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Capitalism to the Rescue?

[fa icon="calendar'] Feb 5, 2013 9:32:58 AM / by Carol Pierson Holding

By Carol Pierson Holding

Like many people, my faith in capitalism was badly shaken by the crash of 2008 and its caraftermath. I sat by, appalled as some capitalists denied climate change and used the economy as an excuse to continue their planet-destroying practices.

I rooted for regulation, until Obama, who once seemed to be the environmentalist’s last great hope, declared his second term energy policy would be “all of the above.”

Given this lack of resolve, I was surprised to read in last week’s environmental website Sightline’s that US oil consumption is actually falling:

US Energy Information Administration suggests that total oil consumption in the United States fell by about 1.5 percent last year — meaning that the country as a whole used about as much oil in 2012 as it did in 1994… (even as) population grew 19%.

How can this be?  Since the comparison goes back to 1994, we can’t credit the recession. The large bulk of oil consumption is from transportation, and as laid out in painful detail in SmartPlanet, the drop is not due to greater vehicle efficiency. So what is driving this drop?

The timing suggests the drop is price-related: per capita oil consumption has fallen most dramatically since 2004, when oil prices started rising sharply.

To the planet’s everlasting gratitude, higher oil prices lasted long enough this time to launch a revolution in transportation. Think about what’s happened just over the last few months:

  • Car-sharing moved into the mainstream. Avis, which leads the industry in CSRHub’s social responsibility ratings, paid $500 million for the largest car-sharing company, Zipcar.
  • United Airlines completed its first all biofuel jet flight. The company subsequently placed an order large enough for biofuel companies to scale to cost effective levels.
  • The Department of Defense, the world’s largest consumer of energy consuming $17 billion of fuel in 2011, is courting Cleantech venture capitalists. Washington’s Clean Technology Alliance hosted a conference last week in Seattle that featured Robert Gates, former Secretary of Defense and Sharon Burke, Assistant Secretary of Defense for Operational Energy. Why are these heavyweights giving their time to a Cleantech meeting? Price instability puts its budget at risk; far worse, having to move oil in battle zones creates human risk. Solar-powered mortar pits were Burke’s exemplar, formerly fueled by highly dangerous helicopter missions.
  • Most exciting, the driverless car is road-ready. As described in Chunka Mui’s outstanding series for Forbes Magazine, this innovation could save 1.9 billion gallons of gas/year and their resulting emissions in the US alone, at a cost to consumers that is somewhat less on average than owning and operating a car. The technology has been road tested by Google for 300,000 miles as well as several car manufacturers and is looking for a market.

And U.S. consumer acceptance is “closer than you think,” according to Mui, who sites the younger generation’s comfort with technology and population segments such as the elderly and the disabled who are unable to drive themselves. The early forces that held back air travel – fear of crashes – are also selling points for the driverless car, which promises to reduce accidents by 90%.

These examples are democratic capitalism at its finest. After 50 years back-and-forth on conservation and environmentalism, gas prices creep out of America’s comfort zone and national public opinion shifts. Over the next few years, investors get serious. Bedrocks of conservatism like the DOD, the airline industry and car-makers find the will to act.

Climate change has found a potentially scenario-changing champion in capitalism.

Am I just the relentless optimist to think that capitalism can save us? I’m all for increased regulation of the capitalist money machine to control unfettered greed. But here is the free market system at its best. Makes you want to believe again, doesn’t it?

Photo is courtesy of griffithchris via Flickr CC

Carol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on nearly 7,000 companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on nearly 7,000 companies from 135 industries in 82 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

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[fa icon="comment"] 0 Comments posted in Avis, capitalism, car sharing, cleantech, climate change, Environmentalism, Forbes, Google car, Sharon Burke, US Energy Information, vehicle efficiency, Uncategorized, Obama, oil consumption, Robert Gates, solar, United, Biofuel, Carol Pierson Holding, Chunka Mui, CSRHub, driverless car

Auto Industry Market Leaders Validate Car Sharing

[fa icon="calendar'] Oct 25, 2011 6:15:44 PM / by Carol Pierson Holding

By Carol Pierson Holding

2128017818_af64ea8e1d_o (1)In the early 2000s, car sharing was a small-time counter-cultural service offered by community organizations in liberal and university markets. You heard about bigger companies tip-toeing around the market. Enterprise quietly started renting its cars by the hour to local residents in 2007.

Then suddenly, beginning right around Labor Day, concrete announcements from market leaders in cars and car leasing are everywhere.

Ford announced it would supply 1,000 Focus cars to ZipCar, hoping ZipCar’s young customers would eventually buy the cars. GM partnered with start-up RelayRides to allow GM car owners to share their cars using a cell-phone app and GM’s pre-installed OnStar system to unlock cars.

My favorite headline appeared in the New York Times on the 10th anniversary of 9/11. A small article in the “In Transit” section reported just the kind of anti-consumerist shift that some hoped the attack would provoke: “Hertz on Demand Enters the Car-Sharing Race.”

As green pundits bemoan our consumer society, the culture is quietly morphing to slow the amount we buy. We can first thank the recession. An article in the Wall Street Journal covers a new phenomenon of repairing appliances rather than replacing them and how businesses are adding help lines to aid home repairs. Sales of smaller cars  surged in April due to the high cost of gas, which spurs sales of hybrids and electric cars, which slows the amount of gas we consume. Houses are built smaller. Young people value having less stuff.

Many of us, young and old, are realizing that ownership is a time-sink. Unless you are a natural mechanic, carpenter, electrician, plumber, techie and tinkerer, taking care of things is a largely unpleasant task. And if you think hard about this new way of thinking about possessions, you just might see a whole raft of new business opportunities.

And what better example than car sharing? I first heard about the concept when a board member of City CarShare (CCS), a not-for-profit start-up in San Francisco, asked me to help them. Funded by state and local grants and given free space to park its cars, CSS was a community service organization whose purpose was to reduce traffic in San Francisco and reduce the growing parking problem. CCS was founded in 2001, when a raft of city-specific car sharing services were sprouting up in small- and mid-sized cities.

At a time when CCS was losing members due to cost and operational problems, its primary positioning was the “strong sense of community” it shared with its members.  How could it beat back ZipCar, the aggressive start-up intending to steal the market with lower rates, an array of cars including hip luxury models, better online app design and a more streamlined process?

In the end, there was room for both. CSS is still flourishing in San Francisco and the surrounding Bay Area. CCS’ latest coup was accomplished in partnership with City government: On-street parking that will provide CSS cars downtown. ZipCar is still in San Francisco, but has also expanded way beyond. After a successful IPO earlier this year, the company now has 600,000 members in the US, UK and Canada.

But as exciting as the evolution from public to private “self-sustaining” car-sharing was, it is positively thrilling to see the big players jump in – in spite of the fact that they will lose business to this new industry. The research firm Frost and Sullivan estimates that that every ZipCar replaces 15-20 autos.

So why is Detroit embracing this trend? Maybe the bailout made them more willing to try new ideas. Or the Prius encouraged them to jump on new markets. Or possibly they heard that corporate fleet managers have approached ZipCar.

Or maybe it really is a change in the culture. ZipCar now has locations in Laurel Heights, the shopping district for San Francisco’s posh Pacific Heights, and in New York’s Upper East Side, home to Gossip Girls. Hertz claims one of its advantages is that their cars are not branded with car sharing labels the way that ZipCars are. And maybe that will work better for the matrons of Laurel Heights. But for the new generation, ZipCar may be the new iconic car brand.

Carol Pierson Holding  writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHUB.com, a website that provides sustainability ratings data on 5,000 companies worldwide. Carol holds degrees from Smith College and Harvard University.

Image courtesy of akseabird via Flickr (CC).


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[fa icon="comment"] 3 Comments posted in car sharing, corporate social responsibility, CSR, Enterprise, Ford, GM, Uncategorized, socially responsible investing, sustainability, ZipCar, Carol Pierson Holding, carsharing, City CarShare, corporate responsibility, CSRHub, Hertz, SRI

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