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To Gabriel Griffa and Mateo Goretti, for their confidence. To Carlos Lamarca and Fernando van Peborgh, for their friendship.


SUSTAINABILITY 2.0 Networking Enterprises and Citizens to Face World Challenges


Visit our blog at: www.elviajedeodiseo.com/blog This book is not the work of a single author, but the result of the exhaustive and enthusiastic research, writing and editing carried out by the entire Odiseo Team. The Odiseo Team: María Noel Álvarez María Eugenia Baliño Santiago Craig Andresa Guareschi Lívia Magalhães Alejandra Procupet Gabriela Ramos Contributors: Teresa Buscaglia Luciana Malamud Photographs: Mária Antolini Page 26: The Children At Risk Foundation/ CARF: www.carfweb.net Page 30 and 133: Mark Achbar/ Big Picture Media Corporation Page 111: Álvaro Ibáñez/ Microsiervos Page 193: Mariana Vázquez Cover Design: Clara Lagos Interior Design: Mateos-Davenport design English-Language Translator/Editor: Dan Newland: dan.newland@gmail.com ©2008, Ernesto van Peborgh, Buenos Aires, Argentina

Drafting and editing of the original Spanish-language text of Sustainability 2.0 was completed in August 2007. This book is the result of exhaustive research, but as in the case of all research, it can always be improved on and expanded. It is our aim, then, for this work to circulate among citizens, business people, academics, organizations, universities and activists, so that it can expand and grow through the collaboration of its readers. Because Sustainability 2.0 can only exist where there is interaction with others. You can participate, adding your knowledge to the Wiki version of this book, by visiting www.sostenibilidaddospuntocero.com/wiki/ ISBN XXXXXXXXXX


A Personal Journey into the Future

I feel like a privileged observer of the times. I think I’ve reached this privileged vantage point thanks in large measure to some decisions I made in recent years, which ended up letting me see the world from a different perspective. The year 2004 was a very special year for me. In fact, it was probably the most important one of my life. By then, I had invested 20 years in the finance business. My success rate was clear: I was so regularly churning out a 35% return on institutional investors’ money that this ratio was pretty much the mantra of my professional identity. I started my career in finance at Citibank. I left that job to step up to the post of Financial Director on the founding team of the Exxel Group. When I Ieft Exxel, it was to form a partnership and create my own investment firm called Argentine Venture Partners (AVP). Up to then, the full thrust of my work and commitment was only focused on one thing: creating economic value, with no real thought of the far-reaching social and environmental impact of what I did. But as I say, in 2004, guided only by what might be called my intuition, I decided to leave the world of high finance behind and change course. So much so that it was as if I were driving

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down the highway, turned on my blinker, pulled over into the right lane, and got off at the next exit. I was a 44-year-old father of three, with vast experience in private equity, a talent that had flung open the doors of Harvard’s classrooms and of Wall Street’s posh offices to me. My career steeped me in financial success. But I couldn’t help feeling a need to take a different path, to get involved in something that could bring another kind of value to my personal life and to society.

Glacier National Park to hoist the country’s flag, in honor of Francisco P. Moreno, the famed Argentine explorer and scientific expert, who had done the same thing 124 years before. Like Rocca, Sopeña and Fonrouge on their Patagonian journeys before me, the whole adventure of making the same climb and filming the documentary broadened my horizons. I felt that the torch that those extraordinary men of such sound values had held so high was now in my hands, and it was my job to keep its flame from waning. When the film premiered at the Museum of Latin American Art in Buenos Aires (MALBA), several business people expressed a desire to promote a dialog among parents and children on issues emerging from Spirals. That made me stop and think: If telling the story of these three men can spark a debate on human values, what would happen if we started telling the stories of other people who are changing the world? By then, I had already heard about some social entrepreneurs and the initiatives they were heading up. I knew about the work of people like Swiss philanthropist and former industrialist Stephan Schmidheiny, founder of the WBCSD (World Business Council for Sustainable Development) and the AVINA Foundation, who, through such enterprises, was

First Wave: The Value Revolution The first adventure on that heady new road —which, looking back, bears little comparison to my past life— was the decision to make a film. I wanted to tell the story of Agostino Rocca, José Luis Fonrouge and Germán Sopeña, a businessman, a mountaineer and a journalist, whose common denominator was their fascination with Patagonia, that legendary and largely unexplored territory that was soon to become my own passion as well. Spirals of Stone was the result, a film documentary about an expedition undertaken by a group of family members and friends in homage to those three men. The trio died in a plane crash in 2001, when they were flying to Argentina’s

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providing support to social leaders and their organizations, who were working to improve life in their communities. It was then that I made the firm commitment to get to know and understand those who were spearheading humanity’s value revolution. But most of all, I wanted to know what made them tick, what it was that inspired them to attempt to stimulate this change. Motivated by the achievements of these people and by the work in this same field carried out by Bill Drayton, creator of the Ashoka organization and the figure that I took as my second reference point among social entrepreneurs, I directed my second documentary: Faros, señales de cambio en América Latina (Beacons, Signs of Change in Latin America). My aim was to spread the word regarding the work of many individuals who are making a tireless effort in the struggle against poverty and inequality. Faros gave me a chance to tour Argentina’s most marginal neighborhoods and to get to know Fabián Ferraro, founder of a civil association called Defensores del Chaco, which uses sandlot soccer as a method of social inclusion for some 1500 children and adolescents at risk. The making of this film also took me to a jungle town in the Bolivian Amazon, where

children are learning Baroque music and are making their own instruments, thanks to the work of Rubén Darío Suárez Arana. And I was also able to discover admirable people like Rodrigo Baggio, a young man from Rio de Janeiro who, in 1995, founded CDI (Committee for the Democratization of Information Sciences), a group that has been responsible for setting up 376 computing schools in Brazil, Colombia, Chile, Mexico, Uruguay and Japan, and that in Brazil alone has helped 600,000 young people breach the “digital gap”. I also met Bartolomé Silva, a Chilean social entrepreneur who uses his World Circus (Circo del Mundo) as a platform for giving youngsters at risk a new chance. And Inés Sanguinetti, who invites youngsters with no material resources to learn to dance and express themselves, motivating them with the echoes of applause. Directing Beacons, which premiered at the close of the IDEA business colloquium in 2005, also allowed me to understand that while what prevailed in business was competition, selfishness and lack of motivation, on the “other side of the tracks”, in the world of the so-called “excluded” members of society, there was beauty, motivation, cooperation and recognition of achievements, especially those reached collectively.

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This led me to ask myself, then, which world I wanted to leave to my children, and to what extent it made sense to keep generating economic value without taking care of other, indispensable aspects of preserving life. Was it possible to change the world by transforming the values that motivated Mankind’s actions? My recent experiences have taught me that it is, that there are many people out there who are working for a new and better future. And little by little I began to want to join in this collective effort that is taking shape.

hoped for, I didn’t give up, because several major personalities from the corporate world did indeed decide to accompany me and acted as consultants, providing me with invaluable guidance in my search. I refer, among others, to Manuel Arango Arias, businessman and environmentalist, who is chairman and founder of the Mexican Foundation for Environmental Education and of the Xochitla Foundation; Reese Schonfeld, co-founder and first president of the CNN news chain; Julio Saguier, chairman of the media holding company, La Nación S.A. and of the Diario La Nación Foundation; businessman Ricardo Esteves, co-chairman of the Iberoamérica Forum; and researcher, former Harvard professor and author of the bestseller, Underdevelopment Is a State of Mind, Larry Harrison. At the same time, another unstoppable wave began to carry me on its crest like a surfer: awareness about sustainable development. Taking this second exit from my old highway, I got to know companies like Natura Cosméticos and Patagonia, which were born with sustainability already in their DNA and were measuring their bottom line in economic, social and environmental terms. I had the opportunity to talk to Luiz Seabra and Guilherme Leal, Natura’s founders, and thus find, finally, the kind of people I had been looking for in the private

Second Wave: Sustainable Development Anxious to tell the stories of social entrepreneurs to an everincreasing number of people, I called on media owners to publish and broadcast the work of this silent movement that was growing at two or three times the rate that the private sector was — in what today we are calling the “the worldwide associative revolution”. This obliged me to quickly change my perspective. I suddenly went from the favela shantytowns of Brazil to the luxurious personal museum of Carlos Slim, owner of Telmex and Televisa in Mexico City and to the comfortable offices of Ricardo Salinas Pliego, owner of TV Azteca. Although I wasn’t met with the enthusiasm I had

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sector. And as my knowledge of sustainable business practices began to grow, I stopped feeling like Don Quixote jousting with windmills and started coming to grips with the idea that humanity was at the threshold of a change of cultural paradigm that would make history.

This conclusion arose, once again, from my own field of action: My collaborators and I had spent considerable time trying to figure out where and how to place Spirals of Stone and Beacons, as well as other content that we had created on the Internet. This research led us to discover YouTube when it was just getting started. And so it was that after a two-year search for a channel through which to inform and commit individuals, organizations and businesses with regard to sustainable development, I concluded that the natural platform for this was the Web. My initial enthusiasm with the Web 2.0 application was followed by a period of exhaustive research on and experimentation with the tools it offered. Despite my admiration for the fabulous disruptions it was causing, I had to admit that Web 2.0 wasn’t a revolution in itself, but a mere platform for a series of revolutions in thinking. Web 2.0 is still in an early stage and many of its applications remain confusing for the “digital immigrants” of my generation. Nevertheless, in another decade, the Net Gen —the generation of young people born into the digital age— will have taken the reins in the world’s enterprises and this wave will have enveloped us all. Once again, I opted not to just sit by and watch these changes happen. I wouldn’t want to wake up tomorrow and see that

Third Wave: Web 2.0 The tipping point came for me in 2006. That was the year when something unusual that I had already begun to observe began to have an increasing impact on companies, people, citizens and governments. It was only then that I came to the certainty that this future for which I was willing to work was a lot closer than I had supposed. Perhaps it had even already arrived. At the beginning of that year, Grupo Gerdau and Jorge Paulo Lemann invited me to speak at a forum of 200 business people on education via correspondence. “Participation” was the key word that I pronounced that day during my presentation in Salvador, Bahia, Brazil, in referring to the relentless advance of the new communications media and particularly of the Internet, which, in its role as a participative, collaborative and creative application for communities, has revealed itself as the most effective catalyst in the transformation of the cultural paradigm.

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everything has changed and that I’ve missed out on being part of the transition.

line. If one member of a team drops out, the entire team is disqualified. The key is to put the interests of the group as a whole over and above those of the individual contestants, and that sometimes means having to sacrifice food or water to revive someone who has suffered dehydration, or having to cut back the pace in order to let a team member recover. And it is as moving to receive the solidarity of the rest of the team as it is to give it. The possibility of experiencing extreme perspectives —desert and mountain, individual and group interests, corporate empires and massive shantytowns— has permitted me to incorporate what I have learned in these years and identify some values of my own from the new paradigm: confidence, responsibility, collaboration and transparency. The trust that social entrepreneurs and their organizations place in their projects and in the community as architects of a change in values. The responsibility of many consumers and citizens, who are ever more committed to their times and to the planet. The collaboration applied by the Net Gen in the Web when they collectively create new realities. The transparency revolution implemented by certain companies that have pioneered in sustainability, even before society started to demand it.

Prolog Epilog “The only way to cross the desert is to keep walking.” This adage may sound a little trite, but I learned its meaning in the most extreme of practices. In another of my “past lives”, I took part in dozens of grueling races and marathons. I participated in my first Eco-Challenge in 2001. In eight days, we raced across 350 km of pristine and desolate lands in New Zealand. We climbed mountains and navigated raging rivers. When you walk 22 hours a day non-stop except to grab a few hours of sleep, you get in touch with the most intimate essence of human nature. You don’t feel the cold or the physical fatigue, only the overwhelming need to eat, like some powerful animal reflex. In 2004, my passion for challenges took me to the Atacama Desert. In six days, we ran seven marathons in the most extreme environment on earth. Withstanding temperatures of 40°C by day and –6°C by night, we crossed that salt desert through places where no human being had ever tread before. These tests seek to underscore the virtues of teamwork. That’s why the prime rule is that everybody has to make it to the finish

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This is, in a nutshell, the story of the personal journey I began in 2004, the year that I learned to know the desert, the year my father died, and the year I began to have a new outlook on life. That year too, I had another son, an event that moved me to reassess the world I was building for him, and for my other three children, and their children. In response, I found an unprecedented motivation spreading the word about sustainable development. In the Net Gen, there is hope. And in Web 2.0, there is a space from which to start building enterprises, social organizations and citizens’ groups, based on this motivation and on this hope. Over time, my vision began to capture the interest of journalists and communicators, who, motivated by their own personal journeys, expressed their almost natural empathy. And despite their having been brought up in related but still diverse disciplines —like psychology, history, philosophy and advertising— they came together to form the inter-disciplinary team that is now known as Odiseo, a group that has promoted research to affirm my hypotheses and of which this book is a mere sketch. As a result of the road undertaken, I feel today, as I stated at the beginning of this prolog, like a privileged observer of these times. Standing atop the peak that permits me to main-

i tain my perspective, on one side I see the business world with its economic power that draws strength from bottom-line results and growth. And on the other, I see a silent movement, but one that is growing at a dizzying rate, a movement that, incredibly enough, has remained beyond the radar of the media, governments and businesses alike. Its leaders are entrepreneurs that are concerned about life and about us, the members of the human species, the inhabitants of this single, global village. These are people who, with responsibility and confidence as their powerful motivations, are attempting to change the world and build a better future. In both of these sectors, among companies and social entrepreneurs, there are young members of the Net Gen, with the multiple tools of Web 2.0, the natural platform from which to transmit the sustainability paradigm. We are living in the best and in the worst of times. The road to a better future promises to be a long and winding one. But it also promises to be full of surprising discoveries, some of which we will try to share with you in the chapters you are about to read. Ernesto van Peborgh

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ACTIVISM AL_GORE BIODIVERSITY EDUCATION

AMAZON

AN_INCONVENIENT_TRUTH

CITIZENS CIVIL_SOCIETY

ANITA_RODDICK

AUTHENTICITY

BILL_DRAYTON

CONSUMER CONSUMPTION DIVERSITY ECO-EFFICIENCY

ECOLOGY

ENTERPRISE ETHICS ETHOS EXCLUSION FORESTATION GLOBAL_WARMING GRAMEEN_PHONE

GREENWASHING HUMAN_RIGHTS INCLUSION INTERFACE JOHN_ELKINGTON KNOWLEDGE LONG_TERM NETWORKS NGO LUIZ_SEABRA MARKETS NATURA NEW_PARADIGM NIKE NO_LOGO ODED_GRAJEW PARTICIPATION PATAGONIA PAUL_HAWKEN POVERTY RAY_ANDERSON RECYCLE RESOURCES RESPONSIBILITY RESPONSIBLE_CONSUMPTION REUSE

SOCIETY

STAKEHOLDERS

STARBUCKS

STEPHAN_SCHMIDHEINY

SUSTAINABILITY

DEVELOPMENT TOYOTA TRANSPARENCY TRIPLE_BOTTOM_LINE VALUES VIRTUAL

SUSTAINABLE_

WAL-MART WATER WOMEN

YVON_CHOUINARD ACTIVISM AL_GORE AMAZON AN_INCONVENIENT_TRUTH ANITA_RODDICK AUTHENTICITY BILL_DRAYTON BIODIVERSITY CITIZENS CIVIL_SOCIETY CONSUMER CONSUMPTION DIVERSITY ECO-EFFICIENCY ECOLOGY EDUCATION ENTERPRISE ETHICS ETHOS EXCLUSION FORESTATION GLOBAL_WARMING GRAMEEN_PHONE GREENWASHING HUMAN_RIGHTS INCLUSION INTERFACE JOHN_ELKINGTON KNOWLEDGE LONG_TERM NETWORKS NGO LUIZ_SEABRA MARKETS NATURA NEW_PARADIGM NIKE NO_LOGO ODED_GRAJEW PARTICIPATION PATAGONIA PAUL_HAWKEN POVERTY RAY_ANDERSON RECYCLE RESOURCES RESPONSIBILITY RESPONSIBLE_CONSUMPTION REUSE SOCIETY STAKEHOLDERS STARBUCKS STEPHAN_SCHMIDHEINY SUSTAINABILITY SUSTAINABLE_DEVELOPMENT TOYOTA TRANSPARENCY TRIPLE_BOTTOM_LINE VALUES VIRTUAL WAL-MART WATER WOMEN YVON_CHOUINARD ACTIVISM AL_GORE BIODIVERSITY EDUCATION

AMAZON

AN_INCONVENIENT_TRUTH

CITIZENS CIVIL_SOCIETY

ANITA_RODDICK

AUTHENTICITY

BILL_DRAYTON

CONSUMER CONSUMPTION DIVERSITY ECO-EFFICIENCY

ECOLOGY

ENTERPRISE ETHICS ETHOS EXCLUSION FORESTATION GLOBAL_WARMING GRAMEEN_PHONE

GREENWASHING HUMAN_RIGHTS INCLUSION INTERFACE JOHN_ELKINGTON KNOWLEDGE LONG_TERM NETWORKS NGO LUIZ_SEABRA MARKETS NATURA NEW_PARADIGM NIKE NO_LOGO ODED_GRAJEW PARTICIPATION PATAGONIA PAUL_HAWKEN POVERTY RAY_ANDERSON RECYCLE RESOURCES RESPONSIBILITY RESPONSIBLE_


Sustainable Development


A New Paradigm

Chapter 1

At the end of 2006, the world premiere of An Inconvenient Truth established the issue of worldwide climate change as a reality —and not just as the obsession or paranoia of a few scientists and activists— by showcasing the fight waged by former US Vice President and Nobel Peace Prize-winner Al Gore against global warming.

Meanwhile the number of civil action organizations was growing — and continues to grow at an ever-faster rate — due to the ineffectiveness of government in the face of issues that call for urgent solutions: poverty, environmental protection, defense of human rights and the preservation of democracy. It appears that the tipping point —the moment at which something unique and unusual changes the habitual, according the definition by Malcolm Gladwell — is growing nearer all the time. And that Mankind is converging on a new paradigm. A veritable “ethos” or starting point. And with it will come the sustainable development that urges us not to try to live beyond our means, not to burn down our houses in order to keep warm, not to saw off the branch that we’re sitting on. The proposal of this concept is, actually, pure common sense: the common sense that impels us to turn off the lights when we leave home and to not leave the tap running while we brush our teeth.

That same year, Wal-Mart announced its commitment to sustainability. It began a plan by which, within a threeyear period, some of its lines would only offer products manufactured employing sustainable practices. Today, 60,000 companies are modifying their production processes in order to satisfy this chain-store giant that welcomes 100 million shoppers a week. A survey run by The Synergos Institute in several countries showed that 95% of all consumers believe that companies have an unpaid debt with their workers and their communities.

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Viability or Sustainability?

The terms “viability” and “sustainability” came to the fore in the popular vernacular along with the new electronic information media that became the driving force behind widespread awareness of growing worldwide problems including overpopulation, lack of water, famine and environmental degradation. In the academic world, however, these terms had already been introduced in the book called The Limits of Growth (Meadows and others, 1972), published by The Club of Rome.

began to be defined more fully and as we conceive of it today. Until the beginning of the 1990s, the notion of “sustainability” had basically been applied to the environmental field. But over the course of that decade, its use began to extend to social, political and business issues. Little by little, such questions as inequality in the distribution of wealth and diversity in terms of ethnicity, gender, nutrition, health, access to information and security began to be incorporated into the debate. Governments, business groups and a growing number of civil organizations became the driving forces behind a series of global conferences whose aim was to create a framework of governance, through which to come to grips with a new form of development that would bear in mind the environmental, economic, social and institutional needs of both present and future generations.

There is no clear consensus regarding the meaning of “viability” or “sustainability”. Nevertheless, one of the first definitions of sustainable development was provided by the Brundtland Report put out by the United Nations World Commission for Environment and Development, which was originally called Our Common Future (1987). Chapter 1 of that Report gives the following definition: “Sustainable development seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future”.

The latest UN Earth Summit on Sustainable Development was held in Johannesburg, South Africa in 2002, where discussions surrounded strategies for promoting the principles of sustainability and ensuring their adoption by nations worldwide and in every region of the planet.

But it was not until the Rio Earth Summit (Rio de Janeiro, 1992) that Mankind adopted a global perspective with regard to global issues and that the concept of “sustainable development”

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Conditions for Environmental Sustainability

renewable resource should be non-renewable resource 1 No 2 No used at a faster rate than it can should be used at a faster rate be generated.

than that necessary to replace it with a sustainably renewable resource.

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pollutant should be produced 3 No at a rate faster than that at which it can be recycled, neutralized or absorbed by the environment.


The Three Waves of Sustainability According to John Elkington

THE FIRST WAVE: The Green Revolution

It was within the framework of the Cold War, the hippie movement and the May Revolt in France that the first ecological organizations, such as Greenpeace, emerged. It was also during this period that the first environmentally aware companies –Patagonia and Natura– came onto the market.

THE SECOND WAVE: Market Economy Comes to the Forefront

The Berlin Wall comes down and democratic systems take a foothold in Latin America. The Exxon Valdez oil tanker spill makes people start taking the ecological movement seriously. Marketing begins to adopt “green” messages on a massive scale.

THE THIRD WAVE: Toward Responsible Globalization

Globalization bursts onto the scene, and antiglobalization with it. The Internet grows at a swift pace, bringing the birth of participative media, and ad agencies begin to study on-line advertising. Companies like Shell and Nike face complaints regarding their production processes and must account for their actions before society.

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1961 Amnesty International, the World Wildlife Fund (WWF) and the Organization for Economic Cooperation and Development (OECD) are founded.

1983

1984

The UN creates the World Environment and Development Commission.

1999 Battle in Seattle (USA).

Bhopal Disaster (India).

1986 Chernobyl Disaster (USSR).

2000 First World Social Forum (Porto Alegre, Brazil). Publication of No Logo, by Naomi Klein (who denounced Nike’s use of slave labor).


1962 Publication of Rachel Carson’s Silent Spring.

1987 The Montreal Protocol is signed. The Brundtland Report is published.

2002 World Sustainable Development Summit (Johannesburg, South Africa).

1971

1972

Greenpeace is born.

1988 John Elkington launches his Green Consumer Guide.

1973

Publication of The Limits of Growth by The Club of Rome. The Stockholm Conference (first UN Environmental Summit).

1989 Exxon Valdez Case (following the Alaska oil spill). Fall of the Berlin Wall (unification of Germany).

Seveso Disaster (Italy). Watergate Case (USA).

1992 First Worldwide UN Earth Summit (Rio de Janeiro, Brazil). The World Business Council for Sustainable Development (WBCSD) is founded.

1995 Shell Scandal (petroleum spills in Nigeria). The Ethos Institute (Brazil) is created.

2003

2004

2005

2006

Third World Social Forum (Porto Alegre, Brazil).

Tsunami (Indian Ocean).

Hurricane Katrina (in the states of Florida, Louisiana and Mississippi and in the Bahamas).

Muhummad Yunus receives the Nobel Peace Prize for the founding of the Grameen Bank.

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1975 The UN declares International Women’s Day.

1997 The Kyoto Protocol is signed. NIKE Scandal. The “Triple Bottom Line” concept is published.

2007 Al Gore receives the Nobel Peace Prize for his contribution to halting global warming.


“Sustainable development is a dynamic process which enables all people to realize their potential and to improve their quality of life in ways which simultaneously protect and enhance the Earth’s life-support systems”.

In Search of the Perfect Definition The ideas of most people regarding the meaning of the word “sustainability” are simple and on target: “Sustainability refers to human survival and the avoidance of ecological disaster.” Be that as it may, the language of sustainability becomes clearer and more effective when we focus on what is unsustainable instead of on the positive definition. Farmers and ecologists, for example, would surely be in agreement that soil erosion due to human activity is unsustainable, even if they were to disagree about how to make soil use sustainable. Here are a few diverse, though not contradictory, definitions regarding sustainable development and sustainability in general:

“Understanding is 50% of the solution. Every time we are about to make a decision, we should think of the people around us and ask ourselves if that decision is going to cause a problem for any of those people. If that’s the case, change it or don’t do it”. Bill Drayton, Founder of Ashoka

Forum for the Future - OAS

es on and when the light bulb go “Sustainability comes everything is are all involved, that you start to see that we ”. ur actions affect others interconnected, that yo Paul Hawken

“Sustainable development is a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations”. World Commission on Environment and Development – UN

“In essence sustainable development is about five key principles: quality of life; fairness and equity; participation and partnership; care for our environment and respect for ecological constraints”.

Forum for the Future’s Sustainable Wealth London Project

“It requires education , more efficient use of resources, more open of democracy, as we forms ll as society’s particip ati on in decision-making. It also requires econo mic growth, focused on generating more opportunities”. equal Stephan Schmidhein

y

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The New Paradigm itself is at the center of everything and Man forms part of this, as one of its intelligent manifestations. A change of cosmovision also implies a change of focus, in order to face the problems that 21st century society is suffering. This has emerged as an inescapable fact following the failure of States —self-proclaimed as the source of all of the basic necessities of their citizens— to provide solutions to such vital questions as scarcity of resources, environmental pollution, health care, poverty and lack of quality of life, among many more.

The many nuances of the definitions show that many concepts are currently being articulated around sustainable development. Intellectuals that are pushing a new intercultural philosophy based on an awareness of diversity and interdependency, theorists who are for a systemic focus on science, social leaders that promote the creation of subsistence communities and economies, ecological militants and business people with a long-term view oriented toward responsible resource management, all rally today around this new paradigm, that is the incarnation of the need to integrate human beings into their environment once more.

And so the old Welfare State went out with the 20th century, indeed leaving in its wake very serious conflicts in a variety of fields, which, in order to find a solution, require the joint interaction of a broad spectrum of interests. As a result, the new sustainability paradigm has been enriched by a focus that underscores the value of association, interaction and networking, above and beyond simple exchanges among individuals, sectors or corporations, which function as closed special interest groups.

In the end, it is about producing a change in the cosmovision: from the anthropocentric vision that Mankind began to build in the Modern Era —centered exclusively on human and individual interests and conceiving of the Earth as nothing more than a raw materials warehouse that is at Man’s disposal — to a biocentric cosmovision, which conceives of Nature as a combination of interdependent organisms and in which life

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The Direction and Sense of Change

Modern

There is no real consensus at present with regard to the direction that the advance of change toward the new paradigm is taking. In his book, Blessed Unrest, ecologist Paul Hawken analyzes this “largest movement on earth (…) that has gone largely ignored by politicians and the media” and that, according to him, is being organized, like Nature, “from the bottom up”. Hawken says that “in every city, town and culture, it is emerging to be an extraordinary and creative expression of people’s needs worldwide.” For his part, John Elkington, author of Cannibals with Forks, points out that the driving force behind sustainable development is a qualitative transformation the affects both supply and demand. Ray C. Anderson, Chairman and CEO of Interface, Inc., a pioneer in the trend toward sustainable development, in that same vein goes on to say: “When the marketplace, the people, show their appreciation for these qualities and vote with their pocketbooks for early adopters, the people will be leading. The ‘good guys’ will win in the marketplace and the polling booth and the rest of the politicians and business leaders will have to follow”. Regardless of agreement or not about what drives the change toward sustainability and the directions the movement is

ANTHROPOCENTRISM Focus: Man Earth: Raw Materials Warehouse Link:

IR RESPONSI BLE C ONS UMPT I ON

Post-Modern BIOCENTRISM Focus: Life Earth: Inter-dependent Organisms Link:

SU STA I NA BI LI T Y

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taking, the majority of voices worldwide agree as to the urgent need to do something about Man’s relationship with Nature and to the need be successful in this effort, bearing in mind the magnitude and seriousness of the risks involved. And in spite of the multiple definitions, variations and meanings that simultaneously coexist, there can be no doubt that sustainability has gained almost universal acceptance as a good thing. (Few people indeed could find a defense for non-sustainability). There are those, however, who disagree as to whether development can be considered a possible road to sustainability. Among these are members of the alterglobalist or antiglobalization movements, a school of thought made up of ecological groups, pro-native movements, leftist intellectuals and union leaders throughout the world, who share their rejection of capitalism, the neo-liberal model, multinational companies and the IMF. Gathered at the World Social Forum and congregating around such renowned ideologues as Noam Chomsky, Leonardo Boff, Jaime Petras and the newspaper Le Monde Diplomatique, these groups deny the effectiveness of development in the achievement of a more sustainable and fair world order, since they consider that it is based on the presumption of economic

growth ad infinitum, which implies unlimited consumption of resources and the absence of social equality. They believe, however, in sustainability, and promote it, as anyone can see by consulting their communications channels on the Web: Indymedia, Nodo 50 and Rebelión.org, among others.

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Dimensions and Issues of Sustainable Development

Science, ecology, civil society, business...each group or individual promoter of sustainable development stimulates construction of the new paradigm from the field of action in which it/he/she operates. This gives rise to the different dimensions of sustainable development, with each of these being characterized by a variety of issues or areas of debate:

Environmental

Social

Pollution

Health and quality of life

Climate change

Education

Natural disasters

Equality

Biodiversity

Human rights

Waste

Equal access to opportunities

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Economic

Institutional

Science, technology and society

Agents/institutions

Business and trade

Governance and transparency

Energy

Participation and democracy

Efficient resource use

Globalization /alterglobalism

Sustainability indicators

International cooperation

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Agents of Change

cases in which NGOs have demonstrated their influence: • In 2000, Amnesty International reported the deaths of civilians and grave human rights violations committed by guards in production areas managed by Talisman Energy Inc. in Sudan. Following two years of protests, several pension funds withdrew their participation in the oil company, which was obliged to initiate its withdrawal from the country. • After five years of reports regarding child slave labor in the harvesting of cacao in the Ivory Coast —children as young as 10 were forced to work 12-hour shifts, were poorly fed and were locked up at night— in 2005, Equal Exchange and other NGOs managed to get Hershey, M&M, Nestlé and other major chocolate manufacturers involved in the issue. They ended up exercising responsible care practices and agreed to certify their products as being “child slave labor-free”. • The Canadian mining firm Meridian Gold in 2002 announced plans for open-sky gold-mining operations in the Andes range near Esquel, Chubut Province, Argentina. There were fears that the acid drainage from the thousands of tons of rock that would have to be moved and the use of thousands of liters of cyanide to process the ore would have a pernicious effect on the ageless and pristine Alerces National Park. An NGO called

Within the framework of the new paradigm, which underscores the value of association and cooperation, the work of civil organizations —NGOs among them— has made a considerable impact. Emerging from the urban middle class, which burgeoned with the economic expansion of the 1960s, these began to operate in the 1980s and acquired a stellar role in the 1990s, substituting for a State that was reduced to its minimum expression and incapable of providing answers to problems relating to health, education, poverty, human rights, environmental pollution, promotion of women’s development and consumer rights, among other issues. In society, the action of many NGOs involves divulging information and generating awareness. In their role as a forum for citizen interaction combined with lodging demands that governments and companies prevent, correct or mitigate unsustainable conducts, the actions of these organizations transcend geographic and socio-economic boundaries. And with the coming of the communications revolution —especially the Internet— they have become so influential that it is often enough for an NGO to threaten involvement in an issue for government officials or business people to reconsider their planned actions. The following are details of a few well-known

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Movimiento de Vecinos Autoconvocados por el No a la Mina (SelfConvened Movement of Neighbors against the Mine), managed to get the issue into the domestic and international media and to organize a referendum in which 80% of the population expressed its rejection of the mining project. As a consequence of such widespread repudiation, the government of Chubut Province was forced to slap a prohibition on open-sky mineral ore mining and on the use of cyanide in mining processes.

• The Power of the Intern

et

Just as printing beca me Protestant ideas —pro a fundamental tool for the disseminatio n of vo Roman Catholic Churc king the greatest revolution suffered by the h in its 2000 years of is today supporting exi stence— the Internet the capacity of civil so ciety to interconnect, take advantage of ins grow, tant access to a wide range of information financing and comm , unities, and to create collectively. NGOs have given bir th —also through the Internet— to campaig that have paralyzed comp ns thanks to the Web, the anies that were not operating correctly. And volume of data regard porations is so huge ing the actions of co that, according to an raly into ever more soph isticated use of marke sts, it will soon develop t intelligence.

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• Social Sector

e Johns Hopkins 22 countries by th repin t ou ed rri ca Studies revealed that NGOs ed lud rofit Sector Project Comparative Nonp -earning labor force in countries inc ge t in resent 5% of the wa between 1990 and 1995, employmen at for the te ra th ow gr e in the study and th th times faster than w work that sector grew 2.5 Civil society organizations apply ne . ole wi wh accordance th economy as a anagement style in m a d has an s gie olo method of these changes e of the outgrowths ivate, non-profit sector their mission. On pr , e of an organized cial been the emergenc rld-class, worldwide, economic, so wo a e that has becom . and political force

• Networked Organizations

at underlies the d cooperation th an n tio cia orks of so as of The value given rise to netw one ganizations has or th e wi es k th or tw of n ne tio rn ac tu e, itutions. These in ilding of an activ bu e th in humanitarian inst r he ot ch ea d t ize en gn em co pl re another and com mmunity, that is g international co n’t wait self-administratin cle for information and that does at are of hi ve s the issue th as a source and l media to take up na tio di tra e th r around fo takes action. bers, but rather, em m its to st re te in ral distances onomic and cultu the sector -ec cio so ic, ph ra So it is that geog interaction within vor of synergetic ty. are spanned in fa ther the different sectors of socie ge and of bridging to


Civil Society versus Business

Within the first few pages of her book, No Logo: Taking Aim at Brand Bullies, Canadian journalist Naomi Klein —a renowned figure in the anti-globalization movement— states: “This book is hinged on a simple hypothesis: that as more people discover the brand-name secrets of the global logo web, their outrage will fuel the next big political movement, a vast wave of opposition squarely targeting transnational corporations, particularly those with very high name-brand recognition.” In recent years, the world has witnessed business scandals and citizen boycotts that have swiftly taken shape through the communications media. Their shockwaves have reached the employees of the companies involved, who began to bring pressure for changes toward more sustainable production processes. In order to come to grips with these demands, some firms decided to partially modify their processes, while adopting corporate social responsibility policies, with the aim of “cleaning up” their images and repositioning themselves on the market as “environmentally friendly” by adopting a “green” outward appearance (greenwashing). But when these policies are not the result of the values that the company actually maintains, their positive impact is nil.

According to political scientist Rajni Kothari, “sustainable development demands, above all, an ethical change. It is not a matter of a technological fix or a new way of making financial investments. It is a change oriented toward valuing Nature for what it is and not simply as a source of resources and to fuel the motor of economic development”.

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OLD PARADIGM

ETHICAL CHANGE

NEW PARADIGM

DISPENSABILITY OF OTHERS

RESPECT FOR DIVERSITY

Focus: Man / Sector Link: Exchange Instrument: Individual Project Objective: CONSUMPTION

Focus: Life / Cultures Link: Interaction Instrument: Common Strategies Objective: SUSTAINABILITY

OLD VALUES

NEW VALUES

It is Professor Kothari’s belief that the ecological crisis that the world is suffering is due to the fact that we have considered Nature’s diversity dispensable. And by transferring the lack of respect for Nature to Man, we had virtually declared a major portion of the human race dispensable as well, generating one of the fiercest socio-economic crises in history. Thus, in order to halt this crisis, we need an ethical change based on the premise that all life is indispensable.

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1

Companies start to notice that their customers and the markets are checking out their commitment to economic, social and environmental sustainability.

2 3

Feeling themselves suddenly in the public eye, companies have to assume the fact that even though they try and control news of their actions, these actions beco me public knowledge anyway. This is the reason why they start ope rating transparently.

4 5

ture is transformed: It is Little by little, corporate cul of of making money, but also no longer just a question and social values. incorporating ethical issues

The companies become aware of the importance of designing new techniques and processes that reduce the economic, social and environmental impact of their products.

s among themselves, Companies form strategic alliance anizations from other or between themselves and org itionally considered sectors, even some that were trad enemies.

7

6

Gradually, the way of conceiving corp orate time frames changes and a need emerges to think more and to plan on a long-term basis.

The TBL (Triple Bottom Line) Agenda is incorporated into the companies’ strategic management (to control the economic, social and environmental impact of processes and products).


The Sustainable Company

These points summarize the Seven Revolutions that could lead companies to Sustainability as set forth by consultant John Elkington in his book, Cannibals with Forks (1997). In it, he also defined the concept that he coined as Triple Bottom Line (TBL), pointed to as the differentiating attribute of companies that were categorically committed to sustainability: e.g., companies whose management systems take into account the impact of their processes and products on the economy, society and the environment. Subsequently, sustainable companies began to be defined as those that were capable of reformulating their strategies by including three complementary parameters: economic growth, creation of social value and environmental conservation. So it was that in the last five years of the 20th century, this new paradigm began to repeat itself throughout the productive sector: Businesses began to talk for the first time ever about incorporating such concepts as the creation of economic, social and environmental value for their “stakeholders” (workers, shareholders, customers, civil and government organizations)

Chapter 2

and to process re-designing with a view to the long term. At the same time, and by the hand of the World Business Council for Sustainable Development (WBCSD), new concepts that were applicable to business sustainability began to take shape. These concepts stressed the need for companies to not only seek eco-efficiency, but also to properly think about (or re-think) their relationship with society and the environment, by incorporating practices encompassed within the concept of corporate social responsibility (CSR). Defined by the WBCSD as“the decision of a company to contribute to sustainable development by working with its employees, their families and the local community, as well as with society as a whole, to improve the quality of life”, it placed the company in a key position within the architecture of the new paradigm. Within the neo-liberal model, which at the time was enjoying broad acceptance in much of the world, change toward sustainability required the action of companies, considered, as they were, to be the main driving force behind economic growth.

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Business in the 21st Century

With the dawning of the new millennium, an ever-growing number of business people joined the debate and began to rethink the place that their companies were occupying and the role they played in society and on Planet Earth. In this way, the concept of what constituted a sustainable company continued to develop and be enriched, especially in ethical and social terms. Inwardly, a new corporate culture emerged, one that recognized the people that made up the company and the know-how that they generated (e.g., its human capital) as its main asset, since the competitiveness of the company depended on their capacity for action and innovation. Outwardly, companies started to recognize themselves as integral parts of the communities where they operated and, as such, as jointly responsible for both the welfare and the problems of these societies, as well as being participants in the definition of their values. Out of this emerged the incorporation of the environmental variable into corporate strategy, along with the creation of economic and social value — or in other words, the Triple Bottom Line mentioned earlier. Information technologies and the development of the Internet facilitated both internal changes in companies and their communications with society. The Web provided a means

1. Market Pressure 2. New Values 3. Transparency 4. Technology 5. Partnerships 6. Long-Term Vision 7. TBL

The 7 RevolutĂ­ons toward Sustainability, according to John Elkington

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of boosting the impact on consumers of the change toward sustainability. In many cases, consumers preferred to pay a little more for “clean” products, that is to say, ones that, besides providing the manufacturers with a profit, were made in accordance with standards that protected the environment and created social value. In this way, brands associated with sustainability began to gain prestige, which in turn began to bolster the value of these companies’ shares. Similarly, investor interest in these firms increased, since sustainability had become an almost indispensable attribute in convincing those who sought to expand their capital by investing in a productive enterprise. But it was on the Web too that, with equal swiftness, voices were raised up against the new paradigm, especially through campaigns and protests organized by some earlier-mentioned NGOs, as well as through blogs which, now in their tenth year, number more than 70 million and encompass some 4.2 million active bloggers. Regarding the influence of growing consumer cyber-activism, Zed Digital, a firm specializing in marketing on the Internet, a few months back published a study in which it claimed that 44.1% of all bloggers in Spain had shown themselves to be

willing to change one of their habitual brand preferences if they were to read a negative comment about it on the Internet, adding that 41% of those surveyed had already done so . As power brokers, the new electronic media are currently growing by leaps and bounds. According to recent statements by geopolitical expert Ignacio Ramonet, Chairman and Editor of Le Monde Diplomatique, the Internet and bloggers are bent on becoming the “fifth power”: the citizen’s counterweight against the dominion of major media groups over the news. Internet is also a channel for the campaigns of NGOs like ATTAC, Clean Clothes Campaign, Free Burma, Friends of the Earth and No Sweat!, which exercise the kind of supervision at which governments have shown themselves to still be inefficient. Through this and other media, they demand that the private sector be held accountable for the social, economic and environmental impact of its activities. Many times the results of these campaigns are highly successful and achieve changes in the behavior of the productive sector. Proof of this is the business organization called PETA (People for the Ethical Treatment of Animals), which managed to get the world’s two leading soft-drink makers, PepsiCo and The Coca Cola Company (TCCC), to sign a written commitment

35


not to use animals in the testing of their products. And then there is the alliance between Coca Cola and WWF International (World Wildlife Fund International), by which the company pledged investment of 20 million dollars in a program aimed at three freshwater conservation objectives: 1) reduction of the amount of water used to make their beverages; 2) recycling of the water used in their manufacturing processes, and 3) replenishing of water in the communities and in Nature in the vicinity of its bottling plants.

In a survey, 44.1% of Spain’s bloggers said they were willing to change their product preferences based on negative comments on the Internet.

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Greenwashing or Real Change? The term “greenwash” stems from the word “whitewash” (which means to gloss over or cover up something) and is used pejoratively to describe certain marketing actions that some companies make use of in seeking to somehow compensate for other actions that have “soiled” their brand image, due to the negative impact of these actions on the environment. A number of environmentalist organizations have concentrated their efforts on exposing and denouncing “greenwashers”, to the point of actually creating rankings, such as America’s Ten Worst Greenwashers, which, in 2002, was led by the makers of Kraft’s Post Selects cereals for promoting their product as “natural” when they were, in fact, packaging “laboratory” cereals. Actions like those of the companies included in this ranking are easily qualified as “greenwashing”. Others are not so easy. Wal-Mart, the world’s largest corporation, with revenues of 315 billion dollars and more than 11 billion in profits for 2006, is frequently accused of non-sustainable conduct. In reaction to this, the chain recently launched a line of organic clothing and, in the process, became the world’s largest buyer of organic cotton. Simultaneously, Wal-Mart kicked off its Sustainability 360 plan, which projects annual investments of 500 million dollars with the aim of achieving a level of sustainable products equal to 20% of all products offered by its stores in just three years’ time. Whether this is a real change of values or another case of “greenwashing”, the fact that 100 million people a week are being invited to consume responsible products, and more than 60,000 suppliers to manufacture them, makes the impact of doing business in this way clearly predictable on a worldwide scale.


New Playing Rules Within this context, characterized by a market with consumers that not only have voice and vote, but also their own communications media —which they use to demand that companies change to more sustainable policies— the 100 New Global Challengers have flourished. This is a group of a hundred companies from developing countries, identified in a study by a Boston consulting group, which, besides providing jobs to more than 4.6 million people and generating profits of more than 715 billion dollars a year, have managed to stand out as leaders of the sustainable business movement. Major firms among them include: Cemex (Mexico), renowned for its work with neglected markets and its firm commitment to the communities where its plants operate; Natura (Brazil), a cosmetics company whose trademark is strongly linked to

sustainable development; and Petrobras, now rated on the Dow Jones Sustainability Index, the most highly used parameter today in the classification of responsible companies, from an economic, social and environmental standpoint. Running counter to this, the “conversion” or “re-conversion” of companies “born and raised” according to the old paradigm is not always easy. The change implies much more than adopting a new set of values that substantially alter a company’s culture and its way of doing business. It starts with assuming the fact that the world has changed radically and that, as the consulting group SustainAbility recently stated, there are new playing rules that companies have to apply in order to achieve sustainability without losing their competitive edge in the new global scenarios.

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1. Plan for the unexpected. Flexibility in the value chain, in technological platforms and in labor policies constitutes the new efficiency factor. 2. Find the True South. Don’t underestimate the importance of the emerging economies. There are regions where development is raging today at a dizzying pace. 3. Don’t wait for “the Big Guys” to take the initiative. Today even the most powerful companies are exposed to scandal and crisis. What is decisive is the capacity to create sustainable value. 4. Contribute to strengthening the Earth’s immune system. Bring intelligence and creativity to the search for solutions to environmental and social crises. 5.Think in terms of opportunities and innovation. Change the focus of environmental and social issues: Consider them major opportunities instead of risks. 6. Surpass yourself day after day. The challenges are huge and demand a radical change of attitude. Leaders must go out in search of new allies, models and solutions. 7. Be political. You have to get involved and take positions in conflicts.

The 7 Rules of the Sustainability Game, according to John Elkington


Sustainability Standards Economic Indicators The sustainable company is now a fact of life and it looks like it is here to stay. But how do you go about rating a company’s level of sustainability? Consultants and managers today apply economic, social and environmental indicators that respond to the Triple Bottom Line (TBL) concept. These are specific, usually quantitative indices that evaluate the impact of each business move, for the purpose of establishing its level of sustainability. Although the list and number of the indicators are variable, many are included in the majority of business platforms. Usually, these companies will adopt a platform of indicators and then gradually improve it in accordance with the circumstances they must deal with. A good example of this kind of flexibility is provided by the multinational, Hewlett-Packard (HP), which, after being investigated in 2006 for secretly spying on its executives to try and discover whether any of them had leaked information to the press, adopted privacy policies as one of the ratios in its Annual Sustainability Report .

Productivity Ratio. Wage and Benefit Level. Product Value/Environmental Impact Ratio (eco-efficiency). Investment in Research, Development and Innovation. Total taxes or contributions to the Public Administration. 40


Social Indicators

Environmental Indicators

Safety and Hygiene in the Workplace. No Gender, Ethnic or Age Discrimination. Level of Training among Human Capital. Satisfaction and Turnover Ratio. Impact on Social Development in the Local Community. Capacity to Influence Stakeholders in the Adoption of Like Values.

Use of Renewable Energy Resources. Use of Recyclable Materials. No Water, Air or Soil Pollution. Auditing of Processes Applied by Suppliers and Transporters. Respect for Biodiversity. Obedience of Environmental Laws.

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Sustainability Report and Social Balance Sheet

Business Associations Based on Values

The sustainability report is a tool through which companies disclose and measure the economic, social and environmental impact of processes implemented over the course of a particular year or other period of time. Promoted by the GRI (Global Reporting Initiative), it reports profits, investment and other information on the company’s economic and financial situation. Its aim is to detail the brand value or soundness of the company, by explaining the level of risk minimization achieved thanks to social, political or legal actions, and it may include —although this is not a priority— aspects linked to social responsibility. The social balance sheet, on the other hand, is a goodwill communication tool that focuses more on social issues and contains data which are certified by only a handful of organizations in the entire world.

The communications revolution and new technologies, coupled with constant public complaints being voiced by citizens and NGOs alike, alerted companies to the urgent need to get organized and to form associations, in order to face a variety of problems of the new millennium. Below are examples of three successful efforts to create business associations based on sustainability values.

The World Business Council for Sustainable Development (WBCSD) is a coalition of 180 international companies that are united in their commitment to sustainable development, based on the three pillars of economic growth, ecological balance and social progress. Founded at the Rio de Janeiro worldwide Earth Summit in 1992, today its members represent 35 countries and 20 strategic areas of business. The mission of the WBCSD is to provide business leadership as a catalyst for change toward sustainable development.

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Business Case Studies Appendices 1, 2 and 3 of this book include case studies of companies that have begun the change toward sustainability, with detailed information about each of them.

The Ethos Institute of Companies and Social Responsibility is a Non-Government Organization created in Brazil in 1998, whose mission is to mobilize, sensitize and help companies manage their businesses in a more socially responsible way, with the ultimate goal being to contribute to the building of a more sustainable and just society. The Institute’s more than 1,000 members have combined annual billings equal to 33% of the Brazilian GDP and they provide about one million jobs.

Appendix 1: Pioneer companies Starbucks The Whole Foods Market Patagonia Natura Ben & Jerry’s Appendix 2: Companies that Changed Toyota General Electric DuPont Home Depot Interface Nike Wal-Mart

Business for Social Responsibility (BSR) is an international not for profit business organization with headquarters in San Francisco and offices in Europe and China. It offers consulting services to 250 partner companies and to another 1,000 businesses around the world. Its mission is to contribute to the creation of a fairer and more sustainable world, by working together with companies to promote more responsible practices, as well as innovation and cooperation.

Appendix 3: Sustainable companies Nau Grameen Telecom Guayakí American Apparel Seventh Generation Sambazon

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The Ones that Made History Benchmarks, Inspirers and Pioneers

ELKINGTON, The Father

Chapter 3

among his classmates to donate to the World Wildlife Fund (WWF). And in 1978 he had already joined two colleagues —one of them Max Nicholson, co-founder of the WWF — in creating a firm called Environmental Data Services.

“As we move into the third millennium, we are embarking on a global cultural revolution. Business, much more than governments or NGOs, will be in the driving seat.” John Elkington

Dubbed by BusinessWeek magazine as “the dean of CSR (Corporate Social Responsibility)” for three decades, John Elkington is the author and co-author of 40 papers and 17 books that have sold millions of copies around the world. Most noteworthy among them, due to their status as “required reading”, are The Green Consumer Guide (1988) and Cannibals with Forks (1997). The Green Consumer Guide is a catalog of sustainable products that includes information for consumers regarding the manufacturers and stores that offer them. In this book, Elkington states that: “Every day, whether we are shopping for simple necessities or for luxury items, for fish fingers or fur coats, we are making choices that affect the environmental quality of the world we live in.”

The “Father of Sustainable Development”: such is the role that the specialized media attribute to John Elkington, the British sociologist and social psychologist born in 1949, who co-founded the first independent consulting firm devoted to sustainability. Its name: SustainAbility. This firm —which Elkington himself presided over from 1995 to 2005— has offices in London, Zurich, Washington D.C. and San Francisco, and counts such big names as Ford, Microsoft, Nike, Shell and Unilever (as well as other major multinationals worldwide) among its clients. But Elkington’s link to sustainability dates back to his childhood. He was only 11 years old when he collected contributions

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It was in Cannibals with Forks that the author introduced the revolutionary concept of the Triple Bottom Line (TBL). This refers to minimum levels of conduct surrounding three key concerns —profitability, planet and people— and to the possibility of introducing sustainable capitalism. Elkington says that “in a world where the natural order of things is for corporations to devour competing corporations...one emerging form of ‘cannibalism with a fork’ —sustainable capitalism— would certainly constitute real progress.” He further explains that the fork represents the TBL of sustainability and its three prongs, economic prosperity, environmental quality and social justice. Despite the fact that he orients his arguments more toward the environmental issue than toward economic and social concerns, the author makes it clear that uniting these three dimensions in a political agenda constitutes the main challenge to business in the 21st century.

issues, imaginative, innovative and entrepreneurial, that’s what we’ve got to ignite —or re-ignite where we’ve lost it.” John Elkington published his latest book, The Power of Unreasonable People: How Entrepreneurs Create Markets and Change the World, in 2008, this time with co-author Pamela Hartigan.

On his website at www.johnelkington.com, he states that we are at the beginning of a new era, in which entrepreneurs are at the head of sustainable development and that this makes them true agents of social transformation. He adds: “So I think, not just young people, but the youthful way of thinking about these

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SCHMIDHEINY, The Visionary

— some of them mortal. This was toward the end of the 1970s. Schmidheiny was sure that his father and predecessor at the head of the Group had been unaware of the noxious effects of asbestos when he decided to make use of it in the manufacturing of fiber-cement. Far from hiding his head in the sand, however, Schmidheiny ordered an investigation to establish whether or not the claims were valid and once it was established that they indeed were, he accepted responsibility in the damage suits against the company and pushed the firm to develop new technology that did not make use of asbestos in its processes. Meanwhile, his success as a businessman was on the rise. The young Schmidheiny showed avid interest in environmental issues and attended conferences on the subject. First he went to Stockholm, where he audited a major conference as an unregistered participant. But at the Rio Earth Summit in 1992, he established himself as a natural leader by convening other business people who actively participated in the event for the first time in history: Within the framework of the Summit, he founded the World Business Council for Sustainable Development (WBCSD), which produced a groundbreaking report called Changing Course, in which the term eco-efficiency

“Today there are 2.8 billion people —nearly half of Mankind— that live on less than 2 dollars a day. It is these people that we must include in a true and radical development process.” Stephan Schmidheiny The creation of social value is one of the goals most hardsought by Stephan Schmidheiny, the Swiss philanthropist and former industrialist who is as well known for his commitment to sustainable development as for his business successes. Born in St. Gallen in 1947, he holds a law degree and is a member of a veritable industrial dynasty in the construction materials industry. Shortly after assuming management of his family’s holding company, he had to face a conflict directly involving Eternit, the manufacturer of fiber-cement blocks enriched with asbestos, and one of the most important companies in the Group. The conflict stemmed from claims by former employees of the company’s plants to the effect that after inhaling the asbestos fibers, they had developed a wide variety of respiratory illnesses

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Furthermore, he figures that his role, like that of other business people, is decisive in the development process that Mankind requires, and explains: “When I entered the business world, my intention was to create economic wealth. But at the same time, I managed to create value for society, especially for those who were neediest, and to safeguard the options of future generations in the best way possible. I don’t see these objectives as incompatible or exclusive.”

was mentioned for the first time as an essential element in the successful development of companies in a world limited by dwindling resources. Since then, through the management of his businesses, Schmidheiny has gradually evolved into what he himself has defined as a “committed stakeholder”, while developing new forms of philanthropy. It was with this philosophy in mind that he established the AVINA Foundation in 1994. The organization originally provided support to Latin American social entrepreneurs so that they could move forward with their sustainable development-related projects. Currently, AVINA is devoted to creating networks and alliances among social and business leaders. It was based on these same premises that he created the VIVA Trust in 2003, an organization to which he donated all of his shares in his business conglomerate, GrupoNueva, with the aim of guaranteeing economic support to AVINA and other foundations committed to sustainable development in Latin America. Schmidheiny defines sustainable development as “not living beyond our means; not burning down our house to keep warm or sawing off the limb we’re sitting on; living on the interest and not on the capital”.

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DRAYTON, The Prophet “This is the most radical structural change I’ve ever seen. Once millions of people enjoy the freedom to generate a change every time they see a problem, who is going to stop them? If a person is frustrated, there will be hundreds of others looking at that problem in that community and looking for a solution. One of them is going to find it”. Bill Drayton Bill Drayton is credited with coining the term “social entrepreneur” to describe individuals who combine the pragmatic methods of the business entrepreneur with the goals of the social reformer. Whether he is the author of the term or not, no one can question the major role in the field of sustainability of the founder and chairman of Ashoka, a not for profit association devoted to providing financial support to entrepreneurs around the world. Born in New York in 1943, Drayton was already heading up a series of social initiatives in his youth. While attending secondary school, he founded the Asia Society and turned it into one of the most powerful student associations ever known. At about that same time, he joined the NAACP (National Association

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for the Advancement of Colored People), an organization for the defense of minority rights in the United States. At Harvard University, where he graduated in 1970, he founded the Ashoka Table, a forum for dialog between students and leaders in government and industry. While studying Law at Yale, he created the Yale Legislative Services, an initiative to allow university students to collaborate with American lawmakers in developing legislation. By the time he graduated, he had managed to involve a third of the students at Yale Law in this project. Drayton worked for ten years as a consultant for McKinsey and Company. Under the Jimmy Carter Administration (1977-1981) he was Assistant Administrator for the Environmental Protection Agency (EPA). He also worked for a short time on the White House staff. It was in 1980 that he launched Ashoka, an organization that he started up with initial capital of 50,000 dollars and that now finances thousands of social entrepreneurs worldwide. In 2007, the organization had funds of over 30 million dollars, having financed more than 1,600 enterprises in 60 countries. “Within five years,” says this true fanatic of the transforming power of entrepreneurs on the road to the sustainability paradigm, “more than 50 percent of the Ashoka Fellows changed national


RODDICK, The Provocateur

policy in their respective countries. And nearly 90 percent saw independent organizations copying their innovations.”

“For me, campaigning and good business is also about putting forward solutions, not just opposing destructive practices or human rights abuses.” Anita Roddick

Bill Drayton maintains a frugal lifestyle and, for many years, he carried out his work for Ashoka ad honorem. Besides chairing Ashoka, Drayton is also currently active on the Board of Get America Working!, a not for profit organization whose aim is to create new jobs by generating structural changes in US economic policy. He also cooperates with Youth Venture , an association that seeks to create entrepreneurial awareness among youth, while imbuing young people with confidence in their capacity to lead social change.

She once said her favorite quote was the one by Dorothy Sayers: “Time and trouble will tame an advanced young woman, but an advanced old woman is uncontrollable by any earthly force.” Be that as it may, at age almost 65, Anita Roddick was still defining herself as “the new girl on the block”. Born in Littlehampton, England, the founder of The Body Shop first studied to be a teacher and then decided to see the world, before she met Scotsman Gordon Roddick, who in 1970 was to become her husband and the father of her daughters. In 1976, Gordon began a journey across the Americas on horseback, and in order to keep the wolf from the door, Anita decided to open a little cosmetics boutique. “I had no training or experience,” she once said, “and my only business acumen was Gordon’s advice to take sales of 300 pounds a week.” But it wasn’t just economic need that fostered the emergence of The

50


Body Shop: “It upset me to find out that a large part of the price of cosmetics went into packaging that was as sophisticated as it was unnecessary. I was also upset by false advertising that promised miracle remedies and had pictures of 16-year-old girls promoting anti-aging products for women in their 50s ”. Anita’s personal experiences served as an inspiration for company values that became brand assets and included the rejection of animal testing, the use of natural ingredients, recycling of containers and protection of the environment. Six months after opening her first shop, she opened a second one. And when Gordon got back from his travels, he also joined the firm and promoted its worldwide expansion. By 1984, the company had branches throughout Europe and was being quoted on the Stock Exchange, turning the Roddicks into multi-millionaires. The couple used their success to promote sustainable development and initiated a campaign whose slogan was: “what’s good for the community and the world, is good for business.” Within this framework, The Body Shop developed its Green Pharmacy project in cooperation with native communities in the Amazon. Believing that it was necessary to help these tribes preserve their culture, Anita began to market the seeds that the

Amazonian natives gathered in the rain forest. Although the subsequent trade relations turned out not to be as simple as she had expected, they have lasted until the present day and have led to the development of medications based on jungle plant species. The Body Shop similarly promoted campaigns in favor of fair trade with the Third World, like the one developed with the Chepang indigenous people of India for its Ayurvedic line, or in Nicaragua with that country’s sesame seed oil producers. Striking out at costly marketing strategies, Anita Roddick maintained that “our growth has always depended on our reputation and word of mouth, not mass advertising.” According to analysts, this way of thinking had a real impact, since achieving what she did through reputation alone would have required investment of 96 million dollars a year using traditional marketing strategies. In 2000, Anita published her autobiography entitled Business as Unusual, and in 2001, a collection of essays called Take it Personally, in which she analyzed the myths regarding globalization and the role of the World Trade Organization (WTO). That same year, she launched her personal website

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ANDERSON, The Revolutionary at www.anitaroddick.com. Later she created her own communications company, Anita Roddick Publications, which in 2003 published its first two titles: Brave Hearts, Rebel Spirits: A Spiritual Activist’s Handbook and A Revolution in Kindness. In March 2006, L’Oreal bought The Body Shop for 652.3 million pounds sterling, a fact that stirred a certain amount of controversy, since the acquiring firm had been accused of animal testing for its products. Anita Roddick died in September of 2007, just two years after retiring from business and donating her fortune to “just causes”.

“Global warming is coming like a runaway freight train. Time is against us, given Humankind’s tendency to deny and cling to the opiate of the status quo. Biodiversity is plummeting. Our human footprint is growing and the planet’s carrying capacity is shrinking, consumed by our unsustainable appetite for stuff.” Ray C. Anderson It wasn’t until he was 60 years old that Ray C. Anderson began to see the world in a different light. The West Point, Georgia-born industrial engineer, founder and Chairman of Interface Inc., a leading carpet manufacturer headquartered in Atlanta, places the exact moment of that change in August of 1994. It was as he was preparing a speech regarding his vision on the environment for a group of business people from around the world. For some time, his clients had already been questioning him about what his firm was doing for the planet and the only thing the founder could think to say was: “We comply with the law.” As he was putting together his presentation, however, he suddenly realized that he didn’t really have any vision regarding the environment. And then a book appeared on his desk that was to radically change his way of doing business:

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Paul Hawken’s The Ecology of Commerce, a work that Anderson himself has referred to as an “epiphany” and “a spear in my chest that remains to this day”, and the catalyst that brought him to the decision to devote his life to sustainability. With this goal in mind, the businessman held a meeting with the directors and executives of his company and announced the firm’s new mission: to turn Interface into the world’s first sustainable industrial company. The change implied a constant effort to reduce the impact of the carpet-maker’s activities on the environment. It also meant being willing not to take anything out of the earth that couldn’t be renewed. This was a true challenge for an industry that depended almost entirely on petroleum for its livelihood. The first step was to start research and development work in order to find new production methods. The second was to introduce ways of generating “green energy” such as solar panels and wind and biomass energy. The third was to try different types of recycled materials and experiment with new raw materials for the firm’s products. The final step was to reduce waste and greenhouse gas emissions.

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GRAJEW, The Benchmark

In 1999, Anderson published his book entitled Mid-Course Correction. Toward a Sustainable Enterprise: The Interface Model. The book recounts the process from his discovery of sustainability to his declaration of activism for the cause, and explains his company’s framework for doing business. In its pages, the businessman dares to confess: “I am a plunderer of the earth and a thief today, a legal thief. The perverse tax laws, by failing to correct the errant market and force it to internalize those externalities such as the costs of global warming and pollution, are my accomplices in crime. I am part of the endemic process that is going on at a frighteningly accelerating rate worldwide to rob our children and their children, and theirs, and theirs, of their futures”.

“We are all consumers and, as such, our wishes to support those products or services that come from companies working with the criteria of social responsibility can be made heard. Since the immediate goal of corporations is profit, we must ensure that the companies with the highest profits are those that take into account the future of the new generations.” Oded Grajew One of Oded Grajew’s most recent victories was having got the steelmakers of the states of Maranhao and Pará to sign a commitment to abolish slave labor in their production chain. No mean achievement for the world, or for this electronics engineer born in Tel-Aviv, who later became a naturalized Brazilian citizen, a man who began his business career as a toy manufacturer and who didn’t rest until he had become a benchmark figure in the world of corporate responsibility. Grajew says that from the very outset of his career, he was always concerned about what was happening to the Earth. In 1987, he founded Pensamento Nacional das Bases Empresariais (National Thought for Business Bases), an organization initiated with

Anderson’s philosophy and actions have turned Interface into one of the companies that is most highly recognized for its commitment to the business movement toward sustainability and its founder is considered one of the world’s leading “green businessmen”. Today, Anderson travels the world spreading the Interface example far and wide and promoting the benefits of sustainability. In 2006 alone, he gave more than 115 conferences.

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the aim of changing the mindset of Brazilian business people. In 1990, he created the Abrinq Foundation (originally linked to the Brazilian Association of Abrinq Toy Manufacturers), an NGO that works with UNICEF to improve the living conditions of children in Latin America. The institution has 2,500 member companies and its main fight is for the elimination of child exploitation. But Grajew’s reputation as a referential figure in the field of corporate social responsibility came with the creation in 1998 of the Ethos Institute, a not for profit association whose purpose is to promote an awareness of social responsibility in the private sector. This organization, which Oded Grajew has presided over since its founding, today has more than 887 corporate members —small, medium-size and large companies from all economic sectors and regions of the country— whose joint revenues total more than 110 billion dollars (about 30% of Brazil’s Gross Domestic Product) and which jointly employ more than 1.5 million workers. Additionally, the Ethos Institute is a founding member of EMPRESA, a network of organizations throughout the Americas that seek to promote CSR . In 2000, after several failed attempts to get the topic of CSR onto the agenda of the World Economic Fund that each year brings together the world’s most prominent business people and bankers

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CHOUINARD, The Explorer

for a meeting in Davos, Switzerland, Grajew decided to organize the World Social Forum (WSF). With the support of such renowned social proponents as Francisco Whitaker (a member of Brazil’s Conference of Bishops) and Bernard Cassen (Editor-inChief of Le Monde Diplomatique), the WSF burst onto the scene in January 2001 with its first meeting in Porto Alegre. Since then, it has established itself as a meeting of worldwide importance and is held each year in a different city, with thousands of individuals and social organizations taking part. The “people power” concept is the basis for Grajew’s strategy to attain change among business people: “If you take adequate measures, you are really going to benefit, but if you don’t, you could end up in serious trouble”. Here, two basic principles come into play: the desire to do the right thing and fear of the company’s developing a bad name among consumers. Toward the end of 2006, Oded Grajew acted as an advisor to Brazilian President Luiz Inácio ‘Lula’ da Silva, becoming a driving force behind a series of social programs —like the socalled “Zero Hunger” Plan— while promoting dialog between the government and business. He is currently at the head of the Ethos Institute, developing a powerful campaign to eliminate slave labor in companies throughout Latin America.CH-

“In many companies, the tail (finance) wags the dog (corporate decisions). We strive to balance the funding of environmental activities with the desire to continue in business for the next hundred years.” Yvon Chouinard An enthusiastic mountain-climber, outstanding surfer, fisherman and kayaker: that’s how Yvon Chouinard, who became a businessman as the sort of natural outcome of these fond interests, defines himself. Born in Maine, USA, in 1938, Yvon was already considered one of the best climbers in the Americas by the time he was in his early twenties. It was in 1957 that he decided to manufacture his own line of climbing equipment, as a means of financing his trips and saving money. The first product that he launched on the market was steel climbing stakes. The success of his sales led him to found his own firm called Chouinard Equipment for Alpinists (CEA). At the end of the 1960s, together with his climbing and business partner, Tom Frost, he redesigned the basic tools (crampons and ice axes) for climbing sheer ice. However, in 1970 Chouinard discovered that the stakes his

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company was making were causing significant damage to the crevasses of Yosemite. In order to prevent this, he introduced tools made of aluminum and created a style of mountaineering called “clean climbing”, a concept that revolutionized rock climbing. A year later, he married Malinda Pennoyer, an art student at the University of Fresno, and in 1972 , he founded Patagonia Inc., a company devoted to the designing and manufacturing of outdoor clothing and accessories and considered to be a pioneer in socially responsible policies, defense of the environment and the creation of a sustainable enterprise model.

going up the stairs two steps at a time. We needed to be surrounded by friends who could dress whatever way they wanted, even barefoot. We needed to have flex time to surf the waves when they were good, or ski the powder after a big snowstorm, or stay home and take care of a sick child”.

In 2005, Chouinard wrote a book entitled Let My People Go Surfing, a sort of autobiography in which, besides recounting his personal life, he also told the story of Patagonia, the company’s philosophy and founding principles, and formulated an insightful reflection regarding the future of the Earth and the current system for doing business. In the pages of this book, Chouinard also explains that one of the fundamental concepts with which he wished to imbue his company was that work and pleasure go together: “There was one thing that I did not want to change,” he writes. “Work had to be enjoyable on a daily basis. We all had to come to work on the balls of our feet,

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SEABRA, The Philosopher

Particularly noteworthy among Patagonia Inc.’s values is product quality, which in the firm’s view means durability, minimal use of natural resources —including materials, energy and transport— multi-functionality, non-obsolescence and the kind of beauty that comes from a thing’s being fully adapted to its purpose, since bowing to fashion trends does not fit into the company’s set of values. A prime concept in the company is transparency in dealing with its employees and in its position within its business community, comprising its personnel, the members of society where the firm operates, its suppliers and its clients. So in order to mitigate any of the negative effects the company’s activities might have on the environment, its shareholders donate 1% of the firm’s gross revenues or 10% of its profits —whichever is the larger sum— to ecological activism.

“We are convinced that the spirit of the times, what is looming large on the horizon, are companies with that more human, more integrated side and that more holistic way of seeing their relations and functions in society. Such companies will shine and be admired and, at the same time —let’s not forget this— will be giving their shareholders greater earnings.” Luiz Seabra When he was 16 years old, Antonio Luiz Da Cunha Seabra stumbled onto an idea that turned into a revelation: “Man is part of everything and everything is part of Man.” From the very first time that he heard this principle, first expressed by the ancient neo-Platonic philosopher Plotinus, that notion of “being part of everything” never left him. Luiz Seabra is the founder of Natura, the largest cosmeticsmaker in Brazil. Having earned a degree in Economic Sciences, he got his first job in cosmetics back in the 1960s, when he worked as the administrator of a small laboratory in Sao Paulo. He spent three years learning the secrets of the trade and, in 1969, decided to start his own company, Natura,

In Let My People Go Surfing, Chouinard is extremely critical of business, the US government system and consumer society and concludes that: “Now, more than ever, we need to encourage civil democracy by speaking out, joining up, volunteering or supporting these groups financially, so as to still have a voice in democracy”.

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which first opened as a tiny shop with an initial investment of 9,000 dollars. The store offered beauty advice and product recommendations, a fact that quickly contributed to the creation of direct and personalized relations with the clientele. Based on this experience, Seabra decided in 1974 to adopt a direct sales system, and this became one of the keys to his success.

Being at peace with our bodies and with our time changes our hearts and our consciences”. It is Seabra’s view that, in the future, the key to success for any business will be its capacity to generate an image of credibility on the market and among consumers. Convinced as he is that the world is going through a major change in which sustainability is a concept that is gaining greater acceptance every day among business people, the creator of Natura maintains: “It is such a fragmented world that economic benefits are dissociated from fundamental values. But we do not agree with that separation. We are living in a new era that is just dawning, in which the human being is, to an ever greater degree, what makes sense of things. Although we coexist with technology, which frequently bewilders us, we are discovering that the human factor is what gives life. The human factor is the only thing that can transform the planet into a better place. This type of vision is not the exclusive privilege of Natura. It is, in all reality, our way of seeing the world”.

En 1991, Natura started structuring its marketing campaign around the concept of transparency. Its slogan was “Truth in Cosmetics”. When the firm launched its campaign for its Chronos anti-aging cream in 1992, it didn’t make use of models, but brought in real clients over the age of 30. Guillermo Leal, President of Natura, said at the time: “We have a commitment to our clients and we’re not going to lie by telling them that if they buy our products they’ll look like Claudia Schiffer”. Seabra explains that Natura’s mission is to get people to feel better about themselves and, by extension, to make the world a better place to live. “For Natura Cosmeticos,” he says, “sustainable development comes as second nature. It’s just like a person thinking of their skin. Cosmetics enable people to become more intimate with their own bodies. And once that’s happened, people no longer have any desire to make war.

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AMAZON

BLOGS

CELL_PHONES

CITIZEN_JOURNALISM

CLUETRAIN

COLLABORATION

COLLECTIVE_

INTELLIGENCE COMMUNITY CONNECTIVITY CONVERSATION CREATIVITY DEL.ICIO.US DIALOG DIGG DIGITAL DYNAMISM E-COMMERCE ENTERPRISE ENTERTAINMENT FACEBOOK FLASHMOBS FLICKR FOLKSONOMY FREE_SOFTWARE GOOGLE HYPERLINKS IDENTITY IM LANGUAGE LINUX MEDIA MYSPACE DIGITAL_NATIVES NET_GEN NETWORKS ORKUT P2P PARTICIPATION PERSONALIZATION PROSUMERS RESOURCES RSS SETH_ GODIN SOCIETY SOCIAL_NETWORKS STAKEHOLDERS TAG TECHNOLOGY TIM_O’REILLY TOOLS TRANSPARENCY US USER USER_GENERATED_CONTENT VIDEOS VIRAL_MARKETING VIRTUAL WEB_2.0 WIKI WIKIPEDIA WIRED YOUTUBE AMAZON BLOGS CELL_PHONES CITIZEN_JOURNALISM CLUETRAIN COLLABORATION COLLECTIVE_ INTELLIGENCE COMMUNITY CONNECTIVITY CONVERSATION CREATIVITY DEL.ICIO.US DIALOG DIGG DIGITAL DYNAMISM E-COMMERCE ENTERPRISE ENTERTAINMENT FACEBOOK FLASHMOBS FLICKR FOLKSONOMY FREE_SOFTWARE GOOGLE HYPERLINKS IDENTITY IM LANGUAGE LINUX MEDIA MYSPACE DIGITAL_NATIVES NET_GEN NETWORKS ORKUT P2P PARTICIPATION PERSONALIZATION PROSUMERS RESOURCES RSS SETH_ GODIN SOCIETY SOCIAL_NETWORKS STAKEHOLDERS TAG TECHNOLOGY TIM_O’REILLY TOOLS TRANSPARENCY US USER USER_GENERATED_CONTENT VIDEOS VIRAL_MARKETING VIRTUAL WEB_2.0 WIKI WIKIPEDIA WIRED YOUTUBE AMAZON BLOGS CELL_PHONES CITIZEN_JOURNALISM CLUETRAIN COLLABORATION COLLECTIVE_ INTELLIGENCE COMMUNITY CONNECTIVITY CONVERSATION CREATIVITY DEL.ICIO.US DIALOG DIGG DIGITAL DYNAMISM E-COMMERCE ENTERPRISE ENTERTAINMENT FACEBOOK FLASHMOBS FLICKR FOLKSONOMY FREE_SOFTWARE GOOGLE HYPERLINKS IDENTITY IM LANGUAGE LINUX MEDIA MYSPACE DIGITAL_NATIVES NET_GEN NETWORKS ORKUT P2P PARTICIPATION PERSONALIZATION PROSUMERS RESOURCES RSS SETH_GODIN SOCIETY SOCIAL_NETWORKS STAKEHOLDERS TAG TECHNOLOGY TIM_O’REILLY TOOLS TRANSPARENCY US USER USER_GENERATED_CONTENT VIDEOS VIRAL_MARKETING VIRTUAL WEB_2.0 WIKI WIKIPEDIA WIRED YOUTUBE INTELLIGENCE COMMUNITY CONNECTIVITY CONVERSATION CREATIVITY DEL.ICIO.US DIALOG DIGG DIGITAL


The Participative Media and Web 2.0


The Conversation Age

Chapter 4

Digg is a news site that appeared in 2004 with the promise to provide its users with complete editorial control over its content. In 2007, its community demonstrated the strength with which it had adopted that power. Somebody uploaded an article that revealed the code for copying protected DVDs.

or comments containing the code and will deal with whatever the consequences might be.” Sites like Digg reveal the existence of a new generation of participative individuals that take possession of information rather than passively receiving it. They seize it, share it, recommend it and cooperate in the creation of contents. This is a new generation of individuals that make the tools of Web 2.0 their own.

Since the publishing of this content failed to respect the anti-piracy laws of several countries, Digg’s managers decided to remove it from the site. But the site’s users quickly began to upload the code again and vote on it, until the controversial information was contained in multiple entries on the main page. The news spread like wildfire through the blogosphere, reaching YouTube and such major print media as the New York Times and El País. Finally, Digg’s Executive Director, Kevin Rose, surrendered and wrote: “You’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company.

This and other signals indicate that global society is in the early stages of what might be referred to as a communications media revolution that is as important as the one that Gutenberg’s printing press fostered in 1448: the birth of the participative media. The era of the mass media, established in the 20th century, is in the throes of a terminal crisis. Well-known and dazzling technological advances are producing crucial changes in the way in which people connect with information and communications.

We hear you, and effective immediately we won’t delete stories

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Web 2.0: A Series of Disruptions When Doc Searls, Rick Levine, Chris Locke and David Weinberger published their 95 theses in a book called The Cluetrain Manifesto, back in 1999, there was no need for them to nail it on the door of Wittenberg Cathedral as Martin Luther had done with his 95 when he initiated a sweeping cultural reform in 1517.

If the authors of The Cluetrain Manifesto were somewhat ahead of their time, history swiftly proved them right. At the end of the ‘90s there were thousands of portals on the Internet that employed the same mechanisms as traditional media: unidirectional messages for mass audiences. That is, until the dot com bubble burst in 2001, marking a turning point in the history of the Web. Many concluded that the scope of the Internet had been overestimated. The fact is that thousands of portals disappeared and all that survived were the sites, software and proposals that conformed to what analyst Tim O’Reilly, in 2004, would refer to as the Web 2.0. Web 2.0 implies understanding the Web as a dynamic platform that is constantly changing and evolving. It allows people to use applications that are in a network, not on their computer desktops. It also permits them to connect from different support mechanisms, such as cell phones, and not just from their PCs. It promotes intuitive relations between individuals and information and the appearance of content created by users and social networks.

Immersed in the Web 1.0 paradigm —big static sites that were attempting to capture mass audiences— this Manifesto identified the trends that would lead to a participative Web and told how these changes would affect the markets, consumers and companies. “Markets are conversations,” stated these authors, considered to be veritable gurus in the cyber-information field. They said that the motivation for ever-increasing numbers of people to adopt the Internet on a massive scale was the need to get together with one another. First, then, they needed to converse, and the tools that made this possible didn’t take long to arrive on the scene and to be perfected.

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• Facebook, a network of university students and other social networks brought together people in communities surrounding common interests. • Blogs, born as a simple publishing medium, also gave birth to conversations without filters. • YouTube, a site on which to upload and share videos, achieved a larger audience than the CNN news network.

Be that as it may, Web 2.0 is not a revolution in itself, but a platform for a series of disruptions. • Wikipedia, the on-line encyclopedia written by its users, surpassed Encyclopaedia Britannica in quantity and quality of articles and gave substance to the concept of collective intelligence.

Web 1.0

Web 2.0

Static Publication

Syndication of Contents

Mass Messages

Personalized Content

Passive and Isolated Audience

Participative and Interconnected Users

News Sites

Blogs and Civil Journalism

Unidirectional Message

Conversations

Centralized Networks

Distributed Networks

PC Supported

Multiple Supports

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A Manifesto for a New Day 12 of the 95 Theses in the Renowned Cluetrain Manifesto

1. Markets are conversations.

2. The Internet is en abling conversations amon g human beings that were simply not possible in the era of mass media.

ersations are 3. These networked conv forms of enabling powerful new knowledge social organization and exchange to emerge.

4. There are no secrets. ows The networked market kn about more than companies do their own products. good And whether the news is . ne or bad, they tell everyo

5. In just a few more years, the current homogenized “voice” of business—the sound of mission statements and brochures—will see m as contrived and artificial as the lan guage of the 18th century French court. 6. Companies need to lighten up and take themselves less seriously. They need to get a sense of humor.


or does ense of hum s a g in tt the e 7. G e jokes on m o s g in tt u quires not mean p Rather, it re . e it s b e w ity, corporate little humil a , s e lu a v big uine , and a gen lk ta t h ig a tr s w. point of vie 8. To speak with a hu man voice, companies m ust share the concerns of their communities.

9. There are two conversations going on. One inside the company. One with the market.

10. We are immune to advertising. Just forget it.

make 11. Don’t worry, you can still not money. That is, as long as it’s . the only thing on your mind

12. We are waking up and linking to each other. We are watching. But we are not waiting.


What is important about these changes is not what is tangible – the Web 2.0 architecture – but the role of this technology as the facilitator in generating a series of cultural changes.

has made it possible to share information in another way. This was how sites like Flickr and del.icio.us were born. Based on “folksonomy” instead of taxonomy (the art of classification), they additionally permit “social bookmarking” – a personalized system of flagging content that can be shared among users.

At the end of 2006, for its traditional Person of the Year Award, TIME Magazine chose The Internet User. In other words, “us”. The blog, for example, is a publication tool that permits daily updates, syndication, readers’ comments and links to other sites. The result of these different forms of interaction is the so-called “blogosphere”, currently made up of 70 million blogs (and counting) that generate a constant on-line conversation regarding a wide variety of topics. Another technological innovation that has had an enormous impact is RSS (Really Simple Syndication), which allows readers to subscribe to pages and notifies them when these pages change. But that’s not all. Thanks to a system of permalinks, each entrance to a blog has its own permanent link, a detail that becomes fundamental in making “conversation” between blogs possible. Web 2.0 is not merely more dynamic. It’s alive! The introduction of a content classification method based on tags or key words chosen by the user is another innovation that

WE MEDIA COMMUNITY BUSINESS 2.0 NETGEN WEB 2.0 FOLKSONOMY BLOGOSPHERE MESSAGE COMMUNICATION PARTICIPATION CHAT COOPERATION INTERNET PLANET CARE RESOURCES SUSTAINABLE RELATIONS AFFINITIES

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Tags


Onward toward Web 3.0

The Architecture of Conversation (BusinessWeek, April 2007)

Message Regarding the Web 2.0 trends, specialists and detractors alike agree that the groundwork for Web 3.0 has already been laid. The accent in this transition would be away from the “Me Media” (blogs and personal pages) toward a true conversation, a deep-reaching We Media.

Experience

Conversation

In ancient times, a rich oral culture developed. In those days, men gathered and talked. Experience made sense when shared with others.

Relations

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Communities

The use of new technologies and the cultural changes that they are generating make the word “communication” start to respond more and more to the etymology of its Latin root, communicare, which means “to share and to make common”. At some point between the Middle Ages and the Modern Era, the word communication began to be used more in the sense of “transmitting” than “sharing”. This meaning began gaining ground until, in the 20th century, newspapers, radio and television generalized this definition. People grew accustomed to passively receiving messages. An example of this passivity is the image of an entire family sitting in front of the television set. Just the opposite of what Web 2.0 proposes.

Affinities


The Evolution of Traditional Media to Participative Media Advances in information technology have accompanied our changing habits. The mobile telephone was invented in 1971, but most homes still only had one telephone. In the 1980s, CNN began to air news 24 hours a day and MTV invented a new language for adolescents. The PC arrived on the scene and the fantasy of having a computer in every home started to become a reality.

In 1994, Yahoo became the icon of Internet access for millions of people. There began the era of e-mail, e-commerce and the chat. Major companies replicated the experiences of the mass communications media on the Web, creating static sites for large, passive audiences.

Start session

1971 1976 1980 1981 1982 1992

Mobile Telephony Apple Computer CNN MTV IBM PC Linux

1994 1995

Yahoo Amazon.com Hotmail.com Craiglist Wikis ICQ Google The Cluetrain Manifesto

1996 1998 1999 2003

The Cluetrain Manifesto was published in 1999. When the dot com bubble burst in 2001, it marked the advance of user-generated content and participative media. A new era had begun: the era of Web 2.0.

2004 2005

Ohmy News Del.icio.us Nike + Vblog: Rocket Boom Firefox Flickr (bombs over London) YouTube Skype


2000 2001 2002

2006

2007

Napster: first P2P software BlackBerry Microsoft employees begin blogging iPod Wikipedia Blogger Lastfm RSS Google buys YouTube News Corp buys MySpace Second Life Evolution of Dove: viral marketing Virtual Campaign for Chevy Tahoe Digg Users Revolt Facebook opens its Platform Twitter


The Network Generation

Chapter 5

most intimate friends, she constantly exchanges cell phone text messages. Julián is 17 and lives with his parents and three brothers in a working class neighborhood in Buenos Aires Province, Argentina. As soon as he finished high school, he began working as a messenger in a telecommunications firm. Since his passion is music, with his first pay, he went into Mercado Libre (an e-commerce site) and bought himself an mp3 player so he can listen to his favorite groups while he travels from place to place. On the weekends, he rehearses with a rock band, in which he is a percussionist. He and his buddies in the band opened a space in MySpace in which to upload some of their songs and another one in Fotolog, where they post pictures of their shows and announce the dates of their upcoming gigs. Every afternoon, before returning home from work, he spends an hour at a cyber-café, where he can chat, visit his friends’ personal pages, post comments, watch funny videos on You Tube and read the day’s news. On the train ride home, he exchanges text messages with his girlfriend on his cell phone.

Erica is 16, an only child, who lives in Sao Paulo, Brazil. She has a Mac in her room, a broadband connection and an iPod that’s well stocked with music. Like her teen-aged friends, Erica never knew the world without Internet. For her, information obtained from the mass media has a value equivalent to amateur or alternative media. She listens to a song by Britney Spears followed by one by a British Indie group without any prejudice whatsoever. She puts in very few hours in front of the TV set, but never misses an episode of Lost, her favorite television series. She also watches Japanese Anime, which she downloads using BitTorrent (a technology for sharing files). Much of the music on her iPod she bought through iTunes, but her friends also copied it. She only listens to the radio when she’s riding in the car with her parents and she never reads print newspapers. Erica spends the greatest part of her free time connected, chatting with her friends. Many of them can be found in Orkut, a social network where she has posted her profile and where her acquaintances leave her their comments. With her

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Getting to Know the Net Gen

sending e-mail and why too they find the morning newspaper —the one actually printed on paper— an anachronism. A study carried out in the United States in 2006 revealed that adolescents there spend 72 hours a week using electronic media – including the Internet, cell phones and videogames. The same study shows that 68% make use of social networks in order to connect with their friends.

Erica and Julián belong to the Net Gen, a generation of networked individuals who learn, think, buy, believe and relate in ways that are different from those of their parents. While the previous generation grew up reading newspapers, listening to radio and watching television, they sit in front of their computers, interacting and participating. With the tools that Web 2.0 has placed at their disposal, they create and give shape to new worlds. These tools are not neutral, however. Thanks to them, the youth of this generation have unprecedented power over the communications media at their fingertips. What remains to be seen is whether they will use this power to defend their right to exchange a code that facilitates intellectual piracy —as in the case of Digg— or if they will make the media their own in order to improve the society they live in. According to the definition set down by Don Tapscott, who provided the first detailed report on them in his book, Growing up Digital, the young people of the Net Gen were born between 1977 and 1996 and have entered or are about to enter the job market. They are fast and can handle several tasks at a time: for example, watching TV, downloading music on the Internet and doing their homework. They live in real time. That’s why they chat or send each other IMs (instant messages) instead of

A Change of Habits TV

Internet

Media Controlled by the Adult World

Provides Greater Control to Youth

Passive Observers

Interactive and Participative Users

Mass Sales Messages

Google AdSense

Technology Implies Hierarchy Technology Gets Distributed: Free Software

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on-line role-playing —as in World of Warcraft — is a favorite pastime with the Net Gen. Here, participation generates an internal system, among players, of reputation and parallel communities. Contrary to what happened with videogames (like Pac-Man) in the generation before, the participants do not become isolated, but must establish relationships with other individuals. These traits have led to talk of a coming generation of socalled Co-Prosumers —consumers and producers rolled into one— since the Net Gen tries to personalize everything. When they don’t like something, they change it. And this may mean anything from an open software code to the stamp on a t-shirt that can be purchased on an e-commerce site. In point of fact, the Web is already hosting sites that invite users to send in their own t-shirt designs and those most voted for are produced and sold through the same platform.

“These millions of children are combining demographic muscle and digital mastery to become a force for social transformation”. Don Tapscott Immersed in a logic of sharing and interaction, the Net Gen youth eliminate any mediators that might stand between them and the information. In fact, they were the first ones to adopt and contribute to the creation of Wikipedia, the world’s largest encyclopedia, and also to adopt P2P (peer to peer) software, that permits the exchange of files between computers via the Net. These young people’s unexpected use of the Internet forced ISPs (Internet Service Providers) to modify their structures: The youngsters wanted to upload as fast as they downloaded. They were, in other words, as interested in publishing content on the Web as they were in downloading it. A well-documented example of this creativity is found in Second Life, a virtual world created totally by its users, in which 65% of its 3.6 million inhabitants are between the ages of 18 and 35. Virtual worlds express the playful nature of the Net Gen. For this generation, almost everything must be entertaining. Mass

Meanwhile, they are also experimenting with new ways of taking real action in the world. Take, for example, the flashmob: A flashmob is a group of people that agree by digital means to meet in a certain public place and do something apparently innocent, like having a pillow fight.

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A Neo-Renaissance?

Theorists use many names to define the same thing: The Y Generation (the one after the X Generation), Millennials, MyPod Generation (a reference to MySpace and iPod), and the earlier mentioned Generation C (Gen C ), defined by the American Press Association’s Media Center as “creating, producing and participating in news in a connected, informed society.”

with their families, their friends, their neighbors, their university classmates. Facebook, the network created in 2004 by Mark Zuckerberg, a 23-year-old entrepreneur, to link up Harvard students, is an example of the strength of on-line communities. By February of 2007, this community had 25 million members (it is no longer just for university students) and was expanding its business model.

The Net Gen seeks to express itself through photos, texts, videos and music. And it has its own motivations for this. The media and technological firms, meanwhile, are giving these young people the tools they need, pushing the democratization of creativity. The BBC, for example, gives free on-line courses on how to film documentaries. Apple’s IMovie was one of the first easy-to-use film-editing software tools. The latest advance is Jumpcut, a simple software tool that uses the Web as its platform and enables users to create videos with photos and upload them from other sites, like Flickr or Facebook.

C

But the term Gen C also has other meanings. Tomi T. Ahonen and Alan Moore, co-authors of the book Communities Dominate Brands, define the motivation for forming communities as being another key Net Gen trait. They want to be connected:

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Control Content Connected Collaborative Community Communication Creativity Credibility Consensus Celebrity


Shared Secrets

On the Internet, the Net Gen shares everything with strangers —their performance in school, professional progress, political opinions, their desires, the items they consume and their fears. They also publish their personal photos and tell the stories of their lives in blogs and photologs— a fact that tends to scare adults. It’s that the members of this new generation value their personal identity over their personal privacy. During the greater part of the history of Mankind, privacy was a “luxury” to which only the elite of society had access. People lived in villages, where it was difficult to keep secrets, since, generally speaking, everybody knew everybody else. In the 20th century, the concentration of populations in major urban areas provided the possibility of greater intimacy – and anonymity. Thanks to our level of comfort and technology, we can now spend weeks on end in our houses with no need even to relate to our neighbors. Despite this fact, the need of human beings to interact with others has remained part of the very make-up of people. The community spirit, the desire to be recognized by others, prevails, whether a person lives in a city of 10 million people or in a small rural community. From this point of view, it comes as no surprise that, with the adoption of Web 2.0 tools, human beings have “come out” once more. The Net Gen values transparency. It believes that it is okay to share

certain information that older people consider private. And their opinions about and experiences in the companies where they work form part of that information. The pre-Internet world was full of secrets. Information was highly valued because it was scarce. As Chris Anderson – publisher of Wired and author of The Long Tail – suggests, the secret appears to be dead. The proliferation of cell phones with cameras, e-mails that can be easily forwarded and digital documents that are ready and waiting to be copied, are a sign that any attempt to keep a secret is going to fail. It’s not worth trying.The digital natives appreciate authenticity. Accustomed as they are to finding hoaxes on the Internet, they have quickly learned to distinguish between truth and falsehood. They have a nose for detecting spam or hidden sales messages and they firmly reject them. Many viral marketing campaigns have failed for this very reason. Another key trait is the knowledge that the youth of this generation have regarding topics about which their parents are completely ignorant. According to Tapscott, in Finland, 5,000 students signed up to teach their teachers how to use computers. This is just one example of the bottom-up logic that the Network Generation is ready and willing to apply in other areas, like the job world.

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Other Ways of Being a Net Gener 10 Truths Inside Google According to human resource researchers, these young people who have grown up “opening windows” (in MS Windows or Linux) don’t want to be closed up in office cubicles. They are curious, have high self-esteem, are enterprising and aren’t afraid to press for change in the business cultures where they work. Their entry into the work force is producing a corporate change that Harvard business professor, Andrew McAfee, recently defined as Business 2.0. Google, the eighth most admired company in the United States, according to Forbes magazine, has already reacted to these demands. It has 13,000 employees, most of them under the age of 23, whom it permits to decide on their own work schedule and workplace (home or office), and whom it allows to spend 20% of their work day doing something that really excites them. Google Earth and Orkut were results of this initiative. The Mozilla Foundation, creator of Firefox, the browser developed on the basis of free software that snatched 15% of the market from Microsoft, drew its inspiration from Net Gen motivations and put a new form of production into practice. Some 30% of the people that work for the foundation are not employees but contributors who don’t receive a single cent for their contributions. As with the entire community that takes part

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1. Focus on the user. The rest will come on its own. 2. Do one thing really well. 3. Fast is better than slow. 4. Network democracy works. 5. You don’t need to be at your desk in order to receive or give an answer. 6. You can make money without causing harm. 7. There’s more information out there. 8. The need for information goes beyond all limits. 9. You can be serious without wearing a suit. 10. Good simply isn’t good enough.


in the free software movement, their motivation isn’t money but the possibility of learning, being in contact with people of other cultures and creating a more useful software for others. Paul Saffo, the sociological guru who tracks the impact of technology on society, says,“(…)In a society that shows everything in public, what becomes most valuable is the secret.” This demonstrates that there is no consensus on what we can expect from the Net Gen. According to the BBC, 2 billion people in the world today are under the age of 18. Within that vast group, there are adolescents that use their blogs to provide strategies to help others hide their anorexia or bulimia, or to swap stories about their experiences with drugs. And many suffer from a more silent addiction: They are addicted to being connected. Be that as it may, most of them share genuine concern about the future of Mankind and the environment, and there is a growing awareness among them regarding global warming. Proof of these trends is that in June 2007, leaders from 284 colleges and universities in the United States launched the American

College and University Presidents Climate Commitment, an agreement aimed at eliminating pollutant gas emissions from the country’s educational institutions. At about the same time, MTV launched a space called MTV Switch, containing information on climate change oriented toward young people between the ages of 15 and 25. The site proposes small changes in consumer habits, with the aim of reducing the carbon footprint of each individual on the earth. In 2006, Chilean students made use of text messages, MSN and other Internet tools to muster their peers in a strike. Once they had paralyzed activities in every school in the country, they managed to get the government of President Michelle Bachelet to initiate changes in the country’s education policy. Said María Jesús Sanhueza, one of the Chilean student leaders, “Our strike call is historic because it isn’t born of a political party. It was born on the Internet and it is democratic, because there are cyber-cafés everywhere. The weapon is the Net and in there, the good ol’ boy politicians don’t get what’s happening. They just use it to look at naked chicks.”

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A Few Conclusions The Net Gen… • Wants freedom of choice • Interacts • Is open • Is participative • Likes to personalize • Creates • Joins together in communities • Seeks entertainment in many of its activities • Values speed and seeks innovation • Teaches its elders to use new technology, in a bottom-up logic.


Networked People:

Chapter 6

Making a Community Make Sense How many friends does a person have? How many professional contacts does one attain in a lifetime? Do we live in a small world? How does one generate a circle of friends? In order to try and respond to some of these questions, American psychologist Stanley Milgram carried out a unique experiment in 1967: He selected a target addressee at random and then chose different people in different states who didn’t know this person and who had to try to get a letter to that random addressee. The instructions were that they had to send the letter in question to a person that they knew and considered that this person might have a greater possibility of knowing the target addressee. The person receiving the letter must do the same thing, and so on until the letter reached its final target destination. To the surprise of many, the letters reached the target after circulating through an average chain of only five or six people. This permitted Milgram to maintain what was to become known as the “Theory of the Six Degrees of Separation,” which, simply stated, holds that every one of the earth’s inhabitants is connected by a distance of no more than

six people. However, in the 21st century, the tools of Web 2.0 allow these degrees of separation to be narrowed still further. For example, if a user publishes his/her profile in LinkedIn, a social network for professionals on the Internet, he/she can link up immediately with a Harvard professor, send a message and have an answer in a matter of hours. Presuming that each individual knows —considering workmates, family members, and MSN and e-mail contacts— about a hundred people, it is enough for one member of the circle to link up with another one in order for the chain to project to infinity. One of the first people to realize the potential of virtual communities was communications mogul Rupert Murdoch, who, in July 2005, acquired MySpace for 580 million dollars. This most highly used of all portals by adolescents to make friends, listen to music, upload photos and videos and organize social outings was the outgrowth of a new business model that Murdoch was smart enough to see in time. By 2007, MySpace had 180 million registered users with 230,000 signing up daily. Their motivation: getting together with others on the Internet.

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The Power of the Networks In May 2007, Forbes magazine published a special issue on “The Power of the Networks”. But what were they referring to? What are the much talked-about social networks within the Internet? In its report on adolescents and social networking sites, Pew Internet & Life Project defined them as any “online place where a user can create a profile and build a personal network that connects him or her to other users”. Nevertheless, the scope of the “networking” or “social networking” concept is, indeed, much broader. For decades, this phenomenon has been under study in the fields of social science, economy and biology, in an attempt to elucidate how news is disseminated, how an epidemic spreads or how a certain product becomes a fashion trend. One of the pioneering experiments in the development of virtual communities was The Well. It emerged in the 1980s among the first users of the major network that is the Internet. Although, in time, its platform varied, it remained a closed community in which outstanding thinkers participated, and it will go down in history as the first attempt to generate a conversation of relevance using the tools of the Web . 2002 that sites began to appear that promoted But it wasn’t until 2002 the possibility of creating “an on line circle of friends” for the

mass public. Friendster was one of the pioneers on the US market, although, within a very short time, MySpace would knock it out of the ranking.

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From the Real to the Virtual

Some virtual communities do nothing more than replicate on the Web situations that have been taking place for decades in the real world. An example of this trend is HomeExchange, a site with a community of 16,000 people around the world who are willing to exchange houses with each other. The idea emerged from a network of school teachers in Europe, who, back in the 1950s, lent their houses to each other so as to have free lodging whenever they took trips across the continent. Ed Kushins took this idea and created a site on the Internet with the same name as the original network. The community multiplied and today has members in 110 countries, although the philosophy remains the same now as then: trust and respect for one another. There is a place on the Internet where you can talk to Al Gore about global warming, with Jane Goodall about biodiversity and with Chris Anderson, the publisher of Wired, about new business models. That place is called TED, an organization that was founded in 1984 with the aim of annually bringing together people who have created technological, scientifi c or philosophical innovations. The arrival on the scene of Web 2.0 tools has allowed TED to go global. It is no longer necessary to travel to California to take in a conference or

get to know one of these innovative public figures. “The new architecture of social networks is redefining the world we live in,” writes Spain’s David de Ugarte in his book El poder de las redes (The Power of the Networks). According to a study on participation on the Internet carried out by the Forrester consulting fi rm, 51% of adolescents between the ages of 12 and 17 participate in virtual social networks. The percentage rises to 70% among young people between the ages of 18 and 21 (coinciding with college entry age). It maintains a 57% level in people between the ages of 22 and 26. For the Net Gen, these social networks are the most natural of places to hold conversations and communicate with their peers. MIs (instant chat messages) and messages left on their personal pages, which they check daily, have displaced e-mail, which today, for them, is a tool used almost exclusively to communicate with the adult world. Nevertheless, the number of adults participating in these networks has also grown in recent years: According to the previously mentioned Forrester study, the so-called Generation X (whose ages range between 37 and 40) have a 29% participation.

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MySpace, The Community Everyone Is Talking About Personal profiles, networks of friends, photos, videos, music...all of this has been offered to MySpace users since 2003. One of the most interesting traits of this portal is that it allows musical groups to upload their songs on the Web free of charge. Thanks to this practice, a number of bands have managed to get noticed and find success. The down side? The company owns the rights for everything it publishes, even after the user removes the material and quits the site. The British group, Arctic Monkeys, for example, almost lost the rights to its tunes, precisely because it had been launched to stardom from MySpace.

Craigslist: Simple, Useful and with a Life of its Own This simple idea, of austere design, is one of the reasons for the ostensible decline in print newspaper classified advertising. Created in 1995 by Craig Newmark, Craigslist was born with the mission of providing the San Francisco community with a free space in which to advertise, and it has more than amply accomplished that mission: Today, you use the list to offer or find anything from the service of a plumber to a roommate. As for Craig Newmark, he has been invited to lecture on his business model in universities all over the world. What is most surprising about Craigslist is that, despite the fact that the site has 5 million regular users and racks up around a billion page-hits per week, Newmark doesn’t advertise. “The community isn’t interested,” he says. Revenues come from paid job offerings and certain paying real estate advertisers. The rest is all completely free of charge.

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Working Communities and Talking Communities Atina Chile is a virtual community that promotes citizen action. According to its creator, Chilean politician Fernando Flores, virtual communities can be classified as “talking communities” and “working communities”. In the first group, users enter to talk and make contacts (like in MySpace), while in the second group, besides holding conversations, users aspire to generate changes in the real world. Atina Chile is an example of a “working community”. Its members form a network of 38,000 citizens committed to the environment, education and the transparency of democratic processes. They have given workshops to teach students in Chilean schools how to use Wikipedia, carried out actions aimed at promoting the use of bicycles and promoted digital literacy programs in certain areas of the country. What they actually promote, in the end, is a new form of politics: politics 2.0. But it is not only the ways of policy-making that change with the advancement of these community tools. Wikipedia, for example, is perhaps the best known “working community” in the world. By means of member interaction, the “Wiki” community pursues a clear objective: the creation of a complete, pluralistic, free-access encyclopedia.

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Consumers also have communities of their own, where they monitor the ethical behavior of companies, as in the case of Do the Right Thing, or where they provide comments on the traits and features of certain products or services. Trip Advisor, for example, is a community of travelers that share advice and globetrotting experiences. Created in 2000, some 5 million opinions can now be found on the site regarding cities, hotels, restaurants and excursions.


The Potential of Social Networks

The analysts also point out that the most successful social networks are those that reinforce previously existing communities – for example, those that make up a company and its community of stakeholders. According to Tom Evslin, it’s not a matter of “groups forming a network” but of “groups making use of the network tool”.

According to a study carried out by Communispace, analyzing the participation of 26,539 people in 66 on-line communities, 86% of the individuals who enroll in communities of 300 to 500 members make comments, start conversations, swap ideas and photos, and take part in other activities as well. According to the analysts, the high rate of participation in groups of this size tends to show that small communities achieve a higher level of social commitment among their members, which goes to show that size (number of users) isn’t always what matters when it comes to evaluating on-line communities. This same report indicates that communities that are brand-sponsored generate greater commitment among their members: Brand-sponsored sites manage to get 71% of the people that visit them to register, while those that aren’t under a trademark only manage to attain a 55% sign-up success rate. These observations coincide with those that John Fisher made in a 2007 We Media conference, regarding his discovery that the trend was toward leaving mass sites like MySpace, in order to join others in generating communities built around specific interests. What appears to be taking priority is transparency and privacy and the balance between these two values.

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Centralized Network

Decentralized Network

Distributive Network

Graph conceived by Paul Baran to demonstrate the possibilities of a computer network. In all three cases, the same number of nodes exist, but the difference is how they are linked up. David de Ugarte takes up this diagram once more in showing the cultural changes that modifications in network architecture produce.


The Future of the Communities

The constant appearance on the market of innovative tools makes it possible to predict that, in the near future, there will be a new architecture that will constitute a definitive incentive to participate in on-line communities. And virtual environments like Second Life also make it possible to imagine a near future in which virtual conversation and interaction will be greatly enriched experiences.

site, inserting applications from third-party companies. This signifies much more than simple personalization: It implies accepting, for example, elimination by users of Marketplace (Facebook’s internal purchase/sale service) so as to replace it with an Amazon application. Facebook’s opening is marking a trend that analysts say will become dominant: the transition from a Web 2.0 exchange and interaction mode to a Web 3.0 characterized by shared construction and creation.

At the beginning of 2007, Facebook – a site similar to MySpace, which, as mentioned earlier on, was founded as a gathering place for North American students – decided to open up its community’s platform. Facebook CEO Mark Zuckerberg announced: “Right now, social networks are closed platforms, and, today, we’re going to end that.” What did this change imply?

Although, by all appearances, the move could be economically damaging to the company, Facebook is betting, to the contrary, that this change will generate 150 million dollars in profits for the firm in the first year alone. All of the cases presented here only go to show that giving up the “I” to give way to “Us” and leaving aside rigidity tend to generate a new shared identity and a new business model in which the flow of information and interaction multiply and the opportunities, at times, spring from the most unexpected places.

Founded in 2004, by 2007 Facebook was registering more than 25 million active users, with a growth rate of 3% a week. Taking this latest step was tantamount to deciding to no longer be a simple virtual community, but rather, to transform itself into a platform of the platform that allows users to modify the

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What’s Happening?

Who’s Participating? (US users only) Youngsters Adolescents Young Adults Generation Y 12 to 17 18 to 21 22 to 26

Creators: Are publishing web pages and blogs, and uploading videos on sites like YouTube. Critics: Are writing commentary in blogs, classifying content and writing summaries. Compilers: Are using Really Simple Syndication (RSS), tagging information and organizing content.

Participants: Are using social networking sites.

Viewers: Are reading blogs, watching videos and listening to podcasts.

Inactive Users: Are connected but do not form part of the social media.

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Source: Forrester Research Generation X 27 to 40

Younger Boomers 41 to 50

Older Boomers 51 to 61

Seniors 62+


From Traditional Advertising to Conversation At the 2007 Cannes Festival, Evolution, the viral video created by the Ogilvy Toronto ad agency for Dove, received one of the world’s most coveted advertising prizes. The 90-second, lowbudget short shows all of the tricks used in advertising to turn a normal girl into the perfect face of a cosmetics commercial. It is estimated that 4 million people have seen the ad at YouTube and other Internet sites where videos are shared.

Chapter 7

methods. “We are immune to advertising. Just forget it,” says one of the proclamations of The Cluetrain Manifesto. Seth Godin, the renowned author of such books as All Marketers Are Liars (2005), maintains that we are living in a world where advertising is undergoing a transition from “interruption marketing” to “two-way marketing”, in which the end goal of brand communication is no longer to “convince” the customer, but to build relationships.

The new habits of interaction with communications media that arrived with Web 2.0 had an immediate impact on advertising. It appears that those who have already adopted tools that permit them to participate, express themselves and share knowledge are ever less vulnerable to traditional marketing

That’s why marketing is seeking a way to hold a conversation with an interlocutor who is no longer seen as a customer, but as a stakeholder, and it is important to learn to listen to him/her.

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The First to Arrive on the Scene: Good Moves and Mistakes The experience of Microsoft in exploring these new forms of corporate communication is one of the most complete examples of how a trademark that was hated by the world computing community was able to start building relations. When Microsoft employee Joshua Allen started publishing his personal blog in 2000, Bill Gates’ company’s image was at its lowest ebb, accused as the company was of wiping out all competition and generating computer industry monopolies. “We were afraid to get put there and just talk with people (...)” He just started posting because “I wanted to say that I am a Microsoft person and you can talk with me”, Allen told Shel Israel and Robert Scoble, authors of Naked Conversations, the book that tells how blogs are changing how companies talk to their customers . Allen was the first of Microsoft’s employees to publish a blog. Currently, 1,500 of the company’s employees are doing so. These trends were underscored when the company created Channel 9, the first corporate video blog, in which employees tell their audience —from their cubicles— who they are, talk about their families and about the subjects that most excite them.

It wasn’t long before Mike Torres, who is in charge of the software for MSN Spaces, a Microsoft development, began to use search engines to monitor the blogosphere, so as to rapidly detect any negative commentary and answer it. “A lot of times when you do that, there’s a ‘Sorry - I didn’t know you were listening’ reply”, Torres said. “What happens is that if they know you‘re in the conversation, people get respectful. They may still criticize you, but they don’t lie”. Thanks to these new communications channels, Microsoft managed to: • Humanize the company, since people began to get to know it through its employees. • Create an impact on the morale of its contributors. • Attract new talent. • Place the accent on its identity in its relationships. Transparency and authenticity form part of the new rules of Web 2.0. The Vichy brand of cosmetics was one of the trademarks that put their foot in it because they failed to understand the code of ethics of the new media. An advertising

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I’m a great lover

MARKETING

He’s a great lover

agency recommended that they create a blog with an invented character playing its writer: namely, Claire, a pretty girl with the looks of a model, who took part in the firm’s latest antiage product. Within a matter of hours, the blogosphere had reacted negatively to the attempted deception. The company was forced to make a public apology and pull the blog.

PUBLIC RELATIONS

But they managed to reverse the situation. Vichy later launched a new blog called Journal de ma peau (Diary of My Skin) with the aim of listening to the company’s clients, a space in which real company employees and renowned women blog writers contracted to contribute with complete editorial freedom, write all of the entries. The French press has praised the initiative, and so have the company’s clients.

I’m a great lover I’m a great lover I’m a great lover

I understand that you’re a great lover

These sketches show some of the differences between the advertising tools developed in the 20th century and current trends.

BRANDING

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ADVERTISING


Interruption Marketing

Two-Way Marketing

One-Way Message

Two-Way Message

Passive Client

Interactive Client

Top-down Direction

Horizontal and Circular Direction


The Direction Advertising is Taking These early attempts bear witness to the efforts being made and the need to get the attention of the Net Gen. Because while it is true that most young people still watch television, their habits have changed and certain sales methods are now obsolete. A report drafted in 2007 by Ipsos France among European youth suggests that while they continued to receive information about many products via traditional advertising media, they tended to put more trust in the recommendations of their peers and admitted that their decisions were influenced by “word of mouth”. “Word of mouth”, P2P and “viral marketing” are some of the names given to these non-traditional forms of advertising, all of them experiences that tend to be supported by some sort of on line platform and that comply with at least one of the following requirements: • Virulence: The message is disseminated among different people in the manner of a virus, so that it is not necessary to “trap” the consumer’s interest with a commercial spot on a TV program.

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• Peer to Peer (P2P): Those who spread the words are the consumers themselves, who transmit the message to their friends and acquaintances. • Entertainment and Relevance: In most cases, the message is not a direct sales pitch, but rather, a topic of conversation or a source of amusement linked to a brand identity. In other cases, the relevance of the product in itself incites consumers to recommend it, making them, simultaneously, consumers and marketers. According to a study carried out by the McKinsey consulting group, shared opinion regarding a product, brand or service accounts for two-thirds of all economic activity in the United States. And this is reaffirmed if we take into account a study carried out in the last half of 2006 by Create with Context and Yahoo, which revealed that 40% of all consumers in the United States regularly publicize brands and products that they purchase without receiving any kind of payment in return. And which is the medium that is most often used to spread both positive and negative opinions about these products? Why, the Internet, of course.


Successful Campaigns

The previously mentioned viral campaign by Dove was right on target, because it showed knowledge of how to take advantage of the tools of Web 2.0. The video was easily uploadable to YouTube, publishable in a blog or forwardable to friends. In other words, it was easy to share, something that is of key importance to the Net Gen. But additionally, the trademark created a parallel site (www.campaignforrealbeauty.ca) that included a variety of channels for participation, where users could fill out short surveys, personalize cards to send to acquaintances and gain access to other videos and resources. Another major factor was the relevance of the message: its discussion of the meaning of real beauty was coherent with Dove’s traditional campaigns. The brand thus generated a topic of conversation that allowed people to take possession of the message. For its part, Firefox, the Internet browser created under the premises of free software, was launched in 2004 from the blog called www.spreadfirefox.com and in just 99 days, it was downloaded by 25 million people. Its users were such fans that they raised 250,000 dollars to pay for the brand’s first traditional ad, a double-page spread in the Sunday edition of the New York Times, listing the names of all of the programmers who had contributed free of charge to its development.

Blake Ross, who today is only 20 years old, was still in high school when he created the blog that, in 2005, was generating 200,000 downloads a day. The case of Firefox is living proof that “word of mouth” works best among those who really appreciate a product.

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Learning to Speak a New Language: Some Definitions Word of mouth (WOM): Wikipedia defines this as recommending a product, service or show in a person to person and informal way. Current communications tools like e-mail, chat, blogs, virtual communities and forums tend to imbue this old form of recommendation with new and vigorous potential. Advertising professionals are analyzing how best to control and measure the impact of WOM within the context of Web 2.0. Peer-to-Peer (P2P): This is a reference to a computer network set up among peers, with no clients and no fixed servers. Rather, it is made up of a series of network nodes . In 1999, Napster, the first software to share music files between computers, made use of this model. Beyond the development of similar types of software, P2P is, in the end, a philosophy, adopted mainly by the Net Gen. In modern marketing language, P2P is about the attitude of the new consumer, who is willing to share his/her opinion regarding the products they use with their peers, and to be influenced by purchasing.


The Do’s and Don’ts of Word of Mouth Marketing

These are some general recommendations by WOMMA , an association of advertising professionals who are seeking to establish standards for new forms of communication.

D DO!

ith tools like “tell a friend”, forums, back.

to talk about, like Dove did: publish a message that can be shared, commented on and that generates conversation. 3. Form communities and connect people. Create product user groups and fan clubs. Support the groups that form around products and services. 4. Work with influential communities. Identify opinion-formers and provide them with information about brand actions. Blogwriters are more sought-after all the time in this role. 5. Follow conversations in the virtual and real worlds between product followers, detractors and neutral parties. Listen and respond.

Don’t!

1. Invest resources in keeping brand campaign strategies secret.

2. Pay somebody for word of mouth recommendations without admitting it publicly. 3. Create false identities to promote a product, the way Vichy did in its first experience in the blogosphere. 4. Publish comments solely as a means of manipulating the relevance of a product or blog. 5. Carry out acts of vandalism to promote products/services. 6. Send out SPAM.

6. Take up transparent conversations. Create blogs and other tools to exchange information and openly take part in other blogs and conversations. 7. Co-create. Include consumers in marketing and creative actions. Let them see what’s going on in the company or with a product, so that they have access to first-hand information.

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Seth Godin resumes the new playing rules like this: “The biggest mistake marketers make when they see the power of the consumer network is that they try to control it, own it or manipulate it. This always fails because the network doesn’t care about you and can’t be bought. The smartest marketers aim to inspire, not to control.”


The Future of Corporate Sites Peer to Peer conversations and Word of Mouth

Tags

Social Networks

Consumer-made Videos

Rating sites

Podcasts

Blogs

User forums Another thesis of The Cluetrain Manifesto that took no time at all in manifesting itself is the one that predicted that the language of 20th century business would seem as contrived and artificial as the language of the 18th century French court. Within this new scenario, the static corporate sites created in the ‘90s have entered an identity and functionality crisis. Confronted with a Web 2.0 in which spontaneous opinions regarding products multiply, brand sites offering pro-corporate content have become progressively less than credible. All indications are that the future of corporate sites will be a mutation toward becoming a source of information and contents created not only by the company but by its stakeholders, which will include both positive and negative comments regarding the firm’s products.

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Collective Intelligence

Chapter 8

In its July 2007 edition, National Geographic Magazine published a cover story on “the intelligence of swarms” . On observing the activities of ant colonies, beehives and schools of fish, the biologists involved concluded that there is a type of intelligence that is the product of the collective activity of large groups. It is the intelligence that explains why an ant alone is less than smart, whereas an ant colony is capable of finding the shortest route to its source of food, of assigning roles and of defending their territory. This concept, which biologists call “collective intelligence”, refers to a certain self-regulated social structure capable of demonstrating intelligent behavior of its own that renders it more efficient than its members are as individuals.

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According to James Surowiecki, author of The Wisdom of Crowds, any human group that patterns itself on the intelligence of the ants will grow ever more effective. Conditions for this happening include the following: • A diverse multitude. In this way, each individual contributes different pieces of information. • It must be decentralized: Nobody must be in charge. • There must be some means of gathering opinions in order to be able to arrive at a collective verdict. • Individuals must be independent, in order for them to properly evaluate information.


The Power of Cooperation The activists in Seattle in 1998 and the mobs in Paris in 2006 used cell phones to quickly let each other know where the police were. Like a school of fish in the ocean, they could scatter in the face of danger and regroup a few hours later. Although the difference between animals and human beings is that human activists make the decision to act of their own free will. But what has this got to do with Web 2.0, the Net Gen and on-line communities? In 2005, Web 2.0 guru Tim O’Reilly observed that: “The central principle behind the success of the giants born in the Web 1.0 era who have survived to lead the Web 2.0 era appears to be this, that they have embraced the power of the web to harness collective intelligence”. A paradigmatic example of this is Google. Its search engines order results in accordance with the number of links between pages. The system understands the links as user votes and in that way ranks not only the most popular pages but also the

most reliable ones in first place. Thanks to this system, Google is today considered the market leader in browsers. Wikipedia – which, as mentioned earlier, is a free, on-line encyclopedia, written and edited by volunteers – is another example of collective intelligence turned into action. Hundreds of thousands of people in different places around the world contribute to its creation in one of the greatest collections of human knowledge ever achieved. For its part, Linux, the computer operative system that represents Microsoft Windows’ only competition, was created under free software standards: that is to say, using an open code voluntarily improved by thousands of programmers and users. Thomas C. Malone, of the Center for Collective Intelligence at MIT (Massachusetts Institute of Technology), explains that, as discovered in the case of swarms, collective intelligence is

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nothing new. But the new information technologies that link computers all over the world are permitting an unprecedented deepening of this phenomenon. Mark Klein, of that same Center, is team leader for a project aimed at taking advantage of the intelligence of hundreds of people worldwide in order to find solutions for global warming. Although, as MIT’s Malone points out, collective intelligence isn’t some magic process, nor can it be applied in all fields. The hypothesis that seduces enthusiasts is that large groups of people are more intelligent than a reduced elite. That remains to be seen. In principle, however, collective intelligence appears to function with a high degree of effectiveness in predictive models: It’s like in the horse races, where it is presumed that large groups of people, providing their best estimate for a probable outcome, will generate, on average, more exact responses than those offered by individuals.

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The July 2007 edition of National Geographic compared certain human activities with those of swarms.


Wikis: From Tool to Action

Ward Cunningham will go down in history as the creator of the software that permits collective intelligence to be turned into action: the wiki. He borrowed the word from the Hawaiian language and it means “fast” and also “What I know is…” In 1995, Cunningham created the first version of this simple software code, which made it possible to generate a web page that could be modified by the members of a working team. What Cunningham couldn’t predict was that the tool that he dreamed up for collaboration among members of small groups would be used on an open and mass worldwide scale. Back in 2000, Jimmy Wales, a former financial operator, was trying to create the first free encyclopedia on the Internet. Together, he and Larry Sanger created Nupedia , and called on a group of academics to voluntarily write articles for it. But after two years, the specialists had only come up with 24 entries. So at the end of 2001, when he first heard about wikis, Wales made the bold decision to create Wikipedia. One month later, the virtual encyclopedia already contained a thousand articles. By 2005, it had 500,000 entries, and in 2007, it had nearly 5 million in 14 languages. In an interview with Time Magazine, Wales confessed to being tickled by warnings from well-intentioned people who send him

e-mails saying things like: “Oh my God, they write, you’ve got a major security flaw!”. Since its creation, Wikipedia has become a vast collection of human knowledge, while generating widespread debate among teachers, academics and journalists alike. But above all, it is the most complete manifestation of what interaction among people can accomplish when bolstered by the Internet and some simple tools. Wikipedia receives more hits than Hotmail, The New York Times and The Wall Street Journal put together, despite the fact that it has only one full-time employee, backed by 285,866 contributors who have provided material more than ten times each. A study carried out by the scientific journal, Nature, in 2005, revealed that Wikipedia had 4 errors to every three found in the traditional Encyclopaedia Britannica. Well, true, but the difference is that the Wikipedia errors have long since been corrected, while Britannica’s had to wait a few years until the next issue came out. The key to the success of this collective initiative responds to a phenomenon of these times: a new incentives logic, what writer Lev Grosman defined in an article for Time Magazine as “intellectual altruism”.

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Free Software: Innovation beyond Closed Doors Tools that release the full potential of collective intelligence stimulate the generation of new forms of organization. Companies, academic institutions and research groups can evolve, if they wish to, toward a 2.0-type organization, where innovation is from the gates outward and not limited to the elite that creates it. The free software movement demonstrates the scope of this trend. Linux, the free operative system created in 1992 by Linus Torvalds, when he was only 21 years old, progressively improved with the help of thousands of amateur and professional programmers. Currently, it is being used by literally millions of people and businesses. This is just one example of a movement that inspires and unites a global community of individuals who are willing to donate their time to learning and creating better software resources. SourceForge.net is a site that coordinates free software work. Around mid-2007, there were 15,000 such projects in production. It was also under this model that Mozilla Firefox and Apache were born – software codes that became everyday tools for individual users on the Internet.

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Organizing the Chaos “Tagging” is a labeling process used to classify on-line content . A “tag” is a key word assigned by the user to any given item (photo, article, video, a blog posting, etc.), which permits each user to classify things according to their meaning for that individual. Each item tends to be associated with several tags at the same time. For example, a song sung by Brazil’s Adriana Calcanhotto on YouTube might be simultaneously tagged as “love”, “mpb” and “tenderness”. An Internet posting about tagging might be tagged with words like “web 2.0”, “tags” and “collective intelligence” because these might be the best terms to describe the content, depending on the criterion applied by the author. The prime use of tagging is personal in nature: It serves as a means of finding content once more within the erratic process of surfing the Web. But David Weinberger, a Harvard researcher and author of the book, Everything Is Miscellaneous: The Power of the New Digital Disorder, points out that tags also have a social dimension to them. The tags that one chooses on sites like Flickr and del.icio.us, also facilitate better organization of information for other users. This is a process of social classification of information that is known as “folksonomy”.

If taxonomy is the science of classification, folksonomy is classification in the 2.0 era, resulting from the interaction and intelligence of the masses. Thomas Vander Wal, founder of the Information Architecture Institute, coined this new word in 2004. The term is defined by the following traits: a) Folksonomy is free classification, as chosen by the user. b) Its aim is to be able to find information at a later time. c) It is developed within a free environment, which permits mutual sharing and construction of new categories.

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An image of the most popular tags on Flickr. The 2.0 sites incorporate a tag “cloud�, which consists of placing the tags most employed by users side by side in alphabetical order and placing the most popular ones of all in larger print.

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The Future of Collective Intelligence Scientists from a wide variety of disciplines are currently studying just how to orient collective intelligence toward the solution of Mankind’s major problems. And there are many too, who are thinking about and predicting the evolution of the Web. Surowiecki and the swarm intelligence theorists, for example, imagine its potential as a form of knowledge aggregation. But collective intelligence may also be thought of in terms of something that goes beyond the simple sum of cooperative contributions. The aim of Web 2.0, which is considered a step in the evolution of the Internet, is to establish conversations. Fed by this dialog, collective intelligence is oriented toward generating a new consensus and a new way of managing human knowledge. In the words of French biologist Joel de Rosnay: “Interaction, at first glance, isn’t interesting in itself. What is interesting is the use of interaction for collective creation, what I call ‘intercreativity’. In it, one is no longer connected to the Internet, but rather, connected through the Internet: It is the brains that are behind it and it is this mutual creativity that can – or not – be expressed”. If we think about what Linux did for the software industry, it is only natural to ask ourselves what open and collaborative

activity could do for research into new drugs, cures for disease, or alternative energy sources and atmospheric disaster control. “Could the collective intelligence of the life sciences community be harnessed to enable a more coordinated and comprehensive attack on the intractable diseases that have so far stymied the industry?” asked Don Tapscott, author of Wikinomics. For Tapscott, research carried out within the scope of the so-called Human Genome Project (HGP) represented a “before and after” regarding the topic . In the mid-90s, when laboratories everywhere were caught up in the feverish race to patent DNA gene sequences, one group of pharmaceutical companies made the historic decision to open itself up to cooperation. Today, thanks to this fact, there is a major open databank containing gene sequences decoded by hundreds of teams of scientists. But this was not always the case. In the mid-80s, public and private organizations alike were privatizing human gene sequences hand over fist, so that just a few short years later, 20% of the human genome was private property, including the genes related to hepatitis C and diabetes. In 1995, the Merck Gene Index, an alliance among private companies, government agents and civil organizations, announced the creation of the

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first public databank. Very soon, other pharmaceutical firms, like Big Pharma, did the same. As Tapscott points out, beyond philanthropic motives, the companies finally figured out that the business lay in selling the drugs, not the raw materials – e.g., the DNA sequences. Be that as it may, scientists still warn that: “Crowds tend to be wise only if individual members act responsibly and make their own decisions. A group won’t be smart if its members imitate one another, slavishly follow fads, or wait for someone to tell them what to do. When a group is being intelligent, whether it’s made up of ants or attorneys, it relies on its members to do their own part. For those of us who sometimes wonder if it’s really worth recycling that extra bottle to lighten our impact on the planet, the bottom line is that our actions matter, even if we don’t see how,” as Peter Miller wrote in National Geographic. The world is a complex place. Bees, Linux programmers and Wikipedia editors appear to at least provide us with a guide after which to model our actions. As biologist Thomas Seeley points out: “A honeybee never sees the big picture any more than you or I do. None of us knows what society as a whole needs, but we look around and say, oh, they need someone

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to volunteer at school, or mow the church lawn, or help in a political campaign”. From this standpoint, collective intelligence, which caters to these needs and seeks responses through responsible actions, constitutes a daily challenge.


We, The Media

Chapter 9

Phenomena like the drop in newspaper sales and the arrival of DVR technologies that allow people to watch TV without having to sit through the commercial breaks are just one part of the story. This chapter identifies the new languages, contents and habits that are catching audience attention to an ever greater degree. It also tells about actions taken by the traditional media to ward off the crises that these advancements are causing them.

Argentine blogger Julián Gallo once compared the challenges currently facing the communications media with the one stated by former Coca-Cola Director Roberto Goizueta, when he asked: “What’s our market share of the [customer’s] stomach? Not Coca-Cola’s share of the U.S. cola market or the world soft-drink market, but of all the fluids everyone in the world drinks on a given day.” Seen from this standpoint, PepsiCo wasn’t the only competition. The competition was tea, juice, beer, even water.Continuing along this same line of logic, the traditional media consider their competition to be rival newspapers, radios or TV channels, without taking into account what Gallo calls “the audience’s stomach”. In other words, what percentage of the time people have available in which to be entertained and informed do they devote to the traditional media, and how much to the new constellation of languages, topics, information communities and creative formats found on the Internet?

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Citizen Journalists In 2003, Ohmy News was the first example of something new that is gaining strength: citizen journalism. Since that year, this daily news medium founded in South Korea by retired traditional-media newsman Oh Yeon Ho has been receiving 2 million hits per day. It is the most influential news site in that country, even though it doesn’t have an editorial department, editors, war correspondents or prestigious columnists – just 33,000 citizen reporters that contribute their articles to it. The daily has also inaugurated a rating system for the most highly read stories on its front page, thus leaving it to the readers to edit and decide the importance of each news item. Furthermore, in something akin to leaving a tip in a bar or café, Ohmy News readers are provided with a way to leave small donations when they particularly like something that they’ve read, and this device has actually led to an article’s culling as much as 30,000 dollars in a single day. But this online newspaper isn’t an isolated case.

That same year, the British newspaper, The Guardian, called on its readers to send in photos taken with their cell phones of UK election scenes. The Blair Watch Project compiled amateurs’ images of the then-Prime Minister and of the polls, which were then published in an account that the newspaper opened with Flickr. Shortly afterward, CNN inaugurated its CNN Exchange section for the nascent citizen journalism. “Send us your story. Share your ideas. Make your mark,” the news network proposes. People of all ages are also producing their own news through blogs or sites like Crónicas Móviles , where videos recorded with cell phones register the day’s events in the cities where they live – from protest marches by environmental activists to historic snow storms. Although not everyone is willing to become a citizen journalist, what is happening is a veritable new school of aesthetics for these times. The democratization of publishing tools is modifying the way in which stories get told, the way we are informed and the way we are entertained. And it is only just now that some of the signs of this are appearing on the horizon.

In 2005, the testimonial value of photos taken of the terrorist attack on the London Underground by ordinary people using their cell phone cameras clearly outdistanced that of the images taken by professional news photographers.

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From Passive Reader to Interactive User In referring to their publics, newspapers and magazines have always used the term “readers”. But this term has become somewhat hazy in the Web 2.0 era, when many readers are becoming the subjects of radical changes in habit. Perhaps the most interesting innovation is the use of RSS’s – like Bloglines and Newsvine – that offer a way to give some kind of order to the chaotic information on the Web. What makes RSS technology important? Within the dynamic Web context, RSS’s let users know when a page has been updated and thus allow them to get their information sources into order in accordance with their own criteria. Within this new information model, it is the “reader” who ranks the news by order of importance, be it in a major newspaper or in a friend’s blog. As Paul Saffo, Director of the California-based Institute for the Future, points out: “People no longer passively ‘consume’ media (and thus advertising, [their] main revenue source)”.

York Times now has My Times, a section in which readers do their own editing of the prestigious daily and can choose to see only the sections that interest them, or to give priority to their favorite columnists. This is a move by the paper to respond to active readers who prefer to personalize their daily news reading. In April 2007, Wired magazine came out with its first personalized cover: It invited its readers to publish their photos in the publication’s website,Wired.com, and the first 5,000 to do so were sent a copy of the magazine with their picture and their location on Google Maps on its cover. The traditional model for the media was top down and inside out. Based on that logic, CNN transmits worldwide news 24 hours a day from its headquarters in Atlanta. Nowadays, that model is complemented by a parallel one, generated by a variety of transmitters, creators and editors. The boundary line between audiences and communicators is, then, becoming fuzzy.

It is because of this that traditional media have had to adapt to these trends. For instance, in its on-line edition, The New

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Blogger® We’re all writers Digg® We’re all editors Flickr® We’re all photographers YouTube® We’re all film-makers

User-Created Ads In 2006, the Chevy Tahoe ad campaign tossed the marketing rule book out the window. The company decided to cede control over advertising for the pickup truck brand by allowing 30,000 people to do their own home-grown Tahoe ads. Not all of the resulting commercial spots detailed the most positive features of the product and some people even published videos linking trucks to global warming or citing sex myths regarding people who buy big cars. But Chevy kept all of the ad spots on line, even the negative ones, and the campaign was a real success: In the first four weeks alone, the site specially created for this purpose received 630,000 hits and had a major impact on the traditional communications media.

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The Magic Words: User-Generated Content

Evolution of UserGenerated Content They Lead They Moderate They Collaborate

Influential People Influyentes

They Create/Produce They Write They Share

Publishers/Editors Editores

They Weave Work-Related and Social Networks They Interact

Participants ticipantes

They Comment/Vote They Tag They Read/View

Consumers

es

Since the appearance of citizen journalism and other new forms of expression, analysts have been predicting the coming of User-Generated Content. According to the 2006 Report emerging from the Pew Internet & American Life Project, 35% of all users in the United States had created on-line content. This included everything from writing a blog, publishing a home video on the Internet, voting for content, creating a tag or recommending a product, to actually designing services in this field. The pathway leading to the creation of Internet contents may be described in four levels: 1. CONSUMERS. Read and look at contents, then they vote on them, rank them and tag them. 2. PARTICIPANTS. Set up social networks with friends and colleagues, actively follow information and subscribe to content. 3. EDITORS. Write, film or take photos and later publish these materials in different spaces on the Web. 4. INFLUENTIAL FIGURES. After taking part in all of these activities, they become content moderators or leaders. A blogger with a large number of readers is an example of this type of person. In 2005, Al Gore and Joel Hyatt created Current Tv , a cable television channel that encourages its viewers to contribute


Say Cheeeeeese! their videos. When this channel first aired – a few months before YouTube – the media industry had no idea that common folks might have the talent to create entertaining videos, or that they might have the gumption to do so. But today, that channel is a real success, as is its on-line community. In 2006, the Google Internet giant acquired YouTube for 1.65 billion dollars. This is a site whose only economic value is millions of ‘home-grown’ videos, published on the Net by ordinary, everyday people. This event clearly marked the rise to a pedestal of User-Generated Content. But YouTube is just one of the places on the Internet where people watch videos (video on demand). According to the May 2007 Video Meatriz Report put out by comScore, 75 % of all US Internet users for a given month saw an average of 158 minutes of on-line videos, lasting an average of 90 seconds each. The big question is, what did those videos show. The answer came when media mega-corporations asked that their videos be removed from YouTube. It was only then that it became clear that out of the 6,725 most popular videos on the site, only 621 (9%) were made up of professional content protected by copyrights. In other words, the share of professional content in YouTube is negligible in comparison with the site’s free, amateur content.

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Until a few years ago, photography was a hobby for some and a profession for others. Normal everyday people limited their shutterbug activities to taking snapshots of happy family moments: birthdays, vacations, weddings and births. With the arrival on the scene of digital cameras, taking pictures became, for some, an almost daily practice. Flickr, one of the most popular sites today, got that way thanks to a gallery of 5.5 million photos, of which 80% were made public on the decision of site users. Additionally, Flickr incorporated the earlier mentioned tagging system that allows users to find photos on a variety of subjects, taken by others using simple means. Contributors can also be located on a map, a fact that allows people who were on vacation in the same place to share post card-type images.


Why Participate? Toward a New Incentive Logic In 1943, psychologist Abraham Maslow ranked human motivations in the form that was to become known as Maslow’s Pyramid. At the base he placed basic needs like food, shelter, health and safety, and at the very tip of the figure, self-esteem and self-actualization. It was his theory that human beings develop new motivations upon satisfying their basic needs. In her book, Community Building on the Web: Secret Strategies for Successful Online Communities (Peachpit Press, 2000), Amy Jo Kim used Maslow’s Pyramid to identify the objectives and needs behind participation on the Internet. According to Shayne Bowman and Chris Willis, authors of We Media (2003), the motivations behind audience participation are the following: • To gain status or build a reputation within a given community. This motivation is directly linked to Web 2.0. • To create connections with others who have similar interests, online and off. To build relations and strengthen others that already exist in the physical world, forming part of a phenomenon that sociologists define as “glocalization”: the ability of the Internet to expand users’ social worlds by putting them in touch with people in far-off places, but also connecting

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them more deeply with the places where they live. • Sense-making and understanding. This involves the Web as a forum for discussion and making sense of the world among peers. • To inform and be informed. • To create. • To entertain and be entertained. There are many types of entertainment in Web 2.0. Paul Saffo concludes, in the article we quoted earlier, that: “In the end, much of what passes for communications actually has a high entertainment component. The most powerful hybrid of communications and entertainment is ‘particitainment’: entertaining communications that connect us with some larger purpose or enterprise.” And finally, there is Juan Freire, biologist and author of Nómada Blogs , who talks about “the long tail of talent”, placed in evidence by the Pew Internet & American Life Project Report published in 2006: 54% of all bloggers surveyed had never published anything before, yet a total of 12 million Americans (8% of all Internet users) maintain blogs. Of all those surveyed, 52% said that their motivation was “to creatively express themselves.” All indications are that within the new incentives logic, creativity has been democratized.


Line Needs

Off Line (Maslow)

On Line

Physiological and Basic Human Needs

Food, Clothing, Health

System Access. Capacity to maintain identity while participating in on-line communities.

Security

Protection against crime, war, attack. The need to live in a just society.

Protection against hackers and personal attacks. The ability to maintain diverse levels of privacy.

Giving and receiving love. The need to belong to a group.

The need to act within an environment with clear rules. Belonging to a community and its subgroups.

Respect for oneself. The need to achieve the respect of others and to contribute to society.

Contributing to the community and being recognized for these contributions.

Social

Self-esteem

Self-actualization

Personal development. The need to be outstanding in the activities that one takes part in.

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Occupying a role in the community, developing new abilities and finding new opportunities.


A poster illustrating the digital world marketed today by eboy (www.hello.eboy.com/eboy/shop).


Toward the We Media

The We Media is: Trend research tends to show advancement toward a new media language – a language that is fresher, more spontaneous, less filtered. But all of this is just the tip of the iceberg in a process of change that promises to make history: the transition from mass media born in the 20th century to the We Media of the new millennium. This is a new scenario in which the tools have been democratized and each person can make his or her voice heard, participating in conversations on a one-to-one basis with a newspaper editor, the CEO of a major company or a political opinion-leader. Every day, new 2.0 applications are turning up that provide people with opportunities to express and empower themselves as citizens and consumers. And so the power of the media is becoming a tool for democratization.

• Cooperation • Collective Intelligence • Participation • Personalization • A New Incentives Logic • New Emerging Business Models • The Ability to Swap Roles • Spontaneity and Creativity • New Formats • Conversations • Community

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ACTIVISM BILL_DRAYTON COLLECTIVE_INTELLIGENCE CONSUMER CONSUMPTION CYBER-ACTIVISM DIALOG ECOLOGY

ENTERPRISE_2.0

FAIR_TRADE

KNOWLEDGE_MANAGEMENT

GOOGLE

HYPER-HUMANISM

NET_GEN NETWORKS

PARTICIPATION

JOHN_ELKINGTON KNOWLEDGE PAUL_HAWKEN

RESPONSIBLE_CONSUMPTION SOCIAL_NETWORKS SOCIETY STAKEHOLDERS SUSTAINABILITY

RESPONSIBILITY SUSTAINABLE_

DEVELOPMENT TECHNOLOGY TIPPING_POINT TOOLS TRANSPARENCY VALUES VIRTUAL WEB_2.0 ACTIVISM BILL_DRAYTON COLLECTIVE_INTELLIGENCE CONSUMER CONSUMPTION CYBER-ACTIVISM DIALOG ECOLOGY ENTERPRISE_2.0 FAIR_TRADE GOOGLE _MANAGEMENT _CONSUMPTION DEVELOPMENT

NET_GEN NETWORKS SOCIAL_NETWORKS TECHNOLOGY

HYPER-HUMANISM JOHN_ELKINGTON KNOWLEDGE KNOWLEDGE PARTICIPATION SOCIETY

TIPPING_POINT

PAUL_HAWKEN

STAKEHOLDERS

RESPONSIBILITY RESPONSIBLE

SUSTAINABILITY

TOOLS TRANSPARENCY VALUES

SUSTAINABLE_

VIRTUAL WEB_2.0

ACTIVISM BILL_DRAYTON COLLECTIVE_INTELLIGENCE CONSUMER CONSUMPTION CYBER-ACTIVISM DIALOG ECOLOGY ENTERPRISE_

2.0

KNOWLEDGE_MANAGEMENT

FAIR_TRADE GOOGLE

HYPER-HUMANISM JOHN_ELKINGTON KNOWLEDGE

NET_GEN NETWORKS

PARTICIPATION

PAUL_HAWKEN

RESPONSIBILITY

RESPONSIBLE_CONSUMPTION SOCIAL_NETWORKS SOCIETY STAKEHOLDERS SUSTAINABILITY SUSTAINABLE_ DEVELOPMENT TECHNOLOGY TIPPING_POINT TOOLS TRANSPARENCY VALUES VIRTUAL WEB_2.0 ACTIVISM BILL_DRAYTON COLLECTIVE_INTELLIGENCE CONSUMER CONSUMPTION CYBER-ACTIVISM DIALOG ECOLOGY ENTERPRISE_2.0 FAIR_TRADE GOOGLE

HYPER-HUMANISM JOHN_ELKINGTON KNOWLEDGE KNOWLEDGE_

MANAGEMENT NET_GEN NETWORKS

PARTICIPATION

PAUL_HAWKEN RESPONSIBILITY RESPONSIBLE_

CONSUMPTION SOCIAL_NETWORKS SOCIETY STAKEHOLDERS SUSTAINABILITY

SUSTAINABLE_DEVELOPMENT

TECHNOLOGY TIPPING_POINT TOOLS TRANSPARENCY VALUES VIRTUAL WEB_2.0 ACTIVISM BILL_DRAYTON COLLECTIVE_INTELLIGENCE CONSUMER CONSUMPTION CYBER-ACTIVISM DIALOG ECOLOGY TRANSPARENCY ENTERPRISE_2.0

FAIR_TRADE

GOOGLE

HYPER-HUMANISM

JOHN_ELKINGTON KNOWLEDGE

KNOWL


The Value Revolution


Consumer Power

Chapter 10

In his book, Blessed Unrest, writer and environmental advocate Paul Hawken explains how what he calls “the largest movement in history” came into being. This is how the author refers to the emergence of organizations that defend the rights of living beings – human, animal and vegetable – and, subsequently, the environment. And he attributes very particular traits to that movement, which he derives from comparing social and biological behaviors. Hawken theorizes that this movement is similar to “a collection of small pieces, loosely joined, [that] forms, gathers, and dissipates quickly”. It is joined by ideas, not by ideologies, and it commits citizens to seeking solutions for certain needs. It expresses the collective need to democratize public policies by changing the direction of decision-making, which, up to the present day, is imposed “from the top down”.

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It is within this movement – which, although it may appear ambitious, has already been influential in bringing down governments, businesses and social leaders – that the consumer organizations are enrolled, working to ensure that purchasing decisions are backed up by an ethical and responsible attitude. And it is here too that we find the producers’ associations that are advocating fair trade. In both cases – as well as in the cases of all the rest of the organizations that Hawken analyzes – the impact of their campaigns and their institutional growth are closely and fundamentally allied with the participative communications media, and very especially with Web 2.0, the tools of which have provided access to a source of power that multiplies by the day and extends far beyond geographic, sectorial and cultural boundaries.


Toward Responsible Consumption Egged on by an economic and social system that places the material at the top of the value scale, for several decades now, a certain sector of humanity has devoted its energy to non-stop consuming. The figures, in this sense, speak for themselves: in the 20th century, the world’s 20 richest countries consumed more natural resources than Mankind had utilized in all the rest of its history. And by 2002, 15% of the world’s population was responsible for 56% of all of the world’s consumption. At the same time, and practically parallel to the spread of the consumerist model, a social movement was taking shape that was built on opposite values and that promoted a kind of consumption based on a commitment to social development and environmental care: namely, ethical or responsible consumerism. The origins of this movement date back to 1962 and the publication of a book called Silent Spring, written by North American biologist Rachel Carson, who, herself, was to die of cancer due to industrial pollution, and who was the first to question the notion of corporate domination and authority. It was Carson who first said that many of the companies that claimed to “create value” were, instead, creating “products that destroy values”. Be that as it may, all indications are that the

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true revolution of consumers who have become an unstoppable force for change to be reckoned with has come with the advance of the Internet. The aim of responsible consumer organizations is to promote critical awareness in society with regard to not only the system, but also to the social and economic impact of the products they acquire. With this purpose in mind, they promote a reduction in consumption levels and changes in habits, mainly connected with how people buy and with the level of importance that society gives to material goods. They urge their peers to question themselves prior to each and every purchasing decision, to ask themselves under what social and environmental conditions the things they are buying have been manufactured. They urge people to justify their choices on the basis of two main criteria: the history of the product and the conduct – ethical, social and environmental – of the company that makes it. Therefore, the responsible consumer is one that chooses what he/ she buys not only on the basis of personal taste and convenience, but also with a view to the common good. So it is that responsible consumption implies a change in the general scale of values and in the priorities imposed by a dominant model.


When it Comes to Buying In the view of Greenpeace, responsible consumers are ones who: • Regulate their consumption on the basis of human values. • Make aware purchasing decisions, asking themselves where the products they acquire come from and where they will end up. • Know about self-gratification but also about self-limitation. • Seek not only to satisfy their own needs, but also to show solidarity toward producers. • Try for their consumption to contribute to preserving natural resources so that future generations can also enjoy them. • Are aware that buying is a political act with a human significance . The concept of responsible consumption encompasses three dimensions: ethics, because each purchasing decision is based on values; ecology, because the final decision must be in line with the three R’s (reduce, reuse and recycle), and solidarity, because it also implies evaluating the labor conditions under which the product was manufactured, as well as the impact of making it on society.


On-Line Ethical Consumer Communities Day by day, the number of consumer organizations operating on the Web is growing at a truly surprising rate. The same is true of the numerous sites and blogs offering information on sustainable products and companies from every region on earth. Through their websites, responsible consumer communities provide detailed information on companies and products, and promote a variety of educational, informative and participative campaigns aimed at getting consumers, business people and government officials alike to pledge their responsibility to the consumer movement. Among the best known of these organizations are the following: • Co-op America - www.coopamerica.org Founded in the United States in 1982, the aim of this not for profit association is to mobilize consumers and economic agents in pursuit of a more socially and environmentally fair society. By 2007, the organization had more than 65,000 individual members and 2,500 associated companies. Consumers can find information on the sustainability performances of hundreds of companies worldwide on the association’s website. • Ethical Company Organisation (ECO) - www.ethical-company-

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organisation.org/ethical-company-organisation.htm Operating out of its headquarters in the United Kingdom, this organization provides information on hundreds of companies and brands to help consumers choose wisely the products they buy and know where to acquire them. Each product or company is evaluated on the basis of 15 ethical indicators surrounding the social and environmental conditions under which the products are manufactured. • Consumo Responsable - www.consumoresponsable.com/ portada.htm The chief mission of this Spanish organization is to create critical awareness regarding the neo-liberal consumption system and to raise the level of consumer and governmental interest in the promotion and practice of more ethical, fair and solidarity-conscious consumerism. There are also a number of websites devoted entirely to recommending sustainable products and to making known the places where this type of items can be acquired, such as: www. responsibleconsumer.net and www.newamericandream.org, two initiatives born of the blockbuster Green Consumer Guide, published by John Elkington in 1988, which today has a space of its own on the Internet: www.greenconsumerguide.com.


Clean Clothes...Clean Businesses! On July 17, 2007, after several years of effort, Spain’s Campaña Ropa Limpia (Clean Clothes Campaign - CCC) managed to get the shareholders of Inditex – an industrial group that is a worldwide leader in the manufacturing and distribution of clothing and owner of brand names like Zara and Massimo Dutti – to approve a new code of conduct that includes such fair trade principles as guaranteeing workers a proper wage. The Clean Clothes Campaign was an outgrowth of a demonstration organized in front of major department stores in The Netherlands in 1989, to denounce worker exploitation in sweatshops in the Philippine Islands, where this same trademark was manufacturing its clothing. The protest initiative sparked broad-ranging repercussions worldwide and gathered strength until it became an international crusade dubbed the Clean Clothes Campaign. Today the CCC exists in 11 countries across Europe through coalitions of NGOs and labor unions that work independently in each country to improve labor conditions in the textile industry. They focus on gathering signatures for petitions, organizing demonstrations and generating communications media campaigns, as a means of mobilizing consumers and getting them to use their power to demand that companies employ fair trade practices.

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The Fair Trade Movement The origin of fair trade dates back to the 1950s, when a group of importers and certain retailers in the Northern Hemisphere decided to create a non-profit association with small producers in the South to help them fight against low prices and middlemen that hindered their access to world markets.

not alone, since hundreds of free trade-oriented organizations exist today. Among the best known are: the International Federation for Alternative Trade (IFAT) , the Network of European Worldshops (NEWS) , and the European Fair Trade Association (EFTA) . The free trade movement operates fundamentally on three fronts: commercialization (the organization of trade cooperatives and trade networks among producer countries in the developing world), dissemination and pressure (the drafting of legislative initiatives and public awareness campaigns), and responsible consumption (educating consumers about how products marketed are manufactured).

The fair trade concept grew in popularity at the end of the 1990s and new organizations began to emerge throughout Europe and the United States. The Fairtrade Labeling Organizations International (FLO) was born in 1997, as a vehicle for consolidating and arranging these initiatives in a more workable order, while redefining Free Trade Guarantee standards.

In 2002, the FLO launched its International Fairtrade Certification Mark, with the aim of generating more widespread consensus and so as to stimulate the adhesion of business people everywhere to fair trade practices. So far, a score of organizations have adopted the seal.

Since then, this movement’s aim has been to achieve greater equity in international trade through dialog, transparency and respect, guaranteeing equitable relations between major developed markets and low-income producers. But the FLO is

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The Fair Trade Seal The Fair Trade Seal guarantees that producers have received reasonable compensation and that workers have received fair pay; that working conditions have not violated human rights or labor laws; that producers do no employ forced or child labor; that there is labor union freedom and that there is no discrimination; that community investments (education, health, housing) are made, and that producers have been selected and treated with care, so as to achieve high quality results. Fair trade certification is currently applied to a broad spectrum of products including coffee, rice, tea, fresh and dried fruits, vegetables, cacao, cotton, honey, sugar, wine, herbs and spices, among others.

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The New Consumer

Over the course of the 1990s, in line with the growth of the participative media and the responsible consumer and free trade movements, a new type of customer began to emerge, the most distinctive trait of whom was an awareness of the impact of his/her actions on the environment and society. A minority within the world population began to gather at the front doors of companies and say, “Enough! Down with pollution, down with destruction, down with slave labor, child exploitation, pauper’s wages, unfair rules and productive models that are non-sustainable in the long term.� Satellites, camcorders, blogs, Web 2.0 and cell phones all served to facilitate communications among these different groups and to the chagrined surprise of companies, different forms of interaction came into play and consumers grabbed control like never before, organizing themselves into a variety of movements.

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Participation and Complaint Sites • www.www.dotherightthing.com Ryan Mickle and Rod Ebrahimi founded this site in 2006, as a forum for the publication of news and user comments regarding a variety of brands and companies. Taking these comments into account, the site sorts firms into a ranking that includes five social performance ratings: 1- Great Company, 2- Good Company, 3- Not so Good, 4- Less than Good Company, and 5- Worst Company.

• www.climatecounts.org This is a not for profit organization that seeks to bring consumers and companies together in the struggle against climate change. It was founded by Stonyfield Farm Inc., a leading organic yoghurt-maker, in cooperation with Clean Air-Cool Planet, a not for profit association that carries out research on and promotes solutions for global warming. By the end of 2007, the Climate Counts site was providing users with profiles of 56 companies worldwide and information on their actions with regard to the changing climate.

• www.knowmore.org/default.php This is a not for profit association created by Bernard Dolan and Sage Francis, whose mission is to make a critical and impartial examination of all aspects of companies on the market. Their goal is to create the world’s largest free, reliable and independent database, carrying information to allow consumers to gain a deeper knowledge of the history, values and actions of every company and, on the basis of this knowledge, to make more aware and positive decisions as to the purchases they make. The site has a wiki format and all content is provided by users. Points given in rating the companies, however, are only granted by site moderators, although these ratings can be refuted by Web-surfers.

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Green Marketing

Getting the attention of this brand new and growing market segment, known to many as the “green consumer”, is one of the main challenges facing the communications departments of concerned companies today. In searching and developing the resources and tools to attract this coveted group, business has generated, little by little, a new type of marketing: “green marketing”. Whenever green marketing is mentioned, people tend to associate it only with ecology. But in point of fact, this concept also includes other aspects related to companies’ production conditions, their social impact in the communities where they operate and their values. One of the main problems that green marketing must confront is consumer skepticism. Not infrequently – and sometimes with just cause – consumers tend to be suspicious of the intentions of and announcements made by companies, seeing their strategies as having the ulterior motive of “greenwashing” their images. Specialists say that if a company wants to avoid being accused of greenwashing and wishes to make its green marketing truly effective, it is of vital importance that every area of the firm adopt a philosophy and an active attitude in favor of sustainable

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development. In other words, in order for the consumer to be able to believe in the company’s good intentions, the company itself must first believe in its own good intentions. A report called “A Greenprint for Companies”, made public in 2007 by Enterprise IG, a communications agency that forms part of the WPP Group, proposes four key requirements that all companies must comply with if they want their sustainability policies and their business dealings to meet with success: 1. Ensure that “sustainable” policies and action plans are at the heart of the company’s business. Those who move soonest will gain the greatest competitive advantage. 2. Find compelling ways to promote these aspects of the way the company operates as a business. This should become an increasingly important part of the company’s marketing and promotional strategy. 3. Be rigorous about ensuring that what the company claims is true. No greenwash! Those who aren’t will be found out, and it will be worse for their business than if they had done nothing at all. 4. Know that sustainability is about finding solutions that are both environmentally and economically sound and also about the rediscovery of the social contribution businesses can


make . These requirements could be summarized as meaning that companies should be coherent, ethical and transparent. Because they are not only facing consumers who are now immune to traditional advertising, but also consumers who are well informed and ever more discerning and responsible. What is unquestionable is the fact that, whether based on conviction or on simple business strategy, more companies every day are deciding to implement this new type of marketing. Campaigns like General Electric’s Ecomagination , Philips’s Green Logo , and General Motors’s Live green, go yellow , are just a few examples of this trend. In 2006, Judy Hu, worldwide Executive Director of Advertising and Branding at General Electric told Brandweek Magazine: “Green is green, as in the color of money (…) It is about a business opportunity, and we believe we can increase our revenue behind these Ecomagination products and services”.

According to the Ethical Consumers Report 2006, responsible consumer sales generated greater earnings in the UK in 2005 than cigarette and alcohol sales did. The study also shows that over the last six years, Britain’s green industry has tripled and continues to grow at a rate of over 10% a year.

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Welcome to Enterprise 2.0

Chapter 11

In the North American spring of 2006, Harvard Business School Professor Andrew McAfee published an article called Enterprise 2.0: The Dawn of Emergent Collaboration in the Sloan Management Review . In it, he defined the “Enterprise 2.0 ” paradigm that would soon pass from the academic world to public knowledge, being quickly disseminated in the blogosphere. According to McAfee’s definition, Enterprise 2.0 is the implementation of the attributes and characteristics of Web 2.0 in business. It represents a new way of working within corporations, by which new technologies and business practices permit workers to surpass the limits imposed by the communications tools offered by the earlier model. Within this new paradigm, there lies an enormous competitive edge for companies that make use of social software, which facilitates

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collaboration and simplifies the exchange of information among those working in a given company and with networks formed by suppliers, clients and other stakeholders. As McAfee points out, these Web 2.0 tools are producing a radical change within corporations, since they tend to channel collective intelligence and have an impact on innovation, productivity and flexibility in doing business. The main objective of a 2.0 business is to generate spaces in which people can realize their personal projects on a collective basis: a distributive network that encourages new relations without being bound by centralized decisionmaking and in which those on the periphery are just as important as those in the middle.


S.L.A.T.E.S. McAfee supplements and, at the same time, explains his definition by means of the acronym SLATES, which describes the functionalities that define an enterprise within the context of Web 2.0: Search People seek and find what they need for their job activity by searching the contents of corporate Intranets. Finding what you are looking for is a key feature of this new kind of enterprise. Links The way to search is from one resource to another – from one link to another. Authoring Everyone can produce and generate traffic surrounding these contents, as long as what they come up with is useful to others. Tag The experience of those using the information systems is enriched through tagging. It is not machines, but users, who tag the contents in accordance with their own criteria. Extensions The recommendation system is a road to advancement in searching. If one member of a community finds value in a content and this content, in turn, recommends the reading or searching of another, it is probable that users will also be interested in the latter, since networks are one of the ways in which knowledge is organized. Signals RSS technologies send signals to indicate that the contents that are of interest to the user have been modified.

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Communications: Old and New Technologies Despite the fact that any user can create and generate new contents, e-mail and MSN don’t permit the information that circulates to be seen by all members of the team. By nature, these applications, which McAfee calls “channels”, do not permit information management nor do they guarantee universal access. Intranets and Extranets, for their part, are internal communications spaces, with providers, clients and other stakeholders , and are generally administrated by a small group that decides which information to publish and to whom to divulge it. McAfee calls these spaces “platforms”. The channels and platforms do not allow all of the members of the team to gain access to the information (accessibility). Nor do they make it possible for the information to circulate transparently (visibility). Similarly, they do not permit the

COMMUNICATIONS

1.0

contents communicated to be generated on a shared basis (collective creations) within the same working environment. Web 2.0, meanwhile, proposes a new meaning for community, in which everything is known and shared immediately, transparently and effectively. Enterprise 2.0, then, emerges as a response to the rigidity of current collaboration platforms. Be that as it may, not everything is about technology. What is important is to use technological tools to generate an internal, receptive and participative culture within the company, one that permits free and voluntary development of collective intelligence. The trick, in other words, is to turn working environments into comfortable and efficient places that provide for the circulation of ideas and proper knowledge management.

COMMUNICATIONS

2.0

Channels and Platforms

Accessibility, Visibility, Collective Creation

e-Mail, MSN

Social Software, Twitter

De-Centralized Networks

Distributive Networks

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From Enterprise 1.0 to Enterprise 2.0 but also a change of course in the way communications and business are done. In the words of Marshall McLuhan, one of the world’s greatest communications theorists: “The medium, or process, of our time… is reshaping and restructuring patterns of social interdependence and every aspect of our personal life...Everything is changing: you, your family, your education, your neighborhood, your job, your government, your relation to ‘the others’. And they’re changing dramatically”.

Despite its coinciding with both current times and times to come, Enterprise 2.0 is still far from consolidating itself as the dominant paradigm for corporate communications technology management. It still has to deal with a 1.0 culture that precedes it and that remains entrenched in its rigid style and its stultifying bureaucracy. The differences between Web 1.0 and Web 2.0 – explained in earlier chapters – do not only represent technological changes,

Enterprise

1.0

Enterprise

2.0

Horizontal Organization Agility High Flexibility Transparency User-Managed Technologies

Vertical Hierarchies Bureaucracy Scant Flexibility Protection of Knowledge Technologies managed by technical departments: Users have no control Executive Level Down Structured Information Systems Centralized

Operative Level Up Emergent Information Systems Distributive

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Evolving from Web 2.0 to Enterprise 2.0 Transferring the concepts of Web 2.0 to business implies proposing the enterprise as a platform and assuming collaboration as an end in itself and as a necessary condition for such a business to operate. The aim, then, must be promoting rendezvous points and establishing networks in which the top priority is cooperation and sharing, as well as agile information management based on the interaction of independent individuals. Within this new format of enterprises built to satisfy the need for interaction among people, those who begrudge information, contacts, data, etc., are considered “poorer” than others, while those who best display their “know-how” are the most attractive members of the net. This is because in Enterprise 2.0 value is linked to quality and quantity of connections among members, above and beyond any relations that the organization itself has. So it is that, within the context of the globalized world, those who enter the ranks of Enterprise 2.0 must be capable of handling the tools that allow them to expand their contacts. Although at first glance this may appear complicated, the equation is really quite simple: If the members of an organization feel the need to communicate, the technology

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becomes nothing more than the means to do it. “Markets are conversations,” says the first thesis of The Cluetrain Manifesto, and in its tenth thesis, it adds: “As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally”. Enterprise 2.0 promises, then, to be a flexible venue, a collaborative platform that is both transparent and simple. It will be a meeting place in which relations can be established from the bottom up.


How to be a 2.0 Enterprise There are certain changes that are indispensable when it comes to thinking and acting under the tenets of this new paradigm and advancing toward the 2.0 model. • Effective Mass Participation Models: Openness In a multi-connected world, there is no longer any sense in “safeguarding and hiding” knowledge. You have to open up to the community, become transparent and visible to everyone, while adopting the language of sharing, in order to become part of a worldwide network full of potential partners and consumers.

• Friendly and Simple Technology: Simplicity Communications technologies and social software act as triggers in the generation of ideas and interaction. That is why it is important for their use to be accessible and for them not to require any great level of expertise or preparation. Furthermore, the tools and how they function should be the same for all levels of hierarchy, so as to promote a participative model that is horizontal and less bureaucratic.

• A Dignified Framework for Relations among Members: Bonds In order to build an enterprise based on shared knowledge and dialog, power must no longer be uni-directional and relations among its members must be free-flowing. That is because Enterprise 2.0 signifies, above all, taking an ethical stance and its potential depends on people as individuals.

• Valuing Knowledge and Participation: Dynamism Job promotion models based only on seniority or on other rigid formalities must be considered obsolete. Explicit recognition must be reserved for those who demonstrate their motivation for learning and participation. Everyone in the organization must be provided with the chance to present proposals and be furnished with the material opportunities to bring those that prove positive to fruition. To this end, technology must function solely as a facilitating medium.

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Technology for All

IBM donated enormous quantities of software codes and set up teams to collaborate in the development of the Apache server and the Linux operating system, both of which are free, open-source tools. Not having to develop its own operating system allowed the company to chalk up savings of a billion dollars a year. Sun Microsystems in 2006 announced the disclosure of the codes for its famous Java platform. Director of Technology Tim Bray explained the move in the book, Wikinomics, saying: “Just as it’s true that a rising tide lifts all boats, we genuinely believe that radical sharing is a win-win for everyone. Expanding markets create new opportunities”. Mozilla Corp is a firm that puts Enterprise 2.0 principles into practice: For every paid staff member, it has hundreds of unpaid contributors connected via the Internet, whose only incentive is to be able to include the experience in their resumes. The corporation’s Chairman, Mitchell Baker, revealed in his blog that somewhere between 30% and 40% of Firefox 2 was created by people who were not on the firm’s staff . In this same blog, the company posts ads seeking new contributors, and the page has a section in which the company shares information about corporate management with the community as a whole.

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Transparency and the Dell Hell Don Tapscott investigates changes introduced through the computing revolution. As of 2007, he had published 11 books, investigated 200 companies and interviewed 9,000 people around the world, with the aim of understanding and then explaining the workings of this new form of economy – which he dubs “Wikinomics”– and the Enterprise 2.0 phenomenon. Tapscott’s theories point to a relentless movement toward transparency, as a result of growing demand from those with an interest in business and in swift technological change, particularly as deployed via the Internet, aimed at making it easier for organizations to disclose information and harder for them to keep secrets. Tapscott says that greater transparency will generate greater corporate accountability and, thus, better corporate behavior. Therefore, he suggests, rather than resisting this trend, companies should be adopting transparency and re-thinking their values. Tapscott metaphorically says it all when he quips: “If you’re going to be naked, you’d better be buff.” The author sums up what Wikinomics is all about in four points: 1- Being Open. 2- Peering

3- Sharing 4- Acting Globally A clear example along these lines is the computer company Dell, which, thanks to a decision to open up and change to the 2.0 model, managed to literally walk out of hell. Jeff Jarvis, the number 70 blogger in terms of popularity out of 70 million blogs that are out there on the Web, had a series of problems with a Dell computer back in 2005, and since the company’s technical service division failed to provide him with the solutions he needed, he published a posting in his blog under the title “Dell Hell”, in which he told the story of his frustrating experience with the firm. Following publication of this posting from hell, Dell’s sales suffered a noticeable reduction, and the company naturally rushed to solve Jarvis’s problem, swapping his defective computer for a brand new one in record time. But the wake-up call that the “Dell Hell” fiasco signified for the company made Dell, from that point on, start to pay strict attention to the social and participative media, actively monitoring blogs, contacting clients when they reported problems of any kind, and taking into account both the positive and negative opinions of bloggers and participants in on-line forums.

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As a result of this experience, Dell also launched IdeaStorm, a site to which users can send their ideas regarding how to improve the company’s products and services and vote for the best ideas presented. The ďŹ rm’s Chairman, Michael Dell, is the creator of this space, the aim of which is to cooperate with Dell clients by giving them a voice in the direction the company will take in the future. By opening up, Dell not only managed to walk out of hell, but also to change its image, by starting to develop a line of products that responds directly to concrete consumer demands.

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Google: 2.0 + Sustainability

Google currently tops Fortune Magazine’s list of the best companies to work for in the United States . The distinction is the result not only of staff pay levels, but also of additional benefits offered to employees and the great working environment generated by its flexible structure. Google’s organization demonstrates the essential traits of Enterprise 2.0, and as such, a growing commitment to environmental care. In June 2007, Google Inc. presented its “strategy for helping build a clean energy future ”. The plan foresees elimination of all carbon dioxide emissions from the company in 2008, increased energy savings and promotion of innovative environmental measures. Google is also promoting a series of projects linked to sustainable development, such as the creation of electrical hybrid automobiles, the purchasing of bicycles for its workers, the granting of a 5,000-dollar bonus for any employee who buys a alternative-energy car and the use of bio-diesel buses to transport the more than 1,500 people who daily go to work at the firm’s offices in Mountain View, California.

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Accountability, transparency, a good working environment and proper wages, among other considerations, are just some of the traits shared by Enterprise 2.0 and the firms that operate under Triple Bottom Line (TBL) logic, which seeks to create environmental, social and economic value. Therefore, Enterprise 2.0 must necessarily take the road of sustainability and sustainable enterprises must orient their operations toward the 2.0 model.


Enterprise 2.0, Net Gen and Collective Intelligence • In 2006, some 120,000 people worldwide joined a project called Boeing World Design Team , an Internet forum that encouraged participation during the company’s development of its new Boeing 787 aircraft. The activities included conversations with the Boeing design team and extensive discussions regarding the preferences of the participants with regard to air travel and passenger planes. In the words of the company, “a group of flyers and aviation enthusiasts from across the world eager to share in the excitement of creating the passenger-friendly airplane of the future”. Those who built the technical excellence of the 787 know no national boundaries.

• While Pepsi and Coca-Cola are still keeping their soft drink formulas under lock and key, other companies decided to make theirs public. The wikiHow.com site, for instance, makes available a recipe for OpenCola , an open-source beverage that invites users to modify its ingredients in order to create a new and better product.

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More and more, companies are opening up their innovation departments to a worldwide community, which actively responds. More specifically, they are opening up to a digital generation accustomed to dialog and collaboration, people who are willing to form part of a virtual talent network.

• The LEGO firm, with its LEGO Factory , allows children and adults alike to design models (downloading free, easy-to-use software) and participate in competitions for a variety of prizes. Last year, the prize was 5% of the rights on each model sold through the site.

• Novartis is a pharmaceuticals firm that applies Wiki economy principles exactly as defined by Tapscott. After investing millions of dollars researching the cause of type 2 genetic diabetes, the company published all of its knowledge on the subject on the Internet. In making this decision, Novartis hopes that the worldwide scientific community will cooperate in accelerating the research process through participative investigation.

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When the World Began to Understand

Chapter 12

In 1992, a group of scientific professionals known as the Union of Concerned Scientists (UCS) published a manifesto calling attention to the state of the planet Earth. More than 1,700 of the finest minds from around the world — including 104 Nobel Prize-winners — signed the document. Its text warned: “If not checked, many of our current practices put at serious risk the future that we wish for human society and the plant and animal kingdoms, and may so alter the living world that it will be unable to sustain life in the manner that we know”. The manifesto urged governments, businesses and the world population to initiate a radical and urgent change in how the earth’s resources were managed, saying that this was the only alternative if the damage already in evidence was to be reverted. “A great change in our stewardship of the earth and the life on it

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is required, if vast human misery is to be avoided and our global home on this planet is not to be irretrievably mutilated”, they said, in terms that were as grave as they were pressing. This warning by the scientists wasn’t heeded. And it wasn’t the first. As mentioned in earlier chapters of this book, already two decades before the scientists’ manifesto, the report called The Limits of Growth (Meadows and others, 1972) had warned of the earth’s incapacity to respond to the predicted pace of consumption. In 1987, the Brundtland Report , put out by the United Nations World Commission for Environment and Development, advocated some form of sustainable development. Once again, Mankind failed to heed the call.


Crisis in the Third Millennium

The same year that the scientists issued their warning, certain business people weighed in on the sustainability issue at the Earth Summit (Rio de Janeiro, 1992). Almost simultaneously, the communications revolution was giving birth to the participative media and to citizens’ organizations possessed by the “blessed unrest” of defending the rights of all living things. Little by little, and driven by the relentless communicative power of the Internet, humanity began to react, no longer to the early wake-up calls, but to the inexorable turn of events. Be that as it may, the Third Millennium had to arrive before awareness of the global emergency would acquire universal dimensions. The Internet explosion, globalization and anti-globalization, the Social Forum and the advance of NGOs, the Indian Ocean tsunami, hurricane Katrina on the southern coast of the United States, droughts and flooding, the ever-expanding statistical gap between developing and emerging nations, any and all of these causes that came to the fore between the end of 2006 and the beginning of 2007 were sufficient reason for Mankind to finally take stock of the global disaster facing the planet. One straw too many finally broke the camel’s back. And the world was suddenly tinted green.

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Critical Condemnation in 35 mm Film An Inconvenient Truth, a documentary film analyzing the issues surrounding global warming, premiered in October 2006. In this film, former US Vice President and Nobel Peace Prize-winner Al Gore examines the scientific evidence regarding climate change and arrives at the conclusion that “if the vast majority of the world’s scientists are right, we have just ten years to avert a major catastrophe that could send our entire planet into a tail-spin of epic destruction involving extreme weather, floods, droughts, epidemics and killer heat waves beyond anything we have ever experienced.” The film had a great impact worldwide and bolstered the credibility of accusations from a variety of quarters that had fed other documentaries like The Corporation, a creation of Canadian directors Mark Achbar and Jennifer Abbot that came out in 2003 and analyzed the pathological behavior of major business groups, and Bowling for Columbine (2002), a searing critique of the US arms culture, by American film director Michael Moore. Fictional feature films also rode the crest of this new wave. In a few short years, such premieres included The Constant Gardener (Fernando Meirelles, 2005), Babel (a 2006 picture by Mexican film director Alejandro González Iñárritu) and Blood Diamond

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(directed by Edward Zwick and released in 2006) — films that took on such pressing issues as inequality, persecution of human rights activists and the horror of child abuse. All of these movies received noteworthy prizes – including several Oscars – as well as the applause of the mass public.


We’re All Environmentalists

In the face of governments’ failure to respond to the demands of citizens and NGOs regarding the issues surrounding the climate change emergency, unlimited resource consumption and situations of extreme poverty, several international celebrities decided to head up campaigns to save the planet. Actor Leonardo DiCaprio is one of the most active stars in the struggle to preserve the environment. He has been running his own foundation since 1998, is a member of the Board of Global Green USA and has been the producer and author of a number of ecological shorts and documentaries, such as Water Planet and The 11th Hour. The actor has also opened an Internet forum where visitors are invited to propose advice on caring for the planet, under the motto “we can all be environmentalists”.

Hannah is, furthermore, a staunch activist, who has carried the pros and cons of the bio-diesel debate to more than 10 million people worldwide, and generates weekly film shorts providing information or protests on environmental issues through her own video blog, “Daryl Hannah Love Life ”. Paltrow and her husband, Chris Martin, who is the leader of the musical group, Coldplay, are also noted fair trade activists. Unfurling slogans like “Stop CO2” and encouraged by the actions of Governor Arnold Schwarzenegger —who managed to push through a law providing that California must reduce its greenhouse gas emissions by 25% before 2020— a number of celebrities are now backing the green cause. Among them are Julia Roberts, Susan Sarandon, George Clooney, Penelope Cruz, Forest Whitaker, Nicole Kidman and Kirsten Dunst, who demonstrate their support by traveling in eco-hybrid cars.

Cameron Díaz and Gwyneth Paltrow, for their part, lend their lovely faces to the Act Green organization. They also participated in the institutional video put out by the Environmental Media Association (EMA) , an organization that, since 1989, has been mobilizing the entertainment industry in an effort to promote environmental education. The list of award-winning stars who have lent their fame to the cause includes Pierce Brosnan, Daryl Hannah, Alanis Morissette, Edward Norton and John Travolta.

There are those, too, who participate in campaigns like Oxfam, an organization that lends its cooperation to more than 500 development programs, is active in emergencies, promotes fair trade and fosters social mobilization. Its member list includes such stars as Gael García Bernal, U2’s Bono, Antonio Banderas and Scarlett Johansson.

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One of the true high points of this sort of activism was Live Earth , a concert held in 2007 to spark worldwide awareness regarding the dangers of global warming. The event, broadcast live to more than 2 billion viewers around the world, took place on seven continents and brought together more than a hundred musicians. It was simultaneously telecast from such cities as Johannesburg, London, Sydney and Shanghai, and included performances by the Red Hot Chili Peppers, Maná, Black Eyed Peas, Snoop Dogg, Lenny Kravitz, Bon Jovi, Shakira, Roger Waters and Madonna, among many others. Before and after the different performances — emceed by Alec Baldwin, Kevin Bacon and other committed show business personalities — a campaign called SOS, Save Our Lives, was developed, including short documentary films and public interest announcements on radio and TV.

Media that “Scan” and Replicate The traditional communications media couldn’t help but echo this veritable “green revolution” that burst onto the public scene between the end of 2006 and the beginning of 2007. In April 2007, The New York Times Magazine published an 11-page article entitled “The Power of Green”, in which Thomas L. Friedman analyzed the geopolitical changes that new sustainable values were producing worldwide. Just a month later, Vanity Fair Magazine carried its second annual Green Issue7, the cover of which was specially illustrated with a photo of actor Leonardo DiCaprio posing on a frigid landscape in Iceland.

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The Advance of a Cultural Change As the UCS and a number of different reports have long since warned, substantial environmental damage is currently being done that will have an inevitable effect on present life forms. In the words of US evolutionary biologist Elisabet Sahtouris: “… We not only pollute and destroy our vital ecosystems, including the air we breathe and the water we drink, but we also let 25,000 children die of hunger and easily preventable disease every single day (that is, 175,000 a week; over 9 million every year) without even considering this important information!”. Both the damages caused by climate change and dwindling resources, and those resulting from the unfair distribution of wealth that hinders a dignified lifestyle for many, are the consequences of Man’s actions. Therefore, in order to put a stop to these damages, a new global paradigm is required. While such a paradigm involves, especially, human productive activities, it clearly goes beyond these, since it further implies modification of behavioral patterns that include everything from consumption to leisure activities. The Net Gen is making an essential contribution to the values demanded by this new paradigm, since among the members of this generation, there is already a consensus regarding the following premises:

• • • • •

The predominance of being over appearing to be, which facilitates choice. Authentic respect for oneself and transparency toward those who surround one. An open attitude, as evidenced in relationships that facilitate community participation and a sense of belonging. Creativity and innovation as predominant traits, both on the job and off. Access to new technologies, which contribute speed and effectiveness, within the framework of a bottom-up logic.

Enterprise 2.0, which has culled many of its values from the Net Gen and channels them into the corporate environment, provides new responses to the rigidity of old collaborative platforms and applies technological tools to generate a receptive and participative internal culture in the company. Nevertheless, its most outstanding contribution to new values has focused mainly on the circulation of ideas and knowledge management, as these relate to the principle of collaboration and the sharing and generating of collective intelligence on a worldwide scale.

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Old paradigm values

New paradigm values

Present Human Being Irresponsible Production and Consumption Exchange Corporativism Welfare State Economic Growth Exclusion Appearances Secrets Individualism Competition Old Technologies Top-Down Logic Individual Knowledge Local Scope

Future Life Environmental, Economic and Social Accountability Interaction Association Welfare Society Sustainable Human Development Equality Authenticity Transparency Participation Collaboration Web 2.0 Bottom-Up Logic Collective Intelligence Global Scope

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Epilog: The 2.0 Era Is Born

How do you put together a jigsaw puzzle when you don’t know what the final design will look like? By seeking and finding the pieces that form the outer edges first. In this book, we’ve established an outer framework, laying out some pieces without knowing what the final image will look like, but having an idea that the figure that starts to take shape, following three years of research, is that of inexorable change. These outer borders indicate that the sustainability tipping point has arrived, that everything that was considered of vital importance 15 years ago has now, additionally, become urgent. And thus, the jigsaw pieces that are accumulating within the framework and that remain mixed up and seemingly disconnected, all have, nonetheless, a common denominator: their urgency. There is no longer any time or resources available to humanity to allow it to keep on indulging in irresponsible conduct with regard to the planet and, indeed, to its own species. But just as in the case of a real jigsaw puzzle, the global transformation requires organization and planning. So says Thomas N. Gladwin when he states that “large-scale organizational transformation toward sustainability is a long-term and multi-level challenge, entailing a range of reinforcing roles and tasks” and

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when he goes on to suggest that, as a first step toward this, “vivid images of sustainable futures must be painted”. Everyone needs to work together to create the final draft of our common future. This is a vision in progress. And all indications are that, within the next half-decade, the world is going to be a radically different place. The trends we have described in this book are the troubled waters that will generate the waves of substantial change to come. The first of these waves is the worldwide associative revolution “the largest movement in history”: the rise of millions of organized citizens, who, based on new development technologies and new communications media, work and cooperate among themselves to find solutions to the most urgent problems facing them. The second wave is the one that companies like Natura, Patagonia, Wal Mart and Home Depot are riding, companies that have sealed a new kind of social pact with their customers, founded on the values of sustainable development. And this is a commitment that must not be underestimated, since once expressed, it places the company, its products, its strategy and its profitability under the critical eye of investors, competitors


and consumers alike, who will all question and analyze every move they make, thus clearing the way for a whole new production and consumer logic. Playing a decisive role in strengthening these waves on whose crest ride citizens and consumers —the protagonists of that “vivid image” of a sustainable future suggested by Gladwin— are the tools of Web 2.0, which allow any person anywhere to film, photograph or write about a business or a public institution and publish that information on the Web. Blogs, social networks and free publication platforms like YouTube are transparent and collaborative and are the ones used by consumers and citizens alike to regulate the action of companies and governments. It is here where information circulates regarding forms of production and the social and environmental impact of the products on which purchasing decisions are later made. And here too is where information is disseminated about government action, and on the basis of which votes will later be cast. The value revolution is up and running and the vehicle for its advancement and its fundamental tool is Web 2.0. Out of the signals issuing from enterprises and common citizens via the net, a new cosmovision is taking

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shape, a new global awareness aimed at placing the interests of life and the species above those of the individual. Along with these waves, these driving forces behind new practices and values, a new capitalism is being born: conscious capitalism. In the midst of this urgency, amid these troubled waters, humanity is finally understanding. And as Bill Drayton says, “Every time we are about to make a decision, we should think of the people around us and ask ourselves if that decision is going to cause a problem for any of those people. If that’s the case, change it or don’t do it”. The building of this new world is already underway. The new generation of youngsters, the Net Gen, has entered the scene. This is a generation that was born immersed in a digital world, accustomed to taking action on reality, changing it to respond to their own tastes and interests. It is a generation that not only imagines a new model, but also knows how to bring it into practice. What will happen in, say, ten years, when these youngsters are in decisive positions in enterprises and civil society organizations, reorganizing them under their new logic? What will happen when, rising from their role as consumers, they exert power over the markets?


The questions multiply like the signals that point to a transformation toward Sustainability 2.0. Adapting no longer signifies a mere corporate decision: Now, what it means to companies is their possibility for surviving in the future. Change, then, is no longer an option. It is a need. And change implies redefining corporate culture and readapting productive processes, bearing in mind their social and environmental impact, while taking into account, too, their economic results and the values imposed by the Net Gen. In order to achieve change, organizations must retool for operation in the world of Web 2.0, since this is the scenario in which enterprises can interact with their consumers and stakeholders alike, in an honest, open and transparent way. Such are the pieces of the puzzle that, driven by the coming of the new media, are beginning to occupy the space inside the framework laid out on the table. This is a time of change for humanity. It is a time for decisions. And as always, destiny is in our hands. The native peoples of North America told a story that couldn’t be better to summarize the magnitude of this new challenge: A Cherokee elder told his grandchildren who were gathered with

him around the fire: “In every life, there is a terrible fight, a fight between two wolves. One is all evil, fear, rage, envy, greed, arrogance, self-pity, resentment and deceit. The other is all good, happiness, serenity, humility, trust, generosity, truth, gentleness and compassion.” After a long silence, one of the children asked: “But Grandpa, which of the wolves will win?” The Cherokee elder looked at the child and said: “Whichever one you feed”.

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Business Case Studies

Appendix 1 Pioneer Companies When they first emerged, sustainable business practices were led by a handful of pioneer companies. They acted in the face of the social and environmental emergency and driven by the new role of consumers. Generally speaking, these companies were —and still are in many cases— managed by “visionaries” or individuals who were “ahead of their time”. These were business people who were aware of what was happening before anybody else saw the signs of change. And even at the risk of being considered eccentric, they turned deaf ears on criticism and forged ahead to realize their vision.


Starbucks

A nice working environment and good long-term proďŹ tability are the values emphasized by Starbucks Coffee Company, the largest chain of coffee shops in the world , with 7,521 selfowned stores and 5,647 franchises in 39 countries, 140,000 employees and annual billings in2006 of nearly 7.77 billion dollars. Founded in Seattle, Washington, in 1971, Starbucks is a pioneer enterprise in the social responsibility practices that it has applied from the very start, in a rigorous set of commercial policy principles based on six main standards: 1. Provide a great work environment and treat each other with respect and dignity. 2. Embrace diversity as an essential component in the way we do business. 3. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. 4. Develop enthusiastically satisďŹ ed customers all of the time. 5. Contribute positively to our communities and our environment. 6.Recognize that proďŹ tability is essential to our future success.

Based on these principles, Starbucks promotes numerous actions and a variety of different programs related to sustainable development. But its pioneering role is embodied in its mission to ensure that those who grow and harvest the coffee it serves do their work under conditions of dignity and respect for labor laws. For this purpose, Starbucks has formulated what it calls the C.A.F.E. (Coffee and Farmer Equity) Practices, a series of standards that involves coffee growing and processing and compliance with which guarantees a sustainable supply of the highest quality coffee. The C.A.F.E. Practices are directly related to Triple Bottom Line policies, since, among other rules, they include the following obligations:


• To promote economic responsibility (by paying fair prices to farmers and suppliers). • To assume social responsibility (by ensuring safe, fair and human working conditions and by complying with proper wage and workday guidelines). • To protect the environment (by controlling waste, protecting quality, conserving water, making efficient use of energy, preserving biodiversity and reducing agrochemical substances). In order to obtain C.A.F.E. Certification, suppliers must submit to an independent audit to evaluate to what extent they comply with the requirements. In 2006, more than 50% of all of the coffee the Starbucks chain purchased (about 70,000 tons of it) came from C.A.F.E. -certified suppliers. The company’s goal is to get a greater number of suppliers each year to comply with these good practice standards, which has led the firm to carry out a variety of promotional and training activities in the different coffee-growing regions of the world.

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The Whole Foods Market

“A virtuous circle entwining the food chain, human beings and Mother Earth”: That’s how The Whole Foods Market defines its business policy. The company is the largest chain of natural and organic food shops in the United States. Founded in 1980 as a little natural products store in Austin, Texas, by 2007, it had grown into a chain of 196 stores distributed throughout the United States and Britain. Considered one of the world’s fastest-growing self-service stores, its earnings are expected to rise to 10 billion dollars by 2010. Company spokespeople say that the three concepts that define the firm’s policy —food chain, humanity and planet— are linked in a close and delicate symbiosis that makes them interdependent. It is for this reason that, from the outset, the company has applied a careful selection process for all of the products it sells, maintaining a strong commitment to sustainable farming and small organic food producers. Currently, 100% of The Whole Foods Market’s energy needs are covered via the purchasing of wind power credits, and five of its stores in California and New Jersey make use of solar

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panels to generate renewable energy . The company’s stores promote the use of cleaning products with reduced toxicity levels and returnable containers, and the firm has a reducedwaste program consisting of giving customers five cents for every plastic bag they return. The firm also donates 5% of its earnings to philanthropic causes and provides backing to a variety of environmentalist organizations. The Whole Foods Market’s vision embodies a change of values that is totally aligned with the tenets of sustainable enterprise, since its products are oriented toward customers who value creativity, diversity and freedom of choice and it works with responsible suppliers that make use of processes and materials that do not undermine the broad spectrum of the individual and planetary eco-system. The self-service chain has also shown itself to be in the vanguard in terms of communications. It has six blogs on the Web, one of which —The CEO’s Blog — is published and managed by John Mackey, company CEO, who personally responds to questions and comments from customers and the general public.


Patagonia

Patagonia Inc. was founded in Ventura, California, in 1972. Since then, it has garnered worldwide recognition for its corporate care policies in defense of the environment and for the creation of a sustainable business model. Devoted to the design and production of outdoor clothing and outfitting (mountaineering, camping, skiing, snowboarding, surfing, fishing and trekking gear), the firm markets products through free-standing shops and on-line catalogs. Its 2006 sales amounted to nearly 270 million dollars. Patagonia’s mission statement is: “Make the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis.” Through its foundation, the company has demonstrated conduct that is clearly aligned with this mission and has thus never been the target of accusations or campaigns by consumers or civil society organizations. Patagonia was the first retail textile company to replace cloth

that made use of non-renewable raw materials with organic cotton: Since 1996, this is the only type of cloth used in its clothing line. But it was also the first to use a type of polyester made from recycled soft drink bottles in its clothing production process. The company is a co-founder of an alliance called 1% For the Planet12, whose members donate 1% of their sales to environmentalist groups worldwide. Since 1985, when this initiative began, Patagonia has given away more than 25 million dollars to ecological organizations. Furthermore, as part of its own environmental campaign, the company gives one dollar more per day to any employee that uses an alternative means of transport to get to work. All waste products like glass, plastic and paper generated by the company are recycled for reuse. The firm’s restrooms have a low-consumption water system, its lighting is 100% windpowered, and all electrical appliances are consumption-efficient. Additionally, for the past several years Patagonia has been

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taking part in a campaign to protect marine fauna and to halt pollution of ocean waters. The company’s labor policy promotes the development of a pleasant working environment. Patagonia offers its employees extra benefits, such as eight weeks of paid maternity and paternity leave, complete medical insurance coverage, and two-month exchange programs, with pay, for those who wish to work in non-profit environmentalist organizations. In addition, the company’s corporate headquarters organizes monthly management and staff forums in order to provide a venue in which to air opinions, proposals and demands regarding the firm’s operations. Thanks to these attributes, in 2006, Patagonia was ranked 15th among top employers, by the Great Place to Work Institute of the United States. Patagonia disseminates information about its operations and actions through its website at www.patagonia.com and through its advertising campaigns. It also has its own blog , where company employees and customers can leave their comments and upload items of interest.

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Natura

By the dawn of the third millennium, the Natura cosmetics firm of Brazil was already taking shape as an emerging new paradigm model for business. As of its creation in 1969, the company sought to create value, not only for its shareholders, but also for its consultants — more than 500,000 of them throughout the country — while protecting the environment. In 1974, its owners adopted a direct sales format, creating a team of consultants in charge of putting together their own client portfolios and reselling the company’s products to them. Natura’s sales strategy proved highly successful and, as of 1994, permitted it to expand to other countries. In 2000, the company made hefty investments in infrastructure and training, which allowed them to build Espacio Natura, a major center for cosmetics production, logistics, research and development. These investments also permitted the firm to launch its Ekos line, consisting of products including active ingredients from Brazil’s bio-diversity and obtained by sustainable means. Today Natura leads the field in Latin America in cosmetics,

personal hygiene and perfumes, with a catalog of more than 600 products, a list of 5,000 collaborators and a veritable army of 617,000 consultants distributed throughout Brazil, Argentina, Chile, Peru, Mexico and France. According to the firm’s last published annual report, it had earnings in 2006 of over 8.3 billion dollars, up 19.9% over 2005 figures. Like most cosmetics firms, Natura has been called into question by a variety of organizations for making use of animal testing for its products. As a result, as of 1997, company management decided to reduce the use of this type of testing and since 2000, the firm has been investing three million dollars a year to study alternative methods. Since its creation, Natura has been highly committed to sustainable development, embodying a corporate accountability model in line with environmental care and social responsibility. Natura says that its business management style is founded on two basic pillars: 1. Ethical and transparent relationships with its stakeholders

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(collaborators, suppliers, communities, consultants, consumers, governments, shareholders and society). 2.Business goals that are compatible with sustainable development. Natura has such a long history of sustainable practices that it has long since become a model for many young companies. In the 1980s, it was the first Brazilian cosmetics company to promote the use of product refills, making use of containers that were more environmentally friendly. Since 1995, it has been running a program in association with the Abrinq Foundation called “Creer Para Ver” (Believe It to See It), the aim of which is to finance programs that contribute to improving public school education. In 2006, the company managed to lower its water consumption by 7% and its power consumption by 1% per unit sold. In 2008, it plans to eliminate the greenhouse gas emissions generated by its installations, so as to render the firm “carbon neutral”. Natura publicizes its actions through its website at www.natura.net and through advertising campaigns in the major mass media.

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Life is a chain of relationships.


Ben & Jerry’s

Ben & Jerry’s is the famed ice cream maker that was the enterprise of two friends that shared a certain sort of hippie mystique: namely, Ben Cohen and Jerry Greenfield. The company that they founded with a 12,000-dollar investment in a converted service station in Burlington, Vermont, in 1978, today has more than 580 franchise stores worldwide. In April 2000, the German-origin multinational giant Unilever — with interests in food, beverages, beauty and personal hygiene products and annual sales of 46 billion euros — bought Ben & Jerry’s and turned it into one of the group’s subsidiaries. According to the last financial report that Ben & Jerry’s published, corresponding to the year Unilever bought it, its annual profits were already in excess of 237 million dollars. Starting in 1985, Cohen and Greenfield donated 7.5% of their yearly pre-tax profits to the Ben & Jerry Foundation, for distribution among worthy philanthropic causes. One of the pre-conditions for sale of the firm to Unilever was that the multinational would continue to donate the same percentage of profits to charitable causes, plus 5 million

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dollars a year for the development of minority businesses and another 5 million dollars annually to be distributed in employee bonuses. Be that as it may, once the company had been acquired by Unilever, it began to be questioned by many consumers for selling out the ideals it had preached as of its origin. The fact is that by mid-2007, the only really concrete criticism the company had received in this sense was for layoffs among its workers. In 1998, Ben & Jerry’s drafted a mission statement built on three premises: 1. Product Mission: To make, distribute and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment. 2. Social Mission: To operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality


of life locally, nationally and internationally. 3. Economic Mission: To operate the Company on a sustainable financial basis of profitable growth, increasing value for its stakeholders and expanding opportunities for development and career growth for its employees. Ben & Jerry’s also formulated an environmental care commitment, implementing four programs encompassing the use of paper and packaging made of recyclable materials, energy savings, application of sustainable farming principles, and waste reduction and recycling. The company additionally participated in the HIER initiative for Climate-Neutral Products, developed by a consortium of 38 Dutch NGOs, and including the WWF, Greenpeace, Friends of the Earth and the International Red Cross. Ben & Jerry’s history, mission and product information and company news are communicated to the public through the firm’s website at www.benjerry.com.

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Appendix 2 Companies that Changed In these first years of the new millennium, many companies have produced genuine transformations in their ways of doing business. They have understood that, within the framework of the new paradigm, reorientation of their mission, direction and commitment is a priority, in keeping with the demands of a human race that urgently wants and needs to be sustainable. These firms —at times due to decisions by their CEOs, shareholders or management, at others, as a result of reports or demands that have forced action to be taken— have ended up assuming the fact that in a global world and in the era of participative media, the consumer has the last word and it is no use trying to ignore it.


Toyota

A company that has made and continues to make major changes is Toyota Motors, one of the three largest car manufacturers in the world, according to the Fortune Global 500 ranking for 2006 , and the eighth largest company on the face of the earth.

mixes with the air to produce electric current to drive an electric motor. In 2005, the Prius was named Car of the Year in Europe by a jury of expert journalists from 22 countries. According to the publication Consumer Reports, it was also the “green” car most often chosen in the United States in 2006, and the one preferred by such environmentally committed celebrities as Leonardo DiCaprio.

First founded in 1933, the Japanese firm started making the first mass produced hybrid automobile in 1997: the Toyota Prius, which features a mixed electric and gasoline-powered system that is computer operated. When the driver is stopped at a traffic signal or is stuck in heavy traffic, the gasoline motor shuts down automatically to save fuel and reduce pollution. When the car needs to move, the electric motor kicks in and the gasoline engine only starts up when the driver requires greater acceleration.

The hybrid line’s success really shows in Toyota’s finances: In April 2007, the company reported an 11.7% increase in sales, driven by record figures for hybrid vehicle sales . In May 2007 the firm sold more than 24,000 Prius model units, a 185% increase on the same month in 2006, placing the company at the top of the automotive industry ranking.

Currently, Toyota is working on developing fuel cell automobiles. Fuel cells are a series of membranes in which hydrogen

Toyota also provides economic support to NGOs, schools and universities, for the development of community programs.

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General Electric

General Electric (GE) is gleaning major benefits from its investments in sustainability. The company recently reported a 12 billion-dollar profit on sales of new products with a high component of ecological value and efficiency, launched in May 2005 as part of its Ecomagination program, which promotes the development of alternative energy and more environmentally friendly technologies. But in the case of this multinational, with industrial plants in over a hundred countries and 316,000 employees worldwide, the change toward cleaner production processes was born to a large extent of lawsuits and complaints regarding environmental pollution that were undermining GE’s reputation and its finances. In 1991, GE came under fire with the release in the United States of film-maker Debra Chasnoff’s “Deadly Deception: General Electric, Nuclear Weapons and Our Environment”, a

documentary showing the consequences of secret experiments and toxic nuclear waste-handling carried out by the company for 21 years in Hanford, Washington. The picture featured interviews with former GE employees and townspeople and discussed the birth defects and health problems that people in the area had suffered. The impact of the movie —which won an Oscar in 1992 for Best Short Documentary Film— underscored government-linked corruption and fraud scandals that questioned GE’s participation in arms production and its designs for nuclear plants in different areas of the world. Finally, in 2001, the US Environmental Protection Agency (EPA), sanctioned GE for dumping PCB —a highly toxic organic compound —ordering the company to provide several areas in the Hudson River Basin with drinking water . And as of 2007, GE has been forced to pay out nearly 500 million dollars in compensation to users and former employees who suffered the effects of pollution derived from the asbestos used to insulate turbines built by the firm.

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It was in response to these issues that GE was obliged to adapt to the new rules implied by sustainability, in order to ensure its own survival. And so it was that, in 2004, the company launched Ecomagination, a program by which GE made four major commitments for the years to come: 1- To increase the amount it invests in research and development programs to ďŹ nd reduced pollution technologies to 1.5 billion dollars (from 900 million in 2006). 2- To increase sustainable product sales, with a view to their reaching 20 billion dollars in 2010. 3- To achieve a 1% reduction in total worldwide greenhouse gas emissions by 2012 and to reduce their intensity by 30% as of 2008. 4- To attain 30% improvement in energy efďŹ ciency by the end of 2012. In order to keep the public informed of its progress in complying with the commitments it has assumed, GE maintains a website devoted entirely to its sustainability program .

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DuPont

only paid the fine, but also put up 6.25 million dollars more to finance environmental projects.

This is another highly publicized case of a company that faced major legal action for polluting the environment. DuPont is a US-based multinational that is recognized for its development of such materials as nylon, neoprene, Teflon, Lycra, Vespel, Kevlar and cellophane, among others. It has operations in more than 70 countries, 60,000 employees worldwide and earnings of 27.4 billion dollars in 2006 .

In recent decades, DuPont has demonstrated an intense commitment to environmental sustainability, by developing bio-materials as alternatives to petroleum by-products and by economically supporting more sustainable production options, like polymers manufactured on the basis of corn starch, a project that is already providing the company with good results .

In 2005, a group of consulting scientists for the US Environmental Protection Agency (EPA) determined that one of the chemicals used in Teflon, perfluoroctanoic acid (PFOA or C8) was a cancer-causing agent. When residents in an area surrounding a DuPont production plant heard the results of the scientific testing and found out that their water supply had been polluted with PFOA dumped by the company, they decided to bring suit against the firm . The company denied that there was any direct connection between Teflon and cancer, and to demonstrate their point, they carried out a study among their employees. The results of the study failed to provide conclusive evidence that PFOA was a carcinogen. But the court decided to fine DuPont 10.25 million dollars anyway, for having kept its PFOA specifications secret for 20 years. The company not

Each year, DuPont earmarks about 500 million dollars for environmental projects, and has set certain goals, among which are the following: • To reach zero-level for injuries, occupational illnesses and environmental accidents. • To achieve zero-level for waste and pollution emissions. • To constantly improve production processes and practices. • To accept accountability and provide a response through the commitment of company leaders and employees alike.

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Home Depot

Home Depot, the largest sales chain for construction materials and home improvement items in the United States, was one of the first companies to heed the claims of environmentalists that demonstrated in front of their places of business, and called on its suppliers —especially of furniture and other items made of wood— to employ sustainability models in their use of raw materials and production processes. In 2006, Home Depot took this strategy a step further, sending a note to its suppliers of 176,000 products, inviting them to incorporate their articles into the chain store’s Eco Options campaign, the aim of which was to green-sticker all products on sale in its stores that presented one or more of the following traits: sustainable in terms of woodland management, energy efficient, passes clean air standards, efficient in terms of water conservation. In response to the Home Depot proposal, more than 60,000 products —in addition to the obvious ones, like organic gardening products or energy-saving light bulbs— swiftly developed sustainable profiles. Although debated by certain

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environmentalist organizations —which consider the criteria that the company applies entirely too broad— these products have expanded the list of 2,500 environmentally friendly products that the company was already offering in its 2,100 commercial outlets in the United States, Canada, Mexico and China. Within the framework of its social insertion campaign, the firm has also created The Home Depot Foundation, an organization through which it carries out actions aimed at helping create a community that is more committed to caring for the earth. Despite its apparently excellent reputation, until very recently this wasn’t enough to keep Home Depot from being the object of accusations and lawsuits by former employees charging racial and gender discrimination against minorities and women. In this case, the demand for change toward sustainability came from the shareholders, who, alarmed by such accusations, in 2006 called on Home Depot to provide detailed information identifying employees by gender, ethnicity and job descriptions, so as to be able to rectify any discrimination detected.


Interface

Interface Inc. is one of the main carpet-making chains in the world, with daily production reaching 450,000 kg of carpeting and synthetic materials and 2006 sales of nearly 1.08 billion dollars. Founded in 1973 in LaGrange, Georgia, USA, and currently headquartered in Atlanta, the firm has more than 7,300 employees, at 26 factories and offices, in nearly 100 countries. Founder and Chairman Ray C. Anderson has said in interviews that when he founded the company back in the ‘70s, he wasn’t worried about the environment, but limited his action to complying with standards imposed by the government in order to keep out of trouble. It was only in 1994, as a consequence of complaints by environmental organizations, that he decided to seriously look into the impact his company was having on the environment and ordered his engineers to do a study. The alarm that the results of the study set off in him and his reading of Paul Hawken’s bestseller, The Ecology of Commerce, were the two factors that most influenced his decision to make radical changes in how he did business. He challenged his collaborators to set a time frame in which to turn Interface into a “restored company”.

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The deadline was finally set for 2020. Nevertheless, the benefits of the change, initiated in 1995, have gained strength throughout the company ever since. In statements to the media, Anderson has said that, at present, Interface has advanced by about 45% from where they were to where they want to be. In the company’s 2006 Sustainability Report , management says that in the last ten years, the firm managed to reduce waste by 70%, energy consumption by 45% and water use in its factories and offices by 80%. In that same period, it increased its renewable energy use by 16% and increased from 0.5% to 20% its use of recyclable, biodegradable materials in the composition of its products. Sales, for their part, have gone up by 49%. In 2006 , Interface kicked off its Mission Zero campaign, which foresees elimination by 2020 of any negative impact of the company on the environment. With a view to this goal, the company is promoting action on seven fronts: 1-The total elimination of waste in all areas of business. 2- Benign emissions to replace toxic substances from products,


vehicles and installations. 3- Renewable energy for the operation of 100% of the company’s factories and installations. 4- Closed circuit processes that make use of recovered and biodegradable materials. 5- Efficient transport of personnel and products so as to prevent waste and toxic emissions. 6- Generation of awareness in the shareholders and creation of a culture aimed at improving the quality of life of employees, their community and their surroundings. 7- Redesigning of the company’s way of doing business and adoption of a new business model that promotes sustainable development values. Interface publishes news of its actions on its website at www. interfacesustainability.com. Its sustainability programs have saved the company over 336 million dollars since 1995. Its strategy has become so successful that, in 2006, the firm created a consulting division to market its methods among other companies.

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Nike

Nike into the eye of the storm with publication of her book entitled No Logo: Taking Aim at the Brand Bullies, in which she analyzed the impact of major corporations on world society. And in 2004, the Canadian film documentary The Corporation, co-directed by Jennifer Abbott, Mark Achbar and Joel Bakan, actually showed internal Nike documents revealing the cost/benefit ratio of a piece of clothing manufactured in the Dominican Republic. Bottom line: an item that sold to the public for 60 dollars only provided the worker that made it with eight cents in pay.

Nike is a multinational firm dealing in clothing, footwear and sporting goods. It is the most important company of its kind in the world. Founded in the United States in 1968, it currently controls 50% of the sports shoe market in that country. Based in Beaverton, Oregon, the firm employs more than 26,000 people and is present in at least 16 countries. In 2006, Nike reported record billings of over 14.95 billion dollars. In the 1990s, the Nike trademark began to be linked to labor exploitation. In 1993, the firm was severely criticized for the use of child labor in some of the factories that it owns or has under contract in various countries in Asia and Latin America. The accusations became much harsher and wider-spread in 1997 with the release of the critical film, The Big One, by director Michael Moore, in which Nike figured as one of the major US-based multinationals that were using slave labor to make their products. The huge repercussions that the film wrought caused Nike CEO Phil Knight to announce in 1998 that, as of that moment, the company was banning the contracting of anyone under 18 years of age. Three years later, Canadian writer Naomi Klein again shoved

A number of NGOs (Global Exchange and Nologo.org among them) have also lodged successive and repeated complaints against NIKE, and even today, some, like Oxfam Australia , continue to act as watchdogs on the sports clothing industry to make sure that it respects labor rights. The damage caused by all of this was not merely to Nike’s image. When the scandal about the conditions under which its products were made first broke in 1993, Nike’s shares tumbled by more than 50 % . And the firm obviously felt

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the impact, since it decided to take action and since 2000, it has implemented a series of social responsibility programs. Thanks to these, it has managed to start sparking a recovery in its share price. At present, Nike has a program in place called Innovate for a Better World, which pursues the following basic goals: 1- To improve conditions in contracted factories: Nike inspects these shops periodically and, based on the results, decides whether or not to renew its contracts. Furthermore, for the ďŹ rst time ever, it has published the tools employed to audit contractors on a website at www.nikeresponsibility.com. 2- To design a better world: The company has undertaken actions aimed at eliminating PVC and the use of volatile chemicals. Additionally, it has begun to make use of organic cotton and of rubber with a lower level of toxic components. The goal is for all of its products to contain at least 5% organic cotton by 2010 — an amount that would represent 25% of the entire world production of organic cotton. 3- To be climate neutral: The ďŹ rm announced that by 2011, all of the factories it owns will be climate neutral. 4- To free human potential through sports.

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Wal-Mart

Wal-Mart Stores Inc. is the world’s largest retail corporation. It has 6,500 commercial establishments, nearly 2 million employees and in 2006, its total sales came to more than 315.42 billion dollars, producing earnings of over 11.23 billion dollars. For years, the company has come under fire worldwide for its labor policies. On the Internet, there are numerous webpages and blogs like www.wakeupwalmart.com and www. waltmartwatch.com, where employees and ex-employees of the chain alike take the retailer to task, usually for non-compliance with labor laws, low pay and lack of proper medical insurance. Wal-Mart is also accused of unfair competition, due to the fact that its low prices and business policies have spelled the closure of small and medium-size stores in many locations where it has set up shop. This was the subject of a film documentary called Wal-Mart: The High Cost of Low Price , released in November 2005. But running counter to this reputation, the company has also garnered recognition for its efforts to reduce energy use, to lower pollution and to promote the use of renewable raw materials. Wal-Mart has also been a pioneer in marketing organic products.

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After displaying products of this sort in its stores for years, in 2005, the company made a corporate-wide decision to accept the challenge of also incorporating them into items under its own brand name. As a trial experience, it placed 190,000 yoga outfits made using organic cotton on sale in its stores. Every one of the outfits was sold within ten weeks. Bearing in mind the positive response of its customers, the retailer decided to extend the test to bath linen, bedclothes and baby clothes. As a result, today Wal-Mart is the world’s largest buyer of organic cotton and is developing plans to encourage its customers to demand more environmentally friendly products. In February 2006, under the leadership of CEO Lee Scott, WalMart launched its Sustainability 360 plan. This plan includes an annual investment of approximately 500 million dollars on innovation and technology, with the aim being to achieve the following objectives: • To reduce the greenhouse gas emissions at the company’s establishments worldwide by 20%, within a period of no more than seven years. • To design and open more efficient stores that emit a 30%


• • •

lower level of greenhouse gases within a period of no more than four years. To reduce by 25% the company’s solid waste substances within the next three years. To improve Wal-Mart brand product packaging within the next two years. To increase the number of environmentally friendly products in the stock of the entire chain by 20% within a three-year period.

According to monitoring carried out by the Nielsen consulting agency (BuzzMetrics Sustainability Monitor ), Wal-Mart is the most highly mentioned company in blog commentaries where the word “sustainability” appears. This only goes to show that even a company as large and highly questioned as Wal-Mart can go a long way toward turning around its strategy and demonstrating more responsible behavior without renouncing its money-earning goals. Through these actions, Wal-Mart is educating millions of consumers and suppliers, while generating a substantial change throughout its entire value chain.

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Appendix 3 Sustainable Companies 1- Long-term vision 2- Respect for the diversity of Man and Nature 3- Eco-efficiency in processes and products 4- Transparency in management 5- Participation in social construction 6- Cooperation with other business and civil organizations 7- Participation in multi-plural, multi-cultural, multi-sectorial networks 8- Respect for human and labor rights 9- Education and learning for workers and the community 10- Inclusion, equity and equality in access to opportunities

Depending on which of the different international consulting groups you ask — SustainAbility, Acre-Resources or ABC — the defining principles of sustainability number over 50. But the ten that head this appendix are repeated on almost every list, since, given their importance and scope, they summarize the essence of the Triple Bottom Line. Since the end of the 20th century and the beginning of the 21st, the world has witnessed the emergence of a new generation of companies, conceived and founded in perfect harmony with the principles of sustainable enterprise. They provide the best examples to explain what it means to produce within the framework of the new paradigm.


Nau

Long-term vision, respect for the diversity of Man and Nature, and participation in social construction are key values in the organizational culture of Nau , an apparel firm founded in 2005 by a small group of upper-level executives from Patagonia and Nike that decided to quit their jobs and develop a project of their own. Trained at companies that played a major role in changing the industry, it was only natural for these partners to line up with the values of the new paradigm. From the outset, they made clear their belief that it was as important for companies to take responsibility for producing positive social and environmental changes as it was for them to turn a profit. In keeping with this philosophy, in producing the clothing that Nau makes, they use only renewable natural fibers and synthetics derived from recycled plastic. And the company focuses its strongest marketing strategy on Internet sales, not only as a means of cutting costs as compared with traditional sales methods, but also because it implies major savings in the consumption of energy and non-renewable resources. The company additionally donates 5% of its profits — estimated at 11 million dollars for 2007 — to non-profit organizations engaged in programs supporting humanitarian causes or

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alleviating environmental problems. Company CEO, Chris Van Dyke, goes much further in explaining the firm’s mission, saying that Nau challenges the very nature of capitalism and “represents a new form of activism: entrepreneurial activism”. In backing up this statement, he says that it is tied to a belief shared by all of the founding partners of Nau: “We believed every single operational element in our business was an opportunity to turn traditional business notions inside out, integrating environmental, social, and economic factors”.


Grameen Telecom

Respect for human and labor rights, cooperation with other business and civil organizations, defense of inclusion and equity and participation in networks are the central points that best define the project of Iqbal Quadir, a young businessman who grew up in rural Bangladesh.

Since the program began, community telephones have been installed in 40,000 villages, allowing some 50 million peasant farmers to be in communication with other parts of the country and the world. The phones are used, among other things, to exchange health information and product prices.

Convinced that “connectivity is productivity”, Iqbal proved himself early on to be anxious to assume the new challenges that the sustainability paradigm represented for the entrepreneurs of his generation. In 1997, eagerness to demonstrate leadership drove him to seek a solution for the telecommunications problem in his country, where citizens were relegated to the waiting list for more than ten years before they could obtain a telephone, for which they had to pay 450 dollars, one of the highest costs in the world.

“The program is not only socially beneficial, but has also turned out to be profitable, and has produced increased economic activity in Bangladesh, stimulating trade and creating new sources of income,” says Quadir. He adds that: “The economic impact is also important for the person who manages the telephone service. Rural operators are usually women, who, thanks to their work, can contribute about another 25% to the income of their homes.”

Combining the latest in wireless digital technology with the experience of the Grameen Bank in granting micro-loans to impoverished people, Quadir created Grameen Telecom and launched a program called Village Phone, with the aim of providing increased access to telecommunications for lowincome populations in non-urban areas, via mobile telephone terminals managed by rural operators — preferably women.

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Guayakí

The distinguishing value traits at Guayakí include ecoefficiency, management transparency, and education and learning for workers and the community. This company, founded by Argentine Alex Pryor and Californian David Karr, grows and processes organic yerba mate (a green tea that is a traditional beverage in several Southern Cone countries) and manufactures by-products. The project dates back to their college days at Cal Poly (California Polytechnic State University), when mate-drinker Alex imbued his friend David and other schoolmates with an acquired taste for this green herbal tea (traditionally drunk from a mate gourd through a metal strainer straw called a bombilla), where Alex had gone to get his degree in nutrition sciences. On observing the degree of acceptance that the drink — as popular in his country as it was exotic elsewhere — Alex took a long look at three equally significant facts: the growing value being assigned to the beneficial natural properties of this green herbal tea, criticism about the destruction of the rainforests that are the tea’s natural habitat, and repudiation for the harsh conditions in which the inhabitants of the rainforest areas live. Based on these observations, Pryor and his friend David Karr began to plan the start-up for an organic yerba mate-producing

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company. The idea would be for a company that cultivated the crop on plantations where the jungle was not cleared, using no chemicals and, at the same time, promoting sustainable forestry use and the welfare of native communities living in the production area. This area would be located in the subtropical forests found in the contiguous border areas between

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Argentina, Brazil and Paraguay — home to the Aché Guayakí (Gwy-uh-KEE) people and a place where the yerba mate grows. The company, which was finally launched in 1996, takes its name from this native people. In the beginning, the two partners worked from dawn to dusk every day, centralizing their operations in a trailer that Alex set up on the site of the first organic plantation. Over time, they were joined by friends and family members, giving birth to a joint enterprise involving new partners and collaborators. By 2007, Guayakí was marketing yerba in teabags and as a packaged drink, as well as selling the traditional mate gourds, bombillas and other accessories. All of the yerba used in their products is produced in a very special way: grown in the shade of the trees of the native forest, without carrying out any unnecessary land clearing, just as these plants were traditionally cultivated by native tribes. Their workers belong to the Aché Guayakí nation of Paraguay. Besides offering this indigenous people good jobs with decent pay, the company has signed an agreement with Margarita, chief of the Aché tribe, and they are now working together on a reforestation project aimed at giving the community back a sustainable forest habitat.


American Apparel

American Apparel operates out of Los Angeles, where its industrial plant cuts and sews all of the natural cotton clothing that the firm makes. From the outset, the firm decided that it would distance itself entirely from the “sweatshop” mentality of the trade. So it is that, contrary to the trend in much of the textile industry in the United States, in which textile firms contract shops in foreign countries where they can get the cheapest possible labor, this company decided to offer its workers good working conditions, much better than average pay, medical benefits, paid lunches and vacation, free English classes and travel expenses. Against all predictions by the traditional industry, American Apparel’s strategy has provided excellent results: Today it is considered one of the ten fastest-growing companies in the US textile industry. Between 2000 and 2004, its sales increased by 900%, in contrast with the 40% and 76% growth registered by its closest competitors (The Gap and H&M respectively). Dov Charney, founder and, since 1997, CEO, explains the trademark’s success as a response to market preference: “The goal is to make clothing people like without having to resort

196

to slave labor. And it looks like they like us...” Currently, American Apparel has more than 130 stores worldwide, with nearly 4,500 employees in the United States alone. In 2005, company earnings came to over 250 million dollars. In its webpage, Charney states: “We’re not going to exploit the poor or make things here or there because it’s cheaper. We’re going to make sure the business model is sustainable.” This is why the company has taken action to eliminate labor exploitation, while committing to environmental care, by developing sustainable products and practices. One of the company’s main initiatives is its line of clothing made of organic cotton, which is available in all of its stores. The firm indicates that its long-term plan is to gradually continue to integrate organic cotton into its production line until every American Apparel product contains a certain percentage of this fiber. Other areas on which the company is focusing its actions include: waste reduction, efficient water and power use,


utilization of renewable energy and research into more sustainable materials for the firm’s products and services. Under the leadership of the company’s flamboyant CEO Dov Charney, American Apparel develops its ad campaigns around a young and provocative aesthetic with a high level of social content. Another hallmark of the firm’s promotional strategy is advertisements that make use of ordinary people off the street instead of professional agency models. Many of its ads are made using company employees. Even Charney himself has appeared in several of them. American Apparel has been criticized in conservative sectors for frequently using images in its campaigns that show people in underwear or semi-nude in poses or situations with sexual overtones. American Apparel makes use of its website at www.americanapparelorganics.com to disseminate its environmental care actions and to detail the company’s general philosophy and campaigns.

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Seventh Generation

Seventh Generation is a leader in the manufacturing of sustainable home cleaning products. Based in Burlington, Vermont, its activities include the design and formulation of its own products, as well as supplier supervision, transport, marketing and consumer education. The name of the company is derived from a message put out by members of the Gayaneshakgowa Tribe during a meeting of the Confederation of Six Iroquois Nations, a meeting of Native Americans in the United States, that stated: “In each of our daily deliberations, we should consider the impact of our decisions on the next seven generations.” With this vision in mind, the company has created 100% recycled paper towels, napkins and hankies; biodegradable, non-toxic and phosphate-free detergents and cleaners; garbage bags made of 65% to 100% recycled plastic; chlorine-free diapers and 100% organic cotton tampons.

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Everything that Seventh Generation manufactures is made using non-toxic and environmentally innocuous materials. Far from undermining its earnings, the company’s use of non-polluting raw materials is responsible for its exponential growth: From 2001 to 2005, its profitability increased by more than 140%, while its share price value rose 300%. With a staff of just over 50 employees, the company’s 2005 sales came to 100 million dollars. Seventh Generation was conceived as a sustainable enterprise from start to finish. It is strongly committed to community and environmental responsibility and is oriented toward producing a positive change in society. The company’s mission statement says: “We create household and personal care products that are effective and safe for the air, the surfaces, the fabrics, the pets, and the people within your living home”.


The last corporate responsibility report put out by the company (2005) indicated that Seventh Generation had attained major improvements both in its products and in its packaging systems. The company communicates its actions to the public via its website at www.seventhgeneration.com and through its blog, where consumers can publish their comments on the ďŹ rm, its products and the actions it carries out. They can also interact with CEO Jeffrey Hollender, who periodically writes articles and provides opinions on the site. Hollender is, additionally, the author of Naturally Clean, where he explains the advantages of non-toxic versus traditional cleaning and the ďŹ ner points of the products that his company makes.

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Sambazon

Based in California (USA) Sambazon Inc. is a company whose main activity is the harvesting and processing of the açai fruit, a drupe that grows on a specific type of palm that is native to Brazil’s Amazonian region. This berry-like drupe is rich in anti-oxidants, essential fatty acids, amino acids, fiber and vitamin E. It is used to make a mild pulp used in beverages, ice creams, supplements and other products. Brothers Ryan and Jeremy Black founded the company in 2001, after they discovered the fruit on one of their surfing excursions to Brazil in 1999.

The firm was created under a sustainable business model that promotes, among other values, fair pay for small Brazilian farmers who harvest the açai fruit. Some 1,500 low-income families, living in Brazil’s Pantanales del Varzea region in the Amazon Basin, live almost exclusively on the açai trade. The indigenous people are currently organized into four cooperatives that sell the açai drupes that they harvest to Sambazon at a price in accordance with their market value in the United States.

When the Black brothers founded Sambazon, the açai fruit was unknown in the United States. Today, ten companies are marketing it in different forms: Coca-Cola, PepsiCo and Anheuser-Busch are just some of the major trademarks that have incorporated açai into their beverage flavors, while Procter & Gamble is marketing a line of shampoos and conditioners that contain the fruit. By 2007 Sambazon had 100 employees and over 700 establishments that were marketing its 26 products. The company reported 2006 sales of 12 million dollars.

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Additionally, the company works jointly with the NGO, FASE-PA , which provides technical aid to the cooperatives and controls operations between them and Sambazon, so as to guarantee fair purchasing prices. In its açai production, Sambazon promotes sustainable agro-forestry use, which replaces logging and provides an economic alternative with good income levels and opportunities for advancement to local farmers. Sambazon communicates its actions through ad campaigns and through its website at www.sambazon.com. It also has its own blog, where “a healthier planet and healthier people” is the issue that tops the list of the company’s p priorityy interests.

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Table of Contents A Personal Journey into the Future

7

Sustainable Development Chapter 1: A New Paradigm Chapter 2: The Sustainable Company Chapter 3: The Ones that Made History: Benchmarks, Inspirers and Pioneers

17 33 45

The Participative Media and Web 2.0 Chapter 4: The Conversation Age Chapter 5: The Network Generation Chapter 6: Networked People: Making a Community Make Sense Chapter 7: From Traditional Advertising to Conversation Chapter 8: Collective Intelligence Chapter 9: We, The Media

63 73 83 93 103 113

The Value Revolution Chapter 10: Consumer Power Chapter 11: Welcome to Enterprise 2.0 Chapter 12: When the World Began to Understand Epilog: The 2.0 Era Is Born

127 139 153 161

Business Case Studies Appendix 1: Pioneer Companies Appendix 2: Companies that Changed Appendix 3: Sustainable Companies

165 177 191

Footnotes Bibliography

205 213

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Acknowledgements

Ernesto van Peborgh and the Odiseo Team wish to thank Greenpeace Argentina (www.greenpeace.org.ar), Casa de Oshawa (organic food store, Ciudad de la Paz 421, Buenos Aires, Argentina), Fรกbrica de Bananas (an independent design store, www.fabricadebananas.com.ar ) and the 1940 Restaurant (Dorrego 1940, Buenos Aires, Argentina), for their cooperation in providing locations for photo shoots.


At the end of 2006, the world premiere of Al Gore’s motion picture, An Inconvenient Truth, established the issue of global warming as a world reality — and not just as the obsession of a few scientists and activists. Recent unprecedented hurricanes, flooding and other catastrophes have confirmed the picture’s premises. That same year, the Wal-Mart chain announced its commitment to sustainability, eliciting a vow from its 60,000 suppliers to adjust their production processes and conduct. These changes were preceded and accompanied by the dizzying growth of civil organizations around the world that are working to find solutions to the most urgent problems surrounding poverty, the environment and the defense of life in all of its forms. It appears that Mankind is beginning to get the message and getting the message is the first step toward giving up irresponsible behavior toward the planet and toward the human race itself. Be that as it may, understanding the problem needs to give way to action, not merely with regard to the global emergency, but also to the advancement of a generation that is not simply awaiting change, but is attempting to produce it from a position of pure pragmatism: the Net Gen, youth born into the digital age, youngsters who believe in participation, cooperation and transparency as the starting points for change toward a new cultural paradigm. In this book, Ernesto van Peborgh explains how the Net Gen, with Web 2.0 as its natural communications tool, and social organizations, as agents of a fledgling "worldwide associative revolution", are flowing and bolstering one another around sustainable development values, in order to remold the behavior of companies and of society as a whole. He demonstrates how Sustainability 2.0 is emerging from this three-way convergence and providing an historically unique opportunity — perhaps the last one — to build a feasible future for humanity.

Sustainability 2.0  

Sustainability 2.0 - The book

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