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By John Perkins

I was an economic hit man in the 1970s. My job was to exploit countries we referred to as being in the Third World – ones that possessed resources our corporations wanted, like oil. If I failed, the jackals stepped in and overthrew or assassinated leaders who refused to accept my “deals.”

My official title was chief economist at a major U.S. consulting firm. I was in charge of convincing heads of state to accept huge loans from the World Bank and its sister organizations. The loans were used to hire our engineering and construction companies to build electric power systems, ports, airports, highways, and other infrastructure projects that would bring large profits to those companies and also benefit a few wealthy families in the country, the ones who owned the industries and commercial establishments.

Everyone else in the country suffered. Funds were diverted from education, healthcare and other social services to pay interest on the debt. In the end, when the country could not buy down the principal, we would go back and, with the help of the International Monetary Fund (IMF), “restructure” the loans. This included demands that the country sell its resources cheap to our corporations with minimal environmental and social regulations and that it privatize its utility companies and other public businesses and offer them cheap to our companies.

I was extremely successful at my job.

My success was not due to the fact that I was recruited by the National Security Agency (NSA). It was not due to the training I received at the hands of my mentor, the very competent Claudine Martin – a woman who knew all my strengths and weaknesses and exploited both (as detailed in "The New Confessions of an Economic Hit Man"). It was not due to the techniques I learned in business school. Nor to the competence of my staff of brilliant econometricians and financial wizards.

Those things helped at times. But the “secret” to my success was my ability to alter objective reality by changing perceived reality, what we might think of as the Perception Bridge.

In my case, Objective Reality 1 were the countries that had resources we wanted. The Perceived Reality was that using those resources as collateral on loans to finance the building of infrastructure projects would create economic growth and prosperity for everyone. Objective Reality 2 was that the statistics showed such economic growth did occur.

However, since economic statistics (GDP) in such countries are skewed in favor of the wealthy, the fact was that only our companies and the wealthy families benefited. The rest of the population suffered. In many cases this has led to political unrest, resentment, and the rise of various forms of radicalism and terrorism.

History indicates that the same ability to alter objective reality by changing perceived reality is behind the success stories of just about everyone, from Jesus Christ to Mother Theresa, from George Washington to Mahatma Gandhi, from Henry Ford to Steve Jobs.

Quantum physics, chaos theory, and modern psychology teach us that consciousness and changes in perception govern most of human behavior. Religion, culture, legal and economic systems, and corporations are determined by perceived reality. When enough people accept these perceptions or when they are codified into laws, they have immense impact on objective reality.

For most of human history, people believed the universe revolved around the earth. When Copernicus proved otherwise, the new perceived reality changed religion, philosophy and science. In fact, it altered the objective reality of just about all human endeavors.

Human activities – individual, communal and global – are driven by this process of altering human perceptions of reality in order to change objective realities.  Two cases illustrate this. The first describes the path to success of a US corporation. The second summarizes the impact of U.S. foreign policy and illustrates how a change in the way that policy was perceived could have altered the subsequent history of the Middle East. A region that has been characterized by brutal dictatorships and torn by war might instead have enjoyed peace and democracy.

Case No. 1: Ford Motor Co.

In 1914 Henry Ford’s Objective Reality was: A) His company sold Model T cars that were produced through the assembly line process; and B) Because the assembly line was monotonous and workers were under a lot of pressure to reduce the amount of time to build a car from 12.5 hours to less than 100 minutes, there was an extremely high turn-over rate in Ford’s work force.

So Ford perceived a new reality. He raised wages from the standard $2.34 for a nine-hour day to $5 for an eight-hour day – at a time when every other car manufacturer was trying to reduce wages. In addition to keeping workers on his assembly line, Ford had a second motivation. He understood that the company, its workers and the buying public all came from the same population and he reasoned that “unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.” Ford knew that increasing the buying power of his workers would have a multiplier effect; it would also increase the buying power of many others.

Objective Reality 2: Ford sold 308,000 Model Ts in 1914—more than all other carmakers combined. In 1915, sales soared to 501,000. In 1920, Ford sold a million cars. [1] In the process, Ford’s actions helped stimulate unprecedented growth in the US middle class.

Case #2: U.S. government policies in Iran

As an EHM, I spent a great deal of time in Iran, from 1973 until the Shah (my client) was overthrown in 1979. I fell in love with the country and also became very familiar with its tragic history and of the role my government played in it.

Mohammad Mosaddegh had been democratically elected the Prime Minister of Iran in 1951. Adhering to his campaign promises he introduced progressive reforms including social security, rent control, and land reform, and he insisted that foreign oil companies pay a fair share of their income from Iranian oil to the Iranian people. When one oil company – now known as BP – resisted, he set about nationalizing it. This was Objective Reality No. 1.

The U.S. government labeled Mosaddegh a Communist, Soviet puppet, and a threat to democracy. This was the Perceived Reality that shaped U.S. policy.

As a result, the CIA overthrew Mosaddegh in 1953 and replaced him with the Shah, a brutal pro-Western dictator who “auctioned” Iran to foreign oil and other companies. All during the 1960s and 1970s there was an undercurrent of growing discontent with the Shah. As an advisor to the Shah, I – like most Americans – had no idea this was happening; after all, the information we received was filtered through our Iranian counterparts and translators – people who owed their careers to the Shah.  The discontent erupted into the Iranian Revolution of 1979. The Shah was overthrown, Ayatollah Khomeini took control, 52 U.S. diplomats and citizens were held hostage for 444 days, U.S. and European countries initiated sanctions against Iran. As a consequence, Islamist militarism expanded rapidly during the next decades throughout the Middle East.

We can only imagine how different the situation might be today in Iran, the Middle East, the U.S., and the world if the perceived reality had been different – something like:

Alternative Perceived Reality: The U.S. government supports Mossadegh’s policies and announces that it will only purchase oil from companies that pay a fair share of their income to the people of the countries where they extract oil.

The above are examples of how the Perception Bridge works. There are countless others. This process can also be applied very effectively on a personal basis, for making changes in relationships, careers, and many other aspects of life. Human activity – both individually and collectively – is determined by the ways perceptions impact reality, consciously and unconsciously.

I’ve found in my role as advisor to corporations and their executives and as a speaker at MBA and other programs that taking a good hard look at the impact of perceived reality on objective reality is one of the most effective processes individuals, businesses, and other institutions can employ in order to achieve their true objectives.

I’m also struck by how much the perceived realities in business have been altered since I was in business school during the late 1960s. I was taught that a good CEO earns a decent return for his investors and also makes sure that his company is a good citizen, that it serves a public interest. We were instructed to take care of our employees, giving them health insurance and retirement pensions, to treat our suppliers and customers with deep respect, and to honor the idea that good business is a win-win for all stakeholders. In many cases, CEOs made sure that their companies not only paid taxes but also contributed money to local schools, recreational facilities and other such services.

All that changed in 1976 when Milton Friedman won the Nobel Prize in Economics and stated, among other things, that the only responsibility of business is to maximize profits, regardless of the social and environmental costs. This was a perceived reality that became the defining goal for businesses. It convinced corporate executives that they had the right – some would say the mandate – to do whatever they thought it would take to maximize profits, including buying public officials through campaign financing, destroying environments, and devastating the very resources upon which their businesses ultimately depend.

That perceive reality has resulted in a failed global economic system, one that is on the path to consuming itself into extinction – what some economists refer to as a Death Economy.

Death Economy:

• Destroys resources it needs for long-term survival;


• Is consuming itself into extinction;


• Invests heavily in the military-industrial complex


• Causes pollution;


• Keeps billions of people in poverty

It is time that we turn this around. How about:

It is important to understand that the perceived reality when Milton Friedman espoused profit maximization in 1976 was that financial capital was scarce while nature was abundant; the planet’s ability to absorb pollution and provide natural resources was considered practically unlimited. However, that has since changed. We are confronted by a very different reality today. It is time to embrace new ideas, new goals, a new perceived reality.

We must adapt to the changes by building an economy that rewards businesses that clean up pollution, regenerate devastated environments, and create new technologies for energy, transportation, communications, trade, and just about everything else – that recycle instead of ravaging the planet. The responsibility of business today reflects what I was taught in business school many years ago – to serve a public interest while earning decent rates of returns for investors who develop a Life economy.

Life economy:

• Cleans up pollution


• Regenerates devastated environments


• Helps hungry people feed themselves


• Innovates – develops and embraces new technologies


• Recycles


• Serves a public interest

The success stories of humans – as individuals and as communities – revolve around the relationships of perceived reality to objective reality. At this critical time in history, it is essential that we commit to consciously building Perception Bridges that will take us into a world that future generations will want to inherit.

Today, businesses run the world. They manipulate the U.S. and just about every other government. The good news is that businesses depend on all of us to buy their goods and services, work for and invest in them, and support them through our governmental and tax policies.

It is important that each of us – CEOs of global corporations, entrepreneurs, owners of mom and pop businesses, and all of us consumers –  ask ourselves some essential questions.

Do we want to support businesses that:

1. Just want to make money?


2. Are driven by a goal of becoming bigger?


3. Are committed to serving a public interest?


4. Want to offer health and happiness to employees?


5. Are determined to attract the best and brightest employees?


6. Understand the nature of and are committed to creating a Life Economy?

The answers are obvious. Milton Friedman might have answered differently in his day. But we all know that today the correct answer to one and two is a resounding “No,” while it is a “Yes” for the others.

We are living at a critical time in human history. The economic system that has served us well for many decades, that has brought us amazing science, technology, medicine, art, and life styles has run its course. While it is now failing us, it also provides the base for creating an economic system that itself will be a renewable resource. Each of us has a role to play in this exciting adventure of converting a Death Economy into a Life economy.

[1] Jeff Nilsson, “Why Did Henry Ford Double His Minimum Wage?” January 3, 2014, The Saturday Evening Post, http://www.saturdayeveningpost.com/2014/01/03/history/post-perspective/ford-doubles-minimum-wage.html

John Perkins has written nine books that have been on the New York Times bestseller list for more than seventy weeks and translated into over thirty languages. His new book: The New Confessions of an Economic Hit Man released in February 2016. John has lectured at Harvard, Oxford, and more than 50 other universities around the world, and been featured on ABC, NBC, CNN, NPR, A&E, the History Channel, Time, The New York Times, The Washington Post, Cosmopolitan, Elle, Der Spiegel, and many other publications. He is a founder and board member of Dream Change and The Pachamama Alliance, non-profit organizations devoted to establishing a world future generations will want to inherit. For more information: www.johnperkins.org | www.dreamchange.org

Image from www.johnperkins.org

By Mike Pile

The terms “global warming” and “climate change” describe two interrelated and similar — but scientifically different -- phenomena. But one term is increasingly used as the other is in retreat. When did this happen, and more importantly why? If environmental threats are among the foremost challenges of our time, the semantical — and emotional — differences between these terms are worthy of closer examination. So, let’s examine.

A simple Internet search returns variations on two themes:

1. Liberals tend to use the term “global warming” while conservatives use “climate change” — and by implication and inference, nefarious politics drive the agenda. Republican pollster and wordsmith, Frank Luntz, makes frequent appearances in the articles surfaced during these searches. And while he did not invent the term “climate change,” he is credited with encouraging its use among his clients.


2. The terms mean two different things and have both been used and misused long before they became above-the-fold topics.

Brigham Young University’s Corpus of Contemporary American English (COCA) tracks the usage, among other metrics, of virtually every written and spoken word across many different types of media from news to academia to entertainment to political and policy speeches. Using COCA, we examined the usage frequencies of the terms “global warming” and “climate change,” year to year, from 1995 to 2015.

My research finds a preference for “climate change” over “global warming,” with an increasing gap over time.

From 1995 through 2008, the two terms appeared more or less equally with two exceptions. In 2003, the year Luntz Global issued its recommendation that its clients use “climate change” instead of “global warming,” the former term enjoyed a spike. Around 2005-2007, the years before, during and after the release of “An Inconvenient Truth,” both terms see a significant increase in use, but “global warming” regains primacy. While it’s hard to conclude a correlation between frequency of use and these events, common sense suggests some relationship.

Beginning in 2008 and continuing through 2015, “climate change” reigns supreme, each year appearing more frequently than “global warming.” Furthermore, not only does it appear relatively more, its use grew overall — while the use of the term “global warming” declined. Indeed, there is a distinct preference for the term “climate change” over “global warming.”

 

 

 

So, why does the term “climate change” enjoy such pronounced use and seemingly at the expense of the term “global warming?”

We offer two hypotheses.

According to the text book definition and many people in the scientific community, “climate change” is more encompassing of the phenomena that we are witnessing, and is therefore technically correct. So therefore it becomes the careful choice of caring writers, speakers, researchers, entertainers, artists, opinion leaders, or anybody with a public forum. It is conceivable that a self-reinforcing feedback loop takes place, where thought leaders use the term, the consuming public in turn uses the term, and then thought leaders seeking to connect with the reading public continue to use it … until it becomes part of the vernacular.

An alternate view is that the choice of terms is based less on the scientific distinction and more on the powerful emotional differences between the two terms. Over the course of discussing this piece with writers, climatologists, and others we have heard that while “climate change” is benign, “global warming” brings out the internet trolls who point to record cold temperatures in Cleveland, snowfall in Alabama and citrus-killing frost in Florida. “Global warming” is clearly a politically charged term.

But this is more than anecdotal. A 2014 poll by George Mason University and Yale University found that the term “global warming” is more emotive, more powerful, and more threatening than “climate change.” The study concluded that: “Global warming generates stronger ratings of negative affect, i.e. bad feelings, than the term climate change.” Specifically, relative to “climate change,” Americans associate “global warming” with higher levels of risk, harm, and fear.

Here at Uppercase Branding, we’re not scientists, but we are word enthusiasts. Recognizing that the two terms are scientifically different we posit that, to most people, even engaged people (in their day to day consumption of information), the difference is subtle if not lost altogether. Indeed, the journalists at NPR have issued a statement that they will use the terms interchangeably.

As we face changes in our environment and the uncertainty in our lives that these changes foreshadow, using the right term is not merely an issue of semantic clarity — it is a moral imperative.

Emotionally, “climate change” and “global warming” are as far apart in meaning as they are close logically. Each is laden with different imagery.

• “Climate change” is variable. Temperatures go up, they go down. The wind blows, the wind stops. Some years it snows more, some less, but it snows. California was parched in the ’70s, drenched later, parched again. It is cyclical. The great circle of life. Plus ça change, plus c’est la même. The only constant is change.


• “Climate change” is natural. And what is better than nature? It is the natural order of things. Devoid of its usual context it is almost happily reassuring. It encourages us not to care.


• “Global warming” is constant. As a term there is nothing variable about it; temperatures go up and continue to do so. Since NASA scientist James Hanson first brought it to the world’s attention in 1981, by any measure, from any starting point in time, over virtually any time period, Planet Earth has been growing warmer.


• “Global warming” is a problem. Man-made or otherwise, it is scary. It tells us our collective goose is cooking. It beseeches us to care.

The term “climate change” evokes images of polar bears chilling on increasingly smaller ice floes until, possibly, things naturally change again and the bears return to bigger floes. With “global warming” we envision ice caps melting and polar bears dying.

The climate is changing. But it is changing because the oceans are warming. Global warming is the root cause. Global warming is specific and measurable: humans can comprehend and address specific and measurable.

“Climate change” reinforces the status quo. “Global warming” calls us to action.

Writers, policy makers, and sustainable business leaders who write and speak about the threats to the environment need to choose the right word. The right word, as Mark Twain wrote, is the difference between lightning and lightning-bug.

Image credit: Flickr/Jon Sullivan

Mike Pile is president & creative director of Uppercase Branding, a verbal identity consultancy that specializes in creating names for companies, products, features and any other thing that would benefit from a brand name. 

By Jennifer Tuohy

The Internet of Things is a boon for businesses striving to be more sustainable, but at-home IOT is exhibiting worrying signs of stalling. Industry analyst Jan Dawson summed up many people’s concerns when he said the smart home market seems perennially stuck in the early-adopter phase.

He noted some exceptions, and most of them (such as the Nest Learning Thermostat) carry a clear promise of return on a user’s investment. Here, Dawson pinpoints a major issue with the smart home — marketing.

The smart home is being marketed at homeowners as the home of the future, packed with cool gadgets and neighbor-wowing conveniences. While this is true, it’s clearly not convincing anyone other than early adopters to cough up their hard-earned cash. People see connected gadgets as a luxury, because that’s how they’re being sold.

In reality, many facets of the smart home are a necessity for both consumers and the environment, because they save money, largely through reducing energy use and waste. Manufacturers need to start pushing this promise over the lifestyle one.

Why do we need a smart home?

"The key drivers in smart home adoption are home security, energy efficiency, entertainment, convenience/productivity, connectivity and health monitoring,” wrote global retail analyst Deborah Weinswig. This is born out in the success of Nest. Over 3 million people bought the Nest because they were offered a clear ROI on their purchase—not just because they could adjust the temperature of their home remotely. The device promised to use its smarts to reduce energy use, save money and pay for itself within two years.

Here is where the real value of the smart home lies for the consumer. It gives you information about your home and ultimate control over your home through applications, then runs it for you according to your parameters, thereby reducing waste and saving you time and money.

What is the largest producer of waste and second largest user of energy in the home? The kitchen. I’ve written before about why I believe the smart kitchen is the next big thing for the smart home, the residential arm of IOT. If manufacturers can figure out a way to make smart products in the kitchen that reduce waste and energy use and increase convenience, then we will have a win for the planet, the consumer and business.

Can a sentient smart kitchen reduce waste?

"The smart kitchen segment of the household appliance market holds enormous potential, as the kitchen is one area of the house that often has more devices than any other. Also, many people wish to cut down time spent cooking and preparing food, which is why they buy all those devices in the first place,” Weinswig wrote in The Connected Home Series published by the Fung Business Intelligence Center.

The truly smart kitchen is still some ways off, in part because with so many disparate manufacturers in the space, interoperability will be a problem. Currently, Samsung is leading the way with its interconnected products as well as its acquisition of Smart Things, a popular consumer smart home hub. However, a device that comes along and connects all the elements of the kitchen would be a huge success.

Amazon’s Echo has given us a taste of this. The device has become an integral part of smart (and many non-smart) kitchens. It provides a hands-free way to set timers, find out how many cups are in a gallon and activate connected devices with just a spoken sentence. The Echo is already an indicator that there is a need for a unifying device in the kitchen.

With its advanced AI capabilities, Google Home, coming later this year, looks set to bring much to the kitchen that Echo is lacking and could provide that missing linchpin.

Communication is key

If appliance manufacturers aren’t going to play nicely with each other, hopefully they will all play nicely with an AI device. The smart kitchen won’t flourish until all its disparate parts—the pantry, the fridge, the oven, the microwave—can communicate with each other.

When the refrigerator and the pantry knows what’s inside (courtesy of cameras and RFID tags, not by the user inputting its contents through an app), and can communicate that to an AI device that is aware of the local weather, knows the dietary restrictions of the household and has access to recipes, it can serve up dinner ideas from the food already on hand.

In fact, a smart bot that can do all this is already in development. The Mozilla Foundation is working on a smart kitchen bot that will help you decide what to make for dinner. The project, part of the Mozilla connected devices project, launched in June 2016 and could ultimately do all of the above and much more.

The larger goal of the project is to help reduce food waste by helping families better plan meals. According to the project's Wiki, "By building the SmartKitchen service that provides meal options based on existing food inventory, we will provide more options for meals and therefore make it easier for people to have more family dinners."

This type of AI help families plan their meals and prepare healthier school lunches, and it alerts them when they’re low on an ingredient or when a product is about to expire. It also monitors food consumption, so that over time it can help determine healthy eater patterns. This will allow families to effortlessly reduce food waste, eat healthier and manage their food budgets more efficiently.

How can we sell the smart kitchen?

What’s missing right now? A fridge to work with this technology. There are plenty of weird and wonderful connected gadgets for the kitchen – an egg minder that tells you when your eggs are going to expire and how many you have was a hugely popular product, illustrating a demand for this type of functionality. But as of today, the fridge of the future hasn’t arrived. Samsung’s new Family Hub is a big step in the right direction, and with a few iterations and a few significant price drops, we will be close to perfecting the connected kitchen appliance.

But when the industry gets there, let’s not try and wow the consumer with the appeal of touch screen tablets built into the door. Instead, let’s focus on invisible connected tech that communicates with the kitchen as a whole. This will bring us to a place where, by purchasing a $3,000 refrigerator, families could realistically expect their grocery bills to be reduced by 30 percent.

If Nest can sell millions of smart thermostats based on the fact that it can save you $250 over two years, imagine what the prospect of savings of $2,300 to $4,500* a year could do for sale of the smart kitchen.

* Based on a savings of 30 percent annually of the average family of four’s spending of $146-$289 per week on groceries.

Jennifer Tuohy is a home technology fan who has installed many DIY smart home projects in her Charleston, S.C., home. Jennifer writes on her home projects and ideas for The Home Depot. If you are researching smart-home ideas for refrigerators as part of your kitchen planning, you can visit Home Depot’s website.

Image credit: Flickr/Polygon Realty Limited

China and the U.S. are the world's largest greenhouse gas emitters, and both countries still heavily subsidize fossil fuels. Last week, the two countries released reviews of their fossil fuel subsidies as part of the G20 framework, which are reviewed by officials from China, Germany, Mexico, and the Organization for Economic Cooperation and Development (OECD).

At the 2009 Pittsburgh Summit, leaders of the G20 countries agreed to launch a framework and collaborate for "lasting economic recovery" and strong, sustainable growth. The U.S and China are the first to release reviews under the G20 framework. Both countries committed to eliminate and consolidate fossil fuel subsidies as part of the review process, a promise they made in 2013.

The reviews found inefficiencies in both countries' subsidy systems -- and both face challenges in fixing that problem. China is a “developing powerhouse with unbalanced regional developments, thus the reform will be a gradual process,” its review states. For the U.S., the primary roadblock is the Congress. As Climate Change News points out, of the 16 subsidies the U.S. has marked to be eliminated, all but three conclude with this: “The United States Congress must pass enabling legislation for this proposal to become law.” President Barack Obama has issued 11 proposals to eliminate subsidies, but not one passed the House.

What’s the big deal about inefficient fossil fuel subsidies? They “encourage wasteful consumption, reduce our energy security, impede investment in clean energy and undermine efforts to deal with the threat of climate change,” the Leader’s Statement of the G20 Pittsburgh Summit stated. And they are costly. The U.S. review found over $8 billion in inefficient subsidies, while China has over $14.5 billion. Fossil fuel subsidies need to be reformed, both in the U.S. and in China, in order to effectively address climate change.

China is the biggest energy user in the world and the top GHG emitter. Fossil fuel subsidy reform is critical for the country to reduce its GHG emissions. Reform is also necessary to implement China’s energy price marketization reform. Phasing out inefficient fossil fuel subsidies means government intervention in fossil fuel prices is reduced, better reflect the supply and demand of energy and “effectively promote the marketization of China's energy price mechanism reform,” as the review states. So, phasing out inefficient subsidies needs to be combined with energy price marketization reform.

Fossil fuel subsidy reform in the U.S. is like no other. Reforms of subsidies are “generally blocked when they reach the legislature,” as the review of U.S. subsidies states. The reason is that Congress has the power to legislate. That ol' system of checks and balances makes it harder to reform subsidies. But Americans can play an important role in getting Congress to pass reforms. Or as the review puts it, “Political processes can only happen if a sufficient number of citizens are informed about the case for reform and are motivated enough to express their views to their representatives in Congress.”

The problem is that many of the measures the Obama administration has proposed for subsidies reform since 2010 relate to fossil fuel production and those are either complex or obscure to the average American. In other countries, governments are trying to reform consumption subsidies, which are easier to understand. What the review recommends is a “bottom-up approach” to inform and convince Americans that subsidies reform is needed before the reform is ever proposed to Congress. 

In order to build support among Americans, an effective communication strategy is key and one that emphasizes the benefits of subsidy reform. Perhaps emphasizing that some of the savings from subsidy reform can be allocated to other priorities such as education and infrastructure. In other words, Americans need to know that reforming fossil fuel subsidies will benefit their lives.

Image credit: Flickr/SMelindo

For decades, people imagined traveling to Mars. And Elon Musk believes his company, SpaceX, will be the first to send humans to the Red Planet.

During a speech at the International Astronomical Congress in Guadalajara, Mexico, Musk framed the future settlement of Mars as the only eventual choice for humans in a world facing environmental threats and even the risk of a major extinction event.

“The alternative is to become a space-faring civilization and a multi-planet species,” Musk told a largely receptive crowd on Monday.

Musk said it would be possible to send 1 million people to a self-sufficient Martian city over the next 100 years -- and the first humans should reach Mars within a decade. Once a self-sustaining city is established, occupants could freely travel between Mars and Earth, as in every two years when the planets orbit closest to each other.

So why Mars, as opposed to the moon? Musk said Mars is the only possible option, as scientific research suggests the planet is similar to Earth at its earliest formation. The Red Planet has plenty of minerals and elements that could support human life, including nitrogen, water and carbon dioxide. Add the evidence of hydrogen on Mars, and Musk suggested it could be possible to produce methane fuel there.

It is on that point where Musk noted four essential keys to make regular travel to and from Mars possible. A reusable and cost-effective rocket system must exist; the spacecraft going to Mars must be able to refuel in orbit to save on costs; a fuel such as methane must be produced on that planet; and a propellant that could launch spacecraft out of Mars’ orbit must be found on that planet.

A video SpaceX released on YouTube certainly makes travel to Mars seem feasible, especially when the two planets are closest to each other – as in May of this year, when they were only 46.8 million miles apart. That would shorten the time needed to travel to Mars to about six months, although SpaceX and Musk say advances in technology could shorten that time to 80 days, and even down to 30 days far into the future.

The propulsion of these rockets would occur at Cape Canaveral, from where the Apollo moon expeditions of the 1960s and 1970s launched. Once the Mars-bound spacecraft started orbiting Earth, a tanker would also launch from again from Florida and add fuel to the spaceship, a process Musk said could finish in as quickly as 20 minutes, then repeated several times as having this done in space would be a cheaper and more efficient procedure. After the spacecraft starts its trip to Mars, large wings, laden with solar panels generating 200 kilowatts of power, would enable the 100 or so passengers to make their way to the fourth rock from the sun.

Musk’s presentation had no lack of “wow” factor. Where it got complicated is when it comes to cost. Currently a trip to cost would cost about $10 billion per person. Musk described that hurdle as an impossible Venn diagram, as there are plenty of people who dream of such a journey, but no one would would be able to pay for it. Musk’s goal is to drive the cost down to $200,000 a person, perhaps even cheaper, and include a “really fun and exciting” experience with cabins, zero-gravity games, a restaurant, “electro-balls” and plenty of space to float around.

Then there is the scale of the project, which would require 10,000 trips with a fleet of 1,000 ships if humans really are going to create a new civilization on Mars. As for who would foot the bill, Musk suggested public-private partnerships, and said that support and investment for such a project would “snowball” as technologies improved and became cheaper. NASA has said it has a goal of sending humans to Mars in 2030 at a cost of tens of billions of dollars, if not more.

And it is those costs, and resources, that mount the biggest challenge to Musk’s vision. He suggested “lots of satellites” and a tongue-in-cheek Kickstarter campaign, but the specifics were thin beyond “making lots of progress.”

Yes, the evidence suggests that Earth is on a long-term crash course to disaster if humans cannot achieve greater cooperation on how to mitigate climate change risks. And financing the technologies, investments and mobilizations of resources to avert climate change’s impact are, and will be continue to be, expensive. But those costs will still be exponentially cheaper than settling a faraway planet about which we have much to learn.

Furthermore, while Musk’s talk made for great theater, he already has a lot on his plate with the Tesla-SolarCity merger. And there is that matter of SpaceX’s Falcon 9 rocket explosion, the investigation of which still has fallen short of providing answers.

“The mean reason why I am personally accumulating assets is in order to fund this,” said Musk to applause during his speech. “I really don’t have any other motivation for personally accumulating assets except to be able to make the biggest contribution I can to making life multi-planetary.” Musk will need a lot more assets, so society needs to ask if it is financially wise to fund a dream that is millions of miles away, when there is plenty that could be done here on Earth.

Image credit: NASA

The “sandbagging” scandal, which will long harm Wells Fargo’s reputation, recently entered another phase with the announcement that two employees will enter into a class-action lawsuit against the bank. Other lawsuits could bring the amount litigated to over $7 billion.

Alexander Polonsky and Brian Zaghi say they were fired for not meeting sales quotas, after a scandal involving millions of fake accounts resulted in nearly $200 million in fines for the bank. The two employees filed the lawsuit at a Los Angeles Superior Court and will be represented by LA attorney Jonathan J. Delshad. Delshad accuses Wells Fargo of firing employees who were forced to meet “unrealistic quotas” that in turn inspired thousands of their peers to open fake accounts, which were unknown to many customers, out of fear that they would lose their jobs.

The fallout from this scandal has savaged the reputation of Wells Fargo, which emerged almost unscathed from the financial crisis that almost brought the U.S. economy to its knees almost a decade ago. The outrage reached its loudest crescendo last week when the Wells Fargo’s CEO, John Stumpf, was subjected to a long and sustained verbal attack at a U.S. Senate hearing by Massachusetts Democrat Elizabeth Warren.

“You haven’t resigned, you haven’t returned a single nickel of your personal earnings,” jabbed Warren during Stumf’s testimony last week. “You haven’t fired a single senior executive; instead, evidently, your definition of ‘accountable’ is to push the the blame to your low level employees who don’t have the money for a fancy PR firm to defend themselves.”

Warren accused Stumpf of “gutless leadership” and described his actions as throwing over 5,000 Wells Fargo employees, many of whom made around $12 an hour, under the bus. Meanwhile the bank’s former head of consumer banking operations, Carrie Tolstedt, was able to collect almost $125 million as part of her sudden retirement package. The senator also criticized Stumpf’s description of the bank’s shenanigans as the work of a few “rogue” employees, noting that Wells Fargo’s aggressive sales tactics helped fuel the company’s continued rise of its stock price – which in turn allowed the bank’s chief to profit handsomely during his tenure of one of the world’s largest banks.

The bank’s senior leadership has continuted to endure even more embarrassing news, as in revelations that some employees who called Wells Fargo’s ethics hotline over the company’s hyper-aggressive sales quotas and tactics were fired for those actions. One branch manager in New Jersey claimed after he called that number, he was dismissed because of “tardiness.”

Class action lawsuits often take years before a ruling is made, and the Los Angeles litigation will most likely spur other employees and lawyers to follow suit. But the outrage over Wells Fargo’s punishment of employees for reacting to a toxic environment, which the evidence suggests executives have created, led the bank to take action many analysts wish had happened during the 2008-2009 financial meltdown. Wells Fargo recently announced that it is investigating its retail banking practices, and that in a widely publicized “clawback,” Stumpf will forfeit as much as $41 million in unvested stock, salary and bonuses.

Despite that news, Warren has not let up, with her latest Twitter onslaught including a retort that Stumpf will be “just fine.” The financial penalty Stumpf will pay may be a small step and falls short of real accountability, but this is a definite turnaround from the banking sector’s 2008 collapse, after which the perpetrators walked away unscathed and unpunished.

Image credit: Alexius Horatius/Wiki Commons

Apple co-founders Steve Jobs, Steve Wozniak and Ronald Wayne set up shop in Jobs’ parents garage. Is that even possible anymore? Is the ‘tech tinkerer’ or garage inventor a phenomena of the past? Not necessarily. Would-be inventors face a much more robust funding landscape today then they did in the 70s.

Crowdfunder says there has “never been a better time to be an entrepreneur” because it is easy to raise capital. In 2000, it cost about $1 million to start a company. Now it costs less than $5,000, and startups and small businesses account for over 50 percent of the GDP.

However, most new startups, almost 90 percent, are software based, according to Line/Shape/Space. For nearly three decades, software was kind when it came to building a startup. And software is still receiving heavy investments. In July, Fortune reported that Slack's venture arm and and its VC cronies backed 11 software startups complementary to Slack’s business messaging app. In December, Slack and investors created an $80 million Slack fund, and the investments were made with it.

But hardware is receiving investor attention more and more these days. Opportunities for investing in hardware are possible today because startups can get off the ground for a lower upfront cost, Line/Shape/Space reported. Venture capital investment in hardware startups increased by over 30 times since 2010, reported Techcrunch. And a few companies proved that investing in hardware is profitable. GoPro and Fit are two of those companies.

Founded in 2007 by James Park and Eric Friedman, Fitbit produces wearable devices that track physical activity. Last year, the company filed an IPO worth $358 million on the New York Stock Exchange. For the first quarter of 2016, Fitbit reported revenue of $505.4 million.

Founded in 2002, GoPro makes a line of action cameras. The company only reported $150,000 worth of sales in its first year. But four years later, the GoPro Digital Hero, its first digital camera, had $800,000 in sales. A year later, GoPro revenues reached $3.4 million, and in 2014 the company filed an IPO on the NASDAQ valued at $2.95 billion. GoPro reported $221 million in revenue for the second quarter of 2016, a 20 percent increase.

There’s one way for startups to really make it these days: get acquired by a big gun like Google or Facebook. Take Google, which paid $3.2 billion for smart-thermostat manufacturer Nest Labs in 2014. Founded in 2010 by two former Apple engineers, the company released the acclaimed Nest Learning Thermostat a year later. By 2012, it had 130 employees. And through Nest Labs, Google bought two startups for about $500 million apiece: DropCam, which makes Wi-Fi video streaming cameras, and the satellite company Skybox Imaging. DropCam secured $12 million in VC funding from Menlo Ventures in 2012 and $30 million from Felicis Ventures. But the company really hit the mother lode when Google bought it.

Is crowdfunding a game-changer for startups?

Facebook’s acquisition of the virtual-reality startup Oculus in 2014 for $2 billion brings up an interesting way for startups to raise money. In 2012, the two founders of Oculus raised $2.4 million on the crowdfunding site Kickstarter. As of January, there were 500 technology projects on Kickstarter,  PCMag reported. And crowdfunding has become popular for hardware and software startups alike. 

Crowdfunding site Indiegogo proclaims that crowdfunding can help founders validate their ideas and raise funds for prototypes and distribution. And some startups are able to raise big bucks through crowdfunding sites. Here are a few outstanding technology crowdfunding campaigns from last year: 

• Sondors Electric Bike: $5 million


• Micro Drone 3.0: $3 million


• Jibo Social Robot: $2.2 million


• Oomi Smart Home System: $1.7 million


• Neptune Suite: $1.1 million


• Opal Nugget Ice Maker: $2.5 million

Crowdfunding consultant Matt Ward conducted over 80 interviews with crowdfunding product creators, and found that “crowdfunding is the culmination of the lean startup.” So, why are startups trying to raise funds through crowdfunding rather than seed rounds? Most of the people he interviewed said that their biggest takeaway from crowdfunding was the backers because their feedback can define the product. And crowdfunding campaigns both shift and shape the direction of a company, Ward says.

In this space, equity crowdfunding may prove to be the real game changer. A few months ago, new rules allowed companies to offer and sell securities through crowdfunding. The new rules are part of a law President Barack Obama signed in 2013 called the Jumpstart Our Business Startups (JOBS) Act. Under the rules that went into effect on May 16, investors can buy shares of a company through an equity crowdfunding site. Prior to the rule going into effect, only accredited investors with a net worth of $1 million could buy shares through equity crowdfunding. Now, investors earning $100,000 can invest up to $2,000 a year. The JOBS Act will create $50 billion in available capital by 2020, according to Crowdfunder.

Since the rules went into effect, over $5 million has been raised for startups through equity crowdfunding, Entrepreneur reported. And Indiegogo plans to launch an equity crowdfunding site in the next few months. Indiegogo's 7 million backers of 650,000 campaigns have collectively raised almost $1 billion over eight years, so it just might be the catalyst to help really launch equity crowdfunding. 

Image credit: Pixabay

Earlier this month, Georgetown University did something many in the media found remarkable: It acknowledged its link to slavery. In an inspiring speech, Georgetown University President John DeGioia said the university "recognized the need to reconcile a painful part of our history: our participation in the institution of slavery and the benefit we received from the sale of 272 enslaved children, women and men from Jesuit plantations in Maryland in 1838." The slaves he spoke of, owned by the Jesuits, were sold to bring in much-needed funds to keep the university afloat. Included in the sale were a 2-year-old baby and a 13-year-old boy.

Now, more than 175 years after the sale, the university stepped up to acknowledge its controversial past. "This community participated in the institution of slavery. This original evil that shaped the early years of the republic was present here," DeGioia said emphatically, pointing toward the ground as if to convince his listeners.

Last year, as the story of Georgetown's controversial history began to spread, the university convened a working group. It was tasked with coming up with a recommended response. What steps should the university take, if any, toward reparations? What responsibilities does it owe the American public?

The end result was an attractive website detailing the history, the slaves' identities and the working group's 105-page recommendations. The recommendations basically came down to three possible steps:

• An apology to the descendants and the community at large for its involvement as a Catholic university in selling slaves to Catholic plantation owners;


• Outreach to the descendants of the 272 slaves (now roughly 600 people and to the community)


• Renaming of two buildings that had been named in memory of the men who had seen to the sale of the slaves in 1838..

A fourth option, giving descendants free (or reduced) tuition, was held in reserve by the president's office.

Not surprisingly, Georgetown's announcement received a fair amount of media coverage. So did the fact that the university was under considerable pressure for some months by faculty and students, who felt Georgetown should have acknowledged the history sooner. After all, more than a dozen other universities around the country, including Harvard and the University of Virginia, already admitted their inappropriate history. Why hadn't one of the country's oldest Catholic institutions?

When news of the forthcoming apology was finally announced from the university podium, the media gobbled it up. Georgetown's embarrassing history was soon to be put to rest.

What wasn't as widely published (and wasn't in the university's careful historical account of the revelations of its early history,) is the effort that some of the 600 descendants have undertaken to try to reach reconciliation with the university and its history. According to an account published by the Washington Post and later by a Georgetown alumnus, the small group asked to be included in the university's working group when it was being created. Their reasoning was simple: Who else would have a better insight into the impact of slave history and the practical means of reparations for this history?

According to several of the GU272 members (the self-appointed name of the organization), requests to be included in the working group were not acknowledged. And this month, the descendants revealed that it had asked the university to go beyond the apology, outreach and building renaming and help them start a foundation that would work toward "a common good" in recognition of the country's former history of supporting slavery. To that end, they asked the university to help them found a $1 billion foundation. They hoped that money would come from all of the institutions that had benefited from the slave trade, including Georgetown University.

But they didn't come to the table unprepared. The organization had already raised $115,000 of their own funds as seed money, an amount that reflected the original payment the university received for all of the slaves. In today's economy, it would be about $3 million.

Needless to say, the group was disappointed that the university didn't accept their idea.

"Our vision is not about reparations," Joseph Stewart, a member of GU272, told the Washington Post. "It’s not about getting anything that just benefits descendants. It’s about having an opportunity to have a common good.”

At a time when racial tensions are high in many parts of the country, and both educational institutions and law enforcement agencies are being called upon to justify their historical relationship with minorities, the group's proposal offers a sensible if not graceful way to encourage reconciliation on all sides.

Yes, Georgetown University did repudiate its terrible link to the slave trade. And it has offered some admirable steps that help recognize that history. They are admittedly all steps that the university will benefit from in student attendance if not in tuition.  But when the descendants of its victims ask for help to institute a legacy that in their eyes could help unite communities, doesn't it have an obligation to help? Shouldn't the voices of those descendants be included in deciding the steps to reconciliation? And who better to decide the vision that unification should be built on than the victims' communities?

Georgetown University's multi-layered plan will help ensure that the public can equate its owners' mistakes with positive investments. But my fear is that years from now, that plan may be remembered as a concession rather than a positive step to bring communities together.

Image: Flickr/Timothy Vollmer

This is a presidential race of many firsts, and not all of them are good. During Monday night’s debate between Donald Trump and Hillary Clinton, viewers tracking the candidates’ banter on social media noticed a company taking on the role of Politifact or FactCheck.org: Ford Motor Co. found itself defending its business practices while Trump lambasted the automaker for what he called the outsourcing of jobs to Mexico.

This was not the first time a company found itself caught in the middle of presidential campaign politics. Four years ago, the small appliance maker KitchenAid landed in the middle of a firestorm after a tweet sent from the company’s account during a presidential debate linked the Affordable Care Act (Obamacare) to the death of President Obama’s grandmother in 2008. And last week, Mars Inc. was largely applauded for its response after the Republican candidate’s son, Donald J. Trump, Jr., compared Syrian refugees to poisoned Skittles.

No company wants to be caught defending itself to the public thanks to the words of a presidential candidate. Push back too hard, and it alienates some customers. If the company sends a message that comes across as marketing or capitalizing in another way, other customers could become offended. But considering the fact that Politifact estimated only 4 percent of Trump’s statements are verified as true on average, while over half are false or “Pants on Fire,” Ford’s social media team saw few risks in stepping into Monday night’s fracas.

Trump’s piling on Ford is based largely on the company’s decision to manufacture more of its small cars in Mexico, including within a new $1.6 billion factory that has drawn plenty of Trump’s invective in recent weeks. The Donald has also long accused Ford of plotting to “fire all their employees in the United States” and move those jobs to Mexico.

The truth is far more nuanced. Ford argues it cannot make smaller automobiles at any profit unless they are manufactured in markets where the cost of labor is lower. But the Michigan-based automaker also said it invested $12 billion across its U.S. factories since 2011, and claims to have created 28,000 new American jobs over the past five years. Those statistics were posted during Monday’s debate by Ford, and were backed up by the United Auto Workers (UAW). The company also insists its cars, SUVs and trucks will continue to be made in the U.S. for the indeterminable future.

Monday night’s flap is another chapter in Trump’s struggles to reconcile both the facts, and his knowledge of the industry, with his statements about U.S. auto manufacturing. Last year, Trump claimed his rhetoric prevented Ford from building new plants in Mexico, only to be followed by news the company was moving forward on its plans south of the border. That policy was in contradiction to the company’s plans under former CEO Alan Mulally, who committed Ford to building smaller cars at its U.S. plants. But as profiled in the Wall Street Journal, Mulally's plans fell apart due to two-plus years of cheap gasoline, which nudged consumers to buy larger cars. Nevertheless, Ford continues to sign collective bargaining agreements with the UAW, despite some analysts’ complaints that those contracts will increase its U.S. labor costs in the long term.

Indeed, Mexico has surpassed Japan as the largest exporter of cars into the U.S. At the same time, American automakers have become a force in the nation’s economy once again. This recovery is in part due to the U.S. auto bailout started under George W. Bush, which Trump first supported, then the past year attacked, and now apparently supports again, as long as auto production moves to states outside of Michigan.

The bottom line is that the new Ford plant in Mexico will not have an impact on U.S. jobs. And contrary to Trump’s statements, this is not a recent announcement, as investors and industry analysts have known about this plant since last year.

Trump’s bad night, punctuated by sniffles and constant interruptions, will long be remembered for his defense of body shaming and his bizarre 400-pound hacker comment. But it also shows his refusal to understand and even articulate the issues, leading one company to set the record straight.

Image credit: Gage Skidmore/Flickr

By Christopher Barr, Aidil Fitri, Marcel Silvius, Woro Supartinah, Ginger Cassady, and Syahrul Fitra

Asia Pulp & Paper, one of the world’s largest pulp and paper producers, claims to have made a remarkable turnaround on sustainability. The company, owned by Indonesia’s Widjaja family, has a legacy of forest destruction, conflicts with hundreds of local communities, and an historic US$13.9 billion default on its corporate debt, the largest in emerging markets history.

Though the damage from that legacy persists, today APP receives a lot of positive attention for championing sustainability issues. Even the Forest Stewardship Council (FSC) says it may re-engage with the company. FSC previously disassociated with the paper firm in October 2007 for “destructive forestry practices," and a re-engagement would signal to conscientious commercial buyers that it may be okay to do business again with APP.

Recently, TriplePundit published six pieces written by Leon Kaye that highlight APP’s sustainability initiatives for its operations in China and restoration efforts in Indonesia. Indeed, since adopting its current sustainability policy in 2013, APP has deftly promoted itself as an environmentally responsible business. But it has done so in a manner that conveniently overlooks the fact that the company is again expanding its operational footprint in ways that are fundamentally unsustainable.

The company is building one of the world’s largest pulp and paper mills through its subsidiary PT OKI Pulp & Paper Mills in Indonesia’s South Sumatra province. And even before the mill starts production trials as early as October, the US$3 billion project has already caused considerable environmental degradation and social disruption, and there are compelling reasons to believe it will continue to do so for decades to come.

Significantly, APP is building the OKI mill without first establishing a sustainable wood supply. The new mill will depend on fiber supplied from acacia plantations predominantly developed on drained peatlands, which pose significant environmental impacts and financial risks, according to a report released by 12 international and Indonesian NGOs in April 2016.

When peatlands are drained for industrial plantations, they start subsiding and release tremendous amounts of carbon into the atmosphere. As is already happening on other pulpwood and oil palm plantations in Sumatra, the soil subsidence makes these areas increasingly prone to frequent and prolonged flooding, impacting productivity. Eventually, such areas become unviable for drainage-based commercial forestry such as Acacia plantations; and prolonged flooding may also impede any other commercial forestry or agricultural land-use, according to the findings of a Wetlands International report.

Catastrophic fires on drained peatlands

While the degraded peatlands are subsiding to drainage limits, they can easily catch fire and burn for long periods of time deep into the organic soil. This is what happened in 2015 when terrible fires blazed across Indonesia’s forests and peatlands, part of the fall out from developing one quarter, or 3.2 million hectares, of peat areas in Sumatra and Kalimantan for industrial plantations (pulpwood, oil palm, and rubber) since 1990.

The resulting haze caused over 100,000 premature deaths in Indonesia and neighboring Singapore and Malayasia, according to one recent estimate. The government of Indonesia said only 19 people died while acknowledging that at least 43 million Indonesians were exposed. The World Bank tallied economic losses in Indonesia from the fire and haze to exceed $16 billion, without taking into account economic losses in neighbouring countries. And the fires were similarly catastrophic for global carbon emissions levels. On the worst days the fires and haze emitted more carbon than the entire U.S. economy, and as an annual contributor topped Japan and Germany’s overall emissions.

Remarkably, over a third of all the high-confidence hotspots on the island of Sumatra occurred in four APP supplier plantations in South Sumatra that have been developed to supply the new mill. Each of those four concessions is at least 70 percent covered by peatlands. One concession, Bumi Mekar Hijau, was recently found guilty of causing fires in 2014 and faces a $6 million fine; the Indonesian government has not yet begun to prosecute cases related to the 2015 fires, which were much worse.

For APP, the threat of fines and culpability is on top of the extensive damage to its pulpwood base. A coalition of Indonesian civil society organizations estimated that the 2015 fires burned over 293,000 hectares within plantation concessions in South Sumatra affiliated with APP, including 86,000 hectares of planted Acacia -- or 26 percent of the group’s total planted area in the province. (To the best of the authors’ knowledge, the company has still not released its own estimates of the damage.)

In early 2016 APP announced that it will spend US$20 million on firefighting systems, and it has been implementing a program for responsible peatlands management. These remedial efforts are “too little, too late” when looked at next to the company’s expansion of pulpwood concessions on peat since 2000.

Indeed, APP has taken these actions well after the company and its affiliates cleared and drained hundreds of thousands of hectares of natural peat swamp forests, depleting biodiversity and effectively creating the incendiary conditions which allowed these areas to burn so intensely in the first place. Moreover, APP has done so just as it is putting the finishing touches on what may ultimately become the world’s largest pulp mill, a facility that will exert tremendous pressure on South Sumatra’s peatlands for many decades to come.

This disaster is not likely to end anytime soon. The authors anticipate that APP will have to find new areas for pulpwood plantations when its current plantations on peatlands become unviable. The wood supply gap can be expected to grow as a result of the peat soil subsidence and related flooding, which is likely to reduce productivity over time. Options to address these issues involve the large-scale rewetting of peatlands by stopping drainage and using alternative species that can grow on such rewetted peatlands.

APP is already trying out restoration and alternative species models, which is a positive step forward. If successful, however, these measures will probably result in lower productivity on pulpwood plantations, and, in turn, increase the pressure to expand the total plantation area. Much of this plantation expansion can be expected to occur, again, on environmentally sensitive peatlands and on lands that are claimed and managed by local communities, including indigenous peoples.

This unfortunate cycle of peatlands degradation and plantation expansion will be the way Indonesia’s peatlands are lost and global carbon emission levels continue to escalate. So when Leon Kaye writes a series of six pieces for Triple Pundit on APP’s sustainability and does not detail the real and anticipated impacts of the OKI mill (or even mention the project), he seems to miss the bigger picture in which APP’s sustainability campaign is situated.

Why is this dangerous?

A promising movement to make the private sector more sustainable is one of the world’s great hopes to curbing deforestation and global warming. The corporate sustainability community, which Triple Pundit serves, is doing remarkable things that encourage companies to adapt to more sustainable business models.

But there’s a big risk when a company’s reputation improves a lot faster than its actual behavior merits. PR campaigns are easier and faster to orchestrate than field activities are to implement, so this is an understandable, though dangerous, situation.

In the case of APP, the enthusiasm generated from its corporate sustainability initiatives has distracted from sober reflection about the group’s expansion plans. And so three years into its sustainability campaign, the OKI mill is about to expand APP’s wood demand in Indonesia by nearly 75 percent; the company has only resolved a handful of the hundreds of land conflicts it has with local communities; and two thirds of its plantation areas remain on high carbon peatlands and are not sustainable in the long term.

The speed and scale of the OKI mill expansion signals to the authors that APP’s sustainability campaign may have helped the company to resuscitate its image, but it has not changed the underlying business calculus driving the company’s operations. But what will happen when the demands of business diverge from sustainable best practices? How will the company react, for example, when the sustainability policy makes it hard to find enough low-cost fiber to “feed” its three mega-scale pulp mills in Indonesia?

And though the company claims it will prioritize its sustainability commitments, the OKI mill project involves a capital investment of US$3 billion in high-tech machinery and port infrastructure, much of which has been financed by loans from the China Development Bank. By contrast, APP’s Forest Conservation Policy is a set of stated intentions and targets. When the company’s loan payments come due, which will prove more durable?

Image credits: 1) Hutan Kita Institute; 2) Courtesy of Marcel Silvius

Christopher Barr is Executive Director of Woods & Wayside International. Aidil Fitri is Executive Director of Hutan Kita Institute in South Sumatra. Marcel Silvius is Programme Head of Wetlands International's Climate-Smart Land Use. Woro Supartinah is Executive Director of Jikalahari and a member of Eyes on the Forest. Ginger Cassady is Campaign Director of Rainforest Action Network. Syahrul Fitra is a legal researcher for Yayasan Auriga. 

The organizations that contributed to this piece were among the twelve that released a report in April 2016 called “Will Asia Pulp & Paper 
default on its ‘zero deforestation’ commitment?”