Looking for an alternative? Explore the sharing economy
By Adam Werbach and Andy Ruben
Today we’re launching yerdle, a purpose-driven company with the simple idea to make it as easy to share things with your friends as it is to buy new things online. We hope you’ll check it out in the Apple App Store or at www.yerdle.com.
We want to share with you our thinking about this particular moment. We believe that 2013 will signal the dawn of a new era for the sustainability movement that builds on the successes of environmentalism and corporate sustainability. We can call this the era of personal sustainability.
The first era of environmentalism focused on political action. The second was grounded in engaging corporations to lead. We are entering a new period in which we’re learning how to adapt human culture to function within natural limits. While the work from the first two eras continues, there is finally focus on this third era.
The golden years of the U.S. environmental movement arrived in the 1970’s, in the wake of visible environmental catastrophe. First stage smog alerts in Los Angeles kept kids inside, raw sewage poured into streams and rivers, the Cuyahoga River lit on fire and burned for days, the worldwide blue whale population sank below 6,000. In response the environmental movement tapped into public unrest and organized politicians to pass the bedrock of our environmental laws. In just a few short years they passed the Clean Air Act, the Clean Water Act, the Endangered Species Act and the National Environmental Policy Act. Corporations were antagonists in this model. Some corporations fought or cheated this new regulatory framework. Many others complied with their requirements, understanding that this was a new cost of doing business.
After the rush of progress in the 1970s, Washington-based environmental progress slowed. At the dawn of the twenty-first century it became clear to many of us that these same tools and techniques of activism were ineffective in the battle to combat climate change. Climate change is hard to see, and the ubiquity of CO2 makes it hard to regulate. Even though we know it’s happening, scientists are squirrely about connecting it to any single storm, even super-storms like Sandy or Katrina. Meanwhile the Bush Administration was outwardly antagonistic towards any environmental agenda, so change in Washington would not be forthcoming. There’s more analysis of this era in Adam’s speech, “Is Environmentalism Dead?”
Companies became the locus of action for environmental sustainability. In the absence of forward motion by the Federal government, companies took the lead, following the guidance of corporate sustainability pioneers like Paul Hawken, Amory Lovins, Bill McDonough, Anita Roddick, Yvonne Chouinard, Susie Tompkins-Buell, Gary Hirschberg, Hunter Lovins, Adam Lowry & Eric Ryan, Jeffrey Hollender and Ray Anderson. As energy prices rose, companies embraced energy efficiency for purely practical reasons.
No company better epitomized this change than the world’s largest company at the time, Walmart Stores. Walmart was under threat to its brand by union organizers and suffering from the loss of its charismatic founder, Sam Walton. Surprising everyone, including itself, Walmart became one of the first corporate leaders of the revitalized sustainability movement. Walmart’s public advocacy of sustainability under the executive leadership of Rob Walton and CEO Lee Scott marked the fall of the ideological wall of corporate opposition towards sustainability efforts. Almost overnight, the 60,000 suppliers of Walmart embraced energy efficiency in their supply chain in order to reduce waste and lower costs. Jeff Immelt of GE launched the ecomagination campaign a few weeks before Lee Scott gave his speech on 21st Century Leadership. Oil prices peaked in the summer of 2008, providing an even greater incentive. On the back of Vice President Al Gore’s Inconvenient Truth, climate change became common conversation.
This was a time when traditional environmental action forked into a broader sustainability movement. Sustainability, in a corporate sense, provided a way for companies to adopt environmentally-inspired ideas in a non-threatening framework. Sustainability meant a pathway to long-term profitability for businesses. Adam called this movement the Birth of Blue. Companies implemented packaging changes, reducing the inputs of plastic resin and water, thereby lowering transportation costs. Boutique sustainability consultancies like Act Now, Blu Skye, GreenOrder, BSR, Natural Logic, Futerra, Rocky Mountain Institute, Esty Partners, and Five Winds grew and helped these companies build internal capacity to embrace sustainability and push costs out of their supply chain. Larger brands entered the fray including Saatchi & Saatchi, PwC, Accenture, Cohn & Wolfe and ARUP and scaled up their practices. At conferences like Fortune Brainstorm Green, Corporate Eco-Forum, Sustainable Brands, TED, and LOHAS, those of us in the field marvelled each time a new corporate leader would give their “epiphany” speech. In it, the CEO would inevitably mention that their child helped them understand sustainability. Then they promised that they were still serious about making money.
Along with the corporate awakening, at the policy level we experienced divergent strategies as some organizations, like EDF and NRDC, pursued cap and trade legislation with corporate partners, while other organizations like the Sierra Club and Greenpeace sharpened their swords and attacked new coal-fired power plants and toxics in consumer products. This second era of sustainability work — fighting to tame and improve corporations — will continue for years into the future. Corporate laggards will finally come on board with basic reporting, compliance and analysis, while leaders will embrace ever higher goals for their performance. At the dawn of this era of corporate sustainability many people thought there was no serious contribution corporations could make. Today this type of activism is widely accepted and the blue framework — broader than environmentalism — is becoming mainstream. In 2012, the Economist, in its publication The World in 2012, declared,“Blue is becoming the new green.” The magazine did not mention that all of this effort was still failing at its most fundamental goal: to protect the future of life on the planet.
The success of corporate sustainability is only a pyrrhic victory. Breaking down the ideological wall between corporations and environmental innovation will be only one piece of the necessary progress. After the rush of energy and intention at the beginning of the era, progress in the corporate arena is beginning to slow. Too many companies now view small steps like reducing packaging or developing less toxic ingredients as the ending point, rather than a starting point.
Big box retailers have turned their attention to a price war, which is ultimately bad for workers, bad for product quality, and bad for the longer term needs of the customer. The price may be lower on the shelf, but the actual cost of use can be more expensive. For example, retailers compete with “cheater packs” to deceptively reduce the amount of product in a package. Pick up a jar of peanut butter and look at the indented bottom to see this in action. Similarly, retailers offer lower prices on mobile phones that ultimately cost customers more in electricity. This downward cycle is at odds with saving customers money, at a time when mobile apps are providing more visibility to the customer.
This short term thinking extends into the supply chain. Suppliers drive down cost per unit for their buyers, ignoring the true costs of their decisions. Bakeries will change a flour vendor over cents per pound, reducing the likelihood of true supply chain cost reductions. You can see the potential of this more connected supply chain revolution in Andy’s TED talk, in which he describes the journey of an eigtht ounce can of tomato sauce. These are only a few of the challenges that the corporate sustainability movement faces.
We’re now entering a third era of the sustainability movement: personal sustainability.
Our task is to learn how to survive and thrive on the planet together. We started with environmental activism that promoted legislative outcomes, we expanded our focus to include corporate sustainability, and now we need to embrace this new era of personal sustainability. Personal sustainability is the application of sustainability principles to the way we live our lives together; anthropologists would describe this as moving our focus to culture.
Over the past century our culture has begun to come to grips with the limits of the planet, but we’re only just beginning. By culture we mean to describe the unique set of learned behavioral patterns and social norms, passed on by generations, that serve as the functional instructions for how we interact with each other and the planet at large. Our first challenge is to apply this filter to our own frameworks. Concepts like the triple bottom line — social, economic and environmental sustainability — are being stretched to include culture as well. This era of personal sustainability moves us from centralized to decentralized decision making, as billions of people on their smartphones make collective decisions with each button they click. No longer is it one decisionmaker in Washington or Bentonville who’s in charge.
The territory isn’t new. Environmentalists and the broader sustainability movement have worked here before. Recycling could be described as one of the most durable and translatable new cultural norms in America. Plastic bag bans are now proliferating from Los Angeles to Portland. But the substantial focus of environmental activity over the last four decades has been in the political and corporate arena. The trend we’re seeing now is an increasing alignment between consumer demand, political opportunity, and technology that’s making the cultural arena ripe for attention. Environmental groups like the Sierra Club and the Audubon Society became politicized in the 1970s and 1980s in response to ecological crises and political opportunity. In the next decade we’ll see a similar shift as social technologies like Facebook and ubiquitous smartphones will allow effective advocacy in venues that have never existed before. New organizations like 350.org and Kiva.org have this cultural DNA at their core. Paul Hawken’s inspiring book, Blessed Unrest, chronicles the decentralized nature of this emerging movement. It’s time now to focus on the operating code for how we relate to each other.
The stakes couldn’t be higher. New population figures suggest that we’ll have 10 Billion people on the planet by 2100. The question: How do we collectively figure out how to live within the resource limits on the planet? The answer will be a combination of new technology and innovation, enhanced regulation and changes in our behavior. We’re seeing excellent progress in the technological innovation front. In 2004 the simple idea of an Apollo Project on clean energy was rejected by presidential candidate John Kerry. After 2008, President Obama implemented the broad strokes of a clean energy moonshot in the form of economic stimulus spending. While there’s still a long way to go in this arena, we’re on the right track. The Breakthrough Institute has created proposals to speed up this pace. However we haven’t had similar success on the cultural front. The overall state of green affinity is trending negative, even as the problems become more visible. But there are green shoots to examine.
The ‘sharing economy’ is a satisfying name for the way this will come to life. Rachel Botsman’s book “What’s Mine is Yours,” and Lisa Gansky’s “The Mesh” eloquently define this movement towards building more utility in the goods we’ve already produced. The rallying cry: access over ownership. Gansky, an investor and advisor for yerdle, is tracking thousands of start-ups and community efforts that more effectively distribute the resources that have already been created. AirBnB provides places to stay without building new hotel rooms. Zipcar provides cars by the mile, no need to buy one.
In certain parts of America — California, at least — we’ve begun to reach peak stuff. Peak stuff is the point at which we have so many things that storing, servicing and getting rid of things is a bigger challenge than finding the resources to buy them in the first place. There is a critical mass challenging the economic dictums that demand that we have ever more growth in the number of things we produce and sell. From local food and local business efforts, to fair trade and organic certifications, to B-Corporations and the new growth of cooperatives, there are thousands of efforts coalescing to change the way that people buy the things they need. Bill McKibben wrote a wonderful little book in 1998 entitled, The Hundred Dollar Holiday, which suggests that we focus on family and friends instead of shopping for Christmas. But collectively these efforts are a fraction of the status quo of business.
But if we are wobbling on the border of peak stuff, we may be closer to some changes than you may think. Consider this:
- U.S. consumers spend, on average, more than $1,000 per person per year on new durable goods.
- As a result, the U.S. self-storage industry grew from 289 million square feet in the 1980s to 2.2 billion square feet by 2010. That’s standing room for every man, woman and child in the US.
- Yet Americans still throw away almost 50 million tons of durable goods every year, many of these household items still in good working condition.
- And parents spend on average, $280 per child per year on toys.
- And the average U.S. household has 24 electronic devices.
- And more than half of U.S. homes have more than three televisions.
- Yet Americans are no more happy than they were in 1950.
Consider tents and how they might affect our happiness. Americans collectively buy over a million new tents every year. Most of them are unused for 99% of their useful life. We’re buying and storing millions of tents that are sitting in closets, garages and self-storage units instead of being outdoors where they belong. Let’s go further than that and consider the life satisfaction implications of these stranded assets. One of the barriers to taking on new sports is what we call the “cliff of doom.” Many sports and activities require an investment of over $500 to begin, which precludes people from enjoying new activities. Instead of buying new tents, sleeping bags, stoves and other camping gear, it’s better to borrow those things from a friend. And when it’s time for you to buy your gear, you’ll probably buy better, more durable items. Ideally things that you’ll share with your friends. Yes, there is an environmental cost of producing assets that are hardly ever enjoyed, but there is also a cultural cost as well. Tying up our natural and economic resources in unused items reduces our ability to use those resources to increase our happiness.
yerdle’s co-founder and head of engineering Carl Tashian served on the founding team of Zipcar. He reminds us frequently that car-sharing wasn’t as obvious as it seems now. Americans are adolescent capitalists, and we’re just now figuring out the behaviors around things that will lead to happiness instead of debt and clutter. Some forward-looking product manufacturers will encourage this emerging framework. Patagonia offers lifetime warranties for their products, and provides opportunities for aftermarket purchasing of their gear on eBay. Many companies will continue to compete based on lowest-price and cutting corners on quality. At some point America’s fantasmic relationship with shopping will come into balance.
This new era of personal sustainability will be lead by individuals and channelled by NGOs to drive companies and governments to higher performance. We only have hints to what this new era of personal sustainability will be, but we’re already seeing a rush of interest from recent Green MBAs, refugees from technology start-ups and those searching for greater returns on their investment of activism and time. Start-ups like yerdle and hundreds of others will provide tools to embrace personal sustainability. The time is right for something new.
Adam Werbach and Andy Ruben are co-founders of start-up sharing marketplace yerdle.com. Adam is the founder of Saatchi & Saatchi S and the former president of the Sierra Club. Andy launched Walmart’s sustainability efforts and served as their global head of strategy.