GRI Equity - integral investing

The trouble with cancer is that you don't try to cure it until you're diagnosed with it, and then its too late. And the world has cancer, but we haven't admitted it yet. Another example of "the emperor's new clothes". The evidence and caricature presented by Common Weal is incontrovertible - new diseases, habitat loss, species extinction, climate change, biological mutation and more. And humanity continues to inject itself with the drugs of the petro-economy and war-like commerce. But the tide is changing. We are Waking Up To The Wave. In curing cancer the success rate is low, certainly less than 50% maybe as low as 20%, so we can be sure that our cure will be painful, imminent and contribute to uncertain side effects. The best cure is certainly for individuals to change behaviour, especially consumption habits, one step at a time, but now.

America has provided us with the luxuries of goods, services, policies and social openness that we all love. But it seems that lost in middle America is a pillar of deafness descended from the founders of America. A righteous rejection of science, starting with a creation myth which has even been admitted as such by the Vatican. Perhaps I ought to apologise for this bigotry, being a relative of one such founder who stood in the way of the emanicipation of slaves, but I remain not just surprised but shocked that so many wealthy, well educated families in the Bible belt (and elsewhere) continue to hide behind superstition in the face of science. The consequence of this blindness is felt around the world daily - today by textile workers in Asia and most Iraqis, tomorrow by someone else, maybe you or me.

However, rumblings are being felt. The evangelical Christian movement is sweeping other denominations out of the way in middle America. And this reflects a growing demand for spiritual awakening across all sectors of American society together with a more critical appreciation of religion. This will lead to heightened ethics in all areas because a critical appreciation of spirituality and consciousness leads quickly to empathy for those with less opportunity and an inner need to put yourself in others' shoes. Evangelical Christians for example are less prone to support killing for faith.

Putting yourself in the other person's shoes can be uncomfortable as the US and Europe are finding out. Proclaiming the virtues of competition and free trade is now haunting developed economies, as it should. America has been addressing the challenge of outsourcing in professional services for a few years now and it remains high on the political agenda. European labour mobility is providing opportunities for people from eastern European economies to find better prospects in richer European economies and helping to keep wage inflation dampened. And now the cry against "cheap Chinese imports" has been raised. How self-serving! American and European businesses, as well as politicians, have long known that that they needed to move up the value added chain, retrain their employees and provide alternative employments. Stories of people trying to retrain in North Carolina and having to pass high-school equivalency tests testify to the gross neglect of the wellbeing and nurturing of workforces throughout America - failure to offer vocational and recreational training is now punishing businesses and ALL their stakeholders - owners, managers, employees, customers, communities. Now that expectations have come to fruition they cry like children. Do not minimise the challenge of reengineering an industry, the pain of unemployment (that many of us have felt) and the disruption of uncertainty. But remember that the longer one takes to change, the more pain must be absorbed, so extending protectionism again is only going to retard the opportunities in America and Europe.

Geopolitics

The French said NO. And that is appropriate. The constution may or may not be worthy, but it is certainly too long and inaccessible. If people who do care can not understand it or its relevance it needs to be rewritten from scratch. The US model is pretty good being a simple statement of prime values and administrative guide delivered in a few pages (7 of A4 or 1 A3 according to the copies on my parents' wall) with a number of modifications since then. The talk of the implosion of teh EU is naive. Any organisation (including human beings) experiences some growing pains (its called experience) which lead to a better result. It is certain that transnational governance of common resources (like air, water, transaction media (ie money), biodiversity) is emerging along with community based administration policies. The constitution will be rewritten and the EU will move on.

The UK election put Blair back in Number 10. There was quite a kerfuffle in the media about Labour's failures but given the gross lack of alternatives people should be thankful that there is an intelligent, charismatic Prime Minister, even if his views are not always theirs. The irony is that Labour looks almost like the Conservatives in the 1980s. The turnout showed increasing growth of the Liberal Democrats who may become a worthy option in the coming term. As a general principal, independent politics are more appropriate in this era when communities need representation not partisan divisions.

Lebanon had an election for Prime Minister. A sign of gradually returning stability.

Installation of prime minister in Iraq occurred though teh administration continues to face civil strife.

Japan and China continue to scuffle. China's Vice Premier cancelled a meeting at the end of May with Japan's Prime Minister, which in China would be viewed as quite an insult. However, this primitive chest beating will provide a valve for expression and release of social tension without leading to real trouble. As with Taiwan, the relationship, is mutually beneficial and will continue to grow: China offers labour and markets, Japan and Taiwan offer capital and technology. As the cultural pride softens the strength of all economies will be enhanced.

The G8 meeting in July is going to be busy. The main themes for the UK Presidency of the G8 in 2005 will be Africa and climate change. Both are pressing issues for the world. Africa demands particular attention as world’s poorest continent. Climate change is happening and should be of concern for all. There is a massive popular movement to ensure that leaders hear the wishes of people without opportunity, such as resource poor families and the 2 billion people living on less than $2 a day. LiveAid8 will take place because of massive popular demand. If you wish to make a peaceful vote for peace and poverty alleviation, go there and be present to show that we must adopt more ethical and responsible global management of life on earth is to survive. It is to be held at the Gleneagles Hotel, Perthshire, in Scotland between 6-8 July, 2005

Russia continues to get out of hand. The despotic tendencies of Putin are flowering. Judgements against Yukos are seen to be unjust by popular media but internal dissention is treated in ways reminiscent of the Societ Regime. The deterioration of Russia's political capital continued as Yukos' Khordorkovsky is convicted and faces a long explulsion from society. Putin's hand is certainly strong, however, he has upset many people and made it almost impossible to predict the legal environment. This and his shrinking circle of loyal deputies is putting his rule in jeopardy and reducing the opportunity for stable development.

Rather surprisingly a move to consider impeachment of Bush for war crimes started in May. As Rep. John Conyers, the ranking Democrat on the House Judiciary Committee, wrote:

Risk and Terror

May 1st saw the two year anniversary of the "end of the war in Iraq". Later in the month W also said that the idea of human rights abuses at Guantanamo was absurd. (See Mark Fiore's animated take on the Newsweek article here.) The rate of killing in Iraq has not slowed down in Iraq and the evidence of prisioner abuse is from inside America not without.

Also in early May remembrance for the 60th anniversary of the end of World War Two (by its Western name) took place. The remberance in Russia was a welcome respite from the ongoing descent into autocracy. However, that war was another war financed by US industry and capital until 1942 when America joined the allies after Pearl Harbour. It was an opportunity to express regret and to forgive. Both seem to have occurred, though the irony of seeing the gatherings of leaders of western countries who have been bombing Iraq is plain. And the troubles in Palestine continue.

The need for the bully to become the role model continues. And there is strong support for this emergence within America. Modernaisation of the culture continues to be impeded by traditional ignorances fostered in the insular mid-west and bible belt, but even here common sense is beginning to win over bigotted prejudices. The concern that other countries, like Iran and north Korea, are pursuing nuclear weaponry is increasing and the need for "enlightened" western culture to put away the fire-crackers so that despotic regimes can not hide behind the excuse of "you have them" is increasingly necesssary.

The seventh Review Conference of the Parties to the Nuclear Non-Proliferation Treaty (NPT) opened May 2 at a time of heightened concerns about the spread of nuclear weapons, as well as the challenges posed by Iran's nuclear program and North Korea's withdrawal from the treaty regime. It is of course the US and allies who hold most nuclear warheads, some 26,000 out of 27,000 or so. "The fate of the most successful international security pacts in history hangs in the balance, as envoys from around the world meet to review the nuclear Non-Proliferation Treaty (NPT) at a United Nations conference. But US leadership is nowhere to be found. It is the latest sign that the Bush administration's counter-proliferation strategy has failed. " Joseph Cirincione, YaleGlobal.

Investment, Finance & V. C.

Two thirds of the way through the second quarter and the markets are down and under pressure. Many fund managers are facing declining portfolios, the urge to go to cash though their job is to be invested and the prospects of more volatility. This is the situation we expected, though there is much more and worse that may yet transpire. Lower growth and higher inflation are becoming reality. Sentiment is becoming bearish - portolios are moving into cash and bonds and fund managers are expressing uncertainty. Positive moves seem to be driven more by hype than fundamentals - just look at valuation benchmarks. So playing currencies may be the best trading game in town.

For those who prefer to invest in businesses, as we do, there are plenty of opportunities available, sometimes in unexpected places. Our conjecture that Germany and Japan are rejuvenating themselves seems to be showing signs of confirmation. Although general media coverage remains negative the reorientation of these cultures to more open institutions and competitive labour practices is continuing.

Germany is changing. The regional elections in May saw increased backing for Conservative Democrats while Socialists lost ground. This is a sign of an opening of German culture. Schroeder is certainly facing difficult challenges as employment law liberalisation causes unpopularity, but the changes being encouraged will add to the flexibility of German industry. One example of movement inthe right direction is the opening of BMW's high tech auto plant in Germany - this will support local wellbeing rather than exporting jobs. (It is exactly the sort of investment that textile manufacturers should have been pursuing throughout Europe in the last 10 years to avoid the pain of clothing quota lifting in January.) the whineging about foreign investors is understandable though misguided. It is unlikely that private equity is going to take over Germany, but the corporate transactions have galvanised a cross-section of industry to seek compromises.

John Mauldin has raised the point that with returns under pressure, the ability of investment managers to offer decent returns and be profitable is declining. Their cost structures will make it difficult to offer attractive products and it is likely that investors will become increasingly unhappy with underperforming portfolios, investment management houses will be vulnerable and investors will look for alternatives. One of the likely trends is going to be a restructuring of the relationship betweeen investor and fiduciary. The Vanguard model (where fees are a much lower proportion of funds under manangement) is going to become increasingly attractive as are other arangments of fixed fee and club structures.

Charlie McCreevy, EU commissioer with responsibility for Internal Market and Services, announced that an investigation into the uncompetitive market for retail banking is underway and a report will be delivered in September. McCreevy, who guided Ireland through its Tiger Decade may be the person who can force change. And it would be welcome. Not only might consumers see cost and time for cross-border (same currency!) transactions reduced, but it is likely that cross-border M&A will be facilitated. Both moves will raise competitiveness of the sector as well as liberate potential in other industries.

In a similar move, the UK government has demanded that retail banks improve their infrastrure so that electronic payments occur on teh same day instead of delays of 3 days, which earn banks an estimated $ 50 million in interest annually! It will be some time before the banks comply, but at least the pressure is on.

Although it had been expected that indictments in 2003 would make the market for independent research more buoyant, it appears that this has not been happening. BusinessWeek noted that poor promotion, hindrance from brokerages, competition and paid research is confusing the market. The benefits of obtaining independent research therefore remain high.

Responsible Investing

The 15-year track record of the index demonstrates that SRI performs competitively, and indeed sometimes outperforms, the broader market. "The Domini index has helped validate socially responsible investing through its long-term record, which is very similar to that of the S&P 500," said David Kathman, an analyst with mutual fund rating agency Morningstar who covers SRI. Since its May 1, 1990 inception through April 30, 2005, the DSI has generated 438.79 percent total returns, almost 60 percentage points more than the S&P 500's returns of 381.89 percent.

The majority of investment managers worldwide expect that SRI practices will become a common component of mainstream investment processes within 10 years, according to a survey by Mercer Investment Consulting (Mercer IC). This is likely to be an underestimate because the critical mass has obviously been achieved and the ability to offer integral investment management processes and structures is now a critical determinant of competitiveness. U.S. investment managers lag behind those in Asia, Australia, Europe and Canada in their belief that socially responsible investing will become the norm within a decade. Of the 195 managers questioned, 28% of those from Asia, 44% from Australia and 42% from Europe feel social and economic performance indicators will be mainstream in five years, compared with 11% of U.S. investors.

In this the year of microfinance, the FT has written a colourful case study of successful microlending in Mexico. The story describing microfinance in action is here.

Sirota Consulting tracked the stock prices of 28 companies that had monitored their employee morale during the past four years. The results: The 14 companies with "high morale" saw their stocks increase more than five times those of the half-dozen companies with "low morale" (16% vs. 3%). The stock performance of high-morale companies also bested the results of the industry average by a significant margin (16% vs. 6%).

We came across an obscure but potentially very revealing site The CatBird Seat. It offers a wealth of company information particularly relevant for due diligence checks.

Cadbury Schweppes has acquired leading organic chocolate brand and fair trade pioneer Green & Black’s in a deal estimated to be worth around £20 million. Green & Black’s CEO said “The premium quality chocolate market is growing fast globally and Green & Black’s taste combined with its organic and ethical integrity puts it into pole position to benefit from this".

Between 15 and 30 percent of Kimberly-Clark tissue products fiber originates from the Canadian Boreal Forest, according to a Greenpeace report, and only 19 percent of its fiber is recycled. Just before the annual meeting at Kimberly-Clark Greenpeace released a report skewering the company for sourcing fiber from the Canadian Boreal Forest and using minimal recycled content in its tissue paper products, such as the ubiquitous Kleenex brand.

As Sarbannes-Oxley starts to bite, the costs of compliance are not insignificant. Unfortunately the costs are proportionally much higher for small businesses at 2.5% of revenues for business under $ 100 million in turnover, compared to about 0.2% for businesses over $ 1 billion on turnover. The implication is that business design throughout the value chain, structure and operations will have a significant impact on profitability for starups and SMEs.

Venture Capital

Hedge funds are not the panacea that investors imagined. The Economist's chart here shows that returns have been lacklustre. Presumably the risk profile is also higher. These vehicles are loosely regulated, speculative in nature often run by traders (rather than investment managers) and often leveraged. 45% of assets are in fund of funds which have a double expense hurdle to cover before making money. As interest rates rise the challenge of covering the costs of leverage is rising. Poor performance is encouraging redemptions - investors don't want risk, just returns! - which often requires liquidation of better assets in the portfolio prematurely, while the dogs fester. The industry accounts for about $ 1 trillion in assets and though the pain now will result in a more robust marketplace, the reverberations will be felt throughout economies.

The number one reason for making angel portfolio companies unattractive to VCs is the fact that angels tend to give start-ups overly high, unrealistic valuations. 78% of VCs cited this concern in this survey by Lab2IPO, while only 50% of the angels (who answered this question; this question had a low angel response rate) reported that this was an often heard VC criticism. Not surprisingly, in answer to the open-ended survey question What do angels need to better understand? , valuation and valuation methodology was a top ranked response by the VCs.

A guide covering global emerging market VC was launched. The "Venture Capital and Private Equity Funds for development - Index 2005" is an initiative of the Netherlands Committee for Sustainable Development (NCDO). It is a first attempt to create a comprehensive list of all the Venture Capital Funds worldwide that invest in developing countries. The Guide contains 259 Venture Capital Funds investing in developing countries - 112 investing in Africa, 103 in Asia, 26 in Eastern Europe and the Middle East, 81 funds investing in Latin America, and over 60 funds with social and environmental criteria. More on the Guide Venture Capital Funds for Development can be found here.

A cleantech blog by expansion capital an emerging leader in cleantech VC is here.

Interest Rates and Currencies

As China takes on the role of commodity good manufacturer to the world, others, especially the US, are calling for a loosening of currency control. Do not expect this to happen soon, nor quickly. It is not China's culture to react in such a way nor is the rationale for doing so proven. When the change comes it will be gradual and done by China in the Chinese way.

The Euro faced weakness attributed to the difficulty of generating enthusiasm for teh European Constitution in France. It is trading about $ 1.25 /€ at the end of May. We expect this to be temporary and may offer an opportunity to restructure currency portfolios or a short term trading opportunity. The fundamental strengths remain.

US interest rates reached 3% in early May and are likely to continue rising steadily for another 1 - 1.5% before the pace slows. The fundamental imbalances in domestic and international policy and budget are not yet affecting consumer behaviour suffiently. The difficulties of managing the economy is increasing. Long term interest rates are flattening and there are emerging pockets of speculation in the housing market. Both trends contribute to volatilty.

The Federal debt is out of this world - So far in 2005 the total is almost $8 trillion. If you stacked that many dollar bills on top of one another, the pile would reach nearly 821,000 miles into space - 3.5 times the distance from the earth to the moon. (from BusinessWeek and David Batstone).

While normal economic adjustment, such as rising productivity and increasing value added, might mitigate concerns under normal circumstances, America is not tackling this problem at its root in basic manufacturing. In the textile sector, despite having a decade to rengineer industrial capacity to move up the value chain, nothing has been done so that today China is THE efficient low cost producer and the US administration is bullied by lobbies into protectionism of low end, uncompetitive businesses. This lack of efficiency and the attendant cost, either in currency/trade/investment or subsidies, are not going to go away until causes rather than symptoms are tackled.

Trade and FDI

The EU and US have moved to limit garment imports from China because of the boom in imports from China (resulting from lifting of quotas in January) and the threat to domestic clothing manufacturers. China had voluntraily raised tariffs on 78 groups but has now withdrawn these in the face of protectionism from the EU and US. The EU trade commissioner admits that the protectionism, which he insists will be limited in scope and duration, are to allow breathing room for adjustment. However, this removal of quotas was expected and some manufacturers have already adjusted business infrastructure. The UK garment manufacturing industry has already taken the pain and during tthe past 5 years has moved in to specialist manufacturing only with nearly all of the manuifacturing being outsourced, often along with investment in manufacturing plant, to China and similar low wage environments. The US and EU moves are disingenious and to the detriment of consumers and tax payers, as well as resource poor Chinese labour, with only antiquated and inefficient domestic manufacturers benefitting from continued "life support systems".

Wal-Mart is America's—and the world's—largest corporation. Its revenues are eight times those of Microsoft, and make up 2 percent of America's GDP. It employs 1.4 million people, more than GM, Ford, GE and IBM put together. It is legendary for its efficient—some would say ruthless—efforts to get the lowest price possible for its customers. In doing this, it has used technology, managerial innovation, but, perhaps most significantly, China. Last year Wal-Mart imported $18 billion worth of goods from China. Of Wal-Mart's 6,000 suppliers, 5,000—80 percent—are in China, not the United States. Popular demand in the US is not for more expensive US made clothes, but for less expensive Chinese made ones.

Pascal Lamy of France has won the race to lead the World Trade Organization. His diplomatic abilities may be what saves the Doha round of trade talks, though their utility seems to be waning.

Energy

The end of oil is approaching more quickly than expected. Jim Cusamano described the fundamental drivers that are forcing change at BeTheChange and some notes are available here. Coincidentally The Economist published a special report on Biofuels in the May 14 edition. Even teh US is finally beginning to recognise that their national security will be more effectively and economically served by having alternative fuels, than trying to acquire mineral oil properties by force or negotiation.

Ireland in particular seems to be adopting alternative fuels rapidly. The first offshore windfarm was recently launched; a collection of seven wind turbines capable of meeting the annual electricity requirements of 16,000 homes. Ireland is the second best place for wind energy in Europe after Scotland and is expected to export to Europe. Ireland is also planning to introduce modest tax advantages to encourage biofuels take up and use.

Climate Change and Environment

A voluntary air travel tax to fund aid for the world's poor was agreed in principle at a European finance ministers' meeting in May. The Franco-German proposal for an aviation tax will see a tax on airline tickets. Another option - a tax on jet fuel was rejected. Mr Juncker, who chaired the talks involving 25 EU finance ministers, said five or six countries were ready to go ahead. The tax is expected to be compulsory in Belgium, France and Germany, while Malta and Cyprus and Ireland would give passengers a choice as to whether they pay it. The EU is to prepare a formal proposal on the tax for the finance ministers' next meeting on June 7.

Rising temperatures in the North Sea have forced many species of fish, including cod and haddock, to shift their distribution, report researchers at the University of East Anglia. Species such as blue whiting and redfish could leave the North Sea entirely by 2050. Over the past 25 years, 18 fish species have sought cooler waters, some moving more than 100 kilometers northward. That is nearly four times the rate of movement seen in land-based birds, butterflies, and alpine herbs, according to the researchers, who described their work in the May 13 issue of the journal SCIENCE. The study suggests that fish may be more sensitive to climate change than land-based species and that fish stocks already strained could be at graver risk than previously thought. These findings could lead to renewed calls for tighter fishing restrictions.

This report from NASA is a great study on how human activities change the climate RAPIDLY. Prior to 1900, various wetlands ecosystems dominated the landscape of central and southern Florida. Throughout the 1900s, farmers and developers converted the wilderness into agricultural, urban, andsuburban lands. Among the most significant transformations was the draining of the wetlands in the Kissimmee River floodplain in central Florida north of Lake Okeechobee. Because large bodies of water—including inundated wetlands—do not change temperature as quickly as dry land, the wetlands would have cooled the area during the heat ofsummer and warmed it on winter nights.

This pair of images shows how landscape change in central and southern Florida could have changed the daily minimum (coldest) temperatures (left) and the length of time a region spends below freezing (right). Purple and blue areas have an increased risk of damaging freezes, while yellow and red areas are less likely to freeze. According to the simulation, the most damaging aspect of landscape-related climate change in Florida may be the decrease in minimum winter temperatures in the Kissimmee River floodplain and around Lake Okeechobee. Without the standing water to act like a hot water bottle, these areas of orange groves and sugarcane fields may experience colder temperatures and longer freezes today than they did in the past.

To learn more about how scientists from NASA, NOAA, Colorado State University, and the U.S. Geological Survey reconstructed the pre-1900 landscape of Florida and then predicted how the transformation may have changed today's climate, please read the feature story Deep Freeze and Sea Breeze.

Microsoft has stopped innovating! It is shocking but true and they won't admit it but its major software now copies Apple and Linux: Their next OS release's main addition is a local machine search facility - this is already built into Apple's OSX and its latest release Tiger has taken it to a level beyond MS's first step due for release next year! And they are now reengineering their wordprocessing and spreadsheet software to emulate web language HTML - this has been a feature of openoffice.org since inception! (I suppose their next "innovation" will be to implement tabbed browsing like that in Mozilla and Firefox!) We predicted that this was a logical evolution of applications in 1998 when linux moved on to the desktop and that is why we were confident to migrate to linux and openoffice, (without IT support!). It is a typical crime against competition that all those IT managers and CTO's have not the competence or courage to lead their organisations' tech infrastructure to a more cost effective, high performance platform. But Asia and China will overtake the west in this area as in so many others ...

China's biggest bank (still an SOE) decided that the cost of migrating all of its systems to Windows was too high, and the tech demand of the software would require more powerful hardware then they have with even more cost, and announced that the whole bank was going to Linux.

Microsoft's resistance to an EU ruling demanding it change monolopolistic behaviour is facing a deadline at the end of May. It is not certain that the EU will in fact be able to force compliance. Microsoft seems to have little regard for authorities and will continue to attempt "red tape delays". We migrated our systems, including desktop, to Linux over a year ago and have been very happy with functionality, performance, stability and security. And a recent upgrade of desktop hardware reminded us how inisidious MS is. Two issues grate on free market nerves: hardware vendors now design for Windows - in other words sale of their hardware is driven by the software monopolist, and the installation media of MS have now morphed in to a package so similar to Apple that its former attraction of flexibility and transparency of installation has been lost. It is quite plain that Microsoft is a monopolist without ethics. It is also obvious that many IT managers continue to praise the "emperor's new clothes". Well connected consultants are awaiting beta versions of Longhorn due in June. Longhorn is MS's attempt to make their operating system as good as Apple's. It will certainly be an improvement (it has absorbed a massive development budget) but will remain expensive, proprietary, less sophisticated than Apple's and not differentiated from Linux suites. Microsoft's new advertising mascot, the dinosaur, is appropriate for them and perhaps their customers who it is supposed to represent - greedy, inefficient, aggressive and extinct. It is overdue time for change. Demand that your CTO begins implementation of open systems now.

MIT are designing an ultra low cost PC with a target price of $ 100 and an intended delivery in emerging economies. This will be a waste of time and money today because the unit will be so poorly powered that it is not useful, even insulting. Better now to aim at the $ 3-400 mark where a viable unit can be delivered. In order to make the low cost model viable tremendous institutional support will be required in emergin economies governments and education systems. It is a step in the right direction, but walking before running is appropriate.

Integral Systems and LOHAS

Art often liberates understanding, potential and personal energy.

The connection between art and business was made to me several times in May. At BeTheChange there was poetry, music and film used to illustrate and enliven, such as poetry from Ray Anderson, chair of Interface. A friend is organising a concert at a Houston museum opening whose guests are a cross-section of society including business and oil. He has also helped raise the funds to restore a centuries old organ in Italy. Another friend was off to Solvenia to guide executives in seminars on organisation development during a programme of music and art. Art not Oil was brought to our attention too.

As we heard from Chris Astill-Smith of Metabolics at BeTheChange.org.uk about the importance of micronutrients in the diet, new research carried out at Oxford University revealed that high levels of school age children are suffering behavioural and learning disorders because their diets are deficient in vital nutrients.The research, carried out under rigorously controlled conditions by Oxford University’s Department of Physiology, shows that the performance of underachieving children, some of whom were disruptive, improved dramatically when their diets were supplemented with fish oils. The researchers found that some 40% of the children in the study made dramatic improvements in reading and spelling when given the fish oil supplements, which are high in omega-3 essential fats.

Fishing stocks are so depleted now that the idea of restricting fishing worldwide is now being mooted. Governments from 45 countries met to discuss the crisis in world fish stocks. We have certainly noticed it at Ballin Temple. 100 years ago families working on the farm resisted having salmon on the menu more tan once a week - they were "jumping out of teh Slaney", today the stocks are well below the minimum required to maintain the population - its an endangered species!

Newsweek interviewed Bill McDonagh who has pioneered natural design with Michael Braungart. The interview is online here and is worth reading for the insights to products and services of the future.

The International Labour Organisation (ILO) has produced a new report suggesting that over 12m people are working in coercive, slave conditions and calling for a global alliance to tackle the problem. The report, 'A Global Alliance against Forced Labour' says that 9.8m people suffering forced labour are working in the private sector, including over 2.4m victims of human trafficking. The largest number of forced labourers is in Asia, followed by Latin America. Children under 18 years old make up 40 to 50 percent of the total.

A study of 3,687 pairs of seven-year-old twins has revealed strong genetic roots for poor behaviour in children who also show signs of psychopathic traits, such as a lack of remorse or understanding for the feelings of others. The research at King's College, London led by Dr Essi Viding, said that it suggested that much teenage antisocial behaviour has origins earlier in life and that efforts to prevent it need to begin at a young age. The research has established that boys with a particular version of a gene called MAOA are more likely to grow into antisocial adults, but only if they are maltreated as children.

A groundbreaking study on stem cell research that could one day provide a cure for debilitating illnesses was funded with less than €160,000 a year in largely government grants. Prof Woo Suk Hwang of Seoul National University and his South Korean team announced in May that they had successfully created batches of embryonic stem cells from patients. Their study fulfils one of the basic promises of using cloning technology in stem cell research that a piece of skin could be taken from a patient and used to grow the cells. This development is interesting in that the breakthrough was not in North America or Europe and was achieved on a limited budget. The risks associated with bioengineering, however, remain far higher than those experienced in the petro-economy of the 20th century and grossly under-estimated by practitioners and funders.

Earlier this month, Le Monde chose Esther Duflo as the "Best Young French Economomist in 2005." Duflo is professor of economics and director of the Poverty Action Lab at the Massachusetts Institute of Technology (http://www.povertyactionlab.com/). "The objective of the lab is to improve the effectiveness of poverty programs by providing policy makers with clear scientific results that help shape successful policies to combat poverty."

A survey by Hine Vintage Cognacs into the UK’s luxury spending habits contains some interesting findings for the organic food market - it is not considered luxury anymore. Ten years ago, over a third of those questioned considered buying organic produce a luxury. Yet today a mere 10% consider organic food purchases a luxury.The exception to this trend would seem to be the 16-24 year olds group who stubbornly continue to view organic as a luxury. However, this doesn’t mean they are spending less on organic food than other groups, it’s just that they have a different perception of it. In fact, despite splurging money on the latest designer gear, 40% of this age bracket actually perceives organic food to be their greatest indulgence above personal shoppers, plasma screens and palm pilots.

US organic food industry is slowly coming to terms with the fact that a lawsuit brought by one organic blueberry grower from Maine could outlaw the use of common food processing ingredients, throwing the sector into turmoil. In January of this year the US Court of Appeal in Boston ruled that three of the seven issues raised by Arthur Harvey over inconsistencies between the Organic Rule and the 1990 Organic Foods Production Act (OFPRA), on which it was based, were valid. Harvey challenged that the Organic Rule’s blanket exemption of non-organic products “not commercially available in organic form” was out of step with OFPRA. Whilst the Appeal Court has said that it will be down to District Courts to agree the details, in theory the January ruling could mean that ingredients such as corn starch, carob bean gum and kelp are banned from use in food labelled ‘organic’. Furthermore, he argued that the Rule’s provision allowing the use of synthetic substances in processing of items labelled ‘organic’ went against the spirit of OFPRA. It is reassuring to see that the US organic sector's willingness to compromise its standards is declining. This will enhance the success of organic businesses because the differentiation will be legitimised in more consumers' minds.

On a rather amusing note, we hear that people reducing their meat consumption in the US by replacing it with substitutes such as Quorn are being taken by surprise as they become more "windy" while their digestive system adjusts to the new diet. Typical of the US some are attempting to put the blame for their "fluffing" on the manufacturers! Ah well ... I suppose the lawsuits will subside as their bodies adjust.

Bob Hunter who inspired Greenpeace died in May at the tender age of 63. This is highlighted because his story is one of "being the change" and is an example for anyone who wants to be true to themselves. "Our grandchildren will be dragging us into the streets and demanding to know how we did this to the planet."

Activities, Books and Gatherings

May was great fun. I gave myself the luxury of spending three days at BeTheChange. It was an invigorating and rewarding time which continues to provide fuel to our various activities. Some notes are online here.

The retreat Nurturing Natural Performance is now available. A course will be run during the week of July 11 (as well as bespoke sessions). It is challenging, fun and will test the potential of even the most successful executives and entrepreneurs.

It appeared that my reading list conspired to synchronicity. Finishing Pratchett's Pyramids (for the second time) during BTC was appropriate - the parody is of quantum mechanics and space-time phenomena, the setting "ancient Egypt". At the same time I finished an excellent book on philosophy from Socrates to 1940ish called The Idea of Nature by RG Collingwood. This is well written, disciplined and covers all the bases. It should be rquired in any Philosophy 101 course and what is most interesting is the advanced stage of his thinking - he recognised the immanence and transcendance of nature, the emergence of enlightenment, the indivisibility of matter and energy. And all before 1945. It had been a coincidence picking it off a bookshelf at home - one of my grandparents must have read it! On the way to BTC I happened to see a reviewers copy of Pratchett's Darwin's Watch in a used-book store and picked it up before the official release! Its pretty advanced stuff (fortunately tempered by Dr Pratchett's insight and wonderful use of language) and discusses space-time phenomena. It referenced Pyramids and Zeno/Xeno's paradox within the first 20 pages! A new acquaintance generously gave me a copy of Intelligence in Nature by Narby an anthropological study on intelligence other than human - an enjoyable read. All of these readings and the ideas expressed by leading scientists like Chopra and Sahtouris dovetail with one another to support the rationale for a new emerging paradigm of human behaviour. It has all enhanced my confidence in the rationale for Astraea and GRI Equity. The past three decades have been tough for pioneers like Whitmore, Henderson, Sahtouris and others, but the emergence of enlightenment among us all is assured. (Unfortunately it will still be a race against time, like the cure for cancer.)

A friend sent a copy of Orion magazine which some of you may enjoy. It is in the same space as Resurgence.

The Ecologist continues to impress with its enlightening coverage. Examples include the disclosure of the toxic and carcinogenic effects of teflon and the destruction of native communities.

Although I've not yet read it Freakonomics is now on my list. It is reputed to be an enjoyable and disciplined read in economics. One example the authors provide is that the reason for the decline in crime in the 1990s in America was the leagalisation of abortion in 1973 which allowed mothers/parents who were not well equipped to rear children to opt out of that mistake, thus reducing the proportion of children brought up in resource poor households.

"What The Bleep Do We Know" has opened in Europe and the DVD will be available in summer. This is a must see for anyone interested in personal development, the meaning of life, consciousness or leading edge science. And its great fun!

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May Round-up

Perspective