SureGround Solutions’ CEO Thera Kalmijn and HIP Investor CEO R. Paul Herman have co-authored multiple features on sustainability leadership – and its implication for profit and shareholder value – in Sustainable Life Media.

Read how to improve your company’s initiatives for higher human impact and profit – or gain plus good – here:

* Protecting Profits in a Water Scarce World – part 1 and part 2

* Innovators Creating Cash from Carbon Challenges: saving energy, pollution and money at the same time.

* New Profits from Non Profits? Partnerships among charities, companies and investors create value.

* Trust But Verify - A New Mantra for Company Growth

Meet the co-authors at SustainableBrands 2010 conference in Monterey, June 7-10, 2010.

CNBC.com’s Trevor Curwin interviews HIP about managing the pollution associated with carbon and greenhouse gasses, upcoming carbon legislation and competitive positioning across industries – and how it will affect investor portfolios.

“With carbon cap-and-trade legislation before Congress and increasing pressure from shareholders, US companies know they’ll have to deal with their greenhouse gas emissions, or carbon footprint, and many are jumping the gun to change their carbon liability into an asset.

“The best-managed companies are evaluating their carbon footprint,” says R. Paul Herman, founder and CEO of HIP Investor Inc., a Californian investment advisory firm that has created two sustainability indexes tracking the S&P 100 and S&P 500 constituent companies. “And they’re managing it lower to save energy and costs, reduce their future volatility of materials costs, mitigate potential environmental liabilities, and create new competitive advantages.”

Getting a handle on these emissions, however, takes work. …

CLICK HERE TO READ THE FULL FEATURE

Published in Sustainable Life Media and Sustainble Brands Weekly:

WHERE IS THE PROFIT IN CARBON-EFFICIENT SUPPLY CHAINS?

By Thera Kalmijn of Sure Ground Consulting & R. Paul Herman  of HIP Investor Inc.

Would your CEO or CFO want to know if up to 117% of profits were at risk? In other words, a profitable company would erase all profits? If yes, you may want to make sure you are paying attention to Copenhagen’s meetings on climate change.

The potential regulation and cap and trade systems are important issues, particularly in carbon-intensive industries where TruCost estimates carbon cost earnings (EBITDA) impacts of 2% to 117% for utilities, and 1% to 10% for less carbon-intensive industries1. However, those who are focusing only on strategies that will just meet regulatory requirements are missing the boat. Forward-thinking companies are seizing the opportunity created by the environmental crisis to shake costs not only out of their operations, but also out of supply chains. …  

 READ THE FULL ARTICLE HERE

JOIN THE NOV. 18 WEBINAR

Measuring impact ““ whether human, social or environmental ““ can feel like an impossible task, but really just requires a step-by-step path. There are many frameworks that you can draw upon; the key is to start simple, pilot an approach, and then evolve.

At the Opportunity Collaboration in mid-October 2009 in Mexico, organized by MicroCredit Enterprises, the topic of measuring impact was a top discussion topic and desire in many conversations. (UPDATE: The Investors’ Circle conference in DC also had an intense workshop on Metrics faciliated by Suzanne Biegel and Shaula Massena.   Additional conferences – Social Capital Markets and Net Impact - have filled the room with interest in human-impact metrics.)

Several attendees requested that HIP Investor synthesize the core insights, tools and methodologies that we have seen so far ““ and how they might be of use:

1. First, understand the distinctions among Inputs, Process and Results. An input counts how many applications for a micro-loan there are. The process would count how long that process took, and the rate of acceptance. The result of a successful micro-loan would range from re-payment to the benefits of that investment, like educated children or funds for purchasing health or water. Organizations that measure results tend to be the most successful ““ as they align their select highly targeted strategies and align their resources against them. They might also measure processes and inputs, but only if contributing to maximizing the result.

2. Next, determine what and how aggressively you want to measure. You can go as shallow or deep as you like. Determine how meaningful it is to do so. If you make decisions by intuition, the metrics might be less helpful. Not everything that is measurable is meaningful ““ at most choose five metrics (the number of fingers on your hand). But if you are deciding among multiple choices with scarce resources, metrics help to identify aspects that best connect with your goals ““ whether as an organization or an investor (or donor).

3. A range of measurement frameworks exist to learn from, and provide a starting place to build a template:

• Ashoka asks three core questions: How many Ashoka Fellows changed government policy in five years? 50% typically. How many Fellows were replicated by another program in five years? 90% on average. How many people were impacted? This varies by field, and ranges from thousands to millions depending on the topic.
• The Human Development Index by the United Nations covers social, environmental and economic indicators, and rates most of the 200 countries worldwide. These metrics, covering infant mortality, literacy and gender equality, also track year over year performance.
• The Gross National Happiness approach of Bhutan looks at 72 indicators, including how people used the last 24 hours in terms of time. These compile the core “pillars” and go beyond traditional GDP as a measure of success. France is now evaluating how they can do the same with Nobel laureates Joseph Stiglitz and Amartya Sen.
• The Balanced Scorecard is used in business and tracks four categories: customers, operations (including employees), learning and financial metrics. It is used by many large companies as a more comprehensive view.
• The Global Social Venture Competition (GSVC) includes a Social Return on Investment analysis as part of its evaluation for business plans. World of Good won both the GSVC grand prize and SROI prize in 2004. Businesses select the 3 metrics that best drive their venture.
• SVT Group has cataloged more than 30 approaches in a PDF guide, and describes what they are, how they work, how many resources and time commitments are required, and where they have been used.
• Grameen Bank has a set of questions that frame how microfinance families improve their lives.
• The HIP Scorecard. has a comprehensive look at five categories ““ Health, Wealth, Earth, Equality and Trust ““ based on Maslow’s hierarchy of needs and the UN Human Development Index. HIP has adapted it to publicly listed companies. The HIP 100 Index (and the HIP 500 Index) tend to beat the S&P by integrating these quantifiable human impact factors ““ and how they drive profit for corporations.

4. Seek out benchmarks to compare against. The U.N. Human Development Index tracks many categories of metrics at the country level over multiple years. Consider how your organization’s metrics might fit those ““ and demonstrate how it’s more comprehensive, more efficient or faster momentum of improvement.

5. Start a pilot of metrics that seem right for your mission and goals. Don’t overcomplicate it. Go with one, two, or even five metrics (no more than one hand!) ““ and track the impact you are creating. Compare it to the investment currency ““ and calculate a ratio. See how that ratio changes by day, month, quarter or year. Then, evolve your approach to use it as a great management and evaluation tool.

For more information, feel free to contact us (Paul @ HIPinvestor.com) – HIP has helped Walmart develop its Sustainability Index and scorecard, advised NIKE on the development of its Green Exchange (GX) and has applied the HIP Scorecard to the entire S&P 500, resulting in HIP Portfolios for investors.   HIP can help your portfolio, your company and your world.

What’s your experience? What other models or frameworks would you suggest?   Post your ideas and links below:

HIP Commentary: “The New Fundamentals of Investing” What are 10 indicators to evaluate for your portfolio when seeking Human Impact + Profit? Read HIP CEO R. Paul Herman’s commentary in Sustainable Industries’ Money Issue. CLICK HERE TO READ THE FEATURE

Big Change Fast: Walmart’s Sustainability Index
Seeks to Drive 60,000 Suppliers to be More HIP

Walmart, the world’s largest retailer at $400 billion in revenue and 7000-plus stores, the US’s second-largest employer with 1.8 million staff, and a leader in sustainability”“ has just launched a new, sustainability scorecard for the 60,000-plus suppliers across its global supply chain.

By one estimate, the total value of all goods and services sold by Walmart suppliers equals about one-third of global output. Yes, 1 in 3 dollars worldwide is associated with a company that does business with Walmart. So, if you shift Walmart and its suppliers, the global economy shifts with it.

The Value of Sustainability for Walmart

How can sustainability be profitable for Walmart? Let’s look at the income statement effects from implementing sustainability:

Higher Revenue: New products targeting existing customer needs can add to top-line sales. Suppliers like Clorox and its recent launch of its Green Works line of cleaning products has added $200 million of revenue for Clorox, and an associated margin in its retailers (including Walmart). Walmart’s LoveEarth Jewelry line, which allows customers to track where the source metals have come from online using Google Maps, is one of the fastest growing product categories in the chain. Walmart and its sister warehouse-store Sam’s Clubs have sold more than 260 million compact fluorescent light bulbs, a boost to top-line revenue and bottom-line profit.

Lower Costs: Walmart needs to move products from-warehouse-to-store while operating one of the largest fleets in the US. Overall efficiency in the fleet (e.g. fuel-efficient trucks, using batteries when parking, turning off the engines when unloading, packing more volume into the same trucks) has improved 38% since 2005. Walmart China’s stores have already reduced energy usage by 24% and water use by 35%. On the whole, Walmart has eliminated 91% of (formerly wooden) pallets for jewelry and made the remaining 9% of recyclable materials. All of these innovations reduce cost, reduce carbon emissions and are better for both the shareholder and the environment.

Lower Taxes: Where Walmart installs renewable power like solar panels, many government tax incentives exist at the federal, state and local levels, which are positioned to offset the company’s tax liabilities. These investments provide ecological value and reduce costs.

Higher Shareholder Value: During the recession, Walmart’s comprehensive selection and low prices have supported a higher shareholder value than many other enterprises and competitors. By establishing a continued pursuit of sustainability, Walmart is likely to continue its top-line revenue growth and bottom-line performance ““ while serving customers desire for more sustainable products that also benefit the environment.

So, What Is Walmart Implementing?

Walmart has defined three enterprise goals to deliver Human Impact + Profit based on the above factors:
(1)     Zero waste,
(2)     100% renewable energy, and
(3)     Sustainable products on the shelves for customers to purchase

Earlier this decade, Walmart introduced Sustainable Value Networks (SVNs), led by staff in collaboration with BluSkye consultants and other collaborators to improve specific categories related to the company’s goals including:

“¢ Packaging (e.g. no more toothpaste boxes, just sell the tube),
“¢ Cleaning products (e.g. eliminate 70% of phosphates),
“¢ Agriculture (e.g. facilitate re-capture of methane from cows to fuel energy plants)
“¢ Jewelry (e.g. track the gold and metals back to the source).

These initiatives created new products and revenue (e.g. Love Earth jewelry), decreased costs (e.g. square milk containers save shipping), and tapped into tax incentives for energy efficiency (e.g. solar panels).

In a 2007 test, Walmart found significant markets for 200 sustainable products (half of all products tested) and during Earth Month 2008, Walmart’s sustainable products sold so swiftly, many of the products sold out before the month-long promotions ended. This customer demand accelerated Walmart’s push for more sustainable products ““ and a way to showcase it to consumers.

In 2008, the Sustainability Index team sought to design a framework, process and “nutrition label” for products to communicate their overall environmental and social impacts to customers, to give individuals the products they wanted and the information they needed.

The Challenge: Suppliers are 90% of Carbon Emissions

Despite these impressive gains, when Walmart began calculating its global environmental footprint , it discovered that 90% of its carbon emissions (from transportation to manufacturing to farming) were from its suppliers, and only 10% from its own stores, staff and transportation.

What’s Next? The New Sustainability Index and Scorecard?

Building from the positive internal momentum and demonstrated customer demand, Walmart worked with experts like BluSkye Consulting, the Environmental Defense Fund, academics and sustainability metrics experts like HIP Investor to design a new Supplier Sustainability Index. The first version of this “supplier scorecard” is rolling out now to all 60,000 suppliers and asks 15 questions in four categories.

“¢ Energy and Climate ““ using less fuel and saving greenhouse gas emissions
“¢ Material Efficiency ““ consuming less, processing less, reusing and recycling, and ultimately moving to zero waste
“¢ Natural Resources ““ higher quality production with fewer inputs (like water), which could be certified according to standards
“¢ People and Community ““open communication and increased transparency about sourcing, and its impact in the local society.

These four categories are designed to serve customers with sustainable products, operate at lower cost and impact to society, and deliver value for both shareholders and stakeholders.

You can download Walmart’s 15 questions for suppliers in 2009, and additional information on the latest milestones here: http://walmartstores.com/FactsNews/NewsRoom/9277.aspx

How Has Walmart Embedded This In Management Practices?

Details of Walmart’s systematic pursuit of sustainability and the decision groups it has organized can be found at http://walmartstores.com/Sustainability/.

As Walmart has rolled out the Index internally, it has aligned the buying criteria of its purchasing agents. In addition, buyers are rewarded for contributing to the big 3 goals of zero waste, 100% renewable energy and sustainable products.

Walmart overall has become more HIP by embedding sustainability into five areas of its management practices:

1)   Vision (”Save Money. Live Better.”)
2)   Performance Measures (balanced scorecard of eco-metrics as well as profit)
3)   Financial Alignment (understanding the value to the top- and bottom-lines)
4)   Accountability (support at the Board, executive, manager and staff level ““ and incentives and rewards for performance at each level)
5)   Decision Making (the Index criteria focused on environment and society operate alongside the traditional financial go/no-go evaluations)

Who Is Responsible for Sustainability Success at Walmart?

Success has many parents ““ and at Walmart, this is certainly true. Chair of the Board Rob Walton (son of founder Sam Walton) is committed to sustainability, including his founding $250 million investment in renewable power firm First Solar (FSLR). Former CEO Lee Scott and current CEO Mike Duke are leading the charge internally to highlight the new mission, “Save Money. Live better.”

SVP Sustainability Matt Kistler, who first sold fair-trade coffee in response to Yale U. students on-campus demands for it, is heading the multiple initiatives inside Walmart and broad outreach to all stakeholders. Director Rand Waddoups was on point for the development of the Index with many Walmart team members, and continues to help drive them forward ““ as well as openly blog about the successes and challenges of implementing sustainability at Walmart.

And many thousands of Walmart staff are engaged in sustainability for customers or their own behalf as part of a voluntary program called a Personal Sustainability Plan (PSP), originated by Adam Werbach of Saatchi and Saatchi S (formerly Act Now Productions).

The Future of Sustainability at Walmart

With this new sustainability index, Walmart is introducing a new system to quantify impacts, link it to business value and communicate these results to customers, staff and stakeholders. This new approach is poised to transform the global economy and integrate sustainability measures as an everyday tool for better buying, innovative company practices, and more sustainable supply chains.

How Can You HIP Your Life?

“¢ Buy Sustainably. Whether at Walmart or other retailers, when your purchase rings up at the register, those daily revenues are recognized by companies seeking growth, market share and financial performance. Your choices can help shape which products you are offered.

“¢ Innovate at Work. You don’t need to be in charge of sustainability to be sustainable. Implement small (or large) changes where you are ““ in your group, department or location. Success catches on fast ““ and will be recognized if its’ HIP.

“¢ Invest for the Future. Seek out companies that are embedding HIP into their company, and research what companies are actually accomplishing that is quantifiable. Then, allocate your portfolio to align with those sustainability results ““ these are the new fundamentals of 21st century investing.

Disclosure: HIP Investor Inc. was one of several advisors to Walmart on the design of the Sustainability Index. HIP Investor and its clients may hold a position in Walmart, including as part of the HIP 100 Index. This overview is intended to describe the value of sustainability and its impact on shareholder value overall. This analysis is not intended as an investment recommendation. This is not an offer of securities.

How HIP Is Your Mobile Phone Provider?
BY MARA LUDMER and PAUL HERMAN

With a calendar, music player, internet access, and camera, nowadays your phone does a lot more than just make calls. That’s why your mobile phone should be just as HIP as you are. When choosing a cell phone service provider, it’s important to consider not just the features of your network, but also the company’s HIP (Human Impact + Profit) elements.

The service provider of the iPhone, AT&T, is a telecom leader in EARTH with a top-notch pilot program for wind power in Texas creating a savings of 230 million kWh (the equivalent annual electricity use of over 19,000 households) last year. This conservation beats out Verizon’s 16.5 million kWh savings (even adjusting for ATT being about 25% larger in revenue). It also significantly exceeds Sprint’s “plan to build a team to investigate issues relating to the environment,” or MetroPCS’s lack of any reported eco-savings or plans communicating to do so. Which company do you think is best prepared for another energy crisis?

AT&T and Verizon are neck and neck across EQUALITY. AT&T features one of the strongest supplier diversity networks in the world, purchasing more than $1 billion annually in materials from firms owned by women, minority, and disabled-veterans. AT&T and Verizon each employ more than 40% female employees and more than 35% ethnic employees, serving as a model of diversity in the workforce and poised to tap into new markets by thinking like their customers, and launching new solutions to serve them. Sprint and MetroPCS lag behind, offering little information on employee diversity, and Sprint’s Board of Directors is composed entirely of white men ““ even in 2009. It’s doubtful that this exactly mimics their customer base, employee diversity or their supplier base.

Verizon heads up the WEALTH category with the most lucrative compensation plans, paying its 223,900 employees typically much more than the industry average (sometimes up to $10,000 more), according to public sources. It’s not always easy to decipher this though ““ as companies do not always reveal total compensation across the whole firm. For consumers, MetroPCS offers competitive pricing with its pre-paid plans, which is the fastest growing category of the wireless market.

Using the HIP Scorecard methodology, the four largest publicly-listed companies in the wireless industry are listed below. More than 30 metrics go into the HIP scores, and they are used in evaluating these companies for the HIP investment indices.

How HIP Is Your Provider?
(HIP scores incorporate 30+ metrics and
weighted by business value and reliability)

Name (ticker)         HIP Score
AT&T (T)                             42%
Verizon (VZ)             45%
Sprint (S)                             39%
MetroPCS (PCS)   27%

Disclosure: HIP Investor Inc. analyzes publicly listed companies for its own research, for investors and for inclusion in its HIP indices. HIP Investor and its clients may hold a position in these firms, including part of the HIP 100 Index. This overview is intended to demonstrate the value of sustainability  and how it links to  shareholder value overall, and is not intended as an investment recommendation. This is not an offer of securities.

HIP Commentary in Sustainable Industries

“Cleantech Grows In the Investor Community”

Where are the opportunities for an investor seeking “clean-tech” innovations? They may already be in an investor’s portfolio today – including GE, Honeywell, and Caterpillar.   These and other S&P 500 companies are generating top-line revenue from products that are more efficient in energy, water and waste.   Many of these products are also profitable, generating shareholder value.

Read HIP CEO R. Paul Herman’s commentary in Sustainable Industries magazine and learn how S&P 500 companies are becoming more HIP (Human Impact + Profit) and portfolio choices for investors.

CLICK HERE TO READ THE FEATURE

How does LifeCycle Analysis (LCA) benefit corporations and investors? Read Rahilla Zafar’s feature in INSEAD Knowledge, the magazine of the leading European business school.

HIP’s CEO R. Paul Herman explains how LCA thinking and analysis could have helped General Motors and AIG avoid some of the gripping issues both face today.

CLICK HERE TO READ THE FULL FEATURE

 Danny Bradbury of BusinessGreen.com summarizes the slowdown among smaller solar ventures – and quotes HIP CEO R. Paul Herman on the solar stimulus and a  sunnier future outlook.

READ THE FULL STORY

How HIP Is Your Revenue Mix?

Will You Be a HIP Conglomerate?

Wall Street analysts and institutional investors examine sales growth, international sales, product mix and business unit ups and downs.   All of these are financial in nature, and critically important to an enterprise’s economic prosperity.

But those metrics can also be lagging or incomplete.   Customers buy products for a reason.   HIP Investor’s research and analysis shows that the most successful companies typically hone in on solving a human problem ““ health and wellness, financial security, eco-efficient equipment, equal access and increased trust and credibility.

Products that are “HIP” generate both Human Impact + Profit â„¢, because they are designed that way from the start, screened along those criteria during research, development and launch, and deliver a core environmental, social or human benefit to customers, while making money for shareholders.   Yes, they Do Good AND Make Money.

At PepsiCo, CEO Indra Nooyi is integrating a business strategy of “Profit With Purpose,” which includes initiatives in health and nutrition, environment and people.   PepsiCo is now tracking its product revenue in the categories of “good for you” (like Tropicana, Quaker Oats, SunChips, Naked Juice, SoBe and Ethos Water) and “fun for you” (like Doritos and Mountain Dew).     At last count, Pepsi’s “good for you” products represented 30% of its revenue, which it expects to increase over time (though the Q1 2009 earnings presentation highlighted a “maniacal” focus on cash).   Pepsi is a top performer in HIP ratings ““ and Q1 2009 return on equity is over 40% – which has enabled it to outperform the S&P and Dow indices.

At General Electric, the “ecoMagination” strategy has evolved from CEO Jeff Immelt’s self-admitted “good public relations” to real revenue and profit.   GE’s wind turbines, fuel-efficient railroad engines and compact fluorescent light bulbs are examples of 70 products in ecoMagination, contributing top-line 2008 revenue of $17 billion, or nearly 10% of sales worldwide.   GE expects that to grow to $25 billion by 2010, building off its $1.5 billion ecoMagination R&D budget. GE has also announced they are an anchor R&D partner for Masdar City (the world’s first zero-waste, carbon-neutral, renewable-energy city, based in Abu Dhabi).    GE’s leadership in these segments are generating revenue and profit growth as well as energy efficiency and emissions reductions, but the company has been hampered by its un-HIP exposure in financial services and leverage.   GE’s management practices (lower carbon is on each executive’s performance goals and reviews) are very HIP and recent ROE is above 10%, but shareholder performance has not lived up to historical norms.  

What is YOUR HIP revenue share?   Most companies still don’t know exactly.   While HIP’s approach examines environmental, social and human impact created for customers by the products and services of the company ““ and how they generate profit, our interviews with companies have found that there is not yet tracking of this metric systematically like Pepsi and GE.

HIP’s five categories of impact (health, wealth, earth, equality, trust) are based on solving human problems that are highlighted by Maslow’s hierarchy of needs.   Many times the industry dictates a company’s category of primary impact, for example:

= Health: Obviously, the mission of health care is healing patients and encouraging wellness. Data mining technologies help Cardinal Health’s MedMined help track outcomes, and support pharmacies in managing complexity.     An example of a Health+Earth product is Hospira Inc.’s VisIV, a new IV solution container resulting in 40%-70% less waste than similar products.

= Wealth: In these times, it’s hard to identify firms that are solving financial challenges in banking or investing.   Before the meltdown, Wachovia Bank shared how its CRA (community reinvestment act programs) were becoming a business strategy, to help the poor become richer. (Unfortunately, Wachovia’s toxic assets led to its acquisition by Wells Fargo.)   In social investing, State Street and Northern Trust offer mutual funds and exchange-traded funds (ETFs) that enable investors to invest in HIP firms, supporting human impact and profit.

= Earth:   Innovative materials companies are pioneering environmental breakthroughs:   PerkinElmer’s suite of sensor products (in industrial, auto and safety) annually reduce 22 million tons of carbon emissions. Allegheny’s grain-oriented electrical steel (GOES) is used in lightweight and eco-efficient equipment, saving energy and emissions.   Ball’s award-winning 100% recyclable, lower-weight-than-glass wine bottle that uses both product and process innovations to drop the overall footprint and cost over its lifecycle.   Juniper’s new routers save 30% energy and half the data-center space, and Tellabs 5500 digital cross-connects drop energy usage 85%.

= Equality: Whether gender, ethnic, income-level, or species, HIP products seek to equally serve the full range of society.   BB&T Financial is increasing its support of community-development corporations to better serve the full diversity of customers. Cosmetics firm Estee Lauder is seeking the elimination of animal testing in its product development.

= Trust:  Technology helps provide new lenses into great deals for customers.   eBay provides competitive and transparent pricing (though buyers need to validate quality), Progressive Insurance compares prices to its competitors for consumers, and Amazon enables a competitive marketplace against its own retail products.

This strategic view about solving human problems focuses innovation and R and D on the most pressing opportunities ““ which also creates loyal customers, engaged employees, and committed suppliers.   These products also tend to be first to market, higher margin, market-share grabbers and have the potential for long-term profitable lines of business.

Can you be a HIP Conglomerate?  One example of a multi-impact company is McGraw-Hill.   While many recognize its affiliation with textbooks, McGraw Hill (a multi-generational family controlled company) owns several lines of business across all five HIP human impacts.

= Health:   Harrison’s Practice is a mobile resource that provides doctors and nurses with the latest medical advances and knowledge via the web and hand held devices, which can be used with patients more easily than books.

= Wealth:   Standard and Poor’s, author of the S&P500 and other indices, tracks daily changes in stock prices around the world, and provides timely information about the state of portfolios ““ and makes it easy to diversify as well as be used as a platform for firms that manage customer wealth.

=   Earth:   Platts’ energy commodities price assessments are now incorporating info about emerging emissions, biofuels and liquid natural gas markets; and McGraw Hill’s construction industry media, product information, market trends and forecasts are incorporating details on green and sustainable building projects.

= Equality:   iSpeak is a device that turns an MP3 player into a portable translation device, while Acuity is an accountability testing program for public schools.

= Trust: Customer satisfaction surveyor (and consultant) J.D. Power and Associates’ creates a deeper understanding of what customers want ““ and showcases it with awards that increase transparency about who’s a top performer.   Increases in customer satisfaction scores also correlate with higher revenue growth, profit growth and shareholder value.

How much of YOUR revenue is HIP?   How is your company solving human problems for profit?   What is your strategy for creating Human Impact + Profit?

= Share your successes with us at HIPrevenue@HIPinvestor.com ““ or contact us to advise you on how to create more HIP products and generate more HIP revenue. =

Finally, THANKS! To all the HIP portfolio research associates who have contributed to the 500+ companies that HIP Investor has researched across Products, Human Impact (health, wealth, earth, equality, trust), Management Practices — and how they drive Profit.

Forbes staff writer Lisa LaMotta features the latest scoring of “corporate social responsibility” at large corporations – including environmental sustainaiblity and social impact – and how leading firms outperform on shareholder value.

In this Forbes feature, HIP CEO R. Paul Herman encourages companies to engage employees at the “grassroots” for their ideas about how best to realize Human Impact + Profit (HIP).

(HIP research finds that leading companies like Herman Miller, Salesforce.com and eBay have employee “green teams” that generate, implement and record the human impact and profit of sustainability initiatives.)

Want to be more HIP at your organization? See “For Companies” in the above tab, or email us: Jessica@HIPinvestor.com

READ THE FULL FORBES FEATURE HERE

CLEANTECH FUNDING BOOM – OR M&A TIME?

Danny Bradbury of BusinessGreen.com highlights the cleantech investment boom likely to result from Obama’s stimulus – and quotes HIP CEO R. Paul Herman on cleantech investing trends.

READ THE FEATURE

HOW HIP IS OBAMA’S STIMULUS?   A HIP SCORECARD

CAN MEASURE THE HUMAN IMPACT OF OUR TAXES

When investing in a business, you are a shareholder expecting a return on your investment (ROI).

But as a citizen, you are typically called a taxpayer.   In reality, we are tax-investors.   Our tax dollars need to generate a positive human, social or environmental impact.   In this economy, businesses have slashed capital spending, forcing the government to “reinvest” hundreds of billions for recovery.  

So, how will America measure the return on investment (ROI) of the federally-approved stimulus? More importantly, how will President Obama highlight successes, call out failing programs, and ensure the highest possible “return on investment” of taxpayer dollars?  

The American Recovery and Reinvestment Act (full 407 page PDF) authorizes an Accountability and Transparency Board and specifies urgent (”flash”), quarterly and annual reporting to track metrics like job creation and economic growth.  

When President Obama, governors, mayors and officials use a scorecard to track success, we recommend they   track HIP metrics like these:

WEALTH: Job creation, income per person and net worth per person.     And which investments will create the most jobs?   According to this chart   from Congressional testimony using Dept of Commerce data, each $1 million federal investment can create 23 educational services jobs, or 17   public-infrastructure jobs, or 16 “green” jobs.   That beats tax cuts (14 jobs per $1 million), military spending (11) and oil and gas (4).     The Reinvestment Act also specifies that worker compensation be in line with typical pay rates of similar work (and hire only American workers for companies taking TARP bailout funding).

HEALTH:       Access to affordable health care, coverage for workers, and increases in health metrics.   Wellness programs at corporations, from General Mills to Motorola to Xerox, show highly attractive financial paybacks (2-to-1 and more) and increased quality of health for the employees participating. Future demand for Medicare can be reduced as well.   More corporate examples and payback data are here:

EARTH:   Greenhouse gas emissions (GHG), energy usage (BTUs), water usage (volume), waste (volume).   Major retrofits and increased eco-efficiency of buildings will reduce monthly expenses for fuel and utilities, as well as eliminate pollution,   For a “green” school, a $3 per-square-foot investment would yield $11 per sq.ft. in energy/emission/water benefits ““ and another $63 per sq.ft. in healthier staff and increased performance of both teachers and students ““ see the data.

EQUALITY:     Gender equality, ethnic balance, income-class distribution.   US society is 50-50 men/women, and a mix of ethnicities (e.g. 14% Hispanic-American, 13% African-American, 4% Asian-American), but employment does not always match up with the citizens served.   Government contractors like Lockheed Martin and Northrop have some of the highest rates of supplier diversity, due to the requirements of federal contracts.   Furthermore, battling illiteracy can reduce the number of criminals (and save money).   While 60% of prison inmates are illiterate (as are 85% of juvenile offenders), inmates receiving literacy help have a 16% chance of returning to prison, as opposed to 70% who receive no help. Taxpayer could save $25,000 per year per inmate and nearly double that amount for juvenile offenders, with an investment in education.

TRUST:   Transparency of information, including the impact metrics per dollar invested above.   The Recovery Act mandates “appropriate use of taxpayer dollars,” and funding details should also be posted on a website.   The more transparency about progress and expected benefits will lead to higher public confidence and recognition of high ROI projects.

In my conversation with Honolulu mayor Mufi Hannemann  this week, he highlighted the kick-off of the first light-rail system for the Hawai’ian capital.   It was possible a few decades ago, but the local politicians opposed raising the taxes to match federal funds.   Mayor Hannemann, elected in 2005, worked to secure state funds for the city, before applying for Federal dollars. When completed, the new elevated-rail system will yield lesser congestion and pollution, and a healthier, eco-efficient and more equal transportation for citizens and tourists.

The HIP Scorecard can be used for tax-investors and governments, as well as for-profit corporations.   We all seek Human Impact and a Positive ROI ““ whether as tax-investors to government, donor-investors to charity or shareholder-investors of corporations.   And that is the essence of being a HIP society.

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How can you track the Human Impact of the forthcoming reinvestment?   Go to www.Recovery.gov  to provide feedback and participate.

What HIP metrics should be tracked in your city, county or state?

What should the ROI of your tax-investment be?

ADD YOUR COMMENTS BELOW:

January/February 2009:  ”MICROFINANCE INSIGHTS” MAGAZINE  

HIP HIGHLIGHTS 3 WAYS TO GROW REVENUE FOR CORPORATES PARTNERING WITH MICROFINANCE GROUPS (MFI’S)

By R. Paul Herman and Tom Willis of HIP Investor Inc.

Microfinance institutions (MFIs) have a large customer base of 100 million reliable entrepreneurs seeking to build the health and wealth of their family. These citizens also desire a cleaner environment and equal opportunities. By comparison, the 50 largest global companies comprise about 20 million workers. For forward-thinking MNCs partnerships with MFIs offer the opportunity to meet these “human needs” by generating both positive “human impact + profit” ““ or what we call “HIP”.

How does a Corporation Become More HIP ?   By partnering with MFIs (microfinance institutions), there are three ways to be HIP: generating results for the top-line and bottom-line, as well as society:

1.   Encourage products that make money for micro-entrepreneurs too.

2. Tap micro-entrepreneurs  to be leaders of sales networks.

3. Collect information about group demand – and purchasing power.

READ  THE FULL FEATURE, AND DETAILED CASE STUDIES  OF
HOW TO BUILD PROFIT – AND HUMAN IMPACT

Former Wall Street Journal reporter David Bank profiles a leading innovator in banking “green” – both environmentally and financially – with his feature on Peter Liu of New Resources Bank for Ode magazine.   HIP’s CEO R. Paul Herman is quoted on how green banking is spreading with investors, depositors and entrepreneurs seeking HIP capital.

http://www.odemagazine.com/doc/59/making-money-a-renewable-resource/all

The magazine INSEAD Knowledge, published by  the leading global business school, interviewed HIP’s CEO R. Paul Herman at the Net Impact conference in Philadelphia.   Rahilla Zafar  explores how large corporations like Walmart and Coca-Cola Enterprises are  pushing forward in sustainability.      Read the full INSEAD Knowledge feature at this link:

http://knowledge.insead.edu/GlobalCrisisSustainability081125.cfm

Since HIP’s March 2008 Investor Roundtable on Banking, we have new information to share with you – and highlight a sustainable bank’s HIP commitments:

First, two financial institutions featured in HIP’s 10 HIP Places to Park Your Cash list have since received recognition as leaders in sustainable banking:

• New Resource Bank was a featured employer in a Fortune magazine feature on Great Green Careers (“Earth friendly jobs aren’t just about organic farming and installing solar panels. Meet the carbon traders, eco-bankers and corporate climate strategists shaping the new green economy.”) New Resource Bank opened in 2006 with around $25 million in capital and now has assets of more than $130 million (Inc.com).

• ShoreBank Pacific’s was recognized by Washington CEO magazine with a Green Washington Award as the “greenest” financial organization in the state. Out of 140 applicants in 12 categories, ShoreBank Pacific was selected amongst 25 Washington other companies honored at the inaugural awards event. At the end of the first quarter of 2008, ShoreBank Pacific had accumulated earnings of $252,000 and their assets had grown by 16% in to $175 million (banking-business-review.com). Read more >

The world is changing – and HIP Investors would be wise to remember the adage that the past is not the best predictor of the future. HIP companies (companies that are focused on sustainable, profitable growth), are best positioned to not only survive these changes, but to take advantage of them and leap to the head of the pack.

Big Oil (the top oil companies including BP, Exxon, Chevron and Shell) all reported high earnings and financial success in 2007 – BUT can it continue? As the New York Times reports, Exxon may have recorded annual sales of $404.5 billion, up 7 percent from 2006 but its capital and exploration expenditure increased only by$1 billion from the previous year. And, their profit was mostly a direct result of the near-doubling of oil prices last year. The Times reports that, “crude oil prices rose from a low of around $50 a barrel in early 2007 to almost $100 by the end of the year “” the biggest jump in oil prices in any one year.” Read more >

We asked “How HIP is Your Bank?” and our HIP network replied.

Read the email reply from Wainwright Bank and learn more: Read more >

IS YOUR BANK HIP ENOUGH FOR YOU?

While BusinessWeek’s Oct. 29 online extra on “green banking” called out how Big Banks are setting goals for investments in “green” energy, retail banking customers have limited choices of HIP products – unless you live in Europe.

Does your bank improve the lives of customers, employees and society overall? How can you as a customer and investor encourage your bank to be more HIP? Read on, then call your bank to demand HIP ways to manage your money – and the Bank’s. Read more >

With Toyota (TM) having sold 1 million hybrids worldwide (half in the US alone); California Governor Arnold Shwarzenegger converting his Hummers to run on biodiesel and hydrodgen; the muscle-car design chief at General Motors (GM) inspired to create a post-peak-oil vehicle; and Tesla’s sold-out 2006 model year, electric cars are lighting up the showroom. Read more >

Free drugs? Paid for by employers? Is “health care for all” the new business mantra?

Today’s front-page New York Times coverage outlines this emerging revolution:

In the most radical of various moves, a number of employers are now giving away drugs to help workers manage chronic conditions like diabetes, high blood pressure, asthma, and depression.

Major employers — the Times profiles hotelier Marriott (MAR), office products maker Pitney Bowes (PBI), carpet maker Mohawk Industries (MHK), and Maine’s state goverment — are testing free-of-charge pharmaceuticals with employees, with the expectation that the return on that investment will be lower health-care costs and higher employee loyalty (and lower staff turnover costs). Read more >

In Japan, Toyota’s (TM) models now rate your driving with an eco-sensor. Whether coasting in a Zen-like manner, or properly generating RPMs that are not wasteful, the Toyota sensor helps to re-train us as drivers.

How can drivers value MPG over MPH? The need for speed definitely gets your juices flowing with emotion, but maybe can be tempered with thoughts of global warming and climate change – and just a more restful and stressless driving experience. Read more >