Search

At a press conference on Wednesday at COP21 in Paris, representatives from the Rockefeller Brothers Fund, the California Senate, the World Resources Institute and the London School of Economics joined 350.org to announce that $3.4 trillion in assets are now committed to some form of divestment from fossil fuels.

May Boeve, executive director of 350.org, noted that some of that divestment is partial, divesting only from coal, oil, natural gas or some mix of the three, while other commitments are total divestment from all fossil fuels. With varying degrees of disclosure, the actual amount of money divested is difficult to track, but organizations pledging either partial or total divestment represent $3.4 trillion in assets under management.

Steven Heinz, president of the Rockefeller Brothers Fund, commented on the extraordinary acceleration of the movement in the 14 months since the fund announced its divestment plans in September of 2014, from $50 billion to $3.4 trillion.

Heinz attributes the expansion of divestment not only to its "moral imperative," but also to the "economic rationality" of risk management -- pointing to the growing number of pension funds, banks and other financial institutions increasingly divesting their portfolios away from fossil fuels.

Kevin De Leon, the president of the California senate, said that, as the seventh largest global economy, California's move from fossil energy investment and generation proves that decoupling works, citing the state's economic growth and shrinking emissions.

DeLeon sponsored Senate Bill 185, targeting $500 million for divestment in the state's pension fund. The legislation follows on the 2007 mandate from the California Energy Commission barring municipal utilities from operating any coal-fired power plants.

Pascal Canfin, former Development Minister of France and senior advisor for international climate affairs at the World Resources Institute, said the growing momentum in fossil fuel divestment rests on three pillars: ethics, financial pragmatism and regulatory framework reform.

Fund managers are required to disclose risk, Canfin said, and increasing "risk of liability" in fossil fuel investment creates a strong "incentive to divest."

Several new commitments surrounding divestment were announced today at COP21, including:

• 19 French cities have endorsed divestment ahead of COP21: 350.org will announce for the first time that it has secured commitments from 19 French cities, including Lille, Bordeaux, Dijon, Saint-Denis, Rannes, Ile-de-France and others.


• The French parliament has endorsed divestment: On Nov. 25, the French National Assembly adopted a resolution encouraging public investors, companies (especially those in which the state owns shares) and local authorities not to invest in fossil fuels anymore. The resolution is the first step to formalizing the policy as law.


• The French Ensemble Foundation will join European Divest-Invest: Jacqueline Délia Brémond, co-founder and co-chair of the French Ensemble Foundation, will announce that the foundation will join the European Divest-Invest initiative and divest its holdings from fossil fuels. Since 2004, the foundation has given over $28 million to environmental causes around the world.

Some of the most notable new announcements since Sept. 21 include:

• Uppsala became the largest city in Sweden to endorse fossil fuel divestment.


• Münster became the first city in Germany to divest completely from fossil fuels.


• Melbourne, the capitol of Australia, committed to go fossil-free ahead of COP21. In fact, Australia has seen a seven-fold growth in the divestment movement, from two councils divesting in 2014, to 14 divesting as of now. Together, these funds represent AUD$5.5 billion in assets under management.


• Oslo, the capitol of Norway, announced that it will divest its $9 billion pension fund (€8 billion) from coal, oil and gas companies, becoming the first capitol city in the world to ban investments in fossil fuels.


• Dutch pension fund PFZW announced it will divest from coal companies and reduce its investments in other fossil fuel companies. The fund has €161 billion of assets under management.


• The London School of Economics, one of the preeminent economics schools in the world, dropped all of its direct and indirect holdings of coal and tar sands, and all direct holdings of fossil fuel companies.


• Allianz, Europe’s largest insurance company, divested €630 million of its own capital investment portfolio from coal, and is reinvesting over €4 billion into wind energy over the next six months. This is one of the largest funds to make a commitment to divest from fossil fuels. Allianz tied its announcement to COP21, making the moral and economic case for investing in cleaner technologies


• APRA AMCOS, the biggest music industry organisation in the southern hemisphere, announced that it is beginning the process of divesting from all fossil fuels. APRA AMCOS distributed over $250 million in royalties to its 87,000 songwriter and composer members last year, making it a large cultural force for divestment.


• The London Science Museum announced plans to dump Shell Oil as a sponsor, amidst controversy and public pressure.


• In addition to the London School of Economics, five universities from the U.K. took action: Oxford Brookes University, University of the Arts London, University of Surrey and University of Sheffield divested from all fossil fuel companies; Wolfson College (Oxford University) divested from coal and tar sands. Fund manager CCLA, which manages investments for Birmingham City University, Cranfiled University, Heriot-Watt University, University of Hertfordshire, University of Portsmouth and University of Westminster excluded coal and tar sands from its investments.


• The first church in Germany, the Protestant Church in Hesse and Nassau, managing €1.8 billion, committed to drop investments in coal, oil and gas, too.


• Two weeks ago, renowned economists Thomas Piketty and Tim Jackson wrote a letter in the Guardian, calling on investors to divest from fossil fuel ahead of COP21.

Image courtesy of the author.

There is incredible optimism that the ongoing global climate talks in Paris will produce, finally, a strong climate agreement. That being said, there are still some serious barriers that need to be overcome, none more so than determining an equitable and transparent system for climate finance.

Why finance matters

Climate finance is, simply, figuring how how money will be distributed among countries around the world to ensure that we both mitigate emissions to achieve necessary greenhouse gas reduction, and also help poorer, more vulnerable nations adapt to the expected impacts of climate change.

Much rests on the ability of negotiators in Paris to figure climate finance. For example, no country may be more crucial to the success of the COP21 process than India. It is quickly becoming the next China, with a rapidly growing economy and rapidly growing emissions, currently ranked No. 5 in the world. India surprised many when it released its climate plan ahead of COP, with ambitious national goals including a goal of 40 percent non-fossil fuel energy by 2030. But this plan is contingent on a single factor: $2.5 trillion in global climate finance. Without international assistance, India will not embark on a cleaner path, and all the hopes of a global agreement coming out of COP21 will be doomed to failure.

India's argument is quite clear – they, and many developing countries across Asia and Africa, did not cause this problem. Historically, they are responsible for just a tiny share of the greenhouse gases that are fueling global warming. Why should they have to pay to mitigate emissions when they still have hundreds of millions in poverty?

Thankfully, there is strong sentiment that industrialized countries using fossil fuels must put in sufficient funds to help emerging countries both adapt to climate impacts, and move technologically toward low-carbon growth. The problem is that the mechanism for ensuring that these funds are both sufficient and equitably-distributed is still lacking.

"Wealthier, developed countries are coming forward with finance – but the finance they have committed, especially finance for adaptation, is not enough. We need a concrete plan so they can fulfill this commitment they made," said Samantha Smith, with the World Wildlife Federation's Global Climate and Energy Program.

For example, at a previous COP meeting in Cancun, Mexico, industrialized countries including the United States agreed to set up a Green Climate Fund that would, annually, provide $100 billion to developing countries to meet the challenges of adapting, and expanding, renewable energies. Five years later, and it is still uncertain how we will meet that goal by 2020. One of the key key discussions in Paris will be ensuring that the fund reaches its goal.

Adaptation vs. mitigation

Another issue is determining how to distribute this fund between the two key facets of climate – mitigating emissions and adapting to the climate change that is both expected, and in many parts of the world, already being felt.

There is a disproportionate amount of global funding going to mitigation. Part of this is being driven by the market. The rapid drop in prices for renewables has increased private-sector investment in green energy around the world as it becomes more financially sound. It is something we talk about quite often at TriplePundit – business going green just makes financial sense.

But, on the flip side, adaptation is much more difficult to make a business case for. There is a huge upfront infrastructure cost, and returns are distributed and hard to quantify. Yet, for the millions living along vulnerable coastlines in Bangladesh, the Pacific Islands or even Miami, this is a real threat that needs urgent attention. Otherwise, the world could see a massive rise in climate refugees that would dwarf the current crisis in Europe.

"Less financially-developed countries will continue to need technical and financial support from both the public and private sectors to meet the significant challenges they face," said Josh Sawislak, global director of resilience for AECOM, and a former member of the White House Council on Environmental Quality.

This will likely be the most contentious issue in Paris, one that could unravel the talks. It also makes it clear that COP21 will not be the end-all solution. It is a chance for the world to come together and set up a framework to finally begin tackling, head on, the greatest challenge of our generation. Key to that will be figuring out how to integrate climate finance into the next climate treaty.

Image credit: Wikimedia Commons

In today’s world, we need innovative solutions to help us anticipate complex demands across the globe. Water is strongly linked to global socioeconomic development, ranging from basic water safety, water quality and sanitation, to food supply and generation of renewable energy. The interwoven nature of these issues presents us with an ongoing challenge: to create feasible, smart and sustainable water solutions.

For centuries, Hamburg, Germany, and Rotterdam, Netherlands, have subsisted under the threat of rising sea levels, storm surges and floods. Now, as the water continues to rise, German and Dutch planners and engineers are forced to discover innovative ways to make these cities more resilient. They are experimenting with new ideas that fortify coastlines at lower environmental costs and learning valuable lessons that can be applied to vulnerable urban areas around the world.

Residents of these two great port cities have battled water since settlers first arrived centuries ago. Over the years, floods have destroyed property and, at times, drowned hundreds of people. Out of their ruins, these vulnerable cities have learned how to cope with the ever-present risk of flooding, and emerged as leaders in flood-control strategies and expertise.

Hamburg: Flood prevention innovation

Hamburg hosts Germany’s largest port, and is named the country’s “Gateway to the World." Europe’s second largest port, Hamburger Hafen, sits in an inland delta of the Elbe River, 110 kilometers (around 62 miles) from the North Sea.

When a very strong wind from the North Sea pitched a tide almost 18 feet higher than normal on Nov. 9, 2007, it sent a surge of water that rushed all the way to Hamburg, 56 miles inland. The port closed and a torrent washed through low-lying areas, wreaking havoc on homes and local businesses. However, one neighborhood, HafenCity, stayed nice and dry due to an innovative flood prevention program.

About 20 years ago, city officials realized that the islands, which were then an industrial district near the city center, could be put to better use. But before the idea could be realized, storm tides flooded the islands. Instead of ringing their 6 miles of shoreline with dikes to hold back the water, planners created a special development zone.

They demolished the old buildings and built new ones, with a new set of flood-related rules. The city built roads and open public spaces 25 feet above normal high-tide and waterproofed all of the structures. From being a city on the easternmost edge of the Western World, it has become the metropolitan heart of a continent growing together again, and a place with enormous potential.

By elevating the buildings on plinths made of mounds of compacted fill (warften in German), it has been possible to connect HafenCity with the existing city area and develop it step-by-step from west to east, and from north to south. All new buildings stand on artificial bases well above sea level -- out of reach of the most extreme flooding.

Rotterdam: Beyond barriers

As with Hamburg, a catastrophic flood also reshaped Rotterdam. On Jan. 31, 1953, a powerful storm struck the Netherlands, swamping nearly 340,000 acres of land and killing 1,800 people. This disaster compelled the Dutch government to design Delta Works, an initiative designed to protect areas that flood regularly from rising water.

In addition to reinforcing thousands of miles of dikes lining flood-prone rivers, this plan called for building robust dike-rings around large territories encircling Rotterdam, Amsterdam, and other urban areas, damming the bays with huge flood gates.

When a storm surge reaches 9.8 feet above normal sea level, two massive doors swing on pivots from opposite shores, meeting mid-stream like hands clasping. The Maeslant Barrier, a movable gate at the mouth of the Rhine River, is among the largest moving objects on Earth, each door being 787 feet long and weighing 15 million pounds.

As impressive as it sounds, this colossal flood gate did not come without a cost to the environment. It has been said to have caused serious ecological damage to the coast. “The technological approach has not brought us a sustainable solution,” explained Jan Mulder, a coastal engineer for a big Dutch water consulting firm, Deltares.

The barrier completely cut off three branches of a large estuary from the sea, transforming them into artificial freshwater lakes. It has seriously degraded nearby wetlands, algal blooms have plagued the water bodies and the fish, shellfish, and marsh grass that lived there have also disappeared.

The future of coastal cities

In the coming years, many more cities will take up the struggle that has preoccupied Hamburg and Rotterdam for more than 1,000 years. Last year, the U.S. Department of Housing and Urban Development revealed six plans for protecting the New Jersey and New York shores from storms like Hurricane Sandy, and allocated $2.5 billion in initial funding. Five of the funded projects — which included the use of dikes, rejuvenated marshes to slow storm surges, and natural basins for temporary storage of storm waters — were submitted by groups that included Dutch engineering and design firms.

While Germany, the Netherlands, the United States and other industrialized nations have the means to confront, if not overcome, rising sea levels, countries in the developing world — from Cairo to Bangladesh — generally do not. And one of the most important discussions taking place at the United Nations climate talks in Paris will be exactly how much aid industrialized nations will provide poorer countries in their battle to tackle rising sea levels.

However, despite the number of exciting innovations in this area, some people believe that a coastal retreat is inevitable. “Fighting water is a war you never win,” argued Henk Ovink, special envoy for international water affairs for the Netherlands. This is especially true today considering that global sea levels are projected to rise at least three feet this century. “Societies all over,” Ovink continued, “have to rethink."

Image credits: 1) Flickr/Giorgio Tomassetti; 2) Flickr/Thomas Wensing; 3) Flickr/Moyan Brenn

For a generation, dialogue on climate change between the world’s rich nations and developing countries have basically continued as such:

Rich countries: You really need to follow our example and do more about reducing greenhouse gas emissions, especially when considering the population of some nations in your group, including China, India, Brazil and Indonesia.

Poorer countries: Fine, but if you want to deny us the path to economic development that you all took, then help us pay for the climate change initiatives you want.

An initiative led by the World Bank is a step in that direction. The Transformative Carbon Asset Facility (TCAF), announced yesterday during the COP21 talks in Paris, will attempt to find new ways to create new greenhouse gas reduction programs in developing countries. Germany, Norway, Sweden and Switzerland are the first countries to fund what the World Bank aims to be a $500 million effort to reduce the risks of climate change. According to the World Bank, half of that amount has been pledged so far.

The World Bank says the TCAF will launch initiatives in areas including clean energy, sustainable transport, waste management, energy efficiency and low-carbon or smart cities that can help emerging economies reduce their carbon emissions. The TCAF could also compensate countries that remove fossil fuel subsidies or undergo reforms such as streamlining regulations covering clean-energy technologies.

The TCAF will be part and parcel of what the World Bank claims is a total of $2 billion committed to programs that will spur investment and loans that will help shift the world toward a more low-carbon economy. Led by its president, Jim Yong Kim, the World Bank is counting on the TCAF to bolster its argument that both the public and private sectors agree on a carbon-pricing mechanism that would cut emissions while inspiring more investment in clean technologies. As part of this effort, the World Bank also launched the Carbon Pricing Leadership Coalition, a multi-stakeholder group that seeks more effective carbon policies, at the Paris climate talks.

The World Bank’s recent actions mirror those of other international organizations that are taking a bolder stance on climate change. The International Monetary Fund’s managing director, Christine Lagarde, recently called for a carbon tax, and the International Energy Agency has called for more short-term action in order to nudge the world’s countries to develop plans to limit global warming to 2 degrees Celsius this century.

Meanwhile Pope Francis, who has already inspired (or infuriated) many with his 192 page encyclical on climate change, has kept beating the drum, urging negotiators to find a solution at COP21 in order to save a world “at the limits of suicide.”

With some of the stodgiest organizations on Earth, including the World Bank, seeking action, all eyes are on Paris for what will be either a landmark agreement or a blown opportunity.

Image credit: Flickr/anokarina

By Todd Spaletto, President, The North Face

Twice annually, the $646 billion outdoor industry gathers at Outdoor Retailer, in Salt Lake City, where attendees get a firsthand glimpse of all the trends, colors, fabrics and styles that will hit the slopes, trails and streets in the year to come. Trend-spotting is one of the show’s rites of passage. Of all the trends I saw there last time, one in particular gives me hope: the growing call for action on climate change.

The outdoor industry has been a leader within the wider business community in terms of sustainability and lowering our carbon emissions. At The North Face headquarters in California, 100 percent of our electricity is provided by renewable sources. We continually seek ways to reduce our carbon footprint, and we understand there is still much to be done. We applaud the efforts of other outdoor brands to slash their carbon footprints. It’s the right thing to do for our bottom lines, for the 6.1 million people that are collectively employed in the United States by outdoor brands, and for our children and grandchildren.

Here’s the thing: Sustainability itself will not solve the climate challenge. We need Washington to step up too, and recently they did: The Obama administration made the Clean Power Plan (CPP) official.  It’s the most historic act by any U.S. president to tackle carbon emissions by combining smart energy-efficiency initiatives with carbon-reduction targets and clean-energy generation. The goal is to reduce U.S. carbon emissions by 30 percent below 2005 levels. But just as powerful, it’s a signal to the world as we head into the U.N. Climate Conference in Paris that the U.S. is very serious about the future of our planet.

Our athletes have scaled every major mountain in the world and we take pride in self-reliance. We go where few dare. Climate change, however, cannot be overcome through solo effort.

The White House estimates the CPP will create 275,000 U.S. jobs -- good, new-economy jobs: hammering up solar panels, making our homes and buildings more efficient, erecting wind turbines, designing the software and hardware that run a smarter energy grid. As a company president, it is very clear to me that the CPP will jumpstart American innovation and entrepreneurialism. (It will also likely lower your energy bills, according to a new study by the Georgia Institute of Technology.) But the CPP is just the start. Now it is time for Congress to step up.

History shows that big environmental victories — protecting the Grand Canyon, establishing the Clean Air Act and the Clean Water Act, efforts to reduce acid rain and ozone depletion -- only come with bold government action. Before these laws were enacted, our rivers were toxic and our air was choked with soot. These acts didn’t include drastic losses in jobs or hinder economic growth as some had predicted.

Sadly, there is currently no coordinated congressional action on climate. In fact the Senate voted to dismantle the CPP just last week, despite a majority of the American public supporting it (Yale, 2015). The fossil fuel industry continues to block sensible legislation. To overcome this hurdle, the outdoor industry — along with all other business sectors and concerned citizens — must bring the fight to Washington. We must demand action for the sake of our children, for the sake of our mountains and our planet, and for the sake of our businesses.

For example, as a member of the advocacy coalition Ceres Business for Innovative Climate and Energy Policy (BICEP), The North Face joined leading businesses including Apple, Disney, Ikea, Starbucks, Pepsico and more in signing the BICEP Climate Declaration. The declaration’s premise is simple: Tackling climate change is one of America’s greatest economic opportunities of the 21st Century. We’ve also joined Protect Our Winters to ensure that our professional athletes and consumers are engaged and taking meaningful action to pass energy and climate legislation that will protect the outdoors for generations by enabling a rapid transition to a low-carbon 21st century economy that creates jobs, stimulates economic growth and stabilizes our planet’s climate.

This week in Paris, our parent company VF Corp announced a commitment to source 100 percent renewable energy in owned and operated facilities by 2025. And while we still have work to do to reduce our global carbon footprint, we’re moving in the right direction and we’re proud of this bold step forward in tackling climate change and protecting a healthy environment that we depend on.

Outdoor exploration is in our DNA at The North Face. Our athletes have scaled every major mountain in the world, and we take pride in self-reliance. We go where few dare. Climate change, however, cannot be overcome through solo effort. Today, our athletes and customers use our equipment in wild lands and national parks created by our government in recognition of their profound value to the American people. Now, those very lands are suffering droughts and fires, beetle-kill, and flooding. We the people set that land aside; now we must act once again, this time to protect that land from the ravaging effects of a warming world.

The world’s eyes will be on Paris the rest of this week, and we’re hoping that our leaders will unite and find common ground to tackle this greatest environmental issue of our time. Climate change touches every one of us and demands that we all be part of the solution.

To learn more about the Clean Power Plan, click here. To take action to support it, click here.

Image courtesy The North Face (photo: Tim Kemple)

Todd Spaletto, President, The North Face: Todd Spaletto lives and breathes The North Face ethos of outdoor exploration – he is an avid runner, climber and outdoor enthusiast. He enjoys training and challenging himself on the trail outside the brand’s Alameda headquarters as well as in the mountains. As president of The North Face since 2011, Todd’s vision for the company has enabled the brand to inspire consumers to engage in exploration in its many forms. The North Face aims to inspire, motivate, challenge, and drive consumers to “Never Stop Exploring” in whatever way they find most fulfilling. The North Face, a $2.3B brand, offers its customers unrivaled performance with premium products, enabling them to push their personal limits. Todd aims to share these unique advantages broadly through product innovation, Research, Design and Development (RD&D), athlete expeditions and authentic storytelling.

National park areas are not immune to the impacts of climate change. Some may be affected by sea-level rise, others by shoreline erosion, warming temperatures, changing rain patterns and groundwater inundation.

Many park areas are not standing idly by and waiting for those impacts to damage or destroy national treasures. Instead, they are taking action, as a report released in September reveals. Featuring 24 coastal adaptation efforts in 15 states, the report reveals how national parks are planning and preparing for climate change impacts. While some are conducting baseline data, others are engaging in historic preservation, archaeological surveys, habitat restoration and infrastructure design.

Protecting archaeological sites

Some of the most precious sites within national parks are archaeological ones. Preserving them is important to protect the nation’s history. And national parks are taking action to document damage and preserve archaeological sites, as a look at two parks featured in the report shows.

The Goals Canaveral National Seashore in Florida has several of the largest, most intact and most significant prehistoric shell mounds in North America. Four of them (Turtle Mound, Ross Hammock, Castle Windy and Seminole Rest) are threatened by erosion caused by sea-level rise and increased storm activities. These four mounds are key prehistoric and proto-historic monuments and settlements. Turtle Mount is one of the tallest shell mounds in North America at 37 feet high. It is made up of mainly oyster and clam shell that form two main peaks. There has been very little archaeological documentation of Turtle Mound, Castle Windy and Ross Hammock.

Unfortunately climate change effects are causing what the report describes as “severe, measurable and detrimental impacts” to the mounds, including erosion. Impacts from both sea-level rise and increased storm activity are likely to continue to accelerate the impacts, leading to “eventual total loss of site integrity.” However, the NPS is addressing the threats to the mounds. Some actions include:

• A project designed by NPS Southeast Archaeological Center to document the source of the threats, offset stressors, and interpret the change.


• The center is spatially mapping and documenting the current cultural landscape and recovering important archaeological, environmental, and paleoecological data before significant parts of the mounds are lost.


• On-the-ground conservation and stabilization methods and techniques are being employed to strengthen, protect, and stabilize eroding mounds with soft armoring and living shoreline techniques. Through this approach, cordgrass and mangroves are planted in the inter-tidal zone, bags of oyster shells are put seaward of the cordgrass, and oyster restoration mats are placed seaward of the bags.

Located in the southwest Texas, the Amistad National Recreation Area protects archaeological sites in the Lower Pecos Canyonlands. Sites within Amistad are affected by lake-level fluctuations related to climate change impacts. Those impacts include precipitation, storms and changes in agricultural water use. There are a variety of archaeological sites, and they are exposed to weather. They include open sites, rock-shelters and pictograph panels created by nomadic hunter-gatherers dating to the Archaic period.

One of the problems plaguing Amistad’s archaeological sites is that land previously inundated with water is exposed to erosion by wave action along the shoreline. Erosion has impacted several burial sites and caused damaged. The sites on recently exposed lakebed are very visible and vulnerable to looting by park visitors. Backcountry boating and camping activities such as clearing ground for tents can cause damage. Two of Amistad’s most significant rock art sites, Panther Cave and Rattlesnake Canyon, are threatened by flash-flood waters due to silt that decreases the capacity of the lake.

Knowing the extent of the damage is key. Park personnel are spending time assessing conditions and documenting problems on exposed sites. For example, Amistad has recently completed a photo documentation project at Panther Creek using Light Detection and Ranging (LiDAR), a remote sensing method. The park also collaborates with Texas Parks and Wildlife Department and Shumla to create outdoor experiential learning experiences for area schools. Through the program, children are introduced to the area's cultural and natural resources, but more importantly, instill responsibility and stewardship for nature and archaeological sites.

Image credit: Flickr/Clay Junell

Renowned jewellery retailer Tiffany is looking to drive meaningful change and lead in sustainable luxury. Anisa Kamadoli Costa, chief sustainability officer, tells Laura Klepacki how it’s going about it

In April when Frédéric Cumenal took over as ceo of Tiffany & Co, one of the world’s premier diamond jewellery and luxury retailers, he set an immediate imperative to accelerate Tiffany’s progress on key social and environmental issues. 

Tiffany had already created its Laurelton Diamonds division in 2002 to oversee its global supply chain and give it more control over sourcing and processing of the diamonds its sells. For several years it has remained steadfast in its resolve not to procure diamonds from Zimbabwe because of human rights violations despite that the Kimberley Process Certification Scheme, a global organization convened to address the issue of ‘blood’ or ‘conflict’ diamonds, deemed those exports acceptable again in June 2011. And on an environmental front, Tiffany has not used coral in its jewellery pieces for more than 10 years because the harvesting negatively impacts the marine ecosystem.

But to ensure responsible sourcing permeates its culture, just a few days into his tenure, Cumenal named Anisa Kamadoli Costa, formerly the company’s vice president, global sustainability and corporate responsibility, as its first chief sustainability officer. (She also retained her role as chairman and president of the Tiffany & Co. Foundation.) During her previous 12 years with the company Costa had been credited with nurturing a collaborative and stakeholder-driven approach to sustainability intended to forge best practices for the mining industry and jewelers.

In the first few months in the newly created post, Costa said she has been meeting with Cumenal and other senior leaders to set priorities, with support of responsible mining practices quickly placed uppermost on the agenda. “It is a fantastic new role. We want to drive meaningful change and lead in sustainable luxury. It is so critical to work with our team internally and that means in New York and globally,” said Costa. “But also just to be out there first hand and work on what is happening (across the industry.)”

Regarding its stance on Zimbabwe diamonds, Costa said, “What we would love is for the Kimberley Process to have its mandate expanded to a stronger standard on human rights.” Tiffany has also been calling on the Responsible Jewellery Council, which evaluates the diamond, gold and platinum sectors, to raise its minimum certification standards.

As a $4.2 billion company with 12,000 employees and 295 stores across 25 countries, Tiffany feels compelled to use the power of its brand to encourage ethical behavior. “We believe we must speak out and use our voice to raise awareness and impact society and our planet,” said Costa. “The long-term view is we want to integrate sustainability into all aspects of the business. It is rapidly evolving.”

Costa is particularly excited about a developing standard from the Initiative for Responsible Mining Assurance (IRMA) that will bring all mining sectors under one umbrella. “When up and running IRMA will be the largest mining standard to-date and the first to certify all mined materials – not just gold or aluminum,” she pointed out. IRMA talks engage five diverse stakeholder groups including indigenous miners. Tiffany is also a member of IRMA, which expects to launch standards in 2016.

“The conversations have been very open and eye opening. They are deep and raw conversations and difficult for different parties to hear,” said Costa. “When we have the `buy in’ from each of these sectors that is what helps us raise the bar.”

In choosing its partners, added Costa, “I want to know that the mining company we purchase from is the most informed mine possible.” Tiffany has created its own vendor requirements under its Conflict Minerals Policy, Vendor Code of Conduct and a Social Accountability Program.

Through direct supply agreements and maintaining in-house diamond cutting and crafting operations, Tiffany has gained more transparency and quality control. “We have traceability and we want to make sure we have best-in-class,” said Costa.

The Tiffany Foundation also furthers the corporate mission. “We really view our philanthropy as a key pillar of our sustainability efforts,” said Costa. A point of pride has been its funding of the Diamond Development Initiative which focuses on improvements for artisanal diamond miners. “DDI is trying to unify them (miners) and make sure their voices are heard.”

Ultimately, the prestigious image of Tiffany must remain intact and Tiffany provides sustainability training to its sales associates so to assure customers its products have been ethically created.

“It is really critical we execute our sustainability work without in the least compromising luxury,” said Costa. The quality of the diamonds and other gems sourced must still meet company specifications.

And while the iconic Tiffany blue bag now contains 50% recycled content, its quality has been retained, according to Costa. “The average customer would not even notice that we made that change.” 

2015 was the year Hillary Clinton declared she was running for president in the US; it was also the year that the US fell to 28th place in the World Economic Forum’s Global Gender Gap list (falling out of the top 20 for the first time). And in the UK - currently ranked at 18th in the same list – the level of equality debate led to the setting up of a new political party, the Women’s Equality Party, campaigning for gender equality to the benefit of all.

It’s constantly a state of swings and roundabouts. The UK and the FTSE 100 have seen progress in eliminating all-male boards, according to Lord Davies final report on the number of women on boards, yet as Laura Carstensen, EHRC Commissioner, noted: “It’s telling that women are still predominantly recruited to non-executive director roles rather than as executive directors at Britain’s biggest companies. Moreover, unlocking talent and economic potential by increasing female board membership shouldn’t just be limited to FTSE100 companies.”

Of course, diversity at the top shouldn’t just focus on meeting the numbers but also making the numbers count. Shainaz Firfiray, assistant professor of HR & Organisation at Warwick Business School points out that it is important for corporations to create the right environment so as to reap the benefits of gender-diverse boards.

“When companies are coerced into appointing women on boards, there is a risk that female directors will continue to face gender-related obstacles. Very often women who are appointed to boards to meet quota requirements have claimed that they are stigmatised and it is common for their ideas to be ignored or swept aside.

“Occasionally, male directors promote a hostile board environment by failing to consider the suggestions of female directors or treat them with respectful collegiality. If gender-diverse boards are not properly managed, they may not only create distrust and dissatisfaction but fail to benefit from uncommon or minority voices, resulting in lower levels of innovation and competitiveness.

Firfiray maintains that it may not be enough for companies to simply appoint women to board positions in response to external pressures. Rather they should ensure that the appointment of female directors is also having a meaningful impact on the business.
“Research evidence suggests that women bring a novel set of perspectives to the boardroom and have a unique style of engagement which focuses on seeking the opinions of others and attempting to reach a consensus. This can facilitate better boardroom dialogue and decision-making.

“While significant progress has been made over the last few years to help women advance to senior ranks within business, the marginalisation of women in the business world is still a problem that needs to be addressed. Prior research has shown that women who succeed in typically male tasks such as leadership positions are more disliked and derogated, implying that women confront obstacles in work settings that are not encountered by men to the same degree.”

She’s right. Broadening the composition of corporate boards can serve business interests as it helps in expanding perspectives at the top and recognising the needs of diverse stakeholders. However, as Firfiray notes, while most corporations realise the value of including directors with different types of educational or professional expertise, they often still neglect the importance of gender diversity.

liz.jones@ethicalperformance.com

BNP Paribas, the French multinational bank with a presence in 75 countries, is to take a further significant step in financing the transition to a low carbon economy by “more than doubling” its financing resources to the renewable energy sector, increasing its allocation to €15bn in 2020 - up 117% from €6.9bn in 2014.

The news came within days of the upcoming UN Conference on Climate Change (COP21) in Paris on 30 November and broad scientific and political consensus that the current CO2 emissions trajectory must be curbed before 2020, if global warming is to be restricted to a 2°C increase over pre-industrial levels.

Jean-Laurent Bonnafé, CEO of BNP Paribas, commenting said: “Our decision to more than double our financing in the renewable energy sector and to reinforce our carbon risk management procedures is both an environmental and economic necessity.”

He added: “It has been calculated that if we want to limit the increase in average global temperatures to 2ºC, only one third of existing fossil fuel reserves can be burnt. The electricity mix currently financed by the BNP Paribas Group, with 23% renewables - that is hydroelectric power, photovoltaic and wind power - and 23% coal-fired power, is already more advanced than the global average mix.”

The International Energy Agency (IEA), which predicts that renewable energy will represent the largest single source of electricity growth over the next five years, has put this global average mix at 21% renewables and 40% coal.
Deciding to strengthen its carbon risk management policies, the bank will also support clients “making a safe transition” to more sustainable energy and continue to promote the merits of Green Bonds to institutional investors. This is a market that BNP Paribas aims to be among the “top three players” worldwide for euro-denominated issues by 2018.

A climate component is to be included in the bank’s methodology for rating companies and the projects it finances. As such it will “progressively integrate” the use of an internal carbon price in its financing decisions going forward “to reflect changes brought about by the transition towards sustainable energy and to take into account the associated risks.”

Strengthening its carbon risk management policies further, the bank has decided that it will no longer finance coal mining activities, whether directly financing of projects or by financing mining companies specialising in coal extraction. That is, unless entities have put in place an “energy diversification strategy”.

BNP Paribas will establish a “differentiated strategy” in terms of financing coal-fired power plants. For the ‘high-income’ countries there will “no further financing” of such plants by bank, while in other countries they will “consider the possibility” of financing such projects - but only if certain criteria are met.

These criteria include: (1) The host country must have made a commitment to limit greenhouse gases (GHG) emissions as part of the COP21 framework; (2) A proper community consultation process (including access to a grievance mechanism) for local people potentially impacted by projects and where necessary compensation is provided; and, (3) Power plants designed to reduce GHG emissions.

Moreover, the bank will only provide financing to power generation companies that have a “formal diversification strategy” to reduce the share of coal in their power generation mix that is “at least as ambitious as that of their host country.”
Separately, on 23 November the European Investment Bank (EIB), BNP Paribas and Vigeo launched Tera Neva, a new sustainable investment solution designed to align investors’ financial objectives with their energy transition goals. The initiative is supported by twelve institutional investors that have invested in Tera Neva via a €500m equity index-linked bond issued by the EIB that matures in May 2029.
 

In the UK registered funds sector Kempen (Lux) Sustainable European Small-Cap Fund I, a £120.38m fund, top ranked over the past one year to 31 October 2015 with a cumulative return of +19.16% versus +50.93%/16th and +51.83%/35th over the past three and five years, respectively.

Second top in this sector on a past one-year view was the £243.18m Standard Life Investments (SLI) UK Ethical Ret Acc fund, which posted +18.84% and compared with +49.65%/20th and +80.97%/8th posted over the past three and five years, respectively.
The larger £2,239.54m Pictet-Water HR USD fund ranked third from top over the past 12-month time horizon, but produced +53.19%/10th and +77.89%/11th over the last three and five years, respectively.

At least 75% of Kempen (Lux) Sustainable European Small-Cap Fund I GBP’s net assets are invested in PEA-eligible assets, which are securities issued in the European Union (EU), Norway and Iceland. The sub-fund’s assets are invested using derivatives in a diversified portfolio of investments in equity and equity equivalent securities of smaller companies.

These are entities defined as having a maximum market capitalization of €5bn at the time of initial purchase, or the highest market capitalization of any company included in the MSCI Europe Small Cap Index whose constituents are adjusted by reducing the UK components by 50%.

By region the Eurozone accounts for 50.60% of the fund, the UK (27.50%) and Europe ex-Euro (21.90%). Consumer Cyclicals accounted for a third (33.34%) of the overall fund in terms of sector asset allocation, Industrials (27.25%), Technology (9.32%), Healthcare (7.77%) and Financial Services (7.43%).

Furthermore, companies invested in will have an official listing on a major European stock exchange or other regulated market of any EU Member State and exhibit a positive ethical, social and environmental stance in pursuing their long-term strategy. The fund’s top three stocks Huhtamäki Oyj (5.22%), Dunelm Group (5.17%) and Dignity Plc (4.96%) - all consumer cyclicals.

Among European funds, the €155.49m DNB Sweden Micro Cap fund scooped top spoils over the past year with a cumulative return of +37.68% and was second top over the last three years with +125.86% and +152.83%/5th over the last five.

It was followed by the €17.63m ID France Smidcaps C fund in second place over the past 12-month period with +34.40%. Over the past three and five years this fund produced a performance of +108.23%/3rd and +108.21%/38th, respectively.