Business News

E. Freya Williams on the Business Case for Sustainability

What’s the business case for sustainability? Over the past eight years that I’ve spent compiling evidence that brands can both maximize profit and be a force for social good, that’s the question I’ve been asked most often. And it’s one that tends to be on the minds of business leaders each year around Earth Day. This year that question has a new answer: a billion dollars. For a generation, influenced by the thinking of economist Milton Friedman, business wisdom has held that purpose and profit are fundamentally opposing forces. But there are now at least nine companies globally that generate a billion dollars or more in annual revenue from products, services, or lines of business with sustainability or social good at their core. They are the Green Giants. Far from the hemp-wrapped products of yore, they include some of the most sexy and dynamic brands out there today, from relatively new start-ups to business lines incubated within major blue chip corporations. They are Tesla, Chipotle, Nike Flyknit, Whole Foods, Unilever, GE Ecomagination, Toyota Prius, Natura and IKEA’s line of Products for a More Sustainable Life at Home. These companies cut across the global economy. They make products as diverse as burritos and beauty cream, sports shoes and sports cars, organic kale and airplane engines. They cover a spectrum of price points and spend types, from low-cost and discretionary to big-ticket, corporate purchases. They span B2B and B2C companies. Yet they share six factors in common. These factors enable them to generate over $100 billion in combined annual revenues from their sustainable business strategies. They are:  An Iconoclastic Leader. In each case, the sustainability journey can be traced back to one individual who started it all. He or she is a resident of the C-Suite, and exhibits the 4 Cs […]

Green Giants, how smart companies turn sustainability into billion dollar businesses

E. Freya Williams Sustainability has come a long way in a decade. Once seen as a negative thing, sustainability is increasingly being recognised as a source of advantage for business. A number of companies stand out as exemplars in this field and their stories provide the backbone of this book by sustainability consultant Freya Williams. Williams is as much an insider as an observer, and the blurb here says she was the brains behind campaigns such as Coca-Cola’s PlantBottle, Hellmann’s switch to free range eggs and the award-winning Copenhagen campaign in support of the United Nationsat the COP15 climate change conference. Her skill, it seems, is in making sustainability relevant to the mainstream. Williams has drawn firm conclusions from the case studies she has examined to produce a very readable work on a subject that often receives a dull treatment. The green giants are businesses with a turnover of $1 billion or more that can be directly attributed to a product, service or line of business with sustainability at its core. They include restaurant chain Chipotle, which raises the meat in all its products in natural and sustainable ways, Unilever which is committed to halving its environmental footprint by 2020 and Tesla which makes the first commercially successful all-electric vehicle. Some businesses, meanwhile, have specific product lines that are sustainable, such as Toyota Prius or Ikea’s Sustainable Life at Home range. Old attitudes persist, however. Williams quotes conservative economist Milton Friedman dismissing businesses with a social conscience as “unadulterated socialism” in the 1970s. That view has hardened in some quarters, driven by the cynicism and short-term thinking of Wall Street. Scepticism about environmental concerns is rife in some boardrooms. In a briefing to journalists in 2008, Bob Lutz, then vice-chairman of GM, famously called global warming “a crock of shit”. […]

The Rubik’s Cube of Economics

Deciphering real world issues in economics is like solving a Rubik’s Cube, says SMU Assistant Professor Zhang Haiping. By Yamini Chinnuswamy “The job of an economist is to explain how the world economy works – from analysing economic data, conceptualising economic phenomena, forecasting economic trends to making policy suggestions,” says Assistant Professor Zhang Haiping from the Singapore Management University (SMU) School of Economics, whose work focuses on international finance and trade. Like the Rubik’s Cube, a three-dimensional combination puzzle where every twist also scrambles the face opposite of it, economics puzzles are similarly interlinked—a change in policy may lead to repercussions elsewhere. “My research is motivated by empirical puzzles in economic literature,” he says. “As economists, we seek to augment or update existing economic theories to explain real world data. The challenge lies in the fact that markets and economies seldom function in a frictionless manner.” For example, Professor Zhang notes that capital has been flowing “uphill” from the poor to the rich, and from emerging economies to developed ones since the end of 1990s. This stands in stark contrast to neoclassical economic theory which states that capital should flow from the rich to the poor, as the rate of return on investments in poor countries should be higher than in rich countries. Financial friction and the resulting borrowing constraints in poor countries can explain such a puzzling fact, he explains. Similar income levels, different patterns of capital flows Patterns of international capital flows in emerging economies are another real world puzzle Professor Zhang has studied. Although income levels per person were comparable in emerging Asia (Indonesia, Malaysia, Philippines, Thailand and Vietnam) and emerging Europe (countries such as Hungary, Poland and Romania in Central and Eastern Europe), their patterns of international capital flows were not. “We looked at the data […]

Deforestation briefing: Palmed off – Rumble in the Jungle

By April Streeter Changes, or at least assurances of changes, are coming to the palm oil industry, a mega-business blamed for much of the deforestation in tropical nations Three of the largest palm oil producers and traders unveiled zero deforestation plans last year, affecting 60% of the global palm oil industry. Wilmar International, which has a 45% market share, Cargill with 10% and Golden Agri-Resources with 5% pledged “to end deforestation in the palm oil trade, both through direct corporate policies and through their demands from the supply chain”, according to US Food News. The three announced their plans along with the Indonesian government at the UN Climate Summit held in 2014. US-based commodities trader Cargill last year also unveiled a pledge that the palm oil it produces, trades or processes will no longer come from deforested lands, carbon-rich peat lands or be linked to “exploitation of rights of indigenous peoples and local communities”, according to a company statement released in July 2014. “It is critical that all parts of the palm oil supply chain – from plantations to retailers – collaborate and act in an environmentally sustainable and socially responsible manner,” the statement notes. The company pledged to involve multiple stakeholders and engage in a constant review and improvement process. Unilever is driving beef sustainability Wilmar, though, recently was cited in a report for abuses of human and environmental rights while acquiring a large parcel of land in Cross River State, Nigeria. The report was released jointly by Friends of the Earth US and Environmental Rights Action-Nigeria. According to the report, the company failed to acquire the free, prior and informed consent of communities directly affected by its operations, did not complete satisfactory environmental and social impact assessments and did not follow through on promises of infrastructure development and […]

Exploring the link between globalisation and stress

A direct relationship exists between stress and globalisation – i.e. transnational corporations and transnational economics – according to a recent study published in the Pertanika Journal of Social Sciences & Humanities. The study, by an international research team in Thailand and Canada, analysed the relationship between globalisation and stress in a sample group of Thai farm workers. Eight years ago, the Thai government began mapping social protection strategies for various occupational groups including rural agricultural workers. Earlier studies had shown that agricultural workers accounted for the highest percentage of all workers, and that more than 30% of them were in debt. Globalisation, also defined as global capitalism, is a well-known dynamic of the twenty-first century. Its effects on health are complex and depend on a variety of factors, including income distribution and the presence (or absence) of resources to support physical and mental health. In the study, the researchers developed a survey based on the hypothesis that a number of factors – including fewer landowners, increased control of scientific management, and increased integration of local and global markets impacting the prices of agricultural goods – has resulted in stress among Thai rural workers. The survey involved 600 rural workers from different areas of Nakhon Pathom province in central Thailand. All the workers were in transition from an existing production system to a new one. Levels of perceived stress were measured using a test developed by the Department of Mental Health in Thailand. The results showed a direct relationship between transnational corporations or translational economics (an umbrella term that broadly describes the economic clout of multinational companies) and stress. The survey also reported that 75% of the respondents had poor health, with stress appearing to be their most frequent illness. The researchers noted that transnational practices, which are associated with mass […]

Cyclone Donald around for a year

It’s a good year out from the US 2016 election and good old Fox Network are at it already with their panel discussions on the potential Republican presidential candidates. Talkfest after talkfest is surrounding us with Megyn Kelly and Donald Trump not exactly getting along in the latest instalment. You have to give it to Trump – he sure knows how to win friends and influence people without outlining exactly what he do will if elected president for the unemployed, Middle East, and illegal immigrants. Somehow a firm grip needs to be kept on this presidential candidate so the issues are out there and not the personalities. If Trump doesn’t shoot himself in the foot and stays in the race he may well become a huge distraction to the real issues affecting the American people. There will be so much concentration on his hair and abrasive personality that the centre of the Republican Party will have a darn hard job keeping the focus on exactly what they are doing in an election year. Fox will ride this personality for all it is worth. Even if he blights his copy book, think of the continual high media profile which will be seen across the network? What he doesn’t do will not matter; what he stuffs up will bring a lot of attention. Rupert Murdoch and Peter Ailes may not see eye to eye on Trump and the way he appears on Fox. Or maybe they do? Maybe it doesn’t matter because it draws viewers, commentators and so called experts from other media to watch Trump, Hannity and the team dribble in their coffee how no news…is just about as good as news can be!

World Bank updating social policies

The World Bank is in the process of reviewing, updating and strengthening its environmental and social policies that serve to protect vulnerable people and the environment in World Bank investment projects. On July 1, 2015, the Committee on Development Effectiveness (CODE) of the World Bank’s Board of Executive Directors authorized a third phase of consultations on a revised (second) draft of the proposed Environmental and Social Framework and requested the preparation of an accompanying document to outline certain issues that require further attention. The text of the entire revised framework, as well as the issue summary, was made publicly available today. Consultations will begin immediately. “This revised draft is the result of a robust – in fact, an unprecedented – consultation with World Bank shareholders and stakeholders,” said Hartwig Schafer, World Bank Vice President for Operational Policy and Country Services. “The level of engagement and the caliber of feedback has been excellent, which shows in the revised draft. The proposed Environmental and Social Framework would substantially expand the scope of coverage from our current policy, and would help to ensure that project risk is managed more consistently and effectively.” The proposed framework presents a risk- and impact-based approach to protecting the environment and people, and features a strong emphasis on risk management and achieving sustainable development outcomes over the life of projects; broadened social assessment and management of environmental and social risks; greater clarity of the roles and responsibilities of the World Bank and Borrower; increased harmonization with development partners and recognized good international practices; and renewed and strengthened partnerships with borrowers. “We are well on our way to having ‘leading edge’ environmental and social standards that are clear, stronger and more comprehensive than our current safeguards, and that support our goals of ending poverty and promoting shared prosperity,” said […]

Nestlé’s crisis in India

Nestlé has handled a product safety scare stunningly badly, appearing to have learnt little from its multinational experience over many decades Nestlé has found itself in hot water in India after the local food safety regulators said the company’s instant noodles contained unsafe levels of lead and traces of monosodium glutamate (MSG), contrary to the food’s labelling. Nestlé’s handling of the situation has created a new case study on how not to handle a crisis. First, let’s look at the potential and actual severity of the crisis and the damage. Maggi, Nestlé’s instant noodles brand, has been a household name in India for 30 years. According to market estimates, Maggi contributes more than 20% of the $1.5bn annual sales Nestle has in India. Maggi accounted for 60% of India’s noodle sales last year, according to a Euromonitor report. Maggi ranked among the top five most trusted brands last year in a survey-based ranking issued by India’s leading business newspaper the Economic Times. Nestle introduced instant noodles to India, where noodles were not previously part of the culinary culture and instant food was not common. An aggressive advertising campaign with a catchline of “two-minute noodles” proved so effective that Maggi became the breakfast of choice for parents struggling to get their children ready for school in the morning. The advertised idea of a delicious and nutritional meal that could be cooked in just two minutes appealed to millions. Maggi became a preferred snack for children, singletons and working couples. In more recent years, hundreds of thousands of Maggi stalls have opened across the country making it a popular street food. First signs of trouble ignored The first sign of trouble emerged on 30 April this year when the local food safety regulator in Lucknow, the capital of the most populous state […]

Commuter families: Analysis from Malaysia

Commuter families normally consist of dual-career marriages that choose to establish separate homes to fulfill their career commitments. Around the world, the numbers of dual-income, dual-household families is on the rise, fuelled by such reasons as the desire of spouses to improve their lifestyle, obtain a higher family income, or pursue better opportunities for career advancement. However, in Malaysia, the most common reason (44.4%) that married couples adopt a “commuter family” lifestyle is that they are required to by their employers, according to a recent study published in the Pertanika Journal of Social Sciences and Humanities. Conducted by researchers at the Universiti Putra Malaysia, this study is the first in Malaysia to investigate the challenges faced by long-distance commuters and their families. The study involved families based in Klang Valley that had one spouse working outside this region. Commuter families normally consist of dual-career marriages that choose to establish separate homes to fulfil their career commitments. However, life for these families can be challenging and difficult to manage due to such factors as the time spent travelling back and forth every week, increased expenditures and financial cost, as well as changes in the relationship dynamics with spouses, family and friends. According to the study, among commuter families, more men than women (60.2% versus 39.8%) work away from home in Malaysia. However, no gender differences were observed in terms of how commuting impacts personal wellbeing. Overall, the study found that most respondents have a negative perception of their commuting lifestyle (80.6% of males versus 96.5% of females). “This may be because the majority of these commuters not only did not choose to work away from home and their families, but also they did not receive any financial incentive or stipend to cover commuting expenses such as accommodation, transport or food while […]

Greenpeace at war in India

By Rajesh Chhabara – Ethical Corp The Indian government, under the new leadership of Narendi Modi, has taken a harsh line against Greenpeace’s opposition to several development projects – blocking funds and preventing individuals from travelling. Environmental campaign group Greenpeace has run into serious trouble in India. The government has barred Greenpeace India from receiving foreign funding and has frozen all its bank accounts. As a result, Greenpeace India has no access to funding, including any new local or foreign funding. The government’s tough stand against Greenpeace is based on a report submitted by the Intelligence Bureau to the prime minister’s office last June when the new federal government was taking charge. The report, leaked to media, calls Greenpeace a “threat to India’s economic and national security”. The report says a number of large development projects have been cancelled, disrupted or delayed because of Greenpeace campaigns against coal mining, coal fired power plants, genetically modified organisms (GMOs), hydro power projects, tea farming practices and several large industrial projects. The intelligence report has named London-based Vedanta’s bauxite project, South Korean company Posco’s steel plant in Odisha state and hydro power projects in Arunachal Pradesh state bordering China as examples of affected projects. The intelligence agency estimates that disruptions to large projects have cut India’s gross domestic product growth by 2-3% a year. Greenpeace has different ideas for India The intelligence agency has noted that Greenpeace and other NGOs are using funds from donors in the US, the UK, Germany and the Netherlands to mobilise protests against development projects in India. The agency alleged that Greenpeace has flouted laws relating to receiving and accounting for foreign funding. It has raised questions about the intentions of a number of expat Greenpeace officials, consultants and journalists who were brought to India for various campaigns […]

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