Praying Mantis

suc·cess

noun

1. the favorable or prosperous termination of attempts or endeavors; the accomplishment of one's goals.
2. the attainment of wealth, position, honors, or the like.
3.  a performance or achievement that is marked by success, as by the attainment of honor.
4. a person or thing that has had success, as measured by attainment of goals, wealth, etc.

growth

noun 

1. the act or process, or a manner of growing; development; gradual increase.
2. size or stage of development: It hasn't yet reached its full growth.
3. completed development
4. development from a simpler to a more complex stage: the growth of ritual forms.
5. development from another but related form or stage: the growth of the nation state.

Historically, I always thought that my happiness was tied to my success in life.  I thought that by nailing a good job right after college, climbing the corporate ladder, buying a house, and seeing my 401K balance steadily increase would make me happy.   Sure those things add something to my life but there’s more to happiness than just success.

Similarly, there’s more to success for businesses than growth.   Can a business truly be considered successful if it’s making a profit but has miserable employees in unhealthy working conditions or paying them anything but a living wage?  Can it be considered successful by making a profit while spewing toxins into the environment?  A lot of people would say yes – a business can be successful in these circumstances.  All too often our society marks a business as successful as long as it’s increasing shareholder value. 

Growth in earnings; growth in populations served; and growth in the number of brick and mortar stores are all viewed as success.  If a business has growth, it’s got to be successful right? At least that’s what a majority of Wall Street thinks.   I fundamentally disagree with this.  Business is about more than just the numbers.   It’s also about people and the planet.  Business cannot exist without people and the planet.  So why do we tie the importance of success and growth together?  Infinite resources are not at the disposal of business.  It’s hard to find examples of profit being maximized while the well-being of employees and decreased reliance on the planet are also being maximized. 

Imagine the following scenario –

A corporation releases its quarterly earnings.  Profits are down 20% from the prior quarter but executive management views this as the most successful quarter yet.  Carbon emissions are down by 15% just in one quarter; employee turnover rates have decreased by almost 50% from the prior year; employee expenses are up 10% due to increases in wages and benefits from the prior quarter; and all facilities are now zero waste facilities. 

In today’s environment the fact that profits are down from the prior quarter would send Wall Street into a panic.  The company’s stock price may plummet and some shareholders may cash out.  Analysts may signal the company may be losing control over its projections and this company may prove to be too risky to invest in.  Why?  Because profit declined and there was no growth.  This is the only thing that MOST press releases will pick up on.  This company was very successful in several areas but that could be overlooked because of the decline in profit. 

What would it look and feel like if today’s market focused more on the triple bottom line?  I myself have a hard time imagining such a thing.  It’s so ingrained in us that growth equals success.  How can declines in values equate to success?  It takes a fundamental shift in valuing everything that’s important to us to see beyond the good in growth.     

What does a donkey and a co-op have in common? Democracy!

Lately I've had a bit of an obsession with cooperatives (aka co-ops).  Mainly this fascination has to do with seamless movement of a group of people moving in step with one another.  So how do co-ops work exactly? Well they’re more than just that place we buy fruits and veggies from.  In fact, they are much more complex then I had initially thought.   

The International Co-operative Alliance defines a co-op as “businesses owned and run by and for their members. Whether the members are the customers, employees or residents they have an equal say in what the business does and a share in the profits.”  What these businesses set out to do is operate based off of a set of shared core values rather than strictly just profit motives.  Any surplus revenues (profits) earned by the co-op are reinvested in the business and/or returned to members based on how much business they conducted with the co-op that year. Many co-ops are obligated to return a portion of their “surplus revenues” to members each year.  Members also share in any losses the organization might incur. 

Co-operatives also create and maintain employment for the communities they serve.  In the United States, 30,000 co-ops provide more than 2 million jobs.  In France, 3.5% of the active working population is employed by a co-op.  Co-operatives also provide large economic benefits to national economies.  For instance, Japan’s agricultural co-operatives produce $90 billion worth of goods and 91% of farmers have membership within those co-ops.  In New Zealand, 3% of GDP is generated by co-ops and co-ops make up 95% of the dairy market. 

As a business based off of a model that emphasizes ethical values and principles and whose goal it is to provide for the needs of its members, co-operatives play a pivotal role in responding to local community needs and objectives.  In fact, the United Nations Conference on Sustainable Development (Rio+20) acknowledged the role of co-operatives in "contributing to social inclusion and poverty reduction, in particular in developing countries.”  Instead of looking at short-term goals of maximizing profits, co-operatives have a long-term objective of maintaining sustainable economic growth, social development and environmental responsibility.

So what other advantages exist with co-operatives?

• Less Taxes!  Cooperatives that are incorporated normally are not taxed on surplus earnings refunded to members.  Instead members of a cooperative are only taxed once on their income from the cooperative and not on both the individual and the cooperative level.

• Funding! There are a variety of government-sponsored grant programs to help cooperatives start. For example, the USDA Rural Development program offers grants to those establishing and operating new and existing rural development cooperatives.

• Economies of scale!  Cooperatives may be able obtain discounts on supplies and other materials and services.  Suppliers are more likely to give better products and services because they are working with a substantial customer base.  This allows members to turn their focus improving products and services.

• Perpetual Existence!   Unlike other business structures, members in a cooperative can routinely join or leave the business without causing it to have to reincorporate.

• Democracy!  The inherit structure of a cooperative ensures that it serves its members' needs.  The "one member-one vote" philosophy is appealing to smaller investors because they have as much say in the organization as does a larger investor.

Co-operatives benefit our society in many ways.  Whether you are part of a co-op or not, I hope you've gained new perspective on this alternative business structure and are eager to take part in new ways. 

How much is that doggy in the window? Woof Woof!

In traditional finance, one uses enterprise value or equity value to price a business.  Think of it as the takeover price.  In a buyout, the purchaser would not only take on the company’s cash but also its debt.  Enterprise value is one of the more conservative valuations because it takes into account the entire balance sheet.  Other valuations focus only on share price or more limited aspects of the financial statements.

Many businesses were allowed to adopt fair value accounting standards in 2006.  The purpose of adopting this standard was to convey to financial statement users a price that could be received between a knowledgeable buy and seller.  What was known as Statement on Financial Accounting Standard 157 (SFAS 157) at the time, allowed for companies to measure assets and liabilities on their balance sheets at “market price.”  Determining a market price can be subjective, and incredibly difficult, when you can't easily observe an asset or liability being actively traded in a market place.  

In trying to understand the current financial crisis, the spotlight has turned to fair value accounting and financial institutions.  Shortly after the Financial Accounting Standards Board (FASB) issued SFAS 157, the problems related to the subprime mortgage market began to surface.  Many began to question whether or not the current distress in financial institutions is related to the new accounting standard.  Did the new standard exacerbate the problems or merely illuminate them?  Many are still debating this six years later. 

In October 2008, then-President George W. Bush signed into law the Emergency Economic Stabilization Act of 2008 (EESA), the so-called bailout bill. Under section 132 of the EESA, Congress gave the SEC the authority to suspend the use of fair value accounting under SFAS 157.  Section 133 requires the SEC to conduct a study of the fair value accounting as stipulated in SFAS 157.  Note that in Section 133, Congress even calls on the SEC to "review the process used by the Financial Accounting Standards Board in developing accounting standards."  This is a much broader mandate than just studying a single accounting standard.

Has the value we placed on numbers outlived its purpose?  Despite the down falls accounting and finance figures may have, we still need them.  They give us a baseline and can provide us with a lot of insight into an entity’s operations.  If you were valuing a business using fair value accounting back in 2008, you may have grossly overestimated (or maybe underestimated) the takeover price of the business.  Hindsight is always 20/20 but what writing was on the wall that we may have turned a blind eye to in order to avoid seeing what we didn't want to see?

What I would caution people to do is to not stop at the numbers.  Go beyond that.  What external factors affect the business?  How is the economy doing?  What is the morale of the workforce?  How quickly is this business able to pivot as this world evolves?  How important is strategic planning to the organization?

What all of these valuations fail to do is take into account the triple bottom line.  Perhaps that’s because it’s not easy to place values on the earth and its people (and perhaps doing so would further damage our world).  In order for us all to be part of the paradigm shirt this world needs, the value of the health of our people and planet must be valued the same, if not more than, as our traditional monetary measurements.  

The birds and the bees of good business

Usually the first thing someone with my background thinks of when the word “capital” is heard is financial resources available to organizations.   One doesn’t typically first think of humane, natural, social and manufactured forms of capital.  Is financial capital all that different from the previous forms of capital?  Let’s break it down…

Merriam-Webster defines capital as “(1): a stock of accumulated goods especially at a specified time and in contrast to income received during a specified period; also: the value of these accumulated goods (2): accumulated goods devoted to the production of other goods (3): accumulated possessions calculated to bring in income.”  

Forum for the Future lays out the “Five Capitals Model – a framework for sustainability.”

1)    Natural Capital – “natural resources and processes needed by organizations to produce their products and deliver their services.”

Businesses can maintain natural capital levels by only use materials that are abundant.  They can avoid waste by reducing, reusing and recycling.  Using renewable resources instead of only fossil fuels reduces carbon footprints and keeps our air and waterways cleaner. 

2)    Human Capital – “incorporates the health, knowledge, skills, intellectual outputs, motivation and capacity for relationships of the individual.”

Some employers exploit or take advantage of their employees.   A happy, healthy employee is a productive employee.  Placing precedence on human rights and human values will pay itself back in dividends.  Mentoring and training employees creates loyalty and promotes sharing of knowledge.  Employee benefits are one of the biggest expenses on a company’s income statement but there are many things that can be done that cost next to nothing to supplement employee recognition programs. 

3)    Social Capital – “any value added to the activities and economic outputs of an organization by human relationships, partnerships and co-operation.”

Businesses should provide supportive working conditions for employees and families.  By supporting the communities that the organization serves can have a positive impact on society.   Ethical and fair treatment of all stakeholders is key to creating valuable and meaningful relationships. 

4)    Manufactured Capital – “material goods and infrastructure owned, leased or controlled by an organization that contribute to production or service provision, but do not become part of its output” 

      Efficient use of manufacture capital gives businesses to innovate and forge ahead as a market leader.  By looking at things such as zero-waste and biomimicry, businesses can create a more sustainable manufacturing process. 

5)    Financial Capital – “assets of an organization that exist in a form of currency that can be owned or traded, including (but not limited to) shares, bonds and banknotes. “

Again, this is probably the first thing most people think of when they hear the term “capital.”  Let’s take this concept a little bit further by thinking about more than just a single bottom line.  What if we placed emphasis on different types of numbers and looked at things such as how wealth is fairly distributed, assigning costs to social and environmental values and understanding how wealth that is created impacts local communities an organization serves. 

This framework was designed to allow organizations to better understand what sustainability looks like for its operations, products and services.   In contrast to our traditional measurements of capital, the goal of the Five Capitals Model tool is to consider the impact of the organization on each of the five capitals in an integrated manner so trade-offs can be avoided. 

With this framework businesses can move to an approach of considering the triple bottom line approach.  This model just doesn't have to be about sustainable businesses.  These concepts are just smart and a better way to do business! 

Cows and Permaculture

Permaculture is a philosophy of working with, rather than against nature; of protracted and thoughtful observation rather than protracted and thoughtless labor; and of looking at plants and animals in all their functions, rather than treat any area as a single product system

 -Bill Mollison

The term Permaculture was coined by Bill Mollison and David Holmgren in the 1970’s and is a hybrid of the words permanent and agriculture.    

Mollison and Holmgren developed three formal guiding ethical principles behind Permaculture.  

·         Care for the earth

·         Care for the people

·         Return of surplus

In David Holmgren's book Permaculture: Principles and Pathways Beyond Sustainability, he went on to detail twel design principles. 

 

1.       Observe and interact – This emphasizes the different perspectives in nature to understand what is going on with the various elements within this system. 

2.       Catch and store energy – Underscores the need to develop a system that collects resources when they are abundant so we can use them later in times of need.

 

Drying bananas in the sun. 

 

3.       Obtain a yield – Think of the proverb “You can’t work on an empty stomach.”  Rewards need to be had from the work that’s being done.

4.       Apply self-regulation and accept feedback – This principal deals with aspects of permaculture that limit or discourage inappropriate actions/behaviors.   Building off of what works is key to planning effectively.   

5.       Use and value renewable resources and services – We need to make the best use of nature to reduce our consumption and dependence on non-renewable resources. 

6.       Produce no waste – By valuing the resources that are available to us, nothing goes to waste. 

 

Cows not only give us dairy but they mow grass and produce manure that is used in composting.

 

7.       Design from patterns to details – This principle tells us taking a step back so we CAN see the forest for the trees.   Patterns can become the backbone of our designs.

8.       Integrate rather than segregate – By putting things in the right places, relationships can develop naturally and support existing systems. 

9.       Use small and slow solutions – Small and slowly developing systems can be easier to maintain than large ones and therefore can make better use of resources and produce sustainable outcomes. 

10.   Use and value diversity – Diversity can reduce vulnerability and takes advantage of the unique nature of our environment. 

A diverse apple orchard contains early and late flowering trees and trees that produce apples for eating and cooking.  If weather damages some trees, others may still be able to produce later on. 

11.   Use edges and value the marginal – Tells us the interaction between things  is where interesting events take place. Important things happen at intersections. 

12.   Creatively use and respond to change – We can have a positive impact on inevitable change by carefully observing and intervening at the right times. 

Why use Permaculture?

Permaculture gardens do many things by not limiting the garden to only one use.  Permaculture gardens provide food, wildlife habitations, an eye-catching appearance, and an atmosphere that can be relaxing.  Permaculture gardens can be self-sustaining and once established, needs little work. 

Some common permaculture techniques include –

• Edible gardens and companion plantings.  Vegetables, herbs, flowers and edible fruits can be grown together and when designed properly, can help to serve as natural ways to control pests.  For example, marigolds are great for deterring mosquitoes, aphids and other insects because of its strong odor.   Planting basil near tomatoes can improve flavors and repel mosquitoes. 

•  Raised beds and vertical techniques.  Raised beds can take up less space and are easily accessible.  They can also help protect your crops from wildlife such as moles and rabbits.  Vertical gardening includes growing plants on trellises or in hanging baskets.  The creativity with vertical gardening is endless.  I grow strawberries vertically in PVC pipes attached to my fending. 

• Lasagna gardening.  Rather than having to till up the soil or dig, you can use lasagna gardening to build a garden beg.  Lasagna gardening staves off weeks and can save a lot of time.  With this method, you layer materials that will decompose right in the bed.  Layering leaves, newspapers, grass clippings, coffee grounds and other materials, creates something like a typical compost pile and the heat from the sun decomposes the material naturally.

By adopting the ethics and applying these principles in our daily life we can make the transition from being dependent consumers to becoming responsible producers. This journey builds skills and resilience at home and in our local communities that will help us prepare for the future.  

Animals love fresh produce too!

Our industrialized food chain has gained a lot of attention over the last several years and locally grown food is gaining more popularity.  The average piece of food travels over 1,500 miles by the time it reaches our plates.  For each dollar we spend at the grocery store, the average farmer only keeps 9 cents of it.  Grocery stores and other middle man get the remaining 91 cents.  Industrialized farms employee on average three full time people for each $1 million in revenue it produces.  On the other hand, local farms employ 13 people per $1 million in generated revenues. 

These are some of the factors that have elevated Community Sourced Agriculture (CSA) programs to new highs.  Consumers are able to meet and get to know the farmers that grow their food and also support local programs which in turn support local economies.

So what exactly is a CSA and what are its benefits?   

A CSA connects you with a local farmer who supplies you with a box of fresh produce on a fixed schedule (i.e. weekly).  Depending upon where you live, a CSA program can last as long as 6 months.  By signing up for a CSA program, you essentially are buying a share of the farmer’s harvest.  There are many benefits to CSAs not only for the farmer but also for the consumer.  Many people have commented that joining CSAs have given them the opportunities to try produce that they may not have typically purchase in a store.  If you love to cook, getting a fresh box of produce can spur creativity in the kitchen.  In fact, some CSAs put on classes or provide recipes in their boxes.

Some CSA members find themselves feeling guilty if they don’t consume their entire box.  A good way to get past this is to donate the excess food to local food banks or even take the excess goods to your local animal shelter.  Horses, guinea pigs and even chickens enjoy some good fruits and vegetables too.  Additionally, many fruits and vegetables are able to be canned or frozen for future consumption (and dehydrated for delicious chewy dog treats). 

A share in a CSA averages about $200 to $600 at the beginning of the growing season.   Although the upside here is that you won’t have to pay again for fresh produce, there is a slight risk that you may be out the money if the farmer is unable to deliver due to unforeseen circumstances (such as damaging weather conditions).  Lots of people feel this investment is worthy as they’re given the opportunity to support local, living economies and know exactly how and where their food is being sourced. 

A new emerging trend in CSAs is also to provide artisan foods or meats in their boxes.  Many farmers themselves make cheese or artisan crafts that they sell in combination with each box.  They also partner with local butchers and other farmers to provide meats for purchase when boxes are picked up (think: one stop shopping). 

 

Why should you join a CSA?

I’ve touched on this a bit earlier but by joining a CSA you’ll be supporting your local economy.   As most CSAs require you pay at the beginning of the season, you’re essentially supporting your farmer by giving him/her the funds needed to successfully navigate through the season.  Farmers are already working with a strapped bottom line and the loyalty you'll see from them for this advance will pay itself back in dividends.  The shared risk also creates a sense of community and a rally for support for your farmer can prevail if times get tough.  Your CSA share will also will also get the freshest seasonal eats.  Because you’re picking up food that’s grown locally, you know it hasn’t been frozen and trucked thousands of miles.

Some CSAs also ask that you help out at the farm from time to time.  This gets you moving and supporting your local economy with things other than just money.  It’s also a great chance to connect with local citizens and share in one another’s values. 

CSAs share a lot of benefits and I hope you consider joining one soon!

Resources:

for finding a CSA www.localhavest.org

for canning tips www.nchfp.uga.edu

for endless recipes www.foodnetwork.com               

Save the lab rats!

Last week I wrote about studies that debunked the myth that GMO crops use fewer pesticides than other traditional farming methods.  This week I will continue to dispel GMO myths and tackle the biggest one of all…

Myth #2: GMOs are safe to eat. 

“There is more than a casual association between GM foods and adverse health effects…. Multiple animal studies show significant immune dysregulation, including upregulation of cytokines [protein molecules involved in immune responses] associated with asthma, allergy, and inflammation.” – American Academy of Environmental Medicine

L-tryptophan hit the news in 1989 when it was blamed for killing several people and permanently harming hundreds of others.  L-tryptophan was produced using genetically modified bacteria and resulted in a disease called Eosinophilia Myalgia Syndrome (EMS).  The symptoms of EMS included overproduction of white blood cells, severe muscle pain and paralysis.  This toxic L-tryptophan was traced back to a Japanese company and although there is still debate as to whether the toxicity of L-tryptophan was due to genetic engineering or a flawed manufacturing, the FDA responded to the crisis by banning L-tryptophan.  Eventually the CDC conducted a study and concluded that only the Japanese manufacturer had an issue with toxins within its manufactured L-tryptophan.   Proponents quickly criticized the CDC stating that this same tragedy is likely to occur again because testing standards are not up to par to detect these types of toxins given the similarity and purity of the synthetic product to its non-GMO counterparts.  

A genetically modified Bt maized called StarLink was criticized in 2000 when people started to report allergic reactions.  The reports were investigated by the CDC and the CDC later ruled that the blood tests it took and studied did not provide evidence that allergic reactions were associated with StarLink.  The investigation was criticized and later reviewed by a panel convened by the EPA.  The panel pointed out that CDC researchers had made several errors in their testing and concluded that there was a “medium likelihood” that a protein within StarLink maize is an allergen. 

GMO supporters have also claimed that a major benefit of GMOs is that they are more nutritious than traditional crops.  Many studies are finding that the opposite is true and GMO crops are actually less nutritious than their counterparts.  GM rice varieties have shown nutritional deficiencies when compared with non-genetically modified counterparts (that were grown in the same conditions).  GM rice showed decreased levels of vitamin E, protein and amino acids and proved that non-genetically modified rice was superior (1). 

As I discussed last week in my blog, some GM crops are engineered to produce a form of insecticide known as Bt toxin.  In a 2012 study, genetically engineered Bt toxins were found to be toxic to human cells (2).  One specific type of Bt toxin killed human cells.  GM lobbyers responded by saying that this type of study (in vitro) did not accurately reflect what happens in a living human or living animal that eats GM Bt crops; however, other studies have found that these types of crops have had adverse effects on lab animals.  Rats fed Bt maize grew more slowly and showed higher levels of certain fats in their blood when compared to rats fed a controlled diet (3).  They also suffered problems with their livers and kidneys.  The authors state that it could not be concluded that this maize is safe and that long-term studies are needed to investigate these consequences further. 

In fact, a common defense of GMO supporters is that long-term studies do not exist. Governments around the world are not requiring these types of studies in order for us all to determine the long-term effects GMOs potentially have but currently, no long-term tests on GM crops or foods are required by regulatory authorities anywhere in the world.  Reproductive and multigenerational tests, which are necessary to discover effects of GM crops or foods on fertility and future generations, are also not required (4).  So let’s give both sides the benefit of the doubt here and say there’s enough evidence to counterbalance both sides.  Would we still want to take our chances given all the unknowns?  Is manipulating our food supply worth it given our successful history of cross-breeding plant (hybrid) methods? What about those potentially damaging environmental effects too? India, Japan, Australia and the European Union aren't taking any chances.  

(1)      Jiao Z, Si XX, Li GK, Zhang ZM, Xu XP. Unintended compositional changes in transgenic rice seeds (Oryza sativa L.) studied by spectral and chromatographic analysis coupled with chemometrics methods. J Agric Food Chem. Feb 10 2010; 58(3): 1746-1754.

(2)      Mesnage R, Clair E, Gress S, Then C, Székács A, Séralini G-E. Cytotoxicity on human cells of Cry1Ab and Cry1Ac Bt insecticidal toxins alone or with a glyphosate-based herbicide. Journal of Applied Toxicology. 15 Feb 2012.

(3)      Séralini GE, Cellier D, Spiroux de Vendomois J. New analysis of a rat feeding study with a genetically modified maize reveals signs of hepatorenal toxicity. Archives of Environmental Contamination and Toxicology. May 2007; 52(4): 596–602.

(3)      Séralini GE, Mesnage R, Clair E, Gress S, de Vendômois JS, Cellier D. Genetically modified crops safety assessments: Present limits and possible improvements. Environmental Sciences Europe. 2011; 23(10).