Saturday, June 30, 2007

Base of the Pyramid

I just learned about the BoP conference scheduled for September 9-11, 2007 on the campus of the University of Michigan. I doubt I will be going, but it sounds like an interesting event. I went to a CSRI event at the Kennedy School of Government featuring Professor Hart back in April. I made some notes about it here.

Prof Hart and C.K. Prahalad argue that ignoring the 4 billion people that live in relative and outright poverty are ignored as part of a sustainable future at businesses' peril. After all, that's a pretty big market in need of affordable, simple, and reliable solutions to basic needs the developed world takes for granted.

Take a look at Unilever's success capitalizing on a portion of this market with Lifebuoy soap in India and draw your own conclusions.

A Simple Dry Cleaning Shirt Clip...

In a moment of what many would consider too much thinking (or too much time on my hands, depending on your point of view) I started thinking about the small clips that the neighborhood dry cleaner uses to neatly hold the collars of my shirts closed and the arms of the shirts folded in the front. Each shirt has one on the collar. How many millions of these things are created and tossed each year? There must be machines running right now making these by the hundreds per minute. From the look of the piece (it has a parting line) it must be injection molded, probably with a die that pops out dozens at a time. I bet they cost less than a penny each to the dry cleaner. I'll have the ask the next time I'm there.
I wonder what the true cost of these little plastic wonders would be if all the externalities were accounted for. The effects of extracting petroleum, the effects of toxic fumes on people and place in the manufacturing process, the effects of transportation's emissions, etc.? It would be vastly different, I am sure. Would a massive increase in the "shirt clip index" drive the industry to collapse? Nope..we'd either do without them or start using something cheaper.
Oh, by the way, I did say "dry cleaner". Their sign claims that they are using chemical free cleaning, but I have yet to ask. I suppose I trust them on this one.

Tuesday, June 26, 2007

Dancing with the Tiger

The next volume to fall into my hands to continue my education about creating a restorative economy is Dancing with the Tiger, Learning Sustainability Step by Natural Step. I am looking forward to gaining a better understanding of The Natural Step, founded by Dr. Karl-Henrik Robert.

I've only started the foreword by Nicholas C. Sonntag, the CEO of CH2M Hill at the time of the book's publishing. CH2M Hill is a large, multi-national engineering services and construction management corporation. I am curious to learn how they adopted the Natural Step, and whether or not they are still pursuing sustainable business practices.

A bit of local sustainability, this time in terms of land-use and development patterns, came to my attention as I biked in parts of the Lehigh Valley in Eastern Pennsylvania. I have the privilege of bringing my bike on the occasional business trip. Depending on our schedule, I can get out for an hour or two after the day is done. I decided to head north from Quakertown toward Allentown, using that wondrous (not really) device with Google Mobile Maps for navigation (no printing required!). Despite the fact that my complete ignorance of the local terrain invited more climbing pain than I bargained for, I appreciated the lush scenery. Bird song was nearly nonstop, and I was constantly buffeted with insects of all sizes, their swarming certainly a sign that the Swallows would be eating well.

I noticed a creeping swarm of another kind, subdivisions. It is clear that farmland, no longer valued for its food producing ability in the local economy, is being sold for the building of homes. I am not familiar with the local economy, but I can bet the area "needs" housing, and we all want our own space. What will happen if the price of fuel keeps climbing? Would these farms be able to provide for Allentown? Will these homes even be accessible?

Back to The Natural Step; take a look at Ray Anderson's interview from The Hours. Interface is a Natural Step practitioner and one of the poster children for the journey toward a zero-footprint company. I hope others are listening.

Monday, June 25, 2007

The Ecology of Commerce

As I flew back from a cousin's wedding in Chicago, co-spewing tons of CO2 into the atmosphere with one hundred + other AirTran passengers, I finished Paul Hawken's The Ecology of Commerce. As I mentioned in a previous post, it is hard to believe that this book was written 14 years ago. I am also disappointed that I read it so recently. While Mr. Hawken gives into some left leaning rhetoric at times, I found the book to be fairly even-keeled. I am sure others would have a different opinion, but that's OK.

As I have learned from other books (Natural Capitalism, Cradle-to-Cradle, Eco-Economy, The Sustainability Advantage, & The Sustainable Company) like Mr. Hawken's, there are some common threads to sustainability that are not all that difficult to comprehend:
  1. Waste = Food. Taking Nature's lesson that what falls, flops, rots, splats, or is cast aside turns back into a form that can be reused completely; we need to change our relationship with resources from a linear to a cyclical one.
  2. Migrate from a carbon based economy to a hydrogen & sunshine economy. We are quickly extracting stored energy in the form of hydrocarbons that we are not capable of replacing. See thermodynamics.
  3. Get the pricing right. We need feebates, tax structures (carbon tax?), and pricing that reflects the true cost of resources and therefore encourages the preservation of resources and the long-term viability of our economy.
So we are not doing this now. It doesn't mean we can't. The biggest roadblock in the good old physical force of inertia. No one wants to change. Us, political parties, NGO leaders, unions, energy companies, the list goes on and on.

Furthermore, on page 144, Mr. Hawken provides his insight into what a sustainable business is

  1. Replaces products sourced from "away" with those sourced locally and regionally
  2. Takes responsibility for the effects they have on the commons
  3. Does not require exotic sources of capital
  4. Engages in human-scaled production processes
  5. Creates products of practical use and enduring value
  6. Changes consumers to customers

This is a list the omits many, many corporations. Perhaps in the future, businesses will progress to a smaller more local focus. This is not regression, it's progression.

There are many perceptions to change and assumptions to challenge. An example is the CNN report I saw over the weekend. The reporter, in that light-hearted "can you believe it" tone that is clearly not neutral, informed us of San Francisco's mayor banning the purchase of bottled water by city employees for environmental reasons. Water will be supplied in reusable containers (like it used to be). When the attitude of the newscaster makes a statement about the story, what's happening?

If the environment is wound and integrated into our lives, whether we (or economists) like it, how can it be ignored in our business calculations? We inherently derive all economic value from natural resources. How can we ignore that and expect to continue with the status quo?

Thursday, June 21, 2007


June 21st, the Summer Solstice. The longest of days for the northern hemisphere. These long days, with purple cloud filled twilight skies extending past 9:00 PM do not go unnoticed. These are the days I dream about in the depths of January and February, when the sun says, "good night" at 4:20 PM and my mind crumbles into a pile of vitamin D starved, unresponsive cells.

I took a morning walk through the local park, Beaver Brook Reservation. It's an activity I have taken to over the past few months when I am not traveling. It helps get the day started on a positive note; listening to the Robins, Cardinals, and other feathered fauna greeting the day. A few weeks ago I started bringing along empty shopping bags to gather wayward pieces of refuse that had either accidentally or intentionally been cast aside in the park. I was amazed by just how much "stuff" was there, and equally amazed that the vast majority of it was in the form of drink containers. Beer cans and bottles (an entire case of Mike's Hard Lemonade, no doubt the remains of an adolescent caper), energy drinks, soft drinks, and of course, water bottles.

I did a decent job of cleaning up on the route I walk. Kudos for me! The part about this that's a bit ironic is that I feel better for having picked up said refuse and redepositing it in the "correct" containers at home, recyclables here, trash there, to reduce waste. It merely relocates it. OK, so the plastic in the recycling bin will be reused (down-cycled most likely) in some capacity, the glass and metal as well, so I helped there, but the other refuse the regular trash bin will end up as a pollutant. Instead of cluttering up our little park, it will help fill a landfill. The underlying issue, that there is no "away" in the term "throw away", is not nearly solved, only highlighted.

When I walk through an area that I know was clear only days before and see a new bottle or can, I wonder about the relationship between us and the world we are part of. Acts of commerce have become separated from the environment; we don't know where that bottle of Coke came from, therefore, leaving it conveniently on the ground for someone else to deal with is perfectly acceptable. I don't get it. Buying that bottle of Coke is inherently environmentally destructive, yet it is a positive for the retailer, the distributor, the bottler, and the producer, and in some way, society. How do we reconcile that?

I am about half way through Paul Hawken's Ecology of Commerce, and this is one of the main issues Mr. Hawken strives to address; redefining commerce such that acts associated with commerce are restorative.

To that end, I decided to buy Recycline's Preserve triple blade razor. After meeting Ben Anderson at the Simmons NetImpact event a few weeks ago, I sheepishly admitted to him that I did not currently use their recycled toothbrush or razor. One reason I did not buy them; as much as I talk about resource reuse and sustainable manufacturing (such as it exists today) I am a consumer. The toothbrush & razor are not at my local supermarket, requiring extra "effort" to get them, Trader Joe's for the toothbrush and Whole Foods for the razor. Talk about hypocrisy!

Now that I have another razor that can be returned and remanufactured, what do I do with the Gillette Mach 3 handles I have? Throw them away? I know, assuming the Preserve works well, I'll mail them back to Gillette with a note asking if they would like to reuse them. Of course, with all the CO2 emitted in their shipping, will we be ahead of the game?

Wednesday, June 20, 2007

Other Sustainable MBA Programs...

I have heard about Presidio, Green MBA, New College, and Green Mountain College's on-line MBA program over the past few years. In all the conversations I have had with people that were looking specifically for programs that integrate and intertwine sustainable thinking into their MBA programs, these are the institutions that topped the list. In those same conversations, BGI is the one that stands out. Now, the fact that the people I spoke with are either employed by, current students of, or recent graduates of BGI has nothing to do with it., right? I am certain that these institutions offer a fine education, and may have features of their programs that make them more attractive to some students (on-line only, location, curriculum, etc.). I owe it to myself to do some more data gathering on these schools and make my own educated decision on where to focus my efforts.

To that end, I visited Presidio's website this morning for some more reading. I have to say that the initial impression is one of much more formality, almost "stodginess". It's interesting to me that one can draw certain conclusions based solely on the "feel" of a website (or any other piece of marketing communication). The language used, the layout, the photographs, heck, even the font makes an impression. Every site is designed for a purpose, and I am certain that the folks at Presidio had their's designed for the message they're trying to convey. The admissions calendar is different and the admissions process is different. I am interested in learning some more about it, specifically speaking with students that are either attending or graduated and live on the east coast.

The most recent program I learned about, via a press release on CSRWire, is Marlboro College's Managing for Sustainability MBA. It seemed a bit coincidental that they are starting the program this fall as I seriously consider pursuing a sustainable MBA program. The incoming class of 2009 will be the first cohort; that will be exciting and challenging. From what I can gather, the Marlboro program borrowed from, and with the blessing of, BGI. Despite the fact that it's a "start-up" MBA, the fact that there is a sister organization to help guide their execution is a bit reassuring. Oh, and then there's the location element. Marlboro is in Brattleboro, VT, a heck of a lot closer to Boston than Bainbridge (a mere 2950 miles closer). From a life convenience perspective, it would certainly be nice, and the CO2 emissions associated with traveling to Brattleboro, VT v. Seattle, WA will be significantly less.

There are many factors that go into a person's decision to advance their education; career change, career advancement within one's company, intellectual curiosity, boredom, uncertainty about what to do next, pursuit of a passion, structure, development of a new network, business opportunities, etc. Some people just like school. I'd have to say that 6 of the 8 items I just listed apply to me. I suppose the biggest risk involved in pursuing an MBA in a specialized field like "sustainability" is the potential for businesses familiar with traditional MBAs to discount the education as second rate or sub-par. On the other hand, a successful graduate of an innovative "new" enterprise may be looked at as an entrepreneurial type. I am certain that the programs are adequate and perhaps even superlative, but only time will tell how their graduates perform. What's that old saying, "you get out of an education what you put into it."? Sounds about right.

Tuesday, June 19, 2007

Taking Action; Sustainable Business Education

After over two years of pondering and reading about socially responsible business, I have decided to apply to the Bainbridge Graduate Institute. I started a file over two years ago with information on "green" MBA programs. There was a mailer from Green Mountain College in Vermont (of course) as well as a few articles and clippings about MBA programs in general, including a not so positive piece from The Economist and one from the Financial Times. I like this paragraph from The Economist's piece (emphasis mine):
By teaching ethics and becoming more practical, business schools may be going back to their roots. As Rakesh Khurana of HBS points out, many schools saw their founding mission to professionalise the management of business, much as medical and law schools had institutionalised their disciplines. According to Mr. Khurana, whose book on the history of HBS is about to be published to mark its centenary next year, professions have at least four elements: an accepted body of knowledge; a system for certifying mastery of that knowledge before it can be practised; a commitment to the public good; and an enforceable code of ethics.

Is harvesting resources at an ever increasing rate with little regard to cultural and natural effects ethical? Good question. Back to the topic at hand.

Everything I have learned about BGI's innovative program leads me to believe that this is the place for me. I have been working for over ten years, and have been relatively successful, yet I know so little and have such a great intellectual curiosity to better understand "business". On top of that, I am convinced that our linear production systems are broken, though our businesses are not equipped to fix them. We have one finite planet that businesses play an enormously influential role in. Why not help them hop on the {insert zero emission vehicle here} and come along for the "green" ride?

There are risks associated with joining something that is new (as with any new venture); it could fail. The degree could be viewed warily by would be employers, the experience could be less useful than anticipated, on-and-on-and-on. Nothing ventured, nothing gained.

On the other hand, how exciting is it to potentially be part of something new and ground-breaking? An entirely new way of teaching what it is to be in business. This is what gets entrepreneurs fired up from dawn 'til way past dusk, a deeply held belief that what they are doing matters, that it makes a difference in some small way, that it positively affects people. No matter what company or movement someone or some group starts, it is done with the intent of changing something for the better (according to their vision). BGI is on that path.

Electronic and verbal conversations with quite a few graduates yield the same responses; they are all happy, no, nearly ecstatic, with their decision to attend BGI and their experiences. They are part of a new way of looking at business, a way that seeks to infuse conscience and social accountability while maintaining a rigorous commitment to financial performance. Social accountability and financial performance are not mutually exclusive, they are inseparable.

On a slightly different note, some small news items:
  • I caught a short segment on this evening's edition of the Nightly Business Report on socially responsible investing. Key point: there is no definitive evidence that SRI funds over or under perform the broader market; do what you think is best. Watch the segment for yourself and draw your own conclusions

  • Warren Buffett doesn't rate non-financials in his investment decisions. Who would have guessed? The test will be whether companies that DO take CSR actions (broad definition here) end up being the kind of companies Mr. Buffett prefers to invest in. Berkshire holds 200 million shares of Coke, and Coke recently made a pledge to help maintain watersheds in some developing areas. Also, given Berkshire's insurance business, they stand to suffer from climate change induced natural disasters. (excerpt from Mr. Buffett's Letter to Shareholders)
    "All that said, a confession about our 2006 gain is in order. Our most important business, insurance, benefited from a large dose of luck: Mother Nature, bless her heart, went on vacation. After hammering us with hurricanes in 2004 and 2005 – storms that caused us to lose a bundle on super-cat insurance – she just vanished. Last year, the red ink from this activity turned black – very black."
Fewer disasters = better profitability. Calm weather is in their best interest.

Monday, June 18, 2007

Coca-Cola, Water, & Sustainable Development

It is fitting that the Face Value column in the latest issue of The Economist focuses on the recent installation of Neville Isdell as the new CEO of Coke. This comes just as I read about Coke's newest commitment to preserving and restoring the world's supply of water, announced at the World Wildlife Federation's annual meeting in Beijing June 5th. Here is an excerpt from Geenbiz's story on the topic,
"We are focusing on water because this is where The Coca-Cola Company can
have a real and positive impact," said E. Neville Isdell, Coca-Cola's CEO. "Our
goal is to replace every drop of water we use in our beverages and their production. For us that means reducing the amount of water used to produce our beverages, recycling water used for manufacturing processes so it can be returned safely to the environment, and replenishing water in communities and nature through locally relevant projects."

The company estimates that it used 290 billion liters of water in its production
processes in 2006 alone. Less than half of that amount -- 114 billion liters -- ended up in bottles sold by the company. The remaining 176 billion liters were used to rinse, clean, heat and cool during the manufacturing of Coca-Cola beverages.
Clearly Coke is doing this in their own best interest. They make beverages; they need water. Considering the pressures on sources of water globally it's just good risk and operational management to conserve water and cooperate on maintaining watersheds. Coca-Cola is a powerful global brand that would like to improve its place in the market. Considering the comments in The Economist article, Coke has not been performing well lately. Mr. Isdell has much to accomplish to continue the long-term success of the company. Looking at data from Coke starting in 1975, it was a strong performer through about 1989. Since then, it has been lagging the Dow. Why not throw some weight behind what will be viewed as a socially responsible activity that should result in cost savings and better performance.

Every manufactured product uses water at some point in its creation. Eventually, every company will be faced with higher prices for water. The ones ahead of the curve will be the winners.

Sunday, June 17, 2007

Corporate Response

After about one month, and a follow up e-mail message, I received a corporate response on my company's position on sustainable business/CSR. From what I can gather, there is little to nothing in the "corporate mindset" about the topic. There is nothing "bad" about this, just a reflection of where many corporations are. I am confident that I am working for a corporation that has the best intentions and motivations. We just need to cast the net wider in terms of what issues to include in long-term strategic planning.

These are comments I have read in many corporate reports:
  • {Company Name} states its commitment to environmental responsibility, employee safety, and health through its Code of Conduct.
  • {Company Name} has no other statements of policy on these matters at the corporate level.
  • Some {Company Name} divisions have made additional statements on these matters in their local markets, based on requirements or customs in those local markets.

This is compliance rhetoric, again, not something that is illegal or even considered immoral, but is it? Compliance in the best interest of the public depends upon regulations that are made in the best interest of the public. Given the historical unpredictability of "good" regulations, we will all be better served by market-based mechanisms that encourage corporate actions in the best interest of the health of society. This depends upon the redesign of our system of commerce such that resources are not taken, manipulated, and wasted (stolen from future generations) while degrading the natural environment which is the producer of the resources we extract.

This is what I found printed in the user's manual for one of the products:

Correct Disposal of the Unit: When the {product} is finally removed from service, observe all local environmental regulations for proper disposal.

In essence, the producer is renouncing any responsibility for what happens to the product it created and sold. Why is this OK? If a corporation is recognized legally as a person, shouldn't it have some of the same responsibilities? If I have a dog, and that dog bites someone, I'm liable. If a company creates a pollutant and causes damage to people and places, shouldn't it be held responsible? See the previous comments on regulations. In some countries, and states in the USA, this is becoming much more difficult.

Wednesday, June 13, 2007

Reviewing Thermodynamics

Yet another conversation with a friend committed to sustainability, jogged, or should I say hammered home a fundamental element of sustainable business; thermodynamics (or thermo to those fortunate enough to have gone to engineering school). It's all about energy, and there is a finite amount contained within the boundaries of the planet Earth. All we've got to do is harness the incoming solar radiation and we'll be all set.

Laws of Thermodynamics

Energy exists in many forms, such as heat, light, chemical energy, and electrical energy. Energy is the ability to bring about change or to do work. Thermodynamics is the study of energy.

First Law of Thermodynamics: Energy can be changed from one form to another, but it cannot be created or destroyed. The total amount of energy and matter in the Universe remains constant, merely changing from one form to another; it cannot be created or destroyed.

The Second Law of Thermodynamics states that "in all energy exchanges, if no energy enters or leaves the system, the potential energy of the state will always be less than that of the initial state." This is also commonly referred to as entropy. A spring-driven watch will run until the potential energy in the spring is converted, and not again until energy is reapplied to the spring to rewind it. A car that has run out of gas will not run again until you refill the tank.

Entropy is a measure of disorder.

These laws govern every industrial process in one shape or form. The thermodynamic analysis of ethanol production using corn yields a result that makes one wonder why we're doing it if it's supposed to be for "green" reasons. My mistake; it's government yielding to political pressure from constituents in the corn belt.

Sunday, June 10, 2007

May's Business Travel

May was a "flying month", for business and personal reasons. In fact, I managed to contract my first good head cold of the season, something that always seems to happen after flying. I am sure it is not completely the fault of traveling by plane and sharing the same interior atmospheric conditions with 100+ of my closest friends, but it certainly cannot help. Even with my doses of Airborne (how effective is it really? Read this. It's psychosomatic.), I still came down with it on my way back from Champaign, IL.

Business Auto mileage:
863 miles
684 driving alone + 179 miles as a passenger (from 258 "actual passenger miles"; I use my scientific "fudge factor", dividing passenger miles by 2, to obtain my contribution).

Air Travel:
~3000 miles
~2100 miles round trip from Boston to Champaign, IL through Chicago for the ECUW
~900 miles round trip from Boston to Buffalo, NY

Some thoughts on the emerging CO2 offset market here, additionality. In other words, only GHGs from projects that "need" the subsidies our carbon offset payments provide should be counted as offsets. Projects that were done as "business as usual" should not be counted as offsets, since the projects were done anyway. I agree with the premise that we should be encouraging the development of new projects that remove CO2 and other GHGs from the atmosphere, but I can also see the potential to "grandfather" existing projects.

We shall see who the winners are in the long-term.
Lighter Side of Global Warming

I had to take some time to surf YouTube for things related to global warming/climate change. I was reminded of this great segment from Futurama on gloabl warming. Al Gore's An Inconvenient Truth used it to good effect.

This Will Ferrell as George Bush segment from SNL is a good one too.

I never knew that there was more than one global warming, that the sun has been warming the earth's crust for hundreds of years causing more lava flows, that liberal scientists are using "facts" and "scientific data", and that Adam and Eve drove a Ford Excursion.

Some good natured fun to the tune of Grease at Al Gore's expense.

The ultimate indignity; Brits claiming that Christmas is the root cause of global warming!

Friday, June 08, 2007

Warren Buffett's Value Investing for Sustainability

I recently finished reading the Warren Buffett Way by Robert C. Hagstrom. For anyone interested in a fairly understandable analysis of the background of Buffett's incredible success with Berkshire-Hathaway, it's a good read. Given the growing influence of social imperatives associated with allocation of investment capital, understanding more about the world of investing can only be helpful to anyone interested in sustainable business.

I characterize myself as a "ignorant investor". I have scurried away money regularly (omitting a few years from 2001-2006 when I was "lost" in the bike biz) in my 401k and have a selection of long-term investments I rarely look at. Mr. Buffet and other value investors make this point; do your homework...diligently...make a choice, make an investment, and stick with it for the long run. The rarely look at part is in line with Mr. Buffett's thoughts, but the ignorant part is not. What we have not done, which is a great example of consumer inertia or simple hypocrisy, is to investigate the socially responsible investment options out there. There are a number of companies and funds out there that employ various analytical tools to toss out the environmental laggards and focus on the environmental, and/or social, leaders. A few of them are listed in the right hand column.

In any case, Mr. Buffett's investment tenets come down to a basic foundation, the Warren Buffett Way (reading the book might make this more digestible):
Business Tenets:
  1. Is the business simple and understandable?
  2. Does the business have a consistent operating history?
  3. Does the business have favorable long-term prospects?
Management Tenets:
  1. Is management rational?
  2. Is management candid with its shareholders?
  3. Does management resist the institutional imperative?
Financial Tenets:
  1. What is the return on equity?
  2. What are the company's "owner earnings"?
  3. What are the profit margins?
  4. Has the company created at least one dollar of market value for every dollar
Value Tenets:
  1. What is the value of the company?
  2. Can it be purchased at a significant discount to its value?
Even more simply:
  • Step 1: Turn off the stock market.
  • Step 2: Don’t worry about the economy.
  • Step 3: Buy a business, not a stock
  • Step 4: Manage a portfolio of businesses.
So, what does this all have to do with SRI? I don't know, but what I wonder is whether companies that start integrating sustainable business practices into their core operating philosophy will present better long-term value propositions for investing organizations like Berkshire-Hathaway.

I happened to catch an episode of Charlie Rose featuring an interview with Mr. Buffett. It was an interesting conversation. What impressed me about the interview was Mr. Buffett's straight-forward and honest demeanor. He truly enjoys what he does and counts every day as a blessing. One of the topics covered in the interview was our nation's increasing trade deficit and foreign debt. We are essentially transferring assets from our country to other countries. That makes the US less attractive as a place to invest, and is one of the factors driving Berkshire-Hathaway to look overseas for investment opportunities more than ever. Slowly, over the next 20-50 years, our children and grandchildren will be spending more to service that debt.

Can't we also apply that same thinking to environmental debt? We are buying other nations natural resources that cannot be paid back.

For every report on how many billions are pouring into ESG/SRIs, there is another one that addresses institutional investors' antipathy to things climate related or ESG/SRI related. Climate change has 'no influence' on fund managers. With comments like this, you can see why climate change is something too "big" for investors to worry about.
A lack of interest from clients, no clear regulatory framework and the long-term nature of climate change effects were the main reasons cited by the asset managers for their dismissal of the issue. Fiduciary duties dominate investment strategies and, unless there is a specific and immediate event, climate change is not a central concern to asset managers, said the London-based HeadLand Consultancy in its report
One fund manager quoted in the report said: "We are not factoring climate change into mainstream investment risk because it is too long-term." Respondents defined long-term as three years.
Three years. What about the whole children and grandchildren thing?

Boston Based Businesses & Bicycle Retailer Receive Press in Hemispheres

I am not a literary critic, and may be right out of bounds using the term "literary" when describing the advertorial magazines airlines provide "free of charge" for our reading enjoyment. Who am I to judge?

Regardless of these magazines' journalistic credentials, I was recently informed that Boston area small businesses and organizations involved in socially responsible business received some press in United Airlines Hemisphere Magazine. The article, Small Business, Big Impact, highlights he work of Laury Hammel, Michael Kantor, and Don Shaffer with BALLE, Cambridge Local First, and the Sustainable Business Network of Greater Boston.

Laury was one of the first people I met when I started exploring the concept of sustainable business about five years ago. The guy's got crazy amounts of energy and believes he can help change the world.

I also noticed that the article mentions Jay Graves and the Bike Gallery of Portland, OR. This was a little bit of a blast from the past as The Bike Gallery is one of the independent retailers Seven Cycles works with. While I did not work directly with Jay, I knew of their shop and of their activities in the local economy around Portland. It was good to be reminded of my time in the Bike Biz.

Monday, June 04, 2007

Simmons School of Management "Sustainability: Creating a Livable Future"

I jumped on the bus in Waverly Sq. and headed into Boston for a NetImpact event courtesy of the Simmons School of Management chapter. The list of speakers included Ben Anderson of Recycline (one of my favorite local small businessed working to "close the loop"), Ed Costa and Mark Rashid of Hewlett-Packard Financial Services, and Ruksana Mirza of Holcim. Chris Landry of the Sustainable Food Laboratory in Hartland, VT was scheduled to appear as well, but could not make it due to what we could only assume was travel related problems.
There were no anti-capitalist rhetoric from the students (nor was it expected), no hand-wringing apologies about the massive impact of corporations on the planet we all share, just some good ol' matter-of-fact discussion about what these companies are doing to address the needs of their stakeholders and shareholders. Despite all the feel good energy held in the room, the reality is that none of the companies there are doing enough to reverse the current trend of extractive business practices that take carbon from the earth and deposit it in the atmosphere. Don't get me wrong, these companies are making stepwise progress toward restorative business practices, but as Paul Hawken said in the very first section of The Ecology of Commerce, written in 1993 [the book that helped Ray Anderson, CEO of Interface, realize that they have a moral responsibility to preserve the environment]
...but, in the end, the impact on the environment was only marginally different
than if we had done nothing at all. The recycled toner cartridges, the sustainably harvested woods, the replanted trees, the soy-based inks, and the monetary gifts to nonprofits were all well and good, but basically we were in the junk mail business, selling products by catalogue. All the recycling in the world would not change the fact that doing business in the latter part of the twentieth century is an energy intensive endeavor that gulps down resources.
I suppose the meetings and conferences are all part of the process. We have to start somewhere and redefining the very nature of commerce is not something that the establishment will take lying down. There is too much as stake, too much power centrally gathered to just let the masses change the way business is carried out.
Despite my misgivings about what sustainable business is becoming (that it is not enough), I still enjoyed the evening, and especially enjoyed meeting people striving to make a positive impact. These people are working in the trenches on the issues, and I am certain that working to make a global cement manufacturer sustainable (though Mr. Hawken would argue that it cannot be done in our current system) is no easy task. In fact, if we did not have people interested in making some form of change or impact, where would we be?
The question I had for Ms. Mirza, that I did not get to ask; how many people are involved in environmental health & safety, sustainability, and CSR for a global company with 90,000 employees and $18.7 billion in revenue? How about sustainability & CSR? Hundreds? Holcim is a Swiss company, so is Mettler-Toledo, the company I work for. Our revenue is roughly one tenth that of Holcim's. What is the climate change and/or energy volatility risk for MT compared to Holcim? Is it an issue? Certainly the regulatory risks are more immediate for a company in an energy intensive industry like making cement, but it will effect all companies regardless of size eventually. Shouldn't we be ready for it?

Friday, June 01, 2007

The Unreasonable Man...Curbs CO2 Emissions?

I robbed this from the title of a chapter in The Warren Buffet Way (more on Mr. Buffet later). The opening of the chapter quoted George Bernard Shaw,
The reasonable man adapts himself to the conditions that surround him... The unreasonable man adapts surrounding conditions to himself... All progress depends on the unreasonable man.
Are the people that protest about the unsustainable growth of our capitalist economies the unreasonable men? Was the United States the Unreasonable Man on the global stage by staying away from the Kyoto Protocol, due in some part to the fact that emerging economies like China and India were left out of that global agreement? I am not well versed in Mr. Shaw's thinking, but I tend to believe that Mr. Shaw's comment can apply to a nation acting singularly in a community of nations. I am also not an expert on the intricacies and vagaries of the Kyoto Protocol, and the US's reasons for not ratifying it back in 1997 and completely pulling out of it in 2001.

Despite a 10-year waiting period for our concerted action, are we now at least moving in the right direction? George Bush announced a plan today to gather the world's leading economies together to establish global CO2 emissions reduction targets. This is big news, covered in headlines in the NYTimes, Reuter's Interactive Carbon Market, Greenbiz, The Economist, MSNBC & many more.

Under pressure from domestic and international leaders, Mr. Bush has proposed some action, (from the NYTimes)
Mr. Bush pledged to convene a series of meetings, beginning in the fall, with 10 to 15 countries that produce the most greenhouse gas emissions, including China and India. Each country would establish midterm national targets for reducing emissions over the next 10 to 20 years, while working together to set a longer-term goal.
The talks also would bring together industry leaders, Mr. Bush said, so that the countries could work together to pool their knowledge and promote investment in energy-efficient technologies, including solar and wind energy, clean-coal technologies and nuclear power. But each country would be free to set its own national goals, and there would be no binding international framework for enforcement.
The last sentence is the killer. There's an out. What's the point? If there is no concerted and binding agreement it's all a cornucopia of feel good conversations to make political leaders look like their taking action. In fact, with climate change quickly becoming a hot topic for the 2008 election cycle it is clear that President Bush is making these statements for the benefit of the Republican Party. After all, they cannot let the Dems have all the environmental attention. As with any good political party, they pay attention to data from polls that may indicate there are enough voters that care about "climate change" for them to take a stand on it.
Despite my skepticism about this effort, I am happy to see that something has been said on the federal level. The current state and regional patchwork of regulations addressing GHG emissions and renewable energy portfolios will not spur the kind of clean energy technology investment that we need to attach our excessive CO2 emissions.
The EPA will regulate CO2 emissions as the FDA regulates prescription drugs. The agency will also help establish a global carbon footprint label for every product manufactured. When consumers and businesses are paying something more closely resembling true costs for energy, they'll want to know how much CO2 is in the product they are buying; it will affect the price they pay.