Eth­i­cal in­vest­ment, so­cial en­ter­prise and the blue econ­omy

When it comes to eth­i­cal in­vest­ing, blue is bet­ter than green; meet­ing lo­cal needs us­ing lo­cal re­sources.

Living Now - - Front Page - By Anne-ma­ree Mcinerney

Most en­light­ened con­sumers and busi­ness own­ers have no doubt sung the praises of the green econ­omy for a long time now. They live it, breathe and en­cour­age oth­ers to fol­low suit. But what if I were to tell you that al­though green is good – it of­ten comes with lin­ear think­ing, un­in­tended con­se­quences and tech­nol­ogy that some­times only ad­dresses one is­sue rather than pro­vid­ing a mul­ti­tude of ben­e­fits. It’s also of­ten ex­pen­sive, sub­sidised – rather than com­pet­i­tive, gen­er­ates waste, and does not al­ways con­sider the sys­tem or com­mu­nity in which it op­er­ates.

It may seem crazy that a sus­tain­abil­ity ed­u­ca­tor and ad­vi­sor is crit­i­cal of the green econ­omy – but bear with me – it’s be­cause some­thing bet­ter (yet rel­a­tively un­known) ex­ists.

In 2014 I packed my bags and headed to Hun­gary to study a body of work that was pre­sented to the Club of Rome called “The Blue Econ­omy”. Now I’m not talk­ing about reef man­age­ment or in­come from our oceans – al­though The Blue Econ­omy can dra­mat­i­cally im­prove the econ­omy of our oceans and re­new ecosys­tems – I’m talk­ing about a 21st

cen­tury ap­proach to sus­tain­abil­ity led by physics and sys­tems think­ing that’s cre­at­ing jobs, elim­i­nat­ing waste and gen­er­at­ing a wealth of new op­por­tu­ni­ties for so­cial en­ter­prise en­trepreneurs and po­ten­tial in­vest­ment projects for switched-on eth­i­cal in­vestors. The Blue Econ­omy as pre­sented by Gunter Pauli does that and much more.

Twen­ti­eth cen­tury ap­proaches to en­vi­ron­men­tal con­cerns are of­ten limited to in­creased re­cy­cling and ef­fi­ciency. How­ever, the re­search and de­vel­op­ment done by economists, sci­en­tists and en­vi­ron­men­tal­ists over the past 30+ years has also yielded: • a wealth of new busi­ness mod­els for de­liv­er­ing prod­ucts and ser­vices dif­fer­ently. • a wealth of new ap­pli­ca­tions for ex­ist­ing tech­nolo­gies to gen­er­ate wealth and wellbeing. • a wealth of new tech­nolo­gies that de­liver ma­jor busi­ness re­sults as well as ma­jor en­vi­ron­men­tal ben­e­fits.

What’s spe­cial about the blue econ­omy?

1. It’s a wealth cre­at­ing, job cre­at­ing ap­proach to do­ing well by do­ing good, with the goal of us­ing 100 in­no­va­tions to create 100 mil­lion jobs in 10 years. 2. It doesn’t start with a tech­nol­ogy – it starts by scan­ning a spe­cific lo­ca­tion and com­mu­nity to de­ter­mine how to meet lo­cal needs us­ing lo­cal re­sources. It is con­cerned with meet­ing com­mu­nity, health, so­cial and eco­nomic needs us­ing what could be con­sid­ered waste or a li­a­bil­ity in that com­mu­nity. 3. It comes with a suite of 100+ in­no­va­tions, care­fully se­lected by a panel of ex­perts for their po­ten­tial for: a. prac­ti­cal im­ple­men­ta­tion b. so­cial and health re­turns c. eco­nomic re­turn po­ten­tial; and d. rad­i­cal re­source pro­duc­tiv­ity

po­ten­tial. 4. It shifts away from the con­cept of a core busi­ness/com­pe­tence that force com­pa­nies to fo­cus on one in­dus­try, and to­wards con­sid­er­ing lo­cal eco­nomic de­vel­op­ment as a pri­or­ity, en­sur­ing that lo­cal pur­chas­ing power in­creases and more money cir­cu­lates re­gion­ally. 5. It fo­cuses on Global Progress In­di­ca­tors (GPI) rather than GDP. GPI is a more ac­cu­rate mea­sure of eco­nomic ac­tiv­ity whereas GDP makes no at­tempt to fac­tor in the de­ple­tion of nat­u­ral re­sources, nat­u­ral dis­as­ters or degra­da­tion of the en­vi­ron­ment.

So­cial En­ter­prise Projects

There’s hun­dreds of great ex­am­ples of suc­cess­ful so­cial en­ter­prise projects the world over. One of my favourites is that of Beth­le­hem Ti­lahun Alemu, an Ethiopian en­tre­pre­neur who founded Solerebels, a thriv­ing eco-sen­si­tive footwear brand that now hails as Africa’s an­swer to brands such as Nike, Reebok and Adi­das.

Beth­le­hem was born and raised in Zenebe­work, a small, im­pov­er­ished ru­ral

com­mu­nity in Addis-ababa, Ethiopia. As a child, she dis­cov­ered that peo­ple of her com­mu­nity were liv­ing in ab­ject squalor be­cause there were very few jobs avail­able.

While most of the lo­cals were un­em­ployed, Beth­le­hem dis­cov­ered that sev­eral of them pos­sessed re­mark­able ar­ti­san skills which re­mained largely un­ex­ploited. This ob­ser­va­tion drove her to brain­storm on ways through which she could trans­form the skills of her com­mu­nity mem­bers into a sus­tain­able en­ter­prise that could gen­er­ate liveli­hoods for them, and create wealth over the long term. To­day she cre­ates jobs and pro­motes en­trepreneur­ship over char­ity and aid. Solerebels is now the world’s fastest grow­ing African footwear brand and the world’s first and only World Fair Trade Fed­er­a­tion Fair Trade cer­ti­fied footwear com­pany. Solerebels is on track to be the first global branded re­tail chain from a de­vel­op­ing na­tion to open 100 stores and achieve over $100 mil­lion USD in rev­enues.

Other ini­tia­tives for ex­am­ple can take waste and turn it into rev­enues. One such blue econ­omy in­no­va­tion takes waste in the form of fine dust par­ti­cles from mines and quar­ries and turns it into pa­per. Stone Pa­per as it’s known uses no trees or wa­ter to make its pa­per, and the pa­per is re­cy­clable for­ever. Best of all a fa­cil­ity is about 40% less to build than a tra­di­tional pa­per pulp mill and cre­ates em­ploy­ment for around 1000 work­ers per 1m tonne pro­duc­tion. The only pro­duc­tion fa­cil­i­ties are cur­rently in China and Tai­wan. This is the sort of project that is well suited to Eth­i­cal In­vestors in Aus­tralia – with ben­e­fits such as im­proved health and wellbeing and job cre­ation on top of a healthy ROI.

An­other is turn­ing this­tles – yes this­tles, a nox­ious weed that we spend mil­lions try­ing to kill with ex­pen­sive toxic chem­i­cals – into valu­able oils. No­va­mont’s Sar­dinia Re­fin­ery which was built on the site of an old oil re­fin­ery, saw $600 mil­lion in rev­enues from 8 dif­fer­ent types of oil from pro­cess­ing this­tles in its first year. Farm­ers who were forced off their land be­cause of the in­creas­ing dry hash con­di­tions are now grow­ing this­tles gain­ing higher in­come than many tra­di­tional crops. The lo­cal goat cheese in­dus­try also got a boost as they dis­cov­ered that the fine dust on the end of the this­tle flower could be used to make goats cheese. In re­cent years this en­zyme had been made ar­ti­fi­cially – but now it’s read­ily avail­able in a nat­u­ral form and is re­vi­tal­is­ing the in­dus­try.

There are hun­dreds of ex­am­ples to­day of turn­ing what some con­sider waste into a new prod­uct or ser­vice – turn­ing used nap­pies into roof tiles, old chewing gum into rub­bish bins, cig­a­rettes into house frames or plas­tic into house bricks.

How­ever, if we are mak­ing or buy­ing prod­ucts like scarves and jumpers from re­new­able sources, such as cash­mere – even if that or­ganic sweater car­ries an or­ganic la­bel, we need to con­sider

It’s a wealth cre­at­ing, job cre­at­ing ap­proach to do­ing well by do­ing good, with the goal of us­ing 100 in­no­va­tions to create 100 mil­lion jobs in 10 years.

that the ab­sence of chem­i­cals does not au­to­mat­i­cally im­ply that ap­parel made from goat’s hair is in fact sus­tain­able.

An ever-ris­ing de­mand of cash­mere, for ex­am­ple, has put ex­ces­sive pres­sure on pro­duc­tion. When­ever the num­ber of graz­ing goats in­creases in a frag­ile sa­vanna bor­der­ing dry lands, the desert ex­pands. Thus, the ques­tion to ask is: is the best re­sponse is plant­ing trees to stem the ex­pand­ing desert as dozens of NGOS at­tempt to do, or should we in­stead fo­cus on de­sign­ing an eco­nomic sys­tem that im­proves the liveli­hood of the herders – es­pe­cially when Paypal of­ten earns as much on the sale of this sweater for se­cur­ing the pay­ment as the herder does. This is where Blue Econ­omy prin­ci­ples re­ally come into their own.

Eth­i­cal In­vest­ing has its re­wards – and blue is best.

Eth­i­cal in­vest­ing, in it­self is good, and can pro­vide ben­e­fits to in­vestors, while do­ing good things for peo­ple. One of the ben­e­fits of eth­i­cal in­vest­ing is its broad abil­ity to pro­vide in­vest­ment op­por­tu­ni­ties to match each in­vestor’s needs. Eth­i­cal in­vest­ing can also do much more with the same funds if it en­gages closely with or at the com­mu­nity level, through pro­vid­ing ben­e­fits to peo­ple, their health, ed­u­ca­tion and wel­fare, which is why we are now see­ing Blue Funds es­tab­lished.

Are you look­ing for so­cial en­ter­prise or eth­i­cal in­vest­ing op­por­tu­ni­ties?

If so, per­haps it’s time to turn your ap­proach on its head.

In­stead of look­ing for a par­tic­u­lar prob­lem to solve, look for a lo­ca­tion where you can make a dif­fer­ence. Get out and scan the en­vi­ron­ment for op­por­tu­ni­ties and needs, then ex­plore for ways to de­liver sus­tain­able liveli­hoods through jobs, pros­per­ity, health and wellbeing. Bet­ter still, get help from Blue Econ­omy spe­cial­ists to iden­tify the op­por­tu­ni­ties in your lo­cal com­mu­nity as it can be hard to do it alone.

Gone are the days that we want green in­no­va­tion – we want, no, we need blue econ­omy in­no­va­tions and in­vest­ments that have mul­ti­ple ben­e­fits to create the jobs of the fu­ture.

Aus­tralia is at a crit­i­cal junc­ture right now. Many of our politi­cians are still pro­mot­ing and fo­cus­ing on tra­di­tional jobs and fos­sil fu­els. If they are not up to the job, then per­haps it’s time for you to stand up and be counted.

Is blue the new green? I think so.

One of the ben­e­fits of eth­i­cal in­vest­ing is its broad abil­ity to pro­vide in­vest­ment op­por­tu­ni­ties to match each in­vestor’s needs.

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