Search

Who should pay for the impacts of climate change? This conundrum was at the center of nine class action lawsuits filed by Farmers Insurance in April against dozens of cities in the Chicago area for failing to prepare for the floods that hit Illinois last spring. The insurance company argued that local governments should have known that rising global temperatures would result in heavier rains and did not do enough to secure sewers and storm drains. But, in a surprising turn of events, Farmers withdrew the suits last week, the Chicago Tribune reported.

In a statement, company spokesman Trent Frager said that Farmers initiated the lawsuits to recover money on behalf of its policyholders for losses that could have been avoided by municipalities, as well as to encourage cities and counties to take more preventative actions to reduce the risks of future natural disasters. But it seems the threat of legal action was enough to accomplish the insurance giant’s goals.

“We believe our lawsuit brought important issues to the attention of the respective cities and counties, and that our policyholders’ interests will be protected by the local governments going forward,” Frager said in the statement. “Therefore, we have withdrawn the suit and hope to continue the constructive conversations with the cities and counties in Chicagoland to build stronger, safer communities.”

Many analysts in the environmental law and insurance industry thought the lawsuits were both ambitious and problematic – but represented the first in a wave of legal actions against municipalities for the impacts of climate change.

"It's a long shot for the insurance companies, but it's not completely implausible, and if you have enough cases like this going forward it might build some helpful precedent," Robert Verchick, former member of President Barack Obama’s Climate Change Adaptation Task Force, told Reuters last month.

The irony of the lawsuits, of course, was Farmers’ claim to recoup damages for its policyholders, but these policyholders – residents of the localities named in the suit – would be paying the costs of any money awarded to Farmers through their taxes.

The city of Chicago defended its disaster preparation and climate adaptation efforts, pointing to its comprehensive Climate Action Plan and its recent infrastructure investments, Reuters reported. But Farmers cited the city’s plan as evidence that officials were aware of the risks and did not adequately prepare for them.

Attorneys for the jurisdictions named in the suit had planned to argue that government immunity protects them from such prosecution, Daniel Jasica from the Lake County State’s Attorney’s Office told Reuters. The immunity defense has worked before, Reuters reported, resulting in the the dismissal of several class action lawsuits against the Army Corps of Engineers for failing to secure levees that breached during Hurricane Katrina.

While these Chicago-area cities may be off the hook for the costs of last year’s flood, industry observers think we may see more lawsuits from the insurance industry debating the question of who pays for the effects of climate change. Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School, told Environment and Energy Publishing that future legal actions may include professional malpractice claims against architects and engineers who build structures that don’t withstand predictable weather events or breaches of contract like a farm that can’t deliver oats to a cereal company because of a drought or flood.

Other experts think Farmers' lawsuits represent a growing tension between insurance companies and governments over who is liable for the costs of natural disasters – at a time when damage from such calamities is on the rise, Environment and Energy Publishing reported. Insurers have been lobbying Congress to fund disaster readiness efforts for years, such as building hurricane shelters. But politicians are more willing to spend money to clean up a natural disaster that has already happened, rather than fund projects that seek to prevent damage from future catastrophes. Maxine Burkett, associate professor at the University of Hawaii Law School, told the publication that government agencies and private developers may be found negligent in the future for building developments that can’t withstand the effects of climate change – rising sea levels, storm surges and heavier rain.

Even though Farmers withdrew its case, Burkett thinks the company’s message was received by cities and the building community.

"Lawsuits like this are really good at putting municipalities and other entities that are building in dangerous areas on notice with regards to the impacts of climate change," she said.

Image credit: Flickr/U.S. Army Corps of Engineers

Passionate about both writing and sustainability, Alexis Petru is freelance journalist based in the San Francisco Bay Area whose work has appeared on Earth911, Huffington Post and Patch.com. Prior to working as a writer, she coordinated environmental programs for Bay Area cities and counties. Connect with Alexis on Twitter at @alexispetru

Technology has significantly impacted the way that we live our lives in the 21st century, making most traditional systems more efficient or distilling antiquated systems. The privilege of having access to a wealth of information at any given time has also made us a global society that is plugged in to other people’s problems. In this interconnected landscape, it is the tech geeks who are using their superior skills for good by posing as the new wave of activists challenging systems of injustice and oppression with something as small as a carefully designed smartphone app.

Take for instance tech millionaire Karl Mehta, who sold his online payment business Playsap to Visa back in 2011 for a hefty $240 million. In lieu of retirement and endless leisure on a private island, Mehta made better use of his time and his talent by launching Code for India — an initiative that partners with nonprofits and NGOs to help solve critical issues in India.

Housed in Mountain View and Bangalore, India, Code for India kicked off a 24-hour hackathon in early May that brought together more than 224 programmers to address a variety of challenges facing the country including financial literacy, girls’ education, voting and natural disaster management, among other things.

“Code for India is special because hundreds and hundreds of NGO’s in India, and instead of starting another NGO to try to focus on education, or healthcare, or crime, or women’s issues, we can cut across horizontally, and provide a technology backbone to dozens or even hundreds of NGOs that are already doing wonderful work,” Mehta told Business Insider.

Code for India, and other programs that have adopted the “code for” moniker and skills-based volunteering model, are increasingly providing new opportunities for those in the tech field to lend their talents to social solutions without having to give up their day jobs. Highly skilled and talented computer professionals are trading a stint in the Peace Corps for a laptop and air-conditioned offices without sacrificing their ability to contribute positively to the world around them.

Similar organizations that are brilliantly tapping into this growing talent pool of high-tech volunteers to assist nonprofits already doing good work in brainstorming ways to scale their businesses include Goodie Hack, Code for America and Random Hacks of Kindness, among others.

As is the case for Code for India, the hackathon was only the first phase of several projects that were sprung from the 24-hour ideation session. While there is no predicting what level of influence will spur from such initiatives, the partnering of tech talent, large companies and entrepreneurs to solve global issues will rest at the epicenter of innovation in the way we think about creating sustainable change.

Image courtesy of Menlo Ventures

By Camille Szramiak-Arneberg

What they say seems to be true: Bigger isn’t always better, and the trend of “tiny” that has been sweeping the country affirms that truth.  Several years ago Coca-Cola debuted its tinier 7.5-ounce soda cans. T.G.I. Friday’s and Ruth Chris’s Steakhouse, among dozens of other eateries, now offer smaller portion sizes at their restaurants, and smaller cars such as the popular Honda Fit and Ford Fiesta have replaced the super-sized Hummer as the shrewd vehicle of choice. Achieving gains by downsizing is a common theme in sustainability, and much of the tiny movement has to do with the health and environmental consciousness of millennials and a desire to minimize carbon footprints and waist sizes.

Choosing smaller options such as a 7.5-ounce rather than a 12-ounce can of soda for long-term benefit is often a no-brainer. But what if the tiny movement applied to your personal living space? While the average American home size has actually grown over 140 percent from 1950 to 2012 the burgeoning Tiny House Movement is fighting this trend and taking the “less is more” axiom to the next level. In about 400 square feet (and sometimes as little as 100 square feet) tiny homes capitalize on smart and creative design to deliver a fully functioning home with a greatly minimized structural, environmental and financial footprint.

Tiny houses have been on the fringes for the past few decades, but some think that their moment has finally come as the average family size shrinks and more people seek debt-free, minimalist living while decreasing their environmental impacts. According to Kai Rostcheck from the organization I Love Tiny Houses, internet searches for tiny houses have grown 687 percent from March 2004 through December 2013. Even the TV networks are picking up on the trend., and a new show called "Tiny House Nation"  that follows a “new family in each episode as the burst open the doors to the trend of extreme downsizing," is slated to air on FYI (A&E’s lifestyle network) this July.

New companies are popping up that are actually making tiny home building their business like Meka, Tumbleweed Tiny House Co. and ShelterKraft Werks, a company that takes shipping containers that no longer meet regulations to be used for transportation and transforms them into livable dwellings.

While some are attempting to make a business out of the tiny house movement, other companies are looking to integrate tiny houses into their already existing business by lending skills and resources to the movement. For companies with relevant core competencies and a commitment to sustainability, the tiny house movement is ripe with potential.

Earlier this year General Motors engaged with the Michigan Urban Farming Initiative -- a Detroit program that's connecting the dots between recycling, repurposing and sustainable urban agriculture -- to help them build a 320-square-foot shipping container urban homestead. The container home was built with GM employee donated labor and 85 percent recycled materials donated from several GM facilities, including battery cases to be used as bird houses and planter boxes.

This could be an exciting niche for some companies. As reducing carbon footprints continues to be of importance and companies strive to meet waste reduction or waste diversion goals, an appropriate channel to achieve them could be found in tiny houses. Material donations to tiny house projects, especially from companies that produce sustainable products, can be good ways for companies to avoid landfill waste, recycle and reuse scraps, connect with a niche market, and increase their brand equity among a special demographic.  According to Andrew Odom, founder of Tiny r(E)volution and author of “Your Message Here," many people interested in building tiny homes actively and successfully seek out  corporate sponsorships from companies whose values align with theirs, such as Eccotemp (producer of small tankless water heaters) and LP Building Products, to offset costs and obtain materials.

With tiny house sponsorships, companies aren’t limited to reaching just tiny home constructors and owners with their messages. A growing number of people who aren't living in tiny houses still identify with values embodied by the tiny house community and are involved in and attracted to this community that reflects a more minimalist and conscientious lifestyle. These tiny home enthusiasts (but not necessarily owners) can even meet people and date on tinyhousedating.com, a new and increasingly popular dating site for minimalists and environmentalists. Odom, who wrote the script on corporate sponsorships, says the benefits to companies who sponsor tiny houses come in various forms from personal word of mouth endorsements of the company to Facebook audience reach, brand mentions in workshops and how-to construction videos, ads on blogs, and tax-write offs.

And what if the right companies took their sponsorship of personal tiny homes a step further to address an important societal issue? Tiny home villages are becoming a popular and affordable solution to homelessness in states including Wisconsin, Oregon, New York and Texas. Right now crowd-funding campaigns and private donations have made these villages possible. Government housing officials, advocates for the homeless and local churches, however, are exploring the viability of tiny house villages on a larger scale to address homelessness. Companies could play an important role in the proliferation and success of this solution. Land, labor, materials and construction equipment are just some of the things needed to construct these villages -- comprised of houses that cost as little as $5,000 each to build but that are transforming lives.

With promises and potential to deliver big environmental and social change this “tiny” movement might be one for companies to keep an eye on as they look for effective ways to extend their corporate responsibility efforts.

Image Credit: Panza

Camille Szramiak-Arneberg, a graduate of the College of Communication at Boston University, is an independent corporate sustainability consultant with interest and experience in the food and beverage and healthcare industries. She has worked on projects for clients such as Keurig Green Mountain, the World Society for the Protection of Animals, Johnson & Johnson and Nestlé Waters. She is currently working with the Lwala Community Alliance, a nonprofit that addresses women’s empowerment, education and healthcare issues in Kenya. 

For many years a discussion about what Gross Domestic Product (GDP) should include to accurately measure the scope and health of a country’s economy has continued in more or less desultory fashion with little movement to change the indicators — until now.

Why not include sex and drugs in the GDP mix, as Italy and the United Kingdom have done? After all, those are economic activities, right?

The U.K.'s Office of National Statistics announced on May 29 that paying for drugs and sex adds about £10 billion ($16.7 billion) a year to the economy. So, the British government is now including prostitution and narcotics sales in its official GDP statistics.

While illegal activities are a small part of the U.K. economy, only 0.7 percent according to the government’s estimates, the reason for the inclusion is to harmonize economic reporting across the European Union. Prostitution and some drugs are legal in the Netherlands, and the Dutch count those activities in official government statistics. Because prostitution and many narcotics are still illegal in the U.K., the government is using a combination of police seizures and other data to estimate how much money these activities are adding to the economy, according to a news report by CNN Money.

Italy also made a similar announcement last month, saying it would begin measuring narcotics and sex work in its GDP. Other countries besides the U.K. and Italy measure illegal business activity, including Estonia, Austria, Slovenia, Finland, Sweden and Norway.

Will the idea catch on in the U.S.? Well, it already has to a degree, in Nevada, where prostitution is legal. The U.S. Bureau of Economic Analysis measures prostitution as a part of Nevada's state GDP. Presumably, GDP could cover states where marijuana use is legal, medical and otherwise.

But the development in Europe adds a spicy dimension to what GDP should encompass in the U.S. Many view it as an inadequate measure of the nation’s wealth and well-being, noting that more of the human element should be included in it.

A Harvard Business Review blog post noted that GDP is a “distortion of reality that guides us to decisions contrary to what people really want.” And 3p’s 2011 Economics of Sustainability series described the GDP measure as a misleading and perhaps a grossly deficient paradigm.

It’s a debate that pops up every so often, but the activity in the U.K. and Italy could add needed color and reality to the idea that GDP in the U.S. shortchanges human elements in calculating and understanding the totality of economic activity.

 Image: GDP by Simon Cunningham via Flickr

Transforming modern life, the advent of “digital” homes, businesses, governments and societies is yielding tremendous triple bottom line benefits in countries the world over. It has also brought a host of new social and ecological problems and challenges – from the “digital divide” and threats to the security and integrity of vital information to fast growing “mountains” of electronic waste (e-waste).

For the first time, more than 1 billion smartphones were shipped worldwide last year. Phenomenally popular, worldwide tablet shipments rose 68 percent year over year to reach 195.6 million units. Unsurprisingly, e-waste is one of the fastest growing components of our waste stream, forecast to grow by one-third from 2012 levels, to 65.4 million tons, by 2017.

Looking to mimic nature and close the loop on e-waste, the United Nations University Institute for the Advanced Study of Sustainability's (UNU-IAS) “Solving the E-waste Problem” (StEP) Initiative has been working to raise awareness and help governments, businesses, communities and consumers build the institutional frameworks and capacity to reclaim, recycle and capture the tremendous value e-waste contains. Early this past April, StEP hosted its latest E-Waste Academy for Managers (EWAM) seminar in El Salvador, a country in a region where e-waste, both domestic and imported, poses growing triple bottom line threats.

E-waste grows along with rise of middle class consumers

A lot has been written, and justifiably so, about the growing number of people in developing world countries that can now be considered “middle class.” Much of this, in turn, has focused on the rise of a middle class of consumers in the world's two most populous nations – China and India. Growing numbers of middle class consumers and fast growing e-waste volumes pose increasing threats and costs all around the world, however, including across the Latin America-Caribbean (LAC) region.

According to the World Bank, the percentage of LAC region residents considered middle class rose 50 percent over the past decade. Representing 32 percent of regional population, today, for the first time, there are more middle class LAC residents than poor. The rising tide of middle class consumers in the LAC and other developing world regions raises issues of sustainability – social and environmental, as well as economic – to the fore.

Chock full of potentially toxic metals and plastics, discarded consumer electric and electronic (CE) devices, appliances and equipment pose a large and fast growing threat to ecological, as well as human, health and safety. They also present an opportunity to salvage and capture billions of dollars' worth of valuable metals, plastics, glass and other materials.

In a December 2013 study, researchers at U.N. University Institute of Advanced Studies for Sustainability's (UNU-IAS) StEP Initiative and the Massachusetts Institute of Technology (MIT) forecast that the global volume of discarded refrigerators, TVs, cellphones, computers, monitors and other e-waste will swell three-fold over the ensuing five years – by weight the equivalent of as many as 200 Empire State Buildings.

Engaging stakeholders in the Latin America-Caribbean region

Indicative of the lack of capacity to deal with the growing e-waste problem, governments and societies around the world – developed, developing and less developed – are struggling to cope. Despite concerted efforts, most e-waste continues to be simply discarded and dumped – either locally or by “exporting” it to more welcoming locations, developing and less developed countries in particular, where laborers extract valuable materials in unsafe, harmful conditions.

As UNU-StEP highlights in its news release:

“Though it receives far less foreign e-waste than Africa and Asia, Latin America and the Caribbean is a significant and growing destination for the industrialized world’s discarded refrigerators, small home appliances, televisions, mobile phones, computers, monitors, electronic toys and other electronic products.

Per-capita e-waste generation across the 30 countries that make up the LAC region averaged 7.5 kilograms (~16.5 lbs.) and is expected to increase 19 percent, to 8.9 kgs (~19.6 lbs.) by 2017, according to UNU-StEP.

Indicative of an inability to cope with growing e-waste streams sustainably, only one-third of the LAC region's 30 countries have put an e-waste regulatory framework in place. E-waste regulations have advanced furthest in Brazil, Argentina, Colombia, Peru, Bolivia, Chile, Mexico and Costa Rica, and other countries across the LAC region “are proposing or actively working on specific legislation,” UNU-StEP highlights.

There’s a lot of value, and health and environmental threats, being left behind in e-waste. Experts estimate that a mere 10 to 15 percent of the gold in e-waste is being recovered. And it turns out that most of what is being recovered and recycled is taking place in poorer, less developed countries in what’s grown to be an ‘informal’ global network of e-waste importing nations.

As UNU-IAS Director Kazuhiko Takemoto elaborated:

“[T]here is great opportunity in the e-waste recycling industry — a sector valued at US$ 9.8 billion in 2012 expected to reach over US$ 40 billion before the end of the decade. ‘Waste management’ is being reinvented as ‘resource management’ because the resources are just too valuable to squander.”

Urban gold mining

Encouragingly, governments, business people and communities are discovering the literal ‘gold mine’ residing in e-waste streams. More and more gold, silver and other precious metals are being recovered as global CE device sales, trade and waste continue to grow at rapid rates.

The world’s gold supply increased 15 percent, from some 3,900 tons in 2001 to 4,500 tons in 2011, while the price rose from less than $300 to more than $1,500 an ounce, e-waste experts have noted. The amount of gold contained in e-waste totaled 97 tons, 5.3 percent of the world’s annual gold supply, in 2001. That rose to 7.7 percent in 2011, UNU-StEP e-waste experts noted.

Gold and silver aren’t the only valuable metals being discarded in e-waste streams and trash dumps. Significant amounts of increasingly rare, valuable and costly-to-mine metals such as copper, tin, cobalt and palladium are present as well, as are plastics.

Experts estimate that recycling just half the plastics in e-waste from the European Union alone would save 5 million kilowatt-hours (kWh) of energy, more than 3 million barrels of oil feedstock, and eliminate nearly 2 million metric tons of CO2 emissions.

“One day — likely sooner than later — people will look back on such costly inefficiencies and wonder how we could be so short sighted and wasteful of natural resources,” said Ruediger Kuehr, UN StEP's executive secretary. “We need to recover rare elements to continue manufacturing IT products, batteries for electric cars, solar panels, flat-screen televisions and other increasingly popular products.”

UNU-StEP's Regional e-waste management seminars

Its regional EWAM seminars are a core facet of UN StEP's strategic plan to tackle a growing e-waste problem and turn it into a triple bottom line opportunity. By sharing insights on “urban mining” and fostering international linkages and collaboration on sustainable e-waste management, the EWAM seminars, along with complementary events for scientists, are yielding local solutions to a fast growing global problem.

Eighteen participants from 10 LAC countries and three from Africa attended UN StEP's April EWAM seminar in El Salvador. Sponsored by EMPA/SECO, the NVMP Foundation, the U.S. EPA, Nokia, GeSI, HP, Dell and the U.N. International Development Organization (UNIDO) and World Loop, they engaged 14 e-waste experts from leading institutions, such as the U.S. EPA, MIT, Switzerland's World Resources Forum, and multinational precious metal recycler Umicore. Also participating were seven “facilitators” from IT manufacturers including Dell, HP and Nokia, as well as UNIDO.

For more on UN StEP's E-Waste Academy for Managers, check out the program's website.

*Image credits: 1) SVC News; 2) LiveScience.com

Can the primary culprits of global warming be held liable for undermining efforts to combat climate change?  That may sound like something a heavier, bearded Al Gore might have scribbled on a napkin in the middle of the night, but there’s reason to believe that it may not be so far-fetched.  At least, that’s what a trio of high-profile environmental groups are suggesting.

On May 28, Greenpeace, the World Wildlife Fund and the Center for International Environmental Law sent letters to the executives of 35 fossil fuel companies, including ExxonMobil, Conoco and Chevron, asking the question posed above.  They also sent letters to those companies’ primary director and officer (D&O) insurers, asking them a series of questions regarding how coverage for D&Os might be affected by evidence that the insured misled regulators, investors and the public as to the safety and/or risks associated with their products.  The full list of targeted companies is here.  If you’re an energy executive, you should now be very, very scared (and equally interested in the insurance companies’ responses).  The notion even has its own hashtag on Twitter:  #climateliability.

So what’s the legal theory?  As Greenpeace, et al. put it in their letters:

“The corporations who share the majority of responsibility for the estimated global industrial emissions of CO2 and methane over the past 150 years may have been or may be working to defeat action on climate change and clean energy by funding climate denial and disseminating false or misleading information on climate risks.”

They also attached a helpful Annex to their letters, detailing the involvement of the fossil fuel industry, either directly or indirectly, in undermining action on climate change and in climate denial efforts.  According to a recent study, just 90 carbon producers (so-called “Carbon Majors”) are responsible for more than half -- 63 percent of global industrial emissions, in fact-- of the greenhouse gases that cause global climate change.  Of the Carbon Majors, 50 are publicly-traded and investor-owned (just five of which — BP, Chevron, Conoco, ExxonMobil and Shell — produced enough fossil fuel to account for 12.5 percent of human-generated CO2 since 1854).

Publicly-traded companies have certain duties to their investors and to the public, and what they say or fail to say -- particularly concerning risks related to their operations -- can have serious legal consequences.  One thing that a publicly-traded company cannot do, for example, is mislead investors as to “material” facts -- i.e., facts that would influence an investor’s decision whether or not to purchase, sell or hold a company's stock.  Such behavior is more commonly known as “securities fraud,” and it is criminal.  As the Nation puts it, “anthropogenic climate change has been accepted science since at least 1990” — meaning fossil fuel companies have been aware for a quarter-century that they are contributing to global warming.  So, to the extent that publicly-traded Carbon Majors were hiding -- or working to delegitimize the science regarding -- climate change-related risks associated with their products, they may be guilty of fraud.  That, at least, seems to be the theory.

And there’s more.  Last month, insurance giant, Farmers, filed nine class action lawsuits against dozens of localities in Illinois, accusing them of failing to prepare for severe rains and flooding -- the costs of climate change, in other words.  Farmers’ argument is that local governments should have known that the rising temperatures caused by global warming would result in heavier rains and, therefore, they should have taken certain precautions.  Yet, according to Farmers, the local governments failed to sufficiently prepare (i.e., they neglected to fortify the sewers and storm drains).

Since we’re on the subject, there is even more encouraging news, this time from the federal government.  Last week, the Environmental Protection Agency (EPA) proposed the “Clean Power Plan” rule -- the first-ever rule aimed at regulating CO2 emissions from America’s existing coal-fired power plants.  When combined with forthcoming emissions targets for each state, the new carbon regulations will aim to cut CO2 emissions to 30 percent below 2005 levels by 2030 (or 17 percent from 2013 levels).

This being 21st Century America, the EPA’s action -- and the president’s support thereof -- has been called Obama’s “War on Coal," and it is a war that is desperately needed.  As I have summarized here, coal is really bad for the environment, and, as a majority of Americans now recognize, climate change is real and it is probably going to kill us all unless we do something really drastic to stem the tide.

Yet, for the Carbon Majors, there is a hell of a lot at stake.  As Chris Hayes pointed out in a remarkable recent piece, if we are serious about saving our planet, the Carbon Majors are going to have to forfeit trillions of dollars of wealth -- an ask so monumental that the only real historical parallel is the abolition of slavery.  Which is to say that there is an immense amount of work to do and there is sure to be a brutal fight ahead.  However, these recent developments -- new legal avenues to hold companies’ liable for climate change; Obama ramping up his “War on Coal” -- are legitimate steps forward, and ones to watch closely in the coming years. Image credit: Flickr/Steve Brady Michael Kourabas is a lawyer and business development professional, currently working for an international law firm in New York. He also serves as an Editorial Adviser to radioBANG. His experience includes international human rights, CSR, and educational policy work in both the private and public sectors.

Australian organisations are falling behind when it comes to the implementation of corporate social responsibility (CSR), reveals this year's annual review from the Australian Centre for Corporate Social Responsibility (ACCSR).

The State of Corporate Social Responsibility in Australia and New Zealand Annual Review is the largest on-going research study into CSR capabilities and practices in Australia (and one of the largest in the world). It analyses the level of social responsibility that organisations across all sectors demonstrate when implementing their policy and practices. This is the seventh Review since 2007.

A record 990 respondents, spanning all business, industry, community and government sectors, filled in the survey, which this year was run in conjunction with Deakin University and Wright Communications in Auckland.

While reflecting on the progress in CSR awareness and implementation tools over the past decade, respondents show frustration at the slow pace of organisational and systemic implementation.

ACCSR md, Dr Leeora Black, said that many survey respondents attribute the slow progress to an unsympathetic public policy environment and lack of leadership.

“Respondents to the survey are calling for more leadership from business, government and the academic sector. They hope that CSR will have more government support and believe that mainstreaming would be assisted by more mandatory CSR actions,” adds Dr Black.

Dr Black believes that future progress in CSR will be closely tied to innovation in the arenas of supply chain, environment, reporting and collaboration with stakeholders.

Dr Black also believes that going forward organisations simply need to do more on a systemic, rather than just organisational basis: “Only in this way can we address deep-rooted social, economic and environmental problems to create lasting value for both organisations and their stakeholders."

Deakin University Centre for Sustainable and Responsible Organisations Deputy Director, Dr Colin Higgins agrees that innovative thinking and strong leadership is required and that the report is a wake-up call for education, business and government.

“In previous years The State of CSR Annual Review has identified securing organisational buy-in as the greatest obstacle for progress in this area and this year‘s question about the development of CSR points to the same challenge,” said Dr Higgins.

Despite a general lack of integrated CSR practice, the survey did highlight examples of good CSR leadership within Australian organisations and produced a CSR Top 10 list.

The 2014 CSR Top 10 organisations are: ABC, ARUP, GHD, Melbourne Water, National Australia Bank, Newmont Mining Corporation, PwC Australia, Rio Tinto, The University of Queensland and Main Roads Western Australia.

 

Picture credit: © Suphakit73 | Dreamstime.com
 

Researchers at Ford and Heinz are investigating the use of tomato fibres in developing sustainable, composite materials for use in vehicle manufacturing. Specifically, dried tomato skins could become the wiring brackets in a Ford vehicle or the storage bin a Ford customer uses to hold coins and other small objects.

“We are exploring whether this food processing byproduct makes sense for an automotive application,” said Ellen Lee, plastics research technical specialist for Ford. “Our goal is to develop a strong, lightweight material that meets our vehicle requirements, while at the same time reducing our overall environmental impact.”

Nearly two years ago, Ford began collaborating with Heinz, The Coca-Cola Company, Nike Inc. and Procter & Gamble to accelerate development of a 100% plant-based plastic to be used to make everything from fabric to packaging and with a lower environmental impact than petroleum-based packaging materials currently in use.

At Heinz, researchers were looking for innovative ways to recycle and repurpose peels, stems and seeds from the more than two million tons of tomatoes the company uses annually to produce its best-selling product: Heinz Ketchup. Leaders at Heinz turned to Ford.

“We are delighted that the technology has been validated,” said Vidhu Nagpal, associate director, packaging R&D for Heinz. “Although we are in the very early stages of research, and many questions remain, we are excited about the possibilities this could produce for both Heinz and Ford, and the advancement of sustainable 100% plant-based plastics.”

In recent years, Ford has increased its use of recycled nonmetal and bio-based materials. With cellulose fiber-reinforced console components and rice hull-filled electrical cowl brackets introduced in the last year, Ford’s bio-based portfolio now includes eight materials in production. Other examples are coconut-based composite materials, recycled cotton material for carpeting and seat fabrics, and soy foam seat cushions and head restraints.

 

Ed note: This article is part of a short series on financing smart city infrastructure, sponsored by Siemens. Please join us for a live Google Hangout with Siemens, PwC and Berwin Leighton Paisner on June 12 at 10 a.m. PT/1 p.m. ET, where we’ll talk about this issue live! RSVP Here.

It’s almost a cliché these days to say that infrastructure development is a crushing and highly complex problem, mainly because there’s so much to do but not enough financial resources available to do it. The trick, then, is how to address infrastructure needs.

That’s why a new report from Siemens, PricewaterhouseCoopers and Berwin Leighton Paisner, entitled Investor Ready Cities: How cities can and deliver infrastructure value, is both timely and valuable.

The report examines in some detail how cities that have “the appropriate foundations of institutional stability can leverage financial mechanisms to their advantage to help deliver the infrastructure that is so critical to their future.” It looks at the needed steps to “create a governance, legal and regulatory environment which will support harnessing the full range of potential sources of funding.”

The 108-page report illustrates its basic themes through a series of case studies than span the globe to show how cities are addressing their infrastructure needs. Snapshots of the studies follow.

Delhi

At 17.8 million people, Delhi is the fourth most populous city in the world and has intense traffic congestion. In the mid-1990s the city’s local government decided to build a metro rail system. This was an “immense undertaking,” the report says, with a planned track length of 400 kilometers (248.5 miles) that placed the new network on a similar scale to those in London and New York, and larger than Paris.

The geographic footprint of Delhi — basically circular — meant that the usual grid rail system was not possible. Urban density and a “plethora” of old, fragile and historic buildings also added more complexity. Financing the new metro was relatively straightforward, with the majority of funds coming in the form of ‘soft’ loans (with a low interest rate and long payback period) from the Japan Bank for International Cooperation (JBIC) and Japan International Cooperation Agency (JICA), as well as equal-sized grants from the governments of Delhi and India. The city and national governments were determined to achieve strong governance, by forming the Delhi Metro Rail Corp. (DMRC) in 1995. DMRC was able to operate with a minimum of bureaucratic and political interference.

In addition, the agency adopted an innovative approach to purchasing that enabled greater budgetary control: fixed-price contracts that featured substantial penalties for late delivery, as well as rights to quality assurance and agreed procedures. This meant greater cost certainty and motivated contractors. Construction began in 1998 and is expected to finish by 2021. As of May 2013, the first two phases (costing $2.7 billion) have been completed, and work is ongoing on the third of the four phases.

“The outstanding success of the Delhi Metro construction has demonstrated the benefits of strong governance, and shown how independence from larger bureaucracies and political interference can improve efficiency,” the reports reads. Additionally, innovative procurement methods create an environment where contractors’ goals are closely aligned with those of the owners.

Singapore

Singapore’s dramatic population growth, from 1.9 million in 1965 to 5.3 million in 2012, meant that the city-state’s water system — both supply and delivery — needed a huge upgrade. “Historically, Singapore’s water came from two sources, rainwater catchment and import from Malaysia. Street vendors sold water, and not all houses were sewered,” the report says. Today Singapore has a more diversified water supply, full sewer coverage and unaccounted-for-water below 5 percent — one of the world’s lowest loss rates.

Singapore deployed three approaches to achieve success:

• User prices reflect the full economic cost of water, without subsidy


• A culture of water conservation through mandatory and “nudge” measures was established


• Harnessing technological innovations in water supply, including desalination and water recycling, and increasing its domestic rain catchment area to about two-thirds of its land mass.

The nudge conservation measures included educating users through a water efficiency labeling scheme, water-based sporting, and community spaces/events and water information (delivered both online and through a water-themed visitors center).

The report concludes that: “Rising energy prices have highlighted the importance of managing input costs in water systems, especially those where desalination and recycling are part of the supply mix. Here, research and development as well as efficient, timely procurement of appropriate technologies contribute to managing energy costs.”

Chattanooga

This city in the Tennessee River Valley “has faced repeated economic adversity, and each time has found a way to reinvent itself through the clever use of its natural assets, infrastructure and smart technology,” the report says.

It was in a steep decline starting around 1950; the population dropped by 20 percent from that year to 1990, and it lost important economic drivers. Suburbanization also fragmented the community: Roads were constructed to serve the suburbs, but the critical infrastructure needed to support that development did not arrive with it. A lack of public transport forced people into their cars, contributing to the pollution that already plagued the city. (It was named the most polluted city in the U.S. in 1969.) By the mid-1980s it was apparent Chattanooga was heading towards a seemingly irreversible decline. City leaders began a process that would lead to recovery and secure strategic investment, known as “The Chattanooga Way” – including planning, citizen engagement, public-private partnership and as a result, transformative projects.

Fast forward to the 2009 Recovery Act: The city used recovery act funds to provide the latest technology-enabled, fiberoptic smart grid energy network -- providing more secure, more affordable, and more efficient power supply to homes and businesses throughout the city. The first phase of the network came online in 2009. Through the smart grid solution, “businesses could invest in Chattanooga knowing that they had the highest levels of power reliability. Chattanooga had re-established its credentials as a center for energy security and city resilience.” The report concludes that in a very real way, the city gave “power back to its people.”

Tomorrow we'll take a look at more case studies from the report, including success stories in London, Rio de Janeiro and Colombia's second-largest city, Medellin. 

Image credit: Flickr/ankuryadav

Join Triple Pundit for a live Google Hangout with Siemens, PwC and Berwin Leighton Paisner on June 12 at 10 a.m. PT/1 p.m. ET, where we’ll talk about how to finance cities of the future. 

Climate change, resource scarcity, social responsibility and good citizenship – professional investors are increasingly factoring sustainability into governance policies, portfolio decision-making processes and investment allocations, according to a new study from PwC's Investor Resource Institute.

Indicative of the increased attention institutional investors are paying to sustainability, Stanford University Board of Trustees made headlines recently, announcing that university endowment funds will not be invested in some 100 publicly traded companies whose principal business is investing in coal. Moreover, they stated that the university will divest its current holdings in the shares of these companies.

Aiming to assess the influence of sustainability issues among large professional investment companies, a broad mix of institutional investors – asset managers, pension funds, mutual funds, hedge funds and others – responsible for managing over $7.6 trillion in assets responded to PwC Resource Institute's survey. As the institute's leader, Kayla Gillan, explains in a press release:

“Our research sought to gain insight from investors about how they are incorporating issues of climate change, resource scarcity, extreme weather events and evolving corporate responsibility expectations into their investment decisions and strategies. We found significant evidence that an effect is occurring today—and that it is likely to increase in coming years.”

Factoring sustainability into investment decision-making

Four out of every five institutional investment companies responding to PwC's survey said they considered a variety of sustainability issues in at least one, if not more, investment contexts in the past year. More than four of five (85 percent) said they anticipate doing so three years hence.

PwC's study also revealed that institutional investors are not satisfied with the amount or quality of sustainability reporting and the information they are able to obtain from corporate managements. “Investors want to be part of the sustainability dialogue,” PwC points out. “And they want direct engagement with the companies in which they invest.”

As Ms. Gillan notes in the introduction to the report, entitled Sustainability goes mainstream: Insights into investor views:

"[B]ack in 2009 over 560 investment institutions with more than $18 trillion in assets worldwide signed on to the United Nations' Principles for Responsible Investment (PRI) Initiative.

That number has grown to over 1,200 with some $34 trillion in assets under management in the past five years, as institutional investors increasingly see the importance, and value, of integrating environmental, social and governance issues into their strategic decision-making and portfolio management processes."

Motivating factors

Why are institutional investors increasingly factoring sustainability issues into their investment decision making? PwC's research reveals a number of reasons. At bottom, they have apparently made a judgment that the problems and challenges associated with sustainability issues – climate change, extreme weather events, resource scarcity, social responsibility and good corporate citizenship – expose the companies they invest in to greater risks and potential loss than conventional economic/financial accounting and reporting lets on.

Conversely, they see benefits, and greater value, in companies that are tackling and coming to grips with sustainability issues and the social and environmental, as well as economic and financial, challenges they pose.

As the PwC chart below shows, reducing risk was the most oft-cited primary driver for institutional investment companies to factor sustainability issues into their decision-making processes.

The following chart shows the organizational context within which institutional investors deem sustainability most relevant:

PwC Resource Institute researchers also found that the percentage of institutional investors factoring sustainability issues into their decision-making processes varies with the dollar-value of assets under management:

The study also revealed that many investors aren't satisfied with corporate sustainability reporting and disclosure:

That's not deterring institutional investors, however. They expect sustainability to factor into their decision-making to an even greater degree in future.

*All images credit: PwC Resource Institute, 2015, "Sustainability goes mainstream: Insights into investor views"