This document discusses various business models and alternatives for sustainable and socially responsible companies. It describes two basic business models that companies can use to gain competitive advantage: differentiation to earn higher margins, and driving down costs to be the most efficient supplier. It also discusses concepts like greenwashing, limits to growth under capitalism, and alternatives like cooperatives, B Corps, conscious capitalism, social entrepreneurship, and triple bottom line accounting. Case studies of companies taking different approaches are provided for discussion.

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6. TODAY’S FOCUS: THE CONTRAINTS AND OPPORTUNITIES OF CAPITALISM _2 means to seek competitive advantage _Limits to growth _Alternatives

12. Build or Buy? These once small companies were bought by the large food processors - Because of their higher growth rates.

13. “ MAKING THE CASE” FOR GREEN BUSINESS 2. Drive to be the most cost efficient supplier. “ Green” has not always mean more cost effective, undercutting the market on price. Clorox Greenworks. 42% market share in 1 year.

16. “ MAKING THE CASE” FOR GREEN BUSINESS: In tech, the premium exists in the beginning, with diminishing margins as the product moves along the adoption curve.

17. Case Study: Interface FLOR carpets Long term commitment to transition the entire company towards zero environmental impact. How to make the case to investors that environmental strategy is a path to profit growth?

18. Case Study: GE ecoimagination Shift from fossil fuels to more efficient forms of energy. What was the eco-imagination brand marketing program all about?

19. Case Study: Beyond Petroleum. Which green business model is BP pursuing here?

20. WHY GREENWASHING OCCURS Aim to reap benefits of higher margins consumers attribute to green products, without understanding the actual environmental improvements of a product or service. Desire to neutralize the effect of environmental activists who have painted a negative picture of company. How do you know when a company is greenwashing?

21. LIMITS TO GROWTH "Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”

22. ALTERNATIVES TO FOR PROFIT, NON PROFIT: COOPs An association of people united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. Roots in England (early 1800s). Well known Coops: NYC Real Estate REI Coop Credit Unions

23. ALTERNATIVES: B CORP Certified by B Lab, designates a business as socially responsible. Requires a business to rewrite its articles of incorporation to make it clear to investors that the business's managers are required to also consider the interests of societal stakeholders: such as employees, communities, and the environment. “ Because they are legally required to maximize shareholder value, profitable, high-impact businesses find it difficult to scale and create liquidity without compromising their mission.” – B Corp

24. ALTERNATIVES: CONSCIOUS CAPITALISM From: The primary goal of corporate leaders is to return value to shareholders To: the primary goal of corporate leaders is to optimize the returns to all stakeholders: customers, employees, supply chain partners, communities, the environment and shareholders But conscious capitalists have a libertarian view – entrepreneurship trumps government intervention. Skeptical that business can solve environmental problems unless given the legal framework to do so, eliminating harmful subsidies, instituting a green tax shift, and establishing land trust, so that businesses can “solve more problems.” _Freakonomics “Is There a Case for Conscious Capitalists” Famous Conscious Capitalist: John Mackey, Whole Foods

25. ALTERNATIVES: SOCIAL ENTREPRENEURSHIP (disagreement/fuzzy definitions). Non profit, for profit, citizen groups, government workers who measure their success in social impact in addition to financial impact. Also used to describe philanthrocapitalism- non profits becoming more business-savvy, more financially sustainable. Famous Social Entrepreneur – Muhammed Yunnus, Grameen Bank The Myths and Realities of Philanthrocapitalism. Critique of Social Entrepreneurship – Paul Farmer – “social entrepreneurs obsessed with scale” and “lack a commitment to the destitute.”

26. ALTERNATIVES: TRIPLE BOTTOM LINE Accounting for 3 bottom lines: financial, environmental, social Problem: financial accounting provides standards. There are no universal standards for environmental, social reporting the rival the precision of $$ and Euros and the like. Difficult to put a quantitative and qualitative value on eco/social. Getting to the Bottom of the Triple Bottom Line (Critique)

27. ALTERNATIVES: OPEN SOURCE STANDARDS CREATION The Impact Reporting and Investment Standards organization (IRIS). Launched at SOCAP09, and led by The Rockefeller Foundation, Acumen Fund, and B Lab, IRIS plans to create a common language and framework for defining, tracking and reporting the performance of impact capital. One of the group’s key initiatives is to share the Acumen Fund’s measurement Pulse software management system for non-financial data (developed in partnership with Google and Salesforce.com). Launched as a “user configurable open source toolset,” the plan is to evolve as an industry standard for funders and grant givers to transparently track impact.