CSRHub Blog Research on ESG metrics and comments on sustainability best practice

By Berit Anderson

Gifford Pinchot III probably isn’t the typical speaker at Seattle’s downtown Morgan Stanley boardroom. But the lesson he taught a group of Chinese undergraduate students gathered in the audience last week couldn’t have been delivered by your average wealth manager.

Pinchot’s presentation, bolstered by his powerful skill as a storyteller, spanned not just the importance of sustainable business and the tenets and successes of the Bainbridge Graduate Institute – the sustainable MBA program he pioneered on Washington’s Bainbridge Island – but his own realization that human relationships and doing good in the world was more likely to make him happy than money.

Pinchot achieved overnight financial success when his first sustainable business book became a bestseller and companies began knocking on his door for consultancies. But even with this sudden financial windfall, he found he wasn’t any happier than he had been just weeks earlier, when he was still struggling to make ends meet. The same few things still mattered most and were most likely to make him happy – the development and maintenance of personal relationships.

Why does Pinchot espouse sustainable business??

He’s a man of science. Along with slides documenting the monumental loss of old-growth forest between now and 2090 and the direct connection between fresh water scarcity and a U.S. naval plan for international conflict (Yes, we PLAN international conflict.), Pinchot shared this telling pair from a recent National Center for Atmospheric Research study:

First, the average worldwide drought conditions today (Blue and green being hospitable living environments with enough food and water for human survival and red being truly inhospitable.)

Now pick your favorite part of the world in the above picture, and compare it to the next image: World drought conditions 100 years later, given current trends in climate change.

As you can see, we’re screwed. By the year 2090 about eighty percent of the world will be inhospitable due to drought and the resulting fires and famine.

So how does this translate to business and sustainability? The trick is, the two HAVE to merge.

Pinchot has used an unusual metric to measure the success of his business endeavors: A scale that takes into account not just financials, but the happiness a business brings to its users and consumers and the damage it does to the earth.

The happiness to damage ratio:  The ratio of happiness a business creates for its customers and users to the amount of damage or harm done to the world is the guideline Pinchot uses to measure the success of a business.

Obviously it’s not easy using the happiness to damage ratio as a measure of success in a world full of corporate profiteers, but Pinchot laid out two groups of people who are already doing it.   

1. Ecopreneurs: Those who create new, eco-friendly businesses that take only renewable resources from the earth or improve the integration of sustainability into existing systems are known as ecopreneurs.
2. Intrapreneurs: Those who are working from within existing companies to integrate sustainability into business practices.  

These folks exist in leading companies around the world. They are pioneering businesspeople, not afraid to advocate for ethics and values as well as the bottom line. Through their hard work and innovation, their companies are at the cutting edge of sustainability and they're reaping the financial and market share rewards. The only question is, which will you be?

Berit Anderson develops and executes strategy to encourage the spread of responsible business. Berit manages CSRHUB's social media outreach and develops business and community relationships. Her background in media and community relations runs the gamut from non-profit sustainability magazines to 24-hour corporate news operations and forward-looking tech publishers. When she isn't busy building bridges with language, Berit studies Arabic, explores the great outdoors, or takes to the garden, where she merges her loves of local food, urban agriculture and education. Weaknesses include large, fluffy canines and Reeses peanut butter cups. 

Inset images courtesy of Bainbridge Graduate Institute and the National Center for Atmospheric Research, respectively. 

By Berit Anderson

Amory Lovins, Chairman and Chief Scientist of the Rocky Mountain Institute (RMI), is a big-picture alternative energy type, with the background to prove it. Author of 29 published books and with 11 honorary doctorates, Lovins was named a MacArthur Fellow. In 2009, Time Magazine named him one of the Top 100 Most Influential People.

A lifetime of alternative energy expertise is laid out in his new report with the RMI, Reinventing Fire. The report is a unique road-map for a future without fossil fuels. A future that assumes carbon emissions are worth zero and requires no added federal laws or taxes.

The key to success in Lovins’ plan is the reinvention of American industry. “We must leave oil before it leaves us,” he announced to a crowd of Seattleites at Town Hall last week. To Lovins and the RMI, this means many things -- the end of fuel-hungry building and construction, the beginning of utilities powered by distributed renewable energy and rewarded for selling less, rather than more.

But the first step in converting Americans from oil-crazed to oil-blase, Lovins says, is in revolutionizing the auto industry.

Ultra-lightweight vehicles. Hybrids and electric vehicles, by themselves, will not save us from our own oil addiction. Cars, planes and trucks must be reinvented as lightweight vehicles made out of carbon fiber-- not the obese steel things we know today. Ultra-lighting, Lovins claimed, halves not just a vehicle’s weight, but its fuel use, making it easier to propel with less energy. Even speed demons will be happy with this new plan. “Ultralight vehicles go very fast and they’re radar stealthy,” Lovins assured us.  

Feebates. To encourage the purchase of these new uber-light vehicles, Lovins has invented a purchasing program for vehicle manufacturers called “feebates”. A fee is added to the price tag of older heavier, less fuel-efficient vehicles, while the new ultra-lights come at a discount. The one finances the other. The goal, of course, is to turn over the US’ stock of overweight, inefficient vehicles, and encourage automakers to develop light, fuel-efficient replacements.  

Real-time driving costs. Also on Lovins’ docket is the institution of a new system for charging drivers per mile, rather than per gallon. As roads become more crowded, the cost per mile goes up. This indirectly regulates traffic on busy roads and encourages alternative routes and transportation forms. All of which contribute to less energy use.  

How can the average person influence the manufacturing decisions of Detroit’s biggest players?  Though implementing greener prototype development is the responsibility of Ford and GM managers, reinforcing this kind of corporate responsibility lies on the shoulders of company employees, shareholders and car owners.

If we look honestly at corporate personhood, it is clear that money and insiders must unfortunately do the talking for maximum influence. As Lovins announced to his Seattle audience, “Our energy future is not fate but choice. And that choice is in the hands of people like you.”

Berit Anderson develops and executes strategy to encourage the spread of responsible business. Berit manages CSRHUB's social media outreach and develops business and community relationships. Her background in media and community relations runs the gamut from non-profit sustainability magazines to 24-hour corporate news operations and forward-looking tech publishers. When she isn't busy building bridges with language, Berit studies Arabic, explores the great outdoors, or takes to the garden, where she merges her loves of local food, urban agriculture and education. Weaknesses include large, fluffy canines and Reeses peanut butter cups.

Friday November 26th was “Buy Nothing Day”, an International Day of protest against consumerism led by Adbusters magazine, which describes it as, “[a] sudden unexpected moment of truth, a mass reversal of perspective, a global mindshift – from which the corporate/consumerist forces never fully recover.”

In spite of the organizer’s claims that it is “sudden” and “unexpected,” Buy Nothing Day was, in fact, scheduled to coincide with “Black Friday”— the Friday after Thanksgiving traditionally set to kick off the Christmas shopping season and perhaps, this year especially, save the economy from its doldrums. I daresay that the winner this year was Black Friday, since presumably most readers haven’t even heard of Buy Nothing Day and, anecdotally at least, people were buying. A friend on Facebook reported on a “Black Friday Traffic Jam” from the Hudson Valley:

“Last night taking late bus back from NYC after splendid day with sons and their friends and wonderful meal, the traffic was backed up 5 miles in every direction from Woodbury Commons trying to get to their midnight to midnight Black Friday sales... it was unbelievable. Talk about shop till you drop. Visa and Master Card are raking it in in the Northeast today.”

Although CSRHUB’s founders believe that business must be part of the solution, CSRHUB is more aligned with the forces of Buy Nothing Day than with Black Friday. As stated on CSRHUB’s “About Us’ page, the CSRHUB founders believe that business can be:

“an agent of positive social change. We believe that providing these corporate [ratings on environmental, social and governance performance] will increase the transparency . . . and encourage critical discussions of how companies treat their employees, impact the environment, adjust their carbon footprint, act in their community, provide innovative products and services for sustainable development, and govern themselves.”

But can businesses actually be a source of public good, and not just for today but for Seven Generations? Clearly, since the start of the Industrial Revolution, business has helped feed, employ and raise the living standards of billions of people.  But what good is this to our children and grandchildren if we have created ever increasing dead zones in our seas (405 dead zones worldwide, the largest 27,000 sq. miles), an ever increasing ozone hole in our skies (resulting in increasing ultraviolet radiation), widespread species extinction (according to a report published in Nature, 15-37% of known plant and animal species will be extinct by 2050 from climate change alone), and we are heading toward a literal climate meltdown?

If overconsumption is a problem, how can businesses -- generally motivated to maximize sales and profits -- solve that problem?  How can business be remade to be Triple Bottom Line – not just for profits, but for people and planet also?

One solution is to encourage companies to produce less or to manufacture products that have a social good, through tax and other incentives,.  Since corporations are individually chartered by the state, it’s possible to create a new type of corporate entity -- a “benefit corporation” -- that is highly protective of the environment, its employees and society in general, and to provide tax and other benefits to such entities.  One major step in this direction is the B Corporation movement, which requires B Corporations to: 1) achieve a passing score on the B Ratings System, a comprehensive tool to assess a company’s social and environmental performance; and 2) agree to legally expand the responsibilities of the corporation to include the interests of its employees, suppliers, consumers, community, and environment. So far there are 327 B Corporations with $1.6 billion in revenues in 54 industries (including CSRHUB which was recently approved).  And, indeed, earlier this year, two states, Maryland and Vermont, passed legislation actually codifying and making it possible for businesses to be chartered as “benefit corporations.”

Another possibility is to create mechanisms for businesses to make more money by selling less. Although this isn’t currently practical for most businesses, it is possible and is being done in regulated businesses.  In the electric utility business, for example, state public services commissions have decoupled profits from sales, and created a mechanism for utilities to make more money by selling less by utilizing efficiency and conservation methods.

CSRHUB seeks to solve this problem by “rewarding” businesses that perform well on environment, social and governance issues with good ratings.  CSRHUB Users, for example, can see which companies perform best on environmental issues and can make decisions about what to buy, who to work for, and who to do business with based upon those ratings.  CSRHUB also uses tags to allow users to identify companies that are involved in a wide range of behaviors such as coal production, nuclear power or pesticides and pollutants, or that have been rewarded for being one of the “100 Low Carbon Pioneers”, a member of the “Carbon Disclosure Project,” or an EPA Climate Leader.

So far, these are all small steps.  But for those of us who have been part of and watching this movement for numerous years, they are important ones that are starting to snowball and create new consciousness. CSRHUB is proud to part of this new ecology.

Stephen Filler is a CSRHUB Cofounder and Advisor. An intellectual property attorney, he is the Director of Business Development for Prism Solar Technologies, Inc., a solar photovoltaic module manufacturer. He has provided legal services to and served on the boards of sustainable, environmental and renewable energy businesses, technology and media companies, non-profit organizations and trade associations. Stephen serves on the Boards of NY Sloop Clearwater, NY Solar Energy Association, Sustainable Hudson Valley Business Network. He received his JD from Boston University Law School.