Who Could Have Thought?

Yesterday, I sent around a comment on spending money on just what to remediate carbon emissions.  Today, there is a report that Bill Gates and others have spent $80 million on a technology for carbon capture.

According to Bloomberg, a Massachusetts-based startup that captures carbon dioxide directly from the air has raised $80 million from investors, including Bill Gates-led Breakthrough Energy Ventures:

Verdox has a different approach that it claims to be more efficient and therefore cheaper.  The Massachusetts Institute of Technology spinoff has developed a special type of plastic that can selectively pull out CO₂ from a mix of gas—in air or exhaust—when charged with electricity. Once trapped, a change in voltage releases the CO₂.  The startup said its material could cut the total energy used in direct air capture by 70% or more.  The startup will have to rely on low-carbon electricity to power the process.

Most other carbon capture processes use huge amounts of energy per ton of carbon captured for sequestration.

An early version of the material, developed at MIT, worked well at capturing CO₂, but it also ended up capturing oxygen.  Air is composed of 21% oxygen and only 0.04% CO₂.  But in the past year, Verdox has landed on a material that it says is 5,000 times more attractive to CO₂ than oxygen.

It will take years before Verdox can capture millions of tons of CO₂ annually, but it eventually aims to do so at $50 per ton or less.  That would be an attractive price, given carbon permits in the European Union’s Emissions Trading System have traded this year around 80 euros ($90) a ton.

Wishing and Dreaming and Acting to Reduce Global Warming

A recent issue of Newsweek featured an essay by Charles, the Prince of Wales, on the need for a global mobilization of will to remove the risk of harmful global warming from our planet.  Again, and with respect for Prince Charles’ goodwill and concern, I am struck by divergence of the high aspirations and passionate concern of climate activists from the specifics of just what to do.  Will and high ideals cannot take the place in solving problems provided by 1) biology, physics and chemistry and 2) the means and mechanics of praxis – changing real conditions with real processes.

To some extent, Prince Charles agrees with me.  His Sustainable Markets Initiative has authored the Terra Carta Roadmap for Nature which contains nearly 100 specific steps for remediation of climate change.  He writes, “Together we are working to drive trillions of dollars in support of transition across ten of the most emitting and polluting industries, including industry, agriculture, transportation, health systems and fashion.”

My question is: if markets fail to do this, how can good intentions and money get the job done?

To support my skepticism, let me note the three avenues suggested by Prince Charles to work around market failure.  First is to have industries set out “what it will take to make this transition and have strategies in place to speed up the process.”  But what if no one wants to pay for the new technology or buy the new products?  What if nobody sells the machines and processes which would reduce emissions or pollutants?  Will just giving away money produce inventions of the right machines and processes?  Who wants to give away money and not get some good in return?

Secondly, Prince Charles says private investors must finance transition efforts. As charity?  At what level of risk?  To whom should the money go?

Thirdly, the Prince says CEOs and institutional investors need clear market signals from governments – to give them confidence to invest in the long-term. Governments?  The government will buy me an electric car and pay for a charging station in the garage of my condo? Fine, but I am not going to stay awake for it.

Then, in the same issue, Newsweek runs a story about nuclear energy.  After years and years of idealist protest against nuclear power, now suddenly, when people realize that wind and solar will never provide enough electricity to power our civilization and that burning natural gas, as we do, contributes to CO2 emission, some kind of nuclear power is suddenly in vogue.

This article reveals how we can deal – actually and in fact – with global warming, one step at a time, starting with research, then building a pilot, then have innovators (2.5% of the people) buy and test out the pilot, followed by early adapters (13.5%), then early majority consumers (34%), then late majority users (3/4%) and finally, the laggards getting on board (16%).

More Short Videos on Relevant and Timely Topics

We recently posted more short videos on relevant and timely topics which I believe would be of interest to you.  They include:

Is Capitalism Rent Extraction?

Flow and the Physics of Life

Integrity in Business and Society by Klaus Leisinger

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Interesting Tidbits

Some interesting odds and ends in the news have caught my attention as still more examples of the real time/real world relevance of a moral capitalism.

Sandra Sucher, a Harvard Business School professor, has a book out on trust.  What a surprise! She finds that an intangible moral force or condition – trust – has consequences which can be measured in money.  The book was written to provide a road map “to build, improve, recover or sustain the trust of people and groups who rely on you and whom you rely on to build a thriving business.”

Is this not just another way of saying that a company cannot be profitable unless it intentionally manages its stakeholder relationships in good faith to achieve common benefits?  The Caux Round Table has been advocating that since 1986.

I ran across some cynicism about ESG investing, an accusation that if fund managers invest money that belongs to others who stand to gain or lose according to the decisions of the fund managers in less profitable companies which tout superior environmental (“E”) performance, such managers are negligent in their duty of care towards those to depend on their investment results.

With all the delays and shortcoming in supply chains, I found it ironic to read that consumer habits contribute to the problem.  It seems that across e-commerce supply chains, about 30% of purchased items are returned, while half of all clothing is sent back by dissatisfied customers.  The reverse supply has no efficiencies of scale; it is costly and inefficient.

It is reported that many products returned to Amazon have just been thrown away – a waste.

A survey of 1,000 adults revealed that 55% of online shoppers make online purchases knowing that they were likely to return at least some of the items purchased.

If customers set the values for what markets deliver up, how can we make them more prudent and less wasteful?

Speaking of customer behaviors, an article pointed out that since the start of the pandemic in the U.S., rudeness is on the rise.  Due to the pandemic and measures imposed to limit its impact, people find themselves anxious, confused and resentful.  They take out their disappointments and insecurities on others.  Social interaction, so necessary for capitalism, responsible governance and civility is now more unpleasant.  Approaching others carries new risks of being affronted and disparaged.  Who needs that, even on a good day?

A shift in the mores of capitalism towards stakeholder centricity may explain why the search criteria for CEOs have changed.  Now, companies are, more and more, looking for candidates strong in soft skills of coordinating and communicating with multiple people.  Persons more likely to be hired as a CEO are also more likely to have charisma and they score higher on getting things done and thinking strategically.

As firms rely more and more on knowledge workers, given the increased use of automation and computers, subordinates do not need to be told what to do.  Rather, they need to understand the firm’s goals and to toil together effectively.  Getting them to that kind of collaborative excellence is the job now of the CEO.  Bosses need social skills when their job is more to persuade than instruct.

In our new era of companies with a purpose and sustainable business models, CEOs must mollify politicians, respond to activists and put out – if possible – social media firestorms.

One wonders, however, if our new capitalism will reward managers more than leaders and if so, what will be the cost of not having leaders?

Deus Ex Machina – To Invent is Human

I’ve run across some recent reporting which, again, illustrates how vital technology is to improving the common good of humanity.

Here are some notes on what is in the works:

1) Small, modular nuclear reactors to generate electricity are getting support from governments. The E.U. is considering classifying nuclear energy as green energy.  President Joe Biden put $8.5 billion in his recent infrastructure program for nuclear energy.  Britain, Russia, China, Japan and South Korea all want a bigger role for nuclear energy.

2) Electric grids are planning to add gigawatts of battery storage capacity to their distribution networks.  The price of lithium-ion battery packs has fallen dramatically.

3) A professor at Arizona State University in the U.S. has developed a mechanical tree that removes CO2 from the atmosphere one thousand times more efficiently than natural trees.  The pretend trees rely on wind to blow air past resin-encrusted disks which absorb CO2.

4) The company, Footprint, sells plant-based biodegradable, compostable, recyclable, alternatives to single-use plastics.  Use of Footprint’s material has eliminated 60 million pounds of plastic.

5) Tammy Hsu has programmed microbes to mimic the way color compounds occur in nature, using sugar to enzymatically produce the same blue shade as indigo dye does.  But indigo dye is produced with formaldehyde and cyanide, which are toxic to workers making blue jean fabric and the environment.  Hsu’s dye can safely be made in factories.

6) The company, Heliogen, uses precisely positioned mirrors to concentrate sunlight to produce thermal energy up to 1000 degrees Celsius, hot enough for steel and cement production.  At present, steel and cement production uses heat that generates 10% of global greenhouse gas emissions.

7) A sister company of Heliogen takes dirt and waste materials that can store energy and makes 35-ton blocks to stack in a tower, keeping the energy intact until it is needed.

8) New markets are emerging to take and resell slightly used clothing, reducing demand for new clothes.  Most of the clothes thrown in landfills in America are good enough to be resold, if they can find a market.

Clothing manufacture and distribution account for between 2% and 8% of global carbon emissions, more than aviation or shipping.

Internet technology is reducing the friction preventing markets from redistributing clothing.  Think of the innovations brought about by Airbnb and Uber.

Technology can now quickly match sellers with buyers, making markets for used clothing liquid.  There are now online clothing resellers.  Three are publicly listed.  In 2021, the total spent on used clothing was $36 billion, more than the $30 billion spent on “fast fashion.”

Where there is capitalism, there can be real hope for improving the human condition.

Social Media: A Public “Bad”?

A recent article in the The Atlantic has made the best case I’ve read that social media is an unmeritorious (or immoral) private good and a public “bad.”  Ayad Akhtar, in an essay entitled “The Singularity is Here,” writes:

“Adhesiveness.  That’s what the technology aspires to achieve, the metric by which it self-regulates and optimizes.  The longer we stick around—on YouTube or Facebook, on Amazon, on the New York Times app—the deeper we scroll, the greater the yield of information, the more effective the influence.  We are only starting to understand just how intentional all of this is, just how engineered for maximum engagement the platforms are.  In fact, the platforms have been built and are still being optimized to keep us glued, to keep us engaged.”

He puts the invention of this demand to govern our inner selves as the service of Mammon in the seeking of profits by private enterprise:

“John Stankey, the current CEO of AT&T, was unusually clear … in 2018, as he addressed his new employees at the just-acquired HBO:

“We need hours a day,” Stankey said, referring to the time viewers spend watching HBO programs.  “It’s not hours a week and it’s not hours a month.  We need hours a day.  You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.” Continuing the theme, Stankey added: “I want more hours of engagement.  Why are more hours of engagement important?  Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising, as well as subscriptions.”

Akhtar realizes that: “or the tech to be able to tailor and deliver advertising in its various forms, it needs eyeballs.  The more of them and the longer they stay, the more adhesive the platform becomes and the more revenue it can generate.”

Akhtar adds: “In pursuit of what John Stankey called more hours a day, the technology metes out its steady stream of tiny pleasures as the reward for your sustained attention.  Touch the screen—respond to the offered stimuli like a rat in an experiment—and receive what some are now calling a dopamine rush.”

“Embedded in this scheme of endless distraction is a deeper logic.  The system has come to understand the fundamental value of always reaffirming our points of view back to us, delivering to us a world in our image, confirmation bias as the default setting.  This is the real meaning of contemporary virtuality.  In the virtual space, the technology combats and corrects our frustrations with reality itself—which defies expectation and understanding, by definition.”

I seek.  I find what I know.  I enjoy this recognition of myself.  I am trained over time to trust in a path to understanding that leads through the familiar, that leads through me.  “I” am the arbiter of what is real.  What is more real than me?

“In its basest form—and make no mistake, the baser the form, the stickier the engagement—what we’re describing here is a profound technological support for primary narcissism.  We don’t need to know our Ovid in order to understand the perils of all this self-gazing and yet, we may nevertheless fail to appreciate just how pervasive the social attitudes engendered by this orientation have become.  Self-obsession as a route to self-realization is, of course, not a new idea.”

“Merchants of attention have learned that nothing adheres us to their traps like emotion and that some emotions are stickier than others.  The new and alluring, the surpassingly cute.  The frenzied thrill at the prospect of conflict or violence.  The misfortune of others.  Perhaps most emblematically, the expression of our anger, rightful or hateful.  All of this lights up a part of our brain that will not release us from its tyranny.  Our fingertips seek it.  To say that we are addicts does not capture the magnitude of what is happening.”

“The system is built to keep us riveted, to keep that neurochemical leak of dopamine steadily coursing and it operates with a premium on efficiency, which is to say, the platforms optimize for performance based on empirical feedback.”

“The platforms that churn through content with the greatest velocity shape the emotional responses of consumers almost in real time.  Watch a video on YouTube or like a post on Facebook or Twitter and you will be offered another and another and another.  Behind the suggested offerings is a logic of emotional response.  The technology is seeking your trigger, whatever draws you deeper and keeps you clicking.”

“Self-valorizing anthems abound.  “Me” and “my” have been elevated to epistemological categories.  And the now widespread misreading of the self’s fragility as resulting not from the contingent situation of selfhood itself, but from society’s failure to protect and recognize “me.”

Akhtar rightly perceives that putting my self-valorizing under threat and stress gets my attention. “Nothing quite does it like outrage.  Moral outrage.  Those we know are right to hate; those we love because we are united together against those we know are right to hate.”

“… And the logic of the increasingly truculent divide between right and left in America today. Driven by engagement and the profit that it generates, each side drifts further and further from the other, the space between us growing only more charged, only richer with opportunity for monetization.  The cultural clash in America today has more electrical engineering behind it than we realize.”

Akhtar’s insightful realism reminds me of Shakespeare’s not-dissimilar cynicism about our kind:

“When we are born, we cry that we are come to this great stage of fools.”

If we are not to be sheep, born to be herded and shorn by the lords of tech who feed themselves off us, what must we do?

We at the Caux Round Table have proposed a code of ethics for social media by which we each, on our own, take charge of our destinies.

Zoom Round Table 2.0 with Klaus Leisinger

The Caux Round Table has recently published Klaus Leisinger‘s new book, Integrity in Business and Society, because it is an excellent, one-stop shop for learning about the praxis of ethics.

Norms – good and bad – can be found, created and debated, to be sure, but can they be lived just as easily?

Klaus, an experienced business executive and wise counselor, will join us again by Zoom to discuss these and other practical questions at 9:00 am (CST) on Thursday, January 20 and you are invited to join us.

To register, please click here.

The event is free and will last about an hour.

In addition to being able to access the event through Eventbrite, we will also email you the Zoom link directly the day before the event.

A Japanese Approach to Moral Capitalism

I recently read a short book by Kengo Sakurada, President and CEO of SOMPO Holdings, titled Bushido Capitalism: The Code to Redefine Business for a Sustainable Future.

Sakurada takes the ethic of Bushido, the way of service as a Samurai, as interpreted by Inazo Nitobe.  Nitobe wrote his book, Bushido: The Soul of Japan, in English for publication in New York in 1899.

I was taken by Sakurada’s recommendation of this virtue ethic for business because another Japanese business leader, Ryuzaburo Kaku, then CEO of Canon, contributed his Japanese ethic of kyosei to the Caux Round Table Principles for Business, the basis for a moral capitalism.

The experience of the Japanese over the centuries in articulating a balance between individual mindfulness – Zen – with participation in natural environments and community – Shinto – has given their culture insights into living well through virtue ethics.

The Bushido code has 7 principles, each of which Sakurada applies to business to enhance both its profitability and its sustainability.

The first principle is justice – achieving success through assuming responsibility.  Self-seeking narcissism won’t work.  Decisions must be supported by reasoned consideration and be in the interest of the many.

The second principle is courage.  Courage is needed to constantly ask questions, scrutinize everything high and low, near and far and be ready to leave the status quo behind.

The third principle is a duty of care.  Empathy, compassion, even a tenderness towards others, keeps them within the compass of our lives.  This principle is to acknowledge our emotions and not suppress them.

The fourth principle is politeness.  This should be a natural, free-flowing, outward manifestation of a sympathetic regard for the feelings of others.  Sakurada advises that respect should never be conditioned on selfish benefit.

The fifth principle is veracity.  This requires never exaggerating or underplaying your skills and being brave enough to admit mistakes and acknowledge your limits.

The sixth principle is honor.  Honor comes to us when we act as if we deserve to be honored and esteemed by others.  How you think of yourself in providing service and meeting your responsibilities rebounds in how others do or do not show you honor.

The seventh principle is loyalty.  Loyalty is commitment; accepting a vocation or higher calling which makes demands on you and tests your selflessness.  The virtue of loyalty enhances one’s ability to work with stakeholders.

In thinking about these virtues, I am reminded of the sensibility of the American poet, Robert Frost.  In his poem, “Stopping by Woods on a Snowy Evening,” he was evocative of a life worth one’s commitment to excellence:

Whose woods these are I think I know.
His house is in the village though;
He will not see me stopping here
To watch his woods fill up with snow.

My little horse must think it queer
To stop without a farmhouse near
Between the woods and frozen lake
The darkest evening of the year.

He gives his harness bells a shake
To ask if there is some mistake.
The only other sound’s the sweep
Of easy wind and downy flake.

The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.