More than a decade after the Nike scandals of the late 1990s exposed terrible working conditions in the Asian factories where most of our stuff is made, has anything changed? To be sure, in the years since, most US brands — not just footwear and apparel companies like Nike, Timberland and Gap, but corporate giants like GE and Walmart — have assumed responsibility for human rights and environmental problems throughout their supply chains. But are conditions any better for the workers?

Those questions are front-page news these days, literally, in The New York Times, which has published two long and extraordinary stories about Apple and its supply chain in China. [See How the US Lost Out on iPhone Work and especially In China, Human Costs are built into an IPad.] The Apple-in-China story is also brought to life by Mr. Daisey and the Apple Factory, a lively, provocative episode of public radio’s This American Life, in which an actor-turned-reporter  named Mike Daisey investigates conditions at a Foxconn factory in Shenzhen. Together this reporting paints a shameful picture of harsh and unsafe working conditions at Apple suppliers: sometimes deadly safety issues, chemicals that scar people’s hands, 60-hour weeks, long stretches of work with no breaks, a rash of worker suicides, etc. To get some perspective, I spoke with Dan Viederman, the executive director of Verite, a nonprofit that helps companies build more humane and sustainable supply chains, and I’ve been reading my friend Adam Lashinsky’s excellent new book, Inside Apple.

Foxconn offers medical care on its campuses

For starters, let’s be clear: This is not an Apple problem. The focus of both The Times’ reporting and Mike Daisey’s story is Foxconn, which is said to be China’s biggest private employer and may be the world’s largest manufacturing company. It employs 1.2 million people (!) and assembles an estimated 40 percent of the world’s consumer electronics, for customers including Amazon, Dell, Hewlett-Packard, Nintendo, Nokia and Samsung, according to The Times. Part of a company called Hon Hai that is headquartered in Taiwan, Foxconn operates not just in Asia, but in the Czech Republic, Mexico and Brazil. It publishes a corporate social responsibility report and has US-based employees in Houston and Austin, TX.  Most Americans, of course, have never heard of Foxconn although they probably own something that was made by the company.

Nor is the problem of harsh, unsafe working conditions limited to Foxconn or even the electronics industry. Problems abound in the apparel and toy industries, too, as well as in mining, farming, fishing and construction. [See Walmart: A Bully Benefactor at Fortune.com for my story about Walmart's work to prevent  child labor on cotton farms in Uzbekistan]. Last summer, Nike admitted that “nearly two-thirds of the 168 factories making Converse products fail to meet Nike’s standards for contract manufacturers,” according to this story by Good Guide’s Dara O’Rourke, who as a graduate student working in Vietnam in 1997 turned a spotlight on Nike’s use of child labor.  In its most recent corporate-responsibility report, Gap says  that between 10 and 25% of its suppliers in south China don’t comply with child labor laws, don’t pay overtime as required and don’t provide one day off each week. I turned to Gap’s report not because they are a laggard but because, to their credit, they are a leader when it comes to being open about where their factory monitoring efforts are falling shorts. Other companies don’t say nearly as much about where their stuff is made, or how. The factories themselves are often walled off from NGOs and journalists. The result is that, for better or worse, most of our stuff is made in faraway places by people who are invisible to us. Can you find Shenzhen, a city of 14 million people (bigger than New York!) and the world’s manufacturing hub, on a map?

Apple CEO Tim Cook

As best as I can tell, Apple is no worse than most other companies when it comes to protecting the rights of workers in its factories. It may be better. In its sixth annual Supplier Responsibility Report released last month, Apple disclosed the names of its suppliers for the first time–but not the location of their factories. The company also became the first electronics firm to join the Fair Labor Association, a nonprofit group that works to improve conditions for workers. (Its other clients include Nike.) In an email to employees, Apple’s CEO Tim Cook wrote: “The FLA’s auditing team will have direct access to our supply chain and they will report their findings independently on their website.” They don’t, however, tie violations to particular factories.

In its report, Apple also said that it

dedicated additional resources to protecting the rights of workers who move from their home country to work in factories in another country. Many of these immigrants are charged exorbitant fees that drive them into debt, an industrywide problem that Apple discovered in 2008 and that we classify as involuntary labor. In 2010, we continued our search for these violations, auditing all of our production suppliers in Taiwan and many in Malaysia and Singapore. As a result of Apple’s audits and rigorous standards,
foreign workers have been reimbursed $3.4 million in recruitment fee overcharges since 2008.

This is significant because it’s a rare example of a US brand putting money in the pockets of overseas workers. “On the migrant labor issue, Apple is absolutely a leader,” says Dan Viederman of Verite. [Disclosure: Verite has worked with Apple and my wife, Karen Schneider, is a board member of  Verite.] Others see Apple differently. A consultant for BSR (also know as Business for Social Responsibility) who declined to be identified told The Times that Apple refused to push Foxconn to try out a program where workers could have access to private “hotlines” to report abusive conditions.

The more fundamental problem is that Apple’s reporting doesn’t tell you much about what impact the company is having. Cook’s email, for example, says that Apple’s

Supplier Responsibility team led more than 200 audits at facilities throughout our supply chain last year. These audits make sure [emphasis added] that working conditions are safe and just..

But othey don’t. Suppliers are notorious for faking pay records and gaming the inspectors. And Apple’s track record makes clear that conditions are not safe and just.

Cook also boasts that Apple offers free continuing education programs at  factories in China, saying that “more than 60,000 workers have enrolled in classes to learn business, entrepreneurial skills or English.” But are they earning more money? Working fewer hours? Safer?

Dan Viederman

See the problem here? Apple and other companies are measuring their actions, and not their impact. There’s a big difference between the two.  It’s reason why we don’t know whether the people who make the iPad are better or worse off than those who make an HP printer or a Microsoft X-Box. “Companies report on their activities – audits conducted, training delivered – but don’t tell us what impact that effort has achieved for workers,” Dan says. “As a result, while companies are getting better at reporting on their activities, we don’t have a meaningful way to compare one company to another.” We’d know more if companies reported on the wages that workers are paid, the number of workplace injuries, turnover rates, environmental discharges and the like.

Those who follow these issues also tell me that workplace issues are not part of procurement at most companies. If suppliers had  to demonstrate that they provide ethical workplaces as a condition of doing business with a big US brand, companies might avoid embarrassment–and more important, make a difference in the lives of their workers.

Nicholas Kristof

Having said that, it’s worth remembering that globalization and the manufacturing jobs it has brought to Shenzhen have on balance been good for China and its people. Workers line up for jobs at Foxconn, as the Atlantic reported last week. No less a crusader for the rights of the global poor than Nicholas Kristof has said as much, most famously in a 2000 Times Magazine article called Two Cheers for Sweatshops.

More recently, Kristof, who lived in China, told This American Life that industrialization has

created massive employment opportunities, especially for young women, who frankly didn’t have a lot of alternatives. That tended to give women more clout within families, within the community….for many Chinese, the grimness of factories like Foxconn was better than the grimness of rice paddies.

If you’d prefer the opinion of a Nobel Prize-winning economist, here’s Paul Krugman, writing in Slate, back in 1997:

While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.

It is not an edifying spectacle, but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful, but nonetheless significantly better.

What’s more, competition for workers — and the very beginnings of a labor movement — has also begun to  improve conditions in China’s factories. To retain workers, owners are said to be improving wages, working conditions and living conditions, albeit slowly.

But still.

My MacBookPro costs $1299.  My iPad2 retails for $499. I don’t even know how much my iPhone costs, and I don’t want to think about how many iPods, Nanos or shuffles I’ve bought for my family over the years. By selling premium-priced products and generating high margins, Apple was the US’s most valuable company–worth more than ExxonMobil, Microsoft and IBM, last time I checked. It’s holding $97 billion in cash and short-term securities.

Simple fairness dictates that more of that wealth should be shared with the workers in China who are making Apple products.

In the developed world,  brewing giant SABMiller, whose global brands include Miller, Peroni, Grolsch and Pilsner Urquell, competes with the even bigger brewing giant Anheuser-Busch InBev, which owns Budweiser, Beck’s, Stella Artois and Michelob. They’re the Pepsi and Coke of beer, which, by the way, is the world’s third most popular drink, after water and tea.

But in Africa, SABMiller’s biggest competitor is the guy (or gal) who makes beer at home. That’s a big reason why the company, which had revenues of $28 billion last year, recently began selling Impala, a beer made from cassava, in Mozambique. Similarly, for about a decade, SABMiller has been selling Eagle Lager, a beer brewed with sorghum, in Uganda.

Using local like cassava and sorghum crops appeals to local tastes, supports local farmers and keeps costs down so SAB Miller can price its beer lower to compete with homemade brews.

“By using locally-sourced raw materials, we can make high-quality, but affordable products for consumers who would otherwise be drinking informal or illicit alcohol. So the long term commercial opportunities are significant,” Andy Wales, SABMiller’s global head of sustainability, told me in an email interview.

Beer at the bottom of the pyramid, you could call it.*

It’s fitting that SABMiller is expanding and experimenting in Africa. The company was founded in 1895 in South Africa, and its shares are still listed on the Johannesburg stock exchange, as well as in London. Nevertheless, most of its agricultural raw materials–beer is typically made from barley–have traditionally been imported. At the same time, people across Africa are drinking up to four times as much cheap home-brewed beer than what they are buying in the formal market, Wales estimated

To change the dynamic, SABMiller began in Uganda in 2002 to make Eagle Lager from sorghum sourced from smallholder farmers. It now accounts for about 50% of the company;s sales in Uganda, and generates income for about 9,000 farmers, Wales said. Since then, Guinness and Heineken began brewing beer from sorghum in Ghana and Sierra Leone.

SABMiller then looked at cassava, a widely-grown, starchy, drought-resistant root vegetable. The trouble with cassava is that, once pulled out of the ground, it needs to be processed or cooked right away; within a couple of days, the tuber turns black and is unpalatable and useless. Cassava has little value as an export crop.

Only after SABMiller got access to a mobile processing unit made by a company called DADTCO (DutchAgricultural and Trading Company) did the cassava beer become practical. “We can buy the cassava directly from the farmers and process it in situ, before it degenerates, and take out much of the bulk,” Wales said.

“Africa’s agricultural potential is enormous, but currently under-exploited,” he went on. “By creating market opportunities for subsistence farmers in our value chains, we are able to increase their productivity, allowing them to feed their families and generate an income for the first time.” The company said it is buying cassava from more than 1,500 smallholders.

Local sourcing has clear benefits: lower inventory costs, a shorter and more visible supply chain, and no worries about import duties or worse. (Nigeria tightly restricted imports of barley malt in the 1980s.) Then again, managing a supply chain with lots of small farmers is a lot harder than buying in vast quantities from giants like Cargill.  SABMiller is getting help from DADTCO, which has 30 years of experience working with farmers in the developing world, and a nonprofit called IFDC that works in more than 100 countries.

Andy Wales

So how does the beer taste, Andy? “It’s excellent!,” he writes, “not too dissimilar from a regular lager. It looks exactly like any other beer – golden and sparkling with a foam head.”

By the way, I hear that bananas are a popular ingredient for home brews in the Democratic Republic of Congo. Could a banana beer be next?

–

* The phrase bottom of the pyramid, or base of the pyramid, refers to the world’s poorest consumers. The late CK Prahalad wrote a book called The Fortune at the Bottom of the Pyramid arguing that companies could develop new business models to profitably serve these 2.5 billion people and help generate local wealth.

Happy New Year! And good riddance to 2011, a year during which we made little or no progress on some of the issues that I care most about: climate change, the long-term federal debt, social mobility (aka the American dream), and our dysfunctional Congress. Yet I remain an optimist.

Texas drought 2011

I could write many words about our woes. Instead, I’ll try to be succinct. On the climate issue, global emissions of carbon dioxide from fossil-fuel burning jumped by the largest amount on record in 2010, we learned recently, and 2011 surely brought further increases.  Concentrations of CO₂ are 39% above where they were at the start of the industrial era and approaching the point when some scientists say it will be nearly impossible to contain global warming, the Guardian reports. Neither the US nor the UN moved closer to regulating CO2. In a discouraging development, Republicans Mitt Romney and Newt Gingrich backed away from their once-sensible support of greenhouse gas regulation, in what can only be seen as shameless pandering to the know-nothing wing of the Republican Party. Discouraging, too, was the Fukushima nuclear disaster, which will slow down the growth of carbon-free nuclear power. So will the failure of Solyndra. Meanwhile, the U.S. suffered massive flooding of the Mississippi and Missouri Rivers, a terrible drought in Texas, record wildfires and at least 2,941 monthly weather records that were broken by extreme events, according to the NRDC.. Coincidence? Uh, no.

Like the atmospheric concentrations of CO2, the federal budget deficit has been growing.That’s no coincidence either. We’re living beyond our means, whether by burning fossil fuels or taxpayer dollars, and sticking future generations with the cleanup bill. Just last week, the White House asked for a $1.2 trillion increase in the federal debt limit, raising it to about $16.4 trillion. According to Marketplace Radio, that amounts to about $52,000 for every American. For a typical  family of four, that’s bigger than the mortgage.

Social mobility is harder to measure than income inequality (and more important, methinks), but indications are that it’s more difficult to climb the economic ladder in the U.S. than in other western democracies. The Economic Mobility Project, a  bipartisan effort to study the issue, reported recently on a study of 10 western nations that concluded: “In the United States, there is a stronger link between parental education and children’s economic, educational, and socio-emotional outcomes than in any other country investigated.” The sluggish U.S. economy in 2011 didn’t make life easier for those on the bottom who want to work hard and better themselves.

And yet.

As I wrote a year ago (see my blogpost, China, cappuccino and cell phones: reasons to cheer!),  life on this planet is getting better all the time. We humans are richer, healthier and and more peaceful than ever. It’s easiest to forget that, especially if you focus too much on the day-to-day headlines.

Here are several reasons to feel good about the year ahead:

Western economies are slumping, but the rest of the world is growing robustly. The most urgent problem facing mankind isn’t climate change: It’s the human misery that’s caused by poverty. There’s less of that today than there was a year ago, and there will be less on Jan 1, 2013, I’d bet. China’s GDP grew by about 10% in 2010 and by an estimated 9% in 2011. India grew by 6 to 7 percent last year.

A Nairobi street

Then there’s Africa. As Forbes reported last week, in the middle of the 2009 global economic recession, Africa was the only region apart from Asia that grew positively, at about 2%. The continent’s growth has been on an upward trajectory ever since then- 4.5% in 2010 and 5.0% in 2011.

Reliable statistics are hard to come by, but you can be sure that this means that many millions of people are living longer and healthier lives, and that their children have a better shot at an education. This is good  for all of us because the global economy is not a zero-sum game. An expanding pie means a safer world, and more markets for U.S. goods. And there’s even reason to hope believe that the US economy is due for a rebound. See what Matthew Yglesias writes in Slate that Happy Days Are Here Again.

Corporations are taking a more expansive view of their responsibilities: One reason why I write about business is that I believe that corporations can be a powerful force for good. Many are not, but I found reason in 2011 to applaud changes at Walmart (Have I Fallen in Love with Walmart?), McDonald’s (Mainstreaming Sustainability? ), Smithfield Foods (Sustainable pork?), Office Depot (No tree hugging, please), Shaw Carpets (This carpet has moral fiber), Unilever (CEO Paul Polman: Don’t stay on the sidelines), Starbucks (We are indivisible), Marks & Spencer (Sustainability, profits and a carbon-neutral bra),  TD Bank (America’s greenest bank?) and GE (How GE learned to think small and serve the poor). My most popular post of the year, by far, was about Patagonia (Maybe the best retail ad ever).

These companies are responding to rising expectations–from advocacy groups, consumers, a handful of shareholder activists and especially from their own workers. The changes they are making aren’t big enough, and they aren’t happening fast enough, but the forces driving companies to become more sustainable are getting stronger all the time.

Protesters in Egypt

Citizens’ movements are growing here and abroad. Whatever you think of Occupy Wall Street, they got one thing right–the deck is stacked in the US in favor of the well-to-do and the powerful, not just the 1% but the 10 or 20 or 30%, and it’s stacked against those at the bottom of the income ladder. So many laws and cultural practices that we take for granted–from the mortgage interest deduction to the dismal quality of the public education system in our big cities and poorest rural areas–serve the interests of the rich and powerful. Wall Street got bailed out. Main Street got left behind. Thank goodness for people didn’t take that lying down. Thanks, too, to the Tea Party, which is wrong about most things but right about the fact that the federal government can’t keep spending money that it doesn’t have.

Of course, Occupy Wall Street was largely inspired by citizens uprising in Tunisia and Egypt, which in turn seem to inspired people in Russia and even in China to demand more of a voice in their own affairs. This is all to the good, and it should be a reminder to those of us here in the U.S. not to take our freedoms for granted and to exercise our rights as citizens. A big job ahead is to convince Congress to act like adults and treat us that way, understanding that they were elected to solve big problems, even if that requires. We can’t have big government, generous services and low taxes. Or cheap energy without climate risk. Or affordable, unlimited health care for all.

Sure, there’s reason to be gloomy but it always helps to think long term. More people are free today than at any time in human history. More people live comfortably. We’re more tolerant and loving that we used to be. We’ve got an African American president and my daughter, who is gay, will get legally married in June. MLK Jr. had it right: “The arc of the moral universe is long but it bends toward justice.”

As a global consumer products giant, with $44 billion euros [nearly $60 billion] in 2010 revenues, Unilever has a big impact on how and what people buy. Two billion consumers use a Unilever product on any given day. If you use Lipton Tea, eat Hellman’s mayonnaise or Ben & Jerry’s ice cream or use Dove or Lifebuoy soaps or  Suave hair products, you’re among them.

Paul Polman, Unilever’s CEO, embraces the idea that his company can make the world more just and sustainable. Unilever buys about 4-5% of the world’s palm oil, so it has promised to purchase all its palm oil from certified sustainable sources by 2015. It buys about 7% of the world’s tea, making it the world’s largest buyer, so Unilever aims to have all the tea in all Lipton tea bags sourced from Rainforest Alliance Certified™ estates by 2015, and 100% of its tea sustainably sourced by 2020.

“We have to take that responsibility,” Polman said today (Nov. 22) during a webcast called Sustainable Living: Mainstream or pipe dream?  The webcast, organized by the Guardian Sustainable Business, was held a year after Unilever released its sweeping Sustainable Living Plan, in which it promised to cut the environmental footprint of its products in half, help more than 1 billion people take action to improve their health and well-being, and source 100% of its agricultural raw materials sustainably. [See my 2010 blogpost, Unilever's big, broad, bold sustainability plan.]

But there are limits to what even a big company can do, so Unilever has begun thinking seriously about how to change consumer behavior around sustainability. Today, it released a new report called Inspiring Sustainable Living [available for download] which identifies five levers for change: Make it understood, make it easy, make it desirable, make it rewarding, make it a habit.

Paul Polman

This approach, Polman explained, recognizes that Unilever can’t transform itself into a more sustainable enterprise without the help of consumers. People need to shop more consciously–ideally, giving preference to products that are sustainable sourced–and take steps conserving water and energy at home and at work.

“Don’t stay on the sidelines,” Polman said. “It really comes down to small actions and big differences. Together, we can do it.”

The Unilever webcast delivered mostly generalities, so in a brief phone interview afterwards, I asked Polman for a couple of  examples of how the company is moving towards a  more sustainable model of consumption.

He told me that Unilever is committed to working with small farmers, as a way to guarantee a steady supply of the commodities it needs, to promote sustainable agricultural practices and to help poor farmers earn a better living. “We’ve made a commitment to create livelihoods for 500,000 smallholder farmers,” he said. That’s a big number. In Indonesia, for example, Unilever operates a development project with about 7,000 farmers, half of them women, who grow black soybeans, a key ingredient for a sweet soy sauce that the company sells in Asia. The company provides the farmers with technical assistance, a guaranteed market and financing if needed.

Polman also talked about the company’s commitment to selling Lifebuoy soap and promoting good hygiene–parallel goals. “We’ve rolled out a campaign in schools, in emerging markets, and the challenge is to get children to develop proper habits.” Today’s report on consumer behavior explains:

Lifebuoy soap’s handwashing campaigns run over a minimum of 21 days to encourage repetition of behaviour in relevant settings every day. During each day of the programme, children participate in activities designed to deliver the handwashing message in an engaging and memorable way. Comic books, posters, quizzes and songs all work to remind them about the message of handwashing at key occasions. Compliance is also tallied on a daily sticker chart with the help of mum and teachers, to reinforce the behaviour.

Is this corporate responsibility? Or good marketing? Or both?

There’s more to say about Unilever’s efforts, but I’ll conclude with a couple of thoughts. First, Polman to his credit is trying to bring investors along with the plan. The company doesn’t give quarterly earnings guidance, and makes clear that its focus is on the long-term. On its investor center webpage, Unilever reports not only on financial metrics but on water usage and greenhouse gas emissions–a sign that sustainability matters.

Second, it’ll be interesting to see if consumers give Unilever credit for this work. That’s a challenge because Unilever’s numerous consumer brands differ from its corporate brand. Polman is optimistic, telling me that the company scored high in a recent UK survey of responsible brands. “We were third on the list, even with the Unilever brand, and the only one on the top 10 that was not a branded product itself,” he said.

David Jones, the CEO of advertising and marketing giant Havas, who joined in the webcast, said today’s consumers “know more about companies than ever and they have a tool, social media, to push them.” Perhaps optimistically, he added: “In the future, those business leaders who are the most socially responsible are the ones who will succeed.”

Polman, too, said consumers pay close attention to brands online, noting that millions visit the Ben & Jerry’s website.

“People are interested in when Jerry goes to the toilet every day,” Polman said, with some amazement.

“Are you?” asked moderator Jonathan Porritt.

“I’m definitely not,” replied Polman. “I’m interested in how much water he uses when he flushes.”

There’s a good CEO for you–right on message.

Here’s a video from Unilever about its five levers for behavioral change.

Buy a nutrition bar.

Feed a starving child.

That’s the simple idea behind a startup company called Two Degrees. For every bar the company sells, Two Degrees will through its nonprofit partners give a nutrition pack to a hungry child in Africa or Haiti.

Fighting malnutrition is “why we started the company,” Lauren Walters, the CEO and  co-founder of Two Degrees, told me during a recent visit to Washington. Lauren, who is 60, is a former lawyer, U.S. Senate staff member, consultant and real estate developer. His co-founder Will Hauser, who is 25, is a Harvard grad who spent a year at Goldman Sachs before choosing to go into business for himself. They knew one another  because Will’s father is one of Lauren’s friends.

You can think of Two Degrees as inspired, in part, by TOM’s Shoes, Newman’s Own and Clif Bar. TOM’s is the company that gives away a pair of shoes for every pair it sells. Newman’s sales of salad dressings, popcorn and the like have generated $300 million for charities since 1982. And Clif, of course, made nutrition bars into popular (and guilt free, sort of) snacks.

It was, in fact, when Lauren heard a speech by Blake Mycoskie, TOM’s founder, that the idea for Two Degrees took root. (Mycoskie’s new book, fittingly, is called Start Something That Matters.) He subsequently took a trip to the Congo, Zambia, Rwanda and Burundi with Partners in Health, where he’d been a donor and where his son worked as an intern. He saw lots of malnourished children, and learned that those kids under three who suffer from “severe acute malnutrition” who are fortunate enough not to die instead can suffer long-lasting damage. Nutrition packs can save lives and enable the brain to develop properly.

“We want to give away millions of these, tens of millions of these,” he said. What’s more, if the bars are successful, and the brand becomes known, there’s no reason why Two Degrees can’t expand into other food products, he said.

The concept for Two Degrees came together in 2009, and the company launched earlier this year. Most of the nutrition packs they give away are made by Valid Nutrition, a nonprofit started by a Irish physician named Steve Collins. It produces its ready-to-use food packs in Malawi, Kenya and Zambia, using local ingredients where possible and creating jobs. Which is cool.

Two Degrees uses contract manufacturers to makes its “healthy, all-natural gluten-free” nutrition bars in three flavors: chocolate peanut, cherry almond and apple pecan. The aptly-named Barr Hogen, who concocted the recipe, joined the company after working as top chef and director of product development at Odwalla.

The company sent me a sample, and they’re good.  (Like most nutrition bars, they’re a bit  too sweet for my tastes, no surprise since the first ingredient is brown rice syrup, i.e., a sweetener). They sell online for $19.95 for a box of nine bars.

More important, because most people won’t order nutrition bars online, Two Degrees is distributed nationally by Whole Foods Markets. This is a coup. With $9 billion in annual revenues, Whole Foods can make (or break) new products aiming to get noticed in the ever-more-crowded natural and organic food categories.

Lauren Walters in Malawi

Even so, Two Degrees–which raised money from family, friends and angel investors–will struggle to stand out from a crowd of brands including Clif, Zone, Luna, PowerBar, etc..

“It’s an incredibly crowded space,” Lauren admits. “What distinguishes us from every other company is our potential to make a difference.”

The one-to-one model should be especially appealing, since it doesn’t depend on the company’s sales or profits. Giving away a percentage of profits doesn’t mean much when a company has a bad year. Buy a Two Degrees bar, and you can be sure that a child in need will benefit.

“People, given a choice, want to help other people,” Lauren says.

His story is proof of that.

I’m a lover of books and I’m guessing you are, too.

So you know that books can lead you to think differently about life, perhaps improve your life, maybe even change your life.

Today, I’m writing about a book that will quite literally save lives. Indeed, that’s why it was created.

The book is called End Malaria: Bold Innovation, Limitless Generosity, and the Opportunity to Save a Life. It’s the brainchild of a writer and editor named Michael Bungay Stanier, and you can buy it here. End Malaria is published by The Domino Project, a Seth Godin book publishing venture with which I am loosely affiliated.*

End Malaria  is a collection of 62 essays–some inspirational, others practical–from a wide range of business thinkers and doers. They include personal-finance guru Dave Ramsey, productivity guru David Allen, Premal Shah of Kiva [See my blogpost, Kiva: pushing the envelope on green),  wine guy and social-media maven Gary Vaynerchuk, Wired magazine founder and author Kevin Kelly, pursuer of excellence Tom Peters, and authors Patrick Lencioni, Dan Pink and Tony Schwartz. An impressive group, to be sure.

Like most compilations, this one is a mixed bag. There's a bit too much breahtless inspiration for me, but I'm someone for whom a little inspiration goes a long way. Dream big dreams! Pursue your passion! Believe in yourself! Speak out! Just do it! (Some of the contributors might want to think about switching to decaf.) Having said that, even as someone who's not a bigtime reader of self-help writing or business advice, I found lots to value here--ideas that were worth well more than the $20 price tag of the Kindle edition or $25 cost of the paperback.

A few of my favorite nuggets:

To tackle something most productively, you must begin in clear space. Physically, you need all your tools in order, plus an open table for spreading your raw elements and assembling structures. Psychically, you meed an empty head, clear of distractions and unfinished business, holding your attention hostage. - David Allen, The Strategic Value of Clear Space

Researchers have found a surprising link between daydreaming and creativity--people who daydream more are also better at generating new ideas. - Jonah Lehrer, Don't Pay Attention

There are countless hours scheduled for operations, sales, reporting, finance, efficiency gains and human resources--yet very few people actually schedule time to think, create and invent. -- Josh Linkner, What's Your Idea Schedule?

There's a major cultural shift happening. Because people are more connected than ever on the Web, we're going back in time and living under small-town rules....This is a monumental shift--we're now in a marketplace where every whisper about your business gets heard. - Gary Vaynerchuk, The Best Marketing Strategy Ever

These are just my own favorites; you'll discover others. The real genius of this book is the generosity behind it, and a business model that delivers the overwhelming majority of the revenues--that's revenues, not profits-- to charity.

Michael Bungay Stanier

Michael Bungay Stanier, the editor, says $20 from every sale will go to Malaria No More. ** That’s 100% of the Kindle price, and 80% of the print copy. (The remaining $5 covers production costs.) All the writers wrote for free, to their credit. The Domino Project isn’t taking any money from sales, either. Michael isn’t taking any money, and Amazon is a supporter, too, which is one reason why End Malaria is only available through Amazon.

“It’s an amazing business model,” Michael said, on a call yesterday, one that couldn’t have been arranged with a conventional publisher. He took on the job without pay, he explained, in order to live up to the message of his last book, which was called Do More Great Work.

Michael has also raised about $100,000 from corporate sponsors, including Ashley Sleep and HubSpot, all of which goes directly to Malaria No More. Media sponsors ranging from Huffington Post to The Onion have agreed to promote the book. So have the authors.

Very cool.

* I don’t get paid to be park of what The Domino Project calls its “street team.” The publisher sends me a free book, and when I am so inclined, as I was here, I help spread the word about the books.

** Another member of The Domino Project “street team” checked out Malaria No More on www.givewell.org, a website that assesses charities, and they are not rated. I emailed them and they told me that 84.7% of the money they raise actually goes to fighting malaria. That satisfies me.

Climate change is here, folks, and I’m not saying so because it’s hot outside. This is a big worry, or at least it should be.

But big problems create big business opportunities: A California biotech company called Arcadia Biosciences has set out to help farmers do their part to slow down the process of global warming and adapt to a resource-constrained world–by developing crop varieties that require less water, tolerate salty conditions and use less nitrogen fertilizer.

This photo shows two varieties of rice. On the left is rice engineered for nitrogen use efficiency (NUE) by Arcadia, on the right conventional rice. In laboratory tests, using typical applications of nitrogen fertilizer, the NUE rice, as it’s known, is substantially more productive. When you can grow more food using the same inputs of land, water and fertilizer, everyone–farmers, consumers, hungry people and anyone who cares about CO2 concentrations in the earth’s atmosphere–is better off.

So, at least, says Eric Rey, the founder and CEO of Arcadia. Others will disagree because Arcadia deploys genetic-engineering technology that some (many?) environmentalists oppose. But when we met last week in Washington, Eric told me that he considers himself an environmentalists and, in fact, it was his concern about disappearing species, pollution and climate issues that led him to start the company back in 2002.

The company’s purpose, Eric said, is to “use the the tools of plant biotechnology, and point them at saving the environment.” When developing a new crop variety, he said, “if we can’t put our fingers on an environmental benefit or a human health benefit, we won’t do it.”

“Agriculture has a huge environmental footprint,” he went on. “We have to optimize food production and minimize the impact of that production on the environment. I don’t think this is the only way to do it, but it’s one way and it’s valid and it’s safe.”

Eric Rey

Arcadia got its start when Eric, who is 55 and had worked at Calgene (creator of the infamous Flavr Savr tomato) met a free-thinking, left-leaning billionaire named John Sperling, who made a fortune in the for-profit education business and since then has used his money to promote animal cloning, human life extension, legalized marijuana, saltwater agriculture and shrimp farming in Eritrea. They got to talking about how genetically-engineered crops could benefit the environment, and Sperling became (and remains) a majority shareholder of privately-held Arcadia.

Since then, the company has made considerable progress in the slow-moving world of inventing, developing, testing and gaining regulatory approval for genetically engineered crops. It has about 85 employes, most of them researchers based in Davis, Ca. (where Eric earned a degree in plant science at the state university), and it has a crop in the field–a plant known as GLA safflower oil, whose seeds contain oil with as much as 40% gamma linolenic acid that is used in supplements and nutraceutical foods. “It’s basically a broad-purpose anti-inflammatory,” Eric said.

Its work on crops that use nitrogen efficiently could have a much broader impact. Nitrogen fertilizers generate about $60 billion in worldwide revenues, Eric said: “Nitrogen is the fuel of global agriculture.” Many farmers spend more on fertilizer than they do on seeds, so crops requiring less nitrogen can save them money. That’s the business case for developing NUE crops. “It’s kind of like a hybrid car of crops,” Eric said. “You can go just as far on half a tank of gas.”

Environmental benefits arise because much of the nitrogen now spread on fields is wasted. Some of it flows into rivers and streams and eventually causes algae blooms that create notorious “dead zones” in places like the Gulf of Mexico, and a small amount (estimated at 1-6%) is converted into nitrous oxide, a potent greenhouse gas, and released into the air.

Nitrogen-efficient crops could, in theory, be eligible for carbon credits if it can be shown that they reduce greenhouse gas emissions. Arcadia has an agreement with a provincial government in China to make its seeds available for free, in exchange for the right to sell carbon credits. “The carbon piece is very important to us,” Eric says.

Arcadia is primarily an R&D company–it identifies technologies, brings them closer to commercial application, takes them through regulatory processes and then licenses them to big seed companies. It has licensed its nitrogen-efficiency technology to such companies as DuPont for corn), Belgium-based SES Vanderhave for sugar beets and Limagrain, a French company, for wheat. Nitrogen-efficient rice, barley, canola and cotton are also being developed.

None of this is close to a sure thing, of course. All these crops require regulatory approval, which takes years. European regulators and consumers remain suspicious of genetically modified crops. And some people say the world already has plenty of food, and that the problem is inequality, not productivity.

What’s more, Arcadia has numerous competitors. “All the big guys have nitrogen efficiency programs,” Eric says.

That’s probably a good thing. Farmers are going to need all the help they can get adjusting to a warming world. So are the rest of us.

“Today’s food system is unfair, ineffective and operates beyond ecological limits,” Mark Lee says, via email.

“Unfair in that some 925 million are malnourished…

“Ineffective in that there are enough calories out there to feed everyone, but we fail to do so (and if we fail to do so for 7 billion, how will we cope with 9-10 by mid-century?)…

“Beyond ecological limits in too many ways too count – freshwater use, soil degradation, climate impacts, you name it.”

Mark is not an environmental activist. He’s the executive director of SustainAbility, a think tank and strategy consultancy that has worked with such food industry clients as Chiquita, Coca-Cola Kellogg’s, Mars and McDonald’s, Nestle, Starbucks and Unilever. He approached me because Sustainability recently released a report called Appetite for Change, about the food industry and how to fix it.

I’ve been writing a lot about food lately because it interests me, because food and agriculture matter a great deal if you care about climate or global poverty or health, and because there’s so much debate about what the path forward should be. Organics? Farmers markets? Genetically engineered crops? Vegetarianism? Local?

This 41-page report, based on interviews with about two dozen business people, environmental experts and government officials, finds an emerging consensus, inside and outside the industry, that “the food system needs to be dramatically transformed.” The report says:

We need a food system that produces enough, for everyone, within ecological limits, while treating all players fairly.

With a bit more specificity, SustainAbility defines a sustainable food system as “one that is reliable, resilient and transparent, which produces food within ecological limits, empowers food producers, and ensures accessible, nutritious food for all.”

But, while big companies and small are experimenting, sometimes creatively, with new approaches,  there’s no agreement on how to get from here to there.

I talked the other day with Mark and Jennifer Biringer, a SustainAbility director and an author of the report, and they pointed me to a few areas where business and environmental imperatives are coming into alignment.

To insure a secure supply chain, big companies are increasingly builder closer ties with small farms in poor countries, working with them to improve their environmental performance, their efficiency and their business viability.

Starbucks has worked for more than a decade with Conservation International to develop ethical sourcing guidelines that reward coffee growers who conserve water and energy and protect biodiversity. Mars is working with academic partners to sequence the cacao genome, hoping to improve yields and lift the standard of living for coffee farmers. (See my 2010 blogpost, The man who would save chocolate.) Costco has had a pilot program in which it sources fresh produce from smallholder farmers, such as green beans from Guatemala [PDF, download] for its U.S. stores.

And then, of course, there’s Walmart, which among other things, is seeking to buy more local produce for its stores. “I do see Walmart as a disruptor,” Jennifer said. The giant retailer is bringing pressure on food manufacturers to get a better handle on the environmental footprint and to drive transparency down their supply chain.

Companies that aren’t in the food industry stand to profit from some of these trends, the report notes. More than six million people in India, China and Indonesia have become subsribers to Nokia’s Life Tools [PDF, download], a subscription service designed for mobile phones in emerging markets that provides agricultural information (weather, market prices) as well as education and entertainment. IBM, which sponsored the SustainAbility report, along with Nestle and Sodexo, has a technology platform called Smarter Food that can trace food from “farm to fork” which both promotes food safety and environmental accountability.

One obvious problem with the food system, as the report notes, is that food policy and politics “are driven by who is in power” and  aren’t designed to promote sustainability or healthy eating. Experts interviewed by Sustainability

listed new and better policy as prerequisite to progress before closing. Distressingly, few are optimistic that improvements will come without major disruptions to the food system occurring first, sharing a perception that we likely will stretch the current system to (or beyond) its limit before acting.

For a variety of reason, the price of food at the supermarket doesn’t reflect its true cost. [See my 2010 blogpost, The high cost of cheap food] Farm price supports, cheap energy and cheap water all drive down the prices of commodity crops (corn, soy) and meat. Meanwhile, few subsidies go to vegetables and fruits. Farm subsidies and trade barriers also make it hard for farmers in poor countries to compete with those in the U.S. and EU. “Government does a huge amount to pick winners and losers,” Jennifer said.

In today’s New York Times, food writer Mark Bittman has a provocative article arguing that the U.S. should tax “bad” foods (like sugary sodas and fatty, salty fries) and use the money to subsidize fruits and vegetables and provide nutrition education. He quotes a study that found that

a penny tax per ounce on sugar-sweetened beverages in New York State would save $3 billion in health care costs over the course of a decade, prevent something like 37,000 cases of diabetes and bring in $1 billion annually.

I’m not inclined to favor more government intervention in markets–just the opposite–but this idea is worth considering, I think, because it’s a way of adjusting the price of food to reflect its true costs. [See my 2010 blogpost, The high cost of cheap food] Big companies, of course, hate the idea of a “junk food” tax. While Coca Cola and PepsiCo offer healthy options, they also benefit from corn subsidies and want to maximize sales of sugary soft drinks. The trouble is, particularly as medical expenses become socialized through Medicaid and Medicare, all of us are paying the costs of the obesity epidemic.

The food system is so broken that maybe it’s time to think about radical fixes.

Neil Bellefeuille

Today’s guest post comes from Neil Bellefeuille, co-founder and CEO of The Paradigm Project, which describes itself as a “social enterprise working to create sustainable social, economic and environmental value within developing world communities.” Neil and his partners started the venture in 2007; before that, he was president of Bulldog Drummond, a branding consultancy. One of his clients, World Vision, the big global charity, asked him to go to Africa with them and, he says, “that was really the start of my taking a look at how I could apply my skills to…finding ways to give back and create positive outcomes for the developing world.” That led him to find partners and create The Paradigm Project. Here’s some of what he’s learned so far:

You want to change the world? You want to create jobs? End poverty?

Give the corporate powers that be a profit motive: Profit from the poor. Unlikely as it sounds; business is the most effective and efficient way to mobilize capital to solve problems in our world.

Partly that’s because capital flows to profit-making enterprises. In 2009, Americans gave away $300 billion to charity. Not bad. But in that same year, about $2.5 trillion – almost 10 times as much – was invested in private equity funds. Far more was invested in stocks, bonds, mutual funds or banks, where most U.S. wealth resides. Imagine drawing even a small portion of that money into social enterprise in the developing world, to invest in businesses that create social outcomes AND a profit for investors.

We did. And we created The Paradigm Project to do just that.

When I met my partner, Greg Spencer–that’s Greg in the photo, above–in 2008, I wanted to change the way people looked at development work. My goal was to create a business that would help the poor and make money and thus would not be reliant on donor capital. I had no idea then that we would develop a business selling efficient stoves and water filtration products in some of the poorest parts of the world. What a wild ride it has been.

With very little experience in working with NGOs (non-governmental organizations) and even less experience doing business in Africa and other parts of the developing world, it was like being thrown into the deep end of a very deep pool. Amongst our staff, we’ve been attacked by giant camel spiders, made into honorary tribal elders, dined on goat cooked over open fires and walked dozens of miles carrying hundreds of pounds of wood to get a feel for what its like for our customers. All in the name of building a social business that delivers real results. And this is only just the beginning.

We launched in 2008 with a plan to leverage carbon offset revenue to finance early stage project development in Kenya. Our goal was to work with well-respected NGO partners like Food for the Hungry, World Vision  and the World Food Program on the ground to establish an efficient stove supply chain including local manufacturing and management. We thought we’d be lucky to sell 20,000 stoves in our first year of operation. Today we’re on track to deliver over 40,000 and our biggest problem is figuring out how to keep up with demand.

We charge $15 for a locally- produced efficient stove in Kenya, about 30% less than it costs us to make. We charge $30 for a high-quality imported stove at a subsidized cost as well. We make up the difference – and provide our investors with a profit — by monitoring the use of that stove and selling the carbon offsets that are generated by the reduction in cooking emissions. It’s amazing the amount of good a simple stove can create:

• $280 in family income saved that would otherwise be spent on purchasing fuel for cooking.

• 1300 fewer hours spent collecting fuel wood which can be used in more productive activities

• 64 trees saved from destruction for use as fuel wood or charcoal.

• Possibly the life of a mother or child saved from smoke inhalation or severe burns from open fires.

• 40% to 60% reduction in toxic emissions resulting in 7.5 metric tons of carbon offsets valued at $95—a 3x return on investment.

Could we be giving stoves away? Yes, we could. But that wouldn’t last. Even if we raised enough donor money to give everyone in Kenya a stove, where would they go to get a replacement when it wore out? Or repairs when it broke? Or training?

By selling the stoves, we can employ sales people and repair people and trainers and provide warranty service and incentivize local partners to stay in the market over the long run because the business provides income for them and their families. We create an industry serving a real need. And we offer a product and service that we can be sure is truly valued — otherwise no one would pay for it.

So where do we go from here? We have amazing early success in Kenya. Demand is nearly four times what we expected. Expansion into the rest of East Africa is next on our agenda, and we are planning similar project in Guatemala and Haiti. The problem is vast: it’s estimated by the UN Foundation that about 3 billion people cooking their meals over open fires. That’s a big number, but we’re committed to making a significant dent in that.

We think we can do it by drawing capital into the shallow end of the pool where it usually doesn’t swim. More investors, we hope, can be persuaded to invest in enterprises that deliver social outcomes and competitive returns. As others join us, we can have a big impact on global poverty.

Here’s a link to a video about our work.

Mikkel Vestgaard Frandsen

The Skype connection to Kenya crackles. Mikkel Vestergaard Frandsen, the 38-year-old CEO of a Swiss company that bears his family name, tried to make himself heard. His excitement is palpable.

“Watching this unfold is crazy,” he tells me. “There are so many things we’re trying out here, things we’ve never done before, things that no one has ever done before.”

Vestargaard Frandsen is a Swiss for-profit company that’s in business to save lives in the global south. Its products include LifeStraw, a water filter and PermaNet, a long-lasting bednet to protect people from malaria.

Ordinarily, it sells these products to aid organizations and governments. Then they’re given to people in need. This time, Vestergaard is trying something different: It’s directly giving away about 1 million LifeStraws, at a cost of nearly $30 million, mobilizing thousands of local people to do so, tracking results carefully and expecting to be paid back in the form of carbon credits. Mikkel’s right–this has never been done before.

How this came to pass is interesting. Founded in 1957, family-owned Vestergaard Frandsen originally produced material for work clothes. About 20 years ago, it started a line of relief products like blankets and tents. By 1997, when Mikkel became CEO, the company had phased out conventional textiles to concentrate on relief aid products.

“We’re fortunate to be able to build a business around the opportunity to save lives,” he says.

Mikkel got especially excited about a simple water filter that the company developed as part of an effort led by the Carter Center to fight guinea worm, a waterborne infection that afflicted millions of people in 20 countries in Asia and Africa.

“It’s a pretty nasty thing,” Mikkel told me. “The worm gets into your body, and it grows to about a meter long, and then it has to get out of your body somehow.” We’ll spare you the sickening details.

Today, thanks in part to the filters his company produced, the disease has been confined to four countries and is on the verge of disappearing. “It will be the first disease eradicated without a vaccine,” Frandsen said.

Lifestraw Family

From there, the company went on to develop portable LifeStraw filter and then LifeStraw Family, a complimentary water purifier designed for use by families at home that cleans waters to EPA standards and lasts long enough to filter 18,000 liters. LifeStraw Family is typically sold wholesale for about $25.50.

Back in September, 2008–on September 15, to be precise–Vestergaard Frandsen launched a campaign to give away a product called CarePack in western Kenya. About 50,000 people who came in for HIV testing were rewarded with CarePacks which including “60 male condoms, an insecticide-treated bednet, a household water filter for women or an individual filter for men, and for those testing positive, a 3-month supply of cotrimoxazole and referral for follow-up care and treatment.” I mentioned the start date of September 15 because of something else that happened that day: Lehman Brothers went bankrupt, setting off the global recession. Mikkel realized afterwards that raising funds from donors and governments for his company’s products was about to get a lot harder.

That’s when the company turned to carbon markets, in this case the voluntary markets. In these markets, companies or individuals buy credits to offset their CO2 emissions.

LifeStraw qualifies for carbon credits, it turns out, because when people in poor rural areas like western Kenya have a way to purify their water, they no longer have to gather and burn firewood to boil it. The program was approved for voluntary carbon credits under the Gold Standard certification scheme. J. P. Morgan Chase is among the first buyers of credits, and will sell them to its clients.

To qualify for credits, though, the use of the water filters has to be documented and carefully monitored. So Vestergaard Frandsen has hired and trained 4,000 community health workers and another 4,000 drivers to give the filters away over the next five weeks. Each is equipped with a smart phone to provide GPS coordinates and photos of each family using a LifeStraw. And the company will hire hundreds more people to make sure the filters keep working–because its revenues depend on proving that it is offsetting carbon.

Can you see why Mikkel is excited? The Carbon-for-Water program gets clean water to hundreds of thousands of people and protects their lungs from the indoor air pollution created when they burn wood. It creates jobs (albeit temporary) and income in a poor country. It brings carbon finance to Africa, which so far has received less than 5 percent of all carbon finance revenues. It’s transparent and accountable, unlike many aid efforts.

And if all goes well, it can get a lot bigger–because Vestergaard Frandsen expects to profit.

“The carbon-for-water campaign could be a game-changer if we can take this to scale,” Mikkel said. We’ll see.