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Companies stay true to sustainability pledges
Companies are increasingly making commitments in response to shareholder proposals and dialogues, but do they meet them? A study by sustainability advocacy non-profit group Ceres finds that they do. Nearly three-quarters of the 101 corporate commitments analysed by Ceres were fully met, with a further 13% nearly met. Only around one tenth were either “only partially” met or not met at all. The commitments mostly cover sustainability reporting (31), greenhouse gas reductions (28) and sustainable agriculture and deforestation (18). As an illustrative example of positive investor engagement, Trillium Asset Management persuaded the US conglomerate 3M to set a quantitative renewable energy goal of sourcing 25% of its electricity needs from renewable sources by 2025. In doing so, 3M will add nearly 800,000 megawatt hours of renewable energy use globally – primarily from wind and solar. During the US 2015 proxy season, 167 resolutions related to or motivated by climate change were filed.
Official: top 1% own majority of world’s wealth
The “1%” has become a talisman for campaign groups and politicians over recent years. Now there’s statistical proof courtesy of Swiss bank Credit Suisse that the top 1% of the global population controls more than half (50.4%) of the world’s wealth. The poorer half of the global population, in contrast, has, on average, less than $3,000 to their name. Around 3.4bn individuals (equivalent to 71% of the adults in the world) have savings and assets worth less than $10,000. Those with $68,800 or more, meanwhile, find themselves in the top 10% bracket. There are more than 34m US dollar millionaires in the world, who comprise less than 1% of the population but who collectively lay claim to 45% of the world’s wealth. Among their number are 123,000 ultra-high-net-worth individuals, defined as those whose assets exceed $50m.
Per capita wealth by region, meanwhile, is led by North America (at a net worth of $342,302 per adult) and Europe ($128,506). Lagging the per capita table are Indians ($4,352 per adult) and Africans ($4,536). The appreciation of the US dollar has impacted global wealth outside the US, eliminating more than half of the rise in personal wealth per adult since the end of the financial crisis.
Credit Suisse: Global Wealth Report 2015
Impacts of plastic bag levies
Recent rule changes requiring English shoppers to pay 5p for plastic bags bode well if the experience in Scotland is anything to go by. According to government data, shoppers requested 650m fewer single use carrier bags after the 5p levy came into effect last year. This equates to a saving of 2,500 tonnes of carbon dioxide equivalent. Bag use at major supermarkets such as Morrisons, The Co-operative and Waitrose dropped by 80%. Sainsbury’s went a step further and eliminated bags altogether. Many retailers give funds generated through the levy to charity, with £6.7m donated so far in this way. In Wales, where a 5p levy was introduced in 2011, between £17m and £22m has gone to charities since the measure’s introduction. Bag use has dropped by 70%.
Scottish government
Welsh government review
Wrap to tackle e-waste and clothing challenges
Globally, an estimated 41.8m tonnes of e-waste was generated in 2014, forecast to increase to 50m tonnes of e-waste in 2018. This jaw-dropping figure has persuaded the government-backed non-profit group Wrap to co-invest in a €2.1m project designed to harvest critical raw materials and precious metals from everyday end-of-life electrical products, such as consumer electronics and ICT equipment. Research by Wrap suggests that around 40% of electrical products are disposed of in landfills.
In another development, Wrap is supporting a €3.6m EU Life funded pilot project aimed at designing products for longer life and ensuring that less clothing goes to landfill, among other goals. The four-year European Clothing Action Plan comes in the light of findings by Wrap that suggest using our clothes for three months more would lead to a 5-10% reduction in each of the carbon, water and waste footprints. In the UK, an estimated £140m worth (around 350,000 tonnes) of used clothing goes to landfill every year.
El Niño poses climate chaos
At least 10 million people worldwide face the risk of food insecurity because of the onset of an extreme El Niño weather event in 2015-16, according to anti-poverty charity Oxfam. Strong El Niños reinforce the likelihood of certain climatic events (including severe droughts) happening in specific parts of the tropics, which cover about 20-30% of land areas. New research suggests that so-called “super El Niños” may occur twice as often as before due to global warming – so every 13 years instead of every 23 years. The last major El Niño was 1997-98, which caused extreme weather events that led to an estimated $33bn in property damage. The report notes that 2014 and 2015 are already the hottest years on record, with the full impact of the current El Niño still to be fully felt.
Oxfam, Entering Unchartered Waters
Institutional insights
EU on course for 2020 carbon targets
The European Environment Agency is optimistic that the European Union will exceed its 2020 greenhouse gas emission targets by 4 percentage points. The EU’s 28 member states, which passed their 20% reduction target (against a 1990 baseline) last year, are projected to reach a 24% reduction figure by the end of the decade. The performance comes despite a 46% increase in the European economy between 1990 and 2014. The trading bloc is also on course to meet its renewable energy target of 20% of energy needs from low-carbon fuels by 2020. Renewables accounted for 14.1% of energy consumption in 2012, according to the EEA’s latest figures. At a recent summit, the EU agreed to cut emissions by 40% by 2030 (over 1990 levels). Meanwhile, a 27% target was set for reducing energy consumption by 2030 (also, based on 1990 levels). The same figure of 27% was chosen for renewable energy as a proportion of total energy generation by the end of the next decade.
Ethical benchmarks outperform mainstream
Leading ethical benchmarks have consistently beaten their non-ethical peers over the past five years, according to the UK Social Investment Forum (UKSIF). Between October 2010 and October 2015, the FTSE All Share Index returned 43% to investors, compared with an average of 48% for FTSE4Good UK (FTSE’s benchmark ethical index). Globally, the FTSE4Good Global Benchmark returned 62% compared with 60% for the MSCI World over the same period. Poor performance of oil and mining stocks has contributed to the bounce seen in ethical indices, which often screen out polluting industries.
A separate survey undertaken by YouGov, meanwhile, finds that more than half of mainstream investors say they want their investments to have a positive impact. Almost one in three UK adults say they would like to have a “fossil free” investment option, rising to nearly half among under-35s. Two-fifths of UK adults believe large pension funds should be required to measure and, if necessary, reduce the carbon footprint of their investments. The research was commissioned for Good Money Week, an annual event coordinated by UKSIF.
For all their good intentions, however, most investors don’t know the impacts of their investments. A study by Netherlands-based Triodos Bank reveals that almost two-thirds of UK investors are unaware whether the activities of industries or companies they are investing in are ethical or not. This is despite a substantial preference among UK investors (71%) for more of their pensions and investments to be invested in environmental and social sectors, such as renewable energy and sustainable business.
Mental health service uneven
In more than 50 low-income countries, health services provide only one mental health worker per 100,000 people, the World Health Organisation warns. In countries such as Tajikistan and Ghana, mental health spending is lower than $2 per capita. This compares with $330 in Sweden, the highest spending country on mental healthcare in the world. Lack of adequate mental healthcare leads to early mortality as well as years of lost productivity, calculated collectively as “disability adjusted life years” or DALYs. The US notches up 4,128 such years per 100,000 people, with Estonia topping the chart at 5,640 DALYs per 100,000 people.
WHO: World Mental Health Atlas 2014
WHO World Mental Health Day 2015
Corporate insights
Microsoft’s green energy purchases cover power demand
Microsoft bought more than 3.2bn kilowatt hours of renewable energy, covering the equivalent of its entire global electricity demand in the last financial year, the US technology company reports. Microsoft purchased nearly one quarter (23%) of its renewable energy directly, with the remainder comprising renewable energy credits. The green power purchases were made possible through an (undisclosed) internal carbon fee that Microsoft introduced in 2012. Since that date, the company has bought more than 10bn kWh of green power, as well as reducing its emissions by 7.5m tonnes of carbon dioxide equivalent. In January 2015, the US Environmental Protection Agency ranked the firm as the second largest user of green power in the US. Among its recent investment is a 20-year agreement to buy 100% of the output from the 110MW Keechi Wind Project in Jack County, Texas.
Microsoft 2015 Citizenship Report
US cleaning products sector reports industry-wide gains
The American Cleaning Institute, which represents the $30bn US cleaning products market, has reduced its waste footprint by almost one fifth since 2009, according to the institute’s first sustainability report. Other highlights of the report, which includes metrics from 33 ACI members such as Procter & Gamble, Henkel and SC Johnson, centre on water efficiency improvements (up 21% since 2009) and increase green energy consumption (up more than 30% since 2008). The report captures sustainability performance for 17.3m tonnes of cleaning product-related production.
ACI 2015 Sustainability Report
Demand jump for sustainable food and beverage products
Nearly half of the 57 global food and drink companies surveyed by consultancy firm Pure Strategies report increased sales of sustainability-related products over the past year, up from 19% in 2013. All the companies analysed – a group that includes Mars, WalMart and Coca Cola – now have formal product sustainability goals in place. This marks an increase from 82% two years ago. The majority of companies (83%) report having high or very high levels of executive buy-in for product-related sustainability initiatives. Among the main perceived benefits of integrating sustainability into food and drink product portfolios are employee engagement (cited by 63% of firms), supply chain risk reduction (58%) and compliance with retailer requirements (56%).
Pure Strategies, The Food and Beverage Industry: Advancing on the Path to Product Sustainability
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