From research we know that boards of directors lack skill and expertise when it comes to ESG and Climate Issues.
But: certainly the asset owners and investors do see that point, and are worried about boards taking tangible action that would safeguard their assets?
This is precisely the question that ShareAction asked in their most recent report.
The insights are sobering. Particularly the Big Three asset managers (BlackRock, Vanguard, State Street) have a miserable voting record during AGM season: both, for the number of votes cast, as well as for their stance against most resolution on Climate Change and Human Rights.
The good news: it rarely has been so simple to identify Greenwashers. Thanks to publicly available filings about votes cast in AGMs of listed companies.
In the luxury segment, production focuses on highly complex garments and low order volumes that might involve just five pieces per style which makes sourcing very challenging. The approach currently pursued by European high-end apparel brands to address the problem is that of ‘High End Fashion Cluster‘.
The cat is – long-time coming - finally left out of the bag: while drawing up a Covid19 recovery package, EU legislators have decided to introduce a levy on non-recycled plastic as per 1st of January 2020. Reading through the text, two points offer a considerable surprise: The short notice, the wording, and the focus on packaging.
But how come that legislators seem to drive the industry R&D agenda? Here a few questions for boards to ask their CEOs to get to the bottom of this.
Financial accounting is rather ill suited as well as ill equipped to deal properly with a system that has finite natural resources. Else, why would it not record the environmental losses that come with e.g. extracting bauxite? And what about ESG? Well it turns out, ESG is just more of the same (growth) just in a shade of ‘green’. It is for a reason that the Global Materials Footprint has kept growing in alignment with the much coveted GDP growth. Despite all green efforts. ESG – investing in ‘greener’ tech and businesses – is definitely NOT ‘Sustainability’ as we need it.
In Europe, SMEs make up 99% of all companies, and provide 67% of employment a much higher percentage of jobs in developing countries.
Research has shown that they generate around 50% of the private sector’s turn over, and that SMEs contribute at least 80% to the national GDPs.
Yet less than 20% of policies, government investments etc. are made with them in mind.
It's a funny state of things: One where investors complain that ESG data is not standardised; where at the same time companies – and notably their boards – complain that investors do not ask for data in a standardised way. And where the very same companies and boards nonetheless prioritise proprietary measurement systems over any other one for their own supply chains and products.
It's a paradox. One that is not efficient, effective, or conducive to impact.
A call to leave politics to the side, focus in impact, and standardise, standardise, standardise.
Our economic well-being relies on indefinite growth in a finite system, raising sustainability concerns. But, if we dared to ask: What would the world lose if your company disappeared? Companies might find themselves in a totally novel position on how to justify their existence: Through assessments of their overall impact on society and the planet, or indeed having to advocate how their business case positively contribute to all facets of life.
Diversity and Inclusion is a highly relevant topic not ‘just’ because it is all about equality and justice. But as long as entire parts of our global population remain disenfranchised, and desperate to just survive from day to day, tackling challenges - and in particular Climate Change - that affect all of us, indiscriminately, remains impossible. Boards of Directors set out the "Tone at the Top', also in matter of diversity and inclusion. In fashion companies, what exactly is the tone, the music, that they are creating?
Expertise is a key discussion topic when it comes to board composition. Not only during the hiring process, but also when looking at the tenure in and renewal processes of board. According to a recent article by Board Agenda: a number of risks that have raised Directors & Officers concerns, and even litigation. These include [...] climate change and environmental issues; the #MeToo movement and other societal risks and merger objection litigation. Hence the question is: How sustainability (ESG) savvy and capable are boards?
Interns are more often increasingly taken over account executive responsibilities. Yet - they do not get paid. A said story of labour rights abuses in UK, Europe
In 2012, we have seen risk management and sustainability play a more important part in the agendas of leading fashion brands. Nevertheless, many companies still perform poorly at many stages of their supply chain and are unaware of the risks, particularly if they lie beyond their direct operations.
The following are the the main trends we see happening in the near and mid future. A few exist already but will become substantially more pronounced; others are just about to emerge and hit the surface of public awareness.
An NGO comes after you – for the right or the wrong reasons.
A journalist publishes an article. The content: inconvenient truths, or equally inconvenient fake news.
Or simpler: The staff churn in your company is way above average. And no one seems to know why.
The meetings, the clashes, the disagreement, the blaiming that comes with it. Yes, been there, done that.
Thankfully, there were times I was not a party in the conflict. Instead I was assigned the (ungrateful?) task of figuring out how to resolve it, build bridges, and ‘get stuff done’. Not just once, but a few times.
What initially was of me ‘winging it’, over time – with trial and error – turned into something more structured. Still not perfect – it never will be, there is always room for improvement – but a flight-by-instrument rather than a blind adventure.
This post is my first try at illustrating, verbalising, this process.The steps I use, and what their intention is.
With the hope of it being as useful to others as it is and was to me.
In an earlier post I asked: How can business, a business, downscale the Doughnut and make it operational?
In this post I look at three tools that praise themselves of being either part, or even all, of the support a business needs on the journey to integrate the Doughnut Economics concepts. Namely: Science-based Targets (SBTs), the B Impact Assessment(BIA), and the Future Fit Business Benchmark (FFBBM).
What are their fundamental differences and similarities?
Are they indeed a tool to help on the path to keeping within the Doughnut boundaries?
Reducing humanity’s footprint on this planet is a journey of decisions.
Some of them tough, some of them very clear. And some of them – let’s just say: with very limited available data.
The journey we’re on, is the proverbial Designer’s Paradox. More scientifically speaking of course, we are faced with the ever lasting conundrum of Regrettable Substitutions.
So: Is there a best possible AND least bad option (combined) at this very moment?
It is end of March / early April 2020 as I write this. Corona (Covid19) increases its grip onto the world. Draconian, tough policy measures are being put in place limiting people's lives ... and rattling the global economy.
Could it hall happen again in the future? And if so - in what way?
Unless the top line of company executives are held accountable for and judged by their contribution to the company’s risk management and mitigation efforts, including importantly CSR and sustainability performance, the company will struggle. Without senior commitment and engagement, the system only ever allows for minor ‘bug fixes’.
Fall 2010, D2: Paris Ethical Fashion Week, the longest standing ethical fashion event. Public day, bureaucratic panel discussions, and publicly funded social projects.
Grom is an Italian, organic and ethical ice cream brand. But beyond this achievement, all their consumables are biodegradable and compostable. At no extra price to the consumer.
We all can see it happening before our eyes: Despite the Paris Climate Agreement to a climate trajectory of ‘well bellow’ 2 degrees (hence where the 1.5C number stems from) – the trajectory is not anywhere near that number. The Inevitable Policy Response (IPR) is the response by governments and legislators around the globe in taking action – hence enacting laws – in line with the 1.5 Degree climate goals.
In July 2018 Australian Billionaire James Packer resigned from 24 boards in total where he held directorships. His spokesman in a statement announced that Packer was “suffering from mental health issues” and was seeking treatment for depression. Packer is not a lone case.
Climate Anxiety can be a trigger to mental health challenges - for fear of the future and well-being of loved ones. Creating boards that are able to open up about doubts, challenges and concerns is like adding a booster gear to their functioning, reaching deep into an individuals motivation and passion. It also could add a whole new dimensions to professional discussions and help to ask harder, but equally necessary questions to the executives running the day-to-day business.














