(clicking) (fun piano music) (exciting instrumental music) (soft, slow instrumental music) - A brain is active all the time trying to infer things about the world. What is this world? What is going on here? It's using relevant cues,
but also irrelevant cues. And once it gets these cues it use them to interpret the world. Our perception of value is
dramatically subjective. It comes from lots of
things from the environment. Neoclassical economics
has a very simple answer; something's value is whatever people are willing to pay for it. But the deeper question of what value is is much more complex. One of the experiments
we did on the purchases was to sell people coffee. We had the regular condiments: milk and sugar and cream and so on. But we also had these six
condiments that nobody ever uses: lemon peel and cardamom
and stuff like that. Sometimes we'd put these
condiments in beautiful metal and glass containers with
the little spoon and so on. And sometimes they were in styrofoam cups kind of torn, we wrote in a
felt-tip pen; really ugly. Now the question is do these
things that were on the side that nobody ever use
influence the perception of how good the coffee was? The answer was absolutely yes. They also influence how much
people are willing to pay. They're willing to pay
about twice as much. (cork popping) (fizzing) I have a friend who is a expert in wine. We continuously have this discussion about what's the right way to
figure out the value of wine? If you do blind tasting of wine, you taste the wine, you
have no idea about it, it turns out the correlation
between price and quality is basically zero. More expensive wine is not
perceived as better quality than cheaper wine. When you know the price, now it does have a positive correlation because your expectation that this wine is going to get better actually changes the way you experience it, and, therefore, change the value. So it's actually very
difficult to think about what is the value of something. (upbeat piano music) - We fight a lot about the role of profit and its primacy in business. Profit's a healthy thing. Profit is a metric of sustainability. Without being profitable
you don't get to be here. But there has also arisen this
false equality around profit. Couple of years ago a couple
of Harvard business school professors wrote an article
called Creating Shared Value. What they said was there's
a new way of thinking about how businesses can serve. Philanthropy is the old way. Philanthropy is sharing wealth
that's already been created. But a better way is to
create wealth by serving. So in creating shared
value you then have to say, well, that's interesting
because now we're gonna create a profitable business that does good. They coined a phrase that I just love. They said, "All profits
are not created equal. "Those that carry a social
benefit are better." So let's stop arguing about this. Because if you're an investor, why wouldn't you invest
in a company that returns adequate reward to you,
but also does good? If you're a government, why wouldn't you favor those businesses? Why wouldn't you look for
businesses that do good in addition to making a profit? And then, here's the rub,
if you're a business leader and you're competing for capital, why wouldn't you choose a
business model that does good in addition to rewarding shareholders? Because you yourself will be rewarded. So now all of a sudden we've changed the incentives completely. All profits are not created equal, let's be honest about that. Those that carry a social
benefit are better. (machine clicking) (light piano music) - NAFTA was the wake-up call. NAFTA was the epiphany. NAFTA not only destroyed my personal life, destroyed my business. I was making a six figure salary. I was driving a BMW. I had a nice home. I had a great wife. I had lived the country club membership. I played golf on weekends; it just destroyed
everything that they told us in business school, everything that I felt like I was on the path to do,
the people I was associated, the direction I was going. I was a pretty hardcore
Republican in those days. I was living, i was in
just kind of that matrix. I was living in this world
that, hey, it all seemed great and NAFTA was that kind of breaking point; maybe this path's not
the path I need to be on. (contemplative piano music) We're a t-shirt printer. We're a custom wholesale t-shirt printer. Here in NC was a big textile hub, and I had lots of friends
and a lot of companies that either made that venture overseas or they went out of business. But we did not want to do that. We just felt, even in the mid-90s, there was something wrong
with this scenario that, yeah, we're gonna outsource
to make more money here, but then we're gonna sell our product to a person we just laid off. It just didn't really
make much sense to us. Mid-90s we changed the
mission of TS Designs: We want to be a successful company while looking after our people,
the planet, and profits. Everything we do, every decision we make, every product we buy has
to ask what's the impact? Not only to the bottom line, what it's gonna cost the company, but what's gonna be the impact
to the planet and the people? We felt like it's important
not only to talk about this stuff, but demonstrate; to step out there and do these things. So we're in a little industrial park here. Put our first tracking array. Golly, that thing's 12
years old, 13 years old. Never forget when we first put it up, I mean, that was the second
one in Alamance county, the biggest one in Alamance county. A lot of people thought it was
some type of satellite dish. You know, what kind of TV station you gonna pick up on that thing? (machine clanking) I like to describe sustainability being a journey, not a destination. And I'll be on that
journey till the day I die. We got wind and we got
solar and we got biofuels. We've got chickens, and we've got gardens, and we've got bees. People say, "How in the
heck can you do that "as a small business owner?" What I've come to find
out is once people realize that you have a care for business beyond just maximizing your personal bottom line, then they want to support you. But a lot of times people you're trying to extract
information to benefit yourself. Once people realize you're
trying to do something beyond just yourself, they wanna help. That's one thing that
we really lost focus on the last 20 or 30 years. We wanna kind of pick out one piece and really maximize the efficiency of it, but we don't realize the
impact that we're having `to other parts of the system. So it's reconnecting those dots, and that's exactly what we're
trying to do at TS Designs and be an example of a business
that wants to reconnect and be a part of this local
living system that we deal in. We got an early wake up call. You know, we could have
fought and resisted to not go that direction, but NAFTA allowed us to
make that transition. So we've been on this journey a lot longer than most people have. (exciting instrumental music) - Things happen to change
how people value things. Often what we try to do is we
are in one state of the world, and we're trying to predict
how we would feel about life if we were in a different
state of the world. We have a very hard time doing it, so we say, oh, how would life look like if I married this person? Or how would life look like
if I bought this house? Or bought this car? Or moved to California? Whatever it is, and we often
have all kinds of perception and beliefs about how life would be, but then life changes and then we don't become the same people. - Having children, and it's
probably true for many parents, is when you start to really thing about, well, I want my baby to grow up healthy; how am I going to do that? It was then that I became
much more conscious about knowing where food comes from and how badly, unfortunately,
the United States is doing in terms of letting us all know where our food comes from, labeling whether or not it's got a genetic modification in it, having it be a monoculture
that could in fact collapse. (birds chirping) So it's still cool
season here in Asheville and a good time to plant beets and chard. This is the Chioggia
beet, which is a wonderful heirloom seed. It's a beautiful beet that grows, here we go,
(seeds rattling) into beautiful globes of rings of color. The beet on the inside
is both red and white, so it makes for a beautiful salad. I'm planting this between
some other things, and it's not very hard to do, so... I generally speaking
don't plant things in rows just because I don't like rows. That sometimes make it hard to find them again (chuckling). (moving piano music) When I started the company
I wanted to, essentially, in a small way create the
world I wanted to live in, and that would not be
terribly hierarchical or authoritarian. I wanted people who worked
for Sow True Seed to have a sense that their jobs were important and a certain empowerment
to make those jobs better. We were gung ho on finding the seeds and connecting with
farmers and growing seed and doing the kind of evangelical things that we wanted to do. However, we didn't have a business plan. I didn't know that P and
L meant profit and loss. I learned a great deal about the necessity of making a business a business. That is to say, the
basis for sustainability is being able to pay for yourself. One of my favorite thins in
the world is Swiss chard, and especially the rainbow
chard because it's so beautiful; it withstands heat
better than other greens. So they look like beet
seeds, and that's because they're in the same
family; Swiss chard is. We want a sustainable company and that means a whole bunch of things. Basically, a company to be sustainable has to be able to pay for itself, but also we want to be
able to sustain ourselves and the community. The way we nourish that is
to be part of the community. We try to buy everything
that we need locally. We have a community program, for instance, where you can come in and
exchange seed for working. We have wonderful educational programs so people can come in and
learn how to plant their seeds. We donate leftover seeds
to local community gardens, to schools. The result is that we are loved. And it's very, very heartening. Not just to me, because it
doesn't just extend to me; it's for all of us that we're
a part of the community, we're sustainable by virtue
of making enough money to cover our costs,
and by employing people and being part of this community. It's very, very... I don't know how to
express the kind of value you get from that. (fast, exciting piano music) - Business is a powerful force
for positive social change. One of the only ways
to think about that is that we've seen business
be a powerful force for negative social change a lot of times. And we've gotten to the place where we're not surprised by that anymore. Bangladeshi factor collapses, 1,000 people die, and
it's a horrible thing, but people kind of shake
their heads and think, well, it's just another example of the bad behavior of business. You don't have to shift the
frame too much to think, well, wait a minute. It's not that there were people
in Bangladesh making things. What if they'd been in a safe factory? What if they'd been paid a living wage in a place where there's not much work? Then all of a sudden it's
pretty simple to see that that might have been a good thing. What if the goods they were working on were made from organic
cotton grown close by? Then all of a sudden now we've made an environmental statement
that's powerful and positive. So there are all kinds of ways that the very same transaction
could have done good instead of doing bad. We think about this in ways that today seem like the exception. And they seem fringe, right? So the biofuel industry makes
all the sense in the world, but it seems a little bit
likes it's not something that we run into every day. So that's to me the bigger
challenge for business. It's not to have people begin
to even anymore conceive that business can be a force
for positive social change. It is to say how do we scale the change? (light instrumental music) - I've been making fuel since 2002. Started in the back yard just
trying to meet my family's fuel needs, and we scaled
up and became a cooperative, and from there we scaled up
to this place in Pittsboro, which is our industrial plant. Our story is one of trying to scale up. We've been permanently out of fuel. And we still are to this day. This is a million gallon biodiesel plant, and we still can't make
enough fuel to meet demand. We make what's called B100
biodiesel, or 100% bio. Our biodiesel is a renewable
fuel made from waste that can be put into any diesel engine. So we have a cooperative of members that drive around in
Volkswagons and Mercedes and Dodge trucks, and
these kinds of things, and our biodiesel can go directly into any diesel engine as a
replacement for petroleum fuel. (sizzling) We collect used and waste
fats, oils, and greases from within around 50 miles of our plant. We bring them here, and
we spin them into fuel. Then we put that fuel back
out into the same community. So the members of Piedmont Biofuels they're off the petroleum grid. They are not attached to war, spills in the Gulf, or pipeline eruptions. Or anything that has to
do with the oil industry has really nothing to do with us. (crickets chirping)
(low mechanical humming) We are an RSB accredited facility. That is the Roundtable
on Sustainable Biofuels, and that's out of Switzerland. That is a fiendishly complex accreditation that essentially measures
the sustainability value of our fuel. We're the only biodiesel
producer in the United States to have that accreditation. That's important because not
all biofuels are created equal, and biofuels are not without sin. When we started this we would show up at a fast food restaurant and say, "Hey, can we have the grease
out of your dumpster?" And I think that people just
thought that we were quirky. As time wore on and people
started realizing that maybe there was something
to climate change and maybe we did have a
problem with petroleum, there was a moment there when biofuels were going to save the world. They became very big, and it was crazy. We became rock stars. We were sort of heroes in
the biodiesel movement. Along came I guess it
was the summer of 2008. World commodity prices
went to an all-time high. When Bear Stearns died
and the world changed, but what happened there
was biofuels became evil. That's when we were on the
front cover of Time Magazine as the greatest hoax ever perpetrated against the American people. And that's when the United
Nations came out and said anyone making biofuels should be charged with crimes against humanity. There was some truth to that, because what biodiesel did in our industry is like, you know, let's do this: let's go to Malaysia, let's
burn down the rainforest, and let's plant oil
palm trees all in a row, and let's squish the seeds
and take out the oil, and put the oil on a super tanker, and send it to Seattle,
and spin it into fuel, and put it on a rail car, and
send it to North Carolina, and put it on a truck, and
take it out to the airport, and after the airport
has burned enough of it, let's give them a prize for being green. It's like stop the madness. (liquid rushing) It's critically important
to us that our feed stocks, what we use to make product,
come from the local area. If you're gonna make a sustainable biofuel that's rather important. So the RSB certification is, I
think, quite important to us, because it does let people know that not all biofuels are created equal. That's true of quality
and also how they're made and from what they come from. We wouldn't use palm oil;
that's not what we're about. (exciting piano music) - Businesses have to run well, the for-profit and non-profit alike, in order to accomplish
their really high purposes. We think a lot about the
efficacy of social enterprises, and we have a little three cell model. First, you have to do important work. That's just fundamental. The point of your work has to
improve the quality of life in communities in some way;
you have to do important work. The second thing is you have
to do the important work well. That means you have to be
financially sustainable, but it also means that you
have to create a workplace that's good for all. A brutal workplace that
forces people to be unsustainably self-sacrificial isn't anything to be proud of. You have to be able to
treat your employees well, as well as, your customers
and all other stakeholders. So you have to do that
important work well. And then third, you have
to move your work to scale. You have to find a way to be selfless, collaborate with the other
folks who can come together to help you scale that work, and often, for-profit and non-profit alike, we're not great at that kind
of ego-free collaboration. So, do important work. Do the important work well. Move it to scale. - In 1840 there were no seed companies. People swapped seeds. They saved seeds. They got them from the people on the other side of the mountain. Still here there are beans
that are named after families, because they've been saved for so long. Those seeds are disappearing, because you can't buy
them from big companies. So it's we small seed companies, and there are several of us
scattered all over the country, that are trying to save the biodiversity, the different kinds of varieties of seeds. The reason to do that
can be well illustrated in the Irish potato famine. (somber string music) Potatoes come from Peru and Ecuador, and there are hundreds of kinds of them. Ireland in the 1800s
was growing five kinds, and those potatoes got a blight, and it affected every one of them. If they had been growing
25 or 30 kinds of potatoes, chances are pretty good
that one or two or three of those potatoes would
have been blight resistant. But they weren't, and
millions of people as I recall starved because of the
lack of biodiversity. Well now we have
genetically engineered corn. It's the same one being planted
time after time after time, year after year. It's depleting the soil, and now we're noticing there
are blights that are happening, and they're happening to the whole crop. So the reason to save your seed, have a 100 kinds of
tomatoes in your region, is that should a blight
come a long, or a bug, one of them or five of them
are gonna be resistant. That's how mother nature
works, and we wanna help out. (light instrumental music) - What the apparel industry
has done since the mid-90s is they've run around the
world utilizing cheap energy chasing cheap labor. But even the business schools,
the Chamber of Commerce, the Department of Commerce,
all the economic folks says your labor is your most
expensive cost of doing business in apparel manufacturing,
so you need to outsource it. Fast forward to today and
see where that's gotten us: devastated local economies,
very high unemployment. Our employees are by far
our most valuable asset. We have taken major,
major hits at TS Designs not only personally, financially what we've tied up and had to give up, but we've always maintained
retirement benefits, we've always maintained health benefits. Then what we did behind
us represents our whole garden system. So all the produce that
comes out of the garden, all the eggs that come from our chickens, go back to our employees
to make them healthier so they basically are more productive and are going to be
less likely to be sick. We changed our company policy. Every employee that works at TS Designs if there is work needed
to be done in the garden we pay them to work in the garden. (soft string music) We had employees that were never connected to this environment. We had employees what when
we first started bringing squash and zucchini and asparagus out of the garden had no idea what it was. We are very transparent with our employees what we do and why we do it. Some of them get aboard
immediately; some take time. As long as they're supporting
what we do at TS Designs which is produce high-quality,
sustainable t-shirts, then as long as they're meeting that job that's what they're mostly valued on. But over time they're
understanding the value of what we've done here with the garden. I like to describe what
we do as this is something we're passionate, but it's not a religion I want jammed down your throat. We have no employees that smoke. We have no employees that are overweight. Not because we have some
rule or mandate that says you can't be fat and you can't smoke; it's just this environment that we started to create around them. It's a system. We're all connected together. Our employees having local, healthy food is just as important to us as producing sustainable t-shirts. (piano and string music) (fast paced piano music) - There's something in
the human animal that says if I can make a gallon, wow,
maybe I could make 100 gallons. If I could make 100 gallons, I
could make a million gallons. If I could make a million, I could make a 100 million gallons. Someone managed to put it in
our heads that big is better, and the economy's a scale or
we can drive pricing down. At the end of the day it is exactly that that's driving us into environmental ruin, especially when it comes to energy. If you think about energy
and your energy choices, you can't graduate from college and say I'm gonna be a utility company. You know, that's not gonna happen because we've dealt out a monopoly, and we have this massive scale. A nuclear plant that is so expensive it would never get built
without government subsidy. Well, really, energy
is the perfect example of how that should all be reversed. Energy should be made where it's consumed. If you're going to drive, you should be taking the waste
products from your community, turning it into fuels,
and using that to drive. If you're going to power your house, it should be done with solar panels. We should be moving to a
distributed generation model of all of our energy consumption. That's what sustainability
will look like in the future. It won't be an oppressive,
top-down infrastructure that you really have no role in. You can turn off the lights
when you're not using them, but you can't really go
into the utility business very easily. In the future, that
absolutely will change. So the next 100 million
gallons of biodiesel should not come from 100 million
gallon plant in the harbor. The next 100 million
gallons should come from 100 little Piedmonts. There should be one on
the edge of every town. In our case we're using cooking oil. If you have another
community that you know has a lot of rotting apples, well, we should be using rotting apples. You know, they should
power themselves from the waste streams that are
bio-specific in their bio region. (machine humming) The sustainability movement, you know, are we just a bunch of dirty hippies with exhaust that smells funny? Our exhaust tends to
smell like french fries. The reality is, of course,
there's technology involved. There's invention involved. And, actually, if you're gonna get at that conservation resource, you're not gonna do it by
rubbing sticks together to start the fire. You're going to do it by, say, coming up with an LED light bulb that uses a fraction of the electricity, but produces the same amount of lumens. That kind of invention and progress is something that you're
gonna find, I think, at every level of society. So I think the future of
biodiesel will come from deeper in the waste stream, and the way you drill
deeper into the waste stream is through the technology. Today you might say, "Oh,
I can't touch that stuff," but tomorrow you'll say,
"This will make a fine fuel." In all things there's probably a constant need for improvement. It's certainly true of
the biodiesel space. It's true in the sustainability
movement in general. It's true even if you look
at our corporate structures. There's obviously vast
room for improvement there. There's a screaming need for integrity, authenticity, and transparency. - Think about something like a trust, which is incredibly important in society. Imagine for a second
how it would feel like to live in a society with no trust. You would have to lock
your car, and your house, and not have a bank account,
and all kinds of things; it would be really, really tough. Nevertheless, it is not clear
that we have a good trade-off between what we're willing to
pay for something and trust. What we often find is that
some things come into play in what we call sacred values. So as long as we have sacred values we put tremendous value
on things like trust and social and public good. But the moment they come
into the market relationship, and we have regular trade-offs with them, I think their value's going to
be really vastly diminished. Because all of those things
on the per moment transaction are worthwhile giving up. Trust, I want in principle, but right now if you
gave me a lot of money maybe it's worthwhile to sacrifice it. Pollution, I want the world to be clean, but right now if you gave me something maybe I would sacrifice it. So I think that's why we
have these sacred values and things we're not willing to trade-off, because as human beings every
time we start trading off these values we might think short term and sacrifice them too much. - I'm utterly convinced that sticking to principles is profitable. In a local community it's profitable because people can trust you
and building trust is huge. At the moment there is such
an atmosphere of mistrust almost everywhere that
it is of great value to this community that we remember that we really can trust each other, and that we prove it by being trustworthy. I think it's terribly
important for a business in a community like this, or anywhere, to make sure that they're really upfront with their customers. If you lose some customers that way, that's too bad, but in truth most people want to be able to trust. I can tell you, for example,
a couple of years ago we sold garlic. This garlic had a blight on it, and we didn't find out
until after we'd shipped it. So, we went back at great expense and contacted everybody
we'd shipped that garlic to, it was just one box fortunately, and said please be aware
that this could be blighted, check it, send it back
if you don't want it or just throw it away,
we'll happily resupply you. It cost us a lot of money to do that. And I can't tell you how
many customers have commented on how much they are willing to buy seeds and other things from our company now, because we went right out there and said, uh oh, we goofed. I think that is sustainable,
and I believe it's profitable. (machine whirring) - If you make yourself transparent it just builds an
unbelievable trust factor. If there is a question I can't answer or a thing that you want to know, we will find that answer;
there's no secrets. Five years ago we launched what we call the supply chain Cotton of the Carolinas, and that has really been our focus. We've seen our biggest
growth, our biggest interest. It's a lot like what's happening
in the local food movement. People are starting to
realize I want to know where my food comes from. We want to do the same thing with apparel. We want to know where
that apparel comes from. What we describe make a
shirt that's dirt to shirt in 600 miles, impacts 500 jobs, in a completely transparent supply chain. So when you get a Cotton
of the Carolinas t-shirt, now we have a style number
that you drop into a website that brings you to a Google map. When that Google map pops up, you get not only a
picture, a phone number, a physical address, and email of everybody involved in the supply chain: the farmer, the ginner, the spinner, the knitter, the
finisher, the cut and sew, and then us the print and dye. We make our supply chain
completely transparent. Now what they'll tell
you in business school, you just basically told
somebody your whole how to compete with you. What we like to say, we
feel there's more benefit in being transparent compared to, yes, there's people that can
see that information and if they have enough money
and they're foolish enough, they can be in the t-shirt business too. (light piano music) - Bring up values and all of
a sudden people start saying, "Oh, I don't want to go there." Because even the word
values has been co-opted by a political group or a religious group as being almost
exclusionary or judgmental. That's not what it is. I mean, the word is much more fundamental. I love the work of a guy named Rush Kidder who wrote a book a few years
ago called Moral Courage. He went to every continent,
went to 160-some countries, talked to people from
every faith community, as well as folks who didn't
grow up in faith communities, and he tried to find
out what were the values that were universally shared. He came up with five core values, which I think are just beautiful: caring, honesty, respect,
responsibility, and fairness. Those are the values that unite us, that bring us together, that build sustainable communities, not the values that judge
and separate and divide us. That is enormously important, because now we can start talking about the things that we share. We can argue forever about
how to fund public education or what's the best form of taxation, but as long as we do it
in a way that's informed by that group of values, we're gonna come to really good outcomes. Because we're gonna have what? Respectful and civil discourse. You have to start with that. And if you start with that, you end up with coming
to a really good place. So I talk about values all the time, because I don't see them as a bad thing; I see them as the foundation
to what we're doing. (energetic instrumental music) Our company is a social enterprise. We started the company to
stop kids from being hurt principally from being sexually
abused or from drowning; that's kind of the reason
the company exists. We have a relatively simple,
but a pretty elegant model. We use the platform of insurance to gather a tremendous amount of data
about how kids get hurt. We aggregate that data, and then share that with our customers in such a way that they'll
change their business practices to minimize the chance that
something bad will happen. That has the benefit of
keeping kids safe and healthy and driving down the cost
of insurance over time. So, we're nominally an insurance provider, but we're mostly about changing behavior and keeping kids safe. It's really important to understand that when we founded the company we literally had a business
model that was written on the back of a cocktail napkin. Says right at the top,
it says, "Serve others." That's why the company exists. We didn't start the company to make money. We asked ourselves do we matter? Does our company matter? In other words, if we dry
up and go away tomorrow somebody else will provide
insurance to our customers. So we have to matter for a completely different set of reasons. We have to matter because
we will help our customers keep kids safe. Interestingly though, top of
the pyramid says serve others. Right beneath that it says make a profit, and we're not apologetic about that. If we can't adequately
monetize the work we do, we can't be here to serve others. So for us, profit is simply
a metric of sustainability; that's all. And I would argue that that should be true for any purpose-driven business whether it's for-profit or not-for-profit. Now, everybody goes,
woah, I'm not-for-profit; I can't have profit on that there. That's wrong. They might call it a
fund balance or a reserve or a surplus or whatever,
but non-profit, for-profit, it doesn't make any difference, you have to be financially sustainable. Interestingly, because we
exist for a higher purpose we're much more mission
aligned with our customers. And by being mission aligned, when they do business
with us they recognize they're not just buying insurance. There is a competitive differentiation. If you talk to all of
our customers they'd say, "No, I recognize I can get
insurance some place else. "I choose Redwoods. "We're going to be an
operating partner with them." So, at the end of the day quite frankly customers tend to pay a little bit more for our products and services, which makes us a little
bit more sustainable. (light piano music) - When you think about products that have social good in them, the question is whether
people at the moment are willing to pay for a social good. Not only that, are they
willing to pay in a social good in a trade-off kind of a way. So if I had the rule I don't
buy anything that is not produced organically with fair labor, or whatever the rule is, then I wouldn't do these trade-offs. But once you start
making these trade-offs, a little bit more child labor
for a little bit more saving, you know, how much child
labor I'm willing to do? Everyone has some effect. You know how much
exactly am I trading off? All of a sudden these
trade-offs become polluted, and it's not true that at the moment your selfish motivation
about getting something cheap is not going to win. When you stand at the shelf the
most salient thing is price. And price is not just very salient, it's easy to look at;
it has decimals, right? You look at things like quality,
or you look at child labor, or whatever you want, these
are hard things to grasp. What are they? The price: $7.29, $8.15,
that's really easy to compare. So because price is numerical and decimal and easy to compare, it occupies
a bigger part in our brain; that's one thing. The second thing is that at the moment that's the most salient thing. You're paying now. You're going to consume later. And the effect on the
environment will be later. And the product was produced already. The thing that is immediate
and easy to compare is price, and, therefore, people
focus more on price; sometimes too much. (flowing piano music) - Yes, our t-shirts cost more because of where they're
made and how they're made, but their our people getting back the food understand there's a value beyond price; what's the social impact and what's the environmental impact? When you buy that apparel
product in Bangladesh, yeah, the price itself is cheaper, but really what's the total impact of what you're doing there? You know, what's the real cost to cheap? We're a commodity business. We're in a business that
unfortunately are valued on price. I'll compete with anybody in the world and bring price to the table, but also bring social
impact, environmental impact, and then let's talk. But if you're going to come to the table and only look for price, we're gonna have a short conversation. I don't have conversation
with the big box stores. I mean, they might put
solar panels on a building and stuff like that, but
they have totally destroyed the apparel industry
and the apparel market. Because what have they done? They have built the model
on cheap, unsustainable transportation and labor. So when they come back to
the US and wanna source their apparel here, first of all, their margins won't support it, they're not gonna, I don't
think, raise their prices, they're not gonna reduce their margins. They're looking for people
like us to make it up, and there's no way. When I was talk about
Bangladesh at 55 cents an hour. I mean, our average labor cost, so that's 500 people in North Carolina, that's probably $15 an hour. The gap is so great. You know, we have just totally screwed up and destroyed the apparel system. So it's back to that re-education: buy better, buy less, buy local. - In a very general way we
are focusing on the short term rather than long term. Sometimes we call it a
present focused bias; that we just focus on now. You can see it everywhere, right? You can say health care: good long term, short term doughnuts are really fun. Now with purchasing, that
actually becomes a step more difficult because
if you think about it when you go to a grocery store, let's say, or to a shopping mall, that
shopping mall is defining the environment that you're in, and the environment has a
large effect on your behavior. You might think that
you decide what to do, but the environment
actually has a big effect. And when you go into
a shopping environment you're basically in their mercy. They decide what kind of
pieces of food to let you taste and what kind of promotions
to expose you to. All the motivation of the
commercial environment around us is to get us to do things
that are good for them in the short run. They want our time, money,
attention right now. So, you know, I'm not very optimistic that we can educate people
about the importance of child labor for trade. And unless we get it to be something that like to be trade-off
that we're going to get people to reconsider it and
therefore be willing to pay at the pump or at the grocery store. You know, if you think
about fuel for example, we do have more clean
fuel than less clean fuel. And if you had a one time decision like which car do you want to buy, one that goes on clean
fuel or non-clean fuel, maybe people would say let
me make this commitment. It's also a public statement. Other people can see what
car I'm driving and so on. But if you drive to the
pump and you can choose cheap or expensive, bad for the environment or
good for the environment, I think that way too often we
would focus on the short term, on money, and on being selfish. (thoughtful instrumental music) - As an individual you
start wrestling with these unfathomably complex problems. Peak oil. Wow. What are you gonna do as an
individual about peak oil, and the fact that US
reserves peaked in 1974 and global reserves peaked
on Thanksgiving Day of 2007? You know, blah, blah, blah. And you get into whether the Saudis are overstating their reserves. And you get into just an
extremely complex issue that can be overwhelming and
maybe many people sort of go, "Ah, can't deal." The trick is to get into the scale of me. Try to chase it down into a
scale that I can understand. What I can understand is
my family's footprint. I can understand my electric bill. I can understand my miles driven. I can understand these things. So by focusing on the
scale that I can understand I can make some progress and
feel that I am doing something about peak oil. I am engaged in these
unfathomably complex problems. (crickets chirping) When I started making my
own fuel in the backyard I slipped into this pathology of I'm never gonna go to
the gas station again. When you do that (laughing),
wow, do you conserve. It's Friday morning your
fuel gage is on empty, your next batch is not gonna
be done until Sunday night, and you kind of say, well, I
either go to the gas station and break my promise
to myself or let's see these three trips to town: my wife's already in town maybe
she can pick that up for me; I might be able to let
that one wait until Monday and do those two at the same time. So conservation kicks in. At the time I was a metal sculptor, and I put 27,000 miles a year on my truck. My mileage dropped to
about 9,000 miles per year. And you say, well, gosh that's not bad. You can have a two-thirds reduction in the amount of driving that you do? And the answer is absolutely. In fact, I would say it's
probably true in all of our lives. The really good news is
we can all cut by 75%. It's a little astonishing, but it's there. And you know it's also,
you know, kind of fun, kind of rewarding. I treat conservation as
sort of being like a game. (flowing piano music) - One thing about when
I go and have a meeting I'll usually ask the question: Can you tell me without
looking the country of origin of the shirt you're wearing today? I've probably asked
that question 150 times. I've got probably less than 10 answers. The problem we've got today is most people are not aware of what they're doing. So every day they'll pull that
wallet out of their pocket and they'll make that
purchase of coffee, gas, apparel, whatever, and
sometimes you make bad decisions because of the environment you're in. That's okay. The example I love to give people is right down the road here
is a fast food restaurant. There's probably maybe
once or twice a month that I'll end up there. The reason I end up there is
I'm stuck between two meetings and I realize if I don't
get some food in my system I'm gonna have a hellacious headache, and then I'm gonna be not as productive that I need to be the rest of the day. But I realize when I go in
there and buy that food, I'm not helping myself, I'm not helping the local economy, I sympathize for the chicken
I'm getting ready to eat because they don't have
the quality these chickens over here have. But at least I'm aware
of what I'm doing here. But by you making a
decision by not being aware of the impact you have,
that's the problem. That's what we've gotta fix. If we can just get people
to start to be aware, we will greatly accelerate down this path and make our communities
a lot better places. The problem is we get so
caught up in we don't have time or we depend on information
given back to us. You know, this product
here is $1 compared to $2. Well, that's gotta be a
better deal and I'll buy it. There's things happening globally: climate change, peak oil, nine
billion people on the planet, access to cheap resources. That's not gonna go away. Everybody thinks we're
gonna grow ourselves out with economy. Well, those four things I just told you are not gonna just allow us
to grow it out with economy. The way we're going to
make it a better place for everybody, we all gotta participate. The more you extract from the community, the bigger house, the
bigger car, whatever, basically it just pushes
somebody else down. I'll never forget when we
first started our business, I mean, success was determined
by a country club membership and driving a Mercedes Benz. What was portrayed as
successful and the path to be on is really not gonna work. (light piano music) - I really believe in local economies. I think it's the most sustainable way for us to go forward. The joy it brings to be
able to have a business that counts to people and to me and for people to be able to make what one of my employees
called a right living; that is to say work for a company where we're not ever going to get rich, but we are going to work
in a way that makes us happy at the end of the
day for what we did. Nobody goes home worried
about the consequences of the kinds of work that we do. It's a good living for people to have. That is value enough, because
if there are enough of us, if there are enough small seed companies in enough communities, that
will make a huge difference. - The role of business in society today not only can be different, but must be. When we get involved in business all of a sudden we can only
talk about spreadsheets and quarterly profit statements. Those are important, but they're not the reason we exist. The reason we exist is
for love, is for service. We appreciate people who are honorable; people who do the right thing. Too often in business
leaders do what they can instead of what they should. We all know what we should do. Why don't we do it? Because we have this set of rewards that incents us to do the wrong thing, and we now know that environments that are built around the wrong incentives make moral people behave immorally. Those of us who have the great blessing of leading businesses don't get to check our morals at the door
when we come to work. That's a part of who we are. So everything we do all day every day ought to be a part of serving. A business has the opportunity
to serve its employees. It has its opportunity
to serve it's customers. But it has an opportunity
and obligation to serve the broader, wider community. Anyone who says, "I
just exist for profit," is lacking a moral courage. Because that's a person who says here's what I think personally, but here's what I think professionally, and they're two different things. Not only are they different;
they can't reconcile. We have the obligation to
reconcile our personal values and our professional responsibilities. That calls us to look the
shareholder in the eye and just say, "Here's
the deal, you're right. "I am levying an undue
tax on you this quarter, "because I'm gonna take some
of our excessive profits "and try to help others." All businesses are of, not above. They're of the community. So if the community is broken, it's just a matter of
time before the business is gonna be broken. There is at the end of the
day a compelling economic case to be made that we ought
not have poor people. Or we ought to do all we can to minimize the number of poor people there are. Because at the end of the
day that grows our economy, that gives us better ideas, it gives everybody greater opportunity. That's a fundamental,
almost a math case for that. There's also the moral
case that can be made. Most of us have grown up in
one or another faith tradition that tells us we are our brothers'
and our sisters' keepers; we're responsible. If you buy that, which
I think most people do, then you have to think
about everything you do as what am I doing for those others who are not as fortunate as I am? (light piano music) - The people that think
that everything is a market take something very basic
away from being human. Imagine I asked you for
something simple like would you help me change a tire on my car? Ask yourself how likely
would you be to help me? Now imagine that I offered you money. I said, "Would you help me
change the tire on my car? "I'll give you $5." What happens when I offer you $5? Do you say to yourself, "Gee, I get to help Dan plus I get $5?" No, most people say, "Oh, this is work; "I'm not interested in that." I'm not interested at all. Now if I offered you $500
you would do it again. But what's interesting
is that I can add money to an equation and make
the motivation lower. So with no money you
would be willing to help. I add money to the equation, you don't get social motivation
and financial motivation. The social motivation goes away. Now you get just the financial motivation, and $5 is not enough; $500 that's enough. So what's interesting is
what we call crowding out. Social and financial
motivation don't add up; they substitute each other. I think often we don't understand that. This is what happens when we
bring things to the market. So think about something
like pollution, right? What would happen if we
create a tax on pollution? There would probably
be some people who say, "I can't afford it. "Let me look at how I save money." But there would be some
people who would say, "Now it's just money." When we moved to Durham we
bought a relatively old house, and we decided to insulate the attic and change the air
conditioning system and so on. The contractor that came was shocked. He said we would never
recuperate this amount of money, because we were going
to spend so much money insulating the attic and
electricity is so cheap, it's not going to be ever effective. Of course, financially he was right, but we did not make a financial decision. We were saying this is what
we think good people do. We try to save the environment. We try to insulate the attic. We're doing all of these things that are not about economic efficiency. But if all of a sudden the
computation was different and it says it's not part
of the social obligation of how we think about the
world and our kids and so on, it's just a financial thing, would you prefer to pay
this amount or that amount. All of a sudden we would have
probably thought about it differently and said, "Okay,
we'll just pay the tax for this "and let's not think about it." So I think this question
about social norms and financial norms is
actually very important. What kind of things should
we not even introduce into the market? I think there's lots of
those things that we should basically say these are not
things that we should make part of the market; these are
things that we should keep as sacred values with no trade-offs. - My dad, who's coming to visit shortly, is like 84 year old
veteran of World War II. My kids can climb onto his lap, and he can tell them war
stories all afternoon. The question is if I make
it to having grandkids that pile on to my lap,
what am I going to tell them that I did in the war on climate change? Do I want to say, "Oh, we didn't try that "'cause we didn't think it would work?" Do I want to say, "Oh, you know what, "we thought that would be too expensive." No, absolutely not. I'm going to tell them war stories. I'm going to tell them about
the things that flopped. I'm going to tell them about
the things that worked. I'm going to tell them about
the progress that we made. And I'm going to tell them
that I was in the war, and I served valiantly in the war effort to make it so that the human
animal and other species could sustain life on this garden planet. - At my age you do start
to think about legacy. I have children and grandchildren, and they're the most important legacy. But, I like to think that 15 years from now there will
be a thriving seed company that's still learning how to do what it's doing, and doing
it better and better, saving seeds that might
otherwise disappear if it weren't for
somebody very specifically saving them and passing them down. And that that will be my legacy. - Everybody has a part to
play, and don't forget that. No matter how small the part is, it's the pieces that make the community. It's not the materialistic things in life that make us happy. Money's important. You've gotta have money to eat
and live and stuff like that, but it just comes down to
it's not the only thing. Money doesn't give you the
passion, give you the heart, and it doesn't connect you to
your friends and community. There's more to life and business
and community than money. - Often people say I get it,
I get it, I understand that. So what I'm gonna do is I'm gonna go off and I wanna make a lotta, lotta
money for X number of years, and then I'll start
giving that money away, or then I'll start serving. (soft piano music) And I would simply tell
ya that in many ways we're out of time. We're at a place were our global society is more profoundly broken than
maybe at any time in history, and we have the
opportunity to change that. When we start thinking about
a business school graduating 300 people and 25 of them are going to go into non-profit work or are going to work for
for-benefit corporations, I'm proud of that group
that's bucking the trend and doing that. But for the 250 that are
going to work for banking or consulting and all they're going to do is make shareholders more money, you have to ask yourself, do you matter? The personal, strategic
question is do you matter? If you don't do that, isn't
somebody else going to do that? But maybe there's something inside your God-given set of
skills that will allow you to help others in a profound
way that no one else on the face of this earth could do. I would ask people to respond to that. To that. I don't miss a lot of meals. I drive a nice car. I'm not asking people to
live a spartan existence. What I'm asking people
to do is open their eyes and understand the broad global context in which we exist today. We're profoundly fortunate, and there are an awful
lot of people depending on what we do in the next
day, week, month, year in our careers. It's time. Serve. (inspirational piano music) (fun instrumental music)
agree we should help the people and planet. how do we get better at helping the people and planet? how do we measure improvements in people, planet and .... profits? oh yes the easy one is measuring profits. measuring the others is both important and very difficult.