Sensible dialogue about GMOs

Monsanto-protestOK, I know that’s not an attention-getting headline. I was tempted to go with “Why Monsanto cannot and never will be able to control the world’s food supply.” But because genetically-modified crops are already one of the most divisive and emotional topics in sustainability, there’s no need to pour fuel on the fire. Instead, let me point you to this forum in the current issue of Boston Review which seeks to bring insight, respectful conversation and yes, science, to the conversation about GMOs.

The forum is anchored by a long and thoughtful essay from Pamela Ronald, a professor of plant pathology at UC Davis, who argues that GMOs are safe for humans to eat and pose no special environmental risks. Nevertheless, she writes, governments need to regulate new GMO crops and public-sector financing, as opposed to corporate control, is probably the best way to research and develop seed varieties to benefit farmers in poor countries.

Pamela (who I’ve written about before, here) also reminds shoppers who pursue so-called natural foods that

virtually every crop grown for human consumption has been genetically modified in some way: bananas are sterile plants with artificially induced triple chromosomes, some varieties of California-certified organic rice were developed through radiation mutagenesis, and most cheeses use genetically engineered rennet as a key ingredient.

In other words, unless you forage for wild berries, hunt game, or catch wild salmon, you are consuming a food that has been genetically altered.

Yes! There really is almost no such thing as natural foods, despite the labels that proliferate in supermarkets. [See my July blogpost, Our misguided fetish for “natural” foods.)

I also liked this essay by farmer and dietician Jennie Schmidt, explaining why farmers decide to plant GMO seeds, and the measured approach taken by Margaret Mellon of the Union of Concerned Scientists, who explains that her “major concern about genetic engineering is not its risks but that its over-hyped promises will divert resources from the pursuit of more promising technologies.”

I’ve contributed a story to the forum that looks at corporate opposition to GMOs. Companies like Whole Foods, Stonyfield Yogurt, Naked Juice (which is part of PepsiCo) and even McDonald’s have either opposed transgenic crops, or tried to steer clear of them. I argue that their resistance to support GMO technology could “stand in the way of biotech innovations that, at least in theory, could make agriculture more sustainable.”

My story concludes:

This corporate opposition to GMOs surely has effects, hard as they may be to measure. In all likelihood, they discourage research into biotech solutions to plant diseases such as the coffee rust that threatens the coffee industry and the “citrus greening” that has spread through Florida orange groves. Biotech companies have developed soybeans with a healthier fatty acid composition, which would give soybean oil a profile more like that of heart-healthy olive oil. But consumer resistance could mean that such healthier products never reach the shelves. Indeed, despite the defeat of California’s GMO labeling initiative last year, it appears as if the anti-GMO forces are winning the battle for the hearts, if not the minds, of America’s food shoppers. So much for Monsanto’s quest for world domination.

The idea that Monsanto–or anyone–can control the world’s food supply is, frankly, ludicrous. No farmer is obligated to buy Monsanto’s seeds and many, of course, do not.

Two concluding thoughts: I wrote in my story that “organic farmers understandably worry that their crops will be contaminated by genetically modified crops growing nearby.” Jon Entine of the Genetic Literacy Project wrote me to say that “contamination” is a loaded word, and that the correct scientific term is “cross-pollinate.” Cross-pollination isn’t a health or environmental issue, but when GMO crops find their way into organic or conventional fields, by wind or insects or some other means, the organic or conventional farmers can suffer economic damage, particularly if they are growing for export markets. [See my 2011 blogpost, Attack of the mutant rice, and my 2007 Fortune story, also called Attack of the mutant rice, if you're curious about what can go wrong.]

Finally, I’ve been pleased to read some superb reporting about GMOs lately, particularly from Amy Harmon of The New York Times and Nathanael Johnson of Grist. Maybe, just maybe, we can get beyond the polarized GMO debate. The more that people understand what plant breeders and farmers do, and why they do it, the more likely that we will collectively make wise decisions about when GMO technology makes sense and how best to manage it.

Are your investments tied to genocide?

SP1119147That’s a refugee camp in Sudan. If you are an investor in mutual funds, it’s possible–perhaps even likely–that you own a small share of one of a number of foreign oil companies that are doing business with the government of Sudan, and thereby helping to finance a genocidal, outlaw government that is directly and indirectly responsible for the deaths of millions of people, and the displacement of many more.

I’m returning to the subject of “genocide-free” investing with a column this week at Guardian Sustainable Business, about the puzzling and troubling refusal of a mutual fund managed by ING US to even consider divesting in holdings in foreign oil companies that do business in Sudan. US oil companies are prohibited by law from operating there, but US-based mutual funds are free to invest in Chinese, Indian and Malaysian oil companies that help finance the Sudanese authorities.

Despite the best efforts of an advocacy group called Investors Against Genocide, big US mutual fund companies including Fidelity, Vanguard, JP Morgan Chase and Franklin Templeton continue to invest those foreign oil companies. It’s not because they are unaware of the issue. I’ve covered the topic of “genocide-free” investing since 2007, beginning with a story for Fortune.com headlined Fidelity’s Sudan Problem, and followed a few months later by another called Warren Buffett and Darfur. By then, Harvard, Yale and Stanford had divested their holdings in PetroChina and Sinopec, demonstrating that divestment is both possible and practical. In 2009, as an investor in mutual funds managed by Fidelity and Vanguard, I voted for divestment (and blogged about it here).

A few mutual fund companies–notably T. Rowe Price and TIAA-CREF–have agreed to purge their holdings of the Asian oil companies, but most have resisted. Among the most egregious is ING US, whose own shareholders voted for divestment. If nothing else, this is a reminder that we’re a long way from achieving “shareholder democracy” in corporate America.

Here’s how my story for Guardian Sustainable Business begins:

Call me old school but, in my view, companies should be accountable to their owners.

They should also try to stay away from repressive governments like the one in Sudan, where millions of people have been killed in a long-running genocide.

So when, as part of a campaign to stop the flow of money to Sudan, investors voted to ask a mutual fund managed by ING US to sell its holdings in companies that “contribute to genocide or crimes against humanity,” you’d think that ING US would comply.

It has not.

You can read the rest here.

To put this in perspective: It has been more than 15 years since the U.S. imposed sanctions on Sudan, and nine years since the killings in Darfur were declared to be a genocide by the U.S. Congress. Yet financial institutions are still investing in the worst companies funding the genocide.

It’s another reason, not that we need one, why so much of Wall Street is rightly held in such low esteem by so many Americans.

My beef with B Corps

logoThere’s lot to like about the fast-growing B Corps movement, and one thing to dislike, as I explain in my latest column for Guardian Sustainable Business US.

If you’re reading this blog, you are probably aware of B Corps. The idea takes a bit of explaining. B Corps are businesses that are certified by a nonprofit organization called B Lab to meet what its backers call “rigorous standards of social and environmental performance, accountability, and transparency.” These businesses win certification much in the way that buildings are certified to have meet LEED environmental standards by the nonprofit U.S. Green Building Council; they have to complete an assessment of their performance, provide documentation and be open a review from B Lab, as the group explains here.

But the term B Corps is also used to describe “benefit corporations,” a corporate legal structure that has been set up by legislation that has now been passed by 20 states, including, most recently, Delaware. Benefit corporations need not be certified by B Lab, although many are.

It’s unavoidably confusing, but my beef with B Corps is simple.

The voluntary certification system makes sense to me, for reasons that I explain in the story–it’s a way to signal employees, customers and investors that a B Corps aims to do better than conventional companies. Most B Corps are small and privately held. Among the best known are Patagonia and Ben & Jerry’s, which is a unit of a conventional C Corps, Unilever.

The legal “benefit corporation” purportedly gives companies more freedom to serve society as a whole than conventional corporations have. I’m skeptical about this claim, to say the least, and I worry that it could be counterproductive–because it implies that conventional companies, which make up the bulk of the global economy, need to pursue profits, at the expense of broader social and environmental goals. This seems wrong on the face of it. After all, if Ben & Jerry’s can be certified as a “good” B Corps, doesn’t that mean that its parent company, Unilever, can be “good” too?

My worry is that the implicit argument — that most of the world’s companies don’t have the freedom to do the right thing for society — undermines faith in capitalism (which is fragile, at best, for good reason) and that it discourage reformers inside and outside of big companies who are pushing corporate America to do business better. It’s a bit smug to suggest that traditional companies can’t do as much good for the world as B Corps can.

Here’s how my story begins:

To the supporters of B Corps – benefit corporations that say they aim to serve workers, communities and the environment, as well as their owners – 1 August 2013 was an historic day. In what B Corps described as “a seismic shift in corporate law,” the state of Delaware, where one million businesses are legally registered, enacted legislation that will “redefine success in business” by giving the owners and managers of legally recognised B Corps protection as they pursue “a higher purpose than profit.”

The B Corps movement has much to be proud of: it has built a brand that stands for good business, attracted hundreds of committed followers and sparked debate about the role of business in society. But claims – sometimes made explicitly, sometimes implicitly – that B Corps have more freedom to take an expansive view of their social and environmental responsibilities is not only mistaken, but potentially damaging to the cause of sustainable business.

After all, if conventional companies have no choice but to focus narrowly on maximising short-term profits, at the expense of workers, communities and the planet, then we’re in a heap of trouble and unlikely to get out, because 99% of US businesses today are conventional C Corps, and most are likely to remain so.

You can read the rest here.

Will better disclosure help transform business?

accountingWhose sustainability performance is better, PepsiCo or Coca-Cola? Dell or HP? Microsoft or Google? Tracking sustainability metrics isn’t easy, but that hasn’t stopped numerous organizations from trying.

One of the newest and most ambitious efforts comes from the Sustainability Accounting Standards Board (SASB), a non-profit group based in San Francisco,which is trying to set standards for sustainability reporting, much in the way that the Financial Accounting Standards Board (FASB), has done for financial reporting.

I took a look at SASB (it’s pronounced sazz-bee) in my latest story for Guardian Sustainable Business. Here’s how it begins:

In the annual report known as a Form 10-K that is filed with the Securities and Exchange Commission, Coca-Cola outlines a variety of risks to its business, as public companies are required to do.

The global beverage giant, which booked $48bn in revenues in 2012, talks about how water is “a limited resource in many parts of the world, facing unprecedented challenges from over exploitation, increasing pollution, poor management and climate change.” Coca-Cola says that its plastic bottles could be subject to “deposits or certain eco taxes or fees.” And the company worries that growing concern about “the potential health problems associated with obesity and inactive lifestyles represents a significant challenge to our industry.”

PepsiCo also acknowledges the problem of water scarcity in its Form 10-K. But the company doesn’t cite the potential regulation of plastic bottles as a concern. And the word “obesity”does not appear anywhere in its annual filing.

What’s going on here? It’s possible that Coca-Cola is more aware of social and environmental risks than is its arch rival. More likely, the Coke and Pepsi lawyers don’t agree on what constitutes a “material” risk to their business, and thus has to be reported.

If nothing else, the different Form 10-Ks are evidence that the quality of sustainability disclosure varies widely – even though public companies are legally obligated to tell the SEC and investors about the social, political and environmental risks they face. [click to continue...]

Perhaps not the Change.org we need

Change.org did all it could to persuade people that it was no ordinary business.

From its dot.org domain name to its declaration that “our business is social good” to its certification as a B Corporation, Change.org positioned itself as a progressive force. It promised to run campaigns for “organizations fighting for the public good and the common values we hold dear—fairness, equality, and justice.” That’s no longer its mission.

And therein lies a story that has stirred up a brouhaha on the left, exposed the company’s business model — which depends more on  selling advertising than promoting change–and cast doubt on the faddish but fuzzy notion of what it means to be a “social enterprise” or a “social entrepreneur.”

You’ve heard of Change.org, right? It’s a popular and fast-growing website for petitions, some of which have packed a wallop. By collecting signatures and media attention, Change.org helped persuade Bank of America to roll back debit card fees, stirred up outrage when a Target worker described how predawn black Friday sales ruined employees’ Thanksgiving and got editors at Seventeen to agree not to use photoshopped models in the magazine. [click to continue...]

Wall Street should heed OccupyWallStreet

Police protect a Wall Street icon in NYC, and SF protestors occupy a Chase bank. Photo by David Shankbone & Stephen Lam/Reuters

Corporate America should be paying attention to #OccupyWallStreet, which at breathtaking speed — less than three weeks —  has sparked protests across America, made the front pages of national newspapers and led to an explosion of creative and effective Web-based content. (Check out We are the 99%.) This unruly, chaotic series of leaderless demonstrations may or may not be the beginnings of a left-wing equivalent of the Tea Party–that is, a grass roots movement with the power to impact the national political conversation — but it’s not going to fade away anytime soon.

To be sure–lots of things now being said by and about these protestors are laughable. Manhattan’s financial district is not Tahrir Square.  Capitalism itself is not the problem. Taxing the richest 1%, even at confiscatory rates, won’t support the other 99%. One unofficial list of “proposed demands”  from the group includes a $20 minimum wage, free college tuition, a trillion dollars for infrastructure, another trillion for ecological restoration and across the board debt forgiveness for all. Whoopee! Like so much of what passes for political debate these days in America, the conversation here is all about benefits, and not at all about costs. Didn’t any of these kids take economics in college?

Nor is these protests “the most important thing in the world,” as Naomi Klein said the other day. Not yet, anyway.

But they are important, and here’s why. These nonviolent actions are built around a couple of fundamental arguments — grievances, really — that business leaders and fans of capitalism (like me) need to take seriously.

First, the American economy isn’t working for tens of millions of people–not just the unemployed, but many more who are living from paycheck to paycheck. People are scared, frustrated, discouraged, angry or all of the above. They no longer believe that working hard and playing by the rules will give them a better life. They’re probably right. Low-skilled workers  in particular are disconnected from the American dream of an ever-improving standard of living.

Second, the rich powerful people who are largely but not entirely responsible for the financial crisis and the global recession – the shorthand for this group is “Wall Street” – have, for the most part, neither apologized for their actions or nor paid a price. They created the mess (yes, with the help of reckless borrowers) but they’re doing fine. Come to think of it,  they’re doing fine because the rest of us bailed them out.

[click to continue...]

Aron Cramer: Business needs to step up

Aron Cramer

Today, I’m pleased to publish the first in a series of guest posts from Aron Cramer, the president and CEO of BSR. BSR (formerly Business for Social Responsibility) works with its 250 member companies to promote a more just and sustainable world, through research, consulting and industry collaborations. Aron, who’s a longtime colleague and friend, has worked all over the world on business issues ranging from labor rights in global supply chains to Internet freedoms in China to the meaning of “sustainable consumption.” Here, looking ahead to BSR’s 2011 conference in San Francisco, he writes about the need for business leaders to step outside the boundaries of their companies to re-energize the sustainability agenda.

Most years, people are reluctant to see summer fade into fall. But the summer of 2011 was a bit of a bummer, bringing hurricanes and earthquakes in the American Northeast; ongoing political stagnation in the United States, Europe, and Japan; and signs that the world’s mature economies are stuck in neutral—and may remain that way for some time. Leaving this summer behind feels like a relief.

It’s up to business to turn things around. That’s why BSR has made redefining leadership as the theme of the BSR Conference 2011.

We view this opportunity as having four dimensions, which we outlined in our most recent annual report. In this series of blog posts, I want to elaborate on each one, beginning with the need for business leaders to invest in the infrastructure required for sustainability. [click to continue...]

Let’s do away with CSR

Maybe it’s time t0 do away with corporate social responsibility (CSR).

Not merely the words and the idea but the infrastructure: CSR departments, CSR reports, CSR conferences and CSR executives.

And, as long as we’re at it, let’s think about ditching the triple bottom line, the pursuit of shared value, corporate citizenship and especially, yuk, the idea that stakeholders deserve a say in how to run a business.

All of these are, at best, distractions and, at worst, ways of thinking about business that create a separation between a company’s core business and its impact on the world. Both ought to be life-enhancing. No more and no less.

I’ve been thinking about CSR and how to talk about it for years.  I wrote my first article on corporate responsibility for FORTUNE in 2003. It ran under an odd headline — Tree Huggers, Soy Lovers and Profits — because my editors knew that  words like corporate social responsibility turn off readers. I grappled with the meaning and terminology of CSR again in my 2004 book, Faith and Fortune, which explored connections between religion, faith, values, spirituality and business. The language of faith and values, I subsequently decided, wasn’t the best one to use when speaking to corporate executives about business and its impact. I’m now inclined to talk about sustainability. For all its vagueness, corporate sustainability is an idea that is both practical–no one wants to kill their company–and radical, because no company  is truly sustainable, at least as defined by the Bruntland Commission as promoting development in a way that “meets the needs of the present without compromising the ability of future generations to meet their needs.”

But the here goes beyond language. I was reminded of that when reading an excellent new book by Carol Sanford called The Responsible Business: Reimagining Sustainability and Success (Jossey-Bass, 2011). No, I don’t love the title or even her terminology. (One chapter is  called, yikes, “Stakeholders as Systemic Collaborators.”) But Carol’s arguments and insights (and the title wasn’t her idea) are spot on. Carol argues that the most successful and profitable businesses, over time, will not be those that “practice CSR” but instead those that rethink their purpose, reorganize themselves to draw upon the creativity and passion of all, and integrate responsible behavior into the way they do everything they do.

As Carol writes:

Responsibility isn’t a set of metrics to be tracked or behaviors to be modified. It is central to both the purpose and prosperity of a business and must be pervasive in its practices.

This may sound obvious but it leads her (and her readers) to new ways of thinking about business. Businesses, she says, should strive not just to minimize the harm they do, but to do good, to become restorative, to “improve and evolve healthy systems.” She explains: [click to continue...]

Toyota: Streamlining nonprofits

Any company can give away money. Most don’t do it very well.

It’s harder, smarter and ultimately more valuable for companies to share their talent and expertise.

That’s what Toyota is doing with a program, announced today at the Clinton Global Initiative in Chicago, aimed at helping schools, hospitals and other nonprofits stretch their dollars further.

Toyota is famous for its lean, worker-friendly approach to manufacturing. Its Toyota Production System isn’t so much about efficiency–although that’s the end result–as it is about respecting workers, letting ideas bubble up from the shop floor and driving continuous improvement, or Kaizen. The Toyota system is “at its core a problem-solving method,” says Jim Wiseman, a group vice president and company spokesman who’s been with Toyota for 22 years.

Toyota will now share its expertise more widely. In a news release, the company says:

The company will be working with up to 20 community organizations across the United States in the first year to help improve performance, beginning with the St. Bernard Project, a New Orleans recovery organization that employs returning war veterans, AmeriCorps members and volunteers to rebuild homes devastated by Hurricane Katrina.

Techniques pioneered on Toyota assembly lines have already helped local non-profits, mostly on an ad hoc basis. [click to continue...]

B the change you want to see

Is shareholder capitalism broken?

Few would argue that it’s working well. Business as usual has us on a path to climate catastrophe. The housing/banking industry collapse threw the world into recession. We’ve seen Fukushima, the BP oil spill, the Massey coal mine deaths. Growing income inequality has become a persistent worry.

The conventional response to all that – indeed, the one that I share – is that smarter (though not more) regulation is needed. But a growing number of business people say the problems go deeper. They say a new kind of corporate legal structure is needed to require companies to operate for the  good of society, not just for their shareholders. These new corporations—they’re called B Corporations—are growing in number, and their structure has been enshrined into law in four states—Vermont, Maryland, New Jersey and Virginia.

Here’s what B Lab, the nonprofit behind B Corp, says on its website:

Our vision is simple yet ambitious: to create a new sector of the economy which uses the power of business to solve social and environmental problems. This sector will be comprised of a new type of corporation – the B Corporation – that meets rigorous and independent standards of social and environmental performance, accountability, and transparency.

And in its annual report:

After the latest round of economic and environmental crises, it’s clear we need systemic solutions to the systemic problem that places the interests of shareholders over the interests of workers, community and the environment.

Interesting, no? A couple of months ago, I heard Jay Coen Gilbert, a founder of B Lab along with Bart Houlahan and Andrew Kassoy,  talk about B Corp (it stands for Benefit Corp.) at a GreenBiz conference; afterwards, we caught up by phone to talk some more. [click to continue...]