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Lessons From the COVID-19 Pandemic Will Help us Act on Climate

Lisa Genasci — April 18, 2020 — 1 Comment

How do we take this public health crisis, the loss of life, our paralyzed economies, and apply what we are learning to our equally urgent climate emergency?

The immediate crisis is painfully tangible. But that doesn’t make the profound, longer-term transformational shifts that are needed to protect our planet any less relevant to us, our economies or our financial markets.

These will just take a little longer to be seen and felt.

Three months ago, the threats of pandemic and our climate change emergency were similar. Both were problems scientists warned about but didn’t look to be happening anytime soon. They were problems for some future year and our governments did little to prepare, or were in the process of reversing protection and preparedness

Then, when the COVID-19 Pandemic started, many Governments didn’t want to take action that would damage the economy so were slow responding, allowing the virus to spread to a point where now, as I write, over 1,300,000 million people have fallen victim, at least one-third of the world’s population is in lockdown and the Pandemic is everywhere a first priority.

But what of that other, ‘future” problem, Climate Change? Might our governments, chastened by one ‘future” problem becoming a “now” problem turn their attention to Climate Change once COVID-19 is beaten? Let’s hope so because Climate Change is a far more difficult problem than the Pandemic and likely to have far more impact on humanity.

So what lessons can we learn from the pandemic that are relevant to climate? The first is that we were woefully unprepared. Despite warnings from the medical community, from scientists, expert opinion was suspect, ‘big government’ was bad and that meant it was easier to ignore.

Likewise, we are largely ignoring the warnings about climate. Science has shown that global GHG emissions must decline by about 45% from 2010 levels by 2030. They must be at net zero by mid-century if the world is to prevent catastrophic global warming. Yet we have not been able to stimulate significant global action to this end.

The Paris Agreement in 2015, the Sustainable Development Goals and agenda to alleviate poverty and protect our planet, looked like the beginning of global collective action but not enough has happened since. Governments have translated their Paris Agreement commitments into nationally determined contributions that aim to reduce emissions. But if these are, indeed, to limit global warming to 1.5°C by 2050 as they must, they would have to be five times more ambitious.

Yet the voices of courageous climate youth activists such as Greta Thunberg are drowned out by inexpert climate-denier opinion across mainstream and social media channels that allow many of our politicians, to ignore what we can plainly see in weather events, migration and other systemic shifts as we move beyond our planetary boundaries.

And how can we get around the structural political problem that politicians exist and get re-elected, where there are elections, in the short run, the time period of a pandemic, while climate change is a long-term phenomenon, albeit increasingly experienced in the short run?

The second lesson is that we have ignored the warnings. For years the wildlife markets in China and elsewhere had been seen as repositories for disease, yet the trade has continued. It’s easier to maintain status quo than act against entrenched interests. We continue to destroy our remaining forests, reducing habitat for wildlife, pushing animals and humans ever closer, and at the same time impacting our climate by reducing watershed protection, eliminating our carbon sinks. Stressed climate, habitats and animals lead to drought and disease. Yet we have failed to act, again preferring not to regulate or legislate protection.

The third lesson has to be the spectacular speed of transmission and impact on our economies of the pandemic in our globalized, hyperconnected world. There are no barriers to pathogens or to the economic consequences of our global shutdown. We are much more vulnerable than we ever imagined.

We can extrapolate to a world where GHG emissions are not curbed, where we keep burning fossil fuels, and warming is not kept within the 1.5 degrees above pre-industrial levels that the IPCC has warned is manageable. Indeed, we are on a trajectory currently toward a potentially catastrophic 4 or 5 degrees of warming.

We assume that we will continue living as we do, consuming as we have, but we cannot without suffering the consequences. We know from the IPCC and other scientists that we have a decade to shift our global economy or we will reach a point of no return in terms of our climatic shifts.

Perhaps our current taste of swift change will show us all that we cannot take anything for granted, that although many of us haven’t experienced anything like this moment in our lifetimes, others have experienced devastating war or disease. History is replete with sudden shifts and we are not immune.

Unchecked GHG emissions will, in the not so distant future, start to have far more permanent and disastrous impacts on all of us than the current COVID 19 pandemic but unlike a disease that swiftly slips into our communities, keeps us from jobs and kills our vulnerable and then, recedes in a year or two, impacts of our changing climate will be longer in coming and irreversible, at least in our lifetimes. There will be no vaccine for climate change other than worldwide, radical policy change today.

The positive that we should take from our current moment is that there can be swift change. The Chinese government has announced a ban on the wildlife trade, people have stayed home to protect the more vulnerable from disease and companies have encouraged work from home arrangements that will help slow the spread. Governments have rolled out stimulus packages to protect workers and companies. Policy makers and scientists are working collectively to gather data, model the spread of the pandemic, push for new drugs, vaccines and formulate appropriate responses.

The pandemic has kept us at home, slowed our pace, kept us from any travel that wasn’t absolutely necessary. It has made us conscious of unnecessary buying, of hoarding. We have been shamed, at least in Hong Kong, for not wearing masks, for leaving our homes when quarantined, for acting against the public good.

We must not think that, once the pandemic fades, we can return to old consumption patterns. Rather let’s consider what is necessary in our lives and how we help reshape a society that is less consumptive, more centered, innovative and collective, one that no longer taxes our planet and its biodiversity.

We must think about how we invest to promote sustainability, how our supply chains will produce to protect, not encourage, destruction of our important forests and biodiversity, and promote worker rights. It is to our governments that we look in a time of crisis and it is up to our elected officials also to act to protect us not only from this pandemic but also from our climate tragedy.

The collective response to the pandemic has been swift, perhaps not swift enough, but hopefully the four months since December when the coronavirus was first identified in Wuhan has been sufficiently dramatic and impactful to show that we can act locally and globally to stem another existential challenge: Our climate emergency

In air pollution, asia, carbon, Environment, forests, health, Hong Kong, human rights, impact investment, Philanthropy, pollution Climate change, COVID, health, pollution

Why ADMCF’s Environmental Focus

Lisa Genasci — March 18, 2017 — 2 Comments

As we enter ADM Capital Foundation’s second decade, we have launched a new website at ADMCF.org that reflects our narrowed focus on Asia’s environmental challenges.

Over the past ten years, we have worked with dozens of NGO partners to help support some of the region’s most marginalised children to better lives, we have pushed for action to reduce air pollution, to cut consumption of shark fin and protect our oceans, stem the wildlife trade, protect forests, build knowledge and action around China’s water crisis. We have worked to see that the appropriate research informs the right sort of change.

But this year represents a shift from our dual focus on children at risk and the environment to where we feel the need is greatest: environmental protection.

The two-decade shift of manufacturing to Asia amid lax local regulation and enforcement has come at unprecedented environmental cost. While we enjoy cheap goods, clothes in particular produced at unsustainably low prices, Asia shoulders the environmental burden of our excessive consumption. Global climate change, ocean acidification, the consequences of our excessive lifestyles, now affect us all.

Globally, we are living as though we have three planets in terms of resource consumption. We must find ways to live more sustainably, to accommodate a world population that is expected to reach 9 billion by 2050.

Philanthropy is not the only answer but it can support essential research, spread knowledge, seed ideas, push for thought change in consumers and action from governments, all of which is critical.

Yet only an estimated 2 to 3 percent of global philanthropy finds its way into addressing our urgent environmental challenges.

Thus, we felt ADMCF’s resources were best spent striving toward: cleaner air; improved and secure water sources; forest protection balanced with low carbon rural development; better managed fisheries and sustainable consumption of our ocean resources; improved regulation and enforcement to protect endangered wildlife.

At the same time, we are exploring sustainable business models, a circular economy and the finance that must underpin all.

Collaboration remains the key. None of our work can be done alone, without the energy of our many incredible NGO partners, our funding partners, our pro bono supporters.

The challenges we face are substantial but in our short ten years we can see systemic change, we can see that it is possible to generate lasting impact.

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In air pollution, asia, china water, Environment, Fish, Food, forests, frogs, Hong Kong, indonesia conservation, Marine, Philanthropy, pollution, shark finning, sharks, water

Manage Our Transport to Improve HK’s Air

Lisa Genasci — March 29, 2015 — Leave a comment

Please watch, this great video from Hong Kong’s Clean Air Network. It really says it all.

Hong Kong University of Science and Technology/Civic Exchange research has shown that 53 percent of the time, the pollution that affects us most in HK is from transport – trucks, buses and ships
Last March the government introduced retirement schemes for old Commercial Diesel Vehicles as well as selective catalytic converters for taxis and mini-buses
And last year, data did show that HK’s air improved slightly
More good news: The government recently tabled regulation in Legco that mandates ships switch to cleaner from bunker fuel while at berth
But measures to improve our air have been largely offset by the huge increase in private car ownership in recent years as well as the massive development initiatives that are being undertaken
The Hedley Environmental Index estimates that in 2014, air pollution caused 2,616 premature deaths, 32.657 billion in lost dollars, 174,926 hospitalizations, and 4.253 million doctor visits
The so-called “end of pipe” solutions the government has introduced are certainly a beginning but inadequate alone
Hong Kong needs to follow Singapore and European cities in establishing low emission zones, pedestrian zones, electronic road pricing and intelligent transport solutions
We urgently need a smarter, cleaner city. This is within our reach.

In air pollution, asia, carbon, Environment, Hong Kong, Philanthropy, pollution admcf, admcf. asia, air pollution, china, conservation, Environment, health, pollution

Building Impact into Investment

Lisa Genasci — March 12, 2014 — 2 Comments

Sophisticated Investors like to think their portfolio risk has been carefully mitigated and hedged. For the average portfolio, however, standard risk calculations don’t necessarily include analysis relative to environmental and social issues an investee company potentially faces, or even resource consumption analysis, yet all can have a significant impact on returns. This is particularly true of a long-term “buy and hold” investment strategy.

By contrast, impact investors believe not only that these factors weigh on a company’s returns, but also a positive screen for companies actively managing these risks can improve a portfolio’s performance.

Speaking in Hong Kong about their own 13-year journey toward an “Impact Portfolio” were Lisa and Charly Kleissner, founders of the KL Felicitas Foundation. As part of their mission, the Kleissners have urged audiences globally to think about how we can better deploy capital to help better steward the planet’s resources. On Tuesday, they spoke at a forum organized by the RS Group, hoping to advance the discussion in Hong Kong.

Today, the Kleissner’s foundation and personal portfolios, managed by San Francisco-based Sonen Capital, are more than 93 percent allocated across four different asset classes to “Impact Investments”, which signal the intent to generate both financial return and “purposeful, measurable, positive social or environmental impact”.

According to “Evolution of an Impact Portfolio: From Implementation to Results“, a report published by Sonen in October last year, the Kleissner’s portfolios have achieved index-competitive risk-adjusted returns, illustrating that, “impact investments can compete with and, at times, outperform, traditional asset allocation strategies, while simultaneously pursuing meaningful and measurable social and environmental impact”.

Their journey toward impact has not been easy, according to the Kleissners, Silicon valley denizens who both worked under Steve Jobs at Apple, among other firms. The process began with dim looks from early investment managers who wanted to focus only on returns.

“We wanted to know about the positive upside for communities, for the environment, from our investments,” Lisa said. “We wanted to make money and have positive impact but our early investment advisors had no idea how to achieve this.”

They sought an advisor who cared about impact. “We didn’t want someone who saw this as simply a job,” Charly said. “We want to change the world not just make money and our investment advisor needed to be a partner in this.”

The results were far-reaching, meaning investment policies needed to become impact investment policies, due diligence restructured, term sheets re-written, new monitoring and exit strategies developed. Sonen Capital was founded in response to this need.

The portfolios the Kleissners ended up with are far from US-centric, with more than 50 percent of investments made globally. Among those are holdings in renewable timber, carbon offsets, water and land use that is respectful of biodiversity. In other words, the Kleissners invest in companies that reflect positive impact. They have opted not to invest in coal-fired power plants or extractive industries.

Three percent of their assets are in early stage direct investments, reflecting their silicon valley, entrepreneurial background. Indeed, the Kleissners efforts to promote the impact sector has included investments of money and their own time in social enterprise incubators. These, and others, the Kleissners like to think of as “catalytic” investments that can lead to change.

Beyond the incubator model to support social enterprise development, the Kleissners also have invested in helping to build networks of like-minded investors to share due diligence as well as in promoting intermediaries to help develop the impact sector.

“Development of these investor resources is critical,” Charly said, “We want people anywhere to be able to tap into the knowledge”, which is available on the KL Felicitas website.

Measurement, always a difficult discussion, is rigorous across the portfolios, captures trends across the sectors and then includes qualitative analysis, which involves telling the story from the numbers and more.

Charly spoke of impact investment as often an evolution of smarter philanthropy. He also spoke of the importance of collaboration between grantmaking and investment to widen impact, pointing to microfinance as an example of this and to social enterprises that can start life as a nonprofit but move into a more commercial space over time using blended capital.

Speaking in Hong Kong, the Kleissners said, was a learning for them, that having worked with an incubator in India over a number of years, the entrepreneurial context there was more familiar.

In China, where the environmental challenges are substantial and polluting companies numerous, an audience member pointed out that impact might also come from working with conventional companies to change their environmental and social practices, rather than shunning them altogether.

Battle for the Deep Sea in European Parliament

Lisa Genasci — October 8, 2013 — 1 Comment

By Stanley Shea

The European Parliament Fisheries Committee could in the next days quite irresponsibly kill proposed legislation to phase out the use of deep-sea bottom trawls and other destructive fishing gear in the Northeast Atlantic.

Predictably, many of the committee’s 25 members causing the most problem represent districts with deep-sea fishing interests, according to Bloom’s Claire Nouvian and an Oc. 2 New York Times Op-ed written by marine scientists Les Watling and Giles Boeuf.

According to scientists, 90 percent of the ocean is below 200 meters but not much is known about life there, expect that it is home to countless species, many of them as yet undocumented. Research covers only about 1 percent of the vast area.

As fisheries have collapsed in shallow waters, the industry has looked to the deep for new species and have found only a few there that can be sold for human consumption or processed for fish meal. Yet trawls with gear heavy enough to reach 2,000 meters below the ocean’s surface have scooped up everything in their path, palatable or not, and thus reduced fish biomass by 80 percent over an area about the size of Britain.

According to the Op-Ed, in 2011, vessels from eight EU countries landed 15,000 metric tons of four species of marketable deep-sea fish, which represents only 0.4 percent of Europe’s fish haul. Because of the fragile and adverse conditions in the deepest areas of our oceans, the fish are slow reproducers so this sort of fishing causes irreparable harm.

There exist many fragile species in the deep that are simply swept up or smashed by the trawl gear, which can leave the bottom or mid-areas of the ocean completely bereft of life. A declaration by 300 global scientists has urged that this type of destructive fishing be eliminated from the deep sea – now!

The deep sea battle is just part of the ocean tragedy, described well in the latest audit by an international team of marine scientists from the International Programmed on the State of the Ocean (IPSO). Released earlier this month, the report showed that the world’s oceans and marine life face unprecedented threats from industrial pollution, global warming and rampant overfishing.

The IPSO paper calls for “urgent remedies” because the “rate, speed, and impacts of change in the global ocean are greater, faster and more imminent than previously believed.”

The battle over deep sea trawling then is over “a small fishing area that produces a diminishing number of fish for a handful of companies , who despite massive subsidies from the EU and their own states are not profitable – all the while destroying countless organisms that represent the library of life on Earth,” according to the Op-Ed

Clearly, Trawling should be eliminated from the depths of the Northeast Atlantic. Yet legislators, backed by industry, are staging an irresponsible fight in the Fisheries Committee of the European Parliament that is against all of our interests and the real tragedy is that they could win.

In Environment, Fish, Food, Marine, pollution conservation, deep sea, European Parliament, Fish, IPSO, Marine, New York Times, Trawling

China Cracks the Door Open To Environmental Reform

Lisa Genasci — March 25, 2013 — 3 Comments

At a recent environmental forum in Beijing, the speakers were in full swing with relatively predictable insight into China’s environmental challenges, and more broadly, environmental challenges elsewhere.

Then came the question-and-answer period and again a couple of relatively innocuous questions before a Chinese man strode to the front of the auditorium and launched into a discussion of his own.

In angry tones and raised voice, he said the Chinese government was not doing enough to mitigate air, water and soil pollution and demanded immediate attention to related public health concerns.

No one flinched, people listened intently, respectfully, no one emerged from the shadows to haul him away. Several students in the audience also asked about lack of action on pollution and suggested that more should be done to clean the environment and protect citizen health.

I sat beside a Chinese friend who simply shrugged, saying she had seen the man speak out at two other recent environmental forums. She said that because of his stature as an energy expert, he was left unhindered to express his opinions publicly.

She pointed out that the students were also feeling free to criticize the government, whereas previously the unspoken line everyone knew not to cross was any sense of direct opposition to Beijing authorities.

My sense from the entire trip (my previous visit being only four months earlier) was that China is changing, and perhaps faster than we could have imagined.

For the first time, censors this year have allowed Chinese media to carry reports about the “cancer villages” in areas of high industrial pollution.

Environmental advocate Ma Jun told me with some amazement that he had felt free recently to criticize a recent Ministry of Environmental Protection decision not to release data about soil pollution, which it considered a “state secret”.

Ma Jun said this was irresponsible and put public health at risk, a comment that was unusually picked up by the People’s Daily and Xinhua, among other news sources that aren’t usually inclined to publish remarks critical of the government.

“Previously, these comments would have been removed by censors,” Ma Jun said. “Now these issues are allowed to be talked about, debated and discussed.”

This became particularly clear, as March brought the annual meetings of the legislative and consultative bodies of China where major policies traditionally are decided and key government officials appointed.

Concern for the environment was a constant throughout the session – and was the subject of one in ten of the 5,000 proposals submitted by delegates.

Social media was also alive with commentary on the environment throughout.

And talk about environmental protection wasn’t simply a side act to the main show. The National People’s Congress (NPC) at 2,987 members is the largest parliament in the world and gathers alongside the People’s Political Consultative Conference (CPPCC) whose members represent various groups of society. This year, the NPC confirmed the new leadership of President Xi Jinping and Premier Li Keqiang.

This once-in-a-decade leadership change emerged from November’s Communist Party congress with a strong reform mandate and promising a more sustainable China, balanced growth as well as more emphasis on environmental protection.

To be fair, this was not, however entirely a departure in direction from the previous Hu Jintao, Wen Jibao administration and it remains to be seen whether the result will be real change.

The 2011, 12th Five-Year Plan, which sets the direction for policy, of course emphasized balanced growth and set priority green industries. The mantra that emerged then was that economic growth should not come at the expense of resource depletion or pollution.

Wen Jibao, representing the departing Old Guard, opened the 12th National People’s Congress with a “Report of the Work of the Government” pointing to “steady progress in conserving energy, reducing emissions, and protecting the environment.”

But levels of anger are rising, fueled by recent truly off-the-charts air pollution in Beijing as well as the repeated and increasingly public (because of the rapid spread of news on social media platforms) water pollution incidents nationwide. Rampant corruption among local officials that has allowed harmful practices to continue unhindered has also been a target of microbloggers.

This sense of disregard for public health coupled with an increasingly affluent and vocal middle class presents a problem for the Chinese government in terms of its own legitimacy.

Recognizing this, Xi Jinping said at the March proceedings that the government should play a stronger role in pushing reform and opening up.

“The new administration wants a new start,” Ma Jun said. “They want to make clear that the current environmental challenges are not their fault.”

China delegates in pollution protest vote (abc.net.au)
China’s Poison Air Is Becoming Its Leading Export – Bloomberg (bloomberg.com)
As Pollution Worsens in China, Solutions Succumb to Infighting (wtee.wordpress.com)
China People’s Congress environment surprise (abc.net.au)
Anger Over Pollution Becomes Main Cause of China Unrest (bloomberg.com)

In air pollution, asia, China, china water, Environment, Philanthropy, pollution admcf, air pollution, china, climate, Environment, Philanthropy, soil pollution, water

Eating Our Oceans: Why We Must Act

Lisa Genasci — February 16, 2013 — 2 Comments

Photo: Alex Hofford

We have spent the last few days contemplating with marine experts the real and terrifying challenges our oceans face and what we, as a philanthropic foundation, can do to stimulate urgent thought and action largely absent in Asia around the consumption and trade in fish.

While there is growing attention from governments (local, national and regional bodies), NGOs and philanthropic funders in the U.S., Europe, Australia and New Zealand, despite being an important consumer and producer, there has been little attention paid to the challenges in Asia, where an estimated 40 percent of major fish stocks are overexploited or collapsed. At the same time, as a region where poor coastal populations are largely dependent on fisheries for their only source of protein and employment, the issues are particularly urgent.

It’s worth reminding ourselves of just how significant those challenges are and why we in Asia should particularly take note.

Oceans cover 70 percent of our planet and are indispensable to life. They generate 50 percent of the oxygen we breathe, absorb warming greenhouse gases, help regulate our climate and are a critical source of food for us all, but most importantly the 1 billion of our world’s poorest for whom fish is their only source of animal protein.

Yet as we have written about here and here, we are depleting, polluting and warming our oceans at unprecedented rates. We are not caring for our greatest resource in the rush to take more and produce more. While population growth has averaged 1.7 percent each year over the past 50 years, with greater global affluence, rates of fish consumption are increasing at an annual rate of 3.2 percent, according to the FAO’s 2012 State of the World’s Fisheries and Aquaculture. How will it be when our current population of 7 billion reaches an expected 9 billion by 2050?

Over the past 50 years we have consumed an estimated 90 percent of the ocean’s big fish, encouraged by $27 billion each year in misguided government subsidies for fuel or boat construction offered to the industrial-scale fishing fleets that have led the devastating global scramble to harvest, according to a Pew Environment Group report. Estimates are that about half the world’s wild capture production comes from the smaller coastal fisheries that can be just as destructive, usually are unregulated and yet are a vital source of employment and protein.

The total number of fishing vessels in the world in 2010 is estimated at about 4.36 million and again it’s worth noting that Asia has the largest fleet, accounting for 73 percent of the world total, according to the FAO.

World per capita food fish supply increased from an average of 9.9 kg in the 1960s to 18.4 kg in 2009, and likely 18.6 kg in 2010 when all the numbers are in. Of the 126 million tonnes available for human consumption in 2009, Asia accounted for two-thirds of which 42.8 million tonnes was consumed outside China (15.4 kg per capita).

China, which is expected to pull an additional 300 million people out of rural poverty and into relative urban affluence over the next two decades, has a long way to go. Already over the past 50 years, that country’s share in world fish production rose from 7 percent to 35 percent in 2010, largely fueled by growth in aquaculture there, while fish consumption per capita rose to 31.9 kg in 2009, with an average annual rate of growth of 6 percent between 1990-2009. China is also the world’s largest single exporter, responsible for 12 percent of world trade by volume.

China now produces more than 60 percent of the world’s aquaculture by volume, while Asia as a whole accounts for 89 percent of global volume. This is not, however, taking pressure off our oceans as many people seem to believe. fishmeal itself contains fish and for the more expensive fish the conversion rates are not good. World aquaculture production reached an all-time high in 2010 of 60 million tons, meaning we now farm about half our global consumption.

This massive and growing consumption has meant that most of the stocks of the top ten species, which account for about 30 percent of world marine capture fisheries production, are fully exploited and have no potential for increases in production. Our fishing capacity, meanwhile, is estimated to be as much as two to four times that needed to harvest the sustainable yield catch from the world’s fisheries.

Meanwhile, not only are we emptying our oceans of life, by overfishing, we are killing what’s left with our bad terrestrial habits.

Acidification and the accompanying ocean warming are continuing apace as our marine life absorbs carbon dioxide and other greenhouse gases emitted by our factories, power plants and transport sector. This has been devastating to our coral reefs, the habitat for 25 percent of our marine species.

Humans are also responsible for a wide assortment of pollutants from oil spills to plastic waste to industrial and municipal effluent, to agricultural runoff from fertilizers that has created whole coastal dead zones.

And I could go on about Illegal, Unreported and Unregulated Fishing, which is an industry unto its own and about which not enough is known but its links to human trafficking, drugs, and terrorism finance have been sporadically documented. With lack of attention to fisheries in Asia and close to zero regulation, this is a particular challenge in terms of even beginning to think about how to stimulate action.

Still, it’s not all gloom and doom – at least in Europe, the U.S., Australia and new Zealand, where NGO pressure and governments (both local and national, as well as regional bodies) have started to focus on the myriad challenges.

According to the FAO report, good progress is being made in reducing exploitation rates and restoring overexploited fish stocks and marine ecosystems through effective management. In the United States of America, 67 percent of all stocks are now being sustainably harvested, while only 17 percent are still overexploited. In New Zealand, 69 percent of stocks are above management targets, reflecting mandatory rebuilding plans for all fisheries that are still below target thresholds. Similarly, Australia reports overfishing for only 12 percent of stocks in 2009. There is also growing EU and USA action around IUU fishing.

But where is Asia in this equation – China, southeast Asia, Japan and India, which together consumed two-thirds of the world’s fish, farm more than 80 percent and export a large chunk to the rest of the world. On marine issues, both governments and NGOs are largely silent, with the exception of the creation of marine protected areas which in concept are important but reality need to be better conceived with proper fisheries management, governance, linkages and adequate funding for monitoring and enforcement.

The reality exists that none of the Asian nations have adequate fisheries management plans, import or export regulations or reliable stock assessments, to their own detriment. IUU fishing is rampant. Yet, fisheries are a vital source of employment and food for the region. Food security and potentially even social stability are at stake.

The question we have been asking ourselves – beyond those provoked by the challenges above – is: What role should a significant global trader such as Hong Kong play in this equation?

Once a fishing village with a booming fishing industry that sustained our appetite for highly commercial species such as snapper and grouper producing 90 percent of the fish we consumed, Hong Kong now imports 90 percent of what it consumes from 140 nations globally. The lack of fish in our oceans caused the government to buy out the once substantial trawling fleets and close Hong Kong waters to commercial fishing.

Despite the declining productivity of our own seas, our appetite for fish, particularly endangered luxury species, has only increased with our greater affluence. In 2009, an average of 71.6 kgs of seafood was consumed per person. That’s 3.9 times higher than the global average and up from 9.9 kg in the 1960s.

So the question remains: should not Hong Kong, a significant consumer of seafood and as such a contributor to global ocean challenges not act now to help save our seas? The key to keep our oceans from emptying completely will be for governments to adopt policies that encourage sustainable consumption and to regulate the fishing and seafood-related industry more carefully.

Green Blog: A Milestone Looms for Farm-Raised Fish (green.blogs.nytimes.com)
Fishers Fight Over Dwindling Catch (ipsnews.net)
David Bank: Fish 2.0: Investing in Sustainable Oceans and Fisheries (huffingtonpost.com)
What’s up with Sustainable Seafood? (jenniferbrowne.org)
World Fisheries: are we managing an effective decline? (worldfishing.net)
The high seas are too precious to be left to plunderers and polluters | Callum Roberts (guardian.co.uk)

In asia, China, Environment, Fish, Food, Hong Kong, Marine, Philanthropy, pollution, shark finning Aquaculture, asia, china, FAO, Food and Agriculture Organization, Illegal unreported and unregulated fishing, The Pew Charitable Trusts, Wild fisheries

Government Resolve on Cleaner Air Must Not Waver

Lisa Genasci — October 27, 2012 — Leave a comment

: By Ella Smith

: By Ella Smith

This first appeared as an Op-ed in the October 25 opinion pages of the SCMP.

We might finally have an administration that cares about cleaning our filthy air. Indications are that the new administration led by C.Y.Leung will act to finally stem the choking smog that represents Hong Kong’s No 1 public health crisis and is a major impediment to the city’s competitiveness.

Last week, in his first address to the reconvened Legislative Council, the chief executive said improving air quality was among his top objectives. In a move that already stirred optimism about the government’s determination to protect public health, Leung last month named environmentalist Christine Loh Kung-wai undersecretary for the environment.

It was also encouraging to see, a day after Leung’s address, Secretary for the Environment Wong Kam-sing calling roadside pollution the city’s greatest problem, and that a basket of initiatives to improve the city’s air quality would be introduced next year. These, he said, would aim to comply with World Health Organisation standards rather than the outdated air quality measures still in use.

Among the initiatives being considered are “carrot and stick” policies that include removing some 60,000 heavily polluting diesel vehicles from our roads.

Such measures are urgently needed. Some older vehicles have been on the road for as long as 20 years and should be refused registration if they don’t comply with vehicle emission standards.

While atmospheric pollution might have improved somewhat – due mainly to lower emissions from the city’s power stations – the concentration of roadside emissions remains unacceptably high, and it is these emissions that affect us the most.

Wong has said that 80 per cent of roadside pollutants come from outdated commercial diesel vehicles.

Retiring obsolete commercial diesel vehicles will improve our air and our health. It’s also worth remembering that research from the Hong Kong University of Science and Technology showed that, 53 per cent of the time, pollution that affects us most comes not from across the border, but from our own roads and ships on the harbour.

Indeed, the recent flurry of positive announcements from the government came amid a string of bad air days and public health warnings to moderate outdoor activity.

According to Hong Kong University’s Hedley Environmental Index, which measures the cost of pollution, yesterday was a “clear day” (one that complies with WHO air quality guidelines) in Hong Kong. The last such day was September 22, which means that our air stayed bad for more than a month.

According to the index, there have been only 59 clear days so far this year. The polluted days represent a cumulative HK$33 million in health-related and other costs.

Beyond the direct cost to our economy, surveys of business executives regularly point to our smoggy air as a real obstacle in recruiting and retaining workers – whether foreign or local. Patience is wearing thin.

By now we have heard from doctors and scientists that our dangerously high level of pollutants raises the risk of such conditions as bronchitis, asthma, pneumonia, headaches, lung cancer, stroke and heart attack.

So we should applaud the suggestion of phasing out outdated commercial diesel vehicles, despite what I imagine will be heavy lobbying from the transport sector.

As Wong pointed out, mainland China is phasing out diesel vehicles more than 15 years old, so why should we be any different? The government’s carrot will include subsidies to soften the blow of replacing vehicle fleets.

It is encouraging that the administration has also spoken about retrofitting Euro II and III franchised buses with selective catalytic reduction devices to reduce nitrogen oxide emissions and might even tighten emission standards for LPG and petrol vehicles as well.

Here’s hoping that our new government will finally act to protect our health.

Air pollution study clears the air on diesel versus gas emissions (rdmag.com)
Hong Kong to tighten power plant emission limits (capitalfm.co.ke)
Emission standards for new petrol vehicles to be raised (todayonline.com)

In asia, Environment, Hong Kong, pollution air pollution, Air quality, china, Emission standard, European emission standards, Hong Kong, Leung, World Health Organization

Eating Asia’s Forests

Lisa Genasci — October 20, 2012 — 4 Comments

Most of us don’t realize that many of the products we use, the foods we eat are causing deforestation on a massive scale in Southeast Asia and are devastating to our planet’s biodiversity.

The culprit is palm oil, which is a key ingredient in many common foods, shampoos, soap and pet products, lubricants, pesticides and paints. It even helps fuel our cars.

Palm oil has become a silent part of our everyday lives and accounts for 30 percent of world vegetable oil. And that’s how it’s usually identified on the list of ingredients – as vegetable oil so we often don’t even know what we are using.

Our consumption of the versatile lipid is soaring. Demand is predicted to more than double by 2030 and to triple by 2050. China is the biggest consumer of palm oil, importing 18 per cent of global supply.

In Indonesia and Malaysia, forests are being cleared at an alarming rate, estimated at 2 million hectares a year, wiping out endangered species such as the orangutan, the black sun bear, the Sumatran tiger and many others. The two countries produce 90 percent of the world’s palm oil.

A new study by Stanford and Yale researchers estimates that 75 percent of deforestation in Indonesia was directly attributable to land use changes, from forestry to plantation. The study was released this month and published in the journal Nature Climate Change

Indonesia already has 8 million hectares of oil palm plantations, but has plans for another four million by 2015 dedicated to biofuel production alone. In total, the country produced more than 23 million tonnes of biofuels last year and is setting aside 18 million hectares to produce much more.

Malaysia in 2011 produced 18.9 million tonnes of palm oil on nearly 5 million hectares and was the second largest producer of palm oil.

Beyond feeding our snack habit, another challenge for forests is that governments are pushing to increase the use of biofuel, which ironically is seen as a quick fix to reduce greenhouse gas emissions. In the EU By 2020, 10 per cent of fuel will be biofuel, while China expects 15 per cent of its fuel to be grown in fields.

But in both Indonesia and Malaysia, in order to plant palm oil, often carbon-rich peatlands are being drained and then burned, releasing stored C02 into atmosphere already clogged with greenhouse gases from razing dry land forests. This represents possibly more carbon emissions than burning fossil fuels.

And not infrequently palm oil plantations are just an excuse for clearing forest because the profits associated with sales of tropical timber are substantial. In this case, companies seek concessions and access to land that is forested but don’t ever bother to plant palm oil.

We might think that forest and peat swamp loss in Southeast Asia sounds bad but it’s far away so why do we care?

We care for many reasons. But if we are thinking purely about self-interest, the effects of forest loss can be seen globally in changing climate patterns and erratic weather.

Forest cutting is responsible for 17 per cent of global carbon emissions, meaning this is the third largest source of greenhouse gas emissions and equal to emissions for the entire global transport sector. It is also comparable to the total annual CO2 emissions of the US or China, according to the UK Eliasch Review, “Climate Change, Financing Global Forests”.

If the international community does nothing to reduce deforestation, modeling for the Eliasch Review estimates that the global economic cost of climate change alone caused by deforestation could reach $1 trillion a year by 2100.

Beyond the effects of climate change from deforestation, we look to forests as sources of vital biodiversity.

Estimates are that nearly half of the world’s species of plants, animals and microorganisms will be destroyed or severely threatened over the next 25 years because of rainforest deforestation. As rainforest species disappear, so do many possible cures for disease.

At least 120 prescription drugs sold worldwide come from plant-derived sources. While 25% of Western pharmaceuticals are derived from rainforest ingredients, less than 1% of tropical trees and plants have been tested by scientists. We just don’t know enough about the significance of forests to sit back while they disappear.

Locally, the consequences of deforestation on such massive scale are even more immediate. Forests help regulate regional rainfall, offer defense from floods, maintain soils and their moisture, and generally offer ecosystem services crucial for maintaining life and livelihoods. Globally, an estimated 1.6 billion people depend on forests for their welfare and livelihoods to one degree or another.

So is it worth it to eat that biscuit, that chocolate, choose a shampoo that contains palm oil and how do we know if it’s not even labeled?

The rule is that if the label shows the saturated fat content is close to 50%, there is a good chance that the vegetable oil will in fact be palm oil. Among those items that should be immediately suspect are biscuits, processed foods, chocolates and snacks.

Other key tip-offs that a food item might contain palm oil listed among ingredients are cocoa butter equivalent (CBE), cocoa butter substitute (CBS), palm olein and palm stearine.

When looking at ingredients in non-food products such as soaps and detergents, those that contain palm oil include: elaeis guineensis, sodium lauryl sulphate, cetyl alcohol, stearic acid, isopropyl and other palmitates, steareth-2, steareth-20 and fatty alcohol sulphates.

Next time you reach for a snack, paint a wall or fill up your car, do your best to make sure palm oil isn’t an ingredient or at least that the brand claims to use oil from sustainable sources.

There are many issues around what makes palm oil sustainable as well as the industry body, the Round Table on Sustainable Palm Oil (RSPO) itself, but this is at least a step in the right direction.

In asia, Cambodia, Environment, Food, forests, Hong Kong, indonesia conservation, Philanthropy, pollution, redd china, Climate change, Greenhouse gas, indonesia, Malaysia, Palm oil, Southeast Asia, United States

Sustainable Apparel’s Critical Blind Spot

Lisa Genasci — October 10, 2012 — Leave a comment

Many brands that say they are producing sustainable product are in reality greenwashing their textile production in China, according to the latest report from five environmental NGOs in China.

“Sustainable Apparel’s Critical Blind Spot,” which can be found here, was a follow on from a report I wrote about here released in April that named 49 global fashion brands using polluting factories in China and suggested consumers make a “green choice” when buying clothes.

Led by Ma Jun’s Institute for Environmental and Public Affairs, “Cleaning up the Fashion Industry” listed 6,000 water pollution violations by manufacturers of goods ranging from sports apparel to luxury handbags.

Subsequently, 30 brands began conversations with IPE about how to improve the environmental performance of their supply chain, according to Ma Jun.

Clothing brands and retailers such as H&M, Nike, Esquel, Levi’s Adidas, Walmart, Burberry and Gap have all established regular screening mechanisms, are actively identifying pollution violations in their supply chain and have pushed more than 200 textile and leather suppliers to clean up.

Adidas, Nike, Levi’s and H&M have begun to address environmental challenges with their dyeing and finishing suppliers, the report said.

The latest investigation looked deeper into supply chains following a letter sent September 25^th by the NGOs to the 49 brands requesting information about pollution management issues at materials suppliers.

Besides IPE, authors of the report were, Friends of Nature, Green Beagle, Envirofriends and Nanjing Greenstone

In all, 22 of the brands receiving the letter, including Marks & Spencer, Disney, J.C. Penney, Polo Ralph Lauren and Tommy Hilfiger gave limited or no responses to specific questions relative to emissions violation problems in their supply chain. This despite Marks & Spencer, for example, promoting its “Plan A”, which is a sustainable business benchmark for global textile companies and retailers.

Companies promoting sustainability should “not continue to let suppliers pollute the environment and hurt communities whilst using concepts such as ‘zero waste’ and ‘carbon neutral’ to greenwash their performance,” the environmental NGOs wrote in the report.

The report draws attention to the fact that textile exports from China have dropped recently, weighed by higher labor costs in China, trade barriers, the appreciation of the RMB and higher resource costs.

Big brands have moved some of their cut and sew production to South and Southeast Asia. Nike shut down its only shoe factory in China and recently, Adidas also closed its only factory in China, leading people to believe China is steadily losing its status as the textile factory to the world.

But materials production is still concentrated in China, with exports of these products rising steadily, according to the report. This is the most polluting portion of the apparel supply chain.

In the raw materials processing sector, which includes dyeing and finishing, exports are growing steadily. According to the 2011/2012 China Textile Industry Report, for the six main printing and dyeing product categories, the total amount of exported printed and dyed cloth was 14.412 billion meters which showed a year on year growth of 13.76%.

The value of exported printed and dyed products was US$16.979 billion, which showed a year on year growth of 31.26%. However, at the same time the total value of all exported textile products only increased by 0.49%.

The cut and sew industry provides the most jobs, uses less water and energy and pollution discharge is not a big problem. However, the reverse is true for textile production. Essentially, China has kept the dirty part of the business, while allowing the relatively clean, job-creating cut and sew industry to wane.

The problem is that enforcement of pollution remains weak in China, while the cost of inputs like water and energy are still relatively low. So dyeing and finishing companies often avoid any water or energy savings initiatives and disregard pollution control, ignoring environmental laws and regulations.

Sustainable apparel in particular, has a ”dangerous blind spot,” according to the report, which means that dyeing and finishing mills and factories lower their environmental standards to cut costs and win orders in a race to the bottom.

Essentially the problem is that most apparel and retail brands still choose not to look into the polluting part of their business – the bottom of the supply chain. Consequently, materials manufacturers are still trying to produce in the cheapest way possible in order to keep costs low for fast fashion.

We as consumers must recognize that we have a choice not to buy the cheapest item on the shelves, to acquire less and from companies that truly care about not doing harm to our planet.

In air pollution, carbon, China, china water, Environment, pollution, Uncategorized, water admcf, apparel, carbon, china, Environment, pollution, textiles, water

New Ocean Health Index Shows Global Oceans Score Poorly

Lisa Genasci — September 16, 2012 — Leave a comment

We know that our oceans play a critical role in assuring human wellbeing, providing food, livelihoods and recreation as well as helping to regulate global climates.

We also know that our oceans are in trouble, with many marine species headed for extinction. Ocean acidification, rising sea temperatures, rising sea levels, hypoxia, overuse of marine resources and pollution rank among the greatest challenges. All of these are well-discussed in a Stockholm Environment Institute study, Valuing the Ocean, which makes an important argument for valuing and protecting ocean services.

But how do we gauge the health of our oceans and marine resources – a daunting task given the many interlinked and complex benefits and threats?

Recently responding to this question, a broad group of marine conservationists and scientists released the Ocean Health Index,which is a sort of marine GDP, reflecting the health of our marine environments and how sustainably we are using them.

An account of the Index was published in the Aug. 30th issue of Nature.

The groundbreaking tool is not just a measure of how pristine the waters of any country might be, but rather considers how we humans benefit from our marine ecosystems and how our oceans are faring globally in terms of provision of services to us.

In search of baseline measures, scientists and marine experts calculated standards for the many ways we use the ocean. It comprises ten goals for a healthy human–ocean system in the waters of a country’s exclusive economic zone, which usually stretch 200 mile offshore.

The index now offers hard numbers to show how close or far each coastal country is to balanced use of the Big Blue.

The country goals for a balanced marine environment include clean water, food provision, carbon capture, biodiversity, coastal protection, recreational opportunities, artisanal fisheries, support of local economies, and a “sense of place.”

Globally, the overall index score was 60 out of 100, with developed countries largely performing better than developing countries. Only 5% of countries scored higher than 70, while 32% scored lower than 50.

Rather predictably, while northern European countries tended to score highly, much of West Africa, for example, did not score so well.

Researchers hope the Ocean Health Index will build awareness of the state of the world’s ocean, and work as a catalyst and guide for business and government decision-makers to develop effective policies promoting ocean health.

Researchers intend to release an updated version annually that responds to new data that will overtime refine the index.

The Ocean Health Index was developed with the contributions of more than 65 ocean experts including the National Center for Ecological Analysis and the Synthesis and the University of British Columbia’s Sea Around Us project. Founding partners are Conservation International, The National Geographic Society and The New England Aquarium.

In Environment, Fish, Food, health, Marine, pollution, water Conservation International, National Geographic Society, New England Aquarium, Ocean, Ocean Health Index, Sea Around Us Project, Stockholm Environment Institute

Moving Beyond GDP: Valuing Nature

Lisa Genasci — June 21, 2012 — 2 Comments

One of the more important conversations that emerged from June’s Rio+20 Summit was around valuing natural resources and, ultimately, moving our economies beyond GDP as a sole measure of growth.

The concept is not a new one but it did seem gain traction. Included among the side events on one day alone were at least two standing-room-only sessions on the topic: “Measuring the Future We Want” and the Natural Capital Summit.

In Measuring the Future, the panel recognized that over the last 20 years we have seen poverty decline but at the cost of growing environmental challenges. The call was for governments to institute a framework for natural capital accounting.

The Natural Capital Summit, meanwhile, featured speeches from Britain’s Nick Clegg and Norwegian Prime Minister, Jens Stoltenberg, as well as remarks from the presidents of Gabon and Costa Rica, illustrating clearly the level of interest in the topic.

“How to value nature is one of the most important political decisions,” Stoltenberg said, shortly after Clegg had talked over a masked heckler, accusing world leaders and the World Bank of commoditizing nature.

Despite the mask and the point well taken about assigning value to nature, the reality is not so simple. As we have it now, few benefit from our forests, oceans, our extractive industries and water. The costs of pollution are borne by us all rather than the polluter.

This creates a world where we are rapidly depleting our natural resources for the enrichment of a few, and economic growth, as measured by GDP, is vastly inflated.

Both Rio+20 side sessions were short on answers or plans of action, despite some participants stating the desire to help international gatherings move beyond declarations – something that is sorely needed.

As a path toward action, however, also at Rio, the United Nations Environmental Program (UNEP) and the UN Environmental Program, the International Human Dimensions Programme on Global Climate Change (IHDP) introduced the Inclusive Wealth Index.

The idea is to consider a country’s assets to get a better picture of a country’s wealth and the sustainability of its growth. In reporting every two years, IHDP will calculate the IWI for 20 countries that together account for almost three-quarters of global GDP.

Unsurprisingly, the first report showed that despite strong GDP growth, the United States, China, Brazil and South Africa had significantly depleted their natural capital base. This was calculated as the total of renewable and non-renewable resources such as fisheries, forests and fossil fuels.

Again, not surprisingly, China showed the most dramatic difference between GDP and IWI. GDP growth alone was measured at 422 percent between 1990 and 2007 but IWI measured over the time was just 45 percent.

The report also showed that future growth, as measured by IWI, was dependent on the sustainable use of resources since all countries surveyed had a higher share of natural than manufactured capital.

The key factor here is that countries are using their natural resources faster than they can be replenished, thus challenging future economic development.

The strong sense in Rio was that governments need to step in to create a policy framework by which natural capital can be valued in order for real change to happen. The private sector, of course, wants a level playing field.

Meanwhile, some leading companies that are among the biggest beneficiaries of natural resources and free pollution, also stepped into the discussion this week in Rio.

Twenty-four of them, including Cocoa-Cola, Xerox, Dow Chemical and Kimberly-Clark announced a four-step framework for a methodology that would value natural resources.

Two-thirds of our planet’s land and water ecosystems are now significantly degraded thanks to human activity and climate change is only accelerating the damage. The UN estimates that mismanagement of natural assets costs the global economy an estimated $6.6 trillion a year or 11 percent of GDP collectively.

According to the report, these costs are expected to reach $28 trillion by 2050 and threaten core business interests through potential supply chain disruptions or costly substitutions, regulatory or legal risks.

KPMG has estimated that if companies had to pay for their own environmental bills they would lose 41 cents for every $1 in earnings.

The text of Valuing Natural Capital acknowledges that “each year our planet’s land and water systems produce an estimated $72 trillion worth of “free” goods and services essential to a well-functioning world economy.”

Because these are not bartered and sold in the marketplace it is hard to assign them with a value or corporate or government financial statements. “As a result this value has been largely unaccounted for in business decisions and market transactions.”

But this is starting to change, according to the document, with, “business executives recognizing the business imperative of safeguarding them.”

Among the natural goods and services on which the global economy was seen to depend are: Clean water and air; affordable raw materials and commodities; fertile soils; fisheries; buffers to floods, droughts, fires and extreme weather; barriers to the spread of disease; biological information to propel scientific and medical breakthroughs.

Still, the report although strong on the challenges is short on how natural resources will actually be valued.

Puma has been a leader in this field. Last year the company introduced an environmental profit and loss screening that represented an interesting step toward assigning economic value to resources consumed, to emissions and toward determining the true cost of production for the apparel and shoe brand. I have written about this here.

Finally, also this week the leaders of 37 banks, investment funds and insurance companies agreed to take better stock of the stress put on ecosystems by the economic activity they manage, and work towards integrating natural capital into products and services.

The Natural Capital Declaration is once again short on detail, but at least represents an acknowledgement of the issue.

In air pollution, carbon, China, Environment, forests, pollution air pollution, carbon, conservation, Environment, Gross domestic product, Natural capital

Dancing in Rio – Some People are Having Fun

Lisa Genasci — June 20, 2012 — 4 Comments

In Rio this week up for discussion and negotiation (mostly negotiation) is a 49-page draft document that aims to establish clear sustainable development goals and action to achieve them.

The United Nations Conference on Sustainable Development, better known as Rio Plus 20, marks 20 years since the Earth Summit, which at the time was the largest gathering of heads of state ever to talk about environmental challenges.

This time, the agenda has been softened to be about sustainable development, with an emphasis on development. Indeed, some people here don’t seem to believe that environment really plays any part in the conference. Earth isn’t anywhere isn’t mentioned – despite that this is clearly supposed to be a follow-on to the earlier event.

Yet it’s hard to imagine how the discussion of sustainable development can take place without careful consideration of our natural environment.

The reality and the urgency is that our world’s population is expected to rise from its current 7 billion to more than 9 billion in 2050. That’s scary in a world where already an estimated 3 billion people don’t have clean water to drink and 14 percent of our planet, to adequate food.

According to the final version of the Rio Plus 20 Common Vision submitted today under the title, The Future We Want, one in five people, over 1 billion people, still live in extreme poverty. By 2050 two-thirds of our world will live in cities.

So where we find food and water for another 2 million people in 38 years is the crux of the challenge and one that really can’t be denied, regardless of political leaning.

And we live in Asia, where most of that future population growth is expected to occur. This places the challenges front and centre for those of us engaged in work to combat environmental challenges and with communities without adequate means to survive.

Despite the enormity of the task at hand, however, few here in Rio are optimistic that real change will come from or be led by the conference.

The Brazil delegation worked hard in recent days to ram through a document that is in essence hollow, fearing more than anything a repeat of the Copenhagen disaster when no one could agree on anything.

I guess the sense is that if they can at least agree on nothing meaningful that’s better than agreeing on nothing at all over the three-day official proceedings, which begin Wednesday?

The conference document finalized today was, “the result of intensive and prolonged negotiations,” according to the press release, and is a “compromise text,” in which, “countries have had to both give and take to achieve progress.”

The text is to be approved by heads of state at the conference conclusion on Friday. Significantly, Barack Obama, David Cameron and Angela Merkel will not be present in Rio.

Still, the text does include a commitment at least to the concept of sustainable development and recognition that eradicating poverty is one of our greatest challenges. It emphasizes the urgency around “freeing humanity from hunger and poverty”.

The text establishes the clear linkages between sustainable development and the environment, between sustainable development and the means to bolster our struggling economies, and emphasizes the value of public-private partnerships.

Sadly, the hope that this translates into government action is absent from the jaded community spending long hours being bused among several distant event locations in fancy and frigid coaches that have nothing to do with sustainable development other than collective transport.

Part of the skepticism also derives from the fact that the earlier Rio conference ended with two treaties aimed at curbing emissions of greenhouse gases and conserving biological diversity that have since languished amid lack of political will.

There is, additionally, a certain exhaustion generally with the promotion of international frameworks to make sweeping change toward environmental progress.

Those just have been too hard to achieve in our economically challenged world that doesn’t yet seem to link better development, protection of our natural world and an improved economic environment.

like the posh buses, the main conference venue itself is a reflection of misunderstanding of the challenges we face. The huge Riocentro is two hours in traffic from Ipanema and Copacabana, where most participants are staying.

There, air conditioning blasts through huge buildings that are no model of efficiency – either in space or energy consumption.

At the same time, Rio Plus 20 is largely white and male – at least this is particularly true of the official and business delegations. Amongst the NGO community, women are better represented.

At the alternative youth summit in Flamengo, three hours from Riocentro in traffic and closer to Rio’s pulsing centre, the situation is considerably different.

Here, the youth and community-connected people are basing themselves, including many of the smaller NGOs – and diversity is evident in the variety of national dress, skin hues and music that accompanies many events.

In a long stretch of tents, people gather for animated discussion or to listen to seminars on topics related to conservation and sustainable development. Here, the environment is very much present although it’s hard to see where, concretely, the discussion will lead.

Official delegations are noticeably lacking these communities – the NGOs and youth. This is despite the final text emphasizing wide agreement among business, NGOs and government.

Perhaps one bright light here in Rio seems to be the talk on many levels of the importance of valuing our natural resources. Companies, NGOs and governments alike seem to recognize the need to bring environmental value into economic decision-making.

And engaging the private sector, governments, communities in this important dialogue, in partnerships to achieve results, is key to real change. As always in large gatherings it’s the back-room learnings and discussion that are the real drivers for change.

In Environment, forests, pollution, water admcf, air pollution, carbon, community development aid, conservation, Environment

Hong Kong’s Water Supply Far From Secure

Lisa Genasci — May 13, 2012 — 4 Comments

I am constantly surprised that Hong Kong does not pay more attention to its water supply, that something so vital to our city is far from secured by our government.

How many of us know that 75 percent of our water comes from the Dongjiang River, while only 25 percent of the city’s drinking water is supplied by reservoirs from within the territory? That while Singapore has similar water concerns, the island nation is investing in technology to conserve, recycle and desalinate water to ensure adequate supply, yet our government simply is not.

This is wrong for many reasons but here are two of the most obvious:

1) China is experiencing a significant water crisis and is acting aggressively to ensure its own supply. As Civic Exchange’s Su Liu recently pointed out while speaking on a panel, “We in Hong Kong don’t see the big picture – 40 million compared to our 7 million also rely on the Dongjiang. If water tensions rise on the mainland – where is the priority? ” You can more read about the excellent discussion on China’s water stresses moderated by http://www.ChinaWaterRisk.org’s Debra Tan, here.

2) The Lower Dongjiang River Basin is becoming intensely industrialized and urbanized meaning industrial pollution regionally is a real concern. At the same time, agriculture further inland has intensified and pollutants from farms, such as pesticides and fertilizers are just as dangerous in drinking water as industrial materials. So How safe is our water in reality? Clearly local testing shows that currently the water we drink meets health standards but can we be sure that will always be the case?

To my first point, China registers a 50-billion-cubic meter water shortage annually, with two-thirds of cities having trouble accessing water, according to a China Daily article last week quoting Chen Lei, the country’s minister of water resources. In all, China’s water consumption apparently has exceeded 600 billion cubic meters, accounting for 74 percent of the country’s exploitable water resources.

In January, the central government issued a document asking the entire country to limit the scale of water exploitation, improve the efficiency of water usage and curb water pollution. According to the article, China aims to reduce water consumption per 10,000 yuan ($1,597) industrial value-added output to less than 40 cubic meters by 2030, raise the effective water use coefficient of farmland irrigation water to above 0.6 and improve water quality.

Chen also has said the nation will set water consumption quotas for local governments and continue to perfect the water price formation mechanism in order to promote water resource conservation and protection.

So it sounds as though Su Liu has the right idea – the Chinese government priority won’t be to keep prices low and supply constant for the 7 million Hong Kongers drawing ever higher upstream on the Dongjiang.

And we are vulnerable. Our water agreement with Guangdong was renewed in late 2011 but only for another three years, until 2014 and for a maximum supply of 820 million cubed meters from the Dongjiang, a major tributary to the Pearl River, 83 kilometers north of Hong Kong. Our current accord commits to this supply regardless of drought. But the river also supplies fresh water to seven other cities, including Guangzhou, Dongguan and Shenzhen. All of those cities, however, have seen allowances decreased during drought years so will Hong Kong continue to receive privileged treatment?

At the same time, we would be ill-equipped for any water rationing. As China Water risk has pointed out here, Hong Kong uses more water per capita than Paris, London, Singapore or Melbourne and over 50 percent of our water is for domestic use. This compares to just 15 percent of water usage in China being for municipal use.

Part of the problem is that our tariffs are among the lowest in the world. As CWR points out, the first 12 cubic meters of water used every four months is free for all domestic users. Countries with comparable GDP per capita such as Netherlands, Switzerland and the U.S. all have higher water tariffs.

But tariffs are also low in China and the expectation is that with a push on the mainland toward water conservation, pricing will likely at some point rise to a water tariff level of 2-3 percent of average household income. That should also translate to higher prices in Hong Kong.

Turning to pollution, I have written several blogs on the lack of enforcement of water quality standards in China. The intense industrial development throughout China, but particularly in the south, has helped fuel annual GDP growth in the double digits but it has also rendered many rivers, lakes and reservoirs, indeed much of the country’s groundwater, essentially useless for agriculture or consumption.

Of the country’s 26 key lakes and reservoirs monitored, only 23 percent fall within grade 1-111, while 19 percent of China’s seven major river basins monitored are considered essentially useless. Finally, almost 74 percent of groundwater is considered grade IV-V standard, or excessively polluted. More information on China’s water pollution can be found here.

We should remember that a river collects the water in its basin and that means that all the pollutants within the Dongjiang Basin could potentially end up in Hong Kong’s water supply – not a pleasant thought. Will we have to wait for a major accident on the Dongjiang or its feeders before the Hong Kong government wakes up to our vulnerability?

For now, Hong Kong water quality data, although only through September last year, can be found here, on the Water Supplies Department website.

Hong Kong consumers have the ability to sustain a significant tariff hike. That would help us move toward greater water conservation and at the same time provide the resources for the city to invest in making options such as desalination and water recycling economically viable. What are we waiting for?

In China, china water, Environment, health, Hong Kong, pollution, water china, Drinking water, Hong Kong, pollution, Water resources, Water supply

Environmentalists Name and Shame Global Fashion Brands

Lisa Genasci — April 13, 2012 — 1 Comment

Five Chinese environmental groups have named 48 global fashion brands using polluting factories in China and suggested consumers make a “green choice” when buying clothes.

A report led by Ma Jun and his Institute for Environmental and Public Affairs and released this week lists 6,000 water pollution violations by manufacturers of goods that ranged from sports apparel to luxury handbags.

Brands were linked to the factories over seven months of painstaking review of official websites, financial reports, recruitment ads and procurement bids, among other documents, according to IPE.

Over the past eight years the Institute has gathered a database of over 90,000 air and water violations from official government sources. IPE now works with many brands to make sure they are not using polluting suppliers and to help clean up those that are illegally dumping untreated toxic waste water into rivers.

Between march 22 and March 29 the five environmental groups wrote to the CEOs of each of the 48 brands linked to factories with repeated environmental violations. They asked the brands to ensure their Chinese suppliers would not pollute the environment while manufacturing their products.

While some of the brands named immediately responded to queries from the environmental groups, acknowledged the issues and detailed how they would address the issues, about two-thirds have not yet engaged, Ma Jun said.

Notably, Spanish clothing retailer, Zara, responded by saying that it was not the company’s policy to answer questions about its business model.

Nike, Walmart, Esquel, H&M, Levi’s, Adidas and Burberry were among the companies that responded positively, saying they would work with their Chinese contractors to improve their environmental performance. Many of these brands were already working with NGOs to clean their supply chain, IPE said.

Another 32 brands including Marks & Spencer, Esprit, Calvin Klein, Carrefour, Armani and China-based Anta and Youngor have yet to respond, according to the report.

Besides IPE, the other authors of the report, “Cleaning up the Fashion Industry,” were, Friends of Nature, Green Beagle, Envirofriends and Nanjing Greenstone.

China is a global leader in textile manufacturing, responsible for nearly half the world’s fiber and exporting 34 percent of the garments we wear.

This production has contributed significantly to the country’s GDP but has also taken a heavy environmental toll locally. Ma said that fashion manufacturers discharge 2.5 billion tons of waste water and chemicals into rivers and the ocean, while 80 percent of effluent is generated in fiber dying.

This has a serious impact on the country’s water supplies and is compounded by the fact that the re-use of water in the textile industry lags way behind that of many others, creating a situation where water efficiency is incredibly low, IPE said.

Among the 6,000 violations, a number of factories were given administrative penalties. Many were told to rectify problems such as illegal effluent emissions via secret discharge pipes, directly discharging waste water into waterways, improper use of waste water treatment facilities and pollutant discharges in breach of standards.

Previously, IPE targeted the IT sector, also with information gleaned from the institute’s violations database. We have written about Ma Jun’s efforts here and here.

After five reports looking at the environmental performance of IT sector contractors, most of the brands named had responded to requests for information disclosure and action.

Among the last hold-outs was Apple, which was the focus of the last two reports. The company has since agreed to disclose its connections to suppliers and provide information on contractor environmental performance.

Clearly, Ma Jun and his colleagues hope for a similar response from another industry that is widely credited with some of the worst environmental performance in China.

With IPE and others watching, retailers and brands will no longer be able to hide behind stated ignorance about how a product is manufactured. They will no longer be able to refuse to divulge lists of suppliers or deny responsibility for egregious environmental emissions locally.

Part of the problem for the apparel sector has been the quantity of suppliers used to manufacture just one item of clothing or shoe. This is a problem we have written about here.

While many brands are getting better at understanding and working with the factories actually putting together the clothes, they tend to know less about the dyers, the spinners and the knitters who cause much of the environmental damage.

yet engaging with polluting contractors in any part of the supply chain has become a serious reputational risk and thus business risk for global brands hoping to squeeze their suppliers on cost.

It is also a wake up call for consumers hooked on cheap product made at huge environmental expense abroad. It’s about time we all made careful choices about how we consume, make sure that brands are using responsible suppliers.

For companies, the argument turns back to fiduciary duty and redefining what that means, something I have written about here.

In asia, China, china water, Environment, health, pollution, Uncategorized Apple, china, Ma Jun, pollution, Supply chain

Pressure Builds on Apple to Improve Suppliers’ Labour, Environmental Performance

Lisa Genasci — February 1, 2012 — 1 Comment

Articles in the New York Times and elsewhere last week have criticized Apple for using Chinese suppliers whose workers are ill-paid, overworked and subject to hazardous conditions.

In a full-page spread, The New York Times compared Apple’s financial strength and reputation for innovation with a less-flattering portrait of how its products are made: “ …the workers assembling iPhones, iPads and other devices often labor in harsh conditions… Problems are as varied as onerous work environments and serious — sometimes deadly — safety problems.”

An “outraged” Apple CEO, Tim Cook, responded swiftly in a strongly worded email to Apple employees cited widely, “we care about every worker in our worldwide supply chain” and “any suggestion that we don’t care is patently false and offensive to us.”

The truth is, nothing like the manufacturing capability found in southern China now exists in the U.S. and nowhere in the U.S. could workers be relied on to dedicate the long hours under similarly challenging conditions. Recent attention has focused on Apple supplier, Foxconn, where the iPhone is assembled. The facility has close to a million employees, many working six days a week, often spending up to 12 hours a day at the plant. Many workers earn less than $17 a day. That clearly helps improve Apple’s margins.

U.S. news show host, John Stewart, last week described Foxconn as “Fear Factory” and detailed conditions at the factory, its treatment of employees, large dormitories of employees, repression of employees who try to unionize and nets around the buildings to prevent suicides. According to Stewart, the cost savings on an IPod is 23 percent to the consumer.

Understandably there is anger brewing in the U.S. toward companies such as Apple that employ tens of thousands of workers outside the United States to take advantage of lax labour laws abroad. There is a growing voice in the United States for a boycott of the ubiquitous Apple products.

In a separate article, the New York Times pointed out that Apple employs 43,000 people in the United States and 20,000 overseas and many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products.

When asked by President Obama last year about overseas workers and whether or not Apple products might be produced at home, Steve Jobs was quoted as replying that those jobs were not coming back to the United States.

According to the same article, the hugely profitable Apple last year, it earned over US$400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

The stories on bad labor practices by Apple suppliers, however, follow five reports from a coalition of now 41 environmental groups in China documenting the performance and willingness of IT brands producing in China to address serious environmental violations by their suppliers.

Many of the environmental violations have led to occupational safety issues and hazardous chemical exposure for workers.

In the first of the reports, the environmental groups contacted the CEOs of 29 top IT brands, asking specific questions about suppliers’ environmental performance and provided evidence of pollution violations. As they look to production abroad to skirt labour restrictions at home, companies look to avoid environmental regulation that should protect air, water and soil from excessive emissions.

The Chinese NGOs’ engagement process has from the start actually yielded fruit, with a number of brands such as HP and Samsung responding to requests for information and addressing issues in their supply chains. But a few, including Apple Inc., ironically were initially extremely slow in communicating, and less than willing to address the supply chain issues being raised

Hence, two of the reports, in January and August last year, focused specifically on Apple, which had failed to disclose adequate information relating to its suppliers or their environmental violations to the environmental groups, led by Ma Jun’s Institute of Public and Environmental Affairs (IPE).

Most of the recent negative stories about Apple and the building campaign against the company fail to even mention Apple’s environmental lapses – including the New York Times full-page story, except in passing.

The Chinese environmental NGOs campaign to improve disclosure and environmental performance by brands and their suppliers is something we have written about here and here – long before the Apple news became mainstream.

In a significant success for the NGO coalition, earlier last month, for the first time Apple’s annual supplier responsibility report released a list identifying many of its suppliers and acknowledging some of their environmental and labour violations first publicized by IPE.

Indeed, a look at the reports showed that more than half of the suppliers audited by Apple have violated at least one aspect of the code of conduct every year since 2007, and in some instances have violated the law, according to the New York Times Story.

IPE’s website list of non-compliant factories in China reached 94,725, while the Water Pollution maps now used by many brands to filter their supply chains and make sure they are not using polluting suppliers, registered 6,220,696 page views.

IPE is now working directly with 30 such brands to screen suppliers and 550 companies have responded to being placed on the polluters list by seeking dialogue with IPE.

Since releasing its list of suppliers and acknowledging environmental breaches, Apple has also agreed to continue conversations with IPE later this month and potentially to encourage two suppliers to engage in a pilot third-party audit monitored by the Chinese NGOs.

In all, 3,122 companies have undergone a third-party audit or a document review audit process and this has led to 94 companies being removed from the polluters list.

In air pollution, china water, pollution, Uncategorized Apple, china, IPad, iPhone, New York Times, Supply chain, Tim Cook

The HK Government Disappoints Again on Air Pollution Measures

Lisa Genasci — January 18, 2012 — 3 Comments

This is what the air should look like in HK but rarely does Photo by Ella Smith

Hong Kong finally has found its voice amid government inaction to clean our air and protect our health. And long may it last – at least until we have real action to address the pollution.

Newspapers this morning featured banner headlines on air pollution, including the SCMP’s “Clean-Air Targets Don’t measure Up” and then inside, “Gasp it’s Worse Than we Thought.”

Yesterday, the government said it would toughen its clean-air targets for the first time since 1987, but only marginally, and admitted they will still fall far short of World Health Organization standards.

And this four-and-a half-years after first engaging a consultant to review air quality objectives then launching a six-month public consultation that ended in late 2009. The environment secretary sat on the recommendations until yesterday and they were announced unchanged – by the consultation or time.

The new objectives impose tougher limits on the atmospheric concentration for seven pollutants including sulfur dioxide, nitrogen dioxide, carbon monoxide and lead.

For the first time the city also will measure airborne particles smaller than 2.5 micrometres in diameter, known as PM2.5. These are more harmful than the larger particles currently measured.

The government apparently also has identified 22 measures to help achieve the new standards, which are to be introduced over a three-year period after 2014. This will allow infrastructure projects to proceed without delay.

Thus the government, in reality, will allow our air to be made even dirtier while it finishes some mammoth construction such as the Hong Kong-Zhuhai-Macau bridge and a third runway at the airport.

Oh, and the steps to be taken apparently will extend the life expectancy of the average person in Hong Kong by one month.

Secretary for the Environment, Edward Yau, was quoted in the South China Morning Post as saying, “We have to understand that the ultimate WHO guidelines are a distant target” and pointing to regional pollution as the principal source of pollutants.

Yet 2007 research by Alexis Lau from the HK University of Science and Technology and Civic Exchange, “Relative Significance of Local Vs. Regional Sources: Hong Kong’s Air Pollution,” showed that 53 percent of the time the pollution that affects us most is locally generated by buses, trucks, shipping and power plants.

The basic, undisputed message for a long time has been, Hong Kong can do much to clean up its own air and improve the health of its residents.

Despite this, little has been done in recent years, despite urging from Clean Air Network, Civic Exchange, Friends of the Earth and many other environmental groups.

And herein lies the paradox: The HK government speaks and acts as though we are a developing nation, yet HK is one of the world’s richest cities. The government sits on reserves estimated at US$80 billion.

We are so rich in fact that last year the government announced that it would give a cash handout to each adult permanent resident (even those living abroad and those who patently did not need the extra money), of HK$6,000, or US$700. That massive handout cost the government HK$37.98 billion that certainly could have been used to better effect to clean our air.

Meanwhile, Roadside pollution levels reached a record high last year. The number of days that pollution was rated “high” hit 20%. That is five times more than in 2005. And, embarrassingly, the HK government is clearly playing catch up to Beijing, which in response to an online campaign earlier this month said it would provide hourly updates of PM2.5 measurements.

Clearly gone are the days when Beijing looked to Hong Kong for direction and innovation.

Meanwhile, the Civic Exchange yesterday said a revamped environmental index run by Hong Kong University researchers showed that air pollution here is more harmful than previously thought, costing HK$40 billion annually, up from previous estimates of HK$16 billion.

The number of premature deaths per year over the past five years should also be revised upward to 3,200 from 1,000, according to the Hedley Environmental Index. This, of course, is not information that the HK government is gathering.

The sad reality is that Hong Kong’s air has been deteriorating steadily over the past 20 years with almost no action by government to alter the trend. Pollution now poses a serious threat to public health and we should be angry, very angry.

In air pollution, asia, carbon, Environment, health, Hong Kong, Philanthropy, pollution admcf, air pollution, asia, Civic Exchange, Clean Air Network, Environment, Hong Kong, social impact, World Health Organization

Another Step Toward a Shark Fin Free Hong Kong

Lisa Genasci — January 18, 2012 — Leave a comment

Yesterday the Shangri-La took the courageous step of declaring that effective immediately, the group’s 72 hotels and resorts would no longer serve shark fin in any restaurants or at wedding banquets.

The announcement falls under the company’s new sustainable seafood policy, which also includes a decision to phase-out Bluefin tuna and Chilean sea bass in all hotel restaurants within the year.

In a press release, the hotel said that in December 2010 the company initiated the process of becoming shark fin free with the removal of shark fin products from its restaurant menus. “The new policy is a continuation of Shangri-La’s journey towards environmental support,” the release said

This follows the Peninsula Hotel’s decision in November last year to stop serving the soup in its restaurants and at wedding banquets as of January 1st this year.

The hotels should be applauded for their actions, which were not easy in a city that sees 50 percent of the global shark fin trade and where consumption of the soup at special events has been second-nature. Here, shark fin soup is seen as a symbol of wealth and prestige and consumed most often at weddings and corporate banquets.

Yet as the consumption of the soup has increased in recent years with greater affluence in Asia, shark populations have dwindled. In some species. populations have declined by as much as 90 percent. As many as 73 million sharks are caught annually, with millions of these believed caught for their fins alone.

Shark flesh is not a high-value meat, while dried fins can be sold for as much as $300 a pound. A bowl of the soup in Hong Kong can fetch as much as $100. Thus is some cases, shark are finned at sea with the bodies thrown back to drown in a practice that is both wasteful and cruel.

Bloom, the HK Shark Foundation, WWF and other conservation groups have been working hard in Hong Kong over the past few years to educate consumers and the trade about the ramifications of declining shark populations for our oceans.

The work has included research to understand both the cultural attitudes toward consumption of shark fin soup and the trade in shark products; educating the hotels on biodiversity issues related to sharks and learning about the challenges of ceasing sales of shark products; encouraging consumers to consider shark fin free weddings; encouraging companies to sign a pledge not to serve shark fin soup at banquets.

Despite a swell action from local and national governments worldwide to ban consumption of shark fin products, the Hong Kong government (consistent with its course of rarely acting in public or conservation interest) has refused to consider any such action – even a ban on serving at official banquets.

In reality, the assumption is that because of the cost, little shark fin soup is actually served at official banquets in Hong Kong and indeed government officials have alluded to this.

Certainly, however, with the growing awareness around threats faced by our oceans, the sense of inevitability of action as shark populations decline, the government must now be feeling the heat.

Last week the HK Marine Products Association was certainly feeling the heat. The trade group placed half-page ads in leading Chinese publications titled (in English translation) “Is eating Shark Fin Guilty?” and arguing that

Shark fin is simply a by-product of the shark fishing industry
CITES bans trade in only four species therefore fishing should be allowed in others
Any conservation of a species should be based on scientific evidence not emotion
States the MPA uses resources sustainably and contributes to conservation

Clearly, shark fins, for reasons stated above are not by-products of any shark fishing industry and clearly conservation of a species should be based in scientific fact, which exists and is documented: sharks are in significant decline.We would welcome any communication from the MPA related to their sustainable practices and conservation work.

The CITES issue mentioned in the ads is an interesting one and is raised frequently by the MPA, as well as both the HK and Beijing governments, which hide behind the treaty. The main point here is that CITES is not effective in protecting shark species globally and should not be used, counter-intuitively, as a a justification to fish endangered

CITES was drafted as a result of a resolution adopted in 1963 at an IUCN (The World Conservation Union) meeting and entered into force in 1975 as an international agreement. Today, it has 175 signatories.

Its aim: to ensure that the international trade in wild animals and plants does not threaten their survival. The CITES mechanism to achieve this is by placing trade restrictions on species at risk. The Convention is, therefore, undoubtedly an important wildlife conservation agreement.

Yet CITES only includes three species of shark, despite that according to IUCN 143 species are threatened with extinction, either now or in the near future.

So why should a conservation agreement exclude threatened species? The answer lies in the fact that for a species to be bought under CITES trade restrictions, the signatories must vote.

In 2010, for example, six shark species were proposed for inclusion in CITES. Countries with vested interests in the shark trade, such as Japan, bargained with fellow signatories to ensure that highly lucrative species, albeit critically endangered, were not included in the Convention’s regulatory appendices. Science and sustainability clearly gave way to commercial interests.

In Hong Kong, CITES remains the only mechanism for regulating the shark fin trade and to make matters worse its implementation is unclear.

The Agricultural, Fishery and Conservation Department (AFCD) of the Hong Kong government is responsible for monitoring the trade in endangered plant and animal species.

Currently, visual identification is a commonly used to identify imported plants or animal species. While this may be appropriate for many species, it is extremely difficult, in practice, to determine the shark species from a fin without the carcass, and even more difficult if the fin has been bleached or processed. It is understood that AFCD do not carry out any DNA analysis.

Thus, CITES clearly is not an effective mechanism to monitor the shark fin trade in Hong Kong.

Scientific research based on DNA testing shows that in 2006 approximately 40% of the auctioned fin weight in the Hong Kong market came from 14 shark species listed on the IUCN Redlist of Threatened species.

So bravo to the Shangri-La and the Peninsula hotels for taking action, the 112 companies in Hong Kong that have signed the WWF pledge not to sell or buy shark fin as part of their corporate activities.

Going shark free is a groundswell here and abroad that we certainly hope will continue in time to save the apex predators and our oceans.

Redefining Fiduciary Responsibility

Lisa Genasci — December 29, 2011 — Leave a comment

I’ve been thinking recently about Fiduciary responsibility and what that has come to mean over the past two decades of rapid growth.

I’ve been thinking about how and why the interpretation that has crept into investment culture over that period – simply to maximize rates of return – has slowed an appreciation of investment that doesn’t cause social or environmental harm.

It goes without saying that this has also slowed investment that promotes social good as well as generating returns.

I’ve also been thinking that by itself this narrow interpretation ignores both business risk and opportunity – neither of which should be ignored considering the dictionary definition of fiduciary duty: to act prudently.

Writing in a Capital Institute blog, Stephen Viederman, former president of the US-based Jessie Smith Noyes Foundation, argues that foundations should align program work with investment strategy – something that is all too rare.

“Foundation fiduciaries have an obligation to seek ‘good’ and ‘competitive’ returns, not necessarily to maximize them,” he says.

Part of the problem has been the accompanying “myth of financial underperformance from ‘social investing,’ a myth that still lies at the heart of the problem for finance committees who conveniently forget that two-thirds of traditional active managers underperform their benchmarks every year,” Viederman says.

“Yet the profit-maximizing argument–that you will underperform if you do sustainable investing–comes up time and time again in conversations and is never examined by the people who are making it.”

Indeed, most investors are not considering the business risk associated with investing, for example, in a power company, a textile operation or mining business in a region that is water scarce.

Most ignore the reputational risks associated with investing in factories or plants that are polluting, overly consumptive of resources, or engaged in bad labor practices.

“All investments are about the future, but most investment decisions are made on retrospective data, which as fund offerings make clear, are not predictors of future earnings,” says Viederman.

“We need to ask about … ‘predictable surprises,’ which include climate change, the BP Gulf disaster and the financial bubble among others. …Any institutional investor who ignores them is in breach of their fiduciary duty. To be prudent, as in the prudent person, is in its original meaning, to be farseeing.”

The ADM Capital Foundation launched a web portal, China Water Risk, in October to provide investors and companies with information about water scarcity and pollution in China.

Part of the thesis behind the initiative is that better investment decisions produce better returns in the long run and these usually come with more information – and not the information investors traditionally have sought.

But, certainly, few could disagree that the regulatory environment is changing to reflect resource consumption and that water pricing in the near future will reflect scarcity.

Few could disagree that NGOs are increasingly sophisticated in exposing pollution incidents (see my blog posts on IPE’s Ma Jun and Apple, on Greenpeace’s Dirty Laundry and other reports) and that local protests in China are growing around pollution incidents.

Workers are no longer content to suffer exposure to hazardous chemicals silently, or work extraordinarily long hours without proper compensation.

All are, potentially, a drag on profits. Would it not then make sense for fiduciary duty to include analysis of such risk?

Fully Risk-Adjusted Returns (FRR), as they might be called, should certainly not be lower as a result, indeed given the current and future challenges the world faces, they could even be enhanced by additional information.

For those who missed this, one company that is looking to consider the impact of production is PUMA, which earlier this year announced the results of an unprecedented environmental profit and loss screening.

This was a big step toward assigning economic value to resources consumed and to emissions. The value assigned was also a step toward determining the true cost of production of PUMA apparel and shoes.

Results from PUMA's Environmental Profit and Loss Analysis

The analysis showed that raw material production accounted for the highest relative impact of Greenhouse Gas Emissions and water consumption within PUMA’s operations and supply chain.

According to PUMA’s report, the direct ecological impact of company operations translated to the equivalent of 7.2 million euros of the overall impact valuation. An additional 87.2 million euros was distributed along the four-tier supply chain.

Thus, the overall environmental impact of GHG and water consumption amounted to 94.4 million euros. That compares to a third-quarter net profit of 82 million euros.

“By putting a monetary value on the environmental impacts, PUMA is preparing for potential future legislation such as disclosure requirements,” the company said.

“By identifying the most significant environmental impacts, PUMA will develop solutions to address these issues, consequently minimizing both business risks and environmental effects.”

Finally, a new and important report from IESE Business school, “In Search of Gama, an Unconventional Perspective on Impact Investing,” steps into the discussion with questions such as:

By focusing exclusively on the creation of financial wealth for individuals are financial markets destroying value for society?
Is social responsibility a component of investment that is necessarily detrimental to financial return?
Should changes be made in the taxation and supervision of financial transactions to account for financial markets’ responsibility to society?

Clearly, business as usual is no longer smart business and change is imminent. Considering the impact of investments and reconsidering how we make investment decisions will be the way forward.

Let’s start by redefining fiduciary responsibility, considering Fully Risked Returns. Clearly, returns may actually be enhanced either when viewed through the lens of an appropriate risk framework/weighting or in reality as a result of a superior business environment.

Gaining Traction in the Race to Protect Sharks

Lisa Genasci — December 11, 2011 — Leave a comment

I’m still surprised when other conservation funders or even NGOs ask us why we work to protect sharks, indicating that this is a “single-species” issue among a platform of ADMCF initiatives that generally is much broader in tone.

I’m surprised when we have to point out that there are at least 440 species of sharks and that as apex predators they are critical to the health of our oceans. This is in no way a single-species issue and ultimately is integrally connected to the health of our commercial fisheries.

The initiatives against consumption of shark fin soup we support have much more to do with protecting our oceans, which are in significant decline. At least a third of shark species are threatened with extinction and some species have dropped in numbers by as much as 90 percent in recent years.

Sharks cannot easily recover from overfishing because they reproduce slowly, taking years to mature and producing few offspring. If we continue to fish shark at current rates, they simply won’t be part of our ocean life in the not too distant future, with potentially disastrous consequences for us all.

For 400 million years sharks (despite their negative image largely, thanks to Jaws) have helped to maintain and regulate the balance of our marine ecosystems. We don’t know exactly what our oceans would look like without sharks but we do know there would be significantly less biodiversity. Studies have shown that regions where there are more apex predators have more biodiversity, while areas without them show clear absences.

Still, every year perhaps as many as 73 millions sharks are caught – tens of millions of these for their fins alone. Although many sharks are landed and brought to shore with their fins attached, in order to save space on fishing boats, in many instances sharks are finned at sea and the body is discarded into the oceans, meaning the sharks drown. Any food value in the large body is wasted.

And Based on FAO statistics, global shark catches are likely to be underestimated by an astonishing three to four-fold.

Hong Kong plays an important role, with 50 percent of the shark fin trade passing through the city – much of it re-exported legally or illegally to China and the rest consumed locally, mostly at wedding or corporate banquets in soup.

Shark finning is an issue that ADMCF has been working with local conservation groups to highlight and advocate against in Hong Kong. Over the past five years we have supported research, appeals to the hospitality industry and rest of the corporate sector to stop serving and consuming shark fin soup.

With local organizations we have worked to build awareness among the general public about the biodiversity consequences of decimating our shark populations. Legislators have been approached to push the Hong Kong government to consider at least ceasing the consumption of shark fin soup at government banquets – something that in reality should be easy since the dish is expensive!

Ultimately, of course, we would all like the Hong Kong government to follow the world trend and consider a ban on the shark fin trade in Hong Kong.

Earlier this year, Bloom released important research on local attitudes to shark consumption that was publicized widely in local Chinese and international media. This research fundamentally changed the debate– from shark fin as an untouchable cultural issue to a global concern characterised by changing local attitudes.

And in an encouraging recent decision, the Hong Kong & Shanghai Hotels announced a ban on shark fin at all outlets including its Peninsula hotels as of Jan. 1. This was a major shift and key step in engaging Hong Kong’s leading hotels on a collective ban. Conservation International and Bloom Hong Kong are organizing a meeting of top Hong Kong hotel executives in January 2012 to discuss what initial steps they might take toward removing shark fin from restaurant menus.

Meanwhile, WWF and the HK Shark Foundation have managed to sign up more than 110 companies and industry groups in Hong Kong to a pledge not to serve shark fin soup or consume other shark products in the course of official business. Many others have privately committed to follow the ban but have asked not to named publicly.

Indeed, the number of shark conservation organisations in Hong Kong pressuring the government, the corporate community and the trade is at an all-time high. Social and mainstream media shows that public sentiment is shifting and the momentum against consumption of shark fin is continuing to build both here and abroad.

Increasingly people do understand the importance of sharks to our marine ecosystems. There is little doubt in most minds that protecting sharks is not a single-species issues.

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Rethinking Philanthropy (Lisa Genasci)

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China Cracks the Door Open To Environmental Reform

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Another Step Toward a Shark Fin Free Hong Kong

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