Nobel Laureate Yunus: Peace, Poverty & Capitalism

ATCA Briefings

London, UK - 10 December 2006, 20:41 GMT - The US Dollar (USD) extended its declines on Tuesday, sending the Euro above USD 1.32 for the first time since March 2005, as US data supported expectations the US central bank -- The Federal Reserve -- may cut interest rates early next year. The USD fell to a new 20-month low against the Euro on Tuesday, as a spate of disappointing US economic data further dimmed the prospect of higher interest rates in the world's largest economy. A long-term factor behind the weakening Dollar is the widening US current account deficit and many market watchers say that the Dollar is just beginning to catch up with the fact that the United States is deep in debt, a significant chunk of which is held by China and Japan. Both the Asian powers are beginning to review their entrenched positions in regard to the value of their own currencies and the mix of their foreign reserves and holdings.

ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses opportunities and threats arising from climate chaos, radical poverty, organised crime & extremism, advanced technologies -- bio, info, nano, robo & AI, demographic skews, pandemics and financial systems. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 100 countries: including several from the House of Lords, House of Commons, EU Parliament, US Congress & Senate, G10's Senior Government officials and over 1,500 CEOs from financial institutions, scientific corporates and voluntary organisations as well as over 750 Professors from academic centres of excellence worldwide.

Dear ATCA Colleagues; dear IntentBloggers

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

We are grateful to:

. Dr Muhammad Yunus, Founder, Grameen Bank and Nobel Peace Prize Laureate 2006, from Oslo, Norway, for, "The Nobel Lecture: Dangers of Globalisation";
. John Elkington, Founder and Chief Entrepreneur, SustainAbility from London, England, for "New Lessons to be learnt from the Success of Social Entrepreneurship"; and
. The Lord Howell of Guildford from The Palace of Westminster for "Energy Security, Addressing Climate Chaos and Lifting Billions out of Poverty"

for their response to ATCA in regard to HRH Prince Charles, The Prince of Wales's new initiative "Costing The Earth - The Accounting For Sustainability" launched at St James's Palace, London, on 6th December 2006.

Muhammad Yunus, PhD, (born June 28, 1940), is a Bangladeshi banker and economist. He is the developer and founder of the concept of microcredit, the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans. Dr Yunus is also the founder of Grameen Bank. In 2006, Dr Yunus and the bank were jointly awarded the Nobel Peace Prize, "for their efforts to create economic and social development from below." Dr Yunus has received several other international honours, including the ITU World Information Society Award, Ramon Magsaysay Award, the World Food Prize and the Sydney Peace Prize. He is the author of Banker to the Poor and a founding board member of Grameen Foundation. The Nobel Lecture given by The Nobel Peace Prize Laureate 2006, Dr Muhammad Yunus, in Oslo, Norway, on 10th December 2006 follows:

Your Majesties, Your Royal Highnesses, Honourable Members of the Norwegian Nobel Committee, Excellencies, Ladies and Gentlemen

Re: The Nobel Lecture: Peace, Poverty and Social Capitalism

Grameen Bank and I are deeply honoured to receive this most prestigious of awards. We are thrilled and overwhelmed by this honour. Since the Nobel Peace Prize was announced, I have received endless messages from around the world, but what moves me most are the calls I get almost daily, from the borrowers of Grameen Bank in remote Bangladeshi villages, who just want to say how proud they are to have received this recognition.

Nine elected representatives of the 7 million borrowers-cum-owners of Grameen Bank have accompanied me all the way to Oslo to receive the prize. I express thanks on their behalf to the Norwegian Nobel Committee for choosing Grameen Bank for this year's Nobel Peace Prize. By giving their institution the most prestigious prize in the world, you give them unparalleled honour. Thanks to your prize, nine proud women from the villages of Bangladesh are at the ceremony today as Nobel laureates, giving an altogether new meaning to the Nobel Peace Prize.

All borrowers of Grameen Bank are celebrating this day as the greatest day of their lives. They are gathering around the nearest television set in their villages all over Bangladesh, along with other villagers, to watch the proceedings of this ceremony.

This years' prize gives highest honour and dignity to the hundreds of millions of women all around the world who struggle every day to make a living and bring hope for a better life for their children. This is a historic moment for them.

Poverty is a Threat to Peace

By giving us this prize, the Norwegian Nobel Committee has given important support to the proposition that peace is inextricably linked to poverty. Poverty is a threat to peace.

World's income distribution gives a very telling story. Ninety four percent of the world income goes to 40 percent of the population while sixty percent of people live on only 6 per cent of world income. Half of the world population lives on two dollars a day. Over one billion people live on less than a dollar a day. This is no formula for peace.

The new millennium began with a great global dream. World leaders gathered at the United Nations in 2000 and adopted, among others, a historic goal to reduce poverty by half by 2015. Never in human history had such a bold goal been adopted by the entire world in one voice, one that specified time and size. But then came September 11 and the Iraq war, and suddenly the world became derailed from the pursuit of this dream, with the attention of world leaders shifting from the war on poverty to the war on terrorism. Till now over USD 530 billion has been spent on the war in Iraq by the USA alone.

I believe terrorism cannot be won over by military action. Terrorism must be condemned in the strongest language. We must stand solidly against it, and find all the means to end it. We must address the root causes of terrorism to end it for all time to come. I believe that putting resources into improving the lives of the poor people is a better strategy than spending it on guns.

Poverty is Denial of All Human Rights

Peace should be understood in a human way in a broad social, political and economic way. Peace is threatened by unjust economic, social and political order, absence of democracy, environmental degradation and absence of human rights.

Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace we must find ways to provide opportunities for people to live decent lives.

The creation of opportunities for the majority of people -- the poor -- is at the heart of the work that we have dedicated ourselves to during the past 30 years.

Grameen Bank

I became involved in the poverty issue not as a policymaker or a researcher. I became involved because poverty was all around me, and I could not turn away from it. In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine in Bangladesh. Suddenly, I felt the emptiness of those theories in the face of crushing hunger and poverty. I wanted to do something immediate to help people around me, even if it was just one human being, to get through another day with a little more ease. That brought me face to face with poor people's struggle to find the tiniest amounts of money to support their efforts to eke out a living. I was shocked to discover a woman in the village, borrowing less than a dollar from the money-lender, on the condition that he would have the exclusive right to buy all she produces at the price he decides. This, to me, was a way of recruiting slave labour.

I decided to make a list of the victims of this money-lending "business" in the village next door to our campus. When my list was done, it had the names of 42 victims who borrowed a total amount of USD 27. I offered USD 27 from my own pocket to get these victims out of the clutches of those money-lenders. The excitement that was created among the people by this small action got me further involved in it. If I could make so many people so happy with such a tiny amount of money, why not do more of it?

That is what I have been trying to do ever since. The first thing I did was to try to persuade the bank located in the campus to lend money to the poor. But that did not work. The bank said that the poor were not creditworthy. After all my efforts, over several months, failed I offered to become a guarantor for the loans to the poor. I was stunned by the result. The poor paid back their loans, on time, every time! But still I kept confronting difficulties in expanding the program through the existing banks. That was when I decided to create a separate bank for the poor, and in 1983, I finally succeeded in doing that. I named it Grameen Bank or Village bank.

Today, Grameen Bank gives loans to nearly 7.0 million poor people, 97 per cent of whom are women, in 73,000 villages in Bangladesh. Grameen Bank gives collateral-free income generating, housing, student and micro-enterprise loans to the poor families and offers a host of attractive savings, pension funds and insurance products for its members. Since it introduced them in 1984, housing loans have been used to construct 640,000 houses. The legal ownership of these houses belongs to the women themselves. We focused on women because we found giving loans to women always brought more benefits to the family.

In a cumulative way the bank has given out loans totalling about USD 6.0 billion. The repayment rate is 99%. Grameen Bank routinely makes profit. Financially, it is self-reliant and has not taken donor money since 1995. Deposits and own resources of Grameen Bank today amount to 143 per cent of all outstanding loans. According to Grameen Bank's internal survey, 58 per cent of our borrowers have crossed the poverty line.

Grameen Bank was born as a tiny home-grown project run with the help of several of my students, all local girls and boys. Three of these students are still with me in Grameen Bank, after all these years, as its topmost executives. They are here today to receive this honour you give us.

This idea, which began in Jobra, a small village in Bangladesh, has spread around the world and there are now Grameen type programs in almost every country.

Second Generation

It is 30 years now since we began. We keep looking at the children of our borrowers to see what has been the impact of our work on their lives. The women who are our borrowers always gave topmost priority to the children. One of the Sixteen Decisions developed and followed by them was to send children to school. Grameen Bank encouraged them, and before long all the children were going to school. Many of these children made it to the top of their class. We wanted to celebrate that, so we introduced scholarships for talented students. Grameen Bank now gives 30,000 scholarships every year.

Many of the children went on to higher education to become doctors, engineers, college teachers and other professionals. We introduced student loans to make it easy for Grameen students to complete higher education. Now some of them have PhD's. There are 13,000 students on student loans. Over 7,000 students are now added to this number annually.

We are creating a completely new generation that will be well equipped to take their families way out of the reach of poverty. We want to make a break in the historical continuation of poverty.

Beggars Can Turn to Business

In Bangladesh 80 percent of the poor families have already been reached with microcredit. We are hoping that by 2010, 100 per cent of the poor families will be reached.

Three years ago we started an exclusive programme focusing on the beggars. None of Grameen Bank's rules apply to them. Loans are interest-free; they can pay whatever amount they wish, whenever they wish. We gave them the idea to carry small merchandise such as snacks, toys or household items, when they went from house to house for begging. The idea worked. There are now 85,000 beggars in the program. About 5,000 of them have already stopped begging completely. Typical loan to a beggar is USD 12.

We encourage and support every conceivable intervention to help the poor fight out of poverty. We always advocate microcredit in addition to all other interventions, arguing that microcredit makes those interventions work better.

Information Technology for the Poor

Information and communication technology (ICT) is quickly changing the world, creating distanceless, borderless world of instantaneous communications. Increasingly, it is becoming less and less costly. I saw an opportunity for the poor people to change their lives if this technology could be brought to them to meet their needs.

As a first step to bring ICT to the poor we created a mobile phone company, Grameen Phone. We gave loans from Grameen Bank to the poor women to buy mobile phones to sell phone services in the villages. We saw the synergy between microcredit and ICT.

The phone business was a success and became a coveted enterprise for Grameen borrowers. Telephone-ladies quickly learned and innovated the ropes of the telephone business, and it has become the quickest way to get out of poverty and to earn social respectability. Today there are nearly 300,000 telephone ladies providing telephone service in all the villages of Bangladesh. Grameen Phone has more than 10 million subscribers, and is the largest mobile phone company in the country. Although the number of telephone-ladies is only a small fraction of the total number of subscribers, they generate 19 per cent of the revenue of the company. Out of the nine board members who are attending this grand ceremony today 4 are telephone-ladies.

Grameen Phone is a joint-venture company owned by Telenor of Norway and Grameen Telecom of Bangladesh. Telenor owns 62 per cent share of the company, Grameen Telecom owns 38 per cent. Our vision was to ultimately convert this company into a social business by giving majority ownership to the poor women of Grameen Bank. We are working towards that goal. Someday Grameen Phone will become another example of a big enterprise owned by the poor.

Free Market Economy

Capitalism centers on the free market. It is claimed that the freer the market, the better is the result of capitalism in solving the questions of what, how, and for whom. It is also claimed that the individual search for personal gains brings collective optimal result.

I am in favour of strengthening the freedom of the market. At the same time, I am very unhappy about the conceptual restrictions imposed on the players in the market. This originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.

Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.

Many of the world's problems exist because of this restriction on the players of free-market. The world has not resolved the problem of crushing poverty that half of its population suffers. Healthcare remains out of the reach of the majority of the world population. The country with the richest and freest market fails to provide healthcare for one-fifth of its population.

We have remained so impressed by the success of the free-market that we never dared to express any doubt about our basic assumption. To make it worse, we worked extra hard to transform ourselves, as closely as possible, into the one-dimensional human beings as conceptualized in the theory, to allow smooth functioning of free market mechanism.

By defining "entrepreneur" in a broader way we can change the character of capitalism radically, and solve many of the unresolved social and economic problems within the scope of the free market. Let us suppose an entrepreneur, instead of having a single source of motivation (such as, maximizing profit), now has two sources of motivation, which are mutually exclusive, but equally compelling a) maximization of profit and b) doing good to people and the world.

Each type of motivation will lead to a separate kind of business. Let us call the first type of business a profit-maximizing business, and the second type of business as social business. Social business will be a new kind of business introduced in the market place with the objective of making a difference in the world. Investors in the social business could get back their investment, but will not take any dividend from the company. Profit would be ploughed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend company.

Once social business is recognized in law, many existing companies will come forward to create social businesses in addition to their foundation activities. Many activists from the non-profit sector will also find this an attractive option. Unlike the non-profit sector where one needs to collect donations to keep activities going, a social business will be self-sustaining and create surplus for expansion since it is a non-loss enterprise. Social business will go into a new type of capital market of its own, to raise capital.

Young people all around the world, particularly in rich countries, will find the concept of social business very appealing since it will give them a challenge to make a difference by using their creative talent. Many young people today feel frustrated because they cannot see any worthy challenge, which excites them, within the present capitalist world. Socialism gave them a dream to fight for. Young people dream about creating a perfect world of their own.

Almost all social and economic problems of the world will be addressed through social businesses. The challenge is to innovate business models and apply them to produce desired social results cost-effectively and efficiently. Healthcare for the poor, financial services for the poor, information technology for the poor, education and training for the poor, marketing for the poor, renewable energy - these are all exciting areas for social businesses.

Social business is important because it addresses very vital concerns of mankind. It can change the lives of the bottom 60 per cent of world population and help them to get out of poverty.

Grameen's Social Business

Even profit maximizing companies can be designed as social businesses by giving full or majority ownership to the poor. This constitutes a second type of social business. Grameen Bank falls under this category of social business.

The poor could get the shares of these companies as gifts by donors, or they could buy the shares with their own money. The borrowers with their own money buy Grameen Bank shares, which cannot be transferred to non-borrowers. A committed professional team does the day-to-day running of the bank.

Bilateral and multi-lateral donors could easily create this type of social business. When a donor gives a loan or a grant to build a bridge in the recipient country, it could create a "bridge company" owned by the local poor. A committed management company could be given the responsibility of running the company. Profit of the company will go to the local poor as dividend, and towards building more bridges. Many infrastructure projects, like roads, highways, airports, seaports, utility companies could all be built in this manner.

Grameen has created two social businesses of the first type. One is a yogurt factory, to produce fortified yogurt to bring nutrition to malnourished children, in a joint venture with Danone. It will continue to expand until all malnourished children of Bangladesh are reached with this yogurt. Another is a chain of eye-care hospitals. Each hospital will undertake 10,000 cataract surgeries per year at differentiated prices to the rich and the poor.

Social Stock Market

To connect investors with social businesses, we need to create social stock market where only the shares of social businesses will be traded. An investor will come to this stock-exchange with a clear intention of finding a social business, which has a mission of his liking. Anyone who wants to make money will go to the existing stock-market.

To enable a social stock-exchange to perform properly, we will need to create rating agencies, standardization of terminology, definitions, impact measurement tools, reporting formats, and new financial publications, such as, The Social Wall Street Journal. Business schools will offer courses and business management degrees on social businesses to train young managers how to manage social business enterprises in the most efficient manner, and, most of all, to inspire them to become social business entrepreneurs themselves.

Role of Social Businesses in Globalisation

I support globalization and believe it can bring more benefits to the poor than its alternative. But it must be the right kind of globalization. To me, globalization is like a hundred-lane highway criss-crossing the world. If it is a free-for-all highway, its lanes will be taken over by the giant trucks from powerful economies. Bangladeshi rickshaw will be thrown off the highway. In order to have a win-win globalization we must have traffic rules, traffic police, and traffic authority for this global highway. Rule of "strongest takes it all" must be replaced by rules that ensure that the poorest have a place and piece of the action, without being elbowed out by the strong. Globalization must not become financial imperialism.

Powerful multi-national social businesses can be created to retain the benefit of globalization for the poor people and poor countries. Social businesses will either bring ownership to the poor people, or keep the profit within the poor countries, since taking dividends will not be their objective. Direct foreign investment by foreign social businesses will be exciting news for recipient countries. Building strong economies in the poor countries by protecting their national interest from plundering companies will be a major area of interest for the social businesses.

We Create What We Want

We get what we want, or what we don't refuse. We accept the fact that we will always have poor people around us, and that poverty is part of human destiny. This is precisely why we continue to have poor people around us. If we firmly believe that poverty is unacceptable to us, and that it should not belong to a civilized society, we would have built appropriate institutions and policies to create a poverty-free world.

We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it. We create what we want.

What we want and how we get to it depends on our mindsets. It is extremely difficult to change mindsets once they are formed. We create the world in accordance with our mindset. We need to invent ways to change our perspective continually and reconfigure our mindset quickly as new knowledge emerges. We can reconfigure our world if we can reconfigure our mindset.

We Can Put Poverty in the Museums

I believe that we can create a poverty-free world because poverty is not created by poor people. It has been created and sustained by the economic and social system that we have designed for ourselves; the institutions and concepts that make up that system; the policies that we pursue.

Poverty is created because we built our theoretical framework on assumptions which under-estimates human capacity, by designing concepts, which are too narrow (such as concept of business, credit- worthiness, entrepreneurship, employment) or developing institutions, which remain half-done (such as financial institutions, where poor are left out). Poverty is caused by the failure at the conceptual level, rather than any lack of capability on the part of people.

I firmly believe that we can create a poverty-free world if we collectively believe in it. In a poverty-free world, the only place you would be able to see poverty is in the poverty museums. When school children take a tour of the poverty museums, they would be horrified to see the misery and indignity that some human beings had to go through. They would blame their forefathers for tolerating this inhuman condition, which existed for so long, for so many people. A human being is born into this world fully equipped not only to take care of him or herself, but also to contribute to enlarging the well being of the world as a whole. Some get the chance to explore their potential to some degree, but many others never get any opportunity, during their lifetime, to unwrap the wonderful gift they were born with. They die unexplored and the world remains deprived of their creativity, and their contribution.

Grameen has given me an unshakeable faith in the creativity of human beings. This has led me to believe that human beings are not born to suffer the misery of hunger and poverty. To me poor people are like bonsai trees. When you plant the best seed of the tallest tree in a flower-pot, you get a replica of the tallest tree, only inches tall. There is nothing wrong with the seed you planted, only the soil-base that is too inadequate. Poor people are bonsai people. There is nothing wrong in their seeds. Simply, society never gave them the base to grow on. All it needs to get the poor people out of poverty for us to create an enabling environment for them. Once the poor can unleash their energy and creativity, poverty will disappear very quickly.

Let us join hands to give every human being a fair chance to unleash their energy and creativity. Let me conclude by expressing my deep gratitude to the Norwegian Nobel Committee for recognizing that poor people, and especially poor women, have both the potential and the right to live a decent life, and that microcredit helps to unleash that potential. I believe this honor that you give us will inspire many more bold initiatives around the world to make a historical breakthrough in ending global poverty.

Thank you very much

Muhammad Yunus


-----Original Message-----
From: Intelligence Unit
Sent: 09 December 2006 09:35
To: 'atca.members@mi2g.com'
Subject: Response: Elkington - New Lessons from Success of Social Entrepreneurship; Howell - Energy Security, Addressing Climate Chaos & Lifting Billions from Poverty; HRH - Accounting For Sustainability

Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

We are grateful to:

. John Elkington, Founder and Chief Entrepreneur, SustainAbility for "New Lessons to be learnt from the Success of Social Entrepreneurship"; and
. The Lord Howell of Guildford from The Palace of Westminster for "Energy Security, Addressing Climate Chaos and Lifting Billions out of Poverty"

for their response to ATCA in regard to HRH Prince Charles, The Prince of Wales's new initiative "Costing The Earth - The Accounting For Sustainability" launched at St James's Palace, London, on 6th December 2006.

John Elkington has worked in the environmental and sustainable development fields since 1972. A co-founder and then Managing Director of Environmental Data Services (ENDS) in 1978, he also co-founded SustainAbility in 1987. He served as the organisation's Chairman from 1995 to 2005, and is now Chief Entrepreneur. He chairs the Export Credits Guarantee Department's Advisory Council and The Environment Foundation, and sits on advisory boards of organisations like the Dow Jones Sustainability Indexes in Switzerland and Instituto Ethos in Brazil. In 2004, BusinessWeek described him as "a Dean of the Corporate Responsibility movement for Three Decades." John has authored or co-authored 16 books, including 1988's million-selling Green Consumer Guide and Cannibals with Forks: The Triple Bottom Line of 21st Century Business (1997), and has written or co-written some 40 published reports. One current project is a book on social entrepreneurs with Pamela Hartigan of The Schwab Foundation. He is also working closely with The Skoll Foundation on a new 3-year field-building programme in relation to social entrepreneurship. He writes:

Dear DK and Colleagues

Re: New Lessons to be learnt from the Success of Social Entrepreneurship

One of the odder aspects of the launch of HRH Prince Charles's "Accounting for Sustainability" at St James's Palace on 6 December was seeing the splendidly attired Cardinal Richelieu, who died in 1642, glowering over the shoulder of Lord Browne of BP. Lord Browne, as you explained in your ATCA posting the same day, was addressing "an exclusive forum attended by parliamentarians, business executives, heads of relevant NGOs, religious and community leaders, academics and philanthropists." In trawling through the linked website of Accounting for Sustainability, we were pleased to see our long-standing work on the triple bottom line agenda and on best practice in corporate sustainability (or non-financial) reporting used as part of the foundations for what happens next.

And it was also fascinating to see how conflicted the speakers were in terms of seeing accountants as potential revolutionaries. Lord Browne admitted that some of his best friends and most valued colleagues are accountants. Still, it was clear that he had a bone or two to pick with the breed. He explained that the main problem with accountancy, at least as currently practised, is that it tends to be backward-looking. To be really useful, he stressed -- particularly at a time when threats like climate chaos are growing apace -- it needs to become much more forward-looking, leaning into the future.

As speaker followed speaker, among them the heads of major accounting firms like KPMG and PwC, the expression on Richelieu's face remained impassive, grim, disapproving even -- largely because he was present in the form of a massive oil painting hung on the silk-lined wall behind the podium. I admit that the Cardinal first caught my eye because of the sheer pomp and majesty of the painting, and the magnificence of Richelieu's robes and hat, but then I recalled that he was once one of the most reviled politicians in England. Today, true, the man who turned France's aristocracy into the equivalent of caged pheasants, condemning them to strut out their limited lives in the Palace of Versailles specially built to house them, is perhaps best remembered as the villain in films like 1993's The Three Musketeers. But there is an aspect of Richelieu's career that is too easily overlooked. Whatever his intentions, he drove a key community of entrepreneurs out of France, denting that country's longer term economic fortunes. Richelieu's assaults on the Huguenots forced many survivors to flee to countries like England, and some of their descendants helped fuel our own Industrial Revolution.

The challenge now is to do the reverse, to build the conditions necessary to inspire and support a new generation of social and environmental entrepreneurs. The greening of accounting and of valuation is a key part of our challenge, clearly, but it is in the very nature of accountants that they tend to follow rather than lead.

Solutions to the sustainability challenges the world now faces come in various forms. Some are compliance-driven -- and as a result often addressed grudgingly. Some are citizenship-led, but too often handled at a distance from the core business. And some are truly innovative and entrepreneurial. As an environmental entrepreneur himself, with his highly successful Duchy Originals business, Prince Charles surely recognises the vital role of innovators and entrepreneurs in blowing away the old, unsustainable order and opening up the opportunity spaces in which more sustainable, more equitable economic and business models can flourish. But this side of the story didn't come across at this particular event, despite the fact that some notable entrepreneurs were in the audience, among them Tim Smit of The Eden Project.

Much of the work that sustainability-minded accountants and other service providers do tries to help corporations that aspire to behave - and be recognized - as good citizens. In some cases, as in the aftermath of the 2004 tsunami, some corporations have gone to extraordinary lengths to help out those in distress. But there is a growing sense that, even with the best will in the world, current approaches to corporate citizenship are not going to save the world from poverty, hunger and disease, let alone from environmental challenges like the collapse of major fisheries, the loss of tropical forests and climate change. The key issues are the replicability and scalability of the solutions on offer - and many citizenship-driven approaches, putting it bluntly, fail to make the cut.

And that's a key reason why attention is increasingly turning to social and environmental entrepreneurs. The extraordinary potential of the work such people do has become increasingly evident, for example with Kenya's Wangari Maathai of the Green Belt Movement winning the 2004 Nobel Peace Prize for her work on reafforestation, and now Muhammad Yunus winning the 2006 Prize for his attempts to make poverty history. The world, it seems, is beginning to sit up and notice things that have been building - like Yunus's microfinance organization, The Grameen Bank -- for at least three decades.

The potential is vast. As Professor Yunus said a few years back, "We have created a slavery-free world, a polio-free world, an apartheid-free word. Creating a poverty-free world would be greater than all these accomplishments while at the same time reinforcing them. This world would be a world that we could be proud to live in." And the central point here is that people like Maathai and Yunus are now actively delivering the goods - and services - needed by the poor.

Strikingly, meanwhile, even the best corporate reporters still lag quite some way behind leading social entrepreneurs - and the foundations that fund them - in terms of understanding how to build and capture social and environmental return on investment. In the latest round of SustainAbility's Global Reporters benchmarking survey, focusing on best practice in corporate sustainability reporting worldwide, we spotlight this very problem. But we also uncover a major shift in best practice reporting, with leading companies shifting from corporate citizenship to risk management, and from risk management to growing attempts to assess and value new sustainability-linked opportunities for value creation.

As the interplay between the worlds of mainstream business and social entrepreneurship grows, as in the summit meetings of the World Economic Forum, we see growing potential for fruitful cross-fertilization. This is something we look at in a new SustainAbility business primer, Scalable Solutions, which explores potential lessons to be learned from the growing success of social entrepreneurship.

Given how sceptical some of our mainstream corporate clients were when, earlier in 2006, we first announced our 3-year, Skoll Foundation-funded expedition into social enterprise territory, we clearly have much work to do to convince some business people that the growing focus on entrepreneurial solutions to sustainability challenges could easily outstrip the corporate citizenship movement within a few short years. But we conclude that there are at least four reasons mainstream business should pay attention to what social entrepreneurs are doing.

First, market intelligence. As interest in base-of-the-pyramid markets grows, social entrepreneurs are experimenting with new business models, services and products in many of the markets that major companies are beginning to take seriously. Second, at a time when success in tackling many of the great divides between rich and poor seems virtually out of reach, leading social entrepreneurs are plunging in, taking risks that few if any major companies would dare to take, and - in some cases - beginning to attract significant funding and other forms of support. Third, social entrepreneurs potentially offer greater leverage than traditional non-profit partners. Significantly, too, partnerships between major businesses and social enterprises hold the promise of better scalability. And, fourth, most metrics in the corporate social responsibility and sustainable development fields today tend to focus on policies, systems and procedures, rather than on performance, impacts and outcomes. By contrast, the major foundations that are investing in social entrepreneurship are increasingly requiring evidence of impacts and outcomes. Over time, expect such approaches to erupt into the mainstream.

Best wishes

John Elkington


-----Original Message-----
From: Intelligence Unit
Sent: 07 December 2006 11:02
To: 'atca.members@mi2g.com'
Subject: Response: The Lord Howell of Guildford "Energy Security, Addressing Climate Chaos and Lifting Billions out of Poverty"; HRH Prince Charles "The Accounting For Sustainability"

Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

We are grateful to The Lord Howell of Guildford from The Palace of Westminster for "Energy Security, Addressing Climate Chaos and Lifting Billions out of Poverty" for his response to ATCA in regard to HRH Prince Charles, The Prince of Wales's new initiative "Costing The Earth - The Accounting For Sustainability" launched at St James's Palace, London, yesterday.

The Right Honourable Lord (David) Howell of Guildford, President of the British Institute of Energy Economics, is a former Secretary of State for Energy and for Transport in the UK Government and an economist and journalist. Lord Howell is Deputy Leader of the Opposition in the House of Lords and Conservative Spokesman on Foreign Affairs. He also Chairs the Windsor Energy Group. Until 2002 he was Chairman of the UK-Japan 21st Century Group, (the high level bilateral forum between leading UK and Japanese politicians, industrialists and academics), which was first set up by Margaret Thatcher and Yasuhiro Nakasone in 1984. In addition he writes a fortnightly column for The JAPAN TIMES in Tokyo, and has done so since 1985. He also writes regularly for the International Herald Tribune. David Howell was the Chairman of the House of Commons Select Committee on Foreign Affairs, 1987-97. He was Chairman of the House of Lords European Sub-Committee on Common Foreign and Security Policy from 1999-2000. In 2001 he was awarded the Grand Cordon of the Order of the Sacred Treasure (Japan). He writes:

Dear DK and Colleagues

Re: Energy Security, Addressing Climate Chaos and Lifting Billions out of Poverty

I have a comment on HRH's excellent initiative as discussed on ATCA. It is as follows:

Getting businesses to account more precisely for their external costs, and even more ambitiously, getting them to change their behaviour in response to the knowledge this cost information -- when properly organized and visualised -- throws up, is a fascinating idea. But the message has perhaps to be in even more compelling and immediate terms if it is really to change our global direction -- and therefore needs to be based as much on hard economics as on long term aspirations and concerns. The two must ride together.

The real issue is this: billions of people in China and India are trying to lift themselves out of desperate poverty. To do so they need massive amounts of cheap and reliable energy -- the bulk of it probably from burning coal. Can they have both energy security and climate security? Can they have the adequate and affordable energy they need to develop and yet avoid the environmental harm to the planet caused by consuming it?

That is the question. Not to address this central issue is to jeopardise both urgent and immediate energy security concerns world-wide AND to undermine longer-term hopes for a cleaner, greener world. Not to face it squarely is indeed to remain "beyond the fringe."

Can this be done? Can both goals be attained? The answer is Yes, provided a vast range of highly complex and interwoven energy and environmental issues, both near-term and very long-term, are handled with skill, with open and practical policy realism and with patience.

A forthcoming book -- Energy Labyrinth -- by myself and Dr Carole Nakhle, to be published in the Spring, suggests a way forward in the following terms: "a greener, cleaner, safer future is possible, but not under present policies or with current priorities. The fight against global warming can make progress, but only if the much more immediate dangers to energy security are openly recognized and vigorously addressed." The book exposes the myths and fallacies in the current energy debate - which could undermine all hopes for a greener future and for checking climate chaos. It offers a highly detailed guide to the changed approaches, both in high policy and in everyday life, needed to chart the way out of today's formidably complex energy labyrinth.

Best wishes

David Howell


-----Original Message-----
From: Intelligence Unit
Sent: 06 December 2006 20:25
To: 'atca.members@mi2g.com'
Subject: HRH The Prince of Wales: Launching a Green Revolution "Costing The Earth - The Accounting For Sustainability"

Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

HRH The Prince of Wales: Launching a Green Revolution "Costing The Earth - The Accounting For Sustainability"

His Royal Highness Prince Charles, The Prince of Wales launched his "Costing The Earth - The Accounting For Sustainability" project at an exclusive forum at St James's Palace today attended by parliamentarians, business executives, heads of relevant NGOs, religious and community leaders, academics and philanthropists.

In a forthright speech in front of leading figures, including British Prime Minister Tony Blair, the Prince said, "We are consuming the resources of our planet at such a rate that we are, in effect, living off credit and living on borrowed time... it is our children and grandchildren who will have to pay off this debt and we owe it to them and ourselves to do something about it before it is too late." Other speakers included The Bishop of London Richard Chartres; Lord Browne, Chief Executive of BP; and former US Vice President Al Gore.

Prince Charles said, "There was a time when we could say that there was either a complete lack of knowledge, or at least room for doubt, about the consequences for our planet of our actions. That time has gone. We now know all too clearly what we are actually doing and that we need to do something about it urgently. Better accounting must be part of that process."

Al Gore praised Prince Charles's green initiative in a video message to the forum. He said it may be "one of the most important initiatives" and stressed, "We need to continue the effort to solve the climate crisis."

The British Royals are taking the matter of "Launching a Green Revolution" increasingly seriously: The Prince is set to label all his Duchy Originals range with details of greenhouse gases made during their production. Her Majesty The Queen has already gone green at Windsor Castle with a plan to use hydroelectric power. HRH The Duke of Edinburgh uses a taxi cab fuelled by liquid petroleum gas to travel around London, while water in a bore hole at Buckingham Palace is used to supply air conditioning to the Queen's gallery before topping up the water levels in the Palace lake.


We look forward to your further thoughts, observations and views. Thank you.

Best wishes

For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency Alliance (ATCA)

ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses opportunities and threats arising from climate chaos, radical poverty, organised crime & extremism, advanced technologies -- bio, info, nano, robo & AI, demographic skews, pandemics and financial systems. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 100 countries: including several from the House of Lords, House of Commons, EU Parliament, US Congress & Senate, G10's Senior Government officials and over 1,500 CEOs from financial institutions, scientific corporates and voluntary organisations as well as over 750 Professors from academic centres of excellence worldwide.

Intelligence Unit | mi2g | tel +44 (0) 20 7712 1782 fax +44 (0) 20 7712 1501 | internet www.mi2g.net
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