The Food and Drug Administration regulates 25 cents of every dollar of the national gross domestic product. The agency oversees food safety, tobacco products, dietary supplements, prescription and over-the-counter medications, vaccines, biopharmaceuticals, medical devices, cosmetics, and veterinary products. Another special area of focus has been added to its portfolio: increased oversight of high-risk “compounding pharmacies,” whose products killed dozens and sickened hundreds in Massachusetts in 2012. In the proposed 2015 budget for 2015, this agency gets a 1% increase, to $2.6 billion.
From the Editor
China has announced some good energy news: the country will install more solar power in 2014 than previously planned. The revised forecast by the Chinese Bureau of Energy now projects 12 GW of solar power will be added to the country’s grid throughout ten provinces. Here’s the catch: China’s toxic air pollution is becoming so severe, warn Chinese scientists, that the country is at risk of creating a “nuclear winter” effect, in which photosynthesis in plants slows down due to lack of sunlight, threatening the country’s food supply.
More companies are adding to their in-house economist staffs. The number of private-sector economists rose 57 percent in 2012 from 2009, to 8,680 from 5,510, according to the Bureau of Labor Statistics. The reason is the need to review large amounts of information—Big Data—to better determine opportunities and risks. Increased volatility in global markets, the growing complexity of operations, and rapid, disruptive change driven by technology have created a huge, fast-moving, and fluid flow of information that needs to be evaluated for more accurate business projections.
The Sustainability Accounting Standards Board is releasing new accounting standards that include, for the first time, banks and other financial companies in their all-industry sectors scope. The new reporting asks for data on basic environmental issues such as greenhouse gas emissions and on more qualitative, reputational concerns, such as the number of complaints handled by compliance departments.
California has attracted special scrutiny since the Affordable Care Act’s rollout in October, due to its large uninsured population: about 15 percent of the national total. With six weeks to go in the open enrollment period, a recent checkup charts the state’s progress: 828,000 Californians have signed up through the online health care exchange, more than 20 percent of the 3.3 million who have enrolled nationwide. That’s 90 percent of the state’s target for the initial four-month period.
Raising the minimum wage to $10.10 an hour, as proposed by President Obama, would increase income for about 15 percent of low-wage working Americans—about 16.5 million working Americans— and perhaps benefit an additional 8 million workers whose earnings are around that level. The raise would lift about 900,000 people above the poverty line. That’s according to a recent report by the Congressional Budget Office. The CBO also projects that the raise could cost 500,000 jobs, about 0.3 of the workforce, due to employers laying off low-wage workers or hiring fewer of them.
You could guess that millennials want to work for companies on the cutting edge of innovation, even without a study by PricewaterhouseCoopers. However, the figure measured - 78 percent - is surprisingly high in this time of widespread millennial unemployment, low wages, and lower job expectations. Equally eye-opening are other figures that quantify this generation's CSR interests: 63 percent of those surveyed gave to charities and 43 percent either volunteered or joined a community organization, according to a Deloitte study.
Now that sustainability factors are increasingly integrated into overall business strategy, it’s a challenge to quantify progress on sustainability so that it can be better measured, and therefore, be better managed. To address this issue, Trucost, a firm that helps companies manage environmental risk and opportunity across operations, supply chains and investment portfolios, has developed The Natural Capital Leaders Index.
Energy efficiency cuts costs while renewable energy use makes products more attractive to consumers. That’s the mantra increasingly being adopted by many forward-thinking businesses. Now the Environmental Protection Agency has singled out three Fortune 500 companies as the top users of renewable energy as a key part of implementing this strategy. Intel Corporation sources 100 percent of its demand—over three trillion kWh—from renewable sources. Microsoft’s renewable energy use is 80 percent of its total, but that’s still nearly two trillion kWh of clean energy.
Brands have a complex job to sell their products and services these days. Not only do they have to figure out how to effectively distribute their messages through new, multiple media channels, but they have the existential challenge of crafting believable messages in an age of skepticism. When Havas Media, a marketing agency, conducted a worldwide survey to find out what 134,000 consumers in 23 countries thought of 700 brands, a majority reported that they would not care if 73 percent of them just vanished. In Europe and America, that figure rose to 92 percent.
Presidential bully pulpit “persuasion” re. basic economic issues was on full view last week. President Obama used executive action to raise the minimum wage of employees of future government contractors, a message to business to get on board with across-the-board minimum wage increases. And a group of CEOs, including those of Boeing, Bank of America, Morgan Stanley, Walgreen’s, Marriott International, and McDonald’s, met at the White House to hear out the President on the problem of the long term unemployed, Four million unemployed are estimated to be in this category.
Despite the ongoing political wrangling about the Affordable Care Act, insurance companies are working to turn the new law into new business. Wellpoint, affiliated with the Blue Cross and Blue Shield Association, reports the addition of 500,000 new customers through state and federal exchanges since they opened on October 1. That's over 15 percent of the three million who have acquired coverage through the marketplaces. The rollout has been costly: 2013 profits are down slightly from 2012, from $2.7 billion to $2.5 billion. And 2014 may accrue extra costs of $100 million.
Global clean energy investment in 2013 was $254 billion, according to Bloomberg New Energy Finance. Sound like a big number? Actually, that figure represents a decrease of 11 percent from 2012. Ceres, an organization that brings together investors, companies, and interest groups, has decided to view this sobering fact as an opportunity by starting a “Clean Trillion” campaign to raise $1 trillion a year for clearn energy investment for 36 years.
Sustainability is moving from a varied collection of diverse programs into an integrated, risk-based business management strategy for leadership companies in 2014. That’s the news in a new report by the National Association of Environmental Management on ideas that are shaping the future of environmental, health, and safety management. “Planning for a Sustainable Future” describes 12 key trends, derived from interviews with corporate leaders and sustainability experts.
The personal commitment of business decision makers is driving sustainability more than official corporate goals and objectives. That’s the finding of a recent study by the Shelton Group, “B2B Pulse.” Why is that important? Because another finding is that overall, business owners and CEOs are not sold on sustainability as a competitive advantage. Only eleven percent of companies have or are developing a sustainability scorecard to guide purchasing.
It’s early in the New Year, but it already looks like the revolution now in progress in U.S. health care will make 2014 the most consumer-friendly ever. The new systems now settling into place focus on the consumer, not the care provider, as they have in previous decades. The Affordable Care Act, new technology, and the other many changes throughout the market may be confusing, but all are aimed at giving consumers more choice and more control over decisions about their health.
The risk of severe economic disruption from climate change is rising, and a few more years of increasing carbon emissions could make the problem impossible to solve. That’s the warning from the Intergovernmental Panel on Climate Change, a UN panel of climate experts that won the Nobel Peace Prize for its work on the risk of climate change. “In the dry language of a technical committee, the draft outlines an increasingly dire situation,” quotes The New York Times, which obtained a copy of the panel's draft report.
The definition of material information has always been vague. A Supreme Court decision tried: “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available.” That’s pretty subjective—it could always be argued that something is not material because it was not “substantially likely” to alter the “total mix” that affects the stock price of a company “significantly.” What to do?
The EU’s new report, Trends to 2050, projects European carbon emissions levels to mid-century. First, the good news: the study predicts that by 2050, gas, wind and nuclear energy will each be providing around a quarter of Europe’s energy supply. Efficiency gains will also be major: “Despite significant economic growth making the EU economy 78% larger in 2050 than it was in 2010, there will be a decline of total energy consumption by 8%.” Here’s the problem: the study only considers existing CO2 reduction schemes.
"Innovation" seems to be the biz buzzword of the moment. It’s being applied to all sorts of concepts, missions, and definitions of company cultures. In Austin, Texas, one of our more tech-savvy, culturally creative communities, it’s a common reality.