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From 2017 large companies across Europe will have to include their impact on the environment, society and human rights in their annual company report.

The landmark vote by the European Parliament was welcomed by Richard Howitt MEP: “All the evidence suggests that transparency is the best way to change business behaviour. This European law will prevent corporate scandals and make a leap in the transition towards a sustainable, low-carbon economy for the future.

"By requiring the information to be included in the management statement and enabling international frameworks to be used to satisfy the law, Europe is sending a strong signal to the rest of the world advancing the global move towards integrated reporting.”

Howitt, who first proposed the legal change, commented that the exemption for small businesses meant that the new law had “the best chance of being genuinely implemented”.

The move was also welcomed by Global Reporting Initiative (GRI).

“This vote is a victory for transparency and this is a great day for the future of sustainability reporting,” said Teresa Fogelberg, Deputy Chief Executive, Global Reporting Initiative (GRI). “This agreement demonstrates the EU’s strong commitment to corporate transparency and sustainability – supporting smart, sustainable and inclusive growth, and paving the way for a sustainable global economy.”

However, Eurosif (the European Sustainable and Responsible Investment Forum) sounded a note of caution.

François Passant, executive director of Eurosif, expressed disappointment that the legislation does not go far enough: “While the text of the legislation is probably the best compromise that could be reached at this stage, it falls short in a number of areas important to sustainable and responsible investors, most notably scope and assurance. Eurosif will therefore continue to engage with policy-makers on these and work with other market forces to progress reporting practices.”

Picture credit: © Svidenovic | Dreamstime.com
 

Submitted by Guest Contributor

By Dr. Gilbert Probst and Dr. Andrea M. Bassi

There are several problems companies and individuals face on a daily basis, some of which are direct consequences of our actions or reactions to the situations we are facing. This post builds on the one posted last week and highlights more of the traps in which we are often caught.

Conceptual Mistake 1: Quantity of Data Predicts & Solves Problems

As previously mentioned in our blog posts, life is complex. Problems are often also complex and many factors contribute to creating the problem. Herbert Simon, a very well-known business scholar, believes we have bounded rationality. This means: yes, we are rational beings, but our rationality is limited because we do not have all the information and cannot observe everything.

Consequently, many people believe complexity is inversely related to the availability of quantitative data: the more data we have, the less complex the problem is. They think an abundance of data allows us to find ultimate solutions and predict system behavior.

This implies that data allows us to slice through complexity and understand it. This would mean finding solutions to complex problems only requires detailed information about the (presumed) direct causes of these problems and about their harmful effects (Tversky & Kahneman, 1974; Heinhorn & Hogarth, 1978).

But to obtain such information, we need to make sense of our data. Focusing on only an event – What is happening today? What is happening now? – is not enough. This would only provide a temporary solution – a Band-Aid for a festering wound that is bound to cause more pain later. Finding a true solution requires delving deeper into the data.

Diving Below the Surface

Events are just the tip of the iceberg—easy to see and explore. There are underlying structures and patterns at the core of the system. These structures and patterns are the system elements that create events. If we only focus on events, we forget about the multiple variables that influence a system.

We have all experienced a solution to one problem leading to greater problems elsewhere. The most important action to take is to link the multiple variables and analyze the data deeply. Instead of tinkering with an engine in the hope of finding a solution, we take the entire engine apart.

Lehman Brothers’ collapse was the first event to focus the world’s attention on the financial crises. Nevertheless, this event did not provide decision makers with enough information about the real cause of the financial crises. It was just a symptom, not the virus (cause itself).

The collapse of Lehman Brothers was just one event in the growing concerns about the banking system’s stability, the slowdown of the housing market and the economy as a whole. These trends all provided valuable information about the system’s previous direction.

Conceptual Mistake 2: Fixing One Problem Fixes All

Decision making is a challenging task that, if not properly managed, can lead to the emergence of unexpected side-effects and failure – fixing just one part of that engine could still lead to bad accidents! The assumption that, once implemented, the solution will benefit the entire system and have it thriving once again, is wrong.

Implementing strategies designed to maximize the performance of part of a system, or to solve the problem of one (or a small group of) actor(s), generally leads to resistance from the other stakeholders. Conversely, an integrated approach takes the role and goals of the different actors involved in complex problems into consideration.

The Importance of Multiple Perspectives

An example of the importance of multiple perspectives and ideas for business development is Procter & Gamble's (P&G) success with its open innovation program Connect + Develop. This program consists of an Internet platform where all companies and entrepreneurs can propose new innovative business solutions to meet P&G’s needs.

This open approach to innovation provides P&G with a variety of different options. It then chooses the most valuable options and develop them in collaboration with the person(s) or company that proposed them.

With the growing availability of data and optimization already a widespread concept, decision makers generally assume that their perception of reality is universal. They are therefore inclined to use their solution for different types of problems in different contexts. In other words, they use chopsticks to eat soup—a most unsuitable tool for the context. At such times, a one-size-fits-all strategy will fail!

Three Steps to Avoiding Solutions that Don't Work

1. Define the boundaries of the problem:

First, all the factors that are not directly related to the problem should be excluded. It is very important to focus on the main cause, its key drivers and their effect.

The first step is therefore to define the boundaries. These boundaries should be sufficiently open to include the essential cause-effect relations that would be excluded if one were to only focus on a single cause. But the boundaries also need to be sufficiently narrow to avoid generalization and a loss of focus.

2. Identify the causes and effects, as well as the actors involved:

Who are the key actors that stand to benefit from a change in the system? How can they be part of the solution? What are the causes of the problem and what are the possible effects of those causes?

These are the questions that should be answered and analyzed. But beware: a single effect can be the result of multiple causes and a single cause can have multiple effects on the analyzed system. In that engine there may be small faults and all of them have to be fixed if automobile is to drive smoothly and well.

3. Analyze future behavioral paths and impacts:

Once the root of a problem is well understood, qualitative projections provide an even better understanding. Once past and current trends have been observed, the time comes to start analyzing future paths. The use of scenarios allows one to project the future and analyze it consequences.

Among others, the World Economic Forum (WEF) uses scenarios to gain foresight, to look into events that could happen in the future and to develop strategies that take these possibilities into consideration.

Submitted by Guest Contributor

By Dr. Gilbert Probst and Dr. Andrea M. Bassi

Part one of a CSRwire series based on the book, Tackling Complexity.

The Making of Decision Makers

It is not difficult to be a decision maker. We all make several decisions every day. Having accumulated considerable practice over time, we even become good at making decisions.

And aren’t decision makers in the public and private sectors masters of their destiny? They decide what information to use when making decisions, how to assess the gravity of a problem, or the viability of an opportunity, and to act upon it. And this process is so simple that it often takes just a fraction of a second for preferences, which will be acted upon, to materialize.

All Decisions Are Not the Same

Current trends show that the data we have available for making decision is growing exponentially. We can track most socio-economic dynamics in real time (e.g., tracking traffic patterns and congestion with our mobile phones), and have learned to identify the causes of problems, even if these are distant in time and space (e.g., climate change).

In this context, we could argue that all decisions are dealt with in the same way. In other words, while there are different degrees of complexity, or differences in the depth of knowledge required to understand a problem, or recognize an opportunity, the approach we use seems to be largely the same: We “personalize” problem solving.

We become wiser with age, and our ability to deal with our personality and the way we perceive the situations unfolding around us improve all the time. We therefore make headway in generating information that allows us to use the same decision making process in the surrounding world.

Questions and Lessons from History

We are surrounded by successful decision-making stories. And failures. Once we could only react to events unfolding around us; now we more often than not manufacture (even global) crises, for which, we then need to find solutions. We have crafted a socio-economic system that is so strongly interconnected that our actions feed back and re-affect us within an ever-decreasing period of time.

What is happening? Why are we unable to find durable solutions? Why are many historical companies, the pride of entire nations, going bankrupt? Why are countries still failing?

The answers to these questions are complicated – even complex. However, it is actually quite simple to identify some of the causes of the above problems. In short, we are applying a process that works for us – monitoring what happens to us when we take action to solve a problem – to an ever-evolving system changing in ways that we cannot fully understand, nor expect. This new and highly interconnected world constantly takes us – humans living collectively on Earth planet – out of our comfort zone.

Volatile, Uncertain, Complex, Ambiguous

If we take our experience as a model, can we apply this to someone else, or to a completely different system? How can we identify the multitude of causes that impacts the data we collect and monitor? How do these massive amounts of data help us understand how society, the economy, and the environment interact with each other and influence human behavior?

The acronym VUCA – Volatile, Uncertain, Complex, Ambiguous – increasingly applies to all aspects of our lives. Can the decision-making processes we currently use help us tackle such complexity? Are we making progress in recognizing that the future may look nothing like the past? Do we truly realize that future decisions will only be effective if they are not based on past experience?

Tools for Decision-making

The good news is that various tools and skills are available that will allow us to “see systems” and find correct entry points for intervention. Two companies, Bühler and DSM, started off with a very successful business model, decided to enter a new market and failed miserably. They used a linear approach and simply replicated their well-tested strategy in a very different socio-economic and cultural context.

After a careful assessment of their mistakes, and a systemic analysis of the markets they wanted to access, they crafted a successful strategic plan. This plan evolved from an exclusive focus on product development to adopting a more comprehensive approach that prioritized the local context. This more transparent and collaborative process allowed the companies to better understand consumer preferences and to involve a variety of stakeholders, which determined their ultimate success.

There are many such cases, but even more failures.

We need to learn from history – specifically, we should learn not to replicate past successes. We need to avoid mistakes, because our interactions with the world should constantly change if we want to make strides towards sustainability (whether economic, social, environmental, or all three).

This post is based on the book Tackling Complexity by Bassi and Probst. Click here for more information on the book.

About the Authors:

Dr. Andrea M. Bassi is the founder and CEO of KnowlEdge Srl, a consulting company exploring socio-economic and environmental complexity to inform decision making for sustainability. He is also an Extraordinary Professor at Stellenbosch University in South Africa. In his work Dr. Bassi is a project leader and researcher with over 10 years of experience supporting more than 20 governments, several international organizations and business leaders primarily on green economy and green growth strategies, action plans for resilience and risk mitigation, and sustainable development planning.

Gilbert Probst is Managing Director, Leadership Office and Academic Affairs, and Dean of the Global Leadership Fellows Program at the World Economic Forum. He is also a full professor for organizational behavior and management and Co-director of the Executive-MBA program at HEC, University of Geneva, Switzerland. He served as the president of the board of Swiss Top Executive Training (SKU), the Swiss Board Institute and as a member of the board of the Swiss Management Society.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

Dealing another major setback to Northern Dynasty Minerals' plans to develop the world's largest known undeveloped copper ore deposit, multinational mining giant Rio Tinto, the project's sole remaining major mining company backer, announced it is divesting its 19.1 percent equity stake in the junior Canadian mining company.

Rio Tinto is taking an extraordinary step in the way of divestment: Rather than trying to find a buyer for its Northern Dynasty shares, management announced it is gifting them to two local nonprofit organizations, dividing them equally between the Alaska Community Foundation and the Bristol Bay Native Corp. Education Foundation.

Situated on state land in southwest Alaska at the headwaters of the Bristol Bay watershed, Northern Dynasty aims to build North America's largest open-pit copper mine at the Pebble Mine site. The Bristol Bay area is also home to one of the world's richest remaining wild salmon habitat and Alaska's richest fisheries, however.

IHS Global Insight projects the extraction and processing of copper, gold and molybdenum ore from the Pebble Mine site will create 15,000 jobs and provide a more than $2.5-billion boost to U.S. GDP over at least a 20-year period. Set on the scales against the project is the the value of the Bristol Bay fishery and watershed, which opponents contend would be threatened and significantly degraded, if not destroyed, were the Pebble Mine project to be developed -- taking local communities and ways of life along with it.

A series of setbacks for Northern Dynasty Minerals

Rio Tinto's divestment is the latest in a string of setbacks for the Pebble Mine project and Northern Dynasty. Having acquired mineral rights in 2001, Northern Dynasty six years later sealed a 50-50 partnership with another multinational mining giant, Anglo American, to develop Pebble Mine. Anglo American, having invested more than $500 million in the project, announced last September it was withdrawing from the project, however, casting serious doubt about Northern Dynasty's ability to continue developing it.

With opposition from local communities, environmental groups and the broader public coalescing and intensifying, the EPA at the end of February dealt the project a second serious blow when it invoked Section 404(c) of the Clean Water Act and put a halt to further development activity in order “to identify appropriate options to protect the world's largest sockeye salmon fishery in Bristol Bay, Alaska from the potentially destructive impacts of the proposed Pebble Mine.”

Northern Dynasty president and CEO Ron Thiessen cried foul, asserting that the environmental review process has been politicized, with the EPA cozying up to environmental and other opposition groups.

In a Feb. 28 press release, Northern Dynasty announced that it had called on the EPA Inspector General (IG) to launch an investigation into the Bristol Bay Assessment, a critical element of the environmental review process produced by the EPA and private contractors. As Thiessen elaborated:

“Based on Freedom of Information Act (FOIA) requests undertaken by the Pebble Partnership, the State of Alaska and others, Northern Dynasty's submission to the EPA IG raises serious issues of bias, political motivation and collusion with environmental NGOs in the federal agency's preparation of the Bristol Bay Assessment.”

Despite the EPA's action, Northern Dynasty remained firm in its belief that the Pebble Mine project will ultimately pass and receive the required federal environmental approvals to carry on with development. Thiessen stated:

“The U.S. and Alaska have among the most stringent environmental laws for the protection of fish and water in the world, and the Environmental Impact Statement (EIS) process under NEPA (National Environmental Policy Act) is the gold standard for ensuring that major project developments receive comprehensive, transparent and science-based assessment.

"Given that, along with the global significance of the Pebble deposit and the inherent, well-documented limitations of the Bristol Bay Assessment study, including those acknowledged by EPA itself, we continue to have every confidence that final decisions about Pebble will be made in the future following a comprehensive NEPA/EIS permitting process."

Of copper, gold, fisheries and watersheds

Having invested more than $160 million of investors' capital in the project, the Vancouver and New York Stock Exchange-listed company maintains its belief that the Pebble project will be developed despite Rio Tinto's divestment. In an April 7 press release, Thiessen expresses pleasure in Rio Tinto's decision to gift its equity stake in the company to the Alaska Community Foundation and the Bristol Bay Native Corp. Education Foundation.

“Both organizations are known to the Company and the Pebble Limited Partnership ("Pebble Partnership" or "PLP"); the Alaska Community Foundation, in particular, helped facilitate PLP's five-year, $5 million investment in Bristol Bay communities via the Pebble Fund,” Northern Dynasty states.

Added Thiessen:

"We are pleased that Rio Tinto's interest in Northern Dynasty will provide meaningful, long-term economic contributions to charitable organizations in Alaska that are dedicated to providing educational opportunities for young people, and to preserving culture and traditional ways of life.

“We look forward to meeting with the leadership of the Alaska Community Foundation and Bristol Bay Native Corp. Education Foundation in the days ahead to better understand their long-term goals and aspirations, and how their ownership interest in Northern Dynasty and the Pebble Project can make the greatest possible contribution to the people and communities they serve."

Pebble Mine opponents, including the Natural Resources Defense Council (NRDC), are also pleased with Rio Tinto's divestment. As NRDC's Joel Reynolds states in a blog post:

“Rio Tinto’s announcement today is outstanding news for Bristol Bay – a vindication of the company’s expressed commitment to sustainability in the region and the health, safety, and cultural heritage of the people of Bristol Bay -- and it is the right move for Rio Tinto’s own shareholders.

“NRDC and its 1.4 million members and activists applaud Rio Tinto’s responsible action, and once again we urge EPA to use its authority under the Clean Water Act to act swiftly to stop this uniquely reckless project for good.”

Whether or not the Pebble Mine project proceeds or not lies in the hands of regulatory authorities, Northern Dynasty management, environmental and social justice groups, and local residents and communities.

The story of the Pebble Mine project shines a light on the profound and long-term environmental and social, as well as economic, impacts and trade-offs inherent in decisions to extract, process and refine any natural resource -- mineral and energy resources in particular.

They also highlight the critical importance of having a robust and unbiased regulatory and institutional framework in place. Such decisions should compel all stakeholders to rise above consideration of their own narrow self-interests.

However events unfold, whether or not the Pebble Mine is developed or not will make a statement about the relative values Americans as a society place on economic and natural resource development; the interests of corporations, local residents and communities; and the value of ecosystems and biodiversity.

Copper coin credit PeriodicTable.com

Map credit: EPA, Pebble Mine Bristol Bay Assessment

Bristol Bay fishing boat credit Alaska Conservation Foundation

By Richard Eidlin

Voluntary corporate sustainability initiatives and social enterprises are essential but are not game-changers by themselves. In addition, we need laws and regulations that guide our economy toward sound, long-term decision-making, with full recognition of social and environmental externalities. As business leaders, we can and must support policy changes to help make the economy more sustainable.

A sustainable economy will depend on policies that will help advance change on a societal level.  Here are three important policies that will help – and specific actions you can take.

1. Let the EPA ensure clean water

New proposed rules will help protect American streams and wetlands – if the rules are upheld. This could be great news for all who depend on clean water. Under the proposal, announced last month by the EPA and U.S. Army Corps of Engineers, stream systems and wetlands near rivers and streams will receive more protections than they have in the past.

What’s at stake

Consumers and residents are not the only ones who need clean water: “American business has always depended on the availability of clean water for its success,” said the American Sustainable Business Council in a recent statement on these rules. “EPA’s regulation in this area historically has been a prime example of the vital partnership between business and government. Whether a company is a food producer, a high tech manufacturer of silicon wafers, outdoor recreation guide or a beer manufacturer, businesses rely on clean water to produce high quality and safe products,” continued the statement.

But some business interests including agri-business are lining up to fight the proposal and pushing Congressional leaders to argue against it.

Contrary to claims by lobby groups opposed to the new rules, the rules do not give the EPA new authority not already granted to it by the Clean Water Act. Also, by basing the rules on sound science, EPA has tried to remove politics from its efforts to protect our water.

What you can do

• Thank the EPA for the new proposed rules.


• Learn more about the rules.


• Read the full business statement supporting the EPA’s proposal.

2. Put industry on the path to safer chemicals

Congress is moving forward on comprehensive TSCA reform, but so far the efforts leave much to be desired. One House bill introduced recently was criticized at a hearing on Capitol Hill by Barry Cik, CEO of Naturepedic and member of the American Sustainable Business Council. He testified on behalf of ASBC and the Companies for Safer Chemicals Coalition, which has organized to push for meaningful reform of toxic chemical regulations.

What’s at stake

According to Cik, the proposed bill, the Chemicals in Commerce Act, fails to address a number of areas such as innovation, transparency and safety. “The Chemicals in Commerce Act falls short on each of these principles,” he said. “On transparency issues, CICA codifies the rules that allow chemical manufactures to hide a broad amount of data with little or no justification for doing so”

Cik added, ““The public is increasingly becoming educated about the risks of consumer products containing untested toxic chemicals. Consumers deserve access to transparent information and full disclosure regarding the products that they buy.”

Business owners need to keep the pressure on Congress to ensure that concerns with the legislation are addressed.

What you can do

• Sign the Companies for Safer Chemicals petition.


• Learn more about the need for chemicals regulation reform.


• Read about polling of small business owners on toxic chemicals.

3. Make a comment on EPA Carbon Pollution Rules for New Power Plants

The EPA is trying to rein in the carbon pollution from the nation’s power plants. While it works concurrently on pollution standards for existing power plants, the EPA is taking public comments on proposed pollution standards for new power plants. The deadline has been extended to May 9.

What’s at stake

Coal plants are the single largest of carbon emissions in the United States, according to EPA data. Currently they emit about 1,700 pounds of carbon per megawatt hour, and it is unlikely that they will be able to meet the new standard. This gives the industry a strong incentive to transition to cleaner, renewable energy, which is a far better job creator than fossil fuel projects. These clean energy and renewable energy jobs are good for business and good for the economy.

Many businesses applaud the proposed standards on coal, but many do not. The fossil fuel industry has demonstrated that it will fight hard before, and is geared up to fight again.

What you can do

• Add your business voice to the growing list of supporters for carbon pollution rules for new power plants.


• Read about NRDC’s report with revised estimates of reductions for existing power plants.


• See statistics and review the complete rules.

Image credit: Flickr/armyengineersnorfolk

Policy Points is produced by the American Sustainable Business Council. The editor is Richard Eidlin, Director – Public Policy and Business Engagement.

As clean energy finance falls in Europe -- most notably Germany and Italy -- it is soaring in Asia, particularly in Japan and China, according to the 2013 "Who's Winning the Clean Energy Race?" report by Pew Charitable Trusts. Renewable energy capacity in the Asia and Oceania regions grew by 64 percent last year, with 50 GW of new capacity added in one year.

Despite the global recession, the clean energy sector is a $250 billion industry, with over $100 billion in investment in Asia. China alone attracted $54 billion in investment in 2013 and was the global leader in wind energy investment with 38 percent of the global total. Several factors indicate that renewable energy has a bright future, particularly in Asia, and that China will remain a clean energy superpower.

The price of solar and wind energy technology has fallen significantly in recent decades and is increasingly competitive in the market. As a result, clean energy stocks soared in 2013, the report noted. Despite the European market contracting, renewable energy markets in Asia, South America and Africa are expanding. The solar energy sector emerged as an industry leader in 2013, outpacing new generation capacity in other technologies.

China

With the world's largest clean energy capacity at 191 GW, China installed a record 12.1 GW of solar -- setting records and emerging as a major global solar market. In addition, China installed 14 GW of wind energy capacity in 2013. As concerns about air pollution mount, China set ambitious 2014 goals, with 14 GW of new solar capacity and 18 GW of new wind capacity. A new 20-year policy, aimed to boost solar power, makes future solar growth attractive and will create a steady market, the report's authors predict.

Japan

On the heels of the Fukushima nuclear disaster and reforms in the power sector, Japan was the fastest growing market for clean energy investment, with an 80 percent growth to $28.6 billion, according to the report. In an effort to diversify power generation, Japan nearly doubled its solar capacity in 2013 with 6.7 GW installed. The country is now No. 4 globally in solar energy capacity. With most of its renewable energy gains in solar, Japan currently has a mere 2.7 GW of installed wind capacity.

United States

After a 9 percent drop from 2012, the United States attracted $36.7 billion in clean energy investment last year. The country was particularly strong in biofuels and energy efficient/low carbon technologies and dominated the venture capitalist/private equity-financing category. Wind energy installations, however, fell by 90 percent in 2013 -- largely due to uncertain wind energy policy, but solar energy growth was strong.

Germany

Numerous factors, including reductions in feed-in tariffs, shifting energy policies and the uncertain future of renewable energy incentives, caused the German market to shrink by 55 percent last year to $10.1 billion. Solar energy capacity is now 35.5 GW and wind capacity is at 34 GW, thus Germany generates 20 percent of its power from renewable sources. Although China leads in new solar capacity, Germany remains the leader in existing solar capacity -- with nearly double the capacity of China. If 2013 trends continue, Germany will not remain the leader in installed capacity for long.

Italy

This market is also in steep decline, with a 75 percent reduction in clean energy investment last year. This is the impact of austerity measures, which are cutting incentives for clean energy development. Regardless, Italy has 18.1 GW of installed solar capacity -- just barely trailing China -- taking third place in global solar energy capacity.

Some of the greatest indicators of future clean energy development are government policies and incentives. Lack of stable policy in the U.S. is hindering long-term wind energy growth. Conversely, the multi-year extension in 2008 of the U.S. solar energy tax credit through 2016 has created strong yet consistent demand. With a 20-year solar policy in place, the solar energy market outlook is very bright for China.

https://www.youtube.com/watch?v=_hTg4MUirjY

Image credit: Solar Service Inc.

Sarah Lozanova is a regular contributor to environmental and energy publications and websites, including Mother Earth Living, Green Building & Design, Triple Pundit, Urban Farm, and Solar Today. Her experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and she resides in Belfast Cohousing & Ecovillage in Midcoast Maine with her husband and two children.

When the U.N. Human Rights Council announced, in June 2011, that it was endorsing the U.N. Guiding Principles on Business and Human Rights (UNGPs), the Office of the High Commissioner for Human Rights had this to say:  “The Guiding Principles are the product of six years of research ... involving governments, companies, business associations, civil society, affected individuals and groups, investors and others around the world.”

The OHCHR went on to note that the UNGPs were “based on 47 consultations and site visits in more than 20 countries; an online consultation that attracted thousands of visitors from 120 countries; and voluminous research and submissions from experts from all over the world.”  In other words, without this kind of extensive collaboration across sectors, countries and industries, the UNGPs may not have been born.

Perhaps because of the UNGPs’ success, multi-stakeholderism is often highlighted as an essential ingredient in the continued progress of the business and human rights (BHR) movement. For example: in February, vice-chair of the U.N. Working Group on Business and Human Rights, Michael Addo, called attention to the importance of multi-stakeholder consultations in the development of National Action Plans; just last week, at an American Bar Association’s Section on International Law panel, Addo again took pains to stress the crucial role of multi-stakeholder participation in the promotion of the rule of law in the BHR context; and the OHCHR recently called for multi-stakeholder consultations in an effort to close the BHR justice gap.

Not surprising, right? After all, presidents get elected by promising to transcend partisanship and bring rival caucuses together. There’s little doubt that multi-stakeholderism is crucial to elements of the BHR movement, but is this type of collaboration always the best strategy? Or, more to the point, is it even realistic? A look at the  behavior of the major stakeholders in the coal industry is illustrative and sobering.

Take the recent coal-related chemical spill in West Virginia, for instance. On Jan. 9, a leak was discovered at a Freedom Industries chemical plant, spilling roughly 10,000 gallons of crude MCHM -- a chemical used in the coal production process -- into West Virginia’s Elk River, and effectively cutting off water to 300,000 residents. The spill and its effects have been well documented -- not least in Evan Osnos’ tour de force, “Chemical Valley,” in the April 7 New Yorker -- and virtually every detail about why the spill occurred and the state’s response once it was discovered suggests that, in some instances, multi-stakeholderism is merely aspirational.

One problem in West Virginia was the embarrassing lack of regulation pertaining to the chemical and coal industries.  Osnos points out that, although “[t]here are more than eighty thousand chemicals available for use in America, unless they are expected to be consumed, their effects on humans are not often tested, a principle known in the industry as ‘innocent until proven guilty.” This, of course, was a failure of every level of government.

Even less surprising is that Freedom Industries, perhaps just rolling the dice but more likely making a calculated determination that there was little downside risk, decided not to file mandatory leak-prevention plans with the Department of Environmental Protection (DEP). Yet, though state inspectors made periodic visits -- “as in April, 2010, when a neighbor complained of a licorice smell that ‘leaves a bad taste in your mouth’ -- the plant was never fined.” This was a failure of both private industry and government.

More disturbing still is that in West Virginia, even when companies were self-reporting, the DEP remained utterly ineffectual. Osnos again:  “In 2008, the Charleston Gazette discovered that in a nearly five-year period coal companies had self-reported around twenty-five thousand violations of the Clean Water Act, but the D.E.P. had not reviewed the reports or issued a fine.”  This appears to have been another epic failure of government.

The problems in Chemical Valley also extended to lobbyists. In most states, including West Virginia, important pollution standards may be set by elected officials, which is problematic even in a vacuum.  In coal country, where most elected officials are lining their pockets with soot-covered dollars, the problem is compounded. As Evan Hansen, an environmental consultant, put it in the Osnos piece:  “In the past 10 or 15 years, [the lobbyists have] systematically weakened virtually all the major water-quality standards that apply to the coal industry.” This, to me, is a failure of our society.

The West Virginia story is one of manifold failures -- the Osnos piece doesn’t suggest any potential protagonists -- and it is hard to imagine multi-stakeholder consultations surviving in the smog of the back-rooms that set the stage for the eventual spill, or making a difference in the impotence of the state's response. As Michelle Nijhuis pointed out in her must-read National Geographic piece, “Can Coal Ever Be Clean?” (spoiler: it can’t), even when individual companies make strides toward making coal cleaner, the failure of government to pass meaningful legislation on the subject -- a result of all the money on the other side -- can bring the whole thing crashing down.

Nijhuis highlights the example of American Electric Power (AEP), which a few years ago captured and stored more than 37,000 metric tons of pure carbon dioxide from its coal-fueled power plants, and the company planned to scale-up the project to eventually capture a quarter of the plant’s emissions. The scale-up would cost upwards of $300 million, and the U.S. Department of Energy had agreed to match AEP’s investment. For all this to work, however, AEP needed to be able to charge its customers for the CO2 storage (customers currently pay nothing for the emissions); yet, “when climate change legislation collapsed in the Senate, state utility regulators told the company that it could not charge its customers for a technology not yet required by law.”

The point, I suppose, is that multi-stakeholderism only really works when all parties are genuinely committed to accomplishing the same goal (as they were with the UNGPs).  Yet, how often is that really the case? It certainly wasn’t the case in West Virginia and doesn't appear to be the case with respect to any aspect of the environmental movement.  When putting together the so-called “spill bill” to govern the types of storage tanks that leaked in Chemical Valley, for instance, West Virginia Gov. Earl Ray Tomblin arranged meetings for the designated “stakeholders,” which included the local Chamber of Commerce, the Oil and Gas Association and the Coal Association but excluded civil society and environmental groups. While a seat at the table would have been nice, it is hard to imagine even Walter Berglund moving the needle.

To be sure, multi-stakeholderism is an admirable goal.  But if environmental groups have a chance to make a real difference -- something we’re in dire need of right now -- without inviting business into the conversation, they’d be well advised to just go for it.

Image credit: Flickr/jenorton

As one of the world's widest ranging multinational corporations, McDonald's, has received its fair share of criticism -- whether the issues are social, environmental or economic. That's certainly the case when it comes to the overall sustainability of McDonald's far-flung network of fast-food restaurants and suppliers. The company has also garnered negative attention for its influence and impact on people's eating habits and nutrition, as well as the wages and benefits it offers employees.

Yet McDonald's, as is true of a growing number of multinationals, has been dedicating an increasing amount of resources, time and effort to develop a strategic vision and implement sustainable business methods and practices that improve and enhance the social and environmental, as well as economic, impacts of its operations.

Aiming to spur sustainable business methods and practices throughout its vast network of suppliers, McDonald's on April 1 announced the winners of its 2014 "Best of Sustainable Supply” awards.

Recognition for sustainability across the supply chain

As McDonald's explains in a press release, its 2014 award winners highlight “how suppliers achieved significant results by identifying opportunities and applying sustainable solutions in diverse places around the world.” In making the awards, a panel of McDonald's leadership and industry experts chose suppliers who had instituted sustainable solutions spanning eight categories -- some of which are important for businesses of all shapes and stripes to consider, others more specific to the food industry:

• Climate Change and Energy


• Water


• Waste


• Land and Biodiversity


• Human Health and Welfare


• Animal Health Welfare


• Community Impact and Economics

A total 51 entrants received 2014 sustainable supply awards from among 600 submissions from around the world. A full list can be found in the complete report on McDonald's website. One of the 14 judges from 13 businesses and organizations on the awards' selection committee, Christine Bader, human rights advisor to Businesses for Social Responsibility (BSR), pointed out the importance of recognizing corporations making genuine efforts to enhance the sustainability of their businesses.

“It is critical to recognize progress in sustainability to encourage more of it. By highlighting good practices among its supply chain partners, McDonald's is rewarding the sort of innovation that we all want to see."

Added award panel member and GreenBiz Vice President John Davies:

“Selecting a small list of winners from such a robust group of entrants was challenging. Every entry was valid, with all programs demonstrating impressive ingenuity and results. It boiled down to identifying entries that were innovative and impactful, and programs that could not only enhance sustainability in the broader industry, but ideas that were sustainable themselves.”

McDonald's sustainable supply award winners

Among the 2014 "Best of Sustainable Supply” award winners, McDonald's highlighted the sustainability initiatives carried out by Campbell Soup Co., Lamb Weston/Meijer, ConAgra Foods and the Coca-Cola Co.:

• Community Impact: The Campbell Soup Co. led a “Just Peachy” project that re-purposed fruit to raise nonprofit funds and combat hunger.


• Water: Through innovation and collaboration, the Lamb Weston/Meijer team created Innowater (renewed water), a technology to purify water to reuse in manufacturing processes.​


• Waste: ConAgra Foods established the “Zero Waste Champion” Recognition Program. The award is earned by facilities that have diverted at least 95 percent of solid waste from landfills during the fiscal year and continuously strive to further reduce waste through process modifications and diversion of materials for the most beneficial reuse.


• Climate Change and Energy: The Coca-Cola Co. routed orange juice from a processing facility to a bottling plant via an underground, 1.2 mile pipeline. It has eliminated the need for an average of 70 tanker trucks per day and provides cost savings and reduces the company’s carbon emissions by approximately 20 million tons per year.

Commenting on this year's awards and winners, McDonald's executive vice president of Global Supply Chain, Development and Franchising, Jose Armario, stated:

“Our suppliers continue to go above and beyond to provide sustainable leadership and take their commitment to preserving resources seriously. We are fortunate to work with such a diverse and dedicated group of suppliers to service our 35,000 global restaurants and 70 million customers each day.”

For more on 3p's coverage of McDonald's and sustainable business management, check out these articles from the 3p archive:

Is There A Sustainable Big Mac In Your Future?

McDonald’s Says Bye Bye to Polystyrene Foam Cups

McDonalds' Customers Don't Buy Salads, But Whose Fault Is That?

Image and graphic courtesy of McDonald's

Interview by Julia Xu (Brown ’17) and Lainie Rowland (Brown ’17)

We were fortunate enough to be able to sit down and talk with Ira Magaziner, Chief Executive Officer and Vice Chairman of the Clinton Health Access Initiative (CHAI) and Chairman of the Clinton Climate Initiative (CCI), and hear about his journey as a social entrepreneur and activist. Here is what we learned!

“I think the meaning of our life is being able to do something that transforms things.” -Ira Magaziner

Julia Xu: Hello, Mr. Magaziner. We are excited to interview you in anticipation of the SEEED Summit 2014, which you’re speaking at on April 26. We have learned a lot about you in our Social Entrepreneurship class, and we especially admire you for the sustainable approach of using scale to cut down prices and eventually create a virtuous cycle.

Lainie Rowland: We would love to know more about what skills you’ve learned and acquired that you’ve used to become a change-maker. We are especially interested in talking to you because you have the Brown background and because you’re the architect of the open curriculum.

Ira Magaziner: The most important thing is the values, and whether you make a decision to live a life by your values. To me, what we are doing now is trying to deal with the terrible income inequality existing in the world, and trying to help the poorest people with health care.

One thing we did is cut down prices of health-care ingredients by guaranteeing quantity to the companies, for everything from drugs to vaccines. We essentially had to put advice together and then have discussions with companies. For example, the vaccine was too expensive for poor countries—in middle-income countries in Africa and Latin America, the vaccine’s price was originally too high for poor people to afford.

So we went to the companies and guaranteed them 25 million doses of the quantity demanded in poor countries, which was based on our analysis. With this guaranteed quantity, the companies were able to cut down prices, because the marginal cost was lower when more quantity was sold. By guaranteeing the value of the vaccine, increasing the quantity sold, and lowering its price, we reduced the cost for the wealthy countries as well as the middle-income countries. In order to save more lives, the companies shouldn’t lose money because it’s unsustainable. Only a mutually beneficial solution can really change the market dynamics.

So basically, we reduced the price to $5 through negotiation. And then the above middle-income countries agreed that they wouldn’t come to $5, but they could make $12, so we also negotiated that deal. The $5-trail becomes a very cost-effective way to save lives—we have saved 300 thousand lives here. What we tried to do was to get them to go from what I call a ‘jewelry-store model’ to a ‘grocery-store model’—from a high-profit, low-volume, uncertain payment business to a low-margin, high-volume, certain-payment business. This is just one example of how effective systems can correct the unjust equilibrium.

LR: That’s amazing! So when you said we only have a certain amount of time to make as much change as we can and we have to hone the skills and the ideas to affect that change — I’m curious about when you started to think that way, because it is definitely a very specific mindset.

IM: I started when I was in high school, during the civil rights movement here in the United States. I went down to Mississippi and found out that African Americans couldn’t buy houses—there is no fair housing system. I could see that I had to do something to make systematic change. The reason why I was successful is the student support. With that, the administration couldn’t ignore us. We had one thing that was well reasoned, we had certain recommendations, and we had full student support. You don’t need to occupy buildings or do things in a violent way to get people to support you.

I haven’t succeeded in everything I’ve done. You know, a lot of people have succeeded in everything they do but they have not learned much, because failure is what teaches you about life. To succeed in doing something that will have some impact, you are going to fail sometimes and try again. That’s how I’ve led my life.

JX: We see that your student activism is reflected in your work at the Clinton Foundation to correct the unjust equilibrium in the financial system of health care, and also various other accomplishments. So what motivated you to become such change-maker and social entrepreneur?

IM: It comes back to a question of what you think the meaning of your life is. You know, why you are here, what is the purpose of living. Of course, my family is important to me, but ultimately I think there is something more than just taking care of the next generation. There is a society that we are a part of, and a history of human existence and advancing. We used to have a slave-based society and a barbaric society, etc., but we can see progress in morality.

We once got together with people representing 30 different kinds of religion that have different explanations for god, the universe, or the nation. But the profits that we expected to see in all those religions is that they have a common morality, and it was helping people who are less fortunate towards endless opportunity, and eventually achieving the highest morality—of course, mostly represented in Jewish and Christian religions. So that is what always guided me—the question of what is fulfilling in your life.

I love my family; I love my children, but I know I needed more than that. I’ve made some money in my life, but what’s that? It really doesn’t mean much. You want to have enough money to take care of your family, but greed never stops. So I think the meaning of our life is being able to do something that transforms things.

Brown is not helping poor people directly, but the fact that something has changed in the students shows its mission of spreading the common good. Now generations of students who have come through here do different kinds of leadership work and gain different kinds of skills. When I was at the White House, I could see that Brown students were very willing to challenge authority, think creatively and act creatively, more than the average students from other institutions. Part of that is that Brown attracts them, but part of that is also that Brown gives them a chance to grow in that way. So having that impact is a good thing in both worlds.

JX: Are there any skills that you think are really important for social entrepreneurs?

IR: No. The skills are the easy part. You can pick up the skills you need. The things that are essential are being able to understand the need, have the persistence to bring real change when you run into inequality, and find ways to go over or around.

In this way, you’re able to inspire others with your passion and you become a risk-taker. When failure comes you pick yourself back up, and you have the resilience to come back. You do what you need to do. Those other things that are defined as character are the most important.

Your leadership is not just about your leading the status quo or having a big title. Your leadership shows when you challenge the status quo, challenge authority, challenge what everybody else takes to be right. That is true whether you are a scientist, whether you’re in politics or whether you do business. You innovatively define a way that advances human kind, and that’s what we define as leadership.

So how do we do that? You’ve got to be willing to be creative, be resilient, be persistent, and accept when people criticize you and knock you down, and accept the occasional failure because you are trying to do hard stuff but good stuff. And that’s the most important thing. For skills, you’re smart. You’ll pick it up.

LR: Thank you so much for the inspiring talk, Mr. Magaziner. We look forward to seeing you at the SEEED Summit 2014!

UPS is rescinding its move to fire 250 Queens, N.Y. Teamsters Local 804 drivers, who took part in a 90-minute walk-out on Feb. 26, after city and state officials urged the company to negotiate with the drivers’ union or face the prospect of canceled contracts.

Teamsters Local 804 announced on its website last week that UPS agreed to abandon plans to pink slip drivers who had walked off the job to protest the firing of an employee, Jairo Reyes. Reyes was let go over an hours dispute, a UPS spokesman told Business Insider, but the union said he was terminated without a hearing he was contractually entitled to. It also described the mass firings as "arbitrary discipline." But UPS maintains that the February walkout jeopardized its ability to serve customers and that the Teamsters' contract includes a no-strike clause, a company spokesperson told the Huffington Post. 

UPS fired 20 of the workers after their shifts last Monday and sent termination letters to the remaining 230, informing them that they would be fired once the company trained their replacements. Instead of the mass firings, UPS will suspend the employees for two weeks without pay and recoup monetary damages stemming from the walkout from Local 804, according to a news report in the Times Ledger, a weekly newspaper serving Queens.

“Local 804 officials acknowledged that the Feb. 26 walkout was illegal and unauthorized and will undertake other actions within the bargaining unit to correct the situation,” UPS spokesman Steve Gaut said in an email to the Times Ledger. “UPS has chosen to settle the matter in order to return to normal operations at the site.”

Gaut said strikes are not an approved method of conflict resolution in UPS’s contract with the union. As part of the agreement between Teamsters Local 804, which represents the 1,400 workers at the Maspeth distribution center, the union agreed to pay UPS damages and acknowledge that the strike was “illegal and unauthorized," Gaut said, adding the union "will undertake other actions within the bargaining unit to correct the situation.”

However, Local 804 has a different take from Gaut’s characterization -- asserting that strikes are a legal recourse for them in the event that negotiations between the union and UPS break down.

“The work stoppage on Feb. 26 was legal and permitted under the union contract with UPS,” a Teamsters Local 804 spokesman said. “Under the agreement reached with UPS, Local 804 acknowledges that the union’s internal procedures for authorizing a strike were not properly followed on Feb. 26 and we have agreed to communicate the proper procedure to all union members.”

Whether the walkout was technically legal or not, UPS’ reaction led New York City politicians to threaten to cancel city contracts that give UPS millions of dollars in breaks on parking fines. The showdown escalated when Public Advocate Letitia James, City Comptroller Scott Stringer and several city and state legislators gathered beside Local 804 at City Hall early this month and called for government agencies to review the city and state’s business with UPS. James said the company had a $2 million contract with the city, which stems from a larger $43.2 million agreement with the state.

Apparently UPS does not have the power to fire city officials, so that pressure—and the public outcry--that resulted from the firings led UPS to reverse course.