Tag: 3BL

Originally published on Built From Scratch

This November, The Home Depot Foundation is launching its annual Operation Surprise campaign: a nationwide effort to make veteran housing safer, more accessible and affordable. 

With a commitment to invest $750 million in veteran causes by 2030 – building on more than $500 million already contributed – the Foundation, in partnership with Team Depot and nonprofit allies, is dedicated to ensuring that more veterans can age in place safely and comfortably. In honor of Veterans Day, the Foundation and Team Depot will complete hundreds of service projects across the country, to not only modify and improve homes but also create moments of surprise to honor those who have served. 

Since 2011, Team Depot has completed more than 1.6 million volunteer hours in service to veterans. Follow #OperationSurprise on the Foundation’s social channels to see how we’re helping ensure more veterans can enjoy a more safe and welcoming home.   

We are committed to reducing any negative impacts our business may have on the environment. Through our ongoing risk assessments, we have narrow exposure to environmental risks. When we identify a material risk, we address it. (See our Task Force on Climate-Related Financial Disclosures, or TCFD, Report for more detail on risk and how the company manages it.) Because we take our environmental commitment seriously, we set self-imposed goals for greenhouse gas emissions, energy conservation and other important initiatives. As importantly, we regularly look for additional opportunities to lessen our environmental impacts while balancing them with our business priorities.

Because we take our environmental commitment seriously, we set self-imposed goals for greenhouse gas emissions, energy conservation and other important initiatives. As importantly, we regularly look for additional opportunities to lessen our environmental impacts while balancing them with our business priorities.

SAIC’S ENVIRONMENTAL REPORTING APPROACH

At SAIC, we:

Implement ISO 14001 environmental management standards, promote initiatives to reduce our direct environmental impacts, and track and report key performance metrics. For additional details, see our ISO 14001 Standards Fact Sheet.Report our environmental performance through well-accepted Global Reporting Initiative Standards 2021, the Task Force on Climate-Related Financial Disclosures and the CDP global disclosure system.Employ the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard methodology to determine our GHG emissions inventory.Obtain independent assurance for our GHG emissions inventory. For calendar year 2023, this is a Type 2 moderate assurance in adherence to the AA1000 AccountAbility Principles (AA1000AS v3) of inclusivity, materiality, responsiveness and impact.

Learn more about Environmental Roadmap and Progress in SAIC’s 2024 Corporate Responsibility Report.

We are committed to reducing any negative impacts our business may have on the environment. Through our ongoing risk assessments, we have narrow exposure to environmental risks. When we identify a material risk, we address it. (See our Task Force on Climate-Related Financial Disclosures, or TCFD, Report for more detail on risk and how the company manages it.) Because we take our environmental commitment seriously, we set self-imposed goals for greenhouse gas emissions, energy conservation and other important initiatives. As importantly, we regularly look for additional opportunities to lessen our environmental impacts while balancing them with our business priorities.

Because we take our environmental commitment seriously, we set self-imposed goals for greenhouse gas emissions, energy conservation and other important initiatives. As importantly, we regularly look for additional opportunities to lessen our environmental impacts while balancing them with our business priorities.

SAIC’S ENVIRONMENTAL REPORTING APPROACH

At SAIC, we:

Implement ISO 14001 environmental management standards, promote initiatives to reduce our direct environmental impacts, and track and report key performance metrics. For additional details, see our ISO 14001 Standards Fact Sheet.Report our environmental performance through well-accepted Global Reporting Initiative Standards 2021, the Task Force on Climate-Related Financial Disclosures and the CDP global disclosure system.Employ the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard methodology to determine our GHG emissions inventory.Obtain independent assurance for our GHG emissions inventory. For calendar year 2023, this is a Type 2 moderate assurance in adherence to the AA1000 AccountAbility Principles (AA1000AS v3) of inclusivity, materiality, responsiveness and impact.

Learn more about Environmental Roadmap and Progress in SAIC’s 2024 Corporate Responsibility Report.

Sustainably managed forests combat climate change through carbon removal, storage and cycling. Trees absorb atmospheric carbon dioxide through photosynthesis and store it in the branches, trunk, needles, and roots. Using wood products for building stores tree carbon and using biomass for energy retains carbon within a natural loop.

Active forest management enhances carbon removal from the atmosphere compared to unmanaged forests. As forests mature the rate of carbon sequestration slows, and natural tree mortality increases. Working forests are managed to maintain optimum tree density and spacing resulting in a vigorously growing forest that minimizes the risk of catastrophic losses. Unmanaged forests increase the chance of carbon losses from disturbances such as fire, insects, disease infestations, or decay.

Timber harvest initiates the forest products manufacturing process and long-term storage of forest carbon in wood products. In addition, reforestation after harvest restarts the process of sequestration and storage in the next tree growing cycle. At the time of harvest, 68% of the carbon in a typical sawtimber tree is transported to the mill and 32% remains on site and enters the cycling process. The remaining material cannot be used in the production of forest products. This is a biogeochemical cycle where elements including carbon move through the soil, living organisms, air, and water.

The decomposition of treetops and roots and movement of tree carbon into the mineral cycle where it moves into the soil and atmosphere is a slow process. Twenty years after harvest in Idaho, approximately 35% of the carbon in tree parts that remained in the forest at the time of harvest is still held in tree biomass. Twenty years after harvest in the U.S. South, approximately 20% of the carbon is held in tree biomass.

Wood products manufacturing converts the logs into long-lived wood products, storing about 55% of the carbon in the wood and acting like a “carbon vault.” The residuals or byproducts produced during the lumber and wood panel manufacturing process are utilized to manufacture additional forest products or to produce biogenic energy.

Newly planted trees grow and capture additional carbon. Once they grow to the end of a rotation, harvest occurs and conversion of the harvested logs to wood products begins the long-term carbon storage. Replanting re-starts the sequestration process. When multiple rotations (cycles of tree planting, growth and harvest) overlap carbon storage in wood products, the result is cumulative carbon storage that increases over time.

Forest management concentrates on the growth of harvestable crop trees for use in solid wood products, which maximizes the amount of forest carbon that is captured and stored in long-lived wood products. Harvesting mature trees and replanting increases the rate of carbon uptake, as well as generating wood for lumber and other wood products. Overall, forests, harvested wood products, and urban trees in the U.S. offset more than 11% of total GHG emissions annually.

The greenhouse gas emissions from the boilers burning wood residuals produce biogenic emissions. Even though the wood residuals emit CO2 when burned, the carbon emitted is part of the biogenic cycle rather than an increase in total carbon in the atmosphere from burning fossil fuels. Using residuals for energy sourced from sustainably managed forests reduces wood waste and has the additional benefit of avoiding carbon emissions from fossil fuels.

Sustainably managed forests combat climate change through carbon removal, storage and cycling. Trees absorb atmospheric carbon dioxide through photosynthesis and store it in the branches, trunk, needles, and roots. Using wood products for building stores tree carbon and using biomass for energy retains carbon within a natural loop.

Active forest management enhances carbon removal from the atmosphere compared to unmanaged forests. As forests mature the rate of carbon sequestration slows, and natural tree mortality increases. Working forests are managed to maintain optimum tree density and spacing resulting in a vigorously growing forest that minimizes the risk of catastrophic losses. Unmanaged forests increase the chance of carbon losses from disturbances such as fire, insects, disease infestations, or decay.

Timber harvest initiates the forest products manufacturing process and long-term storage of forest carbon in wood products. In addition, reforestation after harvest restarts the process of sequestration and storage in the next tree growing cycle. At the time of harvest, 68% of the carbon in a typical sawtimber tree is transported to the mill and 32% remains on site and enters the cycling process. The remaining material cannot be used in the production of forest products. This is a biogeochemical cycle where elements including carbon move through the soil, living organisms, air, and water.

The decomposition of treetops and roots and movement of tree carbon into the mineral cycle where it moves into the soil and atmosphere is a slow process. Twenty years after harvest in Idaho, approximately 35% of the carbon in tree parts that remained in the forest at the time of harvest is still held in tree biomass. Twenty years after harvest in the U.S. South, approximately 20% of the carbon is held in tree biomass.

Wood products manufacturing converts the logs into long-lived wood products, storing about 55% of the carbon in the wood and acting like a “carbon vault.” The residuals or byproducts produced during the lumber and wood panel manufacturing process are utilized to manufacture additional forest products or to produce biogenic energy.

Newly planted trees grow and capture additional carbon. Once they grow to the end of a rotation, harvest occurs and conversion of the harvested logs to wood products begins the long-term carbon storage. Replanting re-starts the sequestration process. When multiple rotations (cycles of tree planting, growth and harvest) overlap carbon storage in wood products, the result is cumulative carbon storage that increases over time.

Forest management concentrates on the growth of harvestable crop trees for use in solid wood products, which maximizes the amount of forest carbon that is captured and stored in long-lived wood products. Harvesting mature trees and replanting increases the rate of carbon uptake, as well as generating wood for lumber and other wood products. Overall, forests, harvested wood products, and urban trees in the U.S. offset more than 11% of total GHG emissions annually.

The greenhouse gas emissions from the boilers burning wood residuals produce biogenic emissions. Even though the wood residuals emit CO2 when burned, the carbon emitted is part of the biogenic cycle rather than an increase in total carbon in the atmosphere from burning fossil fuels. Using residuals for energy sourced from sustainably managed forests reduces wood waste and has the additional benefit of avoiding carbon emissions from fossil fuels.

In this episode of ESG Talk, Caitlin Leibert, vice president of sustainability at Whole Foods Market, joins host Alyssa Zucker to explore how technology, supply chain engagement, and industry partnerships are driving sustainability strategies. The duo discuss key takeaways from Whole Foods’ 2023 Impact Report, highlighting the company’s commitment to responsible stewardship, sustainable sourcing, and transparency.

Listen Now

Looking for more? Subscribe to the ESG Talk podcast on Apple, Spotify, and YouTube.

ESG Talk is brought to you by Workiva, the world’s only unified platform for financial reporting, ESG, audit, and risk. Learn more at workiva.com.

In this episode of ESG Talk, Caitlin Leibert, vice president of sustainability at Whole Foods Market, joins host Alyssa Zucker to explore how technology, supply chain engagement, and industry partnerships are driving sustainability strategies. The duo discuss key takeaways from Whole Foods’ 2023 Impact Report, highlighting the company’s commitment to responsible stewardship, sustainable sourcing, and transparency.

Listen Now

Looking for more? Subscribe to the ESG Talk podcast on Apple, Spotify, and YouTube.

ESG Talk is brought to you by Workiva, the world’s only unified platform for financial reporting, ESG, audit, and risk. Learn more at workiva.com.

Native American students perform two to three grade levels below their white peers in reading and mathematics, and they are twice as likely to drop out of school.1 But this didn’t stop Lance West from earning his college degree in secondary education, even after the birth of his son at 17.  

Now he’s the principal of his tribe’s elementary school in Walker River Reservation, Nevada, with a drive to provide a positive educational experience for his students. Knowing Nevadan math scores were the lowest in the country, Lance sought a way to engage his classes outside of the current curriculum. So, he turned to Code.org. 

Founder and CEO Hadi Partovi believes every student in every school should have the chance to learn computer science. Nonprofit Code.org reaches these students with a combination of creating online courses and training existing teachers to teach their own coding classes.  

Cisco partners with Code.org, helping the foundation provide these courses on their website for free. And with intense global interest in AI, computer science is more relevant than ever before.  

To spark that computer science interest with Native American Code.org users, product manager Amy Woodman developed a “Star Quilt” module alongside a fellow indigenous teacher. For Lance, the difference in engagement was night and day. “I saw how students were engaged and hands-on from literally day one,” says Lance, whose favorite reaction to hear from his students is, “This is easy!” 

Click the above BBC StoryWorks video to learn more about the Star Quilt module and its impact on Lance’s students. Explore the many online courses Code.org has to offer by visiting their website and learn more on how Code.org is helping educators embrace AI in the classroom at TeachAI.org. 

For more information about Cisco and their successful mission to impact one billion people, visit One Billion Lives.  

Explore the many online courses Code.org has to offer by visiting their website and learn more on how Code.org is helping educators embrace AI in the classroom at TeachAI.org.

Native American students perform two to three grade levels below their white peers in reading and mathematics, and they are twice as likely to drop out of school.1 But this didn’t stop Lance West from earning his college degree in secondary education, even after the birth of his son at 17.  

Now he’s the principal of his tribe’s elementary school in Walker River Reservation, Nevada, with a drive to provide a positive educational experience for his students. Knowing Nevadan math scores were the lowest in the country, Lance sought a way to engage his classes outside of the current curriculum. So, he turned to Code.org. 

Founder and CEO Hadi Partovi believes every student in every school should have the chance to learn computer science. Nonprofit Code.org reaches these students with a combination of creating online courses and training existing teachers to teach their own coding classes.  

Cisco partners with Code.org, helping the foundation provide these courses on their website for free. And with intense global interest in AI, computer science is more relevant than ever before.  

To spark that computer science interest with Native American Code.org users, product manager Amy Woodman developed a “Star Quilt” module alongside a fellow indigenous teacher. For Lance, the difference in engagement was night and day. “I saw how students were engaged and hands-on from literally day one,” says Lance, whose favorite reaction to hear from his students is, “This is easy!” 

Click the above BBC StoryWorks video to learn more about the Star Quilt module and its impact on Lance’s students. Explore the many online courses Code.org has to offer by visiting their website and learn more on how Code.org is helping educators embrace AI in the classroom at TeachAI.org. 

For more information about Cisco and their successful mission to impact one billion people, visit One Billion Lives.  

Explore the many online courses Code.org has to offer by visiting their website and learn more on how Code.org is helping educators embrace AI in the classroom at TeachAI.org.

Sara Rosner| Director of Environmental Research and Engagement

Markus Schneider| Senior Economist—EEMEA

Patrick O’Connell, CFA| Director—Fixed Income Responsible Investing Research

Zac Greear| Climate Research Analyst—Responsibility

Climate-focused investing traditionally emphasizes how well industries are transitioning to low-carbon economies, such as responding to climate-friendly regulations, greener technologies and shifting consumer needs. But transition risks and opportunities are just one of several lenses to assess climate change’s impact on the investment landscape. Physical risks and opportunities are another.

Knowing Physical Threats Enhances Risk Assessment

The number of companies that acknowledge climate change’s direct financial impact grew 24% in 2023, according to a CDP Worldwide survey. But transition risks continue to command more of companies’ attention than physical risks. Between 2009 and 2020, for example, average mentions of transition risks in 10-K filings grew from four to 10, while average mentions of physical risks rose from two to just four, based on a Brookings Institute analysis. We think such low reporting for physical risks suggests that businesses are only beginning to appreciate their effect on the bottom line.

The threats are very real, however. Physical risks can be chronic—as with rising global temperatures and sea levels—or acute, as in the case of an extreme heatwave or a hurricane. Any of these can levy substantial financial burdens on businesses and global economic growth alike.

The financial toll of physical risks manifests in several ways, but often through local property damage or total loss. There are also costs for stranded or delayed production capacity, plant closures, supply chain disruptions and legal liabilities from not adapting assets and communities to be more resilient.

Disasters can also hurt local households, from job losses to residential displacement, which has implications for labor supply and customer demand for products and services. As these local extremes add up, their macro implications can throttle global productivity, trade and government revenues, as well as sway inflation and interest rates.

Physical Risks Won’t Disappear, Prompting More Ways to Cope

As a global disruptor, climate change remains one of a handful of mega-forces likely to permanently change how the world lives, works and consumes—all directly affecting countries, assets and companies on many levels.

For example, population centers will likely shift within countries and across continents as crops fail or it becomes too hot to work outdoors. Agriculture-dependent regions could be the most vulnerable, not only to food scarcity but to modern slavery.

Emerging-market (EM) regions are especially vulnerable to physical risks—frequently the result of flooding or drought. Thankfully, we’re seeing governments and the private sector deploying more coping mechanisms across these regions. These include adaptation plans, multi-hazard warning systems and risk assessments, which we believe help offset some of EM’s high exposure to physical risk (Display). This suggests that even countries with high physical-risk potential could take effective steps to manage it—and improve creditworthiness.

Data Show Climate Change Is Global but Impact Is Local

Florida hurricanes, Canadian wildfires, Abu Dhabi flooding—when hazards strike, they’re not only more frequent and costly but also hyper-regional. That’s why we believe that understanding physical risks at the local level helps investors better assess their potential financial damage, even for globe-spanning entities.

Obtaining local physical-risk data can be challenging. In the US, some granularity can be mapped using the Natural Hazards Index (NHI), which AllianceBernstein developed in partnership with the Columbia Climate School. The index tracks 14 types of extreme-weather disasters and assigns risk scores to some 75,000 underlying census tracts. Meanwhile, the global Aqueduct Water Risk Atlas, which tracks potential water-specific risks, pinpoints areas facing the highest risks to potable water quality and quantity.

Another hurdle in evaluating physical risks is tying them to companies’ physical locations, since they tend not to be uniformly disclosed. However, Climate TRACE (Tracking Real-time Atmospheric Carbon Emissions) is making headway, offering models to help investors identify which of a global firm’s locations are high emitters. Combined with Aqueduct Water Risk Atlas data, the results can effectively map where a global company’s local physical risks are greatest (Display). Many leading data sources, such as Moody’s, S&P and MSCI, also now offer physical risk-scenario analysis tools—although sometimes with conflicting insights that require careful assessment.

Engaging* directly with companies can also reveal much about their physical risk exposures and plans to address them. Engagement involves meeting with leaders, touring facilities and participating in shareholder meetings, among other activities. In many cases, more intel can be gained from dialogue than from data, especially when physical climate-risk reporting is still relatively new for many companies. This was the case with a large South American bank, whose most significant financial threat comes from—of all things—farming.

Banking on Agriculture: A Study in Physical Risk

The bank is a majority state-owned enterprise based in Brazil, the world’s largest agricultural exporter. About 85% of the nation’s farms comprise small family-owned homesteads that subsist on loans for which the institution is a top provider.

The bank’s primary physical risk exposure stems from the country’s epic regional flooding and drought. Both can disrupt farm production and upend the livelihood of its largest borrower group, who could be more likely to skip payments or default. The bank is also exposed through its insurance affiliate, which offers crop insurance, using farmers’ equipment and cash flows as collateral. Add in potential physical damage to branch locations and office equipment in the danger zones, and the picture looks grim.

A bank this large and with inherent government backing should have the resources to manage such risks and pursue the opportunities we see for it. Through our engagement with the bank, for example, we discovered helpful mitigation measures underway, such as spreading the insurance liability to willing participants in-country and abroad and more diversification across agricultural regions and crop types (Display).

We think inviting more government input and along with helpful solutions is another opportunity and should be in both the bank’s and the country’s interests, considering that agriculture represented about 24% of Brazil’s GDP in 2023.

The takeaway: physical risks can touch any industry in unique ways, but how companies respond can create opportunities that are just as unique.

Catastrophic and costly weather events continue to turn up the dial on physical and economic damage, creating life-altering disruption to people and property in every region. That’s why we believe that investors should seek opportunities stemming from the preparation, response and recovery surrounding climate-related hazards.

A growing number of relevant data sources, combined with engagement and an active investment approach, are especially helpful in this nascent area. Together, they can offer climate-focused investors effective tools to not only assess physical risks but also their potential effect on asset prices across regions, sectors, industries and companies of all stripes.

*AB engages issuers when it believes the engagement is in the best financial interest of its clients.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Views are subject to revision over time.

Learn more about AB’s approach to responsibility here.