The Business Benefits of Going Green

The Clean Tech Revolution is a readable, straightforward guide to earth-friendly business strategies

by Reena Jana

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Perhaps you've heard the trendy new catch phrases such as "eco-chic," or "green is the new black," which refer to the popularity of innovative, earth-friendly products such as Toyota's (TM) hybrid cars. In Toyota's case, "green" also refers to the color of cash; this month the carmaker announced that between December, 1997, and May, 2007, it sold more than 1 million hybrid cars worldwide (including its iconic Prius and newer hybrid Camry).

And a new, lucidly written book, The Clean Tech Revolution: The Next Big Investment Opportunity, unpacks how businesses can follow the lead of companies such as Toyota to go green—and make green dollars—by designing, selling, or funding inventive eco-friendly products and services.

The book was written by Ron Pernick, the Portland (Ore.) co-founder of the six-year-old green business consulting and research firm Clean Edge, with former business journalist and Bay Area contributing editor Clint Wilder. Clean Edge is the firm that developed the year-old NASDAQ (NSDQ) "Clean Edge U.S. Index" (QCLN.O), which tracks public companies specializing in developing green technologies, ranging from renewable electricity generation to energy storage and conversion. (Currently, none of the companies listed is a Clean Edge client.)

Predictions for the Future

Sure, it's safe to say the authors have a vested interest in the promotion of clean/green innovation and design—although Pernick and Wilder disclose clients mentioned in the book such as Sharp Electronics and investment bank Piper Jaffray in a "Note to the Reader" intended to ensure transparency—but their focused, informed analysis provides a helpful and straightforward guide that quickly and efficiently unpacks green business strategies.

The text focuses on eight key sectors that hold the most promise for revenues within the next decade, including the solar power market, which they predict will grow from $13.6 billion in 2006 to $69.3 billion by 2016. Or biofuels (petroleum alternatives made from plant matter), which Pernick and Wilder forecast will grow from $20.5 billion in 2006 to $80.9 billion in 2016 (see BusinessWeek.com, 11/13/06, "Planting the Seeds of a Biofuels Boom").

One of the book's key strengths, simple as it is, is Pernick and Wilder's clear definition of what "green," really means in the context of technology—both in terms of sustainability and potential profits (see BusinessWeek.com, 11/13/06, " Harvesting Green Power"). While many consumers and corporations alike toss around the term "eco-friendly" to apply to a variety of products that are in some way made from, or are powered by, renewable and sustainable materials, the idea of "green" can often seem vague.

"Ten to Watch"

The authors have favored the term "clean technology" since the early 2000s to refer to, as they explain, "any product, service, or process that delivers value using limited or zero non-renewable sources and/or creates significantly less waste than conventional offerings." Explained Pernick in a telephone interview: "The word 'clean' resonates more than 'alternative' when used to market products to mainstream audiences," That's important when profits are a main goal.

Toyota's Prius is just one well-known example of successful clean tech in action (see BusinessWeek.com, 3/20/07, "Hybrids Stuck in Neutral"). The real value of the book lies in the authors' snapshots of lesser-known companies.