That simple, powerful message came out of the World Economic Forum in January, as billionaires and high-ranking politicians gathered to discuss ways to keep our increasingly unstable climate from becoming unlivable.

Think COVID-19 is bad? In many ways, the current pandemic is a taste of what’s to come if we don’t dramatically reduce atmospheric CO2 emissions over the next 30 years. COVID-19 may have temporarily pushed talk of climate action to the margins, but the risks of a warming world remain.

Which brings us back to trees. Trees are humanity’s greatest allies in the fight against climate change, so when planting a trillion of them becomes a call to action for government leaders and multibillionaires, we can only hope they’ll follow through – even in a world currently seized by crisis. That includes Canadian Prime Minister Justin Trudeau’s own pledge to plant two billion trees over the next decade.

The reality is that our forests and woodlands are already under extreme stress, whether as a result of deforestation or wildfires and disease made worse by climate change. One need only look to the recent devastation in Australia, and earlier wildfires in Alberta and California, to see we have a big problem.

In the journal Science last summer, researchers estimated that there’s room on this planet – if we exclude existing urban and agricultural areas – to restore nearly a billion hectares of tree canopy. Doing so, they calculated, could store more than 200 gigatonnes of carbon, or about a quarter of the carbon currently in our atmosphere in the form of heat-trapping gases like CO2 and methane.

Put another way, it would be like removing two-thirds of the CO2 humans have dumped into the atmosphere since the Industrial Revolution. “This highlights global tree restoration as one of the most effective carbon drawdown solutions to date,” the researchers wrote.

Effective, yes, but let’s not underestimate the challenge.

Tree planting isn’t as simple as people might think. Tree planters, often summer students, experience a 25% injury rate, among the highest of almost any industry. Increasingly, these students are exposed to ticks and mosquitos that carry diseases like Lyme and West Nile virus.

Tree planting companies also require a lot of labour, as well as the infrastructure required to support it. The camps set up to support workers need kitchen trailers, showers, sleeping tents, portable toilets, drinking water, fuel, first aid rooms and other amenities – even satellite internet – and that comes at a significant cost.

There’s also a big shortage of labour most years because of the difficult nature of the job. Hauling around bags loaded with seedlings and constantly squatting in the sun while digging with a shovel is exhausting work, made worse by the swarms of blackflies and mosquitoes that make DEET your best friend.

It’s for this reason that folks like Bryce Jones, co-founder and CEO of Toronto-based Flash Forest, are working hard to develop new approaches to tree planting. Jones says all current reforestation efforts fall radically short of the true need. “If the tree-planting targets announced by federal governments in Canada, the U.S., New Zealand and Australia are going to be met, innovation will be necessary.”

Flash Forest, for example, is betting that drones will be an essential part of the solution. The company uses advanced 3D mapping technology and an enhanced fleet of aerial drones to plant trees 10 times faster than conventional approaches and at one-fifth the cost.

Each of its drones is operated by a pilot from the ground and equipped with a pneumatic firing device that shoots seed pods into the soil. The pods are made up of germinated seeds surrounded by a biodegradable, moisture-retaining casing that contains everything the seeds need to flourish, including beneficial acids, nutrients and fungi that promote healthy growth.

And each drone can carry a mix of pods, assuring that multiple types of native trees are planted, rather than monocultures that threaten biodiversity.

But it’s the numbers that are most compelling. With conventional tree planting, one person working 10-hour days could theoretically plant seven million trees over the course of a decade. To hit a trillion trees would require 143,000 people working non-stop – people who need to be put up in camps, fed and paid.

Alternatively, the same goal could be reached using just 2,800 aerial drones, each operated by a single pilot driving around in a pickup truck. How’s that for productivity in the age of self-isolation?

This example highlights the crucial role that automation, robotics, artificial intelligence and other advanced technologies will need to play to achieve the kind of greenhouse gas reductions needed to keep our climate livable.

Ambitious targets are welcome, but they’ll be meaningless unless we can properly harness the power of machines to make up for time that humanity has wasted.

Tyler Hamilton works with cleantech companies across Canada as an advisor with the non-profit MaRS Discovery District in Toronto. He is also on the board of the Ontario Clean Technology Industry Association.

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Since revealed last November, Alberta’s climate plan has received widespread praise, including kudos from U.S. President Barack Obama during an historic speech this June in the House of Commons. It has also been embraced by some of the province’s biggest oil sands producers. Cenovus Energy, Canadian Natural Resources (CNR), Shell Canada and Suncor Energy all endorsed the plan, with Suncor CEO Steve Williams even calling it a “game changer.”

But why do they endorse it? What convinced the top executives of these particular companies to stand up on stage with Notley, as they did last November, and publicly disclose their support for a plan that takes aim at the heart of their business – of their very existence?

In a word, it comes down to efficiency. Notley’s plan, if structured and implemented as proposed, would for the first time reward companies in a sector that emit the least emissions per unit of output (i.e., per barrel of oil) relative to their peers. Simply put, Cenovus, Suncor, Shell and CNR likely stood behind Notley because they believe they are – or can be – the most efficient operators in the oil sands.

“As a general rule, this is a smart thing to do, especially when you have an emissions-intensive and trade-exposed sector that is going to incur a lot of carbon costs,” says Chris Ragan, chair of Canada’s Ecofiscal Commission, which has been closely tracking Alberta’s progress. “I would say Alberta is going about this the right way.”

Decade of ineffectiveness

Context is important to fully appreciate why Alberta’s proposed approach is so “smart.”

Currently, Alberta prices GHGs from oil sands producers and other large emitters using its Specified Gas Emitters Regulation (SGER), which came into force in 2007. (Large emitters, under the rules, are defined as industrial facilities that emit more than 100,000 tonnes of CO2 or equivalent annually.)

SGER was designed around the concept of carbon intensity, which, when talking about the oil sands, equates to the amount of emissions that result from the production of a barrel of oil. Government officials use historical data to establish a carbon intensity benchmark for each oil sands facility, and under the regulation producers are required to reduce annual emissions intensity to 12 per cent (15 per cent in 2016 and rising to 20 per cent in 2017) below their respective per-barrel benchmarks.

If a company didn’t hit its target in a given year and needed to make up the difference, it had the option of using emissions reductions banked from previous years or purchasing credits from other firms that beat their targets. It could also purchase offsets elsewhere in Alberta. Alternatively, it could pay $15 (pre-2016) into a government fund for every tonne of emissions in excess of its target.

The approach, while obviously better than nothing, has its problems. Sure, carbon until recently carried a price at $15 a tonne, but since that price only applied to emissions over-and-above established intensity targets at 100 or so industrial facilities (oil sands, power plants, chemical plants, etc.), it didn’t capture a whole lot. The Pembina Institute calculated that only 4 per cent of Alberta’s total emissions were affected.

In fact, divide the total revenue collected through the carbon levy by total emissions from big emitters and you’ve effectively got a carbon tax of less than $2 a tonne, not nearly enough to drive down industry emissions. “After more than six years in operation, the regulation has not resulted in a reduction of Alberta’s total emissions,” Pembina analyst Andrew Read concluded in a July 2014 report.

At the same time, without an absolute cap on GHGs there has been nothing discouraging industry emissions from rising. For example, a facility that met its compliance target of 12 per cent reduction in carbon intensity could still see overall emissions rise 76 per cent by doubling its oil output.

Rewarding the most efficient

Last November, the Alberta government’s climate change advisory panel recommended a new approach. Led by University of Alberta economics professor Andrew Leach, the panel urged Notley to ditch the SGER and replace it with a new Carbon Competitiveness Regulation.

Assuming Notley’s government implements the recommendations, and there’s every indication it will, here’s what we expect will happen: Come 2018 all industrial facilities with more than 100,000 tonnes of CO2-equivalent emissions will, like the rest of the economy, be required to pay a carbon price of $30 per tonne. This economy-wide carbon tax is expected to generate roughly $5 billion a year for Alberta, according to the Ecofiscal Commission.

For obvious reasons, Alberta is concerned about placing too much of a burden on the industrial geese that lay the province’s golden eggs. Piss off the geese and many will fly to a place with less stringent carbon policies. And good luck attracting new geese.

“By pricing carbon it’s going to increase the cost of production, and that will make investors less willing to locate their operations in the province,” explains Trevor Tombe, a professor of economics at the University of Calgary. Economists refer to this effect as carbon leakage, and it’s a serious concern in a province highly dependent on emissions-intensive, trade-exposed industries like the oil sands.

To address this threat to competitiveness, the Leach panel recommended that some of the revenues collected through the carbon tax – at least $2.5 billion, by some estimates – be returned to big emitters by way of a subsidy tied to how much they produce, whether it’s barrels of oil or kilowatts of electricity or some other sector-specific output. The plan refers to these as “output-based allocations” of emissions credits.

This is where things get interesting. As Leach explained to Corporate Knights, the idea would be to take all oil sands operations in the province and sort them by emissions per barrel, with steam-assisted gravity drainage and mining projects evaluated separately. “Every facility would get an output-based allocation of credits per barrel equal to the 75^th percentile,” said Leach. (In the electricity sector, the comparable benchmark for determining allocations would be “good as best gas” performance.)

Winners and losers

Tombe says such a design means 75 per cent of oil sands firms can be expected to pay more in carbon taxes than what they receive back in subsidies – i.e., emissions credits. A snapshot of emissions intensity at 19 oil sands operations suggests that projects majority owned by Shell, Cenovus and Suncor are likely to make the top quartile of performers. In other words, they run the most efficient and least GHG-intensive operations in the industry.

“What this policy does is eliminate preferential treatment to higher emitting firms,” Tombe says. “It absolutely will benefit those that are more efficient, and does so in a way that’s market-based. That is, creating a level playing field where the same output subsidy is provided to everyone.”

Looking at Cenovus and Nexen, for example, Tombe calculates that emissions from Nexen’s Long Lake operation are four to five times more intensive than Cenovus Energy’s Christina Lake and Foster Creek projects. “Cenovus is going to make money. It will receive more in effective subsidies than it will pay in carbon taxes, whereas Nexen will pay a lot,” he says. “I suspect that’s the business motivation for Cenovus getting behind the plan.” It could also explain why Nexen was noticeably absent from Notley’s November announcement.

Ragan says the proposed plan will do a better job of pushing emissions-intensive industries in Alberta to become more efficient. “There’s now an incentive for them to get better,” he says. “If you can get yourself into that (top quartile) club, then you’re better off.”

To make sure this club continues to up its game, output-based allocations would decrease at about 1 to 2 per cent annually “to reflect expected energy efficiency improvements,” according to the Leach panel’s report. This approach, combined with the intention of capping total annual oil sands emissions in the province at 100 megatonnes, could set the industry on a more sustainable path.

There’s already evidence it has. In July, Suncor’s Williams told analysts on a conference call that the company has asked the Alberta government if it could “strand” reserves that cost more to extract and carry relatively high emissions intensities. He cited the potential of saving 10 to 20 per cent on project operating costs.

The numbers are consistent with a Carbon Tracker report released in May which argued that seven major oil and gas companies could create $100 billion (U.S.) in value by avoiding high-cost development.

It may seem counter-intuitive, but in a carbon-constrained world such an analysis increasingly makes sense.

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But Eskom can’t take credit for this period of relative stability. On the contrary, the situation is not about what Eskom did; it’s about how industry reacted. Electricity demand has eased in the country. Worries over patchy, unpredictable power supply have driven away investment and slowed economic activity. South Africa’s massive mining sector is among the most affected.

“The recent power crisis in South Africa is a textbook example of the impact of unreliable power supply, curtailing output in employment-intensive industries such as mining and placing the country’s reputation at risk as an attractive investment destination,” according to the World Bank. The risks are not unique to South Africa. The World Bank estimates that two-thirds of people in sub-Saharan Africa live without electricity and those with it suffer constant disruption.

For Johannesburg-based Gold Fields, the world’s seventh-largest gold producer, this power predicament was the nudge it needed to seriously consider the role that distributed renewable energy could play in its operations. In 2014 the company partnered with Carbon War Room (CWR), the Richard Branson-founded think-and-do tank – now part of the Rocky Mountain Institute – that helps industries look for profitable ways to reduce greenhouse gas emissions.

Tessa Lee, a senior associate with CWR’s Sunshine for Mines program, said the non-profit began focusing its attention on the mining industry in 2012. That’s when it first heard about a South African chromium mine operated by Munich-based Cronimet Mining, which was using a 1-megawatt solar PV system to offset its use of diesel generators.

“Here was something that made good business sense,” said Lee. But when CWR began looking around the world for similar examples, it couldn’t find many. “So why wasn’t more investment flowing into this opportunity?”

Navigant Research estimates that the global mining industry consumes about 400 terawatt-hours of electricity per year – nearly as much as all of France – yet renewable energy (excluding large hydropower) only accounts for 0.1 per cent of total supply. Most of that supply consists of small pilot projects supported by government subsidies.

A deeper dive by CWR’s team revealed a number of market hurdles, including a perception in the industry that renewables are unproven, too expensive, and costly to finance. Many mines also have a shorter lifespan than a typical solar, wind or geothermal operation, which have longer paybacks than diesel generators. Lack of in-house expertise posed another problem.

“We looked at what we could do to start overcoming those barriers,” Lee added.

A key part of that process was the 2014 partnership with Gold Fields, which agreed to become a case study from which the mining industry could learn. CWR looked at the company’s entire global portfolio of mining sites, from Australia to Peru to South Africa. It analyzed how much Gold Fields was paying to purchase and transport diesel fuel in each region, and the level of price volatility and environmental risk the company faced. Was energy security itself at risk? Was grid power an available, viable and reliable alternative?

Gold Fields’ South Deep gold mine in northeast South Africa stood out as a potential good fit for solar. Often called the continent’s “last great gold mine,” South Deep is one of the largest gold mines in the world, and while it began operation in 1961, its lifespan is expected to stretch to 2080.

The mine processes about 300,000 tonnes of ore each month, and needs an average of 55 megawatts to operate. Currently, Eskom supplies that power mostly from its fleet of coal-fired power plants. The price of that dirty power is rising and reliability has been falling.

To get a sense of how solar would compare, Gold Fields launched a procurement process for 40 megawatts of solar that resulted in an impressive 75 expressions of interest and 10 final proposals, many of which claimed the clean electricity from their projects could match Eskom’s electricity rates from their first day of operation. This assumed a 20-year-plus power purchase agreement would be in place.

“We even learned that energy storage could also be installed on par with the cost of diesel generation, so that was big news for the industry,” said Lee. Gold Fields is now reviewing those bids and plans to select a developer this spring. If all goes well, construction will begin by year’s end. In the meantime, Gold Fields is looking to replicate the approach with its Salares Norte gold mine in the Atacama region of northern Chile.

“The cost of solar PV has come down 80 per cent in the last five years, and it continues to come down. Battery costs are coming down,” she added. “There’s awareness now in the mining industry that renewables are not a science project anymore. It’s all changing pretty quickly.”

Tipping point?

That view is consistent with the findings of Navigant, which in a 2013 report declared the “tipping point has now been reached.” The mining industry doesn’t just see the integration of renewables as doable; it now views solar, wind and other green power sources as desirable, perhaps even essential.

Navigant forecasts renewables (again, excluding large hydro) will represent between 5 and 8 per cent of global mining industry power consumption within the next six years, with investment in green power projects expected to increase five-fold to more than $6 billion (U.S.) between 2015 and 2022. CWR is pushing for renewables to represent 15 per cent of industry power consumption by 2025.

Africa is one hotbed, along with South America, where countries such as Argentina and Chile have been pushing to get more renewables on the grid. Argentina is aiming for 20 per cent by 2020, up from 3 per cent today, while Chile is targeting the same for 2025, up from 8 per cent. That will lower the carbon footprint of grid-connected mining operations.

But for those companies in remote areas where grid access is non-existent and using diesel is expensive and environmentally risky, renewables have become a default consideration. Consider that mines in Latin America invested just $37 million (U.S.) in renewable energy projects in 2013. Ernst & Young expects that figure will rise dramatically to more than $1 billion by 2022.

“For new projects it’s definitely not an afterthought anymore,” said Scott Fraser, an independent energy consultant in Toronto and former director of power projects for Barrick Gold.

A large number of the world’s mining companies are Canadian, so it’s a trend that Bay Street is closely following, he said. For mines operating within Canada, the story is playing out a bit differently. Unlike Africa and South America, solar is a less popular option given the northern latitude of many Canadian mines and the lack of wintertime daylight. In these regions, wind has proven a more popular choice where grid access is not available, Fraser said.

One of the highest-profile examples is Rio Tinto’s Diavik diamond mine in the Northwest Territories, about 300 kilometres northeast of Yellowknife. Four wind turbines were erected in 2013 to reduce the use of diesel fuel, which had to be trucked in on a 550-km ice road at a cost of $70 million a year. Today, the wind reduces diesel demand by 10 per cent and is saving the mine about $5 million a year. The project is expected to pay for itself in six years.

“One of the main things mining companies are concerned about when transporting diesel to these remote locations is the real risk of spillage,” said Fraser. “Losing just one tanker along a long ice road is a real risk and concern, and is treated very seriously. So renewables are seen as reducing that risk.”

A government-assisted pilot project at Glencore’s Raglan Mine, located at the northern tip of Quebec, offers a peek at how remote mining operations might evolve across Canada. In mid-2014 the company teamed up with Tugliq Energy and engineering firm Hatch to install a 3-megawatt wind turbine for offsetting diesel use at the nickel mine.

It’s not unlike the Diavik mine, except for one twist. This year, a flywheel, lithium-ion battery system and hydrogen station will be added to create a remote smart microgrid that could one day completely eliminate the need for diesel fuel at the site. Michel Carreau, director of energy at Hatch, said Tugliq Energy intends to build similar wind-storage systems at other mines and remote communities across Canada.

The technology is getting there fast, said Don Bubar, president and chief executive of Toronto-based Avalon Advanced Materials. “It’s just a matter of the technology having progressed to the point where it now makes increasing economic sense, not just environmental sense.”

Avalon is looking to mine lithium minerals used in lithium-ion batteries at a site located near Kenora, Ontario. Bubar said he’s committed to powering the project with a possible combination of hydro, wind and solar, and is also considering energy storage. “We are scoping out all the possibilities now,” he said.

Barriers still remain. What happens, for example, when the life of a mine is shorter than the life and payback of the renewable energy and storage equipment being installed? Who’s going to buy all of that power when the mine closes? And if no buyer is obvious, who will carry the risk if a project goes forward?

“These are real problems, but I don’t think they’re impossible to solve,” said Lee at CWR. “The recognition is there that this is something we need to be figure out. It may be a question of how we can get more creative with the business model.”

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Lombard also had major street cred in the technology world. During the 1990s he co-founded what grew to become Toronto’s largest Internet service provider, and as chief executive of Isolation Systems, a maker of virtual private network products, he built a company that in 1998 was sold for $37 million and at one point was owned by Intel.

So it was a surprise to colleagues when the mild-mannered Lombard told them he was giving it all up to start a company that makes a better home thermostat. “People thought ‘You’ve got to be nuts’,” recalls Lombard, explaining that he made the decision just weeks before Apple released its first iPhone. “It was based on this simple idea of helping people reduce energy, save money and reduce their carbon footprint.”

The way Lombard saw it, thermostats at the time were just too dumb and did a poor job of keeping people comfortable in their homes. Even the programmable kind – which most people don’t take the time to program – fell short, mostly because in the real world the movement of individuals in and out of a home doesn’t always follow a predictable weekly schedule. There was also the fact that thermostats pre-2007 were ugly plastic rectangles with monochrome LCD displays – a waste of wall space for a generation with higher aesthetic expectations.

Nine years later, Toronto-based Ecobee, the company Lombard founded, is creating major market buzz and holding its own against deep-pocketed newcomers and incumbents alike, most notably Google-owned Nest and longtime thermostat king Honeywell. Lombard says Ecobee has doubled the size of its business since launching its first product in 2009, and has outgrown three – soon to be four – head offices to accommodate its rapidly growing workforce, which today sits at about 120.

As for market impact, in six years the company has helped its customers save an estimated one terawatt hour of power, Lombard says. It’s the equivalent of taking a small coal-fired power plant off the grid for a year. According to the company’s own analysis, the average Ecobee user reduces energy consumed for home cooling and heating by 23 per cent. “People really, really love it,” says Lombard.

Ecobee started off well, making an early splash when it launched the industry’s first Wi-Fi-enabled thermostat. That first-generation device signalled the promise of the connected “smart” home and gave homeowners their first sense of where the market was destined to go. Customers could easily program the thermostat through its unique colour touchscreen or remotely through an Internet-connected device. Delivery of real-time weather reports was an added bonus. Ecobee could also do software upgrades to all installed thermostats without customers even knowing.

“When we launched, we were the only product of its kind, and we were kicking Honeywell’s butt,” says Lombard, apologizing in typical Canadian fashion for potentially sounding arrogant. He wasn’t, given that Honeywell controlled about 60 per cent of the thermostat market at the time. “It was really exciting,” he adds. “We were doing high-fives in the office.”

Nest bumps the hive

Ecobee’s current office is located on Toronto’s University Avenue in the historic Bank of Canada Building, a 60-year-old structure based on classical architecture that used to secure all the cash and gold in the region in theft-proof vaults. When the elevator doors open on the fourth floor, however, it’s like being in a time machine that reveals a portal to the 21st century.

Not that the office is anything special. It’s modern, as expected, and is a hive of activity typical of a tech company – young worker bees behind computer screens quietly typing away. It’s clear that what was deemed “crazy” and risky by Bay Street colleagues in 2007 has proved, in hindsight, a sane bet.

“Stuart has a gritty determination underneath,” says Jane Kearns, a senior advisor with the cleantech practice at the MaRS Discovery District, which counts Ecobee as an early client. “It’s impressive what they’ve done. They’ve really been smart about it.”

But Kearns, like others, had concerns when she learned that Google-backed Nest was coming to market with its own smart thermostat. Many saw the beautifully designed Nest device as an Ecobee-killer, even more so after Google purchased the company in 2014 for a whopping $3.2 billion (U.S.).

Nest Labs was co-founded in 2010 by CEO Tony Fadell, a former senior vice-president of Apple’s iPod division. Fadell helped design the iPod and reported directly to Steve Jobs. His commitment to aesthetics and ease-of-use while at Apple is reflected in the design of his “learning” thermostat.

I ask Lombard about the Nest factor. He says Ecobee was never “up against the ropes” financially and has always performed well, but admits that the emergence of Nest was a “shock to the system” that put tremendous pressure on Ecobee to up its game.

“When Nest came to market it was a wake-up call,” Lombard says. “Certainly there was this period where it felt like we had this twin that was smarter and better looking.” Until Nest launched, Ecobee thought it was playing in the NHL. After the first hockey puck-shaped Nest device was dropped in the market in 2012, “we felt more like champions of the North Toronto minor bantam hockey league,” he jokes.

Not resigned to being a second stringer in the big leagues, Lombard stayed upbeat. He viewed the arrival of Nest as an opportunity to make some big changes. Ecobee’s designers and engineers were tasked with giving the device a dramatic facelift, including a stylish, slim new look and a basket of novel capabilities.

When finally released in September 2014, the third-generation thermostat – called Ecobee3 – was greeted with great fanfare. It has consistently received more positive reviews than the Nest device. Within four months of launching, it unseated Nest as PC Magazine’s Editors’ Choice for smart thermostats, and the accolades keep rolling in.

“The Ecobee3 worked like a charm,” according to PC Magazine reviewer John Delaney, who praised the device for being loaded with features, easy to install and “best suited” for people with flexible schedules. Most recently, in January, Ecobee was named to the Global Cleantech 100’s Ones to Watch list, which recognizes new companies that are “catching the eye” of big market players.

Best Buy and Apple were quick to start carrying Ecobee3 in select stores and online, and eventually the device was available through all of their store locations. Home Depot also began stocking the thermostat, putting it side-by-side with Nest and high-end models from Honeywell. Heating and air-conditioning giant Carrier, an important distribution partner for Ecobee, dove in to become a minority investor. An even bigger market signal came in July 2015, when Apple decided to dump Nest from its stores and go exclusively with Ecobee3.

Needless to say, meeting the high standards that earned Apple’s exclusive endorsement gave Ecobee a major boost as the company entered the latter part of 2015. Rahul Raj, vice-president of marketing and e-commerce at Ecobee, says having the Apple “halo” hovering over Ecobee has been nothing short of huge.

“People know that we’re quality enough to be in the Apple store, so it gives them a kind of shorthand. Even if they don’t do their own research, just knowing it’s in that store means it must be pretty good,” says Raj, adding that it helped level the field with Nest when it came to brand awareness – particularly in the U.S. market. “The Americans have taken notice.”

Asked why he believes Apple kicked Nest out of its stores, Lombard kept it simple: “I think we have a better product.”

Sting like a bee

The bee is now swarming around the nest. Ecobee still trails Nest, but last year it surpassed Honeywell to become the second-best selling Internet-connected thermostat in the United States. It’s not an insignificant achievement. “They were ostensibly the Kleenex of thermostats, and we’ve overtaken them,” says Raj, who is convinced Ecobee is positioned to overtake Nest this year.

According to research firm NPD, Ecobee had 24 per cent of the smart thermostat market by mid-2015. Since then, there’s good reason to believe it has captured a larger share.

The market moves fast and can change abruptly, but Ecobee3 currently has an important edge over Nest. The $250 thermostat ships with a wireless sensor that can be placed in any room. Other home thermostats only measure temperature in a single location, usually the kitchen or living room. That often results in the ground floor being comfortable but upstairs rooms being too hot or cold.

Ecobee’s sensor can separately monitor temperature in another room, as well as when people come and go from that location. The sensor talks to the main thermostat, which uses a proprietary algorithm to spot patterns and calculate an ideal temperature balance. To bolster accuracy even more, up to 32 sensors (at $79 a pair) can be added to fine tune comfort, which is particularly handy in larger homes.

Scott Jenschke, who is responsible for heating and cooling merchandise at Home Depot’s headquarters in Atlanta, says this unique feature is what seems to be resonating the most with customers. It’s also what Delaney, in his PC Magazine review of Ecobee3, noted as a comparative weakness with the Nest thermostat. “The Nest can’t sense temperature or motion in other rooms, and may leave you shivering if you’re in another part of the house,” he wrote.

There are lots of other goodies. In late 2014, Ecobee launched its free Home IQ service, which gives homeowners detailed insights into how they’re using energy, what they can do to reduce costs, and how their home compares to neighbourhood averages. “If you start with the premise that people want to do the right thing, you just have to give them the tools to do it,” Lombard says. “We can tell them how fast their home heats up and cools down, how tight or leaky it is, and how efficient your (home heating and cooling) equipment is. If you capture that data on an anonymized basis, you even have the opportunity to inform public policy.”

This is all combined with real-time alerts and actions. When someone is away on vacation, for example, Ecobee3 can send an e-mail nudge if it appears the furnace has stopped working, potentially putting pipes at risk of freezing. Lombard tells of one customer who was alerted that his home’s air conditioner had been running for hours but, strangely, the house was not cooling down. The customer, perplexed at first, put two and two together: his daughter was having an unsanctioned party and the door was always opening as people came and went. “He confronted his daughter,” Lombard says. “She finally admitted it.”

Al Shuman, vice-president of marketing at Just Energy, a major natural gas and electricity retailer, says homeowners appreciate the control. “Honestly, what people most like is just the idea of adjusting their thermostat from their bedroom using their smart phone,” says Shuman, whose company has been an Ecobee partner for two years and this spring plans to mass market Ecobee3.

“It’s really intuitive, and so much improved over the second-generation one. People play with it more, they treat it as jewelry and take pride in it,” he says. Still, he gives Nest credit for boosting public awareness of the broader smart thermostat market. “We do get a lot of customers that ask how it compares to the Nest. At first blush people might say, hey, that’s not a Nest, but frankly, the features and functionality are there.”

Those features seem to get richer by the day. Part of the reason Apple gave Ecobee exclusive access to its online and brick-and-mortar stores is that it was the first smart thermostat certified to work with Apple HomeKit, the developer platform that allows non-Apple smart devices to interact seamlessly with iOS, the company’s proprietary mobile operating system. It allowed Ecobee to virtually mimic the Ecobee3 display through an app on the homeowner’s iPhone, iPad, iPod touch or Apple Watch. Users get control on the go, including the ability to issue voice commands through Siri.

HomeKit also enabled geofencing – the ability to instruct the thermostat to operate in a certain way based on the personal location of Apple device users in a household. For example, it can be told to lower the temperature when home occupants are more than five kilometres away, and crank it back up when someone gets within two kilometres of the house.

The move to HomeKit and closer partnership with Apple has put Nest and Honeywell on the defensive. “This year has by far been our best year ever, and it’s given us a lot more momentum just based on the increased awareness,” says Lombard, at the same time reiterating that Ecobee3 is also Android compatible. “Our Android users are just as important to us, but our Apple relationship just gets us the bigger mention.”

Avoiding colony collapse

Kearns at the MaRS cleantech practice says Ecobee’s ability to navigate through the Nest threat has been impressive, with the company gaining some crucial traction in the marketplace. But the technology sector never stands still, and with Google the long-term vision is to have Nest dominate the Internet of Things that are expected to make up a smart home. Already, Nest has a smart smoke and carbon monoxide alarm, and a Nest Cam with motion and noise detection that can double as a nanny-pet cam or home security product. All of these products can be controlled remotely through a smart phone. “Ecobee is trendy and popular, but it’s still a thermostat and they’re still a one-trick pony, which for me is a pretty risky place to be,” says Kearns.

Lombard has no intention of standing still. Ecobee continues to develop partnerships with major utilities and position its thermostat as a way for homeowners to participate in demand-response programs. Eventually, customers might be able to monitor and control electric vehicles and energy storage systems connected to their homes. Utilities, with customer permission and under specific conditions, could one day remotely control the energy consumption of tens of thousands of homes to better manage the flow of solar and wind energy on the grid.

Ecobee also has a public API, or application program interface, meaning anyone can develop their own app to add value and choice to the Ecobee app. Lombard says there are a thousand applications currently being designed around Ecobee3.

Given the huge amount of data Ecobee is collecting, there seems no end to how it can be used to improve the customer experience.

The post Taking the temperature appeared first on Corporate Knights.

Three’s company but four is a party. When I started developing my personal signature in high school math class, I even incorporated the number four into the scribble that is my last name. So perhaps it’s fitting that after four years of leading the small but resourceful editorial team at Corporate Knights – which by the way puts out four issues a year – it’s time for me to move along.

This is my final issue as editor-in-chief of this important magazine, which since 2002 has been the voice of clean capitalism and sustainable development in Canada and beyond. Within the corporate world – through our global and domestic rankings and in-depth analysis – we have shown companies and their leaders how to become more responsible members of the community and recognized those who, after embracing that mission, are achieving results.

I leave this role knowing that the connection between sustainable performance, financial performance, and company value has never been stronger, and that the triple-bottom line imperative is becoming conventional thinking to a new generation of business leaders and students. (See our Better World MBA ranking for the business schools leading on sustainability.)

Could it be that reality is starting to sink in for more organizations, political leaders, educators, citizens and consumers: that we’re a fast-growing species living on a planet with finite resources? Water. Food. Energy. Minerals. Metals. A stable climate. All kind of important stuff. Using our resources more productively, making our energy cleaner, growing our food more efficiently – do it well and we might be able to stick around on this planet a little longer and live comfortable lives.

And at the same time, as I say in most of my editorials, we’ve got a lot of work to do – and need to push harder. Climate change, the mother of all issues, is happening at a rate much faster than expected. The latest studies on melting glaciers in Greenland and Antarctica, and associated sea-level projections, are simply shocking. Extreme drought in California and forest fires in B.C., Alberta and Saskatchewan are some of the latest events this past summer to keep the issue top of mind. There will be more.

Key political leaders seem finally to be getting their act together. President Obama has come out strong on the issue. China’s playing ball. As we march toward the much-anticipated Paris climate summit in December, there’s a lot of hope that a serious international deal will be reached. Are we setting ourselves up for disappointment? You can find out what you should and shouldn’t expect to come out of Paris here.

One certainty: If Paris proves a complete failure Pope Francis will be cursing in multiple languages. Four years on, however, I can give you four reasons to remain hopeful.

• The cost of solar has fallen much faster than anyone expected, and renewable energy in general has become cost-competitive with coal and increasingly natural gas. Energy storage is following the same trajectory, and a turning point for when electric vehicles are less expensive and perform better than conventional cars is all but inevitable. That will be the oil industry’s “Kodak moment,” as Chatham House researcher John Mitchell suggests in my story on how oil companies might transition to a low-carbon economy.

• Young people get it and aren’t tied down to conventional thinking. They are changing corporate culture on the inside. They are choosing companies that align with their values, and those companies that don’t will have a more difficult time attracting good talent. Millennials are driving less, sharing more, and approaching problems with a Silicon Valley-type mindset. “They’re coming at the energy arena, not with a 30 year history at a fossil fuel company, but with entrepreneurial, spirited IT experience and a willingness to make things happen,” says Jules Kortenhorst, CEO of the Rocky Mountain Institute. Young people are taking their cues from Elon Musk, not the Koch Brothers.

• The idea of pricing carbon is gaining momentum worldwide, and even seeing some bipartisan support in the United States. Where federal leaders in some countries are resistant, regional leaders – in provinces and states – are bypassing their federal counterparts (yay Ontario!) and going it alone with support from cities. It’s only a matter of time before such initiatives force federal action where none has previously existed.

• More people are hitting the streets and speaking out. Climate protests continue to grow in size. The divestment movement, symbolic of our growing desire for action, is gathering speed. Getting an oil pipeline built has never been more difficult. As you can read on our Keystone XL story here, environmentalists are hitting fossil fuel companies where it hurts, to great effect.

In this environment, I leave knowing that the magazine is in good hands with managing editor Jeremy Runnalls moving up to editor-in-chief, and with associate publisher Natalie Sorichetti and director of research Michael Yow providing critical support.

Finally, a heartfelt thank you to Corporate Knights co-founder and CEO Toby Heaps, a source of inspiration – and occasional frustration – for all of us. Keep up the fight, Mr. Heaps. Honoured to call you my friend.

The post A changing of the guard at Corporate Knights appeared first on Corporate Knights.

That’s pretty much what six of Europe’s biggest oil and gas companies said in a joint letter sent in May to Christiana Figueres, the United Nations’ top climate bureaucrat.

“We stand ready to play our part,” Shell, BP, Total, Statoil, Eni and BG Group wrote, pointing to a number of actions they are already taking to limit emissions, from greater investment in lower-carbon natural gas and operational efficiency to supplying more renewable energy and exploring the use of carbon capture and storage.

“For us to do more, we need governments across the world to provide us with clear, stable, long-term, ambitious policy frameworks,” they said. “We believe that a price on carbon should be a key element of these frameworks.”

Figueres, being a diplomat, was diplomatic in her formal response. She’s been around the climate negotiations block more than a few times, and has heard the big fossil fuel companies talk a good game before. Her message back: give the world a reason to believe you.

For starters, she said, tell us how your company would transition over the next 80 years to successfully operate in a decarbonized global economy, which is a long-term goal the G7 leaders – including, to the surprise of many, Canadian Prime Minister Stephen Harper – agreed to in June.

“I hope you can understand,” she added, governments and civil society “need to be reassured of your sincere commitment.”

The hint of skepticism in Figueres’ response is no surprise. For years, the fossil-fuel industry has talked about the need to cooperatively solve the climate challenge, and many of the world’s largest oil and gas companies have for more than a decade privately backed, if not publicly called for, a global price on carbon.

Yet, as former U.K. climate negotiator John Ashton regularly points out, these same companies continue to invest in the oil sands, call for the construction of more petroleum pipelines and lobby governments to open up environmentally sensitive territories for exploration. They promote natural gas over renewable energy, and they push for carbon capture and storage without actually building it at a scale that matters.

They no longer deny the existence of man-made climate change and the need to do something about it, but they’re unwilling to map out what their transition to a low-carbon economy might look like. Indeed, they refuse to recognize any need to fundamentally transform their business model.

Ashton made this contradiction clear in an open letter to Shell chief executive Ben van Beurden in March.

The industry’s position, he wrote, is “a manifesto for the oil and gas status quo.” One need only point to Shell’s recent decision to restart its deep drilling efforts (since cancelled) in the Arctic. It equates to “psychopathic” behaviour, Ashton added, and reveals a cognitive dissonance that persists throughout the industry. “Commitment, to a transition that ends where it began.”

Jules Kortenhorst, CEO of the Boulder, Colorado-based Rocky Mountain Institute, who spent nearly a decade working for Shell, shares that observation. “I do not believe that any of these companies have yet come to grips with the brutal facts that they have to address,” said Kortenhorst in an interview with Corporate Knights.

Dangerous gamble

Those facts are piling up quickly, from Pope Francis’s encyclical on climate change, to the crackdowns on coal in China and the United States, to an expanding global divestment campaign that – if nothing else – has alerted investors to the growing risks of banking on oil and coal stocks, for both the planet and their portfolios.

“Investors will look for company strategies that are attuned to the new game rather than the rhetoric of the old,” according to Chatham House, the respected policy think tank.

The oil industry is vulnerable, and the speed at which their value can be erased is already starting to grab headlines. California’s two biggest pension funds lost more than $5 billion (U.S.) since June 2014 because of the declining value of their fossil fuel holdings, while Norway’s massive sovereign fund, which has already divested many of its fossil fuel assets, still lost $40 billion between July and August, partly because of falling oil prices.

In Canada, the oil sands are arguably suffering the worst. Since hitting its peak in March 2011, the BlackRock iShares Oil Sands Index Fund, which tracks the biggest energy companies operating in Alberta’s oil sands, has lost more than two-thirds of its value – and roughly half its value since oil prices began plunging last August.

There’s no question falling oil prices have played a big role in recent value declines, but as climate policy gathers momentum and new technologies, such as solar and energy storage, continue their trend of becoming more affordable and ubiquitous the medium- and long-term outlook, especially for coal and oil, looks grim.

“For oil, the Kodak moment will be when somebody produces a low-cost battery, as that will change the transport market profoundly,” said John Mitchell, an associate research fellow with Chatham House. Demand for oil, he explained, will fall dramatically once electric vehicles can compete with gasoline-fuelled vehicles on both performance and price. (The “Kodak moment” refers to the demise or decline of a business that fails to see or adapt to a disruptive change in its industry, such as Kodak with digital photography).

On the policy front, how the big energy companies react depends on whether they believe strict climate policy is not just inevitable but also imminent. For the scientific community, the answer is clear – if, as a society, we hope to keep the average global temperature increase from reaching dangerous levels (i.e. keeping the increase below 2 degrees C) then dramatic change is necessary, the sooner the better.

“With the oil companies it’s not whether the world is warming as much as whether the policy is going to be strong or not,” said Mitchell. “I think the companies have a way to go in acknowledging how serious the problem will be.”

This is perhaps most evident in the oil sands. When Linda McQuaig, a Toronto NDP candidate in Canada’s upcoming federal election, commented this summer on a political TV show “a lot of the oil sands oil may have to stay in the ground,” the backlash and shaming from industry and the Harper government was swift and harsh.

McQuaig’s comments differed little from those of Bank of England Governor Mark Carney or the World Bank or the International Energy Agency – all have publicly acknowledged that two-thirds of the world’s known reserves of fossil fuels will have to be left undeveloped if humanity has a fighting chance against climate change. “We’re not going to be able to burn it all,” U.S. President Barack Obama bluntly said last year.

Yet talk about pace and scale of development in Canada’s oil sands is considered unspeakable – a blasphemy – in political and industry circles, even though oil sands projects are widely recognized as the highest-risk, highest-cost projects in the industry, and likely the first to be impacted as the noose of climate policy tightens. The country, in essence, is in a persistent state of denial.

“Adopting this low-carbon future will not be without pain for some,” concluded a comprehensive report released in August by Citigroup. “We estimate that the total value of stranded assets could be over $100 trillion based on current market prices.”

One would think that the potential implications of this for a Canadian economy highly dependent on the oil sands would be grounds for an open, honest discussion of how the country and the industry needs to move forward.

Making such a discussion even more critical is how the direct impacts of climate change, such as record-breaking drought and flooding, are already impacting oil sands developers. For example, Alberta’s energy regulator told many oil sands operators in July that they can’t divert water from the Athabasca, Peace and Wabasca rivers for use in their operations.

The reason? An unusually dry summer, which climate scientists say is likely to become a more common occurrence in the region.

Options for transition

To be fair, some petroleum companies are more progressive than others, and within individual companies, there are executives and younger parts of the workforce that privately express the need for the industry to change its ways. “But even if you realize that privately, it’s hard to share it with anyone internally,” said one industry consultant. “That’s because the disconnect is so strong between the corporate strategy and the public interest.”

Assuming the executive management teams of large energy companies were to sit down, roll up their sleeves and develop a transition map – one that included a low-carbon, 2-degree scenario – what options might be in their plan, and could such a plan be designed to keep investors from running for the hills?

“I do not envy the oil company CEOs,” said Kortenhorst, adding that he understands why industry leaders are so reluctant to face this new reality head on.

“It’s daunting to think through how a company – whose valuation and competencies, infrastructure, inherent skills, history is all based on large scale projects with long time horizons and massive capital investments – can shift to a new reality that’s going to be decentralized, based on more modest capital investments and shorter time horizons, and is about electrons rather than molecules.”

Below are some actions the big oil companies are likely to consider as they map out their adaptation strategies:

1) Throw coal under the bus. This infighting in the fossil fuel industry is happening right now. Under a 2-degree scenario, Citigroup says about one-third of oil reserves, half of natural gas reserves, and 80 per cent of coal reserves need to stay in the ground. Burning coal emits the highest amount of CO2 per unit of energy it delivers, so regulation and carbon pricing hurts the coal industry most. “Coal is first on the firing line,” said one analyst.

The oil and gas companies know this, which is why they’re speaking out in support of a global price on carbon. For them, every tonne of coal that gets left in the ground leaves more of the global carbon budget to oil and gas. From hereon in, oil and gas companies will be jockeying for a bigger piece of that fixed budget to extend the life of their traditional businesses for as long as possible.

2) Add more natural gas to the asset mix. Natural gas, generally, emits half the amount of CO2 per unit of electricity as oil does, so it makes sense for big petroleum companies to lean on this resource more as a way to position their respective asset mixes as lower carbon and secure an even larger piece of the global carbon budget. It also makes use of existing expertise in drilling, fracking, and pipeline transmission.

Where demand for oil is expected to fall in a 2-degree scenario, demand for natural gas is expected to hold steady or grow. It’s why oil giants like Exxon are investing more these days in natural gas assets. “A key point about a carbon price is that its initial effect will favour gas over coal in the power system,” says Mark Fulton, an advisor to the Carbon Tracker Initiative, which has led research on what a 2-degree carbon budget might look like.

Relying more on natural gas is not a long-term climate solution, but it buys the big energy companies some time and will be needed to help manage the variable nature of wind and solar technologies, at least until large-scale energy storage becomes more economical.

3) Kill risky, high-cost exploration and return value to shareholders. This is where big oil is entering new territory, but big investors are increasingly asking: Why spend billions of dollars pursuing high-cost, high-risk projects when there’s a strong chance they will be stranded in a climate-constrained world?

“It costs close to 20 per cent cost of capital to drill for oil or for gas in the Arctic, so why for Pete’s sake are we still seeking energy in the Arctic?” said Kortenhorst, referring specifically to Shell’s Arctic-drilling ambitions. The same question stands for new oil sands projects. According to Carbon Tracker, the roughly $400 billion committed to Alberta oil sands projects between now and 2025 represent more than a third of high-risk projects expected to become stranded assets in a 2-degree world.

Instead of spending capital on growth, cash flow from existing operations can be returned to shareholders in the form of share buybacks and increased dividends. “Those payouts are the channels through which oil and gas companies’ profits are recycled away from fossil-fuel production,” according to Chatham House’s July 2015 research paper “Oil and Gas Mismatches,” co-authored by Mitchell.

4) Consolidate where it makes sense, shed where it doesn’t. Chatham House says a period of adjustment is expected in the transition to a low-carbon economy in which financially strong companies acquire strong assets currently belonging to weaker companies. “High-cost and high-risk projects will be abandoned or deferred,” according to its report. “Companies whose existence relies on such projects will be taken over or broken up, and countries that depend on them for future development will have to revise their strategies.”

To a certain extent, low oil prices have already sparked some rationalizing of asset mix, but merger and acquisition activity is expected to heat up over the coming years as the big players seek lower-carbon assets that keep them in the game longer. Shell’s planned $70 billion takeover of BG Group, the world’s largest liquefied natural gas supplier, may be a sign of things to come.

That deal, if it goes through, will separate Shell from its more oil-oriented peers, BP, Chevron and ExxonMobil among them. In the meantime, emphasis will be put on operational efficiency that lowers product carbon intensity.

5) Seriously pursue diversification beyond fossil fuels. It’s the trillion-dollar question: Can big oil thrive as something other than big oil under a 2-degree climate scenario? Many in the environmental community argue these deep-pocketed giants should invest in more renewable energy as they wean off fossil fuels – the fast the better.

But it’s a daunting scenario, said RMI’s Kortenhorst, comparing it to an American football veteran being told he suddenly has to play professional soccer. “Yes, it has something to do with running around the field, but it’s dramatically different.”

Many already dabble in wind and solar. The biggest move to date came in 2011, when France’s Total SA purchased 60 per cent of SunPower, the second-largest solar panel maker in the United States. But holding and bankrolling a renewable asset and letting it operate independently is much easier than transforming core competencies, which is a rare feat for an incumbent with magnetic attraction to the status quo.
“History shows that energy companies are incapable of transitioning out of their core business into a new market,” said Jigar Shah, founder of solar developer SunEdison.

Solar development, for example, couldn’t be more different than oil development, which is grounded in geology and mining. One deals with electrons, one with molecules. One is decentralized and IT-driven, the other more centralized and mechanical. Development timelines for one can be measured in months, the other in years or decades.

Not that a business makeover can’t be done. After all, Kodak competitor Fujifilm spent the past decade successfully transforming itself from a struggling photo-film manufacturer into a pharmaceutical and cosmetics company now venturing into regenerative medicine.

Shah said if big oil is to make a play for renewables, it should be in areas that leverage its core competencies, such as drilling and engineering for geothermal power development, or which better complement its existing fuel business, such as biofuels or hydrogen.

But even there, points out Chatham House, the potential pitfalls are many. “Experience of the 1980s shows that further diversifying into what are, in effect, other industries is risky both for a company’s management and for its shareholders.”

So what’s a big oil company to do to avoid the Kodak moment? Ultimately it’s up to its investors, which can ignore the issue in the short term and postpone the pain, or pressure the company to come up with a game plan designed to protect owner interests in the long term – and execute on it. “It’s a risk management situation,” said Fulton. “Simply put, they need to manage that risk.”

What’s almost certain is that 50 years from now the giants of today’s petroleum industry will look substantially different from the way they look today, if they exist at all. “They will have nowhere to hide,” John Ashton wrote in his fiery open letter to Shell. “The low-carbon economy is starting to take shape, and it works.”

The post Can big oil transition to a low-carbon economy? appeared first on Corporate Knights.

In Sweden’s Lule River Valley, a venture called Treehotel offers rooms that are suspended up to six metres from the ground within a tall pine forest, while Tubohotel in Tepoztlán, Mexico, uses massive recycled concrete pipes as the housing for its 20 rooms, stacked in pyramids of three.

These are all neat ideas – and great for eco-tourist types, the ones who research their destinations and seek out places that will connect them with nature and ease the guilt of consumerism in overdrive, otherwise known as the world in which we live.

More important than these boutique hotels, however, is how more mainstream options for travel accommodations are embracing the sustainability imperative, either because they recognize efficiency equals cost savings or that more of their customers are demanding it – or both.

“Over the last few years some hotels and many of the biggest hotel chains are trying to distinguish themselves as environmental-friendly players within the tourism sector,” wrote Tiago Diniz, a graduate student at the University of Edinburgh Business School in a 2012 study.

Diniz found in a survey that – price and service being nearly equal – virtually all customers would prefer a “green” hotel, and half described it as important to them. Probed further, only a “residual part of respondents” have actually sought out or stayed at a green hotel, but the overarching trend is clear. Customers, argued Diniz, “expect the hotel industry in general to have embedded tools such as waste recycling, water and energy saving systems or the reuse of towels.”

Indeed, other studies support this. According to the 2012 Canadian Travel Intentions Survey, 42 per cent of business travelers who took part said evidence of energy efficiency or recycling influences where they choose to stay. That figure was up significantly from just five per cent the previous year.

The Hotel Association of Canada’s 2014 Travel Intentions Survey found that 44 per cent of Canadian business travelers felt eco-certification of hotels was important, up from 18 per cent in 2013.

The rise and measurable benefits of Leadership in Energy and Environmental Design (LEED) certification for hotel buildings suggests the hospitality industry is beginning to take consumer expectations seriously. The certification is an independent, third party verification that the hotel or motel achieves high performance when it comes to energy and water use, indoor environmental quality, and materials selected during construction.

Of note is that Canadian hotels appear to significantly lag their America cousins when it comes to LEED certification. According to the U.S. Green Building Council (USGBC), there were only six certified hotels in Canada as of June 2015, compared to 212 in the United States.

Use of LEED by hotels is fairly new, but enough U.S. hotels have been certified to give an early sense of whether it makes both environmental and economic sense. A 2014 study out of Cornell University’s School of Hotel Administration compared the financial performance of 93 LEED-certified hotels with 514 non-certified competitors. “Certified hotels obtained superior financial performance,” concluded the study.

The revenue boost could be seen across all hotel types, though the researchers conceded that most of the hotels in their study were upscale or luxury properties in urban or suburban settings. “This makes sense, because many of the LEED standards involve a hotel’s connection to public transit or other resources typical of urban areas,” said study co-author Rohit Verma.

But even within particular locations, there can be huge differentiation between properties, according to another piece of Cornell research, which looked at monthly utility usage of more than 2,000 hotels across 30 geographic areas and analyzed them based on six energy and carbon key performance indicators.

“For hotels with similar attributes and in the same city, energy per square meter can vary by more than a factor of five,” wrote researchers Howard Chong and Eric Ricaurte in their 2014 hotel sustainability benchmarking study.

LEED and beyond

Evidence of the LEED impact will become clearer as more hotels embrace the standard. The Marriott chain and Starwood Hotels and Resorts’ Element brand, for example, have both made LEED standards mandatory for all new construction, and they’re not the only major chains to do so.

Of course, LEED isn’t the only eco-rating in town either, and many hotels are at least attempting to go above and beyond. Back to Marriott: it has pledged to lower its energy and water consumption by 20 per cent by 2020. On top of that, it uses its influence in the industry to not just educate guests, but also to nudge hotel developers to build sustainability into projects from the start.

Starwood, whose global headquarters has earned the highest LEED certification, has a similar water-reduction target, and aims to cut carbon emissions by 30 per cent in all of its properties globally within the next five years.

Others are participating in specific initiatives or partnerships that help give them green bragging rights. More hotels are retrofitting to LED lighting, using eco-friendly cleaning products, purchasing biodegradable toiletries, and sourcing sustainable seafood and organic fruits and vegetables.

W Hotels Worldwide, a part of Starwood, recently announced a partnership with music artist will.i.am and Coca Cola that will see bed sheets made of recycled plastic used in rooms across the chain, starting in North America. Each king size sheet contains the equivalent of 31 recycled 20 oz. plastic bottles. Applied to all beds at U.S. locations alone, that works out to 268,000 plastic bottles.

To draw attention to these efforts, many hotels are becoming members of Ottawa-headquartered Green Key Global, an eco-labeling initiative based on a self-auditing system and random verification. Through its eco-rating program, hotels can earn up to five “green keys.”

The more keys held the higher the rated environmental performance, with each key “unlocking” guidance on how to obtain another key. Nearly 2,000 hotels now participate in the program, slightly more than half from Canada.

“The industry is embracing sustainable initiatives on multiple levels,” managing director Tony Pollard stated earlier this year. Green Key Global is now working with the United Nations Environment Programme to get a better sense of what kind of sustainability information corporate travel agents and meeting planners are requesting from hotels.

The motivation to engage in eco-initiatives and eco-labeling programs may, in part, be coming from the business world’s desire for “green meeting” places. Research shows that a growing number of corporate meeting planners are demanding that hotels used for conferences and business gathering meet minimum environmental standards.

That’s where performance diverges from goals. Marriott and Starwood are making some gains and big commitments on the ambition front, but of nine major hotel chains that ranked on Newsweek’s “America’s Greenest Companies 2015” list, both hotel brands were in the bottom half of the pack (keeping in mind that many hospitality companies didn’t even make the list).

The list, a ranking of 500 publicly traded U.S. corporations developed in partnership with Corporate Knights Capital, assesses companies based on eight key performance sustainability indicators, including waste generation, water use, energy consumption and emissions.

Las Vegas Sands, ranking 60 out of 500, was the highest-scoring company in the hospitality category, followed by Wynn Resorts (100), MGM Resorts International (112) and Wyndham Worldwide (114). (See chart for all hotel companies and their rank)

Las Vegas Sands has taken on some unique challenges. Its Sands Bethlehem property in Pennsylvania, opened in 2009, was built atop the largest brownfield site in the United States and home to the former Bethlehem Steel plant. The company helped the community restore the area, including cleaning up an adjacent river and nearby neighbourhoods with the help of volunteers.

Others at the top of the list have pursued renewable energy, energy-efficiency projects, and worked to recycle toiletries so they can be sent to developing countries. Last year, MGM finished installation of a massive five-megawatt rooftop solar PV system at its Mandalay Bay Resort and Casino in Las Vegas. Wyndham has already reduced energy use at its North American properties by 12 per cent since joining the U.S. Department of Energy’s Better Buildings Challenge, launched in 2011.

The power of sharing

Hotels will be motivated to push harder on sustainability as competition with home sharing services intensifies. Airbnb, for example, argues that staying at a stranger’s home when on a trip is greener than going to a hotel. (As an aside, one guy even threw a mattress in the back of his Tesla Model S and listed it as a “private room” for $85 a night, though it turned out to be a hoax).

The basis of this claim is a 2014 study commissioned from the Cleantech Group consultancy, which analyzed over 8,000 survey responses from hosts and guests across Airbnb’s global network. It then compared those responses with traveler statistics gathered on hotels, and to be fair, it only used hotels that performed in the top 5th percentile with respect to energy use.

The resulting report found that by using existing resources – that is, someone else’s paid-for, fully-equipped home – Airbnb users simply tend to consume lower amounts of water and energy and generate less waste. Is this out of respect for the host? One can only speculate.

“In North America alone, Airbnb guests used 63 per cent less energy than hotel guests,” said Airbnb’s chief product officer when the study was released. “That’s enough energy to power 19,000 homes for one year.”
Among Airbnb’s other North America claims:

• In a year, Airbnb guests saved the equivalent of 270 Olympic-sized pools of water compared to the hotel benchmark;

• Nearly 83 per cent of Airbnb hosts reported owning at least one energy efficient appliance;

• Less than half of hosts provide single-use toiletry products for their guests, which reduces waste generated;

• When staying with an Airbnb host, guests are up to 15 per cent more likely to use public transit, walk, or cycle as their primary way of getting around than if they had stayed at a hotel.

Airbnb acknowledged that its service might encourage people to travel more and stay away longer on trips, but argued that any increased environmental impact from this was offset by the benefits of home sharing.

It’s tough to know for sure if there’s substance to these claims. The study was not scientifically rigorous and was based on many assumptions. However, one could make the argument that an online service such as Airbnb – having booked 40 million guests in 34,000 cities to date – has more capacity to influence green behaviour, and therefore outcomes. That influence is expected to extend into the corporate world with a program for business travelers launched in July that has signed up about 1,000 companies.

As a single point of contact for millions of hosts and travelers, Airbnb can easily reach out to that community – whether it’s to educate, nudge or incent more sustainable behaviour. Such a powerful constituency can be harnessed to influence public policy and draw wider public awareness to environmental issues like climate change, as demonstrated by its “Make Every Day Earth Day” campaign.

Last September, Airbnb teamed up with Nest and began offering free smart thermostats and energy monitoring services to select hosts in its network. “Airbnb wants to help hosts on their quest to be green,” said head of business development Lex Bayer when the partnership was announced.

As part of a similarly structured deal announced in August, Tesla will supply discounted charging stations to certain Airbnb hosts as a way to accommodate Model S owners who may need an overnight charge-up.

These are opportunities for Airbnb to green its brand, but also to experiment with ways to spread sustainable technologies and ideas throughout its community. That it recently hired Democratic political strategist Chris Lehane as head of its global policy and public affairs team is a sign of where it might take those experiments.

Lehane is former press secretary to U.S. vice-president Al Gore, the Nobel-winning climate activist, and most recently has been leading California billionaire Tom Steyer’s climate action and anti-Keystone XL campaigns.

It was a key hire, and given Lehane’s background on climate advocacy, it could lead to a bigger sustainability push for Airbnb as the company learns to better harness the influence of its broad and deep sharing community.

The post Hotels, Airbnb battle for green cred appeared first on Corporate Knights.

Walk to an urban dog park and it’s a different story. If you’re not stepping on a pile of poop, you’re likely picking a load of it up with a vanilla-scented plastic bag that’s typically tossed into the nearest (usually overflowing) garbage can.

Make no mistake – dogs love unconditionally and make their owners happier citizens. The problem is, they poop. According to a recent report in The Economist, the average dog is responsible for twice the amount of feces a human produces. This works out to about 275 pounds a year, per dog. If you’re a city like New York, with over 600,000 pooches, that’s some serious crap – about 100,000 tons a year.

Ron Gonen, NYC’s former recycling boss, sees opportunity in those droppings. He has created a program called Sparky Power, which aims to use small anaerobic digesters at dog parks to turn poop into methane, which can be used as fuel to power city park equipment.

City staff are weighing Gonen’s proposal for a pilot project. Similar projects have been proposed in Boston, at Arizona State University and in a handful of Australian and U.K. municipalities.

In most cases, officials have poo-pooped the idea.

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A new mobile app developed by Social Change Rewards, with funding support from the B.C. and federal governments, uses the lure of points to encourage Canadians to participate in healthier lifestyles. Points can be earned by letting the app nudge you in the right direction, whether that means reminding you to go to the gym for a workout or alerting you to a healthy recipe worth trying. You can also earn points by taking quizzes or reading articles, making this app – appropriately called Carrot Rewards – a powerful educational tool.

https://vimeo.com/134447349

Pretty much anything a user does with this app will earn points, which can be redeemed for groceries, travel, movies or merchandise at specific retailers.

Andreas Souvaliotis, co-founder and chief executive officer of Social Change Rewards, has a wealth of experience linking rewards programs to positive behaviour. In 2007 he created the niche loyalty program Green Rewards. This was purchased a year later by Air Miles owner LoyaltyOne and turned into Air Miles for Social Change, which used points to encourage energy conservation, transit use and the purchase of healthier foods.

The difference with Carrot Rewards is that it’s a publicly funded initiative, and the first of its kind. In addition to the federal and B.C. governments, partners include YMCA Canada, the Heart and Stroke Foundation, and the Canadian Diabetes Association.

“This new platform is a game changer for health promotion,” said David Sculthorpe, CEO of the Heart and Stroke Foundation. “It will have a tangible impact on the health of Canadians, and aligns with our mission to prevent disease, save lives and promote recovery.”

The app will be available for download in British Columbia this fall, followed by a Canada-wide release in early 2016.

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Not Faiola. He’s one of a handful of people in Canada who has installed a wireless EV charging system called Plugless, developed by Richmond, Virginia-based Evatran Group. The system just sits on the floor of Faiola’s garage. All he has to do is drive over it with the help of a wall-based unit that uses light signals to guide him in like an airplane on a runway.

Once the vehicle is properly positioned, magnetic fields are used to transfer energy across several inches of air from the floor pad to a receiving coil attached to the bottom of the car. It’s the future of EV charging, says Faiola, who as an employee of Autochargers.ca of Vaughan, Ontario, is on the front lines of EV innovation.

“It’s been working really great,” he says. “I think this is one of those technologies that are here to stay.”

Here to stay, maybe, but not made here – not in Ontario, the country’s automotive manufacturing heartland. There are no established manufacturers of EV charging stations in Ontario. There is no final assembly of plug-in electric vehicles happening in the province. There is no apparent vision or strategy aimed at positioning Canada’s largest economy as a hub of electric vehicle innovation or manufacturing.

This has observers like Faiola worried.

“There’s a lack of leadership in Ontario,” he laments, pointing blame not just at government, but all industry stakeholders – universities, auto companies, auto industry suppliers and others. “Our efforts are not collective. The stakeholders need to gather around a table and come up with a plan together.”

Missed opportunity?

Nearly seven years ago, it looked like that leadership was emerging. On January 15, 2009, then-Ontario Premier Dalton McGuinty stood at a podium beside a shiny new Renault electric car and announced a partnership with Better Place, a well-funded California startup run by entrepreneur Shai Agassi. Better Place aimed to establish a global network of battery-swapping and charging stations for electric cars, and McGuinty wanted Ontario to be an early member of that network.

“One of the most important things we can do is demonstrate we are truly an electric-car friendly jurisdiction,” McGuinty said as a dozen or so black-suited government officials applauded in gushing support. It was mostly a symbolic announcement – a chance for McGuinty to signal Ontario’s intentions without actually putting flesh in the game. No major investment was made, beyond soft commitments for education and demonstration projects.

Still, it was trumpeted as a serious first step. Agassi praised Ontario for “taking a system-wide approach to retooling its economy,” and touted it as a stimulus needed for job creation and economic growth.

Six months later, it seemed McGuinty was intent on following through. He announced his government’s aim of having one of every 20 vehicles driven in Ontario be electrically powered (hybrids, plug-in hybrids and all-electrics) by 2020. He made up to $10,000 in rebates available to purchasers of plug-in vehicles, and gave drivers of such vehicles special privileges, such as open access to high-occupancy vehicle (HOV) lanes and free use of public EV charging facilities.

“Electric vehicles are the way to go in Ontario,” McGuinty said. “This plan helps get more people behind the wheel of a green vehicle to create jobs, reduce smog and equip Ontario for the 21st century.”

Fast-forward to 2015 and the results have been mixed – and mostly underwhelming.

No question, sales of hybrids have grown, as have consumer purchases of plug-in vehicles. As of June 2015, there were about 4,500 plug-in electric vehicles registered to drive Ontario roads, compared to just a few dozen back in 2009, and annual sales continue to rise.

But plug-in vehicles only represent .05 per cent of car sales. To reach McGuinty’s 2020 goal, an estimated 360,000 of these electrically powered vehicles need to be registered in Ontario within five years, representing a 80-fold increase from today’s level. Even factoring Prius-style hybrids into that number, it’s an ambitious – if not impossible – goal.

Calling impact and efforts to date “very modest,” Ontario’s Environmental Commissioner recently urged the province to up its game if it hopes to achieve its GHG emission reduction target. The commission’s 2015 greenhouse gas progress report said electric vehicles have the potential to greatly reduce emissions in the transportation sector, which is currently the largest contributor of GHGs in the province at 34 per cent.

A May 2015 study from Plug’n Drive, a non-profit electric car advocacy organization, estimates that Ontario drivers that switch from a conventional gas-powered vehicle to an electric car can reduce emissions by between 67 and 95 per cent because of the low-carbon, coal-free profile of the province’s electricity system.

“If Ontario were to achieve a 25 per cent increase in EV sales to 2020, the province would have more than 100,000 EVs on the road by 2050, reducing Ontario’s GHG emissions by as much as 9.19 megatonnes, or 6.5 per cent of Ontario’s total reduction target for 2050,” the report says.

Raise that annual sales growth to 50 per cent and nearly 400,000 EVs would be on the roads by 2050, quadrupling the GHG reduction impact.

Bigger problems

Slower-than-expected adoption of electric vehicles in Ontario is one concern, but the inability of the province to capture the economic upside of electric vehicle growth is potentially more serious over the long term. If electrification of transportation is a lasting trend, and most observers say it is, then becoming an R&D and manufacturing hub for battery-powered cars would seem an obvious job-creating destination for Ontario’s auto sector.

“Ontario is ideally positioned to be a leader in EV manufacturing, research and development,” according to a recent study from the non-profit Windfall Centre, which calls on the province to exploit its strengths and carve out an EV manufacturing node that will shore up its sagging auto sector. “Missing the manufacturing opportunities presented by a transformative shift to low carbon vehicles would have dire economic consequences for Ontario’s labour market.”

Hopes were high in August 2011 when McGuinty announced Toyota’s plans to manufacture its Toyota RAV4 EV at its Woodstock plant “because of the province’s commitment to electric vehicles.” McGuinty declared Ontario’s auto industry “back on track.”

But Toyota discontinued production of the RAV4 EV in September 2014, and now seems focused on producing its Mirai fuel cell vehicle. There’s no indication the Mirai, a risky bet for Toyota, will be manufactured in Ontario. Beyond the Cambridge-made Lexus RX 450h hybrid, there are no electric-powered passenger vehicles produced in Ontario or appearing in the manufacturing pipeline. As for Better Place, it went bankrupt in 2013 and never really did much in the province after its high-profile PR stunt in 2009.

So what’s next? What card does Ontario hold up its sleeve? Is there a card even stuffed up there?

“If you’re talking about a government strategy, there’s really been no strategy from the Ontario government,” says Kumar Saha, a Toronto-based automotive analyst with global research firm Frost & Sullivan. “It’s been piecemeal. Just throwing money here and there.”

It may be troubling for some, but Ontario’s auto sector has bigger problems, Saha adds. The province was once a powerhouse of the auto industry, but for more than a decade it has struggled to stay competitive. Manufacturing continues to migrate to countries, such as Mexico, where labour costs are lower and production overall is cheaper.

According to Plug’n Drive, GDP from Ontario’s auto sector fell by about 14 per cent from 2002 to 2012. A year after the 2008 financial crisis, sector output plunged by a third, and while it has recovered slightly the long-term outlook is bleak. The focus today isn’t so much on growth as it is on stopping the bleeding.

“Forget electric vehicles. We’re not able to keep or attract manufacturing for regular cars,” says Saha. “EVs are not even on the radar, really.”

Saha says the reason companies like Ford and Toyota initially set up manufacturing in Ontario was because of demand for the vehicles in Ontario and across Canada. That local footprint, along with a cheap Canadian dollar, the Auto Pact and later NAFTA, created a strong business case. On the other hand, with local demand for EVs currently so small and the unlikelihood of being able to export Ontario-made EVs to the United States, the business case doesn’t exist.

Instead, GM is making the Chevy Volt in Michigan, along with its batteries and battery packs. Ford’s Focus Electric is being made there, too. The Nissan Leaf is made in Japan and now supplies U.S. demand from a plant in Tennessee. Tesla builds its cars in California. The Smart Fortwo Electric is made in France, the BMW i3 is made in Germany, and the Kia Soul Electric comes from South Korea. Canada, without its own original equipment manufacturers (OEMs), is at a significant disadvantage. Even a homegrown autoparts giant like Magna International does the bulk of its electric vehicle R&D in the U.S. and elsewhere.

It’s still early days. As EV sales pick up in Ontario and neighbouring jurisdictions, there’s always a chance the province will lure some EV manufacturing, but it’s a slim one, says Saha. “I wouldn’t go so far as to say Ontario auto production is at the Kodak moment, but we’re close,” he says.

The challenge, he explains, is one of optics. The province hasn’t consistently shown a commitment to build demand for electric vehicles. Beyond incentives for consumers, there’s been no broad strategy aimed at positioning Ontario as an EV manufacturing and R&D hub – the kind that has sprouted in Silicon Valley, thanks to a bold gamble by Elon Musk.

“There hasn’t been a demonstration from the Ontario government that they’re willing to go the extra mile,” adds Saha, pointing to a perception that has since taken hold. “We are not as uncompetitive as people make us out to be, but once that becomes part of the conversation people stop listening. The result is that Canada just isn’t part of that conversation for building electric vehicles.”

A window closing

Brad Duguid, Ontario’s minister of economic development, paints a different picture. Unavailable for an interview, he agreed to answer questions from Corporate Knights by e-mail. In his response, he pointed to how EV consumer rebates have made Ontario a leading jurisdiction in Canada for adoption of plug-in vehicles.

He made reference to the now-cancelled RAV4 EV and the Lexus RX450h being produced in the province. He also cited the $16.7 million invested in lithium-ion battery developer Electrovaya and $2 million put into Dana Holding of Ohio to develop battery-cooling systems for hybrid and electric vehicles at its facilities in Oakville and Cambridge.

It’s something, but not much – and industry observers say it’s not nearly enough, or going to the right places. Lithium-ion battery maker Electrovaya, for example, has been accepting handouts from Ontario and the federal government for nearly a decade with little to show for it and no evidence of government follow-up.

“We will continue working with all our automotive partners to ensure Ontario is a leader in next generation production and that Ontario continues to produce electric vehicles,” Duguid wrote.

When asked if Ontario was missing out on the EV revolution, Duguid emphasized that the market was still emerging and that adoption of EVs worldwide – not just in Ontario – has been slower than expected.

Does the province have a comprehensive strategy, or is one in the works?

He didn’t answer directly. Instead, he made reference to the creation of a new subcommittee in June as part of a partnership between the federal government and the Canadian Automotive Partnership Council. The subcommittee is chaired by former Toyota Canada chairman Ray Tanguay, who Duguid described as “one of the industry’s strongest and most successful advocates.” Media refer to him as Canada’s new “car czar.”

Under Tanguay’s leadership, the subcommittee is supposed to figure out how to stop the industry’s bleeding and nurse it back to health. Duguid said that task includes promoting Ontario as a destination for producing next-generation vehicle technology, “including electric vehicles.”

Saha doubts Tanguay is even thinking about electric vehicles. “We’re in panic mode right now,” he says. “His job is to save what we’ve got.”

In this environment, some Ontario-based companies initially focused on the electric vehicle market have been forced to adapt. CrossChasm Technologies, an EV analytics and simulation company spun out of the University of Waterloo, has shifted its efforts to “connected cars” – that is, designing the software and services that allow vehicles to better communicate with charging stations, other cars, and their drivers. As the Internet of Things emerges, the idea is to increasingly make cars one of those things.

“My thought is that we have missed the manufacturing boat but that there is a better boat that’s about to leave port and we should try to be on it,” explains Matthew Stevens, chief executive of CrossChasm. “EVs, and cars in general, are in desperate need for better connectivity. So instead of being ‘Built-in-Ontario’, I think about EVs and other cars as being ‘Connected-By-Ontario’.”

Stevens admits that leadership on connected cars won’t lead to thousands of assembly line jobs, the kind that politicians like to announce from factory floors in front of reporters and TV cameras. The upside, he says, is that the jobs that are created – while fewer – will be high-paying, high-skilled jobs and the products created have huge export potential. Already, CrossChasm’s connected-car technology has been deployed in 23 countries.

Down, but not out

Josipa Petrunic, executive director of the e-mobility program at McMaster University’s Institute for Transportation and Logistics, is more optimistic. We’re losing what she calls the “assembly game,” yes, but Petrunic’s response: “Who cares?”

“I know that’s a brutal thing to say, but in a globalized world, the end point in the supply chain is the final assembly, and it’s the lowest value world. We’re essentially assembling Lego pieces,” she says.

In her view, instead of throwing bags of money at existing manufacturers to keep assembly-line jobs related to yesterday’s automotive technology, the Ontario government should focus less on the tail and more on the brains of the operation – that is, building innovation capacity for vehicle electrification. By demonstrating vision and leadership on innovation, jobs for assembly of next-generation vehicles are more likely to follow.

Sergio Marchionne, chief executive of Fiat Chrysler Automobiles, recently said Ontario should work to create a “mini Silicon Valley” for its auto sector. “Let the kids run,” he told the Globe and Mail in July. “Give them the toys and let them play.”

But on innovation, Petrunic disputes any notion that the province is falling behind – that the kids aren’t running. Key to her assessment is that Prius-like hybrid vehicles, such as the Ontario-made Lexus RX450h, not be distinguished from plug-in electric vehicles like the Volt or Leaf. They all share many of the same components: electric motors, power electronics, batteries, battery management systems, ultracapacitors and lightweight materials – all areas with room for massive improvement.

“It’s important to remember most Canadians’ first introduction to electric vehicles will be through a hybrid,” she says, explaining why downplaying Ontario’s role in manufacturing the Lexus hybrid would be a mistake. She points to the e-drive research that auto parts manufacturers such as Magna and Linamar are doing behind the scenes, and the fact that 22 universities across Canada – 10 of them in Ontario – are actively involved in electric transportation research. “It’s just not the case that Canadian companies are not active in this field.”

All of that said, Petrunic does feel that 2015 is a pivotal year for Ontario’s auto sector and that what happens over the next two years will make it or break it. To make it, she believes the following needs to happen:

• Map the ecosystem. Ontario’s economic development ministry needs to get a better handle on what the province’s auto-sector innovation ecosystem looks like, beyond the handful of companies that have received grants. Petrunic says there’s little information available about companies and organizations working on electric propulsion technologies. “Of those companies that do exist, there’s no coordination, no one-stop shop where they can go learn about each other or the industry,” she says.

• Promote industry cooperation and coordination to reduce market fragmentation. Establish an innovation centre, similar to Kingston’s GreenCentre Canada, which has become a successful hub of support for green chemistry breakthroughs across the country and helps university researchers and emerging companies commercialize their products and services. Petrunic has asked many startups what they most need to scale up their businesses. “Their response is an innovation centre, something that coordinates the brains of Ontario’s auto operations.”

• Better branding of Ontario. Compared to Michigan, which generates 65 per cent of its electricity with fossil fuels (mostly coal), Ontario’s electricity mix is much greener. About 90 per cent of electricity generated in 2014 came from emission-free sources, with the remaining 10 per cent from natural gas. If Ontario wants to make green cars, it should promote itself as one of the greener places to manufacture them. It should tout that its cars were made at coal-free factories.

• More support and investment in EV-friendly infrastructure. EV owners want confidence that they’ll have plenty of access to charging spots. The province’s local electric utilities have been eager to boost EV charging infrastructure as a source of future revenue, but negative regulatory decisions from the Ontario Energy Board created an industry chill that is just now beginning to thaw. Petrunic says Ontario’s energy ministry needs to get behind utilities by creating policies that allow for open-source smart charging networks to be developed across the province. Coordination of utilities is key, and it’s currently lacking. With it, a strong local market can develop to support local innovation.

“I actually find a lot of reasons to be excited, as we do punch above our weight right now,” says Petrunic, adding that the appointment of Tanguay as car czar makes sense, given Toyota’s leadership on hybrids and the insight he can provide on the technology pipeline.

On the need for better industry coordination, she’s hopeful but warns that time is running out. “I do believe by the end of the year we could have an automotive innovation centre announced. If no innovation centre opens up in 2017, I would say yes, Ontario is in trouble.”

Saha isn’t as hopeful, but says the government and industry in Ontario can clearly do better. “The government has to create a conversation about why Canada should be an auto making destination. That conversation has started a little bit, but it needs to ramp up.”

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