Auret Van Heerden of the Fair Labor Association holds up a cellphone and tells us that the phone started its life with artisinal mines, run by gangs and staffed by slaves in the Congo. It was built in a factory in China where people have committed suicide and died after impossibly long work shifts. Chocolate comes from cocoa harvested by children in Ivory Coast. Diamonds come from impossibly dangerous mines in Zimbabwe. Uzbekistan shuts down the schools to bring children into the cotton fields to harvest – they allow the country to be the world’s second largest cotton producer. And all these products end up in dumps in slums in places like Manila.

These are evidence of governance gaps – gaps in our supply chains. Some happen in failed states. Some happen in states that feel like deregulation or lack of regulation is good for trade. But they provide a human rights dilemma for all of us. And most of the companies involved in these supply chains can’t assure us that no one had to suffer to make our products.

We need a reality check, to realize what a serious deficit of rights we have. The independent republic of the supply chain is not being governed in a way that promises ethical trade. We would expect that a drug like Heparin is produced in a way that’s “squeaky clean”. But the active ingredient comes from pigs…which means that it’s produced in sweatshops, which buy their materials from backyard abattoirs. We had a global scandal based on contaminants – some intentionally introduced – into the supply chain.

Why didn’t the Food and Drug Administration prevent this from happening? Because there are 500 suppliers in China providing these materials, and the regulatory system doesn’t allow us to oversee this. And 85% of the active ingredients in the pharma industry are now produced outside the US. Governments can’t regulate their own supply chains, and they have even less ability to monitor these changes on an international level.

When we look at global challenges like climate change, we wonder where the leadership is from government. But governments are national – they’ve got voters and interests that are local. So we need a different mechanism.

In 1996, President Clinton convened a meeting of labor, manufacturers, consumer groups and activists and challenged those assembled to ensure that globalization didn’t mean a race to the bottom. Companies didn’t feel it was their responsibility for labor standards in the supply chain – everyone else felt that they couldn’t shirk that responsibility. Eventually, they agreed on a common set of standards, a code of conduct, and made it part of the supply contracts. “They harnessed the power of the contract – private power – to make public goods.”

Van Heerden points out that the contract from a major manufacturer is much more powerful than local authority. Most of these manufacturers never see an inspector. If they did, they’d bribe him. If they got fined, the fine would be tiny in comparison to profits.

This method doesn’t come naturally to multinational companies – their goal is profit. But they’re very efficient, and if they can get this right, it’s an incredibly powerful model. The best chance that a 15 year old girl in Bangladesh isn’t abused by her employer – we hope she’s working for a major multinational corporation that’s signed a code of conduct. And we don’t just trust – we trust, but verify, and we inspect the facility of organizations that sign onto these codes of conduct. “You don’t need to believe me, you shouldn’t believe me, you should go to the website, read the audit” and see for yourself.

“I hate the idea that governments aren’t protecting human rights.” This started out as a stopgap measure. But it’s starting to look like a new way of addressing governance challenges. This seems overwhelming for the corporations who participate – too daunting or dangerous to take on. But four thousands companies have taken this on, especially the sporting goods industry. The role models are there.

“Human rights comes down to a simple question: Can I give this person their dignity back?” His simple plea to every decision maker in the room – make a decision to run with the ball that government has dropped, because no one else will do it.

This post originally appeared on Ethan’s excellent blog My Heart’s in Accra.

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(Posted by Ethan Zuckerman in Transforming Business at 1:30 PM)

Jessica Jackley, one of the co-founders of Kiva, tells us that she’s going to tell us a love story. “The stories we tell each other, and tell about our own lives matter.” She first heard stories about the poor when she was six years old and in Sunday School. She was told that we needed to help and that Jesus wanted us to give to the poor, and she was psyched to help. But she was also very frustrated, because Jesus also said, the poor will always be with us. She said she felt angry, overwhelmed, like a homework assignment that couldn’t be completed. “I didn’t know what would happen when I ran out of things to give.”

As she grew up, the other stories about the poor were no more positive – “I got the idea that the poor in the world live lives wrought with suffering, sadness, devastation and hopelessness.” This led her to feel guilty about her relative wealth… which meant she stopped listening closely to their stories and stopped expecting real change.

“I gave when solutions were on sale – you can save a child’s life for the cost of a cup of coffee, who can argue with that?” The giving wasn’t out of a place of generosity or hope – it became a transaction, a purchase of the right to go on with her day and not be bothered by bad news.

Things shifted for her when she heard Dr. Mohammed Yunus speak, three years before he won the Nobel Prize for his pioneering work in microfinance and microlending. She was excited both because microlending looked like something she wanted to be a part of… and because the stories Yunus told about the poor were about strong, creative entrepreneurs, not about the helpless and desperate.

So she quit her job, moved to East Africa and started interviewing people who’d received $100 loans. She got to see the implications of these loans – the fact that people could send kids to school, put locks on their doors, buy sugar to put in their tea.

“Even if I could have taken a magic wand and fixed things, I would have gotten a lot wrong.” When people help themselves, they get to find their own solutions, which was humbling for her to discover. She also discovered that no one asked her for donations – if anything, they wanted a loan.

Jessica decided that passing on these stories would lead a group of people to want to lend money to the people in East Africa she’d meant. So she came back with a digital camera, did work her with partner Matt, and launched a site that she “spammed” to friends and family. in 2005, Kiva facilitated $500,000 in loans… now, five years later, it’s facilitated $150 million in loans in 200 countries.

“To me, Kiva’s really about stories – it’s about retelling stories about the poor.” The goal is to avoid the “donor-beneficiary weirdness” that characterizes a lot of aid relationships and to blur lines between rich and poor, leading to more open, just and creative interactions.

Loans are a form of connectivity. When you lend people money and they pay you back over time, it’s an ongoing relationship and the opportunity to build a relationship. And loans are a way to give community and money, which is more powerful than just providing money.

Jessica’s new project looks at entrepreneurship closer to home. Profounder, launching this week, is designed to provide crowd funding for investments from friends and family and provide returns to them. Founders can design terms for investment, and can give revenues from the business to investors, who can either keep those returns or automatically donate them to a charity. The project focuses on the idea that 85% of funding for new businesses in the US comes from friends and family. This process is usually pretty awkward, and Profounder makes it easier, more formal and better organized.

Jessica reminds us that these systems – Kiva, and Profounder – are just tools. We need to care to make them work.

This post originally appeared on Ethan’s excellent blog My Heart’s in Accra.

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(Posted by Ethan Zuckerman in Social Entrepreneurship at 1:00 PM)

Nic Marks founded the Center for Well-Being, a consultancy that tries to expand definitions of social and governmental progress to include broader quantitative and qualitative measures of well-being.

Martin Luther King didn’t say, “I have a nightmare.” Marks’s dream, he tells us, is that we’ll focus less on the nightmare and more on the dream. Modern film making is almost always about catastrophe – he references The Road, a bleak, post-apocalyptic film.

The environmental movement has gotten very good at using fear. But fear leads to a flight reaction, and scares people away. We need a better way to get people to engage.

When we think about positive visions of the future, we have a tendency to keep score in economic terms. But this is a vision based around greed. We’ve got enough, at least in developed societies. Our accounting systems track what we produce, but they don’t track what’s really important.

In 1968, Robert Kennedy began his ill-fated presidential campaign with a talk that closed with the phrase, “The Gross National Product measures everything except that which makes life worthwhile.” If RFK were alive now, Marks believes, he’d be asking economists to design measures that are broader, fairer and more indicative about what people really want and value. People think money is important, but that it’s not nearly as important as happiness, health and love.

Marks has spent his adult life figuring out how we measure happiness. He’s created the Happy Planet Index (I’ve written about the index here) to measure these factors. The goal is to measure how much well-being we get from the use of planetary resources – it’s an efficiency index.

He shows a graph that measures resource use and happiness – the top right shows some very happy countries that use a whole lot of resources – the US, Western Europe, some gulf states. The bottom left uses very few resources and is deeply unhappy. But there are a few nations – mostly Latin American – that are very happy and use few resources. Costa Rica leads the graph, with a life expectancy higher than that of the US, and has – according to the Gallup poll – the happiest people in the world. And they do this with a quarter of the resources used in the western world.

What’s Costa Rica doing right? The government has committed to carbon neutrality by 2021. 99% of their electricity comes from renewable sources. They abolished their army and put resources towards education and health. “And they’ve got that Latin vibe, don’t they?”

There’s no guarantee that the US is the future. It might be Latin America. We need to pull countries from the bottom (poor and unhappy) and right (rich and environmentally wasteful) towards Costa Rica.

We’re becoming less efficient in turning natural resources into the desired outcome – happiness. We’d all like to get to 2050 without some sort of apocalypse happening. There’s an incredible challenge – we need to massively cut down our carbon emissions while figuring out how to raise national well-being and happiness.

To do this, we need to create feedback loops. Human beings are deeply motivated by the now – put a smart meter on your house, and you (and your kids) will get very good about turning off the lights. Why do we hear the stock market close on the news every day and not our energy usage – we need to monitor the targets we want to reach. We need both positive and negative feedback, and reminders of what we should be doing to be happier and healthier.

What are the five things you should do every day to be happier? Marks and his colleagues did a study for the UK government to try to determine this. The first “secret to happiness” is connection to other people. Second, be active – go for a walk or turn on the radio and dance. Third, take notice of what’s around you – the seasons changing, the world around you. Fourth, keep learning – lifetime learning has a strong link to health in the elderly. This doesn’t need to be formal learning – it can be cooking a new dish or playing an instrument. Finally, give – we feel good when we give. Give two groups $100 – the people who spend money on others, rather than on themselves, feel much better at the end of the day.

These actions don’t need a lot of material goods to succeed. Happiness does not cost the earth.

Marks closes by quoting King again: “I have been to the mountaintop and I have seen the promised land.” Environmentalists and the business community need to go to the mountaintop and see a vision of the world we all want. We need a great transition to get there, and we need signposts, something like the Happy Planet index which leads us to happiness with doesn’t cost the earth.

This post originally appeared on Ethan’s excellent blog My Heart’s in Accra.

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(Posted by Ethan Zuckerman in Transforming Business at 12:30 PM)

Sheryl WuDunn is an author, lecturer and the first Asian-American to win a Pulitzer Prize. She leads the social investing consultancy TripleEdge. Her new book, “Half the Sky: Turning Oppression into Opportunity for Women Worldwide,” focuses on the challenges of women around the world.

WuDunn starts her talk with images from rural China in the 1990s. She tells us the story of a young woman who was pulled from school at age 13 because the school fees were too high. As it happens, the young woman was the best pupil in the school, and she continued traveling to the school and learning by sitting outside the door.

WuDunn wrote about the young woman in the New York Times and started getting donations from New York Times readers, including a $10,000 dollar donation which paid for her middle school and vocational school… and provided scholarships for all the other girls in schools. She went on to vocation school in accountancy, and now supports her family with the money she sends home. She describes this as a controlled experiment in the power of resources applied to women’s lives.

If the central challenge of the 19th century was slavery, and of the 20th century was totalitarianism, the challenge of the 21st century, WuDunn tells is, is achieving gender equity. Demographers tell us that there are 100 million missing women in the global population. “More girls were discriminated to death than all the people killed on battlefields in the 20th century.” In India, girls from ages 1 through 5 die at a 50% higher rate than boys – there’s less discrimination when they’re being breast fed, but when parents feed them solid food, they get far less than boys.

Poverty isn’t just about income, WuDunn tells us: it’s about spending. People living on under $2 a day spend, on average 2% on education. The same people spend 20% towards tobacco, beer, and prostitutes.

When Bill Gates visited Saudi Arabia, he was asked if the country could become one of the top 10 in global technology. Looking at the mandatory gender split in the audience, he said, “If you’re not fully utilizing the talent in the country, you’re not going to be in the top ten.”

Of obstacles to gender equality, WuDunn sees sex trafficking as the most serious. In the 19th century, slaves were worth about $40,000 in today’s dollars. Girls trafficked for sex are sold for a few hundred dollars. They’re more disposeable than African slaves were.

Women aren’t just sold into slavery – they’re victims of diseases that are deadly and debilitating. She tells us the story of an Ethiopian woman who experienced an obstetric fistula as the result of a pregnancy when she was 13. The village she lived with concluded that she was cursed, and put her into a hut without a door to be killed by hyenas. She fought them off with a stick, and crawled 30 miles to a village where a foreign missionary lived. The missionary brought her to a hospital in Addis Ababa where the fistula was repaired. She’s now a nurse – she’s part of the solution, not part of the problem.

When girls are educated, they marry later, have fewer kids, and educate them better. WuDunn recommends microlending, telling the story of a $65 loan to a Pakistani woman to open an embroidery business. The woman ended up hiring her husband to transport goods to market. They’re educating all three of their daughters, because education is what’s really important. Referencing Heifer International, she tells about a Ugandan girl who was able to go to school because a donated goat gave the family extra income. She was eventually about to come to the US on scholarship and recently graduated from UConn. At her graduation, she declared, “I am the luckiest girl alive because of a goat.”

WuDunn acknowledges critics of development aid like Bill Easterly and Dambisa Moyo, but urges us not to “throw the baby out with the bath water.” Instead, she tells us that, once you’ve taken care of your basic needs, one of the few things that can elevate your happiness is contributing to a cause larger than yourself.” In other words, giving money is a way to make ourselves happier.

She closes with the story of an American aid worker in Darfur, who witnessed horrible atrocities. She finally broke down when she came home and saw a birdfeeder, realizing that Americans can care not only for ourselves but for wild birds. With great fortune comes great responsibility – we’ve won the birth lottery, and it’s our job to use the blessings we’ve received to help the world.

This post originally appeared on Ethan’s excellent blog My Heart’s in Accra.

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(Posted by Ethan Zuckerman in Empowering Women at 12:00 PM)