How the climate crisis will crash the economy

September 14, 2020 by  
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How the climate crisis will crash the economy Joel Makower Mon, 09/14/2020 – 02:11 The chickens are coming home to roost. Even before the western United States became a regional inferno, even before the Midwest U.S. became a summertime flood zone, even before an annual hurricane season so bad that the government is running out of names to attach to them, even before Colorado saw a 100°F heatwave swan dive into a 12? snowstorm within 48 hours. Even before all that, we’d been watching the real-world risks of climate change looming and growing across the United States and around the world. And the costs, financially and otherwise, are quickly becoming untenable. Lately, a steady march of searing heat, ruinous floods, horrific wildfires, unbreathable air, devastating hurricanes and other climate-related calamities has been traversing our screens and wreaking havoc to national and local budgets. And we’re only at 1°C of increased global temperature rise. Just imagine what 2° or 3° or 4° will look like, and how much it will cost. We may not have to wait terribly long to find out. It’s natural to follow the people impacted by all this: the local residents, usually in poorer neighborhoods, whose homes and livelihoods are being lost; the farmers and ranchers whose crops and livestock are withering and dying; the stranded travelers and the evacuees seeking shelter amid the chaos. And, of course the heroic responders to all these events, not to mention an entire generation of youth who fear their future is being stolen before their eyes, marching in the streets. So many people and stories. But lately, I’ve been following the money. The financial climate, it seems, has been as unforgiving as the atmospheric one. Some of it has been masked by the pandemic and ensuing recession, but for those who are paying attention, the indicators are hiding in plain sight. And what we’re seeing now are merely the opening acts of what could be a long-running global financial drama. The economic impact on companies is, to date, uncertain and likely incalculable. The financial climate, it seems, has been as unforgiving as the atmospheric one. Last week, a subcommittee of the U.S. Commodity Futures Trading Commission (CFTC) issued a report addressing climate risks to the U.S. financial system. That it did so is, in itself, remarkable, given the political climes. But the report didn’t pussyfoot around the issues: “Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy,” it stated, adding: Climate change is already impacting or is anticipated to impact nearly every facet of the economy, including infrastructure, agriculture, residential and commercial property, as well as human health and labor productivity. Over time, if significant action is not taken to check rising global average temperatures, climate change impacts could impair the productive capacity of the economy and undermine its ability to generate employment, income and opportunity. Among the “complex risks for the U.S. financial system,” the authors said, are “disorderly price adjustments in various asset classes, with possible spillovers into different parts of the financial system, as well as potential disruption of the proper functioning of financial markets.” In other words: We’re heading into uncharted economic territory. Climate change, said the report’s authors, is expected to affect “multiple sectors, geographies and assets in the United States, sometimes simultaneously and within a relatively short timeframe.” Those impacts could “disrupt multiple parts of the financial system simultaneously.” For example: “A sudden revision of market perceptions about climate risk could lead to a disorderly repricing of assets, which could in turn have cascading effects on portfolios and balance sheets and therefore systemic implications for financial stability.” Sub-systemic shocks And then there are “sub-systemic” shocks, more localized climate-related impacts that “can undermine the financial health of community banks, agricultural banks or local insurance markets, leaving small businesses, farmers and households without access to critical financial services.” This, said the authors, is particularly damaging in areas that are already underserved by the financial system, which includes low-to-moderate income communities and historically marginalized communities. As always, those least able to least afford the impacts may get hit the hardest. This was hardly the first expression of concern about the potentially devastating economic impacts of climate change on companies, markets, nations and the global economy. For example: Two years ago, the Fourth National Climate Assessment noted that continued warming “is expected to cause substantial net damage to the U.S. economy throughout this century, especially in the absence of increased adaptation efforts.” It placed the price tag at up to 10.5 percent of GDP by 2100. Last month, scientists at the Potsdam Institute for Climate Impact Research said that while previous research suggested that a 1°C hotter year reduces economic output by about 1 percent, “the new analysis points to output losses of up to three times that much in warm regions.”’ Another report last month, by the Environmental Defense Fund, detailed how the financial impacts of fires, tropical storms, floods, droughts and crop freezes have quadrupled since 1980. “Researchers are only now beginning to anticipate the indirect impacts in the form of lower asset values, weakened future economic growth and uncertainty-induced instability in financial markets,” it said. And if you really want a sleepless night or two, read this story about  “The Biblical Flood That Will Drown California,” published recently in Mother Jones magazine. Even if you don’t have a home, business or operations in the Golden State, your suppliers and customers likely do, not to mention the provenance of the food on your dinner plate. Down to business The CTFC report did not overlook the role of companies in all this. It noted that “disclosure by corporations of information on material, climate-related financial risks is an essential building block to ensure that climate risks are measured and managed effectively,” enabling enables financial regulators and market participants to better understand climate change’s impacts on financial markets and institutions. However, it warned, “The existing disclosure regime has not resulted in disclosures of a scope, breadth and quality to be sufficiently useful to market participants and regulators.” An analysis by the Task Force on Climate-related Financial Disclosure found that large companies are increasingly disclosing some climate-related information, but significant variations remain in the information disclosed by each company, making it difficult for investors and others to fully understand exposure and manage climate risks . The macroeconomic forecasts, however gloomy, likely seem academic inside boardrooms. And while that may be myopic — after all, the nature of the economy could begin to shift dramatically before the current decade is out, roiling customers and markets — it likely has little to do with profits and productivity over the short time frames within which most companies operate. Nonetheless, companies with a slightly longer view are already be considering the viability of their products and services in a warming world. Consider the recommendations of the aforementioned CFTC report, of which there are 20. Among them: “The United States should establish a price on carbon.” “All relevant federal financial regulatory agencies should incorporate climate-related risks into their mandates and develop a strategy for integrating these risks in their work.” “Regulators should require listed companies to disclose Scope 1 and 2 emissions. As reliable transition risk metrics and consistent methodologies for Scope 3 emissions are developed, financial regulators should require their disclosure, to the extent they are material.” The Financial Stability Oversight Council “should incorporate climate-related financial risks into its existing oversight function, including its annual reports and other reporting to Congress.” “Financial supervisors should require bank and nonbank financial firms to address climate-related financial risks through their existing risk management frameworks in a way that is appropriately governed by corporate management.” None of these things is likely to happen until there’s a new legislature and presidential administration in Washington, D.C., but history has shown that many of these can become de facto regulations if enough private-sector and nongovernmental players can adapt and pressure (or incentivize) companies to adopt and hew to the appropriate frameworks. Finally, there is collaboration among the leading nongovernmental organizations focusing on sustainability reporting and accountability. And there’s some news on that front: Last week, five NGOs whose frameworks, standards and platforms guide the majority of sustainability and integrated reporting, announced “a shared vision of what is needed for progress towards comprehensive corporate reporting — and the intent to work together to achieve it.” CDP , the Climate Disclosure Standards Board , the Global Reporting Initiative , the International Integrated Reporting Council and the Sustainability Accounting Standards Board have co-published a shared vision of the elements necessary for more comprehensive corporate reporting, and a joint statement of intent to drive towards this goal. They say they will work collaboratively with one another and with the International Organization of Securities Commissions, the International Financial Reporting Standards Foundation, the European Commission and the World Economic Forum’s International Business Council. Lots of names and acronyms in the above paragraph, but you get the idea: Finally, there is collaboration among the leading nongovernmental organizations focusing on sustainability reporting and accountability. To the extent they manage to harmonize their respective standards and frameworks, and should a future U.S. administration adopt those standards the way previous ones did the Generally Accepted Accounting Principles, we could see a rapid scale-up of corporate reporting on these matters. Increased reporting won’t by itself mitigate the anticipated macroeconomic challenges, but to the extent it puts climate risks on an equal footing with other corporate risks — along with a meaningful price on carbon that will help companies attach dollar signs to those risks — it will help advance a decarbonized economy. Slowly — much too slowly — but amid an unstable climate and economy we’ll take whatever progress we can get. I invite you to  follow me on Twitter , subscribe to my Monday morning newsletter,  GreenBuzz , and listen to  GreenBiz 350 , my weekly podcast, co-hosted with Heather Clancy. Pull Quote The financial climate, it seems, has been as unforgiving as the atmospheric one. Finally, there is collaboration among the leading nongovernmental organizations focusing on sustainability reporting and accountability. Topics Finance & Investing Risk & Resilience Policy & Politics Climate Change Featured Column Two Steps Forward Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Shutterstock

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How the climate crisis will crash the economy

Built to Last: The Case for Durable Design

September 11, 2020 by  
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Built to Last: The Case for Durable Design What are the implications of building long-lasting, durable products, and what opportunities arise from keeping products in service? “They don’t build things like they used to…” This age-old lament seems aptly fit for our era of single-use disposables and planned obsolescence. For the nostalgic, the quality conscious and the eco-friendly consumer, product longevity is a desirable trait. But when competing with lower production costs and repeat purchase revenue, durable doesn’t always add up to the financial value of disposable. How can you make a financial case for durability? What metrics should you weigh when considering it? Can you build customer loyalty by building to last? This discussion explores these questions as it builds the case for durable design. Deonna Anderson, Associate Editor, GreenBiz Group   Christine Riley Miller, Director of Sustainability, Samsonite Lauren Smith, Product Sustainability Manager, Columbia Sportswear Holly Secon Thu, 09/10/2020 – 20:03 Featured Off

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The How and Why of Effective Pre-Competitive Collaboration

September 11, 2020 by  
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The How and Why of Effective Pre-Competitive Collaboration How (and why) can companies overcome the barriers of collaborating with their corporate peers in order to advance system-wide circular outcomes? Faced with the pressing challenges of resource scarcity, ocean plastic pollution and climate change, among others, it’s clear that unique and unprecedented collaborations are required to solve complex global issues. Together, we can drive systemic change more quickly. That’s why leading brands are participating in multi-year consortia to collectively advance a waste-free future. Panelists discuss the challenges, learnings and nuts and bolts of these groundbreaking partnerships. Speakers Kate Daly, Managing Director, Closed Loop Partners  Jane Ewing, Senior Vice President, Sustainability, Walmart Eileen Howard Boone, SVP, Corporate Social Responsibility & Philanthropy and CSO, CVS Health, President, CVS Health and Aetna Foundations Amanda Nusz, Vice President of Corporate Responsibility, Target Holly Secon Thu, 09/10/2020 – 19:40 Featured Off

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The How and Why of Effective Pre-Competitive Collaboration

Where there’s hope for speeding up business action on plastics

August 26, 2020 by  
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Where there’s hope for speeding up business action on plastics Elsa Wenzel Wed, 08/26/2020 – 02:01 In 10 short years, the Ellen MacArthur Foundation (EMF) arguably has done more than any other group to define and advance the circular economy. Its landmark report,  “The New Plastics Economy” (PDF),   sounded the alarm in 2016 that if “business as usual” continues, by 2025 the ocean may hold more plastic than fish by weight. Its commitment by the same name has attracted many of the planet’s biggest brand names, among 450-plus signatories, to dramatically slash their use or production of plastic by 2025. PepsiCo, Coca-Cola, Unilever and even Tupperware  have signed on with governments and NGOs to do away with “unnecessary” plastics and innovate so that other plastics will be reused, recycled or composted; and kept out of natural systems. Only five years ago, few corporate leaders had plastic pollution on their official radar. Yet Dame Ellen MacArthur herself is floored by the rapid pace of change in business that has been forced by the COVID-19 pandemic. In food, for instance, business models and distribution methods were reshaped in a matter of weeks, as supply chains flexed to keep groceries in stock and farmers struggled to offload overripe crops. Digital networks and online platforms scaled to meet spiking demand during social distancing. In all this, she finds hope for systemic change toward a circular economy. Much of industry continues to embrace “throwaway living,” which was celebrated in this Life Magazine photograph in 1955.   “People have gotten used to having to jump quickly to change the system,” EMF Chair MacArthur said Tuesday at the GreenBiz Circularity 20 virtual event. “That hopefully will set a precedent for how we can do things in the future and how we can shift quickly in a light-footed way.” Time isn’t on the side of those who hope to prevent the projection by the  Pew Charitable Trusts  that plastic waste flows into the oceans will double in the next 20 years. Already, if all the world’s plastic waste could be shaped into a plastic shopping bag, all of Earth would fit inside of it, noted Morgan Stanley CMO and CSO Audrey Choi. Picture a double bag in 30 years. The business case Although the financial services firm is far from being in the business of producing or using plastic products, last year it set a resolution to work to keep 50 million metric tons of plastic out of ecosystems by 2030. It’s unique but not alone. The strength of collaborations emerging toward circular solutions, among corporate competitors as well as between business and government, has surprised MacArthur, for one: “The system has to change and I think more than ever, the companies involved in the system want to change.” Her remark came moments before the launch of  the US Plastics Pact  by EMF, The Recycling Partnership and WWF. Its 60 signatories across public and private sectors agree to advance circularity goals for plastic by 2025. Similar national plastics pacts are at play in Chile, France, Netherlands, Portugal, South Africa and the United Kingdom. Choi is among the execs sounding a call to action to propel business in a new direction on plastic. “I can’t think of another instance in which it would be a smart business position to take a finite natural resource, turn it into a product we use on average for 12 minutes and throw it away,” she said, citing that single-use plastic wastes $120 billion in economic value each year. “Business leaders often care but say either they can’t do anything about it because they’re not a major part of plastic value chain or because the problem is just too big,” she said. “It’s a global economy-wide issue but the fact that it is everywhere should inspire us to action. I believe that in virtually every C-suite you could go around the table and identify why every C-suite officer can care and benefit from trying to address the problem.” With the experience of having crafted Morgan Stanley’s Plastic Waste Resolution with input from the highest executives, Choi shared these specifics for others seeking to achieve buy-in from the top (She skipped the CEO, since all of it rolls up to them eventually): Chief financial officers CFOs may initially frown on making a change by switching costs or assume that alternatives are more costly. But they will find plenty of low-hanging fruit that can reduce operating and capital costs. For example, facilities that adopt cleaning products in powder or concentrate, in reusable containers, could shrink their shipping costs and carbon footprint while increasing profit margins. And companies have benefited from shifting public sentiment on plastics when they’ve issued corporate debt with proceeds tied to plastic waste reduction. Chief legal officers  CLOs have to keep up with a rapidly evolving patchwork of state laws governing plastic use and disposal, driven by activists, regulators and consumers. Bans on plastic straws, grocery bags and cup lids keep piling up, even if many are on hold during the coronavirus crisis. But company legal officers can streamline compliance and reduce liability by targeting plastic. Woe is the CLO who ignores public sentiment and risks lawsuits or fines; plastic waste branded with their company’s logo is a time bomb waiting to appear in the wrong place at the wrong time. Chief innovation officers For innovation chiefs, Choi sees the benefit as fairly intuitive. “Plastic waste reduction can be their muse, inspiring innovation through new products, new services, and new ways to engage customers,” she said. There’s an obvious wow factor to using new material that’s truly biodegradable or recyclable, just as IKEA is replacing plastic foam packaging with mushroom-based material that can be grown in a week, reused and then composted in a month. Chief marketing officers There’s a clear and growing opportunity for CMOs as customers vote with their purchases against plastic waste. For example, being the category leader in reducing plastic waste can be a chief differentiator beyond simply competing on price. “Selling your product in a beautiful, branded reusable container comes with the added benefit of the consumer looking to you and only you to refill that container.” If plastic rose to amazing heights in a matter of decades thanks to corporate marketing efforts, imagine the next revolution in plastics coming from the same source. Chief sustainability officers “It’s pretty self-explanatory why we should care about plastic waste reduction,” Choi said. In addition to the sustainability aspects, plastic goals are an opportunity to forge C-suite alliances and build bridges with clients and corporate partners, potentially leading to innovative programs and products. To reduce the plastic burden, Choi envisions drawing on the kinds of scientific discoveries, ingenuity, entrepreneurship and marketing that made plastic part of daily life in past decades. There are special challenges in this COVID-19 era, as single-use plastics, including disposable masks laced with microplastic fibers, flood waste streams and waterways at unprecedented levels. Yet advancing circularity also helps to meet climate targets. What does MacArthur consider crucial to making a difference on circularity in the next year or so? “We have an opportunity right now, like we’ve not had before, because of something tragic, to build in a different way,” including for the automotive, industrial and infrastructure sectors, she said. “Accepting what that looks like and making it happen, that for me, that’s the step.” Topics Circular Economy Circularity 20 Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off Single-use plastic cups: an endangered species? Shutterstock Svetlana Lukienko Close Authorship

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2020: Fossil fuels are dead, long live the sun

August 13, 2020 by  
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2020: Fossil fuels are dead, long live the sun Hunter Lovins Thu, 08/13/2020 – 00:15 We’re female entrepreneurs and environmentalists. We’ve spent decades promoting clean energy technologies. In this strangest of all years, as the death toll mounts from a disease caused by human incursions into once intact ecosystems, we’re observing another death — the demise of fossil fuels. Is that possible? Consider this: In April, Royal Dutch Shell, one of the largest companies in the world, announced its intent to become a net-zero carbon company by 2050. When oil and gas companies say that they’re getting out of oil and gas, shouldn’t you? No doubt Shell is counting on some miracle like carbon capture to preserve its adherence to a century-old business model of selling oil. And who could blame it? For years, extracting the black gold from the ground, processing it, then selling gasoline, fuel oil, petrochemicals and other refined products has been one of the most profitable businesses in history. In 2008, Exxon made a record $40.6 billion . For years, seven of the top 10 companies on the Dow Jones Index were oil companies until 2016 when most fell out of the top 10, leaving only Exxon. Last year, no fossil company made the top 10 list. Exxon’s 2018 revenues were half of what it made a decade earlier; in 2019, it was only $14.3 billion . That’s still a lot of money, but running an oil business is capital-intensive: Exxon was borrowing to pay dividends before COVID-19. The Institute for Energy Economics and Financial Analysis reported that “the world’s largest publicly traded oil and gas companies shelled out a total of $71.2 billion in dividends and share buybacks last year, while generating only $61 billion in free cash flow.”  Meanwhile, the coal and natural gas industries are also collapsing around us — a swift decline from the shale fracking boom. Fracking equipment sits idly in fields, and utilities shutter coal and natural gas power plants indefinitely. While businesses, community organizations, utilities and government agencies move away from dependence on fossil-fueled power generation, you can make that same shift, too. In April, the bubble popped, perhaps forever: Oil future prices hit negative $37 a barrel.  What happened? COVID-19 constricted commuting, and demand for refined oil products fell fast. Oil companies ran out of places to store the stuff. Tankers at anchor in the Houston Ship Channel started bumping into each other, but the oil kept flowing.  Why? It turns out it’s not easy to stop. Capping a well, realistically, means writing it off. Wells are capital-intensive to drill in the first place, but they are also costly to reopen. The cost to buy an oil rig runs from $20 million to $1 billion. Renting one isn’t cheap, either. In 2018, Transocean (yes, the folks who brought you the BP oil spill) charged Chevron $830 million ($445,000 a day) for one rig for five years. We bet someone’s now trying to renegotiate that contract. Hydraulic fracturing isn’t any cheaper. Even before the coronavirus hit, the shale gas Ponzi scheme was falling apart as investors realized that the enormous sums that they were asked to continue pouring into the industry were never likely to return a profit . Prices to frack a new well vary widely, depending on whether you’re drilling in West Texas or horizontally to frack under housing developments, varying from $40 to $90 a barrel. The costs multiply because fracked wells typically last less than a year. Even before COVID-19, traditional oil was lifting for $10 to $20 a barrel in Saudi Arabia, with a world average of $40. Fracking was not a viable industry even before oil went negative.  If this is the case, isn’t it a breach of fiduciary responsibility to invest in oil and gas extraction? If these are your own funds, throw them away if you wish, but Bevis Longstreth , former Securities and Exchange commissioner forecasted back in 2018, “It is entirely plausible, even predictable that continuing to hold equities in fossil fuel companies will come to be ruled negligence.” This helps explain why more than $11 trillion have been divested from fossil ownership, even before the University of California announced that it was divesting its $80 billion portfolio. Surely the world runs on oil. This will just be a blip to what is an essential industry for humankind, won’t it? No. It won’t. We can see the end. When the Kentucky Coal Museum puts solar on its roof because it is cheaper than hooking up to the coal-fired grid at its doorstep, it’s over. For fundamental economic reasons, solar power generation plus battery storage will provide at least half of electric power generation globally by 2030. Last summer, General Electric walked away from a natural gas plant in California that had a projected 20 years life because it can’t compete with solar. And this trend is happening around the world.  India canceled 14 new proposed coal plants because they can’t compete with solar. Portugal achieved 1.6 cents a kilowatt hour (¢kWh) for utility-scale solar, a price almost five times below building a new coal or gas plant. This spring the government announced that the country was 100 percent renewably powered and canceled all subsidies for fossil energy . And then Abu Dhabi set the latest new record for “everyday low price” when it brought on utility scale solar at 1.3 ¢kWh. In the bellwether state of California, the death knell for fossil fuels came when the Los Angeles Department of Water and Power signed a deal to buy power from a utility-scale solar plus battery storage facility at 2.9¢kWh. To put it simply, that is record-cheap solar power. While businesses, community organizations, utilities and government agencies move away from dependence on fossil-fueled power generation, you can make that same shift, too. You can have solar on your roof, a battery bank in your garage and be immune from power shutoffs, rising prices and vulnerability of all sorts. Centralized energy distribution from fossil fuels via the grid is not reliable (or cheaper). Extreme weather events are the biggest contributor to power outages and will increase with climate change, which the Department of Energy estimates costs the U.S. economy $150 billion annually. Customer-sited solar plus storage allows you to generate and store your own power, on or off-grid. Welcome to the triumph of the sun. Pull Quote While businesses, community organizations, utilities and government agencies move away from dependence on fossil-fueled power generation, you can make that same shift, too. Contributors Catherine Von Burg Topics Renewable Energy Solar Oil Natural Gas Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off

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2020: Fossil fuels are dead, long live the sun

The electronic waste collection conundrum

July 16, 2020 by  
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The electronic waste collection conundrum Heather Clancy Thu, 07/16/2020 – 01:15 The primary reason I started covering the business of sustainability during the 2008 financial crisis wasn’t just because I was laid off from my position as editor of a technology trade publication. Quite simply, I had become obsessed with the tech industry’s then-blasé attitude about the seemingly intractable problem of electronic waste.  A dozen years later, it’s still a massive problem — although data released this week by Morgan Stanley suggest that shifting consumer mindsets about electronics recycling, refurbishment, repair and trade-in programs could be a catalyst for change. First, some stats. According to a December report by the United Nations Environment Program, roughly 50 million tonnes of electronic and electrical waste is produced globally on an annual basis. By weight, that’s more than all of the commercial airliners ever manufactured, and only 20 percent of the stuff is formally recycled. (The operative word being formally, because a lot of it gets handled in informal ways that can inflict serious human and environmental damage. But that’s a subject for another essay.) The numbers will never scale until collection is scaled. When I started mining some of my stories from a year ago, those figures were eerily familiar. The amount of e-stuff collected and processed for some useful end — either mined for metals and rare earths or refurbished for a second life — definitely has been growing, thanks to companies such as Apple, Dell, HP Inc. and Samsung. But not nearly enough when you think of all the gadgets that have made it into the world’s hands over the past 10 years.  Interest in seeing that change is growing among consumers — at least before the pandemic really set in — according to research fielded in February by Morgan Stanley. More than half the individuals the financial services company surveyed — 10,000 people from the United States, United Kingdom, Germany, China and India — said they recycle old electronics devices. That’s up from 24 percent just two years ago. Close to half of them, 45 percent, said electronics recycling should be handled by the manufacturer. Furthermore, close to 80 percent of the respondents reported that they repaired a device — or planned to repair — at least one gadget; 70 percent had bought or planned on buying a refurbished one. “As advanced robotics technology becomes more accessible, repairs and chip-set upgrades could become a more compelling method in making devices more ‘sustainable,’” Morgan Stanley noted in its report. Great idea, but how does all this stuff get to a location where it can be repaired, refurbished or recycling? “The numbers will never scale until collection is scaled,” long-time electronics recycling executive Kabira Stokes told me when I chatted with her earlier this week. Stokes founded her first electronics recycling organization in 2011 as a social purpose corporation and later sold Homeboy Industries. Homeboy Recycling, where she’s a board member, handles recycling for companies, notably HP — it has raised oodles of press for its workforce development program, which creates jobs for formerly incarcerated individuals. She’s hoping to bring the same ethos as CEO of one-year-old Retrievr , which is (you guessed it) focusing on solving the collection problem. The company’s first market is Philadelphia, where it has contracted with the city and more than 80 nearby municipalities to pick up unwanted clothing and electronics that otherwise might wind up in places where we really don’t want it. Retrievr’s lead investor is Closed Loop Partners and it is advised by execs from Accenture and Google. “This is a way to reach into people’s houses. In my mind, it’s the only way to move the needle,” Stokes said. While Retrievr isn’t ready to talk about its partners in fashion and technology, it’s shopping the software behind its collection system as a way to help product makers get stuff back more easily, Stokes told me. Historically speaking, many makers of stuff haven’t taken responsibility for its end of life. That’s changing as more explore circular production methods. Morgan Stanley’s analysis notes that consumers are particularly interested in trade-in options, with more than three-quarters of those surveyed hoping to participate in such a program by 2022. This isn’t just a matter of sustainability, it’s a matter of competitive advantage. The firm figures of the value of Apple iPhones that could be traded toward new devices is somewhere around $147 billion, an amount that could fund roughly 30 percent of new iPhone purchases over the next three years. “We believe that now is the opportune time for manufacturers to invest more aggressively in infrastructure to support these types of programs,” the Morgan Stanley analysis notes. Of course, it’s possible that if this same survey were fielded today, fewer consumers would be interested in repairs or refurbished devices or in trading the old for new. During a pandemic, things previously owned by others don’t have quite the same cachet. One big wildcard is how the COVID-19 economic crisis — and potentially permanent new habits in remote working and education — might affect demand for personal computers and tablets. Think of how many households with multiple children have had to invest in additional devices in order to keep everyone online. Just last week, research firm IDC reported that second quarter PC shipments grew by double digits compared with a year ago. It could be exactly the right time to change the model. This article first appeared in GreenBiz’s weekly newsletter, VERGE Weekly, running Wednesdays. Subscribe  here . Follow me on Twitter: @greentechlady. Pull Quote The numbers will never scale until collection is scaled. Topics Information Technology Circular Economy E-Waste Featured Column Practical Magic Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off

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Could trash-to-energy technology feed hydrogen demand?

July 15, 2020 by  
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Could trash-to-energy technology feed hydrogen demand? Arlene Karidis Wed, 07/15/2020 – 01:00 One novel spin on emerging hydrogen fuel options is “clean hydrogen” made from trash.  Early pioneers of these hydrogen-from-waste technologies such as Ways2H, SGH2 Energy (SGH2) and Standard Hydrogen say not only are they making carbon-free, energy-rich fuel, their approaches also will divert mountains of trash from landfills and waterways, cutting greenhouse gas emissions.   Green hydrogen — made by splitting water’s hydrogen and oxygen using electricity produced by renewable sources — is a small fish in the “energies pond.” Today, more than 95 percent of hydrogen is fossil-based and does not rely on renewables. Other technologies are in the mix, such as battery electric vehicles. Hydrogen from waste is an even smaller fish than hydrogen from renewable energy. There are only a few waste-to-hydrogen projects, most which are in early stages and relatively small scale. Still, there is potential for clean — low- or zero-carbon — hydrogen to take off, energy experts believe. It is energy-efficient, abundant and an environmentally friendly alternative to natural gas. Clean hydrogen could cut greenhouse gas emissions from fossil fuel by up to 34 percent, reported Bloomberg New Energy Finance.  Deployed at scale, hydrogen from all sources could account for almost 20 percent of energy consumed by 2050, projects the Hydrogen Council . The annual demand could reach 19,120,458,891 tons by then, representing a tenfold increase from 2015 to 2050.  When we began marketing our services, we expected most of the interest to center around our hydrogen production capabilities, but most inquiries have centered around waste consumption.   Looking specifically at hydrogen from renewable energy, Bloomberg calculates that if the cost for the technology to produce it continues its current downward curve, renewable hydrogen could be competitive with natural gas in several countries before 2050. And it could be cheaper than producing hydrogen from natural gas. Combined with a push for decarbonization, these economics could drive demand, project energy experts.  A few tech companies are working to grow clean hydrogen in Europe and Asia and, lately, California. As the state weighs hydrogen as a possible path to its goal of carbon neutrality by midcentury, California’s policy makers are following emerging research, including a recent report from Lawrence Livermore National Laboratory looking specifically at converting hydrogen from waste. It concluded this approach could be a cost-effective way to actually achieve negative emissions. One company hoping to capitalize is Ways2H , which has a thermal process to convert municipal solid waste, medical waste, plastics and sewage sludge into renewable hydrogen. With four pilots under its belt, the company soon plans to launch a commercial project in Tokyo. It will start by making transportation fuel from wastewater sludge, then add plastics, according to the company.  Later this year, the developer intends to build a plant in California to make hydrogen from waste for transportation fuel or for the power grid; it is negotiating with a healthcare provider to supply the trash. The plan is to build more plants in California and other U.S. locations in 2021. Above photo courtesy of Ways2H Ways2H CEO Jean-Louis Kindler believes he’s found a promising niche. “As we see more hydrogen fuel-cell vehicles, beginning with public transportation applications … that are happening worldwide, and as more utilities adopt hydrogen as a power generation fuel, producing renewable hydrogen from waste will be an important source of supply to meet growing clean hydrogen demand,” he said.  Is this the best second life for trash? Energy Transitions Commission, a global coalition of leaders across the energy landscape, is exploring low-carbon energy systems — including different ways to make hydrogen. The commission’s stance is that leveraging biomass to make hydrogen fuel is not putting waste as feedstock to its best use. “We try to understand bioresource demand and to prioritize its use, using it as a resource where there are no other low-carbon options. There are other ways to make hydrogen. Meanwhile, there are applications with few low-carbon options that need the biomass more, such as biofuels for aviation,” said Meera Atreya, Energy Transitions Commission Bioeconomy lead. That hasn’t dissuaded Ways2H and others from forging ahead.  SGH2 , for example, is producing hydrogen from mixed paper, which is fed into a gasifier that operates at very high heat generated by oxygen and plasma torches. The heat breaks down waste’s hydrocarbons into a synthetic gas; hydrogen is then separated and purified to 99.9999 percent.   Its first plant will be able to generate 3,800 tons of green hydrogen a year from waste supplied by the city of Lancaster in California, which will co-own the facility according to a memorandum of understanding, according to the SGH2 web site. The image above describes SGH2’s process. SGH2 is negotiating with fueling stations interested in the Lancaster plant’s output. SGH2 CEO Robert Do, whose background is in physics, medicine and business, can’t name companies yet but said, “We have also had enormous interest from other buyers in California and globally. We are in talks with utilities, cement companies, and hydrogen bus manufacturers, among others.”  A preliminary lifecycle analysis indicates that for every ton of hydrogen produced, SGH2’s process displaces 13 to 19 tons more CO2 than processes using electrolysis to split water’s hydrogen and oxygen. Do said his production costs are lower, averaging $2 per kg.  “We can do it cheaper because our fuel is free, in exchange for offering disposal services at no cost to generators. And we can run the plant year-round while electrolysis depends on availability of solar and wind,” he said. A 2020 Hydrogen Council report states that renewable hydrogen produced via electrolysis is about $6/kg hydrogen; although costs have been declining, and it projects they will continue to drop.  Another pioneer in the waste-to-hydrogen movement is Standard Hydrogen Company , which is converting waste to hydrogen sulfide, then splitting it into hydrogen and sulfur to make fuel from the hydrogen. Like SGH2, the company says its process is cheaper than electrolysis because it is less energy-intensive and involves no water. Standard Hydrogen CEO Alan Mintzer hopes to close on his first joint venture this summer with a consortium of North American utilities and multinational corporations that will provide feedstock and purchase the hydrogen. He is targeting pricing of $4/kg wholesale and $5/kg retail.   “When we began marketing our services, we expected most of the interest to center around our hydrogen production capabilities, but most inquiries have centered around waste consumption. Not only will we clean the landfills and plastic and tire dumps, but our process provides an incentive to go to the floating garbage islands out in the oceans, and convert them into hydrogen,” Mintzer said.  The California Energy Commission (CEC) and other agencies in that state have funded research on hydrogen transportation fuel, including potentially sourced from waste.  “As the state moves to deep decarbonization, we’re exploring all options — including hydrogen as a clean energy carrier — in order to identify the most cost-effective pathways to reduce carbon emissions and protect public health,” says Laurie ten Hope, deputy director for Energy Research and Development at the California Energy Commission.  Technology & Investment Solutions is among those doing research for California. Its project is in collaboration with the University of Southern California (USC) and entails converting organic waste to biogas through anaerobic digestion and uses USC’s catalytic reformer to convert the methane to hydrogen for potential use as vehicle fuel.  Still, the process of making hydrogen fuel from any source has a way to go before it has firm footing, even in a state committed to decarbonization.  While California is mandated to bring 100 hydrogen refueling stations on line by 2025, and is looking to add more, it currently has just over 6,000 hydrogen vehicles on the road, compared to nearly 700,000 electric vehicles, noted a CEC spokeswoman. She added, “So while the state has invested in hydrogen technologies, today there is far less adoption of hydrogen fuel-cell vehicles than electric ones.” Through their growing pains, developers working on hydrogen from waste are onto something, speculated Keith D. Patch, an energy and technology consultant. Not only are other clean technologies such as electrolysis expensive, they require enormous energy and don’t address the waste problem that waste conversion technologies could, he points out. But what are the hurdles?  “The biggest barrier has been overly optimistic predictions by waste conversion companies, primarily around technical maturity and commercial economics. But once commercial readiness is validated by robust subscale testing, the industry should be primed for takeoff,” Patch said. Pull Quote When we began marketing our services, we expected most of the interest to center around our hydrogen production capabilities, but most inquiries have centered around waste consumption. The biggest barrier has been overly optimistic predictions by waste conversion companies, primarily around technical maturity and commercial economics. Topics Energy & Climate Circular Economy Hydrogen Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Courtesy of Standard Hydrogen Close Authorship

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Chemical footprinting comes of age

July 13, 2020 by  
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Chemical footprinting comes of age Meg Wilcox Mon, 07/13/2020 – 02:00 When the Chemical Footprint Project launched in December 2014, it aspired to become the next carbon footprint or the next widely used tool for measuring company performance on a critical sustainability concern — toxic chemical use in the manufacturing of products.  It’s made steady progress since then, with 31 companies, including Levi Strauss, Walmart and HP Inc., using the Chemical Footprint Project’s annual survey to inventory and report on their hazardous chemical use, as well as their progress towards safer alternatives.  Last month, however, the initiative scored a big win that just might bring it closer to reaching its lofty goal. Nearly 45 percent of TJX Companies’ shareholders voted in favor of a resolution calling on the discount retailer to report on its plans to reduce its chemical footprint (the “chemicals of concern” used to manufacture the products it sells in its stores).   “To get that kind of vote on this ask, that sends a message,” said Cherie Peele, program manager at the Chemical Footprint Project.  Investors, it seems, want more transparency from companies about how they are moving toward safer chemicals, to manage their risks and respond to consumer preferences. Socially responsible investors are further concerned about the environmental justice implications of the science linking hazardous chemical exposure to chronic diseases such as diabetes because communities of color bear the brunt of chemical production. This investor interest just may spur more companies to take up chemical footprinting, and particularly as they see their high-performing peers reap the rewards of consumer trust in their brands. The chemical footprint provides a way to not just say that we care about safer chemicals and green chemistry, but demonstrate it by measuring the process towards safer chemicals. The TJX vote was “a good demonstration that the E in ESG is not just about climate or water, it includes chemicals. It’s something that I hope companies take to heart,” said Boma Brown-West, senior manager of consumer health at EDF+Business.  The strong vote surprised the investors who filed the proposal, Trillium Asset Management LLC and First Affirmative Financial Network , because it was the first time such a resolution had been brought to a vote. Ordinarily, such first-time shareholder resolutions receive single-digit votes. That fact that it got over 40 percent is “an indication that some major institutional money managers voted in favor,” said Holly Testa, director of shareholder engagement at First Affirmative Financial Network. “It’s an indication that there’s widespread investor interest in this issue. It’s a mainstream concern.” “I think it’s going to set a precedent for future work on [chemical footprinting],” said Susan Baker, vice president of Trillium Asset Management. “I have to give credit to the leaders out there that have policies and are really listening to the changes in the marketplace. They’re gaining competitive advantage.” Roger McFadden, president of McFadden and Associates and former senior scientist at Staples for 10 years, said he sees corporate interest in chemical footprinting rising. Whereas in the past, “they were afraid their footprint wouldn’t be all that good,” or they feared they might not stack up well against their direct competitors, now, he says, “I think that’s the exact reason chemical footprinting is catching on. Enough companies are doing it that their competitors are beginning to pay attention to it.”  Brand value and competitive advantage A core advantage for companies participating in the chemical footprint survey “boils down to building trust, protecting your brand,” said McFadden, pointing to recent examples where companies have taken big economic and reputational hits when the health impacts of toxic ingredients in their products came to light — namely, the weed killer Roundup and baby powder.   “The chemical footprint provides a way to not just say that we care about safer chemicals and green chemistry, but demonstrate it by measuring the process towards safer chemicals,” he said.  Trillium filed the shareholder resolution with TJX in part because it saw the discount retailer lagging behind its peers. “There wasn’t evidence that they were taking a proactive approach in keeping abreast of regulatory changes and consumer preferences,” Baker told GreenBiz. “They really need to think about responsible sourcing, and how it impacts customer trust,” she added, pointing to retailers measuring their chemical footprints and moving toward safer alternatives. “Look at Target. They have all these private label brands that are attracting people into their stores. Their customers trust their brands.” TJX did not respond to GreenBiz’s request for comment; however, in its 2020 Proxy Statement it noted, “The company is already taking steps to better understand and appropriately address how the company manages its chemical footprint. … Developing and implementing a comprehensive chemical policy is especially complex in light of the company’s off-price business model,” which involves buying from a vast universe of vendors.  In response, Baker and Testa point to Dollar Tree, which has a similar off-price business model yet nevertheless participated in the 2019 Chemical Footprint Survey and has committed to eliminating 17 hazardous chemicals from products in its stores. COVID-19 spurs environmental justice concerns As evidence mounts that chemical exposure has effects on chronic disease, such as diabetes, obesity and heart disease — and that individuals with those health conditions are more vulnerable to the coronavirus — socially responsible investors are wanting more disclosure and action from companies on chemical risks, Testa told GreenBiz. “The connections are becoming clearer…” she said, and “that has staggering economic and societal consequences.”  Research documents that the chemical plants that produce the chemicals used in everyday products are often sited in communities of color, in areas some call sacrifice zones . “If the brands and retailers can start a program of reducing these chemicals, it’s going to go upstream and reduce the impacts of air and water pollution to the most vulnerable in this country,” Baker said. The Sisters of St. Francis of Philadelphia has been linking environmental justice and chemical risk concerns in its work with retailers such as Dollar Tree and oil and gas companies with stores or facilities in communities of color. “We are tying the pandemic, climate change, environmental justice and human rights. They’re very much linked to one another,” said Sister Nora Nash. Even just beginning the process is a leadership role. We’d like to think that anybody who’s participating, we see them in a leadership role. For companies such as Dollar Tree and TJX, it “hits both sides,” Testa added. Much of the companies’ products are made in countries with low standards for protecting workers from chemical exposure, and their consumer bases also have a high representation of lower income and minority communities purchasing their products. Such products may contain chemicals of high concern if the company is not assessing its chemical footprint.  The next carbon footprint? With just 31 companies reporting their chemical footprints, the initiative has a way to go before it becomes as widespread as the carbon footprint. Peele says that “we’re still in the process of socializing” the survey. The Chemical Footprint Project survey is also evolving every year as it works with companies on the challenges of collecting and reporting information that comes from many places within a company.  McFadden agrees that it takes time for a reporting scheme to become mainstream, noting that the carbon footprint had slow uptake initially because companies were unsure about it. And he notes that carbon is just one chemical, whereas chemical footprinting is thousands of chemicals.  Still he sees potential for the chemical footprint to become just as mainstream as the carbon footprint, particularly once companies get over the fear factor of “What am I measuring?” and “What if my grade makes us look bad?” To that Peele responds, “Even just beginning the process is a leadership role. We’d like to think that anybody who’s participating, we see them in a leadership role.” Ultimately, if investors don’t spur more companies to report their chemical footprint, consumers just might do the job.  “The next generation, my kids and grandkids, they’re not going to accept the things … that my generation accepted,” McFadden said. “They’re going to expect much more transparency and disclosure. Companies are going to have to recognize that. If they push back against that, they’re going to push back against their customers.”  Pull Quote The chemical footprint provides a way to not just say that we care about safer chemicals and green chemistry, but demonstrate it by measuring the process towards safer chemicals. Even just beginning the process is a leadership role. We’d like to think that anybody who’s participating, we see them in a leadership role. Topics Chemicals & Toxics Investing Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off

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A CFO’s take on climate and risk management

July 13, 2020 by  
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A CFO’s take on climate and risk management Vincent Manier Mon, 07/13/2020 – 01:00 Just a couple of months into 2020, the world was amid significant discussion about the core purpose of businesses, led by BlackRock CEO Larry Fink calling for corporate America to take control of its carbon footprint and major companies, including Microsoft and Delta , making ambitious zero-carbon pledges. When COVID-19 arrived, we saw the impact that global crises have overnight, teaching the corporate sphere valuable lessons about risk mitigation. Economic estimates predict that the pandemic will decrease global GDP by 3 percent in 2020, and at our current pace, climate change is estimated to decrease the global GDP by anywhere from 2.5 percent to 7.5 percent by 2050 . While climate risk remains an often overlooked or undervalued factor in risk management programs, there is an urgent need to integrate resiliency into core business strategy if businesses want to continue to thrive — or even remain operational. There is an urgent need to integrate resiliency into core business strategy if businesses want to continue to thrive — or even remain operational. The current COVID-19 pandemic has emphasized the importance of prioritizing resilience by exposing the fragility of global supply chains and dysfunctional systems across businesses and forcing them to change the way they plan and operate to factor in large-scale crises. Hospitals, for example, felt the disastrous impact of vulnerable supply chains, and needed to plan for alternative sources of personal protective equipment to keep their medical workers and staff safe. These learnings must be applied to similar risk brought about by climate change — businesses need to prepare for the impact of devastating weather events on supply chains and infrastructure they rely on to remain safe and operational. As key members of the financial team, risk managers need to grasp the implications of sustainability across the organization, from strategic risks posed by new regulations to operational risks posed by extreme weather and financial risks with regards to taxes and insurance. As we continue to fight climate change, understanding the strategic, operational and financial risks — and the tools available to assess and plan for them — will help finance teams take a more forward-facing approach to risk management and avoid repeating past mistakes. Strategic risk factors Four key risk factors are associated with strategic risk and sustainability: economic changes; corporate responsibility; regulatory risk; and reputational risk. From an economic standpoint, there have been major shifts brought about by decarbonization and diversifying portfolios — consider the rapid decline of the coal industry, for example. In addition, companies are being held more accountable for their impact on the environment, with pressure coming from all sides, including customers, investors, competitors and regulators. Increased regulation and legal requirements around resource management and carbon reduction, as well as required carbon reporting, can result in major fines if not complied with. Finally, reputational risk, while hard to quantify, can be enormous, particularly in today’s political climate and as both internal and external stakeholders become more educated on the action against climate change. Operational risk factors Sustainability also can affect how businesses approach operations, such as supply-chain optimization, procurement strategies, data privacy and security. For instance, the finance team can make more informed decisions around power purchase agreements, onsite and offsite renewable energy, decentralization and microgrids, energy independence and cost savings opportunities when factoring climate risk into the overall procurement strategy. There are also more direct operational risks to consider as a result of climate change in the form of extreme weather events, which continue to increase in both frequency and intensity. Businesses must account for the possibility of outages, damages and closures, all of which can threaten the ability to protect employees, assets and data centers (which can pose new risks in terms of data privacy and leaks) and, ultimately, to keep the business operational. Financial risk factors Climate change poses significant financial risks to an organization as sustainability policies and corporate initiatives can affect taxes, insurance, resource management, energy sourcing, investor support and even intangible assets such as goodwill — for instance, the impalpable value that customers and investors place on a company’s ability to reduce its footprint. From changes in insurance premiums and coverage to identifying financial benefits of electrification, there are almost countless financial risks and opportunities for the financial team to assess. Sustainability planning also opens the door to integrating new technologies to save money, such as alternative energy vehicles, which bring financial benefits all their own. Integrating climate risk strategy Integrating climate risk into new or existing risk management programs can seem daunting, but the financial team can leverage strategic assessments to make the process simpler. For instance, vulnerability assessments allow businesses to understand where climate change is most likely to affect them. Scenario assessments can provide a forward-looking view of the potential impact, so finance teams can plan ahead to mitigate future developments. The world’s current state is illuminating the need for resilience to global events we may not be able to foresee or control. With climate change being the next undeniable threat, it’s on the shoulders of the financial team to ensure that companies are adequately prepared for different climate events to improve their resilience and mitigate the associated risks. The strategic planning used now to prepare for these issues may encourage innovation and new methods of operating that not only benefit the bottom line but also prepare a business for when unexpected events do occur. This also offers opportunity to strategically prepare and recover from events in a way that helps reduce climate change and improve the environment on a global scale. Pull Quote There is an urgent need to integrate resiliency into core business strategy if businesses want to continue to thrive — or even remain operational. Topics Risk & Resilience Climate Change Finance & Investing Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Shutterstock

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GRI and SASB are collaborating. Is that good news for companies?

July 13, 2020 by  
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GRI and SASB are collaborating. Is that good news for companies? Joel Makower Sun, 07/12/2020 – 17:56 For years, corporate reporters — those inside companies responsible for creating sustainability reports and reporting environmental, social and governance data to various other organizations — have been frustrated by what many refer to as an alphabet soup of standards and frameworks: CDP, GRI, IIRC, PRI, SASB, TCFD, UNGC and more. And while they grumbled at how those various organizations’ requests weren’t harmonized, they dutifully complied with their requests and mandates. Finally, help may be on the way. Today, two of those organizations — GRI, formerly the Global Reporting Initiative, and the Sustainability Accounting Standards Board, better known as SASB — are announcing a collaborative effort to help ease that confusion and, not insignificantly, position their standards as the most consequential. “Our basic SASB 101 pitch that we give to everyone we speak to talks about SASB and GRI as being complementary, but we never could break through into the public sphere with that message,” SASB CEO Janine Guillot told me. “It was always this conflict narrative, which was extremely frustrating.” The “conflict narrative” wasn’t without foundation. For years, the two organizations competed for attention and dominance among corporate reporters, NGOs and the mainstream investor community. Sometimes it got contentious. For example, at a sustainability reporting conference in Singapore last fall, the CEOs of GRI and SASB “traded barbs over whose was the superior standard,” according to one report  — a “showdown,” as sustainability reporting expert Elaine Cohen called it. For years, the two organizations competed for attention and dominance. Sometimes it got contentious. At the event, SASB’s then-CEO Madelyn Antoncic called GRI too difficult for investors to understand and for companies to compare their performance with peers. GRI CEO Tim Mohin pointed out that its standard is used by 75 percent of the world’s largest companies. “With those numbers, I don’t see how what SASB is saying can be true,” he said. But that was so last year. SASB has a new CEO — Guillot — who joined SASB five years ago after a decade on the investing side with Barclays and CalPERS, and who came to her CEO job with a strong working relationship with Mohin. Now, the two are in lockstep — baby steps for now — to help the customers of sustainability data “understand the similarities and differences in the information created from these standards,” according to a joint briefing document. The time may be ripe for such a collaboration, for several reasons. One is the growing focus on sustainability and environmental, social and governance (ESG) metrics by the mainstream investment community, creating a greater need for a set of dominant standards to emerge. If there was any question about this trend, BlackRock CEO Larry Fink cast away all doubts in his annual shareholder letter , which referenced SASB and TCFD, the reporting framework created by the Task Force on Climate-related Financial Disclosures. Such harmonized metrics are needed even within companies, where sustainability departments are communicating with far more stakeholders. “You’ve got a much broader base of people who are interested in talking about these topics, coming from a much broader array of disciplines,” said Mohin, including “an investor relations person, a corporate secretary, a general counsel, a financial controller, a marketing communications person and an HR person. All of a sudden, you’ve got to bring together these multidisciplinary teams within both companies and investors. And that goes all the way up to the board, since boards of directors are now interested in these topics.” Of course, outside the corporation is another small army of interested groups — customers, employees, regulators, etc. — seeking easily understood and comparable data about companies’ sustainability performance. And then there’s COVID. “If the COVID-19 pandemic has showed us anything, it’s that nonfinancial disclosure is very meaningful from a global financial standpoint, and that the concept of what is financially material and what is considered not financially material is a very dynamic thing,” Mohin explained. “We went from the issues that are important in a pandemic being sort of down the list to being front and center overnight. And now we have the issues of racial justice and inequality front and center. We’ve seen how the events of the world can change that definition for a company very, very quickly, which I think is one of the very important messages here of why GRI and SASB need to work together.” The pandemic has put into sharper focus a number of aspects of corporate performance, including business contributions to biodiversity loss and the resulting increased potential for disease outbreaks; and the need for more resilient supply chains, especially for essential goods such as food and medicine, as Guillot pointed out recently on GreenBiz . Harmony and collaboration For now, the two organizations’ work together will focus on going into the marketplace with harmonized, complementary messages. One goal, Mohin said, is to “understand how the different standards are used by companies. And then take the next step, which is to show in practice companies that are using both standards.” Another goal is to “demonstrate with real live companies who are reporting to both sets of standards how the companies are doing it, why they’re doing it and what kind of information each provides for stakeholders,” Guillot said. She also suggested the possibility of doing some “mock disclosures,” pulling together best practices from across multiple companies. For now, the two organizations’ work together will focus on going into the marketplace with harmonized, complementary messages. Beyond that is a world of other collaboration possibilities, about which neither Mohin nor Guillot would speculate. Can the GRI-SASB hookup change the game? Mike Wallace thinks so. Wallace — who ran GRI’s North America operation from 2009 to 2014, and who remains laser focused on reporting standards and ESG ratings methodologies in his role as a partner at the consultancy ERM — believes that greater collaboration could especially help those just beginning the reporting “journey.” “It is a confusing space for new entrants when one considers the various options, requests and suggestions for how to address the growing demand for ESG information,” he told me, citing “at least a half-dozen disclosure options.” “We are regularly integrating a range of the frameworks, guidelines and standards together for clients,” Wallace added. “For those companies that are just getting started, the GRI and SASB collaboration will be greatly appreciated.” True, we’ve seen this movie before. The two organizations have long discussed the opportunities for collaboration. Two years ago, we reported on a Bloomberg-funded effort to bring the GRI and SASB standards “in line with each other wherever possible.” And then there’s the proposed reporting framework announced in January at the World Economic Forum’s annual conference in Davos. Created by WEF’s International Business Council in collaboration with the Big Four accounting firms and endorsed by the CEOs of 140 large companies, it recommends a set of core metrics and disclosures “to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.” But it doesn’t exactly see doing away with SASB, GRI and their kin. As reported by the Financial Times, the WEF framework “takes inspiration from existing disclosure frameworks such as SASB, the Global Reporting Initiative and the TCFD and will also include the EU’s new taxonomy that defines green instruments.” Confusing? It seems harmonization and simplification of corporate sustainability reporting may still be a ways off. Still, the SASB-GRI announcement is promising. Both organizations believe that transparency — and particularly performance metrics and comparable information — lead to improved societal outcomes. Said SASB’s Guillot: “If financial and nonfinancial stakeholders have access to information and can compare company performance on issues, then our theory of change is that companies will compete to improve performance and that at the end of the day leads to improved sustainability outcomes.” Which is, after all, the point. I invite you to follow me on Twitter , subscribe to my Monday morning newsletter, GreenBuzz , and listen to GreenBiz 350 , my weekly podcast, co-hosted with Heather Clancy. Pull Quote For years, the two organizations competed for attention and dominance. Sometimes it got contentious. For now, the two organizations’ work together will focus on going into the marketplace with harmonized, complementary messages. Topics Reporting Finance & Investing ESG Transparency Featured Column Two Steps Forward Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off GreenBiz Group

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