The Nature Conservancy and Harley-Davidson are now partnering with a commitment to plant 50 million trees worldwide by 2025. Yes, I gave this one a double-take, too. The pairing sounds about as natural as Rand Paul writing for Scientific American, so I dug in to find a little more information on this one. Yesterday I had an interview with Geof Rochester, Managing Director of The Nature Conservancy, to learn more about this unusual team.
It turns out the partnership is not as odd as one may have thought. Harley-Davidson has embraced sustainability in recent years, risked committing heresy by launching an electric motorcycle this summer and has indicated it takes climate change seriously. Tree planting is just another cog in the company’s plan to engage its loyal fans and raise awareness about environmental issues many consumers care about—but just do not know how to go about confronting them.
What do Dollar General and the U.K.’s Pets at Home have in common? They are among the 27 companies that have been through the KKR Green Portfolio Program. Launched back in 2008 in a partnership with the Environmental Defense Fund, KKR designed the program to optimize financial and environmental performance within its portfolio. With revenues close to $3.4 billion, the 38 year old private equity firm has been not only a pioneer in the leveraged buyout industry, but in transforming companies into leaner and more sustainable operations to make them attractive to future buyers. KKR recently announced the program’s most recent results for 2013.
Considering the gut reaction many of us have to the words “private equity,” one big question comes up: why would a firm such as KKR take on such a task in the first place? Most of us do not plunk CSR or ESG (environmental, social and governance, the term our friends across the Atlantic prefer), in the same thought or sentence when describing these types of companies. So to find out, I had an interview with KKR’s Vice President for ESG Strategy & Communications Ali Hartman.
The discussion over whether we should eat meat foments all kinds of passion. Obviously the moral arguments have long been there, whether the focus is on what happens on factory farms or the outrage over Whole Foods going retro and selling rabbit meat. Ethics aside, the environmental facts are hard to ignore. More land is devoted to growing feed for livestock than food for humans. The global meat industry overall is a bigger polluter than the transportation sector.
Then you have the health arguments: meat consumption in the U.S. has almost doubled during the 20th century, hence the public health concerns over obesity and heart disease. Most medical professionals would advise small portions of meat occasionally has minimal, or even a positive effect, on one’s health, provided you limit those portions to four ounces (113 grams). But in an era where fast food restaurants are ubiquitous and steakhouses pitch the 16 ounce manly-man steak, it is not always easy to avoid meat.
So, should we start to view meat as a luxury?
Adobe recently released its most recent corporate responsibility report, which is chock full of data on where the $4.1 billion Silicon Valley software giant made headway on environmental, diversity and governance issues. The recent overall focus for Adobe, however, is on how the company believes it can make an impact on society, especially youth. Other companies in the information technology space, including SAP and Microsoft, have made massive commitments in money, resources and employees to youth employment and empowerment programs.
Adobe, however, takes a slightly different approach. To learn a more about how Adobe’s corporate responsibility stands out within an industry where a lot of progress has been made, I spoke with Michelle Crozier Yates, Adobe’s director of corporate responsibility.
More companies are changing their tone towards animal rights as organizations from the Humane Society to PETA are highlighting what is going in the products you eat and fashion you wear. The Responsible Down Standard (RDS), which has raised awareness about what is happening to geese as their down is harvested for winter apparel and bedding, is one of the more recent initiatives underway. Allied Feather & Down is currently the largest RDS-certified supplier on the market, and this year it has made several industry moves. The latest is its announcement that 10 brands are now sourcing the company’s down, including The North Face and Eddie Bauer.
Why is this important? Previous responsible sourcing efforts were opaque and did little to assuage animal rights activists who questioned the “responsible down” that companies were sourcing for everything from jackets to comforters. The new RDS guidelines, which The North Face was instrumental in drafting, are a more open process. The collection of down is not exactly the most humane process — abuses from force feeding to overcrowding were a constant complaint. With much of the world’s down supply coming from Eastern Asia and China, a global standard that could apply to factory audits anywhere and allow for seamless supply chain traceability were both needed.
For an industry that is built upon gauging and managing risks, one would think the insurance industry would be more prepared to deal with climate change’s potential effects. But the most recent annual report by Ceres shows an overall lack of preparedness in confronting climate-related risks and addressing potential opportunities. Similar to last year’s report, Ceres found some leadership amongst 300-plus U.S. insurance companies it surveyed, but still finds a lack of innovation and long term planning.
The survey found that nine insurers, or three percent of the companies that responded to the survey, earned what Ceres described as a “leading” rating. Property and casualty insurers tend to have a greater understanding about how climate change could potentially affect their business; life and health insurers lag behind. And only about 10 percent of the surveyed insurance companies have publicly disclosed risk management statements that include climate change as a significant long term risk to their businesses. The larger companies pay more attention to climate change than smaller insurers, though exceptions, such as the Catlin Group, exist.
So who are some of the leaders?
The clean energy sector has been on an economic roller coaster the past several years, but despite entrenched interests, questions about efficiency and costs, renewables are on the upswing in the U.S.
That includes solar power, which is experiencing a surge in installations large and small—witness SolarCity’s success in recent years. Of course, the regulatory environment has a lot to do with how solar is spread.
So to that end, the writers at Solar Power Rocks, a clearinghouse of solar information from rebates to technology, recently ranked the U.S. states and the District of Columbia. The top 10 solar states may just surprise you—unless you live there and you have seen what is going on in your local community.
In order to gauge the winners and laggers on the solar power front, Dan Hahn and Dave Llorens, the brains behind Solar Power Rocks (SPR), looked at a bevy of factors, including each states renewable portfolio standard (RPS), the cost of electricity, rebates and credits related to solar, tax exemptions and regulations related to grid connectivity.
SolarCity is hot on Wall Street these days, judging by the fact its stock is holding steady and the company has no problem issuing bonds for its various investments. In fact, not only was the company the first in the U.S. to sell bonds backed by rooftop solar panels, it raised over US$200 million during its third debt offering on the markets in three months. Now SolarCity is turning to crowdfunding, albeit a tightly managed program, in order to raise more funds.
The system is akin to Kickstarter or Indiegogo meeting Fidelity or Vanguard. According to SolarCity, the offer to invest in Solar Bonds is relatively simple. You open an account, deposit some money and those funds in turn offer a return from the payments from residential and commercial projects SolarCity has all over the country. Unlike the growing solar crowd-funding juggernaut Mosaic, these funds are not for specific projects; rather they are akin to a mutual fund for current and future SolarCity initiatives. So should investors jump in, or is this the Amanda Palmer crowdfunding campaign of the clean energy sector?
We spend so much time here at TriplePundit talking about how companies and universities are becoming more sustainable, it is easy to forget the sustainability agenda is going on everywhere, and yes, that includes government. To that end, more prisons are making moves to become more environmentally responsible. The latest is the Northwest State Corrections Facility in Swanton, Vermont. Recently the women’s prison, which incarcerates over 200 prisoners, announced it had become compliant with the state’s 2012 solid waste and recycling law.
Considering the depressing statistic that almost one in 100 American adults is behind bars, there is plenty of work to do on this front. From deliveries to food to water consumption, these facilities, operating 24/7 just as a small town does, provide plenty of opportunities to reduce waste and save money. Washington State, for example, partners with one of its state universities to implement recycling and sustainability programs within its correctional facilities. So what exactly is going on in this corner of New England?
It was not long ago that the chief sustainability officer—or whatever title that person or committee tucked into their email signature—was often someone on the outside looking in. For many companies, appointing a CSO was done to assuage some stakeholders with corporate social responsibility projects. That officer was also charged with giving a public face to the company’s efforts related to their sustainability agenda. But recent trends show that oft-heard complaint is less and less true. We see more companies, from the logistics sector to snack manufacturers, appointing a CSO, and one who has a role with teeth to get things done. They are increasing involved in day-to-day decision making within the C-suite, and their numbers are increasing annually. Now a report from the Weinreb Group shows the role of the CSO has matured even more the past few years.
And what is the biggest shift underway? These CSOs are no longer simply internal program managers—they, in the report’s words, are “strategic lynchpins” who are integral to a company’s overall strategy, often identify new opportunities for innovation and lead impactful strategic initiatives from within and outside the company.
General Motors (GM) continues to expand its global zero-waste program, inching closer to its goal of having 125 total facilities landfill-free by 2020. Eleven new facilities are now officially zero waste, and they range from assembly plants to regional headquarters. Following its own mantra of “reduce, reuse, recycle and compost,” GM has expanded this program to 122 facilities — over half of them outside of North America.
According to GM, the conversion of these factories and offices to landfill-free status helps the automaker prevent more than 600,000 tons of carbon emissions from entering the atmosphere annually. At last count, the company estimates that 97 percent of all waste at its landfill-free plants is recycled or reused; the remainder is converted into energy within the plants.
The amount of waste GM recycles hardly is small change: The company in the past has estimated that it generates about US$1 billion in revenues from raw materials that do not end up going into cars. Three years running, GM’s zero-waste plan is a solid example of a company rolling out sustainability goals — and actually meeting them.
Last week the American Petroleum Institute (API) was sued for trademark infringement by Choose Energy, Inc. For 10 years, San Francisco-based Choose Energy has been operating an online marketplace that allows consumers to compare home and business power options from natural gas to solar. In a lawsuit filed last week in a California federal court, Choose Energy, which operates the website ChooseEnergy.com, accuses the API’s launch of ChooseEnergy.org of confusing consumers and harming the company’s goodwill, or in layman’s terms, the company’s reputation and therefore its customers’ confidence.
The suit claims API’s site has confused Choose Energy’s potential customers, especially those who contact the firm through its chat interface, call center and via social media interaction on the Choose Energy’s Twitter account. The bulk of Choose Energy’s business is from working as a broker offering various energy options in the 10 states and the District of Columbia that have deregulated energy markets. So, API’s launch, the company insists, is having an adverse impact on its business. Considering API’s past use of fake Twitter accounts and litigation over renewable energy regulations in the past, this may not be too big a surprise to observers.
Kansas is a political mess right now, and its leaders have hardly been hospitable to sustainable development, but a new biofuels project underway, close to the border with the Oklahoma panhandle, shows that new clean energy technologies do have a future. This morning the Department of Energy and the Spanish multinational Abengoa are officially kicking off the company’s first commercial-scale biorefinery in Hugoton. Once known as Kansas’s natural gas capital, this town of 4,000 may very well become known as the catalyst for next-gen biofuels, such as cellulosic ethanol, finally scaling and becoming cost-competitive with other fuels.
So why would a €7.8 billion (US$10 billion) company be bothered with this corner of the prairies? A conversation I had with Chris Standlee, Abengoa’s executive vice president of global affairs, shed some light on the future of cellulosic alcohol—which could finally play a role in diversifying our country’s energy portfolio, reduce carbon emissions and generate revenue for farmers. According to Standlee, Albengoa’s investment in the Hugoton plant reflects the company’s confidence that cellulosic alcohol is finally becoming a more cost effective option.
India’s fifth largest city, Bangalore, deserves much of the credit and attention for India’s economic transformation the past 20 years. Home to massive information technology companies including Wipro and Infosys, the Bangalore metropolitan area contributes as much as one-third of India’s IT exports. Many global companies, including SAP, have long set up shop in Bangalore. Many of the technologies that are part of the foundation of the “smart cities” movement underway worldwide have a base in Bangalore.
But as in the case of other cities throughout India, being stuck in traffic gives the feeling one is anywhere but a “smart city.” The frustration in Bangalore is nothing new. An annual report by IBM ranked Bangalore highly in its 2011 “Commuter Pain Survey.” This city of eight million was lodged between Johannesburg and New Delhi, and faring worse than other cities notorious for snarled traffic, including Buenos Aires and Los Angeles. The impacts on local quality of life are all over the map, such as when ambulances take hours to move patients only a few kilometers across town to emergency rooms. But the toll Bangalore’s traffic has on workers gives cities a lesson on why cities have got develop more robust transportation plans in a crowded world: Quartz estimates the annual cost to local IT and business process outsourcing (BPO) companies to reach as much as US$6.5 billion annually. Considering the average salary of an IT or BPO employee in India, that sum is staggering.
Enterprise risk management (ERM) has long been a growing priority of corporate executives and boards — not a surprise since political, economic and social change can occur quickly. But a study issued by the business reporting firm Workiva suggests sustainability-related risks should be part of a company’s core ERM analysis. Climate is an obvious reason, as many businesses learned after Hurricane Sandy two years ago. But other factors, from supply chain management to confronting water scarcity, are behind why the study’s authors insist businesses need to take sustainability seriously if they are to remain viable for the long term.
Sustainability is more than highlighting environmental and social risks, however. The Workiva report insists that in order for sustainability to be part and parcel of a company’s risk management plan, buy-in has got to start at the top, board- and executive-level, with a solid corporate governance structure. And before those groans start coming out of the boardroom, it’s important to remember that many reports already out there prove that a company focused on being sustainable and socially responsible is one that also enjoys an improved financial performance.
But how should sustainability-related challenges be implemented and monitored?