Podcast Transcript: Green opportunities cut across many sectors

Would you say your business is green? When I say the words “green technologies”, what comes to mind?

You might think that green technologies are limited to things like solar and wind power, electric vehicles and recycled paper products. Well, think again.

The reality is that what constitutes a green technology might surprise you and today’s guest will explain why. The implications for your international business could be profound.

I'm Michael Mancini, Editor-In-Chief of CanadExport, the official e-magazine of the Canadian Trade Commissioner Service – Canada's most extensive network of international business professionals.

I recently spoke with Peter Busby, a Canadian architect recognized internationally as a leader in green design. Hear what this green building pioneer has to say about the future of this key industry and how Canadian companies across many sectors can lead the world in the business of sustainable design.

Michael Mancini: Peter, it’s a pleasure speaking with you today.

Peter Busby: Great, Michael.

Michael Mancini: I’d like to talk about the business of green building and the commercialization of green technologies, specifically how Canadian companies can can claim their stake in a sector that is experiencing really explosive growth. In the United States for example, the industry is expected to grow to something like 173.5 billion by 2015, up from 71 billion in 2010. Now, you’ve said in the past that more far-reaching than any technological development in this industry is the change in the mindset of clients, developers and builders and so on. We know that more and more of these kinds of decision makers see the value of green technologies. You’re one of those decision makers. How can Canadian companies’ best take advantage of what these decision makers want?

Peter Busby: Well, first of all, I’d like to say I don’t think it’s a decision that any business in Canada cannot take. Because the depth and breadth of the sustainable design movement is so far reaching. I mean, when you think initially “what’s he talking about,” you might think solar – photovoltaic cells or wind farms or something like that. But consider that every construction material made and sold is going through an analysis at the moment at the hands of clients, specifiers, doctors who are looking for contaminants in the environment, architects, engineers, as to what it’s made out of, where it’s made, how far it’s transported, what’s the carbon footprint of it, and when it’s being made, how does it get disposed of, what happens to the land or water that it’s disposed into, what’s the carbon footprint of its disposal. Every single material that we deal with in buildings – and construction is the largest industry in the world - is going through a transformation.

For example, I can take the carpet industry. It was one of the early adopters of change. And anybody in the carpet industry knows now that you have to have low VOCs in your carpet. You have to take – they’ve changed the formula for the glues so that they don’t off-gas. They’ve changed the formula for the nylons and the other fibres that are there so they can be recycled. They’ve now got recycled content in those fibres. They’re looking at where the carpet goes when it’s being demolished. There are companies now that lease the carpets for ten years; they don’t sell them to you, so you can take them back to them. So that’s one example. Oh, the dyes and pigments that go into carpets, you know, what’s it made out of, is it a compound that’s going to contaminate me, is it going to contaminate the air in the building. We’re just at the very beginning of the whole kind of poison building syndrome as far as interior finishes goes, which is part of the green building industry. So that’s the kind of the most far-reaching aspect of sustainability. It’s going to affect really any export business that’s involved in the land development or construction industry at all, and that’s a large segment of the Canadian economy, for sure.

Michael Mancini: Well, and building on that, from your perspective, how do you see Canadian companies doing internationally? How do we fit in the world of green technologies, from your perspective?

Peter Busby: Well, you’d probably divide that up into, like, the world world and the North American world. In the world world, obviously European technology companies are way ahead of North Americans in terms of sustainable design elements. Solar panel development is European and Japanese and Korean that lead the world at the moment. There are a couple of very sharp Canadian companies that are on to it, and they’re producing some very interesting new panels that are more efficient and are likely to have export value in the near term. I think, by and large, that world will be taken over by China in the next five years. China’s decided that 25 percent of their power’s going to be from renewable sources.

I think the future for Canadian businesses is in specialized equipment, is in construction materials, things that are going to be used in North America and things that are maybe more niche market products. And a good example would be alternative methods of sewage treatment. So again, it’s not so much the typical green building things that you see, which are those things which are made in Europe or China. It’s more niche market products that are aimed – that are maybe heavy and harder to transport to – around the world, maybe more localized.

That’s another thing in the green building industry we’re seeing, is that owners and builders are asking where – how far materials have been transported, because that’s part of their carbon footprint. So whilst ten years ago we bought all our granite from Quebec, five years ago we bought all our granite from China but today we’ve turned around and we’re saying no, that has too big a carbon footprint. Today we’re looking back at Quebec and New York and other places like that, and some west coast states that produce granite, and we’re saying well, actually, we know there’s a cost premium associated with buying, but you have a greener product because it doesn’t have a carbon footprint. Again, in five years we’re – you’re going to know what the carbon footprint of your building is when it’s built, and you’re going to know what the carbon footprint of it is on a day to day in terms of operations. Obviously Canada has a large building industry and the future for them in sustainability terms is very big – very big.

Michael Mancini: Where do you see Canadian companies – Canadian technologies fit best internationally?

Peter Busby: The markets that I see that are most easily accessed, that are going to change the most, is the U.S. I think it’s so embedded in the institutions in the U.S. now. The universities are all going green, the corporations are all going green. I’m talking about Wal-Mart. You know, they’re – sweeping changes to not only what they buy and what they sell, how they deliver it, what fuel they use when they deliver. You know, I mean, they’re using, you know, bio-energy to power all of their trucks, and they happen to have the largest truck fleet in the world. All these companies – Dow and GE and all these big companies are turning around and saying we got to get to a zero-carbon future. How do we do that? You change your buildings, you change the way you operate a building, you change your truck fleet, and you change your transportation methods.

Europe has already done a lot of that, so the market for doing that is, I think for Canadian companies, is less so. Certainly there’s a market in the Asia-Pacific area for these things. With the emergence of sustainable design in the eyes of the Chinese government, I think that a lot of material is going to be manufactured over there – unless it’s a Canadian company that takes their technology over there and starts manufacturing, I think they’ll have difficulty exporting to China because of price issues. In most of Asia, it’s government-led. So the Japanese government has decreed it, the Korean government has decreed, Singapore government has decreed a high level of building performance. The Australian government encourages it. They don’t decree it. And the Chinese government has or is in the process of decreeing that you must go green. So it’s a different approach. In North America we tend not to go by government decree; we tend to go by government encouragement of corporate change. But it’s the corporate mentality that’s changing in North America.

Michael Mancini: What would you say are some of the biggest pitfalls Canadian companies that have these kinds of green technologies will be facing?

Peter Busby: Well, transportation is an obstacle, again, because part of sustainability involves where does it come from. So if it comes from away – I mean, north-south transportation between Canada and the US is very efficient. We rule by distance. You’re looking at materials that… certain materials. The heavier materials should come from within 500 mile radius of the site, and heavier – or lighter materials should within a thousand miles. Also, the transportation technology. There’s – it’s one thing if your material’s trucked. It’s – but you can go three time as far if you put it on a train. So companies might be interested in looking at how they’re transporting their materials north-south or--

Michael Mancini: Interesting.

Peter Busby: …because trains are so much more fuel efficient and less of a carbon footprint than trucking, companies might export their materials in a different fashion than they would otherwise have done to keep the carbon footprint and therefore the sustainability of that product down.

We’re at the very beginning of a revolution in the consideration of health effects from materials. And this affects every type of equipment of material you can think of. For example, polyvinyl chloride, PVC, is considered a carcinogenic compound. And in particular, it’s a material that, when it burns, it releases toxins immediately, very serious contaminants. But at the present, in its manufacturing, the material itself is carcinogenic. It’s listed as a carcinogen. In Europe it’s banned. OK, so where do you find PVC in Canada? Every single wire has a PVC jacket in North America – every single one. So that industry’s going to change very, very soon. There’s going to be pressure. And interestingly, in Europe it came from the fireman unions. They didn’t want to go into a building that had PVC wiring in it during a fire because they didn’t want to die of cancer ten years later.

So that’s where the pressure’s coming from. But it’s also health authorities and all kinds of things are looking at, you know, vinyl flooring, for example, or vinyl wall coverings. Well, vinyl is a carcinogen. And so, you know, as far as the sustainable design world is concerned, we’re not using vinyl anymore. We won’t specify it in our flooring products, we won’t use it in our – on our walls, as finishes. So it’s changing the industry dramatically. And as more and more percent of the buildings that are being done are sustainably designed, these things bite and change industry. Well, actually, PVC’s found in almost every type of control mechanism or machine that you can imagine, every switch on a wall, every motor, every operator, every piece of mechanical – electromechanical equipment has PVC in it. And so those will have to change if you want your PVC-free status.

Hospitals are the most polluted, most energy-inefficient buildings we have in our society. Now, think about that. This is where we take our sick, our frail, and we put them in there and we hope they’re going to recover. And the air they’re breathing is contaminated, you know. So if you’ve got systems for cleanliness in hospitals, systems for energy reduction in mechanical systems that support the air or – and if you’ve got materials in an operating theatre that – no vinyl. Go into a post-natal unit, recovery unit right now, the babies are covered in vinyl. They’re sleeping on a vinyl mattress. There’s vinyl on the walls, there’s vinyl on the floor, the crib is vinyl, everything’s vinyl. All hospitals in North America will be renovated in the next 15 to 20 years to be low energy and healthy – all of them. That’s a big industry.

Michael Mancini: There’s an opportunity.

Peter Busby: Like, if you make stuff for the health care industry, aren’t you interested in that fact? And there are lots and lots of Canadian companies that make stuff for the health care industry – lots. Beds to equipment to lights to operating equipment to – there’s – to mechanical equipment.

You know, to give you an idea of how big this is – and there’s a sustainable design standard called the Living Building Challenge, which is the most aggressive sustainable design challenge there is at the moment. LEED is one level, and it’s got certified silver, gold, platinum, so it’s hard to do that. But the Living Building Challenge is above that. And there are now companies that are wanting to go there. Google is building their next building, 1.1 million square feet, to Living Building Standard. And they’re meeting with Apple this week, Apple’s building a huge building as well. And they intend to put out to the industry calls for materials that meet the Living Building Challenge all over. So right now the industry can’t do that. But if you’ve got two and a half or three million square feet of construction for two of the leading companies in the world out there, and they want these materials, there will be somebody who will provide them. And it might just as well be a Canadian company as anybody else.

So this is – goes back to my original point. Niche market specialized products from Canadian companies that are thinking fast and able to move fast in terms of producing new materials, new machinery that meets the Living Building Challenge will be the ones that will prosper, and they’ll be the ones that’ll be the backbone of the development of the sustainable design industry in Canada.

Michael Mancini: But you’re talking about Google and Wal-Mart, these really large corporations that are making huge steps. How big of a barrier or pitfall is cost still for the implementation of these, you know, highly niche products?

Peter Busby: If you’re in the electrical wire industry, and somebody says to you – the jackets you’re putting on these wires right now is a contaminant and we’re not going to use it anymore, we’re not going to buy one more pound of that wire, you know, you’ll find another compound pretty quickly. They have done it in Europe. You’ll find another compound that’s cost effective. You won’t say oh, well, we’ve got our PVC-free wire over here and it’s 20 times the price. No. You’ll figure it out. And that’s what’s happened in Europe. I don't know what the compounds are in Europe that they’re using for those types of solutions, but they figured it out.

Michael Mancini: What advice would you offer Canadian companies who are trying to take their business internationally to the United States?

Peter Busby: Well, I would rebrand yourself for starters. And make sure that, when you present your company, whether it’s your website or your packaging or what you make your product out of, that you make very clear what your sustainable design credentials are, and rebrand yourself accordingly. And when you see a company like Wal-Mart rebranding themselves, surely everybody who supplies the Wal-Mart’s got to figure out that, if the elephants can do it, why can’t we, and why shouldn’t we. And in fact, we should.

So adopt an internal or board-level criteria for a low-carbon future for your company. Look at what you’re making your materials out of. Look how you ship it, how you package it. Minimize your packaging and make it recyclable. Rebrand yourself as a green company, and then I think, you know, if you’ve done it properly, with all of the third-party certifications that are necessary – and depending what you’re industry in, there’s lots of people who’ll give you third-party certifications to how green your product is. There’s a lot of greenwash out there. There’s a lot of people saying they are green and they’re really not. And then make a show of it, and go to the tradeshows and put it on your website, and people will come to you. You know, there’s channels of export, there’s opportunities at trade shows. There isn’t a tradeshow you can go to today on any subject where you don’t see sustainable design and sustainability as part of the criteria – on any subject. That’s all going to change, guaranteed. We’re seeing it now.

Michael Mancini: Interesting. Thank you very much, Peter, for taking the time.

Peter Busby: You’re welcome. Sorry I’ve rambled a bit, but to me it’s a fascinating subject and of course it’s my passion, so again you’re welcome.

Michael Mancini: Well, that’s all for this podcast edition of CanadExport. To learn more about how to find a business partner, collaborator or customer for your green technologies, you may wish to visit Greenbuild 2011, one of the world's largest conferences and trade shows dedicated to green building. It’s coming up very soon in Toronto from October 4-7, 2011.

If you are going to Greenbuild, we’ll see you there. The Canadian Trade Commissioner Service, with its partners, is organizing a personalized matchmaking event to link Canadian companies to foreign delegates at Greenbuild. You’ll have the opportunity to connect with delegates from the United States, Europe, Asia and Australia.

For information regarding the TCS role in Greenbuild 2011, contact Trade Commissioner Michael Calvert at michael.calvert@international.gc.ca.

You might also wish to visit www.tradecommissioner.gc.ca to see how our network of trade commissioners in more than 150 cities can help your company.

I’m Michael Mancini signing off for now.

To download our other episodes, just go to www.canadexport.gc.ca or go to iTunes and use the searchword “CanadExport.”