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CSR pay gap shrinks
Men continue to out-earn women in corporate social responsibility (CSR) positions within global blue-chip firms, although there are signs that the gap is shrinking. According to a new survey, the global average salary for men in the sector is £67,408, down 0.7% on 2014. Although women earn less, at £55,148, their pay has increased by 5.6% over the past two years. UK salaries are lower than the global average, at £63,180 and £52,170 for men and women, respectively. North Americans of both sexes are likely to get paid the most, while consultants are paid on average £10,000 per year less than their in-house peers. Professionals in the telecoms (£94,000) and natural resources’ (£91,000) sectors top the salary list, while those in construction (£54,000) and retail (£55,000) find themselves at the bottom. Men continue to be more likely than women to receive bonuses of more than £20,000.
Unequal pay doesn’t appear to detract from job satisfaction. The majority of respondents describe themselves as either satisfied (56%) or very satisfied (around one quarter) with their current employment. In addition, 93% of in-house employees and consultants would recommend a career in the sector. This is despite an increasing feeling of job insecurity, a concern cited by 21% of those surveyed (up from 17% in 2014). Having a university degree (79% of respondents) or a post-graduate degree (63%) will increase the chances of landing a job in the sector. While a professional qualification can help (34% of CSR professionals have one), the qualification need not necessarily relate to CSR specifically (58% of those with professional qualifications previously specialised in a non-CSR area). Once people have broken into CSR, most choose to stay, the data shows.
Palm firms lead deforestation pledges
More than three-fifths (61%) of large companies working in, or heavily exposed to, the palm-oil sector are now publicly committed to making their supply chains deforestation-free. This contrasts with companies active in cattle and soy, in which only 15% and 19% of large companies boast such commitments, respectively. This disparity is described as “alarming” by Forest Trends, the US non-profit group behind the findings, since cattle production causes 10 times more deforestation than palm.
Among the 566 major corporations tracked by Forest Trends, 80% of companies involved in the production, processing and trading of the “big four commodities” have made public deforestation pledges while 62% of downstream companies, such as manufacturers and retailers, have made commitments. Upstream is where the largest potential difference can be made, the report’s authors claim. They cite the example of Wilmar International, which handles more than 16m tonnes of palm per year. In contrast, Walmart, one of the largest retailers in the world, sources a mere 96,000 tonnes of palm annually. In total 366 of the companies tracked have committed to shift to sustainable sources, up from 123 last year
US energy emissions fall
The US energy sector is becoming gradually cleaner, with its carbon dioxide emissions now 12% lower than 2005 levels. The findings, revealed by the US Energy Information Administration, are largely the result of a reduction in coal-fired power production. Energy consumption in the US generated 5.2bn tonnes of CO2 last year, down from 5.4bn tonnes in 2014. The reduction comes despite inflation-adjusted economic growth of 15% over the past decade. Energy consumption by the residential sector accounts for 1.04bn tonnes of CO2, compared with 0.92bn tonnes and 1.43bn tonnes for the commercial and industrial sectors, respectively.
Climate climbs agenda for pension funds
Leading pension funds and insurers are making their portfolios more resilient in the face of a warming planet, although the sector still has many laggards. According to the Asset Owners Disclosure Project (AODP), 97 of the world’s 500 biggest investors with $9.4tn in funds are taking “tangible action” to mitigate climate change risk. This is evidenced through a substantial rise in support for shareholder resolutions and low carbon investment during 2015. A further 157 investors (worth $14.2tn) are taking their first steps, the AODP finds. Even so, 246 of the world’s largest investors are reckoned to be “doing nothing at all” to mitigate climate risk.
The dozen investors that have taken the most stringent measures on climate have outperformed the Global Climate 500 Index over five years. Three-quarters (74%) of leading investors (rated A to AAA) are measuring carbon in their portfolios, up from 67% last year. However, only 2% of asset owners have declared a target for reducing portfolio carbon next year.
The AODP’s annual report also reveals that low-carbon investment grew by from $85bn to $138bn in 2015. The Netherlands is the most active, with $39bn invested in low-carbon stocks. The UK’s £2.9bn Environment Agency Pension Fund has 26% of its portfolio in low-carbon assets, the highest in the index.
Institutional insights
UK cities breach air pollution standards
London, Glasgow, Leeds, Oxford and Southampton are among 10 UK cities found to be failing World Health Organization standards for fine particle air pollution. This type of air pollution – known as PM10 – leads to between 30,000 and 40,000 early deaths across the country each year. An additional 39 urban areas also breached the safe levels for another measure known as PM2.5. Globally, urban air pollution levels have increased in cities by 8% between 2008 and 2013, according to the WHO. The worst affected areas are low- and middle-income countries in the eastern Mediterranean and south-east Asia regions, where annual mean levels often exceed five to 10 times WHO limits. Air pollution from particulates can cause lung cancer, as well as worsen heart and lung disease.
World cities at risk of climate impacts
An estimated 1.3 billion of the planet’s projected population of 9 billion in 2050 will be at risk from climate-change-related natural disasters if no preventable action is taken. Assets worth $158tn, equivalent to twice global economic output, could be at risk as well. These startling projections are not the calculations of a climate campaign group, but derive from the usually moderate World Bank-backed Global Facility for Disaster Reduction and Recovery.
The threat emerges from a combination of population increase and unplanned urban growth, with the world’s fast-growing yet low-lying cities expected to house the bulk of the planet’s rising population. Between now and 2030 the population in 14 of the world’s 20 most populated cities is expected to jump by at least two-fifths. In some cases, already over-crowded cities could see their populations leap by more than 10 million. Existing trends offer a taste of what is to come. Total annual damage – averaged over a 10-year period – has risen tenfold over the past four decades, increasing from $14bn in 1976–1985 to more than $140bn in 2005–2014.
The report follows another worrying study by the World Bank about the economic impact of water shortages by the middle of the century. The worst-hit areas are expected to be the Middle East and Africa’s Sahel region, which could see 14% and 12% stripped off their annual GDP, respectively. Central Asia (11% fall in GDP) and east Asia (7%) follow closely behind. As well as economic impacts, water shortages are expected to spur migration and spark conflict in water-scarce areas. On a more positive note, better water management could actually improve economic growth rates in some areas by as much as 6%. In some countries, about two-thirds of water is currently lost to old and leaky pipes alone.
Company snapshots
Dow Chemical increases clean energy target
The Dow Chemical Company has revised upwards its clean energy target after completing its 2025 goal of sourcing 400MW a decade early. After announcing its 2025 goal only last year, the US chemical company has now nearly doubled its 2025 target to 750MW. Dow achieved its initial 400MW goal primarily through a partnership with NRG Energy, a US energy producer, which, among other sites, owns the 150MW Goat Mountain 1 and II wind farms in Texas. Dow committed to buy the output from the two farms to power its Freeport facility, as well as purchasing an additional 150MW from other renewable energy facilities owned by NRG. NRG’s generating capacity from its wind and solar facilities amounts to 4,313MW. Dow is currently in the top five industrial users of renewable power in the US.
www.dow.com/en-us/science-and-sustainability
UK co-operative movement on the up
The UK now has nearly 7,000 independent businesses, with collective revenues of £34bn a year and a labour force of 223,000. Membership of cooperatives has increased by 14.3% over the past five years, to a total of 17.5 million individuals. The increase derives in part from the number of people joining high street retailers and credit unions, and partly from the rise in community-owned organisations. After a turbulent few years, the Co-op is set to return £100m annually to its members and their communities by 2018, as well as recruiting a further 1 million members. The Co-op is the largest cooperative business in the UK, followed by John Lewis. Co-operative retailers in the UK boast an annual turnover of £24.3bn generate annual turnover of £5.8bn.
cheat sheet CSR gender pay deforestation energy emissions climate air pollution climate change Global economy