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With the recent release of the United Nations’ Climate Report concluding that “there is no simple answer to the questions of whether it is feasible…to adapt to the consequences . . .” of its findings, it’s left many people wondering where to start addressing the daunting tasks at hand – especially with headlines claiming that taking action to combat climate change could cost America “trillions” of dollars. The finances of addressing climate action, however, raise an important question: Are these challenges—the environmental one and the financial one—mutually exclusive?

The short answer is no. But the long answer is a much more positive and informative one, touching on the increasingly evident idea that adopting environmentally-focused policies and priorities can, in fact, make for really good business.

The simple but powerful idea that both the environmental world and the world of business have begun to understand is that sustainability is a holistic idea. More and more investors are starting to understand the risk of putting their money into a business that is vulnerable to climate change, either physically or financially. Similarly, no good environmentalist would think of planning for either the short or long-term welfare of our immediate environments or our planet in ways that can’t be supported financially.

Underlining this point, we’re now witnessing a widening and deepening trend of global corporations betting on sustainable solutions. Only days after the U.N.’s report was released, one of the world’s biggest banks, based in the United Kingdom, announced an initiative to invest $330 million of the bank’s own pension scheme in renewables. The bank was not alone, as 30 other large firms across the U.K. joined the initiative.

Think this is just a progressive European trend? Think again. One of the world’s largest independent media and entertainment companies, with over $50 billion in revenue, announced recently that it was getting ready to flip the switch on a massive initiative which will see its own solar fields generate enough electricity to power two of its four U.S. theme parks.

A top Fortune 500 company similarly announced this month its own clean energy initiative. While in this case the move—swapping out fluorescent light bulbs in its stores with environmentally friendly LED’s—might seem less “sexy” than renewables powering a theme park, it’s no less significant since the simple switch will save the retail titan a whopping $200 million over time.

There’s no lack of similarly powerful examples of big businesses making these kinds of environmentally sound changes. And while the public relations score for these companies might be high, in my capacity as a financial professional I can attest to an undeniable fact: if these sustainability-minded changes weren’t good for business, the most ubiquitous, most successful companies in the world wouldn’t hesitate to find other ways of getting positive recognition.

Businesses like these, which are laser-focused on growth and corporate earnings, simply cannot afford to make dubious business decisions because they feel some kind of cultural pressure or a need to prove their environmental credentials. They’re making these changes because they know they will have a positive impact on the bottom line.  And as a professional investor, I’m also willing to bet that we’re at a point in time where we will start to see businesses not just lauded for doing good, but to start being punished for not trying. For many investors who have hesitated to adopt impact investing due to potentially lower returns, this shift will be monumental. Investors will be more focused on the environmental, social and governance standards of a business because it will also mean higher returns for them.

While these huge, name brand companies may make a dent in the quest to take us closer to the 1.5-degree C goal, it’s also going to be about sustainable investing options for smaller companies and even all the way down to individuals. Something as simple as offering more impact investing options in employees’ 401K plans promote both the company’s lasting footprint and offer sustainable solutions for their employees’ retirement funds.

People around the world, from different backgrounds and falling across the political spectrum, want to patronize and work at businesses that are not only great at what they do, but are also committed to doing good for the world. And there are few things a business can do that’s better for the world than ensure we have the resources we need to continue thriving—as businesses, communities, countries, and together as a species—far into the future.

Image credit: Pixabay

This article series is sponsored by Saipem and went through our normal editorial review process. 

In September 2015, all 193 member nations in the United Nations General Assembly adopted the Sustainable Development Goals (SDGs) codifying a pathway to a more sustainable, equitable and peaceful world by 2030. Succeeding the Millennium Development Goals (MDGs) that spanned the first 15 years of the 21st century, the 17 SDGs build on the progress and lessons learned from the MDGs.

The United Nations Global Compact is a principles-based framework providing corporate leaders with a voluntary measurement and reporting platform to align their business operations with universal guideposts for “human rights, labor, environment and anti-corruption.”

This global multinational-corporate partnership aims at putting “boots on the ground” for achieving the SDGs. The Global Compact provides a framework for companies to do just that. The voluntary process allows the flexibility for companies to focus their core competencies on applicable goals, develop best practices and report their progress back to the global community.

Saipem committed to the Global Compact

In October of 2016, Saipem, an Italian energy services company, was formally accepted into the Global Compact. Operating in 62 countries with more than 32,000 employees representing 120 nationalities, Saipem’s participation in the Global Compact represents a determined commitment to cultivating and maintaining its social license to operate in a challenging industry.

 

Operating in the energy sector, that for its nature generates social and environmental effects in their countries of operations, Saipem’s commitment demonstrates its willingness to play a role in minimizing those effects.

Value Creation and SDG8

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

 

-- Preamble, Sustainable Development Goal 8

Operating in nearly all global oil and gas markets, Saipem uses SDG8 as a “compass” for sustaining their ongoing mission of creating economic and development opportunities in local communities all over the world.

 

Quantifying shared economic benefit between local inhabitants and global enterprise is a way to represent the so-called value creation.

With the principles of SDG8 as a guidepost, Value Creation is the cornerstone of Saipem’s sustainable business model.

As required by the Global Compact, Saipem’s Communication on Progress (CoP) report reflects the company’s commitment and continuing progress in measuring, assessing and implementing operational standards focused on developing all the available opportunities with a region, most particularly those promoting the well-being and economic empowerment within local communities.

In broad terms, these opportunities include investment in training, knowledge transfer, collaboration with supply chains and subcontractors, capacity building and support of local entrepreneurship. It is important, however, to measure these objectives against a transparent framework of KPIs to both communicate progress to all stakeholders and build on the increased understanding of what is working and what may need adjustment.

Model and measure contributions to socio-economic growth

More traditional methodologies used for quantifying Value Creation typically calculate only the immediate components of total impact, including employment, local purchases and taxes paid to local governments. But these methods don’t reach far enough, underestimating “the overall real impact and the potential benefits of [Value Creation] strategies.”

 

Saipem has met this challenge by developing the SELCE (Saipem Externalities Local Content Evaluation) and REVALUE models, tools for a more and more transparent communication approach towards its all stakeholders.

Saipem seeks to capture a more holistic picture of Value Creation by taking into account the synergies between all stakeholders within its scope of operations. It does this through the Saipem Externalities Local Content Evaluation (SELCE) Model. By consistently applying this model, the company captures an in-depth evaluation of the overall positive economic impact on the local community.

Total value: REVALUE

Every business ledger balances revenue against expense in order to understand the real value of its operation. It is no different when calculating the ledger for the triple bottom line. Saipem’s REVALUE MODEL balances with the SELCE to arrive at Real Value.

 

This process expresses the total Value Creation of Saipem’s impact by taking both the positive and negative outcomes of the activities. Applying these methodologies creates a model for others to follow, making Saipem an industry leader within the U.N. development framework.

A step ahead

In a statement on the Global Compact website, Ms. Lila Karbassi, chief of programmes for the Global Compact talks of, as many others have, the consequences of short-sightedness:

“...it is not enough for companies to concern themselves only with short-term profits because natural disasters, social unrest or economic disparity can damage long-term prosperity. The businesses that understand this challenge and take action will be a step ahead.”

Too many companies continue to see sustainability, in all its forms, as a fad or--at best--a cursory concern to be dealt with once and then handed off to PR. In the end, this kind of half-hearted effort is to engineer public perception, thus avoiding any real transparent effort for achieving measurable impact, serves no one, at least not for long.

 

In the coming years and decades, these organizations risk losing their social license to operate, as well as any market advantage they assumed by ignoring the long-term consequences in so doing.

Through innovative methodologies, transparency and sustained commitment, companies like Saipem play an increasingly crucial role in solving this complex puzzle and slowly steering the global community toward positive outcomes for generations to come.

Image courtesy of Saipem

In the early hours of Good Friday, March 24, 1989, an oil tanker struck a reef off the Gulf of Alaska, spilling 11 million gallons of crude oil and causing long-lasting damage to the ecosystem and the local communities that depend on it. The Exxon Valdez accident, the worst environmental disaster in the United States until that point, mobilized citizens and organizations from all over the world and coalesced in a movement to support and demand more information about the impacts of companies on the environment. It was the first time that interest in a company’s environmental impacts had gone beyond environmental groups, and the first time stakeholders entered the fray in earnest.

From this push for transparency, pressure evolved into the Valdez Principles. This voluntary code of environmental conduct for companies was a rare example of a coalition between financial investors and environmental groups. The idea was that investors controlled the purse strings and could reward environmentally sound behavior and withdraw investments from companies that couldn’t show that they were addressing the issues. Economics, it was said, would be a powerful force for change.

While their specific impact on the ecosystem and communities directly affected by the Exxon-Valdez oil spill may not have been as great as it was hoped, the Valdez Principles gave rise to the sustainability reporting world as we know it now.

Three decades later

From those first voluntary efforts at accountability and transparency mostly focused on environmental impacts, sustainability reporting has evolved to encompass a wider range of topics. In 1999, the great majority of sustainability reports was separated from the main financial report, and mostly included environmental information. By 2002, 30 percent of reports began incorporating social information. And by 2017, with the rise of frameworks such as the GRI Sustainability Reporting Standards (GRI Standards), reporting on environmental impacts has become standard practice for large and mid-sized companies.

In summary, the practice of sustainability reporting has gone from an undertaking that mostly large companies engaged in, to a mainstream activity that companies large and small can undertake to gain business insight and improve not only their environmental or social indicators, but potentially their business process as well. According to recent analysis by Boston Consulting Group, the valuation of top performers in environmental, social and governance (ESG) information can be as high as 19 percent higher, while margins can be up to 12 percent higher. And we know that consumers, employees and investors are increasingly looking at the non-financial performance to make decisions as to where to buy, work and invest.

Nevertheless, many organizations and companies still consider sustainability reporting financial reporting’s softer sister. And in some cases it is seen as a public relations exercise, rather than a serious attempt at improvement. But more and more, companies and their investors are seeing that the great challenges of our time, including climate change and human rights, can represent financial risks to companies in the long term, whether because of public perception issues or supply chain disruptions.

From “disclose to “disclose what matters”

The bottom line is that companies are first and foremost responsible to their shareholders and other stakeholders. Arguably the last two decades were the golden age of voluntary reporting, and investors were preoccupied with immediate returns. But the tide is turning, and these stakeholders are understanding that the risks they face are long-term and many are related to ESG concerns. Nowadays investors are changing the way they view sustainable investment, to include environmental, social and governance factors.

To best asses these risks, investors need to have information that is financially relevant and reliable. And in the last few years, investors have begun to demand that companies engage in sustainability reporting. In fact, the trend has moved from whether companies should report, to what companies should be reporting on. It is no longer enough that companies present anecdotal evidence of impact, or contained stories that showcase success. Companies are being asked to ensure that they disclose the information that truly matters to its stakeholders, and present it in a way that makes it comparable year on year.

The tide is turning, and these stakeholders are understanding that the risks they face are long-term and many are related to ESG concerns. Nowadays investors are changing the way they view sustainable investment, to include environmental, social and governance factors.

But establishing what is relevant information and making it comparable is not seen as an easy task. To help companies overcome this challenge, reporting standards encourage them to use materiality as a guiding principle to disclose information. In practice, this means that companies should report on the activities and topics that have the largest economic, environmental and social impacts, or those that can affect the decisions and perceptions of stakeholders, including shareholders.

To make this information comparable, and useful to both stakeholders and the company itself, companies also need to understand, report on and evaluate how they approach materiality, and whether and how they engage with their stakeholders to receive feedback, change and improve.

A virtuous cycle

Stakeholders in general, and specifically investors have an interest in better performance as it brings higher returns in turn. One way in which they can promote that is through ensuring that the companies they invest in are transparent about the effects they have on the economy, society and the environment. Armed with this information, investors will find themselves in a much better position to assess a business realistically and help charter the course. More transparency can also bring to light areas where companies can improve processes, their business and their bottom line; this will lead to further improvements in performance. The virtuous circle in which transparency reinforces good performance will result in benefits to the investors, better off societies and less damage to the environment. In a nutshell, going from disclosing as a mechanical exercise to disclosing what matters, to society, the company and investors alike, is a win for all.

Click here for more articles by GRI on sustainability reporting.

Previously published on 3BL Media news.

Last week, Mars, Inc., The Climate Group, EDF+Business, The Nature Conservancy and Oxfam came together at #GenerationForChange on Twitter during COP24 to discuss how the private sector can lead on climate action, align with the United Nations’ Sustainable Development Goals (SDGs) and ensure a more sustainable supply chain worldwide.

During #GenerationForChange, we discussed the following topics and much more:

• Why businesses like Mars should support COP24 and the 2015 Paris Agreement


• The role companies like Mars have in supporting national climate policy


• Why partnerships matter in achieving long-term sustainability goals


• Barriers to making supply chains climate-smart – and ways to overcome them


• How companies can align their work on the SDGs with their overall climate action goals

The featured participants included:

• Ashley Allen, Climate and Land Senior Manager at Mars (@AshAllen350), who has been on the ground in Poland for COP24


• Elizabeth Sturcken, Managing Director at EDF+Business, Environmental Defense Fund (@esturcken)


• Aditi Sen (@urbanwonk_mom), Policy Advisor on Climate Change, and Jesse Young (@jesseyoung84), who works with the organization’s Climate Team at Oxfam.


• Katrine Tilgaard Petersen, Communications Executive, and Sophie Vipond, Communications Advisor, at The Climate Group (@ClimateGroup)


• David Cleary, Director of Global Agriculture at The Nature Conservancy (TNC) (@NatureAg)

One thing that struck me during the chat is how Mars puts its money where its mouth is. TriplePundit has long covered Mars’ investments in renewables, from the United Kingdom to Australia; the company’s U.S. operations have been running on wind power since 2015. But as Allen reminded us:

[embed]https://twitter.com/AshAllen350/status/1070004731953721345[/embed]

Allen also didn’t mince words (nor skimp on visuals!), when she made it clear where Mars stood on climate action:

[embed]https://twitter.com/AshAllen350/status/1070003097412472839[/embed]

Sturcken of EDF was quick to back up Allen’s words:

[embed]https://twitter.com/esturcken/status/1070003313909866499[/embed]

Sturcken, who was among many Californians who lived through the impact of California’s wildfires, reiterated the need for companies to lean on policy makers to make the changes necessary to ensure the goals of the Paris Agreement are met:

[embed]https://twitter.com/esturcken/status/1070002951207428096[/embed]

The Climate Group reminded us that policies that boost climate action efforts should not be seen merely regulations that come with a cost, but in fact, can generate economic opportunities:

[embed]https://twitter.com/ClimateGroup/status/1070001867491565569[/embed]

As Oxfam’s Sen pointed out, if more action is not taken to address climate change, the world’s poorest citizens – who are often the ones that grow our food – will be affected the most:

[embed]https://twitter.com/urbanwonk_mom/status/1070002701021470720[/embed]

On that point, Allen pointed to a couple examples of how food companies like Mars can improve their supply chain performance while boosting incomes for farmers worldwide:

[embed]https://twitter.com/AshAllen350/status/1070011726689636352[/embed]

During the one-hour Twitter Chat, all the participants made one thing clear: achieving climate action is hard and requires much cooperation and innovative partnerships. But TNC’s Cleary also offered us a dose of optimism, pointing to the potential of a major deforestation commitment that could occur in Brazil during 2019 – no small feat considering Brazil’s new right-wing president intends to rollback many of the country’s environmental reforms:

[embed]https://twitter.com/NatureAg/status/1070008909904125952[/embed]

Finally, while 3p has long talked about how companies can work with nonprofits to take on tough challenging environmental issues, from deforestation to securing clean and safe water for more citizens, Allen brought up an example of how companies can work together as well:

[embed]https://twitter.com/AshAllen350/status/1070007969868378118[/embed]

You can follow Mars’ ongoing discussion on its climate action work by both following the company or tracking #GenerationForChange on Twitter.

 

 

U.S. business leaders have been flexing their muscles on gun control, climate change, LGBTQ rights and other domestic issues. The question is, can they exercise a similar force when it comes to matters of international affairs? Unfortunately, the murder of journalist Jamal Khashoggi last October indicates that the corporate social responsibility (CSR) movement runs out of steam when matters of state are involved.

Nevertheless, as the weeks go by, the Khashoggi case continues to fester. The end result may be a renewed opportunity for the U.S. business community and other global stakeholders to demand leadership and accountability, if not from those responsible for the murder, then certainly from the U.S. government.

The Khashoggi murder and corporate social responsibility

The organization Committee to Protect Journalists has documented the murder of more than two dozen journalists so far in 2018. Only one of them, Jamal Khashoggi, has prompted prolonged international attention.

There are a number of reasons for the persistent media spotlight. A citizen of Saudi Arabia, Khashoggi was also a U.S. resident and the father of three U.S. citizens as well as a columnist for a prominent newspaper, the Washington Post.

The horrific circumstances of his murder were another factor. The killing was carried out in a public place, the Saudi consulate in Istanbul, Turkey, and it was conducted in one of the most spectacularly brutal and repulsive ways imaginable.

The timing of the murder also contributed to the high level of attention. It took place just days before an important investor conference in Riyadh, the Future Investment Initiative. To their credit, several top executives announced that they would boycott the summit. However, those companies may have still been represented by lower-level staff. There was no mass rush to the doors. The summit went on as planned and there was no organized follow-up by global business leaders.

When boycotts (don't) work

TriplePundit has been following the boycott movement since the 2016 Presidential election, and the short-lived corporate boycott of the Future Investment Initiative is a classic case of failure.

Part of the problem is that corporate attention focused narrowly on withdrawing from the Future Investment Summit. There was no apparent plan for public follow-up.

This failure of brands taking stands has been especially deafening when it comes to U.S. tech companies. Soon after the murder, reporters drew attention to Saudi Arabia's weighty investments in Silicon Valley. In an October 19 NPR interview, writer Anand Giridharadas provided a representative sample that underscores the implications for the CSR community (emphasis added):

...You know, as many of your listeners will remember, there was this Davos in the Desert conference. Then you got this new $500 billion megacity that the Saudis are creating called Neom. And Neom, again, had all these Silicon Valley people and other corporate people on the board. And so these folks in Silicon Valley make a lot of very important decisions about what kind of world we live in. If these people are basically no better than chemical magnates who dump pollutants into rivers - except the digital version of that - I think that's important for Americans to understand.

The corporate silence has continued, even though the stakes have ramped up considerably since the financial summit took place. Among the more damning developments, new evidence has linked a contemporaneous chain of contacts between the murderers, their Saudi handler, and the powerful Saudi Arabia Crown Prince and First Deputy Prime Minister Mohammed bin Salman.

The limits of CSR: follow the money

The ongoing leadership vacuum of the Trump administration has provided the CSR community with new opportunities to steer the national conversation, but it seems to have hit a wall with the Khashoggi murder.

Throughout the whole episode, Trump has defended Mohammed bin Salman and dismissed the evidence at hand, even that provided by his own intelligence agents.

The most recent test occurred last week, when White House National Security Advisor John Bolton downplayed the importance of the Khashoggi audiotape, implying that there was no point in listening to it because it was in a foreign language.

As if on cue, additional new evidence came to light just a few days later in the form of a transcript of the audiotape. Still, there has been no organized response from the tech sector or other U.S. business leaders.

One obvious common denominator between the White House and technology companies is the role of Saudi investors and Japan-based SoftBank. Last year The New York Times took note when "a who’s who of technology and venture capital chief executives lined up to meet" with Mohamed bin Salaman on his tour of the US. The list of face-to-face meetings included Tim Cook (Apple), Mark Zuckerberg (Facebook), Satya Nadella (Microsoft) and several high profile venture capital investors including Peter Thiel, who is also a member of the Facebook Board of Directors and a top supporter of President Trump.

President Trump has denied any direct connection between his business dealings and the Saudi government, though for the most part he has been forthcoming about the millions of dollars in deals he has made with Saudi business leaders, from a yacht to various real estate transactions.

Congress stirs to life

To be fair, matters of state in a modern democracy should be just that: matters of civic responsibility on the part of elected leaders and their appointed officers who are authorized to act on international fairs.

In the latest development, it appears that the Trump appeasement policy is a bridge too far even for his Republican allies in Congress. Earlier this month, the Trump administration was forced to acquiesce in a U.S. Senate request for a top-level briefing on the Khashoggi case by CIA director Gina Haspel.

By last week, Republicans in the Senate were signaling their intention to act unless the White House developed a plan for addressing the Khashoggi murder. Newsweek cited one such example:

"It's un-American," said Senate Foreign Relations Chairman Bob Corker, a Tennessee Republican, referring to President Donald Trump's suggestions that U.S. arms sales with Saudi Arabia are more important than a strong response to the murder of a journalist. "When we provide aid to other countries, we do so because we want to see good things happen in those countries. We espouse American values around the world. And to say, 'Well, no. They're going to buy some arms for us and so it's OK to kill a journalist,' sends exactly the wrong message about who we are as a country."

It's too soon to tell what if any meaningful action the Senate will take. The Republican party still controls the Senate, and the Corker statement would not be the first time that a Republican Senator has stepped up to the microphone to challenge Trump administration policy, only to back down when the votes are recorded.

In the House of Representatives, it could be a different story. The results of the November 2018 election indicate that American voters still value checks and balances. With a strong Democratic majority set to helm the House in January, the body's Intelligence Committee is already gearing up for a thorough airing of the White House response to the Khashoggi murder, among other issues relating to Saudi Arabia.

If the CSR community is looking for another opportunity to take a firm stand on the Khashoggi murder, they will probably find it in the halls of Congress, not behind the doors of Silicon Valley c-suites.

Photo: Mark Zuckerberg by Silverisdead/flickr.

This article series is sponsored by Pella Windows and Doors and went through our normal editorial review process. 

Building is on the rebound. Almost 10 years after the recession, when nearly all building was halted, builders are back to business and the number of residential construction projects continues to grow.

Builders today have more choices of materials than ever before. Wood, vinyl, and fiberglass are all popular choices. And all provide sustainable benefits to homes, offices, and Mother Earth.

If new windows and doors are in your future, read on to see which material is best for your application.

Wonderful Wood

Timber harvested from sustainable forests is widely used in creating home products. When timber is cut, seedlings are planted in its place. The Forest Stewardship Council (FSC) is an independent organization that promotes responsible forest management. Their certification system is internationally recognized for products that are the result of responsible forestry.

 

“We at Pella Corporation work with the FSC to ensure the timber used in our wood windows and doors is sourced from sustainably managed forests,” said Dan Parrish, engineering manager at Pella Corporation

Because preparing timber for the wood windows involves little carbon usage, Pella is optimizing its usage of the wood with up to 80 percent of incoming lumber actually utilized to create products.

Waste is also minimized and repurposed. Pella’s remaining sawdust is turned into animal bedding. A local recycling company purchases scrap windows, separating the glass from metal, and recycling the components. And Pella’s scrap aluminum is sent to an aluminum recycling facility. Pella ships waste from aluminum processing back to suppliers. That waste then gets reused.

Wood stands up to extreme heat and extreme cold, and the treatment applied to wood during manufacturing protects the wood from rot. The aluminum cladding on the exterior is low maintenance, which means the windows will last a long time. It does not crack, split, warp or become brittle over time.

Vital Vinyl

Vinyl is widely used for windows. Easy care, energy-efficient vinyl windows don't need painting, staining or refinishing. Fully welded sashes and frames add strength and durability. Cost effective, durable, energy efficient with low impact on the environment.

 

Vinyl is also highly recyclable. It can be used to create other vinyl products. Pella funnels much of its vinyl waste back into window material.

Fabulous Fiberglass

Fiberglass is known for creating extremely durable windows and doors with insulating properties. Pella’s Duracast is stronger than vinyl. It requires little maintenance with no painting, staining, or refinishing.

 

This window material is also recyclable. Pella optimizes yields and efficiency with its own fiberglass manufacturing processes. Duracast fiberglass achieves durability with thinner wall cavities in the profile than other fiberglass windows and doors, which means Pella is saving the environment by using less material. 

Gorgeous Glass

Made of sand, glass is one of the most sustainable building materials homeowners can choose. It’s fully recyclable into other glass products, and recycled over and over again throughout its lifetime. Pella recycles post-industrial glass.

 

But not all glass is created equal when it comes to keeping energy in the home. Heat gain and heat loss through windows are responsible for 25-to-30 percent of residential heating and cooling energy use.

Therefore, it is important to choose glass that has the ultimate energy-saving properties.

Sustainable Sourcing

Manufacturing sustainable windows is only 5 percent of the story. By selecting energy efficient windows, a consumer can save energy. Look for the ENERGY STAR designation on windows. ENERGY STAR-qualified new and replacement windows lower energy bills. According to ENERGY STAR, the typical home will save $126–$465 a year when replacing single-pane windows. Homeowners can save $27–$111 a year with double-pane, clear glass replacement windows. Rigorous testing helps ensure energy efficiency standards are met.

 

“Pella has the unique capability to do full testing and certification to industry standards onsite. Pella utilizes its test lab to find sustainable and innovative ways to build its products.” said Mike Hamand, Pella engineer.

As homeowners become increasingly educated and concerned about the products used to build their homes, options abound that are sustainable, durable, energy efficient and beautiful. And when paired with the right glass, the combination can be a positive for homeowners’ wallets.

Image: Pexels / Daan Stevens

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

As companies look to meet their greenhouse gas and climate targets, procuring renewable energy remains an attractive approach with the promise of big gains in reducing corporate carbon footprint.

Nearly two-thirds of Fortune 100 and nearly half of Fortune 500 companies have set ambitious renewable energy or related sustainability targets, according to the Business Renewables Center (BRC), an initiative of the Rocky Mountain Institute.

Over 155 companies globally have committed to purchasing 100 percent renewable energy through the global initiative RE100. The BRC now counts 100 corporate buyers as members. Tech companies like Google, Amazon and Apple, and large businesses like Starbucks, Target, General Motors and General Mills have all made huge investments in renewable energy.

Yet despite private sector enthusiasm for renewable energy, less than one-fourth of corporate renewable energy buyers in BRC’s network have completed an off-site transaction to date. With corporate renewable energy or greenhouse gas goals tied to 2020 soon coming due, companies have even more incentive to act sooner rather than later.

“We see a lot of opportunity in today’s energy market,” Lynda Clemmons, vice president of sustainable solutions at NRG Energy, the leading integrated-power company in the U.S., told TriplePundit. “We see demand drivers from businesses and throughout the supply chain. Both suppliers and consumers say they would rather do business with a company that is focused on sustainability and the environment -- that shares the same values they do. It’s a push and pull, leading to the same thing: A desire for low-cost, reliable, sustainable energy.”

Renewables grow more competitive

Renewable energy is the fastest-growing energy source in the U.S, increasing 67 percent from 2000 to 2016, according to the Center for Climate and Energy Solutions. Eighteen percent of all electricity in the U.S. was produced by renewable sources in 2017, including solar, wind, and hydroelectric dams, according to findings from the Business Council for Sustainable Energy and Bloomberg New Energy Finance.

Renewables are also increasingly competitive compared to other forms of energy. Solar and wind projects made up roughly 62% of new power construction in 2017, and their costs continue to plummet.

The reduced price point for renewable energy is a definite incentive for companies to make an investment in a clean energy future now, Clemmons says.

“Renewables are one of the most economical energy commodities out there,” she adds. “As a result, we are seeing a huge amount of corporate interest as well as utility interest in buying renewables.”

Corporate renewable deals amounted to nearly 5 GW in 2018, according to BSR’s deal tracker.

“That is the most we’ve ever seen—twice as much as 2017 and three times as much as in 2015,” Clemmons notes.

Simplifying the process

Some well-known, but resolvable, obstacles typically hold back a company’s progress in procuring renewable energy. According to Clemmons, it may be that the company is simply in the middle of an existing energy contract and is not in a position to invest right now.

“The other thing that holds a customer back is if they are in a geographical location that doesn’t offer a renewable energy option,” she explains.

One barrier to companies making the investment in off-site installations is that the process is considered cumbersome, Clemmons points out, with historical factors such as untenable contract sizes or lengths, difficult building logistics or complex financial transactions preventing companies from procuring wind and solar energy.

“In the past it’s been the larger companies with the resources and savvy to enter 25-year purchasing agreements,” Clemmons told TriplePundit. “But we wanted to make it possible for any company to incorporate renewables with the least cost and least amount of complications to buy renewable energy under a shorter agreement and be secure in knowing that there is a fixed price on their energy spend.”

Renewable Select changes the game

To address this need, NRG has developed a plan called Renewable Select to simplify the renewables procurement process and make it easier for companies to choose renewables.

The plan transforms the lengthy and complex traditional energy procurement process into a cost competitive, easy to execute transaction.

Its benefits, according to NRG, include:

• A standard contract with straightforward terms, no need to sign a power purchase agreement (PPA)


• Renewable energy procured in the amount desired, no large commitments required


• A simplified corporate approval process, no lengthy 20-year contracts


• A single, consolidated bill, no juggling multiple bills by electricity source


• The ability to point to the physical location where your renewable electricity is produced and even the opportunity to receive naming rights

“Renewable Select is completely changing the game,” Clemmons says. “For instance, a traditional Power Purchasing Agreement (PPA) can take 12 to 18 months just to negotiate. With Renewable Select, we can close the transaction and get everyone comfortable in less than two months—a tremendous time saver.”

“Compared to what is generally available in the market, Renewable Select offers fixed price solutions for renewable energy at very competitive rates. That is a huge benefit to companies, to be able to lock in that figure in their energy budget,” she explains.

“At the same time, companies who go for off-site installations through Renewable Select are contributing to the local grid,” she adds. “They gain the renewable energy credits as well as the ability to talk about the investment as part of their sustainability commitment.”

In one example, leading global foodservice distribution company Sysco announced in July a ten-year renewable energy agreement with NRG Energy. The company will install three solar garden sites in the Houston and Dallas areas, which will support approximately 10 percent of Sysco’s U.S. electricity usage.

NRG customized a simple electricity solution through Renewable Select, in a familiar fixed price structure that benefits Sysco’s operations, bottom line and the environment, Clemmons says.

Helping communities go solar

Another way in which NRG helps customers participate in the marketplace is through community solar projects, and Renewable Select is making that easier.

“We connect developers and their projects with the customer and help communities get access to a solar facility at a fixed price,” Clemmons says, adding that NRG has experience contracting hundreds of MWs of community solar.

In the past, Clemmons explains, NRG had to use its own in-house shop to develop renewables projects. Then, in August 2018, NRG announced the sale of its Renewables Platform and controlling interest in NRG Yield, Inc. to Global Infrastructure Partners, which formed Clearway Energy Group, one of the largest clean energy companies in the U.S.

“With the divestiture of our in-house renewables development shop and our increased focus on the customer, we have pivoted to providing a broad range of consulting and services to customers,” Clemmons says. “Now we’re free to contract with Clearway—or any other developer (like Cypress Creek, who we partnered with for the Sysco project)—which enables us to be more flexible when it comes to pricing and other transaction features.”

Looking ahead to continued growth

Currently, Renewable Select is available anywhere in the U.S. where there is a competitive electricity market. Clemmons says NRG has the ability to be a third-party seller where electricity is still regulated, but that can be a more difficult as such deals need to go through the existing utilities.

Looking ahead to the next 18 months, Clemmons predicts that the approach offered by Renewable Select will generate a significant amount of business.

“We’ve had such a tremendous level of interest,” Clemmons says. “Now we’re focused on making sure that what we provide is exactly what customers need, and that the agreements with developers match up to that.”

Image: Unsplash/Tim Foster

Royal Dutch Shell set the Intertubes abuzz last week when it became the first global company to propose linking executive pay to new carbon emissions targets. That made for some good headlines, but what really makes the announcement significant is the role of company's institutional investors.

Investor activism was the force motivating Shell to take this groundbreaking step. Now the question is whether or not the new policy will achieve tangible results -- if and when it goes into force.

Shell links executive pay to carbon emissions...maybe

To be clear, Shell's executive pay announcement is a proposal, not a done-and-done policy. It won't become official until a shareholder vote at the company's Annual General Meeting in 2020.

Even if it is approved, the new policy may not necessarily provide significant motivation for executives to push the envelope on carbon emissions.

As it exists now, the proposal is still simply a pledge to include an undefined "Net Carbon Footprint-related measure" into a package of other performance measures. The specifics have yet to be nailed down, and that could be a problem.

The 2020 meeting date leaves plenty of time to negotiate the performance package into a platform that lacks any significant motivation to reduce Shell's carbon footprint.

For example, the "other measures" included in the performance metrics could be weighted to counterbalance any significant negative impact on pay, should executives fail to meet the company's carbon emissions goals.

Institutional investors take action

That's the worst case scenario. The good news is that Shell has already outlined an "energy transition" strategy to sustain itself as the world moves to a low carbon economy. Partnering with its institutional investors, instead of fighting them, is part of that strategy.

In a press release announcing the new proposal, Shell forthrightly states that the new executive pay policy is the direct result of "engagements with shareholders and other relevant stakeholders." The company also expects to stay engaged with shareholders as details of the proposal are worked out:

The final plan design is being discussed with shareholders, including details relating to the appropriate remuneration structure and appropriate measures and metrics.

The institutional investors behind the new policy are not hard to find. The Shell announcement was expressed in a joint press release with the organization Climate Action 100+. Under the CA100+ umbrella, Robeco and the Church of England Pensions Board spearheaded the engagement process. Other CA100 members involved in the process were Eumedion, the European Institutional Investors Group on Climate Change, APG (acting for ABP), the Environment Agency Pension Fund and the Universities Superannuation Scheme.

As for whether or not the executive pay plan will have any real teeth, this statement from the Church of England pensions board makes it clear that CA 100+ expects to play a hands-on role:

“Investors like ourselves will be able to track Shell’s performance through the Transition Pathway Initiative (TPI), an independent academic tool at the London School of Economics which is supported by funds with $11 trillion in assets..."

Climate Action 100+

Climate Action 100 demonstrates how institutional investors are assimilating the central message of green investor groups like Ceres: human induced climate change is creating new risks now, it is a significant future risk -- and investors need to act aggressively when corporate leaders fail to plan for the long term.

In a press statement, Ceres CEO and President Mindy Lubber, who co-chairs the CA100+ global steering committee, emphasized that the Shell agreement is just the beginning of a broader effort:

“The Shell agreement is an important step in the right direction as it ties executive compensation to the company’s efforts to reduce greenhouse gas emissions, including emissions related to product use. This commitment demonstrates the power of collective global investor engagement. Climate Action 100+ investors will now use the commitment to raise the bar for the oil and gas industry as a whole.”

Moving the climate emissions needle on an entire industry is an ambitious undertaking, and CA100+ has an additional tool in its toolkit.

Rather than focusing narrowly on Shell's carbon emissions, CA100+ has also enlisted the company to throw its weight against trade and lobbying organizations that are not in accord with investor goals on carbon emissions. Here's the Church of England again:

“Shell have also made important commitments to review the corporate climate lobbying of trade associations in line with the investor expectations we had developed with Sweden’s AP7 and the Institutional Investors Group on Climate Change. The review will be published early next year and Shell should be applauded for this step.”

If that review sparks a shift in corporate lobbying dollars, it is all but certain to have an impact on the willingness of government agencies to set goals and accelerate change.

Shell itself has a notorious track record in that regard. Last year evidence emerged that the company was well aware of the need for strong action on climate change and the role of natural gas in greenhouse gas emissions decades ago. Nevertheless, according to a 2015 report in The Guardian, Shell was instrumental in weakening the 2014 EU targets for renewable energy and energy efficiency.

Initial talks involved the idea of binding targets, but that was watered down by the time the final deal was announced.

The Guardian article ran under the headline "Shell lobbied to undermine EU renewables targets, documents reveal" with the subheading "Weak renewable energy goals for 2030 originated with Shell pitch for gas as a key technology for Europe to cut its carbon emissions in an affordable way."

According to The Guardian, Shell lobbyists made their pitch for natural gas as early as 2011. As a result, binding targets for renewable energy and energy efficiency did not make it into the final EU agreement. Here's the key passage:

At the 2014 meeting, heads of government agreed a 40% overall target for the bloc’s emissions cuts, but in the run-up to the deal there had been disagreement between member states about how best to achieve that.

The UK and others had resisted binding targets for individual member states on energy efficiency and renewable energy and these did not make it into the final agreement. Proponents of renewable energy say this was a key missed opportunity to give a strong signal to investors that the EU was serious about clean energy.

Yes, what about natural gas?

That bit about natural gas should send up some red flags. In the recent past, natural gas was touted as a "bridge fuel" to a low carbon economy, with the expectation that transitioning from coal and petroleum to natural gas would help curb overall carbon emissions.

However, this scenario is proving to be a false hope. Methane, the primary ingredient of natural gas, is a powerful climate change agent. Natural gas does burn "cleaner" than coal and oil, but a growing body of evidence indicates that methane leakage throughout the natural gas supply chain is playing a role in global greenhouse gas emissions.

It remains to be seen to what extent Shell will continue to lean on natural gas as it diversifies into a more sustainable portfolio. The company's new "Sky" scenario describes pathways for decarbonizing the global economy through electrification, but that includes at least a nominal role for natural gas through 2070.

In the meantime, Shell has a long way to go if it is serious about recasting its image. The company's web page for its U.S. business emphasizes a continued focus on fossil fuels, and its online media gallery directs journalists to a group of flickr.com accounts populated almost exclusively by fossil projects. The lone exception is a small album on biofuels.

Shell is beginning to ramp up its renewable energy portfolio, though. Here in the US, the company's investment in wind power has yet to scale up to the gigawatt level, but one recent development with significant implications for solar power is Shell's acquisition of the Tennessee-based solar developer Silicon Ranch.

Another pair of U.S. acquisitions involves the microgrid and net zero buildings specialist GI Energy and the energy storage company Axiom. Technically speaking, Axiom's technology is a source neutral load-shifting solution (it is aimed at reducing refrigeration costs), but the decarbonization angle will grow will factor in as more clean energy enters the grid.

Image credit: Roy Luck/Flickr.

Large companies have the power and reach to touch the lives of the people they serve. The company’s employees, associates and partners can strive to make communities stronger by giving their time and resources to support causes and organizations.

On that point, Allstate recently issued its latest Sustainability Report, which highlights the company’s achievements in various areas, including its efforts to build strong communities. According to the company, Allstate employees and agents can use its various community platforms to support people in times of need and empower communities and nonprofits that serve them.

Local Involvement

Allstate says it is committed to leading from the front in local communities. The company’s philanthropic efforts and charitable grants, insists the writers of this report, help foster a culture of caring. Allstate and its foundation’s community programs are touted as offering employees, agents and financial specialists the opportunities to give back and work with organizations that address causes that are close to their heart.

The company claims it also empowers agency owners by providing rewarding opportunities to own a small business, while extending them professional support to enable them succeed as trusted neighborhood leaders.

Philanthropic Support

During 2017, Allstate reportedly distributed more than $41 million to communities. These funds are aimed at supporting strategic initiatives such as the Allstate Officer Nonprofit Board Program and the Helping Hands employee volunteer program.

In 2017, the company’s employees and agency owners and staff together raised $7.3 million as part of the Allstate Giving Campaign. For every dollar donated, the company says it was matched with $0.15 donation and contributed an additional five cents to local United Way organizations. The 2017 Giving Campaign donations were distributed to over 8,000 nonprofits across the country.

Volunteerism

The report also reviews Allstate’s Helping Hands volunteer program, which involves an employee network of 114 committees. Allstate says that local volunteer leaders work with co-workers and community partners to find meaningful opportunities to give back. In 2017, the company’s employees and agency owners reported 258,800 hours of community service.

Allstate also insists that the company helps position agency owners as local leaders and provides programs and resources to enable them engage with communities around empowering youth, financially empowering survivors of domestic violence, volunteerism, disaster preparedness and safe driving.

Allstate concluded that during 2017, more than 8,000 agency owners leveraged local presence programming, and reported a 72 percent satisfaction rate with the effectiveness of the tools, resources and programs provided by the company.

Strengthening the Nonprofit Community

Allstate also explains in this report that not only does the company support its nonprofit partners in the community financially, but also lends expertise and creativity. The company believes that giving time and talent is as impactful as donating money, with the result that it helps create opportunities for employees to foster deeper connections within local neighborhoods.

Through the Allstate Officer Nonprofit Board Program, the company says it supports various officers join the boards of nonprofits that are engaged in work that advances the company’s social impact areas. In 2017, 78 officers from the company served on the boards of 96 organizations.

Furthermore, Allstate officers personally support these organizations with their skills, expertise, time and charitable giving. In addition, the company says it diverts part of its philanthropic funds to these various nonprofits and community foundations.

“We believe sustainable businesses create profits, provide meaningful work for employees and are a force for good in their local communities,” said Tom Wilson, Allstate’s Chairman, President and CEO in his letter to stakeholder. “These responsibilities, embedded in Our Shared Purpose, serve as guideposts throughout the organization,” he said.

Image credit: Allstate