Bill Gates with farmers in India

The debate over biotech crops has become predictable.

In his 2012 annual letter from the Gates Foundation, Bill Gates, who has a near-religious faith in technology and innovation, argues that an “extremely important revolution” in plant science, i.e., genetically-engineered crops, can help farmers in poor countries by giving them access to new varieties of crops that will better resist disease and adapt to climate change.

Days later, the Center for Food Safety, a Washington watchdog group and persistent critic of Big Ag, pushed back, saying that biotech crops had failed to deliver on their promise to alleviate hunger, and that Gates would do better to support low-cost “agroecological techniques” that don’t depend on patented, genetically-engineered seeds.

The conflicting claims and supporting data are hard to sift through. Will disease-resistant biotech cassava answer the prayers of Christina Mwinjipe, a farmer in Tanzania, whose crops are threatened by diseases, as Gates writes? Or will patented genetically engineered crops prove disastrous for the 1.4 billion farmers in  the global south who now save seeds from one season to the next, as Andrew Kimbrell, executive director for the Center for Food Safety, argues?

The voices of farmers are rarely heard in these debates. (They’re probably working too hard.) But data released this week indicates  farmers, through their actions, are voting for biotech crops.

Last year, farmers planted an additional 12 million hectares of biotech crops, an increase of 8 percent over 2010, according to the annual biotech crop report of the ISAAA (International Service for the Acquisition of Agri-biotech Applications).

Most of that growth — 8.2 million hectares — came from the developing world, lead by Brazil and  India, the report says. The growth rate for biotech crops in developing countries was 11 percent, twice as fast and twice as large as industrial countries at 5 percent or 3.8 million hectares.

“Unprecedented adoption rates are testimony to overwhelming trust and confidence in biotech crops by millions of farmers worldwide,” said Clive James, the report’s author, in a statement. It must be said that James is an unabashed supporter of biotech crops but as best I can tell, his numbers haven’t been challenged.

Why do more farmers every year plant biotech crops? Critics of genetically-modified crops will say they are tricked into it by marketing or lack of knowledge or short-termism, and it’s certainly true that the popularity of a product is not a reliable indicator of its value. (ABBA sold more records than the Rolling Stones. People smoke cigarettes.) But if biotech crops didn’t make farmers more productive, or save them time or money, would they spread around the world as consistently as they have?

James writes: “There is one principal and overwhelming reason that underpins the trust and confidence of risk-averse farmers in biotechnology – biotech crops deliver substantial, and sustainable, socio-economic and environmental benefits.”

The top five countries that have embraced biotech crops–the US, Brazil, Argentina, India and Canada–each planted more than 10 million hectares of the crops. Of the 16.7 million farmers who grew biotech crops, about 14 million were small, resource-poor farmers in China and India, most of them planting pest-resistant Bt cotton. In Africa, three countries–South Africa, Burkina Faso and Egypt–have commercialized biotech crops, and others, including drought-tolerant maize, are being tested.

In his letter, Gates argues that not nearly enough agricultural research is being done:

Given the central role that food plays in human welfare and national stability, it is shocking—not to mention short-sighted and potentially dangerous—how little money is spent on agricultural research. In total, only $3 billion per year is spent on researching the seven most important crops…Very little of the country and private spending goes toward the priorities of small farmers in Africa or South Asia.

Andrew Kimbrell

But critics like Andrew Kimbrell says the biotech industry has failed to deliver on its promise to feed the world:

The biotech industry has exploited the image of the world’s poor and hungry to advance a form of agriculture that is expensive, input-intensive, and of little or no relevance to developing country farmers.

The debate will rage on. Meanwhile, a campaign is underway to require the FDA to label genetically engineered foods. Supporters of labeling, most prominently Gary Hirshberg of Stonyfield Farms, say we have a right to know what’s in our food: “Without a requirement to label foods containing these ingredients, we are forced to be guinea pigs in a giant experiment involving our health and the environment.”

By contrast, in his book Whole Earth Discipline: An Ecopragmatist Manifesto, the veteran environmentalist Stewart Brand wrote:

I daresay the environmental movement has done more harm with its opposition to genetic engineering than with any other thing we’ve been wrong about. We’ve starved people, hindered science, hurt the natural environment and denied our own practitioners a crucial tool.

Your thoughts?

[Disclosure: I'm paid to moderate the annual policy conference of Croplife America, a trade association of big agricultural firms, which sell biotech seeds.]

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.

Last year, Google invested more than $915 million in clean energy projects–solar, wind and transmission.

That’s a lot of money, even for Google, which had $38 billion in revenues in 2011. The investments don’t appear to be core to the company’s mission of organizing information, and they have attracted criticism, as well as some careless reporting, implying that the Internet giant is exiting the alternative energy business.

Does Google have an energy policy? Does it need one?

To find out,  I recently went to see Rick Needham, Google’s director of green business operations, at the company’s fabled headquarters (well, fabled for a 13-year-old company, anyway) in Mountain View, CA.

I came away not merely persuaded that Google’s energy investments make sense, but thinking that other companies that consume lots of electricity and have a pile of cash on their balance sheets  — Apple, Microsoft and GE come to mind — should consider deploying some of their cash in the clean energy sector.

Clean-energy investing isn’t philanthropy for Google. It’s business. In fact, it’s a classic double-bottom line investment, one that is intended to deliver environmental as well as financial benefits.

“We originally came at this by asking how we can make ourselves a more sustainable company,” Needham told me. But Google executives have come to believe that the company can generate  healthy, long-term returns by investing in wind farms, utility-scale solar plants and even solar photovoltaic panels on the rooftops of homes and businesses. “It’s a way of helping us to diversify our cash, put it into businesses that can earn good returns and that aren’t correlated to other investments,” Needham said.

Rick Needham

Needham, who is 41, has an interesting background. He’s a graduate of the US Naval Academy, has a master’s in aeronautical engineering from MIT and an MBA from Harvard. He spent eight years as a submarine officer, and then worked for Dean Kamen at DEKA Research on a project to develop a cleaner burning combustion engine. He’s been with Google since 2008.

Press reports last fall indicated that Google was dropping its clean-energy initiatives. Wrong. What happened was that the company shut down a small group of engineers who were researching solar power, among other things. The company is still working aggressively on data-center efficiency, procuring clean power for its data centers and investing in clean-energy projects elsewhere, as Needham explained.

These are big investments. Google put $100 million into Shepherd’s Flat, an Oregon wind farm that is expected to be the world’s largest, with 845MW of capacity. The company put $168 million into the Ivanpah Solar Electric Generating System, a solar thermal plant being operated by BrightSource Energy. It has invested in distributed, rooftop solar, through a $280 million project with Solar City and a $75 million fund with Clean Power Finance. Most recently, it invested $94 million, alongside private equity fund KKR, in a portfolio of four solar PV projects being built by Recurrent Energy.

Google isn’t betting on any one kind of renewable power because its executives believe that wind, solar thermal and solar PV all have a role to play in generating electricity. “The source of energy in the future is going to be clean energy,” Needham said, but no single source will dominate. “You wouldn’t put a solar on the windy planes plains of North Dakota if you could put a turbine there,” he noted.

While clean energy deployment still depends on government subsidies, he said: “We’re getting to the place where the technology will allow you to have a low cost of power.
Costs of wind turbine have come down. Costs of PV have dropped, just 40 percent in the last year. It’s amazing how the cost curves have come down.”

All of Google’s large-scale energy investments (as opposed to its smaller, venture-like bets on startup companies) have two things in common. First, they are tied to specific projects which should deliver a steady stream of long-term revenues; utilities, businesses or individuals (in the case of rooftop solar) have agreed to purchase the power that these projects produce for a decade or two. Second, they are tax equity investments, under which the lenders–Google in this case, but typically big financial institutions–invest in renewable energy projects and become eligible for credits that offset their federal corporate tax obligations.

Tax equity investments are important to the future of renewable energy because other federal subsidies, notably a U.S. Treasury cash grant, have expired or are in danger of being phased out. According Bloomberg New Energy Finance, which researched tax equity finance for the Reznick Group, a big accounting and tax firm with a clean energy practice, the wind industry alone will require about $2.4 billion of third-party tax equity financing in 2012. The Bloomberg report [PDF, download] says:

Incorporating other renewable generation sectors, the total tax equity financing need could be more than $7bn. That requirement exceeds the investment appetite of the established tax equity providers, according to a clean energy trade group. Yet there is a vast pool of potential incremental tax equity supply: the 500 largest public companies in the US alone paid $137bn in taxes over the past year.

This is where Google is filling an important financial gap. Other companies could, too. Apple recently reported eye-popping earnings which left it with $97 billion cash and short-term investments (although much of it is parked overseas). GE has $78 billion. Toyota has $48 billion. Microsoft has $43 billion. Here’s a list from the WSJ of the companies with big cash hoards.

Solar panels at a Recurrent Energy project

Interestingly, Google had a partner in its most recent clean energy investment: KKR, the big private equity firm,  formed a new venture called SunTap to invest in US solar projects, including the projects being developed by Recurrent Energy in northern California. That’s because these deals make financial sense, as the Bloomberg New Energy Finance report says:

For relatively good but not necessarily exceptional renewable projects, the internal rates of return (IRR) and net present values (NPV) for most of these structures can meet hurdle rates for both developers and investors.

So why aren’t more companies investing in clean energy? Hard to say. Maybe they’re risk averse, or they find it hard to think outside the box. Maybe they’re saving their cash for acquisitions, or hoping that interest rates will rise.

For his part, Needham says about Google: “We’re lucky to be working at a company that instead of asking why, asks why not?”

Have consumers ever been more powerful than they are today?

A Facebook posting led thousands of people to move money out of big banks and into credit unions. When customers revolted, Verizon dropped plans to charge a $2 “convenience fee” to pay bills online. A petition at change.org led to Bank of America back off a scheme to charge customers for using their debit cards.

“It’s a great time to be a citizen,” says Brent Schulkin. “It’s a really bad time to be a failed institution.”

Schulkin, who is 31, is the founder of Carrotmob, a startup that aims to use the power of consumers to do good. Instead of boycotting or protesting companies for missteps (or downright bad behavior),  Carrotmob organizes campaigns in which people offer to spend their money to support a business, and in return the business agrees to take an action that the people care about. It’s the opposite of a boycott, and it’s called Carrotmob (not to be confused with the comedian Carrot Top) because it uses a “carrot” instead of a “stick” to spark change.

Carrotmob in Sydney, Australia

You can think of Carrotmob as another way to drive sustainability by using social media. The idea has been kicking around Schulkin’s head since 2003 when he was an undergrad at Stanford. As it evolves, it is likely to look more like  Groupon (which uses the power of collective purchasing to drive discounts) or Kickstarter (where people can come together to raise money to support a project) while tapping into some of the frustrations that energized OccupyWallStreet.

“There are a huge number of people today who look at the machinery that makes our society work, and they think it’s broken,” Schulkin says, and he’s hope to channel their energy into fixing it.

The idea that consumers can influence companies with their pocketbooks isn’t new, of course. My friend Joel Makower, the founder of GreenBiz, wrote a book called The Green Consumer back in 1989. (You can buy it for a penny on Amazon.) And socially conscious consumers helped build brands like Newman’s Own and Ben & Jerry’s. even today, though, green consumers are not well-organized, or connected to one another. You may buy Seventh Generation laundry detergent or Timberland boots but it’s not clear what difference, if any, you have made by doing so.

This is Brent Schulkin of Carrotmob

Schulkin got Carrotmob going four years ago by organizing his friends and their friends to support a liquor store in the Mission district of San Francisco. They spent $9,000 in a single day on “beer and popsicles,” had a party afterwards and in return the owner did an energy retrofit on the store. They made a video of that first campaign and the idea spread, as good ideas often do on the net.

Since then, more than 175 Carrotmobs organized by grass-roots groups around the world, including France (“Invasion des Carrottes a Rennes”), Germany (“Erster Freiburger Carrotmob”) and Finland (“Porkannamafia!”, my personal favorite). Most have focused on energy and climate issues because retailers can be persuaded to invest in energy efficiency or clean power.

This is Carrot Top

These grass-roots efforts will continue, Schulkin says, mostly because they run themselves: “It’s their energy, their ideas, their passion. I just got an email from Estonia.”

The next step–and here is where things can get interesting and complicated–will involve harnessing all that buying power to support action by a big company or brand.

“What does it look like if we get millions of people into a network and drive millions of dollars in sales to a big company?” Schulkin asks.

This raises as many questions as it answers. How can Carrotmob insure that the quid for their quo is real? Who decides which companies or products are most deserving? And how does the venture govern and sustain itself?

Schulkin told me at the GreenBiz Forum in New York last week that Carrotmob is a work in progress, mostly supported by donations and sweat equity. He’s got bigger things in mind. The FAQ’s on the Carrotmob website point to a possible business model:

The primary model we are going to pursue will work like this: With our team and our technology we will help facilitate campaigns, and then we will charge businesses a small fee based on how much money the mob collectively spends. This fee will vary based on the circumstances of the campaign, but in general we think it’s the most sensible revenue model for us to pursue.

This makes Carrotmob sound a bit like Groupon, except that instead of a discount, its buyers get an environmental or social payback. Trust becomes a key factor at that point: consumers will have to trust Carrotmob and trust (or verify) that the company is, in fact, taking an action it would not otherwise do. Those are big hurdles. If Carrotmob can overcome them, it could become a real force for change.

This story was first published at GreenBiz.com, where I’m a senior writer.

I’m skeptical about efforts to rank and rate green or sustainable companies, and I have been for a time. [See 100 Best Corporate Citizens? What a CROck!] It’s terribly difficult to compare big and small companies, retailers with manufacturers, software firms with oil companies, etc. We once tried at FORTUNE, and gave up because we decided it couldn’t be done right.

Having said that, I’m impressed with the rigor and methodology used by a Canadian magazine called Corporate Knights to produce its 8th annual list of Global 100 Most Sustainable Companies, which it calls “the most extensive data-driven corporate sustainability assessment in existence.” The ratings are transparent and they encompass social as well as environmental metrics, among them energy, carbon, waste and water productivity, diversity and employee turnover, safety and, interestingly, the ratio between CEO and average worker pay–a revealing metric that most such rankings do not include. Disclousre: While I played no part in putting the list together, I did write a profile of Novo Nordisk, the top-ranked company, for Corporate Knights.

A couple of things to note about the list. First, US companies perform poorly. There’s not one US-based company in the top 10. Intel (No. 18) Life Technologies (No. 15) is the highest ranked US-based firm, followed by Intel (18), Agilent (59), Johnson Controls (64), Procter & Gamble (66) and IBM (69). Lest you suspect a Canadian bias, our neighbors to the north did no better. The top-ranked Canadian firm was Suncor (48), which calls itself an “oil sands pioneer. Go figure.

Of the 22 countries with companies that made the list,  the UK led the way with 16 Global 100 companies, followed by Japan with 11 and France and the US with eight. Northern European countries (Denmark, Netherlands, Norway, Sweden) punched above their weight, which isn’t surprising.

Interestingly, these more sustainable companies have outperformed their peers. Toby Heaps, CEO of Corporate Knights, said in a news release: “In a year in which Wall Street was occupied and capitalism became a bad word, the Global 100 companies serve as ambassadors for a better, cleaner kind of capitalism which, it also turns out, is more profitable.” The magazine reported:

From its inception on February 1 2005 to December 31, 2011, the Global 100 Most Sustainable Corporations has achieved a total return of 41.70%, outperforming its benchmark, (the MSCI All Country World Index at 29.30%) by more than 11%.

How did Novo Nordisk reach the top? According to Corporate Knights, the Danish pharmaceutical firm

is on record that access to essential medicines is a human right, and sells human insulin (the most basic kind) to 33 of the world’s poorest countries, at no more than 20 per cent of the average price in the western world. On the key clean capitalism metrics measured by Corporate Knights, Novo Nordisk scored top quartile performance in energy productivity ($4,851 in revenue generated per unit of energy consumption, compared to a pharmaceutical sector average of $3,603), carbon productivity ($68,585 in revenue generated per unit of carbon emitted, compared to a pharmaceutical sector average of $56,414) and pay equity (CEO/average employee remuneration ratio of 15 vs. a pharmaceutical sector average of 93). Novo Nordisk is the only pharmaceutical company within the Global 100 to report linking CEO remuneration to corporate performance on clean capitalism KPIs.

What impressed me about Novo Nordisk was how deeply sustainability issues are woven into the fabric of the company. In my story, I write about the firm’s approach to drug pricing, to climate and energy issues and to China. Here’s how the story begins:

Don’t ask Novo Nordisk for the company’s corporate responsibility report. The Danish pharmaceutical firm, which had revenues of DKK 60.7 billion (US$10.5 billion) in 2010, doesn’t publish one. Instead, Novo Nordisk reports on its environmental and social performance – including water and energy consumption, waste reduction, employee turnover, the diversity of its management team, new patent filings and charitable donations – alongside its financial performance in a single annual report.

This integrated approach to reporting reflects the way business is done at Novo Nordisk, the world leader in diabetes care and the No. 1 firm on the 2012 list of Corporate Knights Global 100 Most Sustainable Corporations. Novo Nordisk has pursued a triple bottom line of financial, social and environmental gains since the 1990s, when the phrase was coined by writer John Elkington, and it incorporated the concept into the company’s legal structure nearly a decade ago.

“The main foundation for Novo Nordisk is the triple bottom line because that is what’s protecting our license to operate,” says Lars Rebien Sorensen, the firm’s president and CEO. “That begs and obliges everybody in the company not only to see that we become a good business – that’s the financial bottom line – but that we do so in a way that is socially and environmentally responsible.”

Lise Kingo, who has worked on sustainability issues since joining Novo Nordisk in 1988, says the company’s business case for corporate responsibility goes well beyond protecting its license to operate. Today, she says, the firm envisions sustainability as a way to drive innovation, and finds that engaging with stakeholders helps spot business opportunities as well as avert trouble. One sign of the value that the company places on sustainability is the fact that Kingo, 50, has been part of Novo Nordisk’s five-person executive management team since 2002.

You can read the rest here.

And, speaking of rankings, I was pleased once again to be named to the Ethisphere Institute’s 100 Most Influential People in Business Ethics. Lists are fun so long as we don’t take them too seriously. (Really, how do you compare the influence of federal prosecutor Preet Bharara, Russian blogger Alexei Navalny and Walmart CEO Mike Duke, all of whom are in the top 15?) Still, some of the business people on the list whose work I know certainly deserve to be spotlighted, including Starbucks’ Howard Schultz, Coca-Cola CEO Muhtar Kent, Jeffrey Swartz of Timberland, Brian Dunn of Best Buy, Yalmaz Siddiqui of Office Depot and Bob Corcoran of GE. I was also thrilled to see my friend Liz Maw, the executive director of Net Impact (where I’m on the board), be recognized for the great work that she, her staff and the organization are doing.

I spent the day today at the GreenBiz Forum 12 in New York. I’m a senior writer at GreenBiz, which does a great job producing events. I interviewed Dan Hendrix, the CEO of Interface, who’s picking up where the company’s legendary and visionary founder, Ray Anderson, left off; more here. And I wrote about Israel Ganot, the co-founder and CEO of Gazelle, a fast-growing startup that recycles electronics. Please read this story if, like many of us, you don’t know what to do with your old gadgets. I first covered Gazelle back in 2009. [See Cash for (electronic) clunkers.]

Here’s how the story begins:

Think, for a moment, about that one place in your house where you don’t like to go.

That closet. The garage. In my house, it’s the attic. Ugh.

The place where you put stuff you no longer want or need.

“How much is enough?” asks Israel Ganot.

Ganot, who is the president, co-founder and CEO of Gazelle, spoke today at the GreenBiz Forum 12 in New York. He has a way to help you de-clutter your home, at least when it comes to electronics. Gazelle buys back cell phones, laptops and other electronics, offers free shipping and then pays you for them. Gazelle makes money by reselling the used goods in the U.S. or abroad. What it can’t resell, it recycles.

“We give new life to old gadgets that still have value,” he says.

You can read the rest here.

This blogpost about climate preparedness is part of the 2012 State of Green Business Report, published by GreenBiz, where I’m a senior writer. You can download a copy of the full report here.

Last December, government officials, corporate executives and activists met in Durban, South Africa, for high-level climate talks. They went home with an agreement … to keep talking. Meanwhile, we’re emitting more carbon dioxide every year, and atmospheric concentrations of greenhouse gases are steadily rising. If CO2 levels were somehow to stabilize now–they won’t–the world will keep warming. The bottom line: Climate change is inevitable. The world needs to learn how to prepare for it.

Increasingly, smart businesses are starting to do just that. Utilities, the oil and gas industry, agricultural companies and insurers are building assumptions about rising temperatures and extreme weather events into their scenario planning. This is what’s being called climate adaptation or climate preparedness.

The payoff from investing in adaptation could be substantial.  In 2011, insured losses in the U.S. from natural catastrophes, including tornadoes, floods and hurricanes, topped $105 billion, breaking the record of $101 billion set in 2005, the year of Hurricane Katrina, according to Munich Re, the world’s largest reinsurance firm. Some of those losses had nothing to do with climate change, but others did.

Let’s get specific about what adaptation means: Entergy, an $11 billion-a-year utility company based in New Orleans, commissioned a Gulf Coast Adaptation Study that has opened up conversations with customers and elected officials about preparing for a warming climate. Not surprisingly, the company got focused on the problem after Hurricanes Rita and Katrina hit in 2005, followed in 2008 by Gustav.

“That really put a face on what the future was going to be like,” said Jeff Williams, director of climate consulting for Entergy. “Clearly we are facing risks from sea level rise, more intense storms, flooding and surge damage.” The company has looked at “hardening” key assets including power plants, substations and transmission lines; the goal is to make Entergy “more resilient in ways that minimize business interruption loss,” Williams says.

For example, Entergy has begun a five-year $73.5 million project to relocate and harden transmission and distribution lines serving Port Fourchon, LA, which is the single largest point of entry for crude oil coming into the U.S., handling about 13 percent of national imports. (After Katrina damaged the electrical instructure, 25 percent of oil production and 44 percent of natural gas production became shut in, Entergy says. National oil prices went from $60/bbl before Katrina to $70/bbl after Katrina because of supply interruption; national natural gas prices went from $8/Mcf to $15/Mcf.) Smaller businesses are acting, too. The McIlhenny Co., which makes Tabasco Sauce and was founded in 1868 on coastal Avery Island, LA, has made its factory and visitor center more resilient to better absorb future storms.

Agriculture is another industry that will be reshaped by a warming world, with some regions and crops doing better, thanks to a longer growing season and higher levels of CO2 in the air, and other suffering. Seed companies have renewed their efforts to develop drought resistant crops, said John Soper, director of product development at Pioneer,  a unit of DuPont.

“We’re expecting some drier weather to move into the key corn growing areas,” he says. “The climate in Illinois might be more like the climate in Arkansas.” Pioneer is testing drought-resistant corn and other crops in desert-like test fields in California and Chile, he said, in part because farmers who now irrigate their fields are already telling Pioneer that they expect limits on the availability of water. In India, Pioneer is working to develop drought-tolerant varieties of rice, which is now grown on flooded land but may have to adapt to a drier climate. Other seed companies including Monsanto, Syngenta and Bayer Crop Science are working on their own drought-resistant crops.

The insurance industry, meanwhile, has been declining to write property coverage along the Atlantic Coast, in part because of fears that stronger hurricanes will do more wind damage. Citizens Insurance of Florida, a non-profit, state-run company which takes on property owners who can’t get private coverage, has become Florida’s biggest insurer.

Even the oil and gas industry–which, of course, is a major contributor to climate change–is paying heed. Several years ago, IBM, a UK consulting firm called Acclimatise and the Carbon Disclosure Project published a report called Building Business Resilience to Inevitable Climate Change [PDF, download] urging oil-and gas companies to review their strategies, business models and supply chains to “check their resilience to the new risk landscape created by inevitable climate change.”

Environmental groups, which once focused solely on curbing carbon pollution, are now looking at adaptation, in part to underscore the urgency of the climate threat. Theo Spencer, a senior advocate at the Natural Resources Defense Council, which helped organize a meeting early this month with utilities, insurance companies and others to talk about climate preparedness, says companies are coming to understand that “the weather is changing and we really need to do something about it.” He quotes the White House science adviser John Holdren who said the task ahead is not just “avoiding the unmanageable” but also  “managing the unavoidable.” Unavoidable climate change, and its consequences, is likely to be a corporate worry for years to come.

You can rent this penthouse in Rio for $258/night on AirBnB

You hear a lot these days about the sharing economy and collaborative consumption, especially if you spend time in northern California. I spent last week in San Francisco, where people told me about AirBnB, which allows people to share their homes or apartments with visitors, RelayRides,  Share My Ride and getaround, which allow people to rent their cars for a few hours or days, and ThredUp, where parents buy, sell and share children’s clothes, toys and books. Meantime, Prosper.com and Lending Club connect people who want to lend money with those who want to borrow. With peer-to-peer lending, who needs Citi or Bank of America?

Last year, Fast Company published a thoughtful and well-reported overview of the sharing economy by Danielle Sacks under the headline: “Thanks to the social web, you can now share anything with anyone anywhere in the world. Is this the end of hyperconsumption?” More than 3 million people from 235 countries have “couch-surfed,” she reported, and more than 2.2 million bike-sharing trips are taken each month.

Many sharing websites, like Freecycle and Couch Surfing, are nonprofits. Seattle and Berkeley have tool libraries, where people can borrow a lawn mower, power saw or drill. But other sharing ventures are business. Some analysts expect the sharing economy to generate real money, Fast Company reported:

Gartner Group researchers estimate that the peer-to-peer financial-lending market will reach $5 billion by 2013. Frost & Sullivan projects that car-sharing revenues in North America alone will hit $3.3 billion by 2016.

I’ve always liked the idea of sharing–hey, I paid attention back in kindergarten–because of its obvious environmental benefits: The more we share, the less stuff we need to own. But I’ve been skeptical of the claim that the sharing economy would end–or even slow down–hyperconsumption. My week in San Francisco made me less of a skeptic. This idea just might spread.

Partly I’ve changed my thinking because of my own experience. For the first time, I stayed in an apartment that I found through AirBnB. Because I planned to spend six days in San Francisco, staying in a downtown hotel struck me as unappealing. I liked the idea of exploring a neighborhood, making my own breakfast and saving a few dollars. So I found a studio in Potrero Hill for $140/night that I rented from a woman named Kepa Askenasy.  I chose it in  part because Kepa was rated a “SuperHost” by Air BnB and had about 70 favorable reviews from renters on the site. It’s the top floor unit, below.

My digs in San Francisco

I felt some trepidation as I boarded the plane for SFO–this wasn’t as predictable as staying at a Marriott, or at one of the Joie de Vivre hotels in SF, which I like a lot–but everything worked out really well. The apartment was small but comfortable, and Kepa kindly provided maps, neighborhood guides and her own advice on local dining and shopping.  I explored Potrero Hill, enjoyed a long walk to downtown for one meeting, got around on buses and the Muni,  went for a run with my pal Adam Lashinsky (buy his new book!) who leaves nearby and hung out at Farley’s, the local coffee shop.

The peer reviews on AirBnB took a lot of risk out of the transaction, for Kepa and me. She got paid in advance. I was reassured by her ratings. Afterwards, we rated one another, to guide future renters and lessors. She told me by email:

Airbnb emphasizes customer service, and accountability on both sides of the equation (host/ guest) through their transparent review process. It’s been exceptionally easy to handle the transactions. My guests seem to be happy with their side of the deal too.

Should Marriott and Hilton be worried by AirBnB? Probably not, but it’s not going to help their business.

Later in the week, I had lunch with Beth Trask of Environmental Defense Fund who told me that she’s renovating a home in Berkeley. And, yes, when she needs tools, she visits the tool library. She told me:

The Berkeley tool library is a real community gem.  I’ve borrowed everything from rakes and hammers to drain snakes, sanders and power tools.   The crusty old guys who run it love to tease me — since I never know the right names for the tools I’m looking for and they usually have to explain them to me – but they always help me out.  I’ve saved so much money and time, and have learned a lot about tools along the way.

On a visit with Net Impact, a great organization of MBAs, young professionals and college students who want to use the power of business to change the world for the better, several young staffers told me that they thought the sharing economy was a real phenomenon among younger people. Liz Maw, the executive director, was planning to rent a car the following day from getaround, but was stymied by a couple of glitches. But others in the group had used car sharing services, which provide peer reviews as well as insurance. Most cars, it turns out, sit around as much as 90% of the time.

I’d readily use AirBnB again, and I’m prepared to try car sharing. I’ve been using Freecyle for years [see my 2007 Fortune.com column, The amazing Freecycle story]. It strikes me that free or government-backed sharing programs, like Capital Bikeshare in Washington, D.C., function as gateway drugs for people who have forgotten the lessons they learned in kindergarten. They can move from there to Zipcar and from there to sharing their own car or apartment, and borrowing from others.

Lisa Gansky, an entrepreneur and author of a book called The Mesh: Why the Future of Business is Sharing, is the leading evangelist for the sharing economy. In a manifesto called Six Reasons Why the Sharing Society (aka the Mesh) Will Trump the Ownership Society [PDF, download], she has this to say about the environmental advantages of sharing:

Barring some miracle in space, there’s only one planet for us to inhabit. And by mid-century, roughly three billion more people will join us. With this math, it’s not hard to predict that businesses that figure out more efficient ways to use the earth’s resources will thrive. Also, urban areas will inevitably become more densely populated, which really favors the sharing economy. If you’ve got more people in a neighborhood, it’s easier to increase the number of bikes, tools, local farmers markets or clothing swaps you can offer. You can also make your offers more convenient—more shared cars in the lot or on a nearby street. Density deepens community and creates demand for shared products and services. Owning a car outright, on the other hand, becomes a bigger and bigger expense and burden to maintain and park.

Very cool.

Do you think the sharing economy threatens business as usual?

Imagine if you had to put a quarter in a slot every time you took a shower at home. Or 50 cents to run the dishwasher. Or $2 to water the grass.

You’d think about water differently, wouldn’t you?

A San Francisco startup called WaterSmart Software wants to remind people that wasting water is wasting money, and to show consumers how to conserve both.

“People don’t have a mental image of pennies going down the drain,” says Peter Yolles, a founder and CEO of WaterSmart Software, which is based in San Francisco.

But they should.

“We’re helping the consumer save money,” Yolles says. “And we’re helping the utility save money.”

WaterSmart is a small company–just six people–that wants to help tackle a very big problem: Fresh, clean water is a finite resource. As populations grow, incomes grow and the planet warms, water scarcity will create business opportunities.

If you’re like me (and I hope you’re not in this instance), you know very little about your water use. I just checked my quarterly bills for the past 12 months and found that I paid $994.21 for water, or $82.85 per month. That’s higher than I thought and, unfortunately, quite a bit higher than the average bill for US households of about $50 month, according to WaterSmart.

What’s more, Yolles tells me, the water bill is “the fastest growing bill in your home,” faster then the electricity or even the cable bill.

Here’s a chart showing typical household water use:

You may be surprised, as I was, to see how much usage comes from leaks and the toilet as opposed to say, the dishwasher, which doesn’t merit its own slice of the chart. (This is from a 1999 study.)

WatersSmart software aims to give people, first, more information about their water use and then, second, advice on how to use water more efficiently. Using billing information from water utilities, along with real estate, climate and geographic data, WaterSmart will compare a household’s water use with the neighbors in a friendly, easy-to-use format, on line and in print. It’s similar in concept to a fast-growing startup called OPower which promotes energy conservation. [See my 2010 blogpost, Opower, peer presssure and climate change.)

Peter Yolles

Yolles, by his own description is a “water guy” having spent 20 years dealing with water issues from a business, nonprofit and government perspective. He’s got a master’s in water resources from Yale’s forestry school, as well as an MBA, and he has worked at GE Capital and the Nature Conservancy, as well as the Pacific Institute, a leading water think tank. He and his co-founder, Rob Steiner, started WaterSmart late in 2009 and they were one of the winners the following year in a competition called Imagine H2O. Since then, WaterSmart has raised venture money from Draper Fisher Jurvetson, Sand Hill Angels and Gary Kremin, an entrepreneur who founded match.com and Clean Power Finance. I heard about the firm from partners Andrew Williamson and Will Rosenzweig at Physic Ventures, which is also backing WaterSmart.

The business model for WaterSmart depends on the desire of water utilities, which are mostly publicly owned, to get their customers to conserve. “They want to provide a clean, reliable souce of water for their customers,” Yolles says. Some utilities are so concerned about the availability of water that they subsidize low-flow shower heads and toilets, or even pay for a homeowner to replace thirsty grasses on their lawns with native plants that need less water. If enough individual homeowners use less water, the utility can avoid the cost of new treatment facilities, reservoirs or even desalination plants.

In California (where I’m spending a couple of weeks), water is on people’s minds. “This is the third driest winter, so far, in California,” Yolles said. “Some California cities had no precipation in December.” WaterSmart software has two pilot programs underway in the state.

But the problem goes way beyond California, of course. Water scarcity, climate change and infrastructure requirements are driving up water prices throughout the United States. Using electricity requires lots of water.

Globally, population growth and urbanization are expected to drive demand for water up 40 percent within 20 years, according to a 2009 report from the 2030 Water Resources Group, an association of the World Bank, major industrial water users and the consulting firm McKinsey, according to The New York Times.

No wonder more companies are developing water strategies. Maybe the rest of us should, too.

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?

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* 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.