Tag Archives: The Conference Board
So Where Is The Corporate Sustainability Journey a Half-Year Into the Dramatic Impacts of the Coronavirus?
August 19, 2020 — in the midst of a strange summer for all of us
The questions may be going around in your universe and the answers offered up, say, inside the corporate enterprise as the senior executives and function, business unit and other managers meet the challenges posed by the virus pandemic, related economic disruption and civil protests on a number of topics. This is about Quo Vadis, Our Sustainability Journey!
The Conference Board is a century-old, well-regarded business organization founded by corporate CEOs who were focused on "knowledge-sharing" at the beginnings of modern corporate management theories.
Today, 1,200 companies are involved as member organizations, typically with varying managers' participation in sections devoted to specific topics and issue areas. These include Economy, Strategy & Finance; ESG (including Corporate Citizenship and Corporate Governance); Human Capital Management (including Diversity, Equality and Inclusion) …and other focus areas that fit the functional needs of today's companies.
At G&A Institute we closely follow the extensive research and insights regularly shared by the Board as part of its foundational mission – sharing knowledge. This week The Conference Board issued its survey results for the question(s) asked of corporate connections: "What impact, if any, do you expect the COVID-19 crisis to have on your company's overall sustainability program?"
If we asked our corporate colleagues that question, we could expect the answers to be all over the place. The Board did ask, and the answers were "sharply divided", staff reported.
The Conference Board conducted two different surveys — one at more than 200 companies, focused on generating responses from general counsel, corporate secretaries and investor relations execs; the other queries, at 40 companies with questions asked of dedicated sustainability executives.
Top line: Three-in-ten sustainability execs expect the current health crisis to increase emphasis on their "E" and "S" efforts – while only one-in-ten of their fellow governance execs agree with that premise.
Example: responding to whether or not COVID-19 "put general sustainability efforts on temporary hold," only 7% of sustainability executives said yes, while 19% of legal, governance and IR folks felt that way.
The short survey results are available for you in a Top Story.
Says The Conference Board staff: "This divergence of opinions reveals companies need to reach an internal consensus on the crisis' impact on their sustainability programs and be prepared to communicate [it] in a cohesive and consistent manner." Good advice!
Inside the corporate structure, people may have differing views on what is "sustainability," what their own company's sustainability programs are about, (Strategy? Actions? Engagements? Achievements? Third-Party Recognitions?) And senior execs may have different opinions about the real impact of the virus on the company's operations — not all impacts are yet fully understood as the pandemic roars on around the world.
But there are positives being reported. For example, we are seeing reports every day now of increased productivity at some companies because people are at home and not wasting hours commuting. Emails are being answered early in the morning and way after dark — increasing the firm's communication and productivity.
What is the outside view of this, beyond the corporate sector?
While inside the corporate enterprise there may be differences of opinion on the direction of the sustainability journey, here's some important "outside" news from Sam Meredith at CNBC: "Sustainable investment funds just surpassed US$1 trillion for the first time."
He cited recent UBS research that the global public sector has been stepping up support for green projects. And, he cited a Morningstar report that spelled out factors contributing to the record 2Q inflows to ESG mutual funds. Investors are putting their money where their "sustainability beliefs" may be, we could say.
Adding some intelligence to the results of our reading of The Conference Board survey results, Morningstar says: "…the disruption caused by the virus highlighted the importance of building sustainable and resilient business models based on multi-stakeholder considerations…"
Of course, there are no easy answers "inside" to harmonize the views of the executives responding to surveys about their company's sustainability efforts. But we can offer some advice. Looking at the almost 2,000 corporate sustainability et al reports our team analyzed over the past year, we are seeing the formulas for success in the corporate sustainability journey.
People at the top (board room and C-suite) are the champions of the corporate sustainability efforts. Strategy is set at the top and communicated effectively throughout the organization. ("Strategem" is the root of the work — in ancient Greece, this was the work of the generals. The leaders inside the company must lead the sustainability journey!)
Goals are to be set (carbon emissions reduction, increased use of renewable energy, reduction of waste to landfill, water usage and water discharge, and much more); progress is regularly measured and managed. And disclosed.
Serious attention is paid to the firm's diversity & inclusion efforts and results; effective human capital management (HCM) is a priority at all levels, and in all geographies.
Meaningful engagements — internally and with external parties — are top priorities at multiple levels. Supply chain and sourcing efforts are monitored and bad actors and bad practices are eliminated, with management understanding that the firms in their supply network are part of their ESG footprint.
And the periodic public reporting on all of the above and more is based on the materiality of data and information — the stuff the investors want to know more about for their analysis and portfolio management.
Senior leadership understands that corporate sustainability is not about just "feeling good" but an important element of playing to win in the competition for capital and achieving industry leadership and being recognized for their efforts and accomplishments. As Morningstar advises, sustainability is part of the business model.
So in the context of the ongoing Covid-19 crisis, the resulting economic and financial dislocations, the caring for the firm's valuable human assets..quo vadis for your corporate sustainability journey?
Interesting conversations going on, for sure. Read the survey results from The Conference Board survey and see what you agree/disagree. Thanks to our colleagues at the board for all the management knowledge that they share.
Will Sustainability Efforts Get a Boost from the COVID-19 Crisis? Opinions Are Sharply Divided (Source: The Conference Board)
Sustainable investment funds just surpassed $1 trillion for the first time on record(Source: CNBC)
Morningstar's Global Sustainable Fund Flows Report for Q2 of 2020 (Source: Morningstar)
Posted in Business & Society, Business Case, Corporate Citizenship, Corporate Governance, Corporate Purpose, Corporate Purpose - Virus Crisis, Corporate Responsibility, ESG Issues, Materiality, Supply Chain, Sustainability Professionals, Sustainability Reporting, The Corporate Citizen and Society	| Tagged CNBC, Corporate governance, Diversity, Economy, Equality, ESG, Finance, HCM, Human Capital Management, Inclusion, Materiality, Morningstar, Pandemic, Sam Meredith, Strategy, Sustainable Investment Funds, The Conference Board, UBS	| Leave a reply
"Total Impact Valuation" – Monetizing the Enterprise's "Cost-Benefit Analysis" of the Impact on Society? This is for CEOs – Advice From The Conference Board
Posted on July 16, 2018 by Hank Boerner
by Hank Boerner – Chair & Chief Strategist, G&A Institute
Today's question for corporate CEO's: Have you examined your company's "Total Impact Valuation," a new approach being advanced by The Conference Board, wherein the enterprises' impact on society is monetized (cost/benefit evaluated and value attached)?
A small group of companies is doing these exercises. Think of their efforts to date as expanding the usual reporting of "Input/Output" to seriously consider (1) Outcomes, (2) Impacts, (3) Cost and Benefit to Society (and to the company).
Such firms as BASF (the German chemical giant), cement industry leaders Holcim/Ambjua Cement and LafargeHolcim, Samsung, Akzonobel (materials), ABN AMRO (Holland, financial services), Volvo (vehicles), and Argo (materials, Colombia) have been doing something along these lines and reporting results for a few years now on web sites, in sustainability reports, in financial statements, in a "total contribution report" or "value-added statement", and by other means.
Some of these disclosures are third party assured (Argo's is by Deloitte) and otherwise guided; the big accounting firms are involved (PwC and KPMG included).
This appears to us to have the potential to take corporate sustainability reporting to expanded (new) levels for at least the publicly-traded large caps – that is, if enough investors jump aboard the concept and ask for the information. (Think about public discussion of the company's "plus or minus" impact on society beyond the fences.)
Thomas Singer, Corporate Leadership research leader at The Conference Board, presents findings of his sampling of firms (those identified above) and shares his perspectives on the concept in Chief Executive Magazine – it's our Top Story for you this issue.
BASF shares its "Value to Society" model (there's a link to this in the article). The company, explains Singer, monetizes more than 20 different types of environmental, social and economic impacts, including direct and indirect suppliers and even customer industries.
Author Thomas Singer turns out a good amount of strategic advice to company leaders and has been focusing more in his Director Notes on ESG and corporate sustainability. There's links to his papers and publications for you in the link.
A major drawback here in the U.S.A.: there is no standard benchmark for measuring progress or lack of, and to guide reporting; there is in turn no way to compare company "A" to "B" for investors, ratings analysts and others.
So what do you think – is this a "we're a long way from Kansas, Toto" moment for corporate leaders in terms of expectations of shareholders and stakeholders for what the companies will share in their disclosures of the future? (The "Kansas" reference being the bad old days practices of chemicals and other companies "externalizing" costs to society for environmental mismanagement and minimizing the actual costs of clean up in financial reports.)
The total value practice got underway in Europe – and we will be watching to see if U.S.-based public companies pick up on the concept. Especially those where their foreign peers have the modeling and techniques underway. That is what happened with corporate sustainability and ESG reporting over time.
CEOs Need To Put This Sustainability Trend On Their Radar
(Tuesday – July 03, 2018) Source: Chief Executive – What if America's CEOs could understand the full financial impact their company has on society? It could make them rethink their game plan for how they prevent workplace accidents, lessen air pollution, manage waste – the list…
Posted in Business & Society, Business Case, Corporate Citizenship, Corporate Governance, Corporate Responsibility, Corporate Sustainability, ESG Issues, Financially Material, Investment Case	| Tagged ABN AMRO, Akzonobel, Argo, BASF, Chief Executive Magazine, Deloitte, Holcim/Ambjua Cement, KPMG, LafargeHolcim, PWC, Samsung, The Conference Board, Thomas Singer, Total Impact Valuation, Volvo	| Leave a reply
Cradle-to-Cradle Case History: Shaw Industries
Posted on April 5, 2017 by Hank Boerner
Guest Commentary by Jennifer Moore – at the Conference Board
Content originally prepared for Certification in Corporate Responsibility & Sustainability Strategies – on-line courseware by G&A Institute **
The early 21st century ushered in a new wave of heightened concern about resource scarcity and climate change. Consequently, consumers have been more concerned about the sustainability of the products they purchase and the effects they are having on the environment.
Businesses have also taken on the challenge of incorporating sustainability strategies into their business models. Many more companies are now integrating sustainability practices through product stewardship and their R&D activities.
These companies are focusing on life cycle assessments of their products and are aiming to achieve Cradle-to-Cradle status. As defined by the Ellen MacArthur Foundation, the Cradle-to- Cradle school of thought is an important branch within the circular economy concept.
Cradle-to-Cradle focuses on products that have a positive impact and reduce the negative impacts on commerce through production efficiency (see footnote 1).
Cradle-to-Cradle and circular economy goes beyond the "reduce, reuse, recycle" campaign of the late Twentieth Century to focus more on the design and production of products, rather than on consumption by the consumer.
The authoritative work, "Cradle to Cradle: Remaking the Way We Make Things", authored by Michael Braungart and William McDonough called for a new era of production, wherein, companies should be focusing more on "doing more good," rather than "doing less bad."
The goal and focus should be on the end of the product's lifecycle, and whether it will either be safely re-entered into the environment — or be recycled back into production.
Cradle-to-Cradle aims to achieve three things: (1) eliminate the concept of waste, (2) power with renewable energy, and (3) respect human and natural systems. (2)
This concept argues that resource consumption and economic growth should not be isolated from each other. In fact, they often go hand-in-hand. (3)
The private sector is not siloed; it has been highly influenced by the public sector and discussion forums. Many non-governmental organizations (NGOs), driven by public demand, have advocated for the advancement of a circular economy. The World Economic Forum, Oxfam International and the United Nations in particular have been vocal about transitioning to a circular economy.
Also, the emphasis of the Sustainable Development Goals (SDGs) released in 2016 by the United Nations is on developing a more circular economy and seeking to implement sustainable development across the UN member states. (4)
While the SDGs are driven by politics and protecting human rights, the goals cannot be achieved without businesses and were developed with input from the private sector. There is business value for companies to align their strategy with the SDGs. (5)
Many companies have recognized the benefits of aligning their goals with the SGDs and the relationship between resource consumption and economic growth.
Consumers are now expecting companies to provide products that are eco-friendly and reduce resource waste. According to a survey conducted by Nielsen in 2014, "55 percent of on-line consumers indicated they were willing to pay more for products and services provided by companies that are committed to positive social and environmental impact, an increase from 50% in 2010 and 45% in 2011." (6)
The Business Community's Embrace of Cradle-to-Cradle
Businesses across all industries are now developing their product stewardship products to meet these consumer demands. Companies cite "customer demand for solutions that address global sustainability challenges, such as climate change and resource scarcity" as primary drivers of sustainable product initiatives. (7)
For example, 3M is striving for 40 per cent of their new products to be sustainable and Kimberly-Clark is developing solutions for used diapers. One exemplary model of sustainable product stewardship is Shaw Industries' dedication to Cradle-to-Cradle.
The Shaw Industry Model
Shaw Industries is the largest producer of carpet tile in North America. While carpet tiles can have a lifespan of 10-to-25 years, commercial owners and tenants often update their facilities more frequently than that to reflect contemporary trends, resulting in a high-waste industry.
Historically, when the time came for flooring to be removed from businesses, schools, retailers, hospitals and other properties – whether for wear-and-tear or aesthetics, it was sent to landfills.
Recognizing the opportunity to create a better solution for customers and to create a product that would help advance toward a more circular economy, Shaw developed EcoWorx-backed carpet tile, which it introduced in 2008 and continues to optimize for sustainability performance.
The world's first Cradle-to-Cradle Certified carpet tile — EcoWorx — was designed for reuse. To create a carpet tile that could be infinitely recycled with no loss of quality meant removing PVC, phthalates and other chemicals. As a result of its meticulous design process, Shaw understands what's in its EcoWorx products and, therefore, what's going into the next generation of its products.
Today, with 16 years and more than 3 billion square feet of EcoWorx installed, Shaw continues to optimize the product's performance in alignment with Cradle-to-Cradle criteria – material health, material reutilization, energy, water and social responsibility.
Most recently, Shaw worked with one of its suppliers to remove an ingredient from its latex that was added to the list of banned chemicals within version 3 of the Cradle-to-Cradle Certified Products Program Standard.
Further, the company employs sustainable manufacturing practices – making efficient use of materials and natural resources, using alternative and renewable energy sources when possible, and designing and operating its facilities and manufacturing processes in accordance with widely recognized sustainability and safety standards.
It completes the sustainable manufacturing process by delivering its products using the most efficient mode of transportation feasible while meeting customer deadlines.
Shaw has committed itself to embracing Cradle-to-Cradle practices and has lead the way in carpet reclamation in the flooring industry. Today, 65 percent of its products – commercial and residential – are Cradle-to-Cradle Certified, with a goal of designing 100% to Cradle-to-Cradle principles by 2030.
Not only is Shaw committed to upcycling within its own operations, it also looks for opportunities in other industries.
For example, the company converts plastic drink bottles into residential carpet through a joint venture with DAK Americas: The Clear Path Recycling Center in Fayetteville, NC produces 100 million pounds of clear flake each year, recycling approximately three billion plastic drink bottles annually.
Furthermore, in 2016 alone, Shaw supplied more than 200 million pounds of post-industrial waste to other businesses for a variety of recycled content needs. For instance, the wood flour – waste fiber from hardwood flooring operations – is used by a major producer of composite decking and the minimal waste from its resilient manufacturing facility is used to make garden hoses.
The Future for Cradle-to-Cradle in Industry
Today, sustainable leadership companies, like Shaw, can strive to achieve cradle-to-cradle production through the certified program by the Cradle-to-Cradle Products Innovation Institute.
The Institute examines certifiable products in five (5) quality categories – (1) material health, (2) material reutilization, (3) renewable energy and carbon management, (4) water stewardship, and (5) social fairness. (Footnote 8)
Sustainability managers must partner with their design and strategy teams to develop sustainable solutions to the products and services their company offers. Not only are these products essential ecologically and socially, they are also drivers of revenue growth.
If managers are concerned about getting [internal] corporate buy-in to fund ESG R&D, they are able to present the business case of how other companies — especially like Shaw Industries with the illustrations here in this case study — have seen Cradle-to-Cradle's positive impact on their revenue. (9)
According to The Conference Board, "revenues from sustainable products and services grew at six times the rate of overall company revenues."
In order to address Earth's ecological crisis, companies must lead the way by ensuring they are designing eco-friendly products and services that respects the finite resources available on the planet. Sustainability managers can look to Shaw as one company that is leading by example.
Jennifer Moore is Manager, Executive Programs, Sustainability & EHS at the Conference Board. She engages with senior executives from Fortune 250 companies to understand their needs and help solve their business issues. She oversees and executes all aspects of 15 roundtables per year.
** Information about the G&A Institute on-line course:
http://learning.ga-institute.com/courses/course-v1:GovernanceandAccountabilityInstitute+CCRSS+2016/about
(1) Ellen MacArthur Foundation. Cradle to Cradle in a Circular Economy – Products and Systems. Retrieved March 5, 2017. https://www.ellenmacarthurfoundation.org/circular-economy/schools-of-thought/cradle2cradle
(3) Strahel, W. (2015). The Performance Economy. Palgrave MacMillan: 2006
(4) United Nations. United Nations Economic and Social Council. Millennium Development Goals and post-2015. Development Agenda. Retrieved March 5, 2017. http://www.un.org/en/ecosoc/about/mdg.shtml.
(5) Yosie, T. Is There Business Value in the UN Sustainable Development Goals? Retrieved March 5, 2017. http://tcbblogs.org/givingthoughts/2017/02/07/is-there-business-value-in-the-un-sustainable-development-goals/#sthash.L0MLUAN7.xHIHNvHZ.dpbs
(6) Singer, T. Driving Revenue Growth Through Sustainable Products and Services. New York: The Conference Board, 2015. p. 17.
(7) Singer, T. Driving Revenue Growth Through Sustainable Products and Services. New York: The Conference Board, 2015. p. 8.
(8) C2C Product Certification Overview – Get Certified – Cradle to Cradle Products Innovation Institute. Retrieved March 5, 2017. http://www.c2ccertified.org/get-certified/product-certification
Posted in Business & Society, Business Case, Corporate Responsibility, Corporate Sustainability, SRI	| Tagged 3M, Cradle-to-Cradle, Cradle-to-Cradle Products Innovation Institute, DAK Americas, EcoWorx, Ellen MacArthur Foundation, Jennifer Moore, Kimberly-Clark, Neilsen, Oxfam International, SDGs, Shaw Industries, Sustainable Development Goals, The Clear Path Recycling Center, The Conference Board, United Nations, William Braungart, William McDonough, World Economic Forum	| Leave a reply
So Many Positives in 2016 for Sustainability – Corporate Citizenship – CR – Sustainable Investing — The Core of "Trends Converging!" Commentaries. It's 2017 — Now What?
Posted on January 3, 2017 by Hank Boerner
by Hank Boerner – G&A Institute
Welcome to 2017! We are off to the start of a challenging year for sustainability / responsibility / corporate citizenship / sustainable investing professionals.
We are being forewarned: A self-described (by his constant tweeting) "new sheriff is coming to town," along with the newly-elected members of the 115th Congress who begin their meetings this week. Given the makeup of the new Administration (at least in the identification of cabinet and agency leaders to date) and the members of the leadership of the majority party on Capitol Hill, sustainability professionals will have their work set out for them, probably coming into a more clear focus in the fabled "first 100 days" after January 20th and the presidential inauguration ceremonies.
The year 2016 began on such a hopeful note! One year ago as the year got started I began writing a series of commentaries on the many positive trends that I saw — and by summer I was assembling these into "Trends Converging! — A 2016 Look Ahead of the Curve at ESG / Sustainability / CR / SRI." Subtitle, important trends converging that are looking very positive…
As I got beyond charting some 50 of these trends, and I stopped my thinking and writing to share the commentaries and perspectives that formed chapters in an assembled e-book that is available for your reading. I've been sharing my views because the stakes are high for our society, business community, public sector, social sector…all of us!
The specifics: Throughout the early months of 2016 I was encouraged by:
The Secretary of the U.S. Department of Labor giving American fiduciaries the green light for considering corporate ESG factors in their investment decision-making. Page 7 – right up front in the commentaries!
The Sustainable Accounting Standards Board (SASB) team completing its comprehensive recommendations for 12 sectors and 80 industry components of these for "materiality mapping" and expansion of corporate reporting to include material ESG factors in the annual 10-k filing. These are important tools for investors and managements of public companies. See Page 17.
His Holiness Pope Francis mobilizing the global resources of the worldwide Roman Catholic Church with his 74-page Laudato Si [encyclical] that includes sharp and sweeping focus on climate change, global warming, water availability, biodiversity, and other social issues. Imagine, I wrote, the power that such an institution can bring to bear on challenges, in the world, in the USA, and other large nations…
This is the Pope's great work: "On Care of Our Common Home." I explored the breadth of depth of this in my commentaries. That's on Page 163 – Chapter 44.
President Barack Obama ably led the dramatic advances made in the Federal government's sustainability efforts thanks in large measure to several of the President's Executive Orders (such as EO 13693 on March 19, 2015: Planning for Federal Sustainability in the Next Decade).
Keep in mind the Federal government is the largest purchaser of goods and services in the U.S.A. — over time this action will result in positive changes across the government's prime supply chain networks. Page 50 / Chapter 13.
The European Union's new rules for disclosure of non-financial information beginning in 2017; As I began my commentary, the various EU states were busily finalizing adoption of the Accounting Directive to meet the deadline for companies within each of the 28 states. The estimate is that as many as 5,000 companies will begin reporting on their CR and ESG performance. Page 27 / Chapter 7.
Here in the USA, Federal regulators were inching toward final rules for the remaining portions of the 2010 Dodd-Frank legislation. Roughly 20% of rules were yet to be completed for corporate compliance with D-F as we entered 2016, according to estimates by the Davis Polk law firm. Page 30 / Chapter 8.
In 2017, one very contentious rule will be in effect — the required disclosure by public companies of the CEO-to-median worker-pay ratio; the final rule was adopted in August 2015 and so in corporate documents we will be seeing this ratio publicized (technically, in the first FY beginning in January 1, 2017). Page 34 / Chapter 9 – What Does My CEO Make? Why It Matters to Me.
Good news on the stock exchange front: member exchanges of the World Federation of Exchanges have been collaborating to develop "sustainability policies" for companies with shares listed on the respective exchanges. At the end of 2015 the WFE's Sustainability Working Group announced its recommendations [for adoption by exchanges]. Guidance was offered on 34 KPIs for enhanced disclosure. Page 103 / Chapter 27.
The WFE has been cooperating with a broad effort convened by stakeholders to address listing requirements related to corporate disclosure
This is the "SSE" — the Sustainable Stock Exchanges initiative, spearheaded by the Ceres-managed Investor Network on Climate Risk (INCR), and leadership of key UN initiatives as well as WFE member exchanges.
NASDAQ OMX is an important part of this overall effort in the United States and is committed to discussing global standards for corporate ESG performance disclosure. Notd Evan Harvey, Director of CR for NASDAQ: "Investors should have a complete picture of the long-term viability, health and strategy of their intended targets. ESG data is a part of the total picture. Informed investment decisions tend to produce longer-term investments."
The United Nations member countries agreed in Fall 2015 on adoption of sweeping Sustainable Development Goals (SDGs) for the next 15 years (17 goals/169 specific targets). This is a dramatic expansion of the 2000 Millennium Goals for companies, NGOs, governments, other stakeholders. Now the many nation-signatories are developing strategies, plans, programs, other actions in adoption of SDGs. And large companies are embracing the goals to help "transfer our world" with adoption of mission-aligned strategies and programs out to 2030.
G&A Institute's EVP Lou Coppola has been working with Chairwoman of the Board Dr. Wanda Lopuch and leaders of the Global Sourcing Council to help companies adopt goals (the GSC developed a sweeping 17-week sourcing and supply chain campaign based on the 17 goals). Page 56 / Chapter 15.
Very important coming forth as the year 2016 moved to a close: The Report on US Sustainable, Responsible and Impact Investing Trends, 2016 — the every-other-year survey of asset managers in the USA to chart "who" considers ESG factors across their activities. Money managers and institutional investors, we subsequently learned later in 2016, use ESG factors in determining $8.72 trillion in AUM – a whopping 33% increase since 2014. Great work by the team research effort helmed by US SIF's Meg Voorhes and Croatan Institute's Joshua Humphreys (project leaders). Background before the report release Page 78.
The above is a very brief overview of the many positive trends that I saw, explored further, and wrote commentaries on through many months of 2016. I worked to weave in the shared perspectives of outstanding thought leaders and experts on various topics. We are all more enlightened and informed by the work of outstanding thought leaders, many presented in the public arena to benefit us.
Sharing Thought Leadership
In developing our commentaries we shared the wisdom of many people who are influential thought leaders and who enthusiastically share their own perspectives with us. These include:
Chris Skroupa, Founder of Skytop Strategies and prominent Forbes blogger. His views on Page i.
Pam Styles, Founder/Principal of Next Level Investor Relations and NIRI Senior Roundtable member. See Page iv.
Secretary Thomas Perez, U.S. Department of Labor on ERISA for fiduciaries. Page 7.
Dr. James Hawley of St. Mary's College of California on the concept of the Universal Owner, based on the earlier work of corporate governance thought leader Robert Monks. Page 9.
the team at Sustainable Accounting Standards Board led by Chair Michael Bloomberg, Vice Chair Mary Schapiro, Founder and CEO Jean Rogers, Ph.D., P.E. . Page 17.
the team at TruCost.
the team at CDP.
the team at CFA Institute (the global organization for Chartered Financial Analysts) developing guidelines for inclusion of ESG factors in analysis and portfolio management — the new Guide for Investment Professionals – ESG Issues in Investing. Coordinated by Matt Orsagh, CFA, CIPM; Usman Hayat, CFA; Kurt Schacht, JD, CFA; Rebecca A. Fender, CFA. Page 20.
the leadership team at New York Society of Securities Analysts' (NYSSA) Sustainable Investing Committee (where I was privileged to serve as chair until December 31st). Page 21. We have great perspective sharing among the core leadership team (Kate Starr, Peter Roselle, Ken Lassner, Andrew King, Agnes Terestchenko, Steve Loren).
experts respected law firms sharing important perspectives related to corporate governance, corporate citizenship / CSR / disclosure / compliance and related topics: Gibson Dunn on compliance matters. Page 25.
the law firm of Davis Polk on Dodd-Frank rulemaking progress and related matters.
experts at the respected law firm of Morrison & Foerster on executive compensation and related regulatory matters (in the excellent Cheat Sheet publication). Page 30.
the experts at the law firm of Goodwin Procter addressing SEC regulations. Page 146.
the skilled researchers, analysts and strategists at MSCI who shared "2016 ESG Trends to Watch" with their colleagues. The team of Linda Eling, Matt Moscardi, Laura Nishikawa and Ric Marshall identified 550 companies in the MSCI ACWI Index that are "ahead of the curve" in accounting for their carbon emissions targets relative to country targets. Baer Pettit, Managing Director and Global Head of Products, is leading the effort to integrate ESG factors into the various MSCI benchmarks for investor clients.Page 100.
Thanks to Peter Roselle for his continuous sharing of Morgan Stanley research results with the analyst community.
the perceptive analysts at Veritas, the executive compensation experts who closely monitor and share thoughts on CEO pay issues. Page 36.
the outstanding corporate governance thought leader and counsel to corporations Holly Gregory of the law firm Sidley Austin LLP who every year puts issues in focus for clients and shares these with the rest of us; this includes her views on proxy voting issues. (She is co-leader of the law firm's CG and Exec Compensation Practice in New York City.) Page 39.
the Hon. Scott M. Stringer, Comptroller of the City of New York, with his powerful "Board Accountability Project," demanding increased "viable" proxy access in corporate bylaws to enable qualified shareholders to advance candidates for board service. Pages 40, 45 on.
the experts at Institutional Shareholder Services (ISS), a unit of MSCI, which counts numerous public employee pension funds and labor pension systems among its clients; ISS staff share their views on governance issues with the rest of us to keep us informed on their policies and related matters. Page 40.
SRI pioneer and thought leader Robert Zevin (chair of Zevin Asset Management) who shares his views on the company's work to improve corporate behaviors. Page 41.
Mark W. Sickles, NACD thought leader, and my co-author of "Strategic Governance: Enabling Financial, Environmental and Social Sustainability" (p.2010) for helping me to better understand and refine my views on the "Swarming Effect" (investor engagement) by institutional investors that influences corporate behavior. Page 44.
the experts led by thought leader (and ED) Jon Lukomnik at Investor Responsibility Research Center (IRRC) that, working with Ernst & Young LLP, one year ago in January produced the Corporate Risk Factor Disclosure Landscape to help us better understand corporate risk management and related disclosure. Page 47.
CNN commentator and author Fareed Zakaria who shared his brilliant perspectives with us in publishing "The Post American World," focusing on a tectonic, great power shift. Page 61.
The former food, agriculture and related topics commentator of The New York Times, Mark Bittman, who shared many news reports and commentaries with editors over five years before moving on to the private sector. Page 65.
our many colleagues at the Global Reporting Initiative (GRI) in the Netherlands, the USA, and in other countries, who shared their views on corporate sustainability reporting and related topics; the GRI framework is now becoming a global standard. (G&A Institute is the Data Partner for GRI in the USA, UK and Republic of Ireland; we are also a Gold Community member of supporters for the GRI.) Page 71.
our colleagues at Bloomberg LP, especially the key specialist of ESG research, Hideki Suzuki; (and) other colleagues at Bloomberg LP in various capacities including publishing the very credible Bloomberg data and commentary on line and in print. Page 76 and others.
Barbara Kimmel, principal of the Trust Across America organization, who collaborated with G&A Institute research efforts in 2016.
we have been continually inspired over many years by the efforts of the Interfaith Center on Corporate Responsibility (ICCR), and past and present leaders and colleagues there, who helped to inform our views in 2016 on shareholder activism and corporate engagement. Chair the Rev. Seamus Finn is on point with his "Holy Land Principles" in recent years. The long-time executive director, Tim Smith (now at Walden Asset Management) has been very generous in sharing news and perspectives long after his ICCR career. Details on Page 77.
our colleagues at the U.S. Forum for Sustainable & Responsible Investment (US SIF), and its Foundation, led by CEO Lisa Woll; and our colleagues at the SIF units SIRAN and IWG. The every-other-year summary of Assets Under Management utilizing ESG approaches showed [AUM] nearing $9 trillion before the run up in market valuations following the November elections. Page 78.
Goldman Sachs Asset Management acquired Imprint Capital in 2015 (the company was a leader in developing investment solutions that generate measureable ESG impact — impact investing). Hugh Lawson, head of GSAM client strategy, is leading the global ESG activities. GSAM has updated its Environmental Policy Framework to guide the $150 billion in clean energy financing out to 2025. Page 83.
the experts at Responsible Investor, publishing "ESG & Corporate Financial Performance: Mapping the Global Landscape," the research conducted by Deutsche Asset & Wealth Management and Hamburg University. This is an empirical "study of studies" that looked at the "durable, overall impact of ESG integration to boost the financial performance of companies." A powerful review of more than 2,000 studies dating back to 1970. Page 90.
Boston Consulting Group's Gregory Pope and David Gee writing for CNBC saw the advantage held by the USA going into the Paris COP 21 talks: advances in technology are making the USA a global leader in low-cost/low-pollution energy production. They worked with Professor Michael Porter of Harvard Business School (the "shared value" proponent) on research. Page 95.
researchers, analysts and experts at Morgan Stanley Research charted "what was accomplished in Paris in 2015" for us; their report identified five key areas of progress that cheered conference participants; I share these in the "Trends Converging!" work. MS Research in the post-Paris days shared perspectives on the carbon tax concept and the status of various nations on the issue — and the actions of the State of California in implementing "AB 32" addressing GhGs. Page 119.
G&A Institute Fellow Daniel Doyle, an experienced CFO and financial executive, sharing thoughts on corporate "inversion" and the bringing back of profits earned abroad by U.S. companies. Page 122.
the Council of State Governments (serving the three branches of state governments) is actively working with public officials in understanding the Clean Power Plan of the Obama Administration (the shared information is part of the CSG Knowledge Center). Page 101.
Evan Harvey, Director of CR at NASDAQ, has continuously shared his knowledge with colleagues as the world's stock exchanges move toward guidance or rule making regarding disclosure of corporate sustainability and related topics. Page 104.
our former Rowan & Blewitt [consulting practice] colleague Allen Schaeffer, now the leader of the Diesel Technology Forum, explaining the role of "clean diesel" in addressing climate change issues. Page 128.
Harvard Business School prof Clayton Christensen, who conceived and thoroughly explained "the Innovator Dilemma" in the book of the same name in 2007, updated recently, characterized new technology as "disruptive" and "sustaining," now happening at an accelerated pace. We explain on Page 147.
the researchers and experts at the Society for Human Resource Management (SHRM) has shared important perspectives and research results dealing with the massive shift taking place in the corporate and business sectors as Baby Boomers retire(!) and the Millennials rise to positions of influence and power. And Millennials are bringing very positive views regarding corporate sustainability and sustainable investing to their workplace! The folks at Sustainable Brands also weighed in on this in recent research and conference proceedings. Page 154.
Author Thom Hartman in 2002 explored for us the subject of "corporate citizenship" in his book, "Unequal Protection, the Rise of Corporate Dominance and the Theft of Human Rights." This work continues to help inform views regarding "corporate rights" in the context of corporate citizenship and beyond. The issue of corporate contributions to political parties and candidates continues to be a hot proxy season debate. Page 160.
Author and consultant Freya Williams in her monumental, decade-long research into "Green Giants" shared results with us in the book of that name and her various lectures. Seven green giant [companies] are making billions with focus on sustainability, she tells us, and they outperform the S&P 500 benchmark. Page 170.
Speaking of the S&P 500, I shared the results of the ongoing research conducted by our G&A Institute colleagues on the reporting activities of the 500 large companies — now at 81% of the benchmark components. Page 195.
And of course top-of-mind as I moved on through in writing the commentaries, I had the Securities & Exchange Commission's important work in conducting the "Disclosure Effectiveness Initiative," and a look at Regulation S-K in the "Concept Release" that was circulated widely in the earlier months of 2016. Consideration of corporate sustainability / ESG material information was an important inclusion in the 200-page document. Page 174.
All of the above and more were important contributors in my collected "Trends Converging!" (in 2016) work. I am grateful to many colleagues in the corporate community and in the capital markets community who shared knowledge, wisdom, expertise and more with Lou Coppola and I over the recent years. They have helped to inform our work.
We thank the knowledge and valuable information willingly shared with us by our valued colleagues at RepRisk, especially Alexandra Milhailescu; Measurabl (Matt Ellis); The Conference Board's Matteo Tonello; Nancy Mancilla and Alex Georgescu at our partnering organization for training, ISOS Group; Bill Baue at Convetit; Herb Blank at S-Networks Global Indexes; Robert Dornau at RobecoSAM Group, managers of the Dow Jones Sustainability Index family; Barbara Kimmel at Trust Across America.
Also, Professor Nitish Singh of St. Louis University, with his colleague VP Brendan Keating of IntegTree, our on-line professor and tech guru for the new G&A on-line, sustainability and CSR e-learning platform.
And, Executive Director Judith Young and Institute Founder James Abruzzo, our colleagues at the Institute for Ethical Leadership at Rutgers University Business School; Matt LePere and the leaders at Baruch College / City University of New York; and, Peter Fusaro, our colleague in teaching and coaching, at Global Change Associates.
And thank you, Washington DC Power Players!
Very important: We must keep uppermost in mind the landmark work of our President Barack H. Obama (consider his Action Plan on Climate Change, issued in December 2015) with the Clean Power Plan for the USA included. His Executive Orders have shaped the Federal government's response to climate change challenges.
And there is U.S. Senator Bernie Sanders, again and again hitting the hot button sensitive areas for the middle class — like income and wealth inequalities and Wall Street reform — that raised the consciousness of the American public about these issues.
Former Secretary of State Hillary Rodham Clinton and her views (published in The New York Times) in her "How to Rein in Wall Street" op-ed.
And I thank my G&A Institute colleagues for their support and continued input all through the writing process: EVP Louis Coppola; Ken Cynar, our able editor and news director; Amy Gallagher, client services VP; Peter Hamilton, PR leader; Mary Ann Boerner, head of administration.
So many valuable perspectives shared by so many experts and thought leaders! All available to you…
And Now to 2017!
And so what will happen in these many, many areas of forward-momentum in addressing society's most challenging issues (like global warming) with "deniers and destroyers" lining up for key Federal government positions in the new administration and in the 115th Congress?
I and my colleagues at G&A Institute will be bringing you news, commentary and opinion, and our shared perspectives on developments.
If you would like to explore the many (more than 50) positive trends that I saw as 2016 began and proceeded on into the election season, you will find a complimentary copy of "Converging Trends!" (2016) at:http://www.ga-institute.com/research-reports/trends-converging-a-2016-look-ahead-of-the-curve.html
Please do share with us your own thoughts where you think we might be headed in 2017, and your thoughts on the 2016 trends and their future directions — for 2017 and beyond. Do tune in to the many experts that I included in the various commentaries as they adjust to the New Normal of Washington DC.
I plan to share the individual commentaries with updates in 2017. Do Stay Tuned to G&A Institute's Sustainability Update blog (you can register here to receive notice of new postings). You can sign on to receive the latest post at: http://www.ga-institute.com/sustainability-update-blog.html (Sharing insights and perspectives for your sustainability journey.)
Best wishes from the G&A Institute team for the New Year 2017!
Posted in Business & Society, Climate Change, Community Investing, Corporate Responsibility, Corporate Sustainability, ESG Issues, G4, Impact Investing, Shareowner Activism, SRI, Sustainability Professionals, Sustainability Reporting, Sustainable Investing, Uncategorized	| Tagged "Strategic Governance: Enabling Financial, 115th Congress, 2016 Trends to Watch, Accounting Directive, Action Plan on Climate Change, Agnes Terestchenko, Alex Georgescu, Alex Mihailescu, Allen Schaefer, Amy Gallagher, Andrew King, Baer Pettit, Barbara Kimmel, Baruch College City University of New York, Bill Baue, Bloomberg LP, Board Accountability Project, Brendan Keating, CDP, Ceres, CFA Institute, Chris Skroupa, Clayton Christensen, Clean Power Plan, Concept Release, Convetit, Corporate Risk Factor Disclosure Landscape, Council of State Governments, Croatan Institute, Daniel P. Doyle, Davis Polk Law Firm, Department of Labor, Deutsche Asset & Wealth Management, Diesel Technology Forum, Disclosure Effectiveness Initiative, Dodd-Frank, Dow Jones Sustainability Indexes, Dr. James Hawley, Dr. Jean Rogers, Dr. Wanda Lopuch, Environmental and Social Sustainability", Environmental Policy Framework, EO 13693, Ernst * Young LLP, European Union, Evan Harvey, Executive Orders, Forbes, Gibson Dunn Law Firm, Global Change Associaties, Global Sourcing Council, Goldman Sachs Asset Management, Goodwin Proecter Law Firm, GRI, Guide for Investment Professionals - ESG Issues in Investing, Hamburg University, Herb Blank, Hideki Suzuki, His Holiness Pope Francis, Holly Gregory, Holy Land Principles, Hon Scott M. Stringer, Hon Thomas Perez, Hugh Lawson, ICCR, Imprint Capital, INCR, Institute for Ethical Leadership, Institutional Shareholder Services, IntegTree, Interfaith Center on Corporate Responsibility, Investor Network on Climate Risk, Investor Responsibility Research Center, IRRC, ISOS Group, ISS, IWG, James Abruzzo, Jon Lukomnik, Joshua Humphreys, Judith Young, Kate Starr, Ken Cynar, Kurt Schacht, Laudato Si, Laura Nishikawa, Linda Eling, Lisa Woll, Louis Coppola, Mark Bittman, Mark W. Sickles, Mary Ann Boerner, Mary Schapiro, Matt Ellis, Matt LePere, Matt Moscardi, Matt Orsagh, Matteo Tonello, Measurabl, Meg Voorhes, Michael Bloomberg, Morgan Stanley, Morrison Foerster, MSCI, NACD, Nancy Mancilla, NASDAQ OMX, New York City Comptroller, New York Society of Securities Analysts, Next Level Investor Relations, NIRI, NYSSA, NYSSA Sustainable Investing Committee, Pam Styles, Peter Fusaro, Peter Hamilton, Peter Roselle, President Barack Obama, Professor Nitish Singh, Rebecca Fender, Report on US Sustainable, RepRisk, Responsible and Impact Investing Trends 2016, Responsible Investor, Rev. Seamus Finn, Ric Marshall, RobecoSAM Group, Robert Dornau, Robert Monks, Robert Zevin, Roman Catholic Church, Rowan & Blewitt, Rutgers University Business School, S&P 500, S-Networks Global Indexes, SASB, Secretary of Labor Thomas Perez, Secretary of State Hillary Rodham Clinton, Securities & Exchange Commission, Senior Roundtable, SHRM, Sidley Austin LLP, SIRAN, Skytop Strategies, Society for Human Resource Management, St. Louis University, St. Mary's College of California, Steve Loren, Sustainable Accounting Standards Board, Sustainable Development Goals, Sustainable Stock Exchanges initiative, swarming effect, The Conference Board, The Global Reporting Initiative, The Innovator's Dilemma, The New York times, Tim Smith, Trends Converging!, Trucost, Trust Across America, UN, United Nations, US Forum for Sustainable & Responsible Investment, US Senator Bernie Sanders, US SIF, Usman Hayat, Veritas, WFE Sustainabiity Working Group, World Federation of Stock Exchanges, Zevin Asset Management	| Leave a reply
Attention Boards & CEOs: The Conference Board Has Important Insights to Share To Help Your Company…Survive and Succeed!
The Conference Board is one of the most prestigious and important (for corporate managements) of our membership business associations, as well as credible research think tank on management issues and topics. The Board has long had corporate governance in focus and has been a major factor in helping to advance effective, responsive, accountable governance in the USA.
The Conference Board was one of the early organizations serving boards, C-suite and key functional managers to expand the governance research and advisory services to include social and environmental issues & topics: ESG is on the of the agenda for many aspects of Board operations.
Members of boards and CEOs and C-suite-ers receive Director Notes on key topics and issues with practical advice needed to improve performance and better serve society.
Today's issue of Director Notes is worthy of close reading — and re-reading — by sustainability professionals: "Navigating the Sustainability Transformation." The introduction is bold:
"CEOs and Directors making key business decisions regarding the company's strategy for the year ahead and beyond would be well-advised to change the current boardroom conversation. Driven by factors tied to sustainability, over the next 15 years, every company in every industry sector will need to transform itself to survive and succeed. Board members, CEOs and he executives advising them need to ask: "How should we plan for this major transformation?" (emphasis mine)
The report describes a four-stage model for companies to progress from engaging initially with sustainability to accelerating, leading, and ultimately transforming their business."
Addressing the practical aspects of corporate sustainability (board style), the report focuses attention on a host of corporations that are embracing sustainable strategies, actions, programs, engagements. These include "new brands" such as Airbnb, Google, Tesla, and Uber — all of which have disrupted old business models and achieved leadership – fast! — in their categories (Airbnb vs. the hotel business, Tesla vs. old line auto manufacturers, etc.).
Established companies — some dating back a century or more — are featured in the report, with explanations of how they have achieved success (and frankly, heartily survived) in a business environment (and investment mindset) where disruption is prized over proven models. These old-line companies have succeeded by being transformation, often disrupting their own cash cows!
Examples include: 3M; General Electric (with its Eco-magination); BMW; DuPont; Dow; Unilever; Michelin; HP; SC Johnson; Nike; Kimberly Clark; McDonalds; Wal-mart Stores; Starbucks; NRG Energy; Newmont Mining; Coca-Cola Company; IKEA; Interface; Sony; BT; Tesco; Azko Nobel; Xcel Energy; and Waste Management;.
Waste Management's transformation from a traditional waste hauler to strategy and service provider to corporate customers is one highlight of the report.
Sustainability professionals will want to read The Conference Board report' views on the 4 stages of progression for companies. I think this could become a top-of-agenda discussion in board rooms and C-suites in the weeks ahead.
The stages are (1) engagement with sustainability; (2) accelerating progress; (3) leading (sector, industry, peers, etc); (4) transforming. There are many companies at stages 1 and 2, a few moving on to 3, and very few to point to as stage 4 (yet). Many companies exhibit characteristics of stages 1 and 2 — these are examples in the report.
Moving into the transformation stage is challenging, of course. Given the dramatic upheaval in so many businesses, in such a short period of time, will make looking ahead 10 or 15 years to the critical period to 2030 and beyond…daunting, for sure.
But there are practical, realistic things going on in our world that make such exercise ( closely examining where your company is in the 4 stages of sustainability) necessary. Natural resources ("natural capital to many) grows more scarce in many parts of the world. It looks like there will be stranded assets on many corporate balance sheets (and in investment portfolios) as we shift away from fossil fuels. (We won't always have plentiful, easy-to-access USD$48 crude oil available!)
The Conference Board report found a few examples of what could pass for stage 4 companies: "Few companies today are solidly at 4, but a growing number of leaders have one or more stage 4 attributes. Airbnb, Google and Uber are 'sharing economy' companies; DuPont, Novelis, Unilever, and Waste Management are examples of long-established enterprises…":
The 4-Stage Model is explained in the report. We can see this having a powerful impact, similar to Professor Michael Porter's work with Mark Kramer: "Creating Shared Value" (Harvard Business Review, January 2011).
the Conference Board makes the report(s) available for your reading — information is at: https://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2885
The Director Notes are a series of publications the Board engages experts from various disciplines to contribute to, including experts in leadership, corporate governance, risk oversight, and sustainability.
The current issue was authored by Gilbert (Gib) Hedstrom, principal of Hedstrom Associates. Content includes excerpts from his coming book, "The Sustainability Scorecard TM Handbook/" Hedstrom is director of the Conference Board's Sustainability Council. He invited me to be guest presenter on corporate sustainability reporting and related topics at a recent Council meeting in Washington, D.C.
Matteo Tonello is managing director for corporate governance at The Conference Board; he is editor of the Director Notes series.
Melissa Aguilar is a researcher in the corporate leadership department of the board and is executive editor of the series.
Conference Board information is at: http://www.conference-board.org/
Posted in Business & Society, Climate Change, Corporate Governance, Corporate Responsibility, Corporate Sustainability, ESG Issues, Financially Material, Materiality, Uncategorized	| Tagged "Shared Value", 3M, Airbnb, BMW; DuPont; Dow; Unilever; Michelin; HP; SC Johnson; Nike; Kimberly Clark; McDonalds; Wal-art Stor4es; Starbucks; NRG Energy; Newmont Mining; Coca-Cola Company; IKEA; Interface; Sony; BT; Tesco; Azko, Conference Baord Sustainability Council, Creating Shared Value, Director Notes, Eco-magination, GE, Gedstrin Assicuates, General Electric, Gib Hedstrom, Gilbert (Gib) Hedstrom, Harvard Business Review, Mark Kramer, Matteo Tonello, Melissa Aguilar, Novelis, Professor Michael Porter, The Conference Board, Uber, Wal-Mart Stores, Waste Management	| Leave a reply