This week’s Green Scene column in Crain’s Chicago Business: Alliance aims to connect entrepreneurs, advance the green cause

Peter Nicholson started Green Drinks in Chicago in 2003 as a way for anyone interested in sustainability issues to network and learn about green business and environmental issues.

From those humble beginnings, Nicholson launched Foresight Design Initiative, an organization that offers workshops for careers in the green economy and consulting for green transformation design. The green business piece of the non-profit is the Foresight Sustainable Business Alliance, formerly known as the Chicago Sustainable Business Alliance. That arm provides sustainability expertise to businesses on a variety of topics. The alliance is about to expand beyond its initial goals of networking and education.

Nicholson, who has a background in design and music, lived in the Netherlands in the mid-1990s, where he caught the urban sustainability bug long before most Americans.

Peter Nicholson

Aside from his current dual role of heading up Foresight Design and the business alliance, the 42-year-old in the last year led small groups of business owners and others on educational trips to Amsterdam and Vancouver — cities considered further along in their quest for sustainability compared with Chicago. He also moderates panel discussions for international sustainable business conferences in Chicago and he is soon off to Singapore to participate in an educational seminar organized by the Social Innovation Exchange

And those Green Drinks meet-ups? They’re still taking place monthly. Lately, it’s been standing room only upstairs at the Jefferson Tap & Grille in the West Loop. At a recent  gathering, attendees had a lively discussion with Suzanne Malec-McKenna, Commissioner of the Department of Environment for the City of Chicago.

Crain’s talked with Nicholson recently about the business alliance’s new efforts and why companies pursuing green ideas and practices need a new road map that’s not readily available.

Crain’s: Why did you see a need to form the Foresight Sustainable Business Alliance? Are there networking gatherings aside from Green Drinks that focus more directly on businesses?

Mr. Nicholson: Through our Green Drinks events, I started introducing people to one another and suggesting they do business together. The volume got to the point where it was becoming inefficient for those folks to connect through me. I realized there needed to be a separate entity that connects these people together.

The alliance has quarterly networking events called Foresight Nexus that are specifically targeted to people with sustainable business interests. Those events have shorter presentations that talk about business transformation and how companies need to evolve in order to create a more resilient economy. You don’t have to be a member to come. It’s for people who are curious about sustainability and want to learn more or for others who are already well on their way. The next one will be in October at Haworth, Inc., a furniture design company in the Merchandise Mart.

Crain’s: How big is the membership base at the business alliance and what kinds of companies typically join?

Mr. Nicholson: There are about 160 members and they range from large Fortune 500 companies like USG Corp., down to new companies like Two Mothers Foods, sole proprietors, and entrepreneurs that have an idea they’re pursuing to start a new company. The majority of members are mid-to-small sized businesses, with up to $50 million in revenue. They tend to be B-to-B companies or service-oriented. We also have some retail members, but we’re open to everybody.

Crain’s: What’s the biggest draw for businesses to join the alliance?

Mr. Nicholson: I think it’s great to be in a community of like-minded people. That’s good for pure moral support, which is important because a lot of times when you’re in a sustainably-minded business you’re going against the grain and you have to do more work in order to achieve your sustainability goals as well as your profitability goals. It’s also good for connecting with like-minded businesses to do business with one another.

Sharing knowledge is an important reason to join too. Being a sustainable enterprise means doing things in a new way and the problem with that is there’s no road map. We have to make up those new ways. You can do it on your own, but it’s so much more efficient and fun to do it with other people and benefit from their knowledge, their mistakes and their experience.

Crain’sUntil now, the business alliance has been known for its networking opportunities and educational workshops. What are the new initiatives being unveiled in the coming months?

Mr. Nicholson: Our new efforts will focus on “Do” and “Advocate”. The doing part is going to start with an anti-greenwashing initiative. We’ve launched the first code of ethics that’s peer-based. If you’re making claims about the environmental attributes of your products or services — they’ve got to be accurate. We have a review committee so if anyone has an issue with another member, they can submit a complaint. It’s like whistle-blowing, but it’s being done in a constructive manner. It’s so important because there’s so much misrepresentation going on around these green attributes.

We’re also going to begin some advocacy work because so much of what will determine our future is happening at the policy level. There are few, if any, organizations that are advocating on behalf of members who share our values. We’ve formed a member-based committee, and as an ordinance gets proposed by the city, we’ll chime in and try to work collaboratively and collectively with alderman, city bureaucrats, and whoever else is involved.

We’re also forming relationships at the state and federal levels. While we may not be directly involved in those issues, given our resource limitations, we’re communicating what’s going on to our members so they can see what’s happening and they can potentially get involved if it’s relevant and urgent to them.

Crain’sHow many times a day do you use the word “sustainable”?

Mr. Nicholson: On average? About 45.

But we really tend to focus on the tangible benefits and activities related to this pursuit. Sustainability is fundamentally about recognizing that there is more than one kind of value in the world (i.e. economic), and that if the pursuit of one type is prioritized over others — such as social and environmental —  trouble, like climate change, can occur.

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This week’s Green Scene column in Crain’s Chicago Business: Electric bike company taps alternative-transit trend

One of John LaStarge’s electric
mountain bikes.

In 2008, John LaStarge was inspired to sell battery-operated bikes in Chicago. He converted a regular mountain bike into an electric version and sold it to a relative, but then was called up for a second tour of duty to Afghanistan with the Illinois National Guard.

When he returned in August 2009, Mr. LaStarge was ready to start building more electric wheels. Armed with a 10-page business plan, the 27-year-old had a tough time persuading bankers to give him a loan to get his new venture, Chicago Electric Bicycles LLC, off the ground. Despite those obstacles, Mr. LaStarge opened a narrow storefront on Grand Avenue in West Town last spring, and the orders have been coming in ever since. 

The company, which consists of Mr. LaStarge and two part-time employees, currently offers four models of custom-built electric bikes, including a comfort cruiser, a lightweight fold-up and a sleek mountain bike. They range in price from $799 to $1,600, and riders can zip around at top speeds of a little over 20 mph. Mr. LaStarge also can convert some regular bikes people already own to work with a battery, depending on frame size.

Crain’s recently talked to Mr. LaStarge about why he’s building his own battery-operated two-wheelers and how he plans to expand his business in Chicago and beyond.

Crain’s: How did you identify a need for electric bikes in Chicago, and why did you decide to build them yourself?

Mr. LaStarge: In the spring of 2008, gas prices shot up to about $4.50 a gallon in Chicago and angry CTA commuters were complaining about bad service and high costs. I thought: There’s got to be another way to get around this city. I’ve always loved bicycles, so I looked up electric bikes online and bought one from overseas. The battery only lasted three months and they didn’t offer any services or support. So I decided to build my own. The lithium ion batteries I use on most of my bikes can last over 1,000 charge cycles.

Crain’s: How did you get your start-up financing?

Mr. LaStarge: The banks didn’t help me at all. I went to Fifth Third Bank and (J. P. Morgan) Chase Bank. They both denied me even though I had a perfect credit rating, no debt, no student loans. Citibank offered me $30,000 at a 10% interest rate, but I hoped to do better than that. In the end, I saved a lot of my own money from Afghanistan and an angel investor — a relative — met me halfway with a loan so I could get started.

Crain’s: You launched two new products this summer. Tell us about them.

Mr. LaStarge: I got so many requests for mountain bikes, and I finally found one that had the right suspension. I took all the electrical components and put them on the bike to convert it to electric. I have two versions: a silver one that I sell for $1,600 with a lithium ion battery — it’s almost identical to one they sell at Kozy’s (Cyclery) for about $2,500. Then I have a black one that comes with a lead acid battery that lowers the cost, and it sells for $900.

I also started selling the Velo Mini in May, but I don’t build that one. I wanted to find the most compact, lightest bike possible, and it was beyond my means to build a bike of that size. I found a company in California that had a good one and I became a distributor for them.

A Velo Mini

Crain’s: Who’s purchasing these bikes from your company?

Mr. LaStarge: Some people who buy my bikes have told me they’re environmentally conscious and they want to reduce their carbon footprint. I also have customers who want to ride their bikes to work but don’t want to show up sweaty, so they ride the electric bike in the morning and they can pedal their bike after work by switching off the battery. Then there’s other people like myself who are just fed up with the CTA and waiting for buses. I know I’ll get more customers if the CTA raises rates or continues to cut service. And as gas prices continue to rise in the future, I’m sure you’ll see more people looking for alternative transportation.

Crain’s: Who do you consider your competition and your potential partners?

Mr. LaStarge: Kozy’s sells electric bikes and so does Best Buy. Best Buy doesn’t have anyone to fix them on the spot if they need it, and they’re expensive. Believe it or not, regular bike stores are my allies. I go to two or three of them in the city to fix customers’ brakes and other small things I can’t do in my storefront. I envision bike stores as potential partners. They tell me they don’t want to sell electric bikes because they’re too complicated and they don’t want to deal with the problems or the insurance issues of carrying them.

Crain’s: What are your expansion plans?

Mr. LaStarge: I’ve heard that lending has thawed out, so this winter we’ll focus on trying to get a business loan from a local bank. I might hire two or three more employees and open a second store in the suburbs. Everything revolves around gas prices. When they go up, we’ll get more interest in our bikes. The funny thing is a lot of people don’t even know electric bikes exist.

We haven’t done much advertising, except for online with Google and Yahoo, and old-fashioned fliers we put on people’s cars. I’m planning to advertise all over Chicago if I have a bigger capital budget next year.

We’ve also done a few city bike tours with small groups, but we hope to offer more next year, like the Segway tours at the lakefront. Our tours will be less expensive and people will be able to go farther. I’m going to try to get a spot at Navy Pier or the Planetarium, but first I have to go through all the bureaucracy with the city.

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This week’s Green Scene column in Crain’s Chicago Business: Eco-minded bank gets set to open

GreenChoice Bank, an eco-minded financial institution, is carving out a niche as one of the first green community banks in Chicago.

After two years of behind-the-scenes work, a small group of veteran Chicago bankers announced the bank’s formation when it acquired Family Federal Savings of Illinois last month. Family Federal had $60 million in assets, and though it was a troubled mutual savings bank, GreenChoice executives say they now have the capital to open their doors and begin offering credit to small-business owners and other consumers. 

The Green Exchange at 2545 W. Diversey Ave.

GreenChoice will set up its headquarters at the Green Exchange building in Logan Square at Diversey and the Kennedy Expressway in early 2011 when the LEED Platinum rehab of the old Frederick Cooper Lamp Factory is expected to be completed. In the meantime, Family Federal has two branches in suburban Lockport and Cicero, which will be rebranded as GreenChoice after some energy-efficient retrofits are incorporated into the buildings and other paperless systems and online banking updates are installed.

The bank’s senior management includes Harold Sherman, president and CEO; his son Steve Sherman, chief operating officer; Jon Levey, chief lending officer, and Kenneth Kline, chief financial officer. Some executives among the team are Leadership in Energy & Environmental Design Accredited Professionals, which helps them pursue the bank’s mission of adopting sustainable practices in its own operations and develop a strategy for attracting businesses and consumers who want to finance eco-friendly projects.

Steve Sherman brings a decade of banking experience to GreenChoice from his years of working at LaSalle Bank before it was acquired by Bank of America in 2007. Crain’s met up with him to discuss why the group decided to open a green community bank and how they intend to stand out as an environmentally focused institution. 

Crain’s: Is there really a need in the local financial marketplace for a community bank with a green focus?

Mr. Sherman: Yes. Lots of community banks were being swallowed up by large national players, and we saw a need for a back-to-basics community bank. We also recognized pretty quickly the sustainable business community in Chicago was growing fast, that there were banking opportunities there, but there weren’t really any banks catering to them. We saw the opportunity to put a twist on it and operate ourselves as a sustainably minded business and cater to the sustainable business community and its consumers.

Crain’s: What type of services or products will your bank offer that will make you more attractive to green-minded businesses and consumers compared to a regular community bank?

Steve Sherman

Mr. Sherman: We’re developing new products that reward customers for their green choices, such as higher interest rates on savings accounts if you choose paperless options. If you’re a property owner and you’re retrofitting your building or home to incorporate energy efficiency and green technology with the things that really have an impact on your carbon footprint, we will give better terms on those loans because we recognize it as being more environmentally responsible. Sometimes those technologies involve higher upfront costs, and we might be able to come up with a unique amortization schedule or a business customer might have more favorable covenants.

Crain’s: With only three locations, how does the bank intend to serve businesses and consumers throughout the city? Are there plans for opening more branches?

Mr. Sherman: The Green Exchange location will be a full-service branch, but we’re going after the entire Chicagoland area. We’ll have those three locations initially and hope to add more over time. When we have the online banking, we will do remote deposit captures and we’ll have a more complete ATM network so people will have free ATM access everywhere.

We don’t believe that a bank needs to set up an enormous footprint around the city to serve its customers. We can be efficient and mindful of what we’re building new. It’s an emphasis on bringing the bank to the customer instead of building a lot of bricks and mortar.

Crain’s: Why did it take two years for GreenChoice to gain regulatory approval and complete the process of officially becoming a bank?

Mr. Sherman: We set out to launch a new bank in June 2008 and went through a long and difficult regulatory process to get our board and team in place. That process got longer when the economy tanked. As other banks were being shut down, we got our approval from federal regulators in June 2009. That was still a terrible time to raise capital, but by the beginning of 2010, we came across an opportunity to acquire a troubled, local existing bank — Family Federal Savings. We finished the process recently by raising our capital with the bank acquisition and getting final approval from the (Federal Deposit Insurance Corp.) for insurance on deposits.

Crain’s: Were you worried about acquiring a beleaguered bank that wasn’t green as the means to jump-start your own eco-friendly venture?

Sherman: Family Federal had loans on the books that were troubled, but we saw a lot of value in them beyond that. It’s a hidden gem, a local community bank that took good care of its customers. It’s small enough that we can go in and green the business and re-engineer the way this bank operates. There may be a certain elegance in starting clean and brand new, but by going through this process ourselves, we’ll be a more knowledgeable partner about what it takes to be green.

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This week’s Green Scene column in Crain’s Chicago Business: Chicago’s ‘Carbon Nation’ connection

The Chicago premiere of the much-lauded documentary film “Carbon Nation” is scheduled for Tuesday, Aug. 10, at 7 p.m. at the Jay Pritzker Pavilion in Millennium Park. The documentary is packed with interviews and profiles of people engaged in innovative business solutions to climate change.

While the film has garnered positive reviews at showings in other cities in recent months, Chicago claims bragging rights for home base to two of the five producers of the film. In addition, Chicago is responsible for a significant piece of the private and non-profit fundraising that helped bring the movie to life. The film was directed and produced by Peter Byck, whose first film, “Garbage,” won best documentary at the South by Southwest Film Festival.

The two Chicago-based producers are Craig Sieben, president of Sieben Energy Associates, an energy efficiency consultancy, and Karen Weigert, a senior vice-president at ShoreBank, the community lender based on the South Side. They worked on the film without pay and tapped their extensive contacts in the renewable energy and clean tech industries for sources for the film. Crain’s caught up with Mr. Sieben to discuss the making of “Carbon Nation” and what Chicago’s green entrepreneurs can learn from watching it.

Crain’s: How does an energy efficiency expert become a documentary film producer?

Craig Sieben

Sieben: I’m 30 years into my career I now believe the biggest issue facing the planet is climate change. Al Gore made the horror film defining the problem and I felt there needed to be a film about solutions. At the 2006  Sundance Film Festival I was introduced to Peter Byck, who wanted to make the same kind of film. He asked me to assist him because he was a filmmaker, but didn’t know the energy space — which I do. Along with Mr. Byck, Karen Weigert and venture capitalist Artemis Joukowsky, we created a team of different talents and perspectives that told uplifting and impactful stories. You don’t need to believe in climate change to be inspired by the stories of how this is an opportunity to rebuild America and create a low-carbon economy.

Crain’s: What types of companies and individuals are profiled in the film?

Seiben: Companies involved in energy efficiency and renewable, clean energy are among those featured. We show people who are expanding wind farm technology, building electric cars, retrofitting old commercial buildings by fixing their lighting and mechanical systems, and re-training workers to tighten up leaks in homes and install solar panels. Viewers will see that even the Department of Defense can be a catalyst to change by investing in its own buildings.

Crain’s: Are any Chicago-area companies or individuals highlighted in Carbon Nation? What made them stand out enough to be included?

Sieben: Exelon Corp. CEO John Rowe was included because he has positioned Exelon as a nuclear, low-carbon energy company. Rowe sees value in efficient resource use and he’s taking a public, proactive stand in favor of putting a price on carbon. Sadhu Johnston was also in the film. At the time we interviewed him, he was Mayor (Richard M.) Daley’s chief environmental officer and an inspiring leader to help move the city’s green agenda forward.

Crain’s: What do you hope viewers take away from this film? 

Sieben: I hope students are inspired to make a career focusing on this area. For business leaders, it’s about being intentional with their business investments to minimize resource-use while growing their operations. Thinking about the carbon impact of their businesses and their practices is just plain smart.

Regardless of what the U.S. Congress does with climate change legislation, there’s a substantial amount that individuals and businesses can do to substantially reduce carbon dioxide emissions in America. I hope this film inspires people to see these opportunities and embrace them aggressively.

Crain’s: You’re a frequent speaker on energy efficiency and policy issues and you’ve just been appointed president of the board of directors for Leadership Greater Chicago. What opportunities do you see for Chicago-based entrepreneurs in the emerging green economy? 

Sieben:It’s not easy to join the green economy. You’ve got to have compelling business propositions and you’ve got to be solving problems that matter to your customers. We’ve worked for 20 years to invent a whole new service area in energy efficiency for buildings, but there’s a lot of development potential in other new areas, such as building contractors doing comprehensive home energy retrofits, or even low-carbon grocery products and urban agriculture. The businesses that really get into it today will be the ones that thrive in the future.

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