Arcadis and Madaster join forces to create circular passports

20 July 2018 Consultancy.uk

The circular economy has been suggested as one part of the wider shift towards a sustainable economic model. Arcadis recently announced that it is working with Madaster to create materials ‘passports’ which support the creation of a zero-waste construction sector.

Various studies have shown that the current resource intensity of industrial production is no longer feasible. The circular economy has been proposed as one way to reduce the need for virgin input materials that place a burden on the environment. Careful planning could reduce the need for unsustainable materials, could expand re-used materials through recycling and would limit waste by reusing goods. A shift of focus away from goods, to services, as well as sharing economies can also reduce the impact of consumption behaviour.

Arcadis and Madaster join forces to create circular passports

The prognosis is not good for companies that provide a cradle to grave model for their businesses, and in the long-term many will have to face the reality that their business practices are incompatible with climate measures designed to ensure the survival of human society. Change is likely to be a multi-stakeholder exercise, including businesses, users, government and NGOs, but will need to happen relatively quickly to offset the worst effects of unsustainable consumption.

Arcadis recently announced that the firm is working together with circular economy focused Madaster to create a database of materials that are well suited for circular economic utilisation – aimed at eliminating waste in the construction industry. The aim is to give materials an identity, through the creation of a materials passport system, which provides current and future users with a clear understanding of the material’s utilisation potential across its lifecycle – allowing people to make informed decisions about the use of that material in their designs from its utilisation to its reutilisation. A circular focus would be on materials that tend to be durable, reparable, recyclable and reusable – and can factor into circular processes. 

Commenting on the project, Niels van Geenhuizen, who is responsible for sustainability within Arcadis, said, "Sustainability is important within Arcadis because we also want to keep the world liveable for future generations. We look for the most sustainable solutions for our customers. The re-use and reflection on future material-use is part of this. That is why we are enthusiastic about our cooperation with Madaster. It is a next step in striving to make the sector more sustainable.”

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Private equity firms ramp up sustainability focus

19 April 2019 Consultancy.uk

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.