24 Oct 2014
Here you will find a round-up of all the latest news and events in mechanisms from around the world.
- Generation Fairtrade: Fairtrade products are particularly popular among young people, according to a recent survey. The research found that UK teens are highly sensitive to global issues and want to see businesses taking action to end poverty, inequality and climate change. “They have grown up with fairtrade products at home… so they are aware that by taking a simple actions such as buying fair trade… they can persuade businesses and governments to act more ethically,” says Michael Gidney, Chief Executive of the Fairtrade Foundation.
- A new index by CDP (formerly known as the Carbon Disclosure Project) maps out those companies that show a ‘superior’ approach to tackling climate change, saving money and gaining investors’ trust. The index, entitled, The A List: The CDP Climate Performance Leadership Index, saw 187 of the world’s largest companies achieving an ‘A’ grade for their efforts, specifically in cutting greenhouse gas emissions. These include: BMW AG, Samsung Electronics, Apple, Google, Microsoft and Unilever.
- Global food demand is expected to outpace the availability of water by 2050. But a new study by Washington State University shows that consumers, whose spending power can have a significant impact on the water used in livestock production, favour food certified by eco-labels. The study also finds that this is key to creating incentives for water-saving livestock production.
- The European Council have voted to adopt a directive requiring certain companies to publicly report on their environmental and social activities. Member states will have two years to transpose the directive into national legislation and companies are expected to begin reporting in 2017. “Companies, investors and society at large will benefit from this increased transparency because companies that already publish information...often have lower financing costs, attract and retain more talented employees, and tend to be more successful,” says GreenBiz’s Michael Hower.
- Lora Verheecke from the Equal Times argues that legal enforcement is needed to reduce illegal logging effectively rather than voluntary mechanisms. Verheecke uses an example: In 2012, the US Department of Justice demanded Gibson Guitar Corporation pay over $600,000 in penalties for illegally importing rare wood from protected forests, despite having committed to buying from FSC certified sources. Since this judgement, Gibson has introduced a new purchasing policy featuring additional staff members that are directly responsible for the contracts with producers, enabling Gibson to have more control over the supply chain.
Forest in Madagascar, where Gibson illegally imported timber. Source: Wikimedia Commons.
- In a recent study, it was found that a narrow focus on budgets can be detrimental to conservation efforts, specifically when Payments for Ecosystem Services (PES) are used. The findings state that tensions can emerge between efficiency and social equity in the design of PES schemes, meaning that key issues are often overlooked, for example: respect for local rights, inclusivity and the fair distribution of costs. The research was led by the Basque Centre for Climate Change and the Centre for International Forestry Research (CIFOR).
- SolarCity has launched America’s first public solar bonds, an initiative that enables Americans to make clean energy investments. The bonds, which are a form of loan, currently provide more than one in three solar power systems in the US and are expected to become worth $200 million. Meanwhile, the government-owned German bank, KfW, has issued one the largest ever green bonds. KfW is working with the Bank of America Merrill Lynch, Morgan Stanley and Citi to target US-based investors looking for socially responsible investments. The banks are also working to certify the bonds independently via the Centre for Solar Energy and Hydrogen Research, Baden-Württemberg (ZSW).
- MSCI, a company that provides investment decision support, launched a set of benchmarks to help investors eliminate or reduce fossil fuel investments from their portfolios. The benchmarks were unveiled along with two new indices: the first is the MSCI ACWI ex Fossil Fuels Index and the second is the MSCI ACWI ex Coal Index. Each index is designed to promote companies that perform well environmentally and socially, as well as ones that practice good governance, from around the world, including 23 developed markets and 21 developing ones.
- Later this year, the California Air Resources Board will vote on whether or not rice farmers can receive credits for cutting the methane released by their flooded fields. If the Bill goes though, it will be the first cropping practice introduced into California’s official carbon market – there are already protocols for livestock. “Horticulture is key,” says Grist’s Nathanael Johnson.
Rice farm in California, US. Source: Frontier AG.
- Coal production creates externalities that more than double the market price making coal the most expensive major energy source at around €167 per megawatt hour. It has also been found that the price companies pay to emit carbon dioxide does not cover the cost it puts on society – companies pay around €6 per tonne while it imposes a €50 per tonne cost on society. “If we want our energy system to reflect the full costs it imposes, sorting out the carbon price would be the obvious place to start,” argues Simon Brief from Carbon Brief.
- The Responsible Jewellery Council (RJC) and the Alliance for Responsible Mining (ARM) have announced that the Fairmined Standard (v2.0) is now recognised as a Responsible Mining Standard under the RJC Chain of Custody Standard for precious metals. “The RJC recognition of the Fairmined Standard opens up important market possibilities for the Fairmined certified miners and the industry...” says Lina Villa-Cordoba, Executive Director at the Alliance for responsible Mining.
- The UK was accepted as a ‘candidate’ in the Extractives Industry Transparency Initiative (EITI). This means that in 18 months, when the UK produces its first report, citizens will have access to data about how much extractive companies pay the government for natural resources.
- Indonesia has proven compliance with the EITI standard – this means that citizens have access to extensive information about how their natural resources are governed. Clare Short, Chair of the EITI said: “By reaching compliance, Indonesia has shown the world that also a country with a large and complex natural resource sector can be transparent about its resource revenues. What Indonesia has achieved is no small feat.”
- Out of the 3,395 companies that were included in the 2014 Dow Jones Sustainability Indices (DJSI) review, 41 were from mining and metals companies. According to the International Council on Mining and Metals, this demonstrates that the mining and metals industry has been making improvements in their sustainable development performance. However, ICMM also stress that: “while progress has been made, challenges still remain.”