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The world of philanthropy wields powerful influence. American individuals, bequests, foundations and corporations gave an estimated $449.64 billion to U.S. charities in 2019, one of the highest annual amounts ever for charitable giving. Yet too often people of color pursuing their share of that funding to scale social innovation are left out. A new Racial Equity Philanthropic Fund from global non-profit Echoing Green sets out to address that imbalance.

An investment in social innovation, and access to philanthropy, for all

To support the current historic movement toward racial justice, the Fund aims to raise $50 million for strategic investments in racial equity focused work. The overarching goal is to transform the field of social innovation over the next three years and ensure that today’s heightened awareness of racial inequity translates into sustained action and impact, according to Echoing Green President Cheryl Dorsey.

“We're in unprecedented times where you have this confluence of the twin pandemics of both structural racism and COVID-19,” Dorsey told TriplePundit. “I think in this moment, when you have laid bare the many structural inequities that confront people of color and other marginalized groups, philanthropy has an important role to play. Its raison d’etre is to help solve societal problems and those in need. To me, this is what philanthropy is called to do.”

Scaling up ambition to meet the moment

The Racial Equity Philanthropic Fund will support the following goals:

Launch and scale 500 social enterprises focused on racial equity in both the U.S. and globally. In addition to launching new leaders, Echoing Green will invest follow up funding in its portfolio’s most high-impact enterprises to help founders scale their solutions.

Build onramps to social innovation for 5,000 leaders focused on racial equity. Echoing Green will provide social innovation programming and learning opportunities to communities that have historically not had access to the tools or capital required to build and scale.

Create opportunities for engagement in the movement for racial equity for 10,000 corporate employees. Leveraging existing employee engagement programing, Echoing Green will engage partner institutions in both shorter, time-bound and longer, in-depth opportunities to contribute to the movement.

As Dorsey told 3P, “As best we can tell, there has not been a coordinated effort in the field of social innovation to focus squarely on racial equity. And because Echoing Green is one of the leaders in the field of social innovation that has always done its work at the intersection of innovation and justice, we felt compelled to help social innovation meet this moment.”

A sign that investors as well as philanthropists are looking more closely at how to engage more effectively in racial justice is the success of the NAACP’s Minority Empowerment ETF, on which 3P has previously reported.

New research unveils barriers for leaders of color

To gain a better understanding of the barriers facing entrepreneurs of color, Echoing Green teamed up with The Bridgespan Group on a research report published in May, “Racial Equity and Philanthropy: Disparities in Funding for Leaders of Color Leave Impact on the Table.”

The report looked at Echoing Green’s applicant pool, a group that is considered among the sector’s most promising early-stage organizations. In fact, of Echoing Green’s close to 3,500 submissions each year, the acceptance rate for a Fellowship is only 1 to 2 percent.

Assessing only Echoing Green’s highest qualified applicants (i.e., those who progressed to its semifinalist stage and beyond, about 160 organizations), the report found that revenues of the Black-led organizations are 24 percent smaller than the revenues of their white-led counterparts, and the unrestricted net assets of the Black-led organizations are 76 percent smaller than their white-led counterparts.

“It is extraordinarily difficult to make it across the finish line of the Echoing Green application process,” Dorsey acknowledges. “If you're still standing at the end of this process, these leaders are phenomenal. And the fact that despite their caliber, our leaders of color were having difficulty raising funding really signaled to us that there were real entrenched structural barriers confronting these leaders.”

Tomorrow: We’ll focus on how the lack of access to various professional networks can end up excluding people of color from benefitting from the U.S. philanthropy community.

Image credit: Gayatri Malhotra/Unsplash

Photo: GM’s eCOPO Camaro Concept, which features an electric motor and GM’s first 800-volt battery pack replacing the gas engine – one of many new developments consumers could see within the electric vehicles market in the coming years.

The trend toward electric vehicles (EVs) has been a slow one, partly because the new technology poses a major challenge to the Big Three U.S. automakers. Unlike Tesla and other new startups, these legacy manufacturers have to reshape and retool existing assets in order pivot to zero-emission mobility. Intuitively, this reality puts them at a disadvantage - or maybe not, based on recent developments.

Fiat figures on cracking the U.S. electric vehicles market

A hint of things to come occurred back in 2009, when Ford, Chrysler and General Motors were buckling under the weight of the 2008 financial crisis. As part of the 2009 American Reinvestment and Recovery Act, Fiat began acquiring shares in Chrysler. Fiat also began integrating its sustainability culture within Chrysler as well.

Somewhat ironically, Chrysler had previously manufactured a few dozen electric minivans back in the 1990’s, but that effort soon fell flat. By the time Fiat began buying up shares, Chrysler had long abandoned the idea of electric vehicles.

That changed after 2014, when Fiat achieved majority shareholder status. As Fiat Chrysler, the company redoubled its focus on sustainability. That includes a renewed push for electric vehicles.

Just last week, Fiat Chrysler introduced a hybrid version of its iconic Jeep Wrangler for the U.S. market, with plans to reintroduce the brand, in addition to more plans for electrification to come.

Ford explores a partnership with Rivian for all-electric pickup trucks

Ford has also reached outside of its own in-house operations to accelerate its electric vehicles profile.

The company had previously focused its electrification strategy on sedans and hybrids. Last year, though, Ford stepped up with a $500 million investment in the startup Rivian.

The initial aim was to leverage Rivian’s “skateboard” platform to make a quick jump into the all-electric pickup and SUV markets.

Unfortunately, the economic downturn touched off by the COVID-19 crisis appears to have thrown up a roadblock. Earlier this year, Ford’s Lincoln luxury brand canceled its plans for a Rivian-based model.

On the upside, Ford has still voiced a strong commitment to 100 percent electric vehicles in the future.

In an official statement dated April 28, Ford explained that its “strategic commitment to Lincoln, Rivian and electrification remains unchanged and Lincoln's future plans will include an all-electric vehicle consistent with its Quiet Flight DNA.”

Adding force to those words, Ford has already established a sprawling network of branded electric vehicle charging stations along with a proprietary payment system. The new all-electric versions of the iconic Ford Mustang and F-150 models should also help boost the company’s EV profile in the future.

Rivian has since entered into a partnership with Amazon to develop a fleet of all-electric delivery vehicles.

GM expands electric vehicles strategy with fuel cell specialist Nikola

GM already has amassed a strong electric vehicles profile through its popular Bolt sedan. However, the company has recognized that an outside assist is needed to beat the competition. To that end, last week the automaker entered into a strategic partnership with the startup Nikola.

Though initially known for its hydrogen fuel cell electric truck, Nikola has also branched into the all-electric, battery-powered vehicle space with the Nikola Badger pickup.

Under the arrangement, GM secures an 11 percent ownership stake in Nikola. The two companies anticipate ramping up both their battery and fuel cell reach through the partnership.

Of particular interest in that regard is GM’s track record of sales to the Department of Defense, along with an ongoing fuel cell partnership with Honda.

In addition, Nikola’s interest in producing green hydrogen dovetails with GM’s holistic focus on electrification.

GM has not confined its efforts to rooftop solar panels. The company recently expanded its renewable power commitments through a clean power program run by the Michigan utility DTE. The utility has already leveraged those commitments to support three new wind farms. GM’s additional participation will provide for more renewable power on the grid, to the benefit of all ratepayers.

Clearly, U.S. auto makers have recognized that the domestic and global auto markets are in a state of flux. They are forming new alliances to gain a foothold in the zero-emission future, helping to ensure that the post-COVID recovery will be a green one.

Image credit: GM

In the highly-detailed and purposefully-organized 2020 book, "Female Entrepreneurs: the Secrets of Their Success," authors John Smythe and Ruth Saunders don’t tell the stories of accomplished business women — they let the women tell them.

And what we learn from their stories is there is no typical female entrepreneur. Women who go on to start their own businesses have a myriad of backgrounds, motivations and goals. They launch their businesses at different ages, some as young as 10, others not until they're nearing traditional retirement age. But most have a vision and go for it.

“First off, let’s debunk the myth that entrepreneurship is the unique preserve of thrusting youth with a 21st-century proposition,” the authors wrote. “Well, it can be that but, as we found from our interviews, the bug can strike at any age, triggered by a variety of self-determined catalysts or responses to circumstances — or a mixture of the two.”

Saunders explained further in an interview with TriplePundit. “We went into the interviews with no preconception of what we were going to write,” she said. “We just got them to tell us their stories, and from there we got the themes coming out from it.”

Besides giving voice to 52 different women entrepreneurs, Saunders and Smythe effectively arranged the book almost as a how-to guide, outlining the steps for most aspects of planning, launching and running a business, including how to get started, discovering and honing an idea, picking the best supporters, developing and refining a work-life balance, and even how to elevate self-confidence.

“I think actually what was really nice about the book is that we interviewed people who were just starting out, versus in the thrust of early growth, versus into kind of more cruising mode, versus coming to the end of their life or having sold [the business] or doing their second or their third venture. So we had a whole spectrum of people,” Saunders explained.    

The authors also pack the book with interesting statistics and “wow, who knew”-type facts, one of the most notable of which is that, as a whole, women entrepreneurs are more successful than men but receive far less cash from investors. In the past, women accounted for slightly more than 25 percent of the self-employed population, but since 2008, 58 percent of the newly self-employed have been female, according to the book. Women most often are drawn to launch businesses in the government, health, education and social services fields.

Part of the reason for the lack of funding could be that women entrepreneurs often don’t reflect the image financial backers have for this group of business leaders. “When it comes to raising either angel investment or venture capital money, women typically receive a tiny proportion of what’s given out, and that number has stayed stubbornly low over time,” the authors wrote. “...They (women) just don’t conform to the norm of the young hoodied-male geek.”

Not surprisingly, most women entrepreneurs cite family concerns and necessity as the main reasons for starting a business. Often they found that traditional workplaces were not willing to make adjustments for them to care for children or elderly family members. Men, however, were almost twice as likely as women to say that a primary reason they became self-employed was to "make more money."

One of the 52 entrepreneurs, Sandra Macleod, took a chance on starting her own business, Echo Research, after her employer released her when she was pregnant — and things took off. 

“I was about to go off and have my first child and I remember my boss saying to me: ‘We have too many chief executives and you obviously won’t want to carry on working.’ So they gave me a handshake and wished me good luck,” Macleod related. “I wanted to continue working so I asked if I could take a franchise I’d won (CARMA) with me, and my boss said: ‘Well, it’s not going to come to anything, so yes, you’re welcome to it.’ I said thank you and hugged him and left. So I took on the franchise as no one was interested in it, rebranded it to Echo Research, and grew it into an $8 million company.”

The inspiration for the book, Smythe said, was his own late mother, an entrepreneurial-type at a time when such women were simply considered struggling. “My mother had passed away 10 years or so prior, and I was thinking about her,” Smythe told TriplePundit.  “She was a single mother who brought me up in difficult circumstances. I was thinking about the sort of attributes that she had shown, you know, diligence, determination, all those sorts of strong things. And it got me thinking, in 2017, about female entrepreneurs and females in the executive suite, and it was beginning to become quite a big story. I just sort of jotted down the names of the female entrepreneurs that I knew and I didn't have to go and look up somewhere and it came to a staggering 26 and then I did the same for the males, which came to under half that.  And I thought, ‘Hang on a sec, something's happening here.’”

Realizing the advantages of having a female co-author, Smythe approached Saunders. “I felt it was an honor to be asked,” she said. 

The authors drew their own inspiration from the women they met. “The final thing that I think came across very strongly to me, listening to all these stories, is that they all set their business story in the context of their life story,” Smythe told us. “And that's one thing I don't think men would do.”

Through her interviews, Sauders said she learned about growing self-confidence and conquering a fear of failure. “How to overcome a lack of confidence is to play to your strengths and delegate your weaknesses,” she said. “So don't try to be good at everything, but recruit people around you who are not in your likeness to cover your weaknesses and fear of failure... that's going to lead to your next grade. So if you fail, understand why and adapt. And in many cases we have people say it was the failure that led them to be successful. And so, you have to embrace failure.” 

Image credit: Unsplash

In a recent post, I shared how history is full of examples of entrepreneurs who presciently saw the future and seized the innovation high ground. Today, “thanks” to COVID-19, it doesn't take a crystal ball — or luck — to identify business opportunities. But do keep the following factors in mind:

Use your head. Businesses can learn by listening to scientists to determine where to put their development dollars. It is a matter of demand and supply.

Infectious diseases will break out (again). Businesses can adapt their oft-empty office spaces now to allow for remote working and necessary distancing or other creative uses. Anti-bacterial and anti-viral surfaces are only the start, whether there’s a vaccine for COVID-19 or not. Reconfigure now and you’ll face less disruption the next time … and we know that there will be a next time.

Likewise, those who invest now in developing low-carbon technologies, from carbon capture to energy storage systems, will be in demand. More frequent and more severe weather mean people are going to need stronger and more weather-proof infrastructure.

Lastly, Black Lives Matter and the movement toward social justice will be a continuing force going forward. Have you invested in diversity and inclusion efforts for your company? If you don't see the power of developing a culture that is inclusive, respectful and allows everyone to bring their best true self to the workplace, then consider the risks of failing to do so. At the very least, you won't get the best and brightest. At worst, you may find yourself facing employee activism and even possible customer boycotts.

Protect your heart. Even before states or the federal government declared an emergency over COVID-19, some companies demonstrated that their employees were the heart of their companies by transitioning to remote work where feasible and reducing the density of people in their workplaces. One office sent all the pregnant workers and the partners of pregnant workers home in early March, based on available CDC information that any possible effects on a developing baby were unknown. Other companies offered employees the option to voluntarily accept pay cuts — in some cases steep cuts — in order to keep everyone on the payroll. Others “laid off” only so their employees could get benefits, but promised they would bring people back when they could.

Mind your lungs. One of the first things people noted from the COVID-19 shutdowns was cleaner air and less pollution. Vistas that had been hidden for decades came into view. Some cities — notably Paris, Milan and Washington, D.C., among others — reviewed their transportation systems, including turning former auto lanes into bike lanes, to try to adapt their infrastructure and discourage the use of personal transportation for commuting. Companies can do the same: Look at the benefits you offer, and determine if paying for or making employees pay for all those parking spaces makes sense. Is your office accessible to public transit? Are there ways to encourage employees to ride-share? Or even to walk or bike to and from work?

Start now. This may seem an inappropriate time to try to “look back at the lessons learned,” but there is no better time than when the lessons are inarguable and acute. People tend to forget and will try to. The fact that the lessons from the 1980s about HIV/AIDS, or other outbreaks such as swine flu, were not brought to bear against COVID-19 demonstrates the importance of not allowing a remove of time to dampen our sense of urgency. Because the next crisis may come faster than we think. In fact, if you talk to climate scientists, it is already here.

Photo credit: Tom Barrett/Unsplash

Photo: Milton Friedman (seated right) with President Richard Nixon (left) and Director of the Office of Management and Budget George Schultz (center) during a June 1971 meeting at the White House.

Milton Friedman was a revolutionary, an economist for the ages who redefined capitalism as we know it. This year, on September 13, we celebrate the 50th anniversary of his most famous statement: the sole purpose of a business is to produce profit for shareholders.

Just as Friedman stood against Keynesianism in the 1950s, we today, respectfully, stand against his belief that financial return is the only hallmark of a successful business — a viewpoint he laid out in a 1970 article for the New York Times Magazine, aptly titled “The Social Responsibility of Business is to Increase its Profits."

How things have changed.

Today, that Milton Friedman viewpoint is considered unsound and unwise for the modern corporation. To survive and thrive in an increasingly competitive marketplace, companies must have a purpose beyond profits — a sentiment put forth by leading business and economic leaders, including the Business Roundtable and the World Economic Forum. Best Buy CEO Corie Barry put it this way: “The purpose of this company is not to make money. It is imperative to make money, but it is not the purpose. Our purpose is to enrich lives through technology.”

Beyond having a positive impact on society, companies must be meaningful to their customers, employees and communities down to the individual level. In the words of Keith Weed, Unilever’s former chief marketing officer: “We need to build brands with purpose. We need to go from ‘marketing to consumers’ to ‘mattering to people’.”

Not only are consumers overwhelmed with choice, but they are increasingly savvy when it comes to the social and environmental impact of the companies they buy from. This is heralding the growing “stakeholder capitalism” movement, which asserts that the true measure of a successful company is how it engages with and serves all stakeholders, from employees to the communities in which companies operate — not just shareholders. This is a growing mandate for leading CEOs: In a recent report by Morning Consult, half of the top 10 drivers of CEO performance related to purpose.

COVID-19, unfortunately, has proven a worthy pressure-test of a modern corporation’s relationship with stakeholders. Companies with a purpose — like Tata Consultancy Services, Lineage Logistics, AB InBev and others highlighted by leaders like Just Capital — have been better equipped to respond rapidly and appropriately to COVID-related disruptions and work to support their employees, operations and communities. Many companies halted operations to protect employees, forgoing millions in profit to keep their people safe. Others implemented unprecedented measures, from paying hourly employees regardless of hours worked to providing extended sick leave and healthcare benefits.

And still others invested millions of dollars and capabilities into solutions to the pandemic — manufacturing ventilators, masks, vaccine components and more. The result of these efforts is a safer, more engaged and loyal workforce and appreciative customers, supply chain partners and communities. That outcome, we believe, sets organizations on a course for long-term profit and growth. And purpose must be a long-term strategy and vision to significantly impact the business. Leading multinational companies are even embedding this mandate into their purpose statements, including Mars Inc. (“The world we want tomorrow starts with how we do business today”) and AB InBev (“Bringing people together for a better world” and “Build a company to last for the next 100+ years”).

Back to economics: Friedman’s radical views continue to shape economic policy today. The Economist hailed him as “the most influential economist of the second half of the 20th century…possibly of all of it.” While we disagree with his perspective that businesses exist only to make a profit, we acknowledge the tremendous impact of his work, which earned him the 1976 Nobel Prize in Economic Sciences — and we believe that were he alive today, he would embrace the evolution of capitalism to serve all stakeholders.

Why?

Friedman’s primary contributions centered on an alternative macroeconomic viewpoint known as “monetarism,” which emphasizes the role of government in controlling a country’s money supply, and how monetary fluctuations drive broader economic fluctuations. Put simply, he supported free markets and believed in a restricted government role in fiscal policy. Here’s where it gets interesting: As part of this, Friedman believed that privatization of some public services would not only support a flourishing economy and innovative business sector, but also provide enhanced social services, and thus, by our interpretation, better serve society.

As an example, Friedman proposed an educational model where publicly-funded schools are privately run to provide a higher standard of education, boost local economies and give parents greater choice. To this end, Friedman and his wife founded the Friedman Foundation for Educational Choice to advocate for school choice. (Today, the Foundation is known as EdChoice.)

On the topic of public goods, Friedman believed that while the government should provide basic public services, they should not hold a monopoly on those services, especially if the private sector could offer better. (At the time, Friedman’s main target was the United States Postal Service.)

He was also a firm believer in the interplay between government, private sector and nonprofits to address social issues such as poverty — a viewpoint we hold fast to today. Many social ills, especially those regarding massive challenges like hunger, poverty and housing, simply cannot be solved by one actor, be it government, a corporation, or a well-funded foundation. Beyond the sheer financial burden, these problems require knowledge, assets and capabilities that only a coalition could provide. Today, we view this as a shared value approach: By partnering to pool resources and collectively tackle a social challenge, all parties — including the ultimate beneficiaries — derive greater value and impact as a result, and at a quicker pace.

Perhaps it’s a stretch, but Friedman’s view on the interplay between social good and business has the vestiges of modern-day purpose. By applying business expertise to enhance public services and address social challenges, Friedman believed the economy would strengthen, corporations would make more money and, in tandem, society would benefit.

With that, we extend our thanks to you, Milton Friedman. The mere act of challenging the status quo of U.S. capitalism launched a journey that continues today. After all, Friedman was the first to state that corporations have a purpose at all, and that has evolved in exciting ways over the past 70 years. From pure profits to philanthropy, cause marketing to corporate citizenship, and social impact to purpose, we continue to redefine capitalism and the role of businesses in society.

Above all, Milton Friedman was a rebel. He was a Jewish immigrant who believed in a free market, immigration, gay rights and the legalization of marijuana (in the 1950s, '60s and '70s, no less). Friedman was unafraid to stand up for his beliefs and advance social change. The world may have changed since Friedman declared the purpose of a business, but the need for equality, acceptance and social support has not.

And for that, we say: Thank you, Milton Friedman.

This article was co-written with Kristin Kenney, Senior Associate at Carol Cone ON PURPOSE. Kristin has spent her career helping dozens of private and public sector companies bring their social impact to life. She firmly believes that business can and should profit with purpose.

Image credit: Nixon Library

The rock climbing industry has struggled during the months of the coronavirus pandemic, with an estimated revenue decline of 28 percent in 2020. Despite the steep drop this year, the industry grew by 3.9 percent annually in the United States over the past decade, Australian research company IBISWorld calculates, and climbing was added to the upcoming Tokyo Summer Olympics.

Usually growth means new people join in from unique walks of life, but the rock climbing community has struggled with welcoming the new. According to its 2019 “State of Climbing” report, the American Alpine Club, a century-old organization that has been involved in historic summit expeditions, has a membership that is 85 percent white and 72 percent male.

Rock climbing has a diversity problem

“No one should be surprised to hear that climbing is dominated by white men,” James Edward Mills, author of "The Adventure Gap," which documents the first all-African-American attempt to summit Denali, is quoted as saying in the report. “But rather than getting defensive over a statistical fact we should concern ourselves with how to go about fixing it.”

The good news is that there are organizations striving for inclusion, from the cost of equipment to the accessibility of gyms and crags. This year, for example, marked The North Face’s fourth Global Climbing Day. The August 22 “Walls are Meant for Climbing” event invited people to climb with the purpose of supporting greater accessibility, inclusion and equity in the community. The brand also contributed funds to organizations that are making concerted efforts to lower barriers to entry for people of color, women and individuals with disabilities — organizations like Memphis Rox, Paraclimbing London and The Brown Ascenders. This year, the company is donating $80,000.

Another note of progress comes from USA Climbing, the national governing body of competition climbing, which appointed a Diversity, Equity and Inclusion Task Force last year. Last month, it launched a diversity, equity and inclusion survey, with the purpose of identifying research areas and action items for the USA Climbing Board of Directors. The survey is still open.

Why not keep rock climbing white and male?

A big concern for the rock climbing industry during the novel coronavirus pandemic is longevity. Due to hygiene concerns, many gyms have had to close their doors temporarily. Hence outreach is a priority.

Of course, reaching new groups is the ethical thing to do, but there are other practical reasons for inclusion. For one, the United States is becoming increasingly racially and ethnically diverse. In a blog for the advocacy organization The Access Fund, climber Taimur Ahmad notes, “If we want to ensure that the places we love, and climbing itself, continue to have a robust constituency that is impassioned to step up and defend them, we need to ensure that we are welcoming new voices.”

Echoing that sentiment, in an interview with REI, Mikhail Martin, co-founder of Brothers of Climbing in Brooklyn, New York, said, “With more diversity, more people would feel like they belong and become protectors of the sport and its associated outdoor spaces.”

Every climbing organization can contribute to a more inclusive rock climbing culture

Climbing gyms can do their own part to expand their customer base and contribute to nationwide change. The Access Fund lists four steps for LCOs (Local Climbing Organizations): Organizations can learn from those they’d like to better include; actively invite individuals and groups to gyms, activities and expeditions; examine whether communication materials are targeting a broad audience; and seek to make events accessible in cost, time and distance.

Any organization that endeavors to improve accessibility and inclusivity is also adding to the comfort of the atmosphere. The biggest thing you get from a community that represents you is comfort," Martin explained in his interview with REI. “As a member of the community you can be yourself and relax because you don’t have to explain certain things — the others already understand.

“There is a higher level of familiarity and more situations where you can relate. Being around people with a similar point of view can offer validation, and that can lead to confidence allowing you to be able to do things that you might not have thought you could. Love, support and energy can go a long way.”

Image credit: Tommy Lisbin/Unsplash

Rising temperatures and shifting rainfall have turned “wildfire season” into a season without end and “100-year floods” into annual events. Meanwhile, the global wildlife trade and human encroachment into natural habitats are exposing humans to a growing number of animal pathogens like Ebola, SARS and COVID-19. Our ailing planet’s list of symptoms is long, and it just got longer: According to the 2020 Living Planet Report recently released by World Wildlife Fund (WWF), wildlife populations monitored by the organization have declined on average by 68 percent since 1970, a grim trend driven largely by human activities. 

This staggering loss of wildlife is the ultimate canary in the coal mine. As the report shows, the same human activities driving so many species to the brink are also raising the risk of climate-related disasters, resource scarcity and infectious diseases like COVID-19. The report also makes it clear that one of our greatest assets in addressing all of these challenges is nature itself — and that businesses are uniquely positioned to help reverse these disturbing trends. 

Every year, nature, including wildlife, provides roughly $125 trillion worth of benefits such as food, energy, water and air purification, carbon sequestration, flood protection, disease prevention, and more. The natural capital that underwrites all these goods and services — the air, water, soil and rich variety of organisms that ensure nature’s delicate balancing act — is the lifeblood of business, and a lifeline for the communities that businesses serve. When crops fail because of an extreme heatwave, or because the insect that pollinates them has gone extinct, food production suffers. When droughts lead to increased forest fires, wood and paper production is impacted. And when a virulent disease jumps from animals to humans, because people are buying and selling exotic wildlife in unregulated markets, or because people are pushing further into remote wilderness to create space for farms and grazing land, we risk sparking another deadly pandemic. 

At the heart of all these challenges is humanity’s broken relationship with nature. But what if we chose to work with nature, rather than against it? That’s the idea behind what’s known as “nature-based solutions.” Smart investments in nature — from the protection and restoration of forests, wetlands, and other key ecosystems to green infrastructure like green urban areas and roofs — can help stabilize the climate, support communities adapting to climatic changes that have already occurred, ensure resources for future generations and prevent the next pandemic. 

Recent progress on corporate climate action offers a useful guide. Markets are increasingly factoring in the material risks that climate change poses to corporate profits, as well as the material benefits to be reaped by decoupling production from carbon emissions. Hundreds of companies have responded by adopting science-based targets that align their emissions reduction goals with what the best available science indicates is needed to meet the global climate goals established by the Paris Agreement. Many companies also recognize that, to fully address emissions and meet their Sustainable Development Goals, they need to solve for nature. Indeed, by protecting, restoring and improving the management of our forests and other lands, and slashing waste in both production and consumption, we can deliver up to 30 percent of the emission cuts required to achieve our global climate goals.  

But companies can and should go further, because the material risks of losing nature — and the material benefits of conserving it — go beyond the issue of climate change. A wide range of other challenges, including disaster risk, food security, water security, socio-economic development and human health, are tied to the health of the natural world. And yet, as of today, nature-based solutions only account for a small portion of climate finance. What’s standing in the way? A company can easily calculate the financial benefit of cutting down a rainforest to make way for a palm oil plantation or mining concession. Calculating the financial benefit of keeping that rainforest intact is more complicated, but it's not impossible. 

Climate change was once similarly misunderstood. But today investors like BlackRock understand the material risks posed to business and are demanding greater transparency through the Task Force on Climate-related Financial Disclosures (TCFD), which provides a recommended framework for companies to disclose climate-related risks to investors, lenders and insurers. Likewise, we need investors to see the material risks posed by the degradation of nature and demand greater transparency, and we need companies to address these risks.  

The greatest loss of wealth — not just in human history, but in the history of our planet — is happening right before our eyes. Perhaps the most venerable adage in business is “never touch the principal,” and yet, when it comes to the vast natural bounty that Mother Earth has so generously provided, that is exactly what we’re doing. It doesn’t have to be this way. To put a twist on another well-known adage, “Green is good.” Savvy CEOs who recognized this simple but essential truth, and are prepared to act on it, will be the market leaders of tomorrow. 

Image credit: WWF

Green hydrogen has begun to score more attention as a large-scale, long-duration storage medium for wind and solar energy, leading to the much-anticipated “hydrogen economy” of the future. However, it is still in the early phases of commercial development. In the meantime, other types of energy storage are already on the market. A new report indicates that under favorable policies, energy storage could see rapid growth in the U.S. while helping to accelerate wind and solar development, too.

First, the good news about energy storage

As one example of strong interest in the interplay between energy storage and renewable energy, trade publications that used to focus exclusively on fossil energy have been pivoting toward the energy storage topic. Last month the news organization Oilprice.com, for example, covered a new white paper by the Energy Storage Association titled. The report indicates that improved policies would support 100 gigawatts in new storage for the U.S. as early as 2030.

That jump in storage capacity represents an important factor in the pace of decarbonization in the U.S. and globally. As one of its key points, the ESA paper argues that energy storage makes wind and solar more competitive, and therefore more attractive to investors. A more aggressive timeline for energy storage development would consequently give wind and solar development a push, too.

The figure of 100 gigawatts could actually turn out to be an underestimate, considering that the white paper does take green hydrogen into account. That’s fair enough, considering that the hydrogen society concept faces cost and technological barriers before it can become fully mainstreamed.

Instead, the white paper primarily factors in existing battery storage technology along with pumped hydropower, which currently accounts for the overwhelming majority of large-scale energy storage capacity in the US.

Some good news about green hydrogen

The 100-gigawatt goal represents a more ambitious outlook than an earlier projection, in which ESA anticipated only 35 gigawatts by 2025.

In terms of technology, though, 100 gigawatts may turn out to be a fairly conservative estimate.

That’s because new, scaled up energy storage technology is beginning to emerge, and it could take hold within the next several years.

Green hydrogen offers a good example. Though most analysts don’t foresee full commercial development in the near term, the field may be accelerating more quickly than anticipated.

Mitsubishi is already working in that direction, with new turbines that can transition power plants from natural gas to hydrogen. The company recently announced plans for a trio of such projects at power plants in Ohio, Virginia, and New York. An earlier Mitsubishi project in Utah is already under way, enabling a coal power plant to switch into natural gas and ultimately into green hydrogen.

Another example of large-scale energy storage system is the flow battery, in which two specialized liquids are held in tanks. They can remain at rest indefinitely and will generate electricity when made to flow adjacent to each other, separated only by a thin membrane.

The U.S. Department of Energy is also supporting new technology for large-scale, long-duration energy storage through its innovative DAYS program. Some of these projects may bear fruit within the ten-year time frame mapped out by ESA.

And now for the bad news…

The ESA white paper makes a good case that energy storage can enable the U.S. to decarbonize more rapidly than expected, to achieve 50 percent renewable energy on the grid by 2030.

However, there is a rather large catch. Supportive policy is required in order to reach beyond the initial goal of 35 gigawatts.

“While well on our way, the policy work initiated in 2017 is not yet complete,” ESA explains.

The white paper focuses on several policy targets related to the treatment of energy storage assets in relation to the grid, such as breaking down the “silos” that separate electricity generation, transmission and distribution assets.

Much of this action can be undertaken through existing regulatory and policy structures.

The obstacles proliferate, though, when legislative action is required.

“Chief among these [actions] at the federal level would be the enactment by the U.S. Congress of an investment tax credit (ITC) for stand-alone storage facilities. This would create an investment signal and facilitate a rush of capital into storage development that would match the demand for storage arising from the clean energy transformation and electrification over the coming decade,” ESA argues.

That’s going to be next to impossible under the current political lineup in Congress and the White House.

The Democratic-controlled U.S. House of Representatives is on track to foster in a "green recovery" from the COVID-19 crisis, but the Republican-controlled Senate is not. Even if legislation squeaks through the Senate, the current president is all but certain to veto legislation that supports renewable energy.

For the time being, energy storage, green hydrogen and clean power advocates will have to continue to rely on a patchwork of state legislation favorable to their interests, and the goal of 100 gigawatts will have to wait.

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The Gardening Giveback Project, a collaboration between Aberfeldy and the Bee Informed Partnership (BIP), combines a growing movement of bartenders and mixologists pushing for sustainability in the ingredients and spirits they use and the rising popularity of community gardening in an effort to bring awareness to the precipitous decline of bee populations worldwide.

Launched to commemorate National Honey Month, the core of the project encourages and empowers beekeepers and bartenders to plant and maintain new urban gardens full of flowers, vegetables, and herbs that also act as bee sanctuaries. Local bartenders get to add fresh, locally-sourced, community-grown ingredients like mint and basil to their cocktails. Simultaneously, local beekeepers get a maintained sanctuary to continue research on honeybee health.

The buzz around bees has been alarming since the first reports of colony collapse disorder (CCD) entered the broader conversation. Approximately 1 in 3 managed honeybee colonies have been lost each year over the past decade, due in part to increased insecticide use, continued habitat loss, and a growing Varroa mite infestation.

This decline is troubling as pollinators are responsible for 1 out of every 3 bites of food we take. Many staple fruit and vegetable harvests (apples, avocados, onions, coffee, tomatoes, grapes and green beans, to name a few) are dependent on a combination of wild pollinators and domesticated honeybee colonies to flourish. The impact of further population loss could be both economically devastating and precipitate a humanitarian crisis, as more than $24 billion of the U.S. economy and 35 percent of global food production relies on pollinators such as bees.

"As the single most important pollinator to agriculture, honeybees are a vital component in ensuring we have access to high quality, nutritious fruits, vegetables, and nuts," said Geoff Williams, president of the BIP. "We definitely appreciate Aberfeldy supporting our mission and are really excited to help bring the Gardening Giveback Project to life."

This is not Aberfeldy’s first attempt to raise awareness for the ongoing honeybee crisis. "We created the Barrels and Bees program to help support local beekeepers and protect these tiny creatures who do so much for our environment, especially given recent data showing some of the highest mortality rates on record,” said Aleco Azqueta, a brand director at Bacardi (Aberfeldy one of many brands within Bacardi’s portfolio).  “We're proud to be able to introduce the Gardening Giveback Project this year, as it provides Aberfeldy with another opportunity to drive awareness for this cause we are so passionate about."

In addition to the Barrels and Bees program and the Garden Giveback Project, Aberfeldy says it has also donated $10,000 to BIP. The funds will allow BIP to continue its work supporting local beekeepers in research and education efforts.

"So much of Aberfeldy story is rooted in its honeyed richness, making honey itself a perfect ingredient for many of our cocktails," Azqueta continued. Indeed, Aberfeldy’s Scotch whiskies are known around the world for rich honey notes, due to their longer fermentation process.

Bacardi’s previous efforts on the sustainability front include raising awareness about the risks of plastic pollution and efforts including the phasing out of plastic straws.

Look for the official Garden Giveback Project cocktail, the Aberfeldy “Herbed Honey Smash,” from an appropriate social distance at bars in Austin, Boston, Chicago, Dallas, Miami, Los Angeles, New York, and San Francisco. If you are not in one of the participating cities, you can still contribute by ordering a box set of Herbed Honey Smash ingredients from ReserveBar.com.

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As the global transportation sector decarbonizes, oil and gas stakeholders have been pinning their hopes for survival on the growth in demand for plastics and other petrochemicals. That may have seemed like a safe bet just a few years ago. However, a recent report from the organization Carbon Tracker has thrown cold water on the strategy.

Door shutting on growth for petrochemicals

Plastic bottles and other single-use disposable items have saturated markets in the U.S. and other wealthy economies for years, with little prospect for future growth spurts of any consequence. In contrast, patterns of plastic use in Asia, Africa and other regions have yet to reach the same level of saturation, indicating the potential for significant future growth.

At least, that was the thinking in past years. For example, a 2003 study indicated long-term, rapid growth in demand for plastics in China. Those expectations have since dimmed. A sharp change in the nation’s plastic garbage importation policy in 2018 seemed to offer some hope for the plastic industry, but in 2019 the Financial Times reported on a slowdown in demand.

China appears determined to accelerate the downward trend. Earlier this year, the country announced a phased-in ban on single-use, nondegradable bags along with disposable plastic tableware among other products.

How a 'green recovery' could draw the curtain on single-use plastics

The petrochemical industry’s plans for growth may seem a little more solid in India. Last fall Prime Minister Narendra Modi proposed a ban on plastic bags, straws and other disposable items, but he quickly dropped the idea as the nation was experiencing an economic downturn at the time. The reason given was that a ban would cost thousands of jobs, including jobs for workers who depend on recovering throwaways for a living.

On the other hand, the COVID-19 crisis has caused far more economic turmoil and job loss in India this year, leading to the possibility that a green recovery could create new work that does not rely on disposable plastics.

Lending support to the idea of a plastic-free recovery, the World Economic Forum recently reaffirmed its support for a global shift away from plastic, though noting an uptick in demand for certain disposable items associated with the COVID-19 crisis.

Industry pressure meets international action

Another key safety valve for petrochemical stakeholders is Africa. Last month, the New York Times revealed that an industry group has been applying pressure to expand the market for U.S.-made plastics in Africa, while also leaning on policy makers to continue importing plastic garbage. A main focus of the pressure campaign is Kenya, which recently took strong measures to deal with its own plastic problem.

Despite the weight of the pressure campaign, environmental advocates in Kenya and other African nations may have a new weapon on their side. Last year, policy makers finally added plastic to the Basel Convention, a 1989 international agreement that restricts the ability of wealthy nations to ship hazardous waste to developing countries.

The U.S. signed the Basel Convention in 1990 but never ratified it. However, Kenya has been on board since 2000, and ratified the new amendment last spring.

A wet blanket on the petrochemicals fire

Against this backdrop, last week Carbon Tracker ran down all the other reasons why the petrochemicals industry is in serious trouble.

Carbon Tracker collaborated with the London based firm SYSTEMIQ on the new report, titled, “The Future’s Not in Plastics.”

Part of the problem is a relatively straightforward supply glut. In recent years ExxonMobil and other stakeholders have been doubling down on their investments in petrochemicals. In the U.S., that includes a major expansion of ExxonMobil’s Baytown petrochemicals facility in Texas.

Adding to the glut is a new petrochemical hub that is proposed for the Ohio River Valley region in Appalachia. The hub has been supported by the U.S. Department of Energy, which just last year glowingly noted that the “United States is on the cusp of an Appalachian petrochemical renaissance that scarcely could have been imagined a decade ago.”

The hub was supposed to support up to five new petrochemical plants. Shell is moving forward with its plans, but one project was canceled last year and another developer bailed out this year on the heels of the COVID-19 outbreak. That lends strength to the argument of opponents, who have raised concerns over the risk of stranded assets, misplaced public investment in new infrastructure, and lost opportunities for green development.

BP appears to have seen the writing on the wall and is ratcheting down its petrochemicals operation. However, that leaves ExxonMobil and other stakeholders holding the bag, which Carbon Tracker estimates at $400 billion in stranded assets.

A bottom-line solution for the plastic problem

Aside from a simple case of industry shakeout, the report from Carbon Tracker and SYSTEMIQ details other elements that all but guarantee slower-than-expected growth in the near term, and a painful period of shrinkage after 2027.

Of key interest is the report’s bottom-line analysis, which takes external costs and the potential for new carbon-related regulations into account.

“SYSTEMIQ notes that technology solutions are already available to enable a massive reduction in plastic usage at lower cost than business as usual,” Carbon Tracker explains. “Solutions include reuse, with better design and regulation of product, substitutions such as paper, and a large increase in recycling.”

In response to considerable public pressure and consumer interest, the circular economy trend is already emerging among mainstream brands that are shifting into reusable or refillable packaging. Loop and Japan’s Kao are two leading examples.

Meanwhile, interest in more sustainable substitutes for petrochemicals is growing among leading manufacturers such as Lego, which has been experimenting with plant-based alternatives to its iconic bricks along with the company’s renewed emphasis on recycling and reuse.

In addition, new cutting-edge recycling technology is creating new opportunities to reclaim mattress foam and other plastic waste that was previously unrecoverable, further undercutting the need for virgin plastics.

Oil and gas stakeholders are fighting for their lives and will not give up easily. However, as the impacts of plastic pollution come into sharper focus and public awareness deepens, business leaders have an opportunity to advocate to bring their own firepower to the table, and advocate for policies that support effective solutions.

Image credit: PxHere