From the article: “They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales…the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.”

According to Wired Magazine writer John Barlow, the concept, which goes directly against traditional business models, is based on the notion that it is not scarcity that creates value: “in the information economy, “the best way to raise demand for your product is to give it away..What people today are beginning to realize is what became obvious to us back then—the important correlation is the one between familiarity and value, not scarcity and value.”

Anyone who is interested in subjects such as these would be well-served by paying attention to certain articles and podcasts written byCory Doctorow, a science fiction writer and founder of the very popular BoingBoing.net blog.

In his collection of essays, Content, Mr. Doctorow explains how he convinced the publisher of his science fiction book, Down and Out in the Magic Kingdom, to let him post the entire text of his book under a creative commons license. Anyone who downloads the book is free to read, distribute and copy the book, and are encouraged to use the text to create derivative works.

Mr. Doctorow explains how some people buy the physical version of the book, while others download the free version. Many who download the free version never intend on buying the book anyway, but many others do end up buying the real book, either as a way to support the author, or because they like reading books in their traditional form.

The most important thing for a writer, Doctorow explains, is to get his name out there, far and wide, and people who like his book will send it to their friends and/or create derivative works, and this gets his name and writing distributed much further than traditional publishing could do. This ultimately translates into money in his pocket, directly through book sales, and through other methods, such as speaking engagements. His sales records are additional proof that this method works.

The Grateful Dead became one of the biggest money-making bands of all time by essentially giving away their product for free. As Mr. Doctorow and many more cutting-edge content producers are re-discovering, this type of marketing is a win-win for everyone. Perhaps more traditional companies should take notice.

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. You can find out more about Creative Commons licensing here.on twitter.

News outlets and the blogosphere are abuzz with reactions to Thursday’s Supreme Court decision that will allow corporations to fund political campaigns. The ruling, which overturns decades of legal precedent and legislation limiting the ability of corporations to influence the outcome of elections, may have broad implications for the political process in the U.S. News of the decision has drawn criticism from both the right and the left, many voicing the opinion that dramatically increased rights for corporations will significantly diminish the ability for individual citizens to have their voices heard.

In his weekly address, President Obama said, “I can’t think of anything more devastating to the public interest,” he said. “The last thing we need to do is hand more influence to the lobbyists in Washington or more power to the special interests to tip the outcome of elections.” Congressman Alan Grayson (FL) has already introduced legislation to combat the policy change. His “Save Our Democracy” Reform Package contains several strong measures, including a 500% excise tax on corporate contributions to political committees, and on corporate expenditures on political advocacy campaigns.

Although some claim that this most recent ruling will have only a limited effect on the political process, the decision certainly re-confirms the doctrine of granting constitutional rights, originally reserved for flesh-and-blood U.S. citizens, to corporate entities, which have held the dubious status of “legal persons” with rights since 1886, when another Supreme Court decision accorded it to them. This unexpected action by the Court re-opens the debate about about the wisdom of affording corporations such rights, and what effects this all has for sustainable business.Profit over people and planet
Readers are likely familiar with the sustainability concept from which TriplePundit derives its name : the “Triple Bottom Line.” Instead of the traditional (single) “bottom line”, referring to business profits as the only real measure of business success, the Triple Bottom-Line measures a successful and sustainable business by three spheres of equal importance: People, Planet and Profit (the “three P’s”). One easy way to tell if a business is unsustainable is the extent to which one of the three P’s, profit, grossly outweighs the other two, in terms of importance and magnitude.

For quite some time now, most businesses have been unsustainable, and most corporations have been pursuing profit for their shareholders above everything else. But this is not simply the result of cultural bias, overly greedy CEOs, or an uninformed public. By allowing corporations the same constitutional rights as human beings, the courts have created a system under which profits must take precedence over people and planet.

The “suicide economy”
In her presentation entitled The Democracy Crisis, Riki Ott, a marine biologist who fought Exxon after the Valdez oil spill, posits that our current form of governance is what she calls a “Corpocracy”, what some might call Corporatism, where unchecked corporate rights inevitably lead to a “suicide economy”, in which the destruction of environmental and social wealth causes huge profits to be made. She cites several examples: The Exxon Valdez oil spill (cleanup boosts Alaska’s GDP), Wars and disasters (boost national GDP), and healthcare (Sick people buy more healthcare, so more sick people equals greater GDP).

Equally protected pillage
In the article Corporatization: An Internal Clash of Civilizations , Ben Manski and John E. Peck write that, “Within the framework of U.S. constitutional law, in which personhood conveys fundamental protections against state action, the dubious doctrine of corporate personhood has allowed corporations to gain constitutional insulation from democratic control of corporate investment in key activities, including electioneering, lobbying, advertising, resource extraction, and manufacturing…. corporations have usurped the legal claim to personhood, while remaining free of the accompanying moral obligations or physical limitations of natural persons”

Because the Supreme Court has been slowly taking away the States’ power over corporations (put in place specifically because many of our founding fathers feared the potential abuse of unchecked corporate power) the situation keeps getting worse and worse. The following are just a few examples of protections that are currently the right of corporations, and their sustainability impacts, from the article “Corporate Personhood and the “Right” to Harm the Environment”:

• Fourth Amendment, “The right of the people to be secure. . . against unreasonable searches and seizures. . .”
  “Under many circumstances, corporations have the right to “shut the door” on government inspectors who lack a search warrant. The resulting delay may be enough for a company to cover up signs of wrongdoing. Even if evidence is collected under a search warrant, there is no guarantee that it will hold up in court.”
• The Fifth Amendment, “. . . nor shall any person. . .be deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use, without just compensation.”
  “Corporations have the right to challenge governmental actions that protect the environment by claiming they are “takings” of their property rights. Further, the government may be required to provide monetary compensation for any consequent reduction in property value, even intangible property value such as lost potential profits.” Corporations even have the right to “not speak”, so as to not incriminate themselves!
• The 14th Amendment, “. . . nor shall any State . . . deny to any person within its jurisdiction the equal protection of the laws.”
  “By using the cry of “equal protection” to open the courts to them, corporations can evade, if not overturn, regulations while conducting business as usual.”

And finally,

• The First Amendment, “. . . no law. . . abridging the freedom of speech. . .”
  “The First Amendment right to free speech has been broadened by the courts to allow corporations to give campaign contributions, lobby legislators, run advertisements that support their interests, exercise the right not to speak, and paint their activities as ‘green.’ “

Given that the Supreme Court had previously established that corporations were persons due 14th Amendment rights, they really had no choice but to decide that corporate speech could not be restricted. To do otherwise would be to invalidate both the equal protections of the 14th Amendment and the guarantee to free speech of the FIrst Amendment. To truly solve this problem, the notion of corporate personhood must be turned back to its original definition, which allowed corporations simply to make contracts, own property, and to sue or be sued.

Power to the people
Americans must re-assert that Constitutional rights are the rights of living persons only, and do not apply to “legal fictions”. Americans must also re-establish the absolute rights of the States over Corporations, meaning that States could revoke corporate charters, levy differential taxes and revoke the right of corporations to have jury trials, saving years of litigation and untold millions of taxpayer dollars.

To conclude, I would like to point out what is perhaps the most appalling aspect of this entire topic. While individual civil rights, such as women’s and minority rights, were gained at the cost of many years, lives, hard work and sacrifice, corporate rights were gained simply through Federal court decisions, with no public debate whatsoever! Oddly enough, this prospect was foreseen by Thomas Jefferson, and, in 1821, and he was quoted as saying, “The Engine of consolidation will be the Federal judiciary; the two other branches the corrupting and corrupted instruments.”

I think it is about time that we stop proving Mr. Jefferson right.

(If you are interested in learning more about this topic, I highly recommend reading the linked articles, which provide many and detailed examples, much too lengthy to be included here.)

Resources:

• Citizens United, Majority Opinion [via movetoamend.org]
• Citizens United, Dissenting Opinion [via movetoamend.org]
  
• Citizens United, Other Justices’ Dissents or Concurrences [via movetoamend.org]
  
• Alan Greyson “Save Our Democracy” petition
• Program on Corporations, Law and Democracy [poclad.org]
• Move to Amend/Campaign to Legalize Democracy
• Corporatization: An Internal Clash of Civilizations
• “Corporate Personhood and the “Right” to Harm the Environment”
  
• Proposed Constitutional Amendments to revoke corporate constitutional “rights” [reclaimdemocracy.org]
• Keith Olbermann Special Comment On Supreme Court Ruling – Part 1
• Keith Olbermann Special Comment On Supreme Court Ruling – Part 2

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. You can find out more about Creative Commons licensing here.on twitter.

According to non-profit marketing organization SmartPower, even though 80 to 90 percent of the public agrees that energy from renewable sources is better than energy produced from fossil fuels, and they are willing to pay $5 or $10 more per month for that energy, the market penetration of renewable energy products still remains below 5 percent. The company aims to change that by researching exactly what barriers consumers face when they are considering a clean energy or energy efficiency purchase, and then combining innovative marketing campaigns with grass-roots action to overcome these barriers.

SmartPower’s latest campaign is the Energy Smart Ad Challenge, offering a $10,000 prize for the best 30-second Public Service Announcement (PSA) promoting how young adults can save money by being Energy Smart through energy efficiency and conservation. The 10 finalist videos were posted on YouTube Friday, and viewers are invited to comment on how well the videos “speak to young people about being energy smart.” Each day, one video will be eliminated from the competition, presumably with the viewer input weighing heavily in the decision. As of this writing, the video titled “Generation”, (posted at the top of this article), was far and away the viewers’ favorite.

This type of competition is a form of crowd-sourcing that has been used very effectively by a number of organizations to engage their target audience very deeply with the organization’s message, by having them generate the message for themselves. The company usually provides the tools and/or guidelines, and the audience creates the content. Sometimes this is taken even further by having the customer design the product as well.

Although this has been quite effective for many companies, including Doritos, HP, JetBlue and MasterCard, it has backfired in a few cases. As Chevrolet found out the hard way, companies attempting to implement a crowd-sourced advertising campaign must do their research, and make sure that their customers have a positive image of the company and its products, otherwise the audience will likely hijack the campaign to vent their frustrations.

In general, crowd-sourced marketing campaigns have several advantages over traditional marketing: lower costs, a higher return on investment, closer engagement with the customer base, and, in many cases, a higher quality advertisement or product than would be produced by professionals. It makes sense for an organization like SmartPower to use a strategy like this, since it affords the company to compete with marketing giants such as Doritos, with much larger budgets than a small non-profit would have.

Tell us which SmartPower ad is your favorite in the comments!

Around the Web:

Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business by Jeff Howe (amazon.com)

Want Obama Girl? Save Your Energy! (BarelyPolitical.com)

Energy Trust of Oregon: Solar Incentive Research Study (smartpower.org PDF)

Amazon Crowdsources TV Ad Campaign (podcastingnews.com)

Chevy’s ‘Make Your Own Tahoe Commercial’ idea not exactly going as planned (autoblog.com, 2006)

Crowdsourced Advertising: How We Outperform Madison Avenue (flow.tv)

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. You can find out more about Creative Commons licensing here.

In the glorious Past Before Television, adventurous men and women gained fame and fortune by testing their skills in competitions designed to expand the limits of human knowledge and innovation. Several organizations are bringing back this kind of “innovation prize” in a big way, with competitions designed to solve some of humanity’s greatest challenges, and expand its horizons beyond terrestrial limits.

One of the greatest scientific breakthroughs in history was the result of a prize offered by the British government in the 18th century. At that time, many ships were being lost due to the inaccuracies involved in calculating their longitude at sea. The previous method, dead reckoning, introduced greater errors the farther the ship got from a known point, usually ending in loss of life and heated discussions about the velocity of various types of swallows. The British Parliament offered the modern equivalent of $4.56 million for a solution to the Longitude Problem.

One of the potential solutions to the problem required invention of a marine chronometer of such high accuracy that even Sir Issac Newton doubted that it could be created. But, in 1730, clockmaker John Harrison set himself to the task, and effectively solved the multiple problems of corrosion, temperature, humidity and durability within 5 years, (although it took him another thirty to collect his prize) a task which has been compared to the landing of men on the moon in the 1960s.

Other famous historical prize winners have included Nicolas Appert, who answered Napoleon’s challenge to invent a new food preservation method; Charles Lindbergh, who won $25,000 for flying solo across the Atlantic, Louis Pasteur, for his work in physiology; and a team from IBM, whose chess computer, Deep Blue, was the first to beat a human being, chess champion Gary Kasparov.

More recently, the X-Prize Foundation, the brainchild of serial entrepreneur Peter Diamandis, has been offerring prizes in the $10 million to $30 million range for solutions to big challenges in areas like space exploration, genomics and energy. Mr. Diamandis believe that by offerring huge prizes for people to take extraordinary risks, he can harness our competitive nature and drive major breakthroughs just where we need them most. His most famous venture to date, the Ansari X-Prize, awarded $10 million to aviator Burt Rutan’s team for being the first to achieve a private suborbital space flight, and then repeating the task two weeks later. The success of the Ansari prize rekindled public interest in space flight, and has lead to the numerous successors.

Mr. Diamandis envisions a new model for philanthropy, with a return on investment of 10x to 40x the amount invested (the prize money). Unlike traditional philanthropy or venture capital, the x-prize model doesn’t require the investor to bet his entire investment on the winner to get a return on his investment.

The X-Prize Foundation is currently sponsoring the Progressive Automotive X-Prize, for the fastest vehicle with 100mpg efficiency and a 200-mile range, the Archon X-Prize for Genomics for the first team that can build a device and use it to sequence 100 human genomes within 10 days or less for under $10,000, and the Google Lunar X-Prize for the first privately-funded team to safely land a robot on the surface of the Moon, travel 500 meters over the lunar surface, and send images and data back to the Earth.

The company envisions potential future competitions may include an entire suite of prizes dedicated to energy and environment, a Village Utility X-Prize, leveraging technology-based innovation to develop more effective ways to deliver power, water and connectivity to communities in need in the developing world, and life sciences X-prizes in TB DIagnostics and improving healthcare in the U.S.

But prize competitions are not limited to the X-Prize foundation. The Defense Advance Research Projects Agency (DARPA), has sponsored several competitions, including the DARPA Grand Challenge (robot vehicles in the desert), the DARPA Urban Challenge (robot vehicles in the city) and the DARPA Balloon Challenge (wide-area team building using the Internet). NASA sponsors its Centennial Challenges including the Astronaut Glove, Power Beaming and Lunar Lander Challenges and also co-sponsors the Space Elevator Games.

More environmentally-focused competitions about as well. The DOE sponsors the L-Prize and H-Prize for innovations in lighting and hydrogen technologies. The Smart Gear Competition, developed by the World Wildlife Federation seeks “to inspire and reward practical, innovative fishing gear designs that reduce bycatch.” Of course, no article about innovation competitions would be complete without mentioning the DOE’s Solar Decathalon, where college and university teams compete to design solar-powered houses, or the upcoming American Solar Challenge, a cross-country race featuring solar-powered cars.

Further Reading:

Peter Diamandis: the joy of taking risks (newscientist.org)

An Interview with Peter Diamandis, Founder of X PRIZE: On Colonizing Space and Reinventing the Philanthropy Model (opportunitygreen.org)

Video: SpaceShipOne: Prize Flight #2 (youtube.com)

Electric Vehicles: The News Keeps Coming (triplepundit.com)

Marc Gunther: The Strange Power of Prizes (marcgunther.com)

Longitude: The True Story of a Lone Genius Who Solved the Greatest Scientific Problem of His Time (Amazon.com)

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. You can find out more about Creative Commons licensing here.

The worst offenders, credit card companies and banks, have recently found themselves on the wrong end of legislation, the CARD Act of 2009, is intended to put a stop to some of the worst practices, such as excessive interest rate increases and unfair fee traps. True to form, this has not stopped the credit card companies from attempting to extract as much money from their customers as possible. According to Consumers for Competitive Choice, “…rather than react responsibly, the credit card industry has flouted the will of Congress and the Administration by moving quickly to raise rates, increase fees, and reduce available credit before the law takes effect next year.” In a completely new tactic, the credit card companies have decided to shift their focus to credit card transaction fees, an area that Congress has not yet addressed, and something that Consumers for Competitive Choice representatives feel we should all be very concerned about.

Headquartered in Indianapolis, Ind., Consumers for Competitive Choice, (C4CC) is a national alliance of consumer advocacy groups and private citizens who are committed to promoting maximum choice for consumers in communications, energy, health care and financial services. The organization has spun off a new project, called the Credit Card Con, to bring attention to the issue of credit card interchange fees. Last week, the company held a teleconference to bring attention to the recently released report by the General Accounting Office (GAO) on the matter.

According to a recent expose hosted on the PBS show Frontline and sponsored by the New York Times called The Card Game,

In the U.S., merchants pay 1.8 percent of every credit or debit card transaction to have the payment cleared. Last year, interchange fees cost them roughly $35 billion, according to The Nilson Report, a newsletter that tracks card payments. It’s the second-highest expense for many businesses, after labor costs, and some merchants say that the fees hurt, especially when they’re struggling to survive the recession.

Currently, consumers do not notice the effect of interchange fees on retail prices, since most credit card companies, such as Visa and MasterCard, restrict their vendors from charging lower prices for customers paying with cash, afraid that more people would use cash if they realized that it was actually cheaper. In addition, these same credit card companies restrict retailers from refusing their higher-fee cards, and limit their ability to negotiate fees by negotiating together with other merchants.

According to the The Card Game website,

One of the problems with interchange fees, say merchants, is that the rates vary depending on the type of card used in the transaction, making it very difficult for businesses to know what they’ll end up paying at the point of sale. Debit cards have cheaper interchange fees than credit cards. Rewards cards have the most expensive fees.

Another problem, say critics, is that unless you’re an industry insider, it’s almost impossible to figure out how they come up with the interchange rates, how much money is being made, and where it all goes.

The collusion amongst credit card companies is massive, and the current anti-trust lawsuit is “the largest private antitrust litigation in U.S. history.”

The GAO Report outlines several methods for reining in interchange fees, including allowing retailers to band together to create leverage when negotiating fees, putting a cap on fees, disclosing fees to consumers, and allowing merchants to refuse higher-cost cards.

Although regulating interchange fees would seem like a good thing, it could possibly cause consumer prices to actually go up, as happened in a few cases in Australia. While a few card companies cut their interchange fees in advance of government regulation, their annual fees went up, grace periods went down and the cost of using frequent flier miles went up. And even though their costs went down, some retailers went so far as to charge their customers a surcharge for using credit cards, in an attempt to recoup the remainder of the interchange fees.

So, what does this all mean, from a sustainability perspective? While I believe that regulating the credit industry is necessary to protect consumers from excessive fees, it appears that even with government intervention, using credit cards will continue to be a costly exercise for most people.

It is hard for me to see this as a bad thing, though. Access to easy credit along with massive overspending is what has led a large number of people into financial ruin. This is partly due to the fact that there have been little or no incentives for individuals to save their money. Perhaps this will be a reason for people to start saving their money, so that they will use cash or debit cards before they buy something. Hopefully, this could bring us back to a time where people will give more thought to what they buy and how they spend, and perhaps be one more small step towards a culture that doesn’t consume quite as much.

What do you think? Should credit card interchange fees be regulated? Tell us what you think in the comments.

Resources

The Card Game: Seven Things You Need to Know (PBS.org)

Fact Sheet: Reforms to Protect American Credit Card Holders (WhiteHouse.gov)

Survey Shows Many Consumers Are Unaware Of Gift Card Fees (Dow Jones)

Credit Cards Still Use Soon-To-Be Banned Policies (AP)

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. You can find out more about Creative Commons licensing here.

AngelPoints, Inc. is a Sausalito, California-based software company whose mission it is to make it easier for large organizations to communicate, organize and measure their employee volunteer efforts. Their initial products, available since 2001, have mainly focused on corporate fundraising efforts, and are used by some of the world’s largest companies, like Toyota, eBay, Intuit and Hilton.

The company recently announced that it is launching a new product aimed at increasing employee participation in sustainability projects. The concept, called “PSP”, short for Personal Sustainability Practice, is an idea which was originally developed by Adam Werbach and his company Act Now Productions (now part of Saatchi & Saatchi S) for Wal-Mart, and has been wildly successful in that company’s efforts to green its operations and image. Saatchi and Saatchi S is consulting with AngelPoints on implementing this and other employee-focused sustainability products.

About a year ago, I, along with my Presidio colleague Olga Bolotina, assisted AngePoints’ management in their initial evaluation of a PSP offering. Our reports included a feasibility study of a PSP management software product, with a analysis of the beneits to the company’s clients and a financial analysis of the costs of implementation. We found the methodology created by Bob Willard, author of The Sustainability Advantage, particularly useful in calculating some of the harder to quantify benefits, such as employee retention and brand value.

As we outlined in our report, PSPs are wonderful tools for engaging employees in sustainability projects, and one of the main reasons is that there is almost no restriction on the type of project that can be taken on. The employee is encouraged to choose something that is very important to them, and either improves their personal sustainability, he sustainability of the company or the sustainability of the local community. Projects can be as small as in individual weight loss, or as big as a company-wide recycling effort.

According to Walmartstores.com, Wal-Mart had seen the following benefits from PSPs:

“As of September 2007, associates told us that they’ve recycled 675,538 pounds of aluminum, 282,476 pounds of glass, 5,953,357 pounds of paper and cardboard, and 3,177,851 pounds of plastic; walked, biked and swum more than 1,109,421 total miles; cooked 368,779 healthy meals; and lost a total combined weight of 184,315 pounds through PSP. In addition, 19,924 associates tell us they’ve quit or reduced smoking. Interestingly, Associates say they have shared the PSP program with 375,824 of their friends, family and community members outside of Wal-Mart.”

PSPs have 5 major advantages for corporations that can be measured in dollars and cents:

1. Reduced expenses at commercial sites
2. Higher productivity of employees
3. Higher retention of top talent
4. Increased revenue from attraction of green consumers
5. Higher Company Valuation

These and other advantages can also be achieved with many other types of corporate sustainability projects.

There are several unique attributes of AngelPoints’ PSP management software that should allow it to be very successful. The software uses a web 2.0 methodology, with a Facebook-like profile and features tailored to the corporate environment. This allows two-way interaction between employees and managers or employees and their co-workers. This enhances the “bottom-up” features of the PSP, which results in a higher level of engagement and ownership for project participants. It also allows for individuals and groups to share their progress with others, leading to much greater transparency and accountability and resulting in increased engagement, results and more.

From a management standpoint, the most useful feature is likely to be the ability of the AngelPoints’ software to track volunteer participation and statistics on a company-wide, department or individual level. This allows management to put specific, measurable and audit-able numbers to their sustainability efforts. Data like this is extremely important for companies who are publishing sustainability and CSR reports, and when making the business case for sustainability efforts.

I sincerely applaud AngelPoints and Saatchi & Saatchi S for bringing this idea to fruition. I am very happy to have played some small role in it. With AngelPoints’ huge installed customer base, this could have a very significant impact on sustainability efforts nationwide.

Several pieces of this strategy were unveiled in San Francisco last Thursday, at an event entitled Inside Ford’s Electrification Strategy. Ford’s newly-titled Director of Global Electrification, Nancy Gioia, explained how the company is not only planning to build battery-electric (BEV) and plug-in hybrid electric (PHEV) vehicles, but is also working on strategies to build the infrastructure that will support those vehicles. Attendees at the event were also invited to test-drive two news Ford vehicles, the Escape PHEV and the Focus BEV. While my fellow 3P contributor will be posting an in-depth look at Ford’s electrification strategy itself, I would like to discuss some of the other things that make up the company’s overall strategy.

[MORE]

How well Ford Motors’ actions measure up to the statements that the company has made is something that remains to be seen. Some commitments made by the company were only made after pressure was applied by shareholders. As it has been said, the proof of the pudding is in the tasting. However, the company has made some notable past efforts in greening its operations, led by current Chairman of the Board, and former CEO, Bill Ford.

Mr. Ford, Great-Grandson of founder Henry Ford is known to be an environmentalist, and has made several attempts in the past to move the company in a more sustainable direction, some very successful, and some dismal failures. His major success was the transformation of the River Rouge plant from a polluted industrial brownfield site into a model of green design, complete with green roof. Failures include canceling the company’s electric vehicle program, and the inability of the company to keep to its 2000 commitment to increase fleet gas mileage by 25% by 2010.

What is interesting about these failures is that the company cited market conditions as the main cause. As long as the consumers were demanding larger vehicles, the company needed to provide them, in order to remain in business. Ironically, it was rapidly changing consumer demand that almost put the company out of business, as the economy, rising gas prices and concern about climate change caused buyers to flee SUVs in favor of smaller cars and hybrids.

Huge corporations are not known for their ability to turn on a dime, they are more like Titanics on a competitive ocean, their rudder (leadership) too ineffective to avoid the oncoming iceberg. Perhaps this kind of disaster is the only thing that would allow such an entrenched company to make the necessary changes.

So what, exactly, is the company’s strategy? According to Ford’s Director of Sustainability John J. Viera, the company is not banking on any one technology to solve the various challenges of emissions and oil dependency. Instead, it plans to introduce vehicles which run on a number of different fuels, and employ different technologies in different situations, appropriate to the situation. In addition, the company will become more involved in the fuel delivery process, as in the case of electricity and biofuels.

This was very evident while I was riding in the new Ford Focus BEV, accompanied by a Ford engineer and several of my media colleagues. The vehicle, a prototype of one scheduled to be released in the US in 2011, has a current range of approximately 80 miles, with the production model slated to have about a 100 mile range. During our ride, the engineer explained that Ford did not intend for the BEV Focus to be a car that would be driven by everyone, but would mostly be marketed as a second car or commuter car for those with commutes in the appropriate range. For longer trips, a PHEV is more appropriate.

Ford is also putting it’s money on vehicles that can run on several different types of fuels, also known as “Flex-Fuel” vehicles. These cars and trucks can use Ethanol as well as gasoline. (There are even rumors of a flex-fuel hybrid.) Another type of multiple-fuel vehicle being planned is one that has multiple fuel tanks, such as a propane and gasoline combination. In addition, the company is moving into biodiesel, and will be offering a B20 biodiesel-capable engine for its 2011 F-series trucks.

Although Clean Diesel vehicles are already being produced in Europe, the cost to bring this technology to the U.S. is currently prohibitive, but, according to Motor Trend, the company is planning on being able to offer a clean diesel engine for larger vehicles, such as the F-150 and Expedition, by 2020. This could potentially result in clean diesel technology ending up on other Ford vehicles.

By introducing an assortment of vehicles, with different types of engine running on a number of fuels, the company hopes to diversify the current U.S. portfolio of vehicles away from gasoline. By having a large number of technologies at it’s disposal and readying its worldwide operations to switch technologies quickly, “Ford anticipates it will be ready to leverage the right vehicle fuel and energy sources when and where they are needed in the future (EcoTuesday.com)“. Like diversifying a stock portfolio, this strategy would reduce the risks of dependency on oil, in addition to reducing overall greenhouse emissions.

Speaking to the various Ford representatives, and listening to their presentations, you do get the sense that at least some of Ford’s management are very well-versed in the language of sustainability, and the strategies that they are outlining appear to be sound and well thought out. If these could be implemented in toto, it seems likely that they would work.

However, it does appear that a healthy dose of skepticism is still in order. Ford’s short-term strategy for boosting fuel efficiency is something called “EcoBoost”, which essentially uses smaller, turbo-boosted engines to replace larger engines, something that SAAB has been doing for years. I have to admit, when I first heard about this, I had that same icky feeling that I had when SAAB attempted to pass off turbo-boosting their engines as “recycling”. The catchy, too-green, name, and too-good-to-be-true claims have a faint smell of greenwashing about them; this Wall Street Journal article clearly shows that Ford is likely overstating the fuel economy benefits of turbos.

Perhaps the EcoBoost thing is simply a misstep by a company trying to do anything it can to survive. I really do hope that Ford ends up proving me wrong, for everyone’s sake. A company of this size and influence is in a position to make a huge difference in the multiple fights against climate change and oil dependency. All that is needed is for the company to take its sustainability strategy seriously and to empower good people like the ones I met on Thursday.

What do you think, is Ford going to come through on its sustainability promises?

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. Find out more about Creative Commons licensing.

…a hitherto obscure macroeconomist who died over a decade ago. Many economists had never heard of him when the crisis struck… But lately he has begun emerging as perhaps the most prescient big-picture thinker about what, exactly, we are going through…Minsky was one economist who saw what was coming. He predicted, decades ago, almost exactly the kind of meltdown that recently hammered the global economy.

Minsky basically believed that the conservative fiscal stance which comes in the wake of a financial collapse, such as the Great Depression, would inevitably sow the seeds for the next crisis decades down the road. The main ingredients are time and short human memories, “Instability,” he wrote, “is an inherent and inescapable flaw of capitalism.” The article compares Minsky’s view to the one held by mainstream economics, that capitalism is self-regulating and self-stabilizing, known as the Neoclassical Synthesis.

Having a Minsky Moment

Minsky’s theory, known as the “Financial Instability Hypothesis,” works like this: in the wake of a financial collapse, the remaining lending institutions will see to take on less risk and revert to extremely conservative practices, which results in everything running smoothly for a while. As time goes by, and people are farther and farther removed from the source event, they are more and more willing to take on risk. Ultimately, this leads to greater and greater speculation, as more and more risky borrowers enter the market, what Minsky called a “euphoric economy”.

The end comes when the riskiest of borrowers enter the market, those whose borrowing can only be paid for with more borrowing, essentially a Ponzi scheme. Once the economy enters this fragile state, it only takes one small incident to topple the whole house of cards (This moment is referred to as the “Minsky Moment”), as everyone tries to shed risk and the cycle basically starts again.

If any of this sounds eerily familiar, that’s because it is exactly what happened this time.

Damage Control

Minsky suggested that it may be possible to mitigate some of the damage by implementing some policies that you also may be familiar with. The first would be a monetary policy in which the Fed would serve as the lender of last resort, in order to stop the bleeding and keep credit flowing. This policy was not implemented in time during the Great Depression and may be what led to it being so long and so deep. It has been implemented widely during the current fiscal crisis, although it is too soon to tell if has worked, although the signs are promising.

The second of Minsky’s policies was that the government should also act as the “employer of last resort”, employing everyone in need of a job at some minimum wage, and putting them to work on socially beneficial task. A form of this policy was used by Teddy Roosevelt and others during the Great Depression, and resulted in much of the infrastructure we currently use, such as bridges, highways and national parks. However, this policy has not been implemented by our current and recent leaders, which brings me to the real point of this article.

I find it interesting how easily the our current government, whether Democrat or Republican, found it to implement one part of Minsky’s plan, being the lender of last resort for financial institutions, yet finds it unpalatable to implement the other half, i.e. putting people to work. It is odd how people like Fed Chairman Ben “Helicopter” Bernake and President Obama have so eagerly adopted only the part of the plan which benefits business and financial institutions.

Odd how one is called “socialism” while the other is called “good business”. I believe that we may be leaning towards the form of government known as corporatism. (Some would call this a form of fascism, although not in the nationalistic sense.)

Too Many Clunkers

Our government seems to be much more willing to put corporations first, by funelling money to one pork project or another. Cash for Clunkers is a perfect example. While it did provide a short-term boost to auto dealers and auto manufacturers, it neglected the fact that people without jobs can’t afford to buy a car at any price, and the program ended up selling a lot of second and third cars. The people at the bottom were left out again. Perhaps the focus should be on putting people to work first, and if it is useful work, so much the better. I can’t even begin to imagine how many people we could put to work at a minimum wage for the amount of money that has been spent on bailing out large corporations.

The thing is, we need both. Corporations need credit to make things, and individuals need jobs so that they can buy what the companies make. As Henry Ford figured out, you can’t have one without the other. Perhaps a system that is skewed solely towards those with money and power, and ignores those without, is more aristocracy than meritocracy, and something that should be avoided.

Your Opinion

What do you think? Was Minsky right? Are we focusing too much on bailing out companies and ignoring the little guy? Please post your opinion in the comments.

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This article originally appeared on TriplePundit and is reprinted here thanks to 3P’s Creative Commons Attribution 3.0 license. You can find out more about Creative Commons licensing here.

Melaver is CEO of Melaver, Inc.-a third-generation, family-owned company based in Savannah, Georgia. Through a series of personal anecdotes, Melaver explains, in detail, how a small corner grocery store evolved into a major regional chain, eventually transforming itself into a real estate company focused on sustainable development and management. The fact that this happened was not by accident: all along its seventy-year history, the company chose to pursue a values-based path, even when it meant making difficult choices.

The book tends to falter somewhat as Melaver attempts to weave in technical sustainability teachings alongside his anecdotes. Anyone who has read a good cross section of the available literature on sustainability will find nothing new here: Melaver does not strive to be the next Paul Hawken or WIlliam McDonough. He is not trying to cover new ground or re-invent the wheel. If anything, Melaver attempts to show that the idea of operating sustainably is nothing new, and connects the corporate initiatives of the present with historical practices. Unfortunately, the eloquent writing style that works so well when telling a story about 1950s racial issues does lend itself to explaining the how to use a “Restorative Process Map.” What follows is usually a lengthy philosophical debate about the merits of one guru’s viewpoint over another. This is not all bad, by any means. It merely tends to muddy the waters a bit, and detract from Melaver’s shoot-from-the-hip, no baloney style.

Despite its limitations, Living Above the Store has some really great information. Among my favorites are:

• His in-depth look of how and why a business should take stock of its local ecology and its place within that ecology. Melaver provides both historical and business context for the importance of taking stock, and offers good examples of how to go about it.
• His discussion of the merits and limitations of a Triple Bottom Line approach. “A financial bottom line is quantitative and can be captured as a moment in time. Contrast that with social and environmental metrics, which are partly qualitative in nature and are best measured over a time continuum… Instead of speaking about a bottom line, I would suggest an alternative nomenclature, one about three performance organizers (3-PO): financial performance, environmental impact, and social consequences.” He the goes on to demonstrate what this might look like.
• His example of the company’s use of a Hall-Tonna Survey of Values to track how it’s values have shifted over the years. I’d never heard of this tool before, but it seems very powerful: “It enables a company to determine how it is trending around certain values. It enables a company to determine how it is trending and to evaluate the counter-trends creating inherent tensions. Fundamentally it enables a company to answer a critical question: what is it we collectively care about?”
• The company’s limits to growth chart showing exactly how the company decides which projects to build or reject. A simple, but very effective tool.

Melaver’s overriding themes are that running a truly sustainable business requires a whole-systems approach, and is an ongoing process of change. This is a message that needs to be heard loud and clear at businesses everywhere.
Overall, Living Above the Store is a book that is well worth your time and money and a great addition to your sustainability library.
Have you read it yet? Tell us what you think in the comments.

It’s amazing how cheap. diposable products and waste have crept into even our oldest traditions. It’s insidious. I’m talking about the commencement ceremonies that are happening at every high school, college and university at this time of year. Even my own graduation, a ceremony meant to celebrate the achievement of people dedicated to sustainability and building a world that works for future generations, was rife with single-use items that were never intended to be that way.

I don’t blame the institutions, which, by necessity, are obligated to provide their students and their loved ones with a ceremony befitting of their hard work and investments in time and money. I don’t blame the students, faculty, family and staff who have these expectations either. We certainly should not be in the business of sacrificing the things that mean the most to us in the process of achieving a sustainable world.

It all comes down to a matter of perceived cost. Most of the items currently used are very cheaply made because graduation is seen as a very rare occurrence: why spend a lot of money on something that will only happen once a year for the institution, and only a handful of times for the graduate?

Not to mention the fact that the regalia is not exactly everyday wear. Even a bridesmaid’s dress might be remade into a cocktail dress that might get worn after the big day, but graduation gowns are never seen outside of a graduation ceremony.

So…how do we make graduation more sustainable?

I can see two possible ways to go with this: convince institutions to start buying well-made, durable items that are reused year after year, or convince companies to provide these types of items on a rental basis. The most obvious examples:

- Caps & Gowns: While these wizard robes used to be de rigeur for the academic set (so they could stay warm in their drafty halls of knowledge), they are currently never worn outside commencement ceremonies. The most widely-used models are made of nylon taffeta that will rip if you look at it too closely.

I would suggest that colleges purchase super high quality robes that can be used year after year, much in the same way that schools purchase marching band uniforms. Trust me when I tell you from personal experience that band uniforms can be reused for decades, and rarely get replaced except when they go out of fashion. Graduation attire isn’t going out of style any time soon, and it only gets worn once a year.

Making them out of organic materials is icing on the cake.

- Diploma Folios: If you tried to just hand out diplomas without putting them in something, they probably wouldn’t make it to the cocktail hour without getting folded, spindled or mutilated. Rolling the diploma up with a ribbon might be a nice way to go, but I suspect that it’s a logistical nightmare (It’s pretty easy to open up a folio and check to make sure the name is correct, right before you hand it to someone…hard to do if it’s wrapped up).

I think that most people are going to take the diploma right out of the folder and put it into a frame on their wall. There are two ways to deal with this: make the folio out of sustainable and compostable materials, or make it durable enough to last for years, and give the students a way to send it back to the college to be reused. Including a postage-paid return envelope is a great way to do this.

- Tassels and Hoods: Many people like to keep these items as mementos. The best way to deal with these is to make them out of organic and sustainable materials. If they are also made to be durable, graduates could be given the option to turn them in to be reused.

The biggest hurdle to adoption of durable and reusable graduation attire will be the cost. The cost of investing in high-quality reusables is sure to be much greater than disposables. It would need to be borne by either the school or the graduates. However, The costs will ultimately be much lower if you consider them over time. While no-one wants to make getting an education any more expensive, I would suggest that we are already paying these costs. We are paying for these conveniences with degradation to our environment and with our children’s futures, instead of in dollars and cents.

This is hardly the message that you want to send with a commencement ceremony.

But, what about the benefits? Besides the obvious environmental benefits, which are huge, there are many other benefits to this approach: ; colleges would save time and money by not having to orchestrate, order and ship new attire every year; students will be able to celebrate their achievement in high-quality clothing befitting the moment, instead of something that feels like it was purchased from a dollar store; there may even be a nostalgia factor of wearing a robe that been worn by others before you.

We should, however use these high-profile opportunities to show what can be achieved, with a little effort. Even the current taffeta caps and gowns are reusable for several occasions, and diploma folios would probably last many more times. To that end, I would like to call for a nationwide effort to begin recycling commencement attire.

If you have recently graduated, please consider returning your graduation attire to your college and university. Dont’ forget to send them the diploma folio once you’ve hung up your pride and joy. Be sure to tell them why you are doing it. If you are feeling really motivated, organize a drive amongst your graduating class to collect up these items and return them en masse, making it easier and cheaper for everyone while providing a little extra motivation.

Oh…I almost forgot…congratulations on graduating! What’s your opinion on all of this?