WOMEN IN LEADERSHIP | MILLENNIALS - WHAT MAKES THEM TICK?
THE FUTURE OF BUSINESS AS USUAL
IDEAS THAT COULD CHANGE EVERYTHING TRANSATOMIC POWER PANTHEON ENTERPRISES FREIGHT FARMS
EILEEN FISHER THE WEALTH TRANSFER
BUILDING A TIMELESS BRAND
WHO WILL HOLD THE POWER?
SEVENTH GENERATION CEO
JOHN REPLOGLE ON THE COMPANYâ€™S BOLD NEW PATH
FOOD | ENERGY | FINANCE | INNOVATION & DESIGN | LEADERSHIP
WHAT IS CONSCIOUS COMPANY MAGAZINE? For hundreds of years, the one and only measurement of a “successful company” has been monetary. This measurement of success is changing. No longer are people content to judge a company simply by how much money it makes. A new definition of success in business is emerging and it centers on a company’s ability to have a positive effect on society and the environment, in addition to making money. The most successful businesses on earth, and the ones that will enjoy longevity in the marketplace, are the ones that have created new operating models that take all stakeholders into account. We want to celebrate these businesses. Our mission is to help redefine what it means to be a successful business by featuring the stories of companies that operate consciously, by providing their leaders with a megaphone to inspire other businesses to do the same, and by showing the world just how powerful business can be when used as a force for good.
WHY PRINT? Throughout the process of conceptualizing this publication and bringing it to life, we have been asked multiple times about our decision to print this magazine from a sustainability perspective. We not only understand these concerns, but we have wrestled with them ourselves. Our decision came down to our deep desire to spread the word as far as possible about the amazing businesses that will be featured in our pages. Printing Conscious Company Magazine allows us to increase the exposure of our brand through our retailers, expand the conversation about sustainability and social justice, and, hopefully, reach and inspire people who might not otherwise pay attention to this movement. Additionally, we have taken a number of steps to ensure that our printing is done in a sustainable way: we are using Forestry Stewardship Council (FSC) certified paper for all printed material; we are partnering with local Boulderbased PrintReleaf to help reduce our environmental impact by planting trees across a global network of reforestation projects; and we have pending B Corp certification to ensure that we stay on track to meet our sustainability goals. We practice what we preach in all facets of our operations, and we hope you will hold us accountable if you believe that we can do something better.
FROM THE EDITORS Respected readers, Like many sustainability professionals and conscious consumers, we examine many problems across multiple industries. For this issue alone, we looked at waste from the clothing and textile industries, gender inequality in the workplace, and the environmental impacts of cheese, to name just a few. When diving into these issues, it’s easy to feel daunted or frustrated - the more we dig, the more hopeless it can sometimes seem. Yet, in the face of every challenge, there is always a choice: we can focus on the problem, or we can focus on the solution. Or, as Eileen Fisher asks when faced with obstacles, “How is this a challenge and an opportunity?” Here at CCM, we are interested in the companies and leaders who see business opportunities in the myriad problems facing the world today, from Dr. Leslie Dewan of Transatomic Power, who saw an opportunity when she realized that nuclear waste was not a problem to be buried under a mountain, but a source of fuel for carbon-free electricity; to Kim GrahamNye of gDiapers, who saw an opportunity when she realized that disposable plastic diapers were not only wasteful, they were less comfortable for babies and more unpleasant for parents than reusable pants with a flushable insert could be; and to Eileen Fisher, our featured cover story, who saw an opportunity when she discovered the waste and injustice of the fashion industry but also found women looking for lasting, timeless clothing with an authentic story behind it. Each of the leaders and businesses featured in these pages are consciously choosing to innovate within the constraints of their industries in order to be part of the solution - to actually do good with their businesses instead of just doing “less bad.” We founded this magazine with the specific aim of fostering a larger conversation and giving a voice to those who are working to build this better future - a future driven not just by profit but driven by values, ethics, and a long-term perspective, rather than the quarterly report. We all make choices every day about how we want to live, what type of business we want to lead or work for, what types of products we purchase, and what type of energy we put out into the world. We hope the stories in this issue inspire you to notice those areas in your life where you can make a choice, and hopefully encourage you to choose consciously. With immense gratitude, Maren and Meghan
SUMMER 2015 • ISSUE 3 The Conscious Company Magazine Team CO-FOUNDER AND EDITOR-IN-CHIEFTESS Meghan French Dunbar CO-FOUNDER AND COO Maren Keeley ART DIRECTOR Cia Lindgren ADVERTISING MANAGERS Amber Lee Eckert Kate Herrmann COPY EDITORS Jack Mott Robin Dickerhoof TRANSCRIPTIONISTS Joshua Welch Liz Chiodo Jonnifer Cadorna ENERGY EDITOR Pablo Leon MEDIA CONSULTANT Lesley Barnes WEBSITE GURU Jay Mantri & Thrive Consulting Group ADVISORY BOARD Ashley Coale Devon Bertram Emily Olson Katie Dunn Nathan Havey Scott Dunbar Wendi Burkhardt NEWSSTAND CONSULTANT BILL GOLLIHER & FULL CIRCLE STRATEGIES, LLC PRINTING PUBLICATION PRINTERS CONTACT INFORMATION GENERAL INQUIRIES, SUBSCRIPTIONS, AND REPRINTS: email@example.com ADVERTISING: firstname.lastname@example.org PHONE: 720.924.1091 www.consciouscompanymagazine.com facebook.com/consciouscompanymagazine Follow us @ConsciousCoMag
TABLE OF CONTENTS
INNOVATION & DESIGN
ALL ACROSS AFRICA
EMPOWERING YOUNG WOMEN WITH CORA
LAURA ROBERTS OF PANTHEON ENTERPRISES
THE WEALTH TRANSFER
TOP SUSTAINABLE APPAREL COMPANIES
4 WAYS FOR INVESTORS TO SPOT CONSCIOUS COMPANIES
A CONVERSATION WITH JEAN CASE
LEVELING THE PLAYING FIELD FOR WOMEN ENTREPRENEURS AMY CORTESE
JOHN REPLOGLE ON THE FUTURE OF SEVENTH GENERATION
FINDING PURPOSE WITH EILEEN FISHER
3 EXCITING ENERGY INNOVATIONS
HOW A WOMAN LEADS JANET WOODKA
DEB NELSON OF SOCIAL VENTURE NETWORK
MINDFULNESS IN BUSINESS VENERABLE LAMA TENZIN DHONDEN
THE 4TH WAVE OF CAPITALISM BRANDON PEELE
WOMEN IN AGRICULTURE
TOP SUSTAINABLE CHEESE PRODUCERS
PATAGONIA: TAKING ON THE FOOD INDUSTRY
NORTH CAROLINA SUSTAINABLE FOOD PRODUCERS
A DEEPER DIVE INTO BIODYNAMIC CERTIFICATION
In March 2015, Conscious Company Magazine held our official launch party in Boulder, CO. We were delighted and honored by how many members of the community came out to support our evening of storytelling and celebration. The event wouldnâ€™t have been possible without our amazing team and generous sponsors. Thank you from the bottom of our hearts for your support.
Conscious Company Magazine Launch Party Sponsors
INNOVATION & DESIGN
â€œWe put the power into the hands of institutions and individuals who have a need for fresh, healthy, local produce 365 days a year.â€?
oston-based Freight Farms is redefining the local food movement by empowering people to grow food anywhere. Using innovative farms housed in 40-foot shipping containers equipped with vertical hydroponics, LED lighting, and climate controls that interface with a smartphone app, the company is providing an opportunity to grow fresh food year-round in any geographic location (or anywhere that has enough room for a shipping container). Founded in 2010, the company has experienced tremendous growth. The two co-founders, Jon Friedman and Brad McNamara, began experimenting with a beat-up shipping container next to a dumpster and recently opened a new headquarters and training center in South Boston. To date, the company has deployed over two dozen farms in seven states and two countries and recently received a sizable investment from Spark Capital (the same folks behind Twitter, Tumblr, and Foursquare) to help scale the concept. We had the chance to discuss this disruptive innovation with CEO and Co-founder Brad McNamara.
INNOVATION & DESIGN Who is your target market and who has been your “typical” customer so far?
Co-founders Jon Friedman (left) and Brad McNamara (right).
Brad McNamara: We put the power into the hands of institutions and individuals who have a need for fresh, healthy, local produce 365 days a year. Specifically, we are selling to institutional food service providers, restaurants and hospitality groups, wholesale produce distributors, and small-business farmers. In terms of geography, where are most of the units being sold? BM: Most of our farms are being deployed in North America, but we will be in various international markets in the near future. The global demand is off the charts and the fight to end food insecurity and cut out the use of herbicides and pesticides is as strong, if not stronger, globally than it is in North America. What’s the typical payback period for one of the farms? BM: A point of pride is that we empower our customers to create the outcome that is best for them, whether they are a university campus or a single-farm entrepreneur. The payback we’ve seen from customers is two to five years based on crop, market, business model, and whether the customer is using it to drive profits, drive wellness, or feed the local community. Freight Farms uses LED lights in its farms. While LEDs are more energy efficient, are there any growing challenges that come with using LEDs over fluorescent lights? BM: Freight Farms committed to using LED lighting from the start as part of our desire to drive efficiency whenever possible. We’ve spent four years designing our LED lighting to be part of the entire system for optimal performance for the plants. The system is designed to not only take advantage of LEDs’ energy efficiency but also make the most efficient use of space and reduce the number of lights while increasing the number of plants. How are customers responding to monitoring their farms through an app? Are people excited about that feature? BM: The response has been great. The connectivity allows someone with no experience to feel confident and run their farm from day one. Our customers don’t get very excited about features but revel in results, so anything that makes it easier for them to produce food, they love. That’s what we’ve found excites our network of growers the intuitive design and various tools (both hardware and software) that make the technology disappear and allow them to achieve the end goal of local food production. Your company just got a sizeable investment from Spark Capital. Where does Freight Farms plan to go from here? BM: Freight Farms released the newest version of our flagship product, the 2015 Leafy Green Machine, in April, plus a new version of the Farmhand app, and we will continue to deploy farms throughout North America and explore various international opportunities. Looking forward, Freight Farms will continue to build hardware and software products that empower local food production and create commercial food production in places where it was never possible Photos: Freight Farms before. SUMMER 2015
INNOVATION & DESIGN
OMNI ECOSYSTEMS BRINGING CITIES TO LIFE
mni Ecosystemsâ€™ mission is to infuse the urban experience with nature by making living infrastructure - green roofs and green walls - a sound financial investment for building owners. Living infrastructure provides numerous benefits; green roofs mitigate stormwater runoff, reduce urban heat islands, improve air quality, decrease building energy use, increase the lifetime of roofing membranes, decrease noise pollution, increase biological diversity, and create and connect habitats. Additionally, green roofs that are used for food production improve the availability of local food and create jobs. Interior living walls improve air quality by increasing humidity and removing volatile organic compounds such as formaldehyde. Studies have also shown that having more plants in our daily lives improves productivity and happiness. We spoke with Molly Meyer, Founder and CEO of Omni Ecosystems, about how her companyâ€™s breakthrough technology can accelerate the adoption of living infrastructure in more buildings and communities.
INNOVATION & DESIGN Can you tell us the story of starting this company? Molly Meyer: I started the company in 2009, and Michael Repkin and I joined forces shortly after that. Mike and I were each working in parallel on complementary green roofing efforts. Mike had been developing an ultralightweight growing medium that could be used for food production, while I had been designing, building, and maintaining green roofs in Germany, where the green roof market was far ahead of the American market at the time. When Mike and I met, we saw a friction point at the limitations of the existing green roof options and the interests of building owners, and we saw an opportunity to fit Mike’s developments in growing media with the best practices in green roof technology that I had learned in Germany. We utilize lightweight soil and farming to make living infrastructure both good ecological stewardship and a sound financial investment for building owners. How are Omni Ecosystems’ living walls and green roofs different from other models? MM: For green roofs, we created a new green roof technology that is less than half the weight of products supplied by other vendors (therefore requiring fewer structural upgrades) with many times the plant options (like lawn grasses, food crops, and wildflowers). The Omni Green Roof can grow food in as little as 15 pounds per square foot (psf) saturated weight, whereas typical green roof systems require 30 psf to grow sedum [flowering plants] and 65 to 80 psf to grow food. While every roof that is considered for a green roof requires a structural assessment by a licensed structural engineer, the Omni Green Roof is capable of being added to more existing buildings than other systems are. In addition to being lighter weight and providing more plant options, it grows very quickly and has superior stormwater and energy performance to that of other systems. Across the board,
our green roof delivers more - more plant options, more reliability, more environmental benefit - at less weight. Our interior living wall system is unique due to the ease of installation and maintenance. In 2013, we installed the Omni living wall system at Salone Nico in Paul Kahan’s restaurant in the Thompson Hotel in Chicago’s Gold Coast neighborhood. These plants have become the centerpiece of the restaurant - aside from the famous food, of course! Whereas most living wall products require constant plant replacement - as much as 100 percent every six months our system has required less than six percent in the 18 months since installation. Who have been your primary customers so far? MM: Our primary customers are commercial and institutional building owners. We work closely with architects, landscape architects, and contractors to design and install the green roof and green wall systems that we’ve invented. We occasionally do work for residential homeowners as well. What’s next for Omni Ecosystems? MM: We are particularly excited about our strategic partnership with The Roof Crop, which leases and operates Omni’s rooftop farms. Building owners meet their green roof obligations for sustainable development in the City of Chicago, receive rent from The Roof Crop as the “roof tenant,” and have a reliably maintained green roof. The net effect is a green roof that pays for itself and is truly maintenance-free for the building owner. Additionally, the building owner is supporting a new industry, providing jobs in Chicago, improving the environmental impact of their buildings, and increasing the availability of sustainable, local foods. Just this week, Omni completed installation of The Roof Crop’s first leased rooftop farm, which is located Photos: Omni Ecosystems in Chicago’s West Loop neighborhood.
INNOVATION & DESIGN
LAURA ROBERTS, CEO, PANTHEON ENTERPRISES
ON TRANSFORMING THE CHEMICAL INDUSTRY BY BETH GREER
Entrepreneur, innovator, mother of three, and inspiring business visionary Laura Roberts is a woman of contrasts. She was an avid “tree hugger” environmentalist in college, graduated summa cum laude, and was elected to Phi Beta Kappa. She spent 10 years as an elementary school teacher, and then, upon her father’s untimely death in 1997, she stepped into a much different role: running the nontoxic industrial cleaning company he and her mother had started. At first she just wanted to help save the family business, but that morphed into something much bigger. Immersing herself in learning about the chemical industry, she became acutely aware of just how much it needed to change, especially since it was an industry not generally focused on putting sustainability ahead of profits. Becoming the company’s new CEO, Laura set her sights on scaling Pantheon Enterprises into a major chemical company that worked toward changing the way the world thought about toxic chemicals. All the products made by this deeply purpose-driven, conscious company are designed to do a job and then break apart without causing harm. They are used by governments, major commercial enterprises, and consumers around the world. Pantheon was recognized by Ethisphere in 2012 and 2013 as being among the World’s Most Ethical Companies. It was also honored by the EPA’s Design for the Environment program. We spoke with Laura from her headquarters in Phoenix, Arizona, about how she’s transforming the chemical industry and saving lives in the process. 14 |
INNOVATION & DESIGN
Beth Greer: What was the chemical industry like when you became head of Pantheon in 1997? Laura Roberts: There wasn’t a lot of innovation or public awareness about the negative impact of petrochemicals in our ecosystems. Even though it was a male-dominated industry, I never felt powerless being a woman; I felt it brought a different perspective to the table. I became very committed to having Pantheon develop alternative solutions to the way chemicals were being formulated, so that they did not harm people or the planet. It was difficult to do the research necessary to understand how the whole industry operated and what short- and longterm effects chemicals were having on the environment and health. There wasn’t even Google to help! When we first started to grow the business, we were concerned that there were few systems in place to measure the negative effects on people’s health and the environment from chemicals and manufacturing. But big strides have been made around corporate commitments to social responsibility and the need to create more sustainable chemical practices. BG: How challenging is it to be a conscious, environmental, and health-focused chemical company? LR: It’s pretty challenging, but exciting! We not only want to produce better chemistry to help the world, we also want to influence a shift in the way all chemical companies do business. As we have grown, consciousness has been rapidly growing around safer chemicals. We are also talking to universities about how important it is to teach toxicology to students studying to be scientists so they enter the workforce understanding the health ramifications of creating new molecules. That’s why we developed the Principles of Conscious Chemistry to help educate chemists before they get jobs in industry.
THE PRINCIPLES OF CONSCIOUS CHEMISTRY
LEAD WITH AWARENESS
Pay attention to all of the effects of the molecules, compounds, and formulas designed and developed by chemists, and the products derived from them, not just the intended effects.
2 THINK SYSTEMATICALLY
Recognizing that all life is interconnected, consider the systemic implications and effects of the chemicals.
3 CAUSE NO HARM
Design molecules, etc., in such a way that they create desired effects without causing harm to people or natural systems.
4 USE NATURE AS A DESIGN TEMPLATE
As reflected by the field of biomimicry, observe the patterns in nature as a foundation.
DESIGN FOR EFFICIENCY
Use the least possible energy and materials to generate the greatest return.
6 DESIGN FOR SPECIFICITY 7 DESIGN FOR DISINTEGRATION
Design to have no unintended side effects.
Do the job quickly and efficiently, then disintegrate without causing harm or leaving toxic residues.
8 PRODUCE SUPERIOR RESULTS
Design to produce results superior to the results of current options while creating significantly fewer unintended effects.
CREATE COMMERCIALLY SUSTAINABLE SOLUTIONS
The products we create must be commercially applied in ways that are economically sustainable and profitable.
10 COMMIT TO CONTINUAL IMPROVEMENT
We can create solutions that are better than existing options and continually strive to enhance their quality and performance. SUMMER 2015
INNOVATION & DESIGN
“We not only want to produce better chemistry to help the world, we also want to influence a shift in the way all chemical companies do business.” BG: What are you most proud of and what’s next for Pantheon? LR: With our flagship product, PreKote, we’ve eliminated millions of pounds of a highly toxic material from the workplace and the environment. PreKote is a nontoxic surface pretreatment replacement for hexavalent chromium used in prepping aircraft for painting. You may remember this toxin from the Erin Brockovich story - it causes cancer. As a small company, we went up against large chemical companies with our technology to change this industry, and now the majority of US airlines and the US Air Force and Army have adopted PreKote and had better productivity and economic outcomes. Additionally, the workers on these fleets are significantly safer and healthier. We’re also very proud of one of our newest products, ProKure V, which kills germs safely in seconds and prevents microbial resistance because of the way it kills. The current way of using 16 |
disinfectants leaves bacteria behind that mutate, multiply, and create superbugs strains of bacteria resistant to being destroyed by antibiotic drugs, as seen in new strains of MRSA, Enterococcus, and Pseudomonas. Another exciting aspect of this disinfectant is that it breaks down into benign elements whereas other disinfectants leave harmful residues and create carcinogenic byproducts. We would like to see this disinfectant replace standard disinfectants currently being used in every cruise ship, airline, hospital, nursing home, university, childcare, and fitness and athletic center. As a conscious business, we are committed to the health of all our stakeholders: customers, employees, vendors, shareholders, communities, and ecosystems. We want people to see that businesses can accomplish amazing results for both the economy and society and be a force for good. Perhaps we will inspire others to do the same.
Beth Greer, aka Super Natural Mom®, is the best-selling author of Super Natural Home, a foremost expert on toxin-free living, professional speaker, and environmental health advocate. Formerly President of The Learning Annex, she eliminated a tumor in her chest by making small but significant lifestyle shifts. Photos: Gillian Hunter Photography
INNOVATION & DESIGN
b o j e d i s is an in BY SIMON GOLAND
“I am not one of those creative types,” he says. “I am an engineer.”
e is a product manager in an engineering firm. We are in the middle of a workshop series on unleashing individual and organizational creativity and innovation as part of an initiative to create a culture of creativity in the company. There are sixteen senior engineers, product managers, and project managers with me, walking through the woods near the company’s offices. I have introduced the basic principles of Applied Eco-Psychology, which helps restore our relationship to the natural world through direct experiences in nature. After being quite uncomfortable with this experience at 18 |
the beginning, as we progress through the woods, they begin to relax, settle into the activities, and open up more to themselves and each other. I turn to the engineer who described himself as not creative. “I believe I heard that you like to cook. Tell me about it,” I ask. We are all sitting or standing in a circle in a little open area in the woods. “Funny you should ask that,” he says. “Even though I am an engineer, I actually don’t like following recipes. I usually get into the kitchen, open the cupboards and the fridge and look at what’s there. I pull things out and play with them, trying something
different.” Then he adds, “My family usually loves what comes out.” As he is talking, I see smiles around the circle. He does too, and interrupts himself in the middle of the sentence. “What?” he asks. “Did you hear what you just said?” someone asks. He stands still for a very long moment, and his face changes as the new awareness slowly creeps in. “I had no idea,” he quietly says to himself. Over the years, I have encountered many similar situations, where a person carries a deep-seated belief about what creativity is or what it is supposed to look like, and how they
INNOVATION & DESIGN
don’t have it. Almost always, there is a shadow of someone from the past, lurking in the psyche and whispering a message, again and again, “Don’t color outside the lines.” “This is not how you are supposed to draw.” “There is only one right way of doing it (or one right answer).” On and on, the messages repeat and reinforce each other until we start believing that only some people are born creative, that being creative and being artistic are the same thing, and that work and career - and life, for that matter - are a serious business, not to be taken lightly. Contrary to what we heard from parents and teachers in our earlier years, we all have creative fire within us. We have had it since the moment we were born, when we ventured into exploring the world around us. We invented magical objects from sticks. We became dragons, unicorns, kings, queens, pirates, or space travelers, while re-enacting scenarios of adventure for hours on end. We saw shapes in clouds. We talked to ants, trees, and birds. Our creativity was alive and imagination ran our lives. Yet, slowly, day after day, one educational system after another, one authority figure or expert after another, the fire was suppressed, caged, and contained. Tom and David Kelley, of design firm IDEO call it “creative confidence.” Michael Gelb, an international consultant in the area of creativity, talks about the “creative mindset.” I look at it as a way of being, a way of approaching each and every situation with the attitude and belief that we have the creative fire beating strong within us, a steady pulse, just waiting to be unleashed on the next obstacle, challenge, or situation. It is the same fire we had as children, and even if we happen to have forgotten that we have it, it exists in all of us. There are many useful and valuable tools, models, and frameworks for applying creative approaches to the challenges and problems our people and organizations are facing in our 21st century, which are characterized by the increasing pace of VUCA
“We have the creative fire beating strong within us, a steady pulse, just waiting to be unleashed on the next obstacle, challenge, or situation.” (Volatility, Uncertainty, Chaos, Ambiguity). Design thinking, rapid prototyping, brainstorming, de Bono’s Six Thinking Hats, and many others all have their place and value. The starting point of such creative endeavors must be our inner work. Without exploring the beliefs we carry about our creative capacities, the outcomes of applying any framework will be limited at best. We have to come to be present to the cages of our mind and psyche that keep our creative fire contained. Only when we have truly connected with it, identified its cages and guardians, will we realize it was merely an illusion - an outdated belief that does not serve us any more. That is when the fire is unleashed and harnessed and can be applied to our personal and professional challenges. This is one of the areas where Applied Eco-Psychology comes into play. When we actively and intentionally step in and engage with nature, we allow ourselves to reconnect to the childlike part of us; the part that may have forgotten how to be curious, how to look upon the world with wonder, and how to approach life with what Buddhism calls a “beginner’s mind.” This part
of us never doubted our creativity. It is the part within us that needs to come out, unleashing its imaginative spark towards whatever challenge or problem we face by grabbing a framework or a model and beginning the process of applying, experimenting, playing, trying and failing, and ultimately creating something new, unique, valuable, and meaningful. After all, innovation is really creativity applied, and such application will be infinitely more transformational when it is being guided by a liberated, playful, and unleashed fire of a person’s soul. Simon is a contemporary alchemist, facilitating transformational learning experiences in organizational, group, and individual settings. His passion, experience, and continual learning are in the areas of unleashing our energies of creativity and innovation, harnessing these towards the many challenges we are facing in the world around us. Further details about Simon are here: www.SimonGoland.com
INNOVATION & DESIGN
aperFoam, based in the Netherlands, specializes in making bio-based, environmentally friendly packaging materials. Using injection-molded technology, the companyâ€™s unique product combines industrial starch, natural fibers, water, and a premix to create a homecompostable material that replaces traditional packaging products. In addition to being compostable, biodegradable, and paper recyclable, the material is incredibly light, which decreases carbon emissions during transport, and the production of the material uses locally sourced renewable materials and is less carbon-intensive than the production of traditional packaging materials. Companies like Microsoft and Burtâ€™s Bees are beginning to take notice of this innovative company to provide a more sustainable solution for their packaging needs.
Packaging for Veuve Clicquot Champagne
INNOVATION & DESIGN
How did PaperFoam get started? PaperFoam started business in 1998 as a result of research carried out by AVEBE, the potato starch supplier in the Netherlands, which was seeking a bio-plastics application made from starches. After this research was stopped, we continued focusing on injection-molded mixtures of starches and fibers. The PaperFoam material proved to be a great material for making consumer electronics packaging.
• PaperFoam is not applicable in all circumstances, for example in high humidity conditions. • Although we produce worldwide, the distance between our factories and potential customers can prohibit cost-effective deliveries. It is in many cases a voluminous shipment. • Compared to low value packaging, PaperFoam has a higher price. However, compared to many high marketing value packaging options, PaperFoam can be cheaper than conventional packaging materials.
What success has PaperFoam had so far? Who are some of your customers?
What other applications are there for PaperFoam besides packaging?
In our early years, the focus on green solutions was not as big as it is nowadays. We began by focusing on establishing worldwide operations with well-known customers like Motorola, AMD, Philips, etc. At present, we have many customers, not only in the field of electronics, but also in cosmetics, media, medical devices, and food. Some well-known examples of recent and current customers are Microsoft, Plantronics, Burt’s Bees, Philips, Nobel Biocare, Medtronic, Cochlear, Petzl, Nest, Veuve Clicquot, as well as many not-yet well-known startups and local brands. We have production facilities in three locations: North Carolina, the Netherlands, and Malaysia.
There are some other applications for PaperFoam, especially in medical device applications. We are working on those applications, but they are not yet available in the market.
Why doesn’t everyone use PaperFoam? Is it more expensive than regular plastic? Not everybody is using PaperFoam for a variety of reasons: • Although we have existed since 1998, our materials are not yet as well-known as materials like paper, pulp, and plastic.
Packaging for Burt’s Bees cosmetics
What do you see as the future for your company? We are working to expand our sales volumes. To this end, we plan to open PaperFoam production plants in other regions (West Coast US, China, Eastern Europe, and India). As a result, the availability of PaperFoam will grow and find more applications in the market. We anticipate that our growth will be strongest in the medical and pharmaceutical sectors, where the search for green solutions is growing, as well as in specific sectors within the food industry. At present, we are already serving a Dutch egg supplier (Rondeel). In the near future, we will also serve other egg suppliers with low carbon footprint, high marketing value egg packaging made from PaperFoam. Photos: PaperFoam
Packaging for Sonicare
WAYS FOR INVESTORS TO SPOT CONSCIOUS COMPANIES BY JEFF CHERRY AND DANIEL DWORKIN
There is a new era dawning in the world of capitalism and free markets. Massive societal forces - the aging of society, the influence of the Millennial generation, and hyper-transparency driven by social media and Internet technologies - are shifting the landscape for companies in every industry. In his book “Firms of Endearment,” Raj Sisodia profiled 28 conscious companies that outperformed the S&P 500 Index by a factor of 10.5 from 1996 to 2011. Why? Collectively, we are evolving the way we make decisions about the businesses we want to buy from, work for, partner with, allow into our communities, and invest in. As Darden School of Business professor Ed Freeman describes, the shareholder-centric business model of the past is giving way to a more holistic stakeholder theory of business operations. Quality and service excellence are quickly becoming commoditized. Culture, purpose, and mission are increasingly the real differentiators. Understanding this new socioeconomic environment is critical for investors. But assessing the depth of an organization’s “consciousness” demands a different type of analysis - one that uncovers what companies value and how they think and behave. The mosaic of information necessary to certify conscious companies is complex and the current disclosure regime for public companies leaves much to be desired. Organizations like the Sustainability Accounting Standards Board are pursuing a long-term transition towards more transparent reporting practices that speak to “extra-financial” performance. The degree to which such efforts will be successful is unclear. In the meantime, investors must leverage proxies to assess the degree to which companies are truly managing for stakeholders. While such third-party indicators are imperfect, they do provide signals to guide smarter investment decisions. Here are four focus areas to begin your conscious company search. 24 |
EMPLOYEE ENGAGEMENT & CULTURE
According to a Gallup study, companies with high employee engagement enjoy 72 percent greater earnings per share than those with low engagement. Unfortunately, most organizations do not disclose engagement metrics. Fortune’s “100 Best Companies to Work For” is one place to build your understanding of where the most engaged employees work. The Great Place to Work Institute, which surveys about 250 firms yearly, helps Fortune pick the winners. Its methodology takes into account management credibility, job satisfaction, camaraderie, pay and benefit programs, hiring practices, methods of internal communication, training, recognition programs, and diversity efforts. Glassdoor, the online job board that collects data on how employees feel about management, is another valuable resource to use to gather insights into engagement and culture. Although the information accessible via Fortune and Glassdoor is incomplete and subjective, it does begin to clarify how companies relate to their team members.
Loyal customers are among the most powerful determinants of the ability to generate sustainable cash flow. There are a number of solutions available to investors willing to pay to better understand how various organizations drive customer loyalty. Satmetrix provides benchmarks of Net Promoter Scores (NPS) [a metric for measuring customer loyalty data] by industry. wRatings takes NPS a step further by analyzing how more than 3,300 companies across 12 industries meet customers’ emotional and technical needs. If you are not willing or able to invest in these services, another option is to explore the percentage of capital that companies spend on marketing to their customers information that is accessible via many analyst reports. Anecdotally, stakeholder-focused companies invest less capital in persuading customers of the virtues of their products and services. For example, grocery chain Trader Joe’s spends less than 1 percent of revenue on marketing. Since customers of conscious companies are such passionate supporters, they are more likely to be vocal word-of-mouth advocates. So, another way to assess the nature of customer relationships is through examining the volume and tone of social media posts related to the brand. The social analytics company Verifeed provides one way to do so. Combining these methods could be a path to understanding how customers feel about the companies in your portfolio.
“SINCE CUSTOMERS OF CONSCIOUS COMPANIES ARE SUCH PASSIONATE SUPPORTERS, THEY ARE MORE LIKELY TO BE VOCAL WORD-OF-MOUTH ADVOCATES.”
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE RATINGS
Environmental, Social, and Governance (ESG) ratings offer another area of potential analysis. Many “social” or “impact” funds and a number of mainstream fund managers are exploring ways to integrate the multitude of data from ESG ratings agencies such as Sustainalytics and MSCI. This data is necessary when considering how companies manage risk. Good ESG practices generally mean a lower probability of big environmental blowups and financial shenanigans, but they do not necessarily signal consciousness or a belief in the stakeholder model. The environmental pedigree of many of these agencies, the difficulty of attaining metrics for social performance, and a tenuous connection between some of the governance measures and the outcomes they purport to achieve make these ratings insufficient consciousness indicators. We suggest that investors consider this data while acknowledging its limitations. A more robust analysis might also include information on reputational risk and management of intangible assets. The work of Steel City Re and the Reputation Institute provides a place to begin this process.
SUPPLY CHAIN PRACTICES
A thorough review of supply chain practices is a very powerful way to build an understanding of how companies manage for stakeholders. As organizations move up the supply chain maturity ladder and develop mutually beneficial relationships with suppliers, they eliminate headline risks. And when companies treat suppliers well, we can surmise that they also build strong bonds with other stakeholders (like employees), who are often seen as more “core” to their missions. North Carolina State University professor Robert Handfield does excellent research on the impact of supply chain maturity. His work demonstrates how long-standing and evolved relationships with suppliers not only indicate stability, but can also signal companies that are fair, honest, and transparent in their business relationships - all key components of conscious business practices.
“COLLECTIVELY, WE ARE EVOLVING THE WAY WE MAKE DECISIONS ABOUT THE BUSINESSES WE WANT TO BUY FROM, WORK FOR, PARTNER WITH, ALLOW INTO OUR COMMUNITIES, AND INVEST IN.”
The best-performing, most sustainable businesses of the future will be those that adopt the tenets of conscious capitalism. Yet spotting conscious companies is not as easy as we would like. The mix of quantitative and qualitative measures necessary to determine an organization’s consciousness makes for a messy research effort, and most analysts simply do not have the time or patience to do the work. Today, many investors direct their capital towards organizations that embrace some aspect of positive social and environmental impact. Various sustainability- and corporateresponsibility-oriented funds already exist, and that is a good thing. We should continue to support companies that are responsible community members and good stewards of the environment. But there is an opportunity to go deeper - to think more holistically about how to enable and benefit from deeply conscious businesses through investment decisions.$
Daniel Dworkin is a Partner with Schaffer Consulting, where he helps organizations unlock capacity for dramatic, lasting results. Daniel also serves as a project leader for the Rapid Results Institute, which tackles complex global development challenges. He is on the leadership team of the New York City Conscious Capitalism Chapter.
Jeff Cherry is the Founder and Executive Director of the Conscious Venture Lab, an accelerator and venture capital fund for conscious entrepreneurship. He is an evangelist for the transformation of capitalism, attempting to bring whole-brain thinking into the realm of business creation and a more human-centered form of investing. www.consciousventurelab.com
THE WEALTH TRANSFER
The largest intergenerational transfer of wealth the world has ever seen is about to happen, and Millennials and women will soon hold much of the power.
MILLENNIALS $50 $50
The estimated amount of liquid assets currently controlled by Millennials.
The percentage of wealthy Millennials who want to use their wealth to help others.
The projected amount of financial and non-financial assets that will transfer from Baby Boomers to Millennials over the next 40 years.
The estimated amount of liquid assets that Millennials are projected to control by 2020.
The approximate percentage of estates in the US valued at over $5 million that are controlled by women.
The percentage of the wealth transfer that will be inherited by women over the next 40 years.
The estimated percentage of the total private wealth in the US that will be held by women by 2030.
The percentage of wealthy women who have expressed an interest in social and environmental investing (compared to one-third of wealthy men). SUMMER 2015
mpact investment firm Madeira Global is proving that attractive financial returns and social and environmental impacts are not mutually exclusive. Founded by Alexandra Cart and Christina Alfonso, the firm works with asset managers to create new investment products that combine both financial and social returns for their investors. By developing these impact investment products, Cart and Alfonso are facilitating a very important intergenerational dialogue that shifts the focus from the profit-maximization strategies of previous generations to impact-maximization strategies that address the social and environmental challenges the Millennial generation has inherited. We had the opportunity to discuss this important dialogue shift and the most important trends in impact investing with these two pioneers. Can you tell us the story of what inspired you both to start Madeira Global? Christina M. Alfonso: I started my first social venture at the age of 12, converting my then-free middle school newspaper into a hybrid for-profit/nonprofit model that engaged the student body by donating a portion of the proceeds to a local orphanage. I have always been fascinated by dual-purpose business models - ones that were creative enough to be self-sustaining and profit-driven, while still managing to achieve a positive impact. While I did not always envision myself being an entrepreneur, my early professional experiences in investment management shaped my view that innovation in a
stagnant space had the potential to address massive inefficiencies and spark a new wave of interest and a new approach to investing. In recent years, my work has led me to see a very clearly defined gap between supply and demand in the impact investment space, and when we started our own firm, we felt strongly that we would be able to benefit from the agility and risk-taking necessary to achieve what has not been achieved on a commercial scale in this sector. Alexandra P. Cart: Problem-solving is embedded in my DNA. Having worked in both the public and private sectors, and having experienced first-hand their advantages and disadvantages, I wanted to leverage this knowledge to
solve the inefficiencies in both systems. Impact investing, for me, is the perfect confluence of finance and philanthropy. How has your firm grown since you started? CMA: Having worked in both private wealth management and private equity in the US and abroad, I can confidently say that attractive investment solutions relative to social impact are in extremely scarce supply. There is a unique opportunity for first-movers, like Madeira Global, to repurpose investment capital to meet an increasing market demand in the for-profit social sector.
Alexandra Cart (left) and Christina Alfonso (right)
â€œParadigm shifts between Gen X and Gen Y are significantly redirecting capital flows in the global economy.â€? 28 |
APC: We have been incredibly fortunate to be building a business at a point in time when paradigm shifts between Gen X and Gen Y are significantly redirecting capital flows in the global economy. As young women heading into the finance sector, was there any fear involved in your decision to start the company? CMA: Alexandra and I both come from hard-working families and maledominated industries, so I’m not sure we ever gave much thought to what we would be up against in starting our own firm, which I am told by other entrepreneurs is a good thing! Of
which provide the largest distribution platforms for financial products, face a challenging environment to meet impact investment demand. However, key players are overcoming internal bureaucracies and policy hurdles to begin to step into the space. The silver lining lies in the steady demand increase in their investor bases for values-based solutions at both the private and institutional levels. We are unwavering in our commitment to meet this demand and are prepared to join forces with our institutional counterparts to do so. Have you identified any trends in the impact investing world that you can share with us?
the investment process more than any other factor in these cases. What are the most important qualities that you look for in a company that you are considering investing with? CMA: Our expertise is in bringing the environmental, social, and governance aspects of the underlying businesses to light, which extends to their stakeholders and supply chain. This adds a dimension beyond financial return expectations to the investment decision-making process for our investors. So, as you can imagine, a business that shows strong qualities in each of those areas - strong governance
“Almost 70 percent of Gen Ys change their financial advisors once they have discretion over family capital due to the lack of confidence in shared values with their advisor. As for women, within one year of being widowed, 90 percent will change their advisor for similar reasons.” course we knew that we were taking a risk but we also felt very strongly that the timing was right, that the demand would continue to increase, and that we were well-qualified and wellpositioned to lead this effort. From that point forward, it has been a very gratifying labor of love and one that the market has responded to favorably. Have you dealt with any resistance in your industry on account of your gender or age or both? APC: One of the reasons that Christina and I partnered is because of our shared values and work ethic. We both aim to under-promise and over-deliver. There are, of course, judgments that get made; however, we let our work stand on its own merit and we’ve found that that is the most productive way forward. What have been your largest challenges so far and how have you faced them? CMA: Naturally, as an early entrant to the market, there is a lack of supporting infrastructure and processes in place for pioneering firms like Madeira, and impact investing as a whole. Today, global banks,
APC: Digital platforms, which provide unprecedented access to information, have granted Millennials (aka “Gen Y” those born between 1980-2000) access to the harsh realities of inequality, injustice, and social issues across the globe. These Millennials have shown an increased interest in working for, investing in, and buying from socially responsible companies. Given that Gen Ys are set to receive $42 trillion dollars from Baby Boomers in the coming decades, I think there is enough purchasing power for this trend to have enduring influence. Given this expected wealth transfer to women and Millennials, do you think there will be a commensurate increase in impact investing? APC: Yes, absolutely. Millennials have shown themselves to be extremely interested in impact investing. Almost 70 percent of Gen Ys change their financial advisors once they have discretion over family capital due to the lack of confidence in shared values with their advisor. As for women, within one year of being widowed, 90 percent will change their advisor for similar reasons. In short, investors are making decisions based on their values and this is proving to inform and drive
qualities in particular - would have qualities that, not surprisingly, lead to stronger growth performance in the long run. What advice do you have for other mission-driven entrepreneurs? APC: We believe in the power of social entrepreneurs to deliver solutions to the problems that face our societies and environment. Governments and NGOs have proven to be challenged in facing these complex and seemingly insurmountable issues alone. Thankfully, the private sector has risen to the challenge, led by social entrepreneurs, to channel muchneeded capital to businesses that have the potential to create lasting change. We fully support their efforts and will continue to work as a facilitator in bringing commercial viability to this growing segment of the market. What’s next for Madeira Global? CMA: Our aim is to broaden our reach as a firm and to continue to work with asset managers and our network of investors to bring scalable impact investment products to the market.$ Photo: Madeira Global
LETTING URGENCY CONQUER FEAR WITH
JEAN CASE “If failure happens, we need to commit to fail fast and ‘fail forward’ so there is future value in what didn’t work.” If there’s one thing that we know about philanthropist, investor, and trailblazer Jean Case, it’s that she is fearless. She built a career as a technology executive spanning nearly two decades before she and her husband, Steve Case, created the Case Foundation in 1997. With Jean at the helm, the foundation focuses on creating programs and investing in people and organizations that harness the best impulses of entrepreneurship, innovation, technology, and collaboration to address urgent social challenges. We had the chance to sit down with this visionary to discuss everything from failure to the evolution of the impact investing movement.
What is your personal definition of impact investing and what do you wish everyone knew about impact investing? Jean Case: For too long, businesses - especially entrepreneurs - have been left on the sideline when it comes to addressing big social challenges. Impact investing is one big way to change that. We define impact investments as investments into companies, organizations, and funds seeking to generate both social and financial returns. Steve and I have long considered social impact when making investments - we prefer investing in companies where we believe in the mission and the potential ability to solve problems and change the world. It’s early days, but there is no doubt
“We made big bets, experimented early and often, made failure matter, reached beyond our bubble, and let urgency conquer our fear.” that there is growing momentum in the impact investing sector. An ecosystem is filling out with more data available to help guide interested investors. This past year, the Case Foundation introduced a Short Guide to Impact Investing (shortguide.org) as a tool for those getting started. What trends are you seeing in the impact investing world? JC: We have seen some significant signals that the impact investing market is taking off. New investors, some of whom were even previously naysayers of the impact investing space, are jumping into the game. In the past 12 months alone, Bain Capital announced that it will launch a new impact investing focused group headed by former Massachusetts governor Deval Patrick; BlackRock announced the launch of BlackRock Impact, a business unit dedicated to impact investing; Etsy, a B Corp, debuted its IPO; and world-class, savvy investors like Bill Gates invested in impact-driven companies like Change.org (a B Corp) and the Unitus Seed Fund, while Marc Andreessen invested in AltSchool, which is also a B Corp. Are there any innovations or new tools in the investing world that show promise for creating more impact? JC: In addition to companies that are attacking big social challenges, I believe the momentum for impact investing will increase in areas like social impact bonds (SIBs) [for more on SIBs, see Anna Bowden’s article in Issue 2]. These financing tools put a heavy focus on measurement and outcomes, which will have a spillover effect to make programs more effective. For too long, public funding has been extended toward programs 32 |
that show little efficacy or impact in areas they target. And yet, year after year, these programs continue to get funded. The SIBs model appeals to taxpayers, governments, philanthropists, and the private sector because it represents a unique partnership model that infuses private sector resources to fund evidence-based interventions in areas ranging from education to healthcare to unemployment. These new models hold the potential to illuminate what works and what doesn’t and to optimize both delivery of service and tax dollars. How do you identify the ideas or people who are changing the world and that you might want to invest in? What qualities do you look for when you’re investing in a company? JC: As we approached our 15-year anniversary at the Case Foundation, we began to reflect on what made us, and our many partners, successful over the years. We found that we were most successful when we, and the organizations and entrepreneurs we invested in, were fearless. We made big bets, experimented early and often, made failure matter, reached beyond our bubble, and let urgency conquer our fear. Together these principles form a powerful way of thinking about effective philanthropy and change-making one that we think will be important in meeting the challenges that confront us for generations to come. Women are loaned $1 for every $23 loaned to a man - how can we go about changing this? JC: Raising capital from investors has long been key to women’s economic development - from Africa to Silicon Valley. Yet the percentage of venture
capital going to women-led businesses is just 13 percent. This number must grow. As investors, we have to break into the cycle and invest in women. Women’s empowerment is front and center this year as more companies and countries are fast-tracking initiatives to invest in female entrepreneurs. They recognize that women are crucial to economic growth around the world. We know that women-led high-tech startups are more capital-efficient, achieving 35 percent higher returns on investment. And when venturebacked, they generate 12 percent higher revenue than male-owned tech companies. At the Case Foundation, we have proactively taken strides to invest in women and support female entrepreneurs, from our support through grants to entities like the Startup America Partnership (now UP Global) and by funding leading female social entrepreneurs like Barbara Van Dahlen of Give an Hour, Barbara Bush of the Global Health Corps, and Reshma Saujani of Girls Who Code. One of the things that holds many entrepreneurs back is fear. The Case Foundation espouses a fearless approach to social change. What do you recommend to people who have big ideas, but who are being held back by fear? JC: The Be Fearless platform is really about a set of principles that, when applied, often lead to success when building companies or movements. It’s important that those out to change the world with a big idea understand that to find new ways to solve old problems, we need to try new things. Trying new things, or innovating, involves risk-taking and the potential for failure. If you look at successful entrepreneurs and innovators, you’ll see a road strewn with failures on their way to a
breakthrough. The same is true in the work of social innovation. As a sector, we need to recognize this, and if failure happens, commit to fail fast and “fail forward” so there is future value in what didn’t work. Can you tell us about a few businesses that you see as especially remarkable or innovative? JC: I am especially inspired by the work of Revolution Foods and its co-founders Kristin Groos Richmond and Kirsten Saenz Tobey. They had a vision to dramatically increase access to healthy and delicious meals for children in schools across the country. Today, they serve more than 1 million “chef-inspired, kid friendly” healthy meals each week in cities across the US. Shazi Visram and Jessica Rolph of Happy Family are two social entrepreneurs who sought to make nutrient-rich baby food that was widely available and affordable. They have provided more than 5 million meals for children in need through partnerships with organizations like FEED and Project Peanut Butter, an organization that helps feed children in Africa. And Chuck Slaughter of Living Goods, a company that empowers micro-entrepreneurs to deliver lifechanging products, like mosquito curtains and AFRIpads [washable sanitary towels], to the doorsteps of the developing world. These founders have disrupted industries and made markets for social good. What is inspiring you right now or giving you hope for the future? JC: Today there are more than 1,500 fully certified B Corps in 39 countries across the world, yet more than 15,000 companies use their impact tools. This seems to suggest that there are tremendous possibilities to expand the tent for companies who want to measure social impact as a core part of
how they manage and measure their success. I look forward to witnessing the growth of the B Corps movement and the new breed of entrepreneurs and social enterprises out to change the world. Your organization is very transparent about both successes and failures. Has it ever been difficult to share those failures? Can you tell us what you’ve learned from failure, either professionally or personally, that has served you well in your career? JC: It’s never easy to talk about failure, but it’s important to have that conversation. In 2012, I wrote “The Painful Acknowledgement of Coming Up Short,” which admitted the large failures we had with a high-profile clean water initiative in sub-Saharan Africa that we helped lead. It was hard to admit our failure, but we found that people embraced our transparency and were eager to share their own stories. Since that time, when we publish findings from programs or initiatives we undertake, we try to make sure we talk about what didn’t work, as well as what did. I don’t know many companies, movements, or causes that can claim 100 percent success at every single thing they attempt. We need the same honest recognition in the social sector so we don’t shy away from trying new, innovative approaches out of fear they might not work. The world’s needs are great and they are urgent. Martin Luther King Jr. talked about “the fierce urgency of now” as he looked at a hurting world. For those bold innovators out there who want to bring new ideas to our communities, our nation, or the world, but sometimes can feel daunted by the fear of failure, I would point them to the last principle in our Be Fearless work: “Let urgency conquer fear.” $ Photo: The Case Foundation
WHAT ARE YOUR TOP THREE PIECES OF ADVICE FOR MISSION-DRIVEN ENTREPRENEURS?
Know what is at the heart of what you are trying to achieve. We like to ask, “What problem are you trying to solve?” Companies who succeed at building a great business that has big impact generally find that being excellent in their core products and services builds the scale and sustainability for maximum social impact over time.
Choose partners and investors who are in lockstep with your company’s social mission, so that when tensions arise, everyone has the same value set against which decisions are made.
Develop a solid business model that can allow you to scale and sustain your business. If your business model ensures that as the company grows, so too does the impact, you’re on the right track.
Leveling the Playing Field for
WOMEN ENTREPRENEURS BY AMY CORTESE
omen have been a bright spot in the economic recovery. Whether it is the rise in social entrepreneurship, Millennials steeped in a DIY culture, or a more pragmatic necessity to reinvent oneself for the new economy, women are starting up companies like never before - at one and a half times the national average. And they are leading their male peers in job creation among private firms. Minority women, in particular, are driving this entrepreneurial growth.
Yet for all their success, women still struggle to get the capital that they need to fully pursue their dreams. Just $1 out of every $23 in small-business bank loans goes to women-owned businesses, even though they represent 30 percent of all small firms.1 And women-owned businesses are denied at twice the rate of their male peers.2 Many women and minorities don’t even apply for loans for fear of being rejected. (It could be worse: as recently as
1988, when the Women’s Business Ownership Act was passed, some states required women to have a male co-sign before they could get a business loan!) Loans are just one part of the picture. For promising startups that don’t yet have the revenues to pay back a loan, equity is a critical form of capital, whether it comes from friends and family, angel investors, or venture capitalists (VC). But here, too, women lag. Women receive just 2 percent of total funding from out-
If women were as economically engaged as men in the economy, the nation’s GDP would be 7 to 9 percent higher.
2% Women are 50 percent less likely to seek outside funding
Women receive just 2 percent of total funding from outside equity, compared to 18 percent for men
Only 2.7 percent of companies that received VC funding between 2011 and 2013 had a female CEO
side equity, compared to 18 percent for men,3 and only 2.7 percent of companies that received VC funding between 2011 and 2013 had a female CEO. In fact, women are 50 percent less likely to seek outside funding. And venture capital is often a clubby male bastion that is hard for female entrepreneurs to breach. Often, factors such as lower revenues, credit score, geographic location, and industry sector can conspire to put capital out of the reach of women entrepreneurs. Sometimes it’s their own lack of confidence. In other cases, there may be subtle discrimination at play. Either way, when half the population is held back from taking full advantage of economic opportunities, we all suffer the consequences. As Sallie Krawcheck, the head of the women’s network Ellevate and co-founder of an index fund that invests in companies with women represented in their leadership ranks, has said, if women were as economically engaged as men in the economy, the nation’s GDP would be 7 to 9 percent higher. But there are signs that things are beginning to change. Angel networks and venture capital firms are arising to focus on this vast underserved market. Meanwhile, technology is transforming the financial world and breaking down some of the barriers that have kept women and other entrepreneurs back. Crowdfunding, for example, allows entrepreneurs to bypass traditional gatekeepers and reach out to their affinity groups and social networks for funding, in return for rewards or a financial stake. And a new crop of online lenders is using big data to assess risk in new ways, allowing them to lend to entrepreneurs that banks would sniff at - and approve them in a matter of minutes. These developments promise to level the playing field for women entrepreneurs. According to one recent report, “Stand out in the Crowd: How Women (and Men) Benefit from Equity Crowdfunding,” women are achieving a higher success rate raising investment capital
“When half the population is held back from taking full advantage of economic opportunities, we all suffer the consequences.”
online than they are through traditional offline channels: 24 percent for online compared to 19 percent for offline. CircleUp, an equity crowdfunding platform that targets emerging consumer brands, reports that women-led businesses closed their rounds successfully at a 21 percent higher rate than men on the platform did. Women lead nearly two-thirds of the companies that have successfully raised funds on the site. The findings add to a growing body of data that shows women have been successful with rewards-based crowdfunding (where rewards are given to backers in lieu of a financial return). For example, on Kickstarter, one such popular site, women are 13 percent more likely to meet their goals than men are - even for technology projects. They do even better on Indiegogo, where 61 percent of women tend to meet their goals. Other sites, such as Plum Alley, focus exclusively on women. A similar trend is taking root in online lending. At Biz2Credit, a website that matches small business borrowers with lenders, approval rates for women-owned businesses have risen. Last year, 15.3 percent of such loans were approved, up from 11.7 percent in 2013, according to an analysis by the company of more than 15,000 loan applications submitted on the site. However, that still lags behind male-owned businesses, which were approved at a rate of 21.5 percent, up from 18.8 percent in 2013. More encouraging, the volume of loan requests from female entrepre-
neurs increased significantly, with 36 percent more women entrepreneurs applying for credit last year. That suggests that women are feeling more confident about their businesses and are getting beyond their fear of rejection. In fact, the Biz2Credit study found that average revenues and earnings increased significantly in 2014 for women-owned businesses. “Our analysis shows that a gender gap still exists, despite the increased profitability that we are seeing with women-owned business in recent years,” said Rohit Arora, CEO of Biz2Credit. “However, women entrepreneurs should feel a sense of optimism, as the numbers indicate that the gap is narrowing.” At Fundera, another loan-matching site, women make up 25 to 35 percent of loans approved on the site. The new financing options could set off a virtuous cycle: more capital means more women will succeed, creating a base of successful female entrepreneurs who may go on to be angel investors and take a chance on other women entrepreneurs. And that would be good news for us all. $ Amy Cortese is a journalist whose work has appeared in the New York Times, Businessweek, and other publications. Her book “Locavesting: The Revolution in Local Investing And How To Profit From It” helped popularize the concept of community capital. Her latest venture, www.locavesting.com, is a hub for local investing news, education, and resources.
 http://www.microbiz.org/wp-content/uploads/2014/07/21st-Century-Barriers-to-Womens-Entrepreneurship.pdf  https://www.econbiz.de/Record/access-to-credit-by-small-businesses-how-relevant-are-race-ethnicity-and-gender-asiedu-elizabeth/10009706386  http://www.nwbc.gov/research/high-growth-women-owned-businesses-access-capital
A NEW TOOL FOR RAISING CAPITAL:
THE DIRECT PUBLIC OFFERING
ne of the biggest hurdles for many new ventures, especially mission-driven ones, is raising capital. Entrepreneurs often get conflicting advice from their various advisors and are encouraged either to find an angel investor or get a traditional bank loan. Enter the Direct Public Offering (DPO), a relatively little-known way to legally raise capital from anyone using public advertising. From brand-new startups as well as companies (and nonprofits) that have been around for decades, any social enterprise that wants to raise at least $200,000 in investment capital, has a compelling story, and has the ability to pay a reasonable return to investors could be a good candidate for a DPO. We spoke with attorney, consultant, and DPO expert Jenny Kassan about this innovative tool. Jenny Kassan
Can you provide us with an example of a success story of one of your clients who has actually gone through the DPO process?
finance the buyout. They had put in a ton of time and energy and money to grow the business to the level of success that they were having and they needed to be compensated for that, but the workers didn’t have the money to be able to pay them for that value. So they Jenny Kassan: Real Pickles was started by Dan Rosenberg did a Direct Public Offering to raise money from the and his wife, Addie Rose Holland. They were committed community to finance the buyout and to finance the to making pickles the old-fashioned way, with a focus growth of the company. We helped them put that all on supporting local farmers in western Massachusetts together. When it was who used best practices approved by the state and providing them securities regulators, with another source they started to get the of income. They were word out with events, starting to have a lot mass email blasts, social of success, but they media, and working wanted to stay at a size with supporters, and that would allow them Understand that if the cookiethey were actually able to really continue to cutter approach that’s often used to achieve their goal of be completely true to raising $500,000 in just their values, such as in the Silicon Valley-style high two months. knowing their farmers and treating them really tech companies is not working Why aren’t DPOs more well. common? Another big value for you, that doesn’t mean for them was to be able to sell their business to there’s anything wrong with you. JK: That’s a really good question. My guess is their workers so that It might just not be a good fit that a lot of people are they could participate really confused about in the success of the for your type of business. securities law. They business, but they had don’t know what to figure out a way to
dumb, or your business is crap. It just means you’re is and is not legal. There’s a lot of misinformation part of the 99 percent for whom that model doesn’t out there. Even lawyers who should know better work. are telling people the wrong information, like “You Also, realize that sometimes that model doesn’t cannot raise money from unaccredited investors,” create great outcomes for the people who do receive which is not true. There are lawyers and advisors that money. Oftentimes they can get fired from their who are stuck in a certain model, a very cookie-cutter own company or they can be asked to do things they approach that works really well for a tech company don’t want to do. I just wish people could see that but does not work for other businesses, but that’s all it’s just one model and it works for some businesses, they know. They can’t open their minds to the fact but there are other models that can be way better that there are other possibilities. depending on your situation, of course. Also, in some ways the JOBS Act of 2012 created even more confusion because it changed the law, and What are the a lot of hype and challenges misinformation associated with got spread and the Direct Public made people even Offering? Have more convinced you had any client that until that companies that have new crowdfunding had a hard time exemption went Being able to ask for smaller dealing with the fact into effect, it was that all of a sudden illegal to raise amounts and going to people they’re gaining a lot money from the more stakeholders crowd, which is not who you know really understand in the company and true. Whether the a lot more people to JOBS Act had passed what you’re all about and deal with? or not, it’s been support what you do - it just legal for decades. JK: So far, I’ve been That’s my guess as feels way more really surprised to why they’re not at how little of a more prominent. comfortable, and fun. problem that has But we’re definitely been for everyone trying to change I’ve worked with. I that. had one client that had over 1,000 investors. At Cutting Edge Capital, What are the top things that you wish people knew where I was CEO for five years, we had about 60 about DPOs? investors. Most of my clients have been somewhere in between those two and I haven’t heard a single JK: First, there are now legal ways to raise money complaint about that. Because the minimum amount from the general public, including both accredited that can be invested is low, usually about $1,000, and unaccredited investors. The process isn’t as the investors are not putting in more than they know easy, usually, as starting a Kickstarter campaign, they can afford to lose. They know it’s a high-risk but it’s not that difficult. Don’t be intimidated by investment. They’re busy people and they have other the process. The government staff in the securities things going on in their lives, so they really don’t division in each state is there to help people do this tend to get very involved or want to micromanage type of thing. everything. I have yet to hear a single issue where an Also, understand that if the cookie-cutter investor has become a thorn in the side of a company. approach that’s often used in the Silicon Valley-style If anything, it’s the opposite. We almost had trouble high tech companies is not working for you, that sometimes getting our investors to respond to us. doesn’t mean there’s anything wrong with you. It Obviously, you do have to track all your investors might just not be a good fit for your type of business. and make sure you have their current addresses and Less than one percent of businesses are funded by all of that. Another thing is, unlike a loan where angels or venture capitalists. If you’re going out you’re making a monthly payment, most of our trying to raise money that way and it’s not working for you, that does not mean that you’re bad, you’re
clients were only making an annual payment. So, it’s really just once a year that you have to look to make sure you’re calculating the payment correctly, have the right address to send the check to, etc. It’s not that challenging or demanding at all. If anything, it may be less so than when you bring in one large investor where, because they put in so much money, they want to have control. Can you explain the difference between a DPO and equity crowdfunding? JK: I don’t love the term “equity crowdfunding” because it implies that when you’re raising money, you have to offer equity. There are many different kinds of securities that you can offer when you’re raising money. I prefer the term “investment crowdfunding,” because you may offer a debt instrument, too. People have gotten really creative
It feels like a barn-raising for your business.
with debt instruments, such as setting up royalty payments where the amount you pay depends on how well the company does. I don’t want people to feel like they have to offer equity. It’s not right for everyone. Some people love to offer equity; some people would rather do debt. A DPO is a way to do investment crowdfunding. The law that was adopted in 2012 that hasn’t come into effect yet under Title III of the JOBS Act offers another tool for investment crowdfunding with a crowdfunding exemption. This will add another tool in the toolbox, but there are already many tools for doing investment crowdfunding and they all have their pros and cons. There’s a disparity with regard to the amount of money that’s loaned to women versus to men. I’m curious if there are tools that women should look into to help them remedy that gap? JK: I was a woman CEO and I raised money for my business and I’ve tried different ways. I’ve tried using the DPO model and I’ve tried taking it to impact investors. Personally - and I wouldn’t be surprised if this were true for a lot of women - it’s more
comfortable for me to be able to go out to a larger population of potential investors instead of having to go to a small group of impact investors. It’s hard to even get an appointment with them, and they can be really intimidating. Even impact investors usually are looking for a high-growth business with a potential for an exit at a high multiple. So if that’s not what your business really is, it can be really frustrating to talk to those investors because they just don’t really see the value in your model. Being able to go out to a larger community of potential investors - who can include your customers, your friends, your neighbors, your fans - is a much friendlier way to raise capital. I don’t like to generalize too much, but I think for a lot of women, we love to be a part of a community, and if we can invite our community to become investors, it feels really good. Again, I hate to generalize, but I know a lot of us women are afraid to ask people to take
risks on our business because we know our business is risky, and it’s scary to say, “Yeah, put your life savings on the line for my business, which I think is going to succeed, but I don’t know for sure.” When you can spread that risk among a larger number of people who are putting in an amount that they can afford to lose, it just feels so much more comfortable. You know that no matter what happens, you’re not going to ruin anyone’s finances. I know for me it felt a lot more comfortable than the other route. Not to say that it was easy, though - you’re still having to ask for money and that can be challenging for a lot of us. But being able to ask for smaller amounts and going to people who you know really understand what you’re all about and support what you do - it just feels way more comfortable, and fun actually. It was scary at first but the more we did it and the closer we got to reaching our goal, it started to get fun. People started to help us. We would talk to someone at a conference and they would call all of their friends, and they’d say “Do you know Jenny’s raising money? Come on, you should go invest!” You can’t do that if you’re raising money in the more traditional way. It feels like a barn-raising for your business. $
THIS 28-YEAR-OLD HAS CREATED OVER 3,000 JOBS
licia Wallace is the Co-founder and COO of All Across Africa, a missiondriven business that connects consumers directly with artisans in Africa. Operating as both a certified B Corp and a member of the Fair Trade Federation, the company sells an assortment of products - from beautiful baskets to jewelry - made by women in places like Rwanda, Burundi, and Uganda to break the cycle of poverty in those countries. We had the chance to speak with this pioneering Millennial about her inspiration for starting the business and forging her own path.
What can you tell us about the start of this business and your journey to becoming the COO? Alicia Wallace: I studied economics in college and began to travel the world. My first trip to Africa was in 2009, to Sierra Leone. My heart was stirred and I knew the corporate path I had planned for my future would be directed toward making an impact and changing the face of poverty. I did not, however, know how I would do that - I spun my wheels looking for a real, tangible way to do this and ran into a lot of roadblocks. I met Greg Stone, my current business partner, when he was leading a nonprofit that helped genocide survivors. We both had a heart for business and together, with his experience and my passion for operations, we made a great match and have grown All Across Africa into a social business now employing 3,000 people. You have taken on a very important role at a relatively young age. What advice do you have for other young people who have big dreams? AW: I have worked really hard, and not all of it was gratifying or made the world a better place. I put in a lot of time and energy that I didn’t get a tangible return or immediate good feeling from. Something that is challenging Millennials is their desire for meaning, purpose, and joy in each job they have. However, we have to be willing to not only do what we think are “fun” or “worthwhile” things, but also put time into hard, challenging, and unrewarding tasks. It breeds perseverance, which I believe is one of the most important characteristics of business leaders. We have to find a way to work with a good attitude and willingness to learn and master anything, whether it’s fun, a passion, or not. I worked at a law firm for five years in college to get out of debt quickly. Did I love it? No. Did I have fulfillment and purpose there? Not in a tangible sense, but I worked hard to create purpose and a reason for why I was there. I had a goal and knew that if I
wanted to be an entrepreneur or work to change the world, neither would pay well initially. A good paying job mattered; the experience of helping run the business gave me insight and opportunities for growth. The pay provided me with financial stability, and it never once took me away from my dream and vision of doing something big. I was even able to foster a culture of volunteerism, and got the staff out of their offices once a month to serve food at a shelter. I focused on my personal purpose and being intentional while I was there. Lastly, listen to your experts, but don’t always trust them. I had a lot of people tell me I needed corporate experience, field experience, and an MBA in order to be a program manager. I listened to my experts and created a life plan around those needs, but along the way, a door opened and I learned I could be a decision-maker without all of those requirements. I listened to my experts, but also still sought more information for myself; I’m so glad I did. I didn’t have to wait 20 years to get my dream job! What are you most proud of at All Across Africa?
I’m also proud our scale has reached Burundi and Uganda to expand into underserved populations there. We’re training and creating opportunities for the craft to be revitalized in Burundi, since it had been lost after years of civil war and destruction. Hundreds will be trained and employed in the artisan sector. Has incorporating sustainable business practices benefited the company’s bottom line? If so, how? AW: Building a sustainable business has both short- and long-term benefits. For us, we’ve seen how consumers are willing to respond to honest, transparent companies looking to do business in a better way. Connecting with a similar population that wants to see business as a force for good has directly related to increased sales. Building a sustainable business reduces turnover and expenses that accrue during recruitment, training, and hiring. Training people right and having your values at the core of each decision makes people want to stay with you and your company longer.
AW: I’m most proud of our team’s ability to sustainably scale - we work extremely hard to keep thousands of artisans busy year-round and we operate sensitively within their cultural contexts. We’ve heard some in Rwanda say the basket business is dying or dead - I love that we see so many ways to expand and grow markets for these artisans. For some of the artisans we work with, it’s the only thing they know how to do to generate income for their family. It’s a cultural and traditional craft that shares a message of unity, hope, and friendship with the world. Coming from a country that has been devastated by genocide, it’s a strong and true testament of strength and perseverance and of the human condition - for love and hope.
We’ve seen how consumers are willing to respond to honest, transparent companies looking to do business in a better way.
What advice do you have for other mission-driven business leaders? AW: Find others along the way to partner with, encourage, and help lead with you. So often we think only we know our space or that we are the only ones faced with certain challenges. It takes a humble leader to reach out and ask for help. The great thing about bringing others into the fold is that you have people alongside you when you succeed and when you fail. As a businessperson, it’s likely that both are going to happen. My business
partner and our team of friends and advisors create more value, more jobs, and navigate the unknown waters ahead together. It’s so much better together. Where would you like to see All Across Africa go in the future? AW: Our goal is to see All Across Africa employing thousands more across the continent of Africa by connecting each American home to handmade products that provide dignity and purpose to their creators.
We want to change the perception of Africa from being one big scary continent to being a place of diverse countries, cultures, and people that bring value and tradition to our busy everyday lives. In return, we want to see consumers change the face of poverty - when we begin to buy from them, they have money to purchase goods in their local markets, which creates more income, jobs, and demand. It circles back around, stimulating their economy and creating a larger need for local businesses. Photos: All Across Africa
Creating Opportunities for Healthy and Inspired Women
ost women know little about the integrity of the menstrual products that they use and their effects on their bodies. The conventional, non-organic tampons that most women use are made with rayon, a synthetic material that increases the risk of Toxic Shock Syndrome, and with cotton that has been contaminated with toxic pesticides that have been linked to cancer, infertility, and other serious illnesses. The cotton bleaching process also produces a chemical byproduct called dioxin, a known carcinogen that accumulates in the body with exposure over time. The average Western woman will use 11,000 to 16,000 menstrual management products in her lifetime. That is ten years of cumulative direct exposure to these harmful chemicals and materials. Furthermore, many girls in developing countries are unable to afford menstrual products, so they resort to using old rags, mud, and even animal dung to manage their periods, which are ineffective and can cause serious infections that are difficult to treat. Unwilling to risk a humiliating leak in public, girls will stay home from school during their periods, causing them to fall behind in their studies or drop out completely. In India, only 12 percent of girls and women have access to and can afford sanitary pads. Not surprisingly, 23 percent of girls in India drop out of school when they reach puberty. These figures mirror those for girls across the developing world. Cora is solving this problem by utilizing the one-for-one model, which has been popularized
by TOMS Shoes and Warby Parker. The company makes safe and healthy organic menstrual products more accessible through convenient monthly deliveries, and for each monthly shipment to a customer in the US, the company provides a month’s supply of its Anandi sanitary pads to a girl in India so she can stay in school during her period. Anandi pads are made from environmentally sustainable plant fibers, making them disposable, biodegradable, and affordable. They’re made by women in small-scale manufacturing units in rural villages and urban slums throughout India. These manufacturing units create jobs for women, support the local economy, and create an affordable source of sanitary pads for the entire community. We spoke with Molly Hayward, Founder and CEO of Cora, about this inspiring endeavor.
THE GOODS • One-for-one model: for every monthly box shipped, a month’s supply of sustainable, biodegradable sanitary pads is sent to a girl in need in India so she can stay in school during her period. • Menstrual products are safe, healthy, organic, and biodegradable. • Customers can customize product variety and quantity that they receive.
“I believe in the responsibility of businesses to solve and mitigate social and environmental problems as much as any individual.”
What inspired you to start this company? Molly Hayward: I spent years travelling to developing countries as a student, as well as on my own after college - from Vietnam and Cambodia to Kenya to India. I was always focused on women’s education and economic empowerment, and when I learned that an estimated 100 million girls in developing countries stay home from school during their periods each month because they can’t afford menstrual products, and met girls for whom this was true, I immediately wanted to start a company that would serve as a catalyst for ending this injustice and removing this barrier to education that they face. I decided on Cora’s current model because I also wanted to improve the experience of menstruation for women in my own society - to provide them with safe and healthy organic products in a convenient and fully customizable
format that focuses on their physical, psychological, and spiritual well-being as women - and connect them with women and girls around the world in our one universal experience as women: menstruation. Can you tell us more about your decision to be a for-profit company, rather than becoming a nonprofit? MH: I believe in the power of the market and profitability to propel social change. I also believe in the responsibility of businesses to solve and mitigate social and environmental problems as much as any individual. When I founded Cora, I saw an opportunity to engage the woman in my own society who purchases menstrual products by necessity each month and to connect her with the social and environmental issues that are associated with menstruation and women’s health globally. I love the idea of taking something that all
women need and purchase and tying it in a quantifiable way to a cause. Our customers know that getting their monthly box in the mail means a girl in India is getting the products she needs, too. Our boxes literally change lives. Entrepreneurs like Yvon Chouinard [of Patagonia] and Anita Roddick [of The Body Shop] have inspired me from the beginning because they didn’t start their companies with the intention of becoming global do-gooder brands, they just wanted to incorporate the beliefs they held and the lifestyles they valued into the products they sold. For the same reasons, we became a certified B Corp through B Lab last year to firmly establish our belief in the power of profit to fuel movements, because we knew it wasn’t about creating another charity and simply asking for help - it was about creating awareness and changing women’s lifestyles, and in turn fostering social and economic justice for those in need.
What are the top three pieces of advice you have for other mission-driven entrepreneurs?
We’ve all experienced businesses and their messages as clichéd, lame, canned, and talking at us, not talking to us. The most exciting thing you can do as a company today is to be real. Connect with us like an old friend. Show us you care about the things we care about. Show us you can feel our pain and fears, but also share our joys and ambitions for the future.
STAND FOR SOMETHING.
As you create or rethink your business model or brand, think of the deeper purpose of your company and integrate that into everything you do. Use the power of your business to make the world better.
IGNORE YOUR FEAR.
It never goes away, at least not for long. Learn to listen to your instincts and the parts of you that are thrilled and enlivened to be doing the work you do more than the part that is telling you you’re not good enough. The only way to fail is to give up because you were too scared to carry on.
Does your bottom line directly benefit from your sustainable business practices? If so, how? MH: Absolutely. Our customers are women who have made a conscious decision to honor the purity of their bodies by using safe and healthy organic menstrual products and to support a cause that empowers women and girls in need. They use our service not only because it’s convenient, but also because we stand for something - namely, consciousness and social responsibility as an integral part of a healthy, fulfilling lifestyle.
What’s next for Cora? MH: We’ve been a boutique-sized company for the past year since we officially launched, which has allowed us to develop strong personal relationships with our customers and gain tremendous insight into our product and service. Now we’re ready to scale our business - both in the US and internationally - so that we can provide safe and healthy products to more women and girls, and, in turn, help more women and girls in need. We’re confident that as women learn more about their
bodies and the obvious problems posed by conventional products, they’ll begin to see the value in a company like Cora that gives them a way to manage their periods that truly honors their bodies and spirits at the time each month when they need it most. For us, that means doing more than sending products in a box each month - it means taking responsibility for leading a larger movement for women’s health and empowerment by providing thought-leadership, advocacy, and education about issues affecting half the people on the planet. Photos: Cora SUMMER 2015
eventh Generation is arguably one of the most recognizable missiondriven brands in the world. The company makes a wide range of products, from household cleaners to diapers to body wash, all with the mission of inspiring “a consumer revolution that nurtures the health of the next seven generations.” The company has expanded to over $250 million in annual sales, all while remaining private and staying true to its core values. In contrast to similar brands in its field, the company has taken a different approach to scaling its impact. Rather than focusing on being acquired by a larger, multinational brand, Seventh Generation has opted to create its own social venture arm, Seventh Generation Ventures, to begin acquiring smaller brands to help them scale their own impact. We had a chance to sit down with John Replogle, President and CEO, to discuss this innovative new direction for his company, the collaborative economy, and broken public markets. Could you talk about the beginning of your career and your transition to Burt’s Bees and then to Seventh Generation? John Replogle: Starting earlier in my career, I had the great opportunity to lead Guinness both in the UK and the US. I was already a bit deeper into my career and really looking at my life. I had kind of the perfect life, in a way. I had a wife and two young daughters, living in a nice home in Connecticut, running Guinness beer, and, at the same time, was working on my personal mission. If I had to borrow a term from one of my great mentors, Ray
Anderson, I had a “spear in the chest moment.” It occurred to me that what I’d been on was a self-endeavor that was all about moving myself forward; but what was I doing for the world around me and, in particular, for my daughters’ world? What would they inherit, and how was I creating value and benefit to make their world a better, safer place? I remember it like it was yesterday. It was at that moment that I realized I needed to change my career. Within a few months, I had left Guinness and moved to Unilever. It was there that I got to work with some great colleagues on the Dove Campaign for Real Beauty, where we really thought deeply about the stereotypes of what beauty is and the SUMMER 2015
impact on women, and, in particular, on the self-esteem of young girls. So we launched the Dove Campaign for Real Beauty, as well as set up the Self-Esteem Fund in partnership with the Girl Scouts, and I felt like I was moving closer to my personal mission. Over my time at Unilever, while I loved it, I also realized even more fully how much I loved building companies and businesses, and the natural products market was really exploding. It was at that time that the phone rang, and there was an opportunity to come down to North Carolina and
versus compete; seeks to create winwin opportunities versus zero-sum win/lose opportunities; that thinks not about the company itself as being contained within four walls, but literally a virtual company where the brand is connected with consumers; where you can actually roll up your sleeves with what are traditionally known as competitors to really think about how we can collaboratively grow an entire category. There’s an orientation that we’ve instilled within Seventh Generation that we believe in, which is all about thriving within
them succeed. So, over the long run, we see Seventh Generation as a portfolio of great brands, all missionaligned, all about human health and environmental health. The first manifestation of that was the acquisition of the Bobble brand. We moved into the water category two years ago with the acquisition of Bobble, a great, patented, design-led water filtration system that really replaces the needless waste of singleserve water bottles. In the US today, we consume over 35 billion - with a “b” - single-serve water bottles, 70
“We are a mission-driven organization; we’re a founding B Corp with a long-term aspiration to remain independent and to be guided not by the maximization of shareholder profit, but by the creation of shared value for all.” lead Burt’s Bees. Again, it was a very clear decision for me, because I knew it would move my work into greater alignment with my life goals. So I gladly accepted the opportunity to move to North Carolina and to work in a place where the mission of the company was all about the greater good. It was an incredibly dynamic time in my life and my family’s life. I felt like I had the chance to really build something that was meaningful and impactful and began to become a beacon for the way business could both do well and do good. After the business was sold to Clorox, I thought about what the next great opportunity would be and had the good fortune of having lightning strike twice, and was invited to come to Burlington, Vermont and lead Seventh Generation, where I’ve been now for four years. In contrast to other companies in this space that are looking to become acquired, you are actually raising money to acquire other brands. Could you tell us more about the philosophy behind that approach? JR: Let me start with the context of the collaborative economy, which is all about creating an organizational culture that seeks to collaborate 48 |
the collaborative economy. It’s this understanding that leads you to understand what we want to do next. Our mission is to inspire a consumer revolution that nurtures the health of the next seven generations. That’s why our company exists. We try to think about these overarching aspirations we have: things like Nurture Nature, and building communities, and transforming commerce. We think about the right strategy to enable those aspirations. As we think about transforming commerce, we know that we’re a very successful and scaled company at this point. We’re nationally distributed; we do over $250 million in sales; we’ve got a unique team with great capabilities; we’ve got positive cash flow; we’ve got an incredibly aligned and supportive board that has the resources to continue to support us independently, but also as a platform to enable the growth of other brands and companies. So, we’re taking a partnership approach to look for like-minded, missionaligned brands that are growing and can use our organizational resources and capabilities to help them scale more rapidly, to do more good, to have greater impact, and to navigate the choppy waters of growth to help
percent of which wind up in a landfill, which is just an egregious amount of waste. So Bobble’s aspiration is to make the single-serve water bottle obsolete. Conventional wisdom would hold that being acquired by a large multi-national brand would allow a company like Seventh Generation to scale even larger and have more of an impact than it would have if it had stayed independent. Do you have any doubts about your current strategy and the effect it might have on your ability to scale even larger? JR: The parallels are similar, right? Just as Campbell Soup Company will help scale Plum Organics, Seventh Generation looks to help scale other brands that are mission-aligned. The key thing for us and any partner that we would take on is that our DNA is absolutely clear. We are a mission-driven organization; we’re a founding B Corp with a long-term aspiration to remain independent and to be guided not by the maximization of shareholder profit, but by the creation of shared value for all. I have no doubt that not only will Seventh Generation’s brand continue to grow and succeed as more and
more consumers come to really think about the impact of their purchases, but I think we as a platform for that kind of aligned growth are going to forge a new frontier in the world of B Corps and how business is done. I’m incredibly excited about what the next decade holds for our business, and our ability to scale and leverage this, and create a business unlike any other out there. What are you looking at when you’re deciding whether to invest in a smaller brand? JR: Oftentimes, the companies that we’re looking at tend to be founderled still. Therefore the company’s and the founder’s vision are inextricably linked. So, we do look for people who have a clear determination to use the power of business to do good in the world. There has to be an alignment - the notion that business, one of the most powerful forces on earth,
can be used to advance health and well-being, and that you can’t live a healthy life on a sick planet; business has consequences, and in that world, we have to act responsibly and sustainably over the long run. That’s the DNA check that we’re doing. We’re looking for true brands that are distinctive with the ability to scale. There are a great number of those brands out there. What we’re doing right now is kind of methodically and thoughtfully approaching different brands and sitting with founders and talking about how we can enable their visions for accelerated growth, but also help them avoid the potholes. A number of brands, for example, get trapped in capital constraints, or have to raise outside capital from non-aligned investors; or take on debt, and then they go through an economic downturn, where they’re breaking covenants; or they may not have sufficient organizational
capabilities to both run the operations and scale the commercial front end of the business. We can help them there. So there are so many different areas where, because we’ve been there, because we’ve done that and we’ve got the scale and the resources, we can help companies really unlock and accelerate their growth, and avoid some of the pitfalls that lead to so many of the great brands that we’ve seen disappearing over time. What advice or insights would you have for mission-driven entrepreneurs who are just getting off the ground? JR: First, know exactly what you’re in it for. Write down your mission, your values, and what your goals are, and be really clear and transparent on that. Make sure your organization understands them as well and align your organization around that.
“Business, one of the most powerful forces on earth, can be used to advance health and well-being.” SUMMER 2015
I think we’re getting highly valuable profits in that every dollar that we drive to the bottom line is building a more sustainable and just model for commerce.
What insights do you have regarding quality leadership and building a highly functioning team? JR: The CEO’s number one role is all about people and culture. Organizations have two great things - they have their people and they have their brand; you have to steward both of those things. For me, it starts with people. It’s about being very clear on what your mission is and what the purpose of your organization is and how that translates into an employee value proposition. So, what do you stand for? How can you create a relationship with employees where they can be part of that mission, and how can you create the right incentives and structures to create that long-term, enduring relationship where people can do their best work? And then, how can you wrap that in a 50 |
culture that is reinforcing and supports the values of the organization and of the employees and brings the organization together to have its most positive impact in the community in which it’s based? Second, it’s about the brand. It’s about aligning the company and the brand together and being honest and true about what the brand stands for. It’s about being clear on how you make decisions within an organization that support that brand authenticity, and then it’s about giving it the space and the support to grow - be it around collaborations or retail partnerships or investments in product development and quality. How do you feel that being a conscious business and operating this way benefits or impacts your bottom line? JR: I think we’re getting highly valuable profits in that every dollar that we drive to the bottom line is, frankly, building a more sustainable and just model for commerce. We’ve been very successful over the long run. The myth that you can’t do well and do good is being busted left, right, and center. There are over 1,200 B Corps out there today that are proving you can have it both ways. I think we’re on the verge of a whole new business model. Seventh Generation has been fortunate to be an early pioneer, and we’re going to continue to blaze the path for others to follow. There is a difficulty, though, especially with publicly traded companies having to operate with such a short-term focus. Is this
Second, attract people who are aligned on a values basis. That’s not only your employees, but frankly, and incredibly importantly, your investors. Don’t raise capital from people who aren’t aligned with your mission and values. You’ve got to stay focused and supported by those people who are going to see you through, because there will be times where things will get thin, and you want to make sure that your board and your investors don’t blink. Finally, always, always think about being a truly authentic and transparent brand. We live in a world of transparency today, where a company’s values and the brand values must be aligned. You’ve got to be true and transparent in all that you do in building consumer trust in your brand.
part of the strategy of why Seventh Generation is remaining a privately held company? JR: The public markets are broken. It’s that simple. It is the relentless demand on this month and this quarter that leads to short-term behavior, which is the antithesis of building a sustainable enterprise. I watch it time and time again. It creates sub-optimization of long-term value. Sadly, today, if you really want to remain focused on longterm shared value, the single best way to do that is to remain an independent, privately held entity. What metrics does Seventh Generation find to be most important, beyond financial? JR: Your question assumes that financial is our most important one! [laughter.] I would say that it is one of a handful of key metrics for us. One that we really put first and foremost is around our culture, and whether we’re a great place to work. We benchmark ourselves every year in the Vermont Best Places to Work survey; we survey our entire organization. We listen closely for how we’re doing as an organization with our culture, and then we set out to work on continually refining and improving that. So, we’ve got specific goals and metrics in that space. We’ve got goals and metrics in terms of the impact we have in our community by the way our annual incentives and bonus plans are tied to our service in the community, as well as our commitment to a program we call LEAD [Learn, Educate, Act, and
Demonstrate], which is all about going out and having a positive impact in our community. That’s another key metric. We’ve got clear sustainability metrics about the elimination of waste, about the removal of plastics, around several different dimensions of how we perform as an enterprise from a sustainability perspective. That’s another core metric. We look at how we’re doing with our consumers, and whether our brand is reaching more consumers. That’s a critical element of our success. We also look at our innovation pipeline and its health, and whether we have a strong, threeyear product pipeline, and whether our innovation is resonating in the marketplace. Then, of course, we look at our sales growth; how are we doing from a top line and a market development perspective? Last year was a recordsetting year for us, with some of the fastest growth we’ve ever seen. So that’s been tremendous. And then we look at the bottom line, which is, are we delivering long-term value for shareholders? Is it reflected in our annual value, and is it reflected in our long range strategic plan - i.e., can we actually say that the value of the enterprise is growing each and every year? We measure the triple bottom line of people, planet, and profit. What is inspiring you right now or giving you hope for the future? JR: Where do you start? My kids inspire me. I look at how they live and how they think, and they are just so much more intelligent than I was at their age. They’re thinking about their relationship to this globally interdependent world; they’re thinking from a systems perspective. They’re thinking about EQ [Emotional Quotient, a measure of emotional intelligence] and what it takes to be a responsible citizen in the 21st century. I look at them and their classmates, and all of the students - I go to college campuses, and business schools, and it is so inspiring to see how the
curriculum has shifted. I graduated from Harvard Business School in 1993, and what they’re teaching in the MBA programs today is just a whole different form of responsible, ethics-based, sustainable leadership than it was 20 to 25 years ago. That gives me hope. I think there’s more of a conscious realization that we share one planet. My own belief is that this planet isn’t ours; we don’t own it. It belongs to our maker, and we have to care for it. I hear more and more conversation on that front - not whether the climate is changing, but how do we protect our fate and care for this incredible, precious place that we’ve been given to be stewards of? I’m inspired by that conversation and all the manifestations, including the fact that, for example, solar has become economically viable in the United States. There’s hope springing everywhere. I think we are a long way from the Silent Spring, and I think that there’s plenty to be hopeful for, but there’s much to be done, and much to be done quickly. We need to be conscious, and we need to mobilize, and the only way that we’re going to effectively do that is by harnessing the incredible power of business. If we do that well, if we lead responsibly, if we can ensure that the largest and greatest organizations on the planet think holistically and systemically, then I think we will make a huge, positive leap forward for humankind, and for all of the shared existence of this planet.
“We need to be conscious, and we need to mobilize, and the only way that we’re going to effectively do that is by harnessing the incredible power of business.”
Photos: Seventh Generation
THE APPAREL INDUSTRY By the Numbers
The amount of clothing that the average American discards each year, 85% of which ends up in landfills or incinerators.
700 GALLONS The amount of water it takes to produce a single cotton T-shirt.
The percentage of global water used for growing cotton.
17-20% The estimated percentage of industrial water pollution that comes from textile dyeing and treatment.
The estimated number of people who work in the fashion industry worldwide.
The percentage of global landfills that are filled with clothing and textiles.
99% The estimated percentage of used clothing that is recyclable.
8,000 The estimated number of synthetic chemicals that are used worldwide to turn raw materials into textiles.
SUSTAINABLE APPAREL BRANDS
1. Evrnu 2. Loomstate 3. Seamly.co 4. Noble Denim & Victor Athletics 5. Nikita & Vesper 6. INDIGENOUS Designs 7. Eileen Fisher
While the statistics about resource use and pollution in the apparel and textile industries are staggering, you as a consumer can vote with your dollar and buy from sustainable companies. Weâ€™ve identified seven top sustainable apparel companies that are doing things differently. Happy shopping! 7
MARKETPLACE WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY?
EVRNU Stacy Flynn, CEO Seattle, WA Founded: 2014 Products: Premium textile fiber made from garment waste. THE GOODS • • • • • • • •
Social Purpose Corporation. Uses non-polluting energy sources. No wasted fresh water. Full life cycle of product is considered with reduce, reuse, recycle principles. No emissions or waste of synthetic substances. No greenhouse gas emissions. Net zero impact on biodiversity. Fair, livable wages for employees.
“If one person can do so much damage unintentionally, what can the same person do intentionally for good?”
Stacy Flynn: When I began my research in 2010, I saw so many issues with the framework of the textile and apparel system, mainly with fiber procurement and waste (the beginning and the end of the linear supply chain). Today, I know that leveraging the power of good business is exactly what is needed to shift this entire industry, and I think we’ve got a solution with Evrnu that is powerful enough to make a dent and demonstrate that a new way of working is possible.
AS SOMEONE WORKING IN THE TEXTILE AND APPAREL INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? SF: In 2010, I traveled to China without large corporate credentials. On this four-week trip, I saw what my industry was doing to the environment and people. I began adding up the millions of yards [of fabric] I had created in my career and suddenly I was linked to this massive problem that I had no idea I had caused. It was not what I thought I was creating in the world. I quit my job, got an MBA in sustainable systems, and developed a technology that has the power to make current methods obsolete. I will use the balance of my career proving one theory to myself; that is, if one person can do so much damage unintentionally, what can the same person do intentionally for good? This is what we - there is a stellar team forming around this concept and company - are scaling.
WHAT BUSINESS PRACTICE ARE YOU MOST PROUD OF? SF: We have developed a gorgeous fiber that looks great, feels great, performs well, holds rich and vivid color, and is made using no virgin resources in a way that creates no waste. We’re getting ready to go into the lab with a handful of key partners, which is when things really get exciting. Bringing others in to co-develop with us will make the learning exponentially greater, and it will be a lot of fun bringing this technology to the world! Photos: Evrnu
THE EVRNU PROCESS
LOOMSTATE New York City, NY Founded: 2004 Products: Sustainable apparel and uniforms. THE GOODS • Uses 100% Fair Trade certified and certified organic cotton. • Maintains a transparent and Global Organic Textile Standard-certified supply chain. • Creates long-term partnerships with cooperative farming communities. • Employs strict factory standards including worker safety and complies with the restricted substances list and best practice guidelines. • Cradle to Cradle Certified and participates in the Fashion Positive program. • Member of the Sustainable Apparel Coalition.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Loomstate makes clothing that is functional, long-lasting, and needed. Everyone needs basics like a T-shirt. We hope to replace the conventional T-shirt in someone’s closet with an organic one. When a customer has the opportunity to understand the supply chain of a product, they are more likely to keep, respect, and repair that product. This will slow down the fast fashion turnover that has become the norm. We also produce private-label uniforms for other brands that value sustainability and want to elevate their work-wear. By working with the bigger brands on their uniforms, we are able to increase the demand for organic cotton and partner with more farming communities.
AS SOMEONE WORKING IN THE TEXTILE AND APPAREL INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? Since 2004 we’ve made functional streetwear for our customers. Not too long ago, we had an “aha” moment. We were not tapped into the space where functional apparel is needed most: the workplace. We learned that in the uniform industry, organic options were slim pickings. We swiftly made a move to fill that void. By providing custom-designed, organic cotton uniforms, we’re allowing big brands to have access to uniforms that align with their sustainability missions. Employees are also more likely to embrace that mission and feel pride in the brand they work for.
WHAT BUSINESS PRACTICE ARE YOU MOST PROUD OF? We are most proud of our connection to our supply chain, whether it’s for the Loomstate collection or for a privatelabel account. From seed to finished product, we know every step of our supply chain. We are proud of the resilient communities deep in our supply chain and their success stories, from our farms in India to our headquarters in New York. Photos: Loomstate
SEAMLY.CO Kristin Glenn, Founder and CEO Brooklyn, NY & Denver, CO Founded: 2013 Products: Socially responsible womenswear. THE GOODS • Fabric is sourced from within the US and Canada (no overseas-manufactured fabric is used in products). • All products are manufactured in Denver, CO, in a factory that pays living wages. • Uses surplus fabrics (excess from mills and factories across the US) when available. • Uses minimal packaging: stickers are 100% recycled, bags are 100% made from waste, and packaging is made in the US. • Donates scrap fabric from production to the Green Bag Lady project to use to make pet beds that are given to local animal shelters.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Kristin Glenn: Seamly.co is a socially responsible company, first and foremost. Our focus is on the people involved in the process, from product development to fabric production to sewing, folding, packing, and shipping. Our biggest impact is the support we give to American factories and suppliers who are doing things right. I’ve met them all, from our fabric suppliers (a husband-and-wife team in New York) to our button factory (a small family operation in Brooklyn) to our factory, COsewn (employing young seamsters and teaching them new skills through the production process). We exist to provide unique, American-made clothing to our customers, but the real difference we make is the work we’re able to give to our suppliers. Watching them grow along with us has been the biggest reward.
AS SOMEONE WORKING IN THE TEXTILE AND APPAREL INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? KG: Local production is important because it guarantees transparency. I’ve seen where our materials come from firsthand, from fabric to finished goods. I’ve met the seamstresses who work on our products. So I know, with certainty, that our products are a net positive for the people who work with us. And that’s something that’s really difficult to have when working overseas, unless you’re there in person all the time. The fashion industry is a dirty business that, for the most part, is all about a quick buck. By producing locally, with people I know and trust, I’m able to offer products that I believe in and feel good about. In terms of environmental sustainability, we’re sourcing fabrics for our next product that will be better aligned with my environmental goals: organic cotton, hemp, and wool. That’s an important next step for us. We’ve got a great local production chain in place, and now we’re ready to introduce new fabrics and styles.
WHAT BUSINESS PRACTICE ARE YOU MOST PROUD OF? KG: Transparency. I’ll be the first to say that buying less is a good thing, and that no clothing is truly sustainable. I’ll also be honest with our customers about how things are made, and what changes we’re excited to make next. They get to see all of the work that goes into their garments, and it’s a lot of work! I hope that kind of radical transparency translates into mindful buying decisions in all areas of their lives. Photo: Seamly.co
NOBLE DENIM & VICTOR ATHLETICS Abby Sutton, Co-founder Cincinnati, OH; Factories in TN and PA Founded: 2012 Products: Responsibly made, high-quality jeans and clothing. THE GOODS • Uses 100% organic cotton, grown and knit in the USA. • Each item is cut and sewn in the USA; offers fair wages for all clothes-makers. • 5% of after-tax profits go back to the factory to reinvest in workers and combat the impact of outsourcing. • Offsets carbon from shipping products. • Recycled packaging. WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Abby Sutton: There are three main benefits that we see from running our business in a conscious way: 1. We are more creative. When you care about sustainability, you naturally have to look deeper into what you’re doing as a company. Innovation comes when you give yourself boundaries and choose to be creative within those boundaries - that is when interesting and fresh things can happen. Choosing sustainability gives us an outlet to be more creative because we’ve immediately constrained ourselves, which we think great companies have always done. 2. We form better relationships. At this point in time, companies are in the organic apparel industry because they care, not because it is a trend. So you end up working with like-minded people and the relationships created are more fun. We’ve found that people champion each other because we’re after the same goal - all of us want to see sustainable clothing become more accessible because we want to steward environmental resources better and support our customers’ health. This creates a feeling of team within the industry rather than one of competition. 3. We keep a clear focus. A traditional company often is cutting corners and pushing down costs to create a product that has the most profit, but then they are inevitably coming up with forced positive PR or initiatives to make up for the corners cut in their business. The beauty of a conscious company is that the work is so integrated that good stories flow naturally from the heart of the business and there is no need for extra initiatives. The very thing we’re focused on is good enough, which creates a purity for the owners and employees because we simply have to focus on our main product and let it speak for itself.
AS SOMEONE WORKING IN THE TEXTILE AND APPAREL INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? AS: Conventional cotton occupies only three percent of the world’s farmland, but uses 25 percent of the world’s chemical pesticides and fertilizers. It is the most pesticide-laden crop in the US. That’s why sustainable clothing is so important. The national buzz has been on organic food for the last decade or so, which is incredibly important as well, but the raw materials used to make clothing have just as big of an impact, if not more, as how our food is grown. The pesticides used in growing conventional cotton are destructive to the health of the earth and they also rub off on the skin of those wearing clothes made from conventional cotton. For both reasons, we are passionate about using only organic cotton to protect the wearer and the grower. Second, manufacturing used to employ 72 percent of Americans who didn’t have a college degree. It was the backbone of America and a way for individuals to have a good living in rural areas. Since outsourcing became widespread over the last 20 years, these former apparel districts have been depleted and the economies around these areas have not recovered. Choosing to prioritize how the product is made creates an amazing opportunity to retain the skill of these communities and to see the core of our country grow stronger. Some companies see factory labor as an area where they can suppress costs, but we see our clothes-makers as key members of the team and want to pay them and treat them as such. We see this as a key part of us having a sustainable company long term. Photo: Noble Denim
NIKITA & VESPER Courtney Montague, Co-founder & Operations Director Littleton, CO Founded: 2012 Products: Socially responsible, stylish apparel and accessories for women, selling artisan products sourced from makers around the world and eco-friendly vintage products. THE GOODS • Environmentally friendly products (vintage). • Supports women-owned businesses in developed and developing countries. • Purchases goods at a fair price from artisans with a focus on environmental sustainability.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Courtney Montague: With a more sustainable business I believe that your customers automatically bestow a bit more trust on you, which we strive to honor with great customer service. I also believe that anyone who works with us, from our interns to vendors, values our mission and that adds to their overall desire to provide us with great service. And then there are the environmental and social impacts. Each vintage T-shirt we sell saves 700 gallons of water and one-third of a pound of pesticides. If 300 million Americans reused just one T-shirt, we’d save 210 billion gallons of water and 1 million pounds of CO2. Each artisan product we sell supports a small business; 90 percent of our artisans are from developing countries and 90 percent are women. When you put $1 in the hands of a woman, she will spend most of it on her family, providing better nutrition and access to education for her children. Empowering female entrepreneurs also provides women with greater bargaining power and stature within the family unit and the community as a whole. We want to continue to empower small businesses in developing countries by connecting these powerful women to the global marketplace.
AS SOMEONE WORKING IN THE TEXTILE AND APPAREL INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? CM: According to the EPA, 11.1 million tons of textiles are trashed each year. The earth just can’t keep up with our consumption; we must learn to reuse, upcycle, and develop new sustainable materials that stop contributing to the environmental destruction of our planet. That is why we love vintage and why we love working with certain artisans to improve environmental sustainability within the products we sell. Right now, we are working with a number of artisans on a new custom line of Guatemalan weekender bags created from reused, beautifully ornate women’s blouses.
WHAT BUSINESS PRACTICE ARE YOU MOST PROUD OF? CM: I am most proud of our environmentally friendly vintage line and our ongoing work with female artisans around the world. Photo: Nikita & Vesper
INDIGENOUS DESIGNS Matthew Reynolds, Co-founder Sebastopol, CA Founded: 1994 Products: Organic, fair trade men’s and women’s clothing. THE GOODS • Provides fair wages in the local context. • Supports safe, healthy, and participatory workplaces. • Supplies financial and technical support as well as shared community planning to build capacity. • Ensures environmental sustainability in processing (including using certified organic cotton and Oeko-Tex Standard 100-approved dyes, and meeting the Global Organic Textile Standard). • Respects and embraces the cultural identities of families and the community. • Builds direct and long-term relationships. • Educates and collaborates with partners on sustainability.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Matthew Reynolds: INDIGENOUS Fair Trade Fashion brings economic and social opportunity to artisans at the base of the supply chain in some of the world’s underdeveloped regions. The materials in our organic fashion are grown without any harmful pesticides, herbicides, insecticides, or artificial fertilizers, which keeps harmful toxins found in synthetic and non-organic clothing out of our ecosystem and away from your body. In addition, the INDIGENOUS model of ethical sourcing ensures that the artisans in our supply chain receive fair wages and enjoy a safe working environment. We accomplish this through a close collaboration with our production partners, artisan workshop leaders, and others. Our mission has always been to elevate artisans in the poorest regions of South America to worldrenowned status in the handicraft textile market while preserving their rich cultural heritage. The artisan is one of our most valued partnerships. This is not charity, but rather paying a fair wage for their masterful work while providing the necessary assistance to help make the artisan more successful in the international marketplace.
AS SOMEONE WORKING IN THE TEXTILE AND APPAREL INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? MR: From the land to the loom to the hanger, we’ve made a conscious decision at each step of the way to stay true to quality, ethics, and sustainability. Our use of natural and organic fibers coupled with fair trade practices with artisans around the world has created a movement in eco-friendly fashion that’s in line with one’s style sense and moral code. The damaging and deadly effects of conventional production are now part of the national and international conversation driving global awareness and demand for our responsibly made products. The trillion-dollar fashion industry is the second largest contributor to global pollution next to the petroleum industry. With the magnitude and multitude of human and environmental impacts from the fashion and textile industry, “business as usual” is no longer acceptable.
WHAT BUSINESS PRACTICE ARE YOU MOST PROUD OF? MR: We are very proud of the launch of our unique app, the Fair Trace Tool, which creates engaging supply chain transparency for the INDIGENOUS customer. The Fair Trace Tool engages our end customers in the lives of our artisans and shares the social impact of an INDIGENOUS purchase by simply snapping a QR code on our hang tags. The back-end of the Fair Trace Tool allows us to communicate directly with our artisan producers at the base of the pyramid via cellphone-based voice and text technology. INDIGENOUS is also very proud of being among the first 10 founding B Corps in the world, signing the B Corp Declaration of Interdependence on June 1, 2007! For the last two years, we have also been recognized on the B Corp “Best for the World” list. Photo: INDIGENOUS Designs SUMMER 2015
EILEEN FISHER HOW FINDING HER PERSONAL PURPOSE INSPIRED A NEW DIRECTION FOR HER COMPANY Eileen Fisher designs from her heart. Long before sustainability really got going as a business movement, this giant of the fashion world created clothes inspired by her love for natural fibers and her desire to make pieces that were timeless and long-lasting. As her company grew, she began educating herself on the environmental impacts of the fashion industry and decided to do more. For over a decade, Eileen and her 1,200 employees have gradually transformed Eileen Fisher Inc. into one of the largest sustainable fashion brands anywhere, yet the company’s frank marketing materials are the first to tell you that more action is needed. Focusing on six key areas - fibers, colors, resources, people, supply chain mapping, and reuse - the company’s Vision 2020 initiative promises that all of its styles will be sustainable by the year 2020, or it won’t sell them. We had the pleasure of chatting with Eileen for several hours at her home in New York about everything from her personal story to the value that mindful breathing at meetings adds to her company. She also opened up about the struggles and sacrifices required to integrate sustainable practices throughout her company, the tension between minimizing her impact and selling products, and how her search for purpose led to success. 60 |
Can you tell us about the conceptualization of the Eileen Fisher brand? Was there a moment that you remember that you actually decided to really go for it?
kind of designer. It was more like I wanted real clothes for me to really wear. It wasn’t about the show or red carpets or anything glitzy. It was simple.
Eileen Fisher: I started in 1984, so I’m going to say it was 1979 when the idea was forming. I’d been working in design and graphics at that time and actually doing some branding work logo design and packaging and things like that. I had a Japanese partner and had the opportunity to travel to Japan, and while I was there, I got really
Was there any fear involved in that decision? EF: I think it was foolish non-fear. I really had nothing and so I had nothing to lose. It was coming through me, this idea. It was clear to me. I was sort of uncomfortable and not a confident person, but a shy,
just instinctively wouldn’t eat at McDonald’s because it just wouldn’t feel right or they wouldn’t want to eat a lot of packaged foods. They would eat real food. To me, it was real clothes. That was where I was coming from without fully understanding the difference between organic cotton and conventional cotton, and not understanding how damaging conventional cotton is to the planet. So, we hired Amy Hall. We actually hired her to be an assistant at first and then she moved into being Director of Social Consciousness 15
“Throughout the company lots of people are really encouraged to be passionate about these things and are given permission to care.” excited about the kimono - the whole idea of a garment that they wore in only one shape for a thousand years. The whole idea of timeless clothing intrigued me. The simplicity in the whole Japanese aesthetic just really attracted me. So, this idea began to form and it was just about really simple clothes - simple shapes and natural fibers. I was into cotton and linen and silk at that time. It just had to be natural fibers. That was clear to me. When I first decided to do it, I had a friend who was a jewelry designer. He took me to a boutique show where he showed his jewelry to small stores. I just remember walking around there and seeing these little booths and seeing other designers presenting their work and small companies presenting their wares to little boutiques around the country. I remember looking around going, “Oh, I can do this.” I felt like I could see my idea there and it felt whole. I could picture it. I’m probably not a good salesperson, so I couldn’t picture going around to stores and standing in line at Bendel’s or Bloomingdale’s to talk to the buyer and then being rejected. That was too disturbing to me, plus I didn’t know if they would understand what I was doing. And I guess I never saw myself doing runway shows - I wasn’t that
introverted person. But this idea was powerful and I was confident about it and I was sure about it. I would talk to people about it with confidence. It was almost like I didn’t recognize myself because I felt so sure of myself in that arena. So I would say I had no fear maybe foolishly had no fear. Was it your intention from the get-go to make Eileen Fisher a sustainable brand or was that a gradual awakening? EF: I would say it was gradual in terms of deepening the work around sustainability. In the beginning, it was all about natural fibers, and I was under the impression that natural was biodegradable and natural was safe for the environment. What happened over the years is that I drew in a lot of people who had similar values and cared about natural fibers and probably even understood things that I didn’t. I remember this woman, Sally Fox, who was one of the first organic cotton people. She was growing organic cotton in these subtle, natural colors close to 20 years ago. People like that found us because they knew we were on the same wavelength somehow, even if we weren’t fully understanding organic yet. I guess you could relate it to food. People who eat healthy
years ago. She became passionate about some of the human rights work in the factories, how we monitored the factories, and how we ensured that our people were treated fairly. That was really how we entered social consciousness. We got involved with Social Accountability International, which does the SA8000 standards for operating in factories around the world. Amy is now on the board of directors there. From there, things would just happen. For example, the first cotton I did, I just didn’t like the finish. The vendors told me there was some kind of chemical finish that they put on the cotton, and I didn’t like the way it felt. I had them not put the chemical finish on it, and I felt that the fabric just came alive. It was much more organic. It was just an intuitive thing that I liked it better. Another time we got involved with this group in Peru that was doing organic cotton. We just fell in love with the yarn, but their capabilities weren’t great in terms of design. Even though in the beginning we were offering some products from them because we wanted to support this idea, the garments didn’t necessarily sell and they were more expensive. It was probably 30 percent more for the organic cotton at that time and we were troubled by that. Some of our SUMMER 2015
designers got really excited about this yarn and they went down there and they started really designing into the product and working with the people down there to actually create what we wanted and making the product really compelling. Today this is an amazing project. It has some of my favorite pieces that I go to because they’re so beautiful and this cotton is just so compelling. People today will pay the price for those pieces, probably because the design value is there. It’s not just funky, hippie clothes. It’s something really beautiful and really special. I think this whole thing has kind of been a building process over the years. A few years ago, we started doing organic linen and trying to bring in more organic cotton. We’re on a path to try to move more of our products to be more local - back to this country. We’re not there yet. We have a long way to go, but we’re trying. I think there’s just so much passion and it’s so deep in the company. It’s not that we just have a Director
of Sustainability or Director of Social Consciousness. Now we have somebody mapping the supply chain. That’s her whole job. We have a Director of Human Rights. We have these different positions. What’s actually happening is that throughout the company lots of people are really encouraged to be passionate about these things and are given permission to care. At our company meetings, we do things like talk about the water crisis and ask everyone what they might do, and get the company engaged. Was there something that really inspired this shift? EF: A few years ago, I got involved in the Gross National Happiness project with Otto Scharmer. I ended up going to Bhutan and the Amazon and started really thinking about purpose - my own purpose and the company’s purpose. It’s interesting because we’re a clothing business, and although we’re
not a typical fashion business, we are still caught in that thing where the customer wants new - she wants to feel special. We want her to feel great and give her something new, but we also want to create things that are timeless and that last a long time. These are weird lines that we’re walking. I don’t think of myself as leading this company. I never call myself CEO or anything like that. It just feels like it’s such a collective, group effort. And a few years ago, when I started on this project, simultaneously there was work going on in sustainability and there was a whole team building around that asking, “What else can we do? How can we get rid of the plastic hangers? How can we use less paper? How can we ship more by sea rather than by air?” These conversations were happening everywhere and there started to be these large gatherings at off-sites. So, after I started doing my own purpose work with the Gross National Happiness project, I was on a boat in
“We want to make nothing but love the result of the work that we do.”
the Amazon and I met this guy, Marcelo Cardoso, who blew my mind. He was talking about purpose and companies having a larger purpose and individual purpose and how that works together, and personal transformation. I was like, “Yes, I want more of this. How can you help me do this?” I started bringing him in and we were doing these prototype workshops. One of them was around purpose and I had this really powerful experience. He does these exercises where you just sit in a chair and you embody your purpose. You sort of talk to yourself as your purpose, like, “What are you doing with your life? Why are you doing this? What really matters? Why are you forgetting about me?” I had this really interesting experience in which I recognized that I just needed to be more fully me. Actually, I used the stools in my kitchen, and I found that when I would sit in this purpose chair, I was sort of embodying my purpose. I just started to take that into my daily practice of sitting on a stool and feeling that I’m in my purpose rather than just my ordinary me.
A year and a half ago, I had just come back from two back-to-back conferences and I was tired, but there was a company sustainability meeting off-site. You could feel a lot of energy building around all this great work that was happening. I was supposed to go. I thought I was going to go for the first few hours and just kind of set it off, give permission, and let everybody know that I supported this whole initiative. I was sitting in my purpose chair that morning and I thought, “I have to do this. I don’t care if I’m tired. This really matters.” I went upstairs and packed my bag for the whole four days. I went and while I was there it was amazing the work that was happening there. This is where the Vision 2020 came out. It was not my idea, but it came up that we should make a radical commitment that we would make all of our clothes sustainable by 2020. And whoa. I just remember realizing that I could say, “Yes!” My name’s on the door. Even if we don’t get there, saying yes gives people permission. It was just this powerful understanding that there was a place for me to really
use my voice and that this was an important area for me to do that. The work was already happening and it was maybe going to happen if I hadn’t said yes, but me saying yes that day was another, deeper layer. Even though we’ve been doing this work for some time, we’ve been doing what I call “baby steps.” Just do another project. Just try to see if we can do a little more organic cotton and see how it goes. Take our bestselling pant and make it organic rather than just conventional cotton. It’s going to cost 15 percent more. Will it work? It turned out that people actually liked it better. It was a little softer and nicer. We were making risky decisions, but inch-byinch in baby steps. After that experience it was like, “Okay now we can step out. We can talk about it.” I’m a shy person and I’m terrified of being targeted. Yes, we’re doing 84 percent organic cotton. Someone might ask, “What about the other 16 percent?” 60-some percent of our linen is organic. “But what about the other percentage that isn’t?” “What about bluesign certified? How come everything isn’t bluesign certified?” SUMMER 2015
7 COMPANY PURPOSE STATEMENTS Over the course of two days, Eileen Fisher employees gathered to share their experiences and develop the following seven purpose statements that support the company’s future growth:
Support the well-being of people and the planet through innovation and great design.
Use business as a force for change by making clothes that empower women and are responsibly designed from field to factory to closet.
To embrace who we are, to innovate, to empower and to be a force of change.
To empower us and everyone we connect with to be their best selves as a collective force for positive change.
At Eileen Fisher we are creating a world where people have the possibility to be themselves through our products and practices. At our heart is timeless design with timely positive impact.
Make good: connections, choices, impact, design, decisions, clothes, investments, messages.
Transform and lead meaningful business, creating products we love, in service of women and the planet.
[Editor’s note: bluesign is an organization that certifies sustainable textile and apparel manufacturing.] Ah! We’re trying, guys. We’re doing our best. Try not to target us for the places we’re not good enough because we know we’re not good enough. Nobody is good enough yet. There’s a long, long way to go, but I decided that I’m going to step out and use my voice. This is an incredible opportunity. So I’m really excited. I went to this conference, a small group of 25 CEOs. John Mackey was involved through Conscious Capitalism and he said, “In running Whole Foods, we get so much flak. It’s just unbelievable.” That’s what I thought might happen to us, too, or to me. But at this point, I figure, “What the hell? I’m doing it anyway!” People will point out where we need to do better. What’s interesting to me is
making that commitment and being willing to step out. It’s kind of terrifying, but what have I got to lose? It’s the same feeling as when I started the business, like, “So what? Look at the good work that Whole Foods does even if it does get crucified.” I remember just giving John a hug and saying, “It’s all good. You are great. I shop at Whole Foods all the time. It’s good. Keep it going.” It’s not perfect, but we have to keep doing it. We have to keep trying and do our best everyday. Can you articulate your purpose for us in a concise way? EF: Last week we did a purpose workshop for the company - an 80-person, two-day workshop. We were trying to articulate our company’s purpose. We had seven
purpose statements that came out of it. It’s pretty much the deepening of what we’ve been doing, which is trying to serve women, make wonderful clothes, and now we want to make them sustainable and we want to make nothing but love the result of the work that we do. My own personal purpose - I don’t think I can put it in words exactly. But for me, it’s just really about being as fully me as I can be, living as fully as I can, and just taking risks and being strong and going at it everyday - trying to figure out what I need to do to be fully alive and help, serve, and make the world a better place. And that sounds really grand, but sometimes it’s just a conversation with my son or my daughter [laughter]. I make it sound really grand, but actually, sometimes it’s really small things like just showing up in a meeting or trying to guide things. It’s hard work. When you started to look at the external impacts of your operations, was there anything that surprised you or that concerned you most and that you have purposefully worked towards changing? EF: There were quite a few things. The one that really stands out for me is the water situation and how terrible the fashion industry is and how polluting it is. Are you familiar with the film “True Cost” that came out at the end of May? It really exposes the fashion industry and the nightmare that it is, both for human rights and sustainability. We don’t see a lot of it because it’s offshore. The water situation was just shocking to me though. To really, really understand how much water we use - producing one T-shirt takes 700 gallons of water - is shocking. The fashion industry is the second largest polluter in the world, second only to the oil industry. It’s just shocking. We don’t know it, even me. My name is on the door of a clothing company and I don’t actually know all of these things. I mean, I’ve been learning these things in the last few years, but it’s been shocking to me.
I learned other things when we started on this work. Ten or 15 years ago, we first started working with bluesign and other consultants. I remember being surprised about certain fabrics. I had always thought natural was good enough. It was really a shocking thing for me to realize that natural fibers are not good enough. One of the problems with synthetics is that they’re part of what’s in the ocean in the big plastic gyres. We think it’s only plastic bottles, but it’s actually fibers. That’s kind of shocking. One of the things we’re struggling with is that we’re not a tiny company that can just start fresh and do only organic and
What is concerning you right now about the apparel industry as a whole? EF: The massive pace, the fast fashion, and the moments we get caught in it scare me. We’re walking that line of, how do we grow but do it in a way that we’re calling “good growth”? How do we grow in a way that doesn’t do harm or in a way that we can feel really good about rather than just get caught in the spinning cycle of it all? We’re really trying to put the brakes on it a little bit - slow it down a little bit. We’re trying to reduce the number of styles. Like for fall, we reduced the number of fabrics, yarns,
EF: Slowing down has been really challenging because it sort of flies in the face of what we’re doing, or what we think we’re doing. There’s a contradiction of the realities. We have to do our business, we’re feeling pressured to meet our goals, but now you’re saying we have to sell less. How do we do this? I’m just kind of sitting with those questions and trying to find the right path every day. We’re also having marketing challenges. How do you bring the sustainable work to a really compelling place and how do we tell our story so that we can educate the customer without confusing her? She’s looking for clothes, but if we
“The fashion industry is the second largest polluter in the world, second only to the oil industry.” only this and only that. We’re a company that’s trying to sort of take the whole ship and move it in the right direction. That’s an interesting place. We’re also not a huge company. We’re not like a mass fast-fashion company, so we have some leeway and a little more possibility. We’re already known for our timeless clothes that are high quality so they last a long time, which of course brings me to the Green Eileen program [stores where you can purchase gently used, professionally cleaned Eileen Fisher clothes at affordable rates and the proceeds go toward supporting non-profit programs]. People really like the Green Eileen section of the store. Even my daughter shops there first. She’s so fascinated by what those pieces are. It’s so interesting to realize that this concept actually really does work, that the clothes do last and that the concept of the simple styling and the quality of fabrics work and that they last and that they’re still relevant and meaningful.
and styles we’re producing by 33 percent. Consolidate, offer less, do more of the things we feel really good about so that we can really get control of our supply chain and not be constantly running too fast run fast on sustainability, but slow down in general. So that’s the big concern about the fashion industry, just the pace of it. It’s like, “Throw it away, that’s last year, that’s out, buy new, new, new,” and then it ends up in the ocean or a landfill or they bundle it up and send it to other countries and destroy the craft markets of those countries. For me, it’s always just trying to stay true to the original concept, trying to grow in a way that’s meaningful and sustainable and protect the business and the people. We have an incredible staff and we want them to have opportunities, so there needs to be growth and people need to get raises, and that is a particular act of balance.
tell her our whole sustainability story first thing, she forgets to buy clothes! [laughter] So it’s kind of a funny thing. We’re walking that line of drawing her in, creating a compelling visual, and then making sure she understands this story. We educate her in the stores, and we educate her online. But the marketing piece has been a struggle. Sometimes it works, sometimes it doesn’t. It’s not the usual formula that we understood for how to sell clothes. It’s something else. But I think it’s important and I think we’re finding our way and I think it’s a huge opportunity to educate the new conscious consumer. So, you have this challenge of slowing down the growth while simultaneously rallying everyone at the company to come around this shared vision - have you found any effective strategies or techniques to rally people around the vision?
What’s been the most challenging part of trying to become a more sustainable company?
MARKETPLACE EF: Yes. We’ve been doing offsites and we’ve also been doing a lot of work on our website to inform people about what we’re trying to do and to include people at company meetings. There’s a lot of engagement around the work. I think that’s a really important piece. And what’s exciting about it is that people get really lit up. I was preparing to retire and was like, “Okay, you guys are grown up now. It’s all good.” [laughter] I had started working with the Eileen Fisher Foundation, and I was kind of working a little bit on the side and then I was like, “Whoa, I’ve got to get back in there because my voice matters! I can make a difference, and because I’m so passionate about this and about getting the company to really be true to its roots because I think the whole concept is really what sustainability is all about sustainability that is integrated into the products along with the timeless design and the quality fabrics.” That, to me, is sort of the heart of the matter. All companies should
be making products - whatever products or services that they’re offering - that have sustainability inherent in the products themselves, rather than making things or selling products that are garbage and then donating to the environment or donating to women and girls - that’s not the point. The point is, as businesses, we have an opportunity to really make the thing whole. At the Eileen Fisher Leadership Institute, you’re nurturing young women in leadership roles - I’m curious if there are any insights that have come from that that you could share with other people who want to help young women and nurture them as leaders? EF: The strongest learning is about competence and voice and how subtle the messages still are for women and young women. The world is different, but it’s not totally different. The messages are still really there with the movies and skinny models - we’re working on
that, too. I have a lot of confidence about my idea for the company and what it’s all about personally, but it’s been a huge struggle because I was taught as a child that my voice didn’t matter. In fact, it was better and safer to be quiet. I was told it wasn’t necessary for me as a girl to go to college. I know it’s different now. But there are still a lot of messages. We look at our businesses and how few women are on boards and yet when they have one woman on a board, everyone thinks it is better! There are a lot of good reasons to get women out there, but I guess I can speak to confidence because that’s the thing we work on - helping young women to feel confident and know they’re OK and that their voices matter and giving them that message the sooner the better so that they can go out there and make a difference and really be heard and seen in the world. Just keep telling girls their voices matter. They matter.
“When I think of quality leadership, I think about authenticity, vulnerability, and creating an environment where you can really listen to people and where people can feel safe to tell the truth.” 66 |
MARKETPLACE It sounds like the work you’ve done around purpose has been helpful for your own personal confidence. Have there been any other practices that you’ve undertaken that have helped you developed your own personal confidence? EF: God, that’s been lifelong work! I’ve been in therapy for thirty years. I do yoga, I meditate. I do a lot of personal, spiritual mindfulness. I’ve been journaling for 25 or 30 years. It really helps me to kind of say, “Oh, here you are again, same place. You’re doing that same thing again,” and
or whatever’s going wrong and look at it, because in the middle of it is an opportunity. It’s the next opportunity. Right now, we’re challenged with how we do this “good growth” sustainably. What does this all mean? It’s a huge thing. For example, right now we see our business moving to the Internet from the brick and mortar stores. Wow, that’s challenging. We have 60 stores. We have a lot of department stores we rely on. We’re seeing it move to the website, which is a huge opportunity because on the website, we can tell stories, we can educate
care about it?” We also have a lot of practices on how we work together. Things like listening. I love what Marcelo said recently: “What’s different about this company is that people actually listen to each other. People don’t talk over each other.” We really try to listen and we’re a hugely collaborative company. It is a double-edged sword though - like the fashion industry and sustainability. There’s almost a conflict in the center of it between collaboration and efficiency and simplicity and clear decision-making. They seem to contradict each other.
“All companies should be making products that have sustainability inherent in the products themselves, rather than making things or selling products that are garbage and then donating to the environment or donating to women and girls - that’s not the point.” really see myself and check myself and try to keep working with myself. That’s what we all need to do. The confidence comes from within, doesn’t it? We have to know that it’s okay to find the positive voice in there. I still wrestle with it. It’s not easy.
people, we can teach them how to wear the clothes - there’s so much more we can do that will have a more global impact. Instead of being terrified, we look at it and go, “What does this mean that this is happening, and how is this a challenge and an opportunity?”
We want every voice in the room, and it’s a challenge, but it’s also kind of amazing how many people weigh in on things, are included in things, and have a voice. We’re learning to manage that in a way that’s efficient. We have a ways to go, just like with sustainability, but we’re on a path.
Can you tell us about the most important part of your company culture and how you nurture that culture?
What role does mindfulness play in your business?
Can you identify the benefit that mindfulness plays to your bottom line, and also the benefit of your sustainable business practices and how those actually benefit your bottom line?
EF: I think the thing that comes up for me is authenticity - trying to support people to be authentic, to be real, to be okay to be who they are, and to not know. To talk about what isn’t working and then admit mistakes. I have this young woman at the company and she says, “No one’s ever been fired for making a mistake in this company.” Tell us what you’ve learned from failure, professionally or personally, that has served you well either in your career or in your personal life. EF: I think the biggest thing is to just go in and be with the failure or the things that seem to be not working
EF: We have one thing that’s a simple practice that kind of symbolizes it; we take a minute of silence before every meeting. We’ve been doing that for ten years or so and I think it just kind of sets the stage for stopping and being a little more thoughtful, leaving whatever else is going on from the last meeting or from home behind and just being with wherever we are and seeing what’s coming up and trying to be aware. There’s a lot of emphasis on self-awareness and well-being - things like yoga classes and mindfulness classes and people getting massages on the premises. There’s all kinds of wonderful wellness things, but they are all part of helping people to stop and be a little more self-aware and question, “Why are we doing this and why does it matter to me and why do I
EF: There are places where you can really get efficiencies from sustainability, like reducing air shipment because it’s more expensive than boat shipment. But it has other impacts - you have to project your orders a month earlier, so you might not be as accurate and might get stuck with more inventory. You’re always weighing those kinds of realities. In terms of the bottom line, aside from places where there are some efficiencies, I think there are a lot of goodwill benefits that are hard to calculate. I don’t think we’ve fully benefited from them because of my own fear of stepping out there like a lot of companies that do good things,
“It is important to be successful and profitable in business, but I think what interests me is how meaningful life feels doing this deeper sort of work.” like Whole Foods and Patagonia. I’ve been a little on the shy side, and I think understandably so. We wanted to feel like we were in a place where we could feel strong enough about where we’re headed, because I have such a pet peeve about those companies that do one project, like, “We have five organic pieces of clothing, and the rest of our line is total garbage, but you know, we are on the path to sustainability!” I hate that. I’m not interested in any PR gimmicks or that kind of thing to try to just get the halo effect or the greenwashing effect. We wanted to wait until we were at a place where we felt like we could, with pride, say that we really are on a solid path. Not there yet, but on a solid path. We have an incredibly loyal staff and loyal customer base and I think that sustainability will just build that loyalty over time. I think we’ll have good long-term value from it. I feel really confident about that. The retention rate is one concrete thing. We have a much higher retention rate of employees, so that saves concrete costs. It’s hard to measure customer loyalty, but I think that’s really solid. Our marketing people always say that we have the most loyal customers they’ve ever seen in the clothing business, so that counts. Relationships that’s what it’s all about when it comes to business. That’s what matters. We’ve been a highly profitable, successful company. It’s hard to say which parts of it correlate with what, but we’ve been doing mindfulness practices for ten years, and I think it makes us more thoughtful and more whole in our thinking, and we make better decisions when we do make them. I think it is important to be successful and profitable in business, but I think what interests me is how meaningful life feels doing this deeper 68 |
sort of work. I think companies that are engaged in this work offer something more to employees and to the world that we have to protect. We have to think about money - we have to protect that piece of the business but it shouldn’t be the only driver. We should be seeing the whole picture and balancing it so it’s good. What insights do you have about quality leadership? EF: When I think of quality leadership, I think about authenticity, vulnerability, and creating an environment where you can really listen to people and where people can feel safe to tell the truth. As a leader, you have to be okay to not know and to not feel like you have to have the answers. I always try to speak last so that I can really hear what other people say, because the minute I speak, everyone starts to agree with me. So I let other people speak and then come in at the end and summarize or say, “Let’s think about that and see where we end up or see how we feel in the morning.” Go slowly. What advice do you have for mission-driven entrepreneurs, or entrepreneurs in general? EF: You need to listen, but one of the things I think a lot about was how, especially in the early days, I always would talk about what I was trying to do and I would listen to what people said, but I would always come back to my own reflections and intuition about what was right. People would say, “You need to have prints on your line,” or “You should do this, or open a store here.” If it resonated, if it rang true, if it felt right to me, then I would do it. Resource yourself, take the time to reflect and to feel good about what you’re doing. Stay true.
These mission-driven entrepreneurs are on it - they’re doing great things. I don’t think we have to worry about them. They’re so mission-driven, they’re going to stay true to what really matters. Keep going. It really matters. Keep going. There are a lot of stumbling blocks, but find support. Find peers. Find like-minded people to brainstorm with, to be partners, and to be a sounding board. In the early days, I found myself in Tribeca around other designers and artists, and it was really helpful being at the shows. We helped each other. When I arrived at the first boutique show, there were no prices on my clothes. I didn’t even know style numbers. I was like, “Why do I even need to know style numbers? What do you mean prices?” It’s not that I didn’t think I was going to sell them, I just didn’t think about it. I was just trying to get the shapes right, get the clothes right, get them out there. What is giving you hope for the future? EF: What’s giving me hope is the young people. There’s much more consciousness coming up. I noticed when my daughter was in school they talked about recycling, and they talked about the planet and the water crisis, and she did a paper in fourth grade about cutting down forests in Indonesia and Canada and she was quite taken with all of that. We didn’t learn anything like that when I was in school. I feel hope that this up-and-coming generation has a lot of passion and they’re creative and innovative and they’re going to figure it out. They’re going to save us from the mess. They’re going to find the solutions to carry us forward. It makes me hope. Photos: Eileen Fisher
Diapers Did you know that disposable diapers are estimated to be the third largest single consumer item in landfills, with approximately 20 billion disposable diapers thrown away each year worldwide? Furthermore, disposable diapers use 20 times more raw materials, including water and energy, than cloth diapers do. gDiapers is addressing this problem head-on with its innovative cloth diapers and Cradle to Cradle Certified Silver disposable and home-compostable inserts. In addition to having a positive impact on the environment by reducing waste and resource use, the company walks the talk in other facets of its operations through its official B Corp certification and flexible working environment. We had the chance to speak with Co-founder Kim Graham-Nye about everything from the changing nature of capital to the benefits of giving your employees freedom.
Co-founder Kim Graham-Nye 70gDiapers | SUMMER 2015
Can you tell us about the conceptualization of gDiapers and the story of making the decision to start the company? Was there any fear involved? If so, how did you overcome it? Kim Graham-Nye: So, 13 years ago I was pregnant and Jason [Kim’s husband and gDiapers’ Co-founder] and I came across this article that said that one disposable diaper takes 500 years to biodegrade. It just stopped us both in our tracks. At that time, 15 million diapers a day were going into
personal connection to the planet. From my grandmother, to my mom, to me, and then this baby, and then this baby’s going to have a baby, and that baby’s going to have a baby - you know? Suddenly it became so personal. It sparked a really interesting conversation for Jason and me one morning. We started looking around online and couldn’t find anything that was a better disposable, essentially. There was a lot of muddied information around cloth versus disposable, so we weren’t sure
a small house just kind of turned us off. But with this, you’re putting poop in the toilet where it’s supposed to go, not the garbage. It didn’t take us long before we contacted the owner of the disposable pad company and said, “We love your product. How can we get involved? How can we help?” She was from Tasmania, which is the small island south of Australia. For her, Sydney, on the mainland of Australia, was a big deal. She really had no intentions of trying to get distribution up here. But we were thinking more like global
“There was something about this where we just felt unstoppable. There probably wasn’t the level of fear that there should have been, recognizing what we were getting into, but I think that that happens to entrepreneurs.” landfills in the US. Both of us had the same thought that this was just not sustainable, and that was not coming from an environmentalist perspective; it was just common sense. We could both imagine this baby growing up and looking at our entire generation and saying, “What were you guys thinking? How did you not know? How could you not see that you were going to run out of holes in the ground for all of this garbage?” What would our answer be? Something like, “Oh, it just really wasn’t convenient”? “I didn’t really have time”? I used to ask that of my grandmother, and say, “How could people stand by and let what happened in Germany happen?” Or, “How could you have segregation in schools?” There are all of these different things that seem so ludicrous when you look back on them. There’s this sense of entitlement with our generation, where a little convenience is more important than really anything else. It just seems so shortsighted and self-absorbed. At that time, too and I’m sure this is universal - being pregnant, I suddenly felt this really
which way to go. Ultimately, Fynn was born and we went with cloth. At some point, I ended up having to wear adult diapers for like a day, or even maybe just a few hours, but it was long enough for me to say, “Oh my gosh, this is insane. This is plastic underwear that is completely sealed. The point of this product is to be sealed.” No wonder babies have diaper rash; I mean sealed plastic on that part of your body. I said, “Oh my gosh, Jason, if every parent had to wear a disposable diaper, that would be the end of a $4 billion industry overnight. You would never put your baby in this if you had to wear it.” So I then became obsessed with breathable cloth covers. In my search for breathable covers, I found some fantastic brands that had developed their own breathable material. I was thrilled, and then found out that there was also this disposable pad that was flushable and home-compostable. It was so simple: “Wow, that’s it. The dirty diaper is gone.” Just the whole idea of keeping poopy diapers in the garbage in your house when you’re in
diaper domination [laughter]. So we ended up striking a deal with her where we licensed her technology for the rest of the world outside of Australia and New Zealand, and we have that in perpetuity. So we still work with her. She’s a brilliant inventor and biochemist, and she’s a mom. From there we said, “Okay, where should we go?” We decided on America first, and off we went. It was a definitely a lot - we were new parents and were adding a second baby into the mix, and that was right when we said, “Yeah, we’re going to start a company halfway around the world from our friends and family, where we know nobody! That’s such a smart idea!” [laughter] What’s funny is, I don’t know if there was any fear. We were young and maybe a little bit naive, but we just had absolute belief in this. We’ve both always been entrepreneurial, and we’ve done tons of different things, but definitely hadn’t felt like we nailed it yet. Everything we did for work touched on a part of our personalities, SUMMER 2015
but didn’t feed our whole beings. Suddenly, as crazy as it sounds, this diaper opportunity brought everything we had ever done in our lives - all these random skills - together, into one project that we were both interested in doing together. It just felt like there was something, I want to say “magical” or “spiritual” - there was something about this where we just felt unstoppable. There probably wasn’t the level of fear that there should have been, recognizing what we were getting into, but I think
that that happens to entrepreneurs. Otherwise you wouldn’t do it. We just had an absolute belief in our mission, our values, and what we could do with this. It was what the world needed. That doesn’t mean once we got to America that it wasn’t brutally hard [laughter]. There were plenty of moments of, “Oh my God, what have we done!? Why are we doing this?” There is an expression, “Leap and the net will appear.” It was something like that [laughter].
What have been some of the biggest challenges so far, and how have you guys worked to overcome them? KGN: One of our biggest challenges more recently was the whole concept of how capital plays into startups, or companies in general. Right now, the way we see it, pretty much everybody out there is just iterating off of a very broken model. As long as we’re iterating off of something that’s broken in the first place, it’s not going to shift. We ended up having to recapitalize the company and Jason spoke with so many people who would say that they were into conscious capital, and then we would look at the term sheets. Jason started to call them on it. He was like, “You say you care about these things, but at the end of the day, you still want your money back with x return in seven years.” All outside money is short term. It has to have a return. They’d say, “Well, if we don’t get a return, then it’s not investing money; it’s a donation.” That’s not true, but it is for the current time period of our society. When we began to recapitalize, we had investors who had redemption rights, which is normal. Venture capitalists all have something called a redemption right where they’re allowed to get their money back after a certain amount of time, usually five to seven years. And that can be a huge detriment to the company. We had some investors who left whom we had to replace. But with our new investors, we really stood our ground and said, “We’re refusing to take anybody in who doesn’t believe in the mission over the long term, because you can’t make serious change in five years. We want this company to last, to be around 20 years from now and to really disrupt this space.” We’re just a diaper company, but we’re also promoting the concept of changing how we consume and make products. The more products that can be made with cradle to cradle design principles with the end in mind, that’s how we believe the world should be. Of course we all need to try to consume less, but we also have all the science and technology to make products that don’t have to end up
in the garbage. So having investors who are aligned with the company’s long-term thinking is critical. You see businesses that flip and flip and flip, and it’s all about quarterly reports, and it’s all about growth, but in nature, nothing grows forever except cancer. One of the things that gDiapers is known for is its flexible work environment. Could you tell us more about the inspiration and rationale behind these practices? KGN: It’s timely that you asked about this. It definitely started out with kids, but just this morning I was wiping tears away from my face because there was an email from a woman in our office who’s from Texas, and she’s had to fly home because her grandmother’s ill, and, sadly, this may be the end. Her whole family is just so grateful for her being able to be there. She’s got a laptop with her, and whether she’s there for four days, for a week, or for a month, it all works. She can do what she needs to do to be with her family in these moments without putting her job at risk, or being financially hurt because she wants to be with her dying grandmother. We think it’s pretty basic and I’m sorry that not every employee has the ability to do that. However, the concept certainly started because we moved to America and I was pregnant, and Fynn had never been looked after by anybody else other than family. So, when we got to the US, the idea of putting him into a daycare ... and I know everybody does it - but I couldn’t do it. For me, I spent a lot of time in Africa in different, more traditional cultures. Mothers have always worked. It’s just the idea of mothers being separated from their babies that is new. Work is having responsibility and tasks, and whether it was making food or making baskets, women have worked since the beginning of time in a home environment - it’s all work, whether it’s paid or not. But the West somehow has separated our babies from us. For me, I can have an environment that’s conducive to my productivity and that doesn’t have to take my kids so
“You can’t make serious change in five years. We want this company to last, to be around 20 years from now and to really disrupt this space.”
MARKETPLACE far away. The idea going into it was very much that of a traditional village kind of culture. Up until a few years ago, we always worked in houses, and that’s how we had on-site childcare. We hired a teacher, Kristin, who was with us for nine years. So, the kids were occupied by another adult who was responsible for their safety and their care, but they weren’t far away from parents - we were all in the same house. So, they’d be taking lunch in the kitchen, and we’d be working on the second floor, and we’d pop down for lunch, or they’d pop up and say hi and have a snack. If you’re nursing, fine; nurse whenever you like. It’s not that anyone else was demanding it; we just needed it. We were new parents; we were of that age, so all of our peers were kind of similar, and what we noticed in America was that everyone seemed unhappy. There were working mothers who were working too much and missing their children. Then there were stay-at-home moms who wanted to be at home, but they also would
your work at G. Jason and I are proving that obviously by living in Australia. When you’re in university, you’re trusted to get your work done. You’re an adult; get it done on your own time, and make it great work. I don’t know why that changes when you go to work! [laughter] You should have more freedom at work. Do you think that having a flexible work environment has helped your employee retention rates or helped you attract more talented employees? Have you seen any other benefits from this practice? KGN: People want autonomy in their work, and they want to be given the tools to do the best work they can. A lot of companies underestimate the power of empowering people to get their work done. If you’re hiring well, and hiring the right skills, there’s not the question of, “Do I have to oversee you?” If you’re training someone it’s different, but if you’re hiring experts in an area, let them go and trust that
What other business practices are you proud of or excited by? KGN: Our B Corp certification - the principles that B Corps stand for, if you know them, you know there’s so much behind that. Beyond B Corp certification, we do simple things like four weeks of leave, and that’s from the day you join. It goes back to people being at their best. I think even sustainable companies can often forget that the most valuable resource we have is humans. At the company, we’ve put a lot of effort into the human factor. I actually had a very personal experience with this. I absolutely burnt out two years ago with all the stress of the recapitalization. I was no good to anybody, but of course I couldn’t see that. Jason actually kicked me out of the company for six months, which was huge! I was humiliated; as far as I was concerned, it was the worst thing ever in the world. Luckily, I knew he loved me [laughter], and he was absolutely right. I ended up going
“Mothers have always worked. It’s just the idea of mothers being separated from their babies that is new.” have loved to have some outside activity as well. It just seemed like it was so black and white: you were a stay-at-home mom or you were a working mom, and that was it especially the higher up you got in your career. For us, we just saw this huge opportunity to both bring women back into the workforce who were at home, but for limited hours, and give them an environment that was conducive to being the kind of parent that they wanted to be; and then similarly to say to women who were already working, “Hey, you don’t have to work a hundred hours to be a VP; we can have a 4-days-a-week VP.” We did that from day one. The biggest thing is that you don’t have to be sitting at your desk to do 74 |
they’ll figure out how to do it. It’s not for everybody, I have to admit. There’s an effort, and there’s a tradeoff. It would be much easier to have people in the office 9 to 5, Monday to Friday, all in the same place. Without a doubt, I think everybody on our team would agree on that. It’s more effort, but absolutely worth the result to have people working remotely. We have people working from home, people working different hours, but we get the best out of people. We want all resources to be used in the best possible way, including our human resources.
away and said to him, “If you kick me out, I’m not sitting in Portland with the two kids in pouring rain while you get to go to work everyday.” Of course, I love work. We were lucky enough to have a lot of frequent flyer miles, and we went to Thailand, Africa, and some other places. I was gone for six months with the kids, which was kind of nuts. It just gave me the chance to breathe, though, and to remember who I was as a person. Without realizing it, we had become “Jason and Kim, founders of gDiapers” - years of the names really just melding together. It was really comforting to say, “Well, who am I? Just Kim?” I just kind of got to explore myself again. In that process, though, there were a whole bunch of
MARKETPLACE awakenings, as you can imagine. One of the biggest takeaways was just that, here we had this sustainable company, sustainable business, sustainable products, but I certainly didn’t have a sustainable life. I was burning the candle at both ends, as all business owners do, and most mothers do, too. You’re taking care of everybody else, and you always put yourself last. Even though you know, “I should go to that yoga class; I should meditate; I should go for a run; I should probably eat better,” you just focus on getting everything all taken care of first, and inevitably there’s no time left. I had a huge revelation around work-life balance. I’d always struggled with that term. Every time I’d hear somebody talk about it, I’d imagine this old balance scale that my motherin-law actually has in her kitchen. She uses it every day, still, to weigh things. You have to take from one to give to the other. When I framed work-life balance in that way, I thought, “Wait, I have to take from work to give to my kids, or take from my kids to give to work; where do I even fit in this? I’m not even in this equation. No wonder I’m last, because I’m looking at these two pieces, neither of which include me, and both of which require everything from me. No wonder I’m setting myself up for failure.”
It’s a messed up analogy. It’s not at all about balance. I was thinking of it in the wrong way. I started to draw on motherhood stuff. When I had [our second son] Harper, I did not take love from Fynn to give it to Harper. I can love them both; my heart just expanded to include these two beings. I didn’t take love from Jason to give to the boys. That still doesn’t mean I can do two things at one time. I can’t go to both soccer games simultaneously. But the framework was so different. As simple as I know it sounds, it was this massive “aha” moment. Including myself in that picture - getting rid of the scale that only had two components, and thinking about the family unit with me being in it, not just me taking care of my family, but me as part of it - suddenly just shifted all kinds of things. When I came back to the office, it became a big theme for the whole team. I was the extreme, but everybody on our team was having similar issues around work-life balance, whether they had kids or not. Then I met a great man from Google, and spent some time with him and his philosophies around meditation and mindfulness. That was this whole other awakening. I said, “My gosh, I’ve meditated on and off for years,
but I’ve never really looked at it as the single most important thing I need to do every day.” And that is because the more I train my mind, the more I grow those muscles, the more I’m able to focus, the more I’m able to be clearheaded, the more I can see what’s coming and assess opportunities. Working on that muscle is by far the single most important thing I can do. Working on me being at my best, like getting the sleep I need, for example, is critical. If I don’t sleep, the company suffers, my children suffer, my marriage suffers. Putting it in that framework was life-changing. We brought that back to the company. Now there’s a lot of mindfulness tools that we offer the team. It’s not mandatory of course, but we have weekly meditations. From the beginning of gDiapers, we’ve started every meeting with three deep breaths, just to focus on what’s on hand, to leave everything else that you were just working on aside. And we’ve always loved it and everybody does it. We try to keep people reminded that their well-being is the single most important thing that they can do to be great at their job. Whether that’s taking vacation, taking a breath, or eating well, we really support people in their Photos: gDiapers pursuit of well-being.
“We try to keep people reminded that their well-being is the single most important thing that they can do to be great at their job.”
GDIAPERS AND EVERY MOTHER COUNTS:
THE POWER OF PARTNERSHIPS
Every Mother Counts, founded by Christy Turlington Burns, is a nonprofit organization that provides maternal health services to help make pregnancy and childbirth safe for every mother. Kim Graham-Nye: I met Christy Turlington Burns at a Fortune Magazine event in 2011. I got to go as one of the ten young entrepreneurs that they were acknowledging. Christy was speaking at one of the breakfasts about her work around maternal health. It was all really quite new. She’d just finished a film called “No Woman, No Cry,” and was talking about how a woman dies every two minutes from giving birth around the world, and 90 percent of those deaths were preventable. Now, that number’s actually gone up to 98 percent preventable. One woman dies every two minutes, and 98 percent of those deaths are preventable. It just hit me like, “Oh my gosh, 98 percent of these women don’t have to die. That is insane.” To me, there are so many causes I care about, but they’re all so huge, and there’s not a simple answer, whereas this was really simple. Sometimes it’s just fifty cents or $5 that can save a woman’s life. It’s just a matter of getting her transportation to get her to a clinic when she needs help. It’s not rocket science. So, when I got back from my trip to Tanzania with my kids, I felt an urgency about partnering with Every Mother Counts. I really wanted to work with
Tanzania because it’s somewhere I have an affinity for that I really want to impact; 1 in 39 women die from giving birth in Tanzania. Pregnancy is a serious death risk. So, when I came back, I saw Christy pretty much right away. I really wanted to figure out how gDiapers could be involved - not just in Tanzania, but how we could best serve Every Mother Counts and the work it’s doing on the ground. We don’t have big dollars like some of the huge brands that it partners with, and we’re never going to be able to compete on that level of funding, but what else could we do with the resources we have? So, we planned a trip that coincided with the Mount Kilimanjaro Half Marathon. I’m not a runner, so I said, “Well, I don’t want to run, but for the women who are in labor, distance is one of the biggest barriers to maternal healthcare.” Women typically labor in their villages, and for those who have complications, you only start looking for care after you’ve had trouble. So now you’re in labor, having complications, and you have to go and find emergency care. What happens in that moment is you have to start walking. On average, it’s 24 miles. The idea of walking 24 miles, in labor, with complications, to emergency care is
Kim Graham-Nye (left) and Christy Turlington Burns (right)
just mind-boggling. Part of what Every Mother Counts does is work with distance. In Uganda, it is part of a program that gives transport vouchers to pregnant women, so if you end up in trouble, you can have someone call, and they can bring a motorbike and come and get you and drive you to a clinic. Something as simple as that - being able to afford that few dollars for transportation - can save your life. Now we’re bringing our customers in and saying that this is something we as a company care about; this is something Jason and I care about. We’re not going after our customers for money, but if it engages them and they become aware of it because of us and our interest in it, that’s great. Every Mother Counts is looking for awareness. It wants people to know these statistics. To that end, Christy and G have teamed up to design our new G pants. They’re called Gentle Giants. They’re elephants; it’s a mom and baby elephant in the Every Mother Counts orange and grey colors, and proceeds from the sale of the pants will go to Every Mother Counts. That’s a way for our consumers to donate funds, even though it’s not costing them anything: they’re just buying the pants, and we’re donating to support this great cause.
he Little Sun solar-powered lamp is a marriage of artistry, function, and mission. Co-designers Olafur Eliasson, an artist, and Frederik Ottesen, an engineer, set out to create a product that would literally put the power of the sun in a person’s hands. The pair believed that a technical solution that also provided an emotional response would be the most effective way to address the problem of energy access in off-grid parts of the world and spark a global conversation about safe, clean energy sources. The company’s “trade, not aid” business model relies on purchases of Little Suns in developed countries to support the sale of lamps in off-grid African communities at locally affordable prices. To date, Little Sun has empowered over 400 African entrepreneurs in 10 countries to start their own businesses selling Little Sun lamps, often by providing a small stock of lamps on credit as startup capital, as well as business workshops, marketing materials, and sales training. By creating entrepreneurial opportunities, Little Sun hopes to build self-sustaining distribution channels that are more resilient than donation-based aid programs. In April 2014, Bloomberg Philanthropies provided Little Sun with a transformative $5 million impact investment to help the company dramatically scale its operations across the globe.
LITTLE SUN LAMPS SOLD IN OFF-GRID AREAS
LIVES TOUCHED IN OFF-GRID AREAS OF CO2 EMISSIONS 9,100 TONS HAVE BEEN AVOIDED
AFRICAN 400 PARTICIPATING ENTREPRENEURS
SAVED ON ENERGY EXPENSES IN OFF-GRID HOUSEHOLDS
PEOPLE WORLDWIDE WITHOUT ACCESS TO ELECTRICITY
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Photos: (1) Karin Lerche Christiansen (2) Merklit Mersha (3) Michael Tsegaye
INNOVATIONS 1366 Technologies
Standard photovoltaic solar panels are made from very thin silicon wafers. These wafers, which are not much thicker than a strand of human hair, are cut from large blocks of silicon, which results in a lot of wasted silicon sawdust. 1366 Technologies is developing a process that makes wafers from molten silicon, greatly reducing both waste and manufacturing costs. The process also produces more uniform wafers with fewer imperfections, which increases the energy production of the solar cells. The company estimates that continual improvements to its process will decrease the cost of solar panels by 10 percent per year through the year 2020, at which point solar energy will be cheaper than electricity generated by burning coal. Photo: 1366 Technologies
Ubiquitous Energy What if every piece of glass - from your office window to your carâ€™s windshield to your smartphoneâ€™s screen - doubled as a solar panel? Ubiquitous Energy hopes to make that possible with a solar panel that looks and acts just like ordinary glass. The panel works by absorbing only the non-visible wavelengths of light (i.e., ultraviolet and infrared) to generate electricity while allowing the visible part of the spectrum to pass through it - just like glass. Although the theoretical efficiency of the material is around 10 percent, which is much lower than regular photovoltaic solar panels, the ability to install them anywhere that glass is used could be a game changer. Photo: Ubiquitous Energy
Cloud&Heat If you use the Internet, you rely on information stored remotely on computers in â€œthe cloud.â€? These server farms consume massive amounts of electricity both to power the electronics and to keep them cool. Cloud&Heat, a German company, aims to reduce the environmental footprint of cloud computing by disaggregating large server farms and making good use of the waste heat they produce. Heating customers pay to install fireproof cabinets in their homes or offices, which is where Cloud&Heat stores its servers. The company pays for the electricity used to power the servers and the customers enjoy free space-heating and hot water from the heat produced by the servers. Since Germany also has one of the cleanest electricity grids in the world, technology customers who rely on Cloud&Heat for their cloud computing needs can claim a markedly lower environmental footprint for these services. Photo: Cloud&Heat
MEET THE 30-YEAR-OLD WHO COULD REVOLUTIONIZE THE ENERGY INDUSTRY
Dr. Leslie Dewan
ransatomic Power is commercializing a design for a new type of nuclear reactor that can take the stockpile of nuclear waste that exists in the world, break it down, extract almost all of its remaining energy, and turn it into an enormous amount of clean electricity. If the technology were deployed at scale, it could provide clean energy for the entire world for the next 72 years. Yes, years. The implications are enormous and could revolutionize the entire energy industry. We spoke with Co-founder and CEO Dr. Leslie Dewan about her groundbreaking innovation and the future of the nuclear industry.
What inspired you to start this company? How did you conceptualize this and then find the courage to really go for it? Leslie Dewan: There were a few factors that all came together at once for this to happen. My co-founder, Mark Massie, and I started the company when we were midway through our PhDs at MIT. We actually first started thinking of it when we were studying for our qualifying exams, which are week-long exams that you take midway through grad school. It was a really stressful time and we were studying for months on end, fourteen hours a day, and then we finished, we passed, and we were like, “Well, we have all 82 |
of this free time now so we should do something really interesting, and we’re probably the smartest that we’ll be for a while so let’s make it big.” The other piece that came into it is that Mark and I, we’re both environmentalists and we feel like the world needs carbon-free electricity. We think that nuclear power is an essential part of this mix alongside solar, wind, hydro, and geothermal. To meet the world’s growing energy demands, you have to include nuclear in the carbonfree portfolio. We wanted to develop a type of nuclear reactor that the public could embrace and that people could really get behind. To do that, we wanted to tackle the issues of fear head-on regarding safety and see if we
could come up with new solutions that would make it more acceptable. We started diving into the tech aspects and poking around and running a whole bunch of simulations and, six months or so later, we came up with a basic sketch of the design. That was back in 2011. We spent several years refining that and then raising funding and now we’re doing some experimental tests with it to bring it closer to fruition. At any time have you felt fear in starting a company that has such an ambitious goal or have you just been confident the entire time in what you’re doing?
LD: I’m confident in it. There certainly have been plenty of people who tell me that I’m crazy for doing this, but I think it’s possible. Technology-wise, it’s possible. The really heavy risks are on the regulatory side; it’s very tricky in the US to build prototypes for advanced nuclear reactors just because of the way the laws are structured. So, the heavy lifting is really from the political standpoint, which is left to me as an engineer. It’s just an exciting time in the industry as a whole. In addition to Transatomic, there are a number of really great nuclear reactor designs that people are working on right now. There’s this wonderful momentum building and there’s this wonderful excitement about all of the new things that people can do with nuclear power - it’s just a really fun time to be in this field. What are the major obstacles impeding the adoption of your technology? LD: The biggest obstacle by far is political. Right now in the United States, there’s no rapid pathway for
commercializing a new type of nuclear reactor. The Nuclear Regulatory Commission is very good at licensing and evaluating the older types of product designs, but it’s not in its mandate to even look at the advanced reactor designs. It’s not like the NRC is bad, it’s just not in its job description right now to look at the advanced reactor designs. There’s a hurdle when we say, “We need a regulatory system that can allow us to do this and we need political support to basically influence the NRC and influence the regulatory bodies to do this.” So, it’s really a political lift. Science-wise, the science is all there. We’re running lab-scale tests just to verify our component lifetime, but engineering-wise, it’s straightforward to roll out. The tricky spot is finding the right place to start it; finding the right pathway by which to regulate it safely. How can your technology help alleviate some of the traditional concerns about nuclear power? LD: A good way to talk about this is to talk about where the design came
from in the first place. Our design was inspired by work done at the Oak Ridge National Lab in Tennessee back in the 1960s. They developed a type of nuclear reactor called a molten salt reactor that’s extremely safe. It basically was incapable of melting down. If there were an accident, even if there were a loss of external electric power, even if there were no operators on site, their reactor design was able to shut itself down safely and it would freeze solid over the course of a few hours. Their type of reactor, though, was fairly expensive and it had a low power density. It was pretty bulky and it was before there had been any commercial nuclear accidents so the technology was abandoned, basically. People said, “Well, why would we pay so much more for a safer reactor when clearly we don’t need a safer reactor?” So what my co-founder and I were able to do - we looked at that older design (the extremely safe design) and we were able to change some of the materials and the geometry in the reactor core to make it much more compact, cheaper, and able to consume nuclear waste while keeping
“There’s this wonderful momentum building and there’s this wonderful excitement about all of the new things that people can do with nuclear power.” Co-founders Dr. Leslie Dewan and Mark Massie work at their office in Cambridge, MA SUMMER 2015
all of the same safety methods. We go at the safety issue head-on by basically bringing back this older, much safer design, and we’re addressing the risk issue because with our new materials and layout, it’s able to consume and break down the long-lived components in used nuclear fuel. Best-case scenario, we have full-scale adoption of your technology. What sort of implications are we looking at? LD: One of the crazy things is the sheer amount of energy that’s left in nuclear waste. Worldwide right now, there’s about 270,000 tons of used nuclear fuel that exists. If you’re able to take that fuel and put it into waste-burning reactors like Transatomic’s, you could produce enough electricity to power the entire world for 72 years, even taking into account increasing electricity demands. It’s just a staggering amount of energy, and what I ultimately want is for people to stop thinking of this nuclear waste as a liability that needs to be disposed of and buried underground, and think of it as a resource and a source of energy that we can tap and use to generate a staggering amount of carbon-free
electricity. Also, the good thing is that the process by which you extract the energy from the waste reduces its radioactive lifetime. Basically, you can think of it as long-lived waste; it’s so long-lived and so dangerous in part because it has so much energy left in it. By extracting the remaining energy, we’re reducing its radioactive lifetime from hundreds of thousands of years down to hundreds of years for the majority of the waste. It’s still a long time, but it’s more of a human timescale rather than a geological timescale of hundreds of thousands of years. How would power plants that are using your technology interface with the levels of wind and solar energy coming onto the grid? LD: I see them working in parallel basically. I think it’ll be driven a lot by what types of battery technology get developed over the next decade or so because if there’s better battery storage, then a lot of electricity generation will shift to whatever the cheapest means of electricity production is. If there’s very, very cheap solar, a lot more of it will be solar. If there’s very, very cheap nuclear
(which is possible), then a lot of it will be nuclear. But I think no matter what, it will also end up being a mix of solar and wind and nuclear and hydro. I see it as probably dividing up geographically because there are parts of the country where solar can be extremely cheap, parts of the country where wind can be very cheap, and then in other parts of the country where those two are more expensive, I see those regions being where nuclear can dominate. If your technology were to grow at scale, would there be a role for natural gas in electricity generation? Would coal just become completely obsolete? LD: Ideally, I’d want coal to become completely obsolete. I think that if we can get rid of coal, it will be universally good for the environment. Right now, according to the numbers we have, we can compete successfully with coal. We can be cheaper than coal. Right now, natural gas is just so cheap in the US. It’s cheap to produce and it’s just ridiculously cheap to put up new natural gas plants. Looking at the numbers, I think it’d be hard for us to be cheaper than natural gas in the US if the
“What I ultimately want is for people to stop thinking of this nuclear waste as a liability...and think of it as a resource and a source of energy that we can tap and use to generate a staggering amount of carbon-free electricity.”
rates stay the same. Internationally, natural gas is very expensive, so we can compete with natural gas overseas, but with fracking in the US, it’s harder. I feel like the very, very low natural gas prices are stifling new construction of many different forms of carbon-free electricity generation. Are you focused on getting this implemented in the United States only or are you looking at other countries in which to potentially implement it? LD: Within the US right now, there are a number of coal plants that are being shut down. We care about this being an alternative to coal or a replacement for the coal plants that are going offline in the US right now and as an alternative to the coal plants that otherwise would be put up internationally over the next several decades. In China especially, there are a staggering number of coal plants being built right now and if you look at the air pollution there, it’s just clear that they need an alternative. The world needs an alternative.
Do you think that we could successfully address the climate change issue without nuclear power of some type? LD: No matter what, just by looking at the numbers, we need to have nuclear power as part of the portfolio if we want to stop climate change because otherwise there won’t be enough electricity. So much of the rising electricity demands will be coming from China, from India, from some parts of Africa where there are people who are moving out of poverty and they need electricity to bring themselves to a higher standard of living. You need to make an economic argument. You need to provide a very, very inexpensive source of electricity. You can’t ask people in developing countries to pay extra for carbon-free electricity, so you need to provide people with carbon-free electricity that is also cheaper than coal or the other fossil fuels in that country.
You are literally trying to revolutionize the energy industry. I assume that it takes a certain amount of courage to pursue a solution on such a large scale, and we need people like you to pursue their dreams and pursue these solutions on such a large scale if we’re actually going to make the changes that we need on this planet. Do you have any insights about your own qualities that have really helped you find the courage to tackle this problem on such a large scale? LD: I don’t see it as an issue of being courageous or not. I can’t imagine anything else that I’d want to do more than this. It sounds so cheesy, but I really do feel extremely lucky every day that I can have a job that I absolutely adore where I’m using the skills that I have to potentially be very helpful for the world. I don’t think I have the benefit of enough introspection, possibly, to figure out what personal qualities I have. I’m just lucky enough to have a job that I really, really love. Photos: Transatomic Power SUMMER 2015
A TALE OF TWO BIOFUELS
BIODIESEL VS ETHANOL BIODIESEL AND ETHANOL ARE BOTH NON-PETROLEUM-BASED FUELS, BUT DIFFER SIGNIFICANTLY IN HOW THEY ARE MADE, USED, AND IMPACT THE ENVIRONMENT.
APPLICATIONS Though it is often blended with petroleum-based diesel, biodiesel can typically be used in any diesel engine without modiďŹ cation. In fact, the inventor of the diesel engine, Rudolf Diesel, experimented with vegetable oil as a fuel in the late 1800s.
Most gasoline sold in the US contains up to 10 percent ethanol, which can be used in all gasoline-powered vehicles. Vehicles with ďŹ‚ex-fuel engines can accommodate fuel mixtures of up to 85 percent ethanol, known as E85.
RAW MATERIALS Biodiesel can be made from vegetable oils, animal fats, and even used restaurant grease. While most biodiesel is currently made from soybean oil, some producers are beginning to use oil that is secreted by algae.
Ethanol is a type of alcohol and can be made from sugarcane, corn, or other grains such as barley. Cellulosic ethanol, a more advanced fuel, is made from non-food plant waste like corn stover (the non-edible parts of a corn plant) or woody crops like switchgrass.
ENVIRONMENTAL IMPACT Biodiesel made from used restaurant grease has a minimal environmental impact because it involves repurposing a waste product. Algae-based biodiesel is also promising because algae can be grown in areas that are unsuitable for farming, often using agricultural waste such as spent grains used in beer brewing. Other biodiesels will have varying environmental footprints depending on the type of crop used to produce the oil.
Ethanol made from corn and other food crops raises concerns about land use and the impact of fertilizers and pesticides, as well as food security. Cellulosic ethanol, however, can can be made from plants that grow on land that is unsuitable for farming, as well as from agricultural waste products.
Source: US Energy Information Administration
S L E U F O I B T N O M D PIE The company, founded in 2002, creates fuels that have significantly better emission profiles than those of any current fossil fuel choices by aggregating fats, oils, and greases from within fifty miles of its plant in Pittsboro, North Carolina, and converting them into cleaner-burning biodiesel and boiler fuels. The company then distributes those fuels to customers within the same fifty-mile radius, creating a “community-scale biodiesel” plant. We spoke with Co-founder Lyle Estill to help us understand the current and future state of the biodiesel industry.
When was your company founded and what growth have you experienced since that time? Lyle Estill: We started making fuel in the backyard in 2002. That’s the last time many of us went to a gas station to fill up. We broke ground on our commercial plant, with a 1 million gallon per year capacity, in 2005. We went from three of us making fuel for our families to a co-op of 500 members. Revenues went from $0 to $4.5 million at peak. Renewable fuels have enjoyed a wild ride over the past 13 years that we have been involved. Since entering commercial production, our personal best was 1.3 million gallons in one year. Our personal worst was 40,000. Sometimes biodiesel looks like genius. Sometimes it appears foolhardy. We’ve enjoyed both. Who are your primary customers? LE: We have two primary off-take customers. The first is our cooperative. This involves filling up individual cars, trucks, tanks, and boilers with small quantities at a time - many 14-gallon 88 |
fills. The second is oil companies. We sell 100 percent biodiesel (or B100) to oil companies who blend our product with petroleum fuels and sell it in lower percentage blends like B20 (20 percent biodiesel, 80 percent petroleum diesel) or B2, B5, etc. What are the largest challenges associated with the biofuel industry and how are you working to overcome them? LE: Energy policy is far and away our greatest challenge. The biodiesel industry has been a terrific roller coaster ride. Sometimes there are production incentives. Sometimes they lapse. Sometimes demand for clean air drives up margins. Sometimes policymakers lose interest in the space. We work hard to explain how fossil fuels have successfully externalized their true costs and are actually the most heavily subsidized product in the average consumer’s market basket. Our preference would be no subsidy for anything ever. If we stopped subsidizing petroleum products, we would clobber them.
Does your bottom line directly benefit from your sustainable business practices? If so, how? LE: We think so. Many of our customers pay a premium for our products because they understand that they are sustainably produced. Our products offer freedom from the petroleum grid. When you are driving around on B100 biodiesel from Piedmont, you are free of war in the Middle East, free of dead pelicans on the Gulf Coast, free of tithing to Halliburton. Our products reduce our consumer’s carbon footprint, which lightens their contribution to climate change. What business practice are you most proud of? LE: We are very proud of the work we have done on life cycle analysis. By successfully measuring the amount of fossil energy required to make a gallon of fuel, and comparing it to the amount of renewable energy made available by that same gallon, we have demonstrated significant
environmental and air quality gains. Academics and others cite much of our work in this area. There is a high likelihood that we are making the lowest-carbon fuel in America. Do you have any predictions for the future of the biofuel industry? LE: Today the biodiesel industry is on the ropes. We are in another “foolhardy” period. Depressed
petroleum prices combined with high global demand for fats, oils, and greases, along with an absence of energy policy, make for a horrible environment for biodiesel. America does not seem to know where it wants biodiesel to be in its energy mix. What’s next for Piedmont Biofuels? LE: Biochar. By combusting wood chips in the absence of oxygen we
are able to create a high-value char product that can be used in filtration, and when fully charred, is a valuable soil amendment. We believe biochar will enable us to move from carbon neutrality to carbon negativity. For us, climate change is the moral imperative of our time, and we are fully invested in delivering realworld solutions that can change our relationship to this garden planet. Photo: Piedmont Biofuels
“FOR US, CLIMATE CHANGE IS THE MORAL IMPERATIVE OF OUR TIME, AND WE ARE FULLY INVESTED IN DELIVERING REAL-WORLD SOLUTIONS THAT CAN CHANGE OUR RELATIONSHIP TO THIS GARDEN PLANET.”
Two chefs, each with the same training, ingredients, and kitchen, can create very different recipes. Both good. But very different. It is much the same with men and women leaders. Women lead differently than men. It shouldn’t be a surprise. We’ve been talking about how men and women interact differently on a personal level for decades. It has even been said that “men are from Mars and women are from Venus” to explain how expectations and even language and perception differ between the sexes. Women should celebrate their unique strengths, not emulate men, or, for that matter, be exactly like the women who came before them. We are all unique individuals. Women have skills and abilities that they bring to problem solving, whether in the public sector or the private sector, generally including the ability to multi-task and hold onto disparate ideas, a lack of ego, an ability to reach consensus, and a desire to please. There may be some truth to the conventional wisdom that women do try to make people happy. And making people happy leads to good public policy - and good products. More and more, women are embracing what makes them uniquely skilled leaders. While inequalities still exist - in compensation, in the number of women in pinnacle positions, and in perceptions there has been a shift. I have been lucky to work for, learn from, and be mentored by fantastic women who knew that they were unique and different from men and who used those differences to succeed. And I learned a few lessons along the way.
S D A LE BY JANET WOODKA MULTI-TASKING IS A SKILL - AND AN ART The corpus callosum is a link - a highway of sorts - between the left and right brain. In women, it is thicker and the connections are more varied. That may be why I can plan a trip, schedule the plumber, write an article, mentor someone, and get my hair cut all at once. Recent management studies bear this out, noting that women are almost twice as efficient as men when given five or more tasks. A man’s strength generally lies in focusing on a single task. While allowing women to be conversant on many issues at the same time, this ability to multi-task also enables women to see the big picture as well as the intersections between issues.
EGO ISN’T THE DRIVER Women will often check their egos at the door, especially if it is for the good of the whole. Women leaders want respect and aren’t as reliant on recognition. For them, there is satisfaction in creating a great show, not being the star of it. Women are more inclusive and listen to differing viewpoints, sometimes altering their own viewpoint as a result. If a man runs a meeting, he will often put his ideas forward at the beginning. A woman, however, will solicit the viewpoints of others and synthesize them into a coherent theme as the meeting progresses. There is a nurturing aspect to the way women manage discussions and create consensus.
THE GUT IS HEARD
HARD WORK IS JUST WHAT IT TAKES
Recent studies have found that women are more willing to ignore rules and take risks. Women leaders will gather information but, if there are unknowns, they will go with their gut and trust their instincts. This is invaluable in public policy decision-making, when information can be scarce or contradictory. During BP’s Deepwater Horizon oil spill, EPA Administrator Lisa Jackson relied upon her instincts when deciding to use chemicals to disperse the oil. The incoming information was not perfect, but further delay would have caused more irreparable harm.
For many years, women have had to be better than men in order to be on equal footing. The oft-heard comment, “I need to perform twice as well to be thought of as half as good,” has been a hallmark, especially for women early in their careers. However, hard work pays off for women, and they know it. Hillary Clinton put her head down and became, while she served in the Senate and as Secretary of State, “a work horse, not a show horse” and earned the respect of those who served with her.
“More and more, women are embracing what makes them uniquely skilled leaders. While inequalities still exist - in compensation, in the number of women in pinnacle positions, and in perceptions - there has been a shift.” “GIRL TIME” PAYS OFF
SOCIAL NETWORKING IS IN HER GENES
Women leaders have stellar interpersonal skills. Perhaps from navigating family dynamics or just all of that “girl time,” from a young age, women use language that is less combative, more conciliatory, and less driven by ego. Studies have shown that women are more adept and faster at intuiting facial and vocal changes. This allows women leaders to better and more quickly read situations and people, weighing concerns or obstructions and dealing with them in a way that makes participants feel included. And women listen. Women will explore another person’s point of view and ensure that it is fully a part of the discussion. As a result, people feel more heard and understood, leading to the gold star in leadership circles and to people feeling valued.
Women leaders excel at social networking. Women share stories and experiences, and that is definitely true in the workplace and in the development of public policy. When I was in government, the women would often call each other offline to chat or take a temperature - to see who or what is really driving the train, so to speak. Oftentimes, these informal conversations led to insights that would lead to consensus or a new path. We could do it because we had built personal relationships, meeting for drinks, coffee, or dinner. We knew the names of children and about the mother who was ill. At the EPA, we even called the network the “SHE-P-A.” We supported each other, encouraged each other, and listened to each other.
Like food, leadership has many flavors. The flavors that women leaders bring to the table are interesting, unique, and very much a part of the essential table. Let’s celebrate the differences and indulge in them.
Having worked for over two decades on complex social policy issues at the highest levels of government, Janet Woodka is using her experience and network to give back to others. Founder of Laignappe, LLC, which provides mentoring and strategic counseling while funneling profits back to startups and nonprofits trying to make a difference in the world, Janet also focuses on amplifying inspirational success stories through various media channels.
The percentage of women in board-level positions in corporate America
The percentage of women in board-level positions at S&P 500 companies
52% The percentage of professional-level jobs held by women
The percentage of undergraduate and graduate degrees earned by women
The percentage of CEOs in Fortune 500 companies who are women
On average, women are loaned $1 for every $23 lent to a man
The percentage of women in the top five leadership positions at S&P 500 companies
On average, women make $0.78 on the dollar when compared with men
SOCIAL VENTURE NETWORK
ocial Venture Network (SVN) created the first peer-to-peer community of entrepreneurs and business leaders dedicated to transforming the way the world does business. This pioneering organization connects and empowers its members - which include many of the most well-known sustainable business visionaries - to leverage the power of business to address social and environmental problems and to create a more just, humane, and sustainable world. We got the chance to speak with Executive Director Deb Nelson about the insights she has gained from mentoring and interacting with missiondriven business leaders for the last 14 years.
â€œI am most inspired by the next generation of entrepreneurs who understand what it means to be a mission-driven leader and mission-driven company.â€? SUMMER 15
We’d love to start from the beginning with you and talk about your journey to becoming the leader of SVN. Deb Nelson: I was a Peace Corps volunteer in Cameroon and that was a life-changing experience for me. After that, I went to business school, where I attended a Students for Responsible Business conference and heard Ben Cohen from Ben & Jerry’s and Anita Roddick from The Body Shop speak. They were early members of Social Venture Network. They were talking about leveraging the power of business to solve social problems, and they were fired up, fierce, unapologetic, funny, and innovative, and I thought, “This is what I want to do with my life. I want to use the skills that I’ve learned in business and do meaningful work.” My parents, who were almost polar opposites, also factored into my career path. My father was an entrepreneur and my mother was a minister, and Social Venture Network operates at the intersection of the business community and spirit. When I arrived at my first SVN conference 15 years ago, I just fell in love with the people and the mission of the organization. A year later, I was actually working at Social Venture Network and it’s been 14 years now. I am more inspired to be a part of this community and a part of this movement than I’ve ever been. It’s the most hopeful place I could imagine working. What are the most common challenges that you’re seeing entrepreneurs face and what are the skillsets needed to help them overcome these common challenges? DN: What entrepreneurs typically need are the right solutions at the right time. There’s no one-size-fits-all challenge. For some entrepreneurs it’s raising capital and then it’s managing growth and then it’s organizational and HR issues and then it’s sales and marketing. The problems change and the problems never go away.
You never have slow steady growth to the top and then you’ve made it! It’s always hard and there are always challenges. Being part of a community of trusted, respected leaders, and having a group of people that you can call on for the right advice, connection, or idea so you can get to the best solution at the right time is critical. Entrepreneurs can’t step out of their business and spend several weeks figuring out the right solution to their most pressing problem. They need real-time, immediate help. If they already have a support community and trusted relationships, they can get the solutions that they need in real time. Have you identified any traits that most effective leaders share? DN: I think about this all the time because we do so much work on leadership. There are two answers; one is connected to an article that I read years ago by Leigh Buchanan called “Between Venus and Mars: 7 Traits of True Leaders.” It’s about leadership traits that were once considered feminine, like empathy, vulnerability, humility, inclusiveness, generosity, balance, and patience. The whole article is about how important it is to have leadership teams that have both feminine qualities of leadership and masculine qualities of leadership. The new economy is crying out for feminine qualities of leadership. Feminine qualities can show up in men and women. The old models of leadership, such as command and control, just don’t work anymore. You really need to be inclusive, as Eileen Fisher is. You really have to have humility, as Margot Fraser from Birkenstock has. You really need to have generosity, as Ellen Dorsey from Wallace Global Fund has. No one has all the answers; no one even has most of the answers. So asking the right questions, surrounding yourself with a diverse and inclusive team, and really having excellent listening skills, especially in tough times, is critical.
While all of those traits are key, really remember that when the going gets tough, that’s when you need to listen. The other thing that pops up is the “outsider’s advantage.” One of the things that I’ve noticed as I’ve worked with and interviewed SVN members over the past 14 years is that the leaders who have had an outsider experience, whether it’s a physical outsider experience - they’ve lived in a foreign country for part of their lives - or an outsider experience where they were not part of the insider group - they looked different, they acted different, they spoke differently, they were different have greater listening skills, greater empathy, greater humility, greater patience, and greater generosity. When you are an outsider, you have to look and listen very closely, you have to experiment with different things, you have to make a lot of mistakes, you have to know resilience and perseverance. All of those things that you learn as an outsider serve you well as a leader and they also help you with innovation. For example, Margot Fraser from Birkenstock USA came of age in Germany during World War II. Her family was against the Nazis. So they were outsiders in Germany and then she moved to Canada. She lived in Canada and the US after World War II when it was not popular to be German. Then she decided to start this shoe company with no experience in the shoe industry, none whatsoever. She said if she had had any experience in the shoe industry, she never would have started her company, but it was the combination of having humility, patience, empathy, and resilience that led to her ultimate success. What advice do you have for mission-driven entrepreneurs in businesses that are working to get off the ground? DN: I would say connect with a group that you can lean on and that you can learn from. For some entrepreneurs, that will mean creating a small
advisory board of smart, experienced people who are different from the entrepreneurs in some important ways - fresh ideas, advice, new perspectives. Join a community like Social Venture Network, which was
What is inspiring you most right now and what is giving you hope for the future? DN: I am most inspired by the next generation of entrepreneurs who
way to create and grow a missiondriven company is amazing. They’re asking, “How can I be the best leader I can possibly be and really embed my values and my mission into everything that I do?”
“People are no longer arguing about whether missiondriven business principles make sense or not. They are wondering, ‘How do I do this in the smartest, most effective way’”? designed to create a safe space for people to talk about their challenges and to share what’s working, and to share resources, connections, and ideas. There are so many wonderful groups and communities that are out there. Regardless of whether its an advisory board or SVN or something else entirely, it’s so important to have a support group that is not just your family, friends, or employees. It has to be a different group that you can call upon for fresh ideas and a group that you can share openly with. There are lots of different ways that you can become connected to a group of peers that can support you.
understand what it means to be a mission-driven leader and missiondriven company. When SVN was first created in 1987, people thought the business leaders in the network were crazy. People laughed at our members, saying the purpose of business was not social and not environmental; the purpose of business was to generate a profit, that’s it, end of story. Today, young people get it. They understand from a very early age that it makes total sense to account for people, planet, and profit. It makes sense in terms of ethics, but it also is just smart business to them. To see so many people talking about the best
Comparing that to 28 years ago when people were saying “That’s ridiculous - you’re crazy,” now people are saying, “Wow, those early mission-driven businesses and leaders were visionaries.” To see that change - and to read a magazine like Conscious Company and see all the innovative ways that people are creating conscious companies gives me hope. People are no longer arguing about whether mission-driven business principles make sense or not. They are wondering, “How do I do this in the smartest, most effective way?” That gives me hope for the future. Photos: SVN
Dolores Huerta speaking at an SVN conference (left) and Dan Zanes, Liz Bohannon, and Pam Chaloult attending an SVN gathering (right) SUMMER 15
THE SECRET INGREDIENT IN LEADERSHIP Dr. Raj Sisodia, co-author of “Conscious Capitalism” and a thought-leader behind the Conscious Capitalism movement, along with Nilima Bhat, Founder of Sampurnah: The Wholeness Practice, are collaborating on a new book based on the premise that the prevailing leadership paradigm drastically overemphasizes masculine values such as hierarchy, command-and-control, and using “carrots and sticks” to induce desired behaviors. The authors posit that in order to be able to address the myriad social, environmental, cultural, political, and economic issues that face the world, a more holistic style of leadership based on the integration of feminine and masculine values is needed. Specifically, the most effective leadership styles in today’s highly evolved world are ones that come more naturally to women and incorporate qualities that are typically associated with feminine values, such as compassion, nurturing, and relationships. We had the chance to speak to the authors and asked them to expand on their theory.
Can you provide us with a more indepth overview of the concept that will be the subject of your upcoming book?
“The companies involved with Conscious Capitalism are very much aligned with what are traditionally seen as feminine values love, care, compassion, nurturing, building relationships, holistic approaches, and win-win outcomes.” 98 |
Raj Sisodia: Much of this was inspired by the work that I have done over the years with Conscious Capitalism. The companies involved with Conscious Capitalism are very much aligned with what are traditionally seen as feminine values love, care, compassion, nurturing, building relationships, holistic approaches, win-win outcomes, etc. These cultural values are also leadership qualities, for both men and women. Furthermore, the companies that are successful also take into account the well-being of all of their stakeholders. There’s a trend toward a more holistic approach to leadership now. At the same time, we’re seeing a lot of trends in our society, such as greater access to higher education, that are allowing women to finally have an opportunity to have an equal impact in the world. Women now outnumber men in the US workforce, and there are more women with
college and graduate degrees. Nearly 60 percent of college students now are women, and they get higher grades. All of this is leading to the rise of more feminine values in society and a feminization of the culture that is about to happen in a culture that has been dominated by masculinity. It will be a journey to a more balanced and holistic approach that will integrate and blend the best parts of masculine and feminine. Unfortunately, there hasn’t been a focus on the best parts of the masculine values, but rather on the negative masculine qualities like domination, aggression, competition, focus on winning at all costs, zero-sum games, and even viewing business and leadership through the metaphor of war. We need leadership today that is a true blend of the best of the mature masculine and mature feminine qualities for the overall well-being of mankind. What does this theory look like in practice? What companies epitomize this?
RS: Southwest Airlines, with its stock market symbol of “LUV.” In fact, we were just talking to Colleen Barrett [President Emerita of Southwest Airlines] about the company’s culture of truly caring for people. There is a focus on caring for its employees, customers, suppliers, everybody, which is deeply embedded in that company. Whole Foods is another example. It was founded on the question, “Can you build a company on love and care, instead of fear and stress?” The leaders of the company often talk about the feminine values of care and compassion. For example, when they make hiring and promotion decisions, they ask themselves about the person’s capacity for love and care. Also, at The Container Store, the majority of the executives are women and they value and truly care about their employees, their customers, and all of their stakeholders. The company embodies a harmonious blend of mature feminine and masculine values. Have you identified any strategies that help companies foster these feminine values that add such value to businesses? Nilima Bhat: We have developed a framework for the book that is intended to help companies and people. It begins with the idea of presence as a way to tap into deeper wisdom, one’s higher self. From a place of presence, leaders are able to cultivate the three critical capacities of leadership: wholeness, flexibility, and congruence. Presence can be cultivated using a practice that we have developed. If you look at all the crises in business today, they typically are crises of leadership and crises of consciousness and imbalance, which result from not coming from a place of presence and wholeness. If we want to have more conscious leaders, we need leaders to step in and become more self-aware and cultivate more presence - presence where you can step back and become more in touch with your core authentic self. That has a power, and that power is what we’re calling Shakti, which is the innate power within us. We then no longer need to play the traditional territorial power games or win-lose games in our leadership or in our teams when we come from a true place of power that comes from within - from a place of presence. From there, you can intuitively sense whether a situation or leadership moment calls for a more masculine set of capacities or more feminine capacities, or simply a balance of both. Everything begins with stepping in and then stepping up - stepping up to a place where you can cycle between the masculine and feminine polarities and truly understand what will restore balance in a situation or what values are called for. It’s critical to give people the language and the experience of understanding what it feels like to apply more masculine energy or more feminine energy in a situation. Giving people that experience sensitizes them. First, we need to understand that we have both of these energy areas within us to call upon, and, second, we need to know how to flex between the two as the situation requires. This is where conscious leadership is cultivated. Finally comes congruence, i.e., being “on purpose.” Exercising the power of presence is a truly pleasurable experience that translates as stepping out into the world manifesting our purpose in a way that is unique to us - the sweet spot of where our meaning meets our passion.
“We need leadership today that is a true blend of the best of the mature masculine and mature feminine qualities for the overall well-being of mankind.” Raj Sisodia, PhD, co-founder of Conscious Capitalism, Inc., is Franklin Olin Distinguished Professor of Global Business and Whole Foods Market Research Scholar in Conscious Capitalism at Babson College in Wellesley, MA. He has published more than 100 academic articles and eight books, including “Conscious Capitalism” and “Firms of Endearment.”
Nilima Bhat is founder of Sampurnah: The Wholeness Practice. She facilitates personal transformation through selfawareness, self-leadership, and self-empowerment. After a successful multinational career, she was certified as a yoga teacher and became an integrative medicine coach and spiritual guide. She is co-author of the book “My Cancer is Me.”
SEEKING VOCATION AND FINDING SOUL BY JAKE BORNSTEIN I made a big decision in high school, I think around age 15 or so. No matter how much I wanted to create a more beautiful world, or how many ideas I had for how to do it, none of it mattered unless I had the actual power to put it into place. This decision carried me to Princeton, and on to the inside track at the planet’s largest hedge fund, where, one year out of college, I was giving portfolio advice to the heads of national social security and reserve funds, writing research delivered regularly to President Obama’s desk, and building out comprehensive maps of the world’s entire financial system. For the achieving parts of my personality, the parts that love to understand things deeply, it was wonderful, the culmination of something. And for a while, money was a good enough answer to the little voice inside me asking, “why?” Until it wasn’t. To me, that question, and the obstacles it brought me, were the beginning of a dialogue with my true self - my soul, my essence, my being. If you’ve felt it, you know what I’m talking about - those moments of wholeness, where you feel, you know, you are in the right place, living the right life at the right time. If you don’t know - what feels expansive? What in each moment makes your chest feel like it’s going to burst with possibility? What makes you feel sick, and what makes you feel nourished? Trust your lived experience, even when it doesn’t make sense. I’ve spent a lot of effort figuring out the
place. The scale of my dreams was never the problem; the problem was imagining that it was the only way my soul would speak. I remember a night at a permaculture course that I went to after leaving my job. I was just putting the finishing touches on my final project, a full redesign of a nearby farmer’s land. I remember the wood table outside, a big piece of butcher paper and colored pencils, childlike glee as if I were making an elaborate treasure map, the kind of monomaniacal focus and intoxicating joy of doing a project simply because I wanted to. I remember walking downstairs to my whole class celebrating under the stars with guitars,
our jobs, our desires, our inconsistencies and to feel incommensurate to the demands of living a life that truly feels like our own. Living this way has led me through financial hardship, paralyzing uncertainty, and the lost promise of a predictable life. But I believe the ability to listen to soul is the base material of philosophers’ stones - the way to turn the lead of life’s challenges into potential gold. This is the deep power of living a souldriven life. Whatever ways life breaks you into pieces, you can feel fundamentally whole. For me, in the years since, this has included elation, profound hopelessness, and something like maturation into the
“BY TAKING MY INNER WORLD SERIOUSLY, MY OUTER WORLD HAS BLOSSOMED WITH POSSIBILITY.” right vocation, when the question I wish I had asked was how to hear my soul. It did not always sound as I would have imagined it. When I first heard that call - in the form of restlessness, illness, and depression - I went to work with the only tools I believed I had. I made Venn diagrams of my interests, values, and talents. I read philosophy and went to conferences and met activists and took personality tests and mapped capacities onto potential needs within the organization and broader world. I believed that purpose could be deduced; if I found the right leverage point, the right project, the right expertise, I would feel whole. And that belief kept me trapped. When I imagined that my calling had to be something “big,” a vocation or venture that would make a good TED talk, I missed the subtle voice of my truest self as it actually appears. Sometimes it just wants to drink tea and listen to the rain. Sometimes it’s drawn to a particular tree or person, a little voice saying, “I want to go talk to them.” Sometimes it’s a serendipitous late night with old friends and new ones, passions and projects and wounds and truths spilling over, or chance meetings on the street that, when I open up to really listening - to others, to myself - the work seems to simply come into
drum beats tapped out with silverware against overturned glasses, and I remember the scary, wonderful, pointless freedom of adding my voice to the chorus. I haven’t since used permaculture directly in my career (and certainly not singing!), but that’s not the point. I had remembered the joy of simply being. It’s not always easy. When we first begin to really listen to our own truths, what we see can be ugly. I began to see all my hypocrisies, the way I would accommodate and please, the many ways I lied to myself and others. I became tormented by my dependency on a modern industrial system that felt unjust and my unwillingness to really leave it. I was scared of financial insecurity, of being unable to support myself and my family in any way that felt coherent. I felt queasy staying in the “plan” of my life, and terrified at the vast open space outside it, wondering if it was really possible for me to meet the world as I truly am, rather than the professional image I had created. When we begin to ask our lives what really feels good, beautiful, and true, it can feel like a gut punch to find how little passes. It’s easy to make parts of ourselves (or others) the enemy - our minds, our cultural conditioning,
man I want to be. By taking my inner world seriously, my outer world has blossomed with possibility. I find the richness of simply being me, in this moment, in the life I lead. That is the greatest treasure I have. The greatest treasure I can offer. And it is always there, when I am willing to listen.
Jake Bornstein is a facilitator, coach, strategy consultant and writer. He works with individuals, teams and couples to uncover what makes each person uniquely themselves, and how to work with what they have in service of their essence. His past work includes time on the executive team at the nonprofit Slow Money, as an investment associate at Bridgewater Associates, and as a board member of the neighborhood revitalization group Re:vision. He can be followed on twitter @JLBornstein
BUILDING DIVERSE AND INCLUSIVE BUSINESSES
An Imperative for Conscientious Companies BY GERRY VALENTINE
Several weeks ago, I participated in a panel discussing diversity in the workplace. The title of the panel was “Diversity and Innovation,” but the real topic was “Why are we still having this conversation, and why haven’t we made progress?” It’s an important question for the future of American business, and it’s an area in which I believe the conscientious business community should be taking a leadership role. Diversity has been a hot topic for three decades, yet the numbers are still appalling. Minorities - meaning African-Americans, Asians, and Latinos combined - comprise only 4 percent of Fortune 500 CEOs. Women make up only 4.8 percent. Similar disparities can be found down the corporate ladder and across all sizes of companies. At the same time, numerous studies have demonstrated that diversity increases innovation; this means that most companies are putting themselves at a strategic disadvantage. I believe the diversity problem persists for three reasons: 1) We are dealing with a problem that is often unconscious, making it harder to address; 2) fostering diversity requires more sophisticated leadership skills; and 3) most companies haven’t yet made the necessary commitment. 102 |
UNCONSCIOUS BIAS RATHER THAN OVERT DISCRIMINATION For the most part, overt discrimination has become rare. However, we now have a problem that is actually harder to solve “unconscious bias.” One interesting study that illustrates the problem examined employers’ willingness to interview job candidates based on perceived race. The study took identical resumes and substituted white-sounding names (such as Emily and John) with stereotypically African-American names (such as Lakisha and Jamal). The resumes with white-sounding names received 50 percent more interview callbacks. A similar study on gender bias in the sciences demonstrated that changing the name on a resume from John to Jennifer caused reviewers to rate the candidate as less qualified and to recommend a 14 percent lower salary. Other studies show a similar dynamic with performance appraisals and promotions, and they reveal how very subtle discriminatory behaviors (sometimes called “microaggressions”) produce unwelcoming work environments. One major driver of unconscious bias is what psychologists call “schemas” - unconscious shortcuts all humans use to organize complex ideas. Schemas make daily life possible because, for example, they allow us to form a generalization of what a cat looks like and thereby
“Inclusivity means valuing different types of people specifically because of the different perspectives that they bring, and it involves leveraging those perspectives in order to drive innovation.” recognize a different kind of cat. However, when applied to people, schemas often lead to bias - for instance, when unfavorable media representations of women or minorities lead to prejudice. Although schemas can be difficult to break, understanding our prejudices is an important first step, and all humans have prejudices. Harvard University has an excellent free online tool that can help people identify their internal prejudices - the Implicit Attribution Test. COMPLEX LEADERSHIP SKILLS In order to foster diverse work environments, leaders need a combination of skills that include selfawareness of their own biases, the commitment to set standards, and the ability to skillfully manage conflict. The self-awareness to identify their own unconscious biases, combined with the willingness to challenge those biases, provides the foundation to lead by example. I know a male CEO who has made a significant commitment to understanding and combating his own unconscious biases. When he witnessed a male employee looking a female employee up and down during a conversation, he quietly pulled the male employee aside and said, “You don’t look at me like that when we’re talking; why would you look at her like that?” This sent a clear message about how he expects women to be treated at his company. These leaders also need to understand the difference between diversity and inclusivity. Diversity is simply having different types of people, and it’s often simply a “checkthe-box” activity. Inclusivity means valuing different types of people specifically because of the different perspectives that they bring, and it
involves leveraging those perspectives in order to drive innovation. Inclusivity can also trigger “creative abrasion” - increases in conflict from bringing different perspectives together. That is a natural part of the creative process. Leaders need the ability to make sure conflict stays productive so that it drives creativity rather than destructive behavior. STEPPING UP TO THE CHALLENGE Addressing diversity and inclusivity requires a deeper commitment than most companies have made. Many simply require a few legally-focused diversity trainings, but that is often ineffective and is sometimes even harmful. Recent research suggests that mandatory diversity training that emphasizes legal risk and fails to demonstrate senior leadership engagement often backfires. It generates a perception that the company is just checking a box to protect itself. A more effective approach is to actually make diversity training optional but to also have very visible senior leader participation. For example, if the CEO or other senior leaders attend all diversity trainings and actively participate, that sends a very clear message. Sometimes companies complain that diversity training isn’t important enough to warrant senior leadership time, which, of course, also sends a very clear message. Another effective approach is to establish diversity committees (that include senior leaders) in order to develop strategies and set measurable goals - just as you would for any other business activity. Most importantly, companies need to recognize that diversity and inclusivity are longterm goals that require an ongoing commitment.
By the year 2040, the majority of US citizens will be minorities, and, of course, we are already 51 percent female. If we fail to address the diversity challenge, especially at the most senior levels, we will have a situation where companies do not reflect their own customers. We know the problem is already stifling innovation and business growth. This is a challenge where it is critical for the conscientious business community to demonstrate leadership. Building companies that reflect society and fostering equal access to opportunity fall squarely within the “people” leg of our triplebottom-line model. By definition, our community is more forward-thinking and thus most able to address this issue. And finally, by harnessing the innovation that diversity brings, we will best position ourselves to use business as a powerful force for good.
Gerry Valentine is founder of Vision Executive Coaching. He works with socially responsible leaders to build companies that can change the world - focusing on business strategy, innovation, and leadership. Gerry has 30 years of leadership experience, an MBA from NYU and a BS from Cornell University. Connect with Gerry at: www. linkedin.com/in/gerryvalentine, Twitter: @gerryval, or email: gerry@VisionExecutiveCoaching.com SUMMER 15
THE PRACTICE OF
he practice of mindfulness has been positively linked to better business. It has proven to enhance focus, foster better communication, lead to better decision-making, and relieve stress. Companies like Google, Target, and Twitter have included mindfulness training at their organizations, and luminaries like Richard Branson, Bill Clinton, and Eileen Fisher practice regular meditation. We had the unique opportunity to speak with the Venerable Lama Tenzin Dhonden, Tibetan Buddhist monk and Personal Emissary for Peace for the Dalai Lama, about his views on the role of mindfulness in business.
What advice would you give to someone who is not fulfilled or happy in his or her work? Ven. Lama Tenzin Dhonden: I would advise that they may want to look for the cause that makes them unhappy, although it may not be an easy thing to recognize. If it is for selfish reasons, then they need to find peace within. Sometimes we donâ€™t realize that the cause of our unhappiness can be our own perception of the circumstance we are in. When a person becomes aware of his or her own perception, then they can see if they are assessing their circumstance from a positive or negative perspective. And as they gain awareness, they can develop the skill to choose their perspective. We all want to be happy. So, naturally, if one can distinguish between positive and negative, a person would most likely choose a more positive perspective. This doesnâ€™t mean that bad things will stop happening. Suffering is part of the human experience. But our perspective and our own appreciation of the value of our human life is key to developing a positive attitude, which can be extremely helpful in coping with negative experiences. You can easily see how this applies to any example, whether it is a bad experience at a restaurant or a very serious illness.
Many of the problems we face today require big ideas and big solutions, but many people are held back by fear of acting on their big ideas. How can we overcome this fear? LTD: I would suggest first to identify your strengths. Once you identify your strengths, then go to work on small ideas that you are comfortable with, and take small steps. This will build up your self-confidence. As your confidence grows, then you will be ready to take on bigger ideas and manage bigger projects. Your sense of self-confidence can develop into action to execute on bigger and bigger ideas. A strong sense of confidence brings strength and readiness for big ideas and big actions. Confidence is not to be confused with lack of humility. While it can be a great challenge to exercise both simultaneously, a healthy sense of confidence coupled with humility can allow a person to learn and grow exponentially. In what ways do you see mindfulness benefiting people in the workplace and businesses in general? LTD: Generally, the practice of mindfulness brings awareness and presence to the workplace. Mindfulness can enhance communication, and with good communication one can develop a greater sense of trust in all interactions. The proper use of mindfulness brings clarity of mind. Mindfulness helps motivate a person and it helps the person to become more conscientious about their work and the people around them. From a broader perspective, mindfulness helps a person develop an awareness that everyone deserves to breathe pure air, live well, and think compassionately. But this can only be achieved if mindfulness is applied with ethics. Mindfulness applied with pure living ethics has the potential to bring enormous and lasting benefits. Specifically in the work environment, mindfulness can bring a sense of presence while we are at work. Mindfulness at work is being kind and collaborative in our interactions, keeping mutual goals in
“Mindfulness at work is being kind and collaborative in our interactions, keeping mutual goals in mind, and also keeping in mind that everyone deserves to be happy.” mind, and also keeping in mind that everyone deserves to be happy. Meditating on being kind and gentle in your mind until the mind becomes more still - still without any influence can be very helpful in developing everyday mindfulness. Also becoming kind and positive about yourself can have a positive effect on your attitude and outlook. Taking just a few minutes to remind yourself that every kind and gentle action you take is a meditation in itself can also benefit the way you approach your work. What do you see as the greatest challenge in the business world? How can we overcome it? LTD: Lack of spirituality and forgetting to apply ethics [are the biggest challenges]. With “lack of spirituality” I’m not referring to a lack of religion. When I say spirituality, I mean the focus on what is truly important to you as a human being. Compassion is in the essence of spirituality. The pursuit of superficial ends leads to unhappiness. If there is no spirituality in the pursuit of any goal, a person becomes unfulfilled, empty, and feels disappointed, even after reaching the top in their field. In other words, an individual can work very hard to achieve a goal, even an altruistic goal, and feel unfulfilled. But when a person works with a sense of compassion for self and others, then no matter how big or small the efforts, he or she will start to feel fulfilled and morally
obligated to do well, not just for the self but also for all of humanity. This moral obligation is the basis of ethics. What role do you see business having in promoting peace? LTD: I’m not a businessperson, but I don’t think that a business itself can promote peace if it is solely focused on making a profit. A wise business venture would focus not only on its own value but also on the value of others, recognizing that the value of others is equally important. This can be the foundation for a business that is managed with care and understanding. In my opinion, the process of applying this principle in itself is one way of promoting peace.
Ven. Lama Tenzin Dhonden is the founder of Friends of the Dalai Lama, which is presenting the Global Compassion Summit and official world celebration of the 14th Dalai Lama’s 80th birthday. For tickets and information go to www. HHDL80.org. Photo: TS MEDIA INC./ J. VAN EVERS SUMMER 15
GENERATIONAL REALIZONES BY JUSTICE CALO REIGN
uman beings are constant meaning-makers. We take our experiences, interactions, and lessons in life and form our own personal zone of reality around us that shapes our future lessons, interactions, and experiences with the world outside of our own mind. We refer to this zone of reality as a “Realizone” - a framework of our physical, mental, and emotional well-being that helps us process and create our own thoughts, beliefs, and ideals of ourselves, our community, and world. We have distinguished 12 Realizones that help decipher the personal coding at play in our lives; five of them can be seen as negative and seven can be seen as positive. In observing the interactions between each living generation, we have found that each generational group fits securely into one of the positive Realizones, and this framework can be used to further understand and clarify the collective role each generation plays in creating our shared future. In general, there are five living generations over the age of 18 in the United States: the GI Generation (1920 - 1926), the Silent or Builder Generation (1927 - 1945), the Baby Boomers (1946 - 1964), Generation X (1965 - 1979), and the Millennials (1980 - 2000). Each of them has had a different set of collective experiences that has influenced and coded their generational ideals of success and their relationship to money. While each generation feels separate from the others, we must remember that our collective experiences are the direct result of the actions of the generations that came before. In this, each generation is an expression of the trajectory of this country, and although we categorize each by the range of their birth years, we may be better served by looking at the attributes that arise in each generation as a gauge of the output of an entire interconnected cultural system.
THE 12 REALIZONES™ CODING YOUR REALITY FROM SUSTAINED DEFEAT TO SUSTAINED VICTORY
Realizone of Destruction
Realizone of Depression
Realizone of Injury
Realizone of Anger
Realizone of Apathy
I am Nothing
I am Helpless
I am Wounded
I am Not/Defiant
I am Disassociated
I am Able
I am Capable
I am Talented
I am Restartable
I am Leadership
I am Creation
You are Useless
You are Weak
You are Victimized
You are Violent
You are Separate
You are Imaginative
You are Effective
You are Significant
You are Unstoppable
WE ARE ONE
WE ARE Innovation
Σ = Positive Emotions Activates Champion Energy (PEACE)
GI GENERATION In the framework of the 12 Realizones, the GI Generation resides in the Conceiver Realizone. Raised in the era of the great World Wars and the Great Depression, the GIs were still able to imagine a prosperous and free future for America, and gave their youthful zeal to the New Deal and their fighting abilities to our country in WWII. The GIs, whom some refer to as the Greatest Generation, were said to have saved the world and built a nation; they were rewarded for their abilities and imagination with the legendary “happy days” of prosperity that followed WWII.
against the military-grade conformity of their parents, as was reflected in their sense of protest, as opposed to duty, in regard to the Vietnam War. This sense of significance was the impetus for the Civil Rights and Feminist Movements that took shape in their lifetime. Boomers may never fully retire, making a multigenerational workforce that hasn’t existed previously. GENERATION X
The Builder Generation moved into the Achiever Realizone, and is a generation that transitioned from constructing our views of prosperity to sustaining the prosperity we were experiencing post war. Also referred to as the Silent Generation due to their strong transgenerational common values and being raised during a time great conformity, the Builders took the broader view of our abilities as Americans professed by the GI Generation and transformed those into specialized and trained capabilities capabilities generally pledged by men to one corporation for life. This loyalty to company was returned with a lifetime of job security, and they became the richest, most free-spending retirees in history. The first hopeful actions of the Civil Rights and Feminism movements were established in this generation, as one’s ability to achieve according to his or her capabilities began to be internalized by the American population.
Generation X is the final generation attempting to sustain the prosperity view of America constructed by previous generations, though they feel that many of the institutions that supported and benefited the generations before (family, churches, business, and government) have failed them. Gen X resides in the Overcomer Realizone, and they do feel they must overcome. Many of them were “latch-key kids” who raised themselves with two working parents, have had to restart their careers after two economic recessions already in their lifetimes, and are the first generation not doing better economically than previous ones. Gen X feels misunderstood and overlooked in the workplace, which continues to be run by their parents who won’t leave, and which is increasingly dominated by their entering children, who seem to monopolize the attention of marketers and brands. Their independence and mistrust of institutions has created an unstoppable entrepreneurial spirit within them, and they have passed this forward to their children. They are also well aware that the means to prosperity as constructed by their grandparents is not working, and a new system must be created.
The Baby Boomers continued to sustain the beliefs constructed by the GIs and sustained by the Builders, and find themselves securely within the Winner Realizone. As a nation, we continued to achieve great prosperity, and our power and presence in the world continued to expand. Boomers see themselves as talented, are career-driven (both men and women), and their numbers continue to make them a significant factors in the world. This sense of self-importance may have caused Boomers to rebel
Finally, the Millennial Generation realizes that the view of the world sustained over the last several generations is broken, and the only way to fix it is to come together as one and generate a new way of interacting with the world. Inside of the Unifier Realizone, Millennials are more multicultural, progressive, and tolerant. They are collaborative by nature, feel like a generation, and have high expectations that they can reshape our future. Their unhindered access to information makes them forceful with their opinions, and
they do not see their youth as a detriment to their ability to lead. Millennials possess the political and economic power that comes with their numbers, global connectedness, and social motivation to examine long-standing institutions and reshape them to what is meaningful to them. In the workplace, they value flexibility, purpose, and co-creation over monetary compensation, and they will leave or never join companies that do not align with their views of environmental stewardship and social justice. This is a sharp departure from generations before but is a result of the systems put in place by all of the previous generations. Each generation has set the stage for the Millennial Generation, and instead of looking at each generation as a separate entity, we can view our cultural generational output as an indicator of our shared cultural identity, and therefore, we can pool together the powerful and positive traits of each generation to create the future that works for all of us. We can be as imaginative as the GI Generation and as effective in building new systems and infrastructure as the Builder Generation. We can understand the significance we have as individuals in creating conscious and sustainable successes like the Boomers, and we can be unstoppable in our pursuit of a world that works, just as we have seen Gen Xers overcome the challenges they faced. Finally, we can each become one community in the way the Millennials see themselves unified as one, and in doing so, we can be a national and global community of innovators that transform the world and make it work for all people and the planet. Justice Calo Reign (BS, Behavioral Science - Leadership and Counseling, USAFA) has coached, trained, and instructed elite collegiate studentathletes at the Air Force Academy and University of Louisville. He is certified in NeuroPositive Coaching through the Applied Neuroscience Institute and continues to coach entrepreneurs, executives, world-class athletes, and entertainers to reach their highest potential. He is currently building a startup focusing on creating a generative entertainment industry. His blogs and podcasts can be found at www.sustyentertainment.com. SUMMER 15
THE FOURTH WAVE OF CAPITALISM BY BRANDON PEELE
Ten years ago, I was at a crossroads. I had developed a lucrative skill set in finance, strategy, and business development, earned an Ivy League MBA, and was poised to become a world-beating executive. However, I had also begun an exploration into the nature of reality via the lenses of physics, psychology, ecology, and our wisdom traditions. I wanted to understand how best practices for human life intersected with economics and how my life could include both.
I was most struck by the conclusions of unity arrived at in each field. Physics quantumly entangled us; ecology and the atmospheric sciences made us interdependent; Big History gave us a shared genesis story that Wikipedia continues to record; Ken Wilber’s integral philosophy unites matter, ideas, individuals, and collectives; neuroscience gave us a social brain and empathy neurons; and economics wrapped our planet in a tight web of trade and currency policy. We no longer had to take mystics like Rumi and Whitman at their word. Unity is now a scientific fact and it appears that our species is on the verge of full realization of this oneness, with one major holdout - business. I found that our economy rewarded outcomes (long hours, low wages, ecocide, ROI) antithetical to the now evident unified reality and best practices for human life (civil rights, access to organic food, clean air and water, healthcare and liberal arts education, leisure time for community, art, civic engagement, and finding purpose). I found that business was fighting a many-sided war versus the state (Tea Party), versus labor/children (historic levels of inequality; 51 percent of children now qualify for school lunches), versus the ecology/unborn (50 percent of wildlife lost in the last 40 years), versus women (earning $0.80 for every dollar a man earns), versus African Americans (earning $0.59 for every dollar a white person earns), and versus science itself (climate change denial). When confronted with this reality, I suddenly felt shame for being a businessperson. Was I on the wrong side of history? However, it would be history itself that would make this business-versus-reality war make sense, too. I needed to include the vector of time to appreciate how capitalism is actually improving, inching ever closer to reconciling itself with our unified reality. Over the last 400 years, humanity has been transformed by three waves of capitalism. Currently we are experiencing the fourth wave: purpose. Each wave incorporates more unity, accounting for more types of capital and more of our best practices for living. The first three waves were free enterprise (liberating financial capital), labor (accounting for human capital), and ecology (accounting for ecological capital). The purpose wave (accounting for authenticity) includes the previous waves, and ushers in a new, more personal economic model.
THE FIRST WAVE: FREE ENTERPRISE In the first wave, Adam Smith advocated for free market capitalism as a vehicle for freedom and greater fulfillment, and for transforming humanity into a web of capitalist democracies. Other gifts of the first wave are the tech/startup/failure-positive culture and the belief that free enterprise can and should disrupt antiquated power structures. THE SECOND AND THIRD WAVES: LABOR & ECOLOGY The next two waves addressed capitalism’s major faults, specifically its antagonistic relationship to the working class (the labor/socialist movements of 1830 to 1930) and nature (the Green movement, 1910 to present). The lasting gifts of the second wave are collective bargaining, worker-owned cooperatives, OSHA, the 5-day/40-hour work week, child labor laws, and anti-discrimination laws. The lasting gifts of the third wave are conservation, renewable energy, sustainability, climate change diplomacy, ecological accounting, green businesses , and government agencies that regulate pollution. THE IMPERFECT STORM These three waves are still crashing, still transforming our shores successively and always in this order - first, democracy/entrepreneurship (e.g., in China), then labor (e.g., in Bolivia), then nature (e.g., in Brazil). Each country yearns for and yet resists each wave, sometimes finding itself battered about in the storm of these cross-currents. America, for example, is still enmeshed in second-wave struggles as it underpays women and minorities, as the middle class evaporates, and as unemployment and wage slavery persist. America is also engaged in third wave struggles at home and abroad over climate change, fracking, depleted soil and water tables, oil wars, deforestation, ocean acidification, pollution, and mass extinctions - realities that threaten the foundation upon which capitalism and all of humanity depend. And yet we feel another wave crashing on our shores.
THE FOURTH WAVE: PURPOSE-DRIVEN ENTERPRISES The Fourth Wave of Capitalism corrects for the third flaw in capitalism - the failure to account for authenticity and purpose and for humanity’s creative and psychological capital. The fourth wave is the transacting of business on the basis of authenticity, the creation of sustainable, equitable, and profitable Purpose-Driven Enterprises (PDEs), thus honoring the complexities of the first three waves while making business personally meaningful.
DEFINITION OF A PURPOSE-DRIVEN ENTERPRISE:
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HOW TO SURF THE WAVE
A business that is the bridge between one’s soul and the world, rendering the words “work” and “retirement” meaningless. A holistic, generative, and soul-centric enterprise in relationship to all of humanity, the unborn, and biodiversity.
A business that if not created, would make the life of the entrepreneur not worth living.
A PDE begins with the purpose of the founders, who treat their business as spiritual practice and, in so doing, treat their customers, employees, nature, and partners as gods. Increasingly, people are choosing to do business on the basis of purpose and authenticity, of soul resonance, and of a shared vision of a better world. Global communications firm Edelman, creator of the goodpurpose project, declares that “purpose is the new paradigm.” The purpose economy is not comprised of old businesses slapping on partnerships with nonprofits (e.g., Susan G. Komen pink-washing natural gas fracking), but businesses that share a common genesis story - the sacred purpose of the founders. Patagonia is one of the first American PDEs (the first global PDE being Mondragon in Spain, founded in 1956). Patagonia is the soulful expression of its founder, Yvon Chouinard, to create great gear for its customers while marching forward to increase human dignity (see his book, 110 |
“Let My People Go Surfing”) and the rights of animals and plants (traceable goose down). Numerous other PDEs include Clif Bar and New Belgium Brewing, as well as the up-swell in small-scale PDEs and worker-owned cooperatives crafting local, sustainable goods and services. Yet this wave is only beginning, as Gallup’s 2011 survey of American workers confirms that 71 percent of Americans are not fulfilled at work, i.e., their work is devoid of purpose and meaning. In the long run, a PDE is the only enjoyable way of doing business and having a long-term competitive advantage, what marketers have historically called the “brand of you,” allowing each of us to give away our greatest gifts and to be fully self-expressed, engaged, and creative at work.
To surf this purpose wave as consumers, investors, and employees, we should choose companies that are driven by purpose. As entrepreneurs, we should: 1.) Embark upon purpose discovery work by reading and getting coached through the exercises in “True Purpose” by Tim Kelley, an MIT-educated former Silicon Valley executive and naval intelligence officer. If you prefer a more Christian approach, please check out Rick Warren’s “Purpose-Driven Life,” or for a more Eastern approach, Rod Stryker’s “Four Desires.” 2.) Develop a broad contextual understanding of psychology and ecology and economics so that your PDE includes, unifies, and amplifies all waves of capitalism. 3.) Build a community of purpose-driven, high-integrity peers whose goal is to support you in living truthfully, fully, and on purpose, and cultivate networks of other purposedriven entrepreneurs via Bioneers and Net Impact. If you choose this path of purpose, you not only open yourself to greater levels of personal fulfillment and success, but become a leader in the evolution of our species, reconciling business with the unity embedded in our sciences and religions and finding yourself on the right side of history. Your career will become an authentic, cogent, and inspiring answer to the question your grandchildren are sure to ask: “How did you live truthfully and create a more equitable, sustainable, and peaceful human presence?” Brandon Peele is the Founder of The EVR1 Institute (http://EVR1.co), where he helps people, groups and corporations find, live, and profit from their purpose. The EVR1 Institute recently launched a global purpose activation project, PlanetPurpose.org, to deliver free education and tools to answer the question,”What is my life’s purpose?” To celebrate August, Global Purpose Month, please explore The 21-Day Purpose Challenge, a global purpose discovery program and online community committed to finding, living and profiting from their life’s purpose. www.planetpurpose.org
FOOD & AGRICULTURE
BY VANESSA CROSSGROVE FRY
How Cottage Food Laws Empower Entrepreneurs While Supporting Local, Sustainable Economies
n the last decade a proliferation of farmers’ markets and community-supported agriculture programs have spread to both rural and urban America. Across the United States, food producers and processors have taken advantage of the market opportunity presented by consumers’ demand for local and regional foods. As a result, local food has become a multibillion-dollar industry, and according to the USDA, it’s growing. Local food isn’t as much about geography as it is about relationships. By shortening the supply chain and distributing their products more directly to consumers, food producers and processors are making food less anonymous while building both financial and social capital in their communities. One group in particular can be singled out for its efforts in this space: the cottage food sector. Cottage industries are typically thought of as businesses carried out in homes. They are small in scale, have very few employees, and require little start-up capital. The cottage
food industry is no different. Chefs, bakers, and farmers’ market vendors prepare foods in their homes and in farm kitchens to sell directly to consumers. However, some policy barriers have stymied the industry’s expansion. Today’s agrifood sector is in many ways a one-size-fits-all world, and so are its policies. Traditionally, state laws have required all food producers to process foods in licensed commercial kitchens, regardless of the type of food or size of business. The primary purpose of such regulation is to decrease the public’s risk of foodborne illness. This is fine for the typical high-revenue, established business, but it can create a substantial obstacle for small processors just getting started. Licensed commercial kitchens can be prohibitively expensive to construct. Although renting time in a kitchen is an option for some producers, it can also be limiting due to cost or lack of availability. This creates a high barrier to entry for food entrepreneurs trying to enter into the marketplace. As a response, cottage food bills have been introduced across the country.
FOOD & AGRICULTURE
States with Cottage Food Legislation WA MT OR
ID WY NV
IA IL MO
Cottage food laws allow small-scale producers to use non-licensed kitchens to process and sell certain food products. Allowing for processing in-home can take advantage of resources already in place and allow food entrepreneurs to test out techniques and products before making a large financial commitment. To date, versions of cottage food legislation have diffused into over 40 states. In many of the remaining states, efforts are underway to enact similar legislation. “Pickle Bills,” as they are sometimes known, can help jump-start businesses while also strengthening local economies and communities. Processing food creates a value-added product that enables producers to earn higher margins than those available through the sale of raw agricultural products. This can keep more money in a community, strengthen local food systems, and create additional opportunities for consumers to connect with local food producers. Although the laws vary across the US, they generally allow for the sale of non-potentially hazardous, processed foods at producer-to-consumer venues such as farmers’ markets. These foods are baked, canned, pickled, dried, or candied and include products such as honey, jams and jellies, baked goods, spices, and teas. Passing a cottage food law is not always a smooth process. Opponents to the laws often argue that lack of regulation can lead to an increase in foodborne illnesses. Established businesses protest that the laws unfairly subsidize a new industry. However, time and again the cottage food industry has proven its ability to pass legislation. This is often due to the industry’s ability to work across sectors and build the case for economic development. As other food system initiatives break the mold of modern-day agribusiness, integration of similar strategies can help these efforts to revitalize local economies and provide improved access to healthy food options.
NH MA RI CT NJ DE MD
SC MS AL
LESSONS FROM THE COTTAGE INDUSTRY FOR OTHER LOCAL FOOD INITIATIVES USE A MULTI-SECTOR APPROACH
Food system innovations in the form of policies, distribution strategies, and farmland preservation have been enacted in response to consumers’ demand for local and regional food products. Successful efforts have many attributes, but those with a multi-sector approach often thrive. Coalitions to pass cottage food legislation have included producers, processors, elected officials, consumers, health department officials, food banks, state departments of agriculture, and many others.
THE CASE FOR ECONOMIC DEVELOPMENT
Cottage food laws are all about scale. They are intended to support small startups by lowering the barriers to entry for food entrepreneurs. This is, in essence, a tool for economic development. Many entering into the cottage food industry do so with the intention to remain small, simply earning additional income on top of their primary employment. However, a business may also be able to scale up. Real Pickles, a worker-owned cooperative in Greenfield, MA, began with its founder home-pickling local foods for off-season consumption. Now the company pickles over 100,000 pounds of local, organic vegetables and distributes them throughout the Northeast. Vanessa Crossgrove Fry serves as adjunct faculty at Presidio Graduate School and as Project Coordinator with the Public Policy Research Center at Boise State University, where she is pursuing a PhD. Her passion for sustainability and justice focus her research on food systems and local economies. SUMMER 2015
Photo: Kristen Newsom, Wildly Simple
FOOD & AGRICULTURE
PROFILE: TABER WARD Mountain Flower Dairy Farm Boulder, CO
THE GOODS · Uses organic grain to feed goats. · Uses rotational grazing methods to fertilize the land, decrease offfarm inputs, and create healthy soil. · Does not treat animals with antibiotics or growth hormones. · Pays staff a living wage. · Collaborates with local businesses and nonprofits to build partnerships and increase resilience in the local food system. · Offers free visiting hours to engage the public in sustainable agriculture and provide handson educational opportunities for urban residents.
WHAT INSPIRED YOU TO START A FARM? Taber Ward: Our food system is more than broken - it produces pain, agony, pollution, and injustice for millions of people, animals, and ecosystems. The goal of Mountain Flower is to create an alternative to factory and industrial farming by connecting people to the means of production and by treating the land and our goats gently and with respect. We want to provide dairy products that people can trust. Providing a transparent and accessible farm in the middle of the city helps connect people back to the land, back to animals, and back to their food. It is our goal to practice humane animal husbandry and educate the community about what it means, what it costs, and what it looks like to raise animals with respect. Every dollar spent on food is a vote for how we want our food system to look and how we want to treat our animals, the land, and our planet.
FOOD & AGRICULTURE
“Every dollar spent on food is a vote for how we want our food system to look and how we want to treat our animals, the land, and our planet.”
WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? TW: There is no other way to do this. We may not be legally liable for abusing the land or animals when we farm, but we are morally liable. At the end of the day, we go home knowing that we did our best to create a positive product and happy environment for the creatures that we steward.
WHAT ADVICE DO YOU HAVE FOR OTHER PEOPLE WHO ARE THINKING OF BECOMING FARMERS OR STARTING THEIR OWN FARM? TW: Collaborate! Farming was never meant to be a one-(wo)man-show. Reach out to folks who have similar values and work ethics. Reach out to folks who offer different skillsets from your own. Be ready to work all the time. There are no days off in farming. Dig in. Don’t give up. Believe in your vision even when it’s falling apart, it will come back together.
DO YOU HAVE ANY PREDICTIONS FOR THE FUTURE OF THE FARMING INDUSTRY? TW: I am hopeful for the future of local food and community food security - the movement has started already and we are taking bold steps as farmers, consumers, restaurants, grocers, and policymakers to strengthen and support this sector of food production. Given the drought in California, I predict that the cry for local food and diversification will become stronger and more robust; not because it is trendy or because of the “foodie” movement but because our breadbasket state is turning into a desert. This is not a “California problem” - this is a problem that will impact dinner plates and pocketbooks around the nation. California produces a sizable majority of American fruits, vegetables, and nuts: [almost all of our] artichokes, walnuts, kiwis, plums, celery, garlic, cauliflower, spinach, carrots, and the list goes Photos: Kirsten Boyer on.
Photos: Kirsten Boyer
WHAT INSPIRED YOU TO START A FARM? Andrea Davis-Cetina: While at Hampshire College, I studied sustainable agriculture. I took courses in ecology, anthropology, rural studies, and a bit of art. During the school year, I worked on the college farm, and during summer vacations, I worked as an intern on farms in Maine, upstate New York, and North Carolina. My college dissertation was a nutritional analysis of a local and seasonal diet in the Pioneer Valley. To make this information accessible to the surrounding community, I published a cookbook, “Local Delectables: Seasonal Recipes for the Pioneer Valley.” After graduating from college, I moved to California in 2005 and quickly got my hands dirty by creating and maintaining edible gardens for restaurants and private clients. In 2008, I took the leap to start Quarter Acre Farm on a quarter acre of land. Following my passion and enthusiasm toward natural and sustainable methods, I decided to have the farm certified organic through CCOF in 2010. Quarter Acre Farm has grown a little over the years and is currently three-quarters of an acre.
PROFILE: ANDREA DAVIS-CETINA Quarter Acre Farm Sonoma, CA
THE GOODS · Certified organic. · Uses sustainable growing methods: no pesticides, herbicides, or petroleum-based products are ever used on the land. · Member of California Certified Organic Farmers. · Currently selling everything within two miles of the farm. · One-woman operation. · Small carbon footprint.
WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? ADC: I look to use regenerative practices on the farm to improve the land and ecosystem instead of just sustaining the land as I found it. It has to do with how I see my place and effect on the world. As a young Girl Scout, I was told you always leave a place better than you found it - take pictures, leave footprints. I want to leave the world a better place for future generations.
WHAT ADVICE DO YOU HAVE FOR OTHER PEOPLE WHO ARE THINKING OF BECOMING FARMERS OR STARTING THEIR OWN FARM? ADC: Do your research, take classes if you can, and read as many books and articles as you can get your hands on. Most importantly, work on
established farms for the length of a season so you can see how the farm work changes throughout the year. Working on another person’s farm allows you to learn directly from an experienced grower and learn from their mistakes.
DO YOU HAVE ANY PREDICTIONS FOR THE FUTURE OF THE FARMING INDUSTRY? ADC: I’m no fortune teller, but I believe the future of farming depends on young, innovative farmers who face problems by trying inventive solutions. Photos: Kristen Newsom, Wildly Simple
“I was told you always leave a place better than you found it - take pictures, leave footprints. I want to leave the world a better place for future generations.”
FOOD & AGRICULTURE
AT A GLANCE
Recombinant Bovine Growth Hormone (rBGH), which is used to increase milk production in cows, has been linked to significant health problems for cows and cancer in humans. It has been banned in Canada, Japan, Australia, and 27 countries in the European Union, but is still allowed to be used in conventional milk products in the US and is not required to be labeled. Certified Organic products are prohibited from using cows treated with rBGH.
Dairy cows produce large quantities of methane, a greenhouse gas that has 25 times the global-warming impact of carbon dioxide.
The Takeaway Taking a closer look at the conventional cheese industry may be disheartening, but it might also be unrealistic for some to think about giving up cheese all together. So what can conscious cheese lovers do? As with many products, consider purchasing cheese from local cheese producers who use sustainable, organic, and humane methods. Certified Organic cheeses are made in more sustainable ways, including more humane conditions for the animals and reduced harmful effects on the environment.
Ounce-forounce, out of all protein sources only beef and lamb are responsible for more greenhouse gas emissions than cheese.
RESOURCE USE Ounce-for-ounce, out of all protein sources only beef and lamb are responsible for more resource use, including water and energy use, than cheese.
Over 11 billion pounds of cheese are produced in the United States annually.
The average American eats over 33 pounds of cheese every year.
Photos: (1) Kite Hill (2) Redwood Hill Farm & Creamery(3) Cowgirl Creamery
FOOD & AGRICULTURE
AS SOMEONE WORKING IN THE CHEESE INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY?
Sue Conley, Co-founder Point Reyes, CA Founded: 1997
Sue Conley: Ecological practices are a baseline for our company. From the beginning, we have been committed to working with certified organic milk. This ensures that the animals are treated humanely, the land is cared for, and non-toxic cleaners are used in processing.
Products: A variety of artisan cheeses.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY?
THE GOODS · All cheeses are made with local, certified organic milk from three privately owned dairies. · The Point Reyes creamery is powered by solar energy. · Employees are well paid and receive excellent benefits.
Co-founders Peggy Smith (left) and Sue Conley (right)
SC: We live in an area whose farmers have led the way in establishing sustainable agriculture practices. We also have a vibrant market for goods produced in an ecological way. Northern California is known to have the largest, most enthusiastic natural foods market in the world. The counties where we make cheese, Sonoma and Marin, have governments that support our efforts in many ways. Marin is the first county in the country to fund a third-party certification program for organic farmers. This support has helped many struggling farmers increase revenues by going organic. Cowgirl Creamery would probably sell just as much cheese if we were not organic, but for us organic is a baseline, a way to measure how we are doing and guide us to practices that are better for the environment. Everyone on our hardworking staff is dedicated to these practices and it makes our jobs more satisfying. Photos: Cowgirl Creamery
FOOD & AGRICULTURE
KITE HILL Matthew Sade, CEO Hayward, CA Founded: 2012 Products: Nut milk products including three artisan nut milk cheeses, two cultured nut milk cream cheeses, and a nut milk ricotta. THE GOODS · Working to replace dairy with plant-based foods. · Sources the vast majority of raw materials from within California.
AS SOMEONE WORKING IN THE CHEESE INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? Matthew Sade: Animal farming is the number one environmental offender globally; 30 percent of the earth’s land surface is in active use for animal farming - the area of North and South America combined. The animal farming industry emits more greenhouse gases than any other industry bar none, exceeding all means of transportation combined. What better reason is there?
CAN YOU TELL US MORE ABOUT YOUR DECISION TO MAKE CHEESE OUT OF NUTS? MS: Nuts have the right composition to allow our milk to form a curd, the basic biochemical reaction necessary to make cheese. Nuts are also nutrient dense, taste great, and can be sourced locally here in California.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? MS: Sustainability is not a way in which we do business; sustainability is the reason why we are in business. As we scale this company and our products are used by an evergrowing number of people, Kite Hill will be lessening our society’s dependence on animal agriculture. Photos: Kite Hill
Conscious Company Magazine recommends the Original Cream Cheese Style Spread
FOOD & AGRICULTURE
PIEMONTE FARM Sandra Sarlinga, Co-founder Greensboro, NC Founded: 2013 Products: Aged artisan cheeses made with raw cow’s milk, including Don Agustin (Manchego-style cheese), Don Gabino (an Alpine Italian cheese), Italiano (another mountainstyle Italian cheese), Old Glencoe (old-fashioned American homestead cheese), mozzarella, ricotta, and mascarpone. THE GOODS • Farm is family-owned. • Employs earth-friendly practices in the farm fields and gardens. • All products are made on-site, from the milk and cheese to the packaging.
WHAT SUSTAINABLE PRACTICES ARE MOST IMPORTANT TO YOU? Sandra Sarlinga: We keep our operations small and in the family to be sustainable. We pay as we go and we have been given small, affordable loans through Slow Money and Community Sourced Capital. These small loans have a very low interest rate and are mostly supported by friends and the community we are in.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? SS: We benefit from making a more quality product and we benefit from the personal relationships that we have. For example, the cow’s milk we use for our cheeses comes from a dairy farm and a creamery that we have very deep relationships with. This third-generation family farm, Gerringer Dairy, and Calico Farmstead Cheese, are both located in Gibsonville, NC, just a few miles down the road from our farm. The collaboration with this family farm has been the foundation of our small cheese-making business. We buy their milk and use their creamery whenever they are not making cheese. They have mentored us through the process and have been a source of encouragement and inspiration. By keeping the business at a small family scale, we can stay in business for a long time and later leave it in our kids’ hands. Photo: Erin Raycroft, Morning Song Photography
FOOD & AGRICULTURE
CABOT CREAMERY Jed Davis, Director of Sustainability Cabot, VT Founded: 1919 Products: Traditional, specialty, reduced-fat, and flavored cheddar cheese as well as butter, cultured dairy products, and Greek-style yogurt.
THE GOODS · First cheese-maker and dairy cooperative to achieve B Corp certification. · Organized as a cooperative for the benefit of its family dairy farm owners. · Program based on managing impacts across the triple bottom line (social, economic, and environmental). · Manages impacts on natural capital, social capital, human capital, and built or constructed - capital.
AS SOMEONE WORKING IN THE CHEESE INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY?
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY?
Jed Davis: A sense of stewardship and sustainability are traits across our organization that are inspired by our dairy farmers. The majority of our farms are multi-generational farms - often across several generations - and they know firsthand the care and attention that is necessary to nurture the soil and their animals for the benefit of generations to come.
JD: In a fundamental way, managing our business across the triple bottom line of social, economic, and environmental impacts is just how we feel businesses should be run. In the process of aspiring to conduct business this way, we’ve seen direct results in a number of ways: reduced costs through attention to reducing impacts like energy, waste, and water; better conversations with our key stakeholders, whether customers or consumers or farmers or the general public; higher interest when hiring new employees; and heightened innovation from grappling to identify solutions to our most pressing sustainability challenges. Photo: Cabot Creamery
FOOD & AGRICULTURE
REDWOOD HILL FARM & CREAMERY Redwood Hill Farm & Creamery Jennifer Bice, President & CEO Sebastopol, CA Founded: 1968 Products: Redwood Hill Farm: Goat’s milk yogurt, kefir (a drinkable yogurt), and artisan goat’s milk cheeses, including a number of French-style rindripened cheeses and hard cheeses, plus raw milk feta and cheddar. Green Valley Organics (a sister line): Organic, lactose-free cow’s milk dairy products including yogurt, kefir, sour cream, and cream cheese.
AS SOMEONE WORKING IN THE CHEESE INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? Jennifer Bice: Being sustainable is about taking personal responsibility for our animals and the environment. We base our personal actions on values, and running a business in that manner is just a natural extension. For cheese-making, this means that we upcycle the whey by giving it to local pig farmers, which helps them in turn reduce their feed costs and also provides high nutrition for their pigs. We have to acknowledge the true cost of food - this is how we make choices in running a sustainable company, just like our consumers make choices with their food dollars.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? JB: I feel a personal sense of happiness by aligning my values with the way I run my business. But it goes beyond that. We are also able to educate consumers about their food, help them care about or connect more deeply with the animals that make the delicious milk for our yogurts and cheeses, and talk honestly about the challenges of agriculture. Also, sustainable practices often just make good business sense and actually save money, such as the use of renewable energy and reducing energy costs through insulation. Photos: Redwood Hill Farm and Creamery
Conscious Company Magazine recommends the Aged Goat Cheddar
THE GOODS • First goat dairy in the United States to become Certified Humane® by Humane Farm Animal Care in 2005. • Uses an extensive water conservation and water reclamation program. • Uses recycling programs, insulation, ecosanitizers, and sensor lighting. • Repurposes scraps from production and whey for animal feed. • All employees start at a living wage and receive a generous benefits package, including full family health benefits. • The facility where cheese and dairy products are produced is powered by two acres of solar panels, which cover 85 percent of energy needs. The goat dairy farm is 100 percent solar-powered. SUMMER 2015
FOOD & AGRICULTURE
HOW IS TAKING ON THE FOOD INDUSTRY
long-time and well-known proponent of responsible business practices in the outdoor equipment and apparel industry, Patagonia is now applying its brand and expertise to promote positive changes in the food industry. Believing that â€œwhat we eat does more than just fill our stomachs and nourish our bodies; good food lifts our spirits and helps us understand the world a little better,â€? the company has created a new line of food products called Patagonia Provisions, starting with salmon and tsampa (a staple of Himalayan Sherpas).
Tell us why Patagonia decided to focus on food with Patagonia Provisions. With Patagonia Provisions, our goals are the same as with everything we do: we aim to make the best products, cause no unnecessary harm, and, perhaps most importantly, inspire solutions to the environmental crisis. Nowhere is the crisis more pressing than in the food industry. Today, modern technology, chemistry, and transportation combine to put more distance between people and their food than ever before. Salmon is indiscriminately harvested or farmed in open-water feedlots, putting wild salmon in peril. Our prairies are overgrazed, our livestock are filled with antibiotics, and our fossil aquifers are drained to water unsustainable crops. Chemicals reign supreme to maximize production, and the unknown impact of genetically modified organisms hovers over the entire industry. In short, our food chain is broken. What is the story behind the inception of this new product line?
Patagonia Provisions is about finding solutions to repair the food chain. We have started, as we always do, by learning everything we can about the sourcing of each product. In some cases, weâ€™ll adopt the best practices already in existence; in others, weâ€™ll have to find new ways of doing things, which, as we might have guessed, frequently ends up being the old ways. Patagonia places an emphasis on sourcing organic materials and ingredients. How much of the Patagonia Provisions line is organic and what is the rationale behind this decision? All of our products are 100 percent organic. Organic meat and produce are better for you. Research consistently shows that organic fruits and vegetables have higher levels of antioxidants than the same produce grown conventionally. For example, a recent study in the scientific journal PLOS ONE showed that organic tomatoes have 50 percent more Vitamin C than conventional tomatoes. The findings in dairy products are just as striking - organic milk contains more beneficial Omega-3 fatty acids and a healthier ratio of Omega-6 fatty acids than the conventional version. And
FOOD & AGRICULTURE
perhaps even more importantly, research published in the journals Food Control and Meat Science found that conventional meat contains more antibiotic-resistant bacteria than organic meat. Science proves what we already intuitively knew, which is that how we grow our food directly affects how good it is for us. Organic meat and produce taste better, too. The lower levels of nitrogen and higher amounts of antioxidants found in organic fruits and vegetables create more intense flavors. The same factors contribute to longer shelf life, giving organic produce better flavor when it reaches your table. Free-range livestock carries a distinct flavor unique to the land where it was raised. It’s really no surprise that conventionally grown food, designed to maximize yield, often does so at the expense of flavor. The most compelling reason of all, though, goes back to that simple lesson we learned as kids: you are what you eat. And, given the choice, we’d rather be organic whole grains, filled with flavor, fiber, and complex carbohydrates; organic kale, rich in antioxidants and
resource extraction, dam building, and agriculture. More recently, hatchery production, suburban sprawl, toxic runoff from cars, and even lawn chemicals have contributed to the burden on our remaining salmon populations. Modern industrial salmon harvesting creates its own set of problems. On the high seas, salmon from hundreds of watersheds mix and mingle along their migration routes. Commercial fisheries in the open ocean lack the ability to know where the fish they catch originated. While sustainable populations may be targeted, the actual harvest can - and often does - include fish from endangered stocks. Gillnet fisheries in large rivers kill a majority of the fish they encounter because they are unable to discriminate between robust populations and those struggling to survive. For example, in rivers where abundant sockeye and pink salmon are targeted for harvest, unacceptable numbers of imperiled coho, Chinook, and steelhead often perish as by-catch.
“WE ARE, AFTER ALL, WHAT WE EAT. NOTHING MORE AND NOTHING LESS.” vitamins; local apricots bursting with natural sweetness. We’d like to be wild sockeye salmon; free-roaming grassfed buffalo; long-rooted perennial wheat. This is what we want for ourselves and for our children. We are, after all, what we eat. Nothing more and nothing less. What has been the biggest challenge for the program so far and how are you working to overcome it? The most challenging aspect has been staying ahead of the sometimes relentless momentum that occurred after we launched Patagonia Provisions. We have so many great ideas and goals for what we want to do, and it’s sometimes hard to keep up! It’s been very exciting and we have had the opportunity to meet and work with some of the most amazing people who are passionate about the need for change in the food industry. Why did you make the decision to start with salmon and tsampa and what products do you hope to branch out to next? SALMON The immense runs of wild salmon that once filled nearly every watershed from Alaska to Southern California are nearly gone, decimated by 150 years’ worth of industry,
On our coastlines, open-water net-pen salmon farms pollute the water with chemicals, waste, and parasites, exacting a terrible toll on wild fish migrating nearby. Fish produced in these feedlots require dye-enhanced food to color their gray flesh and frequently contain antibiotics, concentrated PCBs [polychlorinated biphenyls], and other chemicals. Thankfully, there are bright spots in the salmon world. Thriving runs of wild salmon still exist in certain watersheds, and a return to selective fishing techniques allows for responsible harvesting of abundant target species. Strange as it may sound, we believe harvesting and eating wild salmon in the right numbers and from the right places can actually help save them. We source our salmon only from these select fisheries. We’re also working to use more of each fish we harvest. For example, we’re working on a salmon jerky recipe made from the delicious (but difficult-to-remove) flesh found along the fish’s backbone. We’re also researching ways to create healthy pet treats out of salmon scraps that are normally discarded during processing. On a larger scale, our entry into the fish business allows us to support and publicize conservation projects that directly impact wild salmon. We’re currently part of efforts to stop the Pebble Mine in Bristol Bay and the Enbridge Pipeline in British Columbia. We provided
FOOD & AGRICULTURE
support for the Elwha Dam removal and continue to push for further dam busting on the Snake, Klamath, and other rivers. We also support dozens of organizations working to save habitats, shut down hatcheries, and change commercial fisheries. Our first step in the food business started with salmon, where we hope to find solutions to the crisis that’s occurring across the Pacific coast. After careful, hands-on vetting, we’re using salmon harvested only from abundant, sustainable fisheries. Then, working with some of our favorite chefs, we’ve developed the kinds of delicious, wholesome - and responsible - foods we like to eat on the trail and share with friends at home. TSAMPA More than 35 years ago, in the mountains of Nepal, [Patagonia founder] Yvon Chouinard’s Sherpa friends introduced him to tsampa. Chouinard soon discovered what the people of the Himalayas have known for centuries: this simple roasted-grain staple provides ideal fuel for highaltitude performance. In the years since, we’ve adjusted the recipe by westernizing the flavors a bit to create a delicious, convenient soup mix that retains the amazing properties of the original tsampa. Made with organic, roasted whole grains and vegetables, Tsampa Soup is good, simple food we enjoy everywhere from high-altitude base camps to sea level dinners at home. What is your grand vision for the future of the program? In the coming months and years, we’ll offer a growing selection of foods that address environmental issues and continue to encourage support of local food producers. We’ll keep working with our favorite chefs to create the kind of healthy, nutritious food we like to eat on the trail or water and share with friends at home. If we do our job, our success can help establish a model for a new kind of food chain, one where we, as the Zen master might say, “turn around and take a step forward.” Photos: Patagonia
FOOD & AGRICULTURE
LOCAL, SUSTAINABLE FOOD PRODUCERS
In each issue of Conscious Company Magazine, we will highlight local, sustainable food producers in different geographic locations.
This issue, weâ€™re shining the spotlight on North Carolina. SUMMER 2015
FOOD & AGRICULTURE
BIG SPOON ROASTERS Mark Overbay, Founder and President Durham, NC Founded: 2011 Products: Fresh-roasted, handcrafted nut butters and nut butter bars. THE GOODS • All products are made by hand. • Focus is on a workplace culture that values open communication and relationships with vendors and customers. • Made-to-order products are freshly made within 48 hours of shipping or local delivery. • Works with Eastern Carolina Organics to develop a farm-to-spoon organic peanut supply chain. • Ingredients are locally and organically sourced when possible. • No plastic! Products are packaged in Americanmade glass Mason jars with recycled steel lids and recycled paper labels using non-toxic ink. • Products never use stabilizers, hydrogenated oils, or palm oil. • Working toward zero waste. • Employees are paid a livable wage with benefits such as wellness reimbursements, health insurance stipends, and CSA membership support. Conscious Company Magazine recommends the Chai Spice Nut Butter
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Mark Overbay: The way that we run Big Spoon Roasters is a direct extension of my values and beliefs as a human being. Every decision we make is made through a lens that puts a premium on integrity, sustainability, and quality. We learn from our challenges and decisions every day. Everything is temporary and in a state of constant change. In cosmic terms, we are here on earth for less than a blink of the eye. Our everyday decisions determine the mark we leave and the world we leave future generations. There are no take-backs. With the spirit of stewardship in mind, we strive to use our little business to effect positive change not only in the food world, but in all communities that we touch. We work extremely hard to do everything as well as possible, then try to do it better the next time. The benefits of operating this way are seen in how we positively affect our supply chain, the lives of our team members, our communities, and our environment.
AS SOMEONE WORKING IN THE FOOD INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? MB: There is no other option but to operate in a way that considers sustainability in every decision-making process. Food represents the most intimate way we interact with the material world; it literally becomes us when we eat it. That relationship should be built upon health and vibrancy. I don’t think the need for a greater sustainability focus in business is unique to the food world, but we in the food world certainly need to do better. The dominant profit-centered, monocrop, chemical-intensive agriculture we have been practicing for decades is eroding our soils, killing ecosystems, and destroying biodiversity. Furthermore, the exponential increase in the production and consumption of processed, nutritionally empty foods has lead to epidemics of obesity, diabetes, heart disease, and other deadly metabolic disorders. If we feel any responsibility for the future health of our planet and forthcoming generations (and we should), we need to radically change the way that we feed ourselves. We are a tiny nut butter business, and the decisions we make have a small fraction of the significance of those made by much larger natural brands like Hain (MaraNatha) or Justin’s and mega-corporations like Smucker’s, ConAgra (Peter Pan), and Hormel Foods (Skippy); but if we stay true to our values, we know that every decision, no matter how small, has a positive effect on the people who enjoy our nut butters, and on their communities and ours. Photo: Big Spoon Roasters
FOOD & AGRICULTURE
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY?
Ann Lenhardt, Co-founder Pittsboro, NC Founded: 2013 Products: Elderberry Jam, Elderberry Jelly, Elderberry Ginger Pecan Jam, and Blueberry Elderberry Preserves, plus two supplements: Elderberry Extract and Elderberry Wellness Syrup. THE GOODS • Family-owned. • Uses restorative agriculture practices on the farm. • Working toward organic certification. • Uses only biodegradable peanuts and recycled cardboard for shipments. • Uses reclaimed/reused office furniture. • All products are packaged in recyclable glass. • Uses a solar photovoltaic system and solar hot water system for home office and supply barn. • Partners with local independent contractors who are similarly concerned with the environment and contributing to a healthy society.
Conscious Company Magazine recommends the classic Elderberry Jam
Ann Lenhardt: The biggest benefit we see is the satisfaction of knowing that we are reducing our waste stream through recycling and through the use of recycled and recyclable materials. Additionally, we are growing food that is not tainted with chemical fertilizers, pesticides, or herbicides and we embrace the old New England adage, “use it up, wear it out, or do without,” by choosing to use secondhand furniture, old doors for benches, and old pallets for stock storage, and by repurposing boxes and shipping material in our shipping. Finally, we benefit directly by using the services of other small businesses similarly concerned with limiting their impact on the environment, and, by paying a living wage, we help create a vibrant local community.
AS SOMEONE WORKING IN THE FOOD INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? AL: Our commitment to operating in a sustainable way is rooted in our concern for the environment, our food supply, and our health. The conventional practices associated with modern agriculture are dependent upon chemicals, GMO products, and large tracts of land and equipment. Over time these practices have polluted our land and our food and eliminated countless family farms and the jobs associated with them. The results can be seen in our depleted soils, our contaminated water, and in the health of the people who consume the food grown on these big factory farms. We firmly believe that there is a better way and are determined to be part of the solution. Our focus on sustainability requires that we consider our triple bottom line (social, environmental, and financial) when making all decisions. As an example, we recognize that choosing to package in glass rather than plastic increases our shipping and production costs and reduces our financial gain. Glass “checks the boxes” for social and environmental impact though, and so the decision to package in glass was easy to make. We’d rather have a healthy product in healthy packaging than the money we could realize by choosing cheaper packaging. Similarly, choosing to interplant plums, hazelnuts, walnuts, and apples (to name a few) with our elderberries increases our labor costs for harvesting the elderberries. However, doing so creates a much healthier ecosystem than a mono-crop field, and reduces the number of pests and viruses that bother all of the plants as a result. We trust that making the right decisions will ensure that we too can live a sustainable life, and we are excited to be part of the growing good food movement! Photo: Norm’s Farm SUMMER 2015
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LARRY’S COFFEE Nathan Phillips, Training Manager & Events Coordinator Raleigh, NC Founded: 1994 Products: Roasted coffee and cold brew coffee. THE GOODS • Coffee is 100% Fair Trade Certified, 100% organic, and 100% shade-grown. • B Corp Certified. • Deliveries are made with a biodiesel van. • Partners with Piedmont Biodiesel to have the only B99.9 biodiesel fueling station inside the beltline. • Harvests rainwater to wash the van, clean up, and flush the toilets. Water is also pumped through a passive solar heater and used for radiant floor heating in the offices. • Recycles everything including batteries, electronics, paper, plastic, and cardboard. • Uses company compost for community garden that produces fresh produce for the local community. • Stairs, doors, door and window frames, and many desks are made out of rescued wood.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Nathan Phillips: We see conservation as common sense. Quality in the cup comes from quality farmers. We don’t do business with giant corporate coffee farms that burn Brazilian rainforests to the ground and saturate the soil with a toxic cocktail of petroleumbased fertilizers and pesticides. They rely on mechanization and migrant labor and do to the culture and society around them what they’ve done to the trees and the birds. Fortunately, this represents only about 20 percent of coffee farming worldwide. Most coffee farms that we do business with are two acres or less and often represent the only cash crop a subsistence-farming family grows on their land. Good organic farming practices mean a healthy and balanced bio-strata. That means shade trees, including useful trees like hardwoods, fruit trees, and leguminous trees. The shade is good for birds and critters and bugs that leave nitrogen-rich waste behind, which is good for the coffee. Down near the ground, there are nitrogen-fixing nutritious plants: beans, peas, chiles, strawberries, and melons, all of which will be eaten, as well as vanilla and ginger, which are often grown as a hedge against coffee market volatility. A well-organized organic coffee farm allows Arabica to mature slowly, under shade, surrounded by critters that cram pests into one end and squirt fertilizer out the other. This is where all of the best coffee comes from. Quality in the cup comes from quality sustainability practices.
AS SOMEONE WORKING IN THE FOOD INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? NP: Sustainability equals longevity. We are purely pragmatic. Be careful with the water now and it’ll last forever - along with our profitable business and our satisfied customers. Squander the water now and everybody dies in a horrible apocalyptic, nihilistic “Road Warrior”-type future. Nobody wants that. Well …we don’t. Photos: Nathan Phillips, Larry’s Coffee.
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SPRING RUN MARKET Devica Urwick, Owner and Founder Greenville, NC Founded: 2014 Products: Local organic farm market/ grocery, local organic café and bakery, and weekly workshops on topics such as how to container garden and how to eat to help reverse diabetes. THE GOODS • Business is family-owned. • Uses local, organic, non-GMO foods in café. • Sells local, organic, non-GMO foods from farms in market area. • Hosts workshops that support the principles of sustainability. • Recycles plastics, glass, and cardboard. • Uses biodegradable wares in café and market. • Utilizes the products of sustainable farms and local vendors, providing them with an income.
WHAT BENEFITS DO YOU SEE AS A DIRECT RESULT OF RUNNING YOUR BUSINESS IN A MORE SUSTAINABLE OR CONSCIOUS WAY? Devica Urwick: Keeping our business local builds a truly sustainable system for many areas, including farming, healthcare, and the cost of caring for the environment. Our business simply adds to the good health of our community, which is our main focus.
AS SOMEONE WORKING IN THE FOOD INDUSTRY, WHY IS IT IMPORTANT FOR YOU TO OPERATE IN A SUSTAINABLE WAY? DU: Greenville is a food desert, with a fast-food place on every corner. Our business gives us the opportunity to be the example that this area really needs to live life more on a local level, which brings to light the sustainability of eating local, supporting local farms that practice sustainability, and the tremendous benefits to our health!
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NELLO’S SAUCE In the US, Biodynamic certification has typically been associated with wine, but few people know that other products can also become certified Biodynamic. A few pioneering companies in the US are working to expand into other markets with certified Biodynamic food products. For example, Nello’s Sauce, based in Raleigh, NC, has created the first US-grown, US-crafted certified Biodynamic jarred tomato sauce. We had the chance to speak with Neal McTighe about his bold vision to expand the Biodynamic marketplace and the challenges associated with breaking into a new market segment. We spoke with Founder Neal McTighe about his bold vision to expand the Biodynamic marketplace and the challenges associated with breaking into a new market segment.
THE GOODS • Invests in Biodynamic agriculture and Biodynamic farmers, which supports the growth of a Biodynamic marketplace. • Sustainable packaging for Biodynamic Marinara uses 100% post-consumer recycled paper and recyclable glass jars, and manufacturing is carbon neutral through wind power. • Minimizes the product’s carbon footprint by growing, processing, and distributing from a very small geographic area in North Carolina. • Supports US agriculture and labor, which helps the local economy and neighbors. • Donates sauce to a local food bank to help those at risk of hunger.
Whitted Bowers Farm, the certified Biodynamic farm in North Carolina that supplies produce for Nello’s Sauce
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“The thing that’s really cool about Nello’s is that Neal is so passionate about everything he does and everything Italian. I met him at Expo West a couple of years ago and started telling him about Biodynamic farming. He got so fired up that we ended up introducing him to one of the Biodynamic farmers in North Carolina in his own neck of the woods. They created an agreement to source tomatoes from the Biodynamic farm. Then Neal went to Whole Foods through the Local Producer Loan Program and got Whole Foods to fund him. Now Whole Foods is not only supporting him by putting these products on the shelves, it’s actually investing in this brand, so it has an economic incentive to make sure that the products are successful. That is amazing! I often say that I don’t think we can change the dynamics of food without really taking a look at supply chains because a lot of the challenges inherent in creating a sustainable food system here in the United States go back to the supply chains. The more we get all the people involved sitting down at the table, the better it will ultimately be for the consumer, the farmer, and certainly for these companies that bring great products to market.” ~ Elizabeth Candelario, Co-director, Demeter International What inspired you to become the first Biodynamic tomato sauce made in the US from US-grown tomatoes? What is the story behind this transition? Neal McTighe: There are a couple of Biodynamic tomato sauces that are grown and packaged in Italy and distributed as far as 12,000 miles away. While I admire them, I felt that such a product must limit its carbon footprint in order to really practice what it preaches. Our biodynamic tomatoes, garlic, and basil are grown, harvested, and packaged in the same small geographic area of North Carolina. The product ships this summer from our facility to approximately 140 Whole Foods Markets, from Texas to Ohio, across to New Jersey, and then down to Florida. What is the difference between being certified organic and certified biodynamic? What extra steps are you having to take? NM: Biodynamic agriculture uses the NOP [National Organic Program] as a base but adds dimensions to it that are unique, such as viewing the farm as a self-regulating ecosystem, caring for the diverse flora and fauna, managing water runoff, and welcoming animals and insects within the habitat. It is a very comprehensive, holistic, even spiritual approach to agriculture. There is sound science that supports the argument for Biodynamic agriculture, and I believe it will continue to grab hold over the next five to ten years. What has been the most challenging part of launching your business so far and how have you addressed it? NM: The most challenging part is production, as we are picking, in numerous harvests, thousands of pounds of tomatoes, washing them, grinding and cooking them, and immediately jarring them, all within a 24-hour period. It is no easy task to bring a fresh tomato to a delicious jarred sauce, but we are up for the challenge. The other challenge is managing supply and demand. There is a great deal of demand for this product, but supply is very limited. It is our responsibility to grow the supply, and we invite farmers to connect with us if they are interested in converting from organic to biodynamic.
What insights do you have for other entrepreneurs who have large goals or want to try something new? NM: I can’t emphasize enough how important it is to play out every scenario in your head and walk it through to its logical conclusion. By mapping out the future, you can prepare yourself in the present to be ready for what lies ahead. Don’t leave anything to chance. Entrepreneurship is a gamble enough, so it becomes a game of mitigating risk. In what ways does operating in a more conscious way benefit your company? NM: It provides an incredible amount of purpose and meaning for ourselves and for others. Everyone involved in this project since day one has been impacted in some positive way by it. Our friends at Demeter [certifier of Biodynamic farms and products] have been able to see one of their dreams come true: a farmer, a processor, and a retailer working together to bring a Biodynamic product to market. Our farmer enjoys the confidence of knowing his full crop has been purchased, all while pushing forth his passion for Biodynamic agriculture. Our retailer partner is able to carve out its niche in the market. Customers have an opportunity to learn about a form of agriculture they likely had never heard of before. Those who have heard of Biodynamic farming now have access to a product they’ve likely only dreamed of. And Nello’s is able to grow and prosper, all while making great friends and sharing an exciting story. The list is endless, really. And let’s not forget, this is arguably the greenest jarred tomato sauce on the market, so Mother Nature wins big. What’s next for Nello’s? NM: We look forward to tripling our production in 2016 and adding a new flavor and perhaps even a pesto! We will continue to dream. Photo: Nello’s Sauce
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A DEEPER DIVE INTO
BIODYNAMIC CERTIFICATION BIODYNAMIC CERTIFICATION IS OFTEN VIEWED AS THE PINNACLE OF SUSTAINABILITY FOR AGRICULTURE. Certified Biodynamic® products not only have to meet all guidelines for organic certification, but biodynamic practitioners use a holistic approach, seeing their farm as an interconnected, diversified, and balanced living organism. Biodynamic certification, carried out by Demeter International and Demeter USA here in America, is widely popular in Europe and is beginning to gain traction in the US beyond the wine industry. We had the chance to speak with the Co-Director of Demeter USA, Elizabeth Candelario, regarding the growth of the certification in the States and the key drivers in the market that are scaling Biodynamic practices.
What insights do you have on the growth of Biodynamic certification over the past few years? Elizabeth Candelario: I would say we’re growing at about ten percent per year in terms of our membership. That growth has mostly been in the wine industry; the wine industry was definitely the early adopter here in the US. But in the last few years, especially with our new Whole Foods Market program, we’re starting to see a lot of the very best organic food companies bringing Biodynamic products to market.
As you said, Biodynamic practices have traditionally been associated with wine. How has the certification begun to scale to other industries and where are you seeing the most traction? EC: Biodynamic is a newer phenomenon here in the United States, but it’s been practiced in Europe since the late 1920s. There are all types of products in the market in Germany, France, Switzerland, and Italy. While here the Biodynamic movement in wine is leading to adoption in other types of consumer products, in Europe it was
more the other way around, where there was growth in other products first and then that inspired Biodynamic winemakers. We’re seeing a range of product types coming into the market: tea, rice, chocolate, juice, pastas, pasta sauces, olive oil, fruit spreads. What we’re not seeing quite as much growth in is meat and dairy. That’s probably because the standards, especially with the dairy industry in the US, are going to be very hard to meet. Some of the biggest Biodynamic farms in the world are tea plantations in India that are thousands of acres in size. Here in the United States, our biggest Biodynamic farm is about 900 acres. That’s Fred Kirschenmann’s grain farm in North Dakota. Most of the Biodynamic farms here in the US are small or medium-sized family farms selling locally or regionally. About ten years ago, Demeter had about fifty members. Again, the wine industry was really the early adopter, but after all of these wineries got certified (we have eighty now, which is third in the world after France and Italy), I had food writers call me and say, “Well, this is great but what products other than wine are there in the national marketplace?” And there really weren’t any. Demeter’s mission is to enable people to farm successfully in accordance with Biodynamic principles and practices. We began to realize that one of the definitions of success is economic. You can’t have a sustainable farm if the farm isn’t sustaining the farmer. And we realized that it was really hard to create economic success in a marketplace that didn’t even know what Biodynamic was. How do you educate consumers about the importance of SUMMER 2015
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Biodynamic farms and products if you don’t have a national marketplace of products? How do you begin to create the national marketplace if you don’t have consumers clamoring for those products? Therein lies the Catch-22, and it’s in that that we can look back over the organic food niche and say, “Gosh, it took us forty years to get to where we are right now.” But I would say, at Demeter we’re not nearly that patient, so we began to realize that in
order to create this marketplace, we needed to integrate the supply chain; we needed to get the retailer, the processed food company, and the farmer all working together with this vision of a dynamic Biodynamic marketplace well in advance of consumers knowing what it was. So, we went to Whole Foods and Whole Foods said to us, “We not only think that Biodynamic is important, we want to be really proactive
in helping create this Biodynamic marketplace, and in order to do that, we’re going to go to our very best organic food companies and ask them to consider bringing Biodynamic line extensions into the product market.” If you shop at Whole Foods now, you can go and see that its top organic juice company, Lakewood Organic, now has Biodynamic juices. The Republic of Tea, a fantastic tea company, now has a whole line extension of Biodynamic teas. DeLallo Pasta, one of the top organic pasta companies in the country, now has Biodynamic pasta and olive oil. Amy’s Kitchen has a Biodynamic frozen pasta bowl. Lundberg, one of the most venerable natural and organic rice brands in the country, now has a Biodynamic rice. Once you get these processed food companies to commit, then all of a sudden you go back to the farmer and you can say, “Look, we now have retailers who are really promoting this. We have processed food companies that are looking all over the world for tomatoes and onions and green bell peppers and now might be the time, Mr. or Ms. Farmer, to consider transitioning your farm from organic to Biodynamic.” Are there any misconceptions about Biodynamic certification that you often come across that you wish that you could rectify? Is there something that you wish everybody knew about Biodynamic certification?
“You can’t have a sustainable farm if the farm isn’t sustaining the farmer.” 142 |
EC: I’ve been working with Biodynamic farms and products for about fifteen years and I’ve always been amazed at all of the almost sensationalist conversation out there in the marketplace. It’s getting a lot better now so I hate to repeat it because I don’t want to keep perpetuating it, but fundamentally, in terms of Demeter, the term “Biodynamic” is defined by the Demeter Farm and Processing Standards. Anybody can pick up that Farm Standard and read it and there’s nothing in that Farm Standard that reasonable people aren’t going to agree with, aside from, perhaps, misunderstandings around the role of the preparations (soil and compost additives created on the farm), which is an important thing that we have to keep focusing on and
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keep encouraging the science around. Fundamentally, I would say that the relationship between the farmer and his or her farm is a very personal one, and some people who have been practicing Biodynamic farming for a long time might describe Biodynamic through their own personal relationship with the farm, which might be very hard for people who don’t have that context to really understand. I always like to use the analogy of doing yoga. If I just met you and I thought you could really benefit from doing yoga, and I said, “Look, if you do yoga, you’re going to have a spiri-
The biggest Achilles’ heel is the tension between opportunity in the marketplace and the true fact of biological time. They don’t align at all. Our member services coordinator spends half of her time cold-calling farmers saying, “Do you know about Biodynamic agriculture? Is it something you might be interested in considering?” Our biggest challenge is that our opportunity in the marketplace is so great right now, but it has yet to translate to lots more farms ready to create the raw materials necessary to bring these products to market.
where you don’t use prohibited materials and you’ll still get that organic certification. With Biodynamic, the entire farm has to be certified. There’s no just dipping your toe in the water. Also, for example, with Biodynamic, ten percent of the total acreage of the farm needs to be set aside for biodiversity. Think about Napa, California, where every square inch has such a high value because of the value of those grapes. There isn’t a lot of biodiversity built into those farms because the land is so valuable. The other hurdle is the expertise. Demeter is still a small agricultural non-
“Our biggest challenge is that our opportunity in the marketplace is so great right now, but it has yet to translate to lots more farms ready to create the raw materials necessary to bring these products to market.” tual awakening and you’re going to feel a connection to something that’s larger than you,” people might look at me like I’m crazy. But if I came to you and said, “Look, you should do yoga because it’s really great exercise. It increases flexibility and gives you greater cardiovascular conditioning,” six months from then, you might come back to me really excited and talk to me about how you’re making a connection between your postures and your breathing in your yoga practice. When you work with Demeter, we’re really in the business of saying this is “good exercise” for the farm and then the farmers come to understand what it means to them. What is the most common challenge that you’re facing in terms of actually getting people to take on the certification and how are you addressing it? EC: When Amy’s Kitchen came to us and said, “This is really great. We want to bring Biodynamic products to market. We need forty thousand pounds of Biodynamic tomatoes and we need twenty thousand pounds of Biodynamic onions,” we said, “We don’t have any.” It’s not like big Biodynamic farms exist and there’s all this raw material sitting around.
For the farmers you are cold calling who have put up a bit of resistance to becoming certified, where do you think most of that resistance is coming from? EC: Farms and farmers are unique - each one. So it’s very hard to give a blanket answer to that question because our biggest success, whether it’s a retailer or a processed food company or a farmer, is when we find those that are already values-aligned. That certainly has been the case for the processed food companies - the companies that are ecologically proactive, philanthropic, involved in their own communities, focused on product quality, have their own internal sustainability metrics - those companies are already values-aligned with what we’re doing. Many companies are already there. Even if they don’t know what Biodynamic is when we talk to them about it, they get it. I would say the same is true for farmers. Biodynamic is a new old thing. It’s really the way their great-grandparents farmed. If you go to a farmer who’s really connected to his or her farm, this farm system can really resonate with them. But then there are the physical hurdles. With organic, you can have a 2,000 acre farm and just have ten acres
profit and we represent the whole United States. We need to continue to really educate people - not just farmers, but consultants and investors - so we have a long way to go with that as well. So there are a number of different hurdles, but none that are insurmountable. In a perfect world, where do you see Demeter going in the future and what is giving you hope that you will achieve that goal? EC: We’re talking about that internally right now - what are our metrics of success? In Germany, ten percent of the organic farmland is Biodynamic. Demeter’s vision is to heal the planet through agriculture, so if we’re going to really impact climate change, agriculture is the number one way to do that. If you build really healthy farms, they’re going to sequester carbon faster than taking every gas-guzzling car off the road. So I would say our number one metric is acreage, and I would like to say that if we follow the metrics, someday ten percent of the organic farmland in the US will become Biodynamic - that would be something that I would feel really good about. It’s possible. It might take quite a while, but I think that’s definitely possible.
Photo: Doriana Hammond
“ABRAHAM MASLOW WROTE, ‘ONE MUST RESPOND TO ONE’S FATE OR ONE’S DESTINY OR PAY A HEAVY PRICE. ONE MUST YIELD TO IT; ONE MUST SURRENDER TO IT. ONE MUST PERMIT ONE’S SELF TO BE CHOSEN.’ TO PURSUE YOUR CALLING CAN FEEL LIKE BREATHING IN LIFE IN A WHOLE NEW WAY; IT’S TAPPING INTO WHAT YOU WERE MEANT TO DO AND BE ON THIS PLANET.” - Chip Conley, “Emotional Equations”