David Blood on Sustainability

Sustainability investing is the explicit recognition that social, economic, environmental, and ethical factors directly affect business strategy—for example, how companies attract and retain employees, how they manage the risks and create opportunities from climate change, a company’s culture, corporate-governance standards, stakeholder-engagement strategies, philanthropy, reputation, and brand management. These factors are particularly important today given the widening of societal expectations of corporate responsibility.

David Blood, Co-CEO and CEO of Goldman Sachs Asset Management (1999–2003)

For further data ,watch video of discussion between, David Blood, John Elkington, and Al Gore:

Perspectives on Triple Bottom line

20 years as managing director in Investment banking and Private equity funds, looking solely for economic value creation, for a 35% IRR for investors seems difficult to U-turn. But surprisingly, once you pass the intangible threshold (and you find it its not only possible, but the business of this century, which is in the midts of disruptive transformations, that occur faster that we can comprehend) you understand that its not a swerve that occurs but a simple changing of lanes.

Those years of Bulls and Bear... suspenders...

The signals are clear. The largest retailers of the US are adopting sustainable practices; Hundreds of consumers go through Wal Mart and Home Depot every week and receive a message.
(To those that claim greenwashing, I ask, "does it matter"?)
We Media is grouping conscientious consumers in thousands of participating communities; Myspace’s population has reached that of the ten largest countries of the world.

To the point….
My friend Carlos P. made a magnificent comparison today, he compared it to the sunset.
"Do you know", he said, "that between the actual sunset and what we see, there is an eight-minute delay"?
"If the sun had been turned off, we would only realize eight minutes after."

It's a question of time.

The revolution really has started: More on Patagonia and Wal Mart

"The revolution really has started," says Yvone Chouniard with a slow, curling and just slightly subversive smile. "I'm blown away by Wal-Mart. If Wal-Mart does one-tenth of what they say they're going to do, it will be incredible. And hopefully America will get a government that we need rather than one we deserve, that will put pressure on business to clean up its act. But the most powerful pressure will come from the consumer. Oh, my God, it's going to be really powerful."

As Chouinard sees it, there's only one downside to this good news: It's probably too late. "There's a race between running out of water, topsoil or petroleum. I don't know what's going to be first. Or maybe it will all happen at once."

Read the Fortune article.

Visit Patagonia Blog

Wal Mart and Sustainability 360: Greenwashing or true change?

Wal-Mart’s CEO launched “Sustainability 360,” an initiative that involves working with suppliers to reduce packaging by 5% by 2013 – an effort that will be equal to removing 213,000 trucks from the road, and saving approximately 324,000 tons of coal and 67 million gallons of diesel fuel per year.
Wal-Mart's six path strategy focuses on its own environmental footprint and that of its 60,000 suppliers. It has big ambitions to cut the waste sent to landfill, build more energy efficient stores and take "a hard look at what is on our shelves".
The question is: are these thousands of suppliers genuinely trying to understand what sustainability really is? Or are they only changing their practice just enough so as to maintain Wal Mart as a client?
If Wal Mart is strict enough in its policy, and keeps setting higher sustainability standards, does it really matter if suppliers only go after Wal Mart business or if they truly embrace the sustainability phylosophy?
I believe one leads to the other, many companies like Patagonia, Interface, Natura, American Apparel have found the benefits of sustainable Business practices. Currently, Wal Mart and its suppliers are on the way to discovering this.

Paul Hawken, The author of the Ecology of Commerce, defined in a recent interview that "Sustainability comes when the light bulb goes on and you start to see that we are all involved, that everything is interconnected that your actions affect others", and when we do see this, you longer ask, or discuss, if it is right or wrong, you look for a solution.

100 million customers visit Wal Mart every week, many light bulbs should go on in their stores.

Yvon Chouinard lists Patagonia's values, and with them five steps to action> They are I believe, the five best actions to reach sustainability.

Chouinard's five steps.
read the whole essay

STEP 1: Lead an examined life. Most of the environmental damage human’s cause is a result of ignorance.
STEP 2: Clean up your act. Once you learn the environmental costs, try to reduce them. And when you can reduce them, you must.
STEP 3: Do your penance. No matter how diligent a corporation, it causes waste and pollution.
STEP 4: Support civil democracy. It’s obvious that governments and corporations hold a lot of power, but so do small groups of people who care passionately about an issue and press their cause.

STEP 5: Influence other companies. If you undertake the other steps, this one is a natural. The company that discovers new ways to be more environmentally responsible has an obligation to spread the word to others – to share the knowledge of what can be done.

At this moment Wal Mart is leading the influence movement on other companies,
60,000 of them!.

On Corporate Responsibility for Planet Earth

On Corporate Responsibility for Planet Earth

by Yvon Chouinard
Read the whole essay

As an alpinist who set out to make gear for my friends and never thought of myself as a “businessman” until long after I became one, I’ve wrestled the demons of corporate responsibility for some time. Who are businesses really responsible to? Their shareholders? Their customers? Their employees? None of the above, I have finally come to believe. Fundamentally, businesses are responsible to their resource base. Without a healthy planet there are no shareholders, no customers, no employees. As the conservationist David Brower liked to say, “There is no business to be done on a dead planet.”

But what does behaving responsibly to the environment mean? It took me nearly 25 years in business to learn how to ask that question. It has taken another 15 years of trial and error to uncover the process that Patagonia – or any environmentally minded company – has to go through in pursuit of answers. I think I know how to break that process down to five steps. These steps apply to individuals as well as to companies who want to reduce the harm they do and make a difference.

STEP 1: Lead an examined life.
STEP 2: Clean up your act.
STEP 3: Do your penance.
STEP 4: Support civil democracy.
STEP 5: Influence other companies.

Conclusion

In the end, Patagonia will never be completely socially responsible, nor at any time soon be able to make a totally sustainable (“cradle-to-cradle” recyclable) product. We have a long way to go and we don’t have a map – but we do have a way to read the terrain and to take the next step, and then the next.

Wal Mart and Unilever. Responible production - distribution.

In late 2005, Unilever management sat with Wal Mart’s CEO, Lee Scott, to convince him that they could save, per year, 16 million liters of water, 113.500 liters of diesel, six million kilos of plastic and 630 thousand square meters of carton . The product, the All Small and Mighty, with sales over $100 million, became Wal Mart 's Value Producing Item and Unilever’s most successful launched product of 2006.

EPIC: Stile and consumption meet Sustainability

Click for video


What fuels this new Movement?

• Growing emphasis on transparency throughout the international business world.
• Mounting influence of ideas about corporate social responsibility.
• Consumer demand for authenticity in commercial products.
• Increasing global calls to eliminate poverty.
• Rising pressure to protect nature.
• More companies concerned about diminishing natural resources.

Source: Meindert Brouwer's forthcomming book Amazon Your business, via Ode.

Chapter six: Sustainability, Triple bottom line, a new Corporate Consumer relationship

“I managed Interface as a looter, taking things that were not mine. Things that belong to every creature on Earth. At some point I realized: Oh my God! There will come a time when this will be illegal. A time when looting won’t be allowed. Some day, people like me will end up in jail”.
Ray Anderson, chairman and CEO, Interface

A recent survey carried out by The Synergos Institute in several countries shows that 95% of consumers believe that companies have a debt towards their employees and the community. It also indicates that 3 of every 10 English consumers either chose or boycotted brands, products, or companies for ethical reasons in the last 12 months.
It would indeed look as if we are converging, little by little, at the same manner of thinking. The same ethos. Sustainable development, a concept that leads us not to live beyond our possibilities –– not to burn down our house to keep ourselves warm, or cut the tree branch we are sitting on. A concept that leads us to attend to current needs without jeopardizing future generations’ possibilities, in the words of Swiss philanthropist and businessman Stephan Schmidheiny. Actually, this concept is sheer common sense: the one that drives us to close the faucet while we are brushing our teeth.
Because of these and other signs, pioneer brands are already working on integrating the sustainability of their positioning strategies and communicating it to their publics. They understand the imperious need to establish a new relationship with their consumers.

Signs: Model companies and responsible consumers
• Toyota Motor Co. created sedan Prius, the first low-cost mass-produced electric car. By this means it expects to reach 15% of worldwide sales of hybrids, which would entail beating General Motors as the planet’s greatest automobile manufacturer.
• The annual sales of Interface –one of the world’s largest carpet manufacturers– add up to about USD one million-million a year. Since the company started its sustainability initiatives, it has saved more than USD 70 million. For the year 2020, Interface has set itself the challenge of becoming the first sustainable industrial company on the planet.
• Brazilian cosmetics company Natura was, back in the 80s, one of the first in the world to incorporate the concept of “refill”, thus proving its concern for its products’ environmental impact. Today, holding 19% of the market, it is the leader of its sector in South America – a brand valued at 113% of annual sales, and having grown 32% in sales in 2 years.
• No less than 84% of consumers in Brazil would recommend products that assign a percentage of their sales to a social cause or a NGO.
• 40% of consumers in Chile have punished or are willing to punish irresponsible companies.
• In Argentina, 51% of consumers are willing to pay more for products from companies that show they are socially responsible.
• According to the World Bank, European consumers have refused to buy American genetically modified foods.
• On the other hand, the USA –under pressure from its consumers–forbade the importation of tuna fish from Mexico due to that country’s not having prevented the killing of dolphins while fishing.

Nike: Change of habits
The world’s great economic and media groups base their business model on their capacity to influence the needs, desires and lifestyles of their consumers. But what happens when consumers voluntarily change their habits? Market researches have already identified a new consumer that rewards socially and environmentally committed companies while punishing irresponsible ones. Consequently, in order to stay competitive, companies must adjust their business model and anticipate new demands. Some pioneer brands have already found an innovative way of communicating with this new client.
In the aftermath of the scandal caused by its use of sweatshops (as denounced in Naomi Klein’s book No Logo), Nike started manufacturing in a cleaner, more responsible manner. “We know from experience how much a brand can suffer when its practices are questioned,” say company presidents Mark Parker and Charlie Denson. The company launched the Nike Considered line of products, incorporating organic cotton. Furthermore, it changed the values reflected in its advertising campaigns. “I don’t play for prizes,” affirms Ronaldinho, Brazilian football’s star player, in one of the brand’s recent ads.

Kryptonite: Consumers to power
Many are the companies have implemented decisive transformations in their way of doing business. They have understood that, in this new environment, brands must bare their souls, mission, sense, and commitment to a world that both desires and needs to be sustainable. They have understood also that deception cannot be gotten away with and that, in this era, consumers simply cannot be ignored.
Kryptonite is a manufacturer of bicycle padlocks. One year ago, a user posted in a blog that their “high security” padlocks could be opened with a pen. The company tried to ignore this and discredit the comment. A few days later, there appeared on the Internet a video showing that the padlocks were truly “made of butter”. Stubbornly, Kryptonite issued a press release insisting that they were safe. Then, another few days later, the story appeared in the New York Times, making an approximate 5 million readers aware of the episode. Kryptonite finally announced that it would change all the padlocks at an estimated cost of USD 10 million.

“We want to be happy and content and not to exploit our employees. We are interested in music, hedonistic, and love sex.”
Dov Charney, founder, American Apparel

American Apparel: The business of doing things right
American Apparel is located in downtown Los Angeles, where all the cotton garments the company manufactures are cut and sewn. While a great part of the textile industry has opted for foreign labor plants –located mainly in those countries where labor force is much cheaper than in the USA– American Apparel intended from the very start to distance itself completely from the so-called “sweatshops”. The company treats its employees with dignity and respect, besides offering them salaries that are way higher than the average, medical benefits and paid holidays.

This strategy has paid off fairly well: today, American Apparel is considered to be among the ten most growing companies in the country within its sector. In the period spanning the years 2000-2004, its sales increased 900%, compared with the 12,9% growth of the garment industry in the USA. Competitors GAP and H&M reached 40% and 76% respectively. For Dov Charney, founder and owner since 1997, the success of this no-logo brand can be explained thus: “Our aim is to make clothes that people like, without employing slave labor. And it seems that people are liking them…”

The future is here
The following news, published towards the end of the year 2006, show that the world has already changed.

• On September 20th, the State of California filed huge claims against six large car manufacturing companies for their responsibility regarding global warming. General Motors, Toyota, Ford, Honda, Chrysler, and Nissan were sued for manufacturing millions of vehicles that release 289 million tons of carbon dioxide a year into the atmosphere.
• “This is not a hobby. We aren’t doing it to improve our reputation or to feel good,” said Gary Sheffer to ABC channel. Mr. Sheffer is Communications and Public Affairs Manager of General Electric, whose sales of environment-friendly products have grown 100% in 2005, reaching a total of USD 10,000 million.
• “We want to transform the world’s largest supermarket chain into the greenest one, and to transform our suppliers as well,” says Lee Scott, CEO of Wal-Mart, the greatest buyer of organic cotton on the planet.

Sustainable human development
It’s part of the business already. It’s not certain whether it was consumers, activists, or pioneering businesspeople that set it in motion – but, sometime while we were all discussing its signs, the change began.


Triple Bottom Line
This term refers to a company’s results, measured in economic, environmental, and social terms, as expressed in the corporate reports of sustainable development-committed companies. For the time being, these measurements are voluntary. 68% of Western European multinational corporations currently carry out this kind of measurement, while in the USA, even though the figure is lower at a current 41%, the increase is still dizzying. In every case, companies presenting this kind of analysis have realized, before the rest, that in the immediate future consumers will become more and more responsible – and will demand to know the economic, environmental, and social impact of the products they reward with purchase.

“An authentic brand has to decide what it will give from itself. It must answer itself difficult questions. Who are we? What is our mission? How do we want to contribute to the world? This is the greatest challenge brands must face today: to rediscover their inspiration. It’s a process that can only be carried out by looking inwards, with less market research and more self-evaluation”.
Jay Walljasper, editor, Ode

Chapter Five: Wikipedia, collective intelligence and the long tail participation

“The call is historic because it doesn’t issue from a political party. It issues from the Internet, and it’s democratic because there are cybercafés everywhere. The Web is the weapon, and that’s why old politicians don’t understand what’s happened. They only use it to look at naked chicks”.
Chilean student

Our global society is in the early stages of what could be a media revolution as great as that produced by Gutenberg’s printing press in 1448: the birth of the participatory media. The era of the mass media, which began in the twentieth century, is undergoing a crisis. The way in which people connect to information is being crucially changed by a series of technological modifications. There has been born a new force of citizen journalists, armed with photograph-taking cell phones, connected via the Web and with blogs as their means of publishing.
The question is how does one join the pieces of a jigsaw puzzle without knowing what the final picture looks like? By starting at the edges. That is why we certainly cannot predict the exact shape the communications media will take as a result of this revolution. Neither do we know what kind of citizen will arise as a consequence of the use of the participatory media. But at the edges of the system we perceive signs of change whose impact we can already see.

The long tail
The Internet made a U-turn after the 2001 collapse of the dot-coms. After the bubble burst, the only survivors were the software, sites and proposals that form the so-called Era of the Web 2.0. And this is not just about the Internet – because, in its infrastructure, it implies not only access to the Web (which has been in existence for decades) but also a widely spread, always-online broadband access. An access in which uploading speed will soon match downloading speed.
In the new model, small sites constitute the majority of Internet contents. Google’s success (and that of its advertising service, Google AdSense) lay in reaching the entire Web – the extremes and not just the center, the long tail and not just the head.
Thus, the most competitive companies will be those that reach a critical mass of information thanks to users’ participation and transform said contributions into system services. The challenge: to turn clients and consumers into contributors.

Signs: I participate, you participate, we participate
• Around November 2005, 57% of American youths created Internet contents, from texts to photographs, music and videos (source: Pew Internet & American Life Project).
• You can browse over 25 million blogs in the Technorati directory. The blogosphere has grown 100 times in 3 years.
• In the relatively small market of Argentina, 1 million people are broadband services subscribers. In any small town in the country, one can use Internet at a cybercafé for twenty US cents an hour.
• An Online Publishers Association research carried out in February 2006 has shown that 69% of American users had seen videos on the Internet, that 24% did it at least once a month, and that 5% did it every day .

Ohmy News, CNN & BBC: The birth of citizen journalism
In South Korea, Ohmy News, an online newspaper created by Oh Yeon Ho, a journalist retired from the traditional media, receives 2 million visits a day. But his newspaper has no editorial office or staff, no war correspondents, no prestigious columnists. Just 33,000 ordinary citizens who contribute their articles. It also possesses a rating system that places the most-read notes above the rest. A further novelty: just as people at a bar or restaurant leave a tip, Ohmy News readers can make small donations when they enjoy their reads. One article made USD 30,000 in one day. But Ohmy News is not an isolated case. The CNN has just launched the CNN Exchange section for the rising citizen journalism – where the public can upload texts, photos and videos. “Send in your story. Share your ideas. Leave your mark,” they urge. The English BBC, through its website, also encourages its users to participate. In that country, photos taken with cell phones during the London metro attacks surpassed any expression from the traditional media.

Wikipedia, the collective intelligence
Wikipedia is the best example of a novelty – collective intelligence. This free, user-written online encyclopedia already boasts 1 million articles in the English version and is 12 times bigger than the printed version of the Encyclopedia Britannica. Over 100,000 people from all over the world have contributed to the building of it. It has more visitors than the New York Times and CNN sites, among others. And it has been in existence for only five years.

We, the media
Every second that passes, a new blog is created in the world, according to the blog-searching engine Technorati. 50,000 new posts (entries of information, texts, photos or videos) are entered every hour. And yet a blog is more than a personal page such as have existed since the nineties – the difference being that now the new technologies allow us to link one blog with another, subscribe, and receive a notification every time the blog changes. It’s not just a link; it’s a “permalink”. The permalink is what has transformed blogs from a publishing tool into a conversation tool. From this chaos of dialoging and superimposing communities, the discussion has arisen. The Chat appeared. A “we, the media” world appeared. A world in which the audience is deciding what’s important.
It was none other than Charles Johnson, a blogger, who discovered that a photograph from the international news agency Reuters about the Israel-Hezbollah conflict had been digitally adulterated. The agency had to apologize publicly and withdraw from its files that and a further 920 pictures taken by photographer Adnan Hajj, who was fired.

The time of the Mojos
Research on audience tastes indicates that people increasingly want local news, sports, entertainment, climate, and traffic information, and less agency-produced, long reports repeated ad nauseam throughout the media. People expect to be told shorter stories and to be given relevant information. Based on this information, Gannett, the greatest newspaper group in the world, is trying to make its journalists focus on more local issues. That’s why it has invested in “mojos” (mobile journalists) equipped with laptop computers and always out in the streets, where things are taking place that matter to the community.

Clip culture: vlogs
Towards the beginning of 2006, the vlog (video blog) Rocket Boom was being watched by 350,000 people a day , half of which are outside the USA. A perfectly ordinary girl who every day issued her own three- to five-minute television program on the Internet, giving her own peculiar vision of reality. The cost of producing that program? Twenty dollars a day, plus a USD 14,000 Sony HDV camera and a set in producer Andrew Baron’s apartment in New York’s West Side.
YouTube was born in December 2005 out of the simple idea of making it easier to upload homemade videos to the Web. A million videos had already been published before its official launching. Halfway through 2006, 50,000 videos a day had been uploaded, and people were watching some 100 million videos a day. And these are figures that keep growing.
Contents change, supporting devices change too. Multimedia reproducers become portable. Users download videos to watch in their iPods or cell phones. Entertainment has ceased to be a synonym for sitting on the sofa in front of a square box. Reception moments become more personal.

The end of the media as we know them
For the first time in more than a century, ordinary citizens represent a challenge to the few corporations dominating the mass media. Borders between audience and communicators become blurred and sometimes downright invisible. The old media model was “there is a source of truth”. The new model is “there are multiple sources of truth, and together we’ll determine which are the most important contents and values”. An Oxford professor’s blog can become as popular as that of a Shanghai secretary telling about the trivial details of her daily life in China. The decision is in people’s hands.

Challenges
Questions arise: How will the brands make use of these new media? How do they want to talk with the new, participative citizen? Even though the media may have become sophisticated, successful models demonstrate that their strategy is among the oldest – telling stories. The challenge is thus to tell stories that move, inspire and promote participation.

Sustainability and Triple Bottom Line surf the disruptive wave of New media

Cannibals with forks is probably the best book on Sustainable development since Paul Hawken’s The Ecology of Commerce. Fifteen years later, John Elkington, its author, and Chairman of Strategy consultants, SustainAbility, identifies seven revolutions that are already transforming the world of business. Transcending another diagnosis, and in an attempt to start walking the talk, he goes on to define the Thirty-nine steps to sustainability. We will elaborate more on future posts, for now check SustainAbility.com.

Elkington suggests that we are already seeing the emergence of a new- or renewed -set of values, many of which will be central to the sustainability transition. He defines sustainability “as a new form of value which society will demand and which successful businesses will deliver through transformed markets”.
This is a different approach to the traditional WBCSD or Schmidheiny’s definition.
I admire Elkington’s exactness in the affirmation “society will demand”, a concept we have been emphasizing for some time both in this blog and in the more elaborated Spanish version “el viaje de Odiseo”.

I am convinced that this demand will be the most critical factor of change, it will be sudden, decisive and of great impact. Most businesses will no even know where it is coming from since the power force behind it is strengthening and escalating in what we have defined as the New Web, We Media or the upcoming Web 3.0.

Elkington goes on to affirm that the revolution "is under way and is fueled by growing international transparency, and it will accelerate. This process is itself being driven by the coming together of new value systems and radically different information technologies”.

Due to its publishing date (1997-99) the book does not mention the changes profound changes in the Web 2.0. (which I might have overly stressed in this blog).
We clearly concur that powerful forces are colliding for a major change in the way we produce, consume and communicate. He defines seven revolutionary forces: Markets, Values, Transparency, Life-cycle technology, Time, Partnerships and Corporate Governance.

The “tipping point” (a term coined by Malcolm Gladwell to define the moment when something unique and unusual becomes normal) has come so much closer to occur since then, and it is about to take place, if it has not yet.

I coincide with his seven drivers, but I am convinced that since the publication of this book three of them have proven deeper in strength and have confirmed the erosion of the foundations of twentieth century capitalism: a profound value shift in society, an anew business conscience and the transparency new web technologies have instated.

Business will find its thinking, priorities, commitments, Elkington affirms, and activities under increasingly intense scrutiny worldwide. Some forms of disclosure will be voluntary, but others will evolve with little direct involvement from most companies. He convincingly concludes, “The transparency revolution is out of control”.

BlackBerry on a Sustainable Development campaign

Has BlackBerry decided to associate its new campaign to the sustainable development “green” movement that Wall Mart and GE embraced last year?
We will probably see more of these ads where BlackBerry speaks through committed environmentally friendly leaders.



"I'm passionate about sustainable environment. Our premium homecare products are bringing green to mainstream. In the last three years, the company experienced 3,400% growth, kicking off a tidal wave of demands on my time. I never stop moving. Firing up a laptop isn’t going to happen. Blackberry gives me fingertip access to what I need. And I guess most importantly, it helps me manage my own sanity." Says Adam Lowry co-founder of Method products Inc.

Best Q&A in the world

Q: How does the site plan to maximize revenue?

The CEO answered as follows:

A: “That definitely is not part of the equation. It’s not part of the goal.”

Q: How did the site arrive at $10 for real estate listings, Schachter asked.

A: “Ten dollars sounded like a nice round number,” Buckmaster answered, totally deadpan, as the crowd laughed.

Q: Is the company considering hooking up with Google for AdSense ads?

A: “We’ve had the numbers crunched for us,” “The numbers are quite staggering.”
"But, no, the site wasn’t interested. since users have been requesting that we take out the ads, so for us, that’s the end of the story,” he said to the befuddlement of the crowd. “If users start calling out for text ads, we’ll listen.”

In what turned out to be a culture clash of near-epic proportions, Craigslist CEO Jim Buckmaster spoke to the investment community this morning at the UBS global media conference in New York.

Via Mediapost