Plain text version:

When businesses address their workplace carbon emissions they often look at expensive projects, such as replacement heating and air conditioning systems or improving insulation.

What is often overlooked is the company’s day to day occupancy of the building and how efficiently they’re using the space, which is what drives their eventual use of the HVAC systems.

Low Carbon Workplace (LCW), part of the Carbon Trust and the UK’s only carbon based landlord, has developed a unique method to create a Whole Building Carbon Regime. A recent report – cutting workplace carbon, not competitiveness – outlines measures for the carbon regime.

Create a carbon league table across all premises

Collate information about company premises . This should include the properties’ Display Energy Certificates (DECs), the buildings’ orientation and their occupancy. Balance these against the notional carbon emissions derived from energy consumption; for example, a building with high occupancy may be more efficient, or a south facing building may need less heating.

Examine space utilisation from a carbon-only perspective

Conduct a space utilisation study from a carbon point of view, ensuring a member of staff walks each office floor every 30 minutes for a couple of weeks. The study will give very different results in terms of space efficiency than those based on financial needs, including how meeting rooms are used and which teams are co-located.

It’s vital to keep these studies based wholly on carbon emissions without taking HR or operations into account.

Link carbon to personal energy consumption

Many offices use a third of their peak energy use overnight when there are only a handful of employees on site. A LCW study has found that employees have on average 10 electrical items plugged in, including PCs, fans and mobile phone chargers. Significant carbon emission reductions can often be made through simply asking employee to turn off or unplug the items they use every day before leaving.

Co-ordinating improvements by MACC priority

In order to understand which measures will bring the best results, use a marginal abatement cost curve (MACC). This is a complicated calculation which plots the capital cost per year per kilogram of CO2 saved alongside the number of years over which a measure will pay for itself financially.

It’s important to perform MACC studies based on premises, as both occupancy and location can change the priorities.

But MACC considerations should not be seen as an overriding technical solution. A new lift could take decades to pay off under MACC criteria, but the effect a new lift could have on morale is a different matter.

Use enhanced benchmarks alongside DECs

DECs calculate a building’s emissions per square foot and then rate that building against others of a similar type. This means offices with a low occupancy could have a higher DEC rating simply because they use less energy even though that usage may be wasteful.

A number of benchmarks are being developed to address these issues, including LCW’s low carbon workplace standard which measures CO2 emissions per person per year. Employ enhanced benchmarks to give a more rounded view of office carbon emissions.

Embed communication within carbon management schemes

It is vital that full stakeholder engagement is employed as part of a carbon management scheme, including landlords.

Establish a governance structure with landlords and other external suppliers: sign a memorandum of understanding and agree KPIs for both parties to work towards.

However keeping momentum is equally important to ensure all stakeholders are kept fully informed and involved in the progress on a regular basis.

John Alker, director of policy at the UK Green Building Council said “[Carbon emissions are] as much about how a building is managed and occupied as it is about technical solutions, because energy savings of 5 to 30% can be made through simple no and low cost changes.

“But to find these savings we need much better information about energy use in the first place, we need a common methodology for measuring it and we need partnership between landlords and tenants.”

A startling new report from the UK has demonstrated the impact food waste can have upon a country’s carbon emissions and water footprint.

The report, published by WWF-UK and the UK government’s Waste and Resources Action Programme (WRAP), says that potentially avoidable food waste represents up to 64 gallons of water per person per day and 727.5 pounds of CO₂ per person per year.

This means that around 6 percent of the UK’s water footprint and 3 percent of its carbon emissions come from food waste. That’s roughly equal to adding 25 percent more cars on the road!

The amount of food we waste is shameful. It’s among the most unsustainable aspects of our high-consumption lifestyle. Curbing it will have a significant impact in improving our overall environmental impact.

How do these figures stack up against the rest of the world?  To answer that question I’ve looked at the US and China.

There are no directly comparable figures, mainly because the UK study is the first of its kind in the world.  However we can extrapolate some figures using published food and waste figures and water footprint and carbon emissions datasets.

United States

A commonly quoted figure is that 40 percent of US food is wasted.  That, by anyone’s measure, is a staggering amount.

The EPA has published a comprehensive set of figures for 2009 showing the CO₂ emissions of each sector, including embedded energy use. These show that 206 million tons of CO₂ come directly from agriculture, plus an additional 53 million tons from food waste in landfill (which is 20 percent of the total). Food waste in the US therefore produces a total of 260 million tonnes of CO₂ emissions ‑ 4.4 percent of the country’s overall carbon footprint.  This is equivalent 2,044 pounds of CO₂ per person per year, or a 41 percent increase in the number of cars on the road.

Only 58 percent of the US’ 696 billion cubic meters/year water footprint comes from agriculture, a relatively low proportion compared to other countries.  However because the rate of food waste is so high, 163 billion cubic meters of water, or 23 percent of the country’s total usage, is consumed unnecessarily every year. In terms of per person use, that amounts to a whopping 420 gallons per person per day.

China

According to figures published by the Laboratory of Organic Geochemistry (PDF), in 2009 around 62 million tons of food waste went to landfill in China.  Further figures from the National Bureau of Statistics (PDF) indicate total food consumption in 2004 was 905 million tons. Which means China wastes about 7 percent of the total food it produces.

A report prepared for the US Congress (PDF) in 2008 estimates that 14 percent of China’s overall carbon emissions come from agriculture. Combining these figures means that only 66 million tonnes CO₂, or 1 percent of its overall emissions is generated each year from China’s food waste.  However, this does not include energy emissions from agriculture or from food waste in landfill, which is a comparatively lower 115 pounds of CO₂ emissions per person per year. Agriculture accounts for over 85 percent of China’s 883 billion cubic meters/year water use, but because the rate of food waste is much lower than the US the amount of water wasted is also low: only 54 billion cubic meters of water, or 6 percent of the total. In human usage terms, that’s about 30 gallons per person per day.

I must emphasise these calculations are my own and don’t have any of the subtleties a proper scientific study will contain. In addition, the UK report differentiates between avoidable and unavoidable food waste but only total food waste figures are available for the US and China.

That said, it’s obvious that food waste has a significant impact upon a country’s carbon emissions and water footprint.  By taking greater care with the food we produce and consume, our environmental impact would be lessened much more than many of the industrial and energy solutions currently being proposed.

Plain Text version:

A revolutionary new initiative in African farming was launched earlier this year as part of the annual International Fair of Animal Resources (FIARA) in Dakar, Senegal. It draws together twelve rural women’s networks from across the west African countries of Senegal, Mali, Guinea, Burkina Faso and Ghana into a campaign entitled ‘Nous Sommes La Solution! Célébrons l’agriculture familiale’ – ‘We Are The Solution! A celebration of family farming.’

The campaign’s aims include gathering together the best in African farming knowledge and technology, acting as a bulwark against the needless industrialisation of the continent’s agriculture and facilitating the empowerment of women within rural communities.

It will run for three years during which it will focus on building capacity at grass roots level in both traditional agricultural knowledge and the ability of women to shoulder the responsibilities they’ve had to in recent years as effective leaders.

The need for a women-led agricultural campaign in Africa was first discussed during 2007 and plans for a west African organisation were formally laid out during a 2009 meeting of the Network of West African Peasant Producers (ROPPA).

Networks similar to ROPPA have been springing up across Africa recently, creating what Tanya Kerssen, Research Fellow at Food First/Institute for Food and Development Policy and a major international supporter of We Are The Solution!, describes as ‘a broad constellation of political alliances that form the growing African food sovereignty movement.’

New activism

‘What is astonishing,’ she says ‘Is the great convergence of these movements that has occurred over the past few years.’ We Are The Solution! is part of this convergence of small community based networks into larger campaigns, bringing a new activism to what was previously a higher level campaign.

However, despite this recent gathering of pace, the problems the movement seeks to solve date back nearly half a century. During the 1960s and 1970s the face of farming around the world was changed by a Green Revolution through which intensive farming, pesticides and fertilisers were introduced to countries in South America and Asia.

In the meantime, many African countries were encouraged to take out loans from the World Bank in order to modernise their agricultural economies and participate in the global commodity market.  This modernisation saw the diversity of traditional farming methods replaced with monoculture cropping and countries’ markets opened up to foreign food imports.

Danielle Nierenberg, co-director of the Worldwatch Institute’s Nourishing The Planet project, believes this approach was always going to be unsuccessful.

‘World Bank projects set up people to fail by focussing on cash crops and commodities rather than traditional crops,’ she says, explaining that small African farmers could never have competed on price with the heavily subsidised agro-industrial complexes elsewhere in the world.

The market liberalisation also meant traditional foods were undercut in price by cheap imports.  So, when communities’ crops failed to sell because they were too expensive, they were left with no food to eat and no income to buy food.

International aid agencies stepped in but food sovereignty, the ability of a community to be in control of its own food and nutrition, had been lost.  Rural communities became locked into a cycle of poverty compounded by climate change, unable to farm for a living and dependent on aid to survive.

Population growth

However, the fact that Africa faces by far the largest population growth in the next 50 years has now led to a desire to reverse the chronic underinvestment in agriculture caused by market liberalisation. This will help to provide food security for the continent and therefore the world.

We Are The Solution! has the specific aim of re-establishing Africa’s food sovereignty through the traditional agricultural species and techniques which have been sidelined for decades.

When it was launched in February, the campaign published a statement of intent, known as The Dakar Declaration, which outlines the initiative’s aims and ambitions.

Chief among these is the rejection of the Alliance for a Green Revolution in Africa (AGRA) in favour of an agroecological model of farming.

AGRA is global initiative funded by the Gates and Rockefeller foundations which has become one of the main players in this new push to develop African farmland. It takes its name from the Green Revolution of the 1960s and 1970s. However, while the original Green Revolution certainly increased production there is deep concern about whether it is the model Africa should be following.

‘The Green Revolution was never meant to be a long term solution,’ says Danielle Nierenberg. ‘It definitely saved a lot of lives but the over use of pesticides has led to millions of deaths and the contamination of groundwater.’

Tanya Kerssen agrees: ‘Farmers’ organisations are very concerned about the long-term negative effects,’ she says, giving ecological degradation, contamination or loss of local seeds, farmer indebtedness and the concentration of land and resources into fewer hands as examples.

Rejecting GM

In addition, a new technology has since emerged which is also being championed by AGRA: genetically modified (GM) seed.

Like fertilisers in the original Green Revolution, GM seed is being hailed as a ’silver bullet’ which will cure all Africa’s agricultural problems.  Many believe it was the over reliance on such cure-all technologies which led to the destruction of ecosystems and rural communities seen today. This is why The Dakar Declaration ends with the ringing cry ‘No to GMOs, No to the patenting of life. No to agribusiness!’

However, We Are The Solution! is not a technology or investment free zone.  The difference between AGRA and the agroecology The Dakar Declaration embraces is not what you use to improve farming, but how it’s used.

Agroecology is a science driven blend of agronomy and ecology.  Its foundation is the understanding that farmers gain specific knowledge through the generations about how to use their local ecosystems improve soil quality and combat pests.

It is this knowledge which is then used to drive technology and investment, in contrast to AGRA where the technology is used to drive farming practices.

An example Danielle Nierenberg cites is the ability of communities to store grain from one harvest as seed for the next crop. Some communities have perfectly adequate methods of seed storage, while in others they are prone to attack from mould and fungi.

One solution would be for the farmers to buy GM seed every year which had been made resistant to these mould and fungi. However, an alternative would be to invest in modern seed storage facilities within which the grain could be protected.

New business

Danielle Nierenberg goes on to point out how this would have a profound impact upon local economies. ‘Investing in these kinds of things brings better resilience both in agriculture and economics’ she says. ‘It creates new businesses, such as selling and storing seeds, and leads to a professionalisation of the agricultural community.’

Many of these arguments are highlighted in a recent report by Olivier de Schutter, the United Nations’ Special Rapporteur on the Right to Food.  In Agroecology and the Right to Food he argues that agroecology is the solution for Africa because it fulfils all three key objectives for food production:

–    Meeting escalating needs: while both industrial agriculture and agroecology can be scaled up to produce more, cutting down on waste and redirecting food crops away from livestock feed and biofuels are likely to have a bigger impact;
–    Increasing the benefits to smallholders first: agriculture is twice as effective at reducing poverty as any other industry, but only where local farmers are able to purchase from local suppliers;
–    Preserving the ability to produce food from the same land in the future: avoiding, for example, the destruction of biodiversity, the pollution of soil and water sources, and the destabilising of markets.

The report concludes by recommending that countries should support decentralised organisations which are focussed upon the exchange of sustainable practices.

This is precisely what We Are The Solution! has been set up to do. The Dakar Declaration isn’t just about protecting and enhancing the diversity of African farming practices. It also strongly emphasises the need to nurture and encourage the growing empowerment of women in rural Africa.

Empowering women

Rural communities in Africa have been traditionally male dominated and women have often struggled to have their voice heard. This is now changing, sadly through the devastation AIDS has wrought and the way poverty is driving many men from their villages to seek work in the cities.

‘Women are forced to take on more responsibilities,’ explains Tanya Kerssen, ‘While wielding little control over the land, resources and the products of their labour. So women do a lot with very little to feed their families and communities, and as such their empowerment is paramount to advancing African food sovereignty.’

Between 70 and 80 per cent of food produced in rural Africa is produced by women. We Are The Solution! seeks to bring networks of these women together, not only to share agricultural knowledge but also to share advice on gaining resources, influencing communities and becoming effective leaders.

‘We Are The Solution! is a political call to action to engage in the structural transformation of local, national and global food systems,’ says Tanya Kerssen. ‘There is a spirit of discontent across the continent about African governments that are unaccountable to their people and beholden to foreign interests,’ she continues. ‘In sub Saharan Africa there have been numerous large-scale protests that threatened the political legitimacy of governments .. these rebellions were cast as “food riots,” but in fact they indicate a much deeper dissatisfaction that is being expressed in various democratisation movements, of which food sovereignty is very much a part.’

So We Are The Solution! is more than a straightforward anti-agro-industrialisation campaign. It is all about Africans taking back their sovereignty as well as their food from western politicians and investors. And should it take hold, who knows how the next chapter of African history will unfold?

Plain text version:

One of the biggest problems for businesses looking to increase their energy efficiency is the large, upfront spend initiatives can require. Typically, these focus on projects such as large-scale building refurbishments or replacing equipment across the board.

A new report from the sustainability consultancy Verisae, entitled Ten Ways to Slash Energy Cost & Reduce Budget Uncertainty, has highlighted several techniques companies can implement without making a large capital commitment.

Although the report is focused upon the retail sector and North American grocery stores in particular, its discussion of low-cost solutions is useful for any business with one or more moderately sized premises.

The report also contains ten key strategies a company can use to improve its energy efficiency in day to day operations. These cover the following areas:

Metering and monitoring

Many companies rely upon having a single meter for each of their premises. This can be too blunt an instrument with which to measure energy consumption, and these meters don’t give any insight into what energy is being consumed when and by what.

To gain this understanding, businesses ought to consider installing submeters in their premises. These will help identify the relative consumption of different aspects of the business, for example, by lighting, kitchen use or IT.

Businesses can also benefit from installing real-time energy monitoring. This will help the company discover spikes in usage which may not otherwise be identified.

Peak consumption planning

Energy consumption can vary dramatically at different times of the day and different times of the year. For example, heating usage will vary throughout the year, while kitchen-energy consumption will peak in the middle of each day.

As smart metering and real-time energy buying is introduced, identifying these peaks and implementing strategies to overcome them will become a key part of a business’s strategy. Such strategies can include changing business processes or storing cheap electricity onsite, both of which will improve a company’s overall energy efficiency.

Facilities maintenance

A lot of facilities energy saving initiatives revolve around the installation of efficient heating, ventilation, air conditioning and lighting systems. While these can deliver good long-term savings, it is just as important to keep on top of the maintenance of existing systems to ensure they are running as efficiently as possible.

It is, therefore, especially important for businesses to monitor these systems’ consumption and identify when usage starts to climb. This can indicate whether a service has increased energy efficiency or can point to fundamental problems.

Consumption analysis

As well as focusing upon the energy consumed by different parts of the business at different times, it is also important to take a long-term view and establish a mechanism for comparing energy consumption data every day, week, month and year. This will help to identify long-term trends and indicate equipment or business processes which are either failing to meet – or outperforming – their expected energy efficiency.
Benchmarks and best practice

A final way multi-site companies can produce energy efficiencies is through introducing a companywide system of benchmarks. Often similar equipment or business processes in different locations can perform with different energy efficiency, depending upon a variety of factors. Once benchmarks have been established, further analysis can be used to produce identify variations and produce companywide standards and best practices.

“It is clear that companies should take a holistic view of their energy strategy,” said Hugh Jones, managing director of Carbon Trust Advisory Services. “Capital investment can deliver a positive return on investment, but there are numerous energy efficiency options for organisations to consider which do not require significant capital outlay up-front.

“For example, Sainsbury’s appointed an energy champion in each of its stores to encourage best practice amongst other staff, promote good facilities management and highlight how the store is doing in comparison with other outlets. This simple measure helped bring about a 5% saving on energy consumption across the group.”

In 2011 companies’ supply chains will gain greater importance, irrespective of the size of businesses involved.

The primary driver of this trend is taking recognised measurements for water consumption, waste and greenhouse gas emissions and applying them to a company’s supply chain.

But many businesses are finding this tricky for their overseas suppliers as the practical implementation of responsibility can vary from country to country.

Shirahime, a UK based ethical fashion consultancy, has published a guide to responsibly sourcing textiles and clothes from India.

Despite its narrow country and industry focus, the guide is packed with advice for any business looking to find responsible goods or services suppliers from overseas.

Key points

Be clear about the outcomes you want to achieve

Define aims clearly and build a strategy around the outcomes you want to achieve. Don’t try to do everything all at once: focus on what is important now.

Don’t look exclusively for suppliers who have certification. Certification is a costly process and may not guarantee the specific outcomes youwant.

Instead, visit potential suppliers and examine their operations for yourself. If you do this, make sure you have a suitable translator and cultural liaison who can guide your decision making process.

In addition, start networking, even if it’s with your competitors. If you do this up front it can vastly increase your chances of success in finding the right supplier.

Consider company size alongside business practices

There can be a correlation between a supplier’s size, the goods or services it provides, and its ability to operate responsibly.

As a broad rule of thumb, the larger the company the more comprehensive their offering will be. Yet the larger the company, the more likely it is that their business is focussed upon financial efficiency, not responsible practice.

Therefore, if you’re looking for a responsible supplier it may be worth choosing smaller producers rather than bulk providers as your partners.

To make this affordable, you should collaborate with other companies, including competitors. Effective purchasing partnerships can influence medium sized enterprises significantly, leading to a greater overall focus on sustainability.

Consider alternatives to your preferred goods, service or country

India is the largest organic cotton producer in the world. However it also produces other sustainable natural fibres and is the eighth largest wool producer in the world. Few people would think of India as a source of wool and if your intention was to buy textiles from India you wouldn’t immediately think of wool, would you?

In order to get the most responsible procurement deal, businesses have to change their mindset and be open minded about both the country of origin and the goods or service they’re looking to procure.

Be prepared to invest as well as purchase

This final point is possibly the most important in Shirahime’s report: the days of simply handing over the money to supplier are fading fast.

Instead, businesses need to think about how they can contribute long term value to their suppliers’ enterprise beyond a simple commercial deal.

This is where the value of being clear in your outcomes and partnering with other companies can yield substantial benefits.

For example, your business wants to reduce carbon emissions and you and your partners have found a suitable company. However, you know this company’s health and safety record is not desirable … what can you do to improve it?

As part of the commercial relationship with your supplier, you can offer health and safety training and leverage resources across the partner companies as appropriate.

This is not about financial gain. It’s about investing long term in the sustainability of both the supplier and purchasing companies: sharing skills and knowledge on a commercial basis for the benefit of all.

Richard Perkins, WWF’s senior commodities adviser, agrees with Shirahime’s approach. “You must be clear about the risks arising from your impacts and dependencies, that you’re trying to mitigate,” he says.

“It’s all about drawing up your own analysis and then speaking to stakeholders to place risk mitigation and identification of opportunities alongside other purchasing criteria.”

A huge argument over the future of forestry in the UK came to a dramatic end last week when the Prime Minister, David Cameron, publically backed down and admitted he was unhappy with his government’s policy.

But what was the fuss about in the first place and why was a government with a clear parliamentary majority forced into such a humiliating retreat?

The UK has embarked upon a round of severe public service cuts to try and reduce the country’s debts as quickly as possible. The government did its sums and discovered it could make up to $8 billion from selling publically owned forests.

These represent 44 percent of the forests to which the public has free access in England (Scotland and Wales are not involved).

In addition, and unlike many privately owned monoculture forests, they are managed in a sustainable manner where timber production sits alongside long term biodiversity planning and the preservation of ancient woodlands.

Furthermore, not all of the land is given over to forestry. Over 15 percent is open land, including heaths, bogs and grasslands.

This makes the publically owned forests invaluable, interlocking pockets of habitat, tucked into the landscape and forming an unparalleled network through which biodiversity can move and thrive.

England has the greatest population density in Europe and in the US only the State of New Jersey is more densely populated. This places exceptional pressure upon land use and the preservation of natural habitats often comes off second best.

The government’s plans included allowing ministers to sell the public forests without further consultation. There were promises to protect habitats and public access, but as the forests were to be sold as commercial ventures few believed this protection would be robust or long lasting.

So, quite simply, the people rebelled. It wasn’t as spectacular as Egypt, nor was it what David Cameron meant when he called for greater social engagement in the running of public services.

But it was effective and shows that the English understand some things are more important than just turning a quick profit.

Publically owned forests are still seriously threatened by simplified planning rules and the continuing deep cuts in public services. However the UK government now knows it will need to tread more carefully in the future.

Plain Text Version:

In November 2009, in a small room at the United Nations in New York, a group of the world’s most powerful financiers gathered to discuss something close to their hearts: stock markets.

However rather than talking about capital driven considerations, such as cash flows and profit maximisation, their focus was on promoting environmental and social considerations as criteria for sound investments.

This is because the meeting was hosted by the United Nations Principles of Responsible Investment (PRI) and most of the meeting’s attendees were signatories to the scheme. Its focus was how signatories could fulfil the third of PRI’s six principles: to seek environmental, social and governance (ESG) disclosure from the companies in which they invest. ESG is the twin of the more widely known Corporate Social Responsibility (CSR). While CSR is the disclosure of information by a company, ESG is the criteria against which investment decisions should be made. The two do not correlate exactly, but they certainly work hand in hand.

Many investors in the Socially Responsible Investment (SRI) community had previously thought CSR disclosure would happen through government regulation, but the meeting believed it had found an alternative: Sustainable Stock Exchanges, where the production of CSR data is part of the exchange’s listing rules, the hurdles a company has to jump over in order to be publically traded.

In September 2010 the group met again, this time in China. A survey of the world’s top 30 stock exchanges was presented, which showed that while only 21 per cent of respondents supported changing their listing rules, over 75 per cent accepted they had some responsibility towards society and the environment. The meeting ended with the initiative’s leader saying it would write to stock exchanges around the world ‘to demand that sustainability reporting becomes embedded within listing rules and that listed companies put a forward looking sustainability strategy to vote at their AGM.’

This leader isn’t one of the more recognisable ethical investment companies such as Triodos Bank and the Co-operative Group, who are nevertheless part of the initiative.
It’s Aviva Investors, part of the world’s fifth largest investment company and the largest UK-owned institutional investor. Why is this giant leading attempts to reform the global financial system of which it is such a vital part?

Failure of voluntary approach

Steve Waygood is Head of Sustainability and Investor Research at Aviva Investors and the man writing the letter to the leading stock exchanges. ‘[Aviva] recognises that sustainability is important and should be integrated into portfolio management,’ he explains, ‘The question is how to do this in practice?’ He lists three possible options: expecting companies to adopt CSR criteria voluntarily, changing company law or changing stock exchange listing rules. ‘Voluntarism isn’t working,’ he says, citing Aviva Investor’s experience when they wrote to 10,000 of the world’s listed companies to ask them to sign up to the United Nations Global Compact (UNGC), one of the less stringent CSR frameworks.

Only 150 of the 10,000 were prepared to take the step voluntarily, and only 10 per cent of the companies signed up to the UNGC are of interest to institutional investors, the rest being either state or privately owned. Of the other two options, he believes company law is reviewed too infrequently to be useful in the current environment, leaving changing stock exchange listing rules as the only viable solution for institutional investors. ‘Aviva Investors would prefer stock exchanges to change their listing rules to include a sustainability strategy from companies to be put forwards at AGMs,’ he says, likening the proposed situation to directors’ remuneration reports.

These have to be prepared every year and submitted for approval at the AGM. The vote is only advisory, but it is taken as a severe criticism of a company’s management it the board cannot get shareholders to agree with its overall strategy, as activist shareholders have shown in recent years. Forcing a vote on sustainability at AGMs will stimulate more discussion of sustainability within the boardroom than simply changing company law to make CSR reports mandatory.

Steve Waygood is realistic enough to recognise that this engagement on big markets is not enough to solve all the sustainability issues in the financial world. One reason may be that it excludes social enterprises.

The problems of social enterprises

Social enterprises are companies whose primary aim is to create a positive change in society. As businesses they need to make a profit but they are willing to sacrifice maximised profit in order to ensure the effect on the ground is as far reaching as possible. These businesses traditionally hit a glass ceiling and become disenfranchised from the investment world, according to Pradeep Jethi, a driving force behind the Social Stock Exchange project.

They receive good capital investment when they first launch, he says, because they are in a rapid growth phase and this fits with traditional investors’ aim of creating a large profit within a short space of time. However in later years investors are not so keen on the slower growth rates and the businesses themselves shy away from traditional investors who may ask them to compromise their core mission in order to maximise profits.

The Social Stock Exchange could change this by providing a market exclusively designed for impact investors to look directly at the opportunities provided by social enterprises. ‘What differentiates us is that our companies put social justice first,’ says Pradeep Jethi, explaining that there would be no need for mandatory CSR listing rules because only socially aware companies would be allowed onto the exchange in the first place. That differentiation could attract big money. Impact investment is a fast growing section of the finance sector and includes names such as JP Morgan whose impact investment fund is currently worth over $41bn.

Pradeep Jethi admits it will be difficult to keep the speculators out of the Social Stock Exchange simply because it’s up to the companies where they accept investment from, not the exchange. ‘When a company first IPOs (lists on the exchange) we will advise them to go to impact investors,’ he says, ‘And one of the things we would like to do is to ask that the share register should be published once or twice a year.’

The hope is that this additional scrutiny will keep away the gambling class of speculators who don’t like the wider world to know which companies they’re betting on.

Human rights a low priority

However reforming stock exchanges can never be a complete solution according to Scott McAusland, Advocacy and Communications Officer for the International Rehabilitation Council for Torture Victims. ‘Targets mean investors are committing on these issues,’ he says, ‘But investors will never be as good as NGOs at holding businesses to account for human rights abuses’. His issue is that human rights is still seen as a very poor cousin of environment issues and has far less emphasis placed upon it by reporting frameworks, companies and investors alike. This is because human rights abuses usually only come to light after a certain length of time has passed. Even where a link to a company is proved access to legal redress for the victim can be impossible without an independent organisation prepared to take action.

Investors are unlikely to be able to take on this role because they’re naturally more concerned with a company’s mitigation and preventative measures than ensuring the victim is receives proper remedy. ‘The thinking simply isn’t as well developed,’ he says citing the recent example of the Global Reporting Initiative (GRI), another CSR framework, deciding not to update its human rights indicators because the area is just too complicated.

In order to become sustainable, national and global financial systems will therefore need to take account of many factors and just one solution is unlikely to be able to embrace all the changes required. This is neatly summed up by Harry Morrison, General Manager of The Carbon Trust, who points to the difference between reporting upon a company’s operations and taking steps to change them for the better.

He suggests that investors may wish to use carbon as an example of how other impacts should be handled. In particular, he points to how the Carbon Trust has not just engaged with businesses in measuring their carbon footprint but also actively helped them to set targets to reduce it. However even here it appears that there is a mismatch between business expectations and their actions on the ground.  For example, a recent Carbon Trust survey found that three quarters of UK companies expect carbon reporting to become mandatory, yet almost the same number admit they don’t measure their carbon footprint.

Even more tellingly, the survey shows that less than half of the companies cited investor pressure as a reason to cut their carbon emissions, while over three quarters cited consumer expectations.

There is no doubt that sustainability has gained momentum within the financial sector. The volume of UK funds placed under SRI has increased by 19 per cent in the last two years and many markets are reporting that the value of SRI funds is growing faster than the market as a whole. The danger is that once this rapid expansion of SRI and impact investing has tailed off the money will move to the next high growth area.

To stop this happening investors and governments need to have well informed consumers telling them what to do and activist NGOs prepared to keep the pressure up and hold businesses to account. In other words, all stakeholders need to participate together in making CSR and ESG become everyday business and investment practice. Only this will ensure finance moves to a truly sustainable model.

Plain text version:

Oil permeates our world. From the gas in our cars to the plastic on our keyboards it dominates our behavior, whether we embrace it or not The concern about oil was once greenhouse gas emissions, but the BP disaster has highlighted how the simple act of extraction is fraught with danger. Crude World, by Peter Maas, looks at all that surrounds extraction, in chapters named after the basest of human instincts, such as Fear, Greed, Plunder, and Desire.

Take Equatorial Guinea, for example. Ruled by a man described as “the worst dictator in Africa,” the country receives hundreds of millions of dollars each year in oil revenues. Maas describes in vivid detail how those funds are spent, from a Boeing 737 with gold-plated bath taps to the suitcases stuffed with American dollars which were regularly transferred from the embassy in DC to the dictator’s bank.

Then there’s the Niger Delta, where the military is fed, clothed, and housed by the oil companies to wage a campaign against the rebels, who are fighting against pollution and corruption in the Delta. But the rebels themselves are financed by stolen oil, which can only be exported by bribing the military they’re fighting against.

Maas walks through various oil-producing countries, relaying firsthand accounts of meetings with officials and locals, and describing how oil clogs the water and chokes the air wherever money can buy a company out of its safety obligations. And this is not just a tale of Third World countries left impoverished and polluted by the First World’s insatiable thirst. Maas notes without irony how two of the last three US national security advisors were directors of Chevron immediately before appointment. He then gives his own on-the-ground account of Iraq immediately after the 2003 invasion, concluding that, “the fighting may not stop until the wells run dry.”

In his closing chapter, Maas examines how Venezuela has used state-owned oil to finance admirable social reforms. The trouble is that once the revenues dip, the reforms become unaffordable and poverty beckons once more. The book concludes with an image of Maas standing among wind turbines in the Mojave Desert, and leaves readers with the following thought: “We cannot undo geology but we can make these minerals less valuable.” He gives no solution as to how this should be done, but the book is a brilliant and engaging exposition of why.

Imagine this: a Nazi war criminal establishes a secretive organisation embedded within the United Nations through which shadowy corporate interests force countries to remove the nutritional value from food, allowing food companies to profit from spreading malnutrition.

It sounds like fantasy but this is the essence of the accusations that have been levelled at the Codex Alimentarius over the years.  This body, whose Latin name means “Food Rules” is indeed run by the United Nations, but beyond that most of the lurid accusations can be rejected out of hand.

However there are countless organisations and agencies which run under the aegis of the United Nations; what makes this one so special that wild myths and theories circulate so abundantly about its true purpose?

Origins

The Codex Alimentarius was established in 1962 as a joint venture between the United Nations Food and Agriculture Organisation and the World Health Organisation. Its aim is to establish internationally agreed food standards in order to protect consumers’ health and facilitate the international food trade.

All but a handful of countries in the world are members, who meet in committees to agree on rules and standards.  These standards are adopted by consensus, meaning every country has an opportunity to disagree and block adoption. NGOs are allowed to speak at meetings, but they have no direct influence upon the outcomes.

The standards the Coded Alimentarius produces are purely voluntary in nature and members may adopt them for internal or international use as they see fit.

At present a system of over 300 standards, recommendations and guidelines are in place, covering everything from frozen peas to the maximum level of residual animal hormones in meat. For example, the standard on rice details the different sizes of rice that can be considered to be long- or short- grain as well as how much grit is acceptable within a bag of rice and what level of residual pesticide can safely remain upon the grain when sold.

Not so voluntary

But what appears to be voluntary is not quite so simple. In 1994 the World Trade Organisation (WTO) was established as the inheritor to the General Agreement on Tariffs and Trade (GATT).  One of the significant differences between the two is that the WTO curtails a country’s ability to formulate its own food import requirements. The WTO’s Sanitary and Phytosanitary Standards (SPS) Agreement states that: ‘members shall ensure that their sanitary or phytosanitary measures … [take] into account risk assessment techniques developed by the relevant international organizations’.

The agreement goes on to define the relevant international organisation for food standards to be the Codex Alimentarius. In a stroke this changes it from a voluntary set of standards to a benchmark against which a country’s openness to free trade can be judged.

It is this close relationship between the Codex Alimentarius and the SPS Agreement that leads many to say that the Codex Alimentarius standards are legally binding. In truth they are not and while the SPS Agreement requires countries to adopt an appropriate standard which takes the Codex Alimentarius into account, the Codex Alimentarius standards are not mandatory per se. However it is difficult to imagine how a country can agree to a standard in the Codex Alimentarius, where it has a blocking vote, and then decide to use a radically different standard to fulfil its obligations under the WTO. This is because the Codex Alimentarius standards are meant to protect human health and promote international trade. A less stringent standard would be seen as a threat to human health; a more stringent one a barrier to international trade.
Consequently, according to Rob Verkerk, Director of the Alliance for Natural Health (ANH), poorer countries often lack the resources to give them the competence which would enable them to participate fully in all Codex Alimentarius meetings. This leaves influential Codex Alimentarius committees dominated by a handful of countries, including the EU, Canada, the USA and Australia.

To demonstrate this, he points to the ten year dispute between the EU and the USA over animal hormone injections which has cost the EU over $1.2bn, according to the ANH’s figures, and remains unresolved today. Few individual countries would be able to spend such money on disputing food standards.

This perspective appears to be supported by the soon-to-be-disbanded Food Standards Agency, whose spokesperson said: ‘Trade dispute are rare and the smaller countries … are not usually equipped to handle such a dispute.  Most disputes are settled diplomatically rather than on the science.’

Behind closed doors

The decision making process for the standards themselves is similarly open to criticism. Within the Codex Alimentarius there are currently 22 active committees working on various aspects of food safety. These meet every one or two years, but obviously work continues in the meantime.

This work includes closed meetings, which NGOs are not allowed to attend. It is here, according to Rob Verkerk, that the true decision making process happens; formal committee meetings, where NGOs have their opportunity to speak, is closer to a ratification process than an opinion-forming debate.

This perspective is supported by Penney Viner, Vice President of the Heath Food Manufacturers Association, who participates in the Codex Alimentarius through the industry body the International Alliance of Dietary/Food Supplement Association (IADSA).

She concedes that the only real way that an NGO can directly influence outcomes at Codex Alimentarius meetings is through influencing national governments, but she points out that industry NGOs may be able to influence outcomes through a different mechanism. ‘On the more technical issues where Codex cannot make up its mind it will set up electronic working groups and … it’s not uncommon for such working groups to be industry led,’ she says.

This process has led some to conclude that the detailed definition of each food standard is often left in the hands of corporate interests, leaving the governments to debate whether any risk posed to human health is adequately balanced by the promotion of a global food trade. This may or may not be the case, but without the full transparency provided by making all meetings’ minutes publically available it is difficult to come to a conclusion one way or the other.

Assault on wholesomeness?

The final accusation – that the Codex Alimentarius seeks to undermine the nutritional value of food – seems on the face of it to be ridiculous. One of the founding principles of the Codex Alimentarius is that it should protect human health and the WTO SPS Agreement’s wording makes it clear that human health is of greater consideration that the promotion of internationally agreed trading standards.

In addition, both the Codex Alimentarius standards and the WTO SPS agreement make it clear that a food’s “wholesomeness” should always remain intact.

However, the Codex Alimentarius’ twin purpose of promoting the international food trade and protecting human health means it always has to balance what may be a risk to human health against the promotion of an international food trade. This means, according to Rob Verkerk, that the Codex Alimentarius cannot take into account the additional nutritional value that may be gained by sourcing fresh food from the farm gate. Nor is there space within it for balancing general sustainability issues (such as food miles) against economic gains.

Because these considerations benefit the global food trade, neither are considered within the Codex Alimentarius standards and, according to the Food Standards Agency, a wholesale rewriting of the Codex Alimentarius’ remit would be required in order to change this.

Change is slow

Criticisms of the Codex Alimentarius are nothing new, even among conservative commentators. During a debate entitled “The Future of the Codex Alimentarius” organised earlier this year by the Centre for Economic and Social Aspects of Genomics, Ezzeddine Boutrif, Head of the Food Quality and Standards Service at the FOA, responded to such criticisms, saying: ‘there were some very bad things about [the] Codex which were happening a few years ago but we’ve cleaned up our act now’.

However the Codex Alimentarius does not move as swiftly as this quote suggests. There have been attempts to speed the decision making process up, both by shortening the eight-step process required to adopt a new standard and by introducing two-thirds majority voting in place of consensus voting. However these changes have already been debated for nearly a decade with no firm decision being made, so anything which requires a more radical change in the Codex Alimentarius’ remit is likely to remain a long way off.

In the meantime the world moves on and consumers become more and more concerned by what’s in the food they eat and why it is considered to be safe or healthy, with anything which doesn’t address these concerns increasingly being seen as an obstacle.

For example, a decision was taken recently to allow foods which contain as little as 70 per cent organically produced food to describe themselves as organic. This has little to do with defending the status of organic food or the perceived health benefits it may bring, and everything to do with increasing the trade in food that can be labelled as organic.

To try and reflect consumers’ increasingly holistic approach to food, the ANH has recommended that the Codex Alimentarius should move towards a multi-disciplinary approach, where the food trade is considered from the bottom up and the standards are created through a transparent process, one of whose aims is to produce a sustainable result.

The truth be told, there is very little in the Codex Alimentarius’ reality which gives credence to the more sensational accusations levelled against it, and most of our diets do indeed rely upon internationally traded food, from lentils and beans to tea bags and cocoa. But while it remains an opaque system that concentrates on the acceptable risk to human health in order to promote trade, many will see it as an increasing threat to nutritious and sustainable food; perhaps rightly so.

Plain text version:

The causeway linking Singapore to the southern tip of the Malaysian peninsula is normally clogged with cars and trucks making the short international journey, but things got particularly bad on Feb. 1, when traffic came to a grinding halt. Thirty-seven trucks were abandoned where they stood on the Malaysian side, just yards away from a customs checkpoint, their drivers having simply walked away. Upon further investigation, it was discovered that they were carrying an illegal substance — but not drugs, illegal migrants, or precious jewels. They were carrying sand.

Singapore’s economy quite literally rests upon maintaining a huge and continuous supply of sand — and smuggling has become a multibillion-dollar trade, driving a huge web of corruption and theft in a country renowned for honest business practices and corporal punishment.

The tiny island nation, one of the 20 smallest states in the world, has enjoyed a phenomenal economic boom since the 1980s. In the space of only 30 years its population has doubled and its GDP has exploded by more than 1,000 percent (making it now the wealthiest country in Asia). Singapore’s economic success is largely based upon the phenomenal growth in its services industry. The country has taken advantage of two factors: its ability to process silicon for use in microchips and electronics, and its positioning as a regional business hub within Asia, connecting industrial leaders and business executives from across the continent.

But the boom times have come at a cost. The country has, quite literally, run out of space. Since Singapore’s independence in the 1960s, its land area has grown from 581.5 to 710 square kilometers. By 2030, the country plans to expand by another 70 square kilometers. That would see Singapore’s land area grow 30 percent from its original size, giving it the same area as New York City.

This added girth requires dumping a mind-boggling quantity of sand into the ocean, in what is known as land reclamation projects. To reclaim 1 square kilometer of land from the sea, up to 37.5 million cubic meters of sand are needed — the equivalent of filling three and a half Empire State Buildings. Singapore’s main airport is built almost entirely on reclaimed land, and one of the largest recent projects is the aptly named Marina Bay Sands project, a five-star hotel and casino on Singapore’s shoreline whose major investors include the owners of the Las Vegas Sands Corp.

There are two types of sand generally used for land reclamation projects: sea sand, which is dumped into the ocean as filler, and river sand, which has a far finer granularity and is a central ingredient in concrete, which Singapore uses in vast quantities to fuel its monumental building program.

Although Singapore is itself an island nation, it ran out of its own sand many decades ago. Today the entire island consists of urban areas or protected-environment sanctuaries. This shortage has fueled a massive industry, worth at least $1 billion between 1998 and 2008. And it’s only growing: In 2008 alone, according to its own figures, Singapore imported more than $273 million worth of sand, more than any other country in the world. But these numbers — which account for only the legal trade in sand — are only the tip of the iceberg.

This insatiable need for sand has created a slew of problems not often associated with this by-the-book country, which is rated by Transparency International as the third-least corrupt country in the world, behind only Denmark and New Zealand. In recent months, however, a number of illegal sand excavation activities have been traced back to Singaporean companies. Whether this smuggled sand entered Singapore through government collusion or willful ignorance is hard to ascertain, but questions are increasingly being asked about how much officials really know about the quantity and provenance of sand imports.

Until recently, the vast majority of it has come from right next door: Malaysia, which lies less than half a mile away across the Singapore Strait. And that’s odd, as Malaysia has had a blanket ban on the export of river and sea sand for more than 10 years, since it discovered that materials for its own land reclamation projects were being illegally diverted to Singapore.

There are no hard figures regarding the extent of the illegal trade between Malaysia and Singapore. The best official figures available come from the United Nations’ Comtrade database, which lists countries’ declared trade figures for a variety of commodities. But even a cursory comparison of its data shows that something is drastically amiss. For example, in 2008, Singapore declared it had imported only 3 million tons of sand from Malaysia — yet Malaysia’s figures show that a staggering 133 million tons of sand were reportedly exported to Singapore despite the 10-year blanket ban.

It’s hard to say whether either figure is accurate, but it’s clear that vast quantities of Malaysian sand are being smuggled into Singapore. A recent report by the Malaysian civil servants union estimates that 41 percent of Malaysia’s officials are involved in some form of corruption. Mohamad Khir Toyo, the former governor of Malaysia’s most prosperous state, Selangor, has even insinuated that his successor is allowing the illegal trade to continue unhindered. “Sand is being stolen every day, and not a single lorry has been seized and no one has been charged,” he said in May. “I suspect certain leaders from a certain party … are protecting the culprits.”

In June, an investigation by the Malaysian newspaper the Star blew the lid off the sand smuggling trade. The paper’s reporters followed a Malaysian dredging company working on the Johor River, about 50 miles inland from the Singapore Strait. The company had won a transport license by claiming it was shipping extracted sand internally, to the Malaysian ports of Tanjung Pelepas or Danga Bay. The shortest route to the destination, however, took ships through Singaporean waters. Once the sand was extracted, the barges sailed downriver to the Malaysia-Singapore border and passed through customs. The barges never made it to the claimed destination — they simply stopped at the Singaporean jetty of Pulau Punggol Timur, presented freshly forged paperwork, and unloaded their cargo.

The newspaper estimates that around 3 million cubic meters of river sand have followed this route since 2007, making smugglers a cool profit of $77.8 million. Understandably, the Malaysian government is not pleased, having been deprived of $11.5 million in tax revenues. But the million-dollar question is how such massive shipments are able to reach Singapore without anyone being the wiser. For its part, the Singaporean government flatly denies that it condones the import of illegal sand.

“The documentation that sand suppliers are required to show include licenses to dredge or extract sand at specific sand locations in the source countries, draft survey reports, and bill of loadings,” K. Senbagavalli, a spokeswoman at the Singaporean Ministry of National Development, said in an interview. “[We verify with] sand concession holders of source countries regularly that the documentation provided by the sand suppliers is authentic and accurate…. To date, the sand vendors have all been able to provide valid documented evidences of clearance from the source countries.”

But this oversight depends on reliable paperwork — and reliable officials — throughout the supply chain. If corruption is as rife as it appears to be within Malaysia, the documents are not worth the paper they’re printed on.

Although the black market Malaysian trade appears to be thriving, Singapore’s addiction requires far more sand than one country can provide. And Indonesia, a vast and sprawling archipelago of more than 17,000 islands (the nearest of which to Singapore lies about six miles to the southeast), has jumped headlong into the breach. Many of Indonesia’s islands that lie within easy reach of Singapore have few or no inhabitants — and Singapore has taken advantage of this geography, going so far as to wipe some places entirely off the map.

Rapacious exploitation, which saw up to 77 percent of the world’s sand dredgers operating in seas between Indonesia and Singapore, soon took its toll. By 1999, some islands had been mined so extensively that plans were being drawn up for sea walls to protect inland citizens from rapid erosion and rising seas. In 2003, Nipah island, which lies on the Singapore-Indonesia border, disappeared completely under the waves, “with only 3 to 4 palms trees visible to mark the island’s location,” according to the local NGO Wahana Lingkungan Hidup Indonesia.

Indonesia’s export figures show that, in the five years before 2002, it shipped at least 150 million tons of sea sand to Singapore in total. But the black market probably accounts for at least double this figure: In 2003, smugglers excavated and shipped an estimated 300 million cubic meters of sand, worth $2.5 billion. In 2007, following Malaysia’s lead, the Indonesian parliament issued a blanket ban on sea sand exports. It was completely ignored, even by the Indonesian government. Over the past five years, a further 24 islands are believed to have disappeared under the waves. Even if officials were serious about stamping out the trade, it’s simply too easy to steal sand from Indonesia’s thousands of miles of unguarded coastlines. All any would-be thief has to do is pick a remote spot where large and loud dredging equipment won’t be easily spotted and work quickly under the cover of darkness. They can return to Singapore safely within a matter of hours and, using forged documents, unload the cargo.

And yet Singaporean officials still profess ignorance. Beyond the enormous variance in official import-export figures, there’s simply no getting around the fact that Singapore’s land mass has grown by leaps and bounds — so the landfill is certainly coming from somewhere. Thus far, they’ve managed to escape the repercussions for a willing complicity in this trade by feigning surprise at bogus paperwork. For the time being, the trade is making all players happy and rich.

Singapore is poised for a bright future: It is booming economically and has positioned itself as a world leader in urban sustainability. But to fulfill that promise, however, it must first swallow an unpalatable truth — that its prosperity has come at the cost of it neighbors’ corruption and environmental destruction. Size isn’t everything; the country’s sterling reputation is now at stake.