Choices: Compliance or Leadership

(Originally published in the July 2012 issues of Merchant Magazine and Building Products Digest.)

Starting from a clean slate confers all sorts of benefits.  For new merchants, ones just starting up (a rare breed, I know), it’s relatively easy to develop a green business model and brand, stock only greenest-in-class products, and forge winning customer relationships with green builders and remodelers. 

For those saddled with the baggage of history, existing customer and supplier relationships, and predictable revenue streams, it’s a different story.  How do you green your product lines, bring your existing customers with you, while appealing to a new breed with rising green expectations? 

We’ve been dealing with these questions in this column for the last several years.  Based on personal experience, as well as observations of what has worked for others, we’ve drawn the conclusion that any merchant can become a green merchant, and inevitably, every merchant must.  But it is a difficult journey fraught with many compromises.  The recent kerfuffle over a new credit category proposed for the latest incarnation of LEED 4 highlights one of the trickiest.  

First, the kerfuffle.  Without getting too bogged down in technical detail, the main issue is the proposed “Avoidance of Chemicals of Concern” credit, which aims to raise the bar on indoor air quality by eliminating certain chemicals in emitting products and that certain products include disclosure of chemicals used.  In one part of the proposal it references REACH, an EU program that monitors chemicals.

The American Coating Association took exception in widely publicized comments it submitted to USGBC, arguing that compliance would hurt the market.  They suggested an alternative, compliance with 2007 California Air Resources Board Suggested Control Measure, instead.  Even 61 members of Congress got involved. 

There are two points to be made here.  First, let’s recall some recent compliance history.  There were a few industry leaders who saw new CARB regulations coming in 2007, did nothing, and were forced to take back their non-compliant product from retailer shelves and distributor warehouses.  Second, LEED does not require compliance.  On the contrary, it aims to identify leadership­ – that’s what the “L” in LEED stands for – and more to the point, it is voluntary.  No manufacturer is required to make, test, or certify products that meet LEED credits.  This is an all important difference that separates compliers from leaders.

For merchants trying to create a winning, green formula being able to identify the difference between products and manufacturers aiming for compliance, and those focused on leadership, is crucially important. Who would hire a builder or an employee, whose main selling point is compliance with minimum regulated standards?  Don’t we all want to work with leaders who go beyond the minimum and set their own standard?  Don’t we want to be leaders?  But the unfortunate reality is that because of longstanding channel marketing practices, with manufacturer spiffs, promotional deals, brand or industry dominance, and so on, this is also an area where compromises are inevitable.  And probably, there are long-term relationships involved, too, which can make it tricky.

So, what to do?  First, develop an understanding of current vendor relationships and identify the manufacturers with a commitment to continuous product improvement, innovation and leadership.  Second, start strengthening relationships with the leaders and collaborate on new programs wherever possible.  Third, identify gaps and seek new greenest-in-class alternatives in every category.  Fourth, engage those manufacturers in the compliance camp and encourage a change in their product development philosophy. You never know, they just might listen.  Finally, develop a long-term trend toward greenest-in-class products.  It may be tricky to manage existing relationships and the short-term benefits they confer, but in the end, working with leaders delivers its own rewards.

Adapting to Drought and Deluge

(Originally published in the May 2012 issues of Merchant Magazine and Building Products Digest.)

The weather lately has been weird and wild, but get used to it.  It’s the new normal.  Climate scientists tell us that weather extremes will be more common and that long-term patterns are shifting.  This doesn’t just make the weather report on the evening news more interesting.  Consider, for example, that shifting rainfall patterns can affect water supplies, livelihoods, and lifestyles.  Some communities are facing more severe drought or drought for the first time in living memory.  Some places are seeing much more rain, and some are getting their rain or snow sooner or later in the season.  Any of these changes can cause big problems for communities who fail to adapt. 

This is where you, the home and shelter dealer, can come to the rescue.  Changing weather patterns, whether drought or deluge, create opportunities for you to do good for your community and do well while doing it. 

For starters, educate yourself about water issues in your areas of operation.  If you’re in a community already affected, you may already be aware of local and regional rainfall patterns and water supplies.  If not, there are good resources online, such as National Oceanic and Atmospheric Administration’s (NOAA) website.

Second, build your expertise in those mitigation and adaptation strategies your community needs.  In a drought?  Look into rainwater harvesting, greywater recycling systems, high-efficiency toilets, even composting toilets. (Believe it or not, collecting the rain that falls on your roof is illegal in some places, and residential greywater systems are not approved in all communities.)  Buy and read “Rainwater Harvesting for Drylands and Beyond”, by Brad Lancaster, one of the nation’s leading experts, then share it with your staff.

If your community faces periodic deluge and flooding, there are short term mitigation and longer term adaptations to evaluate, too.  For example, in West Coast urban areas facing huge El Niño storms, rainbarrels can help reduce the runoff that overwhelms storm sewer systems. Softening urban hard surfaces and hardscaping to allow for “slowing, spreading, and sinking” rainfall, also reduces runoff and recharges aquifers. Permeable pavers, anyone?  And for flooding, dry flood proofing measures and elevation may be viable short term strategies for dealing with periodic flood risks in some instances.  But flood mitigation is a complicated legal and technical domain – do your homework before diving in.

Once you and your key staff are prepared, start building the stock and services around the solutions best suited for your community.  Water conservation measures inside the home might be one category that works in every part of the country.  And nearly all toilet manufacturers offer High Efficiency Toilets, but have a look at Niagara Conservation.  They make it easy to source a range of water saving devices, including their Ultra High Efficiency Stealth .08GPF toilet. 

I’m also a big fan of greywater recycling.  It’s still early days for residential systems, and most solutions are do it yourself, or “green it yourself,” projects, but this presents a wonderful merchandising opportunity.  Pull all the right components into a robust display, along with the right tools, some books, and related products.  Check out GreywaterAction.org for ideas. 

And catching the rain - it’s a no-brainer for many regions of the country.  The key component is storage and the most innovative solution I’ve seen is RainTechnologies’ RainSpace.  It’s flexible, capacious, and low cost.

These kinds of solutions may require some thinking outside the box and a little extra effort.  But they can earn LEED credits for your green builders, conserve water, and improve quality of life in your community.  You’ll be doing well by doing good.

Green Bricks and Blocks

(Originally published in the April 2012 issues of Merchant Magazine and Building Products Digest.)

Durability is one of those green building attributes that doesn’t get enough attention.  Things that last a long time don’t need to be replaced as often, which saves money, material, and energy.  Durable items that are reusable and recyclable are even better. And ones made from abundant, recycled, or easily renewable material right from the get go are, theoretically, the best. 

So, why doesn’t the ubiquitous and overlooked “brick” get more attention from green pundits and sustainability gurus?  It’s durable, reusable and made from abundant materials, clay and slate.  Where red bricks fall down is high carbon footprint.  Bricks require high-temperature kilns, which consume lots of energy, and that’s a deal killer for most green architects. 

But there’s more than one way to make a brick.  Innovations in recent years, as well as shifting attitudes about older brick making technologies, are combining to make the category much more interesting.  Are we close to a renaissance in building with brick?  Who knows?  But for building materials dealers looking to refresh an ancient category there are innovative new solutions worth evaluating.

Let’s start with the basic red brick.  Red brick has a specific aesthetic that may represent an important aspect of a region’s building vernacular, or may simply be appealing to individual customers.  If it has to be red brick, there is a green alternative.  Bricks made with fly ash, such as those from CalStar Products, can capture that same look and feel, but with a fraction of the carbon foot print.  They’re made with an industrial waste product, fly ash, and are steam cured rather than kiln fired, and at comparable price and performance to the traditional clay brick. 

Fly ash bricks are an innovation that could very well capture the imagination of architects, specifiers and builders, and begin to gain significant market share at the expense of traditional red bricks.  They fit well with mainstream attitudes and represent a safe way forward.

For some dealers there are niche opportunities to push the envelope a little further.  Recycled paper offers one of the more unusual building materials currently testing the boundaries of what’s possible.  A new company in Texas, MasonGreenStar is testing the market with GreenStar Blox, bricks made from recycled paper, cement, and proprietary additives.  The bricks weigh only about a third of comparably sized adobe or compressed earth blocks (CEB).  This technology is not ready for prime time just yet, but it may represent an important alternative building material in the future.

In a return to the past, natural building projects are often focused on using materials like adobe and CEB which can be sourced on the building site.  While many dealers are stuck in a “stock and ship” paradigm, on-site material sourcing and production presents a different kind opportunity for the enterprising green dealer. 

Renting compressed earth bricking making equipment and hosting training courses could be business opportunities for dealers currently supporting natural builders, or those inspired to evangelize natural materials.  Earth Tek is one manufacturer of brick presses and blenders worth a look.  But if you’re interested in building your own, you can do that, too.  Open Source Ecology is developing open-source plans for what it calls the Global Village Construction Set, machines that could be built by almost anyone that would be necessary to deliver the industrial needs of a small town, including a CEB press.  For some, this kind of brick making might provide new sources of revenue as durable as the bricks themselves.

Green Spring Training

(Originally published in the March 2012 issues of Merchant Magazine and Building Products Digest.)

March is my favorite month.  Why?  Spring is in the air, at least in some parts of the country.  And baseball is just around the corner.  And now, some market research has come out demonstrating that green building is poised to lead this industry out of the doldrums.  Things aren’t back to normal, or back to a new and different normal, not just yet.  But if you’ve been working to bring your retail or wholesale operation into the green big leagues, this could be your breakout season. 

The study from McGraw Hill reports some interesting numbers that should inspire optimism.  The share of new single family homes built to a LEED or equivalent standard reached 17% and rising to about a third of the market in five years.  Builders report that marketing green homes is easier and the majority of customers are willing to pay a little more.  Among builders who are doing some green projects, 39% report that green work is having a positive impact on their bottom line, compared to 90% of builders who are fully dedicated to green.  There were similar results for green remodelers.

I want to focus on one takeaway from this.  The reason dedicated green builders and green remodelers report better results – and are looking forward to better prospects, too, I might add – is because they are focused.  They have the knowledge and skills, and therefore the credibility.  They know what they’re doing and they believe in it.  These are the companies driving green forward and these are the companies getting the bigger share of the projects.  If you’re looking to grow your green business, these are the pros you want on your team.

Given the strength of this trend, making green building an increasing focus of your own business is an obvious forward thinking strategy.  Equally important is building strong relationships with the leading green builders and remodelers in your market area.  This may seem obvious, too, but to build productive relationships these four key points are worth repeating.

First, be prepared to walk your talk.  No amount of schmoozing will win customer loyalty in this arena without expertise and knowledge to back it up.  Don’t rely on manufacturers and product knowledge to see you through.  Go the extra mile and develop internal expertise in LEED or other residential green building programs.

Second, go to them.  Don’t expect them to come to you.  Visit them at their office, their job site, green building association meetings, trade shows and conferences.  Most regions have a USGBC chapter or equivalent – join it.

Third, bring value to the relationship, right away.  If you can help them win a new project, introduce them to a talented new sub, point them to an innovative new solution, they will come to see you as vital part of their business ecosystem.  When this happens, they will start bringing value to you.

Fourth, dig deeper and find expert builders, remodelers, retrofitters with specialisations that make sense for you and your region.  Energy retrofitting, rainwater harvesting, green roofs, and solar are all hot areas – maybe they’re ripe for building new relationships, too.  Develop the right product categories they need, host in-store events, and develop referral programs.

At the end of the day, it’s the customer relationships that sustain any business, especially during lean times.  This industry is adopting green building at an accelerating pace and demand is showing signs of picking up.  It’s the leading builders and remodelers who are winning an increasing share of the business.  By getting together you can build a solid team and make this a winning year.

Two things for 2012: Energy and Community

(Originally published in the January 2012 issues of Merchant Magazine and Building Products Digest.)

It’s January, a time when we’re all staring into the headlights of an oncoming new year bearing down and wondering how it’s all going to turn out.  Perhaps you’ve had the same premonitions I’ve had about 2012.  Clearly, there are going to be some rough patches.  It’s an election year and the electorate seems in a bad mood.  The economy seems in a bad mood, too, with high unemployment, rising foreclosures, and little building activity. 

Some dealers will do well and some won’t – it’s going to be a mixed bag.  So what can you do to put yourself in the former category?  It all depends, of course.  Do you serve mostly pros or consumers?  Are you are a chain or a locally-owned indy?  There is no one size fits all strategy.  I’ve said it before and I’ll say it again, green dealers seem more buoyant, more resilient.  But I think this year’s going to take a little more effort.  What’s my advice for taking your green strategy to the next level?  Two things:  energy efficiency and community.

First and foremost, make energy efficiency job one.  If you’re a dealer in this channel this needs to be top of mind for everything you do.  I’m talking about the whole picture – operations, products, merchandising.  If you can find a way to pay for it, do a lighting retrofit, install solar panels, insulate every building you’re heating. This is going to reduce your operating expenses and demonstrate your leadership.

Stock products that will save money for your customers:  insulation products that meet LEED or other green building program criteria, triple-glazed windows, insulated doors, LED lighting.  Finally, do your homework on rebates and other incentives and plaster the information everywhere.  Label products that are energy efficient and can reduce bills.  Stocking the right products and merchandising them effectively will help maximize your sales.

(Besides, if you don’t who will, BestBuy?  Yes, apparently.  They’re piloting a new home energy retail concept.)

Secondly, do everything you can to get closer to your community – customers and other stakeholders, too.  Whether you’re primarily serving pros or consumers, be energetic in learning about your customers’ needs and finding ways to serve them.  Who is building houses?  Who is remodeling?  What are homeowners doing on their own?  Host events in your store that bring your buyers and customers together and get them talking.  Walk the aisles and the yard with your customers and listen carefully to their feedback.  If you’re getting this information from manufacturer reps you are listening to the wrong people. 

Don’t be afraid to leave the comfy confines or your store, either.  Attend local USGBC meetings.  If your community has a “shop local” campaign or a business alliance, such as a chapter of BusinessAlliance for Local Living Economies, for example, join it.  And don’t forget other groups who are active in your community.  Forging these links may make all the difference this year.  It will keep you from stocking useless inventory and will identify the products and materials your customers need.

Energy and community.  It’s simple and clear.  It provides a solid mission for your staff that’s imbued with optimism.  It can provide the basis for a marketing campaign.  And if you follow through, if these are truly priorities for your organization, you will be doing all the right things to appeal to green builders and remodelers, home owners and DIYers.  Certainly, you’ll learn about other needs, products and opportunities along the way, too.  And whatever turmoil the year may have in store, I believe, you’ll find that energy and community will see you through.

Innovation in Interesting Times

(This was originally published in the December issues of Building Products Digest and Merchant Magazine.)

This dismal year is almost over and most people won’t be sorry to see it go.  On the other hand, if apocalyptic 2012 predictions are correct, the New Year will see the Mayan calendar coming to an end and so, apparently, will the world.  Yikes!  There’s a curse, reputed to be Chinese, that goes, “may you live in interesting times.”  Well, we’re living it.

But even in these interesting times, I still find reasons to be optimistic.  You don’t have to be green to do well in our business, but green dealers tend to do better.  That’s encouraging.  This year, there were several innovative products and materials that were either launched or found traction in the market.  That’s also encouraging because innovation is exactly what the home and shelter supply chain needs – in products, materials, merchandising - the whole package.  And it seems to me that’s exactly what’s in the pipeline for next year and beyond.  Here’s what I’ve got my eye on.

For several years, we’ve seen small independents roll out green-only retail concepts and doing well in their respective niche markets.  But this year Green Depot (www.greendepot.com) took a step into the “big leagues” when they acquired EcoHaus on the West Coast, making them the first coast-to-coast green home improvement chain.  They’ve demonstrated that green can scale.  Who’s next?  It might be new, Austin-based TreeHouse.  It’s big, well designed, focused 100% on green building, and is an easily replicable concept.  These are but two examples of the shape of things to come.

On the product front, it’s hard not to get excited about the innovations in energy efficiency.  Perhaps there’s no better way to gauge what’s happening here than to look at the least sexy product category:  insulation.  There’s a place for mass-produced  formaldehyde-free, high recycled content fiber glass, but for a paradigm shift, you’ve got to look at what small companies are doing.  For example, we’ve talked about hemp as a building material, but now there’s hemp insulation, too.  American Lime Technology’s Breathe™ Insulation is made from hemp and flax fibers, is breathable and functional, with obvious green benefits over conventional materials.  And then there’s insulation made from fungus and agricultural waste – hard to get greener than that.  Designed by Ecovative Design (www.ecovativedesign.com), Greensulate™ is currently undergoing testing and may come to market next year. 

If insulation is the least sexy product category, then thermal mass, as such, is the least commercialized.  As passive solar designers have known for decades, properly managing thermal mass and solar gain results in efficiency and comfort.  For example, a granite south-facing wall absorbs heat during the day, keeping interior spaces cool, re-radiating that heat at night, keeping interiors warm and comfortable. 

Imagine if, instead of logistically unfriendly granite, thermal mass was a product that came in rolls, like bubble wrap, that was easily installed in walls and ceilings like, well, bubble wrap.  Turns out someone already has.  Phase Change Energy Solutions (www.phasechange.com) has developed BioPCmat, a roll of bubble wrap like material that is essentially thermal mass in a roll.  Properly installed, BioPCmat can result in 30% energy savings.

Products like these offer radical new approaches to products and materials.  And this is just the tip of the iceberg.  Philips recently unveiled the Microbial Home design concept including a kitchen that produces its own cooking gas – methane – from bathroom and kitchen waste.  Whether these product innovations take off in the marketplace is an open question.  But innovation breeds innovation.  If this pace of new product development continues, 2012 could well be very interesting, but in a good way.

Made Greener in a Factory Near You

(This article was published in the November, 2011 issues of Merchant Magazine and Building Products Digest.)

Over the last thirty years, the manufacturing core of the United States has been dismantled piece by piece and shipped off to other countries.  Looking for competitive advantage through least-cost labor, brand owners and manufacturers have gradually concentrated in China, which now accounts for a large proportion of product sold through this channel.  Even commodity products are very likely to be sourced from China or other faraway places, and not without complications.  Has anyone forgotten the drywall controversy? 

Low prices are good, or so market logic would dictate, but in a globalized economy there are unintended consequences.  Economists have argued that the American middle class, made up of folks who save to buy a house or remodel the one they own, has been significantly diminished by the loss of good paying manufacturing jobs.  This has had a devastating effect in hundreds of local economies that still struggle with high unemployment and underemployment.  In addition, cheap goods and materials from abroad may have other, hidden costs.  Lower quality, for example, can slow productivity or require expensive remediation. 

From a green point of view, there’s another unintended consequence.  Most imported goods and materials will have much higher embodied energy, in other words, a larger carbon footprint.  Shipping goods across the ocean spews tons of carbon into the atmosphere.  More importantly, a foreign factory may get its energy from inefficient coal-burning plants, so before the import is even shipped, its carbon footprint may already be wildly off the charts compared with a domestically made alternative.  There may be other environmental consequences, too, where factories are located in countries with few safeguards in place against pollution, deforestation, etc.

Reducing the embodied energy in buildings is the main motivator behind USGBC’s LEED credit for locally-sourced goods and materials.  This is good, but does it matter?  Is anything even made in this country anymore?  Yes and yes.  Obviously, sourcing goods and materials close to the building site means lower embodied energy, lower amounts of carbon emitted to the atmosphere.  It also helps to support local businesses and encourages builders to incorporate local materials.  Lumber, stone, strawbale, cob – regional resource strengths will help recreate regional building vernacular, too, providing a welcome break from the homogeneity of mass home production.  Shortening the supply chain also delivers strategic business benefits, such as less risk of disruption from overseas events and, potentially, more collaborative relationships between manufacturer and dealer.

And yes, there are still plenty of products made in this country.  A Montana builder made news promoting his 100% American built house (www.theallamericanhome.com), demonstrating that it can be done and with little extra cost.  It also showed that there’s strong interest from builders and prospective home owners to source their goods closer to home. 

So, what’s a good, green dealer to do?  Work with your distributors and manufacturers to identify where the products and materials are made, then identify opportunities to make some changes.  Shorten the supply chain.  Products made closer to home are better or “greener”, theoretically, than those made farther away.  For example, qualified products and materials made within 500 miles of the jobsite earn LEED credits.  Weigh the costs and benefits wisely – a toxic product made next door is always worse than a green import from Europe.  Do work with local manufacturers to green up their product line, if necessary.  In the store, develop signage that educates and informs your customers about the benefits of buying local or buying American.  Finally, resist the temptation to wave the flag, but do make the case based on quality, economics, and environmental benefits, there’s a strong one to be made.

Hot Cities and Cool Roofs

(Originally published in the September 2011 issues of Merchant Magazine and Building Products Digest.)

This summer’s heat waves have been horrendous.  Hot weather is known as a silent killer and is responsible for more weather related deaths than tornados, hurricanes and blizzards, combined.  Summer days are hotter than they used to be, setting all kinds of records, but even worse are the hot nights.  Overnight lows are also setting records for high heat, making it much more difficult for at-risk populations, such as the very young and very old, to recover. 

In cities, the problem is worsened again by something called the Urban Heat Island Effect.  Cities are paved with asphalt and built up with concrete and other materials that absorb solar radiation during the day and re-radiate it during the night.  Cities can be 15° F hotter in the daytime and 22° F warmer overnight than neighboring suburbs.  More city heat means more air conditioning and more electricity consumed, leading to blackouts and, of course, more carbon emitted into the atmosphere. 

The heat island effect has been understood for a long time – I first learned about it in high school.  But more recent scientific knowledge indicates that we should expect more extreme heat waves like those this summer.  I’ve argued in this column and elsewhere (see our in-depth report, The Future of Home Improvement, here: www.williamverde.com), that dealers and distributors have an obligation to learn to anticipate changing climate and weather patterns in order to serve their communities, as well as boost their revenue.  In fact, as purveyors of building supplies, we are in a prime position to take the lead on mitigating the effects of hot summer nights and urban heat islands.

There are a variety of ways we can make our cities cooler, simply and affordably.  Replacing high thermal mass materials with trees and green space is one effective strategy and where we need to go, long term.  Living roofs are being boosted in major cities for just this reason.  But there’s another strategy that can deliver results in the short term, is less expensive, and offers opportunities for most dealers and distributors right now. 

Increasing albedo, or the ability of surfaces to reflect solar radiation, using special paints and coatings, or reflective roofing materials can dramatically reduce heat gain and electricity demand.  A white roof, for example, can reflect almost 90% of the sun’s radiation, reducing interior heat and the need for air conditioning.  And the savings are not trivial.  The White Roof Project (www.whiteroofproject.com) reports that about 10% of electricity produced by cities is used to compensate for the urban heat island effect.  If enough roofs were painted white, the nation could be saving billions of dollars and hundreds of lives.  And dealers could be doing well, while doing good.

Two excellent resources to help you stock appropriate roof coatings for your community, or improve your existing product mix, are Energy Star (www.energystar.gov) and Cool Roof Rating Council (www.coolroofs.org).  Keep in mind, reflective shingles and roofing tiles offer effective solutions for residential applications, too.  But don’t stop there.  Develop a promotional strategy that combines in-store materials with larger-scale efforts in the community.  In-store signage should educate customers, highlight rebate opportunities, and promote city-wide campaigns.  Get involved and get your manufacturers involved.  New York area dealers might ally themselves with the White Roof Project, for example.  Dealers in other sizzling cities might think about creating their own “white roof projects” in conjunction with local city agencies or non-profit organizations.  Last but not least, teach your staff about the urban heat island effect and the importance of taking measures to reduce it.  It can literally save lives.

The New Paradigm: Zero-Carbon Shelter

(This was originally published in the August 2011 issues of Merchant Magazine and Building Products Digest.)

In this industry, there are three areas of opportunity that remain relatively bright given otherwise stagnant economic conditions.  Obviously, one is green building.  The other two are renewables and retrofits.  These three areas are deeply interrelated and will continue to grow, working to reconfigure the supply chain.  Dealers who ignore this fact, waiting for the old days to return, do so at their own peril.  On the other hand, given the buoyant performance of these sectors, dealers that develop and expand their core competencies to incorporate one or more of these areas will likely thrive.

The question of how one should go about approaching these opportunities remains.  Clearly, the pursuit of these opportunities must eventually translate into products on the shelf, retail floor or yard, or in services.  But should dealers expand current categories, diversify into new categories, or streamline operations down to one speciality?  All good questions every dealer must judge based on their own set of circumstances.  But even more fundamental, dealers must once and for all abandon the old “sticks and bricks” paradigm and adopt a new way of thinking about their business.

I mentioned above that green building, renewables and retrofits represent the brightest sectors in the supply chain.  At the core of each is energy - reduction of energy consumption and/or the generation of energy from carbon-free and renewable resources.  In fact, what they represent is the new paradigm that will dominate this industry for the rest of the century:  zero-carbon shelter.  When dealers comes to grips with what that means in terms of the products and materials they stock, the services they provide, and what their customers need, the proverbial LED lightbulb goes on and the path forward is illuminated.

Translating the “zero-carbon” view into products and services that may benefit dealers and their customers becomes straightforward.  For example, analysts project that demand for insulation and installers is going to grow by leaps and bounds in the coming years, whether or not new homes are built.  The existing housing stock – millions of homes - will remain standing and occupied for decades to come and most need improved insulation in order to survive rising heating and cooling costs, especially in the context of weather extremes. 

There are now many formaldehyde-free, recycled, and natural products already on the market which can be stocked or drop shipped.  Big companies like Johns Mansville, Knauf and Bonded Logic provide a range of these products and will serve the needs of production builders and retrofitters.  For those looking for natural products, smaller companies like Oregon Shepherd and their wool insulation, or Ecovative Design (www.ecovativedesign.com) and their rigid panel Greensulate products, which is made from mushrooms, can round out an insulation merchandise mix. 

Even if demand for insulation is apparently strong, it doesn’t hurt to have the tools to sell it.  Thermal imaging cameras, such as those from Leica and Flir, can be used to create a picture of where a house is leaking valuable heat.  This technology is indispensable for installers and retrofitters, and should be for dealers, too.  Stock these devices; sell, loan, or rent them, and sell more insulation as a result.

There’s much more that goes into a zero-carbon shelter and many more opportunities to expand, diversify or specialize.  In the building shell, super efficient windows and doors are important energy-conserving components.  Inside, LED lighting and ground source heat pumps can also be part of a zero-carbon building system; on the roof, thermal solar and PV.  Of course, sticks and bricks will remain part of the picture, but now the context has changed.

Boosting Sales With Green Paint

(This article was originally published in the July '11 issues of Merchant Magazine and Building Products Digest.)

The new normal looks to be a mix of fewer home sales, but more remodeling and redecorating. Meanwhile, all indications are that green products and materials continue to enjoy strong demand. And if customers are more discerning when evaluating so called “green” purchases, they’re also looking for more local solutions, or at least made in the USA, too. To me, these conditions paint a clear picture about how to change with the times and boost sales in the second half of the year. Yep, I’m talking about paint.

Let’s assume every LBM dealer sells paint and other brush-on coatings. By now, every dealer should have at least one low-VOC offering – low, as in 50 g/l or less. Nearly every major manufacturer offers at least one line, so there’s really no excuse. But making the minimum effort with one line of marginally “green” paint is leaving money on the table. The industry has matured and there are lots of good options available. Now that economic conditions have made a move toward more sprucing up, it’s also time to spruce up the paint department.

In addition to directly contributing to the top line, a strong paint department can bring in new customers and boost sales in other product categories, too. Therefore, evaluating and refreshing a strategically important category like this deserves an appropriate level of understanding and commitment. And every case is unique. So, there’s much more to say about this topic than I can squeeze into the remaining space of this column.

But with that caveat, there are two things to look at when improving this category: mix and merchandising. The product mix should have a strong anchor brand that will bring in customers and deliver credibility. While national manufacturers may have a quality low or no-VOC line and a suite of economic incentives to close the deal, it might be more beneficial to bring in a strong “green-only” brand, either instead or in addition. Brands such as Yolo, AFM Safecoat and Mythic have steadily built up big reputations with both health-conscious and sustainability-minded homeowners and professionals.

With an anchor established, fill in with niche products. With growing demand for non-toxic, all-natural products, adding a natural or clay paint line could make sense. Earth Paint or Ecos Paint might be good options. And for protecting the natural look of wood, whether walls, floors or exteriors, there are natural options, too. Vermont Natural Coatings, made with poly whey, and Rubio Monocoat, made with flax, are two worthy options, as is Penofin Verde, made from rosewood oil. There are more options out there, including ones from small local manufacturers that might be just the thing for the “locavores” in the community.

As with any good mix of new products, effectively merchandising them is essential. If you’re bringing in a new product line, work with the manufacturer to help with promotional pricing, advertising, and an in-store event. Just as important, make sure all your staff is fully briefed with relevant product knowledge.

Communications strategy is also important. Make sure advertising and promotional messages are aligned with current remodeling and redecorating trends - accentuate healthy living, comfortable home environments, and natural aesthetics. Point out that “green” paints deliver added benefits, such as having low or no odors, which should be important for the pro customer, too. In the store, create hang tags, signage and end-cap displays that get people thinking. And finally, don’t miss obvious cross selling opportunities. For example, put natural paints together with non-toxic putty, reusable drop cloths and recycled paint trays.

Is Less Consumption Good for Retail?

(This was originally published in the June 2011 issues of Merchant Manager and Building Products Digest.)

The confluence of the Great Recession with growing awareness of how “consumerism” contributes to climate change, has led to a surging movement of people simplifying their lifestyles and sharing more of the things they need, rather than blindly acquiring more stuff.  In other words, more people are becoming more conscious consumers or disavowing the “consumer” label entirely. 

This is disaster for retailers, right?  Not necessarily.  For retailers committed to green business practices, it’s just another opportunity to serve their community.  And there are several ways that less consumption can be good for your bottom line, as well as for the planet.

As for the planet, it’s clear that there’s a broad spectrum of negative environmental impacts associated with manufactured products, which the short internet video, “The Story of Stuff” (www.thestoryofstuff.com), does a good job explaining.  It takes energy to make things and move them from one side of the planet to the other.  Then there’s disposal and the potential for toxic leachates to pollute groundwater.  The more we consume the greater the impacts, so obviously, the less we consume the fewer the impacts.  That’s the 30,000 foot view. 

Understanding this system is the first step in developing green business models that replace these inherent negative impacts with profitable, regenerative outcomes.  All well and good, but how can a merchant make money by selling less stuff?  One strategy is rethinking goods in terms of services, i.e., selling fewer goods, but selling more of the services those goods provide.   

While this has been a recent innovation in industries such as flooring (see InterfaceGlobal.com) or in extended producer responsibility (EPR) policies, the idea’s been around for a long time in our industry in the form of tool and carpet shampoo rental.  It makes sense to rent something that won’t get used very often.  And growing household preference for just that kind of economic conservatism is reshaping the kinds of relationships people are having with their stuff. 

A well known example is Zipcar.  For decades, no product/consumer relationship was as intimate (and Freudian) as the one between people and their cars.  But today, people are leaving that paradigm behind for the planet-friendly and economical choice of car sharing.  It is, perhaps, a new kind of “consumer” status symbol, but it is emblematic of a deeper movement that is redefining the role of manufactured goods in people’s lives and what it means to “consume”. 

People are looking to share almost everything:  cars, bikes, tools, and even skills.  The magazine, Shareable.net, tracks this growing phenomenon and reports about the rise of neighborhood work groups – neighbors organizing themselves to help one another tackle home projects.  That kind of thing recalls the days when communities came together for barn raisings.  Meanwhile, professional trades people are branching out into new kinds of projects and are looking for short-term rentals of specific tools, rather than having to invest in “retooling”. 

If customers want and need less stuff, then retailers must adapt.  Begin marketing your rental department’s green virtues.  For those not yet renting tools and equipment, now’s the time to start.  Talk to your pro customers and ask them what they need.  And I suggest diving even deeper.  Facilitate neighborhood work groups in your area and help create local tool lending libraries.  Rent space in your parking lot for Zipcar or other car-sharing.  Think outside the box, too.  Rent electric cargo bikes (www.cargocycling.org) or portable solar power generators for off-the-grid construction projects (www.portablesolarpower.net).  Getting into the shareable mindset will not only lead to more innovation, but will unlock new income streams and forge new customer relationships.

Adam Smith and Green Capitalism

(This was originally published in the May 2011 issues of Merchant Manager and Building Products Digest.)

In this column, we’ve talked quite a lot about the implications of green building and the wider sustainability movement for LBM dealers and distributors.  For the most part, the conversation has focused on evolving market opportunities, merchandising appropriate products, and creating operational eco-efficiencies.  But are the pursuits of “green” market opportunities and cost-saving efficiencies sufficient to make a business “green” or its leaders green capitalists? 

Devotees of Adam Smith might answer, “yes”, as long as such activity maximises profit. It’s the result that counts and if “the invisible hand” does its job, then what’s best for society will emerge naturally through the activities of masses of economic decision makers, each pursuing their own self interest. 

Of course, the economic world Smith inhabited was quite different from today’s global corporate economy.  But in at least one respect, the reality for a merchant capitalist two hundred years ago is very nearly the same as for many dealers in today’s LBM supply chain.  In Smith’s day, the merchant was intimately woven into the fabric of local society and “the invisible hand” operated within an ethical framework that assumed as given the interests of a wide range of stakeholders within the community. 

So, was Adam Smith the first “green” economist?  No.  But notions of green capitalism are becoming just as mainstream, being taught in leading business schools and adopted by leading corporations and green building companies.  For locally-focused members of the LBM supply chain, these new articulations of capitalism may already seem familiar.  But delving deeper and adopting new approaches to business leadership may hold long term strategic value.

For many, the term “triple bottom line” (TBL) has become the short-hand definition of what a green business is all about.  It was coined by John Elkington in the 1990s as a way of joining the concepts of “sustainable development” and “corporate social responsibility”.  The idea is that if businesses tracked their performance in the realms of social and environmental impacts, as well as profits, they might then be accounting for their full cost of doing business.  And in so doing, would seek to improve where performance lagged, ameliorating social and environmental problems along the way. 

Though this sort of formal accounting may be problematic at the moment, there are advantages for LBM dealers who adopt TBL principles or a similar approach.  Perhaps the best place to start is with a book that’s required reading for every Green MBA.  “Natural Capitalism”, by Paul Hawken (co-founder of Smith & Hawken), Amory Lovins, and L. Hunter Lovins, identifies the four principles of “capitalism as if living systems mattered”: radical resource productivity, biomimicry, service and flow economy, investing in natural capital.  In short, by reducing resource use, eliminating waste, rethinking the provision of goods in terms of services, and by treating sources of natural capital (such as local wetlands that naturally purify water, for example) as real sources of wealth to be restored, nurtured and grown, businesses can lower costs, maximise profit, and solve many of the world’s problems. 

This alternative vision of capitalism, and others like it, offers a useful strategic framework, especially in light of economic and social challenges we’re sure to face in coming decades.  This kind of thinking has already helped companies like Interface in the carpet industry and Steelcase in office furniture, lead their respective industries.  In any case, adopting a “natural capitalist” framework will lead a business toward best green and most economic practices as a matter of course.  For dealers seeking to win in the green building arena, becoming a green capitalist seems like an important and natural next step.

Practical Green Merchandising

(This piece originally appeared in the April 2011 issues of Merchant Magazine and Building Products Digest.)

Choosing winning product lines and getting them into the hands of customers is an art that, when practiced well, makes good merchants great.  The last few years, there’s been a rush by manufacturers to get their green innovations to market.  Many are going to be clear winners and will make a difference in transforming the built environment.  Unfortunately, along with the rush has been the slapdash - products presented as earning LEED credits, or being less toxic, or ecologically benign, when they are not.  Whether by deliberate deception or honest mistake, green washing has created confusion and skepticism in the market. 

It’s not so easy to pick green winners, but there are practical steps that merchandisers can take to reliably evaluate the green-worthiness of any product.  In general, the goal is to identify merchandise that meets certain criteria, both yours and your customers’.  There are a variety of product certifications and, of course, LEED and other green building rating systems provide relatively clear criteria.  But there is no master green products list to go by, and no matter how comprehensive, certifications and building rating systems are not going to cover all the product categories stocked in most stores and yards. 

But if you’re willing to roll up your sleeves and “green it yourself”, there’s another way to look at whether the merchandise you choose to sell is green worthy.  Start by asking:  Does it harm or benefit the environment? Does it pose health risks or promote healthy lifestyles?  Are communities positively or negatively affected in its manufacture?  Does it work?  Will it sell?  These questions should take in the entire lifecycle of the product, which includes looking at the impacts relating to raw materials, manufacturing process, distribution, use and disposal. 

The broad categories addressing human health and safety, ecological safety, and social responsibility provide the background for more specific product criteria and attributes – a partial list:

• Energy – products that conserve energy, produce renewable energy or are made from renewable energy sources. 
  
  
• Water – products that conserve water usage, especially the use of fresh, potable water, also product alternatives that don’t pollute water sources or aquatic eco-systems.
  
  
• Toxic chemicals – products that are made with non-toxic or least toxic, low risk chemicals and other components.
  
  
• Healthy and sustainable practices – products that contribute to healthy and sustainable practices, such as rainwater harvesting, composting, etc.
  
  

The evaluation process starts with the manufacturer who should provide credible product information, preferably with third-party documentation supporting their green claims.  That may not be enough.  Consult with independent experts and review third-party information on the internet, too.  There are several helpful databases online that will show what’s known about specific chemicals.  Comparing products in the same category will help to identify the “greenest” in class.  Finally, there must be a judgment about whether or not the product does the job and will sell – get a sample, take it for a test spin.

If the green merchandiser is defined by product selection, he or she is also defined by products not selected.  There are plenty of useful products for which there may be better or greener options.  But there are also junk products for which the only “green” option is that they simply not exist.  Every dealer in this supply chain has experience with junk, if only by accident.  These are products so poorly designed, manufactured so cheaply, and are so obviously heading straight for the landfill that they cannot be justified no matter how low the price point.  Eliminating the worst junk from inventory is not only practical, it’s also a virtuous step toward sustainability.

8 Great Projects for Greening Operations

(This article originally appeared in the March 2011 issues of Merchant Magazine and Building Products Digest.)

Want to be leader in the green building arena? There’s no better way than to demonstrate your commitment and know how by actually implementing projects on your own facility. Anyone can stock certified merchandise. And it’s easy to put out a few green hang tags on the shelf or signage proclaiming your eco virtues, too. But to really set yourself apart from the “me too” crowd, build valuable relationships with other leaders in the industry, and save money in the process, you’ve got to walk the walk. These days, it’s a little easier than it used to be. Depending on the type of project there may be government incentives available or a relatively motivated local bank ready to finance something with a solid green profile.

1. Energy retrofit – Make your facility energy efficient with better lighting, insulation, and mechanical systems. Then add renewable energy generation, too. Undertaking this kind project will pay dividends for decades to come. In the short run, build valuable relationships with those firms doing the work. In the longer term, as energy prices continue to rise, enjoy predictably lower costs.
   
   
2. Living roof and/or living wall – Installing a living roof delivers multiple benefits, including saving energy and giving your team experience in a young, fast growing market segment. Combine with water recycling systems for additional “wow” factor.
    
3. Cool roof – If you’re not ready for solar panels or a living roof, think about this: if the roof isn’t white, you’re might be paying too much for air conditioning. Paint it white, save energy – it’s that easy.
    
4. Water recycling – At first glance, conventional financial models may not make the quantitative case for water efficiency projects – water prices are kept artificially low. But if you’re operating in a region with stressed water resources, taking steps to reduce your demand can set a powerful example for your community. There may even be rebates available. Install HET toilets, rainwater harvesting and gray water recycling systems, and gain valuable experience you can use to promote these green practices to your customers, too.
    
5. Recycling for batteries, fluorescent lights, paint, electronics, etc. – This may prove to be more difficult than it sounds, especially if there’s no local, infrastructure, but will be well worth it in the end. These products contain toxic heavy metals and other components that pollute ground water. There are a variety of programs available benefiting a range of non-profit activities.
    
6. Zero waste – Reducing the waste generated at your facility will engage both staff and customers, and may reduce your waste haulage bills, too. Remember the Three Rs will help you get there – Reduce, Reuse, Recycle.
    
7. Replace portion of parking lot with community vegetable garden and bicycle racks – Don’t discount this project as being impractical or too costly. There will be plenty of people in the community willing to lend a hand. Encouraging bicycling reduces the carbon footprint associated with your facility. Planting instead of parking does the same and can provide fresh vegetables for employees, customers, or members of the community in need.
    
8. Shorten supply chain – Sourcing product and materials closer to home reduces transport costs. Depending on where manufactured, imports may already carry a high carbon footprint because of inefficient coal-fired electricity generation. On the other hand, local products can earn LEED credits for local building projects and, generally, will appeal to a growing number of customers preferring products and materials made in the USA.

Universal Green Product Database? Yes, Please!

(This piece originally appeared in the February 2011 issues of Merchant Magazine and Building Products Digest.)

I sound like my grandpa, but today’s green merchandisers never had it so easy. Back in my day – 2005 – there were few residential green building programs or product standards to consult. Online lists and databases of verified products were sparsely populated and behind the market. When I was asked to develop a green merchandising program, it was a challenge we met only by doing lots of extra work vetting products ourselves and assembling our own database. Though our methodology would be easy for non-experts to implement, the burden on a typical merchandising department is simply too great.

Thankfully, the last several years have seen tremendous maturation in the green building sector. The trails have been blazed and today’s merchandise managers have a growing number of information resources at their disposal. But trails are trails, and until sustainability is a fully mature, mainstream superhighway, (ironic choice of metaphor, I know), successful merchandisers must still invest time in evaluating their green product choices. There is still no universal green product database. On the other hand, there are a small number of valuable online resources that make the process of identifying “greenest in class” products a little easier.

The GreenSpec database from BuildingGreen.com has been one of the most trusted sources of green product information for years. The editors evaluate products against their own stringent criteria and avoid accusations of favoritism or bias by not accepting advertising or listing fees. It’s not a comprehensive list, but the products listed are often best in class. BuildingGreen offers news and analysis, too, and is a valuable resource that every dealer and distributor in the green building space should utilize regularly.

In the recent past, a common criticism of green building rating systems organizations is that they failed to provide relevant product information, also. Wisely, both national residential green building programs are developing their own green product information resources. The NAHB is creating a database of products that the NAHB Research Center has evaluated and approved for use in their National Green Product Standard program. However, it is virtually useless at this stage with a clunky interface and only a handful of products listed.

Alternatively, the GreenHomeGuide.com, founded in 2003 and acquired by USGBC in 2008, is not a simple directory of products. The site is based on expert advice delivered as focused “Know How” pieces or as answers to inquiries in the “Ask a Pro” section. Providing this kind of contextual information about products and materials can be extremely valuable for gaining knowledge about the category, alternatives, performance, and installation issues that simple databases will not provide. While it offers no product directory, per se, it does link to the GreenSpec directory.

There are other product lists and directories worth a look, too. Product certifying organizations, such as Scientific Certification Systems (www.scscertified.com), list certified products on their websites. But the need for reliable, transparent product information is huge and still largely unmet. New online directories have emerged to try to fill the gap. One of the best designed attempts to provide a LEED-oriented directory of products is EcoScoreCard.com, but it’s still too young to be comprehensive.

Green building culture values transparency and third-party verification, which has led to greater focus on life cycle analysis (LCA) and environmental product declarations (EPD) as a standard method for manufacturers to communicate the sustainability profile of their products. If widely adopted, such standardized product data would make development of a universal database feasible. That’s exactly what’s needed in order to create mainstream scale at the retail end of the green building supply chain.

The Long View

(This piece was originally published in the January 2011 issues of Merchant Magazine and Building Products Digest.)

“In the long run, we’ll all be dead.” That unfortunate utterance from a now dead economist has provided a handy excuse for shortsighted business planners focused only on extracting the maximum profit from the here and now. That kind of thinking is responsible for many business failures, yes, but also many environmental problems more daunting even than the federal deficit. Failure to consider the future implications of decisions made today virtually guarantees a legacy of difficulty and hardship for the next generation.

Taking the long view, on the other hand, is at the heart of green thinking. Therefore, this January, I encourage you to forget about 2011’s top trends for a moment and invest some quality time considering the next decade and the opportunities and threats it will present to your business and community.

The best place to start is at the end – what will your business look like in 2020? Has it been passed down to your children? Acquired, shut down or thriving with you securely at the helm? Is it connected to the same old supply chain? Is the local economy vibrant and strong, or struggling along? Most importantly, what do you want your business to look like and what sort of realistic scenarios will lead you there? To answer these questions one must first consider the long term forces reshaping our industry.

The next decade will see plenty of change and probably as many surprises as the last. Obviously, “green building” is on its way to becoming the new normal, whether it’s LEED or another approach, creating new opportunities for growth. Transport fuel prices are trending higher with the very real possibility that periodic episodes of price volatility will devastate marginal businesses. Households, businesses and governments will continue to shift purchasing to less toxic and more eco-efficient products from socially responsible producers. Competition between “big box” chains and independent dealers will continue, with increasing activism from localization groups. The green DIY and urban agriculture movements will continue to take root across the country. And a host of global and domestic macroeconomic factors will attenuate or amplify these opportunities and threats.

But underlying whatever scenario one wants to envision for the next ten years, there is the inescapable reality that the global climate system is changing, most likely due to human activity. The last decade was the warmest on record, but more important to consider are the local and regional impacts. Damaging and costly extreme weather is becoming more common. NASA has published a slideshow depicting the number of temperature anomalies each decade going back to 1880, (earthobservatory.nasa.gov/Features/WorldOfChange/). The trend is unmistakable, which should be cause for concern, especially in the context of the massively destructive heat wave that hit Russia last summer.

Regional climate patterns are changing in ways that dealers and distributors should understand and anticipate. The US Global Change Research Program, (www.globalchange.gov), provides useful analysis for each region of the country. Depending on your location, expect more drought, more fires, more floods, more heat waves and cold snaps, and more precipitation when it comes. And when these “anomalies” occur, they will probably be at the wrong time, disrupting water supplies, agricultural harvests, supply chain logistics and more.

These broad trends suggest that merchandising and business model innovations will be required to sustain a successful business. Households, businesses and governments will be forced to invest in mitigation and adaptation strategies. Dealers will, too. But those long-term planners among them will be prepared to weather whatever the decade has in store, with solutions that will help their customers and communities, too.

Thinking Globally, Building Locally

(This article was originally published in the November '10 issues of Merchant Magazine and Building Products Digest.)

The green building movement is rooted in big thinking, but the USGBC is beginning to think small and local. Their mission is to transform the built environment – that’s thinking big with over 125 million buildings in the US, most of which are energy and water hogs. Considering that buildings account for a third of the US carbon footprint, success is of global importance. After over a decade of leading the commercial building revolution, USGBC has become a transformative force with a valuable brand. But there still remain 120 million less than efficient residential buildings, which is where action must now be focused. This is why the USBGC is putting considerable effort into boosting residential green building in concert with local leaders, which is good news for LBM dealers.

In residential building, there was already a green building movement well under way by the time LEED for Homes arrived on the scene two years ago. Local and regional residential programs have existed for years in progressive cities like Austin, Texas, whose Austin Energy Green Building program was the first in the nation. LEED for Homes shares many similarities with these programs, even though each reflects its own local conditions, both in terms of content and approach. In addition, there are alternatives to LEED, including EnergyStar, NAHB’s program, the new, (to the US,) PassivHaus approach, the International Living Building Institute, the NauHaus Institute, and a host of natural building organizations.

Given these realities, I really like the USGBC’s collaborative approach. They recognize that they’re part of a budding community of green building leaders and that there’s more than one way to build a green home. So, rather than attempt to impose their rating system, they launched the LEED for Homes Affiliate Program with the pragmatic aim of forging working relationships with many green building organizations and local green building leaders, thereby promoting the broader movement in the context of local needs.

“We’re market oriented and are looking to support and promote what’s working in each community,” Nate Kredich, USGBC’s VP for Residential Market Development, told me recently. For example, they’ve been working with North Dallas Green Built and the NAHB, developing educational materials for production builders, dealers and distributors. They’re even helping to produce a “mini GreenBuild” in the area. (By the way, USGBC’s GreenBuild is November 17-19.) In Minnesota, they’ve joined a coalition with Minnesota GreenStar, with its new-build and remodeling rating systems, and Minnesota Green Communities, which advocates for healthy, affordable housing. They’ve also launched the Green Home Guide (www.greenhomeguide.com), a website to help connect homeowners, builders and dealers with trusted information, and with each other.

In terms of economic clout, green residential building is only just finding its feet and, in any case, current economic conditions have strangled most building of any kind. But when homes start to be built again, it’s likely a great percentage will be guided by a national or regional program. “We recognize that for green home building to scale rapidly, it’s important that everyone in the value chain understand the rating systems and are well-connected with their local green builders,” said Kredich, emphasizing the value of education. They’re reaching out to support interested independent dealers, like Shaw Stewart in Minneapolis, as well as the big chains. With many more new green residential products and materials coming to market in 2011, it should be easier for proactive dealers and distributors to rise with the green home building market. If that’s true, then the USGBC’s big thinking could very soon be taking root in a community near you.

Sorting out the Recyclables

(This article was originally published in the September '10 issues of Merchant Magazine and Building Products Digest.)

Nothing says “green” like recycling, or so many people assume. Since the pioneering programs in the 1970s, it seems that now the habit has become ingrained, collection infrastructure ubiquitous, and recycling is among the greenest of virtues we Americans can claim. However, all is not what it seems. Like most issues in the realm of sustainable business and green building, there are various shades of gray, not to mention green.

In today’s green building and green consumer markets, “recycled” and “recyclable” have become the low-hanging fruit for marketers eager to pin green credentials on their products. But these attributes alone don’t necessarily signify sustainable or green in any meaningful sense. Context is everything. What kind of material? What percentage is recycled, and is it post-consumer or post-industrial waste? How relevant is “recyclable” if in fact the material is not recycled? In addition, LEED guidelines vary by application and product type, so a building material with some recycled content may or may not earn LEED credits depending on how and where it’s used. It behooves the merchandiser to dig a little deeper to determine whether these terms indicate real value or are simply a “greenwash.”

In the LBM and home improvement supply chain, aluminum, steel, glass, plastics, paper and wood are the predominant materials potentially recycled or recyclable. Aluminum, glass and steel can be used again to manufacture the same kinds of products indefinitely and can therefore be truly RE-cycled. For example, products like Maze Nails (www.mazenails.com) typically contain a high percentage of recycled steel, as do most steel products made in the USA. Generally, plastics and paper can be used again to manufacture things of lesser material integrity in a limited number of cycles, and are therefore DOWN-cycled. A great example here is Green Fiber (www.greenfiber.com) cellulose insulation, which is made from over 50% post-consumer recycled paper.

Whether a material is recycled, downcycled, or even upcycled, it’s a good thing, since manufacturing from recycled feedstock is often orders of magnitude less energy intensive than manufacturing from virgin feedstock. So, buying and stocking products with recycled content is a good thing, too, creating a market for such products and keeping the demand cycle going, so to speak.

But when evaluating products, all “recycled” and “recyclable” claims are not created equal. Post-consumer recycled content trumps post-industrial every time. Claims that don’t make this distinction should be assumed, if true, to be post-industrial. Is this still good? Yes. Is it the mark of truly sustainable product? Not always. Post-industrial recycled content is usually scraps and cuttings that may or may not be easily put through the production process again. In some cases, such as “re-grind” in the world of plastics, it’s easily reprocessed and is normal operating procedure. Generally speaking, it’s also harder to earn LEED credits with post-industrial recycled content.

The term “recyclable” is next down the list. In fact, it’s very often misused by over eager marketers and can be deceptive. If the material is recyclable in theory, but not in practice, then the claim is probably not worth the virgin paper it’s printed on. In fact, deceptive claims of this sort violate the FTC’s Guides for the Use of Environmental Claims. Where there is no recycling infrastructure, per se, a manufacturer may have a “take back” program, which accomplishes the same thing.

In sorting out products claims concerning recycled content and recyclability, manufacturer transparency and third-party certifications can help separate the green from the greenwash. It can also help to determine whether the product will meet your customer’s LEED project requirements.

Oil Dependency and the LBM Supply Chain

(This originally appeared in the August '10 edition of Merchant Magazine and Building Products Digest.)

The oil spill in the Gulf of Mexico is a huge environmental calamity, but it should serve as a wake up call for the LBM supply chain for another reason. Why? The spill will certainly have an impact on local economies and local LBM dealers. But the spill is emblematic of a much bigger issue, the end of cheap oil. And that will shape the future of this industry, bringing tough challenges and green opportunities.

Many analysts are pointing out that most, or all, of the world’s easy oil has been extracted and what’s left is vastly more challenging, energy intensive, and expensive to get – pumping oil from 5,000 feet deep on the floor of the Gulf is but one example. Meanwhile, according to a US Department of Energy report, new oil discoveries are lagging consumption. And some analysts have pointed out that the point of peak oil production may have been reached, or may be reached soon.

Peak oil, as the phenomenon is known, is based on the work of a Shell Oil geologist, M. King Hubbert, who showed that just as an oil well reaches a peak in production long before the oil deposit runs dry, so too, does an oil producing region have a peak in its production curve. Once the peak is reached, production volumes flatten out, then decline. Add the fact that worldwide demand for oil is growing, (car sales in China and India are going through the roof!), and if we are at or near a peak oil situation, then oil prices will surely rise and perhaps very rapidly.

The LBM supply chain is predicated on cheap transportation costs. When fuel prices rose dramatically during the summer of 2008, many distributors and dealers took hits to their already thin margins. While that price spike was due, at least in part, to Wall Street speculators, it provided a taste of what an expensive oil future will bring – higher transport and commodity costs, and marginal businesses going bust.

So, how can you prepare and create resiliency within your organization? First, start shifting your own product mix. Identify those products most vulnerable to rising oil prices and find better alternatives such as local and green products. This will also help you meet the rising demand for such products as the green building movement continues apace. Look especially at those solutions that help your customers, (or their customers,) become more sustainable or self reliant. Also, find opportunities to supply a greater range of need within your community or operating area. If gas prices rise dramatically, your customers will be looking for one-stop shopping.

Dealers and distributors should also be actively seeking ways to reduce gasoline or diesel use within their own operations. Electric vehicles or diesel trucks that run on locally-sourced waste cooking oil might be viable options. Increasing drop ships, from manufacturer to dealer, or from distributor to end-user, will help, too, but only marginally.

Finally, get involved in community efforts to create local resiliency to oil energy shocks. Transition US, (www.transitionus.org,) is a new and growing network of groups throughout the country – 69 at last count – aiming to find ways within their own communities to reduce their dependence on oil. Groups like these are gaining influence with local policy makers, and their efforts naturally support green building and like-minded local businesses. Your involvement will help you identify emerging opportunities, make important connections within your community, and get support for reducing your own oil dependency.