@Risk

About a year ago, Maersk was named Sustainable Shipping Operator of The Year in recognition of the efforts the company has made to reduce the environmental impact of its business operations. In particular, the award recognized Maersk’s pioneering efforts on the sometimes controversial shipping method known as “slow steaming.”

As the name implies, slow steaming ships travel at reduced speeds, saving fuel and reducing greenhouse gas emissions. The approach is relatively straightforward and quite effective, and in fact, slow steaming has proven so successful that now many major companies have throttled down even more. These days, they’re “super-slow steaming” and traveling at speeds of only 12 knots (about 14mph).

While there’s no doubt that super-slow steaming saves fuel, cuts costs and lowers emissions for shippers, I have to wonder: What is the effect on buyers? How does slow steaming impact order cycle times, inventory management and supply chain efficiency, in general? (more…)

Less than one in five companies see biodiversity as an important business issue, and only two out of the world’s largest 100 companies manage it as a strategic risk.

Yet, a new analysis by PricewaterhouseCoopers concludes that no sector or business in the economy will escape unaffected by changes to the availability of environmental resources for business and consumers.

The research, which was conducted as part of a landmark study by the UN Environment Programme (UNEP), puts the economic impact of biodiversity loss at between $2-4.5 trillion annually and says this impact will be felt in product pricing, availability of products and financing, and supply chain disruptions for consumers, business and government. For example, the study lists water used in food and drink production, timber for packaging, furniture and paper, productive land for fruit and vegetables, and fibers for clothes, as just some of the biodiversity and ecosystem ‘services’ whose economic value and protection are currently at risk. (more…)

As I have posted about before, water scarcity is becoming an increasingly imperative strategic issue for global businesses. In fact, the Organization for Economic Cooperation and Development forecasts that 47 percent of the world’s population will be living in areas of high water stress by 2030 unless new water stewardship policies are adopted.

This week, Ford Motor Company became a notable corporate leader in this important sustainability and risk arena with the announcement that it has become the first automaker to join the CDP Water Disclosure initiative. (more…)

Water. We take it for granted. But, according to a new global opinion poll conducted by GlobeScan and SustainAbility, over the next decade, virtually every industry in the world will need to adjust strategic planning, production practices and business models because of increasing competition for this essential resource.

More than 1,200 sustainability experts from more than 80 countries participated in the Sustainability Survey Poll on Water, and the results show that these leaders think multi-faceted engagement with water will be required to effectively manage businesses and communities in the future. For instance, in an era of water scarcity, new business practices will need to stress water conservation and efficiency, ecosystem protection, public education and engagement. Companies also will need to anticipate market pressure to appropriately price water. (more…)

Yesterday, the U.S. Securities and Exchange Commission issued ground-breaking guidance that clarifies what publicly-traded companies need to disclose to investors in terms of climate-related material effects on business operations. These ‘effects’ include new emissions management policies, the physical impacts of changing weather, and/or business opportunities associated with the growing clean energy economy.

This new guidance, the first economy-wide climate risk disclosure requirement in the world, comes after more than a dozen investors managing over $1 trillion in assets –plus Ceres and the Environmental Defense Fund –requested formal guidance in a petition originally filed with the Commission in 2007, and then supported by supplemental petitions filed in 2008 and 2009.

“Today’s vote is a clarion call about the vast risks and opportunities climate change poses for US companies and the urgency for integrating them into investment decision making,” says Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, a network of 80 institutional investors with $8 trillion in collective assets. “The business risks of climate change cannot be ignored. With this guidance investors can make more sound decisions based on better information – and businesses will have a level-playing field with clear standards and expectations for disclosure.”

The SEC decision is the latest in a series of major policy actions over the past year requiring more robust climate risk disclosure across various industry sectors. Those actions include: (more…)