The percentage of women employees at both Renault and Nissan has increased from a year ago - particularly in manager-level positions - following the car giant launching numerous programmes globally and particularly in its “home markets” to recruit, retain and advance women.
At Renault, 22% of global key positions are held by women while Nissan Japan has more than triple the national average percentage of women.
Renault aims to have women account for 30% of engineering or technical positions and 50% of sales positions worldwide by 2016. It also aims to have women account for 25% of its key global positions by next year.
At Nissan, women accounted for 11.7% of manager-level positions globally in fiscal year 2014, up from 10.6% in fiscal year 2013. In Japan, women at Nissan accounted for 8.2% of such positions, up from 7.1% in the previous year and more than 5 times higher than 2004.
Nissan remains an industry benchmark in its home market of Japan, with the percentage of its women managers more than triple the national average for large manufacturers. Nissan’s goal is to have women represent 10% of managers in Japan and 14% of all management positions globally by 2017.
The Renault-Nissan Alliance, one of the world’s largest car groups, says it is making this progress through a variety of programmes including its Women@Renault internal support and career network and Nissan's “Ladies First” retail programme in Japan (which are dealerships managed and staffed mostly by women).
Palm oil is in about half of the packaged products in the supermarket -- everything from cleaning products to Pop Tarts benefits from the vegetable oil's viscous and visual properties. So we know that. And we know the heavy global demand for palm oil contributes to massive deforestation in sensitive ecosystems in Malaysia, Indonesia and other growing regions around the world.
The enormous demand and global supply chain mean that, historically, traceability is quite a challenge. Palm grown and harvested by small landholders and subsistence farmers gets collected and sold as a commodity, and it goes through many refiners and dealers along the way before it reaches your breakfast cereal.
NGOs and activist organizations have pressured food companies and other consumer-facing brands to adopt "no deforestation, no peat and no exploitation" palm oil policies, since these brands have the most to lose if their customers discover the problems in their supply chains. However, middle managers, palm oil refiners and dealers are the ones who actually have to do the work of cleaning up supply chains.
Which is why it's so exciting that IOI Loders Croklaan (IOI LC) is ramping up its traceability. The wholly-owned subsidiary of IOI Group (more on that later), decided to focus on traceability in 2012. This year it reached 94 percent traceability. That's traceability to the mill level (as opposed to the farmer).
Sourcing to the mill level only addresses part of palm oil's big problem problem, since each mill may procure palm from more than 100 local growers who are the ones doing the deforesting. However, it's a huge first step, since IOI LC currently sources palm from over 800 mills. "Once you know where the oil is coming from you can engage with your supplier," IOI LC's sustainability director, Ben Vreeburg, explained to TriplePundit by phone.
Now that IOI LC has a high degree of traceability in place, the next step is to run a risk analysis using satellite imagery to identify hot spots: mills in sensitive areas. Once high-priority mills are identified, IOI LC will go in person to engage, meet with suppliers and encourage the mills to become RSPO certified. Sounds good, right? Yes, and ...
IOI LC is the downstream processing arm of IOI Group, one of the world's largest producers and manufacturers of palm oil, with hands on 10 to 15 percent of the world's supply. IOI LC does the processing and trading, but IOI Group has the plantations. So for palm oil experts, the fact that these traceability commitments come from IOI LC and not the parent company, which has large holdings throughout the supply chain, is suspicious. The direct control provided by IOI Group's holdings is part of the reason IOI LC was able to reach such a high degree of traceability in three short years, so why aren't they leading the sustainability charge?
What does "sustainable palm" mean, anyway?
The Roundtable on Sustainable Palm Oil (of which IOI Group is a founding member) is the leading game in town when it comes to sustainable palm certification. However, NGOs and activists say that it's too weak. The Union of Concerned Scientists' Calen May-Tobin wonders, "How can something that causes deforestation and massive amounts of carbon emissions be called sustainable?" And he explained in a recent blog post:
"[UCS and] a number of other NGOs, including World Wildlife Fund, a founding member and longtime advocate for the RSPO (PDF), recognize that the RSPO principals and criteria are not strong enough and that to end forest and peatland destruction from palm oil expansion we must move beyond the RSPO’s minimum requirements."
Given that deforestation is the biggest issue when it comes to conventional palm, RSPO's weak attention to it is certainly problematic.
Deborah Lapidus, tropical deforestation expert and consultant to Rainforest Foundation Norway, stated, "RSPO gives lip service to no deforestation but has a definition so weak that it doesn't protect the vast majority of forests and it still allows RSPO certified companies to clear carbon-rich peatlands."
Vreeburg called RSPO a "dynamic process," explaining that it's the industry standard and the principals will continue to be adjusted to restrict growing in high carbon stock areas and sensitive areas like peatland.
I'm always reluctant to criticize a standard as too weak if it's the only thing going. When asked what alternative NGOs proposed, Lapidus explained: "We are calling on companies to adopt no deforestation, no peat and no exploitation policies. These policies have been adopted by the vast majority of major palm oil traders and large growers as well as dozens of consumer companies." She further elaborated that these stronger standards are currently in use by Wilmar International, which manages 45 percent of global palm oil trade. They aren't out of reach for global multinationals.
IOI LC released a strong sustainability policy last November that happily does go beyond RSPO standards. However, Lapidus expressed concern that the policy came from IOI LC rather than the parent. Parent company IOI Group did agree three months later that it would be beholden to its subsidiary's policy:
But there does appear to be a bit of tail wagging the dog. While IOI LC is moving beyond RSPO, IOI Group is struggling to keep up and is currently at risk of being suspended from RSPO over compliance issues.
While the battle over standards rages on, there are currently 12 million tons of RSPO-certified palm oil (a mix of mass balance certificates and physical palm oil) on the market, and current demand from companies is less than half that.
Lapidus chalks the weak demand up to the weak RSPO standard, pointing out: "Kellogg, Nestle, Dunkin' Donuts, General Mills, Mars and dozens more have set no deforestation, no peat and no exploitation requirements for suppliers."
"Consumer companies want to be able to assure their customers and investors that they are not selling products made on top of destroyed forests; RSPO can't provide that assurance and therefore can't give companies the protection from reputational risk that they are seeking."
So, the consumer-facing brands have moved beyond RSPO, but can the growers catch up? Vreeburg expresses concern over the lack of demand, stating: "If you want to drive change on the ground, the best signal is by buying [RSPO] certificates." He went on to describe the pressure growers are under: "It’s not motivational if you produce 12 million tons and the demand is only [6 million]."
While demand is certainly a big piece of the puzzle, grower-level education plays a key role as well. IOI LC's "hot spot" approach to working with mills and farmers strikes the right mix of practicality and progress -- one hopes they'll be able to complete their mission before another Greenpeace campaign targets a beloved brand.
Despite the low prices of fossil fuels, the clean energy industry is still growing, with utility-scale wind power projects and residential solar installations catching on worldwide. And despite the oil and gas industry’s stranglehold on political power — evident in fossil fuel subsidies across the globe — clean energy companies overall still very much have the wind at their backs. Even stodgy organizations such as the International Monetary Fund (IMF) and the International Energy Agency (IEA) are bullish on the future prospects for renewables.
Nevertheless, the industry is still enduring its share of growing pains, as SunEdison’s current struggles demonstrate.
SunEdison had been riding high this year, with a market capitalization soaring to almost $10 billion just three months ago. But investors’ confidence had been wavering long before SunEdison reached what was a historic milestone for the company. Acquisitions of firms including First Wind and Vivint Solar worried analysts who saw that $4.6 billion buying spree create a sudden spike in SunEdison’s debt-to-equity ratio.
Not everyone was worried: The company attracted copious amounts of praise for becoming the world’s largest clean energy development company, and the MIT Technology Review, in fact, listed SunEdison as sixth in its rankings of the 50 Smartest Companies. But Wall Street became skittish over SunEdison’s fundamentals, and as July turned into August, its stock lurched into a rapid tumble.
In July, SunEdison’s stock price had hit an all-time high of $31.84 a share. It had fallen as low as $6.56 a share in late September before hovering at its current price of about $9; in turn, the company's market capitalization has taken a steep nosedive to what is now an estimated $2.6 billion.
Meanwhile, SunEdison’s transactions hardly slowed the company’s spending, whether it was to fund its countless divisions or to wow attendees at signature clean energy industry events. In addition to the financial strains, this newly assembled company also faced its share of work culture challenges as evident in the Vivint acquisition. Too many on the outside had become nervous about the rapid changes ongoing at SunEdison.
The recent pushback by investors has resulted in SunEdison’s decision to tighten its belt. Last week the company announced it would take several steps in an attempt to “optimize business operations in alignment with current and future market opportunities.” SunEdison has said it will focus on what it sees as lucrative markets in regions such as the U.S., China, India and Latin America. The company also promises it will “rationalize purchased services” in the name of greater efficiency. Furthermore, SunEdison has pledged to “remove duplicative activities.”
Key to this optimization is layoffs. SunEdison’s restructuring will result in a 15 percent reduction in its workforce. The company expects to take a short-term financial hit as it will incur charges of anywhere from $30 million to $40 million in the next quarter, with most of those funds going toward severance packages for fired employees.
The troubles besetting a marquee company such as SunEdison will certainly amp up catcalls from those who are skeptical about clean energy’s future. But reports of the demise of renewables are still far too early.
SunEdison simply became a company with too much on its plate. The organization had become many things, including a financier, a battery storage tech incubator, a project developer and an asset management company. Now SunEdison will have to sell off some its projects that are not a fit with this restructured firm, and that will certainly have an impact on a pipeline about which the company bragged comprised a total of 2 gigawatts of future clean energy capacity.
SunEdison’s recent foibles aside, many multinationals and governments will continue to invest in renewables in the coming decade and far into the future as they become more cost-effective and scalable. The private and public sectors are both intent on securing a lock in energy prices, keen on ensuring energy security and are determined to meet their sustainability goals. SunEdison’s setbacks, while certainly daunting, will most likely be a mere hiccup on clean energy’s slow but steady path toward becoming an even more relevant and lucrative industry.
Thirty-two members of Congress have written letters to the Transportation Security Administration asking it to upgrade its screening policies. For a federal arm known more these days for intractable gridlocks than unified action, the letter is notable in itself. But so is the topic that the lawmakers have taken up: updating screening policies to ensure that transgender individuals get equal and fair treatment.
Last week Rep. Mark Pocan (D-Wis.) and colleagues from Massachusetts, New York and other states submitted a letter to the TSA's administrator, Peter Neffenger, calling for a "complete and thorough review of [TSA's] current procedures."
The letter came in response to a report that a transgender individual had been subjected to humiliating treatment while attempting to board a plane. The agency said in response to the complaint that screeners "are trained to properly screen members of the transgender community" and that a review of the video taken at the time "indicated personnel followed TSA's strict guidelines."
Airport security screening protocol
What the response didn't say is whether the guidelines were in keeping with what American travelers would expect as part of their traveling experience, or that it took into consideration the sensitivity that people often have to procedures that single out a person who doesn't fit the anticipated profile.
Flight security has never been a popular concept, certainly not in the United States. For much of the American public, flying in comfort is an assumed right; being subjected to probing questions, delays, pat-downs and changing criteria for boarding is not.
That's often a problem for the TSA, whose employees are tasked with figuring out whether a passenger could be a terrorist or another potential security threat -- while striving to follow what may seem to some as excessively narrow, and often incomplete, guidelines.
But as congressional members have pointed out, procedures that were acceptable in the past don't always keep pace with a changing society. The members have called for better public education about procedures and the public's rights; information that Shadi Petosky, the transgender flyer mentioned above, said was not made available at the time.
TSA: A history of challenges
This is not the first time that the TSA has found itself in hot water about its screening procedures.
Last year the American Civil Liberties Union filed a complaint that black women with afros were being racially targeted for hair inspections. With mounting scrutiny and pressure, TSA discontinued the practice of hair pat-downs, apologizing for the tactic and announcing in April 2015 that it would implement new training procedures. Interestingly, it was never disclosed as to why this procedure had been initiated at several airports across the nation. According to the TSA, however, screeners are required to follow precise guidelines.
Twitter has become the go-to place for gauging how the public feels about the treatment they receive at TSA security inspections. And apparently, the response isn't all warm and fuzzy. Airports in California lead the pack when it comes to negative experiences, which range from complaints about being searched, to delays in getting on the plane. One ingenious step the authors used to determine the root of flyers' angst was to track the most common words used in tweeted complaints. "Search" (in 25 percent of the tweets) and "confiscate" (approximately 12 percent) were at the top.
Search methods, such as the manual shoe search that was introduced in 2001 following the arrest of "shoe bomber" Richard Reid, continue to prompt debate. In earlier screening instances, unarmed screeners were, in some cases, required to hold the shoe up to his or her face and examine it visually for evidence of incendiary bomb-making materials like the kind Reid had attempted to light mid-flight. At screening posts, law enforcement officers such as local police were supposed to step in quickly if there was a device detected and an arrest to be made -- not the security personnel facing down the suspect. The manual methods were later suspended, replaced by X-ray scanning machines. It doesn't seem to have lessened the complaints about taking off one's shoes.
There have been plenty of attempts by members of Congress (and the general public) to change the way the TSA handles security. The most recent include legislation entertained in 2014 to prohibit TSA personnel from "barking" orders at the public; a May 2015 letter signed by 133 members demanding TSA allow knives on board; and just recently, legislation by Rep. Thomas Rooney (R-Fla.) to prohibit any TSA employees "who are not sworn law enforcement officers with arresting authority" from calling themselves officers. It was introduced after an assailant opened fire and killed an unarmed screener. The incident was summarized by TSA Chief John Pistole as receiving "good response time" by local police and that "the tragedy could have been worse." The incident has prompted a re-think about TSA response procedures.
Flying without TSA?
The response to the most recent PR debacle by Congress, however, had a more terse tone to it. "We cannot countenance a security protocol" that subjects individuals to "indignity," wrote Rep. Pocan and his 31 colleagues. Those are powerful, if not intimidating, words to any agency that relies upon Congress' ink to ensure its existence. Could they mean the end to airport security? Some would hope so.
The truth is, the U.S. needs an agency like the TSA -- one that will conduct the difficult business of making sure planes, trains, and other business and personal transport are safe for the public. And oftentimes, accepting that fact may be a harder pill to swallow for Americans than whether we have to stand in line and subject ourselves to an inspection that the guy before us didn't have to endure.
There always will be controversies and debacles when it comes to public security. The job of airport screeners is to search and identify potential threats as a means of keeping passengers, crews and airplanes safe. And that means asking questions and subjecting people to searches that seem invasive and often controversial.
Solving the U.S. security experience: A two-way road
The Government Accountability Office (GAO) pointed out in February 2015 that the TSA excels in analyzing data and coming up with answers to public concerns. Where it often fails is considering the input of all stakeholders in its fact-finding efforts. Perhaps that's what passengers who lodge complaints like the Twitter storm that took off after Petosky's experience are really saying: They want to be able to give input in matters that have unique consequences to their lives.
But perhaps it's not just the TSA that needs to listen to feedback. Oftentimes we forget that that the airport screener's only personal protection is his cognition, training and exceptional skill in recognizing a threat before it can occur. No other federalized security personnel are required to do their jobs without the ability to protect themselves, nor in a setting where the murder of an unarmed security officer is termed as an acceptable loss in the face of a greater potential tragedy.
Obviously, security protocols must be able to keep up with a changing society. But I wonder if the reverse is also true and whether Homeland Security should consider a more vigilant public relations program that educates the traveling public about why the TSA does its job. Awkward questions that fumble on insensitive personal matters and time-consuming screening procedures are often the sign that, however difficult the process, someone is looking out for the passenger's safety.
With a little over a year before the contentious 2016 presidential and congressional elections, Volkswagen’s misdeeds will foment plenty of grandstanding for politicians looking to profit off the “defeat device” fiasco. News clips of senators angrily grilling VW executives will add to the brand’s immolation and increased attention from consumers just when last month’s revelations have faded from memory.
Even more worrisome for the world’s largest automaker, however, is the flood of class-action lawsuits with which the company will long struggle. Automobile manufacturers have had to deal with such litigation for years, whether suits are filed due to defective parts or flaws in a car’s design or assembly. In turn, they retain the top legal minds in the country, and the hundreds of dollars per hour they spend fighting off litigation is accepted as preventive medicine. But as personal injury lawyer Spencer Aronfeld has pointed out, Volkswagen’s legal teams will have to confront a far more daunting challenge:
“What has many consumer claims lawyers excited is that unlike most cases involving automotive product defects, the evidence here points to a knowing and calculated commission of a fraud, rather than a simple mistake. Whenever a company intentionally commits a tortious act, such as misleading or manipulating data, they are potentially subject to punitive damages. Punitive damages are meant not just to compensate a victim, but rather to punish the wrongdoer, and awards can range to many times the amount of actual compensatory damages," Aronfeld said.
A bevy of lawsuits are already underway. Hagens Berman, a litigation firm based in Seattle, claims it has received thousands of inquiries over Volkswagen’s admission that the company installed software that allowed as many as 11 million of its diesel-powered automobiles skirt U.S. federal emissions rules. The firm was among the first plaintiffs to file a lawsuit in the U.S. with a Sept. 18 submission in California; that filing was followed in the same court three days later with another lawsuit, which includes class representatives from at least 22 states.
California, in fact, will be ground zero for litigation filed against Volkswagen. The legal maneuvering has already begun: The class action firm Keller Rohrback has already filed for a restraining order against Volkswagen’s U.S. division, asking the U.S. District Court for the Central District of California to bar the company from sending any information to parties involved in a class action lawsuit filed in that court. Plenty of paperwork will be flying in this courthouse's offices for months, if not years.
The Central District, actually located in Southern California, is home to 19 million residents — and, according to attorney Alison Frankel, is home to many owners of the diesel-powered automobiles in which the emissions-cheating software were installed. California is also the location of Volkswagen’s U.S. emissions-testing evaluation center, and investigators from the California Air Resources Board (CARB) had a hand in revealing the manipulated emissions levels from VW and Audi diesel cars.
Meanwhile, other lawsuits have been filed nationwide, from Georgia to Texas to Wisconsin. As many as 40 different class action lawsuits have been filed in federal courts across the country, and whether they become consolidated or not, Volkswagen will face mounting costs in addition to a stained image from which it will take years to recover. Even litigators not involved in VW lawsuits, including the 40-year-old litigation firm Lieff Cabraser, are discussing the VW saga.
Not that anyone is really feeling sorry for Volkswagen. The sentiment of many VW and Audi diesel car owners, 55,000 of whom are in California, was summed up by a Sonoma County attorney who has also filed a lawsuit against Volkswagen U.S. and the Southern California dealership from which she purchased her 2010 Jetta SportWagen: “Every time I get in it, I cringe.”
According to ExxonMobil CEO Rex Tillerson, fossil fuels are the only affordable fuel that can challenge "energy poverty" in emerging economies with fast-growing populations. Africa is one such case, and it presents a tantalizing market for ExxonMobil's wares. However, according to a new international report, African renewable energy resources can be tapped economically at a rapid clip, fulfilling 22 percent of the continent's overall needs by 2030 -- more than four times the 2013 mark of just 5 percent.
If that goal seems overly ambitious, guess again. According to the agency behind the report, IRENA (the International Renewable Energy Agency), affordable new technological advances could enable African renewable energy to beat fossil fuels to the punch.
The IRENA report on African renewable energy
The new African renewable energy report, titled Africa 2030, provides a roadmap for transitioning an entire continent into modern renewable energy technology.
In contrast to Tillerson's view, IRENA Director-General Adnan Z. Amin maintains that Africa's abundant renewable resources are the key to ensuring energy access:
"Tapping into renewable energy resources is the only way African nations can fuel economic growth, maximize socio-economic development and enhance energy security with limited environmental impact. The technologies are available, reliable and increasingly cost-competitive."
Here's a rundown from IRENA on the daunting task ahead, given the rapid pace of growth that is already transforming many African nations:
"The continent’s total electricity consumption increased 650 percent between 1971 and 2013, from 80 terawatt-hours to 600 TWh, and this growth is expected to continue. Over the next 25 years, electricity demand will triple in Southern Africa and quadruple in Eastern Africa ... Less than 25 percent of households in sub-Saharan Africa have electricity access, a percentage which drops as low as 10 percent in rural areas."
In particular, Africa 2030 describes how the continent can replace the equivalent of more than 341 megatons of coal with renewable energy in the power sector. In other words, that would mean a 50 percent share of power generation for renewables, including solar, wind, biomass, hydropower and geothermal.
The unsustainable use of biomass of for cooking is another key area of focus, with public health concerns running apace with environmental sustainability. IRENA foresees a solution in new technology:
"The report estimates that a shift to modern renewable energy cooking solutions would reduce the use of traditional cook stoves by more than 60 per cent, saving US$20 billion to $30 billion annually by 2030 through the reduction of health complications from poor indoor air quality."
African renewable energy: ExxonMobil vs. U.S.
As Amin notes, following through on the recommendations of Africa 2030 is a matter of government policymaking. That's a pretty tall order considering that ExxonMobil is one of the top oil producers in Africa, where it pitches itself as the "Energy for Growth" company.
However, recent improvements in renewable energy technology are driving down prices, which could help to damper the persuasiveness of ExxonMobil's "foreign policy" efforts.
Helping things along are international initiatives such as U.S. President Barack Obama's Power Africa renewable energy initiative, which counts another global behemoth -- General Electric -- among its supporters.
"With 7 in 10 people in Africa still lacking access to modern electricity, reliable power is critical to unlocking the region’s economic and human potential. GE supports the Power Africa Initiative which provides leadership in addressing this vital need — a win for economic development in both Africa and the U.S."
Power Africa has been fulfilling its mandate. In a July 2015 Power Africa update, the Obama administration noted progress in several key areas.
Among the highlights, Benin is signing a compact with MCC, the U.S. Millennium Challenge Corp., for a $375 million initiative involving 78 megawatts of generating capacity, or about a third of the country's overall demand. That includes 45 MW of utility-scale solar as well as infrastructure investments and policy commitments.
The update notes progress on four "priority projects" undertaken by OPIC (the Overseas Private Investment Corp.), another U.S. government financing agency. These include commitments for two wind energy projects in Kenya and two thermal energy projects in Senegal and Ghana, all four totaling more than 700 MW of renewable energy generation in sub-Saharan Africa.
A third highlight mentioned in the update consists of new USTDA (U.S. Trade and Development Agency) early-stage funding for a 50 MW solar plant in Nigeria and a 2 MW microgrid in Tanzania. USTDA is also providing funding for an energy storage market assessment aimed at propelling renewable energy adoption continent-wide.
Depending on one’s point of view, the International Monetary Fund (IMF) is either the global organization tasked with maintaining global economic stability or the group that subjugates developing countries to financial assistance with onerous terms that make life worse for the poor. But this organization, which has caused its fair share of controversy from its involvement in fiscal crises from Iceland to South Korea, is finding itself front and center of other fiscal policy fights.
Now the IMF has become the latest advocate for a new twist on financial reform as its managing director, Christine Lagarde, added her voice to the global chorus calling for a carbon tax.
“To get it right, we have to price it right,” exhorted Lagarde at the recent IMF-World Bank meetings held late last week in Lima, Peru. Criticizing global energy subsidies, which she said total $5.3 trillion annually, or 6.5 percent of the world's GDP, Lagarde insisted now is the time to eliminate such price supports and tax incentives, as the current price of energy is very low.
Quoted by several sources as describing climate change as a “macro-critical” issue, Lagarde’s stance is an encouraging signal for carbon tax advocates because such policies, according to the IMF, are critical to sustained and secure economic development. “It is just the right moment to introduce a carbon tax and just the right time to eliminate energy subsidies,” Lagarde said at a panel during the Lima meetings.
With about six weeks to go before the COP21 climate talks launch in Paris, many observers believe the global community has a long road ahead to an agreement that would cap global emissions to 2 degrees Celsius. Martin Wolf of the Financial Times, a publication not always sympathetic to causes related to climate change, called out developing countries at this same meeting, saying that they have “failed utterly” to both take advantage of low global energy prices and succeed in enacting policies that could play a role in stalling what scientists agree to be a warming of the earth’s climate.
Other speakers at the Lima meeting lamented the lost opportunity to launch financial mechanisms such as a carbon tax or emissions trading program, which would now be more palatable for consumers with petroleum prices well below $50 a barrel. According to a report issued by the New Climate Economy, of the 40 countries and 20 local and regional governments that have implemented a carbon tax, most have shown promise as a way to transition toward a low-carbon economy while helping governments achieve financial stability. A revenue-neutral carbon tax in British Columbia, for example, reduced fuel consumption in that province by 16 percent while the rest of Canada saw the use of fuel increase 3 percent.
It is the voice of Lagarde and the IMF, however, that could be decisive in nudging more countries to adopt carbon pricing policies that would help their societies become more energy efficient while creating new revenue streams. Lagarde insisted such programs could help raise up to $100 billion by 2020, which could be used to help poor countries implement climate change mitigation plans. Such revenues could also create “buffers” in the event national treasuries or finance ministries have to cope with an unforeseen financial crisis.
Say what you want about the IMF, but governments listen to this 70-year-old institution. And with the evidence suggesting energy companies are rethinking their stance on a carbon tax, we could be on the cusp of a shift in global financial and environmental policy considered unthinkable by most experts just a few years ago.
There are more than 7 billion people on our planet today, and we all know we’re up against some huge social/environmental challenges. But, awareness alone doesn't reduce pollution, grow food or heal the sick. Talk doesn't help someone out of poverty; that takes doing. And Manoj Bhargava, billionaire CEO of 5-Hour Energy drinks, is committed to doing just that.
A college dropout, monk and wildly successful entrepreneur, Bhargava is a perfect mix of pragmatism and empathy. Alongside his team of doers, he’s on a mission to do nothing less than change the world. "The more wealth you get, the bigger your duty becomes to help those who have less, who are suffering,” he stated in the documentary film, "Billions in Change." “The more you are given, the more that is expected from you. It’s that simple.”
Lucky for him, Bhargava just happens to have been given a whole lot. His company, 5 Hour Energy, makes one of the largest consumer products in the world. His net worth is over $4 billion, and he’s giving away 99 percent of it. His initiative, Billions in Change, is a movement to save the world through the widespread implementation of solutions which generate clean energy, make fresh water and improve our health.
Housed in a laboratory outside of Detroit, Bhargavaj, alongside his Stage 2 Innovations team, has invented a number of simple technologies that can make a huge difference in billions of lives. “Stage 2 is filled with tinkerers, guys who spend time in their garage building stuff, engineers,” Bhargavaj explained. “These are guys who would probably work here even if I wasn’t paying them.”
Their mission is to develop groundbreaking innovations which benefit mankind and “help the poorer half of the world make their lives better."
“If it doesn’t make a big difference, we won’t do it,” explained Stage 2 engineer Dr. Jack Junni. “Life is too short to spend time doing things that don’t have a big impact. We’re here to make a difference."
And this doesn’t necessarily take large amounts of money. It just takes doing the right things and inventing the right things. “If it doesn’t make us money, but it improves lives, we’re still going to do it. We concentrate on those things that are going to be incredibly useful.” This starts with finding the meaning behind the project, the purpose, then asking questions: How can we make a sizable difference to alleviate human suffering? Who has the technology for this? Who can make this happen?
Free Electric
Bhargava believes that the largest area of work for the future lies in energy and water. They are the real solutions to health, livelihood and alleviating poverty. Everything requires energy, it is the great equalizer, and yet over 3 billion people around the world have no electricity or electricity for only a few hours a day.
It is for this reason that the Stage 2 Innovations team created the Free Electric hybrid bicycle. It harnesses human mechanical energy to provide electricity to people when they need it the most. You pedal for one hour and have electricity for 24 hours; it’s that simple.
If brought to scale, the Free Electric bicycle could have the largest effect of anything in the last 100 years. Unlike solar/wind generated energy, relying on human energy means that as long as you have humans, you have energy.
Additionally, this invention doesn’t generate any pollution. Each hour that is spent producing energy keeps one pound of carbon dioxide out of the atmosphere. And, given the fact that we’re currently pumping 25 billions pounds of matter into the atmosphere every year, this could make a huge difference. The only side effect to this invention is that the user gets stronger and healthier. It is probably the cheapest, most practical way of getting electricity around the world .
The Rainmaker
Water is fundamental to human life, and yet half the world’s population lives without it. Over 3 billion people lack adequate access to fresh, clean water for drinking, farming and sanitation. During long periods of drought, like that in California, the problem becomes more serious. But what if we could make more water? This was the question Bhargava posed to the team of engineers at Stage 2 Innovations.
Their solution, the Rainmaker, turns sea water, or any dirty water, into fresh distilled water. It mimics nature by heating the water and turning it into water vapor. Then, the machine distills the water vapor and turns it back into water.
The Rainmaker can be used to make distilled water or any level of clean water. While current technology can only take sea water and turn it into drinking water, it cannot turn it into water which can be used for agricultural purposes because it still has too much salt. This easy, modular system can be used all over the world. From fresh, clean water comes better health, food and livelihood for farmers.
Bhargava is driven by the fact that the work is never done. And to him, it’s not about the money. “Good stuff doesn’t come from money,” he explained. "History has proven this to be true and yet we still chase it. Mobs of Ph.D.s don’t come up with great inventions; it’s a couple of guys in a garage.”
Billions in Change is proof that a single person with a small team can actually affect change on a global scale. If these inventions are implemented worldwide, they have the potential to raise billions of people out of poverty and improve the lives of everyone – rich and poor.
Countless agricultural commodities form the building blocks of thousands of products that are manufactured and traded globally by corporations. Over the past decades, the demand for agricultural produce for feed, fuel and food purposes has been a key driver of deforestation and responsible for over 50 percent of it.
Forests cover around 30 percent of the planet’s surface, provide habitat for over 80 percent of the earth’s terrestrial biodiversity, are the source of livelihood to over 1.6 billion people, and provide unrecognized ecosystem services for our food, energy, climate and water security. Approximately 15 percent of all greenhouse gas emissions are caused by deforestation in the tropics and subtropics – equivalent to the global transport sector.
Yet, we are losing forests at an unprecedented pace. Over the past 50 years, over half of the natural forest cover of our planet has been lost.
Enter the global corporations: The “big four” commodities -- palm oil, soy, beef and paper/pulp -- are the building blocks of countless products traded globally. Conversion of forests to agricultural commodity plantations has been the largest single cause of deforestation in recent years. As demand for these commodities grows, we can expect global agricultural cropland to expand by 42 percent by 2050. This demand cannot be met without incurring significant business and environmental risk. Complex global supply chains are generating positive forest footprints leading to the creation of unexpected reputational, operational and valuation risks for most corporations.
Not convinced? Consider the scale of impact of a single corporation. Take the case of Wilmar International. The company is an agri-business conglomerate and one of the largest palm oil cultivators. It is a discloser to the CDP’s forests program and hence committed to zero deforestation. If it delivers on its commitments, the expected savings could be more than 1.5 gigatons of carbon dioxide by 2020 – roughly equivalent to the combined annual carbon emissions of Central and South America from energy consumption.
Now that I have your attention, let us have a closer look at the biggest of the big four - palm oil: an edible oil used globally and found in a wide variety of products including chocolate, soap, shampoos, cookies and cosmetics. Other industries where it is used are livestock, meat sector, and biofuels. Some of the best palm oil plantations can generate up to 10 times more oil per unit area than soybean, rapeseed or sunflower. Hundreds of thousands of small farmers depend on palm oil for their livelihoods.
More than 50 million tons of palm oil is produced annually, and over 85 percent comes from Malaysia and Indonesia. Palm oil production is also rapidly expanding into other areas of the world, including western and central Africa, Latin America, and Papua New Guinea. India and China are the largest importers. So much for facts.
The problem
The growth in demand for palm oil is fueling deforestation and depletion of peatlands. A study by Carlson et al. (2012) found that deforestation for development of oil palm plantations in Indonesian Borneo is becoming a globally significant source of CO2 emissions. Cutting down or burning tropical rain forests to plant oil palm releases large quantities of stored carbon. Many of Indonesia’s national parks have suffered deforestation due to illegal logging and palm oil plantations. Palm oil plantations have replaced the habitat of many endangered species, including primates such as the orangutan.
We the consumers need to realize that leading global brands in fast foods, packaged foods and personal care are using a commodity that is causing the destruction of rain forests and peatlands. Before you react to this, the great news is that palm oil can be produced sustainably when large corporations commit to deforestation-free palm oil in their complex supply chains. Distressing is to know that many companies are lagging far behind. How can we as consumers differentiate?
The Union of Concerned Scientists (UCS) prints an annual Palm Oil Scorecard evaluating the commitments made by leading corporations. The 2015 scorecard raises an important question: Why are so many of the world’s biggest brands still using unsustainably-produced palm oil and contributing to deforestation and peatland destruction?
Guess which global corporations had no commitment to using certified sustainable palm oil: Target, Costco, Wendy’s, Domino's, Walgreens, Dairy Queen, etc. (Interestingly, after the report we saw new commitments rolling in at an unprecedented pace.) Keep in mind, these are commitments and we have to see how these translate into actions.
A 2013 Report by WWF assessed 130 retailers, food service companies and manufacturers from Europe, Japan, U.S., India and Australia. The findings were astounding and the report named and shamed a large number of global buyers. Of the 130 companies surveyed, fewer than half purchase palm oil that meets the social and environmental standards set by the the Roundtable for Sustainable Palm Oil (RSPO), a voluntary scheme that now covers about 40 percent of palm oil production. This was quickly followed up with a punchy short film titled "Unseen." The report questioned that with certified palm oil so easy to source, why are so many companies failing to hit their own sustainability targets?
The report identified many buyers in the 100 percent club. Unilever, for instance, one of the largest palm oil buyers in the world and a founding member of RSPO, buys all of its palm oil from certified providers. Twenty-four of the 78 manufacturers in the study do likewise. U.K. supermarket brands Sainsbury, Tesco, Waitrose, Marks & Spencer and Asda feature in a similar leading list of 21 retailers that buy 100 percent certified.
Then there were the laggards. A second tier of companies like Procter & Gamble and McDonald's that bought just 13 percent of their palm oil from certified sources. At 17 percent, PepsiCo is another big name on the laggard list.
What needs to be done
Palm oil plantation companies: Those managing plantations need to ensure they are improving yields from existing plantations and expanding only into areas with low carbon storage
Companies in palm oil related business need to ensure that their supply chains are not responsible for deforestation and peatland depletion. Buy from RSPO certified sources.
Downstream retailers and consumers can play a crucial part in ensuring that supply chains are deforestation free. Insist on product labeling that is clear on whether certified sustainable palm oil has been used.
Most governments need to enact product labeling laws ensuring that manufacturers are not concealing ingredients by using generic titles. Like “vegetable oil” for palm oil.
Raminder Chowdhary: After earning two Master’s Degrees in Economics and Business Admn., from Delhi University & UT - Austin, I worked around the World for various MNC’s for 20+ years as a supply chain specialist. It was time to change tracks and I set up One Earth Foundation - an NGO focusing on conservation of natural eco-systems, preservation of traditional wisdom and environmental education. I am a regular speaker on various regional and national forums promoting the need for higher levels of corporate participation in social and environmental issues facing us today. I have had the opportunity to initiate and successfully implement numerous projects in the sectors of TK & TCE preservation, special needs groups, and livelihood challenges for indigenous communities, water, large scale forest and lakes stewardship drives and engaging students in various ecological initiatives.
Jennifer Pryce, president and CEO of the Calvert Foundation, opened her plenary remarks at SOCAP 2015 in San Francisco (Oct. 6-9) by inviting the audience to close their eyes and picture an impact investor. (I invite you to do that now.)
What does that person look like? Do you picture millennials? Women? Latinos? The future of social capital investing lies with these people, said Pryce, as she announced Calvert’s newest initiative on its Vested.org platform. The new initiative, called “Raíces” (Spanish for “Roots”), targets Latin American and predominantly Latino communities in the U.S. with $25 million in social impact investments by retail investors.
Impact investing has been largely the purview of those with lots of capital, and options for impact investing at the retail level are still relatively rare. I sat down with Margot Kane, vice president of strategy at the Calvert Foundation, in order to find out more about the thinking behind the Vested.org platform in general and Raíces in particular.
Raíces and Vested.org
“Raíces is for people who have not traditionally thought of themselves as investors,” Kane told me, “but would like to try investing in people and communities that matter to them.” The Raíces platform gives people an easy way to experiment, and hopefully do more as they shift their perception of what investing can mean.
The Vested.org website, of which Raíces is a part, is a portal that gives individuals the ability to invest in the Calvert Foundation’s Community Investment Note, which has attracted more than 15,000 investors since 1995 and seen more than $1 billion invested. To date, every investor has been repaid.
Raíces is one of more than a dozen investment areas on Vested.org, including affordable housing, small business, fair trade, education, women’s empowerment, older adults and more. Anyone with a U.S. tax I.D., a bank account and an address can invest in a Note with as little as $20. When you invest on the Vested.org site, your money is pooled with the thousands of investors in the Note, and the Calvert Foundation uses the number of people investing in each area as an indicator for its fund deployment strategy.
Well-designed interface
After all the discussion, I had to log in and try it for myself. The first thing I noticed is the brilliant design of the website that puts a very human face on the reason I am here – to invest in people and communities that I care about. The faces are of real people, doing real work. I like it.
The simple, clean interface tells me to select my term of investment. The longer I keep my money in, the greater the interest paid, from a 0.50 percent return for a one-year investment to a 3 percent return for a 10-year investment. Next, I enter my investment amount. I can enter any amount between $20 and $10,000. I hit the big “invest” button, which takes me to another very simple form that ask for my social security number, date of birth, address and phone number. The final screen asks me to enter my bank routing number and account number. And that is it. I am off to the Raíces! (Sorry, I couldn’t resist.). The account service used is Goldstar Trust Co., a branch of – and I’m not making this up – Happy State Bank (FDIC insured).
The changing face of the financial services sector
“The financial services sector is changing fast,” Kane told me, “and demographics are changing fast. We need to anticipate the audiences of the future.”
To that end, Calvert partnered with Think Now Research in order to understand the profile of the likely Raíces investor. The Vested.org site as whole provides an important feedback loop that helps Calvert understand people’s impact investing behavior.
“We are throwing a lot of things in the water to see what floats,” Kane said. For now, the platform is exclusively for individual investors, but institutional investment options may follow down the road, as millennials and others grow impatient with traditional investment options and exert pressure on institutions for ethical portfolio choices.
Additional thoughts
As I see it, the trend in disintermediation of financial services will grow in the years to come. Another platform, STASH, launching in a few weeks, will let you invest as little as $5 at a time. Its taglines include, “Investing is better when you do it together” and “Easy investing for everyone. Why let the old guys have all the fun?” Another platform aimed at millennial investors is Dough, “an investing platform for do-it-yourselfers,” which aims to demystify and simplify investing for those who are serious about learning how the stock market works.
On the other end of the spectrum, the SOCAP plenary session also included representatives from both Bain Capital ($75 billion in assets under management) and BlackRock ($4.72 trillion in assets under management) to discuss their new social impact initiatives. It is a hopeful sign that these powerhouses are finding it strategically important to discuss plans for social impact investing, even if it is still unclear what it will mean in practice at these firms. What is clear is that we may have reached an important tipping point in a national dialog of what our money is for and how we should be using it to effect the change we want to see.
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