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At a time when environmental, social, and governance (ESG) investing seems to be making major strides, skepticism about whether sustainable or socially responsible investing will soon be —or ever be—mainstream still persists.

One of those skeptics (or realists, as he might argue) is David Blitzer, managing director and the chairman of the index committee at S&P Dow Jones Indices. As he told Quartz recently, even though new stock indexes are being created, like the MSCI World ESG Leaders Index and the Equileap Global Gender Equality Index, which take ESG into account, ““I think it will take a long time before the official benchmark will get completely adjusted.”

It’s true that ESG investing isn’t about to replace traditional investing. Significant obstacles do remain, such as a lack of agreement about the best approach and an absence of international standards or rules governing sustainable investing.

No denying the momentum

But the momentum for ESG disclosure and investment has arguably never been higher. As TriplePundit reported last week, a major new responsible investing survey found resistance to ESG, particularly in the U.S., is falling away. One in four U.S. investors now say that an ESG integrated portfolio will outperform a non-ESG portfolio, five times the number who agreed in 2017.

Among the optimists are traditional firms such as State Street Global Advisors, BlackRock, Inc. and Putnam Investments. Chris McKnett, head ESG strategist at State Street Global Advisors, told InvestmentNews, “ESG is rooted in improving the investment outcome, rather than some other goal which may not be investment-oriented, and that's where we're seeing some convergence."

Make way for the millennial investor

While some of the old guard may be slowly changing their views on ESG investing, they may soon have to make way for the strong interest in ESG being shown by women investors, particularly millennials. Younger generations are driving the fast growth of the “green bond” market and the field of sustainable finance in general.

According to the Robb Report, estimates from the impact investing firm Swell Investing show that these women investors have the potential to add as much as $22 trillion to investments in conscious capitalism. That would greatly increase the existing pool of nearly $9 trillion.

The proof is in the numbers. Statistics show that investments that factor in ESG deliver profits and long-term liability. The MSCI KLD 400 Social Index, a capitalization-weighted index of 400 U.S. securities that provides exposure to companies with outstanding ESG, reports that its annualized returns (over a 20-year period ending January 31, 2018) were 5.46 percent, slightly better than the S&P 500’s 5.43 percent over the same period.

As Jessica Huang, director of sustainable investing at BlackRock in San Francisco, told Robb Report, “Eventually, it won’t be called sustainable investing. It will just be called investing, with ESG as a material driver of risk and returns.”

Not just for tree-huggers

Huang pointed out that the proliferation of data on how a company’s activities have an impact on ESG is making it easier for investors to continuously incorporate these factors into their overall assessments. That includes, for instance, the ability to evaluate a company’s entire carbon footprint by extending the emissions calculations to their supply chain and their products. The mounting data related to environmental and social impacts is being measured right alongside such traditional measures as cash flow and earnings on the balance sheet, exposing risks and opportunities.  

Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Merrill Lynch, is another proponent who sees the ESG train picking up steam. As she told Robb Report, “It’s not just for tree-huggers….An investor who only held stocks with above-average ranks on both environmental and social scores would have avoided 15 of the 17 bankruptcies we have seen since 2008.”

Trends bear out optimism

A number of trends bear out the case for optimism that sustainable investing may enter the mainstream faster than expected. Good governance remains a systemically important trend, increasingly a goal for regulators and for fixed income and equity investors through active ownership. ESG considerations have driven new regulations in a growing list of countries, which is tangibly affecting credit fundamentals. Global supply chains pose growing risks if poorly managed, and investors may be quick to penalize companies for human rights issues, environmental impact and other ESG considerations.

And not least, the urgent need for action around climate change, underscored by the recent sobering UN report on climate change, is not only a wake-up call for CEOs but is driving sustainable investment portfolios and more disclosure of climate-related financial risks.

The ESG revolution may have been quietly taking place over the past decade, but now it’s making some real noise. Those financial institutions not yet compelled into action may soon be pushed into it.

In fact, earlier this year, the United Kingdom’s pension fund association encouraged its members to vote against the chair of a company if they feel the company is not doing enough to ensure its business model is compatible with efforts to limit global temperature increases.  

That kind of activism may be as much a driver of change in how companies disclose—and how investors account for—ESG as anything else.

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

The U.S. Department of Energy estimates that 25%-30% of energy wasted in the home is due to inefficient windows. So clearly, when buying a new home or upgrading your current home, selecting the ideal set of windows is an important part of the decision.

But what’s the right window for your home? “It depends,” says Paul DeJesus, a LEED-accredited architect and principal at Paul Chris Design, a design-build firm working in the San Francisco area. “What works best for your needs will vary depending on several factors like the local climate, the orientation of the house, and of course your budget,” he says.

Also consider that windows must serve multiple functions – controlling heat transfer between the inside and outside of the home, blocking harmful aspects of the sun’s rays while letting in daylight, reducing exterior noise, and allowing air ventilation.

Make sure to “balance” all these factors when evaluating windows, advises DeJesus. And because windows are highly technical products these days, it’s a good idea to become familiar with some of the basics of new window construction.

Multiple panes

High performance windows will have multiple panes of glass, two or even three for especially cold climates or noisy outside environments. The panes are separated by a vacuum or gas filled space using argon or krypton gas. The multiple panes provide more insulation to reduce heat transfer, so are “leaps and bounds more energy efficient over a single pane,” says DeJesus.  

Low-e glass

When choosing windows, often it’s the things you can't see that are most important. This is the case with windows manufactured with low emissivity (low-e) window coatings, which are microscopic layers of metallic oxides.

 

Low-e coating reflects heat back to its source, so it helps your home stay cooler in the summer and warmer in the winter. The coating also protects your home from unwanted ultraviolet rays which can fade your carpets and furniture. And because these coatings are transparent, they allow as much natural light into the house as possible.

Frames

The most common types of window frames are made from wood, vinyl, fiberglass or aluminum. These all have cost/performance trade-offs. For example, vinyl is cheaper but less durable and not as good an insulator as the others. Plus, some people don’t like the look of vinyl frames, which can affect the resale value of the home.

 

Wood frames are more aesthetically pleasing, are good insulators, but are expensive. And like any wood product exposed to the elements, will require regular maintenance. Aluminum frames are durable, but not a great insulator. Fiberglass is durable and an excellent insulator but can be pricey.

Regardless of the type of material, the best window designs will also offer a “thermal break” between the panes, says DeJesus. This is a resin or plastic material installed in the window frame that separates the interior part of the window from the exterior part to provide insulation against heat and cold conduction.

Proper sealing

Besides the various types of windows, it’s important that the windows are installed properly, says DeJesus. This means proper caulk or foam has been used to seal the space between the window frame and the adjacent wall framing to prevent heated air from escaping the home.

 

Installation won’t be an issue for a new home, but if you are replacing the windows in an existing home, “Make sure your installer is certified by the window manufacturer because this an area that sometimes gets overlooked,” says DeJesus.

Know your zone

A lot of the decision-making can be simplified by consulting the EPA’s ENERGY STAR ratings for windows. The EPA has divided the country into four climate regions – Northern, North Central, South Central, and Southern – and within each zone prescribed a set of performance measures for windows, such as U-factors and solar heat gain coefficients.

 

Don’t worry, you won’t need your calculator for this one, because the National Fenestration Rating Council has done all the work for you. The NFRC, an independent non-profit organization, tests, certifies and labels windows from all major manufacturers.

Their rating system scores windows on U-factor (how well a window resists heat loss from a room), Solar Heat Gain Coefficient (how well a window resists heat gain), Visible Transmittance (how well a window allows daylight into the room) and Air Leakage (how much air enters a room through the window).

A performance label with these scores is affixed to the window pane. Again, don’t get bogged down in the science. The NFRC website makes it easy by offering a Shopping Guide and Certified Product Directory.

Know the rules

Many city and state governments are setting energy efficiency requirements, like the California Title 24 code, for new and remodeled residential and non-residential buildings.

 

New home construction will be required to meet these standards. For home remodels, you may fail the building inspection if improvements, like window replacement, don’t meet the local codes. So, make sure you are familiar with the local green building codes.

What about films and shades?

If replacing inefficient windows is not possible, products are available to upgrade your existing windows. For example, low-e coatings can be applied as a film to windows already installed in the home. The NFRC rates the energy performance of window films and the International Window Film Association (IWFA) website offers a directory of qualified installers.

 

Window shades can also help, especially those with air pockets known as insulated cellular shades. These provide insulation much like double pane windows. The problem with shades is they cut down on daylight entering the room. However, choosing shades with lighter colors will minimize this effect, advises DeJesus.

Part of a bigger picture

Windows are just one part of the LEED ratings envelope but an important and challenging one, says DeJesus. So, consider carefully.

 

Image credit: Adobe Stock/gmcgill

The impact investing sector has been growing at a rapid pace. Investors increasingly seek opportunities to make a social and environmental difference through their investment portfolios. With $228 billion invested towards impact activities in 2017, the industry has come a long way.

Calvert Impact Capital (CIC) said it is working to build a more equitable financial system through investments in its portfolio and by sharing its expertise with investors and borrowers. The company’s 2018 Impact Report shows how CIC is striving to strengthen communities and helping improve global sustainability through its business.

Community Development

In 2017, Calvert Impact Capital provided flexible financing to support the development of 1,488 community facilities serving more than 8.5 million community members across the country. These facilities span 3.5 million sq. ft. and are worth $1.12 billion.

Affordable Housing

The borrowers using CIC’s capital helped create or preserve 32,669 affordable homes across the U.S. in 2017. The borrowers also counseled 30,669 clients on housing, preparing them for home ownership and creating more empowered and informed homeowners.

Education

Calvert claimed that it had a role in helping to finance 3,327 affordable, quality schools that enrolled 2,248,871 children in 2017. The schools operational in 2017 employed 78,283 teachers and financed a total of 15,227 new student seats.

Health

In 2017, CIC took part in financing 308 medical facilities that addressed the needs of over 5 million patients across the US and other parts of the world. These healthcare facilities provide affordable care, while at the same time, create job opportunities for trained healthcare professionals.

Microfinance

Calvert Impact Capital is investing in microfinance networks and institutions that offer innovative insurance, credit, savings, and other financial products, apart from financial education and payment platforms. CIC’s borrowers in 2017 disbursed microloans of $1,735 on average to 12 million individuals, 76 percent of which reached low-income individuals.

Small Business

CIC lends to financial intermediaries involved in financing small business owners to help them grow their businesses. The results, according to the company, helps create new jobs in local communities and generates economic opportunity. The company’s capital in 2017 helped to finance nearly 6,000 small businesses, and supported the creation or retention of over a 100,000 jobs globally.  

Environmental Sustainability

According to the company’s report, during 2017, Calvert’s borrowers recycled over 91,000 tons of waste. This helped to reduce more than 260,000 metric tons of carbon dioxide. The company’s capital also helped reduce more than six million tons of CO2 or CO2 equivalent through the deployment of renewable energy. Renewable energy products sold by the company’s borrowers will generate clean energy that is enough to power 4,475 homes for one year.

Sustainable Agriculture

Calvert Impact Capital invested in projects in 2017 that the company said had a role in connecting farmers to better economic opportunities. The company’s borrowers supported 721,864 smallholder farmers and 45 agricultural groups worldwide.

“Our industry often focuses on the outputs of impact investments as the sole indicators of success. But they are not the full picture,” said Jenn Pryce, President and CEO. “In order to achieve those outputs, and importantly, to scale them, we need a functioning market between interested investors and mission-driven asset managers,” she said.

Image credit: Calvert Impact Capital

What can a media company that owns a combined 126 television and radio stations do so that all citizens feel they have a voice in the future of the United States, even as the country continues its transformation into a far more diverse society?

Univision – the leading media company serving Hispanic America – says it is doing all it can to use its position of trust to ensure Hispanic voices in communities around the country are seen, heard and counted. According to the Spanish-language media giant, this campaign has two goals: first; celebrate this country’s cultural, economic and social diversity; second, give a voice to citizens who want assurance that they will always be heard.

Announced in May, the Rise Up: Be Seen, Be Heard, Be Counted campaign will harness the strengths of mass media, from storytelling to gaming to digital technology, to boost the Hispanic community’s impact across the U.S. as part and parcel of Univision’s social responsibility efforts. This strategy rests on three pillars:

Be Seen is Univision’s directive to catalyze opportunities for the U.S. Hispanic community. Education is one pillar of this program; a drive to boost entrepreneurs is another. There is particular focus on families, including wellness programs to boost their health and that of the  communities in which they live.

Be Heard offers a voice to the Hispanic community, in both English and Spanish, in the quest to diversify the U.S. media and technology sectors. Univision says it is offering financial support to academic programs coast to coast in a bid to develop more Latino content creators and technology professionals.

Be Counted focuses on the upcoming 2020 U.S. Census. With federal representation and dollars on the line, Univision is urging citizens to be sure they are not overlooked when it comes to the nation’s decennial population count.

According to Stephen Keppel, vice president of social impact at Univision and the executive director of Univision Foundation, this campaign reflects a longstanding commitment to empowering communities so they have the tools they need to create a brighter future for themselves and their families.

“We recognize that there are many issues impacting our diverse communities. We embrace this initiative to celebrate our communities’ cultural, economic and social diversity,” said Keppel during an interview with TriplePundit.

In order to allow these voices to be heard, Keppel explained how Univision is directing resources to help young Hispanics break into the media and technology sectors. For example, the company set up a technology center at its San Jose, California affiliate. Named the Univision Technology Center (UTEC), the state-of-the-art facility serves as a free educational space for the surrounding community.

In addition, Univision has forged a number of partnerships that serve to train, mentor and empower young journalists and media influencers. One such program at California State University, Fullerton organized a student video competition to showcase the work of young Latino journalists, who explored topics including immigrant labor rights, juvenile justice and violence against transgender immigrants.

Giving young Latinos the opportunity to amplify their voices ties in to a large component of Univision’s strategy: the dedication of resources and attention to the upcoming 2020 Census. As part of its civic participation work, the company has been raising awareness and encourage participation in the Census, as being counted is critical. Over 130 federal programs and almost $700 billion federal dollars are at stake.

Furthermore, the 2020 Census will determine the future of Congress and how much representation communities will have in presidential and midterm elections. “As such, recognizing the power of the Census and the challenges surrounded getting an accurate account, this effort is top of mind,” said Keppel. “We are also investing in efforts and partnerships that best position our diverse Hispanic communities for the future.”

But Univision believes it cannot push these necessary changes on its own, which is why it is asking for allies. “Our audience is part of the young and rising mainstream of America but still they are often not given the attention they deserve, whether it is by corporations or political parties,” explained Keppel.

Univision’s goal is not about speaking for this audience as the company insists it wants to lift these communities’ voices and help make them heard at a national level. “Our voting and census initiatives are designed to help the Hispanic community engage with the political process and literally be counted,” said Keppel as he wrapped up his talk with 3p.  “Promoting civic participation is a great way to engage the Hispanic community, and we would love to encourage other companies, foundations and partners to join with us in this effort.”

A full article about Univision's work will appear in the next edition of CR Magazine.

Jessica Herrera-Flanigan Executive Vice President of Government & Corporate Affairs at Univision Communications, will speak at a town hall on October 25 during 3BL Forum: Brands Taking Stands - The Long View.

During this town hall, "Brands Taking Stands: A Moment or A Movement?" sponsored by MSL, she'll join journalists and senior corporate leaders as they discuss this fundamental question: is employee, corporate, investor and athlete activism simply a reaction to the current political climate; or are we in the middle of a transformative moment that will forever change how companies are expected to respond when it comes to difficult social and political issues?

Receive a 25% discount using this code PUNDIT2018VIP when you register here.

Image credit: Lorie Shaull/Wiki Commons

This article series is underwritten by Symantec and went through our normal editorial review process. 

The frequency and intensity of data breaches are on the rise worldwide. More than 4.5 billion records were compromised in the first half of 2018, a 133 percent increase over last year, according to Gemalto’s Breach Level Index. Numbers like these make consumers understandably wary of sharing their personal information with companies, and they also represent a significant risk for the world’s top firms.

The average cost of a data breach globally is $3.86 million, according to a 2018 study conducted by Ponemon Institute on behalf of IBM. But so-called “mega breaches,” in which more than 1 million records are compromised, can cost companies far more. The high-profile Equifax breach—which exposed the personal data of nearly 150 million U.S., U.K. and Canadian consumers—could reportedly cost the company up to $275 million. In its 2016 financial report, Target estimated $292 million in losses as a result of a 2013 data breach that affected roughly 110 million people.

As each of these stories unfold, the public becomes more aware of the breadth of information companies are collecting about them and grows more skeptical that those companies can keep their data secure. Over half of global Internet users are more concerned about their online privacy now than they were a year ago, according to a 2018 survey from the nonprofit think tank Centre for International Governance Innovation (CIGI). Only 9 percent of Americans believe they have “a lot of control” over the information that is collected about them, according to another survey conducted by the Pew Research Center, even as the vast majority feel it’s “very important” to be in control of who can access their personal data.

If social, financial and reputational incentive isn’t enough to stir companies to action, an increasingly robust regulatory landscape may force their hand. Most notably, the European Union’s General Data Protection Regulation (GDPR) became enforceable earlier this year. The GDPR is the world’s most stringent data protection standard to date, and it applies to all companies that serve European citizens—whether the company is based in Europe or not.

For years, privacy advocates called on U.S. lawmakers to implement similar measures to protect user privacy. Though the federal government has yet to pass a GDPR-like mechanism to protect all users’ personal information, new state-level protections carry broad-sweeping implications for U.S. firms.

California leads the way on U.S. data privacy protections

Fittingly, the state that pioneered the technology revolution is now among the first to mandate enhanced consumer data protections. Gov. Jerry Brown signed the California Consumer Privacy Act of 2018 into law in June, which many say will create “the most stringent data protection regime” in the U.S. when it becomes enforceable in 2020.

The legislation will replace a ballot initiative that called for even stricter rules on companies. But sponsoring advocacy organizations like the nonprofit Common Sense and its media arm, Common Sense Media, say it’s a concrete step forward when it comes to safeguarding user  privacy and setting an example for the rest of the country.

“We sponsored the Consumer Privacy Act because we think it's a good first step toward protecting Californians' privacy and giving them control over all of their personal information,” said Ariel Fox Johnson, senior counsel on policy and privacy for Common Sense Media.

Specifically, the California law guarantees users’ right to know what data is being collected about them—and why—and allows them to opt out of the sale of their data to third parties. Children under 16, or their legal guardians, must opt in to consent to their data being sold. “Consumers in California will get more information, so they'll have better awareness of what information is collected,” Fox Johnson told us.

Additionally, the law gives consumers the right to access and download their stored data, transfer it to a competing service, or even delete it, with some exceptions. It also forbids companies to treat customers differently based on whether or not they agree to have their data sold, and consumers are afforded the right to sue in the case of a data breach—in addition to fines levied by the state’s attorney general if a company is found noncompliant. “The key changes are better awareness and transparency, new rights to access ports and delete information and the right to say no—or, if you're under 16, to opt in for the sale of information,” Fox Johnson explained.

Privacy laws take hold in states across the country

Over the past year, at least 11 additional states introduced new data protection standards or strengthened existing privacy policies, according to the global law firm Norton Rose Fulbright.

In May, Vermont passed the nation’s first law regulating data brokers—essentially companies that collect user data and sell it to third parties, such as advertisers. The law requires data brokers to register with the state and disclose whether users can opt out of the collection, retention and sale of their data. These companies must also ensure their data security protections are up to date and tell the state if a breach occurs.

Both Alabama and South Dakota enacted their first data breach notification laws this year—which require businesses to notify consumers if their personal information is compromised. With those new regulations on the books, all 50 U.S. states, as well as the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands, have now enacted some form of a data breach notification standard, according to Norton Rose Fulbright.

Additionally, states like Oregon, Colorado, Arizona and Virginia expanded their definitions of personal information and increased oversight on third parties. Others, including New Jersey and Rhode Island, are looking to go even further with sweeping privacy standards that mirror California’s. Fox Johnson expects this trend to continue as rising consumer awareness pushes lawmakers off the sidelines. “People are starting to understand more and more the various ways that companies can use and misuse individuals' data, so I expect that we will see more privacy laws on the horizon,” she told 3p, adding that many state lawmakers are “looking to California as a model.”

What this means for U.S. companies

Virtually every major American company does business in California. Complying with the new law will require these firms to either change how they collect and handle all user data, or figure out a way to manage Californians’ data differently from everyone else’s. “That last option can be more expensive for companies, and could disgruntle non-Californian customers should they be given fewer data privacy options,” Dipayan Ghosh, a fellow at New America and Harvard University’s John F. Kennedy School of Government, wrote in the Harvard Business Review.

With similar standards in the legislative pipeline across the country, companies would be wise to forgo a pathwork solution in favor of meaningful reforms that protect user privacy and work to rebuild consumer trust. “As a consumer advocate, I think companies should always do what they can to protect user privacy, whether or not they're required to do so by law,” Fox Johnson said. “And as consumers are growing more aware of privacy risks and more concerned about privacy, businesses are seeing a value-add in doing the right thing.”

Indeed, more than 60 percent of business leaders whose companies were early adopters of the GDPR say they’re embracing the European regulation as a business opportunity rather than an impediment, according to another IBM survey. Thirteen members of the Forbes Technology Council, a community for senior-level technology executives, offered similar feedback about the California regulation.

“After endless creepy pop-up ads, consumers are savvier and more suspicious than ever,” Elizabeth Duke, EVP and chief marketing officer for the facilities management software company iOffice, told Forbes in August. “Now that the genie is out of the bottle, we expect these laws to get tighter and more consumer-focused. However, it may take local legislatures, which are less tech-focused than California, more time to pass new laws.”

Image credit: Rob Hampson via Unsplash

Brazil’s presidential election on October 28 could prove damaging for the Amazon - and global companies’ commitments to ensure sustainable supply chains - as the far-right presidential candidate’s rhetoric suggests he could reverse years of progress protecting the vulnerable, but extraordinarily important, rainforests.

Deemed the “Trump of the Tropics” by Brazilian journalists, candidate Jair Bolsonaro has pledged his administration would scrap the ministry of environment, open indigenous territories to mining, relax environmental law enforcement and licensing and ban international NGOs from the country. He has also said Brazil would follow in the United States’ footsteps and withdraw from the Paris Agreement.

Edson Duarte, Brazil’s environment minister, warned a Brazilian newspaper that Bolsonaro’s presidency would embolden a wave of illegal miners to purge rainforests without fearing consequences.

“The increase of deforestation will be immediate,” Duarte told O Estado de S.Paulo. “I am afraid of a gold rush to see who arrives first. They will know that, if they occupy illegally, the authorities will be complacent and will grant concordance. They will be certain that nobody will bother them.”

Regulations that become far more lax would be devastating for indigenous peoples living in the Amazon. Brazilian indigenous communities would not only be powerless to watch as miners and loggers exploit their land, but they would also risk extinction because of the threat of disease.

Meanwhile, the political polarization in Brazil would also make it even more difficult for companies that source raw materials from Latin America’s largest economy. “In good times, Brazil’s operating environment presents unique supply chain challenges,” concluded a BCG study last year. “As the country continues to grapple with an ailing economy and political turbulence, these challenges are even more daunting.”

Bolsonaro, who served in the army from 1971 to 1988 during Brazil’s military dictatorship, defended the regime’s initiatives to build roads and hydroelectric dams in the rainforest despite displacing and killing thousands of indigenous Brazilians along the way. He has promised “not to give the Indians another inch of land.”

That attitude is in sharp contrast to what NGOs such as the Environmental Defense Fund (EDF) advocate. EDF, for example, has advised companies to seek cooperation, not confrontation, when dealing with Brazil’s indigenous populations.

Beyond disregarding the Brazilian constitution by disrupting indigenous peoples’ property, Bolsonaro’s complicity would also have wider-reaching environmental consequences. Only 2 percent of the Amazon’s deforestation occurs inside the roughly 13 percent of indigenous lands. Non-indigenous lands are deforested and exploited substantially more than the indigenous lands currently protected by the government.

Bolsonaro’s election would only accelerate the increasing trends of deforestation in Brazil. From 2005 to 2015, Brazil made strong advances toward limiting deforestation in the Amazon, enacting new policies that enforce environmental regulations, funding environmental government agencies and welcoming international NGOs. The improvements were not long lasting, however, as deforestation has skyrocketed in the last couple of years thanks to law changes and budget cuts to the same environmental and indigenous agencies that slowed down deforestation a decade prior.

In March, Brazil’s Supreme Court accepted revisions to deforestation laws, effectively granting billions in amnesty to those found guilty of illegally deforesting. The Forest Code, as environmentalists call it, “awards the guy who deforested” and “invites deforestation,” Nurit Bensusan, policy coordinator at a Brazilian NGO, Instituto Socioambiental, told the Guardian.

The ministry of environment and the federal science budgets were cut 43 percent and 44 percent, respectively, amid a paralyzing economic recession in Brazil. The budgets may also have been a reflection of agribusiness lobby groups’ growing voice in the Brazilian government.

Of the 513 members in the Brazilian Chamber of Deputies, 249 received $18.3 million in official donations during the 2014 election from companies and people who have committed environmental crimes.

The meatpacking industry, key players in the Amazon’s degradation, also played a role in the 2014 elections. JBS, the world’s largest meat producer and major influencer in Brazilian politics, donated a record $108.6 million to finance campaigns. Notably, JBS was rocked by the “Cold Meat” scandal in March, when a three-year probe from Brazil’s environmental agency discovered the meat titan bought 59,000 cows ranched in areas illegally deforested.

If elected, Bolsonaro would continue down the path of his predecessor President Michel Temer. The current president has been accused of being cozy to the powerful beef caucus in Brazil’s lower chamber. Temer appointed one of its members to the minister of justice, halted indigenous land demarcations and agreed to reverse license requirements in large agricultural areas so meat giants could strip the Amazon for pasture. Temer currently has an approval rating of as low as 4 percent in some polls.   

The stakes to save the Amazon from further deforestation are extremely high. Studies suggest the Amazon, nearly twice the size of India, absorbs an estimated 2 billion metric tons of carbon dioxide per year.

The United Nations released a harrowing report, coincidentally the same day as Brazil’s October 7 general election, warning of an irreversible 1.5 degrees Celsius increase by 2030-2052 if drastic measures are not taken to prevent further climate change. A crucial way to minimize harm and slow down that timeline is to preserve the Amazon, one of the world’s largest absorbers of carbon.

Bolsonaro nearly captured the presidency outright during the first-round election, winning 46 percent of the vote - five points away from the majority. He holds a commanding lead over left-leaning Fernando Haddad, who gained 29 percent of the vote on October 7.

This year’s presidential election has been far from normal. Bolsonaro spent the last month of his candidacy in the hospital after being stabbed at a campaign rally. Despite being bed-ridden by an infection, he has maintained his strong lead in the polls, and even received a boost after the assassination attempt.

Haddad, on the other hand, is a fresh face on the campaign trail who just announced his candidacy a month prior to the October 7 general election. Leftist candidate Luiz Inacio “Lulu” da Silva, the widely popular politician and former president of Brazil, was campaigning from a jail cell for months while he awaited the verdict of a 10-year corruption charge for accepting bribes from construction companies. The charge was upheld - and extended to 12 years - and effectively ended his campaign. Lulu hand-picked Haddad to run instead. The campaign’s strategy has done its best to link the two, saying a vote for Haddad is a vote for Lulu. At any political rally for the left, you can hear swarms of people chanting “Haddad is Lulu, Lulu is Haddad.”

Lulu’s corruption charges merely scratch the surface in Brazil, a country that has been no stranger to politicians accused, convicted and impeached from office due to accusations, and then being found guilty, of corruption. The latest marquee corruption scandal in Brazil began to unravel in 2014, when “Operation Car Wash” found that executives at the state oil company Petrobas had accepted bribes from construction companies in exchange for rewarding large contracts. The investigation has led to the arrests of more than 150 people.  

The country’s corruption record, the alarmingly high crime rates, the slow economy and the failure of its neighboring Venezuela has all created a political landscape for Bolsonaro to thrive - and if elected, his policies could create countless headaches for companies that have pledged to ensure the most responsible and sustainable supply chains possible in the coming years - yet rely on Brazil for raw materials and ingredients such as soy, coffee, beef and even sugarcane-based ethanol.

Impacts on business aside, the impact on Brazilian society cannot be downplayed. Anthony Pereira, the director of Brazil Institute at King’s College London, may have stated it best in Time’s article titled “Jair Bolsonaro Loves Trump, Hates Gay People and Admires Autocrats. He could be Brazil’s Next President.”

“This is probably one of the biggest tests Brazil’s democracy has faced,” wrote Pereira.

Multinationals' promises of supply chain transparency and sustainability will be tested, too.

Image credits: Senado Federal/Flickr; CIAT/Flickr

Water scarcity affects around 700 million people, and nearly half of the global population experience such scarcity for at least one month each year. These startling figures will only increase as population growth, pollution and climate change continue to put stress on global water supplies. By 2025, an estimated 1.8 billion people will live in countries or regions with absolute water scarcity, according to the United Nations Educational, Scientific and Cultural Organization (UNESCO).

As communities face greater scarcity, the global food sector uses 70 percent of the world’s freshwater supply—meaning food and beverage companies have a significant role to play in protecting water quality and quantity for generations to come.

To that end, Ceres and the World Wildlife Fund (WWF) developed a multi-stakeholder initiative to help food and beverage companies advance their sustainable sourcing policies to protect the global water supply. Through the AgWater Challenge, the sustainability nonprofit and international NGO work with food and beverage giants to analyze water issues within their supply chains and create sourcing commitments to better manage water risk.  

Seven companies representing more than $123 billion in annual net revenue were the first to join the challenge back in 2016. These corporate partners agreed to time-bound targets to reduce the water impact of their ingredients, implement on-the-ground strategies in supplier regions experiencing water scarcity, and help supplier farmers increase water stewardship.

Over the past two years, participating companies like Diageo, General Mills and Danone North America have made over 25 commitments related to strengthening water stewardship in their agriculture supply chains. And, as of this week, two more leading companies will join their ranks.

Retail giant Target and Archer Daniels Midland (ADM), one of the world’s largest agricultural processors and food ingredient providers, officially joined the AgWater Challenge during the Financial Times Water Summit in London on Wednesday.

By adding a global food processing conglomerate and a major food retailer operating in every U.S. state, the AgWater Challenge significantly increases the acreage farmed with water stewardship in mind, Ceres and WWF said. “With more of the food value chain represented in the AgWater Challenge, participating companies can now better leverage, scale and build meaningful projects in the places that need it most,” Lindsay Bass, manager of corporate water stewardship for WWF, said in a statement.

As the first retailer to join the challenge, Target pledged to promote sustainable water management in California as an active member of the California Water Action Collaborative.  It will also join with other companies to back public policies that advance resilient water solutions through Ceres’ Connect the Drops campaign. And it’s working with Practical Farmers of Iowa and Sustainable Food Lab to develop a market solution for climate and water protection in the Corn Belt.

“These new commitments align with our goals of creating healthy ecosystems and improving sustainable water management,” Jennifer Silberman, vice president of corporate responsibility for Target, said in a statement. In the future, the company will look to go even further by implementing time-bound targets to improve soil health across corn and soy acres and reduce agricultural runoff in the Mississippi River Basin.

ADM, the first agricultural products company to join the challenge, manages a massive supply chain that stretches around the world. Its global value chain includes 500 crop procurement locations and 270 ingredient manufacturing plants—meaning its potential impact is equally immense. As part of its commitment to the challenge, ADM will incentivize participation in Illinois’ Saving Tomorrow’s Agriculture Resources (STAR), a farmer certification program focused on soil health. It will also work with growers to increase supplier acres using cover crops and alternative tilling practices by 25 percent each by 2022, among other pledges.

“At ADM, sustainable practices and a focus on environmental responsibility aren’t separate from our primary business: They are integral to the work we do every day to serve customers and create value for shareholders,” Alison Taylor, ADM’s chief sustainability officer, said in a statement. “Everything we do starts with growers, and participating in the AgWater Challenge presents us with a great opportunity to influence growing practices and make a tangible difference in water conservation practices for years to come.”

All challenge participants commit to be transparent about the progress toward their targets and communicate the positive impacts they’ve made in freshwater basins, Ceres and WWF said. “As human demand for water grows—particularly for agriculture—the pressures on critical freshwater ecosystems also grow,” said Bass of WWF. “When companies like Target and ADM embrace water stewardship across their agricultural supply chains, they set the stage for others to follow.”

Other participants include beverage giant PepsiCo, packaged food purveyors Kellogg and Hormel, and food and personal care company Hain Celestial Group.

Image credit: Nonki Azariah via Unsplash

Top U.S. companies have been taking concrete action on climate change, gun control, police violence and other key national issues. As horrific details about the murder of journalist Jamal Khashoggi emerge, more American companies are now raising the CSR bar to respond to an international outrage -- with a boycott.

The question is, will this boycott work? And what will success look like?

When boycotts work

Triple Pundit has been following boycott issues since the #grabyourwallet campaign launched in the run-up to the 2016 presidential election, and two patterns have clearly emerged.

 

One is that consumer boycotts are notoriously ineffective and difficult to sustain, unless the target is a company that is already suffering reputational issues.

The other is that business-to-business boycotts have a very good chance of succeeding, in that they highlight CSR issues that force the target to change its behavior.

The business-to-business factor is clearly at work in the Khashoggi case.

Media companies were among the first to drop out. By October, 13, CNN was reporting that "most of the news outlets that had agreed to sponsor a high-profile business conference in Saudi Arabia have now pulled out," and the sponsor list was scrubbed from the conference website.

That doesn't mean the conference will suffer a news blackout -- Bloomberg, for example, will still cover the event. However, Bloomberg has dropped its "media partner" status (CNN also notes that Bloomberg has no comment on the status of its recent deal for an Arabic-language news network).

Several top U.S. journalists will also no longer participate in the conference, including New York Times columnist and CNBC anchor Andrew Ross Sorkin, Economist editor-in-chief Zanny Minton Beddoes and Los Angeles Times owner Patrick Soon-Shiong have also canceled plans to speak.

CNN has compiled a running list of other businesses that are ditching the conference in response to the Khashoggi murder. The latest update comes under the headline, "Business is boycotting Saudi Arabia's big conference. Here's who's still going."

It's unclear if some of those on the not-going list will provide a lower level of representation at the conference, but there will be no high level presence from key several players.

That includes U.S. businesses JPMorgan Chase CEO Jamie Dimon, Ford Executive Chairman Bill Ford, Uber CEO Dara Khosrowshahi, Blackstone CEO Stephen Schwarzman, BlackRock CEO Larry Fink, MasterCard CEO Ajay Banga and Google Cloud CEO Diane Greene.

In addition, CNN reports that the chief executives of three top European bankers have pulled out (HSBC, Credit Suisse and Standard Chartered), as well as the heads of the IMF and the London Stock Exchange.

The Jamal Khashoggi murder

For those of you new to the topic, Jamal Khashoggi was a Saudi Arabian citizen, U.S. resident and columnist for The Washington Post. He left his home country after his situation as an activist and journalist became unsafe. He was critical of Saudi Arabia’s powerful Crown Prince and First Deputy Prime Minister Mohammed bin Salman.

 

Two weeks ago, Khashoggi entered the Saudi consulate in Istanbul, Turkey, and never emerged.

Saudi officials at first denied knowledge of his whereabouts, but they have been forced to revise their story as evidence grows that Khashoggi was tortured, murdered and cut into pieces within the consulate.

The Saudi government is reportedly preparing to describe the murder as an unsanctioned, “rogue” operation.

A high profile CSR opportunity for U.S. and global leaders

Other repressive regimes have been linked to the murder of journalists, so it's fair to ask why this one has sparked such an extreme outburst of condemnation.

 

Aside from the particularly revolting circumstances of the Khashoggi case, one circumstantial factor has provided the business community with a clear and immediate way to broadcast outrage: Saudi Arabia's Future Investment Initiative, a high level conference dubbed "Davos in the Desert," to be held later this month in Riyadh.

Here's the pitch from FII (break added for readability):

Hosted under the leadership of HRH Prince Mohammad bin Salman bin Abdulaziz Al-Saud, Crown Prince, Chairman of the Council for Economic and Development Affairs and Chairman of the Public Investment Fund (PIF), the second-annual Future Investment Initiative (FII) will serve as a platform to drive expert-led debate, discussion, and partnerships among the world’s most visionary and influential leaders in business, government, and civil society.

FII will continue to shape the future of global investment through an immersive three-day program featuring interactive conversations with global leaders, private meetings, curated roundtables, world-class entertainment, unparalleled CEO networking, and deep engagement with global media.

Well, that was then.

Will this boycott work?

With the media spotlight on Saudi Arabia now turned up to an 11 on a scale of 10, it's little wonder that top U.S. business leaders, and others around the world, do not want their names attached to the Saudi vision for the future of global investment.

 

However, until something more concrete takes shape -- a divestment movement, for example -- it's difficult to see how boycotting one financial conference will have any long term impact on Saudi stakeholders.

That's even more likely if you flip the common wisdom on the Khashoggi case. The accepted wisdom is that the Saudi government is directly responsible for the murder and that it was deliberately planned, including plans for covering up the crime and enabling the murderers to escape from Turkey.

Considering how many damning details have quickly leaked out, it's beginning to look more like there was no real intention to cover up the murder from the beginning. It was intended to send a message to the world, in advance of the conference.

The message is a simple one: We are very powerful and we can get away with anything, even murder.

If that sounds familiar, you may be thinking of a statement that then-candidate Donald Trump made in January 23, 2016, as the primary election season was heating up:

"I could stand in the middle of 5th Avenue and shoot somebody and I wouldn't lose voters."

Indeed. If that was the intended message, then the Saudi government has achieved its aim, boycott or no boycott.

 

It's also worth noting that Trump himself has cultivated a culture of violence against journalists and media organizations here in the U.S.

So far Trump has defended the Saudi government, which appears to have reciprocated by depositing $100 million in American bank accounts.

As of this writing, the Trump administration also still plans to send a top official, Treasury, Secretary Steven Mnuchin, to represent the U.S. and potential investors at the conference.

All of this adds yet more fuel to the multiple scandals enveloping the Trump administration, including his (and his family's) financial ties to Saudi Arabia.

With the U.S. midterm elections approaching, the Future Investment boycott may not have much of an impact on the Saudi government, but blowback from the Khashoggi murder could play a role in the future of the Trump presidency.

Photo: Future Investment Initiative.

Voice and choice.

For Rachel Hutchisson, these are the two most important aspects of social responsibility today.

“People want their voice heard and valued, and they want a choice in how they decide to be engaged,” said Hutchisson, vice president, corporate citizenship and philanthropy, at Blackbaud.

Blackbaud, the world’s leading cloud software company powering social good was recognized in July by Forbes as one of America’s Best Employers for Women. Women comprise approximately 50 percent of Blackbaud’s more than 3,000 employees, and hold leadership roles at all organizational levels.

“Although we celebrate how this makes us different from the typical technology company, we understand that it benefits the company and our collective future to further invest in women,” said Hutchisson.

“Senior leadership can empower, and be a real positive force in engaging employees and giving voice to diversity,” she added.

Hutchisson spoke with TriplePundit about Blackbaud’s commitment to empowering female employees through initiatives like its Senior Women Leadership Council. (Responses have been edited for length and clarity.)

3p: How did Blackbaud’s Senior Women Leadership Council come about, and what was your role in its creation?  

Rachel Hutchisson: Three years ago, under the leadership of Catherine LaCour (Blackbaud’s CMO) and Mary Beth Westmoreland (Blackbaud’s CTO), we launched the Blackbaud Women’s Executive Summit, an event that brought together all the female members of Blackbaud’s Global Management Team.

Earlier this year, Catherine and Mary Beth – in collaboration with our CEO, Mike Gianoni – launched the Senior Women’s Leadership Council to further expand our commitment to the women’s leadership community and as an investment in the future success of the company.

Catherine, Mary Beth and Mike asked me to chair the Council, and I worked with them and the Executive Leadership Team to identify nine women leaders to join me in this work. These leaders are all deeply respected in their own right, are personally committed to developing others and represent an array of different functions and areas of expertise across the company.

3p: What are some of the initiatives the council has focused on so far? What's next?  

RH: We began with developing a strong women’s leadership community within the company, which is different from simply having excellent women leaders. To do this, we first spent time getting to know each other better, focusing on trust and support and creating space for true feedback and growth. As a first initiative, we collaborated on developing our “charge,” which focuses a great deal on how we show up every day as leaders, modeling excellence, how we develop others and advance them in the talent pipeline.

The Council is now serving as the steering committee for November’s Women’s Executive Summit. We have a goal of having many voices heard at the Summit so the 65 women of the Global Management Team can build strong connections and truly understand both how each one of us is unique and how we can best work together to drive the company forward.

The Council is also working with HR to preview and champion "Respect at Work" training and to assist from where we are within the company with diversity initiatives in talent acquisition. We are also encouraging members to get involved with Blackbaud’s affinity groups, which are employee led but can always benefit from sharing of expertise. These affinity groups include Women in Sales, Women in Tech, African Americans, LGBTQ and employees with disabilities. 3p: How does the council benefit Blackbaud employees as a whole? 

RH: The announcement of the Council was an important moment for Blackbaud and its employees overall as it was a public recognition of the importance of investing in women leaders. It also helped to raise the profile of the members of the group as key contacts for others in the company and as an aspirational path for others. Although the Council is initially focused on building a strong community of the women in the Global Management Team, we understand and value the need for partnership with all leaders across the company. We also expect to come out of the Summit with key areas of interest that groups of leaders would like to take on, along with their male counterparts and other employees.

In the end, we are seeking not only to help build women leaders, we are seeking to continually enhance our culture and to help Blackbaud be the best it can be. As we move forward, deepening our community connections, we will be equipping our women leaders to carry the message and leadership models forward within their own teams, so that we ultimately reach across the entire employee base. That’s a collaborative effort that involves everyone and we’re in it for the long haul.

Women bring valuable experiences and insights to every aspect of corporate responsibility and sustainability. On October 24 at 3BL Forum: Brands Taking Stands - The Long View, Rachel Hutchisson will offer her unique perspective on the power and influence of women’s voices – from leadership to sustainability reporting to workforce engagement – in a rapidly changing business landscape. Receive a 25% discount using this code PUNDIT2018VIP when you register here.

Image credit: Blackbaud/Facebook

The giant discount European supermarket chain Lidl has lent its considerable influence to the growing movement by supermarket retailers and soy producers towards developing a sustainable global supply chain.

In the United Kingdom, Lidl has promised to ensure its entire soy supply comes from sustainable, deforestation-free certified sources. The company’s British division claims this is the most responsible sourcing policy for soy of any supermarket chain. Lidl also says it is the first retailer in the U.K. to purchase 100 percent sustainably-sourced soy.

Lidl is a division of Schwarz Group, one of Europe’s largest retailers, with 10,500 stores in 30 countries. The company said it will work with all its U.K. suppliers to "achieve physically traceable, sustainable, zero-deforestation soy in the long term.”

More soy, less forest

Soybean oil is already the second most widely used oil in the world. And global soy production is predicted to continue to grow significantly, to provide both edible oil and livestock protein feed. Demand for soy is also being driven by the biofuel sector using the crop to produce alternatives to fossil fuels.

But expanding soy production comes with a cost for the environment and for local communities—leading to the loss of forests and other native vegetation in the Amazon and cerrado across South America.

Pushing for market transformation

This new policy will take effect this month, Lidl said, with the firm purchasing credits from the Roundtable for Responsible Soy (RTRS) to ensure soy farmers are paid extra for producing soy sustainably. 

Lidl insists it wants to act as a catalyst for change. “We recognize the need to take immediate action in our own supply chains and stimulate market demand for sustainable, zero-deforestation soy,” the company announced in a public statement.

During the first phase, which started in September 2018, Lidl will purchase RTRS certificates on an annual basis through a “Book and Claim Direct Trade” approach to cover 100 percent of its soy footprint, creating what the company says is a clear market signal for sustainable soy.

The second phase aims for market transformation, with supply chains of responsibly sourced soy finding its way in both the U.K. and the European continent. Through the U.K. Roundtable of Sustainable Soy, Lidl says it intends to define “sustainable, zero-deforestation” soy and work with its suppliers and the entire soy industry to develop a range of mechanisms to achieve its goal, including strengthening standards beyond RTRS.

Joining a growing movement

Lidl is one of a number of companies, including manufacturers and retailers such as Unilever, Tesco and Marks and Spencer (M&S), that has signed the Cerrado Manifesto, which calls for zero-deforestation in Brazil’s cerrado region, where around 50 percent of the natural landscape is believed to have been lost since 2000. 

Soy giant Louis Dreyfus Company (LDC) also said earlier this year that it would move towards zero-deforestation across its supply chain by embedding the Sustainable Development Goals (SDGs) into its updated raw materials strategy.

As it strives to attain this goal, LDC has committed to publish information on all soy plantations it sources from - either directly or indirectly - as it already does with palm oil.

Campaigners such as Mighty Earth are applauding the industry’s actions. “There’s now no reason for McDonald’s and other companies to continue doing business with deforesters,” the group’s chief executive, Glenn Hurowitz, said after LDL’s announcement in July.

Image credit: Bambizoe/Flickr