With a slim majority in the U.S. House of Representatives in their pockets, Republican members of Congress can make good on their promise to hold public hearings on “woke” capitalism. The apparent aim is to lay the groundwork for new federal legislation that obstructs ESG (environment, social, governance) investing. However, undercutting the party’s chances for expanding its power in the 2024 presidential election cycle is the more likely result.

<h2>'Woke' capitalism, ESG and the 2017 tax cuts</h2>

The term “woke capitalism” is widely attributed to the pundit Ross Douthat, who used it in a 2018 opinion piece published in <a href="https://www.nytimes.com/2018/02/28/opinion/corporate-america-activism.html" target="_blank">The New York Times</a>.

Douthat lead off with a discussion of the Tax Cuts and Jobs Act of 2017, the signature piece of Trump-era legislation. He noted that corporations were steering the benefits of the tax cuts to their shareholders, instead of deploying them to benefit employees.

Corporations were “making a show of paying bonuses and raising wages after the passage of the corporate-friendly Republican tax bill,” he wrote, “but actually reserving most of the tax savings for big stock buybacks, enriching shareholders rather than employees in an economy where wage growth still disappoints.”

Having argued that the corporate response to the 2017 tax cuts was largely an empty gesture, Douthat leaped to his main point. He declared that corporate action on progressive issues was similarly performative. That includes corporate pushback against Trump era policies on <a href="https://www.triplepundit.com/story/2020/corporate-climate-action/704831" target="_blank">climate change</a>, <a href="https://www.triplepundit.com/story/2018/brands-taking-stands-fedex-fills-leadership-void-intentionally-or-not/10426" target="_blank">gun control</a>, <a href="https://www.triplepundit.com/story/2017/97-top-tech-companies-line-against-trump/19896" target="_blank">immigration rights</a> and <a href="https://www.triplepundit.com/story/2022/businesses-transgender-rights-texas/739146" target="_blank">LGBTQ rights</a>, among others.

<h2>'Woke' capitalism and diversity</h2>

In Douthat’s hands, woke capitalism is simply a form of greenwashing that corporations deploy to curry favor with “the left” while distracting attention from their own failures in the area of social responsibility.

That’s one way to look at it. Another way is to acknowledge that the reality of broader demographic trends that are driving the corporate social responsibility movement.

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Writing for New York Magazine earlier this week, senior reporter Eric Levitz draws attention to an ongoing demographic shift. He notes that <a href="https://nymag.com/intelligencer/2022/12/gop-house-republicans-esg-woke-wall-street.html" target="_blank">the capitalist class in the U.S.</a> has diversified since its 19th-century beginnings as an “almost uniformly” white, male and socially conservative group.

The emergence of pension funds and mutual funds in the 20th century has further diversified the capitalist class, by providing union members, public sector employees and white-collar professionals with a stake in the action.

In short, the “woke capitalism” canard indicates that the Republican party is leveraging a matchup between its white, conservative base voters and the capitalist class.

“None of these constituencies are remotely as demographically or ideologically similar to the contemporary conservative base as the capitalist class of yore was to the right-wingers of the mid-20th century,” Levitz writes.

<h2>Reality favors the ‘woke’</h2>

Levitz also undercuts Douthat’s argument by noting that diversity in the capitalist class is just one powerful trend that is having an impact on corporate strategy. Another significant factor is urbanization, both domestically and in nations around the world.

“…consumer-facing brands do not amplify liberal cultural sentiments because they care more about virtue signaling than profit-making; they do so because young city dwellers are both culturally liberal and a major profit center,” Levitz emphasizes.

Climate change is yet another factor undermining Douthat’s position, as Levitz notes. Douthat can call climate action a form of corporate pandering if he chooses. However, the fact is that climate change is an actual risk, not an imaginary one. Corporations and pension funds respond to risks by taking action to protect themselves. The Republican party has only itself to blame for dropping the climate ball and leaving the field to Democrats.

<h2>Taking the ‘woke capitalism’ bait</h2>

The use of “woke capitalism” as a verbal battering ram against climate action and other Democratic policies has gathered much more force since 2018.

Stephan Conmy of the <a href="https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-is-woke-capitalism/" target="_blank">Corporate Governance Institute</a> took note of the shift last summer, as Republican office holders, candidates and their allies took up the cry.

“In the mouths of American conservatives and right-wingers, shouting ‘woke capitalism’ means jeering at any challenge to old orthodoxies and power structures,” Conmy wrote, adding that “[woke capitalism] is now used as a rallying call by right-wing politicians and commentators to discredit any ESG proposals relating to climate change, workers’ rights and corporate governance.”

They can jeer all they want, but that won’t stop the demographic ground from moving under their feet. 

A strong turnout by <a href="https://www.npr.org/2022/11/15/1136563709/young-voters-helped-democrats-win-the-senate-and-other-midterm-elections" target="_blank">young voters</a> in the midterm elections enabled the Democrats to keep their majority in the Senate and carve out near-parity in the House, bucking decades of historic precedent. <a href="https://www.macfound.org/press/grantee-stories/a-potent-climate-solution-the-youth-vote" target="_blank">These climate action voters</a> will be all the more motivated to turn out in 2024, if the Republican party insists on attacking corporations that invest in clean energy. 

House Republicans also stand a good chance of facing bipartisan pushback, as indicated by a recent survey undertaken by the communications firm ROKK Solutions in partnership with the Center for the Business of Sustainability at Penn State University.

The survey was designed to <a href="https://rokksolutions.com/news-category/press/" target="_blank">test the strength</a> of bipartisan opposition to the anti-ESG movement. Respondents did express reluctance to approve of corporate speech on issues unrelated to their business, but bipartisan majorities agreed on the right of corporations to set their own investment agendas.

Asked if the government should set limits overall on ESG investing, 63 percent of respondents said it should not. Similarly, 68 percent said that the government should not revoke tax incentives on the basis of ESG actions. 

“An overwhelming majority of voters, including Republicans felt that the government should not hold oversight hearings,” emphasized Ron Bonjean, who is a Co-Founder and Partner at ROKK Solutions. 

In addition, <a href="http://www.triplepundit.com/story/2022/anti-esg-office-holders/761261" target="_blank">the convergence</a> of anti-ESG rhetoric with <a href="https://www.triplepundit.com/story/2022/texas-blackrock-fossil-energy/754656" target="_blank">coded anti-Jewish code words</a> and religious extremism may also not sit too well with young voters.

Despite the red flags, House Republicans seem determined to forge ahead. As former two-term President Barack Obama <a href="https://www.theatlantic.com/politics/archive/2012/10/jon-stewart-how-obama-allowed-romney-proceed-wall/322403/" target="_blank">once famously said</a>, “Please proceed.”

Image credit: <a href="https://pixabay.com/photos/washington-dc-c-city-cities-urban-1624419/" target="_blank">David Mark</a> via Pixabay

Be Careful What You Wish For: ESG Investigations in Congress Will Backfire

This year, Latina Equal Pay Day falls on December 8. No, it’s not a random date: Estimates suggest that Latinas <a href="https://women.ca.gov/latina-equal-pay-day/" target="_blank">earn about 55 cents</a> for every dollar earned by white, non-Hispanic men. Put another way, on average Latinas need to work about 23 months to reach the same income level as most white men. According to Equal Pay Day, <a href="http://www.equalpaytoday.org/latina-equal-pay-day-2022" target="_blank">one of the forces</a> that’s behind publicizing days like December 8, full-time Latina workers earn about 57 cents to every dollar; for those who work part-time, the rate falls to about 52 cents on the dollar.

One typical reaction to this pay disparity is “well, that’s because women tend to fall into jobs that generally pay less.” Well, that argument might stand if one doesn't buy into nuance — the reality is far more complex. Reading the perspectives of these Latina entrepreneurs and professionals should put that assumption to rest.

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Take the perspective of Tammy Ramos, an attorney who received her J.D. from Notre Dame Law School and is the executive director of LatinaVida, a nonprofit that works with organization to boost the prospects of Latina professionals. <a href="https://www.sandiegouniontribune.com/opinion/commentary/story/2022-12-05/latina-pay-gap" target="_blank">In a recent op-ed</a>, she recounted her experience in her early days as a corporate attorney:

<blockquote>
…I remember working at my law office late one evening to meet my 2,000 hour per year billable requirement, when a White male associate who was hired at the same time waltzed into my office, letting out a huge sigh and exclaimed, “How in the world do they expect us to be able to bill 1,900 hours in our first year?” My rage almost got the best of me when I heard 1,900 hours, when I was required to bill 2,000, but I had already learned to mask my feelings and temper my reactions around White male colleagues. I did not want to feed the stereotype about Latinas being emotional and overly passionate. My immediate thought was that this male co-worker was earning more than I was despite the fact that I earned a law degree from a higher-ranked law school. This was the beginning of my awareness of the ridiculous pay gap that Latinas experience.
</blockquote>

Among the fundamental problems that are behind such disparities is the lack of transparency surrounding how companies structure salaries, bonus pay and even management often chart career trajectories for various employees.

Assumptions about people’s backgrounds and bias comes into play, too. Sandra Valesquez, founder of the personal care products <a href="https://nopalera.co/" target="_blank">Nopalera</a>, has encountered such attitudes as she built her business. In an emailed statement from <a href="https://www.digitalundivided.com/" target="_blank">Digital Divided</a>, a coalition that seeks to expand economic opportunities for women of color, she summed up what’s driving Latina Equal Pay Day:

<blockquote>
You would never ask L’Occitnane, ‘Are you only for French people?’ No. So why would you ask us if we’re only creating brands for our communities. … Until the day that people stop asking for Mexican products to be cheap, our mission is not over. No one cares about paying $5 for a croissant, [but] if a taco is $3…[it’s like] ‘Who do they think they are?’”
</blockquote>

This is more than about educating, informing, and changing hearts and minds; the challenges out there include structural ones as well. On that point, the data out there suggest that this pay gap, after years of narrowing, <a href="https://www.nbcnews.com/news/latino/california-latinas-saw-their-pay-gap-widen-decade-then-came-n1241610" target="_blank">has widened again</a> — with the <a href="https://www.triplepundit.com/story/2022/omicron-latino-essential-workers/734501" target="_blank">lingering effects of the pandemic</a> proving to be among the primary reasons. Mónica Ramírez, the Justice for Migrant Women’s founder and president, sums up why bolder action on this front is needed:

<blockquote>
"Latinas and our families have suffered the costs of the gender pay gap for decades. The pay gap impacts our ability to have what we need to live our lives with security. It impacts our ability to pay for our children to go to college, to save for the future, and to have confidence that we will have the financial footing to retire one day. The situation was bad before. It certainly has not gotten any better, and due to the grave impacts of the pandemic, the situation is likely worse."
</blockquote>

Image credit: <a href="https://unsplash.com/photos/IxmHiUC-yOw" target="_blank">Unsplash</a>

Tomorrow is Latina Equal Pay Day — Here’s Why Its Occurrence on Dec. 8 Makes ‘Cents’

Coming off the heels of the COP27 climate negotiations in Sharm El-Sheihk, Egypt in November, <a href="https://www.triplepundit.com/story/2022/cop27-just-transition/759731" target="_blank">there is renewed interest</a> — and some action— in a just transition. But what does it mean to build a strong bench of stakeholders to ensure that the transition is actually including the input of the people at the center? How does it become a meaningful and accountable transition <a href="https://www.triplepundit.com/story/2022/board-director-level-human-rights/761826" target="_blank">and not only something to tick off on a spreadsheet</a>?

<h2>The work of the Climate Justice Alliance</h2>

The <a href="https://climatejusticealliance.org/" target="_blank">Climate Justice Alliance</a> (CJA) is trying to ensure a just transition is a real transition for the people on the front lines — namely Black, Brown, and Indigenous communities. The Alliance is made of nearly <a href="https://climatejusticealliance.org/members-of-the-alliance/" target="_blank">90 members</a> of urban and rural frontline community organizations and networks throughout the U.S. and its territories. 

Ozawa Bineshi Albert, Co-Executive Director of CJA, says they define a just transition as “the process of moving away from our current fossil fuel-based economy to a more regenerative one that is good for all people and Mother Earth. Just transitions are grounded in local communities and may look different depending on the people and place, but these strategies work to transition entire communities to build thriving economies that provide dignified, productive and ecologically sustainable livelihoods, democratic governance and ecological resilience. We often say: we don’t want just a transition, we want a just transition.”

With that in mind, CJA is working on two strategies—among others—to ensure a just transition: building a bench of Black climate leaders and working with philanthropic leaders to direct funding where it is most needed. 

<h2>Building a bench for climate justice leadership</h2>

Bineshi Albert makes clear the connection between <a href="https://www.triplepundit.com/story/2020/taking-racism-dont-overlook-climate-justice/120521" target="_blank">climate justice and racial justice</a>. The group has launched <a href="https://climatejusticealliance.org/workgroup/black-caucus/" target="_blank">CJA’s Black Caucus</a>, composed of their members around the country. Through the Caucus, Bineshi Albert said, “we remind many in the larger climate and environmental movement that Black communities have always been at the center of climate justice. In fact, the Black environmental justice movement helped birth the climate justice movement of today.” She further noted that many in the Black community are themselves part of frontline communities. “The Black community has long had to deal with a disproportionate amount of pollution, toxins, red-lining and racially motivated discrimination for centuries,” she noted.

CJA’s aim is to make sure there is space for Black leadership in organizing, advocacy, and development. Bineshi Albert notes that mainly white and privileged environmental organizations have long dominated both in media coverage and in policy while not doing the hard work to ensure effective climate justice solutions. “We aim to change that dynamic in part by bringing more Black, frontline leaders and their vision to spaces that our communities are often excluded from.” As an example, <a href="https://climatejusticealliance.org/cop27/" target="_blank">CJA sent their leadership and allies</a> to COP27 as part of a 60-member coalition to keep the just transition front and center and are active participants in NYC Climate Week. In these spaces, they make clear where they feel the just transition <a href="https://climatejusticealliance.org/frontline-cop27-statement/" target="_blank">continues to fall short of its aims</a>. 

<h2>Philanthropy and its role in securing a just transition</h2>

One of the challenges that just transition advocates face is funding. Traditionally, <a href="https://www.triplepundit.com/story/2020/philanthropy-race-access/260081" target="_blank">philanthropy has been geared</a> toward the bigger environmental organizations, which often sit in the white, privileged space Bineshi Albert noted. “Over 92 percent of the money held by charitable foundations—over $1.2 trillion dollars—doesn’t go to solving our current interconnected economic, racial and climate crises,” Bineshi Albert told TriplePundit. “The vast majority of it is invested in Wall Street, where business as usual fuels poverty and pollution for the sake of profit.”

But Bineshi Albert feels now is the time to realign philanthropic activities with their investment strategies. “Divesting from our current extractive system and reinvesting wealth back into communities who are building regenerative, just transition projects is a good place to start,” she said. “Direct investments with no strings attached to support local, community-controlled climate solutions that leave no one behind, already exist and are successful today” and are critical to ensuring climate solutions are fair and just solutions. 

<h2>Moving forward on climate action that works for everyone</h2>

Frustrations run high as, year after year, the needle barely seems to move. But Binsehi Albert sees the solution in the same frontline communities. “Black, Brown, Indigenous, and rural and urban frontline communities have been forging [the solutions] for over 500 years, not just a few decades, because we have had to do so in order to survive.”

The resilience of these communities is their strength and can provide the will and knowledge to ensure that climate solutions are equitable and inclusive with an additional aim of correcting past harm. “Transitioning from extractive models of operating to more regenerative ones is exactly what will ensure long-lasting solutions that take a systems change approach, ensuring justice for people and the planet prevail,” Bineshi Albert noted. 

Finally, Bineshi Albert pointed to the fact that the hardest hit cannot be left out of the conversation. “We can’t continue to rely on those who created the climate crisis to fix it,” she said. “So we continue to show up whether that be in local communities who are making just transitions real on the ground or at global governmental spaces that set future policy. The inclusion of frontline wisdom and policies in practice and in place of lip service to environmental justice communities is in order at this critical moment in humanity’s history.” It is the only way to ensure we facilitate a just transition, rather than only a transition.

Image credit: <a href="https://unsplash.com/photos/0In0WPKTNxY" target="_blank">Jamal Dawoodpoto</a> via Unsplash

Climate Justice Alliance Answers This Question: What Does a Just Transition Really Mean?

Recent reports of human rights violations in the <a href="https://www.triplepundit.com/story/2022/fast-fashion-sustainability/758481" target="_blank">fast fashion</a> sector, <a href="https://www.triplepundit.com/story/2022/renewables-slavery-supply-chain/761386" target="_blank">clean technology</a> industry and yes, even this year’s <a href="https://www.triplepundit.com/story/2022/fifa-qatar-lgbtq-world-cup/761676" target="_blank">World Cup in Qatar</a> all <a href="https://www.triplepundit.com/story/2022/un-report-modern-slavery-china/752971" target="_blank">reinforce the obvious</a>: If your organization is not paying attention to the risks of such violations across your value chain, you can be darned well sure that the awful details will make their way across conventional and social media. A company can hire a crisis management firm and explain away all they want, but the images will continue to tell the story.

Transparency about human rights isn’t only about self-policing; there is a strong correlation between disclosure and performance on this challenge, according to a recent report from the <a href="https://assets.worldbenchmarkingalliance.org/app/uploads/2022/11/2022-CHRB-Insights-Report_FINAL_23.11.22.pdf" target="_blank">World Benchmarking Alliance</a>. Since this organization first started analyzing the human rights record of the global business community in 2017, it has found that respect for human rights is increasing. Nevertheless, there are still plenty of gaps that is causing human suffering worldwide while putting many companies’ reputations at risk.

What makes the biggest difference when it comes to a company’s human rights performance? According to this survey’s findings, companies that elevate such responsibilities to the most senior levels of management overall have solid records on this front. From the Alliance’s perspective, the companies that saw their human rights scores increase from zero in a few years did so because of their boards’ involvement. “Out of the companies that improved the most on [human rights], the majority (75 percent) have senior level responsibility for human rights and allocate resources and expertise for the day-today management of human rights within their operations and supply chains,” concluded the report’s authors.

On the other hand, 70 percent of the companies that still score a zero do not have any such resources at the senior management or board level at all. 

Clearly, it’s not enough to have a written and public commitment to respect and address human rights. You’ve seen the prose on many a sustainability section of a company’s web site — the prose is fairly formulaic: “At Company XYZ, we believe we need to take on climate change and we are also committed to respecting human rights.”

That isn’t enough: Companies need to explain how they are executing on these commitments. To that end, only about 25 percent of the companies the Alliance surveyed have actually disclosed how they engage with individuals and organizations on these challenges. So, how do many companies actually handle grievances related to such problems? Well, no one really knows, as more than 90 percent of the companies surveyed do not share how they engage with workers, communities or groups such as NGOs that are behind a grievance.

Therein lies the big problem behind the currently level of human rights performance within the global business community: At best, the Alliance describes companies’ current M.O. as overall, “hands off.” The conventional approach is to have a “code of conduct” or a set of policies that explain to a company’s suppliers how to handle human rights problems; however, the support and monitoring of such programs is often lacking. The risks that often land companies in hot water — child and forced labor, land rights, women’s rights and fair wages — often fall by the wayside, until such violations end up public and shared across various media platforms. To the Alliance’s point, only about one-third of all companies actually articulate their policies related to such challenges. Further, transparency on these problems are lacking, as only 2 percent of the companies surveyed actually disclose the number of people who are affected by such violations.

Finally, COP27 offers this reminder: Any level of commitment to taking on climate change doesn’t mean a company can turn a blind eye to human rights. Global leaders increasingly talk about a <a href="https://www.triplepundit.com/story/2022/cop27-just-transition/759731" target="_blank">just transition</a>, that is, climate action plans that are also socially equitable and include the needs of the most disadvantage community. But as human rights activists made clear in the weeks leading to, and during, COP27, the world’s climate and fight for human dignity worldwide are <a href="https://www.triplepundit.com/story/2022/climate-finance-cop27-human-rights/756856" target="_blank">inextricably linked</a> — one cannot succeed and ensure fairness for all without the focus on the other. In fact, another Alliance survey found that companies with a solid human rights score <a href="https://assets.worldbenchmarkingalliance.org/app/uploads/2021/11/2021_JustTransitionAssessment.pdf" target="_blank">also show promise</a> when it comes toward the shift to a just transition — and again, companies that score low on that index are flagging and flailing when it comes to addressing climate change.

As many workers worldwide are underpaid, would it be too much of an ask to connect human rights to executive pay? Not from the Alliance’s perspective. “Linking corporate performance on human rights to executive compensation,” concluded the group, “could increase accountability and incentives to respect human rights at the highest levels of the company.”

Image credit: <a href="https://unsplash.com/photos/VVyXF_WUyMs" target="_blank">Kuzzat Altay</a> via Unsplash

Get on Board: Director-Level Involvement Has a Direct Link to Human Rights Performance

Sustainable impact and innovation were top of mind for Jeffrey Crawford when he joined as vice president of sustainability at <a href="https://www.sustanagroup.com/about-us/" target="_blank">Sustana</a>, a sustainable recycled fiber, and paper manufacturer that Blackstone recently acquired. Since the acquisition, the company has been taking a closer look at its <a href="https://www.mckinsey.com/~/media/McKinsey/Business%2520Functions/Strategy%2520and%2520Corporate%2520Finance/Our%2520Insights/Five%2520ways%2520that%2520ESG%2520creates%2520value/Five-ways-that-ESG-creates-value.ashx" target="_blank">ESG</a> (environmental, social and governance) performance and strengthening its integration internally and throughout its value chain. 

Pursuing regulatory compliance and competitive ESG performance can involve significant investments of time and, yes, money — especially for a small or medium-sized enterprise (SME), Crawford told TriplePundit. Even so, in expanding its ESG initiatives, Sustana is not only able to avoid business risks, but also engage top-notch customers. The same results are possible for all SMEs.

<h2>The business benefits keep rolling in: Prioritize ESG systems</h2>

Companies that rank highly on ESG indicators tend to perform strongly. For Sustana, prioritizing ESG issues has positioned the company as an attractive business partner, Crawford said, as <a href="https://www.greenbiz.com/article/understanding-esg-risks-and-why-they-matter" target="_blank">risk mitigation</a> is an underlying benefit of ESG. On the environmental side, risks could include climate, water and energy security, while social risks include labor security and boycotts. In addition, poor governance can lead to corruption and disrupt internal and external communication channels. 

To strengthen its ESG management, Sustana conducted a <a href="https://www.greenbiz.com/article/how-make-your-materiality-assessment-worth-effort" target="_blank">materiality assessment</a> that engaged its key stakeholders. To maximize its impact, the company has leveraged its influence for good by focusing on key issues, Crawford said. These are climate change, circularity, water, energy, and sustainable supply chains, to name a few.

Along with expanding recycled fiber offerings, the company has leveraged biogas to power its operations. Crawford said the company also procures supplies from areas with a low risk for corruption and human rights abuses while working with suppliers to further mitigate social and climate risks. Sustana avoids sites near key biodiversity, as well. 

Those ESG ambitions spur innovation, and Sustana is the first and only company to sell recycled fiber that is FDA-compliant for direct contact with food.

“So many brands have recycled content and climate mitigation targets, and we’ve been a solution for them,” Crawford said. “However, we're just a medium-sized company. We’re trying to use as much power and leverage as we have, but we need to collaborate with others in this industry to have a greater impact.” 

<h2>What can SMEs do to make progress on ESG? </h2>

ESG reporting standards and regulations are evolving rapidly and will, directly and indirectly, impact SMEs. To stay competitive, SMEs should ensure they are advancing their ESG initiatives and reducing their greenhouse gas emissions. For example, Canada’s carbon pricing system and the European Union’s <a href="https://taxfoundation.org/cbam-carbon-price-tariffs/" target="_blank">carbon border adjustment mechanism</a> are expected to have direct cost impacts on businesses operating in or entering those markets.

Although they’re just starting to feel pressure from regulators, investors, customers, and larger companies that are engaging their supply chains to report on ESG data and risks, Crawford said SMEs have no time to waste: “It’s a lot to do in a very short period of time.”

Here’s a taste of what he advises for SMEs:

Codify your purpose and principles. Have you drilled down into your organization’s purpose? Officially defining the organization’s purpose and externally committing to principles, like the United Nations Global Compact’s on the environment, human rights, labor, and anti-corruption, help focus efforts and hold the company accountable. In addition, regularly conduct ESG materiality assessments, which will identify your risks and opportunities for impact, Crawford advised. 

Establish ESG governance and risk oversight. Establishing effective oversight of ESG risks and performance at the board and senior management levels is critical. SMEs can accomplish this by establishing ESG committees or adding responsibilities to existing committees. ESG topics like climate change represent risks for many companies. Integrating these into existing enterprise risk management (<a href="https://erm.ncsu.edu/library/article/what-is-enterprise-risk-management" target="_blank">ERM</a>) systems and processes will improve resilience.

Start tracking your progress. You’ll need to decide which <a href="https://pro.bloomberglaw.com/brief/comparison-of-esg-reporting-frameworks/#:~:text=A%2520sector-based,%2520industry%2520specific,the%2520SEC%2520and%2520the%2520public." target="_blank">reporting framework</a> you’ll use and then gather data to establish baseline performance. The data you report externally will need to be investor-grade, comparable and collected through auditable processes, Crawford said.

Build the business case internally. Crawford recommends conducting an internal audit of the company’s ability to report externally in accordance with ESG reporting standards. Invite and lean on the finance team to support this effort. “They tend to have strong familiarity with processes and controls, and their opinion holds weight with senior leadership,” he said. 

Work smarter, not harder. Once you’ve established a baseline performance, you can start setting targets and risk tolerances, develop critical data processes and controls, and better manage your risks. It’s smart to automate as many of your data collection and reporting processes as possible, using systems designed for risk and ESG data management. 

Engage with your stakeholders. As you get your own house in order, begin to engage suppliers and customers. Provide opportunities for suppliers on key issues and open their eyes to their business case for ESG. The data you’ve been collecting on the risks and benefits of your burgeoning initiatives will help with your argument. 

Connect with your peers. Continue growing by joining and supporting the right groups, initiatives, and industry associations. Here’s where collaborating with suppliers and customers to show support for progressive sustainability legislation comes in. Crawford also lauds the <a href="https://sciencebasedtargets.org/" target="_blank">Science-Based Targets initiative</a>, which presents an implementable path for each sector to move toward the aim of the Paris Agreement. 

<h2>The bottom line: Now is the time to act for SMEs</h2>

Crawford warned that SMEs don’t have any time to lose, especially as large companies integrate vendor ESG performance into their procurement decisions and cut organizations from their supply chains with high ESG risks. But consistent baby steps lead companies forward. Continue building the capacity of employees and the organizations in your value chain on sustainability issues and building out your ESG systems, and you will see results, he said. 

This article series is sponsored by Sustana Fiber and produced by the TriplePundit editorial team.

Image credit: <a href="https://unsplash.com/photos/Pb2CJplHi0w" target="_blank">Abhi Verma</a>/Unsplash

ESG for SMEs: How Small- and Medium-Sized Businesses Can Embrace ESG for Long-Term Growth

More companies say they are laser-focused on financial inclusion, but we still have a long road ahead.

Recently, a leading software provider for the global financial services sector <a href="https://www.prnewswire.com/news-releases/finastra-survey-shows-most-us-financial-institutions-consider-open-banking-essential-with-a-new-focus-on-shared-data-and-infrastructure-301696002.html" target="_blank">shared the results</a> of its survey on “open banking,” the system of allowing access, sharing data and expanding the control of consumer banking through third-party applications.

At a first glance, this sounds impressive: Such sharing of data could expand financial services, inspire more innovation within the sector and disrupt banking as we know it. At the same time, companies say they are supportive of the ESG (environmental, social and governance) movement.

However, this survey only promises that financial products could proliferate — nowhere does it mention how such disruptive technologies could result with ensuring more Americans can participate in the U.S. banking system.

Here are the facts: <a href="https://www.fdic.gov/analysis/household-survey/index.html" target="_blank">Almost 20 million Americans are unbanked</a>, and women of color currently <a href="https://www.triplepundit.com/story/2022/hersuitespot-businesswomen-side-hustle/739391" target="_blank">score less than 1 percent</a> of all U.S. venture capital, even though they are launching new businesses at an impressive rate, surpassing that of men.

Bottom line: We cannot expect banks to solve the financial inclusion problem. Companies in all sectors can be a part of this conversation.

Take <a href="https://www.emdgroup.com/en" target="_blank">Merck KGaA, Darmstadt, Germany</a>, which recently launched a $20 million investment in a partnership with the women-led impact investing platform CNote. Through CNote, which <a href="https://www.triplepundit.com/story/2022/xylem-invest-underserved-communities/744201" target="_blank">has a strong record of delivering results</a> for entrepreneurs of color, the project will generate capital for community financial institutions (CFIs), which have long been critical in supporting small businesses led by women and people of color while also funding social impact investments such as affordable housing.

Mary Mazzoni, senior editor of TriplePundit, will sit down with CNote CEO Catherine Berman; Jeffrey Whitford, Head of Sustainability and Social Business Innovation for the Life Science business sector of Merck KGaA, Darmstadt, Germany; and Renee Connolly, the company’s Chief Diversity, Equity &amp; Inclusion Officer and Head of Innovation HR Engagement. Join us on Wednesday, December 14 at 1 p.m. ET (or catch a recording afterward) as we discuss the benefits of investing in CFIs and how other businesses can apply this novel model to meet their diversity, equity and inclusion goals. <a href="https://contact.3blmedia.com/3bl_media_digital_events_445/" target="_blank">Register for this free webcast here</a>.

Image credit: <a href="https://www.pexels.com/photo/a-woman-in-gray-blazer-typing-on-laptop-while-sitting-beside-the-man-in-white-long-sleeves-holding-a-tablet-7550541/" target="_blank">Pexels</a>

We Can’t Only Rely on Banks to Expand Financial Inclusion — Companies in Other Sectors Must Step Up, Too

Generous, community-minded and loving isn’t typically how the American public describes car companies or car dealers. But back in 2008, 10 years before I was promoted to CEO of Subaru of America, I had an idea that might change that. What if, instead of a rebate or financial incentive program at the end of the year, we took $250 from every sale or lease and gave it to charity? This was at the time of the 2008 financial crisis in the United States, when many people lost their jobs, and many were in need. 

Everybody thought I was nuts. They said: “$250!? That money could be used to lower the lease payment by $10 a month, or could be put toward a free accessory! People only care about themselves. Don't you understand the cost of doing such a thing!?” 

The point is: It’s never a convenient time for a leader to advocate giving away money, and when you are the person managing the money, the task can be especially challenging. In 2008, I was both the COO and CFO at Subaru of America, and with those titles comes the presumption that you’re going to protect the bottom line at all costs and shoot holes in any attempts that get in the way of any return on investment — especially during a time of uncertainty like the financial crisis. But I’ve been dealt a fortunate hand in life and have always tried to give back where I can, and I knew giving back as a company was the right thing to do. As a financial veteran of the automotive industry, I had a feeling it would pay off. As Subaru celebrates the 15th anniversary of the Subaru Share the Love Event, I am proud, excited and quite frankly relieved to report that I was correct on both counts. By the end of this year, Subaru and its participating retailers will have donated over $250 million to help those in need through our company’s <a href="https://www.subaru.com/share-the-love.html" target="_blank">Share the Love Event</a>. 

When it comes to charitable giving, the choice must come from the heart. That’s why, starting with the first Subaru Share the Love Event, we put our customers in the driver’s seat and let them select from a group of national charities they could designate to receive the $250*. This year, there are four national charities customers can select from: ASPCA, Make-A-Wish, Meal on Wheels and the National Park Foundation.

<img alt="Subaru Share the Love Event - giving back to charity" data-entity-type="file" data-entity-uuid="a9f98960-bed1-45e1-93c8-1ae80d429333" src="/sites/default/files/inline-images/Subaru%20Share%20the%20Love%20Event%20-%20giving%20back%20to%20charity.jpg" width="1000" height="1000" loading="lazy" />

After a few years, we realized that many customers, as well as our retailers, wanted to have the option to keep charity donations within the communities where they live and work. That’s why in 2014, Subaru retailers began sponsoring local nonprofits, or as we call them “Hometown Charities,” during the Subaru Share the Love Event, and these local charities are the recipients of over 70 percent of Share The Love donations. This can add up to tens of thousands of dollars of much-needed funds going right back into the retailer’s hometown to make their community a better place to live and work! Over the years, I have had the privilege of attending many of these check presentations, and I am always moved because it truly is life-changing money for these local charities. 

After a few years, we knew we created something truly special with the Subaru Share the Love Event, and we wanted to see how we could make an even greater impact throughout the entire year. That’s how we came up with our Subaru Love Promise activations: Subaru Loves to Help in February, Subaru Loves the Earth in April, Subaru Loves to Care in June, Subaru Loves Learning in August, and Subaru Loves Pets in October. People walking into a Subaru retailer now realize that there’s something different happening at this company. Our giving back enlightened us to the fact that we were delivering on our commitment to be “<a href="https://ourimpact.subaru.com/more-than-a-car-company/" target="_blank">More Than a Car Company</a>.”

Subaru is a relatively small company when you look at the other large automotive manufacturers in the United States, and to have a meaningful way to differentiate our brand from the competition, we needed our retailers to change the way they approached the market. The Subaru Share the Love Event and the Subaru Love Promise activations organically paved the way. Having our retailers immerse themselves in their communities, being an engaged and committed presence, changed the dynamic: from a dealer selling hard to customers, to a retailer where a customer could help us help others by their purchase or lease of a Subaru vehicle. 

Whether entering the lobby of our headquarters in Camden, New Jersey, or walking through the doors of your local Subaru retailer, there is little doubt about what Subaru stands for and for what accomplishments we are most proud. 

Typically, car dealers are remembered for selling and promoting themselves to their communities, not supporting and participating in them. Thanks to the Subaru Share the Love Event, Subaru and our retailers have changed that dynamic over the past 15 years. 

Although the timing never seems convenient, we choose to focus on giving back, even in times of uncertainty. We believe we will be remembered for our impact on the lives within our communities. But whatever our eventual place in history, we know that our retailers, our brand and our customers are far richer for the experience.  

Images courtesy of Subaru of America, Inc.

This article series is sponsored by Subaru and produced by the TriplePundit editorial team. 

*Subaru will donate $250 for every new Subaru vehicle sold or leased from November 17, 2022, through January 3, 2023, to four national charities designated by the purchaser or lessee. Pre-approved Hometown Charities may be selected for donation depending on retailer participation. For every new Subaru vehicle sold or leased during the campaign period, participating retailers will donate a minimum of $50 in total to their registered Hometown Charities. Subaru will donate a total of $5 to their registered Hometown Charities for every Subaru vehicle routine service visit during the campaign period. A routine visit includes customer payment of $5 or greater, or any service that includes a genuine Subaru oil filter. Purchasers/lessees must make their charity designations by January 13, 2023. The four national charities will receive a guaranteed minimum donation of $250,000 each. See your local Subaru retailer for details or visit subaru.com/share. All donations made by Subaru of America, Inc.

The Importance of Giving Back — Even In Times of Uncertainty 

The FIFA World Cup is never short on drama. The world’s most anticipated soccer (or football, depending on who you ask) tournament brings fans together every four years to witness emerging superstars, last-minute goals, <a href="https://www.sportingnews.com/us/soccer/news/australia-world-cup-upset-advancing-knockout-rounds-2022/mxjmcnfrj0o9vrnxa98nvwjm" target="_blank">thrilling upsets</a> and controversial officiating. But not all the drama at the 2022 World Cup hosted in Qatar is taking place on the pitch. 

Qatari leaders as well as officials from FIFA, the governing body for international soccer, have insisted for years that the World Cup would be open for everyone to enjoy — including members of the LGBTQ community. This is despite the host country’s <a href="https://www.humandignitytrust.org/country-profile/qatar/" target="_blank">laws restricting same-sex sexual activity</a>, which can carry a punishment of up to seven years of imprisonment.

<h2>FIFA and Qatar fall flat on promise of World Cup 'without discrimination'</h2>

Qatar’s ruling Emir Tamim bin Hamad al-Thani <a href="https://www.washingtonpost.com/sports/2022/11/20/world-cup-qatar-gay-laws-lgbtq/" target="_blank">told the U.N.</a> months before the tournament’s opening match on November 20 that the small Arab nation would welcome people “without discrimination.” FIFA’s head of fan experience, Gerdine Lindhout, <a href="https://www.itv.com/news/2022-11-16/lgbt-fans-can-show-public-displays-of-affection-at-qatar-world-cup-fifa-says" target="_blank">echoed this warm welcome</a>, saying there is “no risk” to LGBTQ fans attending matches and showing public affection when inside the official tournament zones.  

Yet, the reception of rainbow shirts and Pride armbands hasn’t been as warmly welcomed as FIFA and Qatar led to believe. Security guards have heckled fans and journalists with Pride gear trying to enter the stadiums and FIFA has threatened to penalize teams wearing rainbow armbands intended to show solidarity and support for the LGBTQ community. 

American sportswriter Grant Wahl <a href="https://grantwahl.substack.com/p/an-unexpected-detention-by-world" target="_blank">says he was detained</a> for nearly half an hour and “angrily demanded” to remove his rainbow T-shirt before guards ultimately granted him entry. In Wales’ opening match against the United States, women Welsh fans had their <a href="https://www.reuters.com/lifestyle/sports/rainbow-bucket-hats-flags-allowed-wales-v-iran-world-cup-game-2022-11-25/" target="_blank">rainbow bucket hats</a> confiscated upon entry. Oddly, men — who are subject to far stricter punishments for same-sex sexual activity in the country — were not asked to remove their rainbow hats. 

<h2>FIFA’s inconsistent stance before and during the World Cup</h2>

FIFA reportedly offered apologies in both instances and has reemphasized its stance that Pride gear is permissible throughout the stadiums. Though FIFA is allowing fans to wear the gear — including the Welsh women, who returned for the team’s second match a few days later with the same rainbow hats — it’s taken a harsher approach for the players representing their countries on the field. 

Players from seven European teams competing in the tournament — Belgium, Denmark, England, Germany, the Netherlands, Switzerland and Wales — <a href="https://www.cnbc.com/2022/11/21/qatar-world-cup-2022-teams-ax-pro-lgbtq-armbands-after-fifa-threats.html" target="_blank">abandoned plans</a> to wear “OneLove” armbands (pictured above) after FIFA announced it would issue a yellow card to each player donning the symbol. Two yellow cards in a game sends a player off for the match and disqualifies the player for an additional match.  

Ironically, the ban on the armbands had its own unintended consequences. The Dutch company that manufactures the armbands, Badge Direct BV, said it had completely <a href="https://www.reuters.com/lifestyle/sports/onelove-anti-hate-armbands-sell-out-after-fifa-world-cup-ban-2022-11-23/" target="_blank">sold out its inventory</a> within two weeks after FIFA announced the ban.

FIFA’s resistance to fully embrace the LGBTQ community on the largest stage is at odds with the progress made from the football world’s diversity, equity and inclusion initiatives the past several years. Nearly every major international soccer league — <a href="https://www.premierleague.com/news/1929697" target="_blank">Premier League</a> (England), <a href="https://www.cnn.com/2021/02/18/sport/lgbtq-campaign-11freunde-spt-intl/index.html" target="_blank">Bundesliga</a> (Germany), <a href="https://www.otbsports.com/soccer/la-liga-side-launch-their-new-kit-to-support-lbgt-charities-291875" target="_blank">La Liga</a> (Spain), <a href="https://www.mlssoccer.com/news/soccer-for-all-mls-clubs-around-the-league-recognize-pride-month" target="_blank">MLS</a> (United States), and others — have made concerted efforts to engage and support the LGBTQ community. 

<h2>Seizing the global stage to promote LGBTQ rights</h2>

Soccer is far and away the world’s most popular sport, and the World Cup is the unquestioned leader in most anticipated and viewed tournament. A staggering <a href="https://www.fifa.com/tournaments/mens/worldcup/2018russia/media-releases/more-than-half-the-world-watched-record-breaking-2018-world-cup" target="_blank">3.5 billion people</a> — just shy of half the entire world’s population at the time — tuned in to watch at least one minute of game action for the 2018 World Cup held in Russia. 

Of course, the host country has the right to subject its visitors to its customs and cultures. Qatar <a href="https://www.nytimes.com/2022/11/18/sports/soccer/world-cup-beer-qatar.html" target="_blank">changing course on serving beers</a> in the stadiums to abide by its strict alcohol consumption policies disgruntled many fans and lost merchants profits, but it’s likely not a life changing event. 

But FIFA, as the organizing body who chose Qatar to host the World Cup <a href="https://www.theguardian.com/tv-and-radio/2022/nov/09/fifa-uncovered-review-football-documentary" target="_blank">amid extreme controversy</a> and corruption charges, also has the right — and obligation — to support all fans and players who have traveled from every continent to experience their event. Promoting inclusivity — or at least offering the space and freedom for others to do so — on the biggest stage of the most popular sport is an opportunity too rich to pass up. 

<h2>The bottom line</h2>

From a business perspective, it’s also a simple step FIFA could take to help repair a reputation that’s <a href="https://www.vox.com/world/23450515/world-cup-fifa-qatar-2022-controversy-scandals-explained" target="_blank">seen better days</a> since awarding Qatar the 2022 host honors a dozen years ago. Beyond the suspect corruption allegations behind the bid, the construction of seven new stadiums were built by low-paid migrant workers who endured poor working and living conditions. A Qatari official pegs the deaths of migrant workers to be <a href="https://www.axios.com/2022/11/29/qatar-migrant-worker-deaths" target="_blank">in the 400-500 range</a>, though a <a href="https://www.theguardian.com/global-development/2021/feb/23/revealed-migrant-worker-deaths-qatar-fifa-world-cup-2022" target="_blank">2021 report from the Guardian</a> suggests the number of deaths could be as high as 6,500. 

As the World Cup soon reaches the quarter-finals round, the spotlight grows brighter. The world will be watching to see if and how FIFA and Qatar can make good on their word: a tournament where everyone belongs.

Image credit: <a href="https://www.knvbshop.nl/en/knvb-one-love-supply-band.html" target="_blank">Royal Dutch Football Association and Badge Direct VB</a>

FIFA and Qatar Drop the Ball on an Inclusive World Cup

As the calendar moves toward 2023 and inflation continues to influence consumer purchasing worldwide, massive banks of data make clear that companies should not scale back their environmental, social and governance (ESG) programs nor shrink their outreach to inform customers about their ESG efforts.

Especially with the <a href="https://www.foodnavigator-usa.com/Article/2022/11/18/Consumers-pulling-back-on-groceries-as-input-cost-for-food-continues-to-drive-up-prices" target="_blank">price volatility</a> of sectors like food and grocery, where switching brands is an easy, in-the-moment choice, companies can’t afford to overlook the importance of sustainability and social responsibility in consumers’ minds if they want to preserve and build brand loyalty.

“In the current economic climate, social and environmental performance <a href="https://the-ethos.co/sustainable-products-inflation-survey/" target="_blank">still matters</a>. Brands that want to retain and win customers need to stand for something,” said Mike Johnston, managing director for data products at the research technology firm Glow.

“Even well-off consumers will be looking for opportunities to trade down to save money. Customers need a compelling reason why they shouldn't swap your brand for a cheaper alternative,” Johnston added. “Along with quality, sustainability concerns are likely to be a key factor consumers consider.”

However, great ESG programs with successful positive impacts alone don’t translate into profit potential if consumers aren’t aware of them. Brands must <a href="https://www.triplepundit.com/story/2022/improve-esg-communications/758111" target="_blank">find the right messages and effective methods</a> for delivering their company’s ESG stories — the ones that click and have staying power with customers.
<figure role="group"><img alt="Cocoa Life - cocoa farmer holds cacao in Brazil - sustainable cocoa ESG communications" data-entity-type="file" data-entity-uuid="0253fab3-60df-4d0f-a4e3-d880351fda81" src="/sites/default/files/inline-images/Cocoa%20Life%20-%20cocoa%20farmer%20holds%20cacao%20in%20Brazil%20-%20sustainable%20cocoa%20ESG%20communications.jpg" width="1500" height="1000" loading="lazy" /><figcaption>This Brazilian cocoa farmer, and thousands more around the world, participate in Mondelēz International's signature sustainable cocoa program, Cocoa Life.</figcaption></figure><h2>Learning from one brand’s experience</h2>

Mondelēz International owns Cadbury, the maker of chocolate candies sold in more than 40 countries. The brand measures consumer perceptions of its ESG efforts through <a href="https://campaign.glowfeed.com/socialresponsibilityscore" target="_blank">Glow’s Social Responsibility Score (SRS)</a> and related data tools. Cadbury has high brand awareness in general and clear ESG credentials in particular: 8 in 10 consumers who are aware of the brand have an opinion about Cadbury’s sustainability performance, according to Glow data.

For example, Mondelēz has had a <a href="https://www.fairtrade.org.uk/farmers-and-workers/cocoa/cocoa-life/" target="_blank">partnership with Fairtrade</a> since 2009 and developed the sustainable cocoa program <a href="https://www.cocoalife.org" target="_blank">Cocoa Life</a> over the past 10 years, both with websites dedicated to them. Cadbury products carry <a href="https://www.cocoalife.org/brands/cadbury" target="_blank">on-pack messaging</a> to call attention to the Cocoa Life initiative, which is designed to support fair trade, natural resource sustainability and improved lives for cocoa farmers.

This combination of ESG programming and consumer messaging is reaping rewards based on results from Glow’s SRS tracking. The data tools also retrieve verbatim comments, such as praise for Cadbury’s efforts in “environmental sourcing their chocolate” from a customer in Sydney, illustrating what consumers recognize as positive attributes of the brand.

In Australia, Cadbury ranked the highest in the snacking subcategory of 14 brands tracked, and in the U.K. the third highest in the snacking subcategory.

Cadbury saw particularly good progress from August through October of this year — raising its SRS in Australia by 13 percent, substantially more than the average increase of 3 percent from over 250 brands measured. For that rolling three-month period, Cadbury scored 24 percent above the average of all tracked brands and 15 percent above the average of the score for food and grocery brands.

In the U.K., Cadbury’s position is the same as in Australia, where the brand scored 24 percent above all tracked brands and 15-percent above the average score for food and grocery brands in the latest time period. Achieving that kind of dominance in consumer perceptions about a company’s efforts on fair trade and sustainability is what companies want to see.

Yet digging deeper, Cadbury’s SRS rankings reveal new opportunities ripe for further development. 

Cadbury’s SRS rating was 94 percent higher among those who recognized even one of the company's ESG initiatives, compared to those who had no such awareness. This demonstrates that positivity toward a product can be generated from ESG programs and from effectively delivering quality messages about those initiatives. 
  
Still, SRS data indicates a significant proportion of consumers were unaware of Cadbury’s specific ESG programs. If a brand like Cadbury, with its high brand awareness and long-running ESG programs that are heavily communicated, is still failing to reach some consumers, what’s the next step for it — or any company — to make the connection stick?
<figure role="group"><img alt="cadbury dairy milk Cadbury snowballs packaging with ESG messaging" data-entity-type="file" data-entity-uuid="76537ad4-bf59-4e02-aa54-a09db8a6b16a" src="/sites/default/files/inline-images/Cadbury%20pack.png" width="735" height="709" loading="lazy" /><figcaption>Cadbury products carry on-pack messaging to raise awareness of the Cocoa Life initiative, which is designed to support fair trade, natural resource sustainability and improved lives for cocoa farmers.</figcaption></figure><h2>Opportunities in the gaps</h2>

“Consumers say they are gathering their ESG messages primarily through news and media coverage, product packaging and advertising,” said Tim Clover, CEO of Glow. “But they want to get more information via brand-owned channels like packaging and in-store/online at the moment of purchase.”

The key phrases in Clover’s observation of consumer data are “more information” and “moment of purchase.”

In the U.K., only Montezuma's and Tony's Chocolonely are ahead of Cadbury in their ESG ratings as evidenced by the SRS. The Dutch brand Tony’s Chocolonely <a href="https://www.dailymail.co.uk/news/article-10398443/Tonys-Chocolonely-puzzles-shoppers-new-bars-titled-Injustice-Inequality-Inhuman.html" target="_blank">has an unusual way</a> of getting its ESG message across: its chocolate bars are segmented in irregular pieces to represent inequalities in chocolate production. Messaging on the inside and outside wrappers further explain the brand’s quest to eliminate injustice from chocolate manufacturing.

“The leading brands … are using every possible opportunity to communicate how they are making a difference to people and the planet,” Clover said. 

Based on the data, consumers are telling businesses that their ESG practices matter — and so does the way they communicate them. 

In particular, messaging needs to get real and get specific. “Brands that grandstand about distant, abstract goals can confuse or <a href="https://corporatesolutions.swissre.com/insights/knowledge/greenwashing-risks-and-the-path-towards-real-progress.html" target="_blank">lose the trust</a> of tuned-in and action-focused consumers, even when the programs themselves are highly impactful and beneficial,” Clover said. The data shows “regular updates and communications” yield “increased engagement” from a brand’s followers “and engender trust and loyalty,” he advised. 

<h2>The bottom line: Consumer data drives ESG messaging that stands out</h2>

If it sounds like <a href="https://www.businessnewsdaily.com/2821-consumers-relationships-brands.html" target="_blank">consumers want a relationship with companies</a>, they do — and they’re seeking something that goes beyond a transaction. Business leaders need to treat those relationships the same way as anyone would regard a personal one, with communication and trust.

As with typical human interactions, businesses have to “check in” with their customers about how the relationship is going. Data and feedback together help companies to identify where the successes are and in what ways they can improve.

It may seem like a tall order to give mass outreach a one-to-one feeling, but the data says that’s what consumers want, along with a good story delivered when and where they need it for making the best purchasing decisions. 

Clover captured those expectations with this statement: “It is clear that consumers don’t expect perfection, but they do expect commitments, honesty and progress.” In other words, consumers aren’t just hungry for consumables. They’re craving a better world and food for thought.

This article series is sponsored by Glow and produced by the TriplePundit editorial team.

Image credits: Dragana Gordic/Adobe Stock and Mondelēz International

Does Your ESG Story Click with Consumers? How to Craft Messaging That Stands Out

Several top food and beverage companies recently announced the creation of a new organization to help farmers transition to more economically and environmentally sustainable growing practices including regenerative agriculture. PepsiCo, King Arthur Baking, General Mills, Anheuser-Busch, Unilever and the Walmart Foundation jointly created the <a href="https://trustedadvisorpartnership.com/" target="_blank">Trusted Advisor Partnership</a> to help provide farmers with the technical skills they need to grow soil and improve their farms' outputs.

The program is launching first in North Dakota, where erosion is responsible for a staggering 50 percent topsoil loss in some areas, resulting in significant decreases in agricultural production. After piloting the program there, the partnership’s leaders are aiming to expand it to other regions. TriplePundit recent spoke with several of its stakeholders to learn more about this new organization’s goals.

<h2>Training the advisors who train farmers </h2>

The partnership engaged North Dakota State University and local crop advisors to develop interactive training programs to help farmers better understand and implement regenerative and sustainable growing practices, ranging from cover cropping to integrated pest management. Dr. Abbey Wick, North Dakota State University (NDSU) Associate Professor, Extension Soil Health Specialist and co-lead for the project, told 3p, “With a wide variety of commodities grown within our borders and a strong existing base of Certified Crop Advisors, North Dakota is the ideal region to demonstrate the critical importance of connecting farmers with independent information delivered by trusted advisors – information on the conservation ag practices that build not only better soil but a better bottom line for our state and tribal producers.”

The nonprofit Sustainable Food Lab is managing the regenerative agriculture project and it is currently working with corporate partners to develop financial incentives for farmers who participate in the regenerative agriculture program.

The founders of the partnership say that their work will help create a more resilient agricultural sector. Sustainable Food Lab's senior director Elizabeth Reaves said, “We’re excited to be taking the wraps off this cross-sector effort, especially on the heels of an unprecedented investment in our nation’s ag economy from the USDA Partnerships for Climate-Smart Commodities fund. Dollars alone are not enough; there is, and will continue to be, a pressing need for more agronomic talent to de-risk the transition to regenerative. By syncing farmers with unbiased technical support and customized supply chain programs, we believe this project has the potential to accelerate the momentum around soil health and whole-of-farm stewardship in the U.S.”

The partnership is now in its early phases, and so far has hosted workshops and distributed surveys to better understand baseline levels of regenerative agricultural practices in North Dakota. The organization’s goal is to reach 300,000 acres by the end of 2025. 

A $1.6 million grant from the Walmart Foundation has allowed the Sustainable Food Lab to train crop advisers in cutting-edge, research-driven regenerative practices so that they can in turn help farmer clients build soil and improve the long-term economic and environmental resilience of their farms. The partnership’s leaders aim to connect certified crop consultants with farmers to provide them with one-on-one advisory services. The group is currently recruiting more crop consultants and they are aiming to triple the number of certified crop consultants available to participating farmers by 2024. 

<h2>Expanding regenerative agriculture beyond North Dakota </h2>

Currently, the partnership is recruiting financial supporters and collaborators to join its mission. Nicholas Mylet is Global Director of Sustainable Agriculture for Anheuser-Busch, one of the founding corporate partners of the partnership. “Cross-sector collaboration is critical to help create systems change. This initiative is a key opportunity to work alongside peers and the local farming ecosystem to help build resilience for people and planet,” he explained to 3p.

Members of the partnership insist that their North Dakota test case can become a model for other communities, including Indigenous peoples, and are seeking broad support across more agricultural regions and stakeholder groups. 

Image credit: <a href="https://pixabay.com/photos/wheat-north-dakota-field-crop-862919/" target="_blank">Pixabay</a>

Regenerative Agriculture To Expand Across North Dakota and Beyond

Farmers in Great Britain generally <a href="https://moneyweek.com/472741/will-brexit-hurt-our-farmers" target="_blank">supported</a> Brexit back in 2016, a decision that may seem dodgy now as many farmers across the U.K. are now <a href="https://www.euronews.com/2022/11/11/some-uk-farmers-say-they-are-struggling-to-cope-after-brexit" target="_blank">struggling</a> in the wake of the country deciding to cut ties with the European union. But regenerative agriculture could prove to <a href="https://www.reuters.com/business/sustainable-business/nature-starved-uk-sows-seeds-revolution-how-it-grows-food-2022-09-29/" target="_blank">be a lifeline</a> for more farmers, <a href="https://www.nature.com/articles/s41598-019-57256-3" target="_blank">including those who grow barley</a>, as both the government and private sector are funding such programs in a bid to resuscitate the country’s agricultural sector. Among such companies is Suntory, the Japan-based brewing and distilling company that owns brands including Jim Beam and Maker’s Mark.

Suntory recently launched an initiative focused on reducing greenhouse gasses by sourcing U.K.-grown barley that farmers will cultivate using regenerative agriculture practices. In a partnership with the U.K.’s malt supplier <a href="https://www.muntons.com/" target="_blank">Muntons</a>, the sustainability consultancy <a href="https://futurefoodsolutions.co.uk/" target="_blank">Future Food Solutions</a>, and barley farmers in the country’s East Anglia region, Suntory says the project will being production next year with the goal to grow barley that emits half the GHG emissions over the next five years.

The worldwide food and agriculture sector is amongst <a href="https://news.un.org/en/story/2021/03/1086822" target="_blank">the largest sources</a> of greenhouse gas emissions on the planet, responsible for between 25 and 33 percent of global emissions. To that end, food companies and investors are increasingly showing interest in regenerative agricultural practices in order to mitigate the sector’s emissions. Supporters of regenerative agriculture insist it can boost the health of ecosystems, improve soil health and even sequester carbon.

<a href="https://www.fooddive.com/news/beer-industry-regenerative-agriculture-challenges/630812/" target="_blank">Not everyone shares this enthusiasm</a> — some are making the argument that bold announcements about regenerative agriculture are <a href="https://www.fastcompany.com/90796487/is-regenerative-agriculture-the-future-of-farming-or-the-next-greenwashing-fad" target="_blank">a ruse to stall tactics</a> that would be far more environmentally responsible. Nevertheless, <a href="https://www.triplepundit.com/story/2022/cop27-regenerative-agriculture/760021" target="_blank">during COP27</a>, regenerative agriculture was on topic for several events and finance negotiations, as farmers, global leaders, climate change experts and business leaders all continue to search for ways in which to transform agriculture from a problem into a solution. Barley could very well be one crop <a href="https://nph.onlinelibrary.wiley.com/doi/10.1111/nph.13266" target="_blank">that can help decrease emissions</a> through such uses such as planting it during certain times of the year <a href="https://www.ecowatch.com/regenerative-agriculture-facts.html" target="_blank">as a cover crop</a>.

On that point, Suntory says raw ingredients comprise about 20 percent of the company’s total emissions across its entire value chain – with barley, a key ingredient in both beer and spirits, adding to that total. The company will gauge how the regenerative agriculture program will reduce emissions, improve soil health and water quality, ensure crop yields, and affect grain quality. Various brands falling under the Suntory umbrella will evaluate these crops’ contributions to <a href="https://www.suntory.com/csr/activity/environment/management/vision/" target="_blank">Suntory’s goal</a> to eliminate emissions across its entire value chain by mid-century.

Other brands in Suntory’s space, all of which are dependent on barley for their brews and whiskies, are dabbling in regenerative agriculture — a list that includes Diageo’s <a href="https://cleantechnica.com/2022/03/05/regenerative-agriculture-could-make-your-favorite-beer-even-more-nutritious/" target="_blank">Guinness</a>, <a href="https://www.google.com/url?q=https://www.triplepundit.com/story/2020/signs-growth-regenerative-agriculture-beer-maker-steps/120451&amp;sa=D&amp;source=docs&amp;ust=1669954195936813&amp;usg=AOvVaw0Sst7k4_6MqOopos58NnEK" target="_blank">Anheuser-Busch</a> and <a href="https://agfundernews.com/as-regenerative-agriculture-takes-root-lets-hold-corporates-accountable" target="_blank">Molson Coors</a>. So drink up — at least next holiday season, as there’s a chance the moments you choose to imbibe will be a smidge more sustainable.

Image credit: Leon Kaye

Start Planning Your 2023 Holiday Cocktails Menu Now — Suntory Is Investing in Regenerative Agriculture

A white paper put out this month by the Clean Energy Council of Australia is calling for a <a href="https://www.theguardian.com/environment/2022/nov/29/evidence-grows-of-forced-labour-and-slavery-in-production-of-solar-panels-wind-turbines" target="_blank">“certificate of origin” on renewable energy components</a> such as wind turbines, solar panels and batteries while exposing evidence that the industry is riddled with forced labor. While modern-day slavery is an ongoing problem across supply chains in a wide variety of industries, the ramp-up in renewables needed to reduce emissions worldwide threatens to make it worse. What’s more, while decarbonization is being hailed as a form of environmental justice, that can hardly be the case if the transition is built by people in forced labor.

The report, <a href="https://assets.cleanenergycouncil.org.au/documents/resources/reports/Addressing-Modern-Slavery-in-the-Clean-Energy-Sector.pdf" target="_blank">Addressing Modern Slavery in the Clean Energy Sector</a> – which was produced in conjunction with the law firm Norton Rose Fulbright – focuses on Australia’s obligation to transition responsibly, but its lessons can still be applied worldwide. Australia has <a href="https://www.theguardian.com/australia-news/2022/oct/31/renewable-energy-contributes-record-687-of-power-to-australias-main-grid-for-brief-period" target="_blank">more than doubled</a> its peak renewables output versus fossil fuel sources in the past five years and is currently on track to achieve a predominantly renewable grid by 2030. With much of the world rushing to convert as well, doing so demands a concerted action to protect vulnerable populations around the world. As the report points out, “The undisputed benefits of clean energy when it comes to climate change does not absolve the industry of its impacts in other areas.”

Modern day slavery is defined by the report as: “any situations of exploitation where a person cannot refuse or leave work because of threats, violence, coercion, abuse of power or deception.” Australia’s Modern Slavery Act includes traditional servitude and slavery as well as “the worst forms of child labor, forced labor, human trafficking, debt bondage, slavery-like practices, forced marriage and deceptive recruiting for labor or services” in its definition and requires mandatory reporting and mitigation of suspected slavery in the supply chain by businesses bringing in over $100 million annually. However, the system is hardly doing all that it could considering the lax compliance and lack of financial consequences — hence the need for oversight through a labeling or certification program.

According to the Clean Energy Council, there are three major areas of concern where accusations of modern-day slavery within the global renewables industry's supply chain appear to be well-founded: the production of polysilicon and solar panels in Xinjiang, China, balsa wood harvesting in Ecuador and cobalt mining in the Democratic Republic of the Congo (DRC).

Forty to 45 percent of solar grade polysilicon comes out of the Xinjiang Uyghur Autonomous Region in China, where 2.6 million people who belong to ethnic minority groups in the area face work programs as a part of the government’s <a href="https://www.triplepundit.com/story/2022/un-report-modern-slavery-china/752971" target="_blank">re-education and internment</a>, according to allegations by non-governmental organizations. The Chinese government has not allowed independent audits or investigations into the accusations but, due to the proclivity of polysilicon from the Uyghur region, the report hypothesizes that it is highly likely that forced labor will enter the supply chain in Australia via solar panels. Realistically, the same can be said for every country that is currently working on a transition to renewables.

Balsa wood from the Ecuadorian Amazon, which is used in wind turbines, is another area of concern. The Clean Energy Council reports that laborers have been working under very poor conditions, with a portion of their pay coming in the form of drugs or alcohol instead of cash. And, as deforestation worsens, instances of worker exploitation, coercion and modern-day slavery increase.

Lithium-ion batteries are an integral part of the renewables transition and cobalt is an integral part of those batteries. The DRC <a href="https://investingnews.com/where-is-cobalt-mined/" target="_blank">supplies 70 percent</a> of the world’s cobalt, 15 to 30 percent of which come from the small-scale mines that employ roughly 250,000 people, 35,000 of whom are children as young as seven. They earn less than $2 per day while working in hazardous conditions, without the proper protective gear, with many of the workers meeting the definition of modern slaves.

The scale at which the energy transition is occurring threatens to increase incidences of modern slavery in certain regions. As such, the report recommends certifications at each level of the supply chain. Such oversight would aid in limiting the sale of components made through forced labor, thus forcing suppliers to fix their labor practices or risk losing markets while protecting countries from importing goods produced by slave labor. “We need to see industry, government, the financial sector and civil society working together to provide access to competitively costed, slavery-free renewable energy,” Dr. James Cockayne, the anti-slavery commissioner at Norton Rose Fulbright, said in the <a href="https://www.theguardian.com/environment/2022/nov/29/evidence-grows-of-forced-labour-and-slavery-in-production-of-solar-panels-wind-turbines" target="_blank">Guardian</a>. “If we don’t, modern slavery risks significantly complicating the just transition to a decarbonized economy.”

Image credit: <a href="https://unsplash.com/photos/ag9_bCMbxY8" target="_blank">Filipe Resmini</a> via Unsplash

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We report the business case for sustainability.

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