medium enterprises, the investment can be good for the bottom line. This is an important finding given the crucial role of these groups in safeguarding forests for the future.”
 

By E. Freya Williams

As President Obama unveiled his plan to curb carbon emissions from America’s power plants this week, opposition ranged from West Virginia’s attorney general Patrick Morrisey who said the plan will “severely harm…the US economy” to Wisconsin Governor Scott Walker who labeled it “bad for business.”

The President anticipated these objections, and they are nothing new. The idea that sustainability and profit are opposing forces was introduced into business ideology in 1970 by economist Milton Friedman and has since hardened into fact in the minds of many business leaders and their policy peers, reinforced by the opinions of Wall Street analysts to whom they are beholden.

But as the President recognized, this thinking is “stale.” It has reached its sell-by date.

Those who oppose Obama’s carbon emissions plan will miss out on billions of dollars of profit that can be found in this opportunity. We’ve already seen countless companies profit from restricting their harm to the environment. In fact, nine companies—five of them American, now command a billion dollars or more in annual revenue from products or services with sustainability or social good at their core.

That’s billion with a B.

These are not alternative companies catering to the granola set. On the contrary, they include titans of American industry, past present and future. Consider:

• American icon brand General Electric, which generated $28bn from its Ecomagination line of products that save customers money and energy in 2013. For reference, Ecomagination would qualify as a Fortune 100 company if it were a standalone business, and its revenues are four times the size of Peabody Coal;


• US innovation juggernaut Nike, whose Flyknit shoe technology creates some of the brand’s highest-performing products with significantly lower carbon and waste impacts. It is estimated to be a billion dollar business line;


• Tesla, the California-based electric vehicle start-up that, against the odds, wrested control of the luxury auto market from Germany and whose 2014 sales topped $3 billion;


• America’s most successful restaurant chain in a generation, Chipotle, which sources its meat from farmers who commit to more responsible practices, uses its marketing dollars to advocate for ethical, sustainable farming. In 2014 it saw sales grow an astonishing 27.8% to top $4 billion, and


• Whole Foods, another home-grown US success story. 30% of sales are organic, and Whole Foods enjoyed 2014 sales of $14.2 Billion, as it expanded to new American cities, including Detroit.

The group of “green giants” is rounded out by Brazilian beauty brand Natura, Japanese Toyota with the Prius, Swedish home furnishing giant IKEA with its line of products for a more sustainable life at home, and consumer packaged goods multinational Unilever. They’ll be joined this year by another US retailer Target, whose Made to Matter line is set to hit a billion dollars in sales this year.

Together, the Green Giants generate over $100 billion in annual revenue from their sustainable business lines, and outperform their competitors in the stock market by 11%.

These companies represent the American ingenuity President Obama invoked. “Right now we are inventing whole new technologies, whole new industries. We’re not looking backwards, we’re looking forwards,” he said.

They recognize that many of the assumptions upon which modern business is built are being overturned. Things that conventional business relies upon to be free or cheap—water, labor, emitting carbon dioxide—are becoming more expensive. Things that today are still relatively abundant—food, land, natural resources—are becoming scarce, (and therefore also more expensive). Things people once considered weird—like sharing cars and bikes instead of owning them—are fast becoming normal and even aspirational.

As the rules of business are turned on their head, assumptions and instincts honed in the old era cannot be relied upon. Green Giants have had the prescience and courage to build their businesses on these new rules, rules like the Clean Power Plan. And any business can follow their example.

“The kinds of arguments you are going to hear….are not even good business sense,” the President said.

Not any more they’re not.

Let the luddites and naysayers oppose Obama’s carbon emissions plan while the rest of us reap profits from it.

Freya Williams is the North American CEO of Futerra, the sustainability communications and consulting firm, and author of Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses, to be published on August 19th 2015. She has advised organizations, including Unilever, Coca Cola, Tetra Pak and the UN, on how to incorporate sustainability and social good into their business and brands. Formerly co-founder of OgilvyEarth, Her expertise has been featured in Newsweek, The Financial Times, and on NPR. You can follow freya at @freya1.

 

Do you ever sniff the urban air and think, “Gee, I wonder how much nitric oxide I just inhaled?” Probably not, but soon Google will have that data for you.

For a month, three Google cars zipped around Denver for 750 hours and collected 150 million data points about air quality. Their sensors tracked carbon dioxide, carbon monoxide, nitrogen dioxide, nitric oxide, ozone, methane, black carbon, particulate matter and volatile organic compounds (VOCs).

Air samples reached sensors by traveling through tubes coming from holes in the car windows. It looks “like a jumbo straw,” said Davida Herzl, the co-founder and CEO of Aclima, the environmental sensor company that designed the system. “It’s kind of like we’ve given the cars a nose.”

Small weather station instruments called anemometers on the outside of the cars measure temperature and wind-flow data. (Dropping the word "anemometer" during a casual conversation with coworkers also allows everyone to mentally collect data on how smart you are.)

The air quality research is part of a collaborative study by NASA, the EPA, Aclima and Google. The data may just help shape your future decisions such as what part of town to live in, what transportation to take to work, whether to buy an air purifier for your house, or whether to make your kids wear air filter masks when playing in the backyard (just kidding, if the air is that bad, you should probably move).

“We have a profound opportunity to understand how cities live and breathe in an entirely new way by integrating Aclima’s mobile sensing platform with Google Maps and Street View cars,” Herzl said.

“Many things affect air quality – everything from our transportation and energy choices, to green space and the weather. Understanding these complex relationships is critical to managing and improving air quality. The Denver test prepares us for scaling the system and introducing Aclima’s mobile sensing platform to communities anywhere Google Street View vehicles drive. There’s unlimited potential for our work to help improve the health and resilience of communities everywhere.”

Karin Tuxen-Bettman, Google's Aclima partnership lead, told NPR: "If you're a local government, you could look at this kind of information and say, 'What and where can we make some changes on a small scale to have some good impact?'” If a city knows where the most pollution is, it can put green spaces nearby to absorb the pollution.

Next up is San Francisco. Google cars will check the urban air quality there this fall. Hopefully someday they'll make it to my home city of Los Angeles, although I’m afraid the pollutants are so bad here it might break the sensors.

Images courtesy of Google

By Sally Uren

The Pope’s recent invitation to social activist Naomi Klein to join his forthcoming high-level environment conference is an indicator of the shifting sands which define the historical role of civil society, government and business. In turn, these shifting sands are why the United Nations Sustainable Development Goals are capturing the imagination of business in a way that no aspect of the sustainable development agenda to date has managed to do. In short, the Sustainable Development Goals (SDGs) are offering an opportunity for new, and in the case of the Pope and Naomi Klein, unusual collaborations.

The current global development framework, the Millennium Development Goals (MDGs), expire at the end of 2015. As a result, the international community and stakeholders have been busy negotiating a new set of global goals to incentivize and measure process on sustainable development and poverty eradication: the SDGs.

Unlike the MDGs – which focused primarily on social development priorities in low-income countries – the SDGs will aim to provide a blueprint for sustainable development that incentives and drives change in all countries across the globe. The goals will have to contribute to poverty eradication in low-income countries while addressing unsustainable patterns of consumption and production in the developed world – in both cases addressing the balance between economic growth and environmental sustainability.

A central narrative for delivery of the SDGs will be a story of increasing demand and decreasing availability, placing further pressures on our fragile ecosystems and fragile societies. Over the lifetime of the SDGs, seismic shifts in the global economy will continue to change the patterns of global trade, and the demographics and health of our global population will remain in transition. Some trends will continue to move in the right direction as millions are lifted out of poverty. However, the specter of an explosion in rates of non-communicable diseases, with obesity rates leading the charge, remains a real threat, and everyone stands to be affected by the far-reaching implications of climate change.

Despite this, solution spaces are emerging. We are seeing citizens mobilizing powerfully to create movements on specific issues from banning bee toxins to getting rid of 'pink slime' in meat products in American schools, and examples are emerging of the circular economy in action. A digital explosion is enabling smart cities, smart homes and smart agriculture, ushering in an era of ultra-transparency. Citizens around the world have access to gigabytes of data that was simply not available two years ago. People are asking questions: Where are goods and services coming from? How can I get connected to the causes I care about?  Digital is decentralizing power and handing it to the people -- just one reason why the traditional roles of government, business, civil society and NGOs are in transition.

Governments have to look further than legislative tools to create enabling conditions for sustainable development, and they are also running low on cash.  This isn’t just a story about Greece, but around the world governments can’t afford to deal with the impacts of unsustainable development and are turning to the private sector for investment.

In turn, we are seeing the rise of purpose-driven business and brands, looking way beyond the direct boundaries of their business and seeking to provide solutions that address complex sustainability challenges.  The list is long and includes Unilever's Lifebuoy story and Tesla's move from luxury cars to energy storage solutions designed to scale solar power. And, of course, there is a new breed of purpose-driven leaders.

Finally, NGOs are deploying sophisticated change models to use campaigning and partnership to tip all of these actors into action. It is against this backdrop of blurred roles and responsibilities that the SDGs will be ratified. This is why the goals throw up an unparalleled opportunity for business, government and civil society to come together and create impact at scale, through collaboration, co- creation and co-innovation. The announcement this week from 13 of the biggest corporations in the U.S. to invest $140 billion in fighting climate change is just one signal of this opportunity.

The MDGs were seen to belong mostly to governments and aid agencies. The reality is that the SDGs will belong to all of us and will be driven not primarily by government, but by new partnerships between business, government and civil society.  The role of business is no longer just about delivering quarterly returns, but delivering positive environmental and social outcomes.  Add in the Pope, and there might just be a chance that shifting sands could deliver the firm foundations for sustainable development.

Image credit: Flickr/YoTuT

Sally Uren joined Forum for the Future in 2002 and currently oversees Forum's partnerships in both the UK and globally, as well as Forum’s networks and communication activities. She is a member of Sustainable Brands Advisory Board and speaks regularly at national and international conferences. Sally is Chair of Kingfisher plc’s Independent Stakeholder Panel, a Panel Member of the UK’s Green Energy Supply Certification Scheme and an independent member of The Carbon Neutral Company’s Technical Advisory Board. 

By Geoff Livingston

You may be familiar with the Animal Planet reality TV show, “Ivory Wars.” In it, rangers fend off local and Somali poachers seeking to kill elephants for their ivory. However, the rangers do much more than just protect elephants.

The 81 rangers working in the Kenya Kasigau Corridor are employed by REDD+ Project manager Wildlife Works. The project encourages sustainable living through new eco-friendly career opportunities and solutions for the many citizens living here.

Audi supports Wildlife Works and the REDD+ Project as part of its carbon offset program that compensates for the manufacturing and first 50,000 gas-driving miles of the new A3 e-tron. Audi sent me as part of the larger VIVA Creative film crew to document the incredible work taking place.

We spent seven days in the company of Joseph, community manager for Wildlife Works, as well as Bernard and Evans, the two Wildlife Works Rangers pictured below. I was impressed by their work, their passion for the wildlife in the Project area, and the danger they face from poachers. A poaching incident occurred on my last day in Kenya, and the pain was evident on their faces.

Their responsibilities extend well beyond protecting elephants. Here, trees are as precious as the wildlife. Rangers seek to stop people from slash-and-burn farming and others from cutting down the trees for charcoal. Deforestation is a primary driver of rising CO2 levels and also creates the loss of habitat for many of the indigenous species.

Many animals other than elephants call Kenya’s Kasigau Corridor home, including lions, giraffes, baboons, buffalo and zebras. These animals are present throughout the wildlife preserve, randomly appearing every day as you traverse the land.

How the rangers fit into the bigger picture

There are valid reasons behind the poaching and deforestation. People need to earn a living, and some methods of doing that include selling ivory, creating charcoal from the trees, and using the land for farms. However, not even the latter is sustainable, as within a few years the soil loses its nutrients and cannot yield crops.

Wildlife Works looks to offer new financial alternatives to these people. A wide range of opportunities exist, including teaching women how to start their own arts and crafts businesses; sharing new job opportunities such as protecting the land; providing education to the next generation; and teaching people alternative methods of producing charcoal and farming.

The Wildlife Works Ranger team fits within this larger context by not only protecting the land and wildlife, but also providing jobs and giving people an opportunity to change the environment and their local communities.

Women have joined the Wildlife Works Ranger staff in its efforts to protect the Kasigau Corridor, namely through loosely knit associations of women entrepreneurs. These women are part of a larger effort in the Corridor to invest more in women, who, in turn, reinvest their earnings and experience with their families and surrounding community.

The Kasigau Corridor REDD+ Project area is enjoying the prospects of a brighter future thanks to the many revitalization and entrepreneurship programs occurring in the region. In many ways, the Ranger uniform is the iconic representation of the new way of life brought about by Audi’s carbon offset program. Stay tuned for more details when the Audi documentary comes out this fall.

Disclosures: Audi paid me to visit Africa and capture content as part of a larger documentary that will be released this fall. Audi supports Wildlife Works as part of a carbon offset program that compensates for the manufacturing and first 50,000 gas-driving miles of the new A3 e-tron.

All photographs by the author, Geoff Livingston.

A former journalist, Geoff Livingston continues to write, and has authored four books. Most recently he published his first novel “Exodus” in 2013, co-authored “Marketing in the Round,” and wrote the social media primer “Welcome to the Fifth Estate.” Professionally, Geoff founded Tenacity5 Media, a marketing consultancy serving companies and nonprofits. He has advised more than 10 members of the Fortune 500.

 

Lost in the midst of the green energy revolution and the efforts to reduce water usage (especially here in California) is the role that agriculture plays in our modern economy. In the end, our individual impact on the world is most determined not by what car we drive, or if we have solar panels on our roofs, but simply by the food we eat day after day.

Of those foods, nothing has as much of an environmental and social cost as meat, defined here as any form of animal flesh. At the same time, no food signifies wealth, development and gourmet as well as meat. Think foie gras, caviar, filet mignon or even sushi.

Americans eat more than 200 pounds of meat per-person, per-year, the most in the world and more than double the global average. Meat consumption rose dramatically in the United States alongside the growth in factory farms, fast food and the use of antibiotics in meat – all of which made meat cheaper, and all of which have large negative environmental impacts, few of which are factored into the price of meat today.

The frank truth is that the cost of meat is much, much more than what we pay for it in the store – and society is bearing those invisible costs. This includes: polluted run-off from factory farms, diseases (remember swine flu?) created by keeping animals in such close quarters, carbon emissions from cow farts (a major source of methane, a greenhouse gas 30 times more potent than carbon dioxide), transportation, and the degradation of land by said farms.

The thing is, we already pay a de-facto meat tax, but it's not on factory farmed meat. It is on meat that is produced more ethically. Farms that reduce these external costs end up having to charge more in markets. That is why organic meat, which has a smaller impact on the environment, is more expensive than factory-mass-produced meat. This is what is keeping organic foods available only to the well-off, as the poor cannot afford to pay this de-facto tax.

Sweden wants to change this.

“Animals actually provide a very inefficient way of producing nutrition. Plants need just a tenth of the same amount of land to produce the same amount of nutrition," said Kristina Persson, Sweden's Minister for Strategy and Future. "Today, grasslands and embankments are cultivated to feed cattle throughout Sweden, but these areas could also be used for creating biogas and fertilizers.

"This means we have the opportunity to produce a lot of bioenergy if we reduce our reliance on animals. This could be vital in making Sweden less dependent on fossil fuels in the long run and would help future-proof Sweden’s agricultural industry.”

A well thought-out meat tax, like Sweden's, could have massive benefits for America. It would switch our food paradigm by taxing mass-produced, carbon-emitting meat and incentivizing vegetarian cuisine. Study after study shows the top thing an individual can do to reduce their carbon footprint is to eat less meat. Moreover, such a tax would benefit smaller organic and family farms, who often use more environmentally-friendly farming methods.

A meat tax would go a long way to helping us change our food system into a more sustainable one. I'll be watching Sweden closely – if their tax turns out to be a success, perhaps it is only a matter of time before America comes aboard. The sooner, the better.

Image source: Wikimedia

By Jennifer Tuohy

Is the Internet of Things (IoT) the most sustainable business model ever? Yes. And here's why: At its core, the Internet of Things is a business model that reduces waste and streamlines processes, promising to deliver greater value from a smaller amount of resources.

More from less is a key tenet of sustainability. Any business committed to sustainability, be it a flower shop in Charleston, South Carolina, or the National Health Service in the U.K., must embrace IoT and make it an integral part of its business model, both in the interests of profits and of sustainability.  After all, sustainability has more than one meaning:

“Sustainability is not just about running more efficiently or using less carbon. It’s about being able to sustain yourself in a future that’s going to be defined by disruption and change,” explains McGee Young, founder of MeterHero.

What is the one thing that universally disrupted traditional business in the last century? The Internet. Well get ready, because the Internet of Things is the Internet -- optimized for integration with almost everything.

Think about the progression: In the 1990s, 1 billion devices were connected to the Internet (mainly computers). During the 2000s, that figure jumped to over 6 billion, thanks to the development of the mobile Web and smartphones. According to research by Goldman Sachs, in the next five years, IoT will bring over 28 billion "devices" online; within the next decade, IoT will power all business.

But IoT is poised to impact business in a completely different way from the first Internet revolution. Instead of being a disruptive force, it will be an enabling force. The most important thing to understand about IoT is that its objective is not about technology — it is about facilitation:

"The value of the Internet of Things has very little to do with either the Internet or the things. Rather, the real value lies in harvesting and analyzing the data that all these objects generate, and in turning those insights into meaningful action," says Per Simonsen, the CEO of Telenor Connexion.

This ability to collate, interpret and act on data is what makes IoT such a key concept in the global pursuit of sustainability.

Nick Blandford of Schneider Electric agrees: “I see the IoT not only facilitating clean energy access but also helping to fight poverty, develop healthcare systems and increase the ability to provide education.”

With great knowledge comes great power

While the IoT is machine-to-machine technology, it is also an evolution of the Internet. IoT brings the Internet out of the computer and puts it into the real world. This merging of the physical and online worlds gives us not only greater control, but also greater insight into how our world works. With this new understanding, we can improve efficiency in all aspects of a business. Improved efficiency cuts out wasted materials, reduces energy use and helps eliminate wasted time, all of which equals greater sustainability.

For the average business owner, the overarching concepts of the IoT may not affect your daily business immediately. However, many of its early products can and will facilitate stronger sustainability, no matter the size or scale of the business.

Install smart devices

All businesses should be actively replacing their old equipment with smart, energy-efficient devices such as smart thermostats, connected light bulbs, and intelligent plugs and sockets to cut down on wasted energy.

Lighting, in particular, can have a huge impact, especially in large workspaces. Connected light bulbs can turn on and off automatically at pre-set times, or be paired with environmental and motion sensors so they operate only when needed. This type of smart lighting has the potential to reduce carbon emissions by a staggering 70 percent.

However, the most promising potential impact of IoT on energy use in an office space is the ability for connected devices to talk to each other. IoT adds intelligence into a manual process, so those connected blinds can close automatically when the smart thermostat senses the room is heating up due to the sun and, if the motion sensor indicates the room is occupied, initiate a sequence to turn the smart lights on.

Make sense of your business

IoT is basically sensors and smarts wrapped around a context. Sensors are tiny, powerful devices that can help take your business to the next level in sustainability. All businesses can take advantage of the power of these sensors, which have dropped dramatically in price, in both mundane and important ways. From installing motion sensors in meeting rooms to gauge how efficiently they are used, to the bottom-line transformative application of tagging inventory with sensors, IoT can propel your business to new heights.

Inventory control is a huge component of the power of IoT in achieving sustainability for a business. Attaching sensors to goods allows for instantaneous updating and real-time tracking of goods in the supply chain. The data derived will help businesses match supply and demand, cutting down the need for warehouse space, decreasing waste, and reducing the need for the transportation of personnel and goods.

Seek smart solutions

Clearly, IoT is an emerging revolution in the business space. But if you can’t find the ideal application for your business, don’t despair. Thanks to the downsizing of technology, both in price and size, chances are that if you can think of a need, you can build a customized IoT solution to fit it. At the very least, you can transform the analog tools essential to your business into connected devices, simply by plugging them into a smart outlet.

Conclusion

While small changes in your business may feel like indiscernible steps in the direction of global sustainability, they are not insignificant. Studies have shown that a global implementation of IoT solutions in energy, transportation, agriculture, buildings, manufacturing and consumer services could, by 2020, reduce global greenhouse gas emissions by 9.1 gigatons of CO2 annually, according to research by the Carbon War Room. That’s the equivalent of the current total emissions of the United States and India combined.

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Jennifer Tuohy is a tech enthusiast who provides insight about how the IOT can make your small business more sustainable. Jennifer gives advice on how to use home automation to make things smart. To learn more about home automation products for your business visit The Home Depot.