Monday Monday

Pondering the categories and labels that we come to accept as fixed and true. My daughter, intellectually inquisitive at 12, was asking, “Who decided Monday was going to be called Monday?” And as we were driving from DC to Maryland, who decided “about state borders anyway?” After groping with various fact-based answers, I paused and realized that this was more than anything a question of metaphysics rather than geographic history.

As Pope Francis completes his US visit in the city of brotherly love, I am traveling through Philadelphia en route to a meeting of the Environmental Grantmakers Association (EGA) with a copy of the Encyclical on Climate Change and Inequality. How is it that for so many years the issues of global climate stability, poverty and inequality were largely disconnected from one another? As we teach at Mundo Verde PCS, “habits of mind” are critical.

Looking over the EGA members, I think of the work I have been doing with Greyston: NYS’s first benefit corporation, supplier of brownies to Ben & Jerry’s and the pioneering social enterprise that has made open-hire a viable business practice while also providing jobs to the structurally unemployable. Is Greyston a business or a nonprofit; what is one to make of the social good movement?

The business structures we assume have been around for a very long time are, in fact, reasonably new creations. Although we have come a long way from 1602 when the Dutch East India Company was formed, and even from the passage in 1811 of the New York State statute governing corporations, clearly the overall pace of change is not slowing. And yet amidst change, inequality persists and even worsens: today the 85 richest individuals manage wealth equal to that of the poorest 3.5 billion people.

The notion of socially responsible business we can date to maybe 1953, sustainability to 1987, the triple-bottom-line to 1994, and benefit corporations to 2006. And in America, philanthropy tracks a not dissimilar course, and one closely connected to business: from Andrew Carnegie in 1905 and the Rockefeller Foundation in 1913, to the UN Global Compact in 2000 that seeks to set ground rules for responsible business behavior on the global stage.

We seem on the cusp of rewriting the fundamental rules and definitions around how we define returns on investment, what makes a business a social enterprise, and where responsibility rests in the efforts to address challenges that cut across the operational and mental boundaries we have created to help us understand a dizzyingly fast and complex world.

This Pope clearly is different, but how much of a difference do his words make? The work we need to do to reset the core frameworks and systems can seem as daunting as ever.

And, by the way, how did we select names for the days of the week?

Where’s The Pork?

Chipotle lost about one-third of its pork supply early in 2015 and signs popped-up in roughly 500 restaurants announcing that “carnitas” was unavailable. From the corporate HQ, PR Director Chris Arnold positioned his company’s handling of this supply shortfall as evidence that it stands behind its brand that promises “food with integrity.” Indeed, Chipotle did the right thing by deciding to curtail purchases from a supplier that violated its animal welfare pledges and in refusing to substitute substandard product to make up for that shortfall. (See Jonathan J. Halperin's interview in Forbes, Chipotle's Pulled Pork and What It Means For The Company And The Industry, January 16, 2015.)

But, without questioning the sincerity of either Chris Arnold or CEO and founder Steve Ells, I think there is more to this story than they are sharing. The real risk for Chipotle here is not so much a short-term sales dip or supply-chain headache, but rather that it is drawing down its supply of customer good-will and brand integrity. And Chipotle deserves credit for changing (some might say, creating) the fast casual food sector by selling not only great taste but also an ethos of responsibility from farm to table.

In a wired world that accentuates the truism that information abhors a vacuum, the fact that Chipotle won’t really say what pledges were violated leads to speculation. Was it farrowing crates or slatted floors as some analysts have surmised? Something else entirely? Only Chipotle knows; and they are not telling.

Given its deserved reputation as an industry-leader, Chipotle likely won't take as much heat around this as it otherwise would, but for one-third of its pork supply to dry-up in an instant raises questions about the scale of the problem. If it is, in fact, traced back to hard infrastructure and facilities construction at a major supplier, rather than a temporary failure to abide some specific procedure, this raises further questions. Chipotle asserts that the problem was detected in a “routine audit.” How often are suppliers subject to audits? Who conducts them? One has to wonder why the problem was not identified before it put 30% of the supply at risk.

Chipotle’s rapid expansion and success hold important learnings for other companies. There is a huge amount of information fuzziness around the whole notion of standards: who sets them, what they require, and how much they matter. Customers are right to be skeptical of unsubstantiated claims. Most well-defined are government statutory and regulatory requirements companies must comply with for their business operations. Less tightly defined are specific codes set by individual companies that their suppliers must abide.  Even less stringent are standards that companies require suppliers to meet; these are often more vague, especially as to how suppliers demonstrate compliance. More vague are aspirational, often undefined, principles such as Chipotle’s concept of “responsibly-raised” animals. At the lowest end of the spectrum are unsupported claims and pledges of evolutionary progress toward “better” or “equitable” or “humane” or “natural” treatment of animals.

When Chipotle itself is not fully forthcoming, there is a hollow ring to its request that we respect its choice not to “waste resources reporting, but rather spend them on doing the right thing.” This reluctance to share information has irritated institutional investors and a shareholder resolution was submitted last year calling on Chipotle to publish a sustainability report.  The resolution was supported by about 30% of its shareholders.

Sustainability reporting clearly has limits in terms of its usefulness to drive transparency and change behavior. But there is also a minimal threshold for reporting. For a company that has aggressively positioned itself as different and better, the refusal to share important information that is clearly material to its business operations tarnishes its reputation as a change-leader. There is a temptation to give Chipotle a pass in this situation and shift the focus to the laggards in the food sector (such as Koch Foods, Pilgrim’s Pride and Walmart). However, there is value for the food sector as a whole to focus on important issues when people are paying attention. It may not be fair, but people do pay attention when leaders stumble; it’s the price of leadership. Witness Brian Williams’ disastrous stumble.

Based on last year's shareholder resolution calling for greater transparency, it seems likely that this year even more than one-third of Chipotle’s shareholders will want to know what happened to one-third of its pork. While the supply problem will surely be managed, the disclosure issue may be more important.

Chipotle's Pulled Pork And What It Means For The Company And The Industry

Chipotle's Pulled Pork And What It Means For The Company And The Industry

The recent announcement that Chipotle Mexican Grillsuspended its popular pork carnitas from its menus in about 1/3 of its nearly 1800 stores when it discovered that a supplier was not meeting its sustainability standards made big news--and rightly so given what the move says about the  increasingly important factors at play for the fast food and chain industries, and consumers.

Here is a quick look at what’s at stake for the Denver-based fast casual chain as it tries to maintain the momentum it demonstrated last year (revenue was up 28% over prior for nine months ending September 2014; it also opened 132 new restaurants).

On Sustainability—and the Bottom Line. While fast food chains (most notably McDonald’s and Taco Bell) have yanked products from their supply chains due to food safety issues, the Chipotle move was different. “Chipotle clearly has done the right thing and stood behind its mantra of food with integrity,” begins Jonathan J. Halperin, CEO of Designing Sustainability who advises corporate and nonprofits on sustainability strategies. “In the past, however, it has not always done that. This time it said, ‘If we can’t get the pork we usually serve, we’re not going to do it.’ In that sense, it sends a powerful signal to customers and other companies that you need to back up your brand: You need to act in accordance with what you say you stand for.”

Loyalists, no doubt, will view this move as confirming why they love Chipotle, but the question is will investors? Darren Tristano, EVP of Technomic consumer research who has advised the company in the past, contends it won’t significantly impact sales (the event was reported to affect 6-7% of its entrees) or investors’ appetite. “This won’t be seen as being caused by an outside influence as much as the company staying true to what they believe in and the integrity of its products.”

When a Chipotle spokesperson was asked about the economic impact, he replied, “We have not provided an estimated cost to this” and while the company quickly updated its announcement with the news that its primary pork supplier, Niman Ranch, would help fill the shortfall (Niman reported it increased supply by 15-20%) it was still exploring other ways to fill the gap.

The Supply & Demand Issue. A topic seldom raised in the sustainable discussion is about supply and demand, especially as more chains like Chick-fil-A and Carl’s Jr. opt for using more natural ingredients. “Demand is high and price is high. The supply doesn’t exist while the demand continues to be high for natural products. It’s going to take time for the US supply chain to build these proteins in a way that is more natural and with humane treatment of animals—both of which are more expensive and take time. It will be 3-4 years before we see demand stabilizing with supply finally coming into equilibrium,” says Tristano.

Marketing that Matters. Chipotle’s executive decision to raise the issue publicly (which may have gone without notice) is perhaps a lesson in averting a potential PR crisis as well as savvy marketing. “This could be a marketing push as much as anything. What it is saying publicly is ‘We took our pork out of our stores because our supplier wasn’t doing what we expected.’ But what it also does is reinforce the fact that if it’s not right, it’s not being served,” says Tristano. “It’s really giving consumers and investors a chance to see that it’s so important to the company that it’s willing to pull it off the menu, which reinforces its position and philosophy. So there is as much a marketing advantage to be gained here as otherwise.”

While many agree Chipotle is showing consumers (and competitors like Qdoba Mexican Grill) how to walk the sustainability walk, others contend the company still has work to do. “Everyone agrees Chipotle’s really trying. It's a different kind of fast food restaurant and it has really touched a vein in the food culture of folks wanting to know what they’re eating is better and healthier,” says Halperin. “But it has been under a lot of pressure. And it’s a bit unusual in that they do not do sustainability reporting. Last year, in fact, there was a shareholder resolution on sustainability reporting that didn’t pass, but about 30% of shareholders said the company should be doing this."

Halperin explains that it’s common today for large companies, such as McDonald’s, to do sustainability reporting. He adds, "Chipotle is in a funny place--and getting heat. People are saying, ‘We like your commitment, but we’d like you to back it up with data.’ There’s a transparency that comes with that that signals genuineness. If Chipotle doesn’t do that, I think, it’s a real shortfall on its end.”

Chipotle will be announcing its full year 2014 earnings on February 3.

From Inspired Talk to Concrete Outcomes

Beginning with a presentation at the FMI/GMA Sustainability Summit in August, I’ve been engaged for months in an intense set of ongoing conversations about food: past, present, and future. From The James Beard Foundation Leadership Conference on the links between food and health (or disease) to the New York Times’ Food for Tomorrow Conference that took a sweeping look at myriad aspects of our “food system” in the elegant setting of The Stone Barns Center; from the theme of this week’s meeting of the Washington Regional Association of Grantmakers (Setting a Bigger Table) to the Washington Post Live session in early December (Feeding the Future), we don’t lack for impassioned, intelligent conversation.

Thought leaders are focused on food. The conversation is happening. Sure, a bigger table could be set; more voices could and should be heard. But I wonder if the bigger challenge is not rooted in a much deeper question. There is no shortage of lofty proclamations about the values we want the future food system to embody – and really not much disagreement about that either. Tougher, much tougher, is mapping a pathway that gets us from where we are today – with an installed physical, intellectual and economic base that defines our global food system – to where we want and need to be decades from now.

While “why” questions are often more intriguing, the question of “how” we get from here to there gets to the really hard questions of power, markets, and finance. If we want to do more than talk about “our common future,” we had best grapple with these knotty questions today.

Language and Sustainability for the 21st Century Food System

The words we use reflect the extent to which our thinking is clear or muddled. Speaker after speaker at The New York Times conference at Stone Barns on Food for Tomorrow spoke to the issue of words and meaning. Molly Jahn linked technology to its broader linguistic roots in technique and also observed that smart and wise are often not the same. She also urged us to understand that we lack the language we need to delve deeply into critical questions around farm systems, catastrophic risk, and the importance of shared knowledge to monitor global agricultural ecosystems.

Mark Bittman and Michel Pollan both noted the hubris embedded in the commonly posed question, “How do we feed the world?” Pollan wryly reframed this within the context of the uber-American radio show in which the Lone Ranger is surrounded by Comanche, Cherokee and Apache Indians and says that “we are in a heap of trouble.” And Tonto, the trusted sidekick, responds eloquently: “Uhh…What do you mean, 'We,' Kemo Sabe?”

The current enthusiasm around “farm to table” innovations sparked Tom Colicchio to draw everyone’s attention to the “to” as he noted that everything begins on the farm and ends on the table. The real challenge and opportunity is in what happens to food between farm and table.

Similarly, Ricardo Salvador asked us to think carefully about what we really mean by farming, especially when we fall into the habit of using the same word to describe the urban farming of a singular patio tomato plant and industrial agriculture as practiced on hundred-thousand acre farms across the Midwest.

And “industrial ag” or “big ag” are also linguistic phrases that we need to unpack and understand to more accurately describe the components of the food system. What we cannot describe, we are unlikely to be able to fix.

Mario Batali (l), Andrea Reusing (r), and moderator Sam Sifton engage with Tom Colicchio as he dissects
"farm to table," observing that the "to" is critical - what happens to food between farm and table.

Creating a 21st Century Food System

As we recover from our annual Halloween sugar binge, worth $2.4 billion to the candy industry, rumblings of change can be heard from every corner of the food system. In Washington, a bill to reduce sugar consumption has been introduced by Rosa DeLauro (The Sweet Act) and Congressman Tim Ryan has written to the FDA requesting that the sugar content of food be shown on labels in easily understandable teaspoons rather than in grams (a complex measure of mass).

And Food Policy Action (with help from Tom Colicchio and others) just successfully tested its hypothesis that food can be a voting issue. It’s first target, Representative Steve Southerland will not be returning to Capitol Hill from Florida to continue his vilification of hungry citizens struggling to find their next meal.

In Berkeley, voters approved a tax on soda. And while the significance of this can be brushed off (after all, what would you expect from Berkeley?), the beverage industry thought the threat was significant enough to spend $2.4 million to squash this effort. Across the bay, where a similar effort fell just shot, award-winning pastry chef Emily Luchetti has launched a campaign to urge us to think before we eat. Her #DessertWorthy efforts ask us all to enjoy a real dessert – and to revel in the splendor of such magnificent treats -- rather than using up our quotient of sugar on cheap junk snacks.

The personal challenges and public consequences of our sugar-rich/nutrient poor diets is painfully documented in the recent documentary, FedUp, by Laurie David and Katie Couric and was the platform for our discussion with Rob Lustig and others at the 2014 James Beard Foundation conference on health and food. And sugar will likely be a topic of lively conversation this week as well at The New York Times conference (Food for Tomorrow: Farm Better. Eat Better. Feed the World) at Stone Barns.

Who needs to be at the table to create a 21st century food system?

The question all of these initiatives are grappling with, at root, is not just about schools or sugar or nutrition or the farm bill. It is not even just about agricultural yield and the need to feed 9 billion people. The real question is what kind of system do we need in the 21st century?

The 2014 James Beard Foundation Food Conference

2014 Agenda
The 2014 James Beard Foundation Food Conference
Health & Food: Is Better Food the Prescription for a Healthier America?
October 27 & 28
New York City

(Agenda | Watch Entire Conference)

What's Making Us Sick Anyway?
Lens One: The Ubiquity of Sweeteners

Sugar and Health: What is the Connection? from Jonathan J. Halperin on Vimeo

Session Introduction:  Jonathan Halperin, Founder, Designing Sustainability

• Sugar and Health: What is the Connection? - A Dialogue
  Robert Lustig, MD, Professor of Pediatrics in the Division of Endocrinology, University of California – San Francisco, and Author
  Jonathan Halperin

Taming Sugar: Solutions and Challenges from Jonathan J. Halperin on Vimeo

Clips from the film Fed Up

• Taming Sugar: Solutions and Challenges
  Laurie David, Executive Producer, Fed Up
  Cindy Gershen, Chef/Owner, Sunrise Bistro & Catering
  Emily Luchetti, Chief Pastry Officer, Marlowe, Park Tavern, and Cavalier Restaurants
  Jonathan Halperin (Moderator)

• The Sweet Truth – A Dialogue
  Marion Nestle, Paulette Goddard Professor of Nutrition, Food Studies, and Public Health, New York University
  Corby Kummer, Senior Editor, The Atlantic, and Food Salon Coordinator, the Aspen Institute

• Community Exchange: Reactions and Questions

Icons Die Hard

“Fresh as the month of May” is how Philip Morris introduced the iconic Marlboro Man in 1955, based on a photograph of a real cowboy from Life Magazine. The actor who originally portrayed the Marlboro Man died from emphysema in 1987. As the debate over the health impact of cigarettes began in earnest in the early 1990s, the intended association between smoking and healthy individuals living close to the land and enjoying glorious sunsets ran off the rails.

I thought of this while reading about the sharp 3rd quarter decline in earnings at both Coca Cola and McDonalds – two other global icons. According to the annual Interbrand survey, Coke’s scripted red lettering and McDonald’s golden arches rank as the 3rd and 7th most recognizable brands in the world.

As such, they are both just shy of the “Mom and apple pie” pantheon of sacrosanct American untouchables. Coca Cola spends almost $3billion annually to secure that place; McDonald’s spends about $1billion per year. (For context, $1billion is about $2.7million every day or $114,000/hour). Nonetheless, as AdWeek tells it, “…McDonald's reported a 3.3 percent quarterly profit decline, marking its worst performance in years, while Coke's profit dropped 14 percent with a continuing decline in North American sales during the same period.”

A McDonald’s “quarter pounder with cheese and bacon” contains the same amount of sugar (12g) as half of a Hershey’s chocolate bar (24g). A 12oz can of Coke serves up a whopping 39g of sugar. And consumption of added sugars, for which there is no Recommended Dietary Allowance (RDA), is increasingly clearly associated with rising rates of Type II Diabetes, Fatty Liver Disease and Metabolic Syndrome. It is also increasingly understood to be addictive and at the levels at which we are encouraged to consume it is potentially toxic as well.

Among the trip-wires that ultimately led to the downfall of the global tobacco giants (at least in the developed world) two stand out as ominous warnings for the beverage and sweetened foods sectors. First, it emerged that the companies had--but hid--the word’s best research on nicotine addiction and were ‘spiking’ their products to make them even more addictive. Second, it was not just that people were getting sick and dying from smoking cigarettes, but that they were using tobacco products in exactly the manner intended by manufacturers.

Soon there was no place for the executives to hide.

I don’t think Muhtar Kent, Coca Cola CEO, or Indra Nooyi, his counterpart at PepsiCo, are trying to kill people. I think they want to find a way out. I think they know they are in trouble. I think they want to preserve their branded icons. I don’t think they know how to satisfy the voracious appetite of mainstream investors for ever rising profits while also making substantial and healthy changes to their product mix. They need help to really innovate not just delay, deflect and distract. The innovation needs to be systemic to address the underlying problem; the business model that has returned enormous short-term profits to shareholders is over the long-term causing a public health disaster. Tweaking the amounts of sugar and tinkering with the product mix won’t cut it.

I thus had to shake my head in dismay when reading that in response to declining sales, still according to AdWeek, “[Coca Cola’s] recent acquisition of Monster Beverage Corp. underscores a strategy to diversify into the market of highly caffeinated drinks for youth.”

Refreshing as the month of May.

Are Borders History?

From earthquakes and mudslides in Chile, Japan and California; from droughts across America’s fruit and vegetable heartland; to flooding in Pakistan and creeping lava in Hawaii as well as a smoking volcano in Iceland; from killings in Ferguson, Missouri, to the Russian invasion of Ukraine; from the collapse of the state in Libya and the rise of the Islamic State across the Middle East; from Gaza to the Golan Heights one could be forgiven for feeling that things are coming unstuck.

Borders certainly are not the sacrosanct demarcation lines they once were – whether in Europe, Africa, or the Middle East. The Ebola virus crisscrosses borders largely unchecked from Guinea to Sierra Leone, from Liberia to Senegal and Nigeria. The traditional models of ensuring border security, public health, economic stability, and food distribution are under immense stress.

While NATO leaders plan for deployment in the future of a rapid deployment force to protect Eastern Europe, Russian boots on the ground have made a mockery of the border with Ukraine. Claiming a common cultural and linguistic identify with the eastern region of Ukraine that trumps international borders, laws, and principles, Russian leaders have “torn up the international rulebook…” according to NATO Deputy Secretary General Ambassador Alexander Vershbow. And Russia, “one of the most powerful nuclear nations,” as its current autocrat has thought necessary to remind everyone, becomes ever more mired in its own special form of historical dementia. Ever afraid of being encircled by enemies and cut-off from the world, Russia again has used brute force to enlarge its borders, creating a buffer zone of discontent people – thus guaranteeing that its greatest fears will come to pass. Unable to manage itself in the present, Russia calls upon its history and thus condemns itself to a future of endless struggle and strife.

The old story, about Brezhnev’s recurring nightmares still resonates. As Russians would tell it, Brezhnev awakes with a start, sits upright in bed, sweating, as he looks into Red Square and imagines a Pole eating Matzo ball soup – with chopsticks. Putin, perhaps, dreams instead of “New Russia,” Novorossiya, but his thinking is as old as Mother Russia herself. His mental map is from the age of Kievan Rus’ and Prince Oleg in the 9th century.

In other ancient lands, the new “Islamic State” has emerged as if from the ashes of death and destruction in Syria and the fragmentation of Iraq. While its brutality is positively medieval, its grasp of social media is very 21st century. And like Russia’s Putin, the “Islamic State” seeks to legitimize brutality with the patina of history – in this case the 7th century origins of a caliph as “the commander of the believers.”

In Russia, history has always been malleable. I was in Moscow when high school history exams were cancelled. After a spasm of truth-telling during the brief period of openness known as “Glasnost” it was clear that the answers provided in the history books that were used all year in schools were wrong – and there was thus no way to grade the exams.

Yet this sweep of human history, over thousands of years from caliphs and princes to social media and satellites, is but the blink of an eye against the slow tectonic rumblings of earthquakes and volcanoes. Whether continents or borders, customer relationships or supply chains, little is as fixed as we might like to think. Things change, always. Good news for cartographers -- and people and businesses leaning into unknown futures, respecting, but not trapped by history.

Reflections on Sugar

The thoughts below capture some aspects of my personal dilemma with sugar. Professionally, I also work with clients that manufacture products containing large quantities of sugar – while also working with foundations and nonprofits committed to helping Americans reduce sugar consumption. The conundrum is real; while no one wants to become sick or make anyone else sick, we live and work today within a tangled system of business decision-making and advertising, personal choices, and public consequences. Another blog, The Sustainability Trajectory, explores the challenges and opportunities over time as that system evolves – either predictably or in very disruptive ways.

• I really like sugar.

• I know too much sugar is bad for me.

• The more I have the more I want.

• I used to think honey was better than sugar.

• I expect to find sugar in my Hershey Bar.

• I did not know that one cup of condensed Campbell’s Tomato Soup also has 24 grams of sugar.

• I really like both those companies.

• I thought fresh, organic, natural juices were good for me.

• I realize now that sugars removed from the fibers that bind them into fruits are metabolized differently.

• I am sometimes bewildered when I shop.

• Is a smoothie, with fiber, better than juice?

• The body metabolizes high fructose corn syrup differently from other sugars, but I am not sure I understand exactly how.

• One calorie is not the same as every other calorie.

• According to the CDC, diabetes can be prevented through “healthy food choices”; afflicts 28 million Americans; was the 7th most common cause of death in 2007; and cost us more than $174 billion that year in direct and indirect costs.

• $174 billion is more than thirteen times the total GDP of Iceland.

• Americans are heavier than ever before, myself included.

• But people who are thin can also be very sick with metabolic syndrome.

• FedUp, the new movie, is very sobering.

• According to the Harvard School of Public Health, the average American eats 22 teaspoons or 88grams of added sugar every day – not quite 4 Hershey bars.

• The FedUp challenge to not eat sugar is hard.

• Because there is no nutritional value to added sugars, food labels don’t share an RDA – which might help us understand more about what we are eating and drinking, and what it is doing to us.

• 80% of the 600,000 food products in the US contain sugar.

• Coca-advertising budget in 2014 will be more than $4 billion.

• Investors called for PepsiCo CEO Indra Nooyi to resign after she announced plans to focus advertising on nutritious products.

• Dr. Robert Lustig’s you tube video on the dangers of sugar, The Bitter Truth,has over 4,600,000 views.

• I am helping him build the Institute for Responsible Nutrition.

• I really like sugar.

• I know too much sugar is bad for me.

• Have a nice day.

Truth and Power

Speaking truth to power rarely happens. But with four members of the SNAP Alumni network in the halls of Congress last week it did. I’ve blogged about that before (see Dispatches: Real Experts on Hunger and On Hunger and Respect in America) but am moved to write again based on today’s New York Times editorial ("No Time to Cut Food Stamps") urging Congress not to cut the meager, short-term assistance the government provides people without the means to buy food for themselves and their families.

As part of our work with Participant Media and the campaign for A Place at The Table, we invited four members of the SNAP Alumni Network to join us in Congressional meetings and in screening the movie. Whenever Leslie Nichols, Jennifer Tracy, Trish Henley, Nikki Johnson-Huston, or Okiima Pickett spoke members of Congress were riveted. Texting ended, nodding heads went upright, slumped backs straightened. It was quite a thing to watch.

SNAP Alumni on Capitol Hill with Directors Lori Silverbush and Kristi Jacobson, Executive Producer Tom Colicchio, Jonathan J Halperin, Alden Stoner from Participant Media and colleagues.

As I said when introducing each of them, courage and leadership is what they embody. Many people have taken the food-stamp challenge and have tried to live for a few days on what food stamps provide. But imagine not only doing that for weeks and months but then becoming a successful tax attorney (like Nikki Johnson-Huston) or a nonprofit executive (like Jennifer Tracy), a college Professor (Trish Henley), a schoolteacher (Leslie Nichols), or an systems security architect (Okiima Pickett) – and then speaking before Congress about that experience? That is truth speaking to power.

SNAP Alumni (interactive mosaic on A Place at the Table website)

The Sustainability Trajectory

The Sustainability Trajectory

Transitioning to expanded role as “engine for change” in sustainability, environment, and energy funding, The Cynthia & George Mitchell Foundation invites external thought leaders to blog.

In 2012, a little bakery just north of New York City became the first business licensed in New York State as a Benefit Corporation.

Thus Greyston Bakery joined companies like Patagonia, Etsy, and Ben & Jerry’s in advancing a fundamentally new model for business that focuses as much on a declared social mission as on its business purpose. The advent of benefit corporations signal the beginning of a profound structural shift in the business of doing business—the first of four disruptive shifts discussed in this essay.

Far from being set and fixed for all time, the core structure of business is fluid and evolving.

In 1811, New York State enacted the first law in the United States providing for the formation of limited liability corporations. Since then we have enjoyed incredible benefits from a period of industrial production unsurpassed in human history. And while it may be seem inconceivable that this period could be winding down, it would be equally foolish to bet that it will continue forever. With this unparalleled productivity has come consumption on a scale that cannot be sustained, in part because the wealth produced in this 200-year stretch of human history has also generated inequality on a scale that is mind-boggling. The 85 richest individuals on the planet have amassed wealth equal to that of the 3.5 billion poorest people in the world.

Baking brownies in Yonkers is not going to close that gap. But as a benefit corporation, Greyston is not just, or even primarily, in business to bake brownies. Greyston does not hire people to bake brownies so much as it makes brownies in order to hire people. Greyston’s social mission is open hiring whereby it hires people on a first-come, first-served basis without asking for references or doing any type of background check.

They are in the business of hiring the structurally unemployable (those who have been in jail, on drugs, or homeless). Other benefit corporations have declared other social missions such as conservation for Patagonia or “re-imagining commerce” for Etsy. While there are about one thousand benefit corporations today, there were no limited liability corporations in the United States until 1811 (although business trusts and partnerships existed).

Benefit corporations are of course not the only mechanism through which a business can demonstrate its commitment to socially responsibly behavior. Corporate sustainability reports and corporate foundations often expound on the “good works” being done in the communities in which they operate. But these efforts are often isolated from business operations, relatively inconsequential to the business financially, and not factors in internal business decision-making.

The benefit corporation model pulls responsibility for the social and environmental elements of the triple-bottom line out of philanthropic giving and sets it squarely in the executive suite—embedding those considerations in the core product or service of the business.

Benefit corporations thus fundamentally shift the balance of business priorities. Shareholders become just one powerful group among multiple stakeholders—practically not just rhetorically. The need to run a profitable business remains critical; no money, no mission. But the reasons for running the business are significantly expanded, as is the timeline against which success is measured.

A second disruptive structural change on the sustainability horizon is a shift in the basis for executive compensation. While the data remains somewhat opaque around this issue, what is unmistakably clear is that many more Chief Executive Officers sign eloquent and heartfelt letters to introduce sustainability reports every year. But they rarely actually put their compensation on the line to achieve sustainability goals.

According to a new CERES report, a scant 3% of 613 large publicly traded American companies link executive compensation to anything more than mere regulatory compliance on sustainability related matters.

Sustainability reports have been central to disclosure and transparency; they have given investors and advocates a point of access and leverage; and they have enabled companies to benchmark against best practices. But they have not, generally, worked their way onto the C-suite decision-making dashboard. Sustainability data, painstakingly collected and analyzed, rarely forms the basis for core business decisions. That would change—and fast—if leadership compensation was as closely linked to sustainability metrics (from water and GHG emissions, to community investments and labor practices) as it is to ‘making the numbers.’

As much as we need to redefine leadership, and the compensation that goes with it, so too does the notion of “supply chain” need to be reconceived. And this too will be highly disruptive for leaders and investors who cling to an outdated and narrowly circumscribed definition of the role of business being exclusively about producing products to generate near-term profits for its owners.

Once upon a time not so very long ago, what happened inside distant plants or on fields in far away lands, managed by layers of absentee investors, employing isolated workers with limited voice and even less political clout, seemed safe to ignore. But over a ten-year period, that changed dramatically.

In 1984, chemicals leaking from a Union Carbide plant in India killed thousands, and Bhopal became a household name. Five years later the Exxon Valdez ran aground and poured crude oil into Prince William Sound, tarring Exxon with the stain of corporate irresponsibility that has been impossible to remove. And for years in the 1990s, Nike was dogged by claims, and then acknowledged, that children in impoverished nations were making its shoes.

In a little anticipated shift, global businesses were forced to expand their horizons and exercise responsibility not just inside factory walls but also up and down global supply chains. But those “chains” were, and to a great extent still are, conceived of as circumscribed bands of direct inputs that flow vertically upward into products of ever increasing value.

We are now entering an age in which that band is bulging and the myriad horizontal connections at each point along the chain have also become of concern to global manufacturers. The flow of supplies is a web, an ecosystem—not a chain. The plant that makes cotton t-shirts relies on cotton grown in fields, picked by workers, sustained by nutrients and water and moved to market in myriad ways. And while a textile manufacturer may not perceive itself as being in the water business, that mindset exposes the business and its investors to immense risk if the price for cotton skyrockets due to competing demands among farmers, bottlers, other companies and citizens for access to limited water resources.

Managing the interconnected web of resources for multiple users is going to push buyers and procurement teams and their senior leadership to develop whole new skill sets and layered systems to ensure access to resources. Brute market power and dominance may temporarily forestall the day of reckoning for some corporations that cling to the notion of limited supply chain responsibility. But those that grasp the web-like quality of modern supply will likely prove more resilient and capable in the face of future challenges.

And finally, perhaps it is not really sustainability that holds the key to future prosperity across the triple-bottom line. Despite all the reporting, the deeply dedicated sustainability teams, and the efforts to build systems and software and better metrics, perhaps at the end of the day what we really should focus on is neither financial performance, nor integrated reporting, nor even the growth of the benefit corporation. Perhaps we are heading into an era in which we will begin to package these indicators into something vastly more than the sum of the parts to assess the overall health of a corporation. Whether organizational or personal, it is health that really tells us how we are doing, what we should be doing more of or less of, and how we stack up relative to others of similar type and size.

It is not a simple metric, but corporate health or wellness may be the elephant whose individual parts we have been poking at for some time without being able to fully see it for what it truly is—the underlying measure of a company’s capacity to generate value over time.

Sustainable Living or Survival of the Fittest?

This year’s CERES conference in Boston was provocative and challenging -- as it should be in celebration of 25 years of creative, innovative, and collaborative advocacy to bring greater openness and accountability to corporate behavior. And it is behavior, of course, that needs to change; openness and accountability are only the tools of the trade in modifying corporate practices.

Paul Gilding, perhaps the speaker who made the audience most usefully uncomfortable, painted two competing visions of the future. One, the Unilever Sustainable Living Plan, champions collaboration, aggressive sustainable agriculture practices, and a fundamental reorientation toward attempting to do more with less, continuing to grow and expand but with an increasingly limited footprint. Gilding also celebrated the clarity with which ExxonMobil has now articulated a different vision of a global economy driven by aggressive use of fossil fuels, where lack of climate stability is seen as a cost of business as usual, and within which ExxonMobil’s rightly vaunted discipline in execution is seen as its competitive trump card in a go-it-alone world.

While perhaps overstated a bit, I concur with his fundamental view, having served as a consultant to both Unilever and ExxonMobil -- although the engagement with ExxonMobil was abruptly ‘paused’ due to differing visions of what constitutes responsible behavior around climate change. Unless the most esteemed international scientists have it all wrong, the two competing visions of the world are pretty stark. If we push past an overall global increase of temperature beyond 2°C, the natural ecosystems that have evolved into a relatively stable and hospitable climate for our species are going to shift dramatically. And if the work commissioned by the US Department of Defense some years ago from the Global Business Network (run by Peter Schwartz, long-time scenario planning chief at Shell) is right, then we may be looking at abrupt rather than gradual changes in the global climate.

As with much change, wealth provides insulation. Resources can be mobilized to plan, defend, and identify alternatives when threats present themselves. But walled castles, cities, communities, and nations have a way of failing over time. While perhaps splendid in their isolation during their halcyon days, they also are brittle. Sea walls may be the Maginot line of the 21st century.

But there is a point at which the dynamic of “growing concentration of wealth and increased dispersal of political power” sends tremors through both markets and governments. And this was articulated well at CERES by Mary O’Malley from Prudential, an insurance company that knows a thing or two about risk.

While no one at the CERES conference was counseling the need to abandon ship, many stressed that business as usual is no longer tenable. From Roderick Morris at Opower to Rob Olson, Chief Financial Officer at IKEA US, the resounding message was to get ready for rough sailing into a vast sea of change. And those outfitted properly for the voyage stand to reap vast rewards. As Morris rightly noted, it is an invitation to innovate when the market presents a situation where “energy and water are cheap and saving them is boring.”

From Olson at IKEA, we were reminded that preparing for this new era requires flexibility and leadership to change traditional thinking. For decades companies have forsworn adjusting hurdle rate (return on investment targets) to accommodate viable sustainability projects that will bring long term value to stockholders, but by definition take longer to mature. IKEA has wisely adjusted hurdle rates outward from 8-10 years or in some cases to as far out as 25 years for critical sustainability investments.

Twenty-five years is 100 quarterly statements and 100 calls with Wall Street analysts. Few business leaders here today will be on those calls – and we generally lack bandwidth, systems, governance, and management capacity to manage out twenty-five years. But who among our business leaders today is planning for their companies to be out of business in twenty-five years? To survive, business leaders need to stop waiting for analysts to ask questions on those quarterly calls about the painstakingly compiled sustainability reports – and instead start actively presenting sustainability as core to the long-term generation of value for investors.

Leaders hesitant to make the case for sustainability as a core business mission and companies with a culture of complacency about their market position would do well to remember the fate of iconic brands that also “missed the memo” on change: Blockbuster Video, Borders, Polaroid. Who’s next?

Dismayed by one IPCC report after another (each showing with ever increasing certainty that the global climate is become more and more unstable), reading a steady flow of nerve-racking news from Ukraine, wincing at the stories of horrific abuse in Nigeria and Sudan, and still hoping for a more robust economic recovery -- it is useful to reflect on the powerful examples where hope and hard-work have combined to overcame seemingly overwhelming odds. Mary Robinson, the former President of Ireland and no longer the youngest member of the The Elders organized by Nelson Mandela, reminded us all of how Archbishop Desmond Tutu response to a question from a journalists about how he remains an optimist in the face of crushing hardship: “I’m not an optimist. I am a prisoner of hope.”

Risks over Time

Since participating recently in the UN Investor Summit on Climate Risk, and in preparing for the Sustainable Land & Water Program Expert Workshop in Amsterdam on Friday, I’ve been thinking more about risk as fundamental conceptual framework for making meaningful comparisons and connections. Risk is ineluctably comparative; some actions and decisions carry more risk than others. There is physical risk for a bobsledder, financial risk for a chief financial officer. What seems risky to me, may seem not at all so to you.

And risk speaks to how we value what we don’t know. If we knew everything – past, present and future we would have certainty, i.e. the absence of risk. While leadership and intelligence each have many definitions, both require the capacity to choose wisely in the face of uncertainty.

Equity and fairness are also embedded in and sometimes obscured by how we present risk. As an agricultural buyer I reduce the risk of supply disruption by contracting with multiple suppliers; and as a farmer I can reduce my risk of a bad harvest by diversifying my crops. But when I farm higher up on a steeper slope to expand my acreage, I may create new and unforeseen risks for the downstream fishing village that may be wiped out by the silt washing off my hillside. Risk is often location specific—my hill, your river—and also very time sensitive.

And when we draw down nature’s capital stocks today, whether of rare-earth metals or carbon absorbing forests, we shift risks out into the future. As discussed at the UN Investor Summit on Climate Risk, stranded assets thus represent an interesting test-case of how we define present versus future risks. “Known reserves” in the oil and gas sector have traditionally been valued as assets and carried on the books of global companies on the presumption that the assets will be productively used at some future moment.

But there is a wrinkle in this thinking – a serious wrinkle – as documented by the work of CERES and its insurance and business partners. The risks of actually combusting all fossil fuel reserves across the planet are so high that upon serious consideration, no one really believes we could survive if we used 100% of these reserves. So, if some number less than 100% is actually usable, then some of those reserves are ‘stranded assets’ with quite limited value if they are never going to be used. How overvalued are the oil majors: one or two or ten percent? And that makes for a very different discussion about social, business, and financial risks in the oil and gas sectors.

Looking ahead to the meetings in Amsterdam, and immersed at the moment as well in a World Bank project on agricultural risk, looking at landscape- rather than farm-level productivity may (like stranded assets) unsettle decades of thinking in agriculture. The unceasing call for yield and productivity improvements may well have taken us down a path to short-term success while pushing extraordinary risks out into the future as we have undermined the productive health of landscape ecosystems around the world.

From a landscape-level perspective, a particular farm is only as healthy and productive over time as the landscape around it that provides for, among other things, soil nutrition. While we can postpone the day of reckoning for decades, a farm in the midst of a destroyed and denuded landscape is hardly a farm at all – even if it still has some productivity left in its tired soils. It too risks becoming stranded, as the assets around it that once breathed life into it become barren and infertile.

Like life itself risks rise and fall in response to both planned events and unintended consequences. That we have the capacity to manage risks wisely and with deep respect to how risks change over time is clear. Whether we have the will to do so is the greater challenge.

2014 A Happy New Year

I am comforted by the awareness that changes we dismiss today as inconceivable are often viewed by historians as having been inevitable.

A Happy New Year might thus include news of the following momentous changes.

• Following in the reconciliation footsteps of Nelson Mandela, President Salva Kiir of South Sudan and his former Vice President Riek Machar reach an accord to prevent this newest of nations from sliding into tribal anarchy.

• Noting that even Al Queda can apologize and take responsibility for being in the wrong for allowing one of its own to attack a hospital in Sanna, Yemen, George W. Bush and Dick Cheney apologize to the American people, admitting that they were in fact grievously wrong about the existence of weapons of mass destruction in Iraq.

• In a surprise announcement in Davos, CEOs Paul Pohlman (Unilever), Lloyd Blankfein (Goldman Sachs), Larry Page (Google), Mark Parker (Nike), Sam Walsh (Rio Tinto) and Norbert Reithofer (BMW) confirm rumors that beginning in 2016 they will base executive pay, including their own, not only on financial performance but also on sustainability achievements.

• Following copy-cat revelations in China and Brazil from whistle-blowers like Edward Snowden, the permanent members of the UN Security Council announce that they have begun implementation of a global intelligence gathering consortium to combat terrorism; and in a stunning move Republican leadership in the Senate vows to push for quick passage in the U.S.

• Finding common purpose in sustaining the long-term vibrancy of American democracy, Bill Koch, Bill Gates, George Soros, and Robert Reich (Board Chair of Common Cause) call for an end to all private funding for U.S. political campaigns.

• Recognizing the immensity of the self-inflicted economic damage that ripples through the economy from hunger and poverty, Mitch McConnell, Harry Reid, John Boehner and Nancy Pelosi announce a determined bi-partisan effort to raise the minimum wage to $15/hour.

• In an equally unexpected outpouring of bipartisan concern for the future of the country, House and Senate leaders pass of a carefully constructed carbon tax that is progressive, avoids stranding assets, and creates a truly level playing field; the US Chamber of Commerce and ExxonMobil push for passage, arguing that a stable climate is essential for long-term business investment.

• In response to questions posed to President Putin at the Sochi Olympics, he admits knowing next to nothing about the other twenty thousand prisoners he released along with Mikhail Khodorkovsky and the members of Pussy Riot.

• In a continued effort to introduce competition in the energy sector, House Energy Committee Chair Fred Upton (R-MI) and his fellow Michigan Representative, Democrat, John Dingell, propose legislation to repeal the Price-Anderson act, which indemnifies the nuclear power industry for any losses exceeding $12.6 billion.

• And in a stunning announcement cheered by consumers around the world Samsung, Apple, Google and Microsoft agreed to provide their unique mobile applications and services via a common platform and with fully compatible plugs, cords, and charging devices.

Hope springs eternal. Happy New Year!

"What is Hunger?" and "Hunger In Our Backyard"

Video for the first two morning panels of The James Beard Foundation 2013 Food Conference (The Paradox of Appetite: Hungering for Change, Oct. 21-22) appears below. For the entire two-day's proceedings, visit the James Beard Foundation's 2013 Food Conference video channel.

Panel: "Hunger In Our Backyard"

• Mariana Chilton, Director, The Center for Hunger-Free Communities

• Nikki Johnson-Huston, Esq., Law Office of Nikki Johnson-Huston

• Rep. Jim McGovern, Congressman, Representing the 2nd District of Massachusetts

• Jonathan Halperin, Founder, Designing Sustainability

Big Data Might Live Next Door

With more than 47,000,000 Americans only able to buy their next meal because they are on SNAP, formerly Food Stamps, one wonders where these people live. 47 million sure sounds like a big number. But where are they?

Try this thought experiment. If we wanted to move everyone on SNAP into concentrated hunger zones we would need to empty the fifty largest cities in America in order to make room for 47,000,000 people. Ponder that for a moment. All of New York, Los Angeles, Chicago, Dallas, Miami – and Virginia Beach, Virginia, and Arlington, Texas. If you can imagine everyone in all of the cities listed below as hungry and on SNAP, then you are beginning to grasp the scale of the problem.

So, while 47,000,000 is a huge number, the people that make up that number must be all around us: down the block, around the corner, across the road, on the bus, in the elevator. Maybe we work with someone on SNAP. Maybe we have a friend who has not told us they are struggling. Maybe that kid in the park?

Where is hunger in your world? 

Facts -- Not What They Used to Be

The story of hunger in America is quite instructive, and as the radical right plays financial chicken with the federal budget and the good faith and credit of the United States, 47,000,000 citizens wonder where they will find their next meal. In an America where compassion remains a core value, this is only possible because people have differing visions of reality.

For those in denial of the problem it is impossible to accept that Mitt Romney’s moochers and cheats deserve anything at all, much less a government hand-out. They are an undeserving and unmotivated underclass, so unworthy as to be dispensable. They are unseen and unwanted, a blemish on America the Beautiful. They are the proverbial “other,” perceived as so unlike “us” that they can be subjected to denigration, harassment, and denied basic human dignity and respect.

And facts, the stock and trade of those who would have us address this problem, rarely penetrate this emotional veil. The more facts disseminated the more the veil closes, the more overwhelmed people become, the more people close ranks and invest more deeply in self-reinforcing stereotypes about “us” and “them.”

Story-telling and personal inspiration, however, can pierce this veil of denial. And for that reason I continue to feel privileged to be involved with A Place at the Table, the film that puts a new face on hunger in America. The sheer emotional power of the film shatters the ‘us/them’ dichotomy and speaks to a more basic sense of human empathy. Whether leading a discussion around the film earlier this year in Denver (below) or showing a clip from it next week at the James Beard Foundation Conference in NYC, I believe in the power of story telling to drive transformational social change.

It is one thing to deny this or that fact in an ocean of information. But it is quite another to look someone in the eye who has been without adequate food for months or weeks and challenge their experience. The words and images of SNAPAlumni are poignant and inspirational, personal and evocative.

They demand that we act to strengthen our communities and our nation by bringing an end to hunger in America. Let us get on with it, now. Where is hunger in your world?

What Does 48 Million Hungry People Look Like?

48 million Americans struggle with hunger. 48 million names. 48 million stories. How have we let this happen? America's better than this.

Neighborhoods

As summer slowly releases its muggy grip on the nation’s capitol, I had an opportunity to talk with the Israeli ambassador to the United State, Michael Oren. With the civil war in Syria propelled to front and center, he reminded us that “it’s the neighborhood we live in.”

And how much neighborhood – where we are - matters. Long before 9/11 I worked in the World Trade Center, as we reflect today on the murder of those who perished as the towers burned and collapsed. As bells toll today to evoke memory, so too for Jewish people all over the world was the Shofar sounded last week to usher in a new year that begins with a period both of reflection and commitment.

Fortunate children walk through neighborhoods excited about the new school year, nervous about new teachers, yet faces beaming with possibility. Yet other children, who comprise fully 47% of families on food stamps in the US, face challenges that can seem insurmountable. And in many places like Hama, Maalooula and Al-Qusayr whole neighborhoods have been obliterated.

Yet how can we be other than optimists, leaning forward, working to improve life, trying to bring hope and possibility to more and more children? My involvement with Mundo Verde, a start-up charter school in Washington, DC, reminds me of how much can be achieved when people work hard to create new, open, inclusive, and innovative communities.  (For more on Mundo Verde, see Expeditionary Learning: A New Approach to Sustainability-Focused Education in the new issue of Sustainability.)

Perhaps Russia and America can eliminate chemical weapons in Syria? Perhaps the US Congress will expand rather than reduce SNAP benefits? Perhaps leaders will take heed of the forthcoming IPCC climate change report?

Perhaps what seemed inconceivable yesterday, will tomorrow appear to have been inevitable? After all, change is the only thing we can really say is guaranteed.