Dear EarthTalk: I've heard of the slow food movement, but what is “slow money” all about?
-- Phil Nimkoff, New York, NY

“Slow Money” is the name for a movement started by socially conscious investing pioneer and author, Woody Tasch, who essentially borrowed the conceptual framework of “Slow Food”—whereby participants eschew convenience-oriented “fast” foods, instead filling up their plates with traditional, unprocessed and, ideally, locally produced foods—and applied it to personal finance and investing. As such, Slow Money is dedicated to connecting investors to their local economies by marshaling financial resources to invest in small food enterprises and local food systems.

Woody Tasch

Tasch’s vision for Slow Money, now not just a concept but also a non-profit organization, seeks nothing less than a complete overhaul of the way we think about and spend our money, channeling much more of it into producing healthy local food, strengthening local communities instead of multinational corporations, and restoring our flagging economy in the process. Instead of venture capital bankrolling far flung high tech start-ups, Tasch hopes to see “nurture capital” funding local merchants and producers who, in turn, plug half of their profits back into their communities, ensuring one small local virtuous circle that values soil fertility, carrying capacity, a sense of place, care of the commons, diversity, nonviolence, and cultural, ecological and economic health as much as financial return. Tasch hopes to get there by persuading a million Americans to invest at least one percent of their assets in local food systems by 2020.

Tasch started Slow Money in November 2008 after the publication of his book, Inquiries into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered. Hitting the road to promote the book and the nascent movement in 2009, he was able to attract 450 intrigued investors, farmers and other entrepreneurs to Santa Fe, New Mexico to trade ideas at a three-day gathering. “We just wanted to see who would show up, but four of the small food enterprises that presented raised an aggregate of $260,000,” says Tasch. Tasch then organized another event for some 600 attendees the following June in Shelburne, Vermont. Investors there poured $4.2 million into 12 more producers, and that’s when Tasch knew he was really on to something. More than 1,000 people converged in San Francisco for the third event in October 2011, and Tasch expects untold amounts of “slow capital” to be changing hands for the better as a result.

Whether or not you have money to invest in Slow Money’s virtuous circles, you can show your support by visiting the group’s website and electronically signing the organization’s Principles, a list of six core beliefs shared by the Slow Money community. Or if you have just $25, you could park it with the organization’s Soil Trust, which will seed small food enterprises that promote soil fertility in locales from coast to coast. Tasch sees the Soil Trust as key to opening up the Slow Money concept to all of us and achieving the group’s goal of getting a million Americans involved in the movement over the next decade.

Another key to achieving Tasch’s goal is growth of leadership at the local level. To that end, a dozen autonomous local chapters have sprung up nationwide, with more sure to come as word gets out. The local groups have already gifted or lent hundreds of thousands of dollars to entities working to improve their own community “foodsheds.” Now we all have a way to truly put our money where our mouths are.

EarthTalk® is written and edited by Roddy Scheer and Doug Moss and is a registered trademark of E - The Environmental Magazine (www.emagazine.com). Send questions to: earthtalk@emagazine.com. Subscribe: www.emagazine.com/subscribe. Free Trial Issue: www.emagazine.com/trial.

A new study by researchers at Harvard Business School and London Business School concludes that companies which have voluntarily embraced a sustainable business culture over many years “significantly outperform their counterparts over the long-term, both in terms of stock market and accounting performance.”

The study compares a portfolio of 90 “High Sustainability” organizations that have adopted a substantial number of environmental and social policies since the early to mid-1990s with a similar number of “Low Sustainability” companies that have adopted almost none of those policies.  Financial performance of the two groups is tracked for an 18-year period through the end of 2010.

“We document that sustainable firms are fundamentally different from their traditional counterparts with respect to their governance structure, the extent of stakeholder engagement, the extent of long-term orientation in corporate communications and investor base, and the measurement and disclosure of nonfinancial information and metrics,” the study says. “This is an important finding because it suggests that the adoption of these policies reflects a substantive part of corporate culture rather than purely greenwashing and cheap talk.”

The study – The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance – was authored by Robert G. Eccles, Professor of Management Practice at Harvard Business School; Ioannis Ioannou, Assistant Professor of Strategic and International Management at London Business School; and George Serafeim, Assistant Professor of Business Administration at Harvard Business School.

Performance Metrics

The authors report that an investment of $1 in the beginning of 1993 in a value-weighted portfolio of High Sustainability firms would have grown to $22.6 by the end of 2010, based on market prices.  In contrast, a similar investment in a value-weighted portfolio of Low Sustainability firms would have grown to only $15.4 by the end of 2010.

Using Return-on-Equity (ROE) accounting metrics, the study finds that an investment of $1 in the beginning of 1993 in book value of equity in a value-weighted portfolio of High Sustainability firms would have grown to $31.7 by the end of 2010, compared to only $25.7 for Low Sustainability firms.

Using Return-on-Assets (ROA) analysis, a $1 investment would have resulted in assets in a value-weighted portfolio of sustainable firms growing to $7.1 over an 18-year-period, compared to only $4.4 for a portfolio of traditional firms.

An equal-weighted portfolio of High Sustainability firms also outperformed a portfolio of traditional firms, according to the financial analysis.

Culture of Sustainability

At companies with sustainable business policies, the authors write, boards of director “are more likely to be responsible for sustainability and top executive incentives are more likely to be a function of sustainability metrics.”  In traditional firms, the study says, executive compensation based on short-term metrics “may push managers towards making decisions that deliver short-term performance at the expense of long-term value creation. Consequently, a short-term focus on creating value for shareholders alone may result in a failure to make the necessary strategic investments to ensure future profitability.”

“Firms in the High Sustainability group might outperform traditional firms because they are able to attract better human capital, establish more reliable supply chains, avoid conflicts and costly controversies with nearby communities, and engage in more product and process innovations in order to be competitive under the constraints that the corporate culture places on the organization,” the study says.

The study concludes:

Overall, we find evidence that firms in the High Sustainability group are able to significantly outperform their counterparts in the Low Sustainability group. This finding suggests that companies can adopt environmentally and socially responsible policies without sacrificing shareholder wealth. In fact, the opposite appears to be true: sustainable firms generate significantly higher profits and stock returns, suggesting that developing a corporate culture of sustainability may be a source of competitive advantage for a company in the long-run. A more engaged workforce, a secure license to operate, a more loyal and satisfied customer base, better relationships with stakeholders, greater transparency, a more collaborative community, and a better ability to innovate may all be contributing factors to this potentially persistent superior performance, even in the very long term.

In their final analysis, the authors pose several questions that are left unanswered: “What is the optimal degree of a culture of sustainability under various circumstances? Since sustainability involves tradeoffs, both across financial and nonfinancial objectives, and between nonfinancial objectives themselves, the firm cannot optimize across all of them. Choices need to be made.”   And, “since the choices a firm makes are dependent on the overall societal context, how will a culture of sustainability evolve as society evolves?”

Executives responsible for sustainability and corporate social responsibility (CSR) programs at large companies are overwhelmingly optimistic that those initiatives will be part of the “core strategies and operations” of global businesses in the next five years, according to a new survey.

Top sustainability and CSR priorities for those companies in the year ahead, the survey found, were human rights and workers’ rights, climate change, and the availability and quality of water on a global basis.

The survey was based on data from 498 professionals representing more than 300 member companies of BSR, a non-profit global membership and consulting organization that focuses on CSR and sustainability issues; some two-thirds of BSR members are large firms with annual revenue of $1 billion or more.  The results were released in San Francisco at the organization’s annual conference, with about 1,000 participants from more than 30 countries in attendance.

Despite a poor economy, large global businesses “are maintaining, if not extending, their commitments to sustainability,” said BSR President and CEO Aron Cramer.  According to Cramer, corporate managers are concluding that sustainability initiatives help cut costs and save money, particularly in environmental programs; drive “innovation” of new products and business models; and help to “future-proof” overall corporate strategy.

Executives polled in the survey said their biggest current leadership challenge is the integration of sustainability into core business functions.  While more than two-thirds reported that their companies’ communications functions (corporate communications and public affairs) were engaged in CSR/sustainability, far fewer reported engagement by critical operational functions such as investor relations (38%), human resources (37%) and finance (18%).

According to the survey, executives continue to acknowledge that the public does not have a high degree of trust in business, with only 2% sensing “a great deal of trust” from the public. To improve that situation, executives said, the two most important actions their companies should take are to “increase transparency of business practices” (55%) and “measure and demonstrate positive social and environmental impacts” (51%).

Among top subject area priorities, the survey found “a sizeable increase” in interest around water availability and quality over the past 12 months, with 54 percent noting it as a priority, up from 47 percent last year.  Other top priorities were human rights (65%), climate change (63%) and workers’ rights (61%).  BSR’s Mr. Cramer said increased interest in human rights and worker’s rights this year may have been driven by the release in July of the UN’s Guiding Principles on Business and Human Rights.

When asked to "rate your outlook regarding the extent to which global businesses will embrace CSR/sustainability as part of their core strategies and operations in the next five years," 22 percent of the executives said they were "very optimistic" and 62 percent "somewhat optimistic" that would happen.

It’s illogical – and quite myopic – that many of the nation’s largest institutional investors refer to shareholder-sponsored resolutions addressing material topics such as climate change, resource constraints and environmental stewardship as “special interest,” “non-routine” or involving “special circumstances.”

The opposite is in fact the case. We strongly agree with David Lubin and Daniel Esty’s contention in a recent Harvard Business Review article that sustainability is a core driver of competitive business strategies. Sustainability issues present both opportunities for competitive advantage and risks that, left unmanaged, will cause a company to lag its sector. If companies aren’t addressing sustainability they won’t be producing long-term value for their shareholders.

The financial numbers back this up: A review of 36 studies by Mercer Investment Consulting shows strong linkages between ESG (environmental, social and governance) integration and positive investment performance. “Eighty-six percent of the studies are neutral or positive,” Mercer’s Jane Ambachtsheer told the CalPERS Board of Directors in August.

With this in mind, Ceres recently unveiled the new and detailed Ceres Guidance: Proxy Voting for Sustainability to a Council of Institutional Investors breakfast in Boston. Our guidelines are a tool. But more importantly, they launch a serious effort to get mainstream investors moving now – immediately – to assert their prerogative, as part of their fiduciary duty, on these issues. Ceres, which coordinates the $10 trillion Investor Network on Climate Risk, has the partners in its network to leverage this initiative.

The guidance includes:

- Ceres’ set of Proxy Voting Sustainability Principles covering governance, social issues, environmental issues and general sustainability topics like “Management Accountability for Sustainability Goals” and “Adoption of Specific Environmental Performance Goals and Measurements.”

- Accompanying guidance on how to cast votes on particular sustainability resolutions. For example, when faced with a resolution that proposes independent directors, the guidance advises voting for this proposal applying the Proxy Voting Sustainability Principle of “Loyalty” to shareowners. When faced with a resolution calling for a link between executive compensation and sustainability performance, the guidance advises voting for this proposal applying its “Management Accountability for Sustainability Goals” principle.

- A compilation of sustainability resolutions from recent proxy seasons and the vote counts on these resolutions from the 2010 season. Surprising examples indicative of sustainability trends include a 60.7 percent vote at Sprint on a resolution requiring the company to account for both its direct and indirect political spending and a 53 percent vote requiring coal producer Massey Energy to set greenhouse gas emission reduction targets.

- A compilation of sample proxy voting guidelines already being used by leading investors around the world. Guideline language from big pension funds like Florida’s State Board of Administration on water scarcity and proxy access are highlighted next to guideline examples from the AFL-CIO on performance based equity compensation, TIAA-CREF on charitable contributions, SRI funds like PaxWorld on workplace health and safety and more.

Investors who adopt the Proxy Voting Sustainability Principles will be better positioned to vote consistently and responsibly on the 700-plus sustainability resolutions now being filed with US companies each year. They can adopt these principles as a policy to guide their proxy voting consultants or as a supplement to other proxy guidelines. Pensions funds and other asset owners can similarly press their asset managers to use these principles in voting their proxies. For those developing proxy guidelines for the first time, these principles can provide the framework for shaping a comprehensive set of corporate governance guidelines.

The resolutions are categorized so that investors can determine whether their existing proxy voting guidelines are sufficiently specific to create consistent voting outcomes on these resolutions. The list of common resolutions can also be used as a checklist for investors who wish to ensure that their existing or new proxy guidelines will comprehensively cover sustainability and governance issues arising in the future.

Lastly, and perhaps most importantly, the Ceres Guidance includes more than 75 leading examples of proxy guidelines that asset owners and asset managers can consider as they re-visit their own guidelines and policies. The sample language from public pension funds, asset managers, socially responsible investment funds, labor unions, and foundations covers key sustainability topics such as climate change, water availability, broad environmental risks, ESG-driven executive compensation and board of director governance.

Our message to asset managers, asset owners and voting fiduciaries who have yet to incorporate specific mention of the various sustainability issues into their proxy voting guidelines is clear: Now is the moment to act. You cannot defer to the opinion of specific management bodies in deciding how to vote on issues that will help determine business success or failure and significantly impact long-term value creation in the coming years.

And if you fail to specifically address these issues in your guidelines, you run a serious risk of breaching your fiduciary duty by voting inconsistently or failing to vote on resolutions of critical importance to the companies you own and the shareholders or beneficiaries to whom you owe your fiduciary duty.

Sustainability will not wait. Climate change, water constraints, human rights and labor issues, new rules for corporate behavior or for governance and stakeholder treatment will simply not be ignored in a globalized economy where environmental, economic and social developments move at lightning speed – along with news of corporate failure and its attendant bottom-line and reputational damage.

The opportunity to promote key governance and sustainability reforms at large public companies – including reforms that might have helped avert the ongoing financial crisis – is a key competitive opportunity for those with their eyes open. Investors are increasingly watching – the rise in both the number and vote percentages of recent sustainability resolutions is testament to that. With our new guidance we’re confident they’ll be watching even more.

Kirsten Spalding is the California Director for Ceres. She works with members of the Investor Network on Climate Risk on their initiatives and represents Ceres on the West Coast for all Ceres programs.  Prior to joining Ceres, she served as Chief Deputy Treasurer under California Treasurer Phil Angelides and Director of the Treasurer’s environmental financing authorities.

This article was first published on the Harvard Law School Forum on Corporate Governance and Financial Regulation and is re-published with the author's permission.

Dear EarthTalk: What’s the latest in regard to putting limits on greenhouse gas emissions in the U.S.? Is there any hope that Obama can get something done? -- Bradley Johnson, Helena, MT

Our best hope to date was 2009’s American Clean Energy and Security Act (ACES), a bill that called for the implementation of a “cap-and-trade” system to limit carbon dioxide emissions by capping overall emissions and allowing polluters to buy or sell greenhouse gas pollution credits—similar to what the European Union has been doing since 2005 to successfully reduce its own emissions—depending upon whether they were exceeding established limits or had succeeded in coming in below them.

According to the bill, U.S. businesses needing to pollute more could buy emissions credits on the open market; those able to reduce emissions could sell their pollution credits on the same trading floor. Thus there is a built-in incentive to reduce emissions: If you exceed pollution limits you have to keep buying costly credits; and if you can get below limits you can profit from the sale of credits for the difference.

Among the bill’s key provisions was a 17 percent reduction in greenhouse gas emissions below 2005 levels by 2020, with a mid-century goal of an 80 percent reduction. Also, billions of dollars would have gone to initiatives bolstering green transportation, energy efficiency and related research and development. The bill was approved by the House in June 2009 by a narrow 219-212 vote. But Senate Democrats decided they didn’t have enough votes to get a version of the bill passed, and tabled the discussion.

While ACES may not have made it into the law books, its passage by the House was significant as it represented the first time the legislative branch called for sweeping climate legislation. Also, the bill’s provisions served as a guideline for U.S. negotiators heading to Denmark later in 2009 for the COP15 international climate talks (although in the end nothing binding was agreed upon there).

Then, in May 2010 Senators John Kerry and Joe Lieberman unveiled their own cap-and-trade climate bill for the Senate. Dubbed the American Power Act, it aimed to reduce overall U.S. greenhouse gas emissions by similar amounts as ACES. But with the nation still reeling from the effects of BP’s Gulf oil spill—the American Power Act include provisions for offshore drilling—and Senate Republicans leery of any climate legislation, the bill failed to make it to a floor vote. Some point the finger at a handful of Democratic Senators from coal-producing states for not supporting their party colleagues. Others say Obama wasn’t advocating strongly enough despite his campaign rhetoric on the topic.

“The best one could plausibly hope for in the next Congress, assuming only modest Republican gains, is some sort of weak cap on utility emissions, possibly with some weak oil saving measures, though that would still require Obama to do what he refused to do under more favorable political circumstances—push hard for a bill,” writes commentator Joe Romm of Think Progress, a liberal political blog. Romm adds that it’s inconceivable to think the next Congress would even contemplate strong climate or clean energy legislation “without Obama undergoing a major strategy change and taking a very strong leadership role in crafting the bill and lobbying for the bill and selling it to the public.”

EarthTalk® is written and edited by Roddy Scheer and Doug Moss and is a registered trademark of E - The Environmental Magazine (www.emagazine.com). Send questions to: earthtalk@emagazine.com. Subscribe: www.emagazine.com/subscribe. Free Trial Issue: www.emagazine.com/trial.

Dear EarthTalk: Isn’t it a waste that we buy water in plastic bottles when it is basically free out of our taps? Even health food stores, which should know better, sell it like crazy. When did Earth’s most abundant and free natural resource become a commercial ‘beverage’? -- A. Jacobs, via e-mail

Bottled water has been a big-selling commercial beverage around the world since the late 1980s. According to the Worldwatch Institute, global bottled water consumption has more than quadrupled since 1990. Today Americans consume over 30 billion liters of water out of some 50 billion (mostly plastic) bottles every year. The Beverage Marketing Association reports that in 2008 bottled water comprised over 28 percent of the U.S. liquid refreshment beverage market. The only bottled drinks Americans consume more of are carbonated sodas like Coke and Pepsi.

And frankly, yes, it is a ridiculous waste that we obtain so much of our drinking water this way when it is free flowing and just as good if not better for you right out of the tap. According to the Earth Policy Institute (EPI), some 2.7 million tons of petroleum-derived plastic are used to bottle water around the world every year. “Making bottles to meet Americans’ demand for bottled water requires more than 1.5 million barrels of oil annually, enough to fuel some 100,000 U.S. cars for a year,” says EPI researcher Emily Arnold. And just because we can recycle these bottles does not mean that we do: The Container Recycling Institute reports that 86 percent of plastic water bottles in the U.S. end up as garbage or litter.

The financial costs to consumers are high, too: According to the Environmental Working Group (EWG), bottled water costs up to 1,900 times more than tap water. And the Natural Resources Defense Council (NRDC) reports that 90 percent or more of the money consumers shell out for it pays for everything but the water itself: bottling, packaging, shipping, marketing, other expenses—and, of course, profits.

EWG is particularly appalled at the lack of transparency by leading bottled water sellers as to the sources of their water and whether it is purified or has been tested for contaminants. According to a recent survey by the group, 18 percent of the 173 bottled waters on the U.S. market today fail to list the location of their source; a third disclose nothing about the treatment or purity of the water inside their plastic bottles.

“Among the ten best-selling brands, nine—Pepsi’s Aquafina, Coca-Cola’s Dasani, Crystal Geyser and six of seven Nestlé brands—don’t answer at least one of those questions,” reports EWG. Only Nestlé’s Pure Life Purified Water “discloses its specific geographic water source and treatment method…and offers an 800-number, website or mailing address where consumers can request a water quality test report.”

EWG recommends that consumer resist the urge to buy bottled water and go instead for filtered tap water. “You'll save money, drink water that’s purer than tap water and help solve the global glut of plastic bottles,” the group advises, adding that it supports stronger federal standards to enforce consumers’ right to know about what’s in their bottled water besides water. Until that day comes, concerned consumes should check out EWG’s Bottled Water Scorecard, a free website that provides information on various bottled water brands, where they originate and whether and how they are treated to remove contaminants.

EarthTalk® is written and edited by Roddy Scheer and Doug Moss and is a registered trademark of E - The Environmental Magazine (www.emagazine.com). Send questions to: earthtalk@emagazine.com. Subscribe: www.emagazine.com/subscribe; Free Trial Issue: www.emagazine.com/trial.

One of my ongoing professional amusements involves what I call “The Name Game” – trying to reach agreement with colleagues on what to call the field in which we work.

Michael Porter

Corporate Social Responsibility (CSR) is the longest-standing and still most commonly used term, certainly on a global basis.  For lots of reasons, I prefer a variant of that: Corporate Responsibility.  Still other colleagues, especially in the U.S., embrace Corporate Citizenship.  Sustainability has gained in popularity in recent years.  And then there’s ESG – representing Environmental, Social and Governance issues.

New terms, and variations of existing terms, emerge with regularity.  Individuals and organizations embrace a particular definition because that definition suits their unique culture and goals.

Most terms, however, have one thing in common.  They hold that business and societal interests are not mutually exclusive; in broad terms, what’s good for society is good for business.  Therefore, business has a vested interest in addressing society’s challenges.

You might call it “shared value” – in fact, that’s exactly the term coined and suggested by Harvard Business School professor Michael Porter and Mark Kramer, co-founder with Porter of the FSG social impact consulting firm.

In the cover story of the current issue of the Harvard Business Review – The Big Idea: Creating Shared Value - Porter and Kramer urge business leaders to recognize that shared value is not "about ‘sharing’ the value already created by firms—a redistribution approach. Instead, it is about expanding the total pool of economic and social value.”

Companies must take the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core.

The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.

Porter and Kramer first addressed the theme of “shared value” in a December 2006 article in the Harvard Business Review, Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility.

In their current article, Porter and Kramaer say there are three distinct ways to create shared value: “by reconceiving products and markets, redefining productivity in the value chain, and building supportive industry clusters at the company’s locations.”

“The concept of shared value resets the boundaries of capitalism,” they write. “By better connecting companies’ success with societal improvement, it opens up many ways to serve new needs, gain efficiency, create differentiation, and expand markets.”

Companies employing shared value strategies, according to the authors, include Unilever, Nestlé, Walmart, GE and Johnson & Johnson.

Shared value is a provocative take on what’s happening – and, more importantly, what could happen – when the interests of business and society are aligned.  Porter and Kramer’s article probably won’t resolve the perennial corporate responsibility “Name Game” question, but it is a challenging and valuable analysis, well worth the read.

Photo courtesy of the World Economic Forum.

This article was first published on January 12, 2011.

Requiring that companies report on their environmental, social and governance (ESG) initiatives leads to broad improvement in socially responsible management practices, according to new academic research.

A working paper based on the research - The Consequences of Mandatory Corporate Sustainability Reporting by Ioannis Ioannou of the London Business School and George Serafeim of the Harvard Business School – concludes “that sustainability reporting not only increases transparency but can also change corporate behavior.”

According to the researchers, “mandatory disclosure of sustainability information leads to a) an increase in the social responsibility of business leaders, b) a prioritization of sustainable development, c) a prioritization of employee training, d) more efficient supervision of managers by boards of directors, e) an increase in the implementation of ethical practices by firms, e) a decrease in bribery and corruption, and f) an improvement of managerial credibility within society.”

The researchers applied an econometric model to data from 58 countries regarding laws and regulations that mandate a minimum level of disclosure on environmental, social, and governance matters. These ranged from the Sarbanes-Oxley Act in the U.S. to the King Code of Governance Principles for South Africa.

The paper notes a widespread increase in reporting of non-financial information, mostly on a voluntary basis, over the last decade.  According to the Global Reporting Initiative (GRI), only 44 firms followed GRI guidelines to report sustainability information in 2000. By 2010, the number of organizations releasing sustainability reports grew to 1,973.

“Disclosure of ESG information forces companies to manage these matters effectively in order to avoid having to disclose bad ESG performance to their multiple stakeholders,” the working paper states.

“To our knowledge, this study is the first to show that mandatory sustainability reporting may effectively promote socially responsible management practices and may improve perceptions of corporate social responsibility by stakeholders,” the researchers write. “These results are potentially economically important because socially responsible managerial practices could enhance the competitiveness of a country by generating higher levels of trust in business and its leaders.”

The working paper concludes: “An implication for regulators is that if they want companies to perform better on ESG metrics then reporting could be a useful means to achieve this objective. An implication for companies is that reporting could change the way they conduct business. If better ESG performance provides a competitive advantage and leads to higher economic value, as it has been argued…then reporting could enhance the economic value produced by a firm.”

This article was first published on April 27, 2011.

Dear EarthTalk: Some friends of mine were talking about a book called “Plan B” that proposes a plan for rescuing the environment and ending poverty around the world. Is it a realistic plan or just some utopian pipe dream? -- Robin Jackson, Richmond, VA

What started as a book has grown into a movement known as “Plan B” which presents a roadmap for achieving worldwide goals of stabilizing both population and climate. According to Lester Brown, author of the 2003 book, Plan B (and three subsequent updates) and founder of the non-profit environmental think tank, Earth Policy Institute, the plan is based on replacing the fossil-fuel-based, automobile-centered, throwaway economy with a new economic model powered by abundant sources of renewable energy.

Brown argues for transportation systems that are diverse and aim to maximize mobility, widely employing light rail, buses and bicycles. “A Plan B economy comprehensively reuses and recycles materials,” he says. “Consumer products from cars to computers are designed to be disassembled into their component parts and completely recycled.”

Brown even proposes a budget for eradicating poverty, educating the world’s youth and delivering better health care for everyone. “It also presents ways to restore our natural world by planting trees, conserving topsoil, stabilizing water tables, and protecting biological diversity,” says Brown. “With each new wind farm, rooftop solar water heater, paper recycling facility, bicycle path, marine park, rural school, public health facility, and reforestation program, we move closer to a Plan B economy.”

Plan B is an integrated program with four interdependent goals: cutting net carbon dioxide emissions 80 percent by 2020, stabilizing population at eight billion or lower, eradicating poverty, and restoring the Earth’s natural systems. Where Plan B really hits home is in the numbers: Brown puts realistic dollar values on the various aspects of his plan, and compares these costs with current military spending. Needless to say, restoring the environment and economy looks like a bargain when viewed against what the developed nations of the world spend on being ready for battle.

The beauty of Plan B is that it is feasible with current technologies and could well be achieved by 2020 with a concerted international effort. Brown reportedly wrote the latest incarnation of Plan B as a warning call for leaders of the world to begin “mobilizing to save civilization” given that time is more than ever of the essence. Luminaries from Bill Clinton to E.O. Wilson to Ted Turner have spoken highly of Plan B, and at least one university (Cal State at Chico) has made the latest version of the book (Plan B 4.0) required reading for all incoming freshmen.

Those looking for more up-to-date information on the evolution of the Plan B model and progress toward its goals should tune into the website of the Earth Policy Institute, the think tank started by Brown in 2001 and currently used as a central node in the growing network of thousands of entities and individuals around the globe supportive of making Plan B into reality. Prior to founding Earth Policy Institute, Brown was well known in environmental and policy circles for his work with the Worldwatch Institute, a pioneering environmental think tank he launched back in 1974.

EarthTalk® is written and edited by Roddy Scheer and Doug Moss and is a registered trademark of E - The Environmental Magazine (www.emagazine.com). Send questions to: earthtalk@emagazine.com. Subscribe: www.emagazine.com/subscribe. Free Trial Issue: www.emagazine.com/trial.

Dear EarthTalk: I don’t hear much about the environmental impacts of our consumer culture any more, but it seems to me that our “buy, buy, buy” mentality is a major contributor to our overuse of energy and resources. Are any organizations addressing this issue today? – M. Oakes, Miami, FL

A "Buy Nothing Day" activist leaflets in San Francisco.

There is no doubt that our overly consumerist culture is contributing to our addiction to oil and other natural resources and the pollution of the planet and its atmosphere.

Unfortunately the tendency to acquire and even horde valuable goods may be coded into our DNA. Researchers contend that humans are subconsciously driven by an impulse for survival, domination and expansion which finds expression in the idea that economic growth will solve all individual and worldly ills. Advertising plays on those impulses, turning material items into objects of great desire imparting intelligence, status and success.

William Rees of the University of British Columbia reports that human society is in a “global overshoot,” consuming 30 percent more material than is sustainable from the world’s resources. He adds that 85 countries are exceeding their domestic “bio-capacities” and compensate for their lack of local material by depleting the stocks of other countries.

Of course, every one of us can do our part by limiting our purchases to only what we need and to make responsible choices when we do buy something. But those who might need a little inspiration to get started should look to the Adbusters Media Foundation, a self-described “global network of artists, activists, writers, pranksters, students, educators and entrepreneurs who want to advance the new social activist movement of the information age.”

Among the foundation’s most successful campaigns is Buy Nothing Day, an international day of protest typically “celebrated” the Friday after Thanksgiving in North America (so-called Black Friday, one of the year’s busiest shopping days) and the following Saturday in some 60 other countries. The idea is that for one day a year we commit to not purchase anything, and to help spread the anti-consumerist message to anyone who will listen, with the hope of inspiring people to consume less and generate less waste the other 364 days of the year. The first Buy Nothing Day took place in Vancouver, British Columbia in 1992 with a few dozen participants, but today hundreds of thousands of people all over the world take part.

In recent years some anti-consumerists have added Buy Nothing Christmas to their agendas as well. Some ideas for how to leverage Buy Nothing Christmas sentiment without looking too much like Scrooge include giving friends and family “gift exemption” cards and asking shoppers in line at a big box store, “What would Jesus buy?”

Beyond Buy Nothing Day and Buy Nothing Christmas, the Adbusters Media Foundation stokes the fire of anti-consumerism throughout the year via its bi-monthly publication, Adbusters, an ad-free magazine with an international circulation topping 120,000. Do yourself a favor and subscribe...and cancel all those catalogs stuffing up your mailbox in the meantime.

Photo: Steve Rhodes

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