Now that most American and European retailers have signed on to plans to improve factory safety in Bangladesh, there seems to be a notion that the business world acted responsibly, more or less, following the factory building collapse that killed 1129 workers last April.
After all, as Bobbi Silten, senior VP for global responsibility at Gap said, “We may have two plans…but we have one shared purpose and that purpose is to improve worker safety in garment factories in Bangladesh.
We might even feel that the world is a bit of a better place now and hope we can get back to business as usual, aka buying cheap clothes from H&M, Walmart, Gap, Zara and other fast fashion retailers with little less guilt.
But is this really the case? Is fast fashion any more sustainable now due to the new safety plans? And how far are we really from the next tragedy? This might be a good time for a retrospective look at the events that took place after the latest tragedy in Bangladesh. Here are five lessons we can learn from them that might provide us with the answers we are looking for.
1. Businesses act incrementally, not systemically – “At the moment there’s a bias towards action, which is a good thing, but there’s a danger of that action being inevitably being about incremental change rather than some of the radical steps shifts and transformation that we require,” Peter Lacy, managing director at Accenture Sustainability Services explained last year in an interview with Jo Confino.
The response we saw to the tragedy in Bangladesh reflects this notion. While workers’ working conditions will probably be a bit better now, the supply chain they’re part of is still very unsustainable. For example, an article in the New York Times earlier this week explained how “Bangladesh’s garment and textile industries have contributed heavily to what experts describe as a water pollution disaster.”
What you’re eating for lunch today – chicken sandwich? Pasta pesto? Green salad? I don’t know about you and actually haven’t decided yet for myself either, but I know what Rob Rhinehart will have.
Hold your Charlton Heston jokes, he is probably going to have a bottle full of Soylent, a liquid food replacement he developed that is made from “broken-down multivitamins, raw elements like potassium and magnesium purchased from lab supply stores, and olive and fish oils, among other ingredients.”
This liquid food includes the essential ingredients the body needs to thrive explains Rhinehart, a 24-year-old programmer from Atlanta, who is the co-founder of a new startup by the same name (Soylent). In the last five months, he has been living on Soylent almost exclusively, with very occasional solid meal here and there, testing on himself the impacts of what he sees as “a more efficient way to stay nourished.”
And the results so far? Rhinehart reports improved concentration and strength as well as weight loss. “By every objective measure, I’m an incredibly healthy person,” he told Gawker’s Adrian Chen two months ago. “It’s been a huge change, not just in terms of sleep and gym performance but cognition. I can say I feel much more alert, and more patient, and optimistic.”
One adjective I might add to the list is visionary. While Rhinehart by no means suggests his new liquid drink is meant to revolutionize the food system, he certainly sees it as a way to provide a nutritious and efficient alternative to people who see food as more of a tiring chore aimed at keeping us energized and want to reduce the hassle of energy consumption to minimum.
Last month at Google’s “How green is the internet?” summit, Eric Schmidt, the company’s Executive Chairman, discussed the new digital age and how it could address global warming’s “fact problem.”
Schmidt said in his talk that “you can hold back knowledge, but you cannot prevent it from spreading. You can lie about the effects of climate change, but eventually you’ll be seen as a liar. It may take 5 years or 10 years.” Well, in the case of Republican Senator Jim Inhofe, one of the leading figures of what President Obama called “the flat-earth society,” it might take even longer, thanks to some help from Google.
Last Thursday, the company held a fundraiser at its D.C. headquarters - a $250 to $2,500 lunch - to benefit Inhofe as well as the national Republican Senatorial Committee. Why would a company whose Chairman basically just called climate change deniers liars support a senator who said that “global warming is the greatest hoax ever perpetrated on the American people”? Well, Google was happy to explain:
“We regularly host fundraisers for candidates, on both sides of the aisle, but that doesn’t mean we endorse all of their positions. And while we disagree on climate change policy, we share an interest with Senator Inhofe in the employees and data center we have in Oklahoma,” a Google spokesperson told the Guardian.
If you look at Inhofe’s positions, you will find that Google probably disagrees with him on every subject, from net neutrality to LGBT rights to immigration reform. Actually, it might be that the data center in Oklahoma is the only thing Google and Inhofe see eye-to-eye on. Well, maybe that and the need to have a low corporate tax.
Some ambitious green dreams fail and just fade away (Solyndra for example). Others fail but get a second chance. Better Place is lucky enough to be included in the second group. Less than two months after the company filed for bankruptcy, Israeli courts approved the recommendation of the company’s liquidators to sell all of its operations and assets in Israel to a group of U.S. and Canadian businessmen backed by the Association for the Promotion of the Electric Car in Israel.
The buyers will pay will pay about $5 million for Better Place Israel’s assets and $6.9 million for Better Place’s intellectual property. This is quite a good price considering that $800 million has been invested so far in Better Place, but as one of the lawyers involved in the liquidation process told Israeli newspaper TheMarker “while it looks like a small price was paid for a luxury boat, you need to remember this ship sank.”
When it comes to making clothes more sustainably, the conversation in the last couple of months has focused mainly on the working conditions in garment factories following the tragedies in Bangladesh.
Now, MAKING, a new app that Nike launched last week to help designers make informed decisions about the environmental impacts of the materials they choose, provides a reminder that sustainable apparel is not just about where the clothes are made, but also about the materials they are made of.
The new app is powered by data from the Nike Materials Sustainability Index (MSI), a database built on more than seven years of materials research and analysis. It aimed to help designers and product creators select materials with lower environmental impacts by ranking and comparing materials based on specific environmental impact areas like energy, water and waste.
This app is not just a valuable sustainability working tool for designers but also an interesting milestone in Nike’s journey from open innovation to systems innovation, as well as another indication (if you still need one) of Nike’s commitment to “move past the current incremental mindset into a genuine shift of entire systems.”
MAKING’s first version includes the 22 materials that are most commonly used in apparel and home goods, like silk, polyester, cotton, polypropylene and down. The app scores the materials in four specific environmental impact areas – chemistry (level of toxicity), energy/greenhouse gas intensity, water/land intensity and physical waste. The higher the score, the better the environmental footprint of the material (50 points is the maximum).
When hearing about a politician from the right side of the political map who believes we need to make a choice between fighting climate change and economic progress, you probably have a member of the GOP in mind. However, I doubt many would instinctively associate this notion with German Chancellor Angela Merkel.
Yet last month, Chancellor Merkel was the one who led the efforts to block new EU regulation aimed at improving the fuel efficiency of European cars over concerns the measure would cost jobs in the auto industry. “This is also about employment,” Merkel told reporters in Brussels. “That’s why we need time to review and evaluate and decide what we will do. That’s why the vote didn’t happen.”
This position was somewhat surprising considering that only two months ago, at Germany’s annual Petersberg climate talks, Merkel called for a binding pact by 2015 to reduce carbon emissions, saying that waiting is not an option as inactivity only increases the cost of combating climate change later on.
Even more surprising was what seems to be the main reason behind this flip-flop – heavy lobbying from the German automobile industry which represents BMW, Daimler, VW, Porsche and around 600 other companies and opposed the new regulation. It was pretty interesting to see that auto companies we usually hear about in the context of radical innovation in mobility, bold sustainability strategy or partnerships with carpooling ventures are also lobbying against tougher climate regulation.
Nintendo is the poster child of disruptive innovation. Disruption experts like Anthony Scott like to use the Wii as an example of new market disruption, explaining how “instead of focusing on sharper graphics, crisper sound, or more complicated interfaces, Nintendo is expanding the market by making video games simpler and more accessible.” Hell, there’s even a Harvard business case study entitled “Nintendo’s Disruptive Strategy: Implications for the Video Game Industry.”
Why am I bringing this up? Because when it comes to conflict minerals, Nintendo is no innovator, and actually seems to be lagging behind most other electronic companies. That’s why the company was targeted by the anti-slavery group Walk Free in a campaign asking Nintendo to ensure its suppliers source minerals responsibly.
So why is such an innovative company so behind when it comes to conflict minerals? And, no less important, can acting responsibly on conflict minerals be a disruptive force? Can it disrupt the disruptor?
Many of our discussions on the food industry are focused on the question of responsibility and who we’re expecting to take more of it – food companies? Consumers? Both? Yet, one important part is usually missing from this discussion – the regulator.
The reasons for this absence are plenty, but the bottom line is that the responsibility model we’re left with is usually a voluntary one, where food and beverage companies come up with their own initiatives because they are either pushed by NGOs or consumers to improve their policies and practices, or believe that this is the right thing to do.
But, there are still some exceptions, and last week we had the chance to see one of them when the U.S. Department of Agriculture (USDA) released the new Smart Snacks in School nutrition standards, which are aimed to ensure school vending machines include only healthy choices.
This was a rare event, not only because it was the first nutritional overhaul of school snacks in more than 30 years, but also because the food industry was part of the effort that led to creating these standards. This unusual collaboration got industry organizations like the American Beverage Association that usually opposes restrictive regulation, arguing it limits consumer freedom of choice, to applaud the new standards and commend the USDA for its work.
The new standards bring to mind two questions – first, is regulation really better than the voluntary model? And second, can the magic of government and industry collaborating together for the public benefit work outside the school cafeteria?
I’ve been intrigued with the concept of shared value ever since Michael Porter and Mark Kramer first wrote about it in 2006. I think the idea of creating economic value by creating societal value has the potential to be a game changer for many companies and help make progress on important societal issues. Yet, I have to admit that until last week, I didn’t connect it with selling bottled water.
I followed the conversations we had here and on Twitter with Heidi Paul, Nestlé EVP for Corporate Affairs, following the release of Nestlé Waters North America’s (NWNA) latest Creating Shared Value Report, and one question kept bugging me – can selling bottled water really be considered creating shared value (CSV)?
To find an answer I first went to Porter’s and Kramer’s 2010 HBR article to find their definition of creating shared value:
“The concept of shared value can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.”
So basically, CSV is about companies creating economic value by tackling a societal issue.
Now, let’s see what societal issue Nestlé is tackling by selling bottled water in North America. NWNA explained it in its Creating Shared Value report:
If you ask my 5-year old daughter what her favorite TV shows are, the answer would include almost exclusively Nick Jr. shows, from the Fresh Beat Band, to Max and Ruby, to Dora the Explorer. She also likes to spend time playing games on Nick Jr.’s website, and all in all, you can definitely say she’s a Nick Jr. fan. To be honest, so am I – they really produce great shows for kids.
This is why I was very disappointed to read last week that Nickelodeon (a sister network of Nick Jr. – both are subsidiaries of Viacom) said it won’t restrict ads for unhealthy food.
In response to a letter sent to Viacom earlier this month by four senators asking the company to “implement a clear policy to guide the marketing of food to children on Nickelodeon’s various media platforms,” the company responded, “As an entertainment company, Nickelodeon’s primary mission is to make the highest quality entertainment content in the world for kids. That is our expertise. We believe strongly that we must leave the science of nutrition to the experts.”
Interestingly, Nickelodeon’s approach is very different from its rival, Disney. Last year, Disney announced that by 2015, it will ban ads on its networks for fast foods and sugary cereals that don’t meet company’s nutrition standards. “We’ve taken steps across our company to support better choices for families, and now we’re taking the next important step forward. The emotional connection kids have to our characters and stories gives us a unique opportunity to continue to inspire and encourage them to lead healthier lives,” Robert A. Iger, Chairman and CEO of the Walt Disney Company said in Disney’s announcement.
The distinction between these approaches makes it a very interesting case. First, it makes you wonder why Nickelodeon is determined to take a different path, especially with the pressure it faces to follow in the footsteps of Disney. Also, does that mean that Nickelodeon is less responsible than Disney? And last, but not least, which approach will prove, eventually, to be more beneficial – Nickelodeon’s or Disney’s?
A few weeks ago, the local farmers market in my Brooklyn neighborhood finally started operating. I was happy, not just because of the fresh local strawberries and other produce available at the market, but also because I can recycle our food waste there.
So, for the next six months I’ll be shoving food scraps into our freezer, and taking them every Saturday to the composting bins at the farmers market. It’s really not that convenient, not to mention I have now very little room in the freezer for actual food, which is why last week I was thrilled to hear that Mayor Bloomberg is introducing a new food composting program that will put our freezer out of its misery.
The plan, the New York Times reported, is to start a residential composting program next year that will initially work on a voluntary basis in 150,000 single family homes in the city as well as in more than 100 high-rise buildings – covering, in total, more than five percent of the households in the city. More than 600 schools will take part as well.
The next stage will be, according to city sanitation officials quoted in the article, to expand the program to the entire city by 2015 or 2016. These officials also predicted “that within a few years, it will be mandatory. New Yorkers who do not separate their food scraps could be subject to fines, just as they are currently if they do not recycle plastic, paper or metal.”
Changing Tack, the final report of the Regeneration Roadmap, a joint project by GlobeScan and SustainAbility, has just launched last week. It focuses on the sustainability challenges that remain great and growing and the role business has to play in providing much needed solutions.
For business the premise of the report can be summarized the words of Winston Churchill: “I have nothing to offer but blood, toil, tears and sweat.” After all, how else you can describe the complex, systemic sustainability challenges business needs to address in an environment still dominated by short-term and unsustainable growth pressures? And did we mention the pubic that seems to have very little trust in business but very high expectations of it at the same time?
Just like with Churchill the aim here is victory, or in the words of the report “to guarantee present and future societies and ecosystems thrive.” But can business change its tack? Or even more importantly, does business really want to do it?
In a webcast that followed the launch of the report, Jo Confino of Guardian Sustainable Business, who moderated the discussion with senior executives from BMW, Cisco, FBDS and SC Johnson, put his finger on one of the problems:
“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: