Do Well and Do Good

eBay Enters Green Ecommerce Fray with WorldofGood.com

WorldofGood.com is eBay's new do-gooder shopping portal. I haven’t been that attuned to the latest happenings in this ecommerce niche but a new eBay product definitely makes me look twice.

 

A few minutes on the site and I quickly gathered that it seems well designed and friendly. Still, I can't help but feel a little disappointed. The fact that a company like eBay is stepping into this area could be a real legitimization of what might otherwise be considered either a fad or a really small retail niche. What eBay could have done was signaled that social attributes of products are important enough for everyone to consider when they are buying a product. Instead, WorldofGood.com seems very much in line with, rather than a departure from, some of the existing green commerce sites like EcoSeek or Greenzer, among others. To be clear: there's nothing really wrong with that, except that it continues to work within a paradigm that assumes only people who regularly buy handmade drums from Indonesia really want any social info about the products they buy.

 

Of course, the site has just launched and it may evolve into much more than what it suggests right now. On the positive side, the labeling system that the site employs is valuable and transparent, breaking things down into 'People Positive', 'Eco Positive', 'Animal Friendly' and 'Supports a Cause'. Along with more specific attributes within each of these categories, the system really captures the social value of most any product out there. Plus, these labels do a great job of giving consumers clarity on exactly what is good about the products they are buying rather than making them take it on face value just because something might be made of bamboo.

 

Similarly, WorldofGood.com put into place something they call 'Trustology', which is essentially a marketplace for third party validation of the various businesses in the value chain that bring the product to your door; from the producer to the seller.  That may be confusing to some, but it provides real transparency and real value.

 

All in all, I think these labeling systems are what are most interesting about the new site. After all, people couldn’t choose to eat healthy until labels were placed on foods. Same goes here.

 

 

Compartamos' Microfinance Operations in Mexico Sparks Debate: How Well is Too Well?

In the evolving world of doing good and doing well new tensions emerge all the time between the 'old' players that used to occupy the social impact space and some of the new faces on the block. The example that keeps coming up on my radar is that of Compartamos, a Mexican company that since 2000 has taken the micro-lending model into the for-profit sector and in so doing has made a bundle of money.

 

In April of 2007 about one third of the company was offered to the public in an IPO that generated nearly $500 million. The IPO created waves, not just because it placed the company's value above the billion dollar mark, proving that there is money to be made in servicing the world's underserved, but also because a host of critics vocally denounced the company's tactics and operations. The media attention ensued from the likes of The Economist, The Wall Street Journal, and of course The New York Times.

 

Criticism of Compartamos generally focus on two things: the moral argument that they are making too much money off the poor; and second, that Compartamos charges such high interest rates that instead of 'replacing' the  local money lender, they have actually become one.

 

Advocates of Compartamos point out that micro-finance has had limited reach and effect to date because non-profit models are simply not as scalable as for-profit ones since they don’t have access to the same large sums of capital. Also, they note that interest rates on Compartamos loans have decreased steadily over the last several years as Compartamos' cost has decreased due to its for-profit orientation.

 

While I think there are some valid concerns and a debate is always welcome, it is hard for me to believe that the negative here outweighs the positive. A lot of the emotion has been stirred up here and in my mind it's not really because of the interest rates but because of the idea that someone is making money off the poor. After all, as The New York Times point out Compartamos's interest rates are in line with what other non-profits charge in Mexico, saying "Compartamos’s rates are only a few percentage points higher than Pro Mujer’s [a non-profit], for example".

 

That Compartamos cost in providing the loans is actually lower than it used to be and then it is for your typical non-profit only proves the point that we must have for-profit institutions entering spaces like these to lower cost and increase competition. Yes, for now interest rates on the loans have not decreased. But with a $1 Billion dollar valuation I have to believe that someone out there is saying "I can do that". As soon as they do, competition will take over and with it interest rates will likely come down over time as will profit margins (as they do with almost every industry as it matures).

 

Last, I think there is validity in asking "how much is too much" profit, especially when a business is targeting poor customers, but the greatest moral question in my mind should not be around how much money is being made, but rather how well the customer is being served compared to what services were available to them previously. Since businesses had largely ignored these customers until very recently, to me the answer seems clear.

Carbon Credit News: TerraPass Sets Transparency Standard as JP Morgan Acquires ClimateCare

A number of interesting things happening in the carbon credit world these days. UK-based ClimateCare, (one of the earlier pioneering carbon offset providers), is being acquired by JP Morgan and merged into their environmental markets group. This move signals the pending arrival of carbon trading as a big business that can generate real profits for some big players.

Simultaneously, I found this interesting tidbit through Treehugger, about a program TerraPass has begun in order to make transparent which projects the company supports with carbon credits purchased through its programs. TerraPass will post the projects on its site and actually open it up for comments from users and purchasers for a 30 day period prior to supporting the project.

For Profit, Non-Profit, or in Between?

The New York Times this past Sunday reported on the increasing trend of organizations with social missions to take for-profit legal forms rather than non-profit ones. The article talks about ePals, an online social learning site which started out as a non-profit but decided to make the switch over. 

There are a number of reasons why an organization with a social mission might prefer for-profit status. First and foremost in my mind is the ability of a for-profit organization to gain access to the for-profit capital markets. These in turn helps make the organization more scalable and help it to grow it with resources beyond what would have been available to it as a non-profit. Second, a for-profit orientation and bottom line focus often can help unsure the long-term viability and sustainability of an operation by making it a goal to have the funding of its operations occur from revenue generated rather than from or by outside donors. Finally, more flexibility often comes with a for-profit status.  This, for example, made Google.org go this route, since it wanted to make investments in other for-profit enterprises.

Somerville, Texas Takes On Warren Buffett and Burlington Northern

I can’t help but read anything that comes across my desk with the name Warren Buffet on it. These days those items tend to involve issues around social responsibility. Witness the PetroChina incident, where shareholders were actively calling for Buffett’s Berkshire Hathaway (BRK) to divest from the Chinese company whose subsidiary was doing business in war-ravaged Sudan. The latest item put out by CSRwire concerns Somerville, Texas a town saying that the burning of railroad ties by Burling North Santa Fe (BNI) is illegally releasing toxins into the air and causing disease and especially cancer in many of the town residents. As a result, the town put out an open letter to Warren Buffett, a shareholder in BNI, asking him to do something about it. “We all know you are one of the wealthiest Americans, very philanthropic and very influential. Do you know how the people of Somerville have suffered?” 

The Greening of Our New Year's Resolutions

Given that I'm thinking about my own new year's resolutions for 2008 (and the fact that its 60 degrees here in NYC) I found this article rather interesting.   The Worldchanging  blog writes about a survey by marketing consultancy Tiller, LLC that  says Americans are going green with their resolutions this year.  Some highlights:

• 75% Say They Are Very or Somewhat Likely to Reduce Energy Consumption in'08;
• 74% Say They Are Likely to Recycle More
• Three in 10 Americans Admit to Feeling Guilty About NotLiving a More Environmentally Friendly Lifestyle

Does this mean that we are on the verge of a massive change in behavior?  I doubt it.  Every year it seems the whole country resolves to lose weight after the new year. Yet every year the obesity problems seems to get worse. Guilt just isn't the right motivation for getting people to actually change their behavior. What people do need is to connect to the feelings of how their lives would be better if they do make a change. Here's an idea: How about a green version of the show 'Biggest Loser' to kick things off? Find the biggest environmental offenders in the country and ween them of their wasteful ways on national TV. 

One quote in the press release about the survey says this: "Guilt is not going to save the environment, but at least it's a step in the right direction." I'm not sure that any step really matters unless it helps create a change, but time will tell on this one. And if the guilt is just an expression of a larger social awareness about the environment, then it is hard to argue that this is anything but good. Lets just hope we can start to feel good about the changes we are making rather than bad about the ones we aren't.

What the World Eats

 

 

 

 

 

 

 

 

 

 

 

I have seen very few things that so effectively help one visualize the differences in how people live all across the world. Photographer Peter Menzel and journalist Faith D'Alusio traveled to 24 countries, documenting 30 families and what each of them eat in a week (as well as how much they spend). The photographs (like the one above of an Ecuadorian family) are amazing and illuminating about variations about diet, culture, and economics. Some more pictures are below, but Time has recently put them online, so take a look at all the photos here.

Photos below are from North Carolina, Italy, and Chad:

 

Not Giving Up on the Little Green Lies

Little Green Lies was the title of a piece that business week ran two weeks ago highlighting just how hard it is to make sustainable and environmentally friendly decisions in a business. The article makes a number of great points about Renewable Energy Credits (RECs) that also spawned some interesting blog responses. But perhaps the more interesting point to me and that I want to focus on here is just this: that the capital a business has is normally finite, and even if it’s true that a certain environmental project may be cost-saving for a business from a financial standpoint over a ten-year period, there are often other things companies can do with that capital that offers an even better return. To sum it up, being a positive return on investment project isn’t good enough. A ‘greening’ or sustainability project needs to be better than any of my other project alternatives.

Paris Hilton, Rwanda, and Reality TV

It’s hard to imagine what late-night talk show monologues will be like without favorite punching bag Paris Hilton acting like an over-privileged brat. Yet after her emergence from prison we may have to get used to the idea.  According to Reuters, [Paris] “said she spent her time in jail reading the Bible and praying to God for strength, deciding to give new meaning to her life by pursuing charity work.” Her first official act as part of this transformation into and Audrey Hepburn/Angelina Jolie protégé: A trip to
Rwanda to visit schools and health-care clinics. And yes, the cameras will be rolling.

FNR: CSR, Vermont-Style; Dove Campaign Hypocritical?

* Marketwatch on CSR: Thomas Kostigen wrote a good piece this week on the changing tide of corporate and social responsibility. I posted a while back that corporations are, in essence, a collection of humans who have a responsibility to do what is right – it’s nice to see someone in the mainstream media espouse the same view. Kostigen laments the fact that, “many companies are short sighted” in their profit-seeking. I would add that, to their detriment, many companies also seek to appease the old-guard CSR-critics who refuse to acknowledge the new corporate and social environment.
MarketWatch: Doing the Right Thing

* The Ugly Side of Dove?: Beauty products maker Dove has reaped untold rewards with its “Campaign for Real Beauty” in which it fights the false images beauty companies foist upon women worldwide. But the ThirdWay blog brings up an interesting point: