RICK MAXWELL SENT THIS TO ME

EDF Innovation Exchange

A Clockwork Green?
Posted: 18 Dec 2009 07:58 AM PST
By Climate Corps Fellow

By Russell Baruffi, MBA/MS candidate, Erb Institute for Global Sustainable Enterprise, University of Michigan, 2009 Climate Corps fellow at Sony Pictures Entertainment, Member of Net Impact.

Entertainment, which seems like a fairly harmless indulgence from your a movie theatre or your couch, turns out to be remarkably wasteful and resource-intensive industry. Working for Sony Pictures this summer, I got to dig in onto the sets. A movie can make millions or it can flop, so the industry spares no incremental expense or resource to create the marginal extra pizzazz that will spellbind an audience. For the climactic scene of an upcoming big-budget tent-pole movie, I saw film-makers build a fake riverbed of wood, steel and foam block stretching five stories tall, which they sculpted into a downward sloping terrain with a realistic skin of trees, bushes, bamboo and boulders, and proceeded to pump 80 thousand gallons of water over it in a continuous loop to create an actual river on the set. In the biz of show biz, millions of extra dollars spent making a two-minute scene really pop can be good economics, so energy, water and resource throughput is big.

This leaves lots of room for improvement. Enter Sony Pictures Entertainment, one of the big studios that is trying to turn the beat around by articulating specific goals and reducing its impact (they’ve already found ways to re-use that steel and wood from the fake river); I was cast to advance energy and water sustainability projects for Sony’s sustainability project team this summer. I have spent most of my business school education focused on the importance of building the business case for sustainability investments in financial terms, but at Sony it became clear to me that narrative is just as important as numbers.

My work was financial at heart: I dug up low-cost, high-returns investments that would reduce the company’s carbon footprint and energy bill, a process that took me on a deep dive into Sony’s lighting and ventilation systems and data centers, all of which are massive energy drains with opportunities for upgrade investments with big net present values and virtually no-risk returns. (Salivating yet?) But businesses like Sony aren’t organized to achieve sustainability – they’re organized to make movies – so establishing a solid business case for investing in a data center efficiency upgrade requires cobbling together disparate stakeholders and data that either did not exist or had never been used, from unrelated parts of the company. And this is where narrative comes in.

When the department responsible for buying the pricey energy-efficient capital equipment is different from the department that gets the resulting energy savings- a challenge that almost any large business faces when its trying to reduce its utility bills- efficiency investments with good numbers fall through the cracks unless the project driver can articulate a solid story about why the project is important and profitable to the planet and the company, but most importantly, the department and individual decision-maker. Building that narrative turns out to be just as much about marketing as finance: it’s communicating a value proposition, and it demands that you get a very specific understanding of who you need to communicate with, exactly what should and can credibly communicate and how to most effectively communicate it.

When working with data centers in particular, there is not only a divide between the capital investment and the operating budgets and staff, but the guy in charge of the HVAC equipment often has needs, priorities and ideas that are different from the guy in charge of the IT equipment, and this gets further complicated when there are many data centers managed by different business units. Like many companies its size, Sony is working aggressively cut carbon emissions in anticipation of electricity rate increases and federal cap and trade legislation. Overcoming these organizational and internal marketing challenges are at the heart of turning those financially appealing efficiency investments into a reality.

This post originally ran on Perspective: Sustainability Blog from the Erb Institute, University of Michigan on December 7, 2009.