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History will look back at 2015 as a crossroads in America’s adoption of sustainability. It was a year that saw milestone steps toward the adoption of a low-carbon economy with the Clean Power Plan and the COP21 global agreement. The real milestone event of 2015 was California winning world economic growth leadership while also reducing emissions. The first article in this two-part series documented three 2015 mega-trends that are reshaping our country's trajectory toward human health, environmental and economic sustainability.

This second article profiles the 2015 milestone steps created by the millennial generation, our national weight crisis and corporate social responsibility's growing role in determining business success that are now the driving forces behind the emerging $250 trillion green economic revolution.

Millennials emerge as the driving force for the green economic revolution

2015 marked the milestone emergence of the millennial generation as the driving force behind the green economic revolution. Their demand for more sustainable products is reshaping commerce where software is sold as a service, products are shared and a green supply chain is a marketing necessity. Millennials, along with moms, are using their buying power to reshape the food industry around sustainably-sourced, clean food.

A 2015 millennial milestone event was this generation's new position as the United States' largest employed demographic group. Research released during 2015 found that millennials, unlike any other generation, expect CSR to be part of their job. This expectation is pushing commercial real estate's adoption of smart building designs using collaborative workspace along with increased investments in onsite solar systems, energy efficiency and smart building technologies.

By 2017 the millennial generation will be both our country's most employed demographic group and our country's largest consumer group. Future business success now hinges on satisfying the millennial generation's sustainability expectations.

National weight crisis

2015 provided further documentation that, for the first time in history, our health is threatened by our weight. We are in a national weight crisis. No generation is immune. Seventy-two percent of baby boomer men and 67 percent of this generation’s women are overweight or obese. It is now projected that 50 percent of Generation Z, the first generation born into the 21st Century, will be obese during their lifetime.

Encouragingly, 2015 saw a milestone where Costco became America’s largest retailer of organic food. Healthier food sales are now growing at three times the sales growth rate of less healthy food. Consumers are increasingly leaving the grocery store center aisles and fast food drive-through windows in search of foods that are labeled clean, organic, gluten-free and sustainably sourced.

Even so, a new lifestyle paradigm is required. Similar to the consumer search for sustainable products, we are in a national search for how to have fun while doing right by our health and the environment.

Growing link between CSR and business success

In 2015 Nielsen released research that found 66 percent of surveyed consumers say they will pay more for products and services that come from companies that are committed to positive social and environmental impact. The business bottom line is that adopting corporate social responsibility (CSR) is the path to growing sales without damaging price competition.

2015 was a watershed in how businesses compete. A business can buy customers with price discounts. They can win customers by selling highly authentic products that are produced and delivered through transparent business practices. In 2015 corporate social responsibility moved from its historical niche role to become a driver in how businesses win and retain customers, most especially during today's intense price competition.

2015 accelerated the path along the green economic revolution

The following six 2015 mega trends accelerated the adoption of the Green Economic Revolution that delivers goods and services costing less and delivering more as measured in human health, environmental protection and economic growth:

Low-carbon economy. 2015 saw the achievement of economic growth and reduced emissions. California has turned global warming into an economic growth engine driving its economic success by delivering low emissions technologies that are price competitive with fossil fuels. California' success, along with the launch of the Clean Power Plan and the COP21 agreement, gave birth in 2015 to the low carbon carbon economy.

Solar price-competitiveness. 2015 saw solar power gain price competitiveness with fossil fuel generation. 2015 was also the year battery technologies began their path toward price competitiveness through increased economies of scale. 2015 was a launch year for an energy future where renewable energy and batteries will be the core technologies for our buildings and cars.

Cities default to green. Cities cannot wait any longer for national governments to adopt sustainable public policy. As a result, city leaders around the world are aggressively innovating in search of sustainable solutions to pollution, congestion and food porn. Their path toward "defaulting to green" is now a global innovation engine driving adoption of sustainable technologies and public policy.

Millennials drive the green economic revolution. The millennial generation is displacing the baby boomer generation in terms of employment and buying power. This mega shift is driving a green economic revolution. Today, businesses must incorporate CSR into job tasks to successfully recruitment millennials. Going forward, millennials will push CSR from a niche staff function to a core product design attribute.

National weight crisis. Food is increasingly becoming the path for initial consumer adoption of sustainable best practices. Industrial foods taste great, cost less and are the basis for a weight crisis that has delivered a diabetes epidemic and soaring health care costs. This ticking time bomb is exploding and only consumer purchases of clean and sustainably sourced foods will prevent a devastating denotation.

CSR is now core to business success. 2015 provided the evidence that CSR wins customers. It is the path out of the margin destroying price competition that continues to depress our economy. Companies like Unilever get it and are growing revenues and profits by incorporating CSR best practices in product designs and business operations. 2015 leaves us with the question of how quickly the majority of businesses will see CSR as the marketing path to winning and retaining customers.

Image credit: Pixabay

You could be honored as Masdar's guest VIP blogger and win an all-expense-paid trip to Abu Dhabi Sustainability Week in mid-January, 2016. Enter Masdar's Engage blogging contest, and write a response to this prompt: Describe how government and businesses can cooperate to build a sustainable economy.

Businesses look for governments to implement policies that can provide a framework and guarantee economic stability, so that the private sector can plan for the long term.

• Should governments issue more regulations in order to secure a more sustainable future? Must financial incentives be available in order for next-generation technologies to thrive?


• Do we need programs that foster innovation and encourage more research and development, which, in the long run, can help solve future risks posed by climate change?


• Or should there be a more laissez-faire approach, as it is up to businesses to adapt to changing circumstances?

Be creative! The aforementioned topics are just a few examples of ideas that could provide solutions for climate change over the next 15 years. There is not a “right answer,” but the best response to this year’s question is one that offers a well-reasoned and logical approach for what almost everyone agrees is one of this century’s most pressing challenges.

The winning entry will clearly describe how government and business can cooperate in order to allow current and future solutions for climate change to scale and succeed, and therefore, play a significant role in limiting the increase in global temperatures to 2 degrees Celsius by 2030.

Guidelines to writing the winning post:

The scientific community in general believes that increases in global temperatures must be limited to 2 degrees Celsius in order to mitigate the risks that could result from climate change. While governments and international organizations have long been at the vanguard of finding solutions for climate change, recent trends have shown that the global business community has become more vocal and proactive about the need to shift toward a sustainable economy by 2030.

Masdar’s 2016 blogging contest is all about how business can cooperate with government on addressing climate change and help society transition to a sustainable economy within the next 15 years.

See last year's winning entry here.

Visit Masdar's site for more info and terms of the contest. 

Entries are due January 4th!

We hope to see YOUR post in the competition! Good luck! 

Let me start out by saying that I have a pretty awesome job: the kind of job that lets me learn new things every day, impact causes I care about and even get paid to hike in Peru. But the local guides who lead curious travelers along those cliffside trails through ancient ruins may just have me beat. 

In Peru, tourism is a historic and lauded career path. As Ernesto Ore, lead guide for REI Adventures' Sacred Valley tours, pointed out: Tour guides have worked in Peru since Incan and pre-Incan times, and children learn about the profession as early as elementary school.

Locals must attend college for five years to gain certification to work as a guide. They're required to learn one foreign language, usually English. But many, like Ore, choose to learn more (he speaks five languages, including English, German and Italian).

Most guides work on a quasi freelance basis, often contracting their services out to several local tour operators. For responsible travel companies based outside of the country, arguably the only way to go is to partner with one of these in-country operators, as this ensures tourism dollars reach the local economy. REI Adventures takes things a step further by partnering with local operators, then hand-picking guides who have a love for outdoor adventure.

Ore, one of 318 local guides REI partners with around the world, said he first decided to become a tour guide in primary school. At a cafe in Cusco, I asked him if his career path was all he expected it to be. "It's actually more than I expected," he replied with a smile. "Being a local ambassador for visitors, it's a nice feeling."

Like many REI guides, Ore has a long history with the company. For 10 years, he's trekked the Sacred Valley and Machu Picchu with around eight REI tour groups a year, but he says it never gets old. "I'm happy to share my culture," he told me, "and I think I have the best job in the world."

Making outdoor careers possible

REI Adventures is selective about its partners, focusing on operators that emphasize ecotourism and the outdoors. "We really seek out companies and guides that align with REI's values, and it makes a big difference in the experience," Cynthia Dunbar, general manager of REI Adventures, told TriplePundit. "We have a long-term philosophy around really working with people who live in, love and know the places we visit like the back of their hands."

In turn, guides say the outdoor company is open to advice and feedback to further improve the experience for travelers. "We can recommend something and make suggestions," said Marco Serrano, an assistant guide for REI Adventures' Sacred Valley tours. "And they will listen."

Serrano, 25, is fairly new to the biz and has only been guiding for two years. But he told me he's already hooked, adding that the career allows him to "work outdoors" and "show people the culture" -- two things he loves to do.

This is really what it's all about, Dunbar told 3p: "helping build community, whether it's through your professional career path, whether it's your passion in the outdoors, whether it's supporting the outdoor community through our nonprofit, [REI] is really committed to all the ways that people can get outside and supporting them in a positive way."

"I can't say the number of times I've been with guides and they just look and me, smile, turn around and say, 'How do you like my office?' And you're looking at this beautiful mountain or vineyard or wherever you happen to be hiking, biking or climbing. It's pretty cool."

Full-scale employee engagement

Every year, REI calls on its field partners, along with employees, co-op members and customers who have taken an REI Adventures trip, to nominate their top local guides of the year. Using a rating system that weighs customer reviews, seniority and other factors, the company then selects five to seven guides for the year's top brass -- which carries a host of awesome perks along with bragging rights. Dunbar and Ore, who was voted a top guide in 2014, explained further.

Top guides are flown to REI's headquarters in Seattle, where they meet with company executives and, of course, get outside for outdoor activities in the area (Ore's highlight was a hike on Mount Rainier). REI rents a house so all of the guides can stay together, and helps them secure visas and travel documents if necessary. Each guide also receives a gift card and employee discount to shop at the outdoor gear company's Seattle store. The trip culminates with a celebration at REI's flagship store, where execs present guides with their awards in front of a crowd of co-op members and loyal REI customers.

Although these hardworking men and women spend their lives showing travelers their hometowns, many don't have the cash or spare time to travel themselves, especially to the U.S., Dunbar told 3p. "For several of them, it's their first time out of their home country."

While it may seem simple to some, REI Adventures' interactions with its in-country guides represent a case study in full-scale employee engagement. While engagement within a company's own four walls is now a must-have, most firms don't bother to think about contractors and other stakeholders. Forward-thinking companies, both inside and outside of the travel industry, would likely do well to take notice and consider what they can do to engage and reward employees and contractors all the way down the supply chain in 2016.

Image credit: Mary Mazzoni

There was much to be pessimistic about in 2015 in terms of people, planet and business success. 2015 generated further documentation that the world is hot and is getting hotter. It also generated increased evidence of our national, and now international, obesity and diabetes epidemic. Seven years after the Great Recession, our national and world economies are still struggling to achieve sustained growth. The numbers suggest it will be hard to be optimistic about 2016 based on 2015.

However, 2015 did see milestone events that advanced sustainable solutions. It provided additional confirmation that the green economic revolution is real and growing even if the word 'green' may be fading in use as a description for triple-bottom-line results. 2015 was a milestone year for growth in economies of scale for renewable energy technologies that will enable a low-carbon world. It saw consumers buying record volumes of clean food to address their fears over food safety and health. Based on this evidence, I now project that $250 trillion of investment and commerce will occur during the 21st century that will reshape the world’s trajectory toward economic, human health and environmental sustainability.

This article is the first of a two-part series. This first article focuses on the birth of the low-carbon economy, solar energy’s milestone price-competitiveness and the emergence of cities as sustainability pioneers. The second article focuses on how millennials, our national weight crisis and corporate social responsibility (CSR) is reshaping, and greening, our economy.

The birth of the low-carbon economy

In 2015, the concept of a low-carbon economy achieved milestone acceptance levels among businesses and governments. The COP21 agreement established a working framework for the development of a global low-carbon economy. COP21’s economic challenge, and opportunity, will be whether a global price for carbon emerges at the world’s pump, meter and cash register.

What may be the larger 2015 low-carbon economy milestone is the success California has had in decoupling emissions and economic growth. California’s economic growth is the envy of the nation and the world. California is the headquarters for the companies that are reshaping the world including Google, Apple, Disney and Amgen (Applied Molecular Genetics). As significantly, California set a 21st-century milestone by achieving leadership economic growth while also reducing emissions.

The emerging path toward a low-carbon economy was also confirmed by the International Energy Agency. It reported that, for the first time in modern history, the world achieved economic growth while also reducing greenhouse emissions. It may be that the world will look back at 2014-15 as the end of the Industrial Age and the birth of the low-carbon economy.

Cities

Cities are where most of us live. They have also become the 21st-century battleground for mankind’s adoption of sustainability. City mayors and their staff no longer have the luxury of debating climate science. Unfortunately, Beijing is now the poster child of a city that is suffering economic loss and a human health crisis as a result of unsustainable decisions to rely on coal-fired power plants and vehicles running on fossil fuels.

2015 also saw cities around the world invent sustainable best practices to improve human health and grow their economies. An emerging trend that surfaced in 2015 was a default-to-green public policy. Default-to-green turns traditional public policy of accepting the lowest bid on its ear with public policy that makes sustainable procurement the supply choice. Less sustainable supply choices can only be procured through written justification and special approval.

Solar wins on price!

Solar price competitiveness was the renewable energy story of 2015. In Texas, the prices submitted to the city of Austin’s renewable energy RFP shocked the electric utility industry. The average solar bid price was 4 cents per kilowatt-hour. There were bids priced even lower than this average. Even with natural gas prices hovering around $2 per MMBTU, the price for zero emissions solar is a disruptive force reshaping the electric utility industry.

The 2015 Clean Power Act will further accelerate the electric utility industry’s shift away from coal. This act mandates utility reductions in carbon emissions by 32 percent by 2030. Low solar and wind power prices along with increased environmental regulations are pushing utilities to reconsider their traditional solution of displacing coal with natural gas. 2015 saw progressive utilities actively reconceptualizing their grids to displace both coal and natural gas with a combination of wind/solar energy plus battery storage.

However, the electric utility industry’s path toward sustainability was not all positive. The electric utility industry had milestone success in 2015 protecting their revenues against customer-owned solar. 2015 saw utility after utility successfully convince their regulatory bodies to limit, undermine or block net-metering economics. The rate redesigns won by the utilities have eroded the economics of customer-owned solar through higher fix charges, lower payments for solar energy and increased pricing complexity. This has made it more difficult, or even unlikely, for customers to successfully figure out the economics of investing in solar for their homes or businesses.

However, in jurisdictions like California where the regulatory commission confirmed net metering, customer-owned solar is changing consumer behaviors. Customers with their own solar system are increasingly leasing electric cars -- using the savings from their utility bills to pay for the leases and lower solar electricity costs to save at the pump. This growing class of solar customers are dramatically lowering their carbon footprint to achieve equally dramatically lower costs.

How millennials and our national weight crisis is shaping business success

What emerged during 2015 was the growing role that millennials, our national weigh crisis and CSR is having on a business' ability to win customers and retain work associates. The second part of this two-part article focuses on these three 2015 mega-trends that are changing the path to business success.

Image credit: Pixabay

By Anum Yoon

With all eyes on the COP21 World Climate Summit in Paris this month, the world watched as global leaders met to try to affect lasting change and create a binding agreement for reducing carbon emissions.

French President Francois Hollande called the event “the last chance to save the world,” and though his words are dramatic, they may not be far from the truth. Scientists are concerned about rapid temperature rise on the planet and warn that the consequences of another 2-degree rise could be disastrous.

Economic leverage

Apart from relying on governmental institutions to act, one way in which concerned citizens and institutions around the world are seeking to slow climate change is by investing in green energy businesses and companies that do not pollute the environment or deal in damaging fossil fuels. For example, universities are divesting their endowments of companies that sell fossil fuels, and conscientious investors are seeking to retool their own portfolios to seek out green investments.

The boom in green investing comes with a major caveat, though: Several of the most popular mutual funds designed to appeal to eco-conscious investors include holdings in major oil and gas companies, according to data from Reuters.

Top-performing climate-conscious mutual funds

Of the 20 largest mutual funds designed to address climate change, nine had positive rates of return for 2015, as of November. The top five performers earned between a 9.1 and 15.8 percent return and did not include any investments in fossil fuels. These top funds are, in order of performance:

• AEGON Climate Change Reszveny ba: 15.8 percent


• Schroder ISF Glo Climate Change Equity A Acc: 13.7 percent


• Nordea 1 – Climate and Environment Equity BP EUR: 13.2 percent


• Jupiter JGF Global Ecology Growth L EUR Acc: 10.8 percent


• RobecoSAM Global Small Cap Equities EUR B: 9.1 percent

Investors in these top mutual funds are getting what they paid for and proving that environmentally-minded investments can also earn impressive returns.

Climate-focused mutual funds with oil and gas investments

Of the same 20 mutual funds, six were found to contain investments in oil and gas companies. Of these six, only two had positive returns so far in 2015, while the other four experienced net losses as of November. The mutual funds with fossil fuel investments include:

• Mirova Globael Transition Energy Equity Fund RAE: 8.2 percent


• Climate Assets GBP R Acc: 0.3 percent


• Jih Sun Anti-Global Warming Fund: -0.5 percent


• Shinko Global Warming Prevention Equity Fund: -2.2 percent


• Nomura Global Climate Change Fund: -3.5 percent


• HSBC GIF Global Equity Climate Change AC USD: -4.4 percent

These funds held anywhere from 1.27 percent to 5.79 percent of their investments in fossil fuels.

Check the prospectus to understand the fund’s goals

A careful reading of any mutual fund’s prospectus will reveal all of its investments, and this is especially important for the rising class of conscientious investors carefully considering the ethical pros and cons of their investments. If the investors' goals are that zero of their dollars go to companies that produce oil and gas, they must look beyond the potentially misleading name of the fund and read the prospectus in full. This due diligence is important, as the names of mutual funds are not regulated.

It’s also worth considering the overall goal of the fund. For example, the HSBC fund listed above states in its prospectus that it strives to invest in and support “companies that aim to be the market leaders in their respective sectors at managing their businesses in the face of climate change.” Given that goal, fund managers feel comfortable choosing to invest in oil and gas companies that are taking steps to address climate change in their practices, perhaps by reducing waste and increasing efficiency in other areas of their supply chain.

Market leaders might be oil and gas companies doing more than their counterparts for the environment, though it’s difficult to tell from the prospectus alone how high the bar is set for leadership in this area. In a sector rife with pitfalls for investors, some eco-conscious investors may decide that encouraging companies to try harder is a worthy goal for their money.

The bottom line

As always, individual investors should practice due diligence and thoroughly research mutual funds before buying shares. Knowing how well a given fund performs in both its monetary returns and its ethical makeup is key to getting the most out of any portfolio.

In the end, it’s up to each person to decide for themselves whether a better strategy is to avoid putting money into fossil fuels entirely, or to reward oil and gas companies who are making a good-faith effort at cleaning up their acts. Regardless of which philosophical take is preferred, conscientious investors are changing the face of the market in ways that will continue to resonate in the future.

Image Credit: Life of Pix

Anum Yoon is a writer who is passionate about personal finance and sustainability. She often looks for ways she can incorporate money management with environmental awareness. You can read her updates on Current on Currency.

A majority of Republicans support climate action. Unfortunately, the Republican presidential candidates haven't gotten the memo.

One of the most striking things at the Paris UNFCC COP21 Climate Change Conference, which I and several other TriplePundit team members attended earlier this month, was the complete lack of climate denying. Every delegate, NGO representative, business leader or media member understood that climate change was a real, serious and immediate threat to the global economy.

It was a stark contrast to what you hear sometimes in America, where the political discourse on climate and the environment is far more divided. Turn on the nightly news and when climate change is mentioned, it is likely that there is a denier ready to speak. But it turns out that years of efforts by scientists, NGOs and, yes, businesses to raise awareness of the threat of climate change is making a difference, even among Republicans. That is according to a recent poll from Reuters/Ipsos, which found that more than half of all Republicans supported President Barack Obama's climate pledges in Paris.

What's more, the polls found that 58 percent of Republicans are willing to take individual steps to help the environment.

The poll's findings come in stark contrast to the opposition to climate action from Republican hopefuls in the race for the party's presidential nomination. One candidate, Texas Sen. Ted Cruz, promised this week that he would pull out of the Paris Agreement if he was to win the presidency.

It's quite sad. If you listen to the Republican presidential debates, whenever climate comes up (and it's not often), the candidates jump over each other to be the most backward-facing. This isn't a surprise for a party whose lead member of the Senate Environment and Public Works Committee once brought a snowball into the Senate as proof that climate change was not real.

Thankfully, these Republicans had no voice in Paris, and thus far President Obama is paying them no heed. If this poll is right, then it's just a matter of time before Republican leaders begin to represent their constituency. If not, expect a tough time for the party this coming November, because campaigning against reality is never a winning recipe.

Image credit: Iowapolitics.com via Flickr

Editor's Note: To learn more about Bill's thoughts on breaking through silos at your company, check out this post. 

By Bill Hatton

 

Sandy Nessing, managing director of sustainability and EHS strategy and design for American Electric Power, explains the keys to breaking out of silos: “Communication. Appreciation. Listening. You need to have all three to break down silos. You need to build trust with people, that they know you have their back. You have to listen to what they are saying and what they are not saying as well. You need to learn about their job.”

American Electric Power (AEP) is building numerous transmission lines throughout the country, and a big challenge is siting, i.e., getting easements for rights of way.

“You have to work with landowners, who don’t like it when you tear down trees and rip up the land; even though you restore it after, it’s still a huge issue in dealing with communities.”

The groups involved:

• Senior management has 4- to 6-percent growth goals, and more than half its capital goes to the transmission business. So, building transmission lines is a high priority.


• Forestry, which manages the rights of way, is primarily concerned about reliability. Trees knock out power lines; forestry doesn’t want that to happen.


• Environmental services, which is worried about permit compliance and conservation, as well as restoring the land afterward. Part of their job is to keep regulators and community members happy.


• Transmission outreach and siting teams. Their job is to build the lines: “Their job is to put that steel in the ground and get it done,” says Nessing.


• Community members and landowners, who prefer as little disruption as possible.

“Forestry is very concerned about reliability,” Nessing says. “Because if a tree comes down and hits a transmission line, it could mean fines of as much as $1 million a day, depending on what kind of line it is. So it’s a huge risk to the company. If we are not being good stewards of the environment, there are reputational risks as well as financial risks. The foresters were not interested in what the environmental team had to say about ‘We can restore the land, one that attracts habitat, we can put the land back better than what it was.’ Forestry was just focused on reliability of those lines. They used to joke, ‘blue sky, you take it right down, you scorch it, so there’s absolutely no risk of a tree growing into a line.’ We’ve gotten away from that, thankfully.”

Forestry was where a key obstacle was in breaking free of silos, and thus creating a more environmentally friend solution that would keep the other groups happy.

“Forestry was where the obstacle was,” Nessing says. “If I could get through to forestry, then I could everybody to the table and I could get something done.”

Nessing called up the head of the forestry to ask what the issues were. “I called him up one day and said, ‘I have this idea about working with the Wildlife Habitat Council,’ and he just about had a heart attack first. I spent an hour with him on the phone.”

She then visited the head of forestry to get a walkthrough of the processes and concerns. She learned about forestry, business returns and budget issues, and even went up in a helicopter one afternoon while they patrolled transmission lines. Key: Listen and get inside the heads of that business unit.

“It was really beneficial because I earned his trust--he knew that I wasn’t going to throw something at him that would put reliability at risk,” Nessing says. “He was then willing to come and talk to the environmental services group and I worked with them one on one as well and helped them understand where [forestry] was coming from, and then brought in the transmission team. As a result, we did work with Wildlife Habitat Council and we developed a conservation toolkit the foresters and the outreach teams can use when they are siting transmission lines. So the teams came together for that project.”

Nessing spoke at a Nov. 5 conference organized by Skytop Strategies, a sustainability events firm headquartered in New Paltz, NY.

Image credit: Flickr/Eirik Refsdal

Bill Hatton is a veteran business-to-business journalist who has written on EHS, compliance, legal and management topics for 25 years. He can be reached at billhatton at mountainvieweditor dot com.

Environmental injustice can occur anywhere, and this Christmas, a gated community of 30,000 residents in the scenic hills of Los Angeles proved this point.

The community of Porter Ranch, known for its comfortable upscale suburban setting of culs-de-sac and family-friendly neighborhoods, has been besieged by the effects of a natural gas leak from a Southern California Gas Co. (SoCalGas) facility in Aliso Canyon, just outside the development. Thousands of residents have been complaining of headaches, nosebleeds, vomiting and nausea from the atmospheric leak, which is caused by a ruptured pipe more than 7,000 feet below the earth's surface. The impact on the community has been massive enough that it has garnered the attention of environmental activist Erin Brockovich (best known for a landmark environmental justice case against Pacific Gas & Electric in the 1990s).

"At this rate," says Brockovich, "in just one month, the leak will have accounted for one-quarter of the total estimated methane emissions in the state of California."

So much for new clean air strategies.

Last week, the Los Angeles city attorney's office negotiated an agreement with the company to step up its response to residents' demands for relocation and aid. Under the agreement, SoCalGas has 72 hours to find housing for any families that request relocation. It must also provide shelter for pets if necessary and provide security patrols while the houses are uninhabited.

The company initially contested a court or order requiring relocation, on the grounds that it was already offering that assurance. But residents told Brockovich they were put on a priority list and had to wait weeks to get a response.

The company is also being sued by residents, who say they were sickened by the gas emissions and were forced to pay for their own relocation. The actual dollar amount of the suit won't be tallied until the leak is stopped and the families are able to move back to their homes. At this point, SoCalGas says it may not have the leak fixed before March 2016.

And the gas company's troubles don't stop there. The city is investigating the matter and plans to depose company officials over the scandal, which has also led the local school board to close two schools for safety reasons. With as much as 110,000 pounds (50,000 kilograms) of gas being emitted per hour, the Federal Aviation Administration has also imposed a no-fly zone over the area to reduce the chance of pilots and passengers becoming affected by the plume.

Of course, the question that seems salient at this point is not just why it has taken two months for SoCalGas, the city attorney's office and CARB to prioritize this crisis, but why impact from environmental problems seem to be growing in size as well.

On the other side of the country, the city of Flint, Michigan, and the ongoing investigations into the lead poisoning of its residents offer another example of an environmental crisis in the making. Like the impact of SoCalGas' ruptured pipe leak, the number of victims in Flint is now at crisis proportions, with thousands of children being diagnosed with lead poisoning (an often irreversible condition). It took more than a year of health reports from doctors, along with an election promise and the concerted effort of one incoming mayor, to declare a state of emergency.

Fortunately, SoCalGas is attempting to address the leak quickly. But the size and location, the company says, may lead to months of effort (and months more of methane emissions), rendering much of the sedate community that is best known, ironically, for its iconic role as the location for Steven Spielberg's breakout movie "ET" as an environmental no-man's land for upscale suburbans who relish the cleaner air and quieter life of Los Angeles living.

https://youtu.be/7KB-9UBCJUY

Image credits: 1) Earthworks; 2) Mike Spasoff

By Bill Hatton

Silos occur naturally in organizations, and companies struggle to get information out of a silo and into a broader organization. A lack of information on sourcing, for example, can cause a company to wake up one morning and find out a supplier has used conflict minerals or child labor. It’s not intentional, but the information was hidden from decision-makers’ views.

One of the biggest reasons for the corporate social responsibility (CSR)/sustainability movement was to open up silos and collect data across entire organizations and supply chains. It was step one: Let’s just find out what we are doing. Then this information is compiled in corporate responsibility reports, so all stakeholders can learn what is happening across the organization.

Lesson learned

As the sustainability and CSR movements progress, one lesson people are learning is that even these CSR reports (and the people who create them) can find themselves in a silo. Investors, for example, want financial reports. The CSR report can easily be seen as “nice to have” instead of “need to read” — even if stakeholders in fact really need to read the CSR report to get a full assessment of the material risks a company faces.

Sandy Nessing, managing director of sustainability and EHS strategy and design for American Electric Power, offers her company as an example: “The investor relations team said that the analysts and investors were grabbing the sustainability report for their disclosure on environmental performance and for the climate and policy positions.” That’s why American Electric Power has gone to an “integrated” report — combining the sustainability/CSR reporting and financial reporting in a single report.

Nessing spoke on a panel at a Nov. 5 symposium, entitled “Integrated Thinking: Drivers and Evolving Best Practices,” organized by sustainability event-programming firm Skytop Strategies and hosted at the Edelman public relations company’s office in lower Manhattan.

“We have been doing an integrated report for six years now,” Nessing said. “We’re entering our tenth year of reporting overall. We call it a corporate accountability report — it made a lot of sense for us to integrate both our financials and our non-financials.”

Six silos

What causes silos? “The term silo has been used for more than 30 years,” said Susanne Katus, vice president of business development for sustainability data software-as-a-service provider eRevalue of London. Katus hosted a panel that offered six answers:

1. Functional. This is the classic definition of a silo. People are busy with their own tasks and don’t know what others are doing. Finance and marketing are busy with their own priorities. Information-sharing is limited across the functions.


2. Groupthink. People get locked into one mindset – work teams don’t know what they don’t know; there are unknown unknowns; there are potential allies available, but no one knows they are out there and no one asks. McDonald’s, for example, didn’t know it had allies when it began to look at sourcing some of its products in a more sustainable way, said co-panelist James Reeves, Vice President, Business & Social Purpose, Edelman.


3. Temporal. Executives think in terms of quarters. The city of Chicago, for example, has a 50-year sustainability plan. The need for immediate results can place medium- and long-term plans outside the silo, until immediate priorities for financial performance are met.


4. Problem/solution. Companies think some problems are so big that one company can’t take it on, e.g., climate change. The idea that you can’t change it, that it’s too big, and thus remains outside of your locus of control, can became a problem/solution silo as you naturally gravitate toward problems you can solve. Again, this misses a potential opportunity to find allies—for climate change, that means a broad range of allies—to address the problem.


5. Political. “It’s not Republicans versus Democrats, but about how you perceive the role of corporation in society,” explains Reeves. “I’ve seen a spectrum of people in companies – people who are in opposition to the spirit of sustainability, people who are toned down a bit and sort of indifferent of the role of sustainability in business, and then people who are completely unaware. When I was at Office Max, there was a culture gap, especially in the ‘aware’ category. At Office Max, the first CSR report helped break out of it.”


6. Us-versus-them mindset. This is a tendency toward stereotyping the opposition. We are over here in sustainability and over there are the business units. This silo includes seeing people (and potential allies) as opposition. Reeves offer one solution exemplified during stakeholder dialogue with McDonald’s. “They brought in the stakeholders to react to the sustainability strategy one year prior to it being launched publicly. And that served to acculturate executives to a broader view, but also changed the way external stakeholders were viewed.”

Take home: CSR and sustainability professionals need to be on the lookout for the specific type of silos, whether they are in one themselves, or if they see others cut off from one another. Once you can see it, you can address it.

Image credit: Flickr/Doc Searls

Bill Hatton is a veteran business writer and the former editor-in-chief of Corporate Responsibility Magazine. He has covered management, legal, compliance and EHS topics for more than 25 years. He can be reached at billhatton at mountainvieweditor dot com.

Whether or not driverless cars become the future — and some describe the idea as “pure science fiction” — the concept is catching on with both the automakers and the general public. Companies from Mercedes to Ford Motor Co. are installing driverless features into their cars, with several automakers promising to deliver driverless cars within a decade. Indeed, such a development is a huge shift to the 100+-year-old idea of car ownership: namely, independence and flexibility to go where you want, when you want. Nevertheless, driverless car technology could help reduce the scourge of the estimated yearly 1.2 million deaths blamed on automobile accidents. The evidence also suggests driverless technology could have long-term environmental benefits.

Google is behind much of the hype surrounding driverless cars. The Internet search giant claims its engineers have driven over 1 million miles testing this technology. Toyota Priuses, Lexus SUVs and Google’s VW bug-like prototype have hit the streets in Silicon Valley and Austin, Texas.

Detroit is certainly not going to be left out of the slow but steady trend toward driverless cars. According to Yahoo Autos, Google and Ford are close to creating a joint venture to develop and manufacture cars that will use Google’s driverless technology. The collaboration will reportedly be announced at the annual Consumer Electronics Show next month in Las Vegas.

Ford has already been visible on the driverless car bandwagon for several years. Two years ago, the automaker revealed a driverless Fusion hybrid in partnership with the University of Michigan and State Farm. That car aims to function as a research platform by which engineers could study the legal, regulatory, technological and societal issues that will confront a future with driverless cars on the road. And this fall, Ford started testing a driverless car at Mcity, the University of Michigan’s test center for driverless cars and related automated transportation systems. Meanwhile the company has been working with Silicon Valley firms as its driverless car R&D advanced to what it describes as an “advanced engineering phase.”

Many consumers are still jittery at the thought of driverless cars, but in fairness this technology is still in its infancy. Companies have been more focused on the competitive race to release such an automobile by the mid-2020s instead of educating potential customers on driverless cars’ potential benefits.

In a sign that Google considers driverless cars more of a serious business venture than a publicity stunt, Bloomberg reported earlier this year that the driverless cars business unit will become part of Google’s Alphabet spin-off company. Ford and Google will surely have plenty of competition coming from all directions: Uber has clearly expressed its desire to replace its drivers with automated technology in the near future, and its test cars have been seen driving all over Pittsburgh.

A future of less road-rage and reduced angst while merging onto freeway traffic may very well occur sooner than many of us think.

Image credit: Google