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Israel's Green Power Goes to West Africa

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Israel has had a long and sometimes complicated relationship with African states. Its ingenuity in water management and overcoming drought has found its way to many water-starved nations in recent years, in part because of partnerships Israeli Prime Minister Benjamin Netanyahu has worked to secure. Medical expertise, such as during the Ebola outbreaks and agricultural technology have been further grounds to liaise with many countries that often haven't had the technical know-how or experts at their fingertips.

This month the small Middle Eastern nation brought another expertise to the table: solar energy. Like water management, energy is a carefully honed and vital issue in Israel. It also is something the nation, which has a booming green energy sector, can share.

On June 2, Israel and the Economic Community of West African States (ECOWAS) signed a memorandum of understanding toward an investment of $1 billion by Israel to promote green energy across the region's 15 member states. The project will be implemented by  Energiya Global, an Israeli company that has claimed its own accomplishments in bringing energy to developing nations. In 2015 it launched Rwanda's first utility-scale solar array. The company also works with USAID to bring solar to African communities.

Israeli Knesset Member Abraham Neguise, who helped organize the arrangements, said the first $20 million of the project would be launched in Liberia.

“With 600 million Africans without electricity, the State of Israel can literally help African Heads of State bring power to the African people, said Neguise, who serves as chairman to the Knesset's Israel-Africa caucus.

The deal may also help Israel forge better liaisons with African states, particularly in areas where the Jewish nation has had a lukewarm relationship. Normalizing ties with countries like Senegal, which in 2016 signed a UN Security Council resolution condemning Israel's construction of developments in the West Bank and Jerusalem have been on Netanyahu's agenda in recent years.

And then there's other countries like Ghana, where Israel has received an open door policy because of its continuing assistance to West African states. Although the first agreement with ECOWAS was forged in 2009, Israel was providing assistance to Ghana, Sierra Leone and their neighbors as early as the 1950s when former-Prime Minister Golda Meir arranged for tech experts to visit the region's small, sparsely developed countries and provide agricultural assistance. It was a friendship that would later be coined by Newsweek as "one of the strangest unofficial alliances in the world."

For Israel, the continuing network with West African states is a rich and potentially fertile opportunity to overcome political and ideological differences with its neighbors, sometimes because political events like the Yom Kippur War in 1973, which ruptured relations with Kenya until recently, and sometimes because of socio-cultural differences in viewpoint.

Still, Israel's know-how in sustainable energy and water management are valuable tools to bring to a table of common goals in a region hard-hit by climate change.

"Israel is coming back to Africa," Netanyahu announced. It's likely to be a partnership that will benefit all sides, and hopefully for some, provide evidence that political differences can, and should, be overcome in time.

Morocco, which considers itself part of the West Africa region, has recently applied for membership to ECOWAS, but deferred its attendance of the summit because Netanyahu was excpected to be present. Hopefully in time, Morocco, which has high hopes of powering the country on renewable energy, and Israel, which has the expertise, will find in time that political differences can be overcome by sustainable aspirations.

 

Flickr images:  Jeff Attaway; Mary Madigen;UK Mission to the UN New York/Lorey Campese


 
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ClimateCare and Jaguar Land Rover Light Up Lives

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Sophie Brooks, Director of Client Services ClimateCare 

A clear message has come in the wake of the UN’s Sustainable Development Goals (SDGs) - the Paris Climate Agreement will not be possible to achieve these goals without business playing a central role. The business community must direct action for their own social and environmental impacts, as well as help to fund the development interventions required to reach these ambitious goals.   There is a real opportunity for progressive businesses to show leadership and take early action to address both their climate and social impacts.

However, the key challenge to overcome is how to engage business in a meaningful way to deliver both the right climate and development outcomes, as well as return on investment for those companies.

There are a number critical success factors required to overcome this challenge and secure meaningful business engagement in this global set of challenges.

First and foremost corporates need to see the business value of investing in a CSR program. The most effective way to do this is to demonstrate clear alignment between the environmental and social outcomes of the program, and the funding partner’s business goals. To achieve this effectively, the chosen vehicle, audience and message must be aligned to the corporate’s brand values and core customers.

Secondly, taking an integrated approach to solving climate and sustainable development challenges is imperative if we are to make significant impacts against the SDGs and Paris Agreement commitments. Increasingly we are seeing multinational corporations re-examining their own approach to corporate responsibility to align with these global goals and international climate commitments. Projects should be designed from the outset to create social and environmental outcomes quickly, cost effectively and at scale, with robust measurement of direct impacts to demonstrate how it delivers against evolving corporate strategies.

Lastly, when designing communications around these projects, bring them to life for a developed world audience. Global development issues such as energy access, poverty and climate change can feel very abstract and disconnected from people’s everyday lives. Finding ways to talk about the positive impacts in an engaging way to humanize brands and demonstrate that they understand their own role in society is key.

An excellent example of how these three factors can come together for success is an ambitious and innovative energy access project collaboration between ClimateCare and Jaguar Land Rover called Lighting up Lives. The project which aims to bring 1.2 million people in rural and off-grid Kenya solar lighting by 2020, was launched at the Hay Literary Festival this year. For Jaguar Land Rover, Hay is a perfect fit for its brand and core customer audience. Parent company Tata has been the leading sponsor at Hay for many years and has a long history of investing in education and skills, and Jaguar Land Rover believes in using technology for good and in power of engineering to improve lives and help to build a cleaner future.

Hay Festival brings “readers and writers together to share stories and ideas in sustainable events” and is increasingly becoming one of the foremost thought leadership platforms for integrated sustainability thinking. It provided a powerful stage on which to create awareness of the climate and development challenges that this project addresses, and the important role climate finance play.

Indeed, it was at the Festival that the BBC’s Environment Analyst Roger Harrabin chose to air his piece covering Trump’s expected withdrawal from the Paris Agreement, a piece which highlighted the global opposition to a U.S. government that invests in a fossil-fuelled industrial past, rather than a clean tech future.

It is heartening to witness a company willing to take action above and beyond its own immediate sphere of responsibility, leveraging its core skillsets around engineering and technology, to help deliver an impressive set of climate and development outcomes through a single project.

There are myriad ambitious CSR initiatives in place funded by corporates and their well-intentioned partners, all setting out to achieve very laudable goals. But pragmatism is required to secure ongoing funding and a genuine long-term involvement from the corporate sector in international development and climate action. If we are to continue to attract investment from the private sector in large-scale and ambitious sustainable development projects, we need to maintain a ruthless focus on creating measurable positive development impacts, and marry it with a clear commitment to ensuring that the collaboration creates a win-win for people, planet as well as profit.

 

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East Capital?s new Sustainable Emerging Markets Fund leverages proprietary ESG for alpha

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By Roger Aitken — East Capital, an independent asset manager specializing in emerging and frontier markets that manages €2.7 billion (c.$3.08bn/£2.38bn) in public and private equity funds, real estate funds and separate accounts for an international client base, is launching its new Sustainable Emerging Markets fund. It brings together what is touted as the “best long-term and sustainable” stock-picking ideas from around the globe into a single dedicated vehicle. 
 
The launch of East Capital Sustainable Emerging Markets on 30 June by the Swedish firm that was founded in 1997 is coinciding with the company’s 20-year anniversary. Today the Stockholm-headquartered firm in Kungsgatan has office presences in Dubai, Hong Kong, Luxembourg, Moscow, Oslo and Tallinn.
 
Benchmarked against the MSCI Emerging Market Index and with capital provided by Nordic institutional investors, the new fund will be available to institutional and retail investors in most European countries from the outset. The new strategy will pursue an “unconstrained approach” to investing broadly across sectors, countries and market capitalizations.
 
At launch the unit price for all share classes in the Sustainable Emerging Markets fund, an open-ended fund, will be 100 (Euro, US dollar and Swedish Krona). There are several different share classes for retail and institutional clients denominated in the different currencies. 
 
Registered for sale in Sweden, Norway, Finland, the Netherlands, UK, France and Germany, registration for European territories covering Austria, Italy and Switzerland is in pipeline but has yet to be finalized.
 
Peter Elam Håkansson, Chairman and CIO of East Capital who will manage this Luxembourg-domiciled UCITS fund, commenting said: “Twenty years ago East Capital set off to be a long-term, active and responsible investor, based on Nordic values. Since then, we have seen the world and our investment universe changing.”
 
The Swede, who holds an MSc in Finance from Stockholm School of Economics and has studied at EDHEC in Lille, added: “Today we believe more than ever that companies embracing sustainable practices will enjoy competitive advantages. The most interesting investment ideas are outside of extractive industries - and we applied this principle as far back as two decades ago in Russia.”
 
Alongside Håkansson the fund is backed by portfolio managers Adrian Pop and Francois Perrin in Hong Kong as well as Louise Hedberg, Head of Corporate Governance and Sustainability at East Capital. 
 
The fund will invest in companies characterized by high growth potential and strong Environmental Social Governance (ESG) profiles, with a clear overweight in themes relating to domestic growth and the emerging consumer. 
 
It is understood that the strategy will also seek investments in renewable energy and other fast-growing clean technologies. Off-benchmark exposure includes selective allocation to frontier markets and China A-Shares, Chinese companies listed on the exchanges in Shanghai and Shenzhen.
 
With ESG fully integrated in East Capital’s investment process to produce enhanced investment decisions with lower risk, the goal is to deliver a higher return for unit holders. Proprietary and locally sourced ESG data will be deployed for alpha generation capability.
 
Commenting further Håkansson said: “We have always seen an active approach to sustainability as a natural and important part of our investment process as ESG offers insight to both risks and opportunities.” 
 
He added: “China’s war on pollution has set an unparalleled investment program going, which has created one of the largest markets globally for companies providing solutions to sustainability related challenges, companies that this fund will invest in.” 
 
Further information on the fund including the prospectus is being made available at launch, which can be accessed via www.eastcapital.com.
 
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Chinese Battery Manufacturers Take on Tesla

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Elon Musk certainly knows how to score attention. He is clearly media-savvy and has cultivated a strong following on Twitter; and unlike a certain unnamed world leader, he knows how to engage without being toxic or irrationally confrontational. But Musk’s success is not just because of his social media flair. He’s built a formidable company that at one point earlier this year could boast it was the most valuable U.S. automaker. While critics say Tesla’s acquisition of SolarCity is fraught with risk, the company’s much ballyhooed solar tiles could be a game changer in the housing sector.

Furthermore, the promise of energy storage allowing renewables to scale is becoming reality, due to Tesla’s “gigafactory” investments – and Musk has been quick to offer the battery technology to governments who need it to avert crises within their electricity grids.

There is only one problem: Tesla could soon find itself buried by all that energy storage capacity that is barreling out of China. According to a recent Bloomberg report, companies across China have joined a massive rush within that country’s battery cells market.

Tesla says its Nevada gigafactory will churn out up to 35 gigawatt-hours’ worth of battery cells annually once it is fully operational next year. That number in itself is certainly impressive, and Tesla claims that capacity will be almost as much as the world’s total battery production in existence.

But if Chinese battery companies’ plans come to fruition, by 2021, these firms’ total capacity could soar to over 120 gigawatt-hours of power. In other words, those batteries would be enough to rev up 1.5 million Tesla Model S cars or 13.7 Toyota Prius Plug-In Hybrid vehicles. That number alone exceeds the current number of automobile registrations in California.

So despite Musk’s bullish outlook on automobile batteries, “China is poised to leave him in the dust,” wrote Bloomberg’s Joe Ryan.

The potential for China to dominate the global battery market is actually old news. Five years ago, the world’s most populous country was far behind other nations in the development of its energy storage market. But the country embarked upon an ambitious plan to ramp up research and development in this sector; one report by GreenTech Media predicted that the country’s battery storage market would surge in value by a half-billion dollars annually this decade. Concerns over China’s embarrassing air pollution, a spike in renewables production and the country’s surge in peak electricity demand due to rapid urbanization were all motivating factors that convinced the Chinese to invest aggressively in battery production.

In addition, while Musk garnered more attention with his futuristic vision of Tesla’s place in the world, the Chinese multinational BYD already established market dominance, and then some. On just about every metric and product, from total energy storage deployments to electric vehicle batteries and battery-powered buses, BYD comes out far ahead. Last year, BYD’s research and development team claimed it had 16,000 employees – about the same number as Tesla’s total workforce. “Musk is playing catch-up in a game he thought he had just invented,” sniffed GTM’s Matthew Klippenstein last summer in an article showcasing BYD’s supremacy in the global battery market.

Nevertheless, Bloomberg warns that China has not quite yet left Tesla behind. Musk’s company still has four more gigafactories on the drawing board. Other than BYD, Tesla’s scale far outpaces many of its competitors in China, where the battery market is far more fragmented. The Chinese government, however, is pushing for more consolidation in the battery market so that it can compete more effectively worldwide. In any event, more competition can only be good for electric cars, automakers and in the end, consumers.

Image credit: Tesla

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Beyond Meat’s Meatless Burger Debuts Nationwide

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Just in time for July 4th, the fake meat trailblazer Beyond Meat has landed its Beyond Burger on the menu of a popular nationwide chain. Beginning Monday, the vegan beef doppelgänger, made of pea protein, coconut oil, beets and potato starch, will make its debut at eight of BurgerFi’s 101 locations. Both companies say the Beyond Burger will roll out nationwide at the Florida-based chain by the end of this summer. Customers will be able to order the Beyond Burger on BurgerFi’s on the company’s signature stamped bun, or served as a lettuce wrap.

Becoming a supplier of BurgerFi is a big win for Beyond Meat and its co-founder and oft-spokesperson Ethan Brown, which together first made a splash five years ago when its imitation chicken strips appeared in the cold case as many Whole Foods locations. The company has since launched a faux ground burger product, along with the Beyond Burger, which is sold at selected Whole Foods butcher counters; in May, Safeway announced the product would be sold at hundreds of its stores. Last year, Beyond Meat went even further mainstream after Tyson Foods invested in the company.

It has not always been smooth sailing for Brown and Beyond Meat, as their knocks on the doors of fast food companies often went unanswered. In a recent interview with the New York Times, Brown explained that his attempt to build a trade show stand similar in appearance to an In-N-Out restaurant earned him a cease-and-desist letter from the California burger chain.

Beyond Meat can now join one of its top competitors, Impossible Foods, as they conquer the fast food market. Impossible Foods’ “Bloody Burger” hit the New York food scene last year, and has since made more appearances at restaurants nationwide.

So start saying good-bye to the dull, granular or rubbery veggie burgers of yesterday. Consumers increasingly desire high-protein options, but not necessarily at the cost of cardiovascular health or animal welfare. Beyond Meat and Impossible Foods prove that vegetarian grub does not have to sacrifice taste, and unlike the global meat industry, does not carry the baggage of a deforestation and a massive carbon footprint.

 

Image credit: Beyond Meat

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United States Drops to Second Tier On Social Progress

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Ask any North American what his or her measurement for success is and you'll probably hear money is one of the top indicators of a comfortable, good life.

And it's true. United States residents score pretty well when compared with those of many other countries . We generally have the ability to earn a lot more than say, most Guatemalan workers, who earn an average of $346 per month. And almost all of us can afford to send our kids to school, unlike in say, Niger, where 40 percent of children don't go to school. And no matter how expensive our cell phone bill may be, we still can count on a dependable communications network where we live, unlike in many places in Sub-Saharan Africa.

But according to the nonprofit Social Progress Imperative, which has put together an index by which to score each nation's social and economic opportunities, our paychecks don't really paint a true picture of the level of opportunity we have in our country.

Instead, there are other nuanced ways to look at a nation's progress and current standing across the globe, like the very things we use that money for: access to lodging, a quality environment free from pollution with robust laws and methods to protect that ecology, or higher education options for out-of-school grads. And while we don't think of freedom of speech as a reflection of our economic standing, freedom of expression and religious tolerance are strong indicators as well.

And that's where the bad news comes in. The United States, once thought of as the bastion of opportunity and accomplishments, is now a second-tier nation.

What's a Second-Tier Nation?


The Social Progress Index rates countries based on a comprehensive score of three key areas: Basic Human Needs, Foundations of Wellbeing and Opportunity: Basically, the three tiers of advancement. The authors further broke those categories down to what it takes to achieve success: Things like basic access to knowledge, water and sanitation and personal rights.

They found that while the U.S. excelled in providing access to education and in the number of people with post-secondary schooling, the country failed in a wealth of other areas, including health and wellness, tolerance and inclusion and access to information and communications.

The U.S. had improved slightly from last year in terms of environmental quality, but it had plummeted in regard to tolerance and inclusion. Personal rights had also dropped, as had guarantees to personal freedoms and choice.

Its neighbor, Canada had dropped in overall scores as well, although Canada was still considered a top-tier nation, meaning it excelled in areas that the U.S. didn't: higher education scores, nutrition and basic medical care, and personal rights. But it had also dropped when it came to basic human needs and opportunities afforded its residents, like personal rights, freedoms and choice.

This year's top-ranking country was Denmark, which was found to offer a better selection of affordable housing than most developed nations as well as better access to information and communication. But it suffered considerably when it came to scores for parity in education. Researchers were also unable to determine the literacy rate of adults in Denmark.

The Social Progress Index is only one of several new tools that have been developed in recent years to determine the true "wealth" of a society. The Happiness Index and the Dow Jones Sustainability Index are two more pieces to a puzzle that increasingly seem to point toward the idea that while money is useful, it isn't what defines our idea of the perfect society.

Images: Child with puzzle - Flickr/gosheshe; Map and graph - Social Progress Imperative

 

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KLM Brings Sustainability and Customer Care to 30,000 Feet

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With over 35 million passengers flown and revenues soaring over $11 billion last year, the Dutch national air carrier KLM is one of the world’s most vital international air carriers. The 98-year-old airline benefits from the ease at which one can transfer at Amsterdam’s international airport; talk to a Brit in the know, and he or she may tell you it’s often easier to hop on a plane to Amsterdam to fly abroad instead of dealing with one of London’s airports.

But KLM’s 100-plus total fleet exacts a sizeable carbon footprint on the planet. To that end, the airline says its staff is determined to do whatever it can to mitigate its carbon emissions, and will leverage any solution available to ensure its fleet operates as sustainably and efficiently as possible. TriplePundit recently sat down with members of KLM’s corporate social responsibility (CSR) and social media teams to learn about both the airline’s recent successes and future challenges. The airline also shared examples of how what it says is its culture innovation is key to improving the company’s performance on the ground, as well as to improve communications with its customers.

As is the case with any airline, the largest challenge this sector faces are those pesky carbon emissions. Like many air carriers, KLM has tinkered with algae-based biofuels, but those efforts never materialized. For a while, the airline operated a JFK-Amsterdam flight fueled in part by recycled cooking oil; currently KLM sources biofuels from SkyNRG for a Los Angeles-Amsterdam trek.

But as explained by two KLM corporate responsibility representatives, Fokko Kroesen and Esmée van Veen, during 3p’s visit to Amsterdam last week, the airline is scouring through entire operations in order to find ways to meet its goal of reducing carbon emissions 20 percent per passenger from 2011 levels by 2020. Those efforts are necessary as at best, as biofuel blends can only help reduce the carrier’s carbon emissions by 1 percent.

A more efficient fleet, improved operational efficiency across all of KLM and carbon offsetting are some wasys by which KLM can approach that 20 percent emissions reduction goal for 2020. The airline’s investment in the Boeing 787-9, or Dreamliner, uses 40 percent less fuel than comparable planes. But regardless of the model or age of its aircraft, Kroesen and van Veen repeatedly gave examples of how KLM leaves no stone unturned in finding ways to chip away at emissions. The washing of planes’ engines, for example, can help planes fly more efficiently and reduce the company’s emissions by as much as 0.8 percent (and yes, that water is captured and reused).

Other little steps can contribute to KLM's environmental goals. The airline is phasing out hauling newspapers on its flights – passengers instead are increasingly directed to read their favorite daily via a KLM app on their electronic devices. Fewer newspapers also means less waste – important to the company as it has a goal to slash its landfill waste 50 percent from 2011 levels by 2025.

Lightweight nets used to pin down cargo also offer small but not insignificant fuel savings. Tabulate all those reductions, and KLM says it has conserved almost 1.6 million gallons of jet fuel last year – or the equivalent energy consumption of 1,900 Dutch households.

Another way in which KLM strives to reduce its emissions is through carbon offsets. The company’s CO2ZERO program offers passengers an option to compensate for their emissions by offering what KLM says is a seamless, effective and reasonably priced way to fly carbon-neutral. When 3p challenged the airline’s CSR representatives on whether this was really effective in mitigating KLM’s economic impact, they replied that various offset programs, such as more sustainable cookstoves in emerging economies, were vetted by WWF’s Gold Standard offset certification program.

While fuel will always be the top priority of any transportation service seeking to reduce its environmental footprint, KLM insists its responsibility agenda has positioned the airline as a leader within the global aviation sector. The company has made changes on its menus so that inflight catering is more responsible. Many of KLM’s onboard meals contain organic or sustainably sourced ingredients. Coffee served onboard is certified by the fair trade organization UTZ (which recently announced its merger with Rainforest Alliance). Foodies can be assured the chocolate given onboard is fair trade-certified; if one happens to be in business class, those sweets can be paired with organic wines KLM has added to its beverage choices.

While KLM’s shift to fair trade-certified products can generate impact in communities far from its hub in Amsterdam, the airline also works with international organizations to enact change across the globe. KLM is a signatory to the United Nation’s Global Compact initiative, and has also worked to engage its employees to volunteer for organizations including UNICEF.

Those same employees are also encouraged to share their ideas with the airline in order to help the company become more efficient and sustainable. Processes that may seem benign to passengers, such as new boarding procedures, can help the airline operate more effectively and reduce times taxing on the runway or consuming power while grounded - which in the end can help KLM chip away at its carbon emissions. At its hub at Amsterdam’s Schiphol airport, the company has an “X-Gate” program, at which “new ideas and sustainable innovations,” in the words of KLM’s CSR team, can be tested.

In the end, finding new ways to get passengers on and off planes quickly and safely is just one way to improve the customer experience. Various KLM leaders who spoke to 3p constantly repeated the refrain that its customers are central to its drive to become company both responsible and responsive. The airline really has no choice – Europe’s aviation sector, long before Southwest and JetBlue jolted the travel industry across the pond in the U.S., has long been hyper-competitive thanks to the likes of RyanAir and easyJet; low-cost newbies such as Norwegian Airlines and Spain’s Level are further disrupting the aviation sector. With countless options for booking flights, as well as the various media channels by which passengers can share their concerns and complaints, KLM must be nimble in order to not only retain their customers, but to keep them happy and feel as if they are listened to: without them, there is no business, sustainable or otherwise.

Technology is the means by which KLM is improving the customer experience. The airlines social media head, Karlijn Vogel-Meijer, explained this brave new world of customer service. “We have to be where the customers are,” she said as she offered a tour of the airline’s social media hub.

Gone are the days where an airline can develop a smartphone app and hope to offer products and converse with customers solely on that channel. Passengers appear to be on almost as many apps as the 130-plus international destinations KLM serves. Chinese customers prefer WeChat; Facebook Messenger and Twitter are also popular forums by which customers interact with KLM staff. Forget about the response, “you can buy your ticket on the KLM web site or app.” The airline’s social media hub is staffed 24/7 to ensure no request or concern falls through the cracks. A monitor showcasing a word cloud at an office next to the airport at Schiphol shows employees an idea of how the company is performing in real time. But not only does this social media team put out fires before they start, they are adding to the company’s coffers – at last count, sales occurring via social media channels generated over $30 million for the company last year.

Rather than fearing and trying to control social media, KLM appears to embrace social media as a way to conduct business, interact with consumers and accept it as a way to monitor its progress. “The proliferation of handheld devices and social media is empowering consumers and encouraging the industry to become more transparent,” concluded the company in its most annual report.

KLM’s peers are certainly noticing. The company is a mainstay on the Dow Jones Sustainability Index, appearing on the list’s airline roster for 12 years in a row.

Image credits: KLM

Disclosure: KLM funded Leon Kaye’s trip to Amsterdam. Neither the author nor TriplePundit were required to write about the experience.

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Policy Points: Regulation Reform -- Bad Solutions for the Wrong Problem

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By Richard Eidlin

Business hates regulation, right? Frank Knapp, president/CEO of the South Carolina Small Business Chamber of Commerce and board co-chair of the American Sustainable Business Council, says that’s wrong. And he said it for the record in March, in testimony before the U.S. Senate Committee on Small Business & Entrepreneurship.

“Small businesses do not resent good regulations. American Sustainable Business Council (ASBC) polling has found that 86 percent believe that regulations are necessary and 93 percent believe their business can live with fair and manageable regulations.”

Calling them “the rules of the game,” Knapp said regulations level the playing field to prevent unfair, innovation-stifling competition from big businesses” and “keep families, neighbors, workers, communities and environment safe and healthy,” and business leaders know that.

Regulation per se is not the problem; it’s the lack of resources within agencies like SBA and OSHA for helping small firms comply that’s the real issue, Knapp said.

What’s not working?


The process to develop a rule that implements a law passed by Congress can take years and years to finalize. Knapp said that the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, while well intended, is not giving small firms the opportunity to provide input into the regulatory decision-making process because the process, “has been taken over by powerful, often big-business special interest groups lobbying the agencies.” So-called reforms, promoted by groups like the U.S. Chamber of Commerce, don’t address this.

Compounding the unfair advantage that big business has in setting policy, Knapp added, “In addition to their Washington clout, the anti-regulation interests have used the courts successfully to give us regulatory paralysis. These efforts for the most part aren’t to simply lessen a burden on small businesses. Instead, they are designed to help big businesses protect themselves and prevent competition by stalling the regulatory process so that even good, well-thought out and needed regulations are left in limbo.”

In an ASBC interview, Knapp said that “Uncertainty about what will be required of us due to litigation is simply bad for business.

“Small companies don’t have the financial clout to influence legislators in writing laws that benefit them. Small businesses also don’t have a fleet of top-priced lawyers standing by to help them navigate and comply. So regulations disproportionately affect small and mid-sized companies and they don’t address our problems. When smaller business owners say they dislike regulations, this is why.”

Plans to make things even worse


The Regulatory Accountability Act, introduced this past spring by leading Republicans in the House, pretends to help by relaxing rules for companies in finance, fossil fuels and other influential industries. According to Knapp, it will make it easier for big companies to tie up regulations in expensive lawsuits. Small business is used as justification, but reforms completely ignore the problem small businesses has complying with numerous existing federal regulations.

“We need regulatory responsibility to focus on helping small business with compliance. Now, the Small Business Administration’s national ombudsman is supposed to solicit feedback from small businesses to uncover systemic problems companies are having with compliance, and go back and fix them. What really happens is that they get the feedback, uncover a problem – and then go fix another problem they’d rather deal with. It’s classic misdirection at the behest of lobbyists. If they set out to make business resentful of regulations, this would do it.”

The RAA adds 53 requirements to the regulatory process and another proposal ― the Regulations from the Executive in Need of Scrutiny (REINS) Act ― would require new regulations with an economic impact larger than $100 million to be approved by Congress. It also would require at least one chamber of Congress to approve any new regulation within 70 days of the rule’s proposal. All of these would discourage passage of needed protections for the public and smaller businesses and would let irresponsible corporations avoid accountability for their damaging actions. The costs to clean up damage, whether from financial meltdown or ongoing pollution, would continue to be borne disproportionately by smaller businesses and other taxpayers.

Business support for good regulations


For our part, we at the American Sustainable Business Council came out against the RAA in January. “This would be like taking a chainsaw into surgery,” said CEO David Levine. We also have a sign-on statement for business people to lodge their opposition to the RAA.

What would be better? Perhaps SB 1146 offered by Senator Jeanne Shaheen, the purpose of which is, “To enhance the ability of the Office of the National Ombudsman to assist small businesses in meeting regulatory requirements and develop outreach initiatives to promote awareness of the services the Office of the National Ombudsman provides, and for other purposes.”

Currently, Knapp says, a small business needing help complying with a federal regulation first contacts the federal agency for clarification and advice. But, says Knapp, “a small business owner doesn’t stand much of a chance in working with a big federal agency to get personal attention even if that agency has an ombudsman.”

Next, the business owner contacts the Office of the National Ombudsman to intercede with the agency and find a resolution. But, says Knapp, “The Office of the National Ombudsman is a tiny agency virtually unknown outside the SBA. That can be changed with reasonable funding, as originally planned and now called for in Senator Shaheen’s bill.”

“When business says ‘we need regulation relief,’ that doesn’t mean letting unscrupulous corporations wreak havoc on the rest of us. The current regulatory process can produce good rules while protecting small businesses from unnecessary burdens. But the relief business truly needs is proper, fair enforcement and practical, prompt assistance in compliance. Congress has already established a reasonable process; now we need it to give federal agencies the funding required to make that process do its job for small business and the nation,” he said.

Richard Eidlin is Co-Founder and Vice President of Policy for the American Sustainable Business Council.

Image credit: Internet Association, Flickr

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EPA Administrator Met Privately with Dow Chemical CEO Before Reversing Pesticide Ban

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Update: The AP is reporting that the scheduled meeting never happened. Environmental Protection Agency Administrator Scott Pruitt’s schedule showed he was slated to meet with Dow CEO Andrew Liveris on March 9 for about a half-hour at a Houston hotel. Rachelle Schikorra, a spokeswoman for Dow, said the formal meeting “never happened due to schedule conflicts.”

According to the Associated Press, Environmental Protection Agency (EPA) Administrator Scott Pruitt met privately with Dow Chemical’s CEO Andrew Liveris during an early March conference held in Houston. Less than three weeks later, Pruitt announced that he would deny a petition filed to prohibit Dow’s chlorpyrifos pesticide from being sprayed on agricultural products.

When the EPA made its final decision on chlorpyrifos March 29, the Natural Resources Defense Council (NRDC) attacked the ban reversal, insisting that the pesticide has links to the increased risk of behavioral problems and learning disabilities in children. “Pruitt’s decision contradicts the guidance from experts within the agency itself, reflecting a stark refusal to follow the science,” the NRDC said in a terse public statement that same day.

The NRDC has long maintained that exposure to low levels of the pesticide comprises a serious public health threat.

Despite Pruitt’s reversal, the EPA still publicly disclosures risks related to chlorpyrifos, which has been used for agricultural and other uses since 1965. Dow has marketed the chemical, branded as Lorsban, since 1972. The EPA acknowledges that high doses of the pesticide can overstimulate the central nervous system, cause symptoms such as nausea and dizziness and in high doses can lead to respiratory paralysis and even death.

But even though there is evidence that residues of chlorpyrifos on food and in drinking water have appeared exceeding the safety standards set by the U.S. Food, Drug and Cosmetics Act (FFDCA), the EPA defended its March decision. “No-spray buffers around surface water bodies,” as well as reductions in overall agricultural use, were enough to reduce the “environmental burden” of chlorpyrifos.

“We will continue to review the science addressing neurodevelopmental effects of chlorpyrifos as part of the ongoing registration review,” concluded the EPA, noting that it had until October 1, 2022 to amend this decision.

Dow Chemical, in addition to some scientists at the U.S. Department of Agriculture (USDA) insist that exposure to chlorpyrifos at levels set by the EPA is safe. "Dow AgroSciences remains confident that authorized uses of chlorpyrifos products offer wide margins of protection for human health and safety," spokesman David Sousa told CNN in late March. "This is the right decision for farmers who, in about 100 countries, rely on the effectiveness of chlorpyrifos to protect more than 50 crops."

Incidentally, last month Dow was named as one of the EPA’s “Safer Choice Partner of the Year” for its “increasing confidence in chemical technology” and being at the “forefront” of developing sustainable and safer alternatives” to other chemicals on the market.

Discussion over the science of whether exposure to chlorpyrifos is safe or risky notwithstanding, what is more than just raising eyebrows is yet another example of the Trump Administration’s cozy relationship with selective leaders of the U.S. business community. The EPA has strenuously denied that chlorpyrifos was a topic of discussion between Pruitt and Liveris, but some observers are not buying that line.

One who objects to the administration's actions around the time Pruitt and the EPA reached a decision on chlorpyrifos is Rhett Jones of the tech blog Gizmodo. Jones pointed out that when Trump signed an executive order declaring that for every new regulation created, two must be eliminated, Liveris was the recipient of one of the pens used at the signing ceremony. Dow also reportedly donated $1 million to Trump’s inauguration fund. Not that this administration cares about how it conducts itself, but once again, the optics look bad – especially when considering that when the EPA was asked about the decision in April, a spokesperson for the agency denied any such meeting occurred in the first place.

Image credit: Roy Luck/Flickr

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Dreamliner -- the Linchpin for KLM’s Emission Reductions Goals

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The number of passengers projected to travel worldwide is projected to double the next 20 years, which poses a huge dilemma for the global aviation sector. On one hand, the international travel boom offers countless business opportunities. But just about every airline CEO knows that their companies’ stakeholders are keen on the industry becoming far more responsible and sustainable. One obvious solution is tackling the emissions this carbon-intensive sector generates due to its ravenous consumption of fossil fuels.

But the promise of alternative jet fuel has been a hollow one for airlines. The Netherlands' national carrier, KLM, is one of many companies that  strive to incorporate more biofuels into its energy portfolio. In 2009, KLM was the first airline to haul passengers other than flight crew on a one-hour flight fueled partly by camelina oil. In recent years, the company has experimented with blends of conventional and alternative jet fuels, including mixes of kerosene and fuel derived from used cooking oil. Flights across Europe were sometimes fueled by a 50-50 blend of kerosene and recycled vegetable oil; for a while, a weekly flight from New York’s JFK Airport to Amsterdam crossed the Atlantic using a similar blend. Currently KLM is in the midst of a three-year contract to source biofuels for a flight it operates from Los Angeles to Amsterdam.

But the problem KLM and its competitors face is scalability. “Technical, social, and regulatory barriers have limited both the production of bio-derived jet fuel and the growth of the industry,” concluded a U.S. Department of Energy (DOE) report issued earlier this year.

The result is a huge challenge for KLM, as its parent company, Air France-KLM, has set a target to reduce its emissions 20 percent from 2011 levels by 2020.

KLM’s investment in the Boeing 787-9, or the Dreamliner, is key to the company’s drive to reduce its carbon footprint and groom its sustainable travel credentials. KLM recently invited TriplePundit to fly on trans-Atlantic flights to Amsterdam and experience one of the airline’s key strategies in reducing its global emissions.

Flying aboard a Dreamliner is definitely a step up from traveling on older models of Airbus and Boeing aircraft. The first thing one notices is how relatively quiet the plane is compared to the A330, 747 or 777 families. The interior lighting, which the cabin crew can modify in order to recreate various stages of day and night, is far easier on tired eyes. LEDs and dimmable windows (no more flapping window shades!) allow one to readjust slowly back to daylight after napping on a flight.

In addition, say good-bye to that claustrophobic feeling in coach in the event one’s flight is aboard a trans-oceanic flight crammed within a single-aisle 737 or A320; even on a full flight, the Dreamliner feels far more spacious. And of course, a seat in KLM’s business class makes for a sublime journey. The reverse-herringbone configuration of those seats and flat beds, which is becoming standard even on older aircraft, allows one to cocoon and minimize any social interaction during the flight. KLM’s corporate responsibility team explained that the consumer experience was critical to the company’s overall strategy, and that vibe is certainly evident aboard flying aboard one of its Dreamliners.

But the Dreamliner’s environmental street cred is what really makes this plane stand out. The quiet flight is in part made possible by the carbon fiber composite that comprises the aircraft’s body. Furthermore, the plane’s engines, which emit sounds at 85 decibels (the equivalent of street traffic), also consumes about 30 percent less fuel than comparable passenger airplanes, giving KLM a boost as it seeks to tackle those pesky emissions reduction goals.

Across its fleet, KLM claims to be doing whatever it can to mitigate its flights’ carbon footprint. KLM’s corporate responsibility team explained that each Dreamliner is painted using 15 percent less material that what is typically applied, and the paint is also formulated so that it can be cleaned with a simple soap and water solution – allowing the company’s maintenance team to avoid solvents toxic to the environment. On board the Dreamliner, the carpets, made by Desso, may not appear at a first glance to be anything special, but KLM says they are recycled fibers made of old KLM uniforms and aircraft carpeting.

Even tweaks within cargo section of a Dreamliner contribute to KLM’s push to reduce emissions. Netting used to secure cargo is made of a lightweight polyethylene fiber that the airline says is 50 percent lighter than the usual standard aboard similar aircraft – and it has a longer lifespan of five years instead of three.

Additional details may escape the weary traveler, but KLM says they boost the airline’s quest to reduce emissions. The trolleys that roll along the planes’ aisles are as much as 17 pounds lighter than previous ones used – which on a long flight eliminates over 880 pounds of materials that otherwise would have been hauled. Even the meal trays, made of a lightweight polyethylene, can help reduce a flight’s load by 35 pounds – a number not to be sniffed at when multiplied by the number of daily and annual flights KLM operates.

The Dutch can certainly be stereotyped as pragmatic, and this certainly applies to KLM’s ethos. Sure, the Netherlands has a reputation for being forward-thinking on sustainability, and that mantra was certainly repeated during 3p’s visit to various corporate offices. But there are limits to how far KLM will go to reduce its emissions. Don’t expect boxed wine to appear on a trolley anytime soon. The same goes for the iconic Delft ceramic blue houses that KLM has given to its business class passengers since the 1950s. “The consumer experience is still very important to KLM,” explained a member of KLM’s corporate responsibility team during a presentation given to 3p and other media representatives last week.

To date, KLM says all these efforts have resulted in at least a 13.5 percent decrease in emissions since 2011 – making that 20 percent reduction goal by 2020 a realistic proposition. The efficiencies the Dreamliner provides KLM will play a huge role in helping the airline meet its goals --compromising the customer experience at 30,000 feet.

Image credit: KLM

Disclosure: KLM funded Leon Kaye’s trip to Amsterdam. Neither the author nor TriplePundit were required to write about the experience.

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