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.

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.

Evil:
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.

Billion:
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.

Biblical:
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.

Some Interesting Tweets by Sustainability Experts

1. Net metering—an emerging idea to encourage people to start using renewable energy.
http://apps3.eere.energy.gov/greenpower/markets/netmetering.shtml
http://www.sunlightelectric.com/netmetering.php

This great concept does have some teething problems between renewable power generating customers and the utility companies (tweeted by Bill McKibben)
http://www.bloomberg.com/news/2013-10-07/battery-stored-solar-power-sparks-backlash-from-utilities.html

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)
http://www.sfgate.com/business/energy/article/Largest-coal-fired-plant-in-NE-to-close-by-2017-4876159.php

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)
http://www.theguardian.com/environment/2013/oct/08/campaign-against-fossil-fuel-growing

4. Sustainability Trends Are Driving Commercial Real Estate Value. (tweeted by Simon Mainwaring )
http://nreionline.com/green-real-estate-investment/8-reasons-sustainability-trends-are-driving-commercial-real-estate-valu#slide-0-field_images-94401

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 )
http://ec.europa.eu/regional_policy/projects/stories/details_new.cfm?sto=1702&lan=7&pay=AT&the=68&region=ALL&obj=ALL&per=2&defL=EN

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)
http://www.nytimes.com/2013/10/09/business/energy-environment/in-a-hot-thirsty-energy-business-water-is-prized.html?ref=energy-environment&_r=0

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)
http://www.davidsuzuki.org/blogs/science-matters/2013/10/ipcc-report-shows-action-on-climate-change-is-critical/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+davidsuzuki%2Fscience-matters+%28

8. Chevrolet, GMC and few others to come up with bi-fuel versions of vehicles in near future. (tweeted by Julie Urlaub)
http://www.environmentalleader.com/2013/10/07/green-fleet-roundup-chevy-gmc-tesla-subaru-kia-ford/

9. The Investment Carbon Screener in the Bloomberg Terminal calculates the carbon footprint of equity investments. (tweeted by Gil Friend )
http://www.southpolecarbon.com/solutions/finance_solutions/carbon_screener

10. Cities those are moving towards urban sustainability. (tweeted by Alice Korngold)
http://downtoearth.danone.com/2013/10/10/10-most-innovative-cities-in-urban-sustainability/

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 

DD-Trash Trail.

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. 

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

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)

• David Suzuki Foundation : The bee stories. Why bees are important and how food prices will rise if the bee population reduces. (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)

• David Suzuki foundation : These 20 cities have the most to lose from rising sea levels. (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)

• Bill Mckibben : Not only in South Asia, Dengue epidemic in Central America also. (source)