Sustainability advocates who deserve thanks

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I ran into Hunter Lovins last week at a meeting of business leaders at the UN. She’s wearing a black hat but she’s one of the good people. Author, activist, sustainability consultant, force of nature — Hunter always has plenty to say, and she says it bluntly and passionate.

At the UN gathering of executives from companies that are part of the UN Global Compact LEAD group, Hunter got into a friendly debate with Joel Bakan, a law professor and corporate critic, whose 2004 documentary, The Corporation, likened corporations to psychopaths.

Hunter argued that business, not government, is more likely to lead us to a sustainable future. Joel took the opposite view. I wrote about the debate here, in a story for Guardian Sustainable Business.

“We’re in a horse race with catastrophe,” Hunter told me afterwards. “Can corporations move fast enough? Government cannot. It will not. Corporations might. Will they? I don’t know. On that turns the future of the world.”

Not a bad summary of where things stand today. Hunter’s not just a good talker but a do-er, working with a variety of companies — her future and past clients include Walmart, Unilever, Patagonia, Clif Bar, Interface –to help them become not just sustainable but, ideally, regenerative.

With Thanksgiving approaching, this is a good time to thank people like Hunter–those who, as insiders or advisers, are working in the trenches of corporate America, trying to persuade their companies to become part of the solution to big social and environmental problems.

It can be a tough slog, but it’s important work. That’s while this fall in Guardian Sustainable Business, we’ve been running a series of brief q-and-a’s that showcase sustainability executives. Some are with people who I know well, and others I hardly know at all. But I persuaded my colleagues to run the series because they don’t get enough credit for the work they do.

Here are some of the people I’ve talked to, in no particular order:

Tim Mohin of AMD, about an electronics industry coalition that is seeking to improve factory conditions in the developing world.

Frank O’Brien-Bernini of Owens-Corning, about the need to be rigorous when dealing with environmental issues.

Kathrin Winkler of EMC, about electronic waste.

Rhonda Clark of UPS, about carbon emissions reductions.

Adam Mott of North Face, on the responsible cycling of down.

Vince Digneo of Adobe, about green teams.

Paulette Frank of Johnson & Johnson, about recycling.

Amy Hargroves of Sprint, about the importance of standards.

Marcus Chung of The Children’s Place, about the need to go beyond factory auditing.

If you’d like to nominate someone (or yourself) for this series, let me know. Meantime, thanks to all for participating–and for all the good work you do.

More than a bean counter: Starbucks’ Howard Schultz

Starbucks chairman Howard Schultz said the company's 'open-carry' policy had been hijackedHere in the US, who are the big, bold corporate leaders when it comes to corporate responsibility? It’s not a long list. CVS’s decision to stop selling tobacco was a big deal, but I’ll bet you don’t know the name of the company’s CEO.* I’m a big fan of David Crane of NRG Energy, who has been outspoken on the climate issue, but NRG burns a lot of coal. GE’s Jeff Immelt, who talk a lot about energy and climate in the late 2000s, has quieted down, and he now backs the Keystone XL pipeline. Most interestingly, perhaps, Tim Cook of Apple has been speaking out about climate change and gay rights, and the company is doing good work on renewable energy and labor rights in its supply chain. But there aren’t a lot of CEOs in corporate America who are using their influence on behalf of the common good.

Then there’s Howard Schultz. One of corporate America’s longest-running CEOs — he has led Starbucks as either its CEO or chairman since 1987 — Schultz built not only a global economic powerhouse (Sbux has more than 20,000 stores in 65 countries) but also a company that stands for something. This week, the company sponsored The Concert for Valor, a moving tribute to American’s veterans on the National Mall.

I’ve paid close attention to Starbucks since the early 2000s, when I devoted a chapter to the company in my 2004 book, Faith and FortuneThis week, Guardian Sustainable Business launched a new “hub” on leadership, so it seemed like a good time to write about Schultz, and why he matters.

Here’s how my story begins:

“Why are there aren’t more Paul Polmans?”

Joel Makower, the writer and founder of GreenBiz Group, put that question to Unilever CEO Paul Polman at last week’s Net Impact conference in Minneapolis, Minnesota.

“There are 5,000 in the audience here,” Polman replied deftly, playing to a crowd of students and young professionals, who aim to use their business skills to change the world for the better.

It’s a good question, though. Why, indeed, aren’t there more CEOs willing to put society’s social and environmental needs at the core of their business, particularly here in the US?

Yvon Chouinard, the rock climber and environmentalist who started Patagonia, is one example, but he no longer runs his company – and in any event, it’s privately-held, which allowed him more room to maneuver.

A slew of business executives founded or led smaller, crunchy-granola firms with impressive environmental records – including George Siemon of Organic Valley, Jeffrey Hollender of Seventh Generation, Gary Hirshberg of Stonyfield Yogurt, and Drew and Myra Goodman of Earthbound Farms – but their influence is, or was, limited. It’s no wonder Polman sometimes seems to tower over the crowd of global CEOS.

Then there’s Howard Schultz, the CEO of Starbucks.

Schultz in the news this week, which is why his named occurred to me when I thought about Joel’s question. But for the past two decades, he has built a company that revolutionised the fast-food industry: providing ownership and healthcare coverage to its workers, investing in the environmental practices and wellbeing of coffee growers, supporting marriage equality, promoting job-creation during the last recession and, now, honouring America’s veterans.

You can read the rest here.

Feel free in the comments to name other leaders in corporate America who are using their power to help solve social and environmental problems.

*It’s Larry Merlo.

Aluminum, and the circular economy

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Aluminum is an amazing material, as I’ve written before (here and here). It’s infinitely recyclable, lightweight and strong.

Ford is making more of America’s best-selling vehicle, the F-150 pickup, out of aluminum. Other automakers, too, are designing more aluminum into their cars.

The typical aluminum beverage can in North America is made of about 68 percent recycled content and, according to the industry, a can that’s recycled becomes a new can in less than 60 days. Some craft brewers are turning to cans.

Nevertheless, somewhere between $1 billion and $2 billion worth of aluminum cans are thrown away and wind up in landfalls in the US, I’m told. Only because we are such a rich country can we afford to waste so much. But why should we?

One company that is aiming to drive aluminum recycling is Atlanta-based Novelis. Novelis is the industry leader when it comes to recycling–the company, unlike its competitors, owns no mines–and it talks a lot about the idea of a circular economy. Last week, I wrote a story for Guardian Sustainable Business about the company and its new product, the evercan, which is made of 90 percent recycled aluminum.

The evercan is, by all accounts, an environmentally superior product to conventional aluminum beverage cans, and arguably a better single-serve beverage package that PET bottles–but so far, no major beverage company has adopted it. My story asks why.

The story is getting some pushback, in the comments as well as privately from readers I respect. They say that no company has the right expect other companies or consumers to buy a “greener” product. Of course, that’s correct. My point is that Coca-Cola, PepsiCo, Anheuser Busch and Miller Coors all say they want to promote recycling, but none has yet committed to the most recycled beverage container on the market.

Criticism came, as well, because I was hired earlier this month by Novelis to moderate a panel on the circular economy, at the opening of the company’s new aluminum recycling plant in Nachterstedt, Germany. This was disclosed in the Guardian. I knew there was a risk in writing about Novelis under those circumstances but I felt the story was still worth doing. [For a much longer explanation of how I manage conflicts or potential conflicts of interest, see this. The short version: I’m transparent about my paid moderating and speaking work.]

While in Germany, I spent a good deal of time with Novelis and its head of sustainability, John Gardner, and I came away impressed. I’m sure this influenced my approach to the story. But I’m not alone in believing that the company is a sustainability leader. Its include such respected environmental thinkers as Jonathan Porritt of Forum for the Future, Matt Arnold of JPMorgan Chase and author-academic Stu Hart.

What I learned while reporting the story is that inventing and manufacturing a greener product isn’t enough to drive change. Other business issues–in this case, what appears to be the understandable reluctance of the big beverage companies to depend on a single supplier–can stand in the way. Changing systems is hard.

In any event, you can judge the story for yourself. Here is how it begins:

Imagine an infinitely recyclable product that performs as well as the alternative, costs less to make, and is unquestionably better for the environment. You would bet on its success, wouldn’t you?

Novelis, the world’s largest recycler of aluminum, has made that bet. Since 2012 the Atlanta, Georgia-based company has invested half a billion dollars in recycling by building, among other things, the world’s biggest aluminum recycling plant. This $260m high-tech marvel officially opened earlier this month in Nachterstedt, Germany.

Novelis uses the facility to produce materials for its “evercan”, a beverage container made of 90% recycled aluminum.

As an infinitely recyclable metal, aluminum is a poster child for shifting from a linear take-make-waste model of industrial production to a circular model in which everything, at the end of its useful life, is made into something else.

On its website Novelis endorses the circular economy, stating that it is moving its “whole business model” toward a closed loop. “We are embracing an entirely new way of thinking and operating, in order to radically transform our company – and, in the process, lead the way in our industry.”

But Novelis is having trouble finding followers. None of the world’s major beverage companies have adopted the evercan. So far, the product has just one customer: Red Hare Brewing Co., a small craft brewer based in Marietta, Georgia.

You can read the rest here.

Duck duck goose: How to stop their abuse

e38443ba-d070-4e4b-a7ed-f94ecfbcfc00-460x276I’ve worn down jackets over the years, but never given much thought to where the down came from, or how it was harvested, if that’s the right word. Down, it turns out, is a byproduct of the meat industry. Feathers from ducks and geese that are raised for meat, mostly in eastern Europe and China, are collected, cleaned and processed into down, which is then supplied to the factories that manufacture garments that are insulated with down.

Unfortunately, some of those ducks and geese are treated cruelly, practices that have been documented by animal-welfare groups such as Four Paws, PETA and the Humane Society of the United States. Some of the waterfowl are “live plucked,” meaning their feathers are pulled out when they are still alive, which is said to be very painful. Others are force-fed in order to produce foie gras.

The abuse is unnecessary. The alternative is simply to collect the feathers after the ducks or geese are killed in slaughterhouses–assuring, in the meantime, that they were not force-fed or live-plucked beforehand.

Under pressure from the animal-welfare groups, Patagonia and The North Face over the past few years have independently developed standards for responsible down production. Both companies deserve credit for doing so, but Patagonia’s standard is stronger and more comprehensive–and the people at Patagonia worry that the more lenient standard written by North Face will become the industry norm.

I took a look at the issue in a story for Guardian Sustainable Business. Here’s the lowdown on down:

For decades, The North Face and Patagonia have competed in the marketplace for outerwear, backpacks and pullovers. Now they’re engaged in a smackdown over down – specifically over which company has put forward the strongest standards to protect ducks and geese, whose feathers are made into down insulation, from cruel practices on farms and in slaughterhouses.

This month, The North Face announced that it would begin selling down next year that complies with its Responsible Down Standard (RDS), which it describes as “the broadest and most comprehensive approach to animal welfare available in the down supply chain”. Patagonia says that’s simply not so, and that its own Traceable Down Standard provides “the highest assurance of animal welfare in the apparel industry”.

Four Paws, an independent animal-welfare group that advocates for the ethical treatment of, agrees that Patagonia’s standard is superior. While The North Face standard is “a step in the right direction”, Patagonia has “a lower tolerance for a set of things that we think are important for animal welfare”, says Nina Jamal, an international farm animal campaigner for Four Paws, which is based in Vienna.

The fact that these two longtime rivals are competing over corporate responsibility should come as no surprise. Patagonia’s founder, Yvon Chouinard, a celebrated rock climber, fly fisherman, environmentalist and author, has made his company a sustainability pioneer. And after Doug Tompkins, The North Face’s founder, left the company decades ago, he went on to acquire vast amounts of wilderness for conservation in Chile and Argentina and publish a book assailing factory farms. In 1968, Chouinard and Tompkins, who were then pals, took a celebrated road trip to Patagonia.

The issue of competing standards isn’t limited to the down industry, of course. There are competing standards for forest products, Fair Trade, green buildings and sustainable tourism, just to pick a few examples. Ordinarily, competitive markets product benefits for consumers, but they may not be the case in the “market” for standards, where the risk is that a proliferation of labels will confuse consumers and permit companies to shop around for the weakest standard.

I don’t think that’s a concern here, though, because people at The North Face and at the Textile Exchange, a nonprofit that is making The North Face’s Responsible Down Standard widely available, tell me they plan to strengthen their standard. Let’s hope they deliver on that promise–there’s no need for waterfowl to suffer in order to keep people warm.

PR firm Edelman has more than a PR problem

640px-Edelman_Logo_ColorI’m an admirer of Edelman, one of the world’s biggest and most respected PR firms, and I’m friendly with a number of people who work there. The firm has been ahead of the curve on corporate-responsibility issues, managing effective campaigns for the likes of GE and Walmart. Richard Edelman, who runs the place,  approached me about coming to work for Edelman after I was laid off from Fortune at the end of 2008 and, while I had some great conversations with their senior execs in New York, I ultimately decided to stick with journalism.  (Disclosure: I did a very limited amount of consulting work with Edelman in 2009. It didn’t suit me well.)

Part of the problem with big PR firms — the same goes for big law firms and accounting firms — is that, for the most part, they need to take whatever work comes in the door if they want to keep their door open and keep their people employed. (Edelman, which is privately held, has more than 5,000 employees in 65 offices around the world. This need to grow is even more intense at the publicly-owned PR shops.) Some of the work that comes in will be unseemly. Lately, this has become a problem for Edelman, and for its reputation–as I wrote today for Guardian Sustainable Business.

Here’s how my story begins:

A 1930s union song, popularized by the late great Pete Seeger, asks pointedly: “Which side are you on, boys? Which side are you on?”

On the issue of climate change, that question now confronts Edelman, one of the world’s largest and most admired public relations companies.

In the wake of a survey of the top 25 global PR firms by the Guardian and the Climate Investigations Center, released 4 August, [Edelman said:]

Edelman fully recognizes the reality of, and science behind, climate change, and believes it represents one of the most important global challenges facing society, business and government today. To be clear, we do not accept client assignments that aim to deny climate change.

Beyond that, for nearly a decade, Edelman has built a reputation as the go-to PR firm for corporate sustainability by managing campaigns for the likes of GE (“Ecomagination”), Walmart and Unilever. Richard Edelman, the firm’s high-profile president and CEO, blogs about having dinner at the home of Jeffrey Sachs, his Harvard classmate and a noted climate hawk, and quotes Sachs as saying that “the world is on a very dangerous path.”

And yet.

The Edelman firm works for the American Petroleum Institute, the Washington-based trade association for the oil and gas industry, which opposed the 2009 Waxman-Markey climate change bill favored by some energy companies and utilities, supports the Keystone XL pipeline and exploration of the Canadian tar sands and says, in limp language on its website, that burning fossil fuels “may be helping to warm our planet.”

Until recently, Edelman worked for the Alliance for Northwest Jobs and Exports, a coalition of coal, mining and railroad interests that promotes coal-export terminals in the Pacific Northwest that are strongly opposed by environmental groups. Another Edelman client is said to be ALEC, a conservative lobbying group that opposes regulations on carbon pollution. GE, Walmart and Unilever are among about 70 companies that have reportedly cut their ties with ALEC, although not over the climate issue.

So … which side are you on, boys?

Elsewhere in the press, including in The Times the other day, this has been covered as a PR “faux pas” for the big PR firm. That’s accurate: Edelman bungled its initial reply to the Guardian survey, after which Richard Edelman made matters worse by calling a reporter and saying that a senior exec at the company had been fired as a result. Embarrassing? Sure, but we all make mistakes.

The harder and more important challenge for Edelman and others will be to navigate the climate controversy going forward. The firm cannot be seen as a “thought leader” (ugh, hate that phrase) on corporate sustainability and work on behalf of coal exports or the American Petroleum Institute, which has opposed regulation of greenhouse gases.

Will Edelman have to give up its fossil fuel clients, in a Bill McKibben-style divestment? I think not. Just about all of us depend on fossil fuels to get us around and heat our homes, so we’re not about to give up fossil fuels. But I do think that Edelman (and others) may  have to make distinctions between those fossil-fuel companies that are willing to be part of a constructive solution to the climate crisis–Shell, say, or BP in its better days–and those companies or trade associations that want only to obstruct. That’s not an easy distinction to make, but so it goes.

I had a couple of interesting reactions today to my Guardian story, both on background. This came in via email from a former Edelman employee:

I’ve personally struggled with this a lot….I worked really hard on sustainability for Walmart, GE and others while at Edelman and truly believed in our work. At the time the support was top-down from people like Richard Edelman and Leslie Dach, but once Leslie left, the DC office took on API and dove into the “energy” space. I’ve been very uncomfortable with the DC office’s transformation and am personally glad to see their hypocrisy being exposed. You can’t work both sides of the issue.

Actually, many PR firms, law firms and accountants do work both sides of the issue, on the grounds that everyone is entitled to a flack/lawyer/accountant. The trouble with that is their companies then don’t stand for anything beyond providing service to whoever pays the bills.

I asked an Edelman friend/colleague for a reaction, and got this reply:

 I am glad to work at one of a very few large PR companies who have exclusions that include climate change denial in addition to the “usual” easy targets of tobacco and guns. But the tough part comes in when it deals with how we implement that exclusion. And that is the positive from all of this – we are now having a really robust and tough internal discussion on this.

 I actually do think that Edelman is one of the few large agencies or service companies where we can develop a true leadership position on this. It is very much a values driven company and if we can’t get it right here then I don’t have much hope for public companies.

What an interesting test of a company’s values.

General Mills, Walmart, Target and compassion

compassion-wordThe other day, I went to a daylong meditation retreat about lovingkindness. One of the themes: how to find ways to bring an attitude of loving kindness not just to friends, but to strangers and even to the most difficult people in our lives. My rabbi, Fred Dobb, with whom I ordinarily spend my Saturdays, touches on a similar theme when he talks about widening our circles of compassion, to go beyond family and friends; the edict to  love thy neighbor extends not just to the folks next door but to the needy around the world. I don’t mean to go all Biblical on you here but it is written in Exodus 23:9: “And a stranger shalt thou not oppress; for ye know the heart of a stranger, seeing ye were strangers in the land of Egypt.”

What does this have to do with corporate responsibility, and sustainability, the topics of this blog? A lot, actually, as I realized when a pair of stories that I wrote for Guardian Sustainable Business were published in quick succession this week. Both stories are about big, publicly-traded companies that seek to enhance shareholder value with considerable vigor. But both, at heart, are also about the idea that good companies increasingly take an expansive, as opposed to a constricted view, of their place in the world, and their obligations to the world.

Yesterday, I wrote a story about General Mills’ new climate policy. Here’s how it begins:

Two months after Oxfam launched a campaign urging food and beverage companies to take stronger action to curb climate change, General Mills has promised to reduce greenhouse gas emissions in its agricultural supply chain and to advocate for government climate policy.

General Mills on Monday detailed its new policy on its website, saying: “The imperative is clear: Business, together with governments, NGOs and individuals, needs to act to reduce the human impact on climate change.”

In a news release, Oxfam praised General Mills as “the first major food and beverage company to promise to implement long-term science-based targets to cut emissions from across all of its operations and supply chains that are responsive to the goal of keeping global temperature rise below 2C.

“It’s a major leap,” said Heather Coleman, climate change manager for Oxfam America.

What’s noteworthy about the General Mills’ policy is that it dig deep into the company’s agriculture supply chain, where its environmental impact is greatest, and that it commits the company to be more politically active on climate issues. Put another way, this big food company is taking responsibility for trying to reduce the environmental impact of oats that go into Cheerios. You can read more here.

Today, the Guardian published my story about an unusual collaboration between Walmart and Target that aims to insure that beauty and personal care products are produced more sustainably. Here’s how that story begins:

In an unlikely partnership, rivals Walmart and Target have joined together, working with suppliers “to improve sustainability performance in the personal care and beauty industry”.

Their first event, the day-long Beauty and Personal Care Products Sustainability Summit, will be held on 4 September in Chicago. It’s being organized by Forum for the Future, a UK-based NGO with an outpost in New York.

Up until now, Walmart, the largest US retailer, and Target, the fourth-ranked retailer (according to the National Retail Federation), have taken divergent paths on sustainability. Why are the two companies now joining forces around the sustainability of soap, toothpaste, hair care products, shaving cream and cosmetics?

The story goes on to say:

It may be – and this definitely falls in the category of informed speculation – that Walmart and Target have come to realize that they are not as powerful as they want to be when dealing with big consumer brands and their suppliers in the chemical and fragrance industries.

The secrecy around ingredients in beauty and personal care products, along with the complexity of chemical formulations, creates information asymmetries. The brands and their suppliers know a lot more about product formulations than the buyers at Walmart and Target. They often tell critics that there’s no readily available substitute for a “chemical of concern.” And they are unwilling to share information about whether they are researching or developing safer chemicals.

An industry insider told me: “There’s so much that’s hidden in these supply chains that even Target and Walmart don’t know what goes into everything on their shelves.”

The point is, Walmart and Target are digging deeper than ever before into their supply chains, seeking to understand the chemicals that go into cosmetics or hair care products, or the impact of packaging.

You can see these shifts across the field of corporate responsibility. Look at the apparel and electronics industries which, over time, have agreed, at least in theory,accept responsibility for the working conditions and environmental practices deep in their supply chains, in places like China and Bangladesh.

Are companies becoming more compassionate? I don’t think so, at least not in the since that people can seek to become more caring. But are they recognizing that the long-term health of their business depends upon their reputations as corporate citizens, not to mention the health of the planet or the safety of the products they sell? Yes, they are. It’s a very slow and imperfect process, but it’s real.

Tax avoidance, and corporate responsibility

uncle-sam-pay-your-taxes1Would you consider Apple, Coca-Cola, General Electric, Google, Microsoft, Nike and PepsiCo good corporate citizens? Certainly they position themselves that way, and they deserve credit for their leadership around human rights (Apple, Nike), climate change (GE), water (Coca-Cola), renewable energy (Google, Microsoft) and sustainable agriculture (PepsiCo).

But when it comes to paying corporate income taxes, they have some explaining to do.

That, at least, is the conclusion that I came to after reading an excellent report on tax avoidance titled Offshore Shell Games, and published last month by Citizens for Tax Justice and US PIRG.

Corporate taxation is all over the news these days as US firms move their headquarters overseas for tax reasons, in a process known as inversion. But aggressive maneuvering to avoid taxes is nothing new, as I wrote today in a story for Guardian Sustainable Business.

Here’s how the story begins:

America’s a great country. That’s why people from all over the world — including, lately and tragically, thousands of poor children from Central America — clamor to get in. So why are some of America’s wealthiest companies trying to get out?

It’s simple, really — they don’t want to pay US taxes.

You’ve probably heard about Walgreen’s, your neighborhood pharmacy that is contemplating moving its headquarters to Switzerland to reduce its tax bill. Medtronic, the big medical device company based in Minneapolis, Minnesota, has plans to move to Ireland, for tax-avoidance purposes. Then there’s Mylan, a maker of generic drugs based near Pittsburgh, Pennsylavia, which intends to incorporate in the Netherlands, where the tax rate is lower. Mylan’s CEO, as it happens, is Heather Bresch — the daughter of US Senator Joe Manchin, a West Virginia Democrat — and she says she has no choice but to go.

Other companies aren’t going so far as to relocate their headquarters, a process known as inversion that often requires them to acquire a company based elsewhere. Instead, to avoid US taxes, they are parking their earnings offshore, often in tax havens like Bermuda and the Cayman Islands that levy no corporate income taxes. That tactic, which like the inversions is legal, is being employed by companies that position themselves as good corporate citizens — among them Apple, Coca-Cola, General Electric, Google, Microsoft, Nike and PepsiCo.

Exploiting loopholes in the tax laws may or may not be legal–the IRS is hopelessly outgunned by big corporate tax departments–but it’s unethical.

The report from Citizens for Tax Justice and US PIRG, which makes for surprisingly compelling reading, details a number of questionable tax avoidance strategies that allow companies to shift earnings, purely for tax purposes, from high-tax jurisdictions like the US to tax havens. Here are my favorite fun facts from the report:

The report found that subsidiaries of US companies reported earning $94bn in Bermuda, which has a gross domestic product of just $6bn. That doesn’t compute. US firms reported earning another $51bn in the Cayman Islands, where GDP is about $3bn.

This is outrageous, and please don’t tell me that the way to fix the problem is to reduce the admittedly high US corporate income tax rate. The US cannot compete with places where the tax rate is zero.

All of these companies, of course, benefit enormously from government services–public education, police, the rule of law, highways, etc. Those companies that don’t pay their fair share shift the burden to others–small businesses that can’t afford high-priced accountants, companies that don’t have overseas operations and therefore can’t take advantage of the opportunity engage in tax-avoiding shenanigans and, of course, the rest of us.

You can read the rest of my story here.

Fair Trade USA, growing and still controversial

fairtrade_6833958232_076a8a019b_bFair Trade is an elegant idea. It’s an attempt to make globalization work for the world’s poor. Those of us in rich countries agree to pay a bit more for whatever it is we are buying — coffee is by far the No. 1 Fair Trade commodity — and, in exchange, we are assured that the farmers and workers at the other end of the supply chain are treated fairly.

If only it were that simple.

Today, in the US, there are no fewer than seven Fair Trade and Fair Trade-like labels. You can find an analysis of them here, if you so choose. The trouble is, they are competing in what remains by any measure a niche market.

Paul Rice, the founder of Fair Trade USA, formerly Transfair, wants to change that. I went to see him last week in Oakland, CA., and wrote about his efforts the other day in a story for Guardian Sustainable Business.

Here’s how my story begins:

Paul Rice, the hard-charging CEO of nonprofit Fair Trade USA, recently toured the Brooklyn headquarters of furniture company West Elm, along with former president Bill Clinton and West Elm’s president, Jim Brett. They were there to celebrate West Elm’s commitment to handcraft products, including the first Fairtrade rugs, which are made in India. “You can have a huge impact on the wage structure in India,” Clinton enthused. “Consumers will buy these. They’re beautiful, besides.”

Fairtrade rugs? What’s next? A lot more than coffee in church basements, it turns out. “We’re talking about furniture, we’re talking about linens, we’re talking about all kinds of things,” says Rice, when we met last week at Fair Trade USA’s offices in Oakland, California. “This move into the manufacturing sector puts us on the threshold of something really big.”

Fair Trade USA is in fast-growth mode. This fall, Patagonia and PACTwill begin selling Fairtrade apparel, made in factories that they say will meet strict environmental and social standards; a small company called Oliberté already sells Fairtrade shoes. Several years ago, Fair Trade USA formed a partnership with a nonprofit startup called Good World Solutions, which has developed mobile technology to connect big companies to the farmers and workers in their supply chains. Meantime, Fair Trade USA is working to certify a bell pepper farm in British Columbia, Canada, expanding the movement beyond its roots in the global south.

This flurry of activity has brought Rice lots of attention, some of it unwelcome. His supporters say that he works tirelessly to expand the impact of fair trade. Critics accuse him of abandoning its principles. As Jonathan Rosenthal, a co-founder of the co-op Equal Exchange, told The Nation: “Paul is not afraid to think and act on a big scale. That’s one of his great gifts. And he’s willing to cut any corners to get there. That, to me, is one of his great faults.”

The disagreements about what constitutes authentic Fair Trade can get pretty arcane pretty quickly. Some people, for example, argue that a chocolate bar should not be labeled Fair Trade unless the chocolate and the sugar were both procured from worker owned co-ops; others say the chocolate alone should do it. Small differences often matter, but in this arena, it seems to me that the priority ought to be growing the idea and practice of Fair Trade, even if compromises must be made along the way. As the movement grows, the bar can be lifted.

If you want to know more, see my 2012 blogpost, A schism over Fair Trade. You can read the rest of my Guardian story here.

The upside of outsourcing

To match Insight INDIA-OUTSOURCING/I heard an excellent, in-depth interview this week with William Easterly, the development economist and author of a new book called The Tyranny of Experts: Economists, Dictators and the Forgotten Rights of the Poor. Easterly, a controversial figure, is critical of top-down development experts — he names Jeffrey Sachs and Bill Gates, among others — who push technocratic, centralized approaches to alleviating poverty. Instead, he argues that the best way to promote economic development is for westerners to push for democracy, human rights and free markets in the world’s poorest countries.

Easterly cites, among others, the Nobel laureate Amartya Sen, who has said: “No famine has ever taken place in the history of the world in a functioning democracy.” Others disagree, noting that parts of India came perilously close to famine just a decade ago. What’s more, China has lifted hundreds of millions of people out of poverty while suppressing human rights, but allowing economic freedom.

I’m in no position to try to adjudicate the debate about how poor countries become rich, but I was thinking about Easterly’s faith in markets and global trade as I wrote my story this week for Guardian Sustainable Business. The story looks at an idea called “socially-responsible outsourcing” or simple “impact sourcing,” and a nonprofit called DDD that tries to put that idea into practice. (DDD stands for Digital Divide Data.) DDD operates businesses in Cambodia, Kenya and Laos that employ young people, typically high school age, to provide information technology and web research, mostly to clients in the US. The goal of the enterprise is to provide economic opportunity to the poor, DDD’s founders told me.

Here’s how my story begins:

So much attention is paid to deplorable factory conditions in poor countries that it’s easy to forget that global supply chains for electronics, apparel and toys have helped lift masses of people out of poverty. Since 1980, 680 million people have risen out of poverty in China which has seen its extreme-poverty rate fall from 84% to about 10%, largely because of trade, reports The Economist.

Now, a small number of companies, nonprofits and foundations want to see if the rapidly growing global supply chains that process data and operate call centers — an industry usually described as business processing outsourcing, or BPO — can be deployed to help alleviate poverty in Africa and South Asia. Can outsourcing, a business driven by the search for cheap labor, reconfigure itself to do good?

“By responsibly and ethically employing hundreds of thousands of people, BPOs have a role to play in shifting the social landscape in emerging economies around the world,” says a report called Outsourcing for Social Good from Telus International, a Canadian outsourcing firm, and Impakt, a social responsibility consultancy.

Others agree. The Rockefeller Foundation has committed $100m to a project called Digital Jobs Africa that aims to improve one million lives in six African nations. A nonprofit called Samasource organizes poor women and youth in Africa and Asia to deliver data services to such businesses as Microsoft and Google. And a company called Cloud Factory that operates in Kenya and Nepal says digital outsourcing can “flatten the world, connect people into the global economy and raise up leaders to fight poverty and change their communities.”

The pioneer of what is called socially-responsible outsourcing or simply impact sourcing is DDD (Digital Divide Data), a New York-based nonprofit that operates for-profit data centers in Cambodia, Laos and Kenya. DDD and its impact-oriented peers set themselves apart from outsourcing giants such as Tata, Accenture and Infosys because, they says, they deliberately seeks out workers in the some of the world’s poorest places and provides them not just with jobs, but with the education, training and career counseling they need to rise into the middle class.

“Our ultimate mission is to alleviate poverty,” says Jeremy Hockenstein, 42, the founder and CEO of DDD. “We focus on students who are finishing high school, who are very motivated and very smart and who come from low-income homes.”

Having met Jeremy Hockenstein (via Skype) and his co-founder Michael Chertok (face to face), I have no doubt of their good intentions. Both gave up more lucrative careers to start the nonprofit. DDD is about helping its global employees, not exploiting them.

But their work raises an intriguing question about how much intentions matter when it comes to infotech outsourcing, or all of global trade, for that matter. Despite all the the abuses in the global manufacturing supply chain, it seems inarguable that the factory jobs created in China, Mexico, India and Bangladesh have benefited the poor in those countries. Is it possible the Walmart and Apple have done more to alleviate poverty than Bill Gates and Jeffrey Sachs?

You can read the rest of my story here.

Feeding the hungry at Panera Bread

Not by coincidence, I’m blogging today from a Panera Bread cafe near my home in Bethesda, MD. The atmosphere is pleasant, the people are friendly, the wi-fi is reliable and the food is pretty good. (I have a weak spot for the shortbread cookies.) But, as I learned recently, there’s more to this company than meets the eye of a casual visitor.

I wrote a story about Panera Bread this week for Guardian Sustainable Business. The peg was the release of the company’s comprehensive food policy, which is worthwhile — the company is going to try to get rid of all artificial flavorings and colorings in its food by 2016  — but unremarkable in a world where fast-casual competitors like Chipotle and SweetGreen market “food with integrity” or “authentic food.”

What stands out about Panera is its commitment to doing something about hunger in America. Its CEO, Ron Shaich, has spoken eloquently about the problem. Panera has long donated leftover food to homeless shelters and food pantries. Most interestingly, though, Panera through its foundation has opened five “community cafes” where people pay whatever they want. The “community cafes” suggest donations, but there are no fixed prices. The hope is that those with means will pay enough so that those who are poor can eat there, too, and enjoy the full Panera experience–the food, service, atmosphere, maybe even the wi-fi. The concept is working fairly well, although Shaich told me that the cafes still require modest subsidies from the foundation.

Here’s how my story begins:

When you hear the word company, what comes to mind? You might think about business, or perhaps the military (a company of soldiers), the arts (a touring company) or the evening ahead (are you expecting company?). The word company evolved from the Old Frenchcompaignon, literally “one who breaks bread with another”, and before that from the Latin panis, for “bread”. A company, in the broadest sense of the word, is a group of people who join together to do something no one can do alone.

Which is a fitting introduction to the fast-casual restaurant chain Panera Bread – yes, the name comes from that same word panis, Latin for bread – and its founder and CEO, Ron Shaich. An idealist, Shaich pondered a career in politics before opening a tiny cookie shop in Boston in 1980.

Since then, Shaich has consciously tried to build a company that is about more than the bottom line. Today, the 60-year-old CEO guides a chain of 1,800 restaurants that serves more than eight million customers a week and employs more than 80,000 people. Last year, Panera generated $2.3bn in revenues and nearly $200m in profits.

But, as Shaich told me by phone the other day, Panera’s purpose is not to generate revenues or profits. Its purpose is to serve: to serve good food, and to serve its customers, workers and communities. If it does those things well, he says, business results will follow.

“If we don’t touch people, and we don’t make a difference in their lives in a real way, we don’t have a reason to exist,” Shaich says. Companies need to sustain those around them. “If all we’re about is extracting profits from the community, there’s not going to be a community left from which to extract profits.”

You can read the rest of the story here.