Gem of the day

The 2013 Sustainability Leaders survey is out from Globescan & SustainAbility, and the results aren't surprising. Unless, that is, you happen to think that Coca Cola looks painfully out of place in the top 10 next to the likes of Unilever, Natura and Nike.

First thing's first: Coke is doing a lot on water, setting huge goals like net zero water consumption in its operations that the company hardly has any idea how to achieve. But in a year where we saw the obesity epidemic finally rising to panic button levels, Coke's sports-as-medicine strategy that places the burden 100% on people to "consume responsibly" is starting to make the soft drinks industry look like the new tobacco (Franck Riboud was already saying this at Danone 7 years ago, and the company refocused its business on healthy products as a result).

Companies that deserve to be on a leadership list are those that are not only accepting responsibility for, but truly leading an effort to transform their most material impacts into net benefits for everyone. Unilever on personal resource efficiency and sanitation at scale, Natura on biodiversity and Nike on innovation driven by sustainable materials fit that description - or at least have set the kinds of long-term goals that commit them 100% to getting there.

Until Coke's board gets real about the obesity crisis and the central role of its products in fueling it - and that includes stopping its ridiculous 1990s-esque attempts to stymie any and all regulation, read it and weep - they don't belong in such company.

Gem of the day

An example of how not to sum up where we are with the sustainable business agenda, especially when making the case for leadership (via HBR):

"Warren Buffett, Robert Rubin, and Howard Schultz have been outspoken about the role of business in American society, and companies from Walmart to Chevron have engaged in socially responsible activities."

Another non-environmental wonder

The aftermath of CEO Ron Johnson's hasty exit from retailer JC Penney has proved a busy space for commentary on just how wrong he got it.

Apple board member Bill Campbell echoed a critical insight into why business transformation can fail with his take on the situation (via Businessweek):

“You have to keep your current business going while you experiment with a new one. [Ron] didn’t do that. He just put a bullet hole in his current business."

Even better, an interview with Johnson offers a priceless look at his misguided attitude towards the change process, in his own words (via FastCompany):

"All my ideas just sort of come. I don’t know to explain it. It’s all intuitive I think...I wanted to do something that had scale. I don’t just want to run a business, I want to do what I did at Apple--I want the chance to transform something. So I picked JC Penney. I didn’t come here to improve Penney, I’m here to transform Penney."

Gem of the day

Infamous Whole Foods CEO John  Mackey is on a roll with his "Conscious Capitalism" call to action - business should lead by embedding a "higher sense of purpose" in value creation. So it's beyond ironic that his answer to an area where upscale Whole Foods has yet to fulfill that kind of leadership - increasing access to healthy food in the US, land of "food deserts" - is to...create a nonprofit (via Forbes):

Forbes: "One of the primary issues with Whole Foods is that the stores are largely located in well-to-do areas. How does Whole Foods intend to make healthy food available to all?"

Mackey: "We do take seriously our responsibility, and growing ability, to educate people about healthy eating and giving them greater access...We will start to bring healthy food options to people in several other cities, starting with a new store in mid-town Detroit that will open in May. We are even looking to create a new non-profit to help make this a reality."

Gem of the day

Former BP chief Tony Hayward's take on the operating environment for oil companies in Kurdistan, where he's quietly excelling as CEO of Genel Energy as the memories of Deepwater Horizon fade away (via BBC):

"If you like, it's conventional Middle Eastern oil and gas exploration - pretty straightforward, and pretty low-cost."

In that case what passes for "conventional" in the Middle East must mean something quite different from in other parts of the world, if we believe this Kurdish observer (via Independent):

"We Kurds have one of the most complicated political situations in the world."

Or even better:

"I call it ‘Corruptistan’," said one woman.

Gem of the day

Coca Cola's new "Chairs" ad (see raging critique in HuffPo) is the company's latest take on placing responsibility for health and wellbeing squarely on the consumer - where it's easiest to say it belongs. Why "Chairs"? Of course Publicis, creators of the ad, can handily explain:

"The goal was to open the discussion with the society about the sedentary lifestyle problem. Some studies show that people spend more than half of their lives seated and that was the inspiration for the idea. Since the insight is human and universal the campaign can be used in future in other countries, depending on Coke Worldwide's decision."

With half of Americans already obese and numbers rising, surely a "sedentary lifestyle" is only chipping away at a much larger systematic issue - but given Coke's focus on marketing around this issue rather than taking real action, that's probably asking too much.

Gem of the day

Al Gore uses his ShareAction speech to give us something to be optimistic about in the uphill battle to making capital markets sustainable:

"Here's what we've got on our side: the way markets are operating today is functionally insane."

Another non-environmental wonder

How much can you pack into a generalized statement about "Africa"? In the world of business, a lot (via BusinessWeek, of course):

“Africa is an idea, not a market," sayeth veteran IBM shareholder Richard Soultanian.

Not to be outdone, IBM's head of South African operations has this to say:

"On his desk was a newspaper article chronicling the aftermath of an August police massacre of 34 platinum miners after an illegal strike turned violent. 'My actions cannot be dictated by what is going on in the country or the marketplace,' he says."

Now that's a smart way to look at doing business in emerging markets. Get thee to the real experts before it's too late - they just might be able to help you appreciate this reality instead:

"If the local socio-political system is characterized by a lack of transparency, profound structural inequalities, deeply engrained types of social discrimination, widespread arbitrariness, omnipresent corruption or pervasive structural violence, then your actions will normally reinforce those features, even if unintentionally."

Right.

Gem of the day

When someone writes an article titled "Can Even Hated Industries Redeem Themselves with Social Media?" you know what you're getting: very expensive "crisis communications" consultancy, free from any sense of irony.

Still, inevitably it's worth reading these pieces if only for outstanding gems like this one:

"Utilities have a powerful story that simply isn’t being told. They are the engine that makes every aspect of modern life possible. They are the first responders on the front lines when Mother Nature wreaks her havoc...These are the narratives that will establish tangible consumer connections and put a human face on that flick of the switch."

Then again, what more would you expect in this particular case from the man who did PR for Guantanamo, Deepwater Horizon and the Catholic Church?

Bonus gem

More extraordinary statements from an extraordinary industry (financial services). Here's a very special one from a "financial services expert" at PA Consulting Group (via FT, where else?):

"The great core strength of banks is their ability to take an intelligent view of the value of an asset and its associated risk."

So that core purpose must have just slipped bankers' minds in what made 2012 a record year for massive risk fall-outs at the world's biggest banks:

• "Barclays Chief Says 'Sorry'"
• "'Proud' JP Morgan Chief Apologizes"
• "HSBC 'Sorry' for Aiding Mexican Drug Lords, Rogue States and Terrorists"

Then again, maybe JP Morgan leader Jamie Dyman was acknowledging the bitter truth when he said this during his semi-apology to Congress:

“We’re doing what a bank is supposed to do."

Gem of the day

Sometimes a single quote can sum up everything you need to know to take the temperature of the sustainability conversation in the investment community (and yes, it does exist): the challenge, the opportunity, and the problem with that entire equation.

So thanks to JP Morgan's Head of Environmental Affairs for doing just that in a conference panel with the non sequitur title "The Power of Wall Street in Promoting Sustainable Development":

"Wall Street can only make a difference on this stuff if we figure out a way to make money on it."

Gem of the day

The concept of digging one of our most precious resources - oil - out of the ground and burning it for fuel hardly makes much sense, so as the world's oil majors cling desperately to the century-old business model you'd expect bumps along the way.

Even better is the double embarrassment Shell has faced over the past 24 hours:

• Being forced to shut down Arctic operations for 2013 after spending billions of dollars, with no results to show
• Acknowledging solar is where the money's at, a business Shell quietly exited 4 years ago

All of which only makes the company's "Let's Go" stakeholder campaign even more ironic.

Another non-environmental wonder

Craig Charney, colleague of Leland Miller (infamous China Beige Book fame), on why everything we think we know about China is wrong:

“You know the old joke about advertising? 'Half of all advertising is wasted. I just don’t know which half.' The same thing is true of Chinese statistics. Half of them are wrong. The problem is that we don’t know which half."

Genius.

Gem of the day

George Packer takes a masterful look at what the evolution of American business since the 1970s means for the country's social contract, using the example of Apple vs. Walmart (via the New Yorker):

"The middle class has shrunk; tax rates (especially on upper brackets) have plunged; inequality has exploded; the safety net (especially for the poor) has weakened; the old power structure has given way to a more diverse and broad-based upper class based on education...and business culture has become entrepreneurial, fast, risk-taking, and harsh. The trade-off: more freedom, less security."

"Together, Apple and Walmart represent the intense separation of American life into blue and red, rich and poor, overpriced and undersold, hyperconnected and left behind."

Gem of the day

Sometimes you just can't make this stuff up. Can anyone spot the problem with the design of BASF's stated "Purpose" - ideally one of the most important pages on their website, let alone the entire driver of their business?

Gem of the day

British American Tobacco's so-called "sustainability vision" offers a lesson on how to make a statement without saying anything at all:

"Our vision of a sustainable tobacco business is one that manages the impact of its operations and products responsibly today and prepares for a future in which it continues to create value for shareholders as well as being in the best interest of other stakeholders."

Gem of the day

Finally: academic evidence to support the bold analogy Danone CEO Franck Riboud made 7 years ago, as his company changed to a strategic health focus, about obesity as "the new tobacco".

A new study shows relying on the biggest food and drink companies to "self-regulate" salt, fat and sugar content in food won't work. Most importantly, the report points out this is a battle that needs to be won - and quickly - to make sure these companies don't repeat the same mistakes in emerging markets, where the focus is on aggressive growth over the next decade:

"Saturation of markets in high-income countries has caused the industries to rapidly penetrate emerging global markets, as the tobacco industry has done. Almost all growth in the foreseeable future in profits and sales of these unhealthy commodities will be in low-income and middle-income countries [where consumption is currently low]."

Gem of the day

Edelman's point of view on what's required for a "sustainable business future":

"For successful corporate citizenship and a sustainable business future, companies need to focus on conducting and communicating their efforts in a way that garners trust and generates positive reputations among key stakeholders."

Influencing stakeholder views - progressive.

Gem of the day

Netflix CEO Reed Hasting's amazing presentation on "Culture" nails what company values truly are:

"Many companies have nice-sounding value statements displayed in the lobby, such as: 'Integrity. Communication. Respect. Excellence...The actual company values, as opposed to the nice-sounding values, are shown by who gets rewarded, promoted or let go."

Gem of the day

As the world's largest food company, you'd assume Nestle has a good vantage point for understanding the impact of climate change on the energy, water and nutrition challenges we face. And yet, here's Chairman Peter Brabeck doing just the opposite (via GSB):

"I've been coming up here [World Economic Forum] for 15 years and nobody was talking about water. They were talking about CO2, they were talking about climate change; that we're going to roast and burn. We're talking about running out of oil, well it happens that we have 120 years of proven oil reserves, we have 240 years of proven gas reserves, we have 550 years of proven coal reserves, we have thousands of years of proven Uranium reserves and we are running out of water today."
There's only 3 possible explanations:

1. He doesn't get the link between climate change and oil, gas and coal (scary)
2. He's so busy talking up Nestle's water focus (a big reputational issue) that he got his story totally wrong.
3. He assumes because oil has a value in the market, investment will be made into alternatives as supply runs out (never mind the timescales demanded by climate)

It's all even more ironic given that he goes on to make a big deal out of understanding the big picture:

"If you become more and more and more specialised in a world that is more and more interconnected, you are losing your impact and your credibility to find solutions."

You can say that again, Mr. Brabeck.

Another non-environmental wonder

Nobel Prize winner Andre Geim gets a less than warm reception at Davos (via FT):

"'What are you doing here?' The software billionaire choked in astonishment when I told him I was a physicist. The reaction was informative: it was as if he had encountered a seasonal labourer at our meeting place, the World Economic Forum in Davos."

So why did Geim bother showing up? Oh right:

"The distinguished crowd at Davos last month discussed the poor health of the global economy...The only thing they shared was a belief that a quick fix was available...The advantage of ivory towers is that they allow a view beyond immediate problems. Where one sees banking crisis, debt crisis, currency crisis or some other crises, academics may see even more worrying developments. We are in the midst of a technology crisis. Disruptive technologies now appear less frequently than steady economic growth requires."

Gem of the day

Scott Anthony gives business a cold, hard dose of reality (via Forbes):

"Most efforts at transformation fail miserably. This unnerving and frustrating reality should not be a surprise--after years of pervasive 'continuous improvement' programs, executives are reaping what they have sown. Their organizations, from executives down through the rank and file, have been motivated and compensated to focus on incremental improvement, measured quarterly and annually, along competitive performance parameters established years earlier."

And even better as a zinger:

"Cultural change does not occur through PowerPoint."

 

Gem of the day

The "sustainable brands" conversation has accelerated over the past few years. One critical point from a set of takeaways at London's Sustainable Brands conference this year sums up the serious problem at the core of the concept:

"We should use The Power of 'And' — there is no need to trade off materialism and concern for environmental and social issues."

That's an assumption, not a fact - and one that puts a dangerously low glass ceiling on answers to the sustainable business model question.

 

Gem of the day

BrandLogic's 2012 "SustainabilityIQ Matrix", sold as a new way of looking at sustainability leadership in business, suffers from a few fatal flaws:

• Comparing apples to oranges - Different sectors have wildly different sustainability impacts, so benchmarking BP, Allianz and Walmart all within the same framework doesn't tell a very useful story.
• Defining sustainability as "ESG" - Environmental, social and governance factors made for a useful reporting foundation when companies were just starting to get their heads around these issues about a decade ago. For real leaders like Danone, where the company's entire business model (except for Waters) has shifted to a strategic focus on health, ESG is totally marginal.

Case in point are the results, which place the oil majors - BP, Shell, Chevron, ExxonMobil - and even regulatory disaster Bank of America, firmly in the "Challengers" category. To give a better sense of just how wrong that is, here's BrandLogic's definition of "Challengers" and what that means for companies in that category:

"Companies whose real ESG performance is above average and substantially ahead of their perceived performance may have opportunities to secure unrealized ROI from investments in communications and brand positioning."

More brand positioning linked to "best in class" performance in underperforming energy and banking sectors - oh yes, that's what sustainability needs.

Something that's actually good

Peter Uvin of Tufts University distils a set of 8 principles for companies operating in emerging markets, based on learnings from the work of development organisations; his colleague (and a former McKinsey partner), Dr. Bhaskar Chakravorti, responds to them from a business perspective (via Tufts MIB).

It's a great conversation that touches upon the operational, strategic and even psychological challenges of emerging markets.

Two key points from the first principle, 'All Action is Political':

• "Managers on the ground have short time horizons: they know they are on the job for a short stint before they prove their ability to thrive under adversity and then move 'up' to more prestigious markets...rather than thinking holistically and longer-term about the broader impact of their commercial initiatives."
• "If the local socio-political system is characterized by a lack of transparency, profound structural inequalities, deeply engrained types of social discrimination, widespread arbitrariness, omnipresent corruption or pervasive structural violence, then your actions will normally reinforce those features, even if unintentionally."

Another non-environmental wonder

The words "Davos" and "groupthink" are rarely found far apart from one another. But given the state of economies around the world, this gem takes it to the next level (via BusinessWeek):

"There’s a crystallization of thought that the financial crisis is over,” says Scott Minerd, managing partner and chief investment officer of Guggenheim Partners, a Santa Monica (Calif.) firm with about $160 billion under management."

Something that's actually good

Sam Palmisano, former President and CEO of IBM, summarises the critical challenge he faced taking the company in a new direction [product to service shift and adoption of Smarter Planet] at a time of strong financial performance (via Wharton School of Business):

"I really believed in the beginning that I had to keep the business going, [and] at the same time start the transformation of the business model. I didn't think the business model as it was at that point in time was going to sustain itself over the next 10 or 15 years...There were people, phenomenally successful in the PC era, who were wedded to a business model...[They thought] 'I'm making so much money in this business, do I really want to take the risk of transformation?'"

More proof that the short-termism of financial markets stunts innovation.

And speaking in a personal capacity, but one entirely relevant to that challenge, he nails the #1 reason most companies never get there:

"To get prepared for the future, you need to really put yourself in an uncomfortable space."

Gem of the day

Paper industry group Two Sides, authors of key message "print and paper have a great environmental story to tell", have something to say about Google's new "go paperless" campaign:

"This new initiative is clearly another example of a self-interested organization using an environmentally focused marketing campaign to promote its services while ignoring its own impact upon the environment."

No comment.

Gem of the day

Economist writer Schumpeter has a new column summarising two new reports on risk, and what their contents could mean for business in 2013. He couldn't be further from the point:

"The more you read, the more risks you see; eventually, you succumb to nervous exhaustion...[nevertheless] these reports not only provide warnings about dangers that can be avoided by better planning or clearer thinking. They also suggest opportunities."

The landscape of trends presented in these reports might not be news; rising inequality, unstable financial markets, climate change, resource scarcity, health crisis. But so far few companies have seriously changed the way they do business in response to any of those trends (Danone is a contender; Unilever, Kingfisher, GE, IBM and others aspire to). The past few years indicate the complexity and threat of these trends is only increasing; in the words of Frost & Sullivan, "bringing new competencies into play at half the life-cycle speed of the past decade." This all adds up to serious implications for business.

Companies face a world where the rules of the game are beginning to require more than delivering against short-term financial targets and producing a CR report. That means "better planning" and "considering opportunities" are not going to help any company find a strong, sustainable and long term direction for their business model in an operating environment that is fundamentally changing. 

Linda Sanford of IBM calls it "the golden age for transformation". It's also the start of a great disruption, and that won't be pleasant for any company silly enough to listen to Schumpeter.

Something that's actually good

Even companies we might consider today's sustainability leaders - Unilever, GE, Kingfisher, IBM - still face a huge challenge to doing more: a market environment that demands short-term results.

That's why Unilever CEO Paul Polman's quest to push back on the limits of "quarterly capitalism" is so important.

But what about companies that are coming at the issue from a more mainstream point of view? Here's Amazon CEO Jeff Bezos on the benefits of a long term perspective (via HBR):

"If you're long term oriented, customer interests and shareholder interests are aligned. In the short term, that's not always correct.. if we needed to see meaningful financial results in two to three years, some of the most meaningful things we've done we would never have even started."

Now all Amazon needs to do is reconcile its status as the world's biggest online retailer with a sustainable business model. A long term mindset is the perfect place to start.

Gem of the day

McKinsey, steadfast supporters of the status quo, offer three tips for "becoming more strategic" in a company. Tip #2 is "Become expert at identifying potential disruptors", which they describe as "the sorts of changes that make or break companies".

Ironically one hypothetical they give is for an oil company with UK assets to keep an eye on competitors and their investments - not, say, the price of carbon, the rise of non-traditional activist movements, growth of renewable energy markets, energy return on investment or, heaven forbid, decisionmakers' awareness of peak oil. Because in the world of business as usual, monitoring "less conventional" fluctuations in the average is what counts as mastering strategic threats.

Here's one tip they could have offered instead of all three:

"Become expert at translating global megatrends into threats or opportunities for your business - and then find the real thinkers who will help the company design a long-term strategic response to them."

Gem of the day

Machiavelli: the world's original sustainability thought leader? Surely that's what he meant when he wrote the excerpt below in 1513. Whether it's the cliched battle over pollution, the fight to transition away from fossil fuels, or the food industry's double standards over health, the symptoms of incumbent opposition to change are all too familiar:

"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new."

Another non-environmental wonder

UK nonprofit Fairer Gambling released a report this week revealing that betting shops are making billions more in profit from the country's poorest areas with the highest unemployment. And who better to make a comment on the divide than a Tory MP (John Redwood, Conservative MP for Wokingham in Berkshire, via The Guardian):

"I put it down to the fact that poor people believe there's one shot to get rich. They put getting rich down to luck and think they can take a gamble...They also have time on their hands. My voters are too busy working hard to make a reasonable income."

Stunning.

Gem of the day

Walmart is often held up as a hero of green business - a company that will scale sustainability up to new heights through their aggressive supply chain standards.

Here's what Walmart bought in Mexico using bribes over the past decade:

• $341,000: Sam’s Club built in one of Mexico City’s most densely populated neighborhoods, near the Basílica de Guadalupe, without a construction license, an environmental permit, an urban impact assessment, or even a traffic permit.
• $765,000: A vast refrigerated distribution center built in an environmentally fragile flood basin north of Mexico City, in an area where electricity was so scarce that many smaller developers were turned away. 

Then again, what should we expect from a company that is clearly experienced at dealing with ethical grey areas, as the biggest customer of American gun manufacturer Freedom Group? 

Gem of the day

Breaking down the increasingly artificial barriers between how we define 'developed' and 'developing' countries is getting easier. It's now official that the UK:

• Is in food poverty.Thanks to soaring food prices and shrinking incomes, many families are going through a nutritional recession.
• Is in energy poverty. As the Big 6 utilities continue to increase energy prices by as much as 10% (funny that they all settled on similar hikes at such similar times), 7.2 million households are now living in fuel poverty.
• Is starting to experience water poverty. Scarcity of supply coupled with higher prices has already made 4 million households "water poor".

If that isn't proof to underpin the case for a truly green economy, I don't know what is.

Gem of the day

A classic case of how most big businesses still aren't asking the right questions to drive sustainable innovation at scale (via HBR):

"'What if I can change the game and make a car for one lakh?' Ratan Tata wondered, envisioning a price point of around US$2,500, less than half the price of the cheapest car available...He knew, however, he could still make money if he could increase sales volume dramatically, and he knew that his target base of consumers was potentially huge."

Imagine if Tata had instead asked "What if I can change the game and transform how affordable, healthy and low carbon mobility works in megacities?"

He probably wouldn't have gotten an answer that entailed selling about 170,000 passenger cars per year, flooding India with more traffic, more pollution and a big missed opportunity to transcend the impacts of car-centric development.

Gem of the day

There are many, many things that could be said about Chevron's new Aids Will Lose campaign. Here's one: it's a deliberately designed PR initiative to enhance Chevron's image and distract sustainability critics, after a particularly bad year revealing Chevron and BP represent the worst risk for investors given their respective oil spill records.

Case in point is this Tweet:

On the other hand, with global oil production continuing to plateau and no new conventional reserves in sight, maybe over the next decade it's Chevron that will lose.

That must be what Ian MacDonald, a VP at Chevron meant when he said this at the latest Kurdistan-Iraq Oil & Gas conference:

"I believe all of us stand on the threshold of a great adventure."

Gem of the day

If America's Ivy League universities can't get the intellectual argument behind 350.org's call to divest endowments from fossil fuels, they could at least do the math, right? After all, if schools like Harvard want to be around for another 375 years, it would be smart to recognise that abundant fossil fuels and the dollars attached to them sure won't be.

Or not (via NY Times):

"At colleges with large endowments, many administrators are viewing the demand skeptically, saying it would undermine their goal of maximum returns in support of education."

Even better, a spokesman for Harvard had this to say:

"We always appreciate hearing from students about their viewpoints, but Harvard is not considering divesting from companies related to fossil fuels."

Funnily enough that doesn't really seem to align with Harvard's mission:

"Harvard seeks to identify and to remove restraints on students’ full participation, so that individuals may explore their capabilities and interests and may develop their full intellectual and human potential."

Gem of the day

Case in point for why the sustainability/CSR community is partly responsible for BP's image leading up to Gulf of Mexico:

In 2010, 45% of 'global sustainability experts' polled by Globescan said they thought 'Beyond Petroleum' had an 'effective' or 'average' impact on BP's sustainability performance, despite the company's consistent record of oil spills and lack of serious investment in renewables.

Gem of the day

As one of the major service providers to BP's Deepwater Horizon rig, Halliburton has had a lot of big questions to answer to over the past few years.

That must be why in the Q&A on its website Halliburton is so open and honest about its role in the spill - provided you can find the information yourself:

"Halliburton’s contract with BP Exploration relating to the Macondo well is available on its website at www.halliburton.com. Halliburton’s responses to the various commissions and agencies investigating the incident are available in the form of press releases on Halliburton.com."

How useful.

Gem of the day

The concept of an 'Access to Medicine Index', comparing how well the world's big pharmaceutical companies are doing at providing people in developing countries with affordable drugs, could be just the shake-up this industry needs. Novartis continues its 6-year battle with the Indian government over pricing and patents, and GSK is still reeling from its record $3 billion settlement with the US government for fraud and civil liabilities (read: mislabeling drugs and covering up evidence in medical journals).

Instead, here's the quote the founder of the index chose to provide to sum up the challenge at hand (via The Guardian):

"Access to medicine is a multi-faceted challenge and therefore responsibility for improving it lies with a number of different actors, but the pharmaceutical industry has a critical role to play."

Gem of the day

Here's a gem that has to count in the top 5 worst forms of praise you can get in the business world (of Rich Kinder, CEO of American energy giant Kinder Morgan and former executive of massive, corrupt failure Enron):

“If Kinder had stayed on as president, Enron would still be here,” says Richard Smead, a veteran industry executive.

That seems just about right for a guy willing to say this about our global energy future:

Kinder says: "I’m not naive...I’m a huge believer in the genius of mankind, and I think we’ll continue to find new ways to utilize, explore for and produce more and more fossil fuels."

Another non-environmental wonder

London Mayor Boris Johnson has a solution to the UK's stagnant economy: sell cars to India (via The Telegraph):

"It is the economic partnerships that offer the most extraordinary prospects. Imagine selling a Jag to one in every 100,000 Indians. That’s a lot of Jags, and a lot of jobs."

Truly ingenious.

Another non-environmental wonder

News that Hostess, the infamous American manufacturer of sickeningly sweet snacks, has filed for bankruptcy, is attracting weirdly misguided analysis. Here's one gem (via Forbes):

"The company’s assets can become valuable properties of several of its rivals...I would imagine that its production machinery as well as several proprietary items such as recipes might make great additions to Kellogg’s, Kraft and even beverage giants CoCa-Cola and Pepsi. 'Have a Coke and a Twinkie' has a nice ring to it...Hopefully the brand can re-emerge as part of a company such as Keebler or Mondelez with proven track records that is able to make Twinkies the non-perishable item for which it is known."

Memo to Forbes: Twinkies are so artificial they can last up to 25 years without going bad. That's only one reason a nation facing 44% obesity rates by 2030 should never, ever eat them.

Gem of the day

The UK CFO of McDonald's on ethical sourcing (via FT):

“The health of farmers is important to us,” says Brian Mullens.

For a business that spends over £320m every year on produce from 17,500 British and Irish farmers, that statement could mean a lot.

In that case, given their record on health and their business strategy, which underscores "value will continue to be a key growth driver as we reinforce the affordability of our menu", they'd better not invest in feeding farmers McDonald's.

Gem of the day

There's been plenty of excitement about the Pentagon's growing interest in renewable energy. BP's astonishing return to "business as usual" in 2011 is case in point for why this shift could have a huge impact and change the game - because it really is a ridiculous game - for our global energy mix (via Businessweek):

"Since BP has admitted it violated criminal law, will the U.S. government stop doing business with the company? Not necessarily. BP is a big supplier to the federal government. It sold more fuel to the Pentagon in 2011 than any other company—contracts worth $1.35 billion...The military needs fuel for its tanks and trucks and planes."

Gem of the day

For the world's big food companies, there's an awkward cognitive dissonance at the heart of the sustainability agenda (via GSB).

It's the consumer's choice:

"Most large food makers have resisted government regulation, instead favouring self-regulation and emphasising the personal responsibility of consumers to make their own choices about diet."

But business markets to influence those choices:

"Marketing messages seen in food advertising strongly influence behaviour, especially among children who are forming eating habits that will last a lifetime."

Another non-environmental wonder

Just one potential reason why Microsoft lacks innovation (via Businessweek):

"The environment in Microsoft’s executive suite resembled something out of Game of Thrones, with division heads poaching talent from one another and thwarting attempts from other groups to collaborate on products."

Progressive.

Something that's actually good

Daniel Birnbaum, CEO of make-your-own-soda firm SodaStream, explains why the business models of Coke and Pepsi are out of date (via WSJ):

"If the beverage industry had to create itself now from scratch, it wouldn't do it the way it is. You don't need factories, trucks, bottles and cans. Transportation for carbonated drinks in the world utilizes 100 million barrels of oil every year. That is 20 times the BP disaster that hit the Gulf of Mexico. Every single day...[beverage companies generate] one billion bottles and cans, most of which just go to trash, landfill, the oceans or parks."

Gem of the day

Jeremy Leggett, CEO of renewables firm Solarcentury, reacts to today's report from the IEA predicting that oil will make the US the world's largest energy producer by 2020 (via Businessweek):

“It’s a comfortable narrative, and people are desperate to believe comfortable narratives."

And now for the uncomfortable narrative: as part of the report's launch, IEA head Fatih Birol called energy efficiency policy to date an "epic failure".

If Paul Ryan did the math, this scenario would probably add up.

Something that's actually good

Fantastic new report from nef makes the link between the economy's dependence on oil today and the banking industry in 2006, proving energy is our biggest barrier to prosperity:

"Unless nations prepare to break the relationship between fossil fuels and their economy, this will prolong or prevent recovery from the current economic crisis, in effect, placing a glass ceiling on recovery."

nef translates into clear policy terms what Kurt Cobb has described as "a financial system and physical infrastructure premised on continuous and rising levels of oil consumption."

In other words, it's the oil, stupid.

Gem of the day

Conservative MP Richard Bacon on HMRC's convenient tax relationship with Starbucks (via Guardian):

 "It smells – and it doesn't smell of coffee. It smells bad."

Another non-environmental wonder

An analysis of what it takes to win a campaign from one of Romney's advisors, almost as deep and meaningful as most of his "policy recommendations" (via NY Times):

“It’s one thing to say you are going to do it; it’s another thing to actually get out there and do it,” said Brian Jones, a senior adviser.

Another non-environmental wonder

Case in point for why our system for measuring prosperity is completely broken (via the FT):

"The storm that ravaged the north-east coast of the US last week will hit economic growth in the final quarter of 2012...However, economists are already looking forward to the likely boost to GDP next year from spending on reconstruction."

Another non-environmental wonder

McKinsey casts a dreamy look at the future for the world's emerging economies: replica USAs all around, with enough impersonal shopping experiences for everyone:

"Eventually, mom-and-pop stores may go the way of buggy whips, and the descendants of today’s village children in countries such as China and India may scoff at the idea of buying products and services anywhere but in climate-controlled malls or online sites. For now, though, manufacturers staking their futures on these booming economies must forge lasting relationships with a diverse set of retailers—before competitors do."

Gem of the day

Jack P. Williams, President of XTO Energy, shares some words of wisdom:

"Why am I so optimistic? Because I live in Fort Worth, which happens to sit on top of the most actively drilled shale play in the United States – the Barnett Shale. Where I live, shale gas activity is a familiar part of everyday life. You know that old saying, 'not in my backyard'? I don't have a shale well in my backyard ... but I can see one from my front yard."

Update

Eco Gems is in Brazil until the 5th of November...more gems from then!

Gem of the day

Why aren't more defence and counterterrorism analogies used in marketing and PR? Obvious answers aside, this HBR article unintentionally proves just how wrong that approach is:

"No longer passive audiences, [consumers] can organize to overturn even the most strategic initiatives. The result is a fundamental change that has put executive teams and board directors on high alert...We call this new dynamic 'customer insurgency'...how can organizations adapt to consumers armed with inexpensive weapons of mass collaboration? [...] Create your own volunteer army, and reduce the space for would-be insurgents to gain footing."

That's right, use corporate communications to silence or delegitimize what customers say. Because in the short term it's much easier than redesigning business to create value beyond profit.

Gem of the day

Conditions for offshore drilling and exploration in the Arctic are difficult - and even more so when your peers set the bar so laughably low for competence.

So what's Statoil's strategy, given that they intend to have a "strong focus" in the region?

"Memoranda of Understanding with various reputable institutions have been signed to learn and widen our expertise. Agreements range from UNEP Grid Arendal, Murmansk and Arkhangelsk Oblast to the Sami University College in Kautokeino and others."

This kind of tactical engagement for reputation must be what CEO Helge Lund is hoping will make his statement a reality:

"We see no long-term conflict between the interests of our owners and society’s expectations."

Another non-environmental wonder

Only the Economist would describe the financial system this way:

"Financial institutions are vulnerable to investigation, prosecution and litigation from every direction."

Or this way:

"If banks once did banking, now they practise law."

That must be why the leadership of banks have survived the financial crisis that crippled the global economy without a single prosecution.

Gem of the day

Was Deepwater Horizon a 'black swan' event? Unsurprisingly, not even BP can make up their own minds about that:

• CEO Bob Dudley says no: "It would be a mistake to dismiss our experience of last year simply as a black swan, a one-in-a-million occurrence that carries no wider application for the industry as a whole," he told an industry conference in March.
• EVP and Group Chief of Staff Dev Sanyal says yes: "Nassim Nicholas Taleb – the writer, academic and trader – defines a Black Swan as an event that occurs outside the realm of regular expectations...And BP – as you know – experienced such an event with the accident two years ago in the Gulf of Mexico resulting in 11 fatalities. It was a tragic accident and one that we deeply regret," he said at a symposium in May.

That must be the kind of cognitive dissonance BP is talking about when they define "what BP is looking for" on their global careers website:

"BP is an organisation as diverse as it is distinct."

Another non-environmental wonder

After a summer of over-the-top police aggression moments that felt more like the 1960s than 2012, one police force is making some changes. That's right, the Milwaukee Police Department is rebranding itself. A new, flashy website features images like the one below.

Great news. Because when I look at American police forces, the number one thing that clearly needs to change is their reputation.

Gem of the day

Integrating sustainability risks into decisionmaking is one of the most critical, but most complicated, challenges we face. After all, it's pretty clear that the system in place for publicly listed corporations and investors to deal with financial risks is a gross failure (see here, here and here). Regulators are constantly behind the curve trying to figure out where tomorrow's crisis is going to come from. Meanwhile, 'mutually beneficial' relationships between the big 4 accounting firms, those very regulators and the companies they are supposed to be keeping tabs on make it nearly impossible to reveal significant irregularities before they have an impact.

So why is the newly formed Sustainability Accounting Standards Board modeled after the Financial Accounting Standards Board? And what does it mean for the real task at hand: moving sustainability beyond simply 'talking the language' of the broken financial system, and making it a driver of financial transformation?

I'll leave it to HSBC Chairman Douglas Flint to reinforce that (via HSBC 2011 Sustainability Report):

"While the industry as a whole looks to reform, individual banks have their own story to tell about their role in the economy and society at large."

You can say that again.

Gem of the day

Reality check of the week:

8 out of the world's top 10 biggest companies are fossil fuel companies.

The good news is most of the people at these companies have no idea what they're doing and their most strategic challengers are starting to win big.

Another non-environmental wonder

Columnist Schumpeter of the Economist thinks this is a good way to sum up the influence of America on the world over the past few decades:

"America has been the world’s most important growth machine since the second world war...The machine was good for the world as well as America—it helped spread the gospel of capitalism and transform the American dream into a global dream."

In the words of novelist William Gass, "if Americans ever had a dictator they would call him Coach."

Something that's actually good

Computer scientist Sandy Pentland looks at how 'Big Data' is transforming the world and what that means for traditional organizations (big business and government, are you listening?). Via hub of genius Edge.org:

"The notion that it is connections between people that is really important is key, because researchers have mostly been trying to understand things like financial bubbles using what is called Complexity Science or Web Science. But these older ways of thinking about Big Data leaves the humans out of the equation. What actually matters is how the people are connected together by the machines and how, as a whole, they create a financial market, a government, a company, and other social structures...I expect to see that organizations with hard information boundaries will tend to dissolve, because there will be competition from things that are better that don't have the hard boundaries and don't try to own your data."

Gem of the day

The New Yorker reveals what's behind an NY Times hunch about the 'amazing' synchronization of ad campaigns against Obama:

"'To see many of the anti-Obama ads that have run on television recently, it would be easy to conclude that they were made in the same studios, by the same producers working for the same campaign,' Jeremy W. Peters wrote on Tuesday...New Federal Election Commission filings reveal a reason why the ads are so alike in style and substance: they do, in fact have a production firm in common. Guiding some fifty million dollars’ worth of anti-Obama television ads that ran in August and early September, sponsored by three major separate conservative groups, is the hand of Larry McCarthy."

We need this for pro-renewable energy.

Gem of the day

It's not like any sane person would pick up a feature on 'Capital Insights' sponsored and written by Ernst & Young and expect to find a remotely human view of the world.

But this gem blatantly saying 'active' investors need to be silenced still feels unreal:

"With investors increasingly taking a more active role in their investments, corporates need to make sure they are fully engaged with their shareholders in order to make certain that any potential problems are headed off before they begin."

Gem of the day

Al Gore's Climate Reality Project plans their next reality check on the climate: this time it's 'dirty weather' as the selling point for people to sit up and pay attention. But given the hard and depressing truth, where's the inspiration for the future? (via NY Times)

"...the event will focus not just on the fossil fuel industries but on organizations that sow doubt that climate change is under way, [Project CEO Maggie] Fox said. By filtering ideas, knowledge, and awareness of climate trends, she said, social media can be a tool for 'overtaking the noise' created by climate skeptics."

Competing with the opposition for air time on the issues is definitely a problem given the CRP's other key objective:

"More broadly, the Climate Reality Project’s goal is to forge connections between nongovernmental organizations working on climate change issues around the globe with individuals to spread awareness, Ms. Fox said in an interview. 'There are something like two million environmental N.G.O.’s around the world working on climate,' she said. 'We actually believe we have the numbers — but we don’t have the mass.'”

Right - and none of those 2 million NGOs have a positive, engaging way of talking about how we can address this reality. What they do have is plenty of post-Copenhagen depression.

No one should underestimate the need to transcend climate skepticism in the US. But we need more solutions, not just more talking points.

Gem of the day

More evidence that the digital/tech industry needs to seriously take stock of its role in sustainability: barrier or enabler?

In the case of Microsoft, 1970s-style tactics that confirm barrier status in a big way (via NY Times):

"Microsoft threatened to waste tremendous amounts of power by simply running giant heaters for no purpose, according to utility officials who said they were briefed on the matter by Microsoft, unless the penalty [$210,000 for running on back-up, highly polluting diesel generators] was largely forgiven. The idea was to burn the power fast enough to move closer to the forecast before year’s end...The Microsoft spokeswoman, Ms. Platt, said the company remained committed to the environment. 'Microsoft’s focus on efficiency and resource utilization has not changed,' she said."

And that would be economic, rather than environmental, efficiency Ms. Platt?

Gem of the day

It's so nice to see Spanish oil company Repsol catching up to the slick, empty corporate comms its peers use to avoid talking about real sustainability challenges (hello BP, Chevron, Exxon and Shell).

#avoidingclimatechange

Something that's actually good

Ingenious gem from Bill McKibben summing up everything that's wrong with behavior change + the environmental movement (via Rolling Stone):

"Since all of us are in some way the beneficiaries of cheap fossil fuel, tackling climate change has been like trying to build a movement against yourself – it's as if the gay-rights movement had to be constructed entirely from evangelical preachers, or the abolition movement from slaveholders."

Another non-environmental wonder

Mitt Romney's vision for America: every man for himself and zero human rights to a healthy, safe life (via The Guardian).

"All right, there are 47% who are with him (Obama), who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to healthcare, to food, to housing, to you-name-it."

That's a great plan Mitt, considering the latest US census shows 1 in 5 American children lives in poverty and unemployment benefits kept 2.3 million Americans from falling into poverty in 2011.

Gem of the day

Time to take another look at why renewables aren't getting the traction they need, especially in the US.

The American landscape (via NY Times):

"With nearly two months before Election Day on Nov. 6, estimated spending on television ads promoting coal and more oil and gas drilling or criticizing clean energy has exceeded $153 million this year." [Getting aggressively consumer-facing, such as this I'm an Energy Voter campaign]

The mindset of major American NGOs in response:

"The Climate Reality Project is not buying television ads at all, focusing instead on social media, training and organizing. 'Whatever we would spend, it would just be washed away in this sea of fossil fuel money,' said Maggie L. Fox, the group’s chief executive."

“We are being outgunned by orders of magnitude...There is just no way we can compete with some of the richest companies in the history of the world," said Michael Brune, executive director of the Sierra Club.

Right.

Gem of the day

Why we need Wikileaks for the oil industry (via the genius of Resource Insights):

"Many of these [OPEC] countries say that a detailed audit of their fields by independent observers is out of the question because oil reserves are a state secret...Are there reasons to believe that if we saw this data it would contradict the official overall number provided by some countries? In a word, yes."

And case in point:

"The United Arab Emirates has been reporting 97.8 billion barrels of oil reserves every year since 1997."

Gem of the day

Mitt Romney makes it clear, one last time, that he has no idea how big a threat climate change and environmental degradation are to the American economy (via MSNBC):

"I’m not in this race to slow the rise of the oceans or to heal the planet. I'm in this race to heal the American people."

Okay Mitt - go ahead and try doing that without dealing with the impacts of more natural disasters, rampant inequality, higher and more volatile prices from an oil-based economy, toxic pollution and food deserts for the poor.

And you can start by ignoring the $22 trillion the Clean Air Act has since saved the U.S. in healthcare costs.

Gem of the day

Beverage giant Coca-Cola has a new campaign: A Billion Reasons to Believe in Africa. And they're not shy about stating why their campaign is just as refreshing as their sickeningly sweet drinks:

"The world may choose to see Africa as dark, hopeless and a home to war, famine, corruption, poverty and disease, but we at Coca-Cola choose to see this beautiful continent through a fresh and colorful lens."

And why is Coke best positioned to do this campaign? See this gem which unintentionally sums up why this is so, so wrong:

"Coca-Cola has operated on this continent for several decades with footprints that extend to every country."

You bet, Coke. Here's to making those sugary footprints even bigger.

Gem of the day

One company's very special definition of why PR to attract employees is important to the business:

"We will not only be in a stronger position to win the war for talent, but will also increase the engagement of current employees."

Something that's actually good

Kurt Cobb via EnergyBulletin single-handedly debunks all of the myths we hold about oil:

• Half of all oil consumed since the beginning of the oil age has been consumed since 1985
• Peak oil does not mean that we won't find any more oil. We are finding oil every day. We're just not finding enough and putting it into production fast enough.
• Peak oil does not mean we are running out of oil...The rate of production is the key, not the size of the world's reserves.

Oh, and then there's this magical gem:

"Perhaps it will seem puzzling that experts inside the industry--with a few notable exceptions--cannot grasp that the rate of production is the central issue. The best explanation I can offer is to quote author Upton Sinclair: 'It is difficult to get a man to understand something, when his salary depends upon his not understanding it!'"

Amen.
 

Gem of the day

There are many, many things that could be said about former BP CEO Tony Hayward's latest venture. Here's one: it's the ultimate example of unsustainable, inherently risky business without purpose (via NY Times):

"Mr. Hayward, Mr. Metherell and Mr. Rothschild...set up what is known as a cash shell, a company with no business, just a promise that it will find one. It was called Vallares. Mr. Hayward then spent weeks in New York, London, Abu Dhabi and beyond, drumming up investors. Vallares eventually went public on the London Stock Exchange, raising $2.1 billion. That money, Vallares said, would be used to buy unspecified oil and gas assets in emerging markets, although Mr. Hayward hinted that he was interested in Kurdistan."

Even better is the quote from Mehmet Sepil, a 'pioneer' in Iraqi oil investment:

“I didn’t know anything about oil but the tank of my car,” Mr. Sepil recalls. 

Don't worry Mr. Sepil - neither does anyone who works in the oil industry.

Another non-environmental wonder

Only The Economist would write about the global arms trade like this:

"America’s exports in particular are helped by a long-standing client base, which orders upgrades, spare parts and support services every year."