Research We Can Use As We Consider the Changes To Come in a Lower-Carbon Economy

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

There certainly is a large body of research findings and resulting projections of what to expect as society moves toward a lower-carbon global economy.  The research comes from the public sector, academia, NGOs, capital market organizations, and scientific bodies.  One of the most comprehensive of analysis and projections is the National Climate Assessment produced periodically by the U.S. federal government. 

One reliable source of research that we regularly have followed for many years is the The National Bureau of Research (NBER), a not-for-profit “quant” research organization founded 100 years ago in Boston, Massachusetts.  The organization boasts of a long roster of economic experts who issue many Working Papers during the year (1,000 or more) with permission granted to reproduce results.

Such is the stature of NBER over many years that this is the organization that issues the official “start and end” of recessionary periods in the U.S. (you probably have seen that mentioned in news stories).

Lately NBER researchers have been focused on ESG-related topics.  We are sharing just a few top line research results here for you.

Research Results: California’s Carbon Market Cuts Inequality in Air Pollution Exposure

In NBER Working Paper 27205, we learn that California’s GhG cap-and-trade program has narrowed the disparity in local air pollution exposure between the disadvantaged populations and others.  The state’s is second largest carbon market in the world after the European Union’s cap-and-trade (based on total value of permits).

Early on there were concerns that market forces could worsen existing patterns in which disadvantaged neighborhoods would be exposed to even more pollution that better-off counterparts.  Not so, say researchers Danae Hernandez-Cortes and Kyle C. Meng, who examined 300 facilities in the 2008-2017 period.

Findings:  The gap in pollution exposure between disadvantaged and other communities in California narrowed by 21% for nitrogen dioxide; 24% for sulfur dioxide; and 30% for particulates following the introduction of cap and trade. (This between 2012, the start of the state’s program, and 2017).  The researchers labeled this the “environmental justice gap”.

California’s law caps total annual emissions of GhGs, regulating major stationary GhG-emittting sources, such as utilities.  Putting a price on carbon encourages firms to buy emissions permits or carbon offsets.  The researchers say that shifting emission cuts from high-to-low abatement cost polluters, cap-and-trade can be more cost-effective than imposing uniform  regulations on diverse industries.  But – “where” pollution is generated could be altered by market forces and either exacerbate or lessen existing inequities in pollution exposure.

Research Findings:  Building in Wildland-Urban Interface Areas Boosts Wildlife Fire Costs

Speaking of California, over the past few years (and even today as we write this commentary) wildfires have affected large areas of the state.  Who pays the cost of firefighting as more people build homes in high fire-risk areas near federal and state-owned public land?

Researchers Patrick Baylis and Judson Boomhower in NBER Working Paper 26550 show that a large share of the cost of fire fighting is devoted to trying to prevent damage to private homes and borne by the public sector…where there is “interface” between wild areas and urban areas. The guarantee of federal protection generates moral hazard because homeowners do not internalize the expected costs of future protection when they decide where to live or how to design and maintain their homes.

The net present value of fire protection subsidies can exceed 20% of a home’s value.  For 11,000 homeowners in the highest risk areas of the American West, the researchers calculated a subsidy rate of 35% of a home’s value…compared to only 0.8% in the lowest risk area.  And, about 84,000 more homes have been built in high risk areas (than would have been the case) had federal wildlife protection not lowered the cost of homeownership in those areas.

Fire protection provided by the public sector effectively subsidizes large lot sizes and low-density development and may reduce the private incentive to choose fireproof building materials and clear brush around the home.  Fire protection costs level off about 6 acres per home (suggesting cluster development is more preferable).

As we consider the impacts of climate change (drought, high winds, other factors becoming more prevalent), the role of local and state governments in zoning, land use and building code decision-making is key to addressing fire prevention.  Nice to live near to preserved state and federal land…but not sometimes.

Research to Consider:  Environmental Preferences, Competition, and Firm’s R&D Choices

In NBER Working Paper 26921, we learn that consumers’ environmental preferences do affect companies’ decisions to invest in environmentally-friendly innovations.  Buyers care about the environmental footprint of the products they buy.  And so companies do consider these preferences when they make R&D decisions.  (That is, choosing “dirty” or “clean” innovations to invest in.)

Companies use data on patents, consumers’ environmental preferences, and product-competition levels in the automobile manufacturing  industry.  Researchers Philippe Aghion, Roland Benabou, Ralf Martin and Alexandra Roulet looked at 8,500 firms in 42 countries, studying the period 1998-2012 to try to determine how companies in the industry respond to detected changes in consumer preferences.

Findings include:  Firms in auto-related businesses whose customers are environmentally-focused are more inclined to develop sustainable technologies, particularly in markets defined by higher levels of competition.

One effect reported is that for firms with more sustainability-minded consumers, the growth rate of “clean” patents is 14% higher than for “dirty” patents…and is 17% higher in more competitive markets.

Individual consumer preference for “buying green” may not have a direct impact on pollution short-term — but over time such preferences can alters an auto company’s willingness to invest in R&D focused on environmentally-friendly products.

Research Investors Think About:  Could Undeveloped Oil Reserves Become “Stranded” Assets?

If the vehicle shopper wants to “buy green” and is seeking “environmentally-friendly” products, what is the long-term effect on vehicle manufacturing if that segment of the market grows — especially in highly-competitive markets?  Do these preferences mean buyers will move away from fossil fuel-powered vehicles…and over time the in-the-ground assets of energy companies will become “stranded”?

Researchers Christina Atanasova and Eduardo S. Schwartz examined the relationship between an oil firm’s growth in “proved” assets and its value.  The question they posed for their research NBER Working Paper 26497 was: “In an era of growing demands for action to curb climate change, do capital markets reflect the possibility that some reserves may become “stranded assets” in the transition to a low-carbon economy?”

They looked at 679 North American producers for the period 1999-2018; the firms operating (as they described) in an environment of very low political risk and foreign exchange exposure…and with markets that are liquid, with stringent regulation and monitoring (unlike companies in countries with markets that are more easily manipulated, among other factors).

Findings: Capital markets only valued those reserves that were already developed, while growth of undeveloped reserves had a negative effect on an oil firm’s value.  The negative effect was stronger for producers with higher extraction costs and those with undeveloped reserves in countries with strict climate policies.  This reflects, they said, consistency with markets penalizing future investment in undeveloped reserves growth due to climate policy risk.

These are a small sampling of NBER research result highlights.  The full reports can be purchased at NBER individually or by annual subscription.  Contact for information about Working Papers and other research by the organization is:  NBER, 1050 Massachusetts Avenue, Cambridge, MA 02138-5398.

 

 

America’s Tech Giants Address Climate Change, Global Warming With Bold Initiatives in 2020

August 12 2020

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

It’s global warming, you say?  Well, we have to say that it certainly is a hot summer in many parts of the world (north of the Equator) and the U.S. National Hurricane Center has a large list of names for the storms to come.

That’s Arthur and Bertha on to Vicky and Wilfred – 21 named storms so far, with “Isaias” whipping through as tropical storm and causing hundreds of thousands of homes and business to lose power this past week in the NY region. And it was not even a full hurricane in the U.S. Northeast!

And during this week, many communities in the American Midwest lost electric power. Not be provincial here – in the Eastern North Pacific there are storms to come named Amanda and Boris on to Yoland and Zeke.

For the Central Pacific? – Akoni and Ema, and Ulana and Wale are possibly coming your way.  So, can we say this is an effect of global warming or not?  Let’s say…yes, with a number of contributing factors.

Like steadily-rising Greenhouse Gas Emissions trapping heat in the atmosphere.

Think of methane (CH4), carbon dioxide (CO2), nitrous oxide (N2O-or-NOX), ozone, and a host of chlorofluorocarbon gasses steadily drifting upwards into the atmosphere and over time, changing weather patterns to create more super storms. Think: tornadoes, floods, more torrential rain coming down (hello, Houston and New Orleans!)

In the U.S.A. major companies have been steadily addressing their carbon emissions and putting in place important programs to reduce emissions, such as by adding renewable energy sources, and taking small and larger steps to conserve electric power use, and more.

But if you are a company using a lot of power…and constantly adding power…there are ever more challenges to address.

That’s the case as the world continues to move online for many activities in business, education, healthcare, investing, shopping, and more.  And coming online — we are seeing more AI, robotics, approaches to develop self-driving vehicles, machine-to-machine learning, more and more communication…5G systems…all coming our way.  All needing more power generated.

Over the past few days some of the major U.S.-headquartered, powerhouse tech firms have been announcing their plans to address GHG emissions…and in the process the companies have or are putting significant strategies and initiatives in place to protect the planet and do their part of address climate change.

Eight companies launched the Transform to Net Zero coalition, to accelerate action toward a net zero carbon economy. (The firms are A.P. Moeller-Maersk, Danone, Mercedes-Benz, Microsoft, Natura & Co, Nike, Starbucks, Unilever, Wipro, along with the Environmental Defense Fund.)

The examples for you this week in our Top Story choices are familiar names in the U.S. corporate sector: Microsoft, Apple, Facebook, Alphabet/Google.  Read on!

Top Stories

Progress on our goal to be carbon negative by 2030
(Source: Microsoft)
By year 2030, MSFT intends to be carbon negative and by 2050, will remove from the environment more carbon than the company ever emitted since its founding.  The company launched a new environmental sustainability initiative in January 2020 focused on carbon, water, waste and biodiversity.

Microsoft commits to achieve ‘zero waste’ goals by 2030
(Source: Microsoft)
By the year 2030, Microsoft will divert at least 90% of the solid waste headed to landfills and incineration from its campuses and datacenters, manufacture 100% recyclable Surface devices, use 100% recyclable packaging, and achieve 75% diversion of construction and demolition waste for all projects.

Facebook to buy 170MW of windpower in landmark renewables deal 
(Source: Power Engineering International)

Renewable energy developer Apex Clean Energy has announced a power purchase agreement (PPA) with Facebook for approximately 170MW of renewable power from its Lincoln Land Wind project in the US state of Illinois, making the social media giant Apex’s largest corporate customer by megawatt.

Apple commits to be 100 percent carbon neutral for its supply chain and products by 2030 
(Source: Apple)

Already carbon neutral today for corporate emissions worldwide, Apple plans to bring its entire carbon footprint to net zero 20 years sooner than IPCC targets. That “footprint” includes the company’s supply chain and products… every device sold! (Apple is already carbon neutral for its global corporate operations.)

Alphabet issues sustainability bonds to support environmental and social initiatives
(Source: Google)

As part of a $10 billion debt offering, Alphabet has issued US$5.75 billion in sustainability bonds — the largest sustainability or green bond by any company in history. During the past three years Google has matched the company’s entire electricity consumption with renewables…and has been carbon neutral since 2007.

It’s Earth Day Again – Let’s Celebrate – and Pledge Again to Defend Mother Earth!

For Earth Day – Plus 50 – April 22, 2020

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

The first Earth Day was the idea of and championed by a United States Senator, Democrat Gaylord Nelson of Wisconsin on April 22, 1970. Fifty years ago!

Let’s also celebrate his life (1916-2005) and the environmental movement he helped to launch as we observe Earth Day 2020.

For those of us who were not around back in the day, I will also offer up some background for you as we celebrate the 50th Earth Day.

Why Earth Day?
In 1970, there were too many assaults on the nation’s environment. On Our Good Earth with air, water, soil polluted – in many parts of the nation, we were really heavily polluted!  (There are still SuperFund sites being cleaned in many states.)

The American landscape was rich with manufacturing facilities and processing plants, located in every state. Our manufacturing and processing exports in the post-WW II period comprised fully one-quarter and more of all world trade.

The generosity of the U.S. in creating the Marshall Plan to help our former wartime enemies build up their economies and our WW II allies’ economies fueled the exports of American-made goods. 

Even today, U.S. manufacturing (really cleaner!) accounts for half of U.S. exports. U.S. manufacturing today by itself makes up the world’s 10th largest economy (ahead of China, Japan, Germany and many other manufacturing centers). But back in the day…

The Importance of U.S. Manufacturing in the Post War
After World War II, the U.S. was the dominant manufacturing center of the world. Germany and Japan factories were coming back on line, having suffered tremendous damage [to each country’s industry].

Early in the post-WW II period many European companies began setting up factories in the U.S. (chemicals, pharma) — and many of those companies were serious polluters here, as they were in Europe. (One reason why European investors were early adopters of ESG approaches – not often discussed.)

In 1951, “re-armament” was in full gear and the Cold War was on. Military production was greater than for consumer goods – and that meant many more plants would be turning out goods without necessarily protecting the environment around the plant. (“In the national interest…”)

Solvents used for manufacturing would go into the ground. Emissions from toxic fumes, into the air. Solid and liquid waste – into ground, or waters (streams, bays, rivers, oceans). As consumer goods manufacturing rose, a “Guns & Butter” economy emerged in the U.S., with the factories running in two or three shifts. Out put steadily rose. So, too, nasty byproducts.

The steady assault on Mother Earth by industry and governments steadily rose.

Among the catalysts for action after two decades:

The Cayuhoga River, flowing through Cleveland, Ohio, the industrial city on the Great Lakes, caught fired and the junk on top burned. (Noontime, June 22, 1969 – a five story fire flashed out of the river in the downtown!) Info at: https://clevelandhistorical.org/items/show/63

A huge oil spill just offshore fouled the beaches of Santa Barbara, California. January 28, 1969 – 3 million gallons of crude spilled off the shoreline of the beautiful city by Union Oil (now Unocal), leaving an oil slick of 35 miles in length along the California shores…killing bird, fish, mammals (and tourism!). 1,000 gallons of oil per hour flowed for a month.

The federal government had relaxed the regulations on casing around the drilling hole and an explosion ripped the sea floor. (Sound too familiar in 2020?)

The federal government did stop offshore drilling for a few years (in the state’s waters) but then that restriction was relaxed and The Los Angeles Times (which has covered the story for five decades) says today there are 23 oil and gas leases in state waters.

The California spill is considered a catalyst for the modern environmental movement. Richard Nixon was a California native — then sitting in the Oval Office — and was moved to action shortly after the spill.

The LA Times coverage is at: https://www.latimes.com/local/lanow/la-me-ln-santa-barbara-oil-spill-1969-20150520-htmlstory.html

In the eastern U.S., the trees on mountaintops were constantly seared and leaves gone, branches standing naked of greenery. The “acid rain” coming from parts of the nation to the west wafted high up and denuded New York and New England mountaintop greenery (that was SOX, NOX, etc from smokestacks carried far to the east on the higher winds).

Those with light color cars would be scrubbing the dark stains running vertically on the vehicle. Acid rain streaks. We saw those on our homes (the white paint, the rain gutters, these would be streaked with black stain).
https://www.sciencedaily.com/releases/1998/09/980928072644.htm

Personal Remembrances
As a boy, heading in the car to Manhattan or Brooklyn with family, I remember being curious about the large black, brown, yellow clouds hovering above the Empire State Building or Chrysler Building in midtown. Wafting along, at leisurely pace. You could “smell” the city as you approached. There was often a coating of soot on my shirt or coat when I returned home.

“Smog” enveloped many American and European cities. (Fog and smoke.) I have written a few times about my flying through or over city smog. Looking down below from the cockpit, thick yellow clouds often blanketed Manhattan on hot summer days. Flying through (at lower levels) I would be on instruments until I was safely over New Jersey’s rural parts heading west. And clean air again filled the cockpit!

You could always see the bellowing smoke coming out of New York City’s electric generating plants, furnaces fired by coal in those days.

For a time, to build flight hours, I flew around the city and suburbs on weekends broadcasting as “Captain Hank, Your Eye-in-the-Sky” for radio stations WGBB and WGSM. Checking on traffic to the beach, open spaces Jones Beach parking fields, fishing offshore, surfing at Gilgo Beach, and the like. Quite often I would be dodging in and out of smog banks that drifted eastward.

Up in Connecticut, driving one day along a river road, I was startled to see “rubber rocks” along the river bank. A large rubber tire company’s outflow of waste from the factory to the river had coated the rocks before heading downstream into Long Island Sound and then to the Atlantic Ocean. Everything would just disappear into the seas, right? (Prevalent thinking of certain business leaders at the time – externalize the crap and let someone else pay for results.)

Up in The Bronx (boro of New York City) and the northern parts of Manhattan, trucks would idle for hours as they picked up or dropped off food at the terminals…the children of minority populations living there had high rates of asthma. Part of the payment for the necessary local industry that employed their parents.

New York City – the Manufacturing Center!
It is hard to believe here in 2020, but New York City was once a mighty manufacturing city for goods now produced in Asia — apparel, footwear, jewelry and accessories. Also, for food and beverages (local beer manufacturers, sugar processing factories, colas). The Brooklyn Navy Yard produced mighty battleships and repaired aircraft carriers damaged in battle (the USS Enterprise).

Manufacturing is still big in Gotham City – but it is far cleaner, safer, more responsible in operations — by many magnitudes. https://nycfuture.org/data/manufacturing-in-nyc-a-snapshot

City of Transportation
New York has a magnificent harbor. The shorelines of Manhattan and Brooklyn boasted of many ocean shipping terminals for both passengers and cargo. Railroads ran along the shoreline (one abandoned line is now the High Line, an important Manhattan tourist attraction). The line brought carloads of meat to the west side, and then on to giant cruise ships of yesteryear.

Trucks ran uptown and downtown (my father owned a local trucking company and I would ride along on school breaks). The driver would back a truck up to the dock, load it, run around the city to deliver and pick up, bringing freight to the waiting rail cars along the docks, which would go on large barges over to New Jersey and out to the nation.

All of this activity pouring engine emissions into the air of New York, and with drip-drip-drip from transport machines (oil, gas, fluids) tricking down into the sewers and out to the rivers and out to the ocean.

This was at the height of 20th Century industrial America, the Arsenal of Democracy of World War Two. From east to west coasts and all through the heartland, factories poured out war materiel, and then shifted to peak production of peacetime goods for 1950s and 1960s consumer purchase. Along with Cold War materiel. Guns & Butter.

We were the world’s major manufacturing exporters, then, not China.

But at a cost. And so the rivers burning, smog choking the cities, creeks and bays and inlets and rivers and then oceans polluting.

Earth Day Helped to Change All of This – Looking Back, Rather Quickly
Senator Nelson was impressed by the 1960s “social revolution” with protest across the country as especially young men and women voiced their opposition to the status quo. Sit-ins were staged at universities to protest the draft and the Vietnam War. Marches took place in the south despite the marchers suffering beatings and arrests.

The senator was fascinated with civil rights sit-ins at southern soda fountains and marches by both black and white leaders — including many clergy and public officials. By the early organizing efforts to protect and ensure the rights of females and passage, state-by-state of the ERA – the Equal Rights Amendment (which failed to reach the votes to become part of the Amendments to the U.S. Constitution).

According to the Earth Day origin story, Senator Gaylord Nelson was thinking to himself: “If we could tap into the environmental concerns of the general public and infuse the student ant-war energy into the environmental cause, we could generate a demonstration that would force the issue onto the national political agenda.” And he did!

He set up an “Environmental Teach-in” (like civil rights counter “sit ins”!) to tell the story of the environmental degradation of the country and send a call to action to college campuses and schools. (Hey, let’s do that again today — so many youngsters are at home in the digital classrooms during this virus crisis!)

The result in 1970 was that 20 million people — roughly one-of-10 citizens — participated that first Earth Day (and that would be like 33 million people celebrating Earth Day today, out of our 330 million population!).

The midterm elections of 1970 saw many long-standing members turned out and a new wave of consciousness sweep the country. President Richard Nixon and the U.S. Congress on January 1, 1970 moved to pass the National Environmental Protection Act – which created the U.S. Environmental Protection Agency (EPA).

Then came passage of Clean Water Act (1972), Clear Air Act, Endangered Species Act, RCRA (waste), SuperFund (CERCLA-1980), Wilderness Act (1974) and many more federal and state regulations.

The good news is that while Senator Nelson hoped to kick off a movement, he did — and observance of Earth Day took hold – the year 1990 (20 years in) saw the peak participation in the U.S. and by 2000 some 184 countries held formal observances. There’s interesting background at: http://www.nelsonearthday.net/earth-day/

Alas, here in April 2020 we are homebound and not able to march or gather in groups. But we do have our electronic platforms of all kinds – so let’s connect and celebrate Earth Day that way.

We only have one (Earth) to protect and in the spirit of Senator Gaylord Nelson and those early organizers, let’s say we are still here, still with you in spirit, and there is much work still to be done!

Happy Earth Day, Mother Earth!

Shared Perspectives
You might be interested in the environmental movement perspectives here from March/April 2005, my column from the former journal, Corporate Finance Review. Popular Movements: A Challenge for Institutions and Managers” – explaining the emergence of ESG and the Sustainability Movement.

When Sustainability Movement Champion Michael Bloomberg was Mayor of New York City, in April 2007 he delivered a wonderful speech – A Greener, Greater New York – presaging his wonderful work in helping many of the world’s cities make their environments safer and more sustainable. This is what great mayors do!

One of the influential voices following the lead of Senator Nelson in our time is Bill McKibben, whose books and extensive writing have helped to influence the more recent sustainability movement. He was interviewed by the Times Union (Albany , New York) newspaper for this year’s celebration. 

You can follow him on Twitter.

Can’t get into the streets today to help celebrate? Earth Institute at Columbia University offers some suggestions on sheltering in place and celebrating

Is There a Trend of Greenwashing in the Fashion Industry?

By Reilly Sakai – Sustainability Analyst at G&A Institute

Despite being identified by some as one of the top contributors to impact on society’s environmental and social issues, on close inspection we could say that the fashion industry continues in 2020 to lag behind other sectors when it comes to a close review of the industry’s sustainability efforts.

The positives: Some major apparel industry players have or are attempting to create strategies and initiatives to reduce plastic and improve the sustainability of their supply chain.

However, in reviewing industry performance overall, it can be difficult to parse through which initiatives are actually making a difference — and which are simply an example of greenwashing, especially given the lower rate of disclosure of ESG emissions by prominent companies’ reporting.

Solutions? What Steps To Be Taken?

So, we can ask, what steps must be taken now — both at the company and the consumer level?

We can ask this question: Is it possible for an industry that so depends on continuous consumption of its products (clothing) to become more sustainable?

The fashion industry is reported to be responsible for more carbon emission than all international flights and maritime shipping combined — “producing 10 percent of all humanity’s carbon emissions” (source: UNEP, 2018).

The apparel industry is also the second-largest consumer of the world’s water supply — after fruit and vegetable farming, which can be very intensive in terms of water use (source: Thomas Insights, 2019).

And, among the challenges, it’s reported that up to 85% of textiles end up in landfills rather than being recycled or upcycled (UNECE, 2018).

Between 2000 and 2015, clothing sales increased from 50 billion units to over 100 billion units, while utilization of clothing (the average number of times a garment is worn) dropped 36% during the same timeframe (Ellen MacArthur Foundation, 2017).

These figures are nothing to scoff at as various sectors and industries move toward less water use; less waste to landfill; more recycling and re-use, among many measures adopted throughout industries.

Is the Fashion Industry Drive to Sustainability Slowing Down?

And yet, according to the Pulse of the Fashion Industry report from the year 2019, sustainability efforts in the industry appear to be slowing down rather than accelerating to address these issues.

In GRI’s Sustainability Disclosure Database, there are currently 248 organizations that fall in the textiles & apparel sector worldwide. Put that in perspective of the total 14,476 organizations in the database.

That’s less than 2% of reporting organizations in the textile & apparel sector. In the sector, there are just 80 GRI Standards industry reports, vs 4,089 GRI Standards reports in the database as a whole.

Given the rate at which the global fashion industry has been growing (before the coronavirus emergency) – more people, more apparel, more income, etc) — we might conclude that companies in the industry have simply not been doing enough to offset their well-charted detrimental environmental impacts.

So what to do now? We know that the fashion industry is important in terms of global economic impact and employment, and creativity – while also being a top contributor to waste, greenhouse gas emissions, water pollution, and an array of other negative environmental factors.

Incentives For Changing – Lacking

Today, there aren’t major economic or societal incentives in place for apparel companies to make real changes.

It’s going to take a lot of time and effort, not to mention considerable investment, to switch factories in which clothes are produced and polluting or violating human rights and so on (to address key ESG issues).

And it’s also quite difficult to have real transparency at every level of the apparel and footwear global supply chain to help to ensure a more sustainable production process.

Consumer Tastes – May Make a Difference. Maybe.

Moreover, while many consumers are now starting to buy what they believe to be the more sustainable products in many categories including fashion, very few consumers are apparently willing to pay more for them — or have the time or means to investigate every company’s sustainability initiatives and track record before making their purchase (Source: Pulse of the Fashion Industry, 2019).

Since it’s so much quicker and cheaper to do, companies instead may turn to marketing messaging that tells their customers that they are working towards a more sustainable future — without actually doing much or even anything in reality.

What Leading Companies Are Doing – the Positives

There is good news.  The “we are sustainable” message has begun to sell well and customers have been moving to certain apparel brands that are promoting a sustainable vision — without the buyer being able to (at point-of-sale) fact-check a company’s claims. That is the reality of at-market sales.

We can begin by taking a look at Everlane, which touts “radical transparency,” but doesn’t actually divulge the name of the factories in which its garments are produced.  So we don’t know what is going on there.

Patagonia, on the other hand, is considered best-in-class, offering repair and buyback programs in order to promote a circular economy, and has a multitude of policies and systems in place to ensure they’re doing everything they can to protect the environment and people who work at or interact with the company.

Nike, similarly, has done a lot to improve their supply chains over many years, using innovation as a driver for sustainability.

Rather than increasing factory audits to ensure that workers are wearing protective gear, Nike engineered a non-toxic glue so protective gear is no longer needed.\

Nike’s flyknit sneaker vastly reduced the amount of material needed to construct a shoe, meaning lower costs and less waste.

Other brands, from Adidas to Puma, have followed suit.

On the luxury end, Eileen Fisher has been a staple of sustainable clothing for decades, sourcing environmentally friendly materials, offering a buyback program, upcycling old materials into new garments, and sharing the wealth with all of her employees by offering a comprehensive ESOP.

Looking to the Future to Protect the Planet

With our Planet Earth’s environmental situation growing ever more dire, it is critical for the fashion industry — now! —  to encourage and make major changes — but convincing individual corporate leadership that this is a worthwhile investment is no small feat.

Because of the higher costs typically associated with implementing sustainability initiatives (or at least the perception of higher cost), overhauling a company’s entire supply chain is quite challenging.

Many fashion companies do not find it feasible in this competitive pricing environment to raise their prices or cut into their margins, especially when they continue to see the industry growing at such a swift pace year-over-year.

Perhaps more and more companies will consider Nike’s successful approach. That is, increasing spending in R&D as opposed to marketing, which has major potential to decrease costs and increase margins in the long-term, while improving their ESG efforts at the same time.

In my opinion, it’s going to probably take some form of public sector intervention or a mass consumer revolution or some similar dramatic action to influence the bulk of the fashion industry to move toward a truly sustainable future – and one of those things might happen sooner than later.

The leaders in corporate sustainability in the industry will be the major beneficiaries when the tide turns.

* * * * * * * * *

Reilly SakaiReilly Sakai is a sustainability analyst at G&A Institute; she began her work with us as one of our outstanding analyst-interns in grad school. She is completing her MBA program in Fashion & Luxury at NYU Stern School of Business, where she is specializing in Sustainable Business & Innovation, and, Management of Technology & Operations. She has been working with NYU’s Center for Sustainable Business on an independent study that explores environmental sustainability in apparel manufacturing.

The Impacts of Climate Change on Human Health in the United States

Guest Commentary by Anita Fernandes

Scientists and researchers from around the globe have warned that climate change is the greatest threat to human health in history.

In fact, the United Nation’s Intergovernmental Panel on Climate Change (IPCC) has concluded that all life on our planet is under existential threat.

From hurricanes and floods to drought and catastrophic wildfires, there’s no denying that climate change is affecting us right now. However, climate change also poses long-term problems particularly to sustainability issues that impact our economy, society and health.

In focus: The Impacts of Climate Change on Human Health in the United States

1. Temperature-related illnesses
Rising temperatures have direct and indirect effects on human health. Higher temperatures lead to an increase in the incidence of heatstroke, hyperthermia and dehydration-related deaths. High temperatures pose a greater risk to those with existing health problems such as cardiovascular, respiratory and kidney conditions.

It is difficult to calculate heat-related morbidity and mortality but researchers predict that future warming will result in an increase of from 2,000-to-10,000 deaths annually in each of 209 US cities.

This may seem like inordinately inflated figures until we consider that the 2003 European heat wave was responsible for approximately 70,000 premature deaths.

Higher temperatures are also linked to the spread of infectious diseases due to the increased populations of vectors such as mosquitoes and ticks.

Since the 1990s, the number of cases of Lyme disease (spread through deer ticks) has more than doubled in the US and affects approximately 300,000 Americans annually.

2. Extreme weather events
Weather extremes such as heat waves, droughts, tornadoes and hurricanes pose a significant threat to human health. Extreme heat was a rare occurrence in the USA just 50 years ago but now, extreme summer heat occurs about 7 per cent of the time.

We have also seen increases in concurrent droughts as well as heavy downpours and as the climate continues to warm, the number of fatalities will rise dramatically in the US.

Extreme weather events also have a significant impact on the country’s economy. For instance, hurricanes Harvey, Irma and Maria in 2017 cost over US$300 billion in damages.

Hospitals that are affected by hurricanes are forced to grapple with recovery costs in the following year — which is likely to have a negative impact on their operating performance.

Extreme weather events also cause damage to roads and bridges which disrupts access to hospitals and health care services.

3. Air pollution
Climate change impacts air quality and conversely, air quality impacts climate change. Hotter summers pose a serious health risk as the increased temperature results in stationary domes of hot air that trap air pollutants in the lower atmosphere.

These “stagnation events” have become more prevalent especially in cities as data shows that 83% of US cities have experienced an increase in stagnant days.

This also increases the risk of ground-level ozone — which is a dangerous air pollutant that causes chest pain and coughing and can worsen asthma, bronchitis and emphysema.

People with a history of these respiratory problems are at a higher risk of pneumonia and other pneumococcal diseases. Increased CO2 coupled with higher temperatures increases the growth rate of plants such as ragweed that are linked to allergies and asthma episodes.

Pneumonia information (“What you need to know”) is at: https://www.everydayhealth.com/pneumonia/guide/

4. Food and water shortages
Increased water temperatures brought on by climate change affects the habitat range for fresh water and can increase marine algae that produce toxins. Furthermore, flooding compromises human waste water treatment and can compromise drinking water leading to water shortages.

Reduced rainfall leads to diminished flow in rivers and streams which subsequently results in an increased concentration of harmful pollutants in these waters.

Similarly, climate changes in the American Southwest has resulted in less precipitation which has resulted in more severe and longer periods of drought. Crops fail to mature due to the lack of precipitation, which can lead to food shortages and food insecurity.

5. Mental health effects
Studies show that visits to the emergency department for mental illness and attempted suicides increase with higher temperatures. Furthermore, extreme heat poses greater risks to the physical and mental health of people with mental illnesses.

Disasters such as flooding and prolonged droughts can result in severe and even chronic mental health disorders including anxiety, depression and post-traumatic stress disorders. Increases in extreme heat also increase the risk of death for people with mental illnesses.

# # #

Guest author Anita Fernandes has been writing extensively on health and wellness for over a decade. She has expertise in nutrition, fitness, public health, and weight loss and has contributed content to a variety of leading digital health publishers.

Anita has a unique perspective on healthy living and lifestyle, as she has battled and overcome eating disorders and obesity. She shares her experiences in an effort to help others overcome the physical and mental health problems that can sometimes seem insurmountable.

About the Climate Crisis — The Hoax? It’s On Us!

November 8, 2019

By Larry Checco

The U.S. National Park Service markers show that in the 1940s and 1950s, about the time I was born, a glacier — Exit Glacier, just outside of Seward, Alaska — covered almost an entire valley in hundreds of feet, and megatons of ice and snow.

Today, Exit is melting at the rate of one-foot-per-day and receding back into the Harding Icefield from whence it came …millennia ago.

If you think that climate change is a hoax, then I suggest you visit Alaska.

My wife Laurie and I did recently and were in awe of the variety of its wildlife, the grandeur and majesty of its mountains and landscapes, the diversity and friendliness of its indigenous and transplanted inhabitants.
And we were greatly saddened by the dangers they all face.

Fact is, 2019 has been the driest and hottest year in Alaska’s recorded history. Anchorage, where half the state’s nearly 700,000 people reside, recorded a record-breaking 90 degrees F this past July 4th holiday.

Two-and-a-half times larger than the State of Texas, Alaska encompasses some three million lakes, 3,000 rivers, 1,800 islands, and 100,000 glaciers. You’ve got to experience it to believe it. And best to do it sooner rather than later.

It seems everything in Alaska is being affected by global warming— glaciers, vegetation, fisheries, wildlife, as well as native inhabitants who are fearful of losing their subsistence way of life, which they so cherish.

The heat and dryness accounted for more than 150 forest fires throughout the state during our two-week visit. One fire crossed the only road from Homer to Anchorage and forced our tour bus to follow an official pilot car through the smoke and small flame breakouts.

Alaska’s permafrost is thawing, which is buckling its roads (and Alaska doesn’t have many) and sinking some of its villages, making them uninhabitable.

Our tour of Denali was cut short because a rockslide the previous day took out some of the road.

None of this put us in any real danger, but they were real-life demonstrations of the force and influence of Mother Nature. And maybe, just maybe, we humans have something to do with it.

We saw in the wild, and from the safety of our tour bus, plenty of brown (grizzly) and black bears, moose, elk, caribou, big-horned sheep and more, and were told by our guide that many of their migration patterns have changed because of the increase in temperature.

We did not get to Alaska’s Arctic Circle region, where polar bears struggle to survive, but we were informed that polar bear specialists almost unanimously agree that predicted declines in summer sea ice due to rising CO2 emissions from fossil fuel use are now the biggest threat to polar bears.

Yet, in addition to rolling back some of our most important environmental regulations–including those related to clear air and clean water–the Trump Administration recently opened Alaska’s remote Arctic National Wildlife Refuge (ANWR) to oil and natural gas drilling, ending more than four decades of heated debate on the matter, and placing a large swath of Alaska’s pristine landscape at risk.

Some species live and learn, meaning they adapt to changing environments so as to live another day. Other species just live. I fear we homo sapiens fall into the latter category.

But there may be hope for us yet. Our trip to Alaska also exposed my wife and me to the wisdom of those who came before.

Ten Universal Values

The following Ten Universal Values are from the Alaska Native Knowledge Network, which includes Aleuts, Athabascans, Cup’ik, Tlingits, and several other Alaskan native tribes.

I think these principles are worth incorporating into our techno-driven, often mind-numbing lives:Show respect to others: Each person has a special gift.

  • Share what you have: Giving makes you richer.
  • Know who you are: You are a reflection of your family.
  • Accept what life brings: You cannot control many things.
  • Have patience: Some things cannot be rushed.
  • Live carefully: What you do will come back to you.
  • Take care of others: You cannot live without them.
  • Honor your elders: They show you the way in life.
  • Pray for guidance: Many things are not known.
  • See connections: All things are related.

If we can bring find the ways for ourselves to abide by these values there still may be time to turn things around. Let’s hope so.

There is no Planet B.

Contents Copyright © 2019 by Larry Checco – All Rights Reserved

Photo Gallery:

Larry with wife, Laurie. Glaciers are melting at a rapid rate in Alaska

Being escorted through a fire zone.

A grizzly, which most Alaskans call brown bears.

Laurie Checco with a sign offering good advice.

Larry in Homer, Alaska.

The Climate Change Crisis – “Covering Climate Now” Can Help to Shape The Public Dialogue

Introducing a new series of perspectives from G&A Institute…

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

We are bringing you a series of commentaries on the climate change crisis to share news, research results and perspectives to you in an organized way.

Fact:  We are facing dire outcomes for humanity and planet if we don’t move faster with strategies and actions to address the challenges of climate change.

We’re calling our shared perspectives “About the Climate Change Crisis”.

Global Warming.  Droughts. SuperStorms. Floods.  Rising Seas. Outbreaks of forest fires.  Loss of Species.  Degradation of farmlands.  Food Shortages. 

These should be defined as crisis situations, no?

Despite these dangers, the public dialogue on “climate change” issues in the United States reflects in some ways the divide in public opinion on critical issues facing the American public, government, business, the financial sector.

Climate changing? Yes and No. Human activities  causing the changes? Yes and No.
Should we be worried? Yes and No.

And so it goes.

The United States of America participated in the 2015 Paris (COP 21) meetings and signed on to the Paris Agreement along with almost 200 other nations, with President Barack Obama becoming a signatory in April 2016 and in September 2016 by presidential action presented the necessary documents to the U.N. General Secretary Ban Ki-moon.

The People’s Republic of China also presented the documents, a collaboration negotiated by President Obama. (This step by Barack Obama avoided presenting what amounted to an international treaty agreement to the U.S. Senate for ratification, required by the U.S. Constitution – approval assuredly would not happen in today’s political environment.)

The U.S. also contributed US$3 billion to the Green Climate Fund.

And so also by executive order, his successor in the Oval Office, President Donald Trump in March 2017 with swipe of a pen signaled the start of the complex and lengthy process of removing the U.S. from the historic Paris Agreement to limit the damage of global warming.

By his side: EPA Administrator Scott Pruitt (since gone from the environmental agency).

The backdrop: scientific reports that 2016 was the warmest year on record to date!

And credible scientists telling us that we have a decade at most to get control of climate change issues!

Prior to becoming president Donald Trump declared among other things that climate change was a Chinese hoax. (One of his positioning comments on the subject: “The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive” – November 6, 2012 tweet.)

But climate change is real – and we face a climate crisis in 2019!

What Did the Current U.S.A. Leader Do?

President Trump on November 4, 2019 officially notified the international community – and specifically the community of the United Nations – that the process of withdrawal was beginning and would be complete one year from now — the day before Election Day 2020.

Note that in November 2018 the government of the United States of America published the fourth climate change assessment by key U.S. government agencies: the “Climate Science Special Report” was prepared by the U.S. Global Change Research Program of the Federal government. (We’ve including an overview in this series.)

The contents are of significance if you are an investor, a company executive or board member, an issue advocate, public sector officer holder or civic leader, consumer — or other type of stakeholder.

There are volumes of data and descriptions in the report presenting a range of “high probability” climate change outcomes in this the 21st Century.

Adding credibility to the Federal government’s report to the nation and the world:  11, 258 scientists in 153 countries from a broad range of disciplines (biosciences, ecology, etc.) published a report in the Bioscience Journal (November 2018) – “World Scientists’ Warning of a Climate Emergency” – setting out a range of policies and actions that could be (adopted, taken) to address the emergency.

Good News About News Media

Good news from the purveyors of news to millions of people: the publishers of Columbia Journalism Review and The Nation created the “Covering Climate Now” (the initiative was launched in April 2019) intended to strengthen the media’s focus on the climate emergency.  The lead media partner is The Guardian.

The founders are now joined by cooperating media that today reaches more than one billion people worldwide. Representatives of 350 newsrooms in 32 countries have joined to ramp up coverage of the climate crisis and possible solutions. The campaign is designed to strengthen the media’s focus on the climate emergency.

Combined, the cooperating media reach more than one billion people worldwide.

Participants in the campaign include Bloomberg, Agence France-Press, The Guardian, The Minneapolis Star Tribune, The New Jersey Star Ledger, The Oklahoman, Corporate Knights, The Philadelphia Inquirer, The Seattle Times, La Republica (Italy), The Hindustan Times (India), Asahi Shimbun (Japan), La Razon (Spain), Greenbiz.com, Huffpost, Mother Jones, Rolling Stone, Scientific American, Teen Vogue, Vanity Fair, and many many other communications platforms.

Partner organizations in the campaign include wire services, news agencies, newspapers, magazines, digital news sites, journals, radio, podcasters, and institutions like Princeton University and Yale Climate Change & Health Initiative.

Could it be that the press, especially the U.S. press, can turn the tide of public opinion (with the naysayers and public doubters) with increasing and accurate coverage of the climate story?

Is the “media awake”?   That question was posed and answered in September 2019 by Mark Hertsgaard (The Nation) and Kyle Pope (CJR editor) addressing the  initiative.

Their comments are here for you: https://www.cjr.org/covering_climate_now/climate-crisis-new-beginning.php

Is this where you get your news a participant? Check the list here: https://www.coveringclimatenow.org/partners

Participating publisher Corporate Knights points out to us that “climate change” was suggested as a term to use by pollster Frank Luntz to President George W. Bush instead of the more frightening term, “global warming”. Let’s not scare the people. Gently move them forward.

We do need to return to the more accurate and realistic title of global warming. The threats posed by warming of land and sea are visible to us – every day now!

But, OK, if climate change is the popular branding, then let’s talk about the climate change crisis or emergency (so says the media collaboration).

We’re presenting this series of climate change crisis commentaries to help to tell the story of the climate change crisis or emergency.

The title is About the Climate Crisis, following the lead of the collaborating journalists.

The Good News

The good news as background to the above is that cities and states are “still in” and implementing strategies and actions to follow the Paris Accord in their jurisdictions. 

Corporations participated in the Conference of Parties (COP) meetings and especially the Paris COP 21 meetings.

Companies have been launching and reporting on their sustainability journey — actively addressing climate change issues — and investors are building more climate change considerations into their financial analysis and portfolio management. 

Combined these actions are keeping the United States in the game and helping to maintain the nation’s edge in climate change matters. Of course, we can ALL do more!

Let us know how we are doing. And please do suggest to us issues and topics and developments that might be of interest to you and other readers of the G&A Institute’s Sustainability Update blog.

Please do Stay Tuned to our ongoing blog commentaries.

The Young People Move to the Streets to Protest Slow or Lack of Action on Climate Change Challenges…

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

When our young people take to the streets in significant number, there is usually a revolution of some type in store, history tells us.  Revolutions belong to the young, we can say with some certainty if history is our guide. 

Think: Young “Minutemen” in the American Revolution, youngsters on the barricades in the French Revolution, counter-sitters and marchers in the Civil Rights protests in the American South. 

Dramatic change followed these protests. And now, we watch the young men and women in the streets of Hong Kong.

So what to make now of at least four million young men and women flooding into the streets and plazas of large cities and local communities around the world to “protest” their views of “inaction on climate change challenges” by those adults in charge (government and business, especially).

In New York City, Rome, Amsterdam, Tel Aviv, Madrid & Barcelona, Montreal, Berlin, Vienna, and many other of the world’s cities, on September 20th hundreds of thousands of young people rallied in protest and called on leaders to protect our planet. 

There were marches, music, signs of all sorts, speeches, and other public expressions intended to draw attention to the dangers posed by climate change.

A real crisis in our time and a dangerous threat to the young men and women and their younger peers in the decades ahead!

As symbol of the moment, climate activist Greta Thunberg (at age 16) boldly sailed over the seas from her home in Sweden (rather than take a jet airplane) to get to New York City for the celebration of Climate Week and the gathering of leaders at the United Nations General Assembly).

In interviews she commented that she does not understand why world leaders — including the President of the United States — would mock children and teenagers for acting on science that advances evidence that climate change is real – and dangerous for humanity and our planet.

But business is responding – and investors and the public sector, too. 

In one of the focus features we bring you this week, in the Harvard Business Review author Andrew Winston tells us what 1,000 CEOs really think about climate change and inequality. (We know Winston from his best-seller, “Green to Gold”.) 

He reminds us that nearly 200 CEOs working through the Business Roundtable (BRT) declared that business is no longer just about maximizing shareholder profit.

Many more hundreds of CEOs are in agreement and many are focused on climate change.  Are we moving fast enough? 

A report from UN Global Compact and Accenture (“The Decade to Deliver: A Call to Business Action”) presents the views of more than 1,000 global executives on their views of sustainability.

All of the large-cap company CEOs interviewed believe that sustainability issues are important to the future success of their enterprises.  The biggest challenge is climate change. 

This week our Top Stories (plural) are presented as snapshots of where we are as consumers, investors, government leaders and yes, business leaders, focus on sustainability and especially climate change matters.

An appropriate footnote:  in rural Southwest Montana, a participant in the local rally by mostly young people had this to say in a letter to the editor of the Bozeman Daily Chronicle in response to criticism of the young peoples’ rallies:  

“Climate change is not a political issue. It is a life or death issue. Our children are asking in what way school matters when our future is disintegrating before our eyes. 

“Children have as much right and reason to march anyone.  They march because they can still see possibility, opportunity and reasons to fight four just futures. 

“Next time, maybe you should join us to understand what our kids are marching for.”

Our offerings for you this week:

After strikes, youth climate activists keep pressure on leaders
Source: Reuters 

What 1,000 CEOs Really Think About Climate Change and Inequality
Source: Harvard Business Review

Business leaders join the UN Global Compact Leaders Week to address climate crisis and advance the SDGs
Source: UN Global Contract

Banks worth $47 trillion adopt new UN-backed climate, sustainability principles
Source: UN News 

Markets face major risks over lax climate forecasts, top investors warn
Source: Reuters 

The second-largest gift to a US university was pledged to Caltech. It’s being used for climate research
Source: CNN 

Climate Activism Requires More Than Just Sustainability Statements From Brands
Source: Ad Week 

Most of world’s biggest firms ‘unlikely’ to meet Paris climate targets
Source: The Guardian 

Lead on global climate change and sustainability
Source: St. Peter Herald 

Editorial: Climate Week 2019
Source: Advanced Science News 

Climate crisis seen as ‘most important issue’ by public, poll shows
Source: The Guardian 

Trump Administration Continues Attempts to Unravel U.S. Environmental Protections Put in Place Over Many Years – Now, Shareholder Proxy Resolution Actions on Climate Issues Also In Focus For Investors…

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

We should not have been surprised: in 2016 presidential candidate Donald Trump promised that among his first steps when in the Oval Office would be the tearing up of his predecessor’s commitment to join the family of nations in addressing climate change challenges. 

In late-December 2015 in Paris, with almost 200 nations coming to agreement on tackling climate change issues, the United States of America with President Barack Obama presiding signed on to the “Paris Agreement” (or Accord) for sovereign nations and private, public and social sector organizations come together to work to prevent further damage to the planet.

The goal is to limit damage and stop global temperatures from rising about 2-degrees Centigrade, the issues agreed to. 

As the largest economy, of course the United States of America has a key role to play in addressing climate change.  Needed: the political will, close collaboration among private, public and social sectors — and funding for the transition to a low-carbon economy (which many US cities and companies are already addressing).

So where is the USA? 

On June 1st 2017 now-President Trump followed through on the promise made and said that the U.S.A. would begin the process to withdraw from the Paris Agreement on climate change, joining the 13 nations that have not formally ratified the agreement by the end of 2018 (such as Russia, North Korea, Turkey and Iran).  

Entering 2019, 197 nations have ratified the Agreement.

A series of actions followed President Trump’s Paris Agreement announcement – many changes in policy at US EPA and other agencies — most of which served to attempt to weaken long-existing environmental protections, critics charged.

The latest move to put on your radar:  In April, President Trump signed an Executive Order that addresses “Promoting Energy Infrastructure and Economic Growth”.

[Energy] Infrastructure needs – a bipartisan issue – are very much in focus in the president’s recent EO.  But not the right kind to suit climate change action advocates. 

Important: The EO addressed continued administration promotion and encouraging of coal, oil and natural gas production; developing infrastructure for transport of these resources; cutting “regulatory uncertainties”; review of Clean Water Act requirements; and updating of the DOT safety regulations for Liquefied Natural Gas (LNG) facilities.

Critics and supporters of these actions will of course line up on both sides of the issues.

There are things to like and to dislike for both sides in the president’s continuing actions related to environmental protections that are already in place.

And then there is the big issue in the EO:  a possible attempt to limit shareholder advocacy to encourage, persuade, pressure companies to address ESG issues.

Section 5 of the EO“Environment, Social and Governance Issues; Proxy Firms; and Financing of Energy Projects Through the U.S. Capital Markets.” 

The EO language addresses the issue of Materiality as the US Supreme Court advises.  Is ESG strategy, performance and outcome material for fiduciaries? Many in the mainstream investment community believe the answer is YES!

Within 180 days of the order signing, the Secretary of the Department of Labor will complete a review existing DOL guidance on fiduciary responsibilities for investor proxy voting to determine whether such guidance should be rescinded, replaced, or modified to “ensure consistency with current law and policies that promote long-term growth and maximize return on ERISA plan assets”. 

(Think of the impact on fiduciaries of the recommendations to be made by the DOL, such as public employee pension plans.) 

The Obama Administration in 2016 issued a DOL Interpretive Bulletin many see as a “green light” for fiduciaries to consider when incorporating ESG analysis and portfolio decision-making.  The Trump EO seems to pose a direct threat to that guidance.

We can expect to see sustainable & responsible investors marshal forces to aggressively push back against any changes that the Trump/DOL forces might advance to weaken the ability of shareholders – fiduciaries, the owners of the companies! – to influence corporate strategies and actions (or lack of action) on climate change risks and opportunities.  Especially through their actions in the annual corporate proxy ballot process and in engagements. 

You’ll want to stay tuned to this and the other issues addressed in the Executive Order.  We’ll have more to report to you in future issues of the newsletter.

Click here to President Trump’s April 10, 2019 Executive Order.

Facts or not?  Click here if you would like to fact check the president’s comments on withdrawal from the Paris Agreement.

We are still in!  For the reaction of top US companies to the Trump announcement on pulling out of the Paris Accord, check The Guardiancoverage of the day.

At year end 2018, this was the roundup of countries in/and not.

For commentaries published by G&A Institute on the Sustainability Update blog related to the above matters, check out it here.

Check out our Top Story for details on President Trump’s recent EO.

This Week’s Top Stories

Trump Order Takes Aim at Shareholders Pushing Companies to Address Climate Change
(Wednesday – April 77, 2019) Source: Climate Liability News – President Trump has ordered a review of the influence of proxy advisory firms on investments in the fossil fuel industry, a mot that…

Environmental Threats to Us and Mother Earth – Seven Trends to Consider…and Develop Solutions From the Forum for the Future

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

This week we are celebrating Earth Day.  The first (in 1970) observance became a catalyst for action – soon after the first of a series of environmental-focused Federal legislation began to change dirty air to cleaner and then clean, and more laws to address a very unhealthy state of affairs in the U.S.A. (The Environmental Act, Clean Water Act, Clean Air Act, RCRA, etc.). 

But…the challenges for society have not gone away. The list of “hot ESG issues” grows by the week. 

Once an ESG issue emerges and people begin to dive into the details, a range of sub-issues arises.  In this corporate proxy season we are seeing top-line issues in focus and the underlying questions that investors have as they bring their resolutions to the companies for inclusion in the broader shareholder-base voting.

Example: Where “political spending” began as a broad issue the investors moved on to ask from where the company money was being spent directly(corporate donations to political party or candidate or PAC) to now, indirectly (is the company’s money going to business industry groups that lobby against shareholder interest – which ones, addressing what issues, how much money?) 

Some environmental challenges of the 1970s are still with us (consider the continuing impact of coal-burning, the state of global plastics disposal, and questions about water treatment such as in animal husbandry and fracking). And more issues are in focus under the huge bundle we refer to as “climate change”.

The evolvement of ESG as an integrated approach for investor evaluation of companies has complicated life for many corporate managers. 

In the recent past, a large-cap would assemble the “top 10” issues list for the management team and their direct reports to address.  For 3M, as example, “highway safety” and related issues under the heading would be high on the list (the company’s important product offerings would be directly impacted by changes). 

Today, that Top 10 list is all about the materiality of the issue(s) for many investors and companies — and how those issues are being measured, managed, how risk is being addressed and opportunities seized — and then reported to stakeholders.

In many large-cap companies a broader-based team will be busily shaping ESG strategy, policy, sustainability team practices and addressing issues-associated risk management on a much wider range of topics and subtopics. 

Timothy McClimon, head of the American Express Foundation, brings us his views on seven global trends – and their relevant issues – that are impacting the sustainability movement today. (You can think about how the seven impact your organization through the 2020s, the focus of the research and perspectives shared.)

He reviews the Forum for the Future’s report in a Forbes commentary.  The report is “Driving Systems Change in Turbulent Times” – with major implications for “how” or even “if” we will be able to address current global “E” challenges.  (Are patterns of behavior, structures or mindsets shifting toward or away from sustainability?)  Consider:

First – the plastics kickback; we continue to produce and then dispose of eight million tons each year with no real change in sight. (We are adding tons of material that will go “somewhere” and have an impact on society.)

Second – Climate change and the impact on mass migration; large parts of the world are becoming less hospitable and more people will try to move to safer places. Mass migrations are ahead. Perhaps as many as 2 billion persons will be affected by climate change and migrating away from their homes.

Third – around the world, Nationalism Marches Again; this is leading to fragmentation, intolerance, competition for fewer resources… complicated by growing inequality and a range of old and new “S” issues.

Fourth – We Live in the “On-Life” – by the end of this year, half of the world’s 7-billion-plus will be online, with issues arising (mental health, social cohesion, personal interaction, privacy and security, and more).

Fifth – The Rise of Participatory Democracy; cities and states lead the way in combating rising levels of protectionism and nationalism, which may usher in a new era of more local decision-making and civic participation.

Sixth – Asia’s Changing Consumerism; China leads the way with India, Japan, South Korea and Thailand close behind in moving more people into middle class status.  But, we are losing our global capacity to sustain them as the pursue the good life.  Millennials may slow the trend in Asia (they’re more conscious consumers).

Seventh – Biodiversity is Now in Freefall; scientists see mass extinction of some plant and animal species and one-fifth of the valuable Amazon rainforest has disappeared. (Something has to give to make room for growing food to meet the needs of the growing Earth population.) Little is being done about this, say the report authors.

How can we meet these global environmental challenges – what principles can be adopted to preserve the good life so many of the citizens of Earth enjoy today?  Some are spelled out in the Top Story for you.

Author Timothy J. McClimon is president of the American Express Foundation and serves on not-for-profit boards. He also teaches at New York University and at Johns Hopkins University.

Click here for more on the Forum for the Future (not for profit).

Each of the 7 trends has a chapter devoted to the issues. 
Click here for the full report.


This Week’s Top Stories

7 Global Trends Impacting The Sustainability Movement   
(Tuesday – April 16, 2019) Source: Forbes – the Forum for the Future advances seven trends that have major implications for how (or if) we will be able to address current global environmental challenges…