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The autonomous electric vehicle economy is poised to deliver lower costs that will reshape our lives.

The first article in this two-part story outlined the price leadership that autonomous electric vehicles will win through a mobility as service (MaaS) business model -- which substitutes traditional car ownership with services like ridesharing. In less than 15 years, the average household is projected to save $5,600 annually from using MaaS.

As a least-cost solution, autonomous electric vehicles are projected to win 30 to 40 percent market share from traditional fossil-fueled vehicle ownership by 2030.

This second article outlines the public policy issues created by such a tidal wave of change.

Mobility future shock

Mobility future shock is posed to slam into all of us. Millions of new jobs will be created in the years to come. And millions will be lost.

The business of doing business will be radically disrupted. Fortunes will be made by MaaS companies and entrepreneurs. Existing businesses that have been the core of America’s past success will be reduced or shuttered.

Mobility future shock will also slam into our politics. Local, state and federal policies for autonomous electric vehicles -- and around the disruptively lower prices generated by solar and wind power plants -- will determine our country’s economic future.

Public policy future shock

Uber offers a small example of the mobility future shock about to hit our economy and policymakers. No one knew Uber in 2007 when Steve Jobs introduced the iPhone. Ten years later, Uber is the world’s largest taxi company, but it owns no vehicles. Public policy is still trying to catch up with this radical new mobility service.

In comparison to Uber, MaaS will hit public policy like a tidal wave. It will at first challenge, then wipe out, a hundred years of public policy laws, rules and precedents. Some examples include:

Trucking: Trucking is an industry defined by intense price competition, high on-time performance expectations, historical driver shortages and substantial regulation. Autonomous driving will challenge all of the trucking sector’s existing parameters. MaaS will generate a political firestorm that may include teamsters fighting for their jobs and legacy trucking companies fighting for competitive positioning.

Auto dealers: Transportation has been defined by car loans and auto dealers for 100 years. MaaS is poised to wipe out this business model. Auto dealers have tremendous local and state political power. In many states like Michigan and New Jersey, they used their power to block direct-to-consumer Tesla sales. How much more will they fight the MaaS business model politically?

Taxes: Sales taxes on gasoline and diesel pay for our roads. Counties thirst for auto dealerships and the sales tax revenues they generate. What will replace lost tax revenues from gasoline and car sales in an MaaS economy?

Zoning: What will Americans do with their car garages and driveways when MaaS becomes a reality? What zoning issues will arise from creative homeowners with 600 square feet of now-vacant space plus a ribbon of concrete in their front yards that is no longer needed?

Electric utility regulation: MaaS will enable zero net energy (ZNE) building economics. ZNE buildings are homes, offices, and factories with smart technologies that enable price arbitrage between utility service and self-generation through an onsite solar system and buying/selling with other ZNE buildings. MaaS-generated consumer demand for cheaper renewable energy may be the final straw that forces states to end electric utility monopoly control over retail electricity sales by adopting ZNE public policy.

Urban city design: Having a sufficient quantity of accessible and affordable public parking is the bane of urban city planning. There is never enough. MaaS removes this parking barrier between consumers and downtown commerce. It also creates new city design challenges for integrating autonomously-driven drones, robots and vehicles with humans.

Shopping malls: What happens to shopping malls, already under competitive pressures from Internet retail and free delivery, when their huge free parking lots are no longer a competitive advantage?

Public transit: Public transit is a vital service for daily commuters and those less advantaged. Will MaaS displace today’s public transit with universal service delivering both lower prices and improved customer satisfaction? Or will public transit aggressively adopt MaaS technologies to build their own curb-to-curb, least-cost solutions?

MaaS public policy challenge

By 2030, most of us will look at MaaS like we look at our smartphones today. We will wonder how we lived and worked without it.

To realize this promise, we need public policy that paves the way. That is the burning platform confronting policymakers. The turbulent political waters created by lost jobs and shuttered businesses present obvious challenges.

Those issues place MaaS public policy on a dual path.

One path is to open the door for technology adoption that will propel our economy to more than 3 percent economic growth. The other path is to provide human services to those who lose their jobs to MaaS. MaaS will create a massive need for job retraining and job transition financial assistance.

Consumers want goods and services that cost less and mean more. This underlying driver is creating a global, multitrillion-dollar Green Economic Revolution. MaaS will deliver these results. But the future shock will be disruptive and transformative. From Congress and state houses, to utility commissions and city councils, the time to act is now.

Image credit: Flickr/SPUR

The global airline industry often pledges to reduce its carbon footprint, but the stubborn truth is that the sector faces a long journey to true sustainability. Attempts to develop alternative fuels from biomass such as algae and halophytes proved fitful at best. The rise of discount air carriers and the concurrent increase in miles flown worldwide also made the air travel sector more polluting over the years.

But some industry analysts argue that discount carriers are actually a less carbon-intensive option. And a European discount carrier claims its carbon emissions reduction has been so successful that it has recalibrated its long-term sustainability goals.

Based out of London’s Luton Airport, EasyJet now serves over 130 destinations in 30 countries. While the company’s growth has led to overall increases in carbon emissions in recent years, EasyJet claims that its younger fleet, along with more passengers flown per flight, actually results in fewer emissions per passenger kilometer flown. According to the latest numbers, that metric stood at 81.05 grams per passenger-kilometer two years ago, down approximately one gram from 2014 levels. And its 2017 numbers have reportedly fallen under 80 grams per passenger-kilometer, with the company’s 2022 target within reach.

The result is an overall 30 percent cut in emissions since 2000, when EasyJet's emissions per kilometer traveled totaled over 116 grams.

The airline says a bevy of operational changes contribute to a fleet that is less polluting compared to its competitors. Lighter seats reduce each airplane’s weight by over 1,300 pounds. “Sharklet” wing tips, which became standard on the company’s jets in 2013, have reduced overall fuel consumption by 4 percent. Instead of switching on a plane’s auxiliary power units while grounded, EasyJet says its fleet uses local electricity in those circumstances. Other fuel-savings measures include the use of only one engine while a plane is taxiing on an airport runway.

These changes are laudable. They prove little steps can add up to a big difference – and, at a minimum, show EasyJet’s stakeholders that the company understands the gravity of climate change risks and is acting accordingly.

Unfortunately, the global airline industry has yet to keep pace with a unified approach on climate action. A deal made last year between one international aviation trade group and international organizations was met by a collective shrug, as it mostly relied on tree planting to balance out the sector’s carbon emissions. And many air carriers refuse the discuss the problem at all.

For example, one of EasyJet’s largest competitors, Ryanair, is led by executives who dismiss any impact the industry has had on climate change. Last month, Ryanair CEO Michael O’Leary dismissed the climate science community as a “mob” and said any such threat was not real.

In response, Andrew Murphy wrote on the European policy blog Euractive that O’Leary’s stance was obvious, as Ryanair is the largest aviation emitter in Europe. “Thanks in part to a business model reliant on taxpayer handouts, [Ryanair] will face the biggest challenge if governments take serious action against aviation’s growing emissions," Murphy wrote.

In contrast, EasyJet can assume the mantle of a climate action leader in Europe as it shows that while change may not occur fast, one company can still make a big difference on the carbon emissions front.

Image credit: Aero Icarus/Flickr

Still have a headache from that Cinco de Mayo celebration? The hangover the Earth is suffering from tequila and mezcal production has lasted far longer.

“Leaves a bitter taste on water and soil,” Paula Alvarado mused of the industry's effects on the blog Treehugger several years ago. Deforestation, excessive wastewater runoff and the increased use of chemicals to sustain the agave crucial for these spirits’ production are among the problems saddling the sector across Mexico. And some reports predict a shortage of agave in the coming decade, largely due to unsustainable farming practices as the popularity of mezcal and tequila continue to surge.

Sombra Mezcal, an artisan distillery located in Oaxaca, Mexico, says its business practices can offer lessons for this industry – from the initial cultivation of the agave to the moment at which it is bottled.

Similar to wine production, appellations help define the various types of mezcals produced across Mexico. In the case of Sombra, the key ingredient is agave espadin, which thrives near Sombra’s distillery at elevations reaching 8,000 feet above sea level.

The process of growing this agave varietal is long and labor-intensive. First, the plants are cultivated on small plots in the villages of San Juan and and San Luis del Rio. After two years, the agave is uprooted, the plants’ roots are cut off and they are left in shade for about two weeks. Next, they are transplanted to the hillsides above these villages, and are finally harvested after another four years.

After they are cultivated, the hearts of the agave plants are placed into a covered rock-lined pit oven, where they are slowly baked over an oak hearth for two days. Next, the hearts are crushed by a millstone before being placed in vats and left to ferment for eight days. The final process occurs in copper stills, in which the mezcal is heated, vaporized and condensed before it is finally bottled.

According to Davos Brands, the company that distributes the product, the entire process involved with making Sombra Mezcal is sustainable.

Much of the water required for the distillery’s operation is collected from rainfall and stored in underground tanks. Firewood used for cooking the agave is only sourced from certified forests. The bottles are upcycled. And nothing goes to waste: What cannot be composted is baked into adobe bricks. As for energy, Davos says a solar power installation atop the distillery’s roof will soon provide electricity.

The operation has a fair trade component as well: Funds from Sombra provide for local schools as well as the arts. Meanwhile, the company boosted its social enterprise chops with its recent participation in the 1 Percent for the Planet program.

Other makers of Mexican spirits say they are cleaning up their supply chains as well.

The popular brand Patrón, for example, says it is doing more to prevent wastewater effluent from entering local streams and gives compost derived from its byproducts to local farmers. One distiller in California is trying to produce the first tequila north of the border in a quest to create a more responsible product – and, if it succeeds, it could also provide sustainable materials such as sugars and fibers for industry as well.

But Sombra Mezcal has a holistic approach that benefits not only the environment, but also local communities – providing a textbook case for sustainable development as well as environmental stewardship.

Image credit: Sombra Mezcal

Denmark’s largest wind turbine manufacturer, Vestas, says it's ready to compete without subsidies: a sign that the wind industry is maturing – at least in countries that genuinely support it.

It’s no coincidence that Vestas is in Denmark. The country is a leader in clean energy and once generated 140 percent of its electricity from wind. In fact, it's tactics have proven so successful that Denmark's government announced a timeline to remove wind subsidies by 2030.

The country's success is partly due to government-led investment and friendly regulations. But geography also plays a role, as the country's long, windy coastline makes for excellent wind resources. The wind industry there is strong, and thriving, due to the unwavering support it has received from the nation's government. Its flagship clean-energy firm Vestas is a world leader in wind and also has a large North American presence.

The long phase-out of subsidies will allow the industry to gradually adjust – creating market certainty. That is something that is, sadly, lacking in most other parts of the world, where subsidies are short-term and often renewed yearly -- as in the United States, where uncertainty about the future of the renewable tax credits led to a slowdown in clean energy development last year.

Thankfully, the U.S. credit was renewed – though its future remains uncertain, especially with the new pro-coal administration. The U.S. could be heading toward a scenario such as the one that happened in the United Kingdom, where the sudden removal of the offshore wind tax credit by the Conservative Parliament has stunted the industry and pushed the country further away from its stated Paris Agreement goals.

“While the government rolls out the red carpet for fracking, they’re pulling the rug from under onshore wind,”Alasdair Cameron, a renewable energy campaigner with Friends of the Earth, said in a press statement. “Proposed changes to the planning system could make it more difficult for local authorities to give the go-ahead to new wind installations.”

Right now, wind is in good shape in the U.S., particularly in states like Texas where it is already cheaper than power from dirty fossil fuels. Maintaining subsidies until 2020 will help that, but if we truly want wind power to take off, as it has in Denmark, there's one more thing we could do.

Here’s the thing – if wind can compete without subsidies, despite being just a few-decades old technology, what about fossil fuels? The ugly, dirty and, frankly, unethical secret is that fossil fuel development, production, and distribution is heavily subsidized around the world – estimated by the International Monetary Fund at an astounding $5.3 trillion in 2015. For comparison's sake, wind received just $5.9 billion in the same year.

In fact, cutting these subsidies could reduce global greenhouse gas emissions by 6 to 13 percent a year by 2050 alone – a figure which demonstrates the inefficiencies in the current system.

It is great news that wind will soon compete without subsidies in Denmark. But let’s even the playing field and remove all fossil fuel subsidies around the world as well – both to reduce greenhouse gas emissions and ensure that the environmental and social costs of dirty energy are fully accounted for. Then wind can truly thrive, everywhere.

Photo Credit: CGP Grey via Wikimedia Commons

For more than a decade, reproductive justice foundation Groundswell has supported communities of color by funding grassroots organizers looking to create political shifts in health care for marginalized groups. And earlier this month, the organization added a new "Liberation Fund" to its arsenal.

The fund will support the leadership efforts of women of color and trans women working across issues such as environmental, racial and economic justice, immigrant issues, and transgender rights.

The fund will launch with an initial $500,000. Its first set of grantees will be curated by 15 advisors, who are prominent women of color leading in these same sectors. The fund is now accepting donations.

Notable names of advisors to the fund include Bamby Salcedo of the TransLatin Coalition, Dr. Charlene Sinclair of the Center for Community Change, Sarita Gupta of Jobs with Justice, and Linda Sarsour of MPower Change.

“The Liberation Fund will make it easier for donors and funders to identify and resource some of the most effective and innovative organizing at the grassroots led by women of color and transgender people of color,” Alicia Garza, co-founder of Black Lives Matter, said in a statement announcing the fund. 

“To elevate women of color and trans people of color at a time when our communities are under extreme duress is not only smart but essential for our survival. There's never been a better time for donors and funders to put their money directly where change is happening.”

This new funding comes at a sensitive time in human rights movements as advanced data and reporting aid to document the injustices against women of color and trans women — including political disparity and the need for intersectionality on issues facing these women.

More than 20 transgender people were killed in America last year. As the new presidential administration threatens funding to resources like Planned Parenthood and Medicaid, access to reproductive services for all women is at risk.

"At a time when trans women of color experience and face disproportionate amounts of violence at the hands of the state and society, it is so critical for movements and resources to amplify the voices of TWOC leaders and community-based organizations that are empowering our most vulnerable,” said Isa Noyola, director of programs at the Transgender Law Center.

“This fund is a show of support and signal to the movement that we must do better to protect, defend, and uplift TWOC-led work!”

Image courtesy of Groundswell

By Melanie Wright

It’s a tough decision. You are an entrepreneur or a seasoned business leader. You are running a successful business or a startup with great potential, and you are passionate about having your business serve a purpose beyond profit. But now you are at the point where you need investors to fuel growth. Or maybe you’ve been presented with a buyout offer for your purpose-driven company. What do you do?

John Mackey, co-founder and CEO of Whole Foods Market, warns: “Evaluate your investors very carefully. If you don’t choose the right investors and or partners, there will be a steep price to pay. Your dream and your company can be shattered.”

Mackey's advice is clear: Find investors who align with your values and your company’s culture or risk watching your dream being taken away from you.

Encouraging more consciousness in corporate finance

This was just some of the pointed advice shared at the annual Conscious Capitalism spring conference (CC2017) held in Philadelphia from April 18 to 20, where more than 350 attendees from the U.S. and abroad came to learn valuable lessons on how to deepen their practical application of the principles of conscious capitalism.

Through more than a dozen keynotes, intimate talks and practicums, participants learned that it’s not enough to just be a passionate supporter of elevating humanity through business. The conference emphasized the need to value and appreciate environmental and societal stakeholders, as well as customers, employees, vendors, shareholders and investors.

Kicking off the second day of CC2017, Tom Gardner, co-founder and CEO of the Motley Fool, moderated a panel discussion covering some of the financial implications of conscious capitalism. Mackey and Kip Tindell, ‎co-founder and chairman of the Container Store, offered their thoughts. During the session, the business leaders provided insights on what it takes to develop conscious capitalism at a new or existing business and spotlighted some of the challenges of this evolving territory.

Tindell acknowledged that all companies face tough times, citing his own working for two years without pay to help develop the concept for the Container Store. Eventually, he noted, the decision to secure investors becomes not an option but a necessity for a company’s growth and or survival. But he, too, warned about the ease of being lured by an influx of cash.

“Every company has setbacks and even well established companies often see their stock price drop as much as 50 percent several times over a 10-year period,” Tindell said. The underlying message? Investors alone can’t make or save a company.

Throughout the conference, many of the conference attendees expressed concern regarding the difficulty in securing investors of any type. Furthermore, if successful, the trade-off often means losing some control and the ability to stick to your purpose. They questioned whether it was more important to secure capital or retain full control of your company.

Financing lessons from leading conscious capitalists

Here are three Conscious Capitalism conference takeaways regarding the importance of finding the right investors for your business:

1. Capital can come with strings attached: “VCs are like hitchhikers on the highway with a credit card. As long as you are getting them where they want to go, they will help pay for the gas,” Mackey said. “But if you aren’t’ going where they want to go, they can hijack your car, throw you out and hire a new driver.”

One way to choose the correct investor is to have a strategy. Apply the same review processes that you use to select your board of directors and advisory board members. Find people who you can trust, with similar values and who understand and align with your purpose driven company. Try to retain as much control as possible and look for alternative ways to raise needed capital.

2. Seek long-term capital partners: “The ideal investor source is like having a rich uncle or relative,” Tindell explained. “They will help to develop you as an entrepreneur and provide advice in addition to capital, and they aren’t looking for a fast return on their investment.”

Make sure that you review and understand all investor contracts before signing. Pay particular attention to standardized clauses with liquidity demands, and capital funds with fixed time horizons with outcome five to eight years out. Make sure the investor is not looking for a quick return and will provide long-term capital, preferably for 10 years or longer. And provide investors with a good exit strategy. Investors have different attitudes and objectives about outcomes.

3. Stick to your purpose: When asked to give examples of making a hard decision to stick to their purpose, Mackey referred to the current news headlines about activist shareholders pressing the Whole Foods Board for a potential sale of the company or a merger or an alliance with another company.

While Mackey was not able to elaborate due to the confidential nature of the shareholder activity, the panel pointed to another speaker at this year’s conference, Dansko Footwear founder and CEO Mandy Cabot, who turned down a $100 million offer from Timberland and sold the company to her employees instead. Though Cabot initially accepted the Timberland offer, she and her board pulled out of the deal after fully considering how it would impact one of her company's most critical stakeholders, opting instead to create an employee stock ownership program (ESOP), in which the very people who helped Dansko become successful could share in that success.

Cabot held on to her conscious capitalism dream, and so can you.

Image Credit: Conscious Capitalism, Inc.

Melanie Wright is the Director of the PR Institute of Philadelphia, a communications professional development program, currently working with The Sustainable Business Network of Greater Philadelphia (SBN,) a nonprofit network of local triple-bottom-line businesses and social entrepreneurs. She also directs strategic communications at Ainsworth Communications. Where she provides brand strategy and stewardship, Corporate Social Responsibility (CSR) and crisis and issues management services to corporations, non-profits and individuals.

When it comes to environmental issues, it seems not even the Donald Trump administration can ignore a looming water crisis. On Friday, Interior Secretary Ryan Zinke announced a $26.3 million round of funding aimed at boosting water supplies in seven western states.

The interesting thing about this particular funding program is that it is essentially a water conservation effort. It will be run by an Interior Department bureau that affirms the impact of climate change on water resources. Rather than seeking to corral new sources of fresh water, the funding program focuses on reclaiming and reusing existing water resources including wastewater as well as "naturally impaired" surface sources.

Federal help for water conservation

The $23.6 million comes through the Interior Department's Bureau of Reclamation. A federal law called Title XVI gives Reclamation the authority to identify opportunities to reclaim wastewater and "naturally impaired" groundwater throughout the western U.S., an area that includes 17 states and Hawaii.

The law took effect in 1992, and since then the feds have chipped in a total of $639 million for its share in $2.4 billion worth of water recycling programs, according to Reclamation's own estimates.

Yes, climate change is real

President Trump is holding the nation -- and the world -- in suspense over the Paris climate change accord, so in that context it's worth noting that his own Interior Department is still on record linking water scarcity issues and climate change through the Bureau of Reclamation.

Reclamation manages the WaterSMART (Sustain and Manage America's Resources for Tomorrow) plan, which was developed under the Obama Administration to manage the 2009 SECURE Water Act. The plan kicked off in 2010 and identifies the main water resource issue:

"It is increasingly recognized that water is the primary means through which climate change impacts the earth and people’s livelihoods and well being. Water shortage and water-use conflicts have become more commonplace in many areas of the United States."

The WaterSMART home page also introduces the plan with a ringing endorsement of the accepted science on climate change:

"Significant climate change-related impacts on water supplies are well documented in the scientific literature and scientists are forecasting changes in hydrologic cycles."

Doing more with less

Coca-Cola, Levi-Strauss, MillerCoors and General Mills are among the many global companies pushing the envelop on water conservation in order to sustain their business model.

The new round of Title XVI funding provides a window into how communities are also leveraging water conservation to sustain economic growth.

Here's Secretary Zinke making a pitch for the new round of conservation funding:

"This funding provides essential tools for stretching limited water supplies by helping communities reclaim and reuse wastewater and impaired ground or surface waters ...These tools are just part of the toolkit for bridging the gap between water supply and demand and thus making water supplies more drought-resistant."

The funding covers planning and feasibility studies as well as shovels-in-the-ground projects.

The lion's share of the pot will go to California, with funding for infrastructures that benefit the cities of Pasadena and San Diego, the Hi-Desert Water District, and the Santa Clara Valley Water District. Also in this group is a desalination project for the Lower Chino Dairy Area of the Inland Empire Utilities Authority.

Planning ahead for water conservation

The combined total for the six projects is almost $21 million. The remaining funds will be distributed among 13 feasibility studies in Oklahoma, Kansas, Washington, Nevada, Utah, Texas and California.

Many of the feasibility studies are aimed at municipal wastewater reclamation. Some are targeting brackish groundwater, including a study of energy-efficient treatment alternatives for groundwater desalination in Texas.

Of particular interest is a $150,000 grant to the Oklahoma Water Resources Board for a study titled, Feasibility Study of Potential Impacts of Select Alternative Produced Water Management and Reuse Scenarios.

'Produced water' refers to the brine resulting from conventional oil and gas drilling as well as fracking operations. The state of Oklahoma is looking for ways to reclaim produced water as part of its long-term water resource strategy, Water for 2060.

The Water for 2060 working group on produced water issued its final report last month. And it details some significant obstacles including the expense of water treatment and transportation, among others.

Despite the cost, Oklahoma has an urgent need to act on produced water aside from water scarcity.

The common practice of disposing produced water underground has been linked to swarms of earthquakes across a wide swath of the state that overlay a rock formation called Arbuckle.

In addition to the immediate threat to public health and well being, the earthquake swarms have caught the attention of the insurance industry. The consequent effect on insurance rates could have a ripple effect on property values and economic activity in Oklahoma.

Climate change whack-a-mole

The Interior Department is not the only federal agency that still affirms climate change on its website.

As of this writing, the Energy Department still has a vigorous climate change page up, and Energy Secretary Rick Perry has been regularly -- and loudly -- cheering on his agency's programs for renewable energy and energy efficiency.

Secretary of State Rex Tillerson is another member of the Trump cabinet endorsing climate change.

Though notoriously inaccessible to reporters, last week Tillerson signed the U.S. on to a multinational agreement called the Fairbanks Declaration, which affirms the reality of climate change and the need for urgent action.

The Declaration is posted on the State Department website, including (emphasis theirs):

"Noting the entry into force of the Paris Agreement on climate change and its implementation, and reiterating the need for global action to reduce both long-lived greenhouse gases and short-lived climate pollutants."

As for Zinke, somewhat ironically his own agency is one of the biggest renewable energy producers in the U.S. -- think Hoover Dam, and you're on the right track. The Bureau of Reclamation was established in 1902 and since then it has constructed more than 600 dams and reservoirs in 17 western states.

Reclamation bills itself as second largest generator of hydropower in the U.S., with a stable of 53 power plants producing more than 40 billion kilowatt-hours annually, the equivalent of power for about 3.5 million homes.

Although Zinke is pushing hard for fossil-friendly initiatives, the new round of Title XVI funding demonstrates just how difficult it is to push climate change out of the picture.

Image: courtesy of usbr.gov via Instagram.

As sustainability enters the mainstream, demand for sustainable paper pulp, fiber and wood is growing fast. And companies like Procter and Gamble (P&G), Home Depot, International Paper, and others have made strong public commitments to source sustainable forest products.

While many hoped that such a shift would pay dividends for the world’s forests, a surprising challenge is emerging. Deforestation is continuing, nearly unabated, and there aren’t enough sustainable forests to meet this new demand for ethical pulp.

The key to better use of forest resources is transparency. That is why the companies mentioned above have pledged to meet their pulp and fiber needs from sources that adhere to what many consider the gold standard for certifying sustainable wood products: the Forest Stewardship Council (FSC).

But merely being a member is not enough. To truly move toward sustainable forestry, companies must invest time to understand their supply chain and work within every level – otherwise, there will never be enough sustainable wood, fiber and pulp to go around.

“Companies have to play a leading role in both boosting demand and supply of FSC products,” Corey Brinkema, president of FSC’s United States office, told TriplePundit. “They go hand in hand.”

FSC was founded after the historic 1992 Earth Summit in Rio de Janeiro, Brazil, where the world recognized the challenge of climate change and the need to protect our forests. For more than two decades, this third-party certifier worked with companies, consumers and suppliers to ensure the growth of sustainably-managed forests around the world. FSC’s rigorous standards mean that getting certification is not easy, but that the label -- unlike other schemes -- means something.

The flip side of such high standards is that getting certified can be a challenge. That is where companies have to play a more active role if they really want to source more sustainable raw materials for their products.

“Direct relationships are vital,” Brinkema told us. “Through FSC certification, we’re reconnecting producers with their raw material supplies.”

That means knowing the land where trees are grown for paper pulp. Most consumer brands are often four or five steps away from this source. And, until recently, few had any relationship with those growing trees. But the rising demand for sustainable feedstocks is changing that.

FSC plays the role of an intermediary, connecting big companies directly with the small and sometimes family-run farms that are the source of their wood.

“Unless the land owners have a very clear and obvious signal that these forest practices are important to [companies], they just don’t see the need to improve practices or seek certification,” Brinkema explained. It makes sense: Unless farmers know buyers want a more sustainable product, they will remain unwilling to spend more money to change their practices. “It’s a challenge ... to convince suppliers that it's worth meeting those standards."

For P&G’s partner, Domtar, this meant meeting with the small- and medium-scale land owners who produced its wood, and working with FSC to bring other land owners into the fold.

“It’s important for P&G and Domtar to bring in a diversity of land owners,” Brinkema said. The paper company Domtar and P&G, which mostly uses paper to packages its consumer goods, have partnered for years on a steadier sustainable paper supply. “Every one of those [participating suppliers] allows [P&G and Domtar] to produce more FSC-certified products.”

Big companies like P&G and Domtar can help small-scale farmers to participate in a group certification scheme like FSC, while few of these farmers could afford such measures on their own. In just one year, Domtar was able to bring in 400,000 new acres of land under FSC certification. This means more sustainable wood for its yards, and brings partners such as P&G one step closer to their lofty sustainability goals.

“We’ve been really surprised at how important, and how impactful, bringing all these actors together is,” Brinkema told 3p.

Creating a truly sustainable forest supply chain requires actions from all sectors. Groups like FSC are doing their part to increase sustainability and improve consumer confidence. But more companies need to work across their supply chains to increase the capacity of suppliers to produce sustainable pulp, paper and wood.

The final piece is, of course, consumers. FSC is still not well known outside of those who care deeply about global forest issues or the environment. That does not mean consumers do not care about sustainability in the forestry sector, but that FSC and its partners must educate consumers on what certified, transparent supply chains really look like.

“It’s really important that . . . brands begin to associate themselves with that responsible supply chain they’ve developed,” Brinkema explained. “Labeling alone is not enough.”

That’s why FSC recently launched a new digital campaign called One Simple Action that shows consumers just how big of a difference buying certified products can make.

Consumers need to reward companies that make the decision to go sustainable. Look for the FSC logo the next time you go shopping, and do your part to increase demand for sustainable forest products. Only then can we transform this supply chain and end illegal, costly deforestation around the world.

Image credit: Soil-Science.info via Wikimedia Commons

The VF Corporation (VF) -- the owner of iconic brands like North Face, Timberland and Wrangler -- is out to change the way that trend-setting clothes are made. And if it's successful, the shift will likely be felt across the fashion industry.

This week, VF announced that it is partnering with the Humane Society of the United States (HSUS) and the Humane Society International (HSI) to develop a universal humane welfare policy for its brands. The policy not only bans the use of angora, fur and exotic leather, but, according to the corporation, takes steps to ensure humane treatment is a standard in all of its clothing brands.

North Face made headlines some years ago when it tightened its down supply chain and banned the use of feathers from geese raised and killed for foie gras. By restricting its supply of down to ethically-raised and -treated geese, it, and other clothing companies like Patagonia sent a strong message to its consumers: The way animal products are sourced matters just as much as the trends they set.

That's the message VF is now attempting to broadcast across all of its clothing lines, said Letitia Webster, VF Corporation's vice president of global corporate sustainability.

"As we continue to promote the development of viable commercial substitutes to animal materials, this policy will help to ensure that the materials we use today are procured from sources that prioritize animal welfare and responsible business practices,” Webster said in a press statement.

HSUS and HSI commended the efforts, which they said "sets a bar" that will encourage other organizations to follow suit.

"VF’s policy sends an important message to the industry that animal suffering has no place in fashion, said Kitty Block, HSI's vice president.

The policy will address how materials are sourced for all clothing and footwear. It bans the use of methods that cause animals suffering, such as the often under-publicized "mulesing" technique some wool producers use, in which the wool-bearing skin is peeled off of the animal without anesthetics.

VF has also been behind efforts to develop synthetic down fill called Thermo Fibre, Developed for its European subsidiary, Napapijri, Thermo Fibre is reportedly lighter than conventional goose down, but just as effective when used as insulation in cold-weather clothing. The new fill has helped VF companies overcome a major hurdle, which was finding enough dependable sources for ethically-sourced down and, at the same time, keeping the price tag within reason.

VF's policy decision follows a trend that has been emerging for some years in the fashion industry. Consumers have indicated loud and clear that they want ethical sourcing built into companies' bottom lines. And for some consumers, that means moving away from animal-sourced materials altogether. Companies that have signed on to that movement include Armani, whose products are now are fur-free, and a long list of fragrance and cosmetic companies that have felt the pinch from consumers who want humanely-sourced products.

For VF, the company says, going fur-free and developing a welfare policy that addresses how clothing and footwear materials are sourced and used is just part of a larger effort to be sustainable -- and one that it will continue to develop in the years to come. At the present time, its sustainability report suggests that effort is far-reaching, extending beyond the actual materials they source to deep within the sustainable practices of its suppliers.

"While we do not directly purchase conflict minerals from any source, we are working closely with our suppliers to determine the origin of conflict minerals in our products," VF notes in its Sustainability Report, adding that it expects its suppliers to adhere to the same ethical principles that it sets for its own companies.

More information about VF Corporation's welfare policy and global ethical sourcing initiatives can be found in its 2016 Sustainability Report.

Image credit: dee_dee_creamer, via Flickr

 

The auto loan market is in trouble, at least if a recent report from Bloomberg Markets is any indication.

The convergence of fraud and financially-strapped consumers has led to increased losses for car lenders, Matt Scully of Bloomberg reported last week. He cited data from research firm Point Predictive, which determined the value of those bad loans could double from $6 billion in 2015 to upwards of $12 billion this year. Delinquency rates are close to surpassing 1 percent, the level that was attributed as an underlying cause of the mortgage crisis a decade ago.

No one is predicting that an impending collapse of the automobile-lending market will trigger a financial catastrophe like the one that nearly demolished the U.S. economy in 2008. After all, the U.S. automobile financing market is much smaller than the home loan sector. But it's important to note that used automobiles are being financed by loans much more now than in the past -- and other storms are brewing that may destabilize transportation systems across the country.

The research firm Experian estimated that over 90 percent of all used vehicles were not attached to any loan agreement as of 1990. That figure has since cratered to around 20 percent. And almost 63 percent of the automobiles financed at the end of 2015 were used or pre-owned.

And as with the U.S. economy overall, the so-called “shadow banking” sector is taking over a larger share of the auto lending market.

Data shows that more loans are being underwritten based on fraudulent claims of income or employment status. And short-term rental or car-leasing programs financed by the likes of ridesharing giant Uber also contribute to the growing problem of consumer dependency on expensive auto loan schemes.

At one point Uber was a lender as well: It briefly touted a partnership with the banking giant Santander that ended abruptly last summer. On the Web, those links are now redirected to the company’s driver recruitment page.

Nevertheless, Wall Street was quick to jump on the bandwagon Uber started. Goldman Sachs, for example, launched a $1 billion credit facility to help Uber retool how it could “help” its drivers secure access to a car.

This trend has been ongoing for several years. As Gary Rivlen of Mother Jones pointed out last year, the subprime auto loan market is growing by leaps and bounds -- and just about every auto manufacturer or financial institution has coveted a piece of it.

General Motors once struggled in part because of its automotive loan division’s performance. But earlier this decade, the automaker was quick to enter that market as it emerged from bankruptcy with the purchase of subprime lender AmeriCredit for $3.5 billion in 2010.

With auto loans generating an estimated $113 billion in revenues last year, it is little wonder why many companies are after a slice of that pie.

The result, wrote Gwynn Guilford in Quartz, is that Americans are borrowing more money for auto loans than ever before -- and they're on the hook for approximately $1.2 trillion in debt.

Many analysts are quick to attribute this trend to “consumer confidence.” But the stubborn fact is that delinquencies are on the rise as more consumers struggling to get by are lured with easy but expensive access to credit. Schemes that give potential drivers for ridesharing companies access to cars through potentially predatory lenders also send a grim warning.

As Rebecca Vallas of the Talk Poverty blog summed up in 2014, the fact that more at-risk consumers are signing up for loans with exorbitant fees and interest rates, when they can often not afford them, is just another example of how our society "punish[es] people for being poor.”

So, how did our citizens become entangled in this mess?

In larger towns and cities, ridesharing companies are quick to describe themselves as the solution to mobility -- which can pave way for serious problems. These firms further argue that car ownership will quickly become obsolete as autonomous cars become mainstream. One research firm has even suggested a bucolic future for many urban areas, one in which autonomous electric vehicles roam the streets and quickly displace parking lots and street-widening projects.

That's fantastic scenario, if it happens. But the problem is the disturbing reality underway now.

Let’s start with the bloated number of cities hitching their wagons to ridesharing companies, which are still not profitable, assuming these mobility pathfinders will soon shuffle people to work and home. The result is often not promising for urban transportation infrastructure. While some big-ticket public transportation projects have been approved in the past year, transit budgets are seeing increasing cuts as local lawmakers seem keen to 'pass the buck' to ridesharing and auto companies.

Matters will only become worse if the current presidential administration succeeds in its drive to cut as much as 13 percent of the Department of Transportation’s budget – an agency on which many municipalities rely for funds.

As Henry Grabar of Salon summed up last December, cities think they can reduce those services because Uber or Lyft can fill that gap. The problem is that those companies’ models are hardly sustainable; that is why Uber has gone into adjacencies such as food delivery or freight. The math that the likes of Uber are giving us does not add up.

There is no way society can support a system that allows a private driver for every commuter, even for a short commute home. And again, neither of America's largest ridesharing companies company has made money: High-profile campaigns to appease investors and stockholders, such as Uber’s offer last summer to move Manhattan commuters for almost nothing, are simply short-term fixes.

At some point, the cost of these rides will spike in price. Add the fact that more drivers are precipitously close to having their cars repossessed, and the outcome could go beyond citizens losing their wheels and being saddled with bad credit scores. The country’s already creaky transport system could become even more dysfunctional.

Policymakers need to take a step back, stop being lured by the unfulfilled promises of the ridesharing industry, and answer this question: Is 'mobility for all' best served by allowing more citizens to plunge into debt so they can drive the rest of us around, or should we stick with the system of buses and rail that served us well since the early 20th century, at least with proper funding?

Image credit: Shawn Clover/Flickr