Selling in the Agora or Connecting Online – Consumer Products Companies Adapt to Growing Demand for Sustainable Products

June 20 2021  – Here we go shopping!

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

Selling “at retail,” both direct to consumers and through business partners to consumers in both digital and physical spaces, is a rapidly- changing (every day!) area of the North American economy.

Think of the upheavals in the once-staid and steady consumer retail marketplace in recent years.

Tiny Amazon came to life in summer 1994 in Washington State founded by a former Wall Streeter, Jeff Bezos. The first products offered were books (with human editors writing summaries!).

By 2020, the company had reached annual revenues of US$386 billion (up $38% over 2019) with net profits of US$21 billion (up 84% over 2019) – with an amazing array of products moving to consumers.

Amazon was the “go-to” retailer for many people in the sheltering-in-place days of the Covid pandemic. Need “it”? Chances are Amazon’s “got it” as the company’s inventory of products and methods of delivery have been dramatically expanding. And disrupting many other retailing organizations.

The largest U.S.-headquartered, “location-based” as well as remote order retail organization selling direct to consumers is Walmart, with 11,443 stores, 404 distribution centers and 2021 fiscal year sales of $559 billion worldwide.

Consider that Walmart is the largest retailer on the globe — including being the #2 digital retail marketer. All this from small beginnings as storefront stores in Arkansas founded by Sam Walton and family in 1962. By 1967, there were 24 stores with a healthy $12 million in annual sales.  Walton Stores morphed to “Wal-Mart Stores”.

Walmart today is also a business disrupter for many other retailing organizations and for companies in the middle all along the value chain from farm-to-factory-to-shelf and table. But there are other disrupters as well in the digital retail marketing space.

Top web-based retailers today include Apple (at #3, just passed by Walmart), Dell, Best Buy, Home Depot, Target, Wayfair, Kroger, and Staples.

In 2020, the U.S. Department of Commerce estimated that retail sales topped $4 trillion in the United States. While e-commerce grew by 44% to become $1-in-$5 of all retail sales, “in-store” sales still dominated the retail space.

There are more than one million retail establishments across the breadth of the U.S., and even the 50 top retailers with online presence operate stores (a hybrid model).

Fixed-space retailing is still very popular with consumers – “wandering the Agora” has been a favorite pastime for many of us since the classical times in ancient Greece and down through the ages.

The Athens agora was an important city and just part of the agora of settlements in Greece; this was the center of economic activity and the consumer marketplace for goods…as well as for sharing ideas.

Today’s huge malls are a sort of equivalent but minus the philosophers holding forth.

What about large consumer products companies selling to consumers in domestic and global marketplaces, mostly through value chain partners ranging from Walmart and Amazon to supermarket chains?

How are these companies managing their way through the embrace of sustainable products by a growing number of consumers?

We have selected three firms to look at this week who are leaders in terms of their corporate ESG profile: Kellogg’s, Colgate-Palmolive, and PepsiCo. Some top lines for you:

Kellogg’s is partnering with 440,000 farmers in 29 countries to promote climate, social and financial resiliency (this is the “Kellogg’s Origin” program). The company’s Kashi subsidiary began to partner with local growers (wheat, corn, rice, sorghum) to help transition from traditional farming to organic farming. The food manufacturer / marketers’ programs are outlined in the story from Baking Business (see link below).

Colgate-Palmolive is reporting on its corporate sustainability journey with updates on its “purpose” progress – re-imagining a healthier future for all people, their pets, and our planet.

News: 99 percent of Colgate-Palmolive products launched in 2020 have improved sustainability profiles – that should be attractive to this large company’s customers.

PepsiCo is a large multinational enterprise marketing beverages and snacks around the world. The company is coming out in support of the idea of better “environmental labelling,” as the European Union considers as part of its “Farm-to-Fork” strategy a sustainable food labelling framework. PepsiCo is generally on board, says its director of environmental policy, Gloria Gabellini, with the idea that consumers have the right to expect transparency from the producers.

And so – for consumer purchases in the digital space or taking place in a fixed location (the venerable physical storefront) – consumer products companies are recognizing the shift underway with many more buyers seeking “sustainable” products (especially for consumables).

These food, beverage, personal products, and related products are disrupting their own businesses to remake the model.

Think of retailing – including wandering the Agora of the 21st Century – as an ever-changing economic activity.

Free-range chicken for dinner tonight, anyone? Even farming practices considered “old” or traditional are coming back into vogue for consumers.

TOP STORIES

Corporate Progress

G7 Developments

The “G7” are heads of governments of the leading economies of the world – United States of America, France, Germany, United Kingdom, Japan, Italy, and Canada.

These sovereigns represent about 60% of global net wealth and almost half of global GDP. The European Union has representatives at the G7’s annual summit. G7 decisions influence the major economies of the world. So – these steps need to be monitored going forward:

Investors & Climate Change – Leading Institutions and their Growing Networks are Urging Expanded Corporate Disclosure

June 28 2021

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

What about the steadily-rising investor expectations for the corporate sectors’ climate change actions and expanded ESG disclosures?

We are able to more closely examine the rising expectations of leading asset owners/key fiduciaries and their asset managers to understand the investors’ views on the ESG / sustainability disclosure practices of issuers they provide capital to.

This includes keeping close watch on individual institutions and especially the collaborations of investment organizations they participate in.

For example, this news out of London: Some 168 investors hailing from 28 countries are now collaborating to urge companies with “high environmental impact” to use CDP’s system to disclose their environmental data.

And note:  The companies being targeted by investors represent US$28 trillion in market cap and emit an estimated 4,700 megatonnes (Mt) of carbon dioxide equivalent…every year.

The investor collaboration is part of CDP’s 2021 Non-Disclosure Campaign, created to put pressure on companies that have not disclosed their carbon emissions through CDP or have discontinued the practice. Beyond carbon concerns,

CDP and its collaborating investors and investor groups are also zeroing in on companies with forest or water security concerns. (Note that some firms disclose to CDP on one theme of concern to the investor but not others – some companies report on climate change but not on water or forestry issues.)

Targeted companies for investor action in the U.S. included at the “top of the As” are such firms as Apple, Amazon, Aramark, Abbott Laboratories, Activision Blizzard, Albemarle Corp, and Alliant Energy. In Switzerland, Alcon; in Sweden, Alfa Laval Corporate AB; in Canada, Allied Properties REIT; in Brazil, Ambev S.A.; in the U.K., Arrow Global Group. The complete list is available here for your searching.

The bold name asset management firms joining the CDP campaign for greater corporate disclosure this year include HSBC Global Asset Management, Legal and General Investment Management, Nuveen, and Schroders.

Investors supporting the campaign include asset managers and separate activist investor collaborations that are part of The Investor Agenda, which has produced a comprehensive framework recently for these investors (HSBC Global Asset Management, Legal and General Investment Management, Nuveen.)

This effort was founded by seven partners including Ceres, CDP, UN PRI, and UNEP Finance Initiative. In the United States, National Association of Plan Advisors, The Forum for Sustainable and Responsible Investing  (U.S. SIF) and Interfaith Center on Corporate Responsibility (ICCR) have joined the effort.

The approach is to set out “expectations” in four areas:

  • corporate engagement,
  • investment (managing climate risk in portfolio),
  • enhancing investor disclosure, and
  • policy advocacy (urging actions to drive to the 1.5C pathway). Part of this is an urging of governments to take action to address climate change, moving toward this year’s COP 26 gathering in Glasgow.

The CDP Non-Disclosure campaign is now in its fifth year, enjoying a 39% year-on-year growth in investor participation since the start in 2017, with investor participation up more than 50% since 2020.

This effort is part of a broad movement of investor participants and investor alliances aiming to drive change in the companies they provide capital to, as governments, investors and corporations adopt goals to be part of the societal move to achieve “Net Zero” by the year 2050.

These alliances include the Glasgow Financial Alliance for Net Zero (GFANZ), gathering signatories to set science-based targets (SBTs).

Members of GFANZ include 43 banks participating in the Net Zero Banking Alliance (NZBA). The United Nations convened the NZBA to aim for a carbon-neutral investment portfolio by mid-century and will leverage the CDP campaign to target specific companies not disclosing their environmental data.

The opportunity for corporate managements to respond to the CDP disclosure campaign and be eligible for scoring and inclusion in CDP reports is at hand; the CDP disclosure system is open until July 28, 2021.

Here at G&A Institute, our team is assisting our corporate clients in responding to this year’s disclosure request from CDP.

For corporate managers: If your firm received the CDP request for disclosure for 2021 and you have questions about responding, or about your responses in development, the G&A Institute team is available to discuss. Contact us at info@ga-institute.com.

The details of the CDP campaign and the broad investor network focused on climate change actions and disclosure is our Top Story selection for you here.

TOP STORIES

A record 168 investors with US$17 trillion of assets urge 1300+ firms to disclose environmental data (Source: CDP

And more on the ESG disclosure front:

House-Approved Legislation Would Mandate ESG Disclosures (Source: National Association of Plan Advisors)

What’s the plan? Corporate polluters lag on setting climate goals (Source: Reuters)

ESG Disclosure – Swirling Public Dialogue on Status & Value Today and in Future for Corporate Constituencies

JULY 1 2021

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

On corporate ESG / Sustainability / CR reporting – and third party assurance.  The trends?

The required financial reporting by publicly-traded companies is assured by third parties (accounting, auditing firms). In the U.S. SEC rules require public companies to have an annual audit; the audited financial statements have an opinion included from the auditing firms.

Objective: includes determining if the statement presents information fairly and in line with GAAP (Generally Accepted Accounting Principles).

What does the outside auditor do in the financial reporting process?

Explains Ed Bannen at BGQ Partners LLC in Ohio: The most rigorous level of assurance is provided by an audit. It offers a reasonable level of assurance that financial statements are free from material misstatement and conform with GAAP. 

But what about the growing volume of corporate ESG / sustainability / responsibility reports flowing out from corporate issuers to investors and other stakeholders? The “non-GAAP stuff” of ESG disclosure at present?

The International Federation of Accountants (IFAC) “warns” that only half of companies at most back up their sustainability reports with assurance (IFAC looked at 1400 companies).  This presents “an emerging investor protection and financial stability risk.”

There is “some” level of ESG reporting by 91 percent of companies in 22 governmental jurisdictions now, but reporting standards used are inconsistent and IFAC urges that assurance practices need to mature alongside corporate ESG reporting.

Of course, the accountants noted that often where there is ESG assurance provided it is not by professional accountants but by other types of consultancies.

We bring you background on this from CFO Drive: Investors representing literally tens of trillions of AUM are looking for consistent, comparable, decision-useful information to determine whether to invest, sell or make a proxy vote…

SEC Chair Gary Gensler was quoted saying:  Therefore, SEC staff will be recommending governance, strategy and risk management practices related to climate risk, and determine whether metrics such as GHG emissions are relevant for investor consideration.”.  Stay tuned to the SEC!

Summing up: the operating environment for leaders of publicly-traded companies is rapidly changing when it comes to ESG / sustainability, public disclosure and structured reporting. In both the U.S. and in the European Union, regulators are proposing dramatic changes in rules or appear to be in the process of developing guidance and rules. (Frequently in the U.S., SEC also issues interpretations that reflect important changes in policy thinking about reporting.)

We bring you four important updates on these public discussions going on in our Top Stories selections.

On a recent webinar hosted by our partner organization, DFIN Solutions, there were 1,000 professionals registered for the session. About half of the attendees answered a survey question about whether or not their firm publishes a sustainability report, with about half saying “no” or “did not know.”

Clearly there is an urgent need for more corporate managements to become informed about ESG disclosure.

Information about the webinar “Navigating the Corporate ESG Journey: Strategies & Lessons Learned Featuring FIS Global, IR Magazine’s 2020 Best ESG Reporting Award Winner,” co-hosted by G&A Institute’s EVP Louis Coppola is here: https://info.dfinsolutions.com/navigating-corporate-ESG-journey-replay

Useful background from Ed Bannen, Senior Manager of GBQ’s Assurance and Business Advisory Services regarding statement assurance, auditing and related topics is here for you:https://gbq.com/levels-of-assurance-choosing-right/

Top Story/Stories – Reporting, Assurance and More in Focus

Crystal Clear Now – ESG Focus Must Be at the Top of the Corporation, for the Board Room & Executive Suite

July 2021

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

Remember those 1970s /early ‘80s ubiquitous TV commercials with the tag line, “When EF Hutton Speaks, People Listen?” The point was that when the EF Hutton financial services firm “said” something about investing possibilities, we would be wise to sit up and listen carefully to the advice.

These days we are tuning in to the Securities & Exchange Commission to discern the future directions of corporate sustainability / ESG disclosure. To us it is clear: the broadening flow of comments indicates something is about to happen regarding corporate ESG disclosure.

Prime example: the keynote address of former Acting Chair and current Board Member Commissioner Allison Herren Lee, sharing important points of view with those gathered at the Society for Corporate Governance 2021 National Conference. Herren Lee put ESG in the context of the recent proxy season for the corporate secretaries (who are on the front lines of the proxy voting).

2021 proxy season shareholder proposals included those focused-on climate change. Manufacturing giant General Electric saw 98% of shareholders voting to approve a proposal for disclosures on how the company would achieve Net Zero.

At ConocoPhillips, 58% of shareholders approved a measure to have the large fossil fuel firm achieve Scope 3 emissions reductions. At United Air Lines, 65% voted in favor of a resolution to have the transport giant provide more information about how its lobbying efforts align with the goals of the Paris Agreement.

Said the influential Commissioner (“D” members now are the agency’s board majority) about the backdrop of these types of resolutions coming from the providers of capital: “This is a broad reckoning with the need for advanced transparency on sustainability…also occurring amid ever-more powerful signals from major institutional investors of their commitment to sustainability.”

Commissioner Herren Lee talked about top-of-mind issues for board rooms and C-suites for mid-year 2021 (six months into the Biden-Harris Administration) on the “climate change crisis”: board challenges — climate, racial injustice, economic inequality, corporations and social & economic well-being of people and communities); public input on climate change disclosures; mitigating risks and maximizing ESG opportunities; enhancing board diversity; increasing board expertise; inspiring management success; public pledges on ESG issues that are actually backed by corporation action…and much more.

The Commissioner explained that the SEC itself is “listening” as well to the “thousands of comments in response to the request for public input on climate change disclosures.”

There is much more in the Commissioner’s comments to the corporate secretary universe that we bring to you in this post (including 58 footnotes). Safe to say these days – in board rooms and executive suites, when the SEC leaders speak, many in the corporate sector and capital markets are indeed listening.

Two related items are also on top for you. One is a recap from GreenBiz about this year’s “angst-filled proxy year” and another from Bloomberg Law about corporate leaders calling on their law firms to help “navigate the world of ESG governance.”

Here at G&A Institute, since the time of our founding 15 years ago, as the “ESG lockup” was coming together, we have advised that it could be “GES” – the governance (“G”) of the “E” and the “S” is a critical task up top of the organization…the details of this are neatly spelled out in abundance in the SEC Commissioner’s keynote address and in the many items that we bring you each week. If you are not already sharing these with board room and C-suite, please consider doing that!

Top Stories

Focus on European Green Deal & “Fit for 55” Approaches – Impacts Will Be Far Beyond the European Continent

August 2021

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

The European Union is a collaborative effort of 27 sovereign nations on the continent organized to marshal the resources and collective capabilities of these member states to address economic, military, trade, travel, and other important issues.

The EU grew out of early post-WWII efforts to create a “common market” on the continent and to encourage closer peacetime relations among the disparate nations and cultures of western Europe.

The initial focus on economic issues has considerably broadened in recent years and ESG issues including climate change, GHG emissions, and carbon credits are very much in focus for the EU and its members in 2021.

The European Commission is the EU’s executive arm that addresses long-term strategies, sets the priorities agenda, and implements rules, policy changes, directives, and other measures.

They set six important priorities for the period 2019-2024:

(1) the European Green Deal, a set of climate action initiatives;

(2) a Europe “fit” for the digital age;

(3) an economy that works for people;

(4) a stronger Europe in the world;

(5) protecting the European way of life; and

(6) a new push for European democracy.

The challenges of climate change run throughout the six priorities but are addressed in the greatest detail in the European Green Deal.

The European Green Deal is an ambitious package of measures designed to address climate change and environmental degradation, which the European Commission has identified as existential threats to Europe and the world. Consider these ambitious goals:

  • No net emissions of GHG by 2050, to make Europe the world’s first climate-neutral continent.
  • Economic growth to be decoupled from resource use.
  • No person/place left behind.
  • 8 trillion Euros to be invested in the NextGeneration EU Recovery Plan.

In July, the European Commission adopted proposals to reduce net GHG emissions by 55% or more by 2030, compared to 1990s levels.

This is the “Fit for 55” package that includes policies on climate, energy, transport, and taxation that could affect many business enterprises as well as sovereign governments within Europe and around the globe.

It would be wise for all of us to consider the impact of these initiatives beyond Europe – in just one example, in 2023 all importers to the EU will have to submit declarations annually on the carbon emissions attributable to their imported goods, and after 2026 importers will need to surrender certificates for those emissions.

There are many more details to consider, and our Top Stories for you this week (as well as many of our content silos in the Highlights) provide important details about what is happening as the European Green Deal policy concepts move forward.

If you have questions, the G&A team is available via email at info@ga-institute.com. We’re closely following ESG/sustainability topics and issues in Europe and around the world and advising our clients on developments that could affect their organizations in the short- and long-term.

TOP STORIES

EU’s “Fit for 55” Climate Policy

The EU Has Led on Adopting Corporate ESG Disclosure Rules – The U.S. May Catch Up Soon

July 2021

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

For many years, the European Union moved ahead of the U.S.in developing laws, regulations and rules to address the challenges of climate change and require the expansion of corporate programs and still voluntary related reporting by corporations for their ESG issues.

In the U.S., the major regulatory bodies — Securities & Exchange Commission, the Federal Reserve System and its regional banks, the Treasury Department and other cabinet level and independent agencies avoided mandating disclosure rules for publicly-traded corporations (for many social/S and environmental/E issues).

That is changing more recently with new leadership at the SEC, the Fed, Treasury, and other agencies as the Biden-Harris Administration continues to move forward with a “Whole of Government” approach to meeting climate change crisis challenges. (This is outlined in a May 2021 Executive Order.)

The U.S. could quickly catch up to the EU and even pass Europe with rigorous national corporate ESG reporting requirements – maybe in 2021 or 2022.

The EU is not sitting still, though. In 2014 there was an Accounting Directive developed at the confederation level and adopted in each of the (then 28) member countries to require large companies to disclose the way they operate and manage social and environmental challenges (this is the “Non-Financial Reporting Directive” or NFRD). Social topics include treatment of employees, respect for human rights, anti-corruption, bribery, and diversity on boards.

This directive was amended in June 2019 with supplements/guidelines for companies to report on climate-related information – applying to listed companies, banks, insurance companies and other entities “designated by national authorities as public-interest entities”); this covers about 11,700 large companies and groups across Europe.

In April 2021, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD) to amend the existing requirements that would extend NFRD to cover all large companies and all companies listed on regulated markets.

The proposed new standards, targeted for adoption by 2022, will require an audit (assurance) of reported information, which would have to be tagged and machine readable to feed into the “capital markets union action plan.” In addition, more requirements will be added to the NFRD rules, which would lead to adoption of European-wide (EU) sustainability reporting standards.

Consider the dramatic impact the actions of the European Union and the United States could have in their respective territories and across other regions:

  • The EU consists of 27 independent sovereign states located on the continent, with collective population of 448 million souls (2020) and combined GDP of US$16.6 trillion (about 1/6th of the global economy).
  • The U.S. has population of 331 million and GDP of US$21 trillion (almost 20% of global economy).
  • The U.S. has almost 6,000 publicly-traded companies in 50 states, according to The Global Economy.com. The average for the EU in 2020 (based on 18 countries examined) was 347 companies per country (where data were available). The largest number of companies listed on a stock exchange in the EU is Spain with 2,711 entities.

We bring you more news from Europe as the “ESG movers and shakers” move ahead with still more dramatic moves to address ESG topics and issues.

And we are watching dramatic moves by the Federal government of the U.S. as well as those actions of the states, cities, and municipalities to address climate change challenges and create greater transparency of involved entities across the corporate, public, and social sectors.

Bringing Your Attention To:

Webinar: BI Analyst Briefing: Global ESG 2021 Mid-Year Outlook
ESG’s momentum continues in 2021 as renewed policy support and increased shareholder engagement propels growth. While climate remains in focus, new risks like cybersecurity emerge. As the ESG asset class grows and regulators increase scrutiny, greenwashing concerns remain in focus. Join Bloomberg Intelligence Analysts on July 21st for a Mid-Year Outlook on Global ESG.  Register here 

TOP STORIES

EU unveils ‘gold standard’ sustainable finance strategy to cut greenhouse gas emissions (Source: CDSB)

New European sustainable finance strategy gives hints on mainstreaming sustainable finance through global standards and frameworks (Source: CDSB)

GRI welcomes role as ‘co-constructor’ of new EU sustainability reporting standards (Source: GRI)

ESG Reporting Frameworks & Standards – Continue to Multiply

Original:  October 14 2021

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

The number of ESG disclosure and reporting guidelines, frameworks and standards continues to expand – here comes the GRI Universal Standards, the SASB XRBL Taxonomy, and much more.

The range of available transparency tools is making it more challenging for corporate management and investors to navigate.

The ESG / Sustainability / Sustainable Investing lexicon for both publicly-traded companies and their providers of capital is today chock-a-block with acronyms and initials. GRI, SASB, TCFD, OECD, IIRC, SDG, PRI, UNGC, GRESB, WEF, IFRS, EFRAG, EC’s NFRD – you get the picture!

And there are a host of industry-focused standards (such as RBA, once known as EICC), IEPC, LEED).

The venerable player is the Global Reporting Initiative (GRI), a comprehensive, ever-expanding, stakeholder-focused reporting framework created by global stakeholders over two decades ago with roots in Boston, in the Ceres Pledge of the early-1990s.

That pledge was created by SRI investors after the Exxon Valdez oil tanker disaster in Alaska and was intended to invite corporate managements to promise to do better in what is now ESG performance.

The first two signatories of significant size were General Motors and Sun Oil. G&A team members were involved in encouraging firms to sign on to the pledge in those early years.

By 1999-2000 the first corporate environmental, responsibility, et al reports were being published in the United States and Europe (a few dozen appeared in the first round with the first generation of the GRI framework, G1).

Over the ensuing years the GRI framework evolved and matured on through G3, G4 and finally in recent years to a more formal standards-based approach. And those modular standards for ESG reporting are continuing to evolve as GRI enters its third decade.

The news today about GRI is focused on the launch of what are called “Universal Standards”, which in modular form will be in place for corporate and institutional reports to use if they are going to report in accordance with the GRI Standards.

The now-familiar Core and Comprehensive will go away; it will still be OK to use “GRI-Referenced” (a less strict version which references parts of the GRI reporting standard) in reporting following the Universal Standards, which will go into effect in January 2023.

The new GRI Universal Standards align with the United Nations Guiding Principles on Human Rights, the OECD Governance Standards, and the International Corporate Governance Network (ICGN).

The elements of the Universal Standards to keep in mind are these: what is the impact of the corporation on society, and society on the corporation; materiality of disclosures; due diligence on the part of reporters.

Keep in mind the standards are broad and focused on stakeholder disclosure, of course including providers of capital as stakeholders. All companies can use the Universal Standards to communicate the firm’s impact on the broader society. (Think: how does your firm connect with people?)

Supply chain operations are an important part of GRI reporting going forward. Consider, as one expert recently explained, that of the large, multi-national enterprises of the developed world, more than 90 percent of production is beyond the company’s walls, out there in the world of non-company producers (many in less-developed nations as well as in China).

The European Union is considering adopting corporate sustainability reporting that would use the GRI Universal Standards for mandated disclosure by all companies operating in the 27 EU states (with certain qualifications as to size and other considerations).

GRI standards-focused disclosure is expected to include story-telling and metrics about corporate sustainability actions and activities, governance, strategies, planning, practices, engagements, and more. Materiality assessment activities are critical elements of GRI standards reporting, notes the GRI team.

In addition, GRI is launching a series of Sector Specific guidance, beginning with the new “Sector Standard for Oil and Gas.”

The sector standards will address “how decision and actions of companies address widespread stakeholder concerns about their climate change-related impacts, while ensuring a just transition for workers, communities and the environment”.

We are sharing details of the above developments at GRI with you in the Top Stories this issue.

The G&A Institute team has been focused intently on GRI reporting since 2000 and was designated as the GRI Data Partner for the U.S., and then the U.K. and Republic of Ireland more than a decade ago.

Over this decade, we’ve gathered and analyzed in depth thousands of GRI reports since then. G&A Institute is a Community Member of GRI, and we of course watch the work of GRI very closely.

Whether you are a corporate manager, executive or board member, or provider of capital to the corporate sector, you should also keep a close watch on GRI.  And, the G&A team is available to help answer any questions you have.

TOP STORIES

Stories from the Son of a Vietnamese War Refugee

By Gia Hoa Lam, G&A Institute Sustainability Reports Research Analyst Intern

Vietnam in 1982 can only be described as turbulent. My father, Loi, who had grown up during the war witnessed his family’s wealth disappear under the communist regime and the death of his first wife to tuberculosis. Faced with low prospects for the future, my father looked to America for opportunity—but this journey would not be easy.

From the 1970s to 2000, Vietnamese war refugees escaping by boat totaled one to two million — with an estimated 200,000 to 400,000 dying on the journey from being lost at sea, starvation, pirate raids, and storms.

Loi took some of his family’s remaining wealth in gold, bought a boat with several other refugees, and attempted to escape. He was caught, jailed, and had his gold confiscated. Unfazed by this setback, Loi attempted again—only to repeat being caught, jailed, having his gold confiscated. On his third, my grandmother—desperate to aid her son—went to the town fortune teller for guidance. The fortune teller told her to take the picture of Loi’s first wife out of his wallet because her spirit was holding him back in Vietnam.

This third attempt was Odyssean. This boat of refugees did not have a captain and so Loi was chosen to be the navigator because he was one of the few young men onboard. With only the speedometer, a map, and a compass, my dad steered a boat for the first time with dozens of refugees on a thirty-foot fishing trawler.

A typhoon left Loi at the wheel for 24 hours as massive waves threatened to capsize the boat. The boat was lost at sea for two days following the storm before a container ship managed to spot their vessel. If they had drifted at sea any longer, they would have sailed past the Philippines into the open ocean, far away from land or help.

The container ship brought the refugees to a Malaysian Red Cross camp from where Loi was able to immigrate to the United States. He found a job in the Bronx, NY as a pizza delivery driver before finding stable work as a machine operator. Loi enjoys karaoke and watching How It’s Made. His favorite singer is Michael Jackson.

I didn’t know about my dad’s immigration story until I was 16 years old. Part of me believes it was borne out of trauma rather than a means of shielding me from fearing the world. For most of my life, I had only known my father for his work ethic, strict sense of discipline, and distrust of others. Knowing the journey he took and the life he lived prior to meeting my mother provided the context to why he was so protective of us and why the pressure for success was so high for me and my brothers.

The sentiment for high expectations and low tolerance for deviance is shared among many Asian immigrants as the model minority myth. Oftentimes used to drive a wedge between Asians and other people of color, the narrative that Asian-Americans outperform other minorities because of their diligence and assimilation is a false dichotomy. The model minority myth turns stories such as my dad’s into ammunition for racial division, it fails to recognize the generational and systemic discrimination of black and indigenous people of the United States still perpetuated today.

Redlining and zoning laws have powerful effects on communities, leaving massive wealth gaps between races and ethnicities. Even in liberal regions like Boston, the average net wealth of white residents is $247,500, compared to the average net wealth of black residents, $8. Marginalized communities are often last to receive infrastructure, access to recreation, public transportation, and policy consideration.

Not only does the model minority myth simplify the nuances of systemic racism in the United States, but also it treats Asian immigrants as a homogenous group. Asian-Americans have the largest income distribution in the U.S. with median incomes for Indian-Americans at $119,000 compared to $44,000 for Burmese-Americans.

In Boston’s Chinatown, a vast majority of residents make between $14,000 and $30,000 a year. Drawing these divisions between minorities also deteriorates the collaborative work being done to uplift and support each other’s community.

In 1978, Bayard Rustin, a black civil rights activist bought an ad the in The New York Times with the signatories of 80 black civil rights activists publicly stating their support and campaigned for the admission of Southeast Asian refugees. In Rustin’s 1978 plea to the American public, he stated,” the black struggle for freedom is intimately linked with the universal struggle for freedom, whether it be in South Africa, the Soviet Union, or Indochina.”

Two years later, the Refugee Act of 1980 codified a means for war refugees, such as Loi, to immigrate to the U.S.

Today, I watched a video of Afghan refugees chase after evacuating planes on the Kabul tarmac. A sight eerily similar to the fall of Saigon. 40 million peoples are displaced annually because of conflict, violence, and disasters. My dad’s story is one of millions, and one of the few with a happy conclusion. My dad’s story is equally about strength and courage as it is about sound policy and global cooperation.

While I have told you the story of a Vietnamese war refugee, I have not told you mine. My goal in life is to show our increasingly polarized world that we have the capability for collaborative and compassionate action. My family’s struggle for freedom is therefore intimately linked with Afghanistan, Syria, and Palestine. I urge everyone to recognize the debt we owe to each other and our duties for compassion in the face of the universal struggle for freedom.

This article was originally published in Columnas – The Honors Program Newsletter at Bentley University in Fall 2021.

ABOUT AUTHOR
Gia Hoa Lam,
G&A Sustainability Reports Research Intern
Gia Hoa Lam, a G&A Institute Sustainability Reports Research Intern, is currently pursuing a B.S. in Economics-Finance and Sustainability with a minor in Public Policy at Bentley University. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated Bentley 2026 Sustainability & Climate Action Plan, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassion and collaborative change.

Attention Finance Officers – The Sustainability Journey & The Company’s Bottom Line

Original:  September 2021

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

When corporate managers talk about their company’s ESG and sustainability efforts it is most often now in the context of “telling the story of our corporate sustainability journey.”

The hallmarks of this journey are typically about the continuous improvement in the enterprise’s ESG performance indicators and ever-increasing and more robust disclosures to inform investors and other stakeholders that this (is indeed!) a most sustainable company..

G&A Institute began tracking the ever-expanding reporting of sustainability journeys by mainly publicly-traded companies in the S&P 500 Index in 2011, when we determined that about 20 percent of those firms published a formal sustainability or corporate responsibility report.

That percentage grew quickly to 50% and on to 70% and to the current 90% of the 500 companies over a decade. As we analyzed the data and narrative that was being shared, it became clear that the corporate financials were an increasingly important element of the company’s ESG story.

The World Economic Forum (WEF) is talking about that now; the WEF posits that there is growing evidence that strong ESG credentials can improve the corporate bottom line, improve access to capital, and lower the cost of capital.

The WEF recommends that corporate CFOs should take on the responsibility of aligning their company’s ESG and financial goals. (Until recently, WEF points out, the CFO would not have included sustainability in an analysis of what affects the bottom line.)

The WEF points to evidence of a strong correlation between financial and ESG performance.

There are cost savings in reducing energy usage, more efficient use of resources, and new business opportunities presented.

Deloitte predicts that by 2030 (only 400+ weeks away), organizations committed to sustainability as embodied in the Sustainable Development Goals will generate US$12 trillion in savings and gain of new revenues (for energy, cities, food, and health).

In our Top Story we’re sharing the WEF’s perspectives as authored by CEO and Executive Director Sanda Ojiambo of the UN Global Compact.

There are examples of “better outcomes” when CFOs embrace sustainability – Enel of Italy, Tesco of UK, Chanel of France. These firms issued sustainability-linked bonds to raise capital. JP Morgan predicts that bonds linked to the issuer meeting environmental goals could reach US$150 billion by the end of this year.

The UN Global Compact organized a “CFO Taskforce” in December 2019 to engage CFOs worldwide; to integrate the SDGs into corporate strategy, finance, and IR; and, to create a broad, sustainable finance market.

There are 50 members in the task force today; the aim, CEO Sanda Ojiambo writes, is to have 1,000 members by 2023.

The shift of corporate business models from focusing primarily on shareowners and short-term expectations to “broader, more sustainable, and equally profitable alternatives” is creating more opportunity for the finance executive to become more instrumental in helping to shape a sustainable future, she writes.

In the G&A team’s conversations with corporations about sustainability topics and issues, the good news is that many more finance and investor relations executives are an important part of the conversations and decision-making about their firm’s sustainability reporting and are focused on the disclosure and organized reporting of their firm’s ESG efforts.

We’re including a report from Entrepreneur about the growth of Sustainability Investing from 2019 to 2020. And, to underscore the importance of sustainability-linked corporate bonds, two other items: the news from Eli Lilly of its issuance of a €600 million sustainability bond; and Walmart will issue a US$2 billion sustainability bond (first for the largest retailer in the U.S.).

TOP STORIES

Warnings! – World Scientists Raise Red Flags on the Climate Crisis in IPCC Report

August 2021

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

Superstorms with drenching downpours.  Wildfires consuming vast stretches of western-lands forest in the U.S. and parts of Europe. Hurricanes coming ashore in both Atlantic and Pacific Oceans with devastating effects, during and after the storm.  Once-in-a-hundred-year weather occurrences happening last year and the year before and…

The signs of climate change are now everywhere and all at once. The careful analysis of what all of this means to the future of human life, flora and fauna, the land, the seas, our atmosphere, are being made abundantly clear.

We need to continue  increasing our understanding of what is happening and what we have to do to meet the challenges of what President Joe Biden has positioned as “the climate crisis”.

The latest body of evidence comes to us now in summary form from the Intergovernmental Panel on Climate Change (IPCC).

This is the United Nations body organized in 1998 by the UN and the World Meteorological Organization (WMO) to analyze and assess the science information that the public sector needs at all levels, in all locations, to create and manage their climate-related policies. There are 195 organizational members of the IPCC — and literally thousands of scientists and experts who contribute to the organization’s work.

Many scientific papers are published each year by IPCC volunteers and a comprehensive summary is published from time-to-time (the “Synthesis Report”).  The sixth assessment (AR6) will be published in 2022.  The world’s scientists are not waiting for next year to publish grave warnings for humankind.

There are three parts to the ongoing efforts of the IPCC:

(1) Working Group I, on Physical Science of Climate Change;

(2) Working Group II, Impacts, Adaptation and Vulnerability: and

(3) Working Group III, Mitigation of Climate Change.

There is also a Task Force on National Greenhouse Gas Inventories (TFI).

These groups are busily contributing now to the planned publication of the Sixth Assessment Report (AR6) next year.  IPCC is sharing dramatic findings on an urgent basis right now to help broaden public understanding of the climate change crisis.

We are bringing you news and background of the Working Group summaries and other findings that IPCC is sharing.  Warning:  Reading the news and opinion and perspectives shared is scary stuff, indeed!  And there will be more news and commentaries to come as we move toward the COP 26 climate change leaders’ gathering in November in Glasgow, Scotland.

The G&A Institute team has been sharing many research findings, news and commentaries about the growing dangers inherent in climate change since our founding in 2007.

Our G&A Sustainability Highlights newsletter is now well beyond its 500th issue, and has been content shared in the thousands to help broaden understanding about climate change issues.

This blog post is a brief but solid recap for you of the latest news centered on the IPCC summary (as we outlined in an August newsletter). Stay Tuned for more to come, and please contact us with any questions about what your company can be doing to prepare for the future.

Top Story/Stories