Tuesday, 10 December 2013

The journey of CSR – Corporate Social Responsibility to Corporate Sustainability Responsibility.

Regulations and principles hard-coded in the Companies Bill 2012 encourages businesses to group social, environmental and economic responsibility.
Co-authored by: Mo Polamar and Joya Chakravarty

The Companies Bill, 2013 finally received Presidential assent on August 29, 2013, landmark legislation has clauses on mergers, auditors, appointment of company directors. The act also called as the 2% bill allows for National Company Law Tribunal National Company Law Appellate Tribunal to fast-track company law cases and to enables the process of corporate structuring. This bill replaces a 6-decade-old archaic bill.
According to the law companies having a net worth of Rs.500 crore or more, or a turnover of Rs.1, 000 crore or more or a net profit of Rs.5 crore or more, during any financial year must spend 2% or more of its net profit on activities that are defined as Corporate Social Responsibility.
If the corporates take to the “2 percent clause” enthusiastically, and with responsibility we are looking at a world that is headed towards equity and justice. Primarily, the Bill seeks to direct profit to social and environmental causes bringing about inclusive development, It is high time.
Corporate Sustainability Responsibility.
It is hard to speak about social responsibility without referring to the environment as well. Since Climate Change is an accepted phenomenon coupling social and environmental responsibility becomes inevitable. This can be viewed as a fortunate development because environmental issues need urgent attention and this provision allows for it. Corporates must seize this opportunity and deal with social and environmental issues at once. The first step to this is to replace “social” with “sustainability” in the acronym CSR. The accepted definition for sustainability is that it is an intersection between economic considerations, social commitments and environmental responsibility.
“Shared value” instead of a “Giver/ Receiver” relationship.

Many companies look at CSR as a specialized activity and a diversion to their core activity. It is unfortunate that it is viewed in this manner because it creates a “Giver/ Receiver” sentiment allowing a hierarchy to form and therefore corruption of values.
This bill not so subtly leads the corporate to view social responsibility as a “Shared value” proposition. This means the bill intends to create a closed loop with social development and economic growth.

Profit center instead of a Cost center

For a successful implementation of this provision in a corporate the first and important step is to dare to view CSR as a profit center. Social benefit is a rather difficult concept to convert to numbers but when coupled with the environment, numbers can be allowed to appear and this is how.
There is embedded economy in every part of the business cycle. Efficient procurement, lean and green logistics and responsible manufacturing lead to increase in profit margin. By adapting to emerging waste management technologies additional revenues can be found adding to revenue growth. The above responsibility can be diverted to the existing CSR division, which must build capacity to handle itself as a profit center. There are a number of case studies that support this above approach. 

Need for Industry federations.

In order to efficiently practice Sustainability it is advised to form a chapter in the existing industry federations. The chapter’s focus will be to keep an informed watch for relevant developments in the external and internal landscape and to funnel the learning through appropriate mediums.
This chapter will raise awareness in a continued basis about sustainability to all corporate within the federations thereby creating a shared service to drive costs, to bring in efficiency and commonality in the practice. The result of a aware federation will automatically and simply lead to other collaborations that will eventually lead to resource conservation and therefore increase in operating margin.
This approach will allow corporates to choose their timing of entry thereby creating a coalition of willing and avoids the rocky and uncertain path of building consensus between everyone.

Market response

The BSE-GREENEX is an index that is been live for more than a year and when one tracks the index there emerges a trend. The market organically rewards companies that are practicing sustainability. Investors are bound to start looking at the green market indices in the various stock exchanges - if they haven’t started doing so already, in the near future.

Simple and straight interpretation of the bill.

1. The bill was made for India, as a response to the realities of the Indian conditions only.
2. There are 800,000 registered companies India. Only 2% of these companies amounting to 16,000 will fall under the ambit of the current bill.
3. The annual money estimated to be channelized as a result of the bill is less than 1/5th of a typical dept. in the govt. of India - the rural development dept. of GOI has an annual budget of rs  70 -80 thousand crores. 
4. So, it is not about the quantum of money being channelized into social and environmental activities as a result of the bill, it is about leveraging the efficiency of the corporate sector in getting the maximum "bang for the buck".
5. The bill drives the companies towards building effective partnerships with NGO's for monitoring and implementation.
6. The 'mandatory' tag on the bill is misleading - since it is the 'reporting', and not the 'spending; that is mandatory, 'Comply or explain' might be a better epithet.
companies can decide to opt out of the CSR spending as long as they give a reason for doing so.  The govt. will not check the credibility of the explanation, but it would be made available to the stakeholders of the company and the society at large through publication in various public domains.  The bill enjoins upon companies to set up a CSR committee, CSR policy, and publication of the CSR policy in public domain and list of proposed activities linked to the policy
7. The above activities cannot just be one-off, standalone activities, put part of specific projects that extend over a period of time with definite budget allocation and monitoring mechanisms in place.
8. The rules for the clause 135 - expected to be no more than 12 - 14 - are under the process of being drafted.

Friday, 22 November 2013

Materiality in Global Reporting Initiative (GRI G4), and the ISO 31000 Guidelines for Risk Management.

Reporting standards worldwide are working towards convergence.  There is an interesting relationship between the 'Materiality' focus of the recently released GRI G4 Guidelines, and the ISO 31000 Standard for Risk Management.

Materiality is defined as the tolerable error in statistical sampling.  In Accounting, Materiality is that threshold amount which, if known, would change the decision of the decision maker. e.g. if a transaction amount were to change by 10% from $100 to $110, would this effect a decision?

In Auditing,  The term audit risk refers to the probability of the statements not giving a true and fair view after the audit is completed.

In Financial Auditing, Risk and Materiality must be considered together.  The more material an item the greater the audit risk.  This means, an account or transaction of large dollar size represents a significant threat to the audit if it is misstated.

Materiality in GRI may also be thought of as a 'threshold'.  But unlike financial reports, the focus is much broader - encompassing economic, social and environmental impacts.  Also, the 'decision maker' here is a much wider groups of stakeholders who impact, and are in turn impacted by, the organization.  Thus, the threshold for being a 'Material' issues in GRI should ensure inclusion of all economic, social and environmental opportunities and risks that are regarded as significant by its stakeholders

Risk in ISO 31000 is the effect of uncertainty on the ability of an organisation to meet its objectives.  It is a combination of the Causes for the occurrence of some Events, the Likelihood of such occurrence, and the Consequences of such occurrence.  Risk Management is the deliberate set of actions that an organisation takes on acknowledging these effects of uncertainty.  

Risk and Materiality seem to be joined at the hip, irrespective of the framework through which one is trying to assess organisation health. Both the GRI and the ISO 31000 standards have been put together by panel of highly qualified international experts.  However one wants to name it, following the essential tenets of these guidelines in their spirit to identify Material issues, and applying the principles of Risk Management on such issues will let organisations leverage the full potential of these frameworks, instead of merely reducing them to reporting and compliance necessities.

Tuesday, 12 November 2013

How and Why Monsanto is spinning the Climate Corporations founder David Friedberg

Goliath gobbles David and David suffers from the Stockholm syndrome.
author - Mo Polamar

Monsanto's billion dollar purchase of the Climate Corporation met with much criticism and accusation. In an effort to appease his employees, David wrote a letter explaining the purchase and quell suspicion. But David Friedberg of Climate Corporation did not write this letter published by the Newyorker. Why?

This letter is written by an expert at spin. This person is obviously the best in the business and that is why it is brazenly self evident. I am aware that by writing this I am a victim to the strategy where the issue in question will take a back seat and the mode of communication is intended to divert us. Below is an analysis of the letter that Mr. Friedberg wrote to his staff.

This is a polarizing word that was first used by the Jr. Bush campaign to decisive effect. In using this word multiple times the reader is supposed to experience a certain disdain leading to gradual loss of association of the word to the topic in discussion called Monsanto.

Why Google:
The rest of us that survived this “Evil” onslaught were reminded of Google’s vision statement and thereby side tracking our rational faculty. I witnessed by mind entangled about Google’s nature of business which is far away from the reason I started reading this article.

Why was the sale worth Billion or is it important to understand the value? Again! the intention is to spin you and keep you in the world of disbelief with a simple word, “Billion”!

What must it be worth for Monsanto:
A Billion is just a number to Monsanto in the business of dominance of global agri produce but for Climate Corporation it is a number that is so vast that I am afraid to even get into the mind of the Mr. Friedberg. Monsanto gets 2 birds here with the accounting error of a Billion dollars. one, it picks up a respected climate research organisation and the scientists that come with it and two, it is a strategic investment to make if one has a vision and we know Monsanto has one hell of a vision.

“Dear David, I wish I was your Dad”
I wish David blogged the research and the reasoning that his quasi hippie father bought into. I wonder why the mother has no role to play. The theme of making ones father happy is a eastern one and for David to adapt that line is certainly un american and forced. The assumption that I would like to come to is that there are many peers of his dad in Climate corporation that David wants to retain by placing an emotional and personal argument. It is deliberately indirect for it leads one to a space of reflection and in this space of reflection and imagination a few danglers in form of millions of dollars will hang loose like candy. I wonder why everyone of us must research and find the truth when David can simply communicate it. Instead of this long winding missive he could have replaced them with facts that he found comfort it and rationale that he invented to accept the Billion.
As said earlier he did not write this letter.

This purchase of an angel by Satan (I use this loosely) is one that can have biblical proportions embedded in it. Is satan tired of his demonic ways and wants to change and so buys an Angel, perhaps. Or is satan sending a message that the exodus from the angel world is begun. This exchange of demons to the angel world and vice versa is a perpetual occurrence. As far as I am concerned, since David took a convoluted path to explain a decision I will conclude that either he is got something to hide or he is in sway to the wonderful delusion that money creates. Either way, I do not want to be in David’s place. I will defer my appointment with satan till he chooses to make one, with me.

Monday, 21 October 2013

Some Interesting Tweets by Sustainability Experts

1. Net metering—an emerging idea to encourage people to start using renewable energy.

This great concept does have some teething problems between renewable power generating customers and the utility companies (tweeted by Bill McKibben)

2. A Massachusetts coal fired electricity production plant is closing down. One of the reasons stated is the surplus natural gas. Great news!!!!! (tweeted by Bill McKibben)

3. The current fossil fuel divestment campaign is spreading in US and Europe. It is persuading investors to disinvest from fossil fuel sector. (tweeted by Bill McKibben)

4. Sustainability Trends Are Driving Commercial Real Estate Value. (tweeted by Simon Mainwaring )

5. A small town in the southeast of Austria generates renewable energies by pioneering technology. The process uses steam to separate carbon and hydrogen from scrap timber. The molecules are then recombined to make a form of natural gas. (tweeted by Gil Friend )

6. Lack of water affects energy generation. Enormous amounts of water are required to cool the steam created during generation of electricity in a thermoelectric plants.(tweeted by Neil Hawkins)

7. IPCC report shows states that it is very critical to work towards climate change and Global warming. Report also shows that by addressing the problem we can create opportunities. (tweeted by David Suzuki)

8. Chevrolet, GMC and few others to come up with bi-fuel versions of vehicles in near future. (tweeted by Julie Urlaub)

9. The Investment Carbon Screener in the Bloomberg Terminal calculates the carbon footprint of equity investments. (tweeted by Gil Friend )

10. Cities those are moving towards urban sustainability. (tweeted by Alice Korngold)

Tuesday, 15 October 2013

Trash Trail - Climate Miles' trip to understand the Urban Reality of Waste

Whenever a newby joins the Climate Miles Pvt. Team , he/she is asked to go for the 

The "Trash Trail" is an interesting journey which I must mention, changes your life. We all know about the waste problem in Bangalore & other cities in the country, yet no one truly knows the reality of it all unless they have been on this trip at-least once. 
Honestly, the truth of it all is a bit too overwhelming for anyone to WANT to go a second time! The images below will highlight a few stops during the trail.

This first image was taken at one of the biggest Landfills in Bangalore. Bangalore city generates more than 3500 tonnes of waste - a DAY! A large portion of this comes into this particular Landfill in giant garbage trucks.

The" Leachate" (liquid), which escapes out of the mixed waste, collects to form a huge lethal pool. The sight of it doesnt come close to the overwhelming smell of the area. 

When you move around the periphery of this pool, you can actually see the plant life wilt away. There are also many families living around this area, surrounding the landfill. 

The only good news here is that unauthorized people are not allowed to enter, so we can be sure that locals are not entering this toxic zone to get scraps of dry waste to sell and make some money. In other cities like New Delhi, you can often see many women & children walking around looking for old paper, tetrapak, wires, plastic bottles & caps etc.

The next stop is a recycling facility where old plastic bottles we all use and throw are pulverized and made into small pellets. These pellets are then melted and made into colourful plastic buckets. Plastic however, can only be recycled a few times depending on the type and quality. 
To know more on how many times plastic (and other dry waste) can be recycled  link

There are a few more stops during the Trash trail, however I will allow you all to go and see for yourself. These images do not do justice to the actual experience. Hope all of you consider going and for those who have been, do encourage others. 

The trail is conducted by Daily Dump every month , usually on the second Saturday. You can also do group bookings.

This trip can educate and inform each one of us, and we can together actively strive to be more aware and proactive about out lifestyle choices, consumption and managing our own waste. Not to go "Good" or to "Save the Planet" but for ourselves.

Look forward to hearing about your experience at the Trash Trail. 

Thursday, 12 September 2013

Back to basics - sustainability and its practice, Questions answered.

Back 2 Basics 

What is sustainability?

the intersection of finding social benefit, the practice of environmental conservation with focus on economic benefit is the definition of sustainability. The governance of the above is the practice of sustainability.

How does one govern sustainability?
By managing the influence of the 5 elements, air, earth, water, fire and ether and their assignment to tangible factors are.
  1. Fire - Managing fire means managing energy by way of controlling input and consumption;
  2. Water - Managing water is managing the water by way of controlling source, consumption and discharge;
  3. Earth - Managing earth is managing waste by way of adapting process that reduce the generation of waste all through cradle to grave;
  4. Air - Managing air is managing pollution;
  5. Ether - Managing ether is adapting a appropriate communication strategy to increase overall sustainability awareness.  
What are the various functions that gain advantage due to the use of sustainability?
  • policy for/ or corporate affairs
  • Vision is accomplished for corporate affairs/ CEO's office
  • Brand gets a new attribute for marketing
  • Social benefit is delivered for csr
  • Money saved and earned
  • Environment is conserved
What are the various consulting services within sustainability?
  • evaluation of the compliance needs and an environmental law audit.
  • Defining a sustainability strategy and vision
  • Creation of a corporate sustainability policy
  • Audit for Leed certification and other ecolabeling services
  • Energy audit, modelling and management
  • Waste audit, modelling and management
  • Carbon audit, modelling and management by way of carbon foot printing and life cycle analysis etc
  • Water audit, modelling and management
  • Stakeholder communication strategy and management, training etc

Wednesday, 11 September 2013

Beware people that practice sustainability in corporates, your masters need a fall guy.

Beware people, your masters need a fall guy. 
12th september 2013

Adani power recently got fined $40 Million for flouting environmental regulations at their Mundra thermal power plant. This did not come out of the blue from the MoEF is the rule making, governing and the fining body. They have been waving rules at Adani both as a warning from its inception. I was unfortunate to experience the wrath of this project from its inception as I was volunteering with a NGO which is located amidst the Adani and TATA plant. This NGO did not come to existence after these projects but had been there before the licenses were given out and isolated as these companies that negotiated together did not want to pay the rightful price that the NGO requested. One can make many strange inferences and these get sinister as the election year closes in. How did TATA’s plant that shares many services with Adani not get fined. Is the MoEF being partisan and sending a message to the Modi campaign?. The PMO meanwhile has ordered the MoEF to start doling out licenses that are withheld for abstract reasons like environment so that our fledgling economy will get a boost. Just in time for the elections? The Hon. Minister at the MoEF has in many interviews alluded that the primary challenge that she faces is that of lack of funds to monitor the rules and regulations that the corporates pretend to follow and pretend to implement. The argument she pushed was in the direction that the MOEF is losing the battle with PMO and her ministry will have to start the dole fest. The dole fest, just in time for the elections? Meanwhile, the Vedanta story is creating white noise like a good natured diversion and the respected DTE has increased its decibel on the story of limited governance and broke a cover story on LAVASA raising questions primarily in the corridor of continuing governance seeking to create a platform of doubt and to question. The need for election funds and corporate support cannot be understated and I am afraid all the noise we hear is meant to be misunderstood as justice when they are mere warnings meant to tame, meanwhile the sensitive and righteous share holder needs a fall guy. The bargaining chip is out Dear, Vedanta, SesaGoa, TATA, Adani, LAVASA and the many other miners and developers. Your masters are your curse and boon.

Voices of Sustainability Experts across the World

After the positive feedback of the previous post, time for a reality check.  A selection of tweets from the Sustainability experts that shows how close we are to the climate tipping point:
  • Gil Friend : Humans have used up Earth's one year's supply of resources in just 8 months. (source)
  • Sunita Narain : Lavasa Corporation is rushing to complete its township in Western Ghats. No one knows if the promoter is complying with conditions on which it was allowed to resume work. (source)
  • Gil Friend : A leaked copy of the draft Intergovernmental Panel on Climate Change's 2013 Summary for Policymakers report states----95 percent certain—that humans are behind much of the global warming seen over the last six decades + global warming is going to be irreversibility, of scale…and, of direness. (source)
  • Susan McPherson : Tourism is main source of foreign exchange, employment and cash for many. On the other hand mass tourism is unsustainable leading to adverse effects on the environment. (source)
  • Julie Urlaub : Environmental pressure and extreme weather are leading to a 20-40% rse in food prices in near future. Be ready to shell out much more for grocery bills. (source)
  • Bill Mckibben  : 341st consecutive month with global temperatures warmer than the 20th century average. There are extraordinary heat waves in Russia’s Arctic region and in eastern China. Article also states the weather disasters in July. (source)
  • Bill Mckibben :  Big Wildfire a new normal with climate change. The massive fire in California is the 7th largest fire in state history, and largest fire on record in the California Sierra Mountains. The state experienced a driest year that led to the fire. Thanks to "Climate Change". (source)
  • Julie Urlaub : The extreme weather like drought, heavy rains and heat is expected to bring more mosquitoes. Thanks to climate change, our nights and even days have become itchy. (source)

Thursday, 29 August 2013

Voices of Sustainability Experts around the world

This week we present a selection of sustainability initiatives by countries, individuals and corporates that impressed the Sustainability Experts enough that they tweeted about it.  We hope that these stories inspire many others to do the same as only collective actions can save the world from the effects of Climate Change and Global Warming.

 Bill McKibben : Germany stands number 1 in solar power generation. It expects to receive 80% of its energy from renewable resources by 2050. here  

 Simon Mainwaring : Employees at the semiconductor chip maker Intel recently devised a new process that reduced the company’s chemical waste by 900,000 gallons each year, saving $45 million annually. Another team developed a plan to reuse and optimize networking systems in offices, which cut energy costs by $22 million.here

Simon Mainwaring : Solar Panels being installed in White house.here 

Adam Werbach : 15 companies, representing 70% of global farmed production, are committing that 100% of their production will be certified by the Aquaculture Stewardship Council by 2020 .here

Adam Werbach  :   Sustainability and communications, now and soon. here   
John Friedman  : Sustainability and communications, now and soon. here

Alice Korngold : Sierra Energy, has spent the last several years testing a waste-to-energy system called the FastOx Pathfinder. The FastOx is now being prepared for delivery to Sierra Energy’s first customer: the United States Army. here

Neil Hawkins China to spend huge amounts to fight air pollution. It is twice the size of the annual defence budget. here

 Julie Urlaub : People jumping to light up the christmas tree. here

 Julie Urlaub : Arizona State University (ASU) not only teaches sustainable business but  practices it    also. here

 Julie Urlaub Recycle Force, a company that recycles electronic waste and also help people coming out o prison to transition back to the society. here

Julie Urlaub Useful tips to reduce garbage at home. here

Sunita Narain : Kerala High Court, July 25, ordered the demolition of all 59 villas in well-known chain of luxury resorts on an island in the backwater of Kerala within three months due to violation of various norms and laws. here

Reach Scale More and more offices are converting their terrace to a roof garden and a bee sanctuary. This not only has huge environmental benefits but also provide a good place for a quick break for the employees, and to entertainment clients.here

Neil Hawkins DOW gives electric car to its employees to commute within the work site. here

Wednesday, 21 August 2013

Voices of Sustainability Experts from all over the world

Welcome to a new blog series. The blog will highlight the latest trends in the tweets of the world's leading Sustainability Thinkers.  An overview of the tweets and a few links that can be explored is what you will find in this blog series.
Today we start with voices of few Sustainability thinkers in America, which are listed in the “Twitter list: 30 most influential sustainability voices in America”

Earlier the term Climate Change or Global Warming were used in a generic manner, but as the effects of Climate Change are now showing up, more and more people are tweeting about the rising temperatures.

Here are a few interesting tweets on rising temperatures and reduced /unseasonal rainfall

  • The temperature in Austria cross the 40ºC breaking the record as of 39.7° (103.4°F) in 1983.
  • Europe has seen the hottest month – this July, since 2006
  • Temperatures in Canada --- about ten degrees above normal.
  • Exceptional heat is giving birth to wildfires in northern Canada and even in Alaska.
  •  China has seen its worst heat wave in at least 140 years.
  • People in New Mexico are experiencing the effects of climate change. Almost 87% of the region is in a drought. The effects of drought are very severe.
  • Extreme heat and lack of rainfall is killing thousands of Salmon in Alaska. 
  • The early arrival of rains and the above –average temperature in Southeast Asia has created an environment suitable for mosquito breeding leading to an outbreak of Dengue fever.
                                                     Other Interesting Tweets
  • Socially aware Consumers:    Around 50% of global consumers are willing to pay more for socially responsible products, especially in the younger generation.
  • Collaborative partnerships to halt Climate ChangeAt the recent Sustainable Brands conference, one message was given time and again that individual corporate sustainability efforts aren’t enough to halt climate change. A collaborative partnership — even between competitors is the way to go.
  • Art from Debris: Pam Longobardi, a professor at Georgia State University, uses marine debris to create works of art. The Plastic-collecting artist won a prestigious award
  • Battle over pumping  water during droughts: The Ontario's Ministry of the Environment gave Nestlé a new five-year term, but added two new conditions that meant the company would have to reduce its take of water during droughts. These conditions were removed later. The environmental groups launched an appeal to force the Ministry and the food giant Nestlé to stick to the conditions. The battle over pumping water during droughts is heading to a full environmental hearing in Ontario.