Today’s hippest teen-brand Shein fashion is growing rapidly – and its internet-based recipe for success is top secret. Still, Chinese researchers working on behalf of Public Eye managed to visit some of Shein’s suppliers in Guangzhou, where conditions of production violate numerous state labor laws. Our trip inside the ultra-fast fashion leader also takes us to the European logistics center in Belgium, where precarious working conditions are also a daily occurrence.
The realization of a hyperloop network for goods between the provinces of North and South Holland in the Netherlands will cause a one-million-tonne reduction in CO2 emissions and could lead to a significant improvement in air quality. This is one of the main conclusions of the research conducted by Hardt Hyperloop. Transporting goods by hyperloop also has a positive economic impact on the logistics sector and allows for better utilization and freed up capacity of the current infrastructure.
Hardt Hyperloop, which is working on the development of the hyperloop, sees great opportunities for the logistics sector to make use of this sustainable and rapid means of transport. First at a regional level and later at a national and European level. Dominik Härtl of Hardt Hyperloop who led the Cargo-hyperloop Holland study explains: “We approached this research differently from previously performed hyperloop studies by directly involving the future users of the system as well as other key stakeholders. For this project, we established a collaboration of 35 stakeholders from the private and public sectors, including some of the largest Dutch exporters from the horticultural and fresh food industry.
1,100 fewer trucks on the A4 motorway every day in 2030 between Rotterdam and Amsterdam
They not only provided crucial input to the product requirements but also contributed to selecting the locations of the hubs as well as the route alignment. The project largely follows the A4 motorway, which connects cities such as Amsterdam, The Hague and Rotterdam. The A4 is crucial to the economic performance of this region. However, it also ranks among the most congested in The Netherlands. Currently proposed solutions will only partially solve this issue. Hyperloop could add capacity and therefore ease congestion on existing infrastructure while also increasing connectivity and productivity.”
A very important result of the research is that the realization of Cargo-hyperloop Holland contributes to a substantial reduction of CO2 emissions. Dominik Härtl elaborates: “In the calculations, we took into account the construction of the infrastructure and the associated hubs. Even then, we can achieve a large net positive effect of 0.6 million tonnes CO2 after 30 years of operations. The hyperloop is, therefore, the answer to the growing demand for sustainable solutions for (high-speed) transport of goods while also being able to create a system for transporting people in the near future.”
The research also shows that building a hyperloop network for freight contributes to reducing many of the negative side effects associated with the logistics sector. “Think of fewer accidents, less noise, and less congestion at a time when not all freight transportation will have to be carried via the highway,” Härtl explains. In 2030, by only realising the corridor, it could already mean that almost 1,100 fewer trucks would need to use the A4 every day. With further expansion of the hyperloop network in Europe, hyperloop could replace over 2,500 trucks daily in 2050 and offer a sustainable alternative to flights within Europe.
The construction of a hyperloop network requires a substantial investment. Härtl: “The costs for the project are estimated at approximately EUR 1.5 billion. This is far less than the road investments made and planned for the region in the recent past. In return, the economic gains are significant. For example, it gives the industry a boost and provides employment for at least 13,000 people. Together with the CO2 savings and improvements in transportation time and reliability that can be achieved, it makes a very good investment.”
To leverage the full potential of economic benefits, the implementation of the entire Cargo-hyperloop Holland corridor is recommended. By optimizing logistic processes and introducing hyperloop transport services, the project can generate benefits of about EUR 3.2 billion. Comparing the benefits and costs with each other shows that the project delivers a net present value of almost EUR 2 billion and has a Benefit to Cost Ratio of 2.62. This can be considered as very high for transport infrastructure projects. Those benefits could be even higher when transporting passengers within the same infrastructure.
The study also examined various sections of the corridor individually to assess their viability as a pilot. Here, the connection between the Greenports is particularly promising and shows strong economic performance even as a stand-alone route. Härtl: ” A Greenport route could serve as a technology demonstrator and show how hyperloop would function during commercial operations. In turn, this route could help to create public support and also encourage people to travel by hyperloop by demonstrating its safe operation.”
The research shows that the investment is sustainable and economic and contributes to greener cities. Dominik Härtl concludes: “The results of this study are promising and our recommendation is to start with a feasibility study, which would allow for a more detailed assessment of all the aspects relevant to this project before progressing towards implementation. The Dutch MIRT program could serve as the right environment through which this project could be brought to the next stage. Our ambition is to have the first route operational by the end of this decade and this project could very well be one of the first hyperloop routes globally.”
The COVID-19 pandemic has undoubtedly caused the largest economic and societal shock the world and risk management have experienced this century. Yet it was not unforeseen. As far back as 2006, the annual Global Risks Report from the World Economic Forum warned that a pandemic was an ‘acute threat’ across all industries globally. This year’s WEF report expands into new dimensions of risk, such as the consequences of digital inequality and cybersecurity failure. Meanwhile, the 2021 report from the Intergovernmental Panel on Climate Change sounded a ‘code red for humanity’ – setting out in the starkest terms that the risks of inaction on climate change are now irrefutable.
What all of these risks have in common is that they threaten or disrupt not only economies but, more importantly, the wellbeing and sustainability of humanity and the planet. It’s logical, therefore, to conclude that they are challenges that demand global cooperation and societal cohesion to overcome.
At the corporate-level, effective, pre-emptive, and dynamic enterprise risk management is more relevant than ever. That is why the role of risk manager is no longer confined to traditional financial risks and regulatory expectations but progressively is contributing more into how to support a sustainable business model. The GRI Standards – the world’s most widely used and comprehensive sustainability reporting standards – enable organizations to assess and communicate their impacts, which is increasingly relevant from the perspective of risk management. The revised Universal Standards – launched this month – re-emphasized the scope of impact needs to be inclusive of potential risk.
The World Business Council for Sustainable Development (WBCSD) describes sustainability risks as uncertain social or environmental conditions that could cause significant negative impacts on the company. As the pandemic has proven, these risks can pose existential threats to companies. Or, as former US Secretary of State Condoleeza Rice put it: “sustainability is a multiplier of risk”, exponentially increasing volatility and uncertainty.
What this means is that, to be successful over the long-term, businesses must not lose sight of their sustainability risks. Against this backdrop, a recent GRI webinar, Aligning Sustainability and Risk Management, explored the ways that the integration of sustainability was shaping the role of risk managers, increasingly their relevance to the organizational transformation process. Here we share some of the insights from the session, which was the second in our Building Leadership for Sustainable Business Expert Series.
Constant Van Aerschot, Director of WBCSD Asia Pacific, pointed out that many companies tend to treat sustainability issues separately from risk issues. A recent WBCSD report on integrating sustainability and enterprise risk revealed that companies recognize that the material topics in their sustainability reports have a financial impact – yet these same companies often fail to address ESG-related risks in their annual risk filings.
Priya Bellino, Ernst and Young’s ASEAN Head of Sustainability and ESG for Financial Services Consulting, emphasized the role of financial institutions in encouraging companies to manage sustainability risks. The example she shared was in the real estate sector. Climate change and extreme weather events are exposing physical assets to a much higher risk, which affects the value of real estate portfolios. As a consequence we are seeing more incentivization through green building financing and the adoption of green certifications.
To access new opportunities, companies need to measure and monitor “investment-grade sustainability performance”. That cannot be achieved without reliable and comparable disclosure – with Priya acknowledging that GRI reporting helps the company to deliver the required ESG data.
Yet – as Tony Rooke, Director of Climate Transition Risk at Willis Towers Watson, set out – determining the right ESG data points is a crucial step on the journey to understanding risks and achieving sustainable business outcomes. Tony went on to share that, for companies to begin to understand their role in tackling global risks, such as climate change, the market needs to further develop or create a reward system for those who transition to zero carbon business models.
According to the 2020 State of Risk Oversight report, from the Enterprise Risk Management Initiative, 54% of large organizations and 58% of public companies have appointed a Chief Risk Officer (CRO). With the growth of the role, we have also seen increases in scope – helping organizations identify, analyze and mitigate their risk exposure. So, it is clear that many organizations are recognizing effective risk management as a key ingredient to the long-term wellbeing of the business.
Where the CRO evolution can and must deepen is in the correlation between enterprise risk and sustainability risk. Having a CRO that leads on sustainability is a good sign that a company is resolute in its sustainability commitment. The CRO does not have to be a know-it-all; more important is that they have the competencies to lead and build a team, collaborate with external stakeholders such as investors and regulators, bringing the ESG and conventional risks strands together into a single, meaningful narrative.
As Ricardo Nicanor N. Jacinto, Trustee of the Institute of Corporate Directors Philippines, articulated, the CRO is fast becoming “both the risk culture custodian and champion”. That is increasingly significant as the challenges of COVID-19 underline that we live in a volatile, uncertain and complex world. Therefore, whatever is up next on the risk forecast – be it this pandemic, the climate crisis or a yet to be defined new threat – having the expertise to assess the multiple and concurrent sustainability risks facing the business is more essential than ever before.
Lany Harijanti, ASEAN Regional Program Manager, GRI
Somewhat by chance and because I was working in the right place at the right time, I was one of the journalists who exclusively leaked the contents of one of the most important reports in recent years. This is the report by Working Group 3 of the UN organization – the IPCC – which is in charge of designing proposals to mitigate the effects of climate chaos. Both those already caused and those yet to come. The conclusions drawn from what has happened so far and from the report itself are not easy to digest. And precisely because of this, much less is being done than what is essential.
Let’s start by recalling that there was a leak prior to ours, of the report from the Working Group 3 – the one in charge of measuring the impacts – made by Agence France-Presse (AFP) in June of this year. I don’t know where the leak came from and what it contained, but the headline: “Life on Earth can recover from major climate change. Humanity cannot”, went around the world and we at Fastlove analysed it here.
These IPCC leaks already revealed that there was a certain nervousness in the scientific community, and a desire to skip the step of review and modification by governments of the summaries of the reports (yes, incredible as it may seem, governments can propose changes to scientists and must unanimously approve the final summary of each working group). Moreover, these summaries are what the absolute majority of journalists read, and they are the basis for the subsequent information that is disseminated, as the reports are several thousand pages long each. Although the scientific work is unimpeachable, this makes it even more difficult for the more daring positions to appear.
Then, a month and a half after the first IPCC leaks – on 6 August – just 3 days before the first part of the report was officially published (Working Group I – in charge of giving science evidence), a very special piece of content reached the Extinction Rebellion Spain movement, of which I am a member. We are talking about the leaked summary of Working Group 3, the mitigation proposals.
Obviously this part of the report is very important, as it has to dive into proposing paths that are passable to avoid the worst results of the climate chaos we have already unleashed.
And while sometimes they are not as bold as the situation requires – even with the summer of extreme events we are experiencing – on this occasion there are parts of the report that have challenged the usual somewhat tepid logic of previous reports.
Based on the previous work of more than 14.000 different studies, very briefly their conclusions are clear:
For all the above reasons, the content of the exclusive has gone around the world.
We first published it in the Spanish magazine CTXT, from there it reached The Guardian in the UK, the Spiegel in Germany, CNBC in the US and Yale University, as well as India, China, Indonesia, Brazil and many other countries.
As if this were not enough, the source of the leak (a group of scientist-activists, Scientist Rebellion) was so happy with the work that they passed us more material (the entire chapter 1 of the report) and with it we were able to produce another article in CTXT, co-written with some of the best experts in our country on the issue, and which has even been translated into English in the prestigious Monthly Review. Well, now that the maelstrom of work and unleashed emotions has passed, and the content has settled, I am going to try to summarise how complex I see this issue.
Embracing degrowth can be key to managing climate chaos, and capitalism as we understand it is unsustainable.
These are the two main conclusions. And the fact that they are reflected in a report that tends to be more conservative than daring says a lot about the seriousness of the situation.
The first thing I would like to do is to thank the enormous team effort that has made it possible for this to get this far. Secondly, I would like to point out that there are many barriers in the media. Some – most of the television channels – have not even deigned to mention the leak. They dare not speak clearly about the enormous problem and how little is being done to solve it. And this barrier is key. If it is not told, it does not exist. And it is impossible to do what needs to be done.
You may be wondering: how huge is the climate problem? Well, I remember the headline of the first leak:
“Life on Earth can recover from major climate change by evolving new species and creating new ecosystems. Humanity cannot”.
Extinctions seem to us to be a thing of the past and could never affect us, the all-powerful and omnipotent being that calls itself “Sapiens Sapiens”, while destroying its own life support. But there are many facts that confirm that this is not the case. The current rate of species extinction is tens to hundreds of times higher than the average of the last ten million years. And it is accelerating. Dangerously close to the rate of the previous 5 great mass extinctions. Add to this runaway climate change that may take on an irreversible inertia for humans. It is not serious. It is a matter of life and death.
Extinctions are usually caused by an abrupt change in some factor that destabilises the quasi-magical balance of life on Earth. In the past they have been triggered by a series of volcanic mega-eruptions or a meteorite impact. And this sixth mass extinction is happening because of us. Yes, us. We are the meteorite now. At least the unbridled economic system we have built.
This story was first published on resilience.org
Electric cars and hybrid cars create more carbon emissions during their production than standard vehicles. That sheds a different light on the speedy transition to electrical transportation that climate activists advocate.
Electric and hybrid cars create more carbon emissions during their production but are still greener overall, according to a new report. A new report by Ricardo highlights the increasing importance of accounting for whole life carbon emissions to compare the greenhouse gas emissions of low carbon vehicles.
Some of the CO2 savings made during the use of low carbon vehicles are offset by increased emissions caused during their production, and to a lesser extent disposal. However, overall electric and hybrid vehicles still have lower carbon footprints than normal cars.
For example, a typical medium sized family car will create around 24 tonnes of CO2 during its life cycle, while an electric vehicle (EV) will produce around 18 tonnes over its life. For a battery EV, 46% of its total carbon footprint is generated at the factory, before it has travelled a single mile. For a conventional cars that is 26%.
However, an accelerated replacement of fossil fuel propelled cars by electric, may lead to a perverse effect. In stead of reducing CO2 emissions in the short term, they will increase. Producing an electric vehicle emits almost twice as much greenhouse gas as a conventional one. It takes several years, depending from the annual mileage, to break even.
The calculation is simple: the extra emissions from production have to be compensated by the savings when operating the vehicle.
But there are complications. When a new car is sold, the old one usually enters the used car market and remains in use. At the end of the line some 5% of cars are scrapped annually, much less than new car production. And new conventional cars emit considerably less during operation than older ones, which decreases the lifetime footprint advantage further. (The carbon footprint of an electric car should be compared to a new, state-of-the-art conventional car of the same size, which it actually replaces. But electric replacements also tend to be larger than the cars they replace.)
On average, we look at some 4 tonnes of extra co2 per electric car produced, which has to be offset by 0.5 tonne annually of prevented emissions. According to these figures it would take some 8 years to break even. (Given electric cars run on 100% renewable energy)
The automotive industry is taking steps to address this issue of production emissions- the recent announcement by Toyota of a solar array to provide electricity to power the hybrid Auris production facility and wind power at the Nissan Leaf plant are excellent examples of this.
But that will be far too little too late to result in short term effects. After all, we aim at 2030 for first results. No electric car sold today will contribute to those under the present conditions.
A key factor is car ownership. Reducing car ownership – especially in cities – and replacing it by electric car sharing, would result in a much more effective reduction of co2 emissions in the short term. It will reduce the need for new car production and take more cars out of circulation. And it will shift from fossil miles to electric miles much faster.
Of course this is a somewhat radical idea. But the central question is not how to sell as many electric cars as possible, it is how to reduce emissions and save the climate. That does take radical solutions to achieve it. The report does not address that. We do.
The report “Determining the environmental impacts of conventional and alternatively fuelled vehicles through LCA” and its associated documents are available for download from at DG Climate Action’s web pages.
The perspective that meaningful and credible sustainability reporting is an essential requirement for any responsible business is increasingly becoming accepted, by many companies around world. Yet reporting cannot take place in isolation. Sustainability is a critical aspect of business strategy and operational decision-making, which needs to be embedded in the corporate DNA through a transformative process.
That process takes time and requires strong leadership at the C-suite level, which has led to the emergence of the Chief Sustainability Officer (CSO). Less than two decades ago, a CSO was a novelty. The first-known CSO appointment was Linda Fisher at Dupont in 2004. By 2011, there were 29 CSOs in publicly traded companies in the USA – and in 2020, Fortune 500 companies hired more CSOs than in the previous three years combined.
Cognizant of the crucial role of CSOs in accelerating business action on sustainability, in 2020 the Prince of Wales’s Sustainable Markets Initiative launched the Sustainable 30 Group. Comprised of CSOs from some of the world’s most influential companies, its aim is to ‘collaborate on initiatives and actions to help protect and drive sustainable stakeholder value’.
The role of the CSO covers a widening set of mandates and duties amid the multiple sustainability challenges that confront organizations. Deloit
Despite these realities, which have only been heightened by the business resilience pressures of the COVID-19 pandemic, the need for a CSO is still yet to be embraced evenly by all major corporations. Some are still at an earlier stage in determining why and how to integrate sustainability, as enabled by transparency, into their business functions and processes.
Against this backdrop, Global Reporting Initiative (GRI), provider of the world’s most widely used and trusted sustainability reporting standards, held a webinar in July under the theme ‘do companies need a Chief Sustainability Officer?’. Unsurprisingly, the findings of the session were an unequivocal ‘yes’. This was the first instalment of a seven-part Building Leadership for Sustainable Business expert series, which runs until July 2022. Next up will be an event in September on aligning sustainability and risk management.
Through up-close and personal discussions with six distinguished CSOs and sustainability champions in Southeast Asia, the webinar illuminated why a CSO is becoming indispensable, what their core competencies, skills and leadership attributes are, and how the CSO will be crucial to the implementation of successful business strategies in future.
Herry Cho, Managing Director and Head of Sustainability and Sustainable Finance with the Singapore Exchange (SGX), debunked the myth that advancing sustainability comes at the expense of profitability. According to Cho, the financial and non-financial performance and impacts are “interwoven by ESG analysis” – and the CSO’s commercial mindset enables them to “add value to every function in the organization” – anticipating sustainability risks and opportunities that may impact the organization’s financial and strategic position.
The CSO challenges the traditional understanding of leadership, according to Yvonne Zhang, Deloitte Southeast Asia Sustainability Leader. As she puts it, the CSO’s leadership qualities can be set out as ‘C’ for ‘credibility’; ‘S’ for ‘sense-
Esther An – CSO for City Developments Limited (CDL) in Singapore – reflected on key learnings from her CSR and sustainability journey over the past 20 years. In her view, a CSO should be someone who cares about the environment and the community at large; is committed to the cause of doing good and doing well; and creative and communicative in mapping out a sustainability centric strategy that has impact.
Darian McBain, Global Director, Corporate Affairs and Sustainability of Thai Union, emphasized that passion drives the CSO to be both a fighter and a collaborator. As she puts it, the CSO is not afraid to push something because it is the right thing to do, working with people across and outside the organization to make change happen. Similarly, Dr Simon Lord – an independent sustainability advisor, scientist and former CSO of Sime Darby Plantation – added that purpose and performance are of equal import to the CSO. Without a clear sense of purpose, one cannot perform well, and performance reinforces one’s purpose.
At the outset, embedding sustainability in the organization may entail some costs. However, according to Ignacio Carmelo Sison, Chief Corporate Officer of Del Monte Pacific, “In the long run the cost of investing in sustainability is less than the cost of not investing in it. Disruption, in its negative sense, would be a greater cost – be it environmental, social or operational. Sustainability is essentially the opposite of disruption. Companies, therefore, need to invest in the present to sustain the future.” This is the essence of sustainability and the CSO has a key role to work with stakeholders to future-proof the organization.
Companies cannot survive in an increasingly volatile, complex and uncertain world without putting sustainability at the core of their operations. Yet accessing the right people with the right sustainability skillset is not easy. As covered in analysis by GreenBiz this month, PwC intends to create 100,000 ESG jobs by 2026, reflective of the current situation whereby demand for sustainability professionals is far outstripping supply.
The mandate of the CSO can be expected to continue to evolve, while a comprehensive understanding of sustainability performance is likely to be a growing requirement for many other senior roles – be they Chief Financial Officer, Chief Risk Officer, and all the way up to CEO. Indeed, the ideal situation will see a CSO as unnecessary, with sustainability effectively integrated throughout the company’s operations, practices, products and services.
Until that day comes, the CSO is here to stay. Bringing vision, passion and purpose to the leadership team, they will be at the forefront of shaping the organizational transformation that is still needed to achieve a sustainable and successful future.
Dr. Allinnettes Adigue is Head of the GRI ASEAN Regional Hub in Singapore.