“This is the perfect time to reinvent ourselves”
Socially Responsible Investing has enjoyed a period of growth spanning back several decades that could be the envy of many other sustainable industries. Even during the economic downturn following the housing crisis of 2008, SRI kept climbing its ladder. Financial assets under SRI management now exceed $33.3 Trillion (or one in every six dollars in professional investment management), and they’re being used to influence corporate governance in ways that have lasting and measurable impacts.
And yet, there’s a sense that we’re not moving the needle fast enough. As SRI manager Michael Kramer explains in a recent op-ed on GreenBiz.com,
“Corporate disclosure of social and environmental performance remains voluntary, and commitments to significantly reduce carbon emissions remain few and far between, even as we continue to develop new fossil fuel resources. Meanwhile, in marketing and facile public discourse, sustainability has been significantly watered down, too often simply serving as a green patina atop business as usual. It’s time that we dig deeper.”
That watering down has led some to consider shifting the conversation toward “resilience” as opposed to sustainability. Kramer is among them. Kramer and his colleagues recently released a new book called The Resilient Investor. The book includes a chapter called “Weaning off Wall Street”, which is a particularly refreshing strategy I’d not usually expect from an investment advisor.
California’s Right to Know GMO Labeling law (Prop. 37) appears to be in a dead heat heading into Tuesday’s election. It’s a dramatic reversal from polls earlier in the year, which had Prop 37 cruising to an easy victory. And with good reason…90 percent of Americans, regardless of political stripes, believe genetically modified foods should be labeled as such.
The reversal can be attributed almost entirely to the goliath sums of money being poured into the No on 37 coffers and the resulting deluge of advertisements designed to scare people into voting no. Money and politics are no strangers, but Prop 37 is on its way to becoming the proposition with the greatest sum of money ever spent, and the lopsided distribution of that spending has turned a shoo-in into a nailbiter.
But here’s the really crazy part. If I gave you the following list and said, “Which side do you think this company gave money to?”, I think you’d be very hard pressed to answer.
Over the next couple of weeks, we’ve asked our writers (and guests) to respond to the question” What is the Social Responsibility of Business?” Please comment away or contact us if you’d like to offer an opinion.
Adam Smith, an 18th century economist and author of The Wealth of Nations, is often viewed as the father of modern capitalism. Smith’s three main underlying concepts were the “invisible hand,” that individuals pursuing their own best self-interest would result in the greatest overall good to society, and that levels and kinds of goods and services in the market should be determined by the free market alone (i.e., not by government).
The first notion, that of the invisible hand, suggests that people essentially vote with their dollars. If we want a society with nothing but solar energy and organic food, we’d all go out and buy those things and not buy GMO or factory-farmed foods or coal-fired energy. This invisible hand would guide the suppliers in the marketplace to provide those goods and services for us, and there would be no such thing as coal power or GMO food.
The second notion, that an individual seeking his/her own best self-interest is actually the best thing that the person can do for society, indicated Smith’s belief that, given sufficient motivation for personal gain, each person would work hard, and as a result, society as a whole would benefit with more jobs, more competition, and better quality goods and services.
The third notion effectively just means that government should stay out of the market, and limit their role to police.
Paul Hawken gave the keynote at the TechConKona conference on the Big Island of Hawaii last week, and struck a chord of tempered enthusiasm and hope. Hawken began his speech by saying that Michael Kramer, a local sustainability advocate and socially responsible investment advisor, mentioned to Mr. Hawken that in Hawaii, in terms of sustainability, we might be 10 years behind the San Francisco Bay Area (Mr. Hawken’s home and place of business).
“That is subject to interpretation,” said Hawken. What we have in Hawaii, according to Hawken, is smallness, and that smallness may be the key to the scale at which real change can happen.
Mr. Hawken mentioned Bill McKibben’s article in Rolling Stone a couple of weeks ago, in which he noted some jaw-dropping stats, mostly pertaining to human population. About 7 months ago, on Halloween of 2011 to be just about exact, the human population crossed the 7 billion person mark. Depending on whose projections you read, the population is supposed to add anywhere from 2 to 8 billion more people in the not-too-distant future before scientists expect growth to level off.
But according to Hawken, it’s not the number that counts. It’s the impact. The impact per person has increased 500-1000 times. “We have more impact on the world around us in five minutes than our ancestors had in a year,” he said.
This week, the U.S. Supreme Court overturned a ruling by the Montana Supreme Court that challenged corporations’ right to influence elections with political contributions. In doing so, it reaffirmed its 2010 Supreme Court Decision “Citizens United versus the Federal Election Commission” (usually referred to simply as “Citizens United“) that effectively made it legal for corporations to spend an unlimited amount of money to influence elections.
The amount of money (including $35 Million spent already by one casino owner to defeat President Obama) and the negativity it has fueled so far in the 2012 election has crossed the line for many citizens. Politicians on each side of the aisle have urged President Barack Obama and Presumptive Nominee Romney to use less negativity in their campaigning. Cory Booker, Newark (NJ) Mayor and rising star of the Democratic Party, in particular, made headlines by assailing the negativity of both parties. In an ironic twist, his words were used in Republican Party attack ads against Barack Obama.
Negative campaigning works. It’s an old tactic that has impacted election after election. What’s new this year is the huge amount of money, and the sources of that money, that are fueling the fire.
Many of us in the sustainability community can be forgiven if we think the whole concept of jobs vs. the environment is a concept better taught in history classes than current events. After all, solar employs more people in Germany and the U.S. than steel, and every day we read news of energy efficiency work, green building, renewables, and the like, all creating good jobs.
The myth of jobs versus the environment has been perpetuated by the folks who stand to win contracts, but typically, reality rests not on the jobs/environment economic analysis, but rather the short term/long term mindset.
Take the conversion of farmland to housing, for instance. On Tuesday this week, I testified before the Land Use Commission in Honolulu County, which is considering the motion to develop farmland in the Ewa Plain, known as Ho’opili, into a subdivision of single family homes, courtesy of DR Horton. The farmland is Honolulu County’s most fertile remaining farmland, and given that Hawai’i imports 90% of its food from over 2500 miles away, one might expect that we’d want to preserve it.
Morgan Stanley, a global financial services firm with 1500 offices around the world, just announced they were offering a new set of investment options for clients interested in the triple bottom line. The “Investing with Impact Platform” is the first, to my knowledge, impact investment portfolio option for investors offered by one of the “too big to fail” banks that received a bailout from the U.S. government.
A recent Stanford University poll found that support for clean energy, vehicle emission standards, and energy efficiency programs is waning, particularly among Republicans. It’s the latest in a series of events that has some observers noting a distinct similarity between external happenings in Jimmy Carter’s presidency, and that of President Obama’s.
Michael Moore famously referred to President Jimmy Carter as “Debby Downer” in his documentary Capitalism: A love story. Carter was a Southern Baptist Preacher from Georgia who won the 1976 presidential election, only to face a global energy crisis and rising gas prices, as well as trouble in Iran. In the film, Carter appears in a public service announcement he famously made, asking Americans to conserve, to turn down their thermostats and wear a sweater, and to turn lights off when not necessary.
With the announcement of the closure of 50 big box retail outlets, Best Buy recently added more evidence to a growing suspicion about the demise of the big box store as the dominating force in retail. The electronics giant becomes the latest in a series of big box retailers that is shuttering large storefronts in some volume, following Circuit City, Borders, Sears, and several others.
It may be viewed as a sign of economic turbulence, the shift to online purchasing, or even a revitalized interest in buying local, but the trend is pretty clear. With large footprints, giant stores have huge tax, energy, water, and rent obligations, and drops in retail sales can become strong enough motivation for companies like Best Buy to jump ship.
One of the biggest challenges with big box stores is their footprint. Almost by definition, they create suburban sprawl and communities that are not walkable. And once they’re closed, all those tax incentives given by city councils to lure in the company become tax burdens to the local community with no benefits in job creation or opportunity. So…with all these stores closing up, the question shifts to what we do with them. Julia Christensen’s book, Big Box Reuse, offers some ideas.
I believe wholeheartedly in the power of community. For many startups, especially in this era of tight credit, getting a Kickstarter or IndieGogo campaign together and successfully launched can make the difference between launching a new product, expanding capacity, opening a new store….or not doing those things. The power of community to create green jobs in this way has never been stronger. And with crowdfunding websites, the community also benefits – it’s not a donation, it’s a contribution, for which you get some gifts from the company.
One great new project is an expansion of an organic cane juice business. Cane juice is a much healthier sweetener than processed white sugar sweetener, and Kalapana Organics is planning an expansion of their growing and processing operation to begin marketing their product coast to coast.
Kalapana is committed to organic agriculture and say in their video that they will help mentor other farmers in their area to help create more organic products and move agriculture away from chemically dependent production. According to the company, their juice has B-vitamins, electrolytes, and antioxidants, and, unlike most regular sweeteners, is very low in simple sugars and higher in complex carbs (meaning no crash, and you don’t need to knock back an energy drink just to make it through your workday).
For rewards, Kalapana is offering its juice, some instructions on how to create a great soil inoculant that will increase productivity of soil (it’s a mycorrhizae thing, for you biology nerds out there), and some of their turmeric hot sauce, all grown and made on the organic farm.
Solar is, by any measure, a hot industry. Even with the reduction in subsidies from Germany and Italy, the world’s two largest solar markets, global spending on solar installations continues to be high. Analysts suggest that this year’s solar purchases will amount to roughly the same as last year’s, 27 GW globally, despite the reduction in subsidies in many parts of the world. Part of this growing demand is the reduction in costs. Solar’s installed cost has dropped 10 percent just in the last 4 months, as manufacturers are being forced to compete in a heavily commoditized market.
While solar sales continue to climb, the margins for solar manufacturers continue to drop. First Solar, the U.S.’s largest solar manufacturer, has seen its share prices drop 90 percent, to a low of $20.21 per share this week. Even in China, where solar manufacturers are subsidized and labor is inexpensive, manufacturers are struggling from heavy competition. And earlier this month, Q-Cells, a German manufacturer, filed for insolvency. Q-Cells was once the world’s largest solar manufacturer.
Last week, the Los Angeles City Council voted to approve the CLEAN LA Solar Program. It’s a small scale feed-in tariff trial, set to install about 10 MW of solar installations around the city of Los Angeles, but if it proves successful, the Council has authorized the program’s expansion, with an additional 65 MW of capacity this year and 75 more MW through 2016.
Los Angeles derives about 40 percent of its power from coal, and only 14 percent from renewables (mostly wind and small hydro). It gets 7 percent from large hydro, 26 percent from natural gas, and 9 percent from nuclear. In July 2009, Mayor Villaraigosa publicly declared that the city would break its addiction to coal by 2020, and L.A. City Council President Eric Garcetti backed the mayor in a show of support for the program. The idea had national support from the Sierra Club’s Beyond Coal Campaign, which successfully defeated 139 of the proposed 150 new coal-fired power plant developments proposed under the Bush Administration.
Is that the only reason for CLEAN LA received the green light?
In an interesting political twist, Mayor Villaraigosa publicly declared a boycott of all things Arizona back when Arizona passed what many view as the most unabashedly racist laws, Senate Bill 1070, signed by Republican Governor Jan Brewer.
In one of those, “Now why didn’t I think of that” moments, I came across a Kickstarter campaign for the Companion Bike Seat. It’s elegant and simple, allowing one bike to become, effectively, two. Or at least to carry an extra rider. Now, instead of 7 miles per organic banana, bikes effectively can get 14. Maybe a bit less because of the extra effort involved, but you get the idea.
The founders simply saw a need in the marketplace and weren’t able to spot a product to fill that need. Xtracycle makes something similar, a cargo-bike conversion kit, but it runs in the $300 range, for which, well, people could buy their own bikes.
One of the genius elements of this piece of equipment is that it not only carries an extra person but also has a lockable storage space under the seat. It’s like adding not only an extra seat but also a trunk! Is this the hipster’s version of growing up and getting a minivan? Well, not quite…the storage space, according to the founders, absolutely definitely positively fits a six pack and some ice. If that’s growing up, then all of a sudden growing up doesn’t seem so bad.
VW is the second largest automaker in the world and Europe’s biggest. So I was excited to read VW’s recent announcement that it is fundamentally restructuring its entire group, setting big hairy audacious goals to invest 2/3 of its $80+ billion of R&D money from now to 2016 on “more efficient vehicles, powertrains and technologies, as well as environmentally compatible production.”
As an advocate of biodiesel, I sought out a Volkswagen Jetta TDI when I moved from my car-free mecca San Francisco to the car-dependent Honolulu last year. It’s one of the few diesel options out there besides giant pickup trucks, which, even on biodiesel, are not very sustainable because they’re largely unnecessary and impractical for me (since I don’t own a landscaping company), and fairly wasteful as gas-guzzlers. The TDI also used to get 42 in the city and 49 on the highway, meaning better than average fuel economy.
Perversely, new VW TDI models get much worse gas mileage than the older models. The new TDI Jetta gets 30/42, whereas the model I settled on, a 2005, gets 38/46. Part of the equation is that VW revamped its diesel technology to make the engine run more cleanly. The reduced pollution came with a cost to efficiency, it appears, as the newer models claim 90% less sooty emissions than “diesel engines of old.”
Still, it’s tempting to view Volkswagen as a greener car. It’s German, and Germany has a Green Party President and is the world’s leader in solar power. Will the new R&D push clean things up?
See Van Jones live June 13th and 14th in Portland and Seattle! Click here for more information.
April 4th is the anniversary of one of the saddest moments in American history, the date on which Dr. Martin Luther King, Jr. was assassinated for his work in creating social justice, civil rights and equality for all citizens. Sometimes in the day-to-day of our work, whether we work in sustainability or do it as a side-passion, it is easy to lose track of the bigger picture. There are large institutions at play that can help–or thwart–sustainability, economic justice, and green job creation in a powerful and systematic way.
When Barack Obama appointed Van Jones to be the Green Jobs Czar, many of us hoped this marked a turning point in the evolution of the Federal government in the direction of supporting sustainability in a systematic way. Mr. Jones was forced to resign due to his partisan style, but his message and his leadership were spot on, and exactly the kinds of policies that many of us believe we need as a country.