The Clean and Green Club

So many books about the need for change are nothing but doom-and-gloom. Focusing on the successes, Ethical Markets: Growing the Green Economy by Hazel Henderson (with Simran Sethi) (Chelsea Green, 2006) is fundamentally about hope.

Mind, there’s plenty of information in these pages about the world’s problems and the consequences of doing nothing. And lots more about the way government and business collude to skew the system in favor of the traditional model (such as unsubsidized solar and wind energy having to compete against heavily subsidized oil, coal, and nuclear, and lifecycle costs such as disposal transferred from the manufacturer to the consumer). But the book profiles dozens of entrepreneurs in both the business and service sectors who have found a way to help humanity address that raft of problems. If the entire world adopted the solutions modeled and piloted by these visionaries, it would go a very long way toward reversing negative climate change (a/k/a global warming)…reducing poverty…creating economic support systems that lift up not only the middle class but also the very poorest–and do so without government handouts.

Henderson, whose many websites include EthicalMarkets.com, has been taking a leadership role in the environmental/activist/ethical investor sector for decades (I have a book of hers that was published in 1978; this book is based on a PBS TV series she produced.

The ultimate message is that we, not only as consumers but as citizens (yes, there is a difference!) can impact the world of business and shape it away from the rigid single-bottom-line, profit-at-all-costs model popularized by economists like Milton Friedman, in favor of a more humanistic triple-bottom-line approach that is shaped to benefit all stakeholders, not just those who happen to own stock.

Ironically, but perhaps not surprisingly, socially responsible companies tend to perform better. As I discuss in my own award-winning sixth book, Principled Profit: Marketing That Puts People First, and as Henderson points out over and over again, these companies are better managed, they’re not embroiled in costly lawsuits, and they’ve made strides to reduce their own environmental footprint in ways that actually lower costs.

And Henderson tracks probably hundreds of ways that this attitude has filtered from the hippie pioneers of the 60s and 70s into the mainstream business world–not only through the successes of companies that were built from their founding on social and environmental responsibility (e.g., Greyston Bakery, Grameen Bank), but also in how this ethic is slowly spreading into even the largest of traditional businesses, even to the likes of auto companies, oil companies, General Electric, Wal-Mart, and so forth.

The book is wide-ranging, with chapters covering not only the obvious (energy, environmental impact, fair trade) but also the pervasive areas of society that need to–and are starting to–shift (health and wellness, joy at work, investing). Henderson identifies four pillars of socially responsible investing (a field where she has had major influence through her work with Calvert and other organizations): social and environmental screens, community investing, shareholder activism, and socially responsible venture capital. She also wants us to place economic value on “the love economy” (work done for free, in the home or as volunteers).

In short, despite the mess we’re in, many, many trends are positive. She even finds support in the writings of those two writers whose works have often been used to justify the worst aspects of the corporate oligarchy: Adam Smith, 18th-century author of The Wealth of Nations, and Charles Darwin, 19th-century author of The Origin of Species.
A few specific examples of positive change among the many she cites:

• Socially responsible investments in the U.S. and worldwide now total $2.3 and $5 trillion, respectively
• Socially screened companies outperform the S&P 500 and similar indices around the world–and that may have something to do with why socially responsible mutual funds grew 156% in five years (to $32 billion) while that market as a whole grew only 22%

• In Brazil, about 1/3 of the nation’s GDP is accounted for by companies that have joined an ethical-principles umbrella organization–and the country’s celulosic (i.e., not from diverted food sources such as corn) ethanol production has made it energy self-sufficient
• Fair-trade coffee consumption in the UK multiplied 400% from 1998 to 2005
• Green venture capital is growing at 36% per year; wind power is growing at 29% per year; solar grew by 63% from 2004 to 2005, and countries such as China are becoming major players (very hopeful for those of us who worry about the environmental disaster that would happen if China adopted traditional, polluting, resource-hogging technologies to achieve Western living standards)
• At least some clothing companies have rejected sweatshops in favor of production that is certified under the Social Accountability 8000 standard (mentioned in a profile of one of those companies, Eileen Fisher)
• Technology exists to supply all the power California currently generates with traditional powerplants, just by switching four percent of the state’s vehicles to fuel cell power
• Shareholder activists have achieved numerous victories, from switching McDonald’s off polystyrene containers to getting Home Depot to carry sustainably-forested wood