Environmental disclosure linked to higher financial performance
A new report by the UK NGO the Carbon Disclosure Project (CDP) and Sustainable Insight Capital Management has linked high levels of transparency on climate engagement with higher financial performance. The report, Linking Climate Engagement to Financial Performance: An Investor’s Perspective, analyses the CDP disclosure scores of 702 companies covered in CDP’s Global 500 climate change reports from 2008 to 2012. Using peer-to-peer comparisons, companies were ranked by industry and split into quintiles by their CDP disclosure score, then examined against various metrics of financial profitability. The analysis shows that industry leaders with higher CDP scores produced higher returns on equity, had more stable cash flow generation and higher dividend growth. This contrasts with study that was published last week by the UN Global Compact and Accenture, which found that 63 percent of CEOs struggle to quantify the business value of sustainability. (Environmental Leader)
‘Stern 2.0’ to review economic costs of tackling climate change
The UK, Norway, Sweden, Indonesia, South Korea, Colombia and Ethiopia are launching an $8.9 million assessment of the economic costs and benefits of tackling climate change. In what some are calling “Stern 2.0”, the study is expected to build on the 2006 UK review of the economics of climate change by the UK economist Lord Nicholas Stern, who will review the paper. Commission members involved in the study include business leaders such as Paul Polman, the chief executive of Unilever, and several former prime ministers and presidents. Lord Stern said that the full costs and benefits of climate policies need to be better understood at a time when governments worldwide are struggling to boost growth and access to food and energy. The report will be published in September 2014, at the same time as the UN Secretary General, Ban Ki-moon, has called a New York summit to encourage progress ahead of the 2015 talks in Paris that are intended to forge a legally binding global climate change agreement. (Financial Times*)
Olympic medal mining firm faces US air pollution lawsuit
Rio Tinto, the mining company headquartered in London that provided the gold, silver and bronze for the London 2012 Olympics, is being sued over claims of illegal air pollution at the mine that produced the 4,700 Olympic and Paralympic medals. Doctors, environmentalists and US citizens in the state of Utah claim that the Bingham Canyon mine has breached air pollution laws for five years, causing effects which one of the groups involved in the lawsuit, Utah Physicians for a Healthy Environment, said are “similar to smoking 20 cigarettes a day.” The claimants allege that emissions from the mine, which is known as the “biggest man-made hole on Earth,” are a “major health threat to citizens.” Rio Tinto has denied the claims, and stated that the medals were made of some of the most ethically and environmentally friendly metals ever sourced. (The Guardian)
Consumers
US regulators target fake online reviewers
US regulators have announced that a year long investigation to ensnare companies that are posting fake online reviews has resulted in settlements with 19 US companies. Businesses involved, including a charter bus operator, a teeth whitening service, a laser hair removal chain and an adult entertainment club have agreed to pay a total of $350,000 in penalties. Several reputation management firms were also involved for their roles in creating fraudulent reviews for their clients on websites such as Yelp, Google Local and CitySearch. The US search engine Yelp welcomed the crackdown, and said that it was critical that the company protect the integrity of its content. The New York Attorney General, Eric Schneiderman, said that “consumers rely on reviews from their peers. This investigation into large-scale, intentional deceit across the internet tells us that we should approach online reviews with caution.” (Financial Times*)
Supply Chain
Starbucks ads highlight sustainable sourcing
The US coffee retailer Starbucks has launched a campaign that focuses on the quality and sourcing of its coffee beans. The New Origins campaign involves showing consumers footage of coffee plantations in the company’s supply chain as well as elements such as the roasting process. The video footage, which will be shown in selected cinemas across the US, will also include printed advertisements in magazines and newspapers to highlight the importance of an ethical supply chain to consumers and is part of the company’s aim to be more transparent. This move towards supply chain transparency follows that of McDonald’s, which recently launched a video about the sustainability of its own coffee to aid the expansion of its McCafe beverage line. (Sustainable Brands)
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