Sustainable Competitiveness

Economic development over the years has lead to an increased look into environmental and social concerns as part and parcel of productivity and economic growth.  Data has shown that increasing productivity and economic growth went hand in hand with better and improving living conditions. 

More recent data suggests that trends in economic growth no longer tell the whole story. The need to better understand the relationship between economic competitiveness and social and environmental sustainability has been revealed by events such as the “Arab Spring”, the rise of unemployment in many advanced economies – particularly among the young and less skilled population –, increasing income inequalities and social unrest in rapidly-growing economies as well as by increasing pressure on natural resources or the high levels of pollution.

The World Economic Forum’s annual Global Competitiveness has embarked on a major effort to deepen understanding of how sustainability relates to competitiveness and what this means for the development path of economies.  Since 2011 the Forum presents the  Sustainability-Adjusted Global Competitiveness Index (GCI). This new measure aims to assess the “the set of institutions, policies and factors that make a nation remain productive over the longer term while ensuring social and environmental sustainability”. measures not only the propensity to prosper and grow, but also integrates the notion of “quality growth”, taking into account environmental stewardship and social sustainability.

 

This innovative approach builds on the Global Competitiveness Index (GCI), highlighting the importance of competitiveness as the key indicator of prosperity. The GCI is then adjusted by two new pillars: The social sustainability pillar, which measures the “set of institutions, policies and factors that enable all members of society to experience the best possible health, participation and security; and to maximize their potential to contribute to and benefit from the economic prosperity of the country in which they live” and the environmental sustainability pillar which measures “the institutions, policies and factors that ensure an efficient management of resources to enable prosperity for present and future generations”. 

One of the most important findings of this analysis suggests that there do not seem to be any necessary trade-offs between being competitive as well as socially and environmentally sustainable.

The results presented in this edition are preliminary and tentative as the work continues. The lack of high-quality available data and a more evidence-based understanding of the complex relationship between competitiveness and environmental and social sustainability prevent us from presenting more conclusive results.

WEF original article 

Sustainability Reporting Increasing in China

One-third of  companies surveyed  in China share their sustainability initiatives with the outside world, illustrating some progress in the country to promote non-financial reporting, according to a report released by The Conference Board.

Potential regulatory changes requiring the presentation of certain sustainability metrics and a movement among companies towards greater transparency will likely drive disclosures rates upward, The Conference Board said.

 
The Conference Board’s Sustainability Matters 2013 report is a collection of previously published director notes centered around sustainability communication. The report, which summarizes findings from the Conference Board’s benchmarking report, also features new content, including an emerging trend among shareholders during proxy season and data on sustainability reporting in China.

While there has been a rise in sustainability reports in China, a general lack of experience and awareness of reporting standards still lingers, The Conference Board said. For example, only 5 percent of the sustainability or CSR reports issued in China in 2011 and filed in consulting company SynTao’s database had been audited by an independent third party.

The Conference Board report also found increasing shareholder requests over the past several proxy seasons for companies to publish sustainability reports. In 2008, there were nine proposals asking companies to develop a sustainability report, accounting for 5,1 percent of shareholder proposals on environmental and social issues. By 2012, the number of proposals had jumped to 14, representing 8.8 percent of resolutions on environmental and social issues.

The Proxy Preview 2013 report released last week found investors have filed 365 shareholder resolutions this year on environmental and social issues, with 38 percent of the proposals focusing on climate change, energy and corporate sustainability strategies. While political spending resolutions continue to dominate the agenda, totaling one-third of all proposals filed so far, climate and energy, other environmental issues and sustainable governance combined make up the next biggest chunk of the total.           Original Report

AMEA's Sustainable Business TV series

AMEA is developing a series of SUSTAINABLE BUSINESS TV SERIES of documentaries, our second in the series is themed “Indonesia: A New Era of Sustainability and Economic Growth.” 

This interactive and informative documentary will give insight and holistic view of leading land-based industries driving the country forward. It will outline the need for change in business as usual to sustainable business solutions in Land Based Industries in Forestry and Palm Oil. 

 It will showcase leading corporations that are developing business driven solutions to some of the greatest challenges of these industries including, poverty, climate change, education, healthcare among others. 

Land based industries are a significant contributor to Indonesia's GDP and major contributor to regional and rural development. We will explore the multiplier effects which these industries have on the country and explore the challenges and solutions to critical issues. 

Stay tuned as we are aiming for this June for the broadcast airdates! 

Mining companies asked to be partners in building sustainable society

MANILA, Philippines - An official of De La Salle University (DLSU) has challenged mining companies “to show that the industry can be a partner toward building a sustainable society for Filipinos.”

“They should call our attention to the fact that they can be our co-workers as we all help in giving quality life for Filipinos,” DLSU Liberal Arts dean Dominador Bombongan Jr. said.

The Chamber of Mines of the Philippines (COMP) and representatives of mining companies recently met with DLSU political science students in a forum which COMP president Philip Romualdez described as a meeting with an academic community that “has not arbitrarily and totally closed its mind on responsible mining.”

“Mining companies who practice and advocate responsible mining should also demonstrate to us that they are not contributing further to the destruction of our already fragile environment,” Bombongan said.

“We are happy to dialogue with an academic community which is open-minded and willing to listen” Romualdez said.

Romualdez said the COMP is willing to show people how large-scale responsible mining operations are done and to educate the public about how small-scale mining activities are conducted.

“We can show any willing and open-minded person or group how our member-companies are practicing responsible and sustainable mining,” he said.

Among the companies in the dialogue with the students was Sagittarius Mines Inc. (SMI), government contractor for the proposed $5.9-billion Tampakan copper-gold mining project in South Cotabato.

Recently, SMI supported the call of an international industry watchdog, Extractive Industries Transparency Initiative (EITI), for the Philippine government “to ensure that resource-rich communities feel the fruits of the extraction of mineral resources.”

SMI general manager Mark Williams said the company “supports the Aquino administration’s willingness to ensure transparency of revenue payments from the mining industry.”

EITI said the government should be transparent and “show that the local governments hosting mining projects get their fair share of the mining revenues.”

EITI also said that transparency will ensure the prudent use of the country’s mineral resources and make the mining industry a real engine of economic growth.    Philstar

Green Investments

Going on this week is the annual World Economic Forum where leaders from around the world discuss major impacts.   Green investment is becoming a mature sector – the World Economic Forum publishes the Green Investment Report recently.  The report documents major growth in investment. It also finds that developing countries are increasingly becoming an important source of capital.  Here's a list of top 10 myths about climate change and green investments. 

From http://forumblog.org/2013/01/top-10-myths-about-climate-change-and-green-investment/

Top 10 myths about climate change and green investment

1. Reduced economic activity due to the financial crisis has resulted in a global reduction in greenhouse gases.

False – while some countries have seen emission reductions, the United Nations Environment Programme estimated global emissions in 2011 at 40 billion tonnes of CO2, 20% higher than 2000 levels.

2. The renewable energy market is in global decline.

Not true – the global renewable energy market has in fact been counter-cyclical to the economy: global investment in renewable power and fuels increased 17% to a new record of US$ 257 billion in 2011. The removal or roll-back of government subsidies has caused some firms to struggle. But other firms have maintained a positive gross margin and the expectation for 2013 is for a restructuring and emergence of a stronger, more focused industry sector.

3. Industrialized (OECD) countries are the leading clean energy investors.

Not true – in 2012, investment originating from non-OECD countries is set to exceed that from OECD countries. In fact, cross-border and domestic investment originating from non-OECD countries grew 15-fold between 2004 and 2011 at a rate of 47% per year. Most of this non-OECD finance is being used domestically.

4. The public sector is the primary source of funds for climate-friendly investments.

Untrue – while the international climate negotiations focus almost entirely on public finance, in fact, the Climate Policy Initiative documented that in 2011, only one-quarter of cross-border investment in climate change mitigation and adaptation was from public sources (US$ 96 billion); fully 75% came from private investors (US$ 268 billion).

5. Cross-border investment in clean energy is a bigger source of finance than domestic investment.

Again not true – in 2011, Bloomberg New Energy Finance reported that 70% of global investment in clean energy was from domestic sources. Interestingly, of this, more than 50% was from non-OECD countries.

6. We cannot address the climate challenge due to fiscal austerity and limited government budgets.

Untrue: While the International Energy Agency (IEA) estimates that US$ 700 billion per year in additional investment is needed to stabilize the climate at two degrees Celsius, the corresponding fuel savings make the transition much easier – between 2010 and 2050, the IEA predicts a net savings of US$ 5 trillion. Further, innovative public-private financing mechanisms have proved successful in reducing and distributing risks and drawing in private investment.

7. Renewable energy is the sector that requires the greatest investment.

This is false – the IEA estimates that more than half of the new investment required per year to 2030 to meet the climate challenge is needed for energy efficiency in the buildings and industrial sectors; 28% is needed for low-carbon transport and 21% is needed for clean power.

8. Investors do not have the right tools to manage the political risk associated with clean energy investments in emerging markets.

While investors have strong perceptions of risks, this is untrue. The Green Investment Report documents a number of existing products and solutions that development finance institutions (DFIs) are using to address investor risk, including loan guarantees, partial risk/credit guarantees and political and regulatory risk insurance cover. These tools are targeting new emerging markets where private lenders are not initially comfortable or familiar with green technologies.

9. It is difficult to mobilize finance for green growth in an uncertain economic environment.

False – the report finds that, despite the global economic slowdown, total new global investment in clean energy grew to US$ 257 billion in 2011. This represented a six-fold increase from 2004 and was 93% higher than in 2007, the year before the global financial crisis. In addition, the multilateral development banks made US$ 1.9 billion in investment through the innovative Clean Technology Fund, which has achieved mobilization of a further US$ 16.4 billion of private finance to date. This sort of leveraging effect has been seen in a number of instruments and can be replicated to scale up further private investment.

10. Institutional investors do not have the means to invest in green infrastructure financing.

Not true – green bonds have significant potential as a means to access deep pools of low-cost capital held by institutional investors for green and climate change-related projects. Institutional investors are natural buyers of green bonds, given their appetite for investment in low-risk fixed income products with long-term maturities that match their long-term liabilities. The Climate Bonds Initiative estimates the size of the global climate or “green bond” market at US$ 174 billion.  

Coming Soon..... Indonesia: Mining for Civilization

 More to come soon. 

Energy Sustainability

“We must accept that we have to make hard choices in this generation to bring about real changes for future generations and the planet. Politicians and the industry must get real.”

This is quoted from the report released by the World Energy Council (WEC) in partnership with the global consulting firm Oliver Wyman.  The report titled, World Energy Trilemma: Time to get real – the case for sustainable energy policy gives a overview of energy sustainability and methodology to achieve this.  

The three noted dimensions of energy sustainability

The World Energy Council’s definition of energy sustainability is based on three core dimensions - energy security, social equity, and environmental impact mitigation. 

The development of stable, affordable, and environmentally-sensitive energy systems defies simple solutions. These three goals constitute a ‘trilemma’, entailing complex interwoven links between public and private actors, governments and regulators, economic and social factors, national resources, environmental concerns, and individual behaviors.