Tuesday, December 30, 2008

What if Investments Were Guided by Morals?


What if every dollar we spent directly reflected of our beliefs and values?
What if budgets truly reflected internal beliefs?
What if we took the actions recommended by our words?

They are and we do.

These thoughts were prompted by a friend's message including the article Aligning Foundation Investing and Mission from CSRWire posted below. It seems that Foundations, with all their millions and billions have the opportunity to make a much bigger impact than they already are. Here's what I wrote (NOT fact checked) back to my friend, with the CSRWire news item posted below (image from responsible-investor.com).

My wife and I were just talking about this a few days ago. Seems that if I put my cynical hat on, one could argue that foundations are elaborate schemes to create cushy jobs for friends & family (think Blagojevich in IL [am I assuming he's guilty?]). They give out a small percentage of their assets and keep growing their capital. If we're intellectually honest (IMHO) foundations' missions should predict their demise...either they solve the problem (or make some predefined metrics of success) by investing massively, or they move on. Of course, this is heresy in the non-profit world. Dan Pallotta just released a book that pillories the charitable fundraising world for hamstringing themselves with outdated morals around how one can raise money. Isn't the desired result to solve a problem? If it is, then let's use the best available tools to do it.

If we take a step back and think about where these foundations invest, it is completely possible that they are underwriting the problems they are "trying" to solve. I wonder how many foundations are members of CERES? One large group of institutional investors influencing corporate behavior are state pension funds...I believe CalPers and CalTrans are the big players. Could foundations join the chorus en masse as well (if they already have not)?
Here's the CSRWire article:
What's the most ironic aspect of the Bernie Madoff Ponzi scheme fraud? The fact that fellow fraudster Henry Blodget (busted for pumping tech stocks and mocking his clients’ gullibility) maintains the most accurate list of its victims? That billionaire celebrities such as Stephen Spielberg lost millions? No, it's the fact that foundations, such as Spielberg’s Wunderkinder Foundation as well as the Elie Wiesel Foundation for Humanity, invested with Madoff and thus compromised their mission work. The silver lining may be that it shines the spotlight on foundation investing, which typically accounts for 95 percent of endowment assets but receives scant attention compared to foundation grant-making, which typically accounts for a mere 5 percent of assets.

Steve Viederman has been highlighting the need for foundations to align their investments with their missions for years. As early as 1995, when he was President of the Jessie Smith Noyes Foundation, he advocated for reducing (and eliminating) the dissonance between foundations’ grant work and their investment portfolios. Now, more than a dozen years later, he continues to crusade, characterizing foundations as "old-fashioned slot machines: They have one arm and are known for their occasional payout."

"Think of how much more bang for the buck foundations would achieve if they used both of their arms - the 5 percent making up the grants, and the investable capital that makes possible the grants - the 'other' 95 percent," Viederman writes. "By not using both arms, by failing to use all of their resources in support of their missions, foundations are failing to meet their fiduciary duty."

The More for Mission Campaign, launched at the April 2007 Council of Foundations Annual Conference, challenges foundations to get both their arms working in concert. The Campaign encourages foundations to increase their mission investments by at least 2 percent of total foundation assets over the next 5 years – a potential shift of $12 billion. The Campaign (formerly known as the "2% Campaign" for obvious reasons) has enlisted the Boston College Institute for Responsible Investment to house a Resource Center to help foundations make the alignment. And the Campaign's Leadership Committee of 24 foundation CEOs representing almost $19 billion in assets is actively urging fellow foundations to jump on the wagon.

Perhaps the greatest irony of all is that, after a half-decade of ambitious work, the participating foundations will only have 7 percent of their assets (5 percent grant-making and 2 percent mission investing) assuredly working toward their missions, leaving the remaining 93 percent potentially undermining their missions. At this rate, it would take participating foundations a loooooong time to fully align their money with their missions.

This article was written by CSRwire contributor Bill Baue

And I go back to what I posted at the top, "what if...?"

Thursday, December 25, 2008

It's a Wonderful Life


The messages in this classic Christmas-time heart-warmer are so inescapably appropriate for where we are in the economy it's simply astounding. When you watch it this year, pay attention to the elements surrounding the Bailey Building & Loan.

In a nutshell; Small local building & loan company lending to people within the community, knowing people by name, knowing their character so that the loans will be paid back...amazing. Imagine if we were doing more of that instead of packaging debt instrument vaporware for sale thirty times over?

The film reinforces our ownership society; "owning" your own home is something the Bailey business supports. Bailey Park, a small suburban development featured in the movie populated with modest homes financed by the Bailey Building & Loan is the perfect example of this ideal. Of course the Bailey's were helping lower income families get out of the awful conditions and exorbitant rent of Potter Flats (Potter is the old curmudgeon banker that would prefer to own the entire town of Bedford Falls where the movie takes place). Were they making sub-prime or alt-A mortgages in the 40's? Neither I assume...

There is an interesting scene that we can learn from, it's when George & Mary are trying to leave for their honeymoon and a run on the bank starts (it's the early 1930's). George goes into the building & loan and convinces the customers (he knows them all by name, imagine that!) to only withdraw the money they need to tie them over; most of the customers heed his advice. George explains that the money is not really there, the money deposited has been lent to other members of the same community to help them buy houses. The members of the community are supporting each other, the building & loan is merely acting as the agent connecting them all.

This is exactly the opposite of what happened with the packaging of mortgage backed securities. People were far, far removed from the origin of the loan, and therefore their assessment of the risks associated with the loans (especially the high risk ones that probably should never have been written) was practically impossible to determine.

So, taking a comment from Michael Shuman speaking to the Commonwealth Club of California on November 5, 2008; one of the solutions to the extraction of capital from communities is to keep lending connected to place. Makes sense to me.

So at this happy time of year, surrounded by friends and family, watch "It's a Wonderful Life" with a slightly different set of lenses and see what you might learn about community finance.

Sunday, December 14, 2008

Tracking the Bailout


I just have to say that my belief structure is being unwound as quickly as our capital is being drained...

Tracking the Bailout

Some excerpts:

EMMA COLEMAN JORDAN: The belief system was one in which he believed that by fixing the problem at the top, by giving the money with trust to his peer institutions on Wall Street, the money would trickle down in the form of lending to consumers and businesses. And the economy would be restored. And so that way of thinking dominated his decision making, slowed things down.
The facts that were clearly on display were simply ignored. And I'm giving Secretary Paulson credit for being a very smart man. I believe that the delays were caused by pre-commitments to an economic belief system that has been turned on its head by this crisis.
BILL MOYERS: The ideology is that trickle-down economics will work and that the market will eventually correct the excesses? Is that what you think that ideology is? That's the bubble they live in on Wall Street, right?
EMMA COLEMAN JORDAN: It's that confluence of belief, the Federal Reserve, the Department of the Treasury, and the White House, all believing that the markets would correct. So that in the year between August of 2007 and September of 2008, we had a natural experiment. And the natural experiment was the markets did not correct. They crashed and burned. And as a result, the government had to come in to rescue with the taxpayers' dollars.
BILL MOYERS: What about this cover story on this current issue of "The Atlantic"? "After the Crash: China to the U.S., 'Shape Up or Else.'" What's going on there?
EMMA COLEMAN JORDAN: What's going on is a change in the power relations, and we're seeing that the countries who have savings like China are now asserting themselves to tell us to reform our debt dependent ways, both in the public sector and the private sector. They have been financing this. China is the largest purchaser of U.S. Treasuries and other securities, government-related and securities.
BILL MOYERS: They're saying live within your means, right?
EMMA COLEMAN JORDAN: Live within your means. Your credit line has been reduced.
There is so much in this interview, I do not know where to start and where to stop.

Thursday, December 11, 2008

What Does GDP Really Measure?


Remember GNP (Gross National Product)? How is that different from GDP, and why is that important? I am curious to investigate the difference further as a classmate of mine planted the seed in my mind that GDP includes many of the intangible assets that contributed to our current state of economic affairs and that were not included in GNP. Which one is therefore a better measure of the real potential of an economy?

What does GDP really measure? One of my classmates phrased it quite well, I summarize here,
...GDP measures dependency. The more dependent we are on others for goods/services the more commerce and economy experience and the greater growth of GDP we will see. Independent, self-sufficient people participate in cultural & community commerce and not nearly as much in the financial world alienated from the barter system. Our culture as it stands depends on the story of dependency. In my experience, it is a crime to take and effective stand against it - yet it embodies the essence of what life is worth living for.
Whew.

Maybe the Genuine Progress Indicator's time has come to be brought into the mainstream of economic and social thought? It makes sense to me that we weight things based upon their ability to increase or decrease the health of the human body & spirit:

The GPI starts with the same personal consumption data that the GDP is based on, but then makes some crucial distinctions. It adjusts for factors such as income distribution, adds factors such as the value of household and volunteer work, and subtracts factors such as the costs of crime and pollution.

Because the GDP and the GPI are both measured in monetary terms, they can be compared on the same scale. Measurements that make up the GPI include:

Income Distribution
Both economic theory and common sense tell us that the poor benefit more from a given increase in their income than do the rich. Accordingly, the GPI rises when the poor receive a larger percentage of national income, and falls when their share decreases.

Housework, Volunteering, and Higher Education
Much of the most important work in society is done in household and community settings: childcare, home repairs, volunteer work, and so on. The GDP ignores these contributions because no money changes hands. The GPI includes the value of this work figured at the approximate cost of hiring someone to do it. The GPI also takes into account the non-market benefits associated with a more educated population.

Crime
Crime imposes large economic costs on individuals and society in the form of legal fees, medical expenses, damage to property, and the like. The GDP treats such expenses as additions to well-being. By contrast, the GPI subtracts the costs arising from crime.

Resource Depletion
If today’s economic activity depletes the physical resource base available for tomorrow, then it is not creating well-being; rather, it is borrowing it from future generations. The GDP counts such borrowing as current income. The GPI, by contrast, counts the depletion or degradation of wetlands, forests, farmland, and nonrenewable minerals (including oil) as a current cost.

Pollution
The GDP often counts pollution as a double gain: Once when it is created, and then again when it is cleaned up. By contrast, the GPI subtracts the costs of air and water pollution as measured by actual damage to human health and the environment.

Long-Term Environmental Damage
Climate change, ozone depletion, and nuclear waste management are long-term costs arising from the use of fossil fuels, chlorofluorocarbons, and atomic energy, respectively. These costs are unaccounted for in ordinary economic indicators. The GPI treats as costs the consumption of certain forms of energy and of ozone-depleting chemicals. It also assigns a cost to carbon emissions to account for the catastrophic economic, environmental, and social effects of global warming.

Changes in Leisure Time
As a nation becomes wealthier, people should have more latitude to choose between work and free time for family or other activities. In recent years, however, the opposite has occurred. The GDP ignores this loss of free time, but the GPI treats leisure as most Americans do—as something of value. When leisure time increases, the GPI goes up; when Americans have less of it, the GPI goes down.

Defensive Expenditures
The GDP counts as additions to well-being the money people spend to prevent erosion in their quality of life or to compensate for misfortunes of various kinds. Examples are the medical and repair bills from automobile accidents, commuting costs, and household expenditures on pollution control devices such as water filters. The GPI counts such "defensive" expenditures as most Americans do: as costs rather than as benefits.

Lifespan of Consumer Durables & Public Infrastructure
The GDP confuses the value provided by major consumer purchases (e.g., home appliances) with the amount Americans spend to buy them. This hides the loss in well-being that results when products wear out quickly. The GPI treats the money spent on capital items as a cost, and the value of the service they provide year after year as a benefit. This applies both to private capital items and to public infrastructure, such as highways.

Dependence on Foreign Assets
If a nation allows its capital stock to decline, or if it finances consumption out of borrowed capital, it is living beyond its means. The GPI counts net additions to the capital stock as contributions to well-being, and treats money borrowed from abroad as reductions. If the borrowed money is used for investment, the negative effects are canceled out. But if the borrowed money is used to finance consumption, the GPI declines.


With market reports that focus on things like this, I wonder what we really are measuring
The Cancer Market Outlook to 2013 (Business Insights): The global cancer market generated sales of $56.7bn in 2007, representing a 16.8% increase over 2006 sales, and is forecast to increase by a CAGR of 5.1% over the period 2007–13 to reach sales of $76.9bn.
So, cancer treatment increases GDP...

Wednesday, December 10, 2008

Thermodynamic Economics


What would a new economy that values increases in social wealth as much as increases in material wealth look like? What kind of an economy takes into account the Laws of Nature, the fundamental scientific tenets of thermodynamics? This, The Center for the Advancement of the Steady State Economy?

What a second...I think I just found some nice relaxing reading for the holiday break, something to integrate my engineering background with a desire to think about economics in a whole different way;

Thermodynamic accounting of ecosystem contribution to economic sectors with application to 1992 U.S. economy
Nandan U Ukidwe, Bhavik R Bakshi. Environmental Science & Technology. Easton: Sep 15, 2004. Vol. 38, Iss. 18; pg. 4810
Abstract (Summary)
Incorporation of ecological considerations in decision-making is essential for sustainable development, but is hindered by inadequate appreciation of the role of ecosystems, and lack of scientifically rigorous techniques for including their contribution. This paper develops a novel thermodynamic accounting framework for including the contribution of natural capital via thermodynamic input-output analysis. This framework is applied to the 1992 US economy comprising 91 industry sectors, resulting in delineation of the myriad ways in which sectors of the US economy rely on ecosystem products and services. The contribution of ecosystems is represented via the concept of ecological cumulative exergy consumption (ECEC), which is related to emergy analysis but avoids any of its controversial assumptions and claims. The use of thermodynamics permits representation of all kinds of inputs and outputs in consistent units, facilitating the definition of aggregate metrics. Total ECEC requirement indicates the extent to which each economic sector relies directly and indirectly on ecological inputs. The ECEC/money ratio indicates the relative monetary versus ecological throughputs in each sector, and indicates the relationship between the thermodynamic work needed to produce a product or service and the corresponding economic activity. This ratio is found to decrease along economic supply chains, indicating industries that are higher up in the economic food chain price ecosystem contribution more than the basic infrastructure industries such as mining and manufacturing. The ratio of CEC with and without inclusion of ecosystems indicates the extent to which conventional thermoeconomic analysis underestimates the contribution of ecosystems. Such ratios, made available for the first time, provide unique insight into the importance of natural capital, and are especially useful in hybrid thermodynamic life cycle analysis of industrial systems. The approach, data compiled in this work, and the resulting insight provide a more ecologically conscious tool for environmental decision-making, and has potential applications at micro as well as macro scales.
The currency of the future may be more overtly energy based, or perhaps backed by carbon. I suppose it already is, but the carbon is undervalued or its contribution is misunderstood.

Wednesday, December 03, 2008

2009 Harvest New England Conference Announced


Harvest New England has announced that its 2009 Agricultural Marketing and Trade Show will be held February 24 - 26 at the Sturbridge Host Hotel in Sturbridge, MA.


“This conference is an excellent opportunity for agricultural producers to learn from some of the finest experts in the field about a diverse range of marketing topics,” said Robert Pellegrino, President of Harvest New England and Director of Marketing for the CT Department of Agriculture. “Our last conference attracted over 700 producers from all over New England, who provided extremely positive feedback about the event. We have taken their comments and incorporated them into our planning to make this conference even better.

Two pre-conference workshops – to cover farmers’ markets and agritourism - will be held on Tuesday, February 24. The main event kicks off Wednesday morning, February 25, with “The Best of New England” session, featuring a panel of the industry’s stars from each of the six states. Mel Allen, Editor of Yankee Magazine, will charm attendees on Thursday morning with stories amassed over the years through his work at the popular publication

Twenty breakout sessions, an optional half day of farm tours, and a trade show that is expected to draw over 100 vendors, will round out the event. Topics to be covered include working with local officials, website development, community-supported agriculture, virtual marketing, cooperatives, energy conservation, and much, much more

Harvest New England was created in 1992 by the Departments of Agriculture in the states of Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, and Maine. The organization’s original objective was to encourage the sale of New England produce to and through large supermarkets.

Over the past 16 years, Harvest New England has grown and diversified to meet the changing needs of New England producers and consumers. Although fresh local produce remains a primary focus, Harvest New England also promotes products such as meat; poultry; seafood; dairy; eggs; honey and maple syrup; specialty foods; greenhouse and nursery plants; Christmas trees and greens; and farm-produced fiber and fiber products. For more information about Harvest New England and the 2009 Agricultural Marketing Conference and Trade Show please visit:

www.harvestnewengland.org.

Saturday, November 29, 2008

Alternative Work Week


Ultimately, the move to a regenerative economy is about creating alternatives to the existing system of dependence upon fossil fuels and the companies that use it. It's about reassessing our relationship with consumption and our relationship with the communities and world we inhabit. It's about rethinking what it is we are doing and what we are striving for.

In that spirit, I have found myself thinking back to the project work I did last spring in economics centering on The Overworked American by Juliet Schor. Two partners and I used the book as a basis for analysis of why Amercian's are overworked. During that project, we came across articles highlighting the 30 hour work week Kellogg's instituted in Battle Creek, MI starting December 1, 1930, right as The Great Depression began. I was amazed to learn about this development, and quite frankly amazed that the idea of working less hours per week was so foreign to me, so strange a concept. Yet, when I paused to think about it, and reflected upon some of the comments in the article, I thought this was the best idea ever. We could employ more people, for less time, with the same overall output. There would be more time for family and friends, for engaging in the givernance of our cities, towns, and nation. Wow! Now that I think of it, is it possible to actually reduce the overall output (heresy!) to better match the refocusing of consumer spending?

As we grapple with what the United States economy will look like (and honestly, what our collective self image will be) without US based automakers, are we faced with two great opportunities?
  1. How might we use the excess capacity of the massive industrial complexes (supply chains, facilities, etc.) that is the auto industry in new, green, and growth-related industries?
  2. How may we reassess what it is to work, and perhaps adopt the lessons learned 80 years ago from Kellogg's to keep more people employed and gainfully engaged in our economy?
A recent article in the NYTimes helped me think about the first question. I am happy to see that regions are creatively looking at their human and built manufacturing assets and redeploying them in the "new economy". Here's an excerpt:
Larry Crady, a worker, takes particular pleasure in seeing the finished product overhead, a broad grin forming across his goateed face. He used to run a team that made coin-operated laundry machines at Maytag. Now he supervises a team that lays down fiberglass strips between turbine moldings. He runs his hand across the surface of the next blade for signs of unevenness.
“I like this job more than I did Maytag,” Mr. Crady says. “I feel I’m doing something to improve our country, rather than just building a washing machine.”
I love to read comments like this. I know that I have fallen into the trap of believing that people generally do not care - they're not enrolled - in the work they do; it's merely a paycheck, a means to the end of providing for the needs and wants of a person and a family. In reality, we are connected to what we do; in many cases people engaged in trades may have a deeper connection with what they make. Imagine the power ion engaging disenfranchised workers in something that can provide a decent living and contribute to a regenerative future for our children and grand children. What power!

Wednesday, November 26, 2008

Wal-Mart Celebrates Thanksgiving by Sourcing Local Food, Supporting Hunger-Relief, and Buying Wind Power


The story below is taken from the CSRWire newsletter, and again, as with my previous post regarding Coke & Coca-Cola Enterprises, seems appropriate for me to notice as I heard Wal-Mart's VP of Sustainability, Matt Kistler at the Net Impact Conference a few weeks ago.

One of my readers (thank you Dave!) took me to task for being too anti-Wal-mart in a
previous post. I suppose I was pounding the cliche drum of suspicion about their activities; clearly looking at the glass as half-empty. This little news blurb illustrates some of the things Wal-Mart is doing that can be viewed as positive. I italicized the section on local food sourcing as I have become quite interested in this topic and its influence on local economies, in fact, I am doing my BGI marketing course work in association with Green City Growers here in Boston (they come to your house and build you a backyard farm and maintain it for you).

Last week's sudden news of Wal-Mart CEO Lee Scott handing the reins over in February 2009 to Mike Duke, the company's head of international operations, raised questions on how the new leader will steer the discounter's sustainability initiatives, which have met praise and skepticism. Duke has gone on record saying that "Wal-Mart and our supplier partners must operate in a more socially and environmentally responsible way wherever we do business ... we at Wal-Mart are also committed to being a leader on sustainability." Using its vast size to influence entire supply chains to its advantage - the very practice that skeptics criticize as "bullying" - Wal-Mart is now leveraging this muscle to shift markets toward greener practices.

Seizing on the spirit of Thanksgiving, for example, Wal-Mart highlights its increasing local produce sourcing - its buyers use "Food Mile Calculators" to cut down on carbon emissions while also supporting the communities in which the company operates. Wal-Mart customers can buy local pumpkins in more than half the US states, local apples in more than a third, and local sweet potatoes in a seventh. Skeptics such as Grist Columnist Tom Philpott point out that Wal-Mart's definition of "local" may include entire states: "That definition might shine in smallish states like, say, Vermont. In large states like Texas and California, it begins to lose luster." That said, Philpott welcomes Wal-Mart's influence if it leads to a regional food distribution system that supports mid-sized farms, instead of continuing to industrialize the food chain.

In this holiday of food abundance, Wal-Mart is also using its size to support America’s hungry. The company is donating some 90 million pounds of food annually - about 70 million meals - to the largest hunger-relief charity, Feeding America, by the end of 2009. On top of this, the Wal-Mart Foundation is donating $2.5 million to help Feeding America buy 20 new refrigerated trucks for transporting food to the agency's food pantries and soup kitchens, which are experiencing between 15 and 50 percent rises in demand for food.

Perhaps most significantly, Wal-Mart is continuing its march toward the goal of being powered completely with renewable energy by sourcing up to 15 percent of electricity needs in its 360 stores in Texas with wind power. The estimated 226 million kilowatt-hours of renewable power produced will keep over 139,000 metric tons of global warming carbon dioxide out of the atmosphere each year - the equivalent of taking about 25,000 cars off the road. It also creates green jobs for supplier Duke Energy to build its new wind farm in Notrees, Texas. And here again, Wal-Mart's action creates cascading impacts by boosting the clean energy market and setting an example for other companies to follow in committing to renewables.

Wal-Mart's biggest challenge is to reconcile its continuing growth with its sustainability intentions. Its overall direct emissions of carbon dioxide equivalent (which factors other greenhouse gas emissions in addition to CO2) rose more than 100,000 metric tonnes from 2006 to 2007, according to its Carbon Disclosure Project response. Wal-Mart is working very hard to deliver on Lee Scott's assertion last year in the company's 2007 Sustainability Progress report of "being a more sustainable business." What remains to be seen is if Wal-Mart can remove the "more," to become a truly sustainable company.


Disclosure: CWRwire contributing writer Bill Baue wrote Wal-Mart's Sustainability Progress report in 2007.
I appreciate the conundrum acknowledged at the close of the article; How does Wal-Mart reconcile its continuing growth with its sustainability intentions?

Water Conservation and Coca-Cola


Considering the time of year (what will those pesky Polar Bears be up to this year?), and the fact that I heard the CEO of Coca-Cola Enterprises regale us with their activities in the realm of water conservation at the Net Impact Conference a few weeks ago, I thought this article about Coca-Cola's sustainability reporting was interesting. Remember Coca-Cola (Ticker: KO) and Coca-Cola Enterprises (Ticker: CCE) are two different entities; completely separate.

So the question I have: What kind of a halo effect (or pitchfork effect, depending upon the direction one is looking) do the organizations have upon each other? Does the "goodness" of CCE cancel the "badness" of KO (we're in shades of gray here) or vice versa? Their sites are similar, their logos are similar, the product they make & deliver are closely related.

Do they share board members?

The point, Ethical Corporation is taking Coca-Cola to task for some inconsistencies in their carbon reporting.
The global drinks giant fumbles its carbon figures
The Coca-Cola Company has been around for more than 130 years, operates in over 200 countries and markets more than 2,800 sparkling and still beverage products. Sales last year were more than $28 billion, achieved through serving up products to customers at an astonishing 1.5 billion a day. It owns four of the world’s top five non-alcoholic sparkling beverage brands namely: Coca-Cola, Diet Coke, Sprite and Fanta. With the release of its latest sustainability review last month we aim to find out whether this giant of the soft drinks industry is also leading the way in addressing climate change.

Coca-Cola states its climate strategy as: “working to grow our business but not the carbon emissions of our manufacturing operations”. This doesn’t sound like a particularly ambitious goal but even so Coca-Cola is not currently achieving this. In 2007, greenhouse gas emissions totalled 4.92 million metric tons of carbon dioxide, an increase of 0.06 million metric tons from 2006. Rather confusingly, this figure doesn’t match up with that given in its response to the Carbon Disclosure Project (CDP) – where direct emissions (scope 1 and 2) total 7.2 million metric tons. Whichever figure is correct they both show that, unsurprisingly for one of the largest companies in the world, Coca-Cola has a sizeable climate impact, and currently this is not decreasing.

Although an overall carbon footprint is given, the emissions sources included are not clearly specified. In fact Coca-Cola reports little in the way of quantitative data. The headline figures show that there was a 4% increase in energy efficiency last year however this merely cancelled out the 4% decrease the year before - so essentially the ratio of megajoules/litre of product has not improved for the last three years. No further information is given on how the energy consumed in Coca-Cola’s plants is generated – neither is there any information on the corresponding carbon emissions of this energy use.

The Coca Cola company does not own or control most of its bottling partners, which produce and distribute around four fifths of the total volume of Coca-Cola brands. This illustrates the much larger indirect impact the company has. Coca-Cola does produce its own Supplier Guiding Principles for its suppliers, that include “responsible environmental and workplace policies and practices”. But the extent to which these focus on climate change is not clear. No data at present appears to be collected on the climate change impact of either Coca-Cola’s suppliers or partners. Unlike its rival Pepsi-Co, it is not part of the CDP’s Corporate Supply Chain programme. However, in collaboration with the Carbon Trust, Coca-Cola is working on establishing a product carbon footprint.
View the rest of the article HERE.
  • What does this mean to Coca-Cola Enterprises?
  • What does this mean to shareholders?
Happy Thanksgiving.

Monday, November 24, 2008

Postcard from a Slaughterhouse


Sounds good, right? Well it just so happens that Joe was a classmate of mine (for a little while anyway...he took off to buy the farm...no...really) and he's been helping me think about the distribution network for locally produced food. The rest of this post is directly cross-posted from Chewswise. I wish Joe the best of luck in recreating the local market for grass raised meat in his area (image from wallpapers.free-review.net). I know I can learn from him.
As owner/operator of a small local slaughterhouse, I see a lot of pigs over the course of a month. Some of them are raised in industrial operations in Pennsylvania. We buy them to make sausage in my plant. The rest are brought in by small farmers from all over Virginia to be slaughtered and processed for sale in farmer's markets, at restaurants, and directly to consumers.

The pigs all spend a day to several weeks in the humble little barn behind my plant. The moments when I go out to feed and water them are among the best parts of my day. Alone in the cobwebby old structure, I talk to them, bring them their corn ration, and take a moment to just watch them being pigs. I like to touch the pigs while feeding them -- lay a hand on a round hip, feel the warmth and the coarse bristle against my skin. Perhaps this is strange, knowing we will soon take their life, but I appreciate the sense of connection. This morning it was cold, and I had to smile looking at a pile of Joel Salatin's Polyface pigs peacefully sleeping in a big pile to keep warm.

It is fun to step into a pen full of hogs – and informative. Joel's little pig dudes run up eagerly like curious dogs, and immediately cover your legs with inquisitive round snouts checking out the smells. No fear or shyness here. They run and jump around, snuffeling excitedly. Black, tawny, red, spotted, their coats literally shine with health. Glossy bristles give their bodies a bright sheen.

But when I step into a pen of industrial hogs, the atmosphere is completely different. Sunk in a sleepy torpor, they lack awareness, and they startle with alarm. When you surprise a pig, they bark like dogs and scurry mindlessly around. Perhaps I should say hobble – many of them limp. Raised on hard concrete, their feet and joints are malformed, and they live in pain. The deep sawdust in my barn is the best they have ever had. Their white flanks and shoulders are covered with bloody scrapes – they have been fighting, working to establish their dominance hierarchies in middle age. Unlike Joel's hogs who are raised together in their little band in the woods, the industrial hogs have no sense of a pecking order because they have not grown up together.

We'd like to process hogs from small local farms, but that isn't an option right now. There aren't enough hogs raised locally. We bought a going concern with two dozen employees and customers to take care of. But the hope is to build these new local markets. Then maybe all the hogs out in the barn will be like Joel's. One day.

Friday, November 21, 2008

Net Impact Closing - Celebrating (ahem!) Wal*mart


The closing keynote last Saturday (image from fastcompany.com) with Matt Kistler Senior VP of Sustainability was less of an engagement with the mass of students at the conference than what seemed like a coronation of Wal*mart as the King of Sustainability. Make no mistake, Wal*mart's status as the 800 pound guerrilla of, well, everything makes their actions that much more attention getting. Yet, I cannot help but think that the conversation is still about maintaining a system that is inherently unsustainable by making it "less bad" than by reinventing a regenerative economy that restores ecosystems while invigorating humanity.

But I digress. Seriously, I was disappointed again by the fact that the session with Matt was about 1.5 hours and the moderator allowed time for all of three questions from the audience. The first 10 minutes or so was a love-fest for Matt, with joking and joshing like we were on the set of the Late Show with David Letterman. Maybe I am sounding a bit like a sour puss here, but the mind-share Wal*mart received over the course of the NI event was a little too much for me to bear, and I expected some tougher questions about how all these great things were really going to happen. There seemed to be way too much back-slapping when the baby steps taken are only the barest of beginnings. He's a good spokesman for the greening of the company

Moving on. I am sure they rehearsed what they were going to talk about, and the danger of allowing freeform questions to hit Matt (whose background is more on the management side than the technical side of "sustainability"), potentially leading to a foot-in-mouth moment with smart and savvy green leaning MBAs was certainly real. Yet, I cannot help but think that a tremendous opportunity for open and honest conversation was lost.

Some of the things Wal*mart committed to in 2006, taken from a USAToday article;
• Slash gasoline use by its trucking fleet, one of the largest in the USA, and use more hybrid trucks to increase efficiency by 25% over the next three years and double it within 10 years. That will save $310 million a year by 2015, the company says.
• Buy 100% of its wild-caught salmon and frozen fish for the North American market only from fisheries that are certified as "sustainable" by the non-profit Marine Stewardship Council within three to five years. That designation means areas of the ocean aren't fished in ways that destroy fish populations.
• Cut energy use at its more than 7,000 stores worldwide by 30% and cut greenhouse-gas emissions at existing stores by 20% in seven years. Wal-Mart is the largest private electricity user in the USA.
• Reduce solid waste from U.S. stores by 25% within three years.
There were a few other things Matt mentioned in his talk, great things that Wal*mart has committed to, and I am curious how they are tracking their performance; did not get a chance to ask that question. I suppose I could dig through their sustainability report...

Wednesday, November 19, 2008

Net Impact Session 5: "Green to Gold: For Profit Business Consulting"


This session was packed. I mean packed. There must have been close to 200 people in the room designed for maybe 170 or 180. With an event attracting current and future MBAs that may have a leaning toward consulting, and two members of the BGI community on the panel, can they be blamed? I snapped this image of a fallen leaf's shadow on the sidewalk near CVS in Belmont, MA.

As with some of the other events (some written about already, some yet to come) I was disappointed that the time left for these ~200 people to engage with the panel was limited to 5 minutes at the end of an hour-and-a-half session. The best learning comes when the lectures stop and the conversation starts. It was a missed opportunity

Here's an overview of the session.

Moderator Intro:
Large consulting firms, like McKinsey, PriceWaterhouseCoopers etc. are getting into the game. Boutique firms like Natural Logic were the founders in this space and may be swallowed up over the next few years by the big boys.

Services range from management consulting, organization re-engineering (supply chain, etc.), communications (brand, values), and technical areas (environment, waste management), pretty much all things related to "green".

If you combine tech expertise with MBA, you're better placed to make an entree into this space, which might explain why there were so many people in the room.

The panelists took some time to introduce themselves and provide an overview of what their respective consultancies do

Jessie Alan | Sustainable Business Consulting
Jessie's one of my classmates at BGI, and is a perfect example of the broad background that can bring people to consulting, especially in the sustainability space. Her undergrad degree came from the School of Forestry at Michigan and she was an unabashed non-profit corporation hater before realizing business may have something to say in the drive to a new future.

Chris Callieri | AT Kearney
Chris has been working on Environmental Sustainability for 13 years. He has a background in biology, MA in environmental science in the UK and joined environmental consulting firm called ERM working in Chile developing regional environmental action plans. Studied infrastructure and manufacturing. He went to DC, working with ERM and the World Bank to define guidelines for regions. AT Kearney is a general management consulting company. In sustainability: helping clients understand "what it means to them". Is it about growing revenue, containing costs, building brand equity, etc?

Benjamin Privitt | Natural Logic
Benjamin took a winding path included media production and theatre to get to sustainability consulting. NL is a strategic consulting company. Clients are corporations and municipalities. In its 10th year, NL is small and growing with a CEO that has been doing this work for 35 years while the the planet has been doing "sustainability" for about 4 billion years. NL specializes in integration: work across domains. In natural systems there are no verticals, & the economy is happening as a subset of a natural system. Work inspired by writings of JM Juran. To be in a state of self control, you need three things; know what's expected; have the the tools to know how you're doing; and check the performance against the expectations. Companies need this as well. At Natural Logic, we're here to transform industrial society

Kate Butchart | Saatchi & Saatchi S
Kate was hired by Act Now productions (acquired by ad firm Saatchi & Saatchi at the end of 2008). Saatchi & Saatchi core mission: make sustainability irresistible to all clients, and brought Act Now on to help them get there. Net Impact was the doorway to the sustainability movement. She mentioned Adam Werbach's speech "Is Environmentalism Dead" and the Birth of Blue (Blue: social, cultural, financial and environmental sustainability). I seem to remember "The Death of Environmentalism" by Michael Schellenberger and ted Nordhaus being out a year or so before Adam's speech few years ago too. Wal-Mart received some more lip-time as Kate talked a bit about the PSP program they started.

Question #1 from moderator: How green is green enough?

Chris: No matter what you're looking at, there are no fixed standards yet. What does a company feel comfortable with? Sometimes there are limitations in terms of available data, e.g. carbon footprinting. Clients recognize that this is an evolving path and that they have to define their own important areas of focus. Carbon footprinting: direct emissions vs indirect, where are the boundaries drawn?

Benjamin: You may have discovered that many parts of the discussion are theoretical & general so we try to be concrete. A recent client had a mandate from The Governator regarding expectations for energy & emissions reductions for every building they owned or operated. NL
worked with them to develop a tracking system based on Business Metabolics software (inspiration + backbone for OpenEco at the conference). Use metrics to drive better performance. They allowed their client to measure current emissions & meet expectations of The Governator. It is about using tools to track and drive better performance.

Jessie: James Hanson < href="http://en.wikipedia.org/wiki/Big_Hairy_Audacious_Goal">BHAG; Backcasting. We find it very helpful to get companies to set big aspirational goals & then break things down to determine how to get there. It's about being realistic, and also being willing to dream as big as you can.

Kate (Saatchi): We do a similar process ultimately transitioning to a sustainable restorative work big fans of small steps AND game-changing platforms, fundamentally starting small then thinking more in the transformative realm, what are we gonna do to create a game-changing platform to put this out in the market.

The Moderator decided to answer the question as well, which was a little weird and Benjamin interjected with some comments to dispute some of the "wild-west mavericky" traits she was describing. Interesting

Kate made a great point about measuring sustainable progress by asking, "what's your spend on marketing vs. actual implementation?" If you're spending 500k on the building and 2M to amplify that, pay attention!

I skipped over a bunch of panelist commentary on questions to get to the audience questions, as I mentioned before, limited to 5 minutes.

Q1 from audience: There are lots of people in the consulting world. How do you differentiate yourselves from Lean + Six Sigma (sus biz consulting seems to be along those lines)?

Chris: Sustainability is not just about all processes. It's about the alignment of economic, ecological, and social objectives. How do these initiatives impact profitability and market share? Sometimes you have professionals focused on detailed Six Sigma, but also need big picture perspective that consultants can give.

Q2 for Benjamin. You mentioned CFOs. Do CFOs need to understand the benefits of sustainability?
The conversation is shifting. We're talking about exposure to financial risk. Some CFOs are getting this message loud & clear. To have the numbers people talking about this wooly environmental concept is critical; it's powerful. It depends company to company how receptive the CFO is to this conversational shift, and yet we're finding that's what's happening

Q3: what was your most helpful experience prior to going into consulting? Was it technical experience?
  • Kate: the ability to ask good questions.
  • Benjamin: data-driven part; synthesize complex/contradictory data; ultimately it's about communication
  • Chris described what MBA students really do: Translate stories into tangible business interests, and collaborating with those who have technical insight
Q4: Are salaries in sustain. consulting lower?
  • Jessie: At my company, we may not be making huge salaries, and we have life-work balance
  • Chris: differential exists - but there might be some degree of shift; many pros in this space come from the social sciences
  • Benjamin: If we're tying our compensation to the enormous financial impact of our work, there's great potential.
  • Kate: Not much elaboration. She mentioned the intangibles of the work, rewarding and powerful.
Many thanks to Dawn Danby for transcribing the notes that led to this post!

Tuesday, November 18, 2008

Terrabytes Consulting Launches New Green IT Community Website

I have to give a bit of a shout out to another BGI classmate making an impact in the IT space. There is green of many shades in them there bits and bytes!

VICTORIA, BC – Terrabytes Consulting, a Green Information Technology (“green IT”) consulting firm, proudly announces the launch of the new GreenITTools.com community website. Terrabytes Consulting provides products and services to help IT organizations reduce environmental impact, save money and simplify operations while doing so.

In these uncertain economic times, all businesses will be looking for ways to reduce costs. Green IT practises offer many quickly-implemented projects that can produce immediate cost savings. In addition, the business climate is such that encouraging energy conservation and reduction of paper consumption, for example, are easy concepts to sell. GreenITTools.com offers a comprehensive Green IT Guide to help you get informed and take action on reducing both the environmental impact and the operating efficiency of your office equipment.

With the launch of the new website, GreenITTools.com now offers a richer, more interactive learning experience for visitors. Visitors are encouraged to ask questions, discuss green IT topics with other visitors, and contribute comments and white papers, all while still benefiting from our researched content. We have also announced two on-line seminars for November 27, 2008 and December 4, 2008 introducing and demonstrating green IT practices.

At Terrabytes Consulting, we passionately believe that the most significant learning comes from engaging with other professionals and having lively discussions on the benefits and challenges of making changes for a more sustainable future. We encourage everyone, not just IT professionals, to visit and engage in the activities we provide and let us know what would be useful to you!

Terrabytes Consulting (www.terrabytesconsulting.com) is a Victoria BC-based, Green Information Technology firm whose mission is to provide easy-to-use and cost-saving sustainable IT solutions to IT professionals. For more information about the company, contact jessica@terrabytesconsulting.com . For more information about green IT, visit www.greenittools.com.

Sunday, November 16, 2008

BGI Announces New President


Barring anything strange happening with my studies over the next six months, I will have the same signature on my undergrad and graduate diplomas from two very different schools separated by 15 years. Amazing. Here's to Dr. Strauss leading us down the path of continued organic growth, regenerative economic thought leadership, and community building (image from city-data.com).

Dr. Jon Strauss Appointed President of Bainbridge Graduate Institute

Bainbridge Graduate Institute (BGI) in Washington, which offers a unique MBA in Sustainable Business program, is pleased to announce the appointment of Dr. Jon C. Strauss as President of the Institute.

Dr. Strauss comes to the Bainbridge Graduate Institute out of retirement as President Emeritus of Harvey Mudd College, a highly ranked liberal arts college of engineering, science and mathematics, where he served as its fourth president from 1997 to 2006. Dr Strauss brings an extensive background in academic leadership and management and he is an advocate of the benefits of a diverse and inclusive collegiate culture.

“As President of this unique school, I am excited to collaborate with the BGI community to move its mission forward so that we will continue to grow in numbers, diversity, and in the impact that our student leaders will have in the world,” said President Strauss. “The need to create businesses, non-profits, and governmental agencies that are socially responsible and environmentally sustainable and that support the health and long-term needs of our global communities and our planet becomes more evident each day. BGI is in the forefront of educating leaders in sustainable business to do just that. And I am here to accelerate the process. As BGI moves through the accreditation process, I am confident that my experience in accreditation with institutions of higher learning will be of benefit.”

Dr. Strauss’ professional interests include organizational development and planning, modeling and performance enhancement, and sustainability and decentralized management in higher education. He was appointed to the National Science Board In 2004 where he has led two important task forces on international science and sustainable energy and chairs the Subcommittee on Polar Issues.

“BGI is honored to welcome Jon Strauss as its new President,” said Chairman of the Board John Eisenhauer. “This marks a major step in BGI’s emergence as a world-class and world-renowned school and in its mission of changing business for good. Jon’s experience and past successes, and his enthusiasm for BGI’s focus and potential, make him a fitting successor for our beloved founder, Gifford Pinchot."

BGI co-founder and President Emeritus Gifford Pinchot will work with President Strauss with a focus on teaching, speaking, and writing about sustainable business. According to Pinchot, “Jon Strauss is the perfect President for BGI for our next level of evolution and growth. He has a deep commitment to sustainability and his experience and credentials are outstanding. I am thrilled to be liberated to work on my new book and to research and explore new opportunities in sustainable business.”

Prior to his appointment at Harvey Mudd College, Dr Strauss served as Vice President and Chief Financial Officer at Howard Hughes Medical Institute in Chevy Chase, Maryland. He is also President Emeritus of Worcester Polytechnic Institute in Massachusetts, and he served as Senior Vice President of Administration at the University of Southern California where he also was a tenured professor of electrical engineering. He was Vice President for Budget and Finance at the University of Pennsylvania in Philadelphia, and also served as a professor of computer science at that institution and at Washington University in St. Louis, the Technical University of Norway, and Carnegie Mellon University in Pittsburgh. Dr. Strauss has published and spoken widely, consulted for a wide variety of colleges, universities, and corporations, and served on the Boards of a number of corporations and professional and community organizations. He holds a Ph.D. in Systems and Communication Sciences from Carnegie Institute of Technology, a M.S. in Physics from the University of Pittsburgh, and a B.S.E.E. from the University of Wisconsin.

BGI is ranked #1 in several categories in Net Impact’s “Business as Unusual 2008” - A Student Guide to Graduate Business Programs and was selected by BusinessWeek last year as one of the top design and innovation schools in the world. BGI’s enrollment has grown along with its reputation. In line with the continued growth and increased enrollment, Bainbridge Graduate Institute recently hired Dr. Chris Gilbert as Provost and Executive Vice President and Dr. Scott Schroeder as Dean of Faculty and Instruction and expanded its monthly residential program to two weekends a month.

Saturday, November 15, 2008

NetImpact + Join the Impact


Movements are born, and built. Last night found me at a group dinner at the White Dog CafĂ©, Judy Wicks’ model of social entrepreneurship and sustainable dining, talking with students from Darden and Wharton about fair trade chocolate and the outdoor industry. Then I was invited upstairs to Judy’s house, where I talked to Mike Hannigan of Give Something Back Office Products, Mark Albion, founder of Net Impact, and Judy Wicks, one of the original members of the Sustainable Business Network (SBN). SBN is where the dream of a place like BGI was born, and these leaders are the architects of the movement we’re all part of.

But there’s been another important movement weaving through this weekend. Last week a small group of people decided there needed be some sort of organized, widespread public outcry to California’s passing of Proposition 8 banning gay marriage. Join the Impact started last Friday, and today there will be simultaneous protests in every state of the union, and in many cities abroad. I’ll be missing a session this afternoon in order to be present at the Philadelphia rally.

So what does this have to do with sustainability? Everything. Grassroots movements become mainstream when they are inclusive, integrated coalitions, united for a common purpose. Sustainable business will have traction when I look around a room at one of these conferences and see proportional representation of aspiring business leaders from minority communities. Strong leaders are authentic leaders, and there are too many closeted glbt people in the business world for their leadership to be truly powerful. Sustainability is about the planet and profit, but more importantly, it’s about people. All people. Bringing their whole selves into this movement. Because this is a movement about ideas, and ideas come from uncommon partnerships and unconventional thinking.

Because Prop 8 isn’t about marriage, it’s about legislating discrimination, allowing a simple majority to deny rights to a minority. And Net Impact isn’t about business, it’s about going beyond business to change the world for the better. And we can only do that once we’ve invited everyone to the table.

Check out my friend Gerod’s work linking sustainability and the glbt community.

Friday, November 14, 2008

Water, the WWF, ans Coca-Cola


This morning's keynote about the partnership between Coca-Cola's bottling and distribution enterprise and the World Wildlife Federation was interesting in terms of the some of the issues brought up: water usage (coke measures theirs as 1.77 liters of water to make 1 liter of coke), distribution, packaging, Wal-Mart (a major customer who's pushing this agenda), and sustainable animal habitat.

Carter Roberts from the WWF mentioned that their panda logo is one of the 10 most recognizable brands in the world. To which I thought, yeah, because you've licensed the crap out of it. And I'm still not clear on what their successes have been (and how partnering with Coke is useful). They did talk about watershed restoration, but as someone who's worked in social services, I've come to prefer prevention to band-aids...

Marc Gunther moderated, and made a great segue: the elephant in the room was the bottles of Dasani on the table. The answer was basically that at least they weren't from Fiji. As Wayne pointed out, "less bad" is the mantra.

I will say this, hearing mainstream CEOs talk about measuring their entire value chain for their carbon footprint and admitting the externalities involved in producing corn syrup, was refreshing.

Now for my favorite: methane capture! And since one of the panelists is from Mars, there's candy.

Wharton Net Impact Day 0.5

I managed to make it through the first half of the day here at Wharton. The opening address kicked off by the Thomas Robertson, Dean of the Business School was interesting. Seems that since there is a "perception of a violation of trust" in the population due to the current financial crisis there is a need to restore the "sense of responsibility" in business education. Agreed, and shouldn't that be there anyway? The call to a renewed focus on ethics and corporate governance certainly echoes what is happening in the marketplace and the regulatory environment. Are mainstream schools poised to adopt the BGI model wholesale given the current state of affairs?

Moving on.

Coca-Cola Enterprises Chairman & CEO John Brock Carter Roberts, World Wildlife Fund President & Chief Executive Officer commented on the challenges facing the adoption of sustainability and the unique partnerships evolving to attack the climate change crisis. Coke & the WWF were not working closely together five years ago, and they commented that the fact that they are now is an amazing evolution. My main takeaway; companies are making commitments; they are moving in the right direction, yet the conversation still seems to be about how to be "less bad". We are in the business of selling more stuff, and that stuff has an impact, no matter what. I was noticing the presentation styles, something any good business school student should do; low on text, high on images and graphics...tell a story, I liked that.

When will we make the jump to creating less stuff with more value?

I am impressed at the breadth of topics available to the would be change agent. Session One was an understatement; there were 18 topics in 5 tracks from Social Entrepreneurship to Corporate Impact withing the session. I decided to join the President & Founder of Quaking Aspen at the session entitled "The Value Proposition of CSR and how it Affects the Bottom Line". Panelists included:
I liked the quantitative take on the analysis by Mr. Herman, looking at sustainability impact on investment performance, Cheri's honest communication about the advantages of being in a small private company with a leader committed to sustainability, and Mitch's excitement about the potential to take carbon out of shipping.

Rushing...gotta head to another session "Looking Inward: Why Internal Sustainability Communications Matter"...

Wednesday, November 12, 2008

Net Impact

I am heading to the NetImpact Conference in Philadelphia this week, held at Wharton November 13-15 with a whole gaggle of fellow BGI students as well as some members of the Boston Professional Chapter. Some of my BGI classmates will be competing at the Business Plan competition. We have multiple BGI teams. I bet they'll kick some business butt!

BGI alumni and current students will be participating in panel discussions at the conference as well. Here is the list of these distinguished luminaries:

Dawn Danby - Sustainable Design Program Manager at Autodesk - BGI '07
Making Clients More Sustainable: Another Model for Corporate Responsibility
JMHH 240, part of Session 3
Friday November 14, 4:30-6:00PM

Benjamin Privitt, Operations Manager at Natural Logic - BGI '09
Jessie Alan, Consultant at Sustainable Business Consulting - BGI '09
From Green to Gold: For Profit Business Consulting
SHDH 351, part of Session 5
Saturday November 15, 9:00-10:30 AM

Betsy Blaisdell, Environmental Stewardship Manager at Timberland - BGI '09
Getting into a CSR Career: Rewards & Challenges
SHDH 350, part of session 4
Saturday November 15, 9:00-10:30AM

I am sure they will all have some great insights.

I am not sure what to expect for the rest of the conference. Considering the sustainable MBA experience that is BGI; a clearly unique and awe-inspiring community, I am curious about the feel of a collection of MBAs from different and similar institutions. I am hopeful that the positive energy is tangible and good ideas and learning happens all around.

The program of events looks interesting and impressive. Given scheduling conflicts (and the fact I did not really know what to do) I am no attending the CSR & Change Management Workshop. I am sure it will be fascinating, especially with members of the BC CCC involved (I have attended NI events in a previous life).

I am always curious to hear ambassadors from large multi-nationals talk about sustainability. I have seen someone from Wal-Mart talk about it, back when they were first starting to seriously take some action. I have also seen someone from McDonalds talk about it, now I'll have the chance to see someone from Coca-Cola talk about it.

I am also hopeful that I will bring back ideas, concepts, & tools I can apply in my "real" job. We shall see.

Being "Correct"


An exchange I overheard between the counter worker (partner) and a customer at the local Starbuck's here in Belmont made me both cringe and chuckle. First of all the chuckling; the fella at the cash register told the barista three, four, maybe five times what the customer wanted, all a variation of a latte, first it was skinny, then no foam, then foam, then skim, then...whatever. I overheard part of the exchange that included something to the effect of "you didn't say that." and a plaintive retort of, "yes I did." It really was like the commercials that poke fun at the sizes and styles of coffee drinks offered here (I ordered a "coffee"). The cringe came when the fella kindly explained to the customer what "skinny" meant, something to do with the syrups they use. I could tell that the customer was a bit miffed as she walked away, having been chastised for her ordering method (image from delawareohrealestate.com).

My thought was, do you think the customer wants to have their ordering method corrected as you take the $3.95 from their hand? Let the customer order whatever way they want and give them what they want. Whether they ordered the "right" way or the "wrong" way is irrelevant.

This pattern of thinking, the order taker repeating the order in the most efficient way for the barista to make the drink makes sense. BUT, there really is no need for the register worker to be "right" in the way of ordering relative to the customer.

How does this in any way relate to this blog? Sustainable business and regenerative economic thinking requires a shift in our existing patterns of thinking and action. As I re-read some of the material for our creativity course I was reminded of this fact. Here's an excerpt:
It is easy to get trapped in good patterns. For this reason, what solutions we choose depends on what we have been successful with in the past. Past successes blind us to even better solutions.
Some of the patterns we have are there and have been there for a long time and may work quite well.
  • How are those patterns limiting our options?
  • How are rote ways of learning & thinking conspiring to throttle new movement?
  • What am I doing (or not doing) to jolt myself out of patterns that can help lead me to a new realization about something old?
  • How is being "correct" distancing people with other opinions?
Any suggestions?

Saturday, November 08, 2008

Unexpected Connections


We had a town hall style meeting at BGI last week as part of the second Intensive of the fall term. It was organized by the BGI community to vet the new presidential candidate for BGI, someone to fill the place of the school's founder and current president Gifford Pinchot. As I write this, I suppose his place will not necessarily be filled, it will be invented again for a new person.

To my surprise, I realized that the gentleman we were there to meet, whose CV I had in my hand, had been the president of Worcester Polytechnic Institute (WPI) when I was there Jon C. Strauss. I realized this as I scanned his CV, noting his nine year tenure at WPI that ended in 1994, the same year I graduated. THAT was a connection I did not expect to have.

Why am I reflecting on this strange coincidence? I suppose it has something to do with the fact that for many years I have been trying to distance myself from my engineering undergraduate work. For some reason, I think the label "engineer" conjures up stereotypes that I may not be interested in dealing with. Unfortunately, since I had approached Jon prior to his speaking to us and told him I was there when he was there, he called me out to the entire class as a fellow extroverted engineer. I was a good shill. The event was great, and I believe Jon would make an excellent second president of BGI. He would provide the institutional knowledge to guide this crazy little start up through its next phase of growth and development into the world class institution of sustainable higher learning we all know it can be.

What I have realized is that distancing myself from my undergrad experience is not really a good idea. I learned a lot there despite the fact that engineering may not have been my "true calling". I met people that I still consider very close friends and I have a solid technical foundation that makes understanding many of the concepts related to sustainability (LCA, renewable energy, thermodynamic efficiency, closed-loop manufacturing, etc.) that much easier for me. So I suppose the lesson is; try not to pretend your past does not exist and accept it for what it is.

Also, I guess I should have taken the time to get to know the administration at WPI, since now it might be a real asset. Oh, and WPI launched their own sustainability initiative earlier in 2008. I wonder if Jon could help me make the right connections?

Monday, November 03, 2008

Cognitive Dissonance (Rebuttal)


The post I made a few weeks ago about cognitive dissonance struck a bit of a nerve in a few readers. After reading the responses, I realized that there was a certain fatalistic black-or-white thinking revealed within what I wrote. I asked if I could post the comments here; David Kimball said "yes". [I have added some formatting, including emphasis].
I'd like to respond in two ways: Cognitive Dissonance and Sustainability.

First for Cognitive Dissonance. In order to maintain our sensibility and equilibrium, we need to alter our concept of the choices involved in this Cognitive Dissonance issue. It is NOT binary. It is not to be one thing or another. It is not to be "use energy" or "don't use energy". It is not to eat meat or not to eat meat. It is not to invest or not to invest, etc., etc.

These issues are to be considered on a spectrum with two extremes, but with sane reality lying somewhere in between these two extremes. It may be important to identify the extremes, but only to give a point of reference of where we want to or should be. If we identify our change in terms of an extreme, we cannot fail but disappoint and frustrate ourselves. That is not Cognitive Dissonance, that's Emotional Dissonance. And as you have reported to experience, it will drive you crazy. Most things in life are to be approached as a spectrum rather than polar, binary opposites. We experience life much more analog-ically than we do digitally.

The problem with meat isn't meat or no meat, but how much meat is too much meat? (Otherwise you get into the rabbit hole of fish? dairy? leather shoes? etc. etc.) The same with transportation. You shouldn't expect your decision to be that of Thoreau with no gasoline. Moderation in all things should be the cry of the day. As an MBA student, I'm sure you're very familiar with cost/benefit analysis. Thinking of going to Net Impact in Philadelphia [I will be there]? I'm sure you're not walking. But what will the benefits be? What happens when you weigh those benefits against the cost of petrol? If the benefit is there, go for it with a clear conscious. If the benefit isn't there, then don't go. Your thought processes should be spent on the cost-benefit performances rather than the ideology of total conservation. Which brings me my second point - Sustainability.

Perhaps you need to consider the difference between Sustainability and Conservation. Conservation, to me, seems to be a binary decision - either we conserve or we don't conserve. But Sustainability may be an approach which utilizes certain Conservation principles, but it's mission is not to Conserve. It's mission is to be Sustainable - or to operate in a Sustainable manner. What is Sustainability? To have our behavior today such that we will be just as viable 50 years from now as we are today. That doesn't mean that we Conserve as much as we can today to a ridiculous level. Just as the aspect of Sustainability that deals with reporting, Triple Bottom Line Accountability, is a three-legged stool, so Sustainability issues must be addressed in a complex fashion rather than a simplex fashion. It doesn't do a company any good if they Conserve to the point that they fail economically. That is destructive rather than constructive. So Sustainability issues must be answered again with a cost/benefit analysis approach and considering all factors, not just the Conservation factor. You will always be able to find more and more ways to conserve, but they won't always be the best Sustainable decision.

I was talking to a person today about the slash and burn indigenous societies of both Africa and Asia where they will slash and burn a clearing for farming and living. But they will live there only ~15 years (Asia) to ~30 years (Africa) before the tribe will move on to create another "home". But by moving around and around, they allow their previous "homes" to re-grow and to become fertile again. This actually is a means of Sustainability as 50 years from now their entire "homeland" will be just as viable as it is today. Yet when looked at from the microscopic lens of "today", it's a system that sounds and seems abhorrent to a lot of people. But Sustainability MUST take the bigger picture.

So don't suffer from paralysis by analysis by looking at these issues through a microscope. Remember that a beautiful rose leaf will look very ugly under a microscope. (You'll see dirt, insects, torn petals, etc.) Look at the larger picture and I will guarantee that you will sleep better at night.
Thank you.

Thursday, October 30, 2008

More on Driving Electrically


The following is ripped directly from the pages of the latest Rocky Mountain Institute newsletter. I wrote about some recent news stories covering the creation of electrical recharging infrastructure in Israel, Germany, San Francisco, and Boston a few weeks ago. I also saw something recently about a similar effort taking place in Australia by the same Better Place company working in Israel. Perhaps the centralization of power (pun intended) will shift from petroleum to electricity generation. Maybe Better Place realizes that people are really buying mobility services, not automobiles.

From RMI:
Imagine driving a car that can be plugged in and connect to the grid while you shop for groceries, while it sits in your office parking lot, or even in your own driveway!
RMI's Mobility and Vehicle Efficiency Team (MOVE) is working to bring together electrified vehicles, energy-positive buildings, and a smarter, cleaner electricity grid. According to Michael Brylawski, VP of MOVE, these are essential new developments that will generate jobs and wealth, while decreasing our dependence on oil and greenhouse gas emissions.
RMI's Smart Garage Summit was held on October 8-10, 2008 and united experts across several industries for three days in Portland, OR in order to identify both barriers and breakthroughs needed to develop a fleet of electric vehicles in the US, and do so in a manner that reaps environmental benefits and opens up new business opportunities. The Smart Garage concept has become RMI's means to describe the integration of the grid and the electric vehicle. Attendees included leaders from the utility and auto industries, innovators of clean energy solutions, IT systems providers, consumer products, metering, advanced battery technology and even retailers. Among the companies represented were names you may hear everyday: auto manufacturers like Nissan and GM, utilities such as PG&E and Duke Energy, IBM, P&G, Wal-Mart and Google, among many others.
Important Developments
The collaboration and discussion at the Smart Garage Summit allowed industry leaders to identify essential elements that are needed to move forward. It is promising to see that consumer demand, industry preparedness and government leadership are coming together, setting the stage for a great leap forward in the next five years. According to Laura Schewel, MOVE team consultant and manager of the project, "what proved most surprising was the concept of the Smart Garage is a lot closer to realization than we previously thought. We found there were many misconceptions, including that technology to make all this possible was not available -- when in fact the opposite is true."
We are all excited to see Smart Garage move forward at an amazing pace, but we can't do it without your help! Please click here to make a secure, online donation to the Smart Garage Initiative. RMI looks forward to keeping you updated as the MOVE team continues to pursue their follow up initiatives and this concept gains momentum with the media. You can take a look at some of the coverage that the Smart Garage Summit has received here.
So, once we have this set up, we all just need gardens in our own backyards...

Saturday, October 25, 2008

Cognitive Dissonance


I decided to go down a rough road (for me anyway) today. One of my classmates at BGI is doing his research project to attempt to explain how people who claim to care about the environment still mange to eat meat, travel, and drive all over creation (image from the situationist). Hence the title of this post.

This is something I have pondered (and pondered, and pondered, to the point of occasional paralysis, similar to how I felt after reading Brave New World) over the past few years as I have learned more about the challenges we face in the social, economic, and environmental realms.
  • How is it that I can purport to have great concern for the environment and work in a job that requires extensive travel both by air and by land?
  • With the recent large-scale betrayal of trust by our financial institutions (and regulatory agencies), is the time ripe for the massive change to localized economies we claim to want?
  • If our trust in the financial system has been threatened (or destroyed) why do we still have assets invested in some of these institutions?
  • How is it that concerned people manage to travel to "green" themed trade shows (I'll be at the Net impact Conference in Philadelphia in a few weeks)?
Are the changes we need to make too big? Perhaps we have not evolved to the point where we can consciously and willingly shift our behaviors in ways that appear to be drastic. We are social creatures and creatures of habit, if our social circle is one that embraces the current status then we run the risk of alienating ourselves from the very people we rely on for support.

Holding two competing worldviews simultaneously is exhausting, and something that may slowly be chipping at my resistance to the calling of my "right livelihood". From an employment perspective, I will be assuming a different role within my company that will allow me to address some of my personal sustainability needs. The conversations leading to this agreement were interesting including my desire to pursue sustainability related activities professionally. This was a non-starter in this organization; at this time and maybe for a good deal of time to come. I was reminded encouragingly by the gentleman that inspired me to start this blog that the number of "official" positions that include sustainability are few and far between. In thirty years, our progress toward a regenerative economy will have depended not upon a few hundred thousand officials working for sustainability, but on the millions who took action independently.

As Peter Senge warned us in The Fifth Discipline, we are NOT our jobs. My functional requirements will not include sustainability; I will be working to influence my coworkers in the dialogue about sustainability, about bringing our values to work, about authenticity, empathy, and compassion by my actions and my daily interactions with them around the water cooler, coffee machine, etc. Perhaps I'll reduce the magnitude of my dissonance with these actions. My first act will be bike commuting, a political, social, & economic act that will have interesting consequences. As I read in Orion Magazine recently (by David J. Perlman),
Becoming attached to anything outside the norm, you run the risk of being ostracized, labeled a flake, for not fitting the social mold....you are expected to commute by car - to be another polluter commuter, as I call them. Driving is considered the most efficient use of time (although not of energy) and if you tolerate wasted time, the general opinion is that you are not committed to your career. You become the perfect target for a critical boss or ambitious colleague."
So perhaps my dissonance is partly brought on by a desire to challenge the status quo, the assumptions about how we live that has yet to be manifested. Or, it could be a desire to bring my values more fully into my work and life. Will bicycling to work help? We shall see.