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Rationality is Ruining Us: Mayors, presidents and governors join major businesses in charting way forward on climate change

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The rationality of business leaders is leading us to complete disaster.

Voicing concern for the continued lack of action on climate change, World Bank President Dr. Jim Yong Kim joined many others at the closing ceremony of Climate Week NYC (CWNYC) 2015 imploring the community to wake up and smell the air (no pun intended).

Referring to the ever maddening chase of the business case across corporate America, Dr. Kim emphasized that we now have enough facts and figures to address a global crisis unraveling in real time in places like California (see: drought and water shortage), island nations (land erosion) and across our depleting oceans and forests.aman 1

“My son will live through a 2, 3 or maybe even 4 degree Celsius warming. We cannot keep apologizing to our children for our lack of action. We must change course now,” he added, vocally seconded in frustration and urgency by many others who took the stage after him, including Former President of Mexico Felipe Calderon.

After more than ten days of events spread across New York City and covering a multitude of topics – from climate data and social justice to poverty, Rule of Law and women empowerment – CWNYC ended with several notable announcements this week, including commitments from Walmart, J&J, P&G and Nike to strive for sourcing 100 percent of their energy needs from renewable sources, six national banks coming together to ask for a climate treaty and divestment numbers reaching $2.6 trillion.

Mayors, Governors and Ministers Urge Urgent Attention

The week also saw the likes of NYC’s celebrated former mayor Michael Bloomberg and India’s Union Minister of Environment Prakash Javadekar taking the podium to ask policymakers globally to agree on a binding climate agreement at the upcoming Conference of the Parties (COP21) in Paris this December.

Aman 3While Mayor Bloomberg emphasized “you get what you pay for” and that “businesses invest where people live,” citing that New York City continued to be a mecca for business investment because of its early attention to the impact of climate change, the Indian Minister asked policymakers to frame climate change more broadly as a need to shift consumption patterns and lifestyles.

Referring to Pope Francis’ articulation of the “throwaway culture, the minister added, “India is a big country but it is also a poor country…this is about lifestyles and financing a global shift to cleaner sources of energy.”

Poverty is “the biggest pollutant” he said. “Human intentions have led us here and human intellect will help us lead the way out.”

For Vermont Governor Peter Shumlin, climate change is no longer up for debate. Emphasizing that his state’s residents were already living with the impact of climate change and were fully engaged on adaptation, he said:

“We don’t live in the land of denial…a whole generation of Vermonters are learning about climate change the hard way.”

Open for Business: Corporations Show Early Results from Climate Adaptation Efforts

Not too far behind was the corporate contingent including leaders from Ikea, Kellogg’s, Walmart, Nike, BT, DSM, Philips, Siemens and many others as well as the State of New York Comptroller’s Officer, who participated in a plethora of rapidfire discussions, many ably and enthusiastically moderated by UNFCCC Executive Secretary Christiana Figueres, on how they were accounting for climate change risks through various tactics and strategies. Here’s a sample:

  • Product innovation: Siemen’s is rolling out hundreds of windmills, estimated to power 7,000 – 8,000 homes each, Philips and Ikea are leading drive toward LED lighting
  • Advocacy: BT working across sectors on rolling out infrastructure to support the future of clean technology, automation and access for all, Mars joining hands with many other companies through investor advocacy group Ceres asking policymakers to agree on a climate treaty at COP21
  • Value chain mapping: According to Nike’s Chief Sustainability Officer Hannah Jones, the amount of polyester used in one year uses as much fossil fuels as it takes to operate 185 coal plants. Materials matter, she emphasized and therefore, Nike is evaluating its entire ingredient and value chain to understand all points of impact.
  • Circular thinking: IKEA looking ahead at leasing its products, extending their life and helping customers resell, recycle and reuse.
  • Scenario planning: NYS Comptroller’s office increasingly looking at “where we put our money. If companies don’t change their practices, we will move the money.”

None of His Business: Finding the Way Forward in Pope Francis’ Words

In an equally dramatic setting ahead of Pope Francis’ visit to the U.S. – New York City’s Jesuit University, Fordham – Andrew Winston, author of The Big Pivot, Jo Confino, Executive Editor at The Huffington Post, L. Hunter Lovins, president of the Natural Capitalism Solutions and Michael Pirson, Associate Professor for Management Systems at Fordham took the stage to contextualize why a religious leader was cutting through religious and political clutter to issue an urgent call to action.

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Before a packed auditorium of students, professors and others, the three distilled the 80 page Papal encyclical for what this meant for business, for consumers, students and perhaps more overwhelmingly, for humanity. The conversation was variously electric, sarcastic, alarming and deeply touching.

Winston cracked open the discussion by urging the audience to pay attention to what the Pope is saying. “If the Pope is signaling that the end might be nigh, we better sit up and listen. We have serious equity problems and we better start connecting it with environmental challenges quickly.”

Bringing a politically charged topic to life, Lovins alluded to the millions of refugees making their way west from Syria in the hopes of a happier life.

“Are we prepared for what that means for our cities, our local economies?” she asked. “I’ve always said climate change is not a moral issue; it is a business opportunity. But the Pope is starting to make me change my mind… This [climate change, poverty, economics] is not a religious issue. This is a global issue for humanity to confront and address as humans.”

Confino, who recently left The Guardian to lead Huffington Post’s foray into purpose and impact reporting, chose to take a more philosophical point of view advocating that “we need to re-convince ourselves that we need each other; that we don’t have control over everything whether we like it or not.”

On the other hand, Pirson implored education institutions to sit up and take note of what this meant for them.

“Every institution has to ask themselves why they exist and how they are helping the world move forward sustainably. This is a crisis and we need all hands on deck. Everywhere. If we’re not demanding that, we’re wasting our time,” he said.

So where to from here?

When do we shift from call to actions to simply action? While many more companies are stepping up their efforts – General Mills and Kellogg’s serving as great examples as they begin their path toward net zero – on the various threads of climate change, many, many more remain in the shadows waiting and watching.

Regardless of what gets agreed to in December, climate change is already changing our summers and winters (check out WXshift to see for yourself). Changing weather patterns are already impacting farmers’ harvesting timelines and forcing millions to relocate for better proximity to clean water and air. And as this impact spreads beyond the immediate areas under threat, our notions of ordinary and luxury stand to be tested.

We’re going to have to respond. We’re going to have to adapt. Our bottom lines will change.

And we’re going to have to continue to push the leaders and pull the stragglers along. After all, if the future of our children is not worth it, what is?

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2015: the year businesses recognize that climate change is real – and 4 other themes

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I recently participated in The Guardian‘s year-end predictions and analysis series. While there were lots of themes and issues to pick from, I decided to focus on five. Here’s an excerpt:

The next phase of the UN’s Millennium Development Goals, fittingly termed the Sustainable Development Goals, shift priorities from insular goals like reducing poverty and increasing hygiene to more inclusive and integrated ones that push for systemic change like the rule of law, dignity and prosperity for all. The implications are significant.

And business is being called on to provide active support for the first time. This presents an unprecedented opportunity to tie businesses’ growth to their communities and the environment. For the first time, capitalists are welcome and actively needed at the table. This marks a key acknowledgement that determining our path forward as an interconnected economy will require the tensile strength of every single sector.

UN Sustainable Development Goals

So how do you make sure your business is syncing its growth plan with the new UN goals? How do you get past the loftiness and map the real changes that are needed against the trajectory of your business plan?

You’ll want to start by investing in some scenario planning.

You can read the full article on The Guardian.

And while I wasn’t able to respond to the comments that flew in before the commenting period ended – yes, I really did shut down my electronics this holiday! – I’d like to continue the conversations here. So if you agree or don’t, have a question or a solution, please do respond. As I promised in the piece, my mantra is clear:

Tell the whole story, help our executives and leaders connect the dots, identify the context, and empower stakeholders through knowledge. When I started writing about these issues, I committed to connecting the dots. Always.

A decade later, that hasn’t changed.

And remember, joy is contagious. But so is skepticism. Stay clear. Steer carefully – and lead gracefully – onwards.

Wishing you a happy and productive 2015.

Chatting LIVE with Mars’ Sustainability Chief: Integrating Sustainability, Driving Responsibility

28 Monday Jul 2014

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On July 24, 2014, I facilitated a live Twitter chat with Barry Parkin, Chief Sustainability Officer at Mars, Inc. and TriplePundit to offer an opportunity to learn more about sustainability at the food manufacturer.

As a lead up to the chat, Mars published its fourth annual Principles in Action Summary, which details the company’s approach to business, its progress, and the shared challenges facing both its Marsbusiness and society.

As one of the world’s leading food manufacturers with more than 130 manufacturing sites and an expansive supply chain, how does the company contextualize sustainability, set goals that encompass its social and environmental footprint, grow its supply chain and do it all responsibly?

For an hour we chatted – with 104 attendees generating almost 600 tweets, over 3.5 million impressions and 27 questions. Here’s the Storify summary.

And here are Parkin’s responses to the questions that we couldn’t get to in the hour:

  • @cmehallow: Does @MarsGlobal use @CDP Water Disclosure to manage/measure its #water impacts?

We have just completed our second CDP Carbon response and are evaluating the Water and Forest programs.

  • @csrdispatch: This might be a cheeky question, but do you feel a conflict between commitment to sustainability and selling junk food?

Our consumers, both people and their pets, get nutrition and pleasure from our products.  We are continuing to look at the role of our portfolio in addressing nutrition and obesity.

  • @dgardinera @dataeco: What have been your experiences with large #renewableenergy procurement?#MarsSusty

Our most recent large scale project was Mesquite Creek, but we have on-site projects or 100% renewable contracts at more than a dozen globally. We also just announced another project in Australia last week: http://www.premier.vic.gov.au/media-centre/media-releases/10219-the-sun-won-t-melt-this-mars-bar.html

  • @kellyfmill: Specific ways #sustainability goals are integreated w/ other departments? 

We believe it’s everybody’s responsibility, therefore we have goals in all functions/departments in the business. 

  • @jsonenshine: Can you share how you are driving farmer productivity? [A3b: Driving farmer productivity is our way to do both.]

Yes, as an example in cocoa, we are providing training, latest planting material and access to fertilizer for farmers.

  • @wssocialimpact: How does @MarsGlobal address sustainability goals in the short term?

We have a range of Sourcing Targets for 2015 and 2020 and Operations Targets (SiG) for 2015. More info at:

http://www.mars.com/global/about-mars/mars-pia/our-operations/sustainable-in-a-generation.aspx

http://www.mars.com/global/about-mars/mars-pia/our-supply-chain.aspx

  • @gurumug: How do you cross-verify #sustainability reporting standards/systems ?

We have a third party audit of our data and an assurance by Corporate Citizenship.

  • @greenguyboston: Glad to see your sustainable sourcing goals, but what is your progress to date against them?

Check out our 2013 Principles in Action Summary to learn more on our progress to date: http://mars.com/pia.

  • @jreneemorin: What are @MarsGlobal biggest challenges working with suppliers on #MarsSusty?

One of the challenges is that we work with 100k+ suppliers and often many tiers of them back to the farmer. 

  • @cmehallow: When @MarsGlobal needs to access capital markets, does its strong #susty program provide advantage?

We are a private, family-owned business, but we do believe that boosting our reputation through sustainability is crucial to attracting great people to work for us

  • @rohitms4: Is there any specific standard to measure your success in #sustainability?

Yes, measurement of impact and not just activity. 

  • @earthshare: How is @MarsGlobal investing in associates and their communities? #MarsSusty

In 2013 we did more than 500K hours of Associate training, and through the Mars Volunteer Program, 19K Associates devoted 70K hours to their communities.

  • In response to A15: @darrylv asked: That is promising. How about elsewhere in your supply chain? #MarsSusty

Because there are more farmers in cocoa than any other crop we purchase, we started there first and we’re looking to learn from our experiences in cocoa.

  • @beth_rcarnac: As a Mars Associate, I’d love to ask where have you seen our Associates best come together to collaborate on this #MarsSusty

There are Associates at every factory around the world and collaborating across our sites to achieving our SiG goals. 

Want to chat with us? Email me for more details.

As ICRS Launches UK’s First Professional Body for Sustainability Professionals, Questions About its Efficacy

18 Friday Jul 2014

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With the launch of its first professional body, has sustainability lost its edge? >> Interesting albeit controversial take by Guardian Sustainable Business’ Jo Confino.

Does the sustainability sector need one more professional accreditation?

As you’ll see from the comments section, the opinion on that is divided down the middle. And while we all probably have also an opinion to add depending on our background, longevity of work in the sector and where we stand on the idealism scale, the discussion reminded me of my first “CSR workshop.”

Conducted by the Center for Sustainability & Excellence [CSE] group and certified by the Institute of Environmental Management & Assessment [IEMA], the workshop had all the telltale signs of a robust professional certificate curriculum.

From comparing the leaders vs. the laggards in “CSR practices,” the emerging trends in CSR reporting and the regional differences in how corporations were interpreting “corporate social responsibility,” to writing a CSR plan for my company that encompassed sustainability factors as well as social and economic goals, the curriculum was rigorous and gave me a lot of information to process and use for years to come.

It also gave me a moniker – CSR-P – that I have used over the years to indicate that I am a CSR Professional.

Did it invite curiosity? Often.

Did it help explain my credentials and experience more credibly? Sometimes.

More importantly, the workshop made me think. It made me dive into research. It taught me materiality and helped me sift between greenwashing, whitewashing and the many other labels of our sector. And it also opened up a path for me that otherwise would have remained superfluous and intangible in definition.

But back to Jo’s article: Do we need one more professional accreditation?

Probably not.

But as the sector grows, divides, integrates and subsumes within organizations, we do need groups/associations to allow sustainability professionals to learn from each other’s challenges, share best practices and grow the cadre of professionals integrating CSR and sustainability into their skill sets and mindsets.

And if this critical mass of influencers and practitioners can then influence other professionals – HR, Accounting, Technology, Finance, etc. – to shift their thinking and modus operandi to align with our mutual goal of preparing ourselves to coexist in a shared / new / circular / no waste [pick your preference]  economy, that would be a win.

Not only for the Institute of Corporate Responsibility and Sustainability but for our entire sector.

Thoughts? Leave a comment or connect with me @AmanSinghCSR.

People Get Sustainability, Business (and Marketers) Don’t: 20 Minutes with the CEO of Unilever

11 Friday Jul 2014

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Last month, Unilever CEO Paul Polman was in town – New York – to receive the Lifetime Achievement award from the Rainforest Alliance. As Rainforest Alliance President Tensie Whelan put it, “Paul has made several lifetimes of difference by leading Unilever to become a game changer.”

The company’s work with the Rainforest Alliance is well-known – by setting targets like sourcing 100 percent of its palm oil sustainably, Unilever has made it easier for other companies to follow suit and helped complex supply chains become comfortable with change and collaboration.

And, the company hasn’t stopped at palm oil.

Today, roughly 50 percent of the company’s tea originates on Rainforest Alliance Certified farms as it works toward sourcing 100 percent of its raw agricultural materials from sustainable origins (that figure currently stands at 48 percent).

Having recently interviewed Unilever’s Marketing Chief Keith Weed on the company’s refreshed goals and commitments, the opportunity to discuss sustainable development from the vantage point of the outspoken CEO was tempting. We caught up over a quick phone call:

The Unilever Sustainable Living Plan:

“When we launched it we said we don’t have all the answers. One of the reasons why we are working so wellUnilever CEO Paul Polman with Rainforest Alliance is because we share common goals. Take tea for example: Standards are driving up fast in an industry that’s not easy to standardize. [This is where the] scale of Rainforest Alliance is significant – and essential for the USLP to come alive.

“[Its] only been a year since the Rana Plaza fire happened. Those 1,050 women worked in conditions that were little more than modern-day slavery. We’re determined not to let that happen in our supply chain. So we’ve put some goals to match our resolve. We’re going to help more women gain access to training and land rights. The transformation can be substantial.”

Pushing forward in the absence of political will/action:

“In the absence of politicians, we need to move faster. Climate change is a great opportunity for business. Report from the White House is an encouraging sign. Needle is starting to move in the U.S. The tornadoes and hurricanes are starting to drive the message home for people.

“Besides, this is probably the only opportunity we’ll have. The Millennium Development Goals, for instance, are due to be completed next year – the urgency cannot be watered down.”

The most critical challenge for business:

“The biggest challenge is [that] we cannot scale our ambitious goals alone. It’s a major challenge to create the right partnerships and increasingly difficult to get the political sector to participate. How do you create size and scale in a vacuum?”

The changing role of marketers:

“I always say, don’t blame the consumers. There are many examples where consumers are leading business, especially the young ones. They’re changing our lives and systems.

“Consumers are speaking out everyday but we don’t want to see it. Then we say the consumer doesn’t want to change. If we can tap into the enormous movements, we can create change much faster. That’s the job of the modern-day marketers. Their job has changed. It doesn’t work any more to push consumption. We need a new model and get companies to adjust their marketing strategies as well as their job roles.”

People get it, business doesn’t:

“I spend a lot of time on how to develop leaders who can lead us through partnerships, with purpose, can think long-term and beyond 2020. On my way back from Abu Dhabi last month, I was reading an article that reported university students rebelling against the way economics [is being taught]. If teachers are teaching Milton Freidman’s theories, who is going to change the economy? For my kids, sustainability is the new normal. They don’t want to watch TV or buy the newest gas-guzzling car. Their generation is already thinking differently. Yet, marketers keep saying consumers don’t want it.

“Our understanding of consumers [and consumption] is too narrow. We need to get much closer to consumers. If we go to any of the emerging markets – 81 percent of the world’s population lives outside the U.S. and Europe – most of the growth is occurring in climate stretched areas today. They might not understand Rio+20 or climate change language but they know that weather patterns are changing, water is decreasing, etc.”

From mindless to mindful consumption:

“Marketers should switch from asking whether consumers are willing to pay for something to which consumer doesn’t want less poverty, more education, a healthier world with cleaner air and better nutrition.

“We just need to be astute about solutions. Look at the Edelman survey – consumers expect more and more from business, and if business understands this, it is a wonderful time. Children die from diseases which we can solve with hand washing – new market – marketers should be very excited by this. But that connection is not there.”

Three actions to change the world:

“We must get out of short termism because lots of solutions are long-term [climate change, access to education, water shortage, etc.] – and we can only solve them if we invest over longer periods and evaluate the social and economic capital. Then business people can optimize these. For example, 40 of the top 100 companies are already pricing carbon internally. They’ve committed to stay within these limits. Business is leading because they see the cost of action vs. inaction. We have now 40 countries that are pricing carbon including China. We have 20 other countries that are putting a tax on carbon. The system is starting to move.

“We need to give politicians Unilever Sustainable Livingconfidence that this [focus on sustainable development and long termism] will not kill jobs or stifle growth. The exact opposite is in fact true but we need to provide the proof points.

“We need to get companies to adopt integrated reporting quickly as well as become comfortable with transparency. It’s going to take much more than a nine-to-five job to bring all of this together. We need leaders and we’re short on them.”

If this was his last interview as the CEO of Unilever:

“We can use our scale to transform systems and change. We need to create a better place than the one we were born in. Ninety-nine percent of people are not in a position to make a difference. We can. We need to force change – it’s our duty to leave the place in a better place. I hope this drives Unilever and everyone else.”

Originally written for and published on CSRwire’s Commentary section Talkback on June 2, 2014.

Climate Denial, Chauvinism and Making Integrated Reports Readable: SAP, BSR and CDP Respond

11 Friday Jul 2014

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In a recent conversation with SAP’s Sustainability Chief Peter Graf about the company’s second Integrated Report, the conundrum between sustainability goals and economic growth kept coming up. Were the two diametrically opposed? Was the ‘conundrum’ a red herring as Henk Campher recently put it?

Working with the SAP team, we decided to turn it into a live discussion. And along with Graf, BSR CEO Aron Cramer, CDP’s Executive Director Nigel Topping and our partner Triple Pundit, we took to Twitter. For one hour, we discussed the trials and tribulations of pursuing sustainability featuring 232 participants contributing 1,388 tweets and over nine million impressions.

But as is often the case, our panelists were not able to respond to all the questions in the hour. Here then are their responses to all the questions we were unable to answer – some questions have been modified for grammatical purposes.

How does a company reconcile a clear need in the realm of sustainability when it’s not a $$$ win for the company? What mechanisms can be used to overcome this barrier? [from @bradzarnett, @beltwits,@thesustoolkit]

Nigel Topping: “Ultimately sustainability issues are business issues and thus addressing them must change the value story. If it changes the story short term you get a P+L benefit, if long-term then through enhanced quality of earnings, talent retention, market share or some other metric, which can also be converted sustybiz-snapshotinto an economic measure.

“Sometimes this is easy – reducing energy waste saves money so the GHG reduction may just be sustainability icing on the cake. But this same action may be making the company more resilient in the face of likely regulation. Remember that value creation is part science part art.”

Aron Cramer: “”As things stand today, market structures and incentives don’t make it easy for companies to make the long-term investments that are often needed to work towards sustainability. We all know that for publicly traded companies, markets often push decisions towards the short-term. As such, emerging efforts to redefine financial success with more attention to long term value, such as integrated reporting, are crucial.”

Peter Graf: “If company itself has no economic reason to do so then the only levers I know of are consumer/customer pressure, public pressure or legislative pressure. If those are applied, then what seemed like an ‘externality’ again becomes revenue and cost relevant.”

Most companies see CSR as taxation without representation. What can companies do to circumvent this view and start acting now? [from @Odyamvid]

Topping: “Companies who see CSR in this way are most likely right! And at the same time leaving value on the table precisely because they are stuck in a mindset, which starts with the assumption that CSR is nothing to do with business. We really do need to see the back of woolly CSR initiatives where no one knows why they exist. There must be a value creation story – it could be direct via resource efficiency or risk mitigation or it could be indirect via brand value enhancement, talent retention, building capacity early to respond to expected consumer trends.

“If you can’t find those plausible stories, which you can tell with conviction to your front line staff, then best just to save your money – you are creating a bigger risk by acting in-authentically. Shareholders can rightly criticize you for wasting their money and NGOs can rightly criticize you for not taking issues seriously.”

Cramer: “This reflects an outdated and discredited understanding of CSR. Indeed, sustainability is about aligning strategy with changing operating conditions and not “taxation.” That said, there are issues where companies should be more active in promoting public policy frameworks that create the right kinds of incentives.  One great example has to do with supply chain labor issues, on which governments have de facto outsourced the responsibility to enforce labor laws to the private sector.”

Graf: “CSR needs to be perfectly aligned with the strategy and how the company creates value. At SAP we focus on education and entrepreneurship in our CSR projects, because they help us drive long-term success as a business. If CSR is not focused on this type of shared value (value to the company and value to society), then it is only a brand building exercise with little substance.”

How can a corporation reconcile short-term needs of shareholders and longer-term sustainability objectives? [from @greengageEnv]

Graf: “Short and long-term value creation do not need to be in conflict. In essence, it’s a balancing act, like always in business. For example, companies have always balanced investments into the future and current revenues to manage their margin.”

Topping: “Companies need a portfolio of innovation to address different time cycles of the dynamics which exist in markets.”

What role do business leaders have regarding climate denialism by other businesses like the stand taken by the U.S. Chamber? [from @kayakmediatweet]

Topping: “Very few business leaders are climate deniers. Even if they don’t believe the science, they have to respond to the growing level of regulation (22% of global emissions are now subject to a price). Leaders have a responsibility to see major change coming and to get out ahead of it, but not too far ahead!

“Climate change is rewriting the rules in many industries – just look at Tesla outselling BMW in California and with a market cap half of General Motor’s already! Leaders also have a responsibility to manage risk. As Bob Litterman, former Chief Risk Officer at Goldman Sachs keeps reminding us – there is an inevitability about the coming price signal on carbon and the less a company is prepared the harder it will be hit. This is already starting to play out in the oil and gas sector with investors pushing dividend returns instead of risky exploration expenditure.”

Cramer: “Businesses very often see further out than governments do. Businesses also like to innovate.  Organized business associations, more often than not, take a lowest common denominator approach that is in fact inconsistent with business interests. Leading companies should use their voice to call for smart regulation and then innovate and compete to succeed. There is a huge opportunity for just such efforts in the run-up to COP-21 in Paris in late 2015: the business voice should be heard, and if it is, companies will help lead the way to  low carbon prosperity. Leaders recognize the importance of this step.”

Graf: “I have personally never used climate change as part of the business case for any sustainability project. Not at SAP. Not with customers. Unless you’re in an industry that depends on climate to be stable (e.g., agriculture), the much better way to argue is the cost of energy, and not the implications and risk of climate change. Energy cost is something I have to deal with today, tomorrow and every day thereafter. There’s zero argument around the probability around that.”

Is the biggest challenge for Integrated Reporting adoption around SME supply chains to ensure sustainable business? [from @mbauerc]

Topping: “No, integrated reporting will impact large listed companies primarily – and the way their integrated thinking leads to changed supply chain engagement will impact the SMEs. In many cases this will allow for disruptive innovations from the savvy small guys.”

Graf: “SME’s adopt more sustainable practices because their customers are expecting it from them. The push is coming from the mega-buyers like the retail giants and trickles down the supply chain from there.”

Integrated reporting is great but how do you get people to read it? [from @angryafrican]

Topping: “Make it the story of your business. I hear more and more business leaders explaining how new graduates are interviewing the companies for evidence of integrated thinking, awareness of the systemic challenges faced by society and a coherent company approach that uses the power of the corporation to make good money by adding real value to society. Telling the integrated story starts at recruitment and goes all the way to analyst calls – it will need to become the same story.”

Cramer: “This challenge affects ALL forms of reporting. But a more broad-minded report is likeliest to attract attention: Integrated reporting could ‘save’ reports.”

Graf: “You need a great overarching story (one story, not many), and use video, interactive charts, etc. to make it interesting. Moreover, use social media to promote it.”

When reporting on energy, carbon, GHG, how can we make it relevant and benchmarked? Standalone figures too abstract to mean much? [from @miamiaki,@jackwysocki]

Topping: “At CDP, we help companies benchmark many environmental indicators and practices against their peers – that’s just good practice but of course it requires good data. Benchmarking process as well as output is important to drive learning and change – for example, what percentage of capex is committed to energy efficiency, does this get same or better payback than average? This sustybiz-tweetalso helps overcome any lagging perceptions that these  metrics are not business-relevant.”

Graf: “We always like to talk in visual explanations. Like ‘SAP consumes the same amount of electricity as a 250,000 people city.’ Or ‘Our customers collectively emit at least one sixth of the world’s man made emissions.’

How has the cloud affected our lives besides our ability to reduce environmental impact? [from @orange_harp]

Graf: “In all the ways that we all experience every day, from music, video, smartphones, millions of apps, social media, social platforms, etc.”

Where do we stand on CSR across the tech industry? Is our personal info staying private? [from @mr_rosenwald]

Graf: “Let me put it this way: I am very conservative about which information I am sharing on the web. The industry is running the risk of losing customer trust. We have to work together to ensure that’s not happening.”

Cramer: “While attention has so far focused on tech companies, almost every business has access to personal information. Companies can look to the principles established via the Global Network Initiative to ensure that this information is treated properly.”

Is part of the gender gap problem that the tech sector is too much of a chauvinistic culture? [How can we] attract women through culture change? [From @angryafrican]

Graf: “I am very proud that SAP has set a target to increase the ratio of women in management positions to 25% by 2017. We have gone up about 3.5% over the last years.”

Originally written for and published on CSRwire’s Commentary section Talkback on May 12, 2014.

When Sustainability Ambitions Become a Living Plan: Unilever Expands, Deepens Commitments

11 Friday Jul 2014

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Yesterday, Unilever released the latest refresh to its Sustainable Living Plan with yet another subtle headline [don’t blame them for being European]: Unilever Expands Sustainable Living Ambition.

And once again it is seeking to set a mindset shift.

Besides a metrics update that started at the beginning of the month with the announcement that the company had successfully reduced the rate of diarrhea among children from 36 percent to five percent through its Lifebuoy branded handwashing campaign ‘Help A Child Reach 5,’ the company announced its decision to step away from calling the Plan, well, a Report.

A Plan That Is Meant to Evolve

As Chief Marketing Officer Keith Weed told me:

“The Living Plan is meant to evolve. Today, we’re engaging more, we’re collaborating more. We’re not writing a separate report any longer. And I’m proud to say that we’re moving toward an integrated report in our effort show how this is now integrated in our overall plan…why we closed down our CSR department. Sustainability [for us is] integrated, truly embedded across our value chain.”

The company also hosted a live by-invitation-only event in London with 100 senior sustainability influencers to discuss the next iteration of the Plan: an expansion to include three specific social targets:

  • Fairness in the workplace [“We have been working with Oxfam on the condition of factory workers in our extended supply chain in Vietnam – and the lessons we have learned we’re taking global, including a new sourcing policy, which makes clear basic levels of human rights that suppliers must adhere to.“]
  • Opportunities for women [“By 2020, we want to help empower five million women. They’re a key part of our international supply chain.”]
  • Developing inclusive business [“Like our Shakti model in India“]

unilever sustainable living planAnd a re-emphasis of what it considers its most critical challenges:

And a re-emphasis of what it considers its most critical challenges:

  • Helping combat climate change by working to eliminate deforestation, which accounts for up to 15 percent of global greenhouse gas emissions
  • Improving food security by championing sustainable agriculture, and improving the livelihoods of smallholder farmers who produce 80 percent of the food in Asia and Sub Saharan Africa
  • Improving health and well-being by helping more than a billion people gain access to safe drinking water, proper sanitation and good hygiene habits.

The Rarity of Receiving Honest Feedback

I was catching up with Weed – who was among the initial creators of the USLP and continues to lead it across the organization today – right after the live event. And he was in a good mood. “In its early days, everyone was genuinely impressed [with the USLP] and were always polite in giving us feedback. They were probably also scared of scaring us off. But now, three years in, they’re more open with their feedback,” he told me.

The company is making good progress.

Besides good results from its #Iwashmyhands and #toilets4all campaigns, for example, some of the reported highlights include:

  • Over 75 percent of its factories have achieved zero non-hazardous waste to landfill
  • A new technology would reduce plastic in its Dove body wash packaging by 15 percent
  • Forty eight percent of agricultural raw materials are now from sustainable sources, up from 14 percent in 2010,
  • It completed training over 570,000 smallholder farmers and increased the number of Shakti women micro-entrepreneurs in India from 48,000 in 2012 to 65,000 in 2013
  • Avoided costs of €350million since 2008 in reducing raw materials and implementing eco-efficiency measures in factories on energy, water and waste
  • Launched compressed versions of its Sure, Dove, Vaseline deodorants across the U.K., which equal to 25 percent of CO2 savings per can.

As Weed counted off, “We’ve integrated USLP into our core business, brands like Lifebuoy are experiencing double-digit growth signifying that integrating sustainability in the core of your brand works, we’re creating less waste, saving money, creating eco efficiencies across our value chain, and if positioned right, can have everyone involved engaged.”

Unilever on TwitterDemonstrating the [Sustainability] Case Internally

“But perhaps the most important highlight is that we are starting to show progress against our commitments and core belief [about integrated sustainability into our business] internally,” he added.

But other challenges emerged.

“Although water usage across our manufacturing facilities was down, when you take into account our entire value chain, it actually went up as did our greenhouse gas emissions. Also scale is tough.”

And the need for good partners.

“We’re stepping up working with others on transformational change. We’ve learned a lot in the last three years. We need to work with others. For example, deforestation contributes 15 percent of GHG – we’ve been doing a lot of work on palm oil by ourselves. Now [we want to] expand the efforts to government and civil society so that we can get to zero net deforestation by 2020,” he added.

Challenges: Finding Partners, Changing Habits

For a brand as diversified and exposed as Unilever, finding partners that share ideologies are critical as is changing consumer behavior.

Last year, we collaborated with the Unilever team on a communication strategy that told the USLP story as well as helped the company engage in critical dialogue with its diverse audience. Besides a detailed blog series penned by Sustainability Chief Gail Klintworth that took us behind the scenes and on the ground with the USLP goals – and a live Twitter chat that generated hundreds of questions – one of the toughest challenges that emerged was influencing consumer behavior.

And some things are finally starting to shift.

Like the 180 million people who now know how to wash their hands properly. Or the 55 million who now have access to safe drinking water.  Or the 70 million people who have already watched/engaged with Unilever’s innovative Project Sunlight.

“The point is to make sustainable living commonplace. We’re an optimistic company – if you get engaged, let’s work together,” said Weed. “Stakeholders are telling us they felt this was very much a part of our business. People are sitting up and talking.”

Numbers aside, changing habits is hard – and it remains the company’s toughest challenge. “We’re using everything we can from celebrities to local partners and rewards. They say it takes 30 days to change a habit. Initiatives like Project Sunlight are important because of this,” he said.

Or the decision to replace current deodorants with compressed versions. “People see smaller cans and think it’s not value for money,” Weed offered. “But if there is any company that has the resolve to take on these challenges, it’s us. We know markets, scale, know how.”

So what’s next?

Engagement, engagement and more engagement. As the marketing chief put it, “We need to engage more people to think beyond their own communities and families. It will happen.”

More about the USLP Refresh here.

Originally written for and published on CSRwire’s Commentary section Talkback on April 29, 2014.

Carbon Policy: Inside Microsoft’s Efforts to Integrate Sustainability into its Financial Model

09 Wednesday Jul 2014

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On July 1, 2012, Microsoft issued a new corporate policy across 14 business divisions in over 100 countries: Every division would now be accountable for its carbon emissions.

Under the Carbon Neutral and Carbon Free Policies, the company put an internal price on carbon, where the divisions pay an incremental price linked with the carbon emissions associated with energy consumption and business air travel. The funds are then used to invest internally in energy efficiency, renewable energy and carbon offset projects globally.

A tad ambitious?

Not at all, believes TJ DiCaprio, Senior Director of Environmental Sustainability at Microsoft.

“We’re following three pillars to achieve carbon neutrality: 1) Be lean through reducing our energy consumption by driving radical efficiency through use of technology, and reduce air travel to internal meetings. Our primary emissions, for example, come from our data centers’ energy consumption. We also monitor and reduce energy consumption from our offices and software development labs. That’s roughly 30 million square feet worldwide,” she explains.

The other two pillars: 2) Be green by investing in renewable energy and carbon offset projects; and 3) Be accountable through cascading an internal price on carbon globally.

The policies also help Microsoft employees band together beyond the usual. “By internalizing the otherwise external cost of pollution, the price of carbon is now part of the profit and loss statement across business divisions. We have now integrated this across the financial structure and engaged the TJ Dicaprio 2012executives and employees on our commitment to mitigating climate change and investing the funds  appropriately,” she says.

From Innovation & Efficiency to Sustainability

For a long time, the marketplace has associated the technology giant with innovation and efficiency. Now, the company is vying for a third accolade: sustainability.

Acknowledging the impact the company can have in swaying the entire marketplace, DiCaprio says: “We’re constantly asking how we can lean and green our operations. Where can we not only drive efficiency, but also increase the percentage of renewable energy we purchase. How can we support the supply and demand and how can we drive progress through long-term renewable energy purchase agreements.”

Of course, there are other ways Microsoft is becoming greener. For instance, how can the company that reaches over 100 countries support carbon sequestration in developing countries? “When there is sustainability, education, and jobs – all of these tie together when we’re discussing carbon offsets and supporting low-carbon economic development around the world. In fact, offsets are significantly important in extending our reach and value globally,” she emphasizes.

Carbon Offsets: The Allure for Microsoft

In the last two weeks, I had heard similar sentiments from Barclays and Allianz, both financial institutions with global footprints – and investing significantly in carbon offsets. Why then was offsetting not spreading across more organizations? DiCaprio believes there are multiple factors, not least, a challenge in transparency.

“The market is maturing and we are seeing a more professional approach to using technology to manage and store data as well as established standards. There is a growing confidence in the ability of these projects to meet stiff criteria and standards, and to continue to meet these standards over time as cloud services allows for data to be managed and stored, demonstrating lower leakage. We employ a rigorous approach to our investments,” she says.

And herein comes the alignment, i.e., how DiCaprio’s team is managing its carbon reduction policies as a lever to align its business priorities around how technology can enable transparency, education and sustainable economic development. One of the offset providers Microsoft works with is Wildlife Works – who run the Kasigau project in Kenya– with an emphasis on carbon sequestration, social enterprise, and wildlife preservation. “We have been working with them for a year now. We believe that climate change is a serious challenge, and supporting carbon sequestration through carbon finance supports local jobs and provides new educational opportunities for the youth – making a huge difference in improving lives.”

Scale: Impact Through Leadership

Her only worry: without more private sector involvement, Microsoft’s efforts will remain insular.

“This is an exciting time for the private sector to work across our stakeholders and create corporate policies that make sense for business and help support low-carbon economic development. One of the benefits of setting a carbon neutral policy and an internal carbon fee is to set an example for how a business can run more efficiently, reduce waste and carbon, and address its environmental footprint,” she says.

“The model we have designed is simple and repeatable. The more organizations that adopt a similar model, the better off we will all be. The model is built to align with an organization’s  priorities and business strategy while supporting the demand and supply of renewable energy and a low-carbon economy,” she added.

Having recently celebrated the one-year anniversary of the carbon fee implementation, DiCaprio believes it is fulfilling its purpose of bringing together the business mission and a priority of driving efficiency and developing low-carbon economies. While the first year was focused on building the necessary infrastructure to flow through a financial cycle and get the price associated with emissions charged to business units, now DiCaprio also sees the importance of communicating the benefits of the successful model.

“The more we can communicate that carbon finance is a very effective way to integrate the cost of pollution into our economic structure, the more we can help others integrate carbon pricing and the impact of climate change into long-term business planning,” she says.

After all, it’s about taking into account the true cost of doing business.

And DiCaprio’s aspiration speaks to a global sentiment awaiting global acceptance: “We must understand quickly how to tie managerial accounting and the real cost of doing business with traditional financial models. For example, Microsoft pays for energy consumption but it also pays for the cost of offsetting the pollution associated with it. This is the direction we need to follow.”

As the technology company continues its journey, DiCaprio hopes many more organizations will pivot and begin to leverage the “magic of creating and supporting new markets that support sustainability on a global basis.” Only time will tell if once again Microsoft can attract some followers.

Originally written for and published on CSRwire’s Commentary section Talkback on September 12, 2013.

Insurance Giant Allianz Targets Climate Change Risk: Expending “Unavoidable Emissions”

09 Wednesday Jul 2014

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Picture_Martin_EwaldAfter chatting with Barclays’ Director of Citizenship Jillian Fransen on the financial institution’s allegiance to carbon offsetting and how she is leveraging the increasingly popular mechanism to not only offset its unavoidable carbon footprint, I turned to insurance giant Allianz who has also chosen to use carbon offsetting to target deforestation and reduce its environmental footprint.

Excerpts from my conversation with Martin Ewald, Head of Investment Strategy and Renewable Energy/Infrastructure Equity with Allianz Global Investors.

—————-

Describe your emissions reduction program and goals.

Allianz has set itself the target of avoiding, substituting and reducing its own CO2 emissions and is 100 percent climate-neutral since 2012. This means that all remaining emissions are being neutralized – in particular through direct investments in climate protection projects.

By 2015, Allianz aims to reduce its carbon footprint per employee by 35 percent compared to 2006.

What are “unavoidable emissions”?

Unavoidable emissions are CO2 emissions that are intrinsically linked to our business activity, like business travel, that we cannot always avoid or only avoid at very high expense. These emissions are still harmful to the climate. Corporates can take a leadership role in offsetting emissions related to their business activity by investing in responsible sustainability projects – this is not required by regulation in our sector.

But it is responsible behavior and makes good business sense. In fact, we have identified climate change as one of the three most critical sustainability challenges for Allianz (alongside demographic change and access to finance).

Where does offsetting fit into your sustainability strategy?

In addition to our carbon reduction target, being a carbon neutral business is the second pillar of our commitment and contribution to achieving a low-carbon economy.

In 2012, 175,000 credits, each accounting for one metric ton of carbon avoided, were sourced and retired from projects we support – retiring credits means that CO2 certificates, each representing one ton of avoided emissions, are taken off the market. Our remaining carbon footprint was neutralized by credits bought from the carbon market, which underwent a stringent sustainability screening to ensure they met the same high standards as the credits from projects we invest in.

The quality of the underlying projects determines the value of each and every credit in the voluntary sector, and REDD+ rate amongst the highest valued carbon credits.

Why did you choose REDD+ as one of the preferred offsets?

Our investment in REDD+ is consistent with our strategy of supporting effective climate projects in emerging and developing countries. We have invested in forest protection in Kenya with Wildlife Works, one of the leading developers of REDD+ projects. These projects don’t simply protect threatened forests; they also involve the local population and provide them with a source of livelihood.

REDD+ will also raise awareness of how to deal with resources in a responsible manner, besides helping preserve the habitat of the local population. Due to the considerable impact generated, we plan to continue investing in the REDD+ sector.

How has supporting REDD+ benefitted your company – and its stakeholders?

For the CO2 stored by the forests we receive certificates, which we can then use to offset business-related CO2 emissions. This way we ensure our climate neutrality and at the same time make a worthwhile investment. For us the yield also includes enhancing climate protection and biodiversity. We may also benefit from positive branding, but it is too early to tell since 2012 was the first year that we were carbon neutral.

As a financial institution, what is Allianz’s most challenging source of carbon emissions?

Ninety eight percent of our emissions stem from energy, travel and paper. So, the focus is on reducing CO2 emissions in these three areas.

In times of growing business, this is a challenge but we managed to reduce emissions across all three key areas in 2012, i.e. by sourcing lower-carbon energy or by making better use of video conferencing rather than traveling to business meetings.

How are these programs hallmarks of “responsible corporations”?

Since our business activity is not very carbon intensive, investing in REDD+ and similar projects today allow us to lock-in emission reductions over many years. We consider this to be responsible corporate practice: leveraging our capital base to build up the low-carbon infrastructure of tomorrow – be it forest protection or renewable energy, railways or electricity grids. This strategy also pays off, which is important to meet the expectations of our clients and shareholders. And this is a good basis to expand on our sustainable leadership agenda.

What role do you prescribe to Allianz in addressing climate change globally and locally?

We have introduced a group-wide strategy, which commits us to play a lead role in addressing climate change. For us it is about addressing the risks, e.g., the uptake in insurance loss from natural catastrophes, and making use of the opportunities. We have invested about EUR 1.7 billion in renewable energy projects, for instance, and set up a renewable energy fund, which has already attracted significant financial interest from our clients.

Moreover, we offer around 130 green products and services to our customers, including renewable energy home insurance, advisory services related to renewable energy and insurance premium discounts for drivers of electric/hybrid cars. The aim is to integrate climate change into our business  model, step by step building the business case for a climate friendly economy.

How can the private sector play an important role in reversing/addressing climate change? 

By understanding the climate issue as an investment case. Protecting forests is the cheapest way of saving carbon. To speak bluntly: if we first cut down the forest and then try to reduce the same amount of carbon we emitted, it would be much more expensive than just avoiding deforestation.

But as stated before, the most distinguishing factor about REDD+ is the opportunity to carry out investments that help improve social livelihoods and support local communities as well. Therefore supporting projects like the pioneering activities of Wildlife Works are appropriate activities that corporations need to support.

As long as there is no internationally binding climate protection agreement and as long as national regulation lacks teeth, the REDD+ market allows us to participate in voluntary projects around the world to address climate change. Consequently we have just carried out an additional REDD+ transaction in Indonesia.

What do you expect from policy makers to help expand your clean investments?

We stand at a critical juncture. We can continue business as usual with a small but dynamic niche of renewable energy projects and a reliance on fossil fuels for the big chunk of our economy. But this will not prevent dangerous levels of global warming.

Or we embark on a trend change, as we hopefully are seeing right now in Germany.

For this, we need a clear and reliable regulatory framework that gives investors appropriate incentives and the necessary regulatory certainty to finance clean technologies rather than coal or oil.

Originally written for and published on CSRwire’s Commentary section Talkback on September 5, 2013.

The Social & Environmental Case for Carbon Offsetting: In Conversation with Barclays

09 Wednesday Jul 2014

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This is Part 1 of a series examining how leading companies are leveraging carbon offsetting and REDD+  to sustain their environmental footprint and target climate change.

“Our vision is about having a proportionate social impact on society.”

That’s how Jillian Fransen, Barclays’ director of Citizenship describes the bank’s elevated – and recently refreshed – sustainability agenda. Among the new elements: a three-year CSR strategy released last year, new stretch environmental targets, supporting growth among the SME sector, and a new Balance Scorecard, which benchmarks remuneration for the bank’s top 125 executives according to four Cs – one of which is Citizenship.

Fransen’s team is also on the cusp of launching an industry-leading Code of Conduct, besides managing and maintaining a 60 million-pound Community Investment Fund and a 20 million-pound Social Innovation Fund, created specifically to seed projects and partnerships that really push the needle on sustainability.

But, of all the things Barclays is doing, what piqued my interest was a core concentration on reducing its unavoidable emissions through carbon offsetting in the company’s climate program.

Carbon Offsetting: Need vs. Efficacy

Now while carbon offsetting has suffered from its share of misconceptions – and remains a relatively new idea in the U.S. – there is a critical need today to get past the debate and begin addressing unavoidable emissions.

Because despite the most robust plans in place that curb air travel and other activities, commerce requires both energy and fuel. And with the growth, availability – not to mention supporting infrastructure – of renewables relatively slow, it becomes a question of operating with what’s available. That is the reality for businesses. And Barclays is no exception.

Calling them “unavoidable emissions,” Fransen explained:

“We buy offsets for the footprint we incur outside our minimization program. We are doing everything we can to minimize emissions but there are those unavoidable emissions that we just cannot remove – like air travel. So to minimize their impact, offsetting fits quite well in our Climate Program.”

The Program focuses on three areas: climate change, developing products for low carbon economies and risk management services for clients with low carbon opportunities.

The firm, which wants to minimize its environmental footprint by 10 percent by 2015, works with Wildlife Works and Reducing Emissions from Deforestation and Forest Degradation [REDD+] projects for its offsets strategy. According to the United Nations website, REDD+ “is an effort to create a financial value for the carbon stored in forests, offering incentives for developing countries to reduce emissions from forested lands and invest in low-carbon paths to sustainable development.”

As Sibilia decoded in his article, the intended impact of the offsetting (emission reductions) leads to not only forest conservation but also a parallel movement to create self-sustaining social enterprises that recuperate the local economies and build social independence. Therein lies the true impact of UN REDD Programmeoffsetting, he concluded.

For Fransen, similarly, the appeal of working with REDD+ lay in Wildlife Works’ expertise and experience in protecting threatened forests  – and its track record with local communities. “Twenty percent of emissions come from deforestation so it made sense for us to partner with organizations that could help us find areas where forests were being destroyed. That way we can have direct impact where it is most needed,” she said.

Then there is the added advantage of targeting local communities in key markets where Barclays operates. “We wanted to take accountability for our footprint. Additionally, Wildlife Works operates in Kenya, which is a key market for us. We are in 13 African countries – the oldest bank across eastern Africa — so having an on-the-ground partner there was key for us. ”

The real impact of implementing a carbon offsetting strategy then for Barclays?

“Create accountability for a footprint that the firm is otherwise unable to get rid of. That wakes people up. When we can have localized impact, it’s a win for us,” she responded.

Climate Change: Decoding the Impact of a Bank

Besides what seems to be the main area – air travel – what is Barclays most challenging source of carbon emissions?

“We have a network of hundreds of small branches. Our biggest challenge is availability and collection of relevant data about our water and paper use as well as waste. Not all our operations have the same level of management and facility support. Especially in Africa, it is very hard to ensure commitment to some of the improvements that are required in this year,” she said.

Another challenging area is the bank’s indirect impacts through its lending practices. “Where we choose to lend and what impact that has on the environment is critical. We need to hit this on a macro level. When you go to lend to an oil and gas company, we need to stand up to our commitment. They work with a minimum of 16 banks – we’re one piece of a large network,” she explained.

The Need For “Some Serious Leadership”

While our conversation mostly focused on Barclays’ carbon reduction strategy, it was hard to contextualize that without questioning what role Fransen’s contemporaries in the financial sector needed to play to sensibly address climate change.

Could Barclays continue to make progress without reciprocation from a sector busy repairing tarnished reputations from the financial crisis?

“There is a major shift going on toward a realistic understanding of what we need to do to adapt to climate change. In my opinion, none of this is happening quickly enough though. We need some serious leadership within our industry in the next five years to change gears on climate change,” she emphasized.

“Our biggest challenge is making it real for everyone in the organization. We have 142,000 employees that manage a matrix of clients and customers. The [impact they can have] is profound. I’d like to see us capitalize on this matrix much more. There’s a feeling, not limited to banking, that we’re doing our bit and everyone else will do theirs – and we’ll be okay.”

“Fact is, the issues are way more pressing for us to rest on that assumption.”

Originally written for and published on CSRwire’s Commentary section Talkback on August  28, 2013.