The Triple Bottom Line

Apocalypse Nau? No, Just Business Reality

2008-05-14T09:35:00.004-04:00

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

2008-05-02T15:00:00.008-04:00

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

2008-04-30T13:59:00.004-04:00

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

2008-04-29T07:02:00.004-04:00

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

2008-04-28T15:42:00.003-04:00

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?

2008-04-25T16:07:00.006-04:00

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

2008-04-19T07:24:00.003-04:00

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?

2008-04-18T06:49:00.008-04:00

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

2008-04-17T09:02:00.001-04:00

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.

The Shallow End Of The Pool--Ten Simple Footprint-Reducing Steps For Businesses

2008-04-17T06:51:00.000-04:00

In somewhat the same vein as the story we posted yesterday about reducing your computer systems' energy use, here is a nice little article about ten business practices that can lighten your footprint on the planet. It's from a site we just encountered called Ecopreneurist.com. No profound insights or amazing strategies here--just a collection of practical, down-to-earth tips you may find valuable if you're a business manager. If the concept of sustainable business is one you are just getting your head wrapped around--which we suspect is true of many visitors to this blog--this could be the shallow end of the pool that makes it easy for you to get used to the water. Enjoy!

Hershey Still Groping For A Sustainable Future

2008-04-16T14:30:00.003-04:00

Following other signs of turbulence, including the resignation of the CEO, here's the latest in the saga of troubled Hershey Foods (makers of the iconic chocolate bar) and its largest single shareholder, the Hershey Trust:

In another high-level departure in Hershey, the chief executive of the Hershey Trust Co., Robert C. Vowler, said he would retire from the company that has overseen investing decisions for one of the world's largest educational endowments.

The Hershey Trust manages $8 billion in assets owned by the Milton S. Hershey School for underprivileged children. Among the school's assets is stock that controls the Hershey Co., the chocolate-bar-maker and major Pennsylvania employer, and the Hershey amusement park.

As president of the trust in 2002, Vowler played a central role in negotiating to sell the Hershey Co. to diversify the multibillion-dollar school endowment. But the deal encountered fierce community opposition and fell apart. Company and trust officials revived deal talks in 2007, again without success.

The Hershey Trust administers the estate of founder Milton Hershey on behalf of the school he created and the community he built. In our book The Triple Bottom Line, we told the story of the 2002 battle over corporate control among the company, the trust, and the town--a revealing parable of how the community where your company operates can exercise a virtual veto power over your business strategies in this day of intense mutual interconnections. Evidently the aftershocks from that struggle still aren't finished.

Taming Your Energy-Hogging IT Department

2008-04-16T09:00:00.002-04:00

Here's a neat little column on making your company's IT department more environmentally friendly. It's from Preston Gralla, editor of GreenerComputing, and it's filled with simply, practical steps that take relatively little time or money but can reduce your energy consumption significantly. There are also links to other sites that flesh out the details and describe various techno-tools that can save you even more. And it does it all in just a few hundred words. It's a model of fine, useful sustainability reporting. Great job, P.G.!

P.S. Oh, and when you're ready to delve a little more deeply into the same set of issues, check out this article and the set of related links. As you can see, the folks at GreenerComputing have done a lot of thoughtful research into the kinds of practical info needed to make sure that environmentally-friendly IT practices really work. A great source for companies that are ready to travel this path.

Friendly Adversaries--Green Activists And Environmental Executives

2008-04-15T07:21:00.007-04:00

Our friend Joel Makower sends us a link to the latest issue of GreenBiz.com, one of the best online sites for sustainability news. Joel also links to stories about how diverse companies--Ford, Wal-Mart, Fiji Water, and Sierra Pacific--are all shifting their business plans in response to pressure from environmental activists. In his email, Joel then comments:

Such developments notwithstanding, my sense is that many of the environmental watchdogs have lost their bite. One reason is that while times have changed, many activists haven't. Yesterday's politics of complaint--of saying no and accepting nothing less than perfect--resonate less in a world where companies increasingly are on the march, proactively examining and addressing their impacts. With few exceptions (Environmental Defense Fund being the most prominent), NGOs haven't yet learned how to play "good cop," saying to companies the equivalent of "Thank you, now do more." It's always, "No, that's not good enough."

Still, as these stories suggest, the bad cop is still very much on the beat. This is a good thing. A healthy activist sector is much needed--and even welcomed by some corporate types. More than a few environmental professionals inside big companies have confessed to me their appreciation of activists in prodding their bosses in ways that the professionals hadn't succeeded in doing themselves. In some cases, activist campaigns justify the professionals' existence, giving them a new lease on life--or, at least, their jobs.

There's an old story about Franklin D. Roosevelt that captures some of this interplay. A group of activists met with FDR in the Oval Office to urge his support for some liberal reform (it doesn't matter what). After listening to their arguments, Roosevelt responded, "Okay, you've convinced me. Now go out and put pressure on me."

Roosevelt's point: Even a president can't always act with perfect freedom. He too faces constraints--powerful leaders in Congress, bureaucratic resistance and inertia, opposition from state and local government leaders, potential roadblocks in the courts, and so on. Sometimes a president needs "pressure" in the form of a visible, well-organized, vocal, and articulate public movement to provide him with both political cover and supportive energy that permits him to do what he really wants to do anyway.

Environmental activists can play a similar role as "friendly adversaries" for sympathetic executives inside corporate America.

Globalization Meets Localization--Trends In Collision That Can Work For You

2008-04-15T07:05:00.006-04:00

Andy Savitz and Melissa Tritter have penned this story in the current edition of Ethical Corporation, highlighting a shift that has sneaked up on many of us in business--the emergence of "localization" as a force that is beginning to rival globalization in importance. (Actually those crazy Brits at EC insist on spelling it "localisation"--go figure.)

The story explains the new trend, describes how companies like PepsiCo and Whole Foods are capitalizing on it, and offers some advice for business managers on what it all means. The elevator version of their take-away:

The key is to be both big and small at the same time--big in terms of resources, scale, and positive impact; small in terms of supporting local economies and the consumers who care about them. To the extent that a large company can do all this, the same forces that are currently fuelling the localisation movement will support them, making it easier to do business in a profitable, sustainable fashion.

Follow the link to read the whole thing--worth a look, in our not-so-humble opinion.

It's All About Seoul

2008-04-09T11:12:00.004-04:00

Congratulations to the crack Global Rights Department at our publisher, Jossey-Bass, for concluding a sale of the Korean translation rights to our book, The Triple Bottom Line, to Keorum Publishing Co. According to the company's website, Keorum Publishing's motto is "Enriched Lives, New Knowledge," which sounds fine to us.

An Excellent Primer On The Advantages And Drawbacks of Carbon Offsets

2008-04-06T15:37:00.005-04:00

Recommended reading: From ClimateBiz, a fine article by Carolyn Sherwood Call on how carbon offsets actually work--exceptionally clear, thorough, and balanced. Call's bottom line:

If your company wants to put money toward reducing the amount of carbon in the atmosphere, look first to make changes that reduce your own carbon footprint. Often, such investments are not only good for the planet; they'll also save you money over time. Replacing incandescent light bulbs with compact fluorescents, using hybrid vehicles for the company's fleet, and installing building control systems to reduce energy waste can reduce your carbon footprint and improve the bottom line.

If you want to do more, offset purchases are worth considering. Revenues generated by offset purchases provide critical funding for many projects that reduce greenhouse gases. If you do decide to buy offsets, take the time to research the various offset providers. Look for details on their websites. The more transparent they're willing to be, the more likely that their projects and their calculations can stand up to scrutiny.

Managers considering carbon offsets as part of their green business strategy might want to circulate Call's article among their top decision-makers--it would be a good tool for getting an informed conversation about the topic started.

Some New Evidence On The Link Between Doing Good And Doing Well

2008-04-05T12:35:00.004-04:00

Via Ted Samson's column at InfoWorld, here are the latest findings on the perennial question as to whether sustainable business practices help, hurt, or have no impact on the financial bottom line. According to a new report from the Economist Intelligence Unit, a focus on social and economic sustainability is associated with positive stock market performance among the companies surveyed. Key graf:

The survey does not claim that the adoption of sustainable practices causes companies' share prices to rise. It could be that companies with a strong financial performance simply have more resources to devote to sustainability. What the findings do show, however, is that it is possible to take a proactive position on social and environmental issues while still delivering robust financial growth. Indeed, companies in the survey that saw their share price rise by at least 50 percent in the last three years (share price climbers) place a greater importance on social and environmental goals than companies with share prices that have declined by more than 10 percent (share price losers). Social and environmental goals include improving environmental and human rights in supply chains, where 40 percent of share price climbers rank this as an important priority versus 18 percent of share price losers; reducing greenhouse gases (38 percent to 24 percent); and developing products which address social and environmental problems (49 percent to 35 percent). Share price climbers also put a greater emphasis on social and environmental considerations at board level.

Worth noting if you're among the many business people who find themselves occasionally having to defend an interest in sustainable business practices among skeptical or even hostile colleagues.

Transforming Human Desires From Part Of The Problem To Part Of The Solution

2008-04-02T11:12:00.006-04:00

Mark Powell, a scientist in Washington state who blogs about oceans, fish, and conservation at Blogfish, writes here about the challenge of setting the right tone when it comes to conveying messages about sustainability. Key grafs:

. . . I think most environmentalists would identify human desires as a problem. In this view, people want more . . . more money, more toys, more fun activities. And almost all of it means more conservation problems as we use more resources to satisfy the wants.

Do we really focus on trying to defeat human desires to achieve conservation? Yes, we do. We try, usually with minimal success, to scare or limit people to stop them from fulfilling their wants. We tell stories of impending crisis so they'll stop out of fear, or we try to make rules that stop the damage by denying people their desires. Conserve water or we'll run out and you won’t be able to flush your toilet! Stop driving your SUV or we'll all cook together on a warming earth! Etc., you've heard it before.

It's a reasonable way to go, but it isn't working. And perhaps even worse, it creates problems for the environmental movement. It casts us as the enemies of human desire, not a good role to be in. In fighting desire, we cast ourselves as grouchy preachers promising fire-and-brimstone for those who stray from the straight and narrow. That might be ok if it worked, but with this approach, our successes are often partial and short-lived. And it takes a toll on us; when we KNOW we're right but we still lose, our attitudes turn pessimistic, cynical or even bitter.

Powell goes on to talk about chef Barton Seaver who is trying to promote sustainable seafood using a different approach, one that harnesses desire on behalf of eating and enjoying fish (like sablefish) that are abundant and well-managed, rather than fish (like Chilean sea bass) that are scarce and endangered.

Of course Powell's overall point is well-taken and important. From a marketing standpoint, you never want to be in the position of defending negativity (fear, guilt, No) against positivity (optimism, pleasure, Yes). This is the mistake the Hillary Clinton campaign got boxed into a few weeks ago, when their candidate started mocking Obama's message of change and hope. Does Hillary really want to be identified as the "anti-hope" candidate? I don't think so.

Here is a crucial role for businesses involved in sustainability--to lead the quest for the right ways to market sustainable lifestyles and to make them feel cool, joyful, satisfying, luxurious, and self-indulgent. Because, let's face it, the vast majority of people in the developed world are not interested in developing new value systems (even if that might be a good idea). So our challenge is to show them how sustainable consumption fits into, expresses, and even fulfills their current value systems.

And after all, this is not really deceptive. Because, if we are going to frame the conversation in terms of "human desires," what do people actually want out of life? It certainly includes good food, cars, hot water for a shower, etc., etc. But it also includes clean air and water, thriving forests, vibrant coral reefs, abundant species, and all the other goods that only sustainability can guarantee to us and our grandchildren. Surely selling the fulfillment of such desires shouldn't be an insurmountable challenge for the greatest marketing civilization in the history of the world.

GRI Matchmaker Program Puts Students' Smarts To Work For Sustainability

2008-03-31T11:23:00.004-04:00

Check out this story about a smart new program that brings together corporations, the GRI Sustainability Reporting Guidelines, and university students who are learning about the principles of sustainable business. Under the new GRI Matchmaker Program, companies are linked with undergraduate and graduate business students who offer their services in assessing, evaluating, and critiquing the companies' sustainability reporting efforts. The student teams, guided by business professors, act almost as free consultants, creating benefits for both the learners and the companies they study.

The article describes successful collaborations between businesses and student teams from two universities, Boise State University in Idaho and the Haskayne School of Business at the University of Calgary. The potential exists for broadening the students' participation in the future--for example, by having student teams assist in compiling the data used in producing company reports.

Today the GRI Matchmaker Program is small, but it suggests other possible links between companies and universities around sustainability performance and reporting. It's a natural outgrowth of one of the central ideas of sustainability--that businesses should strive to identify and nurture mutually beneficial links with all their stakeholders. When the right relationships are forged, colleges, universities, and the students and professors associated with them can became powerful associates and advocates for companies and sustainable business practices--not just potential anti-corporate protestors and adversaries.

As we discussed here, companies like IBM are discovering the practical benefits of transparency, including the fact that working cooperatively with community groups, advocacy organizations, and NGOs can actually reduce some of the burdens that transparency imposes on corporations. The GRI Matchmaker Program shows one way companies can add colleges and universities to that list.

The Power Of Information To Nudge Us Toward Sustainability

2008-03-27T07:03:00.004-04:00

The notion, discussed here recently, that automated, easy-to-understand metrics are one key to sustainable consumption seems to be gaining traction. One straw in the wind: this article in the New York Times, which references a new book, Nudge, by Cass Sunstein and Richard Thaler of the University of Chicago.

The book is about how well-chosen, readily accessible pieces of information can be more effective than either financial incentives or government regulation in encouraging smarter consumer behavior. A key passage from the Times article:

"Getting the prices right will not create the right behavior if people do not associate their behavior with the relevant costs," says Dr. Thaler, a professor of behavioral science and economics. "When I turn the thermostat down on my A-C, I only vaguely know how much that costs me. If the thermostat were programmed to tell you immediately how much you are spending, the effect would be much more powerful."

It would be still more powerful, he and Mr. Sunstein suggest, if you knew how your energy consumption compared with the social norm. A study in California showed that when the monthly electric bill listed the average consumption in the neighborhood, the people in above-average households significantly decreased their consumption.

Meanwhile, the people with the below-average bills reacted by significantly increasing their consumption--not exactly the goal of the project.

That reaction was avoided when the bill featured a little drawing along with the numbers: a smiling face on a below-average bill or a frowning face on an above-average bill. After that simple nudge, the heavy users made even bigger cuts in consumption, while the light users remained frugal.

Amazing, isn't it, how subtly powerful even simple-minded devices like smiley faces can be for nudging people in the right direction?

And please don't write in with indignant complaints about "the nanny state" manipulating us. Does anyone really think that smiley faces on our utility bills would outweigh the thousands of pro-consumption messages we absorb every day through television commercials, radio ads, billboards, print ads, and all the rest?

We already have plenty of nannies trying to manipulate us--and they are all sending the same message: "Buy, buy, buy!" A few nannies offering a gentle warning about the long-term dangers of over-consumption won't deprive us of our freedom.

Two, Three, Many Forms Of Sustainability

2008-03-21T15:25:00.010-04:00

In a world where fast-growing giants like India and China are rapidly catching up to the West in terms of their consumption--and the burden they place on the environment--we sometimes assume that creating sustainable approaches to growth will involve impositions on the developing world.

This assumption helps produce friction around environmentalism between the world's haves and have-nots. The fear is that newly-enlightened Western thinkers will "change the rules" and prevent the countries of the global South from claiming their fair share of consumption--all in the name of sustainability.

But maybe there's an alternative. Maybe the peoples of the developing world will devise their own environmental solutions, based on ideas about respect for nature, our dependence on the planet, and the unity of life that are deeply embedded in traditional religions and cultures.

That's the possibility suggested by this NPR piece about business leaders in the Middle East who see sustainability as naturally linked to Islam and the traditional Arab way of life. Here's a quote from one of the Kuwaiti business people interviewed by NPR:

Think about it. This [the Middle East] is one of the hottest inhabited regions in the world and yet people lived here not only in days before electricity, but in days when people were dirt poor, I mean literally had nothing . . . . There's still memory, individual memory of what it was like in the time before oil. There's still that link to a not-so-distant past.

Doesn't it make sense that peoples in the Middle East are more likely to draw inspiration for their own approach to sustainability from Islam than from Western environmentalists?--just as the peoples of India are more likely to be inspired by Hinduism, and those of China by Buddhism and Confucianism.

I'm no expert on any of these great non-Western faiths, but everything I know about them suggests that they are at least very compatible with the core concepts and ethical requirements of sustainability--at least as much as Christianity and Judaism, and arguably more.

As the global impact of this century's environmental challenges becomes more and more apparent, the need for a global sustainability movement becomes more and more clear. And while such a movement will require international cooperation and some universal standards--tomorrow's improved versions of Kyoto, if you will--it will also require roots in dozens of local cultures.

As a planetary people, we'll need many forms of sustainability, driven by leaders who speak not just in the accents of New York and Portland and Stockholm and Berlin but also those of Abu Dhabi and Mumbai and Kinshasa and Beijing.

Triple Bottom Line Blog, Now New And Improved

2008-03-20T08:28:00.002-04:00

Our crack web design guru Dan Kirshenbaum has added a new feature to the site. Scroll to the bottom of this page and you'll find a list of Categories covering posts we've written since the inception of the blog. Click on any Category title and you'll get a page containing every post related to that topic. We hope you'll find this a useful tool for quickly zeroing in on content that is particularly relevant to you and your work.

Robert F. Kennedy On Sustainable Consumption And The Real Wealth Of America

2008-03-19T16:55:00.004-04:00

I thought about Andy's provocative post on sustainable consumption when I discovered that yesterday was the fortieth anniversary of this speech by Robert F. Kennedy. Speaking at the University of Kansas less than three months before his murder, Kennedy contrasted mere consumption with real wealth. Here's an excerpt:

Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product--if we judge the United States of America by that--that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife [RFK is referring here to two notorious mass killings of the 1960s]. And the television programs which glorify violence in order to sell toys to our children.
Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.

One of the big challenges of the twenty-first century for us Americans will be to figure out new ways of measuring our national well-being, beyond traditional yardsticks like Gross Domestic Product. It will be an even greater challenge for business people to figure out how to define success in an era when pushing more stuff out the warehouse door may be an increasingly non-sustainable strategy.

But can anyone doubt that, in the years since Kennedy's speech, the challenge he set forth has become more, not less, acute?

The Power Of Knowing: It's All About Metrics

2008-03-17T14:16:00.018-04:00

Last summer, when my wife bought her first Prius, I wrote elsewhere about how the new car had affected her driving:

As you may know, the car's dashboard features a touch-sensitive screen that displays various kinds of information and can be used to control the sound system, the air conditioning, etc. Mary-Jo normally keeps the screen set to show fuel economy, and the effect is quite fascinating. The display shows the current mileage you are getting (ranging from less than ten miles per gallon to a maximum of a hundred), the mileage you've achieved in five-minute travel increments, and your average mileage over any period you want--the current trip, the last week, whatever.

As a result, driving becomes a kind of video game: How far can I get the current mileage bar to extend? How high can I get my mileage rating for this trip? Can I beat my score from my last trip? And Mary-Jo is clearly driving differently. Her foot on the gas is much lighter, she avoids fuel-draining accelerations and needless braking, and she uses cruise control on long straight stretches of highway.

These are significant changes for a woman who used to get antsy when stuck behind a slow vehicle. Now instead of changing lanes she smiles serenely as her speed drifts down toward 50 mph and her mileage bar stretches up above 50 mpg.

Turns out I wasn't the only person to notice this effect. According to a recent article in The Economist, some smart companies are trying to apply the idea to another big energy guzzler, the average home:

What if you did the same thing to houses? A variety of products can provide real-time information about electricity consumption. Working out how much energy a house is using is harder than with a car, because electricity meters are generally hidden away in cupboards or cellars, and many people find them hard to understand. So an easily understood real-time read-out, akin to a car's fuel-efficiency gauge, could make a big difference.

The Economist articles goes on to describe two gadgets, the Owl and the Wattson, designed to make such energy-usage measurements easy and routine.

Of course, both the automative and home examples simply illustrate the old management principle, "You get what you measure." Whenever you develop a metric for tracking some activity, that act of measurement tends to affect the volume of that activity. So if, for example, you start providing daily reports about the number of defective products coming off your assembly line, within a few days it's likely that the number of defects will start to fall, just because people are suddenly thinking about and noticing defects more than ever. There's no reason to think the same can't apply to energy use, waste production, and other environmentally-sensitive activities.

Two lessons related to sustainable business:

1. A big, usually unremarked obstacle to green behaviors is the lack of reliable, easy-to-obtain feedback about the impact of our activities. (In most homes, even the traditional electric and water meters are located in an out-of-the-way corner of the basement or a closet and are hard for the average person to read and interpret. This is silly, and represents a big wasted opportunity.) Conversely, there's enormous value to be realized in the development of products, like Owl and Wattson, that don't save energy or reduce pollution directly but that improve human environmental behavior indirectly simply by making it transparent.

2. On a corporate level, the powerful impact of simply knowing what you are doing is one reason the reporting movement promoted by GRI and others is actually more important than many people realize. When a company is "forced" to report on its environmental, labor, and social practices every year, it has an automatic impact, subtle or marked, on the way its employees tend to think and act. The impact would be even greater, of course, if sustainability reporting were quarterly or even monthly rather than annual, but having any metrics at all is valuable in its own right.

In one sense, of course, just knowing what you are doing isn't terribly meaningful. Standing on the scale every day doesn't, by itself, make you lose weight. But buying a scale and using it regularly--along with a full-length mirror!--is a pretty important first step in any weight-loss plan. It's all about metrics.

Getting Trumped On My First Speech On Sustainability

2008-03-04T09:37:00.007-05:00

I do a lot of public speaking on sustainability, but my very first speech after The Triple Bottom Line appeared in print over a year ago is still the most memorable--not for the speech itself, but because of what happened afterwards.

I was running late for the airport and my cab was waiting in front of the hotel. Before I could sit back, the cabdriver asked: "How was your speech?" I looked up and saw, looking at me in his rear view mirror, an older cabbie with a scraggly goatee and a cloth cap.

I asked him how he knew I had been giving a speech, and he told me that the hotel concierge had told him. "What was it about?" he asked.

Hmmm, I thought, how to explain this? "Well, I am an expert on something called sustainability. It's about how companies are expected to do more than just make a profit, and I was speaking about how profits can actually be increased by good social and environmental performance."

He didn't reply, so I tried again.

"Sustainability is about how companies can do the right thing and make money at it."

He still said nothing.

Instead, he reached over into the front passenger seat, and, without taking his eyes off the road, handed back to me a fifteen-page, single-spaced manuscript entitled Sustainable World.

"Read this," he said. "I wrote it three years ago and have given out over 1,700 copies from this very cab."

Huh? The first paragraph began with a quote from the UN Commission On Our Common Future. As I read it, I had three thoughts.

The first one was: "Am I on Candid Camera?"

If you're too young to remember, Candid Camera was a TV show from the 1960s that featured practical jokes played on unsuspecting victims--an early form of reality television. Laugh if you will, but I have three jokester brothers, and it seemed entirely possible that one or all of them had hired an actor and rented a cab to do this to me on my maiden voyage.

I actually accused the cabbie of this. I really did. He assured me he was on the level and had never met my family.

As this sunk in, my next thought was: "Wow, do I have the right book at the right time, or what?"

And then, as I continued to read his highly articulate tract on what companies, governments and NGOs needed to do to save the world, a final and more somber thought occurred: "This guy is a competitor of mine. And at the moment he's 1,600 copies ahead of me."

In hindsight, I realize that the second thought is the most important one. When cabbies are talking and writing about sustainability, can real change be far behind?