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1. The U.S. Government
It's amazing what an economic cataclysm can do for your reputation. Historically, Silicon Valley execs and technology investors have viewed the federal government with a mix of suspicion and fear. The best thing the government could do was to provide research funding and stay out of the way.
Now, the billions in loan guarantees and stimulus grants from the Department of Energy are one of the main bulwarks against complete oblivion for automakers, solar manufacturers and others (see Obama Signs Stimulus Package). An estimated $56 to $70 billion of the $787 allocated under the American Recovery and Reinvestment Act (depending on what you include) is earmarked for energy efficiency, grid improvement, mass transportation, environmental cleanup and other segments of the green industry.
The federal government is a direct and indirect customer. The government will spent $4.5 billion to modernize federal buildings for energy efficiency, while the Department of Defense says it wants to become more energy independent in the field with better batteries and more efficient vehicles. $400 million alone will go to the Department of Defense to evaluate green technologies.
But an even bigger influence may come through tax cuts and grants to others. The $7,500 tax credits on electric cars will, many hope, finally allow electric vehicles to gain momentum by eroding the price premium these cars have had to endure. Green building companies tout the $1,500 tax credits for home improvements to potential customers. The solar industry is rocky, but it would be even more difficult if the feds hadn't passed the 30 percent credit late last year.
And for law firms and consultants, the ARRA will be a great source of billable hours.
Honorable mention: everyone else. Worldwide, governments have put up $3 trillion in stimulus funds, according to Lorie Wigle, who heads up Intel's green initiatives.
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2. The Tata Group
In the U.S. many people only know the Tata Group though its $2,500 Nano car. But in Asia, the sprawling conglomerate might as well be its own nation. The $60 billion group, still run by family member R.N. Tata, includes Tata Steel, Tata Chemicals, Tata Consultancy Services, Tata Motors, a cell phone company, a construction group, companies that make food ingredients, household flatware and ceramics, and even its own power company (Tata Power.). It also owns Jaguar, Eight o' Clock Coffee and a bottled water outfit.
India is notorious for a poor electricity grid, high demand, and a lack of liquid fuels it can call its own. As a result, Tata is on the forefront of energy conservation. Some of the things it is working on: powering cell phone towers with vanadium batteries or fuel cells; and installing thermal mass (i.e., ice) air conditioners from Calmac in its new Bangalore R&D facilities
Last November, the company said that all new green buildings would be green, even though the plan might add 15 percent to 20 percent to the cost. Corus, a company inside Tata Steel, has set a goal of reducing carbon dioxide by 2020. One of its big initiatives will be in exploiting the waste heat generated in its factories. Consultants, equipment providers, service companies will all be enlisted.
It also has an impact on the direction of R&D in India. The family founded the India Institute of Science, the grad school that's one notch above the famed India Institute of Technology, and regularly donates to Indian science.
Runner up: Samsung. Yes, the company makes TVs, but it also has heavy industry and construction divisions and the conglomerate is known for micro-managing waste. NEC, Toshiba and Hitachi are worth watching too. Like other Japanese conglomerates, the effort to reduce carbon began years ahead of the west.
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3. General Electric
General Electric will buy and install energy efficiency technologies in its own operations, but its real buying power will come in acquisitions. Once the company decides to enter or expand into a segment, one of the first things it does is buy companies or at least invest in them.
In 1999, it entered the water with the acquisition of Glegg. Since then, it's bought other water companies, incubated ideas in its labs and become one of the largest players in the sector. In wind, GE bought Enron's wind group and recently placed a venture investment in Southwest Windpower, which makes small wind turbines. GE now rivals Vestas for leadership in wind.
Arden Realty emerged in the late '90s as the first real estate investment trust with an overt green strategy. GE Real Estate bought it in 2006 for $4.8 billion.
The company in the past several months has talked up the potential of smart grid. Are acquisitions in the offing?
Honorable mentions: Panasonic, Cisco Systems and Siemens. Three other conglomerates that like to shop.
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4. Walmart
If this cheap company can go green, so can you. The massive retailer Walmart began a push into green technology in 2005 as a way to cut its overhead costs. It worked. Removing light bulbs from coke machines saved $1 million alone. Another $10 million got saved by better recycling practices. The sheer scale of Walmart suddenly made it one of the biggest customers (and experimenters) with technologies like LED lighting, solar lighting, and fuel-cell powered forklifts.
In 2008, it started thinking outward. It told suppliers that they had to increase their energy efficiency by 25 percent by late 2010 and said it would sell only Energy Star-rated air conditioners. Flat panel TVs would have to become 30 percent more energy efficient.
"If we achieved our 25 percent goal just in the U.S. we would save enough electricity to power 3 million homes per year or the equivalent of 10 million barrels of oil," said then CEO Lee Scott in a speech to employees at the time.
Walmart's diktats do not always go fulfilled. Carrots and sticks to get suppliers to adopt RFID tags fell flat. But, unlike the RFID push, Walmart isn't the only one benefitting here. By cutting energy, suppliers will be able to streamline their own costs and prep in advance any carbon legislation proposed by President Obama.
The green scope expands by the year. The latest directives are to reduce plastic bag waste by one third and have suppliers cut packaging by 5 percent by 2013. Wastewater treatment plants are being added to all of the stores in Mexico.
Oh, and it's good business. The company is one of the biggest retailers of energy-efficient bulbs and heavily touts products like recycled plastic hangers. Honorable mention: the much smaller, but hipper Target.
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5. PepsiCo.
In the top 50 buyers of green power released by the Environmental Protection Agency, PepsiCo. ranks second, right behind Intel, as the second largest buyer of renewable energy in the U.S. It bought 1.1 billion kilowatt hours of green power in the first quarter. But the Pepsi Bottling Group was No. 6 with 470 million kilowatt hours. If added together, the two Pepsis (which will likely soon be joined in a corporate merger) surpass Intel. Perhaps more importantly, Pepsi gets 100 percent of its power from green sources. Intel gets 46 percent (see Government, IT Biggest Buyers of Green Power).
But the green push doesn't stop there. Like Coca Cola, Pepsi is examining ways to replace chemicals – such as those that coat the inside of its cans – with materials with fewer potential health risks and fossil fuel content. It also has deployed ozone systems to purify water in some operations. SunChips, made by Pepsi, will come in a fully compostable bag in 2010. (The Frito Lay factory that makes SunChips in Modesto, Calif. also uses a solar thermal powered boiler.) Overall, it wants to cut water consumption by 20 percent, electricity by 20 percent and fuel by 25 percent by 2015.
It will also be one of the principal buyers, most likely, of new types of food additives, sweeteners, and packaging to reduce the ginormous portions on shelves today. Granted, they sell soda and snack foods, but cutting out salt, fats and other unhealthy additives in these foods could help curb health problems in a lot of countries.
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6. Masdar
What isn't Masdar, the colloquial name of the Abu Dhabi Future Energy Company, doing? Various divisions of the far-flung enterprise are buying factory-in-a-box solar systems from Applied Materials, working with MIT and NYU to set up universities in the Middle East, building net zero energy communities complete with solar energy and waste-to-energy plants, and erecting solar thermal farms. This is nation building with a checkbook. Desalination? Nah. Instead, Masdar City will recycle 60 percent of its water (see Masdar Heats Up Concentrating Solar and Masdar Breaks Ground on $230M Solar Factory).
Masdar ultimately has two aims: to develop a sustainable energy industry to supplement and ultimately replace the fossil fuel industry as oil reserves decline. Second, Abu Dhabi hopes to raise a professional class of engineers, lawyers and financial advisors from the countries around the Middle East. Sadly, the region's businesses are still largely run by foreigners, which creates a whole host of social problems.
The big question mark is whether 2008's decline in oil prices and worldwide credit crunch will squeeze the effort. Abu Dhabi hasn't been hit nearly as hard as nearby Dubai, but it's still not the best time to build a country.
Honorable mention: Singapore. An Asian nation with high labor rates, Singapore wants to be a giant in intellectual property and is doing so by recruiting professors from MIT and the UC System. It already has a medical school built by Duke.
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7. Procter and Gamble
If Walmart and Target are going to reduce carbon in their supply chains, it will be up to companies like Procter & Gamble to help them follow through. The company wants to reduce carbon dioxide emissions, water consumption, waste and energy consumption (in operations and in the products it sells) by 20 percent by 2012 and 50 percent by the end of the next decade. The push will be one of the big drivers in green chemistry and recyclable packaging. At the end of 2008, it was already $2 billion along in its goal to sell $20 billion worth of sustainable products by 2012.
[pagebreak:Chevron]
8. Chevron
Chances are, consumers won't buy biofuels directly at dedicated alt-fuel stations. Instead, large, established oil companies will buy biofuels, blend them into B85 or E85 and then sell them to you through their branded outlets. Although all of the traditional oil companies argue (somewhat convincingly) that fossil fuels won't go away for a while, Chevron seems to be the most open minded about alternatives and thus could become one of the big sources of funds for alt fuel development and ultimately one of the big purchasers of ethanol and biodiesel. It has development deals with Solazyme for algae fuels, among others. Keep an eye on BP as well. Shell has over 70 alternative fuel efforts, but doesn't seem as aggressive.
Plan B in alternative fuels. Amyris, Zeachem and others say that cellulosic ethanol won't initially get to market through oil companies. Instead, they plan to sell their fuels directly to large customers like Walmart. The infrastructure will be tough to pull off.
[pagebreak:Google]
9. Google
The search giant Google has found in recent years that success also comes with a higher power bill. Data centers consume 1.5 percent of the power in the U.S. and 2.5 percent in Northern California. And a big portion of that falls on the owners of large server farms like Google.
As a result, the company has joined several standards bodies with the aim of increasing the efficiency of power supplies and data in air conditioning systems. Google buys a lot of servers and components itself, of course, and its acts rebound deeply in the market because the component demands that it puts on its suppliers can lead to more energy efficient parts for all. Earlier this year, it revealed that it puts a 12-volt battery inside each server rather than rely on traditional uninterrupted power supplies. Why? Batteries can be close to 99.9 percent efficient while UPSes wallow around the 95 percent mark. It saves money. This kind of information does not go unnoticed by other buyers.
Google also has pull in Washington because it can act as an educated third party. One solar exec told us last year that Google was instrumental in lobbying for the investment tax credits because D.C. politicians saw the company as a large beta tester, not just another company seeking a tax break.
Honorable mention: IBM. As a consultant, it's helping everyone develop green supply chains (see IBM to Focus Supply Chain Heft on Green).
[pagebreak:McDonald's]
10. McDonald's
Boo. Hiss. Yes, we hear you, but McDonald's represents one of the few companies on the list whose actions in the future will likely touch upon, and affect, nearly every greentech market: transportation, electricity, buildings and efficiency, food and drink, waste and recycling, and health management. Although McDonald's seems to be prodded more by shareholders than internal momentum, the company is trying to figure out ways to survey pesticide use in potatoes, recycle deep fat fryer drippings into biodiesel, reduce greenhouse gases associated with raising cattle, buy fish more sustainably, get suppliers to reduce water and energy consumption, and taking other actions. Here, take a look at the scorecard.
The challenges here are: 1.) Cost; and 2.) The indirect control it has over suppliers on one hand and franchises on the other. There are 31,000 outlets after all and the company sources all of its food. A noted report from Claremont McKenna College in 2006 gave the chain high marks but also complained about vagueness on some issues. Still, this is a company that understands PR and the effect of shaving a few cents out of packaging can go a long way so expect progress here.