While the volatility of economic change around us can be distracting, one thing remains clear: A new generation of expectations is shifting business for good.By Del Hudson from Sustainable Life Media • Reposted: April 10, 2023
Government regulators are playing a key role in shaping how we address climate change; however, influential businesses have a chance to ensure these requirements speak to the metrics that make a true impact. Policy is a catalytic vehicle for change. As a business community, we should be embracing it as a means to address the existential threat of the climate crisis — to not do so would be irresponsible and dangerous. Recognizing the tension in the system among trade organizations, policymakers and corporations doesn’t mean it can’t be done right. For businesses and brands, creating incentives around impact reductionthat tie clearly to company goals is a key opportunity for transformative action.
It’s no secret that multiple industries have reaped the rewards of a broken economic model that relies on extractive and exploitative practices that continue to harm people and the planet. Consumer goods is one of those industries; and responsible leaders recognize it is time for a new system — one that transforms design and consumption and imagines a new way of doing profitable business. Over two-thirds of US consumers are willing to pay more for sustainable products. Globally, that number is just over a third — though that number rises to 39 percent for Gen Z and 42 percent for millennials. Capital markets will reward those that are de-risking their supply chains; and employees want to work where purpose and responsibility matters.
The argument that without perfect data we can’t do this work ignores the reality that science is always evolving. We must move forward with urgency, using the significant directional data that already exist and show where the key issues and intervention opportunities lie. Taking accountability for the full product lifecycle and impacts up and down the value chain is the only way to achieve meaningful ESG performance. It’s not about marketing single environmental or social attributes of a product. It’s not just reducing impact in owned operations while ignoring the manufacturing impact or material inputs of the end product. It’s believing that tomorrow’s customers will want (and deserve) something different than they get today.
This is hard, complex work; it won’t be completed in my lifetime. But we must move rapidly to accurately understand impact and take action with urgency. And we must be ready to learn and change as we know more. The tools to begin this work already exist. Smart businesses already see their futures. And while the volatility of economic change around us can be distracting, one thing remains clear: A new generation of expectations is shifting business for good.
By Amudalat Ajasa from The Washington Post • Reposted: April 10, 2023
Solar cell panels set up on the West Campus of Arizona State University in Phoenix, Arizona.
Climate change is on the minds of many in the Class of 2027, and could be a critical factor in how current high-schoolers make their final college choices in the coming weeks. For many prospective students, climate change is an existential threat. So colleges and universities across the country are seeking and finding innovative ways to curb their emissions and become more environmentally sustainable.
A total of 413 schools, or about 10 percent of U.S. higher education institutions — where about 30 percent of full-time U.S. college students are enrolled — have signed a climate pledge from Second Nature, an organization committed to accelerating climate action through these institutions. By signing, schools vow to achieve carbon neutrality as soon as they can, according to Tim Carter, the organization’s president.
Some large institutions have been at the forefront of efforts toward sustainability, but the push is growing as colleges of all sizes join the fight. Many are also adopting solutions specific to their local community or environment.
Ohio University turns scraps to soil
Ever wondered what happens to all the uneaten food in dining halls? Where does your food go after it’s carried away on conveyor belts?
The answer is grim. Most food waste generated in college dining halls ends up in the trash and then a landfill. Food waste overall is the single most common material dumped in landfills and incinerated in the United States, according to the Environmental Protection Agency.
But at Ohio University, the kitchen is just the beginning of your leftover food’s journey.
After students leave the dining hall, trained staff separate food left on serving trays. Nearly five tons of food waste per day is collected from dining halls around campus and brought to OU’s $2 million composting plant.
The plant, which opened in 2009, features a rooftop solar array that provides about 75 percent of the system’s energy, according to Steve Mack, the university’s director of facilities management. Its rainwater harvesting system provides all the water used at the facility.
By 2012, the university was composting nearly 100 percent of its dining hall waste.
“It’s the right thing to do; food waste going towards composting is much better than going to a landfill,” Mack said. “We’ve taken what was a waste stream and turned it into a resource.”
The campus has one of the most efficient university food services in the country, despite the unique challenges posed by the all-you-care-to-eat facilities. About 99 percent of campus food waste is post-consumer — left over from trays — while pre-consumer food waste from the preparation process makes up less than 1 percent.
The school uses an in-vessel compost systemthat combines organic waste — including meat, dairy and landscape waste — with bulking agents in which naturally occurring microorganisms break down material. It’s the largest known in-vessel system at any college or university in the nation. The material is then trapped in an enclosed environment where temperatures, moisture levels and airflow are monitored for two weeks. Once removed from the in-vessel system, the compost is placed in narrow piles outside for three to four months.
Food scraps are turned into nutrient-rich soil, which is used for landscaping andfilling in intramural athletic fields. The soil has also been shared with the local school district.
All told, the university compostsabout 612 tons of waste a year. That’s equivalent to the weight of about 102 full-grown male elephants, according to the university.
Composting saves the university $14,000 each year in landfill fees and $22,000 in annual fertilizer costs, said Sam Crowl, associate director of sustainability at Ohio University.
Ball State University fires up a greener system for heating
When engineers tell you that you can’t replace a university’s 70-year-old heating system with the largest geothermal plant in the country, you’d probably heed their warning.
But Jim Lowe didn’t.
“For an engineer, it’s a once-in-a-lifetime opportunity to build a system that’s beneficial to the environment and efficient for use of energy around campus,” said Lowe, who is associate vice president for facilities planning and management at Indiana’s Ball State University.
Lowe wanted to replace the coal-fired boiler heating system, which burns coal to create steam and heat, with a geothermal power plant — which draws heat from the earth and turns it into hot water, which, in turn, is used to heat buildings.
In 2009, BSU began the daunting task — and Lowe’s team had to start from scratch.
The team building the system drilled approximately 3,600 holes that were 500 feet deep under sporting fields and parking lots, digging up streets and sidewalks to place nearly 5.3 million feet of piping.
It took eight years, but the school said the process caused very little disruption to students’ day-to-day activities. Now the largest geothermal system in the country runs hidden under the school and provides heat and cooling to “50-plus major buildings” on campus, Lowe said.
Completed in 2017, the $83 million project has cut BSU’s carbon footprint in half — helping the school get halfway to its goal of becoming carbon neutral. Lowe estimates that BSU now saves $3 million in energy costs each year.
BSU’s project has inspired nearly 65 higher education institutions to start building their own geothermal plants.
Colleges and universities “have a responsibility to protect our environment and pay it forward for future generations,” Lowe said.
University of Iowa uses resources from its backyard
Most people who stumble across the inedible outer cover of an oat grain think nothing of it, but the Quaker Oats production facility in Cedar Rapids, Iowa, looked at piles of leftover oat hulls and saw a potential energy source. The company asked the nearby University of Iowa for help. And the school jumped in.
The University of Iowa became a green-energy champion by harvesting biomass energy using resources in its backyard — the oats facility is just 25 miles away. Biomass energy is generated by burning living or once-living organisms to create heat or electricity: Think of wood, corn or soy.
Oat hulls were once a treat for farm animals, but UI began buying the crop two decades ago. Now, the university buys nearly 40,000 tons of oat hulls each year from the Quaker Oats facility, reducing its reliance on coal.
“It’s hard for anybody to find much fault in what we’re doing because it’s good on cost, it’s good for the environment, it’s good for local businesses. It’s a good thing all around,” said Ben Fish, director of utility operations at UI.
Oat hulls aren’t the only thing UI is burning to make energy.
In 2015, UI began planting and harvesting acres of a billowing, bamboo-like grass that grows up to 12 feet high. The miscanthus grass is chopped, collected and combined with renewables and non-recyclables, like the waxy backing of labels and paper, to mimic coal when burned. The university partners with a Wisconsin-based energy company that uses the grass as a primary ingredient to create renewable energy pellets. The university also contracted with farmers within a 70-mile radius to plant the grass and expand their acreage.
Months into the worldwide pandemic, the empty university exceeded its goal of 40 percent renewable energy by 2020.
UI is making strides toward a new goal: going coal-free by 2025. Fish thinks it is “absolutely attainable.”He also said oat hulls will continue to be the “foundation” of UI’s future carbon reduction planning.
In January, the EPA ranked the school No. 2 on its list of top college and university green-power users — surpassed only by the University of California system. The 1,900-acre campus gets 84 percent of its energy from green power.
“All colleges and universities are trying to reduce their carbon impact, and we all just have a different way of doing it,” Fish said. “We’ve been able to make use of what’s around us.”
University of Minnesota at Morris moves with the wind
The University of Minnesota at Morris sits in a rural part of the state, surrounded by prairie and forest areas. The small liberal arts college with fewer than 1,300 students is about 2½ hours west of Minneapolis.
The school “in the middle of everywhere” uses a localized hybrid approach to renewable energy. Wind turbines, a biomass gasification facility and a solar array generate about 70 percent of the electricity used on campus daily. Annually, the school produces more electricity than it needs.
Two 230-feet-high wind turbines with 135-foot blades tower over the university. The turbines generate 10 million kilowatts of electricity per year, but the university uses only about 5 million kilowatts. The surplus power is exported to provide renewable energy to Morris, a city with a population of about 5,000.
The two turbines supply more than 60 percent of the annual electricity used on campus. The university achieved carbon neutrality in electricity for the first time in 2020 in large part thanks to those turbines, said Troy Goodnough, the school’s sustainability director. There are many instances when all the university’s electricity comes from wind turbines, which can generate electricity with wind speeds as low as 7.8 mph and as high as 29 mph.
UMN Morris was the first public university in the country to have the large-scale wind turbines constructed, according to university officials.
“What we try to do is be on the front edge of showing what a model of rural sustainability looks like,” Goodnough said.
Additional renewable energy comes from 636 individual solar panels and agrivoltaic solar farms. Agrivoltaic farming combines solar energy generation and agriculture.
Next to campus, cows graze the land and crops flourish in a field shared by an array of eight-foot-high solar panels. The 240-kilowatt agrivoltaic array is expected to generate more than 300,000 kilowatt-hours each year.
Arizona State University proves big schools can make big changes, too
Achieving carbon neutrality tends to be less daunting for smaller colleges and universities because they emit lower emissions compared with larger ones. Larger technical universities have nearly 10 times as many students and produce roughly four times the carbon emissions per student compared with smaller schools, according to an MIT study.
But those odds didn’t deter Arizona State University, with a total campus enrollment of more than 75,000 students, from pledging to reach zero greenhouse gas emissions by 2025. It’s a goal the school crushed six years early.
“We decided to move the goal six years early in recognition of the worsening climate crisis,” said Marc Campbell, executive director of sustainability at ASU.
Between 2007 and 2017, the university increased energy efficiency in new building construction by using regenerative and sustainable materials, installing efficient cooling and heating systems, and maximizing natural light sources and shielding, Campbell said. Older buildings were retrofitted with efficient light fixtures, water-conserving shower heads and updated cooling systems.
The university built 90 on-site solar installations, which provide enough green energy to power an estimated 18,000 homes at once, according to Campbell. ASU also partnered with the Arizona Public Service, the state’s largest electric utility, on a solar farm that generates about 65,000 megawatt-hours per year of green electricity.
The school’s emissions decreased, and it reduced its carbon footprint by more than 30 percent.
By 2018, ASU was on the brink of fulfilling its pledge and began purchasing carbon offsets to meet its goal early. Carbon offsets are investments in projects that reduce or work toward the removal of CO2 emissions from the atmosphere.
The university became carbon neutral in scope 1 emissions, or emissions over which it has direct control, and scope 2 emissions, or indirect emissions, including from energy purchased by the university.
“Sustainability is now really in the DNA of ASU,” Campbell said. ASU’s School of Sustainability was the first of its kind when it opened in 2006, according to the university.
ASU has become a sustainability model for larger institutions despite increasing the size of its campus by 40 percent and increasing on-campus enrollment by 35 percent since 2007.
In January, the EPA ranked ASU No. 3 on its list of top college and university green-power users, right behind the University of California system and the University of Iowa. ASU gets 77 percent of its electricity from green energy.
ASU’s next sustainability goal: to be completely carbon neutral, including transportation-related emissions, by 2035. “It is attainable, but we still need to think through what the full road map looks like to get us there,” Campbell said.
Activists protest greenwashing in Amsterdam on Nov. 25. Photo: ROMY ARROYO FERNANDEZ – NURPHOTO – GETTY IMAGES
By Andrew Martin via Fortune • Reposted: April 9, 2023
The apparel sector is responsible for between 2 and 8% of annual global greenhouse gas emissions. As one of the most polluting industries on the planet, it must urgently reduce its environmental impacts.
To date, efforts to transition to a more responsible industry are often self-policed. While real commitments to drive impact have been made, this has historically been more a result of deep commitments from some brands, retailers, and manufacturers to create positive change across the industry.
Voluntary initiatives have helped make real strides towards a more responsible sector. However, they alone cannot drive the necessary scale of change. Our own initiative, the Sustainable Apparel Coalition (SAC) represents around half of the global apparel and footwear industry. We know there are brands, retailers, and manufacturers who are already going beyond baseline standards to lower their environmental and social impacts–but now we need to see everyone working towards the same ambitious goals.
Regulation is a crucial lever for creating an apparel and footwear industry that protects both people and the planet. Unfortunately, it has lagged far behind what’s required for such a vast global industry. But this is changing, and fast.
Green and social regulation is coming for the apparel sector. In 2023, we expect momentum to build globally for the widespread policing of apparel’s sustainability claims. At the SAC, we believe this is long overdue.
The EU Commission recently proposed the hotly anticipated European Substantiating Green Claims Directive, aimed at fighting misleading advertising and stamping out greenwashing. It will require all environmental claims to be backed up with credible evidence. Legislation is in the pipeline elsewhere too. In the U.S., for example, a federal act to protect garment workers’ rights–the FABRIC Act (Fashioning Accountability and Building Real Institutional Change Act)–is in the offing. The New York Fashion Act is another proposed bill that would require companies with revenues of over $100 million doing business in the state to disclose their environmental performance and climate targets.
Due to the nature of some of the work we do at the SAC, it may come as a surprise that we don’t think voluntary action alone can solve apparel’s sustainability problems. But the situation is too urgent–and all our futures depend on it. The window in which we can act on the climate crisis is rapidly closing. Consistent, science-backed regulation is needed to help drive the tangible, industry-wide progress we need.
New laws to protect people and the environment will not render voluntary initiatives like ours obsolete, as we believe our role sits comfortably alongside legislation. Through developing tools and frameworks, and sharing knowledge, experience, and best practice, not only can we support apparel and footwear businesses to deliver against legal requirements, but also be an accelerator for positive change on a global scale with the help of smart regulation. This should be the approach for all consumer goods industries.
However, we want to highlight the need for such legislation to be harmonized and mandatory. The proposal for the EU Substantiating Green Claims Directive does not mandate a single, clearly defined framework based on scientific foundations, such as the Product Environmental Footprint (PEF), which opens the door to a range of alternative methodologies and could undermine rather than advance progress in the sector. We are concerned that the directive will create confusion for brands and retailers looking to advance their sustainability credentials, in turn leading to an increase in miscommunication to consumers.
In addition, the directive opens to door to different interpretations by member states, which risks leading to greater fragmentation when it comes to how we articulate and communicate environmental impacts in EU countries. In a climate emergency, this is not how to create the clarity we need to drive mass consumer change. As the move towards proper policing accelerates, we need to ensure a consistent approach is taken worldwide.
In the meantime, organizations must have a clear and consistent method for calculating a product’s environmental footprint. To date, the PEF still represents the most holistic, scientifically grounded method for assessing the environmental impact of a product, reducing inconsistencies in how life cycle assessments (LCAs) can be interpreted. We firmly believe action needs to start today, not further down the line while further revisions are developed, consulted on, and piloted. We need clear legislation that removes confusion and supports positive business action.
No industry can police itself. It’s time to regulate apparel and footwear’s environmental and social impacts. Strong legislation will drive everyone in our sector–as well as the wider consumer goods industry–to step up and take responsibility. At the SAC, we recognize that regulation will bring us closer to our shared goal of an industry that leaves the world in a better place. We’re calling on other voluntary organizations to do the same.
Andrew Martin is the executive vice president at the Sustainable Apparel Coalition
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
The rise in the severity and frequency of extreme weather events and natural disasters is impacting real estate markets across the country. Higher temperatures, flooding, wildfires, droughts, seasonal storms, etc., are damaging homes and affecting communities at increasing rates. The climate risk profile of certain areas is changing, causing shifts in housing preferences, buyer demand, property values, resale ability, financing options and insurance rates.
As mainstream awareness of these climate-related risks grows, consumers are increasingly factoring sustainability and green features into their real estate purchasing decisions.
According to the 2022 REALTORS® and Sustainability Report – Residential, agents and brokers found that 34% of consumers were very or somewhat concerned about the impact of extreme weather and climate change on the market, and 51% were somewhat or very interested in sustainability.
Widespread consumer interest in these issues makes it crucial for real estate professionals to be knowledgeable on topics such as weather- and environmental-related risks in their local market, sustainability, energy efficiency and green home features.
Here are some tools and resources that will help you better understand these issues and address the questions and concerns of your clients.
“Intro to Sustainability & Resiliency: What REALTORS® Need to Know” is a one-hour course available at no cost to members of the National Association of REALTORS® (NAR) at learning.realtor. This course provides a solid overview of the issues and highlights the importance of sustainability in real estate.
The 2022 REALTORS® and Sustainability Report – Residential provides a statistical snapshot of agent perspectives on sustainability issues in the industry, gathered from a survey of NAR members.
NAR’s Green Designation is designed for agents who want to learn how to effectively market green properties and confidently serve clients interested in energy efficiency, sustainability and green home capabilities. The Green Designation coursework has been revamped and restructured, and can be completed in a classroom setting or in a self-paced online format. You can learn more about the education at https://green.realtor.
The REALTORS® Property Resource® (RPR®) includes a ClimateCheck® tool that agents can use to help their buyer-clients understand the current and future climate-related risks of a property they are considering purchasing. The ClimateCheck® tool analyzes data from local and national sources to rate a property’s future risk of climate change-related hazards (drought, fire, storm, heat and flood) and assigns a rating from one to 100, with 100 representing the highest risk. Ratings are displayed in a climate-change risk snapshot in the Additional Resources section of any RPR® Property Details page. RPR® is free for all NAR members.
Research shows that sustainability matters to consumers. Real estate agents who understand climate risks and stay up to date on sustainability and resilience strategies in their markets will be better prepared to help their clients make informed purchase decisions.
Every organisation should be able to identify what a sustainable version of itself looks like, who is needed to run and support that, and where there are needs for new skills and roles within it.By Kathleen Enright from sustainable brands.com • Reposted: April 9, 2023
The war for talent may be ongoing, but the battlefield is being redrawn. The seismic changes to people’s lives wrought by COVID, the climate emergency and the cost-of-living crisis have all reshaped the demands employees are making on the companies they work for. The Great Resignation was, at its core, a movement to find greater purpose in work and is an indication of the power dynamics swinging in favour of the workforce. To win the hearts and minds of the best and brightest, corporates need to acknowledge these shifts and alter their tactics accordingly.
Tony Danker, Director General of the Confederation of British Industry (CBI), openedits recent Future of Work Conference by recognising that “new realities demand a new approach.” Alongside the expectation for more flexible working models, he highlighted that people are increasingly making career choices based on employers’ social and environmental ethics and that businesses need to adopt new values to win them over. “It’s no longer just that they work for us,” he warned. “We have to work for them.”
Danker’s argument was that British businesses must embrace bold climate goals and demonstrate their social awareness through “active diversity and inclusion strategies” if they want to attract Generation Z workers. Young talent, he believes, will only work for businesses that share their own values.
It doesn’t start — or end — with Gen Z
All of which is true. But by focusing on the need for purpose among workers at the start of their careers, Danker overlooks the rising demand among employees of all ages for corporations to demonstrate social and environmental accountability. Generations X and Y are just as keenly focused on sustainability when it comes to picking their employer.
A 2020 report by intranet company Unily found that 72 percent of multigenerational UK office workers were concerned about environmental ethics — and 65 percent would be more likely to work for a company with strong environmental policies. Climate change, human rights and social equitychimed particularly loudly with workers in their 30s and 40s.
Employers who focus solely on the demands of Gen Z when it comes to incorporating sustainability into their business, marketing and brand strategies will be ignoring the needs of a significant — and expanding — proportion of their staff. Employee demographics are changing, with the proportion of over-50s in the workforce steadily increasing. According to Cebr research, by 2030 47 percent of over-50s will be in employment. To put this into context, in 2032 the first of the millennials — aka Generation Y — will enter their 50s. Meanwhile, the employment rate of over-60s has almost doubled in the last two decades and is set to continue increasing.
Attraction is futile without retention
While it is clearly crucial to consider the requirements of their future workforces, businesses need to be aware that social and environmental issues also play strongly with senior talent. The generation of employees currently raising young children have heightened fears over the planet’s fragility, while those established in their careers have greater leverage to make employers respond to their priorities. Disregard them, and they will take their skills and experience elsewhere. Fundamentally, corporate responsibility isn’t just a factor in talent attraction but, crucially, in talent retention.
Among every demographic, the talent pool is worried about the future and well-informed about the realities of the climate crisis. Workforces want businesses to do more but they will not be duped by punchy slogans or unsupported promises. The Unily research found that 83 percent of office workers believed their employers were doing too little to address climate change, suggesting a worrying gap between intention and action on the part of employers.
This is partly due to a failure by companies to align their sustainability strategy with business strategies across every aspect of their organisations — a failure to demonstrate how sustainability is rooted in the business, how it is driving change, reshaping it for tomorrow; and how employees will play a critical role of in that journey. In our ProgressPoint survey of 20 global companies, Salterbaxter analysed the employee communications of progressive employers to understand how their sustainability strategy was being framed to staff and if it enabled them to make active decisions. Were employees, for example, provided with opportunities to take on real-world sustainability challenges? It was an area when almost every business fell down.
Empowering workers to contribute to sustainability solutions is far more motivating than simply raising awareness of corporate sustainability strategies and is a significant factor in talent retention. But we found that the companies we analysed scored only averagely or poorly in how they positioned sustainability in their employee value proposition or in their employee development programmes — they may have progressive sustainability strategies, but they are not taking their talent along with them.
Authenticity is everything
The retention issue makes it essential that companies embed their sustainability strategy into their human capital strategy — as well as their wider business strategy — rather than having it sat alongside existing HR operations. Doing so means demonstrating how the sustainability strategy helps deliver the business strategy and effectively communicating that combined strategy to existing and potential talent so that they are engaged and inspired.
Marketing an organisation as a sustainability-led employer is largely insufficient. Attracting and retaining top talent means hitting multiple proof points that show the sustainability strategy is long term and operational. This includes making genuine progress against environmental and social goals, including the UN SDGs, and striving to meet credible corporate sustainability standards.
Alongside those goals and targets, the sustainability strategy should outline who will deliver them. There must be a framework in place to bring talent into the company, and then a platform from which they are empowered to take the strategy forward. Each business should be able to identify what a sustainable version of itself looks like, who is needed to run and support that, and where there are needs for new skills and roles within it.
Conclusion
Demonstrating that sustainability strategies lie at the heart of the business will enable companies to secure the best talent — which will then allow those businesses to deliver on the sustainability challenges they face now and in the future, thus attracting (and retaining) future talent. It’s a powerful virtuous circle for those that get it right.
We are already seeing that the future of work will be very different from the past. Business as usual is over. This is the beginning of a long-term shift in power dynamics in the workplace that will see employers fighting to attract and retain talent in new ways. Those that recognise and authentically respond to the ethical priorities of their current workforce and future talent will be best placed to succeed in tomorrow’s business landscape.
An integrated approach to quality and sustainability leads to increased efficiency and cost savings. By Bob Ferrone via The Quality Digest • Reposted: April 8, 2023
Quality and sustainability are two critical aspects of modern business operations that are closely intertwined. While quality refers to the level of excellence or standard achieved in a product or service, sustainability relates to the ability to maintain or improve that quality over time while minimizing negative impacts on the environment, society, and the economy.
These two concepts are not mutually exclusive and can, in fact, complement each other when integrated into an organization’s operations. Bringing quality and sustainability together in an organization can create synergies that drive innovation, reduce costs, and enhance reputation, among other benefits.
One of the most significant advantages of integrating quality and sustainability is the ability to identify and address environmental and social risks early in the product design process. By leveraging quality management systems, such as ISO 9001, organizations can establish procedures for identifying, assessing, and managing risks that could affect the quality of their products or services.
Similarly, sustainability standards, such as ISO 14001, can help organizations identify and manage environmental risks that could affect their operations, supply chain, or stakeholders. By combining these two systems, organizations can develop a more comprehensive risk management approach that considers both quality and sustainability effects, thereby reducing the likelihood of costly product recalls, repetitional damage, or legal liabilities.
Holistic manufacturing
When quality and sustainability meet, the result is a harmonious combination of two important principles that drive businesses and consumers toward a better future. Quality is the measurement of excellence in products and services, while sustainability is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.
Quality products are designed to last longer, perform better, and provide greater value to the consumer. On the other hand, sustainable products are produced in a manner that minimizes harm to the environment and conserves natural resources. The combination of these two principles creates products that are not only of high quality but also environmentally responsible.
To achieve this balance, companies must take a holistic approach to product development and manufacturing. They must consider the entire life cycle of a product, from the sourcing of raw materials to the disposal of the end product (cradle to cradle). By using environmentally friendly materials, reducing waste, and implementing energy-efficient processes, companies can create products that not only perform well but also have a minimal impact on the environment.
Consumers also play a critical role in promoting sustainability and quality. By choosing to purchase products that are of high quality as well as sustainable, they are sending a message to the market that these principles are important to them. This demand for quality and sustainability drives companies to invest in these areas and encourages them to continue to innovate and improve their practices.
Two departments with shared goals
Quality and sustainability managers must collaborate and work together to achieve the best possible outcomes for their organization. While their areas of focus may be different, there is significant overlap in their goals, including reducing waste, improving efficiency, and enhancing customer satisfaction.
By working together, quality and sustainability managers can identify opportunities to streamline processes, reduce environmental impacts, and increase profitability. Today, with advances in technology such as artificial intelligence (AI), it is now also possible to collect and analyze large amounts of data to identify trends and patterns that can help organizations improve their processes, products, and environmental effects in real time.
When quality and sustainability meet, everyone benefits. Companies are able to produce products that are both environmentally responsible and of high quality, while consumers are able to enjoy products that not only perform well but also contribute to a better future. This harmonious combination is crucial in shaping a more sustainable future for all.
A framework for sustainable development
As the world becomes more aware of the effect of human activity on the planet, consumers and businesses alike are taking steps to mitigate its impact and ensure a sustainable future. Sustainable development strategy for all organizations has become an important issue around the globe. (Evidence for climate change abounds, from the top of the atmosphere to the depth of the oceans.) It has required organizations to review their current systems to improve the overall triple bottom-line performance (i.e., economic, environmental, and social). Rising to these challenges requires transforming management systems and incorporating sustainable management systems throughout the organization.
Synergies between total quality management (TQM) and sustainable development have been discussed, but further important synergies between quality management and environmental management have not yet been fully explored. Process focus and process management are believed to be important for realizing these synergies. Assuming TQM effects on organizations will continue, what types of TQM improvement initiatives will develop in the future to meet the anticipated organizational changes?
Sustainable development frameworks encourage businesses to ask better questions about effects on stakeholders, society, and the environment, and they seek to develop the tools and measures needed to demonstrate improvements. The sustainability of the organization relies on its ability to monitor the external environment for opportunities, trends, and risks, and also its ability to learn, change, and innovate in response to the results of monitoring. To achieve environmental sustainability, organizations should focus on results as well as process.
An industrial revolution in quality
The quality revolution that took place in manufacturing companies during the late 1970s offers a number of parallels that can help city government and corporate decision-makers understand and address sustainability challenges. At the onset, quality initiatives were viewed by most companies as nothing more than an added cost—something to be tacked onto the end of existing manufacturing systems to prevent low-quality products from reaching customers.
The evolution from quality inspection at the end of a line to total quality management in the United States was in direct response to a quality revolution in Japan following World War II. Japan had a widely held reputation for shoddy, poor-quality exports, and their goods were shunned by international markets. This led Japanese organizations to explore new ways of thinking about quality. The Japanese welcomed input from foreign companies and lecturers, including two American quality experts who changed the world’s leaders’ thinking about TQM. More than a half-century ago, quality pioneers W. Edwards Deming and Joseph Juran encouraged organizations to ask better questions about corporate challenges, enabling companies to redesign systems for improvement.
It started with a systems approach, and then incorporated quality by means of practical analytical tools to foster product, service, and organizational improvements. In the process of bringing quality improvement, they also elevated quality management’s value to the corporation. Their work inspired corporations to move quality management from a noncritical process to the mainstream.
Quality management has evolved significantly over the years, from a technical and inspection-oriented approach to a more holistic and customer-focused approach. Today, quality management is an integral part of organizational performance, with an emphasis on continuous improvement, risk-based thinking, and data-driven decision making.
Environmental awareness
Two other prominent figures who had a significant effect on the environment were John Kenneth Galbraith and Rachel Louise Carson. Both individuals were influential in their respective fields, and their contributions helped shape the way we view and understand the natural world. Galbraith’s work (The New Industrial State; Princeton University Press, revised edition 2007) helped bring attention to the issue of environmental degradation and its relationship to the economy. His ideas influenced the development of environmental policy and helped shape the modern environmental movement.
Carson’s work (Silent Spring; Houghton Mifflin, 1962) also helped inspire a shift in public opinion regarding the natural world. Her vivid descriptions of the beauty and fragility of nature helped create a new appreciation of the natural world and its importance to human well-being.
Both individuals were instrumental in the development of the modern environmental movement, and their work continues to inspire and influence environmental policy and conservation efforts that are underway worldwide today.
These four individuals had a major influence on business and the private sector. Juran and Deming opened the eyes of industry to the importance of quality management. Galbraith, who was known for his critical analysis of modern capitalism, opened the eyes of the business community to how the economy affects environment issues. Carson’s book inspired the general public toward innovative thinking.
Innovative thinking
There a number of forward-looking organizations that view quality and sustainability as a competitive advantage. Take the case of Toyota: It viewed quality as an opportunity rather than a cost, and its investment in total quality management paid off handsomely. Rather than simply posting inspectors at the end of the assembly line, Toyota integrated quality considerations earlier in its assembly lines and the processes that preceded manufacturing, such as product design, and research and development (R&D). Next, Toyota pushed quality considerations even further upstream by working with suppliers to develop quality standards for the materials flowing into the assembly lines.
Eventually Toyota expanded quality management beyond products into behaviors, asking how its people could collaborate more effectively to ensure higher-quality processes. This deeper, more integrated approach to TQM paid off in the form of competitive advantage, as the success of Toyota in the 1990s and beyond demonstrates. The quality effort took Toyota from the back of the pack to the industry leader in automobile quality, reliability, and sales. In setting the standard for others to meet, Toyota is integrating quality and environmental cultures to gain a true understanding of total waste. In the future, it may set the standard in the auto industry on sustainability management as well.
Sustainability as a business function
Sustainability has not left its infancy, but there are strong signs that select companies are positioning themselves to benefit from sustainability opportunities. Walmart, General Electric, FedEx, Toyota, Hilton, and Budweiser are among those managing environmental risks, just as others used the quality revolution to succeed in their markets.
Rather than treating sustainability as a risk and cost to be managed, leaders are starting to integrate sustainability into their processes and cultures, in some cases collaborating with a broad range of partners, including governmental and nongovernmental organizations and initiatives. A prime example of this collaboration is the Energy Star program, which was developed by industry and the U.S. Environmental Protection Agency.
The powerful external forces of competition, government, and consumers are driving sustainability and may soon nudge its evolution into a full-blown revolution. As the development of sustainability programs continues, companies with the structure and talent necessary to integrate sustainability capabilities deeper in their organizations and cultures will have a competitive advantage. As we struggle with approaches to reduce our effects on our climate, the answers may be in the quality tools that all sectors understand.
Sustainability does, however, mean that TQM should not be left as an “act of fate.” It needs to be managed through a strategic perspective, emphasizing measurement and action. It should also focus not only on meeting the end-customer’s requirements but also on all those who interact through their products or processes. Companies should look at how TQM could contribute to sustainability by reinforcing the economic dimension.
This could be seen as making sustainability more business-focused. The opposite would be to see how sustainability could contribute to TQM by broadening the focus to all the dimensions of the total business, widening the focus from the supply chain to customers to stakeholders.
New opportunities
The question is whether we can effect a cross-organizational collaboration to build a new approach to sustainability in government, industry, and the private sector. An important issue is whether organizations can build the bridges to bring the culture of quality management and environmental management together. Both have much to offer on the battlefield of efficiency.
I believe there’s definitely a disconnection there. But there are opportunities through collaboration and education, with the same vision and goals in becoming efficient in all areas and cutting waste. I strongly believe in the use of technologies, design, processes, and cultural change as keys to solving global issues and climate change.
By integrating quality management and sustainability management, organizations can ensure that they are producing high-quality products and services while minimizing their environmental impact, promoting social equity, and preserving natural resources for future generations. This can include implementing sustainable production processes, reducing waste and emissions, ensuring ethical sourcing of raw materials, and promoting the use of renewable energy sources.
Moreover, an integrated approach to quality and sustainability management can also lead to increased efficiency and cost savings, as well as improved reputation and brand value. It can help organizations to meet the expectations of increasingly socially and environmentally conscious consumers and stakeholders, and to stay competitive in a rapidly changing business environment. It can be a challenging process, but it can also lead to significant benefits for the organization and society as a whole.
Ron Jarvis, Home Depot chief sustainability officer, gives a lecture in Jessica Thomas’ MBA 582: Sustainability and Business course Oct. 30, 2019 at Nelson Hall. Photo: NC University
From The Home Depot • Reposted: April 8, 2023
ReducingThe Home Depot’s environmental impact is essential to our efforts to build a better business, workplace and world. Home Depot’s chief sustainability officer Ron Jarvis has spent more than two decades driving sustainability improvements at The Home Depot. Here he offers insights into our progress.
Who drives ESG at The Home Depot?
Many associates and business leaders throughout our enterprise! They take pride in improving their departments and businesses in multiple ESG aspects. Our leadership understands that an effective environmental, social and governance strategy cannot happen in isolation. It is not the sole responsibility of a corporate ESG team. Rather, our ESG strategy must reflect The Home Depot’s core values, and it must be embedded in all aspects of how we run our business. Everybody owns it.
How have associates helped drive ESG progress at The Home Depot?
One of our eight core values is Do The Right Thing, which drives our associates to find new ways that our organization can reduce its environmental impact. This can be seen through our packaging team who looks for ways to reduce the package footprints and ways to use more sustainable materials for our private-label products. Another example are our associates who work to find ways to upcycle the packaging waste in our stores and supply chain into new products like Trex composite decking.
How is The Home Depot helping customers increase the sustainability of their homes and businesses?
Our Eco Actions program, which builds on our original Eco Options program that we launched in 2007, helps our customers take on more sustainable DIY projects and choose greener products that can save water, conserve energy or are formulated to reduce certain chemicals. Products can only qualify for this distinction if manufacturers provide third-party verification of environmental claims that meet our program’s requirements. This program also offers customers green project ideas and tips, for example, how to grow an organic garden.
In addition, we encourage our customers to drop off used compact fluorescent light bulbs and rechargeable batteries for recycling. In 2021, we collected 1,162,800 pounds of recycled batteries, a 24% increase since 2014.
We also help our customers go greener in ways that may be less apparent to them. For example, we offer circularity-centered products like our Home Depot-branded moving boxes, made from 100% post- consumer recycled paper fiber, as well as composite deck boards made from recycled plastic waste from our stores. We continue to make progress on our goal to exclude expanded polystyrene (EPS) foam and polyvinyl chloride (PVC) film from our private-brand product packaging by the end of 2023.
When customers rent tools from us, they help avoid the environmental impact of new product manufacturing. Another example: Our stores have cut electricity consumption 50% since 2010, providing our customers a lower energy intensive shopping environment.
Is sustainability a competitive advantage for The Home Depot?
Overall, we believe good business decisions drive sustainability.
Examples of this can be seen through the investments we’ve made to create the most efficient supply chain in home improvement. These investments have helped us reduce the number of trucks needed and distance traveled to get our products from our supplier to our customers, while also reducing fuel emissions. Another example of this is our store investments, part of which included transitioning stores to LED lighting, which helped us reduce operating costs and electricity consumption.
We also believe that by working with our suppliers to bring innovative and sustainable products to market, we help our customers create more sustainable homes and workplaces. Our efforts to drive innovation can be seen in every aisle of the store, and we believe this is a key differentiator in the market.
We also want to see sustainability be the norm for our entire industry. We are encouraged when we see other retailers take big swings and do innovative things that push all of us to do a better job of protecting the planet, and we hope the innovation that we bring through our operations and products motivates others to do the same.
By Chris Hagler from Triplepundit.com • Reposted • April 7, 2023
In many ways, private equity is made to be invested in environmental, social and governance (ESG) initiatives. But it takes thoughtful strategies to ensure those investments generate maximum value for both business and society.
Record levels of cash reserves — including $1.1 trillion in the U.S. and another $6.3 trillion in assets under management — combined with increased investor focus on ESG could make private equity an attractive vehicle for creating real impact.
Why private equity is well-suited to ESG investment
ESG topics are important to limited partners and their stakeholders, especially those dealing in pension funds and sovereign wealth funds. Ninety-three percent of limited partners said they would walk away from an investment opportunity if it posed an ESG concern, according to a 2022 survey from Bain and the Institutional Limited Partners Association.
Private equity operates with the long term in mind. Whereas executives of publicly-traded companies must manage their businesses to meet quarterly guidance, portfolio companies operate on a longer time horizon due to their average holding period being five to six years.
Likewise, ESG investment is also a longer-term play. Greenhouse gas emissions reductions could take years to realize, for instance. A focus on creating long-term value for businesses and for society is the key to ESG investing. This is fundamentally different from the quick turnarounds and rapid returns that have characterized decision-making in the past.
Private equity investors, as owners, have the authority to move nimbly on business strategy. Unlike public investors, who must engage with company management and often rely on shareholder resolutions and proxy voting to change strategies, private equity firms sit on the board and either control or heavily influence operations and strategy. As a result, private equity investors typically have much simpler engagement and faster decision-making.
ESG is increasingly recognized as a value-lever, helping investors command a premium price at exit. Strong ESG management can bolster performance and attract future investors. It can also create higher values for limited partners when they eventually sell their assets.
Given a hypothetical opportunity to acquire a new business, executives and investment professionals say they would be willing to pay roughly 10 percent more for a company with an overall positive record on ESG issues versus a company with an overall negative record, according to a research from McKinsey.
Private equity firms aren’t compromising financial returns for a societal return
Strong ESG performance, backed up by credible data and communicated well, can help deliver a premium price at exit. Private equity firms should ask the following questions to be sure they aren’t leaving value on the table.
Have you identified ESG or climate risks that could materialize over your hold period and impact your exit strategy? EQT Infrastructure, a large, natural gas company in the U.S., turned climate risk into an investment opportunity last year when it acquired two North American subsidiaries of the U.K.-based transportation service providers First Student and First Transit. Increasing energy prices, and potential future regulations associated with the use of traditional fuel sources, are climate risks that could materially impact such transportation businesses. EQT’s investment thesis is centered around electrifying the First Student and First Transit fleets, thus accelerating its transition to renewable fuel sources.
Are there opportunities to shift business models to be more sustainable or solve your customers’ sustainability challenges? A tool manufacturer may shift to a rental model for equipment that is not frequently used, for example. This business model can open up new markets of users for their products, as well as reduce the environmental impact of creating new tools.
Or a financial services company may build a new product to educate consumers on the benefits of solar installations and then finance the installation.This would drive additional revenue and reduce global emissions.
Do your portfolio companies understand the business value of their ESG efforts? Partners Group, a Swiss private equity firm with $135 billion in assets, worked with a global provider of outsourced pharmaceutical supply chain solutions, PCI Pharma, to reduce waste and energy and improve worker safety. The ESG initiative reduced costs with improved recycling, reduced energy usage, and better worker compensation insurance rates — ultimately improving the bottom line.
Can you leverage efforts across your portfolio companies?L Catterton, a consumer-focused private equity firm managing $33 billion in assets, utilized the scale of its portfolio to develop an emissions offset program for small parcel deliveries whereby FedEx will measure emissions of select deliveries, allowing companies that opt-in to track their emissions and purchase offsets via Bluesource.
Are there companies in your portfolio that could command an “ESG premium” at exit with appropriate measurement and communication? For example, a chemical manufacturer that provides greener and safer chemicals to various end markets may be able to attract impact investors and command a premium at exit if it’s able to articulate its products’ specific environmental impact compared to the alternatives.
Similarly, a staffing business with a small but growing diverse recruiting offering can demonstrate its social impact and attract strategic buyers who already have diversity commitments.
The bottom line
Focused ESG actions by private equity drive efficiency, profitability and resiliency. Successful firms right-size their ESG actions and combine careful due diligence with strategic initiatives for value creation well before exit in order to drive both business and societal growth. Is your firm leaving value on the table?
With increased expectations to assume the role of climate controller in business, how should CFOs go about measuring the success of their organization’s environmental policies? By KIRSTY GODFREY-BILLY from sustainable brands.com • RepostedL April 6, 2023
The changing role of the Chief Financial Officer has been widely discussed in recent years. CFOs today must be prepared to respond to growing interest from stakeholders in their company’s sustainability practices and are increasingly becoming some of the most important drivers of sustainability initiatives across every industry. So, let’s look at why.
In the face of climate change, transparency is becoming non-negotiable in modern business. CFOs have always handled financial and business reporting; so, we are a natural fit for to take on sustainability reporting. It’s not a question of whether CFOs will assume this new responsibility — but rather, when. Robust, data-driven reporting is key to building and maintaining trust with customers, partners, investors and employees; and this is something we need to deliver on now.
This shift in public sentiment and expectation shouldn’t come as a surprise. As we witness the climate changing around us, the average consumer expects the brands they support to be proactive and communicative about their environmental impact and how they will reduce it. In fact, a recent PwC study found that 83 percent of consumers think companies should be actively shaping ESG practices. The benefits flow internally, too — in a recent study from the European Investment Bank, three-quarters of young employees surveyed say the climate impact of prospective employers is an important consideration when job hunting.
With increased expectations to assume the role of climate controller in business, how exactly should a CFO go about measuring the success of their organization’s environmental policies?
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As you can imagine, this is not a one-size-fits-all process. Every company and every leadership team has a unique purpose and set of values; and no two industries are necessarily impacting the environment in the same way. As a starting point, your climate strategy must be closely linked to your company strategy and purpose. Whether an agriculture company has pledged to eliminate pesticide usage or a financial institution is decarbonizing its lending portfolio, their respective CFOs should ensure clear performance targets are established and a company-wide plan is in place so meaningful progress can be delivered and reported on.
Externally, it might be assumed that because tech businesses aren’t typically considered among the biggest greenhouse gas emitters, we don’t face as much pressure to reduce and report our emissions. However, every business has a role to play in supporting the transition to a net-zero economy. The tech industry is still accountable — researchers from Lancaster Universityestimate that tech companies could contribute 2.1-3.9 percent of global greenhouse gas emissions.
This is why — in conjunction with a company’s sustainability experts and leaders across the business — tech CFOs should work to integrate their company’s environmental practices with their everyday compliance and tracking systems. From there, the idea of publishing their progress is much less daunting come reporting season. Whether they decide to mesh their financial and sustainability reporting into a single document such as an Annual Report or publish them separately, their sustainability practices and performance should be clear for all to see.
In an effort to introduce more transparency around our environmental impact at Xero, we’ve shared our plans to work towards net-zero emissions and set clear emissions-reduction targets — which we will share in our Annual Reports, in line with climate science. We are looking to reduce our carbon emissions right across the business — from reducing various contributors such as energy used in office spaces to indirect emissions in our value chain from cloud hosting, business travel, corporate catering and IT equipment.
Thankfully, many organizations and standards bodies exist to provide direction for companies looking to improve their sustainability performance and reporting. For example, the Task Force on Climate-related Financial Disclosures and the UN Global Compact CFO Taskforce are encouraging and supporting companies to integrate sustainable practices into all aspects of their business and report on performance. The International Financial Reporting Standards (IFRS) is also developing standards for climate accounting that are due to be released in 2023.
The most important thing to remember in all of this is to approach climate action genuinely and with commitment. Publicly reporting your sustainability performance has become as critical as reporting financial performance. Not only is it the right thing to do; it also gives leaders a broader picture of organizational performance and will support the long-term success and sustainability of every business.
By Mary Riddle from triple pundit.com • Reposted: April 6, 2023
U.S. President Joe Biden used the first veto of his presidency last week. The reason? ESG investing. On March 27, President Biden moved to reject a bill, approved by the House and Senate, that sought to overturn a new Department of Labor rule allowing U.S. retirement fund managers to take environmental, social, and governance (ESG) considerations into account in their investment decisions.
The latest chapter in an ongoing political battle over ESG in the U.S., Biden’s veto came just a few days after more than 270 companies and investors signed an open letter pushing back against anti-ESG policies.
In the letter, investors and companies emphasized the need to consider all financial risks and opportunities — including those associated with the climate crisis — in order to make smart investments. Calling their movement Freedom to Invest, these capital market leaders urged federal and state policymakers to protect their freedom to invest responsibly, noting they must be free to consider all material financial risks and opportunities in order to plan for the long-term.
“Managing risk and opportunities is our job as investors,” said Anne Simpson, global head of sustainability for Franklin Templeton, one of the letter’s signatories, in a statement. “Our duty and our loyalty are with the people who entrust us with their money. If we don’t pay attention to the accelerating frequency of severe weather disasters and the hundreds of billions of dollars they cause, nor to scientists’ forecasts for severe risk of more of that, and to entrepreneurial companies’ innovations for solving the resulting market needs, then we are not fulfilling our fiduciary duty.” The leaders noted that ESG considerations are not political nor ideological, but rather prudent risk management and investment considerations.
The skyrocketing price tag of anti-ESG policies
Anti-ESG legislation in a number of states is poised to cost taxpayers and retirees billions. State legislatures have been forced to roll back bills that sought to limit ESG investing practices, citing financial harm to state pension funds. Texas and Florida are continuing to push for anti-ESG legislation, even as Texas’ anti-ESG policies have already cost the state millions. Pension funds in the state are warning the legislature that the most recent round of anti-ESG proposals could cost retirees in Texas $6 billion over the next 10 years.
ESG is good for business
Climate change, social injustices, and environmental catastrophes all threaten workforces, supply chains, global markets and long-term economic growth. At the same time, “strong climate action will bring tens of trillions of dollars in additional value to the global economy along with millions of new jobs in the coming decades,” the financial leaders wrote in their letter.
Their claims are backed up by strong evidence. One recent study, for example, showed that companies with robust ESG programs saw a 9.7 percent revenue boost between 2019 and 2022, compared with a 4.5 percent boost for companies without ESG programs. The same study showed that 84 percent of companies that embrace ESG principles find it easier to attract investors and raise funds.
The group of Freedom to Invest signatories highlighted the business case for ESG in their letter, writing: “Our consideration of material environmental, social, and governance (ESG) factors is not political or ideological. Incorporating these issues into financial decision-making represents good corporate governance, prudent risk management, and smart investment practice consistent with fiduciary duty. We factor financially material considerations, including the impacts of climate change, into our standard investment and risk management decisions, in order to protect our operations and our investments.”
Even as ESG investing is facing backlash among some policymakers, ESG investing principles are growing in popularity. Almost $8.5 trillion in assets are currently managed by ESG-friendly investors, which is about an eighth of all total assets under management globally, and demand for sustainable funds is higher than for those that do not include ESG considerations.
U.S. Securities and Exchange Commission Headquarters in Washington D.C. Photo: triple pundit
By Tina Casey from triplepundit.com • Reposted: April 6, 2023
When the U.S. Securities and Exchange Commission proposed new rules for climate risk disclosure last year, they were met with an unprecedented flood of public comments. Part of the firestorm could be an effect of partisan politics. However, some commenters raised legitimate concerns, and the SEC is reportedly poised to make some changes in the coming weeks.
The SEC responds to investor trends, not partisan ideology
When the climate disclosure rules were proposed last year, SEC Chair Gary Gensler emphasized the agency’s founding mission to ensure that investors are fully informed about risks. “Our core bargain from the 1930s is that investors get to decide which risks to take, as long as public companies provide full and fair disclosure and are truthful in those disclosures,” he said in a press statement announcing the rules, dated March 21, 2022.
Gensler was also quick to note that the proposed SEC climate rules are not derived from partisan ideology. They are based on the clear and indisputable fact that climate disclosures already have broad support among investors.
“Today, investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize that climate risks can pose significant financial risks to companies, and investors need reliable information about climate risks to make informed investment decisions,” Gensler explained.
The proposed rules were also intended to level the playing field by creating a uniform standard for climate disclosures. “Companies and investors alike would benefit from … the clear rules of the road proposed in this release,” Gensler said. More information and more disclosures also allow issuers to meet investor demands for clarity on climate risks, he argued.
Pushback against new SEC climate rules
The fact-based genesis of the new SEC climate rules is a stark contrast to the mounting pushback against environmental, social and governance (ESG) considerations in business. High-profile public officials have been railing against ESG investing as a threat to the health of public pensions. However, they offer no facts to back up their arguments, which on closer inspection appear to be nothing more than thinly disguised efforts to protect fossil energy stakeholdersfrom competition. The anti-ESG messaging has also become entwined with the rhetoric of right-wing extremism and “anti-woke” posturing, which doesn’t help its legitimacy.
It is no surprise to see well-known conservative lobbying organizations promote anti-ESG messaging in their public comments on the proposed SEC climate rules. For example, the Heritage Foundation, a conservative think tank, colored its critique of the rules with a jab at ESG advocates in a lengthy public comment submitted on June 1, 2021, describing them as “increasingly strident” in their efforts to achieve “various social or political objectives.”
“This is being done under the banner of social justice; corporate social responsibility (CSR); stakeholder theory; environmental, social and governance (ESG) criteria; socially responsible investing (SRI); sustainability; diversity; business ethics; common-good capitalism; or corporate actual responsibility,” the Heritage Foundation’s comment reads.
“The social costs of ESG and broader efforts to repurpose business firms will be considerable,” the group warned. “Wages will decline or grow more slowly, firms will be less productive and less internationally competitive, investor returns will decline, innovation will slow, goods and services quality will decline and their prices will increase,” it added, without substantiation.
Another look at the SEC climate rules
All in all, Heritage dismissed the entire effort as a pointless, politics-driven exercise. “When all is said and done, climate change disclosure requirements will have somewhere between a trivial impact and no impact on climate change,” its comment reads.
In contrast, other commenters underscored the extent to which ESG principles and ESG reporting have already been adopted as a matter of business, not ideology. “The impacts of the climate crisis on our lives and our livelihoods are worsening at a dramatic rate,” the nonprofit B Lab — which operates the voluntary B Corp certification for responsible businesses — and the B Corp Climate Collective wrote in a joint comment to the SEC, in just one example
Commenters also noted that the economic landscape is fraught with physical risks from climate impact, as well as bottom-line risks involving changes in regulatory, technological, economic, and litigation scenarios as the economy shifts to net-zero.
“The risks can combine in unexpected ways, with serious, disruptive impacts on asset valuations, global financial markets, and global economic stability,” the B Corp groups argued, in making the case for stronger, more detailed disclosure rules based on the recommendationsof the Task Force on Climate-related Financial Disclosures (TCFD).
The SEC has some changes in store
The SEC has yet to announce a decision on what will be included in the revised rules. However, in a recent interview with CNBC, Chairman Gensler reminded the public of the agency’s investor protection mission. “I like to say we’re merit-neutral, whether it’s crypto or climate risk,” he told the outlet earlier this year. “But we’re not investor-protection-neutral or capital-formation-neutral.”
He reiterated that the new SEC climate rules are “about bringing consistency and comparability to disclosures that are already being made about climate risks,” adding that “investors seem to be, today, making decisions about this information.”
Some SEC observers anticipate that the agency will propose easing the original rules, in order to prevent unreasonable burdens on companies that are already engaged with climate disclosure.
That may be so. However, it is unlikely that the revised rules will provide a cloak of invisibility for companies that have not made plans for transitioning to a low-carbon economy.
In the CNBC interview, Gensler emphasized that the proposed rules don’t force companies to make a climate transition plan if they don’t already have one. “If a company doesn’t have a climate transition plan, that disclosure was: ‘We don’t we don’t have that such a plan or target,’” he explained.
That sounds simple enough. If that feature of the proposed rule remains in place when the SEC announces the revisions — which are expected later this month — investors will have a clear, accessible way in which to assess which companies are preparing to respond to the massive risks posed by climate impacts, and which still have their heads in the sand.
By Tom Ryan from retailwire.com • Reposted: April 5, 2023
A new study finds over 57 percent of U.S. consumers cannot name a brand that is making a difference when it comes to either the environment or diversity.
Slightly fewer, 54 percent, could not name a brand that gave back to the community, according to GfK’s first “Purpose Impact Monitor” study.
The study found that three-quarters of generic ads captured the attention of consumers. The proportion dropped to two-thirds for cause-focused ads.
“The truth today is that purpose-driven efforts and campaigns have become commonplace – even mundane,” said Eric Villain, client solutions director for Marketing Effectiveness at GfK, in a statement. “If a brand were to completely shun causes, that would likely be noticed; but supporting them is not a differentiator anymore. This means marketers and brands need to work harder – in keeping with their brand essence and the category – to really make an impression with their purpose efforts.”
Recent research from CivicScience found 73 percent of U.S. adults agree that a company’s “social consciousness and overall kindness” is either “very important” (29 percent) or “somewhat important” (44 percent) when choosing where to shop and what to buy.
The importance peaked in 2020 during the Black Lives Matter protests and the presidential election. Sentiment “softened over the past year, likely as price sensitivity and economic concerns grew.”
The socially responsible marketing consultancy Good.Must.Grow’s “Tenth Annual Conscious Consumer Spending Index” found the momentum for conscious consumerism and charitable giving surged to a record high of 51 on a scale of 100 in 2021 as the pandemic “reenergized the pursuit of purpose.” It eased to 49 in 2022.
The decline in 2022 was attributed to inflation as 46 percent of Americans said the cost of socially responsible goods and services prevented them from buying more.
“I believe this year’s data demonstrates several things, one of which is the tension involved with following through on good intentions in the face of economic pressures,” said Heath Shackleford, founder of Good.Must.Grow. “Those of us working for the growth of socially responsible brands must continue to prioritize competitive pricing.”
USAID distributes food assistance in East Africa, where an unprecedented drought is pushing millions to the brink of starvation. Image credit: USAID U.S. Agency for International Development/Flickr
By Eric Bebernitz, Director of External Relations, Action Against Hunger via Triplepundit.com • Reposted: April 3, 2023
Companies are working to meet rising stakeholder expectations on environmental, social and governance (ESG) issues in ways that can differentiate, build brand reputation, and engage employees. Yet the predominant approach misses a critical opportunity since it doesn’t focus on a critical issue that few want to face: global hunger.
Hear me out. Just as the climate crisis is a universal challenge, global hunger is a fundamental issue that ultimately impacts business success — and humanity as a whole. In 2021, an Action Against Hunger survey with The Harris Poll found that nearly half of all Americans worry about increases to the price of food as a result of climate change. The most recent Trust Barometer found that 67 percent of people globally are worried about food shortages leading to hoarding, riots and hunger, which Edelman characterizes as an existential societal fear. As a priority, the issue ranked behind climate change and just ahead of energy shortages. It’s not hard to see why.
After decades of progress showed that it is possible to dramatically slash rates of malnutrition, global hunger is once again on the rise. Approximately 828 million people — 1 in 10 worldwide — are undernourished, and as many as 50 million people in 45 countries are on the verge of famine. The costs of inaction are high.
Yet global hunger is a predictable and preventable problem that we can solve in our lifetimes. Doing so can provide a strong return on investment. As a 2022 study showed, every $1 invested in preventing chronic malnutrition in children can result in gains from $2 to $81 annually. Among the range of ESG issues, addressing malnutrition stands out for its ability to advance other corporate priorities, such as the following.
Long-term workforce development
Hungry children struggle to learn, and hungry workers are less productive. Hunger robs the U.S. economy of at least $167.5 billion annually, and research published in The Lancet found that, across 95 low- and middle-income countries, childhood stunting costs the private sector at least $135.4 billion in sales annually, amounting to around 1.2 percent of national GDP.
Socio-economic growth
The U.S. Secretary of Commerce believes an aging population will hit the country “like a ton of bricks,” with migration as a potential solution. Africa is the only region projected to enjoy strong population growth long-term, which can provide a global demographic dividend — but only if we invest in the potential. Africa has the world’s youngest population as well as the highest hunger rates, with 9 out of 10 children not receiving even the minimum acceptable diet, according to the World Health Organization. One in 3 African children are permanently stunted by hunger, reducing the region’s present GDP per capita by 10 percent. Hunger is growing in other regions, as well.
Political stability
Conflict and global hunger are deeply linked. As U.N. Secretary-General António Guterres noted in a 2020 report, income inequality is creating a vicious cycle of discontent, leading to mass protests in both developed and developing countries. Roughly 70 percent of the world’s most malnourished people live in countries with an active conflict, which disrupts harvests, hampers aid delivery, and creates a burgeoning population of displaced people. This can contribute to even greater instability, often in already fragile regions.
Permission to operate
The epochal shift from shareholder capitalism to stakeholder capitalism comes as a growing number of millennial and Gen Z adults — now a majority of the U.S. workforce and a growing share of the electorate — hold a negative view of capitalism itself. Public willingness to subsidize, tax and regulate business can, quite literally, hinge on bread-and-butter issues.
The bottom line: The untapped potential of investing to fight global hunger
Although addressing global hunger is a wise investment, it’s one that isn’t being made. Countries with “crisis” levels of hunger face a 53 percent gap in hunger funding. Corporate giving to health and social services dropped 5 percent in 2022, and median international community investments decreased by 15 percent, according to CECP. Among the U.N. Sustainable Development Goals, companies consistently report providing the least support for the objective to eradicate global hunger.
Inaction is particularly unwise in an era when economic anxieties and the mass-class divide are eroding trust. The effect is sharply pronounced among those with lower incomes: In the U.S., for example, there is a 23-point gap in the levels of institutional trust among lower-income and higher-income groups. Lack of trust has a corrosive effect on society, dimming long-term economic prospects.
In other words, chronic inequality — a major driver of global hunger — is bad for business. Ending hunger is no longer about charity or even being “woke.” It is now essential to foster the kind of operating environment that is essential to business value and long-term success.
James Tucker got an efficient heat pump for his home near Oakland, Calif., last year. Now homeowners can get new credits for heat pumps from federal climate legislation. Photo: Julia Simon/NPR
By Julia Simon from National Public Radio • Reposted: April 3, 2023
Sales of super-efficient electric heat pumps are rising, now overtaking sales of gas furnaces in the U.S. But what are heat pumps? And why do some call them a key climate solution? Here are the answers to your most burning heat pump questions.
“A lot of people dislike the name ‘heat pump’, right? ‘Cause it doesn’t really convey, you know, the full range of what the machine can do,” he says.
Heat pumps can work for both heating and cooling. Kircher says you can think of a heat pump as an air conditioner that can also work backwards. The highly efficient machines use electricity and refrigerants to cool air on hot days.
In the winter, even if the outdoor air is cold, it’s still normally warmer than the refrigerant inside the heat pump, Kircher says. So the refrigerant can absorb bits of heat from the outdoor air and bring it inside to warm your home.
What are the climate benefits of heat pumps?
The fact that heat pumps use electricity is a big reason why governments around the world see them as a key climate solution, says Yannick Monschauer, energy analyst at the International Energy Agency in Paris. That’s because heat pumps can replace gas furnaces, and the electricity they run on is increasingly powered by renewables, Monschauer says. Reducing gas usage in homes also reduces leaks of methane, a potent planet-heating gas.
Fossil fuel-based heating still accounted for 45% of global heating equipment sales in 2021. But if governments like the US and the European Union meet the targets laid out in climate legislation like the Inflation Reduction Act and REPowerEU, heat pumps could significantly slash planet-heating fossil fuel use in buildings, Monschauer says.
“We see that heat pumps could bring down global CO2 emissions by half a gigaton by the end of this decade,” he says. “So that is comparable to the annual emissions of Canada.”
James Tucker with his heat pump that replaced his old gas furnace. Photo: Julia Simon/NPR
Will the government help me pay for it?
Last year’s federal climate legislation offers new economic incentives for homeowners to install heat pumps, says Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, a research organization working on saving energy. An IRS spokesperson tells NPR that the new credits can translate to up to $2000 for efficient heat pumps bought after January 1, 2023. If you buy a new heat pump, Nadel says to keep your receipts for reference for next year’s tax season. If you bought a heat pump in 2022 you can get credit for this upcoming tax season, but the previous incentive was smaller, up to $500, the IRS says.
Some states and some utilities also give rebates for efficient heat pumps. Nadel says you should check with your utility to see if there are programs available in your area.
As for renters, it’s also possible to get credits for appliances like efficient heat pumps according to the IRS.
Do heat pumps actually work in cold temperatures?
Earlier generations of heat pumps didn’t work as efficiently in freezing temperatures, but Monschauer says there’s been great improvements in technology.
“In the coldest parts of Europe we also have the highest shares of heat pumps. So in Norway, for example, 60 percent of the households are equipped with heat pumps. And in Sweden and Finland it is also 40 percent. So it’s definitely proven that it’s possible.”
The heat pump systems commonly found in Scandinavian homes do not need to run on backup fossil fuels, Monschauer says.
Not all heat pumps sold in the U.S. work well in the coldest weather. It’s important that you consult with an installer who is familiar with heat pumps, and make sure to find a machine that’s most efficient for your weather, Nadel says.
“In a cold climate that gets below 20 degrees Fahrenheit fairly often, you should look into getting into an Energy Star cold climate certified heat pump,” Nadel says, referring to a U.S. government program that makes markers for efficiency.
Heat pumps can work for both heating and cooling. You can think of a heat pump as an air conditioner that can also work backwards. Photo: Julia Simon/NPR
Can heat pumps save money?
Because heat pumps move heat around instead of burning fossil fuels for heat, they are more efficient than gas furnaces. And while heat pumps are typically more expensive on the front end, the savings come over time when you end up spending less on gas, says Brian Rees, a heat pump installer at Bryant Air Conditioning & Heating Company in Lincoln, Nebraska.
Rees says the cost savings are what attract his customers to heat pumps, “It’s more about hitting their pocketbook,” he says. “It’s more about what’s going to save them money in the long run, and heat pumps will do that.”
Kircher says you can also save money if you can buy a heat pump for both your heating and cooling needs. “It’s typically cheaper than buying a gas furnace plus an air conditioner,” he says.
Are there downsides to heat pumps?
Like refrigerators or air conditioners, heat pumps use refrigerants. The primary refrigerants commonly used in heat pumps are called hydrofluorocarbons, or HFCs, says Duncan Callaway, associate professor of Energy and Resources at UC Berkeley. These HFCs have high global warming potential if they’re released into the atmosphere, Callaway says.
That’s why it’s critical that heat pump installers make sure that those refrigerants don’t leak and are disposed of properly, he says.
“We need well-trained technicians that sort of understand the importance of collecting that refrigerant and not letting it emit into the atmosphere,” Callaway says.
Kircher also notes that researchers are currently working on developing refrigerant substitutes for HFCs that can drastically reduce climate impacts.
According to recent research conducted by 3BL Media and TriplePundit in partnership with Glow, interest in sustainability and social impact issues is on the rise in the United States. The survey, which polled 3,648 U.S. adults from December 13-15, 2022, found that 67% of respondents regularly read news about sustainability, the environment, or social well-being.
The survey revealed that this interest is not limited to specific demographics. Respondents from all generations, genders, geographies, and income levels expressed a desire to learn more about sustainability and social impact. Despite inflation and recession concerns, climate change was ranked among the most pressing issues facing society today, with respondents across all age groups, income brackets, and geographic regions agreeing.
However, the research found that consumers are not satisfied with the level of commitment from businesses when it comes to tackling environmental and social challenges, saying companies should be doing more.
But they aren’t solely pointing the finger at business, as the data shows that consumers are willing to make changes in their own lives to reduce their impact on the planet, such as shopping secondhand, using reusable or refillable products, and buying less overall.
The results of the survey present a unique opportunity for businesses. Consumers are ready for change and eager to learn about new ideas and innovations that can make a measurable difference. Companies that step up and demonstrate their commitment to sustainability and social impact issues can earn consumers’ trust, build brand reputation and gain a competitive advantage in the marketplace.
Ajay Banga is a former Mastercard CEO, past chair of the International Chamber of Commerce and an American. The U.S. is the largest World Bank shareholder, and the institution’s president has historically been American. Photo:Tony Karumba/AFP via Getty Images
By Rachel Kyte, Dean of the Fletcher School, Tufts University via The Conversation • Reposted: April 2, 2023
Many low- and middle-income countries – the population the World Bank is tasked with helping – are falling deeper into debt and facing growing costs as the impacts of climate change increase in severity. A chorus of critics accuse the World Bank of failing to evolve to meet the crises.
The job of leading that reform is now almost certain to fall to Ajay Banga, an Indian American businessman and former CEO of Mastercard who was nominated by President Joe Biden to replace resigning World Bank President David Malpass. Nominations closed on March 29, 2023, with Banga the only candidate.
There is no shortage of advice for what Banga and the World Bank need to do.
The G-20 recently issued a report urging the World Bank and the other multilateral development banks to loosen their lending restrictions to get more money flowing to countries in need. A commission led by economists Nicholas Stern and Vera Songwe called for a rapid, sustained investment push that prioritizes transitioning to cleaner energy, achieving the U.N. sustainable development goals and meeting the needs of increasingly vulnerable countries.
African ministers of finance will soon come out with their own “to do” list for the World Bank, and India’s minister of finance just pulled together an expert group to consider World Bank reform.
Banga will walk into the job with these and many other to-do lists. Yet he will inherit a corporate culture that makes the World Bank Group too inwardly focused and too slow to respond.
I have worked for the World Bank Group and with it from the outside. I see four key roles – four “C’s” – that Banga will need to master from the outset. From his track record and his reputation for deep thoughtfulness, I am confident that he can.
1) Act as a CEO and get the entire World Bank Group house in order.
The World Bank Group is a conglomerate with four balance sheets, three cultures and four executive boards, plus a dispute resolution arm.
Lending to low- and middle-income countries is just part of its role. The World Bank Group also provides technical assistance across all areas of economic development and invests in and provides risk insurance to encourage companies to invest in projects and places they might otherwise consider too risky. Its ability to mobilize private-sector finance and stretch every dollar is crucial for meeting the world’s development and climate adaptation and mitigation needs.How the World Bank operates.
Banga will need to set clear goals for each part of the World Bank Group and get them working more effectively to help the world achieve its goals.
2) Assume the mantle of collaborator in chief to take on the debt and climate crises.
Many of the World Bank Group’s client countries are facing both mounting debt and rising costs from climate change.
The high cost of borrowing can hamper developing countries’ ability to invest in needed infrastructure to grow and protect their economies, and they fear being locked out of global trade as the United States’ green subsidies in the Inflation Reduction Act and Europe’s border carbon tax may make it more difficult for them to compete.
The solutions to cascading problems like these cannot be managed by one institution. However, the current multilateral development bank system – the World Bank Group and the regional development banks – is disjointed at best and competitive at worst./
In the past, the leaders of the development banks, the International Monetary Fund and the World Trade Organization have cooperated, more or less, depending on crises and personalities, and can move fast when they need to.
During the global financial crisis of 2008 and 2009, for example, the then-heads of the World Bank and the WTO hurried to develop trade finance facilities to support banks in developing countries as capital fled to the U.S. and Europe. It took intense diplomacy to push wealthy countries and institutions to get money out the door to shore up businesses and trade. Success was measured not in months but in days.
The new president of the World Bank will need to support more radical collaboration among development financial institutions, including pooling capital and talent, to help respond quickly to countries’ needs.
It won’t be easy. Institutional rivalries run deep. But with budgets tight, there is growing clarity that there is no choice – the capital that is already in the system is the closest at hand and can be deployed to better effect if the institutions are willing to adapt.
3) Be a convener.
Overhauling how international finance works will require everyone to be on board – development banks, central banks, regulators, investment banks, pension funds, insurance companies and private equity.
On other issues, such as nature-based solutions to climate change, building resilience and economic inclusion, the World Bank Group can bring its significant resources and skills, including data analysis, to global conversations that it has been painfully absent from for the past four years.
4) Be a champion for the most vulnerable.
The world’s most vulnerable people are the World Bank Group’s ultimate beneficiaries. For those living on the front line of biodiversity loss and climate impacts, such as extreme heat, drought and flooding, the current international financial system is proving inadequate.
The World Bank Group’s management incentives are still too oriented to lending approved by the board, not the outcomes of that lending, advice and assistance.
Throughout its history, World Bank leaders have been able to make rapid changesto better help vulnerable countries when they stay close to the needs of their ultimate beneficiaries and the goals that the world has set.
The next president faces turbulent times. Banga’s careful listening on his campaign tour signals that he understands the complexity. It’s an extraordinary moment in the history of the institution, with sky-high expectations of what one leader needs to do.
The top 10 firms in the 2023 Responsible Investment Brand Index (RIBI) continue to be European asset managers, according to the fifth edition of the global survey.
The research said these brands have solidified their position as ‘avant gardists’ – those with above-average ranking.
The top-ranked firm for 2023 is Candriam, followed in order by DPAM, Axa Investment Managers and Mirova.
Impax Asset Management, Ecofi Investissements, Schroders, Amundi, Robeco, and CPR Asset Management make up the remaining spots, respectively.
European firms held the top 10 spots in last year’s research and their base has since grown. Last year, these top 10 firms represented 24% of the industry. This has crept up to 28%.
As a region, Europe ex UK firms have an average RIBI score of 2.12 which had also increased from 2022 when this was 1.84. The latest score is well above the world average score of just below 1.9.
As a region, the UK has lagged, with an average score of 2.11. This has also increased from 1.72 in 2022, closing the gap with Europe.
North America is the biggest laggard, as a region, with an average score of below 1.7.
“The main challenge the financial industry needs to address remains its reputation – the necessity to establish long-term, trusted and mutually profitable relationships with multiple stakeholders,” says Jean-François Hirschel, co-founder of RIBI.
“With times staying uncertain yet RIBI demonstrating progress within the industry, there has perhaps never been a better time for asset managers to focus on the genuine identity they convey through their brand.”
The RIBI survey is based on an analysis of close to 600 asset managers around the world assessed on commitment and brand.
Outside the Department of Labour in Dhaka last month workers demanded that their shuttered garment factory be reopened Photo: Mamunur Rashid / shutterstock.com
When industrial agriculture and salmon production came to Chile, they brought new jobs to rural and indigenous women. But the work came with a hefty price tag.
It wiped out ancestral practices and shattered solidarity-based communities. Those working the graveyard shift in salmon-processing plants endured gruelling hours and saw their family bonds deteriorate.
The salaries were low—so low they couldn’t even be considered a living wage. When the pandemic hit and the food industry shuttered, unemployment grew in nearby communities. Going into debt became unavoidable for many, while others hung by a thread.
The situation was doubly difficult for women workers, because of gender norms and intersecting vulnerabilities. Still the main caregivers, their poverty wages and brutal working conditions also affected children and elderly family members dependent on them.
Especially insidious
Gender discrimination and inequality in global value chains have been widely documented but remain largely unaddressed by European companies and regulators. Abuses of women’s rights are especially insidious in the food-services, electronics and garment industries, where women make up most of the workforce.
Women in these export-oriented manufacturing sectors are vulnerable to wage theft, union-busting and other violations of labour rights—especially if they are young, migrant and/or poorly educated. Reckless business activities prey on and exacerbate inequitable gender roles, such that 71 per cent of those trapped in modern slavery are women.
All of this is hidden in plain sight. The long and winding value chains that stretch across the globe reinforce power imbalances and the maldistribution of costs and benefits. For instance, most brands don’t seem to care that it takes justfour days for a chief executive from one of the top fashion labels to make what a Bangladeshi garment worker will earn in her lifetime.
Similarly, fossil-fuel companies have made record profits from the energy crisis while fuelling climate collapse and pushing millions into starvation. Yet TotalEnergies is rewarding its chief executive with a scandalous bonus of nearly €6 million, despite standing accused of causing massive forced displacements in Uganda and Tanzania. What is often overlooked is how land-grabbing affects women, who comprise only 15 per cent of landholders globally but depend on the land to grow food and secure water.
Sexual violence is another endemic issue, festering in the deep underbelly of multinationals’ value chains. Recent investigations have uncovered abuses in tea plantations and wind parks. These will only be eradicated if we ensure corporate accountability.
Stumbling at the first hurdle
As the largest trading bloc in the world, the European Union must lead on this front. Civil society and trade unions have hailed the forthcoming corporate-sustainability directive as a huge opportunity to advance women’s rights and gender equality globally, while uprooting abuses of human and environmental rights along companies’ value chains and holding them liable for harm.
Yet despite the European Commission president, Ursula von der Leyen, declaring that ‘gender equality is a core principle of the European Union’, thecommission stumbled at the first hurdle in making this a reality for the women making our food, clothes and electronics. The draft directive completely ignored the enhanced risks of business for women, girls and other marginalised groups.
Then in December, the Council of the EU, representing the member states, scrapped the Convention on the Elimination of All Forms of Discrimination Against Women from the draft directive’s list of human-rights standards corporations must respect. This is a huge setback in the fight for women’s rights.
Do European citizens know how little their governments care about women? This gender-blind approach will simply fortify toxic gender dynamics and leave women further behind. It certainly will not protect women environmental and human-rights defenders from the misogynistic violence disproportionately used to silence and control them.
Changing course
The European Parliament and the council can still change course. Co-legislators must ensure rules extend across the entire value chain, because it is in the lower tiers where women are over-represented and invisible to corporates in head offices.
For women and those in situations of vulnerability, access to justice must also urgently be improved. Removing legal barriers to bringing transnational court cases against companies is essential. That includes reversing the disproportionate burden of proof borne by claimants, who usually have limited access to evidence such as internal documents.
European lawmakers must also oblige companies to carry out impact assessments that identify how corporate activities affect women specifically—and include provisions on gender equality and the protection of human-rights defenders erased from earlier drafts. To guarantee that women’s exploitation is no longer a source of profit, major brands must map their international value chains and collect gender-disaggregated data, to give women the information they need to alert companies about risks and ways to remedy abuses.
World of difference
For women working in salmon-processing plants in Chile, it would make a world of difference to be heard and taken into account. By carrying out due diligence and consulting women in a meaningful way, European buying companies would learn about the problems women face—how supervisors monitor their bathroom breaks or penalise their medical check-ups and maternity leaves. You cannot fix what you do not see.
With key votes in the European Parliament and the ‘trilogue’ negotiations on the directive approaching among commission, council and parliament, EU leaders need to get their act together to guarantee that the products we use are untainted by abuses.
On International Women’s Day, the commission said it stood ‘united with all women to build momentum for their rights across the globe’. The EU must now present a united stand to protect the millions of women who work in the factories, farms and packing houses supplying our essential needs.
Consumers are increasingly swapping brands for ones that are more sustainable, according to new research from Glow. The online consumer research platform contacted 33,000 respondents between April and December 2022, gathering insight into their food and grocery purchases. By Stefanie Valentic from Waste 360 – Reposted: March 31, 2023
Consumers are increasingly swapping brands for ones that are more sustainable, according to new research from Glow.
The online consumer research platform contacted 33,000 respondents between April and December 2022, gathering insight into their food and grocery purchases. Glow also leveraged data from NielsonIQ research studies to study the relationship between consumers and sustainability expectations.
Glow founder and CEO Tim Clover commented, “Investors, employees, customers and consumers want to see more progress in sustainability initiatives that support people, the environment and the planet. Brands are increasingly sharing their credentials, communicating their milestones and publishing performance against their ESG and sustainability goals.”
He noted the influx of information around sustainability from both “controlled and uncontrolled sources” as a direct driver of consumer purchasing decisions, with one out of 2 consumers switching brands based on their purpose-driven efforts.
The US Brand Sustainability Benchmark report showed behaviors shift across all sectors of the food and grocery (F&G) industry, with the highest occurrences in Health & Beauty, Meat & Seafood, Household, and Beverage.
Respondents indicated they are willing to pay more for brands with ESG goals that align with their values. Nine out of 10 consumers surveyed expressed the importance of brands demonstrating social and environmental responsibility. Furthermore, 64 percent are willing to pay more for these products.
The findings also showed the following economic issues are most important in purchasing F&G products: reducing emissions and climate change; respecting and protecting natural resources; protecting wildlife and ecosystems; and taking care of supplier welfare. Packaging and plastic reduction in Household products also were important to consumers.
“The largest opportunity gap for brands in the US F&G industry exists in the Environmental drivers,” the study found. “They are the most important but consumers are the least satisfied with the industry’s overall performance across them. More than 3 in 10 consumers are not satisfied with the industry’s performance on any of the four Environmental drivers – with reducing emissions & climate change both the most important AND the lowest scoring driver of satisfaction measured. Environmental drivers represent a significant opportunity for the Food and Grocery industry to raise their game to meet consumer expectations.”
Glow concluded that opportunities exist for F&G brands that align their ESG goals with consumer expectations. The industry ranked ahead of 20 others in the report, just behind supermarkets and convenience.
“The F&G industry is deemed to be one of the industries leading the way to a more sustainable future,” the study noted.
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.
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