Carbon, Modern Slavery, DE&I, Unilever, Lecture

1. Carbon accountants unite

They say you can’t manage what you can’t measure, and this is particularly true with greenhouse gas emissions. After all, you can’t see these emissions, they’re embedded in everything bought and sold, and defining who’s responsible for them isn’t straightforward.

And it’s fair to say that the whole field of corporate carbon accounting that has set out to do this is in its relative infancy. Important strides have been made since the Greenhouse Gas Protocol, the organisation behind the world's most widely used greenhouse gas accounting standards, published the first version of the Corporate Standard in 2001. Meanwhile, an industry has been developing to support businesses through the implementation of the guidance. Despite this and given the challenges in measuring emissions, the standards still leave room for interpretation. And the need for urgent, informed action has never been clearer.

That’s why we’re particularly excited to be a founding member of the Carbon Accounting Alliance, a group of organisations collaborating to solve challenges in the carbon accounting industry. It has launched publicly this week with the goal of encouraging greater oversight and professionalisation of carbon accounting to accelerate the effectiveness of the industry. This will see members share learnings and best practice and engage collectively as an alliance with industry, regulators and international standard setters to accelerate the development and adoption of carbon accounting that incentivises meaningful action.

We believe that collaboration is essential for tackling the climate crisis, across businesses, policymakers and industry groups alike. We look forward to being part of this important association to advance the measurement and management of one of the defining issues of our time.

2. Modern slavery scores on the doors

Earlier this week, CCLA Investment Management launched its Modern Slavery UK Benchmark to assess how the top 100 UK companies by market capitalisation are tackling modern slavery. Modern slavery is an abuse of human rights which continues to be rife, despite attempts of the Modern Slavery Act 2015 and SDG 8.7. An estimated 50 million people worldwide currently experience modern slavery, with 28 million in forced labour and 22 million in forced marriages. And businesses are not immune - modern slavery is often tied up in their global operations and supply chains.

The CCLA Modern Slavery Benchmark evaluates the extent to which companies have complied with government legislation, and the extent to which they have found, fixed, and prevented modern slavery. To measure this, companies were reviewed on their 2022 public facing modern slavery statements and other disclosures (annual reports, human rights policies etc), scored, and categorised into performance tiers. Some of the top performers included Tesco, Next and Kingfisher in Tier 1, and NatWest Group was the highest-ranking financial services provider, appearing in Tier 2.

The benchmark goes beyond what has come before, providing a framework for businesses to structure their management and disclosures on modern slavery. It presents a series of recommendations on the need for strong governance, disclosure of detailed operational and supply chain risk assessments, disclosure of suspected cases of modern slavery and remedies to this, and the adoption of responsible procurement practices. The benchmark also enables learning through the sharing of best practices, leverages competition between businesses, and highlights the potential for businesses to act. From that perspective, there is lots to learn for any business interested in addressing these issues more effectively.

Importantly, the benchmark enables greater accountability and transparency, allowing investors and stakeholders to assess whether companies are effectively managing modern slavery. The CCLA says it will vote against the financial statements and annual accounts of all companies in Tier 4 or 5 and encourages other investors to do the same. This is a great example of investors putting their money where their mouth is. You can find out more about the benchmark here

3. Hungry for DE&I?

As the old saying goes, it’s never too early in the day to think about corporate activism, especially when there’s breakfast involved. So, if you’re free on the morning of the 12th of December, come along to our ESG Breakfast Briefing, an event co-hosted with our friends at Echo Research, where we will discuss what being a progressive organisation looks like when faced with a growing tide of scrutiny surrounding corporate activism.

Joined by a panel of guests, including Dr Aerial Elllis, US-based and internationally recognised DE&I thought leader, podcaster and author, Alexander Rhodes, head of Mishcon Purpose, the specialist sustainability branch of Mishcon de Reya, and our very own CEO Giles Gibbons, we’ll gain a US, legal and business perspective on how to navigate the fast-changing DE&I landscape. We’ll unpick the growing trends of social washing and social hushing, provide insight and expertise into how organisations can implement robust DE&I policies and share meaningful responses to the increasingly complex social and geopolitical climate society currently faces.

If you’re getting hungry just thinking about it, there are a few spots left and we’d love to see you there. If you’re interested in attending, please get in touch with Kerry ([email protected]) for further details.

4. Cool move

In a refreshing move, Unilever has shaken up the ice cream industry by announcing that it will grant a free non-exclusive license to industry peers for 12 reformulation patents. The goal? To propel the sector towards energy-efficient freezing by warming up its last mile ice cream freezer cabinets from -18° to -12°C.

Unilever's research at Colworth, its Global Ice Cream R&D Centre, and successful pilots in Germany demonstrated a remarkable 25% reduction in energy consumption per freezer cabinet by operating at the warmer temperature of -12° C – all by reformulating ice cream products that remain stable at this warmer temperature. This not only benefits the environment but also makes these freezers more cost-effective.

What's more noteworthy is Unilever's commitment to collaboration over competition. By sharing these patents with other ice cream manufacturers, Unilever aims to tackle emissions industry-wide. Emissions from retail ice cream freezers constitute 10% of Unilever's greenhouse gas footprint. So if you were to add up all the big ice-cream players, sharing and scaling this approach could make a real difference. The initiative also aligns with Unilever’s Climate Transition Action Plan, striving for net-zero emissions across its value chain by 2039.

Unilever's move sets an example of a business recognizing the deeper challenge of climate impact and actively sharing intellectual property for the greater good. And whilst we have focused on Unilever, Chivas Brothers has also recently made its design and implementation insights ‘open source’, in its deployment of efficient heat recovery technologies within the whisky distillation process.

This kind of collaborative spirit marks a significant stride towards achieving collective sustainability goals and a mindset that others can gain and learn from.

5. Capital idea

In 2015, the world set 17 Sustainable Development Goals (SDGs) to be achieved by 2030. Now, seven years out from that target, there is a real danger that these goals will not be met – despite the fact that we have many if not all of the solutions we need to achieve them.

Next Monday, Ketan Patel, founder and chairman of Force for Good (and friend of Good Business), will be speaking about these solutions as part of the Lord Mayor of London’s speaker series. Titled Capital as a Powerful Force for Global Impact, Ketan’s speech will explore the work that Force for Good has done to identify the pathways to achieving the SDGs.

Without giving away too many spoilers, Force for Good’s research focuses on six solution areas to harness to achieve the goals: policy, public sector activities, infrastructure, technology, private industry and financial services. They’ve further identified just 15 initiatives which act across different combinations of these solution areas and which, if deployed in full, could address 70% of the goals. Critically, there is sufficient capital to deliver these solutions, but deploying it will require reallocating exiting investments, mobilising new capital and reprioritising spending.

We won’t say any more than that, but if your interest is piqued, dial into Ketan’s presentation at 11am on Monday, to learn more about capital as a force for good in achieving the SDGs.?