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An organized effort to prevent corporations from practicing ESG (environmental, social and governance) principles has gained traction among state-level Republican officials in recent years. They typically deploy scary rhetoric about the evils of “woke capitalism” to make their case against ESG investing and corporate practices. However, the movement is beginning to run out of steam. Business leaders are pushing back, and a new study from Rokk Solutions indicates that voters on both sides of the political divide are siding with them.

The anti-ESG movement sowed the seeds of its own destruction

From the beginning, many have said the anti-ESG movement was nothing more than a thinly disguised effort to protect fossil energy industries and prevent investor dollars from flowing into decarbonization technologies, including energy storage as well as wind and solar power. Some anti-ESG measures are also aimed at protecting gun industry stakeholders.

In some cases, there has been no disguise at all. Republican office holders in Texas, for example, passed a state law in 2021 that explicitly prohibits state pension funds from doing business with financial firms that “boycott” fossil energy industries.

Anti-ESG laws are ostensibly aimed at protecting pensioners, but because they have no basis in actual bottom-line impacts, they can backfire. In some cases, banks and other investment firms can pack up and take their business elsewhere. In Texas, for example, competition dried up after the anti-ESG law passed, costing the small city of Anna $277,334 on its bond sale.

In addition to interfering with direct bottom-line decisions, the anti-ESG movement also interferes with businesses that are pursuing DEI (diversity, equality and inclusion) goals. A strong DEI policy helps businesses to attract and retain top talent while building stronger relations with communities, consumers and clients. In contrast, the anti-ESG position overlaps with the “woke capitalism” canard and with hate speech expressed by white supremacists and religious extremists, a sentiment that poses reputational risks for businesses.

Big business quietly finds its voice

To a great extent, businesses only have themselves to blame. Many U.S. corporations have provided financial support to help raise Republicans to power in both the legislative and judicial branches, only to see the “party of big business” suddenly turn around and become their enemy. 

But those financial ties may have helped some business leaders gain the ear of Republican office holders. Earlier this week, reporter Ross Kerber of Reuters took a deep dive into the issue. Among other leaders, he spoke with Lauren Doroghazi, senior vice president at the consulting firm MultiState Associates, who said businesses have seen some success lobbying against anti-ESG bills. Doroghazi estimates that businesses and their allies have succeeded in nipping more than 80 percent of state-level, anti-ESG proposals in the bud, though many still remain on the table.

Kerber also spoke with BlackRock Chief Financial Officer Martin Small, who also indicated that investment firms have had some success in alerting Republican office holders to the potential for anti-ESG bills to backfire and the resulting costs for public pension plans.

For example, earlier this month in Kansas, the state’s own Division of the Budget released an estimate that a newly proposed anti-ESG bill would cut state pension returns by $3.6 billion over a 10-year period, Kerber reported. Legislators made some changes in the bill, and a watered-down version eventually passed into law on April 24. However, it still includes provisions aiming to prevent public officials from considering ESG principles in financial transactions.

Your indoor voice is not working

So far, most of the corporate pushback against anti-ESG laws is happening in meetings behind closed doors. That strategy has met with much success, according to Doroghazi’s analysis. But the approximately 1 in 5 anti-ESG laws that do pass could do considerable damage. Even if banks and other financial firms suffer little direct impact, businesses could still feel the ripple effect and reputational loss of doing business in states with anti-ESG regulations and increasingly repressive social policies. 

Businesses can and should begin listening to public opinion and amplifying the public's voice. Survey after survey shows that the majority of U.S. voters and other adults support climate action, abortion rights, racial and gender equality, restrictions on gun ownership, and other progressive values that are consistent with corporate ESG principles.

The fact is that the public voice needs help. Minority rule by Republican office holders has become a feature in states like Wisconsin, where gerrymandering has provided Republican districts with outsized power relative to their population. 

With red-state Democratic representation concentrated in cities, state-level Republican office holders can also consolidate power by stripping municipalities of their authority to govern. In Texas, the state legislature is currently considering a bill that would pre-empt local control by cities and counties on a variety of issues including drought response, predatory lenders and worker protections. The Tennessee legislature has moved to undermine Democratic representation in Nashville, and the New York Times has described how state legislatures in Georgia and elsewhere are stripping power from local election boards.

It's time to pick sides on ESG

At the same time, the opinions of U.S. voters and consumers are becoming more aligned with ESG principles, and the up-and-coming generation of workers is turning away from employment in fossil energy industries.

Last week, the K Street communications firm Rokk Solutions issued an updated survey of voter opinions undertaken last year. The latest polling found that a majority of voters in both parties “believe corporate environmental action is relevant to their financial futures.”

“This belief increases for specific efforts like conservation and resource management,” the report reads. Strong majorities of both Republican and Democratic voters also view de-risking business as important to their financial futures. In particular, voters in both parties indicate that climate action is “important to their financial fortunes.”

“Republican support rises significantly for specific areas like water conservation, waste management and biodiversity,” Rokk found.

Republican voters are still skeptical of long-term climate goals, and a partisan difference of opinion persists on social issues, the report found. Still, the growing consensus on specific areas of sustainability provides businesses with a common ground on which to make the case for ESG investing, out loud and in public.

Image credit: Joshua Sukoff/Unsplash

The European Parliament approved a new law last week to ban the import of commodities tied to deforestation, a leading cause of climate change that accounts for about 10 percent of global greenhouse gas emissions. 

Every day, an area of forestland the size of New York City is lost to deforestation — largely linked to the expansion of land used for agriculture. Countries such as Brazil, Malaysia, Indonesia, Nigeria, Ethiopia, Mexico and Guatemala have lost an enormous amount of tree cover over recent years. 

EU consumer demand alone is responsible for 10 percent of deforestation worldwide, according to the European Commission. The new law requires companies to undergo a due diligence process and provide traceable information that proves their products were not grown on areas deforested or degraded after 2020. The import ban largely affects palm oil, rubber, coffee, wood, beef and soy. 

Companies must provide EU regulators with proof of their due diligence claims, such as geolocation coordinates of their operations, as well as statements from the company that the rights of Indigenous peoples living in the area are respected. The EU will use satellite technology and DNA sampling to verify geolocation coordinates.

What does the law mean for business?

Once individual EU countries formally approve the new rule, large companies will have 18 months to comply and small companies will have two years. Companies that do not comply with the new law will face fines of up to 4 percent of the company’s total turnover in the EU. 

This move has alarmed growers and policymakers in countries most likely to be affected. Malaysia has threatened to stop exporting palm oil to the EU, as smallholder farms in Malaysia say they are unable to comply with the geolocation requirements. Brazilian agribusiness giant ABAG has also condemned the new law.  

However, other countries have worked to stay ahead of the legislation. Ivory Coast is the world’s largest cocoa producer, and its Minister of Agriculture has already set up a registration and geolocation system for cocoa farmers across the country. Producers have been issued identity cards with the geolocation coordinates of their farms, and unregistered farms are not permitted to sell or market their cocoa. The Ivorian agriculture ministry is monitoring the average output of cocoa farms for any sudden growth that would indicate land expansion, and it has threatened prosecution for producers that engage in deforestation. 

Similar deforestation laws soon to come in the U.S.? 

The United States Congress is considering a similar bill. The Forest Act was introduced in the Senate in 2021 but has not been put to a vote. However, the passage of the EU law has given the U.S. bill new urgency.

Sen. Brian Schatz of Hawaii, who sponsored the bill, plans to reintroduce it this spring. “The EU is shutting its borders to products of deforestation, and the United States needs to follow suit," Schatz told the Guardian. "If we do nothing, the U.S. market will become a dumping ground for commodities that can no longer make their way into Europe.”

Meanwhile, activist organizations such as Greenpeace say the EU law doesn't go far enough, objecting to loopholes that exclude protections for crucial grassland and wetlands ecosystems and fail to prosecute European banks that finance deforestation projects.

Christophe Hansen, MEP from Luxembourg and lead EU negotiator for the legislation, told Euractiv the new law is “not perfect,” but a necessary start. The law requires reviews after one, two and five years to assess its scope — including whether it should integrate other land ecosystems, encompass a wider selection of commodities and products, and further regulate European banks, he said. 

Hansen also called on the European Commission to set up a system that provides technical and financial assistance to smallholder farmers that cannot meet the requirements. “Otherwise what would they do? Well, probably deliver to somebody that is not having the same expectations,” he told Euractiv. 

Image credit: Oleksandr Pidvalnyi/Pexels

You’ve likely heard about AI chatbots, the latest tech innovation sweeping the globe. But did you know that AI, or artificial intelligence, could also help save corals? Through a novel citizen-science project, time mindlessly wasted online can be put to use helping scientists understand, and even restore, the world's coral reefs. 

Google teamed up with a pair of marine biologists, Steve Simpson and Mary Shodipo, to launch the Calling in our Corals project earlier this month. The platform aims to use acoustic recordings to measure the success of marine protected areas and other restoration programs, with a little help from everyday people as well as AI. 

Coral reefs are a hotspot for biodiversity and provide a range of benefits for people and the environment, but they're also one of the most threatened ecosystems on Earth. Soundscapes are a promising new tool to help restore them. Plus, unlike cat videos, listening to the weird cacophony of coral sounds is a guilt-free distraction.

How does this AI model work?

Marine biologists have recorded the surprisingly vibrant sounds of coral reefs in 10 countries. The chirps and grunts of healthy reefs burst forth like a lively metro area at rush hour, while the muted tones of damaged reefs resemble a sleepy village. Anyone can log onto Google's platform to listen to these reef recordings and identify sounds made by fish, shrimp and other underwater animals. These crowd-sourced data are then used to train an AI model.

AI may sound like something out of a science fiction movie, but this branch of computer science was invented in the 1950s. It works by taking in large amounts of training data, crunching the data for patterns, and using those insights to make predictions. 

Scientists have collected hundreds of hours of recordings, so they need many participants to sculpt training data out of this ocean of underwater acoustics. The researchers plan to use this tool to better understand coral reef diversity and hopefully pinpoint individual species.

But that’s not all. Impressively, this tool may also help to restore reefs. Some animals, like fish larvae, corals and other invertebrates, spend their larval stage in the open ocean. The sounds of a healthy reef act like a beacon, encouraging juvenile animals to settle there. Consequently, playing the music of healthy reefs on underwater speakers may accelerate their regrowth and restoration.

Coral reefs benefit people and the planet

Noisiness aside, restoring these valuable habitats provides many benefits. For starters, coral reefs are one of the most biodiverse places on the planet. Known as the rainforests of the sea, they cover only around 1 percent of the ocean floor but support nearly 25 percent of all marine species, including fish, turtles, corals, lobsters, sponges, sea stars and clams. Numerous commercially-fished species depend on coral reefs during part of their life cycle, generating more than $100 million annually in the U.S. alone. Likewise, recreational fishing on coral reefs contributes an additional $100 million each year to the U.S. economy.

But that’s just skimming the surface. Coral reefs also act as natural breakwaters that buffer us from the ocean. Reefs can absorb up to 97 percent of a wave's energy, protecting shorelines from storms, waves and floods. This prevents erosion, property damage and loss of human life in coastal communities. Globally, coral reefs are estimated to reduce storm damage by nearly $5 billion each year. 

Finally, it’s no secret that coral reefs are beautiful places. Millions of tourists flock to these places for diving, snorkeling and boating — contributing an impressive $44 billion to local economies annually across the globe. Overall, coral reefs provide food, livelihood, shoreline protection and other services to a billion people.

But they're under increasing threat

Unfortunately, the global extent of these habitats has declined by half since the 1950s, with subsequent losses in biodiversity and catches of coral-reef-associated fish. The coral reefs remaining are predicted to degrade rapidly over the next 20 years.

Coral reefs face a laundry list of threats including coastal development, sediment runoff, pollution, invasive species, poorly managed tourism and unsustainable fishing practices. And then there’s climate change, the screeching trombone of the coral reef symphony.

Global warming fuels rising ocean temperatures, which can stress corals. Prolonged periods of extreme temperatures can lead to coral bleaching as corals expel their symbiotic algae. Without the helpful algae, corals lose their vibrant hues and major food source. They’re also left more vulnerable to disease. Bleaching events often kill corals outright, while less severe incidents can weaken corals by reducing their growth and reproduction. Regrettably, bleaching events have become five times more frequent since the 1980s. Ocean acidification, another side effect of climate change, can also slow coral growth and weaken their skeletons.

How you can get involved 

Coral reefs are vital ecosystems that need protection. If you have the time, start training and contributing to the listening project. Training lasts only three minutes, while the clips of reef sounds are just 30 seconds each.

This citizen-science project makes a great activity or contest for students, companies or clubs. It’s an easy and fun way to help one of the world’s most valuable habitats and safeguard the multitude of benefits they provide.

Image credit: Belle Co/Pexels

In 2015, Jenn Harper had a dream that proved to be life changing — not only for her, but also for a $500 billion beauty industry struggling with sustainability and diversity challenges. 

“This was a real dream, not a metaphorical dream, of little Native girls dancing, giggling and exuding such genuine joy — and they were covered in lip gloss,” Harper told TriplePundit. “I woke up and instantly wrote down what became my business plan. I always say this, but the world didn’t need another lipstick brand. What the world did need, however, was more representation.”

Harper is now the CEO of Cheekbone Beauty, which she founded from her basement in Ontario, Canada, back in 2016. The company is built on the principles of high-quality, cruelty-free beauty products with low environmental impact.

Harper’s Anishinaabe roots became a part of the creative process — inspiring the product names. A portion of the sales are donated to help address the educational funding gap for Indigenous youth. To date Cheekbone Beauty has donated over $150,000 to various causes.

“I really wanted to create a brand that highlighted Indigenous faces and gave back to the community,” Harper told 3p. “On a personal level, I felt a lack of belonging in the space, and I never wanted another Indigenous youth to feel that way again.”

Shedding light on intergenerational trauma

Harper uses her platform to shed light on the impacts of intergenerational trauma within Indigenous communities as a result of Canada’s history of forcing Indigenous children to attend boarding schools from the 19th century until the 1970s. 

“In Canada, the government tried to assimilate Indigenous people by forbidding our ways of life — our food, our dress, our language,” she said. “Our children were taken from their families and put into residential schools where they were forced to adapt to a European way of being. These traumas continue to be passed on. Our community needs to know they’re not alone. We need to recognize the pain and trauma that Indigenous families have experienced in order to start healing.”

From that painful history, Harper found healing and a concept for products that do not add to the beauty industry’s huge environmental challenges, such as excessive packaging, plastic pollution and unsustainable resource consumption. The global cosmetics sector creates 120 billion pieces of packaging every year, the recycling company TerraCycle told the Guardian.

Blending Western and Indigenous knowledge  

Harper is on a mission to address these challenges with sustainable products rooted in Indigenous teachings and ways of being. Cheekbone Beauty’s brand statement — Indigenous Roots, Sustainable by Nature — says it all. 

“Indigenous people are the OG’s of sustainability,” she said. In line with her Anishinaabe roots, Cheekbone’s sustainability journey looks to blend Western science with Indigenous wisdoms — a co-learning concept known as Two-Eyed Seeing, developed by Mi’kmaw elder Dr. Albert Marshall. “This concept nurtures the strengths of Western science and Indigenous knowledge for the benefit of living things within our environment,” Harper explained.
 
Concerned with the negative environmental impacts of excess packaging and mass production, Harper and her team spent the last three years researching and creating products with the idea of using less. The company’s first line, launched in 2020, was a low-waste line of lipsticks called Sustain. All the products are fair trade, not tested on animals, vegan, and meet the Clean and Planet Positive standards set by Sephora Canada. Cheekbone Beauty also measures ingredients against its in-house Biinad Standards — biinad from the Cree word for “clean.”

“This is a journey, so we see the need for new, better innovation all the time,” Harper said. “It comes at greater cost, but this is our Indigenous responsibility to the land. Everything we put out for our consumers is created with Indigenous teachings in mind.”

Meeting growing consumer demand

Harper is encouraged by consumers’ growing interest. Two-thirds of consumers say they will pay more for sustainable products, according to a report from First Insight and the University of Pennsylvania Baker Retailing Center. Sustainability is very important to 64 percent of consumers when considering purchasing a beauty product in particular, according to a survey by the Benchmarking Company.

 “People work hard for their money and want to make informed decisions before purchasing products, especially in such a saturated industry,” Harper said. “A lot of beauty consumers are switching to more clean brands that offer refillable or recyclable packaging, as opposed to single-use packaging that ends up in landfills. It’s all about perspective and understanding how and why consumers are making their decisions and adapting as a brand.”

Images courtesy of Cheekbone Beauty

The U.S. Federal Trade Commission (FTC) may soon enact stricter rules against greenwashing. The agency is taking public comments on its Green Guides, established in 1992 to assess sustainability claims. Changes are certainly due — especially considering the ubiquity of false claims across marketplaces. But without an enhanced budget for enforcement, new rules are unlikely to have the teeth they need to make a difference. The issue also begs the question: How can the FTC even begin to define “green” with so many competing factors?

Greenwashing in action

Examples of greenwashing abound — from misleading claims about a product's recyclability or compostability to misrepresentations of companies’ carbon footprints, the certification of illegal logging, and more. Naturally, some of the most egregious examples come from fossil fuel producers and investors, such as Shell and HSBC.

Purveyors of petroleum products – including Shell, Chevron, ExxonMobil, BP and Total Energies – have attempted to rebrand themselves in the fight against climate change. But while 60 percent of their 2021 advertising attempted to paint them in this light, renewable energy made up a mere 12 percent of their total investments. Similarly, HSBC claimed to be on the path to net zero and even touted its tree-planting program — all the while investing heavily in fossil fuels, including coal.

Exaggerated claims about the recyclability of a product, as well as the amount of recycled material a product is made from, are also common. As are assertions regarding the use of so-called “ocean-bound” plastics. Coca-Cola is guilty of just that, according to the Changing Markets Foundation. The beverage company spent a small fortune touting its use of such plastics, while failing to do anything about its role in creating the problem as the world’s single most prolific plastic polluter, according to the NGO. Brand audits show that Coca-Cola’s total plastic pollution continues to grow.

But the issue of greenwashing is hardly limited to a handful of brands. “Our latest investigation exposes a litany of misleading claims from household names consumers should be able to trust,” George Harding-Rolls, campaign manager for Changing Markets Foundations, told the Guardian last year. “This is just the tip of the iceberg, and it is of crucial importance that regulators take this issue seriously. The industry is happy to gloat its green credentials with little substance on the one hand, while continuing to perpetuate the plastic crisis on the other. We are calling out greenwashing so the world can see that voluntary action has led to a market saturated with false claims.”

This is precisely why the FTC is finally moving toward updating its Green Guides — which are supposed to aid brands in ensuring their environmental claims are accurate and do not mislead consumers. However, the guidelines were last updated in 2012. A lot has been learned since then about what makes a product sustainable, as well as the depths some marketers will stoop to in order to woo eco-conscious consumers.

But what about enforcement?

Unfortunately, the guides are likely to remain just that — guidance that is rarely enforced through the courts. While suits were brought against Walmart and Kohls last year for claiming rayon products were made from bamboo, their total penalty of $5.5 million is arguably a drop in the bucket. 

Indeed, only a few greenwashing suits have been brought to court each year since their height in 2014 and 2015, according to the list on the FTC’s website, with no penalty cases occurring between September 2019 and May 2022. It’s therefore difficult to believe that the updated guides will have much of an effect.

Daring to define "green"

Another relevant issue is how to even define what makes a product environmentally friendly with so many aspects to consider. Electric vehicles (EVs), for example, have been hailed as the holy grail of environmentalism by the U.S. government. But for all intents and purposes, an EV for every driver would cause unfathomable environmental destruction.

Likewise, while net zero is currently being held as the gold standard, many of the offsets used to achieve it are dubious at best. And recycling may be better than using virgin materials, but it creates its own set of problems and still pales in comparison to the ever-forgotten need to reduce first.

In truth, defining “green” should ultimately come down to what’s not being used, instead of what is — meaning the only truly green product would be no product at all. While that is not realistic in a market economy, the FTC would be wise to use its updated Green Guides to discourage the rampant consumerism and single-use products that got us into this mess in the first place.

Image credit: Brian Yurasits / Unsplash