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Schneider Electric, British American Tobacco and AB InBev have joined the top 15 European supply chains in Gartner Inc's annual ranking.

Gartner identified the top 15 performers, based on a combination of financial metrics, revenue growth, return on assets and the opinion of peers and Gartner supply chain analysts.

The top three remain the same as last year - Unilever, Inditex and H&M - followed by Nestlé, L'Oréal, Diageo, Reckitt Benckiser, BMW, Delphi Automotive, Schneider Electric, BASF, BAT , AB InBev, GSK and Volkswagen.

"The top three companies remain unchanged from last year, because they continued to demonstrate market-leading supply chain capabilities," said Stan Aronow, research vice president at Gartner. 

To see the ranking in full, click here.
 

The Central African Republic’s (CAR) biggest traders have purchased diamonds worth several million dollars without properly investigating whether they financed armed groups, Amnesty International claims in a new report.

And CAR’s diamond companies could soon start exporting diamonds again following its government agreeing to meet the conditions of the Kimberley Process, which is responsible for preventing the international trade in blood diamonds. As a result the export ban, which has been in place since May 2013, could now be partially lifted. Prior to the ban, diamonds represented half the country’s exports.

Lucy Graham, Legal Adviser in Amnesty’s Business and Human Rights Team said: “If companies have bought blood diamonds, they must not be allowed to profit from them. The government should confiscate any blood diamonds, sell them and use the money for the public benefit. The people of CAR have a right to profit from their own natural resources. As the country seeks to rebuild, it needs its diamonds to be a blessing, not a curse.

“This is a wake-up call for the diamond sector. States and companies can no longer use the Kimberley Process as a fig leaf to reassure consumers that their diamonds are ethically sourced.”

Based on interviews with miners and traders, the report details how armed groups both profit from the diamond trade by controlling mine sites and “taxing” or extorting “protection” money from miners and traders.

The report also documents the inspection gaps in diamond trading centres that make it possible for blood diamonds to be traded and sold globally.

Amnesty says it wants the CAR government to confiscate diamonds unless exporting companies can prove they have not financed armed groups. 

The report – which looks at several countries in the diamond supply chain, from CAR to Belgium and the United Arab Emirates – also details human rights abuses, smuggling and tax dodging throughout the diamond supply chain.

With the diamond industry due to gather at the Jewellery Industry Summit in March 2016 to discuss responsible sourcing, Amnesty is calling on governments and international diamond companies to support stronger regulation of the sector.

 

Picture credit: ID 30688504 © Everythingpossible | Dreamstime.com

The civil war in Syria, now in its fourth year, has resulted in the world’s largest human rights crisis since World War II. Over four million Syrians have been displaced across the Middle East: approximately 2 million are in Turkey, 1.2 million have fled to Lebanon and 630,000 are reported to be in Jordan. The bloodshed in Syria is so horrific that almost 250,000 Syrians have moved across the border into Iraq. Those who had property and possessions to sell are paying human smugglers to venture on dangerous boat rides through the Greek Isles to the Balkans in order to travel on to Germany or Sweden.

Unwanted, these refugees (not “migrants” as often reported in the media--they are fleeing Syria first and foremost because they are running for their lives, with jobs an afterthought to survival) have almost zero options to start life anew.

While Germany has shown leadership on accommodating these refugees, and formerly war-ravaged Serbia has shown compassion, these people are largely unwanted and scorned. The U.S. will accept 10,000. Australia is opening its doors. The Gulf States have overall said no. Uruguay’s tiny effort has been a failure. The result is a human tragedy unfolding in southeastern and central Europe, only a generation ago home to citizens who wanted to escape from communism and the Iron Curtain.

Those who dismiss this crisis with the oft heard “we don’t want those Muslims” ignore the fact that they are human beings largely from religious and ethnic minorities, or are fleeing the violence that bloodthirsty organizations such as ISIL are enacting on Shiites. And pragmatically, many of these refugees are educated, whether they had completed a trade in secondary school or graduated with a degree from Syria’s respectable university system. Emotions aside, political leaders must realize that aging European countries--and others in the West--have the opportunity to invigorate an aging labor force. Society could benefit from the professionals and skilled workers Syria offers, as Lucy Marcus has suggested in The Guardian. They are multi-lingual, hungry, ready to work and are having families--and that first generation will become even more assimilated and help build a stronger society, as has long been the case with immigration worldwide.

The founder and CEO of Facebook, Mark Zuckerberg, sees their potential.

During a speech he gave during the United Nations General Assembly in New York over the weekend, Zuckerberg highlighted the fact that these refugees are amongst the four billion people worldwide who lack reliable access to the internet. He promised that Facebook will help the UN bring internet connectivity to refugee camps throughout the Middle East. Admitting this goal was not pure altruism, Zuckerberg also told his audience that “we all benefit when we are more connected.”

Zuckerberg is right. Of course Facebook would score more users, though that fact is a given considering it has about 1.5 billion of them already. But better access to the internet benefits all: it gives the opportunity to an aspiring Lebanese chef to show off his culinary skills; lets a student study mathematics remotely; makes it easy for dispersed family members to check in; and allows those stuck in refugee camps to at least work on their crafts, sell their items and grasp some hope.

Zuckerberg did not offer specifics on how he would execute his plan. But it is clear that tech companies already see the potential in granting internet access to remote regions. The company is already testing a drone that it says will expand wireless internet usage in areas lacking reliable access. Google has been doing the same. The challenge is not an easy one--unreliable access to electrical power gets in the way of reliable wifi access, even if many citizens only access the internet with a phone and are fortunate enough to have a solar-powered charger. But access to a world beyond the barbed wire fences of these refugee camps would be progress for people who so far have only been punished.

Much work lies ahead to ensure these refugees are not trapped in a cycle of violence, poverty and the complete lack of dignity.

Many refugees do not even have the financial means to try to cross the Aegean Sea. Destitute, hundreds of thousands are stuck in camps in places such as Lebanon’s Bekaa Valley or Jordan’s Marjeeb Al Fahood plains, and these camps are the target for Zuckerberg's plan. Children are no longer going to school while their parents are generally unable to work. The result could be a lost generation, one that is already embittered and will long be a financial strain on nations, including Lebanon and Jordan, that already struggle with their own internal challenges. And while the focus has been on Syrians, they have been joined by Afghans, Africans and migrants from other countries seeking a life other than one marked by poverty and violence.

NGOs are struggling as much of the world is exhausted from what is seen as another crisis, and therefore are not writings checks to fund the delivery of basics such as food and water. Politicians, with the exception of Angela Merkel, are too scared to stand up to their constituents and do what is humane and right. Business may have to step into this void, so Zuckerberg’s announcement, even at this early stage, is a refreshing step forward.

Image credit: UN, Voice of America

 

 

While nations around the world debate whether they can, or should help refugees fleeing persecution in Syria, a number of companies and communities are making the pledge to help.

Last week, Apple CEO Tim Cook expressed in an email to staff that Apple would be making a "substantial donation" to support "humanitarian aid in Europe and around the Mediterranean." Although he did not say how much it would donate, Cook promised that employee donations to the fund would be matched by the company.

JP Morgan Chase & Co. has also announced that it will be making a donation to humanitarian organizations such as Save the Children, Oxfam, International Rescue Committee and International Mercy Corps to provide water, food and other essential support for fleeing refugees. The company says $1M will come from JP Morgan itself, and it hopes to raise the other $1M through a matched employee giving program, with corporate donations totaling another $500,000. The funds would earmark assistance in key refugee areas such as Italy, Lebanon and Greece.

And on the remote, scenic island of Cape Breton in Nova Scotia, Canada, the Mi'kmaq First Nations is lobbying the federal government of Canada to allow them to open their land to Syrian refugees. Hereditary Chief Stephen Augustine, who serves as the dean of Unama'ki College at Cape Breton University is leading the call for the Canadian government to ease up its immigration policies and allow refugees to come to Cape Breton Island.

“We didn’t have an immigration policy when you came here,” Augustine said, referring to the historic arrival of British and French explorers to Mi'kmaq's ancestral lands hundreds of years ago. Augustine has become famous in Canada for his gentle, if determined opposition to Canada's refugee policies, which have, like those of many countries, been criticized as too slow to meet the humanitarian needs of refugees flowing from the Middle East.

"I challenge indigenous leaders to take a lead in calling on government to increase the settlement targets,” Augustine said “We are all one big family and we should be looking after each other,” Augustine said.

In Israel, a similar call for action is being initiated by another unlikely organization: SodaStream. The company, which was targeted by the boycott, divestment and sactions Israel (BDS) campaign in past years for locating its processing facility within the West Bank, moved its factory last year to the Israeil town of Rahat. Prior to moving, it had employed Palestinian residents to operate the West Bank facility, paying them, the company says, on par with wages normally paid in Israel and far above those normally paid in the fledgling West Bank. But the BDS campaign forced the company to close the facility and in so doing, to terminate the employment of West Bank residents.

SodaStream CEO Daniel Birnbaum says he sees the Syrian refugee crisis as another chance to help families in need of employment.

"As the son of a Holocaust survivor, I refuse to stand by and observe this human tragedy unfold right across the border in Syria," Birnbaum said recently. He is calling on the Israeli government to approve his proposal, which would require the government to accept Syrian refugees within its borders. He said he is prepared to hire up to 1,000 refugees at his SodaStream factory.

In each of these instances, federal governments are being challenged by companies and communities to open their doors wider, and to provide humanitarian aid faster. While countries like Italy, Germany and Turkey have committed facilities, aid and funding to resettle refugees from Syria, Afghanistan and other nations, the U.S., Canada and Israel have been criticized as slow or unresponsive to the crisis.

So far, the Israeli company SodaStream is the only business to actually commit to providing jobs to refugees once they arrive. But the impetus of the private sector to find creative ways to adjust to the world's humanitarian needs is proposing an interesting standard in compassion for western governments. As has so often been the case in the past, private businesses and communities are setting  the benchmark for how our governments respond to humanitarian crisis.

Images: Freedom House; Oguzhan Ali; UK Department for International Development

 

No study has ever supported the argument that new sports stadia provide tangible economic benefits for the municipalities that build them, but cities keep on building these massive projects in the name of prestige and sports fandom. Miami and Dade County, Florida, for example, have built the most expensive stadium in the world. The cost of Marlins Park will reach over $2.4 billion by 2048 if interest accrued on bonds is included in the stadium’s total price. Perhaps that figure would be acceptable in South Florida if the Miami Marlins were a decent team, but after one disappointing season, its owner traded away its best players, infuriating its fan base and spooking businesses from investing in stores and restaurants out of fear no one would show up. Scott Walker, Wisconsin’s governor, recently gave up his White House bid, in part because his support eroded as conservatives were incensed the state will dish out $250 million in public funds for a new basketball arena.

Citizens are left to wonder what good a new stadium does as local infrastructure crumbles and schools languish in mediocrity--which is one reason Los Angeles has resisted using taxpayer money to build an NFL stadium even though the second largest television market in the U.S. lost its teams 20 years ago.

The mania over sporting arenas has been ongoing across the pond as well. Two of London’s largest sporting facilities, Wembley Stadium and Arsenal’s Emirates Stadium, are amongst the the most expensive stadia in the world. England’s most successful football club, Manchester United, has considered expanding its stadium, but those plans have actually been delayed due to concerns over the local economy. Whether we are talking about baseball, American football, or what the rest of the world calls football, sports teams have often defied the laws of capitalism by extorting money from the public sector for private benefit.

Therefore, a new initiative, 100% Sport, which aims to inspire sports fans to become enthusiastic about renewable energy, appears to be as genuine as a footballer writhing in pain on the pitch after brushing up against an opposing player during a game. 100% Sport screams loudly, but offers little in substance. But it is a nice distraction from the sporting leagues' track record of making billions of dollars on the backs of taxpayers and cash-strapped municipalities.

Sponsored largely by the UK telecommunications giant BT, this campaign has lined up Sir Ben Ainslee, who by most accounts is the world’s most successful Olympic and America’s Cup Sailor. Spokespeople like Ainslee, according to BT, can tell effective stories that can encourage sports fans to switch to clean energy.

“This campaign is about how sports fans can change the world,” said said Niall Dunne, Chief Sustainability Officer for BT, in a recent press release. “When Chelsea played their London rivals Tottenham Hotspur on New Year’s Day this year, 1.7 million BT Sport customers tuned in. Imagine if just 10% of those, a mere fraction of the UK’s football fans, switched to renewable energy. That’s the carbon saving equivalent of taking almost 50,000 cars off the road every year.”

It would be impressive if only 5 percent of those fans invested in renewable energy, but the decision to install solar panels on one’s roof after watching a sports match, and especially after all the advertisements, requires more consideration than trying a new beer or buying a new pair of athletic shoes. No promotion or any semblance of quid pro quo is provided by BT for fans to move to renewables. Not even a site offering education on clean energy is offered--just the aspiration of Mr. Ainslee, whose sponsorships have afforded him the opportunity to see his “first-hand” accounts of water pollution and climate change.

Professional athletes and the managers of stadia in which they compete should probably just stick with making these facilities more responsible places in which to watch a game. Allianz Stadium, where both New York NFL teams play, has had its share of sustainability-related events. More ballparks in the U.S. are adding solar or upgrading their lighting systems so that they are more energy efficient. Even the Sierra Club has taken notice of how more sporting facilities are making changes in design and organizing more community events in order to take a bite out of these arenas’ environmental footprints. Plans for action, instead of relying on the words of action heroes, are how sports teams can make a difference, if they are genuinely included to do so.

Image credit: UCInternational

 

By: Daniel Faris

Problem solving is a central issue in business ownership. In fact, you might say that business itself is a series of problems waiting to be solved. But when it comes to finding the ideal approach, or the perfect process, for solving any of the dozens of problems faced by the modern business, things get complicated.

Today I’d like to discuss three methods for problem solving that have proven track records in the world of commerce. Each one of these has a strange name, but don’t let that fool you: these are big ideas that have inspired countless companies both large and small. And not only that, but they also encourage both collaboration and transparency: essential qualities for any responsible, modern business.

Kanban

To get things rolling, we’ll turn to the industrious nation of Japan. The word kanban means “signboard” or “billboard” in Japanese, and it’s a concept most commonly applied to “lean” or “just in time” production. It’s a method best demonstrated with an example, so let’s turn our attention to the Toyota Corporation circa 1940.

During this consequential decade, Toyota began looking beyond the automotive industry to find inspiration elsewhere. They eventually focused their attention on supermarkets—specifically, the ways that supermarkets study customer behavior in order to create better shopping experiences.

Their source of inspiration was deceptively simple: They observed that customers traditionally retrieve only the items they need, when they need them. In turn, stores stock only what customers need at any given time. This is what’s meant by “just in time” production, and it’s crucial in any industry where perishable goods are involved.

That might make it seem like an unusual fit for the automotive industry, but Toyota recognized an important truth: Automobiles are, in their own special way, perishable goods. New models regularly displace older ones, and unsold, outdated cars are an expensive millstone to have to keep around.

But even if you’re not a supermarket or automotive mogul, the spirit of kanban can be applied to just about any modern business or industry. In a recent blog post, Kanbanize CEO Dimitar Karaivanov effectively summarized the spirit of kanban: “One of the main principles … is the goal of eliminating bottlenecks by imposing realistic limits on how much work is in progress, how much work is requested, and how much work is held off on the back burner. This is not only a way to prioritize, but also a way to ensure that no member of your team has too much on their plate.”

What Mr. Karaivanov is speaking to here is the importance of imposing order and prioritization on systems where the capriciousness of consumerism can make for sudden twists and turns.

Kaizen

The word kaizen literally means “improvement,” and it’s another word that we’ve borrowed from our eastern counterparts in China and Japan. Applied to a business setting, kaizen is a really big idea: It’s nothing more or less than the process of evaluating and improving every individual function within a company, from the ground up, until the whole thing is running like the proverbial well-oiled machine.

It might sound militant, but it’s anything but. Kaizen encourages individual initiative, attentiveness, and a culture of gradual improvement. For a look at kaizen applied practically, we need look no further than Amazon. Although the retail giant has caught some flak recently for their company culture, it will never be said that Amazon is willing to rest on its laurels.

In Amazon’s version of kaizen, each department within their warehouses—or “fulfillment centers, in Amazon’s nomenclature—is constantly on the lookout for wasted or duplicated efforts and inefficient processes. All it takes is one observant employee to get the ball rolling, and soon a small group of hand-picked team members convenes to brainstorm—and eventually trial—new approaches to old problems.

In other words, kaizen stresses the importance of smaller-scale innovation within a larger corporate structure. It’s a way to humanize the workplace by empowering employees to seek solutions to the issues that affect not just the company’s bottom line, but each employee’s ability to enjoy their job. The result? Improved safety in the workplace and a greater sense of job satisfaction.

Scrum

Finally, let’s take a look at a homegrown problem-solving method from the States known as scrum.

Scrum comes to us from the worlds of product and software development, where creative iteration and collaboration are of the utmost importance. The idea was conceived by Ken Schwaber, of Advanced Development Methods, in the early 1900’s, though it would be slightly longer until it went by its new name.

Like kaizen, scrum focuses on the importance of anticipating and reacting to the sorts of changes that can slow down development and create inefficiencies.

So what might scrum look like in the modern workplace? It would start with breaking down a week’s worth of tasks into smaller priorities. Let’s use cleaning your room as an example: one priority would be to vacuum the floor, another would be doing laundry, and yet another would be to dust your bookshelf. To return to software development, priorities might include writing a certain section of code, or rebuilding a piece of the user interface.

What scrum does is allow us to build modular schedules that focus on collaboration. It helps us recognize which of our priorities might, for example, play an important role in another department’s work, which ones are time-sensitive, and which ones are not. Development of any kind needs to be able to react to changes in real-time, and to pressure from other teams. Building an agile schedule is an important part of reacting to those variables.

Final Thoughts

If, in exploring these three problem solving methods, you’ve come away with the idea that free thought needs to be stifled in the name of order and efficiency, that’s far from the truth. None of these methods would work as well as they do if they didn’t value (and encourage) creativity. And who knows? You may even stumble upon a solution altogether new by trying out one of these established systems. As it so often the case in business, you won’t know until you try.

Daniel Faris is a graduate of Susquehanna University's Writers Institute. When he's not writing about corporate responsibility, you can find him over at New Music Friday discussing progressive music and philosophy.

Image credit: Luigi Mengato, Flickr

 

China is the top emitter of greenhouse gas (GHG) emissions in the world. In a few months, world leaders will meet in Paris to hammer out a successor to the Kyoto Protocol. All eyes will be on China and the U.S., the second largest GHG emitter. China is showing signs it is going to attempt to really reduce GHG emissions.

While visiting the U.S. last week and meeting with President Obama, China’s President Xi  Jinping announced the country’s new cap-and-trade system. The system will launch in 2017 and cover heavily-polluting industries such as power generation, iron and steel, chemicals, building materials including cement, paper-making, and non-ferrous metals, according to a White House statement. Those sectors represent a “substantial percentage of China’s carbon pollution,” the statement added.

China first announced a cap-and-trade system back in October 2010. There are already cap and trade pilot schemes in place in seven Chinese cities, but this one will be a national carbon trading scheme.

How effective will such a cap-and-trade system be? A Washington Post article points out that it “will hinge on how the system is designed and implemented.” The problem is that lack of transparency “has been the major issue” in the pilot programs, according to the article.

Or as the New York Times puts it, to be effective, the cap-and-trade system “will demand big changes from a Chinese government accustomed to heavy-handed intervention and skewed statistics.” The articles goes on to say that creating an effective system for China means “regulators must develop policies and trading platforms that give companies confidence that they are being treated equally and transparently as they buy and sell emission permits.” The article added that “if China’s stock market is any guide, plenty of investors say their experience is often the opposite.”

How successful is the EU’s cap-and-trade system?

Back in 2005, the European Union created its own cap-and-trade system, called the Emissions Trading Scheme (ETS). How successful is it? According to a 2012 assessment by the Environmental Defense Fund (EDF), the EU’s ETS “has driven significant reductions in greenhouse gas emissions since the program’s inception in 2005, sparked innovation in low-carbon processes, and achieved results at an estimated cost of just 0.01% of gross domestic product—a fraction of predicted costs.”

The EDF acknowledges that there have been some problems, including EU governments basing the systems initial caps and emissions allocation on estimates of regulated emissions instead of on actual historical emissions data. As a result, over-allocation of allowances occurred, but caps are now established based on measured and verified past emissions and best-practices benchmarks. That makes over-allocation less of a problem.

By the EU’s own analysis, GHG emissions under the EU’s ETS have decreased by an average of over eight percent since 2005 when the system launched. That means that the EU’s cap-and-trade system actually reduced emissions.

With any luck China's cap-and-trade system will help it meet the stringent target it has made in advance of the COP 21 meeting in Paris.

Image credit: Ash Carter, Flickr

 

By Graham Sinclair @ESGarchitect

Nada. Nothing. Zero. Nothing happened a couple weeks ago, and that made headlines. The U.S. Fed blinked. Ms Yellen and her peers chose not to raise interest rates from the current level of close-to-zero where they've been held for years trying to re-inflate the U.S. economy after the Great Recession. Your repayments on your student loan, credit card, car or house stayed as they were. One U.S. Fed governor said the news “discomforted the market, but otherwise as the news broke, investors went back about their business making money in an era when money is free and any yield is worth chasing. Venture capitalists are even throwing so much money at startups someone is going to get hurt: there are not enough “unicorns.” Unicorns are start-ups that will reach a $1B valuation and big wins are a must for investors in the highly risky venture capital game. Like barflies at 5 minutes to closing time, investors everywhere are nervous about the Fed turning off the tap, however slightly.

So do low interest rates explain why green bonds are selling for 20bps (.20%) over market rates? That's a big deal in fixed income land. Barclays was reported by Bloomberg saying "Sales of "green bonds" have been increasing, but so have their prices." It may be that the case for investing in the underlying assets - solar, wind, green infrastructure - is so strong that investors are willing to pay the green premium. Clearly that is one driver, as Wednesday’s @Triplepundit + @Novozymes #Twitchat #NzymCOP21 explored. The limited supply of fixed income instruments with the “green bonds” label is boosting their value.

Green Bonds: 3x Annual Market Growth

To be clear, green bonds are the Teslas of the fixed income marketplace. ClimateBonds.net reports the "labelled" green bonds market continues to grow (to $70B at September 2015), with the first green bonds from India, Brazil, and China. Standard & Poor’s in March said China’s entry into green bonds market would be a “game-changer.”  The growth rate has been impressive. According to the Climate Bonds Initiative (CBI), $11B in green bonds were issued in 2013 (that's 3x 2012) and nearly $37B were issued in 2014 (that's 3x 2013). Another 3x growth is predicted for 2015 to  $100B. Well, unless you read the WSJ headlines in June 2015,  “‘Green Bond’ Sales Struggle.”

The green bonds market came into being in 2008 with the help of multilateral banks such as the World Bank in partnership with Skandinaviska Enskilda Banken for pension funds in Northern Europe. Labelled green bonds enable capital-raising and investment for new and existing projects with environmental benefits. Practitioners continue to seek standards that can scale; currently issuers apply the voluntary Green Bond Principles. Critiques of labelled green bonds include:

• Are these green bonds “additional”? That is, do they finance projects that would not be funded otherwise?


• How green are green bonds? The verification of the actual environmental benefits may be lacking. While acknowledging “All green bonds are investment grade; many have been two or three times oversubscribed,” The Economist in 2014 wondered “what makes a green bond grow?”

The green bond market, like any niche, is prone to bubbles as increased demand meets limited supply. Barclays analysts argue that investors have been paying an extra 20 basis points for “that warm and fuzzy feeling of being environmentally friendly" while questioning the environmental credentials of the underlying investment. As with so many products in the sustainability realm, heightened expectations mean increased scrutiny of the underlying.

Are the green bonds green enough? In Canada, TELUS' real estate partnership issued its first green bonds to finance TELUS Garden, their new headquarters in Vancouver, British Columbia. But is the ongoing monitoring of green bonds' underlying holdings transparent? Will tracking metrics ensure it is green enough? As the CFA Institute’s Usman Hayat points out, green bonds can be issued by any old grey company. As with so many of the moves to better value social capital and natural capital in the past decades, it is up to the first movers and activists to shape the field. Voluntary "Green Bond Principles" map a process but no standards. With the growing demand for a clear definition in green bonds, the World Bank issued a green bonds impact report in July 2015.

What's in a green bond? 

Why should companies and citizens care? Well because marginal green projects that need financing can tap this stream of money.

The majority of labelled green bonds proceeds are financing renewable energy or energy efficiency (in Buildings and Industry). Defined more broadly, climate-aligned bonds universe is $597.7B in 2015, estimated by Climate Bonds Initiative by sizing the unlabelled climate-aligned bond market and the labelled green bond market. The 20 percent increase from 2014 is largely attributed to the rapid growth of the green bond market accounting for almost a third ($95B) of 2015’s increase.

The growth in size of labelled green bond market is also driving an increased diversity of the underlying projects including corporate issuance in waste and transport sectors, U.S. municipal green issuance, the first green covered bond issues and more high yield green bonds. Toyota issued the auto industry’s first-ever Asset-Backed Green Bond in 2014 and dipped back in for $3.5B in 2015 with Citi/BofA/Merrill Lynch/Credit Agricole, and committed to use the proceeds of the Green Bond toward the purchase of retail finance contracts and lease contracts for Toyota and Lexus vehicles that met self-described "high green standards."

Are the big banks getting in the business of green bonds? Yes, rapidly. When clients demanded some of that good green stuff they had no product. With their New York skyscraper with floors of fixed income analysts, marketers and a pipeline of corporate clients wanting to be banked, the firm turned around and rolled out green bonds within a year.

Municipal bonds are beloved of investors because of their tax-preferred status. So cities looking to green their future have dipped into green bonds. Even beleaguered growing cities like Johannesburg, South Africa is touting oversubscribed green bond infrastructure issuances. Massachusetts claims their 2013 offering of a 20-year $100M issue was the first green bond in the U.S. A new A-rated (investment grade) green bond for SolarCity underwritten by Bank of America Merrill Lynch for solar assets raised $123M. According to Bloomberg, the green bonds has often been pitched to investors as “carrying the same prices as conventional bonds that do not come with a green label."

Does COP21 mean bigger green bonds? 

Heading into COP21 in Paris, investors are calling for clarity on the price of pollution, and who exactly will pay. Initiatives like Climate Bonds Initiative by Sean Kidney have helped grow the market, and deserve our respect for their work. One positive outcome from COP21 may be increased demand for  investment products like green bonds. Research by 2 Degrees Investing Initiative suggests the strategic asset allocation of portfolios will need adjusting. Norway’s Oslo Bors stock exchange is the first to separately list green bonds.

The financing for green projects needs to grow hugely, and green bonds are a big part of the opportunity. The International Energy Agency (IEA) estimates that at least $53 trillion (T)  must be invested over the next 20 years in renewable energy and energy-efficiency projects and that meeting this goal will require an additional $1T a year in additional investment.

Most interestingly, the IFC and 3 banks are scoping “an innovative new Rainforest Bond.” Whether investors care about the green label or not, in this low rate environment investors will take any decent yield. They may even pay a premium.

While it waits for the Fed's inevitable interest rate rise, the fixed income market works, inefficiently. This time the environment-friendly financiers make a little extra. Let's hope it goes to financing "additionally" of that extra wind turbine, Tesla, or rainforest.

Image credit: John Louis, Flickr

Climate Week NYC was packed with high profile pledges and policy announcements calling for hard core actions that treat carbon emissions as an extremely hazardous form of air pollution. Acting efficiently on those promises is a different matter, one that requires precise new tools for collecting data, identifying problem areas and measuring progress. And, while the main focus is on carbon emissions, other forms of air pollution require attention, too.

That's where today's sensor announcement by Google and and the recently unveiled "stealth" startup Aclima comes in.

New tools for air pollution

Before we get to the announcement, let's pause for a look at the bigger picture. The U.S. Environmental Protection Agency (EPA) collects data from a network of air pollution monitors stationed all over the country, and that's where the problem is. The key word is stationed, as in stationary. Conventional air quality monitors sit in one place. They may be transportable, but they are not mobile.

Partly because of their immobility, conventional air quality monitors are especially limited in their ability to pinpoint problem source in complex urban environments, where airborne particulate matter leads to asthma and other serious health issues.  Conventional monitors are also expensive and they fall far short in today's world of connectivity, open source data sharing and user-friendly interfaces that the general public can understand.

Air pollution and the Aclima consortium

EPA identified these shortcomings in urban air pollution monitoring several years ago, and in 2013 the agency launched a public-private effort to develop a highly mobile system of air pollution sensors. EPA spells out the consortium's a five-year mission:

...to advance next generation air quality sensing technology and provide more mobile and less expensive air sensing capabilities for citizens, communities, air quality managers, businesses, and others interested in air quality issues.

Aclima was tapped to lead the consortium, partnering with Lawrence Berkeley National Lab, UC Berkeley, University of Illinois at Chicago, and EPA to develop a new ultra-small sensor for detecting particulate matter.

Aclima has also been working under the radar with Google for several years, providing that company with a stationary network of 6,000 indoor air quality sensors for 21 of its offices globally.

Last June, Aclima snuck out from under stealth mode, announcing a mobile air pollution monitoring partnership with Google as well as members of the aforementioned consortium, helped along by a highly credentialed advisory board. The company describes its mission in somewhat more poetic terms than EPA's remit:

What if we could see the air around us? How many messages lie hidden in a passing breeze? Live Aware with Aclima. Our environmental sensor networks turn billions of data points into powerful insights -- making the invisible, visible.

In the words of Aclima CEO and co-founder Davida Herzl, the partnership with Google brings to life a "complete  system to map environmental quality in an entirely new way, enabling us to see how our buildings, communities and cities live and breathe.”

"It's hard to manage what is difficult to measure, especially when it comes to our environment, Herzl explained by email to TriplePundit. "We see a future where sensors help us understand what we're putting into the environment and what we're putting into our bodies. This new class of tools can provide a level playing field for making decisions. Now more than ever, we need to work as a global community to cap and reduce pollution that directly affects human health and long-term resilience."

With full Internet connectivity, the system provides for real time mapping and monitoring, scaling from the interior of individual buildings up to an entire city.

Mobile air pollution monitoring for California

TriplePundit caught up with Aclima last August, after Aclima pilot-tested its mobile air pollution sensors in Denver in a collaboration that drew NASA into the fold as well as EPA. Strapped to three Google cars for one month, the Aclima sensors collected approximately 150 million data points including carbon dioxide, carbon monoxide, nitrogen dioxide, nitric oxide, ozone, methane, particulate matter including "black carbon" and volatile organic compounds. The data was also correlated with information from conventional, stationary EPA monitors.

In today's announcement at the 11th annual Clinton Global Initiative, Aclima has committed to an expanded mobile air quality monitoring effort, bringing the company closer to a future in which "hyper-local air quality will be as accessible as the weather."

The new initiative pairs Aclima sensors with Google Maps in at least three major urban centers in California, starting with Los Angeles, San Francisco, and the Central Valley regions. It's an ambitious rollout, and if it succeeds the payoff will be equally significant. According to Aclima, the aim is to put the system through its paces in a "robust testing ground" where the economic impacts of air pollution will come into foucs, especially regarding the public health costs of ozone and particulate matter leading to asthma.

Google Earth's manager for outreach, Karin Tuxen-Bettman, emphasized that the end goal is to make environmental data accessible to the general public as well as to planners and regulators:

...We hope this program not only empowers people to make more informed everyday decisions, but also incites dialog about how to make long-term improvements to air quality.

The California initiative will provide aggregated data on two platforms. One is Google Earth Engine, the geo-spatial analysis platform for Google Maps. The target users for this platform will be EPA scientists as well as experts with the Environmental Defense Fund.

The other platform consists of air quality maps overlaid on Google Earth and Google Maps, a format easily accessed and understood by the general public.

Air pollution: The Volkswagen connection

EPA has recognized that conventional air monitoring systems are inadequate for managing urban air pollution, and one immediate result of the Aclima - Google initiative will be improved management of air pollution from buildings and other facilities. The initiative will also help identify air pollution issues related to non-point sources, namely, vehicles.

A long term resolution for non-point sources depends on emissions regulation, and as the Volkswagen scandal demonstrates, the existing technology for auditing vehicle emissions can be -- and is -- easily circumvented by auto manufacturers.

As with stationary air quality monitoring, EPA has recognized that a leap in technology and process is required to ensure that vehicles perform as promised, and in a press conference last Friday the agency outlined its plans for taking its procedures to the next level.

TriplePundit will take a closer look at EPA's plans for Volkswagen and other vehicle manufacturers later this week, so stay tuned.

Image credit: Denys Nevozhai/Unsplash

Most of us want to know why. What would cause a leading car manufacturer, with an accomplished track record in green technology, to deceive consumers on its emissions standards?

But recent analysis published in the Huffington Post highlights another probing question: Why didn't we see the problem?

Business Editor Alexander Kaufman suggested in his column on Friday that the declining amount of coverage by the automaker concerning its emissions records in its yearly sustainability reports should have tipped off investors. It should have flagged the attention of the Environmental Protection Agency as well.

"Since 2010, the automaker's sustainability reports have devoted less and less room to discussing non-carbon gas emissions and their effect on the atmosphere," noted Kaufman. He pointed to a report published by data firm eRevalue which analyzed VW's sustainability reports and determined that its state-of-the art emissions technology has received less and less reporting over the last five years.

This may not sound like a very scientific way to analyze whether a company is being transparent, but as Huffington's Executive Editor, Emily Peck noted, sustainability reports are meant to do more than make the company sound good. To the discerning and caring consumer, corporate social responsibility reports are a window into a company's soul, so to speak. To the investor, they show in practical terms, how that investment is furthering environmental goals it promised to attain with his or her money. For a company like Volkswagen, which has won awards for its environmental advances at its Chattanooga TN plant and other facilities, those details are the underpinnings of its credibility.

So why didn't investors notice that the data was no longer being highlighted in its CSR reports?

And why did it take a university conducting routine performance tests to alert the EPA that the emissions are as much as 40 times higher than they should be?

As Peck noted, the fact that the automaker's sustainability reports have been less than forthcoming when it comes to its technological challenges don't just cast a pall over the corporation. It runs the risk of tarnishing the CSR movement, which succeeds because consumers believe companies can and will be honest about their sustainable business goals and progress.  But it also gives all of us plenty to reflect about how we all -- investors, consumers and federal agencies alike -- missed the signs that would have prompted more questions and more emissions testing. Validating data doesn't call companies into question. It helps to underscore the accomplishments when they are made, and ensure mistakes aren't missed when they truly matter.

Image: Gerry Lauzon