Natural capital: Breakthrough or buzzword?

forests-why-matter_63516847We depend on nature. Forests, fisheries, water, soil, clean air, the ability of the atmosphere and the oceans to absorb CO2, minerals, biodiversity, pollination, the serenity of the wilderness: They make life possible. Not to mention more pleasant. Fine. That’s not news.

Lately, though, environmentalists and a handful of companies and consultants have tried to assign a dollar value to the products and services provided by nature. This idea is what’s called “natural capital,” at least as I understand it. I took a look at the idea in a story posted yesterday at Guardian Sustainable Business.

The story has already generated reaction, positive and negative. (Sometimes from people in the same organization.) Before you read it, I want to clarify what I meant to say–something a reporter shouldn’t have to do, but it may be helpful in this case. I didn’t mean to diss the entire notion of natural capital. It strikes me as potentially a useful idea, particularly when applied at a modest scale, and with some humility. Specifically, some companies and government agencies have found that by “investing in nature,” they can generate favorable returns when compared to other more conventional investments. For example, Coca Cola bottling companies have paid upstream farmers to take better care of their land, as a way of protecting water that the company needs to make beverages. A small nonprofit in Oregon called The Freshwater Trust has found that working with landowners to plant trees along riverbanks can improve water quality more effectively and at a lower cost than installing conventional pollution controls. (Here’s an example, a project the group administered for the City of Medford.) Most famously, Dow Chemical has worked with the Nature Conservancy to develop “green infrastructure” instead of “gray infrastructure” at a big facility in Texas. Maybe because I can get my head around them, these projects make sense to me.

What’s harder for me to understand are the more ambitious and complicated efforts to account for natural capital on a corporate or even a global scale. The calculations get complicated, in a hurry. (PUMA and its parent company, Kering, have spent years trying to measure their impact.) The numbers become less reliable when we start talking about billions or even trillions of dollars. Most important, the object of the exercise is…..what, exactly? Some people argue that valuing natural capital helps company identify risks or opportunities in its supply chain, but does an apparel company really need to hire accountants and consultants to understand that growing cotton will be harder in a water-constrained world than it is today? What’s more, as I explain in the story, the idea of “finite” natural resources, on which much of the analysis depends, is itself flawed. Yes, we may run out of this or that, but over time, inventive people are about to devise substitutes for scarce resource as the prices of those resources. This is how markets and innovation work. After,  the  stock of natural capital in the 19th century would have included whale oil for lighting and horses for transportation; they were, perhaps, finite, but they became irrelevant.

In any event, here’s how my story begins:

The corporate sustainability movement needs many things – scale, acceleration, a sense of urgency, science-based targets and goals – but one thing it surely does not need is another buzzword. Yet that is what “natural capital” is at risk of becoming.

At the GreenBiz Forum last month in Arizona, which attracted nearly 600 sustainability professionals, talk of natural capital was everywhere. The Nature Conservancy and the Corporate Eco Forum unveiled the Natural Capital Business Hub, which aims to “help companies uncover opportunities to enhance their bottom lines by integrating the value of natural capital into their strategy, operations, accounting and reporting.” Companies identified as Natural Capital Leaders – including Kimberly Clark, Freeport McMoran and Adobe – were praised.

So what, exactly, is natural capital? And why should companies care? Will accounting for natural capital drive meaningful change – or will it merely consume time and energy, occupy panelists at sustainability conferences and generate consulting fees?

Defining natural capital is relatively easy. “It’s the products and services that nature provides to business,” explains Libby Bernick, a senior vice president at Trucost, a consultancy that has popularized the idea. Forests, fisheries, water, soil, clean air, the ability of the atmosphere and the oceans to absorb CO2, minerals, biodiversity, pollination, even scenic landscapes upon which tourism may depend: all these are forms of natural capital.

The problem, as some see it, is that businesses and individuals use natural capital without paying for it. As Pavan Sukdev, a former banker who helped spread the idea, likes to say: “We use nature because it’s valuable, but we lose it because it’s free.” It’s a profound statement. Catchy, too.

But putting a price on nature’s products and services and then using those valuations to actually do something useful – well, that’s when things get fuzzy.

You can read the rest of the story here.

Ride on: The bike sharing boom…and its limits

Citi Bikes New YorkI haven’t been on a bike from Capital BikeShare in months because of the nasty winter here in  Washington. But before long, your nation’s capital will once again be home to one of the US’s most popular bike-sharing programs. I’ve raved about bike sharing before (See Pedal Power: Why I love bike sharing) and today my story about the phenomenon was posted on Guardian Sustainable Business.

Yes, bike sharing truly is a phenomenon, spreading rapidly across the US, now in well over 40 cities. But not in all the expected places–bike sharing, as the story explains, has been embraced by cold weather cities like Boston and Minneapolis, but it has yet to launch in such Sunbelt cities as Los Angeles, Dallas and Atlanta.

What’s more, even the most successful bike-sharing programs depend on taxpayer support, at least for their initial capital outlays.

Here’s how the story begins:

As the bike-sharing business gains traction in cities across America, two small companies, Alta Bicycle Share of Portland, Oregon, and B-Cycle of Madison, Wisconsin, are making a big difference in the lives of tens of thousands of cyclists.

Alta Bicycle Share operates bike-sharing systems in partnership with local governments in eight cities: New York, Washington DC, Chicago, the San Francisco Bay area, Boston, Columbus and Chattanooga, as well as Melbourne, Australia.

B Cycle, a joint venture of the Trek Bicycle Corp, healthcare provider Humana and marketing agency Crispin Porter + Bogusky, manages systems in about 30 cities, including Denver, Houston, Kansas City, Madison and Boulder, as well as Santiago, Chile.

Together, they have made bike-sharing one of America’s fastest growing “green” businesses. “Bike sharing has experienced the fastest growth of any mode of transport in the history of the planet,” according to findings from the Earth Policy Institute.

Bike-sharing systems reduce carbon emissions, cut local air pollution, make it easier for people to get exercise and, importantly, build political support for safe bicycling infrastructure. Some studies show that protected bike lanes enhance retail sales and real state values.

But the bike-sharing industry has yet to answer a couple of questions that could slow its growth. First, can bike sharing become a sustainable business, or will it forever require taxpayer support? Second, can it grow into a national phenomenon by attracting more ridership in car-centric, Sunbelt cities?

You can read the rest of the story here.

Mike Biddle, libertarian environmentalist

biddle-6307Can a libertarian be an environmentalist?

Mike Biddle would say yes. Like many corporate executives, Biddle is politically conservative. He believes in small government, personal freedom and the power of markets to solve problems. “My Bible is Ayn Rand,” he once said.

But Biddle, who is the founder and longtime CEO of a pioneering plastics reprocessing company called MBA Polymers, would like the US government to regulate his industry—plastic waste. He also accepted government grants to finance the basic research that led to the company’s cutting-edge technology.

Does this make him a hypocrite? Not in my view, and here’s why.

MBA Polymers has built three factories to recycle mixed plastics—one in the UK, one in Austria and one in China. It got started with a pilot plant in Richmond, CA, but shut that down because the company could not get access to a steady supply of plastic waste in the US. Yes, that’s right: Americans generate more waste per capita (“We’re No 1!) than other nations, but most of it winds up either in landfills or shipped to poor countries where it is disassembled under unsafe conditions. Biddle’s company, meanwhile, can  turn mixed plastic waste streams, from discarded electronics and junked automobile, into plastic pellets that are as good a new materials extracted from oil.

When Mike and I met last week, he told me that he’d  like the US government to require companies that manufacture electronics to take responsibility for them at the end of their lives. He’d also like the government to regulate exports of waste. Governments in the EU and Japan have done that, and as a result they have created robust systems for collecting and reprocessing waste that save energy, reduce carbon emissions, reduce the demand for oil and help keep plastics out of the oceans. Not incidentally, these laws also protect the health of poor people in Asia and Africa who sort through electronic waste under hazardous conditions.

Mike argues that this kind of government regulation promotes fair competition and a market solution to the plastic-waste problem. Recycling generates positive externalities—that is, it does good even for those who aren’t involved—while trashing valuable plastics harms workers and the environment. To be sure, the government is favoring one industry (recycling) over another (waste dumping, here or abroad). But you also could argue that all it is doing is requiring companies (electronics manufacturers) and consumers to be responsible for properly disposing of the products that they make and we use.

As Mike told me when we talked: “”We need care about how we unmake our stuff as much as we do about it’s made.”

It’s a close call, but it strikes me as a proper role for government.

I wrote about Mike Biddle the other day for Guardian Sustainable Business. Here’s how my story begins:

This month, Mike Biddle, the founder and longtime CEO of a pioneering plastics-recycling company called MBA Polymers, stepped down as an executive at the firm, ending more than two decades of unrelenting effort to reduce plastic waste.

Biddle’s story is one of great success, as well as ongoing frustration. He sat down with me last week at the 2014 GreenBiz Forum in Phoenix to talk about MBA Polymers, the potential of the so-called circular economy, and why, despite all we know, the vast majority of plastics discarded in the US still wind up in incinerators, landfills or, worse, the ocean.

Plastics, he says, remains “the last frontier of recycling.”

Biddle, who is 58 and has a PhD in chemical engineering from Case Western and an MBA from Stanford, left a good job at Dow Chemical in 1992 in the hope of solving the difficult puzzle of plastics recycling. During the next seven years, he attracted about $7m in grants and loans from the state of California, the Environmental Protection Agency and a plastics industry trade group.

You can read the rest here. I should add that Mike’s enviromental cred is solid. He went hiking in Nepal for his honeymoon, spents lots of time outdoors with his kids and is devoting some of his time now to a nonprofit to protect oceans. Mike will also be speaking at the Fortune Brainstorm Green conference (which I co-chair) in May.

A modest defense of the hamburger

imgresIf you want to reduce your personal carbon footprint, should you eat less beef or buy a hybrid car like a Prius?

The easiest way to reduce your greenhouse gas emissions, I’ve argued, is to eat less meat. Because the emissions generated by the production of  beef, pork and chicken (in that order) exceeds those of plant-based protein, going meatless for a day or two each week makes a difference.

But curbing meat consumption won’t make nearly as much of a difference as driving a more efficient cars, some experts says–although comparing the climate impacts of Big Mac, a lentil stew, a Ford 150 truck and a Prius  is a devilishly complicated business.

Bob Langert, vice president of corporate social responsibility at McDonald’s, recently pointed me to an interesting new publication that explores this issue, and others. Sustainable Diets: Food for Healthy People and a Healthy Planet (available as a PDF here) report on a series of workshops held last year by the well-respected Institute of  Medicine that brought together environmental scientists, nutrition experts, government officials and business people to look at the effects of diet on the planet and on human health.

One of the experts, Frank Mitloehner, a professor in the department of animal science at   the University of California at Davis, who is chair of an FAO group studying the environmental impact of livestock, offered a defense of beef. He tried to  put in perspective the claims of activists who urge consumers to eat less meat for environmental reasons.

The report says:

In Mitloehner’s opinion, although scientists would agree that food choices are an important environmental emission source, they would also agree that food choices pale in comparison to transportation choices or energy production and use choices.

To illustrate his point, Mitloehner cited a U.S. Environmental Protection Agency estimate that 33 percent of all GHG emissions are associated with production and use of energy and 27 percent are associated with use of transportation (EPA, 2013). Compare those figures to GHG emissions in the United States from the entire livestock sector, all species, based on life-cycle assessment9 at 3.4 percent (EPA, 2012). According to Mitloehner’s calculations, of that 3.4 percent, approximately 1.8 percent comes from the beef sector. Thus, GHG emissions from livestock in developed countries are dwarfed by carbon footprint contributions from other, larger sectors (e.g., transportation, energy, industry). The same is true of other developed countries.

Mitloehner questioned the impact of “Meatless Mondays” or “Beefless Mondays.” If 300-plus million people were to go beefless on Mondays, that would cut the 1.4 percent figure by a factor of 7 (number of days in the week), which would amount to a 0.2 percent reduction in the total greenhouse gas footprint. Mitloehner said, “While this is not nothing … it will not even compare to what we see from the transportation sector.”

Mitloehner may be right. He is especially critical of a 2006 FAO report that estimated that livestock contributes 18 percent of all GHG emissions, and those emissions were greater than those from the transportation sector. This number has been quoted widely but, he said, the comparison was inappropriate because livestock emissions were analyzed using a full lifecycle assessment, and then compared to transportation emissions that included only tailpipe emissions.

A very different view was put forth by Emily Cassidy of the Institute on the Environment at the University of Minnesota, who with colleagues including Jon Foley has worked to quantify the environmental impacts of diet. The report says:

Americans consume a lot of meat, more than 110 kilograms per person per year, even though the nutritionally recommended amount is only about 23 kilograms per person per year (FAO, 2013). If meat consumption were to be reduced by 75 percent, to 30 kilograms per person per year, with the lost weight being compensated by fruits and vegetables, cereals, and other foods, what would happen to the environmental footprint of the U.S. diet?

Cassidy’s calculations suggest that such a reduction would significantlychange the environmental impacts associated with the U.S. food system. Specifically, a 75 percent reduction in meat consumption would result in a 27 percent reduction in land use, a 31 percent reduction in water use, and a 46 percent reduction in GHG emissions.

It’s complicated, no? One problem is that using global or even national averages when talking about the carbon impacts runs roughshod over important differences in farming and ranching practices, the electricity mix, shipping and a gazillion other variations. Did the corn that was grown and fed to the cow that was turned into a Big Mac require irrigation? Was the electricity fed to the Prius generated by a coal-fired power plant or by hydropower? Which has a greater carbon impact, salmon from Alaska or chicken from the Delaware shore? Climate change is a global problem, but all emissions are local, as Ory Zik has noted in developing his startup company Energy Points, which uses Big Data to analyze environmental tradeoffs.

So…if you want to reduce your carbon footprint, should you eat less beef or buy a the Prius? The answer is, it depends. It sure looks as if switching to a Prius will have a bigger impact, but of course it’s easier to skip a few meals with meat than to buy a new car. What’s more, the health and environmental impacts of meat production in confined animal feeding operations (CAFOs) go well beyond climate, including the need to dispose of animal waste, potential water pollution, pesticide and fertilizer overuse to produce feed, antibiotic use and resistance, air quality and animal welfare issues.

Happily, it’s not an either or. You can cut meat consumption and drive a more efficient car.

Meantime, companies like McDonald’s, Walmart and Cargill are working together to limit the environmental impact of beef production through the Global Roundtable for Sustainable Beef, which is all to the good.

That said, it would be so much simpler and more sensible to put a tax on carbon emissions and use price signals to speed the transition to a low-carbon economy. Pricing carbon emissions into the costs of goods and services–electricity, gasoline, food and everything else–would unleash the power of markets and drive producers and consumers to smarter and greener choices.

Easy targets

UnknownHow do companies set their climate reduction targets?

I wondered about that after reading an analysis of 100 global companies that was published last year by Climate Counts and the Center for Sustainable Organizations. The companies had all been measuring and reporting on their global greenhouse gas emissions at least since 2005. In that regard, they are climate leaders, at least in terms of their transparency. Yet the study found that only 49 of the 100 companies are on track to reduce carbon emissions “in line with scientific targets to avert dangerous climate change.”

Companies, it would seem, are setting climate targets, meeting them and yet not doing enough. Could there be  something wrong with their targets?

That’s the topic of my story that was posted today on Guardian Sustainable Business. Here’s how it begins:

Every company that aspires to be responsible sets targets for reducing its greenhouse gas emissions. General Motors says its manufacturing plants will reduce their carbon intensity by 20%. Wells Fargo says it will achieve a 35% reduction in greenhouse gas emissions from its buildings. UPS aims to reduce airline emissions by 20%.

These global corporations recognize the reality of climate change and they are striving to become more efficient. While governments, including the US and China, the world’s two leading emitters, can’t agree on binding climate targets, it would seem as if companies are doing their part.

Unhappily, most are not.

The trouble is, corporate climate targets are almost never based on climate science. That is, they are not designed to do the job that needs to be done–bringing global carbon emissions down to levels that will avert dangerous climate change. Instead, the corporate targets appear to be driven by internal considerations–what companies can achieve and afford, what their peers are doing, even what round numbers will fit into a headline or press release. No one promises to cut emissions by 23 percent by 2021.

The story goes on to chronicle my efforts to get companies to explain how and why they set their targets–a question that led mostly to answers like “sorry, we’d rather not discuss that,” even from companies that are ordinarily more than ready to promote their green good works.

What this points to is the need for what some advocates are calling “context-based sustainability,” that is, setting targets that are shaped by science-based thresholds. Want to know more? Read the story, here.

Paul Polman: A radical CEO

Paul-Polman-chief-executi-005“We’re the world’s biggest NGO,” Paul Polman, the chief executive of Unilever, sometimes likes to joke.

Literally, he is correct: “We’re a non government organization. The only difference is, we’re making money so we are sustainable.”

Lots of money, in fact. As one of the world’s biggest consumer products companies, with such brands as Dove, Hellman’s, Axe and Ben & Jerry’s, Unilever generated about $67 billion in revenues and $7.2 billion in profits last year.

But while Polman has led a turnaround at Unilever since becoming CEO in 2009, he is best known because he is outspoken about his belief  that “business should serve society.” He sounds more like the leader of an NGO like Oxfam or Greenpeace than your typical CEO. He’d rather blather on  about the Millenium Development Goals than boast about his company’s earnings.

More important, Polman’s Unilever uses its global to work for change, around a set of big issues, ranging from curbing climate change to eradicating poverty to deforestation.

That’s why the Center for Global Development, a DC think tank, honored Polman the other night with its “Commitment to Development: Ideas in Action” award. Previous winners include Global Witness, the One Campaign and Oxfam. Polman is the first business guy to get the award, as best as I can tell.

One reason: Unilever’s strong commitment to reducing deforestation, which helped drive the decision late last year by Wilmar, the world’s largest palm oil producer, to sign a “no deforestation” pledge. Wilmar’s commitment has the potential “to create a global revolution in how we grow food,” Scott Poynton, executive director of The Forest Trust, wrote last month in Guardian Sustainable Business. Palm oil is used in a variety of foods, as well as personal care products, like soap.

At the awards dinner, Nancy Birdsall, president of the Center for Global Development, said of Polman:  “He is surely the most outspoken and effective advocate for reducing the amount of deforestation that takes places to produce consumer goods.”

I went to the award ceremony not because I hadn’t heard Polman before — we spent time together last year when I profiled him in Fortune, under the headline Unilever’s CEO has a green thumb — but because he is such an outlier in the business world and I wanted to hear what was on his mind.

He didn’t disappoint. Some highlights from his remarks:

On the need for government policy to curb climate change: “We need to have the business community in the US speak up more, and then the Republicans will have to listen.”

On the urgency of dealing with global problems: “First and foremost, I am a businessman. I like to get to action. This worldis very long on words and very short on action.”

On the importance of sustainable development: “It is desperately needed that we build a new economic world order where we live within planetary boundaries.”

On global inequality: “The top 1.2 billion people consume 75 percent of the world’s resources. That is a system that is not in equilibrium.”

On the exploitation of garment workers in Bangladesh, who are paid 11 cents an hour“That’s as close as you can get to modern-day slavery.”

On the opportunity to have an impact: “In the next 15 years, we as a generation have the opportunity to be the people who eradicate poverty in a meaningful and sustainable way.”

On the need for business to step up to deal with social and environmental issues: “If you don’t make a positive contribution, you will be rejected…I  don’t understand why more CEOs don’t see this.”

The long journey to “sustainable travel”

tr-travel-smart-ff-miles-608Global travel is a huge business. A billion tourists traveled the world during 2012, and the industry generated more than $2 trillion in direct global contribution to GDP from business and leisure trips, according to the World Travel & Tourism Council (WTTC).

So it’s unfortunate that the travel industry–which depends, more than others, on a healthy planet–is just beginning to get serious about measuring and reducing its environment impact. That, at least, is my conclusion after surveying leading US-based hotel, airline and rental car companies. What’s more, as I’ve thought about the travel business, it’s hard to envision what a truly sustainable travel industry would look like. To dramatically reduce the environmental impact of travel will require the widespread adoption of low carbon fuels, the decarbonization of the electricity sector and radically “greener” buildings, all of which appear to be many years away.

I wrote about the travel industry and sustainability for the current issue of a trade magazine called Global Business Travel Magazine. The industry is clearly moving in the right direction. The question is, at what pace and scale?  In my story on hotels, I wrote:

Every major hotelier—Starwood Marriott, Hilton, Hyatt, IHC, and the rest—has invested in energy and water efficiency, reported its carbon footprint online, reduced waste, organized “green teams” of engaged employees, and embraced social programs ranging from recycling soap and toiletries to teaching employees to recognize and report human sex trafficking. That’s all well and good, but these efforts are not yet comprehensive or comparable in a way that would allow corporate travel buyers and managers (or, for that matter, leisure travelers) to measure one hotel chain against another. Nor are there reliable, broad-based, third-party standards, ratings, or rankings that reward industry leaders and shame laggards, as there are in other business categories, ranging from seafood and forestry to cell phones and appliances.

Essentially, hotel owners and operators have focused on efficiency–a relatively easy win-win because it saves hotel operators money and earns them green credibility. But efficiency can take the industry only so far (pun intended).

My story identifies Marriott as the industry leader but goes on to say that

Marriott—like all of its rivals—is still struggling to balance the goal of sustainability with the need to grow its business. Despite putting a wide range of efficiency measures into place, the company has added rooms in recent years, and as a result its greenhouse gas emissions have grown from 3.19 million metric tons in 2007 to 3.55 million metric tons in 2012—an increase of 11 percent. Scientists say that businesses and individuals have to reduce their absolute carbon emissions dramatically to limit the risks of catastrophic climate impacts.

Can the hotel industry grow while reducing its environmental footprint in absolute terms? It’s hard to see how, at least in the short run. The environmentally responsible thing to do is to travel less. For business travelers, that means meeting via teleconferences and eliminating some trips; many companies are doing that, of course. As for leisure travel, staycations, reading National Geographic or watching the Travel Channel can’t substitute for the real things. And there’s an obvious downside to traveling less: About 101 million people around the world earn a living from the travel biz, according to the WCCT, and some of those jobs will disappear if the industry shrinks.

Airlines are, if anything, in even more of a pickle that hotels. Yes, newer planes are far more efficient than older ones, but the best way to sharply reduce carbon emissions from air travel is by substituting biofuels for petroleum-based fuels. The trouble is, biofuels today are very costly. A carbon tax would encourage airlines and airplane manufacturers to invest more in low-carbon fuels, but the US airline industry has lobbied hard against the EU’s attempts to impose a carbon tax on international air travel because it would raise the cost of plane tickets. Meantime, comfort and efficiency are often at odds. Planes configured to carry more people are good for the planet but not so good for the traveler in the middle seat of row 42.

All of this is a reminder that big environmental problems like climate change simple can’t be solved by individual companies or industries. They require radical system change. This is why it’s so important for responsible businesses to make themselves heard in the public policy arena. The travel industry ought to be a loud voice for a carbon tax and for government support of research into clean technology. That’s the best strategy to bring about a low-carbon economy, and to protect the beautiful places that people like to visit.

You can read my travel industry story here.

Small is beautiful. Maybe.

imgres

There’s lots to like about Alter Eco, a San Francisco-based food company that aims to do social and environmental good. The company supports poor farmers, sources from cooperatives, offsets its carbon footprint, etc. Better yet, its products are tasty. I’m partial to the organically-grown, fairly-traded Dark Quinoa Chocolate Bar, which you could think of as a politically correct (and pricey) version of Nestle’s Crunch.

There would be even more to like about Alter Eco if it was a bigger company. The challenge for its founders,  Mathieu Senard and Edouard Rollet, who I visited last fall in San Francisco, is to figure how to drive growth without compromising their values.

My story about Alter Eco, which ran this week at  Guardian Sustainable Business, begins like this:

What would a truly sustainable food company look like? That’s hard to say, but a small company called Alter Eco, which sells quinoa, rice, chocolate and sugar grown in Latin America, Asia and Africa, offers a clue or two.

Striving to hit the very highest environmental and social standards, Alter Eco sources only Fair Trade commodities, buying from small-farm co-operatives. Its products are certified organic. It offsets its carbon emissions. And, when the founders could not find packaging that satisfied them, they designed their own: a bio-based, backyard-compostable package with no petroleum or chemicals or genetically modified corn.

“We are trying to push the envelope towards full sustainability,” CEO Mathieu Senard says.

The trouble is, Alter Eco is small – it reported just $7m in revenues in 2012. When I visited co-founders Senard and Edouard Rollet at Alter Eco’s headquarters in San Francisco, they told me that sales topped $10m in 2013 and are expected to jump 44% to $14.5m this year. “We can go to $100m in the next five to 10 years,” Senard claims.

That said, big food companies measure their sales in billions, not millions. General Mills booked sales of nearly $18bn in the 2013 fiscal year, meaning it does more business in a day than Alter Eco does in a year. For small, socially responsible companies like Alter Eco to have a big impact, they either need to grow rapidly, or influence their much larger competitors, or both.

Part of the problem facing Alter Eco is pricing. Paying Fair Trade prices, sourcing from smaller coops and carbon offsets all cost money, costs which have to be passed along to consumers. (That 2.82 oz. quinoa bar retails for about $3.50.) Higher prices, of course, limit demand–and growth. This is a challenge that has been overcome by a handful of values-driven food companies, including Starbucks and Stonyfield Yogurt. But not many.

You read the rest of my story here.

My radical plan for McDonald’s

1272056932627So I like McDonald’s. Really, I do. The fries. The coffee. Even the (850 calorie for a large!) strawberry McCafe Shake. The clean bathrooms, too. It’s my default place to stop when driving more than a few hours.

I also like the people I know who work at McDonald’s. Bob Langert, the company’s sustainability chief, is a great guy. Their PR folk are unfailingly gracious. And I’m told by a friend of the CEO, Don Thompson, that he’s a terrific person, too.

But–and you knew there was a “but,” didn’t you?–McDonald’s has a big problem. Actually, a couple.

The company wants to sell the world as many hamburgers as it possibly can. Beef, when produced at an industrial scale, is a terribly inefficient way to deliver protein to people. The production of beef requires more water and more land, and generates more greenhouse gas emissions, than the production of chicken or pork or, goodness knows, vegetable protein. Maybe the easiest way for any of us to do our part to deal with the climate crisis is to eat less beef. So long as McDonald’s is pushing burgers, it is, in effect, pushing climate change and deforestation, not to mention obesity and heart disease, at least for those consumers who do want the company wants them to do and eat more burgers. McDonald’s response to this is to join in the Global Coalition for Sustainable Beef–a laudable idea, and one that could reduce the environmental impacts of beef. But I’m skeptical about how far and how fast coalitions like this will take us. (See my 2012 story for YaleEnvironment360, Should Environmentalists Just Say No To Eating Beef?) The evidence, when you look at similar efforts to produce “sustainable” palm oil or fish, is decidedly mixed.

Then there’s the inequality problem, which is all over the news lately, and for good reason. CEO Thompson made $13 million or so in 2012. The front-line McDonald’s worker makes less than $20,000 a year. Many rely on government assistance to get by. I don’t begrudge Thompson his paycheck, but something’s amiss when the people who work for him need help from the government to feed their families.

What should McDonald’s do? I tried to address that question in a story today for Guardian Sustainable Business.

Here’s how it begins:

Promoting its Dollar Menu and More, McDonald’s says: “An empty stomach shouldn’t mean emptying your wallet, too.” A Bacon McDouble – beef patties topped with bacon, American cheese, pickles and onions – costs just $2. A bargain, no?

Alas, the price of a burger does not reflect its full cost. The environmental impact of beef is staggering: on average, 6.5 kilograms of grain, 36 kilograms of roughage and 15,500 cubic meters of water are required to produce one kilogram of beef, according to the new Meat Atlas from the Heinrich Boll Foundation, an environmental non-profit. What’s more, beef generates more greenhouse gas emissions than cheese, pork, turkey, chicken, eggs or vegetable protein.

Then there are the costs of supporting those who cook and serve burgers: More than half (52%) of the families of front-line fast-foodworkers are enrolled in at least one government-funded safety net program, according to a 2013 UC Berkeley Labor Center study titled“Fast Food, Poverty Wages”. The research estimates the industry-wide cost to these programs, very roughly, at about $7bn. Median pay for front-line fast-food workers is about $8.69 per hour, which comes to a bit more than $18,000 per year. And we won’t even consider the costs of treating the health problems that are caused by consuming too much processed food.

All of which raises a question: how can a company that depends on cheap meat and cheap labor become sustainable, responsible and even admirable?

You’ll have to read the rest of the story to see the full answer, but, in essence, I argue that McDonald’s should do three things.

(1) Nudge its customers to eat less beef.

(2) Raise the wages of its workers, publicly and proudly.

(3) Become an advocate for a price on carbon.

Will this happen? Probably not. Could it happen? I’m curious to know what you think.

Intel: Taking a stand on “conflict minerals”

International-CES-Sets-Trends-for-Future-2Last week, I attended my first International Consumer Electronics Show in Las Vegas. It’s a big  deal: 1.8 million square feet of noisy exhibition space inside a gigantic convention center, 3,200 exhibitors, all of them clamoring for attention, and 152,000 attendees, which explains, among other things, why there were about 1,000 people, no exaggeration, on the line waiting for taxis at the airport. All against the backdrop of Vegas.

I was there to moderate a panel about conflict minerals for Intel, about which, more below, but I have to say that I was underwhelmed by the rest of the show. Most of the gadgetry on display at the show struck me as expensive or useless, or both. No, I don’t want or need an 85-inch bendable TV. No, I don’t want or need wearable computers. (Nor does my dog need an integrated health and wellness platform.) The BMW i3 is a very cool new electric car but I am perfectlyu capable of making my own restaurant reservations, thanks, and I have Pandora on my phone, so I don’t need it built into the vehicle.

In fact, I have just about everything electronic or digital that I need on my phone, my iPad and laptop. As an industry expert named Brian Lam told Nick Bilton of The Times in this excellent summary of CES:

“You only need a phone and a tablet and a laptop, and maybe you need a TV and some headphones, but that covers 90 percent of the needs for 90 percent of the population,” said Mr. Lam, the editor of The Wirecuttera gadget website. “But this industry that employs all of these engineers, and has all of these factories and sales people, needs you to throw out your old stuff and buy new stuff — even if that new stuff” is only slightly upgraded.

That said, I enjoyed learning about the issue of conflict minerals, and meeting Intel’s CEO, Brian Krzanich, who has led the company (and the electronics industry) effort to do something about the fact that the sales of tantulum, tungsten, tin and gold are helping to finance a two-decade old war in the Democratic Republic of the Congo.

I wrote about conflict minerals today for Guardian Sustainable Business. Here’s how my story begins:

This year’s Consumer Electronics Show in Las Vegas showcased 110-inch curved TV sets, watches that monitor your vital signs, self-driving cars … and the technology industry’s efforts to curb violence in the war-torn Democratic Republic of the Congo.

Those efforts are being led by Intel, the giant (annual revenues of $52bn) maker of microprocessors for computer, tablets and mobile phones, among other things, and its new CEO, Brian Krzanich.

Near the end of a high-profile keynote address in which he demonstrated “smart earbuds”, 3D printing, advances in video gaming and an embedded processor designed to enable “wearable computing“, Krzanich paused and said:

“Okay. I’m going to switch gears for a minute now. … This is not an issue we would normally talk about at CES, but it is an issue that is very important and personal to me. That issue is conflict minerals.”

After he showed a somber video about the devastation in the Congo, where more than 5 million people have died since 1994 – many killed by armed groups using profits from the mining of four minerals, tantulum, tungsten, tin and gold – Krzanich promised that every Intel microprocessor will henceforth be conflict-free. The world’s first conflict-free processors will be validated as not containing minerals sourced from mines that finance fighting in the Congo, he said.

The story goes on to say that not all companies are on board with the effort to curb conflict minerals. In fact, the US Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers have filed a lawsuit challenging a provision of the Dodd-Frank financial reform law that requires companies to report on their use of conflict minerals.

So this unorthodox, corporate-backed antiwar effort has sparked its own backlash–from business groups. It’s remarkable how the chamber winds up on the wrong side of so many issues.

You can read the rest of my story here. If you are really interested in the topic, here’s the video of my panel with Krzanich, Sasha Lehznev of the Enough Project and the actor and activist Robin Wright, who, I was pleased to read, won a Golden Globe last night for her performance on House of Cards.

[Disclosure: Intel paid me to moderate the panel at CES.]