WHAT IS A SUSTAINABLE CORPORATION?

This article looks into what a sustainable corporation is. What can we distil from the worlds of sustainability and business? What is the DNA of a sustainable corporation?

dna

These issues will of course vary. Different businesses operating in different industries or vertical markets will need to prioritise according to their specific needs.

But I would say that it is necessary to perform strongly in all of the following areas to be considered to be a sustainable corporation.

There are two extremely powerful numbers in sustainability, 100 & 0. I remember reading John Elkington’s book The Zeronauts: Breaking the Sustainability Barrier in November 2016. John delivers his own considered and powerful insights throughout the book. This article then is my own small homage to the greatest sustainability writer of all time.

1.     Zero faults

A sustainable corporation needs to be a high quality corporation. There are some consumers who are willing to pay for an inferior product with strong social and environmental credentials but they are few in number. Thankfully, sustainability can increasingly be seen as a proxy for good management and more and more organisations are making it a strategic priority.

When people opt for sustainable products or services, they need to be comparable on price and quality with other less sustainable options. This is imperative. If you can make them with higher quality properties, then this is ideal. Many early sustainable options such as recycled paper that was of low quality and that would jam printers were not up to the job. Thankfully the performance of sustainable options is improving all the time.

A company that I have written about before and that I will mention again because of their commitment to total quality management is General Electric. They were one of the most enthusiastic adopters of a zero faults approach. Over time they embedded the ethos into the workforce and into the products they create. This has dovetailed nicely with their more recent growth strategy Ecomagination. General Electric is an industry leader, doing great things on sustainability and their focus on zero faults has played a key part in their success.

A zero faults approach is key to becoming a sustainable corporation.

2.   Zero waste

Waste is a bad thing; it is a word with negative connotations which is impossible to spin in a positive direction. If you have created waste, you have failed and you must readdress your processes.

The waste hierarchy shows the way forward. It should be implemented

waste_hierarchy-1so63c

Anyone can order their waste to be collected and sent to a landfill or to an energy from waste plant. That takes no skill or courage. It is bad for the environment and it is wasteful.

Becoming zero waste requires commitment, farsightedness and smart processes. These can involve self-loading single material collections where you can receive a payment for your recyclable materials.

There may be opportunities to re-use materials in some fashion. Again, this requires networking and some degree of effort to match people who are looking for materials that are surplus to your requirements. A great charity that I have been impressed by recently is the Watford Recycling Arts Project (WRAP). They specialise in the recycling and repurposing of ethically sourced commercial waste for creative enterprise. They have a really interesting subscription based business model and they do an incredible job at diverting waste from landfill and incinerators. You can find a link to their website below.

Watford Recycling Arts Project (WRAP) Website

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Higher up the waste hierarchy is the holy grail of waste management, prevention. This strategy offers big savings but it’s often the hardest to do. Preventing waste from being generated is almost always the most sustainable option.

Becoming a zero waste business is a crucial element of being considered as a sustainable corporation.

3.   Zero pollution

Zero pollution is a goal, which like zero waste is challenging to achieve. But the archetypal sustainable corporation must have it as part of their mission statement.

A great company in this regard is Patagonia, who have the following inspiring mission statement.

“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”

Again, becoming zero pollution is a lengthy process that requires commitment and smart processes. Some things can be done more easily though, such as procuring renewable energy, having an all-electric fleet and prioritising train travel and video teleconferencing above business air travel.  These quick wins should be targeted early before other more challenging pollution sources are eliminated.

Sustainable corporations have a desire to take less from the earth socially and environmentally and as such they must push to becoming zero pollution businesses.

4.   Zero unethical actions

On paper, this may look like the easiest to achieve, but it is still a tall order. What does your company represent? What do people think about when your company’s name is mentioned? Do they think of a brand that is providing solutions to the world’s problems or do they think of a brand that is adding to the world’s problems.

A key way to demonstrate ethical actions and behaviours is through a commitment to being net positive. Being less bad is not inspirational. Aiming to be net positive can act as a catalyst for sustainable actions and innovations. It’s about giving back more than you take out. In this regard, the Net Positive Project has done much to raise the profile of businesses who aim to behave in the most ethical fashion possible.

Sustainable corporations must aim for zero unethical actions.

What you need to know

This article looked into what a sustainable corporation is. We looked into what the key factors are that make up the DNA of a sustainable corporation. These are:

1.     Zero faults

2.    Zero waste

3.    Zero pollution

4.    Zero unethical actions

Although it is a difficult path to being considered to be a sustainable corporation, it is ultimately worth it.

We looked at examples of companies that have reaped organisational and brand benefits from their commitment to sustainability.

A sustainable future will have to be made up of an economy of sustainable corporations, we need more of them. The key ingredient that cuts through all four of the factors is leadership. We need more bold leaders.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. What do you think a sustainable corporation is?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

WHAT MAKES A SUSTAINABILITY REPORT A GREAT SUSTAINABILITY REPORT

This article looks into what makes a sustainability report a great sustainability report. What makes a report memorable, what makes it stand out from the crowd?

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These days, sustainability reporting has become a mainstream activity.

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As you can see from the chart above, once you reach the stage where 82% of companies in the S&P 500 are reporting on their sustainability performance, you definitely have a mainstream activity.

There are lots of sustainability reports published every year. Many are dull and uninspiring. Others are difficult to read and full of technical jargon, indecipherable to all but the most committed experts.

In this article, I will go through what I consider to be the key ingredients that separate a run of the mill sustainability report from a great sustainability report.

1.  Vision

Great sustainability reports exude vision. They communicate to their stakeholders that they aim to dominate their industry, but do so in a way that takes less from the earth socially and environmentally.

Visions are powerful things. For more information on sustainability visions, please visit the link below.

HOW TO CREATE A GREAT SUSTAINABILITY VISION

One of the best sustainability reports that I have come across for vision, would be ARM’s 2015 report. You can find a link for this below.

Sustainability in a connected world

The report begins with their bold vision that:

Our mission is to deploy ARM-based technology, wherever computing happens.”

This is the sort of bold vision that employees, investors and other stakeholders can rally around.

Later they boast of their 488 engineers working on “blue sky” programmes. This is exactly the kind of progress that is needed to make sustainability happen.

ARM’s integration of the Sustainable Development Goals (SDG’s) into their report is also first rate. What is more impressive though, is their ability and ambition to contribute in some small way to all 17 of these exponential goals.

I understand not all businesses can be like ARM. But I have seen a trend towards businesses giving up before they have even begun and declaring that only a small number are relevant to their business. They are all relevant.

Visions are powerful things. Peter Senge said it best in The Fifth Discipline that:

It’s not what the vision is, it’s what the vision does.

So many bland visions fail to inspire anyone and probably didn’t even inspire the person who wrote them. ARM hit the sweet spot with their 2015 report, managing to blend crushing business acumen with care for society and the environment.

The key takeaway is that if you want your sustainability report to be great  and stand out, create an authentic, inspiring vision and run with it. You’ll know when you get there.

2.  Stories

Alongside visions, stories are powerful phenomena. They can make the big and complex small and easy to understand. This is certainly helpful in sustainability.

The ability to tell a story or stories can transform your sustainability report from being good to being great. It can make investors think differently about your business, it can make your current employees want to stay or prospective candidates want to join your business. It can make your sustainability report stand out.

Stories are the bridge that connects your sustainability data into real and meaningful information that is useful and memorable to the reader. There is so much information out there, there are so many reports. If you tell a story or series of stories in your report, there is a good chance that that is what the reader will remember.

In this regard, one of the best sustainability reports that I have seen integrate powerful stories was Carillion’s 2016 sustainability report. You can find a link to this below.

How we’re making tomorrow a better place

Carillion integrate inspiring stories about the people who actually deliver their international operations throughout the report.

There are stories about health and safety achievements in the UK, decent living and working conditions in the Middle East, customer service excellence in the UK, training and work placements in Liverpool and stories about wind and hydro power in Canada.

The report takes you on a real journey. Unlike other reports it comes across as very bottom up and participatory and not top down and hierarchical. It comes across as authentic. The stories take you on a journey, they are touching and they are memorable.

The key takeaway if you want to create a great sustainability report is to tell powerful stories. Tell one or tell many. Make it inspirational and make the report seem like the work of the entire company and not just the sustainability team and the board.

3.   Move people

Great sustainability reports move people. They are more than the sum of their parts. If a report is great it will be read by more people than you think.

Words are powerful. When used in the right order they can inspire people and make sustainability irresistible. You never know who might be reading your report.

Maybe someone from within or outside your business has become complacent about sustainability. You can touch them; you can move them from complacency.

There may be others who are just drifting and not yet fully on board and engaged in the sustainability process. You can move them.

There may be readers who are taken a back by one of your stories. They could be a millionaire or someone of modest means. But you can move them with your stories.

Maybe you did something remarkable last year. Just by writing down what happened, you can move people.

Maybe your business had a dilemma; maybe you were bold enough to communicate about your failures as well as your successes. You can touch people with your honesty.

Maybe you have a wicked problem, which you are not sure you can solve. A reader could be touched by your problem. They could reach out to you. Stranger things have happened.

This happened to me this year whilst I was reading the Canary Wharf Group 2016 sustainability report. You can find a link to this below.

EVOLUTION 2016 SUSTAINABILITY REPORT

It is a fantastic report. I was moved by their vision for sustainability in the built environment, I was touched by their focus on wellbeing and climate change adaptation and I was inspired by their action on waste minimisation and recycling. Just by writing things down you can move people, you can change who people are.

The key takeaway if you want to create a great sustainability report is that you need to move people. The stakes are so high and the competition is so intense, that if you don’t move people, your report will not stand out.

What you need to know

This article looked into what makes a sustainability report a great sustainability report. We looked into what makes a report stand out from the crowd. The key areas that I identified are as follows:

1.  Vision

2.   Stories

3.   Move people

A bold vision will inspire your employees and hook readers in.

Stories used throughout your report will give context to your report and make it memorable.

When creating your report you should aim to move people. Don’t aim to be good, aim to be remarkable. Great sustainability reports move people. They change how the reader thinks about things. By changing how people think, your report can have an exponential impact.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. What do you think makes a sustainability report great? It’s good to hear other people’s thoughts and opinions.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

 

DRAWDOWN EDITED BY PAUL HAWKEN

This article looks at Paul Hawken’s latest work, an edited book which claims to be: “the most comprehensive plan ever proposed to reverse global warming.” One thing is for sure, is that if this book even gets close to achieving its stated aim, it will be a masterpiece.

Introduction cover

The work that Paul Hawken is best known for is his seminal work, The Ecology of Commerce. This is a major contribution to the literature in defining what businesses role is in society. Paul Hawken fights for a robust version of sustainability where the triple bottom line is fully implemented and adhered to. I know reading The Ecology of Commerce marked a major turning point in how I viewed businesses. But there are countless others, such as Ray Anderson of Interface carpets who have read The Ecology of Commerce and had their lives changed. I was really excited when I heard that a new Paul Hawken book was being released especially based on all of the promotional material that I had seen before its release. Let’s see if it lived up to the hype.

About the book

First of all, in terms of aesthetics, the book is stunningly well produced, with many exquisite pictures and a good layout. I don’t know if it was because it is designed to be a coffee table book, but I do think that bearing the subject matter in mind, the design could have been slightly smaller and more in keeping with sustainability. Again, I only pick up on this because of the nature of the message that the book is intending to communicate, but I could not find a FSC or PEFC logo anywhere on my edition of the book. If it is the case that it has been printed on paper which was not sourced responsibly, then that is regrettable.

In terms of language, the book has a noble vision. It states:

Our goal is to present climate science and solutions in language that is accessible and compelling to the broadest audience, from ninth graders to pipe fitters, from graduate students to farmers.

I would say on reflection that despite the tough and quite complicated and technical subject matter that they have done a pretty good job at making it accessible to a wide range of audiences.  The book also avoids the use of military language, something which I find interesting. Words such as combat and slash have become commonplace in the language of climate change. When I read about their pledge at the beginning of the book I wondered how they would manage this, but throughout the book, no military language can be found. I have to say I think this a good thing, if you can get your message across using non-violent language then that has to be better.

The book pulls together some fantastic figures, such as the Swedish statistic that for every tonne of general waste incinerated, there is a 1,100 pound CO2 saving compared to if it was landfilled.

I found the piece on distributed energy storage particularly interesting, which came in at number 77 in the Drawdown 100. Its role as a facilitator of other renewable energy sources is certainly vital.

The section on food was my favourite. Eating a plant-rich diet came in at number 4, reducing food waste came in at number 3, silvopasture came in at number 9, regenerative agriculture came in at number 11, tree intercropping came in at number 17, conservation agriculture came in at number 16, tropical staple trees came in at number 14 and managed grazing came in at number 19. It is truly remarkable that out of the top 20 solutions to climate change 8 come from within the food sector. This has to be an area where more attention is focussed so that we don’t accidentally sleepwalk past an important area where the solutions are located.

The buildings and cities section was also interesting. Walkable cities came in at number 54. There was the incredible statistic that in low-income countries, 70% of urban transportation budgets go towards car oriented infrastructure, but 70% of trips are taken by foot or mass transit. This miss allocation of capital needs to change for sustainability to become a reality. The piece on bike infrastructure was good and this solution came in at number 59. No surprises there, areas with bike lanes tend to find that a lot of people cycle. This needs to become commonplace in cites around the world and not merely in a few isolated islands of cycling progress. The segment on LED lighting was also moving, which came in at number 33 for households and 44 for commercial. I found the statistic that more than 1 billion people are still left in the dark when the sun sets hard to fathom. It makes it clear the need to make considerable cuts to emissions in developed countries as there are those in developing countries who have yet to taste prosperity and must be lifted out of poverty and into a lifestyle that will no doubt entail more carbon emissions than in their present state. My personal favourite solution, heat pumps came in at number 44. I was expecting it to be a dark horse and perhaps make the top 10 or 20. That being said the book is a breakdown of the top 100 solutions, they are all needed and they are all important if we are to build a better world. I thought the section on retrofitting was particularly well written as well as the Rocky Mountain Institute solution to make retrofitting cheaper by doing select areas simultaneously and all with the same proven technologies.

The land use section was also wonderful. Forest protection came in at number 38, tropical forests came in at number 5 highlighting their role as the world’s most valuable ecosystem. I was thrilled to see bamboo come in at number 35, its role as a species that works on degraded land and provides useful products with carbon benefits was highlighted. Peatlands came in at number 13, temperate forests came in at number 12 and afforestation came in at number 15. I thought it was instructive that in the afforestation piece, it was demonstrated that to afforest an additional 204 million acres of marginal land by 2050 would cost $29 billion, but that the plantations would yield a net profit of over $392 billion and reduce CO2 by 18.06 gigatons. When the money that is spent on other things and the money that is sloshing around the international system is taken into account, $29 billion is a small investment for such dramatic results.

The transport section was also really good. Mass transit came in at number 37, there were many good arguments put forward in the high speed rail piece, which came in at 66. Electric vehicles came in at 26, electric bikes came in at 69 and telepresence came in at 63.

The materials section also had a lot of useful information as well as the number 1 solution. Household recycling came in at number 55 and industrial recycling at 56. The number 1 solution was refrigeration, which came in with an 89.74 gigaton reduction in CO2. It is clear that more attention must now be placed on this pertinent area. Recycled paper came in at 70 and bioplastic came in at 47, whilst home water saving came in at 46.

There was also a future facing section that detailed 20 solutions that were in various stages of development but were not ready to scale globally just yet. In this section there was an excellent segment on how autonomous vehicles are needed to save urban areas from the motor car, but that these vehicles mush have a high occupancy rate for their full benefits to be revealed. The piece on living buildings was excellent and set out a vision for buildings that contribute to the greater good and not just be less bad. The section on hydrogen-boron fusion was also stunningly well written as well as thought provoking. The section on the hyperloop was very interesting; this is an emergent technology with many pros and cons. The section on industrial hemp also brought up a number of interesting points that I had not thought of such as its cost. I thought it was strange to include building with wood in the futurology section as there are a great many wooden skyscrapers being built as we speak, but this item was also well written.

What you need to know

This is a really important contribution to the climate change literature. When it is combined with the other work that will be updated on http://www.drawdown.org/ what they have created is a very important piece of work.

My only criticisms would be that perhaps a layout where it was numbered 100-1 would be better. Also, the content of the book is stunning, but I don’t know whether it was because it is a compilation of writers work, but it felt less joined up than I anticipated it would be. That being said, what Paul Hawken and his colleagues at Drawdown.org have managed to put together is a masterpiece. If you are interested in sustainability, worried about climate change or just want to build a better world but don’t know what to do, buy this book.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. If you liked this book review and would like to see more articles like this, comment at the bottom or you can also find me on social media.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

 

CLIMATE WEEK 2017

This article looks into Climate Week 2017. What are the key takeaways from this year’s event and what can we learn for the future.

Climate Week pic

Climate Week took place from 18-24 September 2017. It has been one of the key dates in the international calendar for driving the climate agenda forward since it was launched in 2009. We have come a long way since then.

I would say that it has a good mix of government activity, business representation and NGO representation. Sometimes these events can get pulled too much in one direction but Climate Week manages to find a sweet spot between these three competing agendas.

This year it was centered on the slogan of innovation, jobs & prosperity. I can’t fault this whatsoever, it is very positive and optimistic, whilst also hammering home the idea that this is a business issue as much as it is any other type of issue.

climate slogan

For me, the key takeaways from this year’s event would be the incredible robustness of businesses commitment to tackling climate change. That was really good to see. I have linked some of the best words I came across on this year’s event below.

At Climate Week NYC, business leaders charge forward

The incredible excitement and passion shown by many state, municipal and city leaders was also heart-warming. Climate change is a global issue, but its solutions are profoundly local. These leaders in local areas have the power to change the world.

The third big takeaway for me was the incredible excitement that continues to surround electric vehicles. For more information on this, please visit the link below.

The Climate Group Launches Pioneering Global EV Campaign at Climate Week NYC

Lastly, on the political front, Nicaragua’s decision to join the Paris Climate Agreement was unexpected and momentous. For more on this, please see below.

Nicaragua to join Paris climate deal

In terms of what we can learn for the future, I definitely think there is scope for Climate Week to become more global in scope. Climate Week NYC is meant to be the collaborative space for climate-related events in support of the implementation of the Paris Agreement and the achievement of the UN Sustainable Development Goals.

But my experience of being denied affiliate status for my events as they were not held in New York was disappointing. Climate change is a global phenomenon that will shape every corner of the earth. I think that a more coordinated, global approach with people encouraged to host their own events under the Climate Week banner would go a long way to raising the profile of climate change at the UN General Assembly. The UN assembly was hijacked by geopolitical manoeuvring; this cannot continue to happen as climate change was conspicuous in its absence from the UN this year. A more global orientation for Climate Week 2018 would address this.

What you need to know

Climate Week 2017 was a success. There were lots of positive takeaways from this year’s event. But a more global focus would allow it to exact leverage from the UN General Assembly that it is designed to coincide with.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. What was your experience of Climate Week 2017?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

CAPITALISM LIKE YOU HAVE NEVER SEEN IT BEFORE

This article revolves around the life and work of a great man. This great man’s name is Titus Salt.

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After being exposed to information about the life of Titus Salt for the first time, it made me think differently about businesses role in society. Hopefully by reading this, I can change the way you think about corporate social responsibility.

Titus Salt was born in Morley near Leeds on the 20th September 1803. During his remarkable life he wore many hats. He was at one point a manufacturer, a politician, and a philanthropist. His greatest legacy is having built Salt’s Mill, a large and at that time highly advanced textile mill, and the accompanying village of Saltaire. Let’s look into the story of this remarkable man.

Titus Salt had good lineage. At age 30 he took over the running of his father’s business. By the time he was 40 he was a rich man. By 50 he was the largest employer in Bradford. He accumulated the vast majority of his wealth from weaving cloth.

Salt’s major contribution to this industry was his pioneering use of Alpaca wool, from which he was able to produce cloth with silk like qualities. Titus’s discovery of the cloth in a Liverpool dockyard is serialised in Charles Dickens’s Household Words. Interestingly, Dickens visited Saltaire in 1852, we shall see what other guests Titus hosted later.

Saltaire

The origins of Titus Salt’s desire to build his factory and the accompanying model village are unknown. There is a tradition of Yorkshire employers building infrastructure around their operations, but nothing as fine as Saltaire.

Between 1800-1850 Bradford underwent a period of rampant industrialisation. People flocked to Bradford from the countryside for jobs. The arrivals outpaced the city’s ability to provide infrastructure.

The scenes in Bradford during this period were nothing short of chaotic. Not only was this a steep period of social decline, but whist the economy boomed the environment paid a heavy price. Massive amounts of pollution, from industry and from households poured into the air, the water and into the streets. Bradford was a squalid place to live and to work.

Titus Salt had experience of living and working in Bradford between 1822-1850. He had seen first-hand what a ruinous state the city had fallen into. Perhaps Titus was driven to create Saltaire, partly out of his own benevolence towards his workers and perhaps partly out of a desire to lay down a new moral order for his workforce whilst Bradford decayed.

Woolcombing workers during this time would commonly have slept with a family of 15 living cheek by jowl in a dwelling of 2 rooms. The average life expectancy for those living in the town was a remarkable 18. The conditions do not bear thinking about, this is Dickins’s Britain. In 1849 a cholera epidemic killed 420 residents. Titus Salt had seen enough, he set out to improve the moral and religious character of the town. saltaire 2Between 1853-1870 Salt invested significant quantities of his own capital into the creation of Salt’s Mill and Saltaire. No expense was spared as he aimed to create his utopia. When the mill first opened, Salt commissioned a special railway service to take the workers to and from the city.

The facilities that Salt provided for his workers were a quantum leap from anything available for workers in the city. Titus Salt charged modest rents and for those lucky enough to be housed in Saltaire, their prospects were good. Inside the model village, there was the Saltaire Club and Institute, (pictured below) which had: a library, a reading room, a games room, a smoking room, a lecture theatre, a concert hall, a rifle range and a gym. There were also factory schools and Saltaire Hospital. Titus Salt catered for his workers in a way that few entrepreneurs before or since have. download

Saltire caught the eye of many in the Victorian age and he was lucky to have a number of high profile visits. These included Lord Palmerston, John Bright, the Prime Minister of New Zealand and ambassadors from Burma and Japan who all visited whilst Salt was alive. There have been a great many more important visits since.

Titus Salt, a man who led a remarkable life, was equally remarkable in death. Salt’s death was noted in every newspaper at the time and in many foreign news outlets as well. Special trains were run from the centre of Bradford so that those who worked for, or whose lives were impacted by Titus Salt could pay their last respects.

The mood in the local area after his passing was sombre. A great man, who had touched the lives of many, had passed. The list for his funeral was extensive. Throughout his wild and varied life Titus had been associated with and funded a number of clubs, charities and societies. These were all invited to attend. As Titus Salt passed through the town he loved for one last time, his cortege was greeted by over 100,000 spectators. This is a truly remarkable number, more reminiscent of royal funeral.

What you need to know

In his life as well as in death, everything Titus achieved was about people. It is about the people who worked for him, the people he traded with and the people who lived in his utopian model village of Saltaire. It’s about the countless people who had their life chances extended thanks to his farsightedness. He sets a very high standard, the gold standard in corporate social responsibility. He did it because it made business sense, it made social sense and it made environmental sense. We can all learn a lot from the life and times of Titus Salt.

Thank you for reading,

By Barnaby Nash

What do you think of Titus Salt? Please share your thoughts in the comments section below. If you liked this type of bibliographical article and would like to see more like this, comment at the bottom. You can also find me on social media.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

CAN WE AVOID ANOTHER FINANCIAL CRISIS – STEVE KEEN

This week I have a book review of Steve Keen’s latest offering: Can we avoid another financial crisis? I really enjoyed Steve Keen’s other book, Debunking Economics and I have been looking forward to this new book all year.

book cover

Introduction

Introducing this book, I should say from the outset, that if you were worried that an economics book would be all equations, tables and statistics, then fear not. Steve Keen writes in a critical yet approachable manner. He cuts through the noise and through the data to give the reader the information they need to understand what is really going on in the world.

Steve Keen is the maverick leather jacket wearing economist that you may have seen on TV. He sees the world differently, he thinks differently. As a result, he was one of only a handful of economists that predicted the global financial crisis. He is therefore a leading authority to speculate as to whether we can avoid another financial crisis.

About the book

The book is short, considerably shorter than his previous treatise Debunking Economics. But that can have its advantages, it can allow the writer to hone in and really prosecute one argument. Steve Keen takes full advantage of this and drives home his consistent message. The field of economics is broken. Just as the astronomers who thought the sun revolved around the earth were eventually proven wrong. Modern mainstream economists are also wrong. Let’s see how.

Would it surprise you to know that economic bodies like the OECD were forecasting that 2008 would be a bumper year? It surprised me. Their prognosis was that: “the current economic situation is in many ways better than what we have experienced in years.” You don’t need to be an economics professor to know that this prediction was well wide of the mark.

What if I also told you that mainstream economics believes that the macroeconomy should be modelled as if money, banks and debt did not exist? You would say I was a liar, but it is absolutely correct. Steve Keen describes this succinctly as their “barter illusion” this fantasy that capitalism can be analysed without considering money at all. If you want to check up on this, you can visit the Bank of England’s paper ‘Money Creation in the Modern Economy.’ Steve Keen frequently uses Bank of England, Federal Reserve and Bank For International Settlements data to back up his arguments. This only strengthens his position.

What is clear is that debt, specifically private debt plays a vital but pernicious role in a modern capitalist economy. You don’t hear a lot about this in the media, where the focus is primarily on national debt and its size. Take private debt in the USA, it grew from 37% of GDP in 1945 to 165% of GDP in 2008. This is staggering. By March 2016 the USA had cut this back, but only to a still eye watering 149% of GDP in 2016. What I found truly outstanding was that Australia’s private debt mountain was 208% of GDP in March 2016, 22% higher than at the time of the financial crisis. The UK’s figures are also remarkable, as the graph below demonstrates. Private debt, which had never been above 75% of GDP, rose from 60% in the late 1970s to a peak of 197% of GDP in mid-2009.

UK Private debt

After all that, what are some solutions and a roadmap guiding the way forward? Firstly, we need a greater understanding that what we are dealing with is a complex phenomenon. Other sciences have got to grips with the fact that higher order phenomena cannot be directly extrapolated from lower order systems. In complex systems, the key is the interaction between the entities. We need a much bigger role for complexity theory in modern economics.

Secondly, greater appreciation needs to be paid to the role of private debt in the economic growth of a country. Some politicians catch a market at its lows, ride the bubble up and are crowned as economic geniuses. Some politicians catch the market on its highs, see it burst on their watch and are thus heckled as fools. A greater appreciation of the role of private debt by the general public would help the political process a great deal.

Thirdly, the most radical option would be for a modern debt jubilee. Where money would be injected into bank accounts, those with debt would be forced to write debt off, those without debt would get a cash injection. This is a bold vision that Steve Keen puts forward and he admits that it is easier stated than implemented.

What you need to know

In quick summary this is a fantastic book, very accessible, full of lots of great facts anecdotes and insights. Whether you are an economic pro or just interested in building a better world, this book is suitable for a wide range of audiences. Buy this book now.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. If you liked this book review and would like to see more articles like this, comment at the bottom or you can also find me on social media.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

P.S.

Since writing this review and before publishing I was thinking a lot about the Einstein quotation “We cannot solve our problems with the same thinking we used when we created them.” I think this is highly relevant to what is going on in economics. Sure, a few laws were passed and regulation reinstated or amended, but very little has changed since the global financial crisis. By and large the outsiders who predicted the financial crisis have seen very little increase in their public standing. Steve keen and a select group of others managed to predict the biggest economic event of our lifetimes. We should listen to them; we should listen to what they have to say. I find it hard to believe that those institutions and individuals who let the global financial crisis take them by surprise have the solutions to the problems we face.

ARGUMENTS FOR CUP AND BOTTLE DEPOSITS

This article looks into cup and bottle deposits from the point of view of sustainability. How do these schemes work and do they help increase recycling?

How do these schemes work?

Let’s take one example, from the Reading music festival; the text below is copied from their website.

Every bar cup and all plastic bottles that you purchase at Reading will have a returnable deposit of 10p.  Minimum of 10 items for £1, a full recycling bag of bottles is worth £5.  There is a dedicated return point in the arena (marked on the site map) where you can redeem your deposit.

The goal here is to encourage high rates of recycling. The consumer has the opportunity to receive their refund by returning their bottle or cup, or legally or illegally disposing of their goods.

In the case of non-returned bottles or cups, the merchant will realise a small profit on each occasion that this happens. Over the course of a large festival, this could amount to a significant quantity of money.

In the Unites States, recycling rates in states with bottle deposit schemes are roughly double those of states without deposit schemes.

Another nudge scheme, the plastic bag tax has had an astonishing effect, in cutting plastic bag usage by 85%.

Plastic bag use plummets in England since 5p charge

These small incentives can have a big impact. Litter is becoming a serious environmental problem and solutions like these are necessary to tackle this head on.

The economic incentive is working.

What are the benefits to sustainability?

  • Recycling rather than landfilling or incinerating important materials
  • Visual benefits of litter reduction
  • Customer engagement in the recycling process

There are no real costs; any argument that it unfairly punishes low income consumers doesn’t hold water. The deposit is small and only those who fail to return their containers loose out. The collection and recovery of the containers also forms part of a daily routine for those who are homeless and least fortunate so that they can access vital funds. There is no rational argument against such a scheme.

Watch the video below, to see how in Japan, bottle collection plays an important role in the lives of homeless people in that country.

Homeless in Japan

What to do with the money of non-returned items is a hot button issue. There are those who argue that the integrity of such a scheme rests on the merchant not benefiting when customers do not return their containers. I would have to support that statement.

Bins at reading

My experience at the Reading music festival was that firstly I did not consider their recycling facilities to be of a sufficient standard and secondly that it was not particularly easy to claim refunds. There had to be 10 cups to get a refund and the locations were few and closed early.

cup and bottle return point

When this happens, it reflects badly on the recycling process and sustainability more broadly.  People who are unaccustomed to just how important and necessary such practices are leave feeling scammed. If you are going to do a scheme like this, you have to execute it properly, anything less is a dereliction of your corporate social responsibility.

The key is you need to make returning the containers and receiving your refund as easy as possible. This cannot be emphasised strongly enough.

You have to be able to claim 1 refund back if you want to and there has to be a lot of options. Having it done by machine means that it can be available 24/7.

Netherlands Bottle return

The reverse vending machines located in almost all supermarkets in the Netherlands are a great idea to engage citizens in the recycling process. You can make taking your plastic bottles to such machines part of a routine when you go to the supermarket. Their ubiquitous nature means that you are never far away from claiming a refund.

What you need to know

This article looked into cup and bottle deposits from the point of view of sustainability.

We analysed how these schemes work. They work by levying a small charge on the purchase of each disposable cup or bottle. This deposit is then refundable when the customer returns the container via the proper channel.

We looked into how these schemes correlate with increasing recycling and sustainability. In theory, these schemes should work. Similar micro charges have resulted in exponential outcomes.

But the success of the scheme depends on how well it is executed. If there is not a lot of ways to claim the refund, they will be left on the floor or in the recycling and general waste bins, violating the purpose of the scheme.

This can be improved by an escrow system whereby money on non-refunded cups is donated to a worthy cause.

Overall, the key is to make returning the containers and receiving the refund as easy as possible.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below. It’s great to hear about other people’s experiences in taking sustainability forward.

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

P.S.

I also encountered another well-meaning but poorly executed cup deposit scheme this weekend at the Twickenham stadium.

IMG_20170902_135145

IMG_20170902_184619

As you can see from the pictures, this scheme involves a £1 deposit on each cup, which is a sturdier, re-usable Perspex variety. You were unable to receive refunds at the bars, only from the specific refund kiosks. As is evident in the second photo, the queue for refunds at the end was nothing short of legendary. Activities like this reflect poorly on recycling and sustainability. If you are going to initiate a cup deposit scheme you have to make it as easy as possible for people to redeem their refund.