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Jeffrey Hollender’s Recipe for a Better (European Style) Future

Raz Godelnik
| Thursday February 9th, 2012 | 10 Comments

Jeffrey Hollender’s talk on Tuesday at NYU probably wasn’t listed on Time Out NY, but nevertheless it was one of the best shows the city provided that night. Hollender, an almost impossible combination of a CEO and a rebel, is never boring no matter how many times you get to hear him. Combining gloomy economic and social observations with funny anecdotes, he managed to charm the dozens of students that packed the room, sending them home afterwards with some interesting stories to think about and many more questions to keep them awake at night.

This was a very interactive talk, starting with Hollender challenging the audience to name a good product. One answer he got was clothes made by Patagonia, which got him to a) admit he’s wearing a Patagonia shirt and b) explain that his shirt, as well as other Patagonia products are better, but not good. It’s hard to think of products that are actually good, he said and added that it’s time to start designing products that are good and not less bad. He added that even at Seventh Generation they make better products, but not good products, which I guess explains why this vision of “good” products with little or no impact at all is most likely to stay an unfulfilled vision in the near future.

Hollender’s dissatisfaction with incremental improvements was also obvious when he talked about corporate social responsibility (CSR). He explained that while we made progress in this field, it’s not enough. The problem, he explained, is the lack of standards and that there is no definition of what responsible is. This is probably why every S&P 500 company CEO thinks his company is responsible or sustainable, he added, while this is far from being true in most cases.

Which companies does Hollender see as role models? He gave couple of interesting examples. When it comes to leadership, he admires Paul Polman, CEO of Unilever, who unlike most CEOs is thinking long term. Hollender mentioned both Unilever’s plan to halve its carbon footprint by 2020, as well as what Polman famously said to shareholders: “If you buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable, then come and invest with us. If you don’t buy into this, I respect you as a human being, but don’t put your money in our company.” He also gave kudos to Triodos Bank, a European bank with the great slogan – more green, less greed. Triodos invests in organic and fair trade food, alternative energy, non-speculative housing, and micro-enterprise, and manages to generate better returns than its global peers.

Yet, these examples, according to Hollender, are the exception. Most companies act differently – they are writing the rules in the way that fits them and helps them to generate more profit and pay fewer taxes. He called the Court’s Citizens United decision one of the worst decisions of the Supreme Court. He called out GE, which enjoys a reputation of a greener company because of Ecomagination, yet works to rewrite the way companies pay taxes to minimize its own taxes, claiming later on that it’s OK because they don’t do anything illegal.

Hollender says that this sort of behavior is not only making problems like inequality worse, but is also jeopardizing the positive reputation business has for now. The problem with the system, Hollender pointed out, is that it financially incentivizes the wrong behavior. The solution, he said, is to build a new system within the old system. He gave Vermont as an example of such a new system that is rising, offering many innovative programs that are based on local solutions, from hospitals that buy mainly local food to energy CSA.

In a way, Hollender’s opinions are very European, and I mean that as a compliment. His ideas about getting the U.S. economy back on the right track include tax increases on the wealthiest 1 percent of Americans, elimination of the tax deduction on second homes, better access to capital-to-worker-owned companies, mandating a minimum of 50 percent representation of women on boards, public funding for all elections, carbon tax and federal investment in education and R&D. Interestingly, some of his ideas affect Hollender himself, as he’s a wealthy man. The audience was interested in knowing if he walks the talk. They asked him if he voluntarily pays more tax than he needs to right now, and if he took the tax deduction on his second home. His replies were no (he prefers to give more to specific issues) and yes, he thinks he did get the deduction.

Staying on a personal level, the audience was interested in what recommendations Hollender has for those who want to take action effectively. His suggestion was to focus on two things – making big commitments in your career and voting with your wallet. He admitted it’s easier said than done, mentioning his struggle to buy fewer books on Amazon and more at his local bookstore. In addition he tried to make the case not just for sustainability but also for asking the right questions and taking a holistic perspective. Hollender is convinced that if we’ll adopt these practices, we can create more good than bad and make the future better. The young students could only hope he’s right. After all, this is their future he was talking about.

[Image credit: Business Innovation Factory, Flickr]

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.


▼▼▼      10 Comments     ▼▼▼

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  • Anonymous

    The following paragraph says it all…

    “In a way, Hollender’s opinions are very European, and I mean that as a compliment. His ideas about getting the U.S. economy back on the right track include tax increases on the wealthiest 1 percent of Americans, elimination of the tax deduction on second homes, better access to capital-to-worker-owned companies, mandating a minimum of 50 percent representation of women on boards, public funding for all elections, carbon tax and federal investment in education and R&D. Interestingly, some of his ideas affect Hollender himself, as he’s a wealthy man. The audience was interested in knowing if he walks the talk. They asked him if he voluntarily pays more tax than he needs to right now, and if he took the tax deduction on his second home. His replies were no (he prefers to give more to specific issues) and yes, he thinks he did get the deduction.”

    First, saying something is European, other than food or a sports car, should never be taken as a compliment.  Hollender’s ideas are very fascist/socialist and decrease a very fundamental part of anyone’s liberty, economic liberty!

    The very notion that taxing further the wealthiest 1% is foolish.  They are the investors, they are the job creators, they are the most charitable…they are already the highest tax payers.  Taxing the 1% even further will cripple an already weak economy (especially here in the United States). 

    How about a mandated minimum tax on all workers, like the 50% who do not pay federal income tax?  Let’s be fair, you should have to pay to play…

    Why eliminate a deduction on a second home?  That will discourage investment and spending in a depressed economy.

    Why force a company to have 50% female representation?  What if there aren’t any females who are as highly experienced or qualified as the males seeking the posistion?

    • Anonymous

      I’d love to see a citation for that claim that 50% of workers don’t pay federal income tax. That’s a new one! 

    • Dave Shires

      I agree that automatically worshiping something just because it’s “European” isn’t a good practice.  However, I’m also sick and tired of this nonsense that the 1% are the only “job creators” out there and that raising taxes on them is some kind of gross affront on liberty.

      I’m not suggesting socialism, I’m suggesting that we currently have an imbalance.  Hilariously, most of our current dept is caused by spending insane amounts of money on wars to subsidize oil  Then only real benefactors of these wars have been the 1%. I suggest they cough up some funds to help get us out of this mess.

      While we’re at it, raise the gas tax by at least 50 cents.  There, see, I also hate poor people.

      • Anonymous

         Hey Dave,

        You are right, they aren’t the only job creators…thank God!  However they do pay a tremendous portion of taxes collected.  Go down another few percentage points, take the top 5% for example…they pay over 50% of the taxes, the top 10% pay almost 70%. 

        You are correct, there really is an imbalance… 

        I believe that it is an affront on liberty, in every sense of the word.  Just try and not pay your taxes, see where you end up.

        Taking 1% here, and 1% there, eventually gets us up to an unsustainable number. 

        • Dave Shires

          Yes, the numbers are more or less true, but I have zero moral problem with that.  Despite our current financial woes (and yes, our debt is no joke), I have no problem with the wealthy paying a much higher percentage of the costs.  That doesn’t make me some weirdo socialist, I think it’s frankly quite practical.  Contrary to popular myth, most people who didn’t inherit money were not magically transported to wealth by pure hard work – many aspects of American culture and government helped.  That’s worth paying for.

          And again, raise the gas tax 50 cents per gallon and use it to create massive infrastructure programs in particular battery research and high speed rail.  The economy would bloom in 3-5 years, millionaires would be created, and people would ultimately save money despite all the whining that would occur.  

  • Anonymous
    • Anonymous

      “workers,” (who you referenced) is a different group from the “tax-payers” in the articles you point to. Retired people, stay at home moms, college students who work a few hours a week — anyone who earns any money at al or is married to someone who does has to file a tax return. That doesn’t mean that we should be taxing those people because they didn’t earn enough money. Even if we did it wouldn’t add up to much. 

  • Anonymous

    You know what else won’t add up to anything, an increase in tax on the wealthiest Americans…

    Go ahead and take 100% of the top 1%’s income and you can’t even pay off the annual operating budget of the federal government. (Do that and what do you think will happen, politicians will just use the extra money to fund more government programs anyways.)

    We are $15,000,000,000,000 ( that’s 15 trillion) in debt, which is what $8,000,000,000,000 ( 8 trillion) spent in the last three years.  We have over $100,000,000,000,000 ( 100 trillion) in unfunded liabilities and Jeffrey Hollender thinks the solution is to follow Europe’s example!

  • http://twitter.com/WECareHealth Lavinia Weissman

    I find comparing Europe to the US and more is getting off base.  The reality is in EU there is more permission to speak about embedding sustainability into the social framework, which is the 3rd pillar to profit, planet, people or equity, environment and economy.

    The door to wider reach of sustainability is to examine our culture as an educational initiative which invites everyone into an examination of values and personal leadership.

  • Anonymous

    Dave,
     
    Why call something practical when the numbers do not add up?

    Taxing the wealthiest Americans gets us nowhere closer to a goal of balancing our budget or paying off our debt.  Taxing any American more does nothing to help our current situation. 

    I should also say that private companies are kicking butt in battery research and development; they don’t need the federal government to incentivise them to continue doing so, the free market is taking care of that.  Let’s leave the federal government and their “choose a winner” philosophy out of the free market. (Solyndra)

    Lastly, I have never heard of such a “popular myth” as you mentioned.  What I am familiar with is that this is the United States of America, where a person can work their tail off so that they and their children can have a better station in life than the previous generation had…becuase of capitalism, our constitution, the liberties it protects, and the grace of God. 

    There are no guarantees, but your chances are better with hard work and education…that goes for the wealthy too!