The year 2020 will go down in history books. We navigated through a pandemic and participated and observed civil unrest due to the murders of George Floyd, Ahmaud Arbery, Breonna Taylor, and others. During this time, an additional 200,000 small businesses permanently shuttered, while at the same time the largest tech companies grew and billionaires profited such that their wealth grew by 27% during the peak of the crisis.

Perhaps we needed 2020 to rip the band aid off our perception that the world is just fine, and that status quo is good enough. Yet, the built environment is still responsible for 40% of our global carbon emissions. And, amidst a housing affordability crisis, the nation is 3.8 million homes short of demand and growing.

Fortunately, people did come together to reimagine a more resilient and vibrant future. We hope that by sharing this report we can create further inspiration and market transformation towards a brighter, more resilient, healthy and equitable future that in our hearts know is possible. While 2020 was a particular challenging year, Green Canopy continues to position itself to disrupt the industry to ensure a better alternative to the current paradigm of housing.

With deep gratitude,
Susan Fairchild
Director of Investor Relations & Impact

Between the pandemic of COVID-19 and the civil unrest following the murder of George Floyd, the world as we know it has changed dramatically. There has been a grand unveiling of the massive inequities and planetary injustices hidden in plain sight.

With this in mind, we recognize its time for a different approach to business as usual - a more resilient and equitable approach. We are pleased to share Green Canopy’s 2019 Impact Report.

We hope that by sharing this report we can create further inspiration and market transformation towards a brighter, more resilient, healthy and equitable future that in our hearts know is possible.

All the best,
Susan Fairchild
Director of Investor Relations & Impact

“It’s sometimes easy to forget that all the small and seemingly insignificant tasks that we perform daily adds up to big change. Reading the Impact Report reminds me that we’re doing good work and adhering to our mission.”  - Green Canopy Employee

We know you believe transforming the built environment toward more sustainable and healthy housing can help ensure a better future. Thank you for being our partner!

The physical beauty of our Pacific Northwest region combined with a booming tech industry continues to draw people to our high-growth cities of Seattle and Portland. Daily, we feel and see this change with more traffic on the roads, more cranes on the skyline, homeless encampments in what seems like every nook and cranny, and an overflow of cars at our favorite trailheads.

Green Canopy launched in 2009 to combat and lessen the negative impacts of climate change and resource scarcity through in-city homebuilding. Nearly 10 years later, we find ourselves in the epicenter of rapid change. As a mission-driven Certified B Corp Company, Green Canopy inherently feels a responsibility to lean in further to the challenges we are experiencing in our high-growth cities: resource scarcity and global warming, urban sprawl, and housing crisis of affordability and access.

The Company recently paused to examine the broader purpose of our work as an urban infill residential developer and fund manager — going through a process to define our Theory of Change. A Theory of Change is a visual road map to creating the change we want to see in the world and provides a target to which we align our strategies, outcomes, and goals. We began this process with guidance from Jane Reisman, a Social Impact Advisor with over 29 years of experience in strategy and evaluation. The benefits to developing Green Canopy’s Theory of Change became clear early on and continue to bring stakeholder alignment, shared language, and metric alignment.

Green Canopy’s Theory of Change was recognized as a model for transformation in the impact investing community through a case study funded by the Rockefeller Foundation: “The case study provides an illuminating example of how investors can adapt Theory of Change to serve their impact management needs. By demonstrating the relevance and transferability of this tool for articulating, measuring, and managing impact, the hope is that this case study can contribute to strengthening other investors’ approaches, in turn contributing to building the evidence base for the “impact” of impact investments.”

The 2017 Green Canopy Impact Report takes the first step towards aligning our current metrics to our Theory of Change. Our intent for the coming year is to reassess and refresh the metrics to ensure we continue to make progress towards achieving our Theory of Change as well as to further align with common industry standards.

We believe in a better future and the Green Canopy Team — with our partners and communities — is doing the deep work to help us achieve this vision.

Thank you for being an integral part of our
community!

Susan Fairchild
Director of Investor Relations & Impact

The book Drawdown maps, measures and models the 100 most substantive, existing solutions to reverse global warming. The analysis identifies clear opportunities for the building sector to help play a role in drawing down carbon from the atmosphere (Rooftop Solar #10, Electric Vehicle #26, LED Lighting #33, Heat Pumps #42, Walkable Cities #54, Net Zero Energy #79). The Seattle Master Builders Association’s Built Green Program demonstrated this potential in the 2017 report, which found Built Green 4-Star and 5-Star homes were 33% and 40% more efficient respectively than comparable code-built homes.

2017 marks an important pivot point for Green Canopy as the company completed our first Net Zero Energy Home. Net zero energy homes produce enough energy to offset their energy consumption needs over the course of a year through solar energy and ultra-efficient systems. This represents the future of the Company as we rotate our entire pipeline to build only Net Zero Energy Homes in the coming months and years ahead.

“Our Net Zero Energy program is the result of a culmination of 10 years of system, process and team development... This is not the end of our sustainability journey, but it is a very important next step.” — Sam Lai, Cofounder

​FIRST NET ZERO ENERGY HOME COMPLETED | 100+ IN PRODUCTION | 728,112 POUNDS OF CARBON MITIGATED IN 2017

Green Canopy builds good homes that are affordable by utilizing best-in-class materials and construction methods. Our homes use non-toxic materials and finishes, fresh air ventilation systems, and Blueskin technology to provide a weatherproof structure with high air quality. In 2017, all Green Canopy’s homes were certified to Built Green or Earth Advantage standards.

In addition, the Company reviewed and assessed the “Red List” of commonly used harmful building materials. Of the 65 materials listed by Miller Hull and the Living Future Institute, Green Canopy identified 30 materials the Company was already compliant with, and immediately removed 12 additional materials in our supply chain. We are working to find alternatives for the final 27 materials.

Green Canopy’s program with the Washington State Housing Finance Commission (WSHFC) has allowed the Company to sell 11% of its total sales at more affordable and accessible prices compared to standard market rate homes. In 2017, Green Canopy built an average of 5 homes for each project site, where there typically was one — offering more homes at a lower price-point in urban communities and adding walkability to schools, parks, transportation and amenities.

In 2017 Green Canopy developed its fourth fund offering, Cedar Fund, which provides greater access and affordability to families earning 80% of area median income.

“The Cedar Fund puts us in a unique position to not only draw down carbon, but to also lift up our communities.” Aaron Fairchild, Chief Executive Officer

100% CERTIFIED BUILT GREEN OR EARTH ADVANTAGE | 6 AFFORDABLE HOMES IN PRODUCTION WITH WSHFC

Our Pacific Northwest identity is interwoven with our farms, forests, wild lands, and salmon streams. Green Canopy believes honing the ability to develop density in our urban infill walkable communities is essential to reduce sprawl and preserve our wild lands. Green Canopy has created the skill to selectively develop unique lots in our high-growth cities while consistently containing costs, providing a model for residential developers nationwide. For each project site, Green Canopy responsibly deconstructs and recycles the majority of the existing structure and replaces one home with an average of 5.

Green Canopy continuously strives to keep as much of the deconstructed home out of the landfill as possible. In addition to recycling and reusing, Green Canopy developed a partnership with 118 Design, a program that offers job skills to former gang members and recently incarcerated men from the 98118 zip-code. The 118 Design team salvages lumber from the deconstructed homes and repurposes the wood into urban-inspired furniture and wood-clad walls inside Green Canopy’s homes.

“My environmental ethic formed through hours and hours of playtime as a child in our Pacific Northwest mountains and forests. I am motivated to preserve these spaces so my daughters acquire the same sense of connection to our planet.” — Andy Wolverton | Chief Financial Officer
​
​90% OF ONSITE CONSTRUCTION WASTE RECYCLED | 95% OF DECONSTRUCTION WASTE RECYCLED

In addition to reducing operating costs and providing a healthier, livable space, a net zero energy home is generally more resilient. The shift to develop all Net Zero Energy Homes combined with efforts to transform the real estate market towards more sustainable and resilient housing will provide critical built environment infrastructure improvements.

Cities with strong social networks and social inclusion have also been shown to bolster resilience. Green Canopy is working to increase access and inclusivity to highly desirable neighborhoods through efforts including increasing density, partnering with the Washington State Housing Finance Commission to increase affordability, by launching the Cedar Fund and authentically engaging neighbors in Community Meetings. Before acquiring a property, Green Canopy invites surrounding neighbors to a Community Meeting to engage in an authentic dialogue around Green Canopy’s mission and the project design.

The Company also bolsters the resilience of high-growth cities through job creation. In addition to the 27 high quality jobs provided within the company, on average 95 jobs across the trades are utilized for every project site.

“I appreciate that you offer community meetings and a seemingly genuine interest in what matters to the neighborhood.” — Green Canopy Property

95 JOBS CREATED FOR EACH HOME BUILT | OVER 10 MEETINGS WITH POLICYMAKERS AND EDUCATIONAL TALKS GIVEN IN 2017

Impact investing is a rapidly growing industry powered by investors who are determined to generate social and environmental impact as well as financial returns. Green Canopy is an experienced fund manager and has earned a strong reputation for being engaged and transparent. The Company has successfully managed three real estate funds totaling around $45M AUM with over 100 investor accounts. Green Canopy routinely achieves financial and impact returns aligned with investor expectations. The third fund, the Birch Fund, has returned a total of $2.8 million to Green Canopy investors, with a realized annual return of 11.19% through Quarter 4 of 2017.

Green Canopy’s sophisticated approach to creating new financial vehicles for the impact investor is highlighted in its fourth fund offering — the Cedar Fund. The Cedar Fund was developed in response to the current challenges in our high-growth communities, bringing net zero energy homes to market alongside greater affordability and inclusivity for families earning 80% area median income.

“I’ve been happy with the reliable returns I’ve received with Green Canopy’s fund offerings. They’ve been a win-win: solid returns paired with environmental outcomes I value.” — Kathy Washienko | Investor

$2.8 MILLION RETURNED TO BIRCH INVESTORS IN 2017 | RAISING CAPITAL FOR 4TH FUND OFFERING — CEDAR

Deep work refers to the ability to focus, quickly master complicated information, and produce better results in less time. While Green Canopy hones this skill across all channels there are four areas of practice where the Company shines:

• Courageously innovating in the built environment: We are bringing net zero energy homes to market and creating greater inclusivity by integrating more affordable housing. Optimizing systems of cost control and vertical integration allows us to lean further into our mission and aspiration to build regenerative structures. 

• Creating new financial vehicles: Green Canopy creates investment opportunities that provide impact investors with a balance of social, environmental and financial returns. 

• Curating a culture of personal growth and peak performance: All Green Canopy team members participate in monthly leadership trainings to develop the necessary skills for building trust, authentic communication and deliberate engagement with other team members and key stakeholders. Team members are also peer-reviewed biannually through the lens of Green Canopy’s values — Cultivating Community, Authentic Communication and Excellence.

• Engaging, Educating, and Inspiring Stakeholders: Change and transformation only occurs when it is discussed. Using a holistic ecosystem approach, Green Canopy engages its many stakeholders in a variety of ways such as the real estate broker Green Genius Education and Award Program, multi-stakeholder Empower Happy Hours, Neighborhood Community Meetings, and the Green Canopy Subcontractor Loyalty Program.

“Green Canopy’s monthly Leadership Training has been instrumental in fostering a culture of engaged employees who are actively working toward maximizing their potential." — Ami Nieto 

8 PROFESSIONAL LEADERSHIP TRAINING SESSIONS GIVEN TO ALL EMPLOYEES | 63 BROKERS GIVEN GREEN BUILDING TRAINING

In the 2018 summer issue, Green Canopy CEO, Aaron Fairchild, was named to "Fast Company's Most Creative People in Business." 

"Your inclusion on the list is an acknowledgment of your innovative and impactful work. You join 99 other remarkable leaders striving to solve global and societal problems in novel ways," states Fast Company Editor-in-chief, Stephanie Mehta.

Fairchild responds, "I am grateful to be recognized by such an esteemed publication as Fast Company, focused on revolutionizing the current business paradigm and to be listed among leaders and businesses using innovation to catalyze the next economy — one that is more regenerative and inclusive."

The Green Canopy Team is honored to have a leader who inspires us to continue doing the deep work necessary to realize the future we believe in.

Green Canopy CEO, Aaron Fairchild, was recently featured on the Next Economy Now podcast by Lift Economy in the episode "Aaron Fairchild: Rooting Into Perennial Impact Under One Green Canopy." 

The podcast "highlights the leaders who are taking a regenerative, bio-regional, democratic, transparent, and whole-systems approach to using business as a force for good." Green Canopy is continually inspired by Lift Economy's work to benefit all life.

Listen to this episode to hear more from Aaron about how Green Canopy is influencing the existing construction paradigm while deliberately, methodically and incrementally addressing some of society’s most difficult challenges as we collectively work to create a more resilient and regenerative future.

Aaron offers Green Canopy’s past, present and future outlook, thoughts on culture and management, the phases of the company's growth and the importance of inclusive building for a more enriching world.

For more information on Green Canopy's approach to the current construction industry, listen to "Money is a Means to an End: Scaling Your Business with Aaron Fairchild" by The Construction Leading Edge.

SEATTLE, Washington & PORTLAND, Oregon (October 4, 2017) – Green Canopy, Inc., a proven urban infill deep green homebuilder, announced the launch of its newest affiliate company, Cedar.

“Meeting the challenges of global warming and the housing crisis in our high growth cities requires us to develop disruptive, integrated, and inclusive solutions. We are proud to offer a for-profit model for building resilient, inclusive and sustainable net-zero energy micro-communities without reliance on direct government subsidies” says Aaron Fairchild, CEO of Green Canopy.

The Company will acquire, develop, manage and market third-party certified green built, net-zero energy residential homes over the course of a 7-to-10-year period in Seattle, WA and Portland, OR. A minimum of 25% of the homes in every project site will be reserved as affordable rentals to households earning 80% of area median income (AMI) over the life of the Company. A final disposition process will result in selling a minimum of 25% of the remaining portfolio into community land trusts, or similar model, to be held permanently affordable to households earning 80% of area median income.

“Ecotrust is delighted to be a shareholder in Green Canopy, Inc. The Team has been terrific and we look forward to seeing where they take walkable residential infill development in the years to come. Green building, along with regenerative farming and forestry, are promising potential ‘drawdown’ technologies that pull CO2 out of the atmosphere and help reverse the devastating trends of the Anthropocene,” says Spencer Beebe, Founder & Executive Chair of Ecotrust.

Green Canopy's Cedar is poised to act on this opportunity. The urban infill home-building market is a highly fragmented marketplace with hundreds of small, independent homebuilders in both the Seattle and Portland markets. The February 2017 McKinsey Global Institute report, Reinventing Construction: A Route to Higher Productivity, found that “$10 trillion (is) spent on construction-related goods and services every year. But the industry has an intractable productivity problem and ... an opportunity to boost value added by $1.6 trillion.” “Fragmented markets and inefficiency go hand in hand. Our team at Green Canopy has long been aware of these inefficiencies and has spent considerable amount of time developing the processes and systems to contain costs and scale,” says Aaron Fairchild, CEO of Green Canopy. He further adds, “This ability allows us to lean in further to our mission and bring to the market net-zero energy homes alongside affordable home ownership. As a for-profit company, this puts us in a unique position to not only drawdown carbon, but to also lift up our communities.”

Samantha Lamb, of Lake and Company Real Estate sees the company as an innovative leader.  “Green Canopy is indisputably one of the leaders in the Green Home movement in Seattle and beyond. It is founded by passionate people who truly want to make a difference in the world. They don't just go for minimal standards in Green Construction; they are actively educating the market and realtors about the benefits of building and buying Green,” says Lamb. As evidence of this, Green Canopy will amplify Cedar’s impact through an 18-member stakeholder group, calling it the Impact Collaborative. The Collaborative will bring greater transparency to Cedar – its processes, best practices and outcomes – then conduct research and broadly promote their findings and advocate for new and better approaches.  

​
About Green Canopy
Green Canopy, Inc. runs a homebuilder, Green Canopy Homes, in Seattle and Portland whose mission is to inspire resource efficiency in residential markets. Green Canopy Homes began building in 2009 and has successfully sold over 125 third-party certified, green homes with over $80 million in gross revenues. Green Canopy Homes has highly developed home designs, project management processes, checklists, and systems of cost containment specific to the challenges and needs of building attractive, resource-efficient, micro-communities in walkable, urban places.
 
Contact: 
Aaron Fairchild, CEO
206.792.7281
aaron@greencanopy.com
 
Andy Wolverton, CFO
206.792.7287
andy@greencanopy.com

Contributed by Andy Wolverton, CFO

Green Canopy gladly spends significant time and resources to nurture our corporate culture; a culture centered on our Values. These shared values reveal themselves in the norms, mantras, behaviors, and language of the company; they are the bedrock of culture. Rather than let our values develop organically by default or be established top-down, every member of the Green Canopy Team participates in the process of establishing our shared Values from the ground up.

At the beginning of every year the Company holds what is called our Mission, Vision, Values Retreat. The Team at Green Canopy has created an innovative approach to building and managing Culture that creates alignment throughout the Company. At this Retreat the Team re-calibrates to our purpose, Mission, and the direction that the Team is driving the Company, Vision. The remaining and majority of the Retreat is spent focusing on our foundation; qualifying our shared set of Values. The sum total of the Values equates to a culture of integrity and constant improvement.

Once the Team has reviewed, revised and renewed our Values for another year, we roll into the first of two annual Cultural Reviews. These Cultural Reviews allow the Team to review each other and reflect on how each member has upheld - or better yet, how they can improve - their practice of and commitment to the shared Values collectively defined at the Retreat. The Company’s approach to managing and measuring culture ensures Team buy-in.

After all, it has been said many times before, “Culture eats strategy for breakfast.”

But do the Values really matter in the day-to-day minutia of completing tasks and improving the bottom line? 

Productivity is more valuable than fit and the ends justify the means, right? In fact, Green Canopy may have agreed with these statements years ago. We, for many years, proudly labeled ourselves as a Results Oriented Work Environment, or ROWE, a methodology popularized by Daniel Pink, among others.  

While the benefits of being a ROWE are many and well-documented (and we agree!), we have come to understand being a ROWE is only half the equation. How those results are achieved is more important than the outcome. Why? We believe it is because of our focus on the prioritization of long-term goalsover short-term gains.

Since our Values define Green Canopy’s collective how, we prioritize Values Alignment during our hiring process and developed the basic quadrant diagram (below) for grouping our Team and new applicants.

The diagram includes two axes, Values Alignment and Abilities, each with positive and negative option, making four unique quadrants. The green-shaded row at the top shows the two quadrants Green Canopy prioritizes in our Team and new hires; with both including positive Values Alignment. We would rather work to improve the skills of a well-intentioned coworker with a shared set of values than a highly productive employee who is ambivalent to Green Canopy’s shared Values. More time, energy and resources are spent working with a highly skilled yet misaligned employee than developing an under-performing Teammate who strives toward self-improvement along the Values.

When looking at the Values vs. Abilities diagram, the obvious priority would be to only hire those who fit within the top right box. They are the ideal and perfect Teammates, right?

​However, in practice we recognize that the top right box is the area to strive toward and is generally an impossible space to permanently occupy. All of our Teammates have areas of their work in which they are masters of their craft 

Our aim is to live within the top row, and the goal is to continuously move toward mastery in all aspects of our jobs. That has us all in practice (1)  bouncing back and forth between Lacking Ability and Mastery within the row of Values Aligned as we learn new lessons in our life and in our work. Personal and professional growth and development require the understanding that we are all imperfect. However, the Green Canopy Team understands there is great potential for those who enjoy shared values.
 
(1) As a quick side note on work as Practice rather than a Performance, we highly recommend this HBR Ideacast (Ideacast #523) released May 5, 2016, with Robert Kegan and Lisa Lahey.

What impact could we have if we were all just a bunch of tree huggers united under a green canopy? Our logo is definitely symbolic of the work that we are doing to change the course of climate change - and certainly everyone knows that we have sang our share of kumbaya - but it's the fast, hard data that delivers our projects and helps us work toward improvement at Green Canopy.

Decision making and benchmarking frameworks are integral to Green Canopy’s operations. Our acquisitions team uses a data driven framework and metrics to identify and purchase attractive development properties. Our project managers use a framework for guiding construction related decisions from start to finish. The reporting outputs are used to inform and manage future acquisitions and projects.

These carefully crafted systems support us in driving toward consistent execution and continuous improvements. We learn from the successes and failures of our decisions by establishing baseline metrics and measuring and reporting against them. This ultimately makes Green Canopy a better homebuilder. And importantly, creates a stronger and more resilient company, reduces risk for our debt fund members and builds a more valuable brand for shareholders.

Investors face similar challenges, especially those pursuing positive social and environmental impacts alongside financial performance. Without a guiding framework, impact investors are left to untangle a confusing mix of information and options. An impact framework can be a transformative tool enabling investors to move beyond intuitive guesswork toward more systematic and objective decision making.  

We hope you will join us in attending an event, Impact Investing with Purpose, being hosted by The CAPROCK Group and SNW Asset Management on Tuesday, October 20th, 6 to 8 PM at Seattle Impact HUB. Green Canopy board member Kyle Mylius will moderate a panel exploring the evolution and use of impact investing frameworks and metrics. Panelist Luni Libes, a familiar face to many of you from Fledge and Pinchot University, will offer insights into The Pinchot Impact Index, the subject of Luni’s recently published book. The event will close with a preview of CAPROCK’s iPAR impact investment framework and evaluation platform.

Contributed by: Aaron Fairchild, CEO of Green Canopy, Inc.

I have often cited Daniel Goleman to explain a consumer’s desire to make an impact with his or her invested dollar. In Ecological Intelligence, Goleman explains that consumers will always buy what they perceive to be a less toxic or more environmentally friendly product given price parity with a competing product. While the consumer may not be buying the perceived “better” product to make a positive impact in the world, they are likely buying it because they view the product healthier or better for their family. 

This consumer behavior pattern offers a direct analogy for financial investors. It goes without saying that investors invest capital to generate a return. If an investor can invest in an opportunity that generates a similar risk-adjusted rate of return to competing investment opportunities yet the investment will also deliver outcomes that better align with their values, then the investor will likely choose to invest their capital in such a value-aligned opportunity. 

Enter Green Canopy. Our mission is transformational; our company was deliberately created with the mission to inspire resource efficiency in residential markets. We have two impact product offerings for consumers to buy.

Our primary impact product is our homes. We build homes that are more environmentally sustainable than what is required by city code and  have third party  audits  verifying our homes meet or exceed a local or national green building standard. In other words, a Green Canopy home is healthier for the planet, consumes less energy to operate (we guarantee that), and is simply a better home than the comparable code-built home. The kicker: we price our homes for sale on par with other homes on the market. We have to price our homes competitively with other homes because if we don’t, buyers would choose to acquire the less expensive yet comparably located and sized home. So buyers of our homes acquire a Green Canopy home at a competitive price that delivers outcomes that align with their needs and values. 

Our second impact product is our real estate fund offerings. We currently manage two debt funds that generate competitive returns for investors. If it were not for these funds, we would not have enough debt financing to build more environmentally sustainable homes at our current scale. Investors in these funds buy membership units that are designed to generate competitive rates of return and deliver outcomes that align with their values. 

I believe the United States has entered a relatively new era where the general market is looking for values-aligned solutions. I witness this daily in both of our product offerings. However, most consumers and investors remain price sensitive and will continue to be so. This is where many people believe the government and foundations can play a role. However, I don’t believe it is incumbent on the government or others to subsidize product offerings, or for that matter the market to simply accept the market-price mismatch. 

Entrepreneurs innovate. The role of being an entrepreneur is to figure out how to bring new product to market in such a way that the market is willing to pay for it. Government incentives and infrastructure are helpful catalysts and support structures for market change. But the role of efficiently bringing new product to market is ultimately the role of entre- and intra-preneurs. 

Additionally, foundations, the government and other mission-driven sources of capital can aid in providing lower cost of capital to kick-start product offerings and help stimulate demand (think of the Bullitt Center or the ZHome development). However, values alignment should not be seen as an impediment to bringing socially and environmentally impactful product offerings to market—it should be used as a competitive advantage. Sound business people focused on values-based product offerings will continue to innovate within the cost/price constraints of the market and ultimately bring more and more highly sought after product to meet consumer demand. Impact alignment and the balance between supply and demand are really just a matter of time and innovation.

Contributed by Sam Lai

"It was great sitting next to you in English.  Stay cool over the summer and don't ever change!  xoxoxo"  

Every year, there is a common concern that is voiced by our team members when begin our Mission, Vision, Values review process. If we love our company culture...why would we ever consider changing our values. They are, after all, at the core of how we treat each other.  

"I love working at Green Canopy and I hope we never change!"  

However, when I consider what it means to grow-up, I'm reminded of how thankful my wife is that I've changed since she met me. Angie and I were barely past puberty when we met at the University of Washington. At that time, one of my greatest talents was a smile and my signature wink.  Seriously. The wink was the single greatest strength in my arsenal of babe-wooing skills.  For some reason, the wink doesn't do much for Angie now when I come home to our family of 5. Fortunately, I've grown up just a little bit I've added dish washing to my tool belt. We haven't lost that loving feeling, but we've certainly grown up.  

As for Green Canopy, we've grown up as a company too. We will remain focused on our mission to inspire resource efficiency. And many core values remain the same such as "authentic communication" and being "solutions focused." But how have we grown and changed? Below are some of the ways that are values are evolving at Green Canopy. In our MVV: Part 3 we will look at our final list of Values as well as how we have incorporated our shared values into our employee review process.

What's Changing?

1. "If it ain't broken, break it!"  
We started our company with a commitment to Innovation - While most builders exist only to make profit. Green Canopy exists to fulfill our mission...our profit allows us to continue our mission work.  
We started using the EPS score developed in Portland to baseline our projects' annual modeled energy consumption before most people ever heard of an energy audit. Oops.  I forgot, most people still don't know what it is!  Innovation is already at the core of who we are and we won't forget it. Today we have shifted our focus away from innovation toward "Professional Mastery."  The focus on systems and processes we've developed and continue to improve will allow us to build many more inspirational homes efficiently in multiple market areas...sounds innovative right?  

2. "Live-Work-Balance" 
In the past, this mantra was used to describe how we value each other beyond work.  However, the words seemed to set our personal life at odds against our work. Most of us see our personal purpose lived out in the work that we get to do here at Green Canopy. The new verbiage will sound more like "Fostering Community at Work."  

3. "Autonomy" 
This value came from Daniel Pink and his exploration of Autonomy, Mastery & Purpose being a prime motivation for individuals to excel in their work. You can watch the TED talk here.

Autonomy is at the core of the most driven teams, and since this cultural orientation is pretty well set at Green Canopy – we are shifting our attention to the next level, Accountability! This takes into account how our individual work connects to the greater team.

In the grand scheme, an outsider will not notice too much of a change in the way we treat each other here at Green Canopy. Many of the atypical values you'd never expect to see at a construction company will remain intact. We will continue to stay lighthearted and have fun. We will continue to talk about our feelings. And good god yes, we value vulnerability!  At the core of it, these values help us to communicate well, excel and to learn and grow quickly.  We know we have a mission to accomplish and we have to grow past our comfort zone to do it.  

Some days, I still wish that a simple wink is enough to be the hero. But my family is certainly better off with the fact that I've learned how to wash the dishes really, really, really well.

Contributed by Aaron Fairchild, CEO of Green Canopy Inc.

According to 2013 research published by Luigi Guiso, Paolo Sapienza and Luigi Zingales, The Value of Corporate Culture, 85% of S&P 500 companies have at least one section of their website dedicated to -- what they call -- “corporate culture” i.e. principals and values that should inform the behavior of the firm’s employees. Values are important to promote and advertise on corporate websites and reports, because it is imperative for companies to manage their image. External stakeholders expect companies to have thought about their values and publicly acknowledge them. The act of creating and promoting values can help assure external and internal stakeholders that the company has a higher degree of integrity and is guided to conduct their business in a way that is consistent with and based on their stated values. 

Start with Intention

I recently spoke with the CEO of a publicly traded bank who was extremely proud of his employees for going through the process to create and document their values. They were, “developed by a group of really passionate employees that love this organization and only want the best for the bank, our employees and our customers.” Their guiding philosophy relating to their values are stated as, “Our Core Values encourage us to act in a manner that “wows” others and provide us with the opportunity to guide our actions that allow us to become who we want to be. We take pride in our Core Values and strive to live them each day.” This is an example that provides insight into great intentions and proactive leadership. However, when I asked him, “What does the bank do to ‘strive to live them each day’?” he floundered. Wasn’t it enough to go through the process to create their values and then promote them both externally and internally?

Learn from Employee Perception

This is a great place to start. But organizations that want to leverage the power of corporate culture to increase productivity and returns need to do more. 

The Guiso, et al. study also uncovered some additional, interesting facts regarding advertised values. Notably, the value most commonly exploited by the S&P 500 companies was “Innovation” followed by “Integrity” and “Respect”. When the researchers attempted “…to correlate the frequency and prominence of these values to measures of short and long term performance,” they “...fail[ed] to find any significant correlation.” Basically they found that advertised values are not a great indicator of corporate and employee performance. Perhaps that is because it is easy to state your values, so everyone does. 

Another point to note in the research is the concept of perceived value. The study found that if the employees of the company perceive management to have a high level of integrity, there was a positive correlation, and good outcomes in terms of higher productivity, profitability, and the ability of the company to attract talent. In other words it isn’t enough to create and promote values, they had to be perceived and held within the employee base of the organization.

Living Values

So how do we know if a company’s stated values are not just something that they claim to be true, but are indeed perceived and held by the employees of the company? 

A few clues to consider in your evaluation process: 

1. If the company has its values listed internally or in an orientation packet, but they do not advertise their stated values on their website, this would suggest a note of caution. Again, according to the research paper, 15% of all S&P 500 companies do not advertise values. If you don’t talk about your values or share them with outside stakeholders then it is hard to be held accountable to them. It may also indicate that their management wants to be authentic and doesn’t feel the need to advertise values, however it certainly begs inspection.

2. Does the firm, large or small, value their Human Resources Department or efforts. In small, start-up firms many times HR is valued lower than marketing. The commitment of the leadership to focus on their number ONE asset, their human resources, is indicative of their values. In larger companies, is the head of HR part of the Executive Suite? In other words how high up are Human Resources valued? If the head of HR is nowhere near the top of the company, this would indicate a gap and that the leadership of the firm does not have a high attribution to corporate values. 
   

3. Inquire how developed their internal recruiting processes are. If employees don’t want to recommend their friends to work at the company… something may be off.
   

4. Can an employee who has been at the company around one year tell you the values of the company? If the company is living their values, it should be easy and even exciting to share with others the shared sets of values at the firm.
   

5. Can managers and employees give examples of when others made decisions that aligned with the values of the firm? Clearly if no one can, I would question if their values are lip service.
   

6. Lastly, ask the vendors and customers of the firm what makes the company different from others in same field. If examples of what makes the firm different line up with their stated values, you can assume that their values are not just lip service and that the employee on the front lines is living the firm’s values. 
   

I am sure you can think of many more “sniff tests”. The fact that anyone can truth-test stated values should give employees, investors, and customers alike a leg up in identifying if a company is truly anchored by its values (which correlates to performance and profitability) or if their stated values are just the lip service of corporate collateral created in the back halls of the Marketing Department. 

Contributed by Aaron Fairchild:

While we have been certain of our business model for two years, apparently we haven’t been certain about who we are. J

From our retail brand name, to our websites, to our legal entity, to the shareholder base, to our corporate location, so much of our company has changed!  The result is that we are rolling into 2011 refreshed, recharged and ready.  We are now located in Fremont, as a C-Corporation holding a homebuilding company named Green Canopy Homes with roughly 20 shareholders.  The changes have established a highly resilient, well funded and determined group, with a healthy following of fans and supporters.

2011 brings with high hopes and expectations combined with plenty of unknowns.  We anticipate our local real estate market to remain relatively flat and for interest rates to be higher.  We believe that the NWMLS will have new check boxes to list energy performance scores among other make-sense sustainability features.  We hope that the City of Seattle will announce the coming of an ordinance requiring all homes to have energy performance scores assessed at the time of sale.  We are certain that 2011 will see increased awareness of the benefits of energy efficient homes, which will translate into shorter sales cycles for Green Canopy Homes.  Lastly, keep an eye out for Green Canopy to expand its business offerings and impact in the residential market.

All the best to you in 2011!

Post contributed by Aaron Fairchild:

Social Capital Markets 2009 (SOCAP09) - “It’s All About the Bag”

Last week I was at a conference in San Francisco called SOCAP09. The focus was social capital markets and the eco-system of related investors and entrepreneurs. The first two lines of the SOCAP Conference Guide read, “There’s so much happening at this conference, it’s hard to know where to begin. But when you get right down to it, SOCAP09 is about the bag.” The organizers decided to highlight a bag created out of Indonesian garbage heaps as an example and symbol of what SOCAP09 is about. The bag and the business model aren’t scalable and nowhere near having the kind of volume or sales and distribution that allows for a sustainable business. In his opening address, conference organizer Kevin Jones talked at length about the bag that the XSProject created through the guidance and vision of Ann Wizer.

After Kevin finished his opening he handed the microphone to Sonal Shah, Director of the White House Office of Social Innovation. Sonal went on to discuss how the government is looking for great ideas that have the ability for scale, and spoke about the Serve America Act and the need for participation across sectors to address our social issues. Nowhere in her discussion or in the panel she was a part of after did they mention the role of for-profit businesses. They spoke to non-profits, foundations, and government programs. Finally, during the Q and A time of the panel someone asked about the role of for-profits and investment capital in search of returns as well as impacts. I thought to myself, “I flew down to San Francisco because here we are on the cusp of a massive, national and global social transformation, and it is all about the bag?” Capital and financial markets have begun investing in companies, organizations, and strategies that take into consideration social and environmental impacts, traditional economists consider these externalities that should be ignored, and it is all about the bag? Investments that account for these externalities are predicted to grow to 5% to 15% of total invested capital by the year 2015, this represents trillions of dollars, and the organizers of Social Capital Markets 2009 highlight a humble bag and non-scalable business model? I left the first day feeling skeptical if not a bit cynical.

I got to the conference early the next morning for some coffee and I ended up running into Kevin Jones. Kevin is a big, red faced man with stony-tint glasses and a very unassuming style. After the pleasantries and congratulations I learned that last year they had just over 600 participants (good for the first year), and that this year they had around 1,000 participants. I asked him where SOCAP was going, and he said they would like to have more entrepreneur grants next year and that he would like to eventually see somewhere around 1,500 entrepreneurs along with the cadre of fund managers and investors large and small. So then I asked where are social capital markets in general headed? He told me the first panel of the morning would be addressing that question. When I pushed him on my observations from the first day and the slant toward non-profits that I felt, he disagreed wholeheartedly and said that his intention for the conference was to highlight and encourage profitable solutions that considered and accounted for environmental and social impacts in their business models. He insisted that capital was flowing in larger and larger amounts in that direction as investors understood that the externalities of yesterday are not the externalities of today. Okay, okay… I decided to approach the morning’s sessions with an open mind.

I could not have been better rewarded for the renewed outlook and came to understand the symbolism of the bag. I found it astounding that the conversations I had throughout the remainder of the conference with investors, fund managers, and entrepreneurs alike often became philosophical and reflective while at the same time there was a transcendent feeling that those of us in this sector are sitting on a geyser.

Charly Kleissner talked about holistic investing and “going away from black and white." He sees investment capital moving away from “or” and to “and." Dan Crisafulli talked about enhanced transparency and larger partnerships between private and government capital as the need to “move the needle” on our social and environmental issues continued to become more intense. Amit Bouri talked about greater standards that are widely accepted by the social capital and financial community alike, such as Impact Reporting and Investing Standards (IRIS). I talked to a Canadian investment adviser about meekness and power appropriately placed.

I also had conversations with 3 other fund managers that in many ways were like listening to recorded conversations we have had within G2B Ventures and our sincere belief that we are pointing the market toward profitable investment in existing residential energy efficiency, and doing our small part to help transform the market and the world. Yet we remain humble and open to advice and dedicated to transparency, we remain optimistic, and we remain convinced that the investments made in triple bottom line ventures like ours will help change a world where economies dictate the way we all live.

On the last day of the conference they convened an open discussion designed to give participants the opportunity to suggest ways that the XSProject could be turned into a viable and sustainable business. Businesses start with a seed idea, the idea takes root and begins to sprout through the thoughtful fertilization of outside ideas and inputs, the germinated seed then grows into a business through careful cultivation, hard work and applied capital. We all understand the cycle; the difference is our determination to make a difference in a world in need of change and that we know we don’t have all the answers and are willing to ask for help. The key to SOCAP was the humility interwoven throughout the conference and the determination to learn from the mistakes of the past while focusing on profitable solutions for our environmental and social problems. I returned to Seattle with my unbridled optimism intact – the bag had done its work.