The Photosynthesis Economy

Jeremy Rifkin stole the show at this week’s CERES 2012 Conference,” Igniting Innovation, Scaling Sustainability” Amidst a line-up that included EPA Administrator, Lisa Jackson, Jack Ehnes, CEO of the California State Teachers Retirement System (managing $145 billion) and Carl Pope, sage of the environmental community and long-time head of the Sierra Club, Rifkin’s closing presentation was superior not for lack of competitors but rather for its range and scope. One could feel a ripple spread out across the 600-plus gathering of business and environmental leaders in Boston as we absorbed his opening assertion; the largest economy on earth is photosynthesis. In a TED-worthy presentation (and no slides) he then ran through a catalogue of facts and examples – from peak oil and species extinction rates, to economic cycles and renewable energy opportunities. (For more on Jeremy Rifkin's presentations, see his TED talk on "empathic civilization" and his collections on Vimeo and YouTube)

Asserting that the Fall 2008 financial collapse was in fact an after-shock to the real economic earthquake that occurred July 2008 when oil reached $147 per barrel and the global economy began its downward spiral. Given the near ubiquitous presence of petroleum derived products in everything from fertilizer to pharmaceutical products, he makes a strong case that we have now entered a period where 5-6 year cycles of growth and retreat will repeatedly be triggered by oil prices surging into the range of $130-$140 per barrel. Despite the severe and systemic crisis he sees and a palpable sense of urgency – 40 years by his estimate before the window of opportunity closes – Rifkin also outlined six pillars (and more on each of these in future blogs) for an economic and environmental renaissance that are startlingly ambitious and quite logical.

1. Acceleration in the production and use of distributed energy;

2. Retrofitting of existing building stock to turn buildings into mini power plants;

3. Utilization of hydrogen for batteries to store energy;

4. Expansion of the smart grid as a transmission mechanism for energy; and

5. Introduction of electric vehicle fleets replacing the internal combustion engine.

And Rifkin’s sixth pillar, a change in consciousness, is based on a provocative and compelling link he draws between how societies are organized and how the human brain evolves. In brief, he postulates that with each fundamental shift – from foragers to hunters and gathers, from rural agricultural societies to urban cultures – so too does the human brain evolve to account for closer, tighter, and more complex social interactions. And empathy, he asserts, not aggression or greed or competition, is at the core of evolving human consciousness. (For more on this see Rifkin’s fascinating tome, The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World)

The need for a change in consciousness ran like an invisible thread through much of the conference in calls for more robust theories of change, the use of new tools such as the CERES AquaGauge and WRI’s Aquaduct, and Carl Pope’s quip to a smaller group that “natural gas is a potentially useful fuel afflicted with an abysmal industry.” And in many side discussions I exhorted people to marry facts with compelling narratives, to reframe the climate debate as a positive need for “climate stability,” and to refocus our thinking, planning and processes to embrace timetables that run well past the typical quarterly myopia that afflicts American industry.

As Pope, Jackson, Rifkin and many others observed there is increasingly no difference between environmental protection and economic prosperity. Future economic success, in Rifkin’s terms the “third industrial revolution,” (which interestingly is also the title of this week’s Special Report in The Economist), will be an environmental and energy revolution as well. Climate change is thus rightly seen not as an environmental challenge but rather as an economic issue – rife with risk and opportunity.

Local, Sustainable and Organic

It became clear in talking with farmers, ranchers, businesspeople, chefs and public advocates during the Sustainable Food Laboratory Summit that there is a ‘goodness’ premium associated with these three linked terms. It was equally clear that few people have a clear sense of what these terms mean, beyond an evocation of being different and somehow better than conventional produce.

While there are standards that must be met before labeling food as “organic” in the United States, the range of practices that exist between conventional and organic farming is enormous and growing. No-till farming, for example, preserves soil nutrients but is widely practiced with the use of pesticides and fertilizer. Organic produce, on the other hand, can be flash-frozen and shipped around the world at enormous environmental cost. So called, “food miles” may not be the right measure of what to consume or avoid, but it surely evokes visceral concerns about what is really ‘better’ in a holistic sense.

And this search for the truly better product – something that in the United States evokes that “Mom and apple pie” feeling – has spawned an alternate universe of certification schemes. From the Rainforest Alliance, Forest Stewardship Council and UTZ Certified Good Inside; to the Roundtable on Sustainable Palm Oilcertification and hundreds of other certification mechanisms the race is well underway to meet a wary public’s desire for greater assurance that products are not only safe to consume, but also produced with minimal impact.

Some of this growth in certification is driven by distance. Few people today can practice what has for most of human existence been the most common method of certification.

Ben Stenn, however, an impassioned and talented chef at Celilo, in Hood River, Oregon, uses the tried and true method of assessing the quality of his ingredients; he visits the farmers who grow it. (Video courtesy of WinePressNW.

Since most of us cannot personally assess how farmers grow what we eat, intermediaries do it on our behalf and then crystallize what they have learned by affixing labels to what we then purchase. Witness Organic Valley’s marketing built around the core question: “Who’s Your Farmer?”

I suspect that at root (sorry!), whether searching for local, sustainable, or organic, what people are seeking is trust. As distant as we have become from the sources of our sustenance, we all still crave reassurance that we can trust the people who are selling us what we eat.

GreenSpace Knowledge Center Goes to Nationals Ballpark

While I was out-West last week at the Sustainable Food Laboratory Summit and Aspen Ideas Festival back East in Washington, DC, a project I have been supporting for some years marked an important milestone. GreenSpace marked the opening of its new headquarters and turnkey knowledge center at Nationals Ballpark.

More than an office, more than a conference facility, more than a learning center, and more than a product demonstration venue, GreenSpace is a microcosm of the kind of community it supports throughout the national capital region. Designed without walls but with sustainable materials throughout, the space is designed, by Gensler, to be reused and redesigned without waste. It takes LEED one step further and redefines the notion of modular office space to encompass a truly mixed-use operation that is connected to and a driving force within the community.

GreenSpace founder and director, Patty Rose, embodies a new style of leadership where breaking down barriers replaces protecting ideas; where building win-win collaborations trumps competition; and were process mimics content. As the press release explains:

“Our green learning and resource center at the Nationals Park will be the place to go to build the skills, knowledge and capacity of professionals, policymakers and the public to create and retrofit ground breaking green buildings, sites and communities across the region."

For more on how GreenSpace has been driving change, in a town often criticized for being at the heart of the problem rather than the solution, see www.greenspacencr.org and its statement of goals Growing Green Communities Together (pdf).

Among the policy and sustainability leaders celebrating the launch of GreenSpace’s new facility at Nationals Ballpark last week were:

Eric Grant Vice President, Corporate Relations Washington Gas

David Robertson Executive Director MWCOG, Metropolitan Washington

Harriet Tregoning Director DC Office of Planning

Christopher Tulou Director DDOE, District Department of the Environment

A Conversation with Bill Clinton about Climate

Having heard President Clinton speak a few times while he was President, it was inspiring to have a conversation with him on Saturday (July 2) after his unscheduled presentation at the Aspen Ideas Festival

A handful of us were talking after listening to his view of the 2012 election: Obama Administration success stories, observations on the Republican field, and calculations regarding Hispanic votes. I then solicited his thoughts on climate. He had just explained the critical importance of generating and managing uncertainty as a tool for political power.

I asked if he thought this ‘uncertainty principle’ could also be applied to generate support for successful climate and energy policy. After a brief pause, as his famous piercing blue eyes narrowed slightly, he said, “yes, I do.” He talked quickly and intensely about the importance of a single line in the stimulus legislation that Republican leaders have targeted. The fight is over $2 billion that has helped jump-start electric-vehicle battery manufacturing in the United States. (According to DOE, the 26 plants now operating will have capacity to meet 20 percent of global market demand in 2012).

A passionate advocate for aligning economic growth, “green jobs” and reducing carbon, Clinton then looked around, lowered his voice and leaned in to speak with the four of us in a huddle (perhaps because Chris Matthews and Gov. Haley Barbour of Mississippi might otherwise have overheard his next point). Pointing again to the new jobs created in the automobile battery sector with federal support over the last 18 months, he said “and they are worried that we really will generate the jobs with these investments…and that’s why they killed it.” He then raised his eyebrows evocatively, “Got it?”

We then shook hands with the 42nd President of the United States, as he thanked us for coming and for the questions we posed.  With nothing to gain and no votes to solicit, Bill Clinton still left us all feeling that we had had a few moments with one of the truly commanding leaders of our age.

Geology and The Bottom-Line

Hannah Jones, VP of Sustainable Business and Innovation at Nike, had the most memorable lines among dozens of speakers at two recent conferences, the “Ceres Conference 2011: Igniting Innovation, Scaling Sustainability” and The Conference Board’s “Corporate Citizenship and Sustainability” gathering in Washington, DC. Hundreds of senior executives from America’s leading corporations exploring urgent questions of climate stability, water resources, sustainable agriculture, and innovation and entrepreneurship. But Jones stole the show with two powerful remarks. Knitting together transparency, a key metric for responsible corporate reporting, with core business performance, she quipped that “if you’re going to be naked you better be buff!”

At a more granular level, we learned why SAP, in a small but significant shift, now releases financial results with its sustainability report, forcing a common language across the NGO and financial communities. If you want to see SAP’s carbon footprint you cannot escape their profit and loss statement; and if you are looking for their operating margin you also come face to face with “total energy consumed.”

We also reengaged what I see as an increasingly tired question -- is there “a business case for sustainability?” Do companies ‘do sustainability’ to make money, to reduce costs, or to enhance license to operate, brand equity, and to retain new and younger employees who want to feel good about their work every day? We heard powerful examples of business growth, market opportunities created, and profits generated from embedding sustainability in corporate DNA and also using it as a lens to drive innovation.

But – and it is a big but – it seems to me that the way we have framed this debate diverts us from the core sustainability challenge. And that is how we think about time. There is a disconnect between the incentivized behaviors of short-term profit-maximizing corporations and the increasingly bold proclamations by corporate leaders that their organizations will increasingly act with the interests of intergenerational equity at the forefront of strategy, planning and business operations.

Whether the fossil fuels we use to generate electricity, water to make myriad food products, or trees for desks and paper; all of the natural resources (including atmospheric gases) that we use to make products (or hold industrial “wastes,” like carbon) exist across a geologic time-scale measured in hundreds of millions of years. Three-year ROIs and quarterly earnings reports are but microscopic specks of dust across, for example, the 350,000,000 million years during which coal was formed from giant plants that died long before the dinosaurs.

When we ask (and ask and ask!) that sustainability justify itself on the altar of modern-day market capitalism, is this not a bit like arguing with a lump of coal over its own formation? We, rather than the coal, are the newcomers; who says it needs to explain itself to us? Coal is surely not going to adjust to our short-term needs. The core question is thus not about the business case for sustainability but rather the lack of a sustainability case for short-term profit maximizing behavior.

Done right, over a time-scale that accommodates both geology and the bottom-line, human ingenuity and nature’s incredible diversity and robustness can likely find a harmonious synergy. But this will take real leadership.

Who among the leaders of the Fortune 500 wants to tackle this issue of time and link his or her compensation equally to sustainability performance and profits by insisting that compensation be reviewed on a three-year basis across an integrated bottom line? Who at the SEC wants to lead the charge to bring corporate oversight out of the 19th century and into the 21st century by moving beyond limited reporting of climate risk to helping figure out how to bring trillions of dollars of environmental externalities onto the books of our nation’s corporations?

Hannah Jones also noted that at Nike, “we are measured against our potential.” Who among our corporate leaders today has the courage to just ….?

A Hospital without Patient Safety?

Corporate responsibility is to the management of a company what patient safety is to the administration of a hospital. If you are not doing it, what are you doing?

But as the concept of corporate responsibility has expanded beyond it initial construct of corporate social responsibility, so too the early focus on transparency, reporting, metrics and monitoring leaves much of this work outside the core business of business. Who would go into a hospital for surgery if we knew in advance that there were only, say, seven people working on patient safety while the rest worked on… what?

So for all the good that CR has done and is doing, in too many organizations the issues remain peripheral – small teams of dedicated people, sometimes with the ear of the CEO, pushing nudging the core business into incremental changes. Like tugboats working with a tanker, we often remain far from the engine room of power, profit, decision-making, and prestige.

Whether an executive, a stakeholder, a shareholder, or a CR professional we must confront the reality of popular fiction. Corporate structure is a figment of our legal and cultural imagination. Phenomenally effective at generating economic growth and the stuff that we all use and discard, and this engine has been one of prosperity for many millions of people, so too has this imaginative structure enshrined a set of incentives that all too often set people against one another. Short-term profit maximizing behavior clearly has denuded forests and stripped mountaintops bare. Long-term social development and cultural unity has often frayed as corporate institutions excel. Incumbents use market power to stifle innovation, even though they were yesterday’s innovators.

We know what CR looks like today, but tomorrow?

Going on Three Decades

Difficult to manage, impossible to avoid, and the endless driver of opportunity, driving and managing changehas been at the core of my work going on three decades. Living and working in Moscow as the Berlin Wall collapsed, guiding senior Western business executive through the splintering of the Soviet Union, and mapping the massive social, political, and global economic changes brought forth by perestroika and glasnost I experienced the turmoil and opportunity of profound change.

The dynamic process through which organizations and individuals act and react has much in common with the interaction of organisms and the natural balance of our globally linked ecosystems. As evolution happens every moment, but cannot be seen except across millennia, the power of entrenched thinking, cultural norms, and infrastructure cannot be swept aside in a moment. Yet, disruptive change happens; incumbent players are toppled and a new order emerges.

As nature abhors a vacuum and water flows until stopped, so too information floods our world – much of it incomplete, inaccurate, or manipulated to suit the needs of one actor at the expense of another.

Whether through research and strategy development or the execution of communications programs, I honed a unique mix of skills enabling me to work effectively at the intersection points where organizations tend to stumble and where high level yet narrow expertise often proves an obstacle to original thinking and the capacity to see opportunities in challenge. Not easily pegged I work in the white space, across and between neatly delineated departments and functions on organizational charts.

Whether presenting at a trade conference, driving a strategic brainstorming session, creating new means of communications, or providing one-on-one counsel to nonprofit or business leaders, my work is firmly grounded in how things are today – and how they might be in a better world tomorrow.