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.

Paul Hawken’s next big idea

98b56975-55f2-45d2-9e39-19578c3bbc70-620x372I’ve learned a lot over the years from Paul Hawken, and when our paths have crossed, I’ve always enjoyed the time we’ve spent together. He was an early supporter of FORTUNE’s Brainstorm Green, and I recall a delightful walk along the beach in Laguna Niguel where he told me about the work he’d been doing with Lee Scott, then the CEO of Walmart. Some years later, I spent an afternoon with him at his offices in Sausalito, talking about the shortcomings of the socially responsible investment industry. He also delivered a great talk about the high costs of cheap food a few years back at the Cooking for Solutions conference at the Monterey Bay Aquarium.

So when I first got wind of Project Drawdown, Paul’s latest project, I was eager to hear more. We talked by phone the other day, and the idea was unveiled last night at the big Greenbuild conference in New Orleans. I wrote about Project Drawdown for Guardian Sustainable Business.

Here’s how my story begins:

Ten years ago, in a landmark article in Science Magazine, Princeton professors Stephen Pacala and Robert Socolow wrote, “Humanity can solve the carbon and climate problem in the first half of this century simply by scaling up what we already know how to do.” They identified a series of so-called climate stabilization wedges – among them efficient cars and buildings, increasing solar, wind and nuclear power, and reducing deforestation – that if adopted would eventually maintain atmospheric concentrations of CO2 at about 500 parts per million (ppm), a level they said “would prevent most damaging climate change.” At the time, atmospheric concentrations stood at about 375 ppm.

A decade later, annual emissions continue to grow and atmospheric concentrations have topped 395 ppm – and they are rising steadily. The situation appears grim.

It is not, argues pioneering environmentalist, entrepreneur and author Paul Hawken. Climate solutions abound, he said, and today, at the opening plenary of the big Greenbuild conference in New Orleans, he will unveil Project Drawdown – a new compendium of climate solutions that are designed not just to stabilize, but to reduce the greenhouse gases in the atmosphere.

“Stabilization at 450, 500, 550 ppm is chaos,” Hawken said. “Our goal should be drawdown.”

Project Drawdown will begin as a lavishly illustrated book and online database, to be released late next year. Its purpose is to re-frame the climate debate, by showing that solving the climate crisis will bring, not sacrifice, but “more security, more prosperity, more jobs, more well-being and better health,” Hawken said.

I’m skeptical of what appears to be easy solutions to the climate crisis because, in my view, if it were easy to become radically more efficient and shift from fossil fuels to renewable energy, well, why haven’t we done it already? But some of the solutions in the book, which is still being researched, are growing fast–distributed solar power, LEDs, utility-scale wind farms. Others are creative. Educating girls in the developing world, which isn’t ordinarily regarded as a climate solution, would, it turns out, be of enormous benefit because girls who get more education have fewer children, and fewer children mean fewer emissions.

You can read the rest of my story here.

Game changer: Walmart’s focus on food and ag

28e0e549-367c-467e-9f67-41c34a470b91-620x372Lately, I’ve come to believe that the food industry is moving to become more sustainable with a seriousness that few other industries, particularly energy, can match.

Since Labor Day, I’ve had the opportunity to listen to top execs from Cargill (Greg Page), DuPont (Ellen Kullman), Monsanto (Hugh Grant and Robb Fraley) and Walmart (Doug McMillon) talk about a variety of initiatives to increase crop yields, better manage nitrogen pollution, reduce food waste, improve living standards for small farmers in emerging markets and confront the obesity crisis. These are real, and they are aimed at producing more affordable, nutritious food, without destroying the planet in the process. All these companies could be moving faster and doing more–in particularly, I’d like to see them become more active in the climate-policy arena–but there’s no doubt in my mind that they recognize that climate change is a growing threat to their businesses, and they want to do what they can to respond.

On Monday, Walmart held one of its quarterly sustainability milestone meetings, this one focused on food and ag. I wrote about it in a story that was posted this morning at Guardian Sustainable Business. Here’s how it begins:

Nearly a decade after setting a series of bold sustainability goals, Walmart has struggled to curb its climate pollution and buy more renewable energy. But the company has already changed the way food is grown around the world – curbing agricultural pollution, pushing healthier choices, supporting local growers and promoting transparency. And the world’s largest retailer (fiscal year 2014 revenues: $473bn) is just getting started.

This week, Walmart showcased food and agriculture during its latest sustainability summit, while saying little about energy and emissions. It’s easy to see why. The company remains a long way from being powered by 100% renewable energy, one of its aspirational goals.

Currently, it gets about 24% of its electricity from clean energy, and its fleet mostly runs on fossil fuels. That’s because wind, solar power and alternative fuels generally cost more than coal, oil and natural gas, and Walmart is all about delivering low prices to customers.

Nor has Walmart been able to reduce its greenhouse gas emissions. While the company has become more efficient, its absolute emissions are rising as Walmart grows its market share to satisfy Wall Street. This year, Walmart plans to open about 115 super centers (surrounded by vast parking lots, in most cases) along with 270 to 300 smaller stores. Tensions between its business model – which depends on selling more stuff to more people everywhere – and its environmental aspirations remain unresolved.

But when it comes to food and agriculture, Walmart has found a sweet spot, a place where its low-cost mantra is nicely aligned with the social and environmental need to deliver safe and affordable food to the world, using less land, less water and fewer chemical inputs to do it.

The story goes on to quote Kathleen McLaughlin, Walmart’s senior vp of sustainability, as saying: “We have very bold aspirations for systemic change. We’re not playing small here. This is a whole company, a whole industry, a whole system effort.” I don’t doubt it.

I met Kathleen last month during Climate Week in New York, and she’s impressive. A former McKinsey consultant, she uprooted her husband and kids from Toronto, where they had lived, to move to Bentonville, Arkansas, mostly because she wants her work to make a difference. She oversees the Walmart Foundation, as well as sustainability programming, so she’s in position to make sure they are supporting one another.

Walmart is in a perfect position to drive change. It has influence over big food brands like Coca-Cola, PepsiCo, Kellogg’s, General Mills, Campbell’s Soup, Unilever, MillerCoors and many more–and, as Doug McMillon noted the other day, they are all ready to act. Environmental Defense Fund, with its Bentonville staffers led by Michelle Harvey, is bringing its scientists and activists to the task, particularly around the important (but not very sexy) issue of nitrogen pollution. Other NGOs are stepping up, too.

What’s more, as I wrote, new farming technologies will help drive efficiency efforts, so the timing is good:

There was talk at the sustainability summit about AdaptN, a web-based tool to manage fertilizer in the corn industry, and Harvest Mark, which traces food from farm to fork. Monsanto, a key partner, last year acquired The Climate Corp, which uses big data to help farmers increase crop yields, manage chemical inputs and increase crop yields.

You can read the rest of my story here.

Should bike sharing be subsidized? Or privatized?

Capital_Bikeshare_station_outside_Eastern_Market_MetroI’m a fan of bike sharing, as regular readers of this blog know (see this and this), and a satisfied, albeit irregular, customer of Capital Bikeshare, the convenient and well-managed public bike-sharing system in Washington, D.C., which now extends into the suburbs of Maryland and Virginia.

There’s a potential cloud over bike sharing, though, and it is this: So far, at least, no big-city bike sharing system of which I am aware is financially self-supporting.

This doesn’t trouble me. Bike sharing is form of mass transit. If you believe, as I do, that subways and buses deserve taxpayer support, bike sharing does, too. It creates a slew of positive externalities, including reduced air pollution and greenhouse gas emissions, reduced traffic congestion, a healthier populace and the mobility that city dwellers without cars need to get to work or school. (You may be wondering, are cars subsidized, too? Perhaps, but not by as much as you would think, some say. But it’s complicated. A few years back in Slate, Dan Gross argued just the opposite, that governments provide massive subsidies to private car owners.)

In any event, we’ve learning from the bike sharing boom that bike sharing is very popular, but that at the current pricing levels — $75 for an annual membership, $15 for a three-day membership in Washington — it can’t pay for itself. New York’s Citibike was touted as a bike sharing system that would pay for itself with user fees and Citi’s marketing dollars, but it is millions of dollars in the red. Emily Badger of The Washington Post’s Wonkblog wrote a good analysis of the economics of the two systems.

A startup bike-sharing company called Zagster offers an alternative: private bike sharing. It provides bike sharing systems to companies, universities (including Yale and Duke), apartment buildings and hotels for their employees, students and guests. Lately, it’s been making headway in Detroit.

I wrote about Zagster this week for Guardian Sustainable Business. Here’s how my story begins:

Of all the big cities in America, Detroit is among the least hospitable to bike sharing. The city is bankrupt. Its residents are poor. And it sprawls over 142 sq miles (367.8 sq km), nearly enough area to fit San Francisco, Boston and New York within its borders. Winters can be harsh, public transit is dismal and it is, after all, the Motor City.

But a nimble little bike-sharing startup called Zagster is making inroads in Motown. Last year, Dan Gilbert, the founder of Quicken Loans who has invested more than $1.3bn in Detroit, turned to Zagster to start a private bike-sharing network for his employees. The local utility company DTE Energy, as well as the United Way of Southern Michigan and several small companies, followed. This week, General Motors announced that Zagster will make its bikes available to 19,000 employees at the 330-acre GM Tech Center in Warren.

What’s more, Bill Ford, the executive chairman of the Ford Motor Co, has invested in Zagster through Fontinalis Partners, a venture capital firm that invests in “next-generation mobility”.

Tim Ericson, the 28-year-old co-founder and CEO of Zagster, told me: “We’re creating what is almost becoming a citywide bike sharing program, with no public funds and no use of public space.”

As you might imagine, I have some reservations about Zagster’s model. The more we privatize goods and services — private schools, private parks in the form of country clubs, Google’s private bus from SF to its campus, and the like — the less political support there will be for public schools, parks and transport.

Then again, I can’t envision bike sharing come to Detroit in any other way.

You can read the rest of my story here.

The end of garbage

p12608In nature, nothing goes to waste. The excrement of one species (forgive me if you are reading over breakfast) becomes food for another.

Why can’t we design the industrial economy to be like nature?

This isn’t a new idea. During the American Revolution, iron pots were melted down to make armaments. I take notes with a pen made out of recycled bottles. The gospel of “natural capitalism” or “cradle to cradle” has been spread by  such pioneering environmental thinkers as Paul Hawken and Bill McDonough.

Lately, though, I’m pleased to report, the idea of eliminating waste is gaining traction among big global companies, which increasingly are talking about — and acting to bring about — what is called the circular economy.

As regular readers of this blog know (see this and this), I’ve long been excited by the idea of a zero-waste world. I wrote a story for FORTUNE called The End of Garbage in 2007. Recently, I revisited the topic for Ensia, a magazine and website about environmental solutions.

Here’s how my story begins:

Don’t let fashion go to waste,” says H&M, the global clothing retailer that booked $20 billion in revenues last year. So I brought a bag of old T-shirts, sweaters and khaki pants to an H&M store in Washington, D.C., where it took them, no questions asked, and gave me a coupon for 15 percent off my next purchase. H&M takes back clothes in all of its 3,100 stores in 53 countries.

Next, I pulled an ancient iPod and an iPhone 4S with a cracked screen from a desk drawer. On the website of a company called Gazelle, I answered a few questions and learned that the company would pay me $37 for the pair. (Without the cracked screen, the iPhone would have been valued at $135.) I printed out a free shipping label, and they were on their way. Not to landfills, but to a new life.

Meanwhile, not far from my home, a garage owned by the Washington Metrorail system is about to undergo a makeover. Existing lighting fixtures will be replaced by LEDs that are expected to reduce energy usage by 68 percent. The LEDs will be manufactured, owned and monitored by Philips, which will take them back when they need to be repaired or replaced.

Welcome to the emerging world of the circular economy.

I go on to write about McKinsey & Co., Philips, Sprint, Best Buy, all of whom are getting serious about circular business models. This is getting real, folks. You can read the rest here.

Is the sharing economy really green?

sharing1So many assumptions underly conventional wisdom about all things green. That biofuels are better for the planet than burning fossil fuels. That bans on plastic bags help the environment. That electric cars reduce CO2 emissions. That eating meat is bad for the climate.

All these things are true, I believe. But what I believe doesn’t matter. The question is, where’s the evidence? On biofuels, plastic bags and electric cars, the environmental impacts depend on where the crops to make biofuels are grown, what replaces plastic bags, the electricity mix that powers the electric car and how the cows that went into your burger were raised.

The point is, the “environment” is an extraordinarily complex system, as is the economy. That’s the underlying message of a story that I wrote last week for the environmental website Ensia headlined Is Sharing Really Green?

Here’s how it begins:

I’m a big fan of the sharing economy. On a recent trip to San Francisco, I stayed in a house I found onAirbnb and made my way around the city using uberX. I’ve written favorably about house sharingcar sharingbike sharingand getting rid of stuff you no longer want via yerdle. At environmental conferences, I’ve listened to evangelists for the sharing economy such as Lisa GanskyRobin Chase and Andy Ruben. Participating in the sharing economy can save money, open people up to new experiences and build a sense of community among strangers.

But I’m not convinced the sharing economy delivers the environmental benefits its proponents claim.

Because the sharing economy enables more efficient use of underutilized assets — a car that might otherwise sit in a driveway, an extra room in a home, an electric drill or even a wedding dress — conventional wisdom holds that the sharing economy is “green.” With a little help from Google, it’s easy to find headlines like “How Web Sharing Sites Can Save the Planet” and “The Sharing Economy for a Sustainable Future.” Graham Hill, the founder of Treehugger and LifeEdited, has said the sharing economy “makes a lot of sense financially and environmentally as well.” In her book, The Mesh: Why the Future of Business Is Sharing, entrepreneur and investor Lisa Gansky writes: “Using sophisticated information systems, the Mesh [her term for the sharing economy] also deploys physical assets more efficiently. That boosts the bottom line, with the added advantage of lowering pressure on natural resources.” In an interview with Treehugger, Roo Rogers, co-author with Rachel Botsman of a book called What’s Mine is Yours: The Rise of Collaborative Consumption, declared: “In my opinion — having been an environmentalist all my life — collaborative consumption has the potential to have the biggest environmental impact that we could ever have hoped for.”

But where’s the evidence? It’s hard to find.

I probably could have written that the evidence is non-existent, but the sharing economy is so new and so hard to measure that it’s no surprise that the case for its “green” benefits remains unproven.

I hasten to add that there are still good reasons to patronize Airbnb or Zipcar or Rent the Runway or the many other sharing sites that seem to be proliferating. There’s little harm done when we make personal choices based on our assumptions about what’s good for the planet.

But when big companies or, worse, governments set policy without questioning their assumptions, the consequences can be negative on a much broader scale. I’m afraid that happens a lot more often than it should.

You can read the rest of my story here.

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.

When NGOs can’t be trusted

DonateNonprofitsLogos304I’ve spent the last couple of weeks reporting a story for the Guardian on NGOs and GMOs–specifically, the ways that some nonprofit groups have stirred up fears about genetically-modified organisms, by taking facts out of context, distorting mainstream science or, occasionally, saying things that simply are not true. I did the story in part because I believe that agricultural biotechnology could be–could be–a valuable tool as we try to feed people in a resource-constrained and warming world. I’m by no means an enthusiastic fan of biotech crops — the rollout of the technology has been managed poorly by the industry–but I’m fairly confident  that they have enormous potential. That potential will never be realized until we can have a rational fact-based debate about how the technology should be managed.

But my hope is that this story will make a bigger and more important point about the non-profit sector: That the claims of NGOs and advocacy groups should be received with the same skepticism and scrutiny that we apply to claims from business and government. That might seem like an obvious point, but my experience tells me that many people tend to take what NGOs say at face value. Public opinion surveys also find that NGOs are trusted, far more than corporations or the government.

On the GMO issue, this is a terrible  shame. But it helps to explain why, as I write

so many people – 48%, according to Gallup – believe that foods produced using genetic engineering pose a serious health hazard, despite assurances from corporations, government regulators and mainstream scientists that the genetically modified organisms (GMOs) now on the market are safe and, indeed, have been studied, tested and regulated more than any other food product in history.

More broadly, though, it’s too easy to forget that NGOs, like companies or the government or, indeed, all of us, are driven by a set of incentives. Again, from the story:

..non-profits and the people who lead them are subject to the same temptations, pressures and incentives that drive companies: They are self-interested. They seek attention in a noisy marketplace. And they rely on the financial support of donors, just as companies depend on customers.

As it happens, some of the groups opposed to the spread of GMOS are backed largely by corporate interests: Just Label It, a dot-org coalition that favors GMO labels is financed by organic and “natural” food companies that benefit from the anxiety around biotech food.

Follow the money, as Woodward & Bernstein used to say. A lot of money behind the anti-GMO movement comes from the organic food industry. Right now, the best way to avoid GMOs at the supermarket is to buy organic.

To take an example from another arena: When I talk to scientists or engineers about climate change, most do not believe we will be able to power the US economy anytime soon entirely with renewable energy. They believe that some form of zero-carbon baseload power will be needed — either nuclear energy or coal plants with carbon capture. (About which there was a bit of encouraging news this week.) In the US, depending entirely on solar and wind, along with the required energy storage and transmission lines, would be enormously expensive. In places like China and India, it’s unthinkable. So it makes sense for the US to find ways to make nuclear power or coal plants with carbon capture a lot cheaper, so we can export those technologies to the developing world. This is true for solar and wind as well, of course.

Yet environmental groups–the Sierra Club and Greenpeace, in particular–are implacably opposed to nuclear power and, as best as I can tell, they oppose coal with carbon capture. Fracking, too. I don’t doubt the sincerity or the intelligence of their leaders, but I have to believe that if they wavered in their opposition to nukes and coal with carbon capture, their customers, i.e., their members and donors, would revolt. So, at the very least, the deep green groups are less than transparent about the tradeoffs that will be required if we give up on nuclear or so-called clean coal, and put all of our investment into wind and solar.

Another example, from the story:

The issue of credibility goes well beyond GMOs, of course. What’s the most effective way to improve the lives of the world’s poorest people? It’s hard to know whether a comprehensive approach (the Millennium Villages), major health initiatives (the Gates Foundation), micro enterprise (Kiva) or disaster relief (Care) will work best. Each NGO understandably touts its own approach. Meanwhile, economists say trade has done more than aid to help the global poor.

A bigger and more important point, which I’ll save for another day, is the question of who is holding NGOs accountable. It’s an important question because, like it or not, as taxpayers we all help finance the nonprofit sector because donations to NGOs are frequently tax-deductible.

None of this is intended to diminish the enormous value delivered by the nonprofit sector. My next Guardian story will be built upon a terrific new report on corporate taxation put together by a couple of NGOs. The NGOs that I know best, those in the environmental sector, including Greenpeace and the Sierra Club, for the most part do great work. My wife and older daughter work for NGOs, and I’m on the board of Net Impact, a nonprofit that I (obviously) believe in strongly.

None of which means you should automatically believe everything you hear from a so-called public interest group. You shouldn’t.

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.

A murmur, not a message

800px-US_Capitol_SouthOne reason why it has been so hard for President Obama and environmentalists to persuade Congress to enact climate-change legislation is strong opposition from much of corporate America. The U.S. Chamber of Commerce, the National Association of Manufacturers and the editorial page of the Wall Street Journal, which is seen as the voice of business, all, when it comes down to it,  oppose a carbon tax or an economy-wide scheme to cap greenhouse gas emissions.

They’ve got some sound reasons for doing so: Climate regulation by the US, if it is not followed by regulation in China and India and the rest of the world, will do little to curb global warming, but it will disadvantage the US economy and cost consumers money by raising energy prices. The thing is, China and India and the rest of the world are unlikely to price carbon unless the US leads the way. And right now it’s “free” for fossil fuel companies and utilities and the rest of us to pollute the air with CO2, and so we do so with impunity.

Thankfully, the chamber, NAM and the Journal don’t speak for all of business. That’s why a business coalition known as BICEP (it stands for Business for Climate and Energy Policy) needs to grow in numbers and in political clout. BICEP favors climate regulation, and its members include such well-known companies as eBay, Gap, Levi Strauss, Mars, Nike and Starbucks. But BICEP, pardon the bad pun, doesn’t carry much weight in your nation’s capital, and it’s fairly easy to understand why.

For the US fossil fuel industry, most of which opposes carbon regulation, the climate issue is a matter of the utmost importance. Environmentalists  who worry about the climate crisis increasingly argue that much of the world’s reserves of coal and oil must be left in the ground, unless and until  engineers come up with practical and cost-effective way to capture CO2 from power plants or from the air.  If that argument that we need to burn dramatically less coal and oil prevails, the stock-market value of the fossil fuel industry would collapse. This is the so-called carbon bubble, and it is an existential threat to the fossil fuel companies.

By contrast, climate change is an important issue Mars, Nike, Starbucks and the other companies in BICEP,  but it’s by no means their biggest issue. They are to be commended for stepping out, but so far they have not thrown the full weight of their Washington operations (or, for that matter, their marketing departments)  behind their position.

That was evident last week when BICEP organized a lobbying day on Capitol Hill. I covered the event for Guardian Sustainable Business. Here is how my story begins:

It is not often that big business comes to Washington to seek regulation. But a group of companies including IKEA, Jones Lang LaSalle, Mars, Sprint, and VF Corp did so this week, asking Congress to take steps to prevent catastrophic climate change.

Executives organized by the business coalition BICEP (Business for Innovative Climate and Energy Policy), testified before a Senate and House task force on climate change, telling lawmakers about their own corporate commitments to reduce carbon pollution. Then they fanned out across the Capitol to lobby on behalf of a clean-energy financing bill.

They did so on the first anniversary of the release of the Climate Declaration, a corporate call-to-action that has been signed by more than 750 companies. It was a reminder to legislators that the US Chamber of Commerce, the coal industry and the Wall Street Journal editorial page do not speak for all of corporate America when they oppose government action to regulate carbon pollution.

“Business is not a monolith,” said Anne Kelley, who coordinates BICEP’s lobbying efforts. “That’s been the message of BICEP since the beginning.”

But if BICEP has shown that hundreds of companies favor political action on climate, its efforts so far have been drowned out in Washington by those of the US Chamber and its allies, a US Senator told the group.

Senator Sheldon Whitehouse, a Rhode Island Democrat and a strong advocate of climate action who convened the hearing, said BICEP’s voice is “a murmur and not a message”, and he urged companies to spend more of their political and reputational capital on the climate issue.

Whitehouse, as the story goes on to explain, urges the BICEP companies to be more forceful. Until more companies understand that the threat of climate change, and the costs of adapting to extreme weather such as heat waves and drought, is a core issue for them, the debate in Washington will be dominated by the likes of the US chamber. And that’s a problem for all of us.