Search

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.

Yesterday, we went over a few success stories told in timely and valuable report from Siemens, PwC and  Berwin Leighton Paisner. Entitled Investor Ready Cities: How cities can and deliver infrastructure value, 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.”

Here are three more inspiring snapshots that tell the story of cities moving towards a more sustainable future.

Medellin

The second-largest city in Colombia, with a population of nearly 2.2 million in 2005, saw a threefold increase in population over a 20-year period. This came at a time when governance and power was concentrated at the national level and control of financing was distributed to nationally important projects. As a result, informal settlements appeared on the city fringes and up onto the precarious hillsides that surround the city, leaving residents disconnected from the commercial heart of the city and the employment opportunities they had sought to access.

“Poor infrastructure and lack of opportunity led to Medellin experiencing some of the highest levels of crime endured by any city across the globe,” according to the report.

In 1991, a new constitution increased the influence and powers of municipal governments. For Medellin, this meant the power, authority and responsibility to tackle these issues through strategic intervention that was to literally change the city landscape.

Starting in 2000 and over the next 10 years, a succession of mayors created and implemented an integrated urban development plan. The vision encompassed a comprehensive strategy that sought to tackle issues facing the most deprived neighborhoods of Medellin and to identify solutions to the growing problem of poor connectivity, education and governance, and the use of public space. PUIs (Integral Urban Projects) were identified, introducing major infrastructure projects; these projects also provided an anchor for local development and a catalyst for the enhancement of public and green space. The plans sought to recover the most marginalized areas of the city, in an effort to invigorate local communities and re-engage the dispossessed.

The first major infrastructure project to take place under the PUI was the gondola system ‘Metro Cable, Linea K.' The cable car, opened in 2004, stretches 2 kilometers (1.2 miles) into the neighborhood of Santo Domingo -- creating a link directly from the city center to one of the city’s poorest areas. Travel times of up to 2 hours were reduced to 7 minutes on the cable car.

“As a transport solution success, it is worthy of recognition in its own right, but when delivered in conjunction with the urban development plan, the story is one of social mobility and revived community integration that is far greater than the transport story alone,” the report says. Cable car stations were made places of social integration through IT training and an adjacent library.

By connecting communities, the report continues, there has been a significant decrease in the levels of crime, with violent crime reduced by nearly 80 percent. “Commercial activity is said to have increased by 400 percent, and new businesses have developed along the route of the cable car, creating employment for less skilled workers.”

Medellin has demonstrated the “benefits of applying the ‘correct’ solution for its city, which as a consequence has made Medellin one of the most vibrant and commercially active cities in Latin America.”

London

Transport for London (TfL), a statutory body that was set up in 2000, is responsible for the planning, delivery and day-to-day operation of London’s public transport system. Its main mission is to provide or secure the provision of public transport passenger services to, from or within Greater London. TfL’s largest current infrastructure project is Crossrail, which involves construction of 21 kilometers (13 miles) of new twin-bore tunnels under central London, construction of nine stations and procurement of new rolling stock. Services are expected to start in 2018.

Each train will carry 1,500 passengers, with peak services of 24 trains per hour in each direction. The projected cost is pegged at £15 billion ($25.2 billion), and it is currently the largest construction project in Europe. Funding at that level requires a variety of channels: More 60 percent of Crossrail’s funding will come from Londoners and London businesses, through fares. Also, “value capture schemes” have been set up: compulsory developer contributions as part of a Mayoral Community Infrastructure Levy; and a more generally levied Crossrail Business Rate Supplement. There will also be a grant from the central government. Financing has included a loan of £1 billion ($1.7 billion) from the European Investment Bank to TfL, one of the largest loans the bank has ever made.

“The success of TfL is a good example of the benefits of enabling holistic city wide control and decision making over the most important modes of transportation,” the report concludes, because efficiency, evolution and innovation are thus enabled. “The model of a transport body with cross-modal powers, the ability to raise finance directly in capital markets and answerable to city rather than national politicians is one that has broad relevance to major cities.”

Thameslink is the key north-south rail corridor running through central London and the South East of England; it carries more than 50 million passengers per year. Along London’s key commuter lines, increasing demand and aging infrastructure have contributed to overcrowding and delays. “Because of this, improving the quality of London’s key rail services, such as Thameslink, has been highlighted by a succession of U.K. governments as a top transport priority,” the report notes.

In 2005 the DfT took control of control of Thameslink as sponsor in order to manage the delivery of needed upgrades. Two years later, DfT laid out its plans for the Thameslink Program as part of its wider rail infrastructure and funding policy initiative. This included £6.5 billion ($10.9 billion) worth of commitments to upgrade the Thameslink infrastructure and procure new rolling stock through the Thameslink Rolling Stock Project (“TRSP”).

Following a competitive bid process, the TRSP contract was awarded to the Siemens-led Cross London Trains Ltd. consortium last year. To finance the project, a Private Finance Initiative/Public-Private Partnership (PFI/PPP) arrangement for lease of the rolling stock and the two depots was put in place.

These leases, together with the maintenance of the trains over a period of 20 years, have an aggregate contract value of £2.6 billion ($4.4 billion) in present value terms discounted to 2013 prices. Siemens Financial Services and its Cross London Trains consortium partners (3i Infrastructure and Innisfree), the DfT, and a syndicate of 19 banks worked to close the deal.

Financing major developments of rail infrastructure “presents many complex challenges, requiring significant planning, a well thought-out solution and skilled execution teams,” the report says. The conclusion: “Managing multi-stakeholder partnerships is critical for major infrastructure projects in order to develop realistic project-delivery milestones and build robust contingency plans. Furthermore, coordinating these partnerships so that interests are closely aligned and communicated is vital to keeping major infrastructure projects on-track throughout financial negotiations.”

Rio de Janeiro

Rio’s port area was traditionally a dynamic area that connected the city to international trade routes. That all changed starting in the 1970s, and the port entered the 21st century with vast stretches of underutilized and degraded areas, poor infrastructure and sanitation, and derelict historic buildings.

Enter the $3.5 billion Porto Maravilha (Port of Wonder) project. It is “central to the regeneration of Rio’s physical and social infrastructure,” the report says. By regenerating the port, Rio is using the only centrally located area available for substantial development while also refocusing commercial growth back into the city center and supporting greater transport integration.

When completed in 2016 the port will have 1,235 acres of modern infrastructure and mixed-used real estate. This will be accomplished through the use of CEPACs, or Certificates of Potential Additional Construction, that are issued by municipalities. They are used to finance building projects and infrastructure development within a particular area through sale of real estate development rights. Within Porto Maravilha, Caixa Economica Federal (CEF) — the Brazilian Federal Savings Bank — took up all CEPACs issued from Rio City Hall. CEF did this through a specifically created fund – the Porto Maravilha Real Estate Investment Fund (FII), which is able to sell CEPACs directly to developers or otherwise bring engage them for joint venture purposes “both to help make a market and to capitalize on market buoyancy.”

The report concludes that Porto Maravilha “is an excellent example of an holistic approach to city-led regeneration and infrastructure delivery,” because it combines urban project legislation; land use zoning; real estate tax breaks; creation of an urban development company, real estate investment fund and PPPs; strategic use of public land and tradable financial instruments.”

As a result the City of Rio is able to use new and existing assets to leverage private investment; to stimulate regeneration through strategic infrastructure investment; to direct of development activity; and to share in value uplift through strategic land disposal, joint ventures and CEPAC trades.

Image credit: Flickr/sico_activa

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. 

The 2014 Sustainable Brands conference in San Diego gathered some of the most influential companies, organizations and thought leaders in the sustainability space. During the event, one unexpected theme arose over and over: employee engagement and its role in corporate sustainability.

A recent PwC study found that more than half of recent college graduates are seeking a company that has corporate social responsibility (CSR) values that align with their own, and 56 percent would consider leaving a company that didn't have the values they expected. As Andy Savitz, author of "Talent, Transformation and the Triple Bottom Line," put it in a panel discussion on Tuesday: "They're looking for purpose, not just a paycheck."

While some business leaders may have a first-instinct shrug when it comes to employee engagement, it offers scores of benefits for companies. In a 2012 report that compiled 263 research studies across 192 companies, Gallup found that companies in the top quartile for engaged employees, compared with the bottom quartile, had 22 percent higher profitability, 10 percent higher customer ratings, 28 percent less theft and 48 percent fewer safety incidents.

In a panel discussion on Tuesday, Desso CEO Alexander Collog d'Escury called employees a company's "most important resource," while Savitz identified employee engagement as "the human thread between sustainability, the triple bottom line and business results."

In the past, the best 'business cases' for sustainability focused on cost savings. It makes sense: When a company reduces environmental impact, it ups efficiency, reduces waste and reaps the financial benefits. But in recent years employee attraction, engagement and retention has caught up to -- if not surpassed -- cost savings as the driving factor influencing companies to embrace sustainability goals.

"I hear this a lot in companies: The ability to attract and retain really good people partly depends now on how you're managing [the world's] mega challenges," Andrew Winston, environmental strategy consultant and author of "The Big Pivot," told Triple Pundit in a recent interview. "Companies are hearing this in recruiting, even from the millennials who are desperate for jobs."

While brand values are surely important to millennials entering the job market, it's worth noting that those PwC figures are down from a much more substantial 88 percent in 2008. (The drop may be thanks to a job market that hasn't been too kind to recent grads; more than 25 percent are unemployed or underemployed, compared to just over 10 percent in 2000.)

In its report, PwC noted that the importance of corporate responsibility in attracting and retaining young talent is "waning" in raw numbers alone. But in an exclusive interview with Triple Pundit, Clinton Moloney and Amy Longsworth of PwC championed employee engagement as crucial to a company's success -- and said in no uncertain terms that corporate responsibility will only become more important in achieving it.

"Wherever you are in an enterprise, everybody wants to be part of something positive," Longsworth told Triple Pundit. Moloney agreed, pointing to PwC's emphasis on sustainability and social responsibility in its own recruiting.

"This is a critical part of the strategy for our own firm," Moloney said. "We're the No. 1 on-campus recruiter in the United States. So, if you're trying to hire the best and the brightest all over the country, [one of] the distinguishing factors that set us apart from our competitors is that we not only do the sustainability work with our clients, but we do a great deal of it for ourselves."

In its most recent move to bolster employee engagement around sustainability while doing social good, PwC made a $150 million commitment over five years to drive up volunteerism in the company. The program, called Earn Your Future, allows PwC employees to increase financial literacy in children and teens by creating lesson plans for students of all ages.

"What we've seen is the leaders of our 20-something offices compete on how many hours they can get volunteered to deliver the Earn Your Future program, so it's actually a core success metric for our most senior partners," Moloney said. "The advantage is: Next time there's an economic downturn, we're not going to defund this because it's seen as critical to our long-term success. So if you can get all these things in alignment, that's what I think true sustainability is."

In his discussion, Savitz listed off a number of similar initiatives enacted by other forward-looking companies -- such as Timberland, which surpassed 1 million volunteer hours served, and Patagonia, which boasts more than seven ways for employees to get involved in social and environmental good.

A program like Earn Your Future makes sense for PwC, but Longsworth noted that it's important for companies to find programs that resonate with their own core values and those of their employees. As Savitz put it bluntly in his discussion: If a company isn't allowing its talent to engage in sustainability at the workplace, "someone else will."

As I listened to Moloney and Longsworth speak about the Earn Your Future program, it was easy to see that both were happier employees as a result of the company's commitment -- a testament to the benefits such programs can have on employees.

"I love telling this story because it's exactly the kind of stuff we would love our clients to adopt, and I'm very proud to be in a workplace where I feel we can lead by example," Moloney said. How's that for an engaged employee?

Stay tuned for more coverage of the 2014 Sustainable Brands conference all week on Triple Pundit! 

Image credit: Sustainable Brands via Facebook

Based in Philadelphia, Mary Mazzoni is a senior editor at TriplePundit. She is also a freelance journalist who frequently writes about sustainability, corporate social responsibility and clean tech. Her work has appeared in the Philadelphia Daily News, the Huffington Post, Sustainable Brands, Earth911 and the Daily Meal. You can follow her on Twitter @mary_mazzoni.

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.