Are You a World Inc. Company?

Learn by Benchmarking with the Premier Leader in Social Response Capitalism

If you are a corporate, government or non-government leader seeking to advance your organization’s vision and mission; do you benchmark with a firm called World Inc.? If not, you should. World Inc. may surprise, fascinate and intrigue you. You may want to involve your CFO, CIO, COO and entire board. You may also want to include your shareholders, customers and government representatives. These stakeholders will likely value from the World Inc. benchmark.

Benchmarking with World Inc. will help you understand how to navigate the rising tides of energy and climate change, global pandemics, geo-political and resource conflict, global health and poverty. If these issues are not affecting you yet, they will. Benchmarking with World Inc. might just be one of the near term actions you can take to help you deliver on your vision and goals. For a benchmarking introduction, we provide summary information on World Inc. below.

World Inc. – A Firm for All Firms
World Inc. rocks all the lists and tops the charts when it comes to financial, social and environmental performance. It develops the cleanest and greenest products in the industry. It has an incredible employee benefit plan providing the industry’s best health coverage and employee assistance programs. Having helped reduce poverty, eliminate disease and address global health challenges, World Inc. is regarded by government and non-governmental organizations as one of the greatest influencers of a better world.

World Inc. has also just done all of this with a zero climate impact, having offset its carbon emissions and deployed the latest state of the art energy-efficient measures and controls while also purchasing and generating clean renewable power for all of its global facilities. This year the World Inc. also gave back billions through its charitable foundation, and in classic World Inc. style, the firm dedicated a portion of its next year’s profits to education and fighting global hunger.

World Inc. is capable of doing all of this because it leads its competitors in sales, innovation, employee retention, market share, market access and brand reputation and value. World Inc. has transformed its market – and in the process of doing so – has developed not only a very profitable company – but a long-term sustainable company that has the intellect, resources and vision to continually shape a better world. World Inc. is very well regarded by its shareholders, its governing board and its customers. The firm is rated as best in class by INNOVEST, Calvert, Domini, IRRC and other social fund investment firms.

World Inc. sounds like a pretty good firm to work for, invest in, buy products from and partner with. Perhaps you are you wondering how to further benchmark with or invest in World Inc.?

Unfortunately World Inc. is used fictitiously here as the “new era firm for all firms” – one that has a competitive spirit for the 21st Century and a social conscience for 100 years beyond that. Fortunately, environmental business expert Bruce Piasecki captured the essence of how companies are becoming more like this fictional World Inc., providing tangible value to shareholders, society and future generations.

In his new book World Inc., Bruce Piasecki examines how a new paradigm in how global companies and governments value and make money is shaping the future of business. Calling it ‘social response capitalism’, Piasecki unveils the somewhat hidden and innate truths that lurk within senior corporate and government leaders, and that are increasingly being made transparent as the most competitive corporations to go global while going green.

Within this global transformation there are implications for government, culture and our natural environment. Global firms are becoming socially progressive – driven by past mistakes, regulation, reputation and brand value and that ‘competitive spirit’. Companies of the future are embracing social response capitalism because it is a smarter, more enlightened and more socially conscious form of business. Piasecki examines how companies and governments are working toward this new form of capitalism in his book World Inc., which is a also reflection of the high-level executives and organizations he and his firm the AHC Group have assembled and worked with for more than 16 years.

Become a World Inc. Firm
Learning from leaders can be self enlightening. It can also be quite humbling. It’s a powerful tool smart leaders use to understand how they can improve and how they can also improve the livelihood of others. We see this in so many different forms including the Clinton Global Initiative and the Global Roundtable on Climate Change. In both cases governments and corporations are leading change by working together on solutions for a better world.

The power and wealth of the world is concentrated in a few large governments and corporations. Together these leaders have the resources and capacity to create lasting value to the world. Will the world’s most powerful leaders envelop and embody the values of the fictitious World Inc. firm that we began this blog with? And, in knowing that it comes down to having the competitive spirit, leadership and will to do something or nothing, ask yourself, your top officers, shareholders and customers:

Are you on a path, and do you have the corporate and organizational strategies in place, to become a World Inc. company?

Do you want to learn how to become a World Inc. company? Join our conversation and get involved, contact Mark@ahcgroup.com to learn more.

Mark C. Coleman
Senior Associate, AHC Group, Inc.

The Future of Real Estate: Greening Your Home & Community – World Inc. Style

By Bruce Piasecki, author of World Inc. with Mark Coleman

In this new century of social and environmental obligation and expectation – real estate is emerging as the canvas by which new portraits of sustainability are being painted. New age development companies are earning green as they paint the past into new shades of green.

Take for example British Land of London who is developing commercial properties in the UK that balance economic and social impacts from a life cycle perspective, Windmill Developments of Ottawa Ontario who is working to green the urban environment in Canada, and East West Partners of North Carolina who are building sustainable residential communities like their East 54 development at Chapel Hill which is LEED Certified by the U.S. Green Building Council. These developers are just a sample of firms now looking at how to green our homes, our cities and our communities. These firms are what we call social response capitalists – developing new products, services and business models around social needs.

Greener Products – Greener Profits
The revitalization of real-estate is front and center in this new century of social obligation. We are becoming smarter in deciding where we build our living space, what materials to use, how to energize our spaces, and how best to optimize resources and minimize waste. Building products companies are also capitalizing on the need for greener building materials.

Take for example Toronto based Norbord, a $1.3 billion international manufacture of wood products is manufacturing more sustainable building materials like oriented strand board, engineered wood products (I-joists) and medium density fiberboard. These products reduce wood use, minimize waste and provide other value-added benefits to builders and consumers. In the same industry, the Nashville, Tennessee based LP has developed a new and innovative energy saving building material called LP® TechShield® which is an aluminum foil material used as a radiant barrier minimizing heat gain in summer months and heat loss in winter months. The LP® TechShield® product saves consumes up to 20% on their total energy costs.

The greening of products also transcends the more fashionable side of style as well. Herman Miller for example manufacturers intelligently designed furniture that meet what is known as Cradle to Cradle certification. The firm is looking at greening their products from the design phase through end-of-life and everything in between including better packaging solutions (e.g., reducing waste and minimizing packaging materials). Many of Herman Miller’s products are designed to be recycled, emit little indoor air emissions, use low VOC paints, contribute to LEED certification for users, and are manufactured using environmentally benign processes. Herman Miller has 28 product lines spanning healthcare furniture, furniture accessories, seating, freestanding furniture, and furniture systems that have environmental attributes and can be applied to LEED credits. Based in Oakland California, Michelle Kaufmann Designs is pioneering design and manufacture of affordable and sustainable living buildings. With an eye toward entire living systems the firm incorporates eco-friendly materials (like non-toxic low VOC paints and formaldehyde-free cabinetry) and energy-efficiency into each modular home product it designs.

Norbord, LP, Herman Miller and Michelle Kaufmann Designs are greening their product portfolios because they see not only a market, but a long-term solution to remaining competitive and staying in business. These firms are some of the early leaders in greening the real-estate industry.

The Greening of Brownfield’s: Turning Past Liabilities into Future Assets
Thus far we’ve mentioned the greening of building products, buildings, homes and community developments. What’s also occurring is a revitalization of the land itself. Like the earth’s other natural resources – land is limited. Europe is especially sensitive to land resources because they have, like all other areas of the globe, fixed land and space by which to make real-estate decisions and investments. European countries and corporations are seeking means to revitalize land resources, particularly Brownfield’s, into more productive higher uses.

Like Europe, the U.S. has thousands of Brownfield sites. These scars of industrialization remind us that our economy has been built up through depletion of natural resources, containment of waste, and contamination of soil and groundwater. These scars, some visible, some naked to the eye, are also reminders that our prosperity has occurred not without environmental, economic and social costs. In some cases blighted properties have had very adverse impacts on the socio-environmental context of communities, often yielding ethical debate and political action. While the scars of our industrial past litter our lands, they can be healed and reconstructed with technology, new business models and with proper definition of future productive land use.

For the past decade AHC Group, Inc. has been researching, benchmarking and implementing strategies for large industrial firms to remediate past environmental liabilities. Our firm has worked with large transportation, chemical, oil, utility, consumer product, pharmaceutical and industrial manufacturing companies on discovering ways to optimize their clean-up of past liabilities while simultaneously identifying ways to bring those less productive properties into higher-valued real-estate. While technology, economic and environmental challenges impede fast transformation of remediation sites, innovative companies are beginning to find financial and social value in cleaning-up their legacy sites.

For example GM is studying new innovative technologies and approaches to restoring former industrial sites for redevelopment. And oil giant BP who is moving “beyond petroleum” is also moving “beyond pollution” by redeveloping past industrial sites. In fact BP won a US Environmental Protection Agency award for excellence in Brownfield redevelopment for the transformation of their former Casper, Wyoming refinery site into a 340 acre business park and recreational area. In our experience, every major industrial company is looking for opportunities to revitalize their real-estate assets. In 2005 BP spend more than $366 million worldwide on remediation projects. The firm’s remediation team manages a provision of more than $2.3 billion for future expenditures.

As these numbers show, real-estate clean-up, risk management and redevelopment is “big” business. As big industrials decommission facilities, expand into new markets, and realign their corporate strategy with a new era of social and environmental reporting, the best firms are discovering that real-estate revitalization goes hand in hand with long-term risk reduction and creating lasting shareholder value.

Financing Greener Communities
The organizations and companies driving greener growth in building products, buildings and real-estate are not alone in their pursuit of better products. The financial sector is increasingly recognizing that their capital can be spent more wisely and with less risk, if social and environmental attributes are included in their financial risk assessment for financing projects. Take for example Bank of America who recently committed $20 billion to support the growth of environmentally sustainable business activities and to address global climate change. Bank of America has committed $18 billion of this investment toward the finance of environmentally friendly commercial real-estate developments. The company will focus on real-estate projects that address “LEED certification, improvements in building energy efficiency, Brownfield redevelopment, promotion of smart growth, and the use of energy-related tax credits.” With this kind of financial backing and leadership from Bank of America, the greening of our homes and communities stands to benefit enormously.

How World Inc. is Creating a Greener Real Estate Industry
In World Inc. fashion firms from large multinationals to small agile regional residential developers and property managers are discovering that the rubber meets the road for them on the real-estate playing field, particularly as it aligns with technology insertion – green building products – and community-based economic revitalization strategies. In World Inc. we capture how firms create real-estate value in this new era of social response capitalism. In the next 5-years we see the greening of your homes and communities building like a tidal wave. This wave’s energy is being fed by the metrics and standards of the U.S. Green Building Council, the regulators and policy makers in the U.S. EPA and DOE, the green building products firms like Norbord and LP, the international remediation experts at BP and GM, and all those interested in revitalization of the economy through social response like foundations, developers, financial institutions and the public. We look forward to reporting to you on how this wave grows in more intensity and how government, corporations and society will benefit from riding this wave into a better, sunnier, and safer beachfront.

Dr. Bruce Piasecki is the author of World Inc.: When It Comes to Solutions — Both Local and Global — Businesses Are Now More Powerful Than Government available at www.worldincbook.com. Dr. Piasecki is also the founder of the AHC Group, Inc. a management consulting firm focusing on social response and corporate environmental strategy. Learn more on how to create value in social response at www.ahcgroup.com. Dr. Piasecki can be reached at Bruce@ahcgroup.com.

Mark Coleman is a Senior Associate with the AHC Group, Inc. and a major researcher on World Inc. As a researcher and practitioner of social response strategies Mark is helping corporate, foundation and government leaders discover the value in social response capitalism while aligning resources and creating actionable strategies for creating a better world. Mark can be reached at Mark@ahcgroup.com.

Building Greener, Cleaner and Healthier Homes: The Home Depot Says, “You Can Do It, We Can Help” through its Eco Options Label Program

On the eve of Earth Day 2007, the world’s largest home improvement retailer The Home Depot announced a major long-term initiative to allow customers to easily identify products that have less environmental and energy impact. Known as the Home Depot Eco Options program, the company has launched this major initiative in the U.S., and plans to make it accessible to its base of 1 billion customers worldwide. That is a major initiative from a firm that has annual sales in excess of $90 billion and employs 345,000 people worldwide. To help create excitement around the initiative the Home Depot said it would give away 1 million energy saving compact fluorescent light (CFL) bulbs at its stores on Earth Day, April 22nd as well as launch an interactive web-site for the Eco Options program.

In preparing for the initiative launch, The Home Depot said it had identified more than 2,500 Eco Options products that fall into one of five categories: clean air, water conservation, energy efficiency, healthy home and sustainable forestry. Examples of products in these categories that The Home Depot carries in its stores include: all-natural insect repellents, cellulose insulation, front-load washing machines, solar lights that use natural power, CFL’s, programmable thermostats, certified wood products and organic plant food and vegetables in biodegradable pots.

To provide some perspective, The Home Depot sells approximately 45,000 different products. The 2,500 Eco Options products represents about 5 ½ percent of its total product portfolio. While seemingly small, the firm is seeing some immediate and large energy and environmental benefits. At the time of this blog posting, The Home Depot web-site stated that the Eco Options program had sold more than 354 million Eco Options products resulting in more than 3.7 billion kWh of electricity saved and 7.7 billion pounds of CO2 prevented from entering the atmosphere. In addition the firm had planted 90.1 million trees.

In his new book, World Inc., Dr. Bruce Piasecki examines how globally competitive firms are innovating products that meet quality, technical performance, price and social response requirements. Companies like HP, LP, Toyota and The Home Depot fall into the new economy space Dr. Piasecki refers to as social response capitalism. By offering better products - ones that compete on price, performance and social attributes - competitive firms of the 21st Century are creating a better, more ecologically and economically sustainable world.

We see this unfolding at The Home Depot, in part by their own initiative to screen 2,500 consumer products through their Eco Options program. By helping consumers identify and evaluate better (more energy-efficient and environmentally benign) product choices The Home Depot is helping drive the market for greener building products - ones that embrace energy and environmental attributes. Homeowners and builders that are seeking to find ways to reduce their energy costs, reduce indoor air pollution and emissions, and limit pollutants into the environment are driving this burgeoning market for greener products. The Home Depot is answering customer need and demand through its Eco Options program. In addition they are tangentially supporting and securing future growth of social response products from building product manufacturers.

The Home Depot is not only making it easier for customers to identify better products, it is spending its own money to help communities implement them. Through the The Home Depot Foundation, the company is promoting the development of “healthy, livable communities” by “supporting the development of affordable, healthy homes for working families”. To help achieve this goal the Home Depot Foundation is investing $100 million in the next decade to help build 100,000 affordable and environmentally responsible homes. In addition the Home Depot Foundation is planting 3 million trees in urban areas to help beautify the communities. The Home Depot is also working with The Conservation Fund to offset carbon emissions. As a partner in The Conservation Fund’s Go Zero Partners program, the Home Depot will “fund the planting of thousands of trees on nearly 130 acres across metro Atlanta to offset the carbon emissions”.

So as late Spring and early Summer emerge and you scour the web for green building products for that home renovation project you had in mind all Winter, keep Home Depot Eco Options product labeling program in mind, as a resource for your consideration. As a trend watcher we will be monitoring The Home Depot and other green building product companies to learn how these firms continue to provide new socially responsible products and services into the mainstream.

Mark C. Coleman
Senior Associate, AHC Group, Inc.
Mark@ahcgroup.com

Where’s the Beef? – How Climate Change will Yield Greater Return on Social-and-Financial Equity

In the early 1980’s we Americans were amused by Clara Peller who asked us one simple question…‘Where’s the Beef?’ on behalf of the Wendy’s fast-food restaurant chain. The one-liner turned out to be a catch phrase in the 1984 Presidential election. In many ways Peller’s phrase continues to entertain us today.

The difference today however is that Peller’s famous line may become more of a literal mainstream reality adding additional irony to our consumptive big energy, big food, big stores, big homes, big everything culture. With agriculture feedstock’s affecting beef prices and the potential for climate change to shift food production in years to come – “Where’s the Beef?” might just turn out to be less funny. And in a satirical sense – we ask “Where’s the Beef?” to the many government leaders that appear to be less of change agents and more status quo - speak within the lines - types of policy makers.

As the world’s population grows, our nation continues to consume more resources and adding more stress and uncertainty on our atmosphere, ecosystem, ocean and land. We already see constraints in the availability of clean, fresh water in regions with growing populations like Asia, Africa and South America. Even the wealthiest countries of the world are not without water challenges including the U.S. Southwest who has some of the fastest growing cities in the country. With water constraints already affecting states like Arizona, Colorado and New Mexico some believe the U.S. Southwest could transform into dustbowl like conditions that plagued the Midwestern U.S. during the 1930s.

A report released by the Intergovernmental Panel on Climate Change on April 6, 2007 summarized a slew of dramatic impacts, caused by human induced climate change set to transform entire regions of the world. The IPCC report estimated that the earth’s warming temperatures could result in food shortages for 130 million people by 2050 and threaten to cause drought, higher seas and more severe weather in Australia and New Zealand by 2030.

The IPCC report noted that “drops in (food production) yields combined with rising populations could put close to 50 million extra people at risk of hunger by 2020, an additional 132 million by 2050 and 266 million by 2080” Associated Press. The report summarized how rainfall may decline by as much as 5 to 12 percent in China, greatly reducing food production yields for the billions that reside there. In addition the severity of weather in Australia, New Zealand and other countries is likely to increase as a result of climate change.

Questions of how climate change may impact social equity issues are emerging in our daily lives. Do we feed cattle or humans? Do we feed our cars or cattle? Do we invest in game-changing energy technology or pump more emissions into the air? Do we explore the development and use of genetically modified and bioengineered crops to meet growing demand for food and agriculture commodities? Do we wait for help, or reach out our hand and get involved? The debate on climate change is less of a debate nowadays. Instead the debate has shifted from whether or not it is occurring, to what to do about it.

Even so, we are only at the infancy of climate change and the debate about how the new social equity culture that has emerged can transform our ideologies as they pertain to consumption, production and economics. As human life and the state of our life-sustaining systems await our reaction – new one-liners will emerge:

Where’s the relief? (Here we think of the aftermath of Hurricane Katrina)

Where’s the light? (Here we think of our slow transformation to adopt technologies that can minimize electric grid disruption and enhance reliability)

Where’s the clean water? (Here we think about the nature of how we use water for production of goods/services disproportionately to longer term human health and environmental needs)

Where’s the food? (Here we think of the millions of hungry that are born into poverty and substandard living conditions – whose immediate environment constrains their ability to sustain life in a healthy way)

Where’s the leadership? (In World Inc. a new book by Dr. Bruce Piasecki he talks about “Developing Leaders One Can Trust” in this new era of social response capitalism – where product leadership is as important as the kind of leadership that runs larger multinational firms)

Where’s the dialog? (Is there enough or too much dialog on climate change and what the best options are for addressing it? We believe, in this instance, more is better. The AHC Group has been leading discussions on social response through its leader-to-leader benchmarking workshops covering governance & innovation, shareholder value, risk reduction & remediation, and emerging issues for the past 25 years.

So, as we think about our next pop-culture comedic rant like “Where’s the Beef?” let us consider some of these less humorous rants that we will be unable to drown out from our lives in years to come. While big food, big cars, big homes and big egos have sheltered and protected us from the world’s woes, we are now realizing that have to begin addressing social need through the power of business, government, philanthropy and individual care like no other time in history.

We believe this social history is leading us to become the “S-Generation” and we now must take on the responsibility and potential good fortune that comes with it. The “S-Generation” is being born today – at the dawn of our reflection and recognition that we cannot continue our rate of consumption and growth without changes in the way we think about, consume and use energy, food, water, land and air. The “S-Generation” is being born at a time when the law of the commons has become less common – a time when clean water and air is not as prevalent as they were 100 years ago. So – with diminish ecologic and social returns the “S-Generation” will likely emerge to transform our current state of assumptions as they reevaluate the role of business, government, politics and society in creating a better world.

As climate change affects the wealthiest nations of the world – our challenge will be to think not only of ourselves – but all people – as we seek new solutions to health, happiness and ecological freedom. Corporations have decided to move out of rank and file positions on climate change and begin evaluating their lot in a world on the cusp of climate fluctuation. Like the stock values that they grow – they are seeking to gain value in a world of uncertainty while providing value back to society. We see this as firms seek greater return on social equity as much as they do on their capital, investments and private equity.

Watch firms like Bank of America, HSBC, Suncor Energy, HP, The Gap, and Wal-Mart in months and years to come. We believe the thought leaders in these firms will lead new paths of growth in business while addressing issues pertaining to social equity and climate change – raising their social and financial equity with stakeholders and shareholders alike. They are clearly thinking about the “S-Generation” and may likely be around to help that generation tackle the challenges of climate change and other societal needs well into the future.

Mark C. Coleman
Senior Associate, AHC Group, Inc.

CORNucopia of Opportunity in the Heartland: Or Just More Feed for the Political Cattle?

We now live in a carbon constrained world. Fears of human induced climate change are bringing about changes in government, corporate and consumer behaviors. Investments in renewable energy are increasing, corporations are greening everything from their supply chain to their vehicle fleet, and consumers are seeking to minimize their ecologic footprint as well. Are some of our greening efforts leading to a recipe for success or failure? Is the short-term monetary gain fueling investments that will not be financially or environmentally sustainable?

In America’s heartland, growing corn for ethanol fuel feedstock is almost as good as planting a money tree right now. Driven by a carbon-constrained world and need to reduce U.S. dependence on foreign oil, are we setting ourselves up for a corn constrained world? A CNN Money.com article states the U.S. will grow more corn in 2007 than any year since World War II. The driver for this boom in corn production is ethanol fuel whose main feedstock is corn.

The story of ethanol is just beginning in the U.S. Demand for ethanol fuels are growing. President Bush has proposed that the U.S. reduce its total gasoline consumption 20% by 2020. To achieve this goal President Bush recommends displacing gasoline, in part, with ethanol. But what is the true cost and risk associated with a biofuel like ethanol?

I’m all for biofues, creating jobs and enhancing our energy security - but at what expense and future risk? For example, increased production of corn for ethanol will displace other agriculture commodities like soybeans and wheat. As a result the consumer cost of these commodities may increase. Other agriculture products including beef may be subject to price variability due to the diversion of corn to ethanol production. In addition other natural hazard and environmental variables cannot be controlled. Increased incidents of tornadoes or hurricanes for example will impact short-term agriculture production and pricing. Short and long-term weather fluctuations can impact agriculture output, length of growing seasons, and numerous production variables (like water availability, soil nutrients, PH and overall quality, and insect infestation). In fact NASA Research found that the Dust Bowl of the 1930’s was a major climatic event spawned by “cooler than normal tropical Pacific Ocean surface temperatures combining with warmer tropical Atlantic Ocean temperatures to create conditions in the atmosphere that turned America's breadbasket into a dust bowl from 1931 to 1939”. If the U.S. reduced its dependence upon foreign oil by 20% and increased dependence on heartland produced ethanol, how would we react to another decade long dust bowl in the 21st Century? Is this energy dependence and security that we are creating or shortsighted short-term economic gain with global spin?

While there may be some science and technology solutions to these issues – is this a sustainable model for energy production in the long-term? Displacement of agriculture land to produce feedstock for biofuels also raises equity and ethical questions. Should farm land be utilized for food production, helping feed those that are hungry in the U.S. and world? Are we that addicted to transportation fuels that we’re willing to get a new fix rather than address our over-consumption? Are we only masking our thirst for oil with a new buzz on heartland fuel?

There are many unanswered questions surrounding alternative transportation fuels, particularly ethanol. As this industry plays-out we will watch with a careful eye to what’s working and what is not. A larger “systems view” of global climate change, natural resources, food and energy production and equity needs to align with societies evolving greed for what’s green. If we only succumb to meeting our short-term “fix” we will misguide future generations.
Many companies have realized this and are searching for better solutions.

The path to growth of many leading executives in our AHC Group (www.ahcgroup.com) network involves a dashboard that includes so many variables it’s almost impossible to navigate where to go. However, the companies that are leading the way toward a more sustainable world have figured out that one simplified formula can lead them in the right path: population growth + rate of consumption + efficiency of our machines = pollution and climate change. So, with this formula in mind, corporations from GE, Boeing, Starbucks, Wal-Mart, Siemens, Tom’s of Maine and Dell are simplifying their dashboards, and setting a course for action while they search for new solutions to minimize their environmental impact.

The story environmental business expert Bruce Piasecki tells in his World Inc. is rich with these complexities and tangible examples of what has worked when sustainability is integrated into the core business of small and large corporations. In reading World Inc. it becomes apparent, that while we live on a finite earth – the opportunities for creating better products and a better world are infinite.


Mark C. Coleman
Senior Associate, AHC Group, Inc.
Mark@ahcgroup.com

The World is Discovering the “S” Frontier

Will Pioneers of the "S" Frontier Guide the Path to a Better World?

Louis and Clark were frontiersmen of the Wild West; Jacques Cousteau was a frontiersman of the wild Blue Ocean, and Russian cosmonaut Yuri Gagarin a frontiersman of space. Each of these frontiersmen exhibited courage, curiosity and care for their adventures and discoveries. These modern day hero’s opened the world to new possibilities, expanding upon our knowledge and our vision for the future. Opening up new lands, foreign seas and the vastness of space – these frontiersmen embody the spirit of hope and possibility in humanity and within us all.

There is a new frontier that is being explored right now. Called the “S” Frontier, it is being charted by social entrepreneurs, philanthropists and government and corporate pioneers across the globe. This new frontier is a “virtual” space as much of it is about values embedded in philosophy, culture and systems thinking. This frontier is also a “physical” space as it is actionable, tangible and very material to business and society. Finally this frontier is “magical” because it instills a promise for the future and better world while bringing us breakthroughs in new science, innovation and business models.

The “S” Frontier has been reported by Bruce Piasecki in his book World Inc., and is being explored by some of the worlds largest corporations like HP and Boeing to smaller firms like Green Mountain Coffee Roasters and Tom’s of Maine. Colleges and Universities are scouting out the “S” Frontier with Stanford University, Columbia Business School, Duke University, Harvard Business School, and MIT offering unique management, technology and entrepreneurship programs. Financial firms from the largest banks to rating agencies and mutual funds are each building new business and creating new opportunities in this “S” Frontier. New initiatives are emerging daily tied into this “S” Frontier from environmentally conscious Manhattan bakeries to off-grid water treatment facilities in Africa. So what drives the “S” Frontier? Piasecki says it it’s the following:

1. the Swiftness of new global market information;



2. the Severity of some of the leading social problems before us like climate change and the rising price of oil;



3. the need for Social response capitalists.


The “S” frontier is the progressing fringe of business thinking that is shaping the 21st century like the way the 18th, 19th, and 20th centuries were shaped by scientists, innovators, social progressives, explorers and entrepreneurs. The swiftness, severity, and social aspects of the “S” Frontier have companies, small and large, gathering data – getting their bearings – and charting a course along this new terrain not yet fully explored. The uncharted terrain is confusing to some, and a land of opportunity to others; especially those that are defining its future. Pioneer companies, universities and financial institutions stand to gain early adopter advantages both in reputation, shareholder and stakeholder value.

The “S” Frontier is the intersection by which challenge meets opportunity in a way that is more guided toward social needs. For example, feeling the ‘severity’ of climate change, today the British government proposed a greenhouse gas law to reduce emissions 60% by 2050. If passed the British law could have sweeping implications for households, businesses, government leaders and product manufacturers. What we are seeing here is Britain’s reaction to the severity of the “S” Frontier. We believe this severity is likely to continue and more governments and businesses will continue to take actions on climate change, energy security and other resource issues from Brownfield redevelopment to water conservation and pandemic preparedness.

On a more positive side the ‘swiftness’ of the “S” Frontier is teaching us that new ocean bacteria may hold promise for reducing carbon dioxide from the atmosphere or creating new energy sources. As science and technology advance we uncover new truths about our world and environment, the “magic” associated with what we still don’t know. And, acting on the ‘social response capitalism’ dimension of the “S” Frontier firms including Arizona Public Service (APS) and GreenFuel Technologies Corp. have begun to unlock the hidden financial value in using naturally occurring algae to capture and absorb CO2 emissions while creating commercial biofuels.

The net result of all of these “S” Frontier dimensions and parallel activities is a more informed and sustainable system. By shaping their future’s in this uncharted land we call the “S” Frontier, these select “frontiersmen” will shape changes and market dynamics across the next 20-to-50 years of this new century as opposed to react to them, leading the transformation to a better world.

Mark C. Coleman
March 13, 2007

20 Billion Reasons World Inc. is Happening Now!

The world is on the verge of a new economy…one that is transparent and motivated by making money while doing what’s good for society and the environment.

On March 6th Bank of America, one of the world’s largest financial institutions, announced that they were committing $20 Billion to support growth of environmentally sustainable business enterprises and activities, especially those that address global climate change.

For corporate clients the commitment by Bank of America will provide financing for projects spanning LEED certified commercial real-estate, brownfield redevelopment, smart growth and carbon emission trading. For individual clients financing will be available for green home construction (green mortgage products) and green investments in sustainable forestry. The company has also committed to have its facilities LEED certified.

$20 billion is a lot of dough – but still relatively small in relation to other “investments” in our future like the War in Iraq. In fact the Bank of America commitment is just 20% of what the U.S. spent in Iraq in 2006, according to some projected estimates. If this sounds somewhat cynical, it’s meant to be. Imagine the progress that could be made if Bank of America had “matching funds” for their social investment from the government.

Now, of course the U.S. government funds a good share of sustainable projects, but is it enough? The U.S. Department of Energy (DOE) recently announced their $365 million investment for the development of six cellulosic ethanol plants and their FY 2008 budget request of $24.3 billion including $1.2 billion for the Office of Energy Efficiency and Renewable Energy (EERE News). Considering that Bank of America’s $20 billion commitment is 16 times greater than the annual budget request of DOE’s Office EERE, we have to consider: Is the role of business outpacing the role of government in creating a better world?

The hidden value of sustainability practices are now being unveiled to Wall Street, government and society. Investment firms and large financial institutions like Bank of America are driving this new economy based on making corporate responsibility tangible. This new economy is one that is being shaped by a myriad of past mistakes, promise for the future, and real-time transaction. The rate of speed at which this occurs is furious. And, businesses have taken on a new role in transforming this new economy by advancing social response product development and a focus on providing value to not only direct customers, but to all stakeholders. Consider some of the following trends:

Social Investing - $2.3 trillion of the investment dollars under professional management are invested in socially responsible companies that have been screened for their governance, environmental, social and corporate responsibilities efforts globally (Social Investment Forum, 2005).

Social Response Product Development – Making better products; products that have social, environmental and sustainability virtues and values embedded in them; is the current state of the competitive business world. Toyota’s hybrid vehicles, Boeing’s fuel efficient 787 Dreamliner, Sun’s UltraSPARC T1 eco-responsible microprocessors, and Suncor’s commitments to integrating renewable energy technologies into their portfolio are all examples of this strategy unfolding in the marketplace. This is not a “green” trend; it is a strategic decision to differentiate and offer better products for a better world on behalf of these giants see World Inc.

Responsible Lending - More than 45 banks and financial institutions representing more than $4 trillion in assets under management have subscribed to the Equator Principles, a set of voluntary guidelines governing environmental and social investment for international project finance. Financial institutions including Citigroup, HSBC, ING, JPMorgan Chase, Wells Fargo, Wachovia, and Royal Bank of Scotland are just a sample of the global finance leaders that have adopted the principles into their lending practices (Equator Principles).

Power of Philanthropy - The year 2006 was an incredible year for billionaires. Not only did they have a successful year of returns, they also returned billions to society. In June 2006 Warren Buffet announced that he would give away 85% of his fortune built in Berkshire Hathaway and the largest share, some $30 billion would go to the Bill & Melinda Gates Foundation (FORTUNE Magazine). The Bill & Melinda Gates Foundation has committed billions toward fighting disease globally as well as reducing poverty and hunger (Bill & Melinda Gates Foundation). And with a focus on energy and climate change, global health, poverty alleviation and mitigating religious and ethnic conflict, the Clinton Global Initiative emerged in 2006 with a $7.3 billion pledge from 215 sponsors to continue these efforts globally (Clinton Global Initiative).

This new economy is more than a trend. It is being cultivated in front of our eyes and it is being reported more frequently by mainstream press, see Business Week’s Beyond The Green Corporation article from January 29th magazine as a recent example.

Globally and regionally new economies are being formed and re-shaped by corporations designing better products, by a new era of philanthropists, and by a transformational shift in how we think about – and invest, spend, use and make – money.

What other trends on money and markets do you see shaping this new economy we call ‘social response capitalism’? Let us know at Mark@ahcgroup.com.

Mark C. Coleman

March 12, 2007