Unilever Treschow – Sustainability important to Boards

The Chairman of Unilever Board Mr. Michael Treschow says that it is important that Boards recognise the long and short term indicators for the sustainability in order to gain success from it. He was speaking in a webinar organized by the Conferenceboard Canada and B.Accountability on Thursday 26th February.

According to Treschow it is important in the future to balance the targets. Unilever has stated that the company will reduce its environmental impact to half by 2020 from the year 2010 levels and to continue to growth.

According to the company web site Unilever has avoided costs of over 350 million euros since 2008 by focusing on more sustainable solutions. The company has also stated that they have committed to sourcing 100 per cent of their palm oil from certified and traceable sources by 2020.

Unilever has published its guidelines and according to that the company will report the financial figures twice a year instead of every quarter.

According to Treschow Unilever has put effort on corporate communications in order to meet the expectations of different stakeholders.

He was also commenting about good governance and stated that Boards need to be more in connection to business than perhaps ever before, but also that Boards need to be more diversified than before.

Unilever is one of the leading companies in food production and it is estimated that food production needs to increase by 70 per cent to meet global demand in 2050.

 

Business

Rebranding Oscars and Super Bowl for new ads

There is going on a rebranding of Oscars at the same time when the real Academy Oscars are awarded. Social media has changed the advertising landscape of the two major advertising mega events, Oscars and Super Bowl.

According to several studies Oscars-event is more targeted for women and high income audience, while Super Bowl is more targeted for men, but more often also for families. The Super Bowl games has the largest television audience, this year with 114,4 million people.

One of the newcommers in Oscars this year is Netflix and according to surveys Oscars audience are more likely to buy the brand compared to the Super Bowl.

The are also other reasons that are for Oscars than the targeted audience –   less competition in general, category limitations and more social actions. It is estimated that there will be 43 million people watching Oscars Gala tonight.

 

 

 

Business Sports

Insight: BIM is leading the way to sustainable living and cities

Sustainable living and cities are megatrends at the moment. According to the EarthRate “ESG White Paper: Green Buildings” most megacities in the world are using different kind of best practises in their way to mitigate the climate change and reduce emissions. There is for example the Cities 40 -initiative which says that over 100 cities in the world are reporting about their climate change data to CDP (Carbon Disclosure Project).  Cities varies for example from San Jose to Salvador, Basel to Sydney and Moscow to Johannesburg. Two thirds of reporting cities said that they  account city-wide emissions.

According to the CDP data, 11 cities reported sea level rises in Europe and 23 cities of temperature increase in 2013. Floods were reported in 16 cities in North America and in 9 cities in Europe. CDP estimates that carbon reductions will lead to ROI of 33 % which means a value of 15 billion US dollars.

Real estates are one of the biggest elements in the cities to reduce emissions and to increase energy efficiency and new renewable energies. According to the United Nations Environmental Protection´s Financial Initiative (UNEP FI) Sustainable Buildings and Climate Initiative, the energy cost of buildings are one third of the total energy consumption globally. So, it is important to understand the whole life cycle of the real estate to examine the emissions and how to try to minimize them.

Now for example the global institutional investors are moving forward to seek real estate investments with energy efficiency ratings and information how the buildings are mitigating climate change. For example the world largest oil fund, the Norwegian Oil fund has said that they have 5 per cent of all the investments, in real eastate. Their portfolio is totally 6534 billion Norwegian kronors.  The fund can invest max 35 per cent in France, UK, US and Germany and other countries max 10 per cent. Green Buildings mean higher rents and better sales prices.

BIM is the biggest trend in properties

The biggest trend in the properties is the BIM (Business Information Modelling). This offers savings in time spent in designing the building and finding the right & optimal designs & solutions for the overall use of the building. BIM is the tool for architects, building specialists and project managers to work together for a more sustainable buildings, infrastructure and logistic.

BIM projects are widely used by goverments and in the UK Goverment recuirements is that by the year 2016 all Goverment projects should use BIM to save designing and the overall life cycle costs in the project and far most: to save energy as expected in the designing of the project. BIM is seen as to meet the energy and building performance management targets and it is a way to commit to climate change mitigation.

In the UK the climate change mitigation is targeted so that all the new built homes are zero carbon by 2016. This mandate was effective from April 2014 and it includes that a 6 per cent reduction in carbon emissions for new built homes.

BIM is used in big infrastructure projects like city transportation, logistics, highways, hospitals and other society buildings. This sector is expected to grow rapidly and the OECD estimates more than 40 trillion dollars could be spent on infrastructure projects worldwide by 2030.

Green bonds to excelerate the growth of Green Buildings

Green Bonds by real estate companies and investors is one the increasing phenomenoms in the financial markets at the moment. The aim of the green bonds is to target money to sustainable projects to lower climate change impact in buildings and lower energy use. The use of corporate bonds in also growing as an investment tool.

During the year 2013 and 2014 there have been several different green corporate bonds. Issuers have been for example the Swedish Real Estate company Vasakronan, Toyota Financial Services and Unilever.  According to Deallogic, the amount of green bonds has been 7,4 billion dollars.

The most important ESG KPI´s for real estates and building indudstry

EarthRate has made spesific industry ESG (Environment, Social and Governance)  KPI´s for real estates and building industry. The KPIs take into account the whole life cycle of the real estate, from the planning/designing of the house to the ending of its life cycle. If you would like to know more about the industry specifications, please send email to EarthRate: info@earthrate.fi. Thank you.

 

 

 

 

Business Research and Insights

Minister Paatero: ESG issues in the board´s responsibility in state owned companies

Sirpa Paatero kuva

Minister Sirpa Paatero says that the responsibility of steering ESG issues in state owned companies are in the board level. She made her comments in the EarthRate ESG conference in Helsinki on Thursday 22nd January.

– As an owner, the state follows the Finnish corporate legislation and obey to rules of good corporate governance -code. This means that the ownership and management is strictly separated in companies and responsibilities of companies organs are clearly defined. The state will not interfere with the single resultions of companies management, even when they are seen as politically unpleasent. This means, that the primary responsibility concerning the  ESG issues in the companies lies on the management of the companies, especially the boards, Minister Paatero said.
– As an shareholder, the state of course monitors the operation of companies and engage in active dialoge with the management about ESG-issues. But it is also expected, that the management of a state owned company also proactively monitors and directs the ESG-issues in their company. Also without the involvement of the owner.

– The state also uses it’s power as a shareholder, when it participates to nomination of the company boards. State monitors that every board of a state owned company holds sufficient competens in ESG-issues of the companies branch. ESG-issues are also considered in the principles of remuneration of management, she said.

Business

Sustainable strategy as an asset

Consumers and investors are nowadays looking at more information about the sustainable footprint of a company/product. When the Council of the European Union adopted the new Directive regarding non-financial information and reporting in late September this year, it was clear, that this was the start of new information flow.

According to this Directive large public and listed companies are required to report on environmental and social issues in their reporting period 2017-2018.

Why this is important also to your company?
Corporate Responsibility is about your future business and new growth opportunities. It is also risk management and reducing costs. But it is also brand management and employer branding. It is a question of your company´s competitive advantage and new business opportunities.For listed companies this means also that ESG-investors target your company better.

Altough the EU Directive is about company reporting, corporate responsibility is not. It is about changing your business strategy towards integrated business strategy. This is the only way to find the business opportunites what for example the climate change, urbanization and natural resources mean to your business.

ESG-investors interested of your strategy
Environmental, social and governance related investors are interested of your sustainable integrated business strategy. In the world they represent 45 trillion US dollars assets under management. And the trend is growing.

Investors are interested of different kind of sustainable themes; for example from climate change, energy efficiency, forest to water. So it makes sense to start rebuilding your business strategy, implement it, share & communicate it and finally report it. Sustainable business strategy is an asset for your company!

Päivi Härkönen

Business

London properties in focus

When I visited London a couple of weeks ago, I was surprised by the buzzing feeling and action there were. People were busy and the atmosphere was positive. Greetings also to the start-up and growth companies I met there!

This city is now a place where big real estate companies are heading. For example the India´s biggest real estate developer has announced that they are developing new buildings in London. And the real estate prices are showing upward trend. For example Financial Times reported that in Mayfair several luxury flats have been sold with new record prices. And new flats and blocks are on their way.

The reason why this is happening is partly because the pension funds are rising their asset allocation in real estates. Pension funds are seeking long-term investments and London properties are one of the metropolis in the world that are looking attractive for many investors. Also the oversees funds like Canadian pension fund Ontario Fund have landed to the European real estate market and they are expecting to invest several billion euros in the properties.

Investors are looking for good returns with third-party rating systems like LEED, which is widely used in office buildings globally. But there are also other systems and some banks have developed their own property rating methods. These systems analyse for example the technology level of the building, energy efficiency and environment issues as for example health and wellness issues.

The tightening energy efficiency legislation drives also investors to focus more on ESG issues. Green Buildings offer good rental yields, cost savings and higher premiums in sale. ESG-factors also help investors to mitigate regulatory, market and physical risks related to properties.

So, it is not surprise that investors also want to learn more about BIM (Building Information Modelling) in order to make better real estate investment decisions. This system helps all building stakeholders like architects, designers and project managers to work together. The costs savings in time and resources are remarkable.

And maybe we also see more modern wood houses and flats in the future. This is absolutely the trendiest thing at the moment.

Päivi Härkönen

Business Design

How to get started with corporate responsibility?

During the last month I have been following different kind of concepts and reports that take corporate responsibility into account. Some are parts of formal annual reporting, or CSR reports and some are marketing concepts talking about sustainability or corporate responsibility. And then there is the ESG world with financial institutions and their own reporting models as part of the UNPRI organization. So there are different kind of angles, reports and communication to this topic.

But what is the common thing for each of them? It is about the competitivness of the company. The channels, the target audience and the tools may be different, but the outcome should be the same. Corporate responsibility is the future key for business success, as Mr. Bruce Oreck, the US Ambassador in Finland, said a couple of years ago in Helsinki. And yes, corporate responsibility is one of the most important elements in corporate strategy framework.

And this integrated thinking is becoming more common, partly due to the legislation of corporate reporting of non-financial information but also due to the fact that investors and consumers are interested of these issues. And if you think about listed companies, the fact that ESG-investors are growing douple-digit in Europe, make the new investor target group interesting for many listed companies.

For coprorate management the big question is to make innovative corporate responsibility strategy which helps to determine the relevant business opportunities, targets, KPIs, risks but also for to create shared value in the long term. But it is also about gathering the data, collaborate with the value chain, manage the change and communicate it with different stakeholders. Much of the work is also analysing the outcomes and making needed adjustments.

There is no one size fits for all type thinking in this strategy work. But companies starting to make the big change, environmental issues are in the front line and carbon footprint might be the first question the investors are asking. And what is your impact in your value chain?

Päivi Härkönen

Business