Net Impact Soap Box

Sunday, November 16, 2008

Capitalism Next: Sustainable Capitalism in Emerging Economies

On November 10th, as part of Capitalism Next, an innovative speaker series organized by the NetImpact Chapter at Haas in collaboration with the Sustainable Products and Solutions Initiative, three eminent practitioners shared with us how they were combining the power of business with the needs of consumers at the Bottom of the Pyramid (BOP) to create sustained social impact. It was a great experience to hear live from people who were practicing the groundbreaking model that was described in C.K.Prahalad’s seminal book “The Fortune at the Bottom of the Pyramid”.

Mosse Lee from the William Davidson Institute at the University of Michigan (http://www.wdi.umich.edu/) , shared with us the work his organization was doing in the field of social impact measurement. When Mosses described the opportunity that currently exists in the BOP market - $5 trillion, it was very difficult for me to understand why any levelheaded businessperson would want to ignore this tremendous opportunity. However, Mosses descried some of his reservations about thinking of this market as a market in the traditional sense where BOP consumers are purely purchasing “stuff”. Instead Mosses laid out the foundation of Co-creation, an innovative concept where the poor are treated as colleagues, entrepreneurs and innovators just as much as they are consumers. In my view this is a much better model of serving the BOP market as it not only provides the poor access to goods and services that improve their lives, but it also enables job creation and true economic development at the BOP.  In his mind the most important challenge in advancing BOP strategies, which I agree, is the challenge of attracting professional talent – MBA’s , Lawyers etc who are traditionally leery of building their careers in organizations that focus on such non-traditional business models.

Katie Schmitz, from WaterHealth International (WHI) (http://www.waterhealth.com/), had a different experience set in serving the BOP. Her organization, through public-private models is revolutionizing the delivery of water, the #1 global source of preventable diseases with more tha 2 Billion people lacking access to clean sources of drinking water. The success that WaterHealth achieved was due their unique ability to combine technological innovation while transforming consumer behavior. Having grown up in the developing world, the scarcity of water is not new to me. Long lines, and once a week supply of drinking water was all part of my life growing up and the lives of many millions even today across the world. The lost productivity in terms of time spent securing and transporting water by people at the BOP is an opportunity cost that cannot be ignored and left to the public sector alone to solve. Innovative ways where the private sector can collaborate and enable a sustainable solution for critical resources such as water is vital and WaterHealth is doing just that. Katie echoed Mosses regarding the key challenge that BOP organizations were facing is the acquisition of professional talent.

Israel Moreno, the General Manager of Patrimonio Hoy (http://www.cemexmexico.com/se/se_ph.html), the innovative BOP program initiated by CEMEX considers the role of CEMEX at the BOP is not just to sell more cement in order to make the poor build more rooms and walls and roofs, but instead it is about creating communities through creative approaches where economic development becomes part of the core business strategy. For example, CEMEX in addition to enabling low-income people realize their dreams of a quality dwelling, it also enables public education to spur true sustainable economic development at the BOP. According to him the key challenge facing BOP initiatives is scale. CEMEX is exploring ideas by collaborating with NGO’s and other public sector agencies to develop plans to scale up the tremendous double bottom-line success they have realized.

A healthy discussion session helped the audience get into depth and ask critical questions to the panelists. Some very interesting insights came up when Isha Ray, the moderator, who is an Assistant Professor at ERG (http://bie.berkeley.edu/), questioned the tensions that arise from various stakeholders in BOP initiatives. WHI has had several tradeoffs to make as they served their customers at the BOP, which brings a different set of constrains as compared to serving consumers in traditional markets. On one hand NGO’s were slowing things down by arguing that water should be delivered for free to the BOP, on the other hand local governments pushed WHI to expand faster when they took notice of the successful water delivery models and finally investors were pushing for quick returns on their investment. Such a challenge is inherent in BOP models due to the private-public aspect of the business model. According to all 3 panelists, the only way to approach this is to get clear buy-in and commitment from Senior Management, hire people in the organization who “get BOP” and finally have a cohesive organization that is strongly committed to the social cause and thus doesn’t sideline BOP initiatives when the “going gets tough”.

There were a few points that I felt was not very consistent among thee 3 different panelists. A key question was the extent of social impact assessment that was done. I was surprised to find that WHI does not measure the social impact of their BOP business initiative and instead relies on general indicators such as every $1 spent in water and sanitation yields $3-$30 in benefits. While the positive social impact of clean water is obvious, this however comes at a cost to the consumer who in this case is paying a certain fee for water. On the other hand CEMEX has a very systematic impact assessment requirement as part of their Patrimonio Hoy program.

Another key question that concerned me was that as much as BOP was universally defined as “Bottom of the Pyramid”, WHI talked about their model impacting the “Base of the Pyramid” which is traditionally defined as a higher income and thus higher willingness to pay segment of the population in the developing sector. When pushed by the moderator, all 3 panelists confessed that ultimately serving the true “Bottom of the Pyramid” using a private sector approach is truly difficult and the role of aid and subsidies must be considered in serving the poorest of the poor. After all not one among us who live in the US pay full price for water, and if we can avail subsidies the poorest of the poor most definitely should get their part.

I came to the meeting with the notion that the BOP model is the cure-all, but I walked away with the realization that the fate of poverty and the poor cannot be left to the impersonal economics of dollars and cents alone, and the age old factors of human empathy, service, giving and hope is alive and much needed in the solution to ending poverty in the world.

- Vijesh Unnikrishnan


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Thursday, November 13, 2008

Who is the BOP?

I will share a few insights from my experiences working with enterprises in small communities in Africa and India, as well as the Capitalism Next Seminar held at Berkeley on Monday. Regardless of whether it is the public or the private sector who is providing services, it is important to distinguish which segment of the population we are truly targeting. The term “Base of the Pyramid” has gained popularity for both private and public sector funds. World Resources Institute identifies the BOP as those households making $3,000 or less per year. (about $8/day) Although in India the average household size is 5 people, not all of those are income generators. The United Nations has always considered the very poor as those making less than $2 per day (in PPP). I often find BOP ventures to draw a fuzzy line around who they are truly targeting.

When we target customers are we targeting the BOP, or rather mislabeling those who are indeed lower-middle class? If it is the latter, what then happens to the true BOP? Are they marginalized even further?

For the true BOP, once the most basic needs are covered, such as food, water, fuel for stoves, and cooking basic health needs, it is very difficult to generate substantial savings. Most of India’s BOP population lives in rural areas – 500 million people – where income is heavily dependent on farming. Farming incomes are highly cyclical, making the steady payback periods required for long-term financing very difficult. Given income cyclicality, it is rare to find microfinance institutions, the only institutions providing financing to the BOP, providing loans that are longer than a few months, and over 90% of all micro loans go for business needs that are quickly paid back through sales.


Two types of products in BOP markets perform well outside of the most basic categories such as food and fuel: 1) products that increased earning potential and 2) aspirational products. The first category is straightforward: if a product can increase the productivity or income potential of a BOP consumer, such as farming equipment or goods for a small shop, it has a natural and accepting market. The second category is more controversial, but important. Some companies, such as Proctor & Gamble and Coca-Cola, sell products in very small quantities that are considered luxury items for BOP consumers. However, a very small packet of detergent that may be used to clean clothes is not as controversial as selling an unhealthy product that may displace more important nutritional purchases. While permanent shelter structures can be both income generating – such as mixed use business/home structure – and aspirational, it is still very difficult to scale down a permanent building structure to a cost level where it makes sense to invest for business or purely pleasurable reasons.  

Government subsidy or slum improvement programs could alleviate the gap in the market between cost and disposable income, but government projects are problematic for multiple reasons:
  • Government money/subsidies are typically available on a project-by-project basis; 
  • Government money/subsidies are not consistent; 
  • Various governing bodies require that construction dollars are allocated to the lowest bidder, regardless of quality; 
  • The building industry is characterized by high levels of corruption, particularly around government project schemes. 
In contrast, the lower middle class have characteristics which make them an attractive opportunity for solutions that both do ‘good’ and are good business. This group is repeatedly identified by microfinance institutions, builders, NGOs, and research reports as the low-income group with the greatest potential for private sector services. A typical worker in this segment holds many of the jobs that support the higher income brackets such as drivers, in-home maids and cooks, and office servers and. This group is benefiting greatly from the rapid economic expansion in India, and its people are upwardly mobile. Heavy expenditure in child education is one of the first investments made by people moving out of subsistence living, and a key driver of the dramatic growth in the “Working Poor” and the middle class in India. As income rates climb, a new ability to generate savings drives demand for housing.

-Mira

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Tuesday, November 4, 2008

Announcing Partnership with Indian School of Business

Announcing Partnership with Indian School of Business Net Impact Chapter

We are thrilled to announce a new Sister Collaboration with the Net Impact Chapter of the Indian School of Business, Hyderabad. ISB is a top-ranked, research-driven business school with leading thinkers on social and environmental issues in emerging economies. The Net Impact Chapter in Hyderabad has been working since 1993 to examine the intersection of business and social responsibility through educational seminars and pro-bono consulting projects. http://www.isb.edu/pgp/life/NetImpact_club/Index.html

Over the summer we met with the Hyderabad Net Impact President and the ISB Center on Emerging Markets. We are now launching a program to share seminars from our clubs via video webcasting and a joint blog. Both Haas and ISB students will blog their reflections on the Capitalism Next Seminar Series. We will also blog about seminars hosted by ISB.
Please visit the ISB blog to read their entries: http://isbweblog.com/
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Tuesday, October 28, 2008

Product Red: More than Cause Marketing

Tamsin Smith of Product Red came to our Social Enterprise class tonight. As you may have seen from all those Gap ads, Product Red partners with businesses like Gap, Apple, and American Express to produce and sell a line of products whose profits help fund health projects in Africa. 



I have to admit - I came in a little skeptical of Product Red, less from any facts that I had - which were few - and more from the flurry of ads I had seen of celebrities wearing Gap clothing and talking cursorily about helping people in Africa. Wasn't this just another cause marketing effort that tried to make serious issues "sexy" and whose impact on the company's brand was bigger than on those whom it purported to help? 

The impression I left with after hearing Smith was, no, Product Red is for real, and is a really interesting model for harnessing the power of business for social good. On what observations/facts do I base this? 

1. The model: Product Red has created a meta brand that isn't tied to the specific products sold under its label but rather to a set of values and a perception of caring. Sure, it's taken Bono, Bobby Shriver, Oprah and a host of other celebrities (which makes it not very replicable) but it's working. Brands are now coming to them seeking partnership. 

2. The leader: Tamsin Smith is an impressive woman. She has a multi-sector background, having worked on Capitol Hill, at Gap, and now at Product Red. She wowed the class with her thoughtfulness, humility, and quiet strength. 

3. The results: No arguing with the numbers. Product Red has generated a staggering 115 million in profits in less than two years, all of which have been given to the Global Fund, a highly regarded, highly transparent organization that disburses grants to health initiatives in Africa. 

Bottom Line: fascinating model, doing great work, and continuing to expand into new product categories. Check out their blog here. But is this replicable? Can a different meta brand be created for other pressing issues (like climate change)? Without someone like Bono, it isn't likely. 
 
ML


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Capitalism Next Seminar - Hunter Lovins Video

Hey all,

The video session of the first Capitalism Next session with Hunter Lovins is now online. Check it out:



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Monday, October 20, 2008

Several Net Impact Members attended last week's first ever Social Capital Markets Conference in San Francisco, put on by Good Capital and several other players in the social investing landscape. In addition, several of us blogged for the nextbillion blog. Here are links to the posts!

Cindy Chen on Breaking Silos

Roxanne Miller on New African Capital

Champa Gujjanuda on the Future of Fair Trade

Charlene Chen on Innovative Ways to Invest

Roxanne Miller on Beyond Microfinance

Mike Lee on Money and Meaning
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Sunday, October 19, 2008

Capitalism Next: Hunter Lovins, A Second Perspective

On Wednesday, I had the opportunity to hear Hunter Lovins speak to a group of students from Haas and other UC Berkeley schools, including the schools of law, natural resources, and public policy. Lovins was the first speaker in a series of speakers, titled Capitalism Next, exploring how for-profit businesses can become truly sustainable. She proposes that because our world’s natural resources are becoming scarce, a new type of environmentally conscience capitalism is emerging, dubbed natural capitalism. During the industrial revolution, Lovins told us, human capital was in limited supply, and successful companies used machines and plentiful natural resources to create more value with less people. Today, in contrast, human capital is plentiful but our world’s natural resources are becoming scare. Consequently, we are experiencing a new capitalist revolution. Recognizing the value of natural resources, companies are now growing their bottom lines by minimizing their environmental impact. This is the capitalism of the future.

Lovins’ examples of companies “doing well by doing good” provides true hope for our planet. For example, Dow Chemical saved $3 Billion dollars over 3 years through their energy saving and waste reduction programs. Tesco, a leading international grocery retailer, has pledged to cut carbon emissions from all existing and new stores by 50%. Tesco has also launched a program to begin labeling foods sold in their stores with their carbon footprints. Companies are even voluntarily trading carbon on the Chicago Carbon Exchange. Participant companies include Dupont, Motorola, and Ford Motor Company. I was impressed that so many leading companies are taking steps toward environmentally responsible business.

I also came to Lovins’ speech with a unique framework. The same morning I had the privilege of touring
Arterra, a new condo development which is positioned to become San Francisco’s first LEED certified residential high rise. For those who don’t know, LEED is a green building rating system that provides a set of standards for environmentally sustainable construction. The developers of Arterra are also proving that environmentally friendly business practices can lead to profitability. In this tough real estate market, Arterra has roughly five times the foot traffic of non-sustainable condo developments and is selling well. Arterra’s developers told the tour group that while green development projects do not sell for more money, the extra expense of sustainable building projects has become minimal. On this $90 Million dollar project, the extra cost of sustainability was only $300,000, approximately 1/3 of 1 percent of the total cost!

However, as exciting as I find the idea of natural capitalism to be, Lovins’ speech left me with many un-answered questions, some of which I hope will be addressed during future Capitalism Next sessions. First, I would like to understand more about the role of government in moving industry toward environmentally conscience business. My background is supply chain consulting. While I had the privilege to work with some companies that were cognizant of their environmental impact and actively addressing it, I saw many that were not. In addition, not every change toward corporate sustainability is going to have a positive ROI. Government has played a significant role in shaping and regulating our current capitalist system. For those organizations that are not voluntarily moving toward natural capitalism or taking sufficient steps in that direction, what role will government play?

In addition, I perceive an educational gap in the ability of our nation and the world to rapidly adopt more sustainable business practices. Classmate Ari Frankel pointed this gap out to me on the Arterra tour. While most real estate development companies recognize that green building is the future of development, and while they know green projects are sound business, many companies currently lack architects, developers, and interior designers with the knowledge and skills needed to bring an environmentally friendly project to fruition. What change in education will be needed to support natural capitalism and on what scale? How will existing educational institutions manage this?

I hope to find many opportunities at Haas to continue exploring the role of business in addressing the world’s social and environmental issues. I am definitely looking forward to future sessions of Capitalism Next.

--Lauren Stark

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Thursday, October 16, 2008

Capitalism Next: Hunter Lovins

As an undergraduate student I studied biology and environmental science at Oberlin College, where liberal environmentalists debated how to overtake the American capitalist system with a new "green" capitalism. We made models of the low-carbon economy and held Hunter Lovins' book "Natural Capitalism" as the bible for the future. However, after I left Oberlin, I was challenged to find pragmatic solutions to the environmental problems we face and became frustrated with the sparce guidance that Lovins and others of her generation provided for today's problems.

Yesterday at UC Berkeley, Lovins spoke to crowd of students, faculty, and members of the general public about the tenets of "natural capitalism," the philosophy that we can transform an existing economic system that thrives at the expense of natural capital into one that thrives as a steward of natural capital. Her talk came at the heels of a World Bank report, which claims that the world is losing more money due to deforestation and biodiversity loss than to the current financial crisis.

Lovins emphasized that companies can improve their bottom line by taking measures like cutting waste and cutting carbon. However, sustainability will not always improve the bottom line. In fact, true sustainability is going to hurt. It won't always yield a positive ROI and it's going to change our consumption patterns in ways that we may not like. If we are talking about seriously transforming our system to account for the financial, social, and cultural values of natural capital, we must be upfront and honest about what these changes entail. Sugar-coating sustainability, like so many in the ranks of Lovins and other environmental writers do, is not going to lead society in the right direction.

I asked Lovins to help us understand how to value natural capital, given the inherent trade-offs and equity implications in doing so. "We don't know," was her answer, "but we know we have to do it." Frankly, that answer might have been sufficient 7 years ago, when I was in undergrad, but today, as companies are scrambling to understand environmental problems, it just isn't. Lovins created a movement of people who believed that they could change things. The next step is to create solutions and that is where I challenge Lovins to go.

At one point in the seminar, Lovins asked us to close our eyes and imagine our lives without oil. "It can happen," she cried. But, wait a minute. Oil is in everything. Petrochemicals are the building blocks of our clothes, buildings, toiletries, even food. Yes, we can redesign our cities for mass-transit, but it is going to take alot of work and much more than idealistic rhetoric.

Frankly, I believe it is the onus of those of us in the audience to understand and design specific, practical steps towards sustainability. We believe in Lovins' philosophy, but we crave more specificity and more guidance. In less than a year, I will be making my way through the capitalist jungle, and it is going to take alot more than closing my eyes to imagine a sustainable future.

Mira Inbar
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Thursday, October 9, 2008

Open Source as Social Enterprise

In my Social Enterprise Class taught by Jim Schorr on Tuesday, we had a class on Technology in Social Enterprise which featured Mitchell Baker, chair of the Mozilla Foundation. Most of you know Mozilla for producing Firefox and for using an "open source" model for developing its browser software. They were created in the 90s as a response to the monopoly that Microsoft's Internet Explorer had on the browser market and the growing concerns about pop-ups, spyware, and other privacy-invading practices. Their vision is a free internet and their belief is that private companies, without something to check their commercial impulses, will necessarily act in a way that will hurt consumers.

My first reaction to Mozilla is that it is an amazing case study in organizational behavior. They use a distributed system of authority whereby ownership of the product and company rests in the hands of hundreds and thousands of developers, most of whom are volunteers. They are a nonprofit foundation that houses a for-profit entity that generates nearly 80 million in revenue. Going up against giants like Microsoft, Apple, and now Google, Baker said that participation and ownershipby their volunteers and employees is their competitive advantage in the face of a huge resource disadvantage. Product decisions are made in a very collective fashion, and while this creates tradeoffs in terms of time spent on decision-making, Baker said the benefit is that people are extremely bought in (which means easier recruitment of talent, greater retention, and more productivity).

I wonder what other industries or products could work with this open-source model. Knowledge creation (e.g. Wikipedia) for sure, but hard to think of many others products whose development can be split up into such discrete parts and can be coordinated over long distances.

Another reaction I had is that while Mozilla's existence owes itself to the belief that commercialization and profit-seeking will create a less free and vital internet, its success has required business savvy and scale to be a relevant player in the market. Mozilla has to think about diversifying its revenue streams (which mostly come from Google ad revenues from its toolbar), has to think about how to market firefox to the non-digerati without a big marketing budget. Paradoxically, Mozilla's success in achieving its social mission rests on its ability to be a business success.
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Sunday, October 5, 2008

A Student's Perspective on... Student Perspectives

This past Tuesday, a group of second-year MBA students shared their experiences working in CSR-focused summer internships. Jo Mackness, the new Executive Director of Haas’ Center for Reponsible Business, provided her perspective as well.

One interesting trend Jo mentioned is that CSR is becoming increasingly integrated at many companies: rather than having a “CSR Department”, employees are asked to take social issues into consideration when formulating their strategy. Karen Salvini, who spent the summer working on environmental issues at a large tech firm, found the attitude was that “every job is an eco-job.” Justin Parker worked with a large chemical company on a large-scale development plan in India. Instead of “corporate philanthropy”, where a company puts in a one-time investment, this plan will create a financially viable business, providing much greater long-term impact. To me, the model of creating a financially viable business that also helps people has tremendous potential- if you’re similarly inclined, check out The Fortune at the Bottom of the Pyramid by CK Prahalad.

As someone who shared the skepticism many of us have about business’ commitment to social ventures, it was encouraging to hear there are companies with such strong commitments. There is still a need and place for foundations, however. Charlene Chen worked in business development in Ghana through Good Morning Africa, which provides support for social entrepreneurs. Wellesley Fraser helped education reform in America with Education Pioneers. For those interested in socially responsible business, there are real opportunities around the world, in a variety of capacities, which is pretty exciting. I'm hopeful that as the country and the world deal with the current financial turmoil, companies don't lose track of the importance of CSR.
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Saturday, October 4, 2008

International@Social Impact

The continuum of social change is incomplete without an international perspective. Hence the Net Impact club organized a panel discussion of students to share their views and experiences of international development opportunities at Haas. The panel discussion reinforced my belief that problem solving at ground level is the emphasis of the international experience at Haas.

The panelists discussed their experiences of the International Business Development (IBD) program, the Mayfield fellowship, Management of Technology (MOT) trips to Asia, Social Enterprise Education Design (SEED) fellowship and the Blum international research fellowship and international internships.

Megan Ryskamp and Lissa Wilson talked about their IBD consulting assignments in El Salvador and Africa respectively. Megan said that her interactions with her fellow team mates on the 3 week engagement in El Salvador taught her more about strategy and consulting than she had learnt in another formal setting. What struck me the most was that it worked wonderfully for her as immediately after the IBD tour she started her internship with British Telecom in London and was able to apply her learning of IBD to her internship in corporate strategy at BT.

Lissa Wilson said she decided to take the 10 day study tour to India as India was one of the least likely places she would visit on her own. I am glad I listened to Lissa talk about her experience as it helped me make up my mind to apply for the study trip to Brazil. As an international student coming from India, I realized that this may well be my best chance to go to Brazil – a country which I wanted to visit since the Brazilian government developed programs to attract Indian farmers to cultivate land in Brazil!

Jon Burns, a Mayfield fellow said that “the Mayfield fellows program was a great fit for my entrepreneurial goals”. Jon was a part of the eight member team that went on a two week visit to Asia. Jon’s satisfaction in his choice of Mayfield fellows rubbed on to many present including me as his specific focus areas allowed him to seamlessly combine the objective of social impact with technology in an international setting.

Panelists Nadia Madden, a SEED and Blum fellow, Michael Martin and James Platts too shared their experiences with those present. One thing that was equivocally stated by all panelists was that the international experience truly added value by exposing them to new cultures and different ways of doing business. But it also challenged them to work in in difficult and unfamiliar environments making them better team players and winning them great friends for life –the most cherished takeaway of the panel’s international experience. I think attending the panel discussion has made me articulate my own takeaways from the international opportunities I want to pursue and yes a bunch of great friends definitely makes the list.

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US Poverty - It's Not as Hard to Solve as We Think

Just listened to this podcast from This American Life. It's takeaway: lifting kids out of poverty in the US is not as hard as we think. It's being done right now, in Harlem, by Geoffrey Canada. Search for the "Going Big" episode here.

The deeper context for me here is something that Carla Javits of REDF said on Thursday during our Social Impact Week session on Financing Social Change: that folks in business school seem to be more excited about fighting poverty in the developing world than right here in the US. I agree that this is the case but WHY?

There are many explanations, some more flattering than others, but I believe one reason is that fighting poverty internationally in many ways just seems easier. The poverty in the US feels more rooted in the social, economic and political structures that exist here, and therefore, less mobile. We talk about upward mobility in America a lot but addressing poverty on a massive scale in the US feels harder to address here than it does in a place like India. An interesting possibility but this podcast makes me question whether our lack of interest is that it is harder here or just that we just aren't trying hard enough. -ML
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Friday, October 3, 2008

Corporate Sustainability: Still Cynical?

So you’re interested in “doing well and doing good,” you want a job that’s financially rewarding, and you’d even like to work for a large company. But, the pragmatist in you realizes this is a tough combination to reconcile. Large, publicly-traded and sustainable? Is this possible, or a paradox? A group of second-year MBA students held an intimate roundtable last Wednesday to share their experiences and tell us, yes, progressive and sustainability-focused companies do exist – it’s a matter of finding the right one!

The panel, entitled “Can Business Really Be Sustainable?,” asked five Haas students and moderator Megha Doshi to recount their experiences working in CSR and sustainability initiatives with multinational companies like Dow Chemical, Brown-Forman, Gap and Nike. A common thread ran through their stories: student is skeptical about the seriousness of large-scale corporate sustainability issues, student takes internship with market-leading company, student slowly sees that companies are starting to “get it” and affecting change. As panelist Mahta Eghbali explained about working for Gap, “I came in as a cynic but [the experience] silenced the cynicism. Some corporations do good work.”

The key phrase for me being “some corporations.” I’ve come fresh from the PR world, working for an agency where clients viewed CSR initiatives as a form of penance for past and future sins. At my firm, the key objective for any CSR initiative was improving brand image (and therefore increase sales), rather than serving some ingrown need to “do good.” And while this still characterizes most companies in the US business landscape, our panelists highlighted the key characteristics needed to find those companies that have gotten religious about making a difference:


1. Family-owned or community-centric. Brown-Forman and Gap are two companies that have strong ties to their founding families. This creates a tighter community, and allows the company to act as a vehicle for the family’s social causes, such as women in developing countries (Gap, Inc.) and responsible drinking practices (Brown-Forman).

2. Senior executive sponsorship for CSR initiatives. Panelist Mira Inbar recounted how executive buy-in at Dow Chemical allowed her project team to develop and pitch a business plan that is now being integrated throughout the company. Jeff Shah found that the leadership at Brown-Forman wanted to be authentic about their corporate social responsibility plans, and not just look as if they were jumping on the green bandwagon. They were thinking strategically, not reactively!


3. A strong belief in the product. The panelists felt that the most responsible companies truly believed in their products, and gave serious thoughts to how their products (and their companies) can make the world a better place. Megha realized that Nike is in midst of an existential discussion about the nature of consumption, and how improving the durability of their shoes might make them less money, but would improve the double-bottom line.


For the socially-minded MBA, there’s a growing field of opportunities to make a difference with large, market-moving companies. After the event, Megha gave the hint that this is just the tip of the iceberg. “More companies are realizing the need for CSR programs that are effective and real. Think of how far they’ve come from 5-10 years ago. It’s only going to get better.”
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Thursday, October 2, 2008

Will Rosenzweig- Successful Entreprenuer, Investor, and Teacher - Returns to Haas

I just listened to Will Rosenzweig speak at the kickoff event for Social Impact Week. Simply put, it was one of the most inspiring and insightful hours I have spent here at Haas. He started with a timeline of his remarkable career and titled it, “It takes 15 years to become an overnight success.”

He talked of planting seeds and described how he serendipitously had a hand in the beginning of what have now become established landmarks in the socially responsible business landscape. From running an early TED conference to helping found Net Impact, Business for Social Responsibility, Republic of Tea, Haas’s Center for Responsible Business, and the Global Social Venture Competition, Will has found himself –whether a central character or role player – an actor in many of the key events in the history of socially responsible business. The point I took away from his talk was that the field of socially responsible business we see blooming today took years of seed-planting and nurturing to grow and that we should not forget that the seeds we plant today, if nurtured, will continue to bear powerful fruit over time.

Amazingly, the second half of his talk was even better. He shared with us 10 guiding principles that he has learned about having a successful career at the intersection of business and social change. Some of my favorites were:
• Reciprocity and generosity – not talked about in business school, he said, but a truly powerful force in business.
• Keep your overhead low – financially, emotionally, and spiritually, he said it allows you the flexibility to respond to opportunities.

But my favorite was “Don’t be afraid of niches.” Business school often makes us afraid of niches and instead encourages us to follow the big thing, but niches are where you will find many of the future innovations. I think many of us who come to business school with dreams and interests that fall outside of the recruiting mainstream can easily feel under assault in business school. Coming from a man who has integrated his personal values and interests with his professional career, these words provided further proof that investing in heart and meaning is almost never a bad choice.

Will has graciously agreed to send us his presentation deck which we will be posting here shortly.
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Monday, September 29, 2008

Social Impact Week @ Haas

Welcome to the Net Impact Soapbox! What is the Net Impact Club and what is the Soapbox?

The Net Impact Club at UC Berkeley’s Haas School of Business is a leading chapter of the international Net Impact organization, which is a network of leaders who are changing the world through business. In addition to helping students pursue careers at the intersection of business and social change, the Net Impact Club at Haas organizes events with some of the leading thought-leaders and practitioners in the world.

The Net Impact Soapbox aims to provide the latest news and updates on inclusive wealth creation, poverty alleviation, micro finance, social enterprise, international development, corporate social responsibility, and many other topics. The Soapbox will be an up-to-date resource of the activities and events taking place at Berkeley in the sphere of social impact. More importantly, we hope the Soapbox will serve as a medium where those interested in business for social change can discuss, share, and engage.



We’re launching the Soapbox this week featuring reports from the first ever Social Impact Week @ Haas. Featuring some amazing social entrepreneurs and business leaders, Social Impact Week will be full of inspiration and insight. Make sure to check back with us throughout the week to get the reactions and reflections from our student members.
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Monday, May 12, 2008

Corporate Reputation: Does Being Ethical Matter?

Companies spend huge amounts of money to be 'socially responsible.' Do consumers reward them for it? And how much?

By REMI TRUDEL AND JUNE COTTE
May 12, 2008
http://online.wsj.com/article/SB121018735490274425.html

For corporations, social responsibility has become a big business. Companies spend billions of dollars doing good works -- everything from boosting diversity in their ranks to developing eco-friendly technology -- and then trumpeting those efforts to the public.

But does it pay off?

Many companies hope consumers will pay a premium for products made with higher ethical standards. But most companies plunge in without testing that assumption or some other crucial questions. Will buyers actually reward good corporate behavior by paying more for products -- and will they punish irresponsible behavior by paying less? If so, how much? And just how far does a company really need to go to win people over?

To find out, we conducted a series of experiments. We showed consumers the same products -- coffee and T-shirts -- but told one group the items had been made using high ethical standards and another group that low standards had been used. A control group got no information.

In all of our tests, consumers were willing to pay a slight premium for the ethically made goods. But they went much further in the other direction: They would buy unethically made products only at a steep discount.

What's more, consumer attitudes played a big part in shaping those results. People with high standards for corporate behavior rewarded the ethical companies with bigger premiums and punished the unethical ones with bigger discounts.

Finally, we discovered that companies don't necessarily need to go all-out with social responsibility to win over consumers. If a company invests in even a small degree of ethical production, buyers will reward it just as much as a company that goes much further in its efforts.

Below, we'll look at these tests in more detail. But first, a definition -- and a caveat.

For our purposes, "ethically produced" goods are those manufactured under three conditions. First, the company is considered to have progressive stakeholder relations, such as a commitment to diversity in hiring and consumer safety. Second, it must follow progressive environmental practices, such as using eco-friendly technology. Finally, it must be seen to demonstrate respect for human rights -- no child labor or forced labor in overseas factories, for instance.

Now the warning, which may not come as much of a surprise. Even though we think ethical production can lead to higher sales, not all consumers will be won over by the efforts. Some may prefer a lower price even if they know a product is made unethically.

With that in mind, here's a closer look at our results.

HOW MUCH ARE ETHICS WORTH?

Our first experiment asked two questions. How much more will people pay for an ethically produced product? And how much less are they willing to spend for one they think is unethical?

To test these questions, we gathered a random group of 97 adult coffee drinkers and asked them how much they would pay for a pound of beans from a certain company. We used a brand that's not available in North America, so none of the participants would be familiar with it.

But before the people answered, we asked them to read some information about the company's production standards. One group got positive ethical information, and one group negative; the control group got neutral information, similar to what shoppers would typically know in a store.

After reading about the company and its coffee, the people told us the price they were willing to pay on an 11-point scale, from $5 to $15. The results? The mean price for the ethical group ($9.71 per pound) was significantly higher than that of the control group ($8.31) or the unethical group ($5.89).

Meanwhile, as the numbers show, the unethical group was demanding to pay significantly less for the product than the control group. In fact, the unethical group punished the coffee company's bad behavior more than the ethical group rewarded its good behavior. The unethical group's mean price was $2.42 below the control group's, while the ethical group's mean price was $1.40 above. So, negative information had almost twice the impact of positive information on the participants' willingness to pay.

For companies, the implications of this study -- albeit limited -- are apparent. Efforts to move toward ethical production, and promote that behavior, appear to be a wise investment. In other words, if you act in a socially responsible manner, and advertise that fact, you may be able to charge slightly more for your products.

On the other hand, it appears to be even more important to stay away from goods that are unethically produced. Consumers may still purchase your products, but only at a substantial discount.

HOW ETHICAL DO YOU NEED TO BE?

Our next test looked at degrees of ethical behavior. For instance, are consumers willing to pay more for a product that is 100% ethically produced versus one that is 50% or 25% ethically produced?

To find out, we tested consumers' responses to T-shirts from a fictitious manufacturer. We divided 218 people into five groups and presented them with information about the company and its product. One group was told the shirts were 100% organic cotton, one group 50% and one group 25%. Another group -- the "unethical" one -- was told there was no organic component. The control group got no information.

In addition, all the groups but the control were shown a short paragraph detailing the detrimental effects of nonorganic cotton production on the environment.

Then the participants were asked how much they were willing to pay for the shirts on a 16-point scale, ranging from $15 to $30. As in the first test, we found that people were willing to pay a premium for all levels of ethical production, and they would discount an unethical product more deeply than they would reward an ethical one.

But consumers didn't reward increasing levels of ethical production with increasing price premiums. The 25% organic shirts got a mean price of $20.72 -- not much different from the 50% ($20.44) and 100% ($21.21).

It seems that once companies hit a certain ethical threshold, consumers will reward them by paying higher prices for their products. Any ethical acts past that point might reinforce the company's image, but don't make people willing to pay more. (Of course, if 100% ethical becomes expected among consumers, anything less may be punished.)

WHAT EFFECT DO CONSUMER ATTITUDES HAVE?

In our final experiment, we looked at the attitudes people bring to the table. If consumers expect that companies will behave ethically, will that change how much they reward and punish behavior? What if they expect that companies are just in it for the money, maximizing profits and not taking ethics into account?

Once again, we tested coffee drinkers -- 84 this time -- and split them into groups that received positive, negative and no ethical information about the manufacturer and its methods. But first we measured the people's attitudes toward corporations and labeled them high-expectation or low-expectation.

Once again we found that -- regardless of their expectations -- consumers were willing to pay more for ethical goods than unethical ones, or ones about which they had no information. Likewise, negative information had a much bigger bearing on consumer response than positive information. People punished unethical goods with a bigger discount (about $2 below the control group) than they rewarded ethical ones with premiums (about $1 above the control group).

So, what effect did consumer attitudes have? People with high expectations doled out bigger rewards and punishments than those with low expectations. Those with high expectations were willing to pay a mean of $11.59 per pound for the ethical coffee, versus $9.90 for those with low expectations. And the high-expectations group punished the unethical coffee with a price of $6.92, versus $8.44 for low-expectations consumers.

The lessons are clear. Companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because those are the customers who can deliver the biggest potential profits on ethically produced goods.

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Saturday, May 10, 2008

'Genocide' Olympics

April 24, 2008
www.economist.com/daily/news/displaystory.cfm?story_id=11089786&fsrc=nwl


When it comes to doing business in China, Sudan, and Myanmar, will constructive engagement work, or is divestment the answer? How can corporations operate in countries with corrupt government regimes and improve human rights? This Economist article suggests the trend among human rights circles is toward collaboration among governments, NGOs, and corporations.

By the standards of any previous boss of Coca-Cola, Neville Isdell is remarkably enlightened. Under his leadership, the soft-drinks giant has adopted a strategy of extending access to water supplies in the developing world, especially in Africa, where Mr Isdell spent 26 years. It is an active member of several organisations committed to promoting human rights, including the United Nations Global Compact. Even so, Mr. Isdell now finds himself accused by human-rights activists of “complicity” with one of the world’s most prominent human-rights abusers—the government of China.

No doubt sponsoring this summer’s Beijing Olympics once seemed like a good idea to Coca-Cola and a gaggle of other big companies such as General Electric, Johnson & Johnson, Kodak, McDonald’s and Samsung. The marketing benefits of the Olympics are believed to be huge, which is why Coca-Cola has been doing it continuously for 80 years.

Yet by branding the Beijing games the “genocide Olympics”, after the Chinese government turned a blind eye to the Sudanese government’s atrocities in Darfur, human-rights activists are threatening to lay waste to the $1 billion or so that sponsors have paid—and turn what they hoped would be an association with a joyous celebration of sport into a tricky exercise in reputational damage limitation. Firms that criticise China publicly over human rights risk antagonising not just its government, but also its people—a billion-odd potential customers. Recent protests in China against Carrefour, a French retailer, in response to pro-Tibet demonstrations in France, highlight the dangers.

Coca-Cola is doing some good things in Darfur, from providing i\mmediate relief on the ground to meeting “stakeholders” to try to figure out solutions to the crisis. But is this enough to buy Coca-Cola the right to remain silent in public about China? As Mr Isdell puts it, “rather than make public statements, we have chosen a more direct and, in our view, more effective route to help address the staggering human suffering in Darfur.” Not good enough, retorts Human Rights Watch, along with other campaigning NGOs.

It is tempting to dismiss this as another example of the old divide between political activists who favour protest and business realists who favour “constructive engagement”, which has cropped up dozens of times—not least during the debate over sanctions against apartheid South Africa. Yet the battle over the Olympics paints a false picture of the current relationship between business and human-rights activists. What is striking today is how often activists, big firms and governments are in agreement about the importance of human rights, and are working together to advance them.

This new consensus is reflected by the lack of serious opposition to a new report by John Ruggie, the UN Special Representative on Human Rights, which proposes a new framework that states clearly that firms have a responsibility actively to respect human rights. If this is adopted by the Human Rights Council in June, as seems likely, it will be the first time that the UN human-rights machinery has taken a substantive position on companies’ responsibilities. Mr Ruggie hopes for greater clarity over the duties of firms and governments, and a better balance between protecting the legitimate interests of investors with the needs of host states to discharge their human-rights obligations.

The adoption of a UN standard is likely to trigger a new spurt of activity in defining best practice, much of it involving collaboration between businesses and NGOs. This will build on work in recent years, which began after Royal Dutch Shell, an oil giant, was embroiled in scandal surrounding the execution of Ken Saro-Wiwa, a Nigerian activist and writer, in 1995. Among other things, a campaign by Global Witness, an NGO, resulted in the Kimberley Process, which attempts to keep “conflict diamonds” off the market; another collaboration led to a code of practice requiring firms to oversee the human-rights compliance of those responsible for ensuring their security in dangerous places, including government soldiers.

The Global Compact, which obliges signatories to uphold certain basic standards, has also been popular. Over 3,000 companies have signed up, including several in China. Though weakly policed, the compact has some teeth: 335 firms were struck off its list of signatories in 2006.

Chinese firms are slowly becoming more sensitive to human rights, says Sir Mark Moody-Stuart, chairman of Anglo American, a mining giant. Rather than criticism, says Sir Mark, Chinese bosses respond far better to patient explanations that older multinationals became supporters of human rights because they learnt to their cost that when those rights are ignored, bad things happen. Despite the Chinese government’s many failings, its promotion of the “harmonious society” is taken seriously by Chinese bosses, says Sir Mark. Invoke this term, he says, and they get the message.

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Friday, May 9, 2008

Chastised by bloggers, Dell aims to cut down on waste

May 9, 2008


Never doubt that a small group of loud, critical bloggers can change Dell's packaging." Photos published on the internet during Earth Week of a tiny flash drive arriving to a customer in a giant box provoked enough outcry in the blogosphere that Dell is taking immediate steps to reduce packaging waste. The company has sent a directive requesting that envelopes be used for small items, and plans to reduce the size of its boxes in the short term. Says Dell, "Our sincere gratitude goes out to everyone who pointed this irregularity out to us." Which is an awfully polite response, considering Gizmodo's not-so-polite headline about the overpackaging: "Dell's wasteful shipping habits take a steamy dump on the environment."

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Gin, Television, and Social Surplus

www.worldchanging.com/archives/008009.html
May 7, 2008

by Clay Shirky

I was recently reminded of some reading I did in college, way back in the last century, by a British historian arguing that the critical technology, for the early phase of the industrial revolution, was gin.

The transformation from rural to urban life was so sudden, and so wrenching, that the only thing society could do to manage was to drink itself into a stupor for a generation. The stories from that era are amazing-- there were gin pushcarts working their way through the streets of London.

And it wasn't until society woke up from that collective bender that we actually started to get the institutional structures that we associate with the industrial revolution today. Things like public libraries and museums, increasingly broad education for children, elected leaders--a lot of things we like--didn't happen until having all of those people together stopped seeming like a crisis and started seeming like an asset. It wasn't until people started thinking of this as a vast civic surplus, one they could design for rather than just dissipate, that we started to get what we think of now as an industrial society.

If I had to pick the critical technology for the 20th century, the bit of social lubricant without which the wheels would've come off the whole enterprise, I'd say it was the sitcom. Starting with the Second World War a whole series of things happened--rising GDP per capita, rising educational attainment, rising life expectancy and, critically, a rising number of people who were working five-day work weeks. For the first time, society forced onto an enormous number of its citizens the requirement to manage something they had never had to manage before--free time.

And what did we do with that free time? Well, mostly we spent it watching TV.


We did that for decades. We watched I Love Lucy. We watched Gilligan's Island. We watch Malcolm in the Middle. We watch Desperate Housewives. Desperate Housewives essentially functioned as a kind of cognitive heat sink, dissipating thinking that might otherwise have built up and caused society to overheat.

And it's only now, as we're waking up from that collective bender, that we're starting to see the cognitive surplus as an asset rather than as a crisis. We're seeing things being designed to take advantage of that surplus, to deploy it in ways more engaging than just having a TV in everybody's basement.

This hit me in a conversation I had about two months ago. As Jen said in the introduction, I've finished a book called Here Comes Everybody, which has recently come out, and this recognition came out of a conversation I had about the book. I was being interviewed by a TV producer to see whether I should be on their show, and she asked me, "What are you seeing out there that's interesting?"

I started telling her about the Wikipedia article on Pluto. You may remember that Pluto got kicked out of the planet club a couple of years ago, so all of a sudden there was all of this activity on Wikipedia. The talk pages light up, people are editing the article like mad, and the whole community is in an ruckus--"How should we characterize this change in Pluto's status?" And a little bit at a time they move the article--fighting offstage all the while--from, "Pluto is the ninth planet," to "Pluto is an odd-shaped rock with an odd-shaped orbit at the edge of the solar system."

So I tell her all this stuff, and I think, "Okay, we're going to have a conversation about authority or social construction or whatever." That wasn't her question. She heard this story and she shook her head and said, "Where do people find the time?" That was her question. And I just kind of snapped. And I said, "No one who works in TV gets to ask that question. You know where the time comes from. It comes from the cognitive surplus you've been masking for 50 years."

So how big is that surplus? So if you take Wikipedia as a kind of unit, all of Wikipedia, the whole project--every page, every edit, every talk page, every line of code, in every language that Wikipedia exists in--that represents something like the cumulation of 100 million hours of human thought. I worked this out with Martin Wattenberg at IBM; it's a back-of-the-envelope calculation, but it's the right order of magnitude, about 100 million hours of thought.

And television watching? Two hundred billion hours, in the U.S. alone, every year. Put another way, now that we have a unit, that's 2,000 Wikipedia projects a year spent watching television. Or put still another way, in the U.S., we spend 100 million hours every weekend, just watching the ads. This is a pretty big surplus. People asking, "Where do they find the time?" when they're looking at things like Wikipedia don't understand how tiny that entire project is, as a carve-out of this asset that's finally being dragged into what Tim calls an architecture of participation.

Now, the interesting thing about a surplus like that is that society doesn't know what to do with it at first--hence the gin, hence the sitcoms. Because if people knew what to do with a surplus with reference to the existing social institutions, then it wouldn't be a surplus, would it? It's precisely when no one has any idea how to deploy something that people have to start experimenting with it, in order for the surplus to get integrated, and the course of that integration can transform society.

The early phase for taking advantage of this cognitive surplus, the phase I think we're still in, is all special cases. The physics of participation is much more like the physics of weather than it is like the physics of gravity. We know all the forces that combine to make these kinds of things work: there's an interesting community over here, there's an interesting sharing model over there, those people are collaborating on open source software. But despite knowing the inputs, we can't predict the outputs yet because there's so much complexity.

The way you explore complex ecosystems is you just try lots and lots and lots of things, and you hope that everybody who fails fails informatively so that you can at least find a skull on a pikestaff near where you're going. That's the phase we're in now.

Just to pick one example, one I'm in love with, but it's tiny. A couple of weeks one of my students at ITP forwarded me a a project started by a professor in Brazil, in Fortaleza, named Vasco Furtado. It's a Wiki Map for crime in Brazil. If there's an assault, if there's a burglary, if there's a mugging, a robbery, a rape, a murder, you can go and put a push-pin on a Google Map, and you can characterize the assault, and you start to see a map of where these crimes are occurring.

Now, this already exists as tacit information. Anybody who knows a town has some sense of, "Don't go there. That street corner is dangerous. Don't go in this neighborhood. Be careful there after dark." But it's something society knows without society really knowing it, which is to say there's no public source where you can take advantage of it. And the cops, if they have that information, they're certainly not sharing. In fact, one of the things Furtado says in starting the Wiki crime map was, "This information may or may not exist some place in society, but it's actually easier for me to try to rebuild it from scratch than to try and get it from the authorities who might have it now."

Maybe this will succeed or maybe it will fail. The normal case of social software is still failure; most of these experiments don't pan out. But the ones that do are quite incredible, and I hope that this one succeeds, obviously. But even if it doesn't, it's illustrated the point already, which is that someone working alone, with really cheap tools, has a reasonable hope of carving out enough of the cognitive surplus, enough of the desire to participate, enough of the collective goodwill of the citizens, to create a resource you couldn't have imagined existing even five years ago.

So that's the answer to the question, "Where do they find the time?" Or, rather, that's the numerical answer. But beneath that question was another thought, this one not a question but an observation. In this same conversation with the TV producer I was talking about World of Warcraft guilds, and as I was talking, I could sort of see what she was thinking: "Losers. Grown men sitting in their basement pretending to be elves."

At least they're doing something.

Did you ever see that episode of Gilligan's Island where they almost get off the island and then Gilligan messes up and then they don't? I saw that one. I saw that one a lot when I was growing up. And every half-hour that I watched that was a half an hour I wasn't posting at my blog or editing Wikipedia or contributing to a mailing list. Now I had an ironclad excuse for not doing those things, which is none of those things existed then. I was forced into the channel of media the way it was because it was the only option. Now it's not, and that's the big surprise. However lousy it is to sit in your basement and pretend to be an elf, I can tell you from personal experience it's worse to sit in your basement and try to figure if Ginger or Mary Ann is cuter.

And I'm willing to raise that to a general principle. It's better to do something than to do nothing. Even lolcats, even cute pictures of kittens made even cuter with the addition of cute captions, hold out an invitation to participation. When you see a lolcat, one of the things it says to the viewer is, "If you have some sans-serif fonts on your computer, you can play this game, too." And that's message--I can do that, too--is a big change.

This is something that people in the media world don't understand. Media in the 20th century was run as a single race--consumption. How much can we produce? How much can you consume? Can we produce more and you'll consume more? And the answer to that question has generally been yes. But media is actually a triathlon, it 's three different events. People like to consume, but they also like to produce, and they like to share.

And what's astonished people who were committed to the structure of the previous society, prior to trying to take this surplus and do something interesting, is that they're discovering that when you offer people the opportunity to produce and to share, they'll take you up on that offer. It doesn't mean that we'll never sit around mindlessly watching Scrubs on the couch. It just means we'll do it less.

And this is the other thing about the size of the cognitive surplus we're talking about. It's so large that even a small change could have huge ramifications. Let's say that everything stays 99 percent the same, that people watch 99 percent as much television as they used to, but 1 percent of that is carved out for producing and for sharing. The Internet-connected population watches roughly a trillion hours of TV a year. That's about five times the size of the annual U.S. consumption. One per cent of that is 100 Wikipedia projects per year worth of participation.

I think that's going to be a big deal. Don't you?

Well, the TV producer did not think this was going to be a big deal; she was not digging this line of thought. And her final question to me was essentially, "Isn't this all just a fad?" You know, sort of the flagpole-sitting of the early early 21st century? It's fun to go out and produce and share a little bit, but then people are going to eventually realize, "This isn't as good as doing what I was doing before," and settle down. And I made a spirited argument that no, this wasn't the case, that this was in fact a big one-time shift, more analogous to the industrial revolution than to flagpole-sitting.

I was arguing that this isn't the sort of thing society grows out of. It's the sort of thing that society grows into. But I'm not sure she believed me, in part because she didn't want to believe me, but also in part because I didn't have the right story yet. And now I do.

I was having dinner with a group of friends about a month ago, and one of them was talking about sitting with his four-year-old daughter watching a DVD. And in the middle of the movie, apropos nothing, she jumps up off the couch and runs around behind the screen. That seems like a cute moment. Maybe she's going back there to see if Dora is really back there or whatever. But that wasn't what she was doing. She started rooting around in the cables. And her dad said, "What you doing?" And she stuck her head out from behind the screen and said, "Looking for the mouse."

Here's something four-year-olds know: A screen that ships without a mouse ships broken. Here's something four-year-olds know: Media that's targeted at you but doesn't include you may not be worth sitting still for. Those are things that make me believe that this is a one-way change. Because four year olds, the people who are soaking most deeply in the current environment, who won't have to go through the trauma that I have to go through of trying to unlearn a childhood spent watching Gilligan's Island, they just assume that media includes consuming, producing and sharing.

It's also become my motto, when people ask me what we're doing--and when I say "we" I mean the larger society trying to figure out how to deploy this cognitive surplus, but I also mean we, especially, the people in this room, the people who are working hammer and tongs at figuring out the next good idea. From now on, that's what I'm going to tell them: We're looking for the mouse. We're going to look at every place that a reader or a listener or a viewer or a user has been locked out, has been served up passive or a fixed or a canned experience, and ask ourselves, "If we carve out a little bit of the cognitive surplus and deploy it here, could we make a good thing happen?" And I'm betting the answer is yes.

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boardnetUSA - revolutionizing the way nonprofit boards and new leaders find each other

Want to serve on the board of a nonprofit organization? Check out this site:

www.boardnetusa.org/public/home.asp

boardnetUSA is a website that’s designed to be a marketplace where nonprofits looking to fill board seats can connect with individuals looking to serve on nonprofit boards.

The site is designed to be a common technological platform for a national collaborative network of communities working locally to enhance nonprofit board governance. This growing network of Community Partners work together on common themes of populating board rooms as well as individually developing services tailored to their local market.

The Volunteer Consulting Group, a 501(c) (3) nonprofit organization in New York City with over 30 years of experience aiding in the development and strengthening of nonprofit organizations, initially developed the concept of boardnetUSA. With assistance from philanthropic and corporate supporters the Volunteer Consulting Group serves as the primary management and coordinating entity of the growing national network that is boardnetUSA.

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Study find meat and dairy create more emissions than miles

Do "food miles" matter? Studies should that it's the realy climate change impact of the food chain is in the energy it takes to produce the fertilizer and pesticides that make the grain that make your meat. Transporting food has a relatively minimal impact.

By Rachel Ehrenberg
May 1, 2008
www.sciencenews.org/view/generic/id/31673/title/It%E2%80%9s_the_meat_not_the_miles

Diet substance has a greater impact than diet origin on greenhouse gas
emissions. Eat your veggies. Swapping emissions-intensive red meat and dairy for vegetables, chicken or fish can be as powerful as reducing overall food miles.

Buying local certainly reduces the miles food goes before we eat. But consumers aiming to shrink their ecological footprint will get more bang for their environmental buck by eating less red meat and dairy, reports a new study. The analysis finds that transporting food to the consumer accounts for only 4% of food-associated greenhouse gas emissions, while production contributes a hefty 83%.

“There are many good reasons for going local,” comments Rich Pirog, associate director of the Leopold Center for Sustainable Agriculture at Iowa State University in Ames. “But this study is important. Food miles alone are not a reliable indicator of environmental impact.”

For the average U.S. consumer, getting the equivalent of one-seventh of a week’s calories from chicken, fish or vegetables instead of red meat or dairy will do more to reduce greenhouse gas emissions than buying all local, all the time, the researchers say. Crunching the numbers revealed that delivery to the consumer accounts for only 1 percent of red meat–associated emissions. But the production path to red meat and dairy products is clouded with nitrous oxide and methane emissions, mainly from fertilizer use, manure management and animal digestion.

“Methane and nitrous oxide production are huge in agriculture,” says the study’s first author Christopher Weber of Carnegie Mellon University in Pittsburgh. These greenhouses gases are often left out of similar analyses, which have tended to focus solely on carbon or energy use. “That misses a huge part of the picture,” Weber says.

Weber, who conducted the study with colleague, H. Scott Matthews, notes that they aren’t trying to downplay the benefits of buying local. “I shop locally,” he says. “But there’s been so much emphasis on food miles. We felt it was important to look at the whole life cycle.”

Using data from the U.S. departments of Commerce, Agriculture, Transportation and other sources, Weber and Matthews modeled the total greenhouse gas emissions generated in making and moving all sorts of foods from cereals to fish to cheese. The work, to appear in the May 15 Environmental Science & Technology, paints a broad brush, cautions Weber. Because the model uses Commerce Department data, the food categories are defined by Commerce Department food sectors. So while cheese and milk are considered separately, fruits and vegetables are put in the same category.

Apples and oranges aside, the paper “is an important contribution,” comments Greg Keoleian of the Center for Sustainable Systems at the University of Michigan in Ann Arbor. “More quantitative assessments like this are needed to help us understand the consequences of our choices.”

The research highlights how complicated those choices are. “There is no one silver bullet way of reducing climate change,” says the Leopold Center’s Pirog. “These are very complex systems.” He notes that the environmental burden of food goes beyond emissions — fertilizers often impact water quality, for example. And while land use may not be as efficient on a small local farm, if that farm’s beef cattle are eating grass, they may have a lot less environmental baggage than corn-fed cattle from a conventional feedlot. Other choices, such as purchasing heirloom tomatoes, are important for maintaining crop diversity, which makes the agricultural sector less susceptible to diseases and pathogens.

Weber and Matthews’ analysis looks at the hard numbers of getting food to the plate, and paying attention to that path has merit, says Keoleian. But Americans would do well to make those paths less traveled, period, he says. A 2003 study Keoleian conducted with University of Michigan colleague Martin Heller found that 26 percent of edible food in the United States is wasted, uneaten on the plate or left as offerings to the mold gods in the back of the fridge. Upgrading appliances, like refrigerators, can also substantially reduce food-related energy consumption, he says.

If there’s a take-home message, it might be that one-dimensional food choices aren’t very effective, Weber says. Pirog agrees. “As we look at food purchases we need to consider health, safety, the environment, economics and community,” Pirog says.

Overwhelmed? Don’t be. This new study just reemphasizes the sound advice people have been getting since elementary school, Pirog says. “Eat a healthy balanced diet, with a minimum of processed food. Eat a moderate amount of dairy and meat. Eat more whole grains and veggies. Following that advice will probably reduce your carbon footprint.”



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Is the drive for sustainability killing creativity?

www.bdonline.co.uk/story.aspsectioncode=427&storycode=3113145&c=2&encCode=00000000014c8df0
May 9, 2008

Austin Williams, author of new book The Enemies of Progress, is convinced it is, but Pooran Desai of BioRegional Quintain has plenty of examples to back his counter-argument.

"Yes, sustainable design is killing creativity."
Austin Williams, Author, The Enemies of Progress

The commonplace assumption underlying even the most anodyne sustainability discussion is that human activity causes harm and should be reined in to suit whatever Nature’s limits allow. If our starting point is that increased human activity is inherently detrimental, then architects are simply in the business of damage limitation.

"No, sustainable design is not killing creativity."
Pooran Desai, Sustainability director, BioRegional Quintain

On the contrary, necessity is indeed the mother of invention and the greatest spur to creativity. There are endless examples of creative, sustainable buildings — ZedFactory’s BedZed, Rogers’ Welsh Assembly building, and Ted Cullinan’s Weald & Downland museum to name but three.

Sustainability has led to an explosion of creativity in every field: in engineering (concentrated solar power, energy from waste, anaerobic digestors, thin-film photovoltaics); materials (cement replacements, recycled plastics); governance (carbon trading, the Merton rule in planning, sustainability managers); supply chain management (One Planet Products, M&S Plan A, B&Q One Planet Home); environmental economics; household gadgets (wind-up radio, the Interflush water-saving device); and transport (car clubs, electric city cars, hybrids, the Oyster card, my zero-waste, zero-carbon waste cooking oil-powered sports car).
"Yes, sustainable design is killing creativity."


The commonplace assumption underlying even the most anodyne sustainability discussion is that human activity causes harm and should be reined in to suit whatever Nature’s limits allow. If our starting point is that increased human activity is inherently detrimental, then architects are simply in the business of damage limitation.

How can architecture maintain the illusion of genuine creativity without challenging this widespread malaise? Crystal ball-gazing, eco-miserablist architect Sue Roaf argues that “everyone needs to futureproof themselves against what lies ahead”, as if whatever it is, it’s bound to be bad.

If we define “creativity”in terms of minimal impact survivalism, then shanty dwellers are wonderfully creative with tarpaulin and string. But coping strategies are nothing to celebrate or emulate. Transforming Nature and social barriers, and not accepting so-called environmental parameters, is what meaningful architectural creativity should be about.

The mantra “less is more” has gone from being a defining moment in modernist thought to the unquestioned orthodoxy of our environmental age. Unfortunately, its progressive content has been stripped away.

Efficiency used to encourage us to design creatively in order to, as Buckminster Fuller implied, do more and more. Now, environmental efficiency states that using less is an end in itself. Sustainability is a moral injunction for restraint. Architecture has become a carbon spreadsheet. In that sense, the essence of imagination is lost.

"No, sustainable design is not killing creativity."

On the contrary, necessity is indeed the mother of invention and the greatest spur to creativity. There are endless examples of creative, sustainable buildings — ZedFactory’s BedZed, Rogers’ Welsh Assembly building, and Ted Cullinan’s Weald & Downland museum to name but three.

Sustainability has led to an explosion of creativity in every field: in engineering (concentrated solar power, energy from waste, anaerobic digestors, thin-film photovoltaics); materials (cement replacements, recycled plastics); governance (carbon trading, the Merton rule in planning, sustainability managers); supply chain management (One Planet Products, M&S Plan A, B&Q One Planet Home); environmental economics; household gadgets (wind-up radio, the Interflush water-saving device); and transport (car clubs, electric city cars, hybrids, the Oyster card, my zero-waste, zero-carbon waste cooking oil-powered sports car).

The world has changed in only a couple of years. The days of plentiful, cheap oil have gone for good. For the first time in 40 years, food security is back on the agenda — not only as an international political issue but as a domestic one as well. We now know we must find solutions which enable us to lead high-quality lives within the limits of the planet’s finite resources. Creativity is not about ignoring constraints. That is madness, literally a state of dissociation from reality. Creativity is about solutions which overcome constraints.

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Thoroughly Modern Do-Gooders

March 21, 2008
By DAVID BROOKS
www.nytimes.com/2008/03/21/opinion/21brooks.html

Fashions in goodness change, just like fashions in anything else, and these days some of the very noblest people have assumed the manners of the business world — even though they don’t aim for profit. They call themselves social entrepreneurs, and you can find them in the neediest places on earth.

The people who fit into this category tend to have plenty of résumé bling. Bill Drayton, the godfather of this movement, went to Harvard, Yale, Oxford and McKinsey before founding Ashoka, a global change network. Those who follow him typically went to some fancy school and then did a stint with Teach for America or AmeriCorps before graduate school. Then, they worked for a software firm before deciding to use what they’d learned in business to help the less fortunate.

Now they work 80 hours a week, fighting bureaucracies and funding restrictions in order to build, say, mentoring programs for single moms.

Earlier generations of benefactors thought that social service should be like sainthood or socialism. But this one thinks it should be like venture capital.

These thoroughly modern do-gooders dress like venture capitalists. They talk like them. They even think like them. That means that aside from the occasional passion for heirloom vegetables, they are not particularly crunchy. They don’t wear ponytails, tattoos or Birkenstocks. They don’t devote any energy to countercultural personal style, unless you consider excessive niceness a subversive fashion statement. Next to them, Barack Obama looks like Abbie Hoffman.

It also means that they are not that interested in working for big, sluggish bureaucracies. They are not hostile to the alphabet-soup agencies that grew out of the New Deal and the Great Society; they just aren’t inspired by them.

J.B. Schramm created a fantastic organization called College Summit that provides students with practical guidance through the college admissions process. Gerald Chertavian, a former software entrepreneur, created Year Up, which helps low-income students get apprenticeships in corporations and packages its fund-raising literature in the form of an I.P.O. prospectus.

The venture-capital ethos means instead that these social entrepreneurs are almost willfully blind to ideological issues. They will tell you, even before you have a chance to ask, that they are data-driven and accountability-oriented. They’re always showing you multivariate regressions or explaining why some promising idea “didn’t pencil out.” The highest status symbol in their circle is a Rand study showing that their program yields statistically significant results.

Bill Gates, who fits neatly into this world, came to dinner with journalists in Washington last week. He looked utterly bored as the conversation drifted to presidential campaign gossip. But when asked about which programs produce higher reading scores, the guy lit up and became a fountain of facts and findings.

The older do-gooders had a certain policy model: government identifies a problem. Really smart people design a program. A cabinet department in a big building administers it.

But the new do-gooders have absorbed the disappointments of the past decades. They have a much more decentralized worldview. They don’t believe government on its own can be innovative. A thousand different private groups have to try new things. Then we measure to see what works.

Their problem now is scalability. How do the social entrepreneurs replicate successful programs so that they can be big enough to make a national difference?

America Forward, a consortium of these entrepreneurs, wants government to do domestic policy in a new way. It wants Washington to expand national service (to produce more social entrepreneurs) and to create a network of semipublic social investment funds. These funds would be administered locally to invest in community-run programs that produce proven results. The government would not operate these social welfare programs, but it would, in essence, create a network of semipublic Gates Foundations that would pick winners based on stiff competition.

There’s obviously a danger in getting government involved with these entrepreneurs. Government agencies are natural interferers, averse to remorseless competition and quick policy shifts. Nonetheless, these funds are worth a try.

The funds would head us toward this new policy model, in which government sets certain accountability standards but gives networks of local organizations the freedom to choose how to meet them. President Bush’s faith-based initiative was a step in this direction, but this would be broader.

Furthermore, we might as well take advantage of this explosion of social entrepreneurship. These are some of the smartest and most creative people in the country. Even if we don’t know how to reduce poverty, it’s probably worth investing in these people and letting them figure it out.

They won’t stop bugging us until we do.



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Thursday, May 1, 2008

Environmental Defense partners with private equity firm

The Environmental Defense Fund has struck a first-of-its-kind "green portfolio" deal with gigantic private equity firm Kohlberg Kravis Roberts. The partnership plans to develop tools to measure and improve the environmental performance of KKR'S U.S. companies, with metrics including energy efficiency, greenhouse-gas emissions, water consumption, and toxic waste.

KKR has more than $185 billion in revenue and owns 46 companies, including Toys "R" Us, U.S. Food Service, Sealy, Nielsen, and Energy Holdings (formerly TXU); EDF and KKR were involved in brokering a 2007 buyout of TXU that resulted in coal plants being canceled, and the transaction spurred partnership talks between KKR and EDF.

Who ever said good can't come from coal?

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New report from SustainAbility on the Social Intrapraneur

New report from SustainAbility on the Social Intrapraneur (those who make change within big corporations). Great reading for anyone interested in CSR thinking about whether to try to make big change locally (nonprofit/social enterprise) or small change globally (CSR at a big for-profit).

Download the report here:
www.sustainability.com/insight/article.asp?id=1457.
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Saturday, April 26, 2008

Companies' "green" claims often misleading

www.greenerchoices.com
Tuesday, April 22, 2008

Are companies exploiting the "green" trend by touting supposed environmental benefits of products that aren't much greener than alternatives? Consumers can play a role in controling greenwashing and ensuring that sincere efforts to launch environmentally benefitical products and services aren't washed out in the greenwashing storm.

These days--and especially around Earth Day--companies want to be seen with an environmental halo. But experts say many are guilty of "greenwashing" -- claims that mislead consumers, by words or image, about the environmenal impact of their products. Consumers are catching on, however. And that could undermine the growing green movement in corporate America--and possibly invite government regulation. “The timeframe for companies to get away with greenwashing is shrinking because the consumers are getting…much more skeptical of these kinds of these green claims,” says Scot Case, vice president of US operations for TerraChoice, an independent environmental marketing.
One possible result, he says, is that the “green consumer movement is going to collapse because consumers will walk away from false claims.” That would hurt many mature consumer products, such personal care and home improvement supplies, where green products are the fastest growing segment.

Rampant corporate dissembling has already led government regulation in Britain and Australia where officials now impose heavy fines for false claims. In the U.S., the Federal Trade Commission has stepped up a review of its own environmental marketing standards and is currently holding public hearings.

Six Sins of Greenwashing
In a study of 1,018 products from six “category-leading big box stores,” TerraChoice found that all but one made claims that were either “demonstrably false or that risk misleading intended audiences.” The firm, which has identified six broad categories of greenwashing sins, declines to name sinners --or the singular saint--preferring to allow for a “genuine misunderstanding” on appropriate standards.

There is, for instance, the "sin of irrelevance." Aerosol cans now commonly sport environment-friendly green dots because they have no ozone-depleting chlorofluorocarbons. But only a minority explain, in small print, that CFCs were outlawed in 1978.

Another example: paper products are widely labeled "recyclable" though they may not have been. “Everyone has thrown their hat in the ring to be green, but now comes the time…for companies to not just say they are green, but to prove it,” says David Lockwood, director of research for Mintel, a market research firm.

The growth potential for the green market is huge because ”the great majority of respondents still believe their shopping decisions can make a difference in the world,” a recent Mintel survey noted.

Grassroots Internet Policing
But that requires confronting greenwashing. A growing array of vetting services can help. Consumer Reports launched its greenerchoices.org screening service on Earth Day in 2005, while a recent Nielsen report noted that blogosphere criticism of dubious corporate claims doubled between 2006 and 2007.

In January, the advertising faculty at the University of Oregon launched greenwashingindex.com, an open forum for posting and commenting on company advertising.

"Dirty" industries like utilities and automobile companies are favorite targets for ridicule.
Among the most pilloried was a coal industry association ad, which used Kool & the Gang’s "Celebrate." Even those with an easier case to make, can overdo it. An ad by Toyota which makes the market-leading hybrid Prius - showed a car made of wood, which could later biodegrade, to burnish the 'greenness' of its vehicles.

These ads just don’t cut any more,” says Deborah Morrison, an advertising professor at Oregon University. “I see how my teenagers watch these ads – they are quick to call the B.S. – they are looking for authenticity.”

“The issue of climate change is too important to be screwing around,” adds Kevin Tuerff, president of EnviroMedia Social Marketing, an environmental marketing firm in Austin, Texas. “The changes that are coming…are going to have big impacts so it is in companies best interest to get their house in order when comes to sustainability, and then go out and tell their message to consumers.”

Possible Third-Party Solutions
But for all the skepticism there also still appears a fair amount of gullibility. Almost half of Americans erroneously believe products marketed as “environmentally friendly” actually have beneficial impacts, according to a survey conducted for Boston College’s Center for Corporate Citizenship. Ninety percent say companies making environmental claims need to prove it. Close to 60% favor government enforcement but even more support self-policing by industry.

The most popular option is third party certification--the route many leading companies are taking, especially if they have environmental baggage. That may have been the thinking of Clorox, which launched of a line of natural cleaning products Monday.
Clorox won the endorsement of the venerable Sierra Club – which in exchange is getting an undosclosed percentage of sales

“It is literally unprecedented for us to put out logo on a product - we are a 116 years old - so that’s a significant change for us,” said David Willet, the Sierra Club’s national press secretary. The move led to a four-year suspension of the Florida chapter, which strongly protested the new alliance, because of Clorox’s past record.

Fortunately, most experts say, consumers don’t expect companies to turn a new green leaf overnight but say transparency becomes even more important. “If the consumer does not understand exactly what that product has done to improve its environmental performance, the green washing flags go off,” says Case. “People are recognizing every single purchase has hidden human and environmental impacts and as a result people are trying to buy a green version of just about everything.”

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