Daniel Suchenski 蛋蛋的西游记 a story of Sustainability: February 2011

Monday, February 28, 2011

TEPCO - A Beacon of Hope or a Corrupt Corporation

http://green.autoblog.com/2008/08/13/tokyo-to-get-200-quick-charge-ev-stations-with-plans-for-more/

Introduction

The Tokyo Electric Power Company (TEPCO) is one of the largest energy companies in the world. TEPCO was established “in 1951 as an electric power supplier to the metropolitan Tokyo area. Over the past half century, during which Japan went through large changes, such as the post-war high growth period, two major oil crises, and the collapse of the bubble economy, we have been steadily supplying our customers with electricity, which is essential to modern society,”[1] says TEPCO president Masataka Shimizu. Well known throughout Japan and around the world, TEPCO is a global powerhouse in the energy sector. More than just an electric company, TEPCO has become famous over the years for its corporate social reconcilability initiatives as well as its scandals.

CSR at TEPCO

Authors Charles Holliday, Stephen Schmidheiny, and Philip Watts wrote a book entitled Walking the Talk: The Business Case for Sustainable Development, in which they use TEPCO as a case study for corporate social responsibility. According to the authors, TEPCO sees global warming “as a pressing energy issue”.[2] As one of the largest energy companies in the world TEPCO is a large emitter of carbon dioxide into the atmosphere. Back in March 2001, TEPCO set a target to reduce CO2 emissions by approximately “20% (from 1990 levels) to about 0.31 kg CO2 per kWh in 2010, using a host of different measures based on a diverse and complementary energy mix. 'We are making every effort to guarantee a stable supply of high-quality electricity, including the promotion of an optional mix of energy sources by balancing hydroelectric, thermal, and nuclear power, and also renewables as supplemental sources', says TEPCO President Nobuya Minami; 'Nuclear power, which does not emit CO2or pollutants during generation, plays an important role in countering such environmental issues as global warming.'”[3]

Making nuclear energy the centerpiece of TEPCO’s alternative energy solution helped TEPCO reduce CO2 emissions, according to TEPCO “The optimal use of its nuclear power has alone accounted for 92 million tonnes of the total 134 million tonnes of CO2 emissions cut during 2000.”[4]

Scandal and Ethics

While some may have celebrated TEPCO’s efforts in CSR and greenhouse gas emmissins in the early years of the new century, by September of 2002, the story had changed significantly. In an article posted on CNN.com in September 2, 2002, “The president, vice president and chairman of Japan's largest utility are quitting following a nuclear safety scandal, along with two advisers.”[5] The resignations followed the announcement that Tokyo Electric Power Co. (TEPCO) admitted that it “may have failed to accurately report cracks at its nuclear reactors in the late 1980s and 1990s.”[6] The article goes on to detail that “TEPCO is suspected of falsifying 29 cases of safety repair records.”[7] While all nuclear facilities should be monitored, TEPCO’s nuclear reactor “is the world's largest, and will be shut down temporarily along with four others for urgent safety checks. Japan's nuclear power industry provides a third of the country's electrical power, and has been criticized for other accidents in recent years.”[8]

As negligence turned to willful deceit, the corporate social responsibility of TEPCO came more and more into question. By September 7^th 2002 it had surfaced that division chiefs at TEPCO had knowingly “ordered the falsification of reports relating to structural problems at nuclear plants”[9] for years.

Conclusion

[10]

In September 2010, TEPCO announced that it had established its "2020 Vision: Medium to Long-term Growth Declaration."[11] The above graphics depict some of the goals that the 2020 vision has in the years to come. According to press release for 2020 Vision, we see many changes taking place in recent years. In addition to “changes in the social structure caused by the rapid aging of society due to a declining birthrate, decreasing population, and changes in the industrial structure, major changes are also occurring in relation to the energy and environment situation, as can be seen in the development of energy-saving technologies, the global warming issue, increasing energy consumption particularly in Asia.”[12] While there is little doubt that changes have indeed occurred in recent years, it is not clear if TEPCO has learned its lesson and has true ambitions for CSR and sustainability for the future. Only time will tell.

[1] http://www.tepco.co.jp/en/corpinfo/overview/p-glance-e.html, http://www.tepco.co.jp/en/corpinfo/overview/message-e.html [2] Holliday, Charles O. Jr., Stephen Schmidheiny, Philip Watts. Walking the Talk: The Business Case for Sustainable Development. UK: Greenleaf Publishing Limited, 2002. Print. [3] Ibid. [4] Ibid. [5] http://edition.cnn.com/2002/BUSINESS/asia/09/02/japan.tepco/index.html [6] Ibid. [7] Ibid. [8] Ibid. [9] http://businessrespect.net/page.php?Story_ID=578 [10] http://www.tepco.co.jp/en/corpinfo/overview/vision2020/target/index-e.html [11] http://www.tepco.co.jp/en/press/corp-com/release/10091301-e.html [12] http://www.tepco.co.jp/en/press/corp-com/release/10091301-e.html

Tuesday, February 15, 2011

Entrepreneurship Successes and Failures: Facebook & Mark Zuckerberg

today.msnbc.msn.com

Facebook has been met with seemingly endless success since its birth in 2004. Projections for Facebook’s revenue are in the hundreds of millions. Since Facebook is still a privately owned company it does not report its annual earnings but revenues could be around $800 million for 2009 (1). When evaluating success however, there are more metrics to consider than simply revenue. The Christian Science Monitor reported in June of 2010 that Facebook had been declared “the most popular website in the world.” While such a thing could be subjective in nature, the newspaper noted that this commendation was unique because it was made by a ‘sometimes’ competitor. For one week in March, Facebook – the source of so much recent controversy in the wild world of the Web – “temporarily unseated Google as the most popular website in the U.S. Now, Google itself is admitting that Facebook is the most popular site in the world, ranking above second-place Yahoo, third-place Live.com – run by Microsoft – and fourth-place winner Wikipedia,” (2).

Facebook’s Successful CEO

Some of the biggest successes that Facebook has to its credit are not exclusively Facebook. In many ways it has been the long-term thinking, confidence, relentless attitude, non-compliant approach, and obsessive nature of Facebook’s CEO that has made the social media website what it is today (3,4). Jane Genova, writing for AOL, described four qualities of success that Mark Zuckerberg has and what many others want. Since being named Time magazine’s Man of the Year (5), Zuckerberg and his creation have got people wondering about what makes him successful. Ms. Genova listed these qualities: An outsider, blessed with the ability to understand an entity fully but still stand apart from it, alert, willing to grow (6).

Entrepreneurship Failures

With so much success over the years, it’s hard to image that Facebook has had much in the way of failure. Having said that, Facebook has not escaped lawsuits, public outcries, and disgruntled users. One of the biggest challenges for Facebook has been difficulty with Zuckerberg’s collaborators, when the company was still a start-up. Perhaps the most notable ‘failure’ involves a series of lawsuits from Cameron and Tyler Winklevoss. These twins that worked with Zuckerberg made numerous claims of theft concerning the idea for Facebook (7). In addition to claims of theft, many have expressed significant displeasure about some of Facebook’s privacy policies and design decisions. With a user base of over 600 million people, it is not surprising that Facebook experiences some negative feedback; Facebook has dealt with periods of “PR hell” (8) over the years. Dealing with accusations of “open disdain” for privacy and other customer service objections have not been uncommon in Facebook’s short life.

More Successes than Failures

Despite some of Facebook’s setbacks, it is clear that Facebook and Mark Zuckerberg have encountered significantly more success than failures. Facebook is innovating in areas that often do not have paths that are paved ahead of time. With so much success and so much change it is impressive that they have not experienced more ‘failures’, perhaps a credit to their success.

(Contact me for references)

USGBC's LEED vs. Japan's CASBEE: A competition in green building proliferation

http://www.city.yokohama.lg.jp/kenchiku/center/kankyo/

Introduction

Discussion in, and proliferation of, sustainable, or "green", building is growing worldwide. Because of this, standards for green building adoption are growing to follow suit. There are a number of excellent and well proven environmental evaluation schemes already in existence, these include: LEED in the USA, BREEAM in the UK, HQE in France and CASBEE in Japan.[1] Each country’s standards have different method to evaluate a sustainable building. This report will look at the “differences between LEED in the United States and CASBEE in Japan. Each have a similar goal to promote sustainable construction and higher environmental standards, but are developed from fundamentally different approaches.”[2]

Doing business with Japan

According to Professor Garrity, “the misunderstanding of the importance of cultural values is the major cause of cultural problems between the United States and Japan.”[3] Additionally, Professor Garrity states that “Harmony with the environment is also part and parcel when it comes to Japanese culture. Control over the environment is the way American’s think.”[4] While the majority of Americans may not be on the global bandwagon for ‘harmony with the environment,’ there are notable groups and organizations that have made not only the environment a priority in their business model, they seem to have, through environmental work, successfully tackled cultural misunderstandings with the Japanese that has eluded some business professionals for years.

A Business in Green Buildings

The United States Green Building Council (USGBC) based in Washington, DC has made their LEED rating system for buildings, the gold standard for ‘green’ development projects around the world. Since its founding in 1993, the USGBC has gone from a small nonprofit in the nation’s capital to one of the most prominent ‘green’ building certification and education institution in the world.[5] With a community comprising “78 local affiliates, more than 18,000 member companies and organizations, and more than 140,000 LEED Professional Credential holders, USGBC is the driving force of an industry that is projected to contribute $554 billion to the U.S. gross domestic product from 2009-2013.”[6] According to the USGBC website, buildings in the United States are responsible for “39% of CO2 emissions, 40% of energy consumption, 13% water consumption and 15% of GDP per year, making green building a source of significant economic and environmental opportunity.”[7] Not only is the work that the USGBC do offer environmental sustainability, it offers economic sustainability as well. Among other ‘green’ building options, greater building efficiency can meet “85% of future U.S. demand for energy, and a national commitment to green building has the potential to generate 2.5 million American jobs.”[8] This means that there are huge money making opportunities in the sustainable building economy. Opportunities that have global implications.

CASBEE – Japan

Although “LEED is the most prominent standard for green building design, it is not the only standard.”[9] In Japan, energy efficiency and ‘green’ buildings are nothing new. Ever since the 1970’s “oil supply shocks, the Japanese government has implemented aggressive energy efficiency polices. In addition to regulations, consumer demand has driven energy efficiency because residential electricity rates are much higher in Japan. According to the International Energy Agency, Japan’s residential electricity rates are around 24 cents kw/h, about double the US average of 12 cents kw/h. More expensive electricity means higher costs to heat, cool, light and operate a building, and therefore a greater incentive to use electricity as efficiently as possible.”[10] According to the CASBEE website, “promotion of sustainability is one of the great challenges facing humankind. Since the building industry started to move toward the promotion of sustainable building in the latter half of the 1980's, various techniques to evaluate the environmental performance of buildings have been developed.”[11]

USGBC - US

The USGBC’s strategic plan emphatically states that ““Green” is booming.”[12] The plan, which runs through 2013, details the ‘green’ becoming more and more mainstream. Sales of “green products, hybrid vehicles, and organic foods, for example, are growing rapidly. Carbon regulation will dramatically alter energy markets, driving innovation and efficiency across the economy. Legitimate concerns about faddishness and “green‐washing” aside, these trends reflect long‐term shifts in societal mindset.”[13] While a shifting mindset in the American society with environmental and sustainability inclinations is a remarkable feat, the USGBC seems intimately aware that “achieving sustainability on a large scale is still very far off. Green buildings and other green products remain very small percentages of total market shares. USGBC has achieved tremendous success in recent years, with LEED playing a particularly strong role in driving green building. Yet, only 3% of new commercial buildings in 2007 met at least a minimum green standard and only 0.2% of new residential construction is built green.”[14]

LEED vs. CASBEE

As of 2009 there were 8 registered LEED buildings in Japan.[15] The USGBC established itself as a non-profit in 1994 and released the first LEED rating system in 1998. The organization has grown significantly from a handful of individuals to now more than 78 local affiliates, 20,000 member organizations and more than 100,000 LEED Accredited Professionals.[16] The organization has “more than 200 employees and is very influential in the industry. LEED has successfully created a new and expanding market for green building products, driving innovations in technologies that adhere to its rating system. There is no doubt LEED has been responsible for the dramatic market transformation in the last ten years since its introduction.”[17]

The LEED system has a “systematic approach, based on a checklist that helps to keep evaluation relatively simple. Creating a checklist for sustainability makes it easier, but it may risk the overarching goal of sustainability, by keeping too focused on a guideline rather than an ideal.”[18] Author Daniel Brook cited, "the point system creates perverse incentives to design around the checklist rather than to build the greenest building possible.[19] He cites an example where a $395 bike rack is worth the same as a $1.3 million environmentally sensitive heating system. A building may achieve a high LEED rating, but still may not make environmental sense depending on how it is incorporated to the wider community.[20] While his argument is not without merit, it is perhaps shortsighted and ill-informed.

CASBEE, on the other hand, was initiated with the support of a government bureau (MILT), as a joint industry/academia/government project.[21] It is “evident in the conceptual design of the Japanese model, as the approach is more theoretical, and less systematic. There is a comprehensive and holistic approach, that may seem more abstract in some ways, but it enables the concept to easily be applied to the urban scale.”[22] In addition, “new products that come to market will not be heavily influenced by the CASBEE system, and will still come from Japan’s long history of designing energy efficient and sustainable products. There are no checklists or point-ratings to meet; rather there are broader goals of improving environmental quality and reducing environmental load.”[23]

Conclusion

Green building proliferation and interests in energy efficiency will only grow in the future. Business interests in this field will grow to keep pace. More importantly the race for the international standard in the green building industry is a prize that is something organizations all over the world are vying for. While there are notable differences in approach and implementation, “LEED is a systematic checklist created and promoted by industry professionals, whereas CASBEE was a government initiative with a more holistic approach to sustainability,”[24] There is still room for any organization to gain the lead in an international setting. While, the USGBC is making leaps and bounds in internationally, “the US has an opportunity to learn from Japan’s experience in both technology and policy. Japan’s long history of energy efficient and sustainable building materials provides a host of new green building technologies, including many products that have been proven in Japan for years. Many rank well in the CASBEE system and qualify for LEED points.”[25] As the USGBC grows and changes to an international business perspective, it is important to remember that “LEED is the most prominent standard for green building design” right now. While there is still much work to be done, the USGBC and is positioned to continue to lead this industry and subsequently, make enormous ‘surpluses’. With all this success hopefully America will no longer be known as the country that does not ‘live in harmony with the environment’.