From energy expenditure to building materials, living in a smaller house is one of the best ways to reduce your ecological footprint. Giving up the luxury of space and living more minimally isn’t always easy, but it does come with a few perks: fewer possessions, bigger skies and open spaces! Plus, a smaller house makes it easier to cozy up to your loved ones. Here’s a reminder that bigger isn’t always better: 10 of the tiniest homes in the world.

Reduces your housing expenses too – giving you time, flexibility and further footprint reduction possibilities.

“The opportunity to make our planet smarter is both real and measurable on one hand, and truly inspiring on the other.” – Sam Palmisano, CEO, IBM, quoted by Lee Green, VP Innovation, IBM at Sustainable Brands, Monterey, California, June 2010

For us, this captures the Sustainable Brands 2010 conference in a nutshell: the sustainability efforts most likely to succeed are those that are both robust and data-driven on the one hand, and joyful, surprising, delightful and principles-driven on the other.

Sustainable Life Media and its flagship conference Sustainable Brands, founded by KoAnn Skrzyniarz in 2007, brings together the brand, design and sustainability communities to catalyze sustainable innovation.

SustainAbility has been a part of the Sustainable Brands community since its early days: executive director Mark Lee serves on the advisory board and has given plenary presentations at the event the last three years, and team members Chris Guenther and Preetum Shenoy have both participated in the conference. This year, Jennifer Biringer facilitated a panel organized by Patrin Watanatada on “Restoring ‘Places and Faces’ to the Global Value Chain”.

Below are the seven key themes we heard at this year’s conference. The first three are perennials – they are why so many of us believe strongly in the connection between sustainability and brands (see, for example, our Five Principles for Sustainable Brands) – while the last four are more recent insights, reflecting lessons learned by brands along the way.

1. What we value as a society is changing – and the brands that respond will be the brands that win.
2. Sustainability is (really) good for brands.
3. Brands are (really) good for sustainability.
4. Sustainable brands connect supply and demand in innovative ways.
5. Sustainable brands meet consumers where they are.
6. Sustainable brands “create the crowd.”
7. Sustainable brands rely on lots of data – but not too much.

Read on for more on each of these themes…

1. What we value as a society is changing – and the brands that respond will be the brands that win.

Success for global companies means responding nimbly to global megatrends and societal drivers. What market research and consumer insight experts are seeing now is a slow, but sure, shift in what consumers value.

Tom Forge of Coca-Cola said, “There are two big macro-forces now: environmental and social justice, and a better understanding of behavioral psychology. Yesterday’s brands were about quality and safety, today’s brands are about identity, and tomorrow’s brands will be about society.”

Asked Kirsi Sormunen of Nokia, “How are we still stuck in a mindset where more stuff equals more happiness? Businesses are scared of sustainable consumption because they see it as consuming less. Think of it as consuming smarter instead.”

For tomorrow’s brands, responding to what society wants and needs is now about creating value, rather than merely securing the license to operate. As Jason Saul of Mission Measurement sees it, “We are moving from a social contract to a social capital market.”

2. Sustainability is (really) good for brands.

Speakers from companies as different as Coca-Cola, Ford, IBM, Timberlandand Williams-Sonoma told stories of using sustainability to “redefine themselves for the future,” as Dorothy MacKenzie of brand strategy agencyDragon Rouge put it, explaining in her talk that “sustainability has become synonymous with modernity and quality.”

Timberland Chief Brand Officer Mike Harrison told the story of creating their highly successful Earthkeepers line of green boots and clothing, which he credits with helping Timberland return, profitably, to its roots: “We had allowed our brand to be defined by others, rather than being the authentic outdoor brand we’d always been.”

IBM’s Lee Green noted that their Smarter Planet campaign has been a key platform for IBM’s continuing strategic move away from commodity products towards services.

3. Brands are (really) good for sustainability.

Big multinationals may not be as nimble as social entrepreneurs, but what these companies have in earth-scale abundance is brand, deep insight into consumers and the power to shape our aspirations, values and behavior.

“Your brand is not just a passive observer – you have the opportunity to change these societal forces,” said Coca-Cola’s Tom Forge.* Bruce MacGregor of *IDEO suggested that brands can “create desires around points of pressure.” Marc Mathieu of BeDo, Eric Park of Ziba Design and John Creson of Addis Creson unveiled a project to explore how brands can “recapture the American Dream by out-storytelling and out-innovating those that continue to keep the old dream alive.” (See their presentation here.) **

4. Sustainable brands connect supply and demand in innovative ways – saving resources and creating story.

For us, the best stories were told by enterprises that connect the earth’s supply and society’s demands in unexpected and resourceful ways, tapping into assets hidden-in-plain-sight and, in doing so, creating powerful stories to engage consumers .

• Ford’s John Viera described how Ford uses waste streams from other industries to make seats and doors (saving Ford some $4.5 million). Brooke Betts Farrell’s start-up, RecycleMatch, aims to create an ecosystem of similar relationships via a website that matches “companies that have waste with companies that can use the materials productively.”
• Mike Yohay of San Francisco urban agriculture start-up Cityscape Farms(and one of our Restoring Faces and Places panelists) described his venture as “connecting unused rooftops and people who want local food,” while former Nike director Phil Berry connects brands with stories and rural communities with good local jobs through his consultancy Sustainable Product Works, which builds small-scale, green factories in rural areas of developing countries.
• In one of the most popular talks, mushroom guru Paul Stametsdemonstrated his Life Box – recycled cardboard shipping boxes studded with tree seeds that can be planted by the consumer, “creating forests for future generations” and connecting the companies who ship products in these boxes with their customers – and their customers with their future generations.

Several speakers advised taking the global ecosystem as business model inspiration, with Gregory Unruh of the Thunderbird School of Management and author of Earth, Inc. pronouncing the earth “our only true model of sustainable production,” Gil Friend of Natural Logic pointing out that nature represents “a million years of open-source R&D,” and designer Summer Rayne Oakesdescribing her textiles inspired by the steely strength of spider webs. (For more on this line of thinking, see the work of Janine Benyus’s Biomimicry Institute and Michael Braungart and William McDonough’s classic Cradle to Cradle: Remaking the Way We Make Things.)

5. Sustainable brands meet people where they are.

One of the biggest themes for the conference was this: how do companies engage the mainstream consumer on sustainability? As Yalmaz Siddiqui ofOffice Depot pointed out, “The biggest opportunity to move the needle is with the light- or mid-green consumers” – those who care about sustainability, but who also place a high premium on price and convenience. (See this report for more insight.)

How do you meet people where they are? Mike Harrison of Timberland put it memorably: “Think of sustainability as a ‘gift with purchase’.” As many speakers suggested, brands need to understand what consumers care about, make taking action fun and compelling, and make the next step clear.

• Speak to what consumers care about. For Starbucks, disposable cups might not be their most material issue from a life-cycle analysis perspective. But cups matter for Starbucks consumers – it’s their main touchpoint with the Starbucks brand. As Ben Packard of Starbucks noted, “Working on packaging gives us a license to storytell about the rest of our value chain.” (Starbucks is working with systems thinker Peter Senge in a series of Cup Summits com/2010/04/22/live-from-the-2010-cup-summit-jim-hanna/ to design a fully recyclable cup in collaboration with local municipalities and consumer behavior experts.) Travelocity’s Alison Presley described the intensive consumer insights work that went into developing their Green Hotels program, saying “We started with understanding our target customers and found ways to speak to them. We found that the number one search term was ‘green friendly hotel’, so we used the word ‘green’ even though we didn’t like it.“ John Marshall Roberts of Worldview Learning, who has conducted intensive research into psychological attitudes to sustainability, spoke compellingly on forming messages to match different audience attitudes and level of optimism. (See a 5-minute clip of John speaking on the psychology of sustainability here.)
• Make it fun and compelling. “Earnest messages like ‘Tread lightly’ didn’t work,” said Mike Harrison of Timberland, showing a clip from their new (and hilarious) “Nature Needs Heroes” campaign. Describing eBay’s campaign to encourage consumers to buy secondhand fashion, Amy Skoczlas Cole quipped,“Consumer benefits are the new guilt. Cool is the new green. Think trade-up, not trade-off.” Travelocity created a gnome as the mascot for their Travel for Good campaign, while Yahoo!’s Erin Carlson described how they learned after trial and error that the most popular ‘green’ article postings were either practical (“How to save money on your energy bill”) or surprising and delightful (“Read about polar bear babies!”).
• Make the next step clear. Customers overestimate the cost of a hybrid by $12,000 on average and assume they assume they can’t afford it, said Annie Longsworth of Cohn & Wolfe. So informing and persuading away customer fears is a crucial role for brands. A highlight of Cohn & Wolfe’s 2010 ImagePower Green Brands research was the emergence of enabling brands – in other words, “the ‘help me’ brands as well as the ‘in me, on me, around me’ brands” traditionally considered most green by consumers. John Viera described Ford’s sustainable mobility strategy as a journey: the first step is plugging hybrid engines into Ford’s existing mainstream, high-volume platforms, rather than creating a separate line.

6. Sustainable brands mobilize their customers, staff and business partners.

Peer pressure can be far more powerful than even the biggest global brand. AsIDEO’s Bruce MacGregor put it, sustainable brands “create the crowd” – whether it’s a crowd of consumers, employees, or business partners. Fittingly, the theme of the conference was “The Power of AND.”

• Build a “tribe” of sustainable consumers. Kirsi Sormunen of Nokia described their “Power of We” campaign, built on the idea that “the more than one billion people using our devices [can] connect and work together in different ways to protect the environment.” Patrick Glinski of Idea Couture said, “The individual consumer feels they are market takers, not market makers. We can fill this gap” by bringing consumers together to achieve a common goal – and this in turn reflects well on the brand that creates those experiences. Dara O’Rourke of GoodGuide advocated not only for “getting sustainability information to consumers at the decision point” but also helping it to spread through social networks.
• Business partners are crucial too. For eBay, one of the world’s largest aggregations of small and medium enterprises, their selling partners are at the heart of their strategy: creating a culture of re-use. Travelocityencourages all of its hotel partners to go green, as the more choice, the better.
• The power of your workforce is immense. “Greening your business is something you do with your people, not to them,” said Gil Friend of Natural Logic. Travelocity’s Alison Presley said, “We originally started with only PR and merchandising – but we soon realized we had to involve everybody. Our employees are our biggest assets.” Yalmaz Siddiqui of Office Depotagreed, saying that “we sell green via our employees.”

7. Sustainable brands rely on lots of data – but not too much.

Finally, a subtle but crucial theme was the importance of data and measurement. A good story isn’t enough – you need to get the performance right, and to do that you need good data. SAP, whose external sustainability reporting we consider groundbreaking, uses monthly internal reporting to make mid-course corrections and to encourage their business units to compete on environmental performance. Sustainable Product Works’ sustainable factories rely heavily on carefully chosen social and environmental metrics both to drive improved performance and to support the story that accompanies each factory.

Well. That is a good thing, is it not?

Remember what’s at the heart of our global environmental and social challenges:

1. Our key resources are too cheap – be they food, oil, money.
2. Our systems are too good at separating reward from risk – be it here and now, over time, through geographies.

Are there insights to be gleaned for other sectors from  how financial regulators conceptualize and try to manage these issues? The financial system represents our economy at its most abstract and quantified, so it’s fascinating to think about, anyhow.

Basel III raises the Tier 1 capital requirement, which means that banks will need to hold more common equity to buffer against unexpected losses, which essentially comes down to this: more skin in the game. And more protection against financial crises, and, apparently, good things for the economy (at least as measured through GDP – see explanation from finance blogger Felix “Shedding No Tiers” Salmon).

…sustainable consumption = shared consumption (Joel Makower, Collaborative Consumption, McKinsey Quarterly)

…“#Wherewereyou: WaPo puts the humble hashtag to work” – on journalism as curating, and the semantics of Twitter’s hashtag (Nieman Journalism Lab)

…(short) URLs are the new cookies: “whoever owns the shortener sees the engagement between the audience and the content, no matter where it happens” (O’Reilly Radar)

…is Google design overly data-driven? what about principles? (Co.Design)

…Tom Friedman on why the United States “is #1(1)” – its problems are incremental, American leaders don’t ask Americans to sacrifice, Americans don’t sacrifice on their own, and as for global leadership, “After you” (NYT)

…human beings were designed to pulse – sound tips from the Energy Project on how to get more done, be happier, and be better to your loved ones (openforum.com)

Photo: With colleague Jennifer Biringer, test-driving the Th!nk EV at Better Place’s Palo Alto headquarters back in June.

Many of us at SustainAbility have a big sustaina-crush on Better Place, the start-up working to build the infrastructure for electric vehicles—charging stations and battery packs—in cities around the world, and its founder Shai Agassi. (Our biggest Better Place fan, Gary Kendall, has contributed to their blog here and here, and the urgent need to transition our systems away from oil is a recurring theme for our team—see most recently Jeff Erikson’s blog on the BP Deepwater Horizon spill.)

But what’s a crush without a little analysis? Here are seven reasons why we think Better Place is one of the best examples of a 21st century enterprise out there.

1. Better Place started with an urgent social need, is moving rapidly to bring a solution to market, and is doing so by prototyping around the world. First, Agassi started with a Big Hairy Audacious Goal for his country: no less than independence from oil.

Says Better Place Australia CEO Evan Thornley in an interview on CNET’s CarTech blog: “[When Shai Agassi was coming up with his initial white paper] he went through the stages of ‘how can we run a country without being dependent on oil?’… We’re a mission-driven organization; we want to get the world off oil. There’s nothing good about it: fighting over it, paying for it, running out of it, or polluting the atmosphere with it.”

And Better Place is not wasting any time, as Cisco strategy EVP Inder Sidhu writes in a nice excerpt from his strategy book Doing Both, which argues that pursuing two seemingly disparate paths at once is often mutually reinforcing:

Agassi hopes to move quickly—before the next wave of first-time car buyers choose gas- or diesel- powered vehicles… Over the next five years, Chinese and Indian consumers are projected to buy as many as 70 million vehicles—more than all of the cars that exist in the UK and Germany today.

Most technology startups set out to build advanced products for sophisticated customers in established countries… Afterwards, they typically water down their innovations for sale to customers in emerging countries. Agassi has dispensed with this model and is instead focused on building simple solutions that can be deployed anywhere around the world simultaneously.

2. Better Place is thinking service, not product. Why are service-based business models often a better bet from a sustainability perspective?

Service-based models incentivize manufacturers to make assets that last and to take end-of-life responsibility (think Xerox copiers). They allow many more people to get use out of the same amount of physical assets (think laundromats, or car sharing services like Zipcar, and see Rachel Botsman and Roo Rogers’s Collaborative Consumption website and book for more examples). And they start with the human need and ask, “How can we best meet this?”

Agassi understands that people fundamentally seek the service of convenient mobility. This insight means that his business model is designed around meeting that need for mobility as effectively as possible, rather than making the current model (liquid-fuelled cars) somewhat better.

For transportation, says Agassi in an interview, what matters is miles:

Oil companies sell miles…at the end of the day [not gasoline]. [Better Place is like] an oil company that has a guaranteed supply of oil at a cost of zero dollars a barrel… I don’t sell the energy—the battery makers do that. I sell the convenience. (Interview by Martin LaMonica, CNET)

And access to a service is often a much better model for the customer than owning the asset itself, say Better Place’s Evan Thornley and Guy Pross in another interview:

Separating the battery from the car is a key to our business. It not only takes that battery [technology] risk from you, but also saves you from purchasing the battery up front, which is a huge part of the cost of hybrid and electric vehicles. (Interview by Derek Fung, CNET)

3. Better Place is harnessing the power of intelligent networks. These days, it seems to be all about data to make systems from transportation to food to supply chains to healthcare more intelligent, environmentally sustainable, and socially inclusive. IT companies from IBM (Smarter Planet) to Vodafone (mHealth) are making data for transparency and access to services and information the cornerstone of their sustainability strategies.

For Better Place, all plug-in points will be on a smart grid, as my colleague Jennifer Biringer and I learned back in June when we headed down the Peninsula to check out one of Better Place’s electric vehicle test drives. This layer of intelligence leads to efficiencies and even to cheaper car insurance, says Better Place’s Evan Thornley in his CNET interview:

[We won’t fill] a million batteries at 3 p.m. on a 40-degree [Celsius] day when the grid is already at peak load. We’ll actually help the grid out by taking some of the charge out of those batteries and helping load balance the grid, and put the charge back in at 3 a.m. the following morning when the wind farms are spinning and there’s no one taking the electricity.

It’ll also make our cars cheaper to insure, because if anyone tries to steal it, we’ll shut it off the network… [Or] your insurance company can offer you a 25 percent discount, because you’re someone who actually doesn’t speed, instead of being just someone who doesn’t get caught speeding.

4. Better Place is building an ecosystem of partnerships… Changing an entire system takes many players. Better Place has built this into their business model from the get-go, partnering with governments (Israel, Australia, Denmark, San Francisco…), utilities (Hawaiian Electric Company, Danish light rail company DSB…), and vehicle makers and owners (Renault Nissan, China’s Chery Automobile, Japan’s Nihon Kotsu taxi operator).

5. …and orchestrating the necessary—and pre-competitive—international standards. Though standards can get ignored amidst more glamorous talk of collaboration and innovation, “standards are crucial for innovation and action,” notes the UK’s standards body BSI (PDF). And action at global scale requires common, non-proprietary global standards.

“We are strong believers in standardization, we are strong believers in openness,” says Agassi in an International Electrotechnical Commission interview. “A car needs to be able to plug in in Copenhagen and drive down to Rome and be able to charge and switch along the way… Nobody wants to buy a product that will not end up being a standard… If we argue, if we have competing standards, if we have competing ideas, the market will basically sit on the sideline until everybody agrees.”

6. Better Place is meeting mainstream consumers where they are. Of course, it’s not enough to get the supply side right. Getting mainstream consumers to adopt a new product or service—and to change behavior—is often the greatest hurdle for business innovators. As Agassi admitted in his CNET interview, “The last thing that remains that nobody knows is scale and the X factor: consumer fear versus consumer green.”

One solution? Besides building great infrastructure, soothe consumer fears through great branding. Think back a century to the early days of the London Underground, perhaps one of the world’s first examples of branding for behavior change: the Tube’s iconic map, careful signage, brightly lit stations and witty posters were all developed to increase passenger numbers on what must have been a rather scary mode of transport.*

As Fast Company’s Alissa Walker writes in an excellent piece on their branding strategy, developed by Berkeley, California-based firm Addis Creson and PR company Hill & Knowlton:

[One challenge] was the importance of communicating that the concept was not so far-flung that it seemed unreasonable or unattainable for potential consumers. “It’s not like a flying car,” says [Addis Creson’s John] Creson. “We already have these things in place…” So especially in the renderings, elements like the switch station robotic arm, which can swap out batteries so people don’t have to wait at charging stations, had to be shown as a realistic, everyday object—as usual as a gas station.

*For more on branding and cleantech, see last year’s short report on the value of strong brand positioning and communications for cleantech companies by Chris Sherwin and Dorothy Mackenzie of global brand strategy agency (and occasional SustainAbility collaborator) Dragon Rouge.

7. Better Place is “building the tribe”—both online and in real life. Marketers have always relied on word-of-mouth, but with the rise of online social networking technologies “creating the crowd” (as IDEO’s Bruce Macgregor puts it) has never been technically easier or more important. The power of social networks to drive social change is even starting to get attention in US and UK public policy circles. Writes Fast Company on Better Place’s social media efforts:

“How do we keep [communities that might not see a Better Place for five years or more] excited and interested?” …To keep this momentum going, Better Place allowed people to create “minifestos,” short videos that would allow others to engage with their story, making them ambassadors for the cause and creating more social dialogue that could be spread virally.

And Cisco’s Sidhu adds that they’re building the momentum offline as well, spurring “the creation of electric car enthusiasts groups in Eastern Europe, South America, India and Africa, too. “

Seven reasons we believe Better Place will succeed, and seven reasons why it’s a great business model for the coming century.

I still believe that the diversion of ever wider tracts of arable land from feeding people to feeding livestock is iniquitous and grotesque. So does the book I’m about to discuss. I no longer believe that the only ethical response is to stop eating meat…

[Current] idiocies [such as feeding grain to livestock], Fairlie shows, are not arguments against all meat eating, but arguments against the current farming model.

Fairlie makes a bunch of points (or, as Monbiot says, “butchers a herd of sacred cows”):

1. We’re using the wrong comparison to judge the efficiency of meat production. We should be looking not at the conversion rate of feed into meat, but on the amount of land required to grow meat, with the amount of land needed to grow plants of the same nutritional value to humans.
2. Meat becomes an efficient means of food production if livestock are fed with food for which humans don’t compete – residues and waste for pigs, straw and grass from fallows and rangelands for cows. (Second-generation biofuels, anyone?)
3. The commonly quoted claim that “it requires 100,000 litres of water to produce every kilogram of beef… is wrong by around three orders of magnitude. It arose from the absurd assumption that every drop of water that falls on a pasture disappears into the animals that graze it, never to re-emerge.”
4. Farmed animals produce about 10% of the world’s GHG emissions – not 18% or more than transport, as the FAO claimed based on such faulty assumptions as saying that “all deforestation that culminates in cattle ranching in the Amazon to cattle: in reality it is mostly driven by land speculation and logging,” confusing “one-off emissions from deforestation with ongoing pollution” as well as gross and net production of methane and nitrous oxide.
5. Many vegetable oils have a bigger footprint than animal fats.

Monbiot concludes by saying that those who advocate for veganism for environmental reasons are better off campaigning for meat, milk and egg-producing systems that are “low energy, low waste, just, diverse, small-scale” (and, still, eating much less of it than we do).

Important reading, not just for the arguments (and note, I am not saying anything here about veganism as an animal rights choice, which I respect greatly) but as a larger reminder of the thin ice that many of our assumptions skate on, and the dangers of relying too much on data rather than principles to tell us where to go next in this complex world. It makes me think of Michael Pollan’s response to the endless debates over which nutrients and how much in what proportion from where: “Eat food. Not too much. Mostly plants.”

Eat vegan if you believe it’s simply wrong to eat meat, otherwise go “low energy, low waste, just, diverse, small-scale” – which, come to think of it, is a set of principles that makes sense for all forms of production.

The strikes, stoppages and suicides that have afflicted foreign factories on China’s coast in recent months have shaken the popular image of the country’s workers as docile, diligent and dirt cheap. … As pay goes up the country’s domestic market will become more lucrative. Foreign firms that came for the workers will stay for the shoppers. China will become more of a workshop for itself and less of one for the world.

There’s been much in the news this year about how Chinese labor costs are rising, but for me this was a good reminder that “labor costs” – even those located in some far-off land – are also people with aspirations and needs.

I happened to read it around the same time as Bob Herbert’s NYT op-ed on how “the carnage that occurred in the workplace [during the recession] was out of proportion to the economic hit that corporations were taking.” How’s this for striking:

At the end of the fourth quarter in 2008, you see corporate profits begin to really take off, and they grow by the time you get to the first quarter of 2010 by $572 billion. And over that same time period, wage and salary payments go down by $122 billion. That kind of disconnect, said [economics professor Andrew] Sum, had never been seen before in all the decades since World War II… In short, the corporations are making out like bandits. Now they’re sitting on mountains of cash and they still are not interested in hiring to any significant degree, or strengthening workers’ paychecks.

Obviously, this is what happens when you think about workers simply as “variable expenses.” I am trying to be a nuanced thinker, but sometimes you just have to get mad.