This week the government of Japan inked an agreement with the southeast Asian nation of Laos that will permit Japanese firms to earn carbon credits and assist the landlocked country of 6.2 million with the reduction its carbon dioxide emissions. This is the seventh such agreement under the Joint Crediting Mechanism (JDM) between Japan and a developing country.
Curiously, the country that hosted the Kyoto climate talks over twenty years ago and sparked the eponymous protocol is now launching carbon credit programs on its own. Compared to the Clean Development Mechanism (CDM), which emanated from the Kyoto Protocol, JDM programs are solely between the two governments: Japan’s and the other country with whom such an agreement is signed. One complaint of the CDM program is that companies wishing to launch carbon credit programs must go through a lengthy and layered process under the auspices of the United Nations—Japan’s program, on the other hand, skips such steps entirely.
So why would Japan venture on its own with its own low-carbon scheme?
Is strategic philanthropy smart business? More and more companies are donating goods, services or cash for good causes—causes that fit a company’s overall strategy. Corporate philanthropy often gets a bad rap, but the reality is the largesse of industrialists past and present has helped build a strong America. Regardless, past corporate scandals, globalized supply chains with dubious social impacts and environmental degradation together mean companies just cannot cut a check and say they are “doing good.”
So they are doing more, and yes, partly out of self-interest. One company embarking on a strategic philanthropy agenda is the multinational company, SAP. The company has recently ramped up donations of its technologies across the world. At first glance, they are compassionate, but there is more behind giving out free software for a good cause. As in the case of many companies, emerging and “frontier” markets are the last places where SAP can grow, and these countries offer potentially huge rewards and returns. So strategic philanthropy as part of a corporate social responsibility (CSR) in emerging markets agenda, is wise, yet complicated, policy.
At the same time, watchdogs both local and global behoove a company to be a good community and social citizen. Furthermore, in an age where professionals want more than a paycheck, and in fact, want to work at a company they believe has a strong social purpose, programs like that of SAP’s are the building blocks to employee engagement and entrenching themselves as solid, responsive stakeholders. For SAP, this is not just about keeping smiles on the faces of employees at its Waldorf headquarters, or Palo Alto and other regional offices—establishing programs for social good is also a way to groom and develop local talent to sustain the company’s long-term future. Last week, I spoke on the telephone with Brittany Lothe, SAP’s Director of Global CSR, to learn more about the company’s approach towards strategic philanthropy.
Can a cash infusion from China help save Detroit? While downtown Detroit has experienced much revitalization, in part thanks to Dan Gilbert and Mike Ilitch, much of the city outside Motown’s center and the Woodward Avenue corridor suffers. Once home to over 1.8 million people, the city’s population cratered over the past decade and now stands at just over 700,000. Speaking of home, the government of this city of houses, not apartments, has razed thousands of homes. Many have been empty for years; homeowners simply walked away from others as that option was a more favorable proposition than trying to sell or rent them.
As the city stumbled into what is now the largest municipal bankruptcy outside of Orange County’s 1994 crisis, countless houses faced few prospects other than demolition because no infrastructure exists to support them. Despite a declining population, an incompetent and often corrupt city government was still determined to provide services at the level of a city of almost 2 million people when only one-third that number actually lived there—and often failed at that.
Now, tales of Chinese investors willing to snatch Detroit homes by the handful are all over social media sites in China and the U.S. press. Could a massive investment in homes and offices help Detroit recover?
Can a little Dead Sea venture named Naked Sea Salt heal divisions in the Holy Land? Everyone has a say in the Israeli-Palestinian conflict, from powerful lobbying groups here in the U.S. to states in the Middle East apoplectic over the mere mention of Israel. The reality is, while people abroad squabble, Israelis and Palestinians will live side-by-side for the foreseeable future. Could commerce be a path to peace, similar to the development of the European Economic Community (which led to the European Union) and its role in healing Europe in the years after World War II?
Well, it may only be a grain of progress, but Naked Sea Salt is an example of how Israelis and Palestinians are working together on an economic goal. On the edge of the Dead Sea, a small social enterprise harvests salt the way it has been done for centuries. The CEO of the company, Ari Fruchter, attempted to raise money on Kickstarter, and he more than succeeded: the campaign passed its fundraising goal within 48 hours and is close to tripling it.
GM is joining the growing crowd of companies joining the “landfill-free” agenda. Many companies tout their “zero-waste” policies in their factories – claims that often lie on a slippery slope. “Zero waste” is a noble, but impossible goal: hazardous waste, for example, adds to the complexity because local regulations often govern how such materials are disposed. Nevertheless, “landfill-free” is becoming the mantra at GM, a curious car company amplifying its talk about “sustainability.” The company says it is on a mission to slash waste globally, with the two latest landfill-free facilities in Thailand and South Korea.
Waste diversion efforts are about more than saving on disposal costs: they are a way to inspire innovation and competition within a company as well as engage and motivate employees. Last week, I had another conversation with John Bradburn, GM’s manager of waste reduction efforts, to learn about what the automaker has done to slash waste across its global operations.
If you are not familiar with Maersk, you should be. The Danish giant touches your life more than you would think, and the $57 billion shipping behemoth is also transforming, albeit slowly, how it conducts business. The results could have an impact on how products are shipped across the globe’s oceans. And starting this summer, the company has ventured into “green shipping.”
No group of stakeholders can put pressure on a company to the degree investors can, and this is even true of the titans within the shipping and logistics industries. Earlier this summer a cross-industry coalition, the Sustainable Shipping Initiative, hosted an event at which a Dutch bank representative noted the way in which containers ships are financed will slowly change. More investors will demand transparency and environmental performance—as in those pesky, or in the case of the shipping industry, the massive amounts of carbon emissions emitted into the earth’s atmosphere.
We all hear the mantra how we should all be “buying local,” which is a noble, but often unrealistic idea for several reasons. First, international trade has been the foundation of the global economy for centuries. Companies’ supply chains are becoming more complicated, which means your car, mobile phone, or to creep you out — your favorite snack — could have parts, or ingredients, from several countries. And consumers in a more mobile world want and covet products from the homeland—walk into your local Costco, check your metropolitan area’s demographics, and scope out some of the products available in that local warehouse store’s aisles.
At the same time, shipping fuel is amongst the filthiest energy used on the planet due to its sulfur content. Additionally, it contributes almost three percent to global CO2 emissions—or about the same amount as a major global economy. And with 90 percent of international trade relying on ships and boats, emissions will only go up if the industry does not change.
So what is Maersk doing?
India has made impressive strides in reducing its child mortality rate in the last four decades. Much work remains to be done, however, as India still loses too many children to diseases that can be easily prevented. Of the 26 million Indian children born annually, 1.83 million die before they reach age five. And for India’s poor children, the odds are especially daunting with a child mortality rate three times higher than that of the rich.
Many of the reasons for these abysmal statistics are cultural. Women still prefer to give birth at home while superstitions over children’s care and food stubbornly persist. Logistics also present obstacles: health facilities are often too far away from India’s rural poor. Finally, India only spends four percent of GDP on health care, according to the World Bank; other estimates place that figure at a miserly one percent. Even if a woman lives near a public hospital, she often confronts overwhelmed medical professionals who show little tolerance for the poor or uneducated.
Now businesses are stepping in to fill in the gaps a dismissive government and overwhelmed NGOs cannot close. More companies, Indian and those based abroad, work with women at the “bottom of the pyramid” to deliver front line medical care to peers within their communities. India’s booming technology sector can enhance their duties. One mobile technology firm has become a model of how a business can deliver a product that inspires innovation, engages its employees and saves the lives of women and their children.
Last week, UPS released its annual sustainability report. The $53 billion logistics and parcel delivery service has long been a CSR leader, releasing reports year after year that are frank about the company’s challenges and therefore leading examples of transparency. Its 2012 report is no different: full of aspirational goals, of course, but also laden with data on the company’s successes and shortcomings.
To that end, I had a chat via telephone with UPS’ Steve Leffin, the company’s Director of Global Sustainability, and Kristen Petrella, a UPS spokesperson. We discussed one metric that caught my eye: a reduction in fuel use within the company’s air fleet while shipping volume rose almost 5 percent.
“You can have the most efficient vehicles out there, but if you’re driving them while empty, you’re not sustainable.” – Steve Leffin, UPS
Tesla Motors has been on a strong run in the days leading up to its August 7 earnings report. Sales are up and the Model S is the 2013 Motor Trends Car of the Year. The Silicon Valley startup is exporting more cars to Europe while at home, automakers such as GM have taken notice.
Now, the luxury electric vehicle designer and manufacturer is venturing into China. A showroom will open in Beijing, prescient timing as automobile sales continue to surge and the air quality in the country’s largest cities only worsen. But can Tesla succeed in a country more keen on manufacturing electric vehicles (EVs) than actually buying them?
It is time for mayors and real estate developers to talk about equitable development. “Smart growth,” (or “smart development”) has been in the lexicon of environmentalists for over a generation. Californians would argue they coined the terms: after all, the state’s rapid population growth from World War II through the 1980s pushed many community leaders, generally within the suburbs, to rethink growth and development. Much of the discussion, however, was driven by NIMBYs – folks concerned with local development – “not in my backyard!”
But for several years, the NIMBYs’ children have moved back to cities in California. Throughout the U.S., downtown and urban cores once described as “dangerous” now teem with hipsters, young professionals and the “creative types.” Brooklyn’s Williamsburg, LA’s Silver Lake and the Pearl District in Portland, OR, are only a few examples of neighborhoods that have gone through gentrification. And even in Detroit, where the population has cratered and government has teetered into bankruptcy, professionals are moving into downtown lofts.
With the odds in favor this trend will not only continue, but accelerate. City halls discuss “smart growth” more than ever, only with a “sustainability” angle attached to future plans that include transit centers, bike paths, light rail, high-density housing, mixed-use developments and yes, of course, urban gardens.
But while city planners and developers talk about LEED, no one is leading the discussion about an overlooked challenge: what happens to the residents who have lived in these longstanding urban neighborhoods for years, if not generations? And will these people feel welcomed in these reborn, “revitalized” neighborhoods? I admit I had overlooked this factor in the past, like last year when I wrote about Columbia University’s plans for a new Manhattanville campus—without mentioning that this is an established and historic African-American community in West Harlem.
To better understand the displacement that can occur alongside redevelopment, I spoke with two experts on urban planning who are well versed on equitable development: Michael Lythcott, who looks at such projects from a social impact perspective, and Vernice Miller-Travis, an expert in brownfield redevelopment.
Another “all natural” label bites the dust.
In an emailed statement, PepsiCo announced late last week it will remove the “all natural” moniker from its Naked Juice product line for the foreseeable future. According to the Associated Press, PepsiCo agreed to pay $9 million to settle a lawsuit its plaintiffs filed, complaining the fruit, vegetable and smoothie drinks contained ingredients that did not fit the definition of “natural.” Synthetic fiber and vitamins were the offending ingredients in this case.
For a company insisting its corporate social responsibility agenda is focused on nutrition and sustainability, PepsiCo’s settlement is another example of the dubious labels it and other large food and beverage companies have used over the years. PepsiCo and its competitors have a long history of resisting both more transparent food labeling as well as demands to make their products genuinely more healthful for consumers.
The Naked Juice debacle is even more embarrassing because, according to the AP’s Candice Choi, the company knew its target customers who purchase the $4 bottles of juice would pay more per bottle if vitamins and other ingredients in the products were not synthetic and hence, truly natural.
Bicycling has arrived in the Motor City.
While the press focuses on Detroit’s bankruptcy, Dan Gilbert and Quicken Loans continue to invest in Motown. Gilbert’s Rock Ventures, his umbrella holdings group for dozens of real estate investments and other businesses, has now gone a step further and shown commitment to employees’ well-being and schedule. Yesterday Rock Ventures launched a bike sharing program in tandem with Zagster, the six-year-old bicycle sharing service that is behind such programs in Chicago, Boston and Philadelphia.
According to a press release, 48 bicycles are available to about 9,200 employees working within Rock Venture’s properties and companies in downtown Detroit. For a city that once epitomized the American dream—a house with a two-car garage—this edgy employee benefit is a step in showing that Detroit’s slow, painful yet inspiring transformation is well underway.
Tom’s of Maine may now be part of the Colgate-Palmolive family, but to its majority owner’s credit, the earthy, yet polished, personal care products company is still a leader when it comes to sustainability. As Earth911 editor Mary Mazzoni’s feature article earlier this month explained, Tom’s is now tinkering with potato starch for some its polylactic acid (PLA) packaging. Potatoes are a huge part of Maine’s farming sector, but the company also has a long-term opportunity to divert food waste or crops that are below food grade from landfills and instead churn them into bio-plastic resin.
Compared to its competitors within the personal care and consumer packaged goods industries, Tom’s has pushed the boundaries of packaging sustainability and innovation. The company has ditched cardboard for some of its toothpastes; two years ago Tom’s eliminated aluminum toothpaste tubes in favor of laminate, which the company says is lighter, less energy intensive and reduces the number of steps from sourcing to shipping when compared to aluminum. One caveat: those laminate tubes have to be shipped to Terracycle if your community cannot accept them in the recycling stream. Nevertheless, the company has made progress as now 40 percent of the materials used in packaging is sourced from recycled materials.
So, what is the future of potato-based packaging, especially with concern over excessive use of conventional paper, cardboard and of course, fossil fuel-based plastic?
Should GM fret at the thought of Tesla? The Big 3 automakers had sneered at electric vehicles (EVs) for years, but a slow shift is underway. Ford has its plug-ins with the Fusion Energi and C-MAX Energi; Chrysler, thanks to Fiat, has a little toe in the EV waters with the 500e on California roads; and GM touts the Volt and Spark EV.
Speaking of GM, the stodgy automaker may be slowly changing its ways: CEO Dan Akerson told Bloomberg in an interview last week the company is taking a close look at Tesla Motors to gauge how the Silicon Valley upstart could eventually threaten GM’s business.
Considering GM still draws the ire of electric car advocates years after the EV1 saga, Ackerson’s comments might induce eye-rolling. But the road to electrification, while full of potholes, is underway; and speaking of Tesla, the company scored its first profitable quarter this year and has a market capitalization now slightly higher than Fiat. Meanwhile, Ackerson has succeeded in changing GM’s sclerotic and inward-looking company culture. With a new focus on innovation and design, electrification has got to be part of any automaker’s strategy. A close examination of Tesla and its success would only be logical on GM’s behalf.
Once upon a time, before Amazon.com, much of America and Canada shopped at Sears. Folks with access to little more than the local general store could comb through its catalogs and buy everything from, well, combs to stately do-it-yourself houses. For decades, its brick-and-mortar stores were the only place to shop, including in my hometown of Cupertino. The tallest building in the world once hosted the firm’s headquarters and shared its name. Before Walmart’s agenda to keep workers and communities in poverty with “low prices” swept through much of the land, Sears offered decent wages for employees and a place to buy solid appliances, have your car filled up and serviced, take awkward family photos at the portrait studio, buy insurance and yes, purchase clothes.
But the last 20 years have not been kind to Sears: in 1992 the retailer suffered its first quarterly loss since the 1930s, and the company has been stuck in its ways as its competitors adjusted to shifting consumer habits. In stepped in Edward “Fast Eddie” Lampert, a financier who had already swooped up Kmart while that flailing company was mired in bankruptcy. In 2005, Kmart acquired Sears, and Lampert christened the combination of two losing retailers Sears Holdings. What has followed for eight years is a story of cost-cutting and employee turnover so sordid that even Wall Street’s most heralded publications, from Forbes to Fortune, have savaged Lampert’s performance as CEO of Sears.