It’s all about Value. It’s the name of the game. Create it economically; capture it distinctively. So, a ‘value proposition framework’ for sustainable development is put forward here by Green Biz authors.
A ‘value proposition framework’ for sustainable development
Whatever theoretical economic framework (such as game theory or decision analysis) or business model you want to select, value is at the heart of it. Individuals, organizations businesses and governments act to increase value — also referred to as utility — from their perspectives.
We believe this is a key to understanding the actions of various stakeholders in sustainable development, developing new strategies for making sustainability progress and, most important, for building effective collaborations across and between stakeholders upon which real sustainability rests and relies.
Collaboration requires a desire for shared value — finding the commonalities in seeking defined outcomes, then working together to increase utility or value propositions for all involved stakeholders. Not everyone needs to like each other or agree on every outcome to build effective collaborations, but they also can’t be at odds. This requires all parties to understand perspectives and find the common ground.
Businesses — with their human, financial and capital wealth — represent an enormous (or potentially enormous) powerful force when it comes to sustainable development. Therefore, we think it critical to understand the value propositions that all businesses face — both danger and opportunity — in terms of sustainability. In the long run, their viability and success also depend upon it.Collaboration requires a desire for shared value — finding the commonalities in seeking defined outcomes, then working together to increase utility or value propositions for all involved stakeholders.
All companies have in common five primary value propositions, although not everyone regards them as a set. Each has a direct connection to sustainability:
Growing the bottom line: Profit
It’s the bottom line — revenues minus the costs — that still makes the ultimate business case.
It’s also one of the easiest cases to make for sustainability. A company can increase its profit directly by reducing costs, and for many companies, energy, water and waste costs can be significant.
Reducing these through focused measurement, process improvement and/or specific projects can directly improve the bottom line while also improving the sustainability of the overall enterprise. It is where many companies start their sustainability engagement and with good reason: The economics can be enormous.
Dow Inc., in its first set of 10-year sustainability goals, returned $4 billion to the company on a $1 billion investment in projects. Energy reduction also reduces costs and carbon emissions. Reducing its environmental “footprint” is also often the most immediate way for a company to build credibility for its sustainability efforts. Companies that talk a good game about sustainability but don’t take meaningful action to reduce their own footprint lose credibility and reputation, which hurts them in markets for products and services, talent and investment.
Growing the top line: Revenue
Revenues grow through increasing market share or successful development of new products and services in response to society’s needs and desires, and it’s clear that sustainability trends have become big drivers.
Tesla is one example of visionary and bold investment in a single, although major, sustainability driver: electrification of mobility. Tesla has been very successful in this regard, but looking across all auto companies, you see the accelerating interest — and new product announcements — to capitalize on this incredibly important driver. (It will be interesting to see if GM and Ford can make the transition to become leaders in the future of electric mobility; we like their chances).
In the water area, companies such as EcoLab have built entire platforms around the management of water, cleaning water and recycling of water. The list goes on, but the key principle here is to identify the trends, invest in R&D and new products and processes, and ride the wave all the way to successful business growth.
Attracting, developing and retaining top talent
Employees are the core of any successful company. Top talent is drawn to — and kept in — companies that are successful in developing and implementing the kind of proactive sustainability strategies for their companies that make a material and purposeful difference.
Very few top students want to join a company whose activities are viewed as making climate change worse or polluting rivers and oceans or harming biodiversity and nature. Sustainability is the new “table stakes” for attracting top talent today.
When Neil was CSO at Dow, Dow attracted thousands of new employees in China from top universities with a “Green Jobs” program where recruits could join Dow to have real sustainability impact in applying their degrees (and Dow’s retention rates for these students was much higher than peer companies). When Laura was director of communication/citizenship at Dow Corning, top students didn’t wait for on-campus recruiting. When the company launched its first Citizen Service Corps, students started calling the company’s media center.
Look at any companies on campus these days and you will see that their efforts in sustainability are featured prominently. What is more interesting is the importance of sustainability to developing and retaining top leadership talent.
Like a customer you don’t want to lose, retaining the most valuable employees is critical. The drivers for hiring new talent are really the same as “rehiring” current employees. Dow very successfully used sustainability experiences — special projects, in-field assignments, academies and simulations — to develop leadership and strategy skills, while integrating sustainability across the company. Many of these future leaders remained because of the skills that Dow invested in for them in sustainability.
Attracting and retaining investors
All companies require capital. And the pace of acceleration for consideration of environmental, social and governance (ESG) factors has increased significantly. Virtually no company can survive and thrive anymore with its investor base without addressing sustainability concerns as an enterprise.
Dow started third-party verified Global Reporting Initiative (GRI) reporting more than 15 years ago, and it learned and grew along the way; it worked with other reporting programs such as CDP as well. In 2020, Dow was named to the Dow Jones Sustainability World Index (DJSI) by S&P Global, the 21st year Dow has achieved this prestigious ranking due to its comprehensive sustainability programs. Dow became much more involved more than five years ago after the Paris climate talks when Michael Bloomberg and Mark Carney appointed Neil (then Dow’s CSO) to join the Task Force on Climate-related Financial Disclosures, part of the Financial Stability Board.
Dow helped establish the reporting criteria, but beyond that, the experience provided Dow real learning and insight into where banks, financial institutions, insurance companies, bond underwriters and investors were headed. All companies today need to pay careful attention because investors are paying careful attention. One has only to read BlackRock CEO Lawrence Fink’s growing expectations in his annual letter or observe ExxonMobil’s abrupt board member changes to see that the term “activist investor” has been redefined. Times have changed.
Collaborating for mutual success while addressing key challenges
Finding safe places to collaborate to create the healthy ecosystems in which enterprise thrives is critical: supply chains, marketplaces, workforces, communities, industries — no company goes it alone.
Finding safe places to collaborate is neither easy nor simple. Competitors have antitrust concerns. Customers and suppliers have adversarial positions relative to costs. NGOs often have adversarial advocacy positions to individual companies or to whole industry sectors, and governments view their roles as to regulate and tax companies.
All of that adversarial energy can be put to better use if the focus is on more narrow objectives, especially those that involve sustainable development of regions, countries and the world as a whole. There is usually widespread agreement that we cannot regulate or litigate to stop negative trends in nature, public health, social equity and ecosystems, and that if we work together we can accelerate progress. But to do that requires a maturity of perspective on the part of stakeholders that we can agree to disagree on many things, but still find common ground to solve more narrow challenges.Adversarial energy can be put to better use if the focus is on more narrow objectives, especially those that involve sustainable development of regions, countries and the world as a whole.
The collaboration between The Nature Conservancy (TNC) and Dow, which recently celebrated its 10th anniversary, is one such example. Finding ways to incorporate the value of nature inside the company to better inform strategic decisions was of interest to Dow, and TNC was interested in preserving nature. Both saw that valuing the services of nature would help them to meet their respective goals, and they could collaborate with integrity. It set a new standard and example for collaboration, which continues to benefit both organizations, serve as an example to companies and organizations across industries, and preserve and enhance nature, using the power of capital in a way that no mere philanthropic strategy ever could.
When Dow worked with the University of Michigan to establish the Dow Graduate Sustainability Fellows more than a decade ago, significant faculty concerns were raised about their independence and intellectual academic freedom. Together, the company and the university put in place safeguards in response to those concerns, and hundreds of Dow Sustainability Fellows have benefitted, as have the University and those communities whose projects were addressed and implemented.
Neither example would have occurred without a strong platform for collaborating on sustainability challenges. These collaborations have helped Dow advance its business strategies and helped it learn and grow, positioning the company for future success. At the same time, these stakeholders also thrived. Win-win.
Value propositions for corporate sustainability
What company does not want top- and bottom-line growth? What company does not want top talent in their sector? What company does not want access to capital that is lower cost and more plentiful? And what company does not need platforms to collaborate with their value chain, in their communities and with their governments?
This five-part value proposition framework holds that promise for companies. Nothing short of their survival and growth is at stake today.
But we also believe that the other major stakeholder groups can benefit from understanding this framework for companies, by surfacing new ideas and creating proposals for collaboration that are more sophisticated in understanding the aspirations of their prospective company partners. At the end of the day, we all want to drive more sustainable action and bringing all stakeholders into collaborations will help us accelerate progress. Show comments for this story.
FP Trending‘s came up with all you need to know about the day that marks the recognition of small businesses of the international MSMEs day 2021.
Small and medium enterprises (SMEs), including tiny and micro firms, have always been critical to economic growth in all countries, the world over. These enterprises play a crucial role in employment creation and product innovation. It is, therefore, necessary to devise a coordinated plan to mitigate the impact of the pandemic on SMEs. Restoring confidence in economic growth in a safe, sustainable and inclusive way has never been more critical in the MENA region.
Micro, small and medium enterprises (MSMEs) have not always benefited in the MENA region from any help and faced a significant challenge in promoting more vital financial inclusion for SMEs. According to the World Bank, as a percentage of total financing demand by region, the MENA has the largest global finance gap for SMEs, estimated at 84 per cent.
International MSMEs Day 2021: All you need to know about day that marks recognition of small businesses
June 25, 2021
The UN resolution passed in April 2017 stressed the importance of encouraging formalisation of MSME segment that accounts for over 90% of all firms globally, around 70% of total employment.
Micro, Small and Medium-sized Enterprises (MSMEs) Day is celebrated every year on 27 June. The day is marked to recognise the contribution of these industries in the implementation of the Sustainable Development Goals (SDGs).
As many as 90 percent of businesses are generated from MSMEs. As per a blog on the United Nations (UN) website, these businesses provide 60 to 70 percent of employment.
The contribution of MSME to GDP worldwide is 50 percent.
Micro, Small and Medium-sized Enterprises Day history:
The UN designated 27 June as Micro, Small and Medium-sized Enterprises Day through a resolution passed in the UN General Assembly in April 2017.
A month later in May 2017, a program titled ‘Enhancing National Capacities for Unleashing Full Potentials of MSMEs in Achieving the SDGs in Developing Countries’ was launched. It has been funded by the 2030 Agenda for Sustainable Development Sub-Fund of the United Nations Peace and Development Fund.
Micro, Small and Medium-sized Enterprises Day significance:
By observing the MSMEs Day, the UN wants countries to recognise sustainable development goals and create awareness about them. Member states organise presentations, workshops, discussions with business owners, and other events to celebrate this day.
Micro, Small and Medium-sized Enterprises Day theme:
A virtual event titled Key to an inclusive and sustainable recovery, co-organised by the UN Department of Economic and Social Affairs with other departments, is scheduled for this year. The theme is ‘Achieving the SDGs, and an economy that is greener and fairer, requires resilient and flourishing MSMEs everywhere’.
With this theme, the UNDESA will be discussing actions that can be taken to ensure a quick COVID-19 recovery for the MSMEs while also keeping sustainable development goals in mind. It will also discuss ways to enhance creativity and innovation while providing decent work for all.
A story by Bea Mitchell on blooloop of 15 Jun 2021 illustrates well the ambitions of those countries around the Red Sea in terms of diversified economic development. It is about the Saraya Aqaba Waterpark set to open on July 3 in Jordan. The employment of Jordanian people will obviously improve as of this summer. But not only; here is the story.
The picture above is for illustration and is of Mashable ME.
Saraya Aqaba Waterpark set to open on July 3 in Jordan
Saraya Aqaba Waterpark, the first world-class water park in Aqaba and the largest in Jordan, is scheduled to open on July 3.
Saraya Aqaba Waterpark in Jordan features more than 25 rides, slides and experiences across more than 28,500 square metres. It opens in Aqaba on July 3.
The water park’s rides and attractions are inspired by Jordan’s iconic landmarks, including Dead Sea Drop, Wadi Rum Race and Aqua Jerash.
Dead Sea Drop guests will take a vertical plunge, while Wadi Rum Race is a competitive multi-racer. Aqua Jerash features play attractions for young guests, including slides, waterfalls and rotating water jets.
“We are excited to announce that Saraya Aqaba Waterpark will be the first of its kind waterpark in Aqaba and the largest in the kingdom,” said Chris Van Der Merwe, general manager of Saraya Aqaba Waterpark.
25 rides, slides and experiences
“At Saraya Aqaba Waterpark, guests from Jordan and around the world are in for an aquatic adventure like no other with slides, rides and experiences suitable for guests of all ages.
“The water park has been carefully designed with families in mind and as such guests can expect a family-friendly environment, both in and out of the water.
“We are looking forward to welcoming you at Saraya Aqaba Waterpark for unforgettable memories that will last for a lifetime,” added Van Der Merwe.
Also opening at the water park is the Rose City Diner, alongside refreshment kiosks around the park serving snacks, ice cream and drinks. The attraction’s signature shopping outlet is called Al Siq Souk.
Jordan’s landmarks inspire rides
Saraya Aqaba Waterpark is located within the Saraya Al Aqaba Residential City, which features a combination of residential, business, leisure and entertainment facilities.
Arina Kok of The Edge Malaysia in My Say: Sustainable finance a lever for growth, demonstrates how sustainability should be omnipresent in all development plans thinking as well as implementation.
Recent studies show that future years will be hotter than ever, and growing pressure from all sides to go beyond beautifully designed sustainability reports would be a must. Consumers and suppliers ought not to just value sustainability; they should prepare to pay for it. For instance, assets in dedicated sustainable investment strategies went over $1 trillion by June 2020.
In January, the country was badly hit by floods that displaced nearly 50,000 people. This exacerbated the impact of Covid-19 on struggling businesses, livelihoods, the healthcare system and the economy.
My Say: Sustainable finance a lever for growth
The pandemic aside, the Malaysian economy had suffered RM8 billion worth of damages, owing to climate-related events between 1998 and 2018. Given the rising magnitude and frequency of climate risks and their impact on businesses and society, the call to action is clear — strong cooperation between financial institutions and policymakers, businesses and society will be critical to drive the coordinated transition to a resilient and low-carbon economy.
To accelerate the transition, increased mobilisation of sustainable finance is needed to fund mitigation initiatives such as clean energy, energy efficiency and sustainable transport, and adaptation initiatives such as disaster management, infrastructure upgrade and sustainable land use.
Sustainable finance can be defined as any form of financial service that incentivises the integration of long-term environmental, social and governance (ESG) criteria into business decisions, with the goal of providing more equitable, sustainable and inclusive benefits to companies, communities and society.
While negative screening, such as absolute avoidance of activities, and thematic investing in selected sectors, such as clean energy, are commonly practised in sustainable finance, there is also a growing focus on diversifying sustainable financial practices into three other areas:
ESG integration — incorporating ESG information and analysis into investment decisions with the objective of enhancing risk-adjusted returns;
Norm-based screening and best-in-class (positive) screening according to defined ESG criteria.
Risk aside, climate change also presents opportunities to increase the range of financial products and services for renewable energy, green buildings and climate-smart agriculture and cities. The International Energy Agency projects the need for US$3.5 trillion (RM14.4 trillion) in annual global investments to build the infrastructure for a green economy.
Our World in Data, publisher of research and date of the world’s largest problems, found that the cost of solar and wind power plummeted at a staggering rate between 2009 and 2019, with the price of new solar falling by 89% and the price of onshore wind by 70%. It is now cheaper to invest in new renewables than in new coal power in every major energy market in the world, and soon it will be cheaper to build new renewables than to continue operating existing coal plants.
As markets advance in factoring ESG into risk-adjusted returns and more sustainable funds build competitive performance records, the lingering doubts about sustainable finance will diminish. According to S&P Global Trucost, over the past six years, the Standard & Poor’s 500 SDG (Sustainable Development Goals) portfolio increased by 136.2%. This compares with the S&P 500 portfolio, which generated a return of 125.8%. The research also indicated that companies with a higher proportion of their revenues coming from SDG-related products and services tend to outperform those with a lower proportion of their revenues.
The challenges in driving sustainable finance lie in having a clear direction and incentives to pivot from traditional investing strategies. The availability of quality ESG information is also an ongoing challenge, as most businesses are at different maturity levels in managing and reporting on ESG practices. While regulatory and market standards continue to be developed, a coordinated transition requires a system-wide engagement and effective reporting policies to be implemented.
In response to the need for common industry standards and frameworks, Bank Negara Malaysia is collaborating with the local financial industry to issue Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF) guides for the different sectors.
The sectoral guides will facilitate the practical implementation measures pursued by the Joint Committee on Climate Change, including the Climate Change and Principle-Based Taxonomy that will be finalised soon. The first set of VBIAF sectoral guides on palm oil, renewable energy and energy efficiency was issued on March 31, while the second set for the oil and gas, manufacturing, construction and infrastructure industries will be issued by year end.
The right strategy
With increasing pressure from the regulators, investors, organisations and society need to clearly define their sustainable finance strategies, resilience to emerging risks and their role in the global transition to the green economy. Successful sustainable finance strategies will be those that are actionable.
Setting the right strategy starts with defining just where and how organisations should engage in sustainability. It is not just a matter of figuring out the right policies, but of identifying the right actions to make sustainable finance a lever for growth. The board and senior management will have to think about the organisation’s purpose and mission. The right answers will help define sustainability goals that suit the organisation — those that are measurable, authentic, achievable, meaningful and aligned with stakeholders’ needs.
The right strategy is essential because greening the economy has huge potential upsides and may be the greatest commercial opportunity of our age.
This article first appeared in Forum, The Edge Malaysia Weekly of 10 to 16 May 2021.
Arina Kok is a director of Ernst & Young Advisory Services Sdn Bhd’s climate change and sustainability services (CCaSS) practice. The views expressed are those of the author and do not necessarily reflect the views of the global EY organisation or its member firms. This is the second of a three-part series on sustainability in conjunction with Earth Day 2021.
Abu Dhabi Media to air EAD’s new documentary: ‘Our Sea… Our Future’ now that all fossil fuels divestment appears to generalise for reasons known to everyone overwhelmingly. Rediscovering the sea and historical pearl-diving could well be a segment of diversification of the economy. It must be noted that Abu Dhabi-based Future Rehabilitation Centre is not also that far from the sea shore. Anybody sees anything wrong ?
Abu Dhabi Media to air EAD’s new documentary: ‘Our Sea… Our Future’
ABU DHABI, (WAM) — The Environment Agency – Abu Dhabi (EAD) has unveiled its new documentary: “Our Sea .. Our Future,” as a part of its ongoing cooperation with Abu Dhabi Media.
The 35-minute documentary highlights the fisheries sector, which is an integral part of Abu Dhabi’s heritage. The film illuminates the pressure that Abu Dhabi’s fisheries face, and the actions were taken by EAD to contain the impacts of overfishing on the marine environment, to ensure the recovery and renewal of the Emirate’s fish stocks.
The documentary was produced by EAD to highlight the roles of some of its employees and the challenges they face while conducting their various tasks and responsibilities. It also features interviews with EAD experts and specialists who emphasise the importance of fishing, the work undertaken by many Emiratis as a main source of income in the pre-oil era. Despite the ubiquitous development in all aspects of life in the UAE and the wide diversity of income sources, fishing remains one of the main sources of income and a valued traditional craft.
The documentary also showcases the perspectives of various fishermen, who are key partners of the agency.
Mohamed Ahmed Al Bowardi, Vice Chairman of EAD, commented, “Abu Dhabi is one of the key stakeholders in fisheries in the UAE, and the improvement of the fish stock and the abundance of demersal species represent very good indicators of the general condition of the country’s territorial waters in the Arabian Gulf.”
He pointed out that natural fisheries in the UAE, like others around the world, are subject to depletion due to several natural and human factors. Studies conducted by the agency show that the fishing sector in Abu Dhabi faced significant pressures, as the overutilisation of fisheries and the sharp depletion of the fish stock led to a more than 80% decline in the fish stock levels in the country. Moreover, several key commercial species declined to unsustainable levels.
He added, “As part of our efforts to protect the fish stocks and encourage sustainable use of fisheries and marine resources, the agency set several controls to manage fisheries in the emirate in a manner that would increase feasibility to utilise and preserve natural resources.”
Razan Khalifa Al Mubarak, Managing Director of EAD, said, “Fisheries are not only a source of revenues or income, as they also have a significant cultural and historical importance. Therefore, Abu Dhabi’s government considers their protection a key priority.”
She added, “We cannot underestimate the importance of early response to protect the marine resources for the current and next generations. After fish caught in the UAE were sufficient to meet the population’s needs, we are now depending heavily on importing to bridge the widening gap between supply and demand. Therefore, we took strict actions and controls that would ease the pressure off fisheries in the commercial and recreational sectors.”
Dr. Shaikha Salem Al Dhaheri, Secretary-General of EAD, said, “This documentary enabled us to highlight some of the main threats facing fisheries in Abu Dhabi, and the internationally-recognised efforts taken by the agency, in cooperation with its partners to manage the fish stocks. Those efforts resulted in creating multiple marine reserves, in addition to deploying a system for licencing commercial and recreational fisheries, and regulating the use of fishing equipment, in addition to imposing a seasonal ban to protect fish during the breeding season. The agency also set a minimum size for fish to be caught for some of the key types and prohibited unsustainable fishing methods.”
According to her, policies, procedures, and administrative controls were taken by the agency led to significant improvement in the fish stocks of some of the main commercial species that were depleted. EAD hopes for further improvement as the compliance with current policies and measures continue in a manner that helps achieve the desired outcomes of environmentally sustained fisheries.
Acting General Manager of Abu Dhabi Media Abdul Raheem Al Bateeh Alnuaimi, said, “With its contribution to the community, Abu Dhabi Media is keen to consolidate its leading position through raising the community’s awareness of various topics and initiatives, as well as reaching its target audience through its various media channels.
“Through airing this documentary, we aim to support environmental and cultural initiatives, highlighting the efforts made by the government to preserve Abu Dhabi’s environment and biodiversity. ‘Our Sea…Our Future’ documentary highlights the efforts of the Environment Agency and the concerned authorities in addressing the environmental challenges resulting from overfishing.”
This is the second documentary produced by EAD about marine resources in the UAE. The first one was “Our Sea .. Our Heritage” produced in 2019 which highlighted the condition of fisheries in the UAE and the long-term protection and recovery plan for fisheries.
Originally posted on Gharamophone: In May 2020, I posted Sariza Cohen’s stunning recording of “أَشْكُوا الْغَـرَامَ”(Ashku al-gharam), released on Polydor in 1938. This is the other side of that record. It is no less remarkable. Here the pianist and vocalist from Oran performs a composition by Algerian Jewish impresario Edmond Nathan Yafil. The title of…
It’s a truism that Europe is unstable if its North African neighbours are unstable. That being so, it should be of some concern to EU leaders that, on the bloc’s south Mediterranean border, Tunisia’s 10-year-old democracy appears to be on life support.
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