It’s Time to Pay it Forward

Guest post by Larry Checco – Sharing Perspectives

Would my wife and I like to have the federal government drop $2,400 in our laps? Sure, who wouldn’t.

Would we miss a meal or a mortgage payment if it didn’t happen? No.

But many of our fellow Americans will.

So, we’ve decided, after making sure that we and our grown kids would remain financially sound during this crisis, that we would donate our windfall to the common good—namely to those who need it far more than we.

Then we got to thinking: What if we could convince those who are in the same financial position as we are to do the same? Think of the difference it would make!

What if we created a “giving circle” where just 10 others joined us? That’s $24,000!

Then we could identify families, friends or neighbors who need help paying their rent or mortgage. Or buying food. Or, a small business in need of a bridge loan. Or a local health care clinic in need of medical supplies. Or nurses and doctors in need of childcare while they go about the heroic business of saving others.

Use your imagination!

If 100 people did the same, we’re talking $240,000. Real money.

What if this could turn into a grassroots nationwide movement. WOW!

It’s estimated that before the coronavirus rocked the stock market there were nearly 15 million millionaires in the United States. Many of these people won’t qualify for the government’s $2,400 largesse because they earn too much. Many already give generously.

But imagine if, along with the rest of us, they all kicked in an extra $2,400.

Let’s do the math!

My wife and I are not wealthy people. We have what we have because we always lived slightly below our means. Now it’s time to give slightly above our means.

The needs are great. More than 16 million Americans have already lost their jobs. Economists tell us many million more job losses are yet to come.

It’s obvious the government can’t do it on its own. It’s up to We the People, to determine what kind of country we want to live in.

What we’re proposing is not a bailout for large banks and corporations, or for the government, for that matter. Regardless of how good or bad you believe the government has handled this crisis, we’re talking about something else entirely.

We’re talking about people helping people directly—no middleman needed.

Helping people who, through no fault of their own, have lost jobs, their health, or even a loved one, and are going through extraordinary tough times.

If you’re part of the business community—especially a large corporation—it’s to your advantage to help ensure that most of us get through this crisis, not only physically healthy, but financially sound.

Companies need to do their part, as well—from extending additional benefits to your employees, including health care, cash bonuses or advances, as well as temporarily lowering your prices on essential goods and services, or providing in-kind-donations to local nonprofits.

Whatever it takes.

If in fact 70 percent of our economy is consumer-driven, then when we finally exit this dark tunnel, consumers are going to need the confidence and resources to jumpstart the economy and help it snap back.

By all of us helping each other get through this crisis, it might just do the trick—and save us ALL a great deal of lingering economic pain in the long run.

It might also help bring us together as a nation, help heal our glaring and disabling political divide and make us proud to call ourselves Americans.

It will encourage us to feel good about ourselves as we wrestle with the isolation and the feelings of hopelessness and despair many of us are currently experiencing. It would be a way to reach out to others.

We’re the wealthiest nation ever. If not us, who? It not now, when?

Let’s think about it when that government check gets deposited in our mailbox or bank account.

Let’s don’t talk about wanting to make a difference. We can MAKE the difference!

Contents Copyright (C) 2020 by Larry Checco – All Rights Reserved

We Must Accept the New Reality – a Personal Perspective

Personal perspectives shared by Ken Cynar – Executive VP, Editor-in-Chief – G&A Institute

The initial pandemic panic seems to have subsided, those that needed to hoard have apparently reached their limits and now is the time for calm.

We must be ready for the long haul….the very long haul!

There are some people who have been focused on immediate gratification so often that [gratification] becomes the only solution; for those people and all the rest of us — I think that this period in our lives should be teaching us patience.  Patience and forbearance.

Social isolation will test our relationships, reach into our inner being and unfortunately in some cases release inner anger and frustration.

This is not the time to point the fingers, get angry at whomever or scream to the heavens that the gods are at fault.

“The fault… is not in the stars… but in ourselves.” There is plenty of blame to go around for the situation we find ourselves in today.  

The time is at hand for us to accept that it will be months, not weeks before there will be return to some normalcy.

Meantime, children will be home schooled; those of us that can, will work from home, all of us will become somewhat disconnected from friends and family, money problems will challenge many, and our focus will be on basics…food, water, health and safety, shelter.

Hopefully many will take the opportunity to look inward and readjust and improve the things they should value. New sneakers or clothes and that new car will become less and less important. A new set of real values can replace the old.  That will change many aspects of 21st Century living.

And those changes will require us to adjust to the new normal of the day.

Accept it or not, I believe that we are now returning to the values of a simpler time…like it or not, depending on your point-of-view.

You can embrace change, work with it and yourself or continue to howl at the moon in anger and frustration…which believe me is pointless.

Pick yourself up, dust yourself off and get back to living. Get on the phone to your friends and neighbors…help them adjust…offer your counsel…your comfort…seek the humanity in all…and live your life according to the new rules.

Get on Facebook or other social media with good news, humor, stories… not ranting at the whomever or whatever. Connect and stay connected.

We can get through this by helping each other. See who might need a call on your block…maybe you can pick up some needed food for them the next time you go to the store.

If you don’t have it in your heart to reach out now…then when?

Acts of kindness are for now!

In this all please don’t lose your faith…it is a time for prayer. For God is there, always listening.

That’s the way I see it. Comments to share?

Relief For IRA Account Holders – Minimum Distribution Changes

April 2 2020

By Daniel P. DoyleFellow, G&A Institute

Information that individuals can use if they are in the age bracket where they are required to make withdrawals from their IRA accounts, or if they are approaching the age for minimum withdrawals. The coronavirus crisis has resulted in rule change.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law on 27 March. Section 2203 of that Act suspends the Required Minimum Distributions (RMDs) that would otherwise be required of owners of IRAs and of certain defined contribution plans.

Individual owners of such plans who were born before 1 July 1949 are normally required to initiate distributions starting for calendar year in which they reach 70 ½.

Under recent legislation — the Secure Act — individuals who were born after 30 June 1949 would normally be required to initiate distributions at age 72.

Distributions are taxed as ordinary income. If a taxpayer does not need all or part of his or her RMD for current income, it can be beneficial to let the funds remain invested until future years.

There is no provision in the CARES Act for a taxpayer to reverse distributions that may already have been taken in 2020.
Congress passed a similar suspension for 2009.

Daniel P. Doyle – Bayside, New York – Fellow, Governance & Accountability Institute – https://www.ga-institute.com/about-the-institute/fellows-of-the-institute/daniel-p-doyle/daniel-p-doyle-career-information.html

Estée Lauder Companies Actions in the Crisis

Continuing the Series – Excellence in Corporate Citizenship on Display in the Coronavirus Crisis – Actions Taken By the Corporate Sector Leaders – #5 in the series

March 25, 2020
by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team — continuing the conversation about corporate and investor response to the coronavirus crisis.  From this post on, we are going to share news about the corporate sectors’ actions for ease of reference for our readers.  We’re sharing these posts through our social media and suggest you might do the same to help get the news around.

See the first post in the queue for details about this series – scan down to see that for information.

* * * * * * * * * * *

“Guided by its family values and spirit of giving,” The Estée Lauder Companies and The Estée Lauder Companies Charitable Foundation (ELCCF) “stand with the global community” and are adjusting the traditional giving programs to provide aid to help limit the spread of the virus and help to ease economic hardships. Just announced:

The company and foundation are supporting the work of Doctors Without Borders/Medicins Sans Frontieres (MSF) with a financial grant of US$2 million. Among the many projects of MSF, the international medical humanitarian assistance has been lending aid to people in distress.

Such as in wartorn Syria, with one million people uprooted in the midst of war, suffering food shortages, lack of medical aid, and now the virus crisis. The MSF organization has to date provided specialized burn units, surgery, physiotherapy and psychological support in Syria and other regions of the world.

The Estée Lauder financial assistance will help Doctors Without Borders/Medicin Sans Frontieres in highly-impacted countries.

The company’s Melville, New York manufacturing plant (on the Nassau-Suffolk counties border) re-opens now to produce hand sanitizer for high-need organizations and populations – especially including front-line medical staff.

Note: compensated employee volunteers are doing the vital work here, as both counties are covered by the New York State “stay at home” guidance.

In New York City, where the company is headquartered, a grant was provided to support “The NYC COVID-19 Response & Impact Fund”. This is administered by the New York Community Trust which manages hundreds of family and organizational trusts and makes targeted grants to worthy causes.

The new fund will (with at least US$75 million raised to date) support NYC’s vital social services and cultural community organizations.

The 90-year old NY Community Trust helps donors “make smart grantmaking solutions” that address the quality of life issues that align with the donors’ values. (The Trust staff is continuing their work remotely as New York City is mostly shut down.)

The various donors (individual and organizational) are typically investing in such buckets as those addressing poverty, justice, education, health, arts, environment, LGBTQ, elderly, and children and teens. More information is at: https://www.nycommunitytrust.org/

In China, over $800,000 was awarded by Estée Lauder to relief efforts – including the Red Cross Society of China, Shanghai Charity Foundation, and Give2Asia. $1.4 million was provided with in-kind donations to the China Women’s Development Foundation to support front line medical staff.

As the crisis evolves, ELC and the ELCCF will continue to align philanthropic resources based on needs – prioritizing food, medical and emergency assistance. The foundation focuses effort on health, education and the environment and makes annual grants to organizations that align with these.

* * * * * * * *

Congratulations to the global Estée Lauder team (in the USA and other nations, wherever you are working today).  These efforts reflect the values instilled early on in the firm from those earliest day by founder Estée Lauder and husband, Joseph, in New York City in 1946.  They created cleansers, oils, skin lotions, creams. Today grandson William P. Lauder is executive chairman of the global firm that makes fragrances, hair and skin makeup products, make up, and other products.   Founder Estée Lauder was named by Time magazine in 1998 as one of the 20 most influential business leaders of the 20th Century.

* * * * * * * *

G&A Institute Team Note
We are continuing to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.

The new items are posted (beginning with this one) at the top of the blog post and the items then will move down the queue.

We created the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID-19 for our Twitter posts. Join the conversation and contribute your views and news — email info@ga-institute.com. Keep up the good fight!

G&A Institute Now Accepting Applications for Spring & Summer 2020 Sustainability Reports Research Analyst Internship

G&A’s non-compensated remote internship opportunity is for qualified students interested in learning more about corporate sustainability and corporate ESG performance (“Environmental, Social, Governance”) issues.

G&A Institute Interns during their remote internship learn and master important elements about the Global Reporting Initiative (GRI) Standards for sustainability reporting, along with other common reporting frameworks used by investors, such as, CDP, RobecoSAM CSA (DJSI), SASB, IIRC, the UN SDGs, and other frameworks. An example of topics and issues of discussion and research during this internship include the concepts of materiality, stakeholder engagement, external assurance, reporting balance, comparability, and many others. All of which is valuable knowledge and experience that can be applied in your studies and future careers

The work will support G&A’s pro-bono (uncompensated) relationship as the Global Reporting Initiative (GRI) data partner for the USA, UK, and Ireland, along with contributing to associated research on sustainability reporting trends made available to the public with recognition of the intern’s contributions to the research.

GRI’s reporting framework and standards are the most widely used in the world for these types of reports. However, G&A interns will analyze all types of sustainability reporting and frameworks; beyond the GRI framework.

This is a rapidly growing area of interest to Wall Street, investors and various corporations from all sectors and industries. In 2019, G&A interns contributed to G&A’s annual research publication tracking sustainability reporting trends and found that 86% of S&P 500 companies were publishing sustainability reports, up from 20% in 2011! Additionally, G&A 2019 interns team contributed to G&A’s inaugural research tracking sustainability reporting trends of the Russell 1000, finding 60% of Russell 1000 companies are publishing sustainability reports.

Opportunity:  

  • Discover the ins and outs of the world’s leading sustainability framework (GRI)
  • Learn to analyze data and interpret content from GRI sustainability reporting
  • Gain insights into the rapidly growing field of ESG from industry-experts
  • Assist in team research supporting G&A publications; public recognition will be given to all interns involved in research and publications

Internship Identification:  Sustainability Report Research Analyst (supporting G&A’s GRI Data Partner relationship)

Virtual Location: Work is done remotely – at your own location with a flexible work schedule.  Initial training via virtual meeting tools. There will be opportunities to attend industry networking and training events with G&A’s network of event and training partners.

Time Period & Commitments: Internship position requires approximately 10 hours per week and runs Spring 2020 through Summer 2020.  The timing of the work is flexible for a majority of the time required and can be done remotely. 

Compensation: This is an unpaid learning experience only internship.

MORE ABOUT THE INTERN POSITION
In this role, you will work as part of a team to analyze sustainability reports for inclusion in the largest global database of sustainability reports, the GRI’s Sustainability Disclosure Database (database.globalreporting.org).

Learning to read, analyze, use and structure data from reports using the GRI Standards, GRI G4, GRI-Reference, as well as NON-GRI corporate and institutional reports, will comprise the majority of this assignment.  The research will also contribute to several published research reports on various trends in sustainability reporting which are made public and widely referenced by media, academics, business, capital markets players and other important sustainability stakeholders.

Student(s) selected will have the opportunity to experience a fast-paced, highly-adaptive, mentoring culture in a small but growing company with a unique niche. This is a hands-on position with considerable learning opportunity for those headed into corporate responsibility / sustainability / citizenship or sustainability / impact investment careers.

G&A interns get public recognition for their work in published reports, on G&A’s web platforms, blogs, and public press releases.

G&A’s is proud of its Intern Alumni and are happy to share their success with the world, as they accomplish great things through their careers navigating the way to sustainability. 

To see what past G&A Interns have been doing (and their backgrounds) check out G&A’s Honor Roll at http://www.ga-institute.com/about-the-institute/the-honor-roll.html  

INTERNSHIP CANDIDATE REQUIREMENTS

  • Must be in senior year of Bachelors program or in a Masters program with major/studies focused on business, capital markets, ESG, environmental and/or sustainability issues and topics.
  • Demonstrate strong background / keen interest or past work experience in ESG and sustainability-related issues / topics.  
  • Having a basic understanding of business and the capital markets is mandatory.
  • Must have strong skillsets and experience in independent online research and analysis.
  • Must be excellent at using Excel / Google Sheets and researching on Google.
  • Have strong technical, communication and organizational skills. 
  • Must be self-driven and able to work independently to meet expectations and deadlines.
  • Must be fluent in English, additional languages are a plus.
  • Applicants with good writing and editing abilities will have a preference.

APPLICATION PROCESS
If you meet the above requirements, interested students should send:

  1. A cover letter outlining why you would be a good fit for this role.
  2. Resume including your education, skill sets, and work experience.
  3. A one-to-two page introduction essay on what you would like to learn more about (in terms of your career goals), what your interests are, and anything else you feel may be relevant to the job/our organization. Include sectors or industries you may be particularly interested in regarding ESG / Sustainability.
  4. Samples of writing or research on sustainability or other topics are also a plus.

Send application materials to Governance & Accountability Institute at:
lcoppola@ga-institute.com & agallagher@ga-institute.com

ABOUT GOVERNANCE & ACCOUNTABILITY INSTITUTE
Founded in 2006, Governance & Accountability Institute is a New York City-based company that specializes in research, communications, strategies and other services focused on corporate sustainability and corporate ESG performance (“Environmental, Social, Governance”) issues. 

G&A is the data partner for the United States, United Kingdom and the Republic of Ireland for the Global Reporting Initiative (GRI).  The Global Reporting Initiative is a non-profit organization that promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.

GRI provides all companies and organizations with a comprehensive set of sustainability reporting standards that are the most widely used and respected around the world.  Currently, thousands of global organizations use the GRI to report on their Environmental, Social, and Corporate Governance (ESG) strategies, impacts, opportunities and engagements (www.globalreporting.org).  

As the US, UK and Ireland data partner of the GRI, G&A’s role is to collect, organize, and analyze sustainability reports that are issued by corporations, public entities, not-for-profits and other entities in the United States, United Kingdom and the Republic of Ireland for the benefit of all stakeholders. 

Send application materials to Governance & Accountability Institute at:
lcoppola@ga-institute.com & agallagher@ga-institute.com

The World Economic Forum on Corporate Citizenship Topics – With Focus on the Fourth Industrial Revolution

Another in the series – The Corporate Citizen and Society – the Dynamics of the Relationship

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

“Davos” – the annual gathering of the elite in business, politics, popular culture and journalism (and other corners of society) in the Swiss winter is familiar to most of us.

This event attended by more than 2,000 global thought leaders is staged by the World Economic Forum (WEF). Each January the meeting is convened and a steady stream of proclamations comes forth with positions discussed and often adopted by participants.

The steady stream of news from Davos, Switzerland not only in winter but throughout the year frequently touches on matters to be categorized in the wheelhouses of managers in corporate governance, corporate sustainability, corporate responsibility, investor relations, and corporate citizenship (and other functions).

The WEF stages conferences during the year in East Asia, Africa and South America; also, in the Middle East, China and India. But “Davos” is the well-known appellation for the winter meeting in the city of that name.

Because so many corporate leaders make commitments and “promises” for future action at Davos and other WEF regional meetings, it’s important for those reporting to the C-suite as well as in the suite and in board rooms to be aware of the promises of strategy to be adopted or adjusted, and expected actions to follow.

Here is a brief look at some of these recent proclamations to illustrate this.

The 48th World Economic Forum Annual Meeting (in January 2018) closed with a Call to Action to Globalize Compassion and Leave No One Behind.

This was an important gathering of 2,000+ leaders as the world’s attention continued to shift to “sustainability “ and related topics (such as global warming and transition to a low-carbon economy among the issues).

The meeting “celebrated” the spirit of inclusion, diversity and respect for human rights, putting people at the center of the story with a call to action, said one of the seven female co-chairs at the meeting, Sharon Burrow. “Let’s ensure that Davos 2018 is just the beginning of a movement where we globalize compassion and ensure a world in which no one is left behind.”

There were 400 separate sessions at the meeting, and one theme kept threading throughout: the need to embrace our common humanity in the face of the rapid technological changes ushered in by the Fourth Industrial Revolution.

“The Fourth Industrial Revolution” (FIR) was earlier framed and addressed in spring 2017 by the WEF Center for the FIR with new network centers opening in India, Japan and the UAE; partners for the initiative include the governments of Bahrain, the UK and Denmark, the Inter-American Development Bank, Deutsche Bank, and others.

The year before the January 2018 gathering in Davos, WEF had assembled 700 leaders in September 2017 (during the UN General Assembly and Climate Week meetings in New York City) to announce public-private initiatives:

  • One was the “Fourth Industrial Revolution for the Earth” – a private-public sector initiative to identify and fund new ventures (and scale them!) to “harness technologies” to benefit the global environment.
  • The Global Battery Alliance to “clean up” battery industry supply chains.
  • A “National Task Force” in South Africa to close skills gap.
  • A Disaster Risk Innovation Fund to test and scale innovations using mobile technologies to help in humanitarian emergencies and disasters. This was organized with the help of the United Kingdom for International Development (UK DFID) and the GSM Association (GSMA), the trade group representing almost 1,000 mobile communications operators and 300 industry companies.

The 2017 meeting was the WEF’s inaugural “Sustainable Development Impact Summit” — intended to broaden public-private sector cooperation to meet the challenges of the Fourth Industrial Revolution and work to achieve the goals agreed to at the 2015 Paris climate summit.

What steps can public and private and social sector leadership take to put the “common humanity” theme into action? Here are some things agreed to at Davos:

  • The WEF published a report – “Towards a Reskilling Revolution” — providing guidance need to help millions of people find jobs lost due to technological change.
  • The WEF-led “IT Industry Skills Initiative” whose “SkillSET” portal aims to reach a million IT workers by 2021.
  • A new multi-stakeholder initiative is “Friends of the Ocean Action” — launching an “Ocean Action Track” to protect oceans, seas and marine resources vital to so many coastal and non-coastal nations.
  • Marc Benioff – founder, Chair / Co-CEO of Salesforce.com, pledged US$4.5 million funding through the Benioff Ocean Initiative.

Salesforce Chair/Co-CEO Benioff heads the 30,000 employee company, and was named by Fortune as one of the world’s greatest leaders, and by Harvard Business Review as one of the 10 Best-Performing CEOs. He was the co-chair of the summit.

He explained: “There is incredible tension between the dramatic innovation that is occurring and the issue of equality. The technologies of the Fourth Industrial Revolution offer the opportunity to drive progress to the Sustainable Development Goals (SDGs).”

(CEO Benioff has a new book out now – “Trailblazer: The Power of Business as the Greatest Platform for Change”.)

The summit was designed to accelerate the “successful achievement” of the UN SDGs.

  • The WEF’s “Closing the Gender Gap” is attracting state support in Latin America (Peru, Chile, Panama and Argentina were on board at the time of the meeting).
  • Corporate leaders from Alphabet, Coca-Cola Company, Royal Philips and Unilever teamed with governments of Indonesia, Nigeria, China and Rwanda to create the “Platform for Accelerating the Circular Economy” (PACE) to address the mounting problems posed by discarded electronics and the plastic waste stream through recycling these manufactured items back into economy for future use.

As developing economies bring more people into the middle class, the consumption of meat products rises (more animal protein is consumed).

While this is good for ranchers and meat packers it is seen as not so good for the global environment by climate activists and sustainable food activists.

And so out of Davos comes the “Meat: the Future” initiative, to help identify ways that animal meat and protein production can be made more safe (for all involved, including the animals), affordable and sustainable as the industry players work to meet growing consumer demand.

Thomson Reuters, Europol and WEF announced a partnership to raise greater awareness worldwide to help governments and industry fight financial crime and modern slavers. Key: Promoting more effective information-sharing and step up best practices in compliance.

And that leads to a currently-debated hot issue: the growing prevalence of “fake news”, especially in political circles and affecting local elections in developed democracies.

  • The Craig Newmark Foundation is collaborating with WEF; the aim is to bring tech /social media industry leaders together with stakeholders to address fake news issues. (Craig Newmark was the founder of Craig’s List and his philanthropy includes funding for journalism institutions such as the Poynter Institute and graduate schools for journalists.)

The WEF, through its Davos and regional gatherings, and an array of public-private sector initiatives, provides ample opportunities for corporate citizens – and their CEOs and boards – to identify and leverage opportunities to bolster existing core businesses and develop new and innovative ventures with and without partners.

In 2015, WEF was recognized as The International Organization for Public-Private Cooperation.

We’ll continue to share news of interest related to the corporate sector from the World Economic Forum in this series of commentaries.

Note: In the public dialogue now about “purpose”, WEF developed its “Our Mission” statement years ago. “The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have th4e drive and influence to make positive change.”

Full statement here: https://www.weforum.org/about/world-economic-forum

The Climate Change Crisis – “Covering Climate Now” Can Shape The Public Dialogue – And Influence Outcomes

November 7 2019

Another in the About the Climate Change Crisis series

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

The increasing tempo of 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.

Is the Climate changing? Yes and No. Are humans causing the changes? Yes and No. Do we need to take action now? Yes, No, Maybe.

Should we all be very worried about the survival of humanity? The planet?

Yes and No. As novelist Kurt Vonnegut would say — And so it goes.

The United States of America participated in the historic 2015 Paris (“COP 21”) meetings and signed on to the Paris Agreement (or Accord) along with almost 200 other nations, with President Barack Obama becoming a signatory in 2016.

The Paris Agreement was “official” for the U.S. (and the world) in November 2016 (as the family of nations formalized their commitment and involvement).

In September 2016 by presidential action President Obama had presented the necessary documents to the U.N. General Secretary Ban Ki-moon for U.S. participation.

The People’s Republic of China also presented the documents, a collaboration negotiated by President Obama.

These steps by Barack Obama avoided presenting what amounted to an international treaty agreement to the U.S. Senate for ratification, as required by the U.S. ConstitutionArticle II-Section 2the advice and consent of the Senate is necessary for the President to make treaties.

Such approval for an international treaty assuredly would not happen in today’s contentious political environment. Even if not joining the other nations and tackling climate issues as an organized effort (the Federal Government might mean prevention of catastrophic damage to our nation.

Such is the yes/no politics today, even considering the massive threats posed by the changing climate.

The U.S. also contributed US$3 billion to the Green Climate Fund by President Obama’s orders.

And so by similar executive actions, his successor in the Oval Office, President Donald Trump in March 2017 with swipe of his pen (actually a Sharpie®) informally 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: reliable 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!

So What Did New the U.S.A. Leader Do?

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

Donald Trump before being elected 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!

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’re including an overview in this series of commentaries.)

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.

Good news, at last from the important purveyors of news: the publishers of Columbia Journalism Review and The Nation created the “Covering Climate Now”  intended to strengthen the media’s focus on the climate emergency. (The initiative was launched in April 2019.)

The founders are 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.
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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, is finally waking up to the climate story?

That question was posed in September 2019 by Mark Hertsgaard and Kyle Pope in response to the initiative. Their comments are here for you:
https://www.cjr.org/covering_climate_now/climate-crisis-new-beginning.php

Is 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 reference 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’ve introduced a series of climate change crisis commentaries in this blog.

And the title for the running series of commentaries is: About the Climate Crisis series, following the lead of the collaborating journalists.

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

Please do Stay Tuned to this series — “About the Climate Crisis”.

Climate Change-Related Disclosure: The TCFD Is Here — the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures

Original Document: August 2017 – published in G&A’s “To the Point” Management Briefing Platform

Republished on  Sustainability UpdateOctober 2, 2019

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

The Work of the TCFD Will Affect Your Company’s Important Financial Disclosure & Filings.

And Your Relationship With Investors, Lenders, Asset Managers, Insurers, Public Sector Entities…

More climate-related disclosure in store for your company’s income statement/cash flow statement/balance sheet.

How will your company be affected by the FSB TFCD guidelines for your company’s ESG disclosure?

The Financial Stability Board (FSB) is a global, multi-stakeholder organization that brings together senior policy makers from the G20** nations plus leaders from the European Union (with 28 individual states), Hong Kong, Singapore, Spain, and Switzerland.

The Board’s gatherings include representatives of the G-20’s central bankers, regulatory leadership, bank and financial sector oversight leaders, and others.

The deliberate and work to create “financial stability” policies for countries to follow — these are not mandates, not replacements for existing sovereign authorities — that those at the table as thought leaders and influencers can also take home and implement in various ways.

There are six regional “consultative groups” that help coordinate activities in an additional 70-plus countries, including in developing economies & emerging markets.

In this way as financial sector policies are being formulated there is help available from more experienced professional (such as professional colleagues in developed nations, the G20 plus four group),

The work of the FSB (formed after the 2008 global financial crisis) is all about addressing risk in the financial services sector – the important tasks of identifying risk, addressing risk, avoiding risk, developing protective risk management approaches for underwriters (insurance companies); lenders (banks); investors (asset managers and asset owners).

And in “risk” for all of these entities and their activities there is the looming question of the possible impacts on all kinds of assets in a rapidly-changing global and in regional climate conditions.

The Finance Ministers and Central Bankers of the nations in the G-20 asked the FSB to address this evolving challenge and to review and make recommendations on how the financial sector can take account of climate-related issues. Think: The Federal Reserve and the Securities & Exchange Commission in the U.S.A. — the Bank of England in the U.K.

And the focus is on “risk” for all these entities and their activities.

Therefore, there is the looming questions about possible impacts of a changing climate on both corporate and fiduciary assets.

The FSB leaders convened a “Task Force on Climate-Related Financial Disclosures — the FSB TCFD*.

The task force is headed by Chair Michael Bloomberg (he’s former mayor of New York City, principal of Bloomberg LP, UN Envoy to Cities, chair of the SASB, etc.).  Mr. Bloomberg leads the 32-member task force; the work began in December 2015.

There were numerous invitations to stakeholders to submit suggestions (such as the American Bar Association); public meetings were held; industry input was solicited — and at year-end 2016 the recommendations were being drafted for public release in late-June 2017.

Quick Review
The primary aims of the task force work were:

  • To develop climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions;
  • This, in turn, would enable stakeholders to understand the carbon-related assets in the financial sector and the financial system’s exposure to climate-related risks.

The recent release of the task force’s draft report is an important heads up to boards and managers in many sectors — the carbon-related risk / the climate change risk is likely to be a very important consideration for the financial sector players going forward, in the ways they do business with your company.

It is important to note that the FSB task force focused on the financial impact of climate change on a corporation, especially in the financial services sector — not the impact of the corporation on the environment.

These are the four top-line thematic areas for corporate disclosure on climate change matters across sectors and industries; these are to be disclosed in either the regular public filings or in supplemental reports on a voluntary basis (so far):

Corporate Governance Factors
The organization’s governance structure around climate change risk and opportunities (in the USA, the SEC has reminded public company boards of directors of their responsibility to oversee this more than six years ago).

Strategies / Strategy Setting
The current and potential impacts of climate risks on the company’s strategies, and, operations, business, and financial planning.

Risk Management
The company should identify, assess and manage climate-change risks and disclose the processes used to do this.

Metrics / Targets To Be Set
Determining the appropriate metrics used and targets set by the organization to assess and manage climate-related risks and opportunities? These should be explained to stakeholders.

Think about the approach of the FSB TCFD guidelines and the impact on your organization in this way:

  • There are transition risks for a company which will include: policy, legal; technology; markets; corporate reputation issues.
  • Transition opportunities for companies will include: enhancements in resource efficiency; varied energy/sources; innovative products & services; corporate resilience.
  • All of the above could and do have an impact on the company’s financials — its revenues and expenditures.
  • The impacts should be reflected in key corporate disclosures: the 10K, the proxy statement, the income statements; cash flow statements; balance sheets.
  • Which then impacts: corporate assets and liabilities; capital and financing.
  • And all of this is the province of the board of directors and the C-Suite of the public company. The responsibility is clearly at the top of the organization in the Task Force work.

Ask yourself as you evaluate these developments:  What business is your company in?  How resilient to climate-related risk is your company? Are you taking advantage of climate change opportunities?

There is [Task Force] Guidance for Financial and Non-Financial companies in certain sectors. 

  1. For the Financial Sector: Banks:  Insurance Companies; Asset Managers; Asset Owners.
  2. For Non-Financial Industry Categories: [Initially] Energy; Transport; Materials & Buildings; Forest Products.  These industries are identified as accounting for the largest proportion of GHG emissions, energy usage, and water usage.

The task force suggests that companies in these sectors with more than US$1 billion in annual revenues should consider disclosing strategy and metrics and targets information in other reports when the information is not considered to be material and therefore included in the required financial filings.

It is expected that the adoption/uptake of the FSB task force recommendations by companies in the financial sector and in targeted industries will evolve over time, as companies disclose important information and [especially] as financial sector firms utilize the information in some way.

The task force adopted a five-year time frame for development of quality and consistency of reporting as suggested by the recommendations.

The ultimate goal: Broad understanding of the concentration of carbon-related assets in the financial system and the financial system’s exposure to climate-related risks (such as in the industries in focus).

The task force will be monitoring implementation of the recommendations beginning later in 2017 and into 2018 and will engage with stakeholders going forward.

Corporate Community Reaction

How did the corporate community react to these recommendations?
The FSB says more 100 companies with combined market caps of US$3.3 trillion and financial community firms with more than $24 trillion in AUM provided statements of support, encouraging the embrace of the TFCD recommendations.

The FSB task force recommendations closely align with other public disclosure standards and frameworks. Adoption would move a company in the direction of an integrated reporting structure.

The SASB recommendations for sustainability disclosure such as in the 10-k is closely aligned with material information (and materiality is addressed by the task force).

It’s important to keep in mind: The GRI Standards, taking effect in January 2018, replaces the current G4 framework for all corporate reporting; the GRI Standards will definitely move companies in the direction of reporting against the FSB TFCD recommendations.

If you have questions about the task force recommendations and the impact on your company, or the opportunities presented for enhanced disclosure for investors and stakeholders, the G&A Institute team is available for a conversation.

We are monitoring the uptake of the important climate change disclosure recommendations by U.S. and global companies going forward.

RESOURCES:

# # #

Notes:

The TCFD:
* The Task Force Vice Chairs include Graeme Pitkethly, CFO Unilever; Denise Pavarina, Managing Officer Banco Bradesco; Christian Thimann, Group Head, Strategy, Sustainability and Public Affairs, AXA; and Yeo Lian Sim, Special Advisor, Singapore Stock Exchange.

Task Force Members include leaders at KPMG; BlackRock; Generation Investment Management; JP MorganChase; UBS Asset Management; Moody’s; Tata Group; Ernst & Young; Barclays; Bank of China; Deloitte; PGGM; Swiss Re; BHP Billiton; HSBC; Storebrand; Aviva Investors; ENI; S&P Global Ratings; Tokio Marine Holdings; Canada Pension Plan Investment Board; Daimler; Air Liquide Group; Dow Chemical; EnBW; PGGM. 

Keep in mind these important organizations are members of the Financial Stability Board:

  • USA:  U.S. Department of the Treasury; US Securities & Exchange Commission; Board of Governors of the Federal Reserve System
  • Canada:  Bank of Canada; Office of Superintendent of Financial Institutions; Department of Finance
  • China:  People’s Bank of Chain; China Banking and Insurance Regulatory Commission; Ministry of Finance
  • United Kingdom: Bank of England; Financial Conduct Authority; HM Treasury
  • Germany:  Deutsche Bundesbank; BAFIN; Bundesministerium der Finanzen 

The complete list is here: https://www.fsb.org/about/fsb-members/

The G-20

** The Group of Twenty (“G20”) nations comprise an international forum for discussing economic, financial and related issues. The Group of 20 account for more than 80% of the world Gross Domestic Product and almost the same amount of world population.

The first meeting of the Group was in Berlin in late-1999; there have been almost two dozen meetings since then; attendees include heads of state. (The initial participants were finance ministers and central bank leaders — the same players who asked for the Task Force to go to work on expanding corporate disclosure on climate change issues.) 

The G-20 nations are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of South Korea, Mexico, Russia, Saudia Arabia, the Republic of South Africa, Turkey, United Kingdom, United States of America – plus the European Union; plus the European Central Bank; plus The Netherlands and Spain, “non-members” that attends leader summits.

Also participating and invited to conferences: Chair, ASEAN Association of Southeast Asian Nations; African Union; New Partnership for Africa’s Development (NEPAD); World Health Organization (WHO); International Monetary Fund (IMF); United Nations; World Bank; International Labour Organization (ILO); Organization for Economic Cooperation and Development (OECD); World Trade Organization (WTO); Chile, representing the APEC nations; Asian Development Bank (ADB).  The invite list can vary. 

The G7 is a smaller group: Canada, France, Germany, Italy, Japan, United Kingdom, United States of America.

This was originally the G8; Russia was added (the eighth state) was suspended after the annexation of Crimea in 2014. The G7 governments’ focus is on issues in the more developed industrial economies.

NASDAQ Exchange Publishes the “ESG Reporting Guide” for Corporate Managements and Boards

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

There is encouraging news for sustainability professionals coming from the world of stock exchanges this month.  The NASDAQ Exchange just published its guide for listed companies – as well for privately-owned firms as perhaps future IPOs for NASDAQ listing – for companies’ public ESG reporting. 

This is the ESG Reporting Guide – A Voluntary Support Program for Companies”.

The pilot program for the guide effort got underway with NASDAQ’s Nordic and Baltic markets in 2017; the May 2019 guide includes third party reporting methodologies for company leaders’ education. 

The recommendations are “completely voluntary” for companies, the exchange emphasizes. Evan Harvey is the Global Head of Sustainability for NASDAQ and key player in development of the guide.

As the corporate ESG reporting pace continues to increase in both volume and velocity, company boards and managements do need more guidance on evolving ESG / sustainability standards and frameworks that could be used [for their increased disclosure and structured reports such as those published annually or periodically for their investors]. 

These frameworks, NASDAQ explains, include the Global Reporting Initiative Standards, (GRI); the standards of the Sustainable Accounting Standards Board (SASB) for 79 industries; the TCFD recommendations (the work of the FSB’s Task Force on Climate-Related for Financial Disclosures); and (as example) the guidance and frameworks for industry reporting such as GRESB for the real estate industry. Note: G&A Institute is the Data Partner for the GRI in the U.S.A., U.K. and Republic of Ireland.

The NASDAQ guide developed along the lines of such ESG / sustainability reporting “being voluntary” by private sector companies underscores that we are yet not quite at the “order to publish” from the United States stock exchanges.

Halfway ‘round the world, the Hong Kong and Singapore stock exchanges set the pace with such listed company rules.  In Hong Kong, listed companies must “comply or explain” for their ESG reporting; in Singapore, the rule is to publish the annual corporate sustainability report after 1/1/17 – also on comply or explain basis.

And in Europe, companies larger than certain market caps and employee counts must report on their CR activities; (“The European Directive of Non-Financial and Diversity Information by Certain Large Companies”, part of the EU’s Initiative of CSR.)

Getting to a “listed rule requirement” that exchange-listed companies must publish an annual or more frequent corporate sustainability report is a heavy lift in the U.S. capital markets, which typically reflect the direction of the political winds in Washington D.C. and the opinions within the corporate community. (Such as: this type of reporting means more work and expense.)

Right now, the chair of the SEC – the regulator of both the stock exchanges and publicly-traded companies – is a Republican and two other members of the five-member Commission are “Rs”.  Their party’s leader in the White House is busily dismantling environmental protection and other rules and pulling the U.S. out of the historic Paris Agreement on climate change.

Background:  The regulatory activities of the stock exchanges based in the United States are governed by statutes passed by the U.S. Congress (such as the Securities Act of 1933 and Exchange Act of 1934) and the stock exchanges therefore by federal law are designated as non-governmental “self-regulating organizations” or SROs. 

As SROs, the New York Stock Exchange and NASDAQ Exchange have certain authority to establish rules and regulations and set standards for companies (“issuers”) whose stock is listed for trading on their exchange.  Of course, the views of the listed company leaders and other stakeholders are considered when rules are being developed.

Proposed listing company or brokerage (“member”) rules are filed with the Securities & Exchange Commission (created by that 1934 law) to oversee and regulate certain activities. And so, the proposed rules for listed companies, brokerage firms and other entities are filed with SEC and public comment invited before SEC approval and then the exchange’s official adoption of the Rule.  

A recent NASDAQ SEC filing example is: “Notice of Filing of Proposed Rule to Adopt Additional Requirements for Listings in Connection with an Offering Under Regulation A of the Securities Act” in April 2019.

Should the U.S. exchanges adopt rules requiring corporate ESG reporting?  Could they?  Will they? Will SEC review and approve such rules for exchange-listed firms?  These are important questions for our times.  Of course, many people are “Staying Tuned!”

An important P.S.: The 1934 Act also ordered publicly traded companies to file annual and other periodic reports.  In the 1970s, the NYSE listing rules required listed companies to begin publishing quarterly reports; some of the listed companies reacted with great alarm. 

But shortly afterward the SEC made this a requirement for all listed companies. And so the familiar 10-K, 10-Q etc.  This extends to non-US companies raising capital in the U.S. such as listing their securities on an American exchange.

Note from Hank Boerner: This writer once served as the NYSE’s head of communications and as the Exchange’s advisor to listed company investor relations, corporate secretaries and corporate communicators on things like timely disclosure and related topics.

Our announcement of [new] listed company rules calling for quarterly corporate reporting and other reforms was quickly greeted by many more jeers than welcoming cheers! But today, quarterly reporting is a settled matter. One day, we may see the same for corporate sustainability reporting.

Click here to find out more about Hong Kong and Singapore exchange rules.

NASDAQ, NYSE, Hong Kong, Singapore – all are participating in the World Federation of Stock Exchanges (WFE) Principles to exert leadership in promoting a sustainable finance agenda. Those principles are explained in the report here.

This Week’s Top Stories

Nasdaq Launches Global Environmental, Social And Governance (ESG) Reporting Guide For Companies
(Thursday – May 23, 2019) Source: NASDAQ – Nasdaq (Nasdaq: NDAQ) has announced the launch of its new global environmental, social and governance (ESG) reporting guide to support public and private companies. The 2019 ESG Reporting Guide includes the latest… 

More information is available at: https://business.nasdaq.com/esg-guide

A Deeper Shade of Green: The Social Layer of Green FSAs

By Ruth Rennie

Developing Green Firm Specific Advantages (GFSAs) allows firms to build business capacities and assets that enhance both economic and environmental performance.

However developing GFSAs focused solely on environmental management capacity will be inadequate to deliver sustainability and long term financial performance.

An additional set of GFSAs that build capacity to manage the social dimension of the people, planet, profit equation are required. These relate to the internalisation of the social contract, operational approaches that develop social equity, and communications approaches focused on inclusive constituency building.

Introduction

Sustainability frameworks build on the fundamental concept of the “triple bottom line” (TBL) balancing the needs of profit, planet and people. The TBL concept aims to broaden the focus of business performance from profit and loss to tracking and managing a company’s economic (not just financial), social, and environmental impact.

This enables companies to understand the full costs of doing business and calculate real value added.

Today risks associated with climate change, resource scarcity, increasingly stringent government regulation and consumer pressure for transparent and accountable business practice have shifted the focus of sustainability from a simple demonstration of corporate social responsibility to a core driver of commercial viability. Yet business leaders still seldom pay the same attention to people and planet targets as they do to achieving profitability (source: Elkington 2018).

The definition of “green” firm specific advantages (FSAs) first developed in the 1990s acknowledges that firms are likely to invest in better environmental performance only if they will also lead to higher economic returns.

Green FSAs (GFSAs) are business capacities and assets that allow firms to enhance both economic and environmental performance by enabling them to respond to and leverage evolving environmental challenges to achieve sustainable growth and competitive advantage. Developing GFSAs has a range of benefits for firms including cost and operational efficiencies, improved innovation and technological capabilities, enhanced product differentiation and market opportunities, and reputational enhancement (Singh et al 2014).

However, the definition of “green” FSAs related only to environmental management capabilities, creates an unbalanced framework that ignores critical capacities and assets that firms need to manage the social dimensions of sustainability that are increasingly critical to ensure both environmental and financial performance.

The need for wider set of Green FSAs

Though much of the sustainability industry of consultants and framework developers continue to equate “sustainability” and “green” approaches with environmentally-friendly and carbon neutral, the new generation of “green” frameworks explicitly link these issues with social equity and inclusion.

The United Nations calls for “Green Economies” which are “low carbon, resource efficient and socially inclusive” (UN Environment). The current “Green New Deal” policy resolution in the USA emphasises the role of environmental crises and economic transformation in exacerbating “systemic injustices” by disproportionately affecting already disadvantaged “frontline and vulnerable communities.” (Green New Deal Policy Resolution, 2019).

There is ample evidence that businesses are increasingly confronted with risks related to social equity and inclusion that threaten both their commercial and sustainability performance. In a recent survey 80 percent of businesses said they expected their company to be affected by changes to “the social contract” (defined as the general agreement on the rights and responsibilities of members of society[1]) over the next 10 years.

These include workforce risks related to payment of a living wage, technology replacing jobs, and erosion of worker benefits through efficiency measures such as outsourcing.

They also include risks from tensions arising from increasing social inequalities, and rising expectations of the role of business in solving social issues, creating a situation where “Social license to operate is at a higher standard than regulatory license to operate” (BRS 2017).

It is therefore not surprising that companies are now giving the highest priority in their sustainability efforts to social issues related to ethics, diversity, human rights and women’s empowerment, alongside climate change. (BSR 2018)

These trends highlight the limitations of cultivating GFSAs that address only a firm’s environmental management capacity to deliver long-term business sustainability or financial performance. Firms also need to develop “new green” FSAs to strengthen their ability to engage a wide range of stakeholders around a mutually beneficial social contract.

As with the GFSAs defined by Singh et al, the social set of GFSAs also need to be embedded into the firm’s planning and organisational practices, operational practices and communications. This effectively creates an additional layer of GFSAs related to “social management” (for want of a better term) as shown in the diagram below. These relate to the internalisation of the social contract, operational approaches that develop social equity, and communications approaches focused on inclusive constituency building.

[1] The full definition of “social contract” used in the survey was «the unwritten and tacit agreement that exists among members of society (individuals and organizations) that guides behavior and establishes rights and responsibilities of members of society.” (BSR 2017)

Fig 1: Green FSAs : Environmental and Social Management Dimensions

Social Contract Internalization Green FSAs

In the broadest terms Social Contract Internalization GFSAs relate to a firm’s capabilities to incorporate relevant social trends and expectations into strategic planning and develop strategies to mitigate risks related to the impact of their business operations, products and services on different social groups and wider patterns of inequality. Developing this perspective allows firms to internalise the social costs of products, technologies and business practices, and balance environmental management and operational efficiencies with social equity considerations.

Social contract internalisation GFSAs therefore enable firms to develop socially sustainable workforce capacity and supply chain relationships. This includes adopting approaches to measure, report on and address the gender pay gap by which men are still paid more than women for equal work in nearly every country in the world (Rubery, 2019).

It also includes adopting proactive strategies to manage the full range of costs to workers, supply chain actors and communities associated with practices such as the dematerialization of products, sourcing of eco-friendly inputs, achieving resource efficiencies, outsourcing and technological innovation.

For example by assessing the social impact of a shift from producing or using non-renewable to renewable resources such as biofuels on producer communities smallholder agriculture, livelihoods and food security (UNRISD 2012). It also includes developing human resource management strategies that ensure workplace health and safety and freedom from discrimination and harassment, and proactive strategies to address inequalities in access to employment or livelihood opportunities.

Beyond this, firms can develop the capacity for product innovation and expansion to new market segments to address inequalities in access to sustainable products and services between different social groups.


Social Contract Internalization Green FSAs Example – Green Jobs

The International Labour Organisation (ILO)  defines “Green Jobs” as those that both provide employment in the production of green products and services or in environmentally friendly processes AND meet the criteria of decent work by ensuring productive work, a fair income, security and rights at work, social protection, social dialogue and gender equality (ILO 1 & 2).

Yet the social dimension is still often absent from “green” jobs.

A recent study of around 300,000 organisations in Portugal found that the green job sector employs workers with lower qualifications and has poorer provision and lower coverage of Occupational Health and Safety Services resulting in a higher incidence and severity of accidents at work (Moreira et.al, 2018).

Internalization of Social Contract Green FSAs would therefore help firms to mitigate risks and reduce costs of workplace accidents, and demonstrate commitment to reducing the vulnerabilities of low income workers.


Social Equity Development Green FSAs

Social equity development GFSAs recognize that the unequal distribution of risks and rewards within commercial value chains ultimately pose a threat to the long-term sustainability and financial viability of current business models. This is most apparent in the global commodity supply chains where price fluctuations and buying practices such as spot trading create high risk for producers and suppliers that threaten the whole supply chain.

Social equity development green FSAs enable firms to develop business practices and operational processes to share risk and balance the social equity of key actors in the supply chain such as developing long term supplier agreements and investing in producer capacity.

Building social equity in supply chains enables firms to ensure business continuity and implement effective environmental management with producers as long term partners. It also enables firms to develop speciality products based on quality, transparency and local knowledge, enhance brand value develop product portfolios, and satisfy growing consumer demand for authenticity and transparency (Brown 2018, Samper 2018).


Social Equity Development Green FSAs Example – Mars Sustainable in a Generation Plan drive a new approach to commodity sourcing.

Alongside actions to address GHG emissions, water stress, land use, and deforestation the Sustainable in a Generation Plan commits to meaningfully improve the working lives of one million people in its value chain to enable them to thrive.

To do this the company has adopted a new approach to commodity sourcing from known origins and in many cases known farms, with price and sustainability impacts evaluated side by side and generally from longer term partnership arrangements with fewer suppliers.”

In addition Mars is focusing on increasing income, respecting human rights and unlocking opportunities for women. The focus on cultivating long term buyer relationships and investing in the productivity and livelihoods of smallholder suppliers allows Mars to mitigate the risks that poverty discourages the next generation of farmers from participation in essential commodity supply chains. (Sustainable Brands 2018)


Inclusive Constituency Building Green FSAs

The concept of inclusive constituency building goes beyond reputation management, operational partnership development and targeted engagement with local stakeholders already identified in the GFSA framework. Rather it recognises the increasing consumer demand for businesses to demonstrate strong social purpose and to participate in a company’s broader vision. (Brown 2018, BBMG 2017).

A recent global survey shows at least half of consumers believe brands can do more to solve social ills than government and that it is easier for people to get brands to address social problems than to get government to take action. Moreover 57% report buying or boycotting brands based on the brand’s position on a social or political issue (Edelman 2018).

Inclusive constituency-building GFSAs enable firms to develop purpose driven narratives to engage consumers, investors, supply chain actors, local communities and wider stakeholders such as governments, regulators and NGOs in an ongoing relationship based on transparent communication and accountability to build a broad coalition of support for their activities products and services.

This allows firms to develop stronger brand value and engage proactively with employees, customers and peers as brand ambassadors. It also increases firms’ ability for early sensing of societal concerns and foster an organisation-wide culture of listening and engaging with stakeholders that creates goodwill, can transform conflict into productive collaborations and garners “benefit of the doubt” support in regulatory compliance and public approvals processes.

Inclusive constituency building GFSAs also build firms capacity to engage in constructive dialogue to drive product innovation, enhance creativity and strengthen employee motivation through the inclusion of wider perspectives (Sharma and Vrendenberg 1998).


Inclusive Constituency Building Green FSAs Example – Amazon

Amazon is one of the most financially successful companies in the world, and has made environmental sustainability commitments to increase its use of renewable energy and make all amazon shipments net zero carbon, with a target of 50% by 2030. Yet the company’s financial and environmental management strategies are undermined by its failure to develop an inclusive constituency for its brand.

Amazon recently pulled out of a deal to set up a new headquarters in New York City, fearing damage to its reputation from a barrage of objections from politicians, unions, public housing residents, local community leaders and government institutions.

These objections echoed Amazon’s failure to address poor labor practices and anti-unionisation policies, or to contribute to alleviating social inequality issues to which it contributes, by threatening to halt growth in its home city of Seattle if the city approved a tax on large employers to fund homeless services and low-income housing (Sainato, 2018).

The failure of the deal has been attributed to Amazon’s failure to develop a robust strategy to build support amongst key stakeholders groups and miscalculation on how much it needed to engage with those audiences to make the development of the New York HQs a success (Goodman and Weise, 2019).


Conclusion

To adequately ensure sustainability including environmental management and financial performance, Firms need to develop an additional set of Green FSAs focused on the social dimension of the people, planet profit equation.

Social contract internalisation GFSAs that incorporate a social equity and inclusion perspective into strategic planning enable firms to develop socially sustainable workforce capacity and supply chain relationships and strengthen capacity for product innovation and market positioning.

Social equity development GFSAs that build capacity to rebalance risk and build inclusiveness in supply chains enable firms to ensure business continuity and implement effective environmental management strategies based on long term partnerships and to develop product differentiation.

Inclusive constituency building GFSAs that build capacity to engage stakeholders in a broad coalition of support for a firm’s activities products and services allow firms to develop stronger brand value, sense and respond to societal concerns and drive product innovation, creativity and employee motivation through constructive engagement with wider stakeholder perspectives.

REFERENCES

BBMG Globescan (2017), Brand Purpose in Divided Times, Four strategies for Brand leadership. http://bbmg.com/wp-content/uploads/2017/10/BBMG_GlobeScan_BrandPurposeReport_2017.pdf

Britton-Purdy, Jedediah (2019) “The Green New Deal Is What Realistic Environmental Policy Looks Like”, The New York Times Feb. 14, 2019, https://www.nytimes.com/2019/02/14/opinion/green-new-deal-ocasio-cortez-.html

Brown, Nick (2018), “A Radical New Social Contract Concept from James Hoffmann”, Daily Coffee News, October 15, 2018, https://dailycoffeenews.com/2018/10/15/a-radical-new-social-contract-concept-from-james-hoffmann/

BSR, Globescan (2017), The State of Sustainable Business 2017, Results of the 9th Annual Survey of Sustainable, Business Leaders, July 2017, https://www.bsr.org/reports/2017_BSR_Sustainable-Business-Survey.pdf

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Elkington, John (2018), “25 Years Ago I Coined the Phrase “Triple Bottom Line.” Here’s Why It’s Time to Rethink It”, Harvard Business Review, June 25, 2018. https://hbr.org/2018/06/25-years-ago-i-coined-the-phrase-triple-bottom-line-heres-why-im-giving-up-on-it

Goodman, J. David and Weise, Karen, (2019) “Why the Amazon Deal Collapsed: A Tech Giant Stumbles in N.Y.’s Raucous Political Arena”, The New York Times, Feb. 15, 2019, https://www.nytimes.com/2019/02/15/nyregion/amazon-hq2-nyc.html

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ILO 2 – Decent Work, https://www.ilo.org/global/topics/decent-work/lang–en/index.htm

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Sainato, Michael (2018) Exploited Amazon workers need a union. When will they get one?, The Guardian, Sun 8 Jul 2018, https://www.theguardian.com/commentisfree/2018/jul/08/amazon-jeff-bezos-unionize-working-conditions

Samper, Luis F. (2018), “A New World Coffee Order” Daily Coffee News, October 17, 2018, https://dailycoffeenews.com/2018/10/17/a-new-world-coffee-order/

Sharma, Sanjay and Vredenburg, Harrie (1998), “Proactive Corporate Environmental Strategy and the Development of Competitively Valuable Organizational Capabilities” Strategic Management Journal, 19: 729–753 (1998) http://www.jstor.org/pss/3094125

Singh Nitish, Yung‐Hwal Park, Carri R. Tolmie, Boris Bartikowski (2014), “Green Firm‐Specific Advantages for Enhancing Environmental and Economic Performance”, Global Business and Organizational Excellence, November/December 2014 pp6-17 https://doi.org/10.1002/joe.21580

Sustainable Brands (2018), Screw Incremental Improvements: Mars Is Changing How It Does Business, September 19, 2018, https://sustainablebrands.com/read/walking-the-talk-1/screw-incremental-improvements-mars-is-changing-how-it-does-business / See also – Henderson, James (2017) Mars CEO Grant F. Reid has said business needs to lead “transformational change” in order to tackle the most urgent threats facing the planet and its people, including a radical overhaul of supply chains”. Sep 08, 2017, https://www.supplychaindigital.com/scm/mars-ceo-transformational-business-change-needed-including-radical-rethink-supply-chains

UN Environment “About the Green Economy”? https://www.unenvironment.org/explore-topics/green-economy/about-green-economy https://www.unenvironment.org/regions/asia-and-pacific/regional-initiatives/supporting-resource-efficiency/green-economy

UNRISD (2012), Social Dimensions of Green Economy Research and Policy Brief 12, May 2012, https://www.files.ethz.ch/isn/143941/RPB%2012e.pdf

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A message from G&A Institute

This is the “final paper” authored by Ruth Rennie as she completed the on-line, self-study “Certification in Corporate Responsibility and Sustainability Strategies” hosted by Governance & Accountability Institute and developed by Professor Nitish Singh, Ph.D., Associate Professor of International Business at the Boeing Institute of International Business at Saint Louis University, and founder and consultant at IntegTree LLC; and, Instructor Brendan M. Keating, Adjunct Professor at Wilmington University and VP of IntegTree.

The professionals completing the course work receive certificates from the Swain Center for Executive & Professional Education at the University of North Carolina Wilmington and from G&A Institute.

The certification program provides a broad overview of key corporate responsibility challenges and strategies that will enable organizations to succeed in the 21st Century Green Economy.

Ruth Rennie is a Sustainability and Social Impact Consultant educated at Trinity College, Dublin, Ireland (M.Phil. – Master of Philosophy, History; at Universite Paris 7 (Paris, France), Diplome d’Etudes Approfondies (DEA); and, Victoria University, New Zealand, Dip TESL (Diploma in Teaching English as a Second Language). Profile: https://www.linkedin.com/in/ruth-rennie/

Ruth’s email: rennie.ruth@gmail.com

More information on the CSR course is available at:

http://learning.ga-institute.com/courses/course-v1:GovernanceandAccountabilityInstitute+CCRSS+2016/about