Looking Back to Look Ahead – The Promise of Biden-Harris Administration to Return to the Hopes of Action on Climate Change Issues

November 9, 2020

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

For almost four l-o-n-g, long years we have been watching – and decrying! – the antics of the Trump Administration in the attempt to roll back vital federal environmental protections that have been put in place (and protected) by elected representatives of both parties over five decades.

It was President Richard M. Nixon – a Republican and conservative leader – who signed the National Environmental Policy Act of 1969 (NEPA) into the law of the land. NEPA was established by the 91st Congress and became law on January 1, 1970.

This also established the President’s Council on Environmental Quality. What flowed thereafter was important…

…the Environmental Protection Agency (US EPA) was created;
The Clean Air Act was enacted into law;
The Clean Water Act soon followed; and then
Toxic Substances Control Act (TSCA);  and 
…”Superfund” for clean up of contamination (actually, CERCLA-Comprehensive Environmental Response, Compensation and Liability Act);  and
Emergency Planning and Community Right-to-Know Act;  and 
Endangered Species Act;  and
Federal Insectiside, Fungicide, and Rodenticide Act; and 
Energy Policy Act; and
Chemical Safety Information, Site Security and Fuels Regulatory Relief Act;
…and much more!

Beginning almost immediately as the Trump Administration took charge of the EPA and other cabinet agencies, these historic legislative achievements were being undermined and protections whittled away.

There will be new environmental overseers coming to town in 2021 and the great hopes pinned on the Biden-Harris Administration include rebuilding the important rules, oversight mechanisms and enforcement of the laws/rules by EPA, Interior, Energy and other agencies.

The New York Times today outlined the first steps that could be taken – issuance of presidential Executive Orders (EOs) and President Memoranda that would undo the same mechanisms employed by President Trump and EPA political leaders to undermine environmental protection measures.

We read in — “Biden Will Roll Back Parts of the Trump Agenda With Strokes of a Pen” – that on Day One, we can expect action on climate change, writes Michael D. Shear and Lisa Friedman.

That starts with notice to the United Nations that the U.S.A. will rejoin the Paris Agreement.

The move to revoke Trump era EOs and re-issue Obama-Biden Administration orders can be immediate; or, President Joe Biden in 2021 can issue new orders along the same lines of prior EOs addressing climate change issues.

Important: The new Executive Orders would create important policies for the heads and rank and file members of the departments – Defense, EPA, Labor, Commerce, Interior, SEC, and many others that in some way directly or indirectly are affected by climate change.

Attitudes do matter – and Presidential Executive Orders to heads of agencies really matter!

2021 is looking like climate change matters will move to front-and-center on the public policy agenda. The Financial Times today pointed out that candidate Joe Biden set a policy of having a target to reach zero carbon

While Donald Trump led the effort to isolate the United States from world affairs, China moved to pledge net zero by 2060 and Japan and South Korea set net zero targets.

With the USA back on board, real progress can be made toward meeting Paris Agreement goals. Exciting to consider: The United States of America as once again a leader in the drive to make the world a safer, healthier place for billions of us!

For a reminder of the Trump moves in 2017 to reverse a half-century and more of environmental protection, here’s my March 2017 look at what was underway just two months into the new administration, with a new leader (Administrator Scott Pruitt) at the helm of the EPA.

Let’s go back to March 2017 – Just two months into the Trump Administration – with bad news on climate change all around!

http://ga-institute.com/Sustainability-Update/climate-change-nah-the-deniers-destroyers-are-work-white-house-attempts-to-roll-back-obama-legacy/


Food! Will We Have Enough to Feed an Ever-Hungrier Planet? – Are Food & Ag Industries “Sustainable” – Let’s Explore…

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

October 30 2020

The United Nations projection is for today’s global population of an estimated 7.6 billion people to expand to a global population of 8.6B by 2030 and 9.8B by 2050…and then to 11.2 billion in 2100 (so says the UN Department of Economic and Social Affairs report, June 2017).

Each year, says the UN, 83 million more people are added to the world’s population.

If we go back 1,000 years, the world population was an estimated 300 million people.

And then, only 4% (about 4 million square kilometers) was used for farming, according to the University of Oxford (source: ourworldindata).

Today, half of the world’s habitable land is used for agriculture (excluding deserts, beaches, rocks, etc.) – that is 51 million KMs. T

There is also land (an additional 40 million KMs) used for livestock, meat, and dairy. Protein supply is largely from plant-based food for much of the world population. (Data – UN Food and Agricultural Organization).

So as the population grows and grows, will we be able to feed millions and then billions of additional people? Where will the capital be needed for food & ag expansion?

Will investors and other stakeholders have enough information – especially reliable, comparable data sets – to understand where the food & ag industry players are…to meet the daily food needs of many more people…to use available arable land wisely and sustainably…to understand what food manufacturers and marketers are doing to be more sustainable and responsible?

We’ve selected a few items in our Top Stories to explore these questions, especially as investors look for agriculture and food trends that fit into the ESG bucket.

TOP STORIES

  1. Forbes contributor Hank Cardello looks at the food industry and the magazine’s list of “100 most sustainably managed public companies” – finding food processing companies “a no show among the top companies”:Food Industry is a No-Show in New Sustainability Study (Source: Forbes)
  2. This ESG / Financial Times article explores why the food sector is difficult to assess from an ESG perspective – to quote, “ESG investors are finding it hard to incorporate food in their portfolios…food businesses’ far-reaching impacts are difficult to measure, making it unclear whether they meet ESG criteria”:Food Proves Hard for ESG Investors to Digest (Source: Financial Times)
  3. This article talks about ESG not being covered in farm media and opines that primary producers don’t have to rely on ESG reporting to get access to capital. So – it seems like these factors could cause difficulty for downstream customers to report on the ESG metrics of their supply chains. Contributing analyst Elaine Kub advises the ag industry that convincing investors a company is operating sustainably and making long-term decisions…and deserves to be in the “ESG category”, but is nary a mention of this in farm media…yet: ESG: Another Acronym for Ag to Know (Source: Progressive Farmer)
  4. 4-A new study from the U.S. Department of Agriculture (USDA) charts organic ag sales have increased 31% from 2016 to 2019:2019 Organic Survey Results Show Sales Up 31% from 2016 (Source: USDA)

Sources:

Excellence in Corporate Citizenship on Display in the Coronavirus Crisis – #2

by Hank Boerner – Chair & Chief Strategist – G&A Institute and the G&A team   — continuing a new conversation about the corporate and investor response the coronavirus crisis…this is the beginning….

Introduction
These are the times when actions and reactions to crisis helps to define the character of the corporation and shape the public profiles of each of the corporate citizens. For companies, these are not easy times.

Many important decisions are to be made, many priorities set in an environment of unknown unknowns — and there are many stakeholders to be taken care of.

Employees – Customers – Suppliers – Regulators – Partners – Investors – Lenders – Communities – Civic Leadership.

As the the arms of the Federal government rush to aid the American society, CEO Chuck Robbins of Cisco put things in perspective in the story: “It’s critical that D.C. do something fast for companies – if you get 80 percent right today, it’s better than waiting a week and getting it 90% right.”

The good news:  Corporations are not waiting – decisions are being made quickly and action is being taken to protect the enterprise – no easy task while protecting the corporate brand, the reputation for being a good corporate citizen, watching out for the investor base and the employee base — and all stakeholders.

This continuing commentary in the first week of the crisis breaking through the barriers of doubt and with reality setting in. What are companies doing? How will the decisions made at the top in turn affect the company’s employees, customers, hometowns, suppliers, other stakeholders? Stay tuned.

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Friday, March 20, 2020 – Day Four of the National Shutdown in the Coronavirus Crisis…  The Second Roundup of the Day –  Evening Today

Walmart Responds – Setting the Pace for Mass Retailing

Walmart is the largest retailer in the United States of America, with branded stores, Sam’s Club stores, warehouses and other facilities in literally thousands of communities across the continent.

During hurricanes, floods, superstorms and the like, the Walmart men and women have stepped forward to aid their communities in various ways.

The company has a web site up for employees, customers and stakeholders to detail “Walmart’s Response to COVID-19″ (link below).

Among the steps announced so far:

The message from the CEO-President John Furner (Walmart U.S.) to his team members:  “We are so grateful for your hard work.  It’s been incredible to see Walmart associates step up to the challenge of serving America this month.  During a very uncertain and stressful time, you have done your jobs with calm, compassion and excellence.”

Full message here: https://corporate.walmart.com/newsroom/2020/03/19/walmart-u-s-ceo-john-furner-to-associates-we-are-so-grateful-for-your-hard-work

Walmart’s Walking-the-talk reward for associates:

  • Every full timer in stores, supply chain and HQs will receive $300 and part-timers $150 in the bonus (on April 2nd). The bonus payments for Q1 will be accelerated to be paid later in the month of April – the amount will be just as if the first quarter goals were reached.  No associate will receive less than the first Q bonus payment. Cost to WMT: US$180 million.
  • Overall, $550 million will be going to WMT associates during this critical period.  2019 Q4 payments were made this week – so Walmart team members will be seeing money coming in March 19 – April 2 – April 30 – May 28.

We’re hiring!  More associates are needed – the doors are open for up to 150,000 temporary workers for stores, clubs, distribution centers and fulfillment centers – some may convert to permanent jobs after the crisis.  The 2-week application process is now 24 hours.  Information is at careers.walmart.com

The company beefed up its COVID-19 emergency leave policy to encourage sick employees to stay home, or those “uncomfortable”, those who are quarantined, and associates with the virus.

Today (March 20) from 6 a.m. to 7 a.m. employees had an “associates-only” shopping hour with the usual 10% discount expanded to include vital grocery items.

Consider the lift:  This company has 2.2 million associates worldwide.

Walmart has a huge footprint across North America and stretched into parts of the world.  Each week (in normal times) 265 million shoppers (customers and “members”) visit 11,500 stores under 56 banners in 27 countries and eCommerce websites.

Says CEO-U.S. John Furner:  “Thank you again for what you’re doing – America needs Walmart right now, and we have been at our absolute best.

Bravo, Walmart associates, for keeping us supplied as best you can in this emergency.

You can keep up with Walmart news at: https://corporate.walmart.com/coronavirus

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Give Us a Few Hours and You Will Have Your Hand Cleaner

LVMH, the luxury brand marketer, met France’s call for more hand sanitizer in just 72 hours. On a typical day the Orleans, France factory produces perfume (Christian Dior etc).  This Monday, reports The Financial Times, the first lines of hand sanitizer in plastic bottles rolled forth, headed for doctors and nurses in Paris hospitals.

The government of France called on industry to help – that was last Friday – and Monday the bottles began to head for boxes for delivery to the besieged hospitals.  (LVMH – Louis Vuitton, Moet Hennessey is the largest company in France.)

The company intends to produce 12 tonnes (!) of the gel to 39 hospitals in Paris (the APHP”) over the coming days and two other production lines (Givenchy, L’Oise and Guerlain Brand, Chartres) are coming on line.

Secret to the ramp up: FT writer Leila Abboud explains that sanitizing needs three main ingredients – purified water, ethanol and glycerine – and the company had these at the ready as the equipment was set up (cosmetics and pharma products being close cousins). The company makes liquid soap, moisturizing creams for the usual products – Dior, Givenchy, Guerlain.

Said the company:  “LVMH will continue to honour this commitment as long as necessary.”

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In related news The Financial Times tells us that other French companies have joined the battle.

  • BNP Paribas donated 500,000 masks to Paris hospitals.
  • Renault loaned 300 autos for medical purposes.
  • L’Oreal is retooling factories to make millions of hand sanitizers destined for nursing homes and hospitals.

Keeping in mind:  Makers of luxury goods will be hard hit in the current crisis, especially as the lucrative China markets shut down – both for sales and for production.  (LVMH is not reliant on China for production, but sales, definitely.)

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Closer to Home – Bacardi in Puerto Rico Steps Up

Bacardi Limited, makes of popular rums, will help to supply the ethanol required for making hand sanitizers.  The distillery in Catano, P.R. where 80% of the rums are made, is partnering with Olein Refinery to product raw materials that will contribute to the production of the products.

Target: at least 500,000 of the 10-ounce units of hand sanitizers – and these will be donated to local communities.  Said Jose Class – VP-Supply Chain & Manufacturing:  “This is a family-owned business sand we know what it means to take care of a community in need.  In the 158 years of [the family-owned] Bacardi, we’ve endured our share of challenging times and have learned that resilience, optimism and community are what will help us come out stronger.”

We’ll hoist a glass to that!  Make it BACARDI® – GREY GOOSE® – DEWARS® – BOMBAY SAPPHIRE® – MARTINI® – and other brands of this corporate citizen in a U.S. territory still struggling to recover from a devastating superstorm.

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Reuters / Ethical Corp:  Moving to the Online to Share Important Perspectives & Guidance

Ethical Corp / Reuters Events create “Reuters Events Ethical Corporation” events.  While in-person meetings will be a zero right now and probably at minimum for a while, that does not mean that the sharing has to stop.

The partners are organizing a new webinar series of 60 minutes each to “deliver solution to key sustainability challenges”.  Senior event speakers from Europe and the USA will present at the upcoming sessions:

  • Investors Engagement: Measuring Your Social Impact
  • Traceability & Visibility: Successfully Map and Monitor Across the Tiers
  • Best Practice Sustainability Supplier Engagement
  • Climate Disclosures – Accurately Reporting Climate Impacts, Risks and Future Opportunities

G&A Institute regularly partners with Reuters / Ethical Corp and G&A’s VP Amy Gallagher is the point person who alerts our connections about upcoming Reuters / Ethical Corp conferences.  She’ll keep us posted on the webinar series – watch for our communications through the usual channels.

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Global Reporting Initiative – Staying Safe and Continuing on Course

Tim Mohin, Chief Executive of the GRI, updated the global community plugged into the standards organization with news from Amsterdam (HQs of the GRI):

  • Most employees have transitioned to remote work arrangements to continue the operations.
  • Virtual solutions are enabling stakeholder engagements through online platforms.
  • All air travel is restricted for the GRI workforce.
  • Employees are being updated and informed through messaging apps, video, collaboration tools.

The GRI organization’s three priorities: (1) the wellbeing of all employees worldwide; (2) continuing the work with partners; (3) meeting new challenges with resilience, dedication and hard work.

You should know: Timothy J. Mohin was senior director of CR for Advanced Micro Devices (AMD) and former chair of the Electronic Industry Citizenship Coalition (EICC) before joining GRI as chief executive.  He’s the author of the best-seller, “Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations”.

Earlier in his career Tim was founder/leader of Apple’s Supplier Responsibility program, and also led Intel’s sustainability functions.

G&A Institute is Data Partner for the GRI in the United States of America, the United Kingdom and the Republic of Ireland (an EU state).   We value our long relationship with the GRI team and with Tim Mohin and our decade-long collaboration with GRI.

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The National Geographic Shoulders On – Facts and Science in the Forefront

The National Geographic Society has assembled the magazine’s COVID-19 “scientifically-accurate” information for subscribers (online). This includes text, graphics, photos, videos, “fake news” exposes, data sets, and much more.  Also, resources for families (“for facts geared toward kids and ideas on how to occupy their minds while they are out of school – at “Nat Geo Kids”).

All of this is in addition to the usual broad fare of science, geography and other content that the National Geographic offers.  The society’s national office in Washington D.C. is closed until at least March 31st

Says NatGeo:  “The work continues in these uncertain times.  It must.  Earth’s last wild places and millions of species are on the brink of being lost forever. If anything, this pandemic shows what happens when science and the experts are ignored.  We need solutions to the biggest challenges threatening our planet now more than ever. We can’t afford to pause our work, and we’ll do the best that we can to build a better future together while maintaining the health of all.”

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

The new items will be posted at the top of the blog post and the items today in this first blog post will move down the queue.

We are creating the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID-19 for our Twitter posts.  Do join the conversation and contribute your views and news.

Send us news about your organization – info@ga-institute.com so we can share.   Stay safe – be well — keep in touch!

World’s Largest Sovereign Wealth Fund – an Investor Actively Engaged in ESG Issues Like Fossil Fuel Divestment…Quo Vadis, Norway SWF?

by Hank Boerner – Chairman, G&A Institute

Here at G&A the team monitors a sizeable number of asset owners (like pension funds CalPERS and New York State Common), asset managers (Black Rock, Morgan Stanley State Street), S&R investors (TIAA-CREF, Trillium, Calvert) and other kinds of institutional investors – including the growing universe of Sovereign Wealth Funds (SWFs).

A SWFis generally described as an asset fund that is state owned and managed, and investing outside of the home nation for the benefit of the population of the home state — and especially for future generations.  The oldest SWF is the Kuwait Investment Authority,  founded in 1954, and funded with oil revenues.

The largest SWF in terms of asset base has long been ADIAAbu Dhabi Investment Authority — established more than 30 years ago by the Emirate and now with US$800 billion-plus in Assets Under Management (AUM). .

Today, it’s a given that the #1 tittle is now held by Norway — the Government Pension Fund Global designed for investing outside of the country (there is a companion fund, much smaller, for investing inside the nation).

Let’s take a look at Norway’s SWF — established almost 20 years ago.  The “inflow” of money to invest comes from sale of the country’s North Sea oil and gas reserves; the government levies a tax of 78% on oil and gas production, and has income from other taxes and dividends from Statoil, the government-managed oil company.

The fund is managed by Norges Bank Investment Management, part of the financial ministry. Investments are primarily in stocks and bonds, a bit of real estate.

The New York Times profiled the SWF in June 2014; among the highlights: the SWF will be more aggressive over the next 3 years, taking larger stakes (5% of more) in companies; expanding the real estate portfolio; will be an “anchor investor” in capital raising; will continue to invest in smaller companies and emerging markets; will continue to look at “green investments.”  The fund has traditionally invested in Europe and North America markets.  Largest holdings are in such companies as Nestle, Novartis, HSBC Holdings, Royal Dutch Shell, Vodafone Group.

Norway’s SWF managers are reported to be looking for investments in companies that are involved in renewable energy, energy efficiency, water / waste water management, and related fields — for both equity and bonds (possibly “green bonds” investments).

Here is where things get interesting.  The flow of funds into the SWF to invest since 1996 has come from oil and gas activities.  Earlier this year a panel of experts was assembled to study the SWF’s investments in oil and natural gas and coal — “fossil fuels.”  Environmentalists and political interests want to see less/or no investments in fossil fuels.  Where the fund’s future funds come from!

More recently, The Financial Times profiled the SWF (November 3, 2014) — and the discussion involved not only the huge size of the fund, and its success in investing (helping to fuel the growth of average US$165 million each year) but also the “climate change” issue.  Soon the fund will be the first SWF to reach US$1 trillion in AUM.  Will those assets include fossil fuel companies?

Yngve Slyngstad (CEO of the fund) was interviewed by FT; he indicated the SWF will begin next year how it will vote ahead of corporate shareholder meetings, beginning with about 30 companies. (The fund owns shares in 8,000 companies; that means with an average of 10 proxy items to vote on, some 80,000 decisions are necessary before votes are cast this global fiduciary with considerable clout.)

The Norway SWF did cast votes against big names in the portfolio; managers don’t like the combination of chairman and CEO so prevalent in US companies, so it voted against Lloyd Blankfein of Goldman Sachs and Jamie Dimon, JP MorganChase for their combined roles.

CEO Slyngstad explained to FT that the SWF is not necessarily an activist investor and does usually support company boards of companies in portfolio, but the CEO and chair at companies they invest in should be separate people. Auditors should be rotated. And shareowners should be allowed to nominate board candidates.

And then the conversation got to climate change and fossil fuels. Should the Norway fund divest fossil fuel investments? Should it back more green (renewable) technologies? Should the fund be used as a diplomatic policy or environmental policy instrument?

In Norway, the fund is regularly the focus of political discussion.  The assets managed are larger than the country’s Gross Domestic Product.

Some politicians want to make changes in the investment policies. Climate change is central to some politico’s views.  The Times quotes Christine Meisingset, who heads sustainability research at Storebrand, who said: “As a country we are so exposed to fossil fuels, a risky position in the transition to a low-carbon economy. That makes the discussion around the oil fund so important.”

The fund does not invest in tobacco companies or companies involved in weapons manufacturing.  Will it soon divest investments in fossil fuel companies…even as fossil fuels “fuel the growth” of the SWF itself?

Stay Tuned to the discussion in the nation of Norway — the wealth generated for its citizens from deep beneath the earth (oil and gas reserves) and being available to the SWF for investment helped to create one of the world’s most important investment portfolios.  And the SWF as the country’s investment mechanism may be among the largest of the institutional investors heeding the call to divest fossil fuel companies (which compromise a tenth of the portfolio right now).

The climate change – global warming dialogue centered on portfolio management approaches regarding fossil fuel divestment continues to…well, “heat up!”