Author Archives: GreenBiz.com

Driving sustainability at Mauna Kea Golf Course

Emerging leaders within the golf industry are starting to align with sustainability because it makes good business sense and benefits the local community and environment.I had the opportunity to work with Mauna Kea Golf Course & Beach Hotel, a Prince Resort Property in Hawaii, on developing its first sustainability-focused case study (PDF), which aligns with the United Nations Sustainable Development Goals and the Hawaii 2050 Sustainability Plan (PDF).Mauna Kea Golf Course stepped up to implement sustainability focused initiatives before we even completed the project. For example, during its annual Tommy Bahama Golf Tournament on the infamous Par 3 third hole — situated on a pristine oceanside location — guests arriving to play the hole were challenged to carry the ball over the water.Every golf ball that lands in the water ends up being carried by waves, crashing into the lava rock and dispersing microplastics, which can harm marine life and water purity.When golfers hit shots into the water, it puts natural habitat and biodiversity at risk because every golf ball that lands in the water ends up being carried by waves, crashing into the lava rock and dispersing microplastics, which can harm marine life and water purity.By working with Director of Golf Josh Sillman, we created an "Ocean Plastic Awareness" initiative where we handed players biodegradable golf balls before they teed off.The Ecobioball is 100 percent biodegradable and turns into fish food after only 48 hours.It was encouraging to see the participation of the players and their eagerness to learn how to lower their impact on the environment and why it's an important initiative. A few golfers were reluctant to try; one specifically hit a "normal" golf ball directly into the ocean just to spite the efforts. The good news, though, is the initiative raised over $1,000 for Hospice of Hawaii in only a few hours.There’s more details in Embracing Sustainability at Mauna Kea Case Study. As you’ll see, it features the methodology behind preserving historic island traditions, benchmarking progress and driving sustainable impact long-term for members, guests, locals and the planet.The case study features the strategy, community engagement, native environment conservation, employee stewardship, responsibility toward protecting the planet and an explanation of how the golf course is planning for the future to align with organizations committed to sustainability.Mauna Kea Resort is a prime example of how a golf course can be a catalyst for growth and positive change in the community, especially when aligning to sustainable business goals that benefit people, planet and profit. The resort is taking steps to lower its greenhouse gas emissions by shifting to hybrid fleet vehicles and investing in environmental management systems to manage natural resources more efficiently.Additionally, its goals include reducing water consumption 20 percent by 2020 by integrating saltwater-savvy grass species such as paspalum, which makes up 40 percent of the golf course.It's essential for golf courses to collaborate with "outside the golf industry" environmental organizations in order to shift the paradigm to a more sustainable industry. Mauna Kea collaborated with numerous community organizations such as the Coral Reef Conservation and University of Hawaii at Hilo to conduct a study that has helped gauge coastal waters in the Puako community and the potential impact from sewage on coral reefs in the vicinity.It's clear that Mauna Kea is dedicated to sharing its journey, and when this becomes the standard in the golf industry, we can drive measurable impact by being more transparent and meeting people where they are.Let's block ads! (Why?)

General Motors wins cost savings with wind power

Car manufacturer General Motors (GM) is gone with the wind for all of its cost-saving benefits. "It provides economic certainty to electricity forecasts," said Rob Threlkeld, GM's manager of global renewable energy strategy, as well as savings over the years. Threlkeld discusses the path to fulfilling GM's RE100 commitment to become 100 percent powered by renewable energy, including two deals to source wind power from Ohio and Illinois, respectively. "There are sound business reasons when you look at where wind and solar have gone," said Threlkeld. And it is easier than ever to make the smart economic and environmental choice due to virtual power purchase agreements, the Renewable Energy Business Alliance and the Business Renewables Center. Where once a renewable power deal took over a year to finalize, it now takes four to five months. "We're streamlining the process," said Threlkeld. Let's block ads! (Why?)

This utility CEO's powerful vision reimagines solar

The following Q&A is an edited excerpt from the Bard MBA’s December 15th Sustainable Business Fridays podcast. Sustainable Business Fridays brings together students and faculty in Bard’s MBA in Sustainability program with leaders in business, sustainability and social entrepreneurship.Vermont’s Green Mountain Power obsesses on its customers. Under the leadership of CEO Mary Powell, it has radically restructured, positioning itself as an energy transformation company focused on meeting the needs of consumers with integrated, cutting-edge services that help them use less energy and save money.In the process, the utility has become the first to help its ratepayers go off the grid, the first to offer residential solar customers the Tesla Powerwall battery and the first and only utility to achieve B Corp certification. And consumers have responded. Green Mountain Power has grown from serving 88,000 customers in 2008 to serving over 260,000 today, with revenues of more than $640 million and $2 billion in assets.Last month, the Bard MBA’s Meghan Altman talked with Mary Powell about the company’s transformative vision and where she sees the future of the energy system.Powell has served as president and CEO of Green Mountain Power since 2008 and she’s been the backbone of its comprehensive restructuring and service quality improvement. In 2014, Powell was recognized by POWER-GEN as the Woman of the Year. In 2016, Fast Company named her one of the 100 most creative people in business and in 2017 CEO Connection designated her one of the top 25 most influential women of the mid-market.Meghan Altman: How did green mountain power become a B Corp?Mary Powell: How do you respond to utilities in larger markets that say that what you’re doing at Green Mountain Power isn't possible for them?My response is that we’re an example that’s absolutely scaleable to any location. Developing a deeply loving connection with those you serve is possible whether you serve thousands or millions. The reality is that, yes, we do create an intimate feel but we don’t personally know everybody. I grew up in New York City and go back there all the time. There are miles and miles of neighborhoods in Brooklyn and Queens where it’d be possible to create a more intimate connection and help customers who want to think about energy as a service to decarbonize their homes and have a more economical future. The opportunity is there for those who want to seize it.The more robust challenge is serving customers in states that don’t want transformation or aren’t hungry for transformation.Developing a deeply loving connection with those you serve is possible whether you serve thousands or millions.Altman: How did green mountain power become a B Corp?Powell: [Chris Dutton], the former CEO of Green Mountain Power, was the one who got the whole thing started, and he supported me in pursuing B Corp Certification. Whenever we were having a hard time explaining why we were doing it, I’d just say, "We need to become the Ben & Jerry's of the energy world." So there was nothing that could have made me happier than when we had Ben and Jerry standing with us when we did our B Corp announcement. I believe it was Ben who said that we were the first utility in the galaxy to be a B Corp!It was just common sense to focus on the people and the communities we were serving, and on doing well by doing good. Overall, it happened very organically. By the time we got to the certification part, we were already on the path because we were obsessing on our customers and moving very rapidly to a different future on their behalf. We knew that we’d be okay and that our investors would be okay.Altman: Do you have other utilities contacting you to learn how they can do what Green Mountain Power is doing?Powell: We’ve had more and more companies reaching out and wanting to learn more about what we’re doing. We’re definitely leading the way in the context of how we think of ourselves. We talk about that here: that we’re an energy transformation company focused on personalized energy solutions.What’s really cool is that when others come to talk about that, we learn about the things that they’re thinking about that we could actually scale faster because we’re smaller. And there’re also always operational things that we learn from others, especially companies that have more invested in core systems or in things that I’d call the meat and potatoes of the business.  Altman: Success for the company means figuring out how to never raise rates. What’s the company’s future in making this a reality?Powell: It’s tough because for the first time in years we did just have to do a rate increase of 5 percent.It’s a last resort for us and makes us want to work harder to figure out new ways into value propositions for our customers. There’s no doubt that, in some parts of the country, loads are flat and are threatening to decline because consumers can now self-supply. That’s the future that we’re leaning into. That’s the future we want to see from an energy system perspective, but at the same time, we absolutely do not want a future where we’re saying to those customers who for whatever reason don’t transform that the traditional delivery system is now three times the cost.That’s the heart and soul of what we’re trying to do. That’s how to lead the transformation so that we’re earning our way into the new value and revenue streams that are coming to offset the loss of the traditional. We have our work cut out for us. But if it were easy, everyone would be doing it. Let's block ads! (Why?)

Why 2018 could be a breakthrough year for SASB

Kurt Kuehn, former chief financial officer of UPS, has a confession to make: He historically has not been a fan of integrated sustainability and financial reporting. Indeed, he has been known to say they belong in parallel universes.But Kuehn was also one of the earliest executive-team champions of the logistics giant's environmental programs. He helped craft and produce the first UPS corporate sustainability report back in 2002 and is well acquainted with the survey fatigue issues that many companies face when it comes to tracking, collecting and reporting on environment footprint metrics.Kuehn believes that what makes the reporting system created by the Sustainability Accounting Standards Board (SASB) unique — and that could help drive it mainstream with the financial community over the next two years — is its focus on encouraging companies to share the metrics that really matter to their industry in a way that is easily accessible for investors."It's really a form of risk awareness and mitigation … of enlightened self-interest," he said during a panel discussion at the board's annual symposium in late November.It's really a form of risk awareness and mitigation.This year's gathering was attended by more than 375 individuals representing investor relations teams, corporate sustainability strategists, institutional investors and regulatory agencies. "The idea that sustainability matters are divorced from financial issues is wrong, as long as they are focused on materiality," said Jean Rogers, founder and chair of the SASB standards board.  When SASB emerged in 2011, much was made of the perceived overlap with other reporting frameworks designed to help companies disclose progress against efforts to improve the environmental footprint of their operations — through carbon emissions reductions, water conservation, waste management and natural resource stewardship, among other things."We're trying to achieve a world where an analyst can through a distinct crystallization of what matters," noted Kirsty Jenkinson, managing director of sustainable investment strategies for benefits company Wespath Investment Management.In mid-2017, the leaders of SASB and the Global Reporting Initiative took pains to rebut that perception by publishing a joint editorial that differentiates the missions of the two frameworks. "Rather than being in competition, GRI and SASB are designed to fulfill different purposes for different audiences," they wrote.More specifically, GRI is for sustainability practioners and a broader community of stakeholders such as consumers, they argued, while SASB's mission is to educate those seeking to make investment decisions."Material information is the right of every investor," Rogers said, during her opening speech at the symposium. "I'm worried about Mr. and Mrs. 401K," she added, recounting a recent conversation with an investment adviser who downplayed the weight of environmental, social and governance issues.The conditions certainly seem almost perfect for the next big update to SASB's work: the anticipated finalization of codified, industry-specific disclosure standards across 11 sectors, due in early 2018. According to SASB's annual analysis about the "state of disclosure," almost three-quarters of the top 10 companies across 79 industries are reporting on at least some metrics that SASB seeks to codify. Right now, though, about half of them use generic statements as part of vague, unquantified "boilerplate" legal copy to mention these factors. Alongside this, 95 percent of the 250 largest global companies produce some sort of separate sustainability or corporate social responsibility report.And more of them are pledging to disclose even more data: As of this week, 237 companies representing a market capitalization of more than $6.3 trillion have lined up to support the recommendations of the Task Force on Climate-related Financial Disclosures, part of the G20's Financial Stability Board. These are suggestions for voluntary transparency."High-quality disclosure is essential for focusing finance and markets on delivering the transition to a low-carbon economy," said Mark Tucker, chairman of financial services giant HSBC Holdings Group. "The TCFD offers the prospect of a comprehensive framework for disclosure. The challenge and opportunity now is to put theory into practice and implement the TCFD recommendations consistently and sustainably across countries and sectors."Meanwhile, interest in this information — especially among institutional investors — is reaching unprecedented levels. Big ratings companies such as Morningstar and Standard and Poor's are snapping up this information, and influential fund managers such as the Vanguard Group demand more information about the materiality of climate-related risks."Our investors are long-term-oriented," said William McNabb, chairman and CEO of Vanguard, during a keynote interview at the SASB conference. "The impact on the value of a company of not handling the risk can be profound."Vanguard made headlines over the summer when McNabb said its team will push companies for more transparency. "It's the responsibility of boards to reconsider how — and how thoroughly — companies disclose this information," McNabb added. "We will be sponges for the information that they are creating, and what we are looking for over time is better disclosure, especially as we look across multiple companies."Looking for early adoptersLast year, JetBlue became one of the first companies, and certainly the first airline, to start using the provisional version of SASB's reporting guidelines — albeit in a separate report. "These additional disclosures focus on four sustainability issues and 10 metrics that are deemed to be material for our industry," the company wrote. "Disclosure is not a static concept. Markets are dynamic and disclosure must keep pace."While not all of the disclosures are related to environmental issues — labor relations are also a big deal for airlines, as are safety factors — the report includes four specific measures that are part of the SASB code: gross global Scope 1 emissions; a description of the long-term strategy for managing those emissions; total fuel consumed; and notional amount of fuel hedged.  Sophia Mendelsohn, head of sustainability for JetBlue, said one of the biggest stumbling blocks when it came to internal advocacy of the SASB code was short-term-ism of most quarterly financial updates. Many questions asked by analysts make it difficult to advocate discussing long-term problems. "Our first problem is one of linguistics. These are risk factors and they are called factors for a reason," Mendelsohn said.We're trying to achieve a world where an analyst can through a distinct crystallization of what matters.If a board is reluctant to disclose certain information for competitive reasons — or because it's difficult to benchmark it against other companies — for now, it might be possible to find compromise by at least moving to report on whether it is a focus for the board. "There is a powerful compulsion in just asking whether or not certain data is disclosed to the board," Mendelsohn said.Former UPS executive Kuehn said SASB's decision to focus on requesting that companies disclose very sector-relevant information should help push it into "prime time" over the next year. "These are not extensive, they are a few key elements that are critical across industries," Kuehn said. "That means your peers will be talking about the same things."Real estate investment trust Host Hotels & Resorts, which owns the iconic Marriott Marquis in New York's Times Square, is also another early adopter of the SASB reporting recommendations and now includes energy efficiency and water usage metrics in its 10K reports.Brian Macnamara, senior vice president and corporate controller for the company, said the long-term effect of these measures are becoming material on results. The framework also helps the REIT better compare operating results of different properties. So, for example, the company studies energy per occupied room and water usage per square foot of property. It's important that these measures are considered thoughtfully and the defense of them is "rock solid" against questions from auditors or lawyers.Talk to the lawyers Indeed, when it comes to the case against including sustainability measures in core financial disclosures, one of the biggest concerns remains the potential legal challenges associated with being more transparent. For one thing, the SASB guidelines force companies to look at future issues rather than report on things that have happened in the past — the big exception is requirements around addressing significant risk factors. But by choosing to talk about some issues and not others, companies potentially could leave themselves open to fraud accusations, according to a panel of lawyers and regulatory experts that spoke during the SASB conference."The moment you voluntarily open your mouth and omit something material, you lie," observed Donald Langevoort, the Thomas Aquinas Professor of Law at the Georgetown University Law Center.What constitutes something "material"? According to the panelists, it's any information that could be significant to an investor making an investment in a company or making a voting decision. "The people at the very top have the power to shut you down. You have to be extra persuasive," Langevoort suggested.Let's block ads! (Why?)

Sustainability metrics should grow along with bond yields

Could sustainability opportunities be captured without access to tangible metrics? For most of us, across all areas of business, the answer is likely a "no." In the absence of sound and comparable measures, any conversation regarding business opportunities and risks remains an opinion. Yet PwC’s latest Annual Corporate Directors Survey reports that almost one-third of the nearly 900 corporate board respondents have indicated they do not need nor have any expertise in the area of sustainability.The financial community is made up of number and metrics-oriented people. We draw a deeper awareness to an issue when the magnitude of a phenomenon or a market trend is presented in measurable terms. At PineBridge, our credit analysis relies on understanding the sustainability implications of corporate actions on the financial health of an issuer by assessing its governance practices, the impact of its environmental footprint on the cost of its operations, the impact of labor relations in the instance of the unionized workforce and more. Publicly listed U.S. companies of the caliber of Amazon, Dow Chemical, J.P. Morgan and UPS are represented in our universe of high-quality bond issuers along with hundreds of other brand names. They share a history of healthy cash-flow generation and a commitment to advance the economic value contributed to their respective end-markets. Could companies of such stature be at risk of running into "unsustainable" business practices?Yes, they certainly could and, in some cases, they already might have.In the absence of sound and comparable measures, any conversation regarding business opportunities and risks remains an opinion.In the U.S., the Sustainability Accounting Standards Board (SASB) has pioneered the work of codifying industry-level accounting standards for sustainability along with reference accounting metrics that make the financial and operational impact of ESG factors comparable and transparent. Nevertheless, the disconnect between governance practices and capital markets' increasing appetite for transparency is clear. To date, according to SASB’s 2017 State of Disclosure report, less than 30 percent of U.S. publicly traded companies have used quantitative metrics to address sustainability risks and opportunities in their SEC filings.Our team has followed closely the work of SASB since its inception and adopted its assessment of materiality to account for those sustainability factors most likely to yield measurable financial and operational impacts. By applying the industry-level accounting metrics proposed by SASB to all corporations in our investible universe, we have been able to quantify the level of ESG risk concentration across sectors in terms of the number of companies affected by the SASB standards.Our research found some impressive statistics from a materiality standpoint.Over 50 percent of companies in our investment grade universe have direct exposure to environmental factors such as water scarcity and wastewater management.About 47 percent are affected by their own energy management practices (or lack thereof).Nearly one-third are directly affected by issues surrounding employee health and safety and issues involving data strategy — both in terms of privacy as well as security concerns.Not surprisingly, at the sector level, these sustainability dimensions exhibit a strong correlation with the structure of the supply chains and value networks that underpin the scale and growth potential of each sector.  The most striking data point to us is the issue of end-to-end lifecycle management of products and services. Product lifecycle management directly affects over 70 percent of U.S. investment-grade companies.As a formal sustainability metric, it falls under the SASB’s Business Model and Innovation dimension and encompasses both a company’s ability to manage the shelf life of an existing product in a sustainable fashion as well as the launch of new products. Ultimately, the setup of an efficient lifecycle workflow is commensurate to how the design, sourcing, manufacturing, sales and after-market support functions are connected. It stems from an organization’s innovation efforts and its ability to grow it into a competitive advantage. As SASB measures point to, innovation is indeed a sustainability opportunity for companies.The most striking data point to us is the issue of end-to-end lifecycle management of products and services.Sustainability metrics are a powerful tool in redefining the key competitive advantage of each participant in the supply chain — and not only in terms of a company’s ability to retain and grow its customer base by expanding its sphere of influence in terms of consumer behavior. They foster productivity advances, lower cost of manufacturing and a more scalable distribution network within a sector.In order to measure sustainability performance, we have introduced Key Risk Indicators (KRIs) that measure how an issuer is capturing (or not) the opportunities brought by pivoting a business model to be ESG compliant in the context of its own sector.Not surprisingly, the most effective KRIs track material long-term trends including the level of capital expenditures devoted to fuel economy for transportation or automotive companies, or the size of the recycling programs for hardware and telecommunication companies compared to the cost of storage.As sustainable business practices continue to contribute to cost leadership and productivity advances in a more transparent and measurable way, from an investment perspective investors and asset owners will be able to identify which sustainability trends are most likely to catalyze near-term positive externalities and deserve a premium on corporate valuations and favorable cost of capital assumptions.Let's block ads! 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Lisa Jackson on designing the iPhone with the environment in mind

"We strongly believe that if what we do matters, it should show up in our products," said Lisa Jackson, head of sustainability at Apple and former administrator of the U.S. Environmental Protection Agency. Beyond the new iPhone 8 and iPhone X's design for great user experience, the new products were created with the environment in mind. "We set about focusing on the carbon intensity of aluminum," she said, for example, by cutting down on waste, increasing renewable energy and using hydro-powered smelting. As a result, the carbon intensity of the iPhone 8 is 11 percent less GHG per gram than the iPhone 7 and 83 percent less than the iPhone 6. The company's other planet-minded decisions were to use smaller, efficient packaging and engage some of its packaging suppliers in committing to source 100 percent renewable power. Jackson also talks about Apple's commitments on renewable energy, circular materials and how she views the current EPA. Let's block ads! (Why?)

Unilever teams with big banks on blockchain for supply chain

Over the summer, more than a dozen food companies and retailers — including Walmart, Nestle and Tyson Foods, and motivated by tech giant IBM — formed a consortium dedicated to using blockchain technology to gather better information on the origin and state of food.Scant details have emerged about their intentions, but that hasn't stopped one company, Unilever, from moving forward with a year-long pilot project that will use blockchain to manage transactions within its tea supply chain.The new taskforce, announced at a sustainability conference this week in Paris, will see Unilever, the big British supermarket chain Sainsbury and packaging company Sappi team up with three global financial services companies: BNP Paribas; Barclays; and Standard Chartered. Together with several technology startups, the group will develop a system that will track and verify contracts for farmers in Malawi that supply tea to Unilever and Sainsbury.This is a potentially huge deal for the impoverished African country: After tobacco, tea is Malawi's second biggest agricultural export. The United Kingdom is hands-down the biggest customer for that supply.According to the group, the initiative could reach up to 10,000 farmers. The idea is to provide preferential pricing for those who are focused on sustainable farming methods designed to increase harvests without using more land. That's where the banks come in: They're interested in helping finance farms that have committed to these practices, but it has been difficult to validate which ones truly are following through.This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts ... throughout the entire supply chain."This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts in a secure way, throughout the entire supply chain," said Marguerite Burghardt, head of the Trade Finance Competence Center for BNP Paribas, in a statement. "This will benefit the entire supply chain ecosystem, enabling financial institutions to broaden the scope of their financing offers and to propose financial incentives to their customer clients, based on their environmental and social standards."The blockchain is the underlying ledger system in digital currencies such as bitcoin, but it can be used to manage and append information related to all manner of transactions or contracts. Many large financial services firms are committing millions of dollars in research and development to explore and test potential applications, but the technology is also capturing attention in sustainability circles.For one thing, many experts believe it could play an integral role as an enabler of peer-to-peer trading of electricity across microgrids, as a mechanism for managing renewable energy investments and myriad other applications that point to a decentralized power grid. Just as important: The blockchain is seen as another means of helping improve supply chain transparency.That's the focus of the year-long project being driven out of the United Kingdom, backed with about $700,000 in private and public funding, including the U.K.'s Department for International Development. The application will track two main things: the origins of some tea supplies used by Unilever (its brands include Lipton and Brooke Bond) and Sainsbury (which recently debuted a "Fairly Traded" label); and the sustainable wood fibers in certain Sappi packaging used for the products.One of Unilever's goals is to source all of its raw agricultural products sustainably; as of May 2016, it had reached about 60 percent."This innovative new technology will help us increase sustainable sourcing, enhance the livelihoods of the smallholder farmers we work with around the world, and help to make sustainable agriculture mainstream," said Keith Weed, chief marketing officer and head of sustainable business for Unilever, in a statement.  The system relies on technology from four startups: FOCAFET Foundation, which provides open source product identifier data; Halotrade, working on ways to use blockchain to offer incentives for ethical sourcing; Landmapp, developing a mobile app for land rights documentation; and Provenance, piloting ways of using blockchain for verifying the origin of materials and products across supply chains.Jessi Baker, founder of London-based Provenance, told GreenBiz that one goal of the pilot project is to study ways that organizations and banks can help scale the Sustainable Development Goals more systematically by better accommodating emerging new financial models, such as mobile banking, that are bubbling up in emerging economies. The project itself had its origins in some research within the University of Cambridge Institute for Sustainability Leadership."We're exploring how banks, plus corporates, plus startups can help attack the SDGs, and that segued into the beginnings of work we've done with Sainsbury's and Unilever to form a much bigger project which is connecting provenance and trade finance, which is potentially a huge lever to supply chains become more transparent and sustainable," Baker said.While tea crops are the first focus — Unilever and Sainsbury's share some of the same supply chain —  the hope is to expand the test into other areas during the second half of the year-long pilot, she said.Watch this spaceManuel Gonzalez, North America head of startup innovation at Rabobank, described blockchain as potentially the dramatic development for food supply-chain transparency since double-entry accounting. Provenance is part of the second cohort for the bank's Terra accelerator program, which teams big companies such as Nestle and BASF with entrepreneurs to help them test their ideas "at scale."Gonzalez is closely watching these two other blockchain companies:Arc-Net: Based in Belfast, Ireland, the company was founded in 2014. One of its missions is to incorporate DNA data as part of the chain of custody. One of its latest customers is a craft beer company in Ireland, which will use the system to share ingredients information with beer drinkers.Ripe.io: San Francisco-based Ripe Technology is developing a system that combines sensors, the internet of things and blockchain to collect data about food quality, safety and origin. It's testing its system with local farmers in places such as Peterborough, New Hampshire, where the technology is capturing information about tomatoes. The company's partners in this effort at The Cornucopia Project and Analog Devices.Let's block ads! (Why?)

Influential investors urge 100 carbon-intensive companies to step up climate action

Even before an expected 50 world leaders arrived in Paris this week, French President Emmanuel Macron's hastily arranged One Planet Summit appeared to be making quite a splash. In fact, the anniversary of finalization of the Paris Agreement looked set to create even waves bigger than those from last month's fortnight-long U.N. climate change conference across the border in Bonn.For if COP23 in Germany aimed to assess how the world would keep the Paris Agreement on track after this year's Trump-sized distraction, this week's summit — according to its host at least — is about reigniting the global drive for governments and businesses to accelerate the decarbonization of the global economy.And fresh from 54 high profile companies' calling on world leaders to boost ambition on climate policy, another "unprecedented, huge and global" initiative launched Tuesday to coincide with the opening of the summit could end up playing a key role in pushing some of the world's biggest emitters towards more sustainable business models.Today, as many as 225 influential global investors with more than $26.3 trillion in assets under management pledged to engage with 100 corporates estimated to be responsible for around 85 percent of total global greenhouse gas emissions, so as to step up their ambition on climate action.Dubbed Climate Action 100+, the new initiative is being coordinated by five partners: Asia Investor Group on Climate Change (AIGCC); Ceres; Investor Group on Climate Change (IGCC); Institutional Investors Group on Climate Change (IIGCC); and Principles for Responsible Investment (PRI).The hope is the coordinated effort to engage with many of the world's most carbon-intensive firms could have "considerable ripple effects," according to Anne Simpson, investment director of sustainability at CalPERS, one of those investors backing the push for major companies to align their business plans with the goals of the Paris Agreement.With trillions of dollars' worth of influence behind it, the five-year initiative will make it even harder for any major listed firm to ignore or downplay the climate-related risks they face."Our collaborative engagements with the largest emitters will spur actions across all sectors as companies work to avoid being vulnerable to climate risk and left behind," Simpson said. "Money talks, and if we can deploy capital behind and the power of the financial markets behind the Paris agenda, we can really ensure that companies begin to make the transition that's necessary to keep global warming to a safe degree."The collaborative initiative — which boasts a raft of high-profile investors such as Allianz, AXA, BNP Paribas, Church Commissioners for England, Deutsche Asset Management and Hermes as members — developed the 100-strong target list using CDP data on companies' direct and indirect emissions associated with the use of their products.Unsurprisingly, the list is littered with huge companies in the oil and gas market such as ExxonMobil, BP and Shell; aerospace giants including Airbus and Boeing; energy majors E.ON, Centrica, and General Electric; automotive giants such as Volkswagen, Ford and Volvo; and consumer goods players, including Proctor & Gamble, PepsiCo, Nestle and Panasonic.With trillions of dollars' worth of influence behind it, the five-year initiative will make it even harder for any major listed firm to ignore or downplay the climate-related risks they face.It looks as if pressure on international climate change laggards is about to crank up several more notches two years to the day after nations signed up to the historic Paris Agreement and its goal of building a net zero emission economy this century — an ambition that has forced more investors to realize that carbon-intensive assets now face a significant risk of being stranded by the drive to decarbonize the global economy.Each of the 225 investors signed up so far to the new initiative have agreed to initially engage directly with at least one company on the 100-strong list. "Engagement," they say, largely means dialogue in and around company boardrooms, including investors potentially lodging proposals at board meetings aimed at improving governance, disclosure and action on climate change.Specifically, investors engaging with these 100 corporates will apply boardroom pressure towards delivering three overarching goals:Implement a strong governance framework, which clearly articulates the board's accountability and oversight of climate change risk.Take action to reduce greenhouse gas emissions across their value chain, consistent with the Paris Agreement's goal of limiting global average temperature increase to well below 2 degrees Celsius above pre-industrial levels.Provide enhanced corporate disclosure in line with the final recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and sector-specific GIC Investor Expectations on Climate Change, when applicable, to enable investors to assess the robustness of companies' business plans against a range of climate scenarios, including "well below" 2C and improve investment decision-making.The call to action may fall short of the more combative approach favored by some divestment campaigners. But it will make it increasingly difficult for listed firms to simply dismiss calls for them to develop a business plan that is compatible with deep decarbonization or ignore the new guidelines on climate risk disclosure.The launch of the group also follows increasing moves at boardroom level on addressing environmental risk over the past year, with perhaps the most high profile success being the vote on ExxonMobil board earlier in the summer, which mandates the oil giant to produce annual climate risk assessments, contrary to the wishes of its management.There's nowhere to hide from climate risk — we need to address this. We have the tools to help these companies drive this forwards.Nevertheless, significant resistance pervades at boardroom level, according to a report last week by NGO Preventable Surprises, which suggests major investors — including names such as BlackRock, Vanguard, InvestCo and BNY Mellon, none of which have yet signed up to today's initiative — on occasions still voted against greater climate disclosure in 2016. Moreover, a separate report by ShareAction (PDF) suggests that despite some green leaders in the shape of BNP Paribas, UBS and HSBC Holdings, few European banks have yet put in place a coherent action plan to manage complex climate risks. Clearly, there is still much work to do to change attitudes at boardroom level.But speaking during a briefing on the Climate Action 100+ initiative last week, CalPERS' Simpson said dialogue remained the most effective means of pushing for change at corporates, arguing divestment effectively "lets companies off the hook." "Engagement is not a soft option, but if we don't make sure that these companies make the transformation to a low carbon economy, we are exposed to the risk of their emissions, not just directly through the investments that we've got in those companies, but also through the indirect impact on all the other assets in our portfolio," she said. "So there's nowhere to hide from climate risk — we need to address this. We have the tools to help these companies drive this forwards."Indeed, hiding from climate risk is becoming harder. After a year that is likely to be the most expensive on record from an extreme weather disaster point of view, analysis released this week (PDF) by think tank ECIU suggests scientific studies are increasingly attributing extreme weather events to climate change.Since the conclusion of the COP21 summit in Paris on Dec. 12, 2015, scientists have published at least 59 research papers on the attribution of specific weather events to climate change, according to ECIU. And, of these, 41 conclude that climate change indeed has increased the risks of a given type of extreme weather event, such as storms, drought, flooding and wildfire outbreaks.Commenting on the study, Friederike Otto, deputy director of the Environmental Change Institute at the University of Oxford, said vast strides in attribution science in recent years was greatly improving knowledge of climate risk to help inform policymaking."We're now finding that for many kinds of extreme weather event, especially heatwaves and extreme rainfall, we can be quite confident about the effect of climate change," she said. "Whether policymakers are looking at local issues such as flood protection or involved in the global climate change negotiations, the more information they have about climate change impacts now and in the future, the better decisions they're able to make. This ECIU report shows just how quickly knowledge is accumulating, and I think it's only going to accelerate."Clearly, the scale of climate-related risk facing the 100 biggest emitting global companies never has been clearer, nor has the urgency for action to be taken. The signal today from more than $26 trillion-worth of investors through the new Climate Action 100+ is therefore hugely important, and makes it even harder for climate laggards to continue turning a blind eye to what Bank of England Governor Mark Carney once described as the "tragedy on the horizon."In that sense, Macron's One Planet Summit — convened to mark two years' since the historic COP21 conference — could yet again crown Paris as the global capital for climate action.Let's block ads! (Why?)

Enel, Google and other businesses power past coal

Business stands ready to partner with governments to help deliver the vision of the Paris Agreement. But in order to successfully navigate the potential disruption created by the low-carbon transition, companies need to know that governments have a clear destination.By steering strongly with loud and clear policy signals, governments can help businesses to fully engage and deliver the scale and speed of decarbonization needed to limit global warming to well below 2 degrees Celsius.One of these clear policy signals came to the fore last month in Bonn, Germany, during the annual gathering of policymakers, forward-looking companies and non-state actors known as the Conference of the Parties (COP23). At COP23, the U.K. and Canadian governments launched the Powering Past Coal Alliance. Bringing together a group of more than 25 countries, states and regions, this alliance sends a powerful message that coal’s time has passed.The declaration stated (PDF) that the health effects of air pollution from burning coal, including respiratory diseases and premature deaths, impose massive costs in both human and economic terms. Recent analysis has found that more than 800,000 people die annually around the world from the pollution generated by burning coal. One U.K. study found that deaths related to emissions from coal cost the country’s economy between $2.91 billion and $8.42 billion in a single year.Now is the time for business to harness the level of ambition shown by governments, to drive real change in the global economy, protect the health of vulnerable people and limit global warming. The alliance invites companies to sign the Powering Past Coal Declaration, which supports governments with a commitment to powering their operations without coal.100 percent renewableMany forward-looking businesses already embrace the shift away from coal and other fossil fuels, by committing to shift to 100 percent renewable power. The RE100, a partnership between The Climate Group and CDP, is a collaborative global initiative uniting more than 118 influential businesses committed to 100 percent renewable electricity.Together, they are creating more than 155 terawatt-hours (TWh) in demand for renewable electricity annually — about as much as it takes to power Malaysia.Companies such as Apple, BMW, BT, Coca-Cola European Partners, General Motors, Microsoft Corporation, Google and Unilever have committed to going 100 percent renewable and it’s proving to be good for business. These companies are part of a group that outperformed companies in the Bloomberg World Index by 9.6 percent and the Dow Jones Sustainability World Index by 19.6 percent, according to CDP data. "Electricity costs are one of the largest components of our operating expenses at our data centers and having a long-term stable cost of renewable power provides protection against price swings in energy," said Urs Hölzle, senior vice president of technical infrastructure at Google.Now is the time for business to harness the level of ambition shown by governments, to drive real change in the global economy.Many of these companies are looking beyond their own operations and actively helping to push the global market for renewables forward. For example, HSBC recently announced it will provide $100 billion in sustainable financing and investment by 2025, while also committing to reduce exposure to thermal coal and transition to 100 percent renewable electricity."We plan on working closely with RE100, other corporates, governments and regulators to open up renewable energy markets and support the decentralization of power generation across our operational centers," said Andy Maguire, group chief operating officer at HSBC Holdings. "This will enable HSBC and other corporates to develop PPAs globally and support the transition to a low-carbon economy and 2-degree world."Meanwhile, leading utilities such as EDP and ENEL have set science-based targets to help transform energy markets and deliver their corporate strategies. "Enel’s engagement in climate action is an integral part of the group’s business strategy, as shown by our pledge to become CO2-free by 2050 and our focus on the group’s renewable growth," said Enel Group CEO Francesco Starace.A just transition Such collaboration between government and business can be a force for real and positive change. But as the transition away from coal gathers pace, it’s vital to ensure that workers' rights are protected.Companies increasingly see the need to consider the rights of workers in the energy transition. Those who do not risk facing the growing economic headwinds that often accompany higher unemployment, such as increased taxes and stagnating growth. "Part of this just transition is to invest more money in stimulating the right transition," said Paul Polman, Unilever CEO and a leader of the B Team, a global nonprofit that brings businesses together to collaborate on social and economic good.Following the launch of the alliance, B-Team leader and General Secretary of the International Trade Union Confederation Sharan Burrow said the transition needs to secure decent, low-emission jobs while upholding rights, protecting vulnerable workers and communities and leaving no one behind.Let's block ads! (Why?)

Gen Alpha: Change the water, not the fish

Some of us toiling in the sustainability industry say we do so for future generations — and hope that they will look back and celebrate our selfless efforts. But how often do we think in any detail about those whose interests we aim to serve?My recent travels have rammed home this question, surfacing an idea worthy of Mao Zedong: If you’re trying to change the world, don’t try to change the fish — change the water, the lakes, seas and oceans in which they swim.Let’s start with the fish, our next generation of humans. Keen to gain an edge in tomorrow’s markets, analysts have dubbed them "Gen Alpha." As The New York Times explained in 2015:For professional trend forecasters, a generation (as in Generation X or Y) is less a collection of individuals than a commodity: to be processed into a manufactured unit, marketed and sold to clients. To get there first and define the next next generation is like staking a claim in a gold rush.Generational researcher Mark McCrindle noted: "There are more than 2.5 million Gen Alphas born globally every week. When they have all been born (2025), they will number almost 2 billion. They start school next year and will be the most formally educated generation ever, the most technology supplied generation ever and globally the wealthiest generation ever."Global experimentExpand the spotlight to the family environment Gen Alphas will grow up in and there are clear patterns, in the developed world: "There is the age of parents (older), the cultural mix (more diverse), socioeconomics (slightly wealthier), family size (smaller), life expectancy (longer)." Then comes the really big unknown, technology:Generation Alpha is part of an unintentional global experiment where screens are placed in front of them from the youngest age as pacifiers, entertainers and educational aids. They began being born in 2010, the year the iPad was introduced, Instagram was created and "app" was the word of the year, so they have been raised as "screenagers" to a greater extent than the fixed screens of the past could facilitate. For this reason we also call them Generation Glass.Next, zoom out to examine the wider habitat in which Gen Alpha is evolving. Here we are conducting even more profound experiments, concentrating the human population into increasingly smart cities — albeit in the context of some really dumb policies in terms of issues such as immigration and climate change. Barring major reversals such as pandemics, however, Gen Alpha will be increasingly urban. So it’s time to probe the digital waters in which the next generation will swim.Barring major reversals such as pandemics, Gen Alpha will be increasingly urban. So it’s time to probe the digital waters in which the next generation will swim.In Barcelona to speak at November’s Ship2B Impact Forum, I visited Francesca Bria. She has led the development of Barcelona’s Digital City Plan, as chief technology and digital innovation officer. She advocates both increasing digitalization and increasing democracy — an outcome she sees as seriously endangered if our data continue to be controlled by the likes of Amazon, Facebook and Google.While most people focus the "push" (supply) side of technology, she stresses the "pull" (demand) side, arguing for digital innovation to ensure greater collective intelligence in citizen decision-making. As she told Bruce Sterling in a Wired interview, "I think we are going towards hybrid models where citizens will have a type of self-governance and be directly involved in things like allocating budget, taking decisions and managing projects."The same mindset inspires our project with Innovate UK, Britain’s innovation agency. Since 2007, it has committed more than $2.12 billion to innovation, matched by a similar amount in partner and business funding. In the process it has helped 8,000 organizations with projects estimated to have added more than $18.84 billion to the U.K. economy, creating nearly 70,000 jobs.We are exploring how the opportunities flagged by the U.N. Sustainable Development Goals can be viewed as a "purchase order from the future (PDF)" for both businesses and cities. Specifically, we are investigating how cities can nurture innovative small and medium-sized enterprises working on solutions to critical urban challenges.Shortly before I visited Barcelona, Volans and Innovate UK ran a workshop in Nottingham focusing on emerging solutions to air quality problems. The companies presenting ranged from giant automaker Nissan, turning a new leaf with its electric vehicles, through to Blaze, an early-stage firm working on radically improving the wellbeing of cyclists.Digitalization is pivotal to most solutions on offer, including a scheme designed to switch hybrid vehicles automatically to electric propulsion during peak pollution events. And it will be central to later events on the aging challenge posed by Gen Alpha’s grandparents and great-grandparents, slated for Newcastle, and on the future of the built environment, to be held in London in the spring.For many tourists visiting Nottingham, the draw is Robin Hood and his Merry Men. For our delegates, however, a key attraction was Robyn Scott of Apolitical, the online platform for policy innovation. As they put it: "Whether we like or dislike government, love it or despair of it, most of us can agree that government plays a pivotal role in solving wicked problems — from the refugee crisis and the strain of urbanization to climate change, cybersecurity and adapting to a world where an algorithm somewhere is chasing your job."Apolitical explained: "Around the world, the hundreds and thousands of men and women working in government are tackling similar problems. Often, the solutions they find can be shared. But with public servants working under tight time pressure and often in silos, good ideas often remain confined to a country or a sector. This leads to duplication of effort, wasted taxpayer money and poorer services for citizens."To misquote Churchill, first we shape our technologies, then they shape us. If Gen Alpha is to prosper and be merry without crashing the biosphere, massive investment is needed to ensure that citizens, cities and corporations align in pursuit of sustainability. The evidence suggests that adapting our digital habitat will be at least as important as schooling billions of Gen Alpha small fry.Let's block ads! (Why?)