Gil Friend

This is the time of year when people assemble their top 10 lists for 2011 -- movies, restaurants, etc, -- and top sustainability stories and trends. Here are mine -- not ranked, not complete, quite subjective, and hopefully rich food for thought for you. (Next time: my predictions for 2012!)

Green China?
Not quite (actually, not by a long shot), but China maintains strong investment in renewable energy and clean tech, even as US energy & climate policy remain mired in, well politics. Not much talked about: China's Circular Economy Law. Its significance depends of course on how seriously it's enacted -- which so far appears to be "not much" -- but as Hunter Lovins points out,

Hypocrisy is the first step to real change. I've talked to Chinese well aware of it, and while not enforced, it is a force in their thinking. I think as China wrestles with the inherent impossibilities of its situation they'll return to it in future days.

Occupy
So much ink has been spilled about Occupy that I'm not going to add much here, except to say that no one (including business leaders, not just political leaders), should underestimate:
- the growing revulsion at the destructive role of money in democracy;
- the emerging culture of open, transparent and engaged... (consider the role of social media in the Arab Spring, and its emerging role in the culture of business);
- the disruptive impact this may yet have on everything.

Obama under-rated & over-rated
The president, like Rodney Dangerfield, "can't get no respect." He both deserves more credit than he gets for many unheralded environmental policy moves (including points for mercury regulation and renewable energy investment) but continues to disappoint on climate and energy policy overall. (I knew, when I decided to vote for him, that this man would inevitably disappoint me -- they all do -- but I didn't expect all the ways he would do it. No doubt he feels he has to choose his battles. But I'd like to see a few real battles, thank you very much.

Competing on sustainability
This is one of the most heartening signs. As companies learn the strategic benefits -- and business imperatives -- of sustainability, and overcome the now boring navel-gazing about the mysteriously elusive business case for sustainability, sustainability becomes a growing contributor to business value, and even a competitive differentiator. Who's got the greener shoes -- Nike, Puma or Adidas? I love that it's not a slam dunk obvious question.

Sustainability is a team sport
Equally important is the growing recognition that collaboration is as important as competition. Multi-company and multi-stakehloder associations (The Sustainability Consortium, Sustainable Apparel Coalition, Outdoor Industry Association, to name just a few, in just one industry) have come together in the recognition that there are some changes that not even big companies can make alone. That can only be done collaboratively -- perhaps most dramatically through the GreenXchange a multi-company alliance formed "to accelerate and scale sustainability-innovation through sharing intellectual property assets." (Watch for much more about "open" next year.)

Ecological Accounting
Speaking of Puma, the domain of Ecological Accounting (or as I like to call it, reality-based accounting) took a huge step forward this year when Puma (with PWC and TruCost) produced an environmental balance sheet and P+L, suggesting what their financial would look like if "nature's services" mattered. (They always have mattered, of course-- even if we haven't known how to value them.) The bottom line, so to speak: the ecological liability was material -- more than 45% of Puma's net earnings -- and Puma's parent company PPR plans to extend the analysis across the rest of its companies this year. (Note to CXOs: This is not just a PR or even a CSR exercise; it's an opportunity -- as are properly done Carbon Footprints and Life Cycle Assessments -- to identify risk and value that your current financial management tools are literally unable to perceive.)

Rise of the CSO
As the Weinreb Group observed in CSO Back Story: How Chief Sustainability Officers Reached the C-Suite,

"the person in charge of corporate sustainability and corporate social responsibility has evoloved, from a largely director level position, to vice president to chief, over the last decade. as the sustainability function crept up the corporate ladder, so has the caliber of the person leading it. Thus we have the title “Chief Sustainability Officer,” which implies the senior-most sustainability leader in the senior-most possible position."

Big bets
Another measure of sustainability's growing business maturity: companies are make bigger business bets on sustainability. The iconic examples of Interface, GE and WalMart (while the latter two still debatable) are joined by SAP, which says it will incorporate "sustainability" in all its products (which it asserts runs 60% of the global economy) within five years.

Renewable Trump Nuclear
Nuclear energy was big news in 2011, and not only because of the many layered Fukshima disaster (technical failure + terrible disaster planning + profound mendacity + political cowardice). In addition, this massively subsidized industry continues to lose orders, market share and price advantage to renewables. Plus, thermal energy generation will become increasingly problematic as temperatures rise; as one example, France has had to power down its reactors because it was unable to cool them.

Decline of stuff and the rise of collaborative consumption
It's too early to write the obituary for our addiction to stuff, but at least it's moving into the category of "everyone knows..." if still in the the category of "no one knows what to do." Some of the drivers:
- the economic downtown, to be sure;
- a growing emotional hunger, in the "developed" world, for things more meaningful than things (and perhaps, in the "developing" world, for a different development path than the one the West has followed);
- a continued trend to dematerialization and servicizing (since, as Dave Gustershaw of Interface puts it, "all things being equal, each kilogram of stuff moved another kilometer means more impact")
- the disruptive influence of the interwebs in enabling collaborative consumption (viz The Mesh, AirBnB, GetAround etc.) which will transfom industries as surely as digital has transformed music, video, retail and so much more.

Next time: My predictions for the sustainability top stories of 2012.

(Meanwhile, you might enjoy these additional top stories lists from Andrew Winston, GreenBiz, Sustainable Business Forum, Warren Karlenzig, Environmental Leader, and Technology Forecasters Inc.

I've long felt than one of the big differences (chasms) is between people who look at the world and see things, and people who look at the world and see pattern.

Here's a beautiful exploration of that idea.

"To Understand is to Perceive Patterns" on Vimeo

Marc Gunther seems to be relishing his role as green curmudgeon (or at least provocateur) over at GreenBiz.com. To judge by the comment stream, he hit a nerve with his recent "In Defense of the Plastic Bag."

Here's my response:

It may seem complicated, Marc, but perhaps it doesn't have to be -- if we ask the right questions. "Paper or plastic?" (or "this plastic or that plastic?") aren't the right questions. Nor is "Should we tax or ban all plastics because some end up as litter?"

No, I don't want to "impose my beliefs on others," but I do want everyone to bear the full costs of their decisions and actions. This challenge of getting the prices right is, I think, at the heart of most of our environmental problems.*

Probably the best way to address the plastic bag problem is extended producer responsibility (EPR) -- have the entities that produce what becomes "waste" be responsible for the costs of dealing with that waste -- rather than imposing those costs on ecosystems and other people. It's worked in many EU countries, as well as Canada and Japan. Natural Logic's white paper, Product Stewardship & Extended Producer Responsibility: Towards a Comprehensive Packaging Recycling Strategy for the US, lays out analysis and strategy for establishing EPR in the US. (The work was commissioned by Coca-Cola, and contributed to by a diverse group of stakeholder; the opinions is presents are Natural Logic's alone.)

* This is a topic which I've been thinking and writing about for a while. See, for example:
Memewatch: Getting the prices right
Get This: Overcoming the Key Barriers to Building a Sustainable Economy
CFOs, Sustainable finance, & Getting the Prices Right
The True Cost Economy: Ecologizing Capitalism
(and my book-in-progress, "Getting the Prices Right," in 2012)

In his latest blog post, veteran journalist Marc Gunther asks Have I fallen in love with Walmart? It's a long, thougthtful piece, responding to an even longer piece in Grist.

"I’ve written dozens of stories about the retail giant, Gunther writes. "...I’ve been critical at times...but most of my coverage of the company’s sustainability effort has been laundatory [sic]."

Now here comes Stacy Mitchell, a smart reporter, with a six-part series in Grist called Walmart’s Greenwash: Why the retail giant is still unsustainable. She assails Walmart for promoting suburban sprawl, making only token efforts to buy renewable energy and selling cheap throwaway stuff. She also faults mainstream environmental groups for focusing “on the small bits of good that Walmart could do—reduce PVC in packaging, for example—while ignoring the much larger consequences of its ever-expanding business model.” She also says that she has been “shocked by just how much of a public relations boost the media have given the company and how little public accountability they have demanded in return.”

Here's the comment I posted at Marc's site:

Thanks for this piece, Marc, and the thoughtful perspective. WalMart’s a mixed bag, to be sure (ain’t we all!), but it’s just way too easy to criticize, and damn hard to transform a large organization, and to get everything right. (Once again, who of any of us has?)

I completely agree with you re “The Sustainability Index” — WalMart’s “100% renewable energy/zero waste/only sustainable products” declaration has probably generated more sustainability awareness in businesses around the country than any single from regulators or NGOs. We’ve seen an immediate and profound impact on the flow of companies that come to us at Natural Logic, and the kind of assistance they’re looking for. WalMart deserves ample credit for moving the agenda at tens of thousands of companies.

But I strongly disagree with you about “Cheap Stuff.” As Dave Gustershaw of Interface is fond of pointing out, each additional kilogram of stuff moved an additional kilometer means (all things being equal) more environmental impact, so the challenge of “sustainable consumption” — and the related challenge of “how can companies make more money selling less stuff?” — are on a very short list of questions at the heart of the matter. (The others: getting the prices right, and escaping the trap of short-term-ism — but more on those another time.) I just don’t buy it when companies say “we’re just responding to consumer demand” and then spend billions to _shape_ that consumer demand.

By the way, why would buying solar “put the company at a competitive disadvantage” when it doesn’t do that for “Kohl’s, Whole Foods Markets, Starbucks and Staples”?

PS: WalMart isn’t us. The “us” who shop there (or don’t) do have substantial impact on what they do, and yes, markets do move business decisions, but it feels just a wee bit too simplistic, in these days of TARP x 11, to suggest that “we’re all one.”

It sometimes seems that books flow into my bedside reading stack faster than they leave it. It's a good problem too have; there are so many good books on the subjects that concern us all. Here are a few of my current favorites - some that I've read, some that I'm reading, all of which are worth your attention.

Infinite Vision: How Aravind Became the World's Greatest Business Case for Compassion.
Pavithra K. Mehta & Suchitra Shenoy.
Aravind sprang from a surgeon's vision of ending curable blindness - without regard to people's ability to pay and without compromising their dignity. It's become the largest provider of eye care on the planet, with ten times the productivity of US eye surgeons, and patient results superior to British National Health Service. But this is not just a book full of heart; it's also an inspiring management case study of how to deliver the goods.

The Great Disruption: Why the Climate Crisis Will Bring On the End of Shopping and the Birth of a New World.
Paul Gilding.
If Infinite Vision is a great inspiration, The Great Disruption is quite a downer. Gilding, businessman and former head of GreenPeace International, is no optimist. He sees global crisis, both ecologic and economic, as unavoidable - but is ultimately hopeful for the human capacity for innovation and cooperation... once we've exhausted all other options.

Walk Out Walk On: A Learning Journey into Communities Daring to the Future Now.
Margaret Wheatley & Deborah Frieze.
Wheatley and Frieze find that capacity for innovation and cooperation at work today in local communities around the planet, and take the reader on a "learning journey" (evoking those that their Berkana Institute conducts) that brings these communities and their work together alive.

Reinventing Fire: Bold Business Solutions for the New Energy Era.
Amory Lovins and Rocky Mountain Institute.
Lovins and his colleagues at RMI present both a vision and a roadmap for getting the US off oil, coal and nuclear by 2050, at a profit, without a dime of government money, and with a Net Present Value of $5 trillion. I haven't checked the math, but I have seen the logic of RMI's time tested guiding principles - systems thinking; market oriented Solutions; end-use/least-cost approach; corporate transformation - deliver the goods again and again.

The Responsible Business: Reimagining Sustainability and Success.
Carol Sanford.
While Lovins and his team have been masters of integrative design in technological systems, Sanford has long been one of the leaders in integrative approaches to corporate strategy and transformation. As she observes, "The biggest challenge for a company that aspires to be a responsibility business is to stop working on parts and start recognizing and working on whole systems."

Sustainability by Design: A Subversive Strategy fot Transforming Our Consumer Culture.
John C. Ehrenfeld
Ehrenfeld, ex of MIT and currently head of the International Society for Industrial Ecology, argues that we're doing "sustainability" all wrong - using band-aids like ecoefficiency to reduce "unsustainability" - but not really building true sustainability - or, as Ehrenfeld prefers to put it, "the possibility that humans and other life will flourish on Earth forever."

Deciding when and whether to print just got a lot easier, thanks to the release today of a new infographic -- Pixel and Print Logic -- from Natural Logic, Domtar Paper and the Institute of Sustainable Communication.

We've all seen that little message at the bottom of emails -- saying, in effect, "you're a bad, thoughtless person if you even think about printing this email." It's not that simple of course. Paper can bring real environmental concerns -- deforestation, soil loss, water impacts, growing waste streams -- but so can use of digital technologies -- carbon emissions (from the energy to run servers, printers, PCs, smartphones, etc), conflict minerals, e-waste, etc. Each resource can be produced and managed in better and worse ways. And each has its place in an environmentally smart information strategy.

So what's a thoughtful, responsible information hound to do? You can't conduct a Life Cycle Assessment (LCA) every time you need to decide. But you can use this simple, light-hearted flow chart – inspired by the legendary What Beer Should I Drink flowchart (and based on Natural Logic's analysis of more than 70 LCAs for Hewlett-Packard) – to help you print responsibly.

I participated last week in Redefining Value: The New Metrics of Sustainable Business, a day long workshop produced by Sustainable Life Media and the Wharton School of Business. I moderated the first half of the day. Here are my opening remarks.

I'm Gil Friend, founder and CEO of Natural Logic Inc. We help companies design, implement & measure profitable sustainability strategies.

Throughout the last 20 years this has included a big focus on metrics. We built Business Metabolics -- probably the first sustainability dashboard -- in 1995, then evolved it into OpenEco.org with Sun Microsystem, and lately with a startup bringing radical transparency to supply chain metrics.

We've done this because metrics are about decision making, not just reporting. Because what companies measure matters, and drives decisions, behavior and results. This is no different than financial metrics; nobody thinks a balance sheet is just something the 10-K or annual report, but too often sustainability metrics are relegated to CSR reports, when they belong on management dashboards.

This leads to some of the key questions we'll consider today: How do we measure what matters? How can we use "new metrics" to make us smarter? All of us, not just leaders, but everyone in the organization. J.M. Juran, one of the fathers of Total Quality Management observed (in 1948) that, "to be in a state of self-control, a person should be provided with knowledge about what he [sic]... is supposed to do, what he is actually doing, and what choices he has to improve results wherever necessary.... If any of these three conditions [is] not met," Juran noted, "a person cannot be held responsible." Unfortunately, in most organizations, one and sometimes all of these conditions is lacking. We fly blind and yet expect performance from people and organizations, even though it's clear from Juran's formulation that most of us are not in a "state of self-control... [and] cannot be held responsible." But if we're to have any chance of success in the battle against climate change, we have to be both self-controlled and held responsible.

Put another way, how can we give people a clear line of sight that connects actions, results and goals? People perform best with it; markets can't work without it.

Chauncey Bell and I observed, seven years ago, that "Business is on a collision course with a set of global shifts that almost no one has adequately prepared for. These inevitable surprises are coming fast. For those who are ready, these shifts will be platforms for change; for those who are not ready, they are traps."

So businesses need to be able to align their own needs, the needs of the planet and the needs of the market. The problem was, and is that "most companies are spending good money on accounting structures and traditional ways of observing the business that have you watching and measuring the wrong things, in the wrong time frames" -- and in ways that overlook material risk and material value.

"The wastes you’re watching, " Chauncey notes, "are not the wastes that will matter in the future. From force of habit you are spending good money accounting for obsolete waste, while overlooking other kinds of waste that are far more costly for you." (Careful. What he means by waste is not what you probably mean.)

This is challenge not just for sustainability leaders but it's especially pertinent for CFOs. With a few notable exceptions, CFOs are mostly new to the sustainability game. At most companies CFOs are peripheral to the sustainability conversation, but central to its -- and their own -- success!

So what can we do about it? How can we measure what matters and use those metrics in WAYS that matter. That's what we'll be discussing today -- to see what we can learn together, how we can build on this, and elevate the body of practice for all of us.

(Here's a summary of the day, with links to the presentations.) And a few of my past writings on the subject:

- Key Sustainability KPIs: the simple, the sobering, the significant

- Generative Feedback

Metrics for Wholeness (podcast)

- EcoMetrics: Integrating Direct and Indirect Environmental Costs into Management Information Systems (PDF: 1998)

I closed the day with these observations:

This has been an full and stimulating day. There are many things I could highlight from the day's presentations, but i'll just mention two that particularly stuck with me.

Paul Herman, CEO of HIPinvestor, asked "what's your most important asset?" This was a smart room, so everyone said "People." "Then where," Paul asked, "are people on your financial statements?" They're a cost and a liability. How can anyone manage a company with metrics that present such a distorted picture of what really matters? (Especially when the 100 best companies to work for have outperformed the S&P500 by 2-3x over the past 10 years?)

Dave Stangis, Vice President, CSR, Sustainability and Community Affairs of Campbell's Soup, brought it down to earth, with a simple, pragmatic approach that has resulted in common sense metrics like growing the percent of revenue delivered by "Better For You" foods. "A goal," Stangis reminded us, "is not a prediction of what you already know you will do." But that raises another challenge -- how to handle the essential role of failure.

It's essential, as we drive relentlessly toward success (and often tie metrics to tie to compensation), that we also allow room for failure. Modern business culture tends to punish failure, quickly and mercilessly. But wIthout failure, there is no success. Ed Land understood this; Land issued a memo to the staff at Polaroid in the early 50 saying that he would fire people who didn't fail enough -- because he understood that an innovation company couldn't succeed if people didn't feel free to try many ideas, and to fail often, while finding the best ones.

Don't we need key metrics to help guide behavior? Maybe. The book of Deuteronomy recounts the final teachings that Moses, just before his death, offered to the children of Israel. After leading them through the wilderness for 40 years, after delivering the principles, laws and social infrastructure on which to build a community, he summed it up very simply: "Do what is right and good."

Paul Herman asked Dave Stangis earlier -- and each of us -- "If you were CEO, what would you do?" I would ask everyone "Why are you working here? What do you most want to do with your job, and this company?" It's a version of the powerful question we ask all our clients: "What are you really here to do?"

Because it's not really all about metrics. As our old pal Al Einstein observed, "Not everything that matters can be measured; not everything that can be measured matters.” Metrics don't tell you what to do, any more than than a business case tells you what to do. They can tell you how well you're doing, but what to do comes from your heart. As does courage.

Reinvent economy of an entire planet. This planet. In one generation. To do this, we need The True Cost Economy: Ecologizing Capitalism.

This was the theme of the panel I shared with Jean Brittingham and Randy Hayes at SXSWeco last week, and of the thoughts I share here. But actually that's not a big enough topic. We have to ecologize economics, not just capitalism, because the problem we face -- disconnection of the human economy from the living systems that sustain it, and the consequences that result -- are endemic in all modern economic systems, and perhaps in the human condition as well. (Matthew Nordan of VenRock drew, the day before, on neuroscience research showing that we are creatures wired for "more" in a world that can no longer sustain endless more.)

But humans are creatures of culture, not only biology, and culture can change. One indispensable change -- which I've seen as central to the sustainability challenge ever since my World Game work in 1972 -- is "getting prices right". Eliminating the subsidies and externalities that seem an inescapable part of modern economic life, and that distort market and minds. Absent getting the prices right, we sustainability warriors are doomed, like Sisyphus, to forever push the boulder uphill, almost to the crest, only to have it roll back down again.

As that under-appreciated progressive Adam Smith observed, some 235 years ago, perfect markets depend on perfect information. But distorted markets, whether distorted by explicit subsidies that transfer tax payments from general funds to selected beneficiaries or by the effective subsidy of pollution delivered by selected beneficiaries to the general body, whether free or controlled, renders good decision making all but impossible.

Consider gasoline. We grumble at having to pay $3-4/gallon in the US, ignorant of a true cost (including environmental impacts, health effects and the military costs of keeping the supply lanes open to the middle east) that's been estimated at $10-20/gallon! If you had to pay $20 or $15 or even $10/gallon, would you be driving the car you're driving today? Would anyone even be making it?

Consider coal. If the global subsidy to the coal industry exceeds its market cap, as some estimates indicate, then the prudent business strategy is to shut the industry down, not continue to prop it up. (And then there's the nuclear industry, still subsidized more than 50 years into its life. But don't get me started.)

How do we end "cheater economics," as Randy Hayes so pithily calls it? Like all change, this will require multiple strategies in multiple venues: activism, consumer preference, policy & regulations, standards & practices, taxes & incentives, voluntary corporate action and innovation. Here a few few specific steps that would help:
- Zero out subsidies -- recognizing that this is more a political issue than an economic one.
- Demand radical, real time transparency - whether for executives, employees, investors, activists. Give people a clear line of sight that connects actions, results and goals. People perform best with it; markets can't work without it
- Bridge the GAPP. Build nature's services into the Generally Accepted Principles and Practices of accounting. And meanwhile, keep two sets of books -- one that follows GAPP, one that puts a price on carbon and ecosystem (as Puma has recently done). At least ask the question: what is our potential risk and exposure if -- when -- these impacts become monetized?
- Get CFOs into the sustainability game. CFOs own risk and value, and can use those reality-based financials as an early warning system make visible hidden risk and value, and to guide business strategy. This is about business, not "CSR".
- Tell the truth about what matters to you. "What do we value," notes Aimée Christensen. So we have to talk abut what we value -- and what we're really here to do, as people and as companies -- and measure that. Because profit (sorry Milton Friedman) is not the purpose of business; it's the consequence. The purpose -- what you're really here to do -- is what animates.

I said at the top that we need to reinvent economy of an entire planet. As I wrote recently, "one man, Steve Jobs, transformed four industries (computers, movies, music, telecommunications) in the last 20 years. What if you took on just one?" Or as John Elkington recently asked, who will be the Steve Jobs of sustainability?

Meanwhile, maybe its time for a campaign to "end cheater economics." Maybe the invisible hand needs an invisible foot.

I was deeply honored last month when I was inducted as inaugural member of the Sustainability Hall of Fame by the International Society of Sustainability Professionals -- both for the honor itself, and for the company I shared. Here's what I said (as best as I can remember) as I accepted the award from Marsha Willard:

All of us stand on the shoulders of others, so it's an exceptional honor for me to be recognized together with those on whose shoulders I've stood. The other inductees have been my teachers and my heroes, and I'm humbled and moved to share this award with them.

I've known Amory Lovins for more than 30 years -- and learned from his physicist's way of thinking, his rigor, and his bold reinventing of how we think about energy.

Karl-Henrik Robert and I have known each other only about 15 years, and I have been grateful each of those years for the unstoppable elegance of the Natural Step framework -- still the most dependable tool in my toolkit.

Bob Willard, maybe only ten years, but speaking of toolkits, Bob has, probably more than anyone, been delivering the tools for making the sustainability business case.

And of course Ray Anderson, who we lost just a few weeks ago, who took all the things so many of us talk about and put them to work at the heart of a multi-billion dollar corporation -- with humility, grace and effectiveness. A prince.

There are many other sets of shoulders to mention, but I'll name just one. I began this work in 1972, when I spent a month at the World Game Workshop with Buckminster Fuller and his organization. In a month long design charrette for the planet, I learned -- I demonstrated for myself, in big picture, whole systems design, and in nitty gritty, down in the weeds analysis -- that there's no necessary barrier to human success on this planet, only our will. I signed on, back then, to contribute whatever I could to (in Bucky's words), "a world that works for 100% of humanity, in the shortest possible time, through spontaneous cooperation, without ecological defense, or the disadvantage of anyone." That's been my guide ever since.

And here we are today, working to transform the economy of an entire planet. This planet. In one generation. I'm honored to be in this work, and honored to be in it with you.

I spoke recently about strategic sustainability to members of the Silicon Valley Leadership Group, a 350-company business association here in the heart of innovation. During the Q&A period, one of the sustainability directors attending asked for a short recipe of what companies should be thinking and doing.

It's telling that even among this group of dedicated sustainability leaders at companies dedicated to sustainability, there are still questions about just how they should proceed. In the interest of giving everyone a leg up, below is my six-ingredient recipe:

1. Think about "What Business Are You Really In?" What's the real value proposition you're offering to your customers? Not the physical artifact you're in the habit of producing, but the actual benefit they gain from using it. That's the business you're really in; now think about how you can deliver that benefit with less footprint, less product -- or no product at all.
2. Think big. Think bold. When problems seem gigantic, the opportunities are gigantic too. The challenge we face -- nothing less than transforming the economy of our entire planet in one generation. -- is huge. And it offers once-a-century economic opportunities as well. We need to reinvent the way we do everything -- energy, transport, buildings... Think about it: one man, Steve Jobs, transformed four industries (computers, movies, music, telecommunications) in the last 20 years. What if you took on just one?
3. Be realistic. Not in the spirit-limiting, imagination-sapping way most people mean, but simply this way: Pay attention to physical reality -- and to what's required for real solutions, not band-aids. Heed the laws of nature, distilled from the nearly 4 billion years of open source R&D conducted for us by earth's living systems. You can't repeal them, and you can't break them; you can only break yourself against them. So you might as well go along with them.
4. Everyone, Everything, Early. This aphorism from Bill Reed -- Engage Everyone, and consider Everything, as Early in the process in the design process as possible -- is key to what W. Ross Ashby called "requisite variety" some 60 years ago, and is in turn the key to effective integrative design> and to innovation that costs less, not more, than business as usual.
5. Measure what matters -- including your carbon footprint, resource productivity and product-to-non-product ratio. And keep two sets of books -- again, not in the sense that some people mean, but in this sense: one set using standard accounting practices, and one incorporating full ecological accounting, as Puma recently did (and discovered a potential 25 percent hit to their EBITDA).
6. Provide a clear line of sight that connects each person's actions with their impacts, and with the company's actions, impacts and goals. When people can see the impacts of their actions they experiment and learn, and do a much better job of managing themselves. The process: generative feedback. The result: more engagement, faster innovation, flatter hierarchies, more responsive organizations -- what Ernest Lowe gracefully dubbed "autonomy in a coherent whole" -- which invites another recipe -- this one for effective self-organization and self-management in a world moving far too fast for top down organizations to survive and thrive.

Versions of this article have been published at GreenBiz.com and in Natural Logic's newsletter. Subscribe here.

Video of my plenary at SOCAP11 (Social Capital Markets) conference with Penelope Douglas, Jeffrey Hollender and Michael Kieschnick. We share our perspectives on purpose, commitment and impact, and our future directions. (45m video)

Making Your Life Count: Four people with a history of making a big difference with their careers talk about their new directions and decisions, and how personal choices intersect with the needs of the world.

Penelope Douglas is Senior Executive & President of the Board of Mission Hub LLC & Social Capital Markets, and former CEO of Pacific Community Ventures. Jeffrey Hollender is founder (and former CEO) of Seventh Generation and founder of the American Sustainable Business Council. Michael Kieschnick, is founder and president of Working Assets and Credo Mobile. (For those of you who don't know, I'm president and CEO of Natural Logic Inc. ;-)

We lost a giant this week. An insipration. A friend.

There have been many moving and eloquent tributes. Here's mine.

Ray Anderson was a man of big heart, generous spirit, penetrating vision, fierce commitment.

He inspired and taught so many - including me - that yes, we could dream our dreams, and even bigger dreams. AND bring them in to being in the world. Even in the supposedly cold, hard, just-the-facts ma'am world of business.

Ray was able to show, at Interface, that sustainable business leadership could be bold, not tentative, and that it could be profitable.

For all his visibility, so much of what Ray did was invisible. But indispensable. (Few people know that Ray was one of the people that Walmart CEO Lee Scott turned to shape Walmart's pivotal sustainability initiatives.)

I've heard Ray speak dozens of times -- every chance I got, really -- starting in 1994 (at Pam Lippe & James Nixon's pioneeing sustainable economy conference in New York, and soon after at U of Oregon) when the spear in the chest story was still fresh, and "Tomorrow's Child" was already the culmination of his talk, as it would remain for the next decade and a half.

I watched his journey unfold, as he brought in his "dream team" of Benyus, Browning, Fox, Hawken, Lovins, Lovins, McDonough, Piccard, Porritt, Quinn, Robèrt, Stahel to help figure out the HOW of the WHAT that was increasingly clear. As he turned to The Natural Step to help build shared framework that could get the entire Interface organization aboard -- down to the fork lift drivers.

I watched him in the film The Corporation (actually I watched him hold the film together), and thought "This man is a prince" -- in the very best, archteypal sense of the word.

We've been in retreat together, with the Tipping Point Network, and with his leadership team, and it was clear that what you see is what you get.

Most recently, we were together at the Sustainable Industries breakfast in San Francisco -- he the keynote, me introducing him and handling the Q&A. He recounted his journey through the motif of "What if a company...?", chronicling the successes down to the dollars and tons, concluding "I know this is possible, since this is my company, and we have done this. I told him then that I'd heard him speak 20 times over the past decade and a half, and that it kept getting better and better.

A lot of executives get hung up on "the business case" for sustainability. Not Ray. He understood (as I've written before) that the business case doesn't tell you what to do; your heart does. "What's the business case," Ray would ask, "for destroying the planet?"

Tuesday evening, as many of us were reeling from the loss, a friend asked "With Ray gone, who will step up now?" I knew immediately how I would answer her, and posted this video:

Who? Me. And you.

Marc Gunther of greenbiz.com offered up a well written and provocative invitation this morning: Let's Do Away With CSR!

Not merely the words and the idea but the infrastructure: CSR departments, CSR reports, CSR conferences and CSR executives.

And, as long as we're at it, let's think about ditching the triple bottom line, the pursuit of shared value, corporate citizenship and especially, yuk, the idea that stakeholders deserve a say in how to run a business.

All of these are, at best, distractions and, at worst, ways of thinking about business that create a separation between a company's core business and its impact on the world. Both ought to be life-enhancing. No more and no less.

"What are you - and your business - really here to do? What is its purpose for being - and yours for working there? What is its fundamental value proposition in the world?"

"The biggest challenge for a company that aspires to be a responsibility business is to stop working on parts and start recognizing and working on whole systems."

"The strongest approaches are systemic rather than piecemeal, strategic rather than merely operational, integrated with the business agenda rather than isolated as 'merely EH&S,' focused on meeting human needs. The boldest approaches embrace the challenge of transforming industrial society, with products, services and whole businesses that not only reduce, but perhaps eliminate or even reverse, impact on the environment: cars that clean the air; factories that clean the water; buildings - and cities - with 'zero ecological footprint'; companies that make more money selling less 'stuff'."

Of course it's one thing to say this, and quite another to do it. "How," I asked in The Truth About Green Business, "do you 'invest in purpose'? How do you make it practical? And profitable?"

Keep your eye on the ball. Make your purpose visible and present in your everyday conversations. Serving your company's purpose should be a continuous, systematic practice, and all too often, companies visit the question of purpose only in retreats or mission statements.

Put plans, alliances, and designs to the "Purpose Test." Does this option move you toward or away from your purpose? Identify activities that don't fit your purpose and drop or change them.

But don't drop the profit test. You won't stay in business-no matter how noble your purpose-if you can't pay the bills. (Just remember that paying the bills isn't the purpose of your business.)

Tell the truth-to your employees, stakeholders, and customers- and yourself. This means clearly communicating your purpose, truthfully measuring whether your actions and results support that purpose and bringing them into alignment when they don't.

Don't compromise. There'll be plenty of people who'll tell you that purpose is pie in the sky and will cost you money. I don't believe them and neither do the best business leaders I know.

• to strategic sustainability roadmaps that provide a comprehensive view of how sustainability touches every part of the enterprise;


• to shared frameworks that activate dozens - or thousands - of eyes and ears in discovery and innovation toward a common purpose;


• to feedback systems that give every employee a clear line of sight that connects their decisions and actions, and the impact of those actions, on the goals, impacts and value of the company.
  

From Wendell Berry, Why I am NOT Going to Buy a Computer - Wendell Berry

1. The new tool should be cheaper than the one it replaces.
2. It should be at least as small in scale as the one it replaces.
3. It should do work that is clearly and demonstrably better than the one it replaces.
4. It should use less energy than the one it replaces.
5. If possible, it should use some form of solar energy, such as that of the body.
6. It should be repairable by a person of ordinary intelligence, provided that he or she has the necessary tools.
7. It should be purchasable and repairable as near to home as possible.
8. It should come from a small, privately owned shop or store that will take it back for maintenance and repair.
9. It should not replace or disrupt anything good that already exists, and this includes family and community relationships.

A client recently asked for a collection of "short" readings" as prep for an innovation/strategy retreat we led for their 60 top managers. Here's what we suggested. (It's not comprehensive, in that it's focused somewhat on their particular food/ag industry concerns, but hopefully worthwhile for you too.)

Short readings

Gil Friend, CEO Natural Logic Inc
Making the Business Case for Sustainability

Gil Friend, New Bottom Line (short articles):
A Sustainability Cookbook
Product Regulation and Future Markets
Risk, CFOs, and the Sustainability Business Case
Sustainability - At the tipping point?

Short videos:
Ray Anderson, CEO Interface Global
The Business Logic of Sustainability (Video on TED.com)

Longer readings:

Paul Hawken, Amory Lovins, Hunter Lovins
Natural Capitalism, Chapter 1 (21 pg PDF; big picture overview)

Donella Meadows
Places to Intervene in a System (21 page PDF, or this shorter summary)

Gil Friend, CEO Natural Logic Inc
The Truth About Green Business

Longer videos:

Gil Friend
The Truth About Green Business, and the Three Barriers to Building a Sustainable Economy (YouTube, 8/18/09)

This client is in agribusiness, so we also included this short article:

Nicolette Hahn Niman (Livestock Rancher, Lawyer, and Author, Righteous Porkchop: Finding a Life and Good Food Beyond Factory Farms)
Avoiding Factory Farm Foods: An Eater's Guide

and this short video:

Fred Kirschenmann, Leopold Center
The Future of Agriculture - An Introduction (video)

PS: Here are a couple of other "best sustainability book" lists -- one from Cambridge University, and one from TriplePundit.com's readers.

Enjoy! And let us know what your favorites are!