Ethical Corporation is now Reuters Events - LEARN MORE
Ethical Corporation’s analysis of the latest reports and data
Business case under scrutiny
Fewer than a third of large companies claim to be making a profit from their sustainability programmes, down from around two-fifths in 2010. A survey by MIT Sloan Management Review and the Boston Consulting Group finds the same proportion (32%) are breaking even, while 11% are losing money. A surprisingly high 25% appear not to know either way.
Now in its fifth year, the annual Sustainability and Innovation Global Executive Study identifies employee health as the most important social issue facing companies. As for the environmental and economic fields, the 5,300 executives and managers that responded to the survey picked out energy efficiency and competitiveness as priority themes.
The findings reveal some worrying mismatches. While 88% of respondents agree that climate change is real, only 9% fully believe their companies are prepared for the consequent risks (with an additional 25% “somewhat agreeing”). Likewise, 70% of respondents believe sustainability is important or very important for their businesses, yet only around half think their companies are adequately addressing the issue.
Boardroom balancing act
Women now make up one-fifth of FTSE 100 boards, according to figures from Professional Boards Forum BoardWatch. Although it’s the highest figure recorded, the UK’s largest companies will need to increase the proportion by five percentage points (equivalent to 50 seats) to hit the government’s 2015 target. Women now make up one-quarter of non-executives directors, although the figure plummets to 7.2% for female executive directors.
A major concern remains the lack of women at the very top, with only four female CEOs in the UK’s largest 100 companies (Royal Mail, Easyjet, Burberry and Imperial Tobacco). Currently 36 companies have 25% or more female board members, with 13 having 30% or more. The highest performer is brewer Diageo (with 44%), followed by Capita (40%) and Royal Mail and Unilever (36% each). The ratio drops for the FTSE 250, which boasts only 15% women directors (comprising 19% non-executive directors and 5% executive directors). One-fifth of the UK’s largest 250 companies still have all-male boards.
Wetlands withering in China
China’s wetlands have shrunk nearly 9% since 2003, new figures show. Asia’s largest economy is home to more than one-fifth of the world’s population, but only 6% of its freshwater resources. According to China’s State Forestry Administration [english.forestry.gov.cn], the world’s most populous country has lost 340,000 sq km of wetlands over the past decade – an area larger than the Netherlands. China has earmarked $660bn to invest in water security projects over the next decade.
Wind tops Spain’s energy mix
Wind has emerged as the most important source of power generation in Spain’s energy mix. At 23% of all energy produced, the output of Spain’s wind farms outstrip that of its coal-fired (14%) and combined cycle (9%) power stations. Nuclear (21%) is the second most important source of electricity in the country, while hydroelectricity now represents a credible 14% (compared with 8% in 2012).
Spain’s grid operator Red Electrica De Espana estimates that the introduction of renewable energy during 2013 has reduced carbon dioxide emissions in the electricity sector by 23% to 61.4m tonnes per year. Renewables now account for 42.4% of Spain’s electricity generation. The wind sector achieved a new maximum of instantaneous power of 17.056 MW on 6 February 2013.
Asia shining in solar power
The Asia-Pacific region is predicted to account for around half of all new solar photovoltaic generating capacity in 2014, according to the industry research group Solarbuzz. The vast majority (95%) of the 23GW in anticipated new generating capacity is expected to come from five countries: China, Japan, India, Australia and Thailand. The projected capacity gains mark a 35% increase on the 18GW added in 2013. According to the Chinese Bureau of Energy, China alone aims to install 12GW in 2014, with 8GW to be installed on rooftops, and the remaining 4GW on the ground.
Workforce overlooked in climate cuts
The rising cost of energy means 92% of workers in the UK are concerned about their domestic energy bills, but only 47% have given any thought to the cost burden faced by their employer.
Employers are missing a trick. Engaging their workforce around energy efficiency could save UK businesses £300m per year, the Carbon Trust estimates. The biggest single gain could be in reducing air travel: a 5% reduction in work-related flights would translate into £128m in savings (plus a 1.5m-tonne reduction in carbon emissions). At present, however, fewer than one in four employees have ever been asked to help save energy at work, and only 13% say their employer offers incentives to workers that take steps to reduce energy consumption. Three-fifths of employees say they would be more likely to save energy at work if they were praised, with a similar number admitting that they would be equally motivated by financial rewards.
US companies ‘must do more’
Over nine in ten US citizens say companies should implement more sustainability practices, while 63% think that they should “actively pursue” such practices. The findings, in a survey by Hill & Knowlton Strategies, also reveal that only about one third of the US public believes companies are doing more to combat climate change than they were a decade ago. The findings suggest an appetite for information among US citizens, however, with 62% interested in learning what companies are doing to improve energy efficiency. The most trustworthy means of companies doing this is via third party organisations, say half of those interviewed.
Foot-dragging in Hong Kong
Companies listed on Hong Kong’s Hang Seng Composite Index are dragging their heels to a worrying degree on climate change. Only 26 of the 216 listed companies analysed by Carbon Care Asia currently measure their carbon footprint. Only five had clear targets, meanwhile. The poorest performers were small-capitalisation firms, with a mere 3% measuring their emissions.
Big risks in year ahead
Severe income disparity is the most likely risk currently facing the planet, according to the World Economic Forum. On a scale of 1 (least likely) to 5 (most likely), respondents to the WEF’s Global Risk 2013 report gave the issue as 4.22 rating. Next on the list are chronic fiscal imbalances (3.97), rising greenhouse gas emissions (3.94), water supply crises (3.85) and mismanagement of population ageing (3.83). Income disparity also topped the ranking as the risk with the highest potential impact (4.04). Interestingly, water supply crises climb into second place in impact terms (3.98), while chronic fiscal imbalances drop to third (3.97). Also in the top five risks by impact is the diffusion of weapons of mass destruction (3.92) and the failure of climate change adaptation (3.90).
Clean tech requires $1tn a year
What’s the bill for fixing climate change through clean tech? Christina Figueres, the United Nations’ climate chief, reckons a cool $1tn a year should do it. Global investment in clean technologies is currently around $300bn. According to Figueres, the world’s biggest pension funds and other asset owners invest less than 2% of the funds under their control in clean energy infrastructure. This compares with about 10-15% directed towards coal and oil.
Global Compact axes 107 firms
The Global Compact expelled 107 companies in the last six months of 2013 for failing to submit a communication of progress report, the United Nations-backed initiative announced. The expelled companies comprise about 2% of the 4,416 required to submit such a report over this period. During the same six months, 707 new companies joined the Global Compact.
Emissions heading upward, BP says
Energy company BP predicts that carbon emissions will jump by 29% over the next two decades. Its recent Energy Outlook report anticipates a 41% increase in energy consumption by 2035. The vast majority (95%) of the projected rise in energy consumption is expected to occur in non-OECD countries.
Energy use in these countries will grow at 2.3% per year during 2012-2035, compared to 0.2% per year in the case of OECD countries, the oil major states. While reliance on coal is expected to fall, fossil fuels overall are still projected to comprise 81% of the energy mix by 2035, a 5% drop on 2012 figures. In terms of power generation, renewables such as hydro and solar will increase from their current share of 5% to 13% come 2035.
UK rail passengers happy
The passenger satisfaction rate on the UK rail network hit 85% in 2012-13, Network Rail reports. Train punctuality, meanwhile, registered at 90.9% for the same period, marginally down on the 91.6% rate achieved the previous year. The company’s carbon emissions – its own, not those of rail companies – dropped by 4,185 tonnes of carbon dioxide equivalent to a total of 303,078 tonnes CO2e.
Clifford Chance’s patchy pro bono record
Law firm Clifford Chance gave on average 18.4 hours of pro bono work per lawyer during 2013, the company’s corporate responsibility report reveals. Lawyers in the firm’s American offices gave substantially more of their time (47.4h), followed by the UK (29.4h). Figures for Asia Pacific (7.7h), central and eastern Europe (7h) and western Europe (7.3h) are markedly lower.Clean technology Corporate Responsibility Research CR Cheat Sheet CR Stats CSR Cheat Sheet energy solar