Sustainability and business - how many planets are enough?

For boards, climate change needs to be made meaningful not in terms of “did we do a good thing”, but in terms of “what are the dangers and opportunities this company faces in the years ahead?”.

I watched a TV programme this week on how to create a new planet. It was light scientific stuff but it reminded me of the WWF statement that “If everyone in the world consumed natural resources and generated carbon dioxide at the rate we do in the UK, we’d need three planets – not just one − to support us.” Our populations and consumption are growing at exponential rates supported (or not) by a finite resource. This is not sustainable.

Natural capital is the value of the earth’s resources and the Natural Capital Coalition, of which the Institute of Chartered Accountants in England and Wales is a founding member, commissioned a study of 26 leading early-adopter businesses on “natural capital management”. Companies included the likes of Dow, PepsiCo, Nestle and Rio Tinto.
 
Asked what their resource concerns were for the next three to five years (not a long period) they put the top four as fresh water, climate change regulation, food and fibre, and were clear that delayed action on these was a substantial business risk. Asked what their challenges were likely to be, they identified a lack of harmonised methods to assess impact, a lack of government regulation and consumer demand.
 
So what does this all mean? Well, I think for those of us advising boards, it means that we need to start thinking about environmental issues not as things we’d like to have but as sources of risk we need to address - and with some urgency.
 
A great example is climate change. One very quick way to make a big dent in this one would be to end the $1.4trillion spent in energy subsidies. This is the figure the IMF calculates as the cost to society and the environment (so-called "externalities") in the form of air pollution and climate damage caused by fossil fuels, and argues that this figure should be levied in taxes. This is based on a modest cost of carbon of $25 per tonne, but even at this modest estimate it is still 2.5 per cent of global GDP. If the IMF is saying this - the issue is now out of the fringes and into the mainstream. This could well mean additional taxes and lots of them.

October saw the introduction of regulations requiring UK companies to report their greenhouse gas emissions (GHG). This represents about 1,100 companies. The regulations require these companies to disclose annually, in either their Directors’ or Strategic Reports, the greenhouse gas emissions for which they are responsible, the methodology they used to calculate the data, at least one intensity ratio and the information disclosed in the previous year. The regulations came into force on 1 October 2013 for financial years ending on or after 30 September 2013.
 
But what is the point of this disclosure requirement? From Defra’s perspective it is to help the government reach its climate change objectives: based on the belief that public disclosure will drive behaviour change and efficiencies, thereby lowering the country’s emissions. As the Directors’ and Strategic Reports are aimed primarily at investors there is also clearly the hope that they will use this information in their investment decisions.

This of course depends on investors, and businesses, actually wanting to use this information. Investors have seemingly been reluctant to use such information to date and, if companies simply produce the footprint and intensity ratio, then one wonders how it will be meaningful or useful information for investors. Indeed those businesses that regard these regulations as yet another costly burden will presumably wonder at their value.

For GHG information to be valuable it needs to be linked to an assessment of physical and regulatory risk as well as to strategy. The Climate Disclosure Standards Board (whose Technical Working Group ICAEW is a member of along with other accounting bodies around the world and the leading accountancy firms) has developed guidance along these lines and I urge you to read it.

For boards, climate change needs to be made meaningful not in terms of “did we do a good thing” or a public relations home-run, but in terms of “what are the dangers and opportunities this company faces in the years ahead and are we ready to steer this organisation through them?”.
 
As board members and advisors we cannot continue to ignore this thing called sustainability.

A volunteer lights a candle during Earth Hour in Berlin. Photograph: Getty Images.
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"We repealed, then forgot": the long shadow of Section 28 homophobia

Why are deeply conservative views about the "promotion" of homosexuality still being reiterated to Scottish school pupils? 

Grim stories of LGBTI children being bullied in school are all too common. But one which emerged over the weekend garnered particular attention - because of the echoes of the infamous Section 28, nearly two decades after it was scrapped.

A 16-year-old pupil of a West Lothian school, who does not wish to be named, told Pink News that staff asked him to remove his small rainbow pride badge because, though they had "no problem" with his sexuality, it was not appropriate to "promote it" in school. It's a blast from the past - the rules against "promoting" homosexuality were repealed in 2000 in Scotland, but the long legacy of Section 28 seems hard to shake off. 

The local authority responsible said in a statement that non-school related badges are not permitted on uniforms, and says it is "committed to equal rights for LGBT people". 

The small badge depicted a rainbow-striped heart, which the pupil said he had brought back from the Edinburgh Pride march the previous weekend. He reportedly "no longer feels comfortable going to school", and said homophobia from staff members felt "much more scar[y] than when I encountered the same from other pupils". 

At a time when four Scottish party leaders are gay, and the new Westminster parliament included a record number of LGBTQ MPs, the political world is making progress in promoting equality. But education, it seems, has not kept up. According to research from LGBT rights campaigners Stonewall, 40 per cent of LGBT pupils across the UK reported being taught nothing about LGBT issues at school. Among trans students, 44 per cent said school staff didn’t know what "trans" even means.

The need for teacher training and curriculum reform is at the top of campaigners' agendas. "We're disappointed but not surprised by this example," says Jordan Daly, the co-founder of Time for Inclusive Education [TIE]. His grassroots campaign focuses on making politicians and wider society aware of the reality LGBTI school students in Scotland face. "We're in schools on a monthly basis, so we know this is by no means an isolated incident." 

Studies have repeatedly shown a startling level of self-harm and mental illness reported by LGBTI school students. Trans students are particularly at risk. In 2015, Daly and colleagues began a tour of schools. Shocking stories included one in which a teacher singled out a trans pupils for ridicule in front of the class. More commonly, though, staff told them the same story: we just don't know what we're allowed to say about gay relationships. 

This is the point, according to Daly - retraining, or rather the lack of it. For some of those teachers trained during the 1980s and 1990s, when Section 28 prevented local authorities from "promoting homosexuality", confusion still reigns about what they can and cannot teach - or even mention in front of their pupils. 

The infamous clause was specific in its homophobia: the "acceptability of homosexuality as a pretended family relationship" could not be mentioned in schools. But it's been 17 years since the clause was repealed in Scotland - indeed, it was one of the very first acts of the new Scottish Parliament (the rest of the UK followed suit three years later). Why are we still hearing this archaic language? 

"We repealed, we clapped and cheered, and then we just forgot," Daly says. After the bitter campaign in Scotland, in which an alliance of churches led by millionaire businessman Brian Souter poured money into "Keeping the Clause", the government was pleased with its victory, which seemed to establish Holyrood as a progressive political space early on in the life of the parliament. But without updating the curriculum or retraining teaching staff, Daly argues, it left a "massive vacuum" of uncertainty. 

The Stonewall research suggests a similar confusion is likely across the UK. Daly doesn't believe the situation in Scotland is notably worse than in England, and disputes the oft-cited allegation that the issue is somehow worse in Scotland's denominational schools. Homophobia may be "wrapped up in the language of religious belief" in certain schools, he says, but it's "just as much of a problem elsewhere. The TIE campaign doesn't have different strategies for different schools." 

After initial disappointments - their thousands-strong petition to change the curriculum was thrown out by parliament in 2016 - the campaign has won the support of leaders such as Nicola Sturgeon and Kezia Dugdale, and recently, the backing of a majority of MSPs. The Scottish government has set up a working group, and promised a national strategy. 

But for Daly, who himself struggled at a young age with his sexuality and society's failure to accept it, the matter remains an urgent one.  At just 21, he can reel off countless painful stories of young LGBTI students - some of which end in tragedy. One of the saddest elements of the story from St Kentigern's is that the pupil claimed his school was the safest place he had to express his identity, because he was not out at home. Perhaps for a gay pupil in ten years time, that will be a guarantee. 

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