INNOVATION MANAGEMENT, ENTREPRENEURSHIP AND SUSTAINABILITY University of Economics, Prague

1. The Quiet Sustainability Transformation Benefit Corporations, Worker Cooperatives, and Local Living Economies Arnim Wiek School of Sustainability, Arizona State University Tempe, USA INNOVATION MANAGEMENT, ENTREPRENEURSHIP AND SUSTAINABILITY University of Economics, Prague May 31, 2019

2. Pioneering Businesses • Organic / Sustainable Practices • Cooperative business • Closed loop Systems • Land trust Dottenfelder Hof, Bad Vilbel – farm, bakery, creamery, seed bank, Café • Regional focus • Embedded in the community • Multi-functional/integrated • Education

3. Comprehensive Sustainability • 35+ genuine principles • Including • product/service fulfills basic/sufficient human need • Operations based on 100% renewable Energy Sources • 50%+ locally/regionally sourced and distributed • Healthy work-life balance and Programs • Significant Employee-Ownership and Participation Basile, 2011; Bornstein, 2010; Dyllick & Hockerts, 2002; Ellis, 2010; Gibson, 2006; Hiller, 2013; Honeyman, 2014; Nicholls, 2008; Schaltegger & Wagner, 2010; Wiek & Larson, 2012; …

4. Overview • Business as usual & Incremental Change • Transformational Change • Cases from the U.S. (Arizona) • Too quiet? What is needed

5. Business as usual • Resource exploitation, Contamination, Emissions • Wage Discrepancies, Concentration of power and Profits • Cheating and immoral behavior (Partial Interests) • Mass Consumption of Products and Resources

6. Incremental Change • Giving back 1% of profits • Corporate Public Health (obesity) Initiatives • Corporate Feeding, Clothing, etc. Initiatives • Corporate Philanthropy

7. “a delicious, easy and affordable meal solution for busy moms everywhere”

8. New Principles & Practices • Comprehensive Sustainability • Responsibility beyond the Enterprise • Collaboration, not competition • Transfer, not growth

9. Transformations • Benefit Corporations and B Corp Certification • Worker Cooperatives and Employee-owned Businesses • Local living economies • Impact Investments & Sustainable business incubators

10. Benefit Corporations • New corporate Form that includes positive impact on society, workers, community, and environment in addition to profit as legally defined goals • Type of Social Enterprise • Revisiting fiduciary duty • Verification against Third-party Standard • B Corp Certification (5,000+ worldwide) • AZ Law in 2014 (one of 35 states) • Italy, Columbia, Canada; also UK, Germany

11. Benefit Corporations in Arizona

12. B Corps in Arizona

13. Sinagua Malt • Entrepreneurial solution for declining flows in rivers • Verde River / Camp Verde, Arizona • Produces malt from barley • Barley is grown around Camp Verde to replace water-intense crops (alfalfa, corn) • Malt is used by craft breweries in Arizona • Registered AZ benefit corporation

14. Verde River Flows and Use

16. Sustainability Performance • Reduced GHG emissions (distribution) • Increased water flows • Recycling of byproducts • drip irrigation, fertilizer, no pesticides • High satisfaction of workforce • Working with the local farms • pubic Benefits: Access, bird watchers, kayaking, etc. • Pays fair wages • No model for redistribution of profits • Highly Collaborative

17. Worker Cooperatives • Corporate form with advanced governance approach • 7 Principles: Shared Ownership, Collective business decisions, redistribution of profits, positively influencing communities, Committed to Sustainable Development • Goes back to 18th Century • Many cooperatives, but few worker cooperatives • Support structures: e.g., New York City • Main Street Employment Act (2018) • AZ Law in 2016

18. Worker Cooperatives in Arizona

19. Technicians for Sustainability • solar design and installation • Founded 2003 by Nichole and Kevin Koch • Over 2,500 systems installed in Tucson area • In 2018, installed 5.1MW (10,000 US tons CO2) • $8-10m annual turnover • Converted to employee-ownership in 2017 • 55 employees, 17 employee-owners

20. Timeline 2003 – Established as a private company 2010 – 1st attempt to convert to employee ownership 2011 – Amicus Solar purchasing cooperative 2014 – Certified B Corporation 2017 – Employee-owned cooperative (14 employee-owners) 2018 – incorporated as a Public Benefit Corporation

21. Cooperative Design • Pathway for employees to build buy-in equity through profit sharing • 75% super-majority required sell or change mission • In event of sale, all profit made over book value must be distributed to another worker cooperative • Board of directors: All members • Monthly member meeting • Operational management by CEO (employee)

22. Cooperative Membership • Process • Employed for 1 year minimum • Apply for Candidacy (6 months) • Complete Candidacy Period (6 – 12 months) • Voted in by 2/3 of existing owners • Buy 1 Share ($10,000) • Qualifications • Thinking long term • Acting like a team player • Showing company values

23. Sustainability Performance • Renewable Energy Provision • Grey-water system and native landscaping • All job materials, packaging, and office waste used by community for chicken coops, outdoor playsets • Collective governance • Stable jobs with decent wages • 2:1 highest to lowest wage ratio • Community programs • Educational Programs • Transformational workforce

24. Local Living Economies • From sustainability-oriented businesses to an Economy • Transformations • Examples • Local Living Economy Bellingham, WA • Bohlsener Muehle Network, Germany • Agrivision, Switzerland

25. Grain Economy in Arizona • Flour • Processed Grain Clean Grain (heritage wheat) Millers Bakers Farmers Raw grain Unmalted grain Maltsters Brewers • Spent Grain bread • Bread Beer Clean Grain (wheat, barley) Malt

26. Primary Grain Production Grain Intermediate Products Grain End Products / Waste Pane Bianco ● ● Hayden Flour Mill ● Sossaman Farm 2012 ● BKW Farms Miscellaneous Small Consumers

27. Primary Grain Production Grain Intermediate Products Grain End Products / Waste Pane Bianco ● ● The Wren House Brewing Noble Bread ● ● Hayden Flour Mill ● Sossaman Farm ● Mediterra Bakehouse 2014 ● BKW Farms and mill ● Dragoon Brewing ● Barrio Bread

28. Hauser Farms ● ● Sinagua Malt Primary Grain Production Coppertop Alehouse ● Speck Farms ● Grain Intermediate Products Grain End Products / Waste Pane Bianco ● The Wren House Brewing ● ● Wilderness Brewing Noble Bread ● ● Hayden Flour Mill ● Sossaman Farm ● Ken Noah Farm Hiscox Farm ● ● Mediterra Bakehouse 2019 ● BKW Farms and mill ● Dragoon Brewing Pueblo Vida Brewing ● ● Barrio Bread

29. Hauser Farms ● ● Sinagua Malt Primary Grain Production Coppertop Alehouse ● Speck Farms ● ● Other Brewery Grain Intermediate Products ● Other Brewery Grain End Products / Waste ● Other Bakery Pane Bianco ● Pinnacle Farm ● ● Proof Bakery The Wren House Brewing ● Other Brewery ● ● Wilderness Brewing Noble Bread ● Other Farms ● ● Hayden Flour Mill ● Sossaman Farm Barrio Grains ● Other Farms ● ● Ken Noah Farm ● Other Farm Hiscox Farm ● ● Mediterra Bakehouse 2021? ● BKW Farms and mill Other Farms ● ● Other Bakery Other Brewery ● ● Dragoon Brewing Pueblo Vida Brewing ● ● Barrio Bread Other Brewery ● Other Farms ●

30. Transformation

31. Hayden Flour Mill • Jeff Zimmerman, amateur baker, looking for locally grown and processed flour from heritage grains in 2011 • Connected with • Chris and Marco Bianco, Phoenix • Steve Sossaman, farmer, Queen Creek • Gary Nabhan, Native Seed Search, Tucson • Glenn Roberts, Anson Mills, Charleston, SC • Founded Hayden Flour Mills in 2012 • Grew and milled first batch of Sonoran White in 2012 (2t of seed from Roberts)

32. BKW Farms / Barrio Bread • Brian and Ron Wong, of BKW started growing Sonoran White • Converted 300 acres (of12,000) to growing organic heritage grains • BKW were encouraged and supported by • Native Seed Search • $50,000 USDA Sustainable Agriculture Research and Education grant (same one that Hayden Flour Mills benefited from) • Karen Dotson, retired Tucson Water planning manager • small-scale milling facility • Don Guerra (Barrio Bread) provided stable demand • Produces around 800 loaves / day • Started in a garage, received usda grant • Future plans

33. Too Quiet? • Lack of documentation • Lack of Awareness • Lack of capacity • Lack of coordination • Lack of Rigorous Assessments

34. How We can Help

35. Conclusions • It is happening  • Uptake / Development is slow • Support is urgently needed