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Putting stock in the environment

by Pam Sturner

When it comes to the environment, Nicole Lederer and Bob Epstein are all business.

As leaders of the nonprofit Environmental Entrepreneurs (called "E2"), Lederer and Epstein are putting their high-octane, Silicon Valley-style of activism to work on behalf of environmental causes. Focusing on the argument that what's good for the environment can also make good business sense, the two-year-old group has gained support of high-tech executives throughout the valley.

From a small circle of friends, E2 has expanded to 150 members who have to date raised $1.4 million for environmental causes.

This spring, Lederer and Epstein put their bottom-line approach to the test in the California Legislature. So far, they are pleased with the returns.

In January the group took up its first major fight for a piece of environmental legislation, AB 1058. It was the only nonprofit run by business people and for business people in the statewide grassroots coalition. AB 1058 aims to reduce carbon dioxide emissions from passenger vehicles.

The bill passed with 42 votes, one more than the required majority. Now the group is gearing up for the battle to come in the Senate, which it expects to be even tougher.

If this sounds like a mission that would make most novice lobbyists nervous, make no mistake: these are hard-nosed rather than starry-eyed activists.

"We're not approaching this as environmentalists, but as a business group," said Lederer, a Palo Alto resident who has lived in Silicon Valley for 20 years.

In keeping with its mission to bring business values, practices and people to solving environmental problems, Environmental Entrepreneurs ran its campaign with the focus of a high-tech product launch. Using email updates and online petitions, Lederer and Epstein built their effort to gain support around activities needing only 10 minutes to complete. The goal: to fit the long work weeks of members, many of whom are executives in leading technology companies or have startups.

"We know what it's like to run a company, and we respect that they have busy lives," said Epstein, who founded three local companies, including the software giant Sybase, before devoting himself full time to environmental issues.

Assemblywoman Fran Pavley (D-Agoura Hills) sponsored the bill. One of her staff members, Ann Baker, credited the coalition with getting the final 8 or 9 votes during the last month before the bill went to the full Assembly.

As a business-oriented group, E2 occupied a critical niche, by providing a counterpoint to the opposition from the nation's automakers, as well as the California Chamber of Commerce.

"When we get the Detroit auto companies opposed to a bill, we usually get the Chamber and other groups tagging along. E2 created a business presence for AB 1058," said Baker. "They knew what was reasonable, and how to make sure [an argument] is based on sound science."

E2 targeted pro-business Democrats and centrist Republicans undecided about the bill, with arguments based on scientific data on global warming and economic consequences. Unless carbon dioxide emissions are reduced, global temperatures will rise, threatening water supplies and ultimately driving up the cost of doing business in California, they said. By using less fuel, cleaner vehicles also translate into savings at the gas pump and reduced dependency on imported oil.

The involvement of high-tech executives in lobbying for the bill helped open doors in the Capitol, Epstein said.

"One of the reasons we're able to get these meetings...is that people from [an assembly] member's district are taking time off from work to show up. It carries a great deal of weight," Epstein said.

Assembly members who took interest in E2's position included Tom Harman (R-Huntington Beach), David Kelley (R-Riverside County), Joe Nation (D-Marin County), Joe Simitian (D-Palo Alto) and Herb Wesson (D-Culver City), Baker said.

The approach also attracted notice on the editorial pages of the state's largest dailies, including the Los Angeles Times, the San Francisco Chronicle and the Sacramento Bee.

Lederer and Epstein are already well into the next stage of their campaign: getting AB 1058 through the Senate Environmental Quality Committee on April 1. Epstein spent part of last week in Sacramento meeting with committee members. E2 is also circulating its position paper on the issue, which contains 80 members' signatures and company affiliations.

Supporters of the bill expect a hard fight in the Senate from the auto industry, which recently killed an effort in the U.S. Senate to raise the average fuel efficiency of American-made passenger vehicles from 24 miles per gallon to 36. The industry group fighting the effort -- the Alliance of Automobile Manufacturers -- and General Motors have already challenged to AB 1058.

They argue that federal law prohibits states from acting on carbon dioxide emissions, on grounds that regulating carbon dioxide emissions means regulating fuel efficiency -- a federal function.

The fate of AB 1058 hinges on whether Pavley can satisfy her critics' calls for both flexibility and specificity in setting a carbon dioxide standard. Since no health-based criteria exist, the California Air Resources Board could have trouble determining how far to cut emissions, according to the Assembly's analyst.

Another provision -- that the reductions be cost-effective -- also remains to be defined.

To improve the bill's chances, Simitian proposed an amendment delaying implementation until Jan. 1, 2005 and requiring a report from the Air Resources Board by Jan. 1, 2004.

Steve Fioretti, an E2 member who organized meetings with 10 Assembly members, is optimistic that AB 1058 will pass.

"It's a common-sense bill; it's not a radical bill," said Fioretti, a marketing executive from Siebel Systems. "It took a flexible approach to setting guidelines so that constituents could work together on it, including the auto industry."

As they move into the next phase of the campaign, Epstein and Lederer are also figuring out how to scale their efforts to a group that has grown rapidly.

Lederer, who became an environmental activist as an opponent of the Sand Hill Road expansion, thinks interest in E2 reflects the rise of a generation of business leaders who grew up witnessing disasters like Love Canal and the Exxon Valdez oil spill.

"Those things shaped a whole generation who are now the business leaders we're recruiting for E2," Lederer said. "These are people who know we can mess things up permanently."

Epstein believes there is also a correlation with the Microsoft antitrust case, which he thinks has caused Silicon Valley to pay attention to government in a new way. "People are realizing they can't be just passive observers," he said.

E-mail reporter Pam Sturner at psturner@paweekly.com