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American grocers have vastly improved their sustainable seafood offerings over the past decade, according to a new report from Greenpeace.

The global NGO’s annual Carting Away the Oceans report evaluates seafood sustainability at 22 U.S. retailers based on things like sourcing policies, labeling and transparency practices, and inventory. When Greenpeace published its first report back in 2008, every single retailer failed. Fast forward 10 years later, and 90 percent of them received passing scores—a powerful indicator that change is brewing, the NGO said.

Mainstream grocers lead the way on sustainable seafood

Whole Foods remains the top ranked retailer after implementing “marked sourcing improvements” in the year since being acquired by Amazon, Greenpeace said.

While the NGO gave Whole Foods high marks, it noted the retailer still has a long way to go when it comes to labor standards—citing a recent Oxfam report detailing human rights abuses in supermarket supply chains. “As labor and human rights abuses persist in the seafood industry, Whole Foods has the opportunity to lead with the same tenacity as it has on sustainable seafood,” Greenpeace wrote in its report.

Hy-Vee, a family-owned chain of nearly 250 grocery stores located throughout the Midwest, received Greenpeace’s highest transparency score and placed second overall. The company also improved its policies on shelf-stable tuna, a key battleground issue for Greenpeace as it continues to pressure retailers to improve sourcing for canned as well as fresh fish.

German grocer Aldi, which operates nearly 2,000 stores in the U.S., moved into the top three for the first time, thanks in part to new policies that address problem practices like transshipment at sea. Transshipment—the practice of transferring catch from small fishing boats to larger vessels with refrigerated hulls—cuts fuel use and improves efficiency, but Greenpeace and other NGOs warn that it can make seafood harder to trace and can even mask human rights abuses within the supply chain.

“By enabling fishing vessels to remain on the fishing grounds, transshipment reduces fuel costs and ensures catch is delivered to port more quickly,” Global Fishing Watch said of the practice in a 2017 report. “It also leaves the door open for mixing illegal catch with legitimate catch, drug smuggling, forced labor, and human rights abuses aboard fishing vessels that remain at sea for months or years at a time.”

Wegmans, the northeastern grocery chain Giant Eagle and west coast health food favorite Sprouts joined Aldi in drafting public policies regarding the transshipment of tuna.

Meanwhile, Trader Joe’s stands out on the list for the wrong reasons. Though the popular retailer carries few overfished or farmed species—earning it the best score in the inventory category—it has failed to make good on its more ambitious sustainability promises, Greenpeace said: “More than eight years after Trader Joe’s committed to improve on seafood sustainability, the retailer does not have a robust, public sustainable seafood procurement policy.”

Check out how your favorite grocer fared in the full ranking below:

 

Grocers still have more work to do

Greenpeace Oceans Campaigner David Pinsky praised retailers’ progress while calling on them to do better.

“Supermarkets across the country have made significant progress on seafood sustainability,” he said in a statement. “It is time for major retailers to put the same energy into tackling the other issues facing our oceans and seafood workers, such as plastic pollution and labor and human rights abuses in seafood supply chains. It’s not truly sustainable seafood if it is produced by forced labor and then wrapped in throwaway plastic packaging.”

For the first time, Greenpeace’s seafood sustainability report assessed retailers based on their use of single-use packaging, and the findings are less than stellar: None of the profiled retailers have committed to reduce or ultimately phase out their reliance on single-use plastics, Greenpeace found.

“The equivalent of one garbage truck of plastic enters our oceans every minute, and with plastic production set to double in the next 20 years—largely for packaging— the threats to ocean biodiversity and seafood supply chains are increasing,” the NGO concluded in its report. “Single-use plastics are devastating our oceans, and retailers must take responsibility for their contribution to this global crisis.”

Greenpeace cited U.K. supermarket chain Iceland and Netherlands retailer Ekoplaza as proof that grocers can move away from overuse of plastic packaging.

On the human rights front, Oxfam’s scathing June report—Behind the Barcodes—paints a disturbing picture of a global grocery industry that fails to advocate for its supply chain workers.

As part of its report on grocers from around the world, the anti-poverty organization assessed America’s six largest retailers based on their supply chain policies. “The overall results reveal that U.S. supermarkets are failing to do enough to protect the rights of the workers in their supply chain,” Oxfam concluded. “None of the six supermarkets we looked at in the U.S. scored any points for policies supporting the right for workers in their supply chain to earn a living wage, and just one scored at all on respecting the rights of women.”

At a time when human rights abuses continue to run rampant in the seafood sector—and pollution and overfishing threaten the industry’s very existence—Greenpeace appeared to congratulate companies for their work thus far, while driving home the need to keep up the momentum.

“Together we have achieved a great deal over the past 10 years,” the NGO said. “Nonetheless, the work over this next decade is critical to ensuring healthy oceans teeming with marine life, where seafood workers are treated fairly, and coastal fishers are able to provide for their families without suffering exploitation from industrial fishing fleets.”

A couple of weeks ago Danny Kennedy presented on GreenBiz the Speedwell Call to Action, an effort to involve more entrepreneurs, startup incubators and investors in building pressure on policymakers to take bolder and quicker action on climate change. Kennedy, Managing Director of the California Clean Energy Fund hopes this petition will demonstrate how entrepreneurs can be “key agents of change in the climate struggle”, especially in developing a clean energy economy. His goal is to create a momentum around using innovation to address climate change at the Global Climate Action Summit that will take place next month in San Francisco.

The call refers not only to the potential role entrepreneurs can play in supporting the implementation of the Paris Agreement, but also to the urgency of the situation, asking: “Our only question is can we all, working together, make it happen in time?”

The answer, I believe, is no. Not if we continue to take the same approach we have taken so far to address climate change, which is based on voluntary commitments of countries to implement to the Paris Agreement.

Using startup terminology, it is time to acknowledge the experiment we did so far with the Paris Agreement is failing and that we need to make a pivot – “a change in the strategy without a change in the vision” (Eric Ries). This pivot does not guarantee success, but without it failure is all but certain.

First, it’s important to be honest about the failure of the current strategy - most countries have been failing so far to adhere to the Paris Agreement goals (“to hold warming well below 2°C, and pursue efforts to limit warming to 1.5°C above preindustrial levels”). One of the best places to see it is the Carbon Initiative Tracker’s assessment of the efforts countries have been making so far to meet the goals. It shows only two small countries’ efforts are consistent with the Paris Agreement 1.5°C limit (Morocco, The Gambia) and 4 countries (Bhutan, Costa Rica, Ethiopia, Philippines, and India) are in the range of the 2°C goal. The rest of the world’s performance is somewhere between insufficient (<3°C world) to critically insufficient (4°C+ world).

We also need to be honest about the fact that even if all the countries around the world would fulfill their commitments in time it actually won’t be enough to meet the Paris Agreement goals. A 2017 U.N. Emissions Gap Report warns “that as things stand, even full implementation of current national pledges makes a temperature rise of at least 3 degrees Celsius by 2100 very likely.”

So, what do we do about it? One option is to continue with the current strategy, calling everyone to do more. This seems to be the U.N.’s approach: “To avoid overshooting the Paris goals, governments – including by updating their Paris pledges – the private sector, cities and others need to urgently pursue actions that will bring deeper and more-rapid cuts.” The same sentiment was echoed in the Speedwell call for action I’ve mentioned earlier, as well as many other calls and activities.

While stakeholder activism is very important and should be practiced by everyone, we need to accept the fact that it is probably cannot move the needle in time, i.e. move countries to fulfill their commitments, not to mention going beyond these commitments to actually meet the Paris Agreement goals. Without a binding regulation forcing the needed change these efforts are not enough to make a difference in time. You can think about it as a plier with two gripping jaws, one that is relatively strong (stakeholder activism) and one that is extremely weak, almost non-existent (regulation) – if this plier is not working properly, it probably won’t help much making the strong jaw even stronger. You need to fix the weaker one!

The main consideration we have to take into account is time, or the lack of it - roadmaps to meeting the Paris Agreement goals (see examples here and here) point out that “annual emissions from fossil fuels must start falling by 2020”. Therefore, as I wrote in the past the first question we need to ask should change from "why" (what’s the business case?) to "when" (can it have the necessary impact in time?). Alex Steffen articulates it best, pointing out that “winning slowly is basically the same thing as losing outright.”

Reframing the conversation around time and urgency requires us to make difficult strategic decisions, or otherwise the gap between the incremental progress we now have and the exponential change we need to address climate change will keep widening. We need to look for a smart way to overcome some of the main barriers to effective climate action – as The Economist suggests in its August edition, these include soaring energy demand, economic and political inertia (“the more fossil fuels a country consumes, the harder it is to wean itself off them”) and the technical challenge of decarbonizing energy-intensive industries like steel, cement, farming, and transport.

With that in mind, I would like to offer a new strategy that will be based on five simple principles:

1) Firm-focused: Shifting from a country-based to a company-based model.

Clearly the country-based model doesn’t work, and given the political volatility around the globe, as demonstrated by the withdrawal of the U.S. from the Paris Agreement and the difficulties to force countries to adhere to global agreements, it doesn’t make much sense to continue with the current country-based model.

I find it more sensible to switch to a company-based model due to the following reasons: 1) companies are the ones that need to implement the changes, 2) they have greater sensitivity to stakeholder activism comparing to governments, and 3) they have already proven their ability to adjust to new requirements, when they are enforceable and involve heavy penalties for non-compliance, as we’ve seen in the case of the EU General Data Protection Regulation (GDPR) regulation.

2) Legal compliance framework: Making it mandatory for businesses to meet the Paris Agreement goals.

At the core of the new strategy is a requirement from all companies to meet at minimum the Paris Agreement goals. Based on the GDPR model, this new framework should be enforceable and include heavy fines for non-compliance, as well as a strict timeline for implementation. Unlike attempts in the past to create a similar mechanism, this one will not focus on carbon pricing methods such as carbon tax or cap and trade system because, as Jeffrey Ball explains in length in the July/August issue of Foreign Affairs carbon pricing is a good idea in theory but doesn’t work well in practice. “The time has come to acknowledge that this elegant solution isn’t solving the problem it was designed to solve”, Ball writes. I agree with him, which is why I suggest that the clear signal the regulation will send companies will focus on the Paris goals, not the price of carbon.

3) Rigorous implementation: Using the Science-Based Targets initiative (SBTi) as implementation mechanism.

As I have discussed in the past, I find SBTi to offer a credible, science-based roadmap for companies seeking to meet the Paris Agreement goals, which is why I believe it can become an effective mechanism, helping all companies deliver on the agreement. We need to ensure that the implementation of the new strategy is driven by science, rigor and the need to consider particular circumstances of different industries, which is exactly what we can find at SBTi. Created by a number of respected environmental organizations, this initiative is currently the best tool we have to ensure the execution of the new strategy. While it will probably need to be complemented by another body that will be responsible for enforcement, the SBTi is already functional and can be expended to fulfill a broader mission.

4) Innovation-based: Companies will have the flexibility to decide what measures they want to take to meet the Paris Agreement goals, as long as they generate the desired results.

While companies will be provided with a very clear destination (i.e. meeting the Paris Agreement goals) that they need to reach in a timely manner, they are the ones to figure out and decide how they want to get there. In other words, while the ‘what’ component of this journey is pre-determined, the ‘how’ is very much up to the companies (pending the approval of the SBTi to ensure the ‘how’ and the ‘what’ are aligned). The idea is very simple – regulation is needed to provide clear and strong signal for companies, but the solutions to climate change should be grounded in innovation.

5) Paris ≠ the peak of Mount Everest: Changing the narrative and optimization of the new system that is put in place to consider Paris Agreement as the starting point, not the end of the journey.

Influenced by the difficulties to make it work, the Paris Agreement is considered now as the peak of Mount Everest – the end point of a very difficult journey. While this is indeed a very difficult journey we should reframe Paris Agreement as the starting point of this journey, not the final destiny – if you think about the journey in terms of climbing Mount Everest, the agreement is like Everest Base Camp, not the top of the mountain. This is more than just a semantic difference as there’s a growing concern that even if the current goals are met the world is still “at risk of entering “hothouse” conditions where global average temperatures will be 4-5 degrees Celsius higher.” Therefore the new strategy should encourage companies to consider the Paris Agreement goals as a baseline and incentivize them to move beyond them.

If you find this strategy to be radical you are not wrong. I believe it has to be one to generate the necessary speed and scale required to address climate change. However, a radical approach, or in John Elkington’s words “the necessary radical intent” is not enough. You need to ensure it’s also practical or else it has very little value.

In this case I do see a clear, if not easy way to make it work. Based on the GDPR model, I believe this new strategy should be constructed and delivered first by the E.U. (perhaps together with California), which will apply it to every company that is doing business in the E.U. (and California if it is also on board). Similarly to what we’ve seen with the GDPR, such regulation will not only cover most of the companies around the world, but will also create a regulatory momentum, driving similar regulation in other parts of the world. Thus, in a very short time after being implemented by the E.U. this strategy can be globally deployed.

Going back to the Speedwell Call for Action’s question: “Can we all, working together, make it happen in time?,” I would suggest that the answer can be positive if we work on the right strategy. Time is of essence and the real challenge is ensure the necessary legislation required for the new strategy will be completed in a relatively short time, or at least much shorter than the six years passed between the initial GDPR proposal in 2012 and its implementation earlier this year.

Therefore, my call to Danny Kennedy, or for that matter, to anyone working to promote a bolder climate change agenda is to focus on convincing policymakers to make this pivot. Stakeholder activism is necessary to promote the required legislative agenda, creating what I call the Plier Effect – two strong gripping jaws that can actually get the job done.

We are at a critical point in time, when we need to shift our thinking from "doing the thing right" to "doing the right thing" and work together to make it happen. It’s time to consider a radical, yet practical strategy and start designing for it. Are you in?

Image: The exit of longtime PepsiCo CEO Indra Nooyi leaves only two women of color at the helm of America's largest companies. 

After reaching an all-time high of 32 in 2017, the number of female CEOs at Fortune 500 companies dropped by 25 percent in the past year.

Longtime PepsiCo CEO Indra Nooyi will step down in October, leaving only 24 women at the helm of America’s 500 largest publicly-traded companies. Kathy Warden will bring the number back up to at least 25 when she takes over as CEO of Northrop Grumman in January, but Nooyi’s departure highlights another glaring statistic: in her absence, only two Fortune 500 CEOs are women of color. None are African American.

Black women also make up less than 2 percent of middle managers in the Fortune 500, leaving a shallow pipeline from which to pull new additions to the C-suite.

Ursula Burns, who left the CEO role at Xerox in 2016, is the first and only black woman to occupy the top spot at a Fortune 500 firm. In a 2017 interview with Fortune magazine, she ran down a list of reasons why, citing school systems that fail to prepare low-income kids for work and workplaces that relegate women—particularly women of color—to supporting roles.  

“Look at the numbers of women we have now,” Burns told Fortune, referencing corporate America’s upper echelon that essentially becomes the talent pool for future CEOs. “Unless you’re bringing people in from Mars, it’s going to be a while.”

Image: Ursula Burns, former CEO of Xerox. 

Burns, too, stood out in the crowd as she rose through the ranks at Xerox. “In the early part of my career, I was one of very, very few women, and I was the only black woman,” she told Time magazine last year. “If you work in a business environment, the thing that makes the place rock and roll is actually getting all of those differences to benefit everybody else.”

Of course, she knows this is easier said than done—particularly for minority women, who research firm Catalyst calls “double outsiders.” Men of color are still men, and white women are still white, giving them a foundation on which to connect with the decision-makers at their companies. As such, they’re more likely to get mentorship and sponsorship opportunities from their superiors, who are probably white and male. Minority women struggle to achieve the same and often grow demoralized at work, as they’re passed over for promotions and subjected to micro-aggressions that diminish their accomplishments.

“This is what we call an ‘emotional tax,’” Dnika J. Travis, an executive and researcher at the Catalyst Research Center for Corporate Practice, told Fortune. “The burden of being on guard all the time affects our lives in really negative ways.”

A longitudinal study of black women who received an MBA from Harvard Business School—arguably the most competitive business school in America—confirmed Catalyst’s findings. Within 40 years of graduation, only 13 percent of black female Harvard MBAs reached the senior-most executive ranks, compared to 40 percent of Harvard MBAs overall. Of the black women who managed to reach the top, many said they struggled to “be themselves” at work and felt “on display” in their workplaces. “It makes you work hard to make sure you’re never misstepping,” one black female CEO said, as quoted in the Harvard Business Review.

Pushing back on these institutionalized realities won’t be easy—as Barbara Whye, Intel’s chief diversity officer, told Fortune, “You can’t hire your way to success on this.” But data shows that companies will reap bottom-line benefits by improving gender and racial diversity, even marginally.

Companies with women in at least 15 percent of senior management positions return 18 percent more profits than their peers with less gender diversity, according to a 2016 study from Credit Suisse. Those with the most ethnically diverse executive teams are 33 percent more likely to outperform their peers on profitability, McKinsey & Co. found this year.

For their part, a growing number of minority women aren’t waiting to get noticed at America’s top firms. As of last year, nearly 4 million black and Hispanic women sat at the helm of their own companies, and women of color start between 600 and 800 new businesses every day.

Though these firms often struggle to get funding—women receive around 3 percent of annual venture capital investment, and women of color attracted a mere 0.2 percent of all VC funding in 2015—many of them are scaling against all odds: Women of color are America’s fastest-growing entrepreneurial population, and their companies generated $360 billion in revenue last year.

“I think if you're a black woman, growing up in the U.S., you already know things are going to be a bit harder,” Kathryn Finney, whose firm Digital Undivided helps women of color build their businesses, told Vox. “It's not anything we can't do.”

Image credist: Flickr/Fortune Live Media and Fortune Conferences 

Just a month ago, the future was looking rosy for ride-hailing companies. Uber and Lyft, products of the groundswell movement the sharing economy earlier this decade, were about to reach a pinnacle in their growth. Ride-hailing (or ridesharing) was taking on a new definition. It was no longer going to be defined by the size of the car that picked you up, the number of seats in a vehicle or the route to or from the local airport from a local neighbor.

Buses were the next, logical step in the ever-evolving concept of ride-hailing.

In July, the two companies were spotted carrying out acquisition talks with the ride-hailing app company Skedaddle. Another result of the sharing economy concept, Skedaddle made its ripples in a much bigger pond: bus transport and charter ride-hailing.

And it's no surprise. Brooking Institute predicted in 2017 that by 2025, the sharing economy will be worth as much as $335 billion. That includes all four sectors of the "peer-to-peer" economy, but one thing is clear with the emergence of online booking apps like Skedaddle: models that promote shared transportation and accommodation experiences are at the top the list when it comes to consumer preferences.

But that doesn’t mean that all of North America's largest cities are necessarily going to support the commercial expansion of ride-hailing companies.

In a surprise decision last week, New York City Council voted to restrict the growth of ride-hailing services within its city limits. Although the vote was largely focused on the impact of companies like Lyft and Uber, which had successfully competed against the city's long-standing taxi industry, the decision isn't good news for companies that want to expand ride-hailing bus and scooter services within city limits.

And New York City isn't the only metropolitan area to think twice about unchecked expansion of such services. Vancouver, BC has already imposed restrictions, opting to support taxi companies that have complained that ride-hailing cuts into their profits.

Smaller towns are also swapping bus services for ride hailing.

Other towns and cities however, see a benefit in private initiatives that expand the accessibility of transportation. In March, the city of Arlington, Texas voted to scrap its bus service in favor of the ride-hailing service Via. Residents can hail one of 10 ridesharing vans in the city for the price of $3 a ride or $10 a week.

Arlington is only one of a growing number of cities and towns to sink their money into ridesharing choices and scrap public transit options. The town of Summit, New Jersey pays Uber to shuttle its residents to and from the central train depot, while up north, the town of Innsifil in Ontario has found it far more economical to hire Uber to transport residents and visitors than to invest in a city bus service. The average cost to the city for an Uber ride in Innisfil is just over $5.00.

That's not to say that either New York or Vancouver, which both rely on publicly funded transit, will likely be switching to ridesharing bus services any time soon. But what both cities highlight is that there is one sector of the consumer base that ride-hailing services are able to fill a gap for: the cities' aging and disabled population.

Only about 20 percent of New York's cabs accommodate wheelchairs and in a city that has made an art out of hailing cabs from the street.  Identifying that one accessible taxi among hundreds, as one resident said, is next to impossible.

"It's like an Elvis sighting," Jean Ryan of the advocacy group, Disabled in Action, recently said.

The Vancouver metropolitan area has also had its problems with ensuring there are enough wheelchair-equipped taxis on the street. British Columbia law requires taxi companies to prioritize ride hailing services for disabled customers. Recent stories of a wheelchair-bound residents waiting hours for a taxi or being turned away from over-booked services are giving voice to a growing number of the province's residents that are calling for more ridesharing services.

For Uber, Lyft, Skedaddle and other startups that are willing to find new ways to bring those services to mobile-equipped travelers, regulatory setbacks are all part of the politics of building confidence in a ridesharing industry. After all, it really isn't city or state governments that will have the last say as to whether a cutting-edge service that can harness the resources of dozens of charter bus services and offer them for a fraction of the cost. It's the residents, faced with rising transportation costs and diminishing services as they get older, who will build the case for transportation that can really meet their needs.

Image credit: Uber

 

 

 

 

Under the leadership of Marc Benioff, Salesforce has been viewed as one of the more progressive tech companies in a sector now widely criticized for its disengagement from social concerns. The fourth largest software firm (market cap: $79 billion) has established a strong reputation for both its innovative savvy within an innovation-driven field and for promoting social causes while doing so. “Many [of its] customers like to feel they are not only buying software but doing good for the world,” Keith Weiss of Morgan Stanley told The Economist.

Originally published in Brands Taking Stands newsletter.

 

John Elkington recently “recalled” the Triple Bottom Line (TBL) management framework he created nearly 25 years ago because it hasn’t lived up to its promise. Elkington’s main criticism was that the TBL has been applied too narrowly. He’s right, but from my point of view the failure isn’t with the framework, it’s with its implementation and management.

The TBL concept was intended to be more than a framework for simply checking the sustainability box for investors or other stakeholders. Elkington explained, “...the TBL wasn’t designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future, but many early adopters understood the concept as a balancing act, adopting a trade-off mentality.”

We at Third Partners believe that trade-offs are a reality of business and life. Even after 25 years, sustainability is still a relatively new and often misunderstood concept, so it’s natural that business leaders would begin approaching it as a trade-off. Publicly traded companies are at the greatest risk of this mentality because their short-term focus on quarterly targets rarely allows a far enough sightline to adequately anticipate and proactively prepare for the mounting pressures related to environmental, social and governance (ESG) factors.

Sustainability is complicated, and so is effectively integrating multiple voluntary frameworks (not just TBL) that require buy-in from leadership and proper management and implementation throughout a company’s ranks. My colleagues and I have helped many clients move past the box-checking mentality to apply frameworks like TBL more broadly. We no longer have to make the business case for companies to pursue sustainability, now we make the case for how far and wide companies should adopt it.

Some companies are evolving their thinking quickly. Elkington singles out the B Corp movement as an example of shifting beyond the trade-off mentality, of competing to be the best for the world. Many B Corps embrace the motto “using business as a force for good” and design better, more responsible offerings for the marketplace. B Corps, mission-driven companies and the purpose economy are on the rise largely thanks to Millennials demanding more from companies than business as usual.

Such demands have helped sustainability mature, but we have a long way to go. TBL has been an important part of moving us forward, but, as Elkington puts it, “Thousands of TBL reports are now produced annually, though it is far from clear that the resulting data are being aggregated and analyzed in ways that genuinely help decision-takers and policy-makers to track, understand, and manage the systemic effects of human activity.”

Mismanagement of sustainability data is a primary reason leaders are disconnected from sustainability. Rethinking how you collect and communicate sustainability data allows an expansion of analytics which enables executives to tie sustainability to broader corporate goals and develop more effective strategies.

Factors other than data, analytics, and the strategies they shape contribute to what Elkington describes as the way CEOs and CFOs “move heaven and earth” to hit financial targets but not their people and planet goals. There is a lot to unpack here, but I think Elkington placed too much responsibility on the TBL when he wrote, “Clearly, the Triple Bottom Line has failed to bury the single bottom line paradigm.” One framework isn’t going to spark a wholesale shift in capitalism, but frameworks are essential for moving us towards increasingly more responsible ways of doing business.  

The point of the recall was to stir the pot. The business and sustainability communities need regular challenges to the ways we think about the motivations, methods, and tools we use to pursue and measure social and environmental progress. These communities need to move beyond low-risk, narrow-minded ideas to embrace change and a growth mindset in order to move the needle on sustainability.

We need thought leaders like Elkington to shake things up and courageous CEOs to advocate for sustainability’s potential. While they pull from the front, it’s up us practitioners to push from within to help our employers and clients ask challenging questions about their motivations, methods, and tools.

Image credit: Giggel/Wiki Commons

My summer reading has entailed reviewing closely the numerous excellent resilience-finance thought leadership reports written by friends and colleagues, much of it galvanized by the Recommendations of the Task Force on Climate-related Financial Disclosures (TFCD) released in June 2017. I highly recommend these reports as there is lots to learn. Here are some of them:

1. Acclimitise for United Nations Environment Program Finance Initiative: Navigating a New Climate: Assessing credit risk and opportunity in a changing climate: Outputs of a working group of 16 banks piloting the TCFD Recommendations  PART 2: Physical risks and opportunities July 2018.


2. Four Twenty Seven Inc. and Acclimitise for EBRD: Advancing TCFD guidance on physical climate risks and opportunitiesMay 2018.


3. Four Twenty Seven Inc. for Deutche Bank: Measuring Physical Climate Risk in Equity Portfolios, November 2017

But, one critical issue key to resilience finance exists that no one is talking about – and it worries me. It’s a discussion of how the finance industry manages assets to ensure the most vulnerable do not become even more helpless due to the physical risks of climate change.

Acclimitise’s prescient 2006 risk pathways figure (published again in the above EBRD piece) illustrates these connections with social performance at the heart of the flow or risks for business.

And the market intelligence research firm Four Twenty Seven, Inc. also has been clear on this point, illuminating how business can support community resilience.

TCFD spells out these four key features of their recommendations:

1. Adoptable by all organizations.


2. Included in financial filings.


3. Designed to solicit decision-useful, forward looking information on financial impacts.


4. Strong focus on risks and opportunities related to transition to lower-carbon economy.

I would add one more: It would prove transformative if future TCFD work – and that of the big brains interpreting the guidelines – include “Prioritize lifting more out of poverty into the middle-class market.”

As the groundbreaking “Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters” by World Bank lead economist Stephane Hallegatte reminds us, “By focusing on aggregate losses—the traditional approach to disaster risk—we restrict our consideration to how disasters affect those wealthy enough to have assets to lose in the first place, and largely ignore the plight of poor people.”

For the optimists among us, it doesn’t seem a heavy lift for TCFD to make social equity a feature of its future recommendations: Arguably, much of the goods and services represented by the dollars moving through the financial markets aim, in fact, to increase people’s well-being in infinite ways; In explaining the financial implications of climate change, TCFD does note there are social and environmental consequences; and it is plausible that Mark Carney, chair of the Financial Stability Board that established TCFD and author of the phrase Tragedy of the Horizon, might have had in mind the tragic consequences that climate change already is creating for the world’s least resourced people.

TCFD’s number one principle for effective disclosures is, “Disclosures should represent relevant information." It’s likely most financiers don’t assume that the jobs left behind as companies move their capital assets and supply chains out of harm’s way are “relevant.” Yet, if that is not relevant to them, then who is it relevant to? Indeed, each of the four TCFD-recommended climate-related financial disclosures elements - governance, strategy, risk management, and metrics and targets – entails features of building or, sadly, dismantling social equity.

Like all whose life’s work relates to solving for climate change risks, I am thrilled not only by the TCFD’s pragmatic approach, but also by the demand it has inspired in the financial markets, segments of which are getting a better handle on their climate risks. There are many actions the market can take. Let me suggest one: In those places where your portfolio is most at risk, ask your risk analysts what will happen to community assets when your portfolio or elements of your value chain move away from the physical risks.

Quantify disbenefits to reputation, workforce, customers and duty to care. Then, consider what an investment in vulnerable communities’ resilience might mean in terms of reputation, workforce and consumer benefits. Do you have the mettle to go beyond the norm and make those investments that build resilience for all rather than avoid risk for some?

Here are three key recommendations to avoid perpetuating a world where particularly vulnerable communities are disinvested in as the market moves from climate change risks:

1. TCFD should add social equity considerations to its list of “Key Issues Considered and Areas for Future Work.”


2. Economic powerhouses such as Vivid Economics, which weighed in on economic impacts of physical climate change risks in the UNEP-FI report above but did not mention social equity, should crunch some numbers about the market impacts of disproportionate climate risks and compare these human scenario-based outcomes with climate change scenarios.


3. All thought leaders in this space should continue to find bridges between questions of social and financial equity. Here’s a start from an article I wrote earlier this year: 6 Steps for Building a “Sweet Spot” Where Social and Financial Equity Meet.

So, how do you recommend we challenge ourselves to make social equity a part of the conversation – and the solution to physical climate change risks?

Image credit of Kiribati: United Nations/Flickr

Image: Etsy headquarters in Brooklyn, New York. 

Data increasingly demonstrates the bottom-line benefits of diversity in tech: Annual returns at highly gender-diverse tech companies are 5.4 percent higher on average, according to a 2017 report from Morgan Stanley. Yet today’s tech workers are still overwhelmingly white and male. Men hold 76 percent of U.S. technical jobs, and 95 percent of the American tech workforce is white.

At e-commerce trailblazer Etsy, however, the numbers tell a different story. Chief among the accomplishments detailed in its 2017 Impact Report are the company’s impressive gender diversity numbers, which stand out among its peers and the Fortune 500 at large.

As of last year, 55 percent of Etsy’s employees were women, dwarfing fellow tech companies like Facebook (36 percent women) and eBay (40 percent). It’s also one of the only public companies whose board and executive teams are evenly split along gender lines, and its engineering team is nearly 30 percent women—double most of its peers.

Powered by a historically diverse team and a culture rooted in purpose, Etsy was among the first certified B Corps to go public and by far the largest, with a 2015 IPO valued at $3.38 billion. But the company had its fair share of growing pains since then.

According to news reports, investors became impatient after a few unimpressive quarters, and rumors of a looming sale began to circulate last spring. The company didn’t sell, but the dramatic shake-ups that followed—namely sweeping layoffs and the ouster of beloved CEO Chad Dickerson—rocked the culture at Etsy.

Veteran business reporter David Gelles chronicled the changes in the New York Times in November. His aptly titled piece, “Inside the Revolution at Etsy,” paints a picture of a company in flux. Etsy opted to let its B Corp certification lapse last year, rather than change its corporate structure, and current and former employees wondered how the company could balance its purposeful roots with the short-term pressures of Wall Street. For his part, eBay alum Josh Silverman—who replaced Dickerson as CEO in May 2017—said Etsy is still a mission-driven company that simply shifted its focus more squarely on growth.

And grow it did: Etsy reported positive revenue growth in four consecutive quarters and generated $3.3 billion for its sellers last year. Silverman insists Etsy’s impact continues to build alongside the company.  “Our financial and impact goals are highly complementary,” he wrote in a company blog post last week. “Our business drives our positive impact, and our impact initiatives drive our business.”

Along with progress on gender diversity, Etsy’s latest impact report reveals the company is doubling down on its commitments to the environment. It plans to power all of its operations with renewable energy by 2020 and is part of the RE100, a cohort of companies committed to source 100 percent clean power with the help of CDP and the Climate Group.

Thanks to a power purchase agreement with fellow RE100 members Apple, Swiss Re and Akamai, the company is poised to meet that goal on schedule. The agreement will finance two new wind and solar farms, providing 290 megawatts of power to the companies and surrounding communities. The 4.5 megawatts Etsy plans to source from a solar project outside Fredericksburg, Virginia, will be enough to reach its 100 percent goal when the plant comes online in December 2019.

The company also plans to be entirely zero waste in less than two years, and it diverted nearly 90 percent of its waste from landfills in 2017.

While Etsy’s future remains unwritten, the fact that a company founded on purpose even managed to go public—and that it still takes impact seriously after three years of investor pressure—may be a signal on its own. “Etsy clearly demonstrated investor appetite for a new kind of company,” Nikita T. Mitchell, founder of the weekly sustainable business newsletter Above the Bottom Line, wrote on Quartz in December. “Its successful debut as a publicly-traded company provides some powerful examples to emulate—from explicitly articulating its purpose-driven ethos in its prospectus to providing vendors and small investors access to the IPO.”

In an apparent nod to the company’s rocky recent history and its plans for the future, Silverman wrote: “While we are proud of our efforts to date, we recognize that being a socially responsible company is a journey. We know we have more work ahead of us.”

Image credit: Etsy

Over the past few years, TriplePundit has covered several start-ups determined to scale up laboratory meat – that is, animal protein derived from cell cultures instead of slaughtered animals.

The bandwagon started with Google’s Sergey Brin plunking down $330,000 for a lab burger five years ago. The company that created the world’s first laboratory-made hamburger, Mosa Meat, recently scored more funding in its quest to roll out laboratory meat in Europe by 2021. Incidentally, out of a drive to improve employee health while taking on climate change, Google has since encouraged employees to eat less meat at its onsite cafeterias.

Unlike plant-based products rolled out by the likes of Beyond Meat and Impossible Foods, these foods are still animal protein. But advocates for this sector note that once these products become cost-effective, we will see a significant drop in resources (such as grain and nitrates) needed by the global industry – as well as a decline in greenhouse gas emissions.

Laboratory meat faces one big hurdle, however: branding. There is the “ick” factor from the term “laboratory meat.” Other monikers such as “cultured meat,” “synthetic meat” and the deal-breaker “in vitro meat” also do little to whet consumers’ appetites. Let’s face it, few get excited at the thought of going to the supermarket to check out the latest “cultured meat prototypes” in the cold case.

But according to Washington State-based Faunalytics, a non-profit devoted to research about animals and animal advocacy issues, consumer acceptance is more than possible if the industry embraces and unites around a name change: clean meat.

Clean meat may sound like an oxymoron to some public health professionals and even to some animal welfare advocates, but Faunalytics suggests such a change can change the “ick” to ideal. After all, the group’s research demonstrated that when consumers were educated about how farmed animals are raised, many become convinced that meat the way we know it now is “unnatural.”

Overall, two-thirds of the people Faunalytics interviewed for this study said they were willing to try clean meat. Almost half (46 percent) would say that they would purchase clean meat regularly, even if there were a price premium. And 53 percent said they would consider replacing conventionally-produced meat with a clean meat alternative.

There is no shortage of companies on the lab meat/cultured meat/clean meat bandwagon. Hampton Creek, for example, is bullish on formulating animal protein that does not come directly from animals.

Nevertheless, clean meat has a long road ahead to gain consumer acceptance. Even under the most optimistic scenarios, it will be a few summers before clean meat burger patties, chicken or even fish filets find their way on summer barbecue or picnic menus. “The future of ‘clean meat’ will depend on whether it tastes and feels like the real thing,” as Bloomberg’s Deena Shanker and Lydia Mulvany summed up in a recent article about the nascent clean meat sector.

The push for clean meat is dovetailing with the private sector’s determination to improve employee wellness while doing its part to curtail climate change. WeWork, a global network of shared workspaces, made waves last month when the company announced it would no longer offer meat at company events – nor would employees be reimbursed for travel meals in which meat was ordered. It will not be long until larger and more visible companies announce similar policies.

Image credit: Mosa Meat