Why investor Green Century has taken an active interest in fighting deforestation

December 2, 2020 by  
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Why investor Green Century has taken an active interest in fighting deforestation Julie Nash Wed, 12/02/2020 – 00:15 Jessye Waxman is a shareholder advocate at Green Century Capital Management, where she uses the environmentally responsible investment firm’s leverage as a shareholder to protect forests. Ceres talked with Waxman about Green Century’s focus on deforestation and its growing importance as a driver of climate change. It comes as deforestation  — and associated greenhouse gas emissions and climate impacts — are mounting in many regions of the world. What follows is a lightly edited interview. The discussion is part of Investors Talk Deforestation, a series of interviews with influential investors and partner organizations who supported the development of the Ceres Investor Guide to Deforestation and Climate Change . The guide aims to engage investors on deforestation emissions and other related risks across their portfolios and drive more corporate action on the issue. Julie Nash: Green Century has been engaging companies on deforestation risks for many years. When did this work begin and how has the firm’s strategy evolved over the years? Jessye Waxman: We started working on deforestation in 2012. Initially, we focused on palm oil supply chains and urged companies to adopt no-deforestation policies. Eventually, we adopted a No Deforestation, No Peatland, No Exploitation (NDPE) framework. As we took a more comprehensive perspective of deforestation-related risks, we moved beyond palm oil to work on multiple forest risk commodities. In 2015, we really started focusing on a cross-commodity approach (that year we worked with [Archer Daniels Midland] to adopt a cross-commodity deforestation commitment, which was a first for the grain traders). In addition to continuing to work with new companies to adopt policies, we do a lot of work now to ensure companies update, improve and implement the policies they already adopted. Nash: Why is deforestation an important issue on multiple fronts? Waxman: Green Century is very focused on environmental, social and governance (ESG) issues; so our investment strategy and shareholder engagement is driven by the evidence-backed conviction that companies that address ESG risks in their operations and supply chains may perform better in the long run.  Deforestation touches on a lot of the environmental and social issues investors are concerned about. Among other impacts, deforestation drives systemic risks like climate change and biodiversity loss that affect not just companies in agricultural supply chains, but companies throughout portfolios. These two risks, in particular, have long-term impacts, but can best be solved in the near term, making it important for investors to talk to companies about now.  Among other impacts, deforestation drives systemic risks like climate change and biodiversity loss that affect not just companies in agricultural supply chains, but companies throughout portfolios. For example, the Amazon is hugely important for precipitation patterns and food systems, both locally and globally. There’s research showing how deforestation losses in the Amazon can affect agricultural productivity as far away as the American Midwest.  Beyond these issues, deforestation has also been associated with problematic labor practices, ranging from withholding passports of migrant laborers to slave labor and child labor and land conflicts.  Nash: Can you talk about specific successes Green Century has helped achieve? Waxman:  In the past year, we’ve seen encouraging progress from the world’s second-largest meat processor, Tyson Foods, and food service giant Aramark.  After several years of pressure from shareholders, Tyson agreed last fall to undertake a comprehensive deforestation risk assessment focusing on its global supply chain for palm oil, soybeans, beef and timber and paper products. The results of the assessment will drive the company’s development of a Forest Protection Policy. The company still has a long way to go, but this is an important first step. We were also encouraged by Aramark’s commitment to develop and fully implement a no-deforestation policy across its global supply chain, including legal deforestation, by 2025. Nash: You briefly mentioned the greenhouse emissions associated with deforestation. A big ask to companies in recent years has been the setting of science-based targets (SBTs) for reducing greenhouse gas emissions and having those targets approved by the Science Based Targets Initiative (SBTi). Can you speak to the importance of engaging companies to set a SBT, and why this can be challenging with regards to emissions from deforestation? Waxman:  Science-based targets are a really helpful tool for companies to understand the climate-related impact of their operations and supply chains. But we also need to realize that when you’re talking to a company about how they’re addressing their environmental- and climate-related impacts, setting a science-based target, at this point, certainly doesn’t cover everything. For many companies that use forest risk commodities, an outsized portion of their emissions come from their supply chain and from the emissions released when those commodities are produced. This means that any associated emissions would fall under Scope 3. [Scope 1 emissions are from sources owned or controlled by the company. Scope 2 are emissions released in generating electricity, heating or cooling used by a company. Scope 3 are other indirect emissions from a company’s supply chain. For most companies, emissions from agricultural production, deforestation and conversion fall under Scope 3.]  A lot of companies that should be looking much more closely at their supply chains and upstream impacts may not be required to have a target to reduce those emissions. Currently, SBTi only requires approved targets to include Scope 3 emissions if those emissions are in excess of 40 percent of the company’s total emissions. Beyond that, as of now, SBTi doesn’t have a methodology for measuring emissions associated with deforestation and land-use change in its supply chains, so the vast majority of companies that have set science-based targets are failing to include a significant part of their emissions in their goal setting. In other words, a lot of companies that should be looking much more closely at their supply chains and upstream impacts may not be required to have a target to reduce those emissions, and may therefore be less motivated to address their suppliers’ exposure to deforestation and other agricultural practices. Nash: Do you think the way investors are thinking about issues like deforestation and climate change is evolving? Waxman:  There’s certainly a growing awareness among investors about deforestation as a climate risk. In the past, agriculture’s role in driving climate change has often been overlooked, with a lot of the focus being on the energy and transportation sectors. But, as the new Ceres Guide clearly illustrates, a firm can’t say that it is comprehensively addressing climate risk if it’s not also addressing agriculture and deforestation. A recent shareholder vote at Procter & Gamble (P&G) suggests that not only is awareness growing among investors, but investors might finally engage on the issue. The shareholder resolution on deforestation and forest degradation that Green Century filed with P&G received the support of 67 percent of the votes cast at its annual meeting. This is almost three times what other deforestation resolutions have averaged over the last few years, so I’m hopeful this might signal a turning point for how the financial community approaches forest-related risks.  Nash: Related to Scope 3 emissions and supply chains, are smallholder producers something you’re focusing more attention on? Waxman: Yes. The smallholder conversation is especially relevant in palm oil supply chains where considerable supplies — as much as 40 percent  — are coming from farmers who own small amounts of land. As market expectations regarding sustainability have shifted, many larger producers have started to improve some of their practices to meet these heightened expectations. Subsequently, smallholders are becoming bigger drivers, proportionately, of deforestation in the palm oil supply chain. Both from an ecological perspective and sustainable development perspective, working to incorporate smallholders into sustainable supply chains is really important. In part due to increasing pressure from investors and other stakeholders, we’ve seen more companies working directly with smallholders, including efforts to get groups of smallholders certified by the Roundtable for Sustainable Palm Oil (RSPO). Kellogg’s is one such company that is helping thousands of smallholder farmers, many of them women and many of them palm oil growers in Malaysia and Indonesia, on these kinds of issues.  Nash: Are there other ways that investors should be thinking about deforestation risks that we have missed? Waxman: It’s important for investors to recognize that deforestation, like climate change, poses risks at both the company-specific and portfolio level.  Climate change and its associated physical and transition risks may affect every industry and every company. Similarly, deforestation also creates portfolio-level risks, in part because of its large contribution to climate change, but also because of its impacts on global agriculture and biodiversity.  When we talk to companies about risks in their supply chains, the solutions need to not only address the risks to the companies but also help advance systemic change. Removing deforestation out of one company’s supply chain only to have it appear in a different company’s supply chain doesn’t help the problem. As long as deforestation is still occurring, the risks to companies, industries, investors and the environment persist. The good news is that because many people have been working on deforestation for a long time, there are best practices out there, such as those outlined in Part 5 of the Ceres Guide, that are recognized as helping to comprehensively mitigate risks from deforestation. As investors engage with companies, they should look not just at how a company is managing these risks at a high level, but whether it is implementing recognized best practices that help advance systemic changes in their industry. Pull Quote Among other impacts, deforestation drives systemic risks like climate change and biodiversity loss that affect not just companies in agricultural supply chains, but companies throughout portfolios. A lot of companies that should be looking much more closely at their supply chains and upstream impacts may not be required to have a target to reduce those emissions. Topics Corporate Strategy Finance & Investing Deforestation Ceres Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off A palm oil plantation in Southeast Asia. Shutterstock Rich Carey Close Authorship

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Why investor Green Century has taken an active interest in fighting deforestation

Introducing … GreenFin 21

November 30, 2020 by  
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Introducing … GreenFin 21 Joel Makower Mon, 11/30/2020 – 02:11 The world of environmental, social and governance (ESG) reporting and investing has ramped up significantly over the past couple years, even more so during 2020, when social risks and reporting became front and center for many companies and investors. Combine that with the growth of related finance products and services — sustainability-linked loans and bonds — and you can find sustainability sitting squarely on Wall Street. We call it GreenFin, our portmanteau for “green finance.” It may well be the most dynamic and impactful aspect of sustainable business today. Which is why GreenBiz Group is pleased to announce GreenFin 21 , the launch of a new annual event, virtual for now, taking place April 13-14. GreenFin will join our other annual event brands — GreenBiz , Circularity and VERGE — on the sustainability conference calendar. For all the sustainability reporting that companies serve up each year, it doesn’t always represent the kinds of data that investors need to assess corporate risk and opportunity. GreenFin 21 is the natural evolution of the GreenFin Summits we ran at our GreenBiz conferences in 2019 and 2020 . There, we convened a small group of professionals (100 in 2019, 200 in 2020) representing the ESG and sustainable finance ecosystem: corporate reporters (including those in sustainability, investor relations and corporate finance roles); institutional investors and pension funds; ESG rating and ranking organizations; and financial institutions, notably the world’s largest banks. Tower of Babel What spurred us to launch the summits back in 2019 was the realization that these parties weren’t always speaking the same language or understanding one another’s needs. For example, for all the sustainability reporting that companies serve up each year, it doesn’t always represent the kinds of data that investors need to assess corporate risk and opportunity. For their part, investors may not be asking the questions companies most want to answer. And neither side may fully understand how various parties are using this fast-growing cache of data. At the 2019 and 2020 summits, our goal was to have a candid conversation in a safe space to address this financial Tower of Babel. Based on the enthusiastic feedback we received, we succeeded. GreenFin 21 will build on that success, adding in the rapidly evolving world of sustainable finance products and services, to share what’s working, what can work better, and the path forward. It’s no small matter. ESG, as we’ve noted , has been one of investing’s bright spots in 2020, with tens of billions of dollars flowing into ESG-themed funds every quarter. According to Morningstar, ESG funds reached the $1 trillion milestone sometime during the second quarter of the year. Much of the action is taking place in Europe, where PwC predicted that ESG funds — “a central tenet of the investment landscape” — could outpace traditional funds by 2025. U.S. investors, for their part, are catching up. So, too, the growth of ESG-related bonds and loans . Corporate bond offerings focusing on sustainability and social issues are growing each quarter, and there’s a burgeoning market for loans linked to a company’s ESG performance or other sustainability metrics. As we reported recently , global green bond issuance shot past the $1 trillion mark in September. Still, there’s massive room for growth. Fully 96 percent of U.S. institutional investors, and 91 percent across six global markets, expect their firm to increase prioritization of ESG as an investment criterion, according to a recent Edelman Trust Barometer survey of institutional investors. Three in four U.S. individual investors said they are not familiar with the concept of sustainable investing, having heard little or nothing about it, according to a Wells Fargo/Gallup Investor and Retirement Optimism Index survey released in April. Wild West The explosive growth of green finance makes sense. Increased investor interest in climate risk and, more recently, biodiversity risk is fueling the growth of several funds, as is an increased societal focus on economic, gender and racial equity. All of these issues are heading inexorably toward tipping points. Investors are increasingly moving money accordingly. Still, the markets for sustainable investing and finance are young and the standards are evolving or, in some cases, don’t yet fully exist. It’s still the Wild West out there. There are glimmers of hope . Just last week, for example, the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council announced their intention to merge into a unified organization, the Value Reporting Foundation, “providing investors and corporates with a comprehensive corporate reporting framework across the full range of enterprise value drivers and standards to drive global sustainability performance,” according to the press release . Earlier this year, SASB and the Global Reporting Initiative (GRI) announced their intention to collaborate. Such consolidation and collaboration are sorely needed to truly catalyze the full potential of sustainable finance. Ultimately, all of this relies on lots of data — ESG data — being compiled by a relatively small number of firms whose ratings can wield outsized clout among investors. The data is used to analyze stocks, of course, but also to assess creditworthiness and possibly even help determine whether a company is a great place to work. But where is this data coming from? How is it compiled? Who owns it? Is it accurate? Why do different ratings organizations assess the same company differently? These are among the questions still to be addressed. And these are among the topics we’ll be covering at GreenFin. We’ll be joined by our convening partner, S&P Global, along with a who’s who of community partners, including BSR, Capitals Coalition, CDP, Ceres, Competent Boards, GRI, Intentional Endowments Network, National Investor Relations Institute, Responsible Asset Owners, SASB, United Nations Global Compact and the World Business Council for Sustainable Development. We’re also excited to have a growing corps of advisory board members and sponsors, including from Citi, CDP, ERM, HP Inc., Intel, Morgan Stanley, SASB, S&P Global, State Street and Wells Fargo — with more to come. ( Let me know if you are interested.) Today, we’ve launched a call for speakers as well as a page to request an invitation . I hope you’ll join us for this landmark event. Pull Quote For all the sustainability reporting that companies serve up each year, it doesn’t always represent the kinds of data that investors need to assess corporate risk and opportunity. Topics Finance & Investing Reporting ESG GreenFin 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

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Why IKEA is investing in sustainable mobility

November 3, 2020 by  
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Why IKEA is investing in sustainable mobility Holly Secon Tue, 11/03/2020 – 00:30 Swedish home furnishing company IKEA isn’t just focusing on what’s happening inside your home anymore. The company is also thinking about what’s happening in the streets outside. That is, the company is pumping cash into a new sustainable mobility program. For the company known for its delicious meatballs and DIY shelves, the investment isn’t actually that surprising. It’s about reaching customers — or more specifically, helping customers reach IKEA. “The No. 1 reason that a consumer is not an IKEA customer is accessibility,” Angela Hultberg, head of sustainable transportation at IKEA, said last week on the virtual stage of GreenBiz Group’s clean economy conference, VERGE 20 . It’s about reaching customers — or more specifically, helping customers reach IKEA.   The furniture giant is starting with a sustainable mobility strategy in urban areas, which has several dimensions, Hultberg explained. Many of IKEA’s customers live in cities and don’t have access to large vehicles that would allow them to travel to IKEA and return to their homes with furniture. Meanwhile, the pandemic has accelerated a shift from brick-and-mortar business to e-commerce, but diesel delivery trucks bring air and noise pollution into these downtowns. All the while, transportation emissions have risen around the world in the past few years to over 24 percent of global CO2 emissions . “So we need to figure out — how can we get the customer to us in a convenient, affordable and sustainable way?” she added.  The company plans to make 100 percent of its last-mile deliveries be zero-emission by 2025. In addition, IKEA wants its operations in five cities around the world — Amsterdam, Los Angeles, New York, Paris and Shanghai, which already met the goal — to be zero-emission by the end of this year. Specifically, that includes shuttle buses, electric fleets and EV charging stations powered by 100 percent renewable electricity for customers. IKEA climate commitments and cities The furniture giant’s commitments have the potential to move markets: IKEA has 433 stores in 53 countries, and it hit 2019 global retail sales of about $45.5 billion .  The company has been reorienting towards a sustainability strategy that it’s calling ” climate positive “: by 2030, the goal is to remove more greenhouse gases from the atmosphere than the entire IKEA value chain emits. IKEA has invested about $2 billion in total in clean energy — at the end of last year, it earmarked $220 million on green energy, reforestation and forest protection projects. Its sustainable transportation focus is part of its long-term sustainability plan. Specifically, Hultberg said that the company is worried about being able to align with the climate goals of the communities where it does business. Hultberg said that the company is worried about being able to align with the climate goals of the communities they’re in. “We have goods we need to deliver to people — in a sustainable way,” she described. “As air pollution is on the rise, cities all over the world are looking to close city borders to fossil fuels. If we can’t deliver, that’s a huge problem.” More than 100 cities around the world, ranging from San Francisco to London to Addis Abada, Ethiopia, have committed to create and implement inclusive climate action plans in line with keeping global temperature increases to 1.5 degrees Celsius through the C40 Cities initiative . These cities have committed to science-based targets to cut emissions in sectors that are some of the biggest urban emitters: buildings ; transportation ; and waste . That means low-carbon deliveries for businesses that want to operate in these locations. “So it’s about futureproofing our business,” Hultberg said. Sustainable mobility in cities will provide support for not only IKEA’s Millennial, urban-dwelling customers, but also for young, car-free employees.  “We know that young people don’t want to go on public transportation more than 30 minutes, and they don’t want to walk more than four blocks,” she said. “So that means that they want a job that is close to where they live so if you’re an employer and your workplaces are kind of remote, you risk losing out on talent. We can’t have that.” Equity matters, too Sustainable mobility commitments are important to Hultberg and IKEA as a whole because it’s not just an environmental issue, it’s also a social issue, she said.  “If you can’t afford a car and if you don’t have good and reliable public transportation, you can’t get to work,” Hultberg said. “Maybe you can’t even get a job because it’s just too far, and then you’re stuck in a very negative spiral of poverty. In many parts of the world public transportation isn’t safe, especially for women. So if you can’t get in a bus to go to school, or to get to work, then what?” IKEA is known for its affordable furniture solutions. Making sure that those who turn to IKEA for the cheaper, stylish product are able to come shop there is critical for the company’s core business. For example, the company is pushing its electric fleet partners to go electric, and investing in low-carbon fuel technologies. In addition, IKEA already has implemented free shuttles in New York City to help customers reach the store. “Mobility is a prerequisite for business and really for everything in society,” she said. Pull Quote It’s about reaching customers — or more specifically, helping customers reach IKEA. Hultberg said that the company is worried about being able to align with the climate goals of the communities they’re in. Topics Transportation & Mobility Shipping & Logistics VERGE 20 Clean Fleets Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Flickr Brendan Lynch Close Authorship

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Carbontech is getting ready for its market moment

October 28, 2020 by  
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Carbontech is getting ready for its market moment Heather Clancy Wed, 10/28/2020 – 01:30 It may be a little early to start writing about trends for 2021, but I’m going to do it anyway. What’s on my mind? Carbontech, a category of climate tech I’d love to see break through next year. It’s the exciting idea that we can take something that could be considered waste, draw it out of the atmosphere and turn it into a source of revenue or economic growth. There are signs that give me optimism. This morning, digital payments company Stripe announced a plan to let its merchant customers divert a portion of their revenue to carbon removal projects. The move follows Stripe’s own pledge to put $1 million into four “high potential” projects earlier this year, and the two initiatives are related. The specific technologies that Stripe is funding are carbon-sequestering cement (CarbonCure), geologic storage (Charm Industrial), direct air capture (Climeworks) and ocean mineralization (Project Vesta). “Stripe’s climate initiative is a gift because it removes all barriers to positive action,” wrote Substack CEO Chris Best, a beta tester, in a statement. “This program makes it easy, and valuable, to do the right thing. We’re proud to be part of it.” All of the popular newsletter platform’s writers have the opportunity to participate. Makes me want to host my own personal blog there. Lest I forget, another well-known commerce player, Shopify, last month picked carbon removal and carbontech as a focus for its Sustainability Fund, which commits $5 million annually to climate-tech solutions. Some companies it is supporting are the same as Stripe (CarbonCure, Charm Industrial and Climeworks). It is also including ocean sequestration in the mix through its support of Planetary Hydrogen. And it is also letting merchants add options for offsetting that buyers can select during transactions.  Startups in this particular corner of the climate solutions area have not actually been supported in a commercial way. Rising corporate support of carbontech and carbon removal technologies writ large is one of the biggest reasons driving my optimism that the market is about to take a turn.  Last week, for example, Microsoft announced one of its most unusual investments yet, as it seeks to deliver on its pledge to become a “carbon negative” company. It plans to supply Alaska Airlines with sustainable aviation fuel for the three most popular routes flown by its employees between Seattle and Silicon Valley, via a partnership with SkyNRG, which produces it from waste oil and agricultural residue. That’s right: Microsoft is buying jet fuel.  MInd you, those jets will still need to use regular fuel in combo with the sustainable stuff, but the strategy will help Microsoft reduce emissions from those flights (it’s also working on an accounting standard for helping do this), and we all know the aviation sector will be really tough to decarbonize. This is a much needed commercial boost, optically speaking. A couple of weeks ago, Microsoft also joined the Northern Lights project in Norway, which is seeking to standardize methods for capturing carbon emissions at industrial facilities in Europe, turning them into a liquid and transporting it to a place where it’s pumped and stored under the ocean floor. The initiative — a collaboration of Norway’s government along with oil giants Equinor, Shell and Total — is moving into a commercial phase. The nature of Microsoft’s involvement isn’t entirely clear, but one thing being explored is how the software company’s analytics technology can help create blueprints for the techniques being used to capture CO2 (so they can be replicated elsewhere) and for creating new value chains for transporting and managing it.  Corporate interest is on the rise Carbontech is very much in the spotlight at this week’s VERGE 20 virtual event, in sessions dedicated to moonshots and emerging technologies. According to a comprehensive market report published this week by the Circular Carbon Network (CCN) and discussed during the conference, the pace of activity picked up dramatically in the past decade — of the roughly 330 innovators working on carbon removal or turning carbon into value, more than 65 percent of them were started after 2010. About 50 percent of the 107 companies that CCN tracks closely are already generating revenue. I’ll bet that’s more than you thought.  The investment dynamics are intriguing: CCN’s research uncovered 135 companies in this space that have raised $2.2 billion; its own Deal Hub tracker recovered deals worth $714 million in the past year, a significant pick up of activity, according to the organization’s report.  “What you are seeing is an accelerating pace of interest and activity,” said Nicholas Eisenberger, managing director at Pure Energy partners and co-founder of CCN, who spoke about this topic during a carbontech market update at VERGE 20. “This market is going to either be very large or ginormous.”  Here’s another big takeaway from my conversation last week with Eisenberger and his colleague Marcius Extavour, executive director of the NRG Cosia Carbon XPrize, one of the managing organizations for the CCN: Deals with corporate investors are increasingly attractive to carbontech entrepreneurs. And vice versa. CCN is tracking 61 multinational companies (as of this writing) involved in everything from research and development (the most common intersection) to buying and selling CO2 derivatives (buying it for food and beverages or selling carbon credits). Aside from Microsoft and the to-be-expected oil companies, others on the list include Amazon, Delta Air Lines, Interface, Lafarge, Nike and Starbucks. “This space is about climate, it’s also about a climate solution. It’s also an example of a climate solution that can support economic growth,” Extavour noted, pointing to the carbontech evolution. Hence, the corporate interest. The extent to which COVID-19 infrastructure investments and economic recovery plans are linked with climate action is also likely to increase corporate involvement, especially outside the U.S., where some investments already have been linked to these metrics, such as the bailout of Air France, Extavour added. How ginormous could the carbontech market get? According to nonprofit Carbon180, the total addressable market for products that could be affected is $6 trillion — with the biggest opportunities for using “waste CO2” found in transportation fuels and building materials. Captured carbon also could be a resource for food, fertilizers, polymers and chemicals. (Before you ask, very few innovators that CCN is tracking are focused on enhanced oil recovery applications.) Helping entrepreneurs commercialize carbontech more quickly is the mission of the new three-year Carbon to Value Initiative created this summer by the Urban Future Lab at New York University-Tandon, Greentown Labs and the Fraunhofer USA Technbridge (with support from the New York State Energy Research and Development Authority and the Consulate General of Canada in New York). Whew.  Lo and behold, C2V last week added the first corporate members to its leadership council with representatives from Johnson Matthey, W.L. Gore and Associates, Mitsubishi Chemical Holdings, NRG and Suez. (Extavour and Eisenberger are also on the council, as is Noah Deich, executive director of Carbon180.)  Pat Sapinsley, managing director of cleantech initiatives at NYU Tandon, said carbontech entrepreneurs haven’t benefited broadly from attention by the investment or mentorship communities that have shown up to support other climate-tech sectors such as energy or transportation. “Startups in this particular corner of the climate solutions area have not actually been supported in a commercial way,” she said. “They’ve been very well supported recently, by some really excellent NGOs, but we bring commercial chops to the table.” C2V is accepting applications for its first startup cohort (supported from May to November 2021) through Jan. 27. Emily Reichert, CEO of Greentown Labs, said there are four sorts of solutions types C2V hopes to catalyze: capture mechanisms; transformative process innovations; utilization methods that use CO2 as a feedstock fuels, building materials and so forth, and storage approaches (including those focused on important natural solutions such as sequestration). By mentoring carbontech entrepreneurs, C2V hopes to send a “market signal” for broader commercial and government support, Reichert said. “This is such a multidimensional problem that we need to tackle it from a multi-industry and multidisciplinary approach,” she said. By the way, there are still three days left of VERGE 20, with plenty of sessions about carbon solutions, including one of the most popular approaches — tree planting, conservation and cultivation initiatives. If you’re missing out, register here . Pull Quote Startups in this particular corner of the climate solutions area have not actually been supported in a commercial way. Topics Innovation Carbon Removal Carbon Capture Carbontech VERGE 20 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 The Climeworks plant in Hinwil, Switzerland.

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Kraft Heinz sustainability chief reflects on ‘interdependence’

October 28, 2020 by  
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Kraft Heinz sustainability chief reflects on ‘interdependence’ Heather Clancy Wed, 10/28/2020 – 01:00 Food company Kraft Heinz has been relatively quiet about its corporate sustainability strategy in the five years since it was formed through the merger of food giants Kraft and Heinz — stepping out in early 2018 to provide an update . In September, the maker of well-known brands such as Kraft Macaroni & Cheese, Planter’s Nuts and Heinz Ketchup — which had $25 billion in revenue last year — spoke up again with a second combined report that shows it stalled on 2020 goals for energy and water through last year (it will miss both) and doubles down on work to create circular production processes for packaging (it’s ahead of schedule and will introduce the first circular Heinz bottle in Europe next year). Kraft Heinz also updated its commitments with new targets pegged to 2025. Here are some of the latest commitments, along with perspective on progress so far: Procure most electricity from renewable sources by 2025 and decrease energy usage by 15 percent. The company didn’t previously have a renewables target, but it has been emphasizing a goal to reduce energy consumption (per metric ton of product produced) by 15 percent, which it had hoped to achieve by this year. Through 2019, it managed a 1 percent reduction against a 2015 baseline. Decrease water usage by 20 percent at high-risk sites and 15 percent overall by 2025 (per metric ton of product made). The company had hoped to reduce consumption by 15 percent by this year, against a 2015 baseline, but it actually increased water use by 1 percent per metric ton of product produced.   Decrease waste by 20 percent across all Kraft Heinz manufacturing operations by 2025. That’s a higher percentage than its previous commitment, which focused on waste to landfill. The company actually increased waste to landfill by 16 percent through 2019 but is has pledged to focus more closely on “a strong byproducts plan, product donation strategy and improved forecasting.” Make 100 percent recyclable, reusable or compostable packaging by 2025. Through 2019, it has achieved 70 percent. Kraft Heinz is undergoing an assessment so it can set a science-based target for greenhouse gas emissions reduction. Emissions have increased since its 2015 baseline, although the company managed a 5 percent cut from 2018 to 2019. Responsible sourcing is a big focus , with the company aiming for 100 percent sustainably sourced tomatoes by 2025, 100 percent sustainable and traceable palm oil by 2022, and 100 percent cage-free eggs globally by 2025 (among other ingredients). Rashida La Lande, general counsel at Kraft Heinz, took on responsibility for the company’s environmental, social and governance (ESG) strategy at the end of 2018. I caught up with her recently for a brief conversation as the company disclosed its new target, chatting about how best practices from the previously independent companies have been shared, how the pandemic has affected progress and what’s to come for sustainable agricultural practices. Below is a transcript of that discussion, edited for style and length. Heather Clancy: It seems unusual for a general counsel to have this role. What prompted the decision to make it part of your responsibilities? Rashida La Lande: I think it was a couple of things. There are some general counsels that have it. It sometimes falls within corporate affairs, sometimes it falls within procurement. I think for depending on where you see it, it kind of reflects the way that the company might focus on the issue. From our perspective I think it reflects several things. One, it reflects the fact that it’s a passion of mine. It’s something I view, and I think is important. And I think at the time our CEO wanted to make sure that someone who was passionate about it and had real sense of the business and the industry was leading it. The environmental and, of course, the social are hugely important to us but we really start from the perspective of how can we design policy and reporting to maximize our result. In addition, when we look at ESG, I think the fact that it’s within legal also reflects the heavy importance that we put on its governance. From the governance part of it — meaning the reporting level of the board, the oversight, the disclosure — we really truly do believe that what you track, what you measure, what you report on, what you compensate on are the things that you see effectively change. So, of course, the environmental and, of course, the social are hugely important to us but we really start from the perspective of how can we design policy and reporting to maximize our result. Clancy: How is your team blending the legacy knowledge of the two separate programs at Kraft and Heinz? La Lande: That’s a really good question. Business continuity was the primary focus of the merger and of aligning the two companies. And they had very different sustainability programs at the time. Right now, what we’re trying to do is to make sure that the ESG focuses on the key parts of our enterprise strategy so we put the time and resources behind our commitments and where we think we can drive the biggest change. With the merger, we’re able to assess what each company was doing and how they were thinking about it. Frankly [we could] identify where we can take the things that they were doing best and then identify the things that each side needed to do better. So, for example, we had strong sustainable palm oil sourcing programs on the Kraft side whereas on the Heinz side there was a really strong focus on agricultural and sustainable agriculture commitments stemming from ketchup and our use of tomatoes. … Both companies had really strong histories of philanthropical support, Heinz in particular with the relationship it had in Pittsburgh. And so it’s coming together and really thinking about as a food company how can we best talk about food insecurity and feeding people globally, which is something that really gels from both companies’ background. Media Source Courtesy of Media Authorship Kraft Heinz Close Authorship Clancy: How has the pandemic changed the focus of the Kraft Heinz ESG team? La Lande: It really put a focus on how much of a global company we are and our interdependence through all of our systems, businesses, units and people. And frankly, it has highlighted some of the ways that our global ESG perspective [is a strength] for us as a company and how important it is for our strategy. One of the things that we have been talking about since I started working on ESG is how important it is for us to support our community in their time of need. So we really looked at places where we’ve got employees and factories and consumers and customers, and we started to do more programming around not only the food insecurity but also making sure that we were available to people at the time of the disaster. So when the pandemic hit, it really caused us to quickly recognize that how we were thinking about this already, in terms of community, disaster relief and feeding people, put us in a really unique position to be impactful and to think about the global need that was going to be coming from the pandemic. So, we committed to provide meals to those in need and trying to do what we could to eliminate global hunger. And the pandemic just punctuated the need. At this point, to date, we’ve donated more than $15 million in financial and product support to help people all across the globe access the food that they need. And we’ve done it both in a fast time, mobile way as well as [through] a local touchpoint where we have business and community impact. Clancy: I know I’m jumping around a little bit. That’s the nature of having only a few minutes with you. What is the company’s policy for protecting biodiversity? La Lande: Right now, we’re working to update our sustainable agricultural practice by the end of 2020. We’re doing the work with a very seasoned agricultural team … primarily coming from the Heinz side but not exclusively. We have a strong history of sustainable agriculture. We’re working with developing that program further based on input from our growers and our suppliers, the farmers that we buy from. And we even have an upcoming “In Our Roots” program where we’re going to be working with suppliers to ensure that all of their agricultural practices satisfy our customer needs for safe food and traceable origin, [and] satisfy consumer demands for reliable supply, particularly of affordable nutritious food. We focus on promoting and protecting the health and welfare and the economic prosperity of the farmers, the workers, the employees and the communities within our supply chain. We’re very focused on minimizing our adverse effects on the Earth’s natural resources and biodiversity. We think those are the ways that we’re going to contribute, and that’s what we’re focusing on as we develop this program. We expect to roll it out more effectively — more widely, I should say — in 2021. Our main focus is on being good stewards of the environment, sourcing responsibilities, tracking and verifying where our ingredients come from, making our concerns and commitments with our suppliers and our supply chain very clear. Clancy: Will regenerative ag be part of that? La Lande: I think that is one of the things that we’re talking about, but I think we’ll have an ability to think more specifically about it once we make a more specific announcement in 2021. Clancy: Fair enough. How does Kraft Heinz blend environmental justice considerations into its ESG strategy? La Lande: Our main focus is on being good stewards of the environment, sourcing responsibilities, tracking and verifying where our ingredients come from, making our concerns and commitments with our suppliers and our supply chain very clear. Working and partnering with our supply chain to make sure that they have the training and expertise and understanding of our expectations. And verifying our ingredients, where they come from, what the impacts of our operations are. Through all of this, we think we’re better able to ensure that our environmental impacts are not so delineated by socioeconomic or demographic lines and instead really focus on how we can impact and have good stewardship worldwide. That’s why you see one of our key pillars being environmental stewardship as a global strategy. Clancy: You probably have 18 priorities or probably 18 million priorities. But what do you feel is your most important priority in this moment? La Lande : My goodness. I do have 18 million priorities. But for me, I think in this moment in the pandemic it’s really the focus on feeding people. There is a lot of hardship that people are facing. Unfortunately, I think there’s going to be more hardship kind of globally before we [as a society] get ourselves out of the position that we’re currently in. So I think while everything that we’re doing is extremely important, I think the day-to-day needs that we’re seeing and addressing those needs for people have to be at the forefront of what we do and have to be our first commitment. Pull Quote The environmental and, of course, the social are hugely important to us but we really start from the perspective of how can we design policy and reporting to maximize our result. Our main focus is on being good stewards of the environment, sourcing responsibilities, tracking and verifying where our ingredients come from, making our concerns and commitments with our suppliers and our supply chain very clear. Topics Food & Agriculture Collective Insight The GreenBiz Interview Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Kraft Heinz general counsel Rashida La Lande leads the giant food company’s corporate social responsibility and ESG strategy. Courtesy of Kraft Heinz Close Authorship

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Kraft Heinz sustainability chief reflects on ‘interdependence’

Lisa Jackson: How Apple aims to lead on environment and equity

October 27, 2020 by  
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Lisa Jackson: How Apple aims to lead on environment and equity Elsa Wenzel Tue, 10/27/2020 – 02:00 Apple’s Lisa Jackson is moving social justice to the top of the list for protecting the environment. Coming from one of Fortune’s “most powerful women in business ” at one of the world’s largest companies, she has views that could have a long-term global impact. Apple’s big-ticket sustainability goals released this year for 2030 include becoming carbon-neutral and achieving a net-zero impact in all operations. The company also recently embraced an outward-facing leadership role on its social impacts, with a $100 million investment to create a Racial and Equity Justice Initiative (REJI), which CEO Tim Cook asked Jackson to lead in June. How can we grow some Black and brown-owned businesses that are working on the issue of climate change? It’s not new for Apple’s vice president of environment, policy and social initiatives to see racism and climate change as intertwined. She capped off her two-decade career with the U.S. Environmental Protection Agency as its chief under President Barack Obama. Jackson recalled a key lesson from her New Orleans childhood to GreenBiz co-founder Joel Makower during a VERGE 20 virtual event Monday. 1. Identifying intersections “I know what it means to be at the receiving end of our industrial society, whether it’s the air quality coming from petrochemical facilities, of wind, or the water quality coming down the Mississippi River, or the Gulf of Mexico’s health — and that ecosystem and diversity, all those issues, conflate to me around the place I call home,” the chemical engineer said. For example, she has seen the resources of the world flow upward to the people who make inequitable decisions around land use and then profit from them — but not flowing back to the people who become victims of flooding, fires or other consequences of poor planning. “Those are the questions we have to solve if we’re really going to solve the climate crisis,” Jackson said. Fighting for equality and justice for my community has driven my career as an environmentalist. I’ll continue the work leading Apple’s Racial Equity and Justice Initiative. #BlackLivesMatter https://t.co/JKuaQP3I2r — Lisa P. Jackson (@lisapjackson) June 11, 2020 Jackson’s passion for addressing these problems deepened recently when she witnessed the combustive mix of poor air quality and high COVID-19 fatalities within historically underserved frontline communities. “It all comes together because we know that the co-pollutants of CO2 from fossil fuel, and from the fossil fuel-burning power sector and transportation sectors, are all part of that justice equation,” she said. 2. Empowering communities As part of its REJI initiative, which centers around representation, inclusion and accountability, Apple describes using its voice and cash to transform systemic disempowerment into empowerment. One way is to hire more coders of color and to build up wealth in underserved communities by doing more business with suppliers owned by people of color. “One of the things we did in the economic empowerment space is come up with this idea of an impact accelerator,” she said. “How can we grow some Black and brown-owned businesses that are working on the issue of climate change? Because we’ve always said that climate change is an economic opportunity, how can we make sure that opportunity is spread equally?” Plus, Apple is also nurturing coding hubs at historically Black colleges and universities. Apple’s $100 million toward REJI is nine to 10 times the investment committed by Amazon, Google and Facebook each toward racial justice causes. 3. Making the human factor material It’s been two years since Apple planted the seeds to grow a circular economy by committing to make all of its devices from recycled or renewable materials eventually. Jackson described how the iPhone maker quickly found that its “moonshot” of shunning ingredients that need to be mined is not just about closing the loop on material resources, but on human resources as well. The tech giant prioritized eliminating conflict minerals and questionably sourced rare earths early on because of the labor and supply chain difficulties involved. In this area, Apple so far has created its own recycled aluminum alloy for devices including the Apple Watch, MacBookAir and iPad, and it uses recycled tin in solder in some logic boards. It has developed profiles of 45 materials in terms of their impacts on the environment, society and supply chains, singling out 14 for early action on recycled or renewable sourcing. The haptic engine, which enables a variety of vibrations in iPhone models 11 and up, uses recycled rare earths. The Daisy disassembly robot gained a cousin, Dave, which recovers rare earth elements, steel and tungsten from spent devices and scrap. Apple is still aiming to make all of its products and packaging from recycled and renewable materials. So far all paper materials are recycled, and plastics have been reduced by 58 percent in four years. The company is more quietly progressing on safer chemistry. Toward its goal of gathering data on all the chemicals that comprise its products, it has information from 900 suppliers on 45,000 parts and materials. “As much as we want to continue to engage in communities to try to lift up the standards and use our purchasing power to lift up, we also have to be honest with ourselves and say, there’s also a need for us to show an alternative path,” Jackson said. 4. Being first and bigger Where Apple leads, others in the market listen. For instance, so far it has nudged more than 70 of its suppliers to adopt clean energy, which Apple has fully implemented in its offices, data centers and stores without leaning on offsets. The company’s supply chain partners of all sizes are ripe for doing something differently, Jackson said.  Because we’ve always said that climate change is an economic opportunity, how can we make sure that opportunity is spread equally? “They’ve seen what COVID can do, or a crisis can do, to a business that hasn’t thought about resilience and sustainability,” Jackson said. “Apple can help by modeling and also taking a risk on technologies and ways of doing business, and quickly scaling them.” For example, Apple was able in a single year to embed 100-recycled rare earth elements in the magnets of its iPhone 12 series. “If we can come up with a cleaner alternative, then our belief is that these other places will have no alternative but to clean up as well so that they can be competitive not just on an economic level, but on a social and environmental level as well,” she said. “That’s going to be the exciting work for Apple … in the next few years is to not only do it first but to do it bigger, and to hopefully leave behind a supply chain that’s now economical and accessible for other people. Because those industries, those enterprises will say, ‘OK, there are probably more people who want to buy recycled material as well’ — and that’s the circular economy.” Pull Quote How can we grow some Black and brown-owned businesses that are working on the issue of climate change? Because we’ve always said that climate change is an economic opportunity, how can we make sure that opportunity is spread equally? Topics Human Rights Equity & Inclusion Supply Chain VERGE 20 Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off Apple’s Vice President, Environment, Policy and Social Initiatives Lisa Jackson. Apple Close Authorship

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Lisa Jackson: How Apple aims to lead on environment and equity

Rethinking the role of sustainability reports

October 20, 2020 by  
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Rethinking the role of sustainability reports Mike Hower Tue, 10/20/2020 – 01:00 Corporate sustainability has a reporting problem — it always has. Companies typically don’t enjoy creating them and investors, customers, employees and most other stakeholders don’t revel in reading them. Yet, with investors more interested in environmental, social and governance (ESG) issues than ever before, this long-standing problem has become an immediate liability for companies looking to maximize shared value. Today, some 90 percent of companies in the S&P 500 produc e corporate sustainability reports, and the practice has become so ingrained in corporate sustainability culture that few question its purpose or efficacy. Reporting has risen to prominence for good reason — there never has been a more critical time for companies to communicate their strategies and actions for corporate sustainability. Many investors evaluate nonfinancial performance based on corporate disclosures, with most finding value in assurance of the strength of an organization’s planning for climate and other ESG risks. Meanwhile, consumers increasingly are demanding responsible products, and attention to sustainability issues has become an employee expectation. But something isn’t right with the status quo of reporting. “By trying to meet the demands of multiple stakeholders, sustainability reports have become bloated, overly complex and expensive to produce,” said Nathan Sanfacon, an ESG expert at thinkPARALLAX , a sustainability strategy and communication agency. “This results in companies spending scarce resources on a report that doesn’t quite satisfy the needs of any stakeholder group.” To be more effective at engaging investors and other critical audiences on ESG, companies ought to shift towards communicating relevant data in a more agile and real-time format. This is particularly problematic for large, publicly traded companies seeking to attract and retain institutional investors. “To be more effective at engaging investors and other critical audiences on ESG, companies ought to shift towards communicating relevant data in a more agile and real-time format,” Sanfacon said. Addressing this disconnect is at the core of the new thinkPARALLAX white paper, ” The New Era of Reporting: How to Engage Investors on ESG ,” which examines the pitfalls of sustainability reporting in the past and present and offers a better way forward for corporate sustainability practitioners. A short history of sustainability reporting While reporting might seem a recent phenomenon, its origins go back nearly half a century — emerging first in Europe in the 1960s and later in the United States in the 1970s after the first Earth Day launched the modern environmental movement. Many of the earliest reports were strictly environmental and more about addressing public image problems than communicating anything that might resemble a proactive sustainability strategy. What we might call the modern era of sustainability reporting began in 1997 when public outcry over the environmental damage of the Exxon Valdez oil spill compelled Ceres and the Tellus Institute to create the Global Reporting Initiative (GRI) . The aim was to create the first accountability mechanism to ensure companies adhere to responsible environmental conduct principles, which was then broadened to include social, economic and governance issues, GRI says on its website. “Prior to GRI, there was no framework to ensure that reporting was consistent or reflective of stakeholder needs,” said Eric Hespenheide, chairman of GRI, in an email. “First through versions of the GRI Guidelines and since 2016, the GRI Standards, we have been furthering our mission to use the power of transparency, as envisaged by effective disclosure, to bring about change.” Since then, multiple other reporting frameworks have emerged to cater to the ever-growing list of corporate sustainability stakeholders, such as the investor-focused Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) . “While sustainability reporting has come a long way, a lack of standardization means that there is a disconnect between what investors are looking for and what companies are communicating,” Sanfacon said. Giving investors what they want Here’s a billion-dollar question: What do investors look for when evaluating companies on ESG? The simple answer: data; data; and more data. “Investors tell us they’re looking for raw ESG data that is consistent, comparable and reliable — data that is focused on the subset of ESG issues most closely linked to a company’s ability to create long-term value,” Katie Schmitz Eulitt, director of investor outreach at SASB, wrote in an email. Schmitz Eulitt regularly engages with the investment community on disclosure quality, including with members of SASB’s 50-plus member Investor Advisory Group, who collectively manage more than $40 trillion in assets. “When companies more explicitly connect the dots between how they manage sustainability-related risks and opportunities and their financial outcomes, it’s both an opportunity to enhance transparency and strengthen performance,” Schmitz Eulitt added. When companies more explicitly connect the dots between how they manage sustainability-related risks and opportunities and their financial outcomes, it’s both an opportunity to enhance transparency and strengthen performance. But this is easier said than done because corporate leaders, investors and other stakeholders must work with two separate and disjointed reporting systems: one for financial and the other for ESG performance. “Companies can be screened in or out using various criteria, but there is no way to integrate the data into earnings projections or valuation analysis,” wrote Mark Kramer et al. in a recent piece in Institutional Investor. “The result is two separate narratives, one telling how profitable a company is, the other highlighting whether it is good for people and the planet.” The new era of reporting Investors, of course, aren’t the end all, be all of corporate sustainability communication — companies also want to reach customers, consumers, regulators and employees, among others. But limited time and money often results in corporate sustainability practitioners attempting to use annual or bi-annual reports as a one-size-fits all solution. More often than not, these reports are heavy on human-centric stories and light on quantitative information. While non-investor stakeholders tend to appreciate the human stories, they also typically aren’t taking the time to download and devour a portly PDF. Meanwhile, while investors are people too and can enjoy a good human story, they ultimately aren’t getting enough of the hard data they desire. In the new whitepaper, thinkPARALLAX proposes addressing this problem by dividing sustainability communication into two drivers — demonstrating performance and building reputation — so that companies can better invest time and resources to better engage investors and other stakeholders. Demonstrating performance involves conveying the effectiveness of a company’s sustainability strategy and management of material ESG issues, such as disclosing data around carbon emissions or diversity and inclusion through a digital reporting hub. Building reputation focuses on showing that a company is acting responsibly, limiting its environmental impact and delivering societal benefits. This could take the form of communications activities such as social media campaigns, microsites, videos, speaking or op-eds, among others.  “Companies most interested in engaging investors should focus more on demonstrating performance by communicating the hard ESG data they are looking for, as opposed to human interest stories,” Sanfacon said. “But if non-investor stakeholders like consumers, employees or customers are a primary audience, the company should invest more in building reputation by bringing the data to life through inspiring stories.” While this won’t single-handedly solve corporate sustainability’s reporting problem, it’s a start. As companies shift away from massive PDF reports and toward more targeted, real-time investor communication, they’ll free up time and resources to better engage consumers, employees and other key stakeholders on corporate sustainability. Pull Quote To be more effective at engaging investors and other critical audiences on ESG, companies ought to shift towards communicating relevant data in a more agile and real-time format. When companies more explicitly connect the dots between how they manage sustainability-related risks and opportunities and their financial outcomes, it’s both an opportunity to enhance transparency and strengthen performance. Topics Reporting ESG Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off Shutterstock Kan Chana Close Authorship

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Are lawyers and accountants doing enough on climate change?

October 13, 2020 by  
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Are lawyers and accountants doing enough on climate change? Joel Makower Tue, 10/13/2020 – 01:40 When it comes to the climate crisis, it’s not just what you make and sell, it’s what you do, and for whom you do it. That’s the message from several recent reports focusing on the role of service-sector companies in addressing — positively or negatively — climate change. The mere existence of these documents, and the campaigns behind some of them, represent another broadening of the conversation, a clarion call for nontraditional business players to lead, or at least not hinder, efforts to address the climate crisis. But, hopefully, lead. Exhibit A: law firms. According to a new report from Law Students for Climate Accountability, most of the top 100 law firms in the United States “provide far more support to clients driving the climate crisis than clients addressing it.” Its research focuses on the work of Vault Law 100 firms, “the most prestigious law firms based on the assessments of lawyers at peer firms.” According to the group’s scorecard , Vault 100 firms: litigated 286 cases exacerbating climate change (versus three cases mitigating it) supported $1.316 trillion in transactions for the fossil fuel industry received $37 million in compensation for fossil fuel industry lobbying The study analyzed litigation, transactional and lobbying work conducted from 2015 to 2019. Each firm received an overall letter grade reflecting its contribution to the climate problem based on the data in these three categories. Four firms receive an A while 26 received an F. Even among those in the middle, the group found that “some firms contribute far more to the climate crisis than others.” The report is intended to provide law students and young lawyers “with a resource when deciding on their current and future employment,” it said, adding: We cannot ignore the role of law firms in exacerbating the climate crisis, and this report is another step in raising consciousness of how our employment choices shape the world. We, the next generation of lawyers, can choose what firms to work for and where to spend our careers. We can ask law firms how they plan to address their role in the crisis and hold them accountable to do so. Of course, for the firms themselves, it’s mostly about following the money. After all, the $41 million ExxonMobil spent on climate lobbying in 2019 ( according to InfluenceMap ) exceeds the entire $37 million annual operating budget ( 2019 ) of Greenpeace USA. “Climate lobbying” in the report is defined as efforts “to delay, control or block policies to tackle climate change.” Still, as the group notes, “These firms could use their extraordinary skills to accelerate the transition to a sustainable future, but too many are instead lending their services to the companies driving the climate crisis. Law firms cannot maintain reputations as socially responsible actors if they continue to support the destructive fossil-fuel industry.” It will be interesting to see whether shining a bright light on the nation’s top firms — which generally avoid scrutiny, let alone comparisons with one another — will encourage them to forgo revenue in favor of the greater good. Will job-seeking law students truly shun firms seen as bad actors? And if firms dropped oil, coal and gas companies as clients, would it move the fossil fuel industry even one iota? Suffice to say, the jury is out. Lawyers aren’t the only service-sector firms targeted for their climate ties. A report coming out later this week from the Australia-based Sunrise Project “will reveal that the top 10 U.S. health insurers are all invested in the fossil fuel industry” and will call on insurers to divest from these companies, calling them “the greatest threat to human health.” On a more proactive note , the CFA Institute, a trade group that measures and certifies financial analysts, recently released ” Climate Change Analysis in the Investment Process ,” a report that aims to improve the industry’s understanding on how climate risk can be applied to financial analysis. The report, written by Matt Orsagh, director of capital markets policy at the institute, explains the economic implications of climate change and covers such topics as a price on carbon and the growing carbon markets, increased transparency and disclosure of climate metrics, and how analysts should engage with companies on the physical and transition risks of climate change. And then there are banks and other financial institutions , which have long been the focus of climate activists. That, too, is ramping up. Earlier this month, the Science Based Targets initiative released a framework and validation service for financial institutions “against the backdrop of growing awareness of the material risks posed by climate change.” Fifty-five financial institutions including Bank Sarasin, Amalgamated Bank and Standard Chartered are backing the new certification and already have committed to setting science-based targets. For the first time, those organizations have the opportunity to verify their emissions reduction plans against the goals of the Paris Agreement. I’m fairly certain that campaigns are already ramping up to get the world’s largest financial institutions on board. Follow the money, indeed. Topics Corporate Strategy Policy & Politics 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 GreenBiz photocollage

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Are lawyers and accountants doing enough on climate change?

Are lawyers and accountants doing enough on climate change?

October 13, 2020 by  
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Are lawyers and accountants doing enough on climate change? Joel Makower Tue, 10/13/2020 – 01:40 When it comes to the climate crisis, it’s not just what you make and sell, it’s what you do, and for whom you do it. That’s the message from several recent reports focusing on the role of service-sector companies in addressing — positively or negatively — climate change. The mere existence of these documents, and the campaigns behind some of them, represent another broadening of the conversation, a clarion call for nontraditional business players to lead, or at least not hinder, efforts to address the climate crisis. But, hopefully, lead. Exhibit A: law firms. According to a new report from Law Students for Climate Accountability, most of the top 100 law firms in the United States “provide far more support to clients driving the climate crisis than clients addressing it.” Its research focuses on the work of Vault Law 100 firms, “the most prestigious law firms based on the assessments of lawyers at peer firms.” According to the group’s scorecard , Vault 100 firms: litigated 286 cases exacerbating climate change (versus three cases mitigating it) supported $1.316 trillion in transactions for the fossil fuel industry received $37 million in compensation for fossil fuel industry lobbying The study analyzed litigation, transactional and lobbying work conducted from 2015 to 2019. Each firm received an overall letter grade reflecting its contribution to the climate problem based on the data in these three categories. Four firms receive an A while 26 received an F. Even among those in the middle, the group found that “some firms contribute far more to the climate crisis than others.” The report is intended to provide law students and young lawyers “with a resource when deciding on their current and future employment,” it said, adding: We cannot ignore the role of law firms in exacerbating the climate crisis, and this report is another step in raising consciousness of how our employment choices shape the world. We, the next generation of lawyers, can choose what firms to work for and where to spend our careers. We can ask law firms how they plan to address their role in the crisis and hold them accountable to do so. Of course, for the firms themselves, it’s mostly about following the money. After all, the $41 million ExxonMobil spent on climate lobbying in 2019 ( according to InfluenceMap ) exceeds the entire $37 million annual operating budget ( 2019 ) of Greenpeace USA. “Climate lobbying” in the report is defined as efforts “to delay, control or block policies to tackle climate change.” Still, as the group notes, “These firms could use their extraordinary skills to accelerate the transition to a sustainable future, but too many are instead lending their services to the companies driving the climate crisis. Law firms cannot maintain reputations as socially responsible actors if they continue to support the destructive fossil-fuel industry.” It will be interesting to see whether shining a bright light on the nation’s top firms — which generally avoid scrutiny, let alone comparisons with one another — will encourage them to forgo revenue in favor of the greater good. Will job-seeking law students truly shun firms seen as bad actors? And if firms dropped oil, coal and gas companies as clients, would it move the fossil fuel industry even one iota? Suffice to say, the jury is out. Lawyers aren’t the only service-sector firms targeted for their climate ties. A report coming out later this week from the Australia-based Sunrise Project “will reveal that the top 10 U.S. health insurers are all invested in the fossil fuel industry” and will call on insurers to divest from these companies, calling them “the greatest threat to human health.” On a more proactive note , the CFA Institute, a trade group that measures and certifies financial analysts, recently released ” Climate Change Analysis in the Investment Process ,” a report that aims to improve the industry’s understanding on how climate risk can be applied to financial analysis. The report, written by Matt Orsagh, director of capital markets policy at the institute, explains the economic implications of climate change and covers such topics as a price on carbon and the growing carbon markets, increased transparency and disclosure of climate metrics, and how analysts should engage with companies on the physical and transition risks of climate change. And then there are banks and other financial institutions , which have long been the focus of climate activists. That, too, is ramping up. Earlier this month, the Science Based Targets initiative released a framework and validation service for financial institutions “against the backdrop of growing awareness of the material risks posed by climate change.” Fifty-five financial institutions including Bank Sarasin, Amalgamated Bank and Standard Chartered are backing the new certification and already have committed to setting science-based targets. For the first time, those organizations have the opportunity to verify their emissions reduction plans against the goals of the Paris Agreement. I’m fairly certain that campaigns are already ramping up to get the world’s largest financial institutions on board. Follow the money, indeed. Topics Corporate Strategy Policy & Politics 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 GreenBiz photocollage

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Are lawyers and accountants doing enough on climate change?

HSBC is latest bank to pledge net-zero financed emissions by mid-century

October 13, 2020 by  
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HSBC is latest bank to pledge net-zero financed emissions by mid-century Cecilia Keating Tue, 10/13/2020 – 00:46 HSBC has become the latest bank to commit to achieving net-zero financed emissions, announcing Monday that it intends to align its portfolio of investments and debt financing with global climate targets by mid-century. The bank, currently Europe’s second largest financier of fossil fuels, has committed to reaching net-zero across its supply chain and operations by 2030, before reaching net-zero across its customer portfolio 20 years later. The pledge does not include any firm commitments to phasing out support of fossil fuel companies, but confirms the bank’s plans to channel between $75 billion and $1 trillion of financing and investment over the next 10 years to support its customers’ transition towards net zero emissions. In an open letter to its clients, HSBC CEO Noel Quinn said the bank had been motivated to ramp up its environmental ambition by customer concern about climate change. “We know this is an issue that many of our 40 million customers care deeply about, particularly in our retail and private banking businesses,” Quinn wrote . “They care as citizens, consumers and business owners. We are committed to developing products that allow them to invest or participate in efforts to bring about a more sustainable global economy.” While the pledge provides limited detail on the measures it will take to slash the carbon emissions of its portfolio or operations, the bank said it would establish “clear, measurable pathways” to net-zero using the Paris Agreement’s Capital Transition Assessment Tool (PACTA). We know this is an issue that many of our 40 million customers care deeply about, particularly in our retail and private banking businesses. HSBC said it would “apply a climate lens” to all its financing decisions and disclose its climate risk in line with the recommendations of the Taskforce on Climate-related Financial Disclosure (TCFD). It also said it would work with the broader finance sector to create a standard to measure financed emissions and support a functioning carbon offset market. Ben Caldecott, director of the Oxford sustainable finance program and COP26 strategy adviser for finance, hailed the announcement as a “big deal,” noting that HSBC faced particular challenges due to its being more exposed to emerging markets than many of its peers. Elsewhere, the news elicited a more lukewarm response, with a number of environmental campaigners slamming the commitment as “empty” due to its lack of a phaseout timeline for its support of fossil-fuel companies and businesses responsible for deforestation. “HSBC’s net-zero commitment is a bit like saying you’ll give up smoking by 2050, but continuing to buy a pack a week or even smoking more,” said Becky Jarvis, coordinator of campaign group network Fund Our Future UK. “Any further financing of oil, gas and coal expansion today is utterly at odds with a net-zero commitment by 2050. That’s just science, not finance.” Adam McGibbon, energy finance campaigner at Market Forces, said the proposals represented “zero ambition, not net-zero ambition.” “If you want to know what HSBC’s stance on climate change really is, look at what they fund, not their fluffy marketing,” he added. “This is a bank that owns stakes in companies seeking to build enough coal power plants to emit carbon emissions equivalent to 37 years of the UK’s annual emissions.” HSBC, which provided $87 billion in financing to top fossil fuel companies since the Paris Agreement and nearly $8 billion in loans and underwriting to 29 companies developing coal plants between 2017 and Q3 2019, has faced growing pressure from shareholders to cease financing companies heavily dependent on fossil fuels. In May, 24 percent of shareholders voted in favor for an independent resolution that called for clear phaseout targets and in 2019 a group of investors, including Schroders, EdenTree and Hermes EOS, wrote a letter to the bank’s then-CEO urging him to end support of companies dependent on coal mining or coal power. This week’s announcement is the latest in a growing wave of pledges from across the financial sector from banks and investment firms looking to fully decarbonize not just their operations but also their portfolios. In the past month alone, Morgan Stanley and JPMorgan Chase have made similar pledges, while earlier this year Barclays and Natwest promised to move their investment activities into line with the Paris Agreement. Pull Quote We know this is an issue that many of our 40 million customers care deeply about, particularly in our retail and private banking businesses. Topics Finance & Investing Corporate Strategy Net-Zero BusinessGreen 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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HSBC is latest bank to pledge net-zero financed emissions by mid-century

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