Episode 80 – Advice on Socially Responsible Investing from Elliot Kallen

Oct 25, 2012

In Episode 80 of The Wendel Forum (originally aired on October 13, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Elliot Kallen, founder and CEO of Prosperity Financial, a San Ramon, Calif.-based money market fund with $200 million under management.

Elliot Kallen, CEO of Prosperity Financial, visits The Wendel Forum
Elliot Kallen, CEO of Prosperity Financial, visits The Wendel Forum

Years ago, socially responsible investing meant simply avoiding investing in so-called sin products such as tobacco or the defense industry.  Increasingly, though, socially responsible investing means more. While it can mean investing in green companies, the issue is somewhat muddy.  For example, is it socially responsible to invest in a solar module product if the parts were made in China and the manufacturing process included toxic chemicals that ended up in the water supply?

Not surprisingly, therefore, everyone has a different opinion of what it means to be socially conscious.  Generally, though, it means thinking about doing the right thing and considering every facet – from environmental issues to a company’s shareholder governance and charitable activities to the private activities (such as aiding the Nazis) of a company’s founder.

In addition, there are different approaches to socially responsible investing.  For example, an investor can proactively support companies that are doing good things for society or devote a portion of a portfolio to green companies. Alternatively, an investor can simply seek the highest possible return on investments but then commit to donating 10 percent of those earnings to a socially responsible cause.  Kallen recommends finding an advisor who will listen to your goals.

What does socially responsible investing mean to you?
Post Links:

Listen to the interview with Elliot Kallen: Episode 80 of The Wendel Forum (26:55 mins; mp3)

Prosperity Financial Website: http://www.prosperityfg.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile:https://www.wendel.com/rylons

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Episode 78 – Scott Potter Discusses Channel Strategy for Natural Products

Oct 17, 2012

In Episode 78 of The Wendel Forum (originally aired on September 29, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Scott Potter, managing partner of San Francisco Equity Partners, a private equity firm that specializes in consumer products growth companies.

Scott Potter of San Francisco Equity Partner
Scott Potter, San Francisco Equity Partners, in The Wendel Forum studio

Potter’s firm partners with companies that have demonstrated a proven demand for their products.  So while there’s no consumer adoption risk, the companies are usually facing operational and scale challenges to reach the next level. Typically, they are $5-10 million companies poised to scale their businesses, often to north of $100 million.

Identifying these optimal risk-reward companies is more science than art.  San Francisco Equity Partners is particularly focused on its companies’ channel strategy.  That is, a given beauty product can’t successfully be sold at both Sephora and Wal-Mart.  Channels include food (Safeway), drug (Walgreens), mass (Wal-Mart), club (Costco), prestige (specialty retailers and department stores) and direct-to-consumer (online and direct-response TV).  Determining the right channel for products is often a company’s key to success.

A growing channel is the so-called natural channel, as epitomized by Whole Foods, which is separate from the traditional grocery channel.  But Potter’s firm specializes in natural products that are targeted for the mass channel.  Companies targeting this channel should not ask consumers to pay more for an inferior product “just to save the fish,” Potter says.  Rather, the product’s value proposition has to work in and of itself outside of sustainability and natural missions.  The prime example is Method products.

When San Francisco Equity Partners first invested in Method, it was producing just hand and cleaning products.  It has evolved to include bathroom and specialty products and even successfully launched into the competitive laundry space.  Early on, Method knew it would never have the marketing budget of Proctor & Gamble.  So it chose to overinvest in packaging, focusing on the point of sale: when product is on the shelf.  Method’s in-house design team devised a distinctive look, including the bottle molds, and focused on the aesthetic and the user-experience (such as the one-hand laundry detergent dispensing system). With the “design baked into the products,” Method aspired to be like Apple.

At what kind of store are you most likely to purchase natural products?

Post Links:

Listen to the interview with Scott Potter: Episode 78 of The Wendel Forum (27:48 mins; mp3)

San Francisco Equity Partners Website: http://www.sfequitypartners.com

Method Products Website: http://methodhome.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: https://www.wendel.com/rylons

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Episode 77– Dr. Jay Udani Discusses Clinical Testing for Dietary Supplements

Oct 11, 2012

In Episode 77 of The Wendel Forum (originally aired on September 22, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Dr. Jay Udani founder and CEO of Medicus Research, a contract research organization for the natural health products industry, including botanical drugs, dietary supplements and functional foods.

Dr. Jay Udani of Medicus Research
Dr. Jay Udani of Medicus Research

Dietary supplements give people choices in their health care. Whenever manufacturers of dietary supplements make formal claims – such as “supports healthy joints” – the supplements must undergo clinical trials and testing, akin to pharmaceutical testing.  Dick and Dr. Udani discuss how both enforcement of and consumer interest in clinical trials for dietary supplements is increasing.  Even major food manufacturers, such as yogurt manufacturer Dannon, have received letters from the FDA about their formal health claims.

Whereas pharmaceuticals are chemicals that interact with the body by targeting a pathway or organ, dietary supplements assist the body in better performing normal, healthy functions.  As a result, clinical trials of supplements must be done on healthy people. Supplements can take longer than drugs to show effects so the best way to test the efficacy of supplements is for the individuals in the clinical trials to track how they’re feeling over time.  Udani’s research program uses iPods to monitor individuals, whose responses may be both subjective and objectively measurable. When evaluating a clinical trial, consumers should examine how the supplement was tested, the population used and the measuring tools.

When taking dietary supplements, does clinical testing matter to you?
Post Links:

Listen to the interview with Dr. Udani: Episode 77 of The Wendel Forum (27:52 mins; mp3)

Medicus Research Website: http://www.medicusresearch.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: https://www.wendel.com/rylons

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Episode 76 – Ben Lee Shares CircleUp’s Crowd Funding Model

Oct 09, 2012

In Episode 76 of The Wendel Forum (originally aired on September 15, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Ben Lee, director of business development at San Francisco-based CircleUp, a crowd funding platform founded in April.

Ben Lee of CircleUp
Ben Lee of CircleUp

CircleUp provides an online mechanism for consumer products companies and retailers to reach out to a broad network of potential investors, who may fund the companies in exchange for equity. CircleUp, which affiliated with WR Hambrecht, takes a commission.

So far, they’ve received 600 applications; they’ve selected 10 companies and four – including a baby skin care brand and an organic food brand – have been successfully funded.  CircleUp’s team serves as a curator for the investors. In evaluating companies, they look for businesses with $1 million to $10 million in annual revenue.  Usually these companies are seeking to raise $500,000 to $2 million to launch new products and achieve the next stage of growth. The typical investment is $5,000 to $25,000 (while each company’s offer is different, these are generally in the form of preferred stock shares); CircleUp assists with larger transactions offline.

While CircleUp streamlines what can otherwise be a year-long funding process, raising money through the platform can still take several months. Although CircleUp selects companies and presents opportunities, investors must do their own due diligence.  Like any private company investment, crowd funding is risky and the investment horizon may be three to seven years.

Lee says CircleUp’s goals include enhancing the ecosystem around consumer products, helping as many small consumer brands get financing as possible, and making sure CircleUp’s platform is a great experience for investors and companies.

Have you participated in crowd funding?  What do you see as the biggest opportunities and challenges to this form of financing?  

Post Links:

Listen to the interview with Lee: Episode 76 of The Wendel Forum (27:56 mins; mp3)

Circle Up Website: https://circleup.com

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: https://www.wendel.com/rlyons

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Episode 75 – Gary Eberhart Discusses Solar Energy for Schools

Sep 25, 2012

In Episode 75 of The Wendel Forum (originally aired on September 1, 2012, on 960 KNEW AM radio), show moderator Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Gary Eberhart, who serves on the board of the Mt. Diablo Unified School District, which serves 32,000 children and adult students at 56 campuses, making it one of the largest school districts in California.

Gary Eberhart

Amid decreasing budgets and increasing energy costs, the Mt. Diablo School District secured a $350 million bond from the community to add solar energy to 51 of the district’s schools.  Eberhart and his fellow board members determined that purchasing a solar energy system through a bond program would be more cost-effective than buying power from a solar provider under a long-term purchase agreement. Specifically, Eberhart, who has served on the school board for 17 years, determined they could invest the estimated $220 million savings back into the schools over the system’s 30-year life expectancy.  The bond measure was approved by 60 percent of the community.

Mt. Diablo’s 12.2-megawatt system is the largest program in the world for a school district and will meet 92 percent of the district’s energy needs.  After a competitive selection process for the contractor, the installation took one year and all but a handful of the 51 systems are now up and running.  The solar panels were installed primarily in parking lots and on playground structures, which Eberhart says look better and are easier to maintain than roof panels.  The solar energy systems are also providing a unique educational tool for students, who can monitor energy and cost savings through real-time data.

Could your school district use solar energy?

Post Links:

Listen to the interview with Eberhart:   Episode 75 of The Wendel Forum (27:43 mins; mp3)

Mount Diablo Unified School District Website: http://www.mdusd.org/Pages/default.aspx

Information about the Bond Program: http://mdusdmeasurec.org

Strategic Facilities Planning, Eberhart’s Company Website: http://www.strategicfacilitiesplanning.com

960 KNEW AM Radio Website: http://www.960KNEW.com

Bill Acevedo’s Online Profile: https://www.wendel.com/wacevedo

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Episode 74 – New Belgium Brewing Co. Promotes Meaningful Employment

Sep 13, 2012

In Episode 74 of The Wendel Forum (originally aired on August 25, 2012, on 960 KNEW AM radio), show moderator Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Jenn Vervier, director of sustainability at New Belgium Brewing Company

Jenn Vervier

New Belgium Brewing Company prides itself on providing meaningful employment for its owners and workers.  It promotes a “high-involvement culture,” in which individuals “bring their whole selves to work” and everyone’s voice is heard.  Specifically, the company engages in participative decision-making, soliciting feedback from top to bottom.  All co-workers are included in strategic planning and business operations, and financial reports are shared monthly with all workers.

But – they don’t forget that business can be fun!  New Belgium Brewing Company is employee-owned, with workers brought into the ownership after a year.  On that anniversary, they also receive a bike.  Once employees have worked there for five years, they receive a weeklong, all-expenses-paid trip to Belgium to learn about Belgian beer culture.  Those are certainly nice perks!

Make no mistake about it, though, sustainability is a guiding business principle of the company.  In addition to donating to environmental causes, New Belgium Brewing Company is also one of the first breweries to publish a life- cycle carbon footprint of its processes for consumers.  Plus, New Belgium is constantly looking for ways to hone the efficiency and limit the impacts of its operations.  For example, the company instituted a new method of dry hopping that saves millions of gallons of water a year, and it also has changed its bottle lubricants to similarly conserve water.  For a beer company, conserving water has a tremendous influence on the bottom line and the environment.

In addition, New Belgium has a 200kW solar PV array, 800kW of cogeneration, which produces electricity from the methane captured from its on-site process water treatment, and 200kW of thermal storage—making cold water or ice at night, off peak, to use in the brewing process and in office HVAC during the hottest part of the day.

Are you more likely to drink New Belgium Brewing Company beer after learning about its core values?

Post Links:

Listen to the interview with Vervier: Episode 74 of The Wendel Forum (27:50 mins; mp3)

New Belgium Brewing Company Website: http://www.newbelgium.com/

960 KNEW AM Radio Website: http://www.960KNEW.com

Bill Acevedo’s Online Profile: https://www.wendel.com/wacevedo

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Episode 73 – Lindsay Riddell Discusses Current Cleantech Trends

Sep 07, 2012
In Episode 73 of The Wendel Forum (originally aired on August 18, 2012, on 960 KNEW AM radio), show host Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Lindsay Riddell who covers Cleantech, Sustainability, Startups and Venture Capital for the San Francisco Business Times.  They discuss a number of trends in the cleantech environment.
 
Lindsay Riddell photo
Lindsay Riddell covers Cleantech, Sustainability, Startups and Venture Capital for the San Francisco Business Times

Biofules and Biochemicals

Bill and Riddell start of the conversation with a discussion of what’s happening in the Bay Area biofuel and biochemical industries.  Companies in this space are looking for a variety of approaches to break down or convert renewable materials into fuels, soaps, chemicals, oils, food products, fragrances and others that typically rely on petroleum-based production.
 
With the economic downturn, capital became increasingly scarce and companies had to scale back or retool their plans for expansion.  Now, as these companies mature, they are undertaking new approaches for attracting venture investment.  The more established companies have created a roadmap for some of the emerging companies. 
 
Organizations such as the California Institute for Quantitative Biosciences (QB3), which is a joint venture between the University of California campuses at Berkeley, San Francisco, and Santa Cruz, are helping to accelerate innovation and bring discoveries to market more quickly.  Riddell discusses some of the strategies these companies are taking to survive the short term and thrive in the long term.
 

Investment trends

 
Not surprising, with the economic downfall of the past few years, Riddell acknowledges that investor enthusiasm has waned.  She observes that there is still money available for good ideas, but the investment community has been behaving more conservatively. Meanwhile, there are still resources in places like Greenstart, a startup accelerator that works with companies focused on solutions that combine cleantech and IT.  Software applications that address issues such as energy efficiency are still finding some success in the marketplace.

Carbon Data

Riddell recently wrote an article on Facebook’s voluntary reporting on their carbon footprint.  She and Bill discuss the pros and cons of releasing this data and the market pressures at play for companies to become more transparent in their operations.  This move is likened to Wal-Mart coming out several years ago with a commitment to dedicate shelf space to products that have higher levels of sustainability.  It’s clear that these big companies can have incredible influence in the marketplace and change expectations for both consumers and investors.

Electric Vehicles

The Bay Area is home to a thriving network related to the electric vehicle industry – car manufacturers, battery manufacturers, chargers and application developers for locating electric car chargers, crowd-sourcing for charging – the list goes on.  Some of the more interesting new developments include apps for available parking spaces with charging stations, car sharing apps, and there’s even an app that essentially takes the act of hitchhiking to the internet. Most of these are mobile technologies that employ various aspects of GPS tracking.
 
What do you consider to be the most important clean tech trends in the Bay Area?  What’s just over the horizon?
 
Post Links:
 
Listen to the interview with Lindsay Riddell: Episode 73 of The Wendel Forum (27:47 mins; mp3)
 
San Francisco Business Times website: www.bizjournals.com/sanfrancisco
 
Follow Lindsay Riddell on Twitter: @LRiddellSF
 
California Institute for Quantitative Biosciences:  http://qb3.org/
 
 
960 KNEW AM Radio website: http://www.960KNEW.com
 
Bill Acevedo’s online profile: https://www.wendel.com/wacevedo
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Episode 72 – Arlene Blum Discusses Flame Retardants

Aug 23, 2012

In Episode 72 of The Wendel Forum (originally aired on August 11, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Arlene Blum, environmental health activist, mountaineer and author of Annapurna and Breaking Trail.

Arlene Blum
Environmental health activist Arlene Blum

Blum works tirelessly to ban flame retardants from electronics, furniture and baby products.  Flame retardants, which only provide a two- to three-second delay if ignited, are similar to PCBs and DDTs, toxic chemicals that were banned decades ago.  They pose serious, long-term health concerns because they alter hormone levels, damaging reproductive organs, impairing thyroids and changing DNA.  These chemicals continuously migrate out of products.  In the case of couches, for example, they emit toxic dust even when no one is sitting on the couch. 

California State Senator Mark Leno introduced several bills that would have both eliminated flame retardant chemicals and increased fire safety.  Though they were sponsored by health organizations, firefighters and even the furniture industry, the manufacturing lobby successfully defeated those bills.  Meanwhile, only food, drugs and pesticides are regulated by EPA.  No other chemicals – not even asbestos – are regulated, even if they’re highly toxic and enter our bodies other than by mouth.

Blum is also the founder of the Green Science Policy Institute, which provides unbiased scientific data to government, industry and non-governmental organizations to facilitate informed decision-making about chemicals in consumer products. Through the organization, Blum taught a class at UC Berkeley about chemistry and policy.

How concerned are you about toxic chemicals used in furniture?

Post Links:

 Listen to the interview with Arlene Blum: Episode 72 of The Wendel Forum (27:50 mins; mp3)

 Arlene Blum’s website: http://www.arleneblum.com/

 Green Science Policy Institute website: http://greensciencepolicy.org/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: https://www.wendel.com/rylons

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Episode 70 – Mark Dwight Discusses Manufacturing Locally

Aug 13, 2012

In Episode 70 of The Wendel Forum (originally aired on July 21, 2012, on 960 KNEW AM radio), show moderator Bill Acevedo, chair of Wendel Rosen’s sustainable business practice group, welcomes Mark Dwight, founder of San Francisco-based Rickshaw Bagworks.

Mark Dwight of Rickshaw Bagworks visits The Wendel Forum Studio
Mark Dwight of Rickshaw Bagworks visits The Wendel Forum Studio

After leaving his Silicon Valley tech roots, Dwight joined Timbuck2, where he fell in love with the bag business.  When he moved to Rickshaw, he committed to making bags in a sustainable way, including minimizing waste and overstock. 

Rickshaw bags are made with polyester recycled from beverage bottles and industrial plastic, and the company avoids materials that are noxious in their manufacture, use and disposal.  Every Rickshaw bag features a gem tag with the letters PCQ, which stands for “passion, craft and quality,” and a five-pointed star, which represents Rickshaw’s five constituencies: employees, customers, business partners, shareholders and the community.

Bill and Dwight discuss how no business can be 100 percent impact-free and that sustainability starts at the bottom line.  That is, businesses must be sustainable financially in addition to committing to environmental and social justice goals.

Dwight is also the founder of SF Made, a nonprofit organization that promotes local manufacturing. Since its founding two years ago, 350 San Francisco manufacturers, including Anchor Brewing, have become members of SF Made. Dwight established the organization as a 501(c)(3) charitable organization (as opposed to a 501(c)(6) trade organization for for-profit companies) so it can receive tax-deductible donations. The City of San Francisco even awarded a grant to SF Made to promote local economic development. SF Made has served as a model for other communities launching similar geographic branding programs.

Does it matter to you to buy local?

Post Links:

Listen to the interview with Mark Dwight of Rickshaw Bags: Episode 70 of The Wendel Forum (27:34 mins; mp3)

Rickshaw Bags Website: http://www.rickshawbags.com/

SF Made Website: http://www.sfmade.org/

960 KNEW AM Radio Website: http://www.960KNEW.com

Bill Acevedo’s Online Profile: https://www.wendel.com/wacevedo

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Episode 69 – Gary Price Discusses How Clean Energy Can Save Businesses Money

Jul 20, 2012

In Episode 69 of The Wendel Forum (originally aired on July 7, 2012, on 960 KNEW AM radio), show moderator Dick Lyons, co-founder of Wendel Rosen’s sustainable business practice group, welcomes Gary Price, a tax partner at Sensiba San Filippo, one of the Bay Area’s largest accounting firms and a green business certified under the Bay Area Green Business Program

Gary Price

Dick and Price discuss how in the last few years, it’s become economical for businesses to use renewable energy sources, particularly solar and wind, which provide energy without using oil or gas. Because buildings and their occupants produce a significant amount of pollution, even  businesses like accounting, law and other service firms can help the environment by buying clean energy from roof-mounted solar power systems that replace or supplement power from the grid. Even if those businesses occupy just one floor of a big building, they can contribute to lower energy consumption.

Renewable energy used to cost more than electricity purchased from utility companies.  But the 2008 renewable energy credit program helped bring prices down.  Within just four or five years, companies using renewable energy will see the payback, resulting in real cash savings. Using solar and wind energy also has related insurance and bank loan benefits.

A new clean tech trend is that larger renewable energy companies – perhaps a solar company or even a company that produces a part of a solar energy system – have accelerated the use of solar power by become financing companies.  As a result, customers may not need cash at all to buy electricity from roof-mounted solar systems. Solar and wind energy options will continue to grow and experience increased demand, which will further drop the price point.

If a business is interested in switching to renewable energy, Price recommends finding an expert to “put the whole thing together.” Construction and engineering companies, for example, have savvy energy departments. Law and accounting firms also have specialists that put green projects together.

What would it take for your business to buy clean energy?

Post Links:

Listen to the interview with Gary Price: Episode 69 of The Wendel Forum(27:53 mins; mp3)

Sensiba San Filippo website: http://www.ssfllp.com/

Price’s article on Sensible Savings: http://www.ssfllp.com/sustainable-savings-how-businesses-can-profit-big-from-clean-technology/

Bay Area Green Business Program website: http://www.greenbiz.ca.gov/

960 KNEW AM Radio website: http://www.960KNEW.com

Dick Lyons’s online profile: https://www.wendel.com/rylons

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