A picture illustration shows U.S. 100-dollar bank notes taken in Tokyo August 2, 2011. REUTERS/Yuriko Nakao/File Photo
Reporting by Virginia Furness; editing by Simon Jessop and Jane Merriman from Reuters • Reposted: March 29, 2023
Companies are spending up to half a million dollars a year on a sustainability rating to meet investor demands for such data, yet are often dissatisfied with the results, new research shows.
Publicly-listed companies spend, on average, between $220,000 and $480,000 on ratings-related costs per year, with their private counterparts being billed for up to $425,000, based on a survey by sustainability consulting firm ERM. Common criticisms related to the accuracy and transparency of the data and ratings, as well as a company’s ability to correct errors, the report said.
Growing demand for environmental, social and governance (ESG) data and a reliance by many smaller investors on external providers to assess companies has driven rapid growth of the unregulated industry, drawing the attention of regulators.
The ERM report said companies’ dissatisfaction with the accuracy of ratings was based largely on their experience of finding errors in raters’ analysis of company supplied data, undermining their trust in the overall rating.
Almost a third of the 104 companies surveyed said they had a “low” to “very low” confidence that the ESG ratings accurately reflected their ESG performance.
But they are driven to secure ratings by investor demand, with 95% of companies saying this was a factor for them engaging with ESG raters.
Investors, too, are spending large amounts on ESG data and ratings, with costs ranging between $175,000 and $360,000, the ERM said, although many reported having only “moderate confidence” in the accuracy and utility of these ratings.
Among the contributors to the $140 million WaterEquity Global Access Fund IV are Ecolab, Starbucks, Gap, Reckitt and DuPont. The companies have contributed to a $140 million fund run by WaterEquity, whose co-founder is Matt Damon. By Patrick Kennedy from the Star Tribune • Reposted: March 28, 2023
Ecolab is investing $10 million to a new fund that hopes to bring clean drinking water to 5 million people around the world.
Among the other contributors to the $140 million WaterEquity Global Access Fund IV are Starbucks, Gap, Reckitt and DuPont.
The fund is being managed by WaterEquity, an impact investment asset manager whose co-founder is the actor Matt Damon. The announcement came last week as the United Nations Water Conference was set to start.
The companies are all part of the Water Resilience Coalition, a CEO-led initiative to bring attention to and take action against a growing global water crisis. Nearly 2 billion people today live in water stressed areas and, according to the coalition, that number may grow to half the world’s population by 2050.
“As a global water leader who helps customers manage 1.1 trillion gallons around the world, Ecolab believes that water stewardship and sustainable business growth must go hand in hand,” said Emilio Tenuta, Ecolab’s chief sustainability officer.
Starbucks’ contribution is $25 million. The fund also has a $100 million commitment from the U.S. International Development Finance Corp.
Tenuta said Ecolab not only believes the cause is the right thing to do but also boosts “the business case for sustainability by showing a positive return on investment and a positive impact,” he added.
The fund is part of a new investment portfolio by the Water Resilience Coalition. More investment will be needed to fund the nearly $1 billion in collective investment opportunities identified by the portfolio.
The portfolio may eventually include other funding vehicles including private equity investments, microloans and impact bonds.
By Kristen Sullivan from triple pundit.com • Reposted: March 27, 2023
Committing to meet environmental, social, and governance (ESG) objectives and targets is one thing. Acting on them is quite another. What are businesses doing to prepare for high-quality sustainability and ESG reporting, and what challenges are they uncovering along the way? To find out, Deloitte surveyed 300 public company executives to get a pulse on current trends and sentiment. Here are five takeaways from the front lines of real-world change.
Embed ESG in the corporate strategy
Nearly 3 in 5 executives (57 percent) say their company has established a cross-functional working group to drive strategic attention to ESG, an increase of 21 percent since last year. Another 42 percent say they’re in the process of establishing one.
A typical ESG working group includes executives from finance, accounting, risk, legal, sustainability, operations, supply chain and other functional areas. Increasingly, accountability for ESG performance can be most effective with an integrated governance structure that brings together all business functions. A philosophy of ownership across the business, paired with a strategic approach to governance, can establish ESG as a strategic priority highly aligned to corporate strategy.
Assign roles and responsibilities
Only 3 percent of executives say their companies are prepared for potential increased ESG regulatory or other disclosure requirements, but many are getting ready. For instance, 81 percent of companies have created new roles or responsibilities, and 89 percent say they’ve enhanced internal goal-setting and accountability mechanisms to promote readiness.
Who has management responsibility over ESG disclosure? Today, in many cases, it’s the chief financial officer (CFO) or chief sustainability officer (CSO), but many respondents indicate that increasingly there is shared responsibility for ESG reporting across the executive leadership team, human resources, supply chain and other functions.
Of those executives surveyed, board-level oversight has been predominantly assigned to the nominating and governance committee, but we are seeing a trend of expanded oversight responsibility across all committees, aligned to respective remit, to drive greater integration and oversight of ESG risks and opportunities.
Increase focus on assurance
Nearly all (96 percent) surveyed executives plan to seek assurance for the next ESG reporting cycle. To prepare for a reasonable level of assurance, 37 percent of companies are starting to apply the Committee of Sponsoring Organizations of the Treadway Commission (COSO)’s internal control guidelines, which can help companies measure, manage and validate ESG information with the same rigor typically applied to financial reporting.
Respondents shared that they use a range of different frameworks and standards for their disclosures. The most common is the Task Force for Climate-related Financial Disclosures (TCFD) (56 percent), closely followed by the Sustainability Accounting Standards Board (SASB) (55 percent). Around half of respondents also use standards from the Greenhouse Gas Protocol, International Integrated Reporting Council (IIRC), and Global Reporting Initiative (GRI).
For multinational firms, the rapid progress of the International Sustainability Standards Board (ISSB) signals optimism for convergence of a number of leading sustainability reporting standards and frameworks and the creation of a global baseline for sustainability reporting to help meet the information needs of the capital markets, as well as serve as the basis upon which other jurisdictions can build.
Develop a workable solution for data gaps
When it comes to sustainability reporting, access to quality ESG data now appears to be a bigger challenge than data availability. Still, a majority (61 percent) of respondents indicate their companies are prepared to disclose details about the greenhouse gas (GHG) emissions they directly produce, known as Scope 1. Even more (76 percent) say they’re ready to disclose details of their Scope 2 GHG emissions, or emissions generated by the electricity a company purchases, a substantial increase from the 47 percent who said so the previous year.
At the same time, Scope 3 emissions — which account for GHGs produced along a company’s entire value chain — appear to remain a challenge. Most respondents (86 percent) indicate they’ve run into challenges measuring them, and only 37 percent are prepared to disclose them in detail.
To close any gaps, companies may consider focusing on the Greenhouse Gas Protocol, which currently serves as the leading standard for measuring greenhouse gas emissions and provides for methodologies to promote consistency of measurement with due consideration to the level of measurement uncertainty and data availability.
Invest in technology for ESG reporting, disclosure and action
New technology is on the horizon for many companies as they embark on their ESG integration and disclosure journeys. Nearly all executives (99 percent) are somewhat likely or very likely to invest in new technology to prepare to meet stakeholder expectations and future regulatory requirements.
Technology solutions can assist in accelerating preparedness in moving from reporting in accordance with voluntary sustainability standards and frameworks to enhanced disclosure in accordance with authoritative ESG standards and new regulation.
No matter where a company is in their sustainability journey, strategic attention to ESG integration and disclosure today can help to deliver long term value to stakeholders into the future. By implementing the insights shared by public company executives, companies can gear up for ESG reporting and work to meet stakeholder expectations while also creating long-term value.
Kristen B. Sullivan is a partner with Deloitte & Touche LLP and leads Sustainability and ESG Services, working with clients to help address their sustainability and non-financial disclosure strategy needs.
Anti-ESG proposals have also jumped, and the first vote this year was for one at Apple that called for reporting on the “risks” of the company’s diversity and inclusion programs. PHOTO: JOHN G MABANGLO/SHUTTERSTOCK
Proposals on social issues have waned slightly but continue to be the most popular while climate action ones are on the rise. By Dieter Holger from The Wall Street Journal • Reposted: March 27, 2023
U.S. companies are facing fewer shareholder proposals on social issues this year but more calls for climate action. Anti-ESG ones are increasing, too.
For annual general meetings taking place in the first six months of the year, shareholders across all U.S. publicly traded companies filed a total of 538 proposals related to environmental, social and sustainability governance issues, according to the Sustainable Investments Institute, a Washington-based nonprofit that tracks such votes. Last year, there were 577 filings over the same period.
Proposals focused on social issues were again the most popular this year, mentioned in 338of the filings, down more than 9% from 373 last year. Environmental issues were at the heart of 162 proposals, up slightly from 2022’s comparable tally of 155. Included in the grand total were 48 so-called anti-ESG proposals focused on the risk of ESG-promoting policies, up from 27 in the same period last year.
Historically proposals sought more transparency, better disclosure or asked for companies to set goals, said Peter Reali, managing director and member of the sustainable investments team at fund manager Nuveen LLC. Now, many are calling for a change in behavior or impact, he said.
While the votes on proposals aren’t binding, they can create pressure for companies to change, to take a position on hot-button issues and can also express a lack of investor confidence in board members. However, Heidi Welsh, director of the Sustainable Investments Institute, cautioned that “it’s far too soon to draw any conclusions about support levels since we only have seen about half a dozen votes.” Sustainability ProposalsFilings are trending down this year compared with 2022, but more are expected to surfaceSource: Sustainable Investments InstituteNote: Proposals filed by March 20 for U.S. public companies with annual general meetings in the first six months of theyear.EnvironmentalSocialSustainability Governance2014’15’200100200300400500600
There are 298 proposals for companies to take more action on social issues, slightly down from 332 in 2022. Again this year, around a third of those concerned politics, including requests to set up board oversight or to report on a company’s lobbying, election spending or trade associations. Last year, politically-focused proposals won an average of 32% support, with only five—including at Twitter Inc., Netflix Inc. and insurer Travelers Companies Inc. —achieving majority support.
There are also 20 pay equity proposals this year, down from 33 in 2022. These typically ask companies to audit or report on gender-and-racial pay differences. Abortion has also emerged as a flashpoint with 22 reproductive health proposals this year, up from four last year.
Environmental action was the second most popular area of shareholder focus. So far, there are 160 pro-environment proposals this year, up from 154 in 2022. Most environmental proposals ask companies to adopt or report on Paris-aligned climate targets, while a smaller number ask investors, insurers and banks to report on, limit or cease their financing of fossil fuels.
Shareholders voted on a record number of pro-climate proposals last year, but their support was lukewarm for more ambitious goals such as ending fossil-fuel financing.
Support has waned slightly since 2021 when proposals calling for emission-reduction targets garnered record backing. Investors have also been more hesitant to support proposals that specifically lay out how a company should meet a climate target, said Mr. Reali: “It’s one thing to ask companies to set goals and targets, it’s another thing to tell companies how to achieve those goals and targets.”
Evidence of the rise of the anti-ESG movement in the U.S. can also be seen. The 48 anti-ESG filings to date mostly ask companies to report on the “risks” of corporate plans for improving diversity and inclusion in and outside the company. Only five concerned the environment.
Ms. Welsh expects more anti-ESG proposals this season. However, last year, most of these types of proposals received less than 5% support, the threshold necessary to refile it again in the coming year. This year’s first anti-ESG vote—asking Apple Inc. to report on the “risks” of its diversity and inclusion programs—received 1.4% support.
The proposal tally will change over the AGM season, running from January to September but with most meetings happeningbetween April and June. Some proxy statements will include new proposals. Companies will avoid votes when shareholders withdraw some current proposals, usually after they reach an agreement with the company on an issue. Last year, 273 proposals were withdrawn before they could be voted on during the AGMs in the first half of 2022. The comparable figure this year is 120, so far.
Non-binding commitments, paucity of scientific data and poor representation of global south left a lot to be desired at summit. By Nina Lakhani and Oliver Milman from the Guardian • Reposted: March 26, 2023
The first global water conference in almost half a century has concluded with the creation of a new UN envoy for water and hundreds of non-binding pledges that if fulfilled would edge the world towards universal access to clean water and sanitation.
The three-day summit in New York spurred almost 700 commitments from local and national governments, non-profits and some businesses to a new Water Action Agenda, and progress on the hotchpotch of voluntary pledges will be monitored at future UN gatherings. A new scientific panel on water will also be created by the UN.
Overall, organizers said they were happy that governments and representatives from academia, industries, and non-profits had come together to discuss the often neglected topic of water and to commit billions of dollars to improving water security.
But they conceded that more was needed than a set of voluntary commitments such as a formal global agreement, like the 2015 Paris climate accords and the 2022 Montreal biodiversity pact, as well as better data and an international finance mechanism to safeguard water supplies.
“This conference did not give us a mandate for this, but we brought the world together to ensure there is a follow-up,” said Henk Ovink, special envoy for water for the Netherlands, which co-hosted the conference along with Tajikistan. “We have fragmented water governance across the world, fragmented finance and not enough science and data in place.”
“We know our job is still not done and in fact we are falling behind in our task,” said Tharman Shanmugaratnam, Singapore’s senior minister and co-chair of a summit interactive dialogue. “But we know the job can be done. We must now treat water as a global common good to be protected collectively, in the interests of all nations.”
In closing the historic summit, António Guterres, the secretary general of the UN, urged everyone to turn the pledges into action. “All of humanity’s hopes for the future depend, in some way, on charting a new course to sustainably manage and conserve water … it needs to be at the centre of the political agenda.”
Talks ended with a broad agreement that water should be treated as a global common good, and that the world’s approach to water must be less siloed given its nexus with the climate crisis, and food, energy and national security. But with no internationally binding agreement, experts fear that pledges could slide as it will be hard to hold governments, industry and financial institutions to account.
On Friday morning, more than 100 water experts from research institutions and civil society groups across five continents sent a letter to the UN general secretary slamming the lack of “accountability, rigour and ambition” at the conference, arguing that the paucity of scientific rigour and binding agreements will fail to secure the more just, resilient and sustainable water future urgently needed.
“Trying to solve one of the greatest challenges facing humanity with voluntary commitments and solutions based on half-baked evidence is like taking a knife to a gunfight – it simply isn’t good enough, and represents a betrayal of the world’s poor who bear the brunt of the water crisis,” said Nick Hepworth, executive director of Water Witness.
Charles Iceland, global director for water at the World Resources Institute, said only about a third of these announcements were “gamechangers” that would substantially improve the water crisis. “I think the voluntary commitments are a good start … Each voluntary commitment has a place where you talk about how much money is available, most of them left that blank.”
“We need a Paris agreement for water globally, and national water plans for each country, and regional water plans for each shared basin and aquifer,” Iceland added.
About 90% of climate impacts are related to water – too much, too little, or too dirty – yet only 3% of climate finance is currently dedicated to the world’s water systems. Water related conflicts have risen sharply in recent years as sources dwindle, including many internal disputes between urban and rural dwellers, and pastoralists and farmers, according to research by the Pacific Institute.
Almost 7,000 people attended the conference, but the private sector and global north were far better represented than experts and water insecure communities at the frontline of the water crisis from the global south – many of whom were excluded due to visa and financial barriers. Only a dozen or so world leaders attended the conference, and there were no protests and few activists to call out government and business hypocrisies.
Mana Omar, 28, one of few activists from Fridays for Future Africa to get a visa, said: “As a young person without affiliation to a big organisation there was no opportunity to share experiences of my community,” said Omar, who is from Kenya’s arid Kajiado county where girls and women from pastoral Indigenous communities are facing worsening gender-based violence as drought forces them to travel further to find water.
Australian water scarcity activist Mina Guli, center, after completing her 200th marathon outside UN headquarters on 22 March 2023. Photograph: Leonardo Muñoz/AFP/Getty Images
“The water action agenda should include diverse experiences, but too many communities are missing, and there’s nothing legally binding so how can we hold the countries to account?” added Omar.
A UN spokesperson said they were unaware of any access issues.
The conference also failed to address the violence and threats faced by communities trying to protect dwindling water sources from mining, industrial agriculture and other polluting industries. “It is a very bureaucratic event where only large NGOs, governments and private companies could express themselves,” said Juan Gabriel Martinez, 34, a land and water defender from Manizales, Colombia, where the community is under attack by armed militias.
A quarter of the world’s population still does not have access to safe drinking water while half lacks basic sanitation – which is one of the sustainable development goals for 2030. Progress has been slow due to the lack of financial investment from rich countries – which has moved towards loans not grants, insufficient political will and a siloed approach to water. At the current rate, universal access to clean water and sanitation will not be achieved for decades after the 2030 target.
Samuel Godfrey, the UN Development Programme’s principal water resources advisor, said: “What’s come out of this is the need to move toward regional goals after 2030.”
And while the summit may have nudged the world in the right direction, as Musonda Mumba, secretary general for the convention on wetlands, said in her closing statement: “The crisis is everywhere … we have no time.”
At the COP27 climate talks in November, world leaders agreed to establish a loss and damage fund to help developing countries cope with the impacts of climate change. But it will be yearsuntil the fund is up and running — leaving many questions unanswered, chief among them: Who pays for the climate crisis?
While the responses to this question often place the financial onus of climate change on the global superpowers (China, the U.S.) that have contributed the most environmental harm, those powerful nations have consistently failed to accept this charge. Nations in the Global South have, by and large, contributed little to climate change, yet face the most serious consequences — including more frequent and severe natural disasters like drought, intense heat, and extreme storms. As the leading contributors to climate change drag their feet, the window for action continues to shrink, and blameless millions pay the price of the Global North’s pollution.
Climate Neutral, a nonprofit dedicated to addressing this disparity, leverages corporate funding to finance sustainable projects in the world’s least developed countries. In this way, corporations can circumvent the global gridlock preventing true action on climate change. The nonprofit also provides corporations a chance to move beyond empty promises and truly begin to right their own environmental wrongs.
“The pressure that we’re trying to exert is pressure on companies because consumers, at least say, they care about climate change,” said Austin Whitman, CEO of Climate Neutral. “But they have very few ways to engage with companies directly and press companies to do more. So, if we can create the expectation that companies are doing their part to mitigate their emissions, there will be an increase in the flow of capital into projects.”
Climate Neutral challenges corporations to go beyond words and take aggressive action to reduce global emissions by 2030. To earn the nonprofit’s certification, a company must demonstrate that it is taking steps to reduce future emissions, while also paying the full price for current emissions.
The Climate Neutral Certified label on packaging at partner brand Avocado Green Mattress
Rich nations can “export low-carbon technologies” to decarbonize the developing world
Rapid industrialization in an under-developed country can create intense environmental harm. But how can a country that already polluted the world through its own industrialization 200 years ago prohibit another nation from doing the same thing today? When it comes to polluting, rich nations are essentially telling poorer nations, “do as I say, not as I do,” and that isn’t very persuasive.
“There is some transfer of wealth that’s necessary to account for the fact that the economic costs are being borne initially, largely, by countries that have not caused the problem,” Whitman said.
For decades, the Global South has called on the North to pay reparations for the crimes of colonialism, which prevented development and stole the natural resources that would have funded such development. If rich nations don’t want poorer nations to develop in an environmentally harmful way, they ought to invest in sustainable infrastructure and practices in these underdeveloped nations.
“All the major sectors, they can be used just as well in India as they can in the U.S.,” Whitman said as an example. “I think it’s our job to export low-carbon technologies to really allow them to skip past that phase where the carbon intensity of the economy grows significantly before it starts to level off and then decline. We’ve got a pretty impressive system here in the U.S., and that knowledge can be exported, and is being exported.”
Climate Neutral understands that the urgency of the climate crisis demands action, not bureaucracy. Challenging corporations to pay for pollution and invest in the environment may not completely solve the climate crisis, but it is a fantastic way to get powerful players to put their money where their mouth is.
“This is one of the many, many dynamic aspects of the puzzle. We’re not starting necessarily in the perfect spot,” Whitman said, “but that doesn’t mean that we shouldn’t start.”
By Kate Zerrenner from triple pundit.com • Reposted: March 24, 2023
Every March 22 is World Water Day — an observance designated by the United Nations to bring attention to different issues surrounding water and how it impacts our lives. The 2023 theme is Be the Change, an effort to encourage people to be more active in how they use, consume and manage water.
This feels like both a straightforward task and a daunting one. Most people are unaware of where their water comes from, let alone the volume they use and how. Having that information is the first step toward more effective water management at the individual level, which can help water boards and utilities better manage the larger systems and watersheds.
Can you guess what accounts for most residential water use?
Most people do not have a clear idea of where they are using water — and so do not know where they are wasting water. Inside the home, toilets, showers and faucets are the biggest water hogs. But if you have a yard, your biggest culprit is probably irrigation and lawn care. According to the U.S. Environmental Protection Agency, about a third of all residential water use in the U.S. is for landscape irrigation — about 9 billion gallons per day.
In the Western U.S., a region prone to both droughts and awash with lush green lawns, the situation is even more dire as the Colorado River runs dry. On background, a meter reader with Austin Water told TriplePundit that maintaining lawns accounted for 50 percent to 75 percent of many homes’ water usage — and many consumers often don’t believe it until they’re shown the meter reading.
Some utilities are now focusing solely getting customers to better manage their outdoor use, cutting back on indoor incentives. For example, San Antonio Water System, the city’s water utility, now only offers outdoor rebates and incentives. Program staff told TriplePundit that focusing on irrigation and pools would lead to greater water savings in the water-stressed city. The utility has also hired landscape experts to help residents replace turf with more native and drought-resistant plants.
Smart metering offers more opportunity for water conservation
Another big water waster is leaks. On the utility side, more utilities are getting better at identifying and fixing leaks, but the state of the country’s water infrastructure is going to require significant investment. On the demand side, however, if customers better understand where they’re using the most water — and how to catch leaks when they first happen — they can be more active conservationists.
Much like electric smart meters, water smart meters can help people better understand their usage. The technology is not as widespread as it is in the electricity space due to a number of factors, such as available resources and challenges in measurement that make it harder to pinpoint water usage versus electric usage (i.e., it’s easier to measure electrons than drops). But as climate change continues to put pressure on watersheds, more companies are bringing technologies onto the market.
For example, in 2022, several California water utilities started rolling out water smart meters to customers. While the utilities have a big lift on the supply side, demand needs to be lowered where it can. Much like with electricity — where energy efficiency is the first and best defense — water conservation is the critical component of ensuring water is available when and where it is needed.
Working along the energy-water nexus
And like energy efficiency, water conservation is a climate strategy. Treating, pumping and distributing water uses copious amounts of energy, and generating fossil fuel- and nuclear-powered energy uses a lot of water. So, by reducing water demand, people are also taking action to lower emissions systemwide, while reducing energy use can also help with water conservation. Most people don’t think about the source of electricity when they flip a light switch or the source of water when they turn on their faucets. But the fact remains that both actions are inextricably linked.
World Water Day 2023 calls for people to be more active in their water conservation. It is a good reminder that understanding where your water comes from and how you use it has ripple effects throughout the community and the system. Utilities can help people be the change. But the real change must come from each consumer.
By Nicole Loher from Meta • Reposted: March 24, 2023
When it comes to water scarcity, the numbers are global, but the impact is hyperlocal.
Community by community, neighbor by neighbor, the issue of water stress impacts humanity’s health and wellness as well as economic development. And yet, more than 1.7 billion people live in water basins that are being depleted by overuse and a 40% shortfall in freshwater resources is predicted by 2030. New water cannot be created, so we must be efficient with the water we use, and return what we take — particularly in highly stressed water basins. Water stewardship means taking care of the communities and ecosystems that share water resources.
In 2021, Meta announced an ambitious goal to be water positive by 2030 and in 2022, joined the Water Resilience Coalition of the UN CEO Water Mandate, a cross-sector initiative to raise the ambition of corporate water stewardship and foster collective impact in priority basins.
“Meta is honored to be a member of the Water Resilience Coalition alongside leading organizations and businesses committed to taking action on water. We’re committed to becoming water positive by 2030 by sourcing water responsibly, driving water efficiency across our facilities and operations, and investing in local water restoration projects where our facilities are located. Through the Water Resilience Coalition, we can work together to collectively protect this shared and precious resource.”
NICK CLEGG PRESIDENT, GLOBAL AFFAIRS, META
Striving for Water Positive and Water Stewardship
For Meta, being water positive is about using water efficiently in our operations and returning more water than we consume in water-stressed basins through projects that address local needs and context. We seek to be good water stewards in water basins where we have operations through water efficiency measures and by taking into account the local context and needs of the shared basin.
Water stewardship aims to make sure local access and use of water is culturally equitable, environmentally sustainable and economically beneficial. It requires understanding the ecological and geographical context of local water use — along with issues of governance, balance, quality, sanitation and hygiene — and calls for meaningful individual and collective action.
We are listening to that call. Good water stewardship is intrinsically linked to our other sustainability priorities, which affect how we operate, how we create and how we collaborate. As climate change continues to impact water scarcity on a global scale, good water stewardship will remain a critical collective concern, especially for those living in low-income and disadvantaged communities that face increased climatological risks.
The road to water positive begins, of course, with saving as much water as possible in the first place. From there, Meta prioritizes the basins where we operate that face water stress and collaborates with partners to preserve and restore the health and resilience of local watersheds, based on local need, even as our need for water grows.
Minimizing Water Use in Our Data Centers
Around the world, our 21 data centers power our family of apps and services 24/7. Maybe it’s no surprise then, that they account for most of Meta’s water use as well.
Since 2012, we’ve tracked and reported water usage effectiveness at our data centers as a first step to good water stewardship, but we’re constantly seeking innovative ways to minimize our water use as well — like using direct evaporative cooling, which relies on outside air rather than chilled water and cooling towers, to keep internal temperatures down.
Additionally, we’re proactively choosing plant species, efficient irrigation, alternative water sources, Forestry Stewardship Council (FSC)-certified new wood products and smart scheduling technologies that together save more than 80,000 kilogallons of water per year at our data centers.
Restoring Local Watersheds
Our restoration efforts not only play a critical role in advancing our water stewardship goals, but promote biodiversity in neighboring communities too. Working with local organizations and utilities, we are investing in restoration projects in water-stressed regions that support the local water supply and help restore local habitats and wildlife.
Since 2017, we have invested in 25 water restoration projects in seven watersheds where we operate data centers. One of the most impactful has been in the Rio Grande basin in New Mexico, which faces water stress and drought. In partnership with the Middle Rio Grande Flow Restoration Project, the 2020 program leased 450 acre-feet of water from the City of Bernalillo, NM, to support wetland and channel areas in the Isleta Reach of the Rio Grande. The water was commingled with volumes acquired through other leases to help keep 35 river miles flowing to support the wetlands and water channels on which the area’s birds, fish and wildlife depend.
Water restoration will remain a high priority for us going forward. As of August 2021, we have invested in water restoration projects that will replenish more than 850 million gallons of water per year in water-stressed basins. You can read more about our ongoing efforts in our Volumetric Water Benefits report.
Increasing Water Efficiency in our Workplaces
With nearly 72,000 employees in our offices across 80 cities, our facilities teams work hard to track our water withdrawal. Many offices, including our headquarters in Menlo Park, CA, utilize on-site recycled water systems to reclaim water from a variety of sources. And across all facilities, we’ve reduced our water needs by installing efficient plumbing fixtures and planting low-water-use plants.
It’s a lot but we still have a long way to go to meet our goal of water positive by 2030. By combining transparency with collaboration and collective action to address local needs, we aim to be good water stewards for our local communities and our planet, ensuring a sustainable future for all.
By Stacy Morford, Environment + Climate Editor, from The Conversation • Reposted: March 24, 2023
Reading the latest international climate report can feel overwhelming. It describes how rising temperatures caused by increasing greenhouse gas emissions from human activities are having rapid, widespread effects on the weather, climate and ecosystems in every region of the planet, and it says the risks are escalating faster than scientists expected.
Global temperatures are now 1.1 degree Celsius (2 degrees Fahrenheit) warmer than at the start of the industrial era. Heat waves, storms, fires and floods are harming humans and ecosystems. Hundreds of species have disappeared from regions as temperatures rise, and climate change is causing irreversible changes to sea ice, oceans and glaciers. In some areas, it’s becoming harder to adapt to the changes, the authors write.
Still, there are reasons for optimism – falling renewable energy costs are starting to transform the power sector, for example, and the use of electric vehicles is expanding. But change aren’t happening fast enough, and the window for a smooth transition is closing fast, the Intergovernmental Panel on Climate Changereport warns. To keep global warming below 1.5 C (2.7 F), it says global greenhouse gas emissions will have to drop 60% by 2035 compared with 2019 levels.
he extent to which current and future generations will experience a hotter world depends on choices made now and in the coming years. The scenarios show expected differences in temperature depending on how high emissions are going forward.IPCC sixth assessment report
In the new report, released March 20, 2023, the IPCC summarizes findings from a series of assessments written over the past eight years and discusses how to stop the damage. In them, hundreds of scientists reviewed the evidence and research.
Here are four essential reads by co-authors of some of those reports, each providing a different snapshot of the changes underway and discussing solutions.
1. More intense storms and flooding
Many of the most shocking natural disasters of the past few years have involved intense rainfall and flooding.
In Europe, a storm in 2021 set off landslides and sent rivers rushing through villages that had stood for centuries. In 2022, about a third of Pakistan was underwater, and several U.S. communities were hit with extreme flash flooding.
The IPCC warns in the sixth assessment report that the water cycle will continue to intensify as the planet warms. That includes extreme monsoon rainfall, but also increasing drought, greater melting of mountain glaciers, decreasing snow cover and earlier snowmelt, wrote UMass-Lowell climate scientist Mathew Barlow, a co-author of the report examining physical changes.
“An intensifying water cycle means that both wet and dry extremes and the general variability of the water cycle will increase, although not uniformly around the globe,” Barlow wrote.
“Understanding this and other changes in the water cycle is important for more than preparing for disasters. Water is an essential resource for all ecosystems and human societies.”
The IPCC stressed in its reports that human activities are unequivocally warming the planet and causing rapid changes in the world’s atmosphere, oceans and icy regions.
“Countries can either plan their transformations, or they can face the destructive, often chaotic transformations that will be imposed by the changing climate,” wrote Edward Carr, a Clark University scholar and co-author of the IPCC report focused on adaptation.
The longer countries wait to respond, the greater the damage and cost to contain it. One estimate from Columbia University put the cost of adaptation needed just for urban areas at between US$64 billion and $80 billion a year – and the cost of doing nothing at 10 times that level by mid-century.
“The IPCC assessment offers a stark choice,” Carr wrote. “Does humanity accept this disastrous status quo and the uncertain, unpleasant future it is leading toward, or does it grab the reins and choose a better future?”
One crucial sector for reducing greenhouse gas emissions is transportation.
Cutting greenhouse gas emissions to net-zero by mid-century, a target considered necessary to keep global warming below 1.5 C, will require “a major, rapid rethinking of how people get around globally,” wrote Alan Jenn, a transportation scholar at the University of California Davis and co-author on the IPCC report on mitigation.
There are positive signs. Battery costs for electric vehicles have fallen, making them increasingly affordable. In the U.S., the 2022 Inflation Reduction Act offers tax incentives that lower the costs for EV buyers and encourage companies to ramp up production. And several states are considering following California’s requirement that all new cars and light trucks be zero-emissions by 2035.
“Behavioral and other systemic changes will also be needed to cut greenhouse gas emissions dramatically from this sector,” Jenn wrote.
For example, many countries saw their transportation emissions drop during COVID-19 as more people were allowed to work from home. Bike sharing in urban areas, public transit-friendly cities and avoiding urban sprawl can help cut emissions even further. Aviation and shipping are more challenging to decarbonize, but efforts are underway.
He adds, however, that it’s important to remember that the effectiveness of electrifying transportation ultimately depends on cleaning up the electricity grid.
The IPCC reports discuss several other important steps to reduce greenhouse gas emissions, including shifting energy from fossil fuels to renewable sources, making buildings more energy efficient and improving food production, as well as ways to adapt to changes that can no longer be avoided.
“For example, renewable energy is now generally less expensive than fossil fuels, so a shift to clean energy can often save money,” they wrote. Electric vehicle costs are falling. Communities and infrastructure can be redesigned to better manage natural hazards such as wildfires and storms. Corporate climate risk disclosures can help investors better recognize the hazards and push those companies to build resilience and reduce their climate impact.
“The problem is that these solutions aren’t being deployed fast enough,” Lempert and Gilmore wrote. “In addition to pushback from industries, people’s fear of change has helped maintain the status quo.” Meeting the challenge, they said, starts with embracing innovation and change.
Bottled water corporations exploit surface water and aquifers, buy water at a very low cost and sell it for 150 to 1,000 times more than the same unit of municipal tap water. Photo: Shutterstock
By Zeineb Bouhlel, Research Associate, Institute for Water, Environment and Health (UNU-INWEH), United Nations University and Vladimir Smakhtin, Former Director of the Institute for Water, Environment and Health (UNU-INWEH), United Nations University via The conversation • Reposted: March 23, 2023
In our recently published study, which studied 109 countries, it was concluded that the highly profitable and fast-growing bottled water industry is masking the failure of public systems to supply reliable drinking water for all.
The industry can undermine progress of safe-water projects, mostly in low- and middle-income countries, by distracting development efforts and redirecting attention to a less reliable, less affordable option.
The rising sales of global bottled water is contributing to plastic pollution on land and in the oceans. Photo: Shutterstock
The latest UN University report revealed that the annual sales of the global bottled water market is expected to double to US$500 billion worldwide this decade. This can increase stress in water-depleted areas while contributing to plastic pollution on land and in the oceans.
Growing faster than any other in the food category worldwide, the bottled water market is biggest in the Global South, with the Asia-Pacific, Africa and Latin American and Caribbean regions accounting for 60 per cent of all sales.
But no region is on track to achieve universal access to safe water services, which is one of he SDG 2030 targets. In fact, the industry’s greatest impact seems to be its potential to stunt the progress of nations’ goals to provide its residents with equitable access to affordable drinking water.
Impact on vulnerable nations
In the Global North, bottled water is often perceived to be healthier and tastier than tap water. It is, therefore, more a luxury good than a necessity. Meanwhile, in the Global South, it is the lack or absence of reliable public water supply and water management infrastructure that drives bottled water markets.
Therefore, in many low- and middle-income countries, particularly in the Asia Pacific, rising consumption of bottled water can be seen as a proxy indicator of decades of governments’ failure to deliver on commitments to safe public water systems.
The rising consumption of bottled water in some countries can be seen as a proxy indicator of decades of governments’ failure to deliver on commitments to safe public water systems. Photo: Shutterstock
This further widens the global disparity between the billions of people who lack access to reliable water services and the others that enjoy water as a luxury.
As the bottled water market grows, it is more important than ever to strengthen legislation that regulates the industry and its water quality standards. Such legislation can impact bottled water quality control, groundwater exploitation, land use, plastic waste management, carbon emissions, finance and transparency obligations, to mention a few.
Our report argues that, with global progress toward this target so far off-track, expansion of the bottled water market essentially works against making headway, or at least slows it down, adversely affecting investments and long-term public water infrastructure.
Such initiatives offer the bottled water sector an opportunity to become an active player in this process and help accelerate progress toward reliable water supply, particularly in the Global South.
By Mary Mazzoni from Triplepundit.com • Reposted: March 23 2023
As companies make bolder commitments to advance diversity, equity and inclusion (DEI), stakeholders are looking for more information to back up their claims. Shareholder resolutions related to racial equity more than doubled at U.S. companies last year, many focused specifically on convincing companies to publicly disclose diversity data about their workforces.
Likewise, the vast majority of the American public — 92 percent, according to 2022 polling from Just Capital — feel it’s important for companies to promote racial equity in the workplace. And they recognize data is an important tool to do it, with 76 percent of respondents to Just Capital’s survey agreeing that disclosing demographic data is an important step toward advancing racial equity.
While some corporate commitments related to racial equity have failed to fully materialize, the area of diversity disclosures in particular is one where companies are stepping up in a big way, with record levels of best-practice disclosure across the world’s largest public firms.
The state of corporate diversity disclosures
What’s often missed in conversations about diversity disclosures is that most large companies already track this information because they’re legally obligated to do so. All U.S. public companies with more than 100 employees are required to submit annual reports to the U.S. Equal Employment Opportunity Commission and Department of Labor that detail workforce data, including breakdowns by race and ethnicity, sex, and job categories.
These reports, known as EEO-1 reports, are kept confidential by government agencies unless companies choose to voluntarily disclose them — and more companies are going just that.
Nearly 75 percent of Russell 1,000 companies disclose some form of workforce diversity data, compared to 55 percent in 2021, according to tracking from Just Capital. Within that group, 34 percent of companies publicly disclosed their EEO-1 reports or similar intersectional data last year — a more than threefold increase from 11 percent a year earlier.
“Over the past year, companies across the Russell 1,000 have made great strides toward improving disclosure of racial and ethnic workforce demographic data,” Just Capital’s director of research insights, Matthew Nestler, and his team wrote in the report.
When Just Capital last gathered disclosure data in September 2021, nearly half of all Russell 1,000 companies made no diversity disclosures at all. By September of last year, that number had fallen to 28 percent, as more than 150 companies opted to newly disclose their diversity data.
Importantly, many of these companies are skipping over the less granular disclosures, such as data about overall “non-white” or “minority” employees without racial and ethnic categories or job title breakdowns, and going right for publication of their EEO-1 reports.
Given increased stakeholder interest, it’s no surprise that companies taking the lead on diversity disclosures are reaping the benefits: Companies that published their EEO-1 or similar intersectional data outperformed those that didn’t by 7.9 percent over the trailing one-year period ending in 2022, according to a companion analysis from Just Capital.
“Publicly disclosing demographic data represents a critical initial step for companies looking to build more diverse workforces, as well as stronger returns,” Nestler and his team wrote in the report. “It holds corporate leaders to account on their DEI goals and signals commitment to advancing racial equity.”
“The story the report tells may not be a perfect one, but disclosure is a crucial first step in holding companies accountable to change,” Nestler and his team concluded. “From there, to ensure lasting progress on DEI, corporate leaders must ultimately go beyond demographic disclosure and measure and disclose the outcomes of their DEI efforts, including whether C-Suite compensation is tied to DEI-related progress, what resources are directed toward DEI efforts, how they drive impact in local communities, and more.”
By Mary Riddle from triple pundit.com • Reposted: March 22, 2023
A majority of consumers say they’re ready to change their lifestyles to help combat climate change, and more people than ever are seeking out information about sustainability on social media. A new study commissioned by Unilever shows that influencers have the biggest impact on consumers’ sustainability-related choices, ahead of documentaries, news articles and governmental campaigns. In fact, 83 percent of all consumers believe that TikTok and Instagram are helpful places to seek out information about sustainability, and 75 percent are more likely to add sustainable behaviors to their lifestyles after viewing social media content about sustainability.
Unilever also specifically examined the efficacy of different content styles in inspiring consumer behavior change around plastic use and food waste, comparing pragmatic and explanatory content with more optimistic and humorous posts.
While the study found that both styles were effective in spurring consumer behavior change, 69 percent of people who viewed the more pragmatic content went on to make lifestyle changes, versus 61 percent of those who watched the more optimistic, humorous content. Branded content was seen as equally engaging and authentic as unbranded content.
“People are finding it hard to make sustainable choices due to a lack of simple, immediate and trustworthy information. Our ambition is to continue to collaborate with our partners to improve the sustainability content produced by our brands and support the creators we work with” said Conny Braams, Unilever’s chief digital and commercial officer, in a statement.
Leveraging social media to drive consumer behavior change
Unilever partnered with Behavioral Insights Team and 10 sustainability influencers to develop content that aimed to persuade consumers to use less plastic and waste less food. Unilever then showed the content to 6,000 social media users in the U.K., U.S., and Canada.
Three out of four respondents said the content made them more likely to engage in the suggested sustainable behaviors, specifically reusing plastic, buying refillable products, and freezing and reusing leftover food. Also, 72 percent of participants supported companies selling them more sustainable products and services.
“This study is a world-first of its kind and the largest online, controlled trial to test the effect of different styles of social media content,” David Halpern, chief executive of the Behavioral Insights Team, said in a statement. “The behavior change potential of social media is clear, and the results show that there’s huge opportunity — providing fertile ground for further exploration in this space.” Over 75 percent of respondents said they support content creators encouraging their audiences to behave in more sustainable ways.
More social change is needed to avert climate catastrophe
Unilever’s study found that social media is an effective tool for sustainable consumer behavior change. However, today’s world of social media is more commonly used to increase spending habits and consumption levels, which are key barriers to fighting climate change.
To effectively use their platforms to drive sustainable behaviors, brands and influencers must encourage individual actions and social change. Unilever is leveraging the results from the new study to bolster its sustainability messaging.
“What we hear from consumers is that living sustainably is a constant, overwhelming effort and many feel ‘my act alone won’t count, anyway,’” Braams noted. However, armed with the results of the new study, Unilever is aiming to support content creators and improve their sustainability content to help drive better individual actions across their consumer base.
“Together, we are learning what is all likes and no action versus content that makes sustainable choices simple and preferred,” she said. Instead of contracting with influencers to encourage their viewers to buy and consume, companies can accelerate rates of individual change by communicating with their audiences simple ways to make better choices for the environment.
By Jim Andrew, Executive Vice President, Chief Sustainability Officer for PepsiCo via Yahoo Finance • Reposted: March 22, 2023
Water is a fundamental human right. It is indispensable to every community, ecosystem, and economy around the world. Yet water insecurity has become one of the world’s greatest crises–and one that is overlooked, or even worse, ignored entirely.
Globally, more than 2 billion people lack access to safe drinking water and 4 billion people experience severe water scarcity at least one month a year–and many far more frequently than that.
Climate change and other factors are harming water supply and quality, and ecosystems are being degraded as a result. It’s projected that at current rates of consumption, there will be a 56% gap between global water supply and demand by 2030.
And while the private sector and other stakeholders have made progress in addressing the causes of this water stress, the truth is it’s not nearly enough.
We are at an inflection point, which makes the upcoming UN Water Conference–being held for the first time in nearly five decades–a critical moment to drive action. It represents a transformative opportunity to ignite unprecedented collaboration among governments, NGOs, and the private sector to address this growing global crisis.
At PepsiCo, as the second-largest food and beverage company in the world, we know the critical role that water plays in the food system. When it comes to addressing water issues, we use a watershed management approach that encompasses our entire value chain, including on farms, in manufacturing facilities, along our value chain and in local communities. Through PepsiCo Positive–a strategic, end-to-end transformation of our business–we have developed robust goals to support our ambition of being “net water positive” by 2030. The aim is that our presence and action should improve the local water resources where we operate.
For example, we have implemented new technologies and processes in three of our largest food plants in Latin America that have taken us off the water grid, enabling us to make popular snacks like Lay’s, Doritos, and Cheetos without drawing anyfreshwater from local watersheds.
At our Vallejo facility in Mexico City, we source water from our manufacturing processes and other food companies in the area, purify it in house, and reuse the water in our operations. In Funza, Colombia, we treat and reuse our own processed water and capture rainwater for use in our facility. Both sites have operated using zero freshwater, with no burden on local municipalities, for approximately 250 days and counting since 2022, while our plant in Itu, Brazil, has yielded more than 100 days of using zero freshwater through similar approaches.
While operational efficiency is important for our business and water stewardship, it alone does not solve the larger problem. It’s critical that companies like PepsiCo continue to expand efforts beyond the walls of our facilities to protect and restore watersheds, while also ensuring that communities around the world have reliable access to safe, clean water.
In 2021 alone, our projects helped restore 6.1 billion liters of water back into local watersheds through replenishment partnerships with conservation organizations such as The Nature Conservancy and the World Wildlife Fund. And, over the last 15 years, PepsiCo and the PepsiCo Foundation have helped more than 80 million people access safe water. We’re aiming to reach 100 million people by 2030.
Fortunately, many companies have set ambitious water goals and are taking action. There are thousands of individual projects around the globe working to tackle water stress, but presently there are few opportunities for the private sector, NGOs, and governments to work together and pool the necessary resources to address this crisis at scale. We’re proud to be part of the CEO Water Mandate, for example, but such coalitions are few and far between.
We believe the only way to address the global water crisis is to get all stakeholders engaged and, through collective action, work towards a common goal of dramatically and urgently improving water conservation and governance, while ensuring that all people have access to safe, clean water. We need more open-source sharing of ideas and best practices. We need technological innovations and to rethink how we approach partnerships. We need collaboration among all stakeholders in impacted watersheds, advocating for solutions that drive fairness and address the specific needs of that locality. Only then will we drive the investment and scale that results in the level of change we need.
We are actively participating in the UN Water Conference and related events to share what we’ve learned and to learn from others, and to help inspire bolder collective action.
Half of the global population could face water scarcity challenges by 2025, according to UNICEF. We don’t have the luxury of time.
Jim Andrew is Executive Vice President, Chief Sustainability Officer for PepsiCo.
For edie’s Business Leadership Month, Peter Bragg, EMEA sustainability & government affairs director at Canon, looks at how sustainability can be taken out of its silo to the benefit of the whole business. From edie’s.com • Reposted: March 19, 2023
It’s no longer news that sustainability is at the forefront of everyone’s minds. Consumers and companies alike are prioritising the planet by adopting more sustainable shopping habits and making more commitments to improve credentials, with 87% of business leaders planning to increase sustainability strategy investment over the next two years. While it’s great to see so many companies prioritising sustainability initiatives within their business model, there still remains a large number of business leaders who are struggling with the implementation of effective, large-scale sustainability strategies.
Many companies are establishing sustainability-focused departments, or specific roles, to help address these issues, however, by creating these silos, businesses are hindering the widespread adoption of sustainable practices that are needed to make a difference. Instead, businesses need to make sure every department, team and individual are taking an active part in delivering sustainability goals. Only then will sustainability strategies deliver the impactful and purposeful results needed.
Adopt a corporate philosophy
‘Sustainability’ in itself is an umbrella term that incorporates many different focus areas and methods for making the world a better place. For businesses setting a sustainability strategy, it can be easy to get lost in the generalisations, however every organisation should have a different idea of what sustainability means, because different businesses impact the planet in different ways.
Whether it’s working towards a greener supply chain or focusing also on social responsibility, it’s important for businesses to identify key areas they can improve to better the planet and establish clear goals to unify under. For Canon, we’ve adopted the corporate philosophy of Kyosei, meaning ‘living and working together for the common good’. This has provided a base from which we can launch specific initiatives aimed at both reducing our environmental impact and growing our social impact, while ensuring we are responsible and compliant with our products.
Expand efforts in-house
For better practices to be adopted by all departments in a business, it is key to both engage and educate the team. Building sustainability into the business model means ensuring all departments and business units are engaged and responsible for initiatives in their particular market. Aligning different people from across the business has been made easier with virtual communication, and setting up channels and regular check-ins is a great way to keep teams on track. It also proves incredibly useful to learn from teams in different markets, to understand what initiatives have worked, or haven’t, and use that feedback to inform strategies.
At Canon, we facilitate this open communication by working with our multidisciplinary steerco, where all functions of the business are connected and engaged. Setting up leadership working groups like this to apply practices and policies to individual departments ensures that everyone is aware of the role they have to play.
Partnerships broaden efforts
Just as many different areas of a business are needed to implement sustainability strategies, partnerships with other organisations can be a way of reaching all areas of the business. This can be by ensuring sustainability along a supply chain by only partnering with other responsible businesses, as well as broadening practices through proactive joint campaigns.
At Canon, we’ve developed a partnership with the UN SDG Action Team, and our Young People Programme (YPP) works with local NGOs including the Red Cross and Plan International to empower the next generation to make their voice heard on sustainability issues important to them. These particular partnerships have elevated our efforts in the social purpose side of sustainability, which works in addition to our focus on reducing our environmental impact.
Align with an existing framework
Thinking about the bigger picture in terms of sustainable goals can create difficulties for organisations wanting to coordinate approaches throughout the business – especially if they operate in different markets. Using existing framework is a good way to align teams and speed up the activation of these strategies.
The UN Sustainable Development Goals (SDGs) provide a framework for coordinating action across a wide range of topics, keeping businesses in line to achieve goals by 2030. If these goals are included in sustainability and business strategies, they can unite different areas of the business and support a culture that recognises the importance of prioritising sustainability. The UN Global Compact published The SDG Compass to assist companies in aligning the Goals with their strategies.
Conclusion
Creating and implementing an effective sustainability strategy for your business, therefore, requires four key aspects: a clear and relevant sustainability goal, effective communication and engagement from across teams, appropriate partnerships to broaden sustainability practises and useful frameworks to align different teams under. The key theme here is collaboration, and by breaking down the silos, we can make sustainability a company-wide mission rather than a challenge reserved for business leaders alone. Only then can we start to make real change happen.
Influencers on social media have long been known for pushing products and promoting brands for cash or perks. However, a new trend is emerging on social media, with the hashtag “de-influencing” gaining popularity.
The de-influencing movement is all about discouraging purchases, and it’s gaining traction among social media influencers. In part, the conversation is around a rejection of overconsumption.
“It’s become another part of influencing,” says brand collaborator coach Kahlea Nicole Wade. She has taken to social media to post about de-influencing to her followers.
Wade has been vocal about de-influencing on her platform. She believes that telling someone not to buy something is the same as telling them to buy it, as it’s still a form of influencing.
Under this new trend, some influencers are advocating for their followers to swap expensive products for less expensive alternatives. By doing so, they are encouraging a cheaper purchase while still promoting products that align with their values.
According to social media expert Ruby Kristen, there are several factors contributing to the de-influencing trend. Firstly, the economy is a significant factor. With financial uncertainty on the rise, people are being more cautious with their spending.
Secondly, people are starting to question whether the products they’re buying are worth the money.
Lastly, transparency is becoming increasingly important to social media users, and they’re demanding more accountability from influencers.
The de-influencing movement is an interesting departure from the traditional influencer model. As influencers continue to encourage their followers to make more conscious and responsible purchases, it will be interesting to see how brands respond and whether this trend will continue to gain momentum.
We need to shape the boardrooms of the future by choice, not by chance. By Helle Bank Jorgensen from Greenbiz.con * Reposted: March 18, 2023
Image via Shutterstock/EtiAmmos
Sometimes, if you are like me, it is hard to look at the news or social media in the morning. The war in Ukraine, climate change, the tridemic, disappearing biodiversity, a worldwide cost of living crisis, famines and, oh, did I mention climate change?
Our world faces an unprecedented and barely credible list of monumental challenges. This is a time when we need courage and leadership to steer us all through these toughest of times and into the sunlit uplands.
According to the 2023 Edelman Trust Barometer, businesses are trusted more than NGOs, governments and media to provide that steady hand at the economic tiller. So that means current and future board directors and senior corporate executives must provide much of that bravery and direction for the world. But to do that, we need to shape their boardrooms of the future by choice, not by chance.
Sustainability will play an important role in this boardroom transition. It also formed the theme of “Sustainability in the Future Boardroom,” a tremendous panel session that I thoroughly enjoyed being part of at the recent GreenBiz 23 event in Scottsdale, Arizona. Joining me were Michael Levine, vice president and managing counsel, sustainability, Under Armour; and Mary Francia, partner, H.I. Executive Consulting (who is also part of the advisory board at Competent Boards).
The Future Boardroom initiative, which aims to bring business leaders together from around the world to shape a much-needed transformation at company leadership tables, provoked vigorous discussions at the World Economic Forum annual meeting in Davos, Switzerland, in January, and caused the same effect in Scottsdale. Here are 10 key takeaways from our panel session:
It is vitally important that governance is embedded into business and board functions so that sustainability work is not just a project or passing fad that disappears with the arrival of a new CEO.
There are increasing regulatory and reputational risks and consequences for companies and their boards around sustainability and environmental impact. As a result, board directors and senior business leaders must ensure that they have reasonable systems and controls in place to enable oversight and mitigate risks.
The board’s oversight of the management team is crucial for how sustainability is integrated and brought to life in companies. Board directors need to understand the concept of sustainability to be able to provide effective oversight. To promote true sustainable change, leaders should avoid a compliance mentality, only doing the minimum necessary to be in good order. Instead, they should look to take their companies above and beyond the regulations. For that to be successful, the education process requires continuous learning, feedback and open, regular communications with stakeholders.
Companies should also be aware of legal developments in different jurisdictions and take immediate steps to mitigate risks. For example, in November, Belgium added ecocide — “unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe and either widespread or long-term damage to the environment being caused by those acts” — to its penal code.
Board assessments can help to evaluate the skills and competencies needed in a future boardroom and identify strategic challenges and opportunities. These assessments can also help identify board members who may need to resign or change their skill sets in order to continue providing value to the company.
Education will play a major role in the transition to a future boardroom. Investors are increasingly zeroing in on directors’ knowledge of sustainability issues and may not vote for those who lack insights and knowledge. Therefore, it is vital to have well-informed board members with sustainability knowledge and skills. Current and future board directors should keep learning by having the courage to take on different roles within the company to gain further experience and knowledge.
Companies must have competent and conscious individuals serving on committees overseeing sustainability, ESG and climate issues. If board members can proactively rather than reactively address ESG factors, that will also be a major asset for companies in terms of outpacing competitors and creating renewed value.
ESG is not just about climate risks; it also presents opportunities for companies to create value and sustainability over time. It is essential for companies to ask the right questions and have a team that can provide a view of what the company’s portfolio should look like in the future: what needs to be removed, and what needs to be added.
Boards need to have a better understanding of operations and sustainability to be able to maximize opportunities and minimize risks. Sustainability should not just be a check-mark exercise, but rather should be embedded into different business functions and processes, including supply chains and value chains.
Being a board director is not just about dealing with short-term financial goals, but also about being a steward of the company’s finances, its employees and its impact on society and the environment. In order to add sustainability expertise to a board, that individual must understand what the board is looking for, be able to think strategically and understand corporate governance.
We also asked the GreenBiz 23 audience a series of poll questions, with really interesting results from almost 300 responses:
How important is sustainability knowledge as a key consideration in the selection of new board members?
Not important = 13 percent
Important = 32 percent
Very important = 49 percent
Unsure = 7 percent
What drives sustainable change in the boardroom?
Investor demand = 56 percent
Customer demand = 17 percent
Employee demand = 1 percent
Regulations = 26 percent
How does ‘today’s’ boardroom get insight to provide oversight on ESG?
Ask the CSO to join meetings = 32 percent
Pursue ESG training = 15 percent
Appoint BoDs with skill set = 36 percent
Unsure = 17 percent
Do you see new competencies (climate, biodiversity, DEI, human rights, cybersecurity, etc.) as necessary for The Future Boardroom?
Yes = 90 percent
No = 5 percent
Maybe = 5 percent
Will proactive addressing of ESG factors by board members be an asset for a company to outpace competition and add value creation?
Yes = 86 percent
No = 0 percent
Maybe = 14 percent
From the results, it is clear that confusion remains over the best sources of sustainability information for board directors, with appointing people with skill sets (36 percent) and asking the CSO to join meetings (32 percent) closely matched. Almost 1 in 5 respondents were unsure, showing that there are many opportunities for better education here.
On the plus side, the majority of our respondents (81 percent) do see sustainability knowledge as important or very important for future board members. And new competencies to meet the challenges ahead are must-haves.
The discussion around boardroom transitions is only just getting started. Download the Future Boardroom white paper to learn more about why sustainability plays a key role in shaping future boardrooms.
By MARY RIDDLE FROM TRIPLEPUNDIT.COM • Reposted: March 18, 2023
We know shoppers are increasingly interested in more sustainable products, and new research indicates many are ready to leave their standby brands behind. Half of all U.S. consumers, including 70 percent of millennials, have changed food and grocery brands based on environmental, social and governance (ESG) considerations, according to new polling.
For its latest sustainability benchmark report, the research technology company Glow surveyed 33,000 U.S. adults to get their take on the ESG performance of more than 150 food and grocery brands. Across the board, consumers report changing their spending habits to better align with their personal values — and forward-looking brands are reaping the benefits. Almost 90 percent of respondents believe it’s important for businesses to be environmentally and socially responsible, and two-thirds said they’re willing to pay more for products that support vulnerable groups and communities.
“It is vitally important for companies to contribute to supporting society and the planet. And there is a growing body of evidence that doing so is more than the right thing to do, it is good for business,” said Julia Collins, CEO of Planet FWD, a carbon management platform for consumer brands, in a statement. “This report provides further evidence … that those who are leading in consumers’ minds are already reaping the commercial benefits and are best placed for future success.” Indeed, 8 in 10 respondents said they feel more loyalty to purpose-driven brands.
ESG performance is correlated with revenue growth
Glow also found a positive correlation between ESG performance and revenue growth. Even in a troubled economy with a cost-of-living crisis, environmentally- and socially-responsible companies are seeing the economic benefits of standing for their values: 20 percent of consumers rank sustainability in their top three considerations when shopping at the grocery store, and 10 percent of millennials said sustainability is the single most important factor when making a purchase.
Additionally, while 70 percent of consumers are actively switching food and grocery brands to save money, many consider sustainability a key reason not to do so, particularly among younger shoppers.
“Now more than ever, if brands want to retain and win consumers, they must stand for something,” Mike Johnston, managing director of data products at Glow, said in a statement. “All consumers are looking for ways to save money. They will need a compelling reason why they shouldn’t walk away from your brand for a cheaper alternative. Along with quality, sustainability is a key barrier to change, especially for millennials.”
It’s worth noting that what consumers view as “sustainable” will vary based on the product. Consumers report that plastic and waste issues are of greater importance in the household goods department, for example, while health and wellbeing is a top concern for consumers when choosing beverages and beauty products.
Still, across all categories, products with ESG-related claims on their packaging grew an average 1.7 percent faster than those without. Labels and messaging associated with regenerative agriculture, plastic-free products, cruelty-free operations, water footprint, and renewable energy caught consumers’ attention the most.
Consumer expectations are high
U.S. consumers widely perceived the food and grocery industry as a leader in corporate sustainability, Glow’s data revealed, but the industry still faces significant barriers to meeting consumer expectations in a few key areas. For example, almost a third of responding consumers are dissatisfied with the industry’s efforts to reduce emissions, mitigate climate change, protect wildlife and ensure the welfare of suppliers.
While being misaligned with consumer expectations is never ideal for a company or sector, this gap presents an opportunity for brands to re-engage with this growing segment of consumers and stakeholders. By aligning ESG priorities with consumer expectations, companies can take advantage of a growth opportunity, while reducing risk and improving impacts on the environment.
“There’s a role of education here that’s critical for businesses,” Tim Clover, founder and CEO of Glow, told TriplePundit. “Consumers really want to understand the issues in more detail, to understand some of the science and the lengths to which companies are going to solve these problems. Companies that are brave enough to go and take the time to explain the depth of these issues and educate the market, they’re leading. They’re winning.”
By Mary Mazzoni from triplepundit.com • Reposted: March 17, 2021
Despite increased attention on the issue — and the rollout of piecemeal reform policies in some cities — data indicates that police violence in the U.S. is actually getting worse.
The Washington Post’s real-time database has recorded more fatal police shootings every year since it launched in 2015, with 2022 being the deadliest to date. Communities of color, particularly Black communities, continue to be disproportionately affected. Already this year, U.S. police have shot and killed 195 people, according to the database. Many, including the killings of Tyre Nichols, Keenan Anderson, Anthony Lowe Jr. and Manuel “Tortuguita” Terán, were highly publicized. Yet most of the brands that proclaimed to “stand with” Black communities following the murder of George Floyd in 2020 were largely nowhere to be seen.
So, why have brands gone silent on the issue of police violence, and how can they do better? TriplePundit connected with leaders in sustainability and diversity, equity and inclusion (DEI) to get a better understanding.
But by and large, many of these initially outspoken brands have failed to follow through. “It’s easy for everyone to jump on the bandwagon,” Emerald-Jane “EJ” Hunter, founder of the DEI-focused integrated marketing firm myWHY Agency, said of corporate stands in favor of racial equity. “But it’s hard work and often calls for financial investment for companies to actually do the work, and do it well.”
Particularly during uncertain economic times, programming that is viewed as “nice-to-have” or unrelated to the business is always at risk of being cut. And unfortunately too many brands still view their racial equity work this way.
“Many brands aren’t willing to part with the investment so take the lazy route by making a statement and claims and hope, just like many things, followers and consumers will forget over time what they said they would do,” Hunter told us. “The commitment simply isn’t there to do what it takes to make the shift and change, and therein lies the problem: Until companies make the investment and give it the time that it takes, we’ll never see change.”
The benefits of going bold: How can leaders convince their bosses it’s worth the risk?
“The issue of police violence has also become so politically charged, it’s safer for brands to not go ‘too hard’ on this stance for fear of being cancelled,” Hunter said. While brands may be more keen to back off given the “anti-woke” political climate, consumer expectations — particularly among younger demographics — are only growing.
“Remaining quiet when police brutality continues to disproportionately impact communities of color is no longer an option,” said Alix Lebec, founder and CEO of Lebec Consulting, which specializes in environmental, social and governance (ESG) issues and impact investing. “Eighty-two percent of millennial consumers expect corporations to align with their social and environmental values — and to stand up for key societal issues in real time.”
Although it may seem safer to stay silent, brands that go bold — and back it up — stand to see real benefits. “Ben & Jerry’s is one of the best examples of a company and brand that immediately spoke up after George Floyd’s murder caused by inhumane police brutality in an authentic manner,” Lebec said. “From its voice, consumer products, donations and stance on public policy, Ben & Jerry’s took action. This is a brand that leads with empathy and purpose.”
Still, what’s a leader to do if their company remains hesitant? “One thing a business leader can tell their boss when they receive pushback is to look at the generations to follow and what matters to them. If their company wants to be around for years to come, they’ll soon be challenged by Gen Z and millennials for whom why businesses exist matters more than what they do,” Hunter said. “You won’t exist for much longer without aligning with a cause or issue or a why that goes beyond dollars and cents.”
“It doesn’t have to be specifically police brutality,” she added, “but should that be the cause, then it’s worth knowing that advocacy work equals longevity for a brand. It also takes time to become the likes of Ben & Jerry’s, so start now, be intentional, and practice what you preach internally and externally.”
Ready to take action to curb police violence and promote equity? Here’s how to start
Hunter highly recommends connecting with outside experts or enlisting an agency to help you get better about acting and communicating around issues like police violence and equity more broadly.
“This isn’t the time to risk making mistakes with a DIY approach. You’re in this boat because if you had known better, you would’ve done better,” she told us. “Nothing is worse than getting it wrong. Let the experts guide you so you do it right.”
For most brands, the first step in “getting it right” will start internally, with building inclusivity in operations, hiring and promotion practices, and supply chains. “It begins at home, so ensure you’re all squared away internally before making external statements that become void of truth once you’re called out on your internal practices,” Hunter advised.
Lebec agreed. “In addition to speaking up, companies need to truly live the values they espouse,” she said. “This includes engaging in catalytic and trust-based philanthropy, impact investing and public-private partnership, supporting public policies that value equality and sustainability, and showing up for local communities.”
If brand leadership has money to invest, the way they choose to do it also makes a big difference — both in terms of maximizing impact and supporting changemakers of color who are often overlooked. “Donate and invest in local, minority-owned businesses and nonprofitsthat have a strong track record with local communities, are typically underfunded, and have the potential to create more thriving local economies,” Lebec told us.
“Corporations can also leverage their philanthropy in ways that will attract other forms of financing to the table — such as impact investment capital — and financially support organizations that are really making a difference here in the U.S. and across developing and emerging markets,” she said. “Investing directly from corporate balance sheets, for instance, could unlock billions to trillion dollars of capital for economic and social equality.”
Don’t have money? Lend your voice. “Support public policies that are leveling the playing field for underrepresented business owners and entrepreneurs and are pro-equality and sustainability,” she advised.
However they do it, brands would be wise to recognize the urgency of getting started. “In 2023, companies need to be vulnerable, action-oriented, timely, creative and authentic — or risk losing relevancy and loyalty,” Lebec said.
By Jerry Anderson, Dean and Professor of Law, Drake University via The Conversation • Reposted: March 16, 2023
It’s expensive to pollute the water in Colorado. The state’s median fine for companies caught violating the federal Clean Water Act is over US$30,000, and violators can be charged much more. In Montana, however, most violators get barely a slap on the wrist – the median fine there is $300.
Similarly, in Virginia, the typical Clean Water Act violation issued by the state is $9,000, while across the border in North Carolina, the median is around $600.
Even federal penalties vary significantly among regions. In the South (EPA Region 6) the median Clean Water Act penalty issued by the U.S. Environmental Protection Agency regional office is $10,000, while in EPA Region 9 (including California, Nevada, Arizona and Hawaii), the median is over six times as high.
We discovered just how startling the differences are in a new study, published in the Stanford Environmental Law Journal. My colleague Amy Vaughan and I reviewed 10 years of EPA data on penalties issued under the Clean Water Act.
The degree of disparity we found in environmental enforcement is disturbing for many reasons. Persistent lenient penalties can lead to lower compliance rates and, therefore, more pollution. At the extreme, a lax enforcement regime can lead to environmental disasters. Disparate enforcement is also unfair, leaving some companies paying far more than others for the same behavior. Without a level playing field, competitive pressure may lead companies to locate in areas with more lenient enforcement.
There is a relatively simple solution, and another good reason to implement it: These disparities may violate the U.S. Constitution.
Why such big differences?
We think the main reason for the differences is that the EPA has not fulfilled its duty to require robust state enforcement.
Many federal environmental statutes – including the Clean Water Act, the Clean Air Act and toxic substances laws – enable the EPA to delegate enforcement to state agencies. In fact, state agencies undertake the vast majority of enforcement actions of these federal laws.
However, the EPA is supposed to delegate enforcement only to states that are deemed capable of taking on this responsibility, including having the ability to issue permits and conduct inspections. Importantly, the states must have laws authorizing an agency or the courts to impose sufficient penalties on violators.
Federal laws like the Clean Water Act helped end corporate practices of pouring toxic wastewater into rivers, as this paper plant was doing near International Falls, Minn., in 1937. Smith Collection/Gado/Getty Images
Most state delegations occurred long ago, in the 1970s and ‘80s, shortly after Congress passed these major environmental statutes. In 1978, EPA decided that it would require states to have a minimum of $5,000-per-day penalty authority before they would be delegated enforcement power for the Clean Water Act. Forty-five years later, that required minimum is still the same.
In contrast, the Clean Water Act gives the EPA and federal courts much higher penalty authority – it started at $25,000 per day and, because of congressionally mandated annual inflation adjustments, had risen to $56,540 by the end of 2022.
That difference shows up in the fines: We found the average penalty issued by states is about $35,000, while the average penalty issued by the federal EPA is over five times as high at $186,000. The median state penalty is $4,000, while the median federal penalty is almost $30,000. While the EPA tends to be involved in the most serious cases, we believe low state penalties can also be traced to more lenient state penalty provisions.
There is also a wide disparity among state penalty statutes. At one end, Idaho law limits civil penalties to $5,000 per day, while Colorado’s law allows for penalties of up to $54,833 per day.
In some cases, penalty differences might have a legitimate explanation. However, the degree of disparity among statutes and penalties that we found with the Clean Water Act suggests the U.S. doesn’t have uniform federal environmental law. And that can run afoul of the Constitution.
A question of unconstitutional unfairness
The EPA has the power to require states to have more robust penalty provisions, more in line with federal penalties. The EPA also can provide better guidance to the states about how those penalties should be calculated. Without guidance, virtually any penalty could be justified.
As an environmental law expert, I believe the U.S. Constitution requires EPA to take these steps.
A basic tenet of fairness holds that like cases should be treated alike. In federal criminal law, for example, sentencing guidelines help limit the disparity that can result from unlimited judicial discretion.
Unfortunately, environmental law doesn’t have a similar system to provide uniform treatment of pollution violations by government agencies. Extreme penalties, at both the high and low ends, may result.
The U.S. Supreme Court has held that disparate fines can reach a degree of randomness that violates the fairness norms embodied in the due process clause of the Constitution’s 14th Amendment.
In a case in the 1990s, the Supreme Court determined that a $4 million punitive damage award in a complaint involving only $4,000 in actual damages violated the due process clause. The court held that the amount of punitive damages imposed must bear some relationship to the actual harm caused by the conduct. Moreover, the court noted that punitive damages must be reasonable when compared to penalties imposed on others for comparable misconduct.
I believe the same test should apply to environmental penalties.
Unless we have some uniform system of calculating penalty amounts, the discretion allowed results in vastly different penalties for similar conduct. Our study focused on the Clean Water Act, but the results should trigger more research to determine whether these issues arise in other environmental areas, such as the Clean Air Act or hazardous waste laws.
The comparatively lenient enforcement we discovered in some states is not only unfair, it’s ultimately bad for the environment.
The Stakeholder Model of Purpose. Graphic: CONSPIRACY OF LOVE
The Stakeholder Model Of Purpose: How Cause Marketing, CSR, Sustainability, DEI And ESG Can Operate Harmoniously In This New Age Of Purpose. By Afdhel Aziz, Contributor, Co-Founder, Conspiracy Of Love, And Good Is The New Cool via Forbes. Reposted: March 16, 2023
One of the biggest questions in the global movement of business as a force for good is how the different disciplines of CSR, ESG, sustainability, cause marketing, and diversity and inclusion all fit with the idea of Purpose.
I propose this simple model to show how they can all work in harmony.
Purpose is the Next Digital
A good analogy to start with comes from the quote ‘Purpose is the next Digital’ by Max Lenderman. In the same way that businesses had to transform themselves in every aspect (from the supply chains to their marketing) with the arrival of digital technology, the same evolution is happening with the advent of Purpose.
We see the emergence of the term ‘Purpose’ – the overarching umbrella term now increasingly being used to describe the idea of business as a force for good – in much the same way as we see the term ‘Digital.’ Just as ‘Digital’ now covers a myriad of different channels and technologies (from CRM, to supply chain management, to social media), so too does Purpose now encompass a wide range of different disciplines that preceded it (like CSR, ESG, DEI, etc).
Moving from Shareholder to Stakeholder Capitalism
The evolution of business we are seeing has also often been described as a move away from purely Shareholder-driven capitalism (where only the needs of investors were taken into account) towards a more Stakeholder-driven model (where the needs of multiple stakeholders including employees, consumers, investors, communities and the planet are also considered).
As such, mapping different manifestations of Purpose against these stakeholder groups provides a simple way to understand how they can all work in harmony, towards the higher order purpose.
Purpose at the core: The higher order reason for a company’s existence that inspires action to profitably solve the problems of the world. This exists as the core organizing principle of a truly Purpose-driven company, acting as a North Star around which to align all of the following.
Diversity, Equity and Inclusivity (DEI) is an Employee-focused manifestation of Purpose, ensuring that there are systems and processes in place in order to ensure a culture of belonging and opportunity, regardless of gender, ethnicity, sexuality, disability or neurodiversity. Inclusion should be baked into every aspect of the employee experience from recruitment to retention to Governance. If done right, it can not only lead to employee motivation and engagement but also innovation that leads to inclusive growth, through identifying new opportunities that less diverse cultures cannot envision.
Of course, DEI is only one manifestation of Purpose as it pertains to employees: there are so many more avenues (from inspiring personal purpose, to volunteering, giving, innovation and more generally, building it into the talent value proposition (TVP) and activating it at every stage from recruitment to onboarding to retention and career planning.
Cause marketing (or Purpose-driven marketing) is the legacy term for the manifestation of Purpose towards Consumers. This has now blossomed into many forms beyond its original basic models of the past.
This could take the form of initiatives that engage consumers via simply buying the product (eg TOM’s famous 1 for 1 model or Product (Red) which helped raise money for HIV/AIDS prevention.
At retail, this could manifest in a portion of revenue from products going to good causes (for instance, see Chips Ahoy raising money for the Boys and Girls Clubs of America).
Or indeed in digital or physical activations (for instance, Airbnb’s Open Homes initiative which invited hosts to donate their homes to refugees and victims of natural disasters).
Corporate Social Responsibility (or CSR) is the manifestation of Purpose towards the Communities a company serves – whether they be geographically contextual (like helping communities in the cities the company is based in) or issue focused (like The North Face funding non-profits that help make the outdoors more diverse via their Explore Fund grant).
This has always been a form of corporate philanthropy that a company has practiced in a more ‘defensive’ mode to deflect criticism of them not being a good corporate citizen. But in recent years, progressive companies have seen the benefit of treating CSR in a more enlightened way. By representing the voice of community to the company, and building deep relationships with non-profits and other partners, it can become a vital force helping drive authenticity, innovation and growth.
Sustainability is the manifestation of Purpose towards the Planet, pertaining to everything from how a company utilizes resources efficiently (like reducing their carbon footprint, stripping plastic out of their supply chain or managing waste) to how it obtains the resources (eg agricultural or mineral) with an ethical supply chain that is respectful not only to the Earth but the people who help them obtain it (eg farmers)
ESG (Environmental, Social, Governance) is the manifestation of all of the above in a codified way towards Investors and Shareholders, in a transparent and measurable way, in a way that allows for comparison between companies. Despite attempts to politicize and demonize it, when done correctly it can become a useful tool to help articulate Commitments the company is making in service of environmental and social goals (people and planet) in an accountable and tangible way.
The key to success in this new world of Purpose is orchestration. When all these disparate disciplines are re-aligned around a powerful and inspiring Purpose, the effect is so much stronger than if they were focused on a myriad of different objectives and issues. They become parts of an orchestra playing a harmonious single theme rather than instruments operating on a discordant solo basis.
How the adoption of new data-driven, omnichannel marketing models can improve CX. By Duncan Steels & Romain Fontaine from Spiceworks.com • Reposted: March 15, 2023
After more than two years of pandemic-induced rapid change and uncertainty, the dust seems to be settling and marketers are left with a “new normal” that looks like more uncertainty and change. Duncan Steels, vice president of customer transformation at Capgemini Invent, and Romain Fontaine, manager of customer transformation at frog, share why marketers need to build a more data-driven and omnichannel strategy to meet CX needs of customers today.
Consumers who raised their standards for customer experience during the pandemic seem to be raising them even higher now, and many companies are playing catch-up. In 2022, rankings fell for 19% of the brands in Forrester’s CX IndexOpens a new window , and Forrester noted that overall CX quality is “reversing gains made in 2021.”
The message should be clear: Consumers are moving forward faster than ever. Organizations, therefore, must let go of the marketing operating models that worked before the digital transformation to meet their needs now and in the sure-to-be-different future. Instead, companies need to adopt capabilities for a new data-driven, omnichannel, collaborative, and agile model. What does an organization need to do this?
Data-driven and real-time marketing strategies require fresh ways of thinking about customer relationships, new technologies for collecting and analyzing data, updated skills for leveraging those analyses. In addition to that, willingness to break down departmental silos to create a more agile, customer-centric organization. As CMOs are still responsible for brand building, they’re also increasingly accountable for technology to analyze and leverage data and insights and for business strategy aligned with brand purpose. Let’s examine the key elements required to enable this transformation and support CMOs in their expanding role.
Data And Insights
In a recent survey of marketing leaders, only 38% said they had customer segment and persona dataOpens a new window to work with. Because creative decisions, from product development to messaging, now hinge on data insights, data forms the foundation of the new marketing operating strategy. When collaborative, cross-disciplinary teams have the same 360-degree view of their customer, it’s easier for the group to develop a comprehensive, consistent customer experience across all touchpoints.
Organizations need to collect, standardize, and unify their data for analysis and insights to have the resources they need for effective decision-making. This requires a consistent data collection framework that eliminates silos and makes data available to all stakeholders across the organization.
Online-offline integration
With data-driven insights, organizations can develop content for online and offline touchpoints to speak to customer needs in those moments and spaces. This creates a more consistent experience across all channels, whether the customer engages with the brand on social media, in a physical store, or on a website.
An effective data collection framework ensures that data from and about customer engagements at all online and offline touchpoints flows into the organization’s customer data platform. That platform then performs analysis that keeps personas and individual customer profiles current. With a continuous stream of new omnichannel data complementing historical data, the platform’s AI can eventually learn which next steps to suggest at each stage of the customer journey, ensuring the right content appears at the right time for every customer.
New Communications And Media Strategy
As the number of channels and touchpoints proliferates and the marketing function becomes more customer-centric, marketers need an updated strategy for engagement that leverages data insights and omnichannel capabilities. For example, continuously updated customer profiles allow for quick changes to messaging as customer behavior and sentiment evolve.
Communication now also requires continuous two-way engagement with customers, up to and including the co-creation of products. Loyal customers and influencers may create brand-related content that businesses are learning to leverage as part of their overall communication strategy. By building communities around the brand, specific products, or consumer tribes (or targeted personas), organizations can amplify or invest in the reach of this user-generated content which further blurs the line between Earned and Paid media. For example, when a customer mentions a company on social media, the marketing team should be ready to engage and build on it. Wendy’s added more than 1 million new Twitter followers after their response to a customer’s question about free food. Ocean Spray seized the opportunity to connect with younger consumers after being included in a viral TikTok that became a popular trend.
Omnichannel Experience
Organizations must unify all customer touchpoints under their single, cross-disciplinary marketing team to support customer experience enhancement. For example, a team member responsible for the direct-to-consumer (D2C) channel might bring in D2C customer feedback that can improve CX in the organization’s social commerce and retail channels. At the same time, feedback from in-store shoppers about, say, the fit of a brand’s popular sweater or pair of jeans can help refine the buying experience for social, e-commerce, and D2C shoppers.
To keep up with the accelerated pace of digital transformation, customer expectations, and the skills that employees need, organizations must have an agile culture—including cross-disciplinary agile pods with the collective skills to pivot to high-ROI, CX-enhancing activities as they emerge and evolve. Organizations also need well-designed change management processes and practices to serve them now and over the long term. Ideally, these agility mindset and change management resources will help the organization adapt to changing expectations and technologies as they emerge instead of reacting.
CMOs also need to ensure their teams have the necessary blend of data, communication, product, and service skills to implement the new marketing operating model—and to work in new ways. The new marketing team must be made up of agile pods of cross-functional talents who can identify high-ROI initiatives and shift priorities quickly, adapt to the ever-changing consumer and competitor landscape, and test and learn to increase speed to market and support continuous improvement of products and activations. A 2021 CMO surveyOpens a new window found that just 44% of marketing leaders said their organization had the data science or AI skills they needed. Closing that gap and committing to this new way of working might require more proactive recruiting, more internal skills development, or both.
Like the other capabilities we’ve covered, effective change management for today’s marketing landscape requires collaboration to draw in information from all team members about what’s happening in their channel or area of expertise. And while some team members may be enthusiastic about contributing across channels and departments, it can be harder for others to adapt to a less linear, hierarchical way of working. Change management must include a strong, visible commitment from leadership, speak to the entire organization, and welcome feedback on changes to be effective.
Putting It All Together: New Functions For The CMO
The CMO is responsible for implementing these capabilities, making a data-driven mindset, agile philosophy, and customer-centric attitude key skills for CMOs to cultivate. So is the ability to listen effectively to questions and feedback from leadership, team members, and customers.
Adding or enhancing the marketing operating capabilities we’ve covered here may seem daunting. However, there’s real value in making those improvements from a marketing KPI standpoint and an agile mindset/change management perspective. By taking these steps now, marketing leaders can build the capacity to keep up with the pace of change and meet customers’ needs as they keep evolving.
Sustainability strategy can be complicated. Here are five key elements to creating a successful one. By Mike Hower from GreenBiz.com • March 14, 2023
Strategy is a term thrown around without much thought or rigor. And this sometimes seems doubly true in the world of corporate sustainability. As more companies embark on their sustainability journey, everybody seems to be talking about the importance of creating a sustainability and ESG strategy — yet what this means exactly remains nebulous.
At its core, strategy is about choices. In a world of limited time and resources, it’s about deciding what to do and what not to do because you have a clear vision of what you want to achieve.
To create some clarity on this important topic, I gathered several sustainability and ESG leaders from across industries for a panel at GreenBiz 23 called “The Non-Negotiables: 5 Key Facets of a Strong ESG and Sustainability Strategy.” The session included Gail Grimmett, senior vice president of sustainability and corporate iInnovation at Delta Air Lines; Annabelle Stamm, director of sustainability strategy at Edison Energy; Blake McGowan, solutions executive at VelocityEHS; and Nancy Mahon, senior vice president of global corporate citizenship and sustainability at The Esteé Lauder Companies.
The breakout room was packed (standing room only, like many of the GreenBiz 23 sessions), with hundreds of attendees curious to learn more from and help contribute to our conversation. After much debate and discussion, the panelists and I — with heavy input from the audience — discussed five key facets of a strong sustainability strategy. Here they are:
1. Be agile, and integrate sustainability into your corporate strategy
The best sustainability strategy is a business strategy that advances sustainability. That’s to say, in a perfect world, a company’s business strategy is focused on creating long-term social, environmental and financial value — making a separate sustainability strategy redundant.
“We always say that we’re trying to work ourselves out of a job,” Mahon said. “But I don’t think we’ll ultimately be able to do that.”
At The Esteé Lauder Companies, the organization integrates sustainability into its business strategy by assigning senior executives to committees covering the environmental, social and governance pillars. The head of supply chain is involved with environment, human resources with social and the CFO with governance. While the committees are led by people at the highest levels, they are made up of practitioners.
We’re all in this together, and in a role that requires some sort of disruptive thinking.
Delta also used a committee system to better align its sustainability strategy with business strategy, Grimmett said. “We’re all in this together, and in a role that requires some sort of disruptive thinking.”
While a company might have a solid sustainability strategy, the world is changing so fast that flexibility must be baked in. All of the panelists agreed that agility and adaptation is critical to sustainability strategy success.
2. Set targets, and know how you’ll measure progress
The next non-negotiable practice is establishing clear targets and a plan for getting there. While setting targets is easy, establishing the right ones isn’t always so simple.
Setting fuel efficiency targets, for example, can be tricky, according to Grimmett, because the airline can’t always directly control every factor impacting fuel efficiency. That’s why Delta has several different councils that encourage integration of all the players responsible for improving fuel efficiency. This could include everyone from airport operations control, which might cause an airplane to burn more fuel when requesting it fly a holding pattern, to technical operations teams that might make technical adjustments to planes to improve efficiency,
“In some ways, we have control over nothing and influence over everything,” said Grimmett.
While many companies set 2030 or 2050 targets, they must also remain focused on the immediate needs of running a business. Setting shorter-term milestones can help companies stay on track and also encourage disruptive technology, Grimmett said. Often, the technology doesn’t yet exist for companies to meet their ambitious sustainability targets, and creating milestones can help unlock entrepreneurial innovation to meet the moment, Grimmett said.
3. Data quality over quantity
We live in an era where sustainability data is plentiful, but its quality is questionable. Rather than focusing on collecting as much information as possible, sustainability teams should focus on finding the right data, the panelists said.
“Good data is fundamental to a successful sustainability strategy,” Stamm said. “Data that drives decarbonization is key.”
We don’t have decades to collect and analyze data, the panelists agreed. We need metrics that can be acted on immediately, so we can implement measures that drive decarbonization and advance sustainability goals.
4. Bring your stakeholders along for the ride
Sustainability teams tend to be small with limited immediate spheres of influence — to be successful, they must rely on stakeholders throughout the organization. One of the best ways to do this is by engaging these folks during strategy creation.
With the language of sustainability being wonky, sustainability leads need to translate things into a language that people understand and link it to a strong value proposition, Stamm said. It’s also important to take cultural differences into account. When it comes to sustainability action, the United States is very carrot-driven while Europe tends to be more about the stick, she added.
The key is to identify those key people who are going to be the influencers … and who is going to be your biggest champion.
“The key is to identify those key people who are going to be the influencers … and who is going to be your biggest champion,” McGowan said. These internal champions will help ensure that your sustainability strategy is effectively implemented, he said.
Another key point is that often when an internal stakeholder says “no” to something, it really means they need more information, McGowan added.
5. Ensure philosophical consistency throughout the organization
Toward the end of the panel, a member of the audience suggested a fifth non-negotiable: achieving a philosophical consensus throughout your organization: To be successful, the same sustainability ethos must be maintained across departments and teams.
If, for example, a company has a strong corporate sustainability strategy yet has a government relations strategy that doesn’t match, this weakens the organization’s overall effectiveness for achieving its sustainability ambitions.
At these words, the audience erupted into applause and the panelists nodded in agreement. Show comments for this story.
By Pete Moss from University World News • Reposted: March 14, 2023
The year 2023 saw the launch of a new league table for higher education institutions based on sustainability.
The QS Sustainability Rankings 2023 set out to measure a university’s ability to tackle the world’s greatest environmental, social and governance challenges. Likewise, the Times Higher Education Impact Rankings, which were introduced four years ago, aim to assess universities against the United Nations Sustainable Development Goals.
But do students really think about an institution’s approach to climate action when deciding where to apply? The answer is a resounding ‘yes’.
According to Times Higher Education research, prospective international students are more likely to choose a university based on its commitment to sustainability than for its location. Considering that a global survey in The Lancet revealed that almost half (45%) of 16- to 25-year-olds are suffering from climate anxiety, it’s understandable that they want to study at an institution which shares their vision for a sustainable future.
Demonstrating climate commitment
If sustainability is now a key factor in attracting and retaining students, institutions need to demonstrate that they are taking genuine, targeted climate action.
The institution that holds the top spot in the QS Sustainability Rankings is the University of California, Berkeley. The university has drawn up a sustainability plan with an ambitious and wide-ranging statement of goals covering aspects such as travel, buildings, health, research and energy.
Second and third place in the rankings go to Canadian institutions, the University of Toronto and the University of British Columbia, both of which are building sustainability right through their operations, from their academic course content to their student accommodation.
Prospective students are looking at factors like these and weighing them up when they make their application decisions.
Strategies for net zero
The higher education sector certainly has a key role to play in responding to the climate emergency. Ground-breaking research is taking place in universities across the world to find alternative energy sources and reduce harmful waste. Academic faculties are educating a whole new generation of experts who will go on to drive innovation and explore new ways to tackle climate change.
However, could institutions be doing more to make their operations sustainable? In the United Kingdom, the Royal Anniversary Trust launched its Platinum Jubilee Challenge which proposes a series of strategies to accelerate the tertiary education sector towards net zero. The initiative has identified three action pathways for universities to address in reducing emissions.
These pathways encompass the built environment, travel and transport, and supply chains – which together make up 80% of the UK higher education sector’s overall carbon footprint.
Perhaps surprisingly, supply chains are by far the biggest contributor to an institution’s carbon emissions, causing 36% of emissions compared with travel at 24% and buildings at 19%. Taking into account the sheer complexity of a university’s supply chain, ranging from research equipment, teaching materials, data storage, catering and business services, perhaps its impact isn’t all that surprising after all.
Sustainable procurement
Fortunately, there are many ways universities can build more sustainability into their supply chains.
Institutions could explore circular economy principles to bring down costs and reduce waste by monitoring the purchase of new equipment.
As part of its environmental strategy, the University of British Columbia in Canada is updating its zero-waste action plan to prioritise emission reductions. The university is also identifying ways to embrace the circular economy on its campuses by promoting sustainable procurement and re-use.
There are opportunities for universities to refresh their procurement policies by adopting sustainable criteria for tenders to support responsible purchasing in all areas of their operations, from laboratory equipment to food and beverages.
One area which offers scope to reduce emissions is IT and data storage. When universities move their systems to the cloud, the shift away from large servers and onsite data centres can significantly reduce carbon emissions. In fact, moving to a cloud solution has the potential to reduce an institution’s IT-related carbon emissions by 90% over a five-year period.
Institutions could also look into offsetting their carbon emissions. Offsetting has attracted criticism in the past, but there has been considerable progress in the sector, led by the Alliance for Sustainability Leadership in Education, to provide a vetted higher education-friendly scheme.
Some vendors are including carbon offsetting as a core part of their commercial offers to the sector, enabling institutions to work towards their carbon reduction goals while supporting climate action.
By putting sustainability at the heart of their operations as well as their research, institutions will address the challenges of the climate crisis and attract students who share their goals.
Pete Moss is a former manager at Staffordshire University, United Kingdom, and is now a director at Ellucian.
By Kristen Philipkoski, Contributor from Forbes.com • Reposted: March 13, 2023
Eco-conscious fashion is on the rise, but one of the most environmentally damaging industry practices—overproduction—is still common.
Fashion brands routinely produce up to 40% more clothing than they think they’ll ever sell, according to severalreports. Clothing companies hope overzealous consumers will surprise them and buy more than forecasts predict. But, as frenzied as shoppers can get, they never buy all the goods manufactured.
As a result, many designers destroy extra merchandise to prevent it from winding up on the racks of off-price retailers and potentially devaluing the brand. Burberry was outed for burning $37.8 million in clothing in 2018. Chanel, Louis Vuitton, and Coach have also been caught in the act.
A new online marketplace called Otrium is providing a safe space for designers to sell their extra, previous-season merchandise at up to 70% off without diluting brand identity. With more than 400 brands already signed on, it’s the responsible shopper’s best kept secret—but it may not be that way for long.
“Every person I tell about this is like ‘how have I not heard of this before?’ This is the year we plan to make that no longer the case,” Otrium’s president and COO Zuhairah Scott Washington said during a recent press call.
Otrium was founded in 2015 by Milan Daniels and Max Klijnstra in Amsterdam and launched it’s American presence in 2021. Business in the states is quickly ramping up, with new brands consistently signing on—Closed and Rosie Assoulinebeing two of their most recent additions. In 2022, Otrium featured more than 5 million products, grew revenue by 1,000% year over year, and grew new members by 500%.
Its growth is thanks to its coveted designers and great prices, certainly, but also because of the unique business to business solutions it offers brands. The company prides itself on giving its partners access to tools that allow them to control their merchandizing, creating less of a warehouse feel and more of a luxury experience.
Brands can also track customer behavior and sales in real time.
“Partners are floored by the level of detail and data that they get about their businesses on our platform,” Washington said. “We really want them to see Otrium as their outlet and another channel for them… to help make better decisions about replenishing on our platform or even reproductions from their own core line of clothing.”
Otrium hosts both mass brands like Diane von Furstenburg and Tommy Hilfiger alongside higher-end (in the Designer Edit section) and cultish ones: Farm Rio is viral on Instagram, Reiss and Belstaff products are hard to find in the states, and Daily Paper is an edgy, inclusive favorite of the avant-fashion set, just to name a few examples.
This is not an entirely new concept—brands like Bluefly, Gilt, and RueLaLa pioneered the concept of selling past-season designer goods at lower prices—and all of those brands struggled to become profitable, eventually pursuing acquisitions in the early 2000s.
But Otrium hopes to differentiate its business by focusing on the sustainability angle and becoming a go-to for both brands and consumers who want to make more conscious consumption decisions.
Otrium also facilitates discovery across brands and hopes to guide customers to current-season, full-price products.
“We connect our consumers to a curated selection of brands they either already know and love, or brands they can discover with a great incentive to try them at a discount,” Mariah Celestine, Otrium’s U.S. General Manager said in an emailed comment. “This ease of discovery may also lead customers to pay full price for a brand’s regular collections, thereby preventing additional fashion waste and furthering our purpose.”
Celestine added that 60% of Otrium customers have tried a brand they’ve never heard of just because it’s on sale.
Fast Company recently named Otrium one of the most innovative companies of 2023 in the fashion and apparel category, “For convincing luxury brands to sell, rather than burn, last season’s merchandise.”
Industry experts say innovation is key to solving fashion’s pollution problem.
“Fashion has always been a hotbed for innovation, as well as a catalyst for social change; it’s time to leverage the industry’s creative energy to design better business models—ones that operate within the means of the planet rather than a take-make-waste approach,” wrote Angela Adams, a senior sustainability consultant at Quantis in 2021. “These could include rental, resale and repair schemes; pre-order models of production, print on demand and a departure from the traditional seasonal cycle; and a greater emphasis on product quality and durability, which is often compromised to fuel the industry’s unsustainable business model.”
Otrium’s tagline states that it wants to ensure “every piece of clothing that’s made is worn.” It’s a lofty goal, considering the literal mountains of unwanted clothing clogging African beaches, and considering Otrium does not partner with the fast fashion brands responsible for much of that detritus.
Otrium’s “code of conduct” requires partners commit to several environmental, social and government factors including fur-free garments, prohibiting human trafficking, child labor, slavery, discrimination in all forms as well as abiding by laws and regulations.
“Our aim is two-fold: to empower brands to improve their environmental impact and connect them to a base of conscious shoppers, and to help consumers build a timeless wardrobe of quality pieces that can be worn again and again, thus reducing the reliance on a ‘trend-driven’ consumption cycle,” Washington said. “This is not what fast fashion companies are known for.”
Shunning fast fashion just might be the way to go. A “total abandonment of the fast-fashion model, linked to a decline in overproduction and overconsumption, and a corresponding decrease in material,” is essential for reducing environmental damage, according to a 2020 paper published in Nature Reviews Earth & Environment.
Other experts say even small changes can make a big difference when it comes to the enormous problem or overproduction.
Washington hopes that by helping consumers see fashion as a creative expression instead of a cycle of trend-driven consumption, they can be a catalyst for real change in the fashion industry.
“Fashion is the largest art form in the world,” she said. “And we’re really excited about providing an opportunity that allows individuals to determine their own style—not just take what people say is the hottest today but really giving them a sustainable alternative to find items that speak to them and their own personal style.”
From The University of Minnesota Climate Adaptation Partnership and national design firm HGA • Reposted: March 13, 2023
The University of Minnesota Climate Adaptation Partnership and national design firm HGA present the current practice, barriers, and opportunities for use of climate projection data and climate change resilience client services.
Climate change impacts are growing every year, threatening lives, business continuity, and infrastructure—costing an average of $152.9 billion dollars per year in the U.S. alone (NOAA, 2022). Yet the Architecture and Engineering (A&E) industry still relies on historical weather data as a primary resource for performance analysis, system sizing, and other design decisions, as climate projection data are not available in the formats used by A&E codes, process guidelines, and software.
The new report “Climate Forward? How Climate Projections Are(n’t) Used to Inform Design” from the University of Minnesota Climate Adaptation Partnership (MCAP) and national interdisciplinary design firm HGA, reveals the alarming gap between the current state of A&E practice and climate science.
Currently, energy modelers most often use the Typical Meteorological Year (TMY3) dataset produced by the National Renewable Energy Laboratory (NREL)— based on past median weather conditions for a given location that is sometimes more than three decades old. Our changing climate makes ‘climate normals’ less useful for designers, poorly reflecting the range, frequency, and intensity of potential future weather conditions that a building will need to withstand during its lifespan. Key systems and infrastructure globally will continue to be vulnerable unless design standards change to account for changing climate.
“We know climate change is here and the past is no longer the best predictor of the future. As we seek to make our buildings more energy efficient and ‘climate-friendly’, we must also use climate projection data to ensure our built environment is resilient to the climate of the future.” say Dr. Heidi Roop, MCAP’s Director and a report author. “This report highlights that there is work to do by the climate science community and A&E professionals to ensure we are designing for climate resilience. Clients and professional societies also play a key role in driving a holistic, forward-looking approach to design of the buildings and infrastructure we all rely on.”
The research makes a decisive case for the development and promotion of industry standards, mandates (including building codes), guidance and training for using climate projections in A&E applications. It also articulates the critical role for boundary organizations and climate data developers to build partnerships and capacities to bridge this gap alongside A&E professionals.
“Climate Forward?” also addresses the missed opportunity to extend the life of our buildings. Today’s sustainable design efforts focus primarily on climate change mitigation—that of reducing carbon emissions. In contrast, MCAP and HGA’s research shows how the industry should also shift to design for climate change adaptation—which are a broader set of design measures that factor in the projected climate over the lifespan of the building and systems.
Lead author of the report, Ariane Laxo, HGA’s Director of Sustainability said, “There is tremendous potential in climate resilience services—professional services related to climate change resilience and/or adaptation using climate projection data.” She continued, “identifying the right data formats and timescales to factor in the projected climate over the lifespan of the building, landscape, and systems, will dramatically change the way we design to create a more resilient future. Industry associations need to create standards for how to integrate these data into practice, so we are using consistent methodologies.”
The climate is changing rapidly. Action must be taken now, and must involve substantive collaboration with climate data developers, boundary organizations, A&E associations and professionals, policy makers, building code & standards bodies, higher education institutions, and any organization that hires A&E professionals. The report concludes with recommended actions that could close the gap between climate science and the A&E professionals who are designing buildings and infrastructure that must withstand climate change.
Report authors: Ariane Laxo, HGA, Brenda Hoppe, University of Minnesota Climate Adaptation Partnership, Heidi Roop, University of Minnesota Climate Adaptation Partnership, Patrick Cipriano, HGA and University of Minnesota Climate Adaptation Partnership
About MCAP
The University of Minnesota Climate Adaptation Partnership (MCAP) is a partnership among university, public, non-profit, and private sector groups organized to support Minnesota’s ability to adapt to a changing climate. MCAP conducts cutting-edge climate and adaptation research, champions climate leadership, develops the next generation of adaptation professionals, and advances implementation of effective, equitable adaptation actions across sectors, communities, and levels of government. Learn more about MCAP at climate.umn.edu or follow us on Twitter or LinkedIn.
About HGA HGA is a national interdisciplinary design firm committed to making a positive, lasting impact for our clients and communities through research-based, holistic solutions. We believe that great design requires a sense of curiosity—forming deep insight into our clients, their contexts, and the human condition. We are a collective of over 1,000 architects, engineers, interior designers, planners, researchers, and strategists. Our practice spans multiple markets, including healthcare, corporate, cultural, education, local and federal government, and science and technology. Visit HGA.com or follow us on Facebook, Twitter, LinkedIn, and Instagram.
By Sean Ashcroft from supplychaindigital.com • Reposted: March 12, 2023
Capgemini Global Retail Lead Lindsey Mazza says retailers need not sacrifice affordability or profitability to meet their sustainability goals. “Our own research shows 41% of consumers globally are willing to pay more for a product they believe to be sustainable,” she says. Submitted photo
Capgemini Global Retail Lead Lindsey Mazza on how a systems engineering background is helping her service the supply chain needs of value chain customers
Your professional background?
I started my career in systems engineering and, over the years, have expanded my solutions to include everything from supplier to consumer.
I currently work with leading retailers to reimagine how they fulfil consumer promises. An exciting part of my role is leveraging AI, analytics, and emerging technology to reinvent operations and meet consumer expectations.
What are the challenges of your Capgemini role?
I help retailers navigate today’s many challenges and transform their businesses. I rely on my systems engineering background to research and learn where opportunities exist, then collaborate with our immensely talented teams to deliver solutions that drive business outcomes.
That might be creating intelligent, adaptive supply chain ecosystems, fulfilment options, unlocking channel growth, underpinned with technology and analytics that deliver personalised and engaging consumer experiences.
How can retailers counter rising operational costs?
Automation, AI, and other leading technologies can make all the difference, and I am seeing the benefits with our clients. Data and analytics, AI, and automation in product and supply chain planning processes – not to mention that last-mile consumer fulfilment can support optimised costs – maximise use of labour, and further sustainability objectives.
For example, analytics can be used to reduce inventory, identify underperforming areas, and recommend solutions to increase efficiency. Using real-time data and intelligent integrated planning, consumer products companies and retailers can customise the right assortment mix, and have the right inventory for each store or channel.
And autonomous vehicle delivery – although early in development – could transform the last-mile delivery cost model.
How can firms best develop sustainable products?
Sustainability can be embedded throughout the entire product lifecycle, starting from the design process and selection of materials to end-of-life management.
To address Scope 3 emissions, businesses need to consider the system as a whole. It’s also important to conduct a life-cycle assessment to evaluate the environmental impact of a product – from raw material extraction to disposal – to identify areas where the environmental impact can be reduced.
Can retail be sustainable and affordable in today’s world?
Definitely, and it must be. Retailers need not sacrifice affordability or profitability to meet their sustainability goals. Our own research shows 41% of consumers globally are willing to pay more for a product they believe to be sustainable.
So, while consumers are keen to buy sustainable products, they are not willing to pay more. Brands and retailers must respond to consumer concerns by keeping prices fair – providing affordable sustainability will therefore be key. Consumers are also conscious about reducing waste and mindful about consumption practices. Retailers embracing circular economy will create a brand ethos that matches the ethics of the consumer.
What advice would you give to your younger self?
I’ve had tremendous leaders and mentors throughout my career. There are two lessons I’m so grateful to have learned from them:
Always, always, always take the more challenging role, because you’ll learn more. I’ve built a view across the supply ecosystem by taking unexpected roles where I was able to learn.
Create your next job. We can all see areas where our companies can improve. Design that role, develop a benefits case for why that role will create value, advocate for it to be in next year’s budget, and get that role.
Greenwashing has become part of our modern-day lexicon. Now there’s a new term, ‘green hushing,’ for when a company is too quiet about its accomplishments. By Talib Visram from Fast Company • Reposted: March 12, 21023
Greenwashing—the term referring to businesses exaggerating their commitment to sustainability—is now firmly rooted in our modern-day lexicon. Baseless green claims draw public scrutiny and sometimes outrage, not to mention lawsuits, such as ones filed against companies including Dasani, Kroger, and Whole Foods.
Faced with the threats of tarnished reputations and legal trouble, some companies are instead choosing not to communicate their climate goals at all, leaving them unpublicized and meaning other companies can’t emulate their success. A new term has sprouted to signify the practice: green hushing.
WHAT IS GREEN HUSHING?
Green hushing refers to companies purposely keeping quiet about their sustainability goals, even if they are well-intentioned or plausible, for fear of being labeled greenwashers.
Xavier Font, professor of sustainability marketing at the University of Surrey in the U.K., defines it as: “the deliberate downplaying of your sustainability practices for fear that it will make your company look less competent, or have a negative consequence for you.”
HOW LONG HAS THIS TERM BEEN AROUND, AND HOW COMMON IS IT?
Since at least 2017. Font had seen the term only once before studying the practice more closely that year. And for something many of us may not have heard of, the practice is pretty prevalent. “Greenwashing is very visible,” Font says. “Green hushing, by definition, is not. [But] I think green hushing happens a lot more than we realize.”
It gained more widespread coverage after October 2022, when Swiss carbon finance consultancy South Pole highlighted the trend of green hushing in a report. It noted that nearly a quarter of 1,200 companies with a sustainability head are not publicizing achievements “beyond the bare minimum.” (Belgium had the highest rate, with 41% of its companies with science-based climate targets not publicizing them.) The report called the trend “concerning,” because publishing green actions has the power to inspire others, shift mindsets, and encourage collaborative approaches.
WHAT DOES IT LOOK LIKE IN PRACTICE?
In his study, Font, who focuses on the tourism industry, found that companies were not communicating environmental successes to consumers, especially odd in an industry where there are many chances to do so, such as at hotels or on websites.
The study concentrated on 31 small rural tourism businesses in England’s Peak District National Park. Font found that companies communicated only 30% of their sustainability actions.He noted that companies feared that by broadcasting their sustainability practices, customers would believe their vacation experiences would be worse.
One issue, he says, is that many companies aren’t sure when to announce achievements. A hotel he worked with that procured sustainable seafood sourcing didn’t know whether to announce it when launching, or when half of its hotels used it, or when all of them did. “If 50% of my supply chain is doing something,” he was asked, “is that a message that is credible for me to communicate to the world?”
Similarly, Font mentions pushback over supermarkets labeling bananas as fair trade, because customers then asked why more goods weren’t fair trade. “Many companies are choosing to not talk about it, simply for fear that the customers will see the glass as being half empty, not half full,” he says.
For larger companies, there are legal motivations to not report extensively. In recent years, lawsuits have been filed against Dasani for claiming its water bottles were 100% recyclable, and Kroger for claiming its sunscreen was “reef-friendly.” Cracking down on these false claims—like the ubiquitous “locally sourced wherever possible”—is a good thing, Font says. “That’s a bit like me saying, ‘I’m a good husband whenever possible,’” he says. “It has no value.”
Several states, most notably Florida, are divesting billions of dollars from BlackRock because it has developed strong ESG portfolios. “We see attacks being more irrational and so fierce,” says Peter Seele, a professor of corporate social responsibility and business ethics at Università della Svizzera Italiana in Switzerland. This has created another reason for companies to stay silent, or else also be on the receiving end of “anti-woke” tirades.
That polarization is troubling, Font says, and seeps into customers’ beliefs, which requires businesses to be culturally sensitive in the markets they operate in. “If I was a company in the U.S., serving the full range of customers, I would downplay the ‘S word,’” he says, referring to sustainability. They may want to spin a sustainable practice as one that is beneficial to customers in some other way.
“In the U.S., we’re just more litigious,” says Anant Sundaram, professor of business and climate change at Dartmouth University. “You say something in your 10K, or you put out some document, [and] immediately it becomes the basis for a lawsuit.” So American companies “tend to prefer to stay under the radar, and are a little gun-shy.”
WHAT COULD REDUCE GREEN HUSHING?
Climate reporting is now prevalent across developed nations. And the disclosures on climate risks, mitigation, and sustainable strategies that companies submit to government agencies are publicly accessible. But mostly, they are voluntary—allowing businesses to green hush.
Companies are keeping relatively quiet about most of their climate data. In the U.S., a report found that while 71% of S&P 500 companies report their greenhouse gas emissions, only 28% of smaller companies do so. And only 15% of S&P 500 companies disclose information on biodiversity and deforestation, and 12% on water risks.
But public reporting is changing soon. In the EU, climate disclosures will become mandatory in 2025, and for a wider swath of companies than previously. In the U.S., the Securities and Exchange Commission aims to roll out stricter regulations for 2024 (which will initially be for larger, publicly traded companies, with market caps of at least $700 million). This stricter enforcement may give businesses less of a choice to practice green hushing.
WHAT ARE THE CONSEQUENCES OF GREEN HUSHING?
It’s not ideal. As the Swiss report noted, companies discussing their climate actions can have positive knock-on effects and create change. But not if they’re silent.
Greenwashing crackdowns are valuable, but not if they are indiscriminate. Seele says there is a trend of attacking companies no matter how good their actions or intentions—which has brought about another phrase in the German media: “greenwashing truther,” for people who launch those kinds of accusations.
And in France, new greenwashing laws will place fines on companies for making misleading claims like being carbon neutral. While well-intended, such laws may serve to reduce greenwashing but heighten green hushing.
By Austin Simms, Dayrize from retailtouchpoints.com • Reposted; March 9, 2023
Concerns over climate change continue to mount, and there is an increasing demand for companies to decrease their environmental impact through whatever means possible. Take CO2 emissions for example. In 2020, 140 of the largest companies stated their intentions to completely eliminate emissions within the next few decades. Since then, many of their initiatives have focused on transportation. It makes the most sense on the surface, as cars and trucks are responsible for almost 20% of emissions in the U.S. alone. CPG (Consumer Packaged Goods) brands that have chosen to focus on the optimization of supply chains or reducing emissions within the “last-mile” of delivery may seem like the most logical, efficient step — but is it?
Many environmental champions also see sustainable packaging as a concrete measure to reduce CO2 or tackle environmental concerns, such as water depletion, due to the large consumption of water by various industries. Brands will often highlight their transition toward more eco-friendly packaging as one of their major initiatives to become more green, with hundreds of major corporations joining the Sustainable Packaging Coalition. Unfortunately, there is reliable evidence that these are not the right targets.
Surprisingly — and according to aggregate, anonymized data derived from over 10,000 products from a number of CPG brands and companies tracked via Dayrize’s environmental impact assessment technology — transportation and packaging are responsible for a relatively negligible amount of CO2 emissions by makers of CPGs and apparel. In fact, creating more sustainable methods for consumer products to be packaged and transported addresses a mere 2% of CO2 emissions. Another surprise revealed by the same data: when it comes to apparel, packaging is far less of a factor in water depletion than the actual product inside the packaging.
Dayrize environmental impact assessment technology makes these calculations by combining the latest technology with the most recent developments in sustainability science. At the core of the software solution are 31 databases — including 14 that are proprietary — that provide rapid, accurate and actionable impact results. The technology was created by a team of 80+ industrial ecologists and sustainability experts over a period of two years to provide the fastest and most accurate impact results available.
The results are generated using five key factors that produce a simple-to-understand Dayrize Score, which is out of 100. The factors include:
Circularity: How well an individual product minimizes waste by reusing and recycling resources to create a closed loop system;
Climate Impact: How greenhouse gas-intensive the production of the product is;
Ecosystem Impact: What the impact of the product is on biodiversity and water depletion;
Livelihoods and Well-being: How each product impacts the health and well-being of the people involved in creating it;
Purpose: How meaningful a product’s purpose is by looking at the value that it provides, and the potential it has to be an accelerator for good.
The environmental impact score helps companies and consumers gain insights into the environmental impact of virtually all products, including consumer packaged goods and apparel.
The necessity for environmental impact research is demonstrated in part by our look at the sources of CO2 emissions from consumer products and water depletion in the apparel industry. Even incredibly popular and “common knowledge” solutions about how to address environmental harm meaningfully can often be incorrect in very significant — and possibly damaging — ways.
When it comes to CPGs, it’s crucial that companies keep the following facts in mind:
On average, only 1% of emitted carbon is due to packaging, while 1% comes from transportation and 2% can be traced to manufacturing for a typical consumer product.
The lion’s share of CO2 emissions come from the materials that are used in products. Up to 96% of the emissions that CPGs are responsible for are from a product’s materials.
CPG companies that want to be truly eco-friendly need to ensure their products are eco-friendly. To reduce carbon emissions, CPGs need to reassess the design of their products and the materials they’re using.
Packaging has a more consequential impact on water depletion when it comes to apparel, but nowhere near the impact of the apparel itself. For every 3.2 gallons of water that packaging depletes, the average garment depletes ten times that: 32 gallons. More eco-conscious packaging can increase an apparel company’s sustainability, but shifting attention to producing more sustainable garments can help reduce the 90% of water that is being used to create the garment.
There is an enormous opportunity to make garments more sustainable. After scoring tens of thousands of pieces of clothing, we found that only 1% of garments utilize materials that are reused. Additionally, only 5% of garments use recycled materials. This is paltry compared to the number of clothes disposed of each year: “The EPA reports that Americans generate 16M tons of textile waste a year, equaling just over 6% of total municipal waste…2.5M tons of clothing are recycled. But over three million tons are incinerated, and a staggering 10M tons get sent to landfills.”
Clearly, there are more than enough materials to re-integrate into apparel, which would help companies mitigate water depletion and other harmful environmental effects of their products.
Many companies may have good intentions, but they need to research how to achieve their goals of creating sustainable products. There are myriad ways to make it seem to the public that sustainability is a priority, but making it a reality requires both the willingness to make some tough choices and a clear understanding of what steps will truly make a difference.
Austin Simms co-founded Dayrize in 2019 and serves as its CEO. After 20+ years spent working in senior commercial positions at major corporations around the world, Simms had a desire to use his skills to address climate change. With a strong commercial background, he believed that empowering corporations was key to make real change. He recognized that the first thing that companies needed to change was access to information to make better decisions, which is why he developed the Dayrize Score tool. Simms believes commerce and sustainability are linked, and business needs to be a major catalyst for addressing climate change.
By Dan Berthiaume, Senior Editor, Technology from chainstoreage.com • Reposted: March 9, 2023
A new survey reveals how many consumers consider environmental sustainability and social responsibility in buying decisions.
According to the 2023 KPMG Winter Consumer Pulse Survey of 1,000 U.S. consumers, 37% of respondents consider environmental sustainability and 33% consider social responsibility when making a purchase. Following is a closer look at data from each set of respondents.
Environmental sustainability findings
Of respondents who consider environmental sustainability, more than 75% are looking for environmentally friendly products and/or packaging.
In addition, approximately 50% of these respondents determine a product’s environmental sustainability based on product labels, descriptions, images, or marketing. And 50% of respondents age 13-17 say that environmental sustainability is important to purchase decisions.
Overall, respondents are most likely to choose a product/service based on environmental sustainability features in the personal care products (48%), groceries (44%), restaurants (42%), and apparel (42%) categories.
Social responsibility findings
Of respondents who say a company’s social responsibility is important to their purchase decisions, over half (51%) determine a product’s social responsibility based on product labels. Respondents age 13-17 are more likely to say that social responsibility is important to their purchase decisions (41% vs. 33% overall).
The categories for which respondents are most likely to choose a product or service based on social responsibility features are restaurants, apparel, and personal care products. And over 75% of respondents are at least somewhat familiar with social responsibility, with more than 50% of them associating social responsibility with diversity, equity, and inclusion (DEI); employee human rights; health and safety; and fair wages.
“When a sizeable segment of consumers considers environmental sustainability and social responsibility in their purchase decisions, consumer goods and retail companies are taking note,” said Julia Wilson, KPMG consumer and retail ESG leader. “As they consider both factors, companies will need to continue to innovate and push supply chains to deliver on increasing consumer expectations for their products.”
“The power of consumer purchase preferences to drive more socially responsible and sustainable practices from companies cannot be underestimated,” said Rob Fisher, KPMG US ESG leader. “Increasingly, consumers are aligning their purchase preferences with their values and priorities, incentivizing brands to publicly disclose what they are doing, why they are doing it, and where they are on their ESG journeys with their customers.”
Research has more than made the case for linking environmental, social and governance (ESG) strategies to corporate profitability. What’s good for people and the planet does, indeed, benefit a company’s bottom line. The trickier part is determining what programs will yield the best results for the investment.
Some ESG pathways are easier to attain and measure direct results, such as cost reductions. But top-line market growth demands a greater understanding of customer wishes and perceptions of a company’s ESG efforts. Those expectations and priorities will differ by industry sector, as well as by geographies, cultures, and demographics like age and gender.
While studies and reports can point companies in the right direction with top-level overviews of trends and industry insights, real-time survey and data collection can dig deeper into what consumers prize in ESG efforts.
Measuring consumer ESG priorities across industries, brands and more
Glow, a research-technology business with offices in North America, Europe and Asia-Pacific, first started tracking what consumers think about ESG issues in relation to purchasing decisions over two years ago. It began with a field of approximately 40 issues that, through multiple research studies across three markets (U.S., U.K. and Australia), were then synthesized into 13 ESG drivers of consumer priorities and perceptions.
The process yielded a diagnostic tool called the Social Responsibility Score (SRS) that not only provides a number to tell a company how it is perceived in its ESG efforts, but also where it stands in its industry and against its competitors and why consumers score it that way.
For example, among food and grocery (F&G) companies in particular, three environmental drivers — reducing emissions, respecting natural resources, and protecting wildlife and ecosystems — ranked highest for importance among consumers, as shown below.
The ESG drivers that matter most to consumers for the food and grocery sector. The longer the ‘wedge,’ the more important that driver is for the industry. (Click here to enlarge)
This isn’t to say social drivers like health and well-being aren’t important to F&G customers — they are. But understanding consumers’ top concerns at a given time can help companies prioritize, in terms of both programming and messaging successes. Communicating accomplishments in the areas that matter most to consumers can translate into customer loyalty as well as brand switching.
On the other hand, if a brand and its competitors are all communicating about the same things, it can be harder to stand out. In cases like these, a brand may opt to lean into an area that isn’t as much of a focus for peers and competitors. Or, if it finds it’s under-performing compared to peers on key issues that matter to consumers, it may decide to invest more in those areas and communicate an improvement story.
Listening to consumers via data capture enables this kind of decision-making, helping brands to get the most return on their ESG investments.
ESG risks and opportunities for two anonymized F&G competitors from Australia. (Click to enlarge)
Take, for example, these two anonymized F&G competitors from Australia, shown above. Both brands mapped their SRS in relation to the industry benchmark (the green line). Brand A clearly outshines Brand B on virtually all of the 13 drivers. The achievement gap in the areas most important to consumers, such as “reducing emissions” is substantial enough to be a significant opportunity for Brand A to message that success to customers hungry for guidance on where to invest their purchasing power. Meanwhile, Brand B can see where it’s progressing and where further investments can help it improve credibility.
ESG drivers differ across industries
What weighs heaviest on consumers’ minds will vary across industries. For example, Glow found that governance and social drivers are the biggest influences on ESG credentials in the health insurance industry in the U.S., as shown below.
The ESG drivers that matter most to consumers for the health insurance sector. The longer the ‘wedge,’ the more important that driver is for the industry. (Click here to enlarge)
In travel and tourism, on the other hand, U.S. customers view all three divisions of environmental, social and governance factors as important for the sector to address.
The ESG drivers that matter most to consumers for the travel and tourism sector. (Click here to enlarge)
In a balanced framework such as the latter, drilling further down into age, gender, geography, and competition among brands is vital to determine the focus for programs and messaging to avoid spreading investment and resources too thin.
Continuing to zero-in on what matters to who
Price and quality are typically the engines powering consumer choices, but business leaders may be surprised at how strong “sustainability” has become as a beacon to consumers looking for safe harbor for their purchasing dollars.
This is especially true in the F&G sector — where 1 in 2 U.S. consumers have switched brandsbased on sustainability considerations, and 1 in 5 ranked ESG/sustainability as one of the top three drivers for deciding what brands to purchase, according to Glow data.
Diving deeper to look at age segmentation, millennials prized ESG/sustainability even higher, with 1 in 3 such consumers rating it as one of their top three considerations, behind price and quality. Further, 10 percent of millennials rated ESG/sustainability as the top influencer of their purchase decisions, even more than price and quality, Glow found.
These findings demonstrate the importance of ESG initiatives and messaging to any company’s bottom line. To fail in listening and responding to consumers in this regard is to surrender profits and reputation to competitors that are willing to leverage the feedback.
Data and surveys give a brand that feedback continuously since the measurements can be taken over set time periods, in connection with program launches or in tandem with media campaigns.
“The response from people taking these surveys is actually very clear. You can understand what it is that’s driving the consumer response and what’s driving the metric you receive,” said Tim Clover, CEO of Glow. “It allows you to line up the programs you’re running with the different areas and ask, ‘Are these the programs we should be communicating?’ If so, to whom do we communicate and through which media?”
Alignment of ESG programs with consumer expectations, coupled with alignment of messaging to bring about positive public perception of those programs, creates a winning combination for brands.
The tools exist to know what ESG concerns consumers really care about. The decision to use those tools enables business leaders to enhance brand profitability while “doing the right thing.”
This article series is sponsored by Glow and produced by the TriplePundit editorial team.
Medical assistant Jennifer Martinez draws blood from Joshua Smith in Newburgh, N.Y., Nov. 3, 2016, to test for PFOS levels. PFOS had been used for years in firefighting foam at the nearby military air base, and was found in the city’s drinking water reservoir at levels exceeding federal guidelines. AP Photo/Mike Groll
By Jennifer Weeks, Senior Environment + Energy Editor, The Conversation • Reposed: March 7, 2023
The U.S. Environmental Protection Agency is preparing to release a draft regulation limiting two fluorinated chemicals, known by the abbreviations PFOAand PFOS, in drinking water. These chemicals are two types of PFAS, a broad class of substances often referred to as “forever chemicals” because they are very persistent in the environment.
PFAS are widely used in hundreds of products, from nonstick cookware coatings to food packaging, stain- and water-resistant clothing and firefighting foams. Studies show that high levels of PFAS exposure may lead to health effects that include reduced immune system function, increased cholesterol levels and elevated risk of kidney or testicular cancer.
Population-based screenings over the past 20 years show that most Americans have been exposed to PFAS and have detectable levels in their blood. The new regulation is designed to protect public health by setting an enforceable maximum standard limiting how much of the two target chemicals can be present in drinking water – one of the main human exposure pathways.
These three articles from The Conversation’s archives explain growing concerns about the health effects of exposure to PFAS and why many experts support national regulation of these chemicals.
1. Ubiquitous and persistent
PFAS are useful in many types of products because they provide resistance to water, grease and stains, and protect against fire. Studies have found that most products labeled stain- or water-resistant contained PFAS – even if those products are labeled as “nontoxic” or “green.”
“Once people are exposed to PFAS, the chemicals remain in their bodies for a long time – months to years, depending on the specific compound – and they can accumulate over time,” wrote Middlebury College environmental health scholar Kathryn Crawford. A 2021 review of PFAS toxicity studies in humans “concluded with a high degree of certainty that PFAS contribute to thyroid disease, elevated cholesterol, liver damage and kidney and testicular cancer.”
The review also found strong evidence that in utero PFAS exposure increases the chances that babies will be born at low birth weights and have reduced immune responses to vaccines. Other possible effects yet to be confirmed include “inflammatory bowel disease, reduced fertility, breast cancer and an increased likelihood of miscarriage and developing high blood pressure and preeclampsia during pregnancy.”
“Collectively, this is a formidable list of diseases and disorders,” Crawford observed.
2. Why national regulations are needed
Under the Safe Drinking Water Act, the Environmental Protection Agency has the authority to set enforceable national regulations for drinking water contaminants. It also can require state, local and tribal governments, which manage drinking water supplies, to monitor public water systems for the presence of contaminants.
Until now, however, the agency has not set binding standards limiting PFAS exposure, although it has issued nonbinding advisory guidelines. In 2009 the agency established a health advisory level for PFOA in drinking water of 400 parts per trillion. In 2016, it lowered this recommendation to 70 parts per trillion, and in 2022 it reduced this threshold to near-zero.
But many scientists have found fault with this approach. EPA’s one-at-a-time approach to assessing potentially harmful chemicals “isn’t working for PFAS, given the sheer number of them and the fact that manufacturers commonly replace toxic substances with ‘regrettable substitutes – similar, lesser-known chemicals that also threaten human health and the environment,” wrote North Carolina State University biologist Carol Kwiatkowski.
In 2020 Kwiatkowski and other scientists urged the EPA to manage the entire class of PFAS chemicals as a group, instead of one by one. “We also support an ‘essential uses’ approach that would restrict their production and use only to products that are critical for health and proper functioning of society, such as medical devices and safety equipment. And we have recommended developing safer non-PFAS alternatives,” she wrote.
3. Breaking down PFAS
PFAS chemicals are widely present in water, air, soil and fish around the world. Unlike with some other types of pollutants, there is no natural process that breaks down PFAS once they get into water or soil. Many scientists are working to develop ways of capturing these chemicals from the environment and breaking them down into harmless components.
There are ways to filter PFAS out of water, but that’s just the start. “Once PFAS is captured, then you have to dispose of PFAS-loaded activated carbons, and PFAS still moves around. If you bury contaminated materials in a landfill or elsewhere, PFAS will eventually leach out. That’s why finding ways to destroy it are essential,” wrote Michigan State University chemists A. Daniel Jones and Hui Li.
Incineration is the most common technique, they explained, but that typically requires heating the materials to around 1,500 degrees Celsius (2,730 degrees Fahrenheit), which is expensive and requires special incinerators. Various chemical processes offer alternatives, but the approaches that have been developed so far are hard to scale up. And converting PFAS into toxic byproducts is a significant concern.
“If there’s a lesson to be learned, it’s that we need to think through the full life cycle of products. How long do we really need chemicals to last?” Jones and Li wrote.To
By Riya Anne Polcastro from triplepndit.com • Reposted: March 7, 2023
By 2050, plastic consumption in the world’s top economies could be almost twice what it was in 2019. And it’s not even on track to peak this century. That’s according to a new report from Back to Blue, a multi-year joint initiative from the Economist Impact and the Nippon Foundation. Researchers from the initiative say it’s possible to avoid an extreme plastic waste crisis through “bold and sweeping reforms” — and they’re urging U.N. countries to enact multiple stringent and binding policy changes.
But while pushback is expected from certain industries, “Peak Plastics: Bending the Consumption Curve” demonstrates that — when it comes to curbing the tide of plastic pollution that is barreling down the pipeline — there is no room for half-measures. Rather, businesses must choose long-term purpose over profit and lead a cultural change away from single-use plastics.
No single policy can do it alone
Back to Blue researchers used modeling to determine the effectiveness of three different policies that are being considered for inclusion in the U.N. Treaty on Plastic Pollution, compared to the business-as-usual scenario that would lead to 451 million metric tons of new plastic consumption per year by 2050. The forthcoming U.N. treaty is the culmination of agreements made in March 2022 that will bind 175 countries to its stipulations. Negotiations are in progress, and policies should be implemented by the end of next year.
Researchers chose the three policies deemed to have the most potential to affect total plastic consumption for modeling: taxes on the production of new plastics, measures for extended producer responsibility, known as “polluter pays,” and a ban on single-use plastics. They found that no single policy would be capable of substantially curtailing the problem by itself.
Multiple measures needed to curb avalanche of plastic consumption
Banning single-use plastics proved to be the most beneficial of the three policies. Under that scenario, plastic consumption in 2050 would be roughly 1.5 times what it was in 2019 ⸺ as opposed to the 1.73 times that can be expected if nothing is done. Likewise, if a tax on new plastics were the only strategy implemented, it would still lead to 1.57 times more plastic produced each year by 2050. A “polluter pays” policy would also do little on its own, with consumption increasing 1.66 times.
Put together, implementing all three strategies would lower the increase to 1.25 times 2019 levels. However, the study’s authors doubt that the U.N. treaty will ultimately have the teeth needed to force the trajectory of plastic consumption downward.
“This report confirms that an urgent, global effort is needed to stop the flood of plastic pollution at its source,” David Azoulay, director of environmental health at the Center for International Environmental Law, said in a statement announcing the report. “The entire lifecycle of plastics, from feedstock extraction and production of plastic precursors to disposal, must be addressed by the future, legally binding U.N. treaty to end plastic pollution. The policy levers examined in this report will not be sufficient: bolder action is needed, including globally coordinated tax mechanisms coupled with ambitious caps on virgin plastic production.”
Negotiators must maintain ‘the highest levels of ambition’
Of course, neither the petrochemical industry nor producers of consumer goods will take such changes lying down. Like all regulations that threaten profits, they will likely fight tooth and nail against any limits that affect their bottom lines.
“Negotiators of the U.N. plastics treaty must maintain the highest levels of ambition possible when entering the next round of negotiations, and industry needs to play a constructive, not obstructive, role in reaching a deal,” Charles Goddard, editorial director of Economist Impact, said in a statement. “So far, commitments by industry, retailers and brands to reduce plastic waste are short on detail and have failed to materialize. We have to slow the soaring production of single-use plastic. Only a bold suite of legally-binding policies will result in plastic consumption peaking by mid-century.”
Making room for purpose and creative solutions
The transition away from plastic consumption will be painful at first, but it also presents an opportunity for leadership. Businesses that value purpose and choose to make the most out of coming policy changes could see elevated brand loyalty — especially among Gen Z consumers — as well as increased competitiveness when it comes to securing talent and even potentially higher profits in the long run.
The policy changes that are being considered for the U.N. treaty could also increase the market share of certain industries and products as consumers adjust to a world without plastic take-out containers and bottled water. In fact, while an entire cultural overhaul will be necessary, businesses with a strong sense of purpose can help lead the charge by offering innovative products and strategies to help the planet recover from our plastic addiction. Regardless of how business reacts, the U.N. must move forward with drastic new regulations.
By Emma Chervek | Reporter from SDxCentral • Reposted: March 6, 2023
Sustainability is one of the first areas enterprises will reduce spending in response to inflated economic environments, according to new research from Gartner. Senior Director Analyst Brendan Williams told SDxCentral that despite executive recognition of sustainability as an important objective, this is “a classic example of the tragedy of the commons at work.”
The analyst firm’s “2022 Inflation Response Survey” found 39% of respondents expect sustainability will be one of the first two areas where their company limits investment. And just 15% believe this area will be one of the final areas impacted by reduced spending.
A major driver of environmental, social, and governance (ESG) initiatives has been the cost savings of efficiency improvements tied to sustainability efforts. But many corporate leadership teams seem hung up on the fact that it still costs money to implement those types of measures. “The question with environmental sustainability is whether executives see these initiatives simply as costs, or whether they view them as having a positive impact on cost and efficiency,” Williams explained.
While Gartner research shows that business executives directly involved with sustainability-related decisions are four-times more likely to view ESG as supportive of cost reduction rather than as another cost itself, “there is still work that needs to be done to convince certain stakeholders,” he admitted. It’s pretty self-explanatory that improving energy efficiency, for example, will have a positive environmental and economic impact, but that relationship can be less obvious with long-term projects or programs.
When it comes to cutting spending, the challenge lies in prioritization and the difference between urgent and important. Most executives understand sustainability is important, and “a difficult macroeconomic background isn’t going to change their minds, but it could cause them to prioritize issues that are viewed as more urgent, over issues that are important but seen as less urgent,” Williams said.
He argued a case needs to be made that environmental sustainability is both of those things: important and urgent. To that point, the next few years will determine just how resilient companies’ sustainability efforts are, considering it’ll be “the first time that we experience a cyclical economic downturn” since sustainability fell into mainstream corporate focus.
Sustainable Tragedy
Environmental sustainability exists chiefly to mitigate and respond to climate change’s near- and long-term impacts. Williams noted sustainability’s ties to the corporate world are ultimately driven by scientific evidence, but the reality of climate change alone isn’t enough to land sustainability in both the urgent and important categories of enterprise activities.
Williams highlighted the COVID-19 pandemic for its acceleration of corporate sustainability and ESG efforts, “and if you look at what has changed over that period, I don’t think it was anything particularly new in the underlying scientific knowledge, but rather that there has been a change in how society as a whole thinks about the importance and urgency of environmental sustainability,” he said.
For many corporate leaders, the impact of climate science has been less direct and has surfaced through customer, employee, shareholder, and regulator pressures. While there are certainly enterprise execs leading these changes, many are “simply responding to a change emanating from society at large,” he noted.
This scenario represents a clear example of the tragedy of the commons, Williams argued. Certain sustainability initiatives carry obvious positive business results like revenue increases, cost reductions, and risk limitations, but companies would likely implement those initiatives regardless of the environmental benefits. That’s why profit tends to be a weak motivator for positive environmental behavior.
“Unfortunately, [environmental sustainability] is not always that neat or convenient, and the individual profit motive is poorly suited to incentivize for many of the changes we as a society need to enact to achieve our environmental goals,” Williams said.
At the end of the day, corporations can’t be left to their own devices and be expected to meaningfully respond to climate change, he argued, citing economists’ term for environmental challenges: negative externalities. “This is one of the reasons why governments and other institutions have such an important role to play in incentivizing behavior (amongst individuals as well as businesses) that serves the common good,” Williams said.
Without well-designed industry regulations, an enterprise that does want to take responsibility for its role in climate change “may be worried that doing the right thing will put them at a competitive disadvantage,” he explained.
The word “sustainability” has never been more popular in the corporate world. The number of companies appointing a chief sustainability officer (CSO) is rising rapidly: In 2021 more CSOs were hired than in the previous five years combined.
But despite good intentions — and widespread acceptance of the importance of sustainability — there is still a lack of clarity about a CSO’s tasks and accountabilities. For example, at one large European consumer goods firm we consulted with, there are numerous job titles in a variety of units that include the word “sustainability.” The result is fragmented ownership, internal competition for visibility and resources, and inefficiency with a great deal of overlap and duplication.
The confusion is not surprising. While other functions and roles, such as the CFO or CMO, are well established, the CSO role was virtually unheard of until recently. History and benchmarks are limited. This partly explains the inconsistent job descriptions, the different mandates and accountabilities, as well as the variety of reporting lines. Despite their increasing profile, only a minority (35%) of CSOs report directly to the CEO. In most cases, the person responsible for sustainability is constrained by a limited and different remit — reporting to the COO when emphasizing an efficiency role; to the CFO when the focus is on investor relations; to the chief communications officer when PR is important; or to the general counsel when attention is on compliance. In other cases, the role is distributed over two or three different departments. ESG separation is not uncommon: the “E” of environmental under the COO, the “S” of social under the CHRO, and the “G” of governance under corporate legal.
We’ve been here before. Fragmentation and a lack of clarity is common when new roles are introduced; think for example of the rise of the chief digital officer or the chief innovation officer in C-suites over the last decade or so. In the beginning their tasks and responsibilities were not well codified, creating confusion about accountabilities, fragmentations, and even tensions with other overlapping functions.
To clear the fog and help C-suites define the position and responsibilities of the CSO, we created a simple visual framework.
Eight Critical Tasks for CSOs
We originally designed our “8-task spider graph” for the role of chief innovation officer. As the tool proved powerful, we revised it for the newly created position of the CSO. It breaks the CSO role into eight distinct tasks:
Ensuring regulatory compliance. Anticipate regulatory trends and their implications. Establish adherence to the sustainability laws and regulations that apply to each industry, process, and type of business. Assess risk management. Enact internal policies.
ESG monitoring and reporting. Collect data and metrics following the reporting standards. Benchmark with industry peers. Prepare the completion and communications of company ESG report.
Overseeing the portfolio of sustainability projects. Act as a project management office: planning, coordinating, reviewing progress, and tracking results to coordinate various operational efforts.
Managing stakeholders’ relationships. Promote ongoing dialogue with internal and external stakeholders in order to develop constructive, transparent relationships.
Building organizational capabilities. Identify gaps and adopt appropriate educational initiatives for upskilling and/or sourcing the missing capabilities. Identify innovative ways to scale the new capabilities. Share and disseminate knowledge and best practices.
Fostering cultural change. Help define and communicate purpose to drive the transformation. Champion cultural change across the entire organization also through education. Promote mindset shifts based on concrete behaviors. Establish routines to reinforce the change, for a credible “walk the talk” from leaders.
Scouting and experimenting. Promote openness toward the external innovation ecosystem. Explore emerging sustainability technologies, solutions, and practices. Test the applicability and learn from experiments. Scale up adoption in the broader organization.
Embedding sustainability into processes and decision making. Revise key processes and related criteria/metrics/tools for decisions. Coach decision makers to manage complex trade-offs.
Visualizing the Eight Tasks
Spider graphs (also known as radar graphs) are often used to display data across several unique dimensions. Plotting the CSO’s eight tasks — and the amount of effort spent on each — on a spider graph can help executives figure out the actual coverage of responsibilities, where the current focus is, where there may be a need to increase efforts, and where gaps are. Visual clarity fosters strategic discussions and attention on what really counts rather than on details.
Start by positioning each of the eight tasks on the outside points of seven concentric octagons, starting at the top and working clockwise. Then have a group discussion to determine how much effort is currently being used on each task and assign them a number using the following scale:
1–2: Low effort
3–5: Medium effort
6–7: High effort
Then for each task, position a dot on the octagon that corresponds with its level of effort. For example, if you rate task two as a four on the effort scale, position its dot on the fourth octagon from the middle.
When we worked with a German manufacturer, the executive team posed many questions about organizational details and specific procedures, but it soon became evident that they lacked focus and strategic thinking on the “what” and the “why” of the CSO role. We encouraged them to clear up the ambiguity by creating an 8-task spider graph in an executive workshop setting, before jumping into the dynamics of organizational design.
In fact, visualizing the current positioning of the role on the spider graph was an awakening exercise. The company realized that several tasks were not sufficiently covered. The CSO role appeared skewed mainly on operational and regulatory aspects. In addition, in discussing each task, they found an almost exclusive emphasis on climate change.
Once the team agreed on the actual positioning, the discussion moved on to the evolution of the CSO role and how to ensure a better balance by investing in underserved dimensions. The executive team updated the graph accordingly.
Here are four tips that can help executives make good use of the eight-task spider graph:
Take ownership of all eight tasks.
To lead the sustainability transformation of their companies, CSOs should be accountable for all eight items. We’ve come across a lot of organizations that are too focused on the regulatory and legal elements or external communications but overlook cultural elements or capability building.
Think beyond “E.”
Each task should be articulated not only around environmental scope (as it often happens), but should also take into consideration the other dimensions of sustainability.
Consider “Scouting & Experimenting,” (task seven on the spider graph): When determining this task’s sub-activities, companies should move beyond only looking at new technologies for CO2 reduction. For example, the CSO could test new approaches for social inclusion of the company’s target communities or new models for more transparent and fair employee compensation.
Define the phases of the evolution.
While it’s key to have a target positioning for the mid-to-long term, it’s often not realistic to invest in all underserved tasks simultaneously. The shift does not happen overnight. Define which gaps to close first and which ones to address later, depending on the context of the company (e.g., type of culture, level of skills, organizational setup) and its sector (e.g., types of external stakeholders and regulations).
For example, a newly appointed CSO we interviewed recognized the need to cover all eight tasks to achieve a more pervasive transformation. However, pressing regulatory issues prompted her to place more emphasis on tasks one and two of the spider graph. This allowed her to concentrate organizational efforts to rapidly close the most critical gaps (skills, systems, and data) and consequently comply with the new directives without incurring significant fines.
Leverage the graph for alignment. Do not put the spider graph in a drawer. Use its visual power to communicate the evolving positioning with the executive team and other units. Transparency and simplicity will reinforce alignment and clarity within the broader organization.
. . .
In the end, CSOs and executive teams need to think very carefully about what to do — and what can be done differently — to successfully execute their company’s sustainability agenda. Taking the time to visualize the CSO’s eight tasks will help ensure that the role is balanced, covering the different dimensions of sustainability.
Gabriele Rosani is director of content and research at Capgemini Invent’s Management Lab. A regular contributor to leading management reviews, he collaborates with Thinkers50 and the Business Ecosystem Alliance.
By Laura Steele from Submittable • Reposted: March 6, 2023
Too often, in an effort to track something, corporate social responsibility and ESG leaders focus on metrics that don’t hold much meaning. When it comes to employee volunteering specifically, there’s a pervasive “check-the-box” mentality that values inputs over outputs and processes over people.
For instance, the number of volunteer hours your team logs (input) doesn’t mean much if most of the time was spent sitting around waiting for instructions instead of doing work that actually improves peoples’ lives (outcome).
In contrast, impact measurement seeks to understand the relationship between your efforts and real, meaningful outcomes. You want to know: are you moving the needle?
Impact measurement requires you to be more intentional about how you define and identify “impact.” This effort will not only help your team understand your program’s ROI today, it will help you evolve your initiatives to be more meaningful for your business, your employees, and the community in the long term.
Track the true impact of corporate volunteering
Impact measurement is a guide, not a grade. You’re not trying to slap a passing or failing grade on your program. Rather, you’re earnestly asking tough questions about how your efforts make change.
Give meaningful support to your nonprofit partners?
These questions are large and unwieldy. There’s rarely a simple answer, and it can be difficult to tie specific inputs to clear and quantifiable outcomes.
To measure the impact of corporate volunteering, you have to embrace the complexity. Here’s how.
Prioritize outcomes over activities
The activities you do matter much less than what effect you make. Think about it this way: if you’re trying to put out a fire, you wouldn’t measure your success by how many gallons of water you pour on the flames. What matters is if you put the fire out.
It’s easy to get distracted by measuring inputs (like the amount of water you use), but be sure to tie the inputs you track to the outcomes you want (flames extinguished). Pumping a lot of water may feel important, but if you don’t aim that water at the fire, you’re not having the impact you want.
Focus on meaningful contribution
As you set goals around specific outcomes, keep in mind that even an incredibly successful volunteer program isn’t going to single-handedly reverse negative trends or solve big issues. Set goals that are not only attainable, but also recognize the role your program plays within the larger context of your company, community, and society as a whole.
For instance, your program might play a role in increasing employee retention at your company, but that’s not the only factor determining whether people stick around. Other internal initiatives and policies matter along with external market forces. Measuring the impact of corporate volunteering is not about taking full credit for progress, it’s about making a meaningful contribution.
Consider how metrics are in conversation with one another
As you choose metrics to track, you’ll likely find some overlap. That’s natural. What’s good for employees is often good for the community, which is good for the brand. Be less concerned about drawing hard borders or categories and make space to think about how outcomes might influence one another.
Now, let’s get into what metrics you might choose to track for your volunteering program.
Which corporate volunteering metrics should I track?
To measure the impact of corporate volunteering, think about your impact across four categories: participants, corporate, the nonprofit, and the community.
Personal fulfillment: Volunteering can be personally rewarding. A Harvard report found that “higher levels of volunteer work were associated with higher levels of overall life satisfaction.”
Skills development: As a venue to try on new roles and take risks, volunteering can help support employees’ professional development. One study found that “40–45% of the employee volunteers claimed some level of improvement in skills pertaining to leadership, mentorship, motivating others, project management, and public speaking and presenting.”
Exposure to new people and perspectives: Stepping into a volunteer role can enable participants to meet people from different backgrounds and encourage them to be more open to perspectives that differ from their own.
What metrics to track:
% of employees who participate in volunteering
% of participants who would recommend volunteering to others
% of volunteers who report improved skills
% of volunteers who continue to volunteer
Level of engagement in dialogue at the volunteer event
Recruitment and retention: CSR efforts can help you stand out from other companies as you vie for top talent. Plus, employees who volunteer are 32% less likely to churn.
Improved company culture: Volunteering is an exercise in empathy and collaboration, two important building blocks of a healthy team culture.
What metrics to track:
Customer loyalty metrics like customer satisfaction score
Employee retention
Employee satisfaction metrics like employee net promoter score
% of employees who would recommend the company to a friend
Nonprofit organization
By building partnerships, you can leverage the power of your brand and resources to strengthen community nonprofits.
Increased capacity and reach: More volunteers means more capacity to reach new people and launch new programs. That’s no small thing. A projection from United Way estimated that if each company with the largest revenue headquartered in (or with a major office in) each state implemented one day of volunteer time off, it would add 75 million volunteer hours—that’s 9 million days—to the nonprofit capacity.
Improved strategic planning and innovation: With volunteer support, nonprofit staff have more time to dedicate to the deeper strategic planning and innovation that’s necessary for long-term success.
Name recognition and credibility: By partnering with a nonprofit, you can help increase their brand awareness in the community, helping them secure even more support.
What metrics to track:
Volunteer hours contributed
Increase in nonprofit outputs
Number of beneficiaries reached
Number of new donations secured
New partnerships formed
New programs launched by the nonprofit
Community
An effective volunteer program not only benefits the institutions and participants, but it makes a meaningful difference in the lives of community members.
Increased access to services: Meeting people’s basic needs can have a profound impact on their ability to thrive. A study published in the American Journal of Preventive Medicine found that food insecurity, for example, was “associated with poorer mental health and specific psychosocial stressors.”
Improved quality of life: No matter what causes your volunteers are dedicated to, they have the potential to improve the quality of life for the whole community, whether that’s through direct service work with people or projects that improve communal spaces and resources.
Deeper awareness of community needs: A volunteer program is also a natural way to draw attention to a cause. As volunteers learn more about community needs, they become advocates, spreading awareness and building support for new initiatives and policies.
What metrics to track:
Number of people served
Qualitative feedback from community members
Quality of life metrics like unemployment, mortality, or graduation rate
Build the right framework for your volunteer program
Do not try to track all the metrics listed above. If you’re just starting to measure the impact of corporate volunteering, choose one or two meaningful targets and build from there. You don’t want to get so bogged down with reporting that you lose sight of the mission at hand.
As you build structure around your program, keep in mind that you can rely on systems that are already in place. Rather than starting from scratch, you could use existing:
Employee surveys
Sales and revenue tracking
Retention metrics
Nonprofit impact reports
Community statistics and indicators
Identify what levers you think will support change. If employee engagement is one of your goals, you might want to ask yourself what mechanisms are in place to ensure that volunteer events align with employee values. If you can’t point to anything specific, that’s a red flag. You might consider democratizing the process to allow employees a voice in building nonprofit partnerships and planning events.
Don’t view impact measurement (or your program) as static. You’ll need to stay open to iteration as your team and the community evolves. The right technology can help you manage this dynamic process.
Stephen Ardern, managing director at Continuous on the need for brands to incorporate sustainability to improve operations. Reposted: March 3, 2023
In today’s boardrooms, sustainability is increasingly becoming a vital aspect of an organisation’s brand strategy. Consumers are becoming more conscious of the environmental and social impacts of the products they buy, and they are looking for brands that align with their values. Investors are also increasing pressure on organisations to consider sustainability in their operations. As a result, successful brands are increasingly becoming those brands that are truly sustainable.
Boston Consulting Group highlighted that companies that prioritise sustainability outperform their peers financially, with a median total return to shareholders of 16% per year compared to non-sustainably focused companies’ median of 3%.
At its core, sustainability is about creating value for all stakeholders in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs. It involves balancing economic, social, and environmental considerations to create long-term value for everyone involved. In the context of branding, sustainability means creating a brand that is resilient, responsible, and responsive to the changing needs of consumers, employees, and the environment. And the payoff is increasing the value of your brand.
Accenture found that companies that prioritise sustainability and have a strong corporate social responsibility (CSR) reputation have a higher brand value and customer loyalty.
Sustainability is becoming a key differentiator in the marketplace. As more and more brands make environmental, social and governance (ESG) commitments, it becomes harder for brands that are not sustainable to compete. Consumers are becoming savvier, and they are increasingly choosing to buy from brands that they perceive as responsible and environmentally friendly. Brands that don’t take sustainability seriously risk losing market share to those that do.
A clear commitment to sustainability also helps create a strong sense of purpose, identity, and values that are clear to customers. This creates a sense of authenticity and trust that is hard to replicate. Additionally, by investing in sustainable solutions, brands can tap into growing consumer demand for products that align with their values.
Sustainability can also help brands to improve their operations, which in turn can help to improve their bottom line. Brands committed to more sustainable working practices often take a more holistic view of their operations, and they can identify areas that can improve efficiency and reduce costs. By committing to sustainability, brands can often create new revenue streams by selling sustainable products or services.
A study by the Carbon Trust found that companies that implement sustainable practices have a lower risk of operational disruptions and supply chain issues
A report by McKinsey & Company found that companies that prioritise sustainability in their operations and supply chain have a more resilient and efficient business, with cost savings of up to 20%.
The University of Cambridge Institute for Sustainability Leadership found that companies prioritising sustainability are more likely to be innovative, with a higher likelihood of introducing new products and services.
Sustainability can help to improve employee engagement and retention. Brands committed to sustainability often create a sense of purpose and meaning among employees, which can lead to improved employee satisfaction and retention. By making clear commitments that resonate with employees, brands can create a positive reputation, which can help to attract top talent.
A report by Deloitte found that companies with strong sustainability practices have lower employee turnover rates and higher levels of employee engagement.
This isn’t only true of the B2C space. Sustainability is equally important to B2B. More scrutiny than ever before is being placed on the supply chain. And improved employee engagement, enhanced brand reputation, and stronger customer loyalty are vital regardless of whether an organisation is B2C or B2B.
Those brands leading the charge in this area are increasingly recognised for their progress. This, in turn, is helping differentiate from competitors, creating a strong sense of purpose and identity, improving employee engagement and retention, and operational efficiency that improves the bottom line. With more demand from customers and within the supply chain, it’s clear that the brands unable to adapt to these demands will fall behind and will eventually face extinction.
The most important consideration is communication. Stakeholders must understand the priorities around sustainability and any progress made. Communication needs to be clear and make sense. All too often, corporate messaging is lost in highfalutin or oblique messages that are ambiguous or simply lost. Here are five considerations for improving communication in this area:
1. Be transparent: Be open about the practices and policies that make your brand sustainable.
2. Use clear language: Use specific, measurable terms and avoid buzzwords and vague claims.
3. Show your impact: Use data and storytelling to demonstrate the impact your brand is making, but make it clear for everyone to understand.
4. Engage your customers: Encourage customer involvement in your sustainability initiatives by offering ways to get involved.
5. Continuously improve: Continuously evaluate and improve your sustainability practices. Set new goals, experiment with new technologies, and communicate your progress to your customers.
We work with a growing number of clients that have the ambition to be more sustainable. They realise there’s lots of work to do. They plan for the long term and adapt to changes in the short term. They communicate clearly and regularly. They have the ambition to be better. And they will be more successful for it.
By Mandi McReynolds, Head of Global ESG, Workiva • Republished: March 1, 2023
A recent Workiva survey has revealed that a majority of senior decision makers surveyed have noted a positive correlation between their ESG practices and tangible business value.
While the idea of building corporate value through ESG isn’t new, the path to success in this area isn’t always clear.
During a panel discussion organised by the Financial Times in partnership with Workiva titled ‘The Future of ESG and Sustainability Reporting’, I argued that “it all comes down to values translating to value.” But how does this work in practice?
Where ESG and value creation come together
When considering the link between ESG and value creation, the incentives and pressures brought in by governments and external stakeholders may be the first things to come to mind.
As expectations and regulations rise, the immediate benefits of keeping up soon become apparent—both in the form of ‘carrots’ like ESG-linked executive compensation schemes, and ‘sticks’ such as potential penalties from regulators or limited access to capital financial institutions or customers..
Although these considerations are crucial, focusing exclusively on external, shorter-term motivators and detractors fails to dive deeper into the true purpose and complexity of ESG, thereby limiting the potential for greater growth and value creation over a much longer period of time. The relationship between ESG and financial success is multi-layered, requiring a more holistic view in order to be fully harnessed.
If done correctly, ESG strategies can help companies increase their value in a number of key areas, including:
Top-line growth
Lower costs
Alignment with governmental initiatives
Talent retention
Return on company investments
Stronger risk management practices
While these are all potential areas for value creation through sound ESG practices, not each of these will be equally important for every company. To stand out, business leaders need to determine specific areas of focus that make sense for their company.
‘Values’: a question of materiality
This brings us to the idea of ‘values’.
It’s worth unpacking what is meant in this context. In a politically and socially divided world, the term—which carries with it implications of a shared moral code—can feel loaded.
To some extent, it’s undeniable that ESG initiatives on a global scale follow a particular ethical framework (regarding, for instance, human rights or environmental sustainability). But while companies are obliged to follow certain standards in how they operate and report, they are not being asked to single-handedly address and solve all of the world’s problems—a common misinterpretation of ESG that can lead to disjointed initiatives, a ‘scattergun’ approach of trying to address everything at once, or even accusations of greenwashing.
The purpose of ESG is to enable company stakeholders to make sound, informed decisions that take into account the wider environmental and social context within which the company is operating. The idea of ‘values’ in this context therefore relates more closely to a shared company mission and questions of materiality.
Of course, being seen to make a positive impact on the world is becoming a highly material question for many organisations. Consumers, stakeholders and governments are expecting more from corporations, and these expectations need to be taken into account. However, standalone ‘feel good’ initiatives which are divorced from the bread and butter of the organisation are more likely to be ineffective, or even do real damage, than to provide tangible benefits.
To build real value for the business, the focus of an ESG strategy needs to be closely tied to the company’s daily activities, taking into account its particular circumstances alongside its existing strengths and resources. While a multinational food distributor, for instance, may wish to leverage new technologies for tracking the journey and carbon footprint of individual items of food, a consultancy might choose to focus their efforts on adopting innovative solutions for measuring the happiness and wellbeing of their staff.
Determine your purpose, then tell your story
The final—and perhaps most crucial—piece of the puzzle is the ability to communicate the information in a transparent, consistent and reliable manner, underpinned by verified and verifiable data.
While the CSRD comes into play in Europe, the SEC begins to introduce new disclosure requirements and mandatory ESG reporting looms on the horizon throughout the world, this level of rigour and transparency will soon become a baseline requirement. Having ready access to reliable data is essential, but organisations also need to understand why they’re in the data and what story they’re telling. By having established a purpose and area of focus underpinned by shared organisational values, leaders will be able to tell a compelling ESG story that has clear meaning and direction in a way that both showcases and increases the value of the organisation.
How local leaders can partner with financial institutions to support frontline communities. By Erin Ceynar & Samantha Ender from Greenzbiz.com • Reposted: March 1, 2023
Image courtesy of Wells Fargo.
This article is sponsored by Wells Fargo and written by Erin Ceynar and Samantha Ender from the Tides Foundation — a Wells Fargo Climate and Social Justice Fund partner.
Climate change isn’t a problem for the future. It’s happening right now. In 2022 alone, the United States endured wildfires, hurricanes, extreme flooding and decreased crop production.
Despite this real and growing threat, the global community is not moving quickly enough to address climate change. The 2015 Paris Agreement aims to limit global temperature rise to 1.5 degrees Celsius. However, a U.N. report released in October notes that without drastic reductions in greenhouse gas emissions, the world is on track to warm by an average of 2.1 to 2.9 degrees Celsius over preindustrial levels by the end of the century.
Climate change affects every person on the planet, but frontline communities — those that inhabit areas that face the worst consequences of climate change — are more vulnerable than most. Small fractions of a degree can affect these communities, leading to infrastructure failures, food and water scarcity, and worsening health outcomes. Rather than addressing these imminent dangers to human lives, however, most climate change relief funding focuses on our relatively slow transition to a low-carbon future.
In 2021, the United States and Canada received $810 million in foundation funding for climate change mitigation. Most of those mitigation dollars were directed towards lowering emissions and improving carbon capture in sectors such as forest protection, overlooking the effects of climate change on American communities experiencing floods, landslides and drought.
In New Orleans, devastated by Hurricane Katrina in 2005, extreme rainfall is an ongoing threat. The challenging natural landscape, combined with disinvestment in infrastructure, leaves the community vulnerable to dangerous flooding. In particular, heavy rain in the city’s 7th Ward significantly affects low-income residents of color who live in low-lying areas where affordable housing is more accessible. The flooding also drives toxic contaminants into the soil, producing respiratory and gastrointestinal health concerns.
The Partnership for Resilient Communities (PRC), a project of the Institute for Sustainable Communities (ISC), supports community leaders of color in strengthening resilient communities. New Orleans community activist Angela Chalk, executive director of PRC partner Healthy Community Services, partnered with ISC to work alongside residents and install rain gardens at their homes to minimize flooding in their neighborhood. The gardens hold water, easing the burden on the city’s old drainage system. This attainable and impactful solution demonstrates how community-driven work can educate residents about climate change while also expanding resources that deliver results.
The rain gardens highlight what we can achieve when frontline communities have a seat at the decision-making table. They intimately understand the challenges they face, the resources they can bring to bear and the solutions that will be successful and durable. In other words, engaging with community leaders provides invaluable context, helping financial partners avoid pitfalls that would otherwise remain hidden.
These grassroots and community-led approaches present homegrown solutions to promote equitable development. Climate interventions that target community-identified problems and give communities decision-making power are more likely to be both successful and sustainable. The goal is to uplift community-driven efforts to create a more resilient, sustainable and vibrant future. However, a lack of access to capital and technical expertise can hamstring these efforts.
Frontline communities need genuine partners who can offer financial support while allowing the community to lead. Financial partners shouldn’t shy away from this approach, falsely assuming that it is slower, less efficient, and less impactful than the usual top-down model.
To achieve climate justice for disinvested communities, financial partners can adopt a cooperative playbook:
Partner with communities from the outset.
Work with community leaders to identify challenges, opportunities and resources.
Work with community leaders to co-develop solutions.
Support on-the-ground, community-designed programs.
Provide the expertise, training and technical resources needed to strengthen community organizations.
Remain committed and engaged for the long term.
Following these steps drastically increases a grant’s impact, strengthens civil society and ensures that the community’s perspective is respected and centered.
As climate change intensifies, the coming years will challenge us all. Resilience demands committed partnerships with funders who have a shared vision of a prosperous and just world. Enduring change is possible when we invest in our communities and find ways to offer support that goes beyond checkbooks. Through these partnerships, we can ensure a robust and lasting impact.
By Mary Mazzoni from Triple pundit • Reposted: February 17, 2023
The U.S. Environmental Protection Agency is moving the Greenhouse Gas Reduction Fund forward and making good on its recently renewed commitments to environmental and climate justice.
Created by the Inflation Reduction Act of 2022, the Fund aims to mobilize public and private capital to reduce emissions and combat air pollution across the U.S., with a focus on low-income and historically marginalized communities.
As a first step, the Fund will host two grant competitions worth $27 billion, the EPA announced in its initial guidance last week. A $7 billion competition will award grants to 60 organizations providing clean technologies like community solar and energy storage within U.S. communities. A second will disburse $20 billion to anywhere from two to 15 nonprofit lenders, including community-based lenders and green banks that provide financial assistance for low- and zero-emission technologies in low-income communities.
“The Greenhouse Gas Reduction Fund will unlock historic investments to combat the climate crisis and deliver results for the American people, especially those who have too often been left behind,” said EPA Administrator Michael S. Regan, the first Black man to head the agency, in a statement. “With $27 billion from President Biden’s investments in America, this program will mobilize billions more in private capital to reduce pollution and improve public health, all while lowering energy costs, increasing energy security, creating good-paying jobs and boosting economic prosperity in communities across the country.”
Those are pretty big words, but a host of environmental and climate justice advocates agree about the Fund’s promise. “This is a huge step,” Adam Kent, Sarah Dougherty and Douglass Sims of the Natural Resources Defense Council’s People and Communities Program, wrote of the Fund in a blog. “It has the potential to not only improve lives, but ultimately transform ‘green’ investments into ‘mainstream’ investments by catalyzing far, far more than $27 billion of investments and building a more equitable clean energy future.”
$27 billion and beyond: Mobilizing funds for climate justice in U.S. communities
An estimated 1 out of every 25 premature deaths in the U.S. can be linked to air pollution — more than traffic accidents and shootings combined. People of color and low-income people are more likely to be exposed to high levels of air pollution and as such are at greater risk of premature death. These communities also face outsized impacts from climate change.
Addressing environmental and climate justice issues like these is a key focus in President Joe Biden’s plan to leverage federal funds to advance racial equity. Launched during Biden’s first week in office, the Justice40 Initiative looks to direct 40 percent of the overall benefits of certain federal investments to disadvantaged communities that are underserved and overburdened by pollution.
The Fund will align with Justice40 and take things a step further. “Although the law requires that just over half of Fund investments target low-income and disadvantaged communities, EPA will aim to prioritize investments in these communities throughout the entire $27 billion program,” report Kent, Dougherty and Sims of the NRDC. “This decision could transform how funding flows to underserved communities, and Fund investments can support critical, life-improving projects that otherwise would not have moved forward.”
The $7 billion in grants for clean technologies has the potential to scale transformative solutions like community solar and energy storage that can decarbonize underserved communities while reducing the burden of air pollution. The idea is that a cash infusion from the EPA can help recipient organizations grow and deploy even more community-based projects in pursuit of climate justice, similarly to how a $456 million federal loan helped Tesla become the world’s largest electric vehicle manufacturer.
“These projects have the potential to create local benefits including savings on energy costs, reliability improvements, and improved air quality, as well as reducing climate pollution,” said Heather McTeer Toney, vice president of community engagement for the Environmental Defense Fund, in a statement.
Further, the EPA’s decision to diversify its portfolio of nonprofit lenders — rather than investing in a single entity — will allow funds to reach more communities through institutions with proven track records of community-based and green lending. “This is a sound decision, as NRDC and many of our environmental justice and community-based partners have pushed EPA to select multiple recipients as a critical feature of Fund implementation,” Kent, Dougherty and Sims wrote.
The next step
Both grant competitions are expected to launch in early summer. Organizations will have two to three months to submit their applications, and the EPA plans to make awards by late September of next year.
The architecture of the Fund is based on input from state, local and Tribal governments, community financing institutions, environmental justice organizations, industry groups, and labor and environmental finance experts, the EPA said — and advocates are calling on the agency to keep the engagement up as it moves to start disbursing grants.
“This is a positive step toward making the just transition affordable and accessible to those most in need,” Jessica Garcia, climate finance policy analyst at Americans for Financial Reform Education Fund, said in a statement. “The EPA should continue collecting feedback from the directly impacted communities that this fund aims to serve and developing robust criteria for its applicants to achieve its dual directive of protecting communities from climate impacts and providing them financial tools to safeguard their future. ”
Lucy Usher of Oliver looks into research that suggests that few people really trust brands to follow through on their sustainability promises – and recommends how to bridge that gap.
No one likes making promises they can’t keep, least of all businesses in the public eye. Yet, right now, as the world heads deeper into financial instability, some fear that brands and businesses won’t be able to keep their sustainability promises.
Achieving net zero is, wrongly, seen as expensive, difficult and only for the fortunate few. But by slowing down on sustainable and net zero goals, businesses put themselves behind the transformation needed to succeed in a net zero world that continues to sprint ahead.
Promises matter now more than ever (just look at the state of politics). Delivering on the commitments we’ve made will not only deliver better brands and companies for this and future generations; it’ll also deliver trust, responsibility and accountability within boardrooms.
Here are the ways brands and businesses can become uncompromisable on their sustainability promises in 2023 (arguably one of the most challenging years for the climate on record).
The far-reaching financial benefits of being a trusted brand
As a measurable framework for advertising emissions emerges, brands will no longer be able to ignore the tension between growth targets and net zero investment.
Alongside reputational benefits, there are clear financial benefits to being a trusted sustainable brand. Brands with a strong sustainability DNA outperform competitors by 21%, in both profitability and environmental and social impact. Businesses’ bottom lines and the planet can both benefit from effective and economical sustainability plans that cater to all, not just ‘ethical consumers’.
Bridging the sustainability-trust gap
According to data from market research company GWI, 62% of consumers are only a little trusting that brands will stick to their environmental claims or pledges. 22% don’t trust brands at all. With a significant rise in greenwashing, it’s no surprise that shoppers are skeptical.
How can brands bridge this sustainability-trust gap? Here are four considerations.
1. Start
Sustainability isn’t a destination. It’s a journey. Brands must enter this journey with a spirit of inquiry and a can-do attitude.
Define what you want your business to stand for and what you want its sustainability purpose to be. Then, talk to customers. Use feedback to prioritize areas of the business where people would most like change, whether that’s packaging, manufacturing processes, distribution methods, or recycling. This will open the conversation in the long run.
2. Collaborate
With evolving technologies and breakthroughs happening all the time, brands don’t have to reinvent the wheel when it comes to adopting sustainable ways of working. But nor do we have time to all work in silos on the same problems. Instead, we must collaborate on reaching common goals rapidly.
There’s a wealth of existing credible sustainability frameworks to choose from that offer help with structural, operational, and cultural change. From the Conscious Advertising Network and Purpose Disruptors’ Advertised Emissions Framework to the Change The Brief Alliance, there are many resources to tap into.
3. Upskill
Education and training are key to embedding sustainability into the core values and practices of any business. It is important that sustainability considerations become business-as-usual: from creative ideas to operational deliverables. This means providing staff (at all levels) with training and aligning them to the brand’s commitments.
The opposite of this is a workforce ignorant of the rapidly changing landscape. They will be forced to focus on risk avoidance only (like adhering to the Green Claims Code), rather than seizing the opportunities awaiting upskilled businesses who are able to act on the ‘system upgrades’ that sustainable thinking brings.
Small changes add up. In terms of building trust with customers, an upskilled workforce is the biggest advocate for your brand.
4. Shout
Tell everyone about your commitments – but only if you mean it. It should stem from a genuine desire to be a better brand, not just to win brownie points.
When goals are communicated and measured, they stand a better chance of being delivered. As a key trust-builder for customers (with their growing cynicism around authentic commitments to change), brands need to share transparent, data-backed sustainability progress.
Be, do, tell
Putting it even more simply, brands need to apply the ‘be, do, tell’methodology. Brands tend to shout about sustainability pledges before putting the work in, which leads to distrust when targets aren’t met.
Instead, they should be sustainable, do the things that make them authentically sustainable businesses, then tell consumers about it. Even more simply: be better, do better, then tell customers how you’ve made better.
Sustainability investments aren’t just about reaching net zero targets. They’re heavily focused on improving overall performance. It’s up to everyone to drive change, and those at the top will benefit faster in the future by keeping their promises now.
Be, do, tell – and enjoy being one of the few that actually deliver.
This content is produced by The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business. Find out more
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