The Triple Bottom Line

Words And Meanings: We Go Where Language Takes Us

noreply@blogger.com (AS) — Fri, 05 Sep 2008 01:51:00 +0000

Words influence us in many ways. Words can move us, alter our attitudes, and change our behavior. Politicians and judges know that their power to define words legally is the power to shape the future, which is why lobbyists and lawyers are highly paid to contort language beyond its plain meaning.

Of course, it isn't only the legal definition of words that matters. Advertisers are constantly reshaping our understanding of words like free and new to give their products fresh luster. In the area of sustainability, just consider how the emergence of words like stakeholder and transparency have changed our understanding of how businesses ought to behave, or how the phrase corporate responsibility, by expanding to include everything from human rights to community impacts to diversity, has raised the bar for companies.

For many Jews, the word kosher conveys deep meaning, associated with ideas such as goodness, purity, and quality. For me, it evokes memories of cheese blintzes, frying onions, and of my grandmothers, both of whom kept kosher homes and for whom preparing and serving kosher food was a way of saying, "I love you, so eat."

And in America, the multicultural melting pot, the word kosher has entered the vocabulary of millions of non-Jews as a synonym for legitimate, honest, trustworthy--a kind of verbal Good Housekeeping Seal of Approval.

But the meanings of words can be fragile--as a recent story out of Postville, Iowa, demonstrates.

The nation's largest producer of kosher meat, a company called Agriprocessors located in Postville, has been cited for violating a slew of environmental and safety laws including, most egregiously, those prohibiting child labor. State investigators identified 57 under-age workers working at the company. The state labor commissioner said he had never seen anything like it in his thirty years in the field. Children as young as thirteen were reportedly wielding knives on the killing floor; some teenagers were working 17-hour shifts, six days a week. Allegations have also been made of sexual harassment, shorted wages, favoritism and bribery in work assignments, inadequate safety practices, food contamination, and environmental violations.

Of course, we always need to acknowledge that those accused of such misdeeds are innocent until proven guilty. But if even a fraction of the allegations are true, it's a terribly sad story, one that suggests a number of significant lessons. Among other things, this episode should lay to rest the common notion that child labor is not an issue in this country. In the Jewish world, it has also rekindled a long-standing argument about the meaning of the word kosher.

Most traditionalists say that kosher means simply that a food product conforms to the technical requirements of kosher practice as defined by Jewish law, interpreted by rabbinic experts, and certified by specially-designated organizations. If a cut of meat, for example, is taken from a permissible animal that has been slaughtered, processed, and prepared under rabbinic supervision, then it is kosher--period.

Many progressives, on the other hand, argue that kosher should embody a broader set of standards, closer to the secular meaning of the word, including healthy and safe workplace conditions, legal compliance, and environmental protection, as well as more general concepts of corporate responsibility and fairness.

A third position has also emerged, something of a middle ground, called Hekhsher Tzedek ("justice certification" in Hebrew), which seeks to create a new kind of certification alongside the traditional kosher one. This "God Housekeeping Seal" (forgive me) would include standards for wages and benefits, worker safety, animal welfare, and environmental protection.

Although many agree with the spirit of Hekhsher Tzedek, I think its practical effect may be to delay or derail the necessary expansion of the definition of kosher. According to The New York Times, Rabbi Morris J. Allen, who is spearheading the Hekhsher Tzedek campaign, disavows any desire "to change ancient kosher dietary laws, which are traditionally administered by Orthodox Jews."

With all due respect, I think this is a big mistake. Words must evolve if our thinking and actions are to evolve. In striking down the practice of government-sanctioned racial segregation in 1954, the U.S. Supreme Court observed that the phrase used to justify it, "separate but equal," was a contradiction in terms. As the historic decision noted, "separate educational facilities are inherently unequal."

In effect, the court was declaring that the meaning of the word equal had to evolve to meet the demands of a higher standard of justice. Eventually, practically all Americans came to agree.

Perhaps the problem with the word kosher is that it's a relic of ancient religious practice now being applied in a modern, secular context--that of contemporary business practice. Relying on a separate vocabulary will almost always impede rather than hasten the transformation of mainstream thinking. We see this in the way the language of corporate social responsibility (CSR) tends to separate it from mainstream business thinking. CSR reports unintentionally provide an "alternative certification" separate from--and unequal to--the company's financial reporting.

Companies that claim to want sustainability as part of their DNA but who rely on CSR reporting as the chief mechanism are actually providing evidence that sustainability is not part of their daily business regimen but rather a separate way of thinking, relegated to a sustainability "ghetto" (to use another word with roots in Jewish history).

I think the time is ripe to challenge the traditionalists in both the Jewish and business practice by working towards one vocabulary, one way of measuring and reporting progress.

In time, this may entail redefining some basic business terms and concepts. Someday the word profit, for example, may expand to include, at least by inference, some indication of how the profit was made. (We already have phrases like blood diamond and dirty gold to describe illegitimate profits.) The simple word trade is developing a counterpart with ethical implications, fair trade. Economist Jeffrey Sachs suggests that we should think less about wealth and more about commonwealth. In all these cases, a change in thinking demands, or drives, a change in the very language of business.

Words shape thought; thoughts shape actions; and actions shape the future. Are profits made by exploiting workers or despoiling the environment kosher? It depends what you mean.

A New System For Feeding The World? Slow Food Nation Says Yes

noreply@blogger.com (KW) — Wed, 03 Sep 2008 00:30:00 +0000

Mary-Jo and I just got back from an extraordinary weekend in San Francisco attending the first Slow Food Nation conference.
(The picture at the left shows the "Victory Garden" created on the grounds of the city's civic center as part of the conference.)

After spending four days joining an estimated 50,000 participants in sampling many of the activities offered--including food tastings and sales, panel discussions, film screenings, educational exhibits, and (of course) some amazing dinners--I came away feeling as though I'd witnessed one stage in the emergence of a new social, political, and economic movement.

As you may know, Slow Food is an international organization founded by the Italian cultural critic Carlo Petrini. Its original intention was, as the name implies, to combat the spread of American-style fast food and to defend more traditional forms of agriculture and food preparation. It has spread to the United States (as well as around the world) and has now become--as I witnessed this past weekend--a popular movement that strives to address and link an array of economic, cultural, and political issues related to the production, sale, and use of food.

Thus, the people and organizations loosely affiliated with Slow Food come from many varied backgrounds and bring a wide range of interests and values to the table. Some are food lovers for whom the pleasure of fresh, local, well-prepared farm products is the chief motivating factor. Others are economists focused on issues like global hunger and the exploitation of farm workers. And still others are scientists and activists concerned with nutrition, food safety, pollution, and global climate change. In a vague way, most of the people I met and heard from this weekend could probably be described as "leftist" or "progressive," but it's not at all obvious that their disparate interests add up to a single coherent "food agenda."

Nonetheless, it seems clear that something big is happening here, represented not just by the thousands of people who attended Slow Food Nation in San Francisco but also by millions of other people around the country who are engaged in activities like shopping at organic food stores, at local farmers' markets, or through community-supported agriculture programs (CSAs); asking their kids' schools to get junk food out of the cafeterias; planting community gardens; writing their representatives to call for changes in farm subsidies, better regulation of meat production, and clearer food labeling standards; and ordering fair trade coffee when they get their morning caffeine fix.

The overall tone of the weekend was best captured, I think, by the standing-room-only panel I attended on Saturday at the Herbst Theater. The avid audience listened enthralled--and frequently broke in with applause--as a who's who of food celebrities discussed the meaning and significance of the conference.

Essayist, poet, short-story writer, and farmer Wendell Berry, who has been writing about the need to reform the U.S. agricultural system since the 1970s, spoke about how industrial farming damages communities, destroys ecosystems, and squanders resources.

Restaurateur Alice Waters (who launched the Slow Food movement in the U.S.) shared her dream that the next U.S. president will plant a garden and harvest vegetables to be served at state dinners at the White House.

The movement's Italian founder Carlo Petrini explained (through a translator) that Slow Food is not merely about the pleasures of good eating--though these are important--but also about community, family, and the creation of a truly humane and sustainable way of life.

Activist Vandana Shiva gave a fiery talk about how corporations like Monsanto and ADM are driving a new enclosure movement that is driving millions of farmers in developing nations off the land and impoverishing entire societies.

And journalists Eric Schlosser (Fast Food Nation) and Michael Pollan (The Omnivore's Dilemma) talked about the political prospects for reforming the U.S. food production system so as to better protect workers' rights while producing abundant, nutritious, safe, and healthful food for all.

Where is the Slow Food movement heading? Is its dream of a reformed food supply system attainable? That remains to be seen. It's obvious that food-related issues--hunger, childhood obesity, rising food prices, water shortages, soil depletion, and many others--are on the radar screens of plenty of individuals and organizations. But nothing that adds up to a global "food issue" is on the agenda at a national political level--for example, in the platform of the Obama or McCain campaign.

Still, events like the Slow Food Nation conference may play an important catalytic role by bringing together thousands of people and getting them to draw lines connecting seemingly unrelated economic, political, and social issues. Someday, food activists may look back on Labor Day weekend of 2008 as the coming-out party for their movement--one that may end up having a vast impact on the national and world economy.

The Penobscot Will Flow Free

noreply@blogger.com (KW) — Wed, 27 Aug 2008 10:59:00 +0000

If you've read our book The Triple Bottom Line, you know the story of the Penobscot River in Maine, which has long been a subject of contention between environmentalists and business forces.

Like many rivers in the Northeast (and elsewhere), the Penobscot has been blocked by a series of dams that generate electric power but also harm wildlife--in particular, the Atlantic salmon that must travel up the river in order to spawn. For years, the utility company that manages those dams--PPL Corporation--battled relentlessly against any effort to remove those dams or even to mitigate their effects.

But as we recount in our book, several years ago, under new, enlightened management, PPL began to work with its critics, including not only environmental activists but sport fishermen and Native American tribes (for whom the Penobscot River is holy territory). Complex negotiations produced a landmark plan for restoring the river. Now a milestone in the project has been reached: a Maine environmental coalition, the Penobscot River Restoration Trust, has raised $25 million needed to purchase three dams from PPL.

It's a classic win/win solution: The dams will be dismantled, allowing salmon and other fish to travel freely up the river, while PPL and its shareholders will receive fair compensation for the loss of productive capacity. In addition, the utility has been granted by the state the right to increase its electrical generation capacity at other dams in the Penobscot system, so there should be no difficulty in keeping up with the growing demand for power in the region.

The tale of the Penobscot is a remarkable illustration of what can happen when an embattled company gets out of its defensive crouch and starts collaborating with opponents in search of creative solutions to shared problems.

Think You're An Environmentalist? Prove You Mean It

noreply@blogger.com (KW) — Wed, 13 Aug 2008 12:34:00 +0000

New York Times columnist Thomas Friedman is a big boy--author of several best-selling books and one of America's most influential opinion-shapers about topics like globalization, economic policy, the "war on terror," and the energy crisis. Over the years, his ideas have been subject to plenty of scrutiny and criticism. But I was a bit startled to see his recent column on sustainable energy policy attacked by Daniel Luzer in the respectable Columbia Journalism Review not on the basis of any logical or factual errors but on purely personal grounds:

Friedman . . . is married to Ann Bucksbaum, the heiress to the $2.7 billion General Growth Properties fortune. Founded by Friedman's father-in-law in 1954, GGP is America’s second largest real estate investment trust and owns, develops, and operates regional shopping malls in forty-one states.

That's right, malls. Fat, energy-hogging, climate controlled, sprawl-inducing—many of the most palpable examples of American waste and ecological irresponsibility are owned and managed by Tom Friedman's family.

This makes [Friedman's] gee-why-don't-you-write-your-congressman naivete a little hard to take. Friedman actually has direct access to a company with some control over the level of waste the United States perpetuates on the world.

Is this fair or reasonable? Arguably not. Who knows how much actual influence Tom Friedman wields over the company his father-in-law founded? Nor does Luzer's article offer any information as to whether GGP has taken any steps to move the properties it manages toward greater energy efficiency or eco-responsibility. Apparently, as far as Luzer is concerned, the fact that GGP runs malls is damning in itself--and it thoroughly undermines Friedman's credibility.

This little episode offers an interesting reflection on the place of sustainability in the American dialogue today. Although more and more people now recognize the legitimacy of sustainability issues in the political and business arenas, there is somehow still a need to prove one's bona fides before advancing a sustainability argument--as though, unless you can somehow prove your personal purity, you're likely to be considered a hypocrite just for talking about sustainability. (Remember the attacks on Al Gore for owning a big house and flying around the world by jet.) And as Luzer's column suggests, criticism of your sincerity is just as likely to come from the left (i.e. from environmental advocates) as from the right (i.e. environmental skeptics).

It's funny: Anyone can make an argument on behalf of self-serving, absolute laissez-faire policies ("Down with regulation! Drill in Yellowstone! Pollute at will!") without having their right to make that argument questioned. The assumed sincerity of self-interest insulates the anti-sustainability crowd from this form of criticism. Environmental advocates are held to a higher standard, one that extends not only to their own behavior but even to that of that families.

If you're a CEO working to position your company at the forefront of the sustainable business movement, you should devote a little time to analyzing (and, if necessary, "cleaning up") your personal behavior as well, including the kinds of cars you drive, the houses you own, and the holdings in your retirement account. If your efforts on behalf of sustainability provoke resistance or resentment from any quarters, you can be sure all those purely personal matters will come under scrutiny--fair and reasonable or not.

If it can happen to Tom Friedman, it can happen to you.

Tell Your Employees How To Vote, Shoot Yourself In The Foot

noreply@blogger.com (KW) — Fri, 08 Aug 2008 19:07:00 +0000

We've given Wal-Mart a fair amount of credit for some of the smart sustainable business moves they've made in recent months--for example, see what we wrote here, here, and here. Thanks to the favorable coverage Wal-Mart has (deservedly) received for some of its current initiatives, the company's bad reputation among citizen stakeholder groups has begun to dissipate.

On the other hand, it won't take too many stories like this one to undo all the good from a year's worth of well-meaning environmental and social efforts:

Wal-Mart Stores Inc. is mobilizing its store managers and department supervisors around the country to warn that if Democrats win power in November, they'll likely change federal law to make it easier for workers to unionize companies--including Wal-Mart.

In recent weeks, thousands of Wal-Mart store managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if stores were to be unionized. . . .

Wal-Mart may be walking a fine legal line by holding meetings with its store department heads that link politics with a strong antiunion message. Federal election rules permit companies to advocate for specific political candidates to its executives, stockholders and salaried managers, but not to hourly employees. While store managers are on salary, department supervisors are hourly workers.

Not only is this terrible public relations for Wal-Mart, it's a very clumsy way of trying to influence the political climate regarding labor. In the words of Daniel Gross, the Slate magazine commentator on business and economics, "Wal-Mart may be a master of many domains: global supply chains and logistics, local politics and zoning, anti-union warfare and branding. But on the stage of national politics, it has proved to be strikingly inept."

For one thing, why shift your political spending from overwhelmingly Republican to half-Democratic--as Wal-Mart has done in recent years--and then get caught awkwardly trying to torpedo Democratic electoral chances? If your goal is to make friends on both sides of the aisle (a wise strategy, especially during a period of political volatility), this is no way to go about it.

Gross goes on to point out that, in any case, Wal-Mart's assumption that having a Democrat in the White House would be bad for business is quite possibly wrong:

Despite Clinton's Arkansas roots, most Wal-Mart executives probably opposed Clinton in both his successful campaigns. But during his presidency, Wal-Mart's stock more than tripled. By contrast, Wal-Mart executives polled in 2000 would have been exultant at the prospect of two George W. Bush terms, especially if they were to be coupled with mostly Republican control of the House and Senate. And yet this decade has been a lost one for Wal-Mart shareholders: In the Bush years, the stock hasn't budged at all.

Yes, politics matters. But in the end, the macroeconomic climate matters a lot more. Wal-Mart's success ultimately depends on whether the lower-income and middle-income customers on whom it depends are doing well or getting eaten up by stagnant incomes and rising costs for health care and gas.

As Talleyrand once said, Wal-Mart's ham-handed political manuevering is worse than a crime--it's a blunder.

Lesson for business leaders: If you're going to get involved in politics, better rely on a team of people with shrewd political instincts and know-how. Otherwise you may end up doing yourself more harm than good.

Crises Make Strange Bedfellows

noreply@blogger.com (KW) — Tue, 05 Aug 2008 20:03:00 +0000

Because I worked with Jimmy Carter on three of his books (a decade or more ago), I am on the Carter Center's mailing list for periodic reports about the ex-president's overseas travels. They tend to be a little more interesting than my family slide shows from Disney World, since they deal with things like peace negotiations, monitoring elections, and trying to wipe out infectious diseases in Africa. I guess everyone has a different idea of fun.

The latest report I received is from a trip to the Arctic that Jimmy and Rosalynn took in July aboard the Endeavor, a National Geographic ship operated by Lindblad Explorations. The passenger list was rather unusual. Carter writes:

Participants included Madeleine Albright, Tom Daschle, Chevy Chase, Larry Brilliant and Larry Page from Google, CEO of National Geographic John Fahey, Director of the Centers for Disease Control Julie Gerberding, CEO of Monsanto Hugh Grant, CEO of DuPont Chad Holliday, CEO of Aspen Institute Walter Isaacson, Governor of Colorado Bill Ritter, eBay CEO Meg Whitman, and President of Lindblad Explorations Sven Lindblad.

If you're like me, you don't know most of these people personally, but the list certainly includes some folks I think of as "good guys" and some as "not so good." (I recently saw an advance copy of a film about the industrialization of agriculture that depicts the behavior of Monsanto in the most dire terms imaginable--more on this as the movie gets closer to its release.) Of course, President Carter brought Yasir Arafat and Menachem Begin to the same conference table, so I guess he is used to being in the same room with people whose goals and motives are (to the say the least) divergent.

The entire trip focused on environmental issues. Carter spoke "regarding my experience as president dealing with an inherited energy crisis (reduced oil imports from 8.6 million barrels/day to 4.3 million/day--it's now 15!)." That much-maligned malaise speech about the need to address environmental challenges isn't looking so silly now, is it? A couple of other notable points from his report, with my comments:

The leaders of Google, Monsanto, DuPont, Aspen, CDC, Alliance of Automobile manufacturers, eBay, German CEOs of huge wind-power companies, NGOs, etc. reported on current plans and progress.

(That must have been interesting. Obviously a cruise like this would be no place to launch a fierce debate or even to ask harsh questions, but it certainly seems as though the organizations represented have one or two differences of opinion and practice when it comes to sustainability.)

Biggest international interest now is how to extract more from Arctic region (fishing, minerals, transport, military) and not how minimize global damage. U.S. has refused to ratify the Law of the Sea treaty while Russia and other Arctic nations are making claims and taking action.

(Am I crazy or does this sound like a very big problem that is not getting anything like the attention it deserves from the mainstream media?)

Overall, the U.S. (and therefore the world) can act only if the next president can inspire the public and work harmoniously with a bi-partisan Congress, business, labor, science, environmentalists, educators, news media, etc.

(While undoubtedly true, this strikes me as a fairly depressing statement, since it will take a lot more than "inspiration" to get this motley group of self-interested players to work together harmoniously.)

All in all, I'm afraid the environmental crises we are facing are going to have to get worse before we have much chance of making them better.

Modeling Transformational Leadership In Business And In Government

noreply@blogger.com (AS) — Fri, 01 Aug 2008 15:30:00 +0000

As the 2008 presidential campaign heats up, perhaps the only point of agreement between Barack Obama and John McCain is that our country needs dramatic change. Both candidates are campaigning as change agents: Obama's slogan is "Change you can trust," while McCain campaigns on "Reform, Prosperity and Peace," which, if you stop to think about where America is today, is just another way of saying "change."

Neither candidate has been specific about what change is needed nor about how he plans to make the change, and I doubt that either one has a detailed plan for change that goes much beyond the hope to change his own address to 1600 Pennsylvania Avenue.

Perhaps you're wondering what this has to do with the theme of sustainable business. Actually, the connection is simple. In the world of sustainability, corporate executives are trying to change their organizations in all sorts of ways, from culture and systems to the way they recruit and compensate their people to how they measure and report their performance. What can this year's presidential candidates learn from business leaders about creating change?

I've written before about how Mike Morris, one of my favorite CEOs (and clients, although I had very little to do with what follows) has created culture change at the electric companies he has been invited to lead, from Consumers Energy to Northeast Utilities (NU) and now American Electric Power.

At NU, Morris worked with his deputy Dennis Welch, the VP of Environment, Health and Safety, to turn New England's largest power company from a cantankerous, arrogant, regulatory scofflaw into a model of environmental compliance.

On arrival, he announced that he would not tolerate obstructionism or hardball tactics when it came to dealing with regulators. Within days, he set an example by going to see the Connecticut Attorney General and legislative leaders, and traveling to meet with employees at the plants for face-to-face discussions on critical compliance issues. At the same time, he appointed Welch to create a company-wide environmental management system. Plant managers and employees would now be evaluated on their ability to make their programs compliant and keep them that way.

As a result, NU drastically reduced its legal problems and was ultimately able to sell its "troubled" (i.e. historically non-compliant) nuclear power plant (aptly named Millstone), for hundreds of millions of dollars more than its predicted sale price.

Now Morris and Welch are making change again at AEP, one of the nation's largest electric companies, which also happens to be the single largest consumer of coal on the planet. For over a century, AEP has been an innovator in the electric business, with hundreds of patents to its credit. But the company's ability to create solutions, along with its gigantic size and financial success, led to a sense of hubris and an our-way-or-the-highway approach to doing business.

When Morris arrived, deregulation and climate change were already rocking AEP's world. Reliance on coal, our dirtiest source of energy, was increasingly under attack He realized that the company's culture needed to change, and change quickly.

Morris sent a strong message, first to his leadership team and then through the ranks: "In today’s interdependent world, our ability to succeed as a business will be based on our willingness and ability to work collaboratively with all of our stakeholders, not just tell them what we plan to do." He then modeled this behavior, not only by demonstrating direct, solid and useful relations with political and industry leaders, and with AEP unions and employees, but also by showing candor and honesty in discussing the company's strengths and weaknesses.

For example, Morris wrote in the company’s first sustainability report that, despite many accomplishments, "2006 cannot be counted as a good year for us. One of our employees died on the job doing what should have been a routine task, and a contract worker died in a fire at a construction site . . . [T]his is completely unacceptable to me, to our company and to our employees." The report also detailed the company’s positive and negative environmental, health, and safety impacts--unlike many sustainability reports, which are filled with pure "happy talk."

Once again, Welsh began to create programs to back up Morris' words. He buttressed the company's health and safety programs with clear accountability standards. He launched a stakeholder engagement process with Ceres and national environmental organizations, and held periodic environmental calls with them like those the company held with investors and financial analysts. This year, the company has expanded the process to include stakeholder engagement at the regional, state, and local levels.

Will this new approach provide AEP with the breathing room it needs to develop the new clean-coal and other technologies it needs to succeed for another hundred years? The jury is still out. But it's fair to say that Morris and AEP have been a breath of fresh air in the debate over how to address climate change.

Which brings me back to our presidential candidates. If they're serious about change, Morris and other corporate sustainability leaders like Chad Holiday at DuPont and Katsuaki Watanabe at Toyota, who are transforming their companies for leadership in the 21st century, have a lot to teach them--about sending clear, unambiguous messages concerning the need for cultural change, and then matching their own actions to their words; about altering processes and incentives within an organization (or an administration) so as to reward new modes of behavior; about establishing lines of communication and accountability with outside stakeholders of every kind, including those usually considered adversaries; and, above all, about practicing genuine transparency--which, of course, is possible only when you really have nothing to hide.

If the next president practices policies like these, he'll go a long way to restoring the faith in government that millions of Americans have lost in the last decade.

Environmental Risk--Still An Afterthought Rather Than a First Thought

noreply@blogger.com (KW) — Wed, 30 Jul 2008 20:45:00 +0000

Here's a quite interesting report from The Economist about how business executives are incorporating environmental factors into their decision-making. The highlighted list of findings from the survey of 320 international execs includes:

(1) Environmental risk management is frequently managed in an ad hoc fashion.
(2) There is no clear consensus about who should be responsible for environmental risk.
(3) Many companies conduct strategic activities without a formal assessment of environmental risk. . .

That third item is perhaps the most interesting. To spell it out in more detail, consider these specific data:

Less than half [of the companies surveyed] conduct an environmental assessment when developing new products and services, falling to 32 percent when selecting suppliers or partners, 26 percent when planning geographical expansion and 19 percent when planning mergers and acquisitions.

These findings certainly call into question the general assumption that most corporations today are doing a reasonably good job of considering environmental factors when making major decisions. In fact, they suggest just the opposite--that most companies are facing environmental risks not pro-actively but reactively, scrambling to figure out what to do with environmental problems after they jump up and bite them rather than anticipating and avoiding or minimizing them.

The survey leads me to conclude that we're mostly past the point of having to convince CEOs and their stratospheric colleagues of the relevance and importance of environmental issues. Now the challenge is getting these issues built into the decision-making systems of corporations, alongside financial, regulatory, legal, and other issues that routinely get examined and addressed before any big decision is made.

Mall Of America: An Amazing, Appalling Monument To An Era

noreply@blogger.com (AS) — Mon, 14 Jul 2008 13:11:00 +0000

I recently visited St. Paul, Minnesota, with my seven-year-old daughter to attend the wedding of a friend. At the suggestion of the bride, we stayed at the Radisson Hotel Bloomington, near the airport. "It’s connected to the Mall of America Water Park. Your daughter will be in heaven."

Now, I like Minnesota a lot, especially the Twin Cities: fabulous public universities, the highest literacy rate in the nation, and millions of my kind of people—progressive Democrats, and nice folks too. But this trip threw me for a loop, literally and figuratively.

We checked in and went straight to the water park. "America’s Biggest Indoor Water Park" does not nearly begin to describe the incredible size, variety, and complexity of its many features, which involve pumping millions of gallons of water up and down three-story water slides, surfing safaris, lazy rivers, family rafting excursions, gigantic buckets that fill until they tip over and douse you, artificial beaches with three-foot waves, and much more.

If you’re among those who are concerned about the wastefulness of shipping bottled water around the world, we are talking about waste of another order of magnitude here. Picture—as just one example—thousands of jets of water being pumped up a 30-degree incline so hard and fast that a 200-pound man can actually "surf" along it without ever slipping towards the bottom. And this thing runs from nine a.m. until ten p.m. every day, whether someone is riding the wave or not.

It's well known that Americans, who make up just five percent of the world's population, consume twenty-five percent of its energy resources. Who knew how much of it went to hanging ten in Bloomington?

Don’t get me wrong, my daughter and I had the time of our lives—screaming hilarity, endless giggling, and serious father-daughter bonding as we spent about the monthly income of the average Kenyan to cavort indoors while outside was one of the most beautiful early summer days imaginable.

I thought this was a guilty pleasure until we dried, changed, and crossed the street to experience the Mall of America (MOA).

Of course, it's the largest mall in America--which must mean the world, right? Wrong: A little research reveals that the Mall of America is actually seventeenth on the list of the world's largest malls. As measured by Gross Leasable Area (GLA), it's less than half the size of the South China Mall in Dongguan, China--yet another category in which the United States is being left in the dust by countries many of us still think of as second-rate competition.

Nonetheless, Mall of America boasts a startling list of superlatives. It has an amusement park at its center five times the size of the water park. We rode several different roller-coasters, including Pepsi's Orange Streak (see how I worked in the name of my client there?), but decided to skip the nausea-inducing Splat-O-Sphere after watching it haul 75 people up sixty feet, then drop them fifty-nine feet back down.

Of course, shopping is the main attraction. The mall directory lists over 520 retail stores and restaurants on three gigantic floors. The first-time shopper orients herself by locating the four humongous anchor tenants—Macy’s, Nordstrom, Bloomingdale's, and Sears—each of which occupies all three stories and is located at one corner of the mall.

I have written about over-consumption, but we need a new word to describe what happens at MOA. The term mega-consumption comes to mind. You can shop at 17 jewelers, get footwear at 24 shoe stores, and dine at any and all of 74 eateries. Looking for a souvenir to bring home? MOA houses 37 gift shops, from the ubiquitous Yankee Candle and Disney store to regional establishments like Love From Minnesota and the Minnesota Wild Hockey Lodge.

We were in Minnesota for exactly 41 hours (25 of them awake), enough for three trips to the mall. We found great clothing bargains for my fashion-conscious daughter as well as a lifetime supply of SpongeBob SquarePants memorabilia.

I'm still trying to recover from the trip. Not the expense, but the alternating sense of terror and glee that the mall and the water park inspired in me.

I wonder what people will see and think when they visit the same site two hundred years from now. My guess is that the water park will be long gone, a victim of rising energy prices and water shortages. But the mall may still be there, unless virtual shopping has replaced the real deal—or society as we know it has collapsed under its own weight due to causes it will take some future Jared Diamond to analyze and chronicle. In which case MOA will be an abandoned hulk, overgrown by the returning north woods and perhaps used for shelter by animals and the occasional homeless human.

The few witnesses who wander past will probably think, "In their time, they lived like gods." Then again, they may wonder, "What the hell were they thinking?" Maybe both.

This is the first in a new series of columns we're writing for Ethical Corporation magazine.

A Critic Shows How Reporters Get The Eco-Story Wrong

noreply@blogger.com (KW) — Thu, 26 Jun 2008 13:57:00 +0000

Check out this nice little piece from the Columbia Journalism Review online about how and why environmental reporting goes wrong, often generating more buzz and controversy than information (let alone wisdom).

Some of the problems highlighted by author David Downs are pretty much unavoidable. For example, there's the need to constantly define and explain environmental terms and scientific principles, which eats up precious column space and frustrates journalists who want to write brief, snappy, alluring stories. Other problems are products of today's culture of journalism, such as the pressure to build stories around great quotes (whether or not those quotes are truly enlightening) and the urge to treat every factoid or scientific study as important (whether those details represent outliers or genuinely meaningful symptoms of real change).

In any case, it's clear that journalists and editors who read Downs's article and make a conscientious effort to avoid the mistakes he lists will do a better job of informing readers about environments issues. Come to think of it, there are reporters covering lots of other fields, especially politics, who could benefit from a similar analysis.

Charity By Business--A Great Stopgap, Not A Great Solution

noreply@blogger.com (KW) — Mon, 23 Jun 2008 19:36:00 +0000

Fairbanks, Alaska, is one of the most isolated cities in the United States--so much so that, until recently, it had no affordable way of recycling paper, plastic, aluminum, and other waste materials. Unlike governments in more southerly Alaskan cities, the Fairbanks municipality can't afford to ship its recyclables to a plant in Washington state for reuse.

Now a big private-sector player has stepped in to offer a solution to the problem. It turns out that the local Wal-Mart is already regularly sending trucks back to Washington--mostly empty, after goods for sale in Fairbanks are unloaded. So now Wal-Mart has started its own recycling program, shipping its waste products to Washington for reuse, and it has offered to include refuse from local people at no cost to the community. A few details:

The store's decision to accept recyclables--in reasonable quantities, as it will fall to the store’s paid employees to handle them--is sure to be a hit with its regular shoppers, who live in a community that lacks a conventional recycling program. It's also likely to create an interesting decision for Wal-Mart critics in Fairbanks who either avoid super-retailers in protest of their significant, indirect impact on locally owned businesses and the labor pool or those who believe Wal-Mart is simply hoping recyclers will be inclined to buy more merchandise from a friendlier company.

Suzy Fenner, a community recycling advocate, said Fairbanks residents are currently left with imperfect options--such as burning gasoline to haul paper and plastic to a willing business, which then burns more energy to ship the products out of state. Fenner applauded Wal-Mart's initiative and suggested it will help nudge public awareness of recycling options closer toward the point of a public program or more private-sector involvement. . . .

Store officials made it clear: They’re not turning into a recycling center. But they also said they can accept some common, everyday recyclables, such as loose paper or old newspapers, empty plastic soda bottles or milk jugs, and empty aluminum cans--during business hours. Managers said anything larger than a heavy armful should be bundled or bagged to help associates manage. Recyclers should also phone ahead with bigger loads and use the company’s back loading dock. They should also separate plastics--Nos. 1 and 2--by type, which is identifiable by the number imprinted on the bottom of products.

Wal-Mart, naturally, is proudly trumpeting this news of its latest "good neighbor" policy. But as is usually the case when private/public lines get blurred, the most appropriate feelings seem to be mixed ones. When cash-strapped governments are unable to provide basic services to their citizens, it's nice that big private companies are willing to fill the gap. (We all remember the spate of stories about Wal-Mart and other firms providing disaster relief after Katrina on a more timely basis than FEMA.)

But let's face it, having private enterprise offer public benefits on a charitable basis is not a sustainable long-term program. What happens when Wal-Mart's trucks get filled with their own recyclables, crowding out public materials? What if the demand for recycling services becomes so great it takes up too much costly time on the part of Wal-Mart employees? At a fundamental level, why should a necessary public good like recycling be provided purely as a "favor" by a self-interested business, rather than as a right funded by taxpayers for the benefit of taxpayers?

After all, unlike rights, favors can always be taken away.

So two cheers to Wal-Mart in this case--but here's hoping the people of Fairbanks won't be willing to settle for this as a long-term answer to their recycling dilemma. It's not one.

Compact Packaging--Does It Really Add Up?

noreply@blogger.com (KW) — Sun, 22 Jun 2008 18:26:00 +0000

Shortly after we wrote this post commending Wal-Mart for moving to all-compact detergents in its stores, our friend Dennis Salazar alerted us to a story he'd recently written about the same phenomenon. After shopping for detergent and buying the new compact bottle, Dennis's take on the change wasn't quite so positive:

The [old] 200-ounce bottle, which sells for $9.99, promised it was good for 64 loads. The new 100-ounce bottle, the one that was double strength so only half the usual amount was now needed, also sells for $9.99--but promised only 52 loads.

The bottom line for my sustainable purchase? A load of laundry which used to cost my family 13.2 cents in detergent now, thanks to the new sustainable design, will cost 15.6 cents per load. That, my co-consumer friends, amounts to a price increase of 18.2 percent--a splendid windfall for the manufacturer by any standard.

Of course, these calculations do not even take into account that we are all creatures of habit. No doubt, the manufacturer realized and even projected that most of their customers would use more than the recommended "half" of their more expensive product, despite the new concentrated formulation and labeling. Hmmm . . . sell the consumer more product at a substantially higher profit margin? You've got to love this sustainability. And incidentally, the big-box store where I shop, the one that took credit publicly for driving the package design change, isn't complaining about the windfall, probably because they are participating in it.

We asked Dennis whether this apparent windfall applied to just one one detergent brand or had affected many brands. He told us that, without doing an exhaustive survey, he noticed that several detergents seemed to exhibit the same kind of unannounced price increase (most smaller than the one he wrote about).

Dennis also told us he'd written his article with two lessons in mind:

1. For the businessman--to help dispel the misconception that green always costs more. The fact is that going green usually reduces costs and re-sizing is a marvelous opportunity to re-price your product.

2. For the consumer--Don't take everything at face value. Do the homework it takes to determine the best value.

Both are good lessons, of course. But the first lesson makes us a little nervous. If clever business people start regularly using green initiatives as an opportunity to reap windfall profits through "re-pricing," the already significant cynicism many people feel about green propaganda will surely get a lot worse.

One more point. Wal-Mart's own original blog post about the switch to compact detergents drew a number of comments, some of which raised the issue of price. The most substantive of these, by "Sunny," read as follows:

There are two reasons why the cost [of detergent] isn't going to go down, and neither of them really have much to do with the cost of oil.

First, believe it or not, smaller containers are quite a lot more expensive to product than the bigger ones, because the ratio of empty space per unit of plastic is much lower in a smaller bottle. In other words, it doesn't take four times as much plastic to make a one-gallon bottle as it does to make a one-quart bottle. The cost difference isn't as drastic with cardboard cartons, but it exists--and small boxes aren't cheaper per bottle inside than big boxes.

Second, the only thing being taken out of the formulation is water--for which the manufacturers' cost is negligible. It's the surfactants and cleaners and other things that make up the cost--so eliminating the water doesn't change the price enough to be able to mark it down.

So . . . it will take less packaging (but not as a direct ratio to the smaller package size)--and less cardboard--less space on the shelf--less effort to stock the shelves (and carry it home!)--and will allow the manufacturers to load more in a single truck--and the empties will be easier to recycle or will take less space in a landfill.
So--the tangible benefits are many, but the cost savings directly to the consumer really won't change that much.

Realistically, we all know that prices tend to rise, and it's no great shock when the unit cost of an item creeps upward at the same time that a new package, new product formula, or other change is introduced.

But we hope manufacturers and retailers who are trying to earn "green cred" will be very careful about how they handle those increases. The last thing they want to do is besmirch the concept of sustainability and inspire a consumer backlash against it.

A Useful Overview of the Coming Water Crisis

noreply@blogger.com (KW) — Sun, 22 Jun 2008 12:27:00 +0000

Since the average business person doesn't regularly read The American Prospect--a liberal magazine focused mainly on politics--we want to call your attention to this special report on water. It includes no fewer than thirteen well-researched and well-written stories on one of tomorrow's hottest environmental, social, political, and economic issues--supplying water to the world.

Topics covered in the report include issues around water supply privatization, the backlash against bottled water, how new water technologies can help alleviate long-term shortages, and close looks at exemplary water struggles in places like Cambodia, the Phillippines, and the Middle East. Well worth a look, especially since water issues will soon be affecting every business in the world.

Making Sustainability Part Of Your People Strategies

noreply@blogger.com (KW) — Tue, 03 Jun 2008 11:46:00 +0000

If you happen to be a human resource professional, or if you own or run a smaller company and have "people" functions as part of your mandate, check out this good article by Adrienne Fox from the current issue of HR magazine. (It also happens to quote our fearless leader Andy Savitz, but that's not the reason we like it.) The piece offers a fine, thorough overview of lots of ways companies can get the HR department aligned with broader sustainability goals. Read it and ask yourself: How many of these strategies have we tried? Which ones should we experiment with?

Compact Detergents--A Big Little Change For The Better

noreply@blogger.com (KW) — Fri, 30 May 2008 11:49:00 +0000

It's a hopeful sign when eco-friendly initiatives by business are becoming so numerous that it's possible for a relatively important one to come in under the radar, producing social and economic benefits without a lot of fanfare. That seems to be the case with the shift to compact detergents. As reported by the WBCSD, compact detergents save water, energy, space (in shipping containers and on store shelves), and even significant amounts of petroleum (since smaller packages require less plastic).

Now Wal-Mart has announced it will be selling only compact detergents in the future. It's noteworthy, as most policy shifts by Wal-Mart are, because of the company's sheer size. Anything Wal-Mart does is, by definition, mainstream. And it's encouraging to note that Wal-Mart is evidently doing a good job of training its employees to explain the benefits of compact detergents to customers (see the reader comment to this effect on the company blog we linked to). That's important because, in the absence of such explanation, it would be easy for customers to get the wrong idea: "I'm paying the same amount for a smaller package?! What is this, some kind of rip-off?"

Wal-Mart's move to stocking compact detergents exclusively is also important because it eliminates one potentially major source of supplier reluctance to "go compact"--the fear that my smaller product will be overlooked on the store shelves alongside a competitor's giant-sized package. Many purveyors of packaged goods think of "shelf space"--retail acreage, in effect--as a measure of competitive presence. By selling only compact detergents, Wal-Mart is creating a level playing field for every manufacturer and removing the perverse incentive to keep using bulky, wasteful formulations.

Like any strategic change, sustainability moves need to be thought through carefully and completely to ensure they work as planned rather than triggering the dreaded "unintended consequences" we've all learned to fear. This looks like a case where Wal-Mart (and far-sighted manufactuers like compact pioneer Procter & Gamble) have done their homework.

The Urban Village: New York, 1948

noreply@blogger.com (KW) — Mon, 26 May 2008 17:35:00 +0000

Returning to our theme of sustainable city design, here is an intriguing article from the website of the World Business Council for Sustainable Development titled, "Building Better Cities: Cities as Villages." A couple of key passages:

According to the UK Institution of Civil Engineers (ICE), the concept of an urban village is where a settlement is small enough to create a community in the truest sense of the word--a group of people who support each other--but big enough to maintain a reasonable cross section of modern facilities and amenities.

Such villages are usually created within existing neighborhoods, but they can be created on abandoned brownfields or on greenfield sites. Walking determines their size--usually measured in terms of a 10 minute walk from one side to the other. . . .

These villages can improve existing communities by combining housing, commercial, employment centers and schools together. By blending these components into one community the village design overcomes many of the problems that arise with today's reliance on urban monoculture, i.e. single-use developments such as large housing tracts, gated communities, industrial-commercial zones, etc.

The article goes on to describe the environmental and social advantages of these "cities made out of villages" and discusses projects along these lines currently under way in the U.S., Canada, Britain, and China.

As I read the article, I couldn't help feeling that something about it sounded vaguely familiar (and indeed the authors concede that "the idea of an urban village is hardly knew"). Then the specific source of the sense of familiarity hit me. This is a long, wonderful paragraph from E.B. White's classic 1948 essay "Here Is New York":

The oft-quoted thumbnail sketch of New York is, of course: "It's a wonderful place, but I'd hate to live there." I have an idea that people from villages and small towns, people accustomed to the convenience and the friendliness of neighborhood over-the-fence living, are unaware that life in New York follows the neighborhood pattern. The city is literally a composite of tens of thousands of tiny neighborhood units. There are, of course, the big districts and big units: Chelsea and Murray Hill and Gramercy (which are residential units), Harlem (a racial unit), Greenwich Village (a unit dedicated to the arts and other matters), and there is Radio City (a commercial development), Peter Cooper Village (a housing unit), the Medical Center (a sickness unit) and many other sections each of which has some distinguishing characteristic. But the curious thing about New York is that each large geographical unit is composed of countless small neighborhoods. Each neighborhood is virtually self-sufficient. Usually it is no more than two or three blocks long and a couple of blocks wide. Each area is a city within a city. Thus, no matter where you live in New York, you will find within a block or two a grocery store, a barbershop, a newsstand and shoeshine shack, an ice-coal-and-wood cellar (where you write your order on a pad outside as you walk by), a dry cleaner, a laundry, a delicatessen (beer and sandwiches delivered at any hour to your door), a flower shop, an undertaker's parlor, a movie house, a radio-repair shop, a stationer, a haberdasher, a tailor, a drugstore, a garage, a tearoom, a saloon, a hardware store, a liquor store, a shoe-repair shop. Every block or two, in most residential sections of New York, is a little main street. A man starts for work in the morning and before he has gone two hundred yards he has completed half a dozen missions: bought a paper, left a pair of shoes to be soled, picked up a pack of cigarettes, ordered a bottle of whiskey to be dispatched in the opposite direction against his home-coming, written a message to the unseen forces of the wood cellar, and notified the dry cleaner that a pair of trousers awaits call. Homeward bound eight hours later, he buys a bunch of pussy willows, a Mazda bulb, a drink, a shine--all between the corner where he steps off the bus and his apartment. So complete is each neighborhood, and so strong the sense of neighborhood, that many a New Yorker spends a lifetime within the confines an area smaller than a country village. Let him walk two blocks from his corner and he is in a strange land and will feel uneasy till he gets back.

Now there's a self-sustaining community.

White's description still holds up pretty well with reference to the typical New York neighborhood, although many of the details have changed. There are no more radio-repair shops or ice-coal-and-wood cellars, of course, and most neighborhoods in New York now boast a sushi place and an exercise center as well as, alas, a Starbucks.

But the neighborhood ecology White describes, which as far as I know simply grew up with the city over the generations of its development, seems to me a pretty good model for what some of today's best urban planners are now trying to create deliberately. (Although I notice that White's neighborhood size parameters--two or three blocks on a side--are actually smaller than those suggested by the urban planners; his neighorhood would take only five minutes or so to walk rather than the ten minutes they mention. White is more realistic, I think. A pizza shop five minutes away is worth the walk; stretch it to ten minutes and I bet the amount of business they draw will be cut by 80 percent.)

Some of the best ideas for sustainability are to be found by looking backward--or, in some cases, all around us . . . so long as you know where to look.

Apocalypse Nau? No, Just Business Reality

noreply@blogger.com (KW) — Wed, 14 May 2008 13:35:00 +0000

It seems as if there's a bit of angst among believers in sustainable business over the demise of Nau, an apparel company based in Portland, Oregon, that aimed to make and sell outdoor clothes and sportswear made from recycled materials using environmentally friendly business methods. "Is this a bad omen for sustainable startups?" wonders at least one blogger.

For what it's worth, my answer is No. The failure of Nau reflects less the inherent weakness of the sustainable business concept and more a series of miscalculations made by the company's management, most of which had nothing to do with environmentalism or social consciousness but rather with plain old business sense.

As this article details, Nau committed some of the same management blunders that have doomed thousands of other startups. They counted on a website to generate 50 percent of their sales, then dawdled over repairing the site when it proved to be awkward and difficult to use. They chose not to make their products available through traditional retailers, thereby eliminating a potential source of vitally-needed early revenue. They decided to "mute" the appearance of their logo on their garments, eschewing a powerful tool for building brand awareness and loyalty.

And most dangerously, they overspent, especially on personnel: "Among the 60 employees at [Nau's] Pearl District headquarters, about 10 held the title of vice president or higher . . . Most hailed from large companies such as Nike." In other words, they hired pricey talent accustomed to big-company perks and working conditions--always a risky choice for a brand-new company.

Given these mistakes--all of which, I hasten to add, are easier to spot in retrospect than they would have been at the time--it's not hard to see why Nau ran out of funds and couldn't find a venture capitalist willing to provide another infusion of money.

The lesson of Nau's collapse? A would-be sustainable company needs to be run at least as well as a traditional firm--because having great environmental and social goals doesn't exempt you from the laws of business physics.

Timberland And Stonyfield Farms--Two Little Guys Showing The Big Guys How It's Done

noreply@blogger.com (AS) — Fri, 02 May 2008 19:00:00 +0000

This week, I hosted a panel at the Ceres Conference at which Jeff Swartz, the CEO of Timberland, the boot company, and Gary Hirshberg, the CEO of Stonyfield Farms, the organic yogurt company, answered questions about the role of business in society. Prior to the panel, I spoke with them about sustainable consumption.

I was very pleasantly surprised.

Rather than the usual canned answers one often gets from CEOs at these events, both these Red Sox fans proved to be deeply committed, not to selling less shoes or yogurt, but to sustainable consumption and enlightened consumerism as a potential way out of the ecological and societal quicksand in which we find ourselves.

Gary explained that only about half of what we eat is real food, in terms of its nutritional value. For him, sustainable consumption starts with optimizing the food value chain, which will reduce waste and create value simultaneously. The resources we now waste to make Twinkies can actually feed lots of people.

Gary believes that we need enlightened consumers, i.e. a critical mass of organic yogurt eaters to really change the equation. Twenty years ago, when Gary realized this, he started Stonyfield.

Jeff represents the third generation of Swartzes to run Timberland, and has a harder case to make with boots. But he and Gary are on the same program. Timberland's mission is "to equip people to make a difference in their world," which includes showing consumers, employees, other companies, and his children how commerce and justice can go hand in hand.

Timberland works hard to sell boots on the basis of its environmental and social actions. This is "cause marketing," yes, but also a deeper attempt to change consumer preferences by helping people "to be the change they want to see in the world." And, yes, quoting Gandhi is apropos here--Jeff is deeply motivated by spiritual and inter-generational concerns.

I know when I am being sold a bill of goods, and this time I was not. Both of these guys have thought deeply about their actions, and they're not just walking the talk, they're running it. When we finished the panel later that morning, they deserved the prolonged standing ovation they received.

As for me, like some other unenlightened "experts" in sustainability, I had wrongly assumed that smaller companies like Timberland and Stonyfield were sideshows to the main event—that the GEs and GMs of the world would move us forward, not the little guyes. Now I see the role that deeply committed CEOs like Gary and Jeff are playing and I would not be surprised if they had more of an impact, in the long run, than companies that are hundred of times as big.

And that size gap may not last forever. Under Jeff, Timberland has grown from annual revenues of $159 million to $1.6 billion, and the company now competes directly with Nike and Adidas. And while organic foods represent only three percent of the food consumed in the United States, Stonyfield sells six times the amount of yogurt as Kraft foods and is growing every day.

Maybe the answer lies in one of my favorite lines from The West Wing: "They'll like us when we win."

Where Has Your Breakfast Been? Practically Anywhere

noreply@blogger.com (KW) — Wed, 30 Apr 2008 17:59:00 +0000

Check out this excellent article from the New York Times about the environmental costs of shipping foodstuffs around the globe. It's filled with remarkable facts like these:

Cod caught off Norway is shipped to China to be turned into filets, then shipped back to Norway for sale. Argentine lemons fill supermarket shelves on the Citrus Coast of Spain, as local lemons rot on the ground. Half of Europe's peas are grown and packaged in Kenya.

In the United States, FreshDirect proclaims kiwi season has expanded to "All year!" now that Italy has become the world's leading supplier of New Zealand's national fruit, taking over in the Southern Hemisphere's winter.

But perhaps the most revealing paragraph of the article is this one, which helps to explain why it (counter-intuitively) makes economic sense for food processing firms to move stuff from one continent to another:

Under a little-known international treaty called the Convention on International Civil Aviation, signed in Chicago in 1944 to help the fledgling airline industry, fuel for international travel and transport of goods, including food, is exempt from taxes, unlike trucks, cars and buses. There is also no tax on fuel used by ocean freighters.

Get that? Shipping foods around the world is not some market-tested, economically efficient business strategy developed in response to consumer demand. It's actually the perverse result of an indirect subsidy originally created for an entirely different purpose more than half a century ago.

Free-market fundamentalists often criticize environmentalists (and other non-fundamentalists) for wanting to interfere with the natural, unfettered workings of the economy, which are supposed to embody some quasi-mystical perfection. Their argument would carry more weight if those supposedly simon-pure markets hadn't already been endlessly tinkered with in order to tilt the playing field in favor of one business interest or another.

Most Companies See Environmental Management As An Ally In Tough Times

noreply@blogger.com (KW) — Tue, 29 Apr 2008 11:02:00 +0000

Courtesy of the World Business Council for Sustainable Development, here's an important story from The Financial Times about how the looming recession is affecting corporate attitudes toward sustainability. Facing tough economic times, are companies backtracking on their environmental commitments? It turns out that the answer, at least for now, is no--because in the last few years, companies have come to see that energy reduction, streamlined packaging, and trimming waste are all money-saving as well as eco-friendly programs.

It seems to me that the sustainability challenges for companies will be greater on the social, labor, and community fronts. For example, will corporations with supply chains that trail deep into the developing world maintain their stated commitments to humane labor policies when sales begin to slump? Stay tuned.

Six Ways That Businesses Are Prodding And Dragging Government Toward Sustainability

noreply@blogger.com (AS) — Mon, 28 Apr 2008 19:42:00 +0000

I had the opportunity to speak last week about the relationship of sustainability to public policy in Washington's chandeliered, blue-carpeted Senate Caucus Room where, I was informed, John Fitzgerald Kennedy announced his candidacy for President of the United States 48 years ago.

That was only one of the day’s many humbling moments. Another was that I was addressing an awesome group of CEOs from Massachusetts who have formed the Progressive Business Leaders Network, dedicated to creating sustainable companies and pushing for public policy that will advance sustainable business development.

(Sometimes, despite the weather, the traffic, and the persistent but badly outdated attitude that Boston is the "Hub of the Universe," I love living here. This is one of those times.)

I'm blogging today because I saved the public policy part of the presentation for last, and ended up being severely time-constrained because an annoyingly tall, tanned, and dapper senator, also from Massachusetts, showed up and took most of my air time, which everyone present, I am sure, felt was a good trade. But here is what I was going to say . . .

Companies have a mind-boggling number of ways to advance public policy in favor of sustainability. The following are some proven approaches, presented in order from least to most obvious.

Regulating government: Here I am referring to businesses applying pressure to governments to do the right thing. Over the years, a public expectation has developed (at least in some quarters) that businesses with use their influence in this way. For example, most people expect Google to stand up to the Chinese government on censorship. The big precedent, of course, is the battle against apartheid. South Africa's racist regime finally fell apart when enough businesses threatened to leave the country over the issue.

The Extractive Industries Transparency Initiative, a voluntary agreement by the oil and gas companies to publish details on bogus extraction fees or facilitation payments they must pay in certain countries, is another example of businesses working to regulate government practices--in this case bribery demanded by corrupt officials. The companies are acting in concert since they cannot hope to win by acting individually. I believe the verdict is still out on whether this is working, and I would welcome any update.

Leading government: Many companies in the U.S. are leading the administration and Congress on climate change by participating in the Chicago Climate Exchange or other voluntary mechanisms for addressing the crisis. The Wall Street Journal (subscription required) recently reported:

Mr. Bush has opposed comprehensive legislation to curb emissions. But like an increasing number of utilities and manufacturers, he is aiming to join the discussions in the hopes of shaping the debate and creating a system that won't be too costly to industry or consumers.

Well, hello, Mr. President! This breathtaking piece of reportage by the nation's leading business newspaper underscores the fact that that proactive companies have already framed the debate to the point that this administration is and forever will be on the outside looking in at one of the most important public policy issues of its time.

Partnering with government (and with NGOs): This approach is considered the holy grail by many people--the only way to get the needed traction and speed to climb out of the all the holes we are digging--and it was the basis for any progress made at the World Summit on Sustainable Development in 2002. No treaties were signed there (as compared to the five or six multi-national treaties signed the Rio Earth Summit in 1992), but 300 or so voluntary partnerships were created before, during, and afterwards. (Does anyone know how those have worked out?)

Another example: Wal-Mart met with a coalition of mayors last week, including NYC's Mayor Bloomberg and Boston's Mayor Menno, and reached (per the New York Times) a "ten-point agreement with Wal-Mart, the country's largest seller of guns, to track the sale of firearms more closely."

This is likely an important and hopefully effective partnership and I thought it was telling that the mayors, not Wal-Mart, announced the agreement. Governments now need the active participation and, in many cases, the leadership of private companies to provide even basic goods and services like public safety. Our public agencies are increasingly dwarfed in stature and effectiveness by the world's largest companies. (Remember how FEMA's ineptitude during Katrina was emphasized by the fact that some of the nation's largest companies got private rescue operations going days before the federal group of bozos figured out where New Orleans was.)

Forming your own government: Many industries are, or at least purport to be, self-regulating with various certification schemes sponsored by entire industries, including Responsible Care, established by the chemical companies in the aftermath of Bhopal, the Sustainable Forestry Initiative by the American Forestry and Paper Association, and the recent proliferation of Fair Trade certification programs. Many of these schemes have real teeth: a company cannot belong to its industry's primary trade association unless it is on the program.

Regulate as if you are government: Wal-Mart again. The behemoth has such enormous purchasing power that almost anything it says has the force and effect of law with its 60,000 suppliers. The company's recent packaging guidelines are but one example of the way in which large companies now regulate their suppliers.

Even small companies are now working with their suppliers on environmental or social issues, creating supplier codes of conduct that supplement standard contract language.

Influence the real government: This is good old fashioned lobbying, and many companies have banded together to push Congress or state legislatures for changes in law or regulation that advance the cause of sustainability, usually with their own economic self-interest in mind. (There is nothing wrong with finding that sweet spot.) US CAP consists of corporate climate leaders like DuPont and GE pushing for climate change legislation which will be good for the planet and good for business.

I like to call this "sustainability ju-jitsu": taking the sustainable side of an issue, like investing in clean coal technology and then pushing to make it more expensive for your competitors who are lagging--turning your responsibility into an opportunity and making the other guy pay.

All in all, it's a pretty amazing assortment of strategies (some of them quite new) that businesses are using to pursue sustainability--and their own corporate interests--through governmental and quasi-governmental action.

And that's more or less what I would have said in Washington last week had I not been big-footed by an actual policy maker. But it's my blog, and nobody can pull rank on me here . . .

The Sustainable City--Ecological Dream or Technocratic Nightmare?

noreply@blogger.com (KW) — Fri, 25 Apr 2008 20:07:00 +0000

I'm fascinated by this article from Globe-Net News about the future of urban design--specifically, about the wave of "sustainable city" projects now being built in some of the world's fastest-growing regions, from China, India, and Korea to the Gulf states of Dubai and Abu Dhabi. And while the little boy in me thrills at the science-fiction stylishness of some of the architects' renderings of these cities of the future (of which the picture above is a sample), another part of me wonders whether the promises now being made about these projects have even a chance of being fulfilled.

To explain my built-in biases: I'm a New Yorker from the generation that visited the 1964 World's Fair as children and marveled at the late-post-war visions of urban futurity on display at places like the General Motors pavilion, with its models of gleaming high-rise cities where cars glided soundlessly on highways suspended in space--mid-century versions of Corbusier's famous vision of the "Radiant City."

Then I got a little older, saw how the post-war high-rise apartment projects dotting New York's outer boroughs had become pockets of loneliness, crime, and decay. I read how attempts to build entire cities along modernist visionary lines (like the centrally-planned Brasilia) produced lifeless, boring failures. And I read Jane Jacobs, who explained how the technocratic dream of the centrally-planned city was really a quasi-fascistic nightmare that destroyed neighborhoods. (This is obviously a somewhat simplified whirlwind summary of the issues.)

I became a convert to what I understood to be "the new urbanism," which was all about human-scale, mixed-use, pedestrian-friendly neighborhoods that captured some of the charm, variety, and freedom of traditional city communities like Jacobs' beloved Greenwich Village.

Today of course human civilization is at a crossroads due to global warming, peak oil, population growth, and the challenges of rapid development in what used to be called the Third World. Around the globe, tens of millions of people are pouring into cities in search of economic opportunity, meaning that hundreds of new or enormously expanded cities will be sprouting up in the next twenty or thirty years.

This creates a wonderful opportunity for us to try to leverage the advantages of higher-density living by trying to construct the world's first truly sustainable cities, using all the latest knowledge and technologies for energy conservation and renewal, waste recycling, efficient transportation, and so on. The idea that urban planners, in cooperation with governments and businesses, are already designing and building such sustainable cities is truly exciting.

Yet the images I am seeing and the descriptions I am reading make me a little nervous.

The artists' renderings of such cities-in-the-making (or re-making) as Dongtan, Guangzhou, and Harbin in China, Gugaon in India, Songdo City in Korea, and King Abdullah Economic City in Saudi Arabia (the one pictured above) look a lot like "Radiant Cities" right out of the old Corbusier playbook--right down to the isolated high-rise dwellings that, in my experience, relatively few people actually want to live in.

These supposedly sustainable cities of the future, with their glittering towers and pristine open spaces that appear devoid of humans, look all too much like the regimented visions of the mid-century planners whom Jane Jacobs wrote about so scathingly. The fact that these cities are being built in countries with authoritarian regimes strikes me as another worrisome symptom.

I'd like to be unreservedly enthusiastic about this new trend, and it's quite possible I am at least partially wrong. Herbert Girardet, a widely-respected expert on urban sustainability, is a consultant on the Dongtan project and has written glowingly about its potential as a truly eco-friendly city:

Dongtan's design is based on the principle that all its citizens can be in close contact with green open spaces, lakes and canals. Its buildings will be highly energy-efficient, and the city will be largely powered by renewable energy--the wind, the sun and biomass.

Most of Dongtan's waste output will be recycled and composted. The bulk of its organic wastes will be returned to the local farmland to help assure its long-term fertility and its capacity to produce much of the city's food needs. Chongming's existing local farming and fishing communities will have significant new marketing opportunities with the development of Dongtan, ensuring a high degree of local food self-sufficiency and enhancing the island's long-term environmental and social sustainability at the same time.

It sounds good! And surely something like this is what we need to build in order to house the hundreds of millions of people who will be joining the world's urban population in the next generation.

It's probably dangerous and misleading to lump the various "sustainable city" projects together (as the Globe-Net News article does). It's quite likely that some will prove to be really sustainable--in human, social, political, and esthetic terms as well as in technological and economic terms. But I suspect that some others may fall prey to the problems that have plagued past attempts at heavy-handed, top-down, utopian city planning, ending up as vast, lifeless ghost towns that no one with free choice would willingly inhabit.

I hope this post will attract a few comments from people with deeper knowledge of the subject than I have.

No Peace For The Guy With A "GetSustainable" Address

noreply@blogger.com (AS) — Sat, 19 Apr 2008 11:24:00 +0000

This is starting to get annoying. Two years ago, when the book came out and I set up my mini-consulting firm, my genius computer guy Dan suggested I use the e-mail address andy@getsustainable.net. I thought that was kind of cute, so I said okay.

For about a year and a half, no one except people in my circle remarked on this address.

But about three months ago, something weird started happening. I was on the phone with Expedia trying to reserve a flight for the next day when the Expedia representative on the phone asked me for my email address. I said “andy@getsustainable.net” and expected to move on. Instead, a long pause ensued, then the guy said,”That’s cool, I’m into that” and proceeded to tell me about the solar panels he had installed on his roof in 1993. For about five minutes, which I did not have, he went on and on.

Just now, I was trying to renew my subscription to MLB.com so I could listen to the Sox game up here on the third floor, when after a ten-minute wait to get an operator on the line, I got one who wanted to know all about why I had the email address, what I did, and where could she get a copy of the book? (Hey, fair is fair.) She was way into recycling and human rights and was all about sustainability and, and, and . . .

I put my foot down when she started to read from my website, and I realized that the Sox were scoring runs left and right (I could get the box score) and I was missing it. But she wouldn’t hook me up until she told me how important this was to her. Jeez . . .

Anyhow, there is something going on out there. But I’m going back to andysavitz@comcast.net

The Five Stages Of Sustainability Grief--Which One Are You In?

noreply@blogger.com (KW) — Fri, 18 Apr 2008 10:49:00 +0000

Little did we know there is an entire website devoted to sustainable packaging! Now that we've discovered it (and added it to our blogroll), we can recommend this amusing post--couched in the form of a report from the Housewares Show at Chicago's McCormick Place convention center--titled "Sustainable Packaging, the Housewares Show, and the Five Stages of Grief."

Blogger Dennis Salazar shows how consumer products companies confronted with the new demand for sustainable packaging are passing through psychiatrist Elisabeth Kubler-Ross's famous "Five Stages of Grief"--Denial, Anger, Bargaining, Depression, and Acceptance. You'll have fun reading his post and figuring out which stage you and the companies you work with are currently passing through.

"Powered By BP"?--The New Republic Is Actually Powered By Readers

noreply@blogger.com (KW) — Thu, 17 Apr 2008 13:02:00 +0000

If you keep tabs on media coverage of the environment, you may have heard about the recent about-face at The New Republic regarding its new blog focusing on energy and the environment. When the blog was first launched a week and a half ago, it bore the logo and message, "Powered by BP," representing sponsorship by the somewhat controversial UK oil company. It was the only portion of the magazine's website to bear such a logo (though advertising not linked to any particular magazine feature does appear elsewhere on the site).

Readers protested, the blog's chief writer wrote a post explaining his own discomfort with the sponsorship, and within hours the other shoe dropped. The following note appeared on the blog:

You may notice that this blog looks a little different. The phrase "powered by BP," which appeared in the banner when we launched yesterday, led to some (justifiable) confusion about the blog's relationship with BP. But TNR's agreement with BP was and is purely an advertising deal, and the company never had any say in our editorial content. Today, the TNR business staff and BP decided to remove their logo placement to make sure that relationship is clear.

It's an interesting story that illustrates yet again the great and growing power of grassroots stakeholders--in this case, the readers of The New Republic--to force companies to back down from policies or practices of which they don't approve.

What I find most interesting, however, is the reason those readers objected to the BP sponsorship. It wasn't, apparently, any fear that BP would be dictating or influencing the content of the blog. Writer Bradford Plumer had addressed this issue in his post expressing concerns about the relationship, titled with disarming frankness, "Are We in the Tank?" His answer, obviously, was no--and judging by the comments he received, most readers accepted it.

No, what bothered the readers was the possible impact of the sponsorship on BP itself. As a commenter known as Nippers wrote:

The danger for T[he] N[ew] R[epublic] is not so much that BP will influence its writers as that TNR will lend BP integrity and eco-cred. Running BP ads would be one thing. But pinning that little petrochemical boutonniere to the web site's lapel--well, it's a mistake the magazine would do well to reconsider.

In other words, readers of The New Republic for whom the magazine's reputation is important were upset with the idea that that reputation would provide a little borrowed luster to an oil company.

Imagine--a group of customers who care more about the halo effect of the company's reputation than the company itself does! And one that pays close enough attention to the behavior of firms in other industries (like energy) to consider itself capable of judging which companies are and are not suitable business associates for a magazine they respect.

Now that's what you call an active, involved set of stakeholders. The New Republic did the right thing by reversing the sponsorship plan so quickly. If you're lucky enough to attract customers who care that much about what you do, you'd better treat them with respect--as the business partners they are.