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Hazel Henderson
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Hazel Henderson is author of Ethical Markets: Growing The Green Economy (2007) and co-creator with the Calvert Group of the Calvert-Henderson Quality of Life Indicators regularly updated at www.Calvert-Henderson.com (http://www.Calvert-Henderson.com). She can be reached at www.EthicalMarkets.com... More
My company:
Ethical Markets Media
My blog:
EthicalMarkets.com
My book:
Ethical Markets: Growing the Green Economy
  • Green Transition Scoreboard Tops $4.1 Trillion!

    The year 2012 was an inflection point for the green transition worldwide, with $4.1 trillion of private investments tracked in this report. Technology and innovation such as in electricity generation and transport began forcing structural changes and rethinking of business models, urban design and development toward integrated systemic approaches - still unreported in mainstream media. Global policy makers, businesses and civic society began realizing that environmental, social and human capital must be assessed and integrated into financial markets in order to achieve equitable and sustainable forms of development. The output of Rio+20 was an unprecedented reintegration of human knowledge resulting in new global shared goals and paths transitioning 191 member countries toward low-carbon, cleaner, greener, information-richer economies. Awareness grew of localization as a key principle for redesigning industrial methods, agriculture, infrastructure, sustainable communities as developed by our partner company, Biomimicry 3.8 and our joint Principles of Ethical Biomimicry Finance™.

    As the green and biomimicry innovation revolution gathers speed, the year 2013 promises further shifts away from the fossil-fueled Industrial Era as illuminated by our Green Transition Scoreboard® (NYSE:GTS) which tracks private investments growing the green economy worldwide since 2007, totaling in Q4 of 2012 this $4.1 trillion. The Green Transition Scoreboard® tracks five sectors: Renewable Energy; Green Construction, Energy Efficiency; Corporate R&D and Cleantech, representing broad areas of investment in green technologies, many overlapping. Each covers an area of substantial capital investment in technologies which Hazel Henderson's years of research as a science advisor and which the Ethical Markets Advisory Board expertise indicate have contributed and are contributing to a sustainable future.

    INVESTMENTS IN GREEN TRANSITION

    2007-2012

    Sector

    US $

    Renewable Energy

    $2,281,347,792,080

    Green Construction

    $837,620,000,000

    Energy Efficiency

    $526,921,247,320

    Corporate R&D

    $254,800,000,000

    Cleantech

    $224,601,088,873

    TOTAL

    $4,125,290,128,273

    While some governments and institutional investors are increasing their focus on growing greener economies, they are not included in this report. Our recommendations that investing at least 10% of institutional portfolios directly in companies driving the global Green Transition, provide a way to update strategic asset allocation models both as opportunities and as risk mitigation. Such shifts in investments will solidify the Green Transition worldwide. Many studies, computer models and reports confirm our view of investing $1 trillion annually until 2020 in material and energy efficiencies, wind, solar, geothermal and other renewable energy, sustainable land-use and forestry, smart infrastructure, transport, building and urban re-design.

    This transition strategy is now on track (see our barometer) and recognized in the 2012 report by Mercer which suggested 40% of portfolios should be in Green Transition sectors. This consensus validates models indicating that investing $1 trillion annually until 2020 can scale these innovations and reduce their costs. This updated Green Transaction Scoreboard® 2013 report finding of over $4.1 trillion puts investors and countries growing green sectors globally on track to reach $10 trillion in investments by 2020.

    The March 2013 GTS report demonstrates that many other private investors are following our recommended avenue for institutional investors to shift to green sectors. Fossilized sectors are becoming increasingly stranded assets as their perverse subsidies are targeted and as low-carbon regulations are implemented and oil, coal and gas reserves become harder to exploit. Green technologies and systems investments are simply the next evolution of human societies as we learn more from the earth systems sciences and the satellites tracking the conditions on planet Earth.

    Our definition of 'green' is quite strict, omitting areas such as nuclear, clean coal, carbon capture & sequestration, and biofuels from feedstock other than sea-grown algae. We are also looking closely at nanotech, genetic engineering, artificial life-forms and 3D printing, determining their green contribution on a case by case basis. For example, genetically modified microbes to produce fuels - dubious propositions for long-term sustainability. Research indicates that increasing production of crops, even inedible grasses, still require water and land better suited for range or agriculture food production.

    GTS data sources include the highly respected Cleantech, Bloomberg, Yahoo Finance, Reuters and many UN and other international studies, NASA and individual company reports. Companies, organizations and the sources of financial data included in the GTS are screened by rigorous social, environment and ethical auditing standards. They can be found in indexes such as Calvert, Domini and Pax World, the PowerShares Cleantech Portfolio, Dow Jones Sustainability Indexes, London's FTSE4GOOD, NASDAQ OMX Green Economy Global Benchmark Index, ASPI Eurozone, the many newsletters from around the world we post daily at www.ethicalmarkets.com and others.

    Renewable Energy - Important to this rapidly expanding sector is the growth of renewable energy in developing countries.

    Green Construction - This is the most conservatively under-reported sector of this report. We are only counting green construction materials, not including labor.

    Energy Efficiency - Investments include conservation efforts and initiatives and products focused on lowering energy needs or using less energy than a comparable product, as companies now recognize efficiency investments' rapid payback periods.

    Green R&D - Significant company investments show sustainability is integrated into its core strategy, serving as a strong indicator for investors. This data helps identify innovative companies ahead of the curve in responding to heightening environmental risks and regulations.

    Cleantech - As Cleantech grows, energy storage increases in importance, at the level of power plants and grid electricity and at retail and local levels with improvements in batteries, fuel cells, flywheels, ultra capacitors, flow batteries, compressed air as well as metering of use at all levels.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: I have many SRI investments mentioned in the report to which I refer, with full disclosure in the report.

    Mar 05 4:26 PM | Link | Comment!
  • Review Of THE FUTURE By Al Gore

    THE FUTURE: SIX DRIVERS OF GLOBAL CHANGE by Al Gore, Random House, NY, 2013

    Review by Hazel Henderson © 2013

    Author Al Gore, former US Vice President turned venture capitalist and media executive, would have become US President but for some 500 still contested votes in Florida and the US Supreme Court's ruling that halted the recount. Reading Gore's latest book The Future, I marvel at how history might have changed if Al Gore had become the 43rd President of the United States instead of George W. Bush. Gore's cool intellectualism and deep scholarship would have been a huge shift and a different fit with the declining educational levels and anti-science fundamentalism of some 40% of the US population.

    In The Future, Gore lays out his six drivers of global change in chapters with compelling logic and exhaustive research: 1) the interconnected global web of corporations, finance and markets he calls "Earth, Inc." now dominating politics even in democracies; 2) the emergence of a "Global Mind" of linked humanity via the Internet, cell phones, social media, Wikileaks, NGOs, alternative political movements, personal publishing, video, blogging and micro-business models now challenging incumbent industries with rapid disintermediation of banking, publishing, healthcare, academia and 20th century industrial sectors; 3) "Power in the Balance" - now shifting from Europe and North America to Asia, Latin America and soon Africa, the rise of China, India, Indonesia, Brazil and many emerging countries in the South, evident in the G-20, the UN General Assembly and all international agencies and forums.

    Driver number 4 is "Outgrowth" as human populations soar past our 7.5 billion toward 9 or 10 billion forecasted for 2050 with shrinking numbers in Europe, Japan, Russia, North America and other mature economies and with most of the increases in the South, particularly Africa. Gore sees human population growth, using unsustainable faulty economic models of resource extraction, still based on externalizing social and environmental costs ("Time to Internalize Those 'Externalities'"). This leads to faulty prices, mal-investment and mis-pricing by asset managers of most investments, bonds, securities and insurance ("Grossly Distorted Picture: GDP Still Misleading"). Gore discusses the twin dilemmas of "robo-sourcing" and outsourcing throughout the book, which lead to jobless economic growth, sharpening inequality and a crisis of aggregate demand which is finally breaking down current economic models, which I discussed in Building A Win-Win World (1996, ebook 2008). These dilemmas are invalidating the conventional "Washington Consensus" economic growth recipes, now being steered over the cliff by GDP and other panglossian metrics. All this blinds decision makers to political solutions for huge percentages of unemployed youths, spiking food prices, unrepayable consumer and student debt - offering little but more austerity for angry citizens, fueling more extremist politics, uprisings and revolts ("The Economics of Curbing Speculation in Food, Water and Vital Resources").

    Driver number 5 is described in the most informative chapter, "the Reinvention of Life and Death," covering the stunning advances in genetic and biological research, neuroscience, mapping of proteins and how the networks of neurons operate in the human brain. Gore's information is enriched by his role as a partner of famed US venture capital firm Kleiner Perkins Caulfield & Byers and his partnership with former Goldman Sachs executive David Blood in London, Generation Investment Management. Gore's associates and friends, Craig Venter, Danny Hillis, Mitch Kapor, Ray Kurzweil, as well as his top clearances in government research and think tanks and international financial networks give him his unmatched access to the cutting edge information he shares in this chapter. Gore parses this latest intelligence and how it is re-focusing medical approaches to cancer, diabetes, heart disease and ageing in the fields of epigenetics, epidemiology and correctly viewing our human bodies as "biomes" with 90% of our cells and DNA within us as bacteria whose microbial activities actually control our immune systems, digestion and metabolism. Gore covers the explosion of research and development of artificial life forms and the outlook for genetically modified organisms (GMOs) in our food and fiber supplies and many of their unintended consequences. As in other chapters, Gore highlights how these technological advances - as well as those in computing and "big data," the cloud, 3D printing - are leading through lack of government oversight into dangerous territory and loss of privacy and control. As I have also written from my experience advising the US Office of Technology Assessment, the National Science Foundation and the National Academy of Engineering, the "tortoise" of public understanding of science and its implications for society always lags the speedier "hare" of private sector, market-driven technologies.

    Gore's 6th driver in "The Edge" describes the tipping points and breakdowns now driving us to breakthroughs in all these scientific and technological fields as well as the crucial shifts to low-carbon economies based on efficiency and renewable energy, new materials and resource reuse. Updating our understanding of climate change, Gore describes new research into Hadley cells, Frennel and polar cells, vertical wind vortices that redistribute the sun's heat which reaches the planet daily - but is increasingly trapped in the lower atmosphere by CO2 molecules. The climate is essentially a gigantic engine for redistributing the sun's incoming heat evenly through ocean currents, rain, ice, wind, jet streams, fostering capture by species in our fragile biosphere and by green plants in photosynthesis (providing our human food supply). The new understanding of these Hadley, Frennel and polar cells and how these vortices have shifted away from the equator toward the Earth's poles account for both shifting jet streams as well as super-storms and desertification. The race to understand our planet's dynamics is crucial as well as its relationship to the sun, our "mother star," whose daily free photon shower on just one square mile for one hour could supply all our human energy needs for one year. Gore sees the rapid scaling of wind, solar, efficiency, biomass, geothermal and other renewables as accelerating and the most promising route out of the fossil-fueled climate crisis. He sees the current euphoria over shale oil and gas as short-lived, since there is little net energy output and it will be limited by its huge demand for water and its toxic methods. Gore sees the main blockages as the corruption of democracies with money mostly from incumbent industries, special interests and science deniers all fighting the disruptive technologies of the future. We at Ethical Markets agree, which is why we track private investments in green sectors worldwide in our Green Transition Scoreboard®.

    Gore himself avoids some contentious issues. In his accurate description of jobless economic growth due to automation and "robo-sourcing," he correctly cites needed job-creation in public goods: infrastructure, education investments. Yet Gore does not describe the many pragmatic solutions to maintaining sufficient levels of private aggregate demand by those in need of basics and consumer purchasing power: contingent cash transfers (CCT) now lifting poor families into middle-class status; better health and education in Mexico, Brazil and other countries; the rise of employee-owned companies, employee stock ownership plans (ESOPs) and cooperatives which employ more people globally than all conventional companies as documented in 2012-the UN Year of Cooperatives (www.un.org). Guaranteeing minimum incomes was experimented in the USA under President Richard Nixon in the 1970s but foundered on the Puritan ethic "no workee-no eatee" reinforced by market fundamentalism. Pioneer futurist Theodore J. Gordon also examined automation-related structural employment in his 1964 book The Future(St. Martins Press, NY), which examined the link between work hours, leisure and incomes. Gordon's successful firm, The Futures Group, is now part of Deloitte & Touche. This puzzle of automation, structural unemployment and static aggregate demand which had to be artificially stimulated by advertising - now at $500 billion annually - was down played by the economics profession and their "productivity" models and theory-induced blindness. These issues are now clearly on the table in Europe and the USA.

    Gore glosses over this fundamental dilemma of conventional capitalism while calling for reform of markets and their GDP-driven metrics - as I have for decades. He also understands the need to curb high-frequency trading (HFT), but offers only the pathetic remedy of Bank of Sweden prize-winner economist Joseph Stiglitz who lamely suggests making traders hold stock positions for at least one second! Gore ignores all the countries now instituting or examining financial transaction taxes ("Financial Transaction Taxes: the Commonsense Approach"), now endorsed by the European Union at 0.1% of all trades (but exempting those by pension funds). The French public employees' pension fund has the best approach: as a cancellation fee, since most HFT orders are also cancelled within milliseconds.

    For full disclosure, I have known Al Gore since the 1970s when I was on the Technology Assessment Advisory Council to Congress and the National Science Foundation's Research Applied to National Needs (RANN), and we were both involved in the Congressional Institute for the Future which he mentions, as well as the World Future Society. At a conference in Puerto Rico chaired by Nobelist former President of Costa Rica Oscar Arias Sanchez, Al Gore asked me to teach him about socially responsible investing. I agreed and also urged him to get into media, while I was showing my pilot of our Ethical Markets TV Series (carried on PBS stations in the USA in 2005-2006 and now at www.ethicalmarkets.tv and for colleges at www.films.com).

    Apart from my minor criticisms and my hopes that Gore will move more boldly to make needed reforms in venture capital and investment banking, I agree with most of his conclusions in his The Future. I lament that Al Gore did not become our US 43rd President as well as eight wasted years under President George W. Bush, both of millions of lives in two unnecessary wars and trillions of dollars of debt now burdening our economy.

    I hope Gore's The Future becomes a best-seller and can help break through the appalling corruption in Washington and Wall Street. So far, his interviews in US media have focused on his and partner Joel Hyatt's sale of their independent Current TV channel to Al Jazeera for $500 million. This caused outrage among mainstream media and pundits, as well as some ideological environmentalists who focus only on Al Jazeera's Qatar owners because of their fossil-fueled economy. This misses the much larger point: Al Jazeera is a globally respected media network with wide-angled news coverage worldwide - which might shake up US media monopolies and improve their ever-diminishing news coverage. As Gore points out, Al Jazeera devotes much coverage to climate change issues - a virtual taboo in US media only recently breaking open. Al Gore's influence in global finance and politics will continue to grow along with his stature as a statesman/futurist. Thus, for these reasons as well as its brilliant analysis, market players and business leaders will need to read The Future.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Feb 08 10:49 AM | Link | Comment!
  • Review Of Making Things Work And Makers: The New Industrial Revolution

    Making Things Work: Solving Complex Problems In A Complex World by Yaneer Bar-Yam, NECSI Knowledge Press, Cambridge, MA 2004

    Makers: The New Industrial Revolution by Chris Anderson, Crown Business, NY, 2012

    Review by Hazel Henderson

    These two books, Making Things Work and Makers, study pragmatic issues of efficient organization and production at two levels: 1) re-tooling our paradigms, theories and strategies for organizations and human societies as they evolve and 2) the actual fabrication of products and materials using digital methods of 3D printing and fabrication now revolutionizing our mass-production models. These are fostering a revival of artisanal, small-scale methods and distributed customized manufactures by a new generation of crafts, makers and entrepreneurs.

    The two authors of these very complementary books are superstars in their respective fields: Professor Yaneer Bar-Yam, a veteran complexity scientist and founder of the New England Complex Systems Institute (NECSI), and Chris Anderson, doyen of the digerati, author of The Long Tail, which renamed risk, and editor of WIRED Magazine. Braiding their two worldviews together yields a breath-taking view of our rapidly accelerating processes of globalization and technologies - reminiscent of Alvin and Heidi Toffler's Future Shock, their perennial best-seller from 1970.

    In Making Things Work, Yaneer Bar-Yam demonstrates the power of systems thinking and complexity science and how it can be applied to problems as diverse as restructuring US health systems, education, ethnic violence, terrorism, global conflicts and new approaches in aid to developing countries. I highly recommend Part I which is a masterful yet readable primer on complexity science and its key principles, explained through analogies to ecology, biology, the human body-mind system and evolutionary concepts beyond the simplistic "selfish gene" of Richard Dawkins. I wrote in Ethical Markets: Growing the Green Economy (2007) of the hijacking of Charles Darwin by Victorian elites in Britain and their focus on the "survival of the fittest" as justification for their privilege - a phrase actually coined not by Darwin but by Herbert Spencer in The Economist. Bar-Yam explains the error of these early "social Darwinists" as focusing on competition - whereas all complex systems, including human societies and organizations, keep competition in balance with cooperation in their many functional levels.

    Recently, Bar-Yam has developed a complexity model that demonstrates the links between rising food prices, rioting among deprived populations, market speculation in commodity futures and government subsidies to corn-based ethanol. While obvious to a trained policy wonk like me, leading to my views that these perverse subsidies should end and my call for pension funds to "refrain" from such commodity speculation - Professor Bar-Yam has proved these links mathematically in his research (NECSI). He is now applying complexity science models to the European sovereign bond market - to show how these bonds can be mispriced (see also my CSRWire "Grossly Distorted Picture"), making a similar argument using other evidence. I showed how bond markets focusing on GDP growth in evaluating sovereign bonds in Ireland, Portugal, Greece, Spain and Italy fail to account for the value of their productive ecosystems efficient modern infrastructure and well-educated populations. These assets are all set at zero and unaccounted in GDP. I highly recommend Making Things Work for all financial analysts, traders and asset managers, as well as policy analysts and business managers.

    Makers is a page-turner by Chris Anderson, a brilliant observer and a talented story-teller. In a deeply personal way, Anderson lures us into his own fascination with the Maker movement. He takes us to the "makers's faires," incubators, tech shops to meet the millions of tinkerers, inventors, hackers and experimenters now creating this new industrial revolution of 3D printing and remote fabrication of thousands of products worldwide. The reader is led into this unfamiliar new underground world, soon to explode around us into the mainstream and how its new entrepreneurs and their facilities are out-competing mass-producers with batch-processing for niche markets.

    Most of these "fab" enterprises and their businesses are conducted online and their products marketed via the web. This desktop manufacturing is a new kind of high-tech "cottage industry" built on 1) digital DIY, 2) a culture of sharing and collaboration and 3) common standards for designs and open-source, creative commons distribution. This upends the competitive industrial model, allows copying and use by all comers, while building their unique brands as names, logos and icons.

    Anderson sees the Maker movement as the best antidote to today's jobless economic growth which began decades ago with the advance of computers and automation, as I describe in Building a Win-Win World (1996). Anderson takes us on a global tour of some of the successful companies run by these self-employing Makers, including his own company, 3D Robotics, which fabricates tiny insect-size drones. These new sectors often are self-financed through now familiar crowdfunding methods such as Kickstarter - outside traditional venture capital reach - as we cover on our crowdfunding page at www.ethicalmarkets.com. Indeed, I found many commonalities in our own company Ethical Markets Media (USA and Brazil) and our partner Biomimicry 3.8 - both global internet-based companies whose products are intellectual and educational. These are licensed, marketed and distributed electronically by lean operations and many far-flung collaborators - often enthusiastic volunteers. Makers is a wonderful, enjoyable read - but also very valuable to all those looking for "the next big thing."

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Nov 20 4:21 PM | Link | Comment!
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