Changing the Tides of America’s Companies with Eco-Entrepreneur Jeffrey Hollender
July 1, 2013
JOHN SHEGERIAN: Welcome to Green is Good, and we’re so excited today and honored to have our good friend Jeffrey Hollender on. He’s the co-founder, former CEO of Seventh Generation. He’s one of the leading people on corporate responsibility, sustainability, and social equity, and he also teaches at my alma mater, NYU. Welcome back to Green is Good, Jeffrey Hollender. JEFFREY HOLLENDER: Happy to be here. JOHN SHEGERIAN: Hey, Jeffrey. You are one of the truly pioneers and thought leaders in the sustainability revolution. It’s so great to have you back because there are so many topics you get to speak on and touch on, and so we’re going to just have fun today because you’re involved with so many great things on sustainability-wise. Share a little bit about where we are today in 2013. Are you optimistic when you wake up, or are you pessimistic? JEFFREY HOLLENDER: Well, I tend to be optimistic despite the fact that the situation and the facts would certainly challenge that optimism. But, you know, I think to do the work that we do, we always have to stay focused on the possibilities and not get overwhelmed by the challenges and negative information that surrounds us. JOHN SHEGERIAN: You know, that’s so true. As a shameless plug here, Jeffrey, I’m not only a friend of what you do, but I’m also a huge fan, and you’ve been so inspirational to me. There’s not a soap in my house right now, whether it’s our dishwasher, whether it’s our laundry, that’s not Seventh Generation. You were truly one of the great pioneers creating brands that can change lives household by household as America is now becoming more ingrained with regards to cultural and DNA sustainability and stuff like that, so I thank you for all you’ve done in your creation of Seventh Generation and how that’s moved the needle already. But talk a little bit about, you know, the stock market this morning is over 15,000 again, we’re hitting new highs. Some people are doing really well as the new normal in theory is thriving, but there’s still an underlying toughness that’s going on. There’s still an underbelly to the economy and these people that we’re leaving behind. Explain the disparity and the paradox that exists in America, and how that’s affecting where we’re going as a country. JEFFREY HOLLENDER: Yeah, it’s a very challenging and quite upsetting situation because there are a handful of people that are doing very well, and that’s not just the wealthiest 10%, but is really the wealthiest 1% and 0.1%. You do see that segment of our society continuing to accumulate massive amounts of wealth, but the challenge we face is that that wealth is spread increasingly unevenly. We are a country that, unlike almost the rest of the developed world, has a greater disparity between the rich and the poor. We’ve got two million children that are homeless, we’ve got 50 or 60 million people living in poverty, and all of the economic gains that really come from things like the rise of the stock market are not and never were trickling down to those that really need that most. That’s because we’ve designed the economy, unfortunately, in a way that continues to concentrate and accumulate wealth in the hands of a small number of people. JOHN SHEGERIAN: You know, on 60 Minutes and some other of these shows, I’ve seen these stories on large corporations, brands that we all know that are iconic brands in the United States, setting up offices or setting up some form of tax shelters in Ireland and other countries. How is that even possible, given where we are as a country and the fact that we need more taxes to support the infrastructure of this country and reinvent ourselves? What’s going on in that kind of crazy disparity? JEFFREY HOLLENDER: Yep. I mean, unfortunately, corporate tax payments, as a share of profits, are at the lowest level they’ve been in 40 years, and we have more than cut down by 75% the amount of money that large corporations contribute to our economy through taxes. What we’ve done is we’ve created a very elaborate system for large companies to avoid taxes. I’ll give you a stark example. Companies like General Electric, which is one of the biggest companies we have globally, have paid an average of less than 5% in taxes for the last five years. Even Starbucks – you know, I go to Starbucks. I like many of the things they do, but in England, where they’ve been doing business for a decade, they haven’t paid a dime of taxes, and they are able to legally avoid those taxes by shifting the profits they make into countries that have no or very low tax rates. So, they siphon off all the profits in England, and transfer those profits through complicated legal means to countries like Belgium or Switzerland, where the tax rate is much lower. I think this is immoral, but unfortunately not criminal. Here these companies are utilizing our education system, they’re utilizing our highways, they’re utilizing our police force and our firefighters, and they’re not contributing. Those contributions are being made by our citizens, and in many cases, citizens who really can’t afford to pay those taxes. JOHN SHEGERIAN: That’s so well put. For our listeners out there who are not familiar with your history, I don’t want to shortchange that. Jeffrey, you’re truly one of the great entrepreneurial pioneers, but also one of the great — how do I say this right? — leaders of the sustainability movement with the creation of ASBC. Before we go into anything more right now, I want you to give our listeners a little thumbnail sketch of what you created at Seventh Generation. What a great company you did. It’s become part of our vernacular and lexicon now, this term “conscious capitalist,” but you were truly one of the original pioneers of conscious capitalism. What you did at Seventh Generation and how you also co-founded the ASBC and what you’re doing now. Can you share a little bit of that history? JEFFREY HOLLENDER: Sure. I mean, in some ways, I feel like my whole history is really about doing what we used to understand in this country as the right thing and the just thing and the equitable thing, rather than what’s necessarily legal. Seventh Generation, for all of its great products, was really about creating a new model of business and really proving that business can do the right thing by its customers, by its community stakeholders, as well as its investors. We instituted things like salary caps. I mean, in large companies today, the CEO is often making 500 times what the lowest paid person is doing. We limited that to 17:1, and in my new business, which we’ll talk about later, I’ve lowered it to 10:1. We’re very proud to make every single one of our employees owners of the company by transferring 1% of the ownership of the company to our employees every year, so a lot of what we did was about using capitalism in a different way. You know, capitalism is not one monolithic economic structure. It can be practiced in a whole variety of ways, and what we’re facing today in the United States is the practice of capitalism that is really harmful and destructive to the citizens of the country, as well as to our environment and, in many cases, the rest of the world. ASBC, the American Sustainable Business Council, which I founded with David Levine three years go, is really an attempt to rally those conscious responsible businesses to get involved in public policy because public policy is the framework and the structure that has allowed many of these terrible things to happen. So, today ASBC has over 200,000 small and medium-sized business members who are fighting for things like making sure that we don’t lose the rights to healthcare that we so recently won, fighting for a higher minimum wage. I mean, it’s ridiculous that in this country, if you make the minimum wage, you’re living in poverty. What is the point of defining a minimum wage, that if paid individuals, ensures that they live with their families in poverty? We’re also fighting for safer chemicals and making sure that chemicals, which are poorly regulated today, are better regulated, so that people can trust that the products they purchase are going to be safe for them and their families. JOHN SHEGERIAN: And, this is what makes you great. You said at the top of the show, you don’t get to do all this great work without a greater sense of optimism, no matter how bad the news is around us. So, talk a little bit about some of your favorite companies, other companies besides the great Seventh Generation, which again – shameless plug – for those listeners out there that haven’t had the opportunity to enjoy their great products, go to a store that carries Seventh Generation and buy just one or two and try it in your household. It will change the way that you do business in your own house, and it’s so important because as Jeffery pointed out in the last show that he was on, we’re using stuff in our house that has chemicals that have never been tested and that could be very potentially harmful to your family and to the environment at large. For our listeners who just joined us, we’re on with Seventh Generation founder Jeffrey Hollender. You can read more about what Jeffrey’s up to, some amazing things at www.jeffreyhollender.com. Jeffrey, talk a little bit about some of your favorite companies, some of the brands out there that are getting it right, that are doing the right thing. Although they’re successful and making a ton of dough, they’re doing the right thing with regards to their greater role in the economy, in the environment, and the world at large. JEFFREY HOLLENDER: Yep. For many years, those favored companies tended to be smaller businesses or medium-sized businesses like Patagonia, Organic Valley. What we’re seeing today that is really encouraging is that we have some very large multinational companies. Two of my favorites are Unilever and a company called Kingfisher, which is the largest home improvement chain in Europe, like our Home Depot and Lowe’s. We have companies like Unilever that have made a commitment over the next decade to improve the lives of a billion people, to cut their footprint, their environmental and social footprint on the planet, in half, and to ensure that 100% of the agricultural products they purchase are sustainably produced. Kingfisher has even gone a step further. They have developed a concept called net positive. They reject the notion that by reducing our negative impact on the world, that is good enough. What they want to do is they want to have a net positive impact. They don’t want to just reduce CO2 emissions, but they want to ensure that every house they do business with is generating its own power with zero CO2 emissions. They don’t want to just use sustainably harvested lumber, but they want to rebuild and replant all of our forests that have been decayed. So, that is inspiring. It’s really inspiring to me when a very large company embraces this type of philosophy because it really says that there’s no excuse for other large companies not to be doing the same thing. JOHN SHEGERIAN: I get what you mean, and that makes a lot of sense. You know, great folks like you that are ultra-creative and have tons of energy are typically serial entrepreneurs. You created Seventh Generation, you’ve co-founded the ASBC, which every year is getting bigger, stronger, and doing better things. Talk a little bit about your next venture, you know, the post-Seventh Generation, post-which is ongoing ASBC life, talk about what your next entrepreneurial venture looks like and what you’re dreaming up right now. JEFFREY HOLLENDER: Sure. Well, again, I wanted to create a model of this net positive company, so I wanted to create a business that wasn’t less bad, but was truly restorative and helps repair the world and the people that live here. So, we’re launching a new company called Sustain. It will be the first fair trade sustainable condom company in the United States, and we are ensuring that throughout the supply chain, unfortunately, latex, which is sort of tapped like maple sugar from trees and then turned into rubber, there are children working in almost every rubber plantation all over the world. Children that aren’t going to school, that aren’t getting the healthcare they need, so fair trade is just critical and foundational in terms of starting this supply chain. We also are using a plantation that is FSC certified, so we know that plantation is managed in a sustainable way. We then have revised the manufacturing process. Unfortunately, though it’s hard to believe, condoms are made in a way that produces carcinogenic chemicals, and we have redesigned that manufacturing process to minimize those chemicals and to ensure there are no detectable toxins in any of our products. We’re also launching a new initiative. I’m doing this with my daughter, Meika, who’s just graduating from business school, and my wife, Sheila. We’re launching something called 10%4Women, where 10% of our profits and the profits of other companies who join with us will go to help low-income women who don’t have the care they need from a reproductive healthcare perspective. So, it’s going to be a great product. It’s going to be a better condom for better sex and a better world. JOHN SHEGERIAN: Now, help me here. So, a portion of Sustain’s profits are going to go to 10%4Women? JEFFREY HOLLENDER: Yes, we will take 10% of our profits every year and invest them in this new organization that will initially focus on very low-income women in the southern part of the United States, where there’s the highest rates of venereal disease, the highest rates of child pregnancy. You would think they were living in a developing country rather than a developed country. JOHN SHEGERIAN: That is so great. So, Meika and Sheila are going to be running 10%4Women? JEFFREY HOLLENDER: Well, they’re going to be doing more than that. They’re going to be full partners with me in Sustain as well, and Meika will be the spokesperson for the new brand. JOHN SHEGERIAN: That is awesome. This is just great news. This is really taking everything you’ve ever done in terms of entrepreneurial genius, breaking through, you know, creating new paradigms, but also interrelating it with both social good and also creating more jobs and becoming part of the new economy on every level. This is fascinating. So, when does Sustain launch, and where can listeners buy it? JEFFREY HOLLENDER: Well, we’ll have a website up by the end of the year so people can buy online, and we’ll be shipping product to stores all over the United States by the end of the year. JOHN SHEGERIAN: We’re down to two-and-a-half minutes, and of course I want to spend another 20 with you. We’re going to have you back on, of course, when this launches, and we’re going to have your wife and daughter on with you, because this really needs a greater platform and a longer time on Green is Good to talk about this. We have to have you all back, and we’ll do a whole hour with you next time. When does 10%4Women launch? JEFFREY HOLLENDER: Well, it will be launching the same time as the brand does, so it will probably be up and running next year. JOHN SHEGERIAN: OK, so when you start making phone calls again, and you’re staring almost from scratch again, almost like the first day when you started Seventh Generation and now you’re starting Sustain. You’re calling people, and now this time you’re saying, “I’ve got a new product I’ve created. I’ve got a condom.” What do people say? What does the other side of the line look like, feel like? JEFFREY HOLLENDER: Well, you know, I mean, I must say, even though I’ve been incredibly successful and have made a lot of people money, it’s still hard to raise capital for a startup. It’s one thing for people to invest in an already successful business, but the first thing you have to do is you have to convince investors that not only do you have an incredible, impactful, and important social mission, but they’re also going to make money on their investment. So, I’m deep in the midst of raising that money. I’m about halfway done. I hope to be done by the end of the month, but this is one of the real challenges. You know, I’m lucky because I’m older and I’ve established a pretty good network of people that I know, but it is really challenging for younger people to raise the capital for their own businesses. Again, one of the things that ASBC fought so hard for, which is this crowdfunding platform, I think will be transformative for helping younger people, particularly, start new green businesses because they will have access to capital in a way that I never did. JOHN SHEGERIAN: You’re absolutely right, and unfortunately, we’re at the end here today, but this is not the end. This is a dialogue that we’re going to continue and towards the end of the year, I want to have you and your wife and your daughter back on to talk about Sustain and also 10%4Women and the launch and just the whole mission. Have all three of you on with us, and we’ll spend the whole hour that day with all of you explaining the whole package, because that’s just such a great model, your wife and daughter. This is a family affair. And for all of you out there, go to Jeffery’s website, jeffreyhollender.com. Learn more about the great things he’s up to. Jeffrey Hollender, I’m honored to have you on. You’re the pioneer of conscious capitalism and an inspirational thought leader, and truly living proof that green is good.