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


Sunrise for renewable energy? Renewable energy may not appear to be competitive with oil and gas at the moment, but the gap is closing

Sunrise for renewable energy?
Dec 8th 2005
From The Economist print edition

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Energy: Renewable energy may not appear to be competitive with oil and gas at the moment, but the gap is closing

A SPECTACULAR sea snake has been spotted slithering around Scotland's northern waters. Though it is fiery red in colour, and some 100 metres in length, the writhing beastie has not sent the locals of Orkney running for the hills. That is because it is actually an innovative new device designed to produce electricity by capturing energy from the ocean's waves. Pelamis, manufactured by Ocean Power Delivery, a British firm, is at the vanguard of the next energy revolution. Or at least that is what proponents of renewable energy would have you believe. Orkney is home to the European Union's main marine-energy test centre, and local politicians and academics like to boast that Scotland, ideally suited to wave and wind-power projects, will become “the Saudi Arabia of renewable energy”.

If such claims sound a bit over the top, they are entirely in keeping with the euphoria now sweeping through the renewable-energy sector. Money is pouring in as venture-capital firms, including many not previously interested in renewable energy, throw money at renewables. BP and Royal Dutch/Shell, two oil giants, have big renewables divisions. GE has unveiled “Eco-magination”, an initiative focused on clean energy. High oil prices, environmental concerns, a desire for greater energy security and improved technologies “are combining to create the best investing environment ever for renewable power”, observed Terry Pratt, a credit analyst at Standard & Poor's, in a report published in October. The International Energy Agency (IEA), a quasi-governmental agency not known for excessive greenery, forecasts that over $1 trillion will be invested in non-hydro renewable technologies worldwide by 2030. By then, the IEA predicts, such technologies will triple their share of the world's power generation to 6%. In some regions, such as western Europe and California, the share could top 20%.

Yet such predictions are met with scepticism by those who remember what happened after the oil shocks of the 1970s. Back then, high oil prices and concerns over scarcity led many firms to bet heavily on alternative-energy technologies. Most of them lost those bets when oil and gas prices fell in the late 1980s. One of the biggest losers was Exxon. Its current boss, Lee Raymond, has vowed not to spend another penny of his shareholders' money on renewables, which he calls “a complete waste of money”.

The chief drawback of renewables is their cost compared with conventional energy sources. The cost of generating electricity from wind turbines is at least 5 cents per kilowatt hour (kWh), for example. Solar or wave power cost at least 18 or 20 cents per kWh. The cost of electricity from conventional sources, in contrast, is typically much lower—as little as 3 to 5 cents per kWh. Barring some dramatic breakthrough, renewable sources cannot, on the face of it, possibly compete.

Changing the rules

But look beyond the headline figures and a different picture emerges. Renewable energy has regulatory, commercial and technological trends on its side, all of which are working to close the cost gap with conventional sources. Taken together, they promise a far more sustainable, market-driven basis for investment in renewables than yesterday's faith in high oil prices—and suggest that renewable energy's cheerleaders could be on to something after all.

First, consider regulatory and policy trends. Critics have long complained that renewables have survived only because of government subsidies. They are right—but every form of energy is subsidised. America's huge Energy Act, signed into law by President Bush in August, hands most of its $80 billion or so of largesse not to wind or solar, but to well-entrenched industries such as oil, coal and nuclear. Germany and Spain handed out cash to their coal industries even as they subsidised windmills.

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Coming soon to a roof near you?

Yet many governments, striving to reduce carbon emissions, are now embracing policies that promise more enduring and politically palatable support for renewable energy than subsidies: “externalities” pricing. In some countries, especially in Europe, action has come in the form of direct taxes on carbon emissions—which, of course, greatly benefit renewable energy. Japan is phasing out its solar subsidies altogether next year. Tax is a four-letter word in America, so policymakers there have instead adopted a mix of regulations, rather than a carbon tax, to boost clean energy. These include such measures as tax credits and “renewable portfolio standards” that require a certain proportion of energy production within a particular state to come from renewables.

Second, these policy measures are being accompanied by the arrival of innovative business models built around renewables. A good example is Actus Lend Lease, an American firm, which is developing the world's largest solar-powered residential community in Hawaii to provide housing for American soldiers. “This is a business decision—there is no subsidy,” says Chris Sherwood of Actus. Lenders were worried about the volatility of electricity prices, since Hawaii generates most of its electricity by burning imported oil, and the community's residents will pay a fixed rent, including utility bills, that is set by the army and adjusted only once a year. A sudden spike in the electricity price might have meant that the firm running the project would have been unable to make its debt repayments. Solar panels, in contrast, produce electricity at a known price for the lifetime of the panels. Reducing the uncertainty over energy costs, says Mr Sherwood, made it possible for the developers to borrow more.

Similarly, Sun Edison, an American start-up backed by Goldman Sachs and BP, has devised a clever new business model that overcomes a number of the real-world obstacles that have hitherto stymied renewable-energy projects. Simply put, it offers big retailers (such as Whole Foods and Staples) long-term, fixed-price electricity contracts in return for being able to set up solar panels on their rooftops. The retailers benefit from stable power prices, but do not have to buy or run the panels themselves; Goldman Sachs, which finances the panels, benefits from the associated tax credits and other offsets; BP sells more solar panels; and solar power has a better chance of taking off. Meanwhile, other ventures are looking to wind energy for a hedge. Several firms are putting together hybrid financial products that combine the output of wind farms in America's mid-west with that of natural gas-fired plants—thus hedging the volatility of both.

“Pricing schemes that favour renewable energy are being made possible by ‘smart’ meters.”

Pricing schemes that favour renewable energy are also being made possible by the arrival of new technologies such as “smart” meters, which allow for hour-by-hour variation in power prices. These make it possible for utilities to charge much more for power during the sweltering midday peak than early in the morning or late at night. Since solar panels produce their greatest power output in the middle of the day—just when prices are at their peak under a variable-pricing regime—Tim Woodward of Nth Power, a venture-capital firm specialising in energy, thinks smart meters with this type of “time of use” or “critical peak” pricing will make solar power far more attractive. “We see a groundswell toward this,” he says. Several American states, led by California, are moving towards variable pricing, and the Energy Act encourages utilities to adopt it. Enel, Italy's national energy company, is rolling out smart meters to 30m customers across the country, and there are plans to make smart meters mandatory across the European Union, whenever a meter is installed or replaced.

Boxing clever

In the mean time, GridPoint, an American firm, is selling a “black box” at retailers such as Home Depot that its boss, Peter Corsell, claims will “solve the last-mile problem of the stupid grid”. Usually, solar panels need a complex tangle of wires, inverters, batteries and other equipment to be installed to make them work. His firm replaces that with a “plug and play” device that also provides backup power. It even uses predictive software and an internet connection to juggle weather forecasts and utility pricing plans to decide when to sell power back on to the grid.

All of this is making renewables more attractive, even without advances in the generating technologies themselves. But those technologies are not standing still either. Wind energy is now a commercially viable business, without subsidies, in a number of places around the world. (The crucial factor is the “wind potential” of the site; even the best sites for wind turbines produce power only 30-40% of the time, and the average across all of Germany's wind turbines, for example, is just 11%.) Of course, government helped the industry get to this point. Denmark, for example, is home to world-class turbine manufacturers, such as NEG Micron and Vestas, thanks to early state aid. And tax credits and other subsidies help wind operators in Germany and elsewhere.

The key to wind's success in becoming commercially viable has been technologies that have allowed turbine size to grow from an average of 10 metres in diameter in the mid-1970s to over 80 metres today. To build and run such monstrous turbines, companies have devised new composites for the blades, variable-pitch blades that catch the slightest of breezes, variable-speed drive motors and other advances. A doubling of wind speed means about an eight-fold gain in a windmill's energy output, so making windmills taller makes sense, as winds tend to be stronger and more stable higher off the ground. Of course, there are practical limits: make a turbine too big and you cannot deliver it to a field or a windy mountain-top. But offshore, where turbines can be moved by ship, that is not a constraint. Experts expect offshore wind to take off dramatically, especially in Europe, which has both plenty of wind and lots of protesters who object to land-based turbines. Robert Kleiburg of Shell muses that the industry may need to rethink turbine design for offshore environments, however.

The prospects are also good for improvements in solar power. Ever since Bell Labs patented its design for a photovoltaic cell in 1954, crystalline silicon—the same stuff that is used to make computer chips—has been the dominant technology for such cells, thanks to its high reliability and conversion efficiency (at least compared with rival technologies). Silicon-based systems typically convert about 15% of the sun's energy into useful electricity. That may seem low, but since the fuel is free, the efficiency of conversion matters less than the overall cost per kilowatt of power delivered.

Alas, silicon photovoltaic cells are now victims of their own success. The solar industry has sucked up so much crystalline silicon that there is a global shortage, and prices have shot up. But crisis breeds invention. “In the old days, we'd get the garbage after the IT industry got the good stuff,” says Rhone Resch of America's Solar Industries Association. But now half a dozen silicon-wafer plants are going up around the world dedicated solely to providing silicon for solar energy. “This is a watershed for the silicon industry,” says Christopher O'Brien of Sharp Solar.

One firm hoping to capitalise on the silicon shortage is Evergreen Solar. It uses conventional crystalline silicon, but in an unusually frugal fashion. From crucibles of molten silicon, ribbons of the stuff are continuously pulled out. This “string-pulling” uses 30% less silicon than the usual sawing-and-etching method does, with further improvements in sight. But others are betting on a rival technology: thin films. Rather than etch wafers, various firms are creating solar panels on rolls of stainless steel (ECD Ovonics), plate glass (GE's Astropower division), and other materials amenable to continuous manufacturing processes. That means costs can be greatly reduced once full-scale plants are built and perfected, which would compensate for thin films' lower conversion efficiency.

“I'm betting against silicon,” says Arno Penzias, a Nobel-winning scientist who is now with NEA, a venture-capital firm. Instead, he favours a flavour of thin-film solar technology known as “CIGS”—a sandwich of thin layers of copper, indium and gallium selenide pioneered at America's National Renewable Energy Laboratory (NREL). His firm invests in HelioVolt, which is trying to commercialise this technology; the firm claims that it can already achieve efficiencies close to those of silicon in the laboratory but using just one-hundredth the material. Billy Stanbery, HelioVolt's boss, thinks this technology could allow solar panels to be built into roofing materials, rather than installed on top. Shell's solar division, which is developing a thin film similar to CIGS, thinks it could reduce the cost of solar panels by more than 50% by 2012.

“Talisman, an oil company, has decided to put up two windmills on top of one of its gas platforms.”

Another promising, but tricky, approach is organic solar panels. Konarka, whose founder won a Nobel prize for pioneering organic solar cells, is leading the charge in this area—but even one insider admits that commercialisation of its optical organic PV cells “is a long way off”. Other researchers are applying nanotechnology and molecular chemistry to solar power, with the aim of mimicking photosynthesis. Most pundits think that is a long way off too. But a paper published by a team from the NREL in May raises a tantalising possibility: it found that tiny nanocrystals known as “quantum dots” could, in theory, make possible solar cells with around 70% efficiency. So the future for solar power could be bright indeed.

Follow the money

But what is most striking is that figures compiled by Shell Renewables in April 2004, when the oil price stood at $40 a barrel—it is currently closer to $60—found that wind turbines and solar panels could close the cost gap with conventional energy sources. Provided they are large enough and are sited in suitable locations, the most efficient modern wind turbines can produce electricity at a wholesale price (the price at which electricity producers buy and sell power on the grid) competitive with non-renewable sources.

Solar panels cannot produce power at such low cost, but comparing their cost-per-kWh with wholesale prices is arguably not the most relevant comparison. That is because in general, solar panels are used not by electricity producers selling power to the grid at wholesale prices, but by consumers who use solar power to supplement or replace power bought from utility companies at retail prices (typically 8 to 20 cents per kWh). So solar power need only match these higher retail prices in order for homeowners and businesses to start to consider it as a viable alternative. And it turns out that the most efficient of today's solar panels do indeed match the retail price of electricity in some parts of the world with high retail prices, such as Japan (which is now phasing out its solar subsidies).

Renewables' growing competitiveness is not, in short, simply the result of sky-high oil prices. And that explains why Wall Street is at last getting interested. Not long ago, America's renewable-energy industry held a finance conference in New York at the Waldorf Astoria hotel. Brian Daly, a financier with the Trust Company of the West, stood up to make a presentation in the bejewelled grand ballroom. He observed: “When I made my first presentations in this industry, there were ten guys with ponytails and I had to flip charts myself.” Now, he observed, the Waldorf ballroom was packed with besuited bankers—and his slides appeared on a high-tech screen.

If you still need persuading that something big and exciting is happening in renewable energy, head back to the frothy waters of the North Sea off Scotland. There, you will find the energy equivalent of beating swords into ploughshares: the planting of windmills on oil platforms. Talisman, an independent oil company, has decided to put up two windmills on top of one of its gas platforms. Building stable platforms accounts for around a third of the cost of offshore wind farms. But the oil and gas industry in the North Sea, now in decline, has plenty of platforms sitting around.

A Talisman official explains that, for the moment, the energy will be used only to power the platform's operations, but in future it may serve as a generating station, and send power ashore. “This will be the greenest platform in the world,” he says. If even hardened oilmen can look to the winds for inspiration, perhaps the time really has come for renewable energy after all.

CSR standards - ISO's spicy-sour dish: ISO 26000 will be launched in 2008

CSR standards - ISO's spicy-sour dish
James Rose, Asia-Pacific Editor
5 Dec 05

Box ticking is a danger
Box ticking is a danger

The International Organization for Standardization's latest talkfest in Bangkok made progress on the proposed corporate responsibility standard. It may generate the debate we all need to have
If eating out in Thailand, one is bound to come across a dish called Tom Yum Koong or spicy-sour soup. It’s a tasty hotchpotch of flavours and aromas; more or less different each time you try it, depending on the mix.

For delegates attending the International Organization for Standardization’s latest networking circus in Bangkok, it might have been an appropriate dish. As the complexities surrounding the organisation’s efforts to establish a corporate responsibility standard converge, the work ahead looks daunting. Managers awaiting an outcome need not expect anything solid soon, but perhaps that is not the point.

The Bangkok gathering was the second meeting of the Social Responsibility Working Group, mandated to lead the Geneva-based ISO towards its new corporate responsibility standard, ISO 26000. Some 400 attendees landed in the Thai capital to go over a range of important matters and, despite early signs that the question “what is the point of doing this?” might become something of a distraction at the event, more bolts were sunk and nuts turned than some thought possible.

Perhaps most significantly at this early stage was the confirmation that ISO 26000 will be launched in 2008.

According to consultant and sometime Ethical Corporation contributor Paul Hohnen, the meeting was a breakthrough. In Bangkok for the get-together, he wrote in October he was pleasantly surprised that the meeting made some “small steps” in the right direction.

But Hohnen and others have expressed concern that there is scant vision driving this process and feel that ISO 26000 will be damaged by too many voices talking in a vacuum left by ISO’s inability to lead. A Tom Yum Koong, in other words, that tastes uncharacteristically bland and watery as a result of too many ingredients.

14001 + 2008 = 26000?

ISO has had its shins bumped by such criticisms before. Its environmental management system ISO 14001, established in 1996, has been called “greenwash” by more than one conservationist in the past ten years. Ecologia, a coalition of US ecologists, for instance, claims 14001 does little more than pay lip service to environmental sustainability.

"The ambiguities in ISO 14001 make it possible for companies to use ISO 14001 certification to 'greenwash' corporate activities," a briefing paper on its website argues. "They can hold up their certification as evidence that they are 'good actors' in the environmental realm, when in fact certification does not directly reflect a company’s environmental performance."

Might NGOs and others justifiably attack ISO's 26000 process with the same concerns? That would have to be a strong possibility. This is especially so when it is recalled that the 14001 standard is certifiable under ISO strictures. This means it has the backing of a process of quantifiable data measurements, which become the bottom line for businesses in achieving certification and the well-known ISO tick of approval. The ISO 26000 corporate responsibility format will be a guidance standard and not a certificate-based programme.

It looks like a lot of work in that case for what may be a minor blip on the corporate social responsibility radar.

Talking shop

But that may be unfair. The discussion process is undeniably massive, bringing in enough current views and agendas on the shape and format of corporate responsibility to be considered a true cross-section of the contemporary milieu. Each of these meetings (the next will be in Portugal in mid-2006) attracts representatives from many countries' business, civil, and government sectors. In Bangkok, there was input from 54 ISO member countries and 24 associated international organisations such as the International Labour Organisation.

Among the basics of corporate responsibility this stellar group of experts will attempt to break down are the standard’s scope, normative references, terms and definitions, the social responsibility context in which all organisations operate, social responsibility principles relevant to organisations, guidance on core social responsibility subjects/issues and guidance for organisations on implementing social responsibility.

While there are dangers that this broad brief may become messy and will need constant monitoring, it may have the benefit of becoming a real focal point for discussion on the next phase of corporate social responsibility. This more fruitful outcome appears to have been the result of Bangkok.

While some may be disappointed that ISO 26000 will not carry its own ISO certificate, the ultimate value of the organisation’s involvement in setting a corporate responsibility standard may be in the process itself, not so much in the end product. It's early days yet and there is a lot of politicking to be done to ensure that can indeed be achieved. ISO may be in for its bumpiest ride yet. What’s Portugal’s version of Tom Yum Koong?

In the light of this, those with a stake in the ISO 26000 process might avail themselves of the opportunity to have a say. But, this depends to some extent on each of the ISO's many member organisations having the wherewithal to process such inputs from concerned groups and players in the corporate responsibility field. As we have noted elsewhere in this issue, that cannot be taken for granted.

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Asia's environment: Green schemes

Asia's environment: Green schemes
James Rose, Asia-Pacific Editor
30 Nov 05

Private enterprise, street style
Private enterprise, street style

A report from the Asian Development Bank argues for an increase in the private sector's role in environmental management in the Asia-Pacific region
Only a few years ago, delegates to the Manila-based Asian Development Bank’s annual general meeting were ducking into the conference hall under a hail of abuse from activist groups.

Then claims were that the bank, set up in 1966 as a channel through which to fund poverty-reduction projects, was only interested in opening up opportunities for big business, while tramping on the rights of local communities.

The ADB’s Asian Environment Outlook 2005 report looks like an attempt to be both a response to critics and an invitation for the developed economies to clean up, literally and figuratively.

The document builds on a 2001 report indicating structural weaknesses in regional governments, which exacerbated environmental problems as economic growth continued apace.

But, while working with governments remains an important pillar in building sustainable development platforms, the report says there is still “a missing ingredient … that of a fully engaged corporate sector, committed environmentally sound and sustainable production and consumption”.

As a result of this gap, the report claims that no country in the region can truthfully assert it is creating a sustainable development pathway for the future. This is a dangerous situation: in 2003, consumption in China alone sucked up half the world’s cement production, a third of its steel, a quarter of its copper and a fifth of its aluminium.

About a third of the world’s cigarettes, a fifth of its mobile phones and a quarter of its televisions were bought in China.

Without firm sustainability foundations, this kind of consumption and, more commonly, local production to meet the demand, is tantamount to putting regional eco-systems in front of so many firing squads.

The rewards for corporations in addressing this are potentially lucrative. The Asian environmental goods and services market (excluding Japan, Australia and New Zealand) is projected to triple to $116 billion by 2015, says the ADB.

Stating the obvious

But doesn’t the private sector itself contribute to the environmental damage arising from this economic activity? To put it another way, isn’t corporate engagement in sustainable development a bit self-evident?

Richard Welford, writing for the Hong Kong-based CSR Asia newsletter, thinks so. “The weakness of the new ADB report is that is does not really advocate anything that is new,” he writes. The report “still does not tackle the issue as to why, even after more than a decade discussing [environmental management tools], it is still a significant minority of businesses that are really taking meaningful action in implementing them”.

In some ways, the ADB is in a bind. It receives its funding, in the main, from offering bonds in global capital markets, along with member subscriptions and retained earnings. ADB bonds are effectively backed by the bank’s 64 member countries, and so their influence is likely to be significant in any directions the bank takes in funding regional development.

Developed economies in Europe, Asia and the North America hold the majority of the ADB’s shareholder power. Twenty-three developed economies (five from Asia, 16 from Europe and two from North America) control almost 59% of the vote. This is despite the fact that they constitute just 36% of the total number of member countries.

It is difficult for the bank to take pot-shots at the actions of big corporations in the region – corporations that have been almost exclusively, until recently, from developed economies – or to push those corporations to take environmental management more seriously, if those countries don’t want it to.

Hence the absence of a plan and the concomitant allure of financial rewards.

Hope amid the ruins

The inability to proffer a firm way forward is a disappointing flaw in the ADB report. So is the somewhat misplaced confidence that the region’s environmental standards will improve with the seemingly inevitable rise of an effective civil society.

Currently, many Asian governments are actively discouraging such a development, and some even look to be aided by major foreign corporations, as has been seen in China in relation to internet censorship.

But one shibboleth is thankfully put to rest. The ADB rejects the belief that developing economies can dispense with environmental and social considerations until such time as a large enough middle class reverses shifts the society to a more pro-environment position.

If the “grow now, clean up later” thesis was applied in the region “the environmental quality prognosis would be dire”, say the report’s authors.

In fact, the ADB argues, developing societies are more likely to become more environmentally conscious during the move towards a large middle class, not after. The bank claims that pollution intensity decreases by 90% as per capita incomes rise from $500 to $20,000 a year.

That presents a pillar of hope for Asia. With many of its major economies in just that phase of development, including India and China, the burgeoning middle classes may yet engender real change. This underlines the vital importance of democracy and equity in those societies.

Reading between the lines, the report’s authors may well be hoping to encourage these agendas in tandem with business development. For the ADB, that would be a worthy investment indeed.

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WTO faces tough talking in Hong Kong

WTO faces tough talking in Hong Kong

AFP, 8 December 2005 - The World Trade Organisation (WTO) meets here next week to salvage a deal to liberalise global trade blocked by an EU and US impasse on cutting massive farm subsides that critics say hurt the poor most.

Preparatory talks have produced only a series of 'you first' trade offers and no basis for an overall deal whereby the developed world would open its agriculture markets in return for free access in the developing world for its industrial goods and services.

The main protagonists -- the European Union and the United States along with India, Brazil and Japan -- have accordingly downgraded expectations, saying the Hong Kong meeting should keep the Doha Round on course while
leaving a final accord for next year.

At the same time, nearly all parties agree on the need to agree on at least something, most likely measures to achieve development goals such as poverty reduction which would be relatively uncontroversial.

That would avoid a repeat of the Cancun, Mexico debacle in 2003, when the Doha Round negotiations nearly ran into the sands, and ensure some momentum for the further talks in 2006, when an accord must be reached.

Meeting at the weekend, the Group of Seven industrialised countries called for significant progress on "reducing trade-distorting domestic support (and) ... eliminating all forms of export subsidies in agriculture."

Additionally, and perhaps more realistically, the "opportunity must be seized to make progress through agreeing a comprehensive development package that addresses the concerns of developing countries," a G7 statement said.

The stakes are high by any count, with the World Bank estimating that a Doha accord could boost the global economy by some 300 billion dollars annually through an expansion in trade which it is argued will benefit all. That is the theory, but the devil is in the details as broad statements of support for the process soon get bogged down in the more mundane but difficult question of who gets what and when?

Washington is the main exponent of the unqualified free trade agenda, in keeping with its own experience and ideology.

"The United States will continue to push for substantial improvements in market access in agriculture, manufacturing and services because this will generate the most benefits for development, including poverty reduction," US Trade Representative Rob Portman said after the G7 meeting. The Doha Round "can generate global growth and reduce poverty but only if we achieve a high level of ambition in all areas of the negotiation," he added.

For its part, France, pilloried as a champion of farm protection at the expense of a possible agreement, says an accord on agriculture tariffs may not necessarily help the poorest nations, its supposed aim, but instead benefit those developing countries that already have strong farm sectors.

"Those who claim that cutting customs tariffs will spur export growth in the less-developed countries are wrong," French Foreign Minister Philippe Douste-Blazy wrote earlier this week.

"If the markets for farm produce are opened up unchecked, the farmers of countries like Brazil and Argentina will benefit."

Rejecting charges that France was preventing a deal, Douste-Blazy argued instead that "a sudden lowering of European barriers will put paid to the possibility of self-sufficiency for the poorest countries."

Then there is the temptation that in the absence of a global accord, many countries will opt for bilateral Free Trade Agreements (FTA), in effect bypassing the multilateral trade system, a process already underway in Asia.

The unenviable task of holding the ring while the heavyweights slug it out and the smaller parties try to keep out of harm's way falls to Hong Kong industry chief John Tsang.

Tsang, mindful that all eyes will be on Hong Kong, hopes the 148 WTO members will at least agree to a deal for poor countries if a wider trade accord is unlikely.

"I want to push forward a development package comprising issues that are close to fruition -- put it out before waiting for the end of the round to create an environment of comfort for everyone," Tsang told AFP recently. "This is after all a development round and if we aren't able to do something significant in development it really becomes meaningless," he said.

Don't despair: Most of the news on the climate change front is bad, but not all of it

Don't despair

Dec 8th 2005
From The Economist print edition

Most of the news on the climate change front is bad, but not all of it

IT SEEMS a shame for the blameless Japanese city of Kyoto that its name should forever be associated with failure. Still, it's stuck with it, for that's how the global agreement on cutting carbon emissions that was agreed on in the city in 1997 has come to be regarded. It's a shame, too, that this flawed treaty should cast a pall over the effort to get a global agreement on climate change. For, through the gloom, there are some encouraging developments.

Kyoto's failure is hardly surprising. Agreeing on how to control carbon emissions is even harder than agreeing on how to promote free trade. Both issues require lots of countries to make political sacrifices to achieve a collective good; but at least in the case of free trade, the benefits accrue swiftly. The costs of cutting carbon emissions, by contrast, pile up in the short term, while the benefits are far-off and uncertain.


Given those difficulties, the fact that Kyoto was signed at all looks like an achievement. So is the fact that it established the right goal—binding targets for cuts in greenhouse gas emissions—and got 150 countries to sign up. The International Energy Agency reckons that the industrialised signatories look like hitting their target of cutting their greenhouse gas emissions to 5% below their 1990 level by 2012. But the holes in the treaty are so huge—America didn't sign up, and developing countries do not have targets—that even with Kyoto in place, at their current rate of increase, global emissions look like increasing by 50% between now and 2030.

In consequence, the global environment ministers' meeting in Montreal this week to discuss better ways of implementing Kyoto was a rather cheerless affair. As The Economist went to press, there was some discussion of whether America would deliver a last-minute concession; but nobody expected much of real substance to come out of the meeting. However, while Kyoto is stuck, the world is moving on.

First the bad news

In the seven years between Kyoto's signing and its implementation earlier this year, much has changed. The news from the scientists is mostly bad (see article). The news from business and from politics, though, is more ambiguous. Business, which was once solidly against controlling carbon emissions, is now divided. In June, the chief executives of two dozen multinational firms, including American companies such as Ford and Hewlett-Packard, met Tony Blair to argue for the G8 rich-country group to adopt a global carbon-trading system.

Business's growing interest in greenery is partly public relations, but there's solider economic self-interest involved, too. Companies are investing in renewables because the gap in cost between them—solar and wind power in particular—and conventional energy sources is shrinking (see article). And it's not just small companies run by idealistic greenies that are betting on environmentally-friendly technology. GE, the world's largest energy-equipment supplier, is convinced that there's money to be made from technologies such as clean coal (see article).

The more companies such as GE invest in green technology, the greater the chances that their customers, such as electricity utilities, will buy the stuff and thus cut their emissions. But the two main determinants of whether or not this will happen are oil prices and governments.

Don't rely on the oil price

High oil prices are certainly doing their bit for greenery now, but they cannot be relied on to constrain hydrocarbon consumption. Although they are partly the result of higher demand, especially from China, other factors influence them too. An increase in supply, for instance, as a result of new investment and new finds, could push prices down again. So, for that matter, could peace in Iraq, believe it or not.

What companies like GE are betting on, therefore, is that big-country governments will accept the need for a workable system of global targets for cutting emissions. Any such system must do two things. It must include America, China and India, and it must have the flexibility and efficiency that only a market-based system can provide.

America's government must take much of the blame for blocking global action so far. But Europe's governments have also been at fault. They originally opposed the market-based carbon trading system that America wanted. But things have changed on both sides of the Atlantic.

European governments soon realised that the command-and-control system of emissions targets they planned would impose insupportable costs on business, and that they would have to use market mechanisms to ensure flexibility and efficiency and thus keep costs down. The result was the launch of a pioneering pan-European carbon trading system this year.

In America, meanwhile, George Bush shows no sign of tempering his opposition to targets, and the federal government's attitude is what matters most. But at lower levels of government, there's some movement. Over a hundred cities and around two dozen states (including New York and California, which both have Republican governors) now have some form of curb on greenhouse gases, and a group of north-eastern states is due to launch a carbon-trading system next week. Several dozen of the country's leading industrial firms, now including GE, have taken voluntary steps to curb emissions.

There are grassroots forces pushing for change as well. A noisy movement among evangelical Christians, led by Billy Graham, argues that God has given man “stewardship” of the Earth; and thus it is man's responsibility to act on climate change. Mammon is upset too: insurers are pushing for change and a growing chorus of American pension funds and other investment managers see climate as a potentially huge undisclosed risk to their investments.

Most importantly, voters seem to be changing their minds. Opinion polls show that more than half of Americans believe climate change to be a real problem, and over a third believe (rightly or wrongly, it is too early to tell) that it was a major factor behind the recent deadly hurricanes in the Gulf of Mexico. Four years ago, half of Americans thought Mr Bush was doing a good job on the environment and just over a third thought he was doing a poor job. Now the position is reversed.

China's government is not as susceptible to opinion-poll shifts as America's, and its people are likely to be preoccupied with more pressing economic concerns than with distant questions of climate change. Yet even in China there are signs of real concern. The country has just enacted tougher fuel-economy laws than America's, its current five-year plan calls for more investment in fuel efficiency and it is planning to build 30 nuclear-power stations over the next two decades. China seems willing to talk about post-Kyoto commitments; India, by contrast, insists that America must move first.

These shifts do not amount to an earthquake in global politics. Attempts to get agreement on whatever replaces Kyoto will face the same fundamental difficulty as Kyoto did: how to get the world's biggest polluters to sign up to a deal that will require them to agree to bear short-term costs in return for uncertain long-term benefits which will accrue only if other big polluters do their bit. Yet to dwell on the gloom that the difficult Kyoto process cast over the world would be to ignore the real signs that things are changing.


Corporate Renewable Energy Group Hits 360 Megawatt Mark, Welcomes European Members

Corporate Renewable Energy Group Hits 360 Megawatt Mark, Welcomes European Members

MONTREAL, Canada, Dec. 2, 2005 - Some of the largest companies in the world have announced that they have increased their purchases of renewable energy.

The World Resources Institute (WRI) and members of its
Green Power Market Development Group have announced 185 new megawatts (MW) of renewable energy purchases and projects, bringing the total number of MW under contract to 360 -- the average size of a coal-fired power plant. At 360 MW, these companies are more than a third of the way to their goal of building markets for 1000 MW of new, cost-competitive green power in the United States.

At a recent press conference as part of the United Nations' climate change meetings, WRI also announced the launch of a similar corporate renewable energy purchasing partnership in Europe.

The Green Power Market Development Group is a commercial and industrial partnership dedicated to building corporate markets for green power. In the United States its members are Alcoa Inc., The Dow Chemical Company, DuPont, FedEx Kinko's, General Motors, IBM, Interface, Johnson & Johnson, NatureWorks LLC, Pitney Bowes, Staples and Starbucks.

"These companies are using clean energy to produce the products and services people use every day. They are demonstrating that low carbon technologies can be part of mainstream corporate energy purchases," said Jonathan Lash, president of WRI.

In fact, seven of these companies now purchase at least 10 percent of their annual U.S. electricity consumption from renewables. Group members also are among the largest non-utility buyers of renewable energy in the United States. Johnson & Johnson is currently the country's largest corporate buyer of green power products. Johnson & Johnson and General Motors are the nation's second and third largest corporate users of solar photovoltaic systems. GM and DuPont are the country's two largest corporate users of landfill gas for thermal energy while Starbucks, IBM and Johnson & Johnson are the three largest corporate buyers of renewable energy certificates (RECs) from wind farms. RECs are purchased separately from electricity and allow buyers to support renewable power facilities without being located near the site where the electricity is fed into the wires.

"Over the past five years, this partnership has helped IBM develop its approach to renewable energy," said Greg Peterson, manager of global energy for IBM. "IBM now uses renewables to stabilize energy costs and reduce greenhouse gas emissions."

Projects and purchases in 2005 are taking place at more than 140 facilities across 15 states:

  • Alcoa is installing 42 MW of new capacity at its Tapoco hydroelectric facility in eastern Tennessee. The entire facility was just certified as low-impact by the Low Impact Hydropower Institute (LIHI), making it the largest LIHI-approved hydroelectric project on the East coast.
  • Starbucks Coffee Company is purchasing 150 million kWh per year of Green-e certified wind RECs -- equivalent to 20 percent of the annual electricity consumed by its U.S. company stores.
  • IBM will be buying 96 million kWh per year of Green-e certified wind RECs for its U.S. facilities. This will be the fourth largest corporate purchase of certified RECs in the United States.
  • NatureWorks, LLC has contracted for 59 million kWh per year of Green-e certified wind RECs from the Great Plains, making NatureWorks PLA the first greenhouse gas-neutral polymer.
  • DuPont, General Motors, IBM, Johnson & Johnson and Staples are installing 2.2 MW of on-site solar photovoltaic systems to provide electricity for corporate facilities.
  • FedEx Kinko's, Interface and Pitney Bowes committed to 7 MW of new renewable power and REC purchases.
Lash added, "These firms are joined today in Europe by an expanded set of companies that will explore new renewable projects that complement progressive EU policies on renewables. Climate change is a global issue, and these leaders demonstrate that their companies can look across borders to find alternative green energy solutions to fit their local circumstances."

Four European companies -- British Telecom, Holcim, IKEA and Tetra Pak -- join the European businesses of The Dow Chemical Company, DuPont, General Motors, Interface Europe, Johnson & Johnson, Nike (CSC) and Staples to form the Green Power Market Development Group Europe. This new effort will explore opportunities to install renewable energy generation systems such as solar, wind, and biomass at their facilities in Europe and to purchase green electricity from their utilities.

"As one of the world's largest cement manufacturers, we are exploring ways to reduce our climate impact. Through this initiative, we hope to find further opportunities to diversify our corporate energy use with renewable resources," said Gerard Bos, vice president of procurement for Europe, the Middle East, and Africa at Zurich-based Holcim.

The European partners will evaluate and deploy a variety of renewable energy technologies and engage the marketplace to take green power to scale. Collaborating with WRI on this effort is The Climate Group, an international non-profit organization dedicated to building coalitions of businesses as well as city, state and national governments to address climate change.

Traditionally Energy-Savvy, Japanese Business Turns Attention to Global Warming

Climate Wise
by Junko Edahiro
December 2005

Traditionally Energy-Savvy, Japanese Business Turns Attention to Global Warming
Junko Edahiro

Since they experienced two oil crises in the 1970s, Japanese firms, especially manufacturers, have made enormous efforts to save energy. As the result, primary energy consumption per unit of gross domestic product has been reduced, and the country now a world leader in energy efficiency. This spirit has been passed to modern businesses in their efforts to curb global warming, and positive results have emerged.

Under the Kyoto Protocol, which entered into force in February 2005, Japan is required to achieve its target of a 6% reduction in greenhouse gas (GHG) emissions. Japan's GHG emissions in the base year 1990 were 1,237 million tons of carbon dioxide (CO2) equivalent, which needs to be reduced to 1,163 million tons per year during the first commitment period (2008-2012) in order to achieve the targeted 6% reduction. However, since the amount of emissions in 2003 was 1,337 million tons, 8.3% higher than in the base year, a 14.3% reduction is actually needed to reach the target.

Let's take a look at some anti-global warming initiatives taken by Japanese companies.

  • Fuji Xerox Co. Ltd., which had emitted a total of 145,000 tons (CO2 equivalent) of GHG gases in fiscal 1990 at its domestic factories, reduced its GHG emissions to 111,000 tons (23% reduction from 1990) in fiscal 2003. Furthermore in April 2005, it eliminated all GHGs except CO2 from the production processes at its Japanese factories, including those of affiliated companies.
  • Toshiba Group has been carrying out various projects aimed at achieving, by fiscal 2010, a 25% reduction of energy-originated CO2 emissions per nominal production volume, as compared to fiscal 1990. The group aims to reduce annual CO2 emissions by about 500,000 tons, equivalent to 25% of its estimated emissions in fiscal 2010.

    Not only striving to reduce GHG emissions from its own companies and plants, Toshiba also focuses on the development of energy-efficient products to reduce CO2 emissions. (Electricity used for refrigerators typically accounts for about 20% of total electricity consumption at home. As their energy efficiency has improved in the last several years through the initiatives of manufacturing companies, many types of refrigerators consume only one-third to one-sixth the amount of electricity compared to those of ten years ago.)
  • Regarding the dishwasher/dryer, which recently has become common in Japanese homes, Hitachi Home & Life Solutions, Inc. released the industry's first dishwasher/dryer that uses what it calls "nano-steam" technology. Compared to washing by hand, the appliance uses less electricity, gas or water, resulting in a reduction of CO2 emissions by 65% per year (equivalent to washing 60 dishes, or dishes for seven people).
  • Fuel cell cogeneration systems, which provide both electricity and hot water to homes, have been developed and installed in growing numbers. In 2005 Tokyo Gas, among other companies, started to install these systems in households and to collect operational data necessary for subsequent large-scale implementation.
  • Aiming to promote appliances that help reduce CO2 emissions, the Development Bank of Japan, in collaboration with power companies, launched a new loan program in April 2005 to facilitate the leasing of energy-efficient home appliances, water heaters and automobiles. This is because it is important not only to develop such energy-efficient appliances, but also to offer programs and systems to promote their adoption, if we are to reduce the environmental impacts of society as a whole.
  • In January 2005, the Tokyo Metropolitan Government (TMG) revised its Municipal Environment Protection Ordinance and mandated large businesses to establish their own CO2 reduction targets. The TMG has also decided to promote several projects in collaboration with corporations, including a cooperative delivery system where supplies are delivered by consolidated delivery agents to multiple department stores in Tokyo. When all of the 15 Tokyo-area companies (with 30 stores) belonging to the Kanto Department Stores Association participate in this project, in fiscal year 2005 the number of delivery vehicles on the road will be reduced by up to 50%, easing traffic congestion and reducing CO2 emissions by 4,000 tons per annum.
  • Yamaha Motor Co., the Japanese motorcycle manufacturer, introduced an "Eco-Commuting" system for its employees in December 2004. This was preceded by several years of Yamaha's involvement in an ecological accounting bookkeeping campaign, which revealed that huge fuel costs were being paid by its employees for commuting. In January 2005, the company began issuing a monthly allowance of 1,000 yen (about U.S.$9.71) to employees who walk and/or ride a bicycle more than two kilometers to commute to work. An allowance was also instituted for employees who use public transport "Park & Ride" services. The frequency of company commuter bus services was also increased. Introduction of the new system has encouraged 60 more commuters to walk part of the way to work, and the new allowances apparently led to this favorable reception.
This article has described how environmental activities of companies are facilitated by their own initiatives as well as municipalities' policies. It should be noted, however, that the emissions cut by over 14%, needed for Japan to meet its Kyoto commitments, would require a major shift in taxation and other institutions, including the introduction of a carbon tax and the compulsory purchase of power from renewable sources.

This column has been excerpted from an article published by
Japan for Sustainability in the organization's November 2005 newsletter. The article was written in collaboration with Japan for Sustainability staff writer Kiyoshi Koshiba.

Institutional Investors to Insurance Industry: Act Now on Climate Change

Institutional Investors to Insurance Industry: Act Now on Climate Change

NEW YORK, Dec. 5, 2005 - Citing the enormous risks that insurance companies face from escalating losses caused by extreme weather events and the financial risks and opportunities associated with climate change, 20 leading U.S. investors urged 30 of the largest publicly-held insurance companies in North America to disclose their financial exposure from climate change and steps they are taking to reduce those financial impacts.

The investors, who collectively control more than $800 billion in assets, co-signed letters sent today requesting that the climate risk reports be completed and shared with investors by August 2006. The reports should address the multiple types of risk and opportunity that insurers face in regard to climate change, including physical loss, legal and investment risks, as well as opportunities for new markets and products in a changing economic environment.

The investor request comes on the heels of devastating back-to-back hurricane seasons in the U.S. that caused a record $30 billion in insured losses in 2004 and as much as $60 billion in insured losses from Hurricane Katrina alone in 2005. While no individual weather event can ever be attributed to global warming, scientific data indicate that rising global temperatures will likely increase the frequency and intensity of hurricanes, floods, drought, wildfires, and other extreme weather events.

According to a recent study by the Ceres investor coalition, U.S. insurers have seen a 15-fold increase in insured losses from catastrophic weather events in the past three decades -- increases that have far out-stripped growth in premiums, population and inflation over the same time period. The study, Availability and Affordability of Insurance Under Climate Change: A Growing Challenge for the U.S., warns of larger financial losses in the years ahead if climate change trends continue and no actions are taken to face the challenge.

"While more insurance companies are acknowledging the seriousness of climate change, few if any companies have examined the broad financial risks and opportunities from this issue and the potential impacts on shareholder value," said the 20 investors, in the two-page letter to insurance company CEOs. "The challenge now is taking concrete action. We are calling on insurers to undertake a comprehensive analysis of the business implications of climate change for their companies and to share the results with shareholders."

The letter was sent by state treasurers and controllers from California, Connecticut, Kentucky, Maryland, New York, North Carolina, Oregon, and Vermont, as well as two of nation's largest public pension funds, CalPERS and CalSTRS. the New York City Comptroller, the Illinois State Board of Investment, socially responsible investment funds, faith-based investors, labor pension funds, and a leading foundation. All of the investors are part of the Investor Network on Climate Risk (INCR), a leading U.S.-based investor coalition working on climate risk issues.

In addition to the risk of direct losses due to physical weather-related events, the letter asks insurers to look strategically at climate change and how it could affect the long-term value of the investments that enable them to pay claims and remain profitable.

The letter to insurers follows an historic meeting of industry leaders a month ago in Hartford, Conn. More than 100 insurance and investor leaders attended the "Insurance Summit on Climate Risk and Opportunities" hosted by Connecticut State Treasurer Denise L. Nappier, Insurance Commissioner Susan Cogswell and Department of Environmental Protection Commissioner Gina McCarthy. The summit was the first time U.S. insurers have gathered in a public forum to discuss the risks and opportunities presented by climate change.

The National Association of Insurance Commissioners also held an extensive panel discussion on the climate change issue at its winter meeting Dec. 3 in Chicago. The climate change panel was originally planned for NAIC's fall meeting in New Orleans, but was postponed due to Hurricane Katrina.

“Insurers could face a double whammy or a one-two punch from climate change. In addition to driving up claims, it can affect the value of the stocks and bonds in insurers' investment portfolios,” said Connecticut Treasurer Nappier, whose $21 billion pension fund has more than $500 million invested in property-casualty and reinsurance stocks.

Still, as the letter notes, none of the country’s largest insurance companies have undertaken a comprehensive evaluation of the issue. Last fall, for example, New York City Comptroller William C. Thompson Jr. surveyed 13 insurance companies that the city’s pension funds were invested in to better assess how the companies were addressing climate change. According to survey results announced by Thompson’s office today, eight of the companies responded, and not one provided any assurance that climate change was seriously being assessed or considered.

In announcing his support of the letter, Comptroller Thompson said: “As the investment officer of the city’s five pension funds, I am particularly concerned that the failure of these companies to fully consider potential climate change risks in their underwriting process could adversely affect the financial performance of these companies and the pension funds’ investment interests.”

“Investors are increasingly more concerned about the financial risks posed by climate change and our interest is especially strong for the insurance industry which is so directly exposed to the physical impacts of global warming,” said Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System (CalSTRS), one of the country’s largest public pension funds.

"Any insurance company that is not focusing on climate change and related possible damage is not being realistic in looking at their future profitability,” said North Carolina State Treasurer Richard Moore. “As an investor, a lack of disclosure always troubles me.”

“Hurricane Katrina reminded all Americans of the destructive power of natural disasters,” said California State Treasurer Phil Angelides, a board member at the California Public Employees' Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS), the nation’s largest and third largest public pension funds with over $300 billion in assets. “Insurance companies simply can’t afford to ignore climate change. As shareholders, we must hold the companies we own accountable and demand they adopt strategies that will enable them to survive in a changing world.”

Copies of the letter and the insurance report are available on the Ceres
Web site.

Ethical tack pays off for Gildan

Ethical tack pays off for Gildan
961 words
7 December 2005
The Globe and Mail
All material copyright Bell Globemedia Publishing Inc. or its licensors. All rights reserved.

MONTREAL -- Undergrad jocks and co-eds in sweats might not be the most fashion-forward specimens you'll find on the average university campus, but they are possibly the most powerful.

No one knows how big the market for T-shirts and sweats bearing college and university insignia really is, given the countless licensing agreements and middlemen that rule the business. But it's certainly important enough for Gildan Activewear to know it can't afford to get on the co-eds' bad side.

So, when the Worker Rights Consortium (WRC) — a New York-based anti-sweatshop group that represents 147 U.S. and Canadian colleges and universities — last year issued a report denouncing alleged labour rights abuses at one of Gildan's T-shirt sewing facilities in Honduras, the Montreal-based manufacturer changed tack. After years of stonewalling other anti-sweatshop groups voicing similar complaints, Gildan decided to fess up to its failures. The world's biggest manufacturer of blank T-shirts — it makes more than 400 million of them a year — has even won grudging respect from many of its onetime foes.

Gildan's change in attitude represents a case study in how the corporate social responsibility movement is transforming business. It's no longer good enough to obey a country's laws; companies must prove by their behaviour that they are purer than the plain white cotton tees that are Gildan's stock in trade. Or else.

In Gildan's case, “or else” means re-experiencing the wrath of the WRC or the Maquila Solidarity Network (MSN), the Toronto-based group that first took on the T-shirt maker, if it fails to live up to the agreement it signed with the anti-sweatshop lobbies last January to atone for its sins. They involved firing about 80 pro-union workers at its El Progreso sewing facility in Honduras in 2002 and 2003, then closing the plant in September, 2004 — just after the WRC report was issued.

The terms of the January agreement are extraordinary, by any measure. Not only did Gildan agree to give preferential hiring treatment to El Progreso's 1,800 workers (including the union supporters) at a new, more modern sewing facility that it opened in Honduras in March, it undertook to provide free daily transportation for workers or cover their relocation costs, train former El Progreso workers for jobs at the new plant and agree to independent verification of its compliance with the agreement. This is in addition to undertakings Gildan made to the Fair Labour Association (an industry body that accredits manufacturers) to respect workers' rights to organize and provide back pay and severance for fired union supporters. Under Honduran law, the participation of only 30 workers is required to form a union; no unions are currently organized at Gildan's three sewing facilities in the country, nor at its massive Rio Nance textile plant there — the biggest single T-shirt-fabric manufacturing plant in the world.

The WRC and the local Honduran rights body it charged with monitoring Gildan's compliance are poised to issue a follow-up report to last January's agreement. Whatever its findings, it can't deny Gildan's efforts to make good on its vow to become a model employer by Central American standards.

Of the 900 El Progreso workers who actually took advantage of Gildan's pledge to find them new jobs, the company says all but 60 are now working at other Gildan facilities or at subcontractors. The remainder are receiving training. In addition, Gildan moved expeditiously earlier this year to reinstate three workers at a Nicaraguan subcontractor who were fired for pro-union activities. The firings had been brought to Gildan's attention by the MSN, demonstrating the new era of co-operation between the company and its watchdogs.

“Historically, when [non-governmental organizations] raised issues, our knee-jerk reaction was to be in denial, because we were proud of our facilities,” says Laurence Sellyn, Gildan's executive vice-president and chief financial officer.

“The reality was there were instances when our [internal code of conduct] was not being followed. When Glenn [Chamandy] became CEO, he immediately determined that one of our top priorities was to rebuild a positive working relationship with the NGOs.”

Here's another point for the case study: The CEO does make a difference. Glenn Chamanday, 44, took over from his older brother Greg, 46, in mid-2004. Greg Chamandy monetized his stake in the family business just as it adopted a single-class share structure and left the company. Gildan's dealings with the workers' rights groups changed dramatically soon afterward.

The co-operative approach is not only good ethics. It's smart business. There is clearly a cost to Gildan of providing training and better pay and working conditions to its 4,000 Honduras sewers, who earn an average of $3 (U.S.) an hour, several times the base wage for garment workers in the country of about 65 cents. But not too big of a cost. The company last week reported a 42-per-cent jump in fiscal 2005 earnings. With its modern weaving facilities in the country, labour accounts for only about 10 per cent of the cost of producing a blank T-shirt that Gildan sells for an average of $1.50 to a handful of big U.S. wholesalers such Broder Bros. and SanMar — the middlemen who, in turn, sell the tees to more than 50,000 embroiderers and printers who slap those university logos on them.

It would appear, for now, that the undergrads can wear their tees with a clear conscience.


Eco-walk commutation allowance: Mazda pays its workers to leave the car at home and walk to work

[Thanks to Laurie for the link - JFB]

Walk to work, carmaker tells staff

TOKYO, Japan (AP) -- Japanese automaker Mazda Motor Corp. is recommending its employees walk to the office, rather than drive, to improve their health and protect the environment, a company spokesman said Friday.

Those meeting a set of requirements by going to office on foot are eligible to receive 1,500 yen ($12) a month, Mazda spokesman Ken Haruki said.

Aimed at improving employees' health and promote environment protection, Mazda introduced its "Eco-walk commutation allowance" on Thursday, Hakuki said.

Mazda, Japan's fourth-largest automaker based in Hiroshima, is the first Japanese automaker to encourage its employees to walk and offer an incentive money, he said.

The company's all 20,000 workers at domestic plants are eligible. The company has no plans to apply for those working outside Japan, Hakuki said.

Haruki said the allowance will be given to any Mazda employees who live more than two kilometers (1.24 miles) from the office and walk more than four kilometers (2.48 miles) in round trips at least 15 days a month.

Employees can get off a train or bus on their way to office and take a walk over the distance to meet the requirements, Haruki said.

Yamaha Motor Co., a major Japanese motorcycle maker, introduced a similar eco-walk commutation system for its employees a year ago.

----- Forwarded by Jean-Francois Barsoum/Markham/IBM on 06/12/2005 12:53 -----

Eco-walk commutation allowance....

- Laurie
Program Director, Marketing, IBM On Demand Transformation
Phone/Fax: 516-203-1601, 8/268-0348