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Chief Sustainability Officer

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’.

Getting to grips with ESG risks

The role of the CSO covers a widening set of mandates and duties amid the multiple sustainability challenges that confront organizations. Deloitte’s recent report, The Future of the Chief Sustainability Officer, highlights how changes in the corporate’s external environment is intensifying scrutiny from stakeholders, fuelling an ever-greater focus on Environmental, Social, and Governance (ESG) risks.

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.

Competencies for CSO leadership

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-making’ and ‘O’ for ‘orchestration’. As such, the CSO has a critical role helping companies to understand what is happening outside the organization, in support of decisions that “embraces disruption, innovation, and stewardship… The multifold tasks and hybrid roles can push a CSO to live both in the present and anticipate the future”.

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.

Where next on the CSO journey?

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. 

hydrogen transport
Storing energy as hydrogen is seen by many as a critical part of the energy transition and the road to net-zero emissions. That goes for hard-to-electrify transport applications as well as a wide range of industrial and domestic heating, cooking and other applications.

A new study and Well-to-Tank (WTT) model by Element Energy, commissioned by Zemo Partnership, identifies a range of pathways for the production, distribution and dispensing of low carbon hydrogen to transport end-users. It shows the energy requirements and greenhouse gas emissions resulting from each potential pathway, as well as the infrastructure requirements related to each choice.

32 pathways

The research looks at a combination of six production configurations, three distribution pathways, and two dispensing options – a total of 32 potential pathway combinations.

The work identifies the greenhouse gas emissions associated with each hydrogen supply chain pathway, based on technologies available today, as well as those expected to be commercialised in the medium-term such as offshore electrolysis, gas reformation with carbon capture and storage (CCS) and waste gasification with CCS.

It shows that fundamental choices exist in terms of the production of ‘green’ hydrogen using electrolysis powered by renewable electricity or ‘blue’ hydrogen, primarily produced by reforming fossil natural gas combined with CCS. It also looked at the implications of using biomethane in place of fossil gas and hydrogen derived entirely from biogenic waste.

The study also considers the energy use together with emissions arising along the full production, distribution and dispensing pathway, including unavoidable – or fugitive – emissions likely to arise during the process. It shows that there is a wide variation in the emissions associated with each of the alternative pathways, depending on the carbon footprint of the energy and feedstocks used.

Carbon negative possible

The work suggests that renewables-based electrolysis is expected to represent one of the lowest emissions pathways in the medium-term. Natural gas reformation using emerging autothermal (ATR) technology with CCS could also significantly reduce emissions compared to current industrial steam methane reforming (SMR) process for so called ‘grey’ hydrogen.  There are even potential pathways to generate carbon-negative hydrogen when biomethane is used, or through the gasification of waste, allied with CCS.

Whilst the study showed GHG emissions can be almost eliminated, improvements in the efficiency of the process of electrolysis are expected to contribute to a modest reduction in the energy intensity of this pathway in the medium-term.  There are opportunities to co-locate hydrogen production with renewable energy, using surplus or currently curtailed energy at times of high production/low demand.

The study provides a detailed model allowing new pathways to be assessed and gives an overview of the quality of the data used in the analysis, identifying areas where further work and monitoring is needed.

The study Executive Summary is available here and the full report here.

ev demand electric car

European consumers are increasingly turning to electric vehicles as focus turns to the industry. Several initiatives from governments are inspiring the ev demand from consumers.

According to data acquired by Finbold, the demand for new passenger battery electric (all-electric) vehicles across Europe surged 231.58% between Q2 2020 and Q2 2021, from 63,422 to 210,298. The figures reflect a triple growth in demand for all-electric vehicles.

Elsewhere, demand for the hybrid electric vehicle also spiked by 213.54% to 541,162 representing the biggest growth for all new passenger vehicles in Europe. In total, the electric vehicle registration as of Q2 2021 stands at 751,460, a growth of at least three times from the Q2 2020 cumulative figure of 236,015.

During the period, plug-in hybrid vehicle demand surged 255.8%, from 66,252 to 235,730. Natural gas vehicles recorded demand of 41.84% from 9,515 to 13,497.

Furthermore, during the first half of 2021, battery electric vehicles recorded a share of 6.7% under new passenger cars by fuel type in the region. Hybrid electric vehicles had a share of 18.9%, while plug-in hybrids stood at 8.3%. Petrol accounted for the highest share at 42%, followed by diesel at 21.7%. Natural gas had a share of 0.5%.

Government incentives spurs EV demand

The report explains how different government policies contributed to the surge in demand for electric vehicles in Europe. According to the research report:

“For instance, when the coronavirus pandemic hit, most governments across the region focused their stimulus packages on companies that are operating in line with fighting climate change. Notably, a big part of the support focused on incentives for consumers to buy EVs, creating a surge in demand.”

Additionally, the demand emerged at a period, the electric vehicle industry suffered a chip shortage due to supply chain constraints due to the pandemic. However, the full impact will manifest later this year.

Read the full story with statistics here.

fair tomato

Our awareness of problems with human rights arise mainly from the textile chains. But working conditions in other chains, such as the tomato chain, are also under pressure. The Dutch Central Bureau for Food Trade (CBL) and the Dutch trade union FNV are planning to conduct research into the production chain of the canned tomato trade. The research focuses on Italy, a major supplier of tomatoes. The aim is to identify by the end of July the specific risks of human rights violations in the tomato chain and which improvements are needed. Recommendations have been drawn up on how the Dutch participants in the chain can initiate positive change.

Various studies and risk analyses show that the tomato chain is a so-called high-risk chain. Jos Hendriks, director FNV Food Industry: “We are investigating the supply chain of canned tomatoes to determine the risks we face when it comes to violations of human rights, trade union rights and the environment and to identify who is involved. But the most important part comes after the research: how do we ensure that the guidelines of the OECD (Organization for Economic Co-operation and Development) and United Nations with regard to people and the environment are applied in the cultivation, harvesting, transport and processing of the tomatoes?”

Guarding human rights

The CBL agrees with the importance of tackling the risks. Jennifer Muller, Sustainability Manager at CBL: “Dutch supermarkets find it essential that human rights are safeguarded throughout the chains. It is therefore important to investigate possible social abuses in the Italian tomato chain and to gain insight into the operational perspective of the parties involved. Collaboration is crucial for thorough research. We are therefore happy to join forces with the FNV to bring about positive change.”

Research into the share of Dutch producers and buyers

An important part of the research is mapping the share of Dutch producers and buyers in the Italian tomato chain. In this way, it is possible to better see in which component steps can be taken to improve the position of employees. This includes investigating the role played by supermarkets, manufacturers and organizations that issue quality certificates.

lng terminal

A proposed boom in new LNG import and export terminals is increasingly going bust, according to a new survey and report by Global Energy Monitor. Coming on the heels of the IEA’s recent call for a halt to new gas, oil, and coal investments, the report finds that more than one-third of proposed new global LNG terminal capacity is facing financing and project delays.

The report, “Nervous Money: Global LNG Terminals Update 2021,” includes the following highlights:

  • Worldwide, at least 26 LNG export terminals totaling 265 million tonnes per annum (MPTA) of capacity report final investment decision (FID) delays or other serious disruption—38% of the 700 MTPA of export capacity under development worldwide. In the US, at least 10 LNG export terminals totaling 123 MPTA of capacity report FID delays or other serious disruption—39% of the 314 MTPA under development.
  • Total’s declaration of force majeure for the Mozambique LNG Terminal, following an attack by insurgents, has highlighted the vulnerability of terminals priced in the tens of billions of dollars.
  • The cost overruns, scheduling delays, and high outage rate that plagued the LNG sector were further exacerbated in the past year by Covid-related workforce disruption.
  • Once regarded as a potential climate solution, the LNG sector is increasingly seen as a climate problem, particularly for European buyers. According to the IEA, inter-regional LNG trade would need to decline rapidly after 2025 under a 2050 net zero scenario.
  • Globally, only one LNG export project has reached FID in the past year, Costa Azul LNG terminal in Mexico.
  • North America accounts for 64% of the global export capacity in construction or pre-construction. North America also has the most troubled projects, with 11 of the 26 LNG export terminals reporting FID delays or other serious disruption.
  • Aggressive expansion of capacity in low-production-cost Qatar and the Russian Arctic has increased risks to U.S. LNG export developers.
  • Despite the rise in delays in development of LNG export capacity, global LNG import capacity continues on an aggressive expansion path, with enough projects in construction or pre-construction to increase global capacity by 70%. Of the capacity in construction or pre-construction, 32% is in China, 11% is in India, and 7% is in Thailand. Outside Asia, Brazil is a hotspot with 13 LNG import terminals in construction or pre-construction.

“LNG was sold to policymakers and to investors as a safe, clean, secure bet,” said Lydia Plante, lead author of the report. “Now all those attributes have turned into liabilities. The sheer size of the projects has exposed investors to catastrophic losses. And the recent IEA 2050 scenarios show that LNG has no place in a climate-safe energy future. The industry has lost its climate halo, and the only question is whether the Biden Administration will waste precious political capital propping up potential white elephant projects.”

“Those who are accustomed to thinking of infrastructure as a ‘safe’ investment may be in for a rocky ride with LNG terminals,” said Ted Nace, Executive Director of Global Energy Monitor. “The opportunity has narrowed for more export capacity to be built, and North American projects have fallen behind for several reasons. They’re rightly seen, especially by European buyers, as particularly dirty, due to their reliance on fracked gas. In addition, Qatar and Russia both have access to cheaper gas, and they’re not about to relinquish market share.”

Read the report here.

Image: photographic services, Shell International Limited.

ifad sslrp

All over the world, it’s small scale farmers who suffer severely from climate change. Effects can differ locally, but hit the poorest hardest. In South Sudan, IFAD set up a support program, investing almost 20 million US dollar which will affect some 40,000 local households of small-scale food producers.

A new US$19.9 million project will bring much needed help to 38,800 rural households facing the impacts of poverty, food insecurity and climate change. The South Sudan Livelihoods Resilience Project (SSLRP) will empower rural people to boost productivity, food security and nutrition, and resilience. At a time when the COVID-19 crisis and climate change could further push the 85 per cent of South Sudanese who live in rural areas into deeper poverty, SSLRP will target the most vulnerable, food insecure and small-scale producers, engaged in fishing, cropping and livestock production.

In South Sudan, poverty is higher in rural areas, with 80 per cent of the population living below the poverty line and depend on agriculture for their livelihood. Therefore agriculture is key to defeating poverty and hunger. However, South Sudan, a resource-rich country and the youngest nation in Africa, remains the third most fragile in the world.

Conflict and poverty

Its agriculture sector’s potential is not fully exploited to due to a long conflict and prolonged instability, and poverty and food insecurity remain challenges. Irrigation and water harvesting technologies are inadequate, and there are poor post-harvest and value addition facilities. Adverse weather conditions and flooding are also challenges to small-scale production and access to markets.

In SSLRP, 70 per cent of beneficiaries will be youth and 60 per cent will be women, including returnees, women-headed households and persons with disabilities, who will receive particular attention to facilitate their integration into agricultural production and rural economy activities.

In South Sudan, farmers continue to bear the brunt of climate change, and the project will address their need for access to drought tolerant and early maturing seeds, drought tolerant agroforestry fodder species, water conservation and management, afforestation, mangroves rehabilitation and conservation, solar and other renewable energy sources. SSLRP will also rehabilitate and construct water infrastructure, rural roads to give access to markets, and processing and storage facilities. To build and strengthen the capacity of the beneficiaries and the government during the implementation phases, SSLRP will partner with the African Development Bank (AfDB), Food and Agriculture Organization of the United Nations (FAO), the International Labour Organization (ILO) and the World Bank.