Sustainablog

This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.

7.5.05

A New World of Opportunity: Can business reap profits, eradicate poverty and solve environmental problems by turning the poor into consumers?

Cover Story
A New World of Opportunity
Can business reap profits, eradicate poverty and solve environmental
problems by turning the poor into consumers?
by Phil Storey

More Cover Story Articles
Eradicating Poverty through Profit

A black-and-white photograph of two elephants, each with a person perched
on its back, winding their way through a forest in rural India. Professor
C.K. Prahalad likes to begin presentations by showing this picture to the
audience and asking them what they see.

“Everybody looks at elephants running around in the northeastern part of
India,” he says.
“That’s one image. What they’re carrying is more interesting. They are
carrying electronic polling booths. In 2004, India went through a massive
election. Four-hundred-and-fifty million people voted; 1.5 million polling
booths—all of them totally electronic. And we haven’t done that yet here.”

This is a metaphor Prahalad likes to use to challenge common assumptions
about the developing world: When we look at the billions of poor people in
China or India or other developing nations, do we see the elephants—poor
technology and infrastructure, abject poverty and disease? Or do we see
the electronic voting booths—innovation and opportunity for technological
leapfrogging? Understanding and leveraging the business possibilities in
serving the world’s poor while giving them economic opportunity is the
subject of Prahalad’s latest book, The Fortune at the Bottom of the
Pyramid: Eradicating Poverty through Profit.

Seeing beyond the curve and identifying industry-changing strategic
concepts is nothing new for Prahalad. In 1994 he and Gary Hamel changed
how businesses conceive themselves by introducing the concept of “core
competencies” in their best-selling book, Competing for the Future. At the
time, BusinessWeek wrote that Prahalad “may well be the most influential
thinker on business strategy today.”

And he hasn’t slowed down. In the last decade he has continued teaching at
the University of Michigan’s Ross School of Business, consulted with some
of the world’s top companies, written numerous articles in business
journals and started his own technology company. In fact, The Fortune at
the Bottom of the Pyramid was Prahalad’s second book to come out in 2004.
BusinessWeek identified his first, The Future of Competition: Co-Creating
Unique Value with Customers, co-authored with Venkat Ramaswamy, as one of
the year’s 10 best business books.

Lifting the Bottom of the Pyramid
Prahalad opens The Fortune at the Bottom of the Pyramid with a simple
proposition: “If we stop thinking of the poor as victims or as a burden
and start recognizing them as resilient and creative entrepreneurs and
value-conscious consumers, a whole new world of opportunity will open up.”
The new world Prahalad sees includes profits for corporations and growing
prosperity for the poor. Prahalad’s goal is to turn the economic pyramid
into a diamond, lifting the bulk of the population into the middle class.
Clearly he’s not tinkering around the edges of business and development
strategies, and he spends the rest of the book making a solid case for the
viability of his model, as well as outlining principles and guidelines
from the success stories he uses.

The basic argument of the book is that traditional development
strategies—carried out by governments and non-governmental organizations
(NGOs)—have been ineffective in alleviating large-scale poverty, and that
the advanced business systems of the developed world haven’t tried to
engage the poor in a sustained and smart fashion. As a result, despite all
our technological and managerial capacity, the poorest pay a premium for
basic products and services (such as paying a 500 percent interest rate to
local money lenders), and pervasive poverty remains as large a problem as
ever.

In the book, Prahalad sets about dismantling misconceptions, relating
examples from throughout the developing world across a wide range of
industry sectors (see inset: Case Studies) and identifying principles for
success. Rather than trying to sell stripped-down versions of products and
services designed for affluent western consumers, companies need to
reinvent what they offer in ways that deliver greater performance at lower
prices. Even more challenging, companies will have to create markets at
the bottom of the pyramid, not just enter them—developing the range of
conditions (an economic ecosystem, as Prahalad calls it) that allow people
to act as consumers. Even in the face of such challenges—in fact, because
of them—Prahalad asserts that companies that successfully engage the
bottom-of-the-pyramid market will not only profit, but also reap the
rewards of unprecedented learning and innovation.

In December, at a conference organized by the World Resources Institute in
San Francisco called “Eradicating Poverty through Profits,” green@work
spoke with Prahalad about these concepts.

The subtitle of your book is a pretty bold statement of what you think is
possible. What do you think the rate of change can be?
I think countries that are moving in this direction, within my lifetime
will change the composition of poverty. For example, there are only two
countries that have a long shot at meeting the millennium developmental
goals. One is China, the other is probably India. Why is it happening? It
is because the private sector is actively engaged. It may happen in South
Africa, but it is more difficult. I believe that the more we think about
the private sector as a partner in the developmental process, the more
likely we are to win. But the more we keep it out of the developmental
process, the chances are higher that it will not happen. Because we’ve
tried that for 50 years. It hasn’t worked.

What puts companies is a position to take advantage of the
bottom-of-the-pyramid market?
I say you better pay attention to three A's: access, availability and
affordability. If you look at the ITC case or if you look at the ICICI
case (see inset: Case Studies), it’s all about providing access to poor
consumers—to either financial services or global markets. Making it
affordable by fundamentally reducing the cost of both the manufacturing
and distribution of products and services. And third, it’s easily
available. You don’t have to trek 40 miles to go and get it. If you look
at Aravind Eye Hospital, or if you look at Jaipur Foot, if you look at
cardiac care, telecardiology—all of them are breaking down the entire
traditional system to make sure at least those three tests are met. At the
same time, you have to create world-class capabilities.

I do not start with the assumption that you can have two levels of quality
in healthcare. The poor people need as good quality as the rich people.
They hurt just as much. You have to start by saying, how do we get
world-class quality, and at lowest cost possible? In a funny way, if you
think about, this is exactly what Wal-Mart has done for the United States.
Now everybody can buy a DVD player, because it’s at $29 or $39. If it was
at $500, fewer people could afford it. Do they have to build a global
supply chain; do they have to source it in China and India and all over
the world, wherever they can get those costs, in order to serve American
consumers, and now increasingly global consumers? The answer is yes. And
that’s exactly the process I’m describing.

How do you then take the same ideas—not to large population clusters,
which is what is required for a Wal-Mart to work—but to highly
decentralized, dispersed population cultures so they get the same benefits
without necessarily having to change where they live? I think that’s the
basic thesis. Actually, in America it should not come as a surprise. The
Singer sewing machine was the first interesting (example). The rich people
didn’t need sewing machines; the poor needed them. So you say it’s $100,
but you can give me $5 a month. That’s how they built a global company. We
have had long experience. Model T. Henry Ford made it possible for
ordinary people to buy a car as he built a global company.

So the question is, do we have the next wave of disenfranchised poor
people whom we want to bring into the markets, and create inclusive
capitalism?

You also talk about the forgetting curve, which is a bigger challenge than
the learning curve. Would you describe what you mean by that?
I think we are all creatures of our own socialization, and the lenses
through which we see the world depend on how we were socialized. If we
start by saying that poor people are not our customers, poor people cannot
pay for and use advanced technologies, poor people have no use for the
kinds of products and services we have—if you start with those
assumptions—you don’t see the opportunity at all.

The fundamental task at the bottom of the pyramid is market development.
It is creating new markets, it is creating new consumers, it is creating
new products and services. Therefore, what we have learned in working in a
developed market like the United States or Europe may become an
impediment. For example, if I came and said, we have to sell something at
1 cent at retail and make money, people are going to say you’re crazy. If
I come to people and say we have to give single serve because that is what
will enable more capacity to consume, and what we have done successfully
is make bigger and bigger packages, people are going to say that’s against
what we do here. I look at it and say, it need not be, because the
economic rationale in the United States is, “I don’t want to go very often
to the store. I have enough cash so I can use cash as a way to inventory
convenience.” The poor people in the developing countries do not have
cash, and therefore they have to have a method by which they can access
markets and not mind the frequent trips to the store. So we have the same
economic tradeoff, but from a different starting point.

So to shift from how to create packaging that allows people inventory
convenience, to how to create packages that allow people the ability to
consume, even though they have to go more frequently, is a huge shift. And
once you have come to terms with it, we are smart enough to find the ways
of doing it. So the key is, I find, crossing the mental barrier of our own
socialization. That is why I say, selectively forgetting our past is
important. Not all of it, but selectively forgetting.

Many environmentalists see consumerism as a problem, yet you advocate
turning the poor into consumers.
I think sometimes we tend to be somewhat elitist. The people who are
talking about consumerism (being) bad are the same people who use shampoo,
detergent, oil-guzzling cars, electricity like we are using here, air
conditioning. So my starting point is, let’s give them the choice and let
them figure out what to do. Over a period of time they will learn how to
protect their own environment.

Single serve has come under tremendous criticism by environmentalists. I
say, OK, now that we have created the capacity to consume, the large
companies are not stupid. They are going to learn that if they don’t
create the backbone for developing an ability to have biodegradable
packaging, they’re going to be under tremendous pressure from public
policy, from every possible basis. So they’re going to find a way of
developing it. So what I think we will see is that we will increase the
consumer base, we will create some new problems of resource use—resource
abuse—and we will solve the problems as we go along. We have gone through
exactly the same in this country. We abused our rivers, and now we are
trying to do remediation. But the good news is that we were the first ones
to abuse and then do remediation. Now everybody else in the rest of the
world knows what can happen.

So take for example emissions from the automotive industry. The toughest
standards today are in China. Not necessarily well enforced, but all new
cars will have to comply. That’s tougher than what is available in the
United States. The same companies that are creating cars in China to those
standards will not do it here. And they complain about California
standards.

So will the biggest advances in sustainable manufacturing and consumption
come from the bottom of the pyramid, and flow to the developed countries?
Absolutely. Actually, it’s going to start from there, because we cannot
manufacture products and services for such a large population base without
focusing on sustainability. So we will be forced to bring green products
to the bottom of the pyramid first. Therefore, opening up the bottom of
the pyramid has a natural advantage in inventing technologies and
solutions to our problems.

Once you bind yourself to a very complex base of limitations on what you
can and cannot do, then you start innovating. So I think that there’s a
lot more vibrant experimentation on these issues, because people are
focused on the bottom of the pyramid, and therefore I look at is as a
major source of innovation. Not all kinds, but a major source of it.

Along with new strategies and new models of governance you suggest in your
book, will there need to be new ways of evaluating financial performance?
I don’t believe that we need a new way. I agree that companies have to be
accountable for more than profits, on their environmental record and so
on. Having said that, profit is the engine, and I don’t think we should
change that at all. Unless the company is profitable, it cannot access
markets to fund the growth. And ultimately the consumers should benefit
and so should the investors. My thesis is about bringing the interests of
the investors and the interests of the consumers into focus, into total
alignment. So what the book is trying to do is build a harmonization of
the interests of the consumers who are being underserved, the interests of
the company that is looking for growth opportunities, and the interests of
shareholders who want value creation. It is all at the same time.

So I look at how every contradiction we have seen has been proven to be
wrong. Let me give you examples. Quality vs. cost. TQM solved the problem.
Then we said we can’t have differentiation and low cost. Mass
customization solved the problem. You can’t have innovation and
efficiency. We know it is possible today, when you can innovate and be
very efficient. The bottom of the pyramid and sustainable development is
exactly the same. You can’t create billions of new consumers and be
profitable because they don’t have money? No. If you can create the
capacity to consume, you can grow dramatically. So I want this to be
juxtaposed in what we have done in other areas where we thought it’s not
possible.

How big of a challenge will it be to institute checks and balances to
ensure that the poor actually benefit from this?
It’s a huge challenge. I’m not underestimating, because that would be very
Pollyannaish. The middlemen who have benefited from asymmetries are not
going to just disappear tomorrow. They also have enormous political clout
because they are the richest people; because they’ve been able to exploit.
I’m saying it in a positive way, as a businessperson: That’s what they
did. They took advantage of a bad situation. They’re not going to go away.
Having said that, what digital technologies are trying to do is allow
people to start conversations across villages, across small towns; where
people are saying, if you’re getting money at eight percent, why am I
paying 10? If you are getting something for X, why am I paying Y? And the
connectivity is going to fundamentally change the equation, because
asymmetries can only be managed with no information or very opaque
systems. Therefore the development of the cell phone and the PC and
ubiquitous connectivity is going to create a revolution that none of us
can stop. That is what gives me optimism.

You’ve been focused on this for a long time. How often are you surprised?
Actually, I’m fascinated by the amount of innovativeness that is possible.
That’s what surprises me, every time. It’s always, why didn’t I think
about it? Because, people are doing the most creative things, and what
would have been impossible to conceive five years ago is becoming quite
normal. For example, five years ago you would not have had a conference
(like “Eradicating Poverty through Profit”). There are more than 1,000
people, and 50/50 from companies and the development community. The fact
that you are here. Five years ago we wouldn’t have conceived it--it would
have been a separate meeting of civil society organizations and maybe some
developmental economists, but the business guys didn’t want to bother.

So what is most satisfying for me is, five years ago I was a voice in the
wilderness, and now it looks like it is the center stage. And if that can
happen in five years, we can transform our societies fast. Because there
is tremendous momentum that we can build with success stories, role
models, credibility. And that is the reason for bringing these people
here. They are not messing around at the margins with 25 consumers; they
are transforming the country with millions of consumers. That is what I
think we need. Out of the 1,000 people here, at least 200 people are going
to say, why can’t I do it? Now imagine what happens if 200 people try and
10 people succeed. We have transformed another 100 million people. That is
our goal. Make sense? And I think it’s a very simple agenda. Not
complicated, but one that can work.

We need 1,000 evangelists who will not just preach, but do, and 1,000 will
lead to 100,000. It is like the idea of a tipping point. Exactly the same.

What is your dream of what India and China and South Asia will look like
five or 10 years from now, as a result of people embracing these ideas?
At least I can say for India, in five years no company operating in India
will talk about the bottom of the pyramid as if it is a distinctly
different market. When they talk about a market it will automatically
include what we call today the bottom of the pyramid. And it’s already
happening. That’s where I start in my book. CSR is not sustainable.
Business is.

Case Studies

Aravind Eye Hospitals
Aravind is a chain of eye-care hospitals in India that, thanks to
revolutionary workflow innovations, offers diagnosis, sight-restoring
surgery, and post-operative care for between $50 and $330. Its pricing
scale allows Aravind to offer care for free to the poor, while operating
the world’s largest eye-care system at a profit.

Casas Bahia
Casas Bahia is Brazil’s largest retail chain, selling electronics,
appliances and furniture mostly to the poor; 70 percent of the company’s
customers have no consistent or formal income. Casas Bahia serves this
market profitably through an innovative store credit program and a strong
focus on customer service.

CEMEX Patrimonio Hoy
CEMEX is the largest cement manufacturer in Mexico and the third largest
in the world. In the late 1990s the company began a program called
Patrimonio Hoy (“savings/property today”) to reach the low-income market
in Mexico, offering access to credit, quality building materials, strong
customer service and professional advice for family building projects. The
program allows the poor to build or expand their homes faster and at
higher quality, and opens the low-end market to other business
opportunities.

ICICI Bank
The second largest bank in India, ICICI Bank has developed new business
models for bringing banking services to the country’s hundreds of millions
of poor. In partnership with non-profits and independent microfinance
institutions, ICICI Bank has established a network of nearly 10,000
village-based self-help groups that develop local women’s management
capacity and administer loans at rates much better than those offered by
local money lenders. The Bank is developing more innovative financial
services for India’s rural poor, including low-cost ATMs in rural
villages.

ITC e-Choupal
The Indian conglomerate ITC conceived its e-Choupal program as a way to
streamline and reengineer its purchase of soybeans from rural farmers.
With the recent deregulation of agricultural product marketing, ITC
installed Internet-connected kiosks in rural towns so they could purchase
directly from farmers. This not only reduced transaction costs for both
ITC and farmers, but ITC’s direct access to information from farmers and
farmers’ access to wider information (such as soybean futures prices on
the Chicago Board of Trade, weather forecasts and expert agricultural
advice) allow for better strategic decision-making.

Jaipur Foot
Jaipur Foot is both a prosthetic foot design and an organization that
provides and services prosthetic feet and legs to some 16,000 poor in
India each year. While prosthetic legs in the United States cost an
average of $8,000, the Jaipur Foot costs only $30, can be fabricated and
fitted in a single visit by low-skill workers, and meets the more
demanding performance requirements of the rural poor—sitting cross-legged,
squatting, walking on uneven ground and even climbing trees.

Massive Change: The Future of Global Design -- It’s not about the world of design; it ’s about the design of the world.

Massive Change:
The Future of Global Design
It’s not about the world of design; it ’s about the design of the world.
by Doug Chapman

“Now that we can do anything, what will we do?”

It’s hard to imagine a more ambitious beginning to a design exhibition
than this enigmatic question. Yet this is the initial statement and call
to action of “Massive Change: The Future of Global Design,” an
internationally touring gallery exhibition showcasing some of the world’s
hottest technologies and visionary thinking.

Created by Bruce Mau Design and the Institute without Boundaries, and
commissioned by the Vancouver Art Gallery, “Massive Change” offers a
whirlwind tour of human achievement in almost every conceivable realm—from
bicycle-powered water purification systems for the developing world, to
the U.S. military’s most advanced armored soldier technology; from
consideration of the City as humankind’s greatest design achievement and
an economic plan that could bring more than nine trillion dollars in
capital to the developing world, to chickens bred without feathers and a
prosthetic human nose made of stem cell-generated human tissue. “Massive
Change” ties all this and more together as evidence of our ever-increasing
capacity to shape the world for the better through intentioned actions
called Design.

According to Bruce Mau, “Massive Change” embodies the thesis that “design
has placed us at the beginning of a new, unprecedented period of human
possibility, where all economies and ecologies are becoming global,
relational and interconnected. In order to understand these emerging
forces, there is an urgent need to articulate precisely what we are doing
to ourselves and to our world.” This articulation is the prime achievement
of “Massive Change,” a project that not only takes the form of a
20,000-square-foot gallery exhibition, but also a book published by
Phaidon Press, a talk radio program hosted by Jennifer Leonard, a
resource-rich Website (www.massivechange.com) and a speaker series
co-moderated by Bruce Mau and Charlie Rose. Using an energetic visual
style usually reserved for high-production film or art and culture
magazines, ”Massive Change” achieves a rare blend of emotional impact,
intellectual weight and political edge.

While Bruce Mau may be a relative unknown in ecologically sustainable
design circles, he is recognized in the design world as the groundbreaking
graphic designer whose work with Zone Books redefined the relationship
between visual form and intellectual content in academic and art
publishing. His book “SMLXL,” written and produced with Rem Koolhaas, is
considered a classic, and “Lifestyle,” Mau’s manifesto on contemporary
culture and his studio’s design process, is sure to follow. Now, with
“Massive Change,” Mau focuses his creative vision on the larger issues of
ecological and social equity in the global commons, entering into
conversation with the world’s leading visionaries, including scientists,
military historians, avant-garde economists, environmentalists and
advanced technology designers, to name just a few.

Collaborating with graduate students at the Institute without Boundaries,
a one-year design residency program within the Bruce Mau Design Studio,
Mau developed the thesis of “Massive Change” after reading L.B. Pearson’s
1957 Nobel Peace Prize lecture, which quotes historian Arnold Toynbee:
“The 20th century will be chiefly remembered by future generations not as
an era of political conflicts or technical inventions, but as an age in
which human society dared to think of the welfare of the whole human race
as a practical objective.” To the “Massive Change” authors, the phrase
“practical objective” brings this historical statement out of the realm of
academics and into the arena of design. And, Mau adds, we are now in a
position to evolve that statement for the 21st century, striving not only
for the welfare of the human race, but of all species. If “Massive Change“
is one thing, it is a celebration of designs and intentioned strategies
that are making Toynbee’s vision a reality.

And while this thesis may seem completely in line with traditional notions
of ecologically sustainable design, “Massive Change” is not your father’s
eco-exposition or a rehashing of established and essential sustainable
design concepts. This is evident when you consider the breadth of issues
discussed in the 11 “design economies” that comprise the exhibition’s core
content. Each economy describes one relatively distinct realm of human
activity and carries an explanatory ambition-statement (see sidebar).

Familiar design strategies discussed include renewable energy,
cradle-to-cradle manufacturing, Biomimicry, socially responsible
investing, and consideration of Curritiba, Brazil, as a model urban
environment. But the project then delves into less familiar ground: The
Information Economy explores our ability to map and design visual
representations of global data ranging from the sprawling Internet to
world climate and weather patterns. The Image Economy highlights the
current mega-proliferation of scientific and consumer imaging
technologies, showcasing the work of a group of human rights activists who
use digital photography and video to document abuse around the world and
prosecute offenders in courts of law.

Perhaps the most incongruous inclusion in “Massive Change,” a project
about positive change, is the Military Economy. As the “Massive Change“
authors recognize, “For better and worse, the military project is one of
the most powerful engines of technological innovation and design. From the
microwave oven to space exploration, from civilian aviation to the
Internet, the military (and in particular the U.S. military) has fed the
process of design. Indeed it is impossible to consider our global future
without considering the impacts of the Military Economy, both its capacity
for madness and its capacity for action on a global scale.”

At the end of the day, the summation of the “Massive Change“ economies
could be called the economy of hope. Yes, the world is full of
challenges—war, poverty and environmental degradation—but there is also
profoundly positive work happening around the world and at all economic
levels. “Massive Change” shows a link between incredible achievements in
wheelchair design for first-world citizens and efforts to bring clean
water to the developing world. One is not considered more culturally
valuable than the other; they are both practically oriented, born out of
love for humanity, and fundamental to creating an equitable and
sustainable world for all. This represents an integrative vision that
combines traditional ecological design wisdom with the best design
thinking in the world, regardless of explicit sustainable aims.

Another aspect of what makes “Massive Change” different is how the message
is brought to the public. While from a curatorial perspective “Massive
Change“ takes aesthetics off the table, overtly choosing to exhibit
designs based on their capacity for change-making rather than what they
look like, visual presentation and aesthetics come into play full-force in
telling the story. The exhibition is an immersive gallery experience that
combines the content-driven intent of a science museum with an edgy
delivery inspired by multimedia installation art, creating communication
that is accessible and exciting, both emotionally and intellectually. The
“Massive Change“ book is part visionary engineering catalog, part cultural
theory text and part monograph, and would be at home on the reading list
of a college course on sustainability or as a case study in graphic
innovation.

The resulting project reaches a broad audience and produces a fresh
perspective on what an ecologically sustainable and globally equitable
future could look and feel like as a dynamic cultural experience.
Suddenly, even the culturally chic SoHo aesthetic design purists, whose
notion of sustainability is confined to recycled tire handbags and hemp
yoga clothes, are paying close attention to the thesis that design is
always an ethically engaged practice. More than this, “Massive Change”
brings the visual and graphic arts community, the military, genetic
bio-ethicists, social and free-market economists, environmentalists and
others together in a single, non-partisan discussion in which everyone is
free to use the strength of their discipline to bring about change. The
criteria for admission into this league of “designers” is not strictly
aesthetic or ecological, but effective agency for the greater good.

According to Mau, “The reality for advanced design today is dominated by
three ideas: It’s distributed, plural and collaborative. It is no longer
about one designer, one client, one solution, one place. Problems are
taken up everywhere; solutions are developed, tested and contributed to
the global commons. The effect of this is to imagine a future for design
that is both modest and ambitious. Modest in the sense that we take our
place in what Bill Buxton calls ‘the Renaissance Team’—a group that
collectively develops the capacity to deal with the demands of a given
project. Ambitious in that we take our place in society, willing to
implicate ourselves in the consequences of our imagination.” “Massive
Change” demonstrates that human society has the capacity and global wealth
to change the world in positive and tangible ways. The question it leaves
us with is, will we?

“Massive Change: the Future of Global Design” opened at the Art Gallery of
Ontario March 11. International tour dates are in development. The book
“Massive Change,” published by Phaidon Press, is available through
booksellers everywhere. www.massivechange.com

6.5.05

Do Blue Chips Belong in a Social Purist's Portfolio? How virtuous is your ethical fund?

Do Blue Chips Belong in a Social Purist's Portfolio?
The New York Times, 1 May 2005 - The top holdings of the largest mutual
funds in the United States include some of the world's biggest companies.
Mutual funds that call themselves socially responsible hold many of the
same stocks.
That appalls Paul G. Hawken, the writer, entrepreneur and environmental
advocate who was a co-founder of the Smith & Hawken gardening tool
business, and who recently conducted a study of socially responsible
funds. ''The 30 top holdings of North American socially responsible funds
are almost identical to the Dow Jones'' industrial average, which tracks
30 blue-chip stocks, he said. ''Why do I need the socially responsible
funds to buy the Dow Jones?''
Funds in the socially responsible category typically screen out companies
they consider bad apples. They often exclude entire industries like
tobacco, alcohol or gambling. Mr. Hawken found in his study of 600
socially responsible funds around the globe that all but seven of the
Fortune 400 companies were held by at least some of these funds.
''I want to know the thinking behind these investment decisions,'' said
Mr. Hawken, 59. ''I think investors deserve to know that.''
It's not enough for a socially responsible fund to state its investment
criteria, he said; it should go a step further and discuss how each
holding meets those criteria. He published his findings in a report posted
on the Web site of the Natural Capital Institute (www.naturalcapital.org),
a small research organization in Sausalito, Calif., of which he is the
unpaid executive director. Many people associated with socially
responsible funds, including some whose holdings were criticized by Mr.
Hawken, complain that he has lumped together every stripe of fund in the
category. ''He's painting the funds with a rather broad brush,'' said Joe
Keefe, senior adviser for strategic social policy at Calvert Funds, which
runs a stable of socially responsible funds.
In his analysis, Mr. Hawken criticizes various holdings of socially
responsible funds, but some of those stocks may be in only a few such
funds, Mr. Keefe said. ''I suspect those companies would fail the
screens'' of most socially responsible portfolios, he said.
Calvert owns several stocks that Mr. Hawken finds problematic, including
Microsoft, which he criticizes because of the way it has dominated
software markets.
The category of socially responsible investing is a rather large umbrella.
It covers fund companies like Domini, Calvert, Citizens and Pax, which use
similar criteria to exclude companies that sell tobacco, alcohol and so
forth. Many religious-based funds also fall into the category, and they
typically use screens to exclude companies that their followers may find
offensive. Catholic funds, for example, tend to exclude companies that
sell or make contraceptives, while Muslim funds exclude financial services
companies because they lend with interest, which is deemed usurious. In
addition, there are single-issue funds, like those of the Sierra Club and
Portfolio 21, which look almost exclusively at how companies measure up on
environmental issues, and the Women's Equity fund, which screens for
gender equality.
In addition, some funds use a best-in-class approach. Rather than weed out
entire industries, they invest in some of the best companies within a
sector, even industries like oil, which some environmentalists find
objectionable. BP Amoco, the petroleum company, often makes the cut on
this basis because of its work in renewable energy.
Those different mandates can lead to widely different portfolios. While
the more general funds wind up with similar stocks, the religious funds
often invest in companies that others find troubling. For example, the Ave
Maria fund, which is based on Catholic principles, owns General Dynamics,
the military contractor. Mr. Hawken's database, available at
www.responsibleinvesting.org, shows that none of the broader socially
screened funds own the stock.
''We would like to have neat little boxes that all the funds could fit
into,'' said Anita Green, vice president for social research at Pax World
Funds, one of Mr. Hawken's targets. ''So far we haven't found a method
that will do it.''
The Domini Equity fund, which tracks the Domini Social index of 400
companies, includes stocks of the Gap and McDonald's, to which Mr. Hawken
objects. In designing the index, the fund's founder and chief executive,
Amy Domini, included what she thought were the better half of companies in
the Standard & Poor's 500-stock index, plus 150 smaller names.
''I personally may prefer slow food to fast food. I personally prefer the
ambiance of organic over nonorganic,'' Ms. Domini said. ''But I don't have
a mandate from the public to avoid fast food.'' Ms. Domini said that
McDonald's had responded to calls to switch to napkins made of recycled
paper, use soy-based ink and avoid antibiotics in beef.
''When I look at McDonald's versus the fast-food industry, I see them on a
path toward human dignity and environmental sustainability,'' Ms. Domini
said. ''I can live with myself for investing in McDonald's.''
Mr. Hawken's detractors say that he is pushing for a purist approach to
investing that is not compatible with most investment objectives. It is
nearly impossible to screen out every unpleasant element when looking for
investments, Ms. Green and Mr. Keefe said. Instead, they use screens to
address the most egregious components. Stocks that pass those tests may
still have problems, and the funds often try to persuade the corporations
to make changes.
For years, Ms. Domini wrangled with Wal-Mart Stores over practices that
she said were antiunion, before giving up on the stock in 2000. Recently
her funds renewed their investment in the Gap, which was dropped because
of concerns first raised by labor groups in 1999 over labor practices at
some of the retailer's suppliers at factories on the island of Saipan. She
said that the Gap had made strides in requiring more stringent standards
for working conditions in its suppliers' factories.
In March, Pax World sold its shares in Starbucks because that company had
struck a deal to sell a coffee liqueur; Pax has a policy of avoiding
companies involved in alcohol, tobacco or gambling.
Investing in only the cleanest of companies would hardly yield enough
names for a diversified portfolio, Mr. Hawken's critics say. It would
largely produce a list of small-capitalization businesses, which would not
fill most people's overall investing needs.
''No core equity mutual fund could ever be in compliance with a vision
like that,'' said Garvin Jabush of the Sierra Club Mutual Funds in San
Francisco. ''There's value in rewarding the most progressive companies in
mainstream corporate America, even if it's not a fuel cell company in
somebody's garage.''
Mr. Hawken has criticized Sierra Club funds for buying shares of Outback
Steakhouse, contending that cattle production leads to overgrazing and
ecological damage. Mr. Jabush counters that Outback requires its beef
producers to provide third-party audits demonstrating that their cattle
have been treated humanely. ''Outback isn't a rancher; it's an end user,''
Mr. Jabush said, contending that excluding its shares for environmental
reasons ''is like avoiding anyone who uses gasoline.''
Soon it will be Mr. Hawken's turn to show socially responsible funds how
he would screen companies. He is advising Baldwin Brothers, a firm in
Marion, Mass., that is starting a socially responsible portfolio for
investors of high net worth.
Though he would not disclose the stocks he is considering, because the
fund will not start until later this year, Mr. Hawken said that about 60
percent of the assets would be invested abroad. The investments, he said,
will include mainstream companies that are positive for the planet.
Copyright 2005 The New York Times Company

How virtuous is your ethical fund?
Sunday Telegraph, 1 May 2005 - Investors in ethical funds have often had
to sacrifice performance for their principles. But now a number of fund
managers are sacrificing their principles in a bid to boost performance.
Last week, the Henderson Ethical fund changed its remit to focus on
finding "industries of the future", such as cleaner energy, sustainable
transport, water management, safety and health. Among those changes was
the controversial decision to allow the fund to hold healthcare companies
that use animal testing.
Previously, the fund automatically excluded any company involved in animal
testing. While it will still shun those that use animal testing for
cosmetic purposes, it will now invest in companies, such as Smith &
Nephew, that use animal testing in some pre-clinical trials.
Henderson hopes that this new remit will lead to better returns for
investors.
Over the past three years, the performance has been pretty poor, with the
fund falling in value by 17.9 per cent. The average fund in the Global
Growth sector (which includes both ethical and non-ethical funds) fell by
just 0.5 per cent over the same period.
Henderson says it polled 5,000 investors in the fund before making this
decision. More than two thirds of the 1,500 investors who replied approved
the change. "Many people are realistic about the fact that animal testing
is necessary for life-saving medical advances," says Philip Chapman at
Holden Meehan, an advisory firm that specialises in ethical investments.
Aegon, meanwhile, changed the remit of its Ethical Bond fund two years
ago. But, rather than take a more relaxed stance, it tightened its
investment criteria.
Previously, it had been described as a "light green" fund: it used a
positive-screening approach. For example, it invested in those oil
companies with the best environmental records. The fund, renamed Aegon
Ethical Income, is now deemed "dark green": it uses a negative-screening
approach to filter out companies involved in activities that do not meet
its ethical criteria. For example, it will not invest in any company
involved in gambling or pornography.
The change has paid off in performance terms. Two years ago it was
languishing at the bottom of the performance tables, now it is in the top
10 per cent of all corporate bond funds.
Ethical funds remain a niche business: only 1.95 per cent of the pounds
78.4bn invested in UK All Companies sector funds is invested in ethical
funds.
But not all ethical funds have performed as poorly as Henderson's in
recent years. Within the UK All Companies sector there are 19 funds that
have a three-year performance track record. Of these, five are in the top
25 per cent of funds, while a further eight have produced above-average
returns.
Critics argue that if ethical fund managers can only invest in a limited
range of stocks they are automatically at a disadvantage in performance
terms. When they first emerged in the early 1980s they were nicknamed
"Brazil funds" because it was considered that ethical investment was for
nuts!
However, Chapman points out that many companies favoured by ethical
managers are benefiting from legislative changes to encourage, for
instance, a cleaner environment and sustainable energy.
Emma Howard Boyd, the head of socially responsible investment at Jupiter,
gives the example of a holding in her group's ethical funds of D1 Oils, a
UK-listed company that produces biodiesel. Biodiesel is harvested from
plants and added to diesel to reduce emissions, without the need to modify
a car's fuel system. The company's share price is up by 130 per cent since
it listed on the UK stock market last year.
Chapman adds: "Ethical funds will have their ups and downs. Recently, some
have suffered from low or no exposure to oil companies at a time when oil
company shares have risen on the back of surging crude prices. But, over
the longer term, investors should be able to ride out these ups and
downs."
Recently, the best-performing ethical fund has been the pounds 200m F&C
(formerly Isis) Stewardship Income fund. Over three years, it is fourth
out of 70 in its peer group (the equity income sector, which includes
non-ethical funds) and has delivered a return of 37.2 per cent, more than
twice the average in this sector.
The fund, managed by Ted Scott, is one of the darkest green funds on the
market. A specialist reference committee screens shares for inclusion.
There are some obvious exclusions, such as tobacco and armaments
companies.
Scott says: "There are also some less obvious exclusions, such as certain
oil companies. It is not that oil is unethical, but I can't hold those
that drill in areas such as Saudi Arabia or Nigeria, countries that are
involved in human rights violations. Similarly, within the banking sector,
I can hold some of the UK-based mortgage banks, but not those that lend
money to foreign governments in human rights violating countries."
Scott is not involved in the decision-making process over whether the
companies meet the screening criteria. Rather, he is handed the restricted
list by the reference committee and then makes decisions about the likely
investment prospects of the companies.
The dark-green screening means that, while most mainstream UK fund
managers can choose from 750 stocks in the FTSE All-Share index, Scott has
just 350 to choose from.
Scott said these very restrictions have contributed to the fund's success:
"Many managers hug the index by holding some exposure to the larger
companies, even if they do not think they will perform well in future. I
cannot do this. Stewardship Income is therefore a true stock-picking
fund."
Copyright 2005 The Telegraph Group Limited

Activists invoke business ethic - Reformers with a business plan

Activists invoke business ethic - Reformers with a business plan
Financial Times, 5 May 2005 - Recent campaigns such as the anti-sweatshop
protests against big clothing manufacturers have shown that activists can
push companies into changing business practices. But once an issue has
been highlighted, the next step is not as clear. This is often where the
Rainforest Alliance, a New York-based conservation group, steps in.
The Rainforest Alliance has developed a system of auditing and
certification to overhaul, for example, the way that crops and timber are
produced, or the way that tourism is managed. It now operates in more than
50 countries, working with farmers, governments, businesses, scientists
and local communities.
"We work with companies, but in a very concrete way," says Tensie Whelan,
director of the Rainforest Alliance. Through what Ms Whelan calls a
"market- based conservation mechanism", the organisation uses an auditing
process that tracks 200 different criteria to verify that coffee growers
or pulp and paper companies are operating sustainably.
"Activist groups like the Rainforest Ethics or Greenpeace will go after
companies," explains Ms Whelan. "And then they will tell them to go and
work with the Rainforest Alliance or other groups that can certify their
practices."
In 1989, the Rainforest Alliance pioneered forestry certification with the
world's first sustainable forestry certification programme. More recently,
it has become well-known for its work with Chiquita, the US banana giant
once criticised for poor environmental and labour practices.
Today, the Rainforest Alliance also works with a wide range of companies,
including AT&T, Kraft Foods, Procter & Gamble, Pfizer, JP Morgan Chase,
IKEA and Home Depot.
However, even when companies want to buy products and raw materials from
sustainable suppliers, it is not always easy, says Ms Whelan."One huge
challenge is working with companies who want to source responsibly when
the supply chains are very complicated," she says.
However, as the Rainforest Alliance expands its activities, companies will
have a broader range of suppliers from which to choose.
In May last year, for example, the organisation received a pledge for an
Dollars 8.6m grant from the United States Agency for International
Development (USAID) to promote sales of sustainably produced and certified
timber, bananas and coffee from Central America and Mexico.
Over the three-year project, more than 300,000 acres of forest and
farmland are expected to be certified as sustainably managed, while more
than 4m board feet of certified timber, 90m boxes of certified bananas and
30,000 metric tonnes of sustainable coffee are expected to be sold through
sourcing contracts with local producers.
Ms Whelan says: "If you look at the world and what's having the most
impact on our products and services, it's companies," she says.
"Corporations have more impact on the environment than any other player so
we need to transform how they do business - and they need to make it work
for their bottom line. That's what's so fascinating about certification as
a tool."
Copyright 2005 The Financial Times Limited

End to fishing freedom urged as stocks dwindle

End to fishing freedom urged as stocks dwindle
Financial Times, 2 May 2005 - Freedom to fish on the high seas should be
ended, environmental groups will say this week, as governments from 45
countries meet to discuss the crisis in world fish stocks.
Illegal fishing - thought to account for as much as a third of the catch
in some of the world's most productive fisheries - will be high on the
agenda as the governments meet in Canada until Thursday to grapple with
the competing demands of fishing communities and the dwindling number of
fish.
The United Nations Food and Agriculture Organisation has estimated that 52
per cent of the world's marine fishery resources are exploited up to their
safe level and 24 per cent more are overfished.
Geoff Regan, Canada's minister of fisheries and oceans, said: "The
perilous state of many of the world's fish stocks is a result of our
collective failure as an international community to protect this precious
resource. Our challenge as fishing nations is to act now - and act
effectively - to change the way we manage our shared high-seas fisheries
before it is too late."
Some governments are likely to push for tougher sanctions and tighter
surveillance against so-called "fish pirates" - fishing boats that stray
illegally into fishing grounds in another country's waters, or operate in
contravention of the fishing restrictions imposed by many countries.
Fish pirates sometimes target species that are prized as delicacies but
rare or endangered, such as the Patagonian toothfish - often known as
Chilean sea bass on restaurant menus - which takes a long time to grow to
adult size and reproduces slowly.
But some environmentalists believe the legal presumption in favour of the
freedom of the high seas, and the freedom to fish, should be reversed
entirely. This would mean fishing could only be carried out with explicit
permission, and boats would first have to prove they were following
environmentally sound practices. Navies would be able to challenge boats.
Greenpeace said: "Current high seas ocean management is fundamentally
flawed. It is creating the biggest unseen and potentially irreversible
environmental disaster of our time."
Campaigners will also urge the United Nations to end damaging fishing
practices such as bottom trawling - dragging a net along the sea floor,
scooping up everything on it.
Copyright 2005 The Financial Times Limited

Climate change 'will damage profits'

Climate change 'will damage profits'
Financial Times, 2 May 2005 - Financial institutions are laying themselves
open to risks to their profitability by failing to budget for the effects
of climate change, according to a merchant bank that specialises in
climate change risks.
Louis Perroy, an actuary at Climate Change Capital, said: "Most financial
institutions think of climate change in terms of corporate social
responsibility, but really they should be thinking of themselves."
Climate change is caused by increased levels of carbon dioxide in the
atmosphere as a result of fossil fuel use. In a report to be presented to
the Institute of Actuaries next month, Mr Perroy quotes Munich Re, which
says: "Climate change will significantly increase the frequency and
severity of heatwaves, droughts, bush fires, tropical cyclones, tornadoes,
hailstorms, floods and storm surges in many parts of the world."
This could have knock-on effects such as heatwaves, lower crop yields,
increased levels of subsidence and increase in certain diseases. Insurers
and reinsurers are already feeling the effects of climate change on their
bottom line as claims from extreme weather events have increased.
Munich Re says that before 1987, there was only one event causing an
aggregate insured loss of more than Dollars 1bn. Since then, there have
been 46. Storm and flood losses in the UK between 1998 and 2003 were
Pounds 6.2bn, double the amount in the previous five years.
"All financial projections of liabilities and assets over a time horizon
of more than 25 years or more should consider the potential impacts of
climate change," said Mr Perroy.
Assets of institutional investors are likely to suffer because of an
increase in climate change related regulation such as this year's emission
trading scheme and the Kyoto Protocol, as well as the macroeconomic
disruption climate change will cause.
But the problem is not taken seriously because "climatic models are too
imprecise in terms of the timing or location of impacts," said Mr Perroy.
Financial institutions should be putting pressure on companies with high
carbon dioxide emissions to emit less, lobbying for stricter legislation,
investing in companies committed to cutting emissions and in those that
will generate tradable carbon credits.
Copyright 2005 The Financial Times Limited

5.5.05

HSBC Bank Ups Renewable Energy Commitment to 30%

HSBC Bank Ups Renewable Energy Commitment to 30%
Source: GreenBiz.com
WILMINGTON, Del., April 25, 2005 - HSBC Bank USA has pledged to meet 30%
of its needs for electricity through wind power. The bank will offset
nearly a third of its carbon emissions by purchasing 45,454 MWh of wind
energy certificates -- one of the largest retail renewable energy
purchases made in North America.

Last December HSBC became the world's first major bank to commit to carbon
neutrality.

Electricity production is the leading cause of greenhouse gas emissions
that contribute to global climate change. The bank's new annual commitment
which will offset 30% of its emissions and will prevent the release of
over 36,000,000 pounds of carbon dioxide (CO2), a leading global warming
gas.

"We want to be the first bank in the world to have zero greenhouse gas
emissions," said HSBC Bank USA president and CEO Martin Glynn. "A
cornerstone of this effort is powering our branches and offices with 30%
clean, natural wind power."

HSBC has purchased Green-e certified tradable renewable energy
certificates (RECs) from new wind projects in California and Minnesota.
RECs represent the environmental benefits of clean energy production that
serve to take the place of other non-renewable sources from the regional
or national electric grid. HSBC's investment will contribute to further
the development of new wind energy generation necessary for a clean energy
future.

"This sizeable purchase puts HSBC into the ranks of America's leaders in
green power purchasing," said Kurt Johnson, Director of the U.S. EPA Green
Power Partnership. "HSBC is setting a high standard for the financial
sector and the broader business community." The Bank has joined the Green
Power Partnership, an EPA voluntary program working to standardize green
power procurement as part of best practice in corporate environmental
management.

Globally, HSBC was named as one of the top fifty companies in the Climate
Leadership Index at the launch of the Carbon Disclosure Project's (CDP)
second report on climate change and shareholder value.

Swimming lessons: Water privatisation has proved an extreme environment in which to learn the dynamics of democratic capitalism

Swimming lessons
EC Newsdesk
2 May 05

Water privatisation has proved an extreme environment in which to learn
the dynamics of democratic capitalism
World Water Day on 22 March marked the start of an “International Decade
of Action” to address the water crisis already afflicting vast segments of
the developing world’s population. It is an issue set increasingly to
affect communities in the industrialised countries too.

The launch of the decade of action has provided a platform for
non-governmental organisations and others to draw attention to mounting
evidence of the failure of privatisation as a panacea for water supply and
sanitation issues, particularly in developing countries.

When privatisation took off in the 1990s, the business case must have
looked tantalising: the water company assumes some form of mandate to take
monopoly control of an asset serving a guaranteed and expandable market,
in exchange for a given level of investment and certain restrictions on
the prices which it can charge. The history of these privatisations,
however, does not indicate a resounding success for either companies or
communities.

The manner in which water privatisation has failed has drawn attention to
issues of political legitimacy relevant to all companies.

Off-the-shelf solution

For host governments the logic of an influx of infrastructure investment,
taxes and expertise – a quick fix to a utility problem - may appear
flawless. Privatisation is also still the elixir favoured by the
international financial institutions.

With tariff structures often pegged to hard currency exchange rates in
order to reduce risk for foreign providers of capital, however, and with
cost savings often remaining elusive, water prices have soared in many
reported cases. Increases of several hundred per cent have been cited.
Water companies have also been accused of “cherry picking” by serving
areas better able to afford their prices and neglecting other poorer
localities, including rural areas.

Another problem is that of opacity in contracting processes. Not only does
this preclude NGOs from advising communities on contract terms, but it
also opens the door to corruption. Add the temptation of foreign capital
and individuals in government gain opportunities for personal enrichment,
hampering the political will to seek perhaps more appropriate local
alternatives to those offered by multinational utilities. This also
reduces the likelihood of stringent regulation of companies to ensure the
provision of services to poorer communities.

Licence revoked

If the interests of local communities have been ignored during the
formation of a contract, they can often become impossible to ignore
subsequently. Civil unrest over water privatisation in Bolivia has led to
the cancellation of contracts with Bechtel and, most recently, with the
French company Suez. In Uruguay, the constitution has been amended to
prevent privatisation of water. People have taken to the streets against
privatisation in Argentina. NGOs are mobilising public support against
privatisation across Latin America and Asia.

The multinational water companies at the heart of these privatisation
projects have been burned. They now seek safer places to invest. Where
they have not been forced out of contracts some are themselves trying to
get out of them.

The price risk to poorer consumers posed by the use of international
finance, weak regulation and opacity in contracting processes suggest a
widescale failure to address the need to build legitimacy. The result is
unquantifiable political risk for the corporations and governments
involved.

That legitimacy will not be built without a firm focus on the local:
governance processes that provide local communities with a say in the
prioritisation of water investments; maximum use of local businesses, with
the added benefit that that can reduce costs; greater transparency and
accountability of all decision-making.

There are echoes here of the legitimacy issues raised by the
reconstruction effort in Iraq, which, it can be argued, have played their
part in the continuing instability in that country. You do not have to
offer products or services touching on situations as extreme as life or
death, however, to take home the lesson of the importance of
legitimacy-building.

There remains good scope for successful public-private partnership if such
legitimacy-building lies at the heart of the project. But it may well be
the case that the demands of a particular community cannot be met by a
multinational to the satisfaction of both sides.

A local, perhaps more radical solution may be the only way to deliver the
public service expected. Better to learn that through engagement at the
outset than on the streets later.

4.5.05

3 Articles from Corporate Knights: Trading Places, Dismantling the Economist Critique of CSR, How Investors can save capitalism

"The Edo Period had an Ecological Society” - susatainability in Japan, 1603-1867

On this page, we introduce the translation of “The Edo Period had an
Ecological Society”,("O-edo ecology jijo," published in 2000, Kodansha
Publishing Company) by Eisuke Ishikawa.
We received much feedback from our readers on articles “Japan’s
Sustainable Society in the Edo Period (1603-1867)” in our March and April
2003 newsletters which drew upon Mr. Ishikawa’s research.
The requests for more information on the sustainable society in the Edo
period were overwhelming, which prompted us to contact the author for his
permission to translate the book for this website. The group of JFS
volunteers including native speakers together worked on the translation
originally done by Mr. Oki.

| Chapter 1-8 | Chapter 9-14 |

Chapter 13 - Nothing Comes out of Nothing (PDF file : 19KB)

In Japan, there is an old saying "Shobo-ni kidokunashi," which means "No
miracle or supernatural phenomena exist as a so-called "divine grace" in a
proper religion," originally meant to advise people to be cautious of a
fake religion. This old proverb, however, can also be construed as
"Something cannot come from nothing," one of the basic principles of the
natural world. In essence, there are no miracles in the natural world,
just like no magician can perform a magic without a trick. (Read More... /
PDF file : 19KB)

Chapter 12 - From Outside to Inside (PDF file : 17KB)

Edo period Japan was a country that seldom used vehicles. Although there
were a few wagons pulled by cows between Kyoto and Edo, large two-wheeled
carts in Edo, and small carts used in parts of Osaka and Nagoya, these
vehicles were used exclusively for moving heavy items such as bags of rice
and lumberit appears that there was not much transport of vegetables. In
this age where people normally shouldered loads on carrying-poles or
loaded the backs of horses, a 10-15 kilometer distance was the limit for
moving leafy-vegetables without compromising its commercial value. (Read
More... / PDF file : 17KB)

Chapter 11 - The Value of Time-consuming Efforts (PDF file : 18KB)

The fish market of Edo was in Nihonbashi, before the Great Kanto
Earthquake, which forced it move to a place called Tsukiji today, in the
same Tokyo region. As fish spoils more quickly in the heat than the other
fresh foods, shops selling dried sea goods were the only ones that were
able to maintain business as usual during summer, while wholesalers of
fresh seafood were outrageously busy. (Read More... / PDF file : 18KB)

Chapter 10 - Amazing Diversity in Local Specialization (PDF file : 19KB)

Edo Japan was full of diversity, far beyond any stereotypes we may have of
the era today. People lived on solar energy and dined on local seasonal
foods. Their diet was much more diverse compared to that of people living
in the convenience of current day society. In essence, Japanese life in
the Edo Period was built on diversity. (Read More... / PDF file : 19KB)
Chapter 9 Made to Last
Part 5 : Re-use is better than recycle (PDF file : 20KB)

Since not recycling just creates more rubbish, but recycling can require
tremendous energy expenditures, it makes much more sense to avoid
recycling, and instead re-use stuff whenever possible, as people did in
the past - for example, continuing to use an umbrella as an umbrella
through repeated repair, and so forth. I know that re-using umbrellas
sounds pretty stingy, but in the past people were forced to live frugally,
and there are any number of similar examples. (Read More... / PDF file :
20KB)
Part 4 : Making things easy to repair (PDF file : 20KB)

Unlike some of the manufactured products you find these days which seem to
have been made without a thought for repair when they break down, in the
past things were made as easy as possible to repair on the premise that
they can and will break down sometime. In an age when people depended just
on recent solar energy, the bizarre logic of generating prosperity through
throwing things away when they broke just didn?ft hold. It made clear
economic sense to go on using the same things as long as possible. (Read
More... / PDF file : 20KB)
Part 3 : Do We Need Economic Growth? (PDF file : 19KB)

One key way of curbing the generation of waste is to manufacture sturdy,
durable products that last for years and years without breaking down, but
doing so would result in a halt to economic growth. However, even if
economic growth were to come to a stop, the only thing that would really
suffer is nothing more than a very recent artifice in the history of
humanity, this bizarre social structure created as a matter of policy
since the period of rapid economic growth. (Read More... / PDF file : 19KB
)
Part 2 : Anathema to Economic Growth (PDF file : 17KB)

Why have we stopped using yukatas in such a sensible way? Well, for one
thing, our present-day lifestyle makes the wearing of clothing such as
yukatas impractical, but far more than that, successive governments have
sought to stimulate economic growth and bring prosperity to the nation by
adopting policies that encourage people to throw things away.(Read More...
/ PDF file : 17KB)
Part 1 : The life of a yukata (PDF file : 19KB)

You hear the word "recycle" everywhere you go these days, mostly in
connection with the collection and re-use of unwanted second-hand goods.
Given the dearth of places to dispose of waste in present-day Japan, you
could argue that recycling as much as possible makes sense, but that
doesn't mean to say that it is the best solution.(Read More... / PDF file
: 19KB)