Common Industry Challenges

I interviewed 20 sustainability managers 🎙️ That's their #1 pain point 🤕 ➡️ "Reporting is 1st. Impact is 2nd". Challenges that I can see with sustainability in companies: ❌ Competing frameworks confuse. ❌ Data collection becomes more important than actual impact ❌ Disconnect between reporting teams and operational teams ❌ Excessive time spent on documentation. ❌ Risk of greenwashing through selective reporting (I am sure you have your observations to add🙄) 5 secrets to turn this into the biggest opportunity for change: ✅ Use reporting to clarify sustainability vision 100%. ✅ Identify in-company 'spoilers' - and engage them! ✅ Change sustainability reporting from 'a burden' for all, to an 'invitation to do good' for each individual. ✅ Turn deadlines into celebration moments for internal change. ✅ Use data requirements as opportunities to understand the entire value chain (and opportunities for change). You know the pain ?🧐 📲 Ping me to re-write the script on your sustainability reporting ♻️ #circulareconomy #zerowaste #sustainability

The music industry is in an ongoing debate to determine the best way to payout streaming revenue to the music rights holders. The argument has several layers to it. Let’s break them down: 1. How should each user’s revenue be distributed? Currently, Spotify, Apple Music and Amazon pool their respective revenues into one big pot, then split it with all rights holders based on how many streams each song they own gets. This is called the ‘pro rata’ model. It’s easy, predictable, and often benefits superstar artists. But the user-centric model, used by SoundCloud, Tidal, Deezer, and others, distributes revenue on a per-user basis. So if you pay $10 / mo and only listen to Mariah Carey, then Mariah (and her various rights holders) get the full distribution of your payment net fees. The user-centric model is more volatile (e.g. what happens if you don’t listen to any artists for a month?), and may cost more to maintain but studies say it boosts revenue for middle-class artists who have smaller but passionate fanbases. 2. Should longer songs get more revenue than shorter songs? The current payout models count 1 full stream once a song has been played for a minimum of 30 seconds. This is quick and efficient, but too democratized for some critics. It means a 31-second meditation track can generate the same amount of money as hip-hop’s first big single, the 14-minute medley, “Rapper’s Delight.” A solution could be what Will Page proposed on our podcast episode: a multiplier. For each additional minute of a song listened to over 4 or 5 minutes, the song would receive a ~1.2x boost in streaming revenue. 3. Should the artist you start a listening session with be rewarded more? If you start your Apple Music session by searching a Justin Bieber song, then the algorithm plays a Selena Gomez song, should Bieber be paid more than Selena? Today that’s not the case, but people are pushing for this. Think about a supermarket. The grocery store stocks shelves and negotiates with suppliers based on their brands’ influence on consumers. If a particular brand is more likely to lure customers in, then those brands want to be compensated more for that. Music streaming is the digital version of that. These are three of several debates on streaming. Others including price raises, advances, and revenue splits between labels, publishers, and streaming services. But the underlying tension stems from music streaming growth slowdown, which puts more pressure on the competing incentives between streaming services and rightsholders. If the industry can find ways to grow the overall pie, then everyone’s happy. But it’s easier said than done. If you enjoyed this breakdown, we did a whole episode on Trapital about this topic with Bloomberg’s Lucas Shaw, check it out here: https://lnkd.in/gckpbiBd What do you think is the best payout model for streaming?

Mario Draghi's analysis of the future of European competitiveness highlights the changes that I have long considered necessary and urgent. Draghi points out that the telecom sector is overcrowded: "Today, the EU has dozens of telecom players serving around 450 million consumers, compared with a handful in the US and China, respectively," and adds, "as a result, in Europe both revenues per subscriber and capital expenditure per capita (...) are less than half the US’ and Japan’s levels," reaching the conclusion that "the declining profitability of the telecom sector now may represent a risk for industrial companies in Europe." There couldn’t be a more authoritative confirmation of the perfect storm I also described on stage at the GSMA Mobile World Congress in Barcelona in 2023 (https://lnkd.in/dfi5yQss). That’s where I showed how it was necessary and urgent to change the rules of the game, because #InactionIsNotAnOption. Some may have thought I was being provocative, but step by step, we are all converging on the same positions. First, there was the report "Much More than a Market" by Enrico Letta and Jacques Delors Institute, then the White Paper by the European Commission with Thierry Breton "How to master Europe’s digital infrastructure needs?". Now, Mario Draghi's perspective joins them, recommending to "reform the EU’s regulation and competition stance to complete the digital single market for telecommunications, harmonizing rules and favoring cross-border mergers and operations," and he adds in more detail: • "reduce country-level ex ante regulation and favor rather ex post competition enforcement • facilitate cross-border integration and the creation of EU-wide players • introduce a ‘same rules for same services’ principle across the EU • encourage the definition of commercial contractual agreements for terminating data traffic and infrastructure cost-sharing • incentivize the deployment of new infrastructures by defining cut-off dates for older technologies". Well, let’s continue down this path, united as we are already doing, thanks to the work of organizations such as the Confindustria team led by Emanuele Orsini, GSMA, and Connect Europe, with the indispensable contribution of the Ministero delle Imprese e del Made in Italy by Adolfo Urso, Alessio Butti, Agcom, and AGCM. We are ready to do our part, aware that the game we are playing is one of the most important: without #TLC, there is no digitalization. Report “The future of European Competitiveness”: https://lnkd.in/dhb875VR

If you are a leader or practitioner of #diversity, #equity, or #inclusion, do you facilitate activities, or do you create impact? They're not the same thing. In conversation after conversation I've had with DEI teams in the last few months, a common theme is anxiety in the face of change. The language they've spent years using is being forced to change. The activities they've made into their bread and butter are being suspended or forced to adapt. Newer or less mature DEI teams tend to see their activities and their impact as one and the same. They reason that, if they provide event programming and support employee networks, their impact on the organization must be "event programming existing" and "employee networks feeling supported." In the face of change, they grieve not only the loss of the status quo, but the perceived loss of all impact they could make. More established or mature DEI teams see their activities as a means to achieve their desired impact. They're able to identify problems in the organization that need solving and develop activities that best utilize their resources to solve these problems. They reason that, because the organization fails to adequately create belonging for all of its employees due to inconsistent manager support and a company culture that doesn't value people, they can solve the problem by increasing managerial consistency and creating a more people-centric culture. In the face of change, they grieve the loss of their activities—but can quickly pivot to new ones that achieve the same goals. We can learn a lot from these teams. If you want to sustain your impact even through disruptions to your team's typical operations, you can start by doing the following: 🎯 Define the problem you're working to solve, in context. Data, both qualitative and quantitative, ensures that you can identify the biggest gaps in your organization's commitment to its values, understand what areas DON'T need fixing so you can conserve your effort, and can start strategizing about how to solve root causes. 🎯 Pull out the biggest contributors to unfairness and exclusion. It's one thing if a manager in Sales communicates disrespectfully. It's another thing altogether if the culture of the entire Sales team glorifies disrespect. Understanding the scale of the issues we face can help us prioritize solving the biggest issues affecting everyone, rather than chasing symptoms. 🎯 Design interventions, not activities. Too many practitioners create an initiative because that's what they've been asked to do. Think of them instead as interventions: carefully-designed attempts to shift the status quo from Point A to a more inclusive, more fair Point B, by solving real problems that hold your organization back. The more we shift our work toward real impact, the more effective we'll be—regardless of the sociopolitical climate, regardless of backlash. Let's hone our focus.

What’s holding back natural climate solutions? Natural climate solutions (NCS)—from reforestation and agroforestry to wetland restoration—have long been championed as low-cost, high-benefit pathways for reducing greenhouse gases. In theory, they could provide over a third of the climate mitigation needed by 2030 to stay under 2°C of warming. But in practice, progress is stalling. A sweeping new PNAS Nexus study reveals why. Drawing on 352 peer-reviewed papers across 135 countries, researchers led by Hilary Brumberg cataloged 2,480 documented barriers to implementing NCS. The obstacles are not ecological. Rather, they are human: insufficient funding, patchy information, ineffective policies, and public skepticism. The result is a vast “implementation gap” between what is technically possible and what is politically, economically, or socially feasible. The analysis found that “lack of funding” was the most commonly cited constraint globally—identified in nearly half of all countries surveyed. Yet it rarely stood alone. Most regions face a tangle of interconnected hurdles. Constraints from different categories often co-occur, compounding difficulties: poor governance erodes trust; disinterest stems from unclear benefits; technical know-how is stymied by bureaucratic confusion. These patterns vary by region and type of intervention. Reforestation projects, for instance, face particularly high scrutiny over equity concerns—especially in the Global South, where land tenure insecurity and historical injustices run deep. Agroforestry and wetland restoration often struggle with the complexity of design and monitoring. Meanwhile, grassland and peatland pathways remain understudied, despite their importance. The study’s most striking insight may be spatial. Countries within the same UN subregion tend to share a similar profile of constraints—more so than across broader development regions. This geographic clustering suggests an opportunity: Supranational collaboration, if properly resourced and attuned to local context, could address shared challenges more efficiently than isolated national efforts. Crucially, the authors argue that piecemeal fixes will not suffice. Because most countries face an average of seven distinct constraints, many from different domains, effective solutions must be integrated and cross-sectoral. Adaptive management—a flexible, feedback-based approach—could help. By identifying which barriers arise at each stage of an NCS project’s lifecycle, it may be possible to design interventions that are not just technically sound, but socially and politically viable. Natural climate solutions still hold vast potential. But unlocking it will require less focus on where trees grow best—and more on where people can make them thrive. 🔬 Brumberg et al 2025. Global analysis of constraints to natural climate solution implementation. PNAS Nexus. https://lnkd.in/gDmYJEph

This is IMPORTANT ⚠️‼️ The “comeback” of nuclear power is one of main topic debated. But challenges to be overcome are multiple, and some of those quite overlooked. A key topic often debated is the ability of nuclear power to deliver on budget and on time. The over-cost and delays of new plants is quite a recurring theme – at least in most of advanced economies. Another theme that should require quite attention concerns uranium. As the recent IEA Report on the “The Path to a New Era for Nuclear Energy” highlights, the uranium production is highly concentrated in four countries, which jointly account for more than threequarters of global uranium production from mines. Enrichment capacity is also highly concentrated, with more than 99% of the enrichment capacity in four suppliers, with Russia accounting for 40% of global enrichment capacity. Among the countries mostly important for uranium production, one clearly emerges above the others – and it is Kazakhstan – that alone meets almost 40% of global uranium mining. This is already an issue – as in the energy world – the keyword is always one: diversification. But another big issue is that – if you sell uranium – you will create stronger ties with those investing and believing in the role of nuclear power. And if we take the last years, of 52 nuclear reactors that began construction, 48 are Russian or Chinese design. Therefore it might not be a big surprise if – as the article states - two-thirds of sales by Kazakhstan’s state owned mining group Kazatomprom went to buyers domiciled in Russia, China and the home market combined in 2023, compared with about one-third in 2021. A potential new era for nuclear energy goes also very much through ensuring proper (and diversified) supplies of uranium

Scope 3 Emissions 🌎 Scope 3 emissions are often the largest and most challenging part of achieving net zero goals. These emissions encompass all indirect emissions within a company’s value chain, including those from purchased goods and services, investments, and the use of sold products. Due to the broad range of sources, Scope 3 often constitutes the majority of a company's overall emissions. Despite their significance, detailed reporting on Scope 3 emissions remains uncommon. Complex accounting methodologies and the perceived lack of control over these indirect factors are often cited as reasons. Additionally, current regulations are not as stringent for Scope 3 emissions compared to Scope 1 and 2, resulting in lower disclosure rates. This leaves a gap in understanding the full climate risk associated with a company’s operations. However, this gap is starting to close. Regulatory bodies in regions like the US, EU, and New Zealand are increasingly focusing on mandatory disclosures that include Scope 3 emissions. Central banks are also beginning to factor in Scope 3 emissions in climate stress tests. This trend suggests that more rigorous regulations and policies will likely emerge, enhancing transparency and accountability. As scrutiny intensifies, a more consistent approach to Scope 3 disclosure is anticipated. This shift will provide a clearer view of the climate risks companies face, particularly in relation to carbon-intensive activities within their value chains. Accurate and comprehensive reporting on Scope 3 emissions will become increasingly important for evaluating a company's true climate ambition. Investors and stakeholders should closely examine Scope 3 emissions to assess potential future risks. Higher Scope 3 emissions may indicate greater exposure to transition risks that could impact asset values and operational costs. The evolution of climate accounting practices will likely play a crucial role in shaping the future of corporate climate strategies. Source: HSBC #sustainability #sustainable #business #esg #climatechange #climateaction #sdgs #scope3 #emissions

Sun Burned Solar panel specialty finance companies are getting burned. Sunnova & Mosaic filed for bankruptcy in the past few days, while SunPower filed/liquidated last year, and Sunrun remains a going concern despite its cash burn. The problem with solar is not on the manufacturing side, it’s with the specialty finance solar companies. Sunnova filed for bankruptcy holding $13.5 million in cash vs. $8.9 billion in debt and will likely move to liquidate as it is difficult for highly leveraged finance companies to restructure—ouch! Solar panel ABS bondholders are also getting burned: - Senior bonds down 10-20 points (no impairment expected) - BBB-rated bonds down 30-40 points (50% impairment probability, case-by-case basis) - BB-rated bonds down 60-80 points (impairment likely) Specialty Finance got into trouble due to these 8 key reasons: 1. Overleverage 2. High cost structure 3. Tariffs for import of the panels (largest solar manufacturers are Chinese) 4. Killing the tax credit for homeowner who purchases the panels (under reconciliation) 5. Homeowners who are unable to re-sell solar power to their local utility in certain key states 6. Rising default rates (despite homeowners with high FICO scores) 7. Financing costs for solar panels has soared in the higher-for-longer environment 8. Yields rose more than the loan rate as the market deteriorated, resulting in losses for the specialty finance company Key points: 1. Like auto’s sometimes it’s not the OEM, it’s the specialty finance crowd that gets itself into trouble 2. ABL managers who financed these specialty finance solar companies will likely incur meaningful loss 3. Select opportunity to purchase distressed/discounted solar ABS 4. This should not be a surprise; the fire alarm has been going off for the past 12 months

Walk through a 10-year-old PV plant and you see the real cost of shortcuts. You don’t just see aging modules or faded labels. You see the consequences of decisions made under pressure, with one eye on CAPEX and the other on the calendar. Let’s face it: Most of the pain points in old PV plants were avoidable. You can trace them back to the “good enough” thinking that ruled the last solar boom. 𝗪𝗵𝗮𝘁 𝘀𝘁𝗮𝗻𝗱𝘀 𝗼𝘂𝘁 𝗲𝘃𝗲𝗿𝘆 𝘁𝗶𝗺𝗲? - DC connectors, badly crimped and never checked. Today, they’re the #2 cause of failures and fire risk on site. TÜV and Fraunhofer have been saying it for years, but too many plants still live with this silent threat. - Inverters, sold as “20-year” assets. In reality? Most fail multiple times before year 15. DNV and NREL put average MTBF under 2 years. You end up with a patchwork of repairs, hot swaps, and lost energy. - Cables, laid straight in the soil for speed. No trenching, no sand, just dirt. Fast install, yes. But once water gets in, you’re looking at full cable replacements-years before the modules themselves need attention. Sounds great, but here’s the reality: Back then, cost pressure was king. Standards were vague, if they existed at all. Everyone built for COD, not for year 15. The result? 80% of the big interventions I see today could have been avoided with better EPC execution. Because building for COD is easy. Anyone can hit a deadline, sign off, and hand over the keys. But building for safe, reliable operation over 20+ years? That’s the real challenge. Bottom line: Shortcuts save money on day one. But you pay for them, again and again, for decades. What’s your experience with legacy PV assets? How do you handle the cost of early mistakes? #AndreasBach #SolarEnergy #EPC #Renewables #BESS #OandM #AssetManagement

Why is geology always behind production? It's a pattern I've seen repeatedly throughout my career, and it reveals something important about how we allocate capital. It's not geology’s fault. Geology is tough - Geology when constrained by production is much tougher.  The problem is structural, and it comes down to how mining companies think about capital allocation. When production is running smoothly, geology departments often get squeezed on budgets. After all, why spend money defining resources you won't need for years? The production teams are hitting their targets, the mill is running at capacity, and everything looks fine on the quarterly reports. So the geology budget gets trimmed, delayed, or reallocated to more "urgent" priorities. Inevitably, production catches up to geology. Suddenly, there aren't enough defined tonnes to maintain production rates. The company faces a choice: slow down production (unacceptable to shareholders) or mine lower-grade material that wasn't part of the original plan (damaging to profitability). Either way, it's a lose-lose situation. At this point, everyone looks at the geology department and asks, "Why aren't you ready?" But the reality is they weren't given the resources to stay ahead of production in the first place. Resource renewal is particularly critical for many operating mines, as the industry faces a looming resource shortage. In five years, many miners simply won't have enough tons in reserve to meet production requirements. It’s also not sufficient for geology to replace each tonne that is mined. Each tonne in the future mine plan will require multiple tonnes in the resource to reserve workflow. Not every tonne drilled will be economic. So what's the solution? The most forward-thinking mining executives understand that resource drilling = derisking future production and creating business optionality.  Level 4 thinking understands the importance of maximizing the efficiency with which inferred resources can become reserves. Resource development becomes a strategic investment and not just a cost centre. Changing our questions is a good start. Instead of asking, "How much do we need to spend on drilling?" the question should be, "How quickly do we need to derisk our resource, and what's the most efficient way to do that?". Our message to mining executives is this: if your geology department is consistently falling behind production, revisit your capital allocation strategy first. More drilling is not the answer. Investing in approaches that fundamentally improve the efficiency of resource conversion is. Objectivity can increase resource conversion efficiency +30-40% respecting QP/CP requirements.  Efficiency helps get ahead of production and secure long term reserves. Reach out, and let's have a conversation about improving your resource efficiency. It'll be different. Very different. Objectivity’s approach is zero risk. We don't engage unless we can clearly demonstrate value.