Net Impact–MBAs and More

There have been numerous changes to MBA programs over the past several years. One of the more refreshing ones is the increasing prominence of an organization called Net Impact. Net Impact is an organization of business students (and interested graduates and others involved in the business community) who believe that the “power of business can be used to improve the world”. From its beginnings as the Students for Responsible Business in 1993 with 6 chapters (in 1994 I started the Penn State chapter of that organization), Net Impact has evolved to over 200 chapters, including over 120 at leading graduate schools across the world.

Net Impact’s reach is very impressive. The core of the organization is the chapters. All of the top MBA programs have a student chapter. Many U.S. cities including Boston, Philadelphia, San Francisco, New Haven, and several abroad (Seoul, Tokyo, London, etc.) have professional chapters also.

In addition to the chapters, Net Impact also has national and international conferences. The 2009 conference featured the CEO of GE, Jeffrey Immelt as well as Cornell’s president David Skorton, speaking on innovation in a green economy. The European conference a couple of years ago featured the theme: Sustainable Prosperity—Taking on the Global Challenge.” Additionally, numerous organizations use Net Impact as a recruiting vehicle to help with various sustainability efforts.

Of equal interest are the ‘Issues In Depth Calls”. These are conference calls with representatives of companies implementing various types of social engagement—including but not limited to sustainability per se. Upcoming topics for these calls include “Driving Sustainable Growth (Dupont) and “The Holy Grail of Sustainable Culture” (FMYI). Other events have covered very diverse topics, including: “Writing a Sustainability Report”, “Green Jobs”, “How to Develop an Eco-Purchasing System”, and “Green Benefits”, etc.

When I found out about the organization, I eagerly joined my local professional chapter (Philadelphia). I was very happy to find out that it was a very active chapter—with lots of events and programs. The programming schedule has included monthly book clubs, periodic volunteer days, occasional happy hours, panel discussions, research projects, and more. Most important to me, it is local, so I can actually participate in the programs.

Meeting other like-minded people (such as those in the Philly chapter) is a great way to help me incorporate sustainability into my own life. For example, my wife and I love fish. Via Net Impact, I have heard about a seafood store in Philadelphia that specializes in sustainable seafood (Otolith Seafood). I am looking forward to enrolling in their Community Supported Seafood program in the spring. Without Net Impact, I would have had no idea that this program even existed.

The Big Mac Has Left the Country

The era of Big Macs has passed in the small country of Iceland. This is due mostly to the aftereffects of the fiscal crisis that gripped Iceland last year. As a result, the local McDonald’s saw its costs double. In order to make the Big Mac profitable, the local McDonalds franchise owner would have had to charge over $6 for it. Compare that to the price in the United States (about $3.50). The competing Icelandic offerings using locally sourced produce (and other ingredients) now cost noticeably less than the Big Mac.
In other words, the locally sourced products not controlled by the global corporation have become the cheaper option. We usually hear that the “sustainable” or “ecologically friendly” way actually makes the product economically uncompetitive. In this case, the exact opposite happened. Admittedly, the increasing expense of the Big Mac ingredients is the result of a perfect storm of a national financial meltdown and corporate dictates. But the end result is that the Big Mac became economically unsustainable, and the business that it supported did not survive—at least in Iceland.
Put another way, in times of severe economic stress, the Big Mac business in Iceland turned out to not be very secure after all. Meanwhile, the competing businesses based on locally produced foods turned out to be secure enough to survive the economic storm that engulfed Iceland last year. In fact, they are so secure that they have a new entrant—the old McDonald’s franchisee.
The coda to the story is a classic entrepreneurial story. Since the McDonald’s business is no longer viable—the franchisee looked around for one that was. The answer turns out to be one also based on local (Icelandic) produced foods. Even better, he hopes to be able to keep all 90 of his employees in his new venture.

Interesting websites:

http://www.wacotrib.com/money/content/shared-gen/ap/Finance_General/EU_Iceland_McDonalds.html

Parenting and Sustainability

There is nothing like the birth on one’s first child to command one’s attention—as in my first child, (David Joshua), a couple of weeks ago. The demands of being a parent can be rather overwhelming; sustainability has somehow become slightly less important than 2 am diaper changes. Hopefully I can incorporate my values of sustainability into my parenting. This is both a short term and long term issue (as is parenting, for that matter).

The most obvious environmental issue for new parents is diapers—specifically cloth or disposables. However, since I firmly believe that there is more to parenting than diapers, I will for now not discuss cloth vs disposable diapers (I will in a future post). Babies have other needs beyond being diapered—like clothes, food, and myriad other “stuff”. If I did not know this before my wife got pregnant, I certainly discovered it when filling out the registry at the baby store.

This was not a happy experience for me. I wanted to be as sustainable as possible, but we needed so much stuff. I was now part of the demand for more baby “stuff”. I had one general success in that I did manage to find some sheets, mattress pad, nursing pads, etc. made from organic cotton vs regular cotton. I figured that by buying organic cotton when possible I was doing less damage to the environment. I highly recommend Confessions of an Eco-Sinner, by Fred Pearce. Pearce examines the sources of many items of Western consumerism, including cotton clothes (and other items), Suffice it to say that conventional cotton production has devastated many areas where the cotton is produced. Also, we have found the organic cotton to be softer—it must be the lack of hard chemicals in the production.

For other purchases, sustainability was not the operative factor. For example, we found a double sided mattress that had a harder infant side and softer toddler side. The mattress with the organic cotton could not compete. And being able to lift the mattress in the middle of the night to change a sheet was a key consideration. So this is one of those times when sustainability was nudged out as a basis for purchase of a particular product. This also applied to the stroller—the operative criteria were light weight and ease of collapsing. I do not know what specific materials are in it, but I know that it is really easy to work with.

Another critical question new parents face is whether to breastfeed or to use formula. Breastfeeding is clearly better for everyone involved—if it works. While both Mommy and Baby are set up for breastfeeding, success is by no means guaranteed. We are very lucky; for us breastfeeding is working, and we can avoid the chemicals and expense of formula. But feeding the baby is by far the paramount concern; if breastfeeding did not work, we would have gone to formula with no questions asked. (After breastfeeding, we will continue to buy as much organic and/or relatively locally sourced food as possible).

The above is only a very small part of the stuff needed to raise a baby, toddler, and child. From a sustainability perspective, parental demand for stuff increases as the baby becomes a toddler, then a child, then a teenager, and then a young adult. Parents with siblings or friends who have had children have an advantage when it comes to sustainability. This is because these siblings or friends give them the clothes, toys, etc that their own kids have outgrown. So they do not need to buy a new item, thereby demanding less stuff. Another alternative is consignment shops and buying used, but this may not always be feasible.

We were told that parenting will completely change our lives. On one level, it has; but on many others, it has not. We still have the same values this month as we had last month before David was born. I still want to incorporate sustainability into my life as much as possible. How much I can do so while being a parent at the same time is an open question.

On the Road Again

The automobile, with its gas engine, is perhaps the strongest symbol of an economy powered (and driven) by fossil fuels. It may surprise the reader to learn that at one time, the gasoline engine was only one of numerous competing technologies. In the early 20th Century, the gasoline engine won. In the early 21st Century, there is another competition for engine technology. The incumbent is the standard gas engine, while some of the challengers are gas-electric hybrid, electric only, diesel, diesel-electric hybrids, etc. From a sustainability perspective, none of the challengers have to dethrone the incumbent; they just need enough people to buy them to keep them in business. If these technologies are commercially successful at all, then the amount of petroleum needed for transportation will go down, even if only incrementally.

Model years 2010 and 2011 (and to a lesser extent, 2012) are shaping up to be critical years for automobile engine technology. The most well known challengers are gas-electric hybrids like the Toyota Prius, Honda Insight, Ford Escape, etc. In 2010, for the first time in recent memory, a primarily electric car will be on the market, courtesy of the GM Chevy Volt—40 mile range, around $40,000. Nissan is promising a 100- mile range vehicle (the Leaf), available in the US by the end of 2010. Renault’s all electric entry, announced at the recent Frankfurt Auto Show, will follow in 2011. (If you are a lucky New Yorker, you are road testing an all-electric BMW Mini Cooper slated for launch in 2012). All of these electric cars feature rechargeable batteries.

At the same time, other “greener car” technologies are in various stages of development. Companies like Toyota and Ford are expanding and improving their hybrid product line. Volkswagen is testing diesel-electric models. Diesel is also gaining more attention as a fuel-efficient alternative to the conventional gas engine. Subaru is one company (along with Volkswagen) working on this kind of technology. And, other companies are trying to make the conventional gas engine more efficient with better gas mileage.

All of this activity implies that the manufacturers feel that a market exists to buy some kind of electric or hybrid car. Does it? That is open question. Some elements of the auto industry are rather dubious. The head of Audi North America has been quoted as saying that no one will pay $40,000 for a Chevy Volt (electric) when there are numerous competitive gas engine options for $25,000. And there have many comments to the effect that buying a Toyota Prius does not make sense because you cannot save enough in gas money to make up for the hybrid price differential. So therefore, the argument goes, only a few people will buy these cars. This flies in the face of the success of the Prius and other hybrids, especially during last year’s spike in gas prices.

Even if the “green car” buyers are only a segment—so what? There are many segments of the auto market. There are SUV buyers, truck buyers, muscle car aficionados, family minivans, cruisers, etc. Those segments thrive. The evidence is anecdotal, but I do think that there are enough people to make a segment of buyers for some version of electric or hybrid cars. After all, almost all of the world’s carmakers are developing some sort of non-gas engine technology.

The skeptics are also forgetting that new technologies in many fields tend to come down in price as they get introduced into the market place. Also, if something becomes fashionable, cost becomes a whole lot less important if it is even remotely competitive. If enough people buy these cars, then “electrics” or “hybrids” will become a sustainable segment in the auto market. When it comes time for me to buy another car, hopefully I can join one of these segments.

http://www.businessweek.com/globalbiz/content/sep2009/gb20090917_962378.htm

http://www.nytimes.com/2009/09/16/business/energy-environment/16electric.html?sq=electric%20cars&st=cse&adxnnl=1&scp=2&adxnnlx=1253667664-lNOjX6nAZ5dETLpEXnIFpA

A Good Night’s Sleep

My wife and I went mattress shopping a couple of days ago. We ended up buying a Sealy Posturepedic—-mostly because it was comfortable for both of us. Additionally, I felt a lot better when I saw it had “Organic Cotton” imprinted all over the top. So I figured I was at least being somewhat sustainable by having organic cotton in my mattress. I really did not think about the other materials involved in any given mattress.

Post purchase, I was happy to see that Sealy, the largest mattress manufacturer, had lots of information about their materials and processes on their site. The steel in the innerspring, for example, comes from recycled steel. The steel was also designed to fit on fewer truckloads while shipping (better for the environment and cheaper). The excess scrap (unfortunately, polyurethane) foam is recycled into other products, like carpet. Sealy also says that its fire retardant material is environmentally friendly (details not provided). Also, the top cotton layer is organic cotton.

Another of the big 3, Simmons, has taken another tack on the sustainability front. They created a separate product line called “Natural Care”, and partnered with a “green lifestyle” guru to design and promote it. The mattress is part of this. Relevant mattress features include base foam derived from soy, another foam layer derived from rubber tree latex, and a biodegradable fabric for the top.

Essentia, a Canadian company, has developed a mattress that is made from 100% natural materials (like rubber latex, organic cotton, natural oils, etc.). Their mattresses also do not include petro-chemical based adhesives. They do not use innersprings; they use specially designed memory foam instead. However, their products are only available on-line.

I like concept of the Essentia mattresses, but I cannot imagine buying a mattress without laying on it first. So that brings me back to the differing approaches of Sealy and Simmons. From the perspective of integrating sustainability across the business, I prefer the Sealy approach. This is because they are integrating sustainable practices across the entire product line and enterprise. Examples include coordinating product components with logistics to maximize environmental performance and verifying the environmental practices of their lumber supplier. However, if I were a consumer doing a whole bedroom remodel in most sustainable way possible, I would go with Simmons because the Natural Care line was developed specifically for the eco-friendly consumer. However, the most “sustainable” mattress may or may not be the most comfortable one.

Shoe Leather and Shoe Laces

I recently bought a new pair of sneakers, after an agonizing search. My feet are very hard to fit, so I am generally completely focused on finding sneakers that do fit. I was so excited that I actually found sneakers that fit I bought 2 pairs. In the course of trying on multiple ill-fitting pairs, I had never put “sustainability” and “shoes” or “sneakers” in the same sentence. Until now. In recent weeks, 2 major shoe companies (Nike and Timberland) have both announced new policies regarding the sourcing of leather for their products (some of them, anyways).

This particular story really begins with a report from Greenpeace, called “Slaughtering the Amazon”. The report connects the leather bought by global shoe companies such as Nike, Timberland, Reebok, and Adidas to the deforestation of the Amazon rain forest. The ultimate source for too much of this raw material is cattle raised from farms on recently deforested (cleared) land. The report also mentioned furniture upholstering and leather accents used in some car interiors, in addition to the shoe industry.

Part of the report was a call to action, attempting to persuade the companies to stop buying leather from the Amazon. In recent weeks, both Nike and Timberland have announced policies to do just that. Nike’s policy states: “Nike will not use leather in its products produced from cattle raised in the Amazon Biome. Nike will require suppliers of Brazilian leather to certify, in writing, that they are supplying leather for Nike Inc. products from cattle raised outside of the Amazon Biome” (The Amazon Biome is what most people think of when they think of the Amazon—the actual rainforest). Nike also commits to Greenpeace’s Commit or Cancel program, which basically says non-compliant suppliers will be cut off from Nike’s purchasing. Nike also has clauses about the farms not being on the lands belonging to indigenous peoples and not allowing slave labor in its supply chain.

For its part, Timberland is requiring its Brazilian leather suppliers to “commit to support an immediate moratorium on any further cattle expansion into the Amazon by August 15, 2009. Additionally this commitment will include implementation of a traceability policy and monitoring to ensure adherence to these principles and a timeline to phase out of sourcing from farms which have deforested land since July 2006. We will similarly work with all other Brazilian companies that provide leather for Timberland products, including products made by third parties under license from Timberland.” This is in addition to procurement policies similar to Nike’s.

Beyond the environmental benefits, these policies are highly significant and educational. Both Timberland and Nike are very large companies, with global distribution networks and global impact. Both companies are very well known consumer brands. The mere existence of these policies will educate some percentage of their market about where their shoes and sneakers do and do not come from. Some percentage of these people might just decide to try on the Nike and/or Timberlands first because of this.

Maybe the Nikes are indeed worth checking out before I try on another pair of Pumas or Adidas….

Websites:

www.greenpeace.org
http://www.nikebiz.com/responsibility
http://earthkeeper.com/blog/corporate-social-responsibility/issues-in-earthkeeping-part-ii/

Its a Zip Line, not a Zip Code

High in the treetops above the New River Gorge in southern West Virginia is an unusual example of sustainability at work. The newly opened (May, 2009) Adventure West Virginia Treetops Canopy Tour provides its riders with a 3 hour tour of the forest’s canopy over its mile long series of zip lines and skybridges. The tour brings the rider into and over the forest. It also helps support saving the forest from potential long-term extinction. This is because $1 of each ticket goes to fund treatments to protect over 3,000 hemlock trees in the forest from the dangerous hemlock woolly adelgid.

The Canopy Tour is a partnership between Class VI Mountain River, a rafting company on the New River and Bonsai Design, who designs canopy tours. Class VI was hoping to expand their rafting and resort business with a complementary experience. Bonsai Design specializes in zip line courses and incorporates various sustainable practices into their designs and operations. Some general examples are listed on their www.bonsai-design.com website.

The attraction’s design incorporates numerous sustainable elements. The average New River tour zipliner would certainly notice the platforms they are standing on. They might not notice that the platforms are actually 2 halves connected by growth clamps to accommodate future growth of the tree. In 40 years, a hemlock tree might grow 8 inches in girth—so the platforms need to be expandable. Other types of trees might grow more. Only a very small minority of the same zipliners would see that the support cables are not digging into the tree trunks. Rather, they encircle wood blocks against the trees. This allows the nutrients to continue to flow up and down the tree’s trunk. The pressure of the cables keeps the blocks in place. The flowing nutrients keep the trees alive and the Canopy Tour in business.

Quoted in the August 2009 issue of Popular Mechanics, Bonsai Design’s founder John Walker said, “We have to think about the here and now and the years to come.” This perfectly illustrates the long-term perspective that sustainability implies. The sustainable design decisions made now help ensure the long-term viability of Class VI’s Mountain River’s Canopy Tour asset.

Popular Mechanics article
http://www.popularmechanics.com/outdoors/adventures/4325427.html

Economic Growth via Clean Energy

Advocates of the idea of a “green economy” argue that investing in “green” technologies and processes now will lead to economic growth later. Robert Kennedy, Jr. of the National Resources Defense Council, among others, believes that explicitly pricing carbon, for example, will unleash a wave of innovation to create technologies and products that will require less carbon to produce. Van Jones in The Green Collar Economy sees the growing green economy as an anti-poverty tool.

These are good arguments, but they are primarily backed up by isolated anecdotes. Fortunately, the Pew Trusts have recently released a report (The Clean Energy Economy) that goes a long way towards defining the current impact of the “Clean Energy Economy”. While there is no uniform definition of the term “Clean Energy Economy”, the Pew report is a good place to start. The Pew definition is: “A clean energy economy generates jobs, businesses and investments while expanding clean energy production, increasing energy efficiency, reducing greenhouse gas emissions, waste and pollution, and conserving water and other natural resources.’’

Pew cites five areas as being part of the Clean Energy Economy: Clean Energy, Energy Efficiency, Environmentally Friendly Production, Conservation and Pollution Mitigation, and Training and Support. The majority of occupations in the green economy are indeed in the areas of resource conservation, clean energy production, and “green construction”. However, the clean energy economy also includes such positions as: chemists who develop less toxic cleaning solutions, plumbers who help install drip irrigation systems, and product designers who design more environmentally friendly products amongst others. So this economy is broader than popularly acknowledged.

In a parallel fashion, Pew highlights some companies that are at least partially “green”. A more accurate way to phrase this would be companies that have seen increasing sales and/or revenues from servicing a “green”, environmentally aware marketplace. Honeywell has about a $20 billion portfolio of energy efficiency products—and the business including this sector grew at twice the rate of the parent company in 2008. A law firm such as Manko, Gold, Katcher, and Fox seems like an unlikely profile entry in a report about the clean energy economy—until one understands that this law firm focuses on environmental law and is heavily involved in the City of Philadelphia’s sustainability task force.

As for some numbers, Pew estimates that over 750,000 jobs and 68,000 businesses are part of the green economy. Further, .49 percent of all jobs nationwide are “green” according to Pew. Interestingly, 22 states have a greater percentage of their jobs in the green economy than this national average. Pennsylvania, for example, has .62 percent of its jobs in this sector—in the face of an overall decline in total jobs over the past 10 years. In fact, Pennsylvania is in the top ten in terms of percentage of its workforce involved in the clean green economy. The state with the highest percentage of its jobs in the green sector is Oregon with 1.02 percent.

Admittedly, these are not huge numbers. However, simply by publishing The Clean Energy Economy, Pew has done a great service. It provides quantifiable evidence that there is enough economic activity in the clean energy area to be worthy of counting and notice. It also shows that many different occupations can benefit from growth in the clean energy sector—beyond the obvious candidates of clean energy production, resource management, and construction. The most important lesson is that there can be a link between going green and economic growth. Many critics of green policies focus on the cost of environmentally friendly policies and business practices. They rarely discuss the economic benefits of going green. Its turns out there are quite a few.

The Pew report is here:
http://www.pewcenteronthestates.org/uploadedFiles/Clean_Economy_Report_Web.pdf

The Non-Smell of Fresh Paint

With the recent painting of my kitchen and living room, my seemingly never-ending construction saga is over. Even better, the house does not, and did not, smell of new paint. The last time I painted my house, it took more than several days for it to fully air out. The smell lingered in the air as the VOCs (volatile organic compounds) made their way from the walls, through house, and eventually outside to pollute the atmosphere. That was back in 2002. Fast forward to 2009, and I did not want to repeat that experience. Fortunately, there are now a variety of environmentally friendlier, non (or low) VOC paints on the market.

And I was a willing consumer. My first hope was to go to the neighborhood paint store and inquire about environmentally friendly, low/no VOC paint. We went twice, and the answer was the same—no dice. (I prefer to shop at the community stores vs. the big box chains, if I have a choice). After getting the wrong answer at the local paint store, it was off to Home Depot and Lowes to see their low/no VOC offerings. Lowes had a low VOC entrant; Home Depot had a NO VOC contestant. The Home Depot brand, The Freshaire Choice (made by Glidden) immediately became the leading candidate. The good news was no VOCs—the bad news was the relatively limited colors available (only 65). (Glidden actually has a very informative pdf on VOCs here: https://www.glidden.com/general/VOC.jsp)

As for the colors, we did find colors we can use. The skimpy color selection can certainly be a major limitation for a lot of people. We also learned that paint has two major parts –the paint itself and the colorant. The design innovation of The Freshaire Choice is that the colorants are also VOC free, as well as the paint. In fact, the colorants are actually in a package that dissolves into the paint when it is mixed in at the store. As for paint quality, it is actually made by Glidden, which is a good brand. It has also been certified to the Greenguard indoor air quality standard (and that’s a good one).

This sounds too good to be true, and it is. We learned the hard way that while the Freshaire paint and colorant might be VOC free, this does not necessarily apply to the primer. The primer unfortunately had more than enough VOCs to make up for the paint. Even worse, after we do the painting, we found out that there was a Freshaire Choice primer. Live and learn.

From a corporate perspective, Glidden is owned by ICI, which is a major chemical company that was recently bought out by a Dutch company called AKZONobel. AKZONobel calls Freshaire Choice a “premium brand”. (In terms of price at Home Depot, it is priced the same as the Ralph Lauren paint in the neighboring case). Equally impressively, AKZONobel prominently features sustainability on their website. Further, they provide some ways they measure the success (or failure) of their sustainability programs. So I take these claims a little more seriously than most—because what gets measured gets done (http://www.akzonobel.com/sustainability/)

So I achieved my goals with the paint. First, it looks good (now that is on the walls). Second, it did not smell up the whole house. Third, I bought it from a corporation that seems to take sustainability seriously. Not a bad deal for a gallon of paint—or two, or ten.

Red, White, Rose, and Green

I returned from California with an expanded definition of “environmentally friendly” wine. I have since learned that I am not alone in at least beginning to think about how I can factor in “sustainability” or “environmentalism” into my wine purchases. I still want to buy what I think will be a good wine. However, I am now more open to checking out whether a brand somehow incorporates sustainable practices into its operations. Once I figure out what grape I am in the mood for, and how much I can afford for a bottle, the environmental angle seems like a perfectly good next step.

I am usually pretty open to learning about new wines. One of the ways I do so is to flip through my Food and Wine magazine. The May issue had a section on Wine Country Travels—and some of the ads specifically included the word “sustainable”. Arrowood talked about “sustainable viticulture; The next ad (Cambria) used the phrase “farmed sustainably” and Rodney Strong made sure to mention “sustainable business practices”. These claims may or may not be legit (after talking to Arrowood, their claims definitely are), but it was striking to see the claims in wine ads at all.

However, defining what “sustainability” and wine really mean together is a gray area at best. Fortunately, about a month or so ago, I got an email from the Sierra Club about “green wines”. Since I like both wine and the environment, and I am a member of the Sierra Club, I opened the email. I was looking for an answer. Sure enough, they were reviewing wines. The wines were red, white, or rose—the green part was the environmental aspect of either the wine or its producer.

Once the basic issue of taste was addressed, I was surprised as to what qualified as “green”. A couple of the wineries were cited for organic or biodynamic grape growing processes. Some were praised for using renewable energy to power their operations, while another’s production facility has LEED (green building) certification. One or two were complimented on trying to preserve wetlands and the habitats around their facility. One was actually fully organic in its grape growing and its production processes. The comments section had some comments about the relative pay of vineyard workers vs. other agricultural workers (I do not know which was accurate).

Although I was a little confused as to how “green” some wines actually are, the article was interesting because it made me think further about what it meant to actually incorporate sustainability into my wine purchases, For me, the best answer is to learn who is at least raising grapes using organic and/or sustainable methods. Then I would give credit to other aspects like using renewable eneegy, habitat preservation, composting/preserving the soil, etc. Finally, to the extent that I can find about these matters, I would prefer to buy from companies who treat their workers well.

And by the way, be sure the wine tastes good and holds up over time.