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The Guardian

Winter Olympics 2014: Missed Opportunities to Advance Sustainability | The Guardian

Are the corporate sponsors of the Sochi Winter Olympics missing a big opportunity to advance sustainability globally? Photograph: Alexander Nemenov/AFP/Getty Images

Beyond Dow’s commitment to offset the games’ carbon footprint, big sponsors are doing too little to advance sustainability |

The Sochi Winter Olympics, which opens 7 February, was meant to be the greenest Olympics ever. The budget was certainly there: Russia has doled out more than $51bn, an all-time record, to make the event happen.

Yet reports of serious environmental problems have been piling up for months. The UN and World Wildlife Fund have called out Russia over construction practices that damaged the region’s pristine natural ecosystems.

And in October, the Associated Press reported it had found mountains of construction debris in an unlicensed landfill, indicating Russia had broken its promise to make the games zero waste. And, ominously, environmental activists have reported being harassed by officials. It’s a discouraging prelude to the games.

Yet I wondered if there might be a silver lining to be found amid the sustainability commitments made by the game’s corporate sponsors.

After all, while the credibility of the Russian organizers’ on these issues has all but melted away, the corps of 10 worldwide sponsors includes major global brands, many of which have made deep, long-standing commitments to sustainability.

My findings? With one dramatic exception, the games’ deep-pocketed sponsors have done too little to promote sustainability as an element of their efforts at Sochi.

The games’ worldwide sponsors are a familiar lot, including six iconic US brands, Coca-Cola, Dow Chemical, General Electric, McDonald’s, Procter & Gamble and Visa; two Asian electronics giants, Japan’s Panasonic and South Korea’s Samsung; and two European companies, France’s Atos and Omega from Switzerland.

This top-tier level of sponsorship, rumored to cost at least $100m per four-year cycle, is far from trivial. And given the International Olympic Committee’s growing emphasis on sustainability – the past two games in London 2012 and Vancouver 2010 are considered the greenest ever – these sponsorships seem an ideal platform in which to mix a high-profile sustainability push.

Yet that doesn’t seem to be happening. For this exercise, I mined online press material and related documentation and emailed each company. Only Dow replied with detailed information. Here’s what I found:

Dow: Sochi’s “official carbon partner”

In a first for the games, chemicals giant Dow has pledged to offset the organizing committee’s entire direct carbon footprint – including greenhouse gas emissions from operating the games’ venues, as well as from travel and lodging for all athletes, staff and volunteers – as well as the estimated travel footprint of all spectators and media attending the Olympic events and the Paralympic Games, scheduled for March.

Dow estimates it will offset emissions equivalent to 360,000 metric tons of carbon-dioxide for the organizing committee, plus 160,000 metric tons for spectators and media. For perspective, the total estimated 520,000 metric tons is equivalent to removing approximately 102,000 cars from US roads, or neutralizing a year’s worth of direct and indirect emissions from 10,800 US homes.

Dow is offsetting these emissions with a mix of completed and ongoing projects, principally in Russia, but also in Brazil and South Korea, which will host the next two Olympics, and other regions. These include farming enhancements, such as low-till farming methods; building efficiency gains via better insulation and other technologies; and industrial upgrades. In the US, Dow is deploying a share of the verified offsets generated from capturing and recycling methane at a waste dump in Georgia.

The broad portfolio of projects, Dow claims, meets international standards and the International Carbon Offset and Reduction Alliance Code of Practice, the global benchmark for offsets. “Dow’s initiative represents a significant step forward in terms of sustainability for one of the world’s main sporting event,” according to a company statement.

GE and turbine power

The only other sponsor with a clear environmental angle to its Olympics pledge is GE. The conglomerate is supplying two very high efficiency “aero-derivative” gas turbines to help power the games. The units, which will provide both base load and peak load power to the Olympics village and venues, feature GE’s latest emissions technology.

Evolved from airplane jet engines, the model is designed to ramp up and down in less than 10 minutes, which makes it well suited to pair with the variable output of wind turbines, solar panels and other renewable energy systems.

That’s not to say that renewable energy will be powering Sochi. Despite early estimates of promising potential for geothermal, solar, hydro and wind and some building-level projects, there is scant evidence that any substantial new renewables capacity has been built.

Everyone else

From there, evidence of sustainability efforts by other corporate sponsors tapers off sharply. For their part, Coca-Cola and McDonald’s, both long-time Olympic sponsors, have focused on health – but details are scant. Coca-Cola Russia said it plans to launch a traveling showcase of activities promoting an active, healthy lifestyle during the Winter Olympics.

A survey of news and press materials of the remaining half dozen top-tier sponsors (Atos, Omega, Panasonic, P&G, Samsung, and Visa) turned up no explicit sustainability goals in their Sochi commitments.

To be sure, I hope there are other sustainability efforts afoot that I missed. I welcome information on other programs in the comments below.

Big platform, big responsibility

But the overall direction of the Sochi games is discouraging. It’s a pity that more companies aren’t using the Olympics to up their sustainability efforts, not least because the event offers such far-reaching visibility.

As the Natural Resource Defense Council’s eco-sports guru Allen Herskowitz says, only about a tenth of the public follow sciences, but nearly two-thirds follow sports. This means that sustainability actions in sporting arenas have supersized potential to normalize greener practices.

And, lest we forget, lurking beneath the immediate question of sustainability is a deeper worry about climate change, particularly as it impacts the viability of future winter sports.

In winter playgrounds around the world, climate change is already degrading the seasonal conditions that skiers, boarders and others depend on. In Vancouver 2010, unseasonably warm weather forced the games to resort to extreme measures, such as hauling in stored snow.

Sochi 2014 also has been stashing snow, and is ready to deploy an army of energy-intensive earth-movers and snow-making systems to make ready for the games. It’s good to know Sochi is prepared for a potential shortage of the white stuff.

Still, it would be better to know the games and their partners are working today to avoid climate troubles and warmer winters tomorrow.

The Guardian

Designing for Sustainability: Facing the Challenges Behind Green Materials | The Guardian

Patagonia rejected fabrics made from bamboo over concerns about chemicals used to process the plant fiber.

Sustainable materials are gaining ground, but long development time frames and gaps in knowledge make commercialisation tricky |

Learning to surf in California’s frigid breakers, Todd Copeland, a design guru at the Patagonia clothing company, concluded that wet suits weren’t cutting it. Sure, a traditional Neoprene suit could keep him warm, but the suit’s material could be synthesised only from non-renewable, energy-intensive resources such as petroleum or kiln-baked limestone.

In spring 2008, Copeland blogged about the need for a truly green alternative. And, later that summer, his cry found its way to Yulex, an Arizona-based company working to resurrect a low-energy, low-toxin recipe for rubber from guayule, a desert shrub native to North America. Research on the plant peaked during the second world war but was then was shelved. Yulex had restarted the work around 2000 and was making hypo-allergenic surgical gloves, but was seeking a new market. It saw Copeland’s post, and soon its reps came knocking.

Yulex’s efforts are set to pay off later this fall, when Patagonia releases a full wetsuit made from a 60:40 blend of guayule and conventional Neoprene, five years after Copeland initiated the search. “We hope to get that to 100% [guayule], but it takes time to learn a new material,” says Copeland, now Patagonia’s environmental product specialist.

This serendipitous match between designer and material maker is, unfortunately, a rare exception. Speaking to Copeland recently, I wondered how many misses Patagonia has evaluated for every successful innovation, such as Yulex, it brings to market. “100? Probably more,” he speculated. “And many, many more don’t even make it that far.”

The tale of Patagonia’s eco-wetsuit offers a parable of the larger challenge facing green materials on the path from lab to market. The process remains a maze that few materials survive. But a recent survey of design leaders reveals that while eco-materials still face a tougher journey than their conventional counterparts, the process of green technology transfer is gaining momentum.

Sales of green materials are surging

Though spotty, statistics on green materials markets are all pointing up. The building industry is one of the largest shifting towards lower-impact practices. In the US, the green construction market is worth roughly $100bn, a ten-fold rise since 2006, according to the 2013 Dodge Construction Green Outlook. As a share, green construction now accounts for 44% of total US commerical and institutional construction, up from near zero a decade ago.

Anecdotal evidence suggests that big corporations are deepening their commitment to these priorities, as well. In 2006, Du Pont set out to double sales of products made from “non-depletable resources” to $8bn by 2015. The US chemicals giant blew by that mark four years early, racking up $10bn in green-materials revenue in 2011 (most recent data).

Green adoption has been accelerating at Ford, too. A decade ago, engineers at the No2 US automaker were skeptical of the cost and performance benefits of alternatives. Today, following a flurry of successful material substitutions, design engineers are required to evaluate and opt for green candidates where they equal or exceed conventional materials.

Sustained internal commitment is vital

Ford’s shift didn’t come quickly. “We were kicked out of conference rooms,” laughs Debbie Mielewski, technical leader for Plastics Research at Ford Motor Co, recalling her efforts in the early 2000s to pitch bio-based plastics to the car maker’s internal development engineers. “They saw only risk and additional cost,” she says.

But thanks to the protection of Bill Ford Jr, the company’s then CEO, Ford’s bio-plastics R&D program had the time and funding to mature new offerings to the point where today soy-based polyurethane foams are used in the seat cushions, backs, and headrests of all vehicles built in North America.

A focus on value and performance has helped reverse early skepticism. “Our goal has always been to match the price and performance of any material we’re hoping to replace,” she says.

To cultivate and scale production of new materials, suppliers will need help

Internal approval of new green materials isn’t always enough.

For strong, smooth plastics used to make bins and liners, Ford has successfully replaced glass fibres with wheat straw – the fibrous waste left when wheat is harvested – to reinforce the plastic.

Yet as Mielewski points out, ensuring consistency of the straw’s strength posed a new challenge, as did ensuring uniform size of the material, which must be milled into identical short lengths to be blended into plastic. “In Canada, wheat straw used to be burned,” she says.

To change that practice, Ford collaborated with farmers and third-tier suppliers to develop a supply chain to recover, test and standardise the processed straw. Without Ford’s commitment to the end product, the investment wouldn’t have happened, says Mielewski: “A third-tier supplier had to invest in and build a mill to meet our demand. That takes real confidence.”

Recovering waste takes patient, innovative collaboration with vendors early on

As its commitment to recover and re-use waste carpet materials started to take root in the 1990s, Atlanta-based Interface, a $1bn-per-year manufacturer of carpet tiles used primarily in commercial spaces, recognised it could push this goal only as quickly as a key fibre supplier, Italy’s Aquafil, was able to develop and scale-up processes to harvest fibers from recovered carpets and to then re-melt them for use in new carpeting.

“This was more of us pushing [recycled materials],” by Interface, “rather than a pull” from the market, says Nigel Stansfield, Interface’s vice president and chief innovations officer. “We had to overcome a perception that recycled was more costly, or performed less well.”

Interface also faced a reverse logistics challenge: it had to work with existing and new partners to learn how to capture and truck tons of carpet back to its partner plants. “To make this work, we’ve had to focus on all parts of the product’s life cycle at once,” Stansfield says.

At the installation phase, for example, this has meant educating flooring installers to abandon long-standing practices of gluing carpets down, which damages the material at the later recovery stage. Interface instead relies on gravity and strong adhesive patches to link its carpet tiles and keep them carpets locked down.

And at the end-of-use stage, the move has meant developing reverse logistics flows, to steer carpet waste away from landfills, and back to re-processors such as Aquafil.

Vetting green materials remains a weak link

Designers are widely frustrated by a lack of consistent, reliable services that can authenticate green materials’ virtues. The industry needs a “greenwash monitor,” Patagonia’s Copeland says. There has been some movement toward this goal, with efforts including Nike’s MAKING app, Material ConneXion, and the Sustainable Packaging Coalition.

Green materials can fail an evaluation for many reasons. A few years ago, Patagonia became interested in bamboo-based fabrics. The cultivation of fast-growing bamboo was appealing as a sustainable raw material. But on deeper investigation, Patagonia passed on the new fabrics because the process to convert bamboo into fibres proved just as toxic as the standard viscose method.

Likewise, PLA, a bio-plastic made from corn sugar, has attracted interest both as a renewable resource and because the end product is biodegradable. But in a car’s cockpit, durability is paramount, and Ford found that in tests, the stuff didn’t hold up. PLA plastics would “begin to compost in the car,” Mielewski says.

Resist the bias toward replacing old with green

“Most clients think that sustainable design is simply a case of switching existing material for a greener option,” says Chris Sherwin, head of sustainability at Seymourpowell, a London-based design advisor. “Same product, new material: that’s wrong on many grounds.”

Sherwin argues that its critical to understand that the stuff from which a product is made often accounts for only a tiny fraction of the impact of the use-phase of a product’s lifetime. Hence, it’s smarter for laundry soap makers to improve the performance of their detergents in cold water rather than focus solely on revising packaging.

“We should start with more fundamental product redesign,” Sherwin says. “We must start by asking, how will the consumers’ needs best be satisfied, and design accordingly.”

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Check out the original at http://www.theguardian.com/sustainable-business/designing-sustainability-challenges-green-materials

The Guardian

Can a new architecture revive the UN Global Compact? | The Guardian

As business enthusiasm wanes, the UN Global Compact unveils new investment opportunities. Will it be enough to attract more participation?

UN secretary general Ban Ki-moon, shown here at the UN headquarters, today urged companies to coordinate their market efforts with UN’s developing goals. Photograph: Brendan Mcdermid/Reuters

In collaboration with some 1,000 business allies, the UN today issued an updated “architecture” aimed at intensifying companies’ role in advancing economic development, improving human health and reversing environmental degradation.

At the UN Global Compact Leaders Summit in New York City, Secretary General Ban Ki-moon emphasized the growing need for private companies to coordinate their market efforts with UN’s long-standing development goals.

The business engagement architecture is designed to “drive and scale up corporate actions to directly advance United Nations goals,” Ban said.

The blueprint, Building the Post-2015 Business Engagement Architecture, marks a high point in the UN’s ambitions to engage with business. When it was launched in 2000, Ban said, “there was no clear agenda for business”.

Today, the GC is the world’s largest voluntary organization of its kind, comprising 8,000 companies and 4,000 civil society organizations from 145 countries.

“For the first time in the history of United Nations, UN goals, sustainability development priorities, are directly linked to long term corporate goals,” said Georg Kell, executive director of the Global Compact. “This is a genuine innovation and brings a strategic level of collaboration to the effort. We offer, for the first time, a comprehensive and integrated menu of opportunities for engagement.”

The architecture that the UN released today, in collaboration with the World Business Council for Sustainable Development and the Global Reporting Initiative, formalizes three broad new programmes focused on education, agriculture and peace.

The new Business for Peace platform, for instance, aims to help companies invest in conflict-affected and high-risk areas. Long-term job creation, economic growth and infrastructure restoration are vital to nurturing peace in often-fragile conditions of post-conflict regions, said Sir Mark Moody-Stuart, vice chair of the UN Global Compact board.

These three new programmes join an existing pool of efforts focused on women’s empowerment, children’s rights, climate, water and anti-corruption.

Re-firing commitment

The new plan – 13 years after the GC’s founding – comes as the clock runs down toward the 2015 deadline to achieve the Millennium Goals.

Enthusiasm seems to be ebbing. A CEO survey released by Accenture during the conference found that most companies aren’t integrating social, environmental and governance issues into their core strategies. (Download a copy of the report here or get more information from Accenture here.)

The poll of more than 1,000 global executives found that 45% of CEOs believe that sustainability will be “very important” to the future success of their business, a decline of nine percentage points from a similar study in 2010.

As GSB’s Jo Confino pointed out in his assessment of this study, these findings bookend a pair of two earlier studies (from the UNGC and CDP, formerly the Carbon Disclosure Project), that find progress slowing – or even backsliding – in corporate efforts.

US players missing

North American companies, which make up roughly a third of Fortune’s list of the 500 largest global companies, comprise only 18% of Accenture’s respondents.

With their high visibility and deep resources, more US players would help. Yet US companies have been somewhat hamstrung by concerns over legal liability if they commit to the compact’s 10 principles.

The UNGC is working to help legal counsels separate and neutralize these perceived risks from conventional contractual liabilities and open the door for more US entrants, Kell told me in a Q&A following the launch.

“We want to grow from 8,000 to 20,000 hopefully by 2016, but we can grow only with quality,” said Kell, who last year took steps to prod and shed inactive GC members.

Finding the right balance – and meeting the goals – is critical, said John Ruggie, Berthold Beitz Professor in Human Rights and International Affairs at Harvard Kennedy School, during the launch:

Look around you and you will already see signs of some of the consequences. They take the form of resource nationalism, increased protectionism, sectarian violence, extreme populism on the left and right, xenophobia, homophobia and generally rolling back globalization out of fear of the other and by anger at fear of being left behind. That would not auger well for people planet or profits…. The stakes are high, the time is short, the cost of getting it wrong is incalculable and the opportunities to getting it right are legion.

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See the original article here:
http://www.theguardian.com/sustainable-business/un-global-compact-architecture

The Guardian

Responsible investment has a vital role in securing peace post-conflict | The Guardian

A new UN initiative aims to help spur recovery in post-conflict regions by guiding companies to invest responsibly

A Syrian family at a camp on the Turkish border. Even when wars are over, they often leave a pool of underemployed youth and a time-bomb of social unrest. Photograph: Bulent Kilic/AFP/Getty Images

War and peace are linked inextricably by economic development. Often, even when the shooting stops, long-term peace is impossible without economic development. Yet investment will not flow where conflict lingers.

This grim Catch-22 has resurfaced lately with the unfolding catastrophe in Syria. Day by day, the death toll, physical destruction, and refugee displacements mount. The disaster is creating countless long term, chronic woes too. The destruction of 3,600 schools, for instance, in Syria has swelled by two million or so the global tally of young people forced out of school by armed conflict to some 50 million overall.

In Syria and elsewhere this creates a pool of underemployed youth, and a potential time bomb of social unrest.

Once conflict ends, if there are no jobs for young people, rebels and soldiers, “The guns will come back out… In the absence of economic development, peace is difficult to achieve, and harder to maintain,” Sir Mark Moody-Stuart told me. From his tenure as Chairman of Royal Dutch/Shell Group, Moody-Stuart is familiar with the challenges, and opportunities, facing investment in conflict-afflicted regions.

Data on the economic toll of the loss of peace is difficult to come by, but an analysis by the Institute for Economics and Peace (IEP), estimated that had the world been completely peaceful in 2011, global GDP would have been roughly $9tn higher — almost equal to the German and Japanese economies combined.

These days, as vice-chair of the board of the UN Global Compact, Moody-Stuart is working to get the private sector to reconsider these opportunities. “Not so very long ago, divestment from troubled areas was the goal,” he said.

Today, however, former critics are increasingly willing to “sit down with investors and senior management to engage constructively and work together on strategies that both develop business and contribute to peace and development,” he said.

I met with Moody-Stuart in New York at a midtown hotel where he was unveiling a new UN effort to help guide private-sector investment into regions where they can help peace was taking root. The platform, Business for Peace (B4P), will be formally launched today by the UN secretary-general at the UN Global Compact Leaders Summit. B4P builds on a decade’s worth of earlier efforts that are documented in areport, Responsible Business Advancing Peace, also released today.

The cases documented therein — and discussed at today’s meeting — are a reminder that the path peace via development is a highly local challenge, where solutions vary by context.

Peaceful cheese, fewer guns

Cheese is the focus of a long-running effort in the Caucasus. Starting a decade ago, cheese makers from regions spanning Armenia, Azerbaijan, Georgia and Turkey came together under a single brand that has developed strong export sales.

The shared interests prevented the alliance from collapsing during the Russia-Georgia war of 2008. “It was one only regional alliances to survive,” said Diana Klein, conflict advisor at International Alert. Peace and development have their own momentum, she added, “If it’s working, it’s much harder for a single participant to act out.”

Some efforts can run counter to conventional wisdom. In the Philippines’ a subsidiary of Swiss cement giant Holcim set up a plant north of Manila where communist rebel group was active.

In 2005, the group attacked the facility, taking weapons from guards and causing $120,000 of damage. Rather than boost its guards’ firepower, Holcim took a slower, more complex path, meeting with community members to learn more why its plant — a large local employer — was targeted.

Their surprising findings? The guards’ firearms were part of the target. Rather than meet threat with force, Holcim opted for un-armed guards, a change which required careful community education.

“They had to convince their own staff they were safe, to convince the community that the guards are truly not armed,” said Sir Moody-Stuart, otherwise the guerillas may come back. Since this “social fencing” approach began, not a single incident involving firearms has happened.

A marathon effort

Building companies and attracting investors in the wake of conflict is a “very, very hard challenge,” said Klein of Conflict Advisors. “It requires a marathon mentality.” These investment efforts are reaching into some of the most challenging conflicts in recent memory.

In Sudan, still recovering from genocide in Darfur and the subsequent bifurcation of the nation, a team of B4P-affiliated investors with stakes in Sudanese oil services companies find their most difficult issue — company affiliation with human rights violations — impossible to resolve.

But while some strata of the market remain opaque, others are opening. Bit-by-bit the economy is coming back to life. Telecoms provider Sudatel, partially government owned, has emerged as the young country’s first multinational, operating in five neighboring countries. With 60% of Sudan’s population under 20 years of age, the company is focusing on serving young consumers. “To live together, people need to communicate,” said Ehab Osman, Sudatel’s CEO.

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See the original article here: 
http://www.theguardian.com/sustainable-business/responsible-investment-role-peace-post-conflict

The Guardian

Can new supply chain approaches prevent another Rana Plaza? | The Guardian

Tougher factory and supply chain standards won’t be enough to prevent disasters like the Bangladesh factory collapse. Can development tactics succeed where conventional approaches have failed?

Foxconn factory workers in China's Guangdong province

Foxconn workers in a Chinese factory. Can new industry tactics prevent supply chain disasters? Photograph: Bobby Yip/Reuters

Ideally, tragedy begets reform.

That’s the tale we’ve learned from past industrial disasters, including the 1911 inferno at the Triangle Shirtwaist Co. in Manhattan, which killed 146 and marked the dawn of a fundamental shift in US workplace standards.

The changes took decades, to be sure, but the tragedy spurred the development of fire and building regulations, the creation of labor and women’s unions and a culture of real regulatory enforcement.

What, then, do we to make of reactions to the collapse of the Rana Plaza factory six months ago?

The deaths of some 1,130 garment workers in the Dhaka, Bangladesh, sweatshops drew a storm of public outcry. But in supply-chain circles, the tragedy has revealed more about the limits of our potential to “fix” global supply chains that, in some cases, have grown too big and too complex to avoid human-rights failures.

Facing this reality, a new generation of supply-chain experiments are borrowing tactics from conventional development efforts. These look beyond conventional rules- and business-transaction based approaches to address the root causes of many factory malpractices. In general, they’re working to improve education, health and community conditions in ways that benefit both workers and their employers.

Initial Rana reaction

When Rana Plaza collapsed, the response – among top-tier corporate brands – was rapid. Within a month, a cadre of mostly European fashionchains, including H&M, Zara, C&A, Tesco and Primark, signed a legally binding agreement to help fund and enforce safety improvements in Bangladeshi factories.

US and Canadian retailers took a different path.

Under the umbrella of the National Retail Federation (NRF), key brands backed an alternate agreement reaffirming ongoing efforts to take a ground-up approach, training workers, factory owners, officials and foreign brands in parallel.

The split response led to an unseemly tit-for-tat round of criticism.

The heads of IndustriALL, a global union supporting the European effort, called the rival plan a “pale imitation.” The NRF effort also drew criticism for not requiring its suppliers to allow workers to organize.

The head of the NRF volleyed back, in The Wall Street Journal: “The IndustriALL plan seeks major funding by private business without providing accountability for how funds are spent, as well as binding retailers to specific resourcing requirements without taking into account the impracticality of such a requirement.”

Distracting as it is, the infighting reveals the spectrum of current possibilities – from the EU’s conventional approach to NRF’s ground-up agenda – and many of the limits that circumscribe supply chain efforts circa 2013.

Limits of good intentions

However earnest, corporate efforts to improve supply chain operations have not kept pace with the compounding complexity of globalized supply chains. Links have grown too numerous; buyers’ influence dissipates too rapidly.

Eric Olson, BSR’s senior vice president, walked me through the vexing math facing would-be supply-chain trackers. A typical Fortune 500 company will have hundreds or thousands of first-tier suppliers. But supply chains can easily extend to 15 layers or more.

“There’s almost no company on the planet that has figured out how to cascade their supply chain efforts into the second tier,” Olson said, “let alone the third, fourth and so on, even though 80% of the impacts are happening further out in the chain.”

Meanwhile, a recent survey of some 1,700 UN Global Compact corporate members highlights another limitation. While most companies set goals for their suppliers, only 18% actually help their suppliers set and review goals their own goals – and only 9% take steps to verify the efforts, according to Global Corporate Sustainability Report 2013.

“While companies are making progress in terms of thinking about supplier sustainability and setting expectations, the supporting actions that will drive adherence have shown little or no increase over the past few years,” according to the report.

Wider scope, deeper reach

If conventional supply chain practices are running up against inherent limits, what next?

In some of the world’s least-developed markets, a new generation of more holistic experiments is showing promise.

These experiments stem from the recognition that mandating standards to a factory manager often ignores developing-world realities, such as poorly educated workers, degraded public health, economic insecurity and antagonistic worker-manager dynamics.

If these factors can be improved, the potential to advance more ethical, productive factory ecosystems would rise overall.

As an example, Olson points to HERProject. The program, acollaboration between BSR and 22 multinational companies, is delivering curricula focused on health and financial topics to some 200,000 women workers in 200 factories and farms in Asia and Africa.

Early findings show that when offered to women through their workplaces, the factories benefit via reduced absenteeism and turnover. Greater work-place trust, in turn, is helping managers collaborate with workers on setting conditions. A Levi Strauss & Co. supplier in Egypt reported a four-fold return from the program

There’s no denying this approach is more difficult. Yet it’s clear that, if supply networks continue to stretch and globalize, conventional supply-chain tactics are ill-suited to less developed markets.

If high street brands can cultivate common cause with development goals, a smarter approach to supply chain management will be a welcome byproduct.

~

The Guardian

Profiting from sustainability: 5 tips for corporate boards | The Guardian

Whether you call them directors, supervisors or governors, companies’ top overseers must get involved in sustainability. Here’s how

Of all the challenges facing corporate sustainability leaders, a lack of board-level support can be one of the most frustrating. While a chief executive’s top priority is day-to-day operations, directors’ main job is to think big, look out for long-term material risks to shareholder interest and advise on strategic opportunities. By these standards, sustainability should be a natural fit for most directors.

In practice, though, boards have engaged less with sustainability than many CEOs or shareholders would like. A study by EY (formerly Ernst & Young) that looked at all shareholder proxy initiatives found that the largest share, 45%, dealt with environment and social issues – and, in the past five years, shareholders voted to support these initiatives at steadily higher rates.

“Investors see sustainability questions as highly material to company strategy,” says Aron Cramer, CEO of BSR. “Whether it’s the decision to enter frontier markets like Myanmar or how best to operate in a climate-constrained world, these factors materially effect whether a business thrives or not. These are exactly the kind of things boards should be thinking about.”

Sustainability-minded CEOs are looking for some help from their boards, too. A 2010 poll of CEOs conducted by the UN Global Compact concluded that 93% of chief executives wanted their board members to discuss and act on environmental, social and governance issues. Yet that same year, only 75% of CEO respondents reported that their company directors took an active role in “considering and acting on sustainability”.

If both investors and CEOs are pushing for boards to get smarter about sustainability, it’s curious that progress has been so slow. The culprits, Cramer says, are corporate convention and a lack of education. Directors are typically drawn from financial, legal and management backgrounds; thus very few have formal sustainability training.

The UN Global Compact – the world’s largest corporate citizenship and sustainability initiative – hopes to tackle this sustainability-IQ deficit with its LEAD Board Programme, which it’s getting ready to trial this fall. So far, five companies have agreed to trial the [program, which will consist of two half-day sessions delivered by an expert mediator: power and gas utility Enel and petroleum producer Eni (both of Italy); power and gas utility Eskom (of South Africa); chemicals maker Yara (of Norway); and cellular company SK Telekom (of South Korea).

Five best practices for boards

The UNGC has been developing the program since January of 2011, consulting with Cramer and a dozen or so other global sustainability leaders. Some of the top practices the program will emphasize include:

* Define the business case for sustainability. Boards should help define how and why sustainability can benefit shareholder interest by boosting sales, cutting costs and/or enhancing profits. Once directors map out the issues that are most material to the company, they can single out top priorities, which in turn can help the chief executive lead the mission – and get buy-in from employees and business partners.

* Establish or approve targets. Just as they do for sales, market share growth, and other key indicators, boards should help establish or approve sustainability targets – both in the short- and long-term – for their companies’ sustainability performance and include them in the business strategy. A wide range of metrics is available, from mature standards such as the Dow Jones Sustainability Index to more industry-specific measures, or early-stage metrics can be developed in house.

* Set clear standards for performance and recruitment. Boards should align annual performance reviews of incumbent executives with criteria that make sustainability a priority, just as they do with stock price, sales growth and other conventional performance indicators. When hunting for a new executive, boards should include sustainability in the search criteria. Candidates should be able to demonstrate clear understanding of – and a commitment to – their industry’s best sustainability practices.

* Link remuneration to long-term goals. Executive bonuses have long been linked to short-term financial targets. Given that sustainability stabilizes growth over the long term, but must be implemented in the near term, it follows that CEOs should be rewarded along both timelines. For example, progress toward long-term interests can be rewarded by linking part of pay to stocks, bonds or reserve payments released a decade or so in the future. For near-term rewards, boards can link a share of CEO’s regular cash compensation to the achievement of year-to-year sustainability objectives.

* Take responsibility for implementation and communication. Communicating sustainability achievements to shareholders is also vital, whether in a separate sustainability report or integrated into the financial reporting. Directors should also formally sign off on the company’s sustainability report. Although this is not legally necessary in most jurisdictions, director signatures send a high-profile confirmation to stakeholders that sustainability and transparency are company priorities.

Required reading

If all goes according to plan, the curriculum will be tweaked according to feedback from the pilot companies and then rolled out to all comers in 2014.

In time, these voluntary lessons may become required reading in some markets, Cramer notes. South Africa was the first country to mandate an integrated reporting standard, including sustainability metrics, for listed companies. Trading exchanges in Hong Kong, Shanghai and Sao Paolo are moving in a similar direction, he says.

As the sustainability reporting standards spread, more corporate directors will want to get up to speed, before they’re obliged to do so.

To learn more about the nuts and bolts of the curriculum, start here: LEAD Board Programme. Deeper details aren’t yet available, but will surface in coming months.

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Check out the original article here:
http://www.theguardian.com/sustainable-business/un-global-compact-leaders-summit-leadership

The Guardian

Are bottom-up sustainability initiatives filling gap left by Rio+20? | The Guardian

Small, grassroots sustainability efforts have proliferated since Rio+20, but a status report signals some challenges and limitations

A woman carries freshly formed earthen lamps for drying outside her home in Mumbai, India.

In the absence of a meaningful global agreement at the Rio+20 Earth summit last summer, expectations collapsed – but didn’t disappear. They shifted from big to small, from global to local.

In response, sustainability leaders recalibrated their attention to the potential for local and regional initiatives to fill this leadership vacuum. After all, while climate change remains an immutably global problem, many of the most immediate environmental and developmental challenges – toxic pollution, education and public health and water and land degradation, to name a few – must be dealt with at a local or regional level.

A year or so on, the question remains: is this bottom-up, smaller-scale approach working? With more than 1,000 sustainability leaders from businesses, NGOs and their allies set to converge in New York next month for a leaders’ summit of the UN’s Global Compact – the world’s largest corporate sustainability membership organisation – it’s a good time to take stock.

It’s premature to come to any sweeping conclusions, to be sure. Too little time has passed to expect even the best executed of the blizzard of plans to have achieved major gains. Yet a recent special report, surveying the portfolio of UN bottoms-up initiatives, makes for decidedly mixed reading.

Grand scale

On one hand, the tally of efforts – totalling 1,382 – offers impressive quantitative evidence of a wide and deep groundswell of initiatives across the globe. On the other hand, the survey shows a worrying fuzziness and lack of progress in key areas.

Though still faint, these signals beg critical questions. Is it possible to distribute a clear sense of direction across thousands of initiatives? Has progress been stymied by the lack an over-arching development goal?

For a sense of the scope and scale of the proliferation of initiatives following Rio+20, flip through the July 2013 special report, Sustainable Development in Action, prepared by the United Nations’ sustainable development division. Synthesizing listings across a handful of databases, the report surveys the accretion of voluntary initiatives that support the goals of Rio+20.

The sheer scale of efforts is encouraging. Out of the 1,382 efforts, more than 700 commitments were announced as part of Rio+20. UN programmes have seeded hundreds more in recent years, including Sustainable Energy for All, United Nations Global Compact, Every Woman Every Child and others.

A closer look

Read a bit more closely, though, and fractures appear. Take, for example, one of the eight high-priority areas examined by the special report, higher education sustainability initiatives (HESI), While 272 organisations in 47 countries had made commitments related to higher-education sustainability as of June, a lack of centralised coordination is impeding progress (emphasis added):

Since HESI was established as an ad hoc initiative by several UN organizations and external stakeholders, this action network relies on a more informal organizational structure, typical of a network of stakeholders rather than a top-bottom organization. Therefore, although the organizational capacity to implement the network goals is rather limited and thus a bit challenging, it can also be seen as strength. (p. 20)

Improved energy efficiency and renewables are widely supported. Yet under the “Sustainable energy for all” category, the special report finds that scaling remains a barrier:

Ensuring adequate support to facilitate action across the many partner countries and thematically driven high impact opportunities, while at the same time collaborating with thousands of stakeholders over the course of the next 17 years, remain a key challenge for the initiative. Without proper follow-up and engagement, many commitment makers may not be fully engaged, which means that they would be left with little direction on how to contribute to the initiative in a tangible way. (p. 26)

To be fair, the problems highlighted in the special report extend far beyond the business-focused mandate of the Global Compact. However, the fuzzy goals and lack of guidance that UN programs face mirror some of the obstacles dogging private sustainability efforts as well.

The sheer number of different sustainability initiatives is a rising source of confusion for individuals, companies, consortia and even entire sectors. Even the most pro-sustainability business leaders can find themselves overwhelmed by well-intentioned, often overlapping agendas, collaborations and standards. The Global Initiative for Sustainability Ratings has uncovered more than 1,500 sustainability indicators spanning almost 600 issues.

And small, uncoordinated efforts come with added costs and missed opportunities. In a recent conversation with GSB’s Jo Confino, Mars Inc. CSO Barry Parkin estimated that 125 cocoa sustainability programs exist, each with high startup costs and affecting hundreds – at most, thousands – of farmers. “If we were to align behind programmes, it would be much more efficient,” he said, “and we could really scale up our impacts.”

Signs of success

That said, there are certainly some promising signs, too. Cities of varying sizes, with varying resources, are proving that a common set of interests, abilities and incentives can yield real gains.

Some 4,700 projects have been registered with C40 Cities, which links the mitigation efforts of scores of megacities together with many smaller innovative burgs. The group is on track to cut more than 1bn tonnes of emissions by 2030. In another city-focused program, the carbonn Climate Cities Registry, 302 cities from 42 countries, together responsible for some 1.5 gigatonnes of carbon-dioxide annually, have filed more than 3,600 commitments, inventories or mitigation plans.

What’s behind these metro-successful stories? Municipal climate efforts can yield self-sustaining benefits, such as boosting energy savings, health and the economy, according to a 2013 survey of 110 cities conducted by the Carbon Disclosure Project (CDP), C40 and the sustainability-engineering firm AECOM.

The gains are especially encouraging given that cities are the battleground for a growing share of the climate challenge. Urban centres account for a bit more than half of the world’s population today, but generate 75% of the globe’s greenhouse-gas emissions – and they’re expected to grow to contain 70% of the population by 2050.

What’s next?

Whether they take the form of rules requiring big buildings to track and publicize their resource use or water-savings standards on plumbing fixtures, successful city-scale efforts share some attributes: they benefit stakeholders, they’re clearly defined – with timelines – and are pushed from the top down.

When sustainability leaders meet in New York next month, they should realize they have a rare opportunity to give helpful structure and greater urgency to business’s role in the post-2015 world. Without clearer marching orders and deeper institutional support, though, the risk is that the post Rio+20 bottom-up approach will simply bottom out.

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Check out the original story here:
http://www.theguardian.com/sustainable-business/post-2015-bottom-up-approach