July 12, 2018


“Total Impact Valuation” – Monetizing the Enterprise’s “Cost-Benefit Analysis” of the Impact on Society? This is for CEOs – Advice From The Conference Board

Today’s question for corporate CEO’s:  Have you examined your company’s “Total Impact Valuation,” a new approach being advanced by The Conference Board, wherein the enterprises’ impact on society is monetized (cost/benefit evaluated and value attached)?
A small group of companies is doing these exercises. Think of their efforts to date as expanding the usual reporting of “Input/Output” to seriously consider (1) Outcomes, (2) Impacts, (3) Cost and Benefit to Society (and to the company). 

Such firms as BASF (the German chemical giant), cement industry leaders Holcim/Ambjua Cement and LafargeHolcim, Samsung, Akzonobel (materials), ABN AMRO (Holland, financial services), Volvo (vehicles), and Argo (materials, Colombia) have been doing something along these lines and reporting results for a few years now on web sites, in sustainability reports, in financial statements, in a “total contribution report” or “value-added statement”, and by other means.

Some of these disclosures are third party assured (Argo’s is by Deloitte) and otherwise guided; the big accounting firms are involved (PwC and KPMG included).

This appears to us to have the potential to take corporate sustainability reporting to expanded (new) levels for at least the publicly-traded large caps - that is, if enough investors jump aboard the concept and ask for the information.  (Think about public discussion of the company’s “plus or minus” impact on society beyond the fences.)

Thomas Singer, Corporate Leadership research leader at The Conference Board, presents findings of his sampling of firms (those identified above) and shares his perspectives on the concept in Chief Executive Magazine – it’s our Top Story for you this issue.  BASF shares its “Value to Society” model (there’s a link to this in the article).  The company, explains Singer, monetizes more than 20 different types of environmental, social and economic impacts, including direct and indirect suppliers and even customer industries. 

Author Thomas Singer turns out a good amount of strategic advice to company leaders and has been focusing more in his Director Notes on ESG and corporate sustainability.  There’s links to his papers and publications for you in the link.

A major drawback here in the U.S.A.: there is no standard benchmark for measuring progress or lack of, and to guide reporting; there is in turn no way to compare company “A” to “B” for investors, ratings analysts and others.

So what do you think – is this a “we’re a long way from Kansas, Toto” moment for corporate leaders in terms of expectations of shareholders and stakeholders for what the companies will share in their disclosures of the future?  (The “Kansas” reference being the bad old days practices of chemicals and other companies “externalizing” costs to society for environmental mismanagement and minimizing the actual costs of clean up in financial reports.)

The practice got underway in Europe – and we will be watching to see if U.S.-based public companies pick up on the concept. Especially those where their foreign peers have the modeling and techniques underway.  That is what happened with corporate sustainability and ESG reporting over time.

Top Stories

CEOs Need To Put This Sustainability Trend On Their Radar
(Tuesday - July 03, 2018) Source: Chief Executive - What if America’s CEOs could understand the full financial impact their company has on society? It could make them rethink their game plan for how they prevent workplace accidents, lessen air pollution, manage waste – the list...

Sustainability: Forward Momentum! For Your Attention: From the The Editors' Global Scans

At Retail…

More Retailers “Stepping Up” On Supply Chain Sustainability
(Wednesday - June 27, 2018) Source: Post & Parcel - In a statement issued today (26 June), CDP said: “The world’s largest retailer, Walmart, has just been joined by three more of the top 20 retail companies – CVS Health, Target Corporation and Tesco – in collecting data from...

Sustainable Fashion Only Works When It's Inclusive
(Thursday - June 28, 2018) Source: Elle - When talking about sustainability, we must address the elephant in the room. 

In the Business Sector…

Embracing Sustainability in the Business World
(Thursday - June 28, 2018) Source: ZME Science - Sustainability is a buzzword that’s thrown around a lot when it comes to being environmentally friendly, but it’s often overlooked in the business world. We set computers aside when we don’t need them anymore, toss toner... 

MCI puts sustainability first in annual report
(Thursday - June 28, 2018) Source: Conference News - Events agency MCI has released its 2017 annual sustainability report, which highlights the important role that environmentally friendly and inclusive policies play in their business. 

In Culture and Entertainment…

Making Sense of Sustainability in Culture: Movies, Marketing and Metaphor
(Thursday - June 28, 2018) Source: Sustainable Brands - Pop-culture is a great bellwether of consumer beliefs and values. Join Carrie Snyder and John Rooks as they deconstruct movies, music and metaphors as a way to explore the meaning of sustainability in modern culture. Takeaways... 

In Food, Beverages, Agriculture…

Power & politics in cocoa: Are chocolate’s colonial roots moulding sustainability?
(Thursday - June 28, 2018) Source: Confectionery News - The European and US chocolate industry holds power in cocoa and is able to set the agenda for sustainability on its terms, says Dr. Kristy Leissle 

Opinion | 50 Groups Denounce Roundtable on Sustainable Beef as Greenwash
(Friday - June 29, 2018) Source: Food Tank - A coalition of 50 environmental, consumer, public health, justice, and animal welfare groups representing millions of constituents are slamming the United States Roundtable on Sustainable Beef’s new “sustainability” framework for..

Critics Respond to U.S. Roundtable for Sustainable Beef Framework
(Friday - July 06, 2018) Source: Drovers - Fifty organizations have signed-on to a letter outlining flaws they see in the U.S. Roundtable for Sustainable Beef's sustainability framework. ( U.S. Roundtable for Sustainable Beef ) 

Palm oil sustainability group suspends Nestle on failure to submit report
(Friday - June 29, 2018) Source: Reuters - Nestle’s membership of industry watchdog the Roundtable on Sustainable Palm Oil (RSPO) has been suspended as the Swiss food group failed to submit a report detailing how it would ensure the use of certified... 

And from around the globe…

Asian trade bucks the protectionist trend – but struggles with sustainability 
(Monday - July 02, 2018) Source: Asian Correspondent - The Hinrich Foundation Sustainable Trade Index, released last week, believes Asia is in a prime position to help lead and sustain the global economy’s commitment to free and fair trade. But stresses the importance of sustainable... 

10 sustainable products you need in your life
(Monday - July 02, 2018) Source: Eco-Business - According to a recent study, 75 per cent of people in Asia Pacific now say they tend to choose products that are environmentally responsible. 

In sustainability search, Kenya studies the unknown depths of its aquifers
(Tuesday - July 03, 2018) Source: CS Monitor - For the past two years, researchers have been studying Kenya's underground water resource system with the ultimate aim of determining sustainable water practices in a country struggling to meet water demand.  

Going Green to Make Green: The Economic Case for Sustainability
(Thursday - July 05, 2018) Source: ThomasNet - Sustainability initiatives — which focus on promoting and expanding healthy business systems by addressing various environmental, social, and governance (ESG) factors — have become a key focus for consumers and businesses alike.... 

How Technology And Sustainability Converge In The New Home Marketplace
(Thursday - July 05, 2018) Source: Forbes - Today's homebuyers expect sustainability-focused measures and smart home technology to be integrated into any new-construction home they consider. In this highly competitive new home market, builders and developers must...

The Lighthouse of Sustainability
(Thursday - July 05, 2018) Source: The Market Mogul - On the 4th of November 2015, the Chair of the World Federation of Exchanges‘ (WFE) Sustainability Working Group (SWG), Evan Harvey, publicly announced the release of the latest WFE recommendation on ESG reporting

Investors: here's what a sustainability leader looks like — and acts like
(Friday - July 06, 2018) Source: GreenBiz - Companies are motivated to lead on sustainability for a number of reasons including cost savings, risk management and improved reputation. Additionally, the stakeholders companies most want to impress are their customers and... 

Our Focus This Week on A Range of ESG Topics & Issues – More Things For You to Think About 

What is sustainable, anyway?
(Thursday - June 28, 2018) Source: Irish Times - A term bandied about with alarming regularity, but its meaning is less than clear...

China Emits More Carbon Dioxide Than The U.S. and EU Combined
(Tuesday - July 03, 2018) Source: Forbes - China's emissions passed those of the U.S. in 2005, and by 2012 had surpassed the combined contribution of both the U.S. and the EU. Should recent trends continue, China will be responsible for the most atmospheric carbon dioxide... 

WWD List: These Are the 25 Highest-Paid Executives in Fashion
(Tuesday - July 03, 2018) Source: WWD - A WWD study of executive pay at fashion’s top companies turned up 25 bold-faced names in retail, fashion and beauty who made more than $10 million last year, including salary, incentive pay, the value of stock and option awards...

Global warming could raise temperatures TWICE as high as previous estimates, with tropical forests set to turn into fire-ravaged savannas, new research warns
(Friday - July 06, 2018) Source: Daily Mail (UK) - Temperature spikes triggered by global warming could be double what earlier climate models had predicted, troubling new research has warned. 

The power of more than one woman on a board
(Tuesday - July 03, 2018) Source: CNN - Within a boardroom, one woman — or even two — isn't enough to shift a culture, research shows. Although a majority of companies in the S&P 500 have at least one woman on their boards, only 25% have more than two, according to a... 

Headlines for You From the Corporate Sector - Both Positive & Negative 

There's a Lot Going On...

Oshkosh Corporation Releases Fiscal 2017 Sustainability Report
(Wednesday - June 27, 2018) Source: BusinessWire - Oshkosh Corporation (NYSE:OSK) a leading designer and manufacturer of specialty vehicles and vehicle bodies, released its fifth annual Sustainability Report, demonstrating how the Company continues... 

Corbion links sustainability performance to interest rate of its new EUR 300 million Revolving Credit Facility
(Friday - June 29, 2018) Source: NASDAQ - Corbion today announces that it has signed a new five years syndicated Revolving Credit Facility ("RCF") with an interest rate that will, amongst others, depend on the company's year-on-year sustainability performance improvement. 

Kimberly-Clark Announces Progress to Sustainability 2022 Goals
(Tuesday - July 03, 2018) Source: Waste360  - Kimberly-Clark Corporation announced its progress toward achieving its Sustainability 2022 strategy to create social, environmental and business value. 

MCI puts sustainability first in annual report
(Thursday - June 28, 2018) Source: Conference News - Events agency MCI has released its 2017 annual sustainability report, which highlights the important role that environmentally friendly and inclusive policies play in their business.

Nestlé Offered Permit To Continue Taking Water From California Stream
(Thursday - June 28, 2018) Source: NPR

Disney wins antitrust approval to purchase most of Fox
(Thursday - June 28, 2018) Source: CNN

Amazon could radically change how you get prescriptions
(Friday - June 29, 2018) Source: CNN

Foxconn breaking ground on Wisconsin plant it received $4 billion to build
(Friday - June 29, 2018) Source: CNN 

Lawsuit alleges Hormel, other companies, illegally inflated pork prices
(Friday - June 29, 2018) Source: Star Tribune

Facebook reveals data-sharing partnerships, ties to Chinese firms in 700-page document dump  
(Monday - July 02, 2018)
  Source: The Hill 

GE's Latin American CEO, 21 others, arrested in Brazil for fraud
(Thursday - July 05, 2018) Source: Yahoo.com

Credit Suisse to pay $77M to settle corruption charges
(Friday - July 06, 2018) Source: NY Post 

News & Opinion: Asset Managers, Sovereign Wealth Funds, Pension Funds

How Norway’s sovereign wealth fund protected UK jobs after the 2008 crisis
(Wednesday - June 27, 2018) Associated Profiles : Government of Singapore Investment Corporation (GIC) Source: blogs.lse.ac.uk - and the Government of Singapore Investment Corporation. The quality of governance and transparency of SWFs varies, but the NGPF-G is typically seen as having the highest standards of any SWF. In line with this, it publishes its..

City pension funds stumble to post weak 1.7% return in past year
(Monday - June 25, 2018) Associated Profiles : New York City Comptroller’s Office: Bureau of Asset Management Source: New York Daily News - The City's pension funds posted tepid returns of 1.7% over the last year, Controller John Liu said Tuesday. The anemic returns compare with an average of 6.7% over the past 10 years. The pension fund lost money in 2008 and 2009...  

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