China’s Belt & Road Risks Environmental Ruin

Crowd in Hong Kong, July 1, 2014 (Photo by doctorho) Creative Commons license via Flickr

Crowd in Hong Kong, July 1, 2014 (Photo by doctorho) Creative Commons license via Flickr

By Sunny Lewis

CAIRNS, Australia, August 30, 2018 (Maximpact.com News) – A global expert on infrastructure warns that China’s plan to string massive transportation and energy projects halfway around the Earth is “environmentally the riskiest venture ever undertaken.”

China's President Xi Jinping at the 10th BRICS Summit at the Sandton Convention Centre, South Africa. BRICS is an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. July 26, 2018 (Photo courtesy Government of South Africa)

China’s President Xi Jinping at the 10th BRICS Summit at the Sandton Convention Centre, South Africa. BRICS is an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. July 26, 2018 (Photo courtesy Government of South Africa)

China’s President Xi Jinping at the 10th BRICS Summit at the Sandton Convention Centre, South Africa. BRICS is an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. July 26, 2018 (Photo courtesy Government of South Africa)

China’s President Xi Jinping proposed the idea of a new “Silk Road Economic Belt” five years ago. Now known as the Belt and Road Initiative, the project includes the building of new roads, railway lines, and ports in the Pacific and Indian Oceans, and the creation of oil and gas pipelines to Russia, Kazakhstan, and Myanmar.

“China has enormous ambitions,” said lead author and Distinguished Research Professor Bill Laurance from James Cook University in Cairns, Australia. “But with that comes enormous responsibilities.”

Writing in the journal “Nature Sustainability,” Professor Laurance joined an international team urging China to undertake “rigorous strategic planning” before embarking on its Belt and Road Initiative, which is supposed to span at least 64 nations across Asia, Africa, Europe and the Pacific.

“The Belt and Road Initiative will greatly influence the future of global trade. However, it may also promote permanent environmental degradation,” wrote Laurence and his co-authors, who hail from Australia, China, Germany, Portugal, Canada, and the United States.

They called for “rigorous strategic environmental and social assessments, raising the bar for environmental protection worldwide.”

The Belt and Road Initiative (BRI) has two parts. The economic belt is made up of six corridors that direct land-based trade to and from China with roads, railways, bridges and power plants. The second part, the maritime silk road, is a chain of seaports from the South China Sea to the Indian Ocean that will facilitate ocean-going trade to and from China.

China is loaning trillions to countries that will host these projects. By mid-century, the Belt and Road Initiative could involve 7,000 infrastructure projects and US$8 trillion in investment, Laurence and his team of researchers said.

Henrique Pereira, a co-author with the Research Center in Biodiversity and Genetic Resources in Portugal, warns that the exploitation of oil and gas reserves through the BRI will mean greater reliance on fossil fuels.

“Raw materials and fossil fuels use, and increased oil and gas reserves exploitation constitute a scenario of an increasing dependency on fossil-fuel and high greenhouse gas emissions,” Pereira said.

The World Wildlife Fund (WWF) undertook a spatial assessment of the possible impacts of the Belt and Road Initiative on habitats.

The global conservation group warns that the initiative could impact over 1,700 critical biodiversity areas and hundreds of threatened species.

“We found BRI corridors overlap with the range of 265 threatened species including saiga antelopes, tigers and giant pandas,” said WWF.

BRI corridors also overlap with 1,739 Important Bird Areas or Key Biodiversity Areas and 46 biodiversity hotspots or Global 200 ecoregions, the conservation group reports.

In April, 27 out of 28 European Union ambassadors to China signed a report criticizing the Belt and Road Initiative. The Hungarian ambassador was the only exception.

The ambassadors’ main critique of the Initiative is that it “runs counter to the EU agenda for liberalizing trade and pushes the balance of power in favor of subsidized Chinese companies.”

But China shrugged off their concerns. The report, “does not conform to the facts,” Hua Chunying, the ministry spokesperson, told a press briefing in Beijing.

Chinese President Xi Jinping said Monday at a seminar in Beijing to mark the five-year anniversary of his signature project, that the Belt and Road Initiative is an economic cooperation proposal, not a “China club.”

President Xi said China welcomes any interest in the plan, as the BRI is not a geopolitical coalition, military alliance or exclusive circle. “We do not demarcate by ideology and do not play zero-sum games,” he stressed.

But not everyone is a critic. Malaysian Prime Minister Mahathir Mohamad said on Sunday that he has a positive attitude towards the Belt and Road Initiative and hopes that Malaysia will maintain a friendly and cooperative relationship with China.

The Malaysian leader made the remarks during a speech to local entrepreneurs in Beijing, during which he welcomed the investment of Chinese businesses in his Southeast Asian nation.

In 2016, President Xi called for the Belt and Road Initiative to be “green, healthy, intelligent and peaceful,” adding that participating countries should “deepen cooperation in environmental protection, intensify ecological preservation and build a green Silk Road.”

“China claims its Belt and Road will be a blueprint for responsible development, but that’s going to require it to fundamentally change the way it does business internationally,” said Professor Laurance.

“Too many Chinese firms and financiers operating overseas are poorly controlled by their government, in large part because they are so profitable,” he said.

“In the last two decades I’ve seen countless examples of aggressive and even predatory exploitation by Chinese firms, especially in developing nations with weak environmental controls.”

Distinguished Research Professor Professor Bill Laurance from James Cook University in Cairns, Australia (Photo courtesy JCU)

Distinguished Research Professor Professor Bill Laurance from James Cook University in Cairns, Australia (Photo courtesy JCU)

Professor Laurance and his co-authors say China has a unique opportunity to change its model of development and become a world leader in sustainability.

“China is doing a much better job of improving environmental safeguards inside China than internationally,” said Professor Laurance.

“It’s produced a mountain of green documents and promises about the Belt and Road, but a leopard doesn’t just change its spots overnight.”

“China has a unique opportunity,” said Laurence, “but if it’s business as usual then I think the costs for the environment and economic risks for investors could be flat-out scary.”


Fund_NGO

Sustainable Development = Happiness

Delegates at the opening session of the 2018 High-level Political Forum on Sustainable Development, UN Headquarters, New York, July 9, 2018 (Photo by Kiara Worth courtesy Earth Negotiations Bulletin) Used with permission

Delegates at the opening session of the 2018 High-level Political Forum on Sustainable Development, UN Headquarters, New York, July 9, 2018 (Photo by Kiara Worth courtesy Earth Negotiations Bulletin) Used with permission.

By Sunny Lewis

NEW YORK, New York, July 10, 2018 (Maximpact.com News) – “It is literally the truth, that sustainable development is the path to happiness,” Professor Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, told this year’s meeting of the High-level Political Forum on Sustainable Development (HLPF) that opened on Monday at UN Headquarters in New York.

In the days between now and July 18, the HLPF will bring together more than 1,000 government, business and civil society leaders. More than 80 ministers and vice‑ministers will be attending the Forum, as well as 2,500 no‑state actors.

They will evaluate the progress made by dozens of countries towards the 17 Sustainable Development Goals (SDGs) – unanimously adopted by the United Nations’ 193 Member States in 2015 – to determine what is and what is not working, based on UN Secretary-General António Guterres’ annual progress report.

HLPF is the official forum to review progress towards the goals, and, under the theme, “Transformation towards sustainable and resilient societies,” this year’s Forum focuses on six of the 17 goals: SDGs 6 (water), 7 (energy), 11 (cities), 12 (consumption and production), 15 (terrestrial ecosystems), and 17 (partnership).

The Forum meets annually under the auspices of the UN Economic and Social Council (ECOSOC), including a three-day ministerial segment. It will meet once every four years at the level of Heads of State and Government under the auspices of the UN General Assembly.

During the 2018 Forum, 47 countries are sharing their experiences, including the successes, challenges and lessons learned.

“The goals are this generation’s only hope for creating peaceful, safe, fair and sustainable societies,” said Sachs. “We have to make them work, but the biggest obstacle is greed.”

Sachs told of the greed and vested interests of coal, oil and gas companies, and he called out the global food industry’s unsustainable supply chains and unhealthy products.

Citing parallel sustainable development and happiness rankings, Sachs observed that the list of the top 10 countries closest to achieving the goals mirrors a complementary ranking of the world’s happiest countries.

Sustainable development promotes wellbeing and happiness, said Sachs, while tax cuts for the rich undermine infrastructure, education and health services.

He called on rich countries and individuals to address the gap of US$200 billion in financing to achieve the SDGs, by:

  • increasing official development assistance;
  • using one percent of the wealth of the world’s 2,208 billionaires to ensure education for every child and universal health care access;
  • closing down off-shore tax regimes, and and taxing the $20 trillion held in offshore accounts in a “tax haven archipelago” designed by the United States, the United Kingdom and others.
  • taxing the five big technology monopoly companies given their use of public data;
  • taxing financial transactions;
  • establishing a global carbon tax; and
  • adopting measures to address tax evasion.

Sachs said that there are enough resources in the world for everyone to live free of poverty and it should not require a big effort on the part of large developed countries, to profoundly help those struggling in poverty.

Most important is quality education, declared Sachs, followed by universal access to health care, clean energy “without which the planet will be wrecked,” sustainable land and food, smarter cities with decent infrastructure, and proper use of digital technologies.

The aim is to ensure that every child has a future. Otherwise, he said, “we don’t have a future.”

He said Sweden is the country most on course to achieving the SDGs, and that Europe is to date “by far” the region doing the best.

The happiest countries are the ones that tax themselves the most, he said, pointing out that Swedes think it is a good thing to pay half their national income to finance quality education and healthcare.

Left, Marie Chatardová, President, UN Economic and Social Council (ECOSOC), right, Liu Zhenmin, UN Under-Secretary-General, Economic and Social Affairs, UN Headquarters, New York, July 9, 2018 (Photo courtesy Earth Negotiations Bulletin) Used with permission

Left, Marie Chatardová, President, UN Economic and Social Council (ECOSOC), right, Liu Zhenmin, UN Under-Secretary-General, Economic and Social Affairs, UN Headquarters, New York, July 9, 2018 (Photo courtesy Earth Negotiations Bulletin) Used with permission

The United States, on the other hand, is “all about tax cuts for rich people,” Sachs declared. “To achieve sustainable development, you have to pay for it,” he said, adding that tax cuts for the rich stifle sustainable development.

The Bertelsmann Stiftung and the Sustainable Development Solutions Network Monday released the 2018 SDG Index and Dashboards Report, “Global Responsibilities: Implementing the Goals,” which tracks data on how all 193 UN member states are progressing towards the Sustainable Development Goals.

This year, three Nordic countries, Sweden, Denmark and Finland, top the global SDG Index ranking, yet all three still face major challenges in achieving the goals. Sweden, for instance, scores red on sustainable consumption and production as well as greenhouse gas emissions.

As the trends data show, Sweden is making progress towards achieving the goals, but it’s not on track to meet the climate SDG 13 or to make land-use and food systems sustainable (Goals 2 and 14).

Forum participants say progress has been made on achieving the goals of ending poverty and hunger, but meeting the targets by the 2030 deadline will require more effort.

“It will require policy makers’ unwavering attention, a laser-sharp focus on implementation of these goals, and a true sense of urgency,” said Liu Zhenmin of China, the UN Under-Secretary-General of Economic and Social Affairs.

“We have only 12 more years to fully realize this transformative agenda, but these goals are absolutely within our reach,” he told the conference.

Introducing the UN Secretary‑General’s report on progress towards the Sustainable Development Goals , Liu cited gains in lowering maternal and child mortality and challenges such as climate change consequences and conflict that are obstructing progress.

He pointed out that few developing countries have fully funded statistical plans and the share of official development assistance for statistics has been just 0.3 percent since 2010. Liu said “to understand accomplishments and setbacks and chart our way forward, we need reliable, timely, open and disaggregated data to inform all our actions.”

“It has been three years since world leaders committed to end poverty and hunger, to protect our planet, to foster peaceful societies, and to unleash economic, social and technological progress – and in implementing this vision they committed to reach those furthest behind,” Liu said.

For the first time in more than a decade, there are now approximately 38 million more hungry people in the world, rising from 777 million in 2015 to 815 million in 2016.

According to the Secretary‑General’s report, conflict is now one of the main drivers of food insecurity in 18 countries.

In 2017, a record 68.5 million people around the world have been displaced by persecution, conflict and mass atrocities.

Also in 2017, the world experienced the costliest North Atlantic hurricane season on record, driving the global economic losses attributed to disasters to over $300 billion.

Yet many people are living better lives than they were a decade ago, even in regions facing the greatest development challenges, the Index shows.

The proportion of the world’s workers and their families now living below the extreme poverty line has dropped from 27 percent in 2000 to nine percent in 2017, Liu noted.

“However, drought and disasters linked to climate change, and surging conflicts in parts of the world, are hindering faster progress,” Liu warned.

ECOSOC President Marie Chatardová of the Czech Republic, who is chairing the meeting, said that achieving the goals requires more than just the “dedication and good will” of governments.

“We explored how civil society, the private sector, academia and other actors can help move the SDGs forward,” she said.

“The worst thing is not that the world is unfree, but that people have unlearned their liberty,” said Chatardová, quoting the Czech author Milan Kundera, adding that “too many people have unlearned their right to engage in policy and decision making.”

Chatardová said she expects that the Declaration, an outcome document to be adopted at the end of the Forum, will present a strong political message on the international community’s unwavering commitment to realize the aspirations of the 2030 Agenda.

Featured Image: Professor Jeffrey Sachs of Columbia University’s Center for Sustainable Development addresses the opening session of the HLPF, holding aloft the 2018 SDG Index and Dashboards Report, “Global Responsibilities: Implementing the Goals,” which tracks data on how all 193 UN member states are progressing towards the Sustainable Development Goals. UN Headquarters, New York, July 9, 2018 (Photo by Kiara Worth courtesy Earth Negotiations Bulletin) Used with permission


MAXIMPACT_TRAINING

Corporate Integrity Yields Financial Rewards

By Sunny Lewis

NEW YORK, New York, February 13, 2018 (Maximpact.com News) – It’s that time of year. The lists ranking the world’s 135 most ethical corporations and the world’s 100 most sustainable corporations have come out, and there’s a world of difference between them, with just five listings in common.

2018 World’s Most Ethical Companies

The list of the world’s 100 most ethical corporations is published by The Ethisphere Institute, based in New York City, which has issued a list every year since 2006. The list for 2018 was published on Monday.

The 135 companies on the 2018 list span 23 countries and 57 industries.

Tim Erblich is the CEO of the Ethisphere Institute. (Photo courtesy Ethisphere Institute) Posted for media use

Tim Erblich is the CEO of the Ethisphere Institute. (Photo courtesy Ethisphere Institute) Posted for media use

Ethisphere CEO Timothy Erblich said, “2017 was quite a year. While the discourse around the world changed profoundly, a stronger voice emerged. Global corporations operating with a common rule of law around the globe are now society’s strongest force to improve the human condition.”

Erblich says that corporations that operate ethically also reap the greatest financial benefits.

“The 2018 World’s Most Ethical Companies have proven that operating with integrity leads to greater financial performance,” he said. “Research has found that, when indexed, listed World’s Most Ethical Companies outperformed the U.S. Large Cap Index over five years by 10.72 percent and over three years by 4.88 percent.”

Values-based leadership leaped to the forefront of business strategy, and companies increasingly discussed their purpose in broad, community-focused terms. Diversity and inclusion, investment and long-term commitment, and constructive use of a company’s voice are now the hallmarks of what stakeholders are expecting and investors are rewarding.

The 2018 World’s Most Ethical Companies responded to this opportunity quickly, the Ethisphere Institute says. “Record metrics of community support and innovative ways to engage and inspire employees, customers and stakeholders typified this year’s honoree.”

The World’s Most Ethical Companies list is based upon the Ethics Quotient® framework, which quantitatively measures a company’s performance in an objective, consistent and standardized manner.

Scores are generated in five categories: ethics and compliance program; corporate citizenship and responsibility; culture of ethics; governance; and leadership, innovation and reputation.

“We are honored to be listed among the World’s Most Ethical Companies for the fifth consecutive year,” said Dell Technologies Chairman and CEO Michael Dell. “Ethics and integrity matter at Dell. We work hard to earn our customers’ trust, improve our communities and inspire our team members through sound, ethical decision-making. Because at Dell, how we do our work is just as important as the results we achieve.”

From Sweden, Volvo Cars President and CEO, Håkan Samuelsson said, “An ethical approach to business is not only the right thing to do, but also brings financial value and helps attract and retain the best talent. We are proud that we have been recognized as one of the World’s Most Ethical Companies for the second consecutive year.”

From Mexico City, where it operates a Mexican multinational bakery, Grupo Bimbo CEO Daniel Servitje said, “Integrity should not only be understood as compliance with the law, rules and procedures; it goes beyond that – it is part of the culture. Ethics is good for business, as it strengthens morale, improves efficiency and sustains the most important asset for any market: trust.”

The full list of the 2018 World’s Most Ethical Companies is here.

Global 100 Most Sustainable Corporations

The 2018 Global 100 Most Sustainable Corporations in the World index is published by Corporate Knights Inc. based in Toronto, Ontario, Canada.

It includes the business and society magazine “Corporate Knights” and a research division that produces rankings and financial product ratings based on corporate sustainability performance.

Corporate Knights released the 14th annual Global 100 list of the most sustainable large corporations in the world at the World Economic Forum in Davos, Switzerland on January 23.

Selected from a pool of 5,994 publicly listed companies – each evaluated on a set of up to 17 environmental, social and governance indicators relative to their industry peers using publicly available information – the

Global 100 companies hail from 22 countries and encompass all sectors of the economy.

The Global 100 companies demonstrate the strong linkage between the delivery of superior value for society and the generation of superior financial performance.

The top-ranked company in this year’s Global 100 most sustainable corporations is Dassault Systèmes, the French multinational software company, whose digital technologies assist companies and governments in reducing waste, adopting renewables, and creating smarter cities.

Finishing 11th last year, Corporate Knights says Dassault’s climb is due to strong female representation on the board, six of 11 current directors; a relatively small pay gap between the CEO and average worker (30:1); and a strong financial contribution to society through taxes. Dassault Systèmes also pulls in a quarter of its revenues from products and services that preserve the environment.

In the number two position is Finland’s Neste Oil, a refining and marketing company that has begun directing more than 90 percent of its investments into renewable fuel and bio-based materials, putting it on track to earn over half its revenues from clean sources in the next five years.

In third place is another French company, automotive supplier Valeo, which has placed a strong emphasis on helping automakers reduce carbon emissions.

Belgian pharmaceutical corporation UCB and Finnish construction and engineering firm Outotec round out the top five.

The Global 100 companies paid an average of 27 percent more taxes, had three times as many top female executives, and generated six times more clean revenue than their global peers.

For full rankings, methodology details and additional comparators and breakdowns, click here.

Five Corporations Appear on Both Lists

The five companies honored by both ranking organizations – two from the United States and one each from Brazil, Finland and France – are, in alphabetical order:

  • 1) Applied Materials, based in Santa Clara, California, in the Silicon Valley, creates materials engineering solutions used to produce virtually every new chip and advanced display in the world.

Steve Adams, vice president, Litigation, Protection and Compliance at Applied Materials, said, “Ethical business conduct at Applied Materials extends far beyond a set of rules or policies; it is engrained in our values and reflected in the actions of our employees every day.”

  • 2) Intel, also headquartered in Santa Clara, California, in the Silicon Valley, is the world’s second largest and second highest valued semiconductor chip makers based on revenue, after being overtaken by Samsung. Intel is the inventor of the x86 series of microprocessors, the ones found in most personal computers. Intel supplies processors for computer system manufacturers such as Apple, Lenovo, HP, and Dell.

Intel will make history during the Winter Olympics by powering the largest scale virtual reality Winter Olympics event to date. Together with rights-holding broadcasters, Intel will capture a record 30 Olympic events that will go live on the NBC Sports Virtual Reality app for all fans to experience as if they were there.

  • 3) Natura Cosmeticos, based in Cajamar, Brazil, manufactures and markets beauty products, household, and personal care, skin care, solar filters, cosmetics, perfume and hair care products in 70 countries. This company markets through The Body Shop, among others.

Natura’s “Enrich, Not Exploit” commitment is a global program with 14 sustainability goals for the year 2020.

  • 4) The Nokia corporation , headquartered in Espoo, Finland, manufactures communications equipment that transforms how people capture and share their moments through intelligent audio, imaging and video technologies.

The company is working on the frontiers, from the enabling infrastructure for 5G and the Internet of Things, to emerging applications in virtual reality and digital health, Nokia works in more than 100 countries.

Nokia President and CEO Rajiv Suri said, “We take very seriously the risks of climate change and the depletion of natural resources. The company “worked tirelessly to support our customers in reducing their environmental impact by improving the energy efficiency of our products,” said Suri.

“We also continued to expand our zero CO2 emissions offering, said Suri. “Today, 120 customers use at least one zero emission product or service, and 104 customers use renewable energy sources through Nokia. And we work hard in our own operations to reduce our environmental impact. In 2015, Nokia’s facility emissions decreased by 14 percent.

  • 5) Schneider Electric, based in Rueil-Malmaison, France, appears on both lists. Schneider creates the digital transformation of energy management and automation in homes, buildings, data centers, infrastructure and industries.

In over 100 countries, Schneider provides power management – medium voltage, low voltage and secure power, and  automation systems, combining energy, automation and software.

2018 is the eighth consecutive year that Schneider has appeared on the Ethisphere Institute’s list of the World’s Most Ethical Companies.

Emmanuel Babeau, Schneider’s deputy chief executive officer in charge of Finance and Legal Affairs, said, “This award remains just as important the eighth time as the first.”

“Schneider Electric does not take this kind of recognition for granted,” said Babeau. “It reflects our efforts to press ahead with our corporate, social and environmental responsibility strategy and deliver what our stakeholders expect from us – the guarantee of innovative solutions produced by a company people are proud to be associated with. Our ethical credentials are increasingly important to clients in particular.”

Schneider’s Green Premium ecolabel brings complete environmental information to everyone, from homeowners, building managers and architects, to its distributors and OEM partners.

Building trust is central to the modus operandi of all the corporations on both lists.

As Microsoft President Brad Smith said, “At Microsoft, trust and integrity are core to our values and critical to our success. We’re passionate about applying the power of technology to improve our world, and that starts with doing business in a way that builds and maintains trust with our customers. Microsoft is honored to be named once again to the World’s Most Ethical Companies by Ethisphere because it reflects our passion to make a lasting impact on the world around us.”


Featured image : An Intel 40486 microprocessor circuit on a silicon wafer, part way through the manufacturing process, Feb. 9, 2018 (Photo by Bill Smith) Creative Commons license via Flickr

Sustainability Reporting Framework 101

Mumbai, INDIA , September 8, 2017 Guest Contributor Vikram Shetty CEO 73bit Information Technology and Services.

A sustainability report is the key platform for communicating sustainability performance and impacts — whether positive or negative. It also helps topics that are relevant to the organization and prioritize those topics that are “material”. Another source of sustainability measures comes from companies’ reporting standards such as the triple bottom line accounting, as a growing body of firms and public institutions systematically reveal information about their environmental and social performance beyond the traditional financial statement.

Types of Reports

There are many different terms used to report namely Sustainability report, Non-financial report, Triple bottom line report, Corporate social responsibility (CSR) report, Assessment report, Benchmark Report, Transparent Report, Corporate Report, Responsibility Report and many more.

Over past several years, the various parties involved in developing the reporting frameworks have been working together to align their language and approach, and there are increasingly valuable synergies between the frameworks, which should make it easier for companies to evaluate and apply them while also reducing the amount of work and redundancy.

Corporate Social Responsibility (CSR) is most commonly known term. CSR is defined as “Enterprise should have a process in place to integrate social, environmental, ethical and human rights concerns into their business operations and core strategy in close collaboration with their stake holder.”

History of Reporting

Events 1960 to 1980

The upshot was the US Clean Air Act in 1970 and Clean Water Act in 1972. US society in the 1960s and into the 1970s was concerned about social issues — women’s rights, racial equality and world peace — which became a focus of corporate reporting. In UK and USA, deregulation and economics were emphasised over other issues. Correspondingly, social reporting waned during the 1980s.

Events 1980 to 2000

Chemical corporations pooled together to develop ‘Responsible Care’ programs in an attempt to avert government regulation. Responsible Care was launched in 1985 by the Canadian Chemical Producers’ Association (CCPA).

In 1991, Germany passed the Ordinance on the Avoidance of Packaging Waste under the German Waste Act, which held producers responsible for packaging waste. Denmark has required some corporations to disclose environmental consequences in annual reports since 1999.

In the mid-1990s, John Elkington, co-founder of the business consultancy SustainAbility, coined the concept of the ‘triple bottom line’ (Elkington 1998). The basic idea is that financial results do not provide a comprehensive summary of performance.

Events Post 2000

In 2000, GRI launched the first version of the Guidelines, representing the first global framework for comprehensive sustainability reporting. In 2002, about 70 per cent of the reports were published as Environmental Health and Safety reports; in 2005, about 70 per cent were published as Sustainability Reports.

The number of corporations providing CSR information continues to increase. In 2005, 64 per cent of the G250 corporations provided CSR reports, either standalone or as part of their annual reports. KPMG’s 2008 survey shows that nearly 80 per cent of the G250 provide CSR reports

Development of a framework for integrated reporting is led by the IIRC. The IIRC (2011) describes Integrated Reporting. An example of a company at the forefront of integrated reporting is Novo Nordisk, a Danish pharmaceutical company that is a world leader in diabetes care. Novo Nordisk has over 32,000 employees, working in 75 countries, and its full 2011 report is available at Novonordisk

New Generation Reporting

On September 25th 2015, countries (around 200 countries were in the UN when Sustainable Development Goals was adopted)adopted a set of goals to end povertyprotect the planet, and ensure prosperity for all as part of a new sustainable development agenda. Each goal has specific targets to be achieved over the next 15 years. It is called as Sustainable Development Goals (SDG)

Reporting Life Cycle

Companies needs to first decide on which sustainability goals they want to report. We need to identify the Key Performance Indicators. If you are a team who offer Sustainability reporting or benchmarking services in specific industry then you would already have questionnaires or performance indicators.

A reporting cycle is usually One year. There can be variations however it is aligned with the financial reporting cycle. Since financial reporting cycle is normally a year in any country. The few stages in the Cycle from the reporter’s point of view are mentioned below:

  1. Preliminary questionnaire preparation.
  2. Data Collections from individual / multiple stakeholders.
  3. Review and correct the collected data.
  4. Analyse and format with communicating information.
  5. Create report in meaningful and common language.
  6. Publish the report to all stakeholders.

Pilot phase

Each stage has different activities and outcomes which needs different skills and timelines. One of the ways to experience the whole cycle is to start with Pilot Phase. This is a most common practice used by many to kick start the reporting cycle. It consists of a smaller questionnaire for few departments or companies depending on your size and kind of service you are providing for reporting. It becomes easy to create a small initial set of questions. This is followed by collecting the data from the respective team or person. Thus helping the team creating the report (reporters) to work with a small amount of data and with fewer member in a team. This will make it easier when your real questionnaire goes live- you can also test functionalities. It is also a good way to test your online tool/framework/software use to collect the data, analyse and report. It is not compulsory to have a online tool, It can be done by collecting data using word/excel documents via emails and doing all calculations manually. However it is recommended to have a tool for detail analysis of the data collected and to create comprehensive reports using the information in hand.

Recommended good practice for preparing questions and collecting data

  1. Create a plan on the timeline for collection data through surveys, analyzing data and for creating reports. Thus, giving the team enough time to make sure the data is correct.
  2. Try to create more simple questions and question structure. Thus making it easy for both the stakeholder to fill in and reporter to review and revert.
  3. If possible, have a kickoff online webinar to explain the questions and the structure with stakeholders. Let them know what is expected in the respective section.
  4. Keep the list of all concerned team to notify them once the reporting cycle starts and the instructions to fill in the survey.
  5. Stakeholders should only see the relevant questionnaire set which are specific concern to them.
  6. Periodically follow up with teams and doing a spot check to see if the data is filled correctly. Also, make sure that the team is not facing any challenges filling the survey.
  7. Appropriate alerts and notifications are in place once the stakeholder has completed the survey.
  8. Once the survey (data collection phase) is done the stakeholders should not be allowed to modified the data. Thus allowing reporters to work on final data submitted by the stakeholder.

There are many industry practices out there. Above are the few mentioned with respect to someone who is new to reporting cycle.

There are generally two kind of data that is collected while reporting namely Qualitative data and Quantitative data.

Qualitative data is information about qualities; information that can’t actually be measured. Some examples of qualitative data are “what are the principle towards sustainability?”, “what is the companies motto?” and so on.

Quantitative data is information about quantities; that is, information that can be measured and written down with numbers. Some examples of quantitative data are “total number of employees”, “Reporting period”, “Percentage of recycled input materials used”, “Return to work and retention rates of employees that took parental leave”, “ Total number and nature of confirmed incidents of corruption” and so on. The advantage of quantitative data is useful in representing them graphically and via charts. It can be also used in comparative analysis. A benchmarking report is slightly different in that it provides peer comparison, which a sustainability report does not. However, both kinds can be used to track and show year-on-year progress,

Few tricks for working with quantitative data

  1. Make use of sub totals and totals in your final reports or in summary
  2. Take Averages by categories/industries, it will help you represent same data for multiple audiences
  3. Display them in tabular formats for summary information to give an overall picture.
  4. Create derived data form the raw data. For example Ranks, Quintile, etc
  5. Make good use of charts and graphs to represent data.

Advantages of Reporting

There are direct benefits to your organisation in the measuring and reporting of environmental performance as it will benefit from lower energy and resource costs gain, a better understanding of exposure to the risks of climate change and demonstrate leadership, which will help strengthen your green credentials in the marketplace. You should find it helpful to use environmental KPIs to capture the link between environmental and financial performance. Investors, shareholders and other stakeholders are increasingly requesting better environmental disclosures in annual reports and accounts.

Expanding upon how these frameworks can help in developing corporate programs, these frameworks and initiatives can also help push for transparency regarding management strategies and measurable actions. Furthermore, they can help companies target areas that will have significant and meaningful impact that ultimately translate to value for our customers and stakeholders. And that is where the true value lay.

Apart from monetary benefits the reports can provide in terms of explaining the impact on the environment and society in general. You can align your purpose as a company or business towards sustainable future. Thus being a part of the new revolution towards making world more sustainable and happier to live.

Hope you continue to do the work that you are proud off!

I want to give special thanks to experts who helped us, name mentioned in alphabetical order (Click on their name below to visit their profile):

Simona Kramer : Junior researcher at Access to Nutrition Foundation

Thomas Colquhoun-Alberts : Benchmark and Knowledge Manager at Business in the Community

There are many web resources I have used to create this post. Thanks to all who are publishing information towards Sustainability. Few are mentioned below:

Sustainability reporting: past, present, and trends for the future  Insights  and The University of Melbourne.

Genuine Sustainability Attracts Savvy Investors

RockTennWaste

RockTenn, based in Norcross, Georgia, one of North America’s leading manufacturers of corrugated and consumer packaging, has been focused on reducing the amount of solid waste it sends to landfills. By engaging employees from every department, such as finishing inspector Byron Manning, at one of the company’s packaging factories, RockTenn recycles much of its process waste. (Photo courtesy RockTenn)

By Sunny Lewis

BOSTON, Massachusetts, May 26, 2016 (Maximpact.com News) – Attracting “sustainability-savvy investors” entails much more than conserving a little energy or doing a little recycling.

“Investors want to be sure that a company’s sustainability efforts are focused on the material issues that affect its ability to thrive and survive,” advises Boston Consulting Group’s latest sustainability report , authored in collaboration with MIT Sloan Management Review and published earlier this month.

These investors want to know “the business specifics of how sustainability is creating value for the companies they invest in. A host of factors drives that value, ranging from reduced costs of capital to greater innovation.

Based on a survey of more than 3,000 executives and managers from more than 100 countries, the report is titled, “Investing for a Sustainable Future: Investors Care More About Sustainability Than Many Executives Believe.”

Today’s investors have access to richer data and more sophisticated analytics than the investors of the past and their opinions are better grounded in accurate information. As a result, 75 percent of investors now think that increased operational efficiency often accompanies sustainability progress.

The research showed that although 90 percent of executives see sustainability as important, only 60 percent of companies have a sustainability strategy in place, and just 25 percent have developed a clear sustainability business case as a compelling story to woo investors.

The report advises, “Executives who want investor support need to develop and tell their sustainability value-creation story. That value, according to our survey, stems from three interrelated components: a sustainability strategy, a clear business case, and business model changes that realize the benefits.”

The report uses General Electric as an example. In 2004, the company embraced sustainability as a growth driver by establishing Ecomagination brands, focused on environmental safety.

During the recent global economic crisis, these brands were GE’s only source of growth. They grew by 12 percent while other revenues shrank by 2 percent. In 2010, Ecomagination products drove $85 billion in revenue. By 2014, the number had jumped to $200 billion.

Managing sustainability well can attract investors, the authors conclude, using Mitsubishi Corporation as a case in point.

In 2015, Mitsubishi announced that it was making a $1.1 billion investment in Olam International, an agricultural trading company based in Singapore.

Many believed that the purchase was driven by Mitsubishi’s desire to capitalize on growing incomes and consumption in emerging markets. But Mitsubishi was  drawn to the company’s sustainability footprint and its expertise in working with small farmers and producers in remote areas of Asia and Africa.

And on the bottom line – a profit. Olam’s sustainability footprint drove a 29 percent premium over the company’s 2014 average share price.

Earning a reputation as a sustainable business isn’t enough any more either – the reputation doesn’t seem to be as important to investors as how a company uses sustainable practices to create value.

Dow Jones has offered a sustainability index since 1999, and the “Financial Times” has produced its FTSE4 Good Index since 2001, but these mainstay indices appear to be losing their luster for investors; corporate executives seem to care more about these lists than investors do.

Look at the responses from managers in publicly traded companies – 32 percent say their company is listed on a sustainability index, but 36 percent didn’t know if their company was listed or not.

Investors care even less. Only 36 percent of investor respondents said that a company’s inclusion in a major index is an important factor in investment decisions.

“One reason is that data in many sustainability indices is self-reported and usually vetted for completeness, not accuracy,” the report states.

Corporate leaders may believe their place on these lists or indices has brand reputation value that attracts consumers even if potential investors don’t care about them.

But they may begrudge the corporate time and resources spent filling out sustainability questionnaires, especially if they don’t believe investors impute value to these rankings.

Fifty thousand companies are annually subject to environmental, social and governance (ESG) evaluations by 150 ratings systems on approximately 10,000 performance metrics.

The diversity of organizations and systems, ratings, and metrics has led many corporate sustainability managers to the verge of “survey fatigue.”

Yet sustainability is increasingly important for investors, as evidence mounts that a company’s ESG performance has an impact on long-term financial success.

BCG’s 7th sustainability report with MIT Sloan Management Review found that 75 percent of senior executives in investment firms see a company’s sustainability performance as “materially important to their investment decisions.”

Nearly half would not invest in a company with a poor sustainability track record, yet, only 60 percent of managers in publicly traded companies believe that good sustainability practices influence investment decisions.

ABBRadiationInspection

Inspector John Nicholson with the Nuclear Regulatory Commission and Robert Clark, a radiation control physicist with the Connecticut Dept. of Environmental Protection, at a remediated brook on the ABB, Inc. property in Windsor, Connecticut, take measurements and collect soil samples to verify that the site is clear of radioactive contamination, Sept. 12, 2011 (Photo by Nuclear Regulatory Commission) Public domain


Featured Image: Zond wind turbines rise up amidst a young corn crop at the Buffalo Ridge wind farm in southwest Minnesota. (Photo by Warren Gretz / National Renewable Energy Lab) Public domain

ENVIRONMENTAL PROTECTION TIPS FOR EARTH DAY AND BEYOND

Act Local, Think Global: Three Ways to Ignite Positive Environmental Change

 Arlington, VA – Friday, April 22, 2016 – In observance of Earth Day, the international conservation organization Rare is offering up three easy ways you can be a catalyst for global change.

The strain on the Earth’s natural resources poses an increasing threat to the well-being of both people and nature. Though people are often the source of these pressures, they also hold the solutions – and it all starts with behavior.

Salmon_for_sale1.  Ensure your seafood is sourced sustainably.

42% of people worldwide rely on fish as an important source of protein.

Most of the world’s fisheries are unmanaged and overexploited, and are in serious decline. This puts our food supply in jeopardy and makes ecosystems less healthy and more vulnerable to climate and other changes. A compelling action a single consumer can take is purchasing local, sustainably caught seafood. Check packaging labels, diversify your selection, and seek out seafood guides that list which fish that are caught and sourced sustainably.

Helpful articles on Sustainable Seafood:

2.  Organize or join a community-led clean up near waterways to prevent contamination to rivers, lakes and other fresh water sources.

 Freshwater ecosystems cover less than 1% of the Earth’s surface, but are home to 35% of all vertebrate species.

A healthy watershed, with its forests and unique biodiversity, provides water storage, regulates and filters fresh water and is critical to flood management to surrounding areas. By removing plastics bottles, bags, and other debris along the waterway, you ensure the watershed ecosystem remains healthy and productive.

Helpful Waterways Cleanup resources: 

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3.    Join a Community Supported Agriculture (CSA) and get to know your local farmer, what they grow, and how they grow it.Agriculture is one of the leading sources of water pollution worldwide.

Small-scale farmers often overuse fertilizer, pesticides and other harmful chemicals. This pollution leaches into streams and aquifers with dangerous effects, finding ways into wetland and river ecosystems. Community Supported Agriculture Networks are an easy and delicious way to engage in your community, and encourage others to adopt more sustainable behaviors. Ensuring that your food is grown locally and pesticide-free benefits the health of both people and nature alike.

Helpful Community Supported Agriculture resources: 

“We believe that conservation’s greatest challenges are the result of human behaviors. And, so too are the solutions,” said Brett Jenks, CEO of Rare. “Rare’s signature Pride campaigns inspire pride around unique natural assets and create a clear path for local change.  By empowering communities to seek their own solutions, the change tends to stick.”

Rare has been implementing proven conservation solutions and training local leaders in communities worldwide for more than 25 years.  Rare’s hope is to inspire people to take pride in their community, not just on Earth Day but all year, and suggests these practical alternatives to environmentally destructive practices.


 

Rare-Logo-FullColorABOUT RARE

Rare is an innovative conservation organization that implements proven conservation solutions and trains local leaders in communities worldwide.  Through its signature Pride campaigns, Rare inspires people to take pride in the species and habitats that make their community unique, while also introducing practical alternatives to environmentally destructive practices. Employees of local governments or non-profit organizations receive extensive training on fisheries management, campaign planning and social marketing to communities.  They are equipped to deliver community-based solutions based on natural and social science, while leveraging policy and market forces to accelerate change through programs such as Fish Forever.  To learn more about Rare.

 

Images: Creative commons license via Wikipedia and free stock photos 

Demand for Electric Cars Hits New Highs

AmsterdamCharging

Charging a Nissan LEAF in Amsterdam, the Netherlands (Photo courtesy Heijmans)

By Sunny Lewis

PALO ALTO, California, April 14, 2016 (Maximpact.com News) – Luxury electric automaker Tesla unveiled its latest model at a March 31 event, and demand was so strong for the $35,000 Tesla Model 3 that within the week 325,000 would-be customers purchased preorders at US$1,000 each.

The preorder offering raised US$14 billion, tweeted Tesla founder, chairman, CEO and product architect Elon Musk. He will use funds to finish building an enormous lithium-ion battery factory near Reno, Nevada and begin Model 3 production at the Tesla assembly plant in Fremont, California.

Everyone will have to be patient though – production of the Model 3 is not scheduled to begin until the second half of 2017.

The sheer number of Model 3 orders amazed many people including “EV World” publisher Bill Moore, who wrote to his newsletter subscribers, “The market’s not only ‘spoken,’ it bloody ROARED.”

“Fifteen years ago, some three years after I launched EV World,” wrote Moore, “there were maybe 5,000 OEM-built electric cars on the road in the United States; and roughly a comparable number in Europe, mainly in France.”

Now, he compared, “In just seven days time, Tesla now has pre-orders and $1000 deposits for more than 30 times the number of all the electric cars in the world back just over a decade and a half ago.”

Tesla Model 3s are revealed to an admiring crowd, March 31, 2016 (video courtesy Tesla Motors)

As of March 31, Tesla Motors had sold nearly 125,000 electric cars worldwide since delivery of its first Tesla Roadster in 2008.

The current world leader in zero-emission mobility, the Renault-Nissan Alliance, sold its 250,000th electric vehicle – a white Renault ZOE – in June 2015.

The 250,000th owner is Yves Nivelle, a computer engineer from Bordeaux, who traded in his 21-year-old diesel car for the subcompact Renault ZOE.

Nivelle bought his EV after the French government introduced an environmental bonus in April 2015 to allow owners of older, polluting diesel cars to trade them in and get a rebate of €10,000 on a new electric vehicle.

“The government’s environmental bonus was a big factor in my decision to get an EV,” Nivelle said. “But I have to say, I was convinced the first time I drove the car. It’s a real pleasure to drive and it feels good to do my part for the environment.”

Watch a video  of Nivelle getting into his historic Renault ZOE at the dealership. Renault Nissan Bordeaux

In addition to the LEAF, Nissan also makes the e-NV200 van, which has been on sale in Europe and Japan since 2014. In addition to the ZOE, Renault also sells the Renault Kangoo Z.E van, the SM3 Z.E. sedan and the Twizy, a two-seater urban commuter vehicle.

“Demand for our electric vehicles continues to grow thanks to government incentives and the expanding charging infrastructure,” said Carlos Ghosn, chairman and CEO of the Renault-Nissan Alliance, formed in 1999.

“The positive response of our customers is also driving demand. These vehicles enjoy some of the highest levels of satisfaction rates from our customers around the world,” Ghosn said.

As public fast-charging infrastructure proliferates so that a nearly full charge is possible in less than half an hour at many locations, and electric vehicle batteries offer ranges up to 250 miles on a single charge, public acceptance of EVs grows stronger.

An all-electric vehicle offering more than 200 miles of range per charge for an affordable price in the neighborhood of US$30,000 – that’s what a growing segment of the driving public wants and an increasing number of automakers are answering that demand.

There are more than 20 models of electric vehicles on the market today, including, among others, the Chinese BYD e6, the Chevrolet Spark EV, Fiat 500e, Kia Soul EV, India’s Mahindra Reva e2o, all Mercedes B-class cars, the Mitsubishi i-MiEV, the Smart EV, Volvo’s XC90 T8 and the VW e-Golf.

Across the industry, at least 24 newly announced electric vehicle models are expected to be on the market before 2019.

General Motors will have the 2017 Chevrolet Bolt EV for sale late this year; it offers 200 miles of range for about $30,000 after the federal government rebate.

GM head Mary Barra believes a real “revolution” is underway. She told the World Economic Forum annual meeting in January that soon petrol-fueled cars will be “a thing of the past.”

“In the auto industry, the revolution is being driven by the convergence of connectivity, electrification and changing customer needs,” Barra said. “It is allowing automakers like GM to develop dramatically cleaner, safer, smarter and more energy-efficient vehicles for customers in every market around the world.”

Ford delivered its first Focus E in 2011, but now has fallen behind. The 2017 Ford Focus Electric will have just 100 miles of range, according a Ford media presentation in Dearborn, Michigan last December.

But Ford will add DC fast charging to the car, so it can recharge to 80 percent of battery capacity in 30 minutes at a growing network of Combined Charging System sites in the USA and Europe.

Many other companies are jumping into the strengthening EV market.

At the 2016 Geneva International Motor Show, Hyundai Motor introduced the IONIQ – the world’s first model with three distinct electrified powertrains: the IONIQ Hybrid, the IONIQ Plug-in and the IONIQ Electric.

German automaker Audi is preparing its international production network to make autonomous cars, electric cars and hydrogen fuel cell cars.

Production of the first all-electric SUV from Audi will begin in Brussels in 2018, the company says. It will offer a range of more than 250 miles on a single charge. In a decade, the company projects, 25 percent of Audi’s sales will be electric vehicles.

As production increases, the market grows, especially in India and China.

India’s Minister of State for Power, Coal, and New and Renewable Energy Piyush Goyal wants to make every car on India’s roads an electric vehicle by 2030.

“We have created a working group under the leadership of Road Transport and Highways Minister Nitin Gadkari, who is good at coming up with large scale programs. Environment Minister Prakash Javadekar, Petroleum Minister Dharmendra Pradhan, and I are members of this group,” Goyal told a conference of Indian youth in late March.

Goyal suggested that drivers could buy bare bones electric cars with no money down. The buyers could pay for their EVs over time from the savings realized by not having to purchase fuel.

In China, electric car sales surged to 220,000 in 2015, surpassing the United States to rank first worldwide, according to the China Association of Automobile Manufacturers.

BYD, which stands for Build Your Dream, sold more EVs than any other Chinese company in 2015. CAAM projects sales of 300,000 EVs in China this year.

Unveiling the Tesla Model 3, Musk addressed the underlying reason behind the rapidly electrifying auto industry.

“Why are we doing this? Why are we making electric cars? Why does it matter?” he asked.

“It’s very important to accelerate the transition to sustainable transport. It’s really important for the future of the world,” he answered his own question.

Musk is concerned about climate change. He pointed to the record high CO2 concentration in the atmosphere: as of March 2016 – 403.5 parts per million – and climbing.

“The last time there was this concentration of CO2 in the atmosphere was 11 million years ago, when primates first started walking upright,” he told the crowd at the unveiling event, many of them owners of earlier and much more costly Teslas.

Tesla founder, chairman and CEO at the unveiling of the Tesla Model 3. (From video courtesy Tesla Motors)

Musk pointed to the Earth’s steadily rising temperature. He pointed to the fact that 53,000 people a year die in the United States alone from exposure to automobile emissions.

Musk is not alone in his concerns. And research shows that the growing popularity of electric vehicles can indeed help avert climate change.

In September 2015 the California-based Electric Power Research Institute and the U.S. nonprofit Natural Resources Defense Council (NRDC) jointly released a study finding that widespread adoption of electric transportation, including the off-road sector, could lead to substantial reductions in greenhouse gas emissions and improve air quality.

The report, “Environmental Assessment of a Full Electric Transportation Portfolio,” projects emissions through 2050 and air quality impacts in 2030.

It finds that greenhouse gas emissions from light-duty vehicles could drop as much as 64 percent below today’s levels as drivers abandon internal combustion engines in favor of electrics.

“This research points to the importance of two fundamental and parallel trends in energy and the environment,” said EPRI President and CEO Mike Howard. “First is the continuing decarbonization of the electricity sector and second is the electrification of energy use in transportation and industry.”


 

 

Making Plastic Waste Disappear

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Some plastics are just lucky, they become the raw materials for artworks. (Photo by Steven Depolo) creative commons license via Flickr

By Sunny Lewis,

WASHINGTON, DC, March 15, 2016 (Maximpact.com News) – Every ton of plastic bottles recycled saves about 3.8 barrels of oil, says the Plastics Industry Trade Association, which has just launched a Zero Net Waste program to help members evaluate waste reduction opportunities and maximize landfill diversion.

The $427 billion U.S. plastics industry, employs nearly one million American workers and is the third largest manufacturing industry in the United States.

Founded in 1937 and based in Washington, DC, the Plastics Industry Trade Association was originally the Society of the Plastics Industry is still known by those initials, SPI.

The Zero Net Waste program grew out of the SPI Recycling Committee’s Emerging Trends Subcommittee, chaired by Kathy Xuan, CEO of PARC Corp, and then developed by a broad workgroup of the association’s members.

“As chair of the subcommittee and a recycler who provides zero landfill services,” said Xuan, “we feel this program will be instrumental in providing tools and resources to accelerate the industry’s pursuit of zero waste.”

The ZNW program manual is designed to enable companies of all sizes to begin pursuing zero waste in their facilities, from building the business case for zero net waste, to educating employees and offering practical guidance on finding the right service providers.

The Zero Net Waste Program isn’t just for companies looking for Zero Waste certification, said Robert Flores, director of sustainability for Berry Plastics, a global manufacturer and marketer of plastic packaging based in Evansville, Indiana.

“The accompanying manual is applicable to a wide variety of companies and provides the basics for how get started, as well as how to enhance existing programs that a company already may have in place,” said Flores.

Reducing reliance on landfills provides both environmental and economic benefits, which are being driven by many of the major brand owners in the plastics industry today, said Nina Goodrich, executive director of GreenBlue, an environmental nonprofit based in Charlottesville, Virginia that works towards the sustainable use of materials.

“GreenBlue and the Sustainable Packaging Coalition support SPI’s Zero Net Waste Program,” Goodrich said. “Providing companies the tools and resources to demonstrate leadership in landfill diversion is an important step towards reducing carbon emissions and developing a circular economy.”

In Europe, companies are working towards reducing the negative impact of plastics on the environment by contributing to a circular economy, and many are seeking funding for these efforts from Horizon 2020.

Horizon 2020 is the biggest ever EU Research and Innovation program with nearly €80 billion of funding available over the seven years 2014 to 2020, in addition to the private investments that this seed money will attract.

Making Plastic Waste Disappear

Baled plastics in Switzerland awaiting a buyer (Photo by mbeo) creative commons license via Flickr

The European Commission’s Executive Agency for Small and Medium-sized Enterprises, ESME, manages the calls for proposals under Horizon 2020’s societal challenge, Climate Action, Environment, Resource Efficiency and Raw Materials.

The agency is funding projects under the Horizon 2020 program that guarantee a sustainable supply and use of raw materials, and the protection and sustainable management of natural resources and ecosystems.

On December 8, 2015 EASME organized a networking meeting for 21 waste-related research and innovation projects.

The meeting kicked off 13 projects selected under Horizon 2020’s “Waste: A resource to recycle, reuse and recover raw materials” call for proposals in 2015.

This year, by the call deadline March 8, the European Commission had received 333 proposals for Horizon 2020 funding for projects in the areas of climate action, environment, resource efficiency and raw materials.

A budget of about €283 million is available in 2016 for projects in these areas. In April, independent expert panels will evaluate the proposals, choosing which ones to fund.

A project funded this way is revolutionizing the secure envelope market. Inspired by EU efforts to promote products made from eco-friendly materials, this Italian initiative seeks to replace envelopes made from polluting polyethylene plastic, with paper, laminated with eco-plastic that incorporates tamper-indication techniques.

The goal of the SELOPE project is to produce at industrial scale an innovative security envelope, made from certified Forest Stewardship Council paper, laminated with eco-plastics and Mater-Bi, a biodegradable, compostable bioplastic made from plants.

By using these innovative materials, the company says it cuts its CO2 emissions, diverts waste from landfills and promotes recycling and compostability.

In the UK, Impact Laboratories Ltd. has developed a method for the cost-efficient separation of mixed polymers, using a patent pending process of vertically arranged blades oscillating to produce separation.

Developed to meet the needs of the recyclers, the process involves a low capital and operational expenditure. This opens the equipment to small and medium sized recyclers across Europe, allowing them to separate plastics which are now classed as too expensive to separate.

This adds value to the recycler, creates jobs, reduces the plastic going to landfill, and provides manufacturers with a rich source of useable recycled material at a local level.

“Our technology has the potential to make a major change in the way plastics are recycled across Europe,” Impact says. “Every unit will reduce plastic to landfill by 2,000 tonnes a year, helping Europe meet the EU goals for plastic recycling by 2020.”

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Crushed plastic bottles awaiting recycling (Photo by Lisa Risager) creative commons license via Flickr

The European Commission has adopted an ambitious Circular Economy Package.

Still working its way through the legislative process is a proposal on waste sets an EU target for recycling of 75 percent of packaging waste by 2030; and a binding target to reduce landfill to maximum of 10 percent of all waste by 2030.

It specifies simplified and improved definitions, harmonized calculation methods for recycling rates throughout the EU will be coupled with economic incentives for packaging producers to put greener products on the market and support recovery and recycling schemes.


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Green Economies Arising Across Europe

GermanyWindfarm By Sunny Lewis

HELSINKI, Finland, February 4, 2016 (Maximpact.com News) – A broad political will and the involvement of many different economic and social actors are essential for successful transition to a green economy, conclude researchers from five institutes of the Partnership for European Environmental Research (PEER).

For their newly published report, “Implementing the Green Economy in a European Context: Lessons Learned from Theories, Concepts and Case Studies,” the researchers studied 10 innovative cases from Denmark, Finland, France, Germany and the Netherlands.

They found that successful projects include a broad range of stakeholders, have strong and consistent political support, and integrate research activities into the implementation of the initiatives.

In his forward to the report, PEER Chairman Prof. Dr. Georg Teutsch wrote, “These case studies were utilized to reveal opportunities, but also barriers and challenges for the transformation into a zero waste, renewable bio- and ecosystem-services-based production system.”

“The project aimed at producing increased understanding about the concepts and foundations for future circular and green economy securing the maintenance of a full range of ecosystem services on which society relies,” he wrote.

Transitions to a green economy are never purely based on win-win solutions, but require trade-offs among multiple goals across many sectors, the report finds.

Reaching a win-win proposition becomes more laborious the more stakeholders and competing interests there are, the researchers explained. “Sometimes win-win solutions were not enough if the alternatives remained more profitable, market structures did not encourage change or stakeholders were not committed.”

Driven to meet growing demands for food, drinking water, timber, fiber, and fuel as well as minerals, humans have changed ecosystems more rapidly and extensively over the past 100 years than at any time in human history, according to the report.

“These changes are a result of traditional one-way linear economic models: resource – product – waste and may lead to depletion of natural resources and irreversible changes in the environment,” the report states.

Today, civil society, industrial and political leaders are acknowledging the urgent need for reconsideration and revision of this type of thinking.

Greening an economy is being promoted as a new strategy for enhancing human well-being and reducing environmental risk, defined as “low-carbon and climate proof, resource-efficient and socially inclusive,” according to the report.

The PEER report contains conceptual analysis and empirical case studies that indicate the need for far-sighted planning, multi-source financing and wide stakeholder participation in green economy initiatives.

Jyväskylä

Jyväskylä is the largest city in the region of central Finland on the Finnish Lakeland. It was the subject of one of the 10 cases analyzed in the PEER report.

 

 

 

 

The 10 case studies spanned national, regional and local activities.

The two on the national level are:

  • Germany’s energy transition, since the 1980s
  • Increasing the construction of large-scale buildings from wood in Finland, since the 1990s

 

The five regional cases are from France, Finland and Germany. They are:

  • A project to support the implementation of biogas plants in the area of Brittany, France (2007-11)
  • A project to minimize organic waste in the Rennes Metropole region of France (2010-2012)
  •  A project to develop the city of Jyväskylä, Finland into a resource-wise region (2013-2015)
  •  A project to form a network of Finnish municipalities that creates and carries out solutions to reduce greenhouse gas emissions, since 2008
  • An initiative to sell certificates on emission reductions to support peat land restoration, since 2010

 

The three local case studies are:

  • An industrial symbiosis initiative in the harbor area of Dunkirk, France, since the 1960s
  • Cooperation between farmers and the water company to improve soil in the Duurzaam region of The Netherlands, since 2013
  • A project on off-shore macroalgae cultivation to promote circular resource management and bio-based production in Denmark, since 2012

 

Lea Kauppi, Director General of the Finnish Environment Institute and a former PEER chairperson.

“As illustrated by the study, the complexity and multi-sectoral nature of the green economy calls for a broad integration of sectors connected to environment, innovation, transport, housing, energy, agriculture and spatial planning,” said Lea Kauppi, director general of the Finnish Environment Institute, one of the five institutes responsible for the report, and a former PEER chairperson.

“The case studies also illustrate the need for comprehensive analysis of the effects of regulation and legislation, as well as the importance of stakeholder commitment, good leadership and coordination,” she said.

The report concludes that transforming the economy requires innovation in terms of technology, organizational support, market and broader societal conditions, and an overarching governance framework, but most of all, a consistent and cross-sectoral political will.

All the PEER partners supported the preparation of the project, and finally five institutes were the active research members: the Finnish Environment Institute, which handled coordination of the project; Alterra Wageningen UR in the Netherlands; IRSTEA – the National Research Institute of Science and Technology for Environment and Agriculture in France; the Helmholtz Centre for Environmental Research – UFZ in Germany; and the (DCE) Danish Centre for Environment and Energy at Aarhus University.

A biogas plant in the Brittany region of France developed by Hera Cleantech, the environmental engineering division of the Spanish international group Hera Holding.

A biogas plant in the Brittany region of France developed by Hera Cleantech, the environmental engineering division of the Spanish international group Hera Holding.

Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Main and Featured image: This windfarm in Gemeinde Driedorf, Hesse, Germany is part of the German transition from energy generated from fossil fuels and nuclear power stations to renewable energy. June 2013 (Photo by Neuwieser) under creative commons license via Flickr
Image 01: Lea Kauppi is director general of the Finnish Environment Institute and a former PEER chairperson. (Photo courtesy Linkedin)
Image 02: A biogas plant in the Brittany (Photo courtesy Hera Cleantech)

Best Sustainable Development Moves Need Decision Analysis

SDGs

By Sunny Lewis

NEW YORK, New York, January 29, 2016 (Maximpact.com News) – “It’s about the toughest job any human being could be given,” says David Nabarro, the UN Secretary-General’s Special Adviser on the 2030 Agenda for Sustainable Development.

The London-born UN veteran has the job of mobilizing global efforts to achieve the 17 Sustainable Development Goals that make up the 2030 Agenda, adopted unanimously by 193 Heads of State at UN Headquarters in New York in September.

The goals are ambitious: zero poverty, zero hunger, good health, quality education, gender equality, clean water and sanitation, and affordable clean energy, to decent work and economic growth, innovation, reduced inequalities, sustainable cities, responsible consumption, climate action, unpolluted oceans and land, and creating the partnerships to achieve them.

“The 17 goals represent an indivisible tapestry of thinking and action that applies in every community, everywhere in the world,” said Nabarro. “They are universal. But they’re also indivisible and that means that we really do not believe that any one goal should be separated out from the others.”

“And as you study them,” he said, “you realize that although they’re presented as individual goals, they actually represent a total and completely intertwined lattice of action that is relevant for every human being everywhere.”

These goals “plot out an annual investment pipeline measured in the trillions to end poverty and also marry increased prosperity with social inclusion and environmental regeneration,” says UN Environment Programme chief Achim Steiner.

Each of the 17 goals has specific targets to be achieved over the next 15 years – 169 targets in total.

Deciding how to actually achieve each goal and how to measure the potential effectiveness of funding and implementation proposals appears to be a steep mountain to climb.

For measuring progress toward its goals, UN agencies have historically relied on a target-setting process.

But now, to help Nabarro help the world achieve the Sustainable Development Goals, scientists are calling on the UN and the private sector to dispense with the target-setting approach and adopt a new method – decision analysis.

ShepherdKeith

Dr. Keith Shepherd is a specialist in decision analysis and soil science. (Photo courtesy World Agroforestry Centre)

Dr. Keith Shepherd and the Land Health Decisions team at the World Agroforestry Centre proposed the use of decision analysis concepts and tools in a September 2015 article in the journal “Nature.”

Shepherd says, “The target setting approach is widely seen as ineffective or counter-productive,” says Shepherd, a soil scientist, who also leads the Information Systems Strategic Research in the Consultative Group for International Agricultural Research Program on Water, Land and Ecosystems.

This research focuses on decision engagement and analytics using holistic cost-benefit analysis of stakeholder intervention decisions with emphasis on quantifying uncertainty and risks to focus on information needs that have high economic value.

Targeting emphasizes meeting a target rather than learning how to improve performance and solve a problem, Shepherd explains, adding that target setting can incentivize mis-reporting information in order to meet the target.

“And last but not least,” maintains Shepherd, “it’s an incredibly expensive endeavor to monitor and collect data.”

Shepherd says decision analysis will help avoid spending precious funds on another round of target setting and monitoring.

An analysis of more than 80 models from a variety of decisions and industries reveals that “managers tend to choose to measure variables that are unlikely to improve decisions while ignoring more useful ones,” Shepherd says.

“In a way it’s like putting up a whole new learning system rather then setting up a group of targets,” says Shepherd. “Using decision analysis is about supporting people to make better decisions and better choices. We need to work on gathering the right information needed to improve decision making on the ground. We have the tools to do that now.”

In the “Nature” article, Shepherd and his colleagues propose replacing targets with measures of return on investment.

With limited development dollars, decision makers should understand how to maximize the impact of investments, they write. “We should be asking and answering questions such as, ‘were the environmental benefits and reduction of poverty enough to justify the allocation of limited funds?'”

Decision makers should be using economic models that project long-term costs, benefits and risks of intervention options and help choose the best combination of interventions for achieving the desired set of development goals.

Decision analysis uses “value-of-information” analyses that determine how much decision-makers should be willing to pay for additional knowledge on a certain variable before making a decision. Areas that have high information value should be measured.

“The whole process is a learning system.” explains Shepherd. “We project impacts based on current understanding, measure where it will help improve our choices, monitor where things are most likely to go wrong, and continually update our projections and choices based on what we actually observe.”

Shepherd and team advise that the UN, donors and private sector should fund a decision analysis task force. The task force will help clarify key decisions about development interventions, create methods for analyzing choices and tradeoffs, and design a capacity development program in decision analysis.

“I think this will need steering, piloting and proof of application because it is an entirely different approach to what many know in development,” says Shepherd. “It will take quite a bit of work to enact change, however we have seen this transition happen in other fields.”

Sectors that have been using decision analysis for decades include mining, oil, insurance, and cybersecurity, he said.

Nabarro will receive support in his tough task from a select group of people who have much experience in analyzing decisions.

A queen, a crown princess, a president, a prime minister, a Chinese e-commerce pioneer, and a player often ranked as the world’s best footballer are among eminent Advocates appointed by UN Secretary-General Ban Ki-moon last week to help achieve the 2030 Agenda for Sustainable Development.

Co-chairs of the SDG Advocates group are Ghanaian President John Dramani Mahama and Norwegian Prime Minister Erna Solberg.

The SDG Advocates are:

  • Queen Mathilde of Belgium
  • Crown Princess Victoria of Sweden
  • Jack Ma, founder and executive chairman of the Chinese Alibaba Group of Internet-based businesses
  • Leo Messi, the world renowned Argentine-born footballer
  • Sheikha Moza bint Nasser, co-founder of the Qatar Foundation
  • Richard Curtis, screenwriter, producer and film director
  • Dho Young-Shim, chair of the UN World Tourism Organization’s Sustainable Tourism Foundation
  • Leymah Gbowee, director of the Gbowee Peace
  • Graça Machel, president of the Foundation for Community Development
  • Alaa Murabit; founder of The Voice of Libyan Women
  • Paul Polman, chief executive officer of Unilever
  • Jeffrey Sachs, director of the Earth Institute at Colombia University
  • Shakira Mebarak, founder of the Pies Descalzos Foundation
  • Forest Whitaker, actor and founder of the Whitaker Peace & Development Initiative
  • Muhammad Yunus, founder of the Grameen Bank and 2006 Nobel Peace Prize laureate
These farmers in South Sulawesi, Indonesia, are part of a project that aims to improve rural livelihoods by raising on-farm productivity, encouraging better environmental management, and improving governance. (Photo by Yusuf Ahmad/ICRAF)

These farmers in South Sulawesi, Indonesia, are part of a project that aims to improve rural livelihoods by raising on-farm productivity, encouraging better environmental management, and improving governance. (Photo by Yusuf Ahmad/ICRAF)


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Cement CEO’s Rise to the Climate Challenge

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PARIS, France, December 24, 2015 (Maximpact News) – Cement production accounts for about five percent of all human-made carbon dioxide (CO2) emissions worldwide, and now, inspired by the Paris Climate Agreement, the cement industry has set a goal of reducing its emissions of this greenhouse gas 25 percent by 2030 compared to business as usual.

Cement is the “glue” in concrete, reacting with water to bind crushed stone, gravel and sand. This essential building material is second only to water in the volume consumed every year.

About 60 percent of the cement industry’s CO2 emissions come from the raw materials used in the manufacturing process of cement, the basic chemical de-carbonation of limestone into lime, which releases CO2.  About 40 percent of these emissions come from the energy required for this chemical reaction and to heat the materials to a temperature of about 1450°Celsius.

Demand for cement is forecast to grow, driven by population growth and world-wide economic recovery as well as increasing infrastructure needs in developing countries. RnR Market Research projects that world demand for cement is projected to grow 4.6 percent per year to 5.2 billion metric tons in 2019.

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At the United Nations COP21 climate conference in Paris earlier this month, the cement industry reaffirmed its commitment to help tackle climate change. The CEOs of 16 cement companies from across the world signed an aspirational statement, inviting the whole sector to join with them in a seven-part action plan:

1. Enhance the coverage of the sector’s CO2 emissions and energy consumption database, with a specific focus on China, which accounts for about 60 percent of worldwide cement production.

2. Enhance overall energy efficiency of the cement manufacturing process.

3. Scale-up the collection, availability and usage of good quality alternative fuels and raw materials, including relevant waste from other sectors in a circular economy approach.

4. Further reduce the clinker content in cement to minimize the share of the energy-intensive part of the process.

5. Develop new cements with reduced net CO2 emissions over the full life cycle.

6. Engage the full building and infrastructure value chain in local markets to identify and maximize the avoided emissions by usage of cement and concrete products.

7. Evaluate cross-sectoral initiatives, particularly the opportunities to capture, use and store carbon.

“COP21 is a unique moment in history and an unprecedented opportunity deliver results that will scale up decisive action on climate. We need to ensure that business solutions to climate change are implemented to deliver the low carbon vision we work for,” explained OP Puranmalka, managing director of one of the 16 companies, India-based UltraTech Cement.

UltraTech Cement is one of the earliest proponents of waste heat recovery, alternative fuels and other environmentally sustainable practices among cement manufacturers.

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The 16 cement CEOs are taking part in the World Business Council on Sustainable Development’s Low Carbon Technology Partnerships initiative (WBCSD), an unprecedented business collaboration to scale up the development and deployment of low carbon technologies.

Peter Bakker, president and chief executive of the World Business Council on Sustainable Development (WBCSD), said, “This collective effort by the cement industry to mitigate its emissions is highly encouraging and showcases the importance of leadership and collaboration in making the transition to a low carbon economy.”

In fact, the cement industry has been moving in the direction of sustainability since 1999 when the Cement Sustainability Initiative was created under the WBCSD umbrella.

Today, the Cement Sustainability Initiative (CSI) is a global effort by 26 major cement producers with operations in more than 100 countries who believe there is a strong business case for the pursuit of sustainable development. Collectively these companies account for around 30 percent of the world’s cement production and range in size from large multinationals to smaller local producers.

Philippe Fonta, managing director of the CSI, said, “Building on 15 years of collaboration, the CSI and its members are working towards scaling up their efforts and leveraging the implementation of identified business solutions to a broad majority of cement companies worldwide. Engaging the whole cement sector would be delivering an additional reduction of close to 1 Gt of CO2 by 2030, which is about the same amount of total CO2 emissions of Germany in 2013.”

Many sustainable cement technologies are already available, but there are either political barriers that need to be removed or financial incentives to be put in place in order to scale up investment in breakthrough technologies.

“There is a lot of potential for emission reductions, but in order to unlock it we need the whole private sector to be involved, and we need to work with governments and other stakeholders in order to remove regulatory and other barriers,” said Fernando González, CEO of Mexico-based cement giant CEMEX.

Actions that could reduce emissions of the cement industry include expanding the use of alternative fuels and cement components, developing new low carbon cements, looking into avoided emissions in the use phase of concrete as a sustainable building material and exploring novelties in the production process.

“It is simply not possible to achieve robust and sustainable growth without taking consistent action to promote sustainable development. COP 21 represents the beginning of a new phase in which it will be necessary to combine the efforts of the sector and other key stakeholders to ensure that low-carbon technology initiatives are implemented” said Walter Dissinger, CEO of Votorantim Cimentos, Brazil’s largest cement
company.

The 16 companies supporting the Action Plan are: Cementos Argos, CEMEX, CRH, Dalmia Cement, GCC, HeidelbergCement, InterCement, Italcementi Group, LafargeHolcim, SCG Cement, Secil, Shree Cement, Titan, UltraTech
Cement, Votorantim Cimentos and West China Cement.

The 16 cement company CEOs are interested in furthering collaboration opportunities and developing partnerships with other sectors whose waste could constitute feedstock for alternative fuels for the cement sector, and identifying regulatory or financial enablers for the effective implementation of low‐carbon technologies.

“Since 2001 the cement sector has demonstrated its ability to make progress on mitigating its impact on climate change. The LCTPi provides additional opportunities to accelerate these efforts and widen engagement through actions by all members of the industry, together with other stakeholders, to overcome barriers and achieve performance matching the best in the sector,” said Eric Olsen, CEO of LafargeHolcim, the world’s largest cement company, formed earlier this year by the merger of Lafarge and Holcim.

LafargeHolcim and CDC Group plc, the UK’s development finance institution, have signed a Memorandum of Understanding to set up a company that will produce and promote an affordable low-carbon construction solution for developing countries. The new company aims at scaling-up production of earth-cement bricks, a simple, reliable, affordable and environmentally-friendly building material.

LafargeHolcim, represented by co-chairman of the Board Bruno Lafont, made a firm commitment to combat climatechange by including its carbon emission objectives in the French Business Climate Pledge. This document was signed by 39 major French companies as part of their actions to contribute to making COP21 a success and to limiting the warming of the Earth to 2°Celsius above pre-industrial temperatures.

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Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: A CEMEX cement truck extends a new bridge in Germany (Photo byArturo de Albornoz) under creative commons license via Flickr
Image 01: Emissions from a cement factory in the United States, 1972(Photo by Stuart Rankin courtesy U.S. National Archives) Public domain via Flickr
Image 02: Apartment buildings under construction in Puyang, China, January 2015 (Photo by V.T. Polywoda) under creative commons license via Flickr
Image 03: This cement kiln produces more greenhouse gas than any other single source in Santa Clara County, California, over a million tons a year as of 2008. It is also the second largest airborne mercury polluter in the state. The first, in Bakersfield, is another cement kiln.(Photo by KQED used under creative commons license via Flickr)

Green Groups Guide Investors to Protected Areas

GLAND, Switzerland, December 1, 2015 (Maximpact News) – Two of the world’s largest and most influential nonprofit groups have made a new 10-year commitment, combining their strengths to enhance the role of protected and conserved areas in achieving sustainable development.

The International Union for the Conservation of Nature (IUCN) and the World Wildlife Fund (WWF) have pledged to expand the number of protected areas reaching IUCN Green List quality standards to at least 1,000 protected areas in 50 countries.

The partnership will look at how challenges to protected areas such as poaching, illegal logging and other destructive activities can be addressed through new financing and investment.

The two organizations have promised to seek the application of US$2 billion of new investment funding for the enhanced performance and sustainability of these Green List protected areas.

And the groups say they will generate at least 20 new ambitious protected area commitments for biodiversity and United Nations’ Sustainable Development Goals from communities, governments and other organizations.

The two groups, both based in Gland, believe that by combining their strengths they will multiply their chances of making a major contribution towards achieving the Sustainable Development Goals.

The IUCN-WWF partnership was announced on the first anniversary of the IUCN World Parks Congress, which took place in November 2014 in Sydney, Australia and culminated in the Promise of Sydney.

The Promise of Sydney commits signers to invest in protected areas, which help to halt biodiversity loss; mitigate and adapt to climate change; reduce the risk and impact of disasters; improve food and water security, and promote human health and dignity.

The Promise of Sydney encompasses four elements:

A Vision that reflects a set of high-level aspirations and recommendations for the change needed in the coming decade to accomplish conservation and development goals for parks, people and planet.

Twelve Innovative Approaches to transformative change to: achieve conservation goals, respond to climate change, improve health and well-being, support human life, reconcile development challenges, enhance the diversity and quality of governance, respect indigenous and traditional knowledge, inspire a new generation, protect World Heritage sites, conserve the marine environment, develop greater capacity for effective action and create a new social compact.

The third element of the Promise of Sydney is a Panorama of Inspiring Protected Area Solutions to overcome obstacles to the stability of people and protected areas. Supported by IUCN, its Commissions and members, they can serve as reference points and resources for conservation practitioners around the world.

The fourth element is Promises. These are pledges by countries, groups of countries, funders, organizations and other partners to chart the path forward for the world by stepping up or supporting accelerated implementation.

For instance, the U.S. National Park Service committed to setting up a program to engage 100,000 youth in protected areas across the United States.

South Africa committed to more than triple its ocean protection over the next 10 years, from less than 0.5 percent to five percent of its Exclusive Economic Zone within Marine Protected Areas. South Africa will do this to ensure environmental sustainability because MPAs deliver ecosystem services that underpin South African livelihoods, food security and ecotourism.

Russia committed to grow its protected area network by establishing at least 27 federal protected areas and expanding 12 others, increasing the total area of federal protected areas by 22 percent, or 13 million hectares.

Critical habitats for important threatened species, including the Amur tiger in the Bikin River watershed in Russia’s Far East, the polar bear in the Novosibirsk Archipelago, the Siberian crane in Yakutia, and the Beluga whale in the White Sea near the Solovetsky Archipelago, among others, will be granted protection.

Japan’s Ministry of the Environment committed to working with the IUCN Asia Regional Office to enhance collaboration among Asian countries on protected areas management through the Asia Protected Area Partnership, which was officially established during the IUCN World Parks Congress 2014.

China committed to increase its protected areas territory to at least 20 percent by 2020, and to match Chinese categories of protected areas to global standards.

The Promise of Sydney is the foundation for pathways the WWF and IUCN can take over the next 10 years to ensure that protected areas can be perceived as one of the best investments in the planet’s future.

The 10-year partnership aims to make the case for direct investment in protected areas and protected area systems that demonstrate enhanced conservation outcomes.


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: A wildebeest grazes beside a vast flock of flamingos at Tanzania’s Lake Magadi in the Ngorongoro Conservation Area. (Photo courtesy IUCN World Parks Congress)
Slideshow Images: A.  The Three Sisters – Australia’s Blue Mountains National Park is located in the Blue Mountains region of New South Wales, in eastern Australia. (Photo courtesy Nosha via Flickr) B. Half Dome seen from Glacier Point in Yosemite National Park, California, USA (Photo courtesy IUCN World Parks Congress) C. Guere Community conservation area, Choiseul, Solomon Islands (Photo courtesy IUCN World Parks Congress)

Financing Sustainable Development: a ‘Quiet Revolution’ Underway

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By Sunny Lewis

LIMA, Peru, October 13, 2015 (ENS) – The world’s leading development banks Friday pledged to boost climate finance by committing $100 billion a year by 2020 to help developing countries mitigate and adapt to a warming planet.

At the International Monetary Fund-World Bank Annual meetings held in Lima October 9-11, bankers explored exactly what financial support is required to keep the planet from tipping into climate catastrophe.

In Lima, they were offered the results of a two-year-long inquiry conducted by the UN Environment Programme summarized in a new report, “The Financial System We Need.”

The UNEP Inquiry  found that “a quiet revolution” is happening right now.

World Bank Vice President and Special Climate Envoy Rachel Kyte called the changes “a new generation of policy innovations that aim to ensure the financial system serves the needs of inclusive, environmentally-sustainable, economic development.”

Financial policymakers and regulators are now integrating sustainable development into financial systems to make them respond to a 21st century facing rising temperatures and a burgeoning population in need of clean energy and clean water.

UNEP Executive Director Achim Steiner said, “UNEP’s Inquiry has for the first time compiled and analyzed inspiring initiatives from across the world that seek to better align the financial system with sustainable development, showing that there is much to be learnt from the developing world.”

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Image: UNEP Executive Director Achim Steiner (Photo courtesy UN Environment Programme)

The inquiry documented an upwelling of sustainable development momentum driven by developing and emerging nations including Bangladesh, Brazil, China, Kenya, and Peru, championed by France and the United Kingdom.

The UNEP Inquiry reports that, “Amplifying these experiences through national and international action could channel private capital to finance the transition to an inclusive, green economy and support the realization of the Sustainable Development Goals.”

These 17 goals , adopted by the UN General Assembly in September, range from ending poverty and hunger, ensuring clean water and sanitation for all, urgent action to control climate change, and responsible use of forests and oceans, to making cities safe and resilient, and ensuring gender quality and justice across the world.

The UNEP Inquiry into the Design of a Sustainable Financial System was established in January 2014 with a mandate to advance policy options linking the financial system with sustainable development.

Backed by a high-level Advisory Council of financial leaders, the Inquiry has looked in-depth at practice in more than 15 countries related to banking, bond and equity markets, institutional investment, insurance and monetary policy.

To reach its findings, the Inquiry worked with central banks, environment ministries and international financial institutions as well as major banks, stock exchanges, pension funds and insurance companies.

The Inquiry’s report presents a Framework for Action with a toolbox of 40 different measures, a set of five policy packages for banking, bond and equity markets, institutional investors and insurance, and a set of 10 next steps to promote international financial cooperation.

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Murilo Portugal, the president of Brazil’s banking association, FEBRABAN, and a member of the Inquiry’s Advisory Council, said Friday, “The Inquiry has catalyzed awareness of the need to align financial markets to sustainable development, and highlighted practical pathways to improving such an alignment.”

FEBRABAN offers three key insights based on the UNEP report:

  • Financing for sustainable development can be delivered through measures focused on the financial system, as well as the real economy.
  • A growing number of policy innovations have been introduced by both developing and developed countries, demonstrating how the financial system can be better aligned with sustainable development.
  • Systematic national action can now be taken to shape a sustainable financial system, informed by current trends and complemented by international cooperation.

Bankers and financiers in many countries are already moving towards sustainable development. The UNEP Inquiry found over 100 measures that are already in place, including:

  • In Peru, new due diligence requirements have been introduced for banks to help reduce social and environmental externalities.
  • In China, a portfolio of 14 distinct recommendations advances China’s green financial system, covering information, legal, institutional and fiscal measures.
  • Kenya has advanced financial inclusion through scaling of mobile-based payment services and is now also supporting green financing.
  • In France, new disclosure requirements on climate change have been introduced for institutional investors as part of the country’s energy transition legislation.
  • The United States is emphasizing fiscal measures to accelerate green finance and has made advances in disclosure and investor action.

Naina Kidwai, chairman of India’s branch of British banking and financial services company HSBC and director, HSBC Asia Pacific, is a member of the Inquiry’s Advisory Council.

Kidwai found the UNEP report useful, saying, “Too often the financial system and sustainable development have been tackled in separate silos. The Inquiry has shown for the first time how to systematically connect the dots, demonstrating practical ways in which we can mobilize the scale of capital needed in emerging markets, particularly for clean energy and clean water.”

Speaking in Lima, Yi Gang, deputy governor of the People’s Bank of China, said the UNEP Inquiry report “delivers a vision of embedding sustainable development into the core of financial and capital markets.”

“It should be a very useful guide and reference for many governments, financial institutions and international organizations in thinking about how to advance green finance,” said Yi.

The core definition of sustainable development is, “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

It was first defined in the 1987 publication “Our Common Future,” by the UN World Commission on Environment and Development, also known as the Brundtland Report after former Norwegian Prime Minister Gro Harlem Brundtland, who chaired the commission.

Brundtland saw that the many crises facing the planet are interlocking elements of a single crisis of the whole and saw the need for the active participation of all sectors of society in sustainable development consultations and decisions.

These elements stand forth again nearly 30 years later in the UNEP Inquiry report presented to the World Bank and IMF fall meeting in Lima.

Dr. Atiur Rahman, governor of the Bangladesh Bank, and a member of the UNEP Inquiry’s Advisory Council, said in Lima, “For the first time, the Inquiry has mapped the many innovations around the world seeking to ensure that the financial system serves its purpose of financing inclusive, green development.”


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: Bank governors and finance ministers pose for a photograph at the IMFC meeting October 9, 2015 during the 2015 IMF/World Bank Annual Meetings in Lima, Peru. (Photo by Stephen Jaffe courtesy IMF)
Header Image: World Bank Group President Jim Yong Kim briefs the media at the IMF-World Bank Group Fall meeting in Lima, Peru, October 8, 2015 (Photo courtesy World Bank Group)
Image 03: International Monetary Fund Managing Director Christine Lagarde briefs the press at the 2015 IMF/World Bank Annual Meetings in Lima, Peru, Oct. 8, 2015. (Photo by Stephen Jaffe courtesy IMF)

China Plans World’s Largest Carbon Market to Curb Climate Change

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By Sunny Lewis

BEIJING, China, October 7, 2015 (Maximpact News) – Within two years China will open a national market-based cap-and-trade system to limit greenhouse gas emissions from some of its largest industrial sectors, President Xi Jinping announced late last month during his visit to the United States.

Carbon emission levels will be capped and companies will have to pay for the right to emit carbon dioxide, the most abundant climate-warming greenhouse gas.

China is the world’s top emitter of greenhouse gases, is the top oil importer after the United States and is struggling with a public health crisis caused by severe air pollution in its largest cities.

China’s new carbon emissions trading system will cover key industry sectors such as iron and steel, power generation, chemicals, building materials, paper-making and nonferrous metals.

The carbon market – similar to the European Union’s and also similar to two regional markets in the United States – is part of an effort to help China meet its climate targets and move toward energy supplies based on nuclear power plants and renewables.

President Xi said China will implement a “green dispatch” system to favor low-carbon sources in the electric grid.

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In a U.S.-China Joint Presidential Statement on Climate Change issued on September 25, the two nations describe a common vision for a new global climate agreement to be concluded in Paris this December. It is scheduled to take effect from 2020.

President Xi said, “We have decided to continue to work together to tackle global challenges and provide more public good for the international community. We, again, issued a joint announcement on climate change. We have agreed to expand bilateral practical cooperation, strengthen coordination in multilateral negotiation, and work together to push the Paris climate change conference to produce important progress.”

President Obama said, “When the world’s two largest economies, energy consumers and carbon emitters come together like this, then there’s no reason for other countries – whether developed or developing – to not do so as well. And so this is another major step towards the global agreement the world needs to reach in two months’ time.”

The Joint Statement builds on last November’s historic announcement by President Obama and President Xi of ambitious post-2020 climate targets.

In their Joint Statement, the two leaders expressed a concrete set of shared understandings for the Paris agreement. On mitigating the impact of climate change, they agreed on three elements of a package to strengthen the ambition of the Paris outcome.

First, they recognized that the emissions targets and policies that nations have put forward are crucial steps in a longer-range effort to transition to low-carbon economies. They agreed that those policies should ramp up over time in the direction of greater ambition.

Second, the two presidents underscored the importance of countries developing and making available mid-century strategies for the transition to low-carbon economies, mindful of the goal that world leaders agreed at the UN’s 2009 climate conference in Copenhagen to keep the global temperature rise below 2 degrees Celsius as compared to pre-industrial levels.

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Third, they emphasized the need for the low-carbon transformation of the global economy this century.

These announcements complement the recent finalization of the U.S. Clean Power Plan, which will reduce emissions in the U.S. power sector by 32 percent by 2030.

Both countries are developing new heavy-duty vehicle fuel efficiency standards, to be finalized in 2016 and implemented in 2019.

Both countries are also stepping up their work to phase down super-polluting hydrofluorocarbons (HFCs) used as refrigerants. Besides destroying the stratospheric ozone layer, HCFCs are greenhouse gases many times more powerful than carbon dioxide.

China’s government has been planning to implement a carbon trading market for years.

The cap-and-trade system will expand on seven regional pilot carbon trade programs that China began in 2011.

Rachel Kyte, World Bank Group Vice President and special envoy for climate change, has been working closely with China in providing technical support to the pilots.

“As China began to pilot through different ways of creating emissions trading systems or emissions reductions systems, we have, through what is called a partnership for market readiness, provided a mutual platform for techno-crafts from different economies in the world to share their experiences of introducing emissions trading systems so that we can all learn from each other,” she said in an interview with China’s state news agency Xinhua on September 30.

“An emissions trading system has existed in Europe for some time. Now we have an auction in California. We have pilots in China. We have a trading system in Korea. Some countries are putting carbon taxes in place,” Kyte said. “We provide a mutual technical platform to let these experiences be exchanged.”

“China is ready to learn from those pilots and move to a national system,” Kyte said, “This will immediately create the largest carbon market in the world. Other carbon markets in the world will want to link with China. This does put China in a leadership position in helping the global economy move to low-carbon growth.”

To ensure a successful carbon trading system, Kyte emphasized the importance of setting the right prices.

“The prices must be set in such a way that the prices reflect the ambition, that the emissions are reduced, that the poor people are treated fairly, that they are transparent and that they can be understood by the consumer,” she said.

China says it will set an absolute cap on its carbon dioxide emissions when its next five-year plan comes into force in 2016.


 

Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: China’s President Xi Jinping and U.S. President Barack Obama at the White House, September 25, 2015 (Photo by Huang Jingwen courtesy Xinhua)
Image 01:Chinese President Xi Jinping (L) and U.S. President Barack Obama meet with the press after their talks in Washington, DC, September 25, 2015. (Photo by Huang Jingwen courtesy Xinhua)
Image 02: This parabolic solar-thermal power plant is adjacent to a large-scale wind farms in China’s north central Shanxi Province. It came online in 2011. (Photo courtesy Shanxi International Electricity Group Co Ltd.)
Image 03: The Fangchenggang nuclear power plant is under construction in China’s Guangxi Province. Operated by China General Nuclear Power Group Co Ltd., it is expected to come online in 2016. (Photo courtesy China General Nuclear Power Group Co Ltd.)

UN General Assembly Embraces 17 Sustainable Development Goals

By Sunny Lewis

NEW YORK, New York, September 28, 2015 (Maximpact News) – Resounding applause filled the UN General Assembly hall Friday as the 193 Member States of the United Nations unanimously approved a new global agenda to end poverty by 2030 and achieve a sustainable future.

Adopted on the UN’s 70th anniversary, the agenda is a plan of action for people, planet and prosperity.

“The new agenda is a promise by leaders to all people everywhere. It is a universal, integrated and transformative vision for a better world,” declared UN Secretary-General Ban Ki-moon.

“It is an agenda for people, to end poverty in all its forms,” Ban said. “It is an agenda for shared prosperity, peace and partnership that conveys the urgency of climate action and is rooted in gender equality and respect for the rights of all. Above all, it pledges to leave no one behind.”

The official adoption came shortly after Pope Francis addressed the General Assembly. “The adoption of the 2030 Agenda for Sustainable Development at the World Summit, which opens today, is an important sign of hope,” said the pontiff.

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The 17 new Sustainable Development Goals, also called the Global Goals for Sustainable Development, aim to end poverty, hunger and inequality, take action on climate change and the environment, improve access to health and education and build strong institutions.

“Never before have world leaders pledged common action and endeavor across such a broad and universal policy agenda,” states the Declaration adopted by the General Assembly.

“We are setting out together on the path towards sustainable development, devoting ourselves collectively to the pursuit of global development and of ‘win-win’ cooperation which can bring huge gains to all countries and all parts of the world,” the Declaration states.

UN Development Programme (UNDP) Administrator Helen Clark, a former New Zealand Prime Minister, said, “Ours is the last generation which can head off the worst effects of climate change, and the first generation with the wealth and knowledge to eradicate poverty. For this, fearless leadership from us all is needed.”

UN Environment Programme (UNEP) Executive Director Achim Steiner said Friday, “Every so often the world takes a historic step forward as a global community. Today, nations of the world moved forward together on a pathway to a sustainable future.”

“For the first time, we have a development agenda that is focused on sustainability in both the developing and the developed world,” said Steiner. “The 17 Global Goals crucially incorporate environmental sustainability and social equity with economic progress. That integration will be critical to a sustainable pathway forward for the planet and its peoples.”

The Sustainable Development Goals build on the Millennium Development Goals (MDGs), eight anti-poverty targets that the world committed to achieving by 2015. Since the MDGs were adopted in 2000, progress has been made, but much more remains to be done.

The Global Goals include issues that were not in the MDGs such as climate change, sustainable consumption, innovation and the importance of peace and justice for all.

In all the enthusiasm for clean sources of energy to limit climate change, the World Coal Association (WCA) does not want to be left behind, even though burning coal emits planet-warming greenhouse gases.

From WCA headquarters in London, Chief Executive Benjamin Sporton welcomed the Global Goals and stressed the link between lack of energy and global poverty.

“Energy poverty is a dire reality,” said Sporton. “Today there are 1.3 billion people across the globe without access to electricity. This is equivalent to the entire population of China.”

“It is also imperative that we adopt the use of the best available technology to ensure coal is used as cleanly as possible,” Sporton said. “This includes high efficiency, low emissions (HELE) coal technologies and carbon capture and storage. HELE coal technologies provide significant immediate CO2 reductions.”

For UN leaders, raising public awareness of the Global Goals is the first order of business.

The UNDP held Social Good Summits in more than 100 countries, running in parallel with the three-day Sustainable Development Summit in New York.

In the first collaboration of its kind the Global Goals were featured on 19 major digital platforms and internet portals including the Google homepage, Yahoo, The Huffington Post and Twitter with a potential reach of up to two billion people.

The world’s largest partnership of 26 mobile network operators sent out almost one billion text messages and connected over 4.8 billion customers in over 100 countries with a message about the Global Goals.

Hans Vestberg, resident and CEO of Ericsson, the Swedish multinational provider of communication technology and services, said, “Uniting leaders in the industry to bring the important message of the Global Goals to billions of people demonstrates how technology is such a powerful force for good.”

Google unveiled the crowd-sourced film “We the People” written by Richard Curtis and Mat Whitecross when the Goals were adopted on the September 25.

No Point Going Half Way“, a short film by Richard Curtis featuring Jamaican sprinter Usain Bolt explains why we should finish what we started with the Millennium Development Goals, as we can end poverty by 2030 and tackle inequality and climate change.

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Curtis, founder of Project Everyone, said, “The digital world is the definitive example of how we are all connected. Its collaborations like this that will help us to be the first generation to end extreme poverty, the most determined generation in history to end injustice and inequality, and the last generation to be threatened by climate change.”

Pearl Jam, Beyoncé, Ed Sheeran and Coldplay headlined the 2015 Global Citizen Festival, a free ticketed event on the Great Lawn in New York City’s Central Park on September 26. See the video here at Global Citizen You Tube Channel.

Curtis, who serves as the creative director for the 2015 Global Citizen Festival, said, “We want to give the Global Goals for Sustainable Development the noisiest launch in history in the belief that the more famous they are, the more effective they will be.”

“My particular job is to turn the Festival into an hour-long TV program,” said Curtis, “all part of a huge campaign to get the word of the Goals out through TV, cinema, schools, on-line and through Radio Everyone, a unique global network of broadcasters and talent.”

The YouTube homepage is featuring Global Goals videos for a week from September 25. YouTube live streamed the Global Citizen Festival on September 26, also featured on the Google search homepage.

MSN, which reaches 400 million people a month, is creating a Global Goals “hub” on its platform.

The Wikimedia Foundation is encouraging Wikipedia’s volunteers to translate articles covering the goals into as many languages as possible for its hundreds of millions of users.

Baidu with its 500m+ monthly users will create a special Baidupedia page dedicated to the Global Goals Campaign, containing all the key information in Chinese, including the 17 Goals and the ‘We The People’ Video.

The Bing homepage will feature the Global Goals on September 28. Yahoo with one billion users, will feature dedicated editorial content on each goal on both Yahoo and Tumblr.

Skype will be supporting the World’s Largest Lesson through Skype in the Classroom reaching two million educators.

Over the last four years, through the Global Poverty Project people have taken nearly three million actions against extreme poverty. These actions have resulted in 87 commitments and policy announcements, including cash commitments valued at US$18.3 billion.

UNBuildingGoalsProjection

Back at UN Headquarters, Secretary-General Ban said Friday, “The true test of commitment to Agenda 2030 will be implementation. We need action from everyone, everywhere. Seventeen Sustainable Development Goals are our guide. They are a to-do list for people and planet, and a blueprint for success.”

 The 17 Global Goals are:

  1. End poverty in all its forms everywhere
  2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
  3. Ensure healthy lives and promote well-being for all at all ages
  4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
  5. Achieve gender equality and empower all women and girls
  6. Ensure availability and sustainable management of water and sanitation for all
  7. Ensure access to affordable, reliable, sustainable and modern energy for all
  8. Promote sustained, inclusive and sustainable economic growth, full, productive employment and decent work for all
  9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
  10. Reduce inequality within and among countries
  11. Make cities and human settlements inclusive, safe, resilient and sustainable
  12. Ensure sustainable consumption and production patterns
  13. Take urgent action to combat climate change and its impacts
  14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
  15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
  16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  17. Strengthen the means of implementation and revitalize the global partnership for sustainable development

As of August 2015, there were 169 proposed targets for these goals and 304 proposed indicators to show compliance.

In addition: Here is a great data visualization infographic on impact of construction


 Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image : Delegates celebrate in the General Assembly Hall following the adoption of the post-2015 development agenda, September 25, 2015 (Photo by Cia Pak courtesy United Nations)

Image 02: Pope Francis and UN Secretary-General Ban Ki-Moon at UN Headquarters in New York, September 25, 2015 (Photo by Devra Berkowitz courtesy United Nations)

Image 03: Beyoncé and Eddie Vedder of Pearl Jam sing Bob Marley’s Redemption Song at the Global Citizens Festival in New York’s Central Park, September 26, 2015 (Photo by Niran Shrestha via Instagram)

Image 04: Ahead of the United Nations Sustainable Development Summit from September 25-27, and to mark the 70th anniversary of the United Nations, a 10-minute film introducing the Sustainable Development Goals is projected onto the UN Headquarters Secretariat building and General Assembly building. (Photo by Cia Pak courtesy United Nations)

Aligning Institutional Investment With Sustainable Development

By Sunny Lewis

NEW YORK, New York, September 22, 2015 (Maximpact News) – The largest public pension fund in the United States, the California Public Employees’ Retirement System (CalPERS), with upwards of US$300 billion in assets, takes sustainability seriously.

Just days ahead of a United Nations summit in New York that will adopt new Sustainable Development Goals to guide international efforts through 2030, CalPERS has joined the UN Environment Programme (UNEP) in issuing a report that calls on regulators to build a new culture of sustainable investing.

Entitled “Financial Reform, Institutional Investors and Sustainable Development: A review of current policy initiatives and proposals for further progress,” the report calls for proactive policies putting sustainability at the core of new institutional investment frameworks.

Henry Jones, who chairs the CalPERS Investment Committee, said, “At CalPERS we have no doubt that our focus on sustainability is entirely consistent with our fiduciary duty – indeed it is an essential part of it.”

JonesHenryHenry Jones heads CalPERS Investment Committee (Photo courtesy CalPERS)

“Where doubts on this score remain, they must be dispelled,” Jones said. “And we need institutions that have the knowledge, the skills and the ways of working that are required to embed sustainability in their investments – to manage the risks it brings, and to capitalize upon the opportunities it offers.”

In his forward to the report, Jones writes, “Of all the sustainability challenges we face, climate change is one of the most pressing.”

“This report is being published just a few weeks before the Paris Climate Change Conference. At CalPERS, we earnestly hope the world’s governments will reach an ambitious global agreement to address climate change. Bold action is needed in particular to introduce stable, reliable and economically meaningful carbon pricing, and to strengthen regulatory support for clean energy. This will enable us, as investors, to manage the risks and take the opportunities that climate change brings. We hope every country will reflect on how it can best address these challenges,” Jones wrote.

The report’s author, Rob Lake, is a UK-based independent responsible investment advisor and expert, working with asset owners.

With an estimated annual financing gap of up to US$7 trillion a year in infrastructure investments alone, the global financial system, worth more than US$300 trillion, has a potential to transform the international economic landscape to better serve the needs of humanity, Lake’s report concludes.

The report had its genesis in the Inquiry into the Design of a Sustainable Financial System initiated by UNEP in January 2014 to advance policy options that could improve the financial system’s effectiveness in mobilizing capital towards a green and inclusive economy.

Nick Robins, who serves as co-director of UNEP Inquiry, said, “A package of measures is needed to deliver the full sustainability potential of institutional investors. Disclosure is important, but without effective governance frameworks and incentives, this will not drive sufficient change.”

The report shows that policy intervention has evolved from focusing on disclosure obligations and statements about investors’ core legal duties to a “second generation” approach that addresses the synergy between sustainability and other policy objectives.

CalPERSbuildingSolar panels on the roof of CalPERS’ Sacramento, California headquarters generate some of the electricity that powers the building. (Photo courtesy CalPERS) – Building for the Future, Protecting the Environment.

Seven critical policy objectives that hold the strongest potential for positive change are explored in the report together with 14 policy tools to achieve them.

The seven policy objectives are:

  1.  Aligning Institutional Investment System Design with Sustainability
  2.  Removing Policy Barriers
  3.  Stimulating Demand for Investment that Integrates Sustainability
  4.  Strengthening Asset Owner Governance and Capabilities
  5.  Lengthening Investment Horizons
  6.  Aligning Incentives along the Investment Chain
  7.  Ensuring Investor Accountability

The 14 policy tools are:

  1.  The Design of Pension Systems Investment
  2.  Performance Measurement
  3.  The Legal Duties of Investment Institutions
  4.  The Legal Duties of the Directors of Risk-Taking Financial Institutions
  5.  Solvency and Risk Regulations
  6.  Prudential Regulation
  7.  Investor Disclosure Rules
  8.  Corporate Disclosure Rules
  9.  Fiscal Incentives
  10.  Rules on Equity and Credit Research
  11.  Investor Rights, Codes and Stewardship
  12.  Risk Mitigation and Market Development for Green Assets
  13.  Soft Law Sustainability Frameworks
  14.  Professional Qualifications and Knowledge Transfer

The report concludes, “Enormous potential exists to pursue new policy initiatives designed to achieve sustainability goals through the institutional investment chain while simultaneously strengthening other public policy objectives: better governed asset owner institutions that serve their beneficiaries more effectively, enhanced prudential regulation, increased economic welfare meeting energy, water and food needs, and restored public trust in the financial system.”


 

Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

World Forestry Congress: Forests Are ‘More Than Trees’

by Sunny Lewis

DURBAN, South Africa, September 16, 2015 (Maximpact News) – Investing in forestry means investing not only in trees but in people and in sustainable development, delegates to the 14th World Forestry Congress in Durban affirmed last week.

Held with the theme “Forests and People: Investing in a Sustainable Future,” the week-long meeting from September 7-11 took place under the auspices of the UN Food and Agriculture Organization (FAO). The first World Forestry Congress was held in Rome in 1926; meetings have taken place roughly every six years since.

This was the first World Forestry Congress organized in Africa. Nearly 4,000 delegates from 142 countries represented governments and public agencies, international organizations, the private sector, academic and research institutions and nongovernmental, community and indigenous groups.

Congress Secretary-General Trevor Abrahams told delegates of the importance of restoring hope, dignity and social capital for sustainable forest management, particularly amongst youth.

Prince Laurent of Belgium called for an eco-contribution from cancelled debts to be allocated to a fund to safeguard the environment.

Sessions focused on people-centered forestry, socioeconomic issues, and the role of forests, trees and forestry in national economic development.

In their outcome document, the Durban Declaration, delegates offered a vision of forests that play “a decisive role” in ending hunger, improving livelihoods and combating climate change.

The Durban Declaration says, “Forests are more than trees and are fundamental for food security and improved livelihoods. The forests of the future will increase the resilience of communities by providing food, wood energy, shelter, fodder and fibre; generating income and employment to allow communities and societies to prosper; harbouring biodiversity; and supporting sustainable agriculture and human wellbeing by stabilizing soils and climate and regulating water flows.”

“Sustainable forest management requires integrated approaches to land use in addressing the drivers of deforestation and conflicts over land use,” the declaration states. Gender equality and the enthusiasm of the youth as a source of inspiration were emphasized.

“The declaration reflects the extremely rich and diverse set of viewpoints and experiences of all participants in the Congress, who recommended ways to make the vision a reality,” said Tiina Vähänen, deputy director of FAO’s Forest Assessment, Management and Conservation Division.

An international five-year action plan to recognize the role of trees and forests in ensuring sustainable management of one of the world’s largest sources of freshwater was introduced at the meeting.

At a panel discussion on investments to build a resilient future, World Agroforestry Centre chief Tony Simons said that for sustainability and resilience to be “operational and not just aspirational,” managers must focus on individual action; sustainable production and consumption; and use the UN’s Sustainable Development Goals as a platform to promote better forestry.

Simons said there is a dearth of bankable projects. He said investors need to see strong, viable pilot cases before they can commit resources.

At the Congress, FAO released its Global Forest Resources Assessment 2015, covering 234 countries and territories.

It finds that the world’s forests continue to shrink as populations increase and forest land is converted to agriculture and development. Still, over the past 25 years the rate of net global deforestation has slowed by more than half.

Roughly 129 million hectares of forest – an area almost equal in size to South Africa – have been lost since 1990, finds the FAO’s assessment.

Yet an increasing number of forest areas have come under protection, while more countries are improving forest management with better monitoring of forests and a greater involvement of local communities in planning and policy development.

FAO Director-General José Graziano da Silva said, “The direction of change is positive, but we need to do better. We will not succeed in reducing the impact of climate change and promoting sustainable development if we do not preserve our forests and sustainably use the many resources they offer us.”

During the closing dinner gala, Gertrude Kenyangi of Uganda was presented with the Wangari Maathai Forest Champions Award 2015 in recognition of her extraordinary efforts to improve and sustain forests in southwestern Uganda and the people who depend on them. The award carries a cash prize of US$20,000.

Kenyangi described how the Women and Environment Development Organization she founded supports women to lead the way in grassroots agro-forestry initiatives in Uganda and across Africa.


Featured Image: Big trees in a Ugandan forest (Photo by Annette Bouvain creative commons license via Flickr)

Slideshow Images: 01: Miss Earth South Africa 2014, Ilze Saunders, with drummers, creates excitement in the corridors of the World Forestry Congress, September 8, 2015 (Photo copyright FAO / Giuseppe Carotenuto, Editorial Use only via Flickr) 02: Flashmob of youths at the World Forestry Congress, Durban, South Africa, September 9, 2015 (Photo copyright FAO / Giuseppe Carotenuto, Editorial Use only via Flickr) 03: Government officials enter the iNkosi Albert Luthuli Convention Center in Durban, KwaZulu-Natal, South Africa on opening day of the World Forestry Congress, September 7, 2015 (Photo courtesy Government of South Africa)

Social Investors vs. Social Businesses: Who will win the struggle for the future of SRI investing?

little box boxer knocks out dad boxerBy Marta Maretich @maximpactdotcom

We all like to talk about how the social, responsible and impact (SRI) investing sector is growing—and current research indicates that it is flourishing, with more capital and a wider range of investors now entering the field.

All that is good—and it’s what we’ve all be working for. Yet if there’s one thing experience has taught us about deploying the new market approaches to generating social and environmental benefit, it’s that the detail matters at least as much as the big picture.

A closer look at the way the sector has developed in recent years reveals more than just growth: There’s been an important shift in the story we’re telling ourselves about SRI investing. A movement that began with an emphasis on social entrepreneurs and social businesses serving the needs of beneficiaries has become preoccupied with investors and the mechanisms of the marketplace. What caused this shift to happen? And is it necessarily a bad thing for SRI investing?

Changing the subject

As we’ve tracked the growing body of research documenting the exponential growth of the SRI marketplace, we’ve noticed something strange:

Once most of the literature in the field came from social investors, like Root Capital, and accelerators, like the Skoll Foundation, who were actively engaged in developing socially beneficial businesses.

Today the focus has shifted away from social businesses and their beneficiaries. Instead, sector bodies, like the WEF, the G8 Social Impact Investment Taskforce, UK SIF and USSIF, as well as big financial advisory firms (EY, Deloitte, Citi to name just a few), are turning their analytical lenses on investors and markets in an effort to demonstrate (and, in some cases, capitalize on) the potential of the new SRI investment approaches.

In a sector that has its deepest roots in social entrepreneurship, microfinance and microlending, this change may seem surprising, even worrying. Why has it happened?

1. Investors demand attention

First, investors are driving the market for SRI investing and this has lead financial firms and other analysts to study them, and their investment habits, more intensively.

As one example, a USSIF trend report for 2014 tells us that: “Money managers increasingly are incorporating ESG factors into their investment analysis and portfolio construction, driven by the demand for ESG investing products from institutional and individual investors and by the mission and values of their management firms. Of the managers that responded to an information request about reasons for incorporating ESG, the highest percentage, 80%, cited client demand as their motivation.”

This is one more piece in a growing body of evidence that shows personnel in financial firms finally waking up to the fact that their clients are interested in SRI investing. At the same time, they’re realizing that the ability to use these approaches is likely to be an important selling point for their businesses in the future.

This realization comes rather late in a sector that saw small, socially concerned family offices, like Omidyar, pioneering the practice of impact investing back in 2007. But with a new generation of private investors, led by wealthy young millennials and women, now asking for SRI investment options, the message is finally getting through. Mainstream financial firms are focussing more of their attention on socially-motivated investors and promoting SRI offerings to attract what they now realize is a growing client base.

2. Mainstreaming forces a market focus

The second reason for the focus on investors and markets has to do with the recent raft of mainstreaming initiatives for social investing.

In an effort to draw larger investors into the SRI marketplace, these initiatives sought to gather sector information, such as existed, into reports aimed at larger investors. The reports were designed to demonstrate that social investing is, in fact, a real market.  They presented their case in the language of the mainstream and included statistical data, graphs, tables and pie charts—the works. Everything about them was engineered to convince the heavy hitters that SRI investing was something they could engage in securely, responsibly and even profitably.

Several of the most important reports in this vein have been produced by the WEF as part of a series aimed at large institutional investors, including insurance firms and pension funds. The G8 Social Impact Investment Taskforce and its various working groups also produced material aimed at the largest investors including national governments thinking of entering the SRI market.

All this is a world away from the early literature on social investing, which emphasized its impact on social entrepreneurs and beneficiaries, often people in emerging economies and those at the bottom of the pyramid.

Yet the motives behind the mainstreaming push were good. They reflected the commitment of a few far-seeing financiers, like Sir Ronald Cohen, who realized the potential for scaling social and environmental benefit through using the powerful mechanisms of global finance. And, to judge from the buzz around ESG at Davos this year, the approach has been successful in getting mainstream finance to take SRI more seriously.

Aren’t we forgetting something?

This suggests that the shift of focus to markets and investors was needed to get bigger financial players to engage with social benefit. Yet in other ways the rush to mainstream may have been a distraction from some of the most important challenges still facing our sector.

These include fundamental questions about the role of business in society and the role capital plays in supporting the development of companies.

The mainstreaming of SRI investing, though it may be beneficial, doesn’t challenge the status quo behind the international capital markets. Rather, it works with the prevailing forces of global finance in an attempt to turn at least some of them in a more favorable direction. This approach is pragmatic—and its unthreatening nature partly accounts for its popularity at places like Davos—but for some in our sector it doesn’t go far enough toward bringing about a permanent change to the way we do business.

On a more down-to-earth level, the recent focus on investors and markets leaves out what many think is the most important element of all in this equation: Socially beneficial businesses.

We have a lot of experience in operating for-profit businesses and non-profit organizations that deliver social benefit, but socially beneficial businesses are still a relatively new kind of animal to us. Despite progress in the sector, we still have a lot to learn about how to operate companies that are financially sustainable and able to deliver extra-financial benefits at the same time.

What really matters

The commitment to pursue benefit alongside profit, when genuine, touches every aspect of a business. Leadership, governance, operations, compliance and reporting (among other things) are all affected and we need to understand much more about how this works in practice. The influence of investors, especially those that take an active role in governance, is yet another factor, still little studied or understood, in the development of social businesses.

With so much still to learn about how to “do” socially beneficial business, the recent emphasis on investors and mainstreaming markets can seem misplaced. However, it makes sense in one important way: Only by doing more socially beneficial business will we ever have a chance to find out what really works and develop effective models. And only by attracting sufficient capital will we have the opportunity to do more socially beneficial business.

Time to re-focus—again

So, should the story of our sector be one of global financial markets and canny investors, or should it be one of heroic social entrepreneurs and white-hat social businesses?

The answer is: It needs to be both.

But now that the larger markets and a more ample pool of investors are showing interest, it’s time for the sector to shift its focus back to actually making socially beneficial businesses work across a range of global contexts.

It’s emerging that one of the dangers of mainstreaming is that social businesses can find themselves forced back into the mold of regular companies with no social benefit goals. To avoid this, they need clearer roadmaps for how to manage and develop their companies, especially as they grow to scale. Investors and markets also need to find better ways to engage with socially beneficial businesses in order for the partnership to work successfully.

More research in both these areas is needed. The question is: Who will do this work and so help write the next chapter in the ongoing story of socially beneficial business? Could it be you?

Women Rule: Why the Future of Social, Sustainable and Impact Investing is in Female Hands

Group of female social investors

By Marta Maretich @maximpactdotcomMaximpact.com

In the early days of the social investing movement, women and girls were arguably seen more as program beneficiaries than financial movers and shakers.

Social lenders changed their view when they realized that focusing initiatives like microfinance lending on women turned out to be the most effective way to make whole communities more prosperous. This early insight quickly led to further programs targeting women, including special prizes and support networks for female entrepreneurs and the advent of gender lens investing—an approach to creating female-centred portfolios that puts capital behind women in a more systematic way.

Positive as all this was, things have moved on significantly in the world of social investing. No longer only the beneficiaries of social finance, today women are building a complete ecosystem of social investing that has female financial power at its heart.

Women are wealthy—and socially conscious

Global wealth demographics have their part to play in this trend. Women—or at least some women—are richer now than ever before. And they’re soon to get even richer.

Taking the US as one example, women now control almost half of the estates valued over $5 million and they stand to inherit some 70% of the $41 trillion to be inherited over the next four decades in the largest intergenerational transfer of wealth the world has ever seen. By 2030, roughly two-thirds of the private wealth in the US will be held by women.

This wave of wealth is set to land in the laps of female investors who have been shown to have a more positive attitudes toward social investing than their male counterparts. Half of wealthy women in a recent survey expressed an interest in social and environmental investing while only one-third of wealthy men did. 65% of women thought social, political and environmental impacts were important, as compared to just 52% of men.

Female advisors, step up!

Surveys show that financial firms are not currently meeting the needs of this growing pool of wealthy female clients and many are taking special measures to reach them. Part of the problem is that there are still so few female advisors out there: Only three in 10 advisors are women, according to a 2013 Insured Retirement Institute study, yet 70% of women seeking advisors say they would prefer to work with a woman.

The good news is that the female advisors now at work are already a positive force for social investing. A report by the Calvert Foundation showed female advisors to be more interested in using sustainable investing funds (59%) than their male counterparts (39%). They were more likely to know about alternative investing opportunities and more likely to offer them as options to their clients, too.

More female MBAs?

Boosting the number of women in financial advisory roles could, then, be a way of extending the reach of social investing to more women. But where will they come from?

In theory, a new generation of female advisors is currently learning its trade in business schools around the world. Yet due to what’s often condemned as a male-dominated culture, many MBA programs have poor track records of enrolling and retaining female students and this has the effect of limiting the number of female graduates.

That may now be changing with more business schools making concerted efforts to become more female-friendly in order to attract women students. Some, like Harvard, are actively reaching out to women in an effort to create a more balanced student body. Still others have succeeded and now boast student bodies where females outnumber males. It’s a positive move and, if their efforts pay off, we may see an increased number of female financial advisors starting to come through the system.

When they do, they may well be better prepared to advise on social investments than their predecessors. In a parallel trend, many MBA programs are now offering more training in social, responsible and impact investing to all students, including female ones. This means that more female business graduates will come out with degrees that prepare them to take up active roles in the social investment marketplace.

Women-run investment firms

At the same time, female financial expertise is taking the helm in more direct ways through a growing number of women-run venture capital firms and all-female investor networks. Firms like Cowboy Ventures, Aspect Ventures, Broadway Angels and Aligned Partners are run by women, for women investors.

Their presence in the start-up marketplace disproves the myth that women investors are risk averse. And, even when the firms don’t specifically target women-run businesses, they seem to be having a catalytic effect on female-founded companies: Women-run investment firms reported receiving more pitches from female entrepreneurs because of their networks. As a consequence, a greater percentage of their investments—up to 40% in some cases—have been in companies started by women.

Elsewhere, women are establishing venture funds specifically targeting female entrepreneurs and focusing on female markets. High Note, run by Genevieve Thiers, seeks to will invest in companies run by women who are solving problems for women.

Women in the boardroom — finally!

Female venture capital firms are a good thing for socially conscious female investors, and, from the looks of it, a good thing for female-run businesses, too. But there’s an even more significant advantage to them: they will put more women on the boards of more companies.

How does that work? Increasingly, venture capitalists claim voting seats on the boards of the companies they invest in. With more female VCs, more of those seats will be occupied by women, giving them more influence over the way businesses grow and develop.

There’s no guarantee that the presence of VC women on boards will have a positive effect for social investing — women, after all, can be just as profit-obsessed as men. Yet, given the interest shown by women in using their capital to back social and environmental good, it certainly could. It will also go some way toward correcting the woeful lack of women on corporate governing boards generally. (Other methods, including quotas, are being tried in some countries, including Germany and the UK.)

In social enterprises, the gender picture in the boardroom is slightly more female positive than the norm. Social Enterprise UK’s 2011 State of Social Enterprise Survey found that 86% of social enterprise leadership teams included at least one female director. By contrast, only 13% of the members of the Institute of Directors, a UK organization for corporate board members, are women.

Looking to the future

Capital, expertise and leadership: these are some of the things more female involvement promises to bring to the social investing sector. Female investors, working with female advisors and investment firms, will be able to do more for female social entrepreneurs as well as social businesses who serve the needs women.

This is a long way from women as beneficiaries and it’s all good. But it’s important to point out that it won’t only be women who benefit from women becoming more engaged social investors.

Changes to the gender balance in social investing are part of a wider expansion in the role of women in business and finance. With greater influence, more autonomy, increasing confidence and shedloads of wealth behind them, women are increasingly in a position to change the way the world invests—and do great things for the planet and its people.

Can’t wait to see what happens next.

Effective Two-Way Engagement: A New Gold Standard for SRI Investing

cartoon of men communicating across a chasmBy Marta Maretich @maximpactdotcom

At its most effective, communication is a two-way process. Developments in engagement practices between companies and social, responsible and impact (SRI) investors are showing us that this idea is now more applicable than ever.

New expectations and standards are growing up around investor/investee engagement in the SRI investing sector. These are driven by a number of factors including calls for more transparency and accountability, the rising power of investors in the boardroom and emerging evidence that attending to extra-financials, like sustainability, has positive effects on financial performance.

In practice, the pressure to engage—and the need to find effective ways to do this through communication—comes from several directions.

Investors want more extra-financial information

The need for engagement is impelled by a increase in socially concious investors, notably wealthy millennials and women, who are demanding detailed ESG performance information about the companies they invest in. Recent research reveals that investors (and their advisors) are relying more heavily on extra-financial disclosure when deciding where to place their capital. Poor performance in ESG areas, or a lack of disclosure about them, will make them say no to an investment.

Companies are responding to this increased scrutiny by improving communications around ESG extra-financials. This may include making performance information more freely available on websites and other media, or training company spokespeople to incorporate extra-financials into their communications.  It may also mean embracing integrated reporting, which delivers performance information in extra-financial areas and provides the content for communication in these areas.

In another trend, the corporate world is seeing increased demand for more up-to-the minute and on-demand performance information. Facilitated by web-based services, real-time financial performance information is already a reality for some companies and it could shortly become a necessity for all. If that happens, companies will need to create systems for delivering extra-financial information this way—and for receiving investor feedback.

Investors expect more influence over companies

Investors are becoming more active in their efforts to influence the companies they invest in.  In a trend for more investor engagement, industry leaders like Blackrock are declaring their intentions to engage with investees on governance matters, strategy and operations, with ESG issues a major focus. Evidence of increased engagement on extra-financials can be seen in the record number of proxy resolutions filed by investors seeking corporate disclosure and action on a range of environmental and social issues, seen here in the Sustainable Investment Institute’s Proxy Preview 2015.

To deal with increased pressure from investors, businesses are establishing direct engagement strategies, and communication is an important part of these. Direct engagement strategies identify investor concerns and priorities, then pro-actively seek to address them before they become an issue. Communications may involve a range of measures including targeted investor roadshows, making more information accessible online and one-to-one communication between investors and senior managers.

Companies need to know more about SRI investors

The burden of communication isn’t solely on the side of companies. Investors, too, need to communicate clearly for effective engagement, especially when they are SRI-focused.

With the increasing influence of investors in the boardroom, it’s more important than ever for companies to seek out investors who will support all parts of their strategy. This is particularly true when it comes to businesses aiming to produce both profit and benefit—blended value, impact and profit-with-purpose businesses—and those for whom ESG goals are a core part of their business model.

For these kinds of organizations, investors who might work against the overall strategy, for example pushing through an unfavorable exit or IPO, should be avoided. To make a good match, companies need adequate information about potential investors before they partner with them, including insight into their goals, priorities, values, governance stance and voting policies.

According to findings by the Conference Board, a US governance think tank, investors should communicate clearly and transparently with potential investees about themselves, providing information on their own engagement policies and track record when voting as members of the board. Information about their stance on extra-financial issues, such as governance and sustainability, should be easily accessible to investees and should form a point of discussion during negotiations. Triodos Bank is one SRI investor that makes such information freely avaliable to investees and the public.

Engagement services for the future

With engagement between investors and investees becoming more important, the question of how best to engage is now taking center stage in SRI investing.

In mainstream financial markets, Broadridge has risen to become “the most important firm on Wall Street that you’ve never heard of” by providing investor engagement services, including proxy and shareholder communications, to companies. However, it’s questionable whether Broadridge’s engagement methods will prove as effective for the SRI sector, where communicating ESG extra-financials and impact metrics will be as important communicating about the traditional bottom line.

This suggests an opportunity for service providers to step up to meet the needs of a growing marketplace of SRI investors and companies. By providing high quality, innovative engagement services that help investors and investees communicate about a broader range of performance criteria, an ESG- and impact-oriented engagement service company could fill the gap and become the next Broadridge in a vibrant new marketplace. Any takers out there?

Why Social Investors Must Get Behind the Circular Economy

recycling symbol superimposed over image of trash

By Marta Maretich @maximpactdotcom

What goes around and around and comes out better for the planet? By now, most of you will guess that the answer is the circular economy.

But what is the circular economy? It’s an approach to manufacturing based on the principles of reuse, repair, remanufacture and recycle. The point is to preserve finite resources, such as fossil fuels, which are running out. At the same time, the principles provide a way to manage supply chains and design waste out of the manufacturing equation.

See examples of circular products

Going around is gaining ground

With roots deep in a number of different design, ecology and industrial movements including regenerative design, biomimicry, and the recent Cradle to Cradle phenomenon, the Circular Economy is less a new idea than a coming-together of several strands of thought.

Today, the concept is gaining ground in a big way with high-profile leadership from circumnavigator Dame Ellen Macarthur and her foundation as well as support from the WEF. Big companies as diverse as Coca-cola and Caterpillar, a heavy machinery manufacturer, are embracing its principles.

This rise in popularity is generating a whole ecosystem for the circular economy. New service providers, funds and accelerators are already popping up to fuel the trend. Research, such as this Nesta report on data use, is beginning to shine a light on what makes circular approaches successful. Events and conferences and even DIY toolkits are proliferating.

Why the circular economy still needs social investment

So what does this craze for the circular mean for social investors?

Despite its popularity, there are indications that this new approach to manufacturing needs the support of social investors. Significant barriers remain to building and scaling the circular economy and one of these is financial.

There’s evidence that companies making the transition to circular economy principles are having trouble raising the finance they need to adopt circular business models designed for sustainability. This is because companies in transition have special financial requirements that mainstream investors and venture capitalists are reluctant to meet. First, they must finance the ownership of products for a longer time than in a linear model. Second, existing businesses need significant investment to change established systems, such as setting up a different revenue model.

Doubts about the practicality of adopting the circular economy are being felt at high levels. In 2014, the European Commission rejected a proposal that would have established circular principles at the center of policy across the Eurozone. Though EU president Frans Timmermans promised a “more ambitious proposal” by the end of 2015, the Greens and other environmental campaigners are concerned about the EU’s commitment to sustainability and the influence of big business over government policy.

Opportunities for “circular portfolios”

All this underlines the circular economy’s continued need for social investment capital. On the positive side, the rise of the circular economy should offer tempting investment opportunities for investors, especially if, as is planned, standards can be developed.

Investors could engage in this connected market in a number of ways. First, they could put their money into funds whose portfolios focus on companies that use circular economy approaches. Themed funds in sectors such as agriculture, food retail, clothing manufacture and waste management all have potential to benefit from backing the circular way of working.</>

Alternatively, social investors can invest directly in companies that take a circular approach, or in a clutch of companies along a circular supply chain. Imagine a “circular portfolio” that includes a company that produces the raw materials, the manufacturer that turns those materials into a consumer product and the recycler that turns any product waste back into a usable commodity.

Social investors can also benefit from adopting the circular mindset and applying it to their own use of capital. By treating capital as a resource to be preserved, conserved and recycled in sustainable systems, social investors have the opportunity to deepen their commitment to this new way of doing business. The analogy even extends to the idea of waste and byproducts. Just as businesses need to design them out of their processes, social investors should avoid producing financial negatives such as toxic debts, crushed economies and unhealthy markets.

Overall, the rise of the circular economy is a positive sign that the world is ready to change consumer culture and seek more sustainable solutions, and that’s good news for us. Beyond this, the circular economy is in step with a sector-wide push for collaborative, systemic ways to tackle global problems with both resource scarcity and waste. It’s joined-up sustainability logic for manufacturing, and that’s something we social investors certainly can, and definitely should, support.

Bare It All: ESG disclosure is the new obsession of investors and businesses alike

businessman opening shirt to reveal superhero costume with green energy theme

By Marta Maretich @maximpactdotcom

Here’s a riddle: Investors are demanding them. The global business community is boosting them. Companies large and small are trying to figure out how to produce them. What are they?

You guessed it: Extra-financial performance results—the environmental, social and governance (ESG) metrics that demonstrate that a company is acting responsibly as it conducts its business. In a major shift in global attitudes toward sustainability and the role of business in society, this fast-growing area is now a major focus for businesses and investors alike.

Not new, but moving fast

The movement behind making ESG criteria for investing has been gaining ground for four decades, with pioneers like Hazel Henderson and Joan Bavaria of Trillium leading the charge. But the pace of change has recently been accelerating across non-profit, public and business sectors alike leading more investors to look to ESG when making decisions.

Several factors are driving the shift. Increased concerns about the effects of climate change are leading citizens and governments to demand tougher environmental regulations for businesses (E). Social factors (S), such as human rights abuses, are now recognized as material risks. Poor governance is widely seen as a factor in the financial crash of 2008, sparking investor demands for more information about the G in ESG. Meanwhile, evidence is mounting that shows companies that pay attention to extra-financials actually perform better in the long term.

Extra-financial and ultra-influential

All these factors contributed to making 2014 a watershed year for investment decisions based on extra-financial factors. Fossil fuel divestment was one area where investors were seen to make decisions for reasons other than financial performance.

Investors controlling billions of dollars, such as the Rockefeller Brothers, The Wallace Fund and Ben and Jerry’s, all divested their holdings in fossil fuels in an effort to combat climate change. More of this is coming. Major institutions such as museums, universities, city governments and pension funds are all feeling the pressure to divest.

Private investors are an important part of the trend with some 70% now expressing an interest in investing with a conscience. As a result, asset managers in many parts of the industry are climbing on board and looking to expand their expertise in what is a strong growth area of the market.

Changing attitudes to ESG in business

These trends are putting new ESG-related obligations on companies and investors alike.

For companies, there is increased pressure to track and report ESG performance, an activity that costs organizational resources and must be carefully managed for good results. Luckily, attitudes toward ESG are changing across the business world. Top executives no longer see it as mainly a reputational or branding exercise. Rather, ESG-competence is emerging as good business practice that can foster innovation, lead companies to identify efficiencies and help manage risks. Embracing ESG reporting provides greater access to capital, too. It’s a necessity in a climate where investors will turn down deals with companies that don’t disclose well enough or don’t disclose at all.

Across the world, companies are racing to incorporate ESG into their monitoring and reporting frameworks. To help them, the Global Reporting Initiative (GRI) provides a range of resources, including this one for absolute beginners. GRI starter kit. Other groups, like the EVCA, a European group of private equity investors, have developed their own framework to help businesses disclose ESG performance.

Investors incorporate ESG in decision-making

The EVCA framework—for businesses but developed by investors—is one example of how seriously investors are now taking ESG. And there is further evidence that the investing sector is taking positive steps to get better at incorporating extra-financials into decision-making processes.

The UN-sponsored Principles for Responsible Investing (PRI) initiative has been around since 2005 and today has 1,371 signatories around the world. The PRI provides a framework for incorporating ESG concerns into investment practice as well as reporting. It now includes a climate change pledge for asset owners.

Global investors are banding together around ESG, joining groups like the Global Sustainable Investor’s (GSI) Alliance. The Alliance supports progress in sustainable investing by identifying trends and acting as a network for national groups. It has attracted important national members including Europe’s Eurosif, British UKSIF, American US SIF, Canadian RIA and the Asian region ASrIA.

Standards are also being developed to help investors compare ESG performance across companies. The CDP amasses disclosure data on climate change issues and works with investors and companies to improve performance and reporting. Today its membership includes more than 822 institutional investors representing in excess of US$95 trillion in assets. In 2014 the CDP scored over 4700 companies on climate-related performance.

Meanwhile, the Sustainability Accounting Standards Board (SASB) is establishing the materiality of sustainability issues, applying an accountancy approach to determining their value. Operating as a non-profit, SASB makes its standards in areas like healthcare, infrastructure and renewable resources available online to investors and businesses alike. Like the CDP and the EVCA, SASB offers paid consultancy services to help clients embed ESG into their reporting and decision-making processes. (Note that this kind of service provision around ESG disclosure looks set to be a growth area for the sector.)

Burdens and opportunities

Extra-financial disclosure presents both a burden and an opportunity for companies and investors. On the burden side, it takes time, resources and in some cases a profound change of attitude for companies and those who capitalize them to embrace ESG and make it part of normal business practice. On the opportunity side, the link between non-financial performance and long-term organizational health and profitability is becoming clearer. That of course leaves aside the core argument for ESG reporting: that it is a powerful tool for reigning in the damage business can do and turning its efforts to benefit in the larger sense. This is something both companies and investors should get behind.

Asset Managers Need New Skills to Meet Millennials’ Demands for Social, Sustainable and Impact Investing Opportunities

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By Marta Maretich @maximpactdotcom

It’s clear: the global investment landscape is changing. Oil, that mainstay of portfolios, is on the slide. Markets long dominated by pension funds and insurance companies are now seeing greater international ownership of companies and the rise of other players such as hedge funds and private equity firms. Investment horizons are shortening. Regulation is increasing.

These factors are creating a challenging climate for financial asset managers who need to adapt to the new realities of a changing investment marketplace.

To make matters more complex, investor profiles are changing, too. As older investors pass on their wealth, a new generation of socially conscious millennial investors are demanding more opportunities to put their money into investments that produce social good and avoid doing environmental damage. The effect of this trend is already measureable, with studies, like this one from Eurosif, showing all sustainable and responsible investment strategies continuing to grow at a faster rate than the broad European asset management market.

This means that, while asset managers are getting to grips with a new financial picture, they’re also looking for ways to serve new kinds of clients. Many of them already see the writing on the wall: in a recent survey by First Affirmative, a financial network, 49% believed that “the needs and interests of younger investors will have to be catered to if the industry is to thrive.” Female asset managers are ahead of the curve, the same study shows, with a higher rate of awareness when it comes to impact, social and sustainable markets and a greater likelihood to already be offering such options to clients.

The age of the “multilingual” asset manager

Change may already be happening, yet the mainstreaming of socially beneficial investing—and particularly impact investing, which has grown faster than any other part of the market—means that asset managers across the industry will need to upgrade their skill sets and become “multilingual” when it comes to creating investment strategies.

Recent thinking about the future of the impact investing sector flagged the importance of the “multilingual leader”—an individual or team with an array of cross-sectoral skills that create the right mix of social commitment an financial know-how to lead beneficial businesses.

The rise of popularity in social and impact investing will demand that asset managers become “multilingual” in a similar way. In this context, multilingualism will mean bringing all the traditional skills of asset management to the table, and adding to these new tools and expertise to meet the demands and opportunities of today’s more diverse marketplace.

But what, specifically, are these new skills and capabilities?

New skills for a new investing landscape

Practices are evolving even as the market for impact, sustainable and social investing expands, but some core competencies have been identified so far.

Familiarity with diverse investment markets: Lack of familiarity with new kinds of investing is often cited as a main reason why many asset managers don’t offer these options to clients. Asset managers with an eye on the future need to familiarize themselves with the ever-growing array of opportunities across the sector. These include private equity impact investing, social investment bonds, ESG screened portfolios, themed funds, and now even electronically traded funds in areas like cleantech, water and edutech.

In a market where innovation is extending the range of options on a daily basis, keeping up can be a challenge. Tuning into the conversation by following the work of leading institutions such as GIIN and the IIPC, websites like GreenBiz , and good twitter feeds such as @pioneerspost  and @IAimpactassets can help newcomers find their way. 30 Must-Follow Twitter Feeds for Impact Investing. For a mainstream take, large media sites like Forbes  and Huffpost and financial publications like The Economist and the FT increasingly cover the social investing trend in terms asset managers can relate to.

Confidence with more information: As digital natives, millennial investors have higher expectations when it comes to communication and transparency, especially where social and environmental impact is concerned. In this, they are in step with a global trend toward more stringent regulation leading to higher demands for disclosure and transparency on the part of companies. Today’s young investor is likely to be more actively engaged than her older predecessor, demanding timely, accurate information on investments to be delivered in a convenient and easy-to-grasp form.

This has a host of implications for asset managers offering socially beneficial investment options to their clients. First, they will need to be able to evaluate the reported data of potential investments accurately and align investor concerns with outcomes in a given strategy. An ability to see beyond claims and accurately judge the quality and reliability of the various reporting practices used by companies will be key. Asset managers will need to choose investments that can deliver a high level of accountability and transparency in both financial and extra-financial performance, for example ones that adopt extended reporting practices and use new standards for sustainability like SASB.

Faster, detailed, two-way communication: Importantly, they will also need to find effective ways to communicate this information to clients more quickly and at every point in the investment cycle.

The practice of annual and quarterly reporting is already being viewed as insufficient by many investors, and real-time, on-demand reporting is now a reality inside some companies. What this will mean for the wider investment marketplace is still not certain, but it’s clear that asset managers will need to be prepared to handle unprecedented levels of information and use it effectively to build strategies and also to communicate with clients.

And they can expect communication to be an increasingly two-way street. With better informed, socially conscious clients wanting more of a say in how their money is invested, the ability to receive and manage investor feedback will be a key skill for asset managers. Satisfying clients will mean keeping pace with their evolving social and environmental objectives and responding quickly to their concerns.

Changing the industry from within

Mainstream finance has made strides when it comes to embracing sustainability, social benefit and impact investing. Driven by government regulation and supported by high profile initiatives like the G8 taskforce, the movement is becoming part of the broader market ecosystem. Industry giant BlackRock’s appointment of Deborah Winshel, a multilingual leader if there ever was one, is one example of a changing mood in finance. Another is the high profile of climate change and sustainability at Davos this year.

Asset managers obviously have an important role to play in giving more investors access to the expanding marketplace for beneficial investing. Their influence, however, goes beyond the purely commercial and is likely to be felt on a deeper level.

Increasingly, asset managers themselves form part of the groundswell toward creating a new kind of financial marketplace. Many are shifting out of traditional investing to take up roles in impact and sustainability. The next generation is demanding more training in innovative financial approaches from their MBA programs, while organizations like GIIN are offering training for professionals already working in the field.

At the same time, inside many large institutions, committed individuals like Harald Walkate of Aegon are quietly at work teaching other asset managers how to build more impact into existing portfolios and how to create investment strategies that maximize social and environmental benefit while delivering profit.

While not a “skill” as such, this new outlook on the part of asset managers may be the most valuable thing they bring to the field of beneficial investing. It will contribute to reshaping the financial landscape and, in highly practical ways, help establish socially beneficial finance as a viable choice for investors of all kinds. For asset managers, this mindset looks set to be one of the factors that will shape their working lives in coming years, demanding from them new skills and new sensitivities and profoundly changing their relationship with markets—and with the millennial clients they serve.

Reducing Risk and Improving Performance: Mainstream Sustainability Comes Into its Own

By Marta Maretich @maximpactdotcom

Boy reaches up to touch battered statue of earthIt’s official: sustainability is mainstream. 2015 is tipped to be the “year of sustainability” according to UN chief Ban Ki-moon.  Following the publication of the UN report setting forth development goals to 2030, including substantial sustainability goals that link global prosperity with the protection of natural resources, the spotlight is on sustainability as a means to address a range of planetary ills and change the very nature of business.

What’s driving this move? Deepening concerns about vanishing natural resources, climate change and pollution are heightening awareness of sustainability issues on a popular level. This in turn is having an impact on the world of business, which is making sustainability more of a focus.  Many of the major themes dominating this week’s WEF conference in Davos—climate change, oil, development, wealth and social inequality —  touch on issues of sustainability. For Ban Ki-moon, the private sector will play a key role in sustainability, alongside governments, in creating a future that includes more jobs, increased gender equality and better health for world populations.

All this is validation for the green business sector and impact investors who have long embraced the sustainability agenda. Even more heartening —  and more indicative that the movement will endure and expand its influence — is a growing recognition that sustainable practices bring business advantages in two areas: attractiveness to investors and improved performance. While the principles behind sustainability have wide appeal, hard-nosed decision-makers in financial institutions will only factor sustainability in if it brings material benefits. Fortunately, a growing body of evidence reveals that it does, especially when it comes to mitigating risk.

More sustainability = less risk

For most mainstream investors sustainability is all about risk management.  A growing body of evidence shows that companies that ignore sustainability issues, or, worse, engage in unsustainable practices, present increased risks for investors in many areas. As a result, investors who formerly took no interest in non-financial performance are starting to pay attention. They now look carefully at sustainability, along with other factors including governance and social impact, because of the risks associated with these areas.  In a global trend, investors now expect company reports to disclose detailed information on non-financial information including ESG measures and impact. If it is missing, or unconvincing, they won’t commit.

In a knock-on effect, investor demand for more transparency and accountability on non-financial performance measures is driving a global trend toward increased disclosure and integrated reporting. SASB has established standard measures that allow companies to attribute “materiality” directly to sustainability issues. Meanwhile, the demand for third-party verification of sustainability performance information is fuelling the continuing expansion of a data validation industry.

The pressure to disclose places obvious burdens on the companies that have to establish sustainability systems, then track, validate and report sustainability information. However, the rewards of sustainability are becoming more apparent and may offset the added cost.

Boosting performance with sustainability

A growing body of research indicates that companies that voluntarily adopt social and environmental sustainability policies can outperform companies that don’t. A Deutsche Bank review academic literature, for example, concluded that firms with higher ratings for ESG exhibit both market-based and accounting-based outperformance. New Eurosif research shows sustainable investments outperforming the mainstream in European markets. In  3-year study by PWC, higher impact portfolios outperformed a traditional portfolio model on both return (higher by 1.6% per year) and risk (lower by 1.7% per year).

Improved performance must be the ultimate inducement to mainstream investors — and of course it’s yet another piece of evidence that the early advocates of sustainability were right all along. But this news is good for the sector in other ways.

For socially-minded investors who already use sustainability as a measure of investability, the normalization of sustainability will bring good things. The fact that businesses of all kinds are embracing sustainability will mean that impact and sustainable investors will be able to choose from a wider pool of suitable investments. The presence of mainstream investors will expand the reach of sustainability, offer opportunities for partnership and collaboration and bring the principles of sustainability to bear on a wide variety of global issues.

Nonetheless, the social and impact investing sector will go on playing a key role in maintaining standards, innovating techniques and leading the field in making sustainability a core value for global business. As Ban Ki-moon writes, “There is no country or society where sustainability is not important or necessary. We all share the responsibility to work for a sustainable future and we will all reap the benefits.”

Image credit: Hope of Deliverance by Matias Brum

The Evolving Meaning of Sustainability

By Marta Maretich  @maximpactdotcombaby hands plant

Sustainability is a key concept for our times. For impact investors who want to put their capital behind better ways of doing business, it’s an important indicator of investability. But what exactly do we mean when we say “sustainability” or “sustainable”?

The dictionary sheds a little light.

Sustainability:
1. Conserving an ecological balance by avoiding depletion of natural resources.
2. Able to be upheld or defended.

Originally taken from the biological sciences, the term sustainability first referred to conservation of natural resources. Though it retains this meaning, sustainability today can mean different things in different contexts. Sustainability in its classic sense and new uses of the term are proliferating as sustainability goes mainstream in business and popular culture.

The mainsteaming of classic sustainability

The definition is changing as the movement goes mainstream. More businesses are taking steps to incorporate sustainability into their operations as well as their performance metrics; national governments are regulating and incentivizing it in a number of new ways. Meanwhile investors are increasingly making non-financial performance, including sustainability, a priority when choosing where to place capital.

All this means that “sustainability” is an evolving idea with increasingly diverse interpretations. Most sustainability efforts still focus on the environment, however, with an emphasis on maintaining ecosystems and conserving natural resources for future use.

Sustainable forestry: Saving forest habitats has been an active area for impact investors. Despite the collapse of carbon markets, organizations like Rainforest Alliance are expanding their activities. Certification schemes like the FSC are helping sustainably sourced wood to become standard in building and consumer goods.

IrrigationSustainable agriculture: Impact intermediaries like Root Capital and development organizations like OPIC have developed successful models for promoting sustainability in agriculture. Encouraged by government regulation and subsidies, big agribusiness companies like Monsanto and multinationals like Coca Cola, are now pursuing sustainability strategies.

Sustainable water use: With changing climate in places like California driving the adoption of more sustainable water policies, businesses and services are springing up to meet a newly-defined demands. Driven by regulation, large multinationals including Unilever are beginning to look at water sustainability from a number of angles: their own use, water use by suppliers, and the water needed to use their products.

Sustainable mining: Mineral extraction is a sector with a raft of social and environmental issues and has been avoided by many social investors. That may change as groups like the IIED work to build the commitment to sustainability across the industry.

Sustainable energy: The focus is on wind, water, solar and other forms of generation and storage, such as hydrogen cell batteries. A popular area for impact investors, even designer Vivienne Westwood has committed GBP£1 million to sustainable energy. Big fossil fuel companies are also putting money into it. Though their motives are often questioned, it is a sign of how far the notion of sustainability is becoming part of the fabric of corporate life in the developed world.

Sustainable consumer goods

Sustainability has taken on a new meaning in consumer markets as it has become a persuasive selling point for everyday goods and services. Public enthusiasm remains high for brands with sustainability credentials and sustainable practices, far from being unusual, are now what consumers expect of businesses.

Sustainable fashion: The fashion industry has been thriving in a throwaway culture, but the photograph of a lady in a dress of flowerssustainable fashion movement hopes to change attitudes and move toward sustainability. To keep up with this vibrant movement, follow top tweeters in fashion sustainability and check out the five top sustainable fashion stories of 2014.

Sustainable building: Changing the way we build and design cities could make a huge difference to our future and, increasingly, governments are regulating for sustainability in construction processes, materials and design. This is reshaping the construction industry, especially in the developed world. Construction companies are adapting the way they source and use products and materials and new education centers, like this one at Harvard, and this one in Edinburgh, are training the sustainable builders of the future.

Sustainable tourism: More people are taking vacations than ever before, but increasingly tourists want to avoid damaging the environment, squandering natural resources or hurting local communities. The global travel industry is waking up to this fact and offering sustainable tourism to the masses. Portals such as Sustainable Tourism Online provide go-to resources for the public and professionals who want tourism to be good for the planet and the communities in host countries.

Evolving meanings: Financial sustainability

Beyond its original, environmental meaning, sustainability has recently developed a financial meaning that applies in some sectors. Governments strive to make public services “sustainable”. Non-profit organisations try to create “sustainable” programs to deliver mission. In this context, sustainable can mean both environmentally sound or financially viable for the future or both.

Sustainable healthcare: Concerns about being able to afford healthcare for citizens in the future is driving innovation in healthcare delivery and finance models.In a bold move, the UK health service, the NHS, is embracing both environmental and financial sustainability.

Sustainable transportation: Concerns about climate change, contracting budgets and public pressure are encouraging many governments, including China’s,  to organize public transportation policies around sustainable principles, in both the financial and evironmental senses.

Sustainable finance: In a final evolution, “sustainable finance” seeks to apply the principles of sustainability to banking and investment. Impact investing and its sister disciplines across the spectrum of social finance including responsible investing, ethical investing, social investing and microfinance form part of this growing movement, which seeks to revolutionize the use of market methods to create better social and environmental outcomes.  Sustainable finance methods are now being put to use in a wide, and growing, range of contexts, with new techniques and approaches developing across the sector. For more on sustainable finance,  browse the top five stories in sustainable finance for 2014.

Conclusion

Sustainability has moved from the margins to the mainstream and is now a widely-accepted approach being incorporated into many areas of business, finance and the consumer marketplace. As it continues to expand its influence, sustainability will continue to evolve new meanings and serve as a paradigm for conservation and wise stewardship of the environment, human and natural resources and, now, capital. This movement is positive, but for impact investors seeking sustainable investments, it will mean taking a closer look at all claims for sustainability and determining exactly what is meant.

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