Mark Tercek: The business case for nature

April 7, 2013

Tercek-Adams-Natures-FortuneThe value of nature is astonishing, when you stop and think about it. Marshes protect coastlands. Urban trees clean the air. Forests provide timber. Oceans give us seafood.  Snow-capped mountains store drinking water. Some might say nature is priceless.

Not Mark Tercek, the former investment banker at Goldman Sachs who became CEO of The Nature Conservancy in 2008. His new book, Nature’s Fortune: How Business and Society Thrive by Investing in Nature (Basic Books, 2013), argues that nature provides enormous economic benefits to society, business and consumers, and that, if we can figure out how to value and pay for those benefits, we can slow down and even reverse the degradation of nature that threatens our well-being.

It’s an important and potentially controversial argument, as Tercek acknowledges. While the 20th century conservation was all about protecting nature from people, Tercek and some of his allies in the environmental movement would like the future to be about protecting nature for people. If nothing else, he argues, recognizing the economic value of nature will expand the base of the environmentalist beyond the white, college-educated and relatively affluent folk, the backpackers and hikers and birdwatchers at its core. [click to continue...]

Filed Under: Books, Climate Change, CSR, Environment, Leadership, Media, NGOs, Politics, Sustainability, Water

In defense of environmental extremism

March 21, 2013
David Brower and friends

David Brower and friends

The other night, I saw A Fierce Green Fire, a documentary history of the environmental movement, as part of the excellent DC Environmental Film Festival. The movie was OK, worth seeing, but not great, a bit PBS-like in its sweep.  By trying to cover a  lot, the filmmakers mostly skim the surface: Here’s Sierra Club  founder John Muir, there’s Rachel Carson and Silent Spring, remember when Jimmy Carter put a solar heater on the White House roof, say hello to Stewart Brand and Bill McKibben, meet Wangari Maathai, and let’s not overlook environmental justice and the Copenhagen climate talks, and wasn’t that Buckminster Fuller? Nor does the film look critically at environmentalism; it’s narrated by Robert Redford, Ashley Judd, Van Jones, Isabel Allende and Meryl Streep, which pretty much tells you all you need to know.

FierceGreenFire_posterHaving said that, the film, sometimes by design and sometimes inadvertently, manages to deliver a useful reminder about radicals and rabble-rousers: They are often the ones who drive change. Had Barry Goldwater been an environmentalist, he might have said that extremism in defense of the earth is no vice and that moderation, when it comes to climate change, is no virtue. The environmental movement’s heroes, at least in this telling, are David Brower and Lois Gibbs and Chico Mendes and Greenpeace, and not those who work inside the Beltway or travel to UN conferences. At the very least, grass-roots, bottom-up activism created the conditions that drove change in Washington.

Consider, for example, these stirring words from a presidential State of the Union address, which is (too) briefly excerpted in the movie: [click to continue...]

Filed Under: Books, Climate Change, Environment, NGOs, Politics Tagged With: , , , , , , , ,

An odd couple? HR and sustainability

March 19, 2013

savitz(5)Today’s guest post comes from Andrew Savitz, the author of a new book called  Talent, Transformation and the Triple Bottom Line: How Companies Can Leverage Human Resources to Achieve Sustainable Growth (Wiley 2013). As you can guess from the title, Andy argues that employees are the key to creating sustainable companies, but that they–and their colleagues  in human resources–are often overlooked when companies embark on environmental programs. I think he’s onto something. I’ve long thought that the single biggest business driver of corporate sustainability initiatives is the way they help better companies attract better people and motivate the ones they have.

Andy has been his career working with companies on social and environmental issues. A lawyer by training (and before that a Rhodes scholar at Oxford), Andy has been a congressional staffer, the general counsel for the Massachusetts Office of Environmental Affairs and head of the environmental advisory practice at PriceWaterhouseCoopers (PwC). Since 2005, he has led a consultancy called Sustainable Business Strategies.

Here’s our online conversation:

Marc: You say that you’ve written the book “in large measure to bridge the gap between sustainability and HR.” HR? Really? Why do we need human resource people to get involved with sustainability? They don’t know anything about carbon emissions, say, or LED lighting, do they? [click to continue...]

Filed Under: Books, CSR, Environment, Leadership, Media, Sustainability, Workplace Tagged With: , , , , , , ,

John Mackey: Hippie, libertarian, CEO

February 12, 2013

imageThe top executives of big publicly-traded US companies, in my experience, tend to be rather drab fellows (nearly all are men) who choose their words carefully, hew carefully to the middle of the road in their thinking and rarely say (or do) anything outrageous.*

Not John Mackey, the founder and co-CEO of Whole Foods Market. For better and occasionally for worse, Mackey is an original, who doesn’t run his company by any conventional management book.

Instead, he has written his own book, called Conscious Capitalism: Liberating the Heroic Spirit of Business, with co-author Raj Sisodia, an academic affiliated with Bentley University. It’s a good read, especially because of the insights it delivers into the unusual culture and practices of Whole Foods, as well as into Mackey’s own evolution.

Some examples from the book: [click to continue...]

Filed Under: Books, Business Ethics, Climate Change, Consumption, Economics, Environment, Food, Leadership, Media, Politics, Sustainability, Transparency, Uncategorized, Workplace Tagged With: , , ,

Reed Hundt and Blair Levin: Grow the economy, save the climate

November 26, 2012

Today’s guest column comes from Reed Hundt and Blair Levin, authors of a new ebook called The Politics of Abundance:  How Technology Can Fix the Budget, Revive the American Dream, and Establish Obama’s Legacy, available at www.politicsofabundance.com and via Amazon and iTunes. Reed Hundt was chair of the Federal Communications Commission and Blair Levin was his chief of staff from 1993 through 1997, when the government’s telecom policies helped spur the Internet boom; they see similar opportunities now in broadband and energy. Hundt is now the CEO of the Coalition for Green Capital, a non-profit that designs financing support for energy projects. Blair (who is a friend) is CEO of Gig U, a non-profit engaged in broadband projects. They’ve got some good and (relatively) simple ideas for spurring the green economy.

Based on existing trends in global warming and life expectancy, every American at or under age 65 is likely to live long enough to see the world devastated by floods, droughts, storms, starvation, extinction of species, and other iterations of the apocalypse.

Despite occasional eruptions of denial in some quarters, most business and government leaders in the United States and virtually all in other nations agree that greenhouse gases, spewing from smokestacks and exhaust pipes, are warming the planet to the point where these apocalyptic outcomes are probable.

The great news is that in the first term of the Obama Administration federal and state governments showed clearly how any country can halt these murderous emissions, and at the same time stimulate sustainable economic growth.

By insisting that ARRA, the recovery spending act passed in February 2009, provide tax credits used for building a new energy system, President Obama helped the wind and solar electricity generation industry double their share of the market in less than four years.

Then the Administration re-organized and increased research and funding of sustainable energy technologies. As a result, innovators are delivering Moore’s Law (price-performance doubling every couple of years) results in batteries, grid efficiency, and other areas.

California has put into place laws that cap emissions, require rapid market share shift to renewables, and encourage investment in distributed rooftop solar. So far the economic impact is good and popular opinion supportive.

Connecticut created a state green bank that can provide low-cost capital for renewables and efficiency investment. As a result, clean electricity can be provided to consumers at below the current and projected prices for non-sustainable electricity generation, and the money contributed by the state green ban to jumpstart private projects will be paid back over time.

Most states have passed laws requiring a shift of major market share to renewable generation sources. These renewable standards permit utilities to phase out dangerous emissions-intense generation rapidly, while bringing new investment into local economies.

Reed Hundt

Technological breakthroughs have led to the discovery of vast resources of natural gas deep inside American soil. The electricity generation industry can switch from using coal to natural gas and deliver electricity cheaper, with much reduced emissions. Within the second term of the Obama Administration natural gas generation can increase its already large share of the market by fifty percent – without any new government funding. [click to continue...]

Filed Under: Books, Climate Change, Economics, Energy, Environment, Politics Tagged With: , ,

Robert Rubin, crony capitalism and an argument for a populist, pro-market agenda

September 1, 2012

No one embodies the dangers of crony capitalism more than Robert Rubin. I was reminded of this when reading a provocative new book called A Capitalism for the People: Recapturing The Lost Genius of American Prosperity by an economist named Luigi Zingales. It’s an excellent read, a populist screed that will resonate with Occupy Wall Street, the Tea Party and anyone who worries that corporate power is deployed in Washington to benefit the well-to-do at the expense of most everyone else.

Rubin’s story illustrates the trouble with the unholy alliance of big business, big government and wealthy elites that rule today’s Washington. Few who travel the Amtrak corridor have a more elite pedigree: An Eagle Scout, Robin’s resume includes a Harvard B.A., a Yale Law degree, a brief stint as a Wall Street lawyer, a top job at Goldman Sachs, seven years in Washington as an economic advisor and Treasury Secretary to President Clinton, followed by a triumphant return to Wall Street, as a director and chair of the executive committee at Citigroup.

As Zingales tells the story, Rubin during his years in Washington was a leading advocate for financial bailouts, beginning in 1994 when the collapse of the peso jeopardized Mexico’s ability to repay big lenders including Goldman and Citi. Mexico avoided default but, as Zingales writes, “this move eliminated fear among lenders, and fear is an essential element in financial markets: it disciplines financial decisions.” To function properly, market capitalism needs to be about losses as well as gains, a lesson any investment banker should understand. But Rubin went on to support IMF bailouts for Thailand, South Korea, Indonesia and Brazil, each of which shielded US lenders from losses–emboldening them to take future risks as they came to believe, correctly, that governments would not permit them to take heavy losses. Here were the beginnings of “too big to fail.”

Zingales has a nice analogy about bailouts, comparing them to grandparents who spoil their grandkids when they parents want to discipline them:

Grandparents have an incentive to spoil their grandchildren, since they benefit from the grandchildren’s gratitude and from the momentary peace–but they are unlikely to suffer the long-term consequences of the kids’ bad behavior (partly because they aren’t around as much, and partly because they die sooner). In much the same way, policy makers are happy to bail out firms and countries because they benefit from the momentary improvement in the economy and from the gratitude of saved business–but they’re unlikely to suffer the long-term consequences because they will be out of office by the time the perverse results occur.

Meantime, Rubin opposed other efforts to rein in the banks. Along with Alan Greenspan and Larry Summers, Rubin beat back efforts by Brooksley Born, the head of the Commodity Futures Trading Commission, to regulate the over-the-counter derivatives, including the credit default swaps that later contributed to the 2008 financial crisis. Rubin and Summers also argued successfully for the repeal of the Glass-Steagal rules that for the most part prohibited banks that held government-insured deposits from engaging in risky and speculative investments.

His work done, Rubin exited the government for Citigroup from which he earned $126 million during the 2000s. During the 2008 financial crisis, Citi was favored with a $25 billion infusion of equity under TARP, $20 billion of equity from the Treasury and another $306 billion more in government guarantees of its so-called toxic assets. Citi never sleeps, the slogan goes, but its directors, including Rubin, evidently did, as the Wall Street Journal noted. Or at least he slept until the time came to seek a rescue from Washington.

In another land–one where the press was more aggressive, and power brokers like Rubin were held accountable for the damage they help to cause–this set of actions might send a man into hiding, or at least retirement. Not so here–he remains a respected voice in Washington and a Harvard trustee. Indeed, Rubin has now earned honorary degrees from Harvard, Yale, Penn and Columbia, fully half of the schools in the Ivy League. (Why Princeton, Dartmouth, Brown and Cornell have passed him over, so far, is anybody’s guess.)

I write this not to single out Rubin, who quite probably believed he was doing the right thing, as did his successors at Treasury, Hank Paulson (who I wrote about in 2008 and came to respect back) and Timothy Geithner. But, as Zingales argues, many of us who believe that capitalism and robust markets and  competition can be powerful forces for good have become complacent about the dangers of well-meaning but corrupt elites who have rigged the system for their own benefit — with corporate bailouts, vast expenditures on lobbying (a staggering $3.3 billion in 2011), regulations that protect entrenched interests, tax policy that favors the rich, the ever popular “public-private partnerships” that transfer wealth from public coffers to private owners and an ever-expanding array of market-distorting subsidies for farmers, manufacturers, automakers, oil and coal companies and, yes, the wind and solar power industries, too. [click to continue...]

Filed Under: Books, Business Ethics, CSR, Economics, Politics Tagged With: , , , , , ,

Tim Mohin: Changing business from the inside out

July 30, 2012

When I went to college, people with a strong social conscience went into politics or government, joined the Peace Corps, taught school, or became public-interest lawyers or doctors– in other words, they did just about anything but go into the business world. That’s no longer true, thank goodness. Today’s students understand that business can be a force for good and my  friend Tim Mohin — we serve together on the board of Net Impact — has written a new book called Changing Business From the Inside Out: A Treehugger’s Guide to Working in Corporations that helps business people, as well as students, understand how they can have a positive impact inside corporate America. Tim, who is currently direct of corporate responsibility at chip-maker AMD, previously worked on social-responsibility issues at Apple and Intel. His book has been heralded as “essential reading for anyone who wants to build a meaningful career”  by Aron Cramer, the CEO of Business for Social Responsibility. Here is a guest post from Tim about that offers a sneak peek at the book.

Like jumbo shrimp or military intelligence, “corporate responsibility” is considered an oxymoron by  many. People are skeptical of corporations and with good reason. Massive corporate scandals ranging from the 2008 mortgage meltdown, to the BP oil spill, to the recent headlines about Wells Fargo and Barclay’s have left a trail of destruction. The cost to repair the damage has been borne by society in the form of taxpayer-funded bailouts and environmental cleanup. Growing distrust in corporations boiled over last fall, sending young people into the streets in the Occupy Wall Street movement. So, at a time when trust in corporations has reached an all-time low, why is interest in corporate responsibility at an all-time high?

Even before the Occupy protesters set up their camps, corporate behavior was under intense scrutiny.  Regulations like “Sarbanes Oxley” and “Dodd-Frank,” required greater levels of transparency, a trend that has been fueled by social media and the Internet.  For more than a decade, companies in all industries have voluntarily published corporate responsibility or sustainability reports. CorporateRegister.com allows you to search 41,238 corporate responsibility reports across 9,153 companies, a number that has been steadily increasing.

Maybe there is a cause and effect here. The corporate scandals of the past have shown by painful example, just how quickly a company’s reputation, and brand value, can be damaged. Company employees, customers and shareholders know more, and increasingly care more, about corporate behavior.   So in today’s world, smart business leaders know that investing in ethical behavior is money well spent.

More important, I believe, is the need of every company to attract and engage talent.  A new younger generation of leaders is rising in corporate America,  and many of them bring social and environmental values to the job and will only work for responsible companies.

My new book, Changing Business from the Inside Out, delivers practical advice to this new group of committed business people. They recognize the power of business to drive positive change in the world. Changing Business From the Inside Out is “field guide” of practical tips, hard-won wisdom and leading edge concepts for people interested in a career in corporate responsibility. Here are the top five tips from the book: [click to continue...]

Filed Under: Books, Business Ethics, CSR, Leadership, Sustainability Tagged With: , , , , ,

Scott Jurek (and other vegans I like)

June 10, 2012

Scott Jurek at Pacers in Clarendon

“Believe it or not, there were two things I used to hate–vegetables and running,” Scott Jurek says. ”

Which only goes to show you how much people can change.

Jurek is a vegan and one of the world’s all-time greatest ultra-runners — “ultras” are races longer than marathons, often much longer. Scott has won the world’s most prestigious ultras many times, including seven consecutive victories in the Western States 100-mile Endurance Run. In 2010, he set the U.S. record for most miles run in a 24-hour period by covering 165.7 miles, which is more than six marathons. Think about that for a moment.

The other night, Scott led a group of several dozen runners (including me) on a 3-mile jog from The Nature Conservancy headquarters in Arlington, Va., to Pacers running store in Clarendon, to celebrate the publication of his new book, Eat and Run: My Unlikely Journey to Ultramarathon Greatness. I’ve just finished the book–it’s an autobiography, a guide to running, a recipe book and, more broadly, a story about the importance of pursuing your goals, whether or not you achieve them.

Eating and running, he writes, are “simple activities, common as grass. And they’re sacred.”

Pilgrims seeking bliss carry water and chop wood, and they’re simple things, too, but if they’re approached with mindfulness and care, with attention to the present and humility, they can provide a portal to transcendence. They can illuminate the path leading to something larger than ourselves.

This isn’t to say that running will solve the world’s problems, or yours. But, as Scott writes

Move your body and fill it with healthy food and you will be transformed.

I’ve met Scott a couple of times now, and I have to say that I am impressed, not so much with his extraordinary accomplishments as a runner (which strike me as near-superhuman, and therefore not relevant to the rest of us)  but with his thoughtfulness (he’s smart, inquisitive and well-read) and  his purposeful approach to life, notably his plant-based diet. The fact that he’s a world-class runner and a vegan may well be coincidental–though I don’t think that’s so–but at the very least he is proof that a plant-based diet is no obstacle to good health and athletic stardom. [click to continue...]

Filed Under: Books, Climate Change, Environment, Food, NGOs Tagged With: , , , , ,

Food for thought from Tyler Cowen

May 6, 2012

This month, just for fun, I’m doing to devote most of my writing to food and sustainability. My plan is to write about organic vs. conventional yields, a controversy around Fair Trade, the giant candy company Mars, clean cooking fuels in Mozambique and the goings-on at a pair of upcoming events where I’ll be moderating: the 2012 National Policy Conference of CropLife America, about “The Politics of Food and the 2012 Farm Bill,” and the always-fabulous Cooking for Solutions extravaganza at the Monterey Bay Aquarium.

Today, though, I want to tell you about a quirky, provocative and enjoyable book called An Economist Gets Lunch: New Rules for Everyday Foodies (Dutton, $26.95), by Tyler Cowen.

A free-market economist who teaches at George Mason University, Cowen writes for a broad audience. His blog, MarginalRevolution, is extremely popular. He contributes  to the Sunday NY Times business section. His interests are wide ranging (see this Grantland column on the end of football) and he seems to read every nonfiction book that matters.  His short ebook, The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, is very smart, and a bargain at $3.99: It argues that what ails the US economy is not merely the aftershocks of the 2008 financial crisis or the distortions caused by the collapse of the dot-com bubble but a more fundamental slowdown in innovation that dates back for 40 years.

In An Economist Gets Lunch, Cowen muses about loosely-connected topics, ranging from how American food got bad (it’s not what you think) to the mysterious differences between Mexican food in El Paso and Ciudad Juarez, its neighbor across the border (US regulators comes into to play) to what happened when he spent a month shopping at an Asian supermarket called Great Wall in Merrifield, VA (he ate healthier, fresher, cheaper foods).

Tyler Cowen

If, like me, you’re interested in the social and environmental impact of the food, you’ll want to read Cowen’s defense of agribusiness, technology and global supply chains. He rejects the argument summed up by the title of the movie Food Inc. that American food is bad for us and bad for the planet because of the commercialization of food. While Cowen is no fan of donuts or McDonald’s, he notes that by the end of the 20th century “more people ate well than ever before” and “the American poor are more likely to be obese than starving.” He writes:

Cheap, quick food–including its embodiment through our sometimes obnoxious agribusiness corporations–is the single most important advance in human history. It is the foundation of modern civilization, and the reason why most of us are alive.

The reasons why American food isn’t very good, he says, have less to do with business than with us, i.e., our government and culture. Prohibition all but killed fine dining because restaurants make more money from liquor than from food. Anti-immigration policies “kept American food away from its best and most fruitful innovators for decades.” Because “Americans spoil and cater to their children,” he argues, we grow up eating food that is “blander, simpler and sweeter” than food elsewhere:

[click to continue...]

Filed Under: Books, Climate Change, Consumption, Economics, Environment, Food Tagged With: , , , , ,

Here comes the sun….not

April 8, 2012

Germany, once the world’s leading market for solar power, is pulling back its subsidies.

Q Cells, once the world’s largest solar company, just went bankrupt.

This isn’t happy news. If the country that birthed the Green Party cannot sustain its support for solar, what does that tell the rest of us?

It should tell us that it’s time (actually way past time) to get serious about energy and climate policy.

This week, as I followed the news from Germany, I talked with a couple of energy-policy experts who I respect–Jesse Jenkins of the Breakthrough Institute and Gernot Wagner of the Environmental Defense Fund. I also watched an interview (below) with Bill Gates from the Wall Street Journal’s Eco-nomics conference. They disagree about some specifics, but they all agree that the US needs to get a lot smarter about how to drive a transition to low-carbon energy. So let’s try to see what we can learn from Germany, and the rest of Europe.

Perhaps the most obvious takeaway is that we should not place expensive bets on any one solution. That’s what the Germans did, with generous subsidies in the form of a feed-in tariff for solar. Even though the costs of solar have dropped dramatically, the subsidies were not sustainable. Remember when people said nuclear was too cheap to meter. Solar PV is too costly to subsidize on a scale that matters. [click to continue...]

Filed Under: Books, Climate Change, Economics, Energy, Environment, Politics, Sustainability Tagged With: , , , , , , ,
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