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.

THE NEWS: The SEC voted on Wednesday, January 27^th, 2010, to issue “interpretive guidance” to corporations — essentially requesting that firms include risks pertaining to climate change in their public filings. The Securities and Exchange Commission – and federal law –   has long required the corporate disclosure of “material risk“ to potential investors, so this vote does not impose any new legal requirements technically speaking. The SEC guidance advises companies to disclose risks relating to climate change regulation and legislation, international accords, “Indirect Consequences of Regulation or Business Trends,” and the physical effects of climate change.

THE REACTION: The vote was met with great appeal from large institutional investors and environmentalists who have been petitioning the SEC for several years to require an increase in such transparency. Anne Stausboll, CEO of pension fund CalPERS said:

“Investors have a fundamental right to know which companies are well positioned for the future and which are not.”

Some speculation by DailyFinance’s Zac Bissonnette and The Wall Street Journal’s Kara Scannell and Siobhan Hughes have deemed the SEC’s ruling as political feuding and a terrible waste of time, while Triple Pundit touts the vote as a hard fought victory for investors. Reuters and other news stations have been covering the petitions initiated during the George W. Bush administration.

WHAT’S NEXT? With this new information being published and discussed by corporations, look for a shift of investments towards companies with better environmental performance – and away from those with lesser eco-results. Large institutional investor petitioned for this SEC ruling, so do not be surprised when they shift their portfolios based on increasing disclosure about risks – and opportunities.

What do you think?   Reply below:

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

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.

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.

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.

* * *

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

IN THE NEWS:   HIP CEO’S CLEANTECH MEMO
TO PRESIDENT-ELECT BARACK OBAMA
BusinessGreen.com, November 7, 2008 issue

What should U.S. President-elect Barack Obama do about clean technology, renewable energy and the environment?

Danny Bradbury, of online cleantech publisher BusinessGreen.com: “We tracked down several of the leading players in the US cleantech and environmental movement to find out what they want to see from an Obama administration and what they expect to get.   From signing Kyoto to awarding Presidential Medals of Freedom for clean tech heroes, here are their responses:”

R. Paul Herman is chief executive and founder of HIP Investor, a San Francisco-based financial firm with a number of green funds and indices:

“We need an integrated economic-environmental-social strategy across all three sectors (business, NGOs and government) that tracks results with an overall performance scorecard. By measuring the quantifiable improvements in environmental, social and human effects ““ and how they drive economic vitality ““ an Obama administration could better design the tax code, regulatory framework, and cross-sector incentives to stimulate an improved society.

If the government could shift its focus to managing outcomes (such as reduced cost per mile driven for vehicles) instead of picking and choosing products (avoiding ethanol subsidies), then we could unleash the full innovation of entrepreneurs everywhere to solve problems with a wide diversity of breakthrough solutions.

Cleantech is the perfect testing ground for this approach, since increased eco-impacts naturally correlate also with high ROIs for customers and increased profits for clean tech businesses.

Obama’s immediate challenges are to restore US credibility and leadership by signing Kyoto and securing immediate Senate approval by 31 January ““ to send the signal that the US is onboard globally, as Australia did with its new prime minister.

The new President must stop the backslide by intercepting ““ and reversing ““ the Bush and Cheney relaxations of industry regulation and reduced reporting.

Obama must accelerate eco-efficiency by kickstarting the auction process for a greenhouse gas emissions (GHG) trading system ““ even if it’s baby steps like the European version. We need the bidders’ money in the Treasury starting in 2009, and to begin rewarding the early movers (including the US CAP participants).

The new President should create eco-benefits by designing tax incentives for corporates who clean or restore the land, air and water. If clean tech products can pump cleaner water out than it was going in, why can’t we start applying these upstream in rivers and downstream in wastewater facilities?

Finally, Obama should reward the highest-performers in environment, social impact, job creation and economic vitality with Presidential Medals of Freedom. It’s appropriate for our cleantech heroes, and speeds the race to the top.”

Read the full text at BusinessGreen.com :

http://www.businessgreen.com/business-green/analysis/2230045/clean-tech-titans-deliver-obama

We sought out 10 HIP places to park your cash and savings nationwide: make money and do good at the same time!

Download the 10 HIP Places to Park Your Cash one-pager, which was also presented at the March 2008 HIP Investor Roundtable.

You will find banks that build up enterprises that create strong Human Impact (Health, Wealth, Earth, Equality and Truth) and also drive Profit ““ for your portfolio, the bank and society overall!

• R. Paul Herman, CEO  + Founder of HIP Investor Inc.
• Kevin Jones, Principal at Good Capital
• Jamien McCullum,   New Cycle Capital
• Deb Parsons, Director of Business Development at Investors Circle

CLICK HERE to watch the video from the webinar!   Or, download the HIP-GoodCapital Webinar presentation in PDF form.

How can you vote HIP in 2008 ?   Do equity prices and incomes rise more in a Democratic or Republican administration?   How should you think about your investment portfolio?

WATCH this HIP Investor webinar (CLICK HERE ) to  see how McCain’s and  Obama’s proposed policies as President compare, according to the HIP methodology, including:

• HEALTH –  will 47 million uninsured Americans be covered?
• WEALTH – how might your taxes shift?
• EARTH –  who will support actions for climate change?
• EQUALITY – how will all Americans have an equal chance to succeed?
• TRUST – who will advocate transparency?
• INNOVATION – what policies will support renewed jobs and revenue?

The event featured HIP Investor CEO Paul Herman, HIP Associate Wil Keenan, and Sam Dorman from the League of Young Voters.

Please CLICK HERE to view this highly valuable, one-hour webinar. (You will need to click the “dimdim” logo; and then there will be a five-second pause before the audio starts.)

If you would prefer to view the PowerPoint (PPT) presented in the webinar, CLICK HERE .

PLEASE VOTE ON NOVEMBER 4, 2008 – AND SHARE THIS WEBINAR WITH THOSE WHO ARE SEEKING MORE INFORMATION ON THE ISSUES.

HIP’s September 2008 Investor Roundtable featured a mix of sustainable apparel innovators:

• Scott Leonard of Indigenous Designs described the firm’s cradle-to-cradle business model, which brings organic and sustainable knits made by artisans in Peru to the US market; Indigenous has also been instrumental in advancing certification standards for sustainable apparel, and working with large players such as Timberland on best practices.

• Joslin Van Arsdale explained how her San Francisco boutique Eco-Citizen supports eco-consciousness through providing organic and fair trade clothing that doesn’t sacrifice style; she also highlighted standout emerging and established sustainable apparel brands.

• Avni Jamdar and Mona Shah showcased Suutra, which provides artisans in India with employment while preserving their skills, re-imagined for a contemporary fashion line; their pilot partner is the Self”“Employed Women’s Association (SEWA), a pioneering and world-renowned non-profit based in Gujarat, India.

Entrepreneurs, industry experts, and MBA students joined institutional and individual investors, who all networked socially and professionally – and asked probing questions of the presenters.

The discussion also hosted these forward-looking ventures:

• PACT Apparel (Jeff Denby and Jason Kibbey) ““ a sustainable underwear brand under the design direction of renowned designer Yves Behar; PACT’s unique direct-to-consumer model partners with non-profits on advertising campaigns and funnels a percentage of profits to them, all while providing edgy, high-quality sustainable fashion to customers.
• 82^nd and Zeal (Tiffani Neal) – a new online eco-boutique that features “fashion for a cause”.

Listen to the presentation and see HIP’s PowerPoint (with audio from the roundtable):

Fallout from the Lehman Brothers’ collapse will result in tighter credit conditions and falling share prices for cleantech firms, but experts are confident that the longer-term outlook still looks solid, Danny Bradbury of BusinessGreen reports.     Learn more and read HIP CEO R. Paul Herman’s expert analysis on what to expect in the short- and long-term.

Read the full article in BusinessGreen.com HERE

BY LEE COKER

Whole Foods (WFMI)
HIP practices: Perishable items comprise 67% of sales, meaning fresh food for customers. As the first mover, Whole Foods proved large demand for quality fresh foods, sparking food retailers to offer more organic, artisan, and/or local products ““ a benefit for more customers than they serve directly (though a multi-year erosion on shareholder value).

Not-so-HIP practices: While making the largest wind-energy-credit purchase in the history of North America and offsetting 100% of its electricity use, Whole Foods refused to release the exact cost of the credits. A comparable purchase of offsets on Terrapass would cost $4.2 million. From a shareholder perspective, Whole Foods might have earned a higher return (and reduced energy demand) by investing those funds in their own clean-energy generation systems (like rooftop solar and wind farms). Read more >

BY LEE COKER

The Slow Food movement, initiated by Carlo Petrini in Italy more than two decades ago to contest the arrival of the fast-food chain McDonald’s into Rome, is now thriving worldwide and accelerating in the USA. Slow Food’s mantra today is “good, clean and fair” – good, healthy food; grown and processed in an eco-friendly, clean manner; and fairly compensating the farmers and food workers.

As consumers and investors alike begin to realize that our daily food decisions affect our health, wealth and earth – and those of the suppliers and employees in the industry – there is increased pressure for our nation’s major grocers to become “sustainable” and “green.” Customers are now asking three questions of their grocers:

• “Are you selling good, fresh produce in urban and suburban areas?”
• “What is your company doing to clean up its carbon footprint?”
• “How are you spreading the wealth fairly in your supply chain?”

The largest grocers ““ from Whole Foods to Walmart ““ are adapting to the changing market with smaller stores in more locations, increased investment in clean technology, and innovative programs for enhancing their supply chain.

However, creating an integrated strategy that encompasses the HIP (Human Impact + Profit) methodology ““ setting and achieving goals for positive human impact that drive increased profit ““ is moving slowly for the players so far. By incorporating concepts of sustainability into the heart of their business model, and linking them to their billions of dollars in expenditures, these businesses have the opportunity for significant growth and increased status amongst consumers, investors, and employees. Read more >

Enterprise Rent-A-Car, likely the most customer-friendly in the industry, is positioning itself to make more money. How? By appointing Pamela Nicholson, who’s worked her way up from the front-line ranks when the company was only 200 people over 27 years ago, to the role of President in this family-owned private company.

Does adding women leaders make companies more money? The research of Catalyst.org, a non-profit based in New York, has consistently shown that the top 25% of companies with the largest share of women Directors on a public-company Board beat the bottom quartile companies with a return on equity 53% higher (13.9% for Boards with more women; 9.1% with fewer or no women). For public-company Boards with 3 or more women (the upper echelons of the top quartile), the return on equity skyrockets to 16%. Read more details about higher financial returns when women are represented in leadership which is not yet close to the 50% of women in the population, or the 47% in the workforce. At HIP Investor, we evaluate how companies that represent the population in Boards, executive teams, managers and staff drive higher “Human Impact” which tends to increase “Profit” and financial returns. This Human Impact + Profit, or HIP, correlation can be tracked and a useful measure for both companies and investors. Read more >

HIP’s August 2008 Investor Roundtable featured a mix of real estate innovators:

• Ritesh Patel of Virtu Investments shared the company’s approach to sustainability through its Green Living Program, and described how energy conservation, water conservation, and waste reduction efforts across its properties have resulted in up to 20% cost savings; Virtu is also moving toward the development of a Green investment product, wherein green features are central to return.
• Amanda Hawn explained how New Forests Advisory is a broker in ecosystem-based markets, working to identify ecological assets, analyze routes to market and develop commercialization strategies for clients; she took the audience through two of New Forests’ current projects ““ the Tropical Timber Fund and Malua Wildlife Habitat Conservation Bank.
• Paul Gifford described ProjectDX , an emerging web-based tool for municipalities to aid the move from planning to action in reaching clean energy compliance targets, GHG emissions goals, and other local and regional environmental objectives.

Entrepreneurs, industry experts, and MBA students joined institutional, accredited and everyday investors, who all networked socially and professionally – and asked probing questions of the presenters.

The discussion also hosted these forward-looking ventures:

• Green Key Real Estate (Chris Bartle) – the first, and only, green real estate brokerage in the San Francisco Bay Area, working to solve environmental and social problems, and educating and empowering green-minded clients.
• Federspiel Controls (Jeff Rauenhorst) – a product and service provider for commercial buildings, that has developed, among other things, a cost effective and user friendly wireless energy management system, realizing environmental impact + profit for clients.

Listen to the presentation and see HIP’s PowerPoint (with audio from the roundtable):

As the world’s largest retailer, Walmart serves 200 million customers with nearly 2 million staff and a base of 60,000-plus suppliers, who provide the products to sell ““ which also contribute 90% of the chain’s total environmental footprint.   Byy one estimate, the total revenues of Walmart’s suppliers equal one-third of global output (GDP) ““ with a likely similar share of environmental impacts.   Shift this supply chain and you can change the world fast.

How? By scoring your suppliers on sustainability. Corporate leaders like Walmart  are beginning to rate and rank suppliers with a scorecard tracking sustainability, weighting those factors alongside price, quality and service, and shifting the mix of products that is merchandised in stores. Walmart expects to start at the company level, proceed to the category level and end up at the product level when it’s complete ““ from local, national and global suppliers (including the  large share  of China’s exports that Walmart receives). Read more >

HIP’s July 2008 Investor Roundtable featured a mix of travel and hospitality innovators:

• Samara Diapoulos of Fairmont Hotels & Resorts shared the company’s history of pioneering green hotel management practices (and their green guide for hotels, used by Cornell’s Hospitality School), as well as the cost savings realized through increased energy efficiency and waste reduction at their properties.
• Damien Keller explained how Orchard Garden Hotel built their property to LEED new-construction certification standards which has benefited the health of their staff and guests.
• Kirsten Mecklenburg of Deloitte described the consulting giant’s efforts to reduce the impact of its client-driven travel (e.g. using Cisco’s TelePresence systems; refusing turn-down service at hotels to save energy) with its “Travel Less, Travel Green” program, which has increasing participation firmwide.

Also, please feel free to ask questions of the HIP Team and/or other participants and post below.

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 >

• Bob Okunski of Sunpower (Sunpowercorp.com) spoke about the solar pioneer’s technology advances and their efforts to cut the costs of solar power, while enumerating challenges of the current policy landscape.
Jay Rooke explained how TerraPass (Terrapass.com) takes a grassroots approach to cutting carbon emissions, and highlighted its innovative methane capture methods at local dairy farms.
Josh Becker, co-founder of New Cycle Capital (Newcyclecapital.com), an early-stage venture capital firm, explained some of the firm’s criteria for seeking out promising ventures within the “extended green economy”.

Entrepreneurs, industry experts, investors and students networked prior to the presentations – and engaged in an energetic discussion during the Q&A session.

The discussion highlighted innovative new initiatives (e.g. 1 Block Off the Grid -www.1bog.org), emerging technologies within the renewable energy space, and the policy debates currently consuming the renewable energy community, such as investment tax credits.

Attendee Kathy Brozek enthused,

“It was a perfect mix of presentations, data analysis, discussion and networking…(with) a stimulating mix of attendees.”

Listen to the presentation and see HIP’s PowerPoint (with audio from the roundtable):

Register for July’s Roundtable: HIP Your Trip – HIP Travel and Hospitality!

To learn more about HIP Investor Services, contact Jessica Skylar at Jessica@HIPInvestor.com.

Ask Your Questions in the ‘comments’ section below! The HIP team will respond over the next month to attendees’ and subscribers’ inquiries.

HIP Investor Inc.’s CEO + Founder R. Paul Herman was interviewed at the Sustainable Brands 2008  conference in Monterey, California – where he also presented on “Measuring Sustainability” to a crowd of 100-plus corporate, entrepreneurial and media attendees.

Paul was interviewed about the HIP framework, scorecard, and how it can be used by investors and capital markets – as well as by companies seeking to be a good investment, since the majority of invididual investors say they want to “do good” and “make money” at the same time.

 ”What is a HIP Investor?” – Paul answers in less than a minute…

This month’s HIP Roundtable featured sustainable, fair-trade and organic food and beverage innovators:

• Greg Steltenpohl, co-founder of Adina (www.adinaforlife.com) healthy juices, coffees and energy drinks (and co-founder of Odwalla juices, now owned by Coca-Cola) talked about the challenges that a HIP entrepreneur faces ““ and why it’s worth doing things right.
• Alison Vercruyesse, founder of 18 Rabbits Inc (www.18rabbits.com), maker of organic granola bars and snacks, shared creative strategies for getting her artisanal products in front of consumers via non-traditional channels, like hotels and Peets coffeehouses.
• Carrie Oliver, founder of Oliver Ranch (www.oliverranch.com), which connects customers directly with varietal breeds of beef, explained how she is getting consumers to think of beef the way they think of wines ““ not as generic meat in a plastic package Read more >