Welcome to the latest “GreenMoney Interviews.” For this issue I spoke with Dr. Hazel Henderson, a true icon and visionary in the world of corporate responsibility and ethical economies. Dr. Henderson is a world-renowned futurist, evolutionary economist, a worldwide syndicated columnist, as well as a consultant on sustainable development, and author of 10 books including the award-winning Ethical Markets: Growing the Green Economy. Also she was one of the co-editors of The UN: Policy and Financing Alternatives. Hazel is the founder and editor-in-chief of Ethical Markets Media (USA and Brazil) and the creator and co-executive producer of its TV series. Her editorials appear in 27 languages and in 200 newspapers around the world, and she has received many honorary doctorates and awards.
Hazel has recently released a publication entitled “Mapping the Global Transition to the Solar Age: From Economism to Earth Systems Science” from the UK’s Institute of Chartered Accountants of England and Wales (ICAEW) and Tomorrow’s Company. It will appear soon in the US from Cosimo Publications, NY.
I am in full agreement with Wisdom Network’s Pamela Davis who stated “Hazel Henderson has her finger on the pulse of the economic transformation that can and must happen if we are to move forward together in prosperity in the 21st century. Her down-to-earth solutions are at once brilliant and simple enough for all of us to understand and implement.”
From the first time Hazel and I met many years ago, I have counted her as a friend. She has been a mentor to me and a consistent supporter in the growth of GreenMoney over the last 20 years. I am pleased to share this extensive interview with the still very active Dr. Henderson who recently celebrated her 80th birthday.
CLIFF: Will you share some of the highlights from your career with us. How are things in the business world different than you thought they would be by 2013? Are we on the way to creating a responsible economy that is not dependent on exponential growth and that works for more people?
HAZEL: First of all, Cliff, I want to remind us all that 80 is the new 60! My physician tells me that my biological age is 60 – so I’m going with this! I work out and swim every day, eat mostly raw vegetables and fruits, local and organic from our farmers market here in St. Augustine, where I’m standing (in the accompanying photo) by our Champion Tree donated to our Ethical Markets Library during our Spring retreat in May 2013 by Terry Mock, co-founder of the Champion Tree Project International and the Sustainable Land Development Initiative.
As to highlights, I would say my most intensive learning experience was serving in Washington, DC as a science policy wonk from 1974 until 1980 on the Technology Assessment Advisory Council for the US Congress Office of Technology Assessment (OTA), on the National Science Foundation’s RANN Committee (Research Applied to National Needs) and on the National Academy of Engineering’s Committee on Public Engineering Policy (COPEP). It was an all-male world, and I recall being asked by my fellow advisors to OTA at the first meeting in Room 100 under the dome of the Capitol if I would please go and get coffee for us! Yet, the intellectual challenge was exhilarating. I remember riding the private train under the Capitol with many members of Congress and Senators who served on Science and Technology committees; testifying before the Joint Economic Committee on the need to set up what became the Congressional Budget Office (CBO). Back then, Office of Management and Budget (OMB) would bring the President’s budget over in a truck and dump these documents at Congress, where we had no staff assigned to digest the budget and offer our own review of its priorities! Today, CBO has become almost too powerful an arbiter – scoring all legislative proposals as well as those of the President.
I then wrote my second book, The Politics of the Solar Age, published by Doubleday in 1981, downloading all I had learned about the contesting special interests, lobbying and forces shaping our national policies on energy, transportation, agriculture, trade, taxation, military and foreign policy. I saw the fight begin as the fossil fuel and nuclear power sectors pushed to preserve their subsidies, how US auto companies had also colonized congressional committees with perks, campaign donations and populated scientific panels with their intellectual mercenaries. I realized how hard it would be for the “Solar Age” economy I envisioned to emerge. Indeed, as we now know, renewable energy companies still face an uphill battle with fossil fuels and their annual global subsidies of over $500 billion, the coddling of the inherently unsustainable nuclear industry, protection of favored agribusiness, etc. I remember at one of our OTA meetings in the late 1970s, James Fletcher, who became head of NASA told us that if similar subsidies had been given to solar, wind, energy efficiency, geothermal and other technologies, we in the USA would have already been powered 100% by renewables! This set me on my future path.
A recent highlight was receiving the blessings of Verena Schumacher, widow of my late friend and mentor E. F. Schumacher, to name our over 6000-volume Henderson-Kay-Schumacher Library. This helps keep Schumacher’s flag flying in the USA. He wrote the Foreword to my first book, Creating Alternative Futures (1978), and I still teach occasionally at UK-based Schumacher College.
CLIFF: On the Ethical Market website (www.ethicalmarkets.com ) I see that you and your team are still staying very busy; what is the latest with the ‘Green Transitions Scoreboard’ and the new ‘Beyond GDP’ Survey?
HAZEL: From my first answer you now know why I created this Green Transition Scoreboard®. Having worked closely with many friends at the United Nations over the years, I knew that the Kyoto Protocol had been set up under lobbying from the economics profession promoted by the USA. This had resulted in the focus on carbon and CO2 emissions (largely backed by Wall Street and London bankers and brokers so they could set up trading regimes). As we now know, this “market fundamentalism” has made many traders profits while CO2 emissions have risen inexorably (see my article “From Rigged Carbon Markets to Investing in Green Growth”). As the UN’s Copenhagen Climate Summit approached, I knew it would be a train wreck, with the collapse of emissions trading due to gaming by polluters, as well as the “us and them” structure of Tier I developed countries versus Tier II developing countries. So, I expected “naming, shaming and blaming” games, while the real solutions were ignored: the other market mechanism, which is pollution taxation (not just carbon). These taxes poll well since the public understands pollution but is mystified about carbon and “cap and trade.” The other solution left on the table was to agree on shifting to the green, low-carbon economy which is the obvious next evolutionary stage. This was achieved at Rio+20 in July 2012 when 191 countries agreed to accelerate the shift to inclusive green economies and updated Sustainable Development Goals (SDGs).
So, Ethical Markets began collecting totals of all the private investments since 2007 which I post daily from market letters coming to us from around the world. We knew from all my research at OTA and NSF that the daily photons from the sun drive every process on our planet, including all life forms and that this can meet all human energy needs and our future growing population, many times over. We agreed with our Australian friends at Climate Solutions II whose computer model showing that if investments in all renewables and efficiency could be at $1 trillion per year from 2010 to 2020, this would scale up these technologies to out-compete both fossil fuels and nukes. Thus, we presented the first Green Transition Scoreboard® at Copenhagen in 2009, showing a total of $1.24 trillion. Since then, this level of private investment of over $1 trillion annually has resulted in our 2013 Q1 total of $4.1 trillion. So, we are well on our way to entering the Solar Age by 2020. I scan the world for the hundreds of reports confirming this good news, which is still under-reported by mainstream media still reliant on advertising from fossilized sectors.
I launched our first Beyond GDP survey with our friends at Globescan in 2007 as I served on the organizing committee for the European Commission’s Beyond GDP Conference in the European Parliament (www.beyond-gdp.eu ). We found huge majorities in twelve countries worldwide favoring overhauling GDP to include indicators of health, education and environmental quality. We repeated this same survey in 2010 and in 2013, finding that the public is still far ahead of politicians on the need for more accurate scorecards of progress such as the Canadian Index of Wellbeing (CIW) which I serve as an advisor, the OECD’s Better Life Index and others. Both use the “dashboard” on websites similar to the one I and Calvert pioneered in 2000 (now the Ethical Markets Quality of Life Indicators).
CLIFF: Can you tell us about your “Transforming Finance” initiative that is focused on “Transforming Finance Based on Ethics and Life’s Principles.“ And tell us about the why and how you are working with Biomimicry 3.8 on the new Principles of Ethical Biomimicry Finance™.
HAZEL: Our Transforming Finance initiative began in 2010 with a conference at our Ethical Markets library and led to our first Statement, recognizing that finance has been a part of the global commons since Bretton Woods in 1945. We produced nine TV programs with our participants, many of whom are pioneer SRI and ESG asset managers, and are now producing our third block of Transforming Finance episodes (2010-2013). These TV programs followed the Ethical Markets TV Series (2006) we produced, seen on many PBS stations, and the TV specials “Growing the Green Economy” (2007) and “The Money Fix” (2008) which examines the politics of money creation and credit allocation. These are all available at www.ethicalmarkets.tv along with our five-part series “Reforming International Finance” (2005). We are happy that all these are now distributed worldwide for colleges and libraries at www.films.com
All of this led to our work with Janine Benyus and her scientific team at Biomimicry 3.8 (where I am also a lead investor). Our two companies joined forces to create our Principles of Ethical Biomimicry Finance™, now being licensed to asset managers. We believe that, while honoring all the pioneering of SRI, ESG and Integrated ethical and green investing, eventually we will need to move our global economy toward operating totally within Life’s Principles and planetary boundaries. This is a big jump for asset managers – beyond all their current and most ESG and SRI models. So we are offering them a turnkey “knowledge system” so they can get up to speed as biomimicry becomes the key innovation path, as it is today for so many leading companies from Interface to Brazil’s Natura, as well as those lesser-known companies we have identified so far.
CLIFF: What are your thoughts on the new divestment campaign from Fossil Fuel companies being led by 350.org and Bill McKibben? Or do you prefer the shareholder engagement approach taken by Bennett Freeman at Calvert with their SAGE Strategy? It brings up thoughts of the South Africa divestment campaign to overturn apartheid. Can this be as effective?
HAZEL: I’m very supportive of Bill McKibben and www.350.org, building on the successful divestment campaign in South Africa in the 1980s which I remember well as a member of Calvert’s Advisory Council. I also have urged Bill to go beyond the call to divest since it’s impossible for asset managers at large institutional funds to just divest! They have to put those billions into something else. This can include shifting investments into all the range of great companies we cover in our Green Transition Scoreboard®. So, I have asked Bill if he could make the 350.org slogan “shift from fossil fuels and invest in the growing Green Economy.” Bill is moving in this direction. Our friend Jigar Shah recently agreed with us in his article “Climate Change is the Next $10 Trillion Opportunity” on Yahoo Finance, that $10 trillion by 2020 is indeed a great new opportunity.
I also agree very much with Calvert’s SAGE strategy and that of Walden Asset Management, Boston Common, Domini and others on stakeholder engagement. Engagement is key – as well as Bob Monk’s strategy in his new book Citizens Disunited of identifying “drone” corporations whose shares are too widely held for any accountability. Bob, who also serves on our Advisory Board, shows it is necessary to target large, visible investors such as foundations and other big shareholders.
CLIFF: You have referred to the stock markets as a global casino. Do you feel that sustainable investing and the inclusion of Environmental, Social and Governance – ESG factors (now even available on Bloomberg terminals) can move financial markets in a healthier more ethical direction? Would a financial transaction tax or other positive reforms help develop a more sustainable global financial ecosystem?
HAZEL: We need an “all of the above” strategy at every level, from the new UK report calling for prison terms for irresponsible risk-takers, to supporting NGOs like: Carbon Tracker, BankTrack, the Alliance for Banking on Values, TruCost, Global Financial Integrity, Tax Justice, Transparency International, as well as Occupy movements still active in the USA and worldwide. Ethical Markets also is an active member in the Network for Sustainable Financial Markets (NSFM) and the Green Economy Coalition. We are conducting webinars for this large coalition of NGOs and government agencies worldwide on how to engage with the global financial sectors and dispel their “fear of finance.” Many join us in supporting financial transaction taxes (FTT) of below 1% (low enough not to reduce liquidity) while not hurting long-term investors. Now that the European Commission has endorsed FTT, we like the French proposal which is a cancellation fee directed at high frequency traders who place hundreds of thousands of orders then cancel 99% of them a few milliseconds later. This is simply “phishing” out order flow and a form of institutionalized front-running. We agree with our Advisory Board member expert Dave Lauer, who has testified before the US Senate on how High Frequency Trading (HFT) is damaging markets. We now see the limits of markets and the importance of maintaining and defending our global commons and options for future generations.