Bill of “Rights” December 3, 2013 | VLEARN
Lavery Pennell on Profitable Sustainability... November 26, 2013 | VLEARN
Fullerton on Finance November 25, 2013 | VLEARN
Putting Ethical Policies into Practice November 5, 2013 | VLEARN
OECD Lecture: Climate Challenge. October 17, 2013 | VLEARN
PORTER: NGO’s & Shared Value October 15, 2013 | VLEARN
Angel Gurria OECD on Carbon Reduction. October 14, 2013 | VLEARN
Becker: The ‘Chicago School’ Economist on Recovery... October 2, 2013 | VLEARN
Resource Efficiency October 1, 2013 | VLEARN
“What are the lessons of the global financial crisis?” James Vaccaro of Triodos Bank asks the question at the Bristol Green Week Schumacher Lecture 2012.
James Vaccaro is Head of Market and Corporate Development, Triodos Bank NV http://www.triodos.co.uk
He is a specialist in environmental and social finance. Since joining Triodos Bank in its early days in the UK, James has managed equity investments and project finance for renewable energy projects; advised on bond issues and share offers for leading social enterprises including Ecotricity, Ethical Property Company and Cafedirect; worked as an analyst for microfinance institutions in Asia and Africa; and managed equity investments in a range of early stage business including organic food businesses, recycling companies and environmental technology companies. In 2005, he started Triodos Bank’s investment activity in the UK and was Managing Director of Investment Management (incorporating Corporate Finance and Fund Management). James was also the Managing Director of Triodos Renewables plc from 2005-2012 and was a director of the world’s largest operational offshore wind farm. James is a member of the Markets Committee of UKSIF, a Fellow of the RSA and a Trustee of a Community Development Association in South Bristol.
Tags: James Vaccaro, Triodos, Ethical Banking, Banking, Start ups, Finance, Venture Capital, Perpetual Growth,
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Sustainability as an issue is increasingly occupying a prime spot on the agenda of board rooms and C- Suites throughout the UK and globally. This is because it is about the system within which we do business and that system is changing. Whether it is water scarcity, food security, the relentless rise in resources costs, resource scarcity, threats to supply chains, clean energy, severe weather, or social unrest such as the Arab Spring. Businesses increasingly have to manage these impacts.
Many companies faced with one or two of these issues are not yet joining all the dots. However, more and more companies are beginning to do so and understand what this means. There is a systems change taking place. They understand that sustainability is critical to their license to operate, their survival & that they must innovate. They see it is no longer an either or, but that sustainable business means competitive advantage and survival. Whilst the financial markets haven’t caught up yet there is some movement to do so. There is a strong and relentless rise in sustainable & green finance. Increasingly investors understand that some asset classes may be at risk. Part of the problem is that Governments do not always provide a clear and effective signpost to investors through policy & legislation. The policy responses can often be unclear, confused and worst case last minutes & sudden.
As lawyers our core business is advising clients on the changing legislative and legal frameworks within which they must operate. In an ideal world Governments and policy makers would provide a clear & joined up legal framework to respond to the systems change taking place. Unfortunately, in most countries this is not the case. The policy & legislative framework emerging is a patchwork of different approaches, standards and differing from country to country. Our job is to help our clients navigate this patchwork World. For the penny to truly drop and sustainability to be at the heart of strategy in the same way as say competitive advantage Directors need to understand the link between sustainability and value in terms of risk & reward. They have to understand that the risks of waiting for a clear signal from Government in the form of clear, well designed legislation are to great. This is about a systems change. Business history is littered with examples of now defunct companies who were so focused on the short term they did not see, respond to and innovate in the face of such change. In 1930 Samuel Vauclain, Chairman of the Board of the then huge US steam locomotive company Baldwin stated that advances in steam technology would ensure the dominance of the steam engine until at least 1980. We have our modern day examples including Kodak, Blockbusters & Nokia.
However it is understandable this is where the role of advisors such as Norton Rose Fulbright’s are so critical. We as professional advisors owe it to our clients to have one eye on such changes and effectively communicate these to our clients in terms they understand. This is thought leadership; it is about communicating systems change which goes to risk, survival & reward. In a sense this is the value add clients pay market leaders for because it is about true “value creation”. If we wish to be trusted advisors who really deliver value we must not only understand such issues but critically demonstrate the value of issues such as sustainability in terms that each organisation understands; which might mean translating into sector specific metrics, risks and rewards. I have already mentioned Baldwin, the steam locomotion company who did not see the system changing and so failed to innovate. The irony is that during WWI and WWII Baldwin was able to quickly change to manufacture tanks for the war effort. So on a practical and technical level we can assume they would have been able to change to manufacture automobiles, yet they failed to see the transition to the automobile.
Let’s consider a company, which has systems change and innovation at its core. On May 26, 1896, a group of 12 purely industrial stocks were ultimately chosen to form the Dow Jones Industrial Average. Of these, only General Electric currently remains part of that index. This is to some degree a result of a culture of change & innovation. Currently GE is committed to the new green economy. Ecomagination is one of the most successful business campaigns in GEs history. Over 5 years ago GE invested $5 billion in developing green & sustainable products. The return on this investment was so successful they recently increased this investment by an additional $10 billion.
Our dedicated global sustainability and climate change team is at the forefront of the regulatory and market developments emerging’, working closely with governments, financial institutions and corporates across multiple jurisdictions. We have helped our clients to effectively navigate and respond to the risks and opportunities posed by the systems change taking place. We bring a global perspective to the international patchwork of policy and regulation that is emerging. This means we can support our clients by providing solid business advice on the choices and decisions necessary for responding to a risk, opportunity or both, locally and internationally.
When we first engage in dialogue with clients outside of existing relationships one of the key drivers that get us around the table in the first place are cutting edge ideas relevant to risk & reward in that clients business. Of course this has to be backed up by reputation & experience. This is why thought leadership is critical to us as a professional services firm. Something we take seriously and invest in. Communicated effectively and in terms which are relevant to our client’s bottom line and risk management it is what sets us apart from our competitors.
Many of the clients we work with have joined the dots and understand that sustainability is not a ‘nice to have’ but goes to the heart of what their business is about namely risk & reward. They understand the possible impact on their license to operate, business value & critically the opportunities. They are systematically addressing risks, generating value by doing so & seeing growth opportunities. In working with our clients through this transition, the upside for us is that our clients see us as trusted advisors and we often then work with them on the investments which flow from this latest business revolution. The key to our being a true trusted advisor is that we invest in both thought leadership putting us at the cutting edge of such changes combined with an industry focus.
Our dedicated global sustainability and climate change team is at the forefront of regulatory and market developments, working closely with governments, financial institutions and corporates across multiple jurisdictions. We have helped our clients to effectively navigate and respond to the risks and opportunities posed by this sector. We bring a global perspective to the international patchwork of policy and regulation that is emerging.
We have the capability to provide legal advice on climate and sustainable finance anywhere in the world.
Follow the author on Twitter at https://twitter.com/arhobley
Tags: Norton Rose Fulbright, Sustainability, CMIA, Verified Carbon Standards Association, Climate Bonds Initiative,
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Dr Adegoke Oke is an Assistant Professor and the Associate Director of the Center for Productivity, Innovation and Quality (CPIQ) at the Arizona State University, USA. He graduated from Ahmadu Bello University, Nigeria with a degree in Civil Engineering in 1986. He obtained an MBA (with Distinction) at the Cardiff Business School, University of Wales and a PhD from the Cranfield School of Management, UK winning the Directors prize for the best PhD thesis.
Tags: Operations Management, Adegoke Oke,
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Paul Polman, the chief executive of consumer goods giant Unilever, is in a league of his own when it comes to being the leader a multinational company challenging the corporate status quo.
Guardian Article on Paul Polman.
In a wide-ranging interview with Guardian Sustainable Business to coincide with the first annual update of the company’s ambitious 10-year Sustainable Living Plan, Polman calls on business leaders, politicians and NGOs to embrace systems thinking, and to recognise they cannot deal with the world’s environmental and social challenges in isolation.
Polman is scathing of companies that claim their hands are tied by fiduciary duty to maximise profits for shareholders in the short-term, arguing that this is “too narrow a model of Milton Friedman’s old thinking. The world has moved on and these people need to broaden their education with the reality of today’s world.
“I don’t think our fiduciary duty is to put shareholders first. I say the opposite. What we firmly believe is that if we focus our company on improving the lives of the world’s citizens and come up with genuine sustainable solutions, we are more in synch with consumers and society and ultimately this will result in good shareholder returns.
“Why would you invest in a company which is out of synch with the needs of society, that does not take its social compliance in its supply chain seriously, that does not think about the costs of externalities, or of its negative impacts on society?”
Polman also highlights how he is seeing off speculative hedge-funds by taking the unusual step of actively courting long-term investment funds to buy the company’s shares.
Helped by his ban on quarterly reporting to the City, Polman has managed to reduce the holding of Unilever shares by hedge-funds from 15% three years ago to less than 5%. This has, in turn, reduced fluctuations in the company’s share price.
“Historically, too many CEOs have just responded to shareholders instead of actively seeking out the right shareholders,” he said. “Most CEOs go to visit their existing shareholders; we go to visit the ones we don’t yet have.”
The Sustainable Living Plan
Polman says there has been much progress since he launched the company’s Sustainable Living Plan in November 2010. The programme seeks to double sales and halve the environmental impact of its products. There is also a commitment to improve the nutritional quality of its food products – with cuts in salt, saturated fats, sugar and calories – and link more than 500,000 smallholder farmers and small scale distributors in developing countries to its supply chain.
He is particularly proud of the fact that Unilever will reach its target of 100% certified sustainable palm oil by the end of 2012, three years ahead of schedule, and has now set a new target to track all the certified oil it buys back to the plantation on which it was originally grown.
In the field of sustainable sourcing, Polman highlights that the total agricultural raw materials now being sourced sustainably has nearly doubled in just 12 months to 24%.
Where the company is finding the going hardest relates to the targets that require consumer behaviour change, such as reducing the use of heated water in showering and washing clothes, or encouraging people to eat foods with lower salt levels.
Polman says the plan has already had a profound impact on the way the company does business.
He says: “When we look at our supply chain, we think about smallholder farmers, we think about women and employment, we think about land rights, we think about biofuels and because we think about this holistically, our plants are getting better, our sourcing is getting better, these communities have a chance of functioning.”
But on reflection, has Unilever been too ambitious with setting such far reaching targets?
“The word over-ambitious does not exist when you look at the challenges we have to solve,” he says. “We have been extremely ambitious and this has moved us out of our comfort zone. Without that we could not have seen such a step change, for example in our sourcing of sustainable agricultural raw materials.
“The issues we face are so big and the targets are so challenging that we cannot do it alone so there is a certain humility and a recognition that we need to invite other people in. When you look at any issue, such as food or water scarcity, it is very clear that no individual institution, government or company can provide the solution.
“For those targets that have been met or exceeded, I point out that this is year one of a 10 year plan so the low-hanging fruits are a little easier and it will be progressively more difficult to achieve these targets. I would give ourselves an A minus on the scorecard but would also say we have to work harder.”
A new type of leader
Polman believes that business leaders need to become more holistic in their thinking and criticises NGOs and governments who jump on individual hobby horses.
“Good CEOs in the future need to feel at ease working with multi-stakeholder groups and know how to work with them and how to align them to move things forward,” he says. “It is an enormous learning curve as no-one has been trained for this but you have to be careful that you do not get involved in a million things as the world has so many problems, but ensure that the issues you do take on link to your business model and that you stay focussed.
“You also have to make sure you do not get sidetracked by those NGOs which often have a mono issue and try to attack you because they want an end point like no animal testing or no biofuels.
“Success cannot be measured by the end state but by progress and what keeps us going is we have a holistic plan and are moving forward.”
Polman acknowledges that many old-school CEOs are stuck in their ways and are finding it difficult to operate in a world that requires collaboration and openness.
“It is not always obvious how to do that and for some people it is easier than others,” he says. “It requires a level of transparency and some are more comfortable than others doing that.”
But he points out that it is essential companies bring in new expertise from across many disciplines, such as anthropology and psychology, in order to address issues such as behaviour change.
A holistic business model
Polman says there is a fundamental readjustment going on as a result of the financial crisis, from a rules-based society back to a principles-based society.
Helping this movement is the fact that those who grew up in the 1960s are moving into CEO positions and they recognise the importance of business with purpose.
Polman says there is a small but growing number of companies who are helping to create a critical mass for change, highlighting amongst others, Patagonia, Heineken, DSM and Nike.
He also insists that much more is going on within the corporate world than is visible to the public eye: “Business leaders do not like to promise on things they are not sure they can deliver on so they would rather work discretely on projects.”
While Unilever may be making progress on its sustainability plan, is it being mirrored in the City’s valuation of the company?
Polman admits that it remains difficult for many in the financial markets to understand that the company has moved beyond old-style corporate social responsibility.
He says: “The City does not recognise it as a holistic business model, because projects like these usually represent just one component and usually sit on the sidelines of your overall business model.
“But with Unilever, the Sustainable Living Plan is our business model. So we spend an enormous amount of time explaining it to our investors.
“Does everyone get it in the City? No, and to expect it will ever happen is wishful thinking but investors will increasingly value our business on the basis of what we are doing. It is starting to happen.
“If we sustain our performance, then there is increasing trust in the management, then the attractiveness of the company can be enhanced, aligned with the shareholders you want to attract.”
The need for government action
Where Polman sees least progress is in the field of politics, pointing out that countries representing more than half of the global gross domestic product are in political stasis as a result of elections or leadership changes.
“There is a political stalemate that makes it very difficult to get real commitments out of governments,” he says.
“There is a vacuum at the policy level but our experience is that if you come with concrete proposals, such as moving from the Millennium Development Goals to a series of Sustainable Development Goals (SDGs), you can get governments behind you.
“Governments are coming out of office almost on a weekly basis so the onus is on companies to lead the way. Business is now in the driving seat on many of the initiatives such as the moratorium on illegal deforestation.”
Polman will not directly criticise the UK government but does acknowledge he would “like to see things moving forward. The deputy prime minister will be in Rio along with Caroline Spellman, and David Cameron has been asked by UN General-Secretary Ban Ki-moon to take a broader responsibility for SDGs so there is an engagement and we need to help. There is no point staying on the sidelines and being cynical.
“There is not a week goes by when I am not with policy makers. This position gives me access to these people and then it’s a responsibility to leverage that.”
Polman says that the impact of Unilever’s sustainability strategy is creating waves across the corporate sector as it is showing there is a way to do good and to make money: “We are showcasing a different business model that shows how you give to society and the environment rather than just taking from them.”
Tags: Paul Polman, Unilever, Sustainability, Strategy, MBA,
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Paul Robin Krugman (born February 28, 1953) is an American economist, Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times. In 2008, Krugman won the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography. According to the prize Committee, the prize was given for Krugman’s work explaining the patterns of international trade and the geographic concentration of wealth, by examining the effects of economies of scale and of consumer preferences for diverse goods and services. Source: Wikipedia
This event was recorded on 8 June 2009 in Old Theatre, Old Building
The global economic crisis has shaken a lot of what we thought we knew about economics. Over three consecutive evenings, Professor Krugman will cover the causes of the crisis; the deeply vexed question of how and when the world economy can recover; and the implications of the whole mess for economics and economists. Paul Krugman is centenary professor at LSE and professor of economics and international affairs at Woodrow Wilson School, Princeton University. In 2008 he was awarded the Nobel Prize in Economic Sciences.
Tags: Paul Krugman, Krugman, Economics, Recession, MBA.
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Christine Lagarde is a French lawyer and Union for a Popular Movement politician who has been the Managing Director (MD) of the International Monetary Fund (IMF) since 5 July 2011. Previously, she held various ministerial posts in the French government: she was Minister of Economic Affairs, Finances and Industry and before that Minister of Agriculture and Fishing and Minister of Trade in the government of Dominique de Villepin. Lagarde was the first woman ever to become finance minister of a G8 economy, and is the first woman to ever head the IMF.
A noted antitrust and labour lawyer, Lagarde became the first female chairman of the international law firm Baker & McKenzie. On 16 November 2009, the Financial Times ranked her the best Minister of Finance in the Eurozone. On 28 June 2011, she was named as the next MD of the IMF for a five-year term, starting on 5 July 2011, replacing Dominique Strauss-Kahn. Her appointment is the 11th consecutive appointment of a European to head the IMF. In 2011, Lagarde was ranked the 8th most powerful woman in the world by Forbes magazine. On 29 October Lagarde accepted an honorary doctoral degree from the KU Leuven, in Courtray.
Tags: Christine Lagarde, Leadership, Women, IMF, Finance, MBA,
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Michael Porter, Creating Shares Value.
Source: HBR http://hbr.org/2011/01/the-big-idea-creating-shared-value
The capitalist system is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community.
Even worse, the more business has begun to embrace corporate responsibility, the more it has been blamed for society’s failures. The legitimacy of business has fallen to levels not seen in recent history. This diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle.
A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades. They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell? How else could companies think that simply shifting activities to locations with ever lower wages was a sustainable “solution” to competitive challenges? Government and civil society have often exacerbated the problem by attempting to address social weaknesses at the expense of business. The presumed trade-offs between economic efficiency and social progress have been institutionalized in decades of policy choices.
Companies must take the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core.
The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.
A growing number of companies known for their hard-nosed approach to business—such as GE, Google, IBM, Intel, Johnson & Johnson, Nestlé, Unilever, and Wal-Mart—have already embarked on important efforts to create shared value by reconceiving the intersection between society and corporate performance. Yet our recognition of the transformative power of shared value is still in its genesis. Realizing it will require leaders and managers to develop new skills and knowledge—such as a far deeper appreciation of societal needs, a greater understanding of the true bases of company productivity, and the ability to collaborate across profit/nonprofit boundaries. And government must learn how to regulate in ways that enable shared value rather than work against it.
Capitalism is an unparalleled vehicle for meeting human needs, improving efficiency, creating jobs, and building wealth. But a narrow conception of capitalism has prevented business from harnessing its full potential to meet society’s broader challenges. The opportunities have been there all along but have been overlooked. Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face. The moment for a new conception of capitalism is now; society’s needs are large and growing, while customers, employees, and a new generation of young people are asking business to step up.
The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society. Perhaps most important of all, learning how to create shared value is our best chance to legitimize business again.
Moving Beyond Trade-Offs
Business and society have been pitted against each other for too long. That is in part because economists have legitimized the idea that to provide societal benefits, companies must temper their economic success. In neoclassical thinking, a requirement for social improvement—such as safety or hiring the disabled—imposes a constraint on the corporation. Adding a constraint to a firm that is already maximizing profits, says the theory, will inevitably raise costs and reduce those profits.
A related concept, with the same conclusion, is the notion of externalities. Externalities arise when firms create social costs that they do not have to bear, such as pollution. Thus, society must impose taxes, regulations, and penalties so that firms “internalize” these externalities—a belief influencing many government policy decisions.
This perspective has also shaped the strategies of firms themselves, which have largely excluded social and environmental considerations from their economic thinking. Firms have taken the broader context in which they do business as a given and resisted regulatory standards as invariably contrary to their interests. Solving social problems has been ceded to governments and to NGOs. Corporate responsibility programs—a reaction to external pressure—have emerged largely to improve firms’ reputations and are treated as a necessary expense. Anything more is seen by many as an irresponsible use of shareholders’ money. Governments, for their part, have often regulated in a way that makes shared value more difficult to achieve. Implicitly, each side has assumed that the other is an obstacle to pursuing its goals and acted accordingly.
The concept of shared value, in contrast, recognizes that societal needs, not just conventional economic needs, define markets. It also recognizes that social harms or weaknesses frequently create internal costs for firms—such as wasted energy or raw materials, costly accidents, and the need for remedial training to compensate for inadequacies in education. And addressing societal harms and constraints does not necessarily raise costs for firms, because they can innovate through using new technologies, operating methods, and management approaches—and as a result, increase their productivity and expand their markets.
Tags: Porter, Creating Shared Value, NGO, Not for Profit, Society, Stakeholders, Capitalism,
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Ed Gillespe is one of the UK’s most compelling voices on sustainability. The CoFounder of Futerra doesn’t just talk the talk he walks the walk. In this film he sets out a road map towards a paradigm shift in both consumer and organisational behaviour and in doing so outlines some great ideas for community engagement and localised initiatives. This film is packed with ideas so may take a few views to sink in but its worth it.
Film By “Nice & Serious”
Tags: Sustainability, Ed Gillespie, Futerra, Paradigm Shift, MBA, Marketing,
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Blue Ocean StrategyRenée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy at INSEAD, the world’s second largest business school. She is also Co-Director of the INSEAD Blue Ocean Strategy Institute. ”Blue Ocean Strategy” is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne. The book illustrates what the authors believe is the best organizational strategy to generate growth and profits. Blue Ocean Strategy suggests that an organization should create new demand in an uncontested market space, or a “Blue Ocean”, rather than compete head-to-head with other suppliers in an existing industry. Source: Wikipedia
Amazon Link: Blue Ocean Strategy, Renée Mauborgne, INSEAD,
Tags: MBA, Strategy, Blue Ocean Strategy,
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Professor Rita McGrath serves at Columbia Business School and is a recognized expert on creating strategic business growth in volatile environments. Thinkers50 awarded Mcgrath membership of their exclusive chart of the worlds leading thinkers in business and as one of the top business professors to follow on Twitter. She’s a Fellow at the Strategic Management Society.
Mcgrath argues that strategy is stuck and that most leaders are using frameworks that were designed for a 20th Century paradigm and rooted in a single dominant idea—when the role of strategy was to achieve a sustainable competitive advantage. McGrath argues however that in the 21st Century using competitive advantage as a strategic foundation is increasingly irrelevant.
McGrath suggests that the time has come to rise above the notion of sustainable competitive advantage. As an alternative, organizations must take a new route to success: seizing opportunities fast, exploiting them decisively, and moving on even before they are exhausted. McGrath applies the term transient competitive advantage to this strategy.
Steve Waygood, Head of Sustainability Research and Engagement at Aviva Investors talk to the IIRC about Aviva’s persective on the importance of providing investors and comminities with a holistic view of the company. In 2011 a coalition of institutions led by Aviva Investors, called on United Nations’ member states to develop a global policy framework that requires listed and large private companies to integrate sustainability information throughout their annual report and accounts – or explain why they are unable to do so.
The Consultation Draft of the International <IR> Framework (the Framework) was released on Tuesday 16 April 2013 in 10 global capital markets, including Sydney. A 90 day consultation period follows, ending on Monday 15 July 2013.
During the consultation period the International Integrated Reporting Council (IIRC) seeks to gain active participation from stakeholders through a series of technical workshops to encourage debate and formal feedback on the consultation questions. This feedback will be considered by the IIRC in preparation of the International <IR> Framework v1.0, scheduled for release in December 2013.
For version 1.0 of the Framework to reflect the needs of businesses, the providers of financial capital across markets and other stakeholders, we need to ensure that as many voices as possible are heard during the Consultation Draft Period. The workshop will provide an opportunity for you to deepen your understanding of the <IR> Framework, as well as <IR> in the broader context.
Tags: IIRC, AVIVA, Integrated Reporting, Paul Druckman,
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PROFESSOR TIM JACKSON
PROFESSOR OF SUSTAINABLE DEVELOPMENT AND DIRECTOR OF THE SUSTAINABLE LIFESTYLES RESEARCH GROUP (SLRG)
Author: Prosperity without Growth. AMAZON LINK to BOOK
Prosperity is understood as a successful, flourishing or thriving condition: simply, a state in which things are going well for us. Every day the system in which we live tries to persuade us – via TV news, politicians’ speeches, corporate pronouncements, inducements to consume and so on – that our prosperity is intimately linked to whether or not gross national product is growing and whether stock markets are riding high. These are the two main measuring sticks for the version of capitalism on which most countries base their economies today.
Other ways of measuring prosperity, such as employment and savings, follow these two. If GNP – the total national output of goods and services – is in recession, then unemployment will rise, and that means growing numbers of unprosperous people without salaries. If stock markets are falling, that means falling pension values, and rising numbers of unprosperous people in retirement. So what’s not to like about growth?
Tim Jackson states the challenge starkly: “Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries. But question it we must.” And that is the core mission of this perfectly timed book. Had he published it before the financial crisis, he would probably have been dismissed as another green idealist, at best. But in the wake of the crisis, more people are questioning the primacy of growth at all costs. President Sarkozy, the Nobel-prizewinning economist Joseph Stiglitz and elements of the Financial Times’s commentariat are among those now arguing that prosperity is possible without GNP growth, and indeed that prosperity will soon become impossible because of GNP growth. A new movement seems to be emerging, and this superbly written book should be the first stop for anyone wanting a manifesto.
Jackson, who is economics commissioner on the UK government’s Sustainable Development Commission, skilfully makes the relevant economic arguments understandable to the lay reader. He is not slow to simplify where that is warranted: “The idea of a non-growing economy may be an anathema to an economist. But the idea of a continually growing economy is an anathema to an ecologist.”
This is the core of the debate. Endless growth is a ridiculous notion to the typical ecologist because we live on a planet with finite resources, the mining and use of some of which is undermining our planet’s life-support systems. But the typical economist believes we can “decouple” GNP growth from resource use through the increased efficiency that tends to be intrinsic to capitalism: that we can grow our economies and reverse environmental degradation too. Tesco, as it were, can keep building more stores for ever, provided they are increasingly resource-efficient.
Jackson argues compellingly that such “decoupling” is a myth. A key area of argument, as with so much else in the current world, involves climate change. If we keep growing GNP, Jackson explains, then we fail to cut greenhouse gases deeply. This means we stoke destruction of prosperity beyond the short-term horizons – “next quarter’s growth figures” and all the rest – on which we routinely put such emphasis today.
In terms of a worldview for the new decade and beyond, this could well be the most important book you will read. Who to believe if you don’t have time? Well, I invite you not to believe the profession that so thoroughly disgraced itself with its systemic acceptance of the case for complex derivatives as a prime example of increasing economic efficiency in the financial services industry. The economists, and their friends the bonus cultists, have taken us to the brink of a collapsed global economy with that little oversight.
The last chapter of the book looks at opportunities for achieving “a lasting prosperity”. They are many and varied, and most of them – unsurprisingly – start from the grassroots. High on the list is the need for us all to consume less “stuff” and to seek a type of prosperity outside the conventional trappings of affluence: within relationships, family, community and the meaning of our lives and vocations in a functional society that places value on the future.
Is that still capitalism? “Does it really matter?” Jackson asks. “Perhaps we could just paraphrase Star Trek‘s Spock and agree that it’s capitalism, Jim. But not as we know it.” And for what it’s worth, as a creature of capitalism – a venture-capital-backed energy industry boss, a private equity investor, and an Institute of Directors director of the month – I am convinced that capitalism as we know it is torpedoing our prosperity, killing our economies and threatening our children with an unlivable world. Tim Jackson has written the best book yet making this case, and showing the generalities of the escape route. The specifics, post-Copenhagen, are all down to us.
Article Source: Guardian Sustainable Business.
Article.. People & Planet
“The perpetual growth myth … promotes the impossible idea that indiscriminate economic growth is the cure for all the world’s problems, while it is actually the disease that is at the root cause of our unsustainable global practices”, they say.
The group warns against over-reliance on markets but instead urges politicians to listen and learn from how poor communities all over the world see the problems of energy, water, food and livelihoods as interdependent and integrated as part of a living ecosystem.
All economics is based on the absurd Myth of Perpetual Growth. Yes, all theories and business plans based on growth are mythological.
Economists are master illusionists who rely on a set of fictions, fantasies and forecasts that emanate from a core magical mantra of Perpetual Growth that goes untested year after year.
And yet it’s used to manipulate the public into a set of policies and decisions that are leading the American and the world economy down a path of unsustainable globalization and GDP growth assumptions that will self-destruct the planet.
Denial? We’re all addicted to the Myth of Perpetual Growth
Yes, economists are addicted to this ideology. Trapped deep in their denial, can’t see the problem, or admit it, or if they do, they are unable to stop themselves, see past their own myopic world view. They’re mercenaries working for capitalists who pay their salaries, and expect them to support the capitalist’s bizarre Myth of Perpetual Growth.
Worse, the public also bought into the myth. Yes, you believe everything you learned in college about economic theories, all the textbooks, everything you read in the daily press, the government reports, all those Wall Street analysts’ predictions relying on studies prepared by economists with credentials.
But everything you think you know about economics … is wrong. Dead wrong. And until economics acknowledge this, the discipline is on a self-destruct path.
Why? The science of economics is not science. Yes, it looks scientific with all the fancy math algorithms and computer models that economists use, but all that’s just window dressing to make the economist look scientific and rational.
They’re not. Their conclusions are pre-ordained, fabricated, based on their biases, personal ideologies and whatever their employer wants to prove to manipulate consumers, voters or investors to buy what they’re selling.
‘What do you call an economist with a prediction? Wrong’
Don’t believe me? Go look at USA Today’s quarterly surveys of 50 economists projections of GDP growth. Invariably off by a large margin. And Barron’s Big Money poll? In past reviews we’ve seen a wide gap in forecasts by the bulls and bears.
Bottom line: Whether it’s Roubini or Roach, Kudlow or Krugman, you can’t trust the predictions of any economist. Ever. Best warning: That famous BusinessWeek editorial several years ago headlined: “What Do You Call an Economist with a Prediction? Wrong.”
Unfortunately, we live in a world of capitalists who thrive on the great Myth of Perpetual Growth, endless growth, ad infinitum, forever, till the end of time.
Tags: Growth, Economics, MBA, Economics, MBA, Perpetual Growth, Tim Jackson, University of Surrey, Prosperity Without Growth,
Further reading on this subject is available though Emerald. Just type a keyword into the search box below.
Vlearn talks to Philippa Foster Back OBE, Director of the Institute of Business Ethics, and Vice Chair of the Institute of Directors. Philippa is of the Europe’s preeminent authorities on business ethics and discusses a number of issues in this session including Tax avoidance, Bribery and the very purpose of business. The IBE helps organisations to strengthen their ethics culture to encourage high standards of business behaviour based on ethical values. The IBE assists in the development, implementation and embedding of effective and relevant ethics and corporate responsibility policies and programmes. In addition, the IBE helps organisations to provide guidance to staff and build relationships of trust with their principal stakeholders. Ultimately the institute facilitates the sharing of good practice in business ethics. The IBE is also involved in generating greater awareness of business ethics amongst students, through an annual student essay competition. The last three years of the competition have been held in conjunction with the Coubertin Olympic Awards Association in honour of London 2012 Olympics and focused on ethics in sport, something that is now being handed on to the Rio 2016 Olympics. The IBE student essay competition will commence again in 2014. Source: Wiki Also see www.ibe.org.uk Tags: Philippa Foster Back, IBE, MBA, Ethics, Bribery,
Further Reading: Type a tag word into this search box…
Balanced Scorecard Basics
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a “dashboard” of performance measures) in the early part of the 20th century.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the “marching orders” for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to ‘balance’ the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
“The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.”
Further Reading: Type “Balanced Scorecard” into the searchbox or click this link.. Balanced Scorecard
VLearn was recently commissioned by Mutuo to articulate the diversity and strength of the mutual sector despite the severely challenging economic climate. Mutuo work to bring cohesion to this remarkably robust sector and to illuminate the virtues of an ownership model which places customers at the center of its strategy.
More about mutuals…
What is a mutual?
A mutual is a business owned by its customers or its employees, or a combination of the two.
The origins of mutual business
Mutuals have been around in the UK for more than 200 years. They were established in response to the failure of the market to provide the goods or services that people needed. Mutuals exist to serve the interests of their members, and often the wider community.
The largest and best-established mutuals in the UK tend to be either co-operatives, building societies or friendly societies and mutual insurers. These types of business can trace their origins to Victorian legislation that was written to provide an alternative to joint stock companies.
Since the early 1990s, many new mutuals have been established from the conversion of existing state owned or municipally owned entities. Examples include NHS Foundation Trusts, housing mutuals, co-operative trust schools and leisure services trusts. Today the Coalition Government is keen to see the development of more of these types of businesses, spun out of public bodies.
Mutuals in the UK now account for £112bn of turnover each year, employ 1 million people and are present in many different types of business.
What about demutualisation?
Demutualisation occurs when mutuals are dissolved and their remaining value is shared out among the remaining members, or when they are converted to companies.
Mutuals were not established with the intention of demutualising them. In the 1980s, mutuals were seen as an old fashioned form of business, particularly in the financial services industry. Many building societies were converted into banks, but most of these ultimately failed in the 2008 financial crisis. Many mutual insurers were similarly converted to companies and have since been sold on or merged with other joint stock firms.
Tags: Mutuals, Cooperative, Coop, Mutuo, Peter Hunt, Ownership Models, MBA, Business, Business Studies,
Further Reading: Type “Mutuals” into the searchbox or click this link.. Mutuals Cooperatives
This short film explains Unilever’s Five Levers for Change and shows how they work in practice.
Unilever has a long history in sustainability and the use of marketing and market research to promote behaviour change. In November 2011, for the first time, they published their own model for effective behaviour change.
Unilever’s Five Levers for Change is a practical tool. It is a coherent set of principles, which, if applied consistently to behaviour change interventions, will increase the likelihood of having a lasting impact.
A huge part of our environmental impacts come from how people use our products; two thirds of the greenhouse gas impacts across the lifecycle and about half of our water footprint is associated with consumer use. So inspiring consumers to adopt new sustainable products and behaviours is fundamental to achieving the goals set out in the Unilever Sustainable Living Plan.
Source: “Nice & Serious” Agency: Futerra, Tags, Unilever, 5 Levers for Change, Sustainable Business, Consumer Behaviour, MBA,
Further Reading: Type Unilever Into Searchbox or Click this link… Unilever
Further Reading: Type “ Business Ethics ” into search bar or click the link.