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This article was co-written with Kelley E. Currie.

To appreciate how China’s techno-authoritarianism threatens the world, consider solar energy. What’s seen as a clean, modern and relatively high-tech alternative to fossil fuels has become another example of the Chinese Communist Party’s strong-arm approach to bullying other countries and dominating an industry. Worse yet, many American investors are willfully blind to China’s monopolistic tactics and use of modern-day slave labor, prizing their “green” portfolios over U.S. energy security and human rights. 

Here’s the good news: Economies of scale have enabled cost reductions that many experts predict will lead to solar energy comprising 60 percent of the world’s energy needs by 2050. This will help reduce greenhouse gas emissions and go a long way to address climate change.

But here’s the bad news: The inconvenient truth of the inconvenient truth is that the manufacturing of solar cells is an energy- and labor-intensive process. That’s why 80 percent of the world’s solar panels are made in the coal-rich Xinjiang region of China, which is not only home to the world’s two biggest coal-fired power plants but also ground zero of the CCP’s genocide of the Uyghurs, who are used as slave labor. As we have witnessed recently at the gas pump, energy security is national security. Wars are started and lost because of energy. Unless drastic action is taken, we will find ourselves at China’s mercy for our energy needs, just as Germany is at Russia’s. 

Confronting a solar power bully

Already, China has nearly cornered the market for polysilicon, the base of the global solar supply chain. Over the past decade, China’s share of the global production of polysilicon increased from 26 percent to 82 percent, while the U.S. share plummeted from 35 percent to 5 percent. This did not happen by accident. China dumped state subsidies into solar production, engaged in arbitrage and undercut rivals with lax worker and environmental protections. Many American investors were complicit or worse in ceding the market to China. BlackRock and other institutional investors championed cheap solar energy as part of their highly lucrative “ESG” — environmental, social and corporate governance — portfolios, prioritizing easy-to-measure environmental considerations above equally important, but harder to quantify, human rights concerns.

Beijing has a history of trying to bully its way to the top of an industry. Fortunately, the recent history of advanced wireless technologies demonstrates that China has a fatal weakness: Other countries don’t trust it.

In January 2020, the world was convinced it was too late to prevent the CCP from dominating the fifth generation of global wireless telecommunications. China’s attempt to monopolize 5G communications had real national security implications for the rest of the world — threatening to put an authoritarian regime in charge of the world’s most advanced communications infrastructure.

But Beijing’s march to dominance — which was based on raw power rather than values — was reversed. Trust was the key. In less than a year, during the worst period of the COVID-19 pandemic, the Clean Network Alliance of Democracies brought together 60 “clean countries,” representing two-thirds of the world's GDP, 200 “Clean Telcos,” and dozens of industry-leading “clean companies” committed to only using trusted 5G vendors. This trust-based alliance defeated the CCP’s grand monopolistic scheme and created an enduring, replicable model for all areas of techno-economic competition. 

A model for diplomatic and economic cooperation

The same trust-based model that helped thwart China’s wireless hegemony can loosen its grip on global solar production.

Just as like-minded countries came together on a Clean Network to exclude malign actors from advanced wireless networks, so we can incorporate trust principles into our ESG standards. For example, we should exclude Chinese-domiciled firms from ESG-designated funds, require the Securities and Exchange Commission to define a company’s domicile in China as a “material risk,” and rationalize sanctions lists to ensure that companies that are implicated in human rights abuses lose access to U.S. capital markets.

The world’s democracies, led by the United States, have the moral legitimacy and economic power to stop a bully in its tracks. And now, we have a model to do it. Alliances built around shared values – fundamental to what we call “tech diplomacy” – are vital to both our economic self-interest and to the moral leadership we must summon toward a freer and fairer world.

About the co-author: Kelley E. Currie served as U.S. Ambassador-at-Large for Global Women’s Issues and the U.S. representative at the United Nations Commission on the Status of Women. Prior to her appointment, she led the Department of State’s Office of Global Criminal Justice and served as the U.S. Representative to the U.N. Economic and Social Council and Alternative Representative to the UN General Assembly.

Interested in having your voice heard on 3p? Contact us at editorial@3BLMedia.com and pitch your idea for a guest article to us.

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In the aftermath of last fall’s COP26 climate summit the environmental, social and governance (ESG) movement appeared to have many reasons to be optimistic, with some observers declaring that businesses are now inseparable from ESG. Money held in sustainable mutual funds and ESG-focused exchange-traded funds rose globally by 53 percent from 2020 to 2021 to $2.7 trillion, with a net $596 billion flowing into the strategy, according to Morningstar. 

While that sounds like sugar there is some salt in the mixture, according to a recent report from the global professional services firm EY.

The report acknowledges the optimism about ESG in the run-up to last year’s COP26 climate summit. “Recognizing public concerns over climate change, numerous companies and governments committed to ambitious net-zero pledges,” the report’s authors say. “In tandem, investors identified the huge potential associated with funding the transition to a low-carbon economy.”

However, EY asserts that changing perceptions have left the movement facing some “existential questions” about what ESG really means and whether ESG-focused investors are being effectively served by the sustainability information ecosystem.

The problems with ESG reporting

EY is hardly alone in expressing these concerns. The Economist argues that ESG has three “fundamental problems,” including a “dizzying array of objectives” lacking any coherent guide for investors and firms to make the “trade-offs that are inevitable in any society,” a lack of clarity about incentives, and a measurement problem because the various scoring systems have “gaping inconsistencies” that can be gamed easily.

Since last fall, the ESG movement has also had to contend the evolving priorities of policymakers and investors in a global economic and geopolitical climate roiled by inflation, Russia’s invasion of Ukraine, and growing tensions between the U.S. and China. There also are growing allegations of greenwashing, such as when a business improves their ESG score by selling assets to a different owner who keeps running them just as before.

The EY report acknowledges these complexities but nevertheless characterizes the maturation of the sustainability information ecosystem as “nothing short of extraordinary,” and that the challenges facing the ESG investing movement “are a product of its infancy.” 

The availability and quality of “asset-specific climate data” has improved considerably in recent years,” according to Trevor Houser, a partner with the Rhodium Group. Improvement in the resolution of global climate models, combined with “rapid growth in climate-focused econometric research,” is increasing the understanding of how changes in the climate impact company revenue and operations, real estate investment performance, municipal and sovereign bond risk, etc. In addition, as Houser said within EY's report, more companies are also measuring and disclosing greenhouse gas (GHG) emissions data.

Should climate have more focus within ESG?

While ESG scores measure a company’s performance on a wide range of environmental, social and governance issues, such as labor relations, waste management, or business activities in countries with authoritarian governments, Houser said they provide “relatively little useful information about company-specific climate risk.” 

Climate change-related considerations are usually less than 15 percent of an overall ESG score, said Houser, and other sources of data, including individual assessments of various ESG topics such as climate, are more likely to provide “more meaningful insight.”

Houser said most ratings agencies focus on climate risk management, but many investors are mostly interested in impact, such as how a company’s operations are affecting the climate. 

“While these two objectives — risk and impact — are related, they are not the same,” said Houser. “Data providers [and] rating agencies need to be transparent about assumptions and methods and develop products to meet both risk and impact use cases.”

Five ways to optimize ESG reporting

EY offers five recommendations the sustainability information ecosystem should act upon, starting with increasing the transparency of composite indicators like ESG ratings, “which do not serve investors interested in social impact as they are weighted on financial materiality.”

Next, the report calls for increasing understanding of the variety of ways sustainability information is used. The two primary uses of sustainability information are to assess financial risk and social impact, which “are not mutually exclusive but are easily confused.”

The third recommendation is to put in place the conditions to enable the rise of independent assurance — coupled with enhanced standards and increased automation and reporting rigor — to help “further build trust in sustainability information and among ecosystem actors.”

Fourth, the report calls for the development of “comparable and interoperable sustainable finance taxonomies,” systems designed for determining which economic activities should be considered sustainable. Taxonomies founded “on complementary principles” would help to increase comparability and transparency across markets while recognizing that “markets have different philosophies, legal architectures and economic structures.”

Lastly, the report asserts that it is crucial to lower barriers for market participants in emerging economies to put them in a better position to benefit from private capital seeking sustainable investments. 

Meanwhile, the broader sustainability information ecosystem will continue to debate the roles played by the respective actors within the ecosystem, says EY.

“The recommendations in this report are not a panacea for addressing the difficult questions facing the ecosystem,” the report concludes, “but they are important areas of focus in the move toward information that is decision-useful and trusted.”

Image credit: Louis Maniquet via Unsplash

The recent Supreme Court ruling, West Virginia vs. EPA, imposes unprecedented restraints on urgent efforts to slow climate change, conserve nature and address this century’s other global sustainability challenges. Nevertheless, I remain encouraged by the voluntary progress made by businesses and regulators like the SEC, which recently proposed a new rule that would mandate corporate climate-related risk disclosures. This SEC rule will help U.S. companies remain competitive globally, level the playing field for investors and ultimately help address the climate crisis by pushing companies to enhance their emissions reporting and better consider physical and transition risks.  

Global markets and the world’s largest corporations have an outsized impact in driving the decisions that affect nature, biodiversity and the climate. That’s why, for the past 30 years, World Wildlife Fund (WWF) and other conservation groups have been helping companies set targets, transform supply chains, develop responsible sourcing policies and industry standards, identify and mitigate sourcing risks, share best practices and reduce the private sector’s environmental footprint.  

Now more than ever, business leaders recognize the need for bold action. By 2020, 60 percent of Fortune 500 companies had already set a climate or energy-related commitment, a 12 percent increase over 2017. Science-based target setting has also grown significantly, with 63 Fortune 500 companies (13 percent) having set targets approved by the Science Based Targets initiative (SBTi), six times the number of companies that had done so in 2017.  

Nevertheless, we need to keep pushing. We know how the twin crises of nature loss and climate change can damage nature and economies. In 2021, climate-related disasters in the U.S. alone totaled nearly $100 billion. Today, over half of the world’s gross domestic product (GDP) is at moderate or severe risk due to nature loss.  

At the same time, efforts to fulfill the Paris Climate Agreement could unlock climate-related investments worth nearly $23 trillion by 2030 in sectors like renewable energy, energy efficiency and low-carbon technology A recent report by the Global Commission on Adaptation concludes that investments in adaptation can generate significant economic returns—many times more than their costs.  

This is where the proposed SEC rule comes in. Companies generally prefer less regulation rather than more, but today’s voluntary patchwork of frameworks and standards for corporate climate-related risk disclosures is a mess for investors as well as the businesses they are analyzing. The proposed SEC rule would help address this by creating uniform sustainability frameworks and standards for consistent and comparable reporting, thereby reducing uncertainty and establishing a more level playing field. I have heard firsthand from many companies that this rule will improve their business prospects over the long-term and allow U.S. companies to better compete with global companies that are either ahead of the U.S. in terms of their voluntary disclosures or, inversely, are operating in jurisdictions where little or no voluntary or mandatory standards exist.   

There is also overwhelming public support for this rule. According to a recent poll, 87 percent of Americans of all political stripes — many of whom have pensions, retirements and other investments overseen by the SEC — agree that public companies should disclose their risks from climate change. 

Once the final SEC rule comes into effect in the months to come, more corporations in the U.S. and abroad will undoubtedly take steps to adapt to climate change, remain competitive across international boundaries and prepare for a new age of clean commerce focused on sustainability. At the same time, the rule will help drive the protection of nature and key biodiversity by facilitating the shift of financial capital allocation away from carbon-intensive activities and towards investments that will speed the transition to a net-zero economy.  

The climate-induced disruptions unfolding across the globe present many risks for people and businesses, but savvy, forward thinking leaders can seize this moment to drive meaningful and measurable change. Government actions like this new SEC rule empower business sustainability leaders to deliver significant benefits to communities, companies and the world-at-large. 

Interested in having your voice heard on 3p? Contact us at editorial@3BLMedia.com and pitch your idea for a guest article to us.

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In its most recent survey on the mental health of the U.S. LGBTQ community, The Trevor Project found that almost three-quarters of young LGBTQ Americans say they've experienced some form of discrimination based on their sexual orientation or gender identity at least once during their lifetimes.

To that end, Glider, a hiring software platform that uses artificial intelligence (AI), and Omni Inclusive, a Minnesota-based staffing company, have joined forces to fund a scholarship program that focuses on LGBTQ students who are pursuing degrees in both STEM (science, technology, engineering and math) as well as the liberal arts. LGBTQ students in their second year of college who can prove financial need and have a minimum 3.0 grade point average are eligible to apply for the scholarships. 

Since the companies announced this joint scholarship program last month, they have received more than 250 applicants. 

From Glider's perspective, the scholarship program can open doors to new opportunities for young LGBTQ people, as well as establish trust for how AI can eliminate bias in hiring. While more companies are revamping their hiring processes, and making changes such as eliminating any university grade requirements, bias in hiring is still a stubborn problem at companies during and long after the hiring process. The problems with truly inclusive hiring lie in part due to the growing reliance on algorithms and other next-generation software technologies that weed out applicants, and often those who are people of color.

Such failure in hiring practices can cause hurt all around. At least one study has suggested that while bias clearly takes a toll on employees, it can also negatively affect corporate bottom lines as well.

Still, many feel a lingering mistrust over AI’s impact in the workplace. “There is natural hesitation towards a change of any nature," a spokesperson for Glider said. "Reactions to AI tend to come from a fear of the unknown and a lack of transparency. Similarly, skill tests or competency assessments have and continue to receive pushback from some recruiters with a belief that it will slow down hiring and candidates will not participate in the interview process.”

The Glider representative noted the research of one firm, which found that many job candidates actually prefer taking skill tests to demonstrate their competencies over such traditional screening processes as resume reviews. Further, job applicants who identify as a racial or ethnic minority overwhelmingly prefer skill tests by almost 70 percent. Since such assessments and AI screening can share the same goals, Glider argues that the result can even be a preference among more diverse groups, as AI can eliminate human bias, and do so better than individual people. 

The LGBTQ community has also confronted its own problems with bias in hiring and the workplace, particularly in STEM-related fields. A McKinsey study from 2020 found that junior employees struggle to find their footing in corporate America at a higher rate than their more senior colleagues — and women more than men — with bias among the key reasons.

To that end, Glider says its solution and other AI-based alternatives emphasize the use of questions related to skill tests or interviews, which are then vetted through subject matter experts in their respective fields. In addition, the questions undergo further scrutiny by industrial and organizational psychologists to ensure that such questions are fair and at the right level of difficulty. On that point, Glider says its software’s DEI capabilities eliminate bias from interviews, doing so proactively through a stringent question development process that masks personally identifiable information like names, gender and appearance. The company says it offers both candidates and hiring teams complete transparency while using the product, as its software defines permissible behaviors and rules of engagement to eliminate any ambiguity.

As far as their scholarships go, Glider and Omni Inclusive say their own companies reflect their program’s plan. Glider is a minority-owned company; Omni Inclusive is a is a female-owned business, with the CEO, Wen Stenger, identifying as LGBTQ.

Image credit: lachrimae72 via Pixabay

Earlier this week, Democratic Senator Joe Manchin announced that he would not support the climate provisions in the latest version of President Biden’s “Build Back Better” bill. That seemed to kill any chance of strong federal action on decarbonization, at least for the time being. Nevertheless, companies that have lobbied in support of Build Back Better still have an opportunity to make their voices heard.

What Is Build Back Better?

Build Back Better is an all-encompassing job creation, health care reform, tax reform and social progress bill. Among its provisions are several programs that leverage climate action as a platform for equitable economic growth. The bill is moving through Congress as part of the budget reconciliation process, so it only needs a simple majority vote to pass the Senate. Otherwise, it would require a filibuster-proof majority of 60 senators in favor.

The bill narrowly passed the House of Representatives last fall by a majority vote consisting of only Democrats in favor. The measure could also pass the Senate without any support from Republicans. However, that would require all 50 Democratic senators to vote in favor. With Joe Manchin (D-West Virginia) flexing his power to hold up the bill, they are short one vote.

As of last week, Manchin announced that he was willing to support the bill only if the climate provisions were stripped out.

Lots of talk, little action on federal climate policy

For all the corporate talk about sustainability, decarbonization and net zero goals, few leading companies have been willing to lobby persistently and publicly in support of the climate provisions within Build Back Better.

The organization InfluenceMap, for example, has analyzed lobbying activity around Build Back Better by more than 400 companies and 175 industry associations. As described in its analysis, currently only 75 companies have demonstrated engagement on the climate provisions of Build Back Better, whether positive, mixed or negative.

In fact, of the 75 companies that have engaged with Build Back Better, only 38 have consistently supported the climate provisions. Another group of 13 companies supported some provisions but not others, or expressed conditional support.

A third group of 17 companies showed “negative engagement,” with 13 related to objections over tax reforms. Also, in the “negative engagement” category were four other companies. Three were utilities and the fourth was Tesla, which has earned a set-aside partly due to the social media activities of CEO Elon Musk.

InfluenceMap points out that the small measure of corporate support for the climate provisions in Build Back Better is a sharp contrast to the amount of anti-climate lobbying conducted by industry associations.

“U.S. industry associations, including major cross-sector trade associations like the U.S. Chamber of Commerce, were highly actively opposed to the Build Back Better Act,” InfluenceMap notes.

According to InfluenceMap’s analysis, only 14 companies in the S&P 100 have consistently lobbied in support of the climate provisions in Build Back Better: Apple, Amazon, Salesforce, Exelon, Alphabet, Intel, Meta, Microsoft, Netflix, PepsiCo, Walmart, NextEra, General Motors and Ford Motor Company.

Using a different lens, the organization C2ES (Center for Climate and Energy Solutions) solicited 27 companies for a public letter to Congress in support of the climate provisions. The C2ES cohort focused mainly on top legacy manufacturing and energy firms that have pivoted into decarbonization: ABB, ArcelorMittal, bp America, CMS Energy, Constellation, Cummins Inc, Daikin U.S. Corporation, DSM, DTE Energy, Duke Energy, Edison International, Entergy Corporation, General Electric, HP Inc., Intel Corporation, LafargeHolcim, National Grid, PG&E Corporation, PSEG, Schneider Electric, Shell, Southern Company and Trane Technologies. The list also included startups LanzaTech and Proterra, as well as Ford and Salesforce.

The picture looks much brighter through a wider lens that accommodates smaller companies. Last September, before Build Back Better was trimmed down, the American Sustainable Business Network organized more than 300 companies to sign its own letter to Congress supporting the climate provisions. Ceres engaged almost 400 companies in similar letter last December, and the organization American Clean Power solicited more than 260 clean energy employers for another letter on January 24 this year.

Raising the corporate voice on climate action

Considering the depth of the partisan divide over energy policy, it’s no surprise that none of this activity persuaded Republicans in the House or Senate to vote in favor of Build Back Better. Senator Manchin is also unlikely to change his mind, considering his various ties to the fossil energy industry.

Still, as of this writing there are opportunities to act. As is his habit, Manchin left the door open for further discussion. In addition, new legislation could be forthcoming next year, if the Democrats hold their majority in Congress after the midterm elections.

The corporate voice is needed more now than ever. On top of GOP-led opposition to federal climate policy, a new obstacle arose last month when the Republican-appointed majority on the U.S. Supreme Court voted to strip down the authority of the Environmental Protection Agency to regulate power plant emissions.

InfluenceMap advises that climate advocates can leverage corporate statements on sustainability to build a new groundswell of support for federal climate legislation.

“All major U.S. companies should be asked to clarify their positions on the Build Back Better Act in relation to their own climate commitments and the current political and regulatory context in the U.S.,” InfluencMap advises. In particular, it recommends calling out companies that have expressed decarbonization and sustainability goals but oppose Build Back Better.  

InfluenceMap also suggests that companies with a track record of support for Build Back Better can take it to the next level. To start, they can dedicate their public relations resources to reaffirming their support. These companies can also enlist the power of senior management and CEO messaging in the effort.

Advocates can also target companies that mainly object to the tax provisions in Build Back Better, or that have expressed mixed support. Such companies can be asked to step up and clarify their position specifically on the climate provisions, especially if they have established their own corporate sustainability goals.

Senator Manchin and his allies in the fossil energy industry holds an outsized influence on federal energy policy. Corporations that are truly serious about stepping up the pace of climate action need to stop touting their own achievements, and start rallying more support for federal legislation.

Image credit: Gustavo Fring via Pexels

How can people be at their best in their careers if they work in an environment in which they don’t feel safe fully revealing who they are? 

That is a question faced by millions of LGBTQ workers and their employers every day. According to a recent survey by the Human Rights Campaign Foundation, 46 percent of LGBTQ workers say they are closeted, 53 percent are hearing jokes about LGBTQ people at work, and 31 percent are unhappy at their workplace because they don’t feel safe or well represented. 

Rebecca Snow, global vice president for people and organization at Mars, understands those feelings based upon her own life’s journey as someone who identifies as lesbian. 

“Through my personal experience, I have learned how much productivity and happiness is eroded when people cannot be themselves — both in their personal life and at work,” Snow told TriplePundit. “I have a deep belief that businesses will be more successful — and employees will be more creative and engaged — when people can authentically be themselves.”

That starts with creating psychological safety and building teams on trust as a foundational principle, Snow continued. Leaders set the tone by being open about their personal strengths, weaknesses, successes and mistakes; asking for help when they need it; getting to know their employees as human beings, both personally and professionally; and recognizing they are “not always the smartest person in the room,” she said. 

While Mars recognizes the climate can be tense for brands taking a stand on public issues, it has remained steadfast in its shows of support for the LGBTQ community and associates who identify as LGBTQ.

The building blocks of a diverse and inclusive workplace

Creating an inclusive workplace starts with a diverse workforce that represents society and represents the consumers or the clients being served, Snow said. 

“I think that workforce, ideally, is represented by its leadership so that people can see themselves in the people that lead the organization,” she told us. “Then you also need to have the right support mechanisms in place.”

Those support mechanisms include people knowing that they have someone to go to for help, such as a line manager or human resources staff, and establishing the infrastructure, policies and processes that support people in their workplace as they wrestle “with all of the various challenges that people have these days,” Snow said.

Above all, she insists it’s important to have a solid foundation. For more than a decade, Mars says it has proudly built and enhanced that foundation, both internally and externally, so LGBTQ associates can be themselves at work. Internally, this has included establishing an internal community called PRIDE, which works with the company’s internal LGBTQ community and allies. It also has an “Inclusive Leadership” program that educates managers on workplace issues involving inclusivity for all forms of diversity.

Mars also ensures full parity across its entire suite of benefits, offering the same benefits to domestic partners and spouses, including benefits related to adoption. The company offers health plans to all employees that cover services for transgender people, including gender transition-related treatments. Additionally, it created a transgender toolkit for managers and associates to use when going through a gender confirmation in the workplace.
Mars also hosts 12 global LGBTQ associate resource groups across its confectionary, food and pet care businesses. The resource groups empower thousands of Mars associates to work together to advocate on behalf of the LGBTQ community and to support the Mars business and each other with resources and education.

“With these programs in place, for the second year in a row, we were proudly recognized in the Human Rights Campaign Foundation’s 2022 Corporate Equality Index, receiving the highest possible score of 100 percent in the benchmark survey reporting corporate policies and practices related to the LGBTQ workplace equality,” Snow said.

Fostering a culture of inclusion

From a cultural perspective, Mars has been building an inclusive workplace through the I Can Be Me campaign, which started in 2018 in the United Arab Emirates and is now reflected in Mars offices across the globe. “It was started initially because of the diversity challenges in [the UAE] region,” Snow said. “We wanted firstly to celebrate the diverse nationalities of our workforce in that region, but we also  wanted to focus specifically on getting more women into the workforce, particularly into some of our factories, for example.”

I Can Be Me was sponsored by Mars leadership in the UAE and centers on leaders bringing their whole selves into the workplace and encouraging other people to talk about their own identities and be curious about others’. 

“Very rapidly the program grew into a much broader inclusion platform” that went far beyond the gender opportunity in the Middle East, “and we then rolled it out around the world,” Snow said. “It has become a consistent platform which starts with the individual, but can also be channeled to the particular  challenges a local market might face in their diversity, equity and inclusion agenda and what might be some of the things that they go after.”

For example, when Mars’ team in the United Kingdom started their I Can Be Me program, they asked local associates about the biggest issues they wanted to address. Five working groups were established, including groups on LGBTQ, flexible working, mental health, disabilities in the workplace and age diversity. 
 
In addition to the appropriate programs and policies, Snow said it is important for leaders to raise awareness of unconscious bias. 

“To achieve this, we arm and support our leaders and managers on the front line to build skills and provide toolkits to help foster a more inclusive dialogue with their teams,” she explained. “The company also acts externally around LGBTQ related issues with the intent of ensuring that it can continue to provide a safe, welcoming and inclusive workplace for its employees.”

Mars has openly opposed discriminatory legislation that has threatened the rights of its associates and was among the 300 companies to file an amicus brief to the U.S. Supreme Court urging an overturn of the Defense of Marriage Act (DOMA) in 2013.

Recently, Mars joined more than 200 companies signing the Human Rights Council’s Freedom for All Americans’ Business Statement Opposing Anti-LGBTQ State Legislation and stating clear opposition to harmful legislation aimed at restricting the access of LGBTQ people in society. 

The bottom line: Inclusion is key to better business

All of these efforts are reflective of Mars’ Five Principles — quality, responsibility, mutuality, efficiency and freedom — which aim to be the building blocks for how all Mars associates and businesses conduct themselves, Snow said. The company says it is committed to ensuring that each of its associates can be themselves at work, and associates have been open to the company’s efforts to promote business and each other with resources and education.

“Our overarching purpose is the world we want tomorrow starts with how we do business today, and one of our expressions of the world we want tomorrow is one where society is inclusive,” Snow concluded. “That's what we strive to live out as an employer. So, when you join our company, that’s effectively what you sign up for — you sign up to progressing that purpose. Our part of the bargain, if you like, is to make sure you are aware and up-skilled to be able to help progress that agenda.” Learn more about inclusion and diversity at Mars here.

This article series is sponsored by Mars and produced by the TriplePundit editorial team.

Image courtesy of Mars

Researchers from Dartmouth College recently released a new study in which they’ve tallied up the costs of climate change along with the economic benefits of such activities. The study’s authors sought to determine just how much economic damage that the Global North has done to the Global South with the former’s reckless release of greenhouse gases. In demonstrating that the world’s advanced economies have shifted the consequences of their growth to the southern hemisphere, the report opens the door for restitution. However, financial compensation is not enough to restore climate equity. While top emitters must be held accountable for the total cost of doing business, they cannot be allowed to continue such business as usual.

Only 10 countries are behind 67 percent of worldwide economic losses due to climate change. Yet, those same countries reap 70 percent of the economic rewards from emissions-causing activity. Of the 10 largest emitters, the U.S. leads the pack in causing 16.5 percent of worldwide economic losses, with China not far behind at 15.8 percent. Meanwhile, instead of suffering their own losses, the two countries came out on top in economic rewards at 18 and 16.8 percent, respectively. Additionally, the five biggest greenhouse gas emitters (U.S., China, Russia, Brazil and India) were responsible for $6 trillion dollars in global losses from 1990 to 2014.

The report, aptly titled National Attribution of Historical Climate Damages, dispels the myth that climate change is a “collective action problem” and points instead to the way activities by certain individual countries are having a disproportionate impact on the rest of the world. Christopher W. Callahan, one of the researchers on the study, is quoted by Dartmouth as saying, “Nations need to work together to stop warming, but that doesn’t mean that individual countries can’t take actions that drive change. This research upends the notion that the causes and impacts of warming only occur at the global level.” But will this end the inevitable standoffs between top greenhouse emitters who refuse to do enough unless others agree to a certain standard as well, or will it make it worse? 

Senior researcher Justin Mankin, also quoted by Dartmouth about the study’s outcome, said, “Greenhouse gases emitted in one country cause warming in another, and that warming can depress economic growth. This research provides legally valuable estimates of the financial damages individual nations have suffered due to other countries’ climate-changing activities.”

According to the study, while countries with colder baseline temperatures tend to release the most greenhouse gases, warming temperatures have not had overall negative economic effects quite yet. Rather, these countries’ GDPs have increased. Warm countries, on the other hand, have suffered much greater losses due to the effects of climate change on crop yields and labor, with an average GDP loss of one to two percent. Of course, as “warm” countries that are also releasing more than their share of greenhouse gasses, Brazil and India are exceptions. This begs the question: How much of their own economic growth are these two countries stunting by not better controlling their emissions? 

The economic effects of climate change aren’t expected to slow down anytime soon. In fact, a worldwide economic downturn of 11 to 14 percent is predicted for the middle of the century. While the big emitters like the U.S. won’t be immune to these effects, it is no longer up for debate that the Global South will suffer the brunt of the disaster. The Global North, therefore, has a moral imperative not only to compensate those who have suffered from its growth, but to immediately and drastically change the way that business is done so that all costs are paid by those who benefit. Legal action may very well be the only recourse — not only through lawsuits to restore the costs that have been wrongfully suffered by the Global South, but also in the form of injunctions to stop the continued flood of emissions.

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ESG reporting is the new arm of corporate social responsibility (CSR), and in an attempt to crack the S&P 500 ESG, some companies are catching the ire of the U.S. SEC (Securities and Exchange Commission).

Is that confusing? That’s one of the problems with environmental, social, and governance (ESG) reporting. Ambiguous language, confusing acronyms and unclear definitions detract from the insight that the metric is meant to provide. 

Academics and business executives question the effectiveness and morality of ESG reporting, often by citing its lack of consistency. Perhaps most notable among them was Elon Musk when he tweeted, “ESG is a scam.” Musk made the claim after his electric vehicle company Tesla was pulled from the S&P 500 ESG Index.

EY’s global vice chair of sustainability, Steve Varley, is a proponent of ESG reporting and investing, but he admits that “more work must be done to encourage open collaboration and trust-building among those who shape the industry.”

In order to maintain the progress made in sustainability reporting, EY (long known as Ernst & Young) has commissioned a new report on how to strengthen ESG ratings.

What’s wrong with current ESG reporting?

To appeal to consumers and investors, companies want to share publicly that they are responsible corporate citizens who care for the environment and important social causes. Without a regulated standard for ESG reporting, however, companies are essentially free to claim what they want. What counts as “green initiatives” or “social progress” is up to the company.

Consumers and investors want to support sustainable brands, but this creates an incentive for companies to greenwash and undermines the value of ESG reporting.

In response, the SEC created a Climate and ESG Task Force in March 2021 to investigate companies’ ESG claims. In May 2022, it issued its first enforcement action against the NYSE-listed Brazilian mining company, Vale S.A. The task force found that Vale made false claims and misled stakeholders about the safety of its dams, one of which collapsed and killed at least 259 people.

The SEC task force is a step in the right direction, but the commission’s jurisdiction is limited to publicly traded companies in the United States. ESG is a global concern, and better independent oversight, or assurance, is needed.

“About half of the world’s largest companies have assurance over their sustainability disclosures, though the significant majority are obtaining “limited” rather than “reasonable” assurance on a par with what is provided over financial reporting,” says Marie-Laure Delaure, who leads EY’s assurance practice.

How to improve ESG reporting

In response to the growing criticism of the rating system, EY released a new report on the state of ESG and recommended five actions to strengthen the credibility of the metric.

The report recommends more transparency over ESG ratings, increasing understanding of the varying uses of sustainability information, putting in place conditions that enable assurance, developing comparable and interoperable taxonomies, and addressing the barriers faced by market participants in emerging countries.

According to Varley, “ESG is facing a make-or-break moment and requires a whole system approach to addressing these issues.”

Acting on these recommendations would remove a lot of the grey area in ESG reporting and make it easier for investors and consumers to support truly sustainable businesses.

Why is ESG important?

Financial growth is vital to maintaining a strong economy, but positive economic performance should not come at the cost of a deteriorating environment or violating human rights.

We want to know that companies are acting in good faith.

“According to the most recent EY Global Institutional Investor Survey, 89 percent of investors surveyed said they would like the reporting of ESG performance, measured against a set of globally consistent standards, to become a mandatory requirement,” says Varley.

Before it can become mandatory, however, the ESG rating system requires vast improvements, global cooperation and regulatory oversight.

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With the global meat industry’s profits increasing during the pandemic and the dairy industry sticking to its marketing playbook, there seems to be little incentive to shake up these sectors.

However, the meat and dairy industries are more vulnerable than they appear. A new report shows that investors are aware of sustainability issues within those sectors’ value chains, and climate change may force the hands of corporations in this space, regardless of their products’ popularity.

Meat and dairy: stranded in a vicious cycle?

The Changing Markets Foundation recently released a report urging investors to step up and take action to address the meat and dairy industries’ contributions to climate change.

Researchers from the Changing Markets Foundation surveyed more than 200 investors. The organization’s goal was to see how the financial sector views the meat and dairy sector’s viability at a time when climate change is now become more of a concern.

More than 80 percent of investors surveyed stated that inaction on climate change could lead to stranded assets and other material risks to investments in the industry. Nearly three-quarters of those surveyed think companies should report their methane emissions alongside other greenhouse gas (GHG) data.

Yet, 55 percent of respondents believe investors are not adequately addressing the risks associated with climate change.

The campaigns director at Changing Markets, Nusa Urbanic, said, "We are currently at a crucial crossroads that will determine the future of food production for decades to come. Despite the majority of investors believing that climate change presents a material risk to meat and dairy industry-related investment, it is concerning that more than half also said that investors are not sufficiently addressing those risks."

Added Urbanic, "The alarming effects on the sector multiply the hotter the planet gets. Farmers across the globe are already feeling the pain and we need rapid action to break this vicious cycle."

Livestock and its future in the climate crisis

According to the Changing Markets report, food production accounts for more than one-third of GHG emissions. A substantial portion of those emissions come from meat and dairy production.

For example: if meat and dairy were replaced with a vegan diet, the data suggest that emissions could drop by as much as 70 percent. That is nearly impossible, however, and to hit goals established by the Intergovernmental Panel on Climate Change (IPCC), all sectors need to reduce their emissions.

But companies that rely on livestock still face huge financial risks. If the world warms by 2 degrees Celsius or more, livestock could experience losses that could total more than $12 billion. Approximately 7 to 10 percent of all livestock would be lost at a global average temperature increase of 2 degrees; but even more worrisome, according to the report’s authors, the world is on track for 3 degree increase in global temperatures by mid-century.

So even if businesses vested in the meat and dairy industry refuse to make any changes, rising temperatures worldwide will eventually make such decisions for them.

Methane reductions are vital

The investors that the investors report’s authors surveyed said they seek methane disclosures from companies in the dairy and meat sectors, and livestock (primarily cows) generate about one-third of such emissions. A focus on methane, concludes the report, can help repair the world’s climate much quicker than other GHG emissions as methane is a much more potent greenhouse gas than others such as carbon. To that end, companies can take actionable steps in order to reduce their methane emissions.

Changing Markets’ survey listed four recommendations for investors: report their science-based climate and methane policies; ensure investees have climate action plans with a focus on methane; ask food companies to disclose their investments in meat and dairy alternatives; and support the growth of regenerative farming practices.

While the report focuses on how the investors can turn their beliefs into action, some companies have already begun to lead the way.

One such company is Upfield, which makes a wide range of plant-based food and spreads. The company’s reporting shows that methane alone accounts for 7.5 percent of its GHG inventory. Upfield, with a portfolio that includes brands like Violife, Flora, Country Crock and Bertolli, has acknowledged that dairy products comprise only 1 percent of its ingredients — but that amount accounts for 7 percent of its carbon footprint and 51 percent of its methane emissions. 

Ben and Jerry's Project Mootopia, which reduces and reuses methane from cows, is adopting new technologies to follow through on its climate action plan. Among the brand’s goals are to reduce emissions on 15 of its dairy farms to half the industry average by 2024 as well as plans to scale up regenerative agriculture across its supply chain.

In the meat industry, Applegate is adopting regenerative agriculture practices. Within the dairy sector, the same can be said of Danone, which sells a wide range of dairy products. Regenerative farming and other sustainable agricultural practices allow for the restoration of biodiversity — and even offer farmers opportunities to develop new income streams.

While these examples show potential for change within the meat and dairy sectors, many companies in this space still face a long road ahead. As the IPCC has repeatedly stated, GHG reductions are needed in all sectors to hit global climate action goals; and specifically for  the meat and dairy industries, methane reductions will require bold action from both investors and businesses.

Image credit: David Mark via Pixabay

The self-professed “pro-life” movement in the U.S. has always been a sham, but the charade continued for decades until last month. The recent U.S. Supreme Court decision in the Dobbs v. Jackson Women’s Health Organization case has now empowered states to impose new restrictions on abortion, with predictable results. Popular media has already latched on to a growing list of horror stories as abortion care is denied or delayed. It is only a matter of time before corporations begin to feel the heat, especially when their own employees suffer.

Republican attorneys general in the spotlight over abortion

A fair amount of media activity has focused on corporate support for anti-abortion Republican legislators and state governors. Court observers have also pointed out that all six of the Supreme Court justices who rendered the majority decision in Dobbs were appointed by Republican presidents. Except for a few outliers, the partisan political lines over abortion have been clearly drawn.

Republican state attorneys general have not come up for similar scrutiny, but they have also played a pivotal role in recent years.

For example, Mississippi Attorney General Lynn Fitch is not exactly a household name. However, as a member of the Republican Attorneys General Association (RAGA), she was instrumental in building the legal strategy that convinced all six Republican-appointed Supreme Court justices to nullify 50 years’ worth of abortion protections.

RAGA is beginning to get more attention from the media, though. On July 24, the publication American Prospect took note of the RAGA's role in raising funds to support anti-abortion candidates, with money flowing from corporations as well as individuals and “dark money” groups.

American Prospect does not reach a particularly wide audience, but CNBC does. The multi-platform news organization claims an audience of more than 355 million people per month across the entire organization. On July 14, CNBC published an article about RAGA under the headline, “Republican attorneys general to host private retreat for corporate donors at swanky Palm Beach resort.” Almost 20 corporate and trade groups reportedly intended to participate in the event, held last weekend at The Breakers in Palm Beach, Florida.

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As described by CNBC, those planning to attend included lobbyists and executives from CNBC’s own corporate parent, Comcast, along with Match Group, General Motors, Johnson & Johnson, Anheuser-Busch, Juul Labs, Koch Industries, Lowe’s and Walmart.

“Lobbying giant Pharmaceutical Research and Manufacturers of America, or PhRMA, and the U.S. Chamber Institute for Legal Reform, a business legal advocacy group, are also listed as set to attend the upcoming retreat,” observed CNBC reporter Brian Schwartz.

“Records show that, since the 2020 election cycle, almost all the corporations and trade groups listed to attend the retreat have, combined, contributed over $4 million to the Republican attorneys general group. RAGA has raised over $4 million from all donors in the first quarter of 2022 alone,” Schwartz elaborated.

“The retreat is to take place as the group seeks more donations to fend off legal attacks from Democrats seeking to protect abortion rights. A June 24 fundraising email said ‘every donation will help the Republican Attorneys General combat the Democrats’ pro-abortion agenda and stand tall for life,’” he added.

Calls by Schwartz to the invitees resulted in only seven responses on the record. Of those, only Pfizer confirmed that it was invited, but opted not to attend.

The horror stories are piling up

In contrast to the elite party atmosphere at the RAGA gathering, the media has been front-loaded all week long with stories about ordinary people — women, girls, and transgender or non-binary individuals — who are already suffering the consequences of the Dobbs ruling.

These stories have already become rich grist for the media mill, beginning with the 10-year-old girl in Ohio who was forced to travel out of state for abortion services. The case has helped raise public awareness about the frequency of pregnancy among pre-teen rape victims.

“…Ohio’s own abortion statistics and other reporting show that it’s disturbingly possible for a 10-year-old to become impregnated in the Buckeye State,” reported the Ohio Capital Journal on July 13.

Another media-attracting case surfaced on July 18. People Magazine was among the news organizations to amplify a CNN interview with Marlena Stell, a Texas businesswoman and popular YouTuber whose planned pregnancy ended when an ultrasound revealed the death of her fetus at approximately 9 weeks. Stell also shared the interview with her 79,000 Twitter followers.

Adding to Stell’s dismay at losing her pregnancy, her doctor refused to extract the fetus unless she submitted to a second invasive ultrasound. She spent two weeks carrying the dead fetus before another doctor finally consented to provide an abortion without forcing her to undergo the additional distressing and medically unnecessary procedure.

“I get so angry that I was treated this way because of laws that were passed by men who have never been pregnant and never will be," Stell said, as cited by People Magazine. "I'm frustrated, I'm angry and I feel like the women here deserve better than that.”

"It doesn't matter what side of the fence that you want to sit on, laws like this affect all women regardless of what situation you're in and it's not right," she emphasized.

The law of unintended consequences kicks in after Dobbs

Stell is far from alone as the effects of the Dobbs decision linger on. All pregnant people in her home state of Texas now face the risk of having appropriate medical care withheld, regardless of their desire to keep or terminate a pregnancy.

“In a post-Roe world, physicians in states where abortion has been banned have to weigh the legal implications of their actions, instead of making decisions based on what prevailing medical literature recommends,” the Texas Tribune reported on July 15. “In Texas, doctors can face six-figure fines and be put in jail for any disallowed abortions.” 

The Tribune cited a letter sent from the Texas Medical Association to state medical officials, charging that “hospital administrators and their legal teams are stopping doctors from providing medically appropriate care to patients with some pregnancy complications.”

At one hospital, doctors were reportedly instructed to delay care for an ectopic pregnancy, even though serious risk to the patient could be avoided with prompt treatment. At two other hospitals, doctors were reportedly told to send pregnant patients home if their water broke too early in the pregnancy, rather than promptly removing a fetus that had no chance of survival. The policy would force them to wait at home for hours, days or longer, suffering and miserable while facing the risk of infection and other complications, until their own systems eject the fetus.

The new restrictions on abortion have also quickly rippled out to have an impact on other areas of healthcare. On July 16, for example, Associated Press reporter Lindsey Tanner added lupus patients to the list of those affected by the Dobbs decision.

“A sexual assault survivor chooses sterilization so that if she is ever attacked again, she won’t be forced to give birth to a rapist’s baby. An obstetrician delays inducing a miscarriage until a woman with severe pregnancy complications seems ‘sick enough.’ A lupus patient must stop taking medication that controls her illness because it can also cause miscarriages,” Tanner wrote.

When “both sides do it” is not enough of a response

The spectacle of representatives from top U.S. firms cavorting with anti-abortion state attorneys general and other allies will eventually come home to haunt corporate leaders, and the familiar “both sides” refrain will not help them in the wake of the Dobbs decision.

In his CNN article, Brian Schwartz cited General Motors spokesperson Jeanine Ginivan, who noted that the company also supports the Democratic Attorneys General Association. 

“General Motors has been a longtime supporter of the Democratic Attorneys General Association and the Republican Attorneys General Association. GM believes that through continuous engagement with these organizations it has the best opportunity to build an understanding around issues important to GM and the auto industry,” Ginivan said, as cited by Schwartz.

That “both sides” attitude will be no comfort to thousands of GM employees in Ohio, Texas and other anti-abortion states, who find the door slammed shut when they seek medical care for an unwanted, unsafe or complicated pregnancy.

The fact is that only one side is responsible for the pain, suffering and government-sanctioned surveillance that already flow from the Dobbs ruling. U.S. business leaders need to stop sticking their heads in the sand, and start taking meaningful action to repair the damage.

Image credit: Jesse Collins via Unsplash