Category: Winter 2012 – Sustainable Investing: Putting the Economy Back Together – Part 2

Pax World Announces Advocacy Initiative Results for 2011 Proxy Season

Pax World Management LLC, investment adviser to Pax World Funds (Pax World), ESG Shares® and ESG Managers® Portfolios, and a leader in the field of Sustainable Investing, announced recently the results of its shareowner and public policy advocacy work during the 2011 proxy season.

Pax World focused on environmental and governance-related initiatives, and also added its voice to several shareholder initiatives to improve public policies or company protocols and disclosures with respect to gender and human rights, financial reform, and workplace practices. In addition, Pax World co-filed five shareholder resolutions, two of which were successfully withdrawn.

Environmental Initiatives

Shareholders and investment managers continued to press both government policymakers and companies to improve regulations and practices to protect the environment. During the 2011 proxy season, Pax World signed on to 18 environmental initiatives, many of which focused on the oil and gas industry. For example, Pax World:

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  • Joined other investors in writing to oil and gas companies engaged in offshore oil drilling, requesting additional information regarding companies policies and programs to manage operational risks and steps taken to improve them.
  • Participated in multiple initiatives led by Ceres (a national coalition of investors, environmental organizations and other public interest groups working with companies to address sustainability challenges), encouraging Congress and state legislators to take action on environmental standards. These included decreasing emissions of air pollutants and greenhouse gasses; passing comprehensive clean energy legislation; and urging the EPA to raise fuel economy standards for motor vehicle fleets.
  • Joined with other investors in the Investor Network on Climate Risk urging California voters to oppose Proposition 23, a statewide ballot initiative that would have stopped implementation of the state’s landmark clean energy bill. The proposition was rejected in the fall 2010 election.
  • Participated in several investor initiatives supporting the Carbon Disclosure Project (CDP), the CDP Water Disclosure project, and its newest initiative: CDP Carbon Action. These initiatives urged companies to report greenhouse gas emissions, climate-related risks and opportunities, and management of access to clean water.
  • Signed on to an initiative led by As You Sow, urging companies to take responsibility for recycling post-consumer product packaging. The companies receiving the letter included General Mills (1.8% Growth Fund) [Article Note #1], Kraft Foods, Procter & Gamble (1.4% Growth Fund; 0.9% Balanced Fund) and Unilever (1.6% Global Women’s Equality Fund; 1.9% International Fund).
  • Co-filed a shareholder resolution, led by Domini Social Investments, with Southwestern Energy (1.4% Growth Fund) requesting that the company publish a report on the risk of hydraulic fracturing as a means of obtaining natural gas. The company agreed to improve its disclosures and work with stakeholders to develop a model disclosure format for other natural gas firms; the resolution was successfully withdrawn.

Governance-related Initiatives

Pax World continued its advocacy in favor of improved corporate governance practices in 2011, participating with other investors on initiatives regarding executive compensation, disclosure of expenditures on lobbying and political contributions, reducing dissonance between corporate policies and trade association lobbying, and bolstering shareholder rights.

Specifically, PaxWorld:

  • Joined efforts led by Walden Asset Management and the Center for Political Accountability to write to companies addressing misalignments between company policies on the environment and climate change and the policies and lobbying of two trade associations – the US Chamber of Commerce and the National Association of Manufacturers (NAM) – of which they are members. Pax World also co-filed shareholder resolutions with Walden Asset Management at Pfizer Inc. (2.3% Global Women’s Equality Fund; 0.4% Balanced Fund), 3M (1.5% Growth Fund; 1.1% Global Women’s Equality Fund; 2.7% Global Green Fund; 0.1% Balanced Fund) and ConocoPhilips (1.6% Growth Fund; 2.4% Global Women’s Equality Fund; 1.8% Balanced Fund), whose representatives served on the board of the Chamber of Commerce. These resolutions were presented on the floor at annual shareholder meetings in an effort to gain greater attention to the issue.
  • In another effort led by Walden Asset Management, signed letters addressed to several companies supporting an annual shareholder advisory vote on executive compensation. Since January 2011, Pax World has voted against proposals on executive pay 318 times and in favor of those proposals 62 times.
  • Collaborated with other investors, led by Domini Social Investments, in a letter urging President Obama to sign an executive order requiring all government contractors to disclose political contributions.

Gender and Human Rights

Pax World continued to lead an investor initiative in collaboration with the United Nations Principles for Responsible Investment (UNPRI), Calvert, and other institutional investors to encourage greater gender equality on boards of directors and in senior management, and to promote improved disclosure.

This year, Pax World launched a campaign to promote greater gender diversity on corporate boards by encouraging investors to vote no on proxies that did not contain a sufficient number of women. During the proxy season, Pax World withheld votes from, or voted against, 264 director slates for insufficient gender diversity, sending notification letters to those companies explaining why and offering guidelines to improve diversity.

Pax World also signed letters coordinated by the Alliance to End Slavery and Trafficking addressed to the appropriations committees in both houses of Congress, urging them to fund a series of authorized programs critical to fighting human trafficking and slavery.

Financial Reform

Pax World sent several letters to members of Congress and the White House in the final weeks of deliberation over the Dodd-Frank Wall Street Reform and Consumer Protection Act, urging that it mandate director election reform by requiring shareholder nominees, under appropriate conditions, be included in company proxy materials and mandating majority voting for directors.

About Pax World Management LLC

Pax World Management LLC, the investment adviser to Pax World Funds, is a recognized leader in Sustainable Investing, the full integration of environmental, social and governance (ESG) factors into investment analysis and decision making. Pax World launched the financial industry’s first socially responsible mutual fund in 1971. Today, Pax World offers a comprehensive platform of Sustainable Investing solutions including Pax World Funds, a family of no-load mutual funds; ESG Managers® Portfolios, multi-manager asset allocation funds powered by Morningstar Associates; ESG Shares®, the first family of ETFs devoted exclusively to a Sustainable Investing approach; and separately managed accounts [Article Note #2], for institutional investors. For more information, visit

Article Notes:

[1] Portfolio holdings as of 6/30/2011. Holdings are subject to change. Kraft Foods is not currently held by the funds.

[2] Separately managed accounts and related advisory services are provided by Pax World Management LLC, a federally registered investment adviser. ALPS Distributors, Inc. is not the distributor for Pax World’s separately managed accounts.

Additional Pax World Information

You should consider Pax World Funds’ investment objectives, risks, and charges and expenses carefully before investing. For this and other important information, please obtain a fund prospectus by calling 800.767.1729 or visit

Please read it carefully before investing. Copyright © 2011 Pax World Management LLC. All rights reserved.

Pax World Management LLC is the investment adviser to the ESG Managers® Portfolios. Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc., serves as portfolio construction adviser to the ESG Managers® Portfolios responsible for manager selection, asset allocation, portfolio construction and monitoring, but does not serve in the capacity of investment advisor to individual investors. The Morningstar name and logo are the property of Morningstar, Inc. Morningstar is not affiliated with Pax World Management LLC. ALPS Distributors, Inc. is not affiliated with Morningstar Associates, LLC. Equity investments are subject to market fluctuations, the fund’s share price can fall because of weakness in the broad market, a particular industry, or specific holdings.

Distributed by: ALPS Distributors, Inc. Member FINRA

Article Source: Pax World

‘Reimagining the World Was a Responsibility’ The Eulogy for Ray Anderson (1934-2011)

By Paul Hawken

The following eulogy was delivered at the memorial service honoring Ray Anderson, held August 11, 2011 in Atlanta, GA and reprinted with permission at

We, who were so fortunate to know Ray Anderson, were in awe. He was many people: a father, executive, colleague, brother, speaker, writer, leader, pioneer. But I am not sure any of us quite figured him out. On the outside, Ray was deceptively traditional, very quiet sometimes, an everyman, all-American, down-home. He was so normal that he could say just about anything and get away with it because people didn’t quite believe what they heard. He could walk into an audience and leave listeners transfixed by a tenderness and introspection they never expected or met. Business audiences in particular had no defenses because they had no framework for Ray.

Was he really a businessman? Yes. Was he a conservative southern gentleman with that very refined Georgia drawl. Yes. Was he successful? For sure.

Well, then where did these radical statements come from? Ironically, because people could not connect the dots, he was extraordinarily credible. He was also courageous. He stood up again and again in front of big audiences and told them that pretty much everything they knew, learned, and were doing was destroying the earth. He meant every word he spoke and those words landed deeply in the hearts and minds of the hundreds of thousands of people he addressed. There was no one remotely like him, nor will there ever be.

People called Ray a dreamer. To be sure, he was, but he was also an engineer. He had definitely seen the mountain, but he also dreamed in balance sheets, thermodynamics, and resource flow theory. He dreamed a world yet to come because dreams of a livable future are not coming from our politicians, bankers, and the media. For Ray, reimagining the world was a responsibility, something owed to our children’s children, a gift to a future that is begging for selflessness and vision.

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Proverbs reminds us that though all good people die, goodness does not perish. The metaphorical spear in his chest was not an injury but an awakening that led Ray to give talks all over the world and in so doing he became a great teacher. He used business as a means to educate and transform, but his life was not about money or carpets. Ray’s life was about the sacred. His covenant was with God; the marketplace is where he labored. He gently laid down that spear this Monday morning but his teachings are a lineage that will live for centuries to come.

To we who remain, Ray’s passing is startling, a summons, maybe even a provocation. Before we die, may we know that to be alive is astounding, inconceivably precious, a privilege beyond reckoning. When we know and cherish this existence, the rest of our life is a shimmering field of light because we have come to recognize one unalterable truth—that we are one with all living entities and beings, and that we are never alone. The consciousness of interdependence and connectedness, and its attendant responsibility to do no harm, was Ray’s epiphany.

Seventeen years ago he had a realization. At that time, Ray came home. He rediscovered a sacred earth with all its complexity, beauty and mystery, free from the constraints of this or that ideology, free from narrow-minded thinking, and he was freed to reimagine the relationship between humanity and nature with Interface as the model. No longer were there human systems and ecosystems. They were one system and he understood that the laws of physics and biology prevailed. He believed in Emerson’s words, that there is an innate morality in the laws of nature: I have confidence in laws of morals as of botany. I have planted maize in my field every June for seventeen years and I never knew it to come up strychnine. My parsley, beet, turnip … acorn, are as sure. I believe that justice produces justice, and injustice injustice. Ultimately, Ray’s work was not about making a sustainable business, it was about justice, ethics, and honoring creation. Zero waste was the path to 100% respect for living beings.

Like Ray, when we become literate in the sweet treasures of creation, there arises a sense of awe, wonder, and gratitude for one’s very existence and the swirl of living beings around us. Do you remember the videos of the Chilean miners coming out of the elevator shaft one-by-one from the San Jose mine in Copiapo, Chile last October? The miners arose from a half a mile below the earth after being trapped for 69 days, and when they emerged they danced, they sang, they kissed the earth, they kissed their wives, kissed their mistresses—sometimes both—and they were ecstatic. They knew what they had nearly lost: the sun and the moon and the stars, cool air made sweet by plants and trees, the succulent foods that come from the soil, the sound of a child’s voice; they were rapturous and joyful and deeply grateful. Although it was a real event, the San Jose miners are metaphors for being reborn in this life to what we overlook and take for granted. Ray woke up and saw what we will lose unless we change.

We don’t know exactly what happened to Ray in 1994. Yes, he read a book. But something remarkable was already there within his being that came to life. What we do know is that from that point seventeen years ago, Ray could see. He saw benevolence and beauty, the tightly knit longleaf pine forests, the undulant riverine corridors of the Chattahoochee, the tantalizing pure light of life reflected on bracts and fronds, the drifting silvery spider silk that takes tiny passengers to new forests. Once your eyes open to the magnificence of creation, you cannot unsee.

Ray never looked back. He did not ponder long. He went to work. He was not satisfied by being able to see, he was destined to do one thing only, and that is serve life itself, for what else is there to do once you see how phenomenally we are stitched together by the living world?

He did not see nature as an abstraction to be worshiped but as the matrix of reformation, the source of goodness, the architecture of our spirit, the template of a future delineated by people who know that business has no purpose lest it serve and honor all of life, that our lives rely upon the kindness of strangers and the damp forest floor and spirited grasses and on you, his family, friends and fiercest admirers who loved this man. He loved us all.

His life is a testament to that love. He passed on Monday morning but it is up to us as to whether he will die. Actually, that is not even a question. He will live. His physical presence has vanished into a mystery we will all follow but never fully understand. His dream, his yearning for commerce that regenerates life and does no harm, his intention to re-conceive what it means to be a manufacturer, to bring industry and biology together into one entity, burned in him, a flame that never seared or ceased, and it will live on in his company and thousands more.

Ray has now traveled to a new forest. We who gather know that the greatest man of industrial ecology, the businessman who defined and showed us how commerce will be for centuries to come if we are to continue our life here on earth, was our friend, patron, and teacher, and we are the most blessed people in the world for having known him.

Article by Paul Hawken, an environmentalist, entrepreneur, and author. His work includes starting ecological businesses, writing about the impact of commerce on living systems, and consulting with heads of state and CEOs on economic development, industrial ecology, and environmental policy. More information at

Article Source: GreenBiz Group

“Alternative Investment” Assets in Sustainable & Responsible Investing Jumped 16 Percent in 2010

US SIF Foundation Report Finds Strong Growth in Private Equity, Venture Capital, Property Investment and Hedge Funds Weighing Environmental, Social and Governance Criteria

The latest sign that sustainable and responsible investing (SRI) is increasingly entrenched in the mainstream of the financial world: It now is making major strides in the world of “alternative investing,” according to a new report prepared for the US SIF Foundation by the Center for Social Philanthropy at the Tellus Institute. The US SIF Foundation is affiliated with US SIF – The Forum for Sustainable and Responsible Investment.

According to “Sustainability Trends in Alternative Investments in the United States,” $80.9 billion was invested in 375 alternative investment funds incorporating environmental, social and governance (ESG) criteria at the outset of 2011, reflecting a 15.9-percent growth in combined assets since the beginning of 2010, when 346 alternative funds managed a combined total of $69.8 billion.

The alternative investment funds tracked in the report span the asset classes of private equity and venture capital funds, property investment funds and hedge funds, and they utilize a broad range of approaches to ESG criteria and themes.

US SIF CEO Lisa Woll said: “Alternative investments in sustainable and responsible investing are attracting a wide range of investors – high-net-worth families and individual ‘angel’ investors, mission-driven institutional investors such as philanthropic foundations, hospitals and faith-based institutions, and some of the largest and most prominent pension funds and private equity firms. The growth of the SRI alternative investment market is being supported by an ecosystem of investor networks and field-building organizations working to develop reliable metrics to evaluate the social and environmental returns of these funds.”

Report lead author Joshua Humphreys, Ph.D., director of the Center for Social Philanthropy at Tellus Institute, said: “Sustainable and responsible investing – the incorporation of environmental, social and corporate governance (ESG) criteria into investment management activities – has become an increasingly important part of the capital markets. Within this growing investment field, now sized at more than $3 trillion in the United States alone, alternative investments are attracting unprecedented attention across asset classes, geographies and ESG themes.”

Key Report Findings

Private Equity and Venture Capital Funds: Private equity and venture capital funds led the field of ESG alternative investment vehicles numerically with 233 distinct funds in 2011, or 62 percent of total funds tracked. In asset-weighted terms, however, private equity and venture funds are the second largest of the three asset categories studied, with $33.9 billion in combined assets under management, or 41.9 percent of the ESG alternative investment market.

Property and Real Estate Investment Funds: Property and real estate funds managed 54 percent of total assets tracked in 2011, with a combined $44.3 billion under management in 95 distinct funds.

Hedge Funds: In 2011, 47 hedge funds were identified with a total of $2.6 billion under management. Representing just 3.2 percent of total assets tracked and 12.5 percent of funds numerically, hedge funds are the smallest group of ESG alternative investment vehicles.

Trends: Environmental criteria were predominant among ESG alternative investment funds in both numerical and asset-weighted terms, with $68.9 billion of total assets incorporating an environmental theme. Environmental criteria were followed by social criteria, which are considered by $48.8 billion of the assets studied, and then by governance criteria, which affected $37.5 billion. This illustrates the considerable overlap in ESG criteria within alternative investment funds. In 2011, 73 percent of alternative investment funds included multiple ESG criteria in fund management.

US SIF Deputy Director and Research Director Meg Voorhes said: “The majority of the alternative fund managers we reviewed consider several ESG criteria simultaneously, but environmental factors predominate. In particular, we see interest in green building, climate change issues, clean technology, renewable energy and energy efficiency. These managers look to produce market rates of return for their clients while helping to foster businesses, generate jobs or introduce products that will yield social and environmental benefits.”

The lead sponsor of the US SIF report is Azimuth Investment Management. Supporting sponsors of the report include: Arborview Capital; DBL Investors; Ecotrust Forest Management; Lyme Timber; Mission Markets; SJF Ventures; TerraVerde Capital Management; Trillium Asset Management; and Working Lands Investment Partners.

About US SIF and US SIF Foundation

US SIF Foundation, a nonprofit 501(c)(3) organization, supports the educational and research activities of US SIF: The Forum for Sustainable and Responsible Investment (US SIF). US SIF ( ) is the US membership association for professionals, firms, institutions and organizations engaged in sustainable and responsible investing. US SIF and its members advance investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. US SIF’s members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, banks, credit unions, community development organizations, non-profit associations, and pension funds, foundations and other asset owners.

The US SIF 2012 Annual Conference will be held May 2 – 4 in Washington, DC.

NOTE: A streaming audio recording of this news event will be available on the Web as of 6 p.m. EDT on October 26, 2011 at

Copies of the report will be available to journalists upon request. The full report is available at no cost to members of US SIF and for a fee to other accredited investors.

Opening Remarks at 2011 BSR Conference by Aron Cramer, President & CEO, BSR

Theme of the conference, “Redefining Leadership.” Held November 2011 in San Francisco, CA

Welcome to the BSR Conference 2011

It is an honor for me to welcome the nearly 1,000 people who have come from 37 countries in all parts of the world to be with us here this week.

Seeing so many familiar faces—and welcoming new friends, member companies, and partners, is also an honor.

Our Conference has a way of arriving at a time when momentous things are happening.

According to the United Nations, just yesterday we welcomed the seven billionth human being to Planet Earth. We hold the future of that baby in our hands. What’s more, the world we are helping to create today will be inherited by the eight billionth person sometime in the next two decades, and the nine billionth by the middle of the century.

This week, I hope we will dedicate ourselves to envisioning and creating a world where all seven, eight, or nine billion of us can lead healthy, secure, and dignified lives. Businesses dedicated to this vision can make it so. And we, in this room, can make that vision a reality within our businesses.

We are here in consequential times. 2011 has been no ordinary year.

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I just returned from the Middle East, where I heard a young Tunisian human rights activist who was elected to her country’s parliament, met a creative 20-something Egyptian social entrepreneur, and heard the new Libyan leadership speak about how they intend to translate their new found freedoms into peace and prosperity for their liberated country. It was inspiring to share in their joy and their vision.

And so we have many reasons, this year, to be optimistic.

But 2011 is also marked by the anxiety, frustration, and downright anger expressed by the Occupy movement. Whatever you might think of the individuals in the tents, the encampment just on the other side of this very hotel shows how deeply many people feel that the economy simply isn’t working for them.

Just last week, new statistics in the United States underlined the magnitude of rising income inequality. In this country, the income of the top 1% has grown by over 275 percent in the past three decades. What is really important is that this is more than six times as fast as income levels have risen for the middle class.

At the same time, faith in governments around the world is extremely low.

  • Only 9 percent of Americans believe that Congress is doing a good job — and no, I don’t know anyone in that 9 percent. A leader in corporate responsibility since 1992,
  • Eurozone leaders struggle to manage their way out of crippling debt in Greece and elsewhere.
  • And the last time we were here in San Francisco, in 2009, we invested hopes in a global deal on climate change in Copenhagen. Today, few of us assume that grand global agreements will put us on the path we know we need, to sustainable development models.

And environmental issues continue to mount: we are all aware of our widespread—and growing—environmental problems, not least the Rubik’s Cube dilemma of managing food, fuel, and water. The speaker you are all waiting to hear next has a little something to say about the climate crisis.

The World’s Agenda is the Business Agenda: A New Agenda For a New World

But BSR has never been about gloom and doom.

As BSR enters its 20th year, which we will be celebrating in 2012, it is clearer than ever that businesses that are sustainable, innovative, and inclusive will lead us out of the “Great Stagnation.”

We tackle this challenge in a world with new dynamics. Many of the conditions that shaped the last 20 years are no longer relevant—or as powerful as they were.

In 2011, we live in a world where economic conditions in the West are likely to be stagnant for some time. All around us, confidence is often lacking, and faith in the future has declined.

Our world today is hyper-connected and transparent—a world in which change often happens bottom-up, not top-down, and comes at warp speed.

We live in a world in which the relevance of today’s most powerful institutions—in business, civil society, and government—is not guaranteed tomorrow.

All this adds up to an important point: For the first time in a very long time, it is challenges in the mature economies, rather than questions about impact in emerging economies, that are the dominant factor defining corporate responsibility.

In this context, there are four pillars of sustainability that are particularly important now, and should be a part of every company’s strategy.

First, business needs to create new solutions to ensure that the economy providesopportunity for all. In many ways, Occupy Wall Street is to this decade what the Battle for Seattle was for the last decade: a wakeup call that causes us to see the world differently than before. We must focus on building an inclusive and fair economy, including here at home, otherwise business’ license to operate will be severely damaged. This challenge has not been on the sustainability agenda, and that should change.

Second, we need to declare war on waste. When prosperity reigns, wasting one-third of our food and one-third of our energy is morally dubious; during times of economic distress, it is just foolish. And this is one way that a stagnant economy creates an opportunity: A war on waste may be the best chance we have to make sustainability relevant for every household and consumer. We can turn sustainable consumption from an abstract concept to something that enables companies to build new products and new business models that help consumers unlock savings from wiser use of energy, transport, and food.

Third, business needs to push policy makers to stay focused on reforms that enable long-term thinking. Companies need to find a constructive public voice. Reforms of reporting requirements and fiduciary duty are needed to ensure that Boards, executives, and line managers are able to make investments in the future. Business needs to make sure that policy makers do not abdicate the responsibility to create a low-carbon economy. Looking ahead to Rio+20, next June, business should make sure that climate change stays on the world’s agenda.

Finally, let’s remember what business does best: innovate. The anxious headlines about the global economy mask an undeniable fact: We are living in a golden era of innovation. It is happening down the road in Silicon Valley, in remote villages in Africa, India, and Brazil where mobile technologies are creating opportunities and through new business models focusing on value not stuff. More than ever, the sustainability function has to be an innovation lab. We have to be architects of a new world, not cost centers that manage reputation.

Transition – Redefining Leadership 

I want to close by touching on the theme of this year’s conference, “Redefining Leadership.”

We chose this theme because we see the characteristics of leadership changing in fundamental ways.

Traditionally, leaders demonstrated their prowess by separating themselves from others. The challenge of our time is to lead by bringing others along with us.

Traditionally, leaders could rely on a monopoly on information; today, leaders must elicit insights from information coming from many different and often very unfamiliar sources.

Traditionally, leaders aimed to make their own institutions the best they could be; today, leadership means finding partners to amplify the progress any single company can make on its own.

So let’s make a deal.

Over the next three days, make an explicit effort to explore new ways of leading. Commit to yourselves to learning from your peers and fellow practitioners—all 1,000 here in San Francisco this week—about how to be more effective leaders, moving your companies to excellence through sustainability.


Looking around, it is easy to question how well prepared many institutions are to take up the challenges of our world.

Governments may be better at negotiating slices of a shrinking pie than creating new opportunities.

The Occupy movement may be better at channeling anger than creating solutions.

And consumers nervous about their jobs may think first about their immediate needs, not the longer term.

With all that in mind, I think the challenge of building an innovative, sustainable, and inclusive economy is up to us.

Steve Jobs famously encouraged us to “stay hungry, and stay foolish.”

Together we can create solutions to ensure that the seven billionth human will be hungry for ideas—not hungry for food or freshwater—and will embody foolish creativity, not foolish wastefulness.

That is the vision I would like us to take up over the next three days.

About Business for Social Responsibility (BSR) 

BSR works with its global network of more than 250 member companies to develop sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. With offices in Asia, Europe, and North America, BSR uses its expertise in the environment, human rights, economic development, and governance and accountability to guide global companies toward creating a just and sustainable world.
Visit for more information.

The 2012 BSR Conference will be held October 23 – 26 in New York City.

A New Foundation for Portfolio Management

White Paper from RSF Social Finance

A New Foundation for Portfolio Management is a paper that proposes new principles for creating an investment portfolio. Authored by Leslie Christian, of Portfolio 21 Investments with the support of Don Shaffer, President & CEO of RSF Social Finance, this paper challenges current assumptions about risk, growth and utility and proposes new principles to bring portfolio theory into the 21st century.

Through a process of inquiry, both RSF and Leslie Christian realized that the assumptions we were relying on to guide our investment strategy were no longer appropriate for the environment we are living in or for having the social impact we seek. It was this discovery that first led us to begin to rethink portfolio theory, and our investment strategy overall, and led to the creation of this paper.

The white paper provides a set of new foundational elements to build upon current investment including:

  • Integrated Risk – a scientific view of risk that incorporates ecological limits and uncertainty, both usually ignored in investing.
  • Selective Growth – growth can occur even if average economic growth is zero or negative, but it will be unique to particular sectors and companies rather than a function of rising per capita material consumption.
  • Multidimensional Utility Function – investors need to have clarity with respect to the unique purpose and goals of each asset beyond solely financial.

It is our hope that this paper will inspire deeper discussion in the investment community. We look forward to continued conversations.

Native American Trust Fund Director Recognized by Socially Responsible Investors with Major Service Award

Oneida Tribe of Wisconsin Trust Director Susan White Honored by Colleagues at 22nd Annual SRI in the Rockies Conference

Susan White, an enrolled member of the Oneida Tribe of Indians of Wisconsin and director of the Oneida Trust, was awarded the 2011 SRI Service Award in October 2011 during the SRI in the Rockies conference in New Orleans.

SRI in the Rockies Conference Producer and First Affirmative Financial Network President Steve Schueth said: “Susan White is richly deserving of this year’s Service Award. She serves as co-chairperson for the US SIF Indigenous Peoples Working Group, and represents people of Native American heritage in the pursuit of sustainable investing and community development efforts in Native America. This is the first time since the SRI Service Award was conceived in 1991 that a person of Native American descent, and an investment professional for a Native Sovereign Nation, has won the honor.”

The SRI Service Award recognizes outstanding contributions to the socially responsible investment industry. Winners are selected based on a number of criteria, including industry leadership, innovation, communication and collaboration, and success in improving the public’s awareness and acceptance of sustainable, responsible, impact investing (SRI).

The SRI Service Award is presented annually at the SRI in the Rockies Conference, the largest and longest-running conference for the sustainable, responsible, impact investing industry in the world. SRI in the Rockies is produced by First Affirmative Financial Network.

In presenting White with the 2011 Service Award, Shari Barenbach, the 2010 award winner, said: “Susan White is a real leader in Indian Country. Through her work, in 2010, the Oneida Nation received the Harvard Project on American Indian Economic Development Honoring Nations Award, and more recently, the Congress of American Indians passed a resolution encouraging all Native American communities to invest according to responsible investment principles.”

White is an enrolled member of the Oneida Tribe of Indians of Wisconsin ( ) and serves as Director of the Oneida Trust. She directs a multi-operational department in capital formation, develops funding strategies for local savings, asset management, loan funds, and reservation based Trust Fund Activities. She is responsible for management and monitoring of the investments, money managers, custodians, and consultants. On behalf of the elected Trust Committee, she coordinates shareowner advocacy efforts, which flow from the Oneida Nation’s culture and traditions.

White joins a prestigious group of industry leaders who have won the annual SRI Service Award over the past 20 years:

2010: Shari Berenbach, U.S. Agency for International Development (USAID)
2009: Reggie Stanley, Calvert and Robert Zevin, Zevin Asset Management
2008: Bob Walker, The Ethical Funds Company, Canada
2007: Conrad MacKerron, As You Sow Foundation
2006: Mark Regier, MMA Praxis
2005: Shelley Alpern, Trillium Asset Management
2004: Anita Green, Pax World Funds
2003: Peter Camejo, Progressive Asset Management / Financial West Group
2002: Michelle Chan, Friends of the Earth
2001: Steve Lydenberg, Domini Social Investments
2000: Frank Coleman, Christian Brothers Investment Services
1999: Lloyd Kurtz, Nelson Capital Management
1998: Steve Schueth, First Affirmative Financial Network
1997: George Gay, First Affirmative Financial Network
1996: Amy Domini, Domini Social Investments
1995: Alisa Gravitz, Green America and Jerome Dodson, Parnassus

1994: Tim Smith, Walden Asset Management
1993: Joan Bavaria, Trillium Asset Management / CERES
1992: Peter Kinder, KLD Research & Analytics
1991: Ed Winslow, Progressive Asset Management / Financial West Group

About the Annual SRI Conference
SRI in the Rockies ( ) is the leading forum for the sustainable, responsible, impact investing industry in North America. The 22nd annual conference was held in New Orleans in October 2011.

For its 23rd year, SRI in the Rockies Conference will move to the Mohegan Sun in Connecticut, October 2 – 4, 2012.

About First Affirmative Financial Network
First Affirmative Financial Network, LLC ( ) is an independent fee-only Registered Investment Advisor (SEC File #801-56587) offering investment consulting and asset management services through a nationwide network of investment professionals who specialize in serving socially conscious investors. First Affirmative produces the annual SRI in the Rockies Conference, the premier gathering of sustainable and responsible investors and investment professionals in North America. 

Indigenous Lessons for Economic and Social Interdependence

By Theo Ferguson, founder of Vital Systems

After seven years of advocating true cost pricing and true cost accounting to help people understand the impact of their purchases on community, environment and the economy, I embarked on a Central and South American sabbatical to investigate how indigenous people live with life rather than exploit it. My hope was to understand how their perspectives, philosophies and behaviors create ways of living in a society based on interrelated economies and the values on which they base their well being and prosperity.

During four months of travel, I had the honor of experiencing deep introductions with three indigenous communities, including the T’sutujil Mayan people in Guatemala with whom I lived for two months. The Pachamana Alliance [1] introduced me to the Achuar peoples in Amazon Oriental in Ecuador. Finally, I visited with a family in Cusco, Peru for a week to acclimate to the 14,000 foot altitude and participate in The Four Winds Society’s [2] Spiritual Expedition to the Andes led by Kkechuwa people and the Q’ero shamans.

What became evident through my intimate experiences with these indigenous groups were three fundamental principles that form the essence of their socio-economic foundation:

  • They live in fully integrated spiritual temporal worlds.
  • They are completely interconnected and interdependent with all life and understand the consequences of not honoring that connection.
  • Because they live interdependently with spirit and each other, many live with qualities of being fully present: “awake,” “aware,” and “alive.”

Deep Connection with the Spirits of Life

Indigenous people live in fully integrated spiritual temporal worlds. Their daily lives include performing rituals that attract the spirits’ attention to guide subsequent experiences and daily actions—including recognizing danger, hunting, healing, negotiating, celebrating, and foresight. The Achuar ritualistically express gratitude to the spirits of life for the blessing of sustenance, personal relationships and community well-being.

The Achuar in Amazon Oriental share their way of living with Spirit at all times. Their food, eating processes, community relations, connections with those outside their communities, and daily rituals of gratitude are spirit-driven and deeply connected to all other living beings in the lands they co-habit.

For instance, a supportive community practice evolved based on absorbing the Achuar’s primary sustenance derived from matioch roots, which are ground into a liquid pulp. Wives chew the pulp and spit it into bowls. This process accelerates the fermentation of “Chicha,” which they drink. However, a residue builds up in the stomach and thus, about 3AM every morning, community members gather to drink a purgative tea to clear the Chicha residue, and then share their dreams. In the culmination of this daily ritual, those gathered listen and interpret the messages from their dreams, and drink Chicha again as they prepare for a new day together.

In my Four Winds Peruvian expedition to Salkantay the Holy Mother Mountain—one of the endangered Andean glaciers [3], the shamans of the Q’uero people (Q’uero Laika) introduced the Expedition’s shaman participants to seven levels of Peruvian Shamanic Rites. The morning following the Rite of Anchoring Actions out of Time, one participant shared a dream that Salkantay communicated to her to release her lifelong fears of unworthiness and inadequacy: “I am waiting for you. You are welcome. I will hold so that you are supported and never doubt your path in the world.” Our trip leader shared that this communication was meant for the for entire “aynu,” or group, of participants and we all took the message to heart. Indeed, within these indigenous communities, dreams from the spirit world guide behavior and action in the conscious realm.


Those who live completely interconnected and interdependent with all life know that they are wounding themselves if they pollute Mother Earth. Guatemala’s Lake Atitlan, a rain-filled caldera, is the source of water and fish for 22 pueblos surrounding the Lake. This includes the pueblo, San Pedro la Laguna, inhabited by the T’sutujil Maya people from the south side of the Lake.

Although some residents deeply understand their connection to the lake and the importance of the lake’s survival, the introduction of imports and “modern” systems and products from international traders is killing the caldera by layering the lake floor with toxic sediment from raw sewage. The trees and shrubs are challenged to hold the banks, smothered in plastic and aluminum foil snack wrappers.

In support of long standing efforts to heal Lake Atitlan by many organizations, my organization – Vital Systems – has the honor of partnering with a local school, Casa Rosario, to facilitate and support a conversation to heal the lake. This pilot project, “Paths to Health, a System to Cure Lake Atitlan,” conceived a decentralized education effort called Asociación Ambiental, Social, y Cultural—the Association of the Environment, Society, and Culture.

Part of this collective process includes sharing stories of T’sutujil culture, vitality, and interdependence. One of the components in the opening circle of local, diverse groups from San Pedro la Laguna included a skit ably acted by adults and children called “The Farmer, the Llama, and the Condor”. This Kkechwa teaching tale from the Peruvian Andes presents the way of living in which humans and animals are equal as they share the same rigorous judicial system.

The collective effort to heal the lake will have important outcomes for the T’sutujil and Cakchiquel communities surrounding Lake Atitlan. Some of the community representatives and groups in the Pilot Project—Caminos Hacia Salud–include the following:

  • A non-profit organization teaching children about ecology
  • A local religious organization that opened a school to teach young people Mayan spirituality, cosmology, and healing in T’sutujil, the Mayan language on the south side of the Lake
  • A non-profit organization that is mounting a recycling effort for every household in San Pedro la Laguna
  • The Association of Fishermen that rallies community members in regular Lake Atitlan clean-up days
  • A popular local restaurant that founded and operates a fair-trade, locally grown, organic coffee export business
  • A school that is both an archeological site and botanical garden where Spanish has been taught to international students for 18 years
  • Artists
  • A co-director of a program for challenged children
  • A city Museum, Museo Tz’unun Ya’

Through a pilot project, Paths to Health—a System to Cure Lake Atitlan, the people of San Pedro la Laguna are creating a systemic community collaborative process to heal the lake to ensure its destruction will not occur again. Since all the lake’s residents must drink the water, eat the fish, and increase the quality of life and prosperity of their communities, they aspire to conduct this effort rigorously with the intent to replicate it in other 21 pueblos around the lake.

Pilot project participants in San Pedro are considering in what ways their future survival is based on showcasing the principles of their T’sutujil Mayan heritage as they are only one generation removed from the influence of the capitalistic model of the developed nations. Those involved see the opportunity and are inspired by the actions in the south—Ecuador and Bolivia—and recognize the possibility that the project can serve as a case study for the Rights of Nature—also called the Rights of Mother Earth. An active agent in this endeavor is the southern node of Pachamama Alliance, Fundación Pachamama, which participated in ensuring that the principles of the Rights of Mother Earth was embedded in Ecuador’s constitution in 2008.

Practicing Presence

In the Peruvian Andes at the Solstices, vast populations climb mountain summits to connect with and offer gratitude to the holy Mother Mountain glaciers on which the continent depends for water. The Four Winds Society Expedition’s “peak experience” was the Q’ero Laika shamans performing the culminating Rite of the Creator on Winter Solstice (in June) at the Lagoon, formed by the glacier melt of the Holy Mother Mountain Salkantay at 15,750 feet. As the smoke from our burning “despacho” swirled together with the frozen water and air of Salkantay, we knew our offering was well received as we were blessed with a thick, flowing blanket of fog while navigating the steep-cliffed, muddy, and chert-lined paths to our upper camp at almost 15,000 feet that became a hail storm just after our arrival.

Because indigenous peoples live interdependently with spirit and each other, there is a quality of being “awake,” “aware,” and “alive” that enables them to be fully present. This is a practice I deeply experienced in my trek descending from Mt. Salkantay. To the Kkechwa people, the health of the anyu is very important. If someone in the group needs help, they offer it fully and completely in the moment.

Navigating a precariously narrow path, two of my Kkechwa friends slipped under my arms and held me firmly around the waist. This newly created 6-legged creature could now trek down the mountain, each footstep being placed by three minds, NOW, NOW, and NOW. Another of many examples of this quality of presence was exhibited during a sudden burst of jubilation on Winter Solstice when four of our Kkechwa companions each grabbed bandanas and performed a local Peruvian line dance on a small plateau at 15,500 feet.

So I encourage each of you, as leading actors in creating sustainable economic systems, to consider activities based on deep connectedness with the spirits of life, as well as interdependence, and presence. I challenge you and all members of your community to respond with mindfulness to obstacles while celebrating the present moment! Let’s value and honor the health, vitality and delight of individuals and communities everywhere so we can all thrive. Can we find ways to integrate these ways of living into all our social and economic systems? I suggest we learn from our indigenous elders and practice these principles NOW, NOW and NOW.

Article by Theo Ferguson, Founder of Vital Systems. Theo is an Educator, Facilitator, and Impact Investor in Local Food and Farming Infrastructure.





No Matter What Else Happens, We Must Transform Healthcare

An Introduction to Nura Life Sciences

Biophysics: A Compelling Solution to the Healthcare Conundrum

One remedy for America’s broken healthcare system lies in the adoption of biophysics- centric therapies. When integrated into patient care, the application of such biophysics technologies will produce better patient outcomes and will reduce current Payor expenditures substantially. Nura Life Sciences was created to implement business models that institutionalize such therapeutic modalities. The science is solid, the plan is bold and the human capital involved is extraordinary.

What’s Wrong With Healthcare?

There is broad recognition that the U.S. healthcare system is in desperate need of repair. Among many causes for dissatisfaction is the fact that 75% of the money spent on healthcare in the U.S., less then $1.8 trillion annually, is spent on chronic care [Article Note #1]. By definition, chronic care is chronic because the aggregate of products and services offered do not resolve the patient’s problem. This is a stark reality for the patient, as well as for any professional delivering healthcare services. From an engineering perspective, this implies that something is not right about how we think about and measure chronic disease. In engineering, when something doesn’t work one learns to try something else. Unfortunately, participants in our healthcare services delivery system are not trained to employ such engineering principles. Moreover, implementing such an approach requires that one has real-time data to assess what is working and what is not. Unfortunately, our healthcare delivery system does not engage in capturing real-time patient data. In general, process improvement is not woven into the fabric of healthcare services. The dysfunction of our healthcare system goes deeper than this, though. It goes to the heart of what we think we know, and why we think we know it. The American “system” for healthcare exemplifies the wisdom of Einstein’s dictum: “You cannot solve a problem using the same thought process used to create the problem in the first place.”

The Founder of Nura Life Sciences, though trained in neuropharmacology, developed his business reputation in pension finance. He authored the first pension governance fiduciary training program in the country and consulted on the fiduciary management of over $100 billion in retirement assets globally. Fortune 500 companies and sovereign governments that utilized the methodology he authored changed their behavior with regard to the management of billions of long-term Trust assets. With his global reputation and skills as an efficiency expert in that field, he brings a unique process improvement lens to developing a solution to the conundrum of healthcare. That effort, which includes 10,000 hours of research and development, resulted in the creation of Nura Life Sciences. Nura is an extraordinary team of 40+ clinicians, scientists and business leaders who have come together to implement a unique and substantive opportunity: Implementing business models that integrate biophysics into clinical medicine. More so than any conventional healthcare approaches, biophysics has the ability to positively impact chronic disease, where healthcare’s greatest expense is concentrated. The value of this approach is straightforward: It will lead to better patient outcomes and reduced Payor costs.

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The Evolution of Scientific and Medical Innovation

As the name implies, “Biophysics” is the multidisciplinary study at the intersection of physics and biology. Specifically, we use the term to refer to the observations of bioactivity in response to the application of energetic stimuli such as light, coherent light, magnetic and electrical fields. This bioactivity appears to reflect a significant regulatory impact on human physiology. Though people may be unfamiliar with the term “Biophysics”, many are familiar with the use of lasers (photons oscillating at a specific wavelength) in clinical medicine, which is an example of one biophysics modality. Another example of biophysics at work is trans-cranial magnetic stimulation, a modality now used for the treatment of various behavioral disorders. It is useful to note that both modalities, which were once considered “unusual” or “out-there”, are now well established scientifically, and widely accepted in clinical medicine.

In its pure form, a theory that accommodates and explains more scientific observations (those that are measurable and replicable) than some other theory, is likely to be a more accurate description of real world events. Biophysics offers a new lens from which we can view health and disease. It allows for a more coherent model than the one which “modern” medicine is predicated, the “reductionist” model. Reductionism is derived from an 18th century perspective on biology when the quest for understanding human physiology was driven by the identification of the individual parts of the body and their connections at a micro level. The greatest failing of this approach is that is does not take into account that which is not seen when studying the component parts of a “system”.

In other words, reductionism fails to recognize that the human body is a single integrated biochemical and electromagnetic system. It does not incorporate the fact that, in a complex biological system, there are characteristics and properties of the system that are operational ONLY when the system is intact and interactive, in accordance with its design. When the components of this system are studied separately, the electromagnetic relationship between the components is lost. Quite literally, as it’s practiced, clinical medicine does not give this notion much credence. However, there is NO scientific basis for believing that the reductionist approach is any better at accommodating scientific observations into a more coherent representation of the real world. Indeed, one can argue that the $1.8 trillion statistic cited previously may be evidence that the conventional reductionist approach to understanding human health and disease is simply insufficient. There is reason to believe that this is the case.

Here is one example as to why reductionism may be insufficient: It is an established fact in electrical engineering that a magnetic field accompanies an electrical charge, and travels at a 90-degree angle to the flow of the current. Though this principle of electromagnetics is well known by college students who take Engineering 101, it isn’t taught in Biology 101 or in medical or nursing school. Therefore, it is not well-known by clinicians who treat patients. Just as important, physicists are not quite sure why this is so. Just because we don’t know the underlying physics involved, it doesn’t mean we can’t engage biophysics technologies as tools for our collective benefit. That is indeed the benefit for the patients and Payors of healthcare.

Given that electrical gradients and charges are fundamental to the operation of the brain, the heart, all musculature, and even the functionality of cell membranes [Article Note #2], what is the likelihood that the magnetic fields that accompany electrical charges have no regulatory impact on human physiology? From an evolutionary biology point of view, it seems highly unlikely. In the same vein, how likely is it that photons, which are known by physicists to “carry” the electromagnetic field in subatomic space, are irrelevant to human physiology? Given that we are born on a planet bathed in photons from a nearby sun, it seems unlikely.

Once one listens to physicians who use biophysics technologies in their practices, and once one takes a deep dive into the National Institute of Health database (known as “Pubmed”), one is hard pressed to find ANY example of any lasting adverse patient reactions to the use of these tools and technologies. Further evidence of patient safety comes from an examination of the claims made to the technology manufacturers’ product liability insurers. In one case, a technology insured by Alliance (of Germany), had only one claim made in 16 years. This claim was for 160 Euros. That is hardly what one might expect from medical devices sold in the United States.

Once we saw that patient safety was a non-issue, and that efficacy was supported by published scientific studies and the experience of leading practitioners of integrative medicine, the only task left was to develop a business model. That model had to take into account the dysfunctional nature of healthcare and the payment system, which keeps it stuck, and then lay out a path that would enable clinical medicine to embrace innovation.

Nura has constructed such a model and has applied that model to various segments of the institutional healthcare space. A vital component for implementing Nura’s business model is leadership with the courage to drive change in institutions not known for innovation. We are pleased to say that we have found those proverbial “needles in the haystack”.

At an investment conference focused on fiduciary conduct a couple of years ago, the CEO of Nura, Wayne Miller, had the opportunity to ask those assembled why the concept of Socially Responsible Investing even existed. After all, if SRI was a small subset of the investible universe, what did that make the rest of them? Were they socially irresponsible or socially unconscious investors? Why didn’t the people assembled at this conference greet one another by asking, “How is your socially irresponsible portfolio doing?”

The answer to that question is more obvious now than it was then.

It simply was not how we thought about money or investing. We suspect that most of us think differently about that now. Our sensibility of money and investing has changed. If we can now apply that shift to healthcare by institutionalizing biophysics-based clinical medicine, perhaps, just perhaps, we can create a more coherent system for care – a system that costs payors less, and produces more effective results for patients.

It may not “cure” all of what ails this country. Alas, it is a worthy start.

Article Notes:

[1] The Healthcare Imperative: Lowering costs and Improving Outcomes. The Institute of Medicine of the National Academies. Published 2-24-11. ( )

[2] McCraig, Collin D. et al., Electrical Dimensions in Cell Science. J. of Cell Science, 122, 4267-4276, 2009.

Article Source: Nura Life Sciences

Sustainable Brands 2011 Conference – Businesses Stepping Up for Sustainability

By Amy J. Belanger, CEO of Idealist Marketing & PR

Nearly 800 business leaders from 19 countries convened at the Monterey Conference Center in central Calif., on June 7-10, 2011 for the 5th annual Sustainable Brands Conference by Sustainable Life Media (SLM). This event is a relatively new forum to share best practices, challenges and thoughts on the shifting landscape of corporate sustainability.

Sustainable Brands takes a different approach than other conferences that have been growing mission-based green businesses for a decade or more, such as Natural Products Expo by New Hope Natural Media ( ), LOHAS Forum (, and Social Venture Network’s annual conference ( ).

In a sustainable business arena where the mission-driven “Born Greens” and the profit-driven “Big Brands” are often still on different playing fields, this conference is openly served up for the latter. The majority of participants were sustainability and marketing executives from multinational corporations, like Wal-mart, Coca-Cola, Clorox, Ford, Disney, and HP.

Founder and CEO, KoAnn Skrzyniarz, makes no bones about focusing her event on opportunity for business. She believes it’s the best way to capture the creativity and power of the big brands to solve social and environmental problems on the large scale that’s urgently needed.

However, the program included quite a few leaders from the mission-driven companies and nonprofits, old and new, who have built the green economy that the big brands now seek to engage. Speeches and panels included sustainability executives and thought leaders from Seventh Generation ( ), Interface ( ), CSR Wire ( ), Green Mountain Coffee Roasters ( ), Natural Logic ( ), Eco-Products ( ), and dozens more.

Through the theme of this year’s conference, “Play On,” organizers sought to score a collective “aha” about the power of play to overcome the “ho hum” in sustainability education and engage people in the same powerful ways that online gaming and social media do. “Gamification” applies game mechanics and engagement science to businesses; this event applied it to sustainability and branding. Presenters said fear is an ineffective way to motivate change, but the human spirit is built for creativity and problem solving, and the colossal rise of social media, mobile devices, wi-fi, and video games proves gamification is the way to unleash it.

The gamification strategy was elaborated by marketing pros, scientists, and game theory experts, including Dr. Allen Hershkowitz, senior scientist at NRDC; Robin Raj, founder and executive creative director at Citizen Group; Rajat Paharia, Founder & Chief Product Officer of Bunchball; and Michael Kim, Founder of Kairos Labs. All addressed the finer points of game-like feedback systems as a powerful new frontier in teaching and marketing sustainability in the “engagement economy.”

Toyota Prius believed in the concept enough to gamify driving in an environmentally friendly manner with its on-board software that delivers feedback on fuel conservation. Similar examples are surfacing throughout the business world. Energy executives from Ascentium, Green Energy Agents, Efficiency 2.0, and Silver Spring Network Utilities reported significant energy reduction when consumers use their game-based platform and compete to improve.

Applied to branding, Gabe Zichermann, author of “Game-Based Marketing” (Wiley, 2010), said gamification is rewriting the rules of brand marketing, product design, and customer experience. Zicherman explained how gamification strategies can help companies increase customer activity, loyalty, retention, and viral growth.

The program was replete with valuable presentations on green marketing by brand leaders such as Cone, Inc., Saatchi & Saatchi, BBMG, Shelton Group, and BrandLogic, to name a few. Of course, it’s difficult, if not impossible, to hold a sustainability branding conversation with big business without the stain of greenwash.

Brand protection strategist and trademark counsel, Lara Pearson, confronted greenwashing head-on in her panel, “The ABC’s of Staying Clean on Greenwash,” with Jonathan Yohannan, of Cone, Inc, and David Mallen, of Better Business Bureau. Panelists urged companies to avoid inadvertently creating a false impression about their environmental claims which could undermine their well-intended steps forward. Yohannan referenced a Cone Study that backs up their precaution, saying nearly three-quarters of consumers (71%) will stop buying a product if they feel misled by environmental claims.

But it was quickly clear that (at least in the vision of the organizers and thought leaders behind it) this event is neither “green” nor “wash.”

Organizers said the future depends on a sustainable business movement that propels itself beyond the green framework entirely, beyond isolated CSR programs which generate incremental change, and beyond the marketing of good works, to one in which brands are built with sustainability and social responsibility integrated into every function and decision. In other words, companies must “embed sustainability,” making it systemic to everything they do.

Gil Friend, panelist, author and CEO of Natural Logic said, “What we’re trying to achieve is the creation of a systemic business context in which the full impact (social and environmental) of the manufacture, sale and end of life of a product becomes part of the core business strategy.”

In his talk, “Your Next Move: From Bolt on to Embedding Sustainability,” author and Case Western Associate Professor Chris Laszlo described concepts and frameworks that mainstream companies are using to embed sustainability into their core business strategy – and create competitive advantage. He argued that the solutions they’re producing are unique and authentic to the business, and require no tradeoffs in profitability, or for the customer, in price or quality.

This is the branding philosophy advocated by Skrzyniarz, and it’s a whole different game than flying your green. “We like to say that sustainable brand builders need to see brand as first who you are, what you do and how you do it — THEN how you talk about it,” she said, advising brand leaders to be transparent and authentic.

That’s not an easy challenge to meet, because it involves risk, said Charlie Brown of Nike, Jess Krauss of Source44, and Jason Saul of Mission Measurement. For example, manufacturers are “tightfisted” about sourcing because they don’t want to interrupt their supply. What they need to realize is that transparency also brings gains. Krauss discussed Source44’s analysis of its clients’ supply chain, saying many don’t even know about unfair labor practices, product recalls, and other problems in their supply chain before the analysis. After, they’re able to better manage the risks and often find unexpected gains including cost and labor savings, branding advantages, and more.

Transparency relies on measurement: you can’t report what you don’t know. In a panel on standards, tools and dashboards, Jason Saul from Mission Measurement discussed the challenges – and opportunities – in measuring sustainability initiatives. With Wal-Mart seeking to make its Sustainability Index the retail industry standard; the Outdoor Industry Association unveiling its assessment tool which measuring the environmental footprint of apparel, footwear, and gear; and dozens if not hundreds more industry-specific tools under development and in use; presenters said measurement and reporting is costly and complicated.

It’s also fraught with controversy, said Gregory Unruh, of Thunderbird School of Management, in his panel on the “green standards frenzy.” In the design of standards, who decides what measures constitute “green” and “socially responsible”? Steve Arbaugh, of Interface, Jennifer Schwab, of Sierra Club Green Home, Ben Packard, of Starbucks and Bonnie Nixon, of The Sustainability Consortium discussed how standards are evolving and who is taking the lead.

If big business wins the standards scramble, some sustainability leaders doubt whether society will change at the speed required to buffer the worst outcomes of climate change and other looming environmental and social disasters.

In “The Power of & in a World of Either/Or,” Gil Friend said the challenge before us “is nothing less than reinventing the industrial economy of the planet,” to build industries that are in harmony with the planet that sustains them. He said the 2% or 10% reduction goals we commonly see in industry are “woefully inadequate.”

A great many of the participants in the event shared this sense of urgency. In his Sustainable Brand Leadership panel, with Gil Friend, Chip Conley, and former Seventh Generation CEO, Jeffrey Hollender said we need revolutionary change – not incremental change. Companies must become “sustainable in a systemic effect that leaves the world better off than if they had never existed,” he said.

KoAnn Skrzyniarz has said in past interviews, “Leaders set the bar in terms of establishing the pace of change. There is no doubt that the future is in sustainable brands, however whether or not we’ll be able to create the kind of change we need in the world at the pace we need it will depend to a degree leaders who will continue to step up to keep raising the bar for the rest of us.”

But what happens when visionary leaders – the ones setting the bar – leave the mission-based companies they create?

Hollender is a case in point, which he illustrated in a sobering, cautionary tale about why he was fired from his own company, and where he dropped the ball in protecting his company’s mission into the future. “I was fired about six months ago after 23 years, and removed from the board of directors, never being allowed to step foot back in the company,” he declared to a riveted audience.

He used his experiences to underscore the imperative to embed sustainability and create cultural, structural, and financial protections around it. He said his decision to accept “too much money from the wrong people,” shifted power into the hands of investors who immediately removed the salary cap he created and started on the path to diluting the company’s mission.

Hollender believes he could have protected his company’s mission and employees better had he taken steps to “institutionalize the mission and values in the corporate structure,” and “given more of the company to the employees, who would have acted with greater responsibility and wisdom than the people that owned most of the company.”

Stepping up as such a leader requires courage, as every sustainability entrapreneur and intrapreneur knows. Those who do take risks sometimes suffer big losses, like Hollender did, or receive criticism from all sides of the aisle. Yet Hollender remains optimistic – about financial change engines such as employee ownership, green jobs, cooperatives, and microfinance, for instance.

In his closing statements, Hollender issued the challenge, “Will you put your energy into something that will do more than create incremental change, that you believe will create transformational change? Will you not be afraid to try?”

Hollender is certainly still stepping up. His new project, American Sustainable Business Council, is a coalition-style advocacy network representing 100,000 small and medium sized businesses. He sees the group as “a powerful counterpoint to the US Chamber of Commerce,” and says it will “lobby and fight for closing tax loopholes on the rich, protect the social safety net for the poor, and give responsible businesses a level playing field on which to compete.”

We look forward to seeing the outcome of this, and other projects presented at Sustainable Brands 2011, and who continues to step up in 2012.

Article by Amy J. Belanger, CEO of Idealist Marketing & PR, based in Berkeley, Calif. She is an award-winning journalist, essayist, and fiction writer, and a certified Guerrilla Marketing Coach. Among many successes, her campaigns banned offshore drilling in Florida, raised $1.5 million to protect the wild forests of the Southern Appalachians, and tripled the size of the Arizona Green Building Expo, making it the second largest green building event in the nation.

Local Investing for Impact

By Amy Cortese, author of Locavesting

Here’s a quiz: if a particular sector of the economy employed half of all private workers, generated half of private GDP, and created more than two out of every three jobs, how much would you say we should be investing in it? Two-thirds of our investment dollars? Fifty percent? Ten percent?

Try close to zilch.

I’m talking about the nation’s 27 million small businesses. These small enterprises are the nation’s true job creators. A recent study by Harvard professor Edward L. Glaeser established a direct correlation between firm size and job creation. Analyzing U.S. census data, he found that counties with the smallest firms experienced job growth of 150 percent, compared to 50 percent job growth for counties with the biggest firms. In fact, as average firm size increased, the rate of job growth decreased.

Indeed, U.S. multinationals shed 2 million domestic jobs from 1999 to 2008, an 8 percent decrease. Over the same period, their overseas hiring swelled by 30 percent, aided in part by tax policy that encourages them to keep profits and investments overseas. That trend has only accelerated since the sub-prime crisis.

There’s another thing about these small fry. Because they are typically private and locally-owned, rather than controlled by absentee shareholders, they benefit their communities in ways that global corporations do not. Studies by Civic Economics have shown that a dollar spent at a locally owned enterprise generates, on average, three times more direct economic benefit to the community than the same dollar spent at a corporate peer. That’s because money stays local, rather than being sucked out to a distant headquarters. When small business owners need goods or services—web design, accounting or legal help or supplies, for example—they tend to turn to other local businesses, creating and maintaining more local jobs. They also advertise locally, supporting a vibrant independent media, and are active in their communities, sponsoring Little League teams and giving to local charities. And, in contrast to many of their sophisticated global peers, small businesses contribute to a healthy, diversified tax base to pay for local services, such as education.

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Yet these small firms are increasingly starved for capital from banks, who consider them too risky; from angels and VCs, who are looking for supersize returns; and from the public markets, which are prohibitively expensive for small companies.

That’s why the single most important thing we can do to help rebuild our communities and the economy and create a more inclusive form of capitalism is to invest locally. That is the subject of my book “Locavesting” which was published in June 2011 by John Wiley & Sons. It is a call to rethink the way we invest so that we support the small businesses that enrich us economically and culturally.

So what is locavesting? It’s a term I coined in late 2008 to describe the grassroots financial innovation I saw bubbling up across the country. Not only were people looking for alternatives to Wall Street, they were creating them. Like locavores who eat a locally sourced diet, a growing number of people are investing close to home. From Brooklyn, New York to Port Townsend, Washington, a vast experiment in citizen finance is taking place. Community-financed business, crowdfunding, cooperatives, investment clubs, direct public offerings and local stock exchanges—these are just some of the alternatives taking shape. The idea is to earn profits while creating strong, resilient local economies. After all, without strong local economies, we cannot have a functioning global economy.

Two things I want to make clear: We think of mom & pop shops as the quintessential local business, and that they are. But a local business can also be a company that employ hundreds of people and generates tens or hundreds of millions of dollars in revenue. Or it can be a high-growth startup. The defining characteristic is that it is locally owned and has a stake in the community.

Second, I’m not suggesting that people rush out and sink all of their money in the local dry cleaner or put all of their eggs in one geographic basket. But local investments can provide some important diversification for investors. Because their business models are more localized, these companies are often buffered from the global disruptions that rock the financial markets with alarming frequency – whether an earthquake halfway around the world or a sovereign default. Local firms are also less vulnerable to spikes in the price of oil and other global commodities.

Most “locavestors” are putting just a portion of their investments—maybe 10 or 20 percent, although I have seen it go much higher—in the local market. But that can still have a significant impact. Just as “Buy Local” programs have found that a 10 percent shift in spending can have a big impact on a community, so, too, can a shift of 10 percent, or 5 percent, or even 1 percent of our investment dollars.

Imagine that: 1 percent of $26 trillion, which is roughly the amount that Americans have invested in various securities, going to local businesses. That’s $260 billion dollars injected into the Main Street economy. As policy makers have become paralyzed by gridlock and budget-slashing fever, that’s a stimulus plan that won’t cost the government a dime.

It will take a lot of work to shift even 1 percent of our investments, in large part because our securities laws make it hard for ordinary Americans to invest in small, nonpublic companies. But it is starting to happen across the country.

I have many examples in my book, but I’d like to share with one of my favorites: the nine burly cops in sleepy Clare, Michigan that saved their town’s 111-year old bakery. It’s a modest, one-off example, but it points to the impact that local investment, and a little wit, can have on a community.

Officer Greg Rynearson was out on a coffee run one fine spring morning when he heard that the town’s bakery was going to close. For Rynearson, who was born and raised in Clare, it was more than a fixture of his youth. If the bakery closed, it would be yet another shuttered storefront on North McEwan, Clare’s main drag. Back at the police department over lunch, he convinced eight fellow officers – that would be the entire Clare police force – to chip in and buy the bakery. They tweaked the menu, adding “the squealer,” a doughnut topped with two strips of bacon. And with a nod to the old cop cliché, they renamed the bakery Cops & Doughnuts.

The enterprising officers put billboards on the highway that drew people in from all over. And they created t-shirts and mugs with slogans like “DWI: Doughnuts Were Involved.” The new Cops & Doughnuts was a hit. Now, in the peak summer season, 2,000 people stream through its doors on a typical Saturday, and the bakery employs more people on a fulltime basis than the police and fire departments combined. Its success has spilled over to neighboring businesses, revitalizing downtown Clare and encouraging new shops to open. The cops buy as much as they can locally, from t-shirts to flour to roasted coffee beans. They sponsor a local t-ball team, support the high school band, and give to local charities. Like a low-fat doughnut, it’s a virtuous loop.

There are many one-off examples like that. But for locavesting to live up to its potential, there must be more mainstream options available to investors —both accredited and unaccredited. And they are beginning to take shape within the narrow openings allowed by U.S. securities laws.

One of the leaders in this movement is Slow Money, the organization founded by Woody Tasch. Slow Money chapters around the country have been devising ways to funnel capital to the sustainable food and agricultural enterprises in their respective areas. Slow Money has organized Entrepreneur Showcases, bringing together local investors and entrepreneurs, facilitating $5 million in investments to small-scale food & agriculture enterprises. Local chapters are also creating investment clubs, local funds, and innovative public-private partnerships that meet the needs of their communities.

Other innovators are looking to harness the power of social media to aggregate small sums from many investors. Kiva and Kickstarter have shown the enormous potential of this “crowdfunding” approach. The catch is that in neither case is there any financial return: Kiva’s lenders get their principal back (if all goes well) but no interest–that is kept by the microlending field partners. And Kickstarter is pure donations. In its first five years, Kiva has raised $160 million from 500,000 people for micro-entrepreneurs, while on Kickstarter; people are pledging money at a rate of $1 million a week. Imagine what people would be willing to invest if it were possible to make a financial return? Crowdfunding holds great potential to bring critical financing to companies who are unable to attract investment from banks and traditional funding sources.

That is the next challenge for crowdfunding entrepreneurs, such as, a startup created by Kiva co-founder Jessica Jackley and Dana Mauriello. ProFounder helps entrepreneurs manage the often messy and fraught process of raising money from friends and family. The company prefers to call this “community-funding,” since the emphasis is on an entrepreneur’s social network, rather than an anonymous crowd. ProFounder uses a revenue-sharing model, which is less burdensome for fledgling businesses than equity or debt.

For now, ProFounder is more or less limited to reaching out to friends and family—general solicitation is banned by the Securities & Exchange Commission. If entrepreneurs want to invite a wider circle to invest, they cannot offer a financial return (thus the approach of Kiva and Kickstarter). There are, however, a number of crowdfunding options for accredited or sophisticated investors, such as WealthForge and MicroVentures.

The situation is different in the UK, where securities laws are more accommodating. And no surprise, that’s where the real creative ferment is taking place. Funding Circle, a one-year old website, lets individuals lend money to established small businesses that meet strict minimum criteria. Members are encouraged to form “circles” of interest: circles have formed to invest in Scottish businesses, manufacturers in London, eco-friendly companies, and “High Street” retailers, for example. Funding Circle members invested more than $1 million in small businesses in the month of June alone. (The loans are unsecured, as with other peer-to-peer lending sites, but defaults have been rare). A soon-to-launch London-based site called Seedrs will apply the crowdfunding model to let individuals to make equity investments in small businesses.

This is just a glimpse of the innovative efforts that are transforming the investment landscape. And much more needs to be done—not least of which is to update the anachronistic securities laws that hamper small business capital-raising. Investors are fed up with the Wall Street casino and watching their hard-earned savings sucked into a wealth-destroying bubble machine that serves little social good. Locavesting offers an alternative. It is about restoring a sense of connection between investors and companies, with all of the accountability that comes with that. It is about investing for the long term and supporting job-creating businesses. It is a call to invest, once again, in our communities and to rebuild the economy, one Main Street at a time. Because if we don’t do it, who will?

Article by Amy Cortese, author of Locavesting
For more information on the “Locavesting” book go to

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