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Social Business and The Genius of Muhammad Yunus
April 2, 2009

I am currently reading a book by Dr. Muhammad Yunus titled Creating a World Without Poverty: Social Business and the Future of Capitalism, and I am left mesmerized both by the brilliance of Dr. Yunus himself and the beauty of the idea which he proposes in his book–the idea of social businesses.  Let me start by providing a summary of what Yunus means by a social business. He defines it as an enterprise that has investors who recoup their initial investment but who do not receive dividends or profit from their investment.  Thus instead of making their investment based on the company that is most likely to offer them the highest, most secure return, they choose based on the company that offers the greatest social or environmental benefits.  Social businesses exist for the sole purpose of addressing social and environmental problems, but they are not charities.  Instead, they must achieve self-sufficiency by selling low-cost products and services, or through a myriad of other methods that enable the organizations to pay back the investor’s initial investment, to achieve financial sustainability and to achieve the mission of the organization.  In essence, then, what Yunus is proposing is a blending of for-profit and non-profit models, but in a way that I have not seen in the past.  He suggests that social businesses will compete with traditional profit maximizing businesses (PMBs) on quality, price, availability, etc.  He goes on to propose new innovations such as a stock market for social businesses where the company’s stock price reflects its ability to achieve social good, rather than it’s ability to make profit at any cost.

Perhaps if this idea were to come from anyone but a Nobel Peace prize winner and the founder of the Grameen Bank and the Grameen family of companies in Bangladesh–one of the most remarkable group of organizations ever established–it would be seen as naive.  But to illustrate the power of the idea, Yunus starts his book by describing how he convinced the CEO of Dannone Group, one of the largest companies in the world, to launch a social business in Bangladesh that would focus on providing low-cost, healthful food products the poor, rural Bangladeshis.  Within a year of proposing the idea, Grameen Dannone, as the new company was called, had completed an environmentally friendly yogurt factory, and were selling their nutritious yogurt through Grameen borrowers.  Dannone fronted half the start-up costs and, aside from getting back its initial investment, will make no money on the deal.  All profits earned by the company will be reinvested in the company to lower prices or to expand into new markets.

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brown  / Business  / environment  / micro credit

Microfinance, Microfinance and more Microfinance
March 26, 2009

Microfinance has completely invaded my life of late.  My thesis, titled ‘Green Microfinance: A Blueprint for Advancing Environmental Sustainability and Social Equality in the United States,’ is about 80% complete, and obviously deals with the various ways in which microfinance can be used for advancing environmental aims.  In addition, the non-profit that I co-founded, The Capital Good Fund, is in the middle of a pilot phase, and I have been very busy speaking to and meeting with applicants.  Lastly, I have been working with my business partner, Mike, and the company we founded, The Capital Good Group, Inc. so launch an innovative financing mechanism that covers 100% of the up-front cost of doing residential energy-saving upgrades and is, in effect, a microfinance program as well.  I haven’t written here in a while, and I want to provide some updates on these projects, as they are all intimately related despite the fact that one is a masters thesis, the other is a non-profit, and the last is a for-profit.

The Capital Good Fund

We have made a lot of exciting progress recently.  First, we just launched our new web site, www.capitalgoodfund.org.  On the site, you can learn more about microfinance, see our community partners, check out the latest updates on our program, make a tax-deductible donation, download a loan application or find out how else to get involved with us.  We are really excited to have the site up, and we have already received inquiries from potential borrowers through the site!

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brown  / Business  / environment  / micro credit  / Thesis

The Price of Solar Plummets, Vindicating Visionaries
February 24, 2009

Ever since Bell labs developed the first working solar photovoltaic cell in the mid 1950s, people have both lauded the potential–and indeed the poetry–of solar power, while others–the “realists” and “pragmatists”–have derided it as a niche technology whose costs and inherent limitations would always prevent it from overtaking good ol’ fossil fuels and nuclear power as the dominant source of energy for the world.  Unfortunately for the naysayers, the geopolitical, social, environmental and economic impacts of both fossil fuels and nuclear power–which require massive subsidies, cause billions of dollars in health issues, and are tremendously expensive to regulate and clean up after (see my recent article on the spill of coal sludge in the Tennessee Valley)–have begun to far outweigh the supposed affordability and abundance of traditional energy sources.

So while countries like the United States avoided implementing strong subsidies for solar energy and other renewable sources, visionary leaders in Germany and Spain enacted powerful subsidies for renewable energy and compelled utilities to buy that energy at higher rates in order to stimulate the market and create jobs.  Sure, the pragmatists might have argued–and probably continue to argue–that the money being spent on these subsidies, which amounts to roughly 20 cents per month per utility customer in Germany, could be better spent elsewhere.  But in the meantime, Germany has developed into a leader in solar energy, creating tens of thousands of jobs in the process.  Now, according to the New York Times blog, Green Inc., it seems that visionary leadership has begun to bear fruit.  In fact, “On Tuesday, First Solar, a global photovoltaic cell maker based in Tempe, Arizona said it had reached an “industry milestone” by reducing its production costs to the point where making solar cells that produce one watt of power costs $1.”

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environment  / Renewable Energy

A New Logo For Two New Endeavors!
January 26, 2009

image

As soon as Mike and I incorporated our environmental services company–The Capital Good Group, Inc.–on January 1st, we wanted to get to work branding ourselves as a socially minded, mission driven company dedicated to serving people and the planet.  Our first step was to hire Douglas Bonneville, owner of BonFX, the company that designed and built this web site, to create a logo for both The Capital Good Group, as well as The Capital Good Fund.  The idea was to develop a logo that would convey the concept of a “triple bottom line” (social, environmental and profitability); that would be applicable to environmental consulting, microfinance and any other endeavors we undertake using the ‘Capital Good’ name, brand and concept. 

After several rounds with Doug, we finally settled on the above logo.  Mike and I really thrilled with the way in which it conveys the concept of three without being oppressive about it, and how the shapes in the logo can be viewed as trees, or a family, or just interesting geometric shapes.  Read on to see the logo for the Fund.

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brown  / Business  / environment  / micro credit  / News

Let’s Get Joe the Investor Invested in the Green Economy
January 26, 2009

I wrote this article for the Huffington Post.  It can be seen in its original context here.

One of the great things about the green jobs movement is that it brings to the fore the importance of getting a diverse group of constituents benefiting from and arguing for a green economy.  As a result, more and more people are feeling invested in this new economy, because they see how it will be good for them, their family and their community.  After all, it’s a lot easier to push through legislation that will support renewable energy, for instance, if unions, solar installers, utilities, community organizations and non-profits are all in favor. 

Green Collar Jobs Are Great–Now How About Green Collar Investments?

Despite this promising trend, there remains a significant obstacle to getting a broader range of people invested in all things green: a lack of green investment opportunities that 1) have a reasonable, secure return on investment and 2) provide tangible environmental and/or social benefits.  Sure, venture capitalists are investing in clean tech like crazy, green mutual funds are springing up, and myriad publicly traded companies are working on environmentally friendly technologies.  But for Joe or Jane the investor–that is, a person with some money she would like to invest, but who can’t afford a high-profile money manager and doesn’t know a whole lot about investing–these opportunities are either difficult to understand or hard to find out about.

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environment  / Huffington Post

How Access to Information Can Tackle Poverty and Pollution
January 11, 2009

I wrote this article for the Huffington Post.  It can be seen in its original context here



In the Spring of 2007 I had the opportunity to spend a month working with my good friend and colleague T.H. Culhane, the founder of Solar CITIES, an NGO that builds solar water heaters and biogas generators in the slums of Cairo, Egypt.  What is most innovative about what Solar CITIES does is that they build the systems almost entirely out of recycled materials and garbage–things like discarded butter tins, plastic barrels and metal.  At the same time, they are building a cottage industry, training local residents to design and build affordable renewable energy systems.  It is one of the first green job training programs in Egypt, and the only one focusing on slum communities. 

T.H. is one of those rare social entrepreneurs whose boundless energy, commitment and intelligence inspires everyone around him and attracts attention to his cause.  Yet to me the most striking aspect of the trip was noticing the way in which T.H. leveraged his access to information (he is also a PhD candidate in urban planning at UCLA) to enable Cairenes to see the benefits of his systems, and then to come up with better, more efficient designs themselves.  Carrying his iPod around like an instrument for social change, instead of merely a toy for the privileged, he would show videos and drawings of solar thermal systems to carpenters, plumbers and community leaders.  Eager to benefit their communities, these individuals quickly saw the upsides of solar hot water.  After all, most Cairenes currently heat their home in a way that is dangerous (due to fumes and the possibility of explosion) and expensive, whereas solar hot water is reliable, silent and clean (and if fossil fuels weren’t massively subsidized in Egypt, it would also be the cheapest form of energy in “The City of the Sun”).  They immediately began coming up with innovations–finding more durable and affordable materials, refining and even refuting the designs of so-called experts, and inventing brand new manufacturing techniques.

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environment  / Huffington Post  / philosophy

Coal is Dead: Coal Ash Spill Yet Another Reason to Switch to Renewable Energy
December 26, 2008

image

Image Credit: J. Miles Carey/Knoxville News Sentinel, via Associated Press

Coal Is An Awful Energy Source

For all the efforts of the coal industry to make it seem like it’s possible for there to be such a thing as “clean coal” (Al Gore’s Alliance for Climate Protection has been running some great ads dispelling that myth), yesterday’s disaster in Tennessee has demonstrated yet another way in which coal is a nasty, dirty, awful source of energy. What happened was the following, as described by the New York Times: a “breach occurred when an earthen dike, the only thing separating millions of cubic yards of ash from the river, gave way, releasing a glossy sea of muck, four to six feet thick, dotted with icebergs of ash across the landscape.” The ash is actually fly ash, “a byproduct of the burning of coal to produce electricity” that “contain[s] significant amounts of carcinogens and retains the heavy metal present in coal in far higher concentrations.” This isn’t the first time such a breach has occurred, though it is probably the worst, having destroyed 15 homes and released 2.6 million cubic yards of toxic heavy metals.  So add toxic sludge to air pollution, climate change, danger to miners, and mountaintop removal to the dangers posed by coal mining and the burning of coal to generate electricity.  Isn’t that enough to convince America to switch to renewable energy?

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environment  / News  / Renewable Energy

Considering All the Benefits of Residential Renewable Energy is Critical
December 14, 2008

I wrote this article for the Huffington Post. It can be found in its original context here.

Ask most people about the benefits of residential renewable energy—geothermal, rooftop solar photovoltaic and solar thermal, and backyard wind turbines, primarily–and the response is usually the same: they are good for the environment, raise property value and lower or eliminate utility bills.  While undoubtedly true, these responses present an incomplete picture of the benefits of distributed renewable energy.  In certain instances, such as last week when a single ice storm left over 1 million homes and businesses in New England without power, a residential energy system can mean the difference between seeking shelter and being able to shelter others.  Other times, particularly during peak demand, renewables stabilize the grid and lower costs for all utility customers.

The Grid Can Fail, and It’s Expensive When It Does

America’s electricity grid is an engineering marvel, but it is also old, outdated, overstrained and susceptible to failure from storms, terrorism, accidents and high energy demand.  And when the grid fails, not only is the loss of power inconvenient, it is also dangerous and costly.  For example, the 2003 blackout that stretched from Canada to New York was estimated to have an economic cost of “between $7 and $10 billion. . .due to food spoilage, lost production and overtime wages” as well as the cost of repairing and upgrading the affected parts of the grid.  While the 2003 grid failure was one of the most extraordinary outages to hit the United States, smaller scale blackouts, particularly from storms and natural disasters, are rather common.

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environment  / Huffington Post  / Renewable Energy

A Financing Mechanism Powerful Enough to Catalyze the Green Economy
December 7, 2008

I wrote this article for the Huffington Post.  It can be seen in its original context here.

Despite the recent (and undoubtedly temporary) drop in energy prices, the fact remains that because of the economic downturn and an aging housing stock, many families will struggle to heat their homes this winter.  At the same time, the need to create jobs, stimulate the economy, create sound investment opportunities and drastically reduce greenhouse gas emissions has never been greater.  There is no silver bullet for solving all these challenges, but an innovative financing mechanism for renewable energy and energy efficiency could go a long way toward putting the country on the right track.  Here’s how it works.

Homeowners Need Efficiency Upgrades–But Can’t Afford Them

Imagine you are a low-income homeowner in Providence, Rhode Island. Chances are your home is 100 years old: the walls are barely insulated, the windows single-paned, and the boiler a relic of the 1950s.  In the winter your heating bills are such that you can hardly afford to run the heat, often leaving your family shivering.  And even though a $10,000 investment would dramatically lower those heating costs and pay for itself within 5 years, you can hardly pay for the mortgage–let alone $10,000 in efficiency upgrades.

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Business  / environment  / Huffington Post  / Renewable Energy

Too Big To Fail, Too Powerful to Regulate
December 6, 2008

The Big Three Dama

I’ve been watching the Big Three bailout drama with increasing dismay.  First, the executives from GM, Ford and Chrysler flew in private jets to Washington for a hearing, and then proceeded to beg for $25 billion–without offering a plan as to how the money would help them get out of their present mess.  Congress told them to come back with a plan, and suggested that next time they find a more plebeian mode of transportation. So back the executives came this week, humbly carpooling in the poorly made cars their companies produce, with more detailed plans for restructuring.  The CEOs magnanimously offered to work for $1 a year if they received the bailout money (nevermind that the bulk of their salary comes from stock options and bonuses, not salary).  They presented a plan for laying off workers, closing plants, focusing on core brands, and lowering health care and other costs.  Congress wasn’t exactly impressed, and polls show Americans are not in favor of yet another bailout for yet another mismanaged corporation.

But here’s the problem: the Big Three are just too big to fail.  They directly employ roughly 100,000 people in the United States, but their suppliers across the country employ hundreds of thousands more, and the ripple effect would send our already reeling economy into a tailspin.  It now looks like the auto companies will get their money, albeit only half of what they were originally seeking.  The same “too big to fail” logic was used to justify the bailout of AIG and several other financial institutions.  And, like it or not, in a “centralized” economy, the logic is quite sound.  What concerns me is that “too big to fail” usually means “too powerful to regulate.”

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Business  / environment

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