Last year, PwC released a report presenting seven reasons why investors care about sustainability. The first one was “sustainability shareholder resolutions gaining traction,” showing growing support by investors for environmental and social shareholder resolutions. “In 2010, a Ceres survey of 44 asset owners and 46 asset managers with collective assets totaling more than $12 trillion found nearly all respondents viewed climate change as a material concern,” PwC wrote.
Now, a new study from Ceres shows that while many investors might say they view climate change as a material concern, when it comes to voting on shareholder resolutions filed with companies on climate change business risks, they act like they don’t.
The study is an analysis of proxy votes cast in 2012 by 43 of the largest U.S. mutual fund companies. Among more than 40 large U.S. mutual fund families that were included in this study, only eight have an average support of over 50 percent for climate-related shareholder resolutions. Among these eight fund families, only three supported the vast majority (over 80 percent) of these climate-related shareholder resolutions – DWS, AllianceBernstein and Oppenheimer.
Bob Langert, McDonald’s VP of Sustainability told Bloomberg last September that “McDonald’s can be a very healthy lifestyle. I love to be healthy and I love the variety. I love that I can have a wonderful grilled chicken salad today, and a quarter pounder with cheese tomorrow…”
Langert’s diet sounds indeed balanced but apparently it is not very common among McDonald’s customers, at least not the salads part of it. McDonald’s CEO Don Thompson said last week that salads make up two to three percent of U.S. restaurant sales. In other words, McDonald’s customers might be into a grilled chicken but not so much into a grilled chicken salad.
The company seems to believe that this trend will continue. “I don’t see salads as being a major growth driver in the near future,” Thompson said according to Bloomberg, adding that “instead of advertising salads, the company may push hamburgers and chicken sandwiches.”
Does it mean that McDonald’s is losing hope in selling more fruit and vegetables? Not at all! Thomson explained that “there are other ways to sell more fruits and vegetables. For example, some of the chain’s new McWraps have tomato and cucumber slices, as well as shredded lettuce.”
Coworking spaces are on the rise. According to the latest Global Coworking Census, Deskwanted, released in March, more than 110,000 people currently work in one of the nearly 2,500 coworking spaces available worldwide, an increase of 83 percent and 117 percent respectively from last year. In the U.S. alone, there are now nearly 800 commercial co-working facilities, up from about 300 only two years ago.
Many of these places, explains author Anne Kreamer, became attractive to the growing numbers of entrepreneurs and freelancers by offering collaborative networks, built-in resources, and a dynamic ecosystem, fostering innovation and making starting a business simpler. These key features seem to be describing Green Spaces, one of New York City’s 20-plus coworking spaces that celebrated its fifth anniversary last week.
Green Spaces, which also has another location in Denver, Colorado, has a vision of becoming a catalyst for “values-driven communities of people who innovate, celebrate and do good.” This vision not only made Green Spaces a place where social entrepreneurs feel at home, but also transformed it into an important hub for the green business community in New York. To learn more about the journey Green Spaces went through in the last five years, I spoke with its co-founder and director, Marissa Feinberg.
Last week, my mother called me, sounding worried. She had just read an article in Israel’s largest newspaper saying that Airbnb was declared illegal in New York, following the decision of a New York judge that Nigel Warren, who rented out part of his home on Airbnb, violated the illegal hotel law and should pay $2,400 as a fine.
My mom’s main concern wasn’t so much the future prospects of Airbnb, but rather if this development jeopardized the reservation my parents made on Airbnb for their upcoming visit to the city. I told her there’s no reason for concern and if anyone should be worrying, it is Airbnb, not her, as this ruling raises questions on the ability of the company to sustain its current successful business model.
And it’s not just Airbnb. Both the state and city of New York have been challenging, in the past year or so, a number of sharing economy companies and their disruptive models, including Uber, SideCar and RelayRides. So what’s going on here – is New York becoming unfriendly territory for sharing economy innovations? And even more importantly, how will these legal battles impact the sharing economy and its efforts to go mainstream?
A year ago I wrote about the main reasons Apple fails time and again when it comes to CSR. One of the problems mentioned was that Apple doesn’t have strong CSR leadership. Well, I guess now we can take this point off the list, at least partially.
Apple CEO Tim Cook announced on Tuesday that Former U.S. EPA chief Lisa Jackson has been hired as VP of environmental initiatives. Cook made the announcement at the annual D: All Things D conference. According to the Washington Post, he said Jackson will be reporting directly to him and is “going to be coordinating a lot of this activity across the company.”
Jackson seems to be very excited about her new job. She wrote in an e-mail: “I’m incredibly impressed with Apple’s commitment to the environment and I’m thrilled to be joining the team.”
This is certainly a surprising move on both sides – Apple, so far, had mostly a reactive strategy when it came to its environmental and social impacts and doesn’t report to the CDP or release a comprehensive sustainability report like most other large corporations do. Jackson’s step is also uncommon among former EPA administrators, who usually don’t change their boss from the President of the United States to a CEO of a company, even if it’s called Apple.
So what does this all mean? Does Apple want become more sustainable? Will it become so with the addition of Jackson to its team? Or this is merely a PR move? Let’s try to look into these questions one by one:
In 1998, I heard about Shai Agassi for the first time. My roommate back then was working for TopTier Software, an Israeli company Agassi founded, and he told me a number of times about Agassi and what a smart entrepreneur he is.
Fifteen years later, I still believe my roommate was right about Agassi, even after Better Place, the company he founded in 2007 and was considered to have “the potential to eliminate the gasoline engine altogether,” filed a motion in an Israeli court earlier this week to close the company.
“This is a very sad day for all of us. We stand by the original vision as formulated by Shai Agassi of creating a green alternative that would lessen our dependence on highly polluting transportation technologies,” the company’s board said in a statement. “Unfortunately, the path to realizing that vision was difficult, complex and littered with obstacles, not all of which we were able to overcome.”
This is a very sad moment for anyone who believed in Agassi’s vision and in Better Place’s ability to disrupt the car market with electric vehicles and a network of battery swapping stations. Still, this is also an opportunity to learn some valuable lessons that might help other green innovators struggling with similar challenges. We looked at the failure of Better Place from a new product development perspective, and identified four key lessons.
There are already some lessons in corporate responsibility we can learn from the tragedy of the building collapse in Bangladesh. One of them, as Vikas Bajaj wrote in the New York Times, is that most brands and retailers offer consumers very little information about how their products are made, and hence conscious consumers have no choice but to educate themselves.
The example of H&M shows that no matter what type of CSR a company is pursuing, whether it’s ethical, altruistic or strategic, there are inherent flaws in the current corporate responsibility system that we need to address if we want to see real changes in the business landscape.
First, let’s talk about the hope we had to make significant progress by having large corporations like H&M commit to sustainability. The notion was that it would be faster to achieve change by convincing a large corporation to do the right thing rather than convincing dozens of governments where these corporations operate to do it.
Earlier this month Ernst & Young and GreenBiz Group released a new study, entitled ‘2013 Six Growing Trends in Corporate Sustainability.’ Based primarily on a survey of the GreenBiz Intelligence Panel of executives and thought leaders engaged in sustainability, this study reveals that “companies are increasingly connecting the dots between risk management and sustainability by making sustainability issues more prominent on corporate agendas.”
While the study shows that in general, companies are moving forward when it comes to sustainability, it seems they are still making progress incrementally rather than taking the fast lane. Nevertheless, it is still interesting to learn about the current trends in sustainable business and this report presents six of them that are shifting now the business landscape. Here they are:
On Tuesday, Apple’s CEO Tim Cook came to Washington to testify in front of a Senate panel examining how Apple used “loopholes” to avoid paying billions of dollars in U.S. taxes.
Apple is not the first or the only company to use these tax strategies to minimize its tax payments, but just like with the Foxconn episode, the company found out once again that being very successful and profitable also has its price in terms of higher accountability demands.
The reports on Apple’s tax avoidance and Cook’s testimony once again brought up the question of tax fairness and what it means nowadays when we expect companies to be responsible for the impacts of their decisions and activities on society.
To further explore this issue from a CSR perspective, we tried to answer some key questions that hopefully shed some light not just on Apple’s behavior, but also on the practice of taking advantage of tax loopholes in general.
What makes you excited? Is it Google Glass? A new iPhone app? The latest Star Trek movie sequel? Or maybe just David Beckham in general? While it would be hard to guess what specifically makes you excited, it’s probably not a sustainable product, brand or culture phenomenon.
In their ongoing quest to scale up sustainable consumption and make it the norm rather than the exception, companies have managed to identify multiple obstacles – from cost and availability to lack of consumer awareness. These are all important parts of the big picture, but today I’d like to focus on one factor which I believe can be a real game changer in sustainable consumption – the excitement factor.
Excitement can overcome almost any known obstacle, helping turn unlikely products, brands, or even presidential candidates and political movements into stellar success stories. But, excitement alone will only get companies so far. To make sustainable consumption work, they also need the other staple ingredients in the sustainability sauce, aka materiality (make it relevant) and storytelling (make it aspiring).
Still, excitement, I believe, is the secret sauce ingredient and can make the difference between small incremental progress in sustainable consumption and becoming the norm. But how can companies do it exactly? How can they get consumers excited over sustainability? While the keys to excitement may vary from one brand to the next, we have identified four points that can help make sustainable consumption exciting:
If anything, it was probably related to the upcoming vote on whether to split the roles of Chairman and Chief Executive at JPMorgan Chase, California’s lawsuit against JPMorgan, “accusing the company of falsely signing documents to unlawfully collect credit card debt from thousands of customers,” or follow-ups on JPMorgan’s “London Whale” fiasco.
Given these and other stories, I was a little suspicious when I opened JPMorgan’s CSR report. I wasn’t sure if I could be persuaded that JPMorgan is a responsible company or working hard to become one, so I decided to set up three criteria to make my final decision on the report as objective as possible: 1. Materiality of the achievements described, 2. Transparency and ability to acknowledge failures, 3. Involvement of external stakeholders in the report.
1. Materiality of the achievements described – The report, just like any other CSR report presents many of the company’s achievements in 2012, from increasing its lending to small businesses by 18 percent over 2011 to providing $6 billion to low- and moderate-income individuals or communities to growing the amount of capital committed to impact investments to nearly $50 million. But how material these achievements are?
Earlier this week, H&M joined other retailers in signing a landmark Bangladesh factory safety plan. The five-year plan, according to USA Today, “requires independent inspections with public reports and signers to pay for mandatory safety upgrades. It also requires companies to cut off business with any factory that refuses to make necessary upgrades, and it gives workers and their unions a role in the process.”
After H&M’s announcement, the Dutch retailer C&A also joined the agreement, as did the British retailers Primark, Marks & Spencer and Tesco, Italian fashion brand Benetton, Spanish retailer Mango, French retailer Carrefour, Canadian grocer Loblaw, Spanish department store chain El Corte Inglés, the Spanish fashion group Inditex (the parent company of Zara).
These companies have joined two others that signed the agreement last year: PVH, the American apparel company which makes clothes under the Calvin Klein, Tommy Hilfiger and Izod labels, and German retailer Tchibo.
If you look at the list of the companies that signed the agreement so far you can’t help but notice that out of the 12 companies mentioned, only one is American, and it doesn’t include even one major American retailer or fast fashion company.
So what could be the reason that major European companies sign this agreement while American companies like Gap, Walmart, Sears, J.C. Penney and Target refuse to do so? Are European fashion companies and retailers simply more responsible than their American counterparts or is there something else here that can explain this phenomenon?
We live in a transitional time. The latest evidence was the news last Thursday that Earth’s CO2 level passed 400 ppm for the first time in human history. While we’re not sure exactly where we’re heading, one thing is quite clear – we need better frameworks to be able to adapt to these changes.
The latest attempt to offer one was at the Bloomberg New Energy Finance (BNEF) summit in New York last month where BNEF introduced the concept of New Energy ROI: Resilience, Optionality and Intelligence. The idea is not to replace the traditional ROI (return on investment), explains BNEF’s CEO Michael Liebreich, but to create a checklist to see whether your strategy stands up to the realities of the world. “If your strategies are not new ROI, they probably won’t deliver old ROI,” he added.
This framework tries to provide an answer to what Liebreich describes as the reality of the world’s energy transition, “It is dynamic, complex, unpredictable and fraught with risk.” If you think about it, this description, as well as BNEF’s new framework, can be a good fit for many other fields. After all, is there any industry where taking into consideration the interconnectedness and interdependence of systems, enhancing resilience, looking for smarter diversification and collecting, analyzing and harnessing data better doesn’t make sense?
Let’s say you have two options to choose from: A T-shirt that has been made using questionable labor practices for $9.90 or a T-shirt in the same quality that has been made ethically for $10.00. What would you choose?
This question might be less theoretical than you think – Bryce Covert reported earlier this week on ThinkProgress that according to an estimate provided by the Worker Rights Consortium, the average consumer would need to pay as little as 10 cents per article of clothing if all of the costs of upgrading Bangladesh factories were passed on to the consumers. In other words, all we need to do to prevent the next tragedy in Bangladesh is to pay extra 10 cents per clothing item. But are we really willing to do it?
I guess the vast majority of you would say yes. After all, we’re only talking here about 10 cents an item so even if you’re a fast fashion junkie it would probably wouldn’t cost you more than 2-3 dollars a month to do the right thing. Nevertheless, if we digg in a little bit deeper we’ll find out that while we might say ‘yes’, the answer would probably be ‘no’, especially when it comes to fast fashion items.
On January 21, 2008, Carlos Ghosn, President and CEO of Renault-Nissan, Shai Agassi, founder and CEO of Better Place and Shimon Peres, the President of Israel sat together during a ceremonial event for Better Place, where the company announced plans to build its first pilot electric battery rechargeable grid system in Israel and its partnership with Renault-Nissan that will supply the project’s electric vehicles.
Following the event, Agassi wrote in his blog, “January 21st changes the balance in this industry – if we are right about the business model of PBP, and given the cars will be insanely great (as Renault promised us), there is a possibility of market tipping first in the test markets but very rapidly in the entire car industry worldwide.”
More than five years later, it seems like Agassi, who was forced out of Better Place last October got it wrong. Not only that the company has managed to sell only about 2,000 cars in Denmark and Israel so far, but also Ghosn, one of Better Place’s most enthusiastic supporters, doesn’t seem to believe anymore that the company’s model is viable.