Giles Gibbons

Good Business - Sustainability | Strategy | Impact

May 26, 2023

1. Non-emissions accounting

Investors interested in “green” investments have typically focused on carbon emissions produced by investee companies, but it’s quite possible that in doing so they are missing a golden opportunity to support the companies at the heart of the net zero transition.

A research paper from AXA Investment Managers a few years ago highlighted this: if you were to invest in companies on the basis of their emissions intensity, you would end up with a select pool of service-based companies. These companies may already be lean from an emissions perspective, but these won’t necessarily be at the forefront of delivering a net zero economy, and decarbonisation.

AXA instead pointed towards a ‘carbon footpath’, a more holistic approach than the relatively static carbon footprint measure, that considers companies’ commitment to reduce their own and society’s emissions in the future.

The idea of contributing to the broader shift to a net zero economy is encapsulated by the concept of ‘emissions enablement’, ‘scope 4’ or ‘scope X’ emissions, which goes beyond direct and value chain emissions to reflect a company’s capacity to create or catalyse emissions reductions (or increases) outside their value chain through their goods and service – for example, manufacturing a hydrogen electrolyser generates emissions (scopes 1 to 3) but once up and running, it is responsible for many many more tonnes of avoided carbon emissions by replacing fossil fuels. But until now, this has been hard to assess and report upon.

It’s for this reason that a group of eleven investors including AXA has launched a call for expressions of interest (CEI) to develop a database on avoided emissions. This database will aim to give investors the information they need to make a broader assessment of companies’ contribution to the transition to net zero, and therefore reorient financial flows towards companies enabling the decarbonisation of the economy and supporting innovation in this area.

Creating a database of comparable avoidance emissions data is no small task: it’s challenging to account for emissions that have been produced, but even harder to account for emissions that specifically haven’t been produced. There are challenges in defining an appropriate baseline scenario and attributing avoided emissions to multiple businesses, and how specific these elements can be to individual businesses.

But having a clearer view of the broader climate impact of businesses is essential. After all, climate change is a global crisis and reaching net zero is an economy wide transition. We’ll follow with interest to see how this evolves.

2. You had to be there

I’m sure you’ve experienced the joys of an in-person conference – meeting like-minded peers, hearing from big names in your field, and coming away with a renewed sense of excitement about work. Nevertheless, the shift to online conferences during the pandemic led to discussions over the relative benefits and drawbacks of in-person versus virtual meetings. From a carbon perspective, online conferences have much lower associated emissions than their in-person counterparts, particularly those involving international delegates. Furthermore, there are also clear benefits to accessibility and inclusivity of online rather than in-person events.

However, a recent study (not yet peer reviewed) highlights a potential pitfall of virtual conferences – namely, that attending a talk in person appears to make a much stronger impression than simply reading about a talk, or watching back a recording of a session you were unable to attend live. Using data from a conference schedule planning app, researchers analysed talks 2,404 users attended at 25 conferences held between 2013 and 2020. They then analysed which presentations attendees had cited in work published within two years of the meeting. After taking other effects into account, the authors found that meeting attendees cited papers 52% more often when they saw them in person than when they didn’t.

Interestingly, this effect held for talks attendees hadn’t planned on turning up to, described by the study authors as ‘serendipitous diffusion’. Nearly 22% of the overall information dissemination brought about by the conferences studied were the result of serendipitous diffusion, demonstrating the value of in-person conferences for coming across information that you might not otherwise have discovered.

It’s clear that in-person, virtual, and hybrid conferences all have pros and cons. In the end though, the point of such events is to share insights that get used – and for this to succeed, there really is no substitute for being in a room together.

3. Data for good

Your business has (we hope you have!) a Data Protection Officer, and data privacy policies that comply with GDPR and that ensure that you are looking after personal data responsibly and effectively. But what about the way in which you – legally – use that data? How do you use data from other sources, including AI technology, to drive decision making? Are you using biased data sets that may create biased decisions? Are you thinking about privacy, transparency and accountability when you use data? Are you telling people how you are using data to make decisions about them? Are you inadvertently sharing confidential IP when you upload data to ChatGPT?

If you aren’t thinking about data ethics, as well as data responsibility, you really should be. Given the impact your use of data has on your stakeholders and the consequences to the business of doing it poorly, data ethics is as much a material sustainability issue as D,E&I or carbon management.

While few of us are data ethics experts and even fewer of us understand much if anything about how large language models such as ChatGPT work, we need to face up to the changes that are taking place, because they have profound consequences we don’t yet fully understand, but that we know will affect us all, as consumers and as business leaders. As the very good, and very useful, new Good Data Guide from data experts Profusion and law firm Pinsent Masons points out, technology moves faster than the law, so the Guide – which sets out to provide a practical toolkit for all aspects of data ethics - will be updated regularly.

The guide emphasises the importance of culture and of making this everyone’s responsibility. Education is key, as is recognising that while technology can do things we are simply unable to do without it, in the end the moral responsibility for making good choices rests with us. If we want the trust of the people we interact with, and we want to use data in ways that improves rather than holds us back, these good choices are essential. The guide emphasises principles and simplicity, and the importance of building on existing policies, rather than building new ones. As such, any organisation that collects and uses data – which is essentially every organisation - will find something of interest in the Guide.

4. Dishing out solutions

An estimated 8-10% of global carbon emissions arise from food waste. What if there was an easy way to help people waste less when eating in hotel buffets or workplace canteens? Enter this guide by the The Behavioural Insights Team. And while food waste in your workplace canteen may not be your biggest environmental headache, there are some clear and easy wins you can implement that can start bigger conversations.

The guide reports on three simple and (low cost!) nudges that can be implemented in tandem or separately, which resulted in significant reductions in food waste in the settings where they were trialled. First was messaging, by helping diners think about the problem posed by food waste by strategically placing posters or leaflets. Second was advocating for smaller portions. Is someone really going to eat the four sausage rolls and three mini croissants they picked up at the buffet? Encourage diners to start small by showing “demonstration plates” that model ideal portion sizes, and let them know they can go back for seconds. This will help them carefully consider what they put in their plate. And third was feedback: using transparent bins that showcase just how much food has been wasted already makes the problem more visible and so all the more tangible.

We love this guide because it is a ready to go how to manual. Any organisation can pick it up and get started with their programme and every step is outlined - from securing management buy in to measuring its impact, even down to sample emails, surveys, and posters you can adapt.

At Good Business, we know first-hand the power of an effective behaviour change campaign; we see it all the time through our work on SKY with the Gates Foundation. We also understand how powerful such focused campaigns can be for supporting an organisation's efforts to reduce their carbon impact in other areas, and have witnessed the impact that these visible, tangible, relevant campaigns can have on the broader conversations around carbon and the environment in the workplace. So we’d encourage you to pick up the guide, read it, and take it to your catering team. No time (or food) to waste!

5. The Goods: Collective action

If, like us, you have ever wondered how you can use the resources at your fingertips to make a positive impact, then Global Citizen - the digital movement working to defeat poverty, demand equality and defend the planet - allows you to do just that. The platform for “action takers and impact makers” provides suggestions on ways its members can use their online presence to call on those with the power to influence change to take the necessary action to address various issues.

If you wonder how effective this sort of activism (sometimes dismissed as “clicktivism”) can be, we hear you. While digital activism has a broad reach, its impact is typically shallow and short lasting compared to more hands-on and sustained activism. However, with well researched, specific asks of its members’ online engagements that integrate with other activist forums, Global Citizen’s approach has a well-earned place in the activism landscape with multiple concrete examples of the tangible impact its campaigns have achieved, we’re drawing our attention to its upcoming event, Power Our Planet - Live in Paris. The event forms part of Global Citizen’s Power Our Planet campaign which aims to address climate change and inequality by calling on global financial systems to release funds to enable the transition towards a sustainable, equitable and just future through investment in development programmes and clean energy.

With a line-up of stars from Lenny Kravitz to Billie Eilish all committed to the cause, the event aims to harness the collective power of those attending to drive commitments from world leaders and the private sector at the New Financial Pact Summit, to be hosted in Paris later in June. The event will reinforce the 42,944 actions taken by Global Citizen members at the time of writing as part of the campaign. We also expect to see similar activity from the campaign in the run up to the G20 and COP28 conferences later this year.

Global Citizen shows us the power of harnessing our collective reach to influence change and tackle some of the world’s most pressing problems. So, if you (or a Gen Z social activist you know) are ever lacking inspiration on how to make a positive change, consider joining the movement that will amplify your voice and pave the way to making the changes we want to see.

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Giles Gibbons

Good Business - Sustainability | Strategy | Impact

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What to expect in this weeks edition of Friday 5... 🖥 AXA Investment Managers' call for a database on avoided emissions 💻 The pitfalls of virtual conferences ✅ Pinsent Masons & Profusion's practical toolkit on good data ethics 🍲 The Behavioural Insights Team's guide to reducing food waste 🎙 Global Citizen's upcoming Power our Planet campaign Subscribe for more interesting stories across the sustainability landscape every Friday. #data #food #investment #sustainability #newsletter #responsiblebusiness