How Much is Enough?

In March 2010 I sold my house and moved into a downtown apartment.  One of the reasons for moving was to downsize my footprint.  I wrote about this in a 2-part blog post (Downsizing Part I and Downsizing Part II).  At the time of the move, I got rid of at least 50% of my possessions and felt some relief from the burden of having too much stuff.

Fast forward to October 2011.  I've now been in my apartment for 18 months and I've probably only touched/used 50 percent of what I moved from my house to my apartment.  Fully 1/2 of everything I moved sits in cabinets, a storage locker, closets, and drawers untouched from the day I moved.  Yet, I am still challenged to get rid of it.  What is this attraction to our stuff?

As you know, the sustainability mantra is reduce, reuse, and recycle.  These actions are listed in decreasing orders of environmental impact because never buying and using something is far better for the environment than buying it and reusing it, or buying it and recycling it at the end of its life.

As I'm writing this I'm thinking about the events at Occupy Wall Street.  I understand the need for change and yet the question is in what direction?  If we have full employment and a global consumer society we'll destroy the biological systems that make life possible.  The "system" is driving all of us to work, work, work and consume, consume, consume yet that isn't leading to the world we both want and need.

The good news about downsizing 18 months ago and the ongoing realization that I still have way too much stuff is that I'm not buying anything.

I already have enough - And less stuff is actually more fulfilling after you've got the basics covered.

Now we just need to figure out how to have a successful economy that isn't based on unsustainable and unsatisfying criteria.

Culture of Insatiability

Our economic system is broken. We are all tied into a system that creates lots of stuff while it destroys the environment and wreacks havoc on our lives.

The system forces us to work too much. The system forces us to compete with each other for basic necessities like food, shelter and health care. The system is destroying the fragile biosphere upon which our lives depend. The system often destroys communities. The system places the love of money above all others. The system has compromised our democracy and our ability to self-govern.

These are symptoms, not root causes.

The system is on auto-pilot (no one is in charge) and each of us dutifully do our little part to keep the system going. We work, we vote, we pay taxes, we work, work, and work some more.

We are part of a system that believes it has no limits. No limits to economic growth, population growth, having more, living longer, and even being more.

We live in a culture of insatiability and as long as we remain insatiable, we have no choice but to work, work, work leading to a life of destruction.

In this culture of insatiability and discontentment, we never find lasting satisfaction. Is there a wonder where our stress and unhappiness comes from?

Changing this system is a profound challenge however, I see no alternative as this system will grind on until the salmon are dead, the glaciers have all melted, and all of us are working hard to compete against our neighbors. There has to be a better way. Our challenge is to find a new way. This won't be easy but nothing short of a new way will save us.

I believe the first step is to decolonize our minds. We've all grown up believing this is the way and there is no other. That is a mental model that must be challenged.

One book (and author) I'd highly recommend to begin this journey is Ishmael by Daniel Quinn. If you haven't read Quinn, you really ought to. If you've read Ishmael, I highly recommend the other books and writings by Quinn. He really does offer a comprehensive view of sustainability that is often difficult to see with the voice of Mother Culture constantly singing in our ear.

Sustainable This and Sustainable That

A recent triple bottom line Google Alert I've set up led me to a blog about "Sustainable Museums." Additionally, the sponsored links (advertisements) on the email had a promotion for "Sustainable Post-it Notes" and another one for "Sustainable Jobs."

I'm not trying to disparage these folks though do you see the problem here?

Before some public speaking events I've been introduced as the founder of TriLibrium, a "sustainable" CPA firm.

Can a business or organization be sustainable inside an unsustainable culture? Are there sustainable jobs in an unsustainable civilization?

Because I'm a stickler for precise language when it matters, I've had to correct the well-meaning introduction calling TriLibrium sustainable. TriLibrium is sustainably-driven and eco-conscious but I have no idea whether we are sustainable.

I've heard people refer to certain farming practices as sustainable. Really? Over what time frame and under what circumstances. Will these "sustainable" farms hold up over 5 generations? What about 500 or 1000? If not, are they really "sustainable?"

I'm sick of hearing "sustainable" used as if it is a condition already achieved. We should all be driven towards sustainability since the problems with unsustainable practices will certainly wreck havoc on us and our offspring. However, I don't think anything inside our current system is "sustainable" since our cultural system clearly isn't.

I hope you'll join me in educating all the companies who call their products or services sustainable.

Downsizing (Part II)

In my previous post on Downsizing I discussed my move to a smaller home and how I'm shedding over half my possessions. I found an apartment and am moving Monday. The anticipation of being free from my possessions is exhilarating.

The reason I bring this up is not to put myself on some kind of pedestal, but rather to point out just how against the grain this act is. The "American Dream" is about more and more and more (stuff). At a cost of less and less time, love, education, health, freedom, self-determination, joy, etc.

The path to sustainability is about more and more and more time, love, education, health, freedom, self-determination, joy, etc. and less and less stuff.

I venture to guess that probably 90 percent of my U.S. readers have more than enough stuff. Are you better off with all the stuff?

I'll be honest, more stuff makes me less happy. Sure, acquiring new stuff temporarily gives me what I call a "Costco" high, but the thrill is gone in such a short time and then the long-term burden of ownership (maintenance, storage, insurance, moving, repair, disposal, etc.) kicks in.

Sustainable Business Resources

I was recently interviewed by Jennifer Woofter, the Founder and President of Strategic Sustainability Consulting, for the free podcast series they offer on sustainability. In my interview, we discuss a number of issues including how accounting fits into the sustainability field.

Strategic Sustainability Consulting is building a very nice library of bite-sized podcasts on a wide variety of topics pertinent to sustainable business, including renewable energy options, carbon regulation, sustainable design and more. I’d especially like to direct you to the podcasts on Green Business Travel with Kim Allen and Green IT with Jessica Vreeswijk, both Bainbridge Graduate Institute (BGI) alumni. Jennifer and the team at Strategic Sustainability Consulting add a new podcast every week or two so check back frequently for new topics from sustainability experts.

As you know, sustainable business is the new and emerging paradigm. The folks over at ISSP (International Society of Sustainability Professionals), of which I am a member, are offering a Professional Certificate in Sustainability. You can take the individual courses ala carte, or select the appropriate courses to obtain the certificate if you’d like. Many of the instructors are top professionals in their field. People like Darcy Hitchcock, Marsha Willard and Tom Gloria, to name a few of the ISSP instructors, are both practitioners and teachers. I bring this up because there is a course on Life Cycle Assessments beginning in August that one of us from TriLibrium will be attending.

Spreading the Word

I spoke last week at the Western Regional Conference of the American Accounting Association. This was a group of accounting educators and researchers, most of whom hold PhDs and teach accounting to college students.  My talk was on Sustainability and the Triple-Bottom Line.

Since you are reading this blog I suspect you have an interest in sustainability.  Living in Portland and working in my regular circles, I usually assume a fairly high base level of sustainability knowledge in the people I meet.   Maybe you do as well. 

However, when I lecture or teach classes on sustainability, I’m typically shocked at how low the level of understanding is regarding the issues driving the need for change.  For example, I typically include something about peak oil as one of the phenomena driving change.  At this point, I usually ask the audience if they’ve heard of peak oil in order to gauge how to proceed with the discussion and I’m usually shocked that only 5-15 percent of the people are aware of peak oil.  No wonder change is happening so slowly.

While simply knowing this information isn’t usually enough to drive change, it is an important first step.  Accordingly, we must find ways to engage with more people, outside our normal boundaries.  I am going to schedule more classes and presentations so I can get out and engage more people.

Please contact me if you would like me to give a presentation or teach a class in your area or to your firm, or if you need help developing your own presentation so we can go out and help business leaders understand the urgent need for change.

Classes for CPAs and business advisors

During May and June I will be teaching two classes which will qualify for Continuing Professional Education (CPE) credits for CPAs:  

• Sustainability for CPAs: What it means to you, your clients and the profession
• Advising the Startup Business

Both courses will qualify for 4 hours of CPE.  The classes will be offered in Portland and Lake Oswego.  The CPE sponsor is BrownBagCPE, a local group that provides live and affordable CPE in Oregon and SW Washington.

The feedback from the Sustainability Course has been outstanding.  Please contact me if you would like more information or have an interest in having this class taught in your area.

Last week I had lunch with a salesman from XYZ Company seeking TriLibrium's business.  XYZ Company is probably ranked third in an industry dominated by two giants. 

As I was looking at his card while getting ready to send a thank you note, I was thinking about XYZ Company as a business and my thoughts were: 

1.       Why should I care about XYZ?

2.      It must be a tough and competitive market battling the two giants, especially when you compete on price.

3.      What are you doing to be sustainable?

I sent my thank you and included the following note:

“… I was thinking about XYZ and your business strategy and how a company like yours could benefit by embracing sustainability as a strategic business driver.

The market place is rapidly changing and I believe the future will NOT resemble the past. 

·         Your next generation of employees (Gen Y) care deeply about who they work for and the values of the company

·         Your customers care about this as well and will be increasingly, at least partially, basing their decisions on these factors

·         Sustainability is an excellent differentiation strategy.  Do it now and be a leader, do it later and you will inevitably play catch up forever.

·         Managing carbon emissions and the cost of polluting will be rising and is likely to be regulated.

·         “True” sustainably driven organizations have the highest relative market values

In many ways, sustainability and traditional business and management approaches are as different as night and day.  Appending the strategic plan with “green” practices is helpful, important and appreciated, but ultimately doesn’t go far enough.

I think every business has an opportunity to embrace sustainability as a strategy.  Sustainability has the ability to be a disruptive business innovation and in that environment, you are either a leader or you risk being left behind. …”

As readers and visitors to this blog, I would appreciate your thoughts and comments. 

 

“True” Commitment

I’ve been writing about the A.T. Kearney report that discussed their findings that the market rewarded “companies who show a ‘true’ commitment to sustainability.”  What is a ‘true’ commitment to sustainability and what does that look like?

To me, using sustainability as a strategic driver means you make that focus primary.  Making money and being financially sound are also important but if they become the primary focus or raison d’etre, I believe you’ll make short-term decisions and when the two conflict, you’ll likely make the wrong choice.

Another sign of “true” commitment is leadership and a continuous drive for improvement.  I toured Rejuvination's manufacturing facility this week and learned that they sit down each year and evaluate all areas of their business to ensure they are using the current best practices.  Is there a better chemical, process or material they should be using, if so, they change.  

One thing I’m beginning to use as a criteria between a deep and real commitment to sustainability and a lesser, questionable commitment is the greenhouse gas (GHG) inventory.

No GHG inventory and no plans to do one = Questionable commitment.  Are they just greenwashing?

Taking action to minimize your waste stream is important. The largest and arguably most dangerous waste streams are your unseen and unmeasured carbon emissions. 

Dr. James Hansen, the NASA scientist and climate expert, recently wrote that “our planet really is in peril” as a result of our carbon emissions.

Will 2009 be the year you do your GHG inventory, or are you prepared to be accused of greenwashing and lose your brand and market position?

Greenwashing

Yesterday I wrote about the A.T. Kearney report that discussed their findings that the market rewarded “companies who show a ‘true’ commitment to sustainability.”  What is a ‘true’ commitment to sustainability and what does that look like?

Let me start with a true story about a ‘fake’ commitment. 

I was recently introduced to an executive for a ‘green’ online website.   I was excited to meet her based on her business card and initial ‘image’.  I visited their website before our meeting and could immediately smell a fake.

Visiting their website I could instantly tell they didn’t get it.  While it was an aesthetically pleasing site with the appearance of some good branding, it was clear they didn’t get sustainability and I predicted failure.

•  They were promoting consumerism
•  Their online articles were fluff
•  There was no information about who they were, where they were located or an easy way to contact them
•  There was nothing about their story
• Nothing about their commitments or goals to social justice or sustainability
•  There was nothing there to make me care

I met with the executive and shared my thoughts in a polite manner.  I sent her a mini report after our meeting and here is part of her email response:   

“I Know, I know, we aren't transparent and all the other stuff you mentioned...but in this economy it is all about making money.”

I stand by my prediction.

While a company like this may temporarily grow, it won't be sustained as savvy consumers really figure out the motivations, and how sustainable is that?  A failing company takes lots of people down with it including vendors, employees and investors.

More to come tomorrow.

Green Winners and Real Sustainability

A recent report by the consulting firm A.T. Kearney found that “companies who show a ‘true’ commitment to sustainability appear to outperform their peers in the financial markets.”

Two key takeaways for me were the advantages derived from long-term thinking and that this premium value is only created by a “true” commitment to sustainability. 

Long-term thinking was 5+ years for public companies.  I guess that is an improvement for business leaders who have been primarily focused on quarter to quarter results.  But is this really the appropriate time horizon for sustainability?  No way!

I caution people about the use of the term sustainability.  It is a goal to strive for, but I believe true sustainability needs to be determined over the course of at least a few generations, if not centuries or millennia, and it is therefore misleading to say ______ IS sustainable.

Canada and many other countries actually have standards related to environmental claims.  Here is the standard for Canada:

The concepts involved in sustainability are highly complex and still under study. At this time there are no definitive methods for measuring sustainability or confirming its accomplishment. Therefore, no claim of achieving sustainability shall be made.
CAN/CSA-ISO 14021, Clause 5.5

According to Arie de Geus in his book the The Living Company, the average lifespan of Fortune 500 companies he studied was 40-50 years.  From birth to demise, whether the end comes in the form of failure, merger, being acquired or broken into pieces, the average was under 50 years.  It is well known that start-ups have an even higher mortality rate.  One study of Japanese and European firms, regardless of size, indicated an average life of just 12.5 years.   How sustainable are those numbers?

The book went on to highlight the attributes of companies who have been around for over 300 years.  There are actually companies operating today who have been around for over 700 years! Now that is starting to look sustainable.

In studying these long-lasting companies, four common traits emerged as important factors: 

1.       They were sensitive to their environment

2.       They were cohesive, with a strong sense of identity

3.       They were tolerant

4.       They were conservative with their financing

That last one seem particularly important right now.

Tomorrow I’ll comment about the report’s findings on the commitment to “true” sustainability.

A Hopi Elder Speaks

"You have been telling the people that this is the Eleventh Hour, now you must go back and tell the people that this is the Hour.  And there are things to be considered . . .

Where are you living?
What are you doing?
 What are your relationships?
Are you in right relation?
Where is your water?
Know your garden.
It is time to speak your Truth.
Create your community.
Be good to each other.
And do not look outside yourself for the leader."

Then he clasped his hands together, smiled, and said, "This could be a good time!"

    "There is a river flowing now very fast.  It is so great and swift that there are those who will be afraid.  They will try to hold on to the shore.   They will feel they are torn apart and will suffer greatly. 

    "Know the river has its destination.  The elders say we must let go of the shore, push off into the middle of the river, keep our eyes open, and our heads above water.   And I say, see who is in there with you and celebrate.  At this time in history, we are to take nothing personally, Least of all ourselves.  For the moment that we do,  our spiritual growth and journey comes to a halt. 

    "The time for the lone wolf is over.  Gather yourselves!  Banish the word struggle from you attitude and your vocabulary.  All that we do now must be done in a sacred manner and in celebration. 

    "We are the ones we've been waiting for."

-- attributed to an unnamed Hopi elder

Hopi Nation

Oraibi, Arizona

What We Measure Matters

The most important number to the powers that be is the GDP. The GDP is how Wall Street and the government measure the health of our economy but this number is seriously flawed for two important reasons.

First, it measures negative events as positive additions to GDP - Car accidents, divorces, and oil spills all add to the GDP.

Second, it fails to include or account for positive activities if money doesn't change hands - taking your neighbor to the doctor doesn't count while hiring a stranger to drive a cab does. Which do you think makes a better society?

As an accountant, I'm keenly aware that what we measure matters. In my MBA program, I really appreciated the work of Mark Anielski, an Adjunct Professor at the Bainbridge Graduate Institute and the author of The Economics of Happiness. Mark has developed a "Genuine Wealth Indicator" that can help any community measure its wealth across a number of indicators in order to measure those things we actually want.

We need new measurement tools if we are going to achieve sustainability. It is high time we stopped using GDP as a tool to measure our economic progress.

Truth and honesty

We are all part of a system that is devouring the world. We know this to be true yet we deny it.

I saw an interesting quote the other day regarding truth:

There is the truth of authority and there is the authority of truth.

Which one do we believe when they conflict? Unfortunately, I think most of us follow the truth of authority.

While we know continued economic growth is a problem and that our consumer based take-make-waste culture cannot be sustained (authority of truth), we all listen to authorities (Governments, President Obama, mainstream economists, bankers, media moguls, corporations, etc.) who tell us otherwise and offer us more of the same solutions. Do we really believe we can grow our way to peace, prosperity and sustainability?

Morpheus, in the movie The Matrix, offers Neo a choice between a red pill and a blue pill. The red pill will allow Neo to see the truth while the blue pill will allow him to continue his life in ignorant bliss (Ignorant of his own slavery). When given the choice, do you live on in ignorance (and potential bliss) or do you lead what Aristotle called 'the examined life'...

If we keep doing what we are doing inside the same system, we will continue to get the same results. This is the truth. Are we being honest with ourselves?

How do you source your copy paper?

Yesterday I had to print some handouts for the course I taught on Sustainability for CPAs. Our office is primarily paperless so buying copy paper isn't something we do very often but I purchased three reams for us to have on hand.

And here is the cool part. The paper we purchased was FSC-certified made from 100% post-consumer waste. It was manufactured using Green-e 100% Certified Renewable Energy (from biomass), and processed chlorine free. This paper is made without cutting down any trees or creating any additional green house gases.

And guess what? The manufacturer is Gray's Harbor Paper manufactured right here in the northwest (Hoquiam, WA). This is a locally owned company that closes the recycling loop by taking our local paper waste and turning it back into paper. I think everyone in the northwest should be buying their paper. Here is a great story about the company and their impact on the community.

Too much of the paper we recycle in the northwest is shipped across the ocean to China where it recycled using dirty coal-fired plants like the one pictured above then shipped back to us at enormous environmental costs. Harbor 100 should be the paper of choice for any northwest firm interested in sustainable economies.

More Than Money

I was at BGI this weekend where I help teach accounting and finance. Mark Albion, the former Harvard Business School professor, best selling author, and founder of Net Impact was there. I had met Mark before and found his book True to Yourself — Leading a Values-Based Business, and personal life story, inspiring as I ventured out into the real world with my MBA.

Mark's new book is called More Than Money: Questions Every MBA Needs to Answer and he was again talking about the importance of a creating a life of meaning. As an MBA, I have a lucky lottery ticket and the question is, what should I do with my lucky ticket? The cultural expectation is to cash it in for money and status, but is that really fulfilling? To me the answer is no.

Mark told the story of how he used his MBA skills to help a small scale fisherman. You can see that story here in a 3-minute video I hope will prompt some discussion and thought about sustainability, business and life.

Bullish on Sustainable Business

Our accounting firm is in the process of adding staff which means we are growing. As a new firm, it would be hard to get any smaller but still, I remain bullish on the market sectors and business organizations committed to sustainability.

Why in the face of continued negative economic forecasts am I hopeful? Because I know that humans have and will always have an economy and that the green economy is the economy of the future and will continue to grow accordingly.

While the old economy is changing, the leading green edge is vibrant. For example, here is a recent report showing LEED building starts are up five fold. Here is another story about a research report showing that 2009 will be a good year for green IT. I also suspect part of Barack Obama's economic plan will include a huge capital infusion towards building the green economy of tomorrow.

I meet every day with business owners and entrepreneurs. All of them are concerned about the economy while simultaneously excited about the future. Our job, as business leaders, is to remain hopeful and to build the types of triple-bottom line organizations we will need in the emerging economy.

Sustainable Networking

I have been a member of a couple networking groups and have visited numerous different ones over the years. These networking groups can be an important marketing and sales element of a business plan for small to medium size organizations. These groups usually allow just one representative from each industry who then provide leads to each other.

One problem with most of these groups is the dearth of like-minded green businesses, since this is not a criterion for membership. Fortunately, that is starting to change and I’m hoping this post will encourage others to start green business networks in their communities.

First, a little background. I helped start a “green” networking group here in Portland back in 2002. I was selling B2B in the progressive community and saw a real need for values based businesses to connect efficiently and economically. Informally, with folks from the ReDirect Guide and others, we started our own green networking group to make it easier for like minded folks to connect.

Our group was informal, with minimal dues (we asked everyone to throw in a few bucks each meeting) and met every other week at a locally-owned progressive restaurant. Everyone present got a chance to give a 30-60 second introduction and promo for their business before we’d feature a 10-minute in depth talk by one of our members. This group successfully served its function of helping all of us obtain more business.

That group has since dissolved but I recently joined a similar group here in Portland called Bridges, a green business networking group. Bridges is a bit more formal and structured but the key here is that the group uses sustainability as the primary screening tool for every member. Besides myself, Bridges has a green financial planner, physician, acupuncturist, builder, insurance broker, mortgage broker, real estate agent, graphic designer, marketing consultant, life coach, computer tech, geologist, and a real estate appraiser. This group is vibrant and growing.

It is really easy to start a networking group and I would encourage green business leaders to get one started in their area. Feel free to contact me if you need any help and/or post ideas and suggestions here to help others get started.

Business networking groups are a great way to learn, share and grow as a community. There should be green business networking groups across the country.

Health, Happiness and Sustainable Business

BGI Founder and President Emeritus Gifford Pinchot will be giving an address at the Green Festival in San Francisco next week entitled "Health, Happiness and Sustainable Business: The Happo/Dammo Ratio." I bring this up because Gifford's Happo/Dammo ratio is onto an important aspect of sustainability. Here is what Gif has to say:

The purpose of the economy is to support our health, well being and happiness. Unless we find ways to produce substantially more happiness with far less stuff and damage, our civilization is doomed. But this is a happy task, a joint project of sustainability experts, entrepreneurs, consumers, citizens, corporate innovators, academics, legislators and policy wonks. Given that most happiness comes from relationships and most of our consumption uses stuff symbolically rather than for its intrinsic value, it won’t be hard to make 1,000 fold improvements in the ratio of happiness to stuff. These innovations will often be very popular, cost-effective and profitable. In this direction lies hope and true prosperity.

Our current economy is driven by a take, make, waste consumption cycle and as long as we stay in this paradigm the future looks bleak. However, as Gifford correctly points out, we have an incredible opportunity to expand our economy by figuring out how to increase happiness while decreasing stuff. We have an unlimited and endless supply to provide comfort, joy, laughs, smiles and support. These have no environmental or social costs.

The cycle of giving support/getting support/giving support is an endless human cycle that has been around as long as humans have walked the earth. It was the basis for tribal economies. Maybe we can learn something valuable from an economic system that has been around for 100,000 years.

Tax breaks for the green community

The latest tax bill has some nice benefits for the sustainability community to help us green our economy. For instance, starting in 2009, employers can give bicycle commuters a tax free fringe benefit of up to $20 per month to cover the cost of pedaling to work including repairs, storage, accessories and even the cost of a bike. Employers and employees should act now to put this in place starting January 1st.

Also, the credit for residential energy saving improvements will return in 2009. The 10% tax credit has been expanded to include biomass fuel stoves as well. You may want to delay the installation of skylights, windows, outside doors and high-efficiency furnaces, water heaters and central a/c units until next year in order to claim the credit. This credit will be on the books through 2017 so you can use it in 2010 and beyond if you don’t get your project done next year.

One of the challenges for the alternative energy market is financing, and tax policies can make or break projects. Trying to determine long-term cash flows with unpredictable tax policies makes the challenge even harder so it is good news that many existing energy tax breaks have been extended:

• Coal and wind energy credits as well as the biodiesel credit have been extended through 2009.
• Energy credits for biomass and landfills lapse after 2010, as will a new credit for energy from waves and tides.
• The 30% solar energy and fuel cell credits however get a long-term extension through 2016. 
• The residential solar credit also lasts through 2016, and the $2,000 cap is repealed. 
• The law that allows commercial realty to expense energy saving improvements will run through 2013.