The UN Sustainable Development Goals -– “What Matters” For 40 Sectors? G&A Institute’s Research Project Yields Key Data

by Hank BoernerG&A Institute Chair & Chief Strategist

  • An examination of materiality decisions made by 1,387 corporations in their sustainability / ESG reports on all 91 GRI G4 Specific Standard Disclosures, linked SDG Targets, and GRI Standards Disclosures 
  • Forty individual sector reports including the “Top GRI Indicators / Disclosures” and “Top SDG Targets” rankings for each sector are available for download at https://www.ga-institute.com/SDGsWhatMatters2018

Nearing the end of the 20th Century, the United Nations assembled experts to develop the eight Millennium Goals (the MDGs), to serve as blueprints and guides for public, private and social sector actions during the period 2000-2015 (the “new millennium”).

For “post-2015”, the more ambitious Sustainable Development Goals (the now familiar SDGs) were launched with 17 goals and 169 targets.

These are calls to action for rich and poor and middle-income nations from 2015 out to the year 2030.  These ambitious efforts are focused on such societal issues as improving education and health; social protection; providing job opportunities; and encouraging greater environmental protection (global climate change clearly in focus!).

The 17 SDGs are numbered for themes – “No Poverty” is Goal #1; “Clean Water and Sanitation” is Goal #6; Gender Equality is Goal #5.

As the goals were announced after an exhaustive development process (ending in 2015), sovereign nations, regions, communities, corporations, academic institutions, and other societal stakeholders began “adopting” and embracing the goals, and developing action plans and programs related to the goals.

Numerous companies found (and are finding today) that the goals aligned with the long-term corporate strategies (and vice versa).

SDG strategies were and are being amended to align the goals with critical corporate strategies; actions and programs were formulated; partnerships were sought (corporate with government and/or social sector partners and so on).  And the disclosures about all of this began to appear in corporate and institutional GRI sustainability reports.

In the months following official launch, a wave of corporations began a more public discussion of the SDGs and their adoption of specific goals – those that were material in some way to the company’s strategies, operations, culture, stakeholders, geography…and other factors and characteristics.

As the SDGs were “adopted” and embraced, companies began quickly to examine the materiality of the SDGs relative to their businesses and the first disclosures were appearing in corporate sustainability reports.

To rank the materiality of the SDGs for 40 different sectors, the G&A Institute analyst team gathered 1,387 corporate GRI G4 Sustainability / ESG reports and examined the disclosure level of each on 91 Topic Specific Standard Disclosures.  The database of the reporters materiality decisions around GRI Indicators were then linked to the 169 SDG targets using the SDG Compass Business Indicators table.

The sectors include Electricity, Beverages, Banks, Life Insurance, Media, and many more classifications (the list is available on the G&A web platform with selections to examine highlights of the research for each sector).

The results:  we now have available for you 40 separate sector report highlights containing rankings of the SDG Targets’ and the GRI G4 Indicators & GRI Standards Disclosures for each sector which can be downloaded here:  https://www.ga-institute.com/SDGsWhatMatters2018

The research results are an excellent starting point for discussion and planning, a foundation for determining sector-specific materiality of the SDGs and the GRI KPIs and disclosures as seen through the lens of these 1,387 corporate reporters across 40 sectors.

This is all part of the G&A Institute’s “Sustainability Big Data” approach to understanding and capturing the value-added corporate data sets for disclosure and reporting.  The complete database of results is maintained by G&A Institute and is used for assisting corporate clients and other stakeholders in understanding relevant materiality trends.
We welcome your questions and feedback on the year-long research effort.

Thanks to our outstanding research team who conducted the intensive research: Team Research Leaders Elizabeth Peterson, Juliet Russell, Alan Stautz and Alvis Yuen.  Researchers Amanda Hoster, Laura Malo, Matthew Novak, Yangshengjing “UB” Qiu, Sara Rosner, Shraddha Sawant, and Qier “Cher” Xue. The project was architected and conducted under the direction of Louis Coppola, Co-Founder of G&A Institute.

There’s more information for you at: https://www.ga-institute.com/SDGsWhatMatters2018

More information on the SDGs is at: https://www.un.org/sustainabledevelopment/

Contact G&A Institute EVP Louis Coppola for information about how G&A can help your company with SDGs alignment at:  lcoppola@ga-institute.com

Corporate America & Climate Change: McDonald’s Sets Pace for Strategies & Action in Global Fast-Food Industry

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

Game changer – early adopter – first mover – tipping point – striving for excellence:  These are some of the familiar themes of their work offered by best-selling business authors. These phrases help to frame our understanding of established or emerging trends.

Peter Economy, the “leadership guy” at Inc. magazine, offers us his take on the McDonald’s food chain announcement that “will change the future of the fast-food industry”.

Leadership:  The company says that 84 percent of its trademark “McCafe Coffee” for the U.S. outlets (and 54% globally) is verified as sustainably sourced.

That means the company is on track to meet its goal of 100% sustainably sourced coffee everywhere by year 2020.

Keep in mind that the familiar golden arches food outlets sell more than 500 million cups of coffee annually.  (The company has 37,000 restaurants in 120 markets, serving 69 million people daily.)

Why take this course of action?  The company says rising temperatures may dramatically affect coffee production and so McD will work with “thousands of franchisees, suppliers and producers” on the future of coffee production — and other societal issues related to climate change.

The “size and scale” of the McD brand operations will help to make a difference in this and other climate change matters, the company thinks.

For example, on beef production – the company sells more than 1 billion pounds of beef annually – McD ranks among the highest of all fast food companies in the Business Benchmark on Farm Animal Welfare…demonstrating concern about animal welfare.

McDonald’s in 2018 works through its “Scale for Good” initiative — which includes addressing such challenges as packaging and waste, restaurant energy usage and sourcing, and beef production.

The company will work to reduce GhG emissions — to prevent 150 million metric tons of GhG emissions from release to the atmosphere by 2030. That plan aims to reduce GhG emissions related to restaurants and offices by 2030 from the 2015 base year by 36%.  There is also the commitment to reduce emissions intensity across the supply chain against 2015 levels.

Note that franchisee operations (stores), suppliers and products account for 64% of McDonald’s global emissions – the company’s effort will be among the most sweeping in its industry to address the entire footprint of operations.

If you are a McDonald’s supplier or business partner – take note!  If you are a competitor – take note!

As part of its sustainability journey, McDonald’s has adopted SDG Goal #7 (Affordable and Clean Energy), Goal 13 (Climate Action) and Goal 17 (Partnerships for the Goals).

Click here for more information.

This Week’s Top Stories

McDonald’s Stunning New Coffee Sustainability Announcement Will Completely Change the Future of Fast Food
(Friday – November 30, 2018) Source: Inc. – Today, fast-food giant McDonald’s made a stunning announcement that will change the future of the fast-food industry. According to this announcement, 84 percent of McDonald’s McCafé coffee for U.S. restaurants (and 54 percent…

Eco-Efficiency Green Firm-Specific Advantages — L’Oréal Case Study

Guest Post by Laura Malo Yague, Sustainability Reports Data Analyst, G&A Institute

Introduction:

The scope of this case study is the analysis of the sustainability strategy of the French company L’Oréal, focused on the actions taken related to the Eco-Efficiency Green Firm – Specific Advantages.

Eco-Efficiency is a type of operational environmental practices that some companies try to develop and incorporate to their production processes and procedures, in order to mitigate their impact for the planet, the climate, natural resources and human life.

Through these practices, the companies aim to get a closed-loop production, by using innovation and sustainable technology for minimizing the resources and raw material consumption and reducing the carbon footprint.

Companies and firms can improve their products’ design and performance by introducing eco-efficiency advantages in their strategy. One perfect example is the current case of L’Oréal with the official release in 2013 of their Program for sustainability of L’Oréal: ‘Sharing Beauty With All .

Product-related environmental management capabilities and environmental design capabilities under eco-efficiency advantages help firms to integrate environmental concern throughout a product’s life cycle and achieve material eco-efficiency, energy efficiency, and operational efficiency . Following these guidelines, L’Oréal presented its program supported in four basic main pillars:
• Innovating Sustainability
• Producing Sustainability
• Living Sustainability
• Developing sustainability

About L’Oréal and the Eco-efficiency Green Firm-Specific-Advantage: ‘Sharing Beauty With All’

L’Oréal released its first sustainability report in 2006 after acquiring The Body Shop company. The company reports under the GRI Standards and also complies with UNGC guidelines.

It wasn’t until 2013 with the founding of its ambitious sustainability program, ‘Sharing Beauty With All’ — spearheaded by CEO Jean-Paul Argon — that sustainability practices within the company became an important part of the yearly agenda. “We have stepped up our metamorphosis to the new L’Oréal: more universal, more digital and more sustainable,” states Argon.

‘Sharing Beauty With All’ is divided into four pillars of sustainability each with its own particular targets aimed to be achieved by 2020.

L’Oréal has undertaken a profound transformation towards an increasingly sustainable model, to respond to its environmental and social impacts, as well as to the main challenges which the world is facing today.

The company’s strong ethical commitment, its ‘Sharing Beauty With All’ sustainability program, its policy of promoting diversity and the corporate philanthropy actions conducted with the support of the L’Oréal Foundation enables the Group to contribute to 14 of the 17 Sustainable Development Goals (SDGs) set by the United Nations.

L’Oréal has also been awarded a ‘A’ by the CDP two years in a row and rated 4.2 in FTSE .

Through its company-wide program L’Oréal has successfully proven that economic performance and sustainability practices are not mutually exclusive. The program aims to show that both practices can go hand in hand.

For example, in 2017, L’Oréal reduced its CO2 emissions by 73% while increasing its production by 33%.

The CEO has placed the Sustainability Department directly under his leadership. Previously, the department was within the communications and PR department. Argon has also set up bonus incentives for the managers. Thus, the managers must hit their sustainability targets in order to receive their bonuses. These two facts clearly show how serious Argon and L’Oréal are about becoming more sustainable.

L’Oréal Sustainability Evolution and Development

In 1909, Eugène Schueller founded L’Oréal when he developed the first commercialized hair dye. Although L’Oréal got its start in hair-color products, the company expanded into other beauty sectors. In 1963 the company became publicly-traded on the stock exchange and by 1980 L’Oréal had become world’s largest beauty company.

Through multiple acquisitions, the company has grown to reach 140 countries, catering to the needs of each specific culture. As one of the leaders in Personal & Household Goods products, the group is making tremendous progress towards reaching their 2020 sustainability targets .

The first step in the Corporate Social Responsibility path was taken in 1989. Cosmetics R&D industry implies the use of new chemical reactions and components which can be harmful for human skin. After years of controversial due to their research practices, L’Oréal completely ceased testing its products on animals 14 years before the regulation required, becoming pioneers supporting animal welfare.

L’Oréal has learned how to adapt to the new context with a strong company policy tackling crucial issues for the current society, by promoting diversity and inclusion. Also, to the new scenario that our planet presents, with the increasing danger of a worsen global warming, the already-known marine plastic invasion, the unstoppable fossil fuel combustion and the fear of a world with limited natural resources.

With its 2013 Sustainability Commitment, L’Oréal wants to achieve important goals by 2020. Among other actions completed, the company has contributed to the mitigation of the environmental impact with the implementation of different Eco-Efficiency Operational Green Firm-Specific Advantages .

For example, by reducing the CO2 emissions of its plants and distribution centers by 73%, in absolute terms, compared to 2005, while increasing its production volume by 33% within the same period. The group reinforced its ability to combine economic growth with ambitious climate commitments.

Moreover, the 76% of products launched during the last 2017 improved its environmental or social profile. Every time a new product is created or renovated, the Group considers its contribution to sustainability as well as its performance and profitability.

The number of people from underprivileged communities who gained access to employment through one of L’Oréal’s programmes at the end of 2017 was 53,505. The company’s goal is to reach 100,000 people by 2020.

Furthermore, the company has already conducted an assessment of the environmental and social impact of more than 91% of their brands.

Finally, other important challenge was the complete elimination of PVC its packaging by 2016.

We can see the L’Oréal trends by the development of Eco-efficiency Green FSAs and practices under two main pillars from the company sustainability strategy: ‘Producing Sustainability’ and ‘Innovating Sustainability’.

As explained, L’Oréal adopted 14 of the 17 Sustainable Development goals — most of them aligned with these two pillars (see exhibit 1); this, reinforcing the Company’s Eco-efficiency strategy focused on the development of more sustainable products by using more sustainable processes.

Some of the negative ESG (Environmental, Social and Governance) hotspots from L’Oréal that they should take in account for improvement are the product packaging, which they state they are already working on, and the issue ofwater consumption.

Most of L’Oréal products contains many different single-use plastic and paper components, with the implications for the environment, from the extraction of natural resources all the way through to the disposal of the product.

Extracting finite natural resources to produce raw material depletes our resources and requires a significant amount of energy.

In addition, plastic and paper manufacturing process releases an immense amount GHG into the atmosphere.

Regarding the water issue, many of their products also involves water intensive processes along its entire life cycle. Therefore, L’Oréal is trying to reduce water consumption by 60% per finished product unit by 2020. Plastic extraction and cellulose treatment for the paper manufacturing, imply water uptake.
Conclusion

Nowadays, L’Oréal is the biggest beauty brand in the world, generating about 27.2 billion dollars in sales in 2017.

The adoption of this sustainability corporate policy by the company could initially imply big efforts for the group, such as, substantial upfront costs or important changes in the supply chain.

However, due to the important role that L’Oréal plays in the cosmetics industry market, the company can also have a positive and remarkable impact by mitigating CO2 emissions, decreasing fossil fuel use or reducing plastic use and pollution.
Any changes towards sustainability or eco-improvements will directly affect the L’Oréal ecological footprint, bringing great benefits for the environment and for all of us. L’Oréal states that

‘The path from fundamental research to the finished product involves an ultimate challenge, packaging innovation. This is what ensures that the product will be delivered in the best conditions of performance, safety and practicality’.

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Author Laura Malo Yague is a full-time candidate in the Master of Science in Sustainability Management at Columbia University. She was graduated with a degree in Industrial Technical Engineering – Industrial Electronics in Spain and has seven years experience in Product and Project Management. She was a valued intern-analyst at G&A Institute in 2017.

From Laura, some additional background: From Spain to New York City — with a professional background of seven years working as an engineer and a great lover of the environment, I arrived in 2016 seeking for a change in my career path. During the last two years I have been training myself in Project Management, focused in monitoring and evaluation, Corporate Responsibility and Sustainability at New York University (NYU).

I collaborated as a volunteer in the NGO ‘Engineering Without Borders’ for eight years participating in sustainability and development projects focused on environmental problems, eco-efficiency climate change and taking responsibility of our planet’s health, trying to do things better.

I love travelling with my ukulele, where I can combine my passions discover new cultures, meet people and enjoy the diversity of our planet. I would like to work in sustainability strategy to improve the accountability of market and industry process and development.

More information is at: https://www.ga-institute.com/about-the-institute/the-honor-roll/laura-malo-yague.html

Note to readers:  This content was prepared for completion of the Certification in Corporate Responsibility & Sustainability Strategies offered by G&A Institute, with dual credentials from the Swain Center for Executive & Professional Education at the University of North Carolina Wilmington Certificate. The course work is prepared by Professor Nitish Singh, Ph.D., founder and consultant at IntegTree LLC, and Associate Professor of International Business at St. Louis University, Boeing Institute of International Business. Information: http://learning.ga-institute.com/courses/course-v1:GovernanceandAccountabilityInstitute+CCRSS+2016/about

The Words From Davos In 2018: Sustainability, Responsibility…And More In This, The Fourth Industrial Revolution

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

The World Economic Forum (WEF) annually convenes business leaders, government officials, celebrities and other luminaries in the Swiss village of Davos-Klosters to explore societal issues and develop or work to advance solutions to same.

This year’s convocation was staged over four days n late-January. Some of the highlights for you:

UN Sustainable Development Goals in Focus
The Government of Denmark and the WEF signed a memorandum of understanding to move ahead with a partnership to improve the state of the world through a public-private cooperation. The agreement provides a model framework that could lead to improvement over the long-term.

And, adoption of the approach by other nations. Consider what this European nation and the WEF have in mind:

  • They will pursue public-private partnership to promote green growth.
  • Develop a technology and innovation partnership.
  • Work together to encourage greater adoption of the SDGs.
  • Support the mobilization of private capital for infrastructure through the WEF-led initiative, the Sustainable Development Investment Partnership.
  • Support trade and investment through the Global Alliance for Trade Facilitation (a multi-stakeholder initiative).
  • Work to implement the WEF’s System Initiative on Education, Gender and Work.
  • Denmark will assign a Ministry of Foreign Affairs senior advisor to the WEF New York City office (a second such WEF appointment for Denmark).

Prime Minister Lars Lokke Rasmussen said: “Denmark has an ambitious agenda to promote public-private partnerships…in terms of sustainable growth, social cohesion and technological skills. We are delighted to team with WEF to create concrete progress on these agendas…to create better lives for more people and sole the urgent climate crisis. We must build bridges across sectors, borders and old divisions…”

Addressing Modern Slavery
Influentials addressed the need for coordinated global action to end modern slavery – that was championed by US Senator Bob Corker (R-Tennessee); Monique Villa, CEO of Thomson Reuters Foundation; and, Gary Haugen, CEO of the International Justice Mission.

Senator Corker drew attention to the new Global Fund to End Modern Slavery (“GFEMS”), a public-private partnership to fund programs in countries where such practices are prevalent.

The initial funding is from the United States and United Kingdom; the goal is to raise US$1.5 billion-plus and develop a global strategy to address modern slavery. (It’s estimated that as many as 40 million people now live in modern slavery conditions. This is said to be a $150 billion global business.)

There are three pillars adopted by GFEMS: (1) leverage the rule of law; (2) “energized” engagement with business sector (3) work to sustain freedom.

Jean Baderschneider is CEO of the new Global Fund. The fund’s work will be modeled on the global effort to fight AIDS, TB and malarial infections, bringing together governments, the private sector and NGOs.

Tech-Reskilling Drive Announced
The Information Technology industry is going to work to target 1 million people to offer resources (such as on-line tools) and training opportunities to “re-skill” adults to help them meet the requirements of the tech industry for employment, as well as continue their education and learn more about today’s technology.

Big names in tech are signed on: Accenture, CA Technologies, Cisco, Cognizant, Hewlett Packard Enterprise, Infosys, Pegasystems, PwC, Salesforce, SAP, and Tata Consultancy Services. The coalition is seeking more members to help develop tools and processes to address the “barriers preventing adults from re-skilling or successfully completing training, initially in the United States. There are plans to scale to other geographies.

The coalition’s “SkillSET” is hosted on the EdCas AI-powered Knowledge Cloud Platform, accessible to all.

ISO 20121:2012 Certification for Davos
The conference was awarded the ISO certification for “sustainable event planning and operation” by DNVGL (a certifying body). ISO 20121 is a framework for identifying and managing key social, economic and environmental impacts of an event.

Sustainability measures implement by the Forum included carbon compensation for all air travel by the staff, media and participants; promotion of “sustainable transport” in Davos (walk don’t ride); energy efficiency; water management; sourcing of renewable energy; reduction of waste and recycling.

Ending With A Call to Action
The 2018 Forum closed with a call to action to “globalize compassion” and “leave no one behind.” This, the 48th WEF Annual Meeting, closed on a creative note with four artists sharing visions of how painting, photography, film and dance can inspire empathy with other people’s stories.

Across all of the 400 sessions, the Davos organizers said, “…one key theme kept emerging, the need to embrace our common humanity in the face of rapid technological changes ushered in by the Fourth Industrial Revolution.”

And so the call for a spirit of inclusion, diversity and respect for human rights…this characterized the 2018 gathering, said Sharon Burrow, one of the seven female co-chairs of the meeting (she is General Secretary of the International Trade Union Confederation).

Important outcomes of the meeting included these developments, on the theme of “mending our fractured world”:

  • Preparing workers for the future.
  • Safeguarding our oceans.
  • Closing the gender gap.
  • Tackling waste and pollution.
  • Unlocking nature’s value.
  • Making meat sustainable.
  • Bridging the digital divide.
  • Fighting financial crime and modern slavery.
  • Taking on fake news.
  • Securing air travel.

And…advancing the Fourth Industrial Revolution, which includes Forum centers at work with social, public and private sector partners in numerous countries.

As Oliver Baitch writing in Ethical Corp observed, having spent four days at the conference:

“First, and foremost, sustainability is here to stay. Long gone are the denials or debates as to whether “non-financial” or “soft” issues are the preserve of global business. Themes such as citizenship-centred science, a post-oil energy matrix and tax transparency have shifted from side-room workshops to the main stage.

“Second, companies are beginning to put their money where their mouths are. Davos 2018 saw a litany of firm, measureable corporate commitments – professional services firm PwC promising to cut its carbon emissions by 40% by 2022 (having cut them by 29% since 2007) through to Coca-Cola pledging to collect and recycle the equivalent of every bottle or can it sells globally by 2030.”

You can read his summary of the 2018 confab at: http://www.ethicalcorp.com/will-sustainability-be-ceos-trays-after-davos

And, of course, there is a significant amount of related information at the WEF web site:  https://www.weforum.org/

Changes Ahead for Corporate Sustainability Reporting

This is a guest post by our colleague-in-sustainability, Jane DeLorenzo.  She recently completed the on-line Certificate in Corporate Responsibility & Sustainability Strategies.  The platform is hosted by G&A Institute and developed in partnership with IntegTree LLC. This is a dual credentials course!  A certificate is issued by Swain Center for Executive & Professional Education at the University of North Carolina-Wilmington and a separate certification is issued by G&A Institute.  This commentary is prepared as part of the completion of the coursework.  We are sharing it today to broaden understanding of the state-of-sustainability reporting – present and future.  Find out more about the dual certificate program here.

By Jane DeLorenzo  October 27, 2017

Now is the time for businesses and other organizations to take a closer look at their sustainability reporting; key considerations are what they report, why, how and which standards to use.

New standards released by the Global Reporting Initiative (GRI) will take effect July 1, 2018 — so the clock is ticking.

As more global companies produce sustainability reports, the process has become more complex. Competing standards and frameworks, increasing pressures from investors and other stakeholders, and the costs and resources involved to develop such reports can be challenging – and baffling to leaders.

While GRI is positioning and advocating to be the de facto global reporting standard, companies can select other frameworks, such as those of the Sustainability Accounting Standards Board (SASB) or the International Integrated Reporting Council (IIRC).

There are important factors to consider. Organizations can opt for an integrated report that includes both financial and sustainability information, or they can issue a sustainability report that is separate from the annual financial report.

Producing no sustainability report is also an option, since all three of these standards are voluntary in the United States and most other countries. Companies should be aware, though, that stakeholders may cry foul if no report is produced.

What’s a company to do?

The Continued Evolution of Reporting

Sustainability reports tell the story of an organization’s impacts on economic, environmental and social issues. Many corporations began to examine their non-financial impacts following the environmental and social movements of the 1970s in Europe and the United States.[i]

Public outcry due to rising awareness of pollution and social inequities pushed companies to try to be more transparent. Shareowners were making the case that non-financial issues can and do impact a firm’s financial performance.

In the U.S., for example, emissions data reporting was spurred by Right-to-Know legislation and rules in 1986 that required accountability from companies that were releasing toxic chemicals into the environment.[ii]

Demand for environmental and social disclosures led to the formation of GRI in 1997 by the Coalition for Environmentally Responsible Economies (now known as CERES) and the nonprofit Tellus Institute, both based in Boston. GRI later partnered with the United Nations Environment Programme (UNEP), which had been promoting voluntary environmental reporting by companies and industry groups.

At a ceremony in 2002 announcing the move of the GRI headquarters from Boston to Amsterdam in the Netherlands, UNEP Executive Director Dr. Klaus Töpfer acknowledged GRI’s mission to develop a framework for voluntary sustainability reporting.

He commented: “An increasing number of stakeholders, including the investment community, share the goal of the GRI to raise the practice of corporate sustainability reporting to the level of rigour, credibility, comparability and verifiability of financial reporting.”[iii]

GRI launched its first sustainability reporting framework in the year 2000 and subsequently developed four versions of its guidelines (G1 through G4). Keeping current was a long-term challenge for companies reporting their corporate social responsibility (CSR) efforts. Over time it became clear that a simplified, easier-to-update standard was needed. The new GRI Standards are meant to streamline and simplify the process.

As GRI marks its 20th year, the organization is attempting to “tackle the confusion among companies about the proliferation of different reporting frameworks,” according to GRI Chief Executive Tim Mohin.[iv]

While some media reports claim GRI and SASB are competing frameworks, a 2017 article in GreenBiz, co-authored by Mohin and SASB Founder/CEO Jean Rogers, intended to dispel this perception.[v] The article states: “Rather than being in competition, GRI and SASB are designed to fulfill different purposes for different audiences. For companies, it’s about choosing the right tool for the job.”

Best Practices

Using the right tool, or standard, is the key to companies producing a successful report for their target audience.

While GRI is the widely-accepted framework for reporting sustainability initiatives to a broad audience, SASB focuses on reporting to the investor audience. This audience is interested in the link between sustainability and financial performance. Both GRI and SASB agree on a common goal: to improve corporate performance on sustainability issues.

Other organizations with similar goals include a list of initials and acronyms:  IIRC, CDP, ISO, OEDC, SDG and more. These are:

  1. IIRC (International Integrated Reporting Council) promotes integrated reporting to provide “investors with the information they need to make more effective capital allocation decisions,” according to its website.[vi]
  2. CDP (formerly known as Carbon Disclosure Project) partners with organizations to measure their carbon footprint. Many companies use CDP alongside other reporting frameworks.
  3. ISO, the International Organization for Standardization developed ISO 26000 to help organizations improve their social responsibility efforts.
  4. OECD is the Organization for Economic Cooperation and Development. Its industrial economy member countries negotiate guidelines surrounding social responsibility.
  5. SDG stands for the United Nations “Sustainable Development Goals.” UN member states adopted the 17 SDGs with 169 targets that seek to protect the planet, end poverty, fight inequality and address other social injustices.

While CSR reporting has been widely voluntary, mandatory reporting is taking effect in some countries. In the European Union, large companies (more than 500 employees and certain assets and revenues) now face mandatory disclosure of environmental and social impacts beginning with their 2018 annual reports.[vii]

The EU published its own guidelines in 2017, but it allows companies to choose among the various standards. Laws requiring CSR reporting are also in effect in South Africa, China and Malaysia. Meanwhile, a growing number of stock exchanges around the world are issuing sustainability reporting guidance and requirements.

Companies that are just beginning the process to report on their sustainability impacts should find the new GRI Standards relatively simple to use. The Standards are free to download from the GRI website (www.globalreporting.org) by registering a company name and email address. Organizations can use all or some of the Standards, but they must notify GRI of their intended use.

The new Standards are made up of three modules (or manuals): (1) the Foundation, which describes the basic reporting principles; (2) General Disclosures, which outline required contextual information about an organization and how it operates; and (3) Management Approach, which requires organizations to state how they approach their selected sustainability topics or issues.

While the content and requirements are basically unchanged from the currently-used GRI G4, the Management Approach now takes center stage. A reporting company must provide information on how it “identifies, analyzes and responds to its actual and potential impacts.”[viii]

Once a company determines its approach to a key topic, this management approach might stay the same from year to year. Also, one management approach may apply to several key topics, which should make reporting more concise. The Standards include three additional modules that are organized according to topic categories: economic, social and environment.

Focusing on material (or key) topics, rather than a long list of topics, should also make the reporting process more concise as well as more meaningful to stakeholders. In other words, less is more. The new Standards direct companies to identify their key topics and then report on at least one of the topic-specific GRI disclosures.

For example, Company XYZ determines from stakeholder feedback that the topic of waste will be included in its sustainability report. Both the new GRI standards and G4 guidelines include five disclosures on waste. The new Standards require reporting on one disclosure so Company XYZ can report more in depth on this key topic.

Previously, some companies felt compelled to report on a greater number of topics and disclosures in order to be ranked favorably by rating agencies like Bloomberg or Thomson Reuters. These ratings not only can affect a company’s stock price, but they also can influence a company’s CSR strategy.

According to a 2016 study on rating agencies, about 33 percent of companies said inquiries from sustainability analysts shaped their overall business strategy.[ix]

Implications and Conclusion

Regardless of which sustainability reporting guidelines an organization chooses, the number of companies producing voluntary or mandatory reports is growing.

The process itself can give companies a clearer picture of their impacts and progress meeting their CSR targets. These insights help companies develop strategies to identify risks and opportunities within their realm of sustainability.

Because the GRI framework has been widely accepted globally, its new Standards will likely have a strong impact on the future of reporting. But it’s also likely that the leadership of corporations will continue to take a closer look at the link between sustainability and financial performance. Consequently, other frameworks that focus on both financial and non-financial impacts could gain acceptance.

GRI, SASB, IIRC and other frameworks are all driving improvements in sustainability reporting. As GRI’s Mohin explained: “In order to be more impactful, reporting needs to be concise, consistent, comparable and current. Brevity and consistency are key to successfully managing and understanding the insights delivered by the reported data.”[x]

Reporting must consider the financial bottom line if a company is to be both profitable and sustainable. What matters is that organizations need to be mindful of their reasons for reporting and how sustainability reporting can make an impact internally and externally. Honest, balanced and transparent reporting will ultimately benefit companies, their stakeholders and society-at-large.

Author:  Jane DeLorenzo is Principal of Sustainable Options, specializing in sustainability report writing and editing, and compliance with GRI reporting.

 

 

 

 

 

 

 

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The on-line Certificate in Corporate Responsibility & Sustainability Strategies provides a broad overview of key corporate responsibility challenges and strategies that will enable organizations to succeed in the 21st Century Green Economy.  The Program Developer is Nitish Singh, Ph.D., Associate Professor of International Business at the Boeing Institute of International Business at Saint Louis University with Instructor Brendan M. Keating.

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

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References:

[i] Brockett, A. and Rezaee, Z. (2015). Corporate Sustainability: Integrating Performance and Reporting. Retrieved from https://www.safaribooksonline.com/library/view/corporate-sustainability-integrating/9781118238066/chapter02.html

[ii] Environmental Protection Agency, United States. (n.d.) Timeline of Toxics Release Inventory Milestones. Retrieved from  https://www.epa.gov/toxics-release-inventory-tri-program/timeline-toxics-release-inventory-milestones

[iii] CSRwire (2002, April 22). Global Reporting Initiative Announces Move to Amsterdam. Retrieved from http://www.csrwire.com/press_releases/15359-Global-Reporting-Initiative-Announces-Move-to-Amsterdam

[iv] GRI (2017, October 4). Q&A with GRI Chief Executive Tim Mohin. Retrieved from https://www.globalreporting.org/information/news-and-press-center/Pages/QA-with-GRI-Chief-Executive-Tim-Mohin.aspx

[v] Mohin, T. and Rogers, J. (2017, March 16). How to approach corporate sustainability reporting in 2017. Retrieved from https://www.greenbiz.com/article/how-approach-corporate-sustainability-reporting-2017

[vi] International Integrated Reporting Council. (n.d.) Why? The need for change. Retrieved from https://integratedreporting.org/why-the-need-for-change/

[vii] European Commission, Belgium. (n.d.) Non-financial reporting. Retrieved from    https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/non-financial-reporting_en

[viii] GRI (n.d.) GRI 103: Management Approach. Retrieved from https://www.globalreporting.org/standards/gri-standards-download-center/gri-103-management-approach/

[ix] Sustainable Insight Capital Management (2016 February) Who are the ESG rating agencies? Retrieved from https://www.sicm.com/docs/who-rates.pdf

[x] GRI (2017, October 4). Q&A with GRI Chief Executive Tim Mohin. Retrieved from https://www.globalreporting.org/information/news-and-press-center/Pages/QA-with-GRI-Chief-Executive-Tim-Mohin.aspx

 

Cradle-to-Cradle Case History: Shaw Industries

Guest Commentary by Jennifer Moore – at the Conference Board

Content originally prepared for Certification in Corporate Responsibility & Sustainability Strategies – on-line courseware by G&A Institute **

The early 21st century ushered in a new wave of heightened concern about resource scarcity and climate change. Consequently, consumers have been more concerned about the sustainability of the products they purchase and the effects they are having on the environment.

Businesses have also taken on the challenge of incorporating sustainability strategies into their business models. Many more companies are now integrating sustainability practices through product stewardship and their R&D activities.

These companies are focusing on life cycle assessments of their products and are aiming to achieve Cradle-to-Cradle status. As defined by the Ellen MacArthur Foundation, the Cradle-to- Cradle school of thought is an important branch within the circular economy concept.

Cradle-to-Cradle focuses on products that have a positive impact and reduce the negative impacts on commerce through production efficiency (see footnote 1).

Cradle-to-Cradle and circular economy goes beyond the “reduce, reuse, recycle” campaign of the late Twentieth Century to focus more on the design and production of products, rather than on consumption by the consumer.

The authoritative work, “Cradle to Cradle: Remaking the Way We Make Things”,  authored by Michael Braungart and William McDonough called for a new era of production, wherein, companies should be focusing more on “doing more good,” rather than “doing less bad.”

The goal and focus should be on the end of the product’s lifecycle, and whether it will either be safely re-entered into the environment — or be recycled back into production.

Cradle-to-Cradle aims to achieve three things: (1) eliminate the concept of waste, (2) power with renewable energy, and (3) respect human and natural systems. (2)

This concept argues that resource consumption and economic growth should not be isolated from each other. In fact, they often go hand-in-hand. (3)

The private sector is not siloed; it has been highly influenced by the public sector and discussion forums. Many non-governmental organizations (NGOs), driven by public demand, have advocated for the advancement of a circular economy. The World Economic Forum, Oxfam International and the United Nations in particular have been vocal about transitioning to a circular economy.

Also, the emphasis of the Sustainable Development Goals (SDGs) released in 2016 by the United Nations is on developing a more circular economy and seeking to implement sustainable development across the UN member states. (4)

While the SDGs are driven by politics and protecting human rights, the goals cannot be achieved without businesses and were developed with input from the private sector. There is business value for companies to align their strategy with the SDGs. (5)

Many companies have recognized the benefits of aligning their goals with the SGDs and the relationship between resource consumption and economic growth.

Consumers are now expecting companies to provide products that are eco-friendly and reduce resource waste. According to a survey conducted by Nielsen in 2014, “55 percent of on-line consumers indicated they were willing to pay more for products and services provided by companies that are committed to positive social and environmental impact, an increase from 50% in 2010 and 45% in 2011.” (6)

The Business Community’s Embrace of Cradle-to-Cradle

Businesses across all industries are now developing their product stewardship products to meet these consumer demands. Companies cite “customer demand for solutions that address global sustainability challenges, such as climate change and resource scarcity” as primary drivers of sustainable product initiatives. (7)

For example, 3M is striving for 40 per cent of their new products to be sustainable and Kimberly-Clark is developing solutions for used diapers. One exemplary model of sustainable product stewardship is Shaw Industries’ dedication to Cradle-to-Cradle.

The Shaw Industry Model

Shaw Industries is the largest producer of carpet tile in North America. While carpet tiles can have a lifespan of 10-to-25 years, commercial owners and tenants often update their facilities more frequently than that to reflect contemporary trends, resulting in a high-waste industry.

Historically, when the time came for flooring to be removed from businesses, schools, retailers, hospitals and other properties – whether for wear-and-tear or aesthetics, it was sent to landfills.

Recognizing the opportunity to create a better solution for customers and to create a product that would help advance toward a more circular economy, Shaw developed EcoWorx-backed carpet tile, which it introduced in 2008 and continues to optimize for sustainability performance.

The world’s first Cradle-to-Cradle Certified carpet tile — EcoWorx — was designed for reuse. To create a carpet tile that could be infinitely recycled with no loss of quality meant removing PVC, phthalates and other chemicals. As a result of its meticulous design process, Shaw understands what’s in its EcoWorx products and, therefore, what’s going into the next generation of its products.

Today, with 16 years and more than 3 billion square feet of EcoWorx installed, Shaw continues to optimize the product’s performance in alignment with Cradle-to-Cradle criteria – material health, material reutilization, energy, water and social responsibility.

Most recently, Shaw worked with one of its suppliers to remove an ingredient from its latex that was added to the list of banned chemicals within version 3 of the Cradle-to-Cradle Certified Products Program Standard.

Further, the company employs sustainable manufacturing practices – making efficient use of materials and natural resources, using alternative and renewable energy sources when possible, and designing and operating its facilities and manufacturing processes in accordance with widely recognized sustainability and safety standards.

It completes the sustainable manufacturing process by delivering its products using the most efficient mode of transportation feasible while meeting customer deadlines.

Shaw has committed itself to embracing Cradle-to-Cradle practices and has lead the way in carpet reclamation in the flooring industry. Today, 65 percent of its products – commercial and residential – are Cradle-to-Cradle Certified, with a goal of designing 100% to Cradle-to-Cradle principles by 2030.

Not only is Shaw committed to upcycling within its own operations, it also looks for opportunities in other industries.

For example, the company converts plastic drink bottles into residential carpet through a joint venture with DAK Americas: The Clear Path Recycling Center in Fayetteville, NC produces 100 million pounds of clear flake each year, recycling approximately three billion plastic drink bottles annually.

Furthermore, in 2016 alone, Shaw supplied more than 200 million pounds of post-industrial waste to other businesses for a variety of recycled content needs. For instance, the wood flour – waste fiber from hardwood flooring operations – is used by a major producer of composite decking and the minimal waste from its resilient manufacturing facility is used to make garden hoses.

The Future for Cradle-to-Cradle in Industry

Today, sustainable leadership companies, like Shaw, can strive to achieve cradle-to-cradle production through the certified program by the Cradle-to-Cradle Products Innovation Institute.

The Institute examines certifiable products in five (5) quality categories – (1) material health, (2) material reutilization, (3) renewable energy and carbon management, (4) water stewardship, and (5) social fairness. (Footnote 8)

Sustainability managers must partner with their design and strategy teams to develop sustainable solutions to the products and services their company offers. Not only are these products essential ecologically and socially, they are also drivers of revenue growth.

If managers are concerned about getting [internal] corporate buy-in to fund ESG R&D, they are able to present the business case of how other companies — especially like Shaw Industries with the illustrations here in this case study — have seen Cradle-to-Cradle’s positive impact on their revenue. (9)

According to The Conference Board, “revenues from sustainable products and services grew at six times the rate of overall company revenues.”

In order to address Earth’s ecological crisis, companies must lead the way by ensuring they are designing eco-friendly products and services that respects the finite resources available on the planet. Sustainability managers can look to Shaw as one company that is leading by example.

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Jennifer Moore is Manager, Executive Programs, Sustainability & EHS at the Conference Board. She engages with senior executives from Fortune 250 companies to understand their needs and help solve their business issues. She oversees and executes all aspects of 15 roundtables per year.

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**  Information about the G&A Institute on-line course:

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

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Footnotes:

(1) Ellen MacArthur Foundation. Cradle to Cradle in a Circular Economy – Products and Systems. Retrieved March 5, 2017. https://www.ellenmacarthurfoundation.org/circular-economy/schools-of-thought/cradle2cradle

(2)  Ellen MacArthur Foundation. Cradle to Cradle in a Circular Economy – Products and Systems. Retrieved March 5, 2017. https://www.ellenmacarthurfoundation.org/circular-economy/schools-of-thought/cradle2cradle

(3) Strahel, W. (2015). The Performance Economy. Palgrave MacMillan: 2006

(4) United Nations. United Nations Economic and Social Council. Millennium Development Goals and post-2015. Development Agenda. Retrieved March 5, 2017. http://www.un.org/en/ecosoc/about/mdg.shtml.

(5)  Yosie, T. Is There Business Value in the UN Sustainable Development Goals? Retrieved March 5, 2017. http://tcbblogs.org/givingthoughts/2017/02/07/is-there-business-value-in-the-un-sustainable-development-goals/#sthash.L0MLUAN7.xHIHNvHZ.dpbs

(6) Singer, T. Driving Revenue Growth Through Sustainable Products and Services. New York: The Conference Board, 2015. p. 17.

(7) Singer, T. Driving Revenue Growth Through Sustainable Products and Services. New York: The Conference Board, 2015. p. 8.

(8)  C2C Product Certification Overview – Get Certified – Cradle to Cradle Products Innovation Institute. Retrieved March 5, 2017. http://www.c2ccertified.org/get-certified/product-certification

(9)  Singer, T. Driving Revenue Growth Through Sustainable Products and Services. New York: The Conference Board, 2015. p. 6.

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So Many Positives in 2016 for Sustainability – Corporate Citizenship – CR – Sustainable Investing — The Core of “Trends Converging!” Commentaries. It’s 2017 — Now What?

by Hank BoernerG&A Institute

Welcome to 2017! We are off to the start of a challenging year for sustainability / responsibility / corporate citizenship / sustainable investing professionals.

We are being forewarned: A self-described (by his constant tweeting) “new sheriff is coming to town,” along with the newly-elected members of the 115th Congress who begin their meetings this week. Given the makeup of the new Administration (at least in the identification of cabinet and agency leaders to date) and the members of the leadership of the majority party on Capitol Hill, sustainability professionals will have their work set out for them, probably coming into a more clear focus in the fabled “first 100 days” after January 20th and the presidential inauguration ceremonies.

The year 2016 began on such a hopeful note! One year ago as the year got started I began writing a series of commentaries on the many positive trends that I saw — and by summer I was assembling these into “Trends Converging! — A 2016 Look Ahead of the Curve at ESG / Sustainability / CR / SRI.” Subtitle, important trends converging that are looking very positive…

As I got beyond charting some 50 of these trends, and I stopped my thinking and writing to share the commentaries and perspectives that formed chapters in an assembled e-book that is available for your reading. I’ve been sharing my views because the stakes are high for our society, business community, public sector, social sector…all of us!

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The specifics: Throughout the early months of 2016 I was encouraged by:

The Secretary of the U.S. Department of Labor giving American fiduciaries the green light for considering corporate ESG factors in their investment decision-making. Page 7 – right up front in the commentaries!

The Sustainable Accounting Standards Board (SASB) team completing its comprehensive recommendations for 12 sectors and 80 industry components of these for “materiality mapping” and expansion of corporate reporting to include material ESG factors in the annual 10-k filing. These are important tools for investors and managements of public companies. See Page 17.

His Holiness Pope Francis mobilizing the global resources of the worldwide Roman Catholic Church with his 74-page Laudato Si [encyclical] that includes sharp and sweeping focus on climate change, global warming, water availability, biodiversity, and other social issues. Imagine, I wrote, the power that such an institution can bring to bear on challenges, in the world, in the USA, and other large nations…

This is the Pope’s great work: “On Care of Our Common Home.” I explored the breadth of depth of this in my commentaries. That’s on Page 163 – Chapter 44.

President Barack Obama ably led the dramatic advances made in the Federal government’s sustainability efforts thanks in large measure to several of the President’s Executive Orders (such as EO 13693 on March 19, 2015: Planning for Federal Sustainability in the Next Decade).

Keep in mind the Federal government is the largest purchaser of goods and services in the U.S.A. — over time this action will result in positive changes across the government’s prime supply chain networks. Page 50 / Chapter 13.

The European Union’s new rules for disclosure of non-financial information beginning in 2017; As I began my commentary, the various EU states were busily finalizing adoption of the Accounting Directive to meet the deadline for companies within each of the 28 states. The estimate is that as many as 5,000 companies will begin reporting on their CR and ESG performance. Page 27 / Chapter 7.

Here in the USA, Federal regulators were inching toward final rules for the remaining portions of the 2010 Dodd-Frank legislation. Roughly 20% of rules were yet to be completed for corporate compliance with D-F as we entered 2016, according to estimates by the Davis Polk law firm. Page 30 / Chapter 8.

In 2017, one very contentious rule will be in effect — the required disclosure by public companies of the CEO-to-median worker-pay ratio; the final rule was adopted in August 2015 and so in corporate documents we will be seeing this ratio publicized (technically, in the first FY beginning in January 1, 2017). Page 34 / Chapter 9 – What Does My CEO Make? Why It Matters to Me.

Good news on the stock exchange front: member exchanges of the World Federation of Exchanges have been collaborating to develop “sustainability policies” for companies with shares listed on the respective exchanges. At the end of 2015 the WFE’s Sustainability Working Group announced its recommendations [for adoption by exchanges]. Guidance was offered on 34 KPIs for enhanced disclosure. Page 103 / Chapter 27.

The WFE has been cooperating with a broad effort convened by stakeholders to address listing requirements related to corporate disclosure

This is the “SSE” — the Sustainable Stock Exchanges initiative, spearheaded by the Ceres-managed Investor Network on Climate Risk (INCR), and leadership of key UN initiatives as well as WFE member exchanges.

NASDAQ OMX is an important part of this overall effort in the United States and is committed to discussing global standards for corporate ESG performance disclosure.  Notd Evan Harvey, Director of CR for NASDAQ: “Investors should have a complete picture of the long-term viability, health and strategy of their intended targets. ESG data is a part of the total picture. Informed investment decisions tend to produce longer-term investments.”

The United Nations member countries agreed in Fall 2015 on adoption of sweeping Sustainable Development Goals (SDGs) for the next 15 years (17 goals/169 specific targets). This is a dramatic expansion of the 2000 Millennium Goals for companies, NGOs, governments, other stakeholders. Now the many nation-signatories are developing strategies, plans, programs, other actions in adoption of SDGs. And large companies are embracing the goals to help “transfer our world” with adoption of mission-aligned strategies and programs out to 2030.

G&A Institute’s EVP Lou Coppola has been working with Chairwoman of the Board Dr. Wanda Lopuch and leaders of the Global Sourcing Council to help companies adopt goals (the GSC developed a sweeping 17-week sourcing and supply chain campaign based on the 17 goals). Page 56 / Chapter 15.

Very important coming forth as the year 2016 moved to a close: The Report on US Sustainable, Responsible and Impact Investing Trends, 2016 — the every-other-year survey of asset managers in the USA to chart “who” considers ESG factors across their activities. Money managers and institutional investors, we subsequently learned later in 2016, use ESG factors in determining $8.72 trillion in AUM – a whopping 33% increase since 2014. Great work by the team research effort helmed by US SIF’s Meg Voorhes and Croatan Institute’s Joshua Humphreys (project leaders). Background before the report release Page 78.

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The above is a very brief overview of the many positive trends that I saw, explored further, and wrote commentaries on through many months of 2016. I worked to weave in the shared perspectives of outstanding thought leaders and experts on various topics. We are all more enlightened and informed by the work of outstanding thought leaders, many presented in the public arena to benefit us.

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Sharing Thought Leadership

In developing our commentaries we shared the wisdom of many people who are influential thought leaders and who enthusiastically share their own perspectives with us. These include:

  • Chris Skroupa, Founder of Skytop Strategies and prominent Forbes blogger. His views on Page i.
  • Pam Styles, Founder/Principal of Next Level Investor Relations and NIRI Senior Roundtable member. See Page iv.
  • Secretary Thomas Perez, U.S. Department of Labor on ERISA for fiduciaries. Page 7.
  • Dr. James Hawley of St. Mary’s College of California on the concept of the Universal Owner, based on the earlier work of corporate governance thought leader Robert Monks. Page 9.
  • the team at Sustainable Accounting Standards Board led by Chair Michael Bloomberg, Vice Chair Mary Schapiro, Founder and CEO Jean Rogers, Ph.D., P.E. . Page 17.
  • the team at TruCost.
  • the team at CDP.
  • the team at CFA Institute (the global organization for Chartered Financial Analysts) developing guidelines for inclusion of ESG factors in analysis and portfolio management — the new Guide for Investment Professionals – ESG Issues in Investing. Coordinated by Matt Orsagh, CFA, CIPM; Usman Hayat, CFA; Kurt Schacht, JD, CFA; Rebecca A. Fender, CFA. Page 20.
  • the leadership team at New York Society of Securities Analysts’ (NYSSA) Sustainable Investing Committee (where I was privileged to serve as chair until December 31st). Page 21. We have great perspective sharing among the core leadership team (Kate Starr, Peter Roselle, Ken Lassner, Andrew King, Agnes Terestchenko, Steve Loren).
  • experts respected law firms sharing important perspectives related to corporate governance, corporate citizenship / CSR / disclosure / compliance and related topics: Gibson Dunn on compliance matters. Page 25.
  • the law firm of Davis Polk on Dodd-Frank rulemaking progress and related matters.
  • experts at the respected law firm of Morrison & Foerster on executive compensation and related regulatory matters (in the excellent Cheat Sheet publication). Page 30.
  • the experts at the law firm of Goodwin Procter addressing SEC regulations. Page 146.
  • the skilled researchers, analysts and strategists at MSCI who shared “2016 ESG Trends to Watch” with their colleagues. The team of Linda Eling, Matt Moscardi, Laura Nishikawa and Ric Marshall identified 550 companies in the MSCI ACWI Index that are “ahead of the curve” in accounting for their carbon emissions targets relative to country targets. Baer Pettit, Managing Director and Global Head of Products, is leading the effort to integrate ESG factors into the various MSCI benchmarks for investor clients.Page 100.

AND……..

  • Thanks to Peter Roselle for his continuous sharing of Morgan Stanley  research results with the analyst community. 
  • the perceptive analysts at Veritas, the executive compensation experts who closely monitor and share thoughts on CEO pay issues. Page 36.
  • the outstanding corporate governance thought leader and counsel to corporations Holly Gregory of the law firm Sidley Austin LLP who every year puts issues in focus for clients and shares these with the rest of us; this includes her views on proxy voting issues. (She is co-leader of the law firm’s CG and Exec Compensation Practice in New York City.) Page 39.
  • the Hon. Scott M. Stringer, Comptroller of the City of New York, with his powerful “Board Accountability Project,” demanding increased “viable” proxy access in corporate bylaws to enable qualified shareholders to advance candidates for board service. Pages 40, 45 on.
  • the experts at Institutional Shareholder Services (ISS), a unit of MSCI, which counts numerous public employee pension funds and labor pension systems among its clients; ISS staff share their views on governance issues with the rest of us to keep us informed on their policies and related matters. Page 40.
  • SRI pioneer and thought leader Robert Zevin (chair of Zevin Asset Management) who shares his views on the company’s work to improve corporate behaviors. Page 41.
  • Mark W. Sickles, NACD thought leader, and my co-author of “Strategic Governance: Enabling Financial, Environmental and Social Sustainability” (p.2010) for helping me to better understand and refine my views on the “Swarming Effect” (investor engagement) by institutional investors that influences corporate behavior. Page 44.
  • the experts led by thought leader (and ED) Jon Lukomnik at Investor Responsibility Research Center (IRRC) that, working with Ernst & Young LLP, one year ago in January produced the Corporate Risk Factor Disclosure Landscape to help us better understand corporate risk management and related disclosure. Page 47.
  • CNN commentator and author Fareed Zakaria who shared his brilliant perspectives with us in publishing “The Post American World,” focusing on a tectonic, great power shift. Page 61.
  • The former food, agriculture and related topics commentator of The New York Times, Mark Bittman, who shared many news reports and commentaries with editors over five years before moving on to the private sector. Page 65.
  • our many colleagues at the Global Reporting Initiative (GRI) in the Netherlands, the USA, and in other countries, who shared their views on corporate sustainability reporting and related topics; the GRI framework is now becoming a global standard. (G&A Institute is the Data Partner for GRI in the USA, UK and Republic of Ireland; we are also a Gold Community member of supporters for the GRI.) Page 71.
  • our colleagues at Bloomberg LP, especially the key specialist of ESG research, Hideki Suzuki; (and) other colleagues at Bloomberg LP in various capacities including publishing the very credible Bloomberg data and commentary on line and in print. Page 76 and others.
  • Barbara Kimmel, principal of the Trust Across America organization, who collaborated with G&A Institute research efforts in 2016.
  • we have been continually inspired over many years by the efforts of the Interfaith Center on Corporate Responsibility (ICCR), and past and present leaders and colleagues there, who helped to inform our views in 2016 on shareholder activism and corporate engagement. Chair the Rev. Seamus Finn is on point with his “Holy Land Principles” in recent years. The long-time executive director, Tim Smith (now at Walden Asset Management) has been very generous in sharing news and perspectives long after his ICCR career. Details on Page 77.
  • our colleagues at the U.S. Forum for Sustainable & Responsible Investment (US SIF), and its Foundation, led by CEO Lisa Woll; and our colleagues at the SIF units SIRAN and IWG. The every-other-year summary of Assets Under Management utilizing ESG approaches showed [AUM] nearing $9 trillion before the run up in market valuations following the November elections. Page 78.
  • Goldman Sachs Asset Management acquired Imprint Capital in 2015 (the company was a leader in developing investment solutions that generate measureable ESG impact — impact investing). Hugh Lawson, head of GSAM client strategy, is leading the global ESG activities. GSAM has updated its Environmental Policy Framework to guide the $150 billion in clean energy financing out to 2025. Page 83.
  • the experts at Responsible Investor, publishing “ESG & Corporate Financial Performance: Mapping the Global Landscape,” the research conducted by Deutsche Asset & Wealth Management and Hamburg University. This is an empirical “study of studies” that looked at the “durable, overall impact of ESG integration to boost the financial performance of companies.” A powerful review of more than 2,000 studies dating back to 1970. Page 90.
  • Boston Consulting Group’s Gregory Pope and David Gee writing for CNBC saw the advantage held by the USA going into the Paris COP 21 talks: advances in technology are making the USA a global leader in low-cost/low-pollution energy production. They worked with Professor Michael Porter of Harvard Business School (the “shared value” proponent) on research. Page 95.
  • researchers, analysts and experts at Morgan Stanley Research charted “what was accomplished in Paris in 2015” for us; their report identified five key areas of progress that cheered conference participants; I share these in the “Trends Converging!” work. MS Research in the post-Paris days shared perspectives on the carbon tax concept and the status of various nations on the issue — and the actions of the State of California in implementing “AB 32” addressing GhGs. Page 119.
  • G&A Institute Fellow Daniel Doyle, an experienced CFO and financial executive, sharing thoughts on corporate “inversion” and the bringing back of profits earned abroad by U.S. companies. Page 122.
  • the Council of State Governments (serving the three branches of state governments) is actively working with public officials in understanding the Clean Power Plan of the Obama Administration (the shared information is part of the CSG Knowledge Center). Page 101.
  • Evan Harvey, Director of CR at NASDAQ, has continuously shared his knowledge with colleagues as the world’s stock exchanges move toward guidance or rule making regarding disclosure of corporate sustainability and related topics. Page 104.
  • our former Rowan & Blewitt [consulting practice] colleague Allen Schaeffer, now the leader of the Diesel Technology Forum, explaining the role of “clean diesel” in addressing climate change issues. Page 128.
  • Harvard Business School prof Clayton Christensen, who conceived and thoroughly explained “the Innovator Dilemma” in the book of the same name in 2007, updated recently, characterized new technology as “disruptive” and “sustaining,” now happening at an accelerated pace. We explain on Page 147.
  • the researchers and experts at the Society for Human Resource Management (SHRM) has shared important perspectives and research results dealing with the massive shift taking place in the corporate and business sectors as Baby Boomers retire(!) and the Millennials rise to positions of influence and power. And Millennials are bringing very positive views regarding corporate sustainability and sustainable investing to their workplace! The folks at Sustainable Brands also weighed in on this in recent research and conference proceedings. Page 154.
  • Author Thom Hartman in 2002 explored for us the subject of “corporate citizenship” in his book, “Unequal Protection, the Rise of Corporate Dominance and the Theft of Human Rights.” This work continues to help inform views regarding “corporate rights” in the context of corporate citizenship and beyond. The issue of corporate contributions to political parties and candidates continues to be a hot proxy season debate. Page 160.
  • Author and consultant Freya Williams in her monumental, decade-long research into “Green Giants” shared results with us in the book of that name and her various lectures. Seven green giant [companies] are making billions with focus on sustainability, she tells us, and they outperform the S&P 500 benchmark. Page 170.
  • Speaking of the S&P 500, I shared the results of the ongoing research conducted by our G&A Institute colleagues on the reporting activities of the 500 large companies — now at 81% of the benchmark components. Page 195.
  • And of course top-of-mind as I moved on through in writing the commentaries, I had the Securities & Exchange Commission’s important work in conducting the “Disclosure Effectiveness Initiative,” and a look at Regulation S-K in the “Concept Release” that was circulated widely in the earlier months of 2016. Consideration of corporate sustainability / ESG material information was an important inclusion in the 200-page document. Page 174.

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All of the above and more were important contributors in my collected “Trends Converging!” (in 2016) work. I am grateful to many colleagues in the corporate community and in the capital markets community who shared knowledge, wisdom, expertise and more with Lou Coppola and I over the recent years. They have helped to inform our work.

We thank the knowledge and valuable information willingly shared with us by our valued colleagues at RepRisk, especially Alexandra Milhailescu; Measurabl (Matt Ellis); The Conference Board’s Matteo Tonello; Nancy Mancilla and Alex Georgescu at our partnering organization for training, ISOS Group; Bill Baue at Convetit; Herb Blank at S-Networks Global Indexes; Robert Dornau at RobecoSAM Group, managers of the Dow Jones Sustainability Index family; Barbara Kimmel at Trust Across America.

Also, Professor Nitish Singh of St. Louis University, with his colleague VP Brendan Keating of IntegTree, our on-line professor and tech guru for the new G&A on-line, sustainability and CSR e-learning platform.

And, Executive Director Judith Young and Institute Founder James Abruzzo, our colleagues at the Institute for Ethical Leadership at Rutgers University Business School; Matt LePere and the leaders at Baruch College / City University of New York; and, Peter Fusaro, our colleague in teaching and coaching, at Global Change Associates.

And thank you, Washington DC Power Players!

Very important: We must keep uppermost in mind the landmark work of our President Barack H. Obama (consider his Action Plan on Climate Change, issued in December 2015) with the Clean Power Plan for the USA included. His Executive Orders have shaped the Federal government’s response to climate change challenges.

And there is U.S. Senator Bernie Sanders, again and again hitting the hot button sensitive areas for the middle class — like income and wealth inequalities and Wall Street reform — that raised the consciousness of the American public about these issues.
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Former Secretary of State Hillary Rodham Clinton and her views (published in The New York Times) in her “How to Rein in Wall Street” op-ed.

And I thank my G&A Institute colleagues for their support and continued input all through the writing process: EVP Louis Coppola; Ken Cynar, our able editor and news director; Amy Gallagher, client services VP; Peter Hamilton, PR leader; Mary Ann Boerner, head of administration.

So many valuable perspectives shared by so many experts and thought leaders! All available to you…

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And Now to 2017!

And so what will happen in these many, many areas of forward-momentum in addressing society’s most challenging issues (like global warming) with “deniers and destroyers” lining up for key Federal government positions in the new administration and in the 115th Congress?

I and my colleagues at G&A Institute will be bringing you news, commentary and opinion, and our shared perspectives on developments.

If you would like to explore the many (more than 50) positive trends that I saw as 2016 began and proceeded on into the election season, you will find a complimentary copy of “Converging Trends!” (2016) at:http://www.ga-institute.com/research-reports/trends-converging-a-2016-look-ahead-of-the-curve.html

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Please do share with us your own thoughts where you think we might be headed in 2017, and your thoughts on the 2016 trends and their future directions — for 2017 and beyond. Do tune in to the many experts that I included in the various commentaries as they adjust to the New Normal of Washington DC.

I plan to share the individual commentaries with updates in 2017. Do Stay Tuned to G&A Institute’s Sustainability Update blog (you can register here to receive notice of new postings). You can sign on to receive the latest post at: http://www.ga-institute.com/sustainability-update-blog.html (Sharing insights and perspectives for your sustainability journey.)

Best wishes from the G&A Institute team for the New Year 2017!