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In all the developments and challenges presented at the UN Climate Summit last week, the most important debates were not about how we can improve, but how we can systemize the change.

It is redundant to think where we sit in the league table, when what needs to change are the rules of the game for everyone.

It’s why the use of the ratchet mechanism from the Paris agreement and the imperative to address the context approach in all our sustainability actions are both right, but must see the actions under the Climate Change Treaty themselves put in the context of wider societal, economic and cultural norms.

Most obvious of all has been the progress made towards the Task Force for Climate-related Financial Disclosure (TCFD) recommendations, to link climate risk to the world’s financial systems and decision-making.

But although the number of companies explicitly committing to the recommendations is now approaching 1,000, the Task Force’s Status Report earlier this year made clear the priority is for acceleration. 

For me, this should not simply be in addressing the lag in how far each of the disclosures is being effectively made amongst those companies already reporting, but in the forces that can trigger interest from the vast majority of companies who are not.

That’s the significance in the progress report published in New York last week, on how the TCFD recommendations can be mainstreamed in the continuing process towards alignment of the major financial and non-financial corporate reporting frameworks and standard-setters.

Coming together to form the Corporate Reporting Dialogue (CRD), these include CDP, the Climate Disclosure Standards Board, the Global Reporting Initiative, the International Integrated Reporting Council and the Sustainability Accounting Standards Board.

If each of the sustainability frameworks represented in the CRD aligns to the recommendations in full, overnight it would increase TCFD reporting worldwide by ten-fold.

This is being driven forward in the CRD Better Alignment Project, which I was proud to help establish in my years at the International Integrated Reporting Council, and where I am gratified to see its concrete results being brought in to the public domain.

Last week’s first year progress report describes how the project started with technical mapping of the principles, disclosures and metrics in the TCFD recommendations, against the requirements of what are indeed the major comprehensive frameworks being used by companies to report today.

An important finding is that each one of the principles recommended are themselves comprehensively covered by the existing frameworks, making it much easier for companies to advance TCFD reporting, without having to fundamentally change the way they organize their reporting practices.

The project has involved continuous stakeholder involvement, to test market-readiness for its conclusions. Most encouraging of all, consultation results published last June show clear demand from business itself for progress towards the intended aim of alignment. Current frameworks and standards were viewed by many as a “temporary fix” to problems that require a more comprehensive solution, the project reported.

For our partners who believe in the ultimate goal of integrated reporting, it provides reason for optimism that we can avoid climate risk becoming only the latest of a long series of disclosure demands and initiatives in well-meaning but ultimately limited, fragmented and disconnected approaches.

The mapping exercise on metrics undertaken by technical specialists from each of the frameworks in the first year of the project, also yielded high levels of cooperation and demonstrated already strong alignment.

It did reveal that for 15 of the TCFD’s 50 illustrative example metrics, limited differences persist amongst the frameworks involved. This particularly concerns sector-specific indicators for financial services and real estate.

There has always been a tension in developing business reporting between achieving comparability across different types of companies, and developing sector-specific information, more relevant and material to the business.

But for the wider business community, as well as for the project, the bigger question remains whether the progress towards alignment being made is fast enough to constitute meaningful progress towards the system change required?

Last week’s report commits the Project to a second year which would see the drawing up of a detailed taxonomy; the creation of an interactive, online tool aimed at guiding users through how the different frameworks interact; and to the setting up of a collaborative technical forum between the participants.

However, it draws back from committing to alignment work beyond climate issues and comments that “the Better Alignment Project may not be able to resolve this issue in its present form.”

At the IIRC Council in Frankfurt in April, we initiated a ‘live’ debate as to whether ‘convergence’ amongst existing reporting frameworks and standard-setters could proceed quickly enough or whether new institutional approaches are required, given the scale and the speed of action required?

It is equally gratifying to me that Central Banks, Stock Exchanges and Securities Commissions each have current initiatives to pursue sustainability, using a combination of market and regulatory mechanisms.

Work to update the Management Commentary Practice Statement in the International Accounting Standards Board (IASB), also has the potential to be an important step towards integration.

Perhaps most ambitious of all is the taxonomy on sustainability being developed by the European Commission, which some have suggested may become a de facto global standard for sustainable business reporting.

Within the Corporate Reporting Dialogue, my old friend and colleague, International Accounting Standards Board Chair Hans Hoogervorst, has suggested that convergence will not come quickly enough, and it is indeed time for consolidation.

I hope and believe that the partners in the Corporate Reporting Dialogue may be able to genuinely mainstream climate reporting through an evolutionary approach.

But after a week when the impact on the world’s glaciers was oft-quoted, they have to convince business, regulators and stakeholders, that the progress is not itself so glacial, as to fail to serve its over-riding purpose.

Last week, Honda Motor Co. announced a major renewable power deal for its manufacturing plants in Ohio, Indiana and Alabama. The automaker said it would acquire the power from wind and solar farms in Oklahoma and Texas, and aim to increase its renewable energy consumption from 21 percent of its current portfolio to 80 percent by the end of 2021, making this the largest renewable energy purchase in the auto industry.

The purchase agreement will be arranged with a “collar structure,” a financial strategy that guarantees a floor price for the buyer and ceiling price for the seller, thus significantly reducing risk. This deal is important for three reasons: transportation emissions, water impacts and corporate leadership.

Transportation is largest contributor to greenhouse gas emissions in the U.S.

In 2017, transportation overtook power generation as the largest contributor to climate-warming greenhouse gas emissions in the U.S. (29 percent and 28 percent, respectively). These past few years have seen a rash of policy and technology solutions as a result. California passed the country’s strictest vehicle emissions standards, with several states following suit. While those regulations are currently under threat of rollback from Washington, it seems difficult to imagine that the long-term trajectory will continue toward relaxing regulations that limit pollution and emissions.

In addition to regulations such as these, the hybrid and electric vehicle (EV) segment of the auto industry has surged in recent years. With the price of EVs dropping, the thirst for these new cars continues to grow. While there has been some infrastructure installed in key regions, to really reach a tipping point, significant investments are still needed nationwide.

Large renewable energy projects can be good for water

Wind and solar photovoltaic (PV) energy sources use negligible amounts of water. Coal- and gas-fired power plants are incredibly thirsty resources. In a changing climate, with many parts of the country seeing more water stress, increasing the use of these low-water energy sources will be critical.

The Honda agreement is a little complicated, so let’s break it down. Honda will purchase renewable energy to offset electricity it will buy from the grid in the three states where its manufacturing plants are located. All three states generate or consume the bulk of their electricity from coal and natural gas. Alabama and Ohio also have nuclear power, which generates no emissions but consumes vast amounts of water. While neither of these states are in the crosshairs of water scarcity like some others, they have suffered an increasing number of droughts over the past decade.

In turn, the wind and solar power outlined in the agreement will be purchased from Oklahoma and Texas, respectively. Both states are squarely in the water scarcity bucket. Details about the solar power purchases will be revealed next year, and depending on the type of facility, it could be a high- (concentrating solar) or low-water (PV) facility. The point is, because of the impacts of climate change on water, and the variable nature of those impacts depending on location within the country, every energy investment decision should consider water in its calculus. It is no longer possible to think about energy in isolation from water.

Corporate leadership in climate change action matters

There is no silver bullet to solving climate change. It will take smart policy, technological innovation, behavioral changes and corporate leadership. When major companies like Honda make significant investments in clean energy, whether from an economic or environmental standpoint, it not only sends a clear message, but it sets the bar for other companies who compete in the same space to meet it. Consumers are more cognizant of the environmental and social actions of the businesses where they spend money.

Further, with this decision, Honda is making a statement in states like Alabama, which sits in a region that will bear the brunt of climate change impacts and is arguably not adequately preparing for that scenario. As a nation, we are a driving culture. With a changing climate, it is good business for automakers to invest in clean power and clean technology, as their leadership is one key to solving the challenges brought on by climate change.

Image credit: Honda

Above: chess pieces derived from bamboo-based plastics, made by Michigan-based Pivot Materials.

Tell Kylee Guenther, who founded the sustainable plastics startup Pivot Materials, that she can’t do something, and you’ll only harden her resolve—which is not a bad trait for an entrepreneur.

Told when she was young that it didn’t matter if she was good at math because she was “just a girl,” she channeled her fury into working harder. Years later, testing her idea for Pivot at a pitch competition, she was told once again she was wasting her time, and that her product was impossible to make. She held up the prototype in her hands and told the skeptics, “I know we can do this.”

Once told she was "just a girl," she's not only good at math, but also with developing bamboo-based plastics

Today this millennial entrepreneur now owns her own Detroit-based company, which manufactures advanced materials from bamboo and other natural materials that can be used in place of fossil fuel-based plastics. Pivot says it counts four of the Forbes 100 largest companies among their customers. “For a scrappy startup like ours, that’s a huge big deal,” she told TriplePundit.

Guenther is an admittedly “trash-obsessed” person. “I’m kind of just fascinated and saddened by trash. I want to understand why we have it and where it goes,” she says. That fascination started when she was little.

“I was always interested in environmental issues even before I knew what an environmental issue was,” Guenther said. “I wanted to be vegetarian as little girl and I was always interested in recycling.” With no recycling facilities in the rural town outside of Detroit where she grew up, she’d have her parents drive her to one after she’d amassed a collection of cans.

Plastics was also a topic around the dinner table. Guenther is the second generation in her family to work in the plastics industry, as her father was among the early designers of plastic packaging materials like one-gallon milk jugs. “So, I grew up basically on the shop floor and I learned about plastics from the bottom up,” she said. “And I saw all the amazing things daddy could do with plastic but at same time I was mortified by all the mess it created. I wanted to get into the industry and do something more in touch with my feelings about sustainability.” 

Turning to nature for durable plastics

Joining up with Pivot Co-Founder and Engineering Manager Raju Patil, who had done research focused on bamboo, Guenther says they knew they had found the material to launch their business. “Bamboo is engineered by nature to grow strong and straight and has amazing mechanical properties,” she said. The world’s fastest-growing plant and a champion carbon sequester, bamboo met Pivot’s requirements as a highly sustainable material. Then Pivot developed its own proprietary process for turning it into a biomaterial without using the harsh chemicals often used by other manufacturers that use bamboo to produce fabrics and other materials.

“I’m a firm believer that everything we need on earth is already here without creating a lot of synthetics and that’s the goal with Pivot,” Guenther added. “We want to pivot the plastics industry and reduce as much as possible the use of plastics and create something that is more sustainable and at the same time keep up with our modern lifestyles.”

Plastics are at a Pivot-able moment

Pivot may be on to something. Forbes has said the materials industry, pervasive but stagnant, is ripe for disruption and Guenther expects it will be one of the hottest fields for start-ups over the next decade. She sees the demand coming primarily from two forces: first, her own generation’s overwhelming support for brands that support causes they care about. Some 73 percent of millennials have been the most willing of any age group to pay for sustainable offerings, according to a 2015 Nielsen poll.

And second, she commends recent government regulation around stemming the use of plastics, especially from Europe, which has declared war on plastic waste as well as Canada, which aims to ban single-use plastic by 2021. “It’s so powerful to see this happen,” she said.

The combination of government support and the growing commitment of companies around the world to find plastics alternatives has customers turning to firms like Pivot. Guenther says the world’s first bamboo fiber reinforced shipping pallet was created with her company’s materials. She was staggered to discover that almost half the trees in the U.S. that are cut down annually are used to make shipping pallets, which in turn are generally used only one to five times before they are discarded. “Ours can be used many, many times,” she noted.

Beyond bamboo

And Pivot expects to make an announcement soon about Pivot’s launch of the world’s first car part made out of a bamboo fiber reinforced composite, which will go into production next year. The company is looking into other natural materials for research and development, too.

For example, rice hulls, a waste product that accumulates after this crop is harvested in countries like India, is often burned – in turn contributing to regional air pollution. Striving to be part of the solution to this waste problem, Pivot has begun buying rice hulls, boosting rural farmers’ income. Those rice hulls are then processed into composite materials that can then “give trash a second life.” Additional ideas percolating around Pivot include the use of coffee processing waste as a potentially new base material.

Guenther is confident that “in five years we will be a force to be reckoned with in the plastics industry. I don’t think ever again in life I will have the chance to do something that has the potential to positively impact every person who lives on the planet.”

Don’t forget: Later this month, we’ll be hosting 3BL Forum: Brands Taking Stands – What's Next, October 29-30, at MGM National Harbor, just outside Washington, D.C. Kylee Guenther will join several exceptional women onstage during the afternoon of the 29th to share her journey toward becoming the CEO of an innovative startup.

We're pleased to offer 3p readers a 25 percent discount on attending the Forum. Please register by going to the 3BL Forum website and use this discount code when prompted: NEWS2019BRANDS.

Image credits: Pivot Materials

It’s tempting for a corporate sustainability leader to feel discouraged by the key findings from a recent study Accenture released in a joint effort with the UN Global Compact (UNCG).

This assessment comes a few years after a 2016 Accenture-UNCG study concluded that 70 percent of CEOs had believed the UN Sustainable Development Goals (SDGs, or Global Goals) would provide a clear framework to structure sustainability efforts.

But three years later, it turns out only 48 percent of CEOs are implementing sustainability into their operations. That has led the CEOs in this year’s survey to call for renewed action on sustainability.

But seeing the glass half empty would only be half the story reflected in the report, the world’s most comprehensive research to date on the global business community's contribution to the SDGs. The survey captures the views of more than 1,000 top executives across 21 industries and 99 countries. These leaders are not content with the status quo and “are anxious for a course correction,” according to the report.

Gaps between ambition and reality

In fact, 71 percent of CEOs surveyed in 2019 believe that—with increased commitment and action—business can play a critical role in contributing to the SDGs. While encouraging, that’s in contrast to the 90 percent in 2016 who said they were personally committed to ensuring that their companies lead on the sustainable development agenda.

“There is a gap between ambition and reality,” Jessica Long, Accenture’s managing director of strategy and sustainability, told TriplePundit in a recent interview.  “Compared to three years ago, we found a lower percentage of CEOs than we’d expect taking action on their commitments.”

For example, in 2016, 49 percent of CEOs said business would be the most important actor in the delivery of the SDGs; in 2019, only 21 percent feel business is currently playing a critical role in contributing to this initiative.

Geopolitical uncertainty clouds outlook

In parsing out this shift in CEO commitment, Accenture found that several factors were clouding the 2030 outlook. Geopolitically, fragmentation and volatility have led to political and economic uncertainty. Socioeconomically, structural trends are driving greater environmental stress and social inequality such as a growing population and rising middle class. Technologically, the world is entering the Fourth Industrial Revolution (4IR), and the pace and scale of digital, biological and physical innovation could accelerate the world’s problems or provide technology breakthroughs to help achieve the SDGs.

“We found that one of the biggest reasons for the gap between ambition and reality is political uncertainty causing companies to pause what they are doing with longer term investments, which typically include sustainability, or reducing these efforts,” Long told 3p. “Beyond that, many CEOs are realizing that while there are many things a company can do within its own scope, many of these challenges require collaboration within their own sectors, across other sectors and together with governments.”

Long noted the number of pre-competitive or non-competitive consortiums that have arisen in recent years to combat sustainability problems that span sectors and industries, like the Alliance to End Plastic Waste, showing that collaboration is gaining in acceptance.

Business case gaining momentum

Long says in the end, she finds the glass more than half full in this year’s study. “I’d be more worried if business leaders were saying that they did not see the business case for sustainability or that investors were not behind sustainability—but that is clearly not the case. Today CEOs are saying, ‘We get why this is important. It’s good for business, are customers are demanding it, our consumers are demanding it, our employees are demanding it. They are feeling the pull and that to me is a watershed moment. It’s not a rogue group of sustainability professionals telling them what to do.”

In fact, only 26 percent of CEOs in 2019 cited “no clear link to business value” as a barrier to sustainability, compared to 31 percent in 2016 and 37 percent in the 2013 CEO study. In addition, 40 percent of CEOs surveyed in 2019 say sustainability is driving revenue growth and 35 percent are realizing value through cost reduction today.

Some 76 percent of CEOs say citizen trust will be critical to business competitiveness in their industry in the next five years, and it’s good they’re paying attention. In the end, Long adds, “It’s the CEO that sets the tone and only the CEO can make some of these longer-term systemic, culture-bending changes within an organization. If you want your company to truly embrace the circular economy, for instance, it’s a massive mindset change.”

Getting back on track

While this most recent Accenture study sends a worrying signal that the private sector contribution to the Global Goals is seriously off track, CEOs don’t see it as completely derailed. They’re asking their peers to:

• Raise ambition and impact: Leaders must drive change in their own organizations, and through the disruption of market systems.
• Change collaboration: Key players must connect in new ways because meaningful transformation is not a solo sport.
• Redefine responsible leadership: Leaders must embrace their role as change agents to champion the sustainability agenda.

“Being at the forefront of solving some of the most intractable problems the world is facing is the morally right choice. And we know what we do today – individually and collectively – will tell the tale about humanity, well into the future,” said study participant Steve Cahillane, Chairman and CEO of Kellogg Company.

Image credit: Evangeline Shaw/Unsplash

(Image: Apparel industry insiders discuss sustainability and sustainability communication at a side event during Climate Week NYC.) 

Life in 1950s America is perhaps best characterized by the popular idiom “keeping up with the Joneses.” Social status was, in large part, determined by accumulation of material goods, as families strived to purchase that new washer and dryer or television set before the neighbors next door. 

In the more than six decades since, our march toward a consumer-driven economy has ballooned into a make, take and dispose system dominated by single-use goods that now fill landfills and spill out into our oceans. But after decades of “buy, buy, buy,” research indicates that Americans may be ready for a change. 

Case in point: Brand and social innovation consultancy BBMG recently surveyed more than 2,000 Americans to find out what matters most to their quality of life. More than 9 in 10 (95 percent) said that “having meaningful relationships with others” is what’s most important, while just half said the same about “having a lot of money” (54 percent) or “being able to afford luxury goods” (44 percent). 

People were also more inclined to rank “achieving overall happiness despite life’s challenges” and “living a healthy, balanced life” over traditional status symbols like “owning a home” or “owning a car.” 

“If that’s what consumers want, how do we use the power and influence of brands to solve for it?” Raphael Bemporad, founder of BBMG, said at a side event co-hosted with 3BL Media during Climate Week. “As a consequence of our consumption economy, we now have a planet in peril, we face rising income inequality, and in many ways we’re at a tipping point of what’s going to happen to our species.” 

At BBMG’s headquarters in Brooklyn, Bemporad spoke alongside industry leaders from the apparel industry, who discussed how this sector is addressing market shifts toward “meaning over materialism.” It’s fitting, really, as the fashion industry is arguably both at the epicenter of our consumption culture and among those most attuned to changing consumer appetites. 

“This is one of those industries that is super responsive to culture,” said Matt Jacobs, sustainability officer for Darn Tough, a sock company based in Vermont. “It’s probably more able to change than any other industry I see out there because it is so responsive and dictated by what the consumer demands.” 

Consumers are looking for sustainability and social impact

Although consumers continue to seek out standard product characteristics like value and convenience, sustainability and social impact are emerging as key differentiators, according to BBMG’s research. 

In other words: When deciding between similar products, more consumers will choose the item that leaves less impact on people and the planet. In particular, respondents said they’re more likely to buy a product that is traced to origin or locally made, bears an environmental label, or supports a cause they believe in. 

“Sustainability is increasing in importance and going toward an upward trend,” said Jeannette Ferran Astorga, vice president of corporate responsibility for Ascena Retail Group, the parent company behind brands like Ann Taylor, Loft and Lane Bryant. “Brands that are starting to become known as change-makers are the ones that are going to resonate.”

(Image: From left to right: BBMG founder Raphael Bemporad, Jean-Emmanuel Shein of Uniqlo, Matt Jacobs of Darn Tough, Jeannette Ferran Astorga of Ascena Retail Group, and Natasha Franck of Eon Group discuss sustainability in the fashion sector at BBMG headquarters in Brooklyn, New York.) 

Sustainability communication is king: Are brands ready?  

In short: As people become more aware of the threats overconsumption poses to communities and the environment, from human rights abuses in corporate supply chains to pollution, ecosystem degradation and climate change, they’re looking to make some changes to what they buy—and who they buy from.

The companies that will win out are not only the ones doing the right thing, but those that can communicate what they’re doing effectively. But making heads or tails of effective sustainability communication is a challenge that still vexes many brands.

Darn Tough, for example, has prided itself on being a good corporate citizen in its community of Northfield, Vermont, since it launched as Cabot Hosiery in 1978. The company, which transitioned from a private-label purveyor for large fashion retailers to its own brand in 2004, still makes all of its socks in Vermont and carefully tracks its environmental impact to avoid polluting the local community. 

For Darn Tough’s founders, it’s all a part of doing business, but that presents a disconnect when it comes to communication. 

“We’re a brand that is, frankly, run by folks in the older generation who think it looks self effacing to talk about this stuff,” Jacobs said. “They think it looks like bragging …. [and they] don’t look favorably upon those types of communications. But younger generations think that if you're not communicating about [your impact], you must be hiding something. That's a real conundrum for us to deal with as a brand.” 

Jean-Emmanuel Shein, global director of sustainability for Uniqlo, a global fashion brand based in Japan, described a similar disconnect, along cultural rather than generational lines. The company’s push toward more sustainable denim is one it’s sharing loudly and proudly, but this type of communication is rare for Uniqlo, Shein said. 

“We’re very humble. We don’t shout. And we rarely commit to things unless we’re ready to go 100 percent, because falling short would be seen as dishonorable and like we’re cheating our customers,” he explained in New York last week. 

But for large companies in particular, overcoming philosophical barriers around sustainability communication is only half the battle. When it comes to tracking the impact of each product and sharing it with customers, many global brands simply don’t have the data, said Natasha Franck, founder and CEO of Eon Group, which leverages technology to develop circular economy solutions for fashion brands. 

"One of the brands we work with recently shared with us that they do a great job of communicating sustainability in a sustainability report, but it's actually very hard to have data about a product and its sustainability at point of purchase,” Franck explained. “For the brands doing this at scale, that's a lot of data to manage. We see massive new opportunities to connect that product from a sustainability perspective with data, so information about each item is available at point of purchase, not just in a [corporate responsibility] report.” 

Mastering the art of sustainability communication 

Increasingly, eco-labels like the Better Cotton Initiative seal, the BlueSign standard and Fair Trade certification give apparel brands more options for tracking—and communicating—their commitment to workers and the environment. And industry-wide collaborations such as the Sustainable Apparel Coalition (SAC) make space for brands to learn from one another. 

Brands continue to jump on board, as the SAC now counts nearly 250 apparel, footwear and textile companies among its membership. And they'll likely continue in this direction, as consumers continue to demand it. Because, in the end, what brands do—and how they talk about it—will be driven by consumers, the industry experts predicted. 

"People want the nutrition label on their jacket or their shirt, and brands respond to that," Jacobs said. "This is an industry that responds to you. Every line of clothing that you see is dictated by you. So, my ask is that consumers push us. Push these brands to do more, to respond more—and they'll respond." 

Image credits: Vitaliy Piltser

The plight of climate refugees is becoming more dire across the globe. This crisis is not going away any time soon, no matter what the U.S. and other nations do to harden their borders. A more sustainable, holistic solution is needed, and the nonprofit organization Tent Partnership for Refugees has set a course that puts corporate leadership on the front lines for action.

The Tent Partnership for Refugees and next-level corporate responsibility

Tent launched in 2016, in response to a “Call for Action” issued by then-President Barack Obama. President Obama urged corporate leaders to provide help by applying their own knowledge base and corporate resources to the problem, rather than simply providing cash grants to third parties.

That hands-on, collaborative approach to corporate charity has been gathering steam in recent years, and Tent rapidly attracted interest. More than 100 companies currently participate in Tent, including Accenture, IBM, KPMG, Sodexo and Starbucks. These companies use Tent as a platform for sharing best practices, and for enlisting additional support.

The crisis grows for climate refugees in Latin America

Tent’s latest initiative focuses on the refugee crisis in Latin America. In particular, the organization is focusing on aid for countries that are hosting refugees from Venezuela, where severe drought has contributed to both political and economic upheaval, leading millions to flee the country.

To get a handle on the scope of the problem, Tent engaged in a research project with the firm GBAO Strategies. The project included interviews with 600 refugees from Venezuela living in Colombia and Peru.

The interviews provide ample support for the view that the climate refugee crisis is a long-term trend that will continue to grow. As described by Tent, the research shows that “Venezuelans are likely to continue to flee in substantial numbers,” and those who have already fled are unlikely to return for many years.

An untapped talent pool

Colombia, Peru and other countries in the region have been accepting refugees from Venezuela (as shown in the photo of Colombian police escorting Venezuelan refugees across the nation’s northeastern border), but they are reaching their capacity to absorb the flood of new job seekers.

Though the host countries are doing a relatively good job of meeting the basic needs of refugees, the Tent survey revealed that most refugees are unable to integrate into the local economy.

Work is widely available, but salaries are “meager,” and access to health care, banking and other key services is also limited.

The survey did find one key to a potential solution. It found that just one in six Venezuelans were in the same field as they were in Venezuela, indicating that refugee host countries could be sitting on a pool of new talent that could help stimulate economic growth, if productively applied.

Creating jobs and entrepreneurial opportunities for climate refugees

Tent is zeroing in on the skill sets angle, in partnership with the Luis Alberto Moreno of the Inter-American Development Bank  and Hamdi Ulukaya, the owner, founder, chairman and CEO of the popular U.S.-based yogurt brand Chobani.

The idea is to encourage leading companies to create thousands of new jobs in host countries and provide more support for local businesses.

The effort launched on September 23 with commitments from more than 20 companies including Airbnb, Telefonica, Teleperformance and Sodexo.

The initial commitment totals more than 4,500 new jobs for refugees and support for more 2,000 refugee-owned businesses. The participating companies have also pledged to improve access to services for more than 110,000 refugees.

In a press release announcing the new initiative, Ulukaya emphasized the opportunity for economic growth in the host country.

“Refugee passion and perseverance is just waiting to be unlocked,” he said. “When given the chance, refugees will make your companies stronger, smarter and faster. But it’s up to us to open the door and provide the opportunity for human dignity.”

How 20 years of diplomacy set the stage

The Tent initiative provides businesses with a solid, bottom line opportunity to grow their operations while providing solutions to a global crisis.

There is much more to the story, though. One additional thread concerns Colombia itself. During the Bloomberg Global Business Forum in New York City last week, participants in a public panel discussed how Colombia has shed its violent past, and has created a more welcoming, secure environment for leading businesses.

The panelists — including former U.S. President Bill Clinton and current Colombia President Iván Duque Márquez — described a decades-long diplomatic effort, spearheaded by the U.S., that enabled Colombia to reduce drug crime and stabilize its political situation.

Without that groundwork, the new Tent initiative would have little to offer companies that are willing to invest in Colombia.

The refugee crisis and a green new deal for Latin America?

Another important thread concerns Colombia’s decision to adopt the mantle of a regional environmental trailblazer. During the discussion, President Duque cited a long list of accomplishments, including a clampdown on illegal deforestation and a multi-nation pact to protect the Amazon.

That strategy has also contributed to the country’s ability to attract investors, as affirmed by panelist Bruce Flatt, CEO of Brookfield Asset Management. Flatt emphasized that the company is highly selective about the countries in which it does business.

Among Brookfield’s criteria is respect for international standards, and Colombia’s position as an environmental leader has placed it in a good position to take advantage of the emerging global consensus on climate action.

Federica Mogherini, who is Vice President of the European Commission, was also on the panel. She underscored the importance of job creation for current citizens as well as refugees.

Mogherini pointed out that Colombia’s progress on making peace with the rebel group FARC has helped to attract public sector investment as well as private sector interest.

“Job creation is part of the success story of the peace implementation with FARC,” she explained. “Disarmament needs to be supported and sustained.”

Climate refugees and the global battle for democracy

As President Clinton emphasized, Colombia is emerging as a test case for countries to host climate refugees as part of a sustainable development plan.

In that regard, Colombia is also a test for the ability of democratic governments to create new green jobs.

Clinton pointed out that Colombia is “committed to a green energy future that doesn’t destroy the world on the rocks of climate change.”

“There is no better test of democracy today than Colombia,” he said. “Colombia is embracing more democracy, not less. They are embracing their neighbors, not turning them away. They are bucking the xenophobic trend around the world.”

Don’t forget: Later this month, we’ll be hosting 3BL Forum: Brands Taking Stands – What's Next, October 29-30, at MGM National Harbor, just outside Washington, D.C. Included in our lineup of 90-plus speakers will be a conversation on what disasters can tell us about the climate crisis and resilience planning.

We're pleased to offer 3p readers a 25 percent discount on attending the Forum. Please register by going to the 3BL Forum website and use this discount code when prompted: NEWS2019BRANDS.

Image credit: Policia Nacional de Colombia/Wiki Commons

A growing body of behavioral research is illustrating how the old adage, “pride goeth before a fall,” applies to top corporate leadership. Overconfidence is the key factor that drives CEOs — predominantly male CEOs — to underestimate risks and make rash decisions with negative bottom line consequences. A new study published in the Harvard Business Review adds an interesting gender-based twist: corporate boards that include women are more likely to exercise a beneficial, moderating influence on male CEOs.

Overconfidence and the gender factor

To be clear, the new research does not make the case that women act as moderating influences because they are less confident. Quite the opposite.

“One benefit of having female directors on the board is a greater diversity of viewpoints, which is purported to improve the quality of board deliberations, especially when complex issues are involved, because different perspectives can increase the amount of information available,” the authors explain.

They also emphasize previous research that supports other elements of strength and confidence that women directors tend to possess. That includes a tendency to be less conformist and more independent in thinking.

Interestingly, the authors point out that independent thinking is linked to the absence of a supportive “old-boy” network, in which insiders are reluctant to challenge each other.

The result is that female directors tend to be more confident about challenging a male CEO’s decisions.

Risk, gender and climate change

The new study also has some implications for the ability of corporations to switch gears and adopt new strategies that address the risks of climate change.

The authors chose to study CEO behavior from 1998 to 2013, a period when women in top positions were a rarity. In the study sample, women accounted for only 2.9 percent of CEOs and 10.4 percent of board members overall.

As an indicator of overconfidence, the authors examined how CEOs in the study sample exercised stock options.

Overconfidence is evident among CEOs who continue to hold their options when the market price is already high. They anticipate even higher gains in the future, a gamble that does not always turn out well.

After controlling for other factors, the survey showed that male CEOs were less likely to continue holding options when women were present on their board.

“…we did find that having at least one female director on the board was associated with less aggressive investment policies, better acquisition decisions, and ultimately improved firm performance in these industries,” the authors conclude.

They also found that female representation on boards correlated with the ability of companies to manage risk during the peak years of the financial crisis, from 2007 to 2009. The findings suggest that these companies were exposed to less risk in the run-up to the market collapse.

As for climate change and climate action, the authors also note that the degree of overconfidence varied significantly by sector. For example, the female factor was not evident in the utility and telecom sectors, possibly because those sectors tend to attract CEOs with a more cautious character.

How overconfidence contributed to the decline of coal

Significantly, the authors identified coal as one of the sectors in which male overconfidence was most evident.

The coal industry has been marked by a lack of gender diversity throughout its history. Coincidentally or not, coal CEOs have been caught flat-footed as the global economy pivots to cleaner energy.

The gender problem for coal goes beyond corporate risk taking. By failing to recruit a diversified workforce and failing to promote women from within, coal is also falling behind in the global talent race.

Here in the U.S., regardless of public policy the up-and-coming workforce is more diverse and more likely to take climate risks seriously.

That leaves coal companies with a rapidly shrinking pool of talent to draw from, while facing increased competition for talent in the burgeoning renewable energy field.

Tech companies also have some explaining to do

The authors also found that CEOs within the information technology space were also susceptible to overconfidence.

That tendency still appears to be resonating today in the context of climate action. Industry observers are beginning to notice that, as a group, tech leaders are not responding to climate change in proportion to the power they wield over the global economy.

Last summer, the Financial Times published an op-ed that summarized the situation:

“…few of Silicon Valley’s amazing achievements have had a bearing on climate change. The world’s most innovative place lacks answers to the world’s existential problem. The contrast is striking, given that many tech employees worry about the issue.”

Fast Company also looked at the issue last summer and took a more nuanced approach, arguing that tech companies have taken some important steps to reduce their carbon footprints, but as a group they have barely scraped the surface of their power to change behavior on a massive scale.

Coincidentally or not, the recent intensification of climate action — and employee activism — is concurrent with diversification of the workforce, including c-suites and boardrooms.

It may be too late to save coal, but the tech sector still has an opportunity to scale up climate action and strategize for a sustainable future - with the help of more women in top leadership.

Don’t forget: Later this month, we’ll be hosting 3BL Forum: Brands Taking Stands – What's Next, October 29-30, at MGM National Harbor, just outside Washington, D.C. Included in our lineup of 90-plus speakers will be a conversation on the afternoon of the 29th about the journeys four impressive women took toward the C-suite.  

We're pleased to offer 3p readers a 25 percent discount on attending the Forum. Please register by going to the 3BL Forum website and use this discount code when prompted: NEWS2019BRANDS.

Image credit: Vaughn Smith/Pixabay

World-renowned chef and humanitarian José Andrés is tired of speaking at conferences. He is tired of the applause. He says it is time to stop; to stop meeting at conferences in New York and London, and time to start the real battle to make the world a better place by going to the front lines where help is needed.

For Andrés, the front lines are disaster-ravaged communities and refugee camps in need of a hot meal.

For 10 years, Andrés has split his time between his more than 30 award-winning restaurants in Washington, Miami and Los Angeles, and his work with World Central Kitchen (WCK). He started the non-profit with his wife, Patricia, to change the world through the power of food. His recipe: Leverage smart solutions in the wake of natural and man-made disasters to end hunger and poverty and, in the process, empower communities and strengthen economies.

“Our mission is simple: When people are hungry, we feed them. We need to be on the front lines where they are,” Andrés told a packed auditorium at last month’s Social Good Summit during UN Climate Week in New York. “The urgency of now is now, not a week from now, not a month from now, but now.”

In the past decade, through a small full-team team and thousands of volunteers, WCK has served more than 8 million meals through 23 deployments and more than 44,000 volunteer shifts. This has included 3.7 million meals after Hurricane Maria in Puerto Rico, where the Coliseo arena became the biggest “restaurant” in the world, says Andrés, serving 75,000 people per day. WCK also provided over 350,000 meals after Cyclone Idai in Mozambique earlier this year, more than 570,000 and counting meals for Venezuelan refugees in Colombia, and 100,000 meals to Federal employees in Washington, D.C., during the government shutdown. In fact, WCK teams have been cooking every single day since September 2017.

WCK considers itself a first responder, leveraging local resources to adapt in real time. “As cooks, we love to feed people,” Andrés explained at the Summit. “In disaster situations, we have to feed the many. If we don’t have a kitchen, we make a field kitchen. We don’t wait for the perfect kitchen. When you wait, people go hungry.”

Their food, he says, is always fresh, never pre-packaged, and made with locally sourced proteins and vegetables. And, when possible, served with recyclable plates and cutlery.

Next up for WCK: A chef relief training program that will certify culinary professionals in WCK’s methodology of emergency food response.

Building food resiliency

In the wake of Hurricane Maria in Puerto Rico, Andrés realized more was needed to solve the problem of hunger and nutrition than providing food in the immediate aftermath. The island needed to build food resiliency and security in the face of future disasters, especially important given that at the time it imported 85 percent of its food.

Based on the results of an agricultural assessment of Puerto Rico, WCK and local experts determined that the best way to continue “feeding an island” was by supporting Puerto Rico’s smallholder farmers. In 2018, WCK launched its Plow to Plate program to help farmers revitalize their operations and begin to regrow their long-term capacity for food production, distribution and sales. The program provides funding, training and networking opportunities to both smallholder farmers and businesses that support local agriculture.

Abner Santiago, an agro-ecological farmer featured on WCK’s website, used Plow to Plate funding to build an off-grid walk-in cooler, rebuild greenhouses and purchase tools and implements that have brought his food production levels back up 110 percent from the hurricane.

And more than 30 of the 55 projects supported by Plow to Plate are women-led or co-led, like La MicroFinca, a farm led by Tadilka Rivera. Tadilka built a cold-storage unit with help from WCK where she can now store her greens, peppers and root crops to sell at farmers’ markets and restaurants.

WCK is now working to expand Plow to Plate to other countries.

In Haiti, WCK has worked for nearly five years with the Haitian Department of Education to prepare aspiring chefs for careers in local restaurants and hotels. The initiative offers a five-month culinary arts training program in the École des Chef culinary school in Port-au-Prince, which opened in 2017. Today, it is the country’s premier culinary school with more than 40 graduates annually. Upon graduation, students are placed in culinary internships, with the majority turning into full-time jobs.

Fulfilling a mission

Andrés explains on his website that his restaurants “serve the few in the developed world that have access to such luxuries, but we are always looking towards how we can contribute to feeding the many via innovation and education.” 

And contribute he has since he arrived in New York City at the age for 21 from his native Spain with only $50 and a mission to change the world through the power of food.

As he encouraged the audience at the Social Good Summit to take action, he quoted from author John Steinbeck: “Wherever there is a fight so that hungry people may eat, we will be there.”

Don’t forget: Later this month, we’ll be hosting 3BL Forum: Brands Taking Stands – What's Next, October 29-30, at MGM National Harbor, just outside Washington, D.C. On the afternoon of the 30th, Alexandra Garcia, Chief Program Officer of World Central Kitchen, will share what companies can do to demonstrate commitments far beyond making bold statements.

We're pleased to offer 3p readers a 25 percent discount on attending the Forum. Please register by going to the 3BL Forum website and use this discount code when prompted: NEWS2019BRANDS.

Image credit: World Central Kitchen

The Business Roundtable, the U.S.’s most influential group of corporate leaders, devised its original statement on the purpose of a corporation in 1997. It was based on the principle that management and directors’ main duty was to maximize profits for the shareholders, who would then decide what to do with those profits.

After recently revisiting the statement, however, the Roundtable has now reenvisioned the relationship between an organization and the world around it. The statement now proposes that a company has a broader responsibility to society that requires it to consider all stakeholders in its business decisions. Noble intentions indeed.

The updated statement of purpose, agreed on by nearly 200 CEOs, is a worthwhile initiative; it acknowledges, from the very top of mainstream business, that there is more to business than profit. It expands a company’s raison-d’etre to non-financial considerations. But as many leaders have noted, more work needs to be done.

From our point of view, there are three buts.

1. Inertia

One may assume that it makes a difference having leadership that’s committed to the statement of purpose. But is this actually the case? We used Datamaran to conduct an analysis of the topics discussed in the purpose statement of signatories' annual disclosure over the last five years.

The graphic below shows the level of emphasis* Business Roundtable and S&P 500 companies have put on specific topics in their annual financial reports, sustainability reports and SEC filings over the last five years. We’ve found that there isn’t any drastic difference between the disclosure patterns of companies who have signed up, and those who haven’t.

Business Roundtable companies aren't more “committed” to deliver on the purpose statement than the S&P 500, based on their actions so far. One may argue it's early days as the statement has just been made, but we are yet to see any action. You can be part of the initiative, but if you don’t perform the right actions to support it, you’re no different to those who aren’t part of the initiative.

2. Coverage

The issues Business Roundtable CEOs indicate are very ‘social’ in nature. The environmental action component seems to be largely omitted from the statements, which makes the purpose incomplete and biased. We support the drive, but other elements of value creation should be included too, and viewed holistically to see how companies have the greatest net impact.

It’s great that the Business Roundtable is trying to take the lead and identify ways companies create value, but there should be a more holistic way of recognition – multiple capitals. It’s in the broader framework and we can measure it.

3. Assurance

I am still not convinced non-financials are taken seriously. One good way of confirming that a company is committed beyond profit is to have its non-financial disclosure assured. Sadly though, this is by no means a given: our data tells us that in 2019, 71 companies have published a sustainability report, with 32 being assured (45%). Last year, 40 of 106 published sustainability reports were assured (38%). There was next to no movement in the previous three years, with the figures standing at 42% in 2017, 42% in 2016 and 43% in 2015. Sustainability disclosure has started heading in the right direction this year, but there’s still a lot to do.

Takeaways

Grand statements certainly have their place. They help you to articulate noble intentions and communicate your stance to the world. They allow you to create fellowship with likeminded people and work together to make a difference. That is the opportunity now presented to nearly 200 CEOs.

Obviously, this isn’t the first such statement committed to paper. What makes the statement of purpose different to the SDGs (Sustainable Development Goals) for example? How do these various statements of good intent relate to each other? Is commitment to one particular framework (or different parts of different frameworks) more credible than commitment to another?

CEOs will need to be clear on who precisely will take responsibility for the statement of purpose: whether it’ll be the sole domain of the C-suite or whether the shareholders, financial institutions or other groups are able to commit.

The statement of purpose is a step in the right direction, but ultimately, talk is cheap. If they really do believe that their businesses are about more than just profits, now is the time for some CEOs to start putting their money where they mouth is.

Image credit: Jeremy Bishop/Unsplash

Editor’s Notes:

* Emphasis: ‘High,’ ‘medium,’ ‘low’ and ‘no mention’ are the emphasis scores that are used to assess the level of emphasis each company puts on a specific topic in their corporate reports. The emphasis takes into account a number of variables, including but not limited to the number of times the topic is mentioned, its location (e.g. CEO letter) and more. For example, high emphasis topics are found a large number of times in a source and/or in key sections. Whereas low emphasis topics appear only rarely in a source.