In the News
In this climate, it is tempting to take an ever more short-term view of financial performance. Companies that take a long-term view and consider a wide range of stakeholders – such as customers, employees, partners, the environment, and the communities in which we serve – have been shown to be more sustainable, innovative, and profitable.
Recent data substantiates what we’ve believed all along: Brands taking stands is a definite movement–not a fleeting moment.
Without an array of ecosystems and species, it’s tough for farmers to grow crops or ranchers to raise animals. Global biodiversity protection requires $100 billion annually, according to a previous study one of us conducted, yet the international community spends up to $10 billion each year on biodiversity conservation.
Following the release last month of its groundbreaking guide to help financial institutions understand and assess their reliance on natural capital, this week the Natural Capital Finance Alliance (NCFA) launched the world’s first comprehensive tool linking environmental change with its consequences for the economy.
Today, the economic models of many countries are built on the premise of ‘take-make-consume-dispose’ patterns of growth. Recent developments in the circular economy could make more sustainable development possible. In a nutshell, PSS involves selling physical products as well as the provision of after-sales services so that businesses are capable of satisfying consumers’ demands.
“Campesinos” are driving the evolution of maize in North America
During the rainy season, García Cuenca selects the seeds he stored the previous cycle, plants them and cares for the seedlings. Multiply that process by the millions of other campesinos in Mexico and you get billions of genetically different maize plants—each exposed to a wide diversity of environments and subjected to unique selection practices.
As more companies recognize the value of enhanced sustainability reporting and publicize the positive environmental features of their products and services, they should also be attentive to greater public scrutiny of “green” claims. Companies that engage in greenwashing—asserting exaggerated, misstated, or immaterial environmental claims—are increasingly exposed to reputational damage and legal battles, as regulators, investors, and civil society actors dedicate more resources to scrutinizing environmental claims. Companies also face growing pressure from investors to publish standardized and rigorous sustainability information that allows for cross-industry benchmarking.
Indonesia is set to make consumer goods manufacturers more responsible for managing the waste from their product packaging, in a bid to tackle one of the worst plastic trash problems in the world.
With the recent momentum in the U.S. for more ESG transparency, it comes as no surprise that a group of investors have petitioned the SEC to require mandatory ESG disclosure.
If Capitalism 2.0 is to be more humane, conscientious and inclusive than its previous iteration, social impact must shift from a fringe consideration to the center of business, government and investment decisions. Key indicators show that responsible investment returns are on par with market returns in developed markets and are superior in emerging markets. We can embed the impact revolution but first, we must achieve three things:
Early marketing for products promising sustainability was all about what they “weren’t.” Tofurky wasn’t meat. Soy milk wasn’t dairy. Solar wasn’t coal. Positioning against the negative helped companies attract consumers who were revolting against the polluting impacts of standard manufacturing practices and products. But doing so ignored what potential customers still wanted, whether a product was sustainable or not: delicious taste, high performance, reliable quality and comfort, and overall satisfaction.
The Clean Ocean Initiative will focus on projects in coastal and riverine areas in developing countries in Africa, Asia and the Middle East. The projects will finance the collection, sorting and recycling of waste before it reaches rivers and streams. According to EIB, 90% of plastic waste enters the ocean through ten major river systems in Africa and Asia. These regions face challenges in access to regular waste collection, and have limited waste disposal control.
A group of global investor organisations has urged listed companies and ESG reporting standard setters to do more to agree an approach to the treatment and inclusion of environmental, social and corporate governance (ESG) information in company disclosure and reporting.“It is important to state clearly that the group believes a workable ‘solution’ can be achieved with the existing data providers and standard setters,” it said in a discussion paper published yesterday.
The Prince of Wales’ Accounting for Sustainability project and the International Integrated Reporting Council intend to promote sustainability reporting and integrated reporting at the World Congress of Accountants that’s set to take place in Sydney, Australia in early November.
As the sustainability movement grows, so too do the ambiguities under which boards of directors govern. Boards are bound by fiduciary duties, including the duty of loyalty, which requires that a board acts in good faith and in the best interest of the corporation. Historically, the “best of the corporation” was interpreted to mean maximizing profits solely for the shareholder. Many regulators, academics, politicians, and investors are now challenging this concept, contending that a corporation is best served when it incorporates “more nuanced and tempered approaches to creating shareholder value” and considers the interests of a broader set of stakeholders, such as employees, customers, and communities.
In this fiercely competitive economic climate, companies are increasingly aware of the importance of managing and reporting on their financial, social and environmental risks and opportunities – often referred to as the triple bottom line. Furthermore, in order to rely on this information, investors are looking for this reported sustainability information to be independently assured.
The American Institute of CPAs (AICPA) has developed a new toolkit that provides resources to help prepare CPAs to meet these growing sustainability-related demands.
A new report published this week by the Association of Chartered Certified Accountants identifies 12 characteristics behind new business model design that are being combined by organizations around the world in different ways to create new sources of value. The report also points out a set of new skills that will be required for accountants to successfully navigate the contours of a changing economy and support business model innovation across the three spheres of value proposition, value creation and value capture.
Environmental, social, and governance reporting has become mainstream in corporate America. In addition to responding to stakeholder concerns, ESG reporting can also inform decisions that lead to bottom line benefits — if companies are geared up to get the most out of their own internal assessment.