In Haiti, philanthropy could lead to profits for NRG Solar

March 31, 2013
NRG Energy volunteers in Haiti

NRG Energy volunteers working in Haiti

A startling encounter with a young boy got David Crane, the CEO of NRG Energy, hooked on Haiti.

It was his first night in the Caribbean nation, months after the 2010 earthquake that killed more than 200,000 Haitians and destroyed 250,000 homes and 30,000 businesses.

As Crane tells the story, he and his daughter, who had traveled to Port au Prince to volunteer with the Clinton Global Initiative, left a cocktail reception to return to their hotel when she said, “Daddy, there’s a body under the car.”

A security guard gently kicked a boy of about 10, who emerged naked from beneath their SUV.

“This kid looked up at me,” Crane remembers. “There was no life in his eyes. No hope. Complete nothingness. I was so shocked. There were any number of things that I could have done for that kid. I just stood there and did nothing, except act like a dumb American.”

Since then, Crane and NRG Energy, its suppliers and its employees have done a great deal. He’s been back to Haiti a half dozen times, often accompanied by his wife and five children. NRG  made a $1 million commitment through the Clinton Global Initiative and  in partnership with Solar Electric Light Fund (SELF) to bring solar power to rural areas of Haiti.

“I didn’t mean to get so emotionally caught up in Haiti, but I did,” he told me, when we spoke by phone the other day.

Now, Crane says, he is hoping that what began as a charitable initiative will demonstrate the power of solar energy to spur economic development in poor countries. It could also help create business opportunities in the Caribbean for NRG. [click to continue...]

Filed Under: Climate Change, CSR, Energy, Environment, Global Poverty, Sustainability

Sustainability by anecdote

March 24, 2013

imgresI write stories. I read stories. I love a good story.

“After nourishment, shelter and companionship, stories are the thing we need most in the world,” says the British novelist Philip Pullman.

The corporate sustainability movement needs stories to inspire people, to win over customers, to change the world, as we heard last month at the GreenBiz Forum in New York.

But we need the right kinds of stories. Stories about people and companies that are having a meaningful impact. Stories that, ideally, drive broad and systemic change.

We’ve got big problems. We need big solutions.

Instead, my inbox overflows with stories that by themselves don’t get us where we need to go. Or stories that lack context.

Sustainability by anecdote, I call it.

Here’s one example that came in last month:

General Mills and Häagen-Dazs today announced an initiative designed to foster greater economic vitality for smallholder vanilla farmers in Madagascar and ensure the availability of high quality vanilla for future generations. [click to continue...]

Filed Under: CSR, Environment, Food, Global Poverty, Media Tagged With: , , , , ,

d.light: Solar power for the poor

March 3, 2013
A girl in India, studying with d.light

A girl in India, studying with d.light

About three decades ago, Donn Tice was an MBA student at the University of Michigan, studying with the late C.K. Prahalad, who was developing his argument that companies can make money and do good by creating products and services for the world’s poorest people. It’s an exciting notion, popularized in Prahalad’s  influential 2004 book, The Fortune at the Bottom of the Pyramid.

Today, Donn Tice is the CEO of d.light, which sells solar-powered lanterns to the poor. He’s trying to prove that his teacher was right, that a fortune awaits those who can create and sell life-changing products that help the very poor.

For now, this remains an unproven hope. Dozens of startups have ventured into the global south, selling everything from $100 laptops, cheap bikes, clean cook stoves and solar panels to the poor. Some have enjoyed success [See, for example, my blogpost, Clean Star Mozambique: Food, fuel and forests at the bottom of the pyramid] but few have achieved meaningful scale. Or made anything approaching a fortune.

The good news is that d.light is getting there. The company is now selling about 200,000 solar-powered lanterns and lighting systems a month in about 40 countries. By its own accounting, d. light has sold nearly 3 million solar lighting products and changed the lives of more than 13 million people. And, if all goes according to plan, the company will turn profitable this year.

“In addition to bring lighting to people who need it and power to people who can’t acccess it –which is our mission–we think we have the ability to demonstrate that this is a business model that works,” Donn told me, during a recent visit to the d.light offices  in San Francisco. Earlier this year, d.light was recognized with the $1,500,000 Zayed Future Energy Prize.

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Filed Under: Climate Change, Energy, Environment, Global Poverty, Small Business, Social Entrepreneurs, Sustainability Tagged With: , , , , , ,

Patagonia helps to save….Patagonia

February 10, 2013

A merino sheep ranch under Ovis XXI management in the Patagonian Steppe ecoregion of Argentina’s Neuquén Province. The Conservancy is working with Ovis XXI to protect Argentina’s temperate grasslands by promoting best practices in sustainable grazingThe more I learn about Patagonia Inc., the more impressed I am with the way that Yvon Chouinard and his colleagues run their business. The outdoor gear and clothing company supports what it calls the “silent sports” of climbing, skiing, snowboarding, surfing, fly fishing, paddling and trail running–none of which require a crowd or a motor to be enjoyed. It’s an enterprise that lives up to its mission: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.

Until recently, though, Patagonia did no business in Patagonia–a remote region of South America that includes temperate grasslands of Argentina, about 400 million acres (nearly three times the size of California) that are said to be among the most threatened, most damaged and least protected habitats in the world.

Now the company has embarked on an unusual partnership with a network of Argentine ranchers and The Nature Conservancy that is intended to build a sheep-grazing business that will not only protect, but restore parts of the Patagonian grasslands.

It’s a test of an intriguing idea–that a company that sells stuff to people can not only do less harm to the earth, but use the power of business to do environmental good.

“Can a company ever be regenerative?” asks Jill Dumaine, Patagonia’s director of environmental strategy. “We aspired to it, but we couldn’t envision what that would look like.”

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Filed Under: Consumption, Environment, Global Poverty, Leadership, NGOs, Sustainability, Water Tagged With: , , , , ,

Marcus Chung: A report from Bangladesh

January 27, 2013

ChungSadly, today’s guest post from my friend Marcus Chung is timely. The New York Times reported this morning on another factory fire in Bangladesh, this one killing seven women. Is this the price we must pay for cheap clothes? Marcus thinks not–although he’s just 36, he has worked for about a decade on corporate responsibility issues in the apparel industry, doing stints at Gap and Talbot’s. I’ve gotten to know Marcus as a fellow board member at Net Impact, a nonprofit organization of students and young professionals who want to use their business skills to make the world more just and sustainable. That’s exactly what Marcus, a Wesleyan grad with a Berkeley MBA, is doing in his current job, consulting for a global retailer of children’s clothing. Here’s his report from Bangladesh.

From the moment you arrive at the Dhaka airport, it’s clear that the apparel industry is vital to Bangladesh’s economy. Airport walls are lined with posters advertising local garment manufacturers, textile mills, and trims suppliers. Apparel accounts for between 70 and 80 percent of exports, so it’s no surprise that almost everyone on my flight from Hong Kong to Dhaka declared their profession as “buyer” or “sourcing” when clearing through immigration.

I visited Dhaka on behalf of a client to get a better understanding of the CSR challenges, trends, and opportunities that large apparel brands face in sourcing from Bangladeshi garment factories. Following November 2012’s tragic Tazreen Fashions factory fire that claimed the lives of more than 100 workers, there is renewed focus on how the industry can promote better factory working conditions. Tazreen was just the latest in a string of Bangladeshi garment factories that burned to the ground, but it also was the country’s most devastating in terms of lives lost.

Western mass-market apparel retailers source from Bangladesh because they can get a solid product at a competitive price. The apparel industry cannot ignore a fundamental commercial reality: Bangladesh has a ready supply of very capable garment factories that are filled with inexpensive labor. It’s not realistic (or probably advisable–MG)for companies to simply stop sourcing from the country. Therefore, the industry must do a better job of sourcing in a responsible manner that protects the rights of workers and includes basic commitments to a safe and healthy work environment.

A Multitude of Challenges

Over the years, I’ve heard many hypotheses about why fire safety continues to challenge so many Bangladeshi factory managers. Some cite an ineffective, corrupt government that does not enforce its own building code regulations. Others believe factory middle managers, myopically focused on production output, lack the ability or understanding to support fire safety practices with workers. Many believe pressure from Western brands to achieve low-cost goods encourages subversion of basic health and safety standards. I’ve heard people claim the root cause is a basic lack of infrastructure: old, multi-story buildings with poor electrical wiring; unreliable power supply (I cannot count the number of times the power went out during my visit) that causes short-circuits; and dusty, flammable materials lying dangerously close to unprotected electrical outlets. I spoke with one CSR leader who lamented a general lack of civil society and a culture where officials will agree to make improvements, but never follow through. [click to continue...]

Filed Under: Consumption, CSR, Global Poverty, Human rights, Sustainability, Workplace Tagged With: , , , ,

Miya: Delivering clean drinking water, at scale

January 16, 2013

59610-tikun miya-bizua1-0708Over the years, I’ve heard and written about many efforts to provide clean drinking water to the world’s poor people–Procter & Gamble’s PUR, Unilever’s Pureit,  Lifestraw from Vestergaard Frandsen and PackH20 from Greif. (See, for example, my blogposts about Lifestraw and PackH20.) They’re worthwhile and innovative but, for various reasons, they have been slow to scale.

Last week in Israel, I learned about company that is only six years old but has already delivered safe drinking water to two million people in a single city–Manila. Called Miya, the company also has projects underway in Brazil, South Africa and the Bahamas. A wholly owned subsidiary of Arison Investments, Miya is one of the emerging stars of Israeli’s clean tech sector. [See my last blogpost, In Israel, clean tech is not the new new thing.]

Shari Arison, the owner of the Arison Group, launched Miya in 2006 with $100 million of her own money. [In a Jewish text known as the Kabbalah there are 72 names for God, one of which is Miya.] She did so, she told me, because it aligns with her desire to lead businesses that do good in the world. Miya isn’t a glamorous business–essentially, it deploys sophisticated technology to help water utilities close leaks from underground pipes–but it is growing  fast and already having an impact on a urgent problem.

Meir Weitchner, Miya’s chairman, told me: “The way the world today is dealing with water is leading to disaster. In our generation, we–if we don’t do something different–are going to suffer from serious water shortages.” That’s because people continue to move from rural areas to cities, and because the amount of water used by people is rising. [click to continue...]

Filed Under: Environment, Global Poverty, Sustainability, Water Tagged With: , , , ,

Who’s responsible for factory conditions in poor countries? Has CSR gone too far?

January 6, 2013

garment-factoryJust who is responsible for the fire in a garment factory in Bangladesh that killed more than 100 workers in November?

The factory owner? The government of Bangladesh? US and European brands and retailers who bought the clothes made there? Shoppers who demand the latest styles at low prices?

And who deserves credit for the improvements in working conditions at Foxconn, China’s largest employer and Apple’s biggest supplier?

Apple? The Chinese labor market? Journalists at The New York Times?

Similar questions could be asked about paint factories that discharge pollution into rivers, toy factories that use dangerous chemicals or factories everywhere that run inefficient equipment or burn dirty fuels.

For nearly two decades, a core belief of the social-responsibility movement  has been that western brands and retailers must take responsibility for the social and environmental performance of the factories in their supply chain. This has created an immense infrastructure–an industry, really, of consultants who write codes of conduct for those factories, inspect the factories, report on them and deploy a combination of carrots and sticks that, at least in theory, bring about improved performance.

In essence, US and European brands have become quasi-governmental, undemocratic standards setters and enforcers of social and environmental norms.

So how’s it working? The year just past put a spotlight on a glaring failure of that system–the fire in Bangladesh, where factory conditions in the garment industry are widely deemed to remain unsafe–and on what has been cited as one of its successes–the new transparency of Apple’s supply chain, and the improved conditions at Foxconn, which supplies HP, Sony, Dell and other electronics companies, as well as Apple. [click to continue...]

Filed Under: Business Ethics, Consumption, CSR, Economics, Environment, Global Poverty, Health, Human rights, Sustainability, Transparency, Workplace Tagged With: , , , , , , , , ,

PackH20: A startup to serve poor women

December 19, 2012

Haitian-woman

They say a picture is worth 1,000 words.

This picture could turn out to be worth a lot more.

It launched a business that could serve millions of poor women.

The photo was taken after the 2010 earthquake in Haiti by David Fischer, the chief executive of an industrial packaging company called Greif. You probably don’t know Greif but the company, with $4.2 billion in sales last year, has surely packaged something that made its way into your home. It makes steel, plastic, fibre, flexible and corrugated containers,  to ship a variety of products–food, grains, chemicals, ceramics and glassware, furniture, drugs, paints–all over the world.

Now, through a spinoff company called PackH20, Greif has begun to make containers that will make it easier and safer for the world’s poorest women to carry water to their homes.

Last week, I met with Tanya Baskin, the president of PackH20, and Scott Griffin, Greif’s chief sustainability officer, to talk about the new venture. I’m always interested in businesses that aim to solve big social or environmental problems, create jobs and generate wealth–and PackH20 falls squarely into that category.

Pack-BlueThe PackH20 pack is a deceptively simple innovation. It’s made of a durable and flexible polyethylene material that is seven times lighter than the jerry cans (like the one above) often used to tote water around. It’s ergonomic, distributing the weight of five gallons of water–about 42 pounds–across a woman’s back. Its inner liner can be dried and sanitized in the sun. That’s important because the women and children who carry water in poor countries typically do so in cans or buckets that get dirty. A test of jerry cans used by Haitians found more than 90% were contaminated with E.Coli, and 70% previously held oil or  toxic chemicals, according to PackH20.

Scott Griffin, the Greif executive, told me that the idea to make a pack to carry water came to Fisher,  who was volunteering in Haiti, when he snapped the photo. “That was the a-ah moment for Greif,” he said. “We knew we had the capability to design a better product. This is a shipping container, on a very micro level.” [click to continue...]

Filed Under: Consumption, Environment, Food, Global Poverty, Health, Social Entrepreneurs, Water Tagged With: , , , , ,

CleanStar Mozambique: Food, fuel and forests at the bottom of the pyramid

May 27, 2012

A farmer in Mozambique

What on earth is Novozymes, a $1.8-billion industrial biotechnology company headquartered in Denmark, doing in Mozambique, a poor African country  (per capita income: $440) where corruption is rampant and more than half of the government’s budget comes from foreign aid?

The company says it’s trying to protect forests, increase agricultural productivity, lift farmer incomes, reduce indoor air pollution and, not incidentally, make money.

In an unusual move for a big multinational company, Novozymes and a partner, a New York-based firm called CleanStar Ventures, have created a vertically-integrated, energy-and-fuel company called CleanStar Mozambique. The centerpiece of the new venture is a factory that makes clean-burning ethanol for use as a cooking fuel from cassava, a starchy food crop widely grown in Africa. The factory opened in mid-May, with a visit from Steen Riisgaard, Novozymes’ CEO, who said, according to published reports: “I’ve seen many ethanol plants in the world and this is the smallest. But it is also the one that makes me the most proud.”

CleanStar Mozambique aims to do business at the bottom of the pyramid, where the world’s poor people collectively make up a big market. [See my blogpost, Beer at the bottom of the pyramid, which is also about Mozambique.] BOP, as it’s known, is an appealing theory, but not one that has generated a lot of success stories since it was put forward by  two academics, the late C.K. Prahalad (who wrote The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits in 2004) and Stuart Hart, a Cornell professor who co-authored the first article on the BOP with Prahalad and has since become a leading thinker on sustainability. [click to continue...]

Filed Under: Climate Change, CSR, Energy, Environment, Food, Global Poverty, Health, Social Entrepreneurs Tagged With: , , , , , , ,

At Starbucks and Thanksgiving Coffee, it’s not just a cuppa joe

May 15, 2012

A coffee farm in Costa Rica

Aside from being in the coffee trade, Starbucks and Thanksgiving Coffee would appear to have little in common.

Seattle-based Starbucks is a FORTUNE 500 company (2011 revenues: $11.7 billion) that sells its brews all over the world, pursues global dominance (its latest outpost is Helsinki) and owns an iconic  brand. The company bought about 428 million pounds of coffee last year.

Thanksgiving Coffee is a family-owned, artisan roaster that sells most of its coffee to grocers, specialty stores and restaurants near its home base in Mendocino County, CA, where the other popular crop is often smoked. Thanksgiving bought about 500,000 pounds of coffee last year.

Yet the big coffee company and the little one share a couple of important goals.

First, they want to win the trust of their customers and, of course, their own employees. One way to do that is by showing them that their coffee is ethically-sourced. Starbucks talks about responsibly grown coffee, citing its Coffee and Farmer Equity (CAFE) Practices, a set of social, economic, environmental and quality guidelines. Thanksgiving’s slogan is ““Not Just a Cup, but a Just Cup.”  Reputation matters, whether you are big or small.

But, even if reputation didn’t matter (and to most customers, it probably doesn’t), Starbucks and Thanksgiving need to devote their attention to the social and environmental practices of their growers, upon whom they depend for a reliable supply of high-quality coffee. If their coffee farmers run into trouble–because of low coffee prices, poor environmental practices or climate change–Starbucks and Thanksgiving will struggle, too.

The other day, I wrote about the Fair Trade movement and its efforts to improve the lives of coffee growers. (See my blogpost, A Schism over Fair Trade.) About 9 percent of the coffee sold by Starbucks in the US is certified as Fair Trade; about 75%  of Thanksgiving’s coffee is Fair Trade certified. Today, I’ll dig a bit deeper into the ways Starbucks and Thanksgiving work with growers. [click to continue...]

Filed Under: Climate Change, Consumption, Environment, Food, Global Poverty, NGOs, Rwanda, Sustainability, Transparency Tagged With: , , , , , ,
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