Warsaw’s Latest Sustainability Report: thanks to those who made it happen (and why every city should do something like this)

Warsaw – capital of Poland and home to +1.7 million residents – recently published its latest sustainability report (a press release, executive summary, and the entire Warsaw Sustainability Report are available in English and in Polish / po Polsku).

The significance of this in the greater global trend of city sustainability reporting was explained in Cities Today. Benefits of such reports have been summarized well by the ISO. Warsaw’s report is intended as a pragmatic, apolitical summary of economic, societal, and environmental health and related goals, policies, and the areas of stakeholders concern as measured in surveys and open fora. Ahead of the COP21 summit in Paris, we should be asking why every city is not doing something so imminently reasonable? How can we manage well what we don’t measure?

fot. Michał Ozdoba - Photographer http://www.facebook.com/michalozdobaphotographer

Members of Warsaw’s most recent sustainability reporting team, clockwise from top left: Adam Sulkowski, Joanna Wakulinska, Magdalena Obłoza, Leszek Drogosz, Joanna Gajda, Liliana Anam, Magdalena Kraszewska. Photo credit: Michał Ozdoba

Huge congratulations are due to a fantastic team of graduate students: Joanna Gajda, Alicja Marcinek, Magdalena Obłoza, Magda Skrocka-Kołodziejska, and Joanna Wakulińska taking a course in CSR management at Collegium Civitas with Liliana Anam, manager at CSRInfo. They worked tirelessly with a team at Warsaw City Hall led by Director of Infrastructure Leszek Drogosz to research, condense, format, and verify data about material concerns of residents. Thanks to Magdalena Kraszewska as well for her coordination. Finally, I’d be remiss not to thank the Warsaw University of Life Sciences and the Polish-American Fulbright Commission for their making my participation possible!

Warsaw’s latest sustainability report cross-references both the predominant global standard, the Global Reporting Initiative, and the new ISO standard for city sustainability reporting.

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“Taking the blinders off our beasts”

Since about 2005 I’ve kicked around this phrase: “Sustainability reporting is like taking the blinders off our great beasts – helping our institutions see that eliminating harms and improving societal and environmental conditions is actually in their own interest.” It took (what I perceived to be) a positive reaction from one of the respected authorities at the Boston Security Analysts Society‘s recent conference on sustainable investing to get me to “put this out there.”

This analogy is an apt one. Maybe it’s even useful. Consider using it the next time we’re asked: “what, really, is the ultimate goal you hope to achieve with sustainability reporting?” Here’s why you might like it:

Under law, an old and accepted idea is that an organization is treated as a single person – a concept that dates back at least to Roman times and facilitates things like contracting (i.e., an agreement can be made with an organization that may outlast any single human representative; of course, treating a corporation as a person in every context – e.g., constitutional or campaign finance law in the U.S. – may not be desirable).

Yet clearly, whether we consider public entities or private corporations, due to their vast size and power and durability, and despite management’s best efforts to steer them well, they can have an unwieldy tendency to sometimes trample over other interests and do harm – the analogy of an enormously industrious (but potentially lumbering and damaging) beast therefore comes to mind as a more appropriate metaphor.

The blinders in our analogy above – especially in the case of for-profit corporations – is the legal mandate of “putting the interests of the corporation and shareholders first” and the duty to report financial results quarterly and annually. Disciplined focus is a virtue. But it can make the best of us (willfully or unintentionally) blind to side effects of our actions, especially if negative side effects are diffuse and felt over longer periods of time.

When we consider Enron, Lehman Brothers, BP, Monsanto, or VW, or any of the plethora of examples of harmful and costly corporate malfeasance or negligence, it’s clear that actually what you don’t know (or fail to monitor and control) can kill. Or at least cost billions of dollars. Or lead to your own organization’s collapse. Or to creating an enormous economic, environmental, or societal hazard.

Sustainability reporting functions as “taking the blinders off the beast” because the practice encourages an organization and its leaders to find out what matters to all those upon whom it has an effect and to consider the environmental, societal, and economic side effects of its functioning, in addition to evaluating and describing its governance.

By systematically and regularly quantifying those side effects and publishing performance metrics and plans for their improvement, the ultimate aim is to help the organization eliminate negative side effects, and ultimately to even see that its best profit-making opportunities may be related to solving problems.

So, to paraphrase the quote above and re-cap: sustainability reporting is like “taking the blinders off our beasts to help them see their long-term success as aligned with solving problems and improving societal and environmental conditions.” Please feel free to comment if you agree, disagree, or would restate this. Thanks!



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5 questions to ask when leaving a secure job for a fresh challenge: thanks UMass, hello Babson!

First: THANKS for a great decade, UMass Dartmouth! The mission of providing accessible higher education is a great one. Thank you students, alumni, colleagues, and those who gave the freedom to work on meaningful projects that involved students and research in sustainability on campus and in local communities.

Next: THANKS to my new colleagues at Babson College – it’s been inspiring to start to get to know you! I can’t say enough about the kindness and consideration shown to us new arrivals.

Friends have asked: “why leave the security of a tenured and comfortable job?” Below are factors I considered and the answers. For those ever similarly considering a career change, these may be questions that are helpful to ask yourself:

(1) do your values and vision align with those of the new group of people that you are considering joining? It’s been great to realize that Babson’s approach to education 100% aligns with what I believe to be optimal – to paraphrase the core aspects: (a) inform students about societal, environmental, and sustainability challenges in the world (b) help students appreciate who they are and their context and (c) challenge students to imagine and realize “win-win-win” solutions that solve problems while allowing themselves and others to prosper. 

(2) is there external validation of the approach of your potential new teammates? In this case, there are many: not just #1 rankings in entrepreneurship and return-on-investment and other accolades from multiple sources including US News & World Report, Financial Times, PayScale, The Princeton Review, and Entrepreneur magazine, but also the only “A” rating for “value added” out of the best 5 – and #2 ranking overall – out of about 1,500 colleges and universities by Money magazine in 2015 (which rated Babson #1 in 2014). Sure, rating methodologies and the value of rankings are disputed, but when multiple sources consistently say a team is delivering a superlative service, that suggests one may learn a thing or two by joining it.

(3) think about what brought you joy and inspiration in the past, and ask whether your new context is likely to deliver more of those rewards. The greatest gratification during a decade of teaching is watching students flourish as alumni – to name just a few: Cassie, Jacob, Jason, JonathanJosh, Kevin, Marven-rhode (running for City Council in Lynn already, partially on a sustainability platform!), and Natika – especially when they innovate and even start-up booming new companies that solve big problems, like Waste Hub. These people inspire me as much (or more) than I might have influenced them – here’s hoping for many more similarly inspiring friendships at Babson – that seems likely with a list of notable alumni like this one.

(4) if you think, in some small way, that you make the world better through your career, does the switch have the potential to magnify your impact? Specifically, (a) are you likely to grow and improve as a result of contact with this new circle of acquaintances, and (b) conversely, are you likely to impact a wider circle of people and bigger slice of reality in the new context that you are considering? In both respects, I think the answer is yes, considering Babson’s faculty, Babson’s multiple centers, and Babson’s mission.

(5) finally, emotionally, are you (and those closest to you) ready for some excitement? A fresh challenge can be invigorating and new colleagues and a new culture can be stimulating.  It felt like the right time for a new adventure.

So, again, many thanks to all those at UMass for support and inspiration during the past decade, and looking forward with much excitement to a new chapter with those of you at Babson!

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2 Recent Huffington Post items

In case you missed them, here are links to two of my recent opinion pieces in the Huffington Post:

Does Pope Francis and his “Eco-Encyclical” matter? My answer: maybe. As illustrated by the example of Pope John Paul II inspiring the Solidarity movement in the 1980s, when a movement has been building a long time, even against a massive and entrenched power, a charismatic leader’s words can play a vital role as a catalyst.

Why even strictly self-interested businesspeople should oppose the investor-state dispute settlement mechanism in many trade treaties, including the leaked draft of the Trans-Pacific Partnership.

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Trans-Pacific Partnership (TPP), Trans-Atlantic Trade and Investment Partnership (T-TIP), and the original intent of Investor-State Dispurte Settlement (ISDS)

Alarm and criticism has been published about the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (T-TIP). Among other well-founded concerns about the process of negotiating the trade treaties, what they may include, and their impacts, is the fact that they are likely to include some form of Investor-State Dispute Settlement (ISDS) mechanism.

These kinds of mechanisms allow foreign investors and companies to seek, through a supra-national arbitration, compensation from governments for actions that interfere with the profitability of business ventures, including, for example, instances where legislatures or agencies enact laws or rules to protect human health and the environment.

It’s interesting to look back on the early days of ISDS. One of my first articles – NAFTA’s Indirect Expropriation Protections: Will Compensation Be Required When Ecological Protections Are Applied? Mealey’s International Arbitration Report, Vol.15, No.2 (2000) – explained the original motivation for such provisions: to provide a means of redress in cases of nationalization of assets, especially when foreign investors are restricted in how they may seek compensation in the host nation’s courts.

The recent trend toward increased use of ISDS procedures by foreign businesses to (1) effectively veto (or discourage a government from even trying to pass) rules to protect citizens or the environment and (2) seek compensation for losses arising from the passage of laws and rules should therefore be seen as beyond what was originally intended when ISDS was initially imagined.

As U.S. Senator Elizabeth Warren succinctly summarized, the recent increase in use of ISDS and its likely inclusion in the TPP should disturb conservatives because of the undermining of state sovereignty, libertarians because it forces taxpayers to pay for non-market risks, and progressives because of resulting discouragement of policies that protect human health and ecology. The article linked above on the roots of ISDS in NAFTA’s indirect expropriation provisions should further give pause and help us realize that ISDS procedures are being exploited in a way that less than two decades ago was deemed surprising, novel, and unintended. This should further contribute to a consensus that, if there are to be free trade pacts, and must be ISDS procedures included, that common sense safeguards against their abuse should be included.

As the author of the article linked above, I need to thank Professor David A. Wirth of Boston College, for whom I worked as a research assistant, for having me research issues of trade and the environment in law school (his publications are linked here).

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Flipping Pyramids: anyone else think these ought to be inverted?

This post is a long time coming. There are at least two conceptual pyramids involved in our research and teaching in business schools that, while very useful, may be overdue for turning on their heads. Here they are, top-to-bottom: Carroll’s Corporate Social Responsibility (CSR) Pyramid and Prahalad’s Fortune at the Base of the Pyramid:


A pyramid is a powerful symbol. Generally, being at the top implies being in a position of privilege in a hierarchy. On the other hand, it can be interpreted to mean that the base is more essential than the top, a good foundation being essential in supporting the upper tiers (Maslow’s hierarchy of needs illustrates this point). This brings us to the first obvious problem with the CSR Pyramid: being profitable is portrayed as more essential than following the law. Similarly and perhaps most disturbingly, being profitable is designated as more important than not harming people or the environment – bettering environmental or societal conditions is “discretionary.” We all agree we would not want this kind of enterprise – that puts profits ahead of lawfulness and our safety – as a neighbor, right? And that short-term profit-chasing has led to current, real, and severe societal and ecological crises?

Would we be better off if we provoked business leaders to see the CSR pyramid precisely the other way around? That your ideal future (of your enterprise and yourself) is to find problems and solve them – to restore or improve conditions in terms of ecological systems and society? That the next obligation is not to harm? Next, that in solving problems and avoiding harms, you should follow the rules of society? That, if you can do all of this and cover all your costs and compensate yourself and your people, the final and most discretionary aspect of running an enterprise should be seeking ways to extract more money from all transactions than needed?

There is no shortage of books and instructional case studies about companies finding sustainable profits by effectively flipping this pyramid: figuring out how to provide water, sanitation, energy, transportation, food, and shelter in ways that save lives, improve lifestyles, harm no one, and, like an oyster farm or composting waste, restore or improve ecological conditions. Paul Hawken, Gunter Pauli, Ray Anderson… there are plenty of thought leaders who have advocated for Blue Economy thinking or Restorative Economics. So why have we not flipped the CSR pyramid to reflect this thinking and these enterprises as the ideal to which to aspire? Is it time to take this valuable conceptual tool and to flip it?

For the next pyramid flipping thought, I need to credit John Fobanjong, a colleague at UMass Dartmouth in the department of political science, for an insightful question that he asked a few years ago. At a brief seminar highlighting a few key big ideas from the world of sustainable business and examples in South Asia, especially India and Bangladesh, we covered Prahalad’s Fortune at the Base of the pyramid and micro-credit (Grameen Bank) and life-saving soap (Lifebuoy) as examples of making money by solving the needs of global society’s poorest. John asked a poignant question: could the pyramid be upside-down – why are the world’s monetarily poorest few billion human souls at the bottom, and a few hundred billionaires at the pinnacle?

The top of the pyramid does seem to convey a position of privilege in this context – we routinely refer to the hyper-wealthy as being at the top of the economic pyramid. Could we similarly leave this conceptual diagram as it is (meaning that the largest area of the pyramid accurately reflects the larger number of poor people in the world than the wealthy) – but, again, flip it so that we provoke the thought: start with the world’s poorest and the goods and services they need and their ecological conditions. Find solutions in that marketplace as your first priority? Just like Grameen Bank, Life Buoy, and the creators of the Peepoo bag or other waste composting enterprises, sustainable profits can follow. An inverted “pyramid of fortune” model suggests – accurately – that we (including entrepreneurs and intrapreneurs and enterprises and those trying to help them as researchers, coaches, educators, and consultants) may all be better off with such thinking as the priority.

Thanks for reading this and please contact me with questions, comments, or an FYI if you know of someone who has already written any these critiques – asulkowski@gmail.com.

Image credits:

The World Business Council for Sustainable Development (Making Good Business Sense). Diagram of Carroll’s CSR Pyramid. Citing to Carroll (1991).

Robert L. Williams, Maktoba Omar, and Ujvala Rajadhyaksha. The Value Flame at the Base of the Pyramid (VFBOP): Identifying and Creating a Valuable Market (2012).

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A Great Big Pragmatic Tax Idea From An Alumnus Entrepreneur

       An alumnus entrepreneur of our MBA program, Kevin Pelissier, recently brought up an interesting idea about how taxation could be improved. Given that it’s April 15, it seems appropriate to briefly share two big themes that emerged from the conversation. These are offered as alternatives to current approaches of taxing income:
         (1) a consumption tax scaled in proportion to the environmental footprints of goods and services. This is a variation on the idea of a sales tax. It is inspired by the same broadly supported concept that legal (but non-essential) activities that create large negative side effects are most appropriate for taxing. Taxes are sometimes seen as either discouraging certain behavior, and/or attempting to connect a purchase decision to costs imposed on everyone else as a consequence of a selfish choice (as a cigarette tax theoretically does). Why not focus more, therefore, on non-essential consumption choices with the worst side effects?
       (2) an aggregated corporate contribution. This was Kevin’s big idea, with the words slightly tweaked during the course of the conversation (although come to think of it collected corporate contribution makes for the best alliteration). We think this might be the more fresh and innovative of the two suggestions. What would be the impact of corporations being allowed to count (for federal tax purposes) the taxes paid by their employees working within the United States toward an “aggregated (or collected) contribution” to the public coffers? Effectively this would amount to companies getting a deduction for (a) keeping or creating jobs within the jurisdiction collecting the tax, and (b) sharing more of their profits with the people “doing the work.”
       A few details would need to be ironed-out, such as what would qualify as an “employee working within the United States” – but what if the definitions and details were adjusted to create an incentive in favor of re-localization of production and service-providing? Further, wouldn’t it provide some incentive for paying employees more? If large companies almost inevitably exploit the details of a tax code to minimize their tax payments, shouldn’t the fundamentals of the code allow for paying less when more prosperity is shared with people working in the jurisdiction that collects those taxes to pay for infrastructure and public services? This second idea might also be easier to implement because it would be fundamentally less disruptive of structures that (for better or worse) are oriented on taxing individual and corporate income.
       We don’t imagine that these ideas would be an easy sell – obviously there are many vested interests that would guard the status quo – but we hope that tax day gives us all a moment’s reason to meditate on how much more pragmatic and efficient our taxation system could become. Perhaps at a city or state or other sub-national level or in another country some society has tried something similar to one of these ideas? If you know of such an example, please let us know by commenting, thanks!
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Country data: emitting carbon not essential for wealth, development & happiness

HAPPINESSThis chart shows average development (HDI), income (GNI), emissions (CO2 per capita), and happiness (Gallup data) within groups of countries identified using model-based cluster analysis (click here for a draft of the full paper). The least developed group on average generated just 5% of the carbon emissions and 14% of the income of the most developed cluster, yet experienced an average of 93% of the happiness of that of residents of the most developed cluster. This least developed cluster would have had an even higher level of average happiness had countries with unusually negative recent experiences such as Egypt and Iraq been excluded. Between the two clusters with the highest self-reported happiness, one emits just 57% the carbon dioxide emissions of the other. Average happiness is lowest in the two clusters with medium levels of income and development. These observations, among others, are very salient to deciding how to further happiness at the individual, firm, and societal levels while reducing emissions and other negative environmental impacts. The results should provoke further work in measuring, understanding, and fostering conditions conducive to well-being. For a primer on the topic, click here. The paper will be discussed at the 2014 European Academy of Management conference.

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Top 10! Gee thanks :) but where are other governmental sustainability reports?

The Intergovernmental Panel on Climate Change (IPCC) just published its 5th Assessment Report (AR5). We’re now a quarter-century (about 25 years) into regularly summing-up thousands of peer-reviewed scientific studies. It’s striking that the language of the report is already partly in the past tense – an affirmation that, yes, we are already experiencing catastrophic changes to our climate.

In this context, I wanted to issue a belated (and humble, given this context) thanks to Elaine Cohen for recognizing our work as one of the Top 10 sustainability reports of 2013 — the Warsaw Integrated Sustainability Report (available here in English with some introduction-and-press-release here, with Polish version and press release here) was, as intended, a simple and easy-to-absorb statistical snapshot of the sustainability profile of a capital city of one of the largest countries in Europe. But really? Given a practically unanimous chorus (10,883 out of 10,885 peer-reviewed scientific articles in 2013) stating that anthropogenic climate change is a serious problem, why aren’t all governments (sub-national and national) cataloging their aggregate impact (as public sector actors and as representatives of political subdivisions)? Why was it newsworthy that a capital city took a foray into publishing its environmental, societal, and economic performance?

A few more observations about the IPCC and the bigger picture

It bears emphasizing (since this is somehow rarely if ever mentioned in the mainstream news media) that the IPCC process is actually inherently conservative rather than alarmist, since reviewers must arrive at the minimum that all participants can agree upon. Even so, we have now (past tense) observed enough radical, costly changes to climate and weather patterns that even using the measured, careful language of scientific prose, AR5 tells us that we – everyone on the planet – should expect to feel the effects of climate change (as if most of us feel we have not already), and that no institution is truly prepared to protect us from crises such as food shortages (and/or price spikes), extreme weather events, and conflict (meaning riots or war) over basic needs, with the worst suffering to be (or being, or already has been) experienced by the world’s poorest.

A final observation to share. I didn’t mean to raise this one, but it just hit me. Back in high school in the early 1990s, we were already reading about climate change. Yes. Just after 1990, our text The Coming Crises already stated matter-of-factly, as if it was obvious already for years (and mind you, this was a high school textbook) that the wars of the 21st Century were going to be over water and other basic needs. It’s not like any of us (to my knowledge) became survivalists as a result, but really, isn’t it amazing that a quarter century later, the destruction of the biosphere’s life support system is still something in the realm of scientific study – rather than of primary concern – like a wartime mobilization – for industry and government leaders?

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Being Happy … and Everything Else. Plus: Are You Happy?

There’s growing interest in happiness (or well-being/satisfaction) across academic disciplines.

Want Happiness? Health, Age, Relationships & Work Matter. 

A great primer on the basics is this podcast interview with Carol Graham of Brookings. Among other fascinating realities, Carol and interviewer Fred Dews discuss the paradox of “frustrated achievers and happy peasants,” the relative importance of health, work, wealth, age, religiosity, and relationships (see article: You can’t be happier than your wife 🙂 ), the average well-being of protesters around the world, and the fact that among great apes, just as in humans, the relationship of happiness to age follows a “smiley curve” (not exactly how they referred to it, so may I claim authorship of that term 🙂 ?

What About Emitting Carbon, Development, Wealth… Related to Happiness?

I just posted a paper at my SSRN author page that was recently accepted for presentation at the European Academy of Management’s 2014 Annual Conference (Euram2014) that tests whether there is a relationship (across countries) between human development (as measured by the Human Development Index, or HDI), income (per capita), carbon emissions (per capita), and self-reported happiness. The paper uses model-based cluster analysis (for which I have to thank my coauthor D. Steven White) to explore whether there exist clearly defined clusters of statistically similar countries, and what are their characteristics. I thought there might be a few surprises. It turns out there were – and not the surprises I was expecting :). As Carol mentions in the podcast, there are countries where self-reported happiness (like Nigeria and Venezuela) where happiness is much higher than one would expect based on conventional measures of average wealth per capita. Consistent with that observation, our study found (to somewhat simplify), that as countries move “up” in terms of “development” cohorts (as measured by HDI, emissions, income per person), average self-reported happiness actually dips before trending back up (come to think of it, this is not dissimilar to the phenomenon of aging – as we age, average happiness dips in the mid-life era before trending back up). It’s quite striking to see the average carbon footprints of the various mathematically-determined clusters and see comparatively tiny per capita emissions in a cluster of countries where happiness levels rival those in the highest emitting countries. In a nutshell: no, you don’t need to emit carbon to have happiness, among other take-aways.

So here’s the link to the abstract of the paper (whence you may download it). In a neat coincidence, it was accepted to Euram2014 on the same day as I stumbled upon the Tweet of the Brookings podcast, which made me want to post this follow-up right away. Since then, I made some edits to the paper based on reviewer feedback (which are in the version you can access above).

Since I wrote this blog post before finishing the edits, I created something to amuse visitors to this site in the meantime – my first attempt at a poll on this blog (see below, especially the disclaimer that it’s just intended for fun 🙂



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