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.

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

BSR, Globescan (2018), The State of Sustainable Business 2018, Results of the 10th Annual Survey of Sustainable, Business Leaders, 2018, https://www.bsr.org/files/event-resources/BSR_Globescan_State_of_Sustainable_Business_2018.pdf

Edelman (2017, 2018), Beyond No Brand’s Land, Edelman Earned Brand Study, https://www.edelman.com/earned-brand, / https://www.edelman.com/research/earned-brand-2017

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

Green New Deal Policy Resolution, G:\M\16\OCASNY\OCASNY_004.XML February 5, 2019 (3:27 p.m.) https://assets.documentcloud.org/documents/5729033/Green-New-Deal-FINAL.pdf

ILO 1 – What are Green Jobs? https://www.ilo.org/global/topics/green-jobs/news/WCMS_220248/lang–en/index.htm

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

Kantor, Jodi and Streitfeld, David (2015), Inside Amazon: Wrestling Big Ideas in a Bruising Workplace, The New York Times, Aug. 15, 2015, https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html

Moreira, Sandra, Vasconcelos, Lia, Silva Santos, Carlos, (2018)“Occupational health indicators: Exploring the social and decent work dimensions of green jobs in Portugal” Work, vol. 61, no. 2, 2018 pp. 189-209, https://content.iospress.com/articles/work/wor182792

Rubery, Jill BBC (2019), “Is equal pay actually possible?, BBC News 22 February 2019 https://www.bbc.com/news/business-47212342

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