Sustainable Economy

BRIC Was It, Now EMIC Is the Thing

Saturday, July 12, 2014 by

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"Daring for Big Impact" was held at the Greifenstein Castle in Switzerland.

So you've probably heard of the BRIC countries as discussion of the economic growth potential of Brazil, Russia, India and China has been all the rage, especially during the recession. While still critical to world economic growth, those countries are no longer the cutting edge of investment and sustainable opportunity.

Who knows what the EMICS are? How about Ethiopia, Myanmar, Iran and Colombia? I recently was invited to attend a very special conference held at this picturesque Swiss castle nestled among idyllic gardens near the Swiss-Austrian border. "Daring for Big Impact" was a most compelling and unusual confab, featuring a carefully curated group of international experts from industry, finance, government and philanthropy. Organized by Swiss-based global impact investment and strategy firm Impact Economy, the conference looked at several significant but seemingly unrelated topics, all of which are on the cutting edge of business innovation and investing for the 21st century.

"Our challenge going forward is twofold," explained the conference's host, Christian Kruger, who serves as Chairman of Krüger & Co., and owns and maintains Greifenstein Castle in his spare time.

First, to accelerate the pace of progress so we move from pilot to mainstream, and begin achieving demonstrable results on a massive scale. Second, we need to return to holistic thinking and consider what the good life means in the 21st century, and reflect upon what each of us can do individually to ground ourselves and contribute -- so the good life is not just for the privileged few.

 

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The conference, nestled among idyllic gardens near the Swiss-Austrian border, brought together international experts to attend sessions like "The Pursuit of 21st Century Happiness."

While covering topics ranging from how to meet the crushing demand for clothing and apparel throughout the developing world in a safe and sustainable way, to climate change and its ramifications, to the relatively new science of impact investing, the conference attempted to meld these seemingly diverse topics into a central theme: if we can work together productively and strategically, we can overcome the seemingly insurmountable challenges threatening our future. Overpopulation, water scarcity, fracking, electronic waste, rising temperatures and oceans, unstable and totalitarian governments... none of these externalities seemed to deter the enthusiasm for utilizing strategic investment not only for profit but to help deal with these threats to our very existence.

This seeming juxtaposition is perhaps best illustrated by Bangladesh: the apparel industry is growing by leaps and bounds there, accounting for 20 percent of its GDP. But this emerging country is also responsible for one of the worst industrial disasters in modern history, the April 2013 collapse of a large garment factory building in Dhaka, which killed over 1,100 workers. And herein lies the problem, and the opportunity which the fourth annual iteration of "Daring for Big Impact" addressed.

"Beyond catalytic countries that can drive wider progress, there are also countries whose success in modernizing could have wider geostrategic implications," said Dr. Maximilian Martin, co-host of the conference as well as founder and CEO of Impact Economy. I had met Dr. Martin at a previous professional gathering and was taken with his keen insight and ability to analyze and translate the world's sustainability problems into business innovations.

Dr. Martin explained why he believes the EMICs to be where the action will be going forward.

Ethiopia has been the fastest growing economy in Africa with a GDP growth rate of 10.7 percent in the past decade, which made it the 12th fastest growing economy worldwide. Myanmar has undergone important industrial reforms to allow more foreign investment to flow into the country. Iran is the largest economy in the Middle East after Saudi Arabia in terms of GDP (although sanctions make it off limit for investments at the moment). And Colombia's vision to become one of the top three most competitive countries in Latin America by 2030 is supported by an expected GDP growth of 4.5 percent in 2014.

Indeed, the seventh World Urban Forum was recently held in Medellin, best known of course as world headquarters of the infamous drug cartels. However, as proof of Dr. Martin's assessment, the murder rate there has dropped by 80 percent since its peak, and was rated the number one innovative city in the world by none other than the Wall Street Journal.

A critical message imparted by Dr. Martin throughout the conference is the need to integrate sustainable practices into key industries to enable their long-term competitiveness, especially fashion, retail and electronics -- none of which, according to him, are on a sustainable track currently. This is an example of an area that business and investment leaders must work with NGOs and philanthropists to correct. The ramifications of the waste generated by these industries without proper forethought to using recyclable materials and getting those materials back into the recycling/remanufacturing supply chain will be disastrous otherwise. But if reused, they become a business opportunity.

This critical issue was looked into more closely by Carlos Criado-Perez, former CEO of British retailer Safeway and before that operations director for Walmart International. Perez's presentation made much of data points coming from Impact Economy and Ellen MacArthur Foundation research, for example that over $700 billion -- yes with a "b" -- could be saved if just half of what is sold annually by the apparel industry could be recycled for future use after its useful life, instead of ending up in landfill. Not to mention, the production of clothing is extremely water-intensive and Impact Economy estimates that up to 50 percent of the zillions of gallons required could be saved by use of sustainable manufacturing practices.

An interesting twist that separated "Daring for Big Impact" from the dozens of other "future-look" conferences was the inclusion of sessions like "The Pursuit of 21st Century Happiness" which featured Swami Nitya, spiritual guide from the UK, and Han Shan, a "guru" from Thailand, which related opportunities in global change to the personal level.

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A violinist set the evening atmosphere at the conference dinner.

One other aspect of the conference that is close to my heart was remarks by David Gelber, formerly producer for Harry Bradley of 60 Minutes fame but more recently, creator of the important documentary series Years of Living Dangerously, which is airing on Showtime (perhaps they think it offsets the soft-core porn one usually finds there?). This production is one of the best ever made at illustrating the potentially catastrophic effects of climate change. We screened an episode and a very lively discussion followed, although not surprisingly, there is not much disagreement among this group about how critical it is to proactively respond immediately if civilization as we know it is to continue.

Suffice it to say that this conference stood out from the crowd. The firm Impact Economy and Dr. Martin in particular are to be commended for having the vision to show how different topics add up to a comprehensive picture and three days of intensive and provocative thought about where we go from here and how to do it in a way that will benefit all, not just investors.

Read more from Jennifer Schwab on her Inner Green.

The Next Economy

Monday, February 10, 2014 by

Those who follow my blog might have noticed substantial inactivity. Yes, I stopped posting articles, mainly out of despair. So much to say, what first, and how? Even if I wrote every day, we would not cover all the complexities of the self-destructive system that humans have created out of greed.

As the speed of natural devastation picks up and the response to the natural rampage becomes short,  obsolete, and mostly non-systemic many, who strive to keep this precious Earth alive with all its beauties, become speechless. But as a famous quote whose author I do not recall states "there is no time to be a pessimist", we must now, more than ever, reflect on our actions and their consequences. We must now rethink our way forward.

If the way forward is based on understanding our need for biological sustainability, since without biological sustainability there is no other sustainability, I let you ponder on this way forward for the outbursting population of 7 billion. 

Video by Tompkins Conservation, The Next Economy

Words of a long time environmentalist and conservationist, Doug Tompkins who, together with his wife Kris and a large team of people dedicated to preserving our nature, have embarked on a challenging path. They have been able to succeed, so why can't we all?

 

Described as “a tireless advocate of an ecological lifestyle and an absolute defender of nature”, Hana takes any opportunity to engage in sustainable living as a sustainability strategist, citizen as well as a consumer. Her ambitions go beyond motivating others through Hana's green living blog. Professionally her aim is to look at today’s environmental issues in a holistic way, through a systemic lens and to strive for long-term improvements rather than short-term fixes. She established Earth Matters, a collaborative consultancy to help others advance on issues of sustainability. Tweet @earthmatters2me

 

 

Transforming the Financial System: Perspectives and Ideas

Monday, December 16, 2013 by

By Don Shaffer, RSF Social Finance

When you are looking for the new or emergent, you usually have to look off-the-grid. In many ways as RSF Social Finance has grown, we too have had to go off-the-grid to develop our unique approach to finance.

In 1984, a school burned down in New Hampshire. RSF organized a group of investors to rebuild it. Since then, we have made over $275 million in direct loans to social enterprises. Our track record has been excellent, with just 2 percent in cumulative loan losses over 29 years, and a 100 percent repayment rate to investors.

The key: bringing investors and borrowers closer together. We have found that if the individual investors who are providing capital and the social entrepreneurs who are borrowing capital can be more visible to each other – if they can understand each others’ needs and intentions, and sustain a personal connection whenever possible – then risk decreases and fulfillment increases.

Participants in a transaction become participants in a relationship. We believe this is nothing less than the antidote to modern finance, and can be applied on a substantial scale. It is the opposite of high frequency trading.

Specifically, four years ago RSF adopted a new approach to loan pricing for our $100 million flagship senior-debt fund. Each quarter, we convene representatives from our staff, our investors, and our borrowers to decide what annualized return rate investors will receive the following quarter, and what interest rate borrowers will pay – a radical form of transparency.

We call it community-based pricing. The response from participants has been overwhelmingly positive – and our interest rate, referred to as RSF Prime, has been very stable. We are now off-the-grid of the global financial interest rate system and no longer directly affected by the vagaries of Wall Street.

But of course the vast majority of all 401(k) programs, pension funds, and endowments are tethered to Wall Street, so it is naïve to believe we are fully off-the-grid.

This circumstance leads to questions many of us in the social finance field think about:

•  What is it going to take for the number of socially and environmentally-focused investors to grow substantially?

•  Can it happen fast enough for those of us who acknowledge the urgency of climate change and natural resource depletion?

•  Are there enough sound investment opportunities for investors who want to go off-the-grid?

•  How will we address the perennial issues of risk, return, and liquidity when there are so few established intermediaries in which to place funds?

•  What are the long-term implications for those of us who anticipate needing funds for retirement and who want to embrace off-the-grid investing?

A Generational Voice

I believe the very definition of wealth will change in my lifetime (I’m 44), where measures like GDP evolve to measures of well-being. These indicators will put spiritual, community, and ecological health at the center of the human experience and pull us toward an economy and supporting financial system that are direct, transparent, and personal, based on long-term relationships.

This article continues on Green Money Journal.

Unique Investment Options: Parnassus Workplace and Asia Funds

Saturday, December 7, 2013 by

A good place to work makes for a good investment – that’s the basic premise of the Parnassus Workplace Fund. In other words, a company that treats its employees well should be successful as a business. Since its inception over eight years ago (on April 29, 2005), the Parnassus Workplace Fund has demonstrated the truth of this premise.

The idea for the Parnassus Workplace Fund was first presented to me by Milton Moskowitz, co-author of the annual Fortune magazine survey of The 100 Best Companies to Work For in America. Russell Associates, the analytics group and creator of the Russell 2000 Index and other benchmarks, had contacted Moskowitz and told him that they had done a study of the publicly-traded companies in the annual Fortune list, and found that the stock-market performance of those companies had been excellent, handily beating the S&P 500 over long periods of time.

Moskowitz called me with the news and urged me to start a mutual fund that invested in companies with good workplaces. I was hesitant at first, because studies are not the same as investing with real money, and the results can be very different. However, the idea struck a chord in me because I’d always felt that a company with a happy workforce made for a good investment, but until then I had no way of proving it. Despite my initial hesitation, I decided to go ahead and start the Parnassus Workplace Fund with Milton Moskowitz as a consultant to the Fund. The Fund has been successful, and as of June 30, 2013, it has over $350 million in assets.

We use two sets of criteria in making investment decisions: financial and workplace. Assessing the financial criteria involves doing fundamental analysis to find companies with high returns, good products and services, sustainable competitive advantages and solid balance sheets. Once we have done the financial analysis, we make an estimate of the value of the company. Usually, we will only buy a stock if it is selling for no more than two-thirds of its intrinsic value. This gives us an important margin of safety.

While the financial analysis is quantitative, the workplace assessment is qualitative. We think it is important to visit companies and talk with management to find out if a company has a good workplace. While almost all companies will say they have a good workplace, the ones that impress us the most are ones that can give specific examples and articulate policies that make them good places to work. Important characteristics include: some meaningful form of profit-sharing or stock-ownership; good health-care and retirement benefits; support for working mothers; an emphasis on training and personal development; job flexibility; and recognition for accomplishments. We like companies that respect their employees, genuinely care about them and don’t just treat them as hired hands.

I think that picking companies with good workplaces is one of the keys to the Fund’s success. Some of the extra return we get is because of our financial analysis and using a value approach to investing, but a lot of our edge comes from choosing companies that are great places to work. If people are happy at work, they will be more productive, and this means better results from the same number of people. It also means that that there will be lower turnover, and this results in less money spent on recruiting and training new people. More importantly, workers at this kind of firm will help to save money for their employer and also find ways to develop more business for the company. It’s impressive what can happen when happy workers are allowed to be creative and come up with ways to build a better business.

The Fund is careful about taking risks, making sure that there is the potential for more upside gain than downside risk. The market has really taken off so far in 2013, so we have to be careful to avoid stocks that may be over-valued. Right now, the economy is improving, so there should be more upside, but there’s no doubt that some valuations have gotten ahead of themselves, so it’s important to look at both potential risk and potential return.

Parnassus Asia Fund

On April 30, 2013, Parnassus started its first new fund in eight years: the Parnassus Asia Fund. This is our first venture into international investing. Asia is a very dynamic and creative place. It contains the world’s fastest-growing middle class, and it is the scene of much technological innovation. Asia is also a region with a lot of entrepreneurship, and it is developing deep financial markets. Given that the region is growing at a fast pace, and we expect that growth to continue, it makes sense to invest in Asia ahead of future positive developments and despite all of the complications in doing so.

Continue reading this article on Green Money Journal.

Ethical Economist Hazel Henderson Interview

Tuesday, November 19, 2013 by

I spoke with Dr. Hazel Henderson, a true icon and visionary in the world of corporate responsibility and ethical economies. Dr. Henderson is a world-renowned futurist, evolutionary economist, a worldwide syndicated columnist, as well as a consultant on sustainable development, and author of 10 books including the award-winning Ethical Markets: Growing the Green Economy. Also she was one of the co-editors of The UN: Policy and Financing Alternatives. Hazel is the founder and editor-in-chief of Ethical Markets Media (USA and Brazil) and the creator and co-executive producer of its TV series. Her editorials appear in 27 languages and in 200 newspapers around the world, and she has received many honorary doctorates and awards.

Hazel has recently released a publication entitled “Mapping the Global Transition to the Solar Age: From Economism to Earth Systems Science” from the UK’s Institute of Chartered Accountants of England and Wales (ICAEW) and Tomorrow’s Company. It will appear soon in the US from Cosimo Publications, NY.

I am in full agreement with Wisdom Network's Pamela Davis who stated “Hazel Henderson has her finger on the pulse of the economic transformation that can and must happen if we are to move forward together in prosperity in the 21st century. Her down-to-earth solutions are at once brilliant and simple enough for all of us to understand and implement.”

From the first time Hazel and I met many years ago, I have counted her as a friend. She has been a mentor to me and a consistent supporter in the growth of GreenMoney over the last 20 years. I am pleased to share this extensive interview with the still very active Dr. Henderson who recently celebrated her 80th birthday. 

CLIFF:  Will you share some of the highlights from your career with us. How are things in the business world different than you thought they would be by 2013? Are we on the way to creating a responsible economy that is not dependent on exponential growth and that works for more people?

HAZEL:   First of all, Cliff, I want to remind us all that 80 is the new 60! My physician tells me that my biological age is 60 – so I’m going with this! I work out and swim every day, eat mostly raw vegetables and fruits, local and organic from our farmers market here in St. Augustine, where I’m standing (in the accompanying photo) by our Champion Tree donated to our Ethical Markets Library during our Spring retreat in May 2013 by Terry Mock, co-founder of the Champion Tree Project International and the Sustainable Land Development Initiative. 

As to highlights, I would say my most intensive learning experience was serving in Washington, DC as a science policy wonk from 1974 until 1980 on the Technology Assessment Advisory Council for the US Congress Office of Technology Assessment (OTA), on the National Science Foundation’s RANN Committee (Research Applied to National Needs) and on the National Academy of Engineering’s Committee on Public Engineering Policy (COPEP). It was an all-male world, and I recall being asked by my fellow advisors to OTA at the first meeting in Room 100 under the dome of the Capitol if I would please go and get coffee for us! Yet, the intellectual challenge was exhilarating. I remember riding the private train under the Capitol with many members of Congress and Senators who served on Science and Technology committees; testifying before the Joint Economic Committee on the need to set up what became the Congressional Budget Office (CBO). Back then, Office of Management and Budget (OMB) would bring the President’s budget over in a truck and dump these documents at Congress, where we had no staff assigned to digest the budget and offer our own review of its priorities! Today, CBO has become almost too powerful an arbiter – scoring all legislative proposals as well as those of the President.

I then wrote my second book, The Politics of the Solar Age, published by Doubleday in 1981, downloading all I had learned about the contesting special interests, lobbying and forces shaping our national policies on energy, transportation, agriculture, trade, taxation, military and foreign policy. I saw the fight begin as the fossil fuel and nuclear power sectors pushed to preserve their subsidies, how US auto companies had also colonized congressional committees with perks, campaign donations and populated scientific panels with their intellectual mercenaries. I realized how hard it would be for the “Solar Age” economy I envisioned to emerge. Indeed, as we now know, renewable energy companies still face an uphill battle with fossil fuels and their annual global subsidies of over $500 billion, the coddling of the inherently unsustainable nuclear industry, protection of favored agribusiness, etc. I remember at one of our OTA meetings in the late 1970s, James Fletcher, who became head of NASA told us that if similar subsidies had been given to solar, wind, energy efficiency, geothermal and other technologies, we in the USA would have already been powered 100% by renewables! This set me on my future path.

A recent highlight was receiving the blessings of Verena Schumacher, widow of my late friend and mentor E. F. Schumacher, to name our over 6000-volume Henderson-Kay-Schumacher Library. This helps keep Schumacher’s flag flying in the USA. He wrote the Foreword to my first book, Creating Alternative Futures (1978), and I still teach occasionally at UK-based Schumacher College.

Click here to continue reading this interview on Green Money Journal.

 

Hazel Henderson on the design revolution from Katie Teague on Vimeo.

Pink Bank Accounts

Tuesday, August 13, 2013 by

rural bank for womenA pink bank account could be a tipping factor in reducing gender equality in developing countries. It is also one of the most fascinating potentially-emerging trends for women’s rights that I’ve seen in a long time.

The whole topic started with my resistance to go to Western Union and transfer cash to some ladies who were helping me on a research project in Ecuador (where our cacao is farmed and ground). As a third generation social entrepreneur, you don’t need to tell me how questionable ‘holding accounts’ are, regardless of the institution, and I have experienced first-hand the exploitation of my gender in developing countries, so the chances that my dear helpers can even access 100% of the cash I send is unlikely, without a bribe, a note, a kiss, a whatever.

A bank account is difficult to set up sometimes, especially if you’re from a rural area, inconsistent with finances and don’t have a clear local ‘backer’. I watched many times, the large lines in Guayaquil of agri-financing at a local government institution and the ‘uncles’ that would accompany some of the ladies who came in from the mountains to pick up their cash, only able to get the cash if someone ‘credible’ came with them.

I recently read a paper that made my heart click. And I thought, albeit it totally cliché, of pink bank cards. E-Cash payments can actually help bring girls out of poverty, and back-influence core gender inequality topics of schooling, disease prevention and reproductive health programs. The idea, is to target adolescent girls (because they are in the time / place to best learn and use new ways going forward).

The terms is called ‘financially-inclusive e-payments’, and it is a double-header, meaning to improve an adolescent girls’ access to financial services and to teach her about asset-building opportunities.

Adolescence is the time of exploration and learning, the prime opportunity to not only help a girl get work but know how to access her cash and what to do with it. I realise that the problem of over overall poverty, and even equal access to working opportunities is already highly unbalanced.

The UN has a massive program targeting this,  The United Nations Millennium Development Goal 3, to “Promote Gender Equality and Empower Women,” as well as Gates Foundation, Clinton Foundation etc.

My personal approach in social entrepreneurship is to contribute small, do-able, meaningful actions that are closely related to something I can understand. It is not my skill-set, nor ability to affect HIV, but this idea of helping girls understand the fundaments of finance, is a very small but meaningful idea we could get behind.

Girl-centered asset-building strategies is what it’s called.

Over the past decades, we have seen e-payments for savings but there is still the big gap for specific invest, grow and leverage elements. Micro-credit has been a huge contribution in this area, but there is another level that can be achieved.

Overall, the idea is that it could provide adolescent girls with access to formal financial systems, help them get their formal identity and rights, help funds that support major girl-focused programs to achieve a better return on investment (and see where their schemes go), and of course, let’s not forget the banks, it helps them expand their customer base. I know, the last one sounds totally banal, but if there is one thing I have learned about ‘sustainability’, it is that every idea and program must be, end-to-end, a win-win for everyone in the chain. If that means a bank. Then so well be it. Another benefit is that social protection payments can go directly where it needs to be, and not filtered through a third (or seventh) party. This means that actions of great needs, like education and health can actually produce better results as the cash will be used with skill, and also directly sent where it is needed.

What about the other things you find stuffed into modern chocolate – sugar, milk and other animal fats (go on, check the ingredients list on the backside of your nearest chocolate). Remember the details of what you read on the packet guidelines of your favourite chocolate? This is where it starts to become relevant.

The multiplier effect is the core of any effect, from tipping point to purple cow.

The ideas range from in-school banking (via e-payments) to using the information of the bank account to target adolescent girls to be and feel independent, show to savings habits can be developed and what personal and community investment can mean. In over a dozen countries across the world, more than 50 percent of girls—and in some nations as much as 87 percent—do not complete primary school.

Globally, approximately one-quarter of girls in developing countries are not in school at all. In Ecuador, thankfully that rate is higher, so we DO have a chance to access them in a systemised way.

Adolescent girls are the most vulnerable population on the planet. Between the ages of 10-19, there are over 580 million girls. At least 90 million of these beloveds are in low-income countries where the income is less than USD 1,005 per year per person.

They can either join the economy, or go to the kitchen or the fields.

Over 100 million girls aged 5-17 are involved in child labor, with the most of them doing dangerous work. Studies show they also do a lot of ‘informal work’ where girls are particularly isolated and vulnerable. The sooner they can be counted, and use methods to ensure that the benefits they work for come directly to them, the better they can influence other major topics such as health improvement.

Teenage girls are not only the answer to social improvement, but the World Bank has a study indicating that they are also the key to economic growth and stability. My family are all social entrepreneurs, and hardly did charity.

The difference, between charity and helping someone help themselves, in my mother’s words is dignity; in the end, it is empowerment. 

Adolescent girls are apparently the biggest contributing factor that can influence intergenerational poverty than programs targeting children generally. 

“Measuring the Economic Effects of Investing in Girls: The Girl Effect Dividend,” the World Bank’s Jad Chaaban and Wendy Cunningham wrote that if young women in Brazil were employed at the same levels as men, the annual national GDP would rise USD 23 billion. In lifetime income by that logic, they calculate that India would add almost USD 400 billion to its GDP.

Big steps, big goals, but something that is a little smaller and helped by technology could be e-payments targeting teenagers.

Making pink bank accounts and teaching fun finance school.. I am going to try this. Usually when I travel, I hold events about nutrition, and often reach out to areas of a society who are not well informed about processed food vs fresh food. I am often in areas of not desperate poverty, but where industrialisation spread it’s toxicity and supplies cheap candy and processed foods, and I teach about making chocolate fun and healthy. There is a chance in this, to slip in a few finance lessons.  That is a very do-able idea. Which can start now.  And will. On my next event.

For perspective, I looked around for some models, and in the developed world found that the Girl Scouts movement has a program for girl-focused finance development. Check it out here: http://bit.ly/girlscoutaccount

The barriers that exist for AGYW to access cash (what the academics call adolescent girls and young women) range from regulatory to physical, to cultural:

 

The Adolescent Girls Initiative at the World Bank

Launched on October 10, 2008, as part of the World Bank Group’s Gender Action Plan, the Adolescent Girls Initiative (AGI) aims to help adolescent girls and young women make a successful transition from school to work.

The program is being piloted in 8 low-income countries–including some of the toughest environments for girls. Each program is tailored to the country context, with a common goal of discovering what works best in programming to help adolescent girls and young women succeed in the labor market. Each pilot includes a rigorous impact evaluation. With new knowledge of what works, successful approaches can be replicated and brought to scale. http://www.worldbank.org/en/topic/gender

 

 

The Causes and Conditions for Innovation

Wednesday, June 26, 2013 by

What Truly (And Honestly) Motivates Businesses and Their Leaders to Innovate.
In our currently fast-paced, digital age of economy virtually every business leader acknowledges the need for their company to innovate in order to stay ahead of the game. According to a recent New York Times article, innovation is “the crucial ingredient in all economic progress—higher growth for nations, more competitive products for companies, and more prosperous careers for individuals.” Because technology is now intertwined with nearly every aspect of business and developments, innovation is fast becoming a primary driver of market differentiation, business growth, and profitability.

Yet, despite the glaring need to do so, the hard realities we as business owners and leaders actually experience in our every day course of business somehow continuously limit our drive for innovation down to only a very few number of situations.  In fact in most cases there are very specific conditions, most of them not entirely positive, that we as leaders and business owners will have to encounter in order to truly drive us to innovate and initiate these kinds of changes in our current business. Let’s take a look at what some of these are.

Condition #1. The Sinking Ship.
Unfortunately, it is a sad reality for a large number of established businesses that who have for years enjoyed continuity in their business often become too comfortable in their current mode of doing business and state of affairs.  It is always that ease found when the ship has been sailing a steady and due course under fair weather conditions, not to mention the pride of success that we enjoy from continuous business, which affords a certain sense of stagnation in a companies’ efforts to further develop their services, products, and general operations and rethink the way it does business.  Just in these moments when we stop paying attention to competitors, ignore what the market is doing and refuse to consider new developments in technology when essential disruptions and quick yet dramatic market changes occur without our noticing.  Our forgotten mindset toward innovation is exactly the conditions which allow for our company to ignore changes, opportunities and developments in the industry and fail to reconsider new customer needs.

This creates the perfect opportunity for new and developing competitors to come in and disrupt things and suddenly the game has already changed completely without our proper consideration and without further adjustment of our own business.  Suddenly, our business is sinking, without even having noticed the change in your marketplace, product or industry.  

At this last resort, we as the leader struggle to grab the wheel and plug the deep hole that is bringing our ship down in our very last hour with the hopes of bringing back the company’s competitive edge and value (Ex: Think when Netflix took over Blockbuster).  Of course, under these kinds of negative conditions innovation becomes a “do or die” situation and we are innovating out of a mindset of existentialism only.  This doesn’t exactly give us the most positive environment and space to innovate, but for some change in the very last hour can be the only cause that truly drives real and lasting change and forces innovation on a deeper level.

Condition #2. Fire In the Hole.
In Condition 2, we as the business leader, experience a wonderful growth of increasing sales and activity in our business. Yet, it is often at the point where solid growth occurs that we suffer instant growing pains to accompany our newfound abundance.  Quality control, customer service, business processes suddenly breakdown, and under these conditions we desperately search for ways to hang on to profit margins, maintain our reputation, and hold up to quality during this critical period of growth.  Essentially, our house is burning from the inside out, and suddenly the systems and models which so successfully brought us to our present point are now the causes for breaking us down again. At this point we again become reactive to the forces that demand our attention to innovate purely as a means of avoiding our extreme discomforts, imminent fears of demise and pains of operation.

Condition #3. The Golden Goose: Why Not Innovate? Just Too Darn Busy Counting Stacks.
Is There Ever Time For Innovation? Absolutely!
There are of course times where we have worked so hard to come to some level of successful operation in our business - customers are there, sales are going great, operations running steady -  but we are nonetheless faced with the nagging dilemma, “Can we really afford to take precious time away from our immediate and critical business activities to ensure we are innovating and developing our business? Is it really worth sacrificing time from our day-to-day business to think beyond where we are?  Do these activities really ensure for a steady future?” It is under these conditions where we as a leader have the golden opportunity of positive conditions, a current thriving business, where we are in the best possible situation to be able to start to understand and realize the benefit of managed and strategic innovation.  It is here when we are truly willing to afford the proper time, space and energy to develop our business and make changes for the better.  When we empower ourselves with the proper insight to look beyond our current way of business, we can in these moments take a look at challenging those existing methods, strategies and explore possibilities that allow for controlled improvements and break-though developments.

The real and essential difference here is in the mindset we hold towards our business and towards innovation.  When we have the surplus of positive business conditions then we naturally hold a positive mindset towards innovation.  In order to experience the kind of lasting and sustainable results that come from effective innovation we must have the space to think strategically in the way we innovate and the strength to hold to a path that manages the workings of innovation in a way that becomes a part of what we do in our everyday business. Truly effective innovation requires the willingness to look beyond what is already working and the strength and diligence to continue to create a better, more unique business no matter how comfortable or uncomfortable the current operations and situation may be.

 

Laura Pretsch is a business advisor, innovator, entrepreneur and lifestyle aficionado. Laura has dedicated her life to developing the tools and understanding to help others innovate and create better lives. Laura is the Co-Founder ‘The Brilliant Leadership Company’.

 

  

 

Hurricanes: Bad for Business. LOHAS Conference: Good for Business!

Tuesday, June 11, 2013 by

June 1 was the official start of hurricane season. It’s also the start of the “rainy season” here in Florida. Tropical Storm Andrea has already visited, dumping over 3 inches of rain in a couple of hours. We seem to be off to a fast start.

Causes for Concern 

According to the National Oceanic and Atmospheric Association (NOAA), 2013 is expected to be an "active or extremely active" hurricane season.

At the same time, the Earth just crossed the threshold to 400 parts per million of carbon dioxide (CO2) in the atmosphere. For those of you who don't follow climate issues, that's not good. According to the New York Times, that's the highest level in 3 million years. This level of CO2 warms the planet and provides the fuel for ever stronger hurricanes. It is no coincidence that 8 of the top 10 costliest hurricanes in U.S. history have occurred just since 2004.

For a wide-ranging view of the costs of climate change, read this study from the National Journal. It covers the many ways that climate change costs money right now.

As a Floridian, I have begun the usual preparations for hurricane season: stocking up on drinking water, non-perishable foods, batteries, First Aid kit, etc.

But as a small business person, I know that my green business is at risk from extreme weather. If the electricity goes out, so does my equipment – phones, laptop, printer. My connection to customers is lost, and my work for them is delayed.

That would make me an unreliable service provider – something I promise customers that I’ll never be.  My customers (bless them!) don’t care that the U.S. electric grid is fragile. They just want their stuff.

If the pond behind my house floods, then my home office may become a large puddle. It hasn’t happened in the 12 years we’ve been here – but it could. If I lose both power and my work location, a whole new set of costs and problems ensues. And I will lose time and money as I scramble to recover.

If the worst happens, e.g. Tampa gets hit squarely by a big hurricane, then there’s the possibility that my home and business get blown away. Which U.S. city is considered most overdue for a hurricane this year? According to NOAA, it’s Tampa. And yes, I do take that seriously.

Extreme weather means business disruption

Property damage, work delays, even death. We just saw a text book case of this with Hurricane Sandy last year. No business is immune. From the farmers who watch their drought-stricken crops wither in the field to the property insurers who have to pay out claim after claim (and sometimes don’t), no one benefits from extreme weather.

So why don’t businesses step forward and say – loudly and clearly - to their representatives, their customers and their suppliers: “Climate change is a big deal. We know it threatens our livelihoods as business people, and we know it’s a threat to you, our customers. Here’s what we plan to do about it, and here’s what you, our customers, can do to help.”

On the one hand, it’s a naïve question. On the other, it’s a simple, straight-forward one. Either way, it requires an answer.

I wonder at the continued folly of many big corporations around climate change. According to Ernest Moniz, formerly of MIT and newly-confirmed Secretary of the Energy Department: "We will need not only technology innovation and policy innovation to achieve a low-carbon future — but also business model innovation."

That’s a diplomatic way of saying, “The old “grow-at-all-costs, put-profits-first” model will be the death of us. We need a different approach.” The chances of that happening voluntarily – especially in the hide-bound energy sector - are slim.

And the energy industry is not alone. Professor Michael Toffel of Harvard Business School writes, "Corporate Sustainability is Not Sustainable." In short, he describes how the actions of even the best intentioned corporations to date are not up to the scale of the problem.

So, what to do?

One postitive step - go to the LOHAS conference next week!

And also:

  • Get educated about climate change and share what you know. You don't have to be a scientist to understand the basics of what is happening. One source of information I rely on is Climate Progress.
  • Lower your carbon foot print. LOHAS is a great source of information, but so are sites like Practically Green and Green America.
  • Vote with your dollars. Switch to greener products and services. Check out Vine.com - Amazon's market place for greener and more sustainable items. And explore the LOHAS Hub. Truly green businesses that transact with other green businesses move the economy in the direction it needs to go.

Is this a shameless plug for the LOHAS conference? Yes. (And no, Ted Ning didn’t put me up to this.) But attend, connect, and find at least one new way to support a more sustainable economy. That’s the value of the LOHAS conference: learn, do, and – oh yes! – enjoy!

 

Alison Lueders is the Founder and Principal oGreat Green Editing. She provides writing and editing services to green businesses and social enterprises that value high-quality content. She is a graduate of Harvard College and received her MBA from MIT. She earned her Bronze seal from Green America in April 2013 and Platinum-level recognition from the Green Business Bureau in 2012. 

An Expert's Advice on Buying and Supporting Local Business

Tuesday, June 11, 2013 by

 

Believe it or not, there are as many answers to the question - what is a local business? - as there are “buy local” advocacy groups in the country. In my state of Colorado alone there are at least four definitions - depending on who you ask.

So to try and get a better understanding of how ONE Colorado small business advocate defines local business and what it meant to support local business – I had a Q&A session with Richard Fleming, Board President of the Boulder Independent Business Alliace (BIBA).

Q. What is Biba's definition of a local business?

A: Well, first, BIBA's definition of a local business was created to standardize how to treat businesses that apply to be members. Our [Biba’s] guidelines can be found on our website, and include the following four criteria:

  1. Private ownership
  2. Owned in majority by area (within 60-mile radius) resident(s)
  3. Full decision-making function for the business lies with its owner(s)
  4. No more than 6 outlets; bases of operation lie within a single state

There are specific reasons for some of these standards, like receiving marketing assets or aid from a corporate office. I think we can agree that a small business isn’t on equal footing with a large business when that large business can reach out to a corporate office for regional support.  For example, Boulder County Supplies isn't going to be able to compete with a company like Office Depot or Staples. The same goes for McGuckin and Home Depot or Lowe's - they simply don't have the infrastructure to out-market companies that large.

Limiting to 6 outlets was primarily a way to better define our value proposition, and let businesses know when they've grown too large to benefit from our services.  We can make select exceptions, following Board approval, but the guideline helps to quickly deduce eligibility for most prospective members.


Q. What does it mean to support local businesses?

A: Support them. I mean support in a financial way.  Spend money.  People may not realize it, but spending money is one of the absolute best things you can do for a hurting economy.  Further, I'd ask that people talk about, involve themselves with, and recommend small businesses to their friends and family.  Engagement marketing, where you involve your social networks, is hugely beneficial to small businesses.  And it costs nothing, but saves independent businesses tons.


Q. What if you traveled outside Boulder County, to Ft. Collins, for example, should you buy a Boulder product you know is from Boulder, or a similar product made in Ft. Collins?

A: There are two main components to this question: 1) distribution and 2) manufacturing. Given the scope of the question, I'll only refer to distribution for now. The idea is to buy from where you live.  If you're travelling, please visit a local business instead of a chain store.  The majority of the time, your experience will actually be more pleasant, and they have a stronger, more direct focus on enhancing their own community through charity and the multiplier effect.  The multiplier effect is when money gets recirculated in a community because it isn't being transferred to a corporate office.  So, if you spend a dollar at Starbucks, all but about 14 cents goes to their corporate office to be spent on things that benefit their state (more likely their shareholders), not our community.  Those 14 cents are usually just payroll for their Colorado employees.  If you spend that same dollar at a local shop, like Caffè Sole, about 68 cents remains here.  That means there are more instances of sales tax being generated, which directly go to the things we love about our town - like parks and city services.


Manufacturing is actually a much more complex issue.  We are working on that. It's already started with food.  Boulder has a lot of farm-to-plate efforts because people recognize the benefit of eating locally sourced produce.  The best way to stimulate an economy is through manufacturing.  Boulder isn't really primed for that, but that's largely because we haven't completely solved the infrastructure issues.  We're trying to approach manufacturing from a progressive standpoint, but are still conforming to the old ways of doing things.  As the presence of B-corporations increase, we will see more instances of innovative, low-profile manufacturing that has much less of an impact on the environment.


Q. What if someone from Ft. Collins came to Boulder - would you want them to buy a local Boulder product, or a similar product they know was made in Ft. Collins?

A: This kind of bleeds into the manufacturing bit, so I'll just offer that I think you should support any local business.  It isn't about splitting the hairs between geography that close.  It's about the difference in community investment strategies. There's a mountain of difference between businesses that answer to stakeholders and those that answer to the self-interest of the community within which they reside.

 

If nothing else, I hope Richard's explanation of how BIBA works helps clarify the basic concept and importance of supporting and buying local. For a little more insight check out the YouTube video and share with us your feedback: How do you define a local businesses? Do you support your local businesses, and how? If don’t or can’t,  why not?

 

Sustainable Business Profile: Burgerville

Friday, April 26, 2013 by

burgervilleInterested in reading a great case study on a triple bottom-line company? Read my company's blog on Burgerville, where we profile a company that is doing it right.  Their focus on people,  profit and planet has led to the creation of a full-time Chief Cultural Officer.  

Here's the article we posted recently on my website.

I've never been a fan of the fast food restaurant, but after abandoning being a vegetarian in my mid-20's, I just couldn't resist my childhood favorite: an old fashioned hamburger. Today, I find myself regularly buying those gourmet hamburgers from Whole Foods and throwing them on the BBQ for a fast dinner.  But instead of putting them on a bun, I tend to serve them on a bed of wild greens, mache or arugula lettuce. Yum.

On my company's website blog this week, we covered a profile about another restaurant that you've probably never hear of called Burgerville.  It certainly doesn’t have the name recognition or ubiquity of McDonald’s, Burger King, or any other well known fast food joint. But it has something that all the recognition and ubiquity in the world can’t give it: sustainability.

Burgerville got its start  in 1961 in Vancouver, Washington and has since spread to  39 restaurants in the Washington and Oregon area. Their objective isn’t just to expand –  they want to make the world a better place by selling burgers.

They use a number of green practices to do this:

1)      Source food locally. Nearly all of their ingredients are grown nearby and have that local flavor—like Walla Walla onions and Yukon Gold potatoes.

2)      Use seasonal offerings. Depending on the time of year,Burgerville mixes up their menu with seasonal offerings like strawberry milkshakes (from local strawberries) or hazelnut ice cream (from locally grown hazelnuts).

3)      Use alternative energy. In what can only be called a coup against conventional energy thinking, all Burgerville restaurants and their headquarters are completely powered by wind energy. They even let bicyclists use their drive-thru windows.

4)      Support sustainable farming. In 2004 Burgerville made the choice to only use range-fed beef raised without antibiotics.

5)      Support sustainable waste practices. In 2007 Burgerville made another green choice by implementing a composting program at all of their restaurants.

6)      Embrace green menu options. Burgerville makes great hamburgers, but they also have a lot of food offerings that focus on more earth-friendly options. Chicken burgers, fresh fish offerings,  veggie burgers, salads, and even sweet potato and asparagus are all menu items that offer alternative to the traditional beef-heavy fast food menus.

As a result of their conscientious practices, Burgerville continues to grow and expand, and is an asset to every community that has a restaurant.

Henry Ford said, “A business that makes nothing but money is a poor business.” Burgerville isn’t just making money: they are making jobs, strengthening local economies, creating new business models, and keeping the future intact. With a simple company policy of “fresh, local, sustainable” they are making the world a better place, one burger at a time.

For more info on the business case for having a sustainable business read this page of their website: http://www.burgerville.com/sustainable-business/the-business-case/

 

 

 

LOHAS: You Had Me at Hello

Monday, April 22, 2013 by

This is my first blog post for LOHAS and I’m happy to be here. I’ve been reading LOHAS newsletters for over a year now. I nodded in agreement so often that I jumped at the chance to join the conversation.

A focus on green business

While LOHAS covers many topics, my posts will focus mostly on green business. I am an MBA and spent many years in corporate America before leaving to start my own green business in 2011.

I believe that business can and should play a key role in the transition to a greener economy. Traditional big businesses have enormous financial and people resources at their disposal.  When they decide to move in a particular direction, they can do so with an impact that a small business can’t match.

Unfortunately, in my experience, big business's singular focus on quarterly profits conflicts with the vision, courage and patience necessary to reinvent themselves as truly sustainable enterprises.

So while I celebrate all businesses that move in a greener direction, I see smaller (and privately owned) businesses as leading the way for now. They have a nimbleness and a willingness to embrace change that larger businesses often lack. I suspect that until government mandates the changes necessary to move sustainable practices from optional to mandatory, certain business players will remain in the old, unsustainable model. In the meantime the rest of us need to charge ahead.

The sustainable business view from here

I also want to share the view from my current home in Tampa, Florida. Despite its moniker as the “Sunshine State,” Florida lags on policies ranging from renewable power standards to mass transit. One reason I read LOHAS is to keep up with developments in places like California and Colorado that are – ahem – ahead of Florida in this regard.

We have astonishingly beautiful natural resources in Florida. (That's a roseate spoonbill in the picture above.) From the Everglades to the Gulf beaches, there is “natural capital” here that needs to be protected. Not just because it’s pretty – although you’d think a state whose largest industry is tourism would understand its value. But because when the natural environment is healthy, so are the people – physically and economically.

Here are 3 challenges I’ve encountered as a green business owner. Which ones resonate with you?

Lack of awareness – when I say “green”, many people think I am referring to the color, or that I am describing myself as a newbie. (I’m not.) The topic of greener business is generally not on people’s radar here.

The schools educate kids about sustainability issues better than the mainstream media does for adults. Case in point: I asked a local publisher several years ago why his Florida business-focused magazine did not have a regular feature on green business. He replied that his readers (of whom I am one) weren’t interested in that. I find that stories about green business, green jobs and green learning programs are generally under-reported.

Fragmentation of effort – there is tremendous fragmentation and lack of coordination across green businesses, nonprofits and government agencies when it comes to efforts to go green. When I go to EcoFests, green business networking events and climate change conferences,  I am struck at how many well-intentioned people are struggling to do basically the same things. Imagine if all this effort and resource were consolidated and coordinated in an organized fashion. The whole impact could be greater than the sum of the parts.

Under-funding – too many businesses still see sustainable business practices as optional or a PR move. It’s long past time to invest in something more than recycling bins. To me, green business is a money-making venture for everyone.  Did you know that green jobs are the fastest growing sector in the economy?

The Good News

There is a lot going on under the radar. Last week I attended the 5th Annual Sustainable Business Awards at the University of Tampa. 13 winners collected awards and applause for their “triple bottom line” approach to business. Their businesses ranged from LED lighting to community-supported agricultural farms to recycled air filters. With one or two exceptions, you probably wouldn’t recognize any of their names. But these are the business that will shape the future.

Opportunities in green business are limitless. As a business person, I see the need to reinvent our economy in a more sustainable fashion not just as a daunting challenge, but as a huge opportunity.  To make a good living while helping to save the planet  - what’s not to love?

What do YOU want to hear about?

So that’s LOHAS blog post #1 for me. Let me know your thoughts and tell me what you’d like to hear about in future posts.

About the Author

Alison Lueders is the Founder and Principal oGreat Green Editing. She provides writing and editing services to green businesses and social enterprises that value high-quality content. She ensures that their content and communications – their business face to the world – are correct, clear and compelling. She is a graduate of Harvard College and received her MBA from MIT. She earned her Bronze seal from Green America in April 2013 and Platinum-level recognition from the Green Business Bureau in 2012.

She can be reached at info@greatgreenediting.com and at 813-968-1292.

Why Do I Need a Brand? My Customers Already Know Me!

Tuesday, April 16, 2013 by

Many small business owners ask this same question, whether they are a plumber, lawyer or landscape architect, they want to know why they need a brand. To them, it seems like a waste of time and money. They are too busy finding customers to focus on building a brand!

In this increasingly crowded business world, it is very difficult to stand out from other companies. Access to the internet coupled with next day shipping has removed most distribution barriers and many products have become commodities.  To the consumer, many companies provide similar products or services, so they just search for the lowest price.

A company's brand ensures their value can stand out out from their competitors. It also helps that the company can "get found" when a customer is shopping. It makes them memorable to the consumer!

In any economy, people buy when they are in pain and have the money to solve that it. Any marketing activity a company does ensures that the business can get found when the customer is ready to buy. If the company can't be found by the customer, they have no chance of being chosen. A consumer has to consider that company (i.e. put them in the “maybe” pile) to get a sale. Most successful companies get chosen over 33% of the time they are considered by a customer. The key to growing a business is to get considered by more shopping customers.

Some small-businesses confuse a brand with a logo. A brand separates the company from their competitor. It is an emotional experience. What will the customer see and feel when interacting with a company?  The brand is what the company is known for, the pain it solves and its values. Alternately, a logo is just a graphical representation of the company's name. While the logo can be recognizable, it is not the brand.

Consumers will pay more for brands that add value. For example, what comes to mind when a consumer thinks of Apple? The company is known for innovative, hip, easy to use, and expensive technology. This is evident in all Apple's products and stores. For consumers, the Apple brand clearly adds more value since Apple is one of the most valuable company in the world. Similarly, the Starbucks' brand is not just about selling coffee, they are seen as a warm and friendly atmosphere where customers can stay awhile.

Brands help companies connect with the consumer's pain. Remember, a valuable service is what a customer seeks, not what the company wants to provide.

Developing a brand is an investment process. Consumers stay loyal to brands they buy and remember.  It makes it harder for them to switch to a competitor. In this social media connected world, eventually satisfied customers will promote the company's brand making it even more powerful.

Article By Barry Moltz - Barry is a nationally recognized expert on small business who has given hundreds of presentations to audiences ranging in size from 20 to 20,000. Barry Moltz gets business owners growing again by unlocking their long forgotten potential.  With decades of entrepreneurial experience in his own business ventures as well as consulting countless other entrepreneurs, Barry has discovered the formula to get stuck business owners unstuck and marching forward.  Barry applies simple, strategic steps to facilitate change. Details on Barry can be found on his website www.barymoltz.com.

Attend the  Get Found and Be Chosen  presented Barry Moltz hosted by Dex Digital on June 19th during the LOHAS Business Conference in Boulder.  For more information on your business’ findability score please visit: www.HowFindableAreYou.com/LOHAS

Get your Findable Score™. It's fast, free and easy! Learn how consumers search for businesses in your industry and get advice to improve your visibility. Your score is free and so is the marketing insight.

Conscious Leadership: What Happens When Love and Passion Guide Your Decisions

Wednesday, April 3, 2013 by

I've been working with business owners for more than three decades.  When I first got started in the business world it was with a company called the Whole LIfe Expo.  We were organizing consumer expositions for those people interested in natural lifestyles and products.  Back then, we referred to it as "new age" - as this was the post-hippie, post-love era.  

As a salesman selling exhibit booths and advertising space for the holistic lifestyle company above, I remember lots of the customers I sold to talking in terms of being more "conscious", participating in "consciousness raising" activities or promoting "higher consciousness".  It all had an airy-fairy kind of connotation to me back then.  After all, I was in business trying to sell something and I was more concerned about whether they were buying what I was selling.  

But, today, the term "conscious" is back in vogue.  I guess we can thank John Mackey of Whole Foods for bringing it back in style.  Today, I know people running organizations and events using the terms of "conscious capitalism", "conscious leadership" and "Consious Life Expo."  

So, what's this all about?

As a business leader, you must remember that the foundation of your business isn't money, it's people!  It's your people who produce your goods or services for sale and it's people who consume or use them.  When you start seeing your business as the function of many people coming together to deliver value, this will enable you to act with kindness, generosity of spirit and even love.

At a dinner I attended recently put on by the founder of Conscious Leadership, the CEO of Patagon, Casey Sheahan, shared a story of a conversation he had with his wife during a difficult period in the company's history.  Here's my paraphrasing of the conversation:

Casey to his wife: I have to layoff employees if we going to be profitable in (the slumping economy of) 2009. Even though I hate to do this, I will present this to the board next week.

CEO's Wife: Are you making this recommendation to the board out of FEAR or LOVE?

Casey: I guess FEAR.  We don't have the losses, but we're projecting them.

CEO's Wife: Well, you always talk about the business being one big family.  Would you do this to your family? What if you came from LOVE, not FEAR.  What would you do?

That got him thinking.  The CEO said that he came up with 10 ways the company could save money and cut costs (e.g., have employees wash the store windows instead of using an outside service) and keep his employees employed. He was transparent with his team about the position they were in.  Nobody was fired. And....

The result was Patagonia's best year ever...and the best 5 years in the history of the business.  

A passion for people is at the heart of business and leadership.  Let it guide your business decisions and help you reap lasting success.

If you have an example of where you let passion, not profits, guide your thinking and it served both masters, please write me.

 

Shoppers' shifting values will lead to more green, fair, quality purchases

Wednesday, April 3, 2013 by

The sharing trend that became popular with Zipcar is likely to expand to other industries such as tools and baby gear as consumers readjust their spending patterns to focus less on conspicuous consumption and more on making thoughtful choices with their money, says one leading social forecaster.

In the improving but not yet booming economy of 2013, Patricia Aburdene, author of the New York Times bestseller "Megatrends 2000" and most recently "Conscious Money" (Atria Publishing; $16 paperback), predicts priorities and values will play a bigger role in shaping spending decisions.

"Key concepts like practical, quality, meaningful, simplicity, chemical-free, local and sustainable will be what encourages consumers to open their wallets," said Ms. Aburdene, who lives in Boulder, Colo.

For the most part, people are still feeling some financial stress brought on by the Great Recession that started in December 2007, which she says is fueling the popularity of sharing trends such as Zipcar, which allows members of its sharing network to reserve cars for personal use by the hour or the day.

The car-sharing niche created by Zipcar in January 2000 is already starting to see more competitors. Hertz, Enterprise and UHaul have come up with their own versions of short-term car rentals. Regional competitors such as City CarShare in San Francisco, Mint in New York and Boston; and I-GO in Chicago also are becoming bigger players.

"Car sharing is taking off because people are realizing how darn much it costs to own a car," Ms. Aburdene said, adding that car sharing is more of an urban phenomenon.

Other new societal demands and behavior that she expects will gain more traction are transparency, fair trade and third-party verification of products.

Just as the "Good Housekeeping Seal of Approval" helped consumers in past decades put their trust in a product, Ms. Aburdene says more shoppers will be drawn to seals of approval from groups like Greenpeace and the Rain Forest Alliance. "Those product seals will let consumers know the company is socially responsible and the consumer is making a difference in the world when they buy the product," she said.

Fair trade is another growing global movement that will affect spending, according to Ms. Aburdene. Fair trade products -- ranging from coffee to chocolate to wine -- sometimes cost more so that farmers are paid fairly for their efforts.

Gerald Celente, publisher of The Trends Journal in Kingston, N.Y., said he agrees with Ms. Aburdene's analysis of 2013 trends in general. But he says the majority of Americans are on a downward economic path and may not have the luxury of making socially conscious spending choices, especially when there are cheaper alternatives.

"While they can have the best intentions, it's a stomach issue and a pocketbook issue. People are falling out of the middle class in huge numbers," said Mr. Celente, who forecast the popularity of gourmet coffee years before Starbucks became a household name and bottled water decades before Coke and Pepsi got into the business.

Mr. Celente, author of "Trend Tracking" and "Trends 2000" (Warner Books), said Ms. Aburdene's trend predictions for the new year refer mainly to a small segment of people in an affluent society, but do not apply to the masses of Americans struggling to make ends meet.

However, Ms. Aburdene has a pretty good track record of past predictions.

In "Megatrends 2000," which was published in 1990, when many economists warned of tough economic times ahead, she and co-author John Naisbitt instead predicted a booming global economy during the 1990s. The book also predicted the Pacific Rim would come to prominence in the 1990s, and it certainly did, with China and the economies of the Four Tigers (Hong Kong, South Korea, Singapore and Taiwan) expanding at explosive rates.

"When you look at the trends for 2013, the social trends have a very strong economic flavor to them," Ms. Aburdene said. "The way consumers can begin being conscious about money is to start by reflecting on their values and priorities so they spend money in ways that feel right to them."


First Published February 26, 2013 1:15 am by Tim Grant: tgrant@post-gazette.com

The Buck Slows Here – Why the Time for Slow Money is Now

Monday, April 1, 2013 by

 The Buck Slows Here Slow Money slow food investing Carlo Petrini By Woody Tasch

There is no such thing as money that is too fast.

This was one of the certainties of the Old World of Finance.

But now, here we are, on the shores of a New World of Finance that none of us asked to explore — listening to the blandishments of investment bank CEOs apologizing for $6 billion mistakes and, then, to halting arguments about regulation that strike some as a bunch of pea shooters aiming at a predator drone.

It’s as if, on our way to the far-flung territories of Endless Growth and Unending Consumer Confidence and a 20,000 Dow, we’d awoken after a superstorm, stranded on the shores of R.H. Tawney’s seminal historic insight: “The certainties of one age are the problems of the next.”

There is no such thing as money that is too fast.

This certainty of our age is leaving many mounting problems for the next.

There are problems of debt.  In the foreground, government budget deficits and the national debt.  In the background, a deep structural debt that is even harder to face: fossil fuel debt, dense carbon debt—each day, on a global basis, we use petrochemical energy it took 10,000 years to make.

There are problems of doubt.  In the foreground, climate change:  Is it manmade?  Is it catastrophic?  What can we do about it?  In the background, doubt of the economic and financial kind: With $600 trillion in derivatives still hovering somewhere just out of sight, what is the connection between Wall Street and our wellbeing?  Are ever-accelerating global financial markets the best path to preservation and restoration?

We need a new kind of reckoning.  And our first bit of reckoning must be this:

There is such a thing as money that is too fast.

Money that is too fast is money that has become so detached from people, place and the activities that it is financing that not even the experts understand it fully.  Money that is too fast makes it impossible to say whether the world economy is going through a correction in the credit markets, triggered by the sub-prime mortgage crisis, or whether we are teetering on the edge of something much deeper and more challenging, tied to petrodollars, derivatives, hedge funds, futures, arbitrage and a byzantine hyper-securitized system of intermediation that no quant, no program trader, no speculator, no investment bank CEO can any longer fully understand or manage. 

Just as no one can say precisely where the meat in a hamburger comes from (it may contain meat from as many as a hundred or a thousand animals), no one can say where the money in this or that security has come from, where it is going or what is behind it. No one can say for sure whether — if it were to be “stopped” and held by someone for more than a few instants — it represents any intrinsic or real value.   Money that is too fast creates an environment in which, when questioned about the outcome of the credit crisis, former Treasury Secretary Robert Rubin could only respond, “No one knows.”

 The Buck Slows Here Slow Money slow food investing Carlo Petrini The buck didn’t stop there, for sure, but we can slow a few of ours, here.

I’ll see your global financial shenanigans and raise you Local Harvest.  I’ll see your GMOs and raise you Coyote Creek Feed Mill.  I’ll see your Dodd-Frank and raise you Carlo Petrini and Jack Lazor.  I’ll see your Farm Bill and raise you MM Local.  I’ll see your CDOs and raise you Slow Money.

Let’s take a few of those trillions-of-dollars-a-day that are zooming through cyberspace, financing everything from smokestacks in Chongqing to parking lots in Las Vegas to frost-resistant fish genes in tomatoes, and put them to work near where we live. There it can support the next generation of small farms, grain mills, creameries, seed companies, processing and distribution companies, food hubs, urban farms and more, improving our local economy, building soil fertility and supporting the next generation of small food entrepreneurs who are fixing our economy from the ground up.

With a little bit of gumption (and a little fun, too, because being under the tent with thousands of farmers, small food entrepreneurs, investors and activists, all working together to rebuild local food systems, is more fun than an Initial Public Offering), we can say, together,  “The buck slows here.”


Woody Tasch is the founder of Slow Money and the author of Inquiries into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered.  Slow Money’s 4th National Gathering is in Boulder, CO on April 29-30.  Since 2010, Slow Money’s 17 chapters and six investment clubs have facilitated the flow of $23 million to 185 small food enterprises around the country. Originally published by Triple Pundit

 

 

Wealth + Well Being = True Prosperity?

Friday, March 1, 2013 by

What is genuine prosperity? Whether you are an individual devoted to growing Conscious Money, a LOHAS company committed to delivering value to your customers, or an architect of economic policy, it serves you well to contemplate that question. When you do, you may find yourself wanting to distinguish true prosperity from the mundane variety that may dazzle at first, only to unravel because it is highly unsustainable. Many are tempted to define prosperity in strict economic terms. Metrics are handy and besides, we’re talking about financial matters, aren’t we? 

Not entirely. As Robert F. Kennedy said in 1968, “The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play … It does not include the beauty of our poetry . . . our wisdom . . . our compassion . . . it measures everything, in short, except that which makes life worthwhile.”
RFK’s moving remarks are especially pertinent today because, despite continued inequities, glaring injustices, and distressing environmental developments, an initial level of economic well-being is within reach for hundreds of millions of people, particularly in Latin America, Asia, Eastern Europe, and some of the more prosperous countries of Africa and the Middle East. For this reason, I would argue that the potential for people to practice Conscious Money is becoming a truly global phenomenon. That statement holds enormous ramifications for the LOHAS movement.
But how on earth do we factor in the many and deep dimensions of life that as Robert Kennedy told us, cannot be measured by what some call “the numbers”? 
 
Introducing: The Legatum Prosperity Index
True prosperity requires us to examine a complex set of human factors that encompass human values and consciousness. Determining and measuring the factors that sustain prosperity is the work of the London-based Legatum Prosperity Index, a global database that defines prosperity as wealth and well-being.  The Index’s findings often defy traditional thinking about who is prosperous and who is not. For example, the United States, often deemed the world’s wealthiest nation, ranks as only the tenth most prosperous. And the former Soviet republic of Kazakhstan, which is hardly considered well-to-do, ranks number 46 on the Prosperity Index, a few notches higher than oil-rich Saudi Arabia, which comes in at 49th. One intriguing and positive Index metric shows that the people of sub-Saharan Africa are more optimistic about entrepreneurship than those of many richer countries.
The Prosperity Index evaluates 110 countries (comprising 90 percent of the world’s population) on eight foundational factors of prosperity: economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom, and social capital. Except for “economy,” which might be construed as purely financial, these building blocks of prosperity, in one way or another, gauge or reflect human values or higher consciousness. 
For example, education raises human awareness: higher education levels generally point to greater possibility of conscious choice. Entrepreneurship requires hope, a core human value. Security frees the human spirit to engage in productive activity, including economic activity. Social capital, which the Index defines as cohesive community and family networks, relies on the value of trust, the lack of which is highly detrimental to prosperity. 
As the potential for Conscious Money expands globally, we can see the world anew, envisioning fresh opportunities for ourselves, our children and grandchildren, to live, work, and invest in a world of peace and prosperity. But as the Legatum Prosperity Index demonstrates, it is not economics alone, but economics infused with shared consciousness cultivates the right conditions for a rich, fulfilling life. The Index also shows us that money, values, and consciousness are seamlessly intertwined in the dynamic of human economic evolution here on planet Earth. 
That bodes well for the future of the LOHAS movement and its continued international expansion.
 
Patricia Aburdene is one of the world’s leading social forecasters and an internationally-renown speaker. She co-authored the number one New York Times bestseller Megatrends 2000. Her book Megatrends 2010: The Rise of Conscious Capitalism launched a business revolution. Patricia’s new book, Conscious Money: Living, Creating, and Investing with Your Values for A Sustainable New Prosperity, published in 2012, is a finalist is the Green category for the “Books for a Better Life Award.” Read Chapter one of Conscious Money at  http://www.beyondword.com/product/Conscious-Money-02926. Patricia was named one of the “Top 100 Thought Leaders in Business Behavior” and serves as an Ambassador of the Conscious Capitalist Institute. Patricia’s journalism career began at Forbes magazine and she was a public policy follow at Radcliffe College, Cambridge, MA. Her website is patriciaaburdene.com.
 
 
 
 
 
 
 
 
 

Brands and the Emotional Brain: Why We Need Story

Tuesday, February 5, 2013 by

How important is it to emotionally engage consumers with your brand? For companies operating in the LOHAS space, it’s mission critical. Why? Because the products and services LOHAS brands offer all relate to lifestyle behaviors, and decisions about those behaviors are made in the emotional brain.  In a way, LOHAS marketing has to perform double duty; besides communicating about the company itself, it has to promote the lifestyle values and habits that go along with the brand. The key to success is emotional connection with your target audience.

Recently I sat down with Dr. Ravi Rao, neuroscientist, management consultant and noted expert on the emotional brain, to discuss communication strategies that generate real emotional connection with customers. 

 

All good marketers know we need to focus on great storytelling, but do you know the neuroscience behind it? In The Value Of Story, Part One of the series on Brands And The Emotional Brain, Dr. Rao describes how we are wired to take in story and why facts and figures about product/service benefits won’t stick in consumers’ minds.

Leverage the power of story to engage the emotional brain and connect with customers. Every good story has three primary components: character, situation or struggle, and how the character gets through the situation. Our extensive wiring for empathy causes us to identify with characters and their situations.

“Empathy is our primary survival mechanism. Humans survive because we feel together.”

People want to hear about your company’s history, why you exist, what you’re trying to do.  They want to hear the stories of people you’ve helped, what their situation was and how it’s better now. The stories you tell about your company convey a personal emotional promise to potential buyers- how they will feel when they become part of your brand’s tribe and use your products/services. Decide which emotions to focus on and get clear on your brand’s emotional promise. Invite your customers to share their personal stories and acknowledge them when they do.

 

Mikhaila Stettler is an artist, writer and producer. As Creative Director of Creatrix Interactive, she specializes in converting target audiences to the lifestyle habits and values of mission-driven LOHAS brands. She achieves that by wedding compelling storytelling with rich media to create emotional connection between your brand and your target audience so that it reaches, teaches and prompts them to take action. Practicing what she preaches, Mikhaila is a passionate advocate of all things organic, non-toxic and ecologically sound.  Her idea of heaven is two weeks at a luxury eco-resort on a tropical island. You can reach her through http://www.creatrixinteractive.com/ and @MikhailaCreates

Ravi Rao, MD, PhD specializes in the application of social-emotional neuroscience to business. He’s the author of Emotional Business: Inspiring Human Connectedness to Grow Earnings & the Economy. You can reach him thru http://www.emotionalbusinesssuccess.com/ and @EmoBizGuy

Conscious Money & Conscious Capitalism

Friday, January 25, 2013 by

Two of today’s greatest megatrends, Conscious Money and Conscious Capitalism, are cut from the same financial cloth. And each of these innovative strategies flies in the face of conventional money thinking—which insists that human values should play no role whatsoever in financial decisions. That view is clearly incorrect. Values powerfully shape our choices (even if we’re unaware of it) and our behavior. Our choices and actions write the story of our lives—and our money lives. I’d go even further: positive values support us make better financial choices. Why? Because values engage the heart in the way that sound financial practices honor the head. When heart and head are in sync, our emotions are steady, our mind is settled, and our direction is clear—all of which enhance our ability to make good economic decisions.

Today, conscious finance attracts more followers daily as business leaders and “ordinary” people alike seek new monetary models that integrate values into finance. The $290 billion LOHAS market of course, is well known to many, but consider also the $3.74 trillion Sustainable Responsible Investing (SRI) industry, which has expanded 22 percent since 2010. Each of these robust sector, which have continued to thrive despite a weak economic recovery, embody Conscious Money, illustrating how compatible values and money really are. So much for conventional thinking. In fact, traditional financial and consumer brands avidly pursue the LOHAS and SRI markets. 
Conscious Capitalism is a new breed of free enterprise that honors people, purpose, and the planet. Embraced by visionary CEOs, in the US and globally, Conscious Capitalism differs from traditional capitalism because it endorses the “stakeholder model” of business which considers the interests of all parties that contribute to corporate success—customers, employees, investors, suppliers, communities, and the planet at large. Traditional capitalist theory by contrast tends to place investors first. For example, the late Milton Friedman, a Nobel laureate in economics, famously stated: “The social responsibility of business is to increase profit.” Conscious Capitalists are typically highly committed to growing profit, as well, but go they about it in a different way: by embracing a purpose above and beyond profit, such as promoting personal health or global sustainability. Human values like trust, justice, or transparency also play an important role in policy and behavior of conscious companies.  
Conscious Money, by contrast, is an approach to personal finance in which human values, inner wisdom, and higher consciousness guide individual financial choices, while people also observe sound monetary principles. The idea behind Conscious Money is simple: it’s about creating a positive, life-affirming relationship with money and a recognition that, when greater awareness (or consciousness) directs money choices, it can make a difference for one’s self, for others and for the planet at large. 
Figuratively speaking, your money becomes “conscious” when you infuse your cash, savings, expenditures, income investments, and philanthropic contributions with values, awareness, and positive intentions. 
Conscious Money and Conscious Capitalism are together building an unparalleled platform for meaningful economic co-creation. Because at the heart of every financial transaction lies the power of collaborative conscious choice. Conscious shoppers wield an enormous force for good in the economy. Conscious Capitalists, in turn, are more likely to invest in green innovation knowing that a growing market for green products exists. Each time individuals and businesses interact in a conscious exchange, the inner world of awareness and values tempers the marketplace of humanity, transforming our economic reality. With each positive life-affirming transaction, we jointly create a new and conscious economy that will sustain the future of human evolution and transformation.
 
Patricia Aburdene is one of the world’s leading social forecasters and an internationally-renown speaker. She co-authored the number one New York Times bestseller Megatrends 2000. Her book Megatrends 2010: The Rise of Conscious Capitalism launched a business revolution. Patricia’s new book, Conscious Money: Living, Creating, and Investing with Your Values for A Sustainable New Prosperity, published in 2012, is a finalist is the Green category for the “Books for a Better Life Award.” Read Chapter one of Conscious Money. Patricia was named one of the “Top 100 Thought Leaders in Business Behavior” and serves as an Ambassador of the Conscious Capitalist Institute. Patricia’s journalism career began at Forbes magazine and she was a public policy follow at Radcliffe College, Cambridge, MA. Her website is patriciaaburdene.com.
 

2013 LOHAS Marketing Megatrends

Wednesday, January 23, 2013 by

In the “better, but not booming” economy many predict in 2013, shoppers will focus more than ever on what they care about most deeply. So human values will increasingly shape their spending agenda. At the same time, new trends and priorities will inspire consumers to find new ways to take their values shopping. In addition to their abiding commitment to Health and Sustainability, values-driven shoppers will honor values like Transparency, Justice, Peace, and the more practical value of Frugality. Look for these trends to gain traction in 2013:

Non-violence Emerges as Top Value. In 2013 Peace and Non-violence will increasingly shape our financial choices. After the Newtown, CT massacre, a CBS poll found an 18-percent increase in people who favor tougher gun restrictions. This year powerful investors (i.e. the California teachers pension fund) have already sold weapons stocks. There are new consumer calls to boycott sporting goods stores that sell guns. In 2006, Walmart banned gun sales, but reintroduced them in 2011 to boost weak sales. “Boycott Walmart” initiatives now appear on Facebook.

Fair Trade Takes Off. Fair Trade (FT for short) consumers voluntarily pay a little bit more to endorse the value of social justice for farmers and artisans in developing countries. Result: Fair Trade is trending toward $5 billion global market. Fair Trade USA’s “Fair Trade Finder” mobile app helps consumers find FT products.

Third Party Verification Rules. Conscious shoppers favor products bearing a seal or certification from a reputable organization. LOHAS shoppers—80 percent of them—want trusted, independent sources to verify corporate product claims and 40 percent of all shoppers demand a seal or certification, reports a study by the Natural Marketing Institute.

Old-fashioned and Green Cleaning Products Rock. As green cleaners like Method, Seventh Generation, and Green Works gain market share over traditional labels, most mainstream cleaning brands (except Clorox and S C Johnson) still refuse to disclose chemical ingredients, despite pressure from consumers and activists. Meanwhile LOHAS shoppers enthusiastically embrace Grandma’s non-toxic—and ridiculously inexpensive—baking soda and vinegar. Great Recession helped us discover joy of frugality, but it’s unlikely we’ll abandon it as the economy picks up.

If there were a motto for 2013’s consumer spending mood, it might be: “Conspicuous consumption is gone for good; but discerning, values-driven spending never goes out of style.” Key words such as quality, meaning, simplicity, peace, economical, and local aptly describe the value propositions that will encourage shoppers to open their wallet in 2013. Time was, marketers asked, “Who is my consumer?” and defined consumer identity in strict demographic terms. But those who seek to build enduring relationships with LOHAS consumers must instead ask, “What are her values?” then cultivate a strategy for reaching said consumer by authentically embodying her values in all branding messages. 

________________

Patricia Aburdene is one of the world’s leading social forecasters and an internationally-renown speaker. She co-authored the number one New York Times bestseller Megatrends 2000. Her book Megatrends 2010: The Rise of Conscious Capitalism launched a business revolution. Patricia’s new book, Conscious Money: Living, Creating, and Investing with Your Values for A Sustainable New Prosperity, published in 2012, is a finalist is the Green category for the “Books for a Better Life Award.” Read Chapter one of Conscious Money. Patricia was named one of the “Top 100 Thought Leaders in Business Behavior” and serves as an Ambassador of the Conscious Capitalist Institute. Patricia’s journalism career began at Forbes magazine and she was a public policy follow at Radcliffe College, Cambridge, MA. Her website is patriciaaburdene.com.

Marketing Biobased Content Credibly

Monday, December 17, 2012 by

Communicating the benefits of “biobased” content, the world’s newest ecological marketing term, is often tricky. Biobased represents all of green marketing’s traditional challenges — including greenwash — but has additional, unique challenges all its own. Happily, strategies and a credible third party label now exist.

Opportunities For Biobased Products and Packaging
There are many reasons for a business to use biobased content instead of traditional petroleum-based ingredients in their products, including:  it helps grow the farm economy, promotes energy independence, and helps manage carbon impacts, providing a useful hedge against potential future carbon taxes. Finally, biobased agricultural and other renewable material can mitigate petroleum’s wild price fluctuations, supply disruptions and geopolitics.

From an image and marketing perspective, a shift to biobased content can enhance reputation with stakeholders, including risk adverse investors. It can boost sales in the B2B and B2C sectors, as well as support and enhance many types of ‘green’ claims. Let’s look at these in more depth.

Selling opportunities are growing in the federal, commercial, and consumer markets. In the U.S., for instance, the federal sector will benefit from an Obama executive order signed in March 2012 to double the amount of biobased purchases.

Initial market research suggests consumer willingness to purchase biobased products and packages. Research commissioned by Genencor in 2011 suggests 40% of Americans are ‘aware of’ the term biobased and 77% will ‘definitely’ or ‘likely’ buy comparable biobased products.

In the consumer sector, biobased content can halo a brand.Coke’s new partly sugarcane-based PET ‘PlantBottle’ (with ‘up to’ 30% bioplastic), reinforces the brand positioning of Coke’s health-oriented Dasani bottled water and Odwalla juice brands. PlantBottle is now being licensed from Coke by H.J. Heinz for its iconic ketchup brand. An image of the bottle is below.

In 2010, 83% of U.S. adults identify with ‘green’ values, with various segments expressing their own reasons for likely interest in biobased. For instance, the LOHAS (Lifestyles of Health and Sustainability) segment represents the deep green consumers who take a holistic approach to all things sustainable and green; Naturalites look for organic food, natural personal care, cleaning and pet foods; Conventionals conserve natural resources; and status conscious Drifters who like to be seen carrying cloth shopping bags and driving a Toyota Prius. (Source: The Natural Marketing Institute).

Together, these consumers fuel a $290 billion U.S. market for natural products, renewable energy and more benign household products. Well-known brands that actively incorporate biobased content include Ford, Seventh Generation, Stonyfield Farm, and Procter & Gamble’s Gillette ProFusion and Pantene brands.

Marketing Challenges of Biobased

1. Unfamiliarity. Consumers don’t know the meaning of ‘biobased’. The term is not in the dictionary and is limited to scientific, engineering and B2B usages. USDA, which introduced a “USDA Certified Biobased Label” in early 2011, defines biobased as made from agricultural materials, forestry and marine based sources; so, even a well-informed consumer needs to learn that biobased products come from more than soy and corn.

2. Risk of Greenwash. Because biobased is unfamiliar but sounds ‘green’, consumers can infer such environmental benefits as “natural”, “renewable” and “biodegradable” which may or may not be the case depending upon the product. Benefits that are too easily and often incorrectly implied or overstated increase reputation risk.

Green marketing lessons of the past still apply. As Mobil learned the hard way, in the early 1990’s, their Hefty trash bags which were marketed as ‘photodegradable’ (although not called biobased) were pulled from the market after seven state attorneys general sued saying that the bags would disintegrate (i.e., break down into small fragments under the influence of heat and/or oxygen) but not degrade in landfills for which they were intended and advertised. (See the recently revised FTC Green Guides for further detail.)

3. Science. The ASTM D6866 scientific test standard upon which the USDA Certified Biobased label is based, helps define ‘biobased’ and accurately measure content.  Even with this credibility, results present communication challenges. Because the test measures biobased content as a percent of total carbon content, minerals and water are excluded. This can make comparisons difficult between products that contain minerals and water versus those with only biobased ingredients.

4. Red flags. Despite its many benefits, biobased content raises some red flags among some segments of consumers. For instance, some biobased products could compromise performance;  a case in point, the first Sun Chips ‘compostable’ bag made from corn-based PLA bioplastic had to be withdrawn because it was noisy; PLA manufacturer Natureworks quickly reformulated.

Also, some consumers take issue with biobased materials made from genetically altered crops (as is the case with most corn and soy grown in the U.S.), or are concerned about the effect agriculturally-based content may have on food prices.

Some may also question the sustainability of the harvesting practices. Finally, some consumers are concerned that biobased ingredients are imported rather than domestic, thus representing carbon impacts associated with transporting the materials from distant shores, or steal business from domestic farmers.

5. Confusion and misinformation. Still, many consumers — and even product marketers — mix up the terms ‘bio-based’ and ‘bio-degradable’. Both these properties are absolutely independent. Biobased refers to the origin of a material and biodegradable refers to the end-of-life. Biobased does not mean a material is biodegradable and vice-versa.


Success Strategies for Marketing Biobased Products and Packaging

To market biobased products and packaging with impact, relevance and credibility consider the following strategies:

1. Promote uniformity to let consumers compare biobased content by adhering to ASTM D6866. Disclose the source of the biobased content and dsitinguish between content that applies to product and package. Understand implications of grammatical constructions of ‘made with’, ‘made from’ and ‘made of’.

2. Follow FTC Green Guides (in the U.S.) and other applicable country guidelines when making environmental marketing claims of or related to biobased content. The recently updated FTC Green Guides provides specific guidance for such terms that biobased products can support such as ‘biodegradable’, ‘compostable’, and ‘renewable’.

Despite obvious consumer associations of biobased as ‘ecofriendly’, avoid what FTC describes as ‘generalized environmental benefit claims’.  Avoid images of ‘planets, babies and daisies’ that could imply the product is greener or contain more biobased content than in fact.
Make sure to portray environmental benefits from a total life cycle perspective.

3. Support claims with the USDA Certified Biobased label and other applicable biobased certifications to underscore credibility. Educate consumers on the meaning of ‘biobased’ and the underlying basis for the label.

4. Consider additional complementary sustainability-related certifications as appropriate. For instance, many products qualify forBPI’s CompostableUSDA OrganicU.S. EPA’s Design for Environment, and the independent Green Seal certification labels. The same is true for certification schemes in a number of other countries.

5. Carefully research and address consumer ‘red flag’ concerns. Reassure about performance and specify product applications.

Jacquelyn Ottman and Mark Eisen are colleagues at New York City-based J. Ottman Consulting, Inc., expert advisors to industry and government for strategic green marketing. They advised the U. S. Department of Agriculture on the launch of the USDA Certified Biobased label during 2011 and are now working with labelers on capturing the value of their participation in the program.

Jacquie Ottman is the author of The New Rules of Green Marketing: Strategies, Tools and Inspiration for Sustainable Branding (Greenleaf Publishing U.K., 2011). Mark Eisen is the former environmental marketing director at The Home Depot.

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