Is Business Doing Enough to Address “Environmental Degradation” –and Other Important Points-of-Debate At A Recent Harvard B-School Conference

by Hank Boerner – Chair & Chief Strategist, G&A Institute

Is the business community doing enough to advance sustainability…are institutional investor doing enough with their allocation of capital and identification and targeting of positive outcomes for the invested capital? 

As we continue to be encouraged by the rising interest in sustainable investing by mainstream institutions, and the broadening interest of corporate executives and boards in corporate sustainability, responsibility, citizenship, ESG (et al), we are also intrigued by the more complex questions that arise.

A recent Harvard University Business School conference explored some of the challenging and complex questions related to corporate sustainability efforts, climate change, “business-focused” solutions to the “deteriorating” environment, and roadblocks to achieving sustainability goals.  The conference was titled, “Understanding and Overcoming Roadblocks to Sustainability.”

Participants included management researchers, business and environmental historians and practitioners.

One participant raised an interesting question that caught the eye:  “What’s the use of a zero-waste and carbon-free island resort in a world headed toward a temperature rise of 4-degrees Celsius?”  What is practical in this instance?

The comments of some participants were that progress could and was being made in certain sectors, and in the process, the solutions are becoming more complex and challenging – so let’s think about what some are calling the “Earth Systems” approach.

The very concept of “sustainability” was critiqued by many speakers, as the description has broadened since first emerging in the 1980s.

Among the important observations offered: “Overcoming roadblocks requires public policies to be much more aligned with creating the right incentives to support long-term commitments and radical shifts at the same time…and business may be the only entity that can effectively lobby to pass such policy.”

This space is too limited in presenting the report on the conference by co-organizer Geoffrey Jones in the Harvard B-School “Working Knowledge” report.  Overall, the conference participants added important points for all of us to consider as we continue on society’s and our own “sustainability journey.”

We recommend your reading of the recap as well as the comments that resulted from others’ reading and weighing in with their thoughts on the subject.  It’s all in our Top Story this week.

Has Sustainability Lost its Relevance?
(Wednesday – June 20, 2018) Source: Harvard Business School – Companies have thought for decades about business-focused solutions to fix the deteriorating environment. But judging by continually rising waters and temperatures, we may need a rethink about what sustainability means, suggest..

Barron’s Magazine Heralds the Arrival of Sustainable Investing to the Mainstream In Special Issue This Week – Sustainable Investing Version 2.0 Is Here!

By Hank Boerner – Chair and Chief Strategist, G&A Institute

The influential Barron’s magazine is published on Mondays by Dow Jones & Company with distribution to almost a half-million retail and institutional investors (300,000+ for print version, the rest digital or combination).

Barron’s says it has been “delivering market-beating stock picks and investment advice to wealthy readers since 1921…”

In Fall 2017, the Barron’s editors picked up the pace on coverage of sustainable investing, adoption of ESG approaches and related topics and positioned its expanding coverage with the statement: “Sustainable Investing is a Powerful Force in Today’s Capital Markets.” T

he October 7, 2017 issue was devoted to sustainable investing and the cover story was “The Top Sustainable Funds” for investors.

Editor Beverly Goodman explained: “As a team of seven writers and I began work on Barron’s first special edition devoted entirely to sustainable investing, we realized something – we could not get people to stop talking about it! CEO’s wanted to tout the strides they are making in labor practices and protecting the environment. Fund managers wanted to talk about how adding ESG criteria to stock picking isn’t that much of a stretch from the multitude of decisions they routinely use.”

And so: Barron’s would now cover this burgeoning style of investing on a regular basis. “We are only in Version 1.0 of sustainable investing – 2.0 is where ESG is not a separate category but a natural part of active management.”

The October 2017 issue’s cover story was about sustainable mutual funds based on data provided by Morningstar using Sustainalytics data – 37% of the 203 funds achieved a “high” or “above average rating” and beat the S&P 500® Index returns. (Only 28% of all large-cap mutual funds managed to do that.)

The Editors Began Steady Coverage of Sustainable Investing

Each of the issues that followed there would be some kind of coverage of sustainable investing. Barron’s followed up with another significant issue in February 2018 naming the sharing the magazine’s first ranking of sustainable companies for investor-readers.

Calvert Research and Management helped with the choices (using data from Sustainalytics, ISS and Thomson Reuters ASSET4) for the “Top 100 Sustainable Companies” rankings.

The top five positions were held by Cisco (#1), salesforce.com, Best Buy, Intuit, and HP (at #5). Said Calvert CEO John Streur: “This list gives people insight into companies addressing future risks and into the quality of management.”

Now – The Mainstream Impact of This Week’s Issue

The editors continued to ramp up coverage in each issue since late-2017. And this week’s issue (dated June 25) positioned Sustainable Investing Version 2.0 for its audience. This week’s content included:

The cover story is about “The New Conscience of Wall Street” – focused on BlackRock CEO Larry Fink and his “Investing With Purpose Theme.” (Subtitle: Larry Fink’s Mission: How the BlackRock CEO is leading a sustainable revolution on Wall Street.”)

One of the articles is a debate between George Serafeim (Harvard B School professor and stalwart advocate for sustainable investment) and Adam Sessel (CEO of Gravity Capital Management): “Does Sustainable Investing Lead to Lower Returns?”

The traditional Barron’s approach to a panel of expert to explore an investing topic is this week’s “ESG Roundtable: Great For the World, Good For Investors” – featuring Erika Karp of Cornerstone Capital; Todd Ahisten, Parnassus Investments; Jon Hale, Morningstar; and Roelfien Kuijpers of DWS Group (the asset management spin off of Deutsche Bank).

There is a “Getting Started in Sustainable Investing” guide for readers, including a Glossary and suggestions for mutual funds “with a purpose”.

The feature about Larry Fink is entitled, “In Defense of Social Purpose” – and his argument for sustainable investing that editors say has “ignited a burning debate about his concept…and him.”

Fink’s words in his CEO letter, says writer Leslie Norton, “…amounted to a Rorschach test for a polarized nation. As the debate rages on over immigration, climate change, guns, income inequality, and other issues, even considering their economic impact on a company looks like a political statement. Yet Corporate America and Wall Street are increasingly doing that…”

To hear CEO Fink tell it, writes Norton, “…short termism is a scourge of corporate thinking and is encouraged by the financial media…” And…ignoring ESG can take a toll…

With this feature there is a neat “Road to Sustainability” chart showing the evolution of SRI from the 1960s to today with many societal issues described along the way to 2018.

Other features include “The Trump Bump: A Silver Lining for ESG Investors” – telling readers that in the month after the November 2016 election results were in, investors’ money flowed into ESG mutual funds and ETFs; the flow into the 275 mutual funds and ETF’s focused on ESG was 10-fold over the prior month!

And, the backlash continues; since November 2016, inflows to ESG-focused mutual funds and ETFs is averaging $700 million per month, which is three times the pace of the prior 12 months. This lifted ESG focused funds to $118 billion to date. 

Looking at fiduciaries, the editors say that $23 trillion is not invested in pension, separately managed accounts and other funds using ESG approaches.

Barron’s editors have selected “The 20 Most Influential People in Sustainable Investing” – the Who’s Who in ESG – you will want to see that list.We are cheered to see our US SIF colleagues Lisa Woll, Tim Smith, Amy Domini, Matt Pasky, and John Streuer in the Top 20!

There is also an interview in the special issue with Jeremy Grantham and how the respected value investor (he’s on the list) is a force in increasing awareness of climate change.

Finally, the Barron’s conference unit scheduled its first “Impact Investing Summit” in San Francisco (last week) and Crystal Kim reports on that event, with focus on the Millennials and their generation’s increasing impact on investing trends.

We at G&A Institute think this is a tipping point moment for investors, as the Barron’s editors position sustainable investing as now a mainstream

# # #

Footnotes:  We prepared a brief about Barron’s coverage in October 2018 on our “G&A Institute’s To the Point!” web platform, and a follow up brief in February 2018.  You can find the in-depth briefs at:

https://ga-institute.com/to-the-point/the-authoritative-barrons-magazine-now-sets-the-pace-sustainable-investing-is-a-powerful-force-in-todays-capital-markets-so-say-the-editors/

https://ga-institute.com/to-the-point/proof-of-concept-for-sustainable-investing-barrons-weighs-in-with-inaugural-list-of-top-100-sustainable-companies/

There is information about Morningstar’s focus on sustainable investing mutual funds and ETFs at:  https://www.morningstar.com/articles/745467/morningstar-sustainability-rating.htm

Be sure to check out the special issue of Barron’s at:https://www.barrons.com/this_week

 

 

Sustainable Mutual Funds Investing Ratings

– Morningstar Has Added This To Its Widely-Used Information & Advice Platform – Some Practical Advice Offered to Investors…

Mutual Funds:  They are there in your individual or institutional portfolio, right? This should be of interest to most:

The 20th Century concept of “mutual funds” investment debuted before the stock market crash of October 1929; in 1924 the Massachusetts Investors’ Trust in Boston was created with State Street Investors’ Trust as the custodian.  That fund opened to public investment in 1928.  That same year the Wellington Fund (offering both bonds and equity) opened for business.

When the dramatic market crash occurred there were 19 open-ended funds for investors. The 1929 crash diminished individual investors’ appetite for equities for most of the following decade.  And, most Americans had little money to invest during the Great Depression (one of four households were unemployed).

But by 1940, as investors “recovered” and gained some confidence in the market, and the national economy improved with preparation for WW II, there were enough mutual funds for the Congress to pass the Investment Company Act of 1940 to regulate mutual funds and protect investors.

The first index funds came along in 1971 (a Wells Fargo offering); The Vanguard Group’s legendary investor John Bogle would use the concept (he embraced while a college student) to build the giant mutual fund enterprise.

By the end of 2016, Statista was charting 9,500-plus funds with US$16 trillion in AUM in operation.  There are also Exchange Traded Funds (ETFs) now with at least $3 trillion in AUM as of October 2017 according to Global X.

Of course, as investors embrace the concept of sustainable or ESG investing, both mutual fund and ETFs offerings have been coming to market to add to the long-available funds offered by Domini, Trillium, MSCI, Pax, Calvert, Zevin, and other SRI advisory firms (the newer funds du jour have such titles as Fossil Free, Green Future, Sustainable Investing, Green Bonds, Low Carbon, Socially Responsible, etc.).

And, of course, sustainability-focused ratings/scores/rankings/best for mutual funds and ETFs quickly followed here in the 21st Century as “sustainable” funds expanded. The popular Morningstar platform offers information on “Socially Responsible Funds” – any fund investing according to non-economic guidelines (issues include environmental responsibility, human rights, religious views, etc.)  Morningstar also offers Sustainability Ratings for “Sustainable Investing” funds and tools such as the Portfolio Carbon Risk Score™.

Janet Brown, a contributor to Forbes’ “Intelligent Investing,” offers her perspectives on ratings and rankings in this issue’s Top Story.  She begins with: between two funds with the same returns, many people invest in the one with companies with good ESG practices or commitment to data security and privacy.  Do sustainable ratings of the funds make a difference?

There are four factors she and the team at her company (Fund X Investment Group) and Morningstar recommend considering: (1) Cost of Ratings (free or not); (2) What do sustainability ratings measure?; (3) How to use these ratings to find suitable funds; (4) How do the ratings fit into your investing strategy?

The narrative captures highlights of a recent webinar by Fund X and Morningstar and explains some of the latter’s approach to the new Sustainable Funds ratings for you.

What You Need To Know About Fund Sustainability Ratings
(Friday – June 15, 2018) Source: Forbes – Given the choice between two funds that have similar returns, many people prefer to invest in the one that prioritizes investing in companies that focus on clean energy, good governance or are committed to data security or…

7 Reasons Why America is Rethinking Capitalism Now

Guest Post by Linda E. Dunbar

Global Public Affairs Executive: PR Strategist, Spokesperson, Employee Communications Leader Adept at Engaging Key Stakeholders.

7 Reasons Why America is Rethinking Capitalism Now

There is a move afoot to change capitalism as we know it. A radical overthrow by futuristic anarchist forces? Hardly. Actually, the US business community is bravely harking back to its pre-Milton Friedman roots.

In September 1970, the 5”0’, Brooklyn-born Friedman, a well-known American economist who would earn a Nobel prize in economics six years later, published an opinion piece in The New York Times.

The title — “The Social Responsibility of Business is to Increase Profits” — summed up his thesis succinctly. In his piece, he accused US business of “preaching pure and unadulterated socialism” in attempting to address social issues of the day.

Friedman’s dismissive view: “The business men believe that they are defending free enterprise when they declaim that business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends; that business has a ‘social conscious’ and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers.”

To set the scene, when Friedman wrote his piece, life was very different from today although there remains no shortage of societal issues for the US business community to address.

In 1970, a woman needed a man, any man, even her 17-year-old son, to sign a business loan, get a mortgage or a credit card regardless of her income. Her income would then be discounted by the lender by as much as 50 percent when deciding how much credit to extend. In those days…

Equal access to credit for all, at least on paper, would not come to be in the US until the Congress passed the Equal Credit Opportunity Act of 1974.

Just the year before, in 1969 Rep. Charlotte Reid (R-Ill.) became the first woman to wear trousers in the U.S. Congress and Barbra Streisand became the first woman to attend the Oscars in pants.

Also, in 1969 the Stonewall Inn riots in Greenwich Village launched the gay pride movement.

The unpopular Vietnam War would rage on another five years until the fall of Saigon in 1975.

Despite the passage of the historic Civil Rights Act of 1964, discrimination against minorities continued to be rampant. In Loving vs. the State of Virginia, the U.S. Supreme Court case that overturned “miscegenation” laws in the US, was decided in favor of the plaintiffs a mere three years after in the year 1967.

The first Earth Day was proclaimed in April 1970.

The animal rights movement had not yet gotten momentum. In fact, People for the Ethical Treatment of Animals (PETA) was not founded until 1980.

Following Friedman’s pronouncement, Corporate America and its corporate governance practices made shareholder value the end-all-and-be-all of corporate thinking.

Even if that approach clearly didn’t make any sense. Anyone in business today knows intuitively no customers no business no employees no business. But along with that pronouncement came the opportunity for many major U.S. companies to take a pass on societal issues, even issues that might have been caused by business practices (extractive industries and their activities affecting the environment come to mind).

Thankfully, we have come full circle and Corporate America — in fact the global corporate business community — is coming together to rethink capitalism and its societal impact. Recent comments by asset management giants and others have been well-received as we look toward creating change.

What does rethinking capitalism mean? And why now?

Better Capitalism. Tempered Capitalism. The New Capitalism. Conscious Capitalism.

Whatever it is called, helping to transform the short-term, insular thinking currently stifling the potential of American business and its ability to effectively connect with stakeholders is an important element of the movement.

Understanding that although businesses have an important fiduciary responsibility to shareholders, the enterprises exist for reasons other than to solely enrich shareholders (and business leaders who understand that perform better than those who don’t).

And the core: understanding your reason for existing, your purpose, what business you are really in is critical for long term success. As in do what you love and the money will follow.

“Purpose” turns out to be an effective organizing principle for many businesses. This thought process is catching on.

Here are my seven reasons why I think the time is ripe to rethink capitalism and mesh social impact and success.

1. Social media – Businesses just can’t ignore customers and employees any more. Before social media an unhappy consumer complained to roughly 17 other people. Now unhappy customers have a direct impact on reputation in a way they just could not before social media and a poor reputation eventually leads to lost revenue.

2. The Age of Authenticity — People in the US are tired of literal and figurative airbrushing. People want companies to do what they say they will. And they want them to strike the right note. If your advertising firm has advised you to be edgy, you have no margin for error. See number 1.

3. Millennials – There are over 79 million Millennials and the numbers of men and women Gen Z are close behind. They expect a different relationship between society and business — and they are not taking no for an answer. The idea that life is too short to be someone you are not or spending time in a way that you do not want to is part of their DNA. Gay, transgender, what have you, Millennials and Gen Z are not batting an eyelash. Equality, diversity, and inclusion are table stakes. They expect diversity, inclusion, equality where they shop, eat, work. If not, they will go somewhere else. Period.

4. Additional demographic shifts – The minority is becoming the majority and in 2019, the majority of U.S. children will be minorities. As demographics shift no business can be successful by leaving people out, be they customers or employee or potential customer or employees. This loops back to numbers 1, 2, and 3.

5. Climate change and the detrimental impact of humans on the planet is real – some problems we — business, government, NGOs, activists, the general public — have no choice but to tackle together. Like having air to breathe and water to drink.

6. The #Me too, #Times up Movement – Dignity, respect, and equality in the workplace, everywhere actually, are a given. And these movements have ramifications beyond sexual harassment. According to CNN, #MeToo and #TimesUp have pushed 48% of companies to review pay policies. Gender pay equity has been an issue since possibly the beginning of time and now we are seeing movement on this issue.

7. The data – The data says inclusive, diverse companies perform better.
How much better will companies perform when their purpose is at the core of what they do, long-term strategy is understood and embraced by everyone from the board on down, and stakeholders are effectively engaged? That remains to be seen but the prognosis is good!

If this article resonated with you, please feel free to connect with me directly and also like, comment or share.

7 Reasons Why America is Rethinking Capitalism Now

Email me at: linda.dunbar@outlook.com
Linked In: https://www.linkedin.com/in/lindaedunbar/

Yes, It’s Hot in Saudi Arabia – Where Air Conditioning is a Must-Have – How Can A/C Be Made More Sustainable to Meet Future Power Challenges?

by Hank Boerner – Chair and Chief Strategist, G&A Institute

Many people are fascinated with the Kingdom of Saudi Arabia, with its wondrous 21st Century blend of modern and medieval elements – and the country appears to moving along with rapid and dramatic changes under new royal family leadership (Crown Prince Mohammed bin Salman).

One of the elements of change that caught our eye is a non-Saudi business leader’s commentary that addresses the question of there being “a new model for sustainability” in the Middle East, possibly led by the kingdom…with its Vision 2030 and innovations in power consumption for air conditioning.

Kevin Cha, President, LG Electronics for the Middle East and Africa — wrote an opinion in the Saudi Gazette, telling us this week in our Top Story about what he thinks may be in store for the future.

A diversified economy — moving away from decades of heavy reliance on oil and natural gas sales to the world — will mean (he asserts) more opportunities for Saudi subjects (they are not “citizens” in the western sense), and promises of a better lifestyle.  And with all that, the increasing need for better technological-based solutions. For air conditioning, especially.

This is the ideal time to instill values of resource management and sustainability in the “minds of millions of upwardly-mobile Saudis, Kevin Cha thinks.

As example within his area of expertise:  More than 70 percent of the kingdom’s generated electricity is consumed for air conditioning and cooling (yes, it is a desert-based kingdom) and summer demand is double that of winter months (note that it does get cooler in the Middle East winters).

While less than 65% of the world’s electric needs are now met through steam turbines fueled by traditional fossil fuels, 100% of Saudi Arabia’s electricity is generated from fossil fuels (of course it has abundant supplies of these).  But — this is unsustainable for the long-term, Kevin Cha points out.

Saudi Arabia’s Vision 2030 Plan for sustainable development could help to change this picture in dramatic terms.  New technologies and new products are being introduced to the kingdom — among them (curtain raised) is (of course) LG air conditioning products.  The conditions in Saudi Arabia make for a challenging testing ground for A/C technology.  (The local environment is dust-laden, corrosive, with high temperatures and humidity.)  And so the LG Electronics products are being “battle-tested” in Saudi Arabia.  Good for the company and the A/C industry:  As the world’s demand for electric power (including Saudi Arabia’s needs to be met with continued economic growth), the kingdom is providing a test bed for the LC’s technologies and products.

Saudi Arabia’s Vision 2030 calls for reducing reliance on oil and boosting state investment in the private sector.  There are important elements of the program that call for growth of entertainment and tourism (ala, Gulf Emirates-style), and reforms of the education system.  It is being formulated in “Our Vision” – Saudi Arabia…the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub connecting three continents…”

And with lower-cost, abundant air conditioning to cool your hot days through more sustainable means!

Is Saudi Arabia getting ready to unveil a new model for sustainability in the Middle East?
(Friday – June 01, 2018) Source: Saudi Gazette – SAUDI ARABIA is witnessing unprecedented transformation across various facets of everyday Saudi life. As the country marches on towards a new diversified economy that offers new avenues of consumer spending, it is a critical time…

U.S. States and Cities — “Still In” to the Paris Agreement — and Great Progress is Being Made

By Hank Boerner – Chair & Chief Strategist, G&A Institute

This is our second commentary this week on the occasion of the first anniversary of the decision by the Trump White House in June 2017 to begin the multi-year process of formal withdrawal of the United States of America from the Paris COP 21 climate agreement…

The action now is at the state and municipal levels in these United States of America.

Where for years the world could count on US leadership in critical multilateral initiatives – it was the USA that birthed the United Nations! – alas, there are 196 nations on one side of the climate change issue (signatories of the 2015 Paris Agreement) and one on the other side: the United States of America. At least at the sovereign level.

Important for us to keep in mind: Individual states within the Union are aligned with the rest of the world’s sovereign nations in acknowledging and pledging to address the challenges posed by climate change, short- and longer-term.

Here’s some good news: The United States Climate Alliance is a bipartisan coalition of 17 governors committed to upholding the goals of the Paris Agreement on climate change. These are among the most populous of the states and include states on both coasts and in the nation’s Heartland.

The Paris meetings were in 2015 and at that time, the USA was fully on board. That was in a universe now far far away, since the election of climate-denier-in-chief Donald Trump in 2016.

On to the COP 23 and the USA

In 2017, two years after the Paris meetings, the USA officially snubbed their sovereign colleagues at the annual climate talks. A number of U.S. public and private sector leaders did travel to Bonn, Germany, to participate in talks and represent the American point-of-view. This included Jerry Brown, Governor, California (the de facto leader now of the USA in climate change); former New York City Mayor (and Bloomberg LP principal) Michael Bloomberg; executives from Mars, Wal-mart and Citi Group.

While the U.S. government skipped having a pavilion at the annual United Nations-sponsored climate summit for 2017, the US presence was proclaimed loud and clear by the representatives of the U.S. Climate Action Center, representing the climate change priorities of US cities, states, tribes and businesses large and small who want action on climate change issues.

Declared California State Senator Ricardo Lara in Bonn: “Greetings from the official resistance to the Trump Administration. Let’s relish being rebels. Despite what happens in Washington DC we are still here.”

# # #

As the one year anniversary of President Trump’s announcement to leave the global Paris Agreement (June 1, 2018), state governors announced a new wave of initiatives to not only stay on board with the terms agreed to in Paris (by the Obama Administration) but to accelerate and scale up their climate actions.

Consider: The Alliance members say they are on track to have their state meet their share of the Paris Agreement emission targets by 2025.

Consider: The governors represent more than 40 percent of the U.S. population (160 million people); represent at least a US$9 trillion economic bloc (greater than the #3 global economy, Japan); and, as a group and individually are determined to meet their share of the 2015 Paris Agreement emissions targets.

Consider: Just one of the states – California – in June 2016, according to the International Monetary Fund, became the sixth largest economy in the world, ahead of the total economy of France (at #7) and India (#8).

Consider: The US GDP is estimated at $19.9 trillion (“real” GDP as measured by World Bank); the $9 trillion in GDP estimated for the participating states is a considerable portion of the national total.

The states involved are: California, Colorado, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and the Commonwealth of Puerto Rico.

The initiatives announced on June 1, 2018 include:

Reducing Super Pollutants (including hydrofluorocarbons (HFCs), one of the Greenhouse Gases, and harnessing waste methane (another GhG).

Mobilizing Financing for Climate Projects (through collaboration on a Green Banking Initiative); NY Green Bank alone is raising $1 billion or more from the private sector to deploy nationally).

Modernizing the Electric Grid (through a Grid Modernization Initiative, that includes avoidance of building out the traditional electric transmission/distribution infrastructure through “non-wire” alternatives).

Developing More Renewable Energy (creating a Solar Soft Costs Initiative to reduce costs of solar projects and drive down soft costs; this should help to reduce the impact of solar tariffs established in January by the federal government).

Developing Appliance Efficiency Standards (a number of states are collaborating to advance energy efficiency standards for appliances and consumer products sold in their state as the federal government effort is stalled; this is designed to save consumers’ money and cut GhG emissions).

Building More Resilient Community Infrastructure and Protect Natural Resources (working in partnership with The Nature Conservancy and the National Council on Science and the Environment, to change the way infrastructure is designed and procured, and help protect against the threats of floods, wildfires and drought).

Increase Carbon Storage (various states are pursuing opportunity to increase carbon storage in forests, farms and ecosystems through best practices in land conservation, management and restoration, in partnerships with The Nature Conservancy, American Forests, World Resources Institute, American Farmland Trust, the Trust For Public Land, Coalition on Agricultural Greenhouse Gases, and the Doris Duke Charitable Foundation).

Deploying Clean Transportation (collaborating to accelerate deployment of zero-emissions vehicles; expanding/improving public transportation choices; other steps toward zero-emission vehicles miles traveled.

Think About The Societal Impacts

The powerful effects of all of this state-level collaboration, partnering, financial investment, changes in standards and best practice approaches, public sector purchasing practices, public sector investment (such as through state pension funds), approvals of renewable energy facilities (such as windmills and solar farms) in state and possibly with affecting neighboring states, purchase of fleet vehicles…more.

California vehicle buyers comprise at least 10% (and more) of total US car, SUV and light truck purchases. Think about the impact of vehicle emissions standards in that state and the manufacturers’ need to comply. They will not build “customized” systems in cars for just marketing in California – it’s better to comply by building in systems that meet the stricter standards on the West Coast.

US car sales in 2016 according to Statista were more than 1 million units in California (ranked #1); add in the other states you would have New York (just under 400,000 vehicles sold); Illinois (250,000); New Jersey (250,000) – reaching to about million more. How many more vehicles are sold in the other Coalition states? Millions more!

(Of course, we should acknowledge here that the states not participating yet have sizable markets — 600,000 vehicles sold in Florida and 570,000 in Texas.)

Project that kind of effect onto: local and state building codes, architectural designs, materials for home construction; planning the electric distribution system for a state or region (such as New England); appliance design and marketing in the Coalition states (same issues – do you design a refrigerator just for California and Illinois?).

There are quotes from each of the Coalition governors that might be of use to you. (Sample: Jerry Brown, California: “The Paris Agreement is a good deal for America. The President’s move to pull out was the wrong call. We are still in.”) You can see them in the news release at: https://static1.squarespace.com/static/5a4cfbfe18b27d4da21c9361/t/5b114e35575d1ff3789a8f53/1527860790022/180601_PressRelease_Alliance+Anniversary+-+final.pdf

# # #

In covering the 2017 Bonn meetings, Slate published a report by The Guardian with permission of the Climate Desk. Said writers Oliver Milman and Jonathan Watts: “Deep schisms in the United States over climate change are on show at the U.N. climate talks in Bonn, where two sharply different visions of America’s role in addressing dangerous global warming have been put forward to the world.

“Donald Trump’s decision [to pull out of the Paris Climate Agreement] has created a vacuum into which dozens of city, state and business leaders have leapt, with the aim of convincing other countries that the administration is out of kilter with the American people…”

# # #

At the US City Level

Jacob Corvidae, writing in Greenbiz, explains how with the White House intending to withdraw, cities are now in the driver’s seat leading the charge against climate change.

Cities have more than half of the world’s populations and have the political and economic power to drive change.

The C40 Cities Climate Leadership Group is the Coalition helping cities to make things happen. The C40 Climate Action Planning Framework is part of a larger effort to make meaningful progress toward carbon reduction goals and build capacity at the municipal level. Cities are expected to have a comprehensive climate action plan in place by 2020. This will include 2050 targets and required interim goals.

The cities have the Carbon-Free City Handbook to work with; this was released in Bonn in 2017 at COP 23. There are 22 specific actions that can (1) drive positive impacts and (2) create economic development. This September the Carbon-Free Regions Handbook will be available. There is information for you about all of this at: https://www.greenbiz.com/article/every-action-how-cities-are-using-new-tools-drive-climate-action

The clarion call, loud and clear: We Are Still In!  Watch the states, cities and business community for leadership on meeting climate change issues in the new norms of 2018 and beyond.

Food & Ag Sector – Sustainability is in Focus from Farm-to-Table As Companies Make Progress / Stakeholders Say “More”

by Hank Boerner – Chair & Chief Strategists, G&A Institute

Hey, a Cuppa Joe – the morning treat for many people around the world.  That first hot cup of dark coffee can set the tone for us for the day. And when our spirits (and energy) may lag, the cuppa joe can perk us up again for a while at any time of day.

But – how many of us give thought to how that wonderful dark liquid arrived in our grocery stores, at the local Starbucks or Dunkin’ Donuts or other local coffee counters?

The Ecologist took a close look at the business of coffee recently and their commentary (and report on the industry) is our Top Story for you this week.

The writer set out characterizing the global coffee industry as one that has been mostly “unsustainable” but lately, major coffee producers have been working to create more sustainable business models.

Guest Writer Emily Folk explains:  the coffee industry spans countries and cultures, is centuries old, and from harvesting the beans through roasting to the final retail product, the industry is recognizing public expectations about some practices – and is undergoing changes.

She ventures that “people have begun to take note and hold companies accountable” – like Starbucks – and in response, major coffee companies are making promises to do better.  But are they keeping the promise? Doing enough?

Alas, there is a lack of progress to be reported, she says.  As well as some progress to cheer about.

Starbucks according to a news report in the UK runs water 24 hours a day in the production process.  Bad practice?  The company has also been selling reusable cups and installing recycling bins at every store.  Certainly good practices.

Should the buying public pressure brand name companies like Starbucks to do more?  The writer delves into that.

It would be good to recognize that progress is being made by growers through retail food marketing companies and to be thoughtful about what is next in that company’s (and other companies’) sustainability journeys.

The G&A Institute team has been working with food and agriculture companies on various issues over many years.  This is a sector (Food & Ag) rich in traditional practices and ripe for positive change as stakeholders and consumers present their expectations for the firms to be more sustainable – and accountable to society.

Every week in the newsletter we present Food & Ag news, commentary and research content for your consideration.  There are several items in this issue on the topics.

Top Stories

Making the coffee industry sustainable
(Wednesday – May 23, 2018)
Source: The Ecologist – Sustainability is increasingly important for implementation in businesses. One of the industries that has been unsustainable since its inception is coffee. However, some major coffee producers have been working to make a more…

We Are “Out” of the Paris Accord — Really? What a Year! Signs of Great Progress in the Trump Denial Era

June 1, 2018

By Hank Boerner – Chair and Chief Strategist, G&A Institute

It was just one year ago – ah,, but it seems much longer…

WASHINGTON — The New York Times – June 1, 2017: “President Trump announced on Thursday that the United States would withdraw from the Paris climate accord, weakening efforts to combat global warming and embracing isolationist voices in his White House who argued that the agreement was a pernicious threat to the economy and American sovereignty.

In a speech from the Rose Garden, Mr. Trump said the landmark 2015 pact imposed wildly unfair environmental standards on American businesses and workers. He vowed to stand with the people of the United States against what he called a “draconian” international deal.

“I was elected to represent the citizens of Pittsburgh, not Paris,” the president said, drawing support from members of his Republican Party but widespread condemnation from political leaders, business executives and environmentalists around the globe.”

What was to follow?

A Year of Significant Progress!

Today — interesting perspectives are shared in The Washington Post on where we are one year after President Donald Trump “withdrew” from the Paris Climate Accord. The United States of America is the first – and perhaps will be the only – nation to join and then withdraw the Agreement. Sort of.

Participation in the agreement for the USA runs to year 2020 so we are “still in” (officially).  The withdrawal process will take the next three years.

By that time, there might be a new occupant in the White House. 

This nation is still in by examination of various other factors that are explained by writer Chris Mooney in the WaPo. (He covers climate change, energy and the environment, reported from the Paris negotiations in 2015, and has published four books on the the subjects he covers.)

The key points we took away from Mooney’s excellent wrap up today:

  • The Trump Administration still has no consistent message about climate change,  and no clear policy, except for the antics of EPA Administrator Scott Pruitt, with his slash & burn attacks on environmental and climate-related regulations.
  • There is a positive development: NASA Administrator Jim Bridenstine embraced climate science.  (See notes at end.)
  • There has been unrelenting attack on President Barack Obama’s skilled moves to protect the country – and the planet! – such as the Clean Power Plan.
  • But, while the White House is the cheerleader for the coal industry, market forces reward renewable energy and natural gas as powerful drivers for change.
  • Other countries are sticking with the Paris Accord, but some of those countries may find it challenging to stay the course without U.S. leadership (says John Sterman of MIT).

BackgroundThe Obama Administration agreed in Paris with many other nations to the goals of a 26%-to-28% reduction of emissions below the 2005 levels — and today the U.S. and the whole world is off that metric, writes Chris Mooney.

Even if the commitments were realized, there would be a temperature rise of 3.3 degrees Celsius (almost 6% F) over time (according to MIT’s Sterman). So the USA would have to do even more than agreed-to in Paris. (The USA is the world’s second largest GhG emitter.)

Where are we? According to the Climate Action Tracker produced by NewClimate Institute and Ecofys, the USA is on track for an 11% to 13% decrease by year 2025, which is about halfway to the Obama Administration pledge.

What may interfere: the move to rollback auto fuel efficiency standards; an analysis by Rhodium Group projects adding 100 million tons (annually) by year 2035 for auto emissions alone if the rollbacks move forward.

The good news – from the “We Are Still In” front: the states of Virginia and New Jersey are making moves to cut emissions and the states of Colorado and California are developing new electric vehicle policies.

Vicky Arroyo (director of the Georgetown Climate Center is quoted:   At least we are not losing the momentum that was feared (one year ago today).

Kate Larsen, who directs climate change research at the Rhodium Group, thinks that the country is on track to meet or even exceed the Obama-era Clean Power Plan goals — thanks to the use of lower-cost renewable fuel sources and natural gas.

Greenhouse Gas Emissions in the United States are “hardly set to explode” and the country is moving toward lower GhG emissions over time, writes Mooney.

But. What the Trump announcement did last year on June 1 was to create fog about US national policy regarding climate change. The thing we all have to face: the slow progress exhibited and achieving climate change goals (those coming out of Paris) are not compatible.

The WaPo commentary is at: https://www.washingtonpost.com/news/energy-environment/wp/2018/06/01/trump-withdrew-from-the-paris-climate-plan-a-year-ago-heres-what-has-changed/?utm_term=.782d3cb38b3f&wpisrc=nl_most&wpmm=1

Counterpoint!

The EDF – a/k/a Environmental Defense Fund – today trumpeted the Year of Climate Progress (since June 1 2018).

EDF members and environmentalists immediately began the counter-attack in June 2017 and in EDF’s words, that led to a year of extraordinary climate progress. The organization presents a timeline on line.  Highlights:

  • June 5, 2018 – EDF helps launch a coalition of organizations, businesses and state and local civic and political leaders to pledge “We Are Still In!” – today there are 2,700 leaders participating.
  • On to July 2017 – California Governor Jerry Brown signs into law an extension of the state’s cap-and-trade program out to 2030.  The state is the sixth largest economy in all of the world!
  • September – North of the border, Ontario Province links its cap-and-trade program to the California-Quebec carbon market, creating a huge market covering 580 million tons of emissions. Sister province British Columbia intends to increase its carbon tax for April 2018 through 2021.
  • Nine Northeastern US States in the Regional Greenhouse Gas Initiative complete their second program review and agree to reduce emissions by 30% from 2020 to 2030.
  • Halfway around the world in December 2017 China announced its national carbon market (to be largest in the world); this will start with electric power and expand to seven other industrial sectors. (So much for the Trumpian claim China is doing nothing to meet Paris Accord conditions.)
  • We move further into 2018 and the Federal Energy Regulatory Commission (FERC) rejects the DOE coal and nuclear proposal.
  • Despite shouts and threats and Trumpian boasting, the U.S. Congress adopts the 2018 budget in March 2018 that leaves the EPA budget mostly intact (EPA Administrator Scott Pruitt wanted to cut the agency’s budget by 30%. Other environmental / energy agencies see budget increases.)
  • April – the UN’s International Maritime Organization adopts a climate plan to lower emissions from container ships, bulk and oil carriers, by at least 50% below 2008 levels by 2050.
  • Also in April — In the key industrial State of Ohio, the Public Utilities Commission approves AEP’s Electric Security Plan – this, EDF points out, will enhance and diversify the state economy, unlock millions in funding, provide customers with clean energy options and overall, will reduce pollution.
  • Next door, in April, the Illinois Commerce Commission approves the state’s Long-Term Renewable Resources Procurement Plan to have a pathway for electric utilities to produce 25% of power from renewable sources by 2025 and put incentives in play for development of wind and power.
  • April — EDF President Fred Krupp gives a TED Talk, outlining the plan to launch methane-detecting satellites in orbit above Earth to map and measure oil and gas methane emissions. The data and information gathered will help countries and companies spot problems, identify savings opportunities and measure progress.
  • April sure was a busy month – Canada issued policies to cut oil and gas emissions by 40% to 45% at new and existing facilities. This was part of a pledge made in 2016 (when President Obama was in office) for the USA, Canada and Mexico to decreased such emissions in North America by that amount by 2025.
  • On to May – and recently-elected New Jersey Governor Phil Murphy – a former Goldman Sachs exec – signed into law the plan to cut GhG emissions by almost half by 2030 (hey, that’s twice what the Clean Power Plan would have required!). The Garden State will require 50% of NJ electric needs to be met from renewable sources.
  • And on to May – ExxonMobil announced plans to reduce oil and gas methane emissions by 15% and flared gas volume by 25% — worldwide – by 2020.

Yes – a remarkable year, kicked off on June 1st 2017 by a vindictive head of state set on reversing the significant progress made under his predecessors.

But many individuals, companies, investors, civic organizations, NGOs proclaimed: We are still in.  The movement represents city halls, board room, college campuses, investors, and more…interests representing US$6.2 trillion (one-sixth of the entire American economy) have signed on to the We Are Still In declaration — https://www.wearestillin.com/we-are-still-declaration

Have you?

Notes:

The New York Times story by Michael Shear, June 1 2017 is at: https://www.nytimes.com/2017/06/01/climate/trump-paris-climate-agreement.html

The American Institute of Physics info on NASA, embrace of climate change consensus: https://www.aip.org/fyi/2018/bridenstine-embraces-nasa-science-climate-change-consensus

We Are Still In information at: https://www.wearestillin.com/