The companies in the apparel coalition are enthusiastic about the VCI’s clear role in helping their executives, managers, and employees make better choices based on fuller awareness of their consequences. Recycling one ton of paper saves 2584l of oil, 26498l of water and 2.5 cubic meters of landfill space. Socially responsible investing has matured beyond negative screening to become a value-seeking discipline and a positive impetus for change. The initial phase of the law is experimental yet involves 1,000 products made or traded by 168 companies. The 2020 edition of the Sustainable Energy in America Factbook – produced for the Business Council for Sustainable … 30. Consumers can search for a product on the Good Guide website or use a smartphone app to scan a product’s bar code and see a rating. But the success of ratings like Energy Star show how resoundingly people respond when, in considering products in a category, they are presented with a single rating. Those standards compete and overlap in multitudinous ways. Germany has the best recycling rate in the world followed by Austria, South Korea and Wales. The Sustainable Apparel Coalition’s experience suggests steps to get an industry working in concert. Smart money will flow to the ends of the earth in a quest to “go long” on profitable value chains with the lowest all-in cost to the planet, whereas value chains with high true costs will increasingly be viewed with greater concern, and will be subject to lower ratings and higher costs of capital. 22. Inspired by that success, but eager to consider more than one dimension of performance (Energy Star looks only at energy efficiency), the electronics industry created its EPEAT standard in 2006 to provide a consumer-facing rating accounting for more than 50 environmental criteria, including use of heavy metals and toxic flame retardants. 21. 9. Growing a Sustainable Economy. 19. Big changes are needed to achieve such an economy. Sustainable Consumption and Production (SCP) Action Plan. We described above how VCIs produce ratings of products and brands based on their environmental and social impacts. “This is nothing to do with corporate social responsibility and the green agenda,” Chris Knight, of PwC’s sustainability practice, told The Financial Times. Shareholders of companies like Dow Chemical were pressured to divest or be considered complicit in producing wartime matériel. The global population is projected to grow from 6.9 billion people to perhaps 9 billion by 2050. If the entire world ate like the average American, there would not be enough water in the world to sustain the global population. Informieren Sie sich über die Vielfalt aller Samsung-Aktivitäten. Progress will be fastest if we can create a system in which the products that cause the least harm also have the lowest price. Today, at least one of those is in place. Both of these initiatives bring businesses to the table with stakeholders to set appropriate sustainability goals based on industry benchmarks and to identify best practices for reaching them. So the VCI offers three views: a brand view, a factory view, and a product view. Inclusive and sustainable economic growth can drive progress and generate the means to implement the Sustainable Development Goals. The United Nations Environment Programme estimates, for example, that one-third of global food production depends on animal and insect pollination, and the value of this service is $200 billion annually. And as for Sustainability 4.0? The use of water efficient fittings and fixtures has the ability to cut water use in homes by 45%. A designer on the team starts work on a cotton blouse. In other words, the index ignores traditional Wall Street quantitative metrics (cash flows, revenue, and so on) and bases its composition on ESG factors. Later, in the 1970s and 1980s, pension funds took heat for making investments in companies not perceived to be aligned with the goals and values of labor unions. Plastic bags and Styrofoam containers can take up to thousands of years to decompose leading to marine animal death and the contamination of soil and water. An energy-smart clothes washer can save more water in one year than one person drinks in an entire lifetime. The aim is to balance economic prosperity with environmental sustainability and social inclusion and cohesion, promoting sustainable investment … In just 18 months this coalition has expanded to include 40 companies that together represent over 30% of the global market share for apparel and footwear. The Sustainable Apparel Coalition, a group we are closely involved in, was launched two years ago, when Patagonia asked Walmart to get behind an effort to create a value chain index for our industry. Together they make for a bewildering set of arbiters. Economic sustainability means that decisions are made in the most equitable and fiscally sound way possible while considering the other aspects of sustainability. In the beginning, it was seen as an operational concern, consisting of largely defensive efforts to reduce companies’ environmental footprints and cut waste. But what if we could get to the point where the lowest-priced T-shirt was also the one doing the least harm to the planet and society? A company committed to sustainability but working unilaterally can accomplish only so much. In the name of economic … According to the authors, progress in each area spurs progress in the others, to the extent that the long-sought alignment of a firm’s prosperity with the best interests of the planet seems not only possible but inevitable. But the unfortunate effect of our seeing these inputs to well-being as incalculable has been that they are treated as free. China is the world’s top polluter emitting 10,357 metric tons of carbon dioxide, followed by the United States, India, Russia and Japan. Regimes like “cap and dividend”—which proposes to tax carbon suppliers, raise the price of energy-intensive products and services, and then rebate all those costs back to consumers— would surely drive rapid market-based innovation. One last consideration driving fund managers toward sustainability-focused investments is hard to prove but widely suspected: Companies taking the lead in environmental, social, and governance matters have better management teams. 7. Doctorate With regard to sustainable development, “ the tenets of neoliberal economic agenda such as commodification, deregulation, privatisation and cuts in government expenditure may in some context undermine the attainment of sustainable … The SAC envisioned that retailers would use its index to compare the sustainability performance of brands they might stock, manufacturers would use it to vet supply chain and other vendors, and designers would use it to specify products and processes least harmful to the planet. For these reasons, many would-be social investors have felt forced to choose between maximizing returns and investing with a conscience. Progress in each area spurs progress in the others, with the result that the long-sought alignment of a firm’s prosperity with the best interests of the planet seems not only possible but inevitable. A company that earns better ratings than its competitors will be rewarded with business from downstream customers. What happens when the trends we’ve just described combine to fuel one another? Mpumalanga province in South Africa has the highest levels of air pollution in the world, in terms of nitrogen dioxide levels, due to a high concentration of coal power plants. It’s generally cheaper to buy the product that has a worse impact on its environment than the equivalent product that does less harm. Investors are seeing more and more examples where even their assumption of higher costs is disproved. Lighting accounts for 15% of global electricity use. In 2016 many world leaders adopted the United Nation’s 17 global goals/Sustainable Development Goals to improve life all around the world and preserve the earth’s resources and fight climate change. The World Bank, in its 2011 report “The Changing Wealth of Nations,” set the estimate for all the planet’s natural resources—its forests, rivers, wetlands, wildlands, farm and grazing lands, minerals, oil and coal, oceans, biodiversity of species—at about $44 trillion dollars, with $29 trillion belonging to developing nations. As VCI metrics turn into a reliable proxy for value, banks will take notice. Perhaps the biggest conflict seen regarding sustainable development is economic in nature. If that’s true—and the proposition makes sense given that sustainability innovation is complex and requires real talent—it would clearly pay off in many ways. Sustainable development can be defined as an approach to the economic development of a country without compromising the quality of the environment for future generations. But three keys to reaching that goal have been lacking in the past: data, vision, and will. In July 2008, the Commission proposed a package of actions and proposals on SCP and Sustainable Industrial Policy (SIP) (COM(2008)0397), which aimed to improve the environmental performance of products throughout their life cycle, to increase consumer awareness and demand for sustainable goods and production technologies, to … In that scenario, consumers’ bargain hunting would align perfectly with business practices that sustain a healthy and just world, and powerful market forces would be put in the service of sustainability’s goals. 25. Once this happens, everything changes. Here are 30 facts about sustainability to help connect the dots: 1. 10. She then selects a vendor offering organically grown cotton, but the score is still low because she has sourced the cotton in western China, where irrigation is drawing down an aquifer faster than rainfall can replenish it. Until recently, SRI generally focused on screening out the negative aspects of a given company or a sector. Surely all these considerations have contributed to the fact that today nearly one in every eight investment dollars goes to a company that qualifies as a socially responsible investment. Examples show that this is exactly where limits to growth imply more sustainability. From there, it’s a short hop to the second way that fund managers will use VCIs. The Ariel Fund, for example, screens for environmental impact, tobacco, weapons, nuclear energy, and lack of diversity. Solutions to one problem must be solutions for all.” – Ban Ki-Moon. INDIVIDUALS IMPACT OUR ENVIRONMENT . The United Nations and the World Bank are also working on the problem. This is the second trend, one that is gathering force in the capital markets. By innovating more closely with suppliers, customers, and others in their value chain, companies in every industry are finding ways to reduce impacts that save money—and not simply by shifting their own footprint to someone else’s operations but by cutting the costs incurred and waste produced across the system. Consider that, as the true value of clean oceans, rivers, and forests becomes clear and acknowledged by businesses around the world, a multitrillion dollar market becomes visible. This chapter reviews the literature on the economic … In 2011 Dow Chemical pledged $10 million over five years for a team of scientists from The Nature Conservancy to help Dow develop ecosystem service valuation methods. And yet collectively we have not been making progress on reducing the damage business does to the world. Graduate Focus on who will use the index and how. Make measurement as accurate as possible. That evolved into a more strategic stance—let’s call it Sustainability 2.0. Growth and a sustainable economy, how does this go together? Because many of these impacts have been hard to gauge with any precision—or to assign to individual businesses with fairness—their costs have remained external to businesses’ accounting. Still the perception lingers in many quarters that sustainable investing leads to lower market returns because it limits the universe of securities to draw from. And Grenelle II, a French law, is already requiring certain consumer products to carry labels that disclose total GHG emissions and two other environmental impacts associated with the product. As the tool has taken shape, its potential has become clear; in particular, the design of the tool to provide three distinct views of performance—at the brand level, the factory level, and the individual product level—means that decisions at all levels can now be informed by sustainability considerations. The right to safe drinking water was first recognized by the UN General Assembly and the Human Rights Council as part of binding international law in 2010. Headquarters - Rue Mauverney, 28 He is co-author of Harvard Business Review’s “. It’s important to swiftly establish the right project scope, but the initial VCI tool only needs to be “good enough” to set the stage for refinements. As with any corporate index, a VCI gains power to the extent that it is applied consistently across most or all firms in a sector, and also applied over time to track relative performance. Achieving economic growth and sustainable development requires that we urgently reduce our ecological footprint by changing the way we produce and consume goods and resources. Businesses are rarely obliged to pay for the full toll their operations take on the world. Keep in mind that when only the economic aspects of something are considered, it may not … In economic terms, to be truly sustainable, the overall demand for natural resources (also known as ecological footprint) must be less than the nature’s renewable supply of resources (also known as biocapacity). Higher cost to planet does not translate to higher price to customer. Further, given the transparency of the data and calculations involved, consumers could delve deeper into a rating if they chose. 26. It will be evident that a better VCI score helps value chain players grow share while reducing risk—and increases their access to low-cost capital. A growing number of companies in Ger­many are already making a commitment to society as part of conducting sustainable business. 28. Even without such alignment (and notwithstanding the failure of the Copenhagen climate conference) we are seeing interesting legislation proposed. One recipient later said, “When you get a letter from Mike Duke and Yvon Chouinard, with the logos for Walmart and Patagonia side by side, it’s so bizarre that you have to read it.” The goal was to assemble a coalition of stakeholders as wide as possible without diluting the vision. But few of the companies in the coalition, as far as we know, foresee how the creation of a value chain index will help to usher in a new era of sustainability. First, “prices” are now being calculated for many things that had been considered priceless; second, capital is flowing into companies known to manage those costs well; and third, indices are being established that allow disparate contributors in a supply chain to converge on sustainability standards. In 2016 many world leaders adopted the United Nation’s 17 global goals/Sustainable Development Goals to improve life all around the world and preserve the earth’s resources and fight … In most cases, projects and decisions must be made with the long term benefits in mind (rather than just the short term benefits). An example is the erosion control provided by mangrove forests: How much would it cost to achieve the same control by other means? The focus ranges from the total carrying capacity (sustainability) of planet Earth to the sustainability of economic sectors, ecosystems, countries, municipalities, neighborhood, home gardens, individual lives, individual goods, and services this includes the use of natural resources prudently to meet current needs without affecting the ability of the future generation from meeting their needs. A dizzying array of labels has cropped up in response to companies’ desire to communicate to consumers their environmental efforts. 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