Past Insights

While I went to MIT’s Sustainability Summit to speak, one of the most compelling reasons to go was not for myself, but to hear Jeremy Grantham, co-founder and chief investment strategist at GMO, a Boston-based asset management firm with nearly $100 billion under management. Grantham’s point-of-view on the implications of our “resource-constrained world” and the risks associated with the rapid consumption of non-renewable resources make him an anomaly within the investment world.

If you’re unfamiliar with Grantham, check out his thoughts on resource limitation in The New York Times, or read his Q4 2011 newsletter, the widely-circulated “Longest Quarterly Letter Ever.”

In his talk at MIT, Grantham noted numerous critically important and counterintuitive ideas:

• “Volatility is far more profitable for financial markets than steady growth.”
• “The energy industry is an industry with no grandchildren, so the implications for future generations simply don’t matter to them. The next quarter is all that counts.”
• “We are moving backwards on global climate change – the enemy is winning.”
• “Scientists are really wimpy when it comes to climate change, they simply don’t take the bold positions that are warranted by the data.”
• “In the last 10 years, a 100-year decline in the average commodity price for 33 commodities has been reversed.”
• “China uses an average of 50% of all the cement, iron ore, and coal used in the world.”
• “In agriculture, phosphorus and potassium, two essential inputs for which there are no substitutes, are running out. Morocco and Western Sahara have 40% of the worlds phosphorus supply.”

Grantham is exactly the type of visionary leader the financial world is so sorely lacking.

Jim Hanna, director of environmental impact at Starbucks spoke right after Grantham. Hanna joined Starbucks in November 2005, leading initiatives to minimize the company’s environmental footprint through green building, energy conservation, international procurement, waste minimization and collaboration with partner corporations and NGOs.

For Starbucks, climate change and the reduction of CO2 is the chief metric for sustainability progress and success. Quite simply, sustainability at Starbucks = climate mitigation, because coffee growing is critically put at risk by global climate change.

When calculating Starbucks environmental and carbon footprint, the impacts associated with growing coffee aren’t yet included in the calculations, a significant, yet acknowledged omission. Within the scope of what they do measure, 75% of Starbucks’ emissions come from store operations.

Every time I get an update on Starbucks’ progress, I feel a little less guilty about my Starbucks addiction.