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Is the Bay Area Gig Economy in a Bubble?

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8838
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For everything that San Francisco and Silicon Valley have been known for in the past – hippies, Apple, geeks and counterculture -- today, no industry defines the region more than the gig economy.

It is the Uber and Lyft cars on every block, or the incessant advertising that accompanied Proposition F – the Airbnb proposition -- in San Francisco earlier this month. Each day brings news of a new app raising money to revolutionize – or disrupt – another industry. You can now have someone wait in line for you at a restaurant, come to your home and cook dinner, or, soon, hire a "hunk" to be a stand-in date. Gigs are everywhere.

In many ways, it is the gig economy giants, more than the tech industry in general, that are fueling the city's recent boom. Uber is valued at $41 billion; Airbnb at $24 billion; and Lyft just reported an estimated $1 billion in revenue this year, an amazing nine-fold increase from 2014. Add in Taskrabbit, Postmates, Spoonrocket and the hundreds of others gig economy startups, and you have a tsunami of money flowing into the Bay Area.

Few of these companies existed in 2010, and it is their staff, more than Google, Apple, Genentech or the "old" tech giants, who are responsible for rising rents and crowded trains that are straining the region's infrastructure. The gig economy has transformed the region, but with with the recent shut-down of house-cleaning app Homejoy, there are concerns that the gig economy bubble may be about to pop.

What is the gig economy?

Firstly, what makes a company part of the 'gig economy,' the term de jour which has replaced the inaccurate 'sharing economy' hype of 2013? According to Matt Bencke, CEO of Spare5, a Seattle based on-demand service platform that pays people to provide expert insights in their spare time, this term is also rife with problems.

"I'm skeptical of the term gig economy – somewhat of a misnomer," Bencke told 3p. He believes that the term does not encompass the vast diversity, and differences, between the many apps and platforms transforming how we work. He prefers to call it a 'smart marketplace,' which he believes better represents the ideal of a technology that matches supply and demand in a way that wasn't possible in the past.

No matter what you want to call it (and gig economy is the preferred media term right now), there is no question where the gig capital is. Though many apps, like Spare5, do originate outside the Bay Area, this is where the vast majority of ideas are tested before they are released to the wider world. Thus, it is also right here in the Bay Area that we are seeing the initial impacts. And it is right here where we'll see the most pain if, in fact, we are in a gig economy bubble.

Bubble or no bubble?

For several years now, money has flowed into tech startups, many of which were getting millions to develop, test and roll-out gig apps. But Homejoy's shut down, and the subsequent layoffs at other Bay Area tech companies including HotelTonight and Twitter, gave many pause that, perhaps, this was the sign that the long-awaited readjustment was finally coming.

"I do think there is a shake-up coming – there's going to be more companies who fail in the coming months," Bencke told us.

The problem is that it may, once again, be the gig workers themselves who suffer most. Homejoy's CEO and founders pocketed significant salaries while the app was functioning, and they are likely doing fine. But the cleaners themselves? One day, they had a gig; the next day, they were without work.

"Self-employed 'taskers' do not represent an aspiring army of entrepreneurs, but are in fact the opposite: the most precarious layer of the working class, still forced to sell their labor power – the only commodity they truly own," said Adam Booth, a professor at Cambridge University, in a public forum.

Another major concern is the growth in 'unicorn,' tech companies that have valuations over $1 billion but have, mostly, not been able to prove sustainable revenue or profit sources. Many of these are "gig" companies, and it is likely that many of these companies are overvalued -- leading to concerns that there may be many more Homejoys to come.

Alternatives to the gig economy

Perhaps some bursting of the gig bubble wouldn't be bad. The system in place now is not geared to creating wealth for workers. The current iteration of the gig economy puts the power in the hands of a few, be it Uber CEO Travis Kalanick, worth $6 billion, or the three billionaire cofounders of Airbnb, or the countless mere gig app millionaires. Most of these companies are private and only responsible to their investors, or, in other words, other millionaires and billionaires. What is trickling down is little more than the leftover change, barely allowing most gig workers to make above minimum wage. (for more on this, see this #TechTitans series piece by Nayelli Gonzalez)

That is why, earlier this month, labor, technology and social activists gathered in New York for the Platform Cooperatives conference. The idea? Look at how cooperatively-owned platforms and technology could empower workers by putting them in control.

"Platform cooperativism is a way to put power back in the hands of the workers," Kristy Milland, who does gigs for Amazon Mechanical Turk, said at the conference.

In fact, there are numerous new startup, open-source, and cooperative gig and sharing platforms out there. Laz'ooz aims to be an alternative, decentralized ride-hailing system, while Loconomics is a cooperative version of Taskrabbit. All of these are new, and far from competing with Uber, Lyft or Taskrabbit, but they are providing an alternative that, if done well, could transform the gig economy.

"The shift to platform cooperativism is underway -- a shift toward a true sharing economy, one in which people co-own and co-govern the platforms they contribute to and rely on," Trebor Scholz, associate professor of culture and media studies at The New School, said in a statement.

The Bay Area, as the spot where gigs first took off, would be a great place to test these new technologies and perhaps better include workers' voices inside the technology that is meant to enrich our lives. Perhaps from the rubble of Homejoy, and the other apps doomed to fail, can emerge a better, smarter, more ethical smart marketplace for gigs where workers, not venture capitalists, are in control.

Image credit: why kei and Austin Distel via Unsplash

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The Deep Legal Roots of the Business Case for Sustainability

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8851
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Content

Benefit corporations are a new kind of business, but they are also the latest development in an 80-year-old debate. One side says that corporations should be managed to benefit their shareholders and no one else. The other says that corporations work best when the interests of shareholders are balanced with those of workers, customers and communities.

Today's corporate directors tend to agree with the "shareholders first" argument. But that wasn't always the case. Fifty years ago, if you had said that the only goal of your corporation was to reward shareholders, people would have called you greedy, a bad citizen.

The debate emerged in 1931, when business lawyers were seriously worried about capitalism. Adolf Berle, an original member of Franklin Roosevelt's "brain trust," wrote in the Harvard Law Review that corporate powers "are necessarily and at all times exercisable for the ratable benefit of all the shareholders." To rule otherwise, he said, would defeat the "object and nature" of a corporation. Government's role was to regulate. Businesses should follow those rules and go no further.

A year later in the same journal, E. Merrick Dodd answered Berle. His article, "For Whom Are Corporate Managers Trustees?," describes a more expansive view. Public opinion ultimately makes law, wrote Dodd, and the public is increasingly seeing the corporation as "an economic institution which has a social service as well as a profit-making function." He cited urgent calls for corporations to provide their workers with economic security, no small matter in 1932.

Dodd cited a 1929 speech by Owen D. Young, who said:

"It makes a great difference in my attitude toward my job as an executive officer of the General Electric Company whether I am a trustee of the institution or an attorney for the investor. If I am a trustee, who are the beneficiaries of the trust? To whom do I owe my obligations?

"My conception of it is this: That there are three groups of people who have an interest in that institution. One is the group of fifty-odd thousand people who have put their capital in the company, namely, its stockholders. Another is a group of well toward one hundred thousand people who are putting their labor and their lives into the business of the company. The third group is of customers and the general public. Customers have a right to demand that a concern so large shall not only do its business honestly and properly, but, further, that it shall meet its public obligations and perform its public duties - in a word, vast as it is, that it should be a good citizen...

"I think what is right in business is influenced very largely by the growing sense of trusteeship which I have described. One no longer feels the obligation to take from labor for the benefit of capital, nor to take from the public for the benefit of both, but rather to administer wisely and fairly in the interest of all."


Dodd and Berle were both elite corporate lawyers, law professors and loyal Roosevelt men. Berle saw a corporation as an aggregation of stockholders. Dodd saw it as a social institution with many stakeholders. He argued that each group had different rights and responsibilities, and the job of managers was to balance those competing interests. Dodd said that it was proper for corporate managers to confer benefits to society. He also predicted that public opinion would soon demand this.

Two decades after Dodd published his article, Berle conceded. Legal decisions between the 1930s and 1954 had supported Dodd's view, he wrote, and "the argument has been settled, at least for the time being."

The idea that corporate directors should have the legal right to protect the interests of stakeholders was not challenged for another 15 years, when Milton Friedman and other economists from University of Chicago came forward with a more radical version of Berle's 1931 argument. The doctrine of "shareholder primacy" quickly went mainstream in 1981, as Ronald Reagan kicked off the Decade of Greed.

Image credit: JSTOR

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Forget Black Friday -- Head Outside Instead

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100
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By Marianne Smallwood

On Thanksgiving Day, more than 9 out of every 10 Americans will be celebrating one of the country’s most treasured holidays. Over 46 million people will travel, eat bountiful meals of turkey and stuffing, watch football, and express thanks for loved ones in their lives. Taking root in a cherished (and historically controversial) time long ago when pilgrims and Native Americans broke bread and feasted together in goodwill, Thanksgiving Day is recognized as a day when Americans come together to share meals and love with family and friends. And the day after, more than 96 million people will go shopping.

Now where did that come from? While Black Friday is generally understood as the time of year when retailers finally go from the red (operating at a loss) into the black (earning a profit), this widely-held theory, is in fact, inaccurate. Black Friday originated in the 1950s in Philadelphia, when suburban shoppers and tourists would flood into the city after Thanksgiving and ahead of the annual Army-Navy Saturday football game. Philadelphia police would have to work overtime, traffic worsened and the increased crowds led to increases in shoplifting. Dubbed as “Black Friday” by local authorities for the stress on their resources, it wasn’t until the late 1980s when local and national retailers began using the day to their advantage, offering annual discounts to lure shoppers to stores and reshaping the narrative that more positively describes Black Friday as the point in which stores turn a profit.

And although presented as an enjoyable rite of passage in which unbeatable deals are offered on must-have items, Black Friday has regularly resulted in crime, injury and death. In 2008, two men were shot at a Toys R’ Us when their female companions began squabbling while shopping. Also in 2008, a Walmart employee was crushed to death when 200 shoppers rushed the entrance doors to reach store deals; a 28-year old pregnant woman and three others were also taken to the hospital. In 2011, a 61-year-old man fell to the floor at a Target in West Virginia; rather than aid the man, shoppers kept walking and even stepped over his body. If shopping at all costs has become a bigger priority than family, friends and helping others, that’s a bigger problem that no amount of thanks and turkey can justify.

Attracted by glossy ads and tweets, I’ve also shopped on Black Friday, and my experience has always been frustrating and disappointing. I found myself buying things I didn’t need or want simply to justify the time I’d wasted driving to stores, hunting for parking and fighting through the crowds. As consumers increasingly turn to online purchasing to avoid said crowds, retailers have made Black Friday deals available online, offering bargains and free shipping all week long. Why fight unnecessarily for parking spaces and $50 off when you could pre-purchase from the comfort of your own home? Why are we compelled to spend a holiday shopping amongst thousands of other people, looking for things we don't need but will buy simply because they're on sale?

Several retailers support prioritizing family over shopping frenzy and are helping to make the decision easier. Barnes & Noble, GameStop, Costco and TJ Maxx are all closed on Thanksgiving Day. Outdoor retailer REI has set an even higher bar by closing its doors on both Thanksgiving Day and Black Friday and giving its 12,000 employees a paid day off to #OptOutside.

Over 1 million people have responded enthusiastically to REI's mandate, sharing photos on social media and describing their plans for spending Black Friday outside and away from any mass consumerism. Building on #OptOutside, state governments in Minnesota, Delaware, Colorado and Oregon have waived all fees for state parks on Black Friday; California and Washington state are also offering free entrance to select national parks. After a day in which the average American will consume 4,500 calories, these states are encouraging their residents to spend time with family and friends by heading outside and hiking off the holiday calories for free.

Being in the great outdoors with loved ones beats fighting in crowds to buy things we don’t need. Forget the malls and crowds -- let’s go outside and celebrate #FreshAirFriday instead.

Image credit: Suzi Pratt/Getty Images for REI

Marianne Smallwood is currently serving as a U.S. diplomat in Thailand. Follow Marianne on Twitter at: twitter.com/marianne_is

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Is CSR Dead? Oh No, Not That Question Again …

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100
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By Neill Duffy

The opportunity to attend a recent Barclays debate at the British Library in London entitled “Is CSR Dead” seemed just too good an opportunity to miss, particularly given the esteemed panel members leading the debate -- which including two doyens of the responsible business industry, John Elkington and Mark Kramer.

So along I went, naively expecting to have this evergreen question answered and put to bed once and for all. But truth be told, my hopes were dashed.

If the delegates participating in the debate, either in person or remotely, are a reflection of the industry as a whole, then my main takeaway from the debate is that we are more confused than ever. It seems that we are more hung up on acronyms, definitions and words than on the substance of what it is that we practice and what it is that we are trying to achieve through the work that we do.

Rather than repeat what has already been summarized in numerous post-debate reports that a simple Google search will unveil, I thought I would add to the debate by providing my perspective.

So, is corporate social responsibility (CSR) dead? No, I don’t believe it is. Just as I don’t believe its many cousins, including creating shared value, conscious capitalism, sustainability, social responsibility, citizenship, the triple bottom line, greening, corporate responsibility and sustainable development, are dead. In fact, I believe the family of responsible business practices couldn’t be more alive and is in fact on the brink of gaining a seat in the C Suite to become the new normal.

Like most things in life, there’s the good and the bad. You have good CSR and bad CSR; badly executed shared value and well executed shared value. The same can be said for any derivative of the responsible business movement. For me, what’s more important than what name is used to describe a more responsible approach to business is the intention around why it is embraced and the greater purpose for which the responsible corporation holds itself accountable.

I don’t believe we live in an either/or world, but rather one where the opportunity exists to draw on the best that the various different approaches have to offer. In the process we can build a responsible business model that integrates a higher purpose at its heart and creates value for stakeholders at every interaction -- including the environment -- and makes it possible for the corporation to do good and do well.

And more and more corporations are embracing this opportunity. As Jim Stengel shows in his book "Grow": “Businesses that center their business on improving people’s lives have a growth rate triple that of competitors and outperform the market by a huge margin. They dominate their categories, create new categories and maximize profit in the long term." Stengel uses the word “purpose” to describe this intention, which he calls the “management philosophy of the 21st century."

This purposeful approach sits at the heart of the organizations I’m privileged to work with. They have each moved beyond doing good or doing well to doing both by embracing the opportunity to adopt an approach to their businesses that improve people’s lives, limits their impact on the environment, embraces the markets, and provides value at the intersection of profit and purpose.

For the Super Bowl 50 Host Committee and the 50 Fund, the occasion of the 50th Super Bowl in February 2016 is being used as an opportunity to deliver a net positive event: one that goes beyond the traditional and uses the mega event as a platform to benefit the entire San Francisco Bay Area -- socially, environmentally and economically. At the same time, the Host Committee is focussed on delivering a great event and providing sponsors with a platform that they can use to engage with their stakeholders, support the on going development of the region and build their businesses. It’s a great example of what’s possible when a major sports organization has the right intentions.

At One World Play Project, a mission to deliver the power of play anywhere and everywhere has already improved the lives of over 45 million people thanks to the donation of over 1.6 million almost indestructible soccer balls that never go flat and don’t need a pump. Partnerships with corporate brands like Chevrolet make it possible for this B Corp to provide people with access to the benefits that play provides while also providing those partner brands with a platform around which they can tell their stories, engage with fans, build their brands and show a commitment to the communities in which they operate.

At Bay.org, the San Francisco Bay Area’s largest local environmental organization, the traditional approach to not-for-profit philanthropy and grants is being turned on its head. The organization has embraced a new conversation with the Bay Area corporates, the toursim sector, local residents, and businesses focused on the health of the Bay and the lifestyle that it supports. In the process, circular value is being built for all stakeholders and the health of San Francisco’s iconic Bay is maintained and improved.

And at in/PACT Sports & Entertainment, we’re partnering with major sponsor brands, sports and entertainment properties to help them activate their purpose. Using the world's first global purpose activation technology platform and products, we’re connecting brands to the fans to enable what we call “fan-empowered giving” and in the process delivering value for our partners, for fans and for the wider community.

So, is CSR dead? No, I don’t think so. Rather, I think it and its cousins are growing up and coming of age. Time to celebrate.

Image credits: 1) Flickr/theirry ehrmann 2) Pixabay

Neill Duffy is a catalyst at the intersection of “profit and purpose” and a committed proponent of doing good and doing well approach to business. He is President of in/PACT Sports an Entertainment, Chief Catalyst at the One World Play Project and Chairman of the San Francisco Bay Area Super Bowl 50 Host Committee.

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229294
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Place-Based Initiatives Address a Key Social Part of the Triple Bottom Line

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91
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Content

"Community is the core determinant of future path in life." - Kevin Jordan, SVP, National Programs, LISC (A Keynote Speaker at the Re+Vitalize symposium)

Last week, I had the pleasure of attending the Re+Vitalize symposium on "place-based initiatives" in Dallas -- an inspired gathering of nonprofits and government folks united in the goal to build stronger, vibrant neighborhoods. The philosophy of the day was logical and simple: When people in a neighborhood have the resources and support to thrive, they will wind up becoming self-sufficient, happy and productive, and the neighborhood itself will go on to thrive further. Ensuring stable and supportive places for people to live is one of the most critical social tenets of triple bottom line principles that builds a foundation for everything else that matters when it comes to sustainability.  More than 200 folks from across North America were inclined to agree as we discussed the concept of the place-based initiative.

What is a PBI?

Simply put, a 'place-based initiative' is a philanthropic program that centers on a specific geographic area with a specific local goal. The goal can range from building homes, to ensuring broadband Internet access, to providing solid educational opportunities to children.  Commonly, a place-based initiative is funded with the help of corporate or government grants, then managed by a nonprofit or a partnership between a corporation, nonprofits and other groups.  A PBI will usually begin with an assessment of community needs undertaken among a variety of stakeholders. For example, one group who presented, called Digital Opportunity for the Rio Grande Valley, is working in colonias -- neighborhoods and towns along the Texas-Mexico border which are mired in poverty and often lack basic infrastructure like sewers, paved roads and, specifically, reliable Internet access. Kids in these neighborhoods often have to head back to their schools at night in order to properly do their homework due to a lack of access at home. The initiative will provide a combination of subsidized Internet access and laptops for kids as a way to bridge the digital divide.

What's in it for a corporation?

The most interesting part of the day, however, was talking to Sanjiv Yajnik, Capital One's president of financial services. Yajnik, born in Calcutta in the era of Mother Teresa, has made place-based philanthropy a personal passion for himself as well as a priority for Capital One. Yajnik told me that while growing up in Calcutta, and subsequently working around the world, he noticed a few things about neighborhoods.  In communities where people were looking out for each other, where real interaction was taking place all the time, a certain vibrancy would be present that allowed that community function and thrive and would make that community a desirable place to be. On the other hand, closed-door communities were not vibrant, not places you'd really want to bring up a family, and the kind of places that might spiral into decline. Vibrant communities produce vibrant businesses and vice versa. Without one or the other, real prosperity can't happen and, therefore, business has two main responsibilities, according to Yajnik: One is to be massively successful in and of itself ... just being successful creates vibrancy. But business also needs to be connected to the community, and sometimes that means lending a helping hand where situations have become so dire that people cannot escape their spiral otherwise. If it's done right, it's not just charity; it's a path to self-sufficiency which can turn a downward spiral into an upward trajectory. So, according to Yajnik, a PBI is a sort of "limited-time strategy" where Capital One might come in as a partner to an area specified by the public sector as having a specific unmet need.  Examples could be anything from education, support for schools and teachers, business plan assistance for entrepreneurs, financial literacy, and the physical revitalization of neighborhood assets. Yajnik sees Capital One’s involvement in individual PBIs as being a three- to four-year commitment of support after which, if all goes well, self-sufficiency results. I asked Yajnik whether or not PBIs and other neighborhood programs should be seen as traditional philanthropy or as an investment of sorts.  After all, at some point more stable neighborhoods mean new customers for the bank. Yajnik was matter of fact about his answer, saying simply:
"A certain amount of philanthropy is required to move a place out of a downward spiral.  That's just the way it is: You give the money; it doesn't come directly back ... ultimately, this is not about getting back a financial return.  I don't have any calculation for anything coming back to Capital One -- at the end of the day, my question is: What is our responsibility as a company?"

And the measurement of success?

With a strict financial measurement out of the way, Yajnik's measure of success becomes more subjective but ultimately more meaningful. It's a very important question without a precise answer. "You can measure some things: Did the graduation rate go up? Did test scores go up? ... But this is complicated, and the answer is ultimately something that comes from the community.  The community will make the decision to say, 'Yes, we're self-sufficient now, and you're no longer required.'" As an illustration, Yajnik is especially proud of Capital One's work in the Gentilly neighborhood in New Orleans, which won the U.S. Chamber of Commerce's Corporate Citizenship award in 2014; the company helped provide affordable housing and financial education, as well as economic strength and opportunity for residents. Disclosure: Travel to Dallas was covered by Capital One
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Google to Invest in Africa's Largest Wind Farm

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100
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Content

By Emma Bailey

Last month, Google announced that it will invest in Africa's largest wind power farm, on the heels of the company's $12 million investment in the largest solar project on the continent. By helping to provide clean power to areas of critical need, the Internet's most popular search engine company not only helps those who need power the most, but also ensures a future supply of potential customers.

The Lake Turkana Wind Power Project will be Google's second African investment. Previously, Google supplied a large investment in the Jasper Power Project, a mega-solar farm that now provides energy for several cities in South Africa. The Lake Turkana Project will supply power for up to 80,000 homes with 310 megawatts of energy for users in Kenya. Not only will the project provide clean and environmentally-responsible energy, but it will also increase access to electricity for thousands of Kenyans who are currently without power.

Sustainable wind energy is a goal for many who want to expand clean power sources. Wind energy has proven to be more cost-effective and cleaner than coal energy. In fact, according to ATCO, coal emitted about 1,500 million metric tons of carbon dioxide in the United States in 2014 alone -- about 76 percent of the total emissions from electricity generation. With no air emissions, no need to mine, no water pollution and no waste, wind energy is one of the cleanest sources of energy available. The average wind turbine provides power for up to 328 homes per year -- the same homes would require tens of thousands of pounds of coal each.

By investing in clean wind energy, Google is helping Kenya reach its goal of increasing its grid capacity by 5 gigawatts in the next decade. This expansion not only provides support for a growing economy, but also brings the country closer to universal energy access. The Lake Turkana Project is an important part of the country reaching its energy goals, and Google's investment is critical in making the dream of having clean, reliable power a reality.

While some experts are puzzled by Google's commitment to Kenya's goal of energy independence, a quick review of the company's history makes it clear that Google has a strong interest in investing in clean power. To date, the company has invested in a total of 22 renewable energy projects worldwide, most of which are in areas of sparse coverage. There is another motive for Google besides the obvious philanthropic interest: Energy plants in areas that lack coverage have proven to be good financial investments.

However, Google has yet another reason for investing in the Kenyan project: Africa and other developing areas of the world represent some of the largest opportunities for future Internet users. As Google continues to expand its influence in the area of Internet usage, it make sense for the company to expand its investments in projects that will supply the power to bring these users online. As Google works to build new clean power plants and farms, including solar and wind projects, the company ensures that abundant energy will always be available in areas in which it wants to expand Internet usage.

The Lake Turkana Wind Power Project is just one of many that Google is or will be involved in funding in order to bring clean power to the undeveloped areas of the world. By investing in sustainable, renewable energy sources, Google fulfills three important goals: providing expanded power access to all people, ensuring that power is available for Internet use expansion, and benefiting the planet by fulfilling intelligent energy goals.

Image credit: Flickr/Lollie-Pop

Emma Bailey is a freelance writer and blogger from the Midwest. After going to college in Florida she relocated to Chicago, where she now lives with a roommate and two rabbits. She primarily covers entertainment topics and issues pertaining to the environment. Find her on Twitter @Emma_Bailey90

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Upcycling: An Old Idea with Renewed Vitality

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100
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By Rachel Schohn

Upcycling isn’t new, but the term is. It’s a way of repurposing what we have, to create an even better or higher purpose use than originally intended. Reiner Pilz, who coined the term, states: "What we need is up-cycling, where old products are given more value not less.”

People have been repurposing textiles for generations. Our grandparents grew up in households that looked for the usefulness in available materials and tried not to waste anything. In fact, cotton feed bags, seed bags and gunny sacks were popular sources of material for clothing. This is a stark contrast to today's generation of consumers. Americans dispose of so much textile waste, it’s astounding. According to the Council for Textile Recycling, the average U.S. citizens discards 70 pounds of textile waste every year, with 85 percent ending up in our landfills.

Thankfully, upcycling is experiencing a resurgence, and many companies are beginning to see it as a mainstay for running a business. With so much textile material already in existence, reusing what we already have is a great option.

San Francisco Bay Area-based Oxgut Hose Co. makes an entire line of products from decommissioned fire hoses, saving them from a landfill. Portland, Oregon-based Looptworks has also created an entire line of products from “high-quality materials that are left over from premium good manufacturers." Los Angeles-based Reformation uses sustainable fabrics together with vintage garments to create an entire woman’s fashion line. Seabags, based in Portland, Maine, produces high-quality nautical bags, ranging from diaper bags and cosmetic bags to totes and weekenders, all from upcycled sails.

These companies, among many others, are succeeding. But why now? Just as people have been questioning the origin of their food, similar questions arise about the origins of clothing and objects we use daily. As hybrid technology and electric cars are taking off, so too are other products which offer sustainability, health and environmental benefits. Upcycling is part of this trend, as designers and consumers look to understand the sustainability behind their products.

We’re now well-versed in trying to eat organic, clean food whenever possible. People are starting to recognize that the same chemicals used on crops for food are also used on crops, such as cotton, which are used in textile production. Textile manufacturing is a very dirty industry. According to the film, "True Cost," “Cotton production is now responsible for 18 percent of worldwide pesticide use and 25 percent of total insecticide use." When we reuse existing garments, we are not only avoiding the landfill, but also closing the loop so that new crops don’t have to be planted, watered and sprayed. Energy isn’t used for new fabrics to be spun, and we can enjoy a creative process.

It gets back to the heart of 'reduce, reuse, recycle.' With clothing, we can reduce what we own, buy better quality garments that last, reuse clothing that we’ve outgrown or don’t wear any more, and buy used items when possible. What about garments that we can’t part with, but have a tear or blemish that makes them unwearable? Or garments that never fit just right, but we hold onto them because we love the fabric? They can’t simply be reused or recycled in the traditional sense, but they can be repurposed or upcycled into something unique, creative and memorable.

Creating upcycled items on your own and supporting businesses that upcycle are easy ways to support sustainability. Plus, you’ll have a creative, useful, one-of-a-kind item with a great backstory that you can feel good about.

Image credits: 1) Petite Marin 2) Oxgut Hose Company, used with permission

Rachel Schohn is the co-founder of Petite Marin. Petite Marin was started in 2013 by two Marin County moms who set out to create a children's clothing line made from upcycled garments. They repurpose dress shirts and uniforms into baby outfits, creating an adorable keepsake as well as keeping clothes out of the landfill.  Also mindful of how most clothing is produced today, their line is ethically made by a small, family run sew shop in California. After spending the last two years handcrafting children's wear made from upcycled men's dress shirts, Petite Marin has launched its custom line via Kickstarter. These custom pieces connect a child with a father, grandfather or other significant adult and are constructed to last from generation to generation.

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Clean Energy Shocker: Emerging Economies Invest More Than Wealthier Nations

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4227
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For the first time ever, clean energy investment by China and other emerging economies has surpassed the mark for wealthier nations. This significant flip in global clean-energy trends spells more bad news for fossil fuel companies like ExxonMobil, which have been counting on emerging economies both to grow their business and to leverage a positive image for their brands.

ExxonMobil in particular has been leaning on the "energy poverty" argument to portray its products as a net benefit to humanity, but the new report pulls the rug out from under the company's public relations strategy.

Flipping a global clean-energy trend


The new report is from a global clean-energy competitive index called Climatescope, a global public-private project supported in part by Bloomberg New Energy Finance, where you can find an interactive map as well as free downloads for the full 200-page report and the supporting data.

The report covers clean-energy investment for the calendar year 2014 among 55 developing nations in Latin America, the Caribbean, Africa and Asia. That includes a number of major markets including China, India, Pakistan, Brazil, Chile, Mexico, Kenya, Tanzania and South Africa.

The comparison group includes the United States and other members of the Organization for Economic Co-operation and Development (OECD).

For those of you on the go, Bloomberg New Energy Finance has summarized the major points, the main one being this:

"On a percentage basis, clean energy capacity is growing twice as quickly in Climatescope nations compared to OECD ones."

Climatescope totals up 50.4 gigawatts of new clean-energy capacity built in 2014 among the group of 55, a 21 percent increase from 2013. The 50.4 mark also surpasses OECD deployment.

That trend is reflected in the dollar figures for clean-energy investment. Among the 55 emerging economies assessed by Climatescope, new investment in renewables topped out at a record high of $126 billion. That's the highest mark ever for emerging economies --  a good 39 percent higher than the 2013 -- and it puts that group of 55 ahead of wealthier nations.

TriplePundit readers will not be surprised that China made a key difference in pushing the group of 55 past OECD countries. According to the report:

"China alone added 35 gigawatts of new renewable power generating capacity all on its own – more than the 2014 clean energy build in the U.S., U.K. and France combined."

Financial institutions also played a major role. Investments by banks and other institutions within the group of 55 totaled $79 billion in 2014, a significant increase from the 2013 figure of $53 billion.

Clean-energy technology gains parity

Here in the U.S., the fossil fuel lobby has been pushing the argument that clean energy cannot compete on its own, but requires special government treatment and public subsidies.
As a general argument that's not necessarily true, since hydropower can easily beat fossil fuels depending on the size of the power plant. More to the point, the costs of wind and solar energy are rapidly dropping as the technology improves.
Climatescope does in fact credit the reduced cost of technology for pushing adoption of clean energy in emerging economies:
"Continuing declines in clean energy costs appear to be driving growth. Costs associated with solar photovoltaic power have ticked down 15% year-on-year globally. Solar is particularly competitive in emerging markets which often suffer from very high power prices from fossil generation while also enjoying very sunny conditions."
Notably, the report reveals that the clean energy trend has continued even though overall economic growth among the group of 55 lagged last year:
"Progress in 2014 was achieved despite a number of countries in the survey seeing economic growth rates slow. Average gross domestic product growth across Climatescope nations slipped to 5.7 percent in 2014 from 6.4 percent in 2013 with the slow-down most apparent in major nations, Brazil, South Africa, and China. Despite the pullback, these three countries attracted a total of $103 billion in new clean energy investment in 2014."

It's also worth noting that one of the drivers behind global clean-energy investment is President Barack Obama's Power Africa campaign, which launched in 2013 as an "all of the above" energy strategy for electrifying sub-Saharan Africa.

That doesn't necessarily mean good news for fossil fuels. As Bloomberg points out, though Power Africa may lean partly on natural gas as a "cleaner" fuel, its focus includes utility scale geothermal as well as solar off-grid solutions.

That dovetails with another new clean-energy report by IRENA, the International Renewable Energy Agency, which concludes that the region's clean energy resources could be tapped relatively quickly. Renewable energy now fills 5 percent of the region's need, and the report anticipates that could surge to 22 percent by 2030.

Image credit (screenshot): via Climatescope.org.

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This Holiday Season, Find Out What Your Favorite Brands are Doing on Human Rights

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Last week, the Business & Human Rights Resource Center (BHRRC) shared a helpful instructional video on how to use its new Company Action Platform (the Platform), which measures company action on human rights. Coming shortly before Black Friday and Cyber Monday, the video serves as a useful reminder of how consumers can take a hard look at what -- if any -- progress their favorite brands have made toward ensuring respect for human rights.

How the Platform was born


In December 2014, BHRRC invited 180 companies to provide information regarding their policies and practices on human rights. In determining which companies to approach, BHRRC identified: the top 30 companies (internationally) by market capitalization in four sectors -- Extractives; Food, beverage & agriculture; Information and communications technology; and Retail & apparel; the largest 50 companies by market cap overall (which captures companies in some other sectors, such as Finance & banking and Pharmaceutical); and additional large companies headquartered Africa, Asia, Latin America and the Middle East.

BHRRC then issued a five-page questionnaire to those companies covering topics ranging from policy commitments, governance and management, to stakeholder engagement, reporting and challenges. Responses were loaded into and organized in the Company Platform, which debuted in February and is continuously updated with feedback from companies and current news about corporate human rights impacts.

How to use the Platform


Finding out whether and to what extent a company responded to BHRRC’s survey is easy, and consumers should leverage this information when making purchasing decisions.

For example, imagine one is in the market for a new mobile phone and is considering a replacement. If she clicks on the drop-down under “Companies,” selects “Apple,” and then clicks “View Response,” she will find that “Apple has not yet responded to the survey" and that there is "[n]o publicly-available human rights policy found for Apple.” Perhaps no surprise there, but she will also find the same results for the two other major smartphone manufacturers -- Google and Samsung.

Who else makes mobile phones? No idea. Luckily, the Platform allows the consumer to search by “sector” as well (see “Advanced search options”). By viewing the responses of all companies in the “Information and communications technology” (ICT) sector, she can see that a number of other technology companies failed to respond to the BHRRC survey as well -- eBay, Facebook, and IBM, to name a few.  Shame.

Of course, she can also see which companies did respond, and then delve into the details of those responses. Luckily for the prospective mobile phone purchaser, Microsoft took the time to complete the BHRRC survey, so the consumer can drill down a bit into its human rights initiatives. For example, one will discover that Microsoft has a human rights policy; it has a dedicated “Technology and Human Rights Center,” which works to foster dialogue to advance the understanding of the ICT sector’s impacts on human rights; and one of its primary human rights challenges is how to engage with its manifold stakeholders.

In short, after a few minutes of research the consumer has learned that the world’s leading smartphone manufacturers ignored the BHRRC survey and that Microsoft at least appears to take the issue of human rights seriously. Armed with this information, one can decide whether to finally cut the cord and jettison Apple (or Google, or Samsung) once and for all, or to continue to ignore their apparent lack of concern for the rest of the planet because they make a better product. In either case, at least the decision will be an informed one.

Key insights from the data


Having explored how the tool can be useful from the perspective of a consumer, let’s turn to some of the broader and more significant insights revealed by the data available in the Platform:

  • Of 184 companies polled, a little more than half (52 percent) responded to the survey.

  • The most responsive sector was “Food, beverage & agriculture” (73 percent participation), which, as we have seen, has also done well working with socially responsible investors toward more sustainable practices. Bravo.

  • The least responsive sectors were some of the most traditionally problematic, including retail/apparel (27 percent participation) and state-owned extractives (36 percent); a correspondingly small proportion of companies in these sectors have human rights policies.

  • Few companies have addressed the so-called “third pillar” of the Guiding Principles: access to remedy.

  • While many companies cited weak government frameworks and enforcement as challenges, a number of governments cited opposition by economic groups as a barrier to more significant progress on corporate accountability for human rights abuses. As BHRRC put it, “Too often, interactions between companies and governments work against, rather than in support of, human rights.”

  • Other challenges frequently identified by companies were the complexities of their global supply chains and a lack of understanding about the “language” of human rights.

A reminder of the work left to do


The company responses (and lack thereof) in the BHRRC platform provide a good reminder of the work left to do in the field of corporate human rights compliance and accountability.  Below are a few immediate steps businesses could take to strengthen their commitment to human rights.

Tone at the top.  Successful compliance starts with a strong leader willing to communicate a coherent vision and uncompromising opposition to corporate human rights violations. Where that tone has not been set, however, it is very easy -- particularly for larger, tentacular organizations with extensive international supply chains -- to shirk responsibility. One might look to Unilever and its CEO, Paul Polman, as an example of how strong leadership on human rights can translate into action (and even he has struggled some). Here's what Polman had to say in the press release announcing the publication in June of Unilever’s first-ever human rights report: “Business can only flourish in societies in which human rights are respected, upheld and advanced. People are our greatest asset, and empowering them across our supply chain is not only the right thing to do, but also ensures a sustainable future for the business.” Hear, hear.

Larger corporate social responsibility (CSR) teams.  More and more companies are creating dedicated human rights teams within broader “social responsibility” functions, and still more businesses are formalizing their CSR practices. This is a positive development; however, as BSR discovered earlier this year, most CSR/sustainability teams are small, and a one-person human rights department cannot make a significant impact at a big company. A company that cares about human rights and social responsibility is one that invests in the personnel to manage those issues, rather than dumping them on the already crowded plate of a middle-manager.

Engage the community. While many companies have mechanisms that allow employees to complain about alleged human rights violations, very few have procedures that permit third parties (i.e. community members) to raise such concerns. The Guiding Principles require businesses to “establish or participate in effective operational-level grievance mechanisms for individuals and communities who may be adversely impacted” by company activities. This is particularly important to multinational corporations operating or utilizing suppliers in countries with poor human rights and access to justice records. I wrote about Adidas’ “updated” grievance mechanism last year, which, at least on the face of it, remains a good example of an attempt to engage external stakeholders in the human rights remediation process. More companies should follow suit.

Human rights learning. Today, it is inexcusable for a company to plead ignorance of the “language” of human rights in an effort to justify inaction on human rights compliance. Businesses that truly care about their human rights impacts have no trouble communicating about the issue, and some have made great strides toward institutionalizing respect for human rights. Unilever’s inaugural human rights report, mentioned earlier, is an example of the sophisticated understanding of human rights challenges that can be achieved when a company truly commits. When a company believes it lacks the knowledge to engage on the issue of human rights, it's time to do some homework and then train employees. Nonprofits and civil society do not have a monopoly on this work.

*****

It may seem like there is little consumers can do about what happens inside a company; however, thanks to tools like the BHRRC platform (and others, like Sustainable Brands or Oxfam's "Behind the Brands" campaign), we can take the time to find out which companies have demonstrated a respect for human rights and then factor that information into our purchasing decisions.  The Holiday Season is a good time to start.

Image credit: Flickr/COD Newsroom

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Antibiotic Apocalypse Economics

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As an economist, I will leave it to food scientists to opinion on whether eating genetically-modified fish is healthy. I will opinion as an economist that limiting consumer awareness is always bad economics.

This is, again, an issue because the FDA just set a new food-labeling precedence. The FDA has approved a genetically-modified salmon for sale to consumers. As importantly, they also ruled that the genetically-modified salmon does not have to be labeled as genetically modified or GMO. How serious could this be? Similar food policy regarding consumer awareness now holds the potential of contributing to an emerging antibiotic apocalypse.

Fish genetically modified to increase profits


The FDA’s decision on not labeling the genetically-modified fish as GMO is a question of economics. The salmon in question was not genetically modified to promote human health. It was genetically modified to accelerate fish growth. The genetically-modified salmon was modified to grow faster and larger, thus lowering the per-pound manufacturing cost of the fish. The FDA approved the sale of genetically-modified fish to promote profits.

Transparency is key to a market-based economy


Transparency is fundamental to the success of market-based economies. Consumers must be armed with the insights and information they need to make rational decisions. Transparency goes beyond price discovery. Consumers must be informed on product ingredients and supplier behaviors to optimize their procurement.

The FDA violated this economic principal. The reason for doing so on behalf of the food manufacturer is obvious. The seller of genetically-modified fish would face sales resistance if consumers knew their fish was genetically modified. To overcome consumer procurement resistance, the fish supplier would have to invest in consumer outreach campaigns to explain to consumers why they should buy their fish. The FDA eliminated this core supplier responsibility of providing consumers with the information they need to optimize their wellbeing. This advantages the fish producers by lowering their sales and marketing expenses at the cost of blinding consumers at the point of purchase.

Am I fabricating a business and public policy issue? Not according to Costco, Whole Foods, Trader Joe’s, Target and Kroger. All of these retailers have elected not to sell genetically-modified fish.

Antibiotic apocalypse


The need for full disclosure to food consumers is also not an esoteric health issue. It is an issue so serious and potentially deadly that we now stand at the cusp of an antibiotic apocalypse tied to unsustainable farming practices used in the U.S. and around the world.

A recent publication by Chinese scientists reported on finding a bacteria they labeled MCR-1. This bacteria is resistant to all known antibodies. MCR-1 is also easily shared with other bacteria enabling their mutation and the spread of antibiotic resistance. This positions MCR-1 as the foundational bacteria for an antibiotic apocalypse where humans will once again die from infections like E. coli or sexually transmitted diseases like gonorrhea.

This appears to be as scary as it sounds. Professor Timothy Walsh from University of Cardiff and a collaborator to the Chinese study says: “All the key players are now in place to make the post antibiotic world a realty. If MCR-1 becomes global, which is a case of when not if, and the gene aligns itself with other antibiotic resistance genes, which is inevitable, then we will have very likely reached the start of the post-antibiotic era.” The post-antibiotic era has also been labeled by scientists as the Antibiotic Apocalypse.

How unsustainable farming practices created the antibiotic apocalypse


Scientists point to the injection or feeding of antibodies to farm animals as the likely cause for MCR-1. MCR-1 was found in a pig that was fed antibodies. Farm animals are injected with antibodies, which are intended to protect humans from diseases, to increase the animal's health. Increasing the numbers of healthy animals making it to the slaughterhouses increases profits. It now appears to have done so at the risk of creating a global bacterial epidemic.

The lack of food packaging transparency and information enabled this unsustainable farming practice. How likely would consumers have bought meat labeled like this, “Use of antibodies in the production of this meat has the potential of creating a global antibiotic apocalypse.” The obvious answer is that the U.S. government (and the Chinese government) promoted farm profits by not informing consumers on the risk they faced from eating meat that used antibodies to optimize animal production.

Externality cost pricing and transparency are the foundation of sustainability


Free markets enable human well being. In economic theory, consumers are fully informed in a free market. There are no secrets. There is no collusions between suppliers. There is no manipulation of government policy by suppliers to advantage their profits at the expense of consumer wellbeing.

Unfettered markets do not enable consumer wellbeing. This core economic principal is as old as the cloth pin manufacturer collusion example used by Adam Smith in his book "Wealth of Nations" that is the foundation of economic thought. Unfettered markets allow suppliers to hid, distort or lie about information that is key to consumers making rational decisions that optimize their welfare. In unfettered markets companies are allowed to cheat through collusion, a lack of information and misinformation to gain profits at the expense of competitors and consumers.

Free markets are based on price discovery by consumers on the total cost of what they are buying, including externally costs like an antibiotic apocalypse tied to the sale of animals feed antibodies or global warming created by over consumption of carbon fuels and materials. Fettered markets fail to display externality costs at the point of purchase through collusion, political lobbying and misinformation. These costs are ultimately paid through human suffering and premature death.

Protect yourselves


I may be an economist but I am not an idealist. We are in an age where we are at risk from an unfettered marketplace where consumer wellbeing too often loses out to profit interests. The age of the unaware consumer has to end. It costs are now becoming obvious and significant. There are no free lunches in economics or life. Actions like those of the FDA to allow the sale of food without transparent food labeling has to end if we have any chance of avoiding a tragic milestone in human health and prosperity.

However, ultimately, awareness is the consumer’s responsibility. Fortunately, this is the information age. What we need to know to protect ourselves and our loved one is there on Google. How effective can self awareness be? I have lost 30 pounds and improved my blood test results by increasing my awareness around clean food. There are now apps like GoodGuide and the Monterey Aquarium’s Seafood Watch that can be downloaded on phones. These apps enable real time and informed decisions on sustainable food and products.

We still hold power through our procurement. Our vote at the cash register may have more immediate influence than what we do at the ballot box. If we continue to buy food based on lowest retail price we will pay for it later in terms of increased disease, weight gain, obesity and diabetes. Or we can raise our awareness to realize that what is on the food label or price sticker is not the whole story. Somberly, it is becoming frighteningly evident that what is not on the food package may be the real cost we must focus on to protect ourselves, our loved ones and the environment.

Image credit: Flickr/Joey Parsons

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