Sustainability R.O.I.

Issue 7 : October 2018


Greetings and welcome to the October 2018 edition of Valutus Sustainability R.O.I., a
Roundup of things that caught our attention along with some
Observations and

This month our Intelligence section is focused on materiality: how it is broken and why we can and must fix it.

We hope you find it valuable. If you do, please consider forwarding to your colleagues.

Thanks for being part of making the world a better place.

Warm regards,

Daniel Aronson,
Founder, Valutus
The Value of Values        +1-212-658-0405

Want to pick and choose? Here's what's inside…


Artwork by Antoine de Saint-Exupéry (1900-44) from The Little Prince

Okay, we can’t begin this month’s issue without addressing the elephants, as they have clearly broken out of the room. The recent report from the Intergovernmental Panel on Climate Change (IPCC) has made it impossible to ignore the true measure of our global peril. So it’s time to throw up our hands in despair, right? Spend the next few decades in narcissistic debauchery and go down in style!

Yes? Not quite.

In the words of Mario Molina, who won the 1995 Nobel for work on the ozone layer,
"The IPCC report demonstrates that it is still possible to keep the climate relatively safe, provided we muster an unprecedented level of cooperation, extraordinary speed and heroic scale of action”.

Unprecedented. Extraordinary. Heroic.

There it is. Those are our marching orders. The next quarter-century calls for nothing less than our best. Once more unto the breach, dear friends.

All for One and One for All.

Forward, march!

No Tipping Please

Earth in the balance...

Wikipedia defines ‘tipping point’ in climatology as, “a point when global climate changes from one stable state to another stable state...after the tipping point has been passed, a transition to a new state occurs. The tipping event may be irreversible, comparable to wine spilling from (a) glass.” The Guardian reported this week that a number of these fulcra may be nearing, including some that have been given short shrift in the recent blockbuster climate report.

“The IPCC report fails to focus on the weakest link in the climate chain,” said Durwood Zaelke of the Institute for Governance and Sustainable Development. “The self-reinforcing feedbacks which, if allowed to continue, will accelerate warming and risk cascading climate tipping points and runaway warming.”

Nik Wallenda on the tightrope across Niagara Falls, June 15, 2012

Among these feedbacks: water vapor in the atmosphere; the reflecting properties of the polar caps that will be lost as they warm and melt; the two major ice sheets, which also reflect heat and which are also in serious condition, among others.

The fear is that, even as the nations of the world belatedly organize their resistance to climate change, the earth may cross - or may have already crossed - some of these tipping points before we’re truly prepared to fight them.

Hay Power To Home Power: Integrated Energy On the Move

Hay power in Amish Country. This 2-horse-power drive powers other equipment

Back in the day, when you needed power you hitched a horse or an ox up to walk around your grindstone or pull your plow. A windmill, perhaps, graced your land or a swift stream turned your grist into flour. Once we collectively chose centralized power and embraced ‘the grid’ however, we lost the means to supply our own electric power needs with the materials around us. That pendulum, however, is on the downsweep: individuals and businesses are taking their energy generation back. Such people have come to be known as ‘Prosumers’ - with a nod to Alvin Toffler and The Third Wave (1980) - people who produce the energy they consume and sometimes more. Collectively this is known as Decentralized Autonomous Energy (DAE).

              Microgeneration. ‘Small Wind’ turbines powering a row of private homes

Yet it’s not a modern-day Luddite group. Rather, it’s the first wave of a global move towards personal sustainable energy production. This is made possible by a recent explosion of innovative micro-devices for more wieldy and less expensive solar panels, water and wind. Small solar is up from powering 1.8 gigawatts of private homes’ energy a few years ago to an expected 5.7 gw in 2020 according to, but personal windmills are coming along as well. China is the world leader in small wind with the US a distant second, yet total world capacity had grown to 915 a gigawatts as of 2015.

China, meanwhile, is using blockchain - the ultimate in decentralization - to create their DAE program. Also, the government is assisting a shift away from the two major Chinese electric utilities, according to TechNode online, and granting subsidies that are, “driving this general trend in eastern China while removing or decreasing them for large-scale production systems.”

At least let the poor gal watch Mr. Ed reruns while she splits your logs… Just sayin’
So there’s no need to saddle up old Bessie in order to generate horsepower anymore. Let her relax in the barn while you make hay with DAE.
Wind Energy That 'Never Loses Suction'...

Sir James Dyson, inventor, and founder of the Dyson Awards

It is perhaps fitting that the next story involves Sir James Dyson, who invented a machine - a vacuum cleaner - that removes unwanted particulate from air, gas or liquid. Hey, with a guy like that? Just get him to build a giant cord-free model and, wham! All that carbon and all those plastic fibers are sucked into the vortex. And speaking of the vortex, the winners of this year’s UK James Dyson award, named after - yup, him again - are two young men who developed a unique wind turbine for use where winds come from all sides. 

2018 Dyson Award Winners Nicolas Orellana and Yaseen Noorani
Cities, say, where tall buildings rebuff the winds and tear them to rags. This handy gadget - the O-Wind Turbine - is small, round and easy to mount in tight quarters, according to DeZeen online.

A cardboard prototype of the O-Wind Turbine under test

None of those can be said for its giant cousin, the industrial turbine which, due to size and unidirectional capacity is useless inside most cityscapes.

"Cities are windy places,” said one of the winners, Nicolas Orellana who, along with co-winner Yaseen Noorani, are students at Lancaster University.  “But we are currently not harnessing this resource. Our belief is that making it easier to generate green energy, people will be encouraged to play a bigger own role(sic) in conserving our planet."

As The Guardian notes, the concept came from the two men observing the failure of a mars lander which, in spite of its spherical shape, cold only harvest wind from one direction at a time and failed as a result. If this innovation lives up to its billing there may be a wind farm on every roof and fire escape in New York. And not a moment too soon.

They Named It New Amsterdam for a Reason
Just under 300 years ago the Dutch established a tiny trading colony at the mouth of the Hudson River. All travel and commerce was then conducted by ship but the 270 souls who’d just left a city below sea level must have felt safe, for their new home - at ten meters above the waves - needed no dikes for protection.

New Amsterdam, the Manhattan Island portion of the Dutch New Netherlands colony

When they named their colony - prophetically - the New Netherlands, they could not have foreseen the massive hurricane that, in 2012, would bury almost a fifth of the modern city of New York - some 51 square miles - in salt water.

Given the rise in numbers of such storms, and in the intensity of localized cloudbursts, City leaders reached out to another European nation, Denmark, to see how their capital, Copenhagen, had dealt with massive flooding the year before. As The New York Times reported, the two cities have now partnered to counter flooding and runoff and in short, as the Times dubbed it, make their cities more absorbent. Storm drain renovation is not considered workable in this instance. Instead, innovations such as sinking playgrounds and playing fields below street level to hold runoff in a storm; planting more grass and removing asphalt where possible, and building ‘bioswale’ pits for drainage, are on the table. Of course New York will be sinking not just parks and playgrounds, but money, into this effort. The pilot, forty five separate projects in Queens, will require almost two billion to complete. Jeez! And back in the day they bought the whole island for 24 bucks!

Wind On The Water...Again

In his classic 1883 memoir, Life on the Mississippi, Mark Twain described the thrill of the inevitable steamboat race as the great boats left their docks each day.

“It was always the custom for the boats to leave New Orleans between four and five o'clock in the afternoon. From three o'clock onward they would be burning rosin and pitch pine (the sign of preparation), and so one had the picturesque spectacle of a rank, some two or three miles long, of tall, ascending columns of coal-black smoke; a colonnade which supported a sable roof of the same smoke blended together and spreading abroad over the city.”

‘Racing Days’ from Twain’s Life on the Mississippi

A piquant and picturesque image to be sure; yet through a modern lens perhaps a harbinger of climate problems to come. It turns out that shipping is a significant contributor of CO2  emissions - about 2% of the global total according to The Guardian. Not surprising given the fleet of 50,000 modern ships, from tugs and fishing boats to enormous bulk carriers longer than a soccer pitch, that ply the waters each year. Yet standards for shipping were left out of the Paris accords, kicked back to the shipping industry itself, the International Maritime Organization (IMO). Impressively, they've come up with a goal to reduce carbon emissions by almost 95%. But how? I mean, what source of power could possibly move a large vessel through the...through the...oh. Yeah, that’s how they used to do it. And a return to sail is just the beginning.

Artist's rendering of a wind-and-solar design. 
Photograph: Eco Marine Power via The Guardian
It’s not only wind. The International Transport Forum lists multiple fuels and resources to achieve this goal

It turns out this industry has never been regulated before and has been profligate with the world’s resources as a result. Better design - such as more slender hulls and lighter materials - along with better fuels can go a long way towards carbon-footprint reduction. Other innovations - reducing drag below the water line, high-tech sails and, of course, designing in solar - are just some of the methods outlined in the ITF report.


As the IPCC report discussed earlier makes clear, we need speed, scale, and coordination to tackle climate change, and that prescription holds for other urgent issues as well.

Environmentally, as the World Economic Forum reminds us, we used a planet’s worth of resources in the seven months between January and the end of July.

And across the board, the UN Foundation reports, “it is also becoming clear that the current pace of progress must accelerate” to achieve the Sustainable Development Goals (SDGs) on schedule.

But speed, scale, and coordination are not easy and achieving them all in combination is that much more difficult. Various leaders are finding differing approaches to the challenge of doing more, faster, together.

Some are focused on doing more than their share, like MAX Burger, which is offsetting more than the carbon footprint of its burgers making them climate positive.  They’re also reducing their own footprint and encouraging their customers to choose more non-meat offerings.

Other leaders are publicly broadcasting their commitments to being catalytic - to raising the performance of their customers, value chain, or industry along with their own performance - including some Valutus has had the privilege to work with.

Pharmaceutical firm Novartis, for example, has publicly stated it's ambition to be "a catalyst for positive change and the leader in environmental sustainability, who will drive sustainability through our own operations and ultimately across our value chain."

Likewise, biotech leader Biogen has also declared its commitment to being a catalyst, not just environmentally but on social issues as well.

And the catalyst role doesn’t come at the expense of corporate performance, either: Among other ambitious goals, Novartis has committed to being plastic neutral by 2030 while Biogen has been carbon neutral for years.

We need all these leaders’ actions, and more. What if we could scale sustainability progress like we do technology, with a rate of progress like Moore’s Law describes in computing? (For what it’s worth, this is Valutus’s strategy: scaling through tools, software, and catalytic action.)

Speed, scale, and coordination - big challenges need powerful tools. We need to use them. And fast.

Materiality is a process companies use to identify, in terms of sustainability, what is important for them and also for the world. Unfortunately, current materiality practice suffers from near-fatal flaws and doesn’t fully answer the questions posed above. In short: it is broken. Here are just a few of the serious holes in current materiality analysis:

  • Surveys too lacking in scale and scope: Current practice surveys only 30 - 50 stakeholders and usually not from a broad enough set of disciplines

  • The traditional 3-5 year planning horizon is much too short - literally shortsighted. This leads to underestimating the importance of bigger, longer-term issues like climate change, which almost never shows up in the highest-priority quadrant of materiality matrices. Better to assess when an issue will have its full impact (even if more than 3-5 years) and the time it really takes to address it effectively

  • Current practice utterly fails to identify submerged value: The hidden secondary and tertiary savings from sustainable decisions that average 80% or more of sustainability’s value. This is a significant omission and can be fatal to any attempt at building support to address key issues

  • SDGs are left out of the analysis: Realizing that an initiative supports an SDG after-the-fact carries far less force than purposefully aligning with an SDG from the outset and asking “Which SDGs do we want to support and which issues must we therefore effect in order to do so?’

  • Outputs are almost always static and, as such, not very useful. Dynamic and flexible reports that can drill into issues, audiences, and context are much more powerful

These are just a few highlights but it’s enough to show that current materiality practice falls far short of its goals. However, all is not lost. A major change in focus and some critical additions to the toolkit can bring forth the latent power of materiality and render it not just useful but strategically powerful.

All of this and more will be explored further at the “Materiality Is Broken” session at the New Metrics '18 conference in Philadelphia, October 29th at 1:30 PM. Come join us if you can!

Thanks for reading.

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