"As nearly every study shows, companies with better environmental performance consistently achieve superior financial and stock market performance,"

-- Maximizing Environmental Benefits and Market Returns, World Wildlife Fund

One of the best kept secrets today is that sustainable products are more profitable than conventional products ö sometimes as much as ten times or more. The Economist reports that an index of the "worldās top 200 sustainable firms," set up by Dow Jones, has outperformed the rest of the stock market.

One company made changes to a silicone window sealant and qualified its product as sustainable. The cost -- $10 million. The result ö an increase of $200 million in sales during the first three years. The extra cost included an LCA (life cycle assessment), studies on health effects, and the paperwork for obtaining an EPA exemption, which was granted due to no adverse environmental effects. Distributors soon sought out the bio-safe sealant because it eliminated the liability they normally incur when dealing in a hazardous substance. Within three years profits from the new sealant had increased tenfold.

In Vermont a company designed a factory process for making wrought iron without the usual reliance on toxic and flammable chemicals. After two years, toxic emissions were eliminated, use of toxic materials was reduced by 98%, labor and materials costs were lowered, production speeds were increased, and product quality was improved. Almost immediately the companyās fireplace accessories and other wrought-iron items became best sellers. There was a 24% internal rate of return to investors, and all capital costs from the transition were quickly paid off.

In recognition of this overall trend the Future 500 Conference in April 1999, led by Fortune 500 companies, was titled "The Profit is Sustainability ö the Sustainability of Profit."

 

 

"By designing a product with environmental parameters in mind, companies can increase profits by reducing material input costs, extending product life cycles by giving them second and third life-spans or by appealing to a specific consumer base."

--Green Product Design at 1-2, BSR Ed. Fund

 

Changing the selling and buying habits of the world begins with an understanding and harnessing of market mechanisms. MTS is accelerating the market by employing "market drivers."

Purchasing Criteria:
Persuade Purchasers to Buy the Sustainable Way. There is a huge ripple effect being set in motion by large purchasers including government agencies specifying sustainable criteria in their purchasing orders. From furniture and paper supplies to fleet vehicles, large numbers of consumer goods are processed every day inside government offices. The officials who determine the "specs" on purchasing orders can also help determine how quickly sustainable products and practices move into the mainstream. In the case of subcontracting by the U. S. Navy, for instance, architectural and engineering firms will no longer be hired unless they have passed a sustainability assessment. The products are scored on how they benefit the environment in eleven life cycle categories from climate change to smog. With this guide, government purchasing officers can apply their enormous monetary clout to the best possible advantage in the new economy.

Training:
Explain the Value of Sustainable Products to Product Officials. A lack of information and schooling in the economics of sustainability is perhaps the most significant obstacle that must be overcome. Once the facts are explained, officials in government, industry and the professional services respond favorably and take positive action. Sustainable Products Training© has 120 cosponsors representing Federal, state and local governments, environmental groups, publications, and industry.

Communications:
Make Everyone Aware that Sustainability Products Equal Business Success. MTS is working with business and public-interest groups that are involved from one side of the sustainability spectrum to the other, from setting up the protocols through the supply chains and purchasing programs. One of the key collaborations is evaluating and updating the standards as they emerge and ensure they are well-publicized.

Investor Criteria:
Guide Investors to Sustainable Companies. Investors obviously want good value for their dollars, and those dollars can exert a dramatic influence on the next generation of products. MTS has developed a complete range of criteria by which investors can find and identify companies that buy, make and sell sustainable products.

Green Building Mortgage Backed Securities (MBS).
In 1995 mortgage backed securities were offered for buildings completing Phase I environmental site assessments (ESAs) to avoid cleanup liability. These securities provided much higher value and lower risk to investors, and were rated higher by Standard & Poors allowing greater profit margins for investment bankers. Phase I ESA MBS achieved 95% market penetration of all commercial buildings in five years. Green Building MBS is proposed to be initiated in 2004 by investment bankers at the request of leading elected officials, Johnson Controls, Philips, Invista/Dupont, Forbo Flooring, Hines, Sigal Construction, and Green Building MBS purchasers.

Why are these securities attractive to investors? The buildings whose mortgages are in Green Building MBS pools have higher value from lower building operating costs, greater occupant satisfaction, increased value and tenant retention, and greater access to capital. For example, for its green building headquarters, National Geographic increased its appraised value, received a higher Moody's credit rating, increased tenants' rents,lowered interest rates on loans secured by the realty, and enjoyed reduced worker absenteeism creating a projected added value of $50M.

Download Capipial Markets Partnership Brochure on Sustainable Mortgage Backed Securities

See Article to 100,000 Building Owners on Benefits of Green Building MBS
Download (PDF format - 24K) .

See Green CMBS - Pooling green building mortgages into securities and showcasing their value in the financial market may be the next big step for green buildings
Download (PDF format - 368K) .

Sustainable Products Development:
Providing Supplier Protocols to the Market.

 

"Few problems are less recognized, but more important than, the accelerating disappearance of the earth's biological resources. In pushing other species to extinction, humanity is busy sawing off the limb on which it is perched."

-- Prof. Paul Ehrlich, Stanford University

The "ecological footprint" that is, the amount of land necessary to support one personās cost of living -- is 2.5 acres in the developing world and ten times that much in the United States. The developing nations, trying to improve the quality of their lifestyles, are fast becoming partners with the industrial world consuming the natural environment and driving to extinction a large part of the world's fauna and flora. If present trends continue unabated, Earth could easily lose a quarter of its plant and animal species within the next 30 years and half by the end of the century.

What we lose are not just plants and animals. We may lose the keys to our own survival as a species. If we cut down pristine forests for wood pulp, where will we go to discover plants that may hold the answer to curing diseases? More than 40% of prescription drugs used today in the U. S. today are from natural organisms. Forests contain more than half of all species on our planet (many yet to be named). Nonetheless every minute of every day an area of the size of a big sports field is leveled of its trees, saplings, seedlings and all other growth.

Moreover, who can judge the ultimate value of any particular species to humanity? This destruction of the diversity of life has immense adverse effects to our aesthetic and spiritual value. It also causes secondary and tertiary effects. After clear-cutting, the burnt underbrush releases atmospheric carbon dioxide which contributes to climate change and disruption, formerly called global warming. It is estimated that deforestation contributes one-third of all CO2 releases caused by people. The UN now concludes that climate change as caused by pollution, will cause increased deaths, disease and economic damage beyond the $600 billion from natural disasters in the 1990ās (more than the four previous decades combined). Even conservative bipartisan leaders like David Gergen support an aggressive response: " [We] must move swiftly. · With only 5 percent of the planetās population, we account for one quarter of all greenhouse gas emissions. ·. The United States is not living up to its responsibilities as a steward of the Earth."

Indeed, based on existing technologies, for every person in the world to reach present U. S. levels of consumption would require four more planets the size of Earth. With the world population set to double by the end of this century, it would then require eight more planets.

If we are to survive and thrive on this small planet with its limited resources of water, land, and clean air, we must be wise. We must think about what we produce and how we produce it, and whether these products will come back to haunt us. The only reasonable solution is to create an economy that rewards efficiency, pollution prevention, reuse, recycling, and forward thinking.

 

"Our only limitation is our belief that it is so."  -- Moshe Feldenakias

For some years we have been engaged in a debate of economy-versus-environment. Think a moment, and its falsity is obvious. Clearly, to survive and prosper, we must have both a good economy and environment. Even so, it is difficult to shake off the old assumption that we must agree to tradeoffs, that we must sacrifice something positive in one to gain something positive in the other.

Today there is heartening news. This old assumption also has been proven false. "Sustainability" is not the enemy of profitability. Just the opposite is true. Sustainable products are competitive and more profitable in the marketplace for a variety of reasons:

  • faster product time to market
  • fewer regulatory constraints
  • documented public demand due to global health & environmental benefits
  • reduced costs for raw materials & manufacturing
  • reduced liability
  • deliver added value to consumers
  • corporate good will
  • improved employee health & safety
  • increased worker productivity through reduced time for compliance & liability

In the economy of the 21st century the definition of "sustainable" products is taking on a clearer and fuller meaning. In their entire life cycle, from the extraction of raw materials through to final use, these products win out over conventional products on their environmental and social merits and are more profitable. This "triple bottom line" provides a profound value. Public health and the environment benefit. Consumers benefit. Workers and entrepreneurs benefit. Society benefits ö on a global scale.

 

are Provided to MTS Participants & Published as Best Practices:
  • Improved global human health, environment, welfare & economy
  • Increased profits throughout the productās life cycle to suppliers, manufacturers, wholesalers and retailers
  • Improved product market position, e.g., increased share & good will
  • Increased product value
  • Reduced environmental & social liability, and associated costs for transactions, regulatory compliance, raw materials extraction, & manufacturing
  • Reduced product time to market
  • Improved product design
  • Improved social equity over the productās life cycle
  • Reduced climate change & acid rain, & improved air quality
  • Conserved water & improved water quality
  • Increased waste reduction, reuse, & recycling
  • Increased pollution prevention
  • Preserved & restored habitat
  • Saved energy & increased green power

 

Gifts are solicited from corporations, charitable foundations, and governments. Corporations provide tax deductible gifts and are eligible to participate at the following positions over two years which provide set privileges:
  • Visionary - $200,000
  • Leader - $100,000
  • Innovator - $50,000
  • Statesman - $30,000
  • Executive - $25,000