Are lawyers and accountants doing enough on climate change?

October 13, 2020 by  
Filed under Business, Eco, Green

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  
Filed under Business, Eco, Green

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

San José’s bold new plan for climate-friendly transit

October 13, 2020 by  
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San José’s bold new plan for climate-friendly transit Elizabeth Stampe Tue, 10/13/2020 – 00:22 San José is rolling out the green carpet for biking, thanks to the city council’s unanimous passage of the Better Bike Plan 2025 . With the plan’s adoption, the city commits to building a 550-mile network of bike lanes, boulevards and trails to help thousands more people ride safely. The plan is realistic about the past, acknowledging San José’s sprawling 180-square-mile spread, its car-oriented layout and its inequitable history of transportation decisions, which continue to shape people’s lives. But the plan also looks ahead, aiming to create a city where anyone can comfortably bike to any neighborhood.  The planned network includes 350-plus miles of protected bike lanes, 100 miles of bike boulevards and 100 miles of off-street trails. Already, the city has built over 390 miles total.  First, make it safe The numbers are impressive. But the numbers don’t tell the whole story.  With this plan and its creation, the city lays out a thoughtful approach to who feels comfortable biking, who doesn’t and how to invite more people out onto bikes. Many cities have been finding creative ways to help their residents get around safely, healthily and affordably. For too long, bike lanes — not just in San José but nationally — have been created for the few people who feel fine biking on a street full of fast traffic, protected by only a line of white paint. The new plan acknowledges that’s often not enough for people to feel comfortable, instead offering “the evolution of a bike lane,” first by just widening that painted lane into buffer to create more separation from traffic, then putting parked cars between bikes and traffic when possible, and then building a whole raised curb between cars and the bike lane. Sometimes, instead of adding miles, it’s important to go back to make existing miles of bike lanes better and safer. The plan emphasizes that many of San José’s quiet residential streets can connect to create a “low-stress” network of “bike boulevards,” along with safe ways to get across the big busy streets. To create the plan, city staff talked with residents. They also partnered with community-based organizations such as Veggielution , Latinos United for a New America (LUNA) and Vietnamese Voluntary Foundation (VIVO). At meetings and focus groups in Spanish and Vietnamese as well as English, city staff and partners asked residents: What would help make them more likely to bike?  Paramount across communities was concern for safety.  Build quick, aim high  The city already has shown that it can move quickly. With its Better Bikeways project and with the assistance of the Bloomberg Philanthropies American Cities Climate Challenge, San José will have built 15 miles of protected bike lanes between 2018 and 2020.  The “quick-build” model is impressive. A few of us from the Climate Challenge got to tour San José’s downtown by bike last year with Mayor Sam Liccardo and the National Association of City Transportation Officials (NACTO). We pedaled along new green lanes, protected by sturdy green posts and complete with ingenious bus islands that are wheelchair-accessible and allow bus riders to cross bike lanes safely. The green posts that protect bikers look reassuringly solid but they’re actually plastic, making them low-cost, easy to install yet imposing enough to form a kind of low wall between bikes and car traffic. It felt safe. Now the trick is to build out from downtown, connect to neighborhoods and get more people using them.  The city has set ambitious goals for “bike mode share,” which means the percentage of all trips people take in the city by bicycle. San José’s current General Plan aims for 15 percent bike commute mode share by 2040, and its Climate Smart plan seeks to reach 20 percent by 2050.  These are tall orders. Today, just 1 percent of commute trips in the city are made by bike, although a city survey found that 3 percent of people reported biking as their primary way of getting to work and even more residents using a bike as a backup mode of transportation. Of commute trips to downtown, 4 percent are by bike. These numbers might sound small, but it’s important to consider that bike commuting is on the rise: Between 1990 and 2017, San José saw a 28 percent increase in commute trips made by bike. But not all trips are commute trips; in fact, in San José, only one in five trips are to and from work. That’s especially true in these teleworking times. Encouragingly, the plan notes that 60 percent of all trips people make in the city are less than 3 miles long. Those short trips, combined with the city’s mild climate and flat terrain, make biking a good option, creating the opportunity for the city to achieve its bold goals. The Better Bike Plan 2025 includes a five-year action plan of prioritized projects to implement and coordinates with the city’s paving program to save money. It offers a range of costs to make these changes, from quick and temporary to more permanent, that total roughly $300 million.  The prioritized projects listed in the plan — the list of streets where bike improvements will go — were chosen with three aims: Increase biking mode share: Areas where bicycle trips are most likely, based on factors such as population, employment and connections to transit, downtown and the existing bike lane network. Increase safety: Projects that will fix “high-injury” streets where collisions are most serious and frequent. Increase equity: Low-income and historically underserved neighborhoods, also called “Communities of Concern,” especially just to the south, east and north of downtown. People living in these neighborhoods are likely to have fewer transportation options, less access to a private car and may be essential workers, required to show up at a job in person every day. More safe, healthy, affordable transportation options are needed, and soon. What comes next: A time for action In this difficult year, many cities have been finding creative ways to help their residents get around safely, healthily and affordably. Biking nationally has boomed . San José has launched an Al Fresco program that repurposes streets for outdoor dining. In March, nearby Oakland launched the nation’s first and most ambitious “Open Streets” program along its planned bike network, acting quickly to make those streets safer by discouraging most car traffic. Oakland’s Open Streets program also creates more safe outdoor areas for people in neighborhoods with less access to open space, reduces crowding at Lake Merritt and other parks and frees up more space for social distancing than sidewalks typically offer. Oakland recently released a report to help cities in the Bay Area and beyond learn from its example.  San José has a less dense footprint than Oakland, but its residents still have a great need for safe, affordable transportation in these times. The city can take its thoughtful Better Bike Plan as a starting point to act quickly, and rebuild its streets to bring safe biking to all. Pull Quote Many cities have been finding creative ways to help their residents get around safely, healthily and affordably. A city survey found that 3 percent of people reported biking as their primary way of getting to work. Topics Cities Transportation & Mobility NRDC Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off A shark appears in a San Jose bike lane, a nod to the local ice hockey team. Shutterstock Anna MacKinnon Close Authorship

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San José’s bold new plan for climate-friendly transit

Valani launches debut collection of biodegradable clothing

September 16, 2020 by  
Filed under Eco, Green, Recycle

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New fashion house Valani has launched its debut collection of biodegradable separates and dresses inspired by “light living.” These sustainable clothes are made from materials like classic hemp fiber, antibacterial Tencel and banana silk for wardrobe staples that are just as comfortable and eco-friendly as they are stylish. The fashion brand has designed its pieces to reflect sustainability, with soft styles that can be worn throughout the year — regardless of season. Founder Vanni Leung is driven by the interconnectedness of the planet, animals and humankind as well as the recognition that love for the planet and love for ourselves are intertwined. She is a lifelong vegan, breathwork practitioner, a believer in the mind-body balance and an ally for female empowerment. Related: Seaweed Girl explores seaweed as an eco-textile for sustainable fashion Valani uses hemp, Tencel and banana silk in its designs. Hemp makes for a soft and flowy fabric that is hypoallergenic; it is also a carbon-negative crop, uses less water in production and is naturally resistant to bacteria growth. Tencel is made from sustainably managed eucalyptus trees and produced using a closed loop method that reuses 99% of solvents and water. The banana silk is made from a byproduct of agriculture waste; discarded banana stems are harvested to make way for new tree growth and then upcycled into this sustainable silk alternative. Prices for the new collection range from $98 to $398, so adding Valani to your wardrobe will certainly be an investment. However, the clothing is built to last, and your money goes much further than just the garment. Valani offers no-cost breathwork sessions online to its customers and plants a tree for every piece of clothing purchased. The sustainable company has also pledged to donate 10% of its profits to conservation, animal welfare and female empowerment organizations. As an additional sustainability feature, Valani uses recycled materials as well as straw, hemp and jute for its packaging. Pattern designs are strategically created to minimize fabric waste, and any scraps are used for scrunchies, crafts, training purposes or as filling for toys and pillows. Some of the most notable pieces include the faux wrap Sitha Top ($148), the cropped double puff sleeved Sineth Top ($168), the mid-rise pull-on Petra Pant ($188) and the asymmetrical, one-shoulder Sokha Banana Dress ($398). Sizes run from 0 to 12. + Valani Images via Valani

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Valani launches debut collection of biodegradable clothing

Valani launches debut collection of biodegradable clothing

September 16, 2020 by  
Filed under Eco, Green, Recycle

Comments Off on Valani launches debut collection of biodegradable clothing

New fashion house Valani has launched its debut collection of biodegradable separates and dresses inspired by “light living.” These sustainable clothes are made from materials like classic hemp fiber, antibacterial Tencel and banana silk for wardrobe staples that are just as comfortable and eco-friendly as they are stylish. The fashion brand has designed its pieces to reflect sustainability, with soft styles that can be worn throughout the year — regardless of season. Founder Vanni Leung is driven by the interconnectedness of the planet, animals and humankind as well as the recognition that love for the planet and love for ourselves are intertwined. She is a lifelong vegan, breathwork practitioner, a believer in the mind-body balance and an ally for female empowerment. Related: Seaweed Girl explores seaweed as an eco-textile for sustainable fashion Valani uses hemp, Tencel and banana silk in its designs. Hemp makes for a soft and flowy fabric that is hypoallergenic; it is also a carbon-negative crop, uses less water in production and is naturally resistant to bacteria growth. Tencel is made from sustainably managed eucalyptus trees and produced using a closed loop method that reuses 99% of solvents and water. The banana silk is made from a byproduct of agriculture waste; discarded banana stems are harvested to make way for new tree growth and then upcycled into this sustainable silk alternative. Prices for the new collection range from $98 to $398, so adding Valani to your wardrobe will certainly be an investment. However, the clothing is built to last, and your money goes much further than just the garment. Valani offers no-cost breathwork sessions online to its customers and plants a tree for every piece of clothing purchased. The sustainable company has also pledged to donate 10% of its profits to conservation, animal welfare and female empowerment organizations. As an additional sustainability feature, Valani uses recycled materials as well as straw, hemp and jute for its packaging. Pattern designs are strategically created to minimize fabric waste, and any scraps are used for scrunchies, crafts, training purposes or as filling for toys and pillows. Some of the most notable pieces include the faux wrap Sitha Top ($148), the cropped double puff sleeved Sineth Top ($168), the mid-rise pull-on Petra Pant ($188) and the asymmetrical, one-shoulder Sokha Banana Dress ($398). Sizes run from 0 to 12. + Valani Images via Valani

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Valani launches debut collection of biodegradable clothing

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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What switching to satellite offices could mean for sustainability

August 10, 2020 by  
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What switching to satellite offices could mean for sustainability Jesse Klein Mon, 08/10/2020 – 01:45 When the coronavirus pandemic started in March, many of America’s major cities experienced a mass exodus of people in search of places with more living space for home offices and outdoor areas for easier social distancing. And as many tech companies extend their work from home policies indefinitely , such as Google , which recently announced it will allow employees to work from home until July 2021, this migration could become permanent.  “There is this phenomenon that we know is happening around people leaving the major cities and going to smaller places,” said Lindsay Baker , former first chief sustainability officer at WeWork and founder of space use software app company Comfy . “People sometimes don’t choose to live in cities. They live there because they work there.”   And as employees move away, many companies are starting to reevaluate the necessity of maintaining their large corporate offices or complexes in congested, expensive places with prestigious addresses. In June, a San Franciscan tweeted a photo of three moving trucks on the edge of the city’s financial district near Chinatown and commented that he has seen over 30 in the area. At least anecdotally, both people and companies are leaving town. They are moving out of office buildings because they don’t need them.  But even if remote work becomes the long-term norm for every company post-pandemic, humans still like to work together. There’s still a part of us that wants to physically come together to collaborate and connect. So real estate strategies may turn towards smaller neighborhood satellite offices in multiple suburban locations, instead of one massive complex that serves an entire region or, in some cases, an entire state.  These smaller satellite hubs could allow employees to come together a few times a week and supply high-speed internet and better backgrounds than a kitchen table for important meetings, while also being less crowded for social distancing concerns, giving employees shorter commutes and allowing for a quieter, more accessible outdoor environments than a typical bustling financial district location.  But what will this possible transition to smaller hubs mean for the sustainability of office buildings where building designers and office managers have spent the last decade making every last inch of a multistory building as energy- and waste-efficient as possible? Large complexes have sustainabilities of scale When an influential company builds an HQ, it becomes iconic and synonymous with the company’s brand and image. The most well-known ones become part of the pop culture ethos and get nicknames: The Apple Spaceship, The GooglePlex, The Salesforce Tower, The Amazon Biodomes, The Hearst Tower, The Bank of China Tower, Lloyd’s “Inside-Out Building.” That notoriety incentivizes the company to commit to sustainable designs, technologies and programs for the highly scrutinized building. But the tenants couldn’t heavily invest in those projects without the massive number of people each building serves. And the bigger buildings could have sustainability of scale that smaller offices can’t provide. “I think to an extent you could make a claim that a larger campus or a larger building would be more sustainable [than a smaller office] for the simple fact that you can implement different technologies that have a better ROI,” said Kyle Goehring, executive vice president of clean energy solutions at JLL.  Media Authorship Salesforce Close Authorship These technologies can be as mundane as better, more energy-efficient boilers, lights, heaters, filters and air conditioners or as radical as the Salesforce Tower’s in-building blackwater treatment equipment.  “When you’ve got big buildings, you’ve got more complex, robust mechanical systems,” said Sean McCrady, vice president of Healthy Buildings, recently acquired by UL. And larger, more complex buildings are usually staffed with teams of specialists to run them. They notice when something isn’t running efficiently and work to find solutions. Just having people around in charge of sustainability to notice when the lights on the sixth floor keep getting left on is important. There are other sustainabilities of scale that large campus’ offer that smaller ones can’t. The Google Cafeteria, for example, works on a scale that allows for extremely sustainable operations. It uses ugly fruit , has a food waste reduction program and can serve on and wash real plates instead of using disposable ones. “Even if I bought a Tupperware full of whatever food I had to my office, took it home and washed it in my residential dishwasher, it would have been more consumptive than what Google does,” Baker said. “Because it’s at scale.” According to Baker, tech perks aren’t going away. Even in the time of the pandemic, employees still expect some of the same benefits they enjoyed at their large complexes. But instead of a buffet-style with real plates and a full kitchen in the complex, companies will deliver servings in disposable containers to the smaller hub locations. And with the virus still on everyone’s mind, instead of bulk ordering trail mix, nuts and candy for a bin with scope, single-serving chip bags and cookie packages will feel necessary. Sustainable cafeterias might be replaced with high-waste food delivery services.  Another factor that contributes to more sustainability investment on large corporate campuses is that they are either owned by the company or are in long-term lease agreements, sometimes up to 20 years. Both these situations give the company much more control over building decisions.  “Real estate owners will often say that the stability of long term and big leases help them to be able to make some of these sustainability improvements,” Baker said.  Almost every building expert interviewed for this story mentioned that companies and landlords are more willing to make changes if they have a steady partner to help carry the costs. There’s no point making a bunch of sustainable changes if the company plans to abandon that location in two years. Shifting to a smaller corporate office model with many businesses in each building and each company dealing with many landlords could threaten a company’s ability to influence a sustainable agenda. Smaller satellites could shift incentives  If post-pandemic, companies decided that instead of 100,000 to 1 million square feet organized into a complex, they need 10,000 square feet in 10 separate hub locations, there are a lot more decision-makers at the table, and a lot more split incentives.  “In America, buildings are owned by one entity, managed by a different entity and occupied by another entity,” Baker said. “All of these things getting disrupted means that there’s a little bit of mayhem going on for most buildings.” Essentially, there are more renters, more landlords, more operators and less control for any individual party, making getting anything done more difficult.   Each entity has different incentives that affect the feasibility of sustainable improvements. For example, where a tenant might see a huge advantage in installing solar panels to decrease the utility bill, the owner of the building who passes the electricity bill onto the renter doesn’t have any reason to pay for the solar infrastructure.  “Oftentimes, it’s the owner who’s really in a position of power,” Baker said. “When you have more tenants and shorter terms, split incentives become a much bigger problem, and it’s harder to get an owner to spend the money.” Goehring agreed. “A larger site campus may be able to put in more technologies because you have greater control over that property,” he said. “Whereas if you’re in much smaller sites and you have multiple tenants, you may not be able to implement an on-site renewable or energy-efficient solution because you’re sharing the asset with multiple parties. You may not be able to get agreement.” Essentially, there are more renters, more landlords, more operators and less control for any individual party, making getting anything done more difficult. Adobe already has encountered this problem with its satellite offices across the globe.  “If we have a small office somewhere that we rent, we have no local control,” said Vince Digneo, sustainability strategist for Adobe. “We’re working on strategies for being able to work with landlords.” On the other hand, the fact that the satellite offices are not as tightly controlled also could help green initiatives get off the ground. According to Baker, there’s less bureaucracy, and it could be easier to get decisions made. Moreover, in a smaller office, the people in charge might be more willing to take a chance on a change at a smaller scale. Even overhauling something simple could be a massive undertaking at a huge headquarters.  “Sometimes the best sustainability performance actually happens in the satellite offices of these big companies,” Baker said. “They were able to break down more silos faster. That stuff is sort of the bread and butter of sustainability work.” Sustainability could thrive in a market of flexibility, pressure and competition As corporations need less space, they have more potential locations available to hold them. According to the commercial building experts, fewer constraints, along with the pandemic exodus has created a renter’s market, forcing landlords to be more flexible to compete. To attract companies with sustainability commitments, smaller landlords that didn’t have to think about solar or efficient heating before will hopefully start making changes.  “You can influence the people who own the assets to implement solutions because if they don’t, you are going to go lease a different property or you’re going to relocate elsewhere,” Goehring said.  Baker hopes that the changing market will develop a sense of competition between landlords to be the most sustainable and be in line with the sustainable values and goals of larger companies. That means there’s an opportunity for the massive companies that need space in many places to turn up the heat on more buildings, more regulators and more landlords in more places. With satellite offices, companies could influence sustainable policies and access to renewable energy in many areas, instead of just focusing on the one that is home to the large base.  With Adobe’s many satellite locations, it is able to put pressure on regulators in states outside of its headquarters in California. According to Digneo, Adobe was able to work with local utilities such as Portland General Electric to get renewable energy to its sites in Hillsboro, Oregon, and later in Utah.  We are still far from the end of this pandemic, and we don’t know what the long-term ramifications for our office lives will be. But the private sector is usually quick to adapt and take advantage of a changing market, and the hope is those adaptations will include more sustainable offices, whatever the size.  Pull Quote Essentially, there are more renters, more landlords, more operators and less control for any individual party, making getting anything done more difficult. Topics Buildings Built Environment Featured in featured block (1 article with image touted on the front page or elsewhere) On Duration 0 Sponsored Article Off A rendering of Apple’s spaceship-like headquarters in Cupertino.

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Investors say agroforestry isn’t just climate friendly — it’s profitable

August 10, 2020 by  
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Investors say agroforestry isn’t just climate friendly — it’s profitable Stephanie Hanes Mon, 08/10/2020 – 00:15 This story originally appeared in Mongabay and is republished here as part of Covering Climate Now, a global journalistic collaboration to strengthen coverage of the climate story. In the latter part of 2016, Ethan Steinberg and two of his friends planned a driving tour across the United States to interview farmers. Their goal was to solve a riddle that had been bothering each of them for some time. Why was it, they wondered, that American agriculture basically ignored trees? This was no esoteric inquiry. According to a growing body of scientific research, incorporating trees into farmland benefits everything from soil health to crop production to the climate. Steinberg and his friends, Jeremy Kaufman and Harrison Greene, also suspected it might yield something else: money. “We had noticed there was a lot of discussion and movement of capital into holistic grazing, no till, cover cropping,” Steinberg recalls, referencing some land- and climate-friendly agricultural practices that have been garnering environmental and business attention recently. “We thought, what about trees? That’s when a lightbulb went off.” The trio created Propagate Ventures , a company that offers farmers software-based economic analysis, on-the-ground project management and investor financing to help add trees and tree crops to agricultural models. One of Propagate’s key goals, Steinberg explained, was to get capital from interested investors to the farmers who need it — something he saw as a longtime barrier to such tree-based agriculture. Propagate quickly started attracting attention. Over the past two years, the group, based in New York and Colorado, has expanded into eight states, primarily in the Northeast and Mid-Atlantic. It is working with 20 farms. In late May, it announced that it had received $1.5 million in seed funding from Boston-based Neglected Climate Opportunities, a wholly owned subsidiary of the Jeremy and Hannelore Grantham Environmental Trust. Fruit nut alley cropping in New York. Media Source Courtesy of Media Authorship Propagate Ventures Close Authorship “My hope is that they can help farmers diversify their production systems and sequester carbon,” says Eric Smith, investment officer for the trust. “In a perfect world, we’d have 10 to 20 percent of U.S. land production in agroforestry.” For the past few years, private sector interest in “sustainable” and “climate-friendly” efforts has skyrocketed. Haim Israel, Bank of America’s head of thematic investment, suggested at the World Economic Forum earlier this year that the climate solutions market could double from $1 trillion today to $2 trillion by 2025. Flows to sustainable funds in the U.S. have been increasing dramatically, setting records even amid the COVID-19 pandemic, according to the financial services firm Morningstar. While agriculture investment is only a small subset of these numbers, there are signs that investments in “regenerative agriculture,” practices that improve rather degrade than the earth, are also increasing rapidly. In a 2019 report , the Croatan Institute, a research institute based in Durham, North Carolina, found some $47.5 billion worth of investment assets in the U.S. with regenerative agriculture criteria. “The capital landscape in the U.S. and globally is really shifting,” says David LeZaks, senior fellow at the Croatan Institute. “People are beginning to ask more questions about how their money is working for them as it relates to financial returns, or how it might be working against them in the creation of extractive economies, climate change or labor issues.” Agroforestry , the ancient practice of incorporating trees into farming, is just one subset of regenerative agriculture, which itself is a subset of the much larger ESG, or Environmental, Social and Governance, investment world. But according to Smith and Steinberg, along with a small but growing number of financiers, entrepreneurs and company executives, it is one particularly ripe for investment. Although relatively rare in the U.S., agroforestry is a widespread agricultural practice across the globe. Project Drawdown, a climate change mitigation think tank that ranks climate solutions, estimates that some 1.6 billion acres of land are in agroforestry systems; other groups put the number even higher. And the estimates for returns on those systems are also significant, according to proponents. Ernst Götsch, a leader in the regenerative agriculture world, estimates that agroforestry systems can create eight times more profit than conventional agriculture. Harry Assenmacher, founder of the German company Forest Finance, which connects investors to sustainable forestry and agroforestry projects, said in a 2019 interview that he expects between 4 percent and 7 percent return on investments at least; his company already had paid out $7.5 million in gains to investors, with more income expected to be generated later. This has led to a wide variety of for-profit interest in agroforestry. There are small startups, such as Propagate, and small farmers, such as Martin Anderton and Jono Neiger, who raise chickens alongside new chestnut trees on a swath of land in western Massachusetts. In Mexico, Ronnie Cummins, co-founder and international director of the Organic Consumers Association, is courting investors for funds to support a new agave agroforestry project. Small coffee companies, such as Dean’s Beans , are using the farming method, as are larger farms, such as former U.S. vice president Al Gore’s Caney Fork Farms. Some of the largest chocolate companies in the world are investing in agroforestry. “We are indeed seeing a growing interest from the private sector,” says Dietmar Stoian, lead scientist for value chains, private sector engagement and investments with the research group World Agroforestry (ICRAF). “And for some of them, the idea of agroforestry is quite new.” Part of this, he and others say, is growing awareness about agroforestry’s climate benefits. Gains for the climate, too According to Project Drawdown, agroforestry practices are some of the best natural methods to pull carbon out of the air. The group ranked silvopasture , a method that incorporates trees and livestock together, as the ninth most impactful climate change solution in the world, above rooftop solar power, electric vehicles and geothermal energy. If farmers increased silvopasture acreage from 1.36 billion acres to 1.9 billion acres by 2050, Drawdown estimated carbon dioxide emissions could be reduced over those 30 years by up to 42 gigatons — more than enough to offset all carbon dioxide emitted by humans globally in 2015, according to NOAA  — and could return $206 billion to $273 billion on investment. Part of the reason that agroforestry practices are so climate friendly (systems without livestock, or “normal” agroforestry such as shade grown coffee, for example, are also estimated by Drawdown to return well on investment, while sequestering 4.45 tons of carbon per hectare per year) is because of what they replace. Photo of silvopasture system by Sid Brantley. Image via U.S.  National Agroforestry Center . Media Source Courtesy of Media Authorship Sid Brantley/U.S. National Agroforestry Center Close Authorship Traditional livestock farming, for instance, is carbon intensive. Trees are cut down for pasture, fossil fuels are used as fertilizer for feed, and that feed is transported across borders, and sometimes the world, using even more fossil fuels. Livestock raised in concentrated animal feeding operations (CAFOs), produce more methane than cows that graze on grass. A silvopasture system, on the other hand, involves planting trees in pastures — or at least not cutting them down. Farmers rotate livestock from place to place, allowing soil to hold onto more carbon. There are similar benefits to other types of agroforestry practices. Forest farming, for instance, involves growing a variety of crops under a forest canopy — a process that can improve biodiversity and soil quality, and also support the root systems and carbon sequestration potential of farms. A changing debate Etelle Higonnet, senior campaign director at campaign group Mighty Earth, says a growing number of chocolate companies have expressed interest in incorporating agroforestry practices — a marked shift from when she first started advocating for that approach. “When we first started talking to chocolate companies and traders about agroforestry, pretty much everybody thought I was a nutter,” she says. “But fast forward three years on and pretty much every major chocolate company and cocoa trader is developing an agroforestry plan.” What that means on the ground, though, can vary widely, she says. Most of the time a company’s sustainability department is pushing for agroforestry investment, not the C-suite. Some companies have committed to sourcing 100 percent of their cacao from agroforestry systems. Others are content with 5 percent of their cacao coming from farms that use agroforestry. In a perfect world, we’d have 10 to 20 percent of U.S. land production in agroforestry. What a company considers “agroforestry” also can be squishy, she points out — a situation that makes her and other climate advocates worry about companies using the term to “greenwash,” or essentially pretend to be environmentally friendly without making substantive change. “What is agroforestry?” says Simon Konig, executive director of Climate Focus North America. “There is no clear definition. There’s an academic, philosophical definition, but there’s not a practical definition, nothing that says, ‘It includes this many species.’ Basically, agroforestry is anything you want it to be, and anything you want to write on your brochure.” He says he has seen cases in South America where people have worked to transform degraded cattle ranches into cocoa plantations. They have planted banana trees alongside cocoa, which needs shade when young. But when the cocoa is five years old and requires more sun, the farmers take out the bananas. “They say, ‘it’s agroforestry,’” Konig says. “So there are misunderstandings — there are different objectives and standards.” He has been working to produce a practical agroforestry guide for cocoa and chocolate companies. One of the guide’s main takeaways, he says, is that there is not a one-size-fits-all approach to agroforestry. It depends on climate, objectives, markets and all sorts of other variables. This is one of the reasons that agroforestry has been slow to gain investor attention, says LeZaks of the Croatan Institute. “There really aren’t the technical resources — the infrastructure, the products — that work to support an agroforestry sector at the moment,” LeZaks says. While agroforestry is seen as having significant potential for the carbon offset market, its variability makes it a more complicated agricultural investment. Another challenge to agroforestry investment is time. Tree crops take years to produce nuts, berries or timber. This can be a barrier for farmers, who often do not have extra capital to tie up for years. It also can turn off investors. “People are bogged down by business as usual,” says Stoian from World Agroforestry. “They have to report to shareholders. Give regular reports. It’s almost contradictory to the long-term nature of agroforestry.” This is where Steinberg and Propagate Ventures come in. The first part of the company’s work is to fully analyze a farmer’s operation, Steinberg says. It evaluates business goals, uses geographic information system (GIS) components to map out land, and determines the trees most appropriate for the particular agricultural system. With software analytics, Propagate predicts long-term cost-to-revenue and yields, key information for both farmers and possible private investors. After the analysis phase, Propagate helps implement the agroforestry system. It also works to connect third-party investors with farmers, using a revenue-sharing model in which the investor takes a percentage of the profit from harvested tree crops and timber. Additionally, Propagate works to arrange commercial contracts with buyers who are interested in adding agroforestry-sourced products to their supply chains. “Here’s an opportunity to work with farmers to increase profitability by incorporating tree crops into their operations in a way that’s context specific,” Steinberg says. “And it also starts addressing the ecological challenge that we face in agriculture and beyond.” This report is part of Mongabay’s ongoing coverage of trends in global agroforestry. View the full series here . Pull Quote In a perfect world, we’d have 10 to 20 percent of U.S. land production in agroforestry. Topics Food & Agriculture Forestry Forestry Reforestation Regenerative Agriculture Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Courtesy of National Agroforestry Center Close Authorship

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Investors say agroforestry isn’t just climate friendly — it’s profitable

The Estée Lauder Companies’ sustainability leader on racial justice, ‘sector-agnostic’ solutions

July 27, 2020 by  
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The Estée Lauder Companies’ sustainability leader on racial justice, ‘sector-agnostic’ solutions Heather Clancy Mon, 07/27/2020 – 01:30 In the four years since Nancy Mahon assumed responsibility for CSR and sustainability strategy at The Estée Lauder Companies — she’s currently senior vice president of corporate citizenship and sustainability — her team has launched a series of new initiatives that are a “first” among her organization’s sector. The list includes the company’s first virtual power purchase agreement for 22 megawatts, a move made in pursuit of its 2020 net-zero carbon emission goal. More recently, it energized on-site two solar arrays — one at its Melville, New York, campus that will produce 1,800 megawatt-hours of power annually, and a smaller one at the Aveda brand’s campus in Minnesota. The New York installation will provide 100 percent of the electricity required for its Joseph H. Lauder office facility, while the Minnesota one will contribute up to 50 percent — the remainder of its power will come from utility-sourced wind power.  Moreover, Estée Lauder Companies also has declared its intention to make 75 percent to 100 percent of its packaging recyclable, refillable, reusable, recycled or recoverable by 2025 — the strategy will depend on the needs of individual brands. As with many companies heavily dependent on nature for product ingredients, Estée Lauder Companies is developing biodiversity action plans and becoming far more attuned to its role in deforestation, afforestation and reforestation. And befitting its heavily female clientele, the company also funds initiatives focused on raising up girls and women, such as HERProject, a BSR initiative aimed at supporting low-income women in global supply chains. I recently checked in with Mahon, one of this year’s 25 Badass Women in Sustainability , to get an update on how her priorities have shifted in light of the COVID-19 pandemic and the corporate awakening about systemic racism. In mid-June, the company issued a series of sweeping new racial equity policies , including reaching “U.S. population parity” for Black employees at all levels of the company within five years, doubling the amount spent on sourcing ingredients, packaging materials and supplies from Black-owned businesses over the next three years, and committing $10 million over the next three years to support racial and social justice initiatives. “Moving forward, I think where we are energized as a division — it’s become super clear — [is] on how core the work we do is to the business, not only the environmental side, but also the social side,” Mahon told me. Following are excerpts from our conversations, edited for clarity and length. Heather Clancy: How has the COVID-19 pandemic changed the focus of the Estée Lauder sustainability team, if at all?  Nancy Mahon:  The clear disparate impacts of COVID-19 across countries and communities has really highlighted, and I think really illustrated, the intersection … of gender justice and social injustice, essentially, and racial injustice. While before that intersectionality might have been a little obtuse for folks, it’s much clearer now that if you come from a community where there’s high rates of pollution, there’s a huge intersection between high rates of pollution, access to healthcare and health outcomes and COVID-19 outcomes. The speed, the velocity and the ferocity of COVID-19 really highlighted that in a way that both unearthed that underlying reality and threw a spotlight on it. And also for consumers, [it] really allowed an opportunity to focus on what was most important in their lives around healthcare, around their families, and put an emphasis — really, I would say it hasn’t changed it, but it has really accelerated consumer interest, particularly — on supply chains, which is super interesting …  Similar to HIV, there is a question of what [we will] make of this moment and how will we as stewards of funds or stewards of companies or stewards of our families make a difference. Internally, what it’s allowed us to do in a very agile, very energizing way is move very quickly across different functions to stand up programs that we were planning on setting up. For instance, we created an employee relief fund, and we had targeted that we were going to do it basically this fall. When [COVID-19} happened, we thought, “You know what? We have to do this right away.” We had incredible partnership from [human resources] and [information technology] and legal, and we started up right away, then globalized it.  We also created [an accelerated racial and social justice grants campaign] in a matter of a couple of weeks. In that way, we’ve had opportunities, which hopefully we’ve seized upon. Moving forward, I think where we are energized as a division — it’s become super clear — on how core the work we do is to the business, not only the environmental side, but also the social side. Clancy: In a previous role, you were very closely involved with addressing the AIDS crisis, which is a humanitarian but also an economic crisis as well. How are you layering that perspective into the strategy as you’re mobilizing around COVID-19?  Mahon: If there is a positive to all of this, it’s that in terms of HIV, it took us well over two decades to have a deep discussion around structural racism or classism or the ways in which structures like a criminal justice system or a healthcare system basically disadvantage certain communities. It was always very hard to get at that discussion. It was much easier to fund street outreach or various research pieces or services than it was to really say, “We have to look at the way we act — either as consumers or as companies — and we might need to give something up, in addition to actually giving.” …  What also then is a big emphasis, understandably, is the movement around action, whether it be FDA approval of drugs or the acceleration of accessibility of healthcare or integration of HIV into other healthcare systems. And we’re seeing that very quickly now, the fact that out of the gate we’re funding a group like Equal Justice Initiative around structural racism and the criminal justice system is exciting.  There has been one difference: The acceleration of funding in the field. I was on a call [recently] and Darren Walker from Ford Foundation, who’s so eloquent, basically said that there is roughly a half a billion dollars now in the field of racial and social justice, whereas last year there was only 10 percent of that.  Clancy: Wow.  Mahon:  Similar to HIV, there is a question of what [we will] make of this moment and how will we as stewards of funds or stewards of companies or stewards of our families make a difference. How will we change our behavior? The exciting moment that we have. The complexity, of course, is that it’s up against enormous economic loss, a lot of fear — which we always had in HIV, but we didn’t have the economic backdrop that we currently have overall to COVID-19. But there’s a lot of great people who are rowing in the same direction now. The question is how do we integrate ourselves? How do we sit in on committees that are focusing on office reopenings or how we’re doing with COVID? How do we integrate social impact and environmental impact into the way we do business every day, and how we as a luxury company show up in our communities? One of our strongest brands, Aveda, is in Blaine, Minnesota, and we’ve had town halls and will continue to have town halls with our employees there, and how are they engaging … [and] thinking about how they can help? We spent a lot of time thinking about, well, what are virtual volunteering opportunities? What are the ways that we can basically help our employees channel their passion? We decided that we were going to allow, in our year one [of our response], our employees to give away most of the money. We created [an internal] five-times matching campaign, and the groups we selected were Black Lives Matter Global Foundation Network, Equal Justice Initiative, Race Forward, NAACP Legal Defense Fund [and Educational Fund]. And we basically said to our employees: Every dollar that you give, [the company] will match it five times. We saw literally over 4,000 employee [donations]. We had a higher engagement rate than we’ve ever seen. People were posting on their social channels. We’ll be giving away [more than] $2.3 million through [company matches]. Clancy: Putting the long-term lens on, have there been any adjustments to your long-term corporate sustainability plans in this period? Have your priorities changed?  Mahon: I don’t think they changed. We have been fortunate in that our overall performance over the last I’d say two years in particular has really accelerated. We’re getting recognized by CDP or MSCI or ISS for that, which we find very gratifying. It feels like directionally we’re headed in the right way. And we certainly see in our brands, our consumers and our employees are basically saying, “We want more of this.” While it hasn’t changed the direction, it’s definitely accelerated. For instance, our climate work. We hit [RE100] early [in the United States and Canada]. We’re looking to hit our science-based target early…  We are leaning in on our social impact work, which we’re historically very well-known for. We have integration with social justice. That was an area in our social impact work which we hadn’t done in the past. Many of us had done somewhat similar work. We leaned in and spoke with allies and the Ford Foundation and some of the great foundations that are doing this work. We are looking forward to being part of a broader community and trying to leverage our corporate microphone and our company values to play an even bigger role. So I’d say [we’re moving] faster, perhaps more dimensionalized, and definitely [have a] better understanding not only how do we fund racial and social justice, but how do we as a business take concrete action around hiring and what our creative marketing looks like. So that’s very exciting, because what you don’t want as somebody in my job is to kind of be the nice people that aren’t really integrated into the business.  Clancy: Much of the work on renewable energy has really focused on electricity. Obviously, one of the toughest areas and processes to decarbonize is manufacturing. What solutions are you exploring for your production facilities? Mahon: Waste and water and energy are all linked together. Within each facility, we have an incredible team that’s been focusing on this for quite some time, which is looking at how efficient is our water use? Is there a way to reduce water use? Have we maxed out solar? And are there internal solutions before we move to offsets that we can buy to reduce our energy use? And the answer there is yes. It does vary somewhat by country, and by the state of the green energy and green finance in those countries. Also, as you know, the government plays an important role, and of course, being in the U.S., we’ve seen a real rollback in terms of incentivizing green practices … What you don’t want as somebody in my job is to kind of be the nice people that aren’t really integrated into the business. The best thing that we can do is help the market grow so there are more alternatives for companies like ours. We don’t have to do any convincing at this point. It’s really about the level of sophistication of what we can invest in, and also kind of a deeper discussion about offsets, the quality of offsets, and where do offsets get us.  Clancy: Can you share your vision for sustainable packaging? How do things like reuse or refillable containers fit into that?  Mahon : What we’re trying to do, really, is to give the brand [presidents] the most flexibility they can to get to sustainable packaging, and while at the same time reducing plastics and reducing carbon footprint. And that’s kind of a juggling act, frankly, because in many instances it involves added cost. We have a five-year glide path for every single brand. The ability to shift from plastic to glass is easier in skincare. Makeup innovation and sustainable packaging is a new frontier, and we’re really active in that. As you likely know, the size of makeup packaging, particularly samples, is too small — it falls through the filters in the MRFs — so it’s one of the areas that we’re really focusing on now, and really inviting innovation.  Clancy: You’re very excited about forestry and forest options as a means of carbon removal. Are there any particular things you’re looking at that you can mention? Can you elaborate?  Mahon: There’s been some companies that have basically supported, through grant funds, the creation and preservation of forests. And so we are looking at that. More directly, though, we would love to have direct investment in forestry as part of our climate portfolio, and an ability to create green energy. It gets somewhat complex, but obviously, we’re a beauty company, and we don’t want to be in the business of running forests … Those are the discussions that we’re having now, and we’ve been looking at various things over the last couple of years. We don’t have anything specific. We’re basically in the due diligence phase on a couple of things. But because this moves so quickly, it doesn’t really make any sense to name names. But we would love, as a result of the article, to certainly invite both other companies who are looking at this [to talk about this and also have] a larger discussion about private/public partnerships around encouraging investment in forest preservation. We recently published a no deforestation policy, as many companies have, so there’s a nice intersectionality there between no deforestation and improving our climate component.  Clancy: I have two more questions. One is just a thread I hear often. What role will collaboration play in The Estée Lauder Companies’ strategy? What sorts of partnerships are you prioritizing?  Mahon: One of the exciting aspects of our company and our board … is we have folks who’ve worked in all different sectors. We have a lot of folks who’ve worked in government, like myself. We’ve worked in nonprofits. We’ve worked in for profits. So really, in order to move the ball down the field in a meaningful way, whether in social impact form or another form of impact, we have to basically look at this in a sector-agnostic way in which we really have company discussions about what we’re doing in climate.  What does the government bring to the table? OK, there’s tax incentives. They can give various breaks in various laws, regulatory, both the carrot and the stick. What does business bring? Well, business brings enormous amounts of business discipline of understanding markets, understanding consumer needs, understanding how to scale a solution, understanding how to, candidly, abandon a solution if it’s not selling. And then NGOs clearly bring a lot to the table in terms of advocacy.  As we’ve moved so rapidly in the for-profit sector being in favor of green energy and of strong climate solutions, the role I believe of NGOs will be more to be a bridge between government and I would say also private foundations [to come up with solutions]. For instance, in our VPPA, we will have excess green energy. Do we want to be in a position as a beauty company of selling energy, green energy? Or would we rather donate it? We’re having some conversations with the Rockefeller Foundation about, “Well, could we figure out a way where we could just donate it?” That’s where we really do need these cross-sector solutions.  Clancy: My last question is what do you feel is your most important priority as a chief sustainability officer in this moment? Mahon: At the end of the day, the great pleasure and complexity and entrepreneurism of CSO jobs is that we don’t own the P&Ls generally of the issues we need to influence. So, I would say the biggest priority really is continuing to listen to our key stakeholders with empathy, and be as responsive as we can, to try to run alongside the train of the business … A lot of what we do is obviously bring a substantive area of expertise, but also integrate as best as we can empathically to the business, and to drive value. At the end of the day, if we drive value for communities and our shareholders and our consumers, then we drive value for the business, and that is I think the great challenge … How do you sit at the table as a business person and understand and have empathy for the great demands being placed for instance on our retail team, and at the same time build climate solutions that help those retail teams, and don’t seem sort of pie in the sky and divorced from the rest of the business? Ultimately, how do we leverage the passions and the interests of our employees and our consumers and now our investors, which is great. Because that creates an unlimited path.  This article was updated on July 27, 2020, at the request of The Estée Lauder Companies to correct Mahon’s tenure in her current role, and provide more detail about some of the included commitments discussed during the interview. Where changes have been made to her verbatim comments, they are noted with brackets. Pull Quote Similar to HIV, there is a question of what [we will] make of this moment and how will we as stewards of funds or stewards of companies or stewards of our families make a difference. What you don’t want as somebody in my job is to kind of be the nice people that aren’t really integrated into the business. Topics Corporate Strategy Social Justice Corporate Social Responsibility Racial Justice Forestry Deforestation 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

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The Estée Lauder Companies’ sustainability leader on racial justice, ‘sector-agnostic’ solutions

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