Dear fellow business leaders and social entrepreneurs,
To review and sign this letter, please click on this link and sign by Tuesday, March 31st.
To: White House Offices: The Office of Public Liaison/Dept. of Energy, Environment and Natural Resources; The Office of Social Innovation and Civic Engagement; and The Council on Environmental Quality
From: American Sustainable Business Council
Subject: A Call for an Equitable and Sustainable Economy
Date: March 31, 2009
This document was written by business executives and social entrepreneurs who are working to create a more equitable and sustainable economy. The undersigned individuals are the chief executives of mission-driven businesses, social enterprises, and sustainable business networks representing hundreds of thousands of employees, members and leaders, and hundreds of billions in economic activity.
We have been very pleased with the leadership and transparency of the Obama Administration to revitalize the U.S. economy. Our council and partners are working to build on this momentum with new thinking on a critical but often overlooked segment of the economy: mission-driven enterprises.
We believe it is time to create the foundation and framework for a transition to a new, 21st century American economy grounded in principles of sustainability and equity. We need to move beyond the politics and business of the past to create the innovative solutions—enterprises, collaborations, and ideas—necessary for accelerating such a transformation.
While our recommendations come from a variety of sources, this community is unified in the conviction that the current economic, social and environmental crises we are facing are rooted in inequitable and unsustainable practices and structures that must be transformed if there is to be a renewal of hope and prosperity. As Einstein famously stated, “we can’t solve problems by using the same kind of thinking we used when we created them.”
An overarching strategy behind our recommendations is for government to empower the engines of our economy—businesses and social enterprises—to be the agents of recovery and revitalization. By removing obstacles, creating incentives, providing support, and partnering, government can help create an enabling environment in which restorative, equitable and sustainable economic models can thrive. These recommendations will unleash the spirit of entrepreneurship and innovation across all sectors and disciplines to confront and solve the economic, social and environmental problems we are now facing.
In this document, we share high level perspectives and recommendations in major policy categories and offer examples of changes we consider to be effective and feasible in the current political climate. As a companion to this proposal, this council will be working in collaboration with others to launch an ongoing, comprehensive multi-stakeholder initiative to aggregate, synthesize and prioritize the most effective policy recommendations that promote equitable and sustainable economic reform.
Among our coalition are experts with considerable breadth and depth in each of these areas, and we would welcome the opportunity to organize discussions, or provide more detailed information, on our recommendations and proposals. We look forward to being in dialogue with you about these ideas over the long-term.
The American Sustainable Business Council is a collaboration of mission-driven businesses, social enterprises and sustainable business networks working to create a just and sustainable economy.
We hold a shared point of view about the positive role that business should play in our society, the proper role of government in structuring the market, and the way public resources are invested. We believe that not only is sustainable economic development compatible with shared prosperity, environmental protection and regeneration, and social justice – it is essential from both a moral and pragmatic standpoint that we restructure our economy to achieve this balance.
We believe that a competitive market-based economy is the most powerful engine of prosperity yet devised – and we also believe that the market must be structured far differently than it is today for the good of all Americans, and for the 6+ billion other people who share this planet. Five core principles must be held in balance:
- -Market competition: A competitive market-based business system must remain the heart of our economy. In most cases, it spurs innovation and efficiency and allocates resources far better than any alternative devised. Market based approaches should be part of the solution wherever possible.
- -Sustainability: We must manage our economy to meet the needs of the current generation without impairing the ability of future generations to meet their needs. This means stewardship, reinvestment, attention to sustainability through the full lifecycle and judicious use of resources – not taking from tomorrow to boost output today.
- -Broad prosperity: It is both a moral imperative and a matter of national self-interest to run the economy in a way that offers full opportunity to participate and prosper to all Americans, regardless of their economic standing, race, religion, or gender, and fully develops and taps the capabilities, creativity, and industriousness of all Americans.
- -Public protection: Without eliminating a strong market incentive to innovate, and to operate efficiently and safely, it is the proper role of government to be vigilant in protecting consumers, through stronger consumer protection legislation, and tough penalties for companies who violate consumer, worker, and environmental protection laws.
- Democratic control: Any market is nothing more and nothing less than a set of rules and conventions negotiated by people through a contentious political process. The market should be structured and managed to be fair, transparent, well regulated, and accountable to all participants.
How We Can Help
The sustainable business and social enterprise community leadership stands ready to support the Administration in the following key areas:
Public and Private Mobilization
- -Align powerful business and community support for high priority legislation introduced by the Administration, with capacities to focus in key geographic areas.
- -Coordinate multi-stakeholder coalitions that bring together business, social enterprise, social investment, labor, social justice, NGO’s, environment, community groups, schools and universities and religious organizations and provide a united and positive voice.
- -Generate and facilitate public dialogue reaching targeted constituencies.
- -Help convene a White House Summit on a Sustainable Economy, bringing together a range of experts and stakeholders from diverse disciplines, sectors and perspectives to discuss ideas, develop consensus-based strategies, and accelerate progress toward equitable and sustainable economic reform.
- -Provide expertise from business executives and social enterprise leaders to ensure success pathways and cost effective solutions to critical concern areas.
- -Provide intellectual resources and objective feedback on potential programs, appointments, executive orders, or legislation proposed by the Administration.
Priorities and Policy Recommendations
The recommendations listed below include initial ideas and policy proposals developed by leading business executives and social entrepreneurs who are working to create a more equitable and sustainable economy. This document is only a beginning, and several key issues are not addressed in this document including healthcare, labor and the banking system. This memo is intended as an initial communication that will expand to include a number of other areas that are crucial to our overall goals.
I. Corporate Responsibility and Governance
The market can only do its job in promoting productivity, efficiency, sustainability, and other goals when the rewards offered to management encourage the long-term interests of investors, other stakeholders, and the interest of society as a whole. With misaligned incentives, weak or un-enforced regulations, and limited protection for workers and customers, even executives who want to do the right thing risk conflicts with boards and short-term investors. Broad reform is needed to make it easier and more profitable to do the right thing – and no longer profitable to do the wrong thing. We must increase accountability and transparency, and bring incentives and sanctions into alignment with the goals of all stakeholders involved.
Tangible programs include:
- -Support the development of a standards infrastructure that allows investors and policy makers to measure the social and environmental impact of businesses and social enterprises, and as much as is practical, require accounting recognition of externalized costs.
- -Reform domestic regulations and trade policies so that socially responsible, sustainable businesses are not driven into a “race to the bottom” by providers (both U.S. and non-U.S.) that don’t adopt responsible, sustainable practices.
- -Provide incentives for federal purchasing programs that prioritize: a) materials and products that are sustainable throughout their lifecycle and minimize the use of virgin materials, b) local purchasing programs that offset the subsidies for long-haul transportation, and c) socially responsible companies that create jobs in underserved communities.
II. Federal Budget Priorities & Spending
As the government seeks the right balance of reallocation, spending cuts, and revenue increases, we would like to emphasize two principles that are under-represented in the current debate over federal spending: (1) Funds that we invest in increasing the productivity of our economy are fundamentally more important than federal spending to bolster current consumption – and we need to give priority to the former. (2) Funds that prop up the economics of outmoded and polluting industries and technologies are wasted, whereas funds that promote U.S. comparative advantage in the efficient and clean industries and technologies of the future, are wise investments.
Tangible programs include:
- -End the explicit and implicit subsidies to fossil fuels that make these fuels appear to be much cheaper than they really are, and end subsidies that reward large companies at the expense of small businesses, and remotely located operations at the expense of local businesses.
- -Use incentives to accelerate the development of new, green industries and green jobs, without picking winners among technologies, and promote job development, education and training incentives to help disadvantaged communities.
- -Put the federal budget back on track to long-term sustainability by reducing expenditures on social security, Medicare/Medicaid and the military to a reasonable percentage of GDP.
III. Energy and Climate Change
The threat of climate change and the risks related to our dependence on petroleum are among the greatest threats we face as a nation and as a species. We believe that the shift to a clean, renewable energy and sustainable materials economy and sufficiently reduced CO2 emissions can be accomplished in ways that create substantial growth opportunities for the economy – in addition to forestalling grave damage. We need to create an energy pricing policy that shifts away from carbon-based fuels and spurs the adoption of renewable energy solutions.
The following areas merit particular emphasis:
- -Commit to the level of CO2 reduction that the current science says is required, and invest in an objective and verifiable reporting system to track progress. Establish a price on carbon, and make it steep enough to motivate the necessary reduction.
- -Impose efficiency standards and labeling to reinforce the move to more efficient buildings, cars, and appliances, and reduce the use of carbon-based materials in feedstocks.
- Enact a strong carbon emissions reduction policy that is fair, sustainable and equitable, especially for disadvantaged communities. Use the revenues from tax and auctions to provide transition assistance to those most disadvantaged by the rise in energy costs – particularly those least able to mitigate in the short run. Subsidize investments by companies and consumers to reduce CO2 output, to reduce the payback period involved, and speed the transition.
IV. New Organizational Forms & Social Innovation
Over the past few decades, a vibrant landscape of new, hybrid enterprises have been emerging that are structured for the benefit of society as a whole – not just a narrow group of shareholders. Sustainable businesses, social enterprises, community development corporations and a range of other hybrid approaches are harnessing the power of business to address pressing needs in housing, health, environment, agriculture, energy, education, workforce development and other fields. Rather than being lost in the void between the business, government and non-profit sectors, there is a need to recognize and empower these organizations through targeted policies and support infrastructure.
Specific programs include:
- -Through seed money, direct investment, tax credits, credit enhancement, SBA loans and guarantees, and similar means, incentivize private investment to provide patient capital and financing for sustainable business and social enterprises.
- -Promote creation of new legal forms tailored to the needs of mission-driven businesses and social enterprises, with accountability and standards for social and environmental performance, including new state corporate forms, IRS designations, and SEC regulations.
- -Provide funding to various agencies and departments to test and rigorously evaluate innovative enterprise approaches in a broad range of fields, notably health and wellness, renewable energy, community capital, green transit, sustainable agriculture, community owned utilities and zero waste manufacturing, the essential components of building a sustainable local economy.
- -Support the creation of national, state and local public-private Commissions to bring together experts from government, civil society, business, faith communities, academia and other sectors to facilitate dialogue and collaboration on the development of alternative, equitable and sustainable economic models.
V. Food, Water and Product Safety
Demand for products made from safer and greener chemicals is growing rapidly. Consumers, investors and governments want chemicals that have low to no toxicity and degrade into innocuous substances in the environment. Leading businesses are capturing these emerging market opportunities by redesigning their products and catalyzing change in their supply chains. We encourage you to support public policies and industry standards that know and disclose product chemistry; assess and avoid hazards; and commit to continuous improvement, also supporting research and development for green chemistry and engineering solutions.
We recommend the following measures to advance an economy where chemicals, materials and products are healthy for humans, as well as for our global environment:
- -Overhaul the Toxic Substance Control Act and strengthen U.S. chemical regulatory policy to remedy the injustice that has exposed communities of color to significantly higher levels of toxic pollution and promote and fund a chemical database for hazardous chemicals.
- -Promote sustainable and organic agriculture as well as sustainable biobased materials development in agricultural policy.
- -Strengthen regulation and increase inspections to ensure the safety of our food and water supply, and of manufactured products, and end the use of antibiotics in meat and poultry production.
Thank you for considering our recommendations.