Ethical Corporation has grown to become one of the most respected voices in the CSR space. Ahead of its fifth annual Responsible Business Awards, director Sara Baylis and Zara Maung, editor of Ethical Corporation magazine, speak to Tom Revell about the past, present, and future of ethical business.
It is a busy time in the offices of Ethical Corporation. Later this month, on September 29, the leading intelligence provider will host its fifth annual Responsible Business Awards, bringing together the best of ethical business in Mayfair.
In the Art Deco halls of Sheraton Park Lane Hotel, the event will celebrate the successes of new approaches to sustainability and the implementation of environmental, social and governance (ESG) principles.
But the awards are just one of the many plates Ethical Corporation is spinning. Since its formation some 13 years ago, Ethical Corporation has taken various routes to spread the good word.
Its popular magazine business, which has recently gone digital, is accompanied by webinars, podcasts and other forms of interactive content, introducing readers and listeners directly to the trendsetters, the modernisers and the sharpest minds in the ethical business space.
Likewise, Ethical Corporation’s international portfolio of conferences caters for a range of industries, while its series of business intelligence reports are available for all.
The purpose of all this, explains director Sara Baylis, “is to help companies do the right thing.
“We want to help companies big and small to grow sustainably, and to ensure their social and environmental approach is responsible and sustainable. That is what we try to do through all of our products and all of our engagement with our customers.”
Those roughly 3,000 customers tend to be corporate social responsibility (CSR) executives, but also among them are NGOs, thinktanks, academics and even governments.
That so many professionals from so many sectors are taking note says much about the advance of sustainability and CSR concerns into the mainstream.
The ethical business space today is virtually unrecognisable when compared to that of 2001, when Ethical Corporation was established. In that time, the concepts of sustainability and responsibility have ditched their outsider status, donned suits, and entered the boardroom.
“Internally, we are seeing CSR becoming something that is less segregated and more something that runs through the entire culture and structure of the organization,” Baylis says.
Baylis points to the increasingly high profile of Ethical Corporation’s collaborators as evidence of this. For example, the corporation’s last responsible business summit, held in May, featured an address from Justin King, the renowned then-CEO of Sainsbury’s.
“Now CSR a key part of business, and that can only be a positive thing,” Baylis adds.
This trend is visible throughout the business world. Some 93% of the largest companies in the world now prepare sustainability reports. Examples of high profile brands putting CSR principles into meaningful practice, and seeking truly sustainable growth, are becoming more and more frequent.
Last week, Nestlé-owned coffee brand Nespresso announced plans to invest £330 million to become carbon neutral. Earlier this summer, Kellog’s and General Mills both committed to sourcing all of their major ingredients responsibly by 2020.
Asked for her favourite example of CSR in action, Baylis puts forward clothing retailer Patagonia. Patagonia’s unique, long-running campaign urges consumers not to buy its products, unless they really need them.
The company asked all customers that did buy its products to take care of them, and buy second hand clothing where possible. Somewhat ironically, the message was well received, and Patagonia’s annual sales rose by 40%.
“I found that really inspirational because it is a way of ensuring that you’re not only creating a competitive advantage for yourself, but also of informing and educating the consumer, meaning they making better choices,” Baylis says.
Zara Maung, editor of Ethical Corporation magazine and a former Guardian reporter, opts for Marks & Spencer as her favourite CSR success story.
In June, the leading multinational retailer published a new series of recommendations to improve the implementation of sustainability in its stores and renewed ethical commitments across its operations.
“Marks & Spencers are quite an exciting example at the moment,” Maung says.
“They were one of the first big retailers to start thinking about sustainability in every aspect of its business. They pioneered in a lot of areas, such as increasing supply chain transparency, and working with suppliers on the ground.”
Many factors have been at play in the rise of sustainability and CSR up the agenda, but perhaps most important has been growing consumer demand. As Patagonia has demonstrated, sustainability is good for business.
While awareness of sustainability and social issues has been raised, the market for ethical goods has been steadily expanding, growing by more than 12% in 2012, according to research from Ethical Consumer. In 2013, the Fairtrade sector grew by 14%.
“Wherever in the world things occur now, these days with social media and general transparency, corporations can’t keep things secret anymore. The impact of anything dodgy happening is that much bigger, so I think companies are more aware that consumers know what they’re up to,” says Maung.
Baylis adds, “I think that consumer demand is a key part of what will ensure that sustainability becomes completely central.
“The pressure is going to be on from consumers, and that will ensure that all companies will have to sit up and take notice.”
Another important source of pressure is investors, as demand for sustainable investments has followed a similar trajectory.
“Corporations are being encouraged to be as transparent as possible and investors are very interested in these areas,” Baylis says, “and not only because of sustainable growth and the business case, but also because of the risk perspective as well.”
Maung adds, “The financial crisis was a red flag for everyone that business needed to start doing things in a more transparent and sustainable way, otherwise the repercussions would be economic, not just reputational.
“I think a lot of businesses are trying to embed sustainability more and more, and they’re seeing the business case for doing that, because we live in an increasingly resource-constrained world.”
In the future, both Baylis and Maung optimistically expect CSR to become even more central in the corporate world, even in sectors that have historically been resistant.
“Interestingly, one of the industries you would have thought would be less receptive – the oil and gas sector and mining companies – is actually one of the industries that sustainability is becoming even more important for,” Baylis says.
This year, Ethical Corporation held a conference for the extractives industry – its best attended to date.
“There will be some companies that are slower to adapt than others, but I would say that in every industry there’s an impact that has to be considered,” Baylis adds.
“We have to be careful we are facilitating real discussions and real change, that is our part in that.”
But the responsibility for affecting real change doesn’t lie only with brands, executives and the busy employees of Ethical Corporation. As shoppers, clients and patrons we all shoulder that responsibility.
“We need to ensure that we as consumers become wise and educated because that will create pressure from one angle, and then regulation will add pressure from the other angle,” Baylis says.
“Eventually, I hope, all corporations will just see this as how to do business.”
Will Self-Driving Cars Be Better for the Environment?
Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?
But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?
The Big Picture
The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.
That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.
One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.
There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.
As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.
Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.
Make and Model of Car
Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.
On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.
The Bottom Line
Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?
Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.
New Zealand to Switch to Fully Renewable Energy by 2035
New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.
New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.
Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.
Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”
The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.
Zero net emissions by 2050
Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.
Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.
She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.
Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”
A worldwide shift to renewable energy
Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.
Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.
Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.
Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.