Winning the Sustainability Game

The latest from Sustainability Illustrated --- running through the 4 sustainability principles, or 'system conditions' for success in terms of sustainability.

You can't take a strategic approach to sustainability without knowing where you're going.  These principles provide that ultimate goal -- not in detail, because the world is too complex to predetermine exactly what sustainability will look like -- but in principle.  We know the basic mechanisms by which we are undermining the social and ecological systems upon which we depend, so by eliminating those, we can move strategically toward sustainability:



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Green Century Funds on Fossil Fuel Free Investing

Another sustainability investing video -- this one from Green Century Funds focused on individual investors:

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Put your money where your heart is

Alice Tepper Marlin on early socially responsible investing efforts via Forces of Nature:



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Sustainability Investing Myths

Curious about what Sustainability Investing is?  Think it's a fringe concept or do-gooder altruism?  Check out this very brief video from RobecoSAM for a quick primer:



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Apply Now for Master's Programs in Sustainability & A Brief History of My Recent Life

Applications are open (through Jan. 15) for two amazing sustainability master’s programs in Sweden – MSLS and MSPI (details below). Please share with anyone you think might be interested in a transformative international experience.  Here’s a quick run down of mine:

The genesis of this blog was one of these programs that I attended eight years ago.  (It was those ancient days before Facebook and Gmail were really things, and I was emailing friends & family about this amazing experience, when I realized: this is why they invented blogs).

The experience changed my life. 

It tied together all of the things I’d been trying to do for years to assemble a career in the sustainability field. It gave me a great framework and opened my eyes to whole new worlds, new ways of thinking, amazingly exciting areas of theory and research.

I met my wife. 

It tapped me into an incredibly dynamic, engaged, welcoming, and exciting international network of sustainability leaders. I met ‘gurus’ whose books I had loved and who I never figured I meet. They became thesis advisors, mentors, and friends.

We got a puppy. 

It led directly to exciting jobs and projects with huge sustainability impact, and endless opportunities for learning and growth. We got to present at conferences, meet incredible leaders. 

We had a baby.

The program left me with lifelong friends, and every since I’ve been able to look up fellow alumni in just about every part of the world, get introductions, crash in guestrooms, and make more lifelong friends.

We have a shared language and a shared understanding about the big challenges society faces, and the unbelievably exciting solutions that have the potential to improve quality of life for everyone, now and in the future.

Please check out the details below if you’re at all interested, and share with anyone else you think might be – maybe some recent college grads, or a friend thinking about a career change, or someone looking to incorporate some bigger-picture meaning into their current role, or someone already working in a sustainability-related field, who might want to recharge and get re-inspired...

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Sustainability Master’s Programmes at the Blekinge Institute of Technology

The Blekinge Institute of Technology (BTH) is a top ranked sustainability research and education institution currently recruiting talented, early to mid career professionals for its cutting-edge Masters programs. BTH is located in the beautiful coastal city of Karlskrona, a UNESCO world heritage site on the southeast coast of Sweden.

There are two MSc programs available, both suited for early- to mid-career professionals from around the world (the 450 alumni have come from 69 different countries), and taught in English.

The Master's in Strategic Leadership towards Sustainability (MSLS) program is a one-year program founded on the basic premise that a "whole-system," trans-disciplinary approach is needed to deal with the sustainability challenge.  Two integrated streams are the focus: 1) a framework for strategic sustainable development; and 2) organizational learning and leadership required for sustainability decision-making. http://www.bth.se/msls

The Master’s in Sustainable Product/Service System Innovation (MSPI) program is two-year program designed for students wishing to combine engineering competence with sustainability knowledge to help deliver new product and service systems.  Specifically, students learn to analyze sustainability challenges for an organization in a scientific manner; introduce a strategic perspective on sustainability to a company’s product innovation process; use new methods and tools to work with sustainable product and service innovation in industry; and support a transition towards a more service-oriented economy.  More info can be found at: http://www.bth.se/mspi

Both programs are delivered in a non-traditional educational setting through experiential and holistic learning methods.  Tuition is 100,000 SEK (about US$15,000), and is paid by the Swedish government for EU and EEA citizens.

Applications are due January 15th, 2014.

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"The question of reaching sustainability is not about if we will have enough energy, enough food, or other tangible resources - those we have. The question is: will there be enough leaders in time?"

-- Dr. Karl-Henrik Robčrt and Dr. Göran Broman program co-founders.

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Super Typhoon Haiyan: climate disruption is not a future concern

How to comment on such a tragedy?  First and foremost, our thoughts, condolences, prayers are with the victims.

This disaster, once again (like Katrina, Sandy, the droughts, floods, and wildfires), brings stark clarity to the idea that climate change is a challenge of morality and justice.

We know the frequency and intensity of storms will continue to increase, driven by global warming and the climate change that results. And increasingly, people are starting to believe what scientists have been saying for years, now that we're seeing and experiencing the patterns first hand; prompting the question if this will be a "turning point in how the West thinks about climate change."

For years, we in the sustainability field have been saying, "there's still time to act, if we act now." And in a sense that's still true.  But in another, very real sense, it's already too late.

It's true in that the faster we reduce and eliminate our net contributions to GHGs in the atmosphere, the better chance we have of minimizing the damage.  It's too late in the sense, that we're clearly feeling the damage, in obvious and subtle ways.  We'll keep feeling these changes for decades -- even if we stopped GHG pollution on a dime today, what we've already emitted cumulatively will continue to have an impact for decades.  So we'll need to continue to adapt and prepare for changes to come.

But we can't give up on the necessary goal of eliminating net GHG emissions.  The annual international climate negotiations -- COP19 -- are happening in Warsaw Poland right now.  The lead negotiator from the Philippines, Yeb Sano, announced in a powerful video (below) that he will voluntarily fast until meaningful pledges are made.

You can take a small, simple action now to help support his effort by signing Yeb Sano's petition to Stand with the Philippines and demand significant progress in Warsaw.



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Stranded Carbon Assets

The Generation Foundation released today a new report: Stranded Carbon Assets: Why and How Carbon Risks Should Be Incorporated into Investment Analysis (pdf).

It builds on the logic that globally, we have a fairly accurate idea of the maximum amount of carbon we can add to the atmosphere and still have a 50/50 chance of avoiding temperature rises of 2 degrees Celcisus.  To stay within that budget we can't burn more than one-third of known reserves by 2050.

This means that 2/3 of known reserves -- which are baked into the valuations of fossil fuel companies -- will need to be stranded, one way or another, to even have a 50% chance of avoiding really devastating impacts of climate change.

The report lays out three ways these assets may become stranded:

1. Regulation -- there are many forms of regulation being pursued around the world limit carbon emissions, but to date most investors have focused primarily on the big, international climate agreements, which have been stalled. Sub-national and indirect regulations represent investment risks that are under-appreciated by most investors.
2. Market forces -- improvements in renewable energy and the potential for breakthrough innovation can cause shifts in capital away from fossil fuels
3. Sociopolitical pressures -- even if they don't lead to comprehensive regulation right away, sociopolitical pressures threaten carbon-intensive business's license to operate 

If the status quo is maintained, the report argues, artificially high valuations of carbon-intensive assets will continue to grow, creating a 'carbon asset bubble' that is not sustainable. 

The report suggests that investors should: 

1. Identify carbon risks across all asset classes in their portfolios
2. Engage corporate leaders on disclosing and mitigating their carbon exposure
3. Diversify their holdings into companies that will bring about a low-carbon economy
4. Divest from fossil fuel intensive holdings

Examples of growing support for regulatory action are everywhere.  The EU Emissions Trading Scheme has been established for years, California has carbon legislation on the books in AB32, as do the Northeastern states through the Regional Greenhouse Gas Initiative. China is launching regional carbon markets, and this summer President Obama laid out plans to limit emissions in the US. Last week, Oregon, Washington, California and British Columbia (which has its own carbon tax) announced plans to cooperate on developing climate protection schemes. 

While we don't know for sure how we will end up limiting carbon emissions, we do know we'll have to if we want even a 50/50 chance of avoiding unthinkable impacts, which will be costly not only in financial terms, but also with regard to loss of human life and suffering.  

The report includes an excellent analysis of how indirect impacts -- like water scarcity -- also pose risks to carbon-intensive assets. Oil and gas extraction and coal power plants rely on large amounts of water, and will will become more costly and difficult as water scarcity (exacerbated by climate change) continues to grow. 

Renewable energy is becoming more competitive, supported by government policy and market forces. In 2007, the installed price of solar was $8 / watt, compared to just $3.05 / watt in the second quarter of this year. 

Perhaps most importantly, the report stresses the potential costs of maintaining the status quo. Most businesses will suffer great losses in a future defined by climate havoc: "Inaction, therefore, is a systemic and salient risk to all investors." 

In laying out options for actions investors should take, the report makes the case for evaluating carbon risks in portfolios and engaging with corporate executives and boards (leveraging tools like the Sustainability Accounting Standards Board (SASB); the Carbon Disclosure Project (CDP); and Integrated Reporting).  It quotes Mercer's Responsible Investment group in encouraging investors to "think about diversifying across sources of risk rather than across traditional asset classes." 

And it offers a nuanced approach to divestment from a risk-mitigation perspective, as opposed to a moral perspective emphasized by activist campaigns calling for divestment, noting that it's not "all or none" when it comes to divestment. There is a "hierarchy of fossil fuel asset stranding" and investors would be wise to recognize that and abandon positions with the highest risks. 

This section ends with a paragraph focused on college and unviersity endowments, which is worth quoting extensively: 

"We fully recognise that divesting can be complicated, both ethically and logistically, for asset owners. College and university endowments, for example, must prioritise intergenerational equity to ensure future students have at least the same resources afforded to current students in order to maintain and enhance the calibre of the institution. Additionally, many of these endowments participate in comingled investment vehicles, delegating complete control of asset selection to the hired fund managers. However, the investment committees of these endowments must not dismiss divestment due to the complexity inherent in outsourcing fund management since carbon risk is significant and only growing... Furthermore, academic institutions in particular are in the unique position to heighten the level of scholarly discourse around fossil fuel risk and the transition to a low carbon economy by integrating these topics into the classroom and across campus life."

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