Critical risks to planet and society are missing from major corporate agendas
London, UK: New research from business sustainability consultancy Article 13 investigates the most recent Securities and Exchange Commission reports filed by major corporates, looking specifically at the business risks being identified.
Whilst climate change and pollution are well documented, the other 7 planetary boundaries and 12 social thresholds – that offer tipping points beyond which irrevocable planetary and societal change would occur – are inadequately covered at best. At worst, they are completely absent.
Water and land use were cited as key risks by just a handful of companies. Geochemical flows, biodiversity, ozone depletion, aerosol loading and ocean acidification were either barely mentioned explicitly or omitted completely. This is alarming given that many SEC submissions are from pharmaceutical or food giants who should be concerned with biodiversity, over use of fertiliser and ocean food supply chains (a consequence of ocean acidification).
In terms of social thresholds, whilst income and health were risks referenced by a fifth of companies, the rest of the thresholds, including education and social equity, were not mentioned explicitly. This shows a weak perceived causality between these issues and direct business risks.
Underlying all of this is the absence of systems thinking when considering risks at a corporate level. The danger of having climate change and pollution in the spotlight is that other core risks are forgotten. Corporates must contextualise their risks from across these thresholds and boundaries and manage their risk exposure appropriately.
About Article 13:
Article 13 are business sustainability experts, typically in the areas of risk, measurement and reporting. Article 13 advocate the adoption of planetary boundaries and social thresholds as the global guiding practice for business sustainability.
For the full research report please contact Jane Fiona at firstname.lastname@example.org
Find out more about Article 13’s research into Planetary Boundaries at: http://www.article13.com/research
Jane Fiona Cumming – +44 (0)20 8840 4450
In July 2017 Article 13 examined 53 of the world’s biggest companies to see if they are using the Planetary Boundaries and Social Thresholds framework as a guide for risk mitigation, and how they referred to these risks within their SEC submissions.
The nine planetary boundaries represent the Earth’s limits for human enterprise , and the twelve social thresholds represent the lower boundary of societal needs that we must strive to maintain or reach in order to avert social system breakdown. All of the planetary boundaries and social thresholds represent tipping points that must be positively actioned and measured in order to avoid global scale crisis.
➢ Climate was highlighted as an explicit risk by 96%.
➢ Pollution was explicitly mentioned by 35%.
➢ Water (17%) and land use (15%) are less often cited as key risks in the SEC submissions.
➢ Geochemical flows, biodiversity, ozone depletion, aerosol loading and ocean acidification were either barely mentioned explicitly (nitrogen and phosphorous) or omitted completely.
➢ Income (21%) and Health (19%) had the most explicit risk references, unsurprising given their link to consumption patterns, workforce availability and the presence of insurance giants in the SEC submission sample.
➢ Most of the other thresholds are cited indirectly as risks through impacts on supply chain, consumption levels, and employee or skills availability.
Examples of companies submitting annual reports to the SEC (Securities Exchange Commission)
Walmart, PepsiCo, Archer Daniels Midland, Exxon Mobil, Apple, Intel, Coca-Cola, Alphabet, Procter & Gamble, IBM, Citigroup, Boeing, Microsoft, UnitedHealth Group, CVS Health, General Motors, Ford Motor, AT&T, General Electric, AmerisourceBergen, Verizon, Chevron, Costco, Fannie Mae, Kroger, Amazon, Walgreens Boots Alliance, HP, Express Scripts Holding, Bank of America Corp, wells Fargo, Home Depot, Phillips 66, Valero Energy, Anthem, State Farm Insurance Cos., Comcast, Target, Johnson & Johnson, MetLife, Marathon Petroleum, Freddie Mac, United Technologies, Aetna, Low’s, UPS, AIG, Prudential Financial, Humana, Berkshire Hathaway, McKesson.
1. For more information about the Planetary Boundaries, see the Stockholm Resilience Centre website at http://www.stockholmresilience.org/research/planetary-boundaries.html
2. Steffen at al. “Planetary boundaries: Guiding human development on a changing planet”. Science 347, 6223 (2015).
3. Rockstrom et al. “Planetary boundaries: Exploring the safe operating space for humanity”. Ecol. Soc. 14, 32 (2009).
4. Steffen at al. “Planetary boundaries: Guiding human development on a changing planet”. Science 347, 6223 (2015).
5. Rockstrom et al. “Planetary boundaries: Exploring the safe operating space for humanity”. Ecol. Soc. 14, 32 (2009).