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Brexit and Corporate Sustainability
Category: Blog, Legislation 29 Jun 2016

brexitLast week, the people of the United Kingdom voted to leave the European Union, ushering in a period of uncertainty and change that is likely to have broad implications for the business community. While it is important to note that the vote itself is not binding, the private sector in Europe and beyond must immediately consider the effects that separation would have on various aspects of their operations, if it is actually enacted.

Corporate sustainability is no exception. Companies in the UK will be impacted by changes to the regulatory landscape. UK businesses are currently subject to many European laws on environmental and social issues, including REACH, RoHS, WEE, and more. Over the coming months and even years, government decision makers in London will have to look through these laws and decide how to handle each piece or group of legislation.

In all likelihood, many laws will be kept the same or redrafted with content similar to the original. The UK government’s top priority is, and will remain, stability. Its desire to keep businesses thriving and investment flowing will likely result in legislative continuity. Furthermore, Westminster’s desire to remain in the European ‘Single Market’ makes major change all the more unlikely. It is improbable that they would raise legislative sustainability barriers that would result in a more difficult environment for business. In fact it is possible that some sustainability laws will be done away with to encourage business confidence. However, this is uncharted territory and the UK’s private sector will have to keep up with developments as they unfold. It will take time.

Companies that are joint ventures in the UK and other EU countries are in a uniquely complex position. Unilever, for example, is co-Headquartered in the Rotterdam and London. If the legislative landscape in the UK changes, questions of compliance will certainly arise for them and other companies in similar situations. Again, keeping a careful eye on developments is key.

Businesses outside of the UK and EU will also be impacted if they are doing business with either entity. The division means that they must be seen as two distinct trading partners with different sustainability laws. While it’s unlike that these companies will produce different products for the two markets, it is likely that compliance costs will increase.

Companies that have taken a ‘beyond compliance’ approach to sustainability over the past years are placed at an advantage in this situation. As always, staying ahead of the sustainability curve makes it easier to avoid risk and build value.

Supply Chain Monitoring Tool Reveals Broader Transparency Trend
Category: Blog, Green Business, Supply Chain 08 Jun 2016

Bureau Vchemicalseritas has released a tool that will help companies in the textile industry monitor their chemical emissions. The BVE3 tool enables factories to input chemical emissions data into a platform on a regular basis. This information is then evaluated and scored by Bureau Veritas teams and the results can be communicated up the supply chain to buyers.

As well as increasing tracking and transparency on key environmental data, this ongoing monitoring is likely to encourage reductions in harmful emissions. As with many other environmental KPIs, monitoring is often the first step towards effective management and improvement. This is particularly important for chemical emissions, the negative impacts of which can be especially destructive.

The tool is the latest example of a broader trend toward increased supply chain transparency and engagement. The trend is driven primarily by buyers wishing to manage the sustainability impacts of their supply chains more closely. Many companies, in textiles and other sectors, are demonstrating that they are no longer willing to take a single faceted approach to supply chain sustainability. Rather, a combination of audits, ratings, data monitoring, and increased engagement are becoming the norm. This increased level of scrutiny makes suppliers more likely to improve their CSR management systems. It also gives buyers the information they need to make impactful decisions regarding CSR in their supply chains. The domino effect that this produces can be far reaching, and tools such as this are the driving force behind it.

Trucost Study Demonstrates the Benefits of Closed-Loop Plastic Recycling
Category: News 25 May 2016

circular economyA new study published by Trucost has highlighted the massive potential benefits of sustainable plastic recycling. The research focuses on the computer manufacturing industry, finding that if the entire sector used closed-loop recycled plastics, it would save society $700 million per year in environmental costs.

A number of companies are already engaged in this sort of activity. For instance, Dell uses plastic reclaimed from its own take-back programs to manufacturer some of its high-end products. This saves the company money, contributes to its corporate responsibility goals, and has a far reaching sustainability impact. It is an example of circular economy in action.

Despite the clear benefits of such action, getting more companies to work with recycled plastics is difficult. Trucost asserts that this is largely due to insufficient waste management measures that are the necessary foundation for bringing materials back into use. Government incentives, or simply wider education of the benefits could spur on more action.

Plastic reuse is just one aspect of circular economy practices. However, it is another important success story that demonstrates the win-win opportunities that exist for companies in a variety of industries.

Want to know more about circular economy practices? Visit the Ellen MacArthur Foundation here.

 

 

 

Tech Giants Endorse EPA’s Clean Power Plan
Category: News 07 Apr 2016

coal plantSome of the largest businesses in the US, including several tech companies, have endorsed the EPA’s proposed regulation on coal-burning power plants. The plan would require all existing plants to slash carbon emissions by 32 percent by 2030, against 2005 levels. The proposal is currently on the Supreme Court’s docket after 27 states filed legal motions challenging its legality.

Last week, the largest tech companies in the country – Amazon, Apple, Google, and Microsoft – filed a formal endorsement with the Court. The same day, Adobe, Mars, Ikea North America and Blue Cross Blue Shield also filed similar motions. The organizations cited their own ambitions to use clean power and asserted that the EPA’s plan made good business sense in the long run. Their voices became added to the many cities, counties, and other businesses that had already come the plan’s defense.

Whether or not the move has a significant impact on the Court’s ruling, the endorsements are a strong sign of support from some of the most important economic forces in the country.

Greenpeace Report Reveals Stalled Palm Oil Progress
Category: Blog, Supply Chain 23 Mar 2016

palm oilA new Greenpeace report has criticized a number of companies for their lack of progress on sustainable palm oil sourcing. It reveals that a number of major corporations are failing to meet their own targets, at a high environmental cost.

The palm oil industry is one of the largest contributors to deforestation in some of the most biodiversity rainforest regions on Earth. The scale of the damage comes from the sheer size of the industry. Palm oil can be found in around half of consumer goods on supermarket shelves.

Many of the corporations involved in the industry have reacted to pressure from stakeholders by declaring ambitious goals for sustainable palm oil sourcing. These goals are aimed at eliminating deforestation in their supply chains and would mark a major step towards protecting the rainforests of Indonesia and other countries. However, this Greenpeace report, that scored twelve major corporations on their progress, has revealed that the majority are failing to implement changes. Only two of the twelve companies, Ferrero and Nestle, are on track to meet their goals of ending deforestation in their supply chains. For the rest, making this a reality remains far off.

The task is undoubtedly a challenge. Even simply gaining an understanding of the structure of a supply chain requires substantial investment. As the report states “Most companies are unable even to say how much of their palm oil comes from suppliers that comply with their own sourcing standards.” However, companies have achieved ambitious supply chain projects before. For instance with conflict minerals, where a greater than 80% conflict-free sourcing certification has been accomplished.

The reasons for this stalled progress are complex. It is worth pointing out, as one of the report’s authors did, that “almost everyone we spoke to clearly has good intentions…— there are companies out there that don’t have policies and won’t speak to us — but this group is working to address this challenge.” However, some of the companies are simply not putting in sufficient funds for real improvement. Reports like this show that third-party organizations are willing to invest the time and resources to ensure that companies are acting on their targets. Organizations that fail to make their targets risk public backlash. Once a public goal is set, the stakes are raised for implementation.

GreenBiz 2016 Is A Wrap
Category: Blog, Green Business 25 Feb 2016

The juggernaut corporate sustainability event, GreenBiz 16, has just ended in idyllic Scottsdale, AZ. The end brings a sense of relief (networking and ideas overload), a sense of enormous challenges and a renewed sense of purpose. Purpose – one of the main take-aways from the conference; lots of talk about how businesses need to refocus on their core purpose and integrating aspects of environmental and social responsibility into that purpose. Maybe it’s a bit of mission and vision review? Probably needs to be done in the C-suite and at the BU level.

Another takeaway – COP21 will affect business behavior in 2016, but much of the work around lowering CO2 emissions would have happened anyway. Dr. James Hansen was a bit dismissive of all of this and said, basically, do whatever you can in your power to influence policy in favor of a “Fee and Fund” carbon tax approach to de-carbonization. We probably need to do both.

And then there was the interesting session on “Net Positive,” which is an effort to reframe corporate sustainability from “do less bad” to “do good.” A little unclear about how these efforts would not be perceived as greenwashing and/or detract from companies focusing on material issues in operations and supply chain. But worthy of noting with a hard launch expected in June.

Also good discussions about sustainable purchasing, including a “guru” lunch organized by ISM (www.instituteforsupplymanagement.org) and SPLC (www.sustainablepurchasing.org). This concept of driving institutional purchasers to choose goods and services with lighter impacts is very much gaining traction, but still faces serious challenges about (a) building out category-level definitions of what is “sustainable” and (b) training the purchasing community about the overall best-practice-based strategy and the tools needed to operationalize the concept. Watch this space.

That’s a wrap.

GreenBiz State of Green Business Report Highlights Circular Economy Revolution
Category: Blog, Green Business 15 Feb 2016

greenbiz GreenBiz has released its annual report on the state of sustainability in business. The report, a collaborative effort with Trucost, gives an overall view of CSR and sustainability progress in the private sector and outlines some key trends to watch for in 2016.

The report reflects on the success of 2015, a year defined by landmark action like the COP21 agreement and a substantial increase in sustainability investment. Private sector progress reached new levels as companies announced ambitious pledges for action. While this action was clearly inspired in part by the COP21 and other government actions, this paper asserts that “the business world didn’t even need a U.N. climate conference to spur progress.” It takes the view that sustainability in business is in the process of turning a corner, regardless of public sector action.

According to the authors, this private sector progress is in large part due to the increasing integration of Circular Economy thinking into mainstream business strategy. As they point out, the Circular Economy requires a complete rethink of procurement, product end-of-life, and other business areas. As they put it, “the circular economy involves a fundamental rethinking of products, materials and systems of commerce. It is not simply next-gen recycling.” In the more basic form of corporate social responsibility, business’s focus on one area, or one change, at a time. Circular Economy thinking requires more of a holistic altering of the ways in which a business operates. As Peter Lacy, global managing director at Accenture Strategy, put it, the circular economy could be “the biggest economic revolution in 250 years.” The GreenBiz report agrees, and emphasizes that 2016 will bring further circular economy integration.

The report correctly strikes a cautious tone at times. Weather patterns were alarming in 2015 and 2016 is likely to bring more worrying signs that the effects of global warming are already upon us. The question, are we acting fast enough, is central. Nevertheless, private sector sustainability progress, accelerated by governmental action, is likely to make 2016 and exciting year of change. As the report states, companies that have still failed to begin their sustainability journey will increasingly find themselves in the minority.

The Year Ahead
Category: Blog, Sustainability 21 Jan 2016

Well we probably don’t have a better crystal ball than anyone else in the field, but we do have a few ideas of what might be in store for corporate sustainability in 2016. We think you’ll be seeing:

  • More focus on carbon.  After COP21, companies will shift more resources toward setting internal prices on carbon, creating GHG inventories (including complete value chain inventories), crafting GHG mitigation strategies and investing in carbon offsets
  • Water, water, water. Water availability and quality are threatened just about everywhere – a real risk for corporate supply chains, revenue streams and workforce stability. Watch for companies to use water footprint and geographic risk tools to get a handle on where risks lie and gain focus on “embedded” water – water that’s in the materials and goods they acquire from suppliers. You’ll also see more collaboration with regional/local regulators and other key water-focused stakeholders.
  • Human rights violations = continued frustration. Conflict minerals, labor strife, human trafficking – enough already! This thorny area is not getting better, despite the current compliance protocol (codes, audits and self-audits). More industry collaborations, more heat from regulators and stakeholders and more investment in transparency.
  • Collaboration. Easily said, not so easily well done. Nonetheless, we’ll see more collaboration up and down verticals, more work with NGOs and other experts.
  • Opportunity knocks. Although still pretty firmly seen through a risk lens, corporate sustainability will increasingly lend itself to being understand as an opportunity area as well. Some examples: game changers in biomimicry and bio-substitution to address chemicals/toxins and recyclability issues; even more energy efficiency in the built environment and manufacturing processes (including better integration of alternative energy sources); CSR getting real about improving the lives of those most vulnerable to human rights abuses.

We could by 100% wrong. However “right” we end up being, 2016’s sure to be an interesting year!

2015: A Defining Year for Climate Change
Category: Blog, Legislation, Sustainability 09 Jan 2016

CC2015 was a significant year for climate change, with both positive and negative aspects. Record temperatures added to the increasing evidence that the effects of global warning are already being felt. Simultaneously, the Paris climate agreement and new levels of legislative and private sector action made for an encouraging trend of an increase in meaningful action.

It was yet another year of record breaking temperatures across the globe. Winter in the Northern Hemisphere brought extreme snowfalls and unusually low temperatures, particularly in the US and Canada. Summer then saw record heat across a number of continents. These trends were compounded by extreme weather, including flooding, fires, draught, and other damaging events, bringing the fact that climate change is already having a dangerous impact on local weather systems into sharp perspective.

It was also a significant year for renewable energy, as the price of solar power dropped considerably. However, at the same time, renewable energy’s ability to be competitive was affected by low oil prices caused by a global surplus. This price drop had a negative impact on the North American oil industry as heavily debt-ridden companies struggled to stay afloat. In a further blow to the North American industry the Obama administration rejected the Keystone pipeline on environmental grounds. However, globally, cheap oil meant a slow down in the transition to renewables. These factors combined for an overall mixed year for renewable energy outlook.

2015 was perhaps most noteworthy as a defining year for global climate action. Many countries made pledges and outlined strategies. The US in particular took practical steps with the use of Obama’s executive orders. Meanwhile, Pope Francis threw his support behind climate change action, taking global interest to new levels. This global action culminated with the COP21 in Paris where a landmark agreement was finally made between the world powers.

2016 will reveal whether or not these agreements and pledges will translate into meaningful action as the damaging impacts of climate change continue to emerge.

 

 

COP21 Marks New Level of Private Sector Climate Change Action
Category: Blog, Carbon Footprint, Green Business, Legislation 22 Dec 2015

ParisEarlier this month, over 190 countries came together in a groundbreaking agreement to limit harmful climate change. While the most publicized success of the COP21 agreement centered on the cooperation of global governments, the conference was also significant for global business.

Over 5,000 companies from around the world, making up approximately half of the global GDP, made climate pledges. While public sector cooperation is legally and symbolically important, this corporate engagement is also crucial to progress against climate change. The private sector is capable of adapting much faster than government and is key to the technological improvements needed to shift away from a Carbon-based economy.

There is strong evidence that companies will translate these pledges into action. For example, during the COP21 talks, a coalition of businesses announced plans to restore forest cover to 1990 levels by 2050. In another example, Unilever and Marks & Spencer’s revealed their strategy to prioritize the sourcing of sustainable palm oil, beef, paper and other commodities. The level of specificity in these goals demonstrates the seriousness of the businesses involved.

The private sector’s deep engagement with the COP21 process has tied global business to the success and collaborative spirit of the landmark agreement in Paris. Companies that remain inactive now risk being viewed as outsiders, part of a dissenting minority acting against positive global action. In this sense, COP21 marks a new level of public relations risk for companies that fail to act. More than ever, climate action engagement is a necessity in the modern private sector.