Last week, I got another call from the Census Bureau.  What I’m told is that revisions to NAICS are being researched by several agencies.  As I was talking, I recalled many other interesting links that can help people understand the already huge size of the “ecosystems sector”.  I’ve included them at this end of this post.

My point in all this is that taking care of the health of ecosystems is already so big that it should be included at the highest level of the NAICS system.  If the Federal government will make this change to the system, it will have a significant impact on the economy because the NAICS category system is used so broadly in everything from job listing sites to investment indexes, and simply seeing that the “ecosystem sector” is top-tier in NAICS will reframe the global dialogue about economy and ecology.

Here are some examples of infrastructure-scale projects that rely on the health of ecosystems for their economic function:

• The restoration of the Catskills watershed that provide drinking water to New York City allowed the city to save billions of dollars compared to expanding their mechanical water treatment system: http://www.epa.gov/Region2/water/nycshed/protprs.htm
• Many huge water-related ecosystem projects like the multi-billion dollar ecological restoration of the Everglades water system in Florida are listed at http://dels.nas.edu/water/eco_restor.php

Environmental Business Journal has a wealth of reports on US and global economic activity in this space: http://environmental-industry.com/

The website Ecosystem Marketplace documents how globally, ecosystem markets and incentives are increasing rapidly to help grow this new ecological economy: http://ecosystemmarketplace.com

The “Rise Report” published in 2003 showed that over $2.6 billion was invested in “double bottom line” Private Equity strategies focused on environmental and/or social benefits: http://www.riseproject.org/uzrise_capmkt_rpt_03.pdf.  This number has grown considerably since then.  The latest “green” private investment figures are available from http://cleantech.com

Kiva’s success points to new opportunities to expand social equity and capital parity. On the shoulder’s of Kiva’s success, we can reach some profound new heights for people and the planet.

As you know, I’m pretty focused on growing the green economy. So, I study every funding strategy. Unfortunately, Kiva was not designed to grow the green economy, in the U.S. or elsewhere. In fact, when I last looked, they don’t even have a category for green business, even though this is a rapidly expanding field in many developing nations.

Expanding on Kiva’s Model to Grow the Green Economy

The core feature of Kiva is that donors put money into the system to benefit entrepreneurs. This is a huge breakthrough in conciousness. Before Kiva, most people felt that you should donate money to charities, but you should only “invest” in businesses. This old, default cultural philosophy has really limited the amount of good we can accomplish in the world as a society.

Soon, I’m told, Kiva will add a new program allowing donors to support loans to U.S. entrepreneurs. Here’s where I’m really wanting to see some expansion in our thinking as donors. The news is that Kiva will lend up to $10,000 per U.S. entrepreneur. Truth be told, there are very few green businesses that can really scale up inside the U.S. economy and impact the health of the biosphere with just $10,000 in seed capital. That won’t really even get a startup to first base in a first-world country.

Here’s where EcoSector comes in. We’ve created a gift system that allows the general public to donate a $1 or whatever amount they like into EcoSector’s “launch system”. This money is then used to pay the costs required to get a green business through their first “real” capital round. The fact is, what with securities attorneys and other essential services, it can cost an entrepreneur anywhere from $20,000 to $100,000 to raise their first meaningful round of capital. In today’s default capital system, this seed capital bottleneck is keeping 499 eco-solution companies from succeeding for every one that threads the needle. That means real solutions to our most urgent eco-challenges aren’t getting done.

Don’t take my word for it. This gap is real. Here’s a slideshow put together by a big venture capital firm that tells the same story from their point of view.

While you’re at it, I hope you’ll check out the video above that lays out EcoSector’s launch system in a fun and enjoyable way, or you can see click straight to it on YouTube to learn How to Launch 1000 Eco-Solution Companies by 2016.

I mean, I’ve been a tree-hugger for decades, and I’m still shocked that even the most obvious green products still aren’t universally available.  That really bugs me!  Who’s in charge here?

Anyway, if you care about the environment like me, I think you’ll enjoy this short video called A Humorous Journey to Environmental Responsibility.  It offers some new perspective on these nagging questions, and even a few laughs (I hope!).  

Cheers,
Mark

My motto is “Think like an ecosystem”.  How can this idea relate to the economy?

Growth has two key aspects – sheer volume of growth, and annual percentage growth.  Take a forest, for example. Big trees add a lot of volume each year, but they have a slower annual percentage growth compared to small trees which have a greater annual percentage growth rate, yet each tree individually adds relatively small amounts of volume per year.

In the economy, streamlining big old-line companies can have a big impact on the economy – but there’s a catch to focusing on just the big fish.  In the economy, the biggest companies tend to be the slowest to respond to changing values in society.  If we look at the 1990’s, the highest growth companies, both in percentage and volume, came from tech sector firms that were teaching society whole new ways to get things done.

Today, the green economy represents similarly huge shift in how to meet our needs and desires. The explosive growth of organic foods is just the tip of the iceberg. While greening up old-line companies can have a substantial positive impact, there are thousands of small pioneering companies that are on the cutting edge of the green value-driven economy who play a catalytic role – fostering economic shifts and growth far beyond their own bottom line.  Like the tech companies of the 1990’s, these new-era green companies are changing society’s core values, and providing new goods and services. As entrepreneurship guru Guy Kawasaki says, “Create meaning!”  Today’s green companies have a huge global advantage when it comes to that, and that advantage can translate into growth for the U.S. economy.

Any gardener knows that some basic things are essential for success – good seeds, good soil, sunlight, and water.  Likewise, EcoSector is providing the green economy a new framework for supporting all emerging green companies.  We look at the common needs of green entrepreneurs and seek to meet these needs via a community-driven approach.  Individual members and expert associates of the EcoSector community provide the basic essentials to these companies:  good advice, good strategies, good systems for success, and “water” via membership gifts to the EcoSector Industry Association.

During the 1990’s the tech sector had many soup-to-nuts “launch shops” for tech companies, especially in Silicon Valley that provided similar types of support for tech entrepreneurs. Today, the number of green startups is astounding.  EcoSector is one of the first start-up shops for the green economy, and we bring a new twist to the old model. The green sector is actually too big to be served only by the methods that worked in the 1990’s. By adding a community-based approach, EcoSector aims to foster a broad base of environmental-economic leaders who can launch scores of green companies that in turn will help green up and grow America’s economy city by city, state by state, and region by region.

This may seem trivial, but it has widespread impacts on the way vast numbers of people think and spend money. For example, since “Environmental Health” is not a top-tier industry category in the U.S. Government’s system, this same ommission gets spread throughout job sites, investment services, news media coverage, etc.  It’s as if our industry doesn’t exist.  In the economy, lack of attention equals lack of money, and the result is that spending and investment dollars don’t get directed into the green economy at the level needed to address our global eco-challenges.

Now there’s something you can do about it!

The other day, I got an email from the Chief of the Economic Classifications Development Branch, Bureau of the Census, informing me that the department is now accepting public comments about proposed changes to the NAICS category system.

The dealine for comments is April 7, 2009. To comment, go to the U.S. Government’s official comment site for the NAICS revision process and press the “Add Comments” button. From this web page, you can also download a PDF that describes the NAICS revision process in more detail, along with the email, fax, and phone for Mr. John Murpy, Chair of the Economic Classification Policy Committee.

Here’s what I wrote:

Dear Mr. Murphy,

I would like to request that you add a top-tier category for “Ecosystem Health Care and Assistance” in your upcoming revision to the “North American Industry Classification System” (NAICS).

This would reflect the importance of healthy ecosystems to the health of people and begin to recognize the economically valuable activities of millions of Americans working in the Eco-Sector toward these objectives.

I posted a article on this subject at http://ecosector.com/blog/?p=31 that describes my reasoning in more detail.

Thank you for your kind consideration.

Mark Winstein
Founder
EcoSector Industry Association
208-596-6500

The department reviews and proposes changes once every five years.  I’m not exactly optimistic we can make these changes this time around – I think it will take growth of the EcoSector Industry Association to accomplish a sea change like this.  However, with your help, we can at least get this idea planted and then water it so that we can eventually complete this much needed structural transformation of our economy.

Mark Winstein

The creation of a Department of Ecosystems will offer many benefits. It will:

• Promote and symbolize society’s recognition of the importance of ecosystems to peoples’ lives and health, and our role in assuring their vitality.
• Increase and solidify access to the President for our nation’s top environmental official.
• Improve intra- and inter-governmental relations.
• Enhance international relations.

Promoting the Importance of Ecosystems

Our society and our government invest greatly in many important large-scale systems, including highways, agriculture, telecommunications, etc. By comparison, we pay very little attention to the health of our ecosystems, systems on which all life depends.  That the U.S. government has Departments of Transportation, Interior, Agriculture, etc., but no Department of Ecosystems illustrates society’s gap in its commitment to ecosystems compared to other interests.

Protecting public health and the environment by assuring the vitality of ecosystems is a mission of at least equal importance to the missions of other cabinet-level departments. Recognizing this, and undertaking a serious commitment to ecosystems will create a fundamental shift in our society and our economy.

Imagine a world where we recognize the inter-relationship between all things, and support the healthy functioning of our planet’s life support systems. Picture a society that fulfills its needs for technology, energy, and industry in a way that balances all of our needs and the needs of all living things.

Increasing Access to the President

While some past Presidents have awarded their EPA administrators “cabinet rank,” this status is up to each individual President. The creation of a Department of Ecosystems, with a Secretary, Assistant Secretary, and Undersecretaries will officially establish the important role of environmental officials, and guarantee a Cabinet seat for ecosystem concerns. The Secretary would report directly to and function as an important advisor to the President.

Improving Intra- and Inter-Governmental Relationships

Cabinet-level status would strengthen the role of environmental officials when dealing with the Secretaries of federal departments and other governmental agencies. In contrast to the federal government, most states place their own top environmental official in the governor’s cabinet. A Secretary of Ecosystems would be in an excellent position to work with the environmental officials of each of the 50 states.

Enhancing International Relations

A June 2001 study by the Congressional Research Service found that, of 198 governments, all but 9 place their environmental responsibilities at the ministerial level. All major industrialized nations, with the exception of the United States, have top environmental officials of ministerial status.

Promoting healthy ecosystems and protecting public health and the environment increasingly involves negotiations with foreign nations. Creating a Department of Ecosystems will allow our nation’s top environmental official to interact with other nations as do other Cabinet Secretaries, such as the Secretary of State and the Secretary of Defense.

Existing Support

There already exists a high level of support for the creation a cabinet-level Department focused on the environment. Most of the political enthusiasm for this initiative exists in the form of support for elevating the Environmental Protection Agency to cabinet-level status, thereby creating the Department of Environment Protection.

According to a September 2001 report from the Congressional Research Service, the Bush Administration supported H.R. 2438, one of three Congressional bills to elevate the EPA.

At a Senate hearing in September 2001, such notable figures as EPA Administrator Christine Todd Whitman, Senator Barbara Boxer, Representative Sherwood Boehlert, former EPA Administrators Carol Browner and William Reilly, and former EPA General Counsel E. Donald Elliott testified in support of elevating the EPA to Cabinet status.

EcoSector supports elevating the EPA to Cabinet level, and proposes that the new entity be named “Department of Ecosystems” rather that “Department of Environmental Protection,” because the context of the words “environmental protection” suggests that we, as people, are separate from the environment and need to protect it. By comparison, the paradigm of “ecosystems” recognizes that people, along with all creatures, are part of the ecosystems that make up our planet, and thereby inter-related to all creatures.

Ultimately, our goal is to expand the frame of reference through which our society views its relationship to the world from one of separation to one of coexistence and mutual benefit.

• What are the social benefits?
• What are the environmental benefits?
• What is the financial Return on Investment (ROI)?

The first Socially Responsible Investment (SRI) funds avoided companies that made cigarettes, supplied the military, or did business in South Africa. This new approach was called “negative screening”. Later on, SRI investment companies started including environmental screens.

The next logical step beyond negative screens is to assess the proactive “good” being accomplished by the company in which one is investing. What result is the company being responsible for?

Some green investors suggest selecting companies that will “make a lot of money” against the backdrop of climate change or other major issues. While this is a first step, something more is needed. I propose a new approach called the “Ecology Benefit Index”.

What makes an investment ecological? The starting point is to focus on ecosystems. To me, the biosphere as a holistic living unit, comprised of subsystems like air, water, land, and energy. For each subsystem, I want to know:

1. What are the indicators of health for that system?
2. What are the specific challenges facing that system?
3. And what are the clear and measurable goals that we would want to attain to assure the health of that system?

Science has advanced to the point where today, an investment can be rated according to such an “Ecology Benefit Index”. This index can then be used to help investors select companies that can most directly and effectively help protect, restore, and enhance the vitality of people and the biosphere.

Originally posted at GreenOptions.com

The hot buzz-words “clean-tech” and “green-tech” have been on my mind lately. Nothing wrong with either — I like “clean”, I like “green”, and I even like “tech”. While the economic growth associated with these words is exciting, let’s take a moment to recognize the limitations of the underlying philosophical concepts these words describe.

A Public Profile posted by Pangaea Ecological Solutions over the weekend neatly says what I’ve been thinking, so I’d like to showcase a snippet of their listing…

“We use ecology, not technological products to meet the demands of human living systems. This means we are committed to treating ourselves as part of the ecosystem. Our “product” is the natural world, and has been proven for billions of years!”

Pangaea is pointing at something fundamental as we consider the future of society and the economy. “Tech” implies the continued heavy involvement of human effort, where “ecology” as used here implies allowing nature to do more and more of the work for us. As a result, ecological approaches can be even better for the economy and even more effective in accomplishing goals than technology-based solutions for today’s mega challenges.

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