“This series,” explained Marketplace’s host Kai Ryssdal, “is all about whether consumer economy is sustainable on every single level, for businesses, for consumers and for the people who work in it.”
With such a premise, I couldn’t help but listen to Marketplace all week. The series didn’t disappoint and besides providing a great example of what public radio is all about, it also gave me some food for thought. Here are some of the more interesting lessons I’ve learned from it:
Measuring social impact has always been a challenge for companies. “Companies seeking to create scalable social businesses need a measurement system that monitors their progress in delivering social benefits and economic value,” FSG’s Greg Hills and Marc Pfitzer wrote last month on HBR. “Only by tracking both the social and business results and how they’re connected can firms hope to have a large-scale social impact.”
Hills and Pfitzer referenced Coca Cola and how the company measured the shared value of an initiative it developed in Brazil. But what about small social enterprises working at the base of the pyramid without the resources companies like Coca Cola have? How can these entrepreneurs effectively measure their progress and impact? Well, Grameen Foundation is here to help.
Headquartered in Washington, DC, Grameen Foundation works with social enterprises to “better determine their clients’ needs, the effectiveness and efficiency of their programs, and how quickly they are able to help people move from poverty to financial self-sufficiency.”
How does it do it and what services does it offer exactly? To learn more, I spoke with Steve Wright, Grameen Foundation’s VP of Poverty Insights, whom I first heard at the Social Innovation Summit last month in New York. Here’s an edited version of the interview:
If you read Bloomberg’s recent story on the divestment movement, you could easily reach the conclusion that the oil and gas industry has nothing to worry about.
First, university endowment funds account for less than one percent of total assets under management. Second, it seems that the universities with the largest endowments strongly resist the idea of divestment, and even if they miraculously agree to do so, the article mentions that “selling stocks in fossil fuel companies will likely not drive stock prices down for those companies because buyers are waiting to purchase those stocks.”
And did we mention that according to a research conducted by the American Petroleum Institute (API), oil and natural gas company stocks outperform all other asset classes in college and university endowments?
Add to all those reasons the fact that so far only five relatively small colleges agreed to divest from 200 fossil fuel companies identified by 350.org, and this divestment campaign begins to look like a fly fighting an elephant.
So, there’s no reason for the fossil fuel industry to be worried, right? Well, not so fast. Actually, a closer look might bring you to a different conclusion. It’s still David against Goliath, but we all know how that fight ended. So here are five reasons that might keep the executives of the oil and gas companies awake at night because of Bill McKibben and his army of campaigners:
“Most supplier responsibility programs are compliance-focused, with most of their resources consumed by conducting audits, correcting deficiencies, and following up,” Tim Mohin writes in his book “Changing Business from the Inside Out.”
How well has this approach worked so far? After the suicides in Foxconn, the building collapse in Bangladesh and other supply chain tragedies we have witnessed over the years, you already know the answer.
One approach to fixing these programs can be found in the factory safety accord in Bangladesh, which puts more emphasis on better inspection mechanisms, ensuring that factories will make the necessary upgrades to provide safe working conditions and protect workers’ rights.
But what if, instead of trying to improve these periodic audits and inspections, companies focused their efforts on establishing direct communication lines with the workers to learn about problems – and the effectiveness of solutions – in real time?
The idea is that that better communication can lead to improved worker conditions. It’s easier said than done, which is why I was glad to learn about one interesting solution offered by Good World Solutions.
To the list of news items revealed last week that the Obama Administration doesn’t seem to be comfortable talking about, you can now add one more item: The updated social cost of carbon (SCC).
The update on the SCC, which is “an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year,” wasn’t leaked by anyone, but was actually published by the White House Office of Management and Budget (OMB). Nevertheless, I have a feeling the Administration would prefer this information was kept in the dark.
Why? Because the new estimates can cause the Administration a serious headache when it comes to the upcoming decision on the Keystone XL pipeline.
Our story begins on May 31, when Heather Zichal wrote a post for the White House blog on the new energy efficiency standards for microwave ovens that can save consumers money. In the post, Zichal mentioned that “the underlying analysis of these standards includes an update to the social cost of carbon values, which draw on the best available science to calculate the benefits of reducing greenhouse gas emissions, as discussed in this year’s Economic Report of the President.”
Last year, PwC released a report presenting seven reasons why investors care about sustainability. The first one was “sustainability shareholder resolutions gaining traction,” showing growing support by investors for environmental and social shareholder resolutions. “In 2010, a Ceres survey of 44 asset owners and 46 asset managers with collective assets totaling more than $12 trillion found nearly all respondents viewed climate change as a material concern,” PwC wrote.
Now, a new study from Ceres shows that while many investors might say they view climate change as a material concern, when it comes to voting on shareholder resolutions filed with companies on climate change business risks, they act like they don’t.
The study is an analysis of proxy votes cast in 2012 by 43 of the largest U.S. mutual fund companies. Among more than 40 large U.S. mutual fund families that were included in this study, only eight have an average support of over 50 percent for climate-related shareholder resolutions. Among these eight fund families, only three supported the vast majority (over 80 percent) of these climate-related shareholder resolutions – DWS, AllianceBernstein and Oppenheimer.
Bob Langert, McDonald’s VP of Sustainability told Bloomberg last September that “McDonald’s can be a very healthy lifestyle. I love to be healthy and I love the variety. I love that I can have a wonderful grilled chicken salad today, and a quarter pounder with cheese tomorrow…”
Langert’s diet sounds indeed balanced but apparently it is not very common among McDonald’s customers, at least not the salads part of it. McDonald’s CEO Don Thompson said last week that salads make up two to three percent of U.S. restaurant sales. In other words, McDonald’s customers might be into a grilled chicken but not so much into a grilled chicken salad.
The company seems to believe that this trend will continue. “I don’t see salads as being a major growth driver in the near future,” Thompson said according to Bloomberg, adding that “instead of advertising salads, the company may push hamburgers and chicken sandwiches.”
Does it mean that McDonald’s is losing hope in selling more fruit and vegetables? Not at all! Thomson explained that “there are other ways to sell more fruits and vegetables. For example, some of the chain’s new McWraps have tomato and cucumber slices, as well as shredded lettuce.”
Coworking spaces are on the rise. According to the latest Global Coworking Census, Deskwanted, released in March, more than 110,000 people currently work in one of the nearly 2,500 coworking spaces available worldwide, an increase of 83 percent and 117 percent respectively from last year. In the U.S. alone, there are now nearly 800 commercial co-working facilities, up from about 300 only two years ago.
Many of these places, explains author Anne Kreamer, became attractive to the growing numbers of entrepreneurs and freelancers by offering collaborative networks, built-in resources, and a dynamic ecosystem, fostering innovation and making starting a business simpler. These key features seem to be describing Green Spaces, one of New York City’s 20-plus coworking spaces that celebrated its fifth anniversary last week.
Green Spaces, which also has another location in Denver, Colorado, has a vision of becoming a catalyst for “values-driven communities of people who innovate, celebrate and do good.” This vision not only made Green Spaces a place where social entrepreneurs feel at home, but also transformed it into an important hub for the green business community in New York. To learn more about the journey Green Spaces went through in the last five years, I spoke with its co-founder and director, Marissa Feinberg.
Last week, my mother called me, sounding worried. She had just read an article in Israel’s largest newspaper saying that Airbnb was declared illegal in New York, following the decision of a New York judge that Nigel Warren, who rented out part of his home on Airbnb, violated the illegal hotel law and should pay $2,400 as a fine.
My mom’s main concern wasn’t so much the future prospects of Airbnb, but rather if this development jeopardized the reservation my parents made on Airbnb for their upcoming visit to the city. I told her there’s no reason for concern and if anyone should be worrying, it is Airbnb, not her, as this ruling raises questions on the ability of the company to sustain its current successful business model.
And it’s not just Airbnb. Both the state and city of New York have been challenging, in the past year or so, a number of sharing economy companies and their disruptive models, including Uber, SideCar and RelayRides. So what’s going on here – is New York becoming unfriendly territory for sharing economy innovations? And even more importantly, how will these legal battles impact the sharing economy and its efforts to go mainstream?
A year ago I wrote about the main reasons Apple fails time and again when it comes to CSR. One of the problems mentioned was that Apple doesn’t have strong CSR leadership. Well, I guess now we can take this point off the list, at least partially.
Apple CEO Tim Cook announced on Tuesday that Former U.S. EPA chief Lisa Jackson has been hired as VP of environmental initiatives. Cook made the announcement at the annual D: All Things D conference. According to the Washington Post, he said Jackson will be reporting directly to him and is “going to be coordinating a lot of this activity across the company.”
Jackson seems to be very excited about her new job. She wrote in an e-mail: “I’m incredibly impressed with Apple’s commitment to the environment and I’m thrilled to be joining the team.”
This is certainly a surprising move on both sides – Apple, so far, had mostly a reactive strategy when it came to its environmental and social impacts and doesn’t report to the CDP or release a comprehensive sustainability report like most other large corporations do. Jackson’s step is also uncommon among former EPA administrators, who usually don’t change their boss from the President of the United States to a CEO of a company, even if it’s called Apple.
So what does this all mean? Does Apple want become more sustainable? Will it become so with the addition of Jackson to its team? Or this is merely a PR move? Let’s try to look into these questions one by one:
In 1998, I heard about Shai Agassi for the first time. My roommate back then was working for TopTier Software, an Israeli company Agassi founded, and he told me a number of times about Agassi and what a smart entrepreneur he is.
Fifteen years later, I still believe my roommate was right about Agassi, even after Better Place, the company he founded in 2007 and was considered to have “the potential to eliminate the gasoline engine altogether,” filed a motion in an Israeli court earlier this week to close the company.
“This is a very sad day for all of us. We stand by the original vision as formulated by Shai Agassi of creating a green alternative that would lessen our dependence on highly polluting transportation technologies,” the company’s board said in a statement. “Unfortunately, the path to realizing that vision was difficult, complex and littered with obstacles, not all of which we were able to overcome.”
This is a very sad moment for anyone who believed in Agassi’s vision and in Better Place’s ability to disrupt the car market with electric vehicles and a network of battery swapping stations. Still, this is also an opportunity to learn some valuable lessons that might help other green innovators struggling with similar challenges. We looked at the failure of Better Place from a new product development perspective, and identified four key lessons.
There are already some lessons in corporate responsibility we can learn from the tragedy of the building collapse in Bangladesh. One of them, as Vikas Bajaj wrote in the New York Times, is that most brands and retailers offer consumers very little information about how their products are made, and hence conscious consumers have no choice but to educate themselves.
The example of H&M shows that no matter what type of CSR a company is pursuing, whether it’s ethical, altruistic or strategic, there are inherent flaws in the current corporate responsibility system that we need to address if we want to see real changes in the business landscape.
First, let’s talk about the hope we had to make significant progress by having large corporations like H&M commit to sustainability. The notion was that it would be faster to achieve change by convincing a large corporation to do the right thing rather than convincing dozens of governments where these corporations operate to do it.
Earlier this month Ernst & Young and GreenBiz Group released a new study, entitled ‘2013 Six Growing Trends in Corporate Sustainability.’ Based primarily on a survey of the GreenBiz Intelligence Panel of executives and thought leaders engaged in sustainability, this study reveals that “companies are increasingly connecting the dots between risk management and sustainability by making sustainability issues more prominent on corporate agendas.”
While the study shows that in general, companies are moving forward when it comes to sustainability, it seems they are still making progress incrementally rather than taking the fast lane. Nevertheless, it is still interesting to learn about the current trends in sustainable business and this report presents six of them that are shifting now the business landscape. Here they are:
On Tuesday, Apple’s CEO Tim Cook came to Washington to testify in front of a Senate panel examining how Apple used “loopholes” to avoid paying billions of dollars in U.S. taxes.
Apple is not the first or the only company to use these tax strategies to minimize its tax payments, but just like with the Foxconn episode, the company found out once again that being very successful and profitable also has its price in terms of higher accountability demands.
The reports on Apple’s tax avoidance and Cook’s testimony once again brought up the question of tax fairness and what it means nowadays when we expect companies to be responsible for the impacts of their decisions and activities on society.
To further explore this issue from a CSR perspective, we tried to answer some key questions that hopefully shed some light not just on Apple’s behavior, but also on the practice of taking advantage of tax loopholes in general.
What makes you excited? Is it Google Glass? A new iPhone app? The latest Star Trek movie sequel? Or maybe just David Beckham in general? While it would be hard to guess what specifically makes you excited, it’s probably not a sustainable product, brand or culture phenomenon.
In their ongoing quest to scale up sustainable consumption and make it the norm rather than the exception, companies have managed to identify multiple obstacles – from cost and availability to lack of consumer awareness. These are all important parts of the big picture, but today I’d like to focus on one factor which I believe can be a real game changer in sustainable consumption – the excitement factor.
Excitement can overcome almost any known obstacle, helping turn unlikely products, brands, or even presidential candidates and political movements into stellar success stories. But, excitement alone will only get companies so far. To make sustainable consumption work, they also need the other staple ingredients in the sustainability sauce, aka materiality (make it relevant) and storytelling (make it aspiring).
Still, excitement, I believe, is the secret sauce ingredient and can make the difference between small incremental progress in sustainable consumption and becoming the norm. But how can companies do it exactly? How can they get consumers excited over sustainability? While the keys to excitement may vary from one brand to the next, we have identified four points that can help make sustainable consumption exciting: