a2a: QUALE FUTURO PER LA SOSTENIBILITA'?

Evento organizzato da nextPA in collaborazione con Green Light for Business

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CSR and Finance: Yes we can!

If there is any branch of the economy more in need of a appropriate sense of CSR than finance and financial institutions, it's hard to picture it. A chain of governance scandals has characterized fruitless financial  advisory services and continuous concerns about fee levels and conflict relate to the agency phenomenon in Venture Capital and Private Equity firms, usual short-term outlook from stockholders and their obsession with shareholder value in companies sacrificing wider shareholder’s issues by fund managers and a bunch of other Corporate Social Responsibiity problems exceptionally  significant to the financial services industry. Calmly lurking in the background is the unsaid supposition that financial services companies are not playing an important role in the development of corporate social responsibility as they might.

The key issues typical of the finance industry are both shared with other industries and uniquely related to financial services: first of all, the corporate governance issues, such as non-executive directors, board procedures, appropriate accounting background and regulation, measures against corruptiojn; second the accuracy of marketing (including coherent decision on which data to use to describe performance); lastly support for corporate volunteering.

Moreover  there are those CSR problems which are peculiar of financial institutions . Some non exhaustive examples are the following:

Lending criteria, concerning also the way in which social and environmental advantage should be included into the business ideas, and how those ideas should be made within banks for project financing or business purchasing as well as the influence on Green Economics on both the hurdle rate and discount rate for project financing. In fact it has been demonstrated that environmental credit risk assessment (ECRA) yields increase in the firms’ value with great benefits to the shareholders, due an enhanced customer satisfaction, loyalty and market share. However, there is no overwhelming evidence yet and the biggest offenders in energy and aviation are valuable major bank clients.

Acceptable levels of profitability from individual financial product line and decision-making over bankruptcy and loan call-ins, including the relevance of employment implications for customer firms. Investment guideline issues such as lifecycle investing (as in the Ethics Code of the Chartered Financial Analyst examination) and the extent of customer recourse (as in the Barlowe Clowes case in the UK and many others).

Also Investment decision such as ethical investment, Islamic banking , in which global organization (e.g. World Bank and Central Banks) also have a key role, Insider dealing questions and the extent of information privilege.

Due to these factors in the last years, an increasing number of investors merge environmental and social  factors into their investment decisions. The increasing attention on CSR from financial institutions has developed further studies on the impact it can generate. In the academic literature, there are many arguments for why CSR performance  would be beneficial on firms’ value and on consequently on the shareholders’ wealth. From a academic point of view, a well-defined CSR  performance may increase productivity and financial performance because it implies a good relationship with crucial company’s shareholders. Moreover, if it is reached a significant corporate social responsibility performance, then it can give to the comany a competitive advantage. CSR  performance can generate value through the development of intangible assets. By meeting shareholders’ expectations through a higher awareness of corporate social responsibility, firms generate a reputational capital and enhance their social legitimacy, which can  contribute to ameliorate sales and to increase customers’ satisfaction  or allows to have more high quality employees in the company.

Stay tuned, Stay Green.

Gabriele Tringali

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Who made your clothes? Fashion Revolution time!

On 24th April last year, 1133 people were killed and over 2500 were injured when the Rana Plaza factory complex collapsed in Dhaka, Bangladesh.

Social and environmental catastrophes in our fashion supply chains continue.

For this reason, on 24th April 2014 was celebrated for the first time the Fashion Revolution Day, which has been asking people: "who made your clothes?", slogan accompanied by the hashtag #insideout.

Corporate Social Responsibility is a topic which is increasingly gaining importance and receiving more attention than ever.

As for the so called "fast fashion" brands - such as Zara, H&M or Primark, their philosophy of lots of clothes collections for each season certainly has high social and environmental costs.

But also the high fashion industry is to be taken into consideration.

After all, this is an industry that is defined by frivolity, by pumping out four collections a year and convincing consumers that perfectly good clothes are outdated after a season.

Furthermore, many mass luxury labels such as Gucci, Louis Vuitton and Prada started as skilled artisans, crafting exceptional goods. However, as luxury became mass market, these brands moved away from their humble beginning to become global conglomerates, fiercely protective of their luxury status while feeling the economic need to appeal to all sectors of society: despite their luxury image, many designer brands outsource production to cheaper countries, and many “gateway” designer products, such as perfumes and accessories, are made with cheap ingredients and potentially hazardous chemicals.

On top of all that, a 2012 study titled Style Over Substance by the Ethical Consumer Research Association (ECRA) assessed a number of high profile fashion houses, including Prada, Alexander McQueen, LVHM and Armani according to animal rights, human rights, the environment, political activities and anti-social finance practices. A questionnaire was sent out to each company, but none responded, and publicly available information was scant. Additionally, brands such as Stella McCartney and Vivienne Westwood, were criticized: McCartney for being vocally anti fur whilst being owned by the fur-using Gucci group, Westwood for being openly anti-climate change whilst having no policies to back up the stance.

There are some encouraging signs, however. In March 2013 Gucci introduced a high profile global CSR program, taking a stance on women’s rights; likewise Tiffany launched a specialist sustainability website in 2011 which sets out the sourcing policies for their diamonds. What’s more, there is a new wave of fashion brands who have sustainability and artisanship as a key business focus such as Maiyet and Bruno Pieter.

A brand known for its commitment in CSR is instead Brunello Cucinelli: a humanist enterprise, a business that is run on the philosophy of “supreme good”, something he defines as “giving business a meaning that goes beyond profit and reinvesting to improve the lives of workers, to enhance and restore the beauty of the world”. And Cucinelli certainly practices what he preaches, gaining favourable coverage in June for paying each of his 700 employees an impromptu bonus.

Brunello Cucinelli's business approach is in fact based on an entrepreneurial model in which people are placed at the center of the production process. As a result, everyone on every level of the company strongly feels their contribute to the success of the group. That same feeling exists in the company's relationships with its extremely loyal outside contractors and wholesale clients.

The company answers to its own ethics code: inside and outside the company, human values are always placed first.

Furthermore, in the early eighties, Cucinelli launched a huge project to restore and renovate the medieval hamlet of Solomeo. Over 23 years of passionate work, Brunello Cucinelli personally supervised the design and planning phase of the many restoration projects that have since been completed.

Today the castle – with its wooden beams, stone fireplaces, and frescoed walls – is the true heart of the company and is home to its offices and workshops.

Interestingly, the designer believes that his business model is mandated by the consumer:

“Luxury consumers want to know, or will want to know, that their goods are made humanely.”

Costanza Gabbrielli

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Corporate Social Responsibility: Apple is one step ahead

No news: again, Apple is one step ahead. Right, it hasn’t been the first company in its sector to launch an environmental campaign. But it has been the first one to transform it into its core mission. The company’s new goal is to make its sustainability “better”– as the “Better” video states. On Earth’s day, 22 April, the Cupertino based firm disclosed to the folks of the world its new strategy. “There are some ideas we want every company to copy” has been printed on several newspapers, over an inviting picture of a solar array. Now, take a minute to observe your exquisite, beloved Mac. I bet you didn’t know that its OS X has been developed to maximize energy saving. When the machine is not at hard work, the operating system puts its hard disk to sleep and runs the processors in an ultra low power mode. On the other hand, when it is hard working, the OS uses less energy for apps that are open but not visible, while it idles the processor as you are typing.

In  the last six years, the average total power consumed by Apple products has dropped by 57%.

The world’s most energy-efficient desktop computer is Mac mini. Today’s iMac uses 97% less electricity in sleep mode than the first iMac. The 11-inch MacBook Air consumes the least total energy in its class.

As a matter of fact, on the website, Apple boasts its entire product line not only meeting, but exceeding ENERGY STAR guidelines.

Now, take your iPhone out of its shiny cover. You should feel free to hold it in your hand: some of the most harmful toxins (mercury, lead, arsenic, PVC, BFRs, Phthalates) have been entirely eliminated from the whole range of Apple products.

Before letting it go, consider for a moment the impact of having reduced the 5s packaging mass by 26%. If it doesn’t impress you, keep in mind that now 60% more iPhone boxes can be packed in each airline shipping container. This saves one flight for every 416,667 units shipped.

Apple measures the carbon footprint (the total amount of carbon dioxide and methane emissions) of its production processes not only in terms of the facilities it owns, but of the whole supply chain. The footprint of its products is measured throughout their entire life: including emissions from manufacturing, transportation, use and recycling.

At this stage, Apple couldn’t but surprise us with the buildings.

73% of all facilities (including all of the data centers and 86% of the corporate campuses) are powered by renewable energy. The same is true for 120 retail stores in the US.

The energy sources include solar, wind, geothermal (the heat of the earth), water (micro-hydro system) and biogas fuel cells.

On top of that, to save water, the company employs an irrigation system that monitors local weather conditions and soil moisture.

In Cupertino Apple will open its huge and revolutionary campus . Here, 80% of the site is going to be green, with thousands of shade and fruit trees and drought-tolerant plants. The source of energy will be solar, while natural ventilation is to be employed for most of the year, through air flowing freely between the inside and the outside. Employees will reach the campus thanks to biofuel buses, public transit, carpools, bicycles and their own feet. The campus is going to be equipped with hundreds of electric vehicle charging stations.

Apple aims to power all its offices, retail stores and data centers entirely with energy from renewable sources.

At this point, the options are two. If this article has been so effective that it has made you want to substitute any device in your house that does not have an apple impressed on it with one that does, I will tell you: wait a minute. While you’re on the way to the Apple store, don’t forget to bring the old device. They will recycle it for you.

Over 90% of the material Apple recycles is not its own.

If, on the other hand, you couldn’t care less about all this environmental chit-chat and this long article has only made you feel like throwing your iPad in the bin, I’m telling you: don’t do it. For your own sake. Take the device and bring it back to the Apple store. If it has monetary value, you will be given an Apple Gift Card. Later on, Apple will recycle the products, but always in the region where the waste is collected.

85% is the company’s recycling collection rate of the total weight of products sold.

You may have never thought it possible, but be aware that now, by purchasing that iPhone, you have become a stakeholder of an environmental campaign.

It’s only a matter of time, and then, again, the firm will set a new trend. But this time, its color is not going to be white. It appears more natural. It’s going to be green: green as an Apple should be.

Let me add one remark. In order to make this article as impartial as possible, I have done some research to find out whether Apple’s sustainability campaign is really as spotless as it looks like. The only information I found is Greenpeace’s ClickingClean report , where Apple is the only company to be awarded with a Clean Energy Index of 100%.

Carlotta Werth

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