The latest move by a mainstream investment firm into impact investing is being made by BlackRock. The company is preparing to launch BlackRock Impact to coordinate existing offerings that guide investment in products with environmental and social goals and to introduce new products, according to Reuters. BlackRock Impact joins initiatives at Goldman Sachs and Bank of America’s Merrill Lynch division in funding social impact bonds that address a specific need while earning returns for investors.
From the Editor
Here’s some numbers to think about . . . . $51.8 billion: the total of U.S. investment in clean energy in 2014. 40%: the amount of U.S. electricity generated by natural gas and renewable energy in 2014. 93%: the amount of new power capacity sourced from natural gas and renewable energy built in the country since 2000. 11%: the amount that the energy productivity of the U.S. economy grew from 2007 to 2014. 1.4%: the amount that U.S. energy productivity has increased since 2013.
U.S. asset managers are reporting a growing interest in socially responsible investing and environmental, social, and governance mandates from their institutional clients. That’s according to research from Cerulli Associates, a global analytics firm, as reported in Funds Europe.
BMW and Volkswagen are teaming up to build high-speed public charging stations for EVs on the East and West coasts. This follows news that Pepsico, Coca-Cola, and Dr. Pepper Snapple are sharing previously proprietary data about their truck fleets to drive better fuel efficiency. In the pharma industry, GlaxoSmithKline is working with Pfizer on the development of new HIV medications. There are more examples, but you get the idea: business archrivals are forming innovative collaborations, driven by disruptive technologies.
Since 2010, the percentage of women on the boards of the U.K.s top companies has nearly doubled, to 23 percent. This year, it is projected to reach 27%. The reason is straightforward: more diverse boards produce better returns. That makes gender diversity a business issue. Research finds that more diverse boards provide better shareholder returns. Homogenous—mostly male—boards of major companies do not provide enough innovative insights in today’s world of fast-changing practices, strategies, and models. This shift has not happened spontaneously.
Investors are looking forward to a lively 2015 proxy season after a S.E.C. ruling that allows questions about corporate governance to be aired at shareholder meetings, according to a report in the New York Times. The ruling reversed an earlier S.E.C. decision that permitted Whole Foods to exclude a shareholder proposal for large investors to nominate directors at the company’s annual meeting.
We’re all familiar with the law of unintended consequences, when an outcome is a surprise. The increasing occurrence of severe weather over Europe in December caused a jump in German wind power generation, according to the German IWR Institute. Wind turbines located in the North and offshore in the North Sea generated 8.9 terrawatt-hours (TWh), more than in any other month before. By comparison, all remaining German nuclear power plants together generated an average of 8 TWh per month in 2013.
Global Fortune 500 businesses spend 13 percent—$2.6 billion—of their $19.9 billion CSR budgets on education-related activities. Less than half of the 500 companies—218—spend anything on education-related CSR. Those are the key findings of research by the Varkey Foundation, commissioned as part of the Business Backs Education campaign.
Fast-casual food chains are eating the lunch of fast-food chains. Companies such as Panera, Shake Shack, Chipotle Mexican Grill, Nando’s, and others are reporting substantial revenue growth at a time when McDonald’s, Burger King, Wendy’s, et. al. are struggling. Combined sales of U.S. fast-casual outlets rose by 10.5% last year, compared with 6.1% for fast-food chains. There are several drivers of this development, and they derive from consumer attitudes based in qualities broadly associated with tech innovation and practices.
A real life test case that sets food value (cost of product) against food values (means of production) has just landed in California supermarkets. As of Jan 1, state law requires eggs to come from farms that offer minimum living standards for chickens. The standards, mandating more space in cages for healthier animals, affect the means of production, the laying hens, not the products: eggs. Since California consumes over 30 percent of U.S. egg production, its legal requirements affect farms nationwide.
2015 marks the start date for new regulations that will dramatically affect how companies in the energy sector do business. The most notable is the EPA’s new rule, in effect as of January 1, that governs air pollution from coal-burning power plants that crosses state boundaries. Another new air pollution regulation for fracked oil and gas wells also became effective on New Year’s Day. And in April, power plants will have to comply with the EPA’s regulations on toxic air and mercury pollution. More new rules are in in the works.
In a year-end message, Aron Cramer, President and CEO of Business for Social Responsibility, writes about two upcoming events in 2015—the UN’s new sustainable development goals and the COP21 climate talks—as major markers for progress in global sustainability. Cramer also notes a less heralded but equally momentous event: the forming of We Mean Business, a coalition of seven business organizations focused on sustainability.
It’s not news that the U.S. does not have a comprehensive national energy policy. The International Energy Agency confirms this lack yet again in its latest review of the U.S energy sector, its first since 2008. The report states that the absence of a nationally uniform plan has cramped innovation, due to uncertainties about subsidies, tax credits, and other forms of policy support.
The year-end lists that sum up 2014 and look forward to 2015 continue to roll out. SustainAbility, the think tank and strategic advisory firm, has published its list of top trends for 2015, based on events that took place this year.
We haven’t quite yet made it to 2015, but summaries of this year’s top sustainability stories are already being published. According to Loop Initiatives, the important news of 2014 includes the explosive growth of green bonds, the increased benchmarking of portfolios, the greening of supply chains, and the expansion of transparency re. ingredients in consumer goods and building products.
For the first time, the world’s nations have agreed to cut back on the use of oil, gas, and coal. Marathon negotiating sessions have resulted in the Lima Accord, named after the Peruvian city where delegates gathered last week to address climate change. Each country has agreed to pass laws to reduce carbon emissions, with goals and target dates to be determined. Plans will be submitted by March 31, then published on a U.N. website and made publicly available. The plans will form the basis for a formal agreement to be signed at a meeting in Paris later next year.
As business moves sustainability into the mainstream by integrating it into corporate practice and strategy, so business education is now integrating sustainability themes into courses and teaching approaches, and is investing in faculty development. And typical of the new mode of collaborative effort now exhibited by many companies, business schools are now working collectively through platforms like the UN-supported Principles for Responsible Management Education, the Academy of Business in Society, and the Globally Responsible Leadership Initiative.
As debate about the Affordable Care Act heats up (again) with a new Congress, its status is proving to be relatively healthy, with some areas of concern. A Gallup Poll finds that seven in ten Americans with insurance bought through the ACA’s exchanges score the coverage and care as excellent or good. Ten million more people now have coverage, and growth in spending on health care has reversed, trending downward.
Route 66, “The Main Street of America,” is going green. The historic highway, which ran from Chicago to Santa Monica, California, served as the iconic road for a popular ‘60s TV show in which two young male adventurers traveled in a Chevrolet Corvette, averaging 13 mpg (at 25 cents per gallon!). Now, the state of Illinois is investing $1 million to set up charging stations for electric vehicles along the route to promote EV use.
Do your investments reflect your values? More investors are trying to make that connection. A recent survey by TIAA-CREF Asset Management finds that 64 percent of respondents were interested in starting to invest, or investing more in socially responsible products. It’s never been easier to do so. Legacy social funds have created more and more varied products, focusing on issues from climate change to diversity. And many mainstream investment organizations have developed socially responsible options within their overall portfolios.