Environment: financing the business of sustainability
December 01, 2002
Groups of companies from the same industry sectors are increasingly tackling issues together. In the lead on measurement and reporting is the financial services sector.
Worldwide annual economic losses due to natural disasters could reach almost $150bn in the next decade, according to the UN Environment Programme’s Finance Initiatives, a partnership between the United Nations and 295 financial institutions worldwide. A report published on October 8 sets out the threats and opportunities that climate change brings to the financial services industry, including growth in new markets, increased demand for risk transfer and the cost of weather impacts on project returns. The UNEP report outlines the possible future role of the sector in dealing with climate change, including current barriers and recommendations for action. Membership of the working group that authored the report was drawn from Citigroup, Dresdner Bank and Prudential among others. Contact Paul Clements-Hunt, UNEPFI, on 00 41 2 2917 8116 (http://www.unepfi.net)
The financial services sector has agreed key social performance indicators for public reporting in the industry, aimed at supplementing the guidelines developed by the Global Reporting Initiative. Published on November 19, the guidelines are the result of a joint project, named SPI-Finance 2002, supported by ten institutions, including Credit Suisse, Deutsche Bank, The Cooperative Bank and UBS.
The tour operator industry is also launching recommended indicators on both social and environmental performance of the sector. The guidelines were published on November 13 by the Tour Operators Initiative, a global network supported by the UNEP, which includes British Airways, Six Continents and Accor as members.
These two industry-wide sets of indicators represent the first sectoral supplements to the established GRI sustainability reporting guidelines. Similar supplements for other industry sectors are expected to follow. Contact Mark Brownlie, GRI, on 00 1 403 288 2131 (http://www.globalreporting.org); Giulia Carbone, TOI, on 00 33 1 4437 1468 (http://www.toinitiative.org)
Radisson, Avis, Six Continents and Abercrombie and Kent are backing a report on corporate social leadership in travel and tourism. Published by the World Travel and Tourism Council in November, the report highlights the role the industry can play in addressing sustainable development. A good example is Ford’s conservation and environment grants, which promotes low impact and sustainable tourism. The programme was singled out at the World Travel Market Environmental Recognition Awards on November 11. Contact Rebecca Bloom, 0870 727 9882 (http://www.wttc.org)
Fiat Auto, Volkswagen, BMW, Porsche, Ford and General Motors are among a group of 13 car companies calling for global standards on auto safety and environmental regulations on September 27. In a statement drafted at a special meeting of the major automative trade groups of Europe, Japan and the USA, the companies vow to promote clean diesel technology and greater availability of low sulphur fuels. They are also calling for improvements in the quality of gasoline fuels and increased efforts to promote the development and sale of advanced technology vehicles such as hybrid electric and fuel cell cars. Meanwhile the UK government is launching a pilot scheme to enable consumers to compare vehicles’ environmental credentials, it was announced on October 28. Contact John Hollis, BMW, on 020 7872 5860 (http://www.bmw.com)
Danone, Nestlé and Unilever are launching a partnership initiative to develop and promote sustainable food production, it was announced on October 16. The Sustainable Agriculture Initiative is open to all food companies who want to participate in plans to share experience and learn from stakeholders along the food chain. Meanwhile, in the retail sector Boots, Kingfisher, Marks & Spencer, Safeway and Sainsbury’s are backing an agenda for improving the industry’s sustainability in 2003 and beyond, presented in a report at the sector’s second annual retail sustainability conference on November 19, sponsored by KPMG. Contact Maryline Guiramand, SAI, on 00 41 22 929 5758 (http://www.saiplatform.org)
US conservation groups are cancelling their campaigns against the US office supplies company Staples, following its announcement of a new environmental paper procurement policy on November 12. Staples pledges to phase out purchases of paper from endangered forests, and to achieve an average of 30% post-consumer recycled content across all paper products. Meanwhile Dell is offering US customers the opportunity to recycle used computers from any manufacturer at only the cost of the postage to the nearest recycling centre, the company announced on October 24.
In the UK, Dixons is supporting four charities in a drive to encourage customers to return their used computer inkjet cartridges for recycling. Dixons will make a donation for every cartridge received. Contact Paul Capelli, Staples, on 00 1 508 253 8530 (http://www.staples.com); Michele Glaze, Dell, on 00 1 512 728 4173 (http://www.dell.com); Clare Brine, Dixons, on 01442 353000 (http://www.dixons.co.uk)
ExxonMobil is investing $100m over ten years in a research project by Stanford University to tackle global warming, it was announced on November 20. General Electric and Schlumberger are also investing in the research, which aims to find solutions to global climate and energy needs. Contact Denise Fennell, ExxonMobil, on 01372 222 063 (http://www.exxonmobil.com)
Scottish Power took the Environmental awareness award at the National Business Awards 2002, announced on October 29, beating shortlisted BP, Interserve Project Services, Birds Eye Walls and DHL International. Contact Mike Faulkner, NBA, on 020 7234 8743 (http://www.thenationalbusinessawards.com)
B&Q and BP are keeping the UK’s green credentials at the fore in Europe, taking European Business Awards for the Environment at a ceremony on October 3, hosted by the European Commission. B&Q won recognition for its approach to environmental management, while BP’s work on gasoline desulphurisation secured the award for best environmental process. Contact Christine Patte, EC, on 00 32 2 296 5240 (http://www.cec.eu.int)
COMMENT:
Groups of companies from the same industry sectors are increasingly tackling issues together. In the lead on measurement and reporting is the financial services sector.
It’s been a long-running theme at Briefing that many of the most awkward CSR issues are best tackled through a concerted industry approach. Last issue, we reported on the mobile phone sector sorting out handset recycling (aided, it must be said, by an imminent EU directive). Here we report on travel, motor, agriculture and, ahead of the curve, financial services, variously addressing their own industries’ issues and agreeing how to report them externally.
Why are the banks and insurance companies moving ahead? One reason is that, if there is an overall business case, as financiers they see it first. The doubling in the cost of natural disasters which we’ve seen over the last decade feeds straight through to insurance costs and premiums. And when bankers lend money or invest in projects, they take a keen interest the world over risks that might affect their ability to get the money back. However, the business case clearly has its limitations. UNEP says lack of awareness is a critical barrier to further action, with banks citing delays by governments in reaching international agreement as a reason for not acting.
At heart, this boils down to difficulties integrating big picture climate change worries into individual commercial decisions. Without the numbers, bankers and actuaries find it hard to assess risks. Their scepticism about international climate change agreements such as Kyoto is understandable. It would take a cut in emissions by 60%, not a slow-down in the increase, to get down to the sort of double preindustrial levels that experts say we need. In truth, we are a long way from market mechanisms solving the sustainability challenge. At least for now we can say that these new industry reporting initiatives should yield consistent and usable numbers out, and so prepare the way for the bold and radical steps that must lie ahead.
COMMENTS