By: Tomohiro Ohsumi/Bloomberg News, NP

So far, we have examined how energy efficiency can cut costs and drive bottom-line profitability. But going green can also drive top-line revenue with explosive markets, committed green consumers and value-driven employees.

Companies are going green to position themselves as leaders in rapidly expanding markets. HSBC became the first major bank to become carbon neutral in 2005. In 2007, HSBC committed $90-million over five years to increase its energy efficiency. Along with the payback and it being the right thing to do, HSBC wants to be a significant player in green energy financing estimated to be worth $2-trillion by 2030. Installed wind power has been growing at a rate of more than 30% compounded annually for more than a decade, while for solar it’s more than 40%.

Following HSBC’s lead, Barclays Bank became carbon neutral in the U.K. in 2007. Why? Barclays wants a significant share of the carbon trading market, estimated to hit $2-trillion by 2030. The carbon market, at $8-billion globally in 2005, exploded to $125-billion in 2008 — a compounded annual growth rate of 100%.

Legendary Silicon Valley venture capitalist John Doerr sees green technology as the “biggest economic opportunity of the 21st century.” Leading by example is key if companies want a share of green markets.

Companies are going green to attract green consumers: The Natural Marketing Institute studies a segment of consumers who are committed to lifestyles of health and sustainability, a $209-billion market in 2008 that is predicted to grow to $845-billion by 2015. That’s a CAGR of 32%. Just how many markets are expanding this rapidly during this recession?

Four of five North Americans say they want to buy green products and services from green companies. But beneath the politically correct answer, commitment varies widely.

A composite picture of North American consumers, aggregated from half a dozen leading research firms’ findings: Alarmed about environmental state of the world, about 20% are committed. They buy green products and services and are willing to pay a premium of up to 20%. Committed consumers are active campaigners, whether in an environmental group or in their community. About 30% are concerned about environmental issues, will pay a smaller premium compared with the committed green products and don’t campaign. About 20% are cautious; they don’t feel any urgency around green issues and don’t feel that their lives will be affected. Disengaged, doubtful and dismissive segments each are about 10%; these segments are not motivated to buy green products unless they cost less.

Here’s the point: 20% are hard-core committed green consumers who buy products and services from leading green companies and continually promote their choices to family and friends. Beware if your company is a green laggard; this group will generate negative word of mouth for your products and services.

Committed and concerned consumers make up half of North Americans. Few companies can afford to ignore such a segment that has grown so quickly and is so large.

Companies are going green to attract employees. Here are staggering findings: MBA grads are willing to sacrifice US$13,700 annually to work for a socially responsible company (according to a Stanford University study) and more than 80% of entry level hires are looking to work for an environmentally friendly company.

The question is: Can your company afford to ignore trillion-dollar markets, explosive growth markets, committed customers who campaign for leaders and against laggards, and attracting and retaining dedicated employees?

Jim Harris is author of Blindsided!, a No. 1 international bestseller, and a Toronto-based management consultant. His new book, A Crisis is a Terrible Thing to Waste, will be published in 2010. You can reach him at jimh@jimharris.com.

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By: Amy Barrett

Entrepreneurs, already at the forefront of the environmental revolution with the products they sell, also are proving to be leaders of a less visible but equally powerful trend: the transformation of their companies into lean, green operations. Some say concern for the environment is their inspiration to go green; others are looking to cut costs or trim waste. Regardless of motivation, there are “countless thousands of small businesses out there greening,” says Byron Kennard, founder and executive director of the Washington (D.C.)-based nonprofit Center for Small Business & the Environment. “It’s a technological and cultural revolution.” According to an April survey by the National Small Business Assn., 38% of small companies surveyed have invested in energy efficiency programs in the past 18 months. Some 13% had invested in alternative energy sources, 6% had purchased or leased hybrid or alternative fuel vehicles in the past 18 months, and 18% had given employees incentives to cut back on driving.

Together, these changes have the potential to make a sizable impact. Small companies account for half the country’s industrial and commercial energy use, according to Energy & Security Group, a consulting firm based in Reston, Va. Because energy-efficient improvements typically reduce consumption by 30%, entrepreneurs have the potential to reduce their collective CO₂ emissions by 182.2 million tons annually—the equivalent of 36 coal-fired power plants—and to lop $30 billion off the nation’s energy bill.

Such gains don’t come easily. It takes a lot of work—and sometimes outside consultants—to figure out how best to reduce the environmental impact of a business. And while some green initiatives save money, tight credit markets can make it difficult to finance green investments. Some 52% of companies surveyed by the NSBA cited weak cash flow as the main obstacle to making improvements in energy efficiency.

In this slide show we highlight six entrepreneurs who have made great strides in transforming their companies into more eco-friendly enterprises, whether it’s by installing a major solar electric system or by finding new uses for sawdust and leather scraps. All would tell you that going green has been good to them.

To see all the elements of the special report, visit the related items box at upper right side of this story.

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By: Russell Gold

Every spring, fertilizer runoff from the U.S. Mississippi River floods into the Gulf of Mexico, causing a massive algae bloom that leads to a giant oxygen-deprived “dead zone” where fish can’t survive.

Now, this annual problem is getting new attention, not from marine scientists but from entrepreneurs looking for a new domestic source of fuel. And one start-up sees fish themselves being part of the process.

The algae blooms are spawned each year as the farmland runoff from as far away as Montana flows into rivers, eventually reaching the Mississippi and flowing into Louisiana bayous and out into the Gulf of Mexico. These nutrients are a buffet for the floating algae, or phytoplankton, which are simple sea organisms that eat and reproduce quickly. This algae bloom eventually sinks and feeds an array for bacteria, which suck up so much oxygen that fish and plants either move away or perish.

These so-called hypoxic areas exist around the world, and there were as many as 200 in North America in the spring, says Robert J. Diaz, a professor of marine science at the College of William & Mary in Virginia. The Gulf of Mexico dead zone is the second largest in the world, after one in the Baltic Sea.

Scientists have been studying dead zones for decades, and the concern about their effect on ocean life has grown. The Louisiana seafood industry worries that dead zones threaten the ecosystems that support the state’s $1 billion shrimp industry as well as other fisheries. Environmental groups are concerned that the runoff from agricultural fertilizer is threatening a natural ecosystem and pushing it toward collapse.

Turning algae into a bio-based oil to run in conventional refineries alongside crude has been a long-held dream of biofuels entrepreneurs. Exxon Mobil Corp. last month announced a partnership with Synthetic Genomics Inc., a privately held biotech firm owned by genomics scientist J. Craig Venter, to spend as much as $600 million working on developing algae biofuels. Greener Dawn Research estimates that privately held start-ups Sapphire Energy and Solazyme Inc. have raised more than $75 million for their own algae-to-fuel effort.

Thus far, both of those projects plan to raise their algae stocks in controlled facilities onshore.

LiveFuels Inc., a Silicon Valley start-up, has a different idea. Rather than growing algae in onshore facilities, where the cost of circulating the water can be high, LiveFuels wants to use the algae in the dead zones. But instead of harvesting it directly, it wants to go a step up the food chain, using algae to feed fish that could be processed for oil.

“It is too expensive for humans to grow algae, harvest it and get the water out and then convert it into a petroleum-like substitute,” said LiveFuels Chief Executive Lissa Morgenthaler-Jones. It is easier and cheaper to harvest algae’s oil the way Mother Nature does it — “which is to use fish,” she said.

The fish would gobble up the algae and then be harvested, cooked and pressed to extract fish oil — a method already used to produce omega-3 fatty acid dietary supplements.

LiveFuels, of San Carlos, Calif., is testing out carp, tilapia and members of the sardine family at a fish farm in Rio Hondo, Texas, near the Mexican border. “We want the couch potato of fish, the kind that just eat and eat,” Ms. Morgenthaler-Jones says.

Once it figures out a good fish mix, LiveFuels wants to release them in Louisiana bays — more than 11,340 kilograms of fish per acre — to feast on the algae blooms. “This is the sea equivalent of traveling goats: you have algae, we’ll bring the fish,” she says, referring to companies that rent out goats to eat up grasses on California hillsides to reduce the danger from wildfires.

The company envisions building caged fish farms in parts of the algae blooms in Louisiana bayous and offshore in the Gulf of Mexico. The algae would provide a free source of food to raise the fish, and natural tidal flows would churn the algae to keep fresh nutrient-rich water flowing through.

The idea isn’t meeting universal praise. “Our preference is not to wait until the Gulf of Mexico is a giant dead zone and then have someone go out and collect the algae,” says Ed Hopkins, director of the environmental-quality program at the Sierra Club. He favors reducing fertilizer runoff upstream to cut off the nutrients that feed the algae blooms.

LiveFuels also faces a more practical concern. Algae blooms are seasonal and move around from year to year, so Livefuels might have to design mobile fish farms to capture the moveable feasts. The National Oceanic and Atmospheric Administration said last week that the dead zone this summer was the fourth smallest in the 25 years they have been measured, though it was still about 4,800 square kilometers.

Nancy Rabalais, executive director of the Louisiana Universities Marine Consortium, is doubtful of the plan. “There are several groups looking at phytoplankton as a biomass. But my sense is there is not enough on a continual basis to make it economically feasible,” she said.

In addition to LiveFuels, she says, academics from Illinois and New Zealand and a biodiesel maker from Alabama have contacted her about harvesting the algae that bloom in the Gulf of Mexico. A Clemson University professor is looking into turning algae-fed brine shrimp into oil.

David T. Kingsbury, chairman of LiveFuels’ scientific advisory board and a former assistant director of the National Science Foundation, said he was skeptical at first, too, “but I’ve come around. It hasn’t really been fully tested yet, but it seems like a reasonable idea,” he said

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