Monthly Archives: December 2016

Good News: Solar & Wind Emerge in Global Search for Renewable Energy Sources

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Guest Commentary  – Alison Crady      Marketing Specialist, CDF Distributors and Fast Partitions, United Kingdom

On Planet Earth there are numerous resources we have learned to utilize to enhance our work and private lives. Through the work of brilliant inventors and engineers, our cities come alive day and night powered by reliable electricity.

From the cars we drive to the light bulbs that illuminate our desktop, we steadily use the planets’ natural resources without giving much thought to the power source.
But in recent years, in addition to our increasing usage of these resources and supplied power, there comes our greater awareness of their limitations.

Today, with the societal emphasis on greater sustainability in all areas of our lives, environmentalists and technicians eagerly search for renewable energy sources.

Options like hydropower, solar power, wind energy and geothermal plants are being tested around the world… the good news is, with increasing success, worth noticing.

Here are some good news stories to share about renewable energy successes around the world:

In Costa Rica
Perhaps one of the “brightest” examples, the nation of Costa Rica in Central America has managed to use 100 percent renewable energy for 76 days straight. This was the second test-run of the length of sustainable power this year, which adds up to over 150 renewable energy days. Being a smaller country, Costa Rica is the perfect testing grounds for replacement energy sources. The length of the country’s use of renewable power is astounding.

Throughout the project, the Costa Rican government depended on these primary replacements:
• Hydro/geothermal/wind/solar energy— 80. 27%
• Geothermal plants— 12.62%
• Wind turbines— 7.1%

In the Nation of Portugal
The Portuguese quest for clean energy has achieved some important milestones. Recently, this small European country on the Atlantic shoreline managed to provide power for four days straight using only renewable energy sources. For the entire 107 hours, the nation of Portugal was sustained only by wind and solar power. This 4-day streak was the recent peak of their increasingly-promising clean power journey. Last year renewable sources provided 48% of Portugal’s total energy needs. Zero harmful emissions release is the goal.

In the United Kingdom
In the UK, governmental leaders and renewable energy industry leaders are hard at work to identify sustainable clean energy solutions. Researchers have seen some dramatic changes in solar power and wind energy usage. Unfortunately, the UK government has decided to halt the spread of onshore windfarms, primarily because of how expensive these installations were becoming.

Experts predict at least a one gigawatt — enough to light up 660,000 homes — loss in renewable energy generation within the next five years. After the ground-breaking investment in wind energy last year, several proposed construction projects will come to a halt.

That is the disappointing news. Investment in solar power, on the other hand, has slowly but steadily been increasing. Perhaps with the coming drop in government wind energy subsidies, the renewable energy finances will be redirected to encourage greater solar energy funding.

In Spain
If you visit the colorful lands of Spain, Portugal’s neighbor on the Iberian Peninsula, you’ll soon learn that electrical power is expensive. The country’s lack of natural resource blessings — such as deposits of oil, natural gas or coal — has spurred policymakers and industry leaders forward in the development of renewable energy. With this motivation to find less expensive, reliable energy sources, Spain is becoming known as a “Cradle of Renewable Energy.”

During the night time, wind energy fulfills 70% of Spain’s electricity needs, with a daytime record achievement of 54%. Over 29 million homes in Spain are currently powered by wind energy. However, wind energy is unpredictable, which makes forecasting key to sustainable clean energy. The Spanish firm Acciona consistently monitors the operations of 9,500 wind turbines at the Pamplona control center.

In Germany
The German nation’s quest for renewable energy has recently gained momentum. According to the Agora Energiewende think tank, Germany was able to supply nearly 100% of its energy needs with renewable sources for an entire day. Conventional power plants were able to supply 7.7 gigawatts at their energy output peak. As the country moves forward to phase out nuclear and fossil fuels, Germany’s cleaner power drive / quest narrows in on solar and wind power.

In China
Never a country to miss out on significant global trends, China has taken stock in its renewable energy resources. Aware of the need to combat climate change, China sets up new wind turbines at the astonishing rate of two every hour. According to the International Energy Agency (IEA), onshore wind and solar panels have increasingly been reduced in costs.

The IEA reported this decline as impressive, and they expect the trend to continue. With cheaper renewable energy options, the clean power usage trend will continue to take off, most industry expert agree.

The Rewards of Renewable Energy
The damaging effects of current levels of carbon dioxide emissions and the awareness of ever-limited natural resources are being felt around the world. The need for a better way to generate energy is clear. Given the recent trends of success, in a growing number of countries, solar and wind energy power sources are not going away any time soon. These renewable resources are the forecasted “superheroes” for continued (and significant) reduction in dangerous carbon emissions and energy source and supply security on a global scale.

That’s the good news to share today.

# # #

Allison Crady provides these links to the companies she serves as marketing specialist:
• http://www.cdfdistributors.com/
• https://www.fastpartitions.com/

Alison Crady

Guest Commentator Alison Crady

The NYT Brings Us Encouraging News in the Swelter of Negative Reports as Sustainability Advocates Consider Possible Changes of Course in the New Year for U.S. Federal Government Policies

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Leading Business readership publication focuses attention on the dramatic rise of ESG factors in investing over the past five years in wrap up story…

If you have not yet seen the story by Randall J. Smith that appeared in The New York Times Business Section on December 14th, we urge you to read it now, and to share it with your colleagues. Especially those occupants of the C-suite, board room, investor relations office — this will help to make the important case for ESG / sustainable investing. It’s our Top Story this week and the headline puts things in focus: investors are sharpening their focus on “S” and “E” risks to stocks.

This is a front page, Business Section [Deal Book] wrap-up feature that shares news, commentary and important developments at such organizations as MSCI, Vanguard, TIAA-CREF, Goldman Sachs, Perella Weinberg Partners, Rockefeller Brothers Fund, US SIF, Heron Foundation, Parnassus and other leaders in sustainable investing.

“Investing based on ESG factors has mushroomed in recent years,” author Randall Smith explains, “driven in part by big pension funds and European money managers, trying new ways to evaluate potential investments.”  The article helps those not yet familiar with sustainable investing to understand the increasing momentum in “sustainable” or “ESG” or “sustainable, responsible & impact” investing.

The organization MSCI is in sharp focus in the piece, with Linda-Eling Lee (the firm’s able head of global research) interviewed on the company’s approach to ESG research, ratings, equities indexes, and related work.  At MSCI, the assets managed using ESG approaches is now at $8 billion-plus — that’s triple the 2010 level.  ESG-related risks and opportunities are being closely evaluated as MSCI looks at publicly-traded companies, and as explained by the MSCI head of global research, 6,500 companies are followed by 150 analysts working in 14 global offices.

The recent US SIF survey results are heralded — $8.1 trillion in professionally-managed AUM assets in the U.S.A. are determined using ESG factors in analysis and portfolio management (the big driver is client demand).  The TIAA-CREF Social Choice Equity Fund is at $2.3 billion in assets under management — doubling in the past five years.  MSCI’s ESG indexes are at $3 billion — tripling over the past three years.  Vanguard’s social index fund is at $2.4 billion — quadrupling since 2011.  There’s a new CalSTRS low-carbon portfolio (using an MSCI index) set at $2.5 billion.

This article in the Business Section of a leading American daily newspaper provides an encouraging — and very timely! — look at the momentum that’s been building the capital markets signaling mainstream capital markets uptake and dramatic growth in adoption of ESG strategies and approaches for asset owners and asset managers.

As we suggest, it is a wonderful wrap-up of top-line developments in sustainable investing that also underscores the importance of corporate sustainability to individual institutional investors — and should help to make the investing and business cases for top management.

This news article is of course timely as corporate sustainability and sustainable investing professionals consider the potential changes on the horizon with a new administration and the new congress coming to town with a very different agenda – at least what has been publicly proclaimed to date.  There is clearly momentum in the capital markets for consideration of corporate ESG factors as investment dollars are being allocated.  This is good news heading into 2017 and the probable headwinds sustainability professionals will encounter.

Investors Sharpen Focus on Social and Environmental Risks to Stocks
(December 14, 2016)
Source: New York Times – Investing based on so-called E.S.G. factors has mushroomed in recent years, driven in part by big pension funds and European money managers that are trying new ways to evaluate potential investments. The idea has changed over the last three decades from managers’ simple exclusion from their portfolios of “sin stocks” such as tobacco, alcohol and firearms makers to incorporation of E.S.G. analysis into their stock and bond picks.

Barclays Researchers on “Green Bonds”: Small-but-steady Performance Benefits Possible, With Little Evidence of Negative Impact

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The investment community — especially fiduciaries — continues to have a flow of more “green” products being made available from a growing number of issuers and their intermediaries; these include “green bonds.”  Charting this trend, a team of Barclays managers and researchers issued a report as part of the “Barclays Impact Series.”  Their findings: ESG investing can have a positive effect on portfolios for institutional and individual investors.  There are small-but-steady performance benefits and no evidence of a negative impact for such investing.

Noted the report authors:  “In a world where concerns over climate change, pollution and issues of sustainability are ever more pressing, socially responsible investing has become an important consideration for a growing number of individuals and institutions.”

The researchers concluded that with this growth of “socially responsible” investing the idea that enjoying a financial return on investment while having a positive impact on society is attractive to a growing number of investors.  And investment in “green bonds” is one approach to attempt to accomplish that.  Different investors, of course, have different appetites for the embrace of ESG factors for their portfolio management.

Introducing ESG factors into the investment process can result in some measure of benefit for portfolios as investors consider the impacts of climate change, limits or constraints on natural resources, shifts in societal norms (such as expecting responsible supply chain management) — and the positive and negative effects on their portfolios.

One of the challenges for investors in assessing ESG investable products is that the typical accounting statements of the issuer (as an example) is not always sufficient for navigating in the new frontier of green bond investing.  The bonds being issued (say, for infrastructure) might typically might address E and S issues that are “non-financial” in the traditional management-speak or investor-speak.  Think of the impacts of climate change / global warming, pollution, energy conservation (the “E’s”) and numerous workplace issues (the “S”).

The Barclays’ Quantitative Portfolio Strategy team researchers determined that an Issuer’s “G” scoring may be more definable and measurable for potential investment outcomes; corporate governance has been an issue for issuer-investor discussion for decades longer than the typical societal (S) issue of more recent times.

In the study effort, taking the individual elements of ESG, the report authors found that “G” (corporate governance) issues can have the greatest impact on portfolio performance.  Green bonds with a higher “G” score apparently have the lowest credit downgrades than those with low G scoring.

The researchers examined bonds in the Bloomberg Barclays US Corporate Investment Grade Index and organized these in Low, Medium and High ESG scoring for their analysis.

The Barclays researchers were Albert Desclee, Lev Dynkin, Jay Hyman, and Simon Polbennikov — they are key players in the firm’s management corps.
There are more details available in the highlights presented in our Top Story. Click here for the presentation of the research results by Barclays.

Sustainable Investing Boosts Bond Portfolio Performance: Barclays Study
(Tuesday – November 29, 2016)
Source: Just Means – The study found that introducing ESG factors into the investment process resulted in a small but steady performance benefit.

At the CR Commit! Forum: Next Generation Sustainability Reporting Issue Table

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Juliet RussellBy Juliet Russell, G&A Institute GRI Data Reports Analyst

At the final session on the first day of the recent Commit! Forum’s conference in New York City, attendees broke out into “Issue Tables,” each focusing on different topics — ranging from Human Trafficking to 3rd Party [report] Assurance to STEM Education.

I joined the Next Generation Sustainability Reporting Issue table, where I sat among twelve experts, including the Vice President of Corporate Sustainability at MGM Resorts, the CEO of AdaptReady and the Global Head of Strategy at Thomson Reuters.  We shared knowledge and discussed ideas about the future of Sustainability reporting.

Highlights of our discussion:  First, the growing importance of sustainability reports was discussed, including (but not limited to) their importance as an information base for investors, helping to shape investment decisions.  Many investors are beginning to make decisions based on information disclosed publicly in corporate sustainability reports and are increasingly looking out for ESG (Environmental / Social / Governance) data.

We were encouraged to discuss recent advancements in Sustainability Reporting and the direction in which we expect it to head in.

Regarding frameworks, we expected more companies to be aligning with the GRI G4 report framework and also discussed the possible influence of the new modular GRI reporting standards, beginning this November, 2016.

SASB (Sustainability Accounting Standards Board) was a popular discussion within the group, as many felt this would become increasingly important in Sustainability reporting.

The UN Sustainable Development Goals (SDGs) also received a great deal of attention – being new goals (devised in 2014) for companies to align with and being more challenging than the UN Global Compact.  Many of us felt that Sustainability Reporting will be increasingly referring to, and based around, the UN SDGs.

Considering the content of the report, the group expected to see more companies committing to Science Based Targets.  These include ambitious greenhouse gas emissions (GhGs) reduction targets tailored individually for each company committed to help keep global warming below the COP21-agreed 2 degrees Celsius.  This includes communication about ‘best practices’ and scoring each of their main suppliers.

Many of us believed that stating that the materiality of the report content is foundational for these reports and so expected to see more of these types of references.  We also discussed that streamlining Sustainability information provided by a company, e.g. integrating Sustainability Reports into the Annual Reports; that should help to decrease audit fatigue and increases investment in the company and employees’ investment into their work.

Our table participants concluded that the future of sustainability reporting is likely to reflect the combination of influence of GRI, SASB and the SDGs. The final task was to come up with a “tweet” to convey the outcome of our discussion, we decided: “Future of sustainability reporting is a GRI+SASB+SDG sandwich. Yummy. #ReportingSandwich.”

Overall, I found this CR Commit! conference session to be very interesting and insightful. It was a really fun and interactive session, encouraging people from across industries with different experiences to share their opinions and ideas. I think every person around the table gained some knowledge and possibly also ideas for their own company with how to tackle their next, or first published, Sustainability Report.

G&A INTERNSHIP AVAILABLE – GRI Data Partner Reports Analyst

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Opportunity:  Learn to Analyze Data and Interpret Content from Global Reporting Initiative Sustainability Reporting

Position:  GRI Data Partner – Sustainability Report Analyst Internship Available

Location: Virtual (our offices are in NYC).  Work is done remotely with a flexible work schedule – at your own location.  Initial training via Web.

Time Requirements: Position requires approximately 10 hours a week and begins ASAP.  The timing of the work is flexible and can be done remotely for a majority of the time required.  The internship will take place starting in January 2017 and ending June 30th, 2017.

Description

Governance & Accountability Institute is a New York City-based company that specializes in research, communication, strategies and other services focused on corporate sustainability and corporate ESG performance (“Environmental, Social, Governance”) issues.  G&A is offering the opportunity for an internship for a qualified student interested in learning more about these topics.

This is a very fast growing area of interest to corporations and Wall Street interests.  The GRI reporting framework is the most widely used in the world for these types of reports.

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

GRI provides all companies and organizations with a comprehensive sustainability reporting framework that is the most widely used and respected around the world.  Currently thousands of global organizations use the GRI to report on their Environmental, Social, and Corporate Governance strategies, impacts, opportunities and engagements.  (www.globalreporting.org).  G&A Institute interns learn important elements about GRI reporting that can be used in their future work situations.

As the exclusive US, UK and Ireland data partner of the GRI, Governance & Accountability Institute’s role is to collect, organize, and analyze sustainability reports that are issued by corporations, public entities, not-for-profits and other entities in the United States, United Kingdom and Republic of Ireland for the benefit of all stakeholders.  In this role the analyst will work as part of a team to analyze these reports for inclusion in the largest global database of Sustainability reports, the GRI’s Sustainability Disclosure Database (database.globalreporting.org).

The Intern Opportunity

Learning to read, analyze, use, and structure data from reports using the GRI G3, GRI G3.1, GRI G4, GRI-Reference as well as NON-GRI corporate and institutional reports will comprise the majority of this assignment.  The research will also contribute to several published research reports on various trends in sustainability reporting which are widely referenced by media, academics, business, capital markets players and other important sustainability stakeholders.

The student(s) selected will have the opportunity to experience a fast-paced, highly-adaptive (and nurturing) culture in a small but growing company with a unique niche. This is a hands-on position with considerable learning opportunity for those headed for a career in corporate responsibility.

Applicants should demonstrate a strong background and keen interest in ESG and Sustainability issues and topics.   A plus: strong technical, communication, and organizational skills.  Basic skills in Excel and researching on Google are required. Applicants with writing and editing abilities will have preference.

Interested students should send a resume outlining education and skill sets. As an option, a one to two page introduction essay on what you would like to learn more about (in terms of your career goals), what your interests are, and anything else you feel may be relevant to the job/our organization will also be welcomed.    Samples of writing or research on sustainability or other topics are also a plus.

G&A interns get public recognition for their work in our published reports, on our web platform and in other ways. To see what other interns have been doing (and their backgrounds) check out the intern Honor Roll at http://www.ga-institute.com/about-the-institute/the-honor-roll.html

Contact Information
Louis D Coppola
Governance & Accountability Institute
New York, New York
Email lcoppola@ga-institute.com
Tel 646.430.8230 ext 14

Quo Vadis on Sustainability Issues in 2017 — As a New Administration & New Congress Come to Town?

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Are you holding your breath after the November elections?  Wondering where corporate sustainability or sustainable investing goes from here?  What our public sector positioning may be on issues of importance to the corporate or capital markets communities?

The author of the best seller, “Green to Gold” takes on the Quo Vadis questions regarding sustainability issues as President-elect Donald J. Trump builds and announces his management team, albeit with an unusual method that reminds one of the popular TV show, “The Apprentice.”

In the Harvard Business Review, author Andrew Winston posts that “sustainable business” will move ahead with or without the future Trump Administration’s support or involvement or interference.  Companies will continue on their sustainability journeys because macro forces are driving the movement, he believes.  And we can move forward even without the Federal government’s push (although that support and encouragement is always nice to have as the wind-at-our-backs).

There are five “mega-trends” at work here, author Winston offers up for us.  For example, if you want to install solar or wind power for your business, as a manager you should be encouraged that the cost to build is down by half or much more from prior levels.  (The wind-at-our-back here of course includes the very important public sector support for development of non-fossil-fuel generated power.)

Second, climate change is now well beyond theory, author Winston argues.  The CEO of Kellogg speaking at the Paris COP-21 meetings said for his company, “climate change is mission critical.”  Many other CEOs are publicly or privately thinking/expressing the same thoughts.  Climate-related weather shocks can seriously damage crops — and ripple through food, apparel, fuel and other industrial production.

Third, consider the huge Millennial generation — soon to be half of the global workforce — these men and women are not retreating from the sustainability advances made to date.  Almost 9-out-of-10 of this demographic cohort believes (Winston explains to us) that “…the success of a business should be measured in terms of more than financial performance…”  These Millennial generation men and women are rising fast to positions of power in industry (and in government, finance, NGO management, etc.). They are taking us in a different direction on key societal issues.

Number Four on his list: Social media today can quickly create fame and fortune — or disaster — for the company on the right side or the wrong side of important societal issues — like responsible management of supply chains, and acting responsibly on key social and environmental issues that our society now deems to be important (especially for popular brand marketers).

And then there is the breadth and depth of many governmental commitments for — and action taken on — climate change issues. There was great momentum coming out of the Paris meetings in Fall 2016 and on to the Morocco meetings concluded just days ago.  We are moving inexorably toward a low-carbon economy and many global public sector leaders — unlike the American President-elect’s campaign comments — do not believe “all of this” is a hoax (that is, generated by China). Indeed, as explained in our Top Story, even China has clearly delivered the message:  Climate Change, it’s not a hoax.

We invite your reading of the HBR commentary by Andrew Winston, and suggest that you share it with your colleagues (and especially the “anxious” folks in your circle). Andrew Winston is on target with his projections that the business community will continue to act even if the new Trump Administration does not take positive positions on critical societal sustainability issues.

In this, our weekly newsletter for you, we have added a section with an eye on sustainability issues, with focus on the November-December-January transition to the new executive branch leadership and the coming of the 115th U.S. Congress.  A great deal is at stake on decisions to be taken on many of our societal issues.  We are presenting for you a brief selection of the many news stories and commentaries being published that can help us to understand what may/or may not be in store — regarding the decisions and actions to be taken after January 20, 2017 with regard to sustainability issues.

Sustainable Business Will Move Ahead With or Without Trump’s Support
(Monday – November 21, 2016)
Source: Harvard Business Review – Will the seismic shift in U.S. political leadership have a chilling effect on corporate action around environmental and social issues? The short answer is no.