Location, Location, Location: Why Amazon Has a Whole Foods Problem

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When Amazon acquired Whole Foods in 2017, the potential for a corporate culture clash loomed large. Those concerns are about to be realized as a unionization effort takes hold at Whole Foods. Similar efforts have failed at Amazon but the Whole Foods organizers may have a not-so-secret weapon in their toolkit: location.

Location and Amazon

Amazon is well known for a business model that focuses on customer service as an outcome of its ability to fulfill orders at low cost, high volume, and lightning speed.

In terms of labor relations that approach requires an automated, data-driven assessment of employee performance, a tool that Amazon has honed to perfection.

An emphasis on data collection does not necessarily lead to onerous workplace conditions, but it easily can. An article about Amazon’s fulfillment centers in The Verge earlier this year draws a portrait of a punitive system that resembles some of the worst aspects of assembly line work, including termination for those who fail to keep up.

A fair question to ask is why someone would continue to work in an overly burdensome environment. After all, the unemployment rate is low, and many companies are on the hunt for new recruits.

That’s where location comes in. Though average unemployment in the U.S. is low, pockets of poverty and lack of opportunity create the conditions for workers to take and keep jobs regardless of their treatment in the workplace.

In locations like these, employers can continue practices that would otherwise result in high turnover and short staffing.

Somewhat ironically, last year The Atlantic observed that presence of an Amazon fulfillment center in a struggling community can make conditions worse for that community's residents, or fail to improve conditions, rather than helping to create new opportunities.

Location and Whole Foods

The location factor has worked in favor of Amazon’s factory-like business model, but it could prove to be the monkey wrench when it comes to Whole Foods.

In contrast to Amazon’s fulfillment center location strategy, Whole Foods built its expansion on the ability to spot communities that are on the way up; in other words, where other employment opportunities are growing. In fact, Whole Foods has become known for attracting many other retailers, including other grocers, into up-and-coming communities.

Part of that success revolves around a broader trend of locating supermarkets and other large stores within residential and mixed-use buildings, an option that is simply not available to oversized warehouse-style operations like Amazon fulfillment centers.

In sum, Whole Foods faces more competition for qualified workers at its locations, especially for those who have excellent social skills that allow them to connect with customers.

Brand reputation on the decline

Even before the Amazon acquisition, workplace practices at Whole Foods were coming into conflict with its Whole Trade model for ethical practices and working conditions in its supply chain, and with the aims of its Whole Planet Foundation.

The pile-up of pre-Amazon complaints may have contributed to a relatively low rating of #58 for Whole Foods in Forbes’s 2017 “Best Places to Work” list. That’s a sharp drop-off from its 20-year consecutive record of earning a slot in the top 20.

Under Amazon, reports of deteriorating conditions and pay issues continue to surface, despite last year’s pledge by founder John Mackey to renew its focus on “worker happiness.”

Last spring The Guardian reported on pay and scheduling issues at Whole Foods that offset the benefits of Amazon’s new minimum wage policy.

In July, The Guardian also cited Whole Foods employees who reported pressure related to Amazon’s policy for promoting its Prime deals, as well as “widespread understaffing, increased workloads and labor budget cuts."

Whole Worker makes the connection

Pushback against union organizing efforts at Amazon have been “aggressive,” according to a report in Gizmodo last September. That report was based on a leaked training video that advised managers to be alert for “Warning Signs” of organizing, including employees “who normally aren’t connected to each other suddenly hanging out together” and any other “behavior that is out of character.”

Gizmodo reported that the union organizing group Whole Worker leaked the video. Last week the group turned up the pressure with an open letter connecting worker conditions at Whole Foods with the more expansive issue of Amazon’s complicity with the Trump administration’s immigration policies.

Published as a Google document, the anonymous letter aims to show “solidarity with our undocumented sisters, brothers, and siblings” by placing workplace conditions in the context of Amazon’s other business practices.

The letter specifically focuses on the company’s work with Palantir, the big data firm co-founded by Silicon Valley investor Peter Thiel. Thiel was an instrumental supporter of the 2016 Trump presidential campaign and is also associated with anti-immigrant organizations.

Whole Worker cites Plantir for providing “software that helps ICE in the deportation of undocumented people.” It also notes that Palantir has been associated with the misuse of information by private data-gathering companies, targeting individuals involved in union organizing and activism.

Whole Foods, Amazon and the "Wayfair Effect"

The letter reflects concerns similar to online petitions and employee actions at other companies. However, it stands out for its appeal to decision-makers, management and talent at Amazon to engage in street action.

After calling upon Amazon to cut ties with Palantir and end the sale of its Rekognition software, the letter concludes by calling out Amazon workers for their roles in the plight of immigrants and whole Foods workers alike:

“Workers that control the levers inside Amazon must make this machine stop and turn in another direction. Bodies inside this machine are being mangled as it tramples on our homes, destroying families and communities. If you have your hand on one of those levers, ask yourself what can you to stop it?"

What, indeed?

The link embedded by Whole Workers provides a hint. It refers to a high-profile walkout by employees of the home furnishings company Wayfair. The walkout occurred not at some remote factory or fulfillment center. It happened at Wayfair’s headquarters in downtown Boston, where the action maximized media attention and bystander participation.

Bringing that kind of activism to the tony and up-and-coming communities hosting Whole Foods stores could have a similar impact.

With employee activism on the rise at Amazon and elsewhere, Whole Foods may need to rethink how the company has been affected by Amazon’s business model and reexamine its roots.

Join us at 3BL Forum: Brands Taking Stands – What’s Next, at MGM National Harbor, just outside Washington, D.C., on October 29-30, 2019. Among the many themes we’ll explore is the changing expectations of the workforce, social risk and how corporate leaders are responding to such challenges. Receive a 25 percent discount using this code PUNDIT2019AUGUST when you register here during the month of August, 2019.

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Hydrogen Plane Startup Offers Zero-Emissions Solution for Airport Woes

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The clean energy revolution means more than simply replacing fossil fuels with low-carbon alternatives. Clean technology can also provide extra benefits for companies in terms of productivity, comfort and convenience. A case in point is the hydrogen plane startup ZeroAvia. The company has just emerged from “stealth” mode to offer the world’s first commercial aircraft with a hydrogen fuel cell powertrain as its exclusive means of locomotion.

Extra benefits from hydrogen power

ZeroAvia’s business model is based on the premise that its hydrogen fuel cell powertrain will reduce the cost of flight on small, 10-20 seat aircraft, targeting short-haul journeys of up to 500 miles.

With the ability of the company's hydrogen plane to compete on cost for passengers against large conventional jets, ZeroAvia is anticipating that business travelers will be attracted by the opportunity to fly into smaller regional airports.

Ideally, the increased flexibility in choice of destinations will reduce the potential for delayed flights and long security lines that often bedevil larger airports.

How low can hydrogen go?

Hydrogen fuel cell passenger cars have been slow to take off, partly due to their relatively high cost and lack of a mature fuel distribution network for motorists.

Those two issues are not significant barriers for ZeroAvia’s hydrogen fuel cell aircraft, however.

The company is anticipating a per-flight cost savings of about 50 percent for its powertrain compared to conventional jet aircraft. Higher power train efficiency is one key difference. Lower fuel and maintenance costs will also factor in.

To help reduce costs farther, ZeroAvia has adopted a “power-by-the-hour” engine lease model commonly used in the aircraft industry, in which customers pay only for the hours that they use the powertrain. The cost of fuel and maintenance will be picked up by ZeroAvia as part of the lease.

As for fuel distribution, the logistics of establishing hydrogen fuel stations at airports are close at hand, if not already solved.

Los Angeles International Airport (LAX), for example, installed its first hydrogen fuel station for fuel cell vehicles in 2005.

And just last week the fuel cell company Plug Power delivered fuel cell cargo “tuggers” for the use of FedEx at Albany International Airport in upstate New York.

Support for hydrogen transportation at airports and elsewhere from the U.S. Department of Energy could also factor in.

The long road to the hydrogen airplane and zero-emission flight

Hydrogen fuel cells produce no airborne pollutants. The only emission is water, resulting from the interaction of hydrogen with oxygen in the fuel cell.

Still, the supply chain for hydrogen is front-loaded with pollutants and environmental impacts because the primary source for hydrogen today is natural gas.

Those supply chain issues should be taken into consideration by companies looking to clean up their travel-related emissions.

Fortunately, though, pathways for renewable sources are already beginning to emerge, and costs are already beginning to drop. ZeroAvia is in a good position to take advantage of those trends.

Top executives at the company have racked up considerable experience in zero- emission transport through previous work including at Tesla, Sonos and eMotorWerks, where ZeroAvia founder Valery Miftakov was also founder and CEO. In addition, the company’s go-to person for partnerships and special products lists the global hydrogen production leader Air Liquide on his resume.

Air Liquide has committed to decarbonizing hydrogen production for energy-related applications through its Blue Hydrogen initiative.

For its short-term goal, the company has pledged carbon-free production for at least 50 percent of hydrogen in the energy category by 2020 -- in other words, by next year. Biogas, water-splitting (using electricity sourced from renewables) and carbon recycling are the three main pathways identified by the company.

More travel, more low-carbon alternatives

Air Liquide’s timetable for renewable hydrogen improves the prospects for ZeroAvia to reduce its supply chain emissions.

ZeroAvia is looking at the year 2022 to introduce its new fuel cell aircraft to the market, and earlier this year Air Liquide announced it would ramp up carbon-free hydrogen production at an existing facility just across the border from the U.S. in Canada.

With business air travel projected to continue climbing at a rapid pace, hydrogen fuel cell technology has the potential to provide companies with another opportunity to cut costs and improve productivity while reducing carbon emissions all along the supply chain.

Image credit: ZeroAvia

 

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UPS Testing and Investing in Self-Driving Trucks

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With its relatively short payback period and the potential to reduce carbon emissions, it was only a matter of time before autonomous driving technology worked its way into the long-haul shipping sector. In fact, it’s already here. Last May, the U.S. Postal Service tested self-testing trucks developed by the startup TuSimple, and now UPS has upped the ante. It has tested the truck and bought a stake in the company, too.

A future of self-driving trucks?

UPS made the investment in TuSimple through its UPS Ventures division, announcing completion of the deal on August 13.

The self-driving trucks in question are no mere delivery vans. TuSimple has designed its autonomous technology around class 8 tractor-trailers with at least three axles, topping 33,000 pounds.

A driver is in the test vehicle at all times, as required by law. The trucks are still in test phase, using a 114-mile stretch of highway in Arizona between Phoenix and Tucson.

If all goes according to plan, the test runs could have wide implications for the entire long-haul trucking industry. TuSimple and UPS have adopted the ambitious goal of developing Level 4 Autonomous trucking, meaning that no driver would be required.

UPS has already been providing TuSimple with freight to carry on the Phoenix-Tucson route since May, and the two companies have been collecting time, distance and safety data for the hauls.

The benefits of an autonomous long-haul fleet

As for the bottom line, TuSimple anticipates that its autonomous service will reduce transportation costs by an ambitious 30 percent.

The safety factor comes into play partly through the autonomous system’s 1,000-meter range of vision and its ability to see and react more quickly than most human beings, especially when they are bored, drowsy or distracted. That includes driving at night and during inclement weather. In particular, an autonomous system could reduce rear-end accidents, one of the most common accidents involving trucks.

TuSimple also emphasizes the carbon-cutting factor, with evidence mounting to back up its claims.

Last year, for example, McKinsey & Company took a deep dive into the potential for fuel savings and came up with 10 percent or more, depending on the level of autonomy.

Labor costs are clearly another major factor, though McKinsey is among those who predict that fully autonomous trucking is many years away.

UPS and carbon emissions

Taking a vanguard position in autonomous driving is part of a broader sustainability strategy that teams UPS with new technology and innovative new systems.

In other recent steps, the company has partnered with Terracycle and the startup Loop to pick up and deliver household supplies in reusable containers.

UPS has also been active in the area of zero-emission hydrogen fuel cell delivery trucks, which could draw it into the emerging renewable hydrogen field as well.

The shipping business has existed as long as there have been, well, ships. It has always adapted to new technology, and UPS is among those aiming to pick up the pace of innovation to meet the expectations and demands of a more sustainable future.

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The “Maximizing Shareholder Value” Theory Just Bit the Dust

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The Milton Friedman Doctrine is no more. Now, doing business is more than about maximizing shareholder value. And it’s about time.

For the past half century, the conventional wisdom in the business world held that a company’s first and foremost responsibility was to its shareholders. The 1976 winner of the Nobel Prize in Economics, Milton Friedman, long ago proclaimed that a company’s primary responsibility was to maximize profits for shareholders – and that those shareholders would then decide for themselves what social initiatives, if any, they would pursue.

We’ve seen a shift underway for some time, but now the business community has launched a drastic change in course. A group that represents the most prominent CEOs in the U.S. has agreed that nowadays, it’s no longer only about a company’s shareholders.

Today, 181 CEOs affiliated with Business Roundtable signed a letter agreeing that from now on, company executives need to think about how their companies can benefit all stakeholders: customers, employees, suppliers, local communities and shareholders.

“The American dream is alive, but fraying,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. and the Business Roundtable’s chairman, in a public statement. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”

In recent years, companies have been attacked across the political spectrum for a bevy of reasons. President Trump has hardly been shy about companies’ decisions to move jobs overseas; one of his potential opponents in next year’s presidential election, Massachusetts Senator Elizabeth Warren, has suggested many plans focused on holding corporations accountable, including one that would mandate some members of corporate boards be chosen by company employees.

Not everyone will be satisfied with these CEOs’ chess move, according to Jena McGregor of the Washington Post. “The firms also opened themselves up to a range of criticisms, raising questions about how much the new statement would lead to real change,” she wrote.

Aside from the criticisms and suggestions that this shift is not going far enough, it is clear American capitalism is in need of a reset. “Capitalism, at least the kind practiced by large global corporations, was under assault from all sides, and CEOs were getting the message loud and clear,” wrote Allan Murray for Forbes.

And in the end, for anyone who has felt wronged by a corporation, here are a few examples of how many of America’s largest companies will enact such change, according to yesterday’s announcement:

  • Companies are to do more to bring value to customers, while striving to exceed customers’ expectations.
  • Employees can expect more training and education to help them adapt in a rapidly changing world.
  • Suppliers can expect to be treated fairly and ethically.
  • There will be more support for communities where companies have a presence; and, companies must promise more of a commitment to preserving the environment.
  • As for shareholders, they can expect more transparency and a commitment to generating long-term value.

Milton Friedman is probably sending more than a side eye from the heavens above, but it’s a far different world now than in the 1970s. For the most part, products are commoditized and most are made abroad; the planet is heading to a climate crisis; global supply chains are often linked to human rights violations and environmental degradation; and many employees don’t have the job security, not to mention benefits such as health care that were far more generous and affordable back in the 1970s.

Change can’t happen fast enough; Business Roundtable is, at a minimum, now part of this conversation, one that can no longer be kicked down the road.

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Integrating Water Conservation into Business Strategy

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One quarter of the world’s population is running out of water. An alarming new study shows that U.S. states including Arizona, California, Colorado and New Mexico are tapping so much of their available water each year that small changes in water use—or weather—could lead to dramatic shortages for homes, business, agriculture and other vital needs. At a first glance, trying to accelerate water conservation strategies appears to be too steep of a climb. 

But for those of us facing this challenge here in the United States, there is some heartening news – businesses are stepping up and playing a vital role in developing water initiatives that can ease the stresses on crucial watersheds. These projects and programs can pay dividends for natural systems, communities and farms, and businesses’ bottom line.

Water conservation is a winning strategy for business

A new article commissioned by our Business for Water Stewardship program, “From Corporate Water Risk to Value Creation,” highlights how a company that integrates water sustainability into its long-term business model can see both business benefits and risk mitigation over time. 

In the not-so-distant past, a business might have relied on its corporate social responsibility staff to manage sustainability projects. This work was often considered adjunct to the company’s core strategic goals and bottom line. But increasingly many companies are recognizing that an integrated and all-encompassing approach to water will have a far deeper impact that can generate social, business, and environmental value.

Be smart, and go deep when looking at water

The key is weaving water-smart policies into the way they do business and expanding them across their day-to-day operations. It’s also about having the courage to confront the root causes of water scarcity. Anheuser-Busch InBev – the largest brewing company in the world – has become a leader in new approaches to managing demand for water. Last year, it launched its 100+ Accelerator class by providing the necessary resources, tools and contacts to promising entrepreneurs. The project included three water technology startups involved in creating clean water from air, measuring water quality in real time through mobile devices, and waste water treatment, respectively, to help solve some of the water challenges we face.

Many other examples exist of corporations recognizing the value of this approach where conservation, policy leadership, and off-site water strategies are integrated to deliver business value. For example, in 2019, in the face of 18 years of drought, the Arizona Chamber of Commerce and Industry and a long list of companies including Cox Communications, Intel, Danone North America and Arizona Public Service advocated in favor of progressive drought planning legislation for the lower Colorado River. Many of these companies have also recently made commitments to both conserve water internally and to support external programs designed to help deliver a secure water supply  -- which will benefit not only the businesses but also local communities.   

In light of the sobering news about water stresses around the world, there’s an opportunity for more businesses, large and small, to promote and invest in water-smart policies and programs across the U.S. The business sector can be a transformative leader in ensuring our communities have plentiful clean water for generations to come. The possibilities are endless. And the time is now.

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Another European Heat Wave: Carbon Credits

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You may not have noticed by glancing at all those doctored-up photos of your friends boasting about their transatlantic travels on Instagram, but it’s been a brutal summer in Europe. This year's relentless European heat wave resulted in record-setting temperatures across much of the continent.

In addition to the human toll and amplified calls for taking action on climate change, the surge in temperatures has caused one market in particular to heat up: Europe’s carbon credit market.

Carbon credits date back to the 1997 Kyoto Protocols, when signatories of that agreement envisioned a market buzzing with activity led by energy companies, power plants and heavy manufacturing companies like automakers. Think of the system as a version of musical chairs: Regulators limit how many carbon-emitting permits can be issued at a time, and companies buy, sell and use them. A similar system green-lighted by U.S. President George H. W. Bush in the early 1990s helped curb “acid rain,” which was rampant due to sulfur emissions across much of the northeastern United States and Great Lakes region.

Europe’s carbon market kicked off in 2005, but soon sputtered. The global financial crisis was one huge factor, along with the fact that some industries were grandfathered and therefore exempt from the system. Other companies harnessed other climate-friendly tactics, such as investing in renewables.

But earlier this decade, emissions across the European Union began to spike, spooking policy makers. The EU started to reduce the total number of carbon credits. Add this summer’s scorching heat, and you have a perfect storm. According to the
Wall Street Journal, the price of these credits has increased 400 percent during the past two years.

And despite the other European heat wave --  bubbling populist movements across much of the continent -- the Financial Times has noted that many EU leaders feel “bullish” about environmental policy. Hedge fund managers also are noticing the activity and are joining the fray, which further helps to boost prices.

Other segments of the carbon market are enjoying a spike of activity as well. According to Bloomberg, the “flight shame” movement led by activists such as Greta Thunberg has sparked a surge of carbon offset purchases as more Europeans seek to mitigate their environmental footprint while traveling by air. Even penny-pinching Ryanair passengers are on the bandwagon, with the airline reporting that the number of customers who have purchased offsets has doubled during the past 18 months. The ongoing backlash against flying even nudged the Dutch national carrier KLM to suggest that passengers book train tickets instead of braving the skies in some circumstances.

Not everyone is a fan of this trend.

“Small companies have been weeded out, highly regulated global carbon and renewable energy markets have been set up, and thousands of participating companies and charities are now theoretically held to international standards by independent verifiers,” Guardian environmental writer John Vidal recently wrote. “As the climate emergency grows, so too does the money involved – and the need for accountability.”

As for any carbon pricing plan, including emission credits, Scientific American’s Scott Tinker concluded that the only way such programs can succeed is if they scale up and become global. “If actions taken to reduce atmospheric emissions in one region result in increased emissions elsewhere, then the one atmosphere suffers,” Tinker wrote last week.

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Would a Meat Tax Push Food Companies to Adapt?

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Would a meat tax nudge more citizens to change their diets, nudge more companies to expand into plant-based alternatives or ramp up animal welfare programs? In Europe's largest economy, the discussion is well underway.

Germany has given us a bevy of meat dishes, from the bratwurst to wiener schnitzel, the latter of which is on menus worldwide from Bavaria to Bangkok. But according to several news sources, including the country’s Deutsche Welle news service, some politicians are suggesting that citizens give up more at the checkout counter in the form of a meat tax in order to fund animal welfare programs in the country.

Growing criticism of how animals are treated at factory farms have sparked this discuss. Legislators who belong both to the Social Democratic and Green Party suggest that meat be taxed like most non-food products, at a rate of 19 percent. The current rate for food is a value-added tax of 7 percent. Taxing meat, say supporters of this policy, would help boost animal welfare programs across the country.

The global meat industry has long said it is doing what it can to make the sector more responsible and sustainable, but many policy makers aren’t having it. Some countries are already enacting policies in the drive to moderate their citizens’ meat intake. A few years ago, the Netherlands recommended that people adopt more of a plant-based diet, while reducing their weekly meat consumption to less than 500 grams (17.5 ounces).

On this side of the pond, the very idea of taxing meat would be about as popular as a universal basic income or government-run health insurance. Just look at the politics: Mississippi has banned the use of terms such as “veggie burgers” in retail outlets, even threatening jail time for offenders. Other states are considering similar measures.

But finding ways to either tax meat, or discourage its consumption, may not be impossible. A 2015 Chatham House study conducted surveys and held focus groups in a dozen nations and found such measures could work if they were framed as beneficial to the public interest – as in the anti-smoking campaigns of yesteryear.

Agriculture and food interests in the United States would fight such an initiative tooth and nail, but as we’ve seen time and again, the political climate can change on a dime. And the reality is that many of the world’s largest meat companies are already tweaking their business models.

For example, Brazil’s JBS, the world’s largest meat company, introduced a plant-based patty this spring. Nestlé will soon roll out its version of a plant-based burger in the United States and Europe. Smithfield Foods has kicked off a line of soy-based meatless products, which could be available in 5,000 stores by February 2020. And Tyson Foods recently announced its own alternative meat product.

Such chess moves are smart for a bevy of reasons that go beyond climate action and public health. After all, it’s better to anticipate these shifts, self-regulate and wield the ax on your own terms, rather than have legislators do it for you.

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As Beef Gets Booted Out of College Campuses, Meat Companies Take Note

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Across the pond in the United Kingdom, Goldsmiths, which is part of the University of London system, made news with its announcement that beef products will no longer be sold beginning this academic year. The decision is part of the college’s climate action plan, which includes imposing fees on plastic cups and plastic water bottles, as well as investments in renewables. Goldsmiths has a message to investors and energy companies as well: The college’s endowment fund will divest from any company that generates more than 10 percent of its revenues from fossil fuels, the Guardian reports.

This news coming out of London does not necessarily mean we'll see a rapid domino effect of more colleges and universities nixing meat companies from their list of approved suppliers. Such a move could be a tough sell in other corners of the globe—after all, at least one U.S. state has banned the use of terms of such as “veggie burgers” in retail outlets, even threatening jail time for offenders. Higher-ups within meat industry trade organizations may feel smug for now, but while they won that battle, they are risking losing the plant-based versus animal-based war in the long run.

The stubborn reality is that the likes of Goldsmiths and WeWork will not be outliers for long. The fact is, if we see more bans like this take hold—even if it's only in states and cities like the usual suspects including California, Massachusetts, Austin and Seattle—the message will be clear: Transform your business models if you want to do business with us. If you want to score those lucrative supplier contracts, adapt or lose out.

Companies are already getting the message. Nestlé, for example, will soon roll out its version of a plant-based burger in the U.S. and Europe. Smithfield Foods has launched a line of soy-based meatless products, which could be available in 5,000 stores by February 2020. Tyson Foods was once an investor in Beyond Meat, only to terminate that relationship. But not to be outdone, the Arkansas-based food giant recently released its own alternative meat product.

It’s an exciting time to be a foodtech startup. New products keep rolling out, and this era is reminiscent of the dot-com years of the early 1990s: New startups emerging on the scene, with many of them hoping (but not admitting) to get gobbled up by a larger company that has the cash, resources and talent to bring them to market.

The outlook for this sector is not all rosy. There is still the challenge of addressing overfishing with plant- and legume-based alternatives to fish. And the “beef is bad for the environment” argument is a nuanced one. As TriplePundit’s financial writer Amy Brown has pointed out, there are plenty of cattle operations that actually double as carbon sinks, and the argument that plant-based burgers are healthier for you is not necessarily the case. Finally, as all of the chatter on financial news channels and websites keep reminding us with Beyond Meat’s IPO, there could always be a crash, akin to how the dot-com sector finally took a nosedive in the early 2000s.

The companies that can successfully market to the Goldsmiths of the world, however, will still be standing.

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Tokyo Olympics Striving to Connect Environment and Economy

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The 1964 Tokyo Olympics heralded a new life, a phoenix rising from the ashes of World War II. Japan was eager to show the world its resilience, and the games were part of a boom that has created one of the strongest economies in the world.

But the economic surge that launched itself in the aftermath of the 1964 games took a toll on the country’s water, effects still felt today. The construction for the games covered rivers, canals and bits of sea, restricting or destroying much of the city’s navigable waterways, and drying up a prized seaweed field that had been harvested for 300 years. Sludge, algae and toxic water resulted.

Now, 2020 will see another Tokyo Olympics, and the organizers of next year’s games have already launched several sustainability initiatives. Japan is a different country than it was 55 years ago, but signs exist that poor water quality may again raise its ugly head. Compounding the environmental toll that every Olympic Games puts on the host country is the fact that climate change makes these calculations more exacting.

Summers in Japan are already prone to extreme heat. Late July is typically hot and humid, with average temperatures hovering around 90 degrees Fahrenheit. In fact, even in 1964, organizers pushed the Tokyo games back to October for this reason (next year’s games start in late July).

Higher temperatures mean more stress on both water quality and quantity. Water quality is already causing some heartburn for organizers. In October 2017, E. coli levels at the spring canoe and rowing venue was 20 times the acceptable limit set by Olympic guidelines. Organizers subsequently added underwater screens, which have significantly reduced the bacteria levels, but other venues are still struggling to meet requirements.

In addition, Odaiba Seaside Park, the venue for swimming and the triathlon, failed a water quality test in October 2018. These problems have solutions, but they significantly increase costs, which typically strain budgets under the best of circumstances. The International Olympic Committee’s vice president, John Coates, urged the Japanese organizers to reduce costs by over $1 billion—the costs having almost doubled from the initial proposal.

New National Stadium, site of the Tokyo Olympics opening and closing ceremonies, as well as track and field competitions

(Image: New National Stadium, site of the Tokyo Olympics opening and closing ceremonies, as well as track and field competitions.)

In 2016, Rio de Janeiro faced a bevy of problems, including several water-related obstacles when it hosted the Summer Olympics. One of the venues for sailing and windsurfing, Guanabara Bay, was so polluted that some countries debated whether they should even allow their athletes near the body of water. In the end, the events took place with athletes taking precautions, such as hepatitis vaccinations and antimicrobial suits.

Japan is in a different boat economically from Brazil, and there should be no excuses about water quality. Water quantity provides another obstacle. Prior to the 1964 games, Japan suffered an “Olympic drought” and had to source emergency water supplies. No such drought threatens next year’s games, but fear of drought raised its head earlier this summer when rains were late to arrive. The bigger threat for Japan under climate change, however, is an excess of water. Predictions of increased catastrophic floods linger over the country.

Water is just one component of environmental impact to consider. Olympic Games had historically been about gold, silver and bronze—not green. Even the “greenest” Olympics, held in London in 2012, used almost 400 temporary generators, which had their own emissions impact during the Games. With the advance of climate change, the impacts of the games on host countries could become more pronounced. At times, renewed calls come for permanent games sites, which could reduce both the overall costs and the environmental stress that comes from construction of facilities. In addition to the monetary costs of putting on games, the environmental costs can be even more staggering.

The reality is, when the environment is separated from economics and public health, hidden costs mount quickly. Connecting the dots is necessary. Environmental costs could be incorporated into projected costs during the bidding process. We must create a future in which countries are able to undertake ambitious projects like the Olympics and still protect their people, natural resources, and fiscal health. Gold medals may not be at stake, but a prosperous future is.

The sustainability concept for the Tokyo 2020 Games is: “Be better, together—for the planet and the people.” If next year’s Olympics truly live up to that ideal, we could see a future where future host cities are better off, with not only an enhanced global reputation, but also better infrastructure including facilities that citizens can enjoy for the long term.

Image credits: Jezael Melgoza/Unsplash; Tokyo-Good/Wiki Commons

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Tokyo Olympics Striving to Connect Environment and Economy
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The sustainability theme for the 2020 Tokyo Olympics is: “Be better, together—for the planet and the people.” Will lessons from 1964 be taken into account?
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Clothing and Shoe Subscriptions, the Sustainable Answer to Amazon

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Nike generated plenty of headlines earlier this week when it announced a shoe subscriptions for kids. For any parent who views this back-to-school time of the year with angst, or for any former kid who remembers the ordeal of going from store to store at the mall, Nike’s new venture will arouse plenty of reactions, from “oh thank goodness” to “where was this when I was young?”

The service works like this: Parents settle on one of three plans; kids can then select from various Nike- and Converse-branded shoes; the shoes arrive in a personalized box; and when the kid outgrows the shoe, gets tired of it, wears it out, or if he or she just doesn’t like it, the shoes can be seamlessly dropped off in the mail.

For those of us focused on sustainability, these shoe subscriptions’ most compelling selling point is that, depending on the condition of the returned shoes, they will be refurbished and sent to a family in need. If they are beyond repair, Nike has pledged to recycle them through its Grind program.

Of course, there is no shortage of clothing and shoe subscriptions for all ages, but Nike’s stands out for its reuse, refurbish and recycle angle. Watch for other companies to respond in kind, as there are plenty of people in need, as well as customers who want to consume less and reuse more. The possibilities are endless, and in any event, the pressure is on for retailers and apparel companies to become more responsible and ecological—those who do not fall in line will struggle in the near future.

There is another reason why brands may want to emulate Nike: the Amazon factor.

The impact Amazon has long had on retailers is an open book—and many, from Kohl’s to Macy’s, are responding or suffering in kind.

But another argument the likes of Nike can make as they try to push subscriptions while competing with Amazon is one that centers on sustainability.

While Amazon has claimed that it will be better about donating products returned to its warehouses, many critics have alleged that far too many goods in perfectly fine shape end up in landfills.

The hilarious and disturbing case of the 22-year-old who was arrested in Barcelona earlier this month after scamming Amazon out of $370,000 by returning boxes of dirt is a case in point. If it took Amazon’s employees a few fortnights to figure out those returns were not unwanted dumbbells, Brita filters or Martha Stewart linens, well . . . logic only dictates that plenty of Amazon packages have ended up in some sort of warehouse or landfill purgatory.

Some may say, “Well, what about the emissions from all those boxes being sent back and forth?” The answer is, read the story about James Gilbert Kwarteng and be reminded that online shoppers and subscribers—and the brands shipping and receiving these boxes—can do far better.

Image credit: Shane Rounce/Unsplash

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A popular brand launches shoe subscriptions for kids and offers apparel and footwear companies ideas on how to swat away competition from Amazon.
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