Welcome to 2012, this is going to be a year of great change, some good and some a little scary. We’ve developed our top 10 predictions based on research, our associated articles from last year, combined with crystal ball gazing with our friends and colleagues. We also decided to take a bold approach based on the assumption of ongoing exponential rates of change.

Macro Developments

1. China

its uninterrupted 20 years of continuous economic growth is going to suffer a setback due to severe environmental degradation, increased social unrest, bad loans, and a backlash against cheap products.

2. Canada

its international reputation will continue to decline due to its “fire sale” approach to resource extraction such as the tar sands (oil sands) and shale gas and hydraulic fracking, and its failure to address greenhouse gas emissions.

3. EU

Despite its current debt crisis, the EU will continue due to its willingness to tackle the issue and its leadership in social and environmental stewardship.

4. United States

While our friends to the south will be distracted by their upcoming election, it will be restarting its economic engine led by its innovative strength by developing quality products and services that use alternatives to fossil fuels and realize efficiency gains in resource use.

People Developments

5. Consciousness Empowerment

There will be a significant increase in community based consciousness that focuses on meeting the social needs of the community as well as addressing local environmental issues. While this consciousness has always been there, it will be empowered through Web 2.0 technologies similar to those that supported the overthrow of many dictators and the emergence of the Occupy Wall Street movement in 2011.

6. Rethinking Capitalism

Small to medium sized businesses are the backbone of the G-20, and their voices will begin to emerge and influence the playing field by becoming more coordinated with a bottom up approach to economic development at the community level.

Environmental Developments

7. Accelerated Warming

We will begin to see signs of accelerated global warming as some of the positive feedback mechanisms, such as the release of methane gases from thawing tundra, will begin to contribute to the overall GHG contributions, which now approach 400 PPM, nearly 50 ppm above the target of 350 to keep climate change to a 2 degree increase.

8. Conflicting Demands

The progress that has been made in restoring renewable resources such as fish stocks will be undermined by government permits that enable increased fishing. If stock resilience calculations are incorrect the gains will be lost.

Profit Developments

9. Green Teams to Audits

While Green Teams in corporations have made positive strides in implementing more sustainable business practices, their effectiveness is often limited. Businesses will need to start measuring and managing what matters in order to secure contracts and work with their clients who will increasingly demand the information. This will mean the formalization of sustainability management and tools to further realize gains in financial performance of sustainable practices.

10. Alternative Energy

Globally, the cost for renewable energy solutions such as photovoltaics and wind will be comparable to fossil fuel based technologies, although there will not be much profit in the industry itself due to a supply glut.

Have you ever been engaged in a conversation and used a phrase that you’ve been using for your entire life without incident, and suddenly have it bring the discussion to a crashing halt? Try saying “Tarsands” with those who are keen to extract oil from the “Oilsands”. In fact, if you talk to political leaders in Alberta you will discover there is a discussion about focussing Alberta’s ‘ethical oil’ lobbying strategy on strategic decision-makers.

While attending a Round Table hosted by the Canada West Foundation, the rational was made clear. Those who are against extracting the oil still use the old “Tarsands” words and those who want to pursue the ethical extraction of oil use the new “Oilsands.” So, whether you have an opinion on the “oilsands” or have just used ‘tarsands’ all your life, your stance may already be made.

When arguing for the three pillars of sustainability, we often site business cases where there is a failing on the planet/environmental and/or people pillars that has or will render a business unsustainable. But is there an ultimate test of this theory? Something on a more grand and global scale? After all, one could argue that China demonstrates that exponential economic growth is possible regardless of social and environmental conditions.

China has become the manufacturing giant of the world and has had unprecedented economic growth at 8-10% annually for the past 20+ years. As the second largest global economy, and rapidly closing the gap with the United States, China is expected to become number one, using the old GDP model, by 2020. Can this be sustained?

The massive scale of this experiment challenges the belief that sustainable economic growth is not possible without providing people with a good quality of life and without ensuring a healthy environment. Perhaps, through a combination of engineering and technology, we can harness nature and control people in a manner that allows us to keep growing unhindered. As happened with industrialized nations, and now with developing nations, economic growth is dependent upon two key factors: extraction from natural resources and abundance of cheap labour. So let’s take a look at these in terms of China’s growth.

Natural Resources

In 2010, China’s Ministry of the Environment noted that over 40% of its water is only suitable for industrial purposes due to pollution. Chinese Academy of Engineering and Ministry of Environmental Protection reported that 25% of China’s underground water is polluted. The province of Hubei’s Environmental Protection Bureau announced that more than 50% of the province’s lakes were severely polluted: 53% could only be used for industrial production and recreational activities, so long as there is no direct human contact. Further degradation is predictable as China’s new 5 year plan for renewable energy gets underway with the construction of more than 60 large-scale hydropower projects.

Labour

Nankai University reported that in 2009 China had nearly 90,000 “mass incidents” (protests of 100 or more people). Many of the incidents were over environmental concerns while the remainder was mostly political or working conditions related. These incidents are causing the authorities to respond. For example, a toxic spill at the Zijinshan Copper Mine, the biggest gold producer in China, led to the arrest of 2 former Fujian Province environmental protection officials in 2010. While at the same time the city of Dalian ordered the shutdown of a paraxylene (a toxic chemical used in plastics and synthetic fibres) chemical plant in response to tens of thousands of residents protesting over pollution concerns.

Since human rights do not appear to be at the forefront of China’s growth strategy these rare responses are unlikely to curb growing social unrest. There are even reports that the “one child rule” has caused a decrease in the female population so substantially that the disproportionate male population is frustrated, aggravated, and more susceptible to uprisings. Reports of women being kidnapped from one village to another are increasing and have historically led to internal social conflict.

Global think tanks such as STRATFOR predict there will be a collapse in China due to thin profit margins, its dependence on continued Western consumption, and a birthrate that will lead to qualitative and quantitative labour shortages. Others argue that credit excesses in China will lead to its collapse. Some predict 2020 will be the breaking point, however, even they do not fully account for environmental and social degradation.
As a major test case in the sustainability equation, let’s keep an eye on whether the assumption that sustainable economic growth does in fact need environmental and social stewardship. Given the exponential changes being witnessed this century, the Arab Spring for one, at Greenomics we will be bold and propose the experiment will unravel within the next 5 years unless the world intervenes in some way – but after Kyoto and Copenhagen, you know where we are putting our money.

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It’s harvest time for us northern folk and many of us are gathering in public markets, scouring the berry bushes by the side of the road, and reaping the benefits of our balcony or backyard gardens. Fresh, tasty, and personally satisfying; but, is it any better than mass produced food from large efficient food producers? For us, we look at growing food through the sustainability lens which emphasises profit, people, and planet. Is growing food organically really profitable while at the same time helping people and improving the environment? We also anticipate how industries being challenged by the sustainability revolution respond, and organic food is rapidly undermining the market currently dominated by Nestlé, Unilever, and Monsanto. How will they protect their share and maintain profitability?

Before we get into the meat of this article, we must first note that we are deliberately avoiding the use of “conventional’ to describe mass food production techniques. This is because ‘conventional’ is something that has emerged in the past 50 years or so, and as such does not deserve the use of such a foundational word. Current farming (production) techniques are new, whereas ‘organic’ farming has been in existence from the time we started shifting from a nomadic to an agricultural society – long ago. So, organic food should actually be considered conventional, and current mass production techniques should be considered an experiment. While the food production experiment has led to massive increases in food production, efficiency gains, and reduced costs, we are we still returning to traditional organic farming and at a growth rate comparable to China’s GDP.

While organic food and beverages represented only 4% of total U.S. sales in 2010, it has grown from $1 billion in 1990 to $26.7 billion in 2010. Recent growth rates of 7.7% overall and 11.8% for fruits and vegetables from 2009 to 2010 are impressive and make an investor’s heart all warm and fuzzy. But its not just food! Organic non-food products grew 9.7% in 2010 for total sales of $1.97 billion. This translates into 54% of organic food being sold in mainstream grocery stores, 39% being sold in “Natural retailers, and the remaining through farmer’s markets, boutique and specialty stores.

Organic food growers are also competing for growing space. In 2008 there were 4.8 million acres of land certified as organic in the U.S., and was growing at 15% annually from 2002 to 2008. Globally, there were 93 million organic acres in 2009, and growing. While still slightly less than 1% of overall land used for growing food, it is growing annually at 6%, and this rate is expected to increase as the global recovery from the 2009 recession continues.

While the growth is impressive and shows promise of expanding, are we really moving toward food production that is actually more sustainable? Growing food organically is profitable, but is it actually beneficial socially and environmentally?

Social Benefits

There are numerous social benefits associated with growing food organically which we roll into health, employment, and the catch all ‘well-being’. In terms of health, research from around the world indicates organic food has the highest amounts of beneficial vitamins, amino acids, and minerals. It also indicates that pesticides have a negative impact on our health and there is a reduction of pesticide intake in children who are fed organic foods. Further, more people per food grown are employed in more meaningful ways compared to efficient factory food production. Finally, there is increased sense of community and well being reported by people who shop at farmer’s markets.

Environmental Benefits

The environmental benefits are equally impressive when growing food organically. Soil, ground water, river, lakes, rivers, the atmosphere and the ocean are not excessively exposed to pesticides, fertiliser run-off, manure, and antibiotics. Further, there is approximately a 30% decrease in greenhouse gases produced compared to factory production, primarily due to not using fossil fuel based fertilisers. There is the additional benefit of the soil retaining more carbon in the soil.

Responding to the Challenge

So the argument that growing food organically has economic, social, and environmental benefits not realized in factory food production methods seems sound. But, what about the businesses that having been profiting using factory methods and how will they respond to this 3-pronged assault? Many will respond through acquisitions, as we have seen with the 85% acquisition of Stonyfield Farms by Groupe Danone, and AEA Investors acquisition of Burt’s Bees. Others will take routes that may not be in the best social or environmental interests. Remember plastic bags?

In the past few years countries, states, and provinces have started banning plastic bags. In 2010, a study supported by the American Chemistry Council presented the argument that reusable grocery bags can be breeding grounds for dangerous food born bacteria and could pose a serious threat to our health. This introduced an element of fear that may have made some legislators rethink banning plastic bags.

Similarly, existing industries may support campaigns that highlight potentially negative issues associated with growing organic food. Cost is already a well known issue, but given Canada and the US pay the least amount per capita for our food, a slight increase will not really affect us. Another approach might be to raise doubt about the ability of organically gown food being able to supply the world’s growing population. However, given the food industry’s dependence on fossil fuels, which are finite in supply and their use is the single greatest contribution to climate change, we need to find another way to feed ourselves one way or another. Other arguments we can anticipate being introduced may include concerns over quality (did you notice that spot on your apple?), consistency (my McDonald’s fries taste funny in Hong Kong compared to New York!), and availability (sorry, no blueberries in Canada in January).

While we can expect such developments, we have to remember that it comes down to values. Do we want food grown in a way that works with the environment, enables people to lead more meaningful lives, and allows more people to share in the profits? Or do we want our food grown in a manner that centralizes profits, devastates the environment, and dissociates people from the creation of a fundamental need? Something to keep in mind when browsing the grocery store or farmer’s market, and making decisions about what values you want to support.

This summer gave us time to conduct our annual review our own performance using our scoring system that is based on international standards such as ISO 26000, ISO 14000, amongst others. We maintain our carbon neutrality through tree planting and supporting community gardens, are paperless (essentially), use minimum electricity and other resources, create no toxins and meet most of the other criteria. However, we have not officially identified a program to help the environment recover from some of the damages that have been inflected upon it. So, we decided that would be our focus for this year, and as such have identified an innovative approach that is in its preliminary stages, but is already having a measurable and visible positive affect: herring enhancement.

To the north west of Vancouver are Howe Sound and the Sunshine Coast, which used to support abundant herring populations. Until the mid 20^th-century, there was an uninterrupted abundance of herring which not only supplied people with food, oil, and fertilizer, they also supported other species such as salmon and dolphins. However, due to over-fishing that started in the 1930s and with the introduction of creosote soaked pilings (which prevent herring eggs from hatching), the populations collapsed, the fishing industry died, salmon populations decreased, and dolphins disappeared from the region.

Looking at the sound today there does not appear to be anything wrong. However, we are fortunate to have the accounts of the First Nations who remember as children waking in their villages at night and seeing the waters filled with lights from the fleets that used to harvest the herring bounty.The Canadian Department of Fisheries and Ocean (DFO) recorded the collapse of the herring fisheries in 1967 noting an ongoing disruption of their numbers and the lack of viable spawning areas. The DFO instituted a four-year closure of the fishery followed by strict quotas for harvesting, though no recorded efforts to restore their populations were implemented.

Reaching out to the community, we discovered the Squamish Streamkeepers, who were established in the fall of 2000 with the mission to “maintain and enhance riparian habitat of our local streams so that fish, especially Salmon (adults, smolts, and fry), can navigate streams and successfully spawn. This not-for-profit organization is comprised of a wide variety of local volunteers interested in taking an active role in the preservation and protection of the Squamish River Watershed. While focused on the Squamish River Estuary, they are very willing to share their knowledge and experiences.

How successful have they been? While the herring run has been restored in parts of the estuary and they are expanding into other regions, the most visible result is the appearance of pods of white-sided dolphins. Locals do not remember ever seeing dolphins in Howe Sound, but we know they used to be there and now they are back. In fact, this year three pods were spotted, with each pod comprised of hundreds of dolphins to the delight of ferry passengers, locals, and boaters. See the results yourself!

Not wanting to reinvent the wheel, Greenomics has chosen to work with both the Squamish Streamkeepers and the Pender Harbour Rotary Club (which has been working with the Streamkeepers to reintroduce the herring into Pender Harbour). The area we’ve chosen is around the town of Gibsons, we will build on what has already been learned, and will monitor our efforts over the next several years. We will also be working with the Town of Gibsons to incorporate our efforts into the Official Harbour Plan and embed its support, and will monitor and report our results as they unfold.