Sustainablog

This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.

5.3.05

Labour judge reinstates first Sarbanes-Oxley protected whistleblower

Labour judge reinstates first Sarbanes-Oxley protected whistleblower
Lisa Roner
24 Feb 05
The first person to win protection as a whistleblower under the
Sarbanes-Oxley Act has been reinstated to his former job at a small
Virginia Bank by a federal Labor Department judge
In what many called the first test case of the new corporate whistleblower
law, Judge Stephen Purcell has ordered Cardinal Bankshares to reinstate
David Welch, its former chief financial officer, and compensate him with
nearly $65,000 in back pay and damages.

The judge has also ordered Cardinal to pay $108,000 in legal fees to
Welch?s lawyers.

Welch, who questioned Cardinal Bankshares? accounting practices, is one of
three workers to win protection under the provision of SOX designed to
shield business insiders who report questionable accounting from
retaliation. Settlements have been reached in 16 other cases.

Since the law to effect in 2002, workers have filed 144 claims with the
Department of Labor, saying their employers took action against them for
pointing out instances of accounting abuse.

Purcell?s ruling affirms his January 2004 decision ordering Welch?s
reinstatement at Cardinal. The new ruling, however, outlines specific
terms and conditions and rebuts specific arguments by Cardinal that
bringing Welch back would be too difficult.

?While Welch?s reinstatement will pose certain difficulties, those
difficulties are not insurmountable and cannot defeat reinstatement,?
Purcell writes in his decision.

Cardinal says it will appeal the ruling. An attorney for Cardinal says the
bank will file an appeal with a labour department Administrative Review
Board and that if the board decides not to take up the case, the bank may
appeal to a federal court.

Nell Minow, founding principal of the The Corporate Library and a former
government lawyer involved in whistleblower cases, predicts the ruling
will stand, saying it reflects exactly what the law was intended to
accomplish.

And she says the ruling sets a precedent for back pay and damage
compensation awards in other cases.

Welch says the ruling, while difficult, ?answers prayers for a clear-cut
resolution in the case?.

?If the door is open at Cardinal Bankshares, I?ve got to keep up my end of
the bargain and walk through that door,? Welch says.

But Minow says reintegrating a whistleblower is always very difficult ?
and sometimes impossible.

?You can legislate so far, but at the end of the day, you have people
working together who either trust each other or they don?t,? Minow says.
?None of us would want to be in that spot or to work with someone coming
back in. We all love Erin Brockovich, but do we want to work with her??

Minow applauds Welch?s tenacity for wanting to return to Cardinal, but
says most whistleblowers go to a different company office on their return
and most do not stay with the company long after reinstatement.

She predicts Welch will part ways with Cardinal within a year.

But Minow says as difficult as everyone involved knows it is to reinstate
a whistleblower, it is important to have the rules in place, so that ?we
don?t encourage or even permit retaliatory action?.

Canadian Government Wins Kudos for New 'Climate Change' Budget

Canadian Government Wins Kudos for New 'Climate Change' Budget
GreenBiz.com, 25 February 2005 - The Canadian government is winning praise
for new federal budget commitments to energy-efficient building and
renewable energy projects. Legislators hope the financial investment will
help lower domestic greenhouse gas emissions, enabling Canada to meet its
Kyoto Treaty requirements.
"There has been a lot of talk up until now about meeting our Kyoto
obligations but this budget contains a serious commitment in terms of
dollars and that is very positive", said Alex Zimmerman, president of the
Canada Green Building Council. "Canada can be a world leader in greenhouse
gas reduction and a world leader in sustainable development. This is a win
for the economy and for the environment."
Budget highlights include:
$1 billion to establish a "Clean Fund" to encourage the most
cost-effective projects to reduce greenhouse gas emissions and stimulate
more action to reduce GHGs
$225 million to quadruple the number of homes retrofitted under the
EnerGuide for Houses Retrofit Incentive program
At total of $1.81 billion over the next 15 years to encourage investment
in wind other renewable energy sources
A recognition that greening the Government of Canada's buildings is the
lowest cost source of emission reductions as part of the Federal House in
Order initiative, which seeks to lower direct GHG emissions levels from
federal government operations
$300 million provided to enrich the Green Municipal Funds, which make
investment in innovative local green projects

Zimmerman also pledged that the Canada Green Building Council will
continue working with the Government of Canada to meet emissions targets.
The federal government has played an important role in supporting the
Council by providing funding to sponsor the implementation of the LEED
Canada rating system. LEED is a voluntary, market-driven rating system
developed to provide a standard benchmark and certification for the design
and construction of green buildings. Research has shown that LEED
certified buildings use on average 30% less energy than conventional
buildings.
"Over 30% of Canada's greenhouse gases come from constructing and
operating commercial and residential buildings", continued Zimmerman. "We
believe that some of the lowest cost and most significant green house gas
reductions will come from this sector."
"The Canada Green Building Council is working hard to educate the
buildings industry on the economic and environmental benefits of green
buildings. The federal government must continue to pursue creative and
innovative ways to encourage green design and construction as well as
retrofits of existing commercial and residential buildings across the
country."
"Public and consumer demand for green buildings and healthier, sustainable
communities is rapidly growing," concluded Zimmerman. "It's smart for this
government to respond to that demand."

Poll: U.S. has conservative tack on innovation -- U.S. technology executives mainly focus on existing products and services

Poll: U.S. has conservative tack on innovation
U.S. technology executives mainly focus on existing products and services

By Johan Bostrom, IDG News Service
February 25, 2005

U.S. technology executives identify innovation as essential to improving
their competitiveness, yet their approach to innovation is conservative,
mainly focusing on existing products and services, according to a study
published Thursday by consulting company A.T. Kearney Inc.

Top executives at manufacturers, software companies, and IT service
companies in the U.S. clearly feel the pressure from the risk of falling
behind global competition in technology and telecommunications, according
to a survey of more than 300 executives. The survey was conducted in late
2004 and early 2005.
"Ninety percent of the executives see the major changes going on. But they
don?t seem to react to them," said John Ciachella, vice president of A.T.
Kearney?s high technology practice.
The respondents said their competitors, which today are often
international companies, have become larger and more agile. Still, only
about one-third of the executives indicated that they have instituted
formal functions for measuring their position in the market. The majority,
54 percent, said they use informal discussions to measure competitiveness.

"They are trapped in their company's structure, organized in product
groups and market groups. With the ongoing change of market boundaries, if
you only look at the current peer group, the real competition is not
coming up on your screen," Ciachella said, asking for more formal and
regular planning of strategies at a company level instead of at a product
or strategy level.
The survey respondents, most of whom were chief executive officers,
pointed to product and service innovation as the most critical element of
competitive success in technology and telecommunications.
"But the companies' actions -- improvement of existing products, bundling
products and service offerings and continuous investment in research and
development -- add up to innovation around the core: around the current
offering," Ciachella said.
Ciachella attributed this cautious approach to innovation to the aftermath
of the IT bubble of the late 1990s. "In the pre-bubble time, there were
bets all over the place -- too many. Now, maybe the pendulum has swung too
far to the other side."
Larry Keeley, president of the innovation strategy company Doblin and
adjunct professor at Illinois Institute of Technology, was surprised by
the survey results.
Doblin's own diagnostics and Keeley's experience indicates that U.S. tech
companies are even more conservative than A.T. Kearney found them to be.
"Tech companies overemphasize on products to the exclusion of changing
business models or improving the customer experience," Keeley said,
pointing to telecommunications equipment manufacturers and carriers as an
example.
"Compared to the tremendous value of the global telecom market, the level
of innovation is lamentable. The industry chases obvious feature
enhancements, equipping the phones with all these features and function
variations, but in the end they only chew each other up," Keeley said.
By way of contrast, Keeley pointed to innovations by two foreign companies
in the mobile telecommunications industry. Virgin Mobile Telecoms has
introduced an uncomplicated prepaid service and Samsung Electronics has
created a more graceful product experience on its phones, he said.
Keeley sees two reasons for U.S. companies' lack of innovation.
"They have given up. Instead of saying, 'Let's invent the next Tivo,' they
back up and cut the operating costs by consolidating. And there are too
many engineers. That's why you can't buy an easy-to-use telephone without
all these features," Keeley said. Other types of professionals in the
companies should get involved in innovation, he said.
The A.T. Kearney study was conducted with the Business Performance
Management Forum, which includes over 500 companies, and the Chief
Marketing Officers Council, which represents over 1,000 technology
companies.
About 60 percent of the respondents were chief executive officers, with
the rest mostly chief technical officers, chief marketing officers or
heads of strategy at small to large original equipment manufacturers,
software companies and IT service companies.

Oceans apart: More evidence that global warming is man-made

Climate change

Oceans apart
Feb 24th 2005 | WASHINGTON, DC
From The Economist print edition

More evidence that global warming is man-made
Get article background
SOME people do not believe global warming is happening; some believe it is
happening, but that it is the result of natural variation; and some
believe it is being caused by human activity. A paper presented to the
AAAS by Tim Barnett, of the Scripps Institution of Oceanography in La
Jolla, California, provides further evidence that the third camp is right.
Most published research on climate change looks at the atmosphere. That is
partly because the records are good and partly because it is in the
atmosphere that the human-induced changes that might be causing it are
happening. One of these changes, which would promote global warming, is a
rise in the level of so-called greenhouse gases (particularly carbon
dioxide) which trap heat from the sun and thus warm the air. Another,
which would oppose warming, is a rise in the quantity of sulphate-based
aerosols, which encourage cloud formation and thus cool the air by
reflecting sunlight back into space. Dr Barnett, however, thinks that the
air is the wrong place to look. He would rather look in the sea. Water has
a far higher capacity to retain heat than air, so most of any heat that
was causing global warming would be expected to end up in the oceans.
And that was what he found. In a follow-up to a preliminary study
published four years ago, he looked at ocean-temperature surveys made over
the past 65 years. He confirmed that the sea has got warmer since the
1940s, and particularly since the 1960s. Furthermore, it has done so from
the top down. At a depth of 700 metres, things are almost unchanged. But
surface temperatures in all six of the ocean basins he examined (the north
and south Atlantic, Indian and Pacific oceans) have increased by about
half a degree Celsius.
So the Earth has, indeed, warmed up over the past few decades, as most
climatologists already believed. But the actual pattern of temperature
change in each of the six ocean basins is different (see chart), and that
diversity allowed Dr Barnett to test the idea that people, rather than
natural phenomena, are the reason for the warming. He took two widely
respected models of the world's climate (which couple events in the
atmosphere with events in the sea, and take account of both greenhouse
gases and aerosols) and played with their variables in different ways. He
tried mimicking the effects of the natural variability caused by feedback
loops within the climate, and also the effects of small changes in the
sun's output and the consequences of volcanic eruptions, both of which
affect the climate. But the only changes that produced patterns of heating
which matched reality were the man-made ones. And the match was good in
all six basins. Which is confirmation, in Dr Barnett's eyes at least, that
the guilty party in global warming is industrial man.

Copyright © 2005 The Economist Newspaper and The Economist Group. All
rights reserved.