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The #CVSEffect in Action: Wagon Train Edition — IKEA, GM, Mars Stand Up for Climate Policy

Here’s my latest for Sustainable Brands.

Previous articles in this series talked about leading businesses taking bold steps on their own for the common good — because it’s the right thing to do — even if it costs the company financially in the short term.

This time I want to point to the latest wave of businesses working collaboratively on the urgent, common ground issues of renewable energy and climate policy. In America’s history of westward expansion and exploration, pioneer families came together in wagon trains for mutual support. In the same way, the examples below show that businesses are taking action, together, to ensure a more certain future that’s good for all of us and for business.

To start off, a June 2014 clean energy report by Ceres, WWF and Calvert Investments supports the idea that this trend is gaining momentum. The report makes the case that big US companies are already investing in renewable energy as a basic “business as usual” material issue, including UPS, Cisco Systems, PepsiCo, United Continental and General Motors. These and the other companies in the report have already saved a billion dollars in energy costs and upped their business planning certainty. Far from a fringe or boutique concern, renewable energy investment is about knowing where your energy is going to come from tomorrow, and having some sense of how much it will cost.

It’s worth noting that several cross-sector partnerships and multi-stakeholder groups for climate issues have been working on these issues for years. The UK- and EU-focused Prince of Wales’ Corporate Leaders Group first convened in 2007. And the US-focused group BICEP has been advocating for energy and climate legislation since 2008, with its Climate Declaration attracting over 700 corporate signatories to date. (For more examples of creative, effective partnerships on climate-impacting issues, take a look at Sustainable Brands’ collaboration and co-creation channel.)

But just in the past three months, there have been several high-profile announcements, as well as one intriguing low-key entry. These are four groups to watch:

1. March 2014 — Business Alliance for the Future Meets for First Time
The Business Alliance for the Future is a new alliance of alliances that’s being organized and supported by about 40 business affiliations including BSR, B Team, Ceres, World Business Academy, SVN, National Association of Women Business Owners, Young Presidents’ Organization and others to “to connect, magnify and exponentially accelerate, business’ role in building a world where business excels, people thrive and nature flourishes.”

The group first met in March in Santa Barbara, CA and it is scheduled to meet again in October at the Fowler Center for Sustainable Value at Case Western University. The Alliance is formulating its strategy around the intention to dramatically impact existing game-changing projects (to the tune of 5x in 5 years) by fostering action-oriented collaboration.

According to Alliance member Jeana Wirtenberg, co-founder of the Institute for Sustainable Enterprise, who is heading up one of the working groups, “There are several collaborative action team initiatives already well under way, including: amplifying and spreading a new business narrative; creating 100 percent renewable energy economy; participating, aligning around, and designing a grand economic strategy; and developing and implementing a new corporate scorecard and metrics.”

2. May 2014 — We Mean Business Coalition Launches
While we don’t have specifics yet about what this group will tackle, We Mean Business stated goal on their website is to call for “ambitious climate policy and bold climate action.” The group is like a super-pod of business action leadership, with partners from BSR, CERES, CDP, the World Business Council for Sustainable Development, the Climate Group, and the Prince of Wales’s Corporate Leaders Group, in conjunction with Nike and IKEA.

3. June 2014 — Small Business Poll Shows Support for Market-Stabilizing Rules
In late June, the American Sustainable Business Council released poll results showing that US small business owners support climate rules for market stability and predictability.

The survey found that “clear majorities of small business owners are concerned about how climate change will affect their companies, including its impact on energy costs, health care costs and the infrastructure they depend on. Survey respondents voiced strong support for government action to address climate change, specifically, efforts to limit carbon pollution from power plants which produce a third of all U.S. carbon emissions.”

I find this poll interesting because it shows that leaders from small US businesses are on the same page when it comes to wanting business certainty in the face of climate instability as many of their colleagues at global behemoths.

4. July 2014 — Launch of Renewable Energy Buyers’ Principles
And on July 11, the World Wildlife Fund (WWF) and the World Resources Institute (WRI) announced that 12 major companies — spanning communications, manufacturing, consumer goods and tech — are jointly asking utilities and energy suppliers to offer more renewable energy products.

The Buyers’ Principles provide a coordinated starting point for what these companies need in terms of options, financing, contracts and emissions levels. The inaugural signers are Bloomberg, Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, Novelis, Procter and Gamble, REI, Sprint, and Walmart. I’m hoping that this will be an unmistakable unmet need signal to the energy market that yes, business wants more renewables and is willing to pay for them.

In my mind, these groups are coming together now for one profound reason. With government paralysis on one side and entrenched lobbying for the fossil fuel status quo on the other, the Cavalry isn’t coming. If renewable energy and climate action are going to be truly become Business as Usual for successful companies — as Ceres’ clean energy report posits — then business has to make it happen.

Together, I see all these efforts leading up to this September’s UN Climate Summit in New York City, where business will be asked to take on larger and more meaningful commitments. Just last week, the UN event’s organizers and partners called for business leaders willing to stand up for carbon pricing “as a necessary and effective measure to tackle climate change.”

And then, it will be time to take all this positive forward momentum to the COP21 meeting in Paris in December 2015. That’s where, once again, the entire world will attempt to agree on climate action and who is going to pay for it. I’m hopeful that, by the time we get there, collaborative efforts like these will have blazed the trail for business to be a major part of the solution.

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Leaders Now Seeing Climate Change as Risk That Can Be Managed, Not Uncertainty That Can’t (New for Sustainable Brands)

Here’s my latest trend piece for Sustainable Brands.

February 14, 2014

Leaders Now Seeing Climate Change as Risk That Can Be Managed, Not Uncertainty That Can’t (New for Sustainable Brands)

Last month, a front-page New York Times story reported that global business leaders Coca-Cola, Nike, and others are factoring in climate change risks as threats to the bottom line. This news followed CDP’s December reveal that 29 major companies use a shadow carbon price in their finances for climate risk evaluation.

What do these stories have in common? Risk.

I’ve noticed a decisive pivot in business conversations about climate change impacts from uncertainty — as just cause for delay or inaction — to a core business competency: managing risk. For forward-looking companies, this pivot may signal a tipping point from academic discussion to business action that they can use to their advantage.

Simply put, this change moves the conversation from: “What if we’re wrong about potential climate change-fueled catastrophes?” to “What if we’re right? What do we stand to lose, and how can we manage those risks?”

As an example of how this conversation has shifted, look at how Talking Climate’s Adam Corner explored uncertainty versus risk as an academic finding in November 2012. Compare that to his forceful Jan. 31 Guardian piece calling for the framing of risk over uncertainty as a business imperative.

While this idea may be familiar to SB readers, it’s worth noting how fast and far the “risk rather than uncertainty” message is spreading to broader business audiences — and who is delivering the message.

Forward-thinking business leaders and influencers can leverage this momentum for action within their organizations, and with industry peers, supply chain partners, customers, government and civil society allies.

Here are 11 notable recent instances in which business conversations about climate-change impacts center on risk:

Sept. 9, 2013: Harvard Business School’s “Working Knowledge” site reports on shifting the debate about climate change from a political discussion to a practical conversation about risk and reward.

Oct. 3, 2013: Financiers Michael Bloomberg, Hank Paulson and Tom Steyer announce their year-long “Risky Business” initiative to measure U.S. economic risks from climate change impacts.

Oct. 24, 2013: Investors ask oil, coal and power companies for climate risk information.

Dec. 6, 2013: Climate scientist Tamsin Edwards reports her findings from a meeting called “Communicating Risk and Uncertainty around Climate Change.”

Jan 15: Ceres hosts the Climate Risk Investor Summit with 500 global financial leaders.

Jan. 23: Sustainability thought leader Bob Willard posts “Unleashing 3 Risk Arguments in the Climate Debate” article

Jan. 24: At the Davos World Economic Forum, World Bank president Jim Yong Kim calls for carbon pricing and climate risk disclosure by government, businesses and NGOs

Jan. 30: Citing fiduciary duty, 17 philanthropic groups pledge divestment from fossil fuels and investment in clean-energy technologies as a “prudent response to climate risks.”

Jan. 31: Bloomberg starts his new job as United Nations special envoy to help cities around the world prepare for climate-change risks.

Feb. 5: White House announces “climate hubs” to help farmers and rural communities respond to climate risk.

Feb. 7: A new Ceres report shows more companies reporting climate risk to CDP than to the SEC.

The scientific consensus on human-caused global climate change hasn’t changed that much in the past 10 years. In that time, there’s been very little climate action overall. But now that’s clearly changing.

It’s been said that, “When we change how we look at things, the things we look at change.” I’m encouraged that global leaders in business, finance, government and behavioral economics are shifting to talking about climate-change impacts as business risks that can be managed rather than uncertainty that can’t.

This is a powerful mindset we can use to help achieve broad, global sustainability gains at every level.

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15 Things that Happened in 2013

Here are the things that caught my eye in 2014.

Some are noteworthy but unnoticed. Others soaked up a lot of well-deserved attention and ink.

All contributed to the growing tide of awareness that climate change action is urgently needed now.

Feb 28
Shell Bets on solar as dominant energy source by 2100, in little-noticed report
Carbon Brief

Mar 19
Pope Francis assumes the Papacy and chooses the patron saint of the environment as his name
Pope Francis carpools, downsizes, blesses, kisses, lives modestly, and reminds the world to care for the world’s poorest people. In his homily, Francis described the church’s mission as “respecting each of God’s creatures and respecting the environment in which we live.”
The Guardian

April 10
Ceres’ Business for Innovative Climate and Energy Policy (BICEP) launches the Climate Declaration
Climate Counts

April 18
Carbon Tracker releases its Unburnable Carbon report
New York Times

April 18
Bill McKibben’s 350.org’s fossil fuel divestment group releases “Do the Math”
Good

May 10
Climate hits 400ppm of CO2 for first time in 3 million years
Treehugger

June 25
President Obama announces his Climate Plan
The White House

Aug 19
IPPC report predicts near certainty on human-caused climate change
New York Times

Oct 10
LA Times announces it won’t public climate denier letters
Grist

Oct 24
Acknowleging reality and poking the bear, investors ask oil, coal and power companies for climate risk information
Forbes
Ceres

Nov 7
Super Typhoon Haiyan makes landfall in the Phillippines
Wikipedia

Nov 11
Yeb Sano pleads for climate action at the UN meeting in Warsaw
Youtube

Nov 21
Civil society and environmental groups walk out of UN Climate meeting talks to protest inaction
The Guardian

Dec 6
Signaling a foregone conclusion, 29 companies reveal they are already factoring a carbon price into their finances
Carbon Disclosure Project

Dec 16
Demonstrating momentum for pro-science climate action, Reddit science forum bans climate deniers
Grist

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Green Business: Investors Stepping Up for Sustainability Requirements

Climate change is looking realer by the minute.

And with a growing recognition of the risks that climate change poses to the global economy, investor communities are taking steps to understand and manage those risks.

So in big news, an investor group announced April 8 of the first steps to set across-the-board sustainability listing standards for all stock exchanges worldwide.

This means that companies would be required to report on eight specific issues: climate change, diversity, employee relations, environmental impact, government relations, human rights, product impact and safety, and supply chain.

If it works, this will dramatically raise investor awareness about environmental, social and governance issues as need-to-know information.

Essentially, this reporting will shine a light on not only what and how much a company makes, but how they do it, and where, by whom, and their impact on the earth as a whole.

Via ceres.org:

Investors Announce Proposal for Sustainability Listing Standard for Global Stock Exchanges

A group of investors today announced a Consultation Paper with recommendations for integrating sustainability disclosure requirements into listing rules for U.S. and global stock exchanges.

The draft recommendations were developed by nearly a dozen investors who are part of the Ceres-led Investor Network on Climate Risk (INCR). BlackRock, British Columbia Investment Management Corporation, and the AFL-CIO Office of Investment are among those who participated on the INCR Listing Standards Drafting Committee.

The initiative is part of a growing effort by investors and stock exchanges, including NASDAQ OMX, to make environmental, social and governance (ESG) disclosure a consistent requirement for corporate listings on stock exchanges. While several exchanges have adopted their own sustainability listing requirements and guidance, INCR members and NASDAQ OMX have set out to develop a uniform standard that all stock exchanges can use.

Bloomberg’s coverage of this story includes some helpful background as well.

Via bloomberg.com:

Investors Propose Requiring Sustainability Data Disclosure
Investors Propose Data Disclosure Standard For Listing Companies

A global sustainability listing standard would allow investors to compare companies on their environmental, social, and governance performance.

The proposed listing standard would require companies to discuss how they determine which environmental and social issues are material to the company, to provide a link in their annual financial filings to a list of sustainability data, and to disclose information on eight specific sustainability issues or explain why they do not.The eight specific issues on which companies would be required to disclose information are climate change, diversity, employee relations, environmental impact, government relations, human rights, product impact and safety, and supply chain.

Some stock exchanges have already adopted sustainability listing requirements. Companies listed on the Johannesburg stock exchange must disclose sustainability information or explain why they do not.

Sweden requires all state-owned companies to report on corporate responsibility activities, and Denmark requires all listed companies to report on sustainability performance. Companies listed on the London Stock Exchange are required to report their annual emissions data as of April.

 

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Green Business: 33 Leading U.S. Companies Declare It’s Time for Climate Action

If you want something done right, do it yourself.

That seems to be exactly what 33 leading U.S. companies intend to do about about taking action on Climate Change.

Read the Climate Declaration.

Yesterday, in coordination with Ceres and  its Business for Innovative Climate and Energy Policy (BICEP) coalition,business leaders from dozens of  profitable, responsible, highly regarded companies issued a call to action.

The Climate Declaration is framed around a single statement of economic opportunity:

“Tackling climate change is one of America’s greatest economic opportunities of the 21st century.”

(and it’s simply the right thing to do.)

Hear that?

The Declaration isn’t about how mitigating climate change impacts will be easy. Or required by federal regulators (although that might be coming later.)
No, because it’s hard. And in that hardness lies opportunity and the potential to make a whole lot of customers happy.
All while ensuring that there will be a planet on which to have happy customers a few generations from now.  That’s where the right thing to do part comes in.)

Here’s IKEA US President Mike Ward on how his company is taking steps to lighten their global footprint. And how there is a right connection between those actions and bottom-line, profit-reaping, employee-growing results:To Fix the Climate, Think Like a Business

According to the Ceres’ announcement, the inaugural signatories “provide approximately 475,000 U.S. jobs and generate a combined annual revenue of approximately $450 billion.”
I signed on yesterday for my small business. I hope millions of others will too.
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Green Business: More on Measuring Whether Investors Care

Investors aren’t buying it.

Sustainability, that is.

Even though Sustainability-driven companies can compete and even perform their competitors and return value to their shareholders.

Here’s how BrownFlynn senior consultant Christopher Thomas put it in Greenbiz.com

“The vast majority of investment capital is still directed to assets judged best to deliver risk-adjusted appreciation rapidly with little direct concern for the environmental and social impacts core to the CDP and other ESG disclosures. “

Allow me to translate.

Most investment money gets placed on bets that deliver short-term monetary gains. Without concern for how a company hurts the planet or people.

That’s a problem. Because we need the investor community to start pouring money–on a global scale–into Sustainability-minded companies so that environmental and energy solutions get to scale.

Here’s the full article via Greenbiz.com:

Do investors care about companies’ climate change disclosure?

Taken at face value, more evidence surfaced this month supporting a close relationship between company market performance and the disclosure of environmental, social and governance criteria. Less clear is when more investors will reward ESG disclosure and inspire nondisclosing companies to get on board.

The sky’s not entirely bleak, though. I see breaks in the clouds from maturing and incipient reporting structures (CDP & GRI & SASB), disclosure requirements and shareholder involvement.

A few to check out:

Deloitte: Finding the Value in Environmental, Social, and Governance Performance

Carbon Disclosure Project: A third of the world’s invested capital calls for corporate environmental data through the Carbon Disclosure Project

ProxyPreview: Helping Shareholders Vote Their Values

Ceres: 2013 Shareholder Resolutions

I believe that the investor community can be encouraged to shift the status quo of short-term gains towards a longer-term Sustainability-driven approach. I take heart from the growing evidence that pressure–positive or otherwise–from shareholder resolutions concerned with climate change and energy gets results.

I just hope the shift happens soon enough to make a difference.

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Green Business: Shareholders Push Environmental Resolutions

Shareholders talk, board of directors listen.

Via EnvironmentalLeader.com:

Apple, Colgate Among Companies Agreeing to 44 Shareholder Resolutions

Apple, Intel, Colgate, Smucker’s, Crocs, and Garmin are among the companies whose investors successfully used shareholder resolutions to spur corporate action on climate change, hydraulic fracturing, supply chain and water availability risks, among other sustainability issues, during the 2012 proxy voting season.

Advocacy group Ceres says of the some 110 resolutions is tracked in 2012, 44 proposals resulted in US companies making commitments to confront environmental and social risks in their operations and supply chains.

It’s important to note, however, that these shareholders are not individuals. More often, these resolutions are driven by powerful investment groups charged with managing public and institutional funds, such as:

The New York State Comptroller’s Office secured agreements from Apple, Dell, HP and Intel — firms representing more than 50 percent of the personal computer market, according to Gartner analysts — to encourage or require their major suppliers to issue sustainability reports that address environmental issues, Ceres says.

Also in 2012, Calvert Investments and the comptroller’s office won commitments from Colgate and Smucker’s, respectively, to source 100 percent certified sustainable palm oil for their products. Additionally, 37 percent of shareholders of Yum! Brands, the parent company of Taco Bell, KFC and Pizza Hut, voted in favor of a shareholder resolution filed by Trillium Asset Management, requesting that the company source 100 percent certified sustainable palm oil.

These resolutions will require corporations to take positive action on climate change, fracking, supply chain and natural resource availability risks.