Friday, May 29, 2015

Indonesia’s forest moratorium – renewed if not reformed


While Indonesia’s continued moratorium on new forest commercial activity is welcome, it is time for more progress on enforcement 

On 13 May, Indonesia’s president, Joko Widodo, signed a “presidential instruction” that has the effect of extending for another two years a moratorium on new commercial activity in the country’s primary forest and peatland.

National Park burning, Riau Province, Sumatra
It was the second time the moratorium has been extended – it was first adopted in 2011, and renewed in 2013.

The moratorium’s original aim was “improving management of forest resources by ╩╗pausing╩╝ business-as-usual and allowing time to implement reforms”, according to the World Resources Institute. The Indonesian rainforest is the world’s third biggest, and its protection is vital, among other things, for reducing the country’s greenhouse gas emissions, 80% of which come from deforestation and the destruction of peatlands.

Four years on, business-as-usual – such as conversion of forest into oil palm plantations – remains paused. But despite this, there seems to be little real reform.

‘Space to improve’

Commenting on the renewal of the moratorium, Indonesia’s deputy minister for environmental degradation control and climate change Arief Yuwono says the objective was to “give more space to improve our management”.

Progress seems to have been slow on fundamental issues such as mapping. Yuwono says Indonesia is still working on getting a detailed overview of its primary forest as a “basis for management”.

Critics of the moratorium say it has too many loopholes, that there was a rush of new permits granted “in principle” ahead of the 2011 moratorium, that local governments continue to allow activities in areas supposedly covered by the moratorium and that areas have been re-designated to take them out of its scope.

Riau Province, Sumatra
In addition, WRI surveys have shown the moratorium is poorly understood by local officials. And enforcement is also lagging, with no specific powers to pursue violators, though Yuwono argues that the moratorium should be seen in the context of other laws and enforcement provisions that apply in Indonesia.

On the positive side...

But there is a more positive take on the renewal of the moratorium, which was put in place following an Indonesian agreement with Norway under which the Norwegians agreed to provide $1bn in support for better forest management.

Rannveig Formo, a forest and climate councillor at the Norwegian embassy in Jakarta, says that at least the moratorium has been extended. It was originally put in place by previous Indonesian president Susilo Bambang Yudhoyono, and has now been continued under the new government that took office in October 2014. “The fact that there is a continuation and not a weakening is a positive sign,” Formo says.

She adds that in some places the moratorium has been highly effective – even if in other areas implementation has been weak.

Deforestation decline 

Riau Province, Sumatra
Also, there is evidence that the moratorium has had some positive effect. A Norwegian preliminary analysis in April 2015 showed that deforestation in Indonesia declined by 48% between 2012 and 2013. Other factors probably contributed to this, such as zero-deforestation pledges from companies, but the moratorium may well have played a part.

But the best way of reinforcing the gains might be to promote a change of attitude. Instead of defaulting to new forest clearance for palm oil, for example, it would be better to improve the productivity of existing plantations through better management. Limiting new forest concessions might spur this.

Here is where brands can lend their support, by continuing to adopt and reinforce zero-deforestation promises while offering targeted support to help producers of commodities such as palm oil improve their practices. This could take the pressure off the forest, and help the Indonesian government to move more quickly in its forest protection efforts.

From the weekly Innovation Forum Business Brief, which is sent out to 10,000 executives each Friday. Sign up for it here. 


If you've any comments, do get in touch businessbrief@innovation-forum.co.uk


Relevant upcoming PPT free discussion event in Singapore, September:

How business can tackle deforestation - A make or break issue for Asia’s corporate reputation?

28th-29th September 2015, Singapore / Details here

With: Cargill, Sime Darby, Unilever, Asia Pulp & Paper, WWF, WRI, Robertsbridge, Rainforest Action Network, UBS, Center for International Forestry Research, Musim Mas, Asia Pacific Resources International Limited, Great Giant Pineapple, TFT, Wilmar International, Forest People's Programme

How business can tackle deforestation – A make or break issue for Asia’s corporate reputation? is the third in our global series of events in combating deforestation and designed to be an annual meeting place that discusses the trends, debates the issues, connects the key players and drives change. 

Through an interactive and engaging agenda, and by bringing together the corporate practitioners and NGOs that make a difference, the conference is designed to bring maximum value and maximum action. 

The legal risks of not knowing your supply chain – The latest trends and what they mean for business.
  • How business is responding – Hear how leading firms are putting targets into action.
  • Develop credible policy – Find out how to fit deforestation into your sustainability framework.
  • Beyond certification – In-depth critical analysis of certification’s limits, and how to go beyond them.
  • Leverage supplier engagement – Learn how to communicate with and incentivise your suppliers for improved traceability.
  • Successfully engage with government – How can business effectively engage with government to close the enforcement gap?
Sign up to attend or updates at: 

Thursday, May 28, 2015

Sustainability leader surveys and comparisons, is there really any point?

So another year, another survey of executives working in sustainability, shows, er, more or less the same results as most of the others in the last decade.

Is there any real point to this, other than for expensive consultants to get publicity and sales leads?

How useful is it for us to celebrate Unilever's PR triumphs yet again?

(Yes much of what they do is backed up with real substance but we all also know they are very communications focused when some of their competitors are not. That does make a significant difference)

Shall we again say, oh, look, WWF (for being cuddly) and Greenpeace (for being edgy) come top of the list, they've done well haven't they?

Same old same old. Yawn.

You might write this off as jaded carping.

Maybe it is. But what use is this same information, again, really?

We are overly obsessed with false ratings, prescriptive reporting guidelines, incomparable 'rankings' (Toyota vs. Nestle, how helpful) and indexes that seem to be there to make companies largely feel better about badging incrementalism as 'systemic innovation' and to help investors cover their ESG backs.

There's a space in all this endless, repetitive white noise for someone to find companies genuinely changing their models and providing the products and services for the future.

We see this best in circular economy work and increasingly, in the area of preventing deforestation, where game changing stuff does seem to happening. I've seen some research on this before, it's really compelling. Perhaps my own business should do more in this space. We probably should. OK, we definitely should.

One senior executive at a major campaigning NGO said to me privately not long ago he was inclined not to bother with judging any more sustainable business awards given the companies winning "business of the year" etc were just a merry go round of the same names largely doing the same old thing. He has a point, as these latest rounds of self-serving surveys demonstrate.

Perhaps its time to pause a little in the "Unilever, Interface, Patagonia, WWF, Greenpeace" celebrations and focus a little more research on the products and services and business models that we can all point to and say "that really does look like something that might helps us get out of trouble, and it's new, and replicable/scalable".

Tuesday, May 26, 2015

Free webinar: Strategies to develop smallholder farmers’ livelihoods and productivity

This webinar explores how companies can create strategies to develop the smallholder bases that supply their soft commodities. Listen to it here.

The webinar had a particular focus on sugar cane farming but also explores the transferrable lessons that can be taken from other crop experiences. 

The speakers addressed such questions as: 

  • What is the general state of smallholder farming globally? What are the major risks and opportunities on the horizon? 
  • What opportunities do smallholder development programmes present to the major corporates such as Unilever and Coca Cola? What is the commercial case for them to bother? 
  • What are the common issues that keep smallholder yield and productivity to a faction of its potential? 
  • When designing a programme to systematically improve the state of a corporate smallholder base, what are the key strategic decisions to take into account? 

Speakers on the webinar:

  • Juni Sul, private sector advisor, agricultural markets and enterprise, Oxfam 
  • Sven Sielhorst, programme coordinator, sugarcane, Solidaridad Network 
  • Jon Walker, product manager, sugar, Fairtrade Foundation






Monday, May 25, 2015

Small holder famers & deforestation in southeast Asia - Podcast with Dr Nirarta Samadhi, country director, Indonesia, World Resources Institute

Helping smallholders be sustainable is key
Companies are making zero deforestation pledges, and putting an emphasis on transparency.

But what can government and NGOs do?

And how can small holder famers be incentivised to stop burning forests?



An eight minute podcast with Ian Welsh, editorial director, Innovation Forum.

Innovation Forum's Ian Welsh talked with the WRI's Dr Nirarta Samadhi at the recent Singapore Dialogue on Sustainable World Resources, held by the Singapore Institute of International Affairs

Upcoming relevant, PowerPoint free, discussion-based business meetings from Innovation Forum:

(if you read all the above, these are where you can meet fellow executives from companies working on all these issues)


  • How Business Can Tackle Deforestation - 28-29 September 2015 - Singapore - A make or break issue for Asia’s corporate reputation? With APP, Cargill, Forest Peoples Programme, Golden Agri Resources, Robertsbridge, Sime Darby, TFT, Unilever, Wilmar International, World Economic Forum and many more. Email Charlenne.Ordonez@innovation-forum.co.uk for more information. 

UK corporate country reporting – kicked on down the road?


The new UK government may not introduce country-by-country financial reporting, but clean companies might actually benefit from more voluntary exposure

A little remarked-on footnote to the recent general election campaign in the United Kingdom was the issue of country-by-country reporting – the disclosure by multinational companies of their revenues, profits and taxes paid per country, rather than on an aggregated basis.

A country-by-country reporting rule took effect in the UK even before the election. The UK Finance Act 2015, which came into law on 26 March, contained provisions allowing the government to bring in country-by-country reporting – though the fleshing out of the obligation for companies has been left to a later date.

The UK approach to country-by-country reporting is based on work done within the Organisation for Economic Cooperation and Development, which published guidelines in 2014.

Fair tax slice 

Country-by-country reporting is intended to help individual governments judge if they are receiving a fair tax slice from the profits multinationals make in their jurisdictions, but there is also an intention that governments should share information. The OECD must develop guidance on how this should be done before the UK can fully implement the rule.

Country-by-country reporting is therefore still a work in progress, and one that the major political parties referred to in their election manifestos. There was a clear dividing line between them.
The opposition Labour party said that they would require companies to publicly disclose their country-by-country reports. But the, ultimately victorious, Conservative party said only that it would “consider the case for making this information publicly available on a multilateral basis” – in other words, if other countries also agree to a public disclosure rule.

Onto the back burner 

The surprise Conservative victory in the election is likely to result in the public disclosure issue being kicked into the long grass. The Conservative government is likely to take the view that country-by-country reporting is a valuable tool for tax authorities, but any public disclosure requirement would represent an unnecessary burden on business.

A paper issued by the UK tax authorities in December 2014 showed that country-by-country reporting would affect “approximately 1400 UK-headed multinational groups”, but that the government expects relatively limited extra revenues as a result.

The “Exchequer impact” in tax coming in will rise to £15m in 2019-2020 – or a mere £10,715 on average for each of those 1400 UK companies. These numbers suggest that the government expects to turn up relatively little evidence of unjustifiable profit-shifting.

The likely pull-back from public disclosure of country-by-country information will disappoint campaign groups.

The Tax Justice Network says that public disclosure is needed so that citizens of countries can make their own judgements about whether corporations are paying fair levels of tax – and whether tax authorities are applying the right degree of pressure.

Tax risks

For sustainable investors meanwhile, aggressive corporate tax planning is increasingly seen as a risk.
Sustainability investors RobecoSAM, who work on the Dow Jones Sustainability Indexes, recently introduced tax strategy criteria into their corporate sustainability assessments.

They argued that companies that shift profits around face reputational risks and might have poor relationships with the countries where they try to minimise their taxes, leading to “approval delays or the rejection of projects, for instance, or in the worst case, companies risk losing their license to operate”.

All this evidence begs a question of multinationals that have so far not reported their tax arrangements on a country-by-country basis.

If the UK government, which is considering introducing a rule, expects to find little bad behaviour, and if there are risks to non-disclosure in the eyes of investors, why would companies not consider voluntary country-by-country disclosure?

Why indeed.


If you've any comments, do get in touch businessbrief@innovation-forum.co.uk.

From the Innovation Forum weekly Business Brief. Sign up at: http://innovation-forum.co.uk



Upcoming relevant, PowerPoint free, discussion-based business meetings from Innovation Forum:

(if you read all the above, these are where you can meet fellow executives from companies working on all these issues)


Saturday, May 23, 2015

Can Sugar be sustainable? Companies and NGOs meet to debate whether and how

I wanted to make you aware of an event we are hosting on sugar sustainability next month.

These companies are all taking part: Coca Cola, AB Sugar, Tesco,  Mars, SAB Miller, Nordzucker, Heineken, Mondelez, PepsiCo, ED&F Man, Ferrero, Tate & Lyle.

The conference is called the Sustainable Sugar Forum (London, UK, June 16-17). The event provides a platform where the sugar cane and beet communities gather to discuss the range of sustainability opportunities and issues in the global sugar value chain.

You can see the full details on the event brochure we have just released.

 The event tackles a range of issues such as:
  •  Human rights, labour issues such as child and forced labour, and preventing land grabbing
  • Smallholder farmer development, securing livelihoods, financing, improving productivity and yield
  • Water management, building water-stress resilience in vulnerable climates, and reducing water use
  • Environmental protection, soil structure conservation and promoting biodiversity
  • Climate change, technology developments, climate-smart farming
  • Responsible sugar sourcing strategy, implementing effective programmes to source 100% sustainable sugar, traceability and transparency

You can see the full agenda with speakers here.

 Over 50 organisations are confirmed to participate so far including The Coca Cola Company, AB Sugar, Illovo Sugar, Tesco, Tereos, Mars, Czarnikow, SAB Miller, Nordzucker, Heineken, Mondelez, PepsiCo, ED&F Man, Ferrero, Tate & Lyle, to name a few.

This week we have the last chance deadline on delegate passes to the conference. For delegate passes, you can register for the event here

Contact:

Boris Petrovic

Project Director

Innovation Forum: Events and Insight for Sustainability

O: +44 (0) 203 780 7430 D: +44 (0) 203 780 74 34

E: boris.petrovic@innovation-forum.co.uk

Alex Edmans, Professor of Finance at London Business School on the business case for social responsibility

Here's Alex's TEDx talk on “The Social Responsibility of Business”, which covers his recent paper showing that employee well-being leads to superior performance, and more generally the business case for social responsibility.

Here's a link in case its of interest. In the video Alex Edmans talks about the long-term impacts of social responsibility and challenges the idea that caring for society is at the expense of profit.

Alex will be talking about his findings, alongside some leading companies, here at the end of June.

Free webinar: strategies to develop smallholder farmers’ livelihoods and productivity

A message from my colleague Boris Petrovic at Innovation Forum:

I would like to invite you to listen into a complimentary webinar we are hosting on smallholder farmer development.

The webinar will explore how companies can create strategies to develop the smallholder bases that supply their soft commodities. The discussion will have a particular focus on sugar cane farming but will also will look to explore the transferrable lessons that can be taken from other crop experiences such as palm oil, cocoa, coffee etc.

You can sign up to the webinar here

The speaker will address such questions as:

·           What is the general state of smallholder farming globally? What are the major risks and opportunities on the horizon?
·           What opportunities do smallholder development programmes present to the major corporates such as Unilever and Coca Cola?, what is the commercial case for them to bother?
·           What are the common issues that keep smallholder yield and productivity to a faction of its potential?
·           When designing a programme to systematically improve the state of a corporate smallholder base, what are the key strategic decisions to take into account?
·           What are the lessons-learnt and best practices from programmes that have attempted to develop smallholders? Where did they see measurable, quantitative improvements?

Confirmed speakers include:

·         Juni Sul, private sector advisor, agricultural markets and enterprise, Oxfam
·         Sven Sielhorst, programme coordinator, sugarcane, Solidaridad Network
·         Bouke Bijl, project coordinator, Phata Sugarcane Outgrowers Cooperative, Malawi

The webinar discussion is one-hour in duration and will take place on 26th May, 14.00 - 15.00 BST.

If you cannot listen to the webinar at this time, we are sending recordings to everyone that signs up.

Once again, you can register for the webinar here

I hope you can join.

Best,

Boris Petrovic
Project Director
Innovation Forum: Events and Insight for Sustainability
O: +44 (0) 203 780 7430  D: +44 (0) 203 780 74 34
E: boris.petrovic@innovation-forum.co.uk


Upcoming relevant, PowerPoint free, discussion-based business meetings from Innovation Forum:

(if you read all the above, these are where you can meet fellow executives from companies working on all these issues)


Webinar recording: How to quantify the value of sustainability

Innovation Forum hosted a webinar last week on ‘how big business measures and values sustainability

The discussion focused on how businesses from different sectors are prioritising their CSR valuation. 

The panel included:

  • Joanna Gluzman, director of analyst relations & SRI, BT Group 
  • Mat Roberts, director of sustainability strategy, Interserve 
  • Sandy Stash, VP - safety, sustainability & external affairs, Tullow Oil 
The webinar previewed some of the discussions that will take place in London on 29-30 June 2015 at The Measurement and Valuation of Corporate Sustainability – does it all add up?

You can see more information here: http://innovation-forum.co.uk/sustainability-measurement-and-valuation.php


Tuesday, May 19, 2015

Corporate managers, remember what goes around comes around

Update 23/05/15. I had a lot of responses to the below when I published it a few days ago.

They ranged from "rock on" to "you seem very angry" to "what a rant" and "well said". 

I wasn't in a bad mood, and many commentators were right, this doesn't just apply to corporate managers. 

I was going to delete the post. But I've decided to leave it up for now. Got to stand by what you publish.


I, and a number of people I know, have noticed some corporate people becoming ruder in recent years.

By this I mean say, sending emails, then never replying to responses.

Or saying they want a quote for some work, then never replying.

Apparently, if you work for 'the man', for big corporate, you can treat people like this.

But in the real world, in 97% of most economies, i.e. SMEs, you can't ever treat people like this.

The funny thing is, the corporate people who act like this, often end up out on their own in a year or two or three anyhow.

Then you get the email. "Hi, so and so here, I'm now 'freelance', fancy a coffee?"

"No" is the answer.

"Bugger off" is the subtext.

Just because you did big corporate, doesn't mean the rest of us forget you were rude because you felt like you had the right to be.

You didn't.

You just felt like you did.

What I am saying here is, if you work for a large company, you are not special.

Big companies anyhow generally have zero loyalty to you, and soon (ish) you will end up back in the real world with the rest of us.

There's one simple message in this post:

Just because you work for big corporate doesn't mean you are special. You are not.

And pretty soon, or at some point, you'll need friends outside your little corporate cult bubble.

So best remember that, and the basic politeness any good parent would have taught you.

(I am also available for childen's parties, as the late great Bill Hicks once said)


20/05/15 Update: People keep asking me if this is based on anything in particular or if I am having a bad week. Neither is the case, although I appreciate the kind inquiries. Just wanted to make the point really. A large glass of wine did have something to do with it.