PR firm Edelman has more than a PR problem

640px-Edelman_Logo_ColorI’m an admirer of Edelman, one of the world’s biggest and most respected PR firms, and I’m friendly with a number of people who work there. The firm has been ahead of the curve on corporate-responsibility issues, managing effective campaigns for the likes of GE and Walmart. Richard Edelman, who runs the place,  approached me about coming to work for Edelman after I was laid off from Fortune at the end of 2008 and, while I had some great conversations with their senior execs in New York, I ultimately decided to stick with journalism.  (Disclosure: I did a very limited amount of consulting work with Edelman in 2009. It didn’t suit me well.)

Part of the problem with big PR firms — the same goes for big law firms and accounting firms — is that, for the most part, they need to take whatever work comes in the door if they want to keep their door open and keep their people employed. (Edelman, which is privately held, has more than 5,000 employees in 65 offices around the world. This need to grow is even more intense at the publicly-owned PR shops.) Some of the work that comes in will be unseemly. Lately, this has become a problem for Edelman, and for its reputation–as I wrote today for Guardian Sustainable Business.

Here’s how my story begins:

A 1930s union song, popularized by the late great Pete Seeger, asks pointedly: “Which side are you on, boys? Which side are you on?”

On the issue of climate change, that question now confronts Edelman, one of the world’s largest and most admired public relations companies.

In the wake of a survey of the top 25 global PR firms by the Guardian and the Climate Investigations Center, released 4 August, [Edelman said:]

Edelman fully recognizes the reality of, and science behind, climate change, and believes it represents one of the most important global challenges facing society, business and government today. To be clear, we do not accept client assignments that aim to deny climate change.

Beyond that, for nearly a decade, Edelman has built a reputation as the go-to PR firm for corporate sustainability by managing campaigns for the likes of GE (“Ecomagination”), Walmart and Unilever. Richard Edelman, the firm’s high-profile president and CEO, blogs about having dinner at the home of Jeffrey Sachs, his Harvard classmate and a noted climate hawk, and quotes Sachs as saying that “the world is on a very dangerous path.”

And yet.

The Edelman firm works for the American Petroleum Institute, the Washington-based trade association for the oil and gas industry, which opposed the 2009 Waxman-Markey climate change bill favored by some energy companies and utilities, supports the Keystone XL pipeline and exploration of the Canadian tar sands and says, in limp language on its website, that burning fossil fuels “may be helping to warm our planet.”

Until recently, Edelman worked for the Alliance for Northwest Jobs and Exports, a coalition of coal, mining and railroad interests that promotes coal-export terminals in the Pacific Northwest that are strongly opposed by environmental groups. Another Edelman client is said to be ALEC, a conservative lobbying group that opposes regulations on carbon pollution. GE, Walmart and Unilever are among about 70 companies that have reportedly cut their ties with ALEC, although not over the climate issue.

So … which side are you on, boys?

Elsewhere in the press, including in The Times the other day, this has been covered as a PR “faux pas” for the big PR firm. That’s accurate: Edelman bungled its initial reply to the Guardian survey, after which Richard Edelman made matters worse by calling a reporter and saying that a senior exec at the company had been fired as a result. Embarrassing? Sure, but we all make mistakes.

The harder and more important challenge for Edelman and others will be to navigate the climate controversy going forward. The firm cannot be seen as a “thought leader” (ugh, hate that phrase) on corporate sustainability and work on behalf of coal exports or the American Petroleum Institute, which has opposed regulation of greenhouse gases.

Will Edelman have to give up its fossil fuel clients, in a Bill McKibben-style divestment? I think not. Just about all of us depend on fossil fuels to get us around and heat our homes, so we’re not about to give up fossil fuels. But I do think that Edelman (and others) may  have to make distinctions between those fossil-fuel companies that are willing to be part of a constructive solution to the climate crisis–Shell, say, or BP in its better days–and those companies or trade associations that want only to obstruct. That’s not an easy distinction to make, but so it goes.

I had a couple of interesting reactions today to my Guardian story, both on background. This came in via email from a former Edelman employee:

I’ve personally struggled with this a lot….I worked really hard on sustainability for Walmart, GE and others while at Edelman and truly believed in our work. At the time the support was top-down from people like Richard Edelman and Leslie Dach, but once Leslie left, the DC office took on API and dove into the “energy” space. I’ve been very uncomfortable with the DC office’s transformation and am personally glad to see their hypocrisy being exposed. You can’t work both sides of the issue.

Actually, many PR firms, law firms and accountants do work both sides of the issue, on the grounds that everyone is entitled to a flack/lawyer/accountant. The trouble with that is their companies then don’t stand for anything beyond providing service to whoever pays the bills.

I asked an Edelman friend/colleague for a reaction, and got this reply:

 I am glad to work at one of a very few large PR companies who have exclusions that include climate change denial in addition to the “usual” easy targets of tobacco and guns. But the tough part comes in when it deals with how we implement that exclusion. And that is the positive from all of this – we are now having a really robust and tough internal discussion on this.

 I actually do think that Edelman is one of the few large agencies or service companies where we can develop a true leadership position on this. It is very much a values driven company and if we can’t get it right here then I don’t have much hope for public companies.

What an interesting test of a company’s values.

The end of garbage

p12608In nature, nothing goes to waste. The excrement of one species (forgive me if you are reading over breakfast) becomes food for another.

Why can’t we design the industrial economy to be like nature?

This isn’t a new idea. During the American Revolution, iron pots were melted down to make armaments. I take notes with a pen made out of recycled bottles. The gospel of “natural capitalism” or “cradle to cradle” has been spread by  such pioneering environmental thinkers as Paul Hawken and Bill McDonough.

Lately, though, I’m pleased to report, the idea of eliminating waste is gaining traction among big global companies, which increasingly are talking about — and acting to bring about — what is called the circular economy.

As regular readers of this blog know (see this and this), I’ve long been excited by the idea of a zero-waste world. I wrote a story for FORTUNE called The End of Garbage in 2007. Recently, I revisited the topic for Ensia, a magazine and website about environmental solutions.

Here’s how my story begins:

Don’t let fashion go to waste,” says H&M, the global clothing retailer that booked $20 billion in revenues last year. So I brought a bag of old T-shirts, sweaters and khaki pants to an H&M store in Washington, D.C., where it took them, no questions asked, and gave me a coupon for 15 percent off my next purchase. H&M takes back clothes in all of its 3,100 stores in 53 countries.

Next, I pulled an ancient iPod and an iPhone 4S with a cracked screen from a desk drawer. On the website of a company called Gazelle, I answered a few questions and learned that the company would pay me $37 for the pair. (Without the cracked screen, the iPhone would have been valued at $135.) I printed out a free shipping label, and they were on their way. Not to landfills, but to a new life.

Meanwhile, not far from my home, a garage owned by the Washington Metrorail system is about to undergo a makeover. Existing lighting fixtures will be replaced by LEDs that are expected to reduce energy usage by 68 percent. The LEDs will be manufactured, owned and monitored by Philips, which will take them back when they need to be repaired or replaced.

Welcome to the emerging world of the circular economy.

I go on to write about McKinsey & Co., Philips, Sprint, Best Buy, all of whom are getting serious about circular business models. This is getting real, folks. You can read the rest here.

A smarter approach to biofuels

A field of sorghum–it grows tall and fast!

The US biofuels industry has not covered itself in glory. It has consumed billions of dollars in taxpayer dollars, as much if not more from investors and in return delivered economic and environmental benefits that are murky at best, at least according to its critics.

You’ll hear a different story from the industry, which is desperately trying to retain its support in Congress and the White House. The  importance of the Iowa presidential caucuses virtually assure that no candidate for president can oppose support for corn ethanol, the dominant US biofuel. It was the Bush administration, you may recall, that launched the current push into biofuels, with the enthusiastic support of a corn state US Senator Barack Obama.

The thing is, biofuels need to be part of a low-carbon US economy. About 40 percent of emissions come from transportation–cars, trucks, trains, planes, buses, farm and construction equipment, etc.  These existing fleetss can’t be electrified en masse, anytime soon, if ever. So for decades ahead it’s fossil fuels or biofuels–an easy choice.

That said, it has become increasingly clear that corn ethanol “has proven far more damaging to the environment than politicians promised and much worse than the government admits today,” according to this excellent analysis from Dina Capiello and Matt Apuzzo of the Associated Press.

In their 2013 investigation, they write:

As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies..

And as for the climate benefits of corn ethanol, the AP reporters say:

The government’s predictions of the benefits have proven so inaccurate that independent scientists question whether it will ever achieve its central environmental goal: reducing greenhouse gases. 

Great.

The trouble is that corn needs fertilizer (which is made from natural gas), requires irrigation (at least in some parts of the country) and, in an ideal world, would be used to feed people (or animals, if you insist), but not cars and trucks.

About the best thing you can say about corn ethanol is that it will pave the way (oops, that’s an unfortunate metaphor) for advanced biofuels that are cleaner and greener. Some of these are on the way–a bunch of cellulosic ethanol plants are scheduled to begin commercial operations this year, including the Project Liberty plant from Poet and DSM in Emmetsburg, Iowa, and a DuPont facility in Nevada, Iowa. Both will use corn waste.

Why, though, can’t we make biofuels from crops that are designed and bred for energy? That’s the question that led a young entrepreneur named Anna Rath to start a company called NexSteppe, whose current focus is sorghum. I invited Anna to Fortune’s Brainstorm Green conference in May, where she won the “Great Green Ideas” competition, and wrote about NexSteppe the other day for Guardian Sustainable Business.

Here’s how my story begins:

As scientists around the world research biomass feedstocks — trees, shrubs and grasses that are designed to produce energy — a California startup called NexSteppe is betting that fast-growing, drought-resistant sorghum will emerge as a crop to sustainably fuel cars, trucks and power plants.

Sorghum, a millenia-old cereal grain, today feeds animals and people. It is turned into flour, syrups and beer, and used in gluten-free products. In Asia, sorghum is made into couscous, and across Africa, it’s consumed as a porridge.

Last year, though, NexSteppe introduced two new brands of sorghum seeds, dubbed Palo Alto and Malibu, that were bred expressly to be energy crops. They grow on marginal land and in a variety of climates, and they climb to a height of 20 feet after only four months of growth.

“Sorghum is naturally very heat and drought tolerant,” says Anna Rath, NexSteppe’s founder, president and CEO. “It originated in Africa. It’s a camel of a crop, if you will.”

Although NexSteppe has done almost no marketing outside of Brazil, its biggest market, the company’s sorghum is now being grown by farmers in 15 countries, including China, India, South Africa, Germany, Canada and the US.

Sorghum may not be the ideal feedstock for biofuels. It’s used for food, after all. But it appears to offer major advantages over corn.

More important is the idea behind NexSteppe–that we should breed crops for energy, just as we have very successfully bred crops for food since the invention of agriculture. Government and university scientists are trying to do just that, as the story goes on to say. You can read the rest here.

Is the sharing economy really green?

sharing1So many assumptions underly conventional wisdom about all things green. That biofuels are better for the planet than burning fossil fuels. That bans on plastic bags help the environment. That electric cars reduce CO2 emissions. That eating meat is bad for the climate.

All these things are true, I believe. But what I believe doesn’t matter. The question is, where’s the evidence? On biofuels, plastic bags and electric cars, the environmental impacts depend on where the crops to make biofuels are grown, what replaces plastic bags, the electricity mix that powers the electric car and how the cows that went into your burger were raised.

The point is, the “environment” is an extraordinarily complex system, as is the economy. That’s the underlying message of a story that I wrote last week for the environmental website Ensia headlined Is Sharing Really Green?

Here’s how it begins:

I’m a big fan of the sharing economy. On a recent trip to San Francisco, I stayed in a house I found onAirbnb and made my way around the city using uberX. I’ve written favorably about house sharingcar sharingbike sharingand getting rid of stuff you no longer want via yerdle. At environmental conferences, I’ve listened to evangelists for the sharing economy such as Lisa GanskyRobin Chase and Andy Ruben. Participating in the sharing economy can save money, open people up to new experiences and build a sense of community among strangers.

But I’m not convinced the sharing economy delivers the environmental benefits its proponents claim.

Because the sharing economy enables more efficient use of underutilized assets — a car that might otherwise sit in a driveway, an extra room in a home, an electric drill or even a wedding dress — conventional wisdom holds that the sharing economy is “green.” With a little help from Google, it’s easy to find headlines like “How Web Sharing Sites Can Save the Planet” and “The Sharing Economy for a Sustainable Future.” Graham Hill, the founder of Treehugger and LifeEdited, has said the sharing economy “makes a lot of sense financially and environmentally as well.” In her book, The Mesh: Why the Future of Business Is Sharing, entrepreneur and investor Lisa Gansky writes: “Using sophisticated information systems, the Mesh [her term for the sharing economy] also deploys physical assets more efficiently. That boosts the bottom line, with the added advantage of lowering pressure on natural resources.” In an interview with Treehugger, Roo Rogers, co-author with Rachel Botsman of a book called What’s Mine is Yours: The Rise of Collaborative Consumption, declared: “In my opinion — having been an environmentalist all my life — collaborative consumption has the potential to have the biggest environmental impact that we could ever have hoped for.”

But where’s the evidence? It’s hard to find.

I probably could have written that the evidence is non-existent, but the sharing economy is so new and so hard to measure that it’s no surprise that the case for its “green” benefits remains unproven.

I hasten to add that there are still good reasons to patronize Airbnb or Zipcar or Rent the Runway or the many other sharing sites that seem to be proliferating. There’s little harm done when we make personal choices based on our assumptions about what’s good for the planet.

But when big companies or, worse, governments set policy without questioning their assumptions, the consequences can be negative on a much broader scale. I’m afraid that happens a lot more often than it should.

You can read the rest of my story here.

General Mills, Walmart, Target and compassion

compassion-wordThe other day, I went to a daylong meditation retreat about lovingkindness. One of the themes: how to find ways to bring an attitude of loving kindness not just to friends, but to strangers and even to the most difficult people in our lives. My rabbi, Fred Dobb, with whom I ordinarily spend my Saturdays, touches on a similar theme when he talks about widening our circles of compassion, to go beyond family and friends; the edict to  love thy neighbor extends not just to the folks next door but to the needy around the world. I don’t mean to go all Biblical on you here but it is written in Exodus 23:9: “And a stranger shalt thou not oppress; for ye know the heart of a stranger, seeing ye were strangers in the land of Egypt.”

What does this have to do with corporate responsibility, and sustainability, the topics of this blog? A lot, actually, as I realized when a pair of stories that I wrote for Guardian Sustainable Business were published in quick succession this week. Both stories are about big, publicly-traded companies that seek to enhance shareholder value with considerable vigor. But both, at heart, are also about the idea that good companies increasingly take an expansive, as opposed to a constricted view, of their place in the world, and their obligations to the world.

Yesterday, I wrote a story about General Mills’ new climate policy. Here’s how it begins:

Two months after Oxfam launched a campaign urging food and beverage companies to take stronger action to curb climate change, General Mills has promised to reduce greenhouse gas emissions in its agricultural supply chain and to advocate for government climate policy.

General Mills on Monday detailed its new policy on its website, saying: “The imperative is clear: Business, together with governments, NGOs and individuals, needs to act to reduce the human impact on climate change.”

In a news release, Oxfam praised General Mills as “the first major food and beverage company to promise to implement long-term science-based targets to cut emissions from across all of its operations and supply chains that are responsive to the goal of keeping global temperature rise below 2C.

“It’s a major leap,” said Heather Coleman, climate change manager for Oxfam America.

What’s noteworthy about the General Mills’ policy is that it dig deep into the company’s agriculture supply chain, where its environmental impact is greatest, and that it commits the company to be more politically active on climate issues. Put another way, this big food company is taking responsibility for trying to reduce the environmental impact of oats that go into Cheerios. You can read more here.

Today, the Guardian published my story about an unusual collaboration between Walmart and Target that aims to insure that beauty and personal care products are produced more sustainably. Here’s how that story begins:

In an unlikely partnership, rivals Walmart and Target have joined together, working with suppliers “to improve sustainability performance in the personal care and beauty industry”.

Their first event, the day-long Beauty and Personal Care Products Sustainability Summit, will be held on 4 September in Chicago. It’s being organized by Forum for the Future, a UK-based NGO with an outpost in New York.

Up until now, Walmart, the largest US retailer, and Target, the fourth-ranked retailer (according to the National Retail Federation), have taken divergent paths on sustainability. Why are the two companies now joining forces around the sustainability of soap, toothpaste, hair care products, shaving cream and cosmetics?

The story goes on to say:

It may be – and this definitely falls in the category of informed speculation – that Walmart and Target have come to realize that they are not as powerful as they want to be when dealing with big consumer brands and their suppliers in the chemical and fragrance industries.

The secrecy around ingredients in beauty and personal care products, along with the complexity of chemical formulations, creates information asymmetries. The brands and their suppliers know a lot more about product formulations than the buyers at Walmart and Target. They often tell critics that there’s no readily available substitute for a “chemical of concern.” And they are unwilling to share information about whether they are researching or developing safer chemicals.

An industry insider told me: “There’s so much that’s hidden in these supply chains that even Target and Walmart don’t know what goes into everything on their shelves.”

The point is, Walmart and Target are digging deeper than ever before into their supply chains, seeking to understand the chemicals that go into cosmetics or hair care products, or the impact of packaging.

You can see these shifts across the field of corporate responsibility. Look at the apparel and electronics industries which, over time, have agreed, at least in theory,accept responsibility for the working conditions and environmental practices deep in their supply chains, in places like China and Bangladesh.

Are companies becoming more compassionate? I don’t think so, at least not in the since that people can seek to become more caring. But are they recognizing that the long-term health of their business depends upon their reputations as corporate citizens, not to mention the health of the planet or the safety of the products they sell? Yes, they are. It’s a very slow and imperfect process, but it’s real.

Paul Greenberg’s fish stories

AmericanCatchCoverMuch of what I know about seafood I’ve learned from Paul Greenberg. Paul is an acquaintance and a gifted writer whose new book, called American Catch: The Fight for Our Local Seafood, looks at three iconic American seafood species: New York oysters, Gulf shrimp and Alaska salmon. It’s a sequel of sorts to his previous book, Four Fish: The Future of the Last Wild Food, which I blogged about in 2010.

In the introduction to the new book, Paul describes the impact of globalization on the seafood that we catch and eat in the US:

By all rights this most healthy of food should be an American mainstay. The United States controls more ocean than any other country on earth. Our seafood-producing territory covers 2.8bn acres, more than twice as much real estate as we have set aside for landfood.

But in spite of our billions of acres of ocean, our 94,000 miles of coast, our 3.5m miles of rivers, a full 91% of the seafood Americans eat comes from abroad.

..It gets fishier still. While 91% of the seafood Americans eat is foreign, a third of the seafood that Americans catch gets sold to foreigners. By and large the fish and shellfish we are sending abroad are wild while the seafood we are importing is very often farmed.

…American consumers suffer from a deficit of American fish, but someone out there somewhere is eating our lunch.

Last week, I interviewed Paul by email for Guardian Sustainable Business. I asked him why trade in seafood differs from the global exchange of other goods, the prospects for restoring oysters to New York harbor and a couple of intriguing experiments with community-supported fisheries. You can read his responses here.

There’s encouraging news in Paul’s fish stories. Alaska’s salmon fishermen are in the midst of what could be a successful effort to protect the world’s most productive salmon fishery from Pebble Mine a massive gold and copper mine near Bristol Bay. (The EPA moved to block the mine last week.) Meantime, nonprofit groups in New York are laboring to bring back the oysters that were once plentiful up and down the east coast.

A lifelong fisherman, Paul brings to these stories and obvious passion for his subject and a zest for adventure. (He uncovers and consumes a New York oyster from the muddy waters of the East River.) More than passion, though, goes into a book like American Catch. In the acknowledgements, I learned that Paul’s editor put him through seven drafts of the manuscript. The result, a rarity in this world of 24-7 news, instant analysis, and blogging on the run, is a work of journalism that delivers both insight and enormous pleasure.

Fair Trade USA, growing and still controversial

fairtrade_6833958232_076a8a019b_bFair Trade is an elegant idea. It’s an attempt to make globalization work for the world’s poor. Those of us in rich countries agree to pay a bit more for whatever it is we are buying — coffee is by far the No. 1 Fair Trade commodity — and, in exchange, we are assured that the farmers and workers at the other end of the supply chain are treated fairly.

If only it were that simple.

Today, in the US, there are no fewer than seven Fair Trade and Fair Trade-like labels. You can find an analysis of them here, if you so choose. The trouble is, they are competing in what remains by any measure a niche market.

Paul Rice, the founder of Fair Trade USA, formerly Transfair, wants to change that. I went to see him last week in Oakland, CA., and wrote about his efforts the other day in a story for Guardian Sustainable Business.

Here’s how my story begins:

Paul Rice, the hard-charging CEO of nonprofit Fair Trade USA, recently toured the Brooklyn headquarters of furniture company West Elm, along with former president Bill Clinton and West Elm’s president, Jim Brett. They were there to celebrate West Elm’s commitment to handcraft products, including the first Fairtrade rugs, which are made in India. “You can have a huge impact on the wage structure in India,” Clinton enthused. “Consumers will buy these. They’re beautiful, besides.”

Fairtrade rugs? What’s next? A lot more than coffee in church basements, it turns out. “We’re talking about furniture, we’re talking about linens, we’re talking about all kinds of things,” says Rice, when we met last week at Fair Trade USA’s offices in Oakland, California. “This move into the manufacturing sector puts us on the threshold of something really big.”

Fair Trade USA is in fast-growth mode. This fall, Patagonia and PACTwill begin selling Fairtrade apparel, made in factories that they say will meet strict environmental and social standards; a small company called Oliberté already sells Fairtrade shoes. Several years ago, Fair Trade USA formed a partnership with a nonprofit startup called Good World Solutions, which has developed mobile technology to connect big companies to the farmers and workers in their supply chains. Meantime, Fair Trade USA is working to certify a bell pepper farm in British Columbia, Canada, expanding the movement beyond its roots in the global south.

This flurry of activity has brought Rice lots of attention, some of it unwelcome. His supporters say that he works tirelessly to expand the impact of fair trade. Critics accuse him of abandoning its principles. As Jonathan Rosenthal, a co-founder of the co-op Equal Exchange, told The Nation: “Paul is not afraid to think and act on a big scale. That’s one of his great gifts. And he’s willing to cut any corners to get there. That, to me, is one of his great faults.”

The disagreements about what constitutes authentic Fair Trade can get pretty arcane pretty quickly. Some people, for example, argue that a chocolate bar should not be labeled Fair Trade unless the chocolate and the sugar were both procured from worker owned co-ops; others say the chocolate alone should do it. Small differences often matter, but in this arena, it seems to me that the priority ought to be growing the idea and practice of Fair Trade, even if compromises must be made along the way. As the movement grows, the bar can be lifted.

If you want to know more, see my 2012 blogpost, A schism over Fair Trade. You can read the rest of my Guardian story here.

GMOs, engineered to make better food

GMO_s_300_300_100With some reluctance, I’m again writing this week about  genetically-modified organisms. My reluctance stems from the fact that on this topic, most people’s minds appear to be made up. People tend to be for ‘em or agin’ em, and for whatever reason, most aren’t open to listening to arguments that challenge their settled view.

My own views are undecided when it comes to the debate over labeling, and the environmental benefits, if any, of GMOs. I’m persuaded that the health risks of eating GMOs, which most Americans do every day, are zero or close to zero although, again, I’m not going to try to change the minds of those who believe otherwise. I’m concerned, finally, about the intellectual property issues surrounding GMOs, although, again, this is complicated because it takes many years and millions of dollars of investment to develop new crops.

Today’s story took root (pun alert!) last winter when I visited the Johnston, Iowa, headquarters of Pioneer, the big seed company owned by DuPont. (It’s near Des Moines, where I moderated a panel on food security at Drake University.) I toured a couple of labs — one for conventional breeding, another for genetic engineering, and chatted with scientists and executives. Pioneer has a fascinating history, by the way: It was founded in 1926 by Henry A. Wallace, who learned about plants as a young boy from his neighbor, George Washington Carver, and went on to become FDR’s secretary of agriculture and vice president.

In any event, while at Pioneer, I heard about genetically-engineered soybeans that have been branded as Plenish. They were designed to make soybean oil that is free of trans fats, and thus healthier than conventional soybean oil. Earlier, I’d heard about a biotech potato under development called Innate, which reduces black spots and thereby means fewer potatoes are wasted. These are among the first biotech crops to promise direct, tangible benefits to consumers, and I decided that was worth a story for Guardian Sustainable Business. Here’s how it begins:

It’s easy to understand why many Americans are unenthusiastic about genetically modified organisms (GMOs). Although supermarket aisles are lined with foods made from biotech crops – most cereals, frozen foods, canned soups, vegetable oils, soft drinks, baby formula, tofu and even milk contain GMOs – consumers have yet to see tangible benefits from GMOs. The biotech industry has been slow to develop food that is healthier, better tasting or longer lasting – to its political detriment.

As Food and Water Watch, a critic of GMOs, has argued, hyperbolically: “The only ones experiencing any benefits from GE crops are the few, massive corporations that are controlling the food system at every step and seeing large profit margins.”

That is about to change.

Pioneer, the big seed company owned by DuPont, is bringing to the market a brand of genetically engineered soybean called Plenish that the company says will produce a healthier oil, free of transfats. Plenish oils have been designed to replace the unhealthy partially hydrogenated oils used to fry food and to keep cookies and crackers, crackers and chips from going stale.

Meantime, the JR Simplot Co, the US’s biggest potato processor, is seeking regulatory approval for genetically engineered potatoes branded as Innate. Simplot says the Innate potatoes will limit black spots from bruising, deliver improved taste and reduce the formation of acrylamide, a naturally occurring chemical that has been identified as a potential carcinogen and is created when potatoes are cooked at high temperatures.

You can think of these new products as GMOs 2.0 – biotech foods designed not just for farmers but for consumers, too. Other examplesinclude the Arctic Apple, which like the Innate potato is engineered not to go brown, and a soybean oil enriched with Omega-3 fatty acids from Monsanto.

You can read the rest of the story here.

Has success spoiled Green Mountain Coffee?

image“Doing well by doing good” has become a cliche on the corporate-responsibility circuit. And for good reason–smart companies that serve their customers, provide opportunity to their workers and connect with their communities are likely to deliver superior shareholder returns.

But doing well can complicate the desire to do good. That’s been the challenge lately for the company formerly known as Green Mountain Coffee Roasters and now called Keurig Green Mountain Coffee.  Thanks to the sales of Keurig coffee machines and literally billions of single-serve coffee pods — which cannot be recycled — the Vermont-based firm has been on a tear, rapidly growing its revenues and stock price, while generating enormous amounts of waste. And to what end?

My story about Green Mountain was posted today at Guardian  Sustainable Business.  With apologies for my formatting problems today (I’m working on an iPad) here is a link that you can copy into a browser –  http://flip.it/sSCuG  – and here is how the story begins:

Not long ago, Green Mountain Coffee and it’s chief  executive, Bob Stiller,  were hailed as corporate responsibility pioneers. Green Mountain was the world’s largest buyer of Fair Trade coffee. The company offset the carbon emissions of its energy use and won a “green power” award from EPA. Twice, it topped CR Magazine’s list of the 100 best corporate citizens.

Today, Keurig Green Mountain (KGM), as it is now known, remains a corporate-responsibility standout. But the Vermont-based firm has a dark stain on its reputation. Since acquiring Keurig, the inventor of a single-serve coffee machine and its patented K-Cups, the company has become the driving force behind what critics say is an environmental scourge – the throwaway coffee pods made of plastic and aluminum foil that waste energy and materials, and are all but impossible to recycle.

Meanwhile, Stiller, an ex-hippie who briefly became a billionaire, was forced out of KGM after going on a spending spree with borrowed money, acquiring a 164-foot yacht, a $10m, 7,500-square-foot Palm Beach mansion and a $17.5m Manhattan condo formerly owned by New England Patriots quarterback Tom Brady. Green living, that’s not.

What went wrong with Green Mountain? In a word, success. Its story challenges easy pieties about doing well by doing good. This is a company that has done very well – but only by setting aside, at least for now, the environmental values it once held dear.

Green Mountain shareholders certainly aren’t complaining. Shares of Keurig Green Mountain (NASDAQ:GMCR) have grown 50% in the last year and 548% in five years. Sales have skyrocketed to $4.4bn last year from $492n in 2008. Those Keurig machines and the little plastic cylinders that pop into them have driven that growth, accounting for more than 90% of revenues.

Keurig Brewing Systems are now used in 16m US homes, about one in six, the company estimates. In 2013, KGM says it sold roughly 8.3bn “portion packs”.

To be fair, Keurig Green Mountain recognizes that the waste created by its coffee pods is a problem and promises to reduce it. Monique Oxender, the company’s senior director of corporate responsibility, told me: “Recycling is one of those areas where we have a lot of work to do, and we know that.”

This isn’t a simple story.  Keurig Green Mountain says it intends to make 100% of K-Cup packs recyclable. And the company argues that the single serve machines save resources in the the coffee-growing supply chain because the machines waste less coffee than traditional brewing methods.

But Keurig also has announced alliances with Coca Cola and Campbell Soup to develop single serve machines for cold drinks and soups. In the company’s latest annual report, CEO Brian Kelly writes: “Our mission is to have a Keurig® System on every counter and a beverage for every occasion.” That sounds like a recipe for a whole lot more waste.

By now, we should know better. As author and activist Amy Larkin told me:  “We now understand waste, water usage, manufacturing, mining, freight transport and packaging and their impact on the world. It seems madness to develop a product line that increases all of the above.

That said, Green Mountain remains a sustainability leader in other arenas, particularly as a strong support of the Fair Trade movement. I’m told that its coffee buying team is one of the most progressive and creative in the industry.

In other words, it’s complicated–a lot more complicated than “doing well by doing good. ”

 

The elusive fortune at the base of the pyramid

cimg7634It’s been an exceptionally busy week, beginning with the 2014 edition of Fortune Brainstorm Green (selected videos are online here) and ending with a holiday weekend visit from my new grandson, so I’m going to quickly post a link to my latest story for Guardian Sustainable Business.

It’s a long-ish story about doing business at the bottom of the pyramid, an idea popularized by the late C.K. Prahalad in a book published a decade ago. Here’s how the story begins:

When CK Prahalad‘s book, The Fortune at the Bottom of the Pyramid, was published in 2004, the book made an immediate splash. Its argument was irresistible: The world’s poorest people are a vast, fast-growing market with untapped buying power, Prahalad wrote, and companies that learn to serve them can make money and help people escape poverty, too.

Microsoft founder Bill Gates called the book “an intriguing blueprint for how to fight poverty with profitability”. BusinessWeek’s Pete Engardio described Prahalad, a professor at the University of Michigan business school, as a business prophet. He was awarded honorary degrees and sought out by CEOs.

Ten years later, businesses big and small continue to pursue profits at the bottom of the pyramid. The global uptake of mobile phones has proven that poor people will buy cell service if it’s available at low prices. (It costs a fraction of a cent per minute in India.) Single-serve packages of shampoo, toothpaste and soap dangle from shelves of tiny storefronts in rural villages. Products ranging from eyeglasses to solar panels are being designed and marketed to people earning $2 a day.

The bottom-of-the-pyramid (BOP) market leader, arguably, is Unilever, with its Anglo-Dutch colonial heritage and a chief executive, Paul Polman, who is determined to improve the world. Unilever generates more than half of its sales from developing markets, with much of that coming from the emerging middle class. Its signature BOP product is Pureit, a countertop water-purification system sold in India, Africa and Latin America. It’s saving lives, but it’s not making money for shareholders.

And there’s the rub. If there is a fortune to be made at the bottom of the pyramid, it remains elusive. Partly that’s because doing business with the poor is unavoidably complex, and partly that’s because the notion was oversold, says Mark Milstein, director of the Center for Sustainable Global Enterprise at Cornell’s business school and an expert on the BOP.

“I haven’t seen anyone making a fortune,” Milstein told me. “Unilever’s made money on some products, but they’ve been challenged. Other companies are making profits, but not enough to matter to their organization.”

The story goes on to report on successful and not-so-successful efforts to do business with the world’s billion or two poor people. We’ll be considering this topic again next month at the Guardian, with a live tweet chat on Tuesday, June 10, at noon. You can read the rest of my story here.