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Integral Capitalism and Governance The Emergence of a Sustainable Future: Brainstorming Better Ways to Globalize
Contents 1) Introduction In their path-breaking work, Natural Capitalism, Amory and Hunter Lovins and Paul Hawken make a forceful case for including the natural environment among the factors of production in capitalist economics. In addition to human capital, labor, and fixed capital, machinery, and financial capital, we need to count air, water, topsoil and our genetic inheritance as critical inputs, not as "externalities" that come for free. According to the argument of Natural Capitalism, the careful conservation of natural resources is not just a cost of doing business. By expanding our inventory of the factors of production to include Mother Nature, we can produce and consume more wisely, more sustainably, and, over the not very long term, more profitably. This is not the place to recapitulate the whole argument, which is well documented and subtle, but to note that the book, Natural Capitalism, sets the stage for a series of conferences with the title, "Integral Capitalism and Governance." At these conferences, participants address the question: If natural capitalism is such a good idea, why aren't we seeing more of it? What are the obstacles to natural capitalism, be they psychological, intellectual, economic, legal or political? Where are the leverage points for overcoming those obstacles? Co-facilitated by Amory Lovins of Rocky Mountain Institute, Hunter Lovins of Natural Capitalism Group, Walter Link of Global Academy, Jay Ogilvy of Global Business Network, the second annual gathering took place at Esalen Institute on California's Big Sur coastline. Twenty participants ranging from ecologically-minded CEOs and business executives to natural systems designers and global mediators engaged in a four day brainstorming session. In an attempt to address the full scope of the challenge of globalization, the central question that guided the week's conversation was intentionally broad and ambitious: What form of economy and governance, visionary yet practical, can meet the needs of people around the world and simultaneously preserve and enhance a livable environment for future generations? Coming from a variety of business and non-profit backgrounds, the participants included: Ray Anderson, founder and Chairman of Interface, one of the world's largest providers of carpeting, who was named co-Chairman of President Clinton's Council on Sustainable Development in 1997. Janine Benyus, who authored the environmental design guidebook Biomimicry. Anita Burke, a Senior Advisor on Sustainable Development and Climate Change at Shell Oil, Canada. Jeff Foote, Director, Corporate Environmental Affairs for Coca-Cola. John Gage, Chief Researcher and Director of the Science Office at Sun Microsystems. Jeff Gates, who describes himself as a recovering lawyer and lapsed merchant banker and is author of Democracy at Risk and The Ownership Solution. Mark Gerzon, Director of The Global Commons, a collaborative project to explore competing perspectives on globalization. Allen Hammond, Chief Information Officer and senior scientist at the World Resources Institute (WRI) and author of Which World?: Scenarios for the 21st Century. Mary Ellen Klee, an Esalen board member. Marc Luyckx, who has been working for the Presidents of the European Commission, Jacques Delors and Jacques Santer, as a member of the "Forward Studies Unit." Oscar Motomura, who is the founder and CEO of the Amana-Key Group based in Sao Paulo, Brazil. Andy Nusbaum, who acts as Esalen's Executive Director. Frank Poletti, Coordinator of Esalen's Center for Theory and Research. Will Rosenzweig, who teaches sustainable entrepreneurship at UC Berkeley and Columbia. Roger Saillant, who is CEO of Plug Power, a leading fuel cell manufacturer. Allison Sander, who works at Boston Consulting Group. Jeremy Sherman, who is President of Adaptive Strategies, a consulting company based in Berkeley. Raoul Weiler, who teaches at the University of Antwerp. And lastly, Gordon Wheeler, who is an Esalen board member and a prominent Gestalt psychologist. The facilitators guided the group through a series of discussions covering the nuances and complexities of globalization. During the breaks between discussions the participants basked in the beauty of the Pacific Ocean, whose azure waves glistened in the sunlight. Migrating gray whales periodically reminded participants why it is important to make progress toward fostering new models of sustainable capitalism. 2.) New Power Balances, New Technologies The Emerging Triad of Global Power Opening the conference, Hunter Lovins stated flatly that national governments are not getting the job done that needs to be done, namely to create an ecologically sustainable global economy. With governments mired in political mud-slinging and systemic ineffectiveness, two other forces have risen in recent years to form an emerging triad of global power along with traditional governmental structures: multi-national corporations (MNCs) and civil society. According to Lovins, these three should be considered as legitimate power forces on the global political scene today. Each exercises the right to delegitimize the other whenever and wherever necessary. Citing a prominent example, Allen Hammond from the World Resources Institute (WRI) pointed out that the December 1999 civil society protests in Seattle demonstrated that where governance bodies don't check the excesses of MNCs, active citizen interest groups will. Many at the conference felt that this emerging tri-polar network of overlapping checks and balances is preferable to a single worldwide government body, such as a fully funded United Nations, which might regulate the entire planet like one gigantic (and inefficient) bureaucracy. A New Global Force: An Internet-Empowered Civil Society The newest member of the global triad, civil society, has ascended in recent years due to the cleverness and motivation of internet-savvy activists who are making their voices heard around the globe. The rise of new citizen activist organizations, such as Global Forest Watch (GFW), is worth noting as an emerging global trend. Allen Hammond reported on the success of GFW's actions to protect endangered old growth forests from national governments and corporations that have attempted to transgress the rules. Young digitally-equipped activists have started taking video cameras into protected forests in order to stream live video footage to the GFW website where it can be seen by any and all and thus act to enforce transparency on corporations and governments. Recent examples of "busted" governments include the President of Gabon, whose "look the other way" oversight of the Gabon National Forest led to clear cutting in that region. Wily and provocative activists have used live video footage to embarrass similar world leaders at global summit meetings, where they have stood dumbfounded in front of a large audiences while footage of chainsaws and logging trucks rolled across the screen. In similar actions in North America Hammond noted that the lumber company Home Depot has been forced by activists from British Columbia to adopt sustainable forestry practices. Home Depot is now tagging lumber products with stickers that validate their sustainable status. New internet-empowered NGOs are becoming the marketplace adjudicators of the sustainable lumber industry. Hammond's goal at WRI is to grow these nascent regulatory bodies until they have secure endowments and well-respected reputations as reliable sources for accurate data about whether corporations are following regional forestry codes. Already the global furniture company IKEA has started advertising its products using independent certification stickers from NGOs like GFW. Hammond mentioned other internet creations that are making a difference. For example, real-time, continuously updated maps of the world? remaining old growth forests can now be found on the web. Such real-time information enables people to see the whole system. Very much in keeping with Stewart Brand's original insight that pictures of the whole earth could induce a broader sense of global solidarity and planetary awareness, Hammond hopes that if we can see what's left and what's gone on the whole earth's surface, that awareness will inspire the necessary actions for protection. Participants at the conference were quick to extend Hammond's model and apply it to other extractive and agricultural industries. "Watch-in-a-box" was the refrain. Several "watches" were brainstormed: Imagine a top soil removal watch, a global commons watch, a global money-flow watch, a corporate subsidies watch, a poultry watch that tracks levels of additives in poultry on grocery store shelves, and a local ownership watch?ll as potentially effective ways that an internet-empowered citizenry might leverage influence in the marketplace. In addition to WRI's forest watch, Amnesty International's human rights watch has already shown the way. Has this new method of citizen-inspired political activism become more important than the tried-and-true (read: unreliable and out-dated) method of activism called voting? The watch-in-a-box idea echoed throughout the week as the discussion touched on the several ways that global capitalism has stretched to the breaking point the feedback loops that should join human intentions to their long-term consequences. One of the reasons for the failure of Communism was its lack of feedback from a marketplace. Planned economies became literally stupid to the extent that they lacked feedback on whether their centrally planned, bureaucratic allocation of resources actually met human needs and desires. Capitalism has achieved greater success at meeting human needs because the market allows consumer choice to dictate the allocation of resources. But as markets expand from local to global, there is a danger that the linkages between human needs and global supplies can become distorted or altogether broken. Scale is an issue that Adam Smith may not have adequately considered. "Glocalization:" Can Globalization Attune Itself to the Local? Throughout the conference, Brazilian business consultant Oscar Motomura brought attention to the issue of scale. Globalization is not inherently bad, it just happens at such a large scale that it leads toward decisions that are out of touch with human needs and preferences. Author of the natural systems design manifesto Biomimicry, Janine Benyus echoed Motomura's thoughts by pointing to the importance of the new trend toward bioregionalism. Future regulatory bodies will need to attune laws and codes to the vast differences among the world's bioregions. Global rules for water use, for example, will distinguish the bioregional capacity of the Southwestern United States from that of the Amazon rainforest. On the global stage, governing bodies like the WTO are too often forced into a "one size fits all" mentality that misses the finer-grained distinctions of local bioregions. The conference participants agreed that a new emphasis that complements (not replaces) globalization should include such place-based sensitivity. In fact, information technology (called IT) should make the finer grained distinctions easier to track on a local scale. While IT may be the key to tracking both human needs and the allocation of resources, the intensification of monitoring and surveillance has its dangers. "Watch-in-a-box" has a shadow. High-Tech Future: Will There No Longer Be Any Privacy? Sun Microsystems chief technologist John Gage provided the conference participants with an update on some of the trends in technology that will be influencing globalization's future. Gage demonstrated on his lap-top the latest smart technology that combines multiple satellite views of the entire planet with linked computer databases. Within a few years, this technology will allow anyone with high speed internet access to visually "travel" on the computer screen virtually anywhere in the world with a fairly high level of resolution, high enough to read a car license plate. The roofing industry has already started to take advantage of this technology by taking high resolution photos of roofs and sending the results to home owners inducing them to invest in their services. Gage also mentioned that high technology sensors of different varieties are just starting to come into the market. Hot tubs, for example, will have heart rate sensors that will tell you when to get out of the tub. As of October 2001 cell phones have location homing devices that enable the police to know the location of a caller within 50 yards if 911 is dialed. Gage is committed to keeping the best known new technology, the world wide web, free and available to the public. Gage noted that SEC trading information is now publicly available on the web where it was once very expensive and difficult to obtain. Echoing Gage, Amory Lovins reminded everyone that, following Moore's Law, information will only get cheaper and privacy correspondingly more expensive. Jay Ogilvy suggested a twist on Andy Warhol's famous comment: in the future each of us will have 15 minutes of privacy, not 15 minutes of fame. 3.) "Glocalization:" Media Misrepresentation and "Glocal" Finance If feedback on the system's success at satisfying human needs is so important, and globalization is at risk of stretching and breaking the feedback loop, then information systems that facilitate accurate feedback are critical to the free market's superiority over planned economies. Information technology provides one mode of feedback, the media another. Are the media doing their job? Having recently facilitated a dialogue between leaders form the World Social Forum and World Economic Forum, Mark Gerzon of the Mediators Foundation led the group in an exercise clarifying the issues of globalization. What was interesting about the exercise was not the issues themselves, which included poverty, financing, access to resources, etc., but the clear sense from the group that the way the media portrays global issues is almost always polarizing. Using Thomas Friedman's terminology, the media tend to portray constituencies as either for the olive tree (symbolizing long-term, local interests) and against the Lexus (symbolizing unfettered globalization), or for the Lexus and against the olive tree, with no room in the middle for subtlety and complexity. Yet, globalization is not a pro or con, yes or no affair. Instead, it is a multi-faceted and complex process that needs solutions and conversations that demonstrate a finer attunement to local variations and complex and sometimes contradictory needs. Not adequate to the task, the mainstream media instead have dumbed-down these complexities and accentuated the polarities, which the public consumes in dramatic form on the evening news. Psychologist Gordon Wheeler pointed out that the moderate response of "being in the middle" to the pro- and anti-globalization extremes fails to grasp the real complexity of the issues. Instead, what many are seeking is a higher level description that captures a multi-faceted and complex response to globalization. Clearly, a more sophisticated citizen-based discourse needs to grow, particularly in the U.S. where the commercialization of the news drives a sensationalism that gets higher ratings on TV or in print. Author of The Ownership Solution, tax and finance expert Jeff Gates applied Benyus?comments on bioregionalism to ownership patterns in the global economy. One of the core problems with globalization is the lack of robust feedback from local communities. Decisions about a community in Mexico are being made in corporate boardrooms in London or Tokyo. The feedback loop that connects decisions to the people and places they affect has been severely withered by globalization. In its place, Gates has spearheaded a movement to re-invest in and reclaim local ownership. "To Solve for Pattern, You Must See the Pattern." Quoting the maverick biologist and information theorist Gregory Bateson, Jeff Gates introduced some statistics about the hidden financial flows that underlie the globalization process: No. 1) The wealth of the Forbes 400 richest Americans grew an average $1.44 billion each from 1998-2000, for an average daily increase of $1,920,000 per person ($240,000 per hour or 46,602 times the minimum wage). (See www.forbes.com. To compare wealth accumulation with earnings of the typical employee, the figures assume that wealth was amassed untaxed over a 40-hour week and a 50-week year.) No. 2) The financial wealth of the top one percent of US households now exceeds the combined household financial wealth of the bottom 95 percent. (Edward N. Wolff, "Recent Trends in Wealth Ownership," a paper for the conference on "Benefits and Mechanisms for Spreading Asset Ownership in the United States," New York University, December 10-12, 1998.) No. 3) The share of the nation' after-tax income received by the top one percent nearly doubled from 1979-1997. By 1998, that one percent had as much combined income as the 100 million Americans with the lowest earnings. (Congressional Budget Office Memorandum, Estimates of Federal Tax Liabilities for Individuals and Families by Income Categoy and Family Type for 1995 and 1999, May 1998.) No. 4) The top fifth of US households now claim 49.2 percent of national income while the bottom fifth gets by on 3.6 percent. (See www.census.gov "income" at Table H-2.) No. 5) Between 1979 and 1997, the average income of the richest fifth jumped from nine times the income of the poorest fifth to 15 times. (Reported in The Economist, June 16-22, 2001.) No. 6) The average hourly earnings for white-collar males was $19.24 in 1997, up from $19.18 in 1973. (Jill Anderson Fraser, White Collar Sweatshop: The Deterioration of Work and Its Rewards in Corporate America. New York: W.W. Norton, 2000.) These money flows-toward the already wealthy-and the financial design parameters that underlie them, are "the pattern" that only a few see. They are, as one participant put it, the "systems conditions" by which globalization operates. Offering a cogent overview of global finance, Gates pointed out that the behind-the-scene global financial game rarely is exposed by mainstream media, particularly in America. Emphasizing that we are already in the danger zone with respect to several global financial indicators, Gates warned that the Dow Jones is a sugar-coated indicator of global financial well-being. As the Dow has gone up and up, critical financial vital signs have plummeted, such as ownership patterns. America's wealth concentration has been out-paced globally, however. Gates cited an IMF estimate from five years ago that there were approximately 4.7 trillion dollars locked away in global tax havens. Today those estimates range between 13 and 15 trillion. To check this runaway trend, Gates has advocated a global "free-loader fee" which would impose a levy on tax evaders. Given the embarrassing fact that the US could not track the financial flows of the Al Qaeda, Gates thinks that in the post-911 era there may be just enough political will to accomplish this. Sounding the theme of the week, there was talk of "tax-haven-watch."
4.) New Global Identities: Complexity and Human Values The Future of Complex Human Identity in the Era of Globalization Globalization's economic impact grabs news headlines, but its social, psychological, and spiritual ramifications are subtler than headlines can encompass. How is the globalization process influencing the continued evolution of human identity? In an era of radical pluralism, people are beginning to explore novel identities, particularly those who no longer feel a sense of belonging to any specific place but feel instead like global citizens. Some conference participants speculated that people no longer need to be tied-down to a specific place to feel a sense of belonging. Soon we might not call ourselves Americans, Germans, Pakistanis, or Argentinians. Instead, human identity could evolve beyond the nation-state system altogether. But what will it evolve into? And what exactly is the identity of the new global citizen? Inquiring into these complex issues, Gordon Wheeler said that perhaps we need a new definition of "local" commensurate with the new planetary identity. Through the use of the internet and other communication technologies, we now have "localities" of interest and affinity that are not place-based. People are developing dispersed and multi-placed identities based on their "localities" of choice. Walter Link, for example, finds a meaningful sense of community not in a local place but in common values. Likewise, Jeremy Sherman said that he affiliates not with locality but with what he calls the "symbolic capital" of ideas, which transcend locality as traditionally defined. Reflecting on these comments, Frank Poletti suggested that we are witnessing the emergence of a more complex, multi-tiered identity, one that subsumes regional, nation-state, and planetary identities. European Union consultant Marc Luyckx commented that a significant portion of the American and European populations have become "transmoderns." Luckyx believes that we are witnessing the emergence of the age transmodernity, in which the nation-state no longer binds people together by blood and tears. Transmodern visions for the future will be based on commonly shared values, not bloodline. Luyckx suggested that the European Union is a prototype for such a values-based system. After years of laboring to create its new currency, the EU has accumulated a proto-transmodern wisdom for other regions of the globe to learn from. In effect, the EU has become an ad-hoc school in planetary ethics. Walter Link responded to Luyckx by noting that the success of the EU has been accompanied by a return to the local in Europe. Basque separatists and smaller ethnic groups in the former-Yugoslavia have reasserted their regional identities in recent years. But what do these groups really want? Gordon Wheeler suggested that there is a clear human need for belonging that is missing in the EU and UN. Supra-national bodies rarely offer people the visceral sense of belonging they crave. At the dawn of the global era, it? worth asking: What might provide a visceral sense of belonging to the entire planet?
5.) Multi-National Corporations: Is Being Pro-Environment Enough? Perhaps no multi-national corporation is closer to the pulse of globalization than Royal Dutch/Shell. With facilities and operations spanning from the North Sea to Nigeria and from the Alaskan archipelago to the Philippines, and a budget to run them bigger than the treasury of many nation-states, Shell personifies THE global corporation. Coming to the conference from Shell? Canadian division, Senior Advisor on Sustainable Development Anita Burke offered an insider? perspective on change within Shell. The global community expressed its outrage against Shell in the form of exploding gas stations in Germany following the controversial sinking of the Brent Spar platform, as well as in vitriolic protests over Ken Saro-Wiwa? hanging in Nigeria. These protests had a strong impact on Shell? corporate leadership. Burke noted that corporate leaders continue to read the newspapers and hear the protests, and it bothers them every day. Burke knows they want to ameliorate the inequities and deleterious effects of globalization. The key is to show them innovative ways to do business, such as the Natural Capitalism model, which couples environmental sustainability and energy efficiency. Walter Link added that a key factor in Shell? transformation has been timely pressure from activists combined with the emergence of new, progressive leadership among Shell's corporate executives. It was the combination of both and not simply one or the other that facilitated effective transformation. Interface CEO Ray Anderson echoed some of Burke's sentiments by relating how his own company started its ascent up "mount sustainability." After reading Paul Hawken's The Ecology of Commerce in the early 1990s, Anderson's life was never the same, nor his company's. When he was educating himself in the full extent of environmental damage wrought by industrial civilization, Ray came across a single phrase that vividly describes the magnitude of the devastation: "the death of birth" (a phrase coined by Harvard's longtime biodiversity champion E.O. Wilson). As a role-model for corporate awareness, Anderson has overseen a 7 1/2 year top to bottom transformation of Interface, a world-leading carpet tiling company. Seeing beyond the once lofty goal of sustainability, Anderson has exhorted his company to be the world's first "restorative" company, one that will give back more to the environment than it takes away. Following Anderson's lead, Roger Saillant, a former senior executive at Ford Motor Company, told of some of his own attempts to imbue greater environmental awareness into one the world's largest corporations. Now director of the fuel-cell company Plug Power, Saillant looked back on his participation in establishing a Ford plant in Mexico. At Saillant's direction, Ford engaged the local Mexican community in the actual design of the plant. Returning years later, one of the most rewarding things in his life was to hear that a female plant worker had risen from bottom of the ladder to receive a college education. The thread running through the messages of Anita Burke, Ray Anderson, and Roser Saillant--and the transformations of their respective companies--is that embracing sustainability is only the first step towards achieving a transformed global economy. An even deeper metanoia - change of mind and mindset - is needed too. Not only the what we do needs to change, but the how we do needs to change as well, from mechanical efficiency to meaning-filled workplaces, where "straight from the heart" is the norm, not "straight from the gut." Metrics in the Corporate Arena: What Yardstick Measures Progress? The corporate world is driven by the need to show results, measurable results. But whose method and what metric should be used to measure progress? Many at the conference thought that the way to leverage change in the direction of a more sustainable economy is to change the metrics in different industries. Organizations such as the International Standards Office (ISO) or the Financial Accounting Standards Board (FASB) should be influenced to implement metrics that measure progress towards sustainability. Amory Lovins shared an example of how conventional metrics and accounting practices forestall innovative businesses from making changes. Lovins knows a forest products executive who is looking for a legitimate way to do ecological accounting in accord with the Federal Accounting Standards Board (FASB). If this executive could implement a different set of metrics and accounting practices, he could manage his forest sustainably. But such practices as carbon sequestration are not accounted for in the current system. At the same time, Lovins warned against the "metrics mentality." Measurement as a goal in itself is not helpful. Mentioning the book Profit Beyond Measure by Tom Johnson, a professor from the University of Oregon, Lovins asserted that "managers" focus on measurement while "leaders" focus on encouraging their personnel to achieve optimal outcomes. Commenting from an evolutionary perspective, Janine Benyus and Jeremy Sherman asserted that "metrics" are merely a different way of saying "selective pressure." In living systems the natural environment is constantly evaluating what works and what doesn't. Metrics are an evaluation system created by humans to foster a similar evolutionary development in a business setting?ne more feedback loop in addition to market mechanisms.
6.) Designing an Emergent Global Story The Best Story Wins: Creating a Narrative for Sustainability On the last day of the conference, the participants discussed ways to sell the world on the "story" of sustainability. Both Jay Ogilvy and Allen Hammond create and articulate scenarios of the future, which provide an effective way to get the message across about the need to take decisive action to reform the global economy. Hunter and Amory Lovins emphasized that talking about how bad things are simply has not been effective in their professional work. Most people who are willing to listen to sustainability solutions already know the dire environmental facts. These audiences do better responding to concrete examples where solutions have been found to practical design problems. One of the central messages toward the end of the conference was that a "Design Attitude" can overcome growing seeds of despair. Amory Lovins mentioned the city of Curitiba, Brazil as a prototype where innovative design has turned a troubled city into a shining example of what is possible. Lovins' design outlook is pragmatic and simple: If there is still a problem, then the correct design has not yet been found. When the perception of a problem changes, the solution-space alters too. Jay Ogilvy remarked that much like design solutions, positive scenarios for the future involve imagining solutions to problems that have not currently been solved. This takes a leap of imagination beyond current thinking, and explains why scenario planning serves such a crucial function. It may allow us to imagine sustainable pathways into the future no one has yet imagined. Jeff Foote from Coca-Cola shared an encouraging story of how Coke? design team was presented with the challenge of making all of their machines at the 2000 Atlanta Olympic games CFC free. At first, they thought the job was impossible, but after some phone calls to innovative design companies, such as Rocky Mountain Institute (RMI), the attitude of Coke? designers shifted into a fresh, open space where they could entertain possibilities and new technologies to enable them to achieve this once lofty and impractical goal, which they did. Allen Hammond noted that despair stems from projecting current trends linearly into the future. But recent findings from the complexity sciences have shown that many natural processes are non-linear. The so-called "butterfly effect" has shown that small nudges to a system in a critical phase can have much larger than anticipated effects. The key is to find the most sensitive time and place to intervene in a system. Hammond noted that the current level of despair stems from a simple but significant design flaw in the global economy: we tax employment and subsidize natural resource use. So, the things we want to encourage are penalized, and those we want to discourage are funded liberally.
Click below where it reads "Conclusion:" to read the final segment .
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