Here’s where to find all the latest research news from companies, NGOs and multilaterals
Profit in sustainability, say finance chiefs
Chief financial officers (CFOs) are increasingly acknowledging the impact sustainable policies and practices have on financial performance. A study by analyst Verdantix for financial services giant Deloitte, Sustainability: CFOs Coming to the Table, finds that 49% of the 250 CFOs surveyed see a “significant” relationship between sustainability and the bottom line.
Company structures are reflecting this acquiescence. More than one-quarter of CFOs now have board level responsibility for sustainability, up from around one-sixth last year. This may explain the drop in chief executive responsibility for sustainability, which slid back from 56% in 2011 to 44% in 2012. In terms of their day jobs in financial management, CFOs say that reporting and tax are the areas where sustainability is really hitting home.
Corporate climate concerns
US boardrooms are finally waking up to climate change, the latest figures from the Carbon Disclosure Programme (CDP) indicate. More than four-fifths of 405 Global 500 companies that responded to the survey identify physical risks to their business from the planet’s rising temperatures. More than a third of these consider the risks “real” and “present”, an almost fourfold increase on 2010 when only one in 10 considered this the case.
Despite such growing awareness, however, corporate targets do “not nearly match” the reduction levels agreed at the latest UN climate change conference in Durban: ie a 4% cut in emissions per year between 2020 and 2050. According to accountancy firm PricewaterhouseCoopers, which wrote the CDP Global 500 Climate Change Report 2012, only one fifth of the Global 500 has set targets beyond 2020. The average annual reduction in these long-term targets is a mere 1%.
In a separate report, CDP finds evidence of the largest US companies becoming more transparent around their carbon strategies. The CDP S&P 500 Climate Change Report, which was co-authored by PwC, sees a 13% rise in the average disclosure score for S&P 500 companies. Transparency among the CDP’s top flight of carbon reporters – members of its so-called Carbon Disclosure Leadership Index – increased by 11% to a score of 92 out of 100.
An equivalent study for the UK’s largest public companies reveals that around two-thirds of the FTSE350 include greenhouse gas data in their financial reports. Investors are on the heels of non-reporters. A total of 655 institutional investors, with $78tn in assets, now request companies to disclose GHG data to CDP. UK corporations still see climate change mostly as a risk issue. Only one-third of those surveyed for the CDP FTSE350 Climate Change Report 2012 consider themselves to have a strategic advantage relating to climate change.
Wal-Mart on top for US solar capacity
Wal-Mart, which has more aisle space than any other US supermarket, also has more solar photovoltaics on its rooftops. The US retail giant has a total installed capacity of 65,000kW, according to a report by the Solar Energy Industries Association and the Vote Solar Initiative. Costco finds itself second in the Solar Means Business study, with 38,900kW capacity.
In terms of solar installations per store, Ikea leads the way with photovoltaics in four-fifths of its US retail locations. The 20 US companies with the highest installed capacity collectively generate about 279MW in photovoltaic capacity, enough to power about 46,500 households. The report’s authors note that the price of solar panels in the US came down about 13% between mid-2011 and mid-2012.
Social orgs, hungry for capital
Demand for social investment in the UK could rise 38% year-on-year, reaching as much as £1bn within the next four years, according to research from Boston Consulting Group. The research, which was commissioned by Big Society Capital, claims that private capital financing for organisations working in the social sector amounted to £165m last year. The figure is expected to come in at about £286m this year, rising to an estimated £750m in 2015. The growth in demand of the so-called “social investment” sector primarily derives from the outsourcing of public services to private and social providers, the report concludes.
DJSI cuts some big names
IBM, GSK, Duke Energy, UBS, Mitsubishi and Dell are among some of the 41 big name companies to be deleted from the Dow Jones Sustainability Index World portfolio. Featuring among their replacements in the 340-member DJSI World index are Microsoft, HP and Canadian National Railway. Other winners include Exxon Mobil, which was added to DJSI North America, and BG Group and BAE Systems, which both now find their names in the revised list of DJSI Europe members. More than 50 investment products are based on the DJSI indexes, which were introduced back in 1999.
UK bosses’ pay slowing up
Fat cat bonuses are at last showing signs of slowing. The median salary for a FTSE100 executive director rose by a relatively modest 2.5% in 2011-2012. That compares with 3% the previous year, research by advisory firm Deloitte finds. According to the study, nearly half of chief executives of the UK’s largest companies saw their basic salary frozen, compared to one-fifth the previous year. The average base salary of FTSE 100 chief executives stands at £856,000. This excludes bonuses and other incentives. The highest paid of all UK corporate executives in 2011 was Bob Diamond, former head of Barclays, who took home £20.9m. Five of the FTSE 100 saw their most recent remunerations reports voted down by shareholders: Aviva, WPP, Royal Bank of Scotland, Royal Dutch Shell and GlaxoSmithKline.
Slump ahead for clean energy
Quarterly results are the bane of many a sustainability plan. Even so, from a short-term perspective, things don’t look great for clean energy. Global investment in the third quarter of 2012 dropped by one fifth on the same period last year, and 5% on the previous quarter. Figures from Bloomberg New Energy Finance for July-September 2012 put total global investment in the sector at $56.6bn. Investment in the US was hardest hit, falling by 62% year-on-year to $7.3bn. The European market remains much larger. That said, its $18.2bn investment haul for the third quarter represents a drop of nearly one-third on the same period last year. The other big market is China, where investment slipped 17% in the quarter to $14.8bn. Globally, investments in solar energy ($33.8bn) dominate the market, followed by wind power projects ($15.5bn).
Malaria costs Africa dear
Economic losses in Africa due to malaria amount to $12bn a year in Africa, according to GBCHealth, a business alliance of more than 200 companies. The losses derive primarily from reduced productivity, absenteeism, premature deaths and medical costs. The figure appears in GBCHeath’s recent report, Leading Practice in Malaria Control, which evaluates 18 business-led anti-malaria programmes.
Organisation snapshots
Europe backtracks on biofuels
The land needed to power cars in Europe with biofuels for a year could be used to feed 127 million people. So claims a policy paper from Oxfam. The land-for-fuel debate has won the ear of policymakers in the European commission, who in October proposed a cap on transport fuels from crops. Under the draft rules, EU member states will only be permitted to use crop-based biofuels to meet 5% of their binding 2020 targets on transport energy from renewable sources. The figure stood at 10% previously. The IMF’s world food index, which tracks the 22 most important agricultural commodities, rose by 15% in the first eight months of 2012. This remains lower than the last global food price crisis in 2008, when prices shot up by 23% over the same period.
G20 youth unemployment
About one in six young people in G20 countries are unemployed, according to the International Labour Organisation. The ILO puts the number of unemployed young people in the 17 countries for which data exists at 17.7 million. The ratios are highest in Italy, South Africa and Spain, where youth unemployment ranges from 35% to 52%. For the world as a whole, the ILO estimates that 75 million young people are out of work. Meanwhile, 200 million of those in work earn less than $2 a day.
Rio+20 commitments
The global business community made more than 200 commitments at the Rio+20 Corporate Sustainability Forum, which took place ahead of this summer’s UN Conference on Sustainable Development in Rio de Janeiro. The commitments cover areas such as energy, climate, agriculture, social development and urbanisation. A full list is provided in a summary report from the UN Global Compact.
Company insights
Edelman’s 2012 Global Citizenship report reveals an atypical gender balance, with women accounting for more than two-thirds of its 4,593 workforce. Men continue to dominate management, however. The public relations firm has set itself a 50/50 gender equality target by 2016.
Microsoft donated more than $900m in cash and software to more than 62,200 non-profit organisations in its latest full year, according to the company’s new annual Citizenship Report. Other highlights include the purchase of 1.1bn kilowatt-hours of green power and a 30% reduction in emissions per unit of revenue compared with 2007.