by Michael Shank and Melissa Powell

With last month’s climate talks in South Africa postponing specific carbon cuts until 2020, it is clear that something more than mere nation-state commitments will be needed to counter climate change and reduce global warming.

With nations reluctant to recommit to another climate treaty, replete with binding targets and a global trading scheme for carbon emissions, it will be up to the private sector to pick up the slack. Thankfully, it seems up for the challenge.

WindMade: A New Consumer Label Supporting Wind Energy

Take, for instance, WindMade. This new consumer label was recently launched by the private sector, in partnership with the United Nations Global Compact and the World Wildlife Fund, to encourage and increase demand in wind energy, a renewable energy that will be a critical component to any greenhouse gas emissions reduction strategy.

WindMade is the first-ever global label to certify use of wind power in manufacturing and operations. Much like the Agriculture Department’s organic label created a more robust organics industry and consumer base, so too is WindMade’s intent to generate an equally robust base for renewables.

Now, thanks to pioneering efforts such as WindMade, consumers who care about climate action or energy security or simply want to reduce their environmental footprint can prioritize purchases that are aligned with their principles.

This is a good thing.

And according to polling done in advance of WindMade’s launch, a solid 67 percent of consumers are already saying they would favor WindMade products.

The consumer demand is clearly there, which will be helpful in lowering the price of wind energy as the technological leaders behind the wind energy movement — be they in the United States, Europe or China — ramp up production and produce cheaper wind energy and wind turbines.

Wind Energy Promotes Peace...

All of this will be good for the environment. Yet, more wind energy not only helps reduce carbon consumption and carbon emissions, it will also help the world become a more peaceful place.

How?

1. Perhaps most obviously, as we wean ourselves off fossil fuels and onto renewable energies such as wind and solar, we dramatically reduce the propensity of nations to fight foreign wars over fossilized energy resources in the name of energy security.
2. The more we transition off centralized, fossil fuel-based power grids and cumbersome production facilities that pose a security risk to potential domestic attack (e.g., nuclear and coal plants, gas pipelines or oil refineries) and transition to micromanaged wind and solar infrastructure, the less risk we will face in light of growing terror attacks. Imagine smaller grids that serve smaller communities and are thus less susceptible to sabotage.
3. Most importantly, the more we enable and empower communities and citizens around the world to harness wind and solar energy at the micro and local level, the more we ultimately democratize energy and equip developing countries with the tools and techniques needed to develop more efficiently and effectively.

...Fights Poverty...

Just think about how mobile phones have become ubiquitous in the developing world (thanks to rapidly falling costs and increasing availability), serving as a critical lifeline to banking, agriculture, trade and commerce activities. Now let’s do the same with renewable technologies by making them affordable and accessible. Imagine what portable and affordable devices capable of capturing renewable energy could offer poor and underdeveloped villages.

Incidentally, this also helps ensure that resources are distributed equitably, at least on the energy front. In many countries, unfortunately, energy and energy utilities are in the hands of the powerful few, often to the detriment of the powerless majority.

...and Promotes Democracy

The democratization of energy changes that dynamic. It also decreases the likelihood of violence.

One of the eight fundamental factors found in more peaceful environments, as reported by the Institute for Economics and Peace, was the equitable distribution of resources. Energy equitability, then, should be a longer-term goal.

In the meantime, helping consumers know whether their computer, car or clothing was made with wind energy is a great step in the right direction. We need more innovations and initiatives of this kind. The climate isn't cooling anytime soon, and it's clear that climate talks will continue to be inconclusive.

Companies and consumers, the ball is in your court.

Lead contamination from hundreds of gold mines across northwestern Nigeria has caused the deaths of 400 children under the age of five and exposes thousands more children to lead poisoning, according to a report from the U.S.-based group Human Rights Watch. Across the state of Zamfara, where hundreds of artisanal mines are now in operation, young children processing ore are exposed to toxic levels of lead, the report said. Many others are exposed when family members return home from work covered in the toxic dust, when lead-filled ore is crushed in their homes, or when exposed to contaminated water and food. In some villages, mortality rates were as high as 40 percent among children who showed signs of lead poisoning. “Zamfara’s gold brought hope for prosperity, but resulted in death and backbreaking labor for its children,” said Babatunde Olugboji, a deputy program director at Human Rights Watch. Healthcare workers also report high rates of infertility and miscarriage among adults in the region. While governmental and international organizations have treated more than 1,500 children showing signs of acute lead poisoning, the report says thousands more children require chelation therapy to remove lead from their bodies.

Photo by Human Rights Watch

by Christine Bader

For those of us who have been working in corporate social responsibility (CSR) for years: Now is our moment.

Apple’s supplier woes have put the social impacts of business onto every media outlet from the Daily Show [see below] to Fox News. Twitter users organized a boycott this weekend after the company’s announcement that it would withhold tweets in countries where the content is illegal. Next month the U.S. Supreme Court will hear a case about Shell’s activities in Nigeria, and determine whether corporations can be sued for human rights abuses abroad.

These cases of how companies affect the rights of people and communities are what CSR is all about. As these iconic businesses struggle in the spotlight, now is the time to make that clear.

The Evolution of CSR

With the explosion of CSR in the past ten years (in 2010, some 5,600 companies around the world issued CSR or sustainability reports, up from 837 ten years earlier), the term has become so broad as to mean everything and therefore nothing: from funding walk-a-thons to recycling programs. 

Such a potpourri arms critics who can tear apart the whole concept by pointing to a few bad examples -- a tobacco company funding a business ethics program, Hershey promoting its philanthropic giving while harboring child labor in its supply chain -- that should never have earned the CSR label in the first place.

CSR means improving what companies’ core activities do to people and planet throughout their operations, and stopping them from causing harm. It is not sending employees in matching t-shirts out to paint a wall for five hours a year, or using philanthropic checks as a fig leaf to hide wrongdoing. 

The Elephant in the Room

My CSR colleagues are out in the field and see the good, the bad, and the ugly of what globalization has done to the world’s most vulnerable people. They are working in every industry, on the front lines of globalization at the far corners of the earth. They’re calling out suppliers skimping on pay and dealing with corrupt police who see them as ATMs.

They're working on complex issues with no easy answers and little precedent, for example investigating their supply chains all the way back to raw materials to find and eradicate child and forced labor (HP with conflict minerals in the Congo; Coca-Cola in the sugar cane fields of El Salvador; with cotton in Uzbekistan).

As Monica Gorman, the new head of CSR at New Balance, said to me recently:

“CSR is only meaningful if you talk about the elephant in the room. It’s the biggest, ugliest, darkest secret you have -- that should be what you focus on.”

CSR = Front Page News

Despite doing work that is in the best interests of both business and society, CSR professionals often struggle to make the case to higher-ups for more resources. When I worked for BP, I hungered for that front page New York Times story that I could show my bosses to prove how a company can incur the wrath of local communities, regulators, and the global media for getting CSR wrong or not getting it at all. (I left the company in 2008, two years before the Deepwater Horizon disaster.)

Now, the case for CSR is impossible to avoid.

It might seem opportunistic to capitalize on the plight of others to bolster our own staffs and budgets. But any feelings of Schadenfreude at other companies’ debacles quickly give way to the sentiment of "There but for the Grace of God go I." Our goal is to prevent these abuses from occurring again, anywhere.

The Way Forward: Clarity & Collaboration

That is why even in the most competitive industries, we’ve found ways to collaborate with each other: The Voluntary Principles on Security & Human Rights, the Global Network Initiative, and the Fair Labor Association are all sector-specific efforts that bring together companies and campaigning groups to address those challenges that none of us can solve alone.

This is our opportunity to explain to the world what CSR really is. Let’s send philanthropy and marketing back to the right departments with the right professionals, and get on with our work.

If nothing else, these recent news stories have clarified CSR for one important stakeholder: After years of confusion over my choice of career, my mother called last week and asked whether “this horrible Apple stuff” is related to what I do.

Yes, Mom, it is. That’s exactly right.

Photo by Andreas Eldh/flickr/Creative Commons

by Charis Michelsen

Nissan keeps making noise about leading the charge toward zero emissions, or at least as little carbon dioxide output as possible. Going beyond their zero emissions and eco-friendly cars is their latest domestic shipping project - an energy-efficient and eco-friendly car carrier.

Named the Nichiomaru, which means "king of Japan," the ship is the first Japanese vessel to make use of both solar panels and an electrically controlled diesel engine. It's also got energy-efficient appliances and lights up nearly everything with LEDs. According to Nissan's calculations, the Nichiomaru will use 1400 tons less of fuel and put out 4200 fewer tons of carbon dioxide per year compared to the same class of ships without the nifty gadgets.

The Leaf Is Now Greener

The Nichiomaru is based in Yokohama (that's the one that has the massive USAF base nearby, south of Tokyo). Its shipping route will take it from the Kanto region (around Tokyo) out west to the Kinki region (the port city of Kobe, home of the super-expensive Kobe beef), and down south to the island of Kyushu, and that's where it gets super neat. Where previous ships running this path would make 4 circuits a week, the Nichiomaru can make 6 and still use fewer finite resources to do it. And it isn't Nissan's only foray into green shipping, as they are also using an aerodynamically-improved shipping carrier in Northern Europe to deliver LEAF EV's to dealerships as well.

The solar-diesel hybrid ship is the latest part of Nissan's environmental action plan, which it calls the "Nissan Green Program 2016." Their stated goal is to reduce carbon dioxide emissions not only coming out of the tailpipe of the car, but also in production, distribution, and sales. The Nichiomaru is their first success in the logistics area of the chain.

When the 2012 Chevy Sonic goes on sale in early March, it will sport GM's new eco-label, dubbed Ecologic.

This first eco-label in the auto industry will "demonstrate our commitment to reducing environmental impact throughout the stages of the vehicle's life span, from manufacturing to driving to recycling," says the website.

"Putting an Ecologic label on each Chevrolet is just one more way for us to share our environmental progress," the company says.

GM leads the auto industry in its use of renewable energy, and committed to doubling use of solar last year, so why not let people know about it?

The company has become creative on the recycling side. It's turned its goal to achieve zero-waste-to-landfill status worldwide into a lucrative sideline business. GM makes $1 billion a year selling scrap byproducts, derived from its impressive 92 percent recycling rate.

Chevy Volt buyers will love that some of the parts are made from recycled oil booms from the BP oil spill. The Volt's baffles are made of 25 percent recycled boom material, 25 percent recycled tires, 25 percent recycled packaging material, and 25 percent post-consumer recycled plastics and polymers. The recycled tires and packaging material are diverted from other GM facilities.

Ecologic Label

The label supplements standard EPA window stickers, which have also been improved to include better information on fuel mileage, emissions and air quality. Ecologic will include information on the lifecycle impact of cars: how much energy and resources it takes to produce a car, the pollution generated during production, and what happens to the car at end-of-life.

The label will appear on all Chevy vehicles later this year. All the claims will all be third-party audited by sustainability agency, Two Tomorrows, which provides those services for environmentally-oriented initiatives.

Expect to see details on:

- Before the road: In addition to being LEED-certified, many factories are "landfill free," some use renewable energy, and all strive to reduce waste by re-using and recycling, and lowering greenhouse gas emissions.
- On the road: Fuel-saving features such as advanced engine technologies, aerodynamics, lighter weight components and low-rolling resistance tires.
- After the road: 85 percent by weight of the vehicle can be recycled at the end of its lifespan.

This voluntary label is a great step in the right direction, and may well set a new standard for cars. It will be most useful when the information is compared to its peers, however. Most cars are highly recyclable, for example, so including the fact that the Sonic is 85 percent recyclable is "nice to know" but not necessarily unique.

The company invested in electric bus manufacturer, Proterra, and plug-in manufacturer, Bright Automotive.

GM's Spark Electric car debuts in 2013 and a plug-in Cadillac will hit the showrooms around the same time.

Photo by DrivingtheNortheast/flickr/Creative Commons

by Wendy Gordon

Forty-five can be a sizeable number. Especially when it's the number of gallons of sweet beverages the average American consumes in one year. This jolting news was reported in a new study published in the January 2012 issue of Health Affairs.

How much sugar comes with all that?

About 4,500 teaspoons per person per year just from soda. Consumption of beverages high in calories but poor in nutritional value is the number one source of added sugar and excess calories in the American diet. It's also fueling America's soaring obesity and has pushed diabetes to the top of the charts; it's now No. 7 on the "cause of death" list.

The Obesity Crisis

More than one-third of U.S. adults (over 72 million people) and 17 percent of U.S. children are obese. The crushing health care costs associated with obesity -- estimated to be as high as $147 billion a year -- prompted the U.S. Centers for Disease Control and Prevention (CDC) to list reducing the intake of sugary drinks as one of its chief obesity prevention strategies in 2009.

As an intervention, several states and cities, including California and New York City, have considered a tax on soda, but have yet to impose one. Maybe now they might.

Taxing Soda vs. Saving $17 Billion

The new study, led by Kirsten Bibbins-Domingo, MD, PhD, an associate professor of medicine and of epidemiology and biostatistics at University of California, San Francisco (UCSF), estimates that a penny-per-ounce tax on sweetened beverages would prevent 240,000 cases of diabetes per year. On top of that, the researchers calculate, nearly 100,000 cases of heart disease, 8,000 strokes, and 26,000 deaths would be averted over the next decade, for a cost savings of $17 billion.

A penny-per-ounce tax would add 78 cents to the price of a standard 2-liter bottle of soda. Depending on where you bought it, you could pay 25 to 100 percent more for that economy-sized bottle.

That may seem to tip the scales too much, but as a 2004 report prepared for the Department of Agriculture explains, for "sinful-food" taxes to change the way people eat, they may need to equal at least 10 percent to 30 percent of the cost of the food.

And what sort of revenues would the tax generate?

Bibbins-Domingo and her team project $13 billion per year would be raised from a one-cent per ounce tax on soda. Those revenues could be used to extend health insurance coverage to the uninsured and under-insured, or perhaps to fund campaigns intended to make healthy foods more widely available, and more affordable, and to encourage exercise and healthy eating habits.

A recent national poll found that 53 percent of Americans said they favored an increased tax on sodas and sugary soft drinks to help pay for healthcare reform. And even among those who opposed such an idea, 63 percent switched and said they'd favor such a tax if it "would raise money for healthcare reform while also tackling the problems that stem from being overweight."

I'd like to see the U.S. really face the serious consequences of our out-of-control obesity epidemic and consider tough interventions, like a soda tax, or a fat tax as is spreading in Europe.

Exploring the "Fat Tax"

According to a report on allgov.com, Europe is beginning to embrace the concept of a "fat tax" in an effort to reduce obesity and its associated health care costs.

In September of 2011, Hungary, with a 19 percent obesity rate, imposed a tax on packaged products with high sugar, salt or caffeine levels. This includes energy drinks with added sugar and caffeine, soft drinks with added sugar and soup and gravy mixes. The Hungarian government estimates it will collect $100 million a year from the food tax. It will apply the funds to the nation's health care budget.

Now Denmark has followed with the first-ever tax on foods high in saturated fat. The fat tax, which will be levied on wholesalers, will come to about $6.27 per pound of saturated fat. This will mean an added 40 cents to a hamburger and 12 cents to a bag of chips.

According to the LA Times, Denmark's fat tax isn't aimed at curbing obesity -- the obesity rate in Denmark was 13.4 percent in 2009, below the European average of 15.5 percent. But Denmark lags in terms of life expectancy, and the country hopes the measure will increase the average lifespan by three years over the next decade.

Imagine that sort of initiative on the part of our U.S. Congress. Ah heck, don't bother.

But maybe in some state house or in a city council, a civic-minded leader is saying right now:

"We've got a real problem here. We've got people who are obese costing our health system $1,429 more per person than normal-weight people. They're less productive at work and absent more. That's hard on our businesses, and it's breaking our treasuries. We know soda is a major contributor to obesity. Let's not take the soda away, but let's price it so less is consumed."

That's what we could do, though it is not how our tax system works now. Today, as Derek Thompson explains on The Atlantic, 40 percent of federal taxes come through the payroll tax, which raises the cost of employment. Another 40 percent comes through individual income taxes, which hurt income. Less than five percent comes from excise taxes and zero percent comes from consumption taxes.

"What's dumber than a tax on cake?" Thompson asks.

It's the system we've got now.

I say, let's make 2012 the year we get smart about taxes, and tax less of those things we want more of -- like jobs and income -- and more of the things we want less of -- like health damaging sugars. You can have your cake, just pay for it.

Photo by poolie/flickr/Creative Commons

by Marc Stoiber

The internal combustion engine is one of the few remaining things most carmakers actually make. In many cases, the powertrain is the only real 'fingerprint' that sets one manufacturer apart from the other.

Bye bye, fingerprint.

With the incipient rise of the electric vehicle, carmakers are scrambling to partner with manufacturers in other sectors to stay competitive under the hood.

Volvo and Daimler are among the companies reaching out to companies like Bosch and Siemens, according to Peter Hockenos in the Herald Tribune. And it's forcing them to question their individuality at every step.

According to Hockenos, the carmakers are struggling to put a positive spin on the new alliances, characterizing the ventures as 'exploiting synergies' rather than subjugating their mojos.

Incorporating electric powerplants is clearly a necessary innovation for carmakers. The dominance Toyota achieved by pioneering hybrids was a clarion call that even GM heard.

But is partnership with electric motor manufacturers going to threaten the individuality of existing car brands? Hardly.

Following Apple's Function Units

Most companies rely on business units to manufacture and innovate. These units are charged with taking a specific product and perfecting it to stay relevant, dominant and profitable.

Contrast that with Apple, a company organized around function units. Instead of organizing teams to perfect the iPod or iPad, they focus on perfecting the experience of listening to music, or reading.

Logically, a business unit charged with perfecting an internal combustion engine would be loath to jettison it in favor of an electric motor. But a function unit charged with more effective mobility would have no such qualms - they'd be much more technology agnostic.

Indeed, if you look at the original iPod, there was hardly any 'fingerprint' technology in it. It was simply an amalgamation of existing tech repurposed to create the ultimate listening experience.

The Apple vision and belief system - to challenge the status quo at every step - was the unique secret sauce. And the iPod only reinforced that uniqueness.

Fingerprint Vision, Not Technology

My business is brands.

I'm often called in to work with technology companies who have reached a dead end believing their technology is what sets them apart.

Brand and vision are the only unique elements any company can create today. And that comes down to building a belief system that resonates with the beliefs of your fans.

Of course, that belief system, that brand, helps chart the course of your innovation.

A wonderful example is BMW's iProject. With 'i', the carmaker staked its claim in future mobility. That means electric cars, certainly - but it also means venture partnerships with companies that help us simply get around in the most exciting way possible. Guidance systems, mapmakers, public transport companies...the list of potential partners and innovation opportunities are endless.

Innovation Lessons That Will Give You Traction

If you're an innovator, sooner or later you're going to find yourself in the same position as our hand-wringing car manufacturers. Here are some thoughts that should help you see the light at the end of the tunnel.

It's about function, not technology - don't get protective of a technology. In today's world of instant copies, technology has a brief 'best-before' life. Instead, focus on an imperfect consumer experience, and how you can bring technologies together to make that experience better.

Partnership = progress - hybridization brings new thinking, evolution, great leaps forward. Sure, it also brings friction and culture clash. But no friction, no fire.

Become the platform, not the solution - cars are an imperfect platform. So was the Internet.

The trick is finding innovators who can build greatness on your platform. That could be electric motor manufacturers, or eBay.

Photo by Steve Jurvetson/flickr/Creative Commons

Levi Strauss has joined a growing list of corporate leaders who will not buy forest products from Asia Pulp and Paper because of its ongoing involvement in rainforest destruction and human rights abuses in Indonesia.

To make sure it doesn't source from the world's endangered forests, Levi Strauss revamped it forest products purchasing policy which began in the early 1990s.

"Levi's forest products purchasing policy sends a clear message to Asia Pulp and Paper that if they want to do business with respected global companies, they must stop destroying rainforests," says Lafcadio Cortesi for Rainforest Action Network. "It is time for APP to stop pulping Indonesia's last rainforests for cheap paper products. Instead APP should support the country's commitment to reduce greenhouse gas emissions from deforestation."

Levi's new worldwide policy covers all wood and paper products purchased by the company and mandates that at all paper contain a minimum 30 percent post-consumer recycled content. When it's available, the company will buy 100 percent post-consumer paper and when that's not possible it will buy paper certified by the Forest Stewardship Council (FSC) that it comes from sustainably managed forests.

The policy applies to all forest products Levi's may procure, including paper, product packaging and hangtags, corrugated, construction and decoration materials, and furniture.

Most recently, Kroger, the largest US supermarket chain, ended its contract with Asia Pulp, as did the world's biggest toy maker Mattel.

Over the past several years, a growing list of major brands have dropped their contracts with Asia Pulp: US book publishers Scholastic, Hachette, and Simon & Schuster, toy makers Hasbro and Lego, fashion giants Gucci and Tiffany and Co., and office supply stores Staples and Office Depot.

The Walt Disney Company is currently developing a policy to exclude fiber connected to deforestation from its global supply chains.

Indonesia's rainforests are among the most biologically and culturally diverse in the world, and its deforestation rates are among the highest.

The country is the world's third largest greenhouse gas emitter (after China and US) because of the clearcutting of its vast forests. More carbon is released into the atmosphere each year from logging Indonesia's forests than from all the cars, trucks, planes and ships in the US combined.

It is also leading to the extinction of wildlife, including the orangutan and Sumatran tiger.

Asia Pulp is expanding into the US and Canada. Since it usually does business under the name of one of its subsidiary shell companies, many customers don't realize they're buying from them. Some of the shells are: Eagle Ridge Paper, Global Paper Solutions Inc., Solaris Paper and Mercury Paper.

Learn more about Levi Strauss and sustainability:

Website: http://levistrauss.com/sustainability/planet/materials

Photo by Artnow314/flickr/Creative Commons

Southwest Airlines is introducing green materials in its new cabins as part of its Evolve initiative.

The $60 million retrofit will be finished in 2013. Southwest says the changes will reduce fuel consumption, increase passenger comfort, and lead to greater revenues (the design allows for more seats) without raising prices.

Seats: New seats will be more durable and will reduce fuel consumption simply by being six pounds lighter. The aircraft will weith 635 pounds less, resulting in over $10 million in ongoing annual cost savings.

Seat Covers: E-leather will cover the seats - made from recycled leather, it's a lightweight, scuff resistant alternative to traditional leather. Michigan-based Irvin Automotive makes the material, which Southwest says also cost much less.

Seat Frame: seat frames from Southwest's fleet will be re-used, saving $50 million.

Carpet: The cabin's interior carpet will be supplied by sustainability leader Interface (Nasdaq: IFSIA). Its carpet tiles eliminate the need to completely replace the carpet when smaller areas wear out. Interface manufacturers the carpet using a closed loop recycled process.

Life Vest Pouches will be a pound lighter, as well as smaller, giving passengers more room for carry-on luggage under the seat.

Wind Screen: This product in the bulkhead has a longer lifespan, reducing the labor costs and waste that result from frequent replacements or repairs.

Switching from Plastic to Aluminum: Seat arms, tray table latches and other accessories will now be aluminum, increasing recyclability and durability.

The changes come as a result of Southwest's Green Plane, which has been testing the materials since 2009.

Southwest led the airlines in Climate Counts' scoring this year, which ranks companies on how much action they're taking to address climate change. They also are ranked among the highest in the industry for recycling.

Photo by Robert S. Donovan/flickr/Creative Commons

Part of the Quest for CSR 2.0 series.

We face a crisis of leadership. Our global challenges loom large and clear, but we seem to lack leaders who can make change happen at a scale and speed that match the size and urgency of the problems we face. In an attempt to understand this leadership impasse, I've done some research with the University of Cambridge's Programme for Sustainability Leadership on how change happens. In this blog, I'll briefly outline some of our conclusions.

Let's start with what kind of change we're talking about. Jim Collins, author of Good to Great, observes that companies that went from being 'good to great' did not rely on revolutions, dramatic change programs or wrenching restructurings. 'Rather, the process resembled relentlessly pushing a giant flywheel in one direction, turn upon turn, building momentum until a point of breakthrough, and beyond.'

A tipping point on sustainability?

So we're talking about catalyzing and scaling up change. And for this change to be successful, leaders need to foster and entrench new values, culture, incentives, rules and resources. In Accenture and the UN Global Compact's 2010 survey, 54 percent of CEOs felt that a cultural tipping point on sustainability is only a decade away-and 80 percent believe it will occur within 15 years, so perhaps we are nearing a moment of infectious change. Meanwhile, at the organizational level, leaders must catalyze change for sustainability through a suite of actions, including innovation, empowerment, accountability, closed-loop practices and collaboration.

We found that effective sustainability leaders are good at promoting creativity in business models, technology, products and services that address social and environmental challenges. Sustainability leaders also implement structures and processes for good governance, transparency and stakeholder engagement.

A culture of discipline

Accountability does not have to be all about structures and controls however. Collins believes great leaders foster a culture of discipline, saying "When you have disciplined people, you don't need hierarchy. When you have disciplined thought, you don't need bureaucracy. When you have disciplined action, you don't need excessive controls." According to Jeffrey Immelt, CEO of G.E., "Enron and 9/11 marked the end of an era of individual freedom and the beginning of personal responsibility. You lead today by building teams and placing others first. It's not about you."

The best sustainability leaders adopt principles of cradle-to-cradle production, internalizing externalities and extending these principles to the supply chain. Sustainability leaders also build formal cross-sector partnerships, as well as innovative and inclusive collaborative processes such as social networking (Web 2.0). Betty Sue Flowers, co-author of Presence, poses the challenge as a question, saying, "We know a lot about heroic action because that's in the past of leadership. But how do you have leadership in groups across boundaries, multi-nationally?"

Achieving sustainability through storytelling

At the people level, leaders catalyze change for sustainability by providing a compelling vision, encouraging long term thinking, making strategic investments and promoting intergenerational equity. Immelt says "every leader needs to clearly explain the top three things the organization is working on. If you can't, then you're not leading well."

Ray Anderson, the late CEO of Interface, saw this as a process of inclusion, saying, "For Interface, sustainability is broader than before: sustainability reaches out to embrace people, processes, products, place, the planet and profits-we now know that none can long be afforded allegiance at the expense of the others."

Sustainability leaders have to deep knowledge and skills and provide opportunities and resources for appropriate action. This embraces Robert Greenleaf's notion of servant leadership. He explains that "It begins with the natural feeling that one wants to serve. Then conscious choice brings one to aspire to lead. The best test is: do those served grow as persons; do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants?"

Transformational sustainability leaders also focus on creating a culture and structure that provides peer support and encouragement and recognizes achievement. Immelt says, "Today, it's employment at will. Nobody's here who doesn't want to be here. So it's critical to understand people, to always be fair, and to want the best in them."

In the end, I believe the best leaders are effective storytellers. And they realize that we need a new collective story. As I wrote in Beyond Reasonable Greed, "each time the world changes - when civilizations rise and fall, when new scientific theories challenge our understanding of the universe, when technological innovation reinvents our lifestyle, when political revolution breaks down the old structures of society, or when a global crisis threatens to destroy our planet - humanity is forced to let go of some of its most cherished beliefs in order to create a new mythology to guide its collective psyche."

Small actions lead to big changes

We are at just such a fulcrum of change, and the beliefs we need to challenge and modify are many. Maybe it is our belief in the beneficence of the "invisible hand" of the market. Or our belief that a global political deal is all we need to solve the climate crisis. Or that that business has the power to act unilaterally in bringing about a more sustainable and responsible future.

If my experience of living through the political changes in South Africa has taught me anything, it is that change is systemic. It happens because of millions of small actions by millions of people all over the world, some coordinated, some diffuse. Yes, change also happens because of bold leadership, but it always needs an enabling environment, a society or an organization that is ready to change.

Change is something organic. It is worth remembering that the largest living thing in the world is a honey mushroom in Oregon - an interconnected fungus measuring 3.5 miles across. It is said to be 2,400 years old and takes up 2,200 acres (1,665 football fields), with the small mushrooms visible above ground representing only a tiny proportion of its real girth and substance. I think change is something like that too: spread out, interconnected, growing where the ground is most fertile ground and often invisible.

Photo by rjv541/flickr/Creative Commons

by John Elkington

Some people winced when - in a study called The Phoenix Economy - we concluded we faced not a simple recession, nor even in a double-dip variant, but instead one of those periodic, fundamental restructurings of the global economy that take decades to work through. But, we argued, this was necessary to enable a transition to more sustainable forms of capitalism.

For an idea of what this might mean, track down a copy of the Manifesto for Sustainable Capitalism, due for launch shortly by Generation Investment Management - and spotlighted in The Wall Street Journal by Generation's founders, former US Vice-President Al Gore and former Goldman Sachs investment banker David Blood.

"We are once again facing one of those rare turning points in history when dangerous challenges and limitless opportunities cry out for clear, long-term thinking," Blood and Gore argue.

"The disruptive threats now facing the planet are extraordinary: climate change, water scarcity, poverty, disease, growing income inequality, urbanization, massive economic volatility and more. Businesses cannot be asked to do the job of governments, but companies and investors will ultimately mobilize most of the capital needed to overcome the unprecedented challenges we now face."

Five Key Actions For Sustainable Capitalism

So what should business do? Blood and Gore recommend "Five key actions for immediate adoption by companies, investors and others to accelerate the current incremental pace of change to one that matches the urgency of the situation."

1. First, they encourage business leaders to account for the growing risk from "stranded assets." These are risks "whose value would dramatically change, either positively or negatively, when large externalities are taken into account - for example, by attributing a reasonable price to carbon or water."
2. Second, they call for mandatory integrated reporting, now being pushed by the International Integrated Reporting Committee. "Despite an increase in the volume and frequency of information made available by companies," they say, "access to more data for public equity investors has not necessarily translated into more comprehensive insight into companies."
3. Third, they call for an end to the practice of issuing quarterly earnings guidance. "The quarterly calendar frequently incentivizes executives to manage for the short-term," they conclude. "It also encourages some investors to overemphasize the significance of these measures at the expense of longer-term, more meaningful measures of sustainable value creation."
4. Fourth, they call for better alignment of senior executive compensation structures with long-term sustainable performance. "Most existing compensation schemes," they warn, "emphasize short-term actions and fail to hold asset managers and corporate executives accountable for the ramifications of their decisions over the long-term."
5. And, fifth, there is a growing need to incentivize and reward long-term investing with 'loyalty-driven securities.' The logic here is that "the dominance of short-termism in the market fosters general market instability and undermines the efforts of executives seeking long-term value creation."

Some find it strange that businesses like Generation are signaling the next round of the sustainability agenda, but as the focus shifts to the large-scale remodeling of capitalism, this is a logical trajectory for the next 20, 25, 40 or 50 years.

Photo by Milos Milosevic/flickr/Creative Commons

by Priti Ambani

KonaRed is turning the coffee berry into a sports drink. This previously discarded fruit portion of the coffee plant is a whole new market now, providing coffee growers a shot in the arm and diverting waste.

KonaRed is the fruit of the commonly known coffee plant, sourced from Kona Coffee - grown only in the Kona district on the west side of the Big Island, Hawaii where it has developed over 175 years. These coffee plants thrive in the extraordinary combination of warm tropical sunshine, abundant mountain rainfall, and mineral-rich volcanic soil that is found solely in Kona, to create award-winning Kona coffees.

Diverting Waste

Before Kona Coffee emerges as a rich coffee bean and can make its way into coffee mugs, it has to be stripped off its skin. An estimated 40 million pounds of coffee fruit and skin gets tossed away annually in Hawaii. High labor costs make composting unviable for the coffee farmers. So when Shaun Roberts came along to buy this fruit, he was more than welcome. Roberts, co-founder of KonaRed has found a way to divert this byproduct of coffee production into a line of energy drinks. Farmers now can make money on a by-product they were paying to dispose off.

Why the Coffee Berry in an Energy Drink?

Shaun actually calls it "the next generation super-fruit" - KonaRed has an extraordinary level of nutrients and antioxidants that get absorbed at the cellular level and are known to help prevent disease, delay aging and provide a long-lasting mood boost. It's the fruit of the coffee plant that surrounds, protects and nourishes the coffee bean.

The fruit is removed, dried and condensed into a liquid that is blend with other delicious fruits to create a beverage. KonaRed uses only the ripe red fruit, the whole fruit and nothing but the fruit. The beverage is tart (like prune or pomegranate juice) and is also available in stick packets for on the go mixing with bottled water.

Shaun Roberts is proud that KonaRed is 100 percent traceable back to the coffee farms in Kona! Yup - it can be followed straight from the field to your bottle. He promotes the range of drinks through the waterman community - people who love the sea, surf and its bounty. Lets drink to that!

by Sanford Lewis

In 2011, Occupy Wall Street and its progeny captured the world's imagination with its resistance to the growing corporate occupation of our political system. As many within the socially responsible investment (SRI) community rightly noted, the values of Occupy are aligned with many of the social and environmental justice goals that SRI has sought for years.

A catalyzing motivation of Occupy is a growing sense that corporations and their wealthiest leaders have become far more effective at harnessing the political system to do their bidding than the 99 percent. Recent legal developments (Citizens United vs. FEC) have unleashed the ability of corporate treasuries to participate in the electoral process, and thus to skew an already broken system further away from the needs of most of us.

January brings the second anniversary of the Supreme Court's Citizens United decision, and with it, growing grassroots momentum and pressure for a constitutional fix. Organizations including People for the American Way, Public Citizen, Move to Amend and Free Speech for People are escalating a grassroots campaign for a constitutional amendment.

Legal Challenges to Citizens United

I believe that in the coming year the SRI community will need to decide whether to Occupy Personhood, that is, should they stake out a position regarding the proposed constitutional amendments that would rectify the corporate dominance of our political and civic culture?

This is a very different approach from the predominant model of a disclosure-oriented campaign undertaken by the Center for Political Accountability. It requires a more fundamental consideration of the role of the SRI community as leaders in our civic discourse and consideration of an array of concerns that do not have to be pondered in a disclosure-only campaign.

Some of these amendments would simply amend the Constitution to eliminate the notion that money should be considered protected political speech . H.J.Res. 72, introduced on July 13, 2011 by Rep. Kurt Schrader, proposes a constitutional amendment affirming the power of Congress and the States to regulate contribution of funds to candidates and the expenditure of funds intended to influence the outcome of elections.

Others would redefine personhood so that a corporation should not be considered a person under the Bill of Rights, such as H.J.Res. 88, introduced on November 15, 2011 by Rep. Jim McGovern. That bill proposes an amendment that would overturn the Supreme Court ruling on Citizens United v. FEC and to make clear that corporations are not people.

Still others would carve out an exception, preserving the constitutional rights of certain corporations, namely nonprofits and the press, while otherwise eliminating so-called personhood rights of for-profit corporations. S.J. Res. 33, introduced on December 8th by Rep. Bernie Sanders proposes an amendment to expressly exclude for-profit corporations from the rights given to natural persons by the Constitution of the United States, prohibit corporate spending in all elections, and affirm the authority of Congress and the States to regulate corporations and to set limits on election contributions and expenditures.

What Can SRI Do?

In considering the potential role of SRI firms in this growing movement to fix the underlying problems created by Citizens United, it will be essential to consider what SRI can bring to the table, as well as to parse and debate the implications of the various proposals for the work of SRI firms.

When it comes to the potential benefits of SRI participation, the value is clear.

Certainly, the constitutional amendment campaigns desire inclusion of allied business interests. Moreover, one of the things that SRI shareholders do well is to exert influence within the business community to recruit additional business support, and to discourage strident opposition.

In terms of the different proposals, consideration is needed regarding how they might affect the ability of SRI firms themselves to engage in their own speech that is so core to the firms' advocacy. It is also essential to consider how the various proposals may be treated by mainstream investing institutions, such as pension funds, and in the face of their evolving understanding of their fiduciary obligations.

But, in order to remain relevant as momentum builds, these issues seem fundamentally worthy of consideration. What is your fund or firm doing to address these issues and which of the constitutional amendment proposals do you favor?

by Jeffrey Hollender

We know that the farmers market is becoming the new supermarket, and that for those who can afford it, 'buying experiences' trumps buying stuff.

Hillary Clinton is retiring and Elisabeth Warren looks like the new Hillary Clinton. Syria has become the new Libya, while local is replacing organic. Credit unions are slowly gaining traction over multinational banks at the same time that solar is gaining on wind.

Social entrepreneurship is the hot topic in business schools, and women have finally been recognized as more important in the boardroom than men.

These trends, however important, are often simply indicators of more important movements that seethe deeper below the surface.

While U.S. insurance losses in 2011 due to weather-related disasters will top records, this is just the beginning: Fukushima and Irene were a warm-up exercise for a planet that has gone from angry to totally pissed off.

In 2012, we will see Mother Earth take continued revenge at the tail end of an industrial revolution that failed to recognize the first and second laws of thermodynamics. Button down your supply chains and buy a generator, because 2012 will change - at long last - the way we in the U.S. think about and act on global climate change.

The activist emerged from her long sleep in 2011. Reemerging from a seemingly endless nap that began after the Vietnam War. Activism in the Western world will increasingly turn to violence in 2012.

The stock market became wildly volatile in 2011: Up 300 points, down 400 points - day after day after day. Whiplash became a normative experience. In 2012, people will begin to sit on the sidelines as we lose confidence that anyone really understands, let alone predict, where markets are headed.

It doesn't sound like a lot of fun, and those thinking about the stock market, Elisabeth Warren and global climate change are lucky compared to the 1.6 million homeless children in the United States.

Or, the 46.2 million Americans living below the official poverty line; the one out of every seven Americans who now rely on food stamps; and native-born African-Americans with less than a high school education for whom the U-6 unemployment rate is 42.2 percent.

Inequality in America today is worse than Egypt, Tunisia or Yemen.

How does one weave together a perspective on the future out of the turmoil in the present?

The present is mostly what we make of it. What we choose to include in our frame of reference, and what we're willing to include in our point of view. Most of us are highly selective. Our minds filter out the information and facts that do not support what we already believe. That, not surprisingly, leads to many self-fulfilling prophecies.

In 2012, only one thing really matters.

United we stand, divided we fall. We must see what we have in common rather than what divides us. What we agree upon rather than where we differ.

Together, anything is possible. And we can no longer afford to let that possibility elude us.

by Elisa Niemtzow

2011 marks an exciting year in luxury goods. After years of being singled out for lackluster social and environmental performance, luxury brands are recognizing the benefits of going green, and are starting to talk about it. Backtrack four years ago to the release of WWF-UK's analysis of the luxury goods industry, and things looked bleak. For example, Tiffany scored a D+, PPR a D, and L'Oreal a C+.

This year, Tiffany launched its well-received sustainability website, detailing the responsible business practices that have made it a sector leader. PPR unveiled the first complete annual environmental profit and loss account for its brand Puma, committing to extend the practice to all of its brands, including iconic luxury houses Gucci, Balenciaga, Yves Saint Laurent and Bottega Veneta by 2015. Finally, L'Oreal pleasantly surprised more than just one sustainability expert at its inaugural global stakeholder forums this year.

Like other business sectors, luxury brands still face a lion's share of challenges. In September, the Ethical Consumer Research Association (ECRA) in the U.K. lambasted leading designer clothing companies in its special report Style Over Substance, at the height of the "killer" sandblasted jeans problem involving brands such as Armani and Dolce & Gabanna.

For sure, there's a lot of work to be done.

However, in reading the ECRA report, many companies received criticism for lack of available information, and ECRA assumed the worst. Dig a little deeper and I'm convinced that better things are brewing beneath the surface. Secrecy, after all, is a hallmark of the industry, which protects its craftsmanship and its margins like a mother bird her eggs.

I used to manage wholesale at Chanel, one of the most coveted brands out there (and one of the most searched for names on the internet). Online videos will take you backstage at December's Paris-Bombay runway show, but you'd be hard-pressed to find much corporate information on this very private company.

Because of their glamorous role front and center, we expect the best from luxury brands (and that creates a special risk for them if customer perception of good business doesn't match reality). But, as luxury brands begin conversations around sustainability, they face the same challenges as their non-luxury counterparts.

How do you communicate on your sustainability journey, essentially a work in progress, without becoming a target for criticism or losing control of the dialogue? How does a corporate executive support sustainable consumption while meeting ever-increasing sales targets? How do you talk to customers about your green or social initiatives without detracting from key brand messages?

Since I don't have the space here to discuss all these questions, I'll focus on that last one, i.e., how do you talk to customers about your social initiatives without detracting from key brand messages?

The question of how to communicate on CSR themes to customers comes up frequently with my consulting clients these days. Fortunately, luxury brands have the potential to excel in this arena. They know how to create universes - whether that's stores, fashion shows, websites or ads - which are on brand, make you dream, aspire, and ignite all your senses.

First, let's start with a CSR-focused ad campaign gone a little wrong.

Italian leather and fashion house Ferragamo pioneered eco-luxe in 2007, with the launch of a small collection of bags made of natural, metal-free leather. This year, it launched the Ferragamo World collection, with 5 percent of proceeds going to the vanguard Acumen Fund. What a great partnership, but what a bad ad.

I fear the message "Ferragamo supports socially responsible initiatives," doesn't quite translate to fashion magazine readers. It's classic and trite CSR-speak and worse for the fashion conscious, too sensible, therefore, boring (if readers even understand what the brand is referring to).

A lot like the loafer in the picture.

With sky-colored writing and plain Jane loafers, Ferragamo falls into a cliche green ghetto that probably won't appeal to its customers.

So what does work?

A subtle mix of function and form: The function part is about getting the messaging right. What will your customers understand and associate with? Many times, you don't even need a lot of words, as the right picture can be worth a thousand. Louis Vuitton's campaigns featuring Edun founders Bono and Ali Hewson or Angelina Jolie make saving the world look adventurous and glamorous. Whether or not you quite agree, that resonates in a way boring and sensible doesn't.

The form is about sticking to your brand's DNA.

Customers are drawn to brands in part for the sensibilities, the values and the aesthetics they display. Whether you're talking about sustainability or launching a new product, speaking the language of your brand ensures impact and coherency.

A new ad for the Seamaster watch by Swiss watchmaker Omega features stunning ocean photography and an engaging quote by astronaut Buzz Aldrin. It turns out Omega supports GoodPlanet and has created an initiative to focus on ocean preservation.

Good initiatives don't necessarily make for a sustainable company. But many luxury brands are off to a good start. If they can make sustainability as sexy as a new pair of stilettos, then 2012 could be a memorable vintage.

Photo by texantiff23/flickr/Creative Commons