Business leaders present a vision for a sustainable economy

The address for this blog entry is: http://www.volans.com/2010/03/vision2050/.

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Allocating Patient Capital

The funding options for social innovators is diversifying as investors, from private foundations to venture capitalists, experiment with social impact investing. This area, appealingly re-branded ‘patient capital’, is developing fast, with networks like the Rockefeller Foundation-backed Global Impact Investing Network dedicated to scale the sector.

Among a growing number of funds being created in the impact investing market, the Acumen Fund stands out as one of the pioneering ones. The latest refection by its Founder and CEO, Jacqueline Novogratz, its worthy of sharing broadly, as it touches on key issues to the growth of the sector and the scaling of its impact.

So here it is, reprinted:

“In the first years of Acumen Fund’s existence, the two most challenging questions we faced were “Can this scale?” and “Will you ever exit?” As I wrote in my last letter to you, we’re seeing significant scale in our investments ranging from maternal health, to public toilets and solar energy. Of course, the more we find answers, the deeper our questions become. Regarding scale, we’re now doing more intense dives into understanding the trade-offs. On one hand, how do our investees avoid corruption in partnering with government; and on the other, how do they avoid being pushed to serve a wealthier clientele by more traditional investors focused more on profitability than on serving the poor?

Regarding exits, the news is good. Indeed, we exited two investments this quarter and hope to exit a third in the coming months. Most exciting is Jamii Bora, the affordable housing development outside Nairobi, Kenya, which has fully repaid its $250,000 loan! Three years ago, we lent this money so that Jamii Bora could build a housing development for low-income slum dwellers who had proven their ability to repay, but would never qualify for a traditional bank mortgage. I remember standing on the open land an hour outside Nairobi’s slums, listening to the inimitable Ingrid Munro, Jamii Bora’s founder, laying out her vision: the organization would build 2,000 houses, each equipped with an indoor kitchen and bathroom, a garden and a place for laundry; they would use solar energy, and create an efficient water system so that the water could be treated and recycled; and they would eventually see a town of 12,000 people flourishing.

Recently, I visited a development with 750 constructed houses along with thriving shops and a full-fledged school. More than 240 families - or about 1,300 individuals - have moved in, and many have painted the trim on their block houses, and planted gardens in backyards. Most thrilling to me was visiting Jane’s home, for I had spent time with her a year ago in her temporary dwelling in the Mathare Valley slum (here’s  my TED talk on her journey). Her house was beautiful: trimmed in orange and green with sunflowers touching the roofline, it seemed a palace compared to the shanty where Jane had spent her life.

Jane’s dream home.

The most extraordinary moment occurred as we stood in her new indoor bathroom which contained a toilet, sink and shower. “In Mathare,” she said, “the water is dirty and the children are always sick. The little ones especially are always suffering with diarrhea and it is too far to go to the toilets and too dirty and expensive as well. My only option was flying toilets, but the diarrhea could be so bad that the children would soil the floor. But now, the toilet is right here in your house.”

She then demonstrated the ease of using a toilet and flushing waste away. Nothing has ever reminded me of the indignity of defecating in bags and then throwing the waste on rooftops like the sight of Jane and her new toilet. More than 1.5 billion people have no access to good sanitation. It needn’t be that way.

Never before have I understood in a spiritual sense the potential of patient capital. Capital can be used to draw us close or to distance us from one another. Traditional societies that forbid usury want to ensure the group stays together and supports one another. The sub-prime debt phenomenon, on the other hand, is a powerful example of using capital in a way that distances. Wall Street investors had no stake in whether homeowners repaid their mortgages as they thought they were “safe” up to a certain default rate. Borrowers had no relationship with a traditional banker. The system was bankrupt of values and accountability.

In an increasingly interdependent world, we must think of ourselves as a single tribe. In a world with so much excess wealth on one hand and poverty on the other, we need a new asset class. Patient capital is money invested not for undue profit but to support opportunities for disadvantaged communities. Money earned is used to invest in others and not for personal gain; and investors provide management support for the sake of the others’ success. In return, the investee is accountable to repay as a member of that same community.

Patient capital can be a cornerstone of a new social contract and a more nuanced type of capitalism for our 21st century world. Acumen invested a quarter million dollars in an organization focused on slum dwellers to build an affordable housing development – an investment banks would not make. Today, a hopeful, diverse community exists. Jamii Bora has repaid Acumen, and we can now invest in other organizations focused on bringing life sustaining services to the poor. Finally, Jane’s joy in what she has herself accomplished is a joy shared by every Partner and team member of Acumen. She did it herself, of course, but it was the brilliant vision and execution of Jamii Bora and the patient capital financing from Acumen and others that enabled her to realize her dream.

The week in Kenya was one of the most extraordinary I’ve experienced: I’ve detailed it in a fairly long journal. Ecotact toilets now serve nearly 15,000 people a day; Insta is producing more than 15 million packets of protein-fortified porridge and is on its way to creating a retail market; and we are engaging in an exciting new agricultural investment focused on hybrid seed production and distribution.

Finally, on a personal level, thanks to Acumen Fellow Suraj Sudakhar, over 90 people in the Kenyan slums have joined seven self-organized book clubs to read The Blue Sweater, (which comes out in paperback today)! He and seven young men from the slums organized a gathering for nearly 100 people in Kibera to discuss the ideas in the book while I was there (an event I recount in the Huffington Post.) The quality of the questions was incredible. People asked about balancing family and leadership, about financing existing projects, and about what individuals there could do to help bridge the gap between rich and poor. It was truly one of the most moving evenings of my life and I thank every one of those young men for giving so much of themselves to make it happen.

Nearly 100 participants turned out for The Blue Sweater book club in Kibera.

It has taken me a few weeks to understand what happened that night. First, I was struck by the generosity and organizational efficiency of the young men who encouraged people to come from five different slums, some of them traveling more than 90 minutes on buses. Second, though everyone spoke about the corruption and challenges to those living in the slums, no one put themselves into the category of being “poor.” Rather, they hungered for what they could do to overcome challenges and help others as well. Ultimately, the individuals in that room seemed to transcend a feeling of Us and Them, and moved to a place of We. It is on this shared sense that I feel an ever-deepening commitment to this work and everything that it promises.

It will take each and every one of us, rich and poor alike, to build the world we dare to imagine. But that night in the Kibera slum, for one powerful moment, I got a glimpse of what is truly possible.

I wish all of you everything that the world has to offer.

Jacqueline Novogratz

The address for this blog entry is: http://www.volans.com/2010/02/allocating-patient-capital/.

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Tellus Mater Foundation Supports Volans

Volans has received a grant from the Tellus Mater Foundation to seed fund the Pathways to Scale Program; and support a year-long project to explore how entrepreneurs are mainstreaming the protection of natural ecosystems into the prevailing economic and business paradigm. The work will build on elements of the research The Phoenix Economy, which we published in 2009. 

The project will identify and work with today’s pioneers—scientists, activists, business leaders and progressive investors—whose metrics, technologies and business models are advancing an economy that takes into account the services provided by ecosystems. Through surveys and research, it will explore the success stories for these models, identifying them as prototypes of tomorrow’s economy, creating awareness of the barriers they face to scale, and helping them increase their influence with key stakeholders, such as business, investors and government policy-makers.

A number of strategic partnerships are being put in place with international bodies, foundations and research networks to multiply the impact of the work. We are grateful for the foundation’s support and look forward to this exciting project in 2010.

The address for this blog entry is: http://www.volans.com/2010/02/tellus-mater-foundation-supports-volans/.

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Carbon Trading: The new anti-globalization battle?

This week, activists protested outside a Carbon Trading Summit in New York, as evidence emerges of wrongdoing against indigenous peoples around the world, driven by a fast-paced financial industry emerging around REDD — the proposed mechanisms at the UN for trading reduced emissions from avoided deforestation.

REDD-Monitor reports on the disturbances as executives from JPMorgan Chase, Goldman Sachs, Duke Energy, American Electric Power and other corporations mingled with representatives from government, carbon credit aggregators, hedge funds and carbon traders.

“The same Wall Street bankers who gave us the global climate crisis are trying to own the sky,” said Brian Tokar, director of the Institute for Social Ecology. In its press release about the event (copied below), the Indigenous Environmental Network argues that what can go wrong about REDD has already gone wrong.

Abelie Wape, an Indigenous leader from Kamula Doso in Papua New Guinea, was forced at gunpoint to sign away the carbon rights to the forest. Kamula Doso is one of the most controversial of the REDD projects currently being set up anywhere in the world. These accusations of violence make any pretense of free, prior and informed consent farcical.

PRESS RELEASE
13th January 2010

Tom Goldtooth, Executive Director
Indigenous Environmental Network
(218)760-0442

Carbon Markets Violate Indigenous Peoples’ Rights and Threaten Cultural Survival

Indigenous leader kidnapped and forced at gunpoint to surrender carbon rights for REDD in Papua New Guinea

New York, USA — As carbon traders hawk permits to pollute at the Second Annual Carbon Trading Summit, Indigenous Peoples denounced that selling the sky not only corrupts the sacred but also destroys the climate, violates human rights and threatens cultural survival.

“Carbon trading and carbon offsets are a crime against humanity and Creation,” said Tom Goldtooth, Executive Director of Indigenous Environmental Network. “The sky is sacred. This carbon market insanity privatizes the air and sells it to climate criminals like Shell so they can continue to pollute and destroy the climate and our future, rather than reducing their emissions at source.”

“This Carbon Traitors’ Summit comes on the heels of the failed UN Copenhagen climate conference which put forests in carbon markets by creating a mechanism called REDD or REDD-plus (Reducing Emissions from Deforestation and Degradation).” According to Goldtooth, “Most of the forests of the world are found in Indigenous Peoples’ land. REDD-type projects have already caused land grabs, killings, violent evictions and forced displacement, violations of human rights, threats to cultural survival, militarization and servitude.”

A recent World News Australia television exposé sheds light on the risks of REDD, carbon traders and the shocking kidnapping of a Papuan New Guinea native leader. Abilie Wape, a leader of the Kamula Doso Peoples claims he was forced at gun point to surrender the carbon rights of his tribe’s forest.

A visibly shaken Wape told reporters, “They came and got me in the night, police came with a gun. They threatened me. They forced me to get in the vehicle. Then we came in the night to the hotel. They told me, “You sign. Otherwise, if you don’t sign, I’ll get a police and lock you up.”

“Indigenous Peoples are being forced to sign over their territories for REDD to the Gangsters of the Century, carbon traders, who are invading the world’s remaining forests that exist thanks to the knowledge of Indigenous Peoples,” denounced Marlon Santi, President of the CONAIE, the Confederation of Indigenous Nationalities of Ecuador, one of the most powerful native organizations in the world. “Our forests are spaces for life not carbon markets.”

Another REDD-type project, a UNEP-funded carbon forestry project in the Mau forest of Kenya has resulted in evictions and threatens the cultural survival of the Ogiek hunter-gathers. “Ordering us to leave Mau is like taking a fish out of water and expecting it to survive” said Ogiek People Development Program Director Daniel Kobei. According to REDD-Monitor, “UNEP’s failure to prevent the eviction of thousands of people to make way for a carbon project does not bode well for the millions of Indigenous Peoples and forest dwelling communities of the world.”

Survival International reports that REDD schemes could leave Indigenous Peoples “with nothing.” “Everyone who cares about our future, forests, Indigenous Peoples and human rights should reject REDD because it is irremediably flawed, cannot be fixed and because, despite efforts to develop safeguards for its implementation, REDD will always be potentially genocidal,” concluded Goldtooth.

The address for this blog entry is: http://www.volans.com/2010/01/carbon-trading-the-new-anti-globalization-battle/.

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Humanity Demanding 1.4 Planets

Global Footprint Network is releasing data today that reveals a growing gap between human demand on ecological services and the rate at which nature can supply those services. It would now take nearly one and a half Earths to generate all the resources humanity consumes and absorb all our CO2 emissions, according to the latest Ecological Footprint and biocapacity calculations. These figures are based upon source data from 2006, the most recent year for which such data are available.

The data show that humanity’s demand on the biosphere for providing natural resources and absorbing carbon dioxide emissions is 44 percent more than what nature can provide. This ecological overshoot means it now takes approximately 18 months for the Earth to regenerate what we use in one year. The urgent threats we are facing today - most notably climate change, but also biodiversity loss, shrinking forests, declining fisheries and freshwater stress - are symptoms of this trend.

“The future will be shaped by these resource limitations, so, it’s clearly in the self-interest of every country to transition quickly from carbon and resource-intensive economies to the economies of the future.” Global Footprint Network President Mathis Wackernagel said.  “While international agreements are critical, many nations are not taking a ‘wait-and-see’ approach, rather they are investing now to take advantage of the world’s demand for renewable energy and clean technology.

The address for this blog entry is: http://www.volans.com/2009/11/humanity-demanding-14-planets/.

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Beyond Carbon: Markets for Water and Biodiversity in Latin America

The Katoomba Group has launched the Mercados Ambientales, a platform that seeks to catalyze markets for ecosystem services in Latin America. Earlier this year, their flagship report: ‘Beyond Carbon: Biodiversity and Water Markets‘ provided a practical overview of the type of cases that can advance this new field in the region. The report argues, for example, that Brazil will have to look beyond carbon markets to include water and biodiversity market mechanisms if it is to guarantee a halt to deforestation in the Amazon.

Watch the space: The group is finalizing two reports: The ‘State of the Global Water Quality Marketplace”, which will quantify market transactions, with insight into both nutrient trading programs and voluntary schemes that operate outside of the regulatory framework; and “State of Biodiversity Markets”, both due in January 2010.

The address for this blog entry is: http://www.volans.com/2009/11/beyond-carbon-markets-for-water-and-biodiversity-in-latin-america/.

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National Geographic Backs Ecological Footprint

EarthPulse: State of the Earth 2010, which opens with a full page of Global Footprint Network data, offers the clearest endorsement yet by a mainstream publication of the idea of sustainability as living within the means of one planet. This reinforces the vision of Mathis Wackernagel–the pioneering founder of GFN–of the strategic ‘pathways to scale’ for the ecological footprint model, by leveraging connections to mainstream institutions–a topic I explored earlier this year in an interview with Mathis.

EarthPulse: State of the Earth 2010 explores how the trends driving human society such as our growing numbers, our rising consumption, urban migration and global trade are interacting with the resources upon which life depends.  It is a story told in stark statistics and even more startling images. Women in Bangladesh wade through neck-high waters as melting Himalayan glaciers cause rivers to swell. Farmland is swallowed by China’s Gobi dessert, advancing 3,900 miles a year due to over-plowing and overgrazing. In Borneo, a scarred stretch of barren earth is all that remains of an old-growth forest.

“On a planet defined by unprecedented change, perhaps our most precious resource has become knowledge,” issue sponsor Allianz writes in the introduction. “Only with access to accurate, unbiased facts can a world brimming with possibilities and perils begin to make sense.”

It is Global Footprint Network’s mission to provide the data that can quantify the scope of the challenge and identify those solutions that will provide meaningful change. With resource accounting tools that enable us to measure and understand our ecological demand, we can begin to weigh our options and chart our course toward a sustainable human future.

The address for this blog entry is: http://www.volans.com/2009/11/national-geographic-backs-ecological-footprint/.

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Catalyzing Social Investment in India

I’ve just come back from Delhi, India, where we brought together 120 leaders to catalyze investment for entrepreneurial solutions. The meeting is a key milestone in the work we are doing with the Tallberg Foundation, in the run up to the Rework the World Summit in Sweden in 2010.

The address for this blog entry is: http://www.volans.com/2009/11/catalyzing-social-investment-in-india/.

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Resource Peaks: Which Will Run Out First?

The global economy is in ‘planetary overshoot’ mode; economic and business models not accounting properly for the use of the planet’s resources. Earlier this year, Mathis Wackernagel of the Global Footprint Network argued that we are entering a world of ‘peak everything’.

Whether we’ve already hit ‘peak oil’, Greenbang writes, there are no shortage of other peaks that could be looming in the not-too-distant future. A recent Greenbang blog goes like this:

“…Which do you think will strike us first? Will it be peak oil or …

• Peak water: As with peak oil, the concern here isn’t that we completely run out of water, but can no longer access the good stuff easily (and economically). While it might seem an odd worry for a planet with a surface that’s 70 per cent water, remember that most of that’s not drinkable. Much of the stuff that is, we’re draining from underground aquifers in many places faster than nature can replenish it.

• Peak credit: Last year’s global financial meltdown saw more than a few market-watchers speculate that we have now hit the limits of credit and debt.
• Peak food: With the global population set to climb to 9 billion by mid-century and climate change expected to make agriculture even more difficult, some experts are sounding the alarm on the ability of food production to keep up with demand. Last month, Megan Clark, head of Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO), warned that, over the next 50 years, we’ll have to grow as much food as we have throughout the entire history of civilisation.
• Peak uranium, silver or indium: Researchers at the University of Augsburg and Yale University recently analysed our consumption of a number of critical minerals. Their conclusion? If the rest of the world catches up to just half of today’s consumption levels in the US, we’ll be left with just 19 years’ worth of uranium, nine years’ worth of silver and four years’ worth of indium.”

The address for this blog entry is: http://www.volans.com/2009/11/resource-peaks-which-will-run-out-first/.

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Think ‘macro-insurance’. Scaling North Africa’s Energy Vision

Munich Re, the insurance company, is demonstrating an extraordinary vision and leadership as it gears to solve some of the barriers to scale of large renewable energy plants — demonstrating what investors can do in other areas to unleash the Pathways to Scale of more sustainable markets.

Munich Re has developed an innovative insurance offerings to help provide planning certainty to investors in new power-plant technologies. Even investing in an industrial-scale solar energy plant in the deserts of North Africa can be considered a possibility, according to the firm and the news by Greenbang.

“This is no longer a distant vision but technologically fascinating and also achievable,” said Torsten Jeworrek, a Munich Re board member. “DESERTEC is clearly banking on the right incentives in the long term, namely climate protection and a low-carbon energy sector. We are therefore commencing a dialogue with visionary thinkers and companies that, like us, are convinced of DESERTEC’S enormous economic, ecological and social potential.”

The initiative resonates with earlier posts I made on the need for the EU to develop these future markets by thinking like a pioneer, but Munich Re shows that business can move quicker than large public bureaucracies if and when new market opportunities become apparent.

The address for this blog entry is: http://www.volans.com/2009/11/insurers-can-materialize-north-africas-energy-vision/.

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Cool IT. Google a Climate Laggard?

Greenpeace has launched Cool IT Challenge, which ranks the executives of the major IT companies–including Google, Microsoft, IBM and Cisco–according to what their companies are doing to reduce carbon emissions.

The initiative exposes the gap between what the IT industry could do to fight climate change, and what they’re doing today.  Every IT executive has a profile page that includes a list of actions one can take to help pressure them to act.

Greenpeace’s central theme is, however, a propositional one: The IT industry can be a pioneer of a new economy. They can make money, create new markets and generate new jobs while helping to stop runaway climate change. Their services and products could cut the world’s emissions by an estimated 15 percent when applied in industry, buildings, transport and power sectors.: A win-win for business and the planet.

Currently the IT industry’s carbon footprint is growing, and much of these green IT opportunities remain unrealized potential or lack the detailed studies to show how and where they can reduce overall emissions.

The address for this blog entry is: http://www.volans.com/2009/10/cool-it-google-a-climate-laggard/.

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Business and Biodiversity - Change In the Making?

A UN-backed report looking at 31 companies in the food, drink and tobacco industries, predicted increasing risks to the supply of raw materials and reputation risks for firms that undervalued natural services such as healthy soils, water and insect pollination, in line with earlier posts I’ve done on this subject.

While the report’s finding is not surprising — that companies are failing to address issues of sustainable sourcing — the coalitions and investor networks that are forming around the issue are a sign of serious action in-the-making.

The report was published by the Natural Value Initiative (NVI), a collaboration between UNEP’s Finance Initiative, Fauna & Flora International and FGV, the Brazilian business school. Their partnership aims to raise awareness on the links between biodiversity, investment value and the finance sector, as well as mobilise investors.

Of the companies surveyed, only Unilever qualified as best practice, judged against a new Ecosystem Services Benchmark took, which evaluates the strategic approach to the risks faced by a drain on raw materials. The UK retailer Marks and Spencer was also praised.

Also on our radar

Another initiative by UNEP’s Finance Initiative is the Forest Footprint Disclosure Project (FFD Project); a new UK government-supported initiative, created to help investors identify how an organisation’s activities and supply chains contribute to tropical deforestation, and link this ‘forest footprint’ to their value. The FFD Project launched on 15 June, 2009 at with the backing of 12 major financial institutions with over $1.3 trillion in assets under management.

In January 2010, the first annual disclosure report will:

• Identify companies leading on this issue
• Analyse how companies are positioned to sustain their value
• Offer peer group comparison of companies to drive sector performance improvement

The FFD Steering Committee Members are: Carbon Disclosure Project, Fauna & Flora International, Global Canopy Programme, The Prince’s Rainforests Project, Strategic Environmental Consulting, UK Department for International Development and UNEP Finance Initiative.

The address for this blog entry is: http://www.volans.com/2009/10/business-and-biodiversity-change-in-the-making/.

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Carbon Scams: The Risks Ahead

The $100 billion carbon-trading market is called into question after the world’s largest auditor of clean-energy projects was suspended by United Nations inspectors. SGS UK has had its accreditation suspended as a result of being unable to prove that its staff had properly inspected the projects it was accrediting for carbon trading or that its staff was properly qualified to do so.

A report by Greenpeace has helped direct attention to one particular case, the Noel Kempff project in Bolivia, which illustrates the potentially disastrous pitfalls of the growing market for forest offset projects (REDD), raising critical questions about the pathways forward.

The Bolivian project started in 1996, driven by The Nature Conservancy and Fundación Amigos de la Naturaleza (FAN). The following year, the Bolivian government signed an agreement with three polluting energy corporations: American Electric Power (AEP) BP-Amoco (BP) and Pacificorp. Under the agreement, the corporations would pay to protect almost 650,000 hectares of rainforest for 30 years. In return, the carbon offsets generated allowed the companies to continue polluting.

But the lack of adequate monitoring, verification and assurance of REDD projects are key obstacles in the way. Critics rightly fear that these loopholes could turn the proposed carbon market solution into a cover-up for growing emissions-as-usual in the developed world.

Between 1997 and 2004, Greenpeace found that “AEP, Pacificorp, and BP reported about 7.4 million tons of carbon offsets from the Noel Kempff project to the US Department of Energy. This is considerably more than the amount verified for the 30 year project: 5.8 million tons. Greenpeace explains that the investors “may have claimed millions of tonnes of CO2 emissions reductions that never occurred”.

The highest risks are around the long-term guarantees that the forests in question will remain intact, argues REDD-monitor, which is impossible to guarantee. Besides the challenges of effective law enforcement and governance in Bolivia, drought, forest fires, pest infestation, disease could all have a dramatic impact on the forest in the project area.

In a rapidly changing climate such threats to the forest become more likely to happen. If AEP, BP-Amoco and Pacificorp have already used the project to offset their emissions and the forests were to be destroyed, this would double the volume of CO2 emissions.

In the meantime, 49 leaders of the main social and environmental movements in Brazil have jointly called on the Government of Brazil to reject REDD as a carbon market-based mechanism and on using REDD as a way of compensating emissions from Northern countries.

The address for this blog entry is: http://www.volans.com/2009/10/carbon-scams-the-risks-ahead/.

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WWF to Screen Forest Investors

Next December, WWF will launch the Investment Screening Guidelines for Financial Investors, which will be used to screen investors and companies whose activities impact forests, such as timber, pulp and paper, palm oil cultivation and mining.

The address for this blog entry is: http://www.volans.com/2009/10/wwf-to-screen-forest-investors/.

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Deforestation: Enter Google and Space Agencies…

…to partner on a project for the satellite monitoring of forests. But key to their success from outer space, they argue, will be to find their feet on ground. This is something on our map, as the Pathways to Scale program seeks to catalyze markets and alliances to speed up ecosystem services.

“The only way to measure forests efficiently is from space,” said Jose Achache, director of the Group on Earth Observations (GEO), which is linking governments, space agencies such as NASA and others in a new partnership to measure forests. The system will make annual assessments of forest carbon stocks, compared to a current five-year cycle.

Google, which offers satellite images via its Google Earth site, would contribute with a related project. Details of the company’s involvement would be given in November.

From Outer Space, but with the Feet on the Ground

“Investors will want some kind of guarantee that when they are putting money into forests that the forests will remain there and remain in good condition,” Achache said.

America’s NASA, the European Space Agency (ESA) and national space agencies of Japan, Germany, Italy, India and Brazil were among those taking part in the forest mapping. Costs would be low, Achache said, since satellite data were already being collected for other purposes. GEO’s members include 80 governments as well as U.N. organizations.

Seven countries would act as pilot projects in 2009-10 — Australia, Brazil, Cameroon, Guyana, Indonesia, Mexico and Tanzania — based on satellite images taken in recent months. Under the satellite project, a first phase was to show how much of a country was forested. A second phase would be to work out how much carbon was locked up in each type of forest.

Stephen Briggs, head of ESA’s Earth Observation Science, Applications and Future Technologies unit, said radar images of forests can measure carbon above ground since the microwaves are scattered by passing through vegetation.

But efforts from outer space are likely to be only a part of the solution. Key to the ultimate success of this alliance is bringing in “ground-level” actors to generate data, verification and, not least, to influence the good governance in forest management. “We need some form of validated, assured mechanism,” Briggs added. Assessments of carbon stocks from space need to be calibrated against measurements taken on the ground.

Others are also planning to enter this space: The Food and Agriculture Organisation (FAO) together with the State University of South Dakota has recently declared that they, too, will make available satellite imaging for free to developing countries to monitor deforestation.

Photo Credit: Reuters “An aerial view of a cattle farm is seen in an Amazonian deforested jungle close to Maraba, in Brazil’s central state of Para in this May 3, 2009.”

The address for this blog entry is: http://www.volans.com/2009/10/deforestation-enter-google-and-space-agencies/.

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Can Corporations Get Ecosystem Valuation Right?

Seeking this ambitious goal is the World Business Council for Sustainable Development, identified as a Phoenix 50 pioneer by Volans earlier this year. WBCSD has just launched the report Corporate ecosystem valuation - Building the Business case.

Companies and their operations, argues the WBCSD,  will be under increased scrutiny and should respond by better understanding and proactively managing their ecosystem impacts and dependence, as well as exploring and developing new business solutions to meet these challenges.

The impacts

All major companies have impacts on the world’s ecosystems, which are being rapidly depleted, in part because their services to the planet have been under-valued, i.e. taken for granted.

The impact of corporations and global supply chains on natural ecosystems is massive, and the consequences poorly understood. For example, WBCSD points out:

• Freshwater is a critical input for every conceivable major industrial process;
• The pharmaceutical industry benefits from genetic resources;
• Agribusiness and the food sector depend on ecosystem services like pollination, and pest and erosion regulation;
• Forest industries – and the downstream construction, communications and packaging sectors – rely on continued supplies of timber and wood fiber;
• All extractive industries cause some level of ecosystem disturbance; while tourism increasingly builds on an ecosystem’s cultural services and aesthetic values; and all building owners and plant operators benefit from the natural hazard regulation service that some ecosystems provide.

Expect New Corporate Risks

The world loses natural capital worth between €1.35 trillion and €3.10 trillion each year, found The Economics of Ecosystems and Biodiversity (TEEB). Because these loses are real, ecosystem degradation is becoming a critical sustainability issue for business and society at large. Businesses must expect changing government policies and regulatory frameworks to be developed to address these pressing ecosystem challenges – at the global, regional and local levels.

Part of what Volans will be doing over the next year is to work with leading pioneers to develop the different scenarios of what those regulatory and market environments might look like. Mindsets are beginning to change, albeit still too slowly, about the level and scope of business impacts on, and use of, ecosystems – among customers, regulators, shareholders, investors, NGOs and the media.

What to look out for

WBCSD’s Ecosystem Focus Area has launched the Ecosystem Valuation Initiative (EVI), which will be working with a number of member company “road testers” to develop a Guide to Corporate Ecosystem Valuation that makes the case for corporate ecosystem valuation as an integral part of business planning and decision-making and guides companies through the process of undertaking ecosystem valuation studies. The target date for the release of the guide is October 2010 during the next Conference of the Parties to the Convention on Biological Diversity (CBD) in Nagoya, Japan.

The key question with this and other change-driven initiatives; the international ministerial meetings; the investment capital funds; and the civil society networks all whom are trying to put ecosystems valuation on the map is: How can critical mass be accelerated? This is of central concern to Volans and the Pathways to Scale program, and where efforts like WBCSD will have a central role to play in providing bridges to corporate leaders who are either enlightened individuals, or are starting to think seriously about the changing landscape of corporate risk and reputation.

The address for this blog entry is: http://www.volans.com/2009/10/can-corporations-get-ecosystem-valuation-right/.

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Homo Volans, Taking Flight

Volans has taken the work of the economists Kondratiev and Schumpeter as guide stars since we started – as flagged in The Phoenix Economy earlier this year. So it was nice to see The Economist recently picking up the same themes and flagging the key role of creative entrepreneurs in periods like these – but a little spooky to see Homo Volans taking flight there, too.

The address for this blog entry is: http://www.volans.com/2009/10/homo-volans-taking-flight-with-the-economist/.

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African Demographics vs. Green Economy

The address for this blog entry is: http://www.volans.com/2009/09/african-demographics/.

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Investors worth $13 trillion raise their voice on climate

The world’s largest global investors issued on Wednesday a joint call for strong action from U.S. and international policy makers in the fight against global warming. Its not the average communique in that it is signed by 181 investors collectively managing more than $13 trillion in assets, the investor statement is the largest of its kind on climate change in world history.

“Investors have a crucial role to play in building a low-carbon, energy efficient global economy,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, which co-convened the forum and which Volans profiled earlier this year as a Phoenix Economy pioneer. “But without strong policies that encourage clean technologies and discourage high-polluting technologies, their hands are tied.”

Investors released the statement at an all-day International Investor Forum on Climate Change hosted by New York State Comptroller Thomas P. DiNapoli and keynoted by British economist Lord Nicholas Stern. Amid growing focus on upcoming international climate treaty talks and Congressional debate of climate and energy legislation, this major policy statement calls for a strong and binding international treaty that can catalyze massive global investments in low-carbon technologies. Signatories to the statement include state treasurers, controllers, pension fund leaders, asset managers and foundations worldwide.

“We must chart a new course toward long-term, sustainable business practices,” said DiNapoli, head of the $116.5 billion New York State Common Retirement Fund. “We cannot drag our feet on the issue of global climate change. I am deeply concerned about the investor risks climate change presents, and the human cost of inaction is unthinkable. As investors in the global economy, we can lead the way toward a future of lasting prosperity.” The New York State Common Retirement Fund exists to provide benefits to more than one million state and local government employees, retirees, and beneficiaries. DiNapoli last year committed to investing $500 million over a three year period in green businesses. To date, the Fund has invested $200 million under DiNapoli’s Green Strategic Investment Program.

The call comes in advance of the climate negotiations in Copenhagen this December. The outcome of those climate talks depends heavily on the course of debates in the U.S. Congress on climate and energy legislation. The House passed a comprehensive bill in June and Senate consideration of a similar climate bill is expected to begin within weeks.

Investors’ interest in ecosystem services

Their ambitions include putting in place “robust measures to reduce deforestation and promote afforestation” around the world, which is arguably one of the toughest areas to advance on. This is one of the themes which the Pathways to Scale Program is interested in pioneering, given that progress in this area will require to work with leading models and entrepreneurs, such as the Katoomba Group, the Amazon Fund, and the Global Canopy Programme’s work on ecosystem valuation, among many others developing specific solutions, to identify the barriers and blockages they face to scale, and signal the opportunity areas where large investor groups and policy-makers (who are creating specialized international funds and support programmes) can help create influential critical mass for system change.

Connecting investor groups with pioneers to co-create the necessary pathways to scale is a critical step in the transition to a low-carbon economy. Among the investor groups which should be part of such effort are the forum’s sponsors:

• Ceres is a leading coalition of investors and environmental groups working with companies to address sustainability challenges such as climate change. Ceres also directs the Investor Network on Climate Risk, an alliance of 80 institutional investors with collective assets totaling more than $7 trillion.
• The Institutional Investors Group on Climate Change (IIGCC) is a forum for collaboration on climate change for European investors. The group’s objective is to catalyze greater investment in a low carbon economy by bringing investors together to use their collective influence with companies, policymakers and investors. The group currently has 56 members, representing assets of around €4trillion.
• The Investor Group on Climate Change Australia/New Zealand (IGCC, Australia/New Zealand) represents institutional investors operating in Australia and New Zealand, with assets around A$500 billion, and others in the investment community interested in the impact of climate change on investments. The IGCC aims to ensure that the risks and opportunities associated with climate change are incorporated into investment decisions for the ultimate benefit of individual investors.
• The United Nations Environment Programme Finance Initiative (UNEP FI) is a global partnership between UNEP and the financial sector. Over 170 institutions, including banks, insurers, fund managers and investors, work with UNEP to understand the impacts of environmental and social considerations on financial performance.

Photo Credit: Sipa Press/Rex

The address for this blog entry is: http://www.volans.com/2009/09/investors-worth-13-trillion-raise-their-voice-on-climate/.

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EU Barroso’s ‘radical pathways’ to cut emissions

‘Radical’ is not the average qualifier for the European Commission’s President, Jose Manuel Barroso. Over the last two years, his efforts to align European countries behind ambitious climate targets have run into the inevitable stalemate and compromise.

But as Barroso unveils his new ‘manifesto’, intended to win the support of the Parliament for the renewal of his mandate, he argues that ”we need to start working now on a radical pathway to reach a far more sustainable Europe by 2020″, Reuters informs. Among the unveiled priorities are de-carbonizing Europe’s electricity supply and transport sector, including maritime transport and aviation, as well as the development of clean and electric cars.

Barroso already has the support of the member states, but needs the support of the parliament in order to win a vote of approval. The parliament, argues Pete Harrison, has consistently taken a greener approach than the EU’s 27 heads of state during negotiations over the last two years over EU energy reform and measures to curb pollution from cars and industry.

While the Green party’s support is important for securing Barroso’s vote of approval, environmental campaigners have received Barroso’s exhortations with caution. Joris den Blanken of Greenpeace thinks that ”many questions remain on how he is going to concretely put Europe’s economy on a sustainable pathway.” as there is no plan to reduce Europe’s depletion of natural resources like forests and fish.

The real test, however, is not about Barroso’s re-election, but whether the EU institutions can secure the level of results that we need in terms of sustainable development. Barroso is arguably paying some cosmetic service to his manifesto, ‘pitching’ a language of radical pathways to win the support of the greens, a prime example of the logic of electoral politics, which is the centerpiece of democratic systems. The short-term interests that govern the electoral 4-6 year cycles is perhaps the most important way in which democracy hinders sustainable development.

Even if Barroso is re-elected, the critical issue will be how, precisely, will he manage to deliver. A greener parliament is, sadly, no assurance of the long-term outcomes that are needed. The role of actors such as Greenpeace is essential to sustain the long-term interests on the table, but by no means are they enough. If real progress is to be made, democratic systems need to be able to support the long-term goals of sustainability; a difficult task when the systems are built around short-term negotiations. Transparency plays a key role, but new, proposals are needed for how democratic institutions can increase the voice of those concerned with a sustainable future.

Voice to the pioneers

As Volans works to help the future take flight, a key question for us is how to turn the volume up on the policy voice of pioneers. It is no news that a privileged access to politicians and policy-makers provides established carbon-intensive industries a powerful policy influence. This lobbying has a significant negative effect on democracy and on sustainable development; as not all voices are heard equally behind closed doors. Accelerating Europe’s transition to a low-carbon economy will therefore not only require bold strategies by governments, but also levels of political vision that go well beyond the politics-as-usual, and the ‘lobbying-as-usual’.

Most pioneers have have few agenda-setting resources and their policy ‘needs’ are well below-the-radar of the average law-maker. One example of how business pioneers are getting creative when it comes to amplifying their voice is the UK lobbying campaign ‘We Support Solar’, which resembles the advocacy strategies used by social movements, yet are driven by innovative companies such as Solarcentury. More of these alliances are needed to exploit the creative tensions between democracy, politics and sustainable development.

Barroso’s proposals include improving the energy interconnection between Europe and its neighbors, not least to guarantee Europe’s energy security. Here, technologies such as Concentrated Solar Power (CSP) could offer large-scale wins –even if they remain embryonic today, and creating and communicating the vision and knowledge of their ‘pathways to scale’ is essential.

As the EU parliament considers the support for Barroso’s next term, concrete ideas are needed on how his ‘radical pathways’ can be achieved. For example, in charting the way for increasing the inter-connection with its neighbors, the EU needs to engage more directly with African energy pioneers, such as New Energy Algeria, which are gearing up to supply renewable energy to the EU on a large-scale, and understand and learn from what it will take to make that a reality. The companies and investors betting on renewable energy markets have an important role to play in helping the EU become more nimble and effective as it carves a low-carbon future for itself.

The address for this blog entry is: http://www.volans.com/2009/09/eus-barroso-urges-for-radical-pathways-to-cut-emissions/.

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Brazilian leaders discuss pathways to climate security

The Pathways to Scale framework developed by Volans was recently used by the Brazilian association for leadership development (ABDL) to train climate leaders in Brazil. The training focused on the challenges of overcoming the barriers to move faster towards systemic change.

The workshops were part of the Program on Leadership for Climate Security, which is training leaders of all sectors in Brazil on how to increase the impact of their initiatives on climate mitigation and adaptation.

“The Pathways to Scale model is helping us to frame and understand the barriers and strategies to overcome them.” said Thais Corral, leader of the Adapta Sertao initiative, who led the training workshop. “For me this is the core challenge for leaders is this field: how to understand the barriers we face at each step, and hot to create new pathways that can sustain the movement forward.”

Participants are leading a wide range of initiatives, from clean energy platforms in the Amazon to information inventories that will enable the application REDD –the carbon tradable permits generated by protecting forests– a central piece of the COP15 climate negotiations in Copenhagen later in the year.

The address for this blog entry is: http://www.volans.com/2009/09/brazilian-leaders-discuss-pathways-to-climate-security/.

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A Cluster for Climate Adaptation in Brazil

Last week I met in Sao Paulo, Brazil, with two irrigation companies and the social enterprises that are driving an innovative collaboration in the north of Brazil. Led by the Human Development Network (REDEH), the partnership is called Adapta Sertão. The meeting we organized aimed to use the Pathways to Scale framework to help the partners think through some of the challenges and opportunities they face as they re-group to scale the impact of their model.

Adapta Sertao has gathered different sectors to develop an agricultural production model for the semi-arid region of Brazil, where the majority of the population is poor and relies on subsistence farming and government subsidies. It aims to increase the area’s resilience to climate change by helping poor people become efficient agricultural producers, reverting an ‘aid culture’ that has prevailed for decades, with poor results.

The partnership articulates water and renewable energy technologies, social networks and grassroots mobilization, with public-private partnerships. It builds on the success of its first project Pintadas Solar, implemented (2006-2008) in the Pintadas municipality of 11.000 people in the State of Bahia, which caught international attention when awarded the SEED Initiative prize as a practice with the potential to be worked out at scale. Besides the companies involved, other partners include the Centro Clima, at the Federal University of Rio de Janeiro; the government of the State of Bahia; the German Federal Environment Agency; and the Secretary of Science and Technology of the State of Bahia.

Adapta Sertao now aims to disseminate the model by creating a large network of municipalities throughout Brazil’s dry and poor regions, and eventually other regions of the world.

The meeting in Sao Paulo took place as I participated of the annual conference of the Brazilian Business Council for Sustainable Development (CEBDS). It included Adapta Sertao’s leadership, the two irrigation companies that are part of the cluster -–one of which, Netafim, holds more than 40% of the Brazilian irrigation market– and a representative from CEBDS.

Participants explored their work so far against the 5-stage model, and worked through some of the challenges they face for moving from the successful Pintadas pilot to the creation of effective markets for the solutions.

The companies saw the potential to deepen their market leadership in the region, but there was general agreement that the precarious infrastructures in the Sertao would need to go beyond a ‘base of the pyramid’ business model for the companies. The partners would need to work together to create the infrastructures that are required for the market opportunity to be real. A new business model, it was argued, would need to provide solutions for the distribution model for products and services, but also put in place a financial model for poor people to access the irrigation kits; a training and capacity building model for people to acquire the skills and capabilities needed to sustain new enterprises, and the governance structure that would enable business and governments to work together effectively

“I think the innovative research, methodology and examples that Volans’ Pathways to Scale Program brings to initiatives like Adapta Sertao are critical to inspire us to go beyond the barriers that are too much entrenched in our mental models.” said Thais Corral, leader of the Adapta Sertao initiative after the meeting, “it helped us to envision the ways we can collaborate to adopt Pathways to Scale that are quicker and clearer.”

Going forward, Adapta Sertao will be on our map as one of the new cluster initiatives that are emerging in response to climate adaptation challenges around the world. We look forward to a deeper engagement with the initiative and its partners, as it plans and implements next steps for scaling its transformative impact on Brazilian agricultural markets.

The address for this blog entry is: http://www.volans.com/2009/08/a-cluster-for-climate-adaptation-in-brazil/.

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Entrepreneurship and Scale: Reworking Platforms

A few days back I led a session at the Tällberg Forum in Sweden on Entrepreneurship and Scale, which profiled four remarkable entrepreneurs. But rather than celebrating their heroism, this was in the spirit of a ‘reality check’. An extraordinary amount of hope is being placed on entrepreneurs around the world but time is running out. The large-scale transitions that are needed to more equitable, sustainable, and low-carbon economies demand far greater ambitions of scale. Hence our leading question: Can these entrepreneurial models be scaled and, if so, how?

I introduced the groundbreaking work we are doing with the REWORK initiative, a partnership between Tällberg Foundation and YES, the youth employment summit. Rework seeks to scale up youth green jobs by brokering scale-oriented partnerships between green innovators and youth movements, providing new propositions to investors, business and governments.

The innovators profiled are part of the REWORK effort, plus we asked a number of people working with larger infrastructures — from the financial system, international aid, and business — to give their views on how to marry the Davids and the Goliaths. Enter the entrepreneurs:

• Iman Bibars, VP of Ashoka Egypt for her ‘Housing for All‘ initiative with whom we are working to generate entrepreneurship opportunities for young people;
• Pepijn Steemers, Director of D.light Designs East Africa for a solar energy partnership we are facilitating involving ‘young solar entrepreneurs’ in Kenya, Tanzania and Uganda;
• Deepa Gupta of the Indian Youth Climate Network with whom we are planning to scale up their ‘climate solutions‘ programme by bringing in Indian business schools and investors;
• Minou Fuglesang, Executive Director of Femina HIP, a multimedia platform in Tanzania which reaches 2 million young people on issues of lifestyle and reproductive health, and with whom we are exploring ways to use the media platforms to inspire young entrepreneurs to start green businesses.

Bringing in the “infrastructure” perspectives:

• Carl Mossfeldt, Executive Vice President of the Tällberg Foundation who leads the REWORK initiative provided insights on the collaborative innovation being unleashed by the initiative and the methods behind it;
• John (Elkington, of Volans) gave examples from big business and the ways in which business connects (partners, buys out or copies) ideas from from front-running innovators.
• Herman Mulder, former Head of Risk Group at ABN Amro gave a clear set of ideas on how the financial system can be reworked to support entrepreneurs on the ground; and based on the cases of the different entrepreneurs profiled,
• Mia Horn at Rantzien, the new Deputy Director-General of SIDA, the Swedish International Development Agency, provided a refreshing perspective on how aid agencies could support entrepreneurial environments better in developing countries.

The sessions was powerful, the contributors connected to one another and provided their piece of the puzzle in a compelling way. Among the 60+ participants there was a sense of possibility. These pioneers are implementing cutting-edge solutions to some of the world’s most complex problems. Connecting entrepreneurs with youth movements and networks, channeling youth energy to scale up green business models, and bringing in investors and business with new development propositions, has the potential to create impacts that don’t fall short of systemic change.

The address for this blog entry is: http://www.volans.com/2009/07/entrepreneurship-and-scale-reworking-platforms/.

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Government Bonds to Reflect Ecological Footprint

The Swiss investment firm Pictet Asset Management is gaining traction with a new type of bond fund. It rates countries based on their ability to provide a high quality of life at a minimal ecological cost.

Pictet is the first bank worldwide to join the Global Footprint Network, a move that strengthens GFN’s strategic vision of their Pathways to Scale, as I reported earlier this year in an interview with its founder, Mathis Wackernagel.

Through the partnership, Pictet aims to benefit from GFN’s easy-to-use metrics and their endorsement by both government bodies and environmental organisations such as the WWF.

The countries that receive the highest bond ratings are those which, according to the Pictet Sustainability Expert, Christoph Butz, are able to create “the highest standard of living per unit of nature.”

Pictet’s rating system is based on a ratio of resource consumption – as measured by the Ecological Footprint — to standard of living as measured by United Nation’s Human Development Index, a measure that compares countries on its citizens’ achievement of long lives, literacy, income and other factors.

While traditional bonds tend to flow investment to countries whose citizens have the highest incomes and place the greatest per-capita pressure on global resources, this fund directs capital to those countries that are developing along a sustainable path, Butz says.

He adds that the new sustainable bond rating is not just for a few green outsiders but is already fully implemented in client portfolios, for instance for Geneva-based Ethos, an investment foundation that regroups over eighty small and large Swiss pension funds. Pictet also intends to incorporate footprint data into their country-level research, further opening up the pathways to scale of ecological footprint metrics.

The address for this blog entry is: http://www.volans.com/2009/07/government-bonds-to-reflect-ecological-footprint/.

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New Partnership to Scale Energy Access in Asia

The Asian Development Bank (ADB) has launched an Energy for All Partnership that aims to provide access to modern (renewable) energy to an additional 100 million people in the Asia-Pacific region by 2015.

While the technology exists, the Pathways to Scale work we’ve been conducting with solar entrepreneurs shows that two of the biggest barriers to scaling up access to renewable energy in rural areas are the lack of finance and of distribution networks. The Energy for All Partnership will support an initial phase of six working groups – on domestic biogas, solar lanterns, liquid petroleum gas (LPG), financing for energy services, energy enterprise development, and the Pacific region – that will design and implement programs in high-impact areas such as increasing microfinance lending for energy investments, or replicating business models for private sector service delivery.

This investment portfolio looks promising. Christine Eibs-Singer, CEO of E+Co and co-chair of partnership’s steering committee, emphasized the need for increasing collaboration between existing efforts in order to yield a greater impact. “Many organizations, from the multilateral to the local, are helping bring energy access to vulnerable communities,” she said, and framed the work of this donor-led partnership as leveraging the work of partner organizations for greater impact and wider benefits.

The address for this blog entry is: http://www.volans.com/2009/06/new-partnership-to-scale-energy-access-in-asia/.

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Philanthropic Foundations as Catalysts of Scale

Next Wednesday (June 24th) I will be facilitating a workshop designed for the AVINA Foundation at Tällberg, Sweden, on the day before the kick-off of the Tällberg Forum. AVINA’s International Bridge Building efforts are demonstrating the effective role that philanthropic foundations can play in building critical mass to scale up the impact of social and environmental entrepreneurs. AVINA is currently helping some of its partners develop initiatives of continental scale and ambition.These include:

• an “Amazon Regional Alliance”, led by Martín von Hildebrand of the Fundacion Gaia Amazonas, which is bringing together neighboring countries and leaders in a joint conservation effort;
• a “Latin American Climate Platform”, which is linking business, policy-makers and environmentalists throughout the region, facilitated by the Quito-based Fundacion Futuro Latinoamericano;
• a continental network of sustainable cities, led by Oded Grajew, the business leader founder of the Instituto Ethos in Brazil, and one of the founders of the World Social Forum.

The session, with 60+ participants, is bringing these and other leaders together with European and global investors, philanthropic foundations and global action networks to spark strategic relationships and explore the collaborative potential to embark in joint initiatives and create ecosystems for change.

At the meeting, Anders Wikjman, Member of the European Parliament, environmental leader and Vice-President of Tällberg Foundation, will infuse participants with possibilities for creating global cooperation partnerships; and Simon Lyster, Executive Director of Leadership for the Environment and Development (LEAD) will share LEAD’s experience and results in mobilizing global-local networks.

At this year’s Tällberg Forum we are organizing seven other workshops on pathways to scale in partnership with Tällberg’s ‘Rework’ initiative, which I’ll report on separately.

The address for this blog entry is: http://www.volans.com/2009/06/the-role-of-foundations-in-catalyzing-scale/.

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Steroids revised: The economic stimulus package for renewables

A central concern to our work on Pathways to Scale is the extent to which governments are supporting the scaling up of renewable energy solutions, especially as they roll out Economic Stimulus Packages to deal with the economic downturn.

On June 17th you can join a webinar co-hosted by the American Council on Renewable Energy (ACORE), which will provide a solid base of information and stock-taking on how the US economic stimulus package provides opportunities to scale up renewable energy solutions. The US Administration forecasts 70% of stimulus funding will be spent by June 2010.

The address for this blog entry is: http://www.volans.com/2009/06/steroids-revised-the-economic-stimulus-package-for-renewables/.

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Simon Reddy tells Volans about C40’s pathways to scale

Simon Reddy, Executive Director of C40: Cities and Climate Change tells us about the ambition of this global network of city mayors –which represent some of the world’s largest cities– to reduce greenhouse gas emissions and influence global climate politics. 

“We are doing political advocacy work, and looking to get a critical mass of C40 mayors at the COP-15 in Copenhagen. The Mayor of Copenhagen will be hosting an event for cities where a number of mayors will be arguing for national governments to engage and support them in better ways. Some mayors have good relationships with their national governments and we can use that to our advantage as well.” Read more >>

See other interviews in our series Conversations on Scale

The address for this blog entry is: http://www.volans.com/2009/04/c40/.

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Interview: Nancy Kete of EMBARQ tells Volans about her ambitions to solve transport problems in cities

In conversation with Volans, Nancy Kete, Director of EMBARQ - the WRI Center for Sustainable Transport - brilliantly describes some of the lessons she has learned on tackling complex transport problems in the world’s largest cities and her ambitions for EMBARQ’s future.

Click here to read the full interview in our series Conversations on Scale.

A few weeks back, Nancy Kete joined Josh Steinmann of Better Place, Peter Head of Arup and Ion Yadigaroglu of Capricorn Investment Group as panelists at the ‘Evergreen’ session that Volans organized at the World Skoll Forum 2009 on scaling up sustainable transport policies. To many participants, the session offered breakthrough insights on new ways of thinking about scale - click here for the highlights.

Read EMBARQ’s commentary of the The Phoenix Economy.

The address for this blog entry is: http://www.volans.com/2009/04/interview-nancy-kete-of-embarq-tells-volans-about-her-ambitions-to-solve-transport-problems-in-cities/.

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Electrifying: Volans runs ‘Evergreen’ session at 2009 Skoll World Forum

The address for this blog entry is: http://www.volans.com/2009/04/electrifying/.

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Scaling solar energy in Tanzania

There is no scarcity of sun. But the sheer scale of the challenge to create solar energy solutions in Tanzania is daunting. Will energy entrepreneurs ever succeed? John Keane, SolarAid’s director of programmes in Dar es Salaam, is setting up a micro-franchising model to help poor people start small businesses that sell solar power products, but he is quick to point out the need to think strategically about their next steps: ‘scaling up this model will require a different type of infrastructure where we can leverage other existing distribution networks.’

It is difficult to create new businesses where the market doesn’t exist, and this is SolarAid’s challenge. Building a market infrastructure will require the coordinated action of investors, skills-building programs, and government agencies. Enabling this connectivity is the goal of the Rework the World initiative, a global partnership between the Tällberg Foundation and Youth Employment Systems (YES Inc.), which the Volans’ Pathways to Scale program is supporting.

On May 7th 2009, we are convening a workshop in Dar es Salaam in partnership with the Entrepreneurship Center at the University of Dar es Salaam’s Business School. The session ‘Reworking Energy’ will bring together SolarAid with other entrepreneurial initiatives, youth networks, business and investors, to catalyze some of the partnerships that are needed to scale.

The Rural Energy Foundation will be there. They are another market pioneer in Tanzania, which is helping retailers across the country market solar products by creating the much needed ‘industry information’ about products and suppliers. Godwin Msigwa, its managing director, will be coming to the session in May with proposals of how to scale up their work beyond the 50 retailers with whom they currently work.

TaTEDO, the Tanzanian Traditional Energy Development Organization, is another key player in this ecosystem. ‘Energy policy in Tanzania is set at the national level’ says Oscar Lema, its director for entrepreneurship and finance, told me. Top-down approaches to energy planning don’t work well to build local capacity and grassroots innovation. ‘We need to think about providing energy through enterprise’, he adds. ‘This requires a coordination of policies, technology options, finance, business skills, as well as both community and enterprise development.’ Working in 27 Districts across 10 Regions, TaTEDO is advancing district-level energy frameworks by creating small working groups that bring together government, community-based organizations, skill programmes, finance providers, and rural entrepreneurs. TaTEDO’s model is critical to scale the policy impact of entrepreneurs.

In the village of Vingunguti, a group of young people that have been trained by TaTEDO on how to build clean stoves have formed an enterprise that designs and produces more efficient coal stoves, the primary form of cooking in the country. Against all odds, they are now producing 15.000 stoves a month and employing 40 young artisans.

This is possible because TaTEDO has brought finance providers into the equation. Their collaboration with Savings and Credit Cooperative Societies (SACCOS) and actors implementing the Village Community Banks (VICOBA) have been first explorative steps towards what Oscar Lema calls ‘building local level institutional structures’ for scaling up energy access in rural areas. There is much work to be done to strengthen the conditions for local financial services for the poor, where initiatives such as the Financial Sector Deepening Trust (FSDT) are playing a key role. Moving to more robust financial services for the poor is seen as an essential blocks on which to build new energy alternatives.

The address for this blog entry is: http://www.volans.com/2009/03/scaling-energy-markets-in-tanzania/.

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The Coming Age of Lithium-Politics

The future ‘zero-carbon economy’ will not be free of the geopolitics of natural resources that have dominated the 20^th Century.

As carmakers, governments, and entrepreneurs around the world accelerate their bets on electric cars and infrastructures, a recent article in the New York Times reminds us that half of the world’s lithium reserves, the mineral required to manufacture the car batteries, are in Bolivia –a country that may not be as welcoming as global extractive industries would like.

“We know that Bolivia can become the Saudi Arabia of lithium,” said Francisco Quisbert, 64, the leader of Frutcas, a group of salt gatherers and quinoa farmers on the edge of Salar de Uyuni, the world’s largest salt flat. “We are poor, but we are not stupid peasants. The lithium may be Bolivia’s, but it is also our property.”

But peasant communities, who have for centuries relied on small-scale salt trading and are pushing for a share of the profits, could find themselves out-maneuvered by the central Government’s effort to quickly put in place the industrial infrastructures to exploit lithium on a large-scale.

The 20^th Century has taught us about the so-called ‘resource curse’. From Venezuela to Russia, and Saudi Arabia to Nigeria, the discovery of oil has fueled corruption and inequality, reduced democracy and freedom, and fueled military interventions around the world.

Thomas Friedman talks about the First Law of Petropolitics: The price of oil and the price of freedom always move in opposite directions in oil-rich developing countries. He defines a coming Energy-Climate Era as one where ‘issues related to energy, its price, availability and impact on the world and the climate are going to really shape more politics than any factors as we move deeper into the 21st century.’

Lithium will soon begin to dominate the markets and politics of the 21^st Century through new global supply chains and trade agreements between resource providers and battery manufacturers, such as China.

In this new age of Lithium-Politics, will new winners such as Bolivia follow the example of Russia, Venezuela and Nigeria, or will an imminent renewable energy revolution also bring distributed benefits and more transparent extractive industries? The way Bolivia decides to structure its policy, extraction and global trade of lithium will offer many clues about that future.

(Photo Credits: The New York Times)

The address for this blog entry is: http://www.volans.com/2009/02/the-coming-age-of-lithium-politics/.

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Finance 2.0: The New Infrastructures

The social networking tools of the Web 2.0 meet the banking crisis. Enter a new generation of Internet-based, peer-to-peer finance mechanisms that connect people who want to borrow money with those who want to lend it. Some of these innovations were presented at NESTA’s event ‘WeBank: Can people replace institutions?’

One example is Zopa. It is the world’s first online social finance company. No middlemen, less overheads, better rates for lenders and borrowers, a sense of transactions between ‘real people’, and the possibility of creating trust and shared interests between lenders and borrowers, are among the disruptive benefits that threaten the banking industry.

In 2008, Zopa was voted ‘Most Threatening Non-Bank Competitor‘ by Retail Banker International, a global trade publication that tracks and analyzes the issues facing the global retail financial services industry.

A similar trend as the one discussed at NESTA is also taking shape that is central to the work of Volans. These are the financial platforms emerging to fix a market failure: providing access to poor people that have no place in the financial system, and are therefore likely to remain poor.

Margaret Nanono from Uganda (pictured below) is a borrower in MyC4. She is currently seeking a loan of 750 Euros at a rate of 13% p.a. to be paid back in 9 months. She has a small enterprise that sells fabric. In 2007, she acquired a loan of 1,000 Euros through MyC4, which she used to buy more fabric of various designs and colours. The loan helped her increase her sales, which in turn led to an increase in her monthly net income to 90 Euros.

At the MyC4 platform, so far 12,916 people from 83 countries have invested over 6 million Euros in 3,745 businesses in 7 African countries. Another prominent initiative is Kiva, the world’s first person-to-person micro-lending website, which is empowering individuals to lend directly to small entrepreneurs in the developing world with the goal of alleviating poverty. But these models not only matter to small entrepreneurs…

Volans is working with SolarAid in exploring the Pathways to Scale of its impact. SolarAid promotes small entrepreneurs to set up small solar businesses in countries such as Tanzania and Malawi, providing the basic materials for them to manufacture products based on Photovoltaic solar cells, such as mobile phone chargers and lanterns, to be sold in the villages where they live.

SolarAid envisions a future where millions of people in Africa - who live at the so-called ‘base of the economic pyramid’ – can become not only consumers, but also producers of renewable energy and green jobs. The success of SolarAid implies the creation of an entire market underpinning a greener economy. The barriers to realizing this vision are typical of ‘nascent markets’: a lack of working capital and the inability of the mainstream financial system to respond to opportunities outside its radar. Volans is working to help connect organizations such as SolarAid with peer-to-peer finance mechanisms, based on their mutual interest in seeing those markets grow and develop.

The address for this blog entry is: http://www.volans.com/2009/01/finance-20/.

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Opening Maps and Rhizomes

As we work to develop the ‘Pathways to Scale’ framework to help social innovators mainstream their ideas and business models, we are wide open to sources of new ideas and ways of looking at the world. Indeed, being ‘open’ has triggered a peculiar chain of events.

We are developing a 5-stage model that goes by the acronym ‘OPENS‘. with the goal of opening doors, possibilities, and new markets to innovators seeking to solve social and environmental problems. It was therefore intriguing to come by an exhibition of contemporary Latin American photography called ‘Opening Maps’ (Mapas Abiertos).

The exhibition is an authentic journey through Latin American identity, its political and social struggles seen through the subjectivity of the artists and their cameras (picture below, credit: Tatiana Parcero). The intensity of the themes evoked Eduardo Galeano’s classic book ‘The Open Veins of Latin America‘, which describes five centuries of Latin America’s exploitation; a history that forms the basis of today’s political, social and economic injustice.

One of our central concerns is the process by which innovators influence incumbents, who usually have little incentives to address the market failures in the status quo. So these parallels with the opening of routes, maps, and veins felt therefore part of a larger, single narrative.

This single narrative around the ‘opening’ social transformation seems to move freely across organizations, regions, and social classes. It suggests a connectivity of political projects, led by (apparently) disconnected groups of individuals — leaders, artists, thinkers, managers, and the ordinary people that attend exhibitions, read manifestos, and join revolutions.

The work of modern philosophers Charles Deleuze and Félix Guattari is useful to understand this phenomenon. In their book ‘A Thousand Plateaus: Capitalism and Schizophrenia‘ they have borrowed the botanical concept of “Rhizomes” to refer to the way knowledge (including ethics) spreads in society.

A rhizome is a root-like, subterranean plant stem. It is commonly horizontal in its position, and can be thought of as the network-like roots of grass, which shoot and spread sideways. Deleuze and Guattari similarly referred to “rhizomatic networks” as narratives expanding virally throughout society’s disciplines, semiotics, power structures and bodies of knowledge.

The rhizome metaphor is a powerful one, especially for those working to improve the connectivity between actors in order to accelerate social change. The work ahead, in the words of Deleuze and Guattari, should be focused on establishing “connections between semiotic chains, organizations of power, and circumstances relative to the arts, sciences and social struggles.” Spread the word.

The address for this blog entry is: http://www.volans.com/2008/09/opening-maps-and-rhizomes/.

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