Smart Cities and The Responsible Business - June 2022

Smart Cities and The Responsible Business – June 2022

A softer touch vs hardball

What role should banks play in managing a rapid and safe transition to a green digital economy?

Ethical banking is a rather broad and fuzzy label that can be earned by practices as varied as printing bank cards on recyclable plastic, supporting the local community or refraining from investments in weapons.

These can be important criteria when an individual or a business is deciding who to bank with but, given the urgency to curb the destructive power of climate change, are all somewhat overshadowed by something even more pertinent – a bank’s stance on fossil fuel investments.

To make a verdict on whether a bank is truly pulling its weight to reach net zero by 2050, there are two major markers to watch. One is how much money it has invested in large emitters and the other is whether it has made investments in green projects – especially energy and other emissions-related investments.

In its Roadmap for the Global Energy Sector, the International Energy Agency (IEA) estimated that clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion a year to reach net zero emissions by 2050.

Although no one denies the need for huge green investments, opinions on the pace and timing of “brown” divestment vary widely. Environmentalist groups and some activist investors call for immediate divestment from assets associated with fossil fuels, while others point out the dangers of a rash transition.

BlackRock is one of the world’s largest asset management firms with $10 trillion (£8 trillion) AUM and is a staunch believer in green investments. But Larry Fink, the Chairman and CEO, is strongly against divestment from fossil fuels, arguing that if institutional investors turn away from them, someone else will take their place.

And indeed, while the pressure on banks, asset owners and pension funds is huge to divest from high emitters, national oil companies and hedge funds typically much less challenged by visibility requirements are happy to step in and cash in on sky-rocketing fuel prices.

Other unexpected negative impacts of divestment from fossil fuels may include mass dismissals in decommissioned industries or environmental damage caused by rapid decarbonising.

Transition finance and the dangers of greenwashing

Sustainability-linked loans and bonds (SLLs and SLBs) are the financial products of a more lenient approach aiming to wean high carbon emitters off fossil fuels rather than stigmatising them. They are designed to provide funds for businesses that – rather than investing in green projects – agree to link the interest they pay on their bonds to whether they’ve delivered on certain climate or sustainability KPIs.

However, there are twists to these more inclusive financing instruments. Firstly, the KPIs set by issuers tend to be opaque or have no materiality to the company’s activity, which means that investors are often out of their depth when making decisions to buy them.

Secondly, the buyers of these bonds have a vested interest in the issuer not delivering on sustainability KPIs, as this will give them a higher return – typically a coupon step-up of 25 basis points. Also, as the green-bonds principle that obliges issuers to invest proceeds in environmental projects doesn’t apply to SLLs or SLBs, it allows for the paradox of making brown or unsustainable investments with green loans.

While it’s important to see that changes on a global scale can’t happen overnight and that even the three-decade timeframe set poses an enormous time constraint, ensuring that most of the players are travelling in the right direction is crucial to success.

According to WWF and Greenpeace’s study, The Big Smoke, the UK’s finance industry is a high carbon sector with banks and asset managers responsible for financing 1.8 times the amount of the UK’s annual carbon emissions. This is an eye-opener but not completely unexpected as it is the third-largest financial sector of the OECD.

What raises more concern, though, is how little bandwidth is given to improving the situation. Fossil fuel financing was still expanding in 2020-2021. The most comprehensive global analysis on fossil fuel banking to date found that of the 44 companies examined in the study – all committed to net zero by 2050 – 27 don’t even have any meaningful non-expansion policies.

Although reports in the press might suggest otherwise, the IEA estimates that in the summer of 2020, only 1 percent of capital investments by oil and gas were for clean energy.

Meanwhile, on a more positive note, oil and gas do contribute to green innovation. According to Geoengineering Monitor, the fossil industry is a project partner in about 20 percent of known carbon capture, utilisation and storage (CCUS) projects – an industry still struggling with high costs and upscaling but showing the potential of liberating oil and gas and other high emitters from pariah status.

We would only be able to tell if current funding and divestment efforts are adequate if we could fast-forward to 2050 to see how far the current level and sincerity of the decarbonisation fervour will have taken us.

If we weren’t pushed for time, financial innovations such as SLBs or the $39.2 trillion in assets under or committed to divestment from fossil fuels as of October last year would be causes for celebration. However, climate modelling suggests we might be losing the battle for limiting global warming to 1.5 degrees.

Considering the nature of human planning, companies had better aim to overperform to eventually hit targets. Impressive figures may give us a false sense of security; to be on the safe side, we also need to monitor if funds released from fossil fuels end up in the right strategic assets.

We are all in this together. A green energy transition can not only preserve the Earth’s ecosystem and human society as we know them but also supply an energy-guzzling digital economy with green credentials.

Zita Goldman

Zita Goldman covers digital transformation with a focus on demystifying digital technologies and showing how they fit into a broader sectoral, macroeconomic, legislative and societal context. She has a passion for connecting the dots of current business and financial news and explaining inconsistencies, for giving hype a reality check and looking behind buzzwords for fresh meaning.

Smart devices spy on you – 2 computer scientists explain how the Internet of Things can violate your privacy

Have you ever felt a creeping sensation that someone’s watching you? Then you turn around and you don’t see anything out of the ordinary. Depending on where you were, though, you might not have been completely imagining it. There are billions of things sensing you every day. They are everywhere, hidden in plain sight – inside your TV, fridge, car and office. These things know more about you than you might imagine, and many of them communicate that information over the internet.

Back in 2007, it would have been hard to imagine the revolution of useful apps and services that smartphones ushered in. But they came with a cost in terms of intrusiveness and loss of privacy. As computer scientists who study data management and privacy, we find that with internet connectivity extended to devices in homes, offices and cities, privacy is in more danger than ever.

Internet of Things

Your appliances, car and home are designed to make your life easier and automate tasks you perform daily: switch lights on and off when you enter and exit a room, remind you that your tomatoes are about to go bad, personalize the temperature of the house depending on the weather and preferences of each person in the household.

To do their magic, they need the internet to reach out for help and correlate data. Without internet access, your smart thermostat can collect data about you, but it doesn’t know what the weather forecast is, and it isn’t powerful enough to process all of the information to decide what to do.

But it’s not just the things in your home that are communicating over the internet. Workplaces, malls and cities are also becoming smarter, and the smart devices in those places have similar requirements. In fact, the Internet of Things (IoT) is already widely used in transport and logistics, agriculture and farming, and industry automation. There were around 22 billion internet-connected devices in use around the world in 2018, and the number is projected to grow to over 50 billion by 2030.

What these things know about you

Smart devices collect a wide range of data about their users. Smart security cameras and smart assistants are, in the end, cameras and microphones in your home that collect video and audio information about your presence and activities. On the less obvious end of the spectrum, things like smart TVs use cameras and microphones to spy on users, smart lightbulbs track your sleep and heart rate, and smart vacuum cleaners recognize objects in your home and map every inch of it.

Sometimes, this surveillance is marketed as a feature. For example, some Wi-Fi routers can collect information about users’ whereabouts in the home and even coordinate with other smart devices to sense motion.

Manufacturers typically promise that only automated decision-making systems and not humans see your data. But this isn’t always the case. For example, Amazon workers listen to some conversations with Alexa, transcribe them and annotate them, before feeding them into automated decision-making systems.

But even limiting access to personal data to automated decision making systems can have unwanted consequences. Any private data that is shared over the internet could be vulnerable to hackers anywhere in the world, and few consumer internet-connected devices are very secure.

Understand your vulnerabilities

With some devices, like smart speakers or cameras, users can occasionally turn them off for privacy. However, even when this is an option, disconnecting the devices from the internet can severely limit their usefulness. You also don’t have that option when you’re in workspaces, malls or smart cities, so you could be vulnerable even if you don’t own smart devices.

Therefore, as a user, it is important to make an informed decision by understanding the trade-offs between privacy and comfort when buying, installing and using an internet-connected device. This is not always easy. Studies have shown that, for example, owners of smart home personal assistants have an incomplete understanding of what data the devices collect, where the data is stored and who can access it.

Governments all over the world have introduced laws to protect privacy and give people more control over their data. Some examples are the European General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA). Thanks to this, for instance, you can submit a Data Subject Access Request (DSAR) to the organization that collects your data from an internet-connected device. The organizations are required to respond to requests within those jurisdictions within a month explaining what data is collected, how it is used within the organization and whether it is shared with any third parties.

Limit the privacy damage

Regulations are an important step; however, their enforcement is likely to take a while to catch up with the ever-increasing population of internet-connected devices. In the meantime, there are things you can do to take advantage of some of the benefits of internet-connected without giving away an inordinate amount of personal data.

If you own a smart device, you can take steps to secure it and minimize risks to your privacy. The Federal Trade Commission offers suggestions on how to secure your internet-connected devices. Two key steps are updating the device’s firmware regularly and going through its settings and disabling any data collection that is not related to what you want the device to do. The Online Trust Alliance provides additional tips and a checklist for consumers to ensure safe and private use of consumer internet-connected devices.

If you are on the fence about purchasing an internet-connected device, find out what data it captures and what the manufacturer’s data management policies are from independent sources such as Mozilla’s Privacy Not Included. By using this information, you can opt for a version of the smart device you want from a manufacturer that takes the privacy of its users seriously.

Last but not least, you can pause and reflect on whether you really need all your devices to be smart. For example, are you willing to give away information about yourself to be able to verbally command your coffee machine to make you a coffee?

Roberto Yus, Assistant Professor of Computer Science, University of Maryland, Baltimore County and Primal Pappachan, Postdoctoral Scholar in Computer Science, Penn State

This article is republished from The Conversation under a Creative Commons license. Read the original article.

IoT security for smart cities

David Maidment, Senior Director, Secure Devices Ecosystem at Arm, explains why the cities of the future must be smart and secure

Soon, almost everything could be connected – from streetlights and traffic lights to shops and utility networks, our workplaces and even our cars. The internet of things (IoT) is quickly becoming the foundation our cities of the future will be built on. This future will contain billions of devices, all gathering data that can make our urban areas more efficient and sustainable.

Analysts say spending on smart city initiatives is growing and so far Shanghai, Seoul and Barcelona are leading the way in ensuring citizens benefit from the investment. It has never been more important to get the basics right. Digitisation can transform our cities for the better, but it also increases the risk of cyber-attacks. Hackers see the potential in the IoT too, and in a smart city a single, insecure device can bring down an entire system. If the weakness is in a critical network, for example, our energy or water infrastructure, it could have serious implications.

Companies act on concerns about IoT security

Fortunately, the PSA Certified 2022 Security Report offers us some reassurance about the future. We surveyed more than 1,000 technology decision makers across Europe, the USA and the Asia Pacific region, and most (88 per cent) told us that security is one of their top three business priorities. For respondents working on smart city solutions, the number was even higher (90 per cent). Their concerns are understandable. Their technologies will underpin city life so the cost of failure will be high. Our research also shows the increased focus on security is not just being driven from within the technology industry. Almost half of respondents who work on smart cities projects said it is a priority because their customers demand it. That is higher than the average for all other sectors and demonstrates that security cannot be overlooked.

It also suggests we are reaching a turning point, where most of us agree that we should do all we can to enable governments, businesses and citizens to benefit from innovation without sacrificing their privacy or safety. It is the only way to build people’s trust in connected devices, the data they generate, and in the IoT.

Securing our smart cities

However, implementing security can be a challenge for the developers of IoT products, including the companies creating devices that are destined for our smart cities. A third of people we surveyed for our Security Report said the main thing stopping them from implementing stronger protection was a lack of specialists or security-focused staff members. Many respondents, regardless of sector, also said the cost of securing their devices was a concern.

As our smart cities evolve, product developers will be under pressure to overcome these challenges. Governments, regulators and standards organisations are already introducing requirements to help ensure security is built into devices from the outset. For example, the UK’s National Cyber Security Centre has published guidance on how to build smart and secure urban environments. We expect others will follow its lead.

To help device makers navigate the regulatory landscape and capitalise on opportunities created by the IoT we must make security accessible to everyone, regardless of the size of their business. To create this level playing field, we need clear guidelines, trusted components and greater collaboration.

More calls for industry-led IoT security guidelines

Most (96 per cent) of the respondents to our survey said they would be interested in an industry-led set of guidelines on IoT best practice. The level of interest has grown by 12 per cent in the past year. This highlights the need to work together to determine what best practice means in the context of the IoT.

Common frameworks and third-party certification will help with this. They will enable us to establish a common language and set a benchmark for IoT security that we can all work towards achieving.

Trusted components will help to strengthen IoT security

Trusted components also help to democratise security, providing secure, certified silicon and system software built using standardised best practices. With these, OEMs and device vendors can use the built-in and verified security capabilities in their end products. In fact, almost half of respondents (48 per cent) to our survey that work in the smart cities market said building with trusted components is the most important consideration when they are developing a secure device. By “trusted” we mean products with a certified Root of Trust – a component built into the silicon that provides the security features the rest of the system or device relies on, such as secure boot, cryptography and secure storage.

Collaboration is the key to success

This will move us in the right direction but by far the biggest step towards a more secure IoT will be made through greater collaboration within the industry. Everyone has a part to play in preparing us for our digital future. Governments and standards organisations, for example, will continue to introduce guidance and legislation to break down the barriers to security and help protect consumers and their data from cyber-attack. As we show in our Security Report, the developers of IoT devices are also taking a more proactive approach to securing their products, and the ecosystem must provide the support they need to do this.

Arm is one of the founders of PSA Certified, a global partnership of security experts that has come together to create an easy-to-use framework and independent certification scheme for the developers of IoT products. It reduces the time, cost and complexity of security and makes it easier to comply with security regulations worldwide. PSA Certified is gaining momentum – it is the fastest growing security ecosystem with over 100 product certifications from more than 60 partners.

Many within the industry who are considering their next steps will be asking whether an investment in security will pay off. Technology decision makers believe so. More than half (52 per cent) of respondents to our survey said people are more likely to trust their products if they have security built in. The majority (96 per cent) said security positively impacts the bottom line. Most importantly, if we are designing security into our IoT devices, we will be securing the foundations our smart cities will be built on.

To learn more, access the full PSA Certified 2022 Security Report here

For more information on PSA Certified visit www.psacertified.org

About the author

David Maidment is Senior Director, Secure Devices Ecosystem within the Architecture and Technology Group at Arm. Arm is one of the co-founders of the PSA Certified initiative.

About the research

The data in the PSA Certified 2022 Security Report was gathered from 1,038 technology decision makers across Europe, USA, and APAC by Sapio Research. PSA Certified is a global partnership of security-conscious companies that are building security best practices aligned to the cyber-security requirements of USA, Europe and China and that promote Security by Design across all IoT devices.

INDUSTRY VIEW FROM PSA CERTIFIED

The power of digitally printed packaging to empower social change

How HP Graphic Arts is working with brands to communicate purpose through packaging

Packaging is vital. It helps us safely and securely deliver goods across the world. But it’s also a powerful and unique way of communicating. Packaging has the power to positively influence people in creative ways, and drive consumer behaviour in a more positive, sustainable direction.

Packaging can be beautiful and creative, and with brilliantly designed bespoke packaging, brands can support voices that struggle to be heard. Brands can use packaging to provide a platform for these voices, and deliver a more personalised and engaging experience that will resonate in the minds of customers.

International Women’s Day 2020

Can a single idea have the power to change the world? In 2020, chocolate brand Hershey’s made a simple tweak to its branding that turned out to be one of the most effective and memorable strategies in recent years.

A unique play on words saw the conventional candy bar subtly change its usual branding – from Hershey’s to HerSHEy’s – to honour women in conjunction with International Women’s Day in March. Through co-creation and collaboration with agencies, designers and female influencers who wanted to share their work, the confectionary company kickstarted its campaign to leverage underserved female voices and “highlight the central role that SHE plays in our name and all of our lives”.

A journey of communicating purpose

As one of the world’s top female-friendly companies, The Hershey Company is a firm believer in leading campaigns that leverage women’s voices. Exceptional women change the world, so Hershey’s looked to alternative communication methods to tell these stories. In a storytelling journey – spearheaded by co-creation and influencer partnerships – the limited-edition chocolate bars allowed consumers to scan a QR code to reveal more information on the women profiled on the chocolate wrappers, which were digitally printed to maximise ROI. Overall, 320,000 wrappers, and dozens of stories, were created, resulting in 1.3 billion impressions, a sixfold increase in organic sales and 30 per cent organic growth for the female artists.

Recognising women at a global scale

Two years on, digitally printed packaging produced by HP Indigo, is helping to drive powerful storytelling and deliver on Hershey’s commitment to championing women and gender equality. In March 2022, Hershey’s successfully completed its third #HerSHE campaign, leveraging social media to improve visibility of gender equality issues. Embracing a sense of empathy, solidarity and unity across the globe through influencer co-creation and HP Indigo’s capabilities has driven not only ROI for Hershey’s but high levels of social engagement. To date, the work has won Hershey’s two Cannes Lions awards and driven sales increases of 36 per cent year-on-year.

By leading with co-creation, HP Indigo’s digital print technology can reinvent creativity all over the world. As seen in the three-year #HerSHE campaign, by bringing brand purpose to life using unexpected platforms such as packaging, brands have the tools to strengthen consumer engagement, drive social impact and develop the agility to respond at speed to relevant social causes.

Through collaboration and co-creation, brands have the power to drive breakthrough creativity on a global scale. Whether it’s Hershey’s campaign for recognition for women, Dettol celebrating our Covid heroes, or Amarula supporting endangered elephants, digitally printed packaging allows brands to make meaningful connections with purpose-led design, and boosted ROI. In today’s climate, branding isn’t just focused on a single product or service but rather an all-encompassing customer journey.

Through beautifully designed, digitally printed packaging experiences, brands communicate purpose while delivering the goods their customers know and love. Digitally printed packaging can be the driving force that strengthens, supports and solidifies brand ambitions to produce memorable campaigns, and advocate for the social change that will make the world a better place.

You can read more here about Hershey’s 2022 story and watch women’s stories come to life, one chocolate bar at a time. To find out how brands are communicating purpose through packaging, visit www.reinventing-creativity.com.

INDUSTRY VIEW FROM HP

Why it makes good business sense for your employer to look after your mental health

In any given year, about one in five people will experience a mental health problem or illness. Fortunately, many employers have gradually come to realise that supporting mental health in the workplace is an important part of their role.

This makes sense not just for reasons of your own wellbeing as an employee. There is clear evidence, for example, that poor mental health in the form of depression and anxiety is linked to reduced productivity, and how well you are able to do your job.

Now our research has found that if the organisation you work for actively promotes good mental health (and provides support to those who need it) it is more likely to benefit financially.

This means that workplace initiatives designed to promote good mental health among employees can provide firms with a measurable return on their investment. That is, they are likely to recoup any money they spend.

The trouble is that many employers do not know which kinds of interventions are the most worthwhile, both in terms of their effectiveness and from a financial perspective. As a result, many firms – and most importantly, their staff – may be missing out.

For example, research suggests that cognitive behavioural therapy (CBT) can be a cost-saving way to address depression. There is also good evidence that involving occupational health professionals is effective in reducing sick leave and encouraging people to return to work after a substantial leave of absence.

Overall, employees will benefit from working for an organisation where there is a good understanding of the relationship between mental health and productivity. According to one study, initiatives that help employees to manage work-related stress seem to be the among the most effective.

Other research suggests that specific conditions including the option of part-time employment and having greater autonomy over tasks can help address the negative effect of presenteeism, where employees spend more time at work than is necessary.

It is also important to note that everyone will experience workplace mental health differently, and that rolling out initiatives and interventions is still not enough. To have a meaningful long-term effect, all the members of management teams need to be genuinely and actively involved.

To begin with, they need to clearly show employees that their mental health matters. They also need to create a sense of comfort and ease at work in which employees feel happy about coming forward with any mental health concerns. Managers should be trained to recognise issues and provide support for their staff.

They should also be alert to workplace bullying, which can increase the risk of depression and anxiety – and even override the effectiveness of any well-intentioned systems that may be in place.

Domestic juggling

But those systems are a good start. The workplace is where millions of people spend a large proportion of their time – even virtually, with so many now working from home at least some of the time.

And widespread changes in work arrangements since the pandemic add their own challenges to mental health. Working from home can present new issues related to feeling isolated and disconnected. There can be problems that emerge from the difficulties of separating home life from work life, or juggling domestic duties and caring responsibilities.

The pandemic has also led to many workplaces implementing specific COVID-related measures to ensure workers are safe and feel comfortable returning to work. Mental health is an important part of this, especially in sectors such as healthcare, where burnout has been higher.

Looking ahead, after the strains of lockdowns and social restrictions, it will be more important than ever to focus on workplace mental health and ensure there are effective, tailored interventions in place. As our research shows, it’s not only the responsible thing to do – it is also good for business.

Claire de Oliveira, Reader in Health Economics, University of York

This article is republished from The Conversation under a Creative Commons license. Read the original article.

A blueprint for the future: we are the cities we make

Cities are the home to humankind. Such a bold statement would have probably been contradicted just two decades ago, but today the world is unquestionably urban. Facts are simply eye-opening: 55 per cent of the world’s population lives in urban areas and multiple sources estimate that these numbers will continue growing in the next 15 to 30 years.

If anything, cities are the epitome of complexity: densely populated, hosting a myriad of networks and infrastructures at many levels, and witnesses of the incessant dynamics of society. That also makes them relentless ecosystems in constant need of sustenance. Reaching the perfect equilibrium between the unstoppable urbanisation of the planet and the sensible distribution of resources has become one of the major challenges of our generation – if not the main one.

Smart cities are, since the coining of the term, an approach to this equation. Initially, the term itself meant many different things to different people with diverse focuses on elements such as technology, sustainability, urbanism and architecture, and policymaking. Ten years ago, Smart City Expo World Congress debuted as the first international event, promoting what then was a radically new idea: integrating all the existing approaches and shaping a new standard.

The event has since become a witness of every change in trends, from hyper-technological cities to human-centred metropolises and from efficiency-obsessed managing to inclusive and collaborative policy‑making: a beacon of what is yet to come. In this sense, the pandemic has surely shifted the urgency of some improvements and the quick deployment of certain technologies. In the next few years, we will see a rise in the use of contactless public services, AI bursting deep into the fabric of our cities and even traffic congestion curbed by new teleworking schemes.

Recent examples prove how some solutions not only efficiently combine some of these technologies but also enable the reshaping of the way cities function and how they can help citizens adopt more sustainable habits. Last year, Transport for Greater Manchester rolled out the first-ever AI-controlled junctions, where cameras and sensors identify different types of road users and control traffic signals. The immediate benefit of such a solution is to reduce traffic congestion, but in the future, such services will allow city management to prioritise some modes of transportation over others, such as cycling and walking, which will also reduce emissions.

Cities are not just the stage where lives play out. They are also an expression of their citizens: who they are and who they want to be. By deploying certain services and solutions, we are paving the way for a better tomorrow, drawing the blueprint for the future.

From 16-18 November, Smart City Expo World Congress will celebrate its 10th anniversary by strengthening its role as a world platform for knowledge sharing. Not only will it bring together the leading thinkers, companies and institutions in the urban innovation ecosystem, but it will also widen its reach by hosting two new events: Tomorrow. Mobility and PUZZLE X. The former will focus on promoting the design and adoption of new sustainable urban mobility models, while the latter aims to use Materials Deep Tech to build a better and more sustainable future. Together, we will try to gather the tools we need to reshape our cities – because we all want a better future for the coming generations, and cities will be the final battling ground. Cities will be the key, and we are the cities we make.

by Ugo Valenti, Director, Smart City Expo World Congress

Building for net zero

Buildings consume 40 per cent of the world’s energy – but one French company’s net-zero energy management for sustainable and efficient buildings is changing the landscape.

Media coverage of the transition to a net-zero economy has tended to focus on a handful of innovations and trends that are reducing global warming – a crisis given greater urgency by the sixth report of the UN’s Intergovernmental Panel on Climate Change in August 2021. Direct air capture plants, for instance, can “scrub” around 9,000 tonnes of CO2 from the air annually, while tree restoration, which 48 countries have committed to via the Bonn Challenge, would sequester billions of tonnes of carbon over the next century if commitments are met.

But in the net-zero conversation, the impact of buildings on the trajectory of global warming rarely gets the attention it deserves. Although this is beginning to change, with campaigners now mobilising around issues as specific as insulation, the historic omission of buildings from climate crisis discourse is puzzling: 40 per cent of the world’s total energy – and within that, 60 per cent of its electricity – is consumed within buildings. Also, the materials used to build them are often harmful to the environment, while areas in which they predominate are hostile to wildlife and flora.

While greater attention to energy usage, installation of double glazing and other strategies can reduce the impact old buildings have on the planet, they will only ever be marginal. The advent of environmentally mindful building design is relatively new: most of the world’s buildings were constructed long before climate consciousness began to move towards mainstream thinking. We will always need buildings for the bulk of human activity – work, home life, entertainment, retail – but it’s clear that their energy usage has to change. And given the irrefutable impact they are having on the warming of the earth’s temperatures, what exactly can be done?

The answer may have been provided by a 185-year-old French industrial multinational whose technologies underpin the smooth operation of an estimated 70 per cent of the world’s buildings. Schneider Electric is a global specialist in energy management and automation, which began life in eastern France as a steel and armaments manufacturer in the 19th century before shifting in the 1970s to electricity.

Today, Schneider Electric is known globally as a leading digital transformation and sustainability partner in the built environment. Using pioneering digital technologies, it has helped create the largest net-zero building in the US, where one-third of all greenhouse gas emissions come from buildings. The 3,000 solar panels on the Unisphere in Maryland, owned by biotechnology company United Therapeutics, produce one megawatt of energy, while an “earth labyrinth” was dug beneath the building for passive cooling and heating. Other features abound: electrochromic glazing on the windows, and an automated natural ventilation system throughout the building.

Similarly, Schneider Electric’s IntenCity building, located in Grenoble, France, has broken new ground in the design of net-zero buildings. Its long, narrow shape allows for sunlight to penetrate every space, thereby reducing the need for artificial lighting, and driving down the release of energy into the atmosphere. It’s a big building, but when its energy-saving system is in full flow, not only does it consume as much as an average family home, but it is also energy positive – like the Unisphere, it generates, stores and releases its own energy. “The best news is that at IntenCity, we consume only what we need,” says Annick Villeneuve, Digital Buildings Solutions of Schneider Electric. “So we have the capacity to stock energy, to consume and produce only the energy that we need in real time, and we can also deliver energy outside the building to others.”

IntenCity uses eight times less energy than the average European building, while packing enough onsite renewable energy generation to power over 200 homes.

There’s a clear sustainability argument for this kind of design, but also a business one: green buildings are, on average, 14 per cent less costly to run than traditional ones, and are worth seven per cent more. Meanwhile, market demand for green buildings doubles every three years. Research also makes clear that demand comes from other areas too: potential employees would choose one job over another on the basis of sustainability, and 70 per cent of millennials cite a company’s sustainability in their decision over whether or not to stay long-term in a job.

There is also, finally, the broader reputational power that adherence to net-zero goals offers. Businesses seen to be going above and beyond to ensure they do their bit for the planet will gain all the advantages any business should desire: of being conscientious, forward-thinking, innovative, an exemplary global player.

As the IPCC report shows, the small adjustments – turning the heating down, keeping the windows closed – just aren’t enough. Radical thinking, and radical action, is needed. Schneider Electric employees talk of “the death of fire” – the switch from fossil fuels and combustion to renewable electricity and greater electrification of buildings as the most realistic way of driving down emissions. With its cutting-edge designs, this “death” is becoming a reality. In a literal and figurative sense, Schneider Electric is building anew.

For more information, please read our new sustainability blog, visit our new sustainability webpage, and read our new e-guide for sustainable buildings.

INDUSTRY VIEW FROM SCHNEIDER ELECTRIC

Reinventing IoT connectivity in remote areas

Connectivity is at the heart of society and business. In cities and many rural areas, the connectivity of the Internet of Things (IoT) is an essential part of daily life. It enables buildings to be ‘smart’, vehicle fleets to be monitored and the data from wearable medical devices to be sent to medical practitioners.

But internet connectivity doesn’t easily extend everywhere. There are large areas of desert, mountains and sea where the internet and the IoT do not reach. And yet these places still require communications: for example, to check the proper operation of equipment in remote parts of the world or to track the position of ships as they cross the oceans.

Satellite communications

Even where communication cables do not reach, there is still communication. The IoT can be carried over terrestrial networks using terrestrial technology. But there is a downside. Cellular technology relies on communication towers, which can be expensive, difficult to build and maintain, and prone to natural disasters or technical failures. And while long-range radio does not need such a closely packed network, it still needs internet towers and faces other issues such as intermittent connectivity and a lack of global standardisation.

Satellites are more useful for global communications as they provide almost total global coverage, far broader than terrestrial networks. But satellites are expensive to build, launch and operate. As a result, traditional satellite communication is expensive – too expensive for many IoT applications.

There is however a low-cost satellite solution that can suit IoT applications: low earth orbit (LEO) satellites. It requires less energy to place a satellite into a low earth orbit because, needing smaller antennas, they can be smaller than geostationary earth orbit satellites (GEO). Because of this cost advantage, LEO satellites are used for many communication applications.

Introducing Astrocast

One business that is taking full advantage of LEO satellites to deliver a global IoT service is Astrocast. Founded in 2014 by alumni of EPFL in Lausanne, and employing more than 80 people, Astrocast is the first Swiss satellite operator. Astrocast is also the only new space satellite IoT (SatIoT) player to build and operate its own network of satellites.

Astrocast uses nanosatellites: satellites weighing less than 5kg and equivalent in size to a large shoebox. These are less expensive to launch than typical communications satellites; a normal satellite is the size of a truck and very expensive to put into orbit. Astrocast’s nanosatellites are equipped with propulsion and deorbiting functions that give the operators control of the entire network should communication requirements change, along with the ability to avoid (admittedly unlikely) collisions with space debris.

Astrocast spent seven years developing this technology, which allows companies to connect with equipment and vehicles in remote areas of the globe where the cellular telephone network isn’t available – some 85 per cent of the planet’s surface.

Global tracking

Astrocast’s technology has many potential functions. For example, it can be used to track ships around the world. Cargo ships normally have tracking devices that only operate when they are close to a terrestrial network, generally when they are near the coast. However, most cargo ships don’t operate near the coast and shipping lines need to receive information about the condition of their cargo at least once a day. Using terrestrial networks doesn’t allow for this.

In contrast, Astrocast’s current constellation of 10 satellites can deliver four to six messages a day, to or from any point, offering a low-cost solution to this problem. This is more efficient than continuous communication for situations where you don’t need to be (or can’t be) there quickly, making it suitable for the management of equipment in remote locations. Take the example of a water-treatment plant in a remote location. The water filters will need regular, but not hourly, monitoring. Sending someone to check on the filters every day would be prohibitively expensive. Instead, nanosatellites can be used to conduct regular checks on whether the equipment is working properly, with people visiting the plant only when necessary.

Bidirectional communications

Another advantage of Astrocast’s system is that it is bidirectional: you can send and receive messages, such as an acknowledgement that a message has been received. This is important as, for many devices that operate on battery power in remote locations, such as a device monitoring environmental conditions for a farmer, power consumption is a critical factor. With bidirectional signalling, an automatic acknowledgement can stop unnecessary messages from draining the battery of a remote device. This feature also allows for commands to be sent to assets such as the deployment of security patches and software updates.

Some of these functionalities can also be found at existing legacy satellite companies, but one major difference is the price. Traditional legacy satellite communication is very expensive, but Astrocast’s unique services are up to three times less costly.

This is not just because nanosatellites are less expensive to build and launch. It is also because they use less power. Astrocast’s Astronode S has a peak power consumption of less than 0.35W, making it the lowest available in the market and with an energy consumption similar to terrestrial IoT networks.

As well as being a low-power, cost-efficient network, Astrocast has increased reliability through its use of the L-band radio spectrum (from 1GHz to 2GHz). This is the most efficient spectrum for satellite IoT because L-band radios have superior performance characteristics, including better propagation and fewer interference risks than other bands. In other words, the Astrocast network means regular, reliable contact at a far lower cost than traditional satellite technology.

The future of IoT communications

Astrocast is transforming the potential of the IoT by making it available beyond terrestrial coverage. And because its business model is based on data consumption, it is opening doors for companies that want to scale their communications as needed.

The company also has a strong focus on sustainability. As well as its lower power use, Astrocast has pre- and post-launch procedures in place that use propulsion and active deorbiting for collision avoidance and to reduce space debris: these are not industry mandatory but are taken because they reflect the company’s values. This attention to environmental issues has led to some innovative and important climate initiatives. For example, one Astrocast customer is placing a tiny and non-invasive satellite communications device on turtles so that data about the water condition can be sent whenever the turtle surfaces.

Around 30 million devices will be connected to satellites by 2025 and Astrocast’s innovative business model supports its ambitious plans to take on 25 per cent of these, with a strong emphasis on market verticals in shipping, land and transport, mining, oil and gas, agriculture and environmental monitoring.

With low-cost, low-power, bidirectional IoT communications that can operate in all weather conditions, Astrocast is changing the way that businesses of all sizes think about the potential of the IoT.

Learn more about Astrocast’s satellite IoT services at astrocast.com

INDUSTRY VIEW FROM ASTROCAST

The best way to save electricity? Don’t use it

Industrial companies are accelerating investment in energy efficiency

Decarbonising industry is crucial to cutting CO2 emissions and limiting global warming, and using electric power for energy-intensive applications rather than fossil fuels is a key part of the strategy.

Urbanisation, automation and the rise in living standards will increase global electricity demand, and the number of electric motors is projected to double by 2040. To protect the environment and meet net zero targets, electric motor-driven systems must use energy as efficiently as possible.

The best way to save energy, and the most sustainable thing a business can do, is to not use it in the first place. According to a recent global energy efficiency survey of 2,294 industrial companies commissioned by ABB, many industrial leaders agree. Globally, an overwhelming majority of companies (97 per cent) reported that they are already investing or plan to invest in improving energy efficiency.

For US respondents, that figure drops slightly to 92 per cent. However, it’s encouraging that 85 per cent plan to increase their investment in energy efficiency over the next five years.

Technology that pays back

While US respondents cited cost as a barrier to investing in energy efficiency, cost savings were the most important reason to invest, at 70 per cent. There is clearly a compelling business case to be made for investing in the latest energy-efficient technology.

Walking through a typical manufacturing plant, you are likely to see motor-driven systems that are based on outdated and inefficient technology. They waste energy and add unnecessary carbon to our atmosphere.

Fortunately, the technology we need is at hand. Industrial electric motors have recently undergone a period of exceptionally rapid advancement and today’s latest models achieve ultra-premium efficiency or IE5 standards. Furthermore, by adding variable speed drives – effectively dimmer switches for motors – the amount of electricity consumed is adjusted to match the exact amount of energy needed at any given moment. These technologies can have a massive impact.

In many applications, a more efficient motor could pay for itself in terms of energy savings in six to 24 months, enabling businesses to save money over the lifetime of the motor while cutting CO2 emissions from day one. Energy efficiency is good for business, good for reputation and good for the environment.

That message may be resonating with US manufacturers, as three-quarters (76 per cent) of survey respondents report that they are upgrading equipment to best-in-class energy efficiency ratings.

Original equipment manufacturers are also receiving requests from customers to provide more efficient equipment. That’s the feedback we have received from a leading US manufacturer of commercial heating, ventilation, and air conditioning (HVAC) systems.

The company is receiving an increasing number of orders that request the latest motor technology. As a result, the business has selected ultra-premium efficient motors for its high-efficiency, reduced-footprint rooftop air-handling units.

This example and the survey results are indeed positive, but much more needs to be done to meet net zero targets. Knowledge sharing is key to the widespread adoption of energy-efficient technology. Manufacturers such as ABB are responsible for clearly explaining the benefits of efficiency, both in terms of climate change and how reducing energy use contributes directly to the bottom line.

By investing in energy-efficient technologies and reducing the amount of electricity we consume, every commercial building and industrial process can become part of the solution and create a better planet.

The Energy Efficiency Investment Survey 2022 is available here.

By Jesse Henson, President, NEMA Motor Division, ABB

INDUSTRY VIEW FROM ABB

How digital tools can support the renewable energy transition

While renewable energy is being adopted at an accelerated rate, the industry faces numerous challenges. Industrial software solutions can help overcome these obstacles

Lisa Wee, Vice-President of Sustainability, AVEVA

Global appetites for renewable energy are on the rise as more companies pursue net zero targets and pressure from consumers and regulators increases.

However, delivering on our ambitious goals of keeping global average temperature increases to under 1.5°C requires embracing every available method. Industrial software solutions can help deliver the goods.

Renewable energy producers face several major challenges in scaling up to deliver the comprehensive gains required to effect widescale change. Renewable sources such as wind and solar are intermittent and unpredictable compared to fossil fuels, requiring advanced capabilities to manage supply and demand. These sources are widely dispersed across broad geographical areas, often in remote locations. Energy producers consequently face a data challenge, with the need to collate data from many more sources – often hundreds or thousands of wind farms and solar panel systems. Finally, producers face the problem of cost: although the price of renewables has gone down, building new facilities or retrofitting existing units requires significant investment, both to build the physical units and to connect the digital solutions to manage this data in real-time and visualise and contextualise it for effective action.

The transition to low carbon energy not only requires the use of new technologies but also means that energy firms will have to operate in an entirely new way to deliver energy to their customers. AVEVA has a proven track record of creating and delivering bespoke digital tools that enable energy organisations to address key sustainability challenges while improving value chain efficiencies.

AVEVA’s suite of industrial solutions offers a way to measure and monitor carbon emissions metrics across assets and operations and collate this information into one convenient single-window view for secure and comprehensive visibility at any time.

Layering this integrated data with artificial intelligence-infused analytics can help predict asset performance over time. The software helps strengthen grid reliability by preventing blackouts while simultaneously offering insight into consumption patterns. Overall, stakeholders are empowered to make better decisions, optimise the value chain and thrive in a fast-moving world.

The renewable energy sector has adopted digital technologies at an accelerated pace since the coronavirus outbreak. According to the International Energy Agency, renewables are forecast to account for almost 95 per cent of the increase in global power capacity through 2026, with solar photovoltaics alone providing more than half.

Businesses are beginning to realise that profitability and responsible business go hand in hand.

When industrial businesses cut waste from the system and improve operational efficiency, they can reduce their costs and cut carbon emissions, in turn helping limit global warming. The tools to support that transition are available to us today.

For more information please visit www.aveva.com/en/about/sustainability

INDUSTRY VIEW FROM AVEVA

Ready to engage with sustainability? Here’s what banks should know

Banks are realising that there’s an elephant in the room. A big, green, sustainable one – and exactly how they engage with it will determine whether they fall to the back of the pack or emerge as leaders in a new age of banking.

Sustainability has come to touch every facet of our lives. From the clothes we wear to the food we eat to the cars we drive, there’s a reckoning going on as consumers reconcile with their direct impact on the environment.

Climate change not only spells disaster for our planet and society, but it also has catastrophic consequences for the resilience of financial systems around the world. The finance and banking sector has a unique role to play in sustainability.

As facilitators of financing, financial institutions are heavily influential in deciding what kind of infrastructure receives funding and, by in large, how their customers manage their money. Banks can and should leverage this position to directly contribute to the fight against climate change.

Sticking to business as usual is the business of the past. Financial institutions across the globe stand before a decision on the future of our planet. Some view this decision as another cost to bear, while other savvy stakeholders have realised it could be the greatest opportunity in generations.

Reimagining the customer relationship

Since its inception, banking has morphed into a complex web of deals, debts and bottom lines, having left many banks to forget the ‘why’ behind it all. Banks used to play an intimate role in the lives of their customers, accompanying them as they stepped over the threshold of their new home or lending a helping hand as they gripped the steering wheel of their first car. But that’s changed – and customer trust has suffered as a result.

What’s the key takeaway? If banks are to succeed in staying relevant in a greener, more environmentally conscious world, they need to adopt a customer-centric green banking approach by hyper-personalising sustainability features within their banking products. The best way to generate scalable impact is for banks to support their customers in their journeys towards environmentally conscious lifestyles.

Why? Because the demand and expectation are there, but consumers lack the guidance to act. Fortunately, the potential for banks to fill this role is massive and will come to shape the role of banking in society for many years to come. Once banks begin to leverage this huge potential, they can begin to rethink how to scale their impact and reforge vital relationships with their customers.

The big opportunity the climate crisis poses

It all starts with realising that the climate is in crisis and that directly impacts everything and everyone – especially the financial sector. A report by Deloitte sheds new light on what climate inaction would cost the global economy. The price tag of 3 degrees Celsius average global temperature rise would be an estimated $178 trillion by 2070. And so far, we’ve already reached 1.1 degrees.

Crisis, however, makes way for consequential change. Key to this transition is banks seeing themselves not as sellers of products but rather as engines for climate action. Our entire society needs an upgrade, including the way we produce energy, travel and eat, with old infrastructures retrofitted with new, sustainable versions.

These upgrades will need to come in the form of sustainable investments. From renewable energy to alternative food production to sustainable housing, green investments will touch all facets of society. And that’s a tall order. Yet it’s also the opportunity of a lifetime and especially for the lifetimes that come after it.

The key for banks to unlock this potential is to empower their customers with transparency and knowledge around their individual environmental impact by seizing customer demand to offer guidance and tools. With 80 percent of consumers willing to make changes to their daily lives to reduce their environmental footprint, many feel frustrated. When banks invest in their customers, they also invest in their futures, working to prevent as much damage and loss as possible. It is high time banks built a robust, transparent customer experience that inspires trust and finances the future.

Transparent banking: the banking of the future

If the need to act on climate change is so crucial, the question remains of how to do so. It begins with a genuine focus on transparency and sustainability. The tendency to veer off into the dangerous waters of greenwashing is all too common and results in more damaging long-term effects to customer trust than is worth the short-term gains. By showing a real dedication to transparency, banks build durable loyalty with their customers.

According to a survey by Cornerstone Advisors, approximately 70 percent of Generation Z and Millennials would be interested in using a carbon footprint tracker if it was provided by their bank. Offering environmental footprinting is a crucial first step in the sustainability value chain. Footprinting functions as a platform for new forms of engagement, allowing banks to play a more important role in the lives of their customers.

By partnering with ecolytiq, banks can transform their data into powerful environmental impact calculations for customers, shedding light on the environmental impact, such as CO2 emissions, of each transaction in real-time. From there, customers can further engage with their banks by diving into integrated climate insights that nudge customers to the end goal of more sustainable spending.

Having built a solid base of customer trust, financial service providers can empower their customers to go further by incentivising impact offsetting and ESG investing. Empowered retail banking customers can make a long-lasting difference, simply and effectively, by using their banking app as a force for good.

A sustainability value chain means growth – a new kind of growth in the right types of infrastructures, industries and products that meet our needs today without ruining things for future generations. When was the last time that the best thing to do was also the right thing to do? In the end, it’s a win-win business case for people, the planet and profit: a solution that’s easy to implement and goes a long way in solving one of humanity’s greatest challenges.

Kick off your green banking transformation today with the right partner to get you there. Get in touch with ecolytiq or browse some of our resources to get started.

Max Honzik

Content & PR Manager, ecolytiq

INDUSTRY VIEW FROM ECOLYTIQ

Keeping smart cities secure

How to embrace innovation and best prevent cybersecurity risks in smart cities

The Internet of Things (IoT) is the fundamental tool that enables smart cities to function the way they do today. The sophisticated technology is used in practically all public service scenarios, addressing challenges with water, air pollution, traffic and landfill waste. As well as the practical benefits, sensor-enabled devices can monitor the environmental impact of cities by collecting information about air quality, sewer systems and rubbish.

Due to the efficiency and sustainable benefits of smart cities, they will likely grow in popularity in the coming years. However, as always, introducing new advanced technology such as IoT into cities comes with a number of security risks. Relying on a central technological hub to control core infrastructure can allow hackers to attack a city more easily than ever before. It is essential that this is recognised from the onset, so risks are prevented before they cause detrimental harm.

Best practices for staying secure

Undoubtedly, keeping IoT devices secure is a challenge, but there are some processes that can be implemented to reduce the risk of attacks. For example, connected devices can be deployed with sufficient security policies, such as firewalls, intrusion detection and prevention systems. Additionally, all devices should have strong passwords with certificate-based authentication that identifies communicating individuals and authorised devices. Device management agents can also highlight failed access attempts and attempted denial-of-service attacks.

City officials need to know which privacy issues can arise due to their IoT data collection mechanisms, as well as which can lead to user profiling and identification of individuals in unforeseen use-case scenarios. When deploying a data collection device with regards to its life cycle, collection mechanisms and overall security protocols, the greatest care needs to be taken. It is essential that security, privacy and data protection is addressed comprehensively at the design phase.

Additionally, officials should pay more attention to the secure storage of data collected from field sensors, as legal repercussions creep in and increase the risk of data being collected. This kind of data is often stored in the cloud, so all of the recommended practices applicable to this apply here. Essentially, cities with connected infrastructure devices should implement a layered security strategy that addresses cloud services, as data is more exposed.

Another aspect to consider is whether the individuals who install IoT devices are adequately trained in cybersecurity and can make informed security decisions. These individuals should have the required IoT training in line with the UK Government, preventing smart devices from being exploited by criminals or state-sponsored attackers. This can be achieved by having security professionals work more closely with engineers to embed IoT training as standard. Going forward, engineers will need to have a reasonable understanding of the inherent risks of IoT devices.

The importance of ethical design

Within the current technological world, ethical design is fast becoming more important than ever before. Although these intelligent technical systems are created to reduce the need for everyday human intervention, automated systems such as these can have consequences. For example, there are some concerns around critical infrastructure security, discrimination, loss of skills and economic impact, and the need to adopt ethical codes of practice essential for safeguarding the future.

Despite the risks, smart cities present an array of opportunities and innovation on a global scale. With the correct security measures in place, it is likely that smart cities will become commonplace and further refined to enhance sustainability and efficiency in the coming years.

Kevin Curran

IEEE Senior Member, Professor of Cyber Security, Executive Co-Director of the Legal Innovation Centre and Group Leader for the Cyber Security and Web Technologies Research Group at Ulster University

Active Ownership – a way for investors to engage

Businesses have been paying markedly more attention to environmental, social and governance (ESG) issues over the past years. Understandably, given the climate emergency, much of the world’s focus has been on environmental factors, with the Covid-19 pandemic also putting social issues such as worker rights and health and safety to the fore.

Good corporate governance practices can also affect the ’E’ and ’S’ factors of a company

Governance, the area where investors first engaged with non-financial – or extra-financial – issues, has increased in recent years: in 2021 DWS discussed governance topics in 74 per cent of overall engagements. It can be the bedrock of all the other issues, says Nicolas Huber, head of corporate governance at German asset manager DWS. “The tone from the top is important,” he explains. “Companies with weaker corporate governance structures could be more vulnerable to financial and extra-financial risks. Corporate governance practices can also influence a company’s management of environmental and social factors.” Intact governance, Huber points out, give companies a far better chance of effectively managing these areas.

Good ESG isn’t just ethically appropriate: it’s also good for business. “A good understanding of governance is an important source of higher shareholder returns. It helps companies – and investors – to identify risks and opportunities that normal financial analysis may miss,” says Huber. “It’s part of our fiduciary duty, but it’s more than that. I strongly believe effective corporate governance is important to ensure that companies are in good position to face future challenges.”

A concern for corporate governance is also increasingly important for clients. In the past, Huber says, asset owners would just ask if their managers had a policy and a framework in place. “Now there are detailed questions around how we vote, with whom we have engaged and on what. There is a much more sophisticated approach from clients now, driven in part by stewardship codes in countries such as the UK.”

Engagement is a means for investors to achieve positive change

Engagement with management and supervisory boards is one of the most important ways that investors can influence a company’s corporate governance and its performance on sustainability. “When we engage, we have an escalation process,” Huber explains. “When you are invested in a company, you have the opportunity to effect change. When you’re not invested, it is more difficult to make a difference.”

In 2021, DWS increased its engagement efforts to more than 581. “One example of where engagement has made a difference is in the area of remuneration packages”, he adds. Years ago, remuneration plans were in many ways very complicated, not at all transparent and often had no clear KPIs, especially in the long-term incentives. “We discussed this topic in many of our engagements and we have seen some improvements over the past years.” Companies started to integrate non-financial performance indicators into their remuneration systems, as awareness of companies’ double materiality grew.

ESG factors find their way increasingly into remuneration systems

Greenhouse gas emissions, water and energy use, biodiversity, health and safety and diversity are increasingly finding their way into executive remuneration policies and DWS expects its investee companies to integrate material ESG factors into their thinking and strategy, as well as to establish and demonstrate a clear link between their stated ESG targets/non-financial KPIs and their remuneration systems.

“One example is a company from the materials sector in Germany, with whom we had an intense dialogue with for nearly two years,” says Huber. “The progress presents true development and can be regarded as a successful engagement leading to a more transparent and shareholder-friendly remuneration system, including a 40 per cent weighting of sustainability within the long-term performance plan, for example on CO2-emissions.” Of the 430 governance engagements that DWS conducted in 2021, more than half covered executive remuneration for which processes were in place where improvements could be made. Following an update to the DWS voting policy in 2021, many of the conversations on this topic included sustainability-linked KPIs in order to tie in extra-financial priorities to executive pay packages.

Board independence is another topic where DWS is very active. “If you have sat on a board for more than 10 years, you are more likely to be less critical of a company’s management. We discussed this topic in 147 engagements, for example with a company from Hong Kong operating in the consumer discretionary sector that will now look for replacements of its long-tenure directors to improve the board’s independence,” Huber points out.

Full transparency on expectations for investee companies

DWS aims to link their engagement activity to their voting behaviour. As a global asset manager, DWS is invested in many companies, but because of the number of holdings they focus on those companies for which they have, for example, significant holdings, special regional focus with sustainability and/or governance concerns.

To ensure transparency on its governance standards and to outline its expectations as an active owner, DWS has published its Corporate Governance & Proxy Voting Policy online. “We have our own DWS corporate governance DNA developed over the past 25 years which considers also international best practice, various governance codes and international frameworks such as UN Global Compact and OECD Guidelines for Multinationals,” Huber says. “We try to be as transparent as possible in regards to what we expect from our investees. The policy is constantly being developed further in order to refine our expectations and have more fruitful discussions with our investee companies in relation to all aspects of E, S and G.

“DWS doesn’t differentiate between active and passive investments. Our corporate governance policy applies to all in the same manner".

“In general, we are looking for a constructive dialogue with our investee companies. As a further escalation step, when companies do not move into the desired direction, voting against management proposals and participation at annual general meetings are an important way to articulate our concerns. In this, we are able to raise questions, concerns or where appropriate we also commend boards on certain successes. Highlighting issues in public is an important way to define our position which hopefully puts pressure on companies to act. Last year, we submitted questions to 40 AGMs, publicly making clear what our expectations were of the companies concerned.”

Find out more about DWS’s engagement and voting behaviour.

DWS is the brand name of DWS Group GmbH & Co. KGaA and its subsidiaries under which they do business. The DWS legal entities offering products or services are specified in the relevant documentation. DWS, through DWS Group GmbH & Co. KGaA, its affiliated companies and its officers and employees (collectively “DWS”) are communicating this document in good faith and on the following basis.

This document is for information/discussion purposes only and does not constitute an offer, recommendation or solicitation to conclude a transaction and should not be treated as investment advice. This document is intended to be a marketing communication, not a financial analysis. Accordingly, it may not comply with legal obligations requiring the impartiality of financial analysis or prohibiting trading prior to the publication of a financial analysis. This document contains forward looking statements. Forward looking statements include, but are not limited to assumptions, estimates, projections, opinions, models and hypothetical performance analysis. No representation or warranty is made by DWS as to the reasonableness or completeness of such forward looking statements. Past performance is no guarantee of future results.

The information contained in this document is obtained from sources believed to be reliable. DWS does not guarantee the accuracy, completeness or fairness of such information. All third-party data is copyrighted by and proprietary to the provider. DWS has no obligation to update, modify or amend this document or to otherwise notify

the recipient in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Investments are subject to various risks. Detailed information on risks is contained in the relevant offering documents. No liability for any error or omission is accepted by DWS. Opinions and estimates may be changed without notice and involve a number of assumptions which may not prove valid. DWS does not give taxation or legal advice.

This document may not be reproduced or circulated without DWS’s written authority. This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, including the United States, where such distribution, publication, availability or use would be contrary to law or regulation or which would subject DWS to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions.

INDUSTRY VIEW FROM DWS INVESTMENTS

How video technology can help cities achieve their sustainability goals

Sustainability is an objective that’s high on everyone’s agenda. In every nation, we all have a responsibility and role to play in building a more sustainable future.

Cities have a disproportionate impact on the environment, and therefore have a greater role to play in meeting sustainability objectives. We have for a long time seen an increasing trend in urbanisation and this brings challenges in the work towards sustainability.

An important framework for cities has been provided by the United Nations Sustainable Development Goals (SDGs). Created in 2015 and designed to be achieved by 2030, the SDGs are 17 interlinked global goals designed to be a “blueprint to achieve a better and more sustainable future for all”.

The SDGs cover many areas – while Goal 11 is specifically focused on making “cities and human settlements inclusive, safe, resilient and sustainable”, there are aspects of many of the other goals which also have relevance to urban centres.

From video surveillance to actionable data

The link between technology, data and sustainability is clear, and the adoption of the SDGs by the world’s cities is in no doubt. Recent research by ESI ThoughtLab, which surveyed administrators in 167 cities around the world, found how effective use of technology and data is seen as foundational to achieving the SDGs. The research found that the cities making best progress towards the SDGs were also leaders in using technology, data and partnerships to achieve their social, environmental and economic goals.

Sustainability has always been a priority for Axis’s own business, but of course we also want to support our customers in achieving their own sustainability goals. As video surveillance technology has been transformed, we’re in a better position to do so today than ever before.

Our solutions can keep an eye on challenges such as air quality, energy consumption and extreme weather, as well as traffic flow and the evolving needs of public safety and citizens’ ability to move around freely and easily. The increasing sophistication of video surveillance technology – particularly related to video analytics and the ability to link data from sensors of multiple types, including video cameras – means that it can support a number of the challenges facing cities, specifically the SDGs smart cities are looking to accomplish.

Three of the fundamental areas that cities are focused on and which directly relate to a number of SDGs are the environment, mobility and public safety. And far from being independent of each other, these factors are very much interlinked. Again, this reinforces the critical need to break down silos and enable data sharing across the city. As stated in SDG 17, partnerships are the main enabler of success in sustainability targets.

The environment as a measure of sustainability

Monitoring of environmental factors is essential in city sustainability and ensuring the health and wellbeing of citizens. Poor air quality and noise pollution are closely linked to serious health issues. Highly sensitive environmental sensors – such as those measuring air quality – used alongside video surveillance give city authorities early warning of issues, visual verification and the ability to take correct actions.

Video surveillance can also show that waste is being collected and managed in accordance with the SDGs, as well as monitoring for and deterring illegal dumping (including disposal of waste into the oceans, as covered by target 14.1), vandalism and even littering, all of which have a negative impact on a city’s environment.

The SDGs are, in part, a reaction to the environmental damage that has taken place over the industrial age – one result of which is, of course, climate change. The world is experiencing severe weather conditions on a more frequent basis, which has the potential to disrupt urban infrastructure, the provision of critical services and, with that, risk harm to citizens. Again, the SDGs focus specifically on this through target 11.5: “Reduce the adverse effects of natural disasters” with indicators related to the loss of human life and disruption to critical infrastructure.

Environmental and weather monitoring sensors give city authorities the time to prepare for severe weather; video surveillance can monitor both the weather conditions and movement of a city’s population; and connected technology such as audio can be used to relay live and prerecorded warnings and instructions to keep people safe. In the aftermath of natural disasters, video surveillance can also be of great help with rescue and relief operations.

Sustainable mobility and transportation

Enabling citizens to move around freely and easily is also a fundamental part of a city’s liveability, and is covered by target 11 in the SDGs. With the increasing number of people and vehicles in cities, it is critical that transportation and mobility has as minimal a negative impact on the environment as possible.

Video surveillance monitors traffic and how people move, detecting incidents which can cause traffic congestions – and therefore pollution. Within SDG 3, “Good Health and Well-Being”, a specific target relates to the reduction of road injuries and deaths. Again, video surveillance using traffic incident analytics is of huge benefit in the effective and safe management of urban traffic, whether public or private.

Increasingly, data from video surveillance cameras is being used as a proactive tool in planning and managing mobility infrastructure to reduce its environmental impact. Data from video surveillance can also be used to assist citizen mobility – for instance, directing drivers quickly and efficiently to available parking spots or electric vehicle recharging stations.

Public safety in cities

“Making people feel safe” is a goal for every city and is covered in part in the SDGs under target 11.7: “Provide access to safe and inclusive green and public spaces”. It’s also one of the fundamental roles that video surveillance plays across the whole city.

It remains a sad truth that the density of population in urban centres means that they are places that can both attract criminal activity and where incidents and emergencies can quickly become a serious risk to large numbers of people.

While these are perhaps seen as more “traditional” places for video surveillance, advances in technology mean that it is increasingly intelligent, accurate and allows for greater proactivity, rather than simply post-incident investigation.

Rather than rely purely on manual monitoring, intelligent video analytics can monitor multiple video streams, spotting anomalies, unusual patterns, specific objects or suspicious behaviour and quickly bring an operator’s attention to the scene. Intervention can then be triggered through emergency services, or via audio speakers on site, either warning criminals that they’re being watched, or offering assistance, advice and guidance to people at the scene.

Such rapid reaction can stop a crime before it committed, prevent the escalation of an incident, evacuate a specific area or provide direct assistance before emergency services arrive.

Prevention of specific crimes also directly supports other SDGs and targets. For instance, target 3.5 is focused on the prevention of drug and substance abuse, which can obviously be supported through the prevention of organised crime and drug dealing.

Continually exploring opportunities to support sustainability

This article contains just a few examples of where video surveillance and other sensors can directly support the achievement of the SDGs. But it isn’t just about how video surveillance is used to directly support the work towards SDGs in cities. Axis, together with our partners, offers flexible, scalable, and open-source camera and IoT solutions that contribute to make cities safer, more inclusive and more enjoyable to live in – and help them meet their sustainability goals at the same time.

Our high reputation and focus on social responsibility, integrity and the environment, together with our industry-leading cyber-security solutions, will increase both reputation and trust – and contribute to cities’ long-term resilience.

Learn more how Axis contributes to smarter, safer cities.

INDUSTRY VIEW FROM AXIS COMMUNICATIONS

Making the transition to a more responsible business model

Amanda Smith, Vice President, Solutions & Enablement

Once seen as an optional addition to a business’s operations, Environmental, Social and Governance (ESG) and sustainability are now viewed as vital to a company’s future growth. Organisations are no longer simply asking when a sustainability agenda should be integrated into planning, but rather – and more importantly – how a robust and meaningful transition can be undertaken without the business being harmed.

In recent years, investors have been clear that the ESG frameworks of their would-be prospects are central factors in determining the potential provisioning of assets. And this isn’t just an ethical matter: climate change and related crises have become a defining factor in the long-term viability of businesses, and investors want their investments to reap returns well into the future.

But aren’t there significant risks involved in evolving business practices with changing demands? Isn’t there a chance that if a company shifts from a purely economic approach to business growth to one that incorporates social and ecological considerations, its growth will be significantly affected? For many companies, realising ESG targets isn’t just about making tweaks here and there to limit energy consumption and waste generation. There are supply chains to examine, communities to contemplate and the behaviours of the consumers buying and using their products to consider. Failure to carefully integrate sustainability into business strategy could introduce risk, increase costs and even threaten the long-term viability of an organisation.

Building the foundation needed to make an impact

Cority has helped many organisations as they make the transition into ESG and sustainability. They know that a key factor for success is the need for businesses to develop a foundation of governance structures and tools to guide them through the process. These comprise policies, defined roles, processes and information systems helping to communicate and engage with employees and the business community, investors and regulators. This also enables them to collect and aggregate high-quality data from which they can make decisions.

Companies must engage internal and external stakeholders to determine where they have an impact and align sustainability performance goals with expectations. It is also critical to improve their access to information and data-gathering processes. Do they have the data they need? Is the data detailed enough to allow insight into the aspects of the operations where actions can have an impact? Is the data accurate? Can it be reported, audited, assured and trusted by stakeholders?

Without such tools, processes and data, businesses cannot reliably determine what actions can be taken to meet the goals they and their investors have set out. And this will have knock-on effects.

Changing employee and stakeholder demands

Beyond the increasing number of reporting requirements and regulations – such as the EU taxonomy for sustainable activities and the Sustainable Finance Disclosure Regulation (SFDR) – numerous studies have shown that employees put great value on the sustainability credentials of potential employers. Surveys have shown that candidates are more likely to work for a company that has developed strong environmental policies. Meanwhile, having clear goals around sustainability is proven to have a positive effect on whether or not companies can retain their employees.

Within those findings lies another reality that businesses must acknowledge and act on. If the shift to more sustainable business performance is to be effective and long lasting, it must become a part of company culture. If employees are to participate, they need to feel as if they are part of the process. Clear communication on sustainability goals between management and staff is therefore vital, and employees should know why changes are being made, how they are relevant to them and how they can influence performance.

Centralising data-driven decisions

With tools for employee involvement, stakeholder engagement, supplier outreach and reporting, Cority helps organisations collaborate, exchange information and tell their sustainability story both internally and externally.

Central to Cority’s ability to steer businesses towards improved sustainability performance is its Sustainability Cloud. A key value of the cloud technology is that it can streamline the aggregation of sustainability data through integrations, automated processes and simplified collection tools, enabling companies to gather, standardise, process and analyse the data points needed for sustainability audits and action.

Cority then uses a range of other tools to organise that data into a single central source, thereby ensuring it can produce consistent and streamlined reporting. On top of this, it organises and analyses operational data, meaning businesses can identify operational changes that will improve performance and allow them to trace their data from source to report. This data is not only comprehensive and accurate but also able to withstand rigorous financial audits.

This centralisation of data means that, for instance, a large organisation that identifies waste reduction as a strategic initiative can have one system in which a range of disparate data points can all be brought together, analysed and improved; sites can be benchmarked and compared; sites with less desirable disposal methods can be identified and action taken; divertible waste streams can be detected; and purchasing decisions can be based on site-specific use. All of this ultimately results in a reduced footprint, impact and cost.

Meeting organisations where they are

Only if the data is carefully organised and analysable, providing a holistic view of organisation-wide performance, can effective action plans be developed and implemented. Employers can, for instance, then provide targeted training for those sites where methods need improvement, as well as other weak points. As a result, footprints can be evaluated, environmental impact reduced and money saved. A company’s improved performance will quickly reach those who matter: employees, investors and consumers.

Whether an organisation is just getting started or working to advance an established sustainability program, the powerful and flexible Cority solution can meet companies where they are and evolve with them to support the long-term success and sustainability of their business.

Discover your pathway to sustainability management & ESG reporting success today!

INDUSTRY VIEW FROM CORITY

Unwrapping the truth of 100 per cent recyclable packaging

Jenny Wassenaar, Chief Sustainability Officer, Trivium

Manufacturers and brands are making bold and admirable commitments to the environment by creating packaging materials that are sustainable and recyclable. But while many global brands claim their products are wrapped or boxed in 100 per cent recyclable materials, are they really?

There is a big difference between what can be recycled in theory and the practical reality. Recycling technology, collection infrastructures, consumer behaviour, legislation and incentives all differ between and within countries, resulting in big differences in recycling rates. The picture becomes even more nuanced when you look at how many times a material can be recycled. Some materials degrade quickly and can only be recycled a handful of times or less while others, such as metals and glass, can be recycled forever.

Governments, environmental organisations and brands are starting to embrace this nuanced picture, and we are seeing a shift towards a more circular approach to recycling. A circular life-cycle assessment at the product level must take into account all aspects related to product circularity, including recycled content, recycling rate, intrinsic recyclability, yield during recycling, and the potential to substitute primary resources.

Circularity was a driving force when the UN Environment Programme agreed earlier this year to develop a treaty designed to end plastic pollution. The resolution addresses the full lifecycle of plastic, including production, design and disposal. There is good reason for the UN Environment Programme to target plastics: plastic waste has doubled in the past two decades and only about 9 per cent is successfully recycled. The rest ends up in landfill, is incinerated, or leaks into the environment.

Consumers are also becoming more aware of the environmental effects of choices they make. When it comes to packaging, 67 per cent identify as environmentally aware and 73 per cent are willing to pay more for eco-friendly packaging. That means it’s time for brands to take a hard look at their packaging material choices and rethink what materials can best protect their products and the environment at the same time.

Permanent materials such as steel and aluminium may prove to be the most sustainable choice in many cases. The recycling rates of both are well over 60 per cent on a global basis and over 75 per cent in Europe. Once sourced, they are infinitely recyclable, making them circular by nature and allowing them to stay in the loop forever. When you add factors such as increased shelf-life, protection from light and oxygen and significant progress in light-weighting, you start seeing the viability of metal packaging in far more areas than canned food.

“Companies need to take a more holistic view of sustainability, such as the environmental impact directly caused by production, use and disposal, environmental impact caused by unnecessary food waste, and impact caused by the disposal of packaging materials,” says Jenny Wassenaar, Chief Sustainability Officer at Trivium Packaging, a leader in metal packaging. “It is time to shift away from plastics altogether and focus on permanent materials that can be recycled forever.”

Manufacturers and brands around the world are taking real steps to evolve their goals to be eco-conscious. Product designers and developers are creating more and more packaging solutions in the home and personal care category that are embracing the use of metals, as seen in refillable shampoo containers with metal pump systems, and wine being bottled in aluminium containers.

The sustainability goals of many big brands may also need an adjustment to progress to circularity, not just recyclability. The goals need to evolve from single-use to circular life-cycle assessments, which more accurately reflect the environmental impact of a material over its full lifespan. If manufacturers and consumers embrace more comprehensive goals, they can effectively combat climate change. The planet depends on this evolution towards rethinking recycling.

As Wassenaar says, “Manufacturers and brands have an opportunity and responsibility to think through their environmental footprint and deliver value in ways that matter increasingly more to their customers who are demanding more environmentally friendly products.”

For more research and insights, visit www.triviumpackaging.com.

INDUSTRY VIEW FROM TRIVIUM

Corporate sanctions against Russia indicate a new level of social responsibility

The world’s biggest companies deciding to stop doing business with Russia. McDonald’s, IKEA, Apple are just some of the well known corporations making a stand.

But why have they done this? After all, a famous rule of economics states that the social responsibility of business is to “increase its profits”. Surely by closing themselves off from such a large country, these companies will take a financial hit?

Perhaps then, the social role of business has changed, and the professional duty to maximise shareholders’ interests and keep businesses growing is no longer all encompassing. After all, the leaders of these large organisations are also citizens of the world; moral beings who want to do the right thing. And employees who feel anguish over the images coming from Ukraine will also expect their bosses to respond appropriately.

Of course, we could also interpret such a “moral stance” as having no altruistic motivation whatsoever. Withdrawing from the Russian market may be nothing more than an attempt to minimise potential damage to a company’s global reputation and brand – particularly if they are seen as being out of step with a competitor.

For, as the Scottish economist and philosopher Adam Smith proclaimed back in 1776: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” According to this view, the purpose of supplying what a customer needs is no more (or less) than an exchange process designed to generate profit.

But there is an alternative explanation for McDonald’s, Starbucks and the rest closing their outlets in Russia – something called “enlightened self-interest”. This is where acting to enhance the interests of others will eventually benefit your own interests. Put simply, it means a business doing well by doing good.

I am part of a research group examining this approach, with the aim of showing how a sense of responsibility and purpose can be both financially profitable and also generate what we refer to as “good dividends” – developing a new theory of business which integrates profit, people and the planet.

This does not mean the idea of acting solely in the interest of shareholders is dead. But we are in a very different context now. Corporations are involved in climate change conferences like COP26; they respond to sustainable development goals set by the UN; they invest in and report on their environmental and social responsibilities.

We have found that a developing moral awareness from corporate decision makers is helping to undo a traditional “us and them” form of leadership which is being replaced with a sense of “us with them”. Businesses of all sizes and in all sectors – coffee sales, metal manufacture, house building, public relations – are raising the value of their business while making a positive social impact at the same time.

Profit and power

Decisions about doing business in Russia show how this works at a global level, where many corporations are as large as countries. Indeed, comparing the value of the largest companies (revenue) to countries (GDP), 150 out of the 200 richest global entities are businesses.

The US retail giant Walmart is wealthier than Australia. The “economies” of Shell and Toyota are each larger than those of Mexico or Sweden or Russia. So alongside a country’s political sanctions, many large companies have the financial muscle with which to make an impact; when they walk away from doing business with a country, the citizens (and politicians) of that country cannot fail to notice.

This is why I’m inclined to see corporate actions against Russia as more than just good PR. Business leaders are not immune from society’s concerns, and nor do many of them want to be. So maybe the business world has turned an important page, and the stand it is taking is evidence of a new way of understanding its purpose and role in society.

For away from the horrors of Ukraine, there are many issues – climate change, poverty, oppression – which demand the business world’s urgent attention. Perhaps future generations will point to the early 2020s as a time when the relationship between business and society fundamentally changed. For humanity’s sake, let’s hope so.

Steve Kempster, Professor of Leadership, Lancaster University

This article is republished from The Conversation under a Creative Commons license. Read the original article.