Gaining a Competitive Advantage with ESG

OMG! Will ESG be the megatrend that transforms our planet? Environmental, Social and Governance is certainly becoming an important trend for businesses, investors, and governments.

Robert Eccles, Professor of Management Practice at Harvard Business School, and other scholars have compiled articles on Sustainability and Shareholder Value.

He wrote in 2016 that, “Recent research provides persuasive evidence of a latent investor appetite for the reporting of material ESG information that goes beyond conventional financial statements… In April 2015, BlackRock CEO Larry Fink, in his now-annual letter to the CEOs of portfolio companies, said that investors “also have an important role to play, which is why we engage actively with companies on the key governance factors that in our experience support long-term, sustainable, financial performance. Chief among these is board leadership—in our view, the board is management’s first line of defense against short-term pressures… In a world increasingly sensitive to income inequality and suspicious of the corporate quest for profit, promoting a broader understanding of the role of the corporation in society is one of the most pressing issues facing the sustainable development movement. It will become even more important now that the Sustainable Development Goals (SDGs) were ratified by all United Nations’ Member States in September of 2015. As social expectations continue to rise about how corporations, especially the world’s largest corporations, can contribute to a more sustainable society, companies have no choice but to respond. Ultimately, the company’s license to operate comes from civil society. However, the company needs to be clear on which issues are a priority, as determined by its chosen significant audiences, and which are not. The Statement of Significant Audiences and Materiality offers the board has a unique and unprecedented opportunity to present a clear and credible view of their company’s role in society—one that can guide management’s decision-making and its interactions with its significant audiences and other stakeholders.”

A recent positive example of ESG becoming relevant is the banning plastic straws and stirrers used in drinks to cut pollution, particularly in the oceans, which is gaining popularity in several coastal states of the U.S., in Europe and with many businesses like Starbucks and Alaska Airlines. I learned that a Girl Scout began a non-profit called Jr Ocean Guardians and is credited with starting the trend!

Check out Yahoo Finance which provides a watchlist of companies that rank high for sustainability.

MSCI ranks 6,400 companies and 400,000 equity and fixed income securities globally and says this trend is catching in Asia as it has in the western world.


Observations traveling to Washington D.C.

Last week I traveled to Washington D.C. and have several observations to share:

  • The first carbon neutral airport in the U.S., where I connected flights, is at Dallas Fort Worth International Airport (DFW) that purchases wind power, runs buses on natural gas, operates advanced cooling systems, and employs many more innovations.
  • Since 2010, Washington D.C. charges five cents for one plastic shopping bag to reduce use of plastic and benefit watershed projects called "Skip the Bag, Save the River."
  • Riding the Metro or driving from the suburbs to work downtown you might feel like being packed into a sardine can during peak hours. Ridesharing is very popular through traditional carpools and casual free rides called Slugging
  • The weather in D.C. was unusually cool and wet for June and we heard about recent heavy rains and floods. The Eastern U.S. is experiencing the opposite of the extreme drought conditions in the Western U.S.
  • News broke this week that the Antarctic Ice Sheet is melting three times faster than a decade ago! Here is the abstract from the journal Nature:

"The Antarctic Ice Sheet is an important indicator of climate change and driver of sea-level rise. Here we combine satellite observations of its changing volume, flow and gravitational attraction with modelling of its surface mass balance to show that it lost 2,720 ± 1,390 billion tonnes of ice between 1992 and 2017, which corresponds to an increase in mean sea level of 7.6 ± 3.9 millimetres (errors are one standard deviation). Over this period, ocean-driven melting has caused rates of ice loss from West Antarctica to increase from 53 ± 29 billion to 159 ± 26 billion tonnes per year; ice-shelf collapse has increased the rate of ice loss from the Antarctic Peninsula from 7 ± 13 billion to 33 ± 16 billion tonnes per year. We find large variations in and among model estimates of surface mass balance and glacial isostatic adjustment for East Antarctica, with its average rate of mass gain over the period 1992–2017 (5 ± 46 billion tonnes per year) being the least certain."

Where Have All the Conservatives Gone?

Pollster Frank Luntz describes his role in the 1994 Contract With America in his enlightening 2007 book Words That Work: It's Not What You Say, It's What People Hear. He states that since the 1980's, "conservatism" has been more popular than the Republican Party. The first mid-term election of the Clinton Presidency resulted in a landslide victory for the Republicans led by Newt Gingrich as Speaker of the House by convincing more than 300 candidates to join the pact. Key elements of the "Contract" included auditing Congress to remove waste, fraud, and abuse as well as  balancing the federal budget just like families must do. The theme of these conservatives was to restore accountability, responsibility, and opportunity. Well the opportunity for fiscal restraint was lost over the past 25 years due to two major wars and responding to other crises while the number of true conservatives who speak out about the national debt greatly diminished. One person who frequently speaks with conservative ideals is outgoing Arizona Senator Jeff Flake who stated nine months ago:

“No budget gimmick or phony spending offset can hide the fact that $20 trillion is the largest debt ever owed by any nation in history. It’s time for Congress to change the way Washington does business. Shutting down the Washington favor factory with a permanent ban on earmarks and eliminating duplicative, wasteful, and unnecessary federal spending would be a good start.”

Let's dream and take action by doing better for our children who will inherit our savings or our debt. This should be our top priority to conserve our world's precious resources before it's too late!

Memorial Day 2018: Sustainable Freedom

My father contributed to winning World War II by fighting for American freedom against predominantly German and Japanese dictatorships. He defended our Constitution that grants many freedoms to our republic which brought people immigrating from around the world to enjoy freedoms including of speech, religion, press and assembly. He worked his entire career for the Navy Department so I grew up in the suburbs of Washington D.C.

Our national holiday of Memorial Day is interesting to observe from an international perspective. America helped rebuild Europe with the Marshall Plan and we've enjoyed sustainable freedom for 73 years through the North Atlantic Treaty Organization (NATO). However, many of these freedoms are increasingly being challenged as international cooperation breaks down by strong nationalist and protectionist views. 

One of America's closes allies since the Civil War period has been the southeast Asian country of Thailand - which translated means "Freedom" and is the only country in the region to escape colonial rulers. King Mongkut offered the use of elephants to America in 1861 which is still seen as a gift of friendship. The U.S. operates many military bases in Thailand which became a hub for our soldiers during the Vietnam war.

I recently learned about the Ten Royal Virtues of the recently deceased King Bhumibol (whom I previously posted a blog on 10.29.17 regarding his successful environmental stewardhip). These come directly from the Buddhist tradition known as the Ten Duties of the Government as described in the book What the Buddha Taught:

1. Giving - Non-attachment to wealth and property; consider first the welfare of the people.

2. Morality - Avoid cheating, adultery, lying or using intoxicants.

3. Donation - Sacrifice for the good of the people.

4. Honesty - Never deceive the public.

5. Gentleness - Be kind.

6. Simple life - Avoid a life of luxury.

7. Non-anger - Never bear a grudge against anyone.

8. Harmlessness - Be non-violent to promote peace.

9. Endurance or Patience - Be understanding of others.

10. Right Actions - Be in harmony with the people.

As we celebrate the freedoms fought for by the Greatest Generation, let us seek virtue, peace, and harmony in our inner and outer worlds. 

Celebrating Earth Day with 23 Ways to be an Eco Hero

Every Day is Earth Day and today is the annual event! What better way to celebrate than getting outdoors, appreciating Nature, and taking positive actions. A great book that shares ideas of easy projects for kids with adult supervision is found in the 2015 book by Isabel Thomas:

23 Ways to be an Eco Hero: A step-by-step guide to creative ways you can save the world

Our eight-year old's favorite activities include making shopping bags out of old tee shirts, planting dishes of water to collect rain for birds, setting up a blind to view birds, and making meatless Eco-Burgers. He also wants to make the Action Grabber using a coat hanger, pole, tape, and rubber bands to pick up trash. There are many other ideas for making bird houses, a Batty Box, and wrapping birthday presents. 

What's SNOTEL telling us about Current Snow-Water Conditions in Colorado?

Over the past week, over 22 inches of snow fell on the Grand Mesa of Grand Junction. Now the snow-water equivalent for the northern mountains of Colorado is above 80% of normal. However, the southern mountains including the San Juan's are well below 50% of normal. We will see if spring snowfall can make up the deficits to avoid another water crisis.

For more information on this important federal website, see NCRS!

Demonstrating a Climate of Hope

Despite all the terrible events this year caused in large part by global climate change: including the worst wildfire season in the Pacific U.S.; major Category 5 hurricanes that destroyed much of Puerto Rico, Virgin Islands, parts of Florida, and Houston; droughts in the southwest and snow in the southeast parts of U.S….there are numerous reasons to keep hope alive. In fact, perhaps because of these and many other tragic events, a new awaking is emerging worldwide that we got ourselves into this mess by not understanding the delicate balance of nature and cumulative human impacts, so we must quickly find ways out of our calamity.

After reading a new book published this summer by former New York City mayor Michael Bloomberg and former Sierra Club president Carl Pope, I feel so much more informed and optimistic about positive actions being taken. The book is titled Climate of Hope: How Cities, Businesses, and Citizens Can Save the Planet.

Mr. Bloomberg shares his wisdom that many mayors are making substantial progress in sharp contrast to the dysfunction in Washington. In New York City, ten years ago he led implementing sustainability with PlaNYC. A great outcome is the greening of the Empire State Building! Mr. Pope describes many battles that he personally waged such as the Beyond Coal campaign which prevented about 120 coal plants from being built allowing for newer, cleaner technologies to emerge. The book exemplifies the Earth Day idea of Think Globally, Act Locally.

Both leaders describe green actions including jobs that are transforming our society. For example, instead of promoting more coal mining jobs which are being replaced mostly by robotics so why not help out of work coal miners get jobs to restore areas damaged by past mining?

So here is a list of some great quotes cited in Climate of Hope from seven mayors and other renowned thinkers as chapter headings giving a sense of multiple topics:

·         Dwight D. Eisenhower: “In preparing for battle I have always found that plans are useless, but planning is indispensable.”

·         Denis Coderre: “If you want to get things done, ask a mayor.”     

·         Jason Box: “It’s really quite simple. We’ve overloaded the atmosphere with heat-trapping gas and the rest are just details.”

·         Cindy Lerner: “Turning the Miami region into a real-world Atlantis is a fate we cannot accept.”

·         Alisha Winters: “Our families deserve clean air, and we have been without it for far too long.”

·         Dale Ross: “Our municipal utility will move to 100 percent renewables…Environmental zealots have not taken over our city council. Our move to wind and solar is chiefly a business decision.”

·         Kasim Reed: “You cannot have a national initiative without involving cities.”

·         Alice Waters: The reality is that the sustainable-food movement’s reach will grow only to a point and ultimately will be limited to those with access, means, and education – unless legislators dramatically change food and agriculture policy.”

·         Yeom Tae-Young: “As urban populations continue to grow, we cannot rely on the business-as-usual scenario of car-based cities.”

·         Amory Lovins: “Oil dependence is a problem we need no longer have – and it’s cheaper not to. U.S. oil dependence can be eliminated by proven and attractive technologies that create wealth, enhance choice, and strengthen common security.”

·         Diane Regas: A sustainable world is possible if we take advantage of the vast opportunities in manufacturing. We must view these industries – and their supply chains – as a source of solutions, not just a source of problems.”

·         Christiana Figueres: “Climate change increasingly poses one of the biggest long-term threats to investment.”

·         Mitch Landrieu: “For generations, barrier islands, marshes, and cypress trees as far as the eye could see protected us from hurricanes…For decades the coast has been under attack from every angle: cut by canals, starved of nutrients, and battered by storms…This attack must stop and be reversed.”

·         Albert Einstein: “The measure of intelligence is the ability to change.”

·         Marty Walsh: “We know that climate action only works when we get everyone involved: our government, our businesses, neighborhoods, and residents.”

Update from the 7th Annual Upper Colorado River Basin Forum at Colorado Mesa University

Is there enough water available in the Colorado River Basin (CRB) to meet all our current and future needs and obligations? According to my synthesis of information from the 7th Annual Upper Colorado River Basin Forum on November 1-2, 2017, consider this:

·         Currently about 40 million people depend on CRB water for agriculture, domestic, and recreational supplies

·         The 1922 compact with 7 states overestimated supplies so now the CRB is overallocated

·         The federal government (Bureau of Reclamation) requires adequate reservoir levels for hydroelectric generation and could override the 1922 compact

·         States are developing Drought Contingency Plans with improved efficiencies increasing supply

·         Efficient applications of drip irrigation and native plants are encouraged but not yet required

·         A US treaty with Mexico attempts to deliver some water that historically flowed to the ocean

·         Farmers consume about 90% of CRB water and have some of the oldest priority water rights

·         Some farmers are reluctant to conserve in fear of losing water rights and money

·         Colorado water law of beneficial use makes the “use-it or lose-it” mentality illegal

·         In Colorado, about 70% of water originates in the Western Slope with only 30% of the population while 30% of the water originates in the Eastern Slope (including Denver) with 70% of the population

·         Denver’s population is expected to double in roughly 30 years so demand is increasing

·         Trans-mountain diversions and priority water rights can allow the Eastern Slope to take much more than current amounts

·         Wyoming is building new reservoirs (“water banking”) on the Green River

·         In New Mexico, the Elephant Butte reservoir near Albuquerque almost went dry during recent droughts which had to be channelized and loses 250,000 acre-feet to evaporation when at capacity

·         Most vegetables in US are grown in the Imperial Valley of California using CRB water

·         The recent 5-year drought resulted in many farms going dry (crops were fallowed)

·         Beyond CRB for human consumption, recreationists (boating, fishing, etc.) demand more supply

·         The climate is changing and resulting in more variability making long term predictions difficult


So is there enough water available in the Colorado River Basin (CRB) to meet all our current and future needs and obligations? I would say currently no and optimistically with significant changes in the amounts of water that we consume there is the potential for saying yes.  

The forum provided great examples of techniques to measure and forecast water supplies. I suggested to the organizers for next year that additional consideration be given to water quality that is degrading or improving depending on many factors.

In summary, the Upper CRB Forum organized by Colorado Mesa University provides an incredibly valuable exchange of information in a non-confrontational environment that seeks to improve our understanding of the world we live in and how we can become better stewards of our environment.

Celebrating the Life and Environmental Stewardship of the King of Thailand

This week, Thailand is celebrating and mourning the life and passing of King Bhumibol, with a cremation ceremony one year after his death. I've traveled to Thailand many times over the past 23 years and always felt greatly impressed by the love people displayed for their King. By learning more about his many accomplishments - especially with environmental stewardship, I began to understand the people's devotion. 

I experienced first hand the great accomplishments of the King regarding environmental and economic development. In 1994, I traveled to several Asian countries as a tourist and no where else did I feel so warmly greeted with great kindness as in Thailand - the Land of 1000 Smiles. One of the first things that I noticed was the caring and respect for family and especially the elders, the lack of homelessness, and genuine generosity. 

I traveled with an American doctor friend who volunteered at a hospital in Bangkok. When I saw the newspaper of an environmental conference in honor of the King to be held near Pattaya, I knew I had to go. The conference displayed technology from many countries for air and water purification and ways to improve agriculture. I became very impressed with the many accounts that I heard for the King's direct involvement and creativity to improve the lives of Thai people. One example I observed was the way he worked with rural farmers to improve rice crops, reduce flooding, and clean water.

Here is an article on the King's sustainable development practices and a thoughtful speech last year shown by video of U.S. Ambassador Samantha Power on the life and connections of the Thai King.



100 Solutions for Reducing Carbon Continued

As mentioned in my previous blog, I'm very excited reading the DRAWDOWN book! In addition to describing many currently proven and viable future high-tech solutions like harnessing renewable energy and electric vehicles, there are many low-tech solutions proven to make a huge difference.

Some of these proven low-tech solutions involve how we grow our food supply. Here are a few ideas the book discusses:

* Let rice field dry out in mid-season to prevent methane buildup

* Allow cattle to roam in forests to reduce deforestation

* Plant multiple crops together to improve biodiversity and health of soil; for example - in tropical areas can plant coconut, banana, and ginger together

* Keep fields vegetated rather than exposing soil to reduce erosion and loss of the carbon sink

100 Solutions for Reducing Carbon and Living in a Cleaner World

Finally there is an optimistic new compilation of current and future technologies to reduce greenhouse gas carbon emissions.  In the book "DRAWDOWN: The Most Comprehensive Plan Ever Produced to Reverse Global Warming."  Published by Penguin Random House and edited by Paul Hawkin, I found this book at the library on the new book shelf last month. 

Project DRAWDOWN included 70 research fellows from 22 countries and 120 person advisory board. The introduction states:

"Almost all of the solutions compiled and analyzed here lead to regenerative economic outcomes that create security, produce jobs, improve health, save money, facilitate mobility, eliminate hunger, prevent pollution, restore soil, clean rivers, and more."

Worldwide about 36 billion gigatons of carbon dioxide (including equivalent greenhouse gases) were emitted in 2016. To visualize one  "gigaton," imagine 400,000 Olympic sized swimming pools; so 36 gigatons is about 14.4 million pools. 

The DRAWDOWN approach is to evaluate 100 possible solutions and provide a ranking for the gigatons of carbon dioxide reduced over the next 30 years as a function of cost. Here are the top 10 solutions:

1. Refrigerant Management (replace hydrofluorocarbons with other chemicals)

2. Wind Turbine (Onshore)

3. Reduced Food Waste

4. Plant-Rich Diet

5. Tropical Forests (Restore over one billion acres of forests)

6. Educating Girls results in smaller families

7. Family Planning

8. Solar Farms

9. Silvopasture (integrating forests with pasture for cattle grazing)

10. Rooftop Solar

Implementing these 10 solutions is projected to reduce carbon dioxide emissions by about 750 gigatons and many other exciting solutions are described to improve our lives for a cleaner environment. 


Expressions of Concern from Natural Disasters

Worldwide, we are experiencing numerous natural disasters this week including record-setting hurricanes: Harvey in Texas, and Irma in Caribbean and Florida; flooding in Mumbai, India; wildfires in the Pacific Northwest; and earthquakes in Mexico.

We are closely monitoring these events and responses. Although it’s difficult to find anything good coming from these events, it is great to see many selfless citizens helping each other in rescue efforts and providing donations. Perhaps people will become more educated and aware of the potential causes and how to be better prepared for these events. These times also remind us of the essential importance of life and that worldly possessions – like houses and cars - can be replaced.

Schendler’s List for Corporate Sustainability

Auden Schendler shares compelling war (and peace) stories from the front lines of the sustainability movement separating corporate propaganda from real advancements. After reading his 2009 book, we shared some text messages and he says, “in short, if business doesn’t approach climate at scale, it’s not part of the solution.”

In the 2009 book, Getting Green Done: Hard Truths from the Front Lines of the Sustainability Revolution, he describes his influential role as sustainability manager for Aspen Skiing Company. Mr. Schendler points out that Aspen, Colorado is a mecca for the ultra-affluent, generating world-wide attention, so has a greater impact on corporate decisions. Aspen is also a poster child for the impacts of climate change where the winter season already lost a month due to early springtime just in the past few decades. The future of the ski industry (as well as the entire planet) is being jeopardized by global warming, aka. climate change.

More recently in 2013, Auden Schendler and co-author Michael Toffel provided a list of five actions needed for meaningful corporate sustainability programs:

1.       Lobby local, national and international political leaders to reduce carbon

2.      Insist trade groups give priority to climate policy

3.      Market climate activism

4.      Partner with effective non-governmental organizations

5.      Demand suppliers reduce greenhouse gas emissions


Sustainable Development Scenes from Los Angeles

This past week we took a family vacation to LA touring Universal and Warner Brothers studios, Malibu, Long Beach aquarium and whale watching, Legoland, and more. We visited friends in Koreatown and Burbank. Lingering effects from severe drought that ended last winter are still very evident. Burnt brush from an 18-acre fire in Burbank only six weeks ago is still very dramatic and fortunately no homes were lost but there was a lot of smoke.

Hollywood and Beverley Hills are well known style and fashion trend setters with the envy of the world watching so sustainable development actions taken here could catch on. Very noticeable and surprising are the variety of ways people are making sustainable actions including:

·         Planting a fruit and vegetable garden in their front yard

·         Replacing dead lawns with artificial grass

·         Using recycled water for large areas including parks and universities

·         Active solar collection

·         Charging stations for electric cars

·         Environmental education programs

For photo examples of these sustainable developments, see the picture gallery.


Interesting Eco Books for Our Reading Pleasure

Here are some books available at the local library that I’ve found most interesting reading this summer:

Edward O. Wilson, 2016 Half Earth: Our Planet’s Fight for Life

David Grinspoon, 2016 Earth in Human Hands: Shaping Our Planet’s Future

Auden Schendler, 2009 Getting Green Done: Hard Truths from the Front Lines of the Sustainability Revolution

Jeffrey D. Sachs, 2008 Common Wealth: Economics for a Crowded Planet

Independence Day 2017: Irrigation Returns and Enjoying Local Lakes

This morning at 5 am Redlands Water and Power Company began pumping irrigation water after a 4-day shutdown. Crews worked really hard to drive and get repairs performed in Denver. In addition to fixing the 85-year old hydroelectric generator, it appears obvious that the company could provide much more education to water users on their website.

I saw on our Nextdoor neighborhood account people asking if they should turn off irrigation pumps at home during the outage. Yes, when there is no water turn off the electricity to prevent the pumps from burning up before they run dry. Here are some helpful hints from Rain Brothers.

Also, people often do not know when or how much water to apply to grass. As we drove around the community at 4 pm today, we saw many people watering during the heat of the day. The best time to water grass is after the sun goes down when it is cool so the grass does not get burned. Overwatering can also cause grass to die and we see much of the irrigation water going down the drain.

This morning our son caught his first fish, two small mouth bass, at Connected Lakes State Park.  Then in the late afternoon he got to play with a remote control power boat on a pond at Canyonview Park. 

Balancing competing water demands of irrigation and recreation requires better understanding of sustainability and education. 

Happy Independence Day 2017!