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What a difference a regime change can make, especially when it comes to climate action.

For one thing, the new presidential administration has embarked upon its climate action plan with an emphasis on jobs and social justice — a strategy the Washington Post notes comes years after many U.S. states have already taken a similar approach. The shift in strategy is a welcome break from the 40-year-old “jobs versus the environment” conversation. But even more importantly, a laser-like focus on climate change is about to permeate just about every federal government agency in the U.S.

One agency that is aboard the Joe Biden climate action plan is the U.S. Securities and Exchange Commission (SEC), which for years either avoided or has not been resourced with the tools it needs to lean on companies to take climate change risks more seriously.

Two weeks in, however, the SEC is poised to change its tone and respond to investors who insist that companies be more forthcoming about their ESG (environmental, social and governance) performance, especially when it comes to their analyses of climate change risks that could affect their financial performance in the long term.

This new direction is evident with the announcement that Satyam Khanna will join the SEC as a senior policy advisor for climate and ESG. For now, he will report to the agency’s acting chair and advise the agency and its various offices and departments on all matters related to ESG.

Khanna was recently a fellow at NYU School of Law’s Institute for Corporate Governance and Finance and was a member of one of the Biden-Harris presidential transition team. He is hardly a corporate lackey — among his bylines in the past year is a co-authored op-ed on the New York Times that urged Congress to act fast to offer small businesses suffering across the U.S. a financial lifeline.

One organization lauding the move is the nonprofit sustainability advocacy organization Ceres, which has long urged U.S. regulators to look at the business landscape through a climate action lens.

“Satyam Khanna has substantial experience with the SEC, the Financial Stability Oversight Council at the U.S. Treasury Department, and in academia,” said Steven M. Rothstein, who heads the Ceres Accelerator for Sustainable Capital Markets, in an emailed statement to TriplePundit. “We’re encouraged by his position on climate change, and are looking forward to working with him to address it as a systemic risk to our markets and our economy.”

Ceres has long been urging companies, especially those within the financial sector, to change how they talk to their investors by focusing on long-term business threats such as climate change. The Boston-based group has also been quick to call out federal regulators for enacting rules that actually put investors at risk instead of shielding them.

President Biden’s nominee to chair the SEC, Gary Gensler, is widely expected to take a stronger stand on SEC enforcement than his predecessors — and he is assumed to be warm to the idea of having the SEC do its part to push for more climate change-related disclosures, as well as for additional transparency on such problems as political spending and human rights.

Image credit: Brandon Mowinkel/Unsplash

Getting back to normal means focusing again on the Sustainable Development Goals, otherwise known as the SDGs. Here’s how businesses can help us to meet our 2030 targets.

For everything that can be said about 2020, the one certainty is that it didn’t exactly go to plan. Governments had whole policy agendas thrown to the side. Many businesses abandoned growth plans in favor of survival. And we all, as individuals, essentially stopped living our lives as we intended.

The challenges of the past year are still looming large, but with the rollout of vaccines and a new occupant in the Oval Office, we’re seeing the first signs that we might be able to get back on track as a society as the year progresses.

Nowhere is this more important than progress towards the most ambitious of plans- the Sustainable Development Goals, or the SDGs. Agreed by the United Nations General Assembly in 2015, the SDGs set out a series of goals for the world to achieve by 2030. From eradicating poverty and hunger to tackling the climate crisis, the SDGs encompass the most fundamental challenges we face as a society. They are simple and daunting in equal measure.  

Progress on the SDGs had been painfully slow, but they showed progress nonetheless. But 2020 was different. As Bill and Melinda Gates show in their recent "Goalkeepers" report, 2020 was the first year where not only did momentum stall for the majority of the SDGs - they actually fell several steps backwards.

It’s time to get back on track. We have 10 years to try and achieve these goals and, as with all of the great endeavors attempted by mankind, it won’t be achieved unless governments, businesses and individuals play their part. While much has been made of the role governments have to play, the role of businesses is too often overlooked.

For businesses to truly have an impact, they need to put the SDGs at the heart of their business strategy. The problem is that they rarely know how to do this effectively. The SDGs are often relegated to a phrase trotted out by executives and consultants that sounds profound until you dig a little deeper. This is unfortunate because, when done properly, these goals can genuinely help businesses to improve their impact and identify innovative opportunities for growth.

The approach that most businesses take is to pick a handful of SDGs and focus their corporate responsibility efforts around them. This is an old-fashioned approach that sees sustainability as separate to a company’s core operations. At best, this approach doesn’t have the desired impact, but, at worst, it serves as a public relations strategy that allows companies to avoid truly overhauling their sustainability.

The other problem with this approach is that it tends to steer a company towards maximizing the areas where they can have a positive impact at the expense of the areas where they should be addressing their negative impact.

The starting point for any business needs to be an honest assessment of their operations to understand both the positive and negative impact they have against each of the SDGs. If this sounds excessive, then you need to ask yourself if it’s really acceptable for a modern business leader to not know the impact they have on issues like poverty, inequality or climate change.

From here, a business needs to do three things to genuinely integrate the SDGs into their business strategy. The first is to set clear and specific targets, which may sound basic, but most businesses fail to do so. This is borne out by analysis of company reports, with research by PwC showing that while 72 percent of companies mentioned the SDGs only 14 percent mentioned specific targets associated with them.

To do this, a business should look at the sub-targets defined within specific SDGs to agree a tangible and relevant business target. For example, SDG 12, “Responsible Consumption and Production,” includes a sub-target to “achieve the sustainable management and efficient use of natural resources” by 2030. A business could address this by trying to move away from the use of unsustainable materials in their supply chain. Businesses can also access a UN database of indicators for all sub-targets that give examples of how you can measure progress.

But this is not enough on its own. A business needs to report against them and be transparent about its progress. This should be an annual process and include detail on the measures they took to reach them, their effectiveness, and what they plan to do in the year ahead. Given the opportunities and risks that such reporting will uncover and monitor, this is something that will matter to all stakeholders, including investors and business partners.

The third and final thing that businesses need to do is the most important. They need to place the value of meeting these targets on an equal footing to financial targets. They need to recognize and reward employees for success, not with token gift vouchers, but with bonuses and promotions. Well-run businesses that are properly incentivized towards targets will achieve them. If these targets are seen as secondary to financial targets, or a low priority for senior management, it’s inevitable that success will be lower.

As businesses look to get back on track, there is a financial as well as ethical case to make the SDGs a central part of their business strategy, with research showing that 78 percent of customers would change their buying behavior on the basis of whether or not a company has signed up to the SDGs. Put simply, in the long term only sustainable businesses will be successful.

Image credit: Dan Bolton/Unsplash

Viewers of Super Bowl LV on February 7 in Tampa will notice many changes to this year’s event, in keeping with the “new normal” of pandemic life. Fans (including 7,500 vaccinated healthcare professionals) will fill only one-third of the seats at Tampa's Raymond James Stadium in compliance with social distancing restrictions. Amanda Gorman, the National Youth Poet Laureate who made international headlines during President Biden’s inauguration, will read her new poem celebrating frontline workers, making her likely the first poet in Super Bowl performance history. Finally, while several brands will be making their Big Game advertising debuts, many of the biggest names traditionally associated with Super Bowl commercials will sit out this year.

Here’s a look at some of the companies choosing to make a statement by advertising - or not advertising - during Super Bowl LV on Sunday.

New faces at Super Bowl LV include Chipotle and Hellmann’s

Many Americans are eating more – if not most - meals at home as COVID restrictions continue. Several of this year’s first-time Super Bowl advertisers reflect this shift.

Fast-casual restaurant chain Chipotle will make its big game debut with a second-quarter commercial entitled “Can a Burrito Change the World?”. The ad follows a little boy as he imagines how a single meal – in this case a Chipotle burrito – could make farming and more sustainable, including, “how we plant things, water things, grow things, pick things, move things.”

The ad reflects Chipotle’s focus on “The Next Generation of Farming.” Along with the commercial, Chipotle has promised $5 million over the next five years to help young farmers and ranchers keep their businesses sustainable – both in environmental impact and in profitability. On Super Bowl Sunday, Chipotle will donate $1 from each delivery order to the National Young Farmers Coalition.

As Americans ate more at home over the past 12 months, they also threw away more food. Mayonnaise brand Hellmann’s (branded as Best Foods on the West Coast) is addressing the growing food waste crisis in its first-ever Super Bowl commercial. The spot, which stars Amy Schumer, encourages viewers to use Hellmann’s mayonnaise to get creative with their fridge and pantry contents, and “make taste, not waste.”

In addition to raising awareness through the Super Bowl ad, Hellmann’s is donating $100,000 to ReFED, a nonprofit committed to reducing food waste in the United States. Hellmann’s also will be partnering with Harvard Law School's Food Law and Policy Clinic to “push for clearer food labeling standards” and prevent food waste caused by unclear date labels on food.

Returning players: Anheuser-Busch brands

Since 1975, Anheuser-Busch has held the exclusive beer-advertising rights during the Super Bowl. This year, the company will air four minutes of ads over the course of the game. While as of press time, Anheuser-Busch had yet to release exactly how this airtime would be split up, the company had confirmed they will be highlighting six brands: Bud Light, Bud Light Seltzer Lemonade, Michelob Ultra, Michelob Ultra Organic Seltzer, Stella Artois and Cutwater Spirits. There will also be a standalone Anheuser-Busch corporate spot.

One exciting new development for Super Bowl LV: all of Anheuser-Busch’s Super Bowl television spots have earned gold-level Green Seals for Sustainable Production by the Environmental Media Association (EMA), a nonprofit group focused on linking leaders in the fields of entertainment, entrepreneurship and environmental progress.

The EMA Green Seal is an “established set of guidelines for sustainable production of TV, movies and events.” Every employee and vendor involved in the production of each commercial – from makeup to catering to filming to transportation – was required to meet the EMA’s sustainability standards. Anheuser-Busch is the first major advertiser to partner with the EMA and plans to continue these new sustainable best practices across all future marketing and advertising productions.

A legend takes a different approach: Budweiser

It is going to seem strange (for this New England-based writer, at least) to see Tom Brady wearing a non-Patriots uniform in this year’s Super Bowl. But another Super Bowl staple will also look different this time – Budweiser.

Unlike the six Anheuser-Busch brands mentioned earlier, Budweiser will not air a commercial during this year’s game.

Instead, according to the official press release, the brand will take the money traditionally spent on airtime and “reallocate that investment to support the Ad Council and public awareness and education throughout the year for the COVID-19 vaccination effort.”

There is still a new Budweiser commercial; however, it is running online only. The advertisement, entitled “Bigger Picture” and narrated by Rashida Jones, reflects on America’s heroes in the fight against coronavirus.  

Maybe next year: Pepsi, Coca-Cola, Hyundai, Avocados from Mexico

Budweiser isn’t the only brand saving on ad buys this Sunday. Coca-Cola and Pepsi also will be absent from the Super Bowl LV advertising lineup. Pepsi will still be the title sponsor of the halftime show starring The Weeknd, though, and parent company PepsiCo will be airing ads for some of its other brands. Other big names opting out of this year’s Super Bowl include Hyundai and Avocados from Mexico.

It remains to be seen whether or not advertisers’ decision to “sit out” Super Bowl LV is a one-off response to the strange times we are currently living in, or the start of a trend away from TV advertising and toward alternate promotions.

Image credit: Ryan Haft/Unsplash

Over the course of five days, world business and political leaders during the World Economic Forum’s Davos Agenda engaged in a deep - and virtual - dive into an economy in crisis, soaring unemployment and debt levels, growing income inequality and climate change.

Given that daunting set of problems, was the prevailing mood one of resolve or despair? Judging from Deloitte’s annual resilience report, it could be the latter—or at least a whole lot of worry.

Worry takes center stage at Davos

In a survey of 2,260 private- and public-sector leaders in 21 countries, Deloitte found that most global business leaders still do not feel confident leading through disruption, and even more believe their organizations are ill-prepared to pivot and adapt.

More than six in 10 organizations expect to see either occasional or regularly occurring disruptions of the current scale going forward, and climate change is seen as the top threat in this regard, Deloitte found. Yet more than two-thirds of the leaders who Deloitte surveyed don’t have complete confidence in their organizations’ ability to pivot and adapt to disruptive events.

The executives’ view of the top societal challenges facing their companies captures the essence of a disruptive 2020: After climate change, they named health care issues and prevention; gaps in education, skills, training; income inequality and distribution of wealth, and systemic bias and inequality as the top five concerns.

Not panicking and keeping the long view seems to be the key. Deloitte’s survey found that more than 85 percent of leaders whose organizations have successfully balanced addressing short- and long-term priorities felt they had pivoted very effectively to adapt to the events of 2020, whereas fewer than half of organizations without that balance felt their organizations adapted well.

Questions over measuring the shift to stakeholder capitalism

The Davos Agenda marked the launch of WEF’s “The Great Reset” initiative, which is all about the long term, according to Professor Klaus Schwab, WEF’s founder and Executive Chairman, who said: “The pandemic represents a rare but narrow opportunity to reflect, reimagine and reset our world.”

Schwab launched his latest book, Stakeholder Capitalism, during this week’s event. The book calls for a more inclusive, sustainable and resilient global economy post-COVID in the face of challenges like rising income equality and short-sighted exploitation of natural resources. That means, he writes, finding “measures of success that allow us to move beyond a myopic focus on GDP and short-term profits.”

Whether that shift from short-term profits is taking hold in a broad way is still to be determined, but WEF has developed a set of Stakeholder Capitalism Metrics to help companies measure not just on profit but on “Principles of Governance, Planet, People and Prosperity.”  

That might elicit a groan from the sustainability practitioners already lost in a sea of voluntary standards. The good news is, the five leading voluntary framework and standard-setters - CDP, the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council, and the Sustainability Accounting Standards Board - have said they are all behind the effort to work towards a single, coherent, global ESG reporting system and have contributed to the Stakeholder Capitalism Metrics.

Agreement on how to measure progress will be welcome in a world where business leaders have to contend with a lot more than how to keep their companies financially afloat. The Davos Agenda summed up those challenges in its seven themes, which range from environmental sustainability worldwide to building a more inclusive, sustainable job market for all citizens.

Poverty and inequality pose systemic challenges

Bill Gates took to the virtual stage to underscore that after falling for two decades, extreme poverty has risen by 7 percent during 2020, wiping out advances on ending hunger and poverty by 2030. That widening socio-economic gap along with deeper racial and gender inequalities was the focus of another sobering assessment on the state of global equality that Oxfam delivered during the Davos Agenda.

Among the recommendations that WEF advocated during the Davos Agenda to tackle surging poverty included a “people’s vaccine,” allowing for everyone to get inoculated in the coming months, not only the wealthy; taxing extreme wealth to invest in a more sustainable and just future for all; and expand access to healthcare and social welfare programs to prevent more people from falling into poverty.

“You cannot negotiate with physics” - Greta Thunberg delivers her message

The presence of so many world leaders didn’t impress everyone. All that talking is so much hot air, long among the criticisms that have come from youth climate and social justice activists. And what would Davos be without an appearance by Swedish climate activist Greta Thunberg, who shook up the staid gathering with her unflinching assessment in her remarks in 2019 when she said “our house is on fire,” and again in 2020.

This year, once again, in a video message on YouTube, she once again made clear her disappointment in the leaders at Davos for what she sees as “lame” commitments and lack of progress on climate change.

“Targets like net zero emissions 2050. Targets that equal surrender…We understand that the world is complex and that change doesn’t happen overnight. But you’ve now had more than three decades of blah, blah, blah. How many more do you need? Because when it comes to facing the climate emergency, the world is still in a state of complete denial…But I assure you this. You cannot negotiate with physics,” Thunberg said.

Image credit: U.S. Department of Defense/Wiki Commons

Amid the raging novel coronavirus pandemic, another global threat has become more virulent, and in a recent report, Oxfam gave it a name: The Inequality Virus. Extreme economic and racial inequality has grown exponentially worse since the emergence of COVID-19, the global charitable organization says, and business, along with government and the rest of society, face “a small but shrinking window of opportunity to create a just economy after COVID-19.”

Published on the opening day of the World Economic Forum’s (WEF) virtual Davos Agenda, the report laid out the yawning gap between wealthy and poor in stark terms. The 1,000 richest people on the planet recouped their COVID-19 losses within just nine months, Oxfam said, but it could take more than a decade to for the world’s poorest to recover from the economic impacts of the pandemic.

COVID-19 has the potential to increase economic inequality in almost every country at once, the first time this has happened since records began over a century ago, the report showed. “Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly White male, billionaires to bounce back,” according to Oxfam. 

Nearly 300 economists expect inequality to grow worse

The organization was not alone in its sober assessment. A global survey of 295 economists from 79 countries, commissioned by Oxfam, reveals that 87 percent of respondents, including Jeffrey Sachs, Jayati Ghosh and Gabriel Zucman, expect an “increase” or a “major increase” in income inequality in their country as a result of the pandemic.

While history will remember this pandemic for taking over two million lives worldwide to date, it will also be a marker of hundreds of millions of people being pushed into poverty, with an estimated doubling of food insecurity, as TriplePundit has reported.

Recession is over for the world’s richest, while millions struggle

In Oxfam’s assessment, the recession is over for the richest. It points out that the world’s ten richest men have seen their combined wealth increase by half a trillion dollars since the pandemic began, which, as they point out, is more than enough to pay for a COVID-19 vaccine for everyone and ensure no one is pushed into poverty by the pandemic.

But in reality, the pandemic has led to the worst job crisis in over 90 years, with hundreds of millions of people now underemployed or out of work. Women are hardest hit, as they make up roughly 70 percent of the global health and social care workforce - essential jobs but often poorly paid that put them at greater risk from COVID-19. Women accounted for 100 percent of the 140,000 jobs lost in December in the U.S., the National Women’s Law Center reported.

The inequality falls across racial lines as well, according to Oxfam’s report. Afro-descendants in Brazil are 40 percent more likely to die of COVID-19 than White people, while nearly 22,000 Black and Hispanic people in the U.S. would still be alive if they experienced the same COVID-19 mortality rates as their White counterparts. Infection and mortality rates are higher in poorer areas of countries such as France, India, and Spain while England’s poorest regions experience mortality rates double that of the richest areas.

GDP makes a poor metric for equality, says Oxfam

“Fairer Economies” is one of the seven key themes at Davos 2021, and WEF has said addressing inequality is key to a rapid economic recovery from COVID-19. 

In a press conference announcing the release of the report, Oxfam Executive Director Gabriella Boucher called on governments and business to “measure what matters” if they are serious about creating a world that is profoundly more equal. And that leading metric should not be the prevailing Gross Domestic Product (GDP), she added.

“GDP is an obsession in economic growth,” she said. “What does it mean really? One country may be growing at the same rate as another but if it is much more unequal, all that growth is going into the hands of a very few people. In another country, if the wealth is very distributed, actually more people are benefitting.”

She pleaded with leaders to focus on metrics for well-being and sustainability, meaning that “to measure things that we really want to impact, and then introduce policies that help us achieve those goals.”

Pandemic shows that business needs to step up

This could begin with the coronavirus marking a turning point in the taxation of the richest individuals and big corporations, Oxfam suggests in its report, noting that a temporary tax on excess profits made by the 32 global corporations that have gained the most during the pandemic could have raised $104 billion in 2020. This, it added, is enough to provide unemployment benefits for all workers and financial support for all children and elderly people in low- and middle-income countries.

At the press conference for the report launch, Rebecca Marmot, Chief Sustainability Officer for Unilever, acknowledged that “There are key structural and systemic inequalities in the world that have sadly been further accentuated by COVID. The role of the private sector is really clear.

We need to reshape society and economy so there is a new model that brings longer term prosperity for everybody, a new normal. Unilever looks at how companies can address inequity right across their full value chain in a collaborative way.”

The Great Reset is the theme of Davos this year and the business community seems to waking up to the reality that returning to the status quo after the pandemic and ignoring endemic challenges like racial inequality could expose some companies as laggards.

Unilever makes set of bold commitments 

Unilever is among the members of the Partnering for Racial Justice in Business initiative announced at Davos this week, a global coalition of organizations and their C-suite leaders who say they are committed to leveraging their individual and collective power to build equitable and just workplaces for professionals with under-represented racial and ethnic identities.

Last week Unilever committed to a range of actions with the aim to build a more inclusive and equitable society. It pledged that everyone who directly provided goods and services to the company would earn at least a living wage or income by 2030; that it would spend 2 billion euros annually with suppliers owned and managed by people from under-represented groups by 2025, and it would equip 10 million young people with essential skills to prepare them for job opportunities by 2030.

It remains to be seen if more companies take Unilever’s lead and back a vague pledge to address inequality with concrete measures. But if they don’t, NGOs like Oxfam won’t hesitate to call them out on it.

Image credit: Ehimetalor Akhere Unuabona/Unsplash

This article on the role of activist CEOs was co-written by Elaine Weidman Grunewald.

In the past year we’ve seen inspirational examples of business leaders and activist CEOs who are guiding the world through some tough times. They have taken a stand, from their handling of the novel coronavirus pandemic to taking action against racial inequality amid the Black Lives Matter protests to the influential Business Roundtable raising its voice in defense of the U.S. Constitution in the wake of recent violent protests and attacks against the U.S. Capitol.

Leveraging your personal influencing platform is one of those “X-factors” that determine whether a business leader will have exponential impact in driving sustainability leadership, as we describe in our book, Sustainability Leadership: A Swedish Approach to Transforming Your Company, Your Industry and the World.

We wrote this book because of our own commitment to encourage business leaders to step up to the unprecedented and urgent challenges we face. Inaction or incremental responses are no longer enough. And because our own experience in leading Swedish companies and otherwise has shown us that Sweden, while not perfect, abounds with leading examples of companies working profitably and meaningfully to move the needle on sustainability.

In Sweden, consensus and cooperation rule

In Sweden, there is a special kind of synchronicity between business leaders and society: the idea that every sector is invested in creating a fair and equitable society that is socially inclusive and environmentally responsible. As Robert Strand, the Executive Director of the Center for Responsible Business and Lecturer at the Berkeley Haas School of Business shared with us, the idea of cooperative advantage is enshrined in the Scandinavian culture.

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Successful leaders, including this emerging group of activist CEOs, can use their platform to shine a spotlight on important sustainability issues, and when times are tough or challenges too great to solve alone, they form cross-sector alliances with unconventional partners to get tough things done. They know their facts, match their positions with meaningful and consistent action, and engage fairly, transparently and constructively to influence the conversation with the end goal of achieving sustainability goals. They dare to demand bold action, take risks and stand for something they believe in, despite the potential backlash.

Authenticity makes the platforms of activist CEOs credible

We believe more business leaders can, and should, use the platform of their company, industry, or a personal conviction to amplify their voice. Some 69 of the 100 richest entities in the world are companies - with that power comes responsibility. We’ve seen the emergence of more activist CEOs as today’s pioneering business leaders step up and speak out. If done credibly and authentically, leaders can add significant momentum to the search for solutions to the increasingly complex issues affecting business and society. This is becoming a fundamental aspect of leadership: Using your own personal influencing platform to make your organization’s purpose genuine and impactful.

An authentic influencing platform first and foremost is about being true to one’s own words, always connecting back to purpose and values. That is as true for building credibility within your own organization as it is for reaching out beyond the limits of your company or industry to achieve positive impact at scale. Often this involves finding the right partners and alliances and forming a united front on the issues that you are most willing to fight for. And far from this being an altruistic, charitable act, expanding your sustainability leadership platform should create even stronger competitive advantage.

Even without external stakeholder pressure, these activist CEOs are seizing the moral imperative to act and make their voices heard, including on controversial topics that could potentially invite customer backlash. Many leaders find that taking a stand is surprisingly positive for building a brand with purpose. Still others meet criticism when their stand is found to be inconsistent or inauthentic.

Bring others on board

Every leader’s voice matters in creating a new corporate narrative on sustainability. To make their platforms exponential, companies can work within and across sectors and leverage public-private partnerships. Working cross-sector, as opposed to working within a sector, can bring new diversity and shed new light on problems which can in turn deliver new opportunities for catalyzing change. Further, public-private partnerships are key to tackle bigger issues that no single party would have the incentive or capacity to solve on its own.

Inaction really isn’t a choice for a leader who wants to leave a meaningful legacy. There is no shortage of problems demanding urgent solutions and business as usual can no longer apply to e.g., climate change, which clearly requires urgent action.

The new U.S. presidential administration is an opening for business leadership

While 2020 was a tumultuous year, there are signs that new leadership is shifting in a more positive direction. In the new administration of U.S. President Joseph Biden, business leaders are expected to have new opportunities to lead on environmental action and other ESG (environmental, social and governance) issues. As one of his first acts in the Oval Office, Biden signed an executive order to have the United States rejoin the Paris climate agreement and has signaled his desire that the U.S. should once again be a leader with respect to climate change.

This show of commitment from the top levels of government is an opening for business leaders as well. The support of the private sector will be critical to solving global challenges like climate change, as no government can do it alone. Every leader has an opportunity now to find the cause and platform that is most relevant and matters most to them, and which allows for the most exponential impact. We urge leaders to find their burning platform and make it the beating heart of their business.

Elaine Weidman Grunewald, co-author of this article, is a global sustainability executive. She spent 20 years at Ericsson, where she was Chief Sustainability Officer. Grunewald is also a co-founder of the AI Sustainability Center, a world-leading center focused on the ethical and societal implications of AI and data-driven technologies. Connect with her on LinkedIn or Twitter.

Image credit of Black Lives Matter protest in Stockholm: Frankie Fouganthin/Wiki Commons

The announcement at this week’s World Economic Forum (WEF) that sixty-one global companies, which together generate revenue totaling $4.3 trillion and employ 7 million people, have agreed to implement WEF’s common environmental, social and governance (ESG) metrics for stakeholder capitalism is further proof that the aspiration for a single set of ESG standards for business reporting is moving fast. 

The confusion, lack of consistency and comparability in existing sustainability reporting has long been felt, with the oft-used phrase “alphabet soup” marking the debate amongst companies and investors alike.  

It is important not just to describe these developments, but to understand why the speed is accelerating and to harness this for what happens next.

Investor-led momentum

Since describing this as a "race to the top" here on TriplePundit five months ago, the WEF announcement has come hard on the heels of an interim report by the body working on European Union ESG standards, the production of a prototype climate-related disclosure standard by the “Big 5” voluntary sustainability framework and standard-setters, and consultation by the International Financial Reporting Standards (IFRS) Foundation on whether it should address sustainability reporting in its own standard-setting.

Probably the biggest push to this momentum arises from the rising voice of investors that ESG issues are increasingly relevant to them, but that they can barely use corporate sustainability reporting as it is undertaken today. 

When I was CEO at the International Integrated Reporting Council, we received an independent report from McKinsey, which showed 75 percent of institutional investors wanted a single sustainability standard, with 85 percent saying this is needed to be able to allocate capital more effectively. 

BlackRock Chair and CEO Larry Fink, whose annual letter to company CEOs has become the hallmark of this movement, says in his 2021 letter also published this week: “We strongly support moving to a single global standard, which will enable investors to make more informed decisions about how to achieve durable long-term returns.”

These developments have certainly influenced the IFRS Foundation to consider stepping in, although its paper is careful to reference different stakeholders and to justify its proposals on combating fragmentation, cost and complexity in existing sustainability reporting.  

The Foundation is currently analyzing more than 600 responses to its consultation, but it would be surprising if it does not proceed towards the formation of a new Sustainability Standards Board working alongside - and connected to - the International Accounting Standards Board for financial reporting.

The challenge may be in how long it takes to achieve this within its deeply entrenched governance processes.

Companies want to move faster

The second major factor lies in the frustration amongst companies themselves, suffering from reporting fatigue but also sharing the vision of many stakeholders that progress is too slow to enable societal and environmental challenges to be met in time.

The COVID-19 pandemic may have increased awareness of systemic risks and proven that ESG-ready companies have been more resilient at a time of crisis, but it has still seen a reversal in progress towards the Sustainable Development Goals (SDGs).

The sustainability context – the time and collective impact efforts that streamlined ESG standards will have in meeting Paris and SDG targets – remains all-too-often missing from the discussions.

Nevertheless, the WEF initiative encapsulates the push from companies to move faster, providing a core set of 21 core and 34 expanded ESG metrics, with speakers in the online Davos Agenda calling these “a standard” and predicting a further “huge increase” in take-up by the Forum’s next meeting in January 2022.

What has struck me from this week’s Davos debates and a new background paper published to coincide with the Davos Agenda announcement, “The Future of the Corporation,” is the strength of the ambition from business leaders to move beyond profit maximization to “stakeholder capitalism.” This also seems largely missing from the other actors in ESG standards and stands as a further challenge to them. 

At the very least, as long as companies including HSBC, Mahindra Group, Royal Dutch Shell, Sony and Unilever implement their pledge in the 2020 and 2021 reporting cycle, we will have an early opportunity to assess whether the new reports are perceived differently by investors and other stakeholders. 

European ESG standards – which definition of materiality?

The final report of the European Financial Reporting Advisory Group mandated to consider European ESG standards is due as soon as next month. It has already published proposed principles, operational guidelines and an architecture for new EU standards. 

At an outreach meeting with eleven European-wide business, investment and accountancy organizations held earlier this month, there was strong support for the bloc’s definition of “double materiality” - both financial and ESG relevance for the reporting - with a majority of respondents saying companies’ social and environmental impact is the most important component in designing the reporting standards.

This stands in stark contrast to the focus on how ESG factors have an impact on “enterprise value creation” as the ultimate objective, which is at the heart of all of the other initiatives. 

Many see this financial imperative as a driver rather than an inhibitor, but the exact definitions for materiality chosen by the European Union and by the IFRS Foundation will crucially determine the future path for ESG standards - and may well diverge. 

Existing ESG reporting as a building block

If this all seems as confusing as ever, it is heartening to see the “Big 5” recognize their metrics are building blocks and communicating a willingness to contribute to the establishment of a new set of ESG standards, rather than simply defend their own organizational space. 

“The EU as well as the IFRS are going through a process.  All of us are interested in helping them to meet their ambition of creating a new reporting regime,” GRI Chair Eric Hespinheide told an online event to launch the new prototype. “We may not be in the room but are in discussion, and can leverage the intellectual capital we’ve created over twenty years, to help them to move quickly.”

EFRAG Project Task Force Chair Patrick de Cambourg showed his readiness for Europe to build on existing metrics and to interact with the global players but said the EU must design its own standards first, “to make international cooperation a two-way process.”

WEF Chair Klaus Schwab said: “We are working together with standard-setting agencies and governments not to create a competition, but to create a generally accepted common framework of metrics. It needs a key number of companies to report, but to then to integrate this in standard-setting.” 

Watch these continuing fast-moving developments. But there really may be harmony in the harmonization. 

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The COVID-19 pandemic has roiled energy markets around the world, but it has not stopped the clean energy juggernaut. More than 130 global corporations bought a combined, record-setting total of 23.7 gigawatts in wind and solar last year. In a sign of things to come here in the U.S, Texas is becoming a hub of solar activity in addition to its status as a wind power leader.

Global corporations keep uniting around clean energy

Six years ago, top U.S. corporations organized a powerful public relations and lobbying effort in support of the 2015 Paris Agreement on climate change. They never let up, pushing for more investments in renewables all through the Trump administration. In addition, leading global oil and gas stakeholders, such as France-based Total among others, have been pivoting to renewables to meet the rising demand for clean energy.

According to a new report from BloombergNEF, last year’s corporate clean energy purchase of 23.7 gigawatts globally came within reach of doubling the amount of 13.6 gigawatts recorded in 2018. Despite the challenges of COVID-19, the total amount of such acquisitions increased by 18 percent in 2020, up from 20.1 gigawatts in 2019.

The 130 corporations tracked by BNEF represent a wide range of sectors, but all share one common trait.

“Underpinning the market is surging stakeholder interest in corporate sustainability and expanding access to clean energy globally,” BNEF explains.

How the U.S. almost dropped the clean energy ball

In an indication that former President Trump’s fossil-friendly policies may have had an impact in the U.S., corporate clean energy investments suffered their first year-on-year drop since 2016. The amount dropped to 11.9 gigawatts in 2020, down from 14.1 gigawatts in 2019.

Nevertheless, the U.S. remains the single largest clean energy market in the world. BNEF also attributes part of the falloff to the pandemic, indicating the clean energy buyers in the U.S. are primed to pick up where they left off.

Despite troubles at home, top U.S. corporations and brands continued to make an impact on growth within the global renewables market last year. Anheuser-Busch, which became part of Belgium-based AB InBev in 2008, is credited with helping to propel Spain’s booming clean energy market in 2020. Globally, the U.S. tech companies Amazon, Google, Facebook and Verizon claimed four of the top five spots for clean energy purchases last year.

Sunny skies (and steady winds) ahead for clean energy purchasers

Taiwan is another market that surged upwards last year despite the pandemic. BNEF attributes the sudden burst of activity in part to increased interest among the nation’s many manufacturers, which are feeling pressure from corporate customers that want to decarbonize their supply chains.

More likely, though, the bulk of the impetus was provided by a policy change. BNEF notes that Taiwan has imposed a new clean energy requirement on companies using 5 megawatts or more annually.

Similarly, BNEF expects a new energy policy in South Korea to spark a fresh burst of corporate activity in the clean power market there.

Here in the U.S., Republican members of Congress could slow or halt federal clean energy legislation. However, President Biden has already made climate action a top priority across all federal agencies. The purchasing power of the Department of Defense alone will help drive the market for decarbonization, including energy efficiency and clean fuels as well as wind and solar power.

All eyes on the Lone Star State

As one indication that the U.S. is positioned for another burst of clean energy activity in the months ahead, solar developers are beginning to test the waters in Texas.

Texas is already a wind power leader in the U.S., but it has been slow to exploit its rich solar resources. That could change with the advent of grid improvements that balance wind and solar inputs, in addition to growing demand from corporate energy purchasers.

In the latest development, earlier this week the EU-based solar company Lightsource BP announced the start of construction on a new 316 megawatt, $380 million solar project in Texas, consisting of two solar arrays to be located about 40 miles from Dallas.

Two firms, L3Harris and the Capital Solutions unit of Allianz Global Corporate & Specialty (AGCS), have already staked out their claims to clean energy generated from the new arrays.

Completion of the project is expected before the end of this year, and there is much more in store for the Lone Star State. Late last year the Chicago-based solar developer Invenergy announced that it will build the largest solar facility in the U.S., a 1.31 gigawatt hub that will support clean energy purchases from AT&T, McDonalds, Google, Home Depot and Honda along with several municipal buyers.

Texas’s role in the U.S. clean energy transition is especially significant, considering its dominant position in the oil and gas economy. Regardless of federal legislation, Texas is on track to help accelerate climate action in the U.S.

That’s not a moment too soon. According to the latest report from the International Energy Agency, global electricity demand only took a temporary nosedive during the 2020 COVID-19 lockdowns. The Biden administration’s shift on energy policy, including vehicle electrification, are all but certain to keep demand rising in the U.S. for many years to come.

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As the Joe Biden administration ramps up its climate plan and lays out strategies for lowering emissions in the electricity and transportation sectors, one sector in particular needs to be reconsidered: water. Water utilities will not only feel the full force of climate impacts, but are also a not-often-counted contributor to emissions. Technical solutions exist, but they are complicated by political considerations, lack of resources, competing interests and antiquated processes. All of these challenges are solvable with investments in both effort and money.

The current state of water utilities across the U.S.

Public water utilities serve the vast majority of Americans. Of the approximately 155,000 public water systems, about 8,700 of them serve close to 92 percent of the population, and those smaller systems typically face the worst resource constraints. About 12 percent of water utilities are private, both for- and non-profit. Unfortunately, water utilities’ infrastructure on the whole is in a sorry state: The American Society of Civil Engineers rates it as a “D”. Most of the foundation of today’s water utilities was installed in the early- to mid-20th century with a projected lifespan of 75 to 100 years – so, it’s been long past the time for replacements and upgrades.

One key problem that water utilities face is an antiquated business model, based on revenue from ratepayers. Most of these utilities’ costs are fixed, so they must look to customers to make up the shortfall, leading to a perverse incentive to not encourage conservation. But there’s an interesting problem that it is also a great opportunity: the energy costs of most water utilities can make up to 40 percent of a municipality’s energy bill. By tackling infrastructure upgrades and energy losses, many water utilities could reap significant benefits.

Water loss is a consistent problem for utilities, leading to revenue shortfalls and higher energy bills. That loss also puts communities at risk and cities lose revenue through inaccurate water meters. Addressing many of these utilities’ energy challenges will also address water loss. Leaks are a major source of both energy and water loss and being able to pinpoint their repairs and replacements could help resource-strapped utilities prioritize upgrades.

The array of types of water systems and districts across the country is dizzying. Municipal utility districts (MUDs) are political subdivisions that provide water and wastewater to communities, some of which are as small as a homeowners association. They operate as independent political identities and are not necessarily associated with a city or town. Some are so small that they buy treated water as they cannot treat the water themselves.

And, these MUDs are everywhere. Texas alone has 1,200 special districts, many of which are located outside city limits and so can therefore not access municipal utility services. The Woodlands, a planned community outside Houston, has 11 MUDs that share one water agency, which taps its water from the San Jacinto River Authority. Many of these MUDs, smaller ones in particular, tend to outsource to companies that still undergo manual metering. It’s a recipe for doing things as they’ve always been done. With a lot to manage on a small budget with few staff, undertaking any necessary upgrades, including the adoption of smart technologies, can overwhelm them.

An opening for companies

Some energy companies already see the potential in helping utilities with finding energy-water nexus solutions. The technologies exist and continue to advance. Some are straightforward solutions with knock-on effects: For example, installing smart meters and increasing data resolution allows utilities to share information with customers and market behavior change, especially with data intervals shortened to enable real-time or near-real time information that can influence customers’ use.

Ameresco, an energy efficiency and renewable energy company, has begun to work with small cities and towns that don’t have in-person staff. As a vendor-neutral application company, the company uses various technologies to determine cost viability. Because they work across several MUDs, they can help coordinate scaling up to justify smart meter costs.

Yet Vince Dreiling, Ameresco’s director of business development, noted that water utilities do not face technology problems, but rather governance problems. “Even some large cities fight internally over who gets to control the network,” he said. And beyond that: “Each state has its own nuances. For example, Arizona laws are set up to enable utility districts to leverage future cash flows, as opposed to having to pass a bond to get these projects off the ground as they do in Texas.”

What water utilities need so they can continue to serve their customers

Water utilities often can’t make the investments needed to bring on the latest technology or even to do the most effective infrastructure upgrades. But new investments are necessary. Any new infrastructure should be built with resilience in mind, and that will be different from place to place. Infrastructure simply cannot be built the way we’ve built it before. Climate change impacts, depending on location, include the effects of hurricanes (wind and flooding), droughts, heatwaves and fires. Water systems, in particular, need to consider impacts of droughts and floods, and in some areas, the large swings from one to the other will affect the performance of their pipes and treatment facilities.

Because many of these utility districts do not have the dollars or staff to undertake these necessary improvements, the private sector and the federal government both have a role to play. Technical support and funding are necessary at the national level, and federal dollars can spur private investment. Water systems - natural and manmade - will clearly bear the brunt of climate change. Ensuring water utilities are resilient to these future risks must be part of any climate plan.

Image credit: Terry Vlisidis/Unsplash