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Jonathan Greenblatt is a member of the faculty at the Anderson School of Management at UCLA and an expert on social entrepreneurship and sustainable business. He is the co-founder of Ethos Water and the former CEO of GOOD Worldwide.
The past 10 years have served as a remarkable opening act for the millennium, especially in the world of responsible business. Products like Ben & Jerry's (owned by Unilever since 2000) and Newman's Own were gaining share on shelves across the country but were considered peculiar outliers rather than the front-end of a major trend. Solar panels were a somewhat frivolous oddity; now they are a marketplace reality, with multibillion-dollar businesses such as First Solar (Nasdaq: FSLR ) and SunPower (Nasdaq: SPWRA ) leading the way. Whole Foods (Nasdaq: WFMI ) was a niche grocer but far from a cultural phenomenon. And whoever heard of Muhammad Yunus?
What a difference a decade makes.
As we begin 2010, prognosticators are using their crystal balls to look ahead and predict the trends. But I think the best indicators of the future lie in the past. The recently concluded conference in Copenhagen may provide an interesting prologue for the years ahead.
In case you were living in a cave, after years of preparation, elected officials from around the world convened in Denmark early last month. They sought to create a coordinated consensus around mitigating climate change -- and failed to do so. Presidents and prime ministers huddled and strategized and somehow managed to come up short. Regardless of the post-game analysis, the results remain the same: no binding agreement was established. As a result, we're left with a fair amount of uncertainty as to how (whether?) we will manage these uncharted waters.
My view? Not an ideal outcome, but actually, we should do just fine.
Now, I am not a dogmatic disciple of the notion of "rational markets." I disagree with Milton Friedman on many points, starting with the essential responsibility of business. I don't like "trickle-down" anything, whether it's rain or economic theory.
But I do have extraordinary faith in entrepreneurs to build the businesses and invent the technologies that will guide us through the turbulent times ahead. I trust the ability of markets to adjust for ambiguity, and consumers who vote with their wallets. This philosophy does not take government off the hook, however -- I am not a libertarian. I firmly believe that we need enlightened leadership and public policies that support the common interest. But we benefit from a business community that will not wait for change but instead, in a bottom-up fashion, build the future it wants to create -- while earning profits along the way.
Indeed, we see encouraging signs in the private sector, where many companies are navigating a path that combines ethics and economics, profits and purpose. This is not about cause marketing per se, but cause suddenly seems tightly tied to CAGR.
For example, General Electric (NYSE: GE ) has shifted its business away from financial engineering to eco-engineering. Silicon Valley pioneer Vinod Khosla, co-founder of Sun Microsystems (Nasdaq: JAVA ) , raised over $1 billion in two funds focused squarely on clean technologies. Sales of hybrid vehicles continue to grow at a breakneck pace, and automakers like Toyota (NYSE: TM ) and Ford (NYSE: F ) are trying to satisfy that demand with new models. There's also a wide array of electric cars looming on the horizon.
The U.K.-based nonprofit group Fairtrade Foundation recently found that consumer spending on fair-trade products grew at an astonishing 30 times over the past decade. Former Vice President Al Gore himself has recognized that business has a major role to play in dealing with climate change -- and will earn tremendous economic dividends along the way. And a recent study by the Aspen Institute found the number of MBA courses incorporating social enterprise is on the rise.
Looking back, it seems inevitable that "Hopenhagen" fell far short of expectations. But we can still look ahead with optimism: It's not that climate change cannot be averted, and the business community will pave the way as we adapt to the new realities of global warming.
Let's hope that our elected leaders will follow their lead -- and all of us will profit as a result.