Ture Cost Accounting (TCA) requires the quantification of not only the environmental services of our ecosystem, but also the social benefits corporations rely their activities on. With Puma's Environmental Profit & Loss Accounts, the EcoIndex Beta, and the Higgs Index, the apparel industry is at the leading edge in this area.
Over 100 million people rely on inshore subsistence and small-scale artisanal fishing for their daily food and livelihood. But it’s not them that we’ll talk about in this post – because they are the unfortunate ones at the end of the short stick in the global game of industrial subsides.
In this post we talk about the industrial fishing industry, the subsidies that go into it, the really sticky WTO negotiations to make away with them.
It's not all doom and gloom. There is hope - just that it comes from elsewhere than governments.
Pricing the ton of carbon is a key matter – more so as an increasing number of companies aim at publicly claiming carbon neutrality. Carbon hence has a price – and this raises the much discussed question: What is a fair (or better: ‘correct’) price for carbon?
In this post I present a glimpse of some of the challenges and realities related to the topic.
It leaves us with the question: What went wrong in the current system that fundamentally asks us to choose between having to monetarily price natural and societal resources, and a fair, equitable access to these resources specifically for hard hit communities?
The question alone should not be even asked.
And yet it seems that’s what we’re left with given the current time and age.
This post is part of a series where I look at and into the true cost of certain goods and services. When in the previous post I looked at subsidies and the True Cost (associated with the True Price) for oil and gas, this time I’d like to look into what we know about the True Cost of Energy. Not just about fossil fuels, but indeed across the breadth of the energy spectrum.
The question therefore is: What are the total costs – the True Cost, i.e. including what is commonly called ‘externalities’ – of the
different types of energy we use globally?
Spoiler alert: It's very interesting - and also a bit suprising and counter-intuitive.
Measuring Biodiversity, in terms of baseline (status quo), progress, and deliverable targets, is not a simple thing. Collateral damages are a serious risk.At the same time though, some companies use outcomes of tools, which where never intended to deal at all with biodiversity, as proxy vehicles. This of course raises the question: Where are we with tools, programmes, and measurement systems for biodiversity? Hereafter a look across what I found to be having (some) teeth - also in comparison to the more popular climate change topic. These are: TNFD, SBTN, as well as two management tools that might be helpful, FFFBB and BIA.
Ask: If you are aware of others initatives 'with teeth' as of of writing (November 2021): do let me know and I’d be happy to list them also. Thank you!
COP28 yielded mixed results, featuring some historic 'firsts' such as a fossil fuel phase-out commitment, a $700 million loss and damage fund, the recognition of nuclear energy, and (this is huge!) a pointed spotlight on food systems' role in adaption.
Most of the old challenges though remain: It's all carrots and no sticks. Which shows in the continued absence of enforcement of Climate Targets or their stringency, and the eye-level conversation with Global South nations.
Carbon – together with biodiversity – is one of THE most critical dimensions among the Planetary Boundaries. Because the already existing overshoot is putting our civilisation at risk. So far nothing new under the sun.
The energy sector is the by far most impactful sector: directly and indirectly our carbon footprint depends on how they fuel our civilisation.
The big elephant in the room is of course: How well are badly do energy companies perform right now in terms of their carbon footprint? And: Do they have at the least commitments to work on a Paris Agreement trajectory? I look into these questions. Spoiler Alert: The results are pretty much in line with expectations. Yet: among the innovators, not everyone does perform as well as they probably should ...
Can we say that modern businesses prefer long-term over short-term? For sure the business environment is more and more rewarding companies that think ahead and do not fail to consider existing or potential risks. What has happened in finance is striking and is based on the concept that long-term benefits outweigh the short-term pain.
This is the first of a series that will look at and into true cost of certain goods and services. Cash subsidies thereby is one component, but certainly not the only one relevant one – indirect subsidies (e.g. in the form of environmental degradation or similar) need to be considered also. In this particular post, I’d like to focus on Oil & Gas subsidies, fossil fuels' True Cost, and what we know about these. What we already also learn: comparing apples to apples won't be easy.
True Cost calculations are only ever 'best available efforts', and much data remains missing or speculative at best. This is an issue we will encounter again also once we'll look into renewables, or indeed other kinds of industries outside of energy.
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.
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.
How can AI help connect the worlds of sustainability/ESG data, and that of company financials?
ESG is typically considered a mere cost - yet: this perception stems chiefly from a lack of integration of mutually beneficial data of these two worlds. With better approaches to cost accounting, to performance analysis, as well as using predictive analysis relate to trends, legislation and asset management, the ability of AI to integrated diverse and complex data sets may precise be the pathway to shift that needle.
This blog uncovers the surprising, and mostly overseen fact, that corporate cash holdings in banks more often than not have a relevant carbon footprint. Relevant enough for a company's own Scope 3 and overall footprint. We discuss actionable steps from the Green Action Cash Guide, and the type of support the guide gives – but also lacks. Topics touched upon are: board support, data gathering, and strategies for shifting to climate-friendly banking partners.
The finance industry does have its share to play in a ‘just transition’ to a low carbon and more ‘doughnut-ty’ economy. This is a given. I have written repeatedly about it.
In most contexts, the finance industry is characterised and promoted as a ‘driver’ of said transition. But is that really so? After all, the by far and distant most frequent tenor in ESG (the finance industry’s term for all things ‘sustainability’) is predominantly about risk. With that in mind, let's tell it as it is: The finance industry’s ESG discourse is opportunistic. As indeed all it’s actions and views have been, and as indeed the the industry’s clockwork is set out to be and function. Opportunistic.
You can't manage what you can't measure. This often cited quote by Peter Drucker lies at the heart of many things: change management, quality management, staff diversity, environmental footprint, CO2 output … you know it. This is why many millions of dollars, and countless hours, have been invested in creating suitable measurement tools. It's just that: Measurement ≠ Data ≠ Information ≠ Knowledge ≠ Action.
On December 14th, PPR published the expert review report on Puma’s Environmental Profit and Loss Account (E P&L). The panel of experts that had been commissioned to undertake the review brought some of the most eminent names in the industry together, among them John Elkington, Peter Bakker, or Pushpam Kumar.
After some results at the COP in Vancouver, as well as the release of the first ever Science -Based Targets for Nature (SBTN) – finally (!) the recommendations by the TNFD (Task Force for nature-based financial disclosure) have been released. So the question obviously is, how do these targets address the 5 key drivers of biodiversity erosion eventhough it is only about reporting? Are the TNDF recommendations worth their salt?
In time for Christmas, one of the most historic inter-governmental landmark decisions hit the headlines: The 'Biodiversity' COP (COP15) had actually achieved 'something'. 200 countries had agreed on 4 Goals and 23 Targets. Some of those are a bit more concrete than others, the headline goes roughly like this: “By 2030: Protect 30% of Earth’s lands, oceans, coastal areas, inland waters; Reduce by $500 billion annual harmful government subsidies; Cut food waste in half.” A closer look at precisely those 23 Targets and the specificity of the measures they contain.
‘System positive’. The latest term I came a cross in the finance world, and which intends to identify business that are particularly well set up to survive the tribulations to be expected in the decades to come. Immediately the cynic in me asks: Another addition to the sustainability bullshit bingo?
And yet: the 5 questions proposed for scrutinising companies are very sharp, very relevant and very insightful.
They only fall short of one: Will the company thrive within or even thanks to the Doughnut Boundaries?
With Grameen, Uniqlo has found the perfect partner to do business with the BOP.
Last of an article series that analyses Uniqlo and why it joint forced with Bangladesh's Grameen Bank.
