Saturday, April 25, 2015

It's time to modernise notions of "Green development" for the 21st Century

I was asked to take part in a debate on the topic of "Green development in the global south" at the SOAS Policy Forum on Friday, held at London's School of Oriental and African Studies. 

Here's what I had to say below. 

I have two problems with the title. Both around accuracy.

First, "green" progress is impossible without social progress. 

Secondly, "the global south". Where is that? It sounds far away, like the kingdom of Dorn in Game of Thrones. 

In short, it is an outmoded, wrong and unhelpful dichotomy. 

We have immense poverty and development challenges on the borders of, even within the EU. Look at average wages and pollution problems in Bulgaria, for example. 

How about Russia? The 'Stans?, Mongolia? Albania, Ukraine? These countries are in some cases only a few hours away yet sustainable development (not just green development) is just as important for them. 

We must get away from this "them and us", the rich guilty north vs the impoverished south.  

This is an old paradigm and its increasingly unhelpful, even if it still seems to be popular in the United Nations and the shaping of the Sustainable Development Goals.

Instead we need to view our world as inexorably and inevitably connected. 

Technology transfer can now become two way. Entrepreneurial ideas, which drive economies, can and do come from emerging markets. 

Two examples are mobile banking pioneered in Africa and much cheaper soft loan funded Chinese solar. 

These will change "us" as much as "them". They already are. Look at how China is now taking the reins, not just imformally in the case of solar but formally with shaping and creating the Asian Infrastructure Investment Bank.

Back to green development. 

My company works a lot in the area of how big companies can help prevent deforestation.

Deforestation has traditionally been seen as a green issue. 

It is. But it's much more than that today. 

For example lets talk about Indonesia. Almost all large companies who were engaging in cutting down natural "high carbon stock / high conservation value" forests have stopped now. 

This is due to NGO, market, regulatory and investor pressure. This has taken a long time, but serious progress is being made. 

There are still some rogue actors, suppliers, a couple of big companies, but today much of the deforestation that causes the haze you may see on a bad day in Singapore is caused by impoverished communities, illegal land squatters (often the same thing) and rogue individuals or groups, low level crime if you like.

So what does this mean? It means that much deforestation in Indonesia is being caused by people. Often very poor people.

This means the solutions have to be socially oriented. 

They must be about practical business/NGO partnerships, dialogue, about sustainable livelihoods, about agricultural diversification, about access to micro finance and capital. 

But also about functioning legal systems, well trained and respected police, properly paid judges, defenders and appropriate institutions. We should also include education systems and accountability, which is where academic institutions also come in. This is particularly true in the sharing of ideas, convening and developing technologies and a sense of exploration.

The solutions to these difficult challenges of creating social capital and functioning systems where few currently exist are myriad. 

They may have green outcomes but they must be social in design and implementation.

That's why green development in the global south should be replaced by the notion of global sustainable social, economic, institutional and environmental development.

And it must not be based on notions of guilt but on the encouragement of entrepreneurship, access to capital and systems reform to prevent unsustainable business and encourage sustainable innovation. This is vitally important.  

This is harder to put on a banner perhaps, but is infinitely more effective as a paradigm. 

Tuesday, April 21, 2015

The dangers of circular economy thinking

In this short five minute video, Dr. Karl-Henrik Robèrt, founder of The Natural Step, talks about circular economy as a means and not as a goal in itself.

The circular economy is only a small part of being sustainable, and there's a risk it may get sidelined along with so many other paradigms, suggests Robèrt.

There's a huge amount to be done that doesn't fit into circular thinking, he says, so the risk is that we forget the big task ahead of us.

This strategic task we have in front of us, is to work out what sustainability means. Then design the systems to get us there. We often forget this, he suggests.

The circular economy is part of how we get there, but not the end goal, he reckons. Some things must simply be excluded (CFCs, plutonium) and circular thinking risks ignoring planetary boundaries.

His summary is very much the traditional European perspective. The economy serves us, not the other way around. The US perspective evolved to be, "look after the economy, and the economy will look after us".

Of course that approach has made some folks billions, but has ignored externalities as we all know. This attitude is slowly changing, at least in some businesses and parts of society.

This is a useful video to remind us not to get caught up in obsession with the circular economy.

But I'm not entirely sure most people are. Most of us realise there's a lot outside it to be done too.

The circular economy is part of our tool kit, as Robèrt suggests, and this is a helpful reminder of the bigger picture.



We'll be debating all this, and really practical strategies to make circular thinking truly embedded in strategy at the below conference in June. Come join us.

Circular Advantage Business Forum

Discover and implement circular business models that generate new revenue streams, reduce costs and create sustainable growth

8th-9th June 2015, London, UK

With Accenture Strategy, Tarkett, Balfour Beatty, Akzo Nobel, Product Life Institute, BT, HP, Carlsberg, Novelis, Interface, Desso, Marks & Spencer, Coca-Cola Company, Kingfisher, Jaguar Land Rover, Dell and many more.

Check out the agenda here:  http://innovation-forum.co.uk/circular-economy-agenda.php

Monday, April 20, 2015

Some key points on the latest deforestation debates

Last week Innovation Forum ran the latest in our series of conferences on how companies can prevent deforestation.

This time it was in Washington D.C. and alongside it we published this free briefing

You can also see a number of tweets and quotes from the event at: https://twitter.com/InnovaForum and also at https://twitter.com/webb_tobias

One of my favourite quotes from the event was this one:

"For every complex problem there is an answer that is simple, clear and wrong"

I moderated a number of discussions and here's a few bullets of what I picked up from the discussions between companies, NGOs and even some investors. 
160 leading players got together last week. Debate was spicy
  • Companies are becoming more comfortable with the often incredibly ambitious targets they are putting in place even though they are not entirely clear how they will achieve them. Good examples of this are Wilmar, IOI Loders Croklaan, Dunkin' Brands and 3M to name a few.
  • There's a three stage process to get started. Step one is good practical NGO relationships to provide confidence around putting the corporate head above the parapet and taking the leap. Step two is to deliver on transparency (using technology) and show the world the challenges, and progress as implementation begins to happen. Step three is to work with other companies to help raise the bar in the supply chain and lobby for others to do the same and governments to support. (Step four will likely be to revisit and revise targets and engage in restoration but for many that comes much later)
  • The GMO debate around deforestation is similar to other areas. There's a lot of mistrust of the science, and exasperation on behalf of the industry as to why they are not believed by some. There appears to be no genuinely respected middle ground actors who might broker further progress. The arguments around irreversible gene pollution in the environment remain as they were a decade ago.
  • The investor community is even more absent on deforestation than in other areas of sustainable business. We had two at the conference, Calvert and Permian Global. We marketed the event to plenty but for some reason forestry and land use, despite their potential for carbon advantage, doesn't seem to be on the finance agenda yet, even in this, of all years.
  • The potential for land use and forestry issues/areas to make a lasting and relatively quick contribution to assisting against climate change is huge. Yet actors outside a few governments, many NGOs and the leading companies appear still, somehow, incredibly, unaware of the potential, despite the rhetoric one hears constantly to the contrary. This five minute video from Stephen Rumsey of Permian Global helps show you the potential, it's extraordinary.

    (Sample quote: ."..emissions from human destructions of forests have been three times that of burning fossil fuels, and secondly, if forests could recover a quarter of the biomass that they have lost that would reduce atmospheric CO2 from 400 PPM to 280 PPM". Forest recovery is incredibly cheaper than any other solution to climate change, Rumsey argues)
  • Corporate/Campaigner relations in the US are still much more combative in many ways, than in Europe. There was considerably more tension in the room between some campaign groups and companies than at our London conference. Companies tell me this is because some campaigners use unscrupulous tactics. Campaigners say it's because companies in North America fight change much harder. The truth, as so often, lies somewhere in between.
  • All that said, some companies are making enormous progress. More than 90% of global palm oil trading is covered by no deforestation commitments. Leading traders, brands, and even suppliers are bringing targets forward. And it's not just in palm oil, large forestry companies are almost all making great steps forward, and this, and the lessons learned, should not be overlooked.
  • Individuals can make a difference. Amongst those who have, I'd note the work not only of Greenpeace in general, but TFT and ForestHeroes too, particularly those individuals who run them.
  • There are significant business opportunities out there for companies who get sustainability right. Here's an example where one leading company, Sime Darby, paid something like an 85% (ish) price premium to buy a sustainability leader, New Britain Palm Oil, earlier this year. 
  • There's still a lot of silo'ed thinking in industries. Land use and livelihoods issues are common across industries but there's a real lack of communication and knowledge sharing across commodities.
  • The UN Guiding Principles on Business and Human Rights and their potential for forestry and palm oil in terms of managing stakeholder relationships were not mentioned at all. At least, only by me. This is worrying and suggests companies are not using all the tools at their disposal.
  • Equally, key lessons from North America, particularly around negotiating with communities in forestry areas, may not be being taken on board elsewhere, as much as they might.
  • Companies are becoming reluctant actors in the public policy debate, as has been happening for a decade or more. But it's a long slow road to institutional and implementable policy reform, which may now finally be accelerating. Companies are struggling to define their roles here.
  • The Sustainable Development Goals are going to be a much more significant tool for companies to use in 'mainstreaming' their work than many other sets of commitments. Industry groups should take note, as a focus on these may supersede other, less prominent and ambitious sets of commitments. 
  • A new Rainforest Alliance report titled "Halting Deforestation and Achieving Sustainability" was released to co-incide with the conference is a very useful read and can be found here
Our next "How Business can prevent Deforestation" conference takes place in Singapore on September 28-29. Organisations confirmed to speak include Unilever, APP, Golden Agri Resources, TFT, Sime Darby, HSBC, Wilmar and the World Economic Forum. Contact Charlenne.Ordonez@innovation-forum.co.uk to take part. 

Product passports pros and cons


While legislators warm to the concept, the circular economy debate may have already left product passports behind 

Could product passports be part of the push to the circular economy? Product passports are a set of information on the components and materials that a product contains, with details about how the product can be dismantled.

When the product becomes waste, recyclers would find it easier to pull it apart and ensure reuse of the resources it contains. The product could include a QR code for scanning to get access to the relevant information.

A couple of years ago, the idea was put forward by a high-level expert group, the European Resource Efficiency Platform. In 2013, in recommendations to the European commission, the platform said that passports would make product information “easily accessible and applicable to the supply chain, thus facilitating efficient material flows and encouraging the creation of value in the circular economy”.

Brussels wades in

The European parliament has now taken up the idea. On 14th April, MEPs discussed the idea of “mandatory” product passports, especially for imported products, so that when they reach the end of their useful lives, European Union companies can capitalise on the raw materials.

The European parliament’s pondering is preliminary, but the European commission says it “might be taking up the idea of product passports”.

Although the idea is not yet fully fleshed out, the implications for business could be significant should mandatory product passports ever be introduced. Companies should in principle know what is in their products, of course, even those that have long supply chains behind them. But in practice, the work of verification at each stage in the production of a complex product could be challenging.

Guarded IP

Then there are intellectual property concerns. Companies are likely to be wary about sharing information about their product design templates more widely – for example with recyclers. Intellectual property is “something manufacturers guard very closely,” says Susanne Baker, senior climate and environment policy adviser with UK manufacturers’ organisation EEF.

However, companies are already obliged to share some information about what goes into their products, such as the use of hazardous chemicals in consumer electronics, so more openness might not necessarily be an obstacle.

Instead, the main shortcoming of product passports would arguably be that they are predicated on the idea that products inevitably become waste. As such, would they really be true to the principles of the circular economy, or just a way of making recycling easier?

Sell function not product 

In a circular economy, products would ideally never become waste. This is the idea behind movements such as the sharing economy and servitisation – the idea that a company no longer sells a product, but sells the function that the product provides.

This would mean that products would always remain the property of the company that makes them. The company would take back obsolete products and remake them into new ones.

Companies are increasingly experimenting with sharing or “product service utility” business models – for example BMW with electric car sharing, and Philips with its “pay per lux” lighting scheme.

Product passports might be useful in some contexts, such as fast-moving consumer goods that are difficult for manufacturers to retain control of. But the most efficient approach, wherever possible, would be to keep products out of the waste stream.


Upcoming relevant sustainable business conferences from Innovation Forum in June 2015:

The Circular Advantage Business Forum 8-9 June 2015 (London)


Strategy for integrating circular business advantage with: Royal DSM, Accenture, Kingfisher, Suez, Coca-Cola Company, HP, and many others. Email Boris.Petrovic@innovation-forum.co.uk for details or go here.

Further events:

Thursday, April 09, 2015

How business can tackle deforestation - another management briefing from Innovation Forum

Our latest management briefing on deforestation is now available here for free for blog readers.

That's how special you are people.

Don't say I never give you anything.

This one, like the last, is a little cracker.

With contributions from Wilmar, Future 500, Permian Global, Rainforest Alliance, APP, Mongabay.com, Global Canopy Programme, IOI Loders Croklaam, Weyerhaeuser, Sime Darby, World Resources Institute, and International Paper, what more can you ask for?

And yes, it's free, so get downloading, saving, reading and thinking.


Ads, but highly relevant ones:

How Business Can Tackle Deforestation - 14th-15th April 2015 (Washington D.C.)

All the major brand players meet with the leading NGOs to debate progress. With: Staples, PepsiCo, Disney, Asia Pulp & Paper, Friends of the Earth, Greenpeace, WWF, Domtar, Sime Darby, Canopy, TFT and many others. Click here for more details.

And:

The Circular Advantage Business Forum 8-9 June 2015 (London)

Strategy for integrating circular business advantage with: Royal DSM, Accenture, Kingfisher, Suez, Coca-Cola Company, HP, and many others. Email Boris.Petrovic@innovation-forum.co.uk for details or go here.


This event may also be of interest to readers:

The Measurement and (e)valuation of Corporate Sustainability, does it all add up? June 29-30 (London)

A cold hard look at how companies put numbers against progress, and what those numbers mean for investors, internal and external stakeholders. With: Rio Tinto, Tullow Oil, Walgreens Boots Alliance, JP Morgan, Oxfam, Aberdeen Asset Management, Trucost, First State, Marks & Spencer and many more. Email: Natasha.Bodnar@innovation-forum.co.uk for details or visit this link.

Analysis on all the above topics can be found at: http://innovation-forum.co.uk

Wednesday, April 08, 2015

Measuring and valuing corporate sustainability

Corporate sustainability performance, and how it is measured and valued, has undergone a massive evolution in recent years – at least in theory.

In practice, the information delivered in company sustainability reports continues to fall short of what investors want.

That’s why Innovation Forum has launched a unique forum where large companies, big investors and leading research experts meet to debate how to measure and value corporate responsibility in practice.

The Measurement and Valuation of Corporate Sustainability – does it all add up?’ will take place in London on 29th-30th June. The forum will take a rigorous and questioning look at:

How large companies measure – and value – sustainability progress. Hear from leading firms on how they prioritise measurement and decide how to value key parts of their sustainability practices.What do investors want from sustainability strategy in large companies? 

Hear from leading financial institutions on what they think adds value, and why.Strengthen the business case for corporate responsibility and sustainability internally. 

Hear frank views from leading companies, critical experts and the stakeholders who influence. Understand the potential of putting numbers on CR and sustainability practices. Hear from experts on the positives and negatives of differing forms of sustainability value assessments.Risk management. How mainstream investors use valuation information to evaluate corporate risk. Find out how this is evolving.

The forum will bring together senior executives from the likes of Rio Tinto, J.P. Morgan, Walgreens Boots Alliance, Hermes Investment Management, Marks & Spencer, EY, Allianz Global Investors, Tullow, Trucost, FTSE, Aberdeen Asset Management and many more.

You can see the list of speakers and latest agenda here.

If you’d like to be kept up to date with the forum, do let me know.

Or contact: 

Natasha Bodnar

Innovation Forum

Events and Insight for Sustainability

+44 (0) 203 780 7432

natasha.bodnar@innovation-forum.co.uk

www.innovation-forum.co.uk

 

Monday, April 06, 2015

After 1500 blog posts on sustainable/ethical business, what's next?

The last post on this blog, "Better returns from better-run companies" was the 1500th since 2006.

Three years ago, when I hit the 1000 post mark, I penned this post with some conclusions I drew then.

Looking back, much of what I wrote then seems a little trite now.

The list is quite communications-focused, which I find embarrassing.

What should my list be, I wonder, at the 1501 post milestone?

Nothing on communications. I couldn't be less interested these days in 'authentic communications', except when it accompanies something significant (disaster or breakthrough).

So, in no particular order, the big sustainability issues that may occupy my next 1500 posts.

Many of these are of course interlinked.

  • Climate policy, regulation and the end, at some point, of fossil fuels.
  • The role and activities of large companies in preventing deforestation world-wide.
  • Technology / power / waste innovation, the changes that will be truly significant in delivering step change. 
  • Process, product and service innovation for sustainable business.
  • Sustainable infrastructure and resilient cities, what that means, how it can happen. 
  • Agribusiness and changes in market structure, big company behaviour towards supply chain.
  • Smallholder farmers and how they can be persuaded to keep farming the crops we need. 
  • Ethical trade beyond audits to genuine engagement.
  • Oceans, from pollution to biodiversity to climate role.
  • Sector approaches to sustainable products and services (e.g. car sharing) as activity deepens and becomes more mainstream. 
  • Stakeholder engagement in general: From vulnerable communities to dodgy governments.
  • How and when companies will actively and consistently join the 'good lobbying' agenda, and the issues that throws up.
You'll notice there's not much about 'changing consumers' in here. That's because there's no evidence that can really be done. It's a scary idea anyhow, frankly, so I am glad it doesn't work. Better to change the inputs, outputs and systems that consumers engage with and are part of. That's both actually effective and allows for choice and competition to play a role. 

The company I've created to try and make a contribution to the above is Innovation Forum. You can find out about our work and the events and publishing on the above that we plan, here

It seems only right that the 1500th post on this blog, linked to above, was about the business case for sustainability. 

We now understand, much more, that collaboration is needed to create that business case given how we are trapped in often extremely outdated systems that the 'invisible hand' is very slow in swiping at. 

Expecting otherwise is a bit like expecting a corporate sustainability report to be interesting, or an elephant to play the piano (although I would pay to see that). 

Roll on the next 1500 blog posts I say. Hope you all had a nice Easter. 


Ads, but relevant ones: 


How Business Can Tackle Deforestation - 14th-15th April 2015 (Washington D.C.)

All the major brand players meet with the leading NGOs to debate progress. With: Staples, PepsiCo, Disney, Asia Pulp & Paper, Friends of the Earth, Greenpeace, WWF, Domtar, Sime Darby, Canopy, TFT and many others. Click here for more details.

And:

The Circular Advantage Business Forum 8-9 June 2015 (London)

Strategy for integrating circular business advantage with: Royal DSM, Accenture, Kingfisher, Suez, Coca-Cola Company, HP, and many others. Email Boris.Petrovic@innovation-forum.co.uk for details or go here.


This event may be of interest to readers:

The Measurement and (e)valuation of Corporate Sustainability, does it all add up? June 29-30 (London)

A cold hard look at how companies put numbers against progress, and what those numbers mean for investors, internal and external stakeholders. With: Rio Tinto, Tullow Oil, Walgreens Boots Alliance, JP Morgan, Oxfam, Aberdeen Asset Management, Trucost, First State, Marks & Spencer and many more. Email: Natasha.Bodnar@innovation-forum.co.uk for details or visit this link.

Analysis on all the above topics can be found at: http://innovation-forum.co.uk

Better returns from better-run companies

Despite the evidence, many investors seem unconvinced that sustainable businesses are as profitable as any other    

For investors, it seems that old habits die hard.

A recent report from the Morgan Stanley Institute for Sustainable Investing, found that more than half of investors – 54% – believe that sustainable investing involves a financial trade-off: that it provides the feel-good factor but only in exchange for lower returns.

This attitude persists in the face of numerous other studies showing that sustainable investing produces better, or at least no worse, returns than more traditional investment strategies. A quick look at the S&P US Carbon Efficient Index shows that it outperforms the S&P 500 benchmark index of top US companies.

Morgan Stanley itself has found that sustainable investing has advantages over investment strategies that do not take sustainability into account. A separate Morgan Stanley report found that, in general, mutual funds that invest in more sustainable companies perform as well or better than traditional investment funds.

Good management 

And in case any more evidence was needed, researchers from Oxford University published a major study in late 2014 that analysed about 200 studies, finding that 80% of them “demonstrate that prudent sustainability practices have a positive influence on investment performance”.

This should not be a surprise. A focus on sustainability is a proxy for good company management. More sustainable companies concentrate on areas such as energy and resource efficiency, which translate into lower costs.

They also improve their performance through environmental, social and governance policies and practices, and anticipate the increasing tide of sustainability-related regulation, by, for example, voluntarily setting greenhouse gas reduction targets.

What investors want 

With such evidence, it is perhaps surprising that more investors have not been demanding a greater focus on sustainability from the companies in their portfolios.

Things are changing perhaps – an increasing switch to sustainability by investors might be underway. Investment managers LGT Capital Partners and consultants Mercer found in another recent survey that 54% of institutional investors who incorporate ESG criteria in their decisions have done so only for the last three years or less.

The investors that continue to believe sustainable investing involves a financial trade-off are perhaps influenced by some shortcomings in company reporting that sustainable investors themselves regularly highlight.

In particular, companies stand accused of still not properly linking what they say on sustainability to business strategy and risk. Many companies have yet to get to grips with the issue of materiality and demonstrate what sustainability really means for their operations.

The right reporting 

Investors also complain that companies’ non-financial reporting is hard to compare, or that information is simply lacking, especially in terms of key performance indicators.

For example, a Corporate Knights Measuring Sustainability Disclosure report, published in October 2014, found that only 2.8% of large listed companies worldwide disclose all of what it called the “seven basic sustainability metrics”: employee turnover, energy, greenhouse gas emissions, injury rate, payroll, waste and water.

So while it is time for investors to dispense with old prejudices about financial trade-offs and sustainable investing, there is also a need for companies to more convincingly make the case, and to help investors by improving their reporting and providing clear, relevant disclosures.

From the weekly Innovation Forum Business Briefing. Sign up for more like this at: http://innovation-forum.co.uk

This event may be of interest to readers:

The Measurement and (e)valuation of Corporate Sustainability, does it all add up? June 29-30 (London)

A cold hard look at how companies put numbers against progress, and what those numbers mean for investors, internal and external stakeholders. With: Rio Tinto, Tullow Oil, Walgreens Boots Alliance, JP Morgan, Oxfam, Aberdeen Asset Management, Trucost, First State, Marks & Spencer and many more. Email: Natasha.Bodnar@innovation-forum.co.uk for details or visit this link.

Analysis on all the above topics can be found at: http://innovation-forum.co.uk

Also:

How Business Can Tackle Deforestation - 14th-15th April 2015 (Washington D.C.)

All the major brand players meet with the leading NGOs to debate progress. With: Staples, PepsiCo, Disney, Asia Pulp & Paper, Friends of the Earth, Greenpeace, WWF, Domtar, Sime Darby, Canopy, TFT and many others. Click here for more details.

And:

The Circular Advantage Business Forum 8-9 June 2015 (London)

Strategy for integrating circular business advantage with: Royal DSM, Accenture, Kingfisher, Suez, Coca-Cola Company, HP, and many others. Email Boris.Petrovic@innovation-forum.co.uk for details or go here.

Friday, April 03, 2015

Q&A with Glenn Hurowitz: On RSPO failings, brands and 'no deforestation' pledges, and more

1) Are you a campaigner or a consultant? What's the deal there?

My work is primarily as a campaigner, as the chair of Forest Heroes, a global campaign working to break the link between deforestation and agriculture.

As a Managing Director of Climate Advisers and a co-founder of the Chain Reaction Research project, I also advise governments, financial institutions, and philanthropies about how they can protect forests and help solve climate change.

2) Do you feel optimistic about reducing deforestation globally right now?




Glenn Hurowitz
I'm very excited about the potential for the revolution that's happening in the private sector to eliminate deforestation across supply chains.

As I've written before, we are seeing the beginnings of a second green revolution in global agriculture, but this one is making it compatible with a living planet.

Having said that, there are still a lot of rogue actors out there, thorny sectors like Latin American cattle, and a serious need to leverage private sector progress into enduring government action.

Here are some of the positive indicators we’ve seen over the past year:
  • Wilmar has made steady progress on implementing its No Deforestation policy. It has cut ties with several problematic suppliers, driven improvements in many more (including large players like Bumitama), and aggressively promoted good forest policy. It has also brought unprecedented transparency to commodity trade.
  • Wilmar spurred its competitors to follow suit. GAR, Cargill, Bunge, IOI, and Musim Mas have all announced No Deforestation policies. A year ago, just five percent of traded palm oil was covered by No Deforestation sourcing policies. Now that number is more than 90 percent, though important work remains on implementation.
  • ADM has announced a No Deforestation policy and action plan for soy and palm oil, spreading the deforestation free revolution to Latin America. Cargill joined Wilmar in extending its policy to all commodities around the world, though needs to start implementing this commitment pronto.
  • Attention is rising to deforestation related to commodity production in Latin America and Africa, and to issues like the excess use of fertilizer and native prairie protection in the United States.
  • The Government of Liberia concluded an agreement with Norway that will require commodity companies operating in Liberia to adhere to Wilmar’s policy.
  • The Indonesian Chamber of Commerce (Kadin) joined the leading palm oil producers in a pledge that called on the Indonesian government to improve forest governance, and called on the private sector to adopt No Deforestation policies. Indonesia’s new president, Joko Widodo, has announced steps to review palm oil concessions and take other forest and peat protection measures.
  • The Singapore Government has adopted a Trans-Boundary Haze Law that imposes extra-territorial civil liability on companies that cause haze in Singapore through forest clearing and burning.
  • More than 25 major countries and 30 large companies signed the “New York Declaration on Forests” that calls on companies to adopt No-Deforestation policies, and on the world to restore hundreds of millions of acres of forest, and end global deforestation no later than 2030.
At the same time, there are other indicators that are a cause for concern:

Some palm oil companies like Jardines Matheson subsidiary Astra Agro Lestari are still trying to conduct business as usual - and politically undermine the Indonesian government's efforts to conserve the country's forests and restore rights to indigenous communities.

We also haven't yet seen a comprehensive analysis that looks at the effect of private sector commitments on forest conservation.

Sarawak is an important palm oil producing region that has resisted implementation of private sector No Deforestation policies.

While I think this resistance will substantially limit their access to the global market, they could destroy substantial areas of peat forest before they come to the realization that unsustainable practices are no longer profitable.

Deforestation in Brazil, the world's success story, has been on the rise. We hope that the private sector progress outlined above along with the Brazilian peoples' demand for forest conservation and restoration will shift the pendulum back so that Brazil remains the world's biggest climate success story.

Deforestation in countries outside the Brazilian Amazon like Paraguay and Bolivia has also increased - and the forests and people there desperately need the private sector to stop its own deforestation, as well as government action to protect forests and communities.

Developed world governments have so far missed a huge opportunity to reach more ambitious climate goals by investing in forest conservation and restoration, which remains the most affordable large-scale emissions reduction opportunity.

We're hoping that will change.

Despite these reservations, and "still-to-be-dones," there's tremendous momentum for protection of the world's forests.

3) Is forest restoration viable outside Europe/USA? I.e. the tropics


Not only is forest restoration viable outside of Europe and North America, it is happening on a grand scale. Countries including China, India, Vietnam, and the Phillipines have all limited conversion of natural forests, and are substantially increasing their forest cover.

In Costa Rica, as detailed in a recent New York Times feature, degraded forests have regrown to cover more than half the country.

These countries know that the value of forests for water, clean air, agriculture and wildlife far exceeds value of conversion - and are making determined efforts to undo costly mistakes they made in the past when they cleared vast areas of forest.

The New York Declaration on Forests issued a goal for the world to restore at least 350 million hectares of degraded forest lands by 2030, an area approximately equivalent to the size of Germany.

4) What do you make of the recent RSPO member suspension news? Fig leaf or real change?

I think that it's mostly a fig leaf. The RSPO took a positive step by expelling members that were not even doing the bare minimum of reporting information, but their membership guidelines still allow for destruction of forests and peatlands.

As I wrote in my "Death of Sustainability" article, if something produced through wholesale destruction of tropical rainforests is considered “sustainable,” the word has lost any meaning at all.

In the palm oil industry, where the leading companies are going above and beyond RSPO standards, the RSPO will have to get a lot tougher to remain a relevant indicator of progress.

5) What should we aim to get out of our Washington, D.C .conference on April 15/16?

My hope is that the conference will serve as a venue for fruitful discussion and a catalyst for continuing the progress that has been made in forest conservation.

As a community, we must continue to push for transparency and implementation on the ground with palm oil and reign in rogue actors in the industry that stand in the way of change.

We need to extend the momentum that has been created with palm oil in Southeast Asia to other commodities and other regions -- such as palm oil in Africa and soy in Latin America.

Lastly and critically, we need to organize financial institutions and investors to support the progress that's been made and to push for progress on these new frontiers.

Leaders in the finance community that understand sustainability risks and the opportunity in front us have a unique opportunity to lead for decades to come.

6) You've been highly critical of UK retailers for being totally RSPO reliant. Has your view changed? 


My views on UK retailers has not changed because they have not taken any action - and continue to substitute reliance on a discredited certification scheme for action to protect forests.

As I've written, many UK retailers and companies continue to rely on the RSPO, while global traders and consumer companies in other parts of the world are making actual progress on the ground in eliminating deforestation through their supply chains.

UK companies are in many ways victims of their own early leadership - many British companies went to RSPO while Americans did nothing, but the Brits haven't been nimble enough to respond to the RSPO's failures.

Marks & Spencer, Sainsbury, Waitrose, and Alliance Boots (Now Walgreens Boots Alliance) really have no excuse for the unacceptably slow approach they have to limiting risk in their supply chains.

7) Tensie Whelan, president of Rainforest Alliance, says zero deforestation as a corporate target is unrealistic. Do you agree?

I believe that zero net deforestation is both realistic and also not ambitious enough. To protect forest and save the climate, we need to striving for zero deforestation, period. You can't make up for clearing an ancient tropical rainforest by planting an acre of trees.

This model doesn't even really work in temperate regions, and it certainly doesn't apply in the tropics.

The NY Declaration set the goal of eliminating forest loss from commercial supply chains by 2020.

For many companies that are committing to zero-deforestation, that deadline is much sooner. We should not lower our sights from this critically necessary target.

8) Seems to me landscape governance is the big elephant in the room no companies know how to talk about. Agree? What is the business role here?

Ultimately, enduring success in land conservation will require strong government action and policy reform in forest nations.

It's difficult to protect forests over the long-term without incorruptible forest law enforcement, pro-conservation policies, and respect for indigenous rights.

Having said that, private sector leadership is necessary in places where governments simply cannot or will not deliver conservation - we can't just give up and let the forests fall while we wait decades for governments to get their acts together.


Glenn will be speaking at Innovation Forum's upcoming Washington D.C. conference on tackling deforestation in corporate supply chains, where many big brands and key NGOs will meet for frank debate and discussion.  More details here


Further reading from Innovation Forum:

Forests need better laws, better enforced
Governments have a crucial role in preventing deforestation, but they need to cut through conflicting interests and reward activity that prevents destruction, argues Rhett Butler

The continuous improvement challenge
Be transparent in successes and setbacks says palm oil giant Wilmar’s Jeremy Goon, outlining progress towards the company’s tough sustainability targets

Deforestation data digest
Innovation Forum’s guide to recent deforestation research and analysis


Other upcoming events from Innovation Forum this summer:

Circular Advantage Business Forum - 8th-9th June 2015
The Measurement and Valuation of Corporate Sustainability - 29th-30th June, 2015

Wednesday, April 01, 2015

How do you measure - and value - the right things in corporate sustainability?

The answer of course is, "it depends".

It depends on what kind of business you run. Your sector liabilities and opportunities.

It depends on how you manage that business, and what your board feels is important.

It depends on what shareholders, owners and stakeholders care about. To a degree.

Most large companies, say the largest 1000 in the world, care more and more about sustainability.

But the answer to the question "How do you measure - and value - the right things in corporate sustainability?" as we all know, is not clear.

We just know that it's the right question. And that's a start.

(As the only management guru worthy of the monicker, Peter Drucker, once said "I have only questions". Asking the right ones is a good first step. That's what made him brilliant)

Any substantive and useful response to the above question partly depends on the company and how it works, what the culture is.

That answer also depends on what investors, and other key, influential stakeholders, such as NGOs, expect.

It's not simple. But we all want better answers.

So at Innovation Forum we've created a physical meeting place where you can find out the best that business, investors and yes, NGOs too, know about this.

At the very least, you can find out what key people think.

And that's better than where most companies are today.

Most of the top 1000 are some way down the dimly lit corridor of sustainability progress, but still a long way from the light switch at the end of the hall.

Enough from me. Take a look yourself, it's all laid out here.

It's going to be a fun couple of days.