Sustainablog

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

25.8.06

M&S cottons on to the new fashion - ethically sourced products: Large retailers are buying into a label that signifies a £195m-a-year business

M&S cottons on to the new fashion - ethically sourced products

Large retailers are buying into a label that signifies a £195m-a-year business

Julia Finch, City editor
Monday July 31, 2006

The Guardian

Looming large ... cotton from co-ops in India and Mali travels thousands of miles before becoming M&S's latest jeans


As jeans go they are unremarkable. They are neither skinny, stonewashed, low rise nor distressed; neither designer nor discount. But Marks & Spencer believes its new £35 women's denims will fly off the shelves - because they carry a label which is proving extremely fashion forward: Fairtrade.

The jeans, selling for four times the price of the store's cheapest women's denims, and a £29.50 version for men go into the retailer's stores today. "We are doing it because there is a demand there," said M&S chief executive Stuart Rose. "People are very much more aware now. They care about trade and they care about fair trade."



The M&S jeans are the result of a series of tie-ups between the 14-year-old Fairtrade organisation and big-name retailers which are helping to propel ethically sourced products from the margins to the mainstream. More than 200 companies now sell Fairtrade products ranging from wine to T-shirts and footballs - and shoppers are being drawn from all social groups, helping to shake off the image of it as a middle-class label.

"Our customers care about how our products are made," Mr Rose said, "and a lot of youngsters are picking up on it".

The Fairtrade organisation believes last year's Make Poverty History campaign made a difference, with more consumers now demanding higher standards from retailers and a better standard of living for those who produce the raw materials. There are other signs of a bandwagon starting to roll, with celebrities such as Fearne Cotton, Vic Reeves, Amanda Burton, Emilia Fox and Adrian Edmondson lending their support to the Fairtrade campaign. Sales of Fairtrade-certified products rose 40% last year to £195m. It remains a drop in the ocean of total consumer spending - British shoppers spend more than £100bn a year in supermarkets alone - but the ripples are spreading.

In March, M&S announced it would replace all 38 lines in its tea and coffee ranges with Fairtrade alternatives. Since then, the retailer says, coffee sales in its food halls have increased by 27%.

At the same time M&S launched Fairtrade T-shirts and socks for men and women in 30 stores. Now the retailer is testing jeans - with the women's version going into 200 M&S stores - and ranges of underwear, men's formal shirts and babywear will arrive in the autumn. "We have also been able to source more Fairtrade cotton," Mr Rose said.

Guarantee

The initiative is a simple concept: Fairtrade guarantees farmers and suppliers in the developing world a minimum price to cover their costs of production and a small premium to be invested in their local communities. Fairtrade does not mean organic, although an increasing number of Fairtrade farmers are also converting to such methods.

The cotton for the M&S T-shirts comes from a farmers' co-operative in Gujarat, India, and since the launch the number of farmers in the co-op has expanded from 100 to 1,000. The cooperative is investing its Fairtrade premium in fresh drinking water supplies for a local school, health insurance for its farmers and a health education programme for children.

The cotton for the jeans is supplied by Djidgan Cotton Farmers' Co-operative Union, a partnership of 36 village co-ops in Kita, Mali. The cotton - and the jeans - have been in production for 10 months and will have covered thousands of miles before arriving on M&S shopfloors.

The cotton was picked by the Djidgan Union last October and bought by the government-controlled cotton export company, which is registered with the Fairtrade Labelling Organisation. It was then sent to Belgium for ginning - which separates the cotton from the seeds and combs the fibres. By April it had been spun into yarn, knitted and woven, also in Belgium.

The fabric was then shipped to Tangiers, Morocco, to be manufactured, labelled and finished by Dewhirst Ladieswear. In June it was sent to Dewhirst's distribution centre in Wales for delivery to M&S warehouses and stores. Some campaigners believe the increased involvement of major retailers might ultimately corrupt the Fairtrade initiative. "I think that is a very cynical view," Mr Rose said. "Personally, I would be horrified if the aims [behind the label] weren't met. The premium is absolutely clear. It is certified and transparent. The fact is that Mali needs to sell more cotton and it is better that it is Fairtrade."

Cotton is crucial to the economy of Mali, where income per head is less than £200 a year. Between 1999 and 2002, cotton represented 57% of agricultural exports, and 40% of the rural population is dependent on growing it. There are 200,000 cotton farms in the country and the lives of 3 million people in Mali - population 13 million - are connected to the cotton crop.

The Fairtrade Labelling Organisation has been working in Mali for just two years and the premiums being paid for the cotton used in M&S jeans are being invested in two new school buildings and paying half the salaries of three new teachers. Previously local children had to walk 9 miles (14km) to school and back each day.

A new well is also being sunk, and foundations for a new warehouse, to store cotton seed, grain and fertilisers, are being laid.

Fairtrade in numbers

40%: The increase in sales of Fairtrade-certified products in the UK last year.

200: Number of companies now selling Fairtrade products, ranging from wine to footballs.

27%: Rise in sales of M&S coffee since the chain switched to Fairtrade lines in March.

1,000: The number of farmers in the Gujarat, India, co-operative that provides the cotton for M&S Fairtrade T-shirts.

£200: Average yearly income in Mali, where the cotton comes from for M&S's new Fairtrade jeans.

9 miles: Distance children in Mali had to walk to school. The Fairtrade premium paid to the co-op providing the cotton for M&S jeans is being invested in new schools.

Note created Jul 31, 2006
Guardian Unlimited Business | | M&S cottons on to the new fashion - ethically sourced products - business.guardian.co.uk/...

Airlines must look at alternative fuels to boost efficiency: IATA


Airlines must look at alternative fuels to boost efficiency: IATA

AFP, 27 July 2006 - Airlines must adapt to high oil prices and consider alternative fuels and other innovations to regain profitability despite a 6.7-percent growth in passenger traffic in the first half of 2006, the top industry association said Thursday.

Airlines are still battling for financial prosperity despite growing revenues and better load factors in the first half of the year, the International Air Transport Association (IATA) said in a statement.

"Change is urgent and now is the time. Airline efficiency gains must be matched throughout the value chain. And we must find new ways of doing business," said IATA Director General Giovanni Bisignani.

"The bottom line is all about oil. Prices continue at near record levels and we expect a fuel bill of 112 billion dollars this year at an average price of 66 dollars per barrel," he added.

"Increased political instability in the Middle East does not bode well for a price drop any time soon."

Bisignani said operational changes were improving efficiency. But airlines needed to be able to go further, he insisted.

"The 100 percent conversion to (electronic) e-ticketing by the end of 2007 is a great example."

"But we now look to the oil industry to move faster at developing alternative fuels to further improve efficiency and environmental performance," said Bisignani.

"The good news is that neither the extraordinary price of oil nor the inching-up of interest rates negatively impacted demand," he added.

IATA represents about 260 companies that account for more than 90 percent of world air traffic.

Last month, passenger traffic grew by 6.5 percent compared to June 2005, to bring average growth over the first six months of the year to 6.7 percent.

Airlines achieved high average load factors of 78.3 percent in June, a measure of the number of passengers carried on each aircraft and their efficiency.

However, IATA is maintaining its forecast of about 3.0 billion dollars in losses industry-wide at the end of the year, fuelled by an expected additional bill of 24 billion dollars due to increasing jet fuel prices.

IATA spokesman Anthony Concil declined to specify any particular alternative to current jet fuel, pointing only to possible synthetic or biofuel alternatives.

The industry is coming under pressure to clean up emissions from aircraft even further, amid claims that air travel has a significant impact on global warming.

IATA has rejected a carbon tax on greenhouse gas emissions that France is levying on each airline ticket sold.

"There is a bit of hysteria about the impact of air travel on climate change but the industry is committed to improving its environmental performance," Concil told AFP.

Airlines have traditionally pointed to a 70 percent improvement in fuel efficiency in aircraft since the 1970s.

Until recently IATA was lukewarm about the feasability or value of cleaner fuels.

However, just over six months ago its board of governors adopted a strategy that described potential alternative fuels as "the primary means to address aviations greenhouse gas emissions", along with other technological changes.

Concil acknowledged that durably high oil prices make the case for alternative fuels more pressing.

"We're a bit more enthusiastic for the oil industry to search for alternatives," he said.

Jet fuel at 90.5 dollars a barrel is approaching a near-100 dollar peak reached last September. The current price is nearly one-third higher than a year ago and nearly three times what it was in 2000.

Oil prices currently stand around 75 dollars a barrel compared to 20 dollars four years ago.

Analysts predict that oil prices will stay high because of a combination of supply chain problems and soaring demand from emerging nations, especially in China, on top of traditional tensions that bedevil oil markets.

Note created Aug 4, 2006
Airlines must look at alternative fuels to boost efficiency: IATA - www.wbcsd.org/...

BP, Suncor, and Shell Top Oil Sector Sustainability Rating; Chevron and ExxonMobil Rank Low


BP, Suncor, and Shell Top Oil Sector Sustainability Rating; Chevron and ExxonMobil Rank Low

SocialFunds.com, 1 August 2006 - A recent report published by Jantzi Research examines 23 oil companies worldwide on environmental issues such as greenhouse gas emissions as well as human rights and other social issues.

Oil and gas have been fueling record profits and strong investment returns recently--as well as increasing exposure to social and environmental risks. These "above ground" issues, as they are called by some energy companies, are increasingly understood as having material impacts on financial performance by mainstream investors.

So implementing best practice to address social and environmental issues is not merely an ethical statement by oil and gas companies to appeal to social investors, but also a financially savvy risk management strategy attractive to more conventional investors as well.

Toronto-based socially responsible investing (SRI) research firm
Jantzi Research recently released a report entitled Oil and Gas in a Bull Market: The Shifting Sands of Responsibility that rates and ranks 23 oil and gas companies on their social and environmental performance.

UK-based BP topped the list with a score of 6.8 (out of 10), with second through fourth places going to Canada-based Suncor Energy (6.5), Nexen (6.3), and Petro-Canada (6.1) respectively, and UK-based Shell (6.0) rounding out the top five.

"It is interesting to note that the top performers are dominated by European and Canadian companies, while all eight of the U.S. companies evaluated for this report received below-average scores," states the report.

Chevron ranks the highest of the US-based companies at the 12th position with a score of 4.3, followed by Burlington Resources (4.2) in 13th, Marathon Oil (3.9) in 15th, and ExxonMobil (3.7) in 18th.

Using the best-of-sector approach it helped pioneer to identify social and environmental leaders in a sector, Jantzi rates companies in four categories: environment (30 percent), community and society (25 percent), human rights (25 percent), and health and safety (20 percent).

Reflecting the significance and complexity of environmental issues, Jantzi breaks this category down into multiple layers of subcategories. For example, under the "impact and initiatives" subcategory, it looks at greenhouse gas (GHG) emissions, further breaking the down to GHG emissions record and GHG management systems.

Unsurprisingly, the overall leaders perform well in GHG emissions reductions. The report highlights the fact that BP set aggressive targets in the late 1990s (well before its competitors) to reduce GHG emissions to ten percent below its 1990 level by 2010, and achieved this target within three years, almost a decade ahead of schedule.

"In contrast, many US oil and gas companies are only in the beginning stages of acknowledging climate change as a corporate concern and business issue," states the report. "Only six of the US companies evaluated track or report their GHG emissions."

The report also pokes holes in the inflated rhetoric of companies whose primary product pollutes the environment not only under ordinary use but also in the exploration, extraction, and refining of it.

"Despite the claim by some oil and gas companies that they are 'sustainable,' along with their issuance of annual 'sustainability reports,' the reality is that oil and natural gas are, in every practical sense, finite resources," the report says.

"For these reasons, investment in renewable (and sustainable) energy is one of the most important social and environmental initiatives a company can undertake and, consequently, a critical indicator used by Jantzi Research to evaluate environmental performance."

Jantzi separates companies into three levels of performance on renewables, with BP, Shell, and Suncor alone in the top level of those investing significantly in renewables and developing clear strategies.

Unfortunately, a majority of the companies evaluated, including Burlington, Marathon, and ExxonMobil, demonstrate little or no investment in renewables, with no plans to do so in the future.

The report similarly exposes the harsh impact of oil exploitation on communities in developing countries and on human rights.

"While some projects in poor countries can have an overall positive impact, it is increasingly accepted that oil and gas development has had an overall negative impact in many developing countries," says the report.

On human rights, BP and Shell again stand out as top performers, while Chevron comes in sixth-to-last and ExxonMobil next-to-last. The report highlights oil companies' exposure to lawsuits under the Alien Tort Claims Act (ATCA), a 1789 US law used to redress corporate complicity in gross human rights violations such as forced labor and rape.

Predictably, low-ranking companies face ATCA cases--ExxonMobil for alleged complicity with the Indonesian military torturing residents of the Aceh province, and Chevron for alleged complicity with the Nigerian military shooting protestors on its offshore Parabe platform.

However, even high-ranking companies are not immune from exposure to ATCA cases. Shell, too, is accused of complicity with human rights violations in Ogoniland, Nigeria in the early 1990s in an ATCA case.

Note created Aug 4, 2006
BP, Suncor, and Shell Top Oil Sector Sustainability Rating; Chevron and ExxonMobil Rank Low - www.wbcsd.org/...

Biofuel production has a substantial environmental impact that will limit growth in the sector, according to a recent bank report.


Sarasin warns investors on biofuels

Environmental Finance, 27 July 2006 - Biofuel production has a substantial environmental impact that will limit growth in the sector, according to a recent bank report.

The current methods of producing bioethanol and biodiesel are not as environmentally friendly and socially compatible as their "bio" label suggests, says the report* from Basel-based Bank Sarasin.

"The sharp rises in the share price of companies in the biofuels business clearly reflect investors' high expectations. We are less excited about the future of this industry, because its expansion will quickly come up against certain natural constraints," says Matthias Fawer-Wasser, the bank's sustainability analyst.

Large-scale biofuel production could require vast tracts of monoculture plantations that reduce biodiversity and take up agricultural land that could be used for food or animal feed crops, the bank argues. There are also negative implications for agricultural workers in terms of exposure to agrochemicals.

The bank gives bioethanol a better sustainability rating than biodiesel, as there are more raw materials to source it from, a higher yield per hectare and superior performance in terms of reducing carbon dioxide emissions.

But unless there are technological advances in turning plant material into transport fuel – so that not just the edible parts of plants are used – Fawer-Wasser estimates the limit for socially-responsible use of biofuels at 5% of current petrol and diesel consumption in the EU and US. This is less than the EU's target of 5.75% by 2010.

However, of the 16 companies analysed in the report, 10 qualify for inclusion in Sarasin's sustainable investment universe, although for some of them biofuels are a small part of their business.

The 10 qualifying companies are: Abengoa, Biofuels Corp, D1 Oils, EOP Biodiesel, Pacific Ethanol, Renova Energy, Xethanol, Neste Oil, Novozymes, and Sunopta. The six rated as ineligible for inclusion are: Biopetrol Industries, Cosan, Archer Daniels Midland, Agrana, Bunge, and Südzucker.

* Biofuels – transporting us to a fossil-free future? Bank Sarasin, July 2006.

Note created Jul 31, 2006
Sarasin warns investors on biofuels - www.wbcsd.org/...

Supermarket chains to curb use of trans fats


Supermarket chains to curb use of trans fats

Sarah Hall, health correspondent
Thursday August 3, 2006

The Guardian

Two supermarket chains confirmed last night they will cut all "trans fats" from their own-brand products, less than a week after scientists warned that even a small amount could endanger health.

Sainsbury's said it would cut the dangerous fat, which raises the risk of heart disease, from its 15,000-strong range of own-brand processed food from January, while Tesco set a date for the end of the year. The announcements follow an article in the British Medical Journal calling for the fats to be clearly listed on food labels, and warning that even small amount is bad for your health.

Artificial trans fats are found in processed and fried foods, including biscuits, muffins, popcorn and ready-made meals. Formed by a process called hydrogenation - in which vegetable oil is converted into a solid - they give food a better taste and prolong shelf life. Marks & Spencer has stopped using hydrogenated vegetable oil in its food production and other manufacturers are cutting down the trans fat content of processed foods, according to the Biscuit, Cake, Chocolate and Confectionery Association.
Note created Aug 4, 2006
Guardian Unlimited | Special reports | Supermarket chains to curb use of trans fats - www.guardian.co.uk/...

For sale: pollution -- As climate worries heat up, U.S. firms are experimenting with the greenhouse gas trade. Is this a good idea?


For sale: pollution
As climate worries heat up, U.S. firms are experimenting with the greenhouse gas trade. Is this a good idea?
FORTUNE Magazine
By Abrahm Lustgarten, Fortune reporter
August 24 2006: 6:09 AM EDT

NEW YORK (Fortune) -- Along the shores of the sleepy Ohio River, deep in West Virginia's "megawatt valley," the twin smokestacks of American Electric Power's Mountaineer coal plant rise 1,000 feet, a shade higher than the Eiffel Tower. Here coal is burned to heat water to make steam that drives the giant turbines that make the power - a grossly inefficient process that has barely changed since the days of Edison.

"You throw away a lot of heat to make that electrical energy - about 40 percent," says the plant manager, Charlie Powell. And it is dirty. AEP (Charts) is America's single largest emitter of greenhouse gases - sending as much out from its stacks as Canada. That's a statistic the company wants to change, and it's hoping that membership on the Chicago Climate Exchange can help.

The 206 members of the CCX buy and sell rights to emit greenhouse gases (carbon dioxide, methane and four others), just as if they were pork bellies or wheat. When AEP joined the CCX, for example, an independent auditor established its baseline emissions; AEP made a contractual commitment to cut that figure by 1 percent a year (total U.S. emissions, by comparison, are rising more than 1 percent a year). Then the company was granted credits that equaled its target.

AEP can use these in three ways. If its emissions are below its allowance, it can sell the difference, meaning the company has an incentive to emit as little as possible. If it needs to emit more than it has credits, it can buy the difference from another member. Finally, AEP can invest in an offset program - say, planting carbon-sucking trees - that would earn the company new carbon credits.

All of this activity is tracked by an AEP trader, based in the company's headquarters in Columbus, Ohio. The goal of the CCX is to create a market for pollution that, in effect, becomes a mechanism for reducing it. Because the allowed emissions of all members of the CCX is reduced each year, even if AEP's go up, the total keeps going down.

Do-nothing days are over

Like it or not, U.S. industry is beginning to accept that the issue of climate change is not going away. Many companies, including AEP, believe that a cap-and-trade setup is the most economical way for business to deal with it.

Trading pollution rights on a virtual commodity exchange is not the stuff of mad green wonks. The United States already runs several environmental markets, including the highly successful SO2 framework to combat acid rain, and Europe and Canada also have carbon markets. (The CCX has subsidiary exchanges that operate in both those places.)

Though no one has to join, the CCX has managed to attract a broad array of members, including industrial giants like Rolls-Royce (Charts), Motorola (Charts), DuPont (Charts), and IBM (Charts); six cities; and even a U.S. Senator, Richard Lugar (R-Indiana), who owns a 600-acre farm. It's difficult to know exactly what percentage of U.S. emissions CCX members account for - on this and other details, the operations can be murky - but AEP alone accounts for about 10 percent of the nation's stationary source (i.e., not cars) emissions. Most members have pledged to reduce their baseline emissions by 1 percent a year.

A voluntary system, says Richard Sandor, the brains behind the CCX and a former chief economist of the Chicago Board of Trade, helps companies clean up their operations and learn the basics of trading.

"Our job is to inform the debate, build core competency, prove that we could develop a common protocol, and to implement it," says Sandor. "One should never underestimate the training-wheel phenomenon."

On those modest terms, the CCX works. Its members have traded a total of 11 million metric tons of CO2e (carbon dioxide equivalent, the basic unit of GHG trading) since the exchange opened for business in 2003. In 2003-04, according to the CCX, its members reduced the amount of CO2e they emitted by the equivalent of taking 15 million cars off the road.

But fundamental questions remain: Can a voluntary system that includes only a small fraction of polluters ever result in robust trading? Is the CCX really helping the environment, or just adding pages to sustainability reports? And since companies can make efficiency gains on their own, why do they need the CCX at all?

Getting the jump on federal regulation

Besides green bragging rights, the reasons for joining the exchange almost always start with the belief that Congress will eventually force some sort of action. "It really is something that is probably before its time," says Michael Morris, CEO of AEP and a board member of the CCX. "But when that day comes, it will be a very effective tool."

As carbon matures as a commodity, companies in the CCX see a value in being ahead of the game. "If we could learn how to inventory our greenhouse gases now, how to trade them and verify them, frankly, it's a potential business opportunity," says Kerry Kelly, director of federal public affairs at Waste Management, another CCX member.

The lack of a nationwide, mandatory emissions cap limits the action on the CCX, which sees only about 200 trades a month. Trading volume is volatile, ranging from as little as 37,000 metric tons in January to as much as three million in May. And until recently, prices on the CCX struggled to top $2 per ton. By comparison, Europe's exchange, supported by mandatory caps, can see volumes of three million tons a day, and prices peaked at $39 in March. (They dropped when traders learned that too many credits had been allocated; prices have stabilized at about $20.)

Imagine that AEP needed to buy credits to increase Mountaineer's emissions by 10 percent. At today's CCX prices that would cost $4 million - peanuts for the $12 billion company. The same purchase on Europe's exchange, where a continent-wide law means everyone needs the credits, would cost about $18 million.

Sandor is confident that the differences in participation between the U.S. and Europe will narrow. In April, he noted, a roster of companies, including Shell and GE, told the Senate they were ready for federal limits. "Prolonging uncertainty on carbon in the U.S. delays and distorts technology decisions," David Slump, general manager for marketing at GE, told Congress.

Within a few weeks CCX prices shot up to $5, and volume picked up too. "We're the indirect beneficiary of $70 oil, or maybe Katrina refocused everybody," Sandor says. "There's suddenly a greater interest in everything that has to do with reduced greenhouse gas emissions."

Sustainability depends on big players

Whether those prices are sustained may depend on how well the design of the exchange suits the large industrial players that need it most. One difficulty: Many CCX members are retail consumers of energy - cities, colleges, states - for whom participation is sometimes a political statement. Portland, Ore., for example, will retire rather than trade its credits. Nice for the environment, bad for market liquidity.

In a sense, the CCX has more ambition than action. Unlike the SO2 market, which is limited to power plants, or the European carbon market, which is limited to big plants and manufacturers, the CCX allows just about anyone to join (feel free to apply). But companies like AEP need other big firms to trade with, and right now they make up less than 15 percent of the 206 members.

Still, the recent spike in prices on the CCX has gotten the attention of AEP. "If the price is $1 a ton, it's not going to result in a lot of activity," says Chuck Zebula, AEP's senior vice president for fuel and emissions. But valued at $5 a ton, what comes out of the smokestack is worth enough to offset upgrades and influence decisions.

Last year the Mountaineer plant generated 10.5 million megawatt-hours of electricity, and a corresponding 8.6 million tons of CO2e. That would make its emissions, in CCX terms, a $39 million cost. If improvements yield just a 1 percent cut, the plant has almost $400,000 of emissions to sell. Looked at another way, the emissions are suddenly 20 percent of the cost of Mountaineer's fuel.

Back inside the plant, Powell shouts over the deafening roar of machinery. He points out a crooked valve in the main steam line that slows the flow on the way to the generator. This year, based partially on the economics of the CCX, Powell will replace the bend with a straight valve, a change he thinks will save 30,000 tons of CO2. Company-wide such small changes could save AEP 1.3 million tons of CO2e a year.

It goes to show that it's the big polluters that have the best opportunity to make a real dent in GHG reductions. And if training wheels are needed to make that happen, well, it's a start. Top of page

Plans Across the Water: California and U.K. Strike Climate Deal


Plans Across the Water: California and U.K. Strike Climate Deal

GreenBiz.com, 1 August 2006 - California and the U.K. government are preparing to create their own climate treaty that sidesteps the Bush administration's official climate policy to create a trans-Atlantic market for greenhouse gases. California governor Arnold Schwarzenegger and British prime minister Tony Blair on Monday announced their collaboration during their meeting in Los Angeles on Monday. They were joined by business leaders to announce the agreement under which Britain and California will collaborate on research into clean energy technologies and California will study the British experience of greenhouse gas emissions trading. The European Union already operates such a system, issuing companies in energy-intensive industries with permits to produce a set amount of carbon dioxide. Blair said the agreement with California "will allow us to explore how both of us ... can combine together in research, in technology, but also in trying to evolve market mechanisms that allow us to reduce carbon dioxide emissions." Both sides will collaborate on reducing emissions from vehicle transportation, sharing knowledge gained through California's "Hydrogen Highway" project to encourage use of hydrogen-fueled cars, and the UK's experience of obliging oil companies to include a certain amount of biofuel in their gasoline and diesel fuels. The California governor was quick to point out that the agreement is not an attempt to circumvent the Kyoto Protocol, the international treaty on climate that has been signed by dozens of countries including the U.K., but not the U.S. "This is an agreement to share ideas and information. It is not a treaty," said Adam Mendelsohn, Schwarzenegger's communications director. "Right now, all we are doing is talking about sharing ideas." Blair said the agreement with California "will allow us to explore how both of us ... can combine together in research, in technology, but also in trying to evolve market mechanisms that allow us to reduce carbon dioxide emissions." But environmentalists were not impressed. Craig Noble of the Natural Resources Defense Council, an environmental group, said the pact had symbolic value, but "the time for talk is over." He urged passage of a proposal, pending in the state legislature, that would make California the first state to cap greenhouse gas emissions from industrial sources. "The bottom line is, voluntary is not enough," Noble said. This article is reproduced with kind permission of GreenBiz.com. For daily news and articles visit www.greenbiz.com. Visit GreenBuzz to subscribe to GreenBiz.com's free newsletter.

Note created Aug 4, 2006
Plans Across the Water: California and U.K. Strike Climate Deal - www.wbcsd.org/...

How Holcim cleaned up its act: Visit your nearest quarry or kiln, and it is easy to see why cement is one of those industries people love to hate.


How Holcim cleaned up its act

Financial Times, 2 August 2006 - Visit your nearest quarry or kiln, and it is easy to see why cement is one of those industries people love to hate.

Quarries are eyesores. Kilns are by definition hot, dirty, dusty and noisy. To cap it all, cement-makers have gained a reputation for anti-competitive behaviour, demonstrated in regular cartel investigations into alleged price fixing.

Yet it is an image Markus Akermann, chief executive of Holcim, the world's leading cement group, has set his sights on dispelling. The company's efforts in this respect illustrate the opportunities and obstacles facing traditional “smoke-stack” industries in reducing consumption of fossil fuels, minimising emissions and generally acting as better corporate citizens.

Mr Akermann speaks with authority about Holcim's far-flung operations. Many of his 28 years with Holcim were spent in the field, notably Latin America. He ran various country divisions, before returning to Zurich as executive board member for Latin America in 1993, moving on to become CEO nine years later.

Since taking over, the urbane Swiss-German has pushed Holcim into cleaning up its act. Like Lafarge of France and Cemex of Mexico, the industry's number two and number three, Holcim has implemented changes to improve its environmental record and reinforce its broader commitment to corporate social responsibility.

Mr Akermann is reluctant to discuss which of the top three has done more. In 2002, his company was a co-founder of the Cement Industry Initiative, part of the World Business Council for Sustainable Development, a non-profit organisation that helps companies improve their environmental performance. Since then, membership has risen from two to 10 companies, accounting for about half of world cement production, excluding China.

Holcim is well placed to take the initiative. With 90,000 employees in more than 70 countries, it is the most international of the industry's heavyweights. In 2005, Asia and Latin America accounted for almost 40 per cent of sales. This year, the proportion should be higher after big acquisitions in India and China.

Holcim's strategies to project a cleaner image vary depending on location. In the developing world, the primary focus is on basic training for staff. While education standards have improved, the group often still finds itself having to provide fundamental skills before starting to sow a broader environmental awareness in its employees.

It has over the years drawn up a company bible of rules on everything from reducing truck movements in quarries to prevent accidents to what can be used to heat kilns to reduce emissions. Such mandatory directives are enforced with sanctions, and ultimately dismissal, says Mr Akermann.

However, he makes no pretence the policies are driven by philanthropy or altruism. “These are tough business decisions that make sense for the company,” he says.

Part of the influence has come from the Schmidheinys, the Swiss industrial dynasty that virtually founded Holcim almost a century ago and one branch of which still owns 22 per cent of the shares.

The Schmidheinys started investing abroad in the 1930s and soon gained a reputation for paternalism. They set up schools for black workers in South Africa at a time when such behaviour was uncommon. Later, they were among the first to recognise the importance of environmentalism for industrial companies.

In developed regions, where cement-makers are seen less positively, Holcim's emphasis is slightly different. It puts a premium on information and interaction with local authorities, environmental groups and especially people living near plants and quarries, Mr Akermann explains. “The priority is contact with the local community.”

He argues the only way to deal with concerns about trucks, kilns and quarries is to listen to people's worries and complaints and explain how cement-makers can address them.

Take emissions. The cement industry accounts for about 5 per cent of all global man-made emissions – roughly the same as the energy sector.

Holcim has set ambitious targets to cut greenhouse gases, with independent monitoring to certify the results. Since 1990, carbon dioxide emissions per tonne of cement have dropped by 15 per cent – on the way to the group's 20 per cent goal by 2010. Pollutants such as nitrogen oxides, sulphur dioxide and dust are also on course to fall by 20 per cent by 2010, compared with 2004.

Two big developments have assisted in advancing those aims, and highlighting Holcim's pragmatic ap­proach to environmentalism.

Helped by the presence of a big core family shareholder, the group has stressed long-term growth over shorter-term profit maximisation. That has tended to boost investment in modernising plants and installing new technology. The impact has been most striking in developing counties – where Holcim has often expanded through takeovers – with the replacement of often antiquated and polluting facilities.

Moreover, starting in Europe, and now increasingly elsewhere, the group has also pioneered the use of alternative fuels.

How much heavy oil, coal or gas Holcim consumes at a site depends on local availability and pricing. However, starting with experiments in Belgium in the late 1950s, it began using alternative materials in its fuel mix.

That offered a triple benefit. Fuel costs could be cut, emissions potentially reduced, and Holcim saved on the fees for disposing of waste that would otherwise have gone to commercial incinerators or landfill.

Holcim's “thermal substitution rate” – the term for the degree to which alternatives have replaced traditional fossil fuels – stood at 12.8 per cent last year. By comparison, it was almost 4 per cent in 1990 and just under 12 per cent in 2000.

It has also spent up to $10m apiece at its biggest plants to install chemical laboratories and associated facilities for processing alternative fuels.

Used tyres – which now comprise 15 per cent of alternative fuels consumed – are a case in point. Old tyres are ugly and a fire risk. In hot countries, they can also endanger health, with insects breeding in the water that often festers in their rubbers hulks, spreading diseases such as dengue fever.

With temperatures of up to 2,000°C – higher than in commercial incinerators – kilns can easily eliminate such waste. Moreover, unlike commercial incinerators, they leave no ash, with any residue becoming part of the chemical cocktail that makes cement.

“The cement kiln is the best industrial device to burn specific waste,” says Mr Akermann.

Creditable though Holcim's environmental concern may appear, its value to shareholders is opaque. While many companies like to spotlight their green credentials, the impact for shareholders, let alone the bottom line, is impossible to determine. For many observers, the business of business is business, and no more.

Mr Akermann concedes the earnings benefits cannot be quantified. “We can't draw any direct figures to demonstrate the value,” he says.

But he has three indirect yardsticks as proxies. The first is reputational, with recognition from independent or outside bodies. Holcim is an industry leader in the Dow Jones Sustainability Index, a member of the FTSE4Good index and has numerous awards for environmental awareness.

Second, a good image has helped to recruit good em­ployees and keep them, he adds. “Holcim has one of the lowest staff turnover rates in the industry,” he says.

Finally, Mr Akermann points to the share price. Although distorted by frequent rights issues to finance growth and the traditional cyclicality of the cement business, Holcim's shares have risen rapidly, especially in the past two years. The company argues that this reflects a recognition not only of its profits growth, but also its broader achievements.

As a down-to-earth Swiss manager, Mr Akermann is not the type to don an environmental crusader's hat. “Sustainable development is clearly a business case which has to be reflected in the bottom line,” he says.

But Holcim's pragmatic approach suggests that good business and broader concerns about pollution and the environment can mix, even in an extractive industry such as cement.

Note created Aug 4, 2006
How Holcim cleaned up its act - www.wbcsd.org/...

City worker bullied by 'mean and spiteful' colleagues wins £817,000


City worker bullied by 'mean and spiteful' colleagues wins £817,000

Clare Dyer, legal editor
Wednesday August 2, 2006

The Guardian

A City bank administrator who was subjected to what a judge described as "a deliberate and concerted campaign of bullying" by four women colleagues won £817,000 damages yesterday over the treatment she endured.

High court judge Mr Justice Owen ruled that Deutsche Bank Group Services (UK) Ltd was responsible for the two nervous breakdowns and the major depressive disorder Helen Green suffered as a result of a "relentless campaign of mean and spiteful behaviour designed to cause her distress".

Article continues



<a href="http://ads.guardian.co.uk/click.ng/Params.richmedia=yes&amp;spacedesc=mpu&amp;site=Business&amp;navsection=&amp;section=108725&amp;country=usa&amp;rand=4108216"> <img src="http://ads.guardian.co.uk/image.ng/Params.richmedia=yes&amp;spacedesc=mpu&amp;site=Business&amp;navsection=&amp;section=108725&amp;country=usa&amp;rand=4108216" width="300" height="250" border="0" alt="Advertisement"></a>


Ms Green, 36, who worked as a company secretary assistant between October 1997 and October 2001, was on the lower rungs of what could have become a highly paid career as a company secretary, the officer responsible for making sure a limited company's records and documentation are in order.

But her illness forced her to abandon her City career. She now works for a London charity and plans to start postgraduate studies towards a PhD in organisational behaviour next month, with the aim of a lecturer's job in about five years.

Witnesses described the bullying as "slow, systematic mental abuse" and "extreme bitchiness and mob culture".

During the court hearing Ms Green said she was "stonewalled" from day one but then the behaviour escalated. She was "blanked" and one of the women joked that she could smell a "stink" and held her nose. She also blew raspberries when Ms Green walked across the room.

Another colleague, who had ignored her until then, crossed her arms in a very dramatic way and stared at her while she washed her hands in the ladies' washroom. Ms Green said she had to lock work away in her drawer at night to keep it from going missing. Her name was removed from the firm's global intranet directory and from departmental circulation lists.

Ms Green alleged she was targeted for "mobbing" by four women: Valerie Alexander, manager of the insurance division; Ms Alexander's personal assistant, Fiona Gregg; telephone directory administrator Daniella Dolbear; and Jenny Dixon, PA to department head, Richard Elliston.

She denied that she had done anything to justify the behaviour or that she had "talked down" to the women.

Her woes were compounded by a male colleague, Stuart Preston, whom the judge ruled had also bullied her. He was "aggressively competitive towards her" and treated her in a "dismissive and hostile manner". He deliberately set out to undermine her in what he saw as "Darwinian survival of the fittest", said the judge.

He accepted her evidence that before Mr Preston had started bullying her, he had told her he had met Ms Taylor and Ms Dixon on the staircase and heard one say to the other: "God, did you see her face? We nearly got her crying this time," and the other one replied: "Good - who does she think she is?"

After the ruling, Ms Green said: "This is the end of a long and painful battle. Instead of acknowledging the problem, the bank added to my anguish by conducting this litigation in an unnecessarily obstructive and hostile manner.

"In fighting my case I have become more aware of what a big problem bullying is for the City. Not only does Deutsche Bank have to put its house in order, but all City businesses will have to do more than pay lip service to this hidden menace."

To succeed in stress at work claims, employees have to prove that bosses knew or ought to have known that their workplace treatment could cause a psychiatric illness. Ms Green won her case on that count, but she also succeeded in an additional argument that the bullying amounted to harassment under the Protection from Harassment Act, brought in to deter stalkers.

Bullying claims became easier to win when the House of Lords ruled last month that employers were vicariously liable under the act for bullying by employees in the course of their work, even if management was unaware of it.

Ms Green, of Tower Hamlets, east London, was twice promoted but in November 2000 she had her first nervous breakdown and was admitted to hospital on suicide watch. She returned to work in March 2001, when her salary was increased to £45,000 with a bonus of £15,000. But she suffered a second breakdown the following October and never went back. Her employment was terminated in October 2003.

Mr Justice Owen said bullying in the department was a longstanding problem to which other employees had fallen victim. Other women gave evidence in court that they had been subjected to similar treatment in the department. But the bank's management was "weak and ineffectual", said the judge. "The managers collectively closed their eyes to what was going on, no doubt in the hope that the problem would go away."

But for her co-workers' treatment, said the judge, Ms Green would have continued to work as a company secretary in the City and had lost a demanding but highly rewarding lifetime career.

The bank must also pay interest on the £817,000 and legal costs, with extra costs because it did not respond to an offer from Ms Green to settle the case for £210,000.

Deutsche Bank was refused permission to appeal but can still apply to the court of appeal direct. A spokeswoman for the bank said: "Deutsche Bank respects the judgment of the court."

Note created Aug 4, 2006
Guardian Unlimited Business | | City worker bullied by 'mean and spiteful' colleagues wins £817,000 - business.guardian.co.uk/...

BP targets green consumers with carbon-offset scheme for drivers


BP targets green consumers with carbon-offset scheme for drivers
By James Daley
Published: 23 August 2006

BP will raise the stakes in the battle to be seen as the most environmentally friendly oil company today, launching a website which allows motorists to offset the carbon emissions from their car by donating money to the development of renewable energy sources.

The website - www.targetneutral.com - helps drivers to estimate the amount of carbon dioxide which their car emits each year, subsequently calculating how much they need to pay to neutralise the effects of their pollution.

The website will be not-for-profit, with all proceeds invested in a series of renewable energy projects across the globe.

BP says an average car, driven 10,000 miles a year, generates approximately four tonnes of carbon dioxide - enough to fill a hot air balloon. The cost of neutralising this on www.targetneutral.com would be about £20 a year. Although the scheme is open to all motorists, BP says it will make an additional contribution to scheme members who buy their petrol at BP stations and who use a Nectar card.

BP says the scheme has been developed in conjunction with a series of leading non-governmental organisations, and will be advised and monitored by an independent advisory and assurance panel chaired by Sir Jonathon Porritt, the founder of the sustainable development charity, Forum for the Future.

Peter Mather, the head of BP's UK operations, and a member of the advisory panel, said: "Targetneutral is a practical and straightforward step that BP is taking to enable drivers to help the environment. BP is taking the lead because our extensive research shows there is a huge consumer demand for such a scheme, but a general feeling from customers that they don't know where to start."

Sir Jonathon said: "The scientific consensus on climate change is overwhelming: we need to take radical action now if we are to avoid catastrophic consequences. We all have a responsibility to take up that challenge in our own lives, at home, work or as motorists. For this reason, Forum for the Future is very supportive of what BP is doing through targetneutral. The scheme should help raise awareness of the links between driving and climate change. Helping everyone get more 'carbon literate' is something all oil companies will need to commit to in the very near future."

Five projects will initially benefit from the scheme, including two in India - a biomass energy plant in Himachal Pradesh and a wind farm in Karnataka. Money will also go towards an animal waste management and methane-capture programme in Mexico.

The BP scheme is the latest in a string of carbon-offset projects to be launched in the UK but the first by a major oil company. BP is to provide all of the set-up funding for the company and will also pay any ongoing running costs.

Note created Aug 23, 2006
Independent Online Edition > Business News - news.independent.co.uk/...

Americans Seek Energy-Conscious Employers and Environmentally-Friendly Office Buildings


Americans Seek Energy-Conscious Employers and Environmentally-Friendly Office Buildings

GreenBiz.com, 26 July 2006 - When it comes to workplace benefits, an overwhelming percentage of U.S. employees are looking for a different kind of green: not just the green in their paycheck, but an environmentally-friendly place to work.

According to a new poll by Mortgage Lenders Network USA (MLN), 94% of Americans prefer to work in a building that is designed to be energy efficient and ecologically sound.

Women appear to be more environmentally-concerned than men about their workplace. The poll also revealed that 72% of working women declare a strong preference for green employers, vs. 64% of men. And, a larger percentage of Americans ages 45-54 would prefer to work in an eco-friendly building vs. their less eco-minded counterparts ages 25-34 (74% vs. 62%).

E.C. is the New P.C.

Not only does America's workforce want to be more "environmentally correct," but more employers are jumping on the green bandwagon. The U.S. Green Building Council has seen its Leadership in Energy and Environmental Design (LEED) certifications for newly-constructed green buildings jump in the past 3 years by 150%, from 167 to 417. The Council's LEED certification is the only national standard for developing high-performance, sustainable buildings.

The trend toward building green comes as no surprise to Jim Smith, senior director of real estate and facilities at MLN. He is spearheading construction efforts for MLN's $75 million eco-friendly headquarters with an eye toward earning LEED certification from the U.S. Green Building Council.

MLN's new headquarters, in Wallingford, Conn., will feature an employee cafeteria with healthy offerings such as herbs and vegetables grown on the premises, and food fuel zones: employee break areas stocked with complimentary snacks such as fruit from local orchards.

Yet, Smith says their green building strategy is about more than just keeping employees happy and healthy.

"MLN is looking beyond the common benefits of green buildings -- employee retention, fewer illnesses and increased productivity - and seeking to influence employees and customers to live and build green in order to increase environmental sustainability," said Smith. "Energy independence is the first step toward financial independence. A greater reliance on sustainable resources will help pave the way."

One example of MLN's drive toward energy efficiency is The Founder's Cottage at its new headquarters. This New England-style farmhouse will feature state-of-the-art technology, allowing it to produce as much energy as it uses through solar panels and hydraulic power.

Note created Jul 31, 2006
Americans Seek Energy-Conscious Employers and Environmentally-Friendly Office Buildings - www.wbcsd.org/...

India, UK climb E&Y's renewables ranking: India has become the world's third most attractive market for renewable energy investment


India, UK climb E&Y's renewables ranking

Environmental Finance, 27 July 2006 - India has become the world's third most attractive market for renewable energy investment, displacing Germany in the top three, according to Ernst & Young. The UK has also pushed ahead of Germany to fourth place, following the publication of the government's energy review this month.

"India's rise to third overall … has been precipitated by excellent national and regional government support for both foreign and local investment in renewable technologies," the consultancy says in its latest quarterly Renewable Energy Country Attractiveness Index. "Consequently, rapid growth is expected to continue in this market."

The report notes that installed renewables capacity in India – currently standing at 8GW – is now expected to double every five years, and is forecast to reach 20GW by 2012, twice the government's target.

Meanwhile, Jonathan Johns, a UK-based Ernst & Young partner, writes that the UK government's Energy Review has reversed a slide in the UK's attractiveness for renewable energy development.

He cites "a strong commitment to dealing with planning and grid issues" and "increased certainty of revenues". This certainty is boosted by planned reforms to the level of the renewables obligation, which requires electricity suppliers to source a rising percentage of their power from renewables, and by promised higher levels of support for offshore wind.

Meanwhile, Germany has sunk from third to fifth place, and is "facing a continuing slowdown in the domestic onshore market, despite good biomass and solar opportunities". This slowdown is a result of the declining availability of good wind sites, and strong turbine demand in the US leading to the export of German-built turbines.

Spain and the US remain in first and second place in the index.

Note created Jul 31, 2006
India, UK climb E&Y's renewables ranking - www.wbcsd.org/...

23.8.06

Electricity generation and carbon emissions – Are we ready for the financial impact?


Electricity generation and carbon emissions – Are we ready for the financial impact?
EC Newsdesk
15 Aug 06


Will emissions trading be enough?


Climate change policy uncertainty is a barrier to reducing greenhouse gas emissions from the electricity industry argue Rory Sullivan and William Blyth
Electricity generation accounts for approximately 40% of global greenhouse gas emissions.

The characteristics of power sector investments – capital-intensive, long-lived and involving technologies likely to be strongly impacted by future emissions controls – mean that uncertainties regarding the extent, timing and cost of any controls on emissions of greenhouse gases present significant risks to companies in the sector.

From a policy perspective, one of the key questions is whether and how companies in the sector respond to these uncertainties.

When electricity companies consider new investments, they generally use a discounted cash-flow model (comprising elements such as electricity prices, fuel prices, environmental charges, taxes, other fixed and variable operating costs) to derive an estimate of the ‘net present value’ (NPV) for the project.

If the NPV is positive, then the project should go ahead and, if not, then the project should not go ahead.

In situations of uncertainty, a project would not only need to achieve a positive NPV, but would also need to achieve an additional return on investment sufficient to exceed the value of waiting caused by the uncertainty.

Delay has consequences


In the specific case of electricity utilities, their responses to uncertainty could include delaying investment, delaying plant closure/replacement, giving greater preference to phased investment (e.g. preferring flexible/modular plant) or requiring greater project cash-flows in order to justify immediate investment (leading to higher prices).

In Europe, despite the introduction of the EU Emissions Trading Scheme, there are significant uncertainties around the future direction and ambition of climate change policy – in particular on the shape of the emissions trading scheme beyond 2012.

In response to this lack of visibility, electricity generators appear to be adopting a strategy of keeping all of their options open, by delaying new build and keeping old plant running for longer.

This is likely to result in greenhouse gas emissions remaining higher for longer than would otherwise be the case. If new generating capacity is required, electricity utilities are most likely to build gas-fired power stations as they represent the cheapest – and hence the lowest risk – option, although they may also consider building plant that is ready or suitable for carbon capture and storage to be retrofitted at a later date.

While carbon capture and storage is not commercially viable at current CO2 prices, the option of retrofitting it is seen as a future hedge against CO2 prices.

Even though the nature of the problem is clear, i.e. that policy uncertainty needs to be reduced, the actions required to reduce uncertainty are less obvious.

How political is cheap power?


Policy-makers are understandably concerned about the competitive implications of higher electricity prices, in particular given that it is unclear whether countries such as the United States, Australia, China, India and Brazil will support a binding, target-based climate change regime post-2012.

There are, however, a number of practical actions that can be taken by government to address the adverse impact of climate policy uncertainty.

Specifically, policy makers need to (a) make it clear that emissions trading is an integral part of the policy framework for responding to climate change; (b) clearly communicate the post-2012 ambition – including the establishment of clear national and international greenhouse gas emission targets for 2020; and (c) signal their willingness to provide public money to support action on climate change, at least over the short and medium-term.

Emissions trading not far enough


In relation to the last point, policy makers also need to recognise that the EU Emissions Trading Scheme is unlikely to stimulate significant investments in lower CO2 emitting forms of power generation.

They should understand that they may need to consider other policy instruments to sit alongside emissions trading.

These may include regulations relating to maximum emissions from different types of generating plant, or subsidies (e.g. for carbon capture and storage).

Institutional investors and companies also have a critical role to play. Perhaps the most important is to support public policy by communicating their support for a clear, long-term climate change policy framework – including emissions reduction targets – as an essential part of ensuring the delivery of climate policy goals in an economically efficient manner.

Companies and investors should signal that they accept that ‘economically efficient’ does not simply mean ‘no cost’ and that they are prepared to accept some financial impact as a necessary part of ensuring an effective policy response to climate change.


Dr Rory Sullivan is Head of Investor Responsibility at Insight Investment, the asset management arm of HBOS plc.
rory.sullivan@insightinvestment.com

Dr William Blyth is an Associate Fellow at Chatham House.
william.blyth@oxfordenergy.com

This article is based on a recent report "Climate Change Policy Uncertainty and the Electricity Industry: Implications and Unintended Consequences", published by Insight Investment and Chatham House in August 2006, and on ongoing work by the International Energy Agency (IEA) on this subject.

Useful links:

www.insightinvestment.com
www.iea.org
Note created Aug 21, 2006
Ethical Corporation: By Invitation - Electricity generation and carbon emissions – Are we ready for - www.ethicalcorp.com/...

Cola pesticide claims bubble up in India


Cola pesticide claims bubble up in India

By Jo Johnson in New Delhi

Published: August 5 2006 03:00 | Last updated: August 5 2006 03:00

When Scott Bayman, chief executive of General Electric in India, cracks open his first diet Coke at around 10am each day, it is a vote of faith in the ethical standards of the fellow US multinational that makes it.

"I am still drinking it," he says. "Frankly, I just don't believe a company like Coke would knowingly endanger its customers or its consumer franchise." Coca-Cola and PepsiCo now face a gargantuan public relations test in ensuring 1.1bn Indians agree.

The Indian government was last night facing calls for a ban on soft drinks made in India by Coca-Cola and PepsiCo in the wake of a scientific report alleging the syrupy drinks continue to contain abnormally high levels of pesticides, some carcinogenic.

The survey of 11 soft drink brands from 25 Coca-Cola and PepsiCo plants found pesticide residues that were on average 24 times the level tolerated under new standards which, however, have yet to come into force.

Both companies directed inquiries to the Indian Soft Drinks Manufacturers Association, which said in a statement: "Soft drinks manufactured in India comply with stringent international norms and applicable national regulations."

But Vijay Kumar Malhotra of the main opposition Bharatiya Janata party, which later staged a walkout over the issue, said: "Coke and Pepsi are playing with the lives of millions and we can't ignore such warnings any more. It is time to ban them."

The pressure on the two companies mounted yesterday with the Supreme Court demanding they provide details of the ingredients and chemical composition of their drinks - potentially jeopardising Coca-Cola's secret formula.

The court directed the two companies to file their replies within four weeks, the Press Trust of India news agency reported. The court also issued a notice to the federal government to report on the matter.

The $1.55bn (€1.21bn, £825m) soft drinks market in India is dominated by Coca-Cola, which has a 60 per cent share and owns local brands such as Thums Up, a strong, "masculine" cola, and the "lime 'n' lemoni" Limca. Pepsi has 38 per cent of the 500m case market.

The report, produced by the Centre for Science and the Environment, highlights how little progress India has made in implementing food standards in the three years since the NGO first drew attention to the pesticide content of locally made soft drinks. A parliamentary committee set up to investigate the CSE's claims in 2003 called for strict standards for carbonated beverages, but after two years of meetings and the finalisation of these norms in March, they have yet to be notified.

"This is a very serious regulatory issue at a time when India is seeking to become a global food processing powerhouse," said Sunita Narain, director of the CSE. "Its standard setting agencies must be able to set standards for even the most powerful." A cocktail of three to six pesticides was present in all samples, the CSE said. Among the pesticides identified were lindane, a known carcinogen, chlorpyrifos, a neurotoxin, and heptachlor, which has been banned in India.

Almost any product in India, from tap water to milk, contains traces of toxins due to overuse of pesticides by farmers. This seeps into local ground water, which is used in more than 80 per cent of soft drinks.

Note created Aug 7, 2006
FT.com / World / Asia-Pacific - Cola pesticide claims bubble up in India - www.ft.com/...

Food prices would soar in biofuels switch, says Unilever


Food prices would soar in biofuels switch, says Unilever
By Carl Mortished, International Business Editor


BRITAIN faces soaring food prices, a shortage of staple foods and declining public health if the Government pushes ahead with plans to promote the use of biofuels, the UK’s biggest food producer has given warning.

Unilever fears that Europe-wide plans for a huge increase in use of vegetable oils, such as rapeseed and palm oil, in the manufacture of road fuels will have dramatic consequences, driving up the cost of foods such as margarine and leading consumers to switch to less healthy animal fats.




Huge efforts are being made to promote biodiesel amid concern over the rising cost of oil and reliance on the Middle East for supplies. The European Commission wants to increase the proportion of biofuel used in road transport from current levels of 0.8 per cent to 5.75 per cent by 2010.

However, Alan Jope, Unilever vice-president, fears that the rush to convert food crops into transport fuel will have unintended consequences. He said: “The scale is dramatic. To meet current EU quotas would require between 50 and 80 per cent of rapeseed production. Ultimately, there could be supply shortages.”

The price of rapeseed, an important ingredient in margarine, has risen by between 20 and 30 per cent over the past year. Meanwhile, the price of palm oil, another edible oil widely used in food as well as in cosmetics, has risen by more than 20 per cent in the past two months on news that Malaysia and Indonesia plan to set aside 40 per cent of their palm oil crop to produce biodiesel.

That will have knock-on effects on food, Mr Jope said. Half the cost of producing a tub of margarine is the edible oils and the price of those commodities has risen by 30 per cent this year. Even more worrying is the long-term consequence of substitution in risks to cardiovascular health. For every 1 per cent rise in the price of margarine, there is a 1 per cent fall in consumption, Mr Jope said.

“The switch from healthy vegetable oils (to butter and animal fat) will have a dramatic impact on public health,” he said.

Government grants and subsidies for biofuels are also having unintended environmental consequences in the Amazon and South-East Asia, where rain forests are being burnt to clear land for biofuel crops, such as palm oil, and sugar cane, used to produce ethanol. Figures from the OECD show that Europe would need to convert more than 70 per cent of arable land in order to raise the proportion of biofuel used in road transport to 10 per cent.

Mr Jope said: “Superficially, it looks politically altruistic for a politician to say we are going to replace dwindling reserves of fossil fuels with renewable biofuels. We are now seeing the prospect of very material deforestation.”

Unilever is not opposed to biofuels in principle but wants policymakers to shift the focus to next-generation biofuel technologies that turn wood chips and straw into fuel. These have less effect on the food chain and are better in cutting CO2 output, Mr Jope said.



Note created Aug 7, 2006
Food prices would soar in biofuels switch, says Unilever - Industry sectors - Times Online - business.timesonline.co.uk/...

EU Parliament backs CO2 cap on air traffic


EU Parliament backs CO2 cap on air traffic

EurActiv.com, 5 July 2006 - MEPs have backed the idea of including aviation in the EU's cap-and-trade system for CO2 emissions and for ending tax exemptions on kerosene. The airline industry reacted furiously, saying the proposals totally ignore economic realities.

Background

The European Commission suggested including aviation in the EU's emissions trading scheme (ETS), in a Communication published on 27 September 2005. Under the proposal, a cap on CO2 would be set for all flights departing from the EU.

Air traffic is estimated to contribute to about 3.5% of the total share of human activities held responsible for climate change. This share is expected to grow to 5% by 2050 and threatens to undermine global warming mitigation efforts made in other industrial sectors.

Issues

The European Parliament on 4 July has voted by 439 in favour, 74 against and 102 abstentions in favour of measures to address the impact of aviation on the world climate and apply the 'polluter pays principle' to international flights.

The report, drafted by MEP Caroline Lucas (Greens/EFA, UK), is a non-binding one as there is no formal proposal on the table yet. But it sends a strong political message at a moment when the Commission is drafting a legislative proposal to include aviation in the EU emissions trading scheme, due before year end.

The Parliament suggested that aviation falls under a special pollution-cutting scheme, similar to the ETS but separate from it. In a first stage, a pilot phase would be launched, covering the period 2008-2012, which corresponds to the second trading period of the ETS. Then, when aviation is eventually incorporated into the wider ETS, special conditions would apply to ensure it does not distort the market to the detriment of less protected sectors. Special conditions could for example include a cap on the number of emissions rights the aviation sector is allowed to buy from other sectors as well as a requirement to reduce emissions without trading.

Other proposals in the report include:

  • the introduction of a kerosene tax on intra-EU flights (flights en route to non-EU destinations would be exempted)
  • a recognition that other tax exemptions enjoyed by air transport lead to "very unfair competition between aviation and other transport sectors". However, specific calls to end VAT tax exemptions, supported by the Greens, failed
However, there is little chance that these options will be considered by the Commission when it tables it legislative proposal later in the year. Indeed, the introduction of specific taxes on aviation has already been ruled out by the Commission as the unanimity rule means it has little chance of going past the EU Council of Ministers.

Positions

The Parliament's rapporteur on the dossier, Caroline Lucas MEP (Greens/EFA, UK), is leading the crusade to end what she sees as a preferential treatment for aviation within the transport sector. "Aviation is the fastest growing source of greenhouse gas emissions, with flights set to double by 2020, yet the sector continues to avoid regulation and enjoy distorting breaks," said Lucas.

And she believes that the non-CO2 impacts of aviation, such as water vapour condensation trails, should be tackled as well. "The total climate impacts of aviation are 2-4 times more damaging than those from CO2 alone and any legislation ignoring this would be short-sighted. Ideally, the non-CO2 impacts could be addressed by an emissions charge but, failing that, the use of multipliers on CO2 emissions in a future aviation emissions trading scheme is another viable alternative.

Airlines reacted angrily at the Parliament report, saying it "missed the opportunity to promote a realistic strategy" and instead opted for "the most restrictive and punitive measures possible".

Sylviane Lust, director of the International Air Carrier Association (IACA), said: "Any approach to aviation and the environment which calls for the simultaneous introduction of taxes on aviation fuel, VAT on airline tickets, environmental charges at airports and emissions trading scheme (ETS) totally ignores economic realities. Moreover the recommendation to set up a separate ETS scheme for aviation is totally unrealistic."

IACA says the measures supported by Parliament should undergo deeper analysis to determine what would be their consequences on the European economy, jobs and the general quality of life of European citizens.

The liberal democrats in the European Parliament ( ALDE ) adopted a more conciliatory tone than their fellow Green colleagues. "Our message is that airline operations can continue to expand, but only as fast as improvements in technology and better operating practices permit," said UK LibDem MEP Chris Davies. "We don't want to stop air travel. We simply want to ensure that its growth is not at the expense of future generations. Total carbon dioxide emissions must increase no further."

Holger Krahmer MEP , a German liberal of the FDP party (also a member of the ALDE ) criticised Ms Lucas' report for being "a good example of ecopopulism". Krahmer observes that the constant high prices of kerosene have already forced air transport companies to save fuel and therefore, reduce CO2 emissions. He says sensible measures to further cut fuel consumption could be achieved through other measures such as better management of flight routes.

On the eve of the Parliament's vote, the European Federation for Transport and Environment (T&E) , an environmental NGO, issued a report showing a steady rise in CO2 emissions from aviation over the last decade. The report, based on figures from the European Environment Agency (EEA), says CO2 emissions from international flights increased by 85% between 1990 and 2004, an average increase of 4.5% per year. It says the increase in emissions "cancels out almost one quarter of the reductions made over the same period by other sectors in Europe under the terms of the Kyoto protocol".

Jos Dings, director of T&E said, "Since Kyoto was signed, other sectors have been cutting emissions, while those from the gas-guzzling aviation sector have almost doubled. Meanwhile, governments have showered the sector with subsidies and tax breaks. It is high time Europe got its head out of the clouds, got the aviation sector in line with other polluters and started demanding emissions cuts."

Latest & next steps:

  • End 2006 : Commission to table a formal legislative proposal to integrate aviation in EU-ETS. It would have to be adopted by the European Parliament and member states at the EU Council of Ministers, a process which usually takes two to three years.
Links to EU official documents: Note created Aug 9, 2006
EU Parliament backs CO2 cap on air traffic - www.wbcsd.org/...

Environmentalism is no longer the province of the left. Conservative politicians and big business have both jumped on the bandwagon.

  MSNBC.com





Force of Nature
Environmentalism is no longer the province of the left. Conservative politicians and big business have both jumped on the bandwagon.
By Emily Flynn Vencat
Newsweek International

Aug. 14, 2006 issue - It seems like a hippie entrepreneur's dream come true: an ecostore with cash registers powered by rooftop wind turbines, skylights instead of light bulbs and photovoltaic solar cells on the roof to help power the bakery's oven. It's so environmentally friendly that even the toilet water is collected from raindrops outside. Only this is not some pipe dream of a fringe activist. The vision comes from Tesco, the world's third largest retailer. Tesco is pumping £100 million into environmental technologies to reduce the amount of energy they use by 50 percent, compared with 2000 levels, by 2010. In addition to building 80 new ecostores across Britain over the next year—the greenest of which will be constructed of recycled materials and will burn food waste for electricity—they're also making small changes that could have big effects. They're paying customers not to use plastic bags, which they expect will cut consumption by 25 percent in two years.

Tesco is not the only commercial firm that has taken an interest in saving the planet, and making a killing besides. Renewable Energy Corp., a Norwegian solar-energy company, had the world's largest-ever renewable energy IPO in May. It was 15 times oversubscribed and raised more than $1 billion, valuing REC at nearly $7 billion. You wouldn't mistake REC's CEO Erik Thorsen for a New Age Joni Mitchell. "I don't have anything against helping the environment," says Thorsen. "But the main driver for us is profit."

Something weird is happening in the once marginal world of environmentalism. The green cause is no longer the preserve of woolly-minded liberals and fringe activists. Its tenets are being actively pursued by business leaders, stockholders and investment managers. In the popular mind-set, natural disasters such as New Orleans's Hurricane Katrina, floods in Eastern Europe and swirling desert sands in Beijing are now linked to a change in climate that threatens our way of life and our grandchildrens' future. Europe's second record-breaking heat wave in three years—with the hottest July in U.K. history and more than 40 dead in France and Spain—has only cemented this relationship. Environmental concerns have grown so widespread that no politician can ignore them.

Conservative politicians once skeptical of the green movement have been reacting to the pressure. Last week, California's Republican Gov. Arnold Schwarzenegger met with British Labour Prime Minister Tony Blair to promote the idea of a transatlantic carbon-emissions market. He also wants to reduce his state's greenhouse-gas emissions to 80 percent below 1990 levels by 2050. David Cameron, the new leader of Britain's Conservative Party whose revamped slogan is "Vote Blue, Go Green," has visited the Arctic to see firsthand the effects of global warming. He cycles to work, and is redesigning his Edwardian house in London to include a wind turbine and solar panels, which will cut energy use by 30 percent. In Germany, the Greens and the conservatives recently agreed to join forces to run the city government of Frankfurt, the first such coalition in the country's history. President Jacques Chirac of France is promoting a new "solidarity" levy to be paid by all air travelers. John Gummer, Britain's secretary for the Environment under the last Conservative government, likens the green issue to defense policy before the fall of the Berlin wall: "People expect parties to have a clear environmental policy, [otherwise] people won't even consider voting for them."

The most startling turnaround, however, is among business leaders. Corporations are giving themselves green makeovers to improve efficiency, save money and look more attractive to investors and the public. According to a recent report from the Climate Group, an international environmental charity, 43 multinationals—including Bayer, BT and DuPont—saved a combined $11.6 billion last year by improving energy efficiency, reducing waste output and harnessing solar power. General Electric's Ecoimagination campaign to cut carbon emissions, partly by selling low-emissions products ranging from power plants to fluorescent light bulbs, raked in $10.1 billion last year, up from $6.2 billion in 2004. Their slogan: "Green is green," as in the color of American dollar bills.

Fund managers and corporate developers, too, are beginning to take into account the environmental viability of the companies they invest in. Venture capitalists are investing in green businesses because they believe it's a growth opportunity. "Five years ago, the environment was seen as a preoccupation of the ethically minded. No one really took you that seriously," says Tom Whitehouse, CEO of Carbon International, an environmental consultancy. "Today, the environment is totally mainstream. We're operating in a different paradigm."

Like politicians, executives see which way the wind is blowing. To meet the Kyoto targets, governments have set limits on industrial greenhouse-gas emissions that affect the balance sheet. The European Emission Trading Scheme, launched across Europe's 25 member states last year, allocates "carbon credits" to companies, which they can either use or trade for cash on the open market, like any other commodity. So far, credits for 880 million tons of carbon, worth more than €17 billion, have changed hands. Even in the United States, where carbon cuts are voluntary, many companies are signing on anyway, either in anticipation of future controls or to keep increasingly ecoconscious customers at the tills. In Japan, Sony announced last month that it will lower carbon emissions by 7 percent from 2000 levels by 2010. Britain-based HSBC became the world's first bank to go carbon neutral late last year, and is now turning its 11,000 buildings in 76 countries worldwide into models of energy efficiency. "Our customers have told us that they decide where they shop based on whether the business is a good neighbor," says David North, Tesco's community and government director. "Being responsible on the environment is a growing driver of customer choice."

Investment analysts are starting to see the environmental awareness of managers as a barometer of the likely long-term success of their companies. Green policies, they say, tend to indicate hands-on management, high consumer confidence and good corporate governance. HSBC won't do deals with companies on projects, like oil pipelines through Russia, that don't measure up to their environmental, social and governance standards—a bar HSBC has been raising progressively higher since first publishing its Environmental Risk Standards in 2002. The world's two largest insurance companies, Swiss Re and Munich Re, are now taking companies' policies on climate change into consideration when determining risk. In Japan, about 800 companies annually publish reports explaining how they plan to cut carbon emissions and make their products and factories greener. "We believe that operating in a sustainable fashion is a proxy for good management practices overall," says Chris Walker, head of sustainable business development at Swiss Re. "They're the type of companies we're more comfortable doing business with."

Multinationals are investing tens of billions of dollars in proving that they're that type. Last month, General Electric and British Petroleum signed a $10 billion deal to develop hydrogen power plants that will capture carbon and bury it underground so it doesn't contribute to global warming. Goldman Sachs has invested more than $1 billion in renewable energy sources, including biofuels, like ethanol, and wind in the last 12 months. PowerLight and GE are currently building the world's largest solar plant in Portugal to the tune of $75 million. Shuichiro Tanaka, the general manager of Japan's Daiwa Securities Co. investment trust department, says, "In the past, companies regarded dealing with environmental issues as a cost. Today they see it as a business opportunity."

Markets are also beginning to recognize that companies that don't do right by Mother Nature may have more volatile stock prices. Goldman Sachs's ESG (Environmental, Social and Governance) Index now ranks the world's largest companies based on how environmentally friendly their operations are because, says Sarah Forrest, head of ESG Research at Goldman, "environmental issues do influence stock prices." Signatories to the United Nation's new Principles for Responsible Investing include hundreds of major investors worth $4 trillion in assets—10 percent of global capital.

All of these developments are being scrutinized carefully by venture capitalists, some of them the same ones who bankrolled the dot-com boom of the 1990s and now see alternative forms of energy as the Next Big Thing. Vinod Khosla, the Silicon Valley venture capitalist who got in big and early with Google and Amazon, is now betting $50 million of his dot-com cash on next-generation ethanol. While Khosla is impressed by the fuel on environmental grounds, he says he's driven mainly by investment logic. "Ethanol's a great investment because it's [going to be] cheaper than gasoline," he says. "End of story."

Venture-capital investment in renewable-energy companies was up 36 percent last year to a record $739 million. The WilderHill Clean Energy Index, which charts 40 alternative-energy firms, has risen 48 percent since its 2004 debut. The world's largest wind-turbine company, India's Suzlon Energy, was 28 times oversubscribed when it launched for $340 million at the end of last year. Chinese solar company Suntech Power raised $400 million in December; its share price has since shot up 50 percent. The largest venture-capital-backed IPO in Europe last year was of German renewable-energy company Q-Cells, which raised $400 million in October.

Despite these prominent deals, the share of venture capital going to alternative energy is still tiny—less than 1 percent of the $22 billion invested last year in the United States, where the lion's share of the world's venture capital is doled out. One reason is that venture capitalists tend to be biased in favor of companies that build on existing technologies rather than ones that need to construct infrastructure from scratch. Even the gods must play by these rules: to indulge his ethanol enthusiasm, Khosla had to use his own cash rather than that of his old firm.

The venture capitalists themselves place the blame on ongoing uncertainty about how governments will treat alternative fuels. Every major country regulates energy transmission and use, in effect elevating some technologies and penalizing others. The United States, for example, subsidizes ethanol producers but refuses to adopt caps on greenhouse gases or to establish a regulated framework for trading carbon credits, both steps that venture capitalists say would take a lot of the fear factor out of investing in clean energy.

Passing environmental legislation also requires getting past a powerful anti-regulation lobby, which argues that Kyoto-like targets put companies in the developed world at a disadvantage to unregulated ones in the developing world. "We don't think it's sensible to become the greenest country on earth when we might go bust doing it," says Mark Swift, a spokesperson for Britain's Manufacturer's Organization.

Still, more than three decades after Joni Mitchell sang "They paved paradise and put up a parking lot," environmentalists and big business now seem largely to be working in tandem. Earlier this year, the leaders of 14 of Britain's top companies, including the Shell Group and Vodafone, even wrote to Blair urging him to set clear greenhouse emissions reduction targets for as far into the future as 2025, well past the 2012 Kyoto deadline. Although profits are the main driver, many execs privately welcome the sea change that has allowed them to do the right thing by the environment. The joint head of HSBC's environmental action plan, Francis Sullivan, stresses "financial fundamentals" when explaining why his company is planting trees to offset its carbon output and building banks that use rainwater and solar power instead of oil and coal. But he's also concerned about there being enough green spaces for his two daughters, who bug him to turn off the lights when he leaves a room so he doesn't waste energy. Making money is great. And if you can save the world at the same time, so much the better.

With John Sparks in New York, Karla Adam in London and Akiko Kashiwagi in Tokyo

Note created Aug 9, 2006
How Big Business Is Becoming Pro-Environment - Newsweek: International Editions - MSNBC.com - msnbc.msn.com/...

Tesco 'breaching planning laws': Supermarket chain Tesco is breaching planning conditions on some of its stores, a BBC investigation has found

Tesco 'breaching planning laws'


One store was 20% bigger than planners expected


Supermarket chain Tesco is breaching planning conditions on some of its stores, a BBC investigation has found.

One store opened for business in 2004, only for planning officers to discover it was 20% over the planned size.

And a pile of waste from the building of a Buckinghamshire store remains in an Area of Outstanding Natural Beauty.

Tesco accepted it made a mistake in the first case and worked with the council to find a solution and was trying to quickly resolve the second case.

The store which was over the planned size opened in 2004 is in Portwood, near Stockport in Greater Manchester.

It is still open for business and is said to be turning over £1m a week.

The company is currently filing a new planning application.



It feels hypocritical that they can dump something the scale of this

Ruth Marshall
Resident


Face the Facts website

Last year during the building of a new Tesco superstore in Gerrards Cross in Buckinghamshire, building works collapsed on to a main railway commuter line.

At the time Network Rail said Tesco and its contractors removed more than 25,000 tonnes of earth and some 60 metres of tunnel structure.

However, 27,000 tonnes of waste from that collapse remains, and it is situated in an Area of Outstanding Natural Beauty.

Ruth Marshall, who lives near the waste, says she now has the "Pyrenees" as a new neighbour.

It has been there a year, despite an order from the council, because of a continuing challenge from Tesco's contractor.

'Public face'

Ms Marshall said: "There is the public face of Tesco, which is very much the caring, sharing, friendly, family place - yet it feels hypocritical that they can dump something the scale of this - this lump here is kind of out of sight, out of mind.

"The only people that see it are us, and the only other people that see it are people walking the Chiltern footpaths and people walk past and say: 'How can that be there this is an area of Outstanding Natural Beauty.'"

John Waite, who investigated the supermarket for Radio 4's Face the Facts, said Tesco "stand accused of dragging out the planning process, challenging enforcement orders, manipulating the planning laws, bending them, if you like, and breaking them on occasion."



We work hard to put forward proposals that reflect peoples' concerns and are acceptable locally

Tesco spokeswoman

Tesco said it worked with "hundreds of councils around the UK to bring investment, jobs and lower prices to communities".

A spokeswoman said: "Local authorities control the planning process, not Tesco and it is a democratic and tough regime. We work hard to put forward proposals that reflect peoples' concerns and are acceptable locally.

"We don't always get things right, as was the case in Stockport, but we have worked with the council there to find a solution.

"At Gerrards Cross, our contractor had to move the material quickly and safely to ensure the tunnel could reopen and we are now working with them to get this situation resolved as soon as possible."

Tesco is Britain's biggest retailer and has a 30% share of the UK's supermarket sector.

The firm, which saw profits reach £2.25bn in the past year, has increasingly branched out into non-food goods, such as electrical goods, music and clothes.


Note created Aug 21, 2006
BBC NEWS | UK | Tesco 'breaching planning laws' - news.bbc.co.uk/...

Azerbaijan and oil: Too much of a good thing


Azerbaijan and oil

Too much of a good thing

Aug 17th 2006 | BAKU
From The Economist print edition



A case study in the perils of being a petro-state

THE beaches near Baku are popular weekend spots. But their view of the Caspian is spoiled by a rusty oil platform towed close to the shore years ago. By contrast, an hour's drive south is the gleaming Sangachal terminal, the starting-point of the new $3.9 billion Baku-Tbilisi-Ceyhan (BTC) oil pipeline.

The old and the new, the past and the future, are never far apart in Azerbaijan, which 100 years ago was briefly the world's largest oil producer. Now, after 15 years of independence, Azerbaijan is seeing another boom. By 2010, oil production is expected to triple, to 1.3m barrels a day, and gas output to quadruple, to 28 billion cubic metres a year. The first oil was delivered through the BTC pipeline in June. A Baku-Tbilisi-Erzurum gas pipeline will open later this year. If oil prices average $50 per barrel (they are now over $70), these two will bring a massive $140 billion into Azerbaijan's state coffers over the next 20 years, claims President Ilham Aliev.

Such a gushing of money ought to be a blessing for this impoverished country. It has just 8m people, but that includes some 800,000 refugees left from the war with Armenia over Nagorno-Karabakh in the early 1990s. Yet few oil-rich countries have avoided the triple threats of corruption, competitive rent-seeking or “Dutch disease”—in which, thanks to exchange-rate appreciation, oil production crowds out other economic activity.

Azerbaijan is, according to Transparency International, one of the most corrupt places in the world. Under Mr Aliev, it is a thinly disguised autocracy. Yet it has taken some steps. A national oil fund, set up in 1999, holds some $1.6 billion. Azerbaijan has also signed up to the Extractive Industries Transparency Initiative (EITI), an anti-corruption scheme established by Britain's Tony Blair in 2002. Oil companies report payments to the oil fund, which publishes full details. An independent auditor checks the fund. “I think it has worked very well,” says David Woodward, associate president of BP Azerbaijan, the biggest foreign investor in the oil industry.

The problem is that, even if revenues are well-monitored, spending is not—since it is not covered by the EITI. Observers in Baku say the government is already spending too much money, too quickly and with too little oversight (needed to stop such things as the awarding of contracts to close relatives). Inflation has risen and the currency, the manat, has appreciated, symptoms of a possible outbreak of Dutch disease.

The model that Azerbaijan, like other oil producers, aspires to is that of Norway, which has built a huge stabilisation fund without distorting its economy. Even Russia's economic management has been better than some critics feared. But it would be miraculous if a poor country, under intense social pressure, managed a similar feat. The risk for Azerbaijanis, as for Venezuelans or Nigerians, is that the oil bonanza will end up hurting the people it ought to help.

Note created Aug 21, 2006
Economist.com | Articles by Subject | Azerbaijan and oil - www.economist.com/...

M&S sees big growth in healthy food range


M&S sees big growth in healthy food range

By Elizabeth Rigby, Retail Correspondent

Published: August 7 2006 03:00 | Last updated: August 7 2006 03:00

Marks and Spencer expects its "Eat Well" food range, which makes up a quarter of all its products, to account for 40 per cent of total food sales within six months, reflecting the strong growth in customers wanting to buy healthier foods.

Its range of nutritionally balanced products, lower in salt and fat, is growing at two and a half times the rate of the chain's overall food business two years after launch and now accounts for 30 per cent of sales.

"The healthy food element [of our grocery range] is about two years ahead of where we thought it would be," said Guy Farrant, director of M&S food.

Meanwhile, other chains tapping into healthy eating are also seeing sales growth, with J. Sainsbury, the UK's third largest chain, enjoying sales increases of 17 per cent in its organic ranges, compared with a 5.7 per cent increase in overall store sales the first quarter. In the past two weeks, it has also launched an organic box scheme to tap into the demand for organic food.

The changing shopping patterns at the likes of M&S and Sainsbury reflect the growing recognition among the population over the dangers of an unhealthy diet.

Tony Blair last month warned that the NHS would not be able to "keep pace with the state of the country's health" amid the rise in obesity, diabetes and heart disease.

The prime minister has also warned the food industry that if if fails to come up with clear food labelling guidelines, the government will impose its own system.

The food industry is making a more concerted effort to come up with a common scheme after some retailers, such as Tesco and M&S, refused to adopt the Food Standard Agency's "traffic light" scheme and instead opted to use guideline daily amounts on packs.

Food companies and retailers have since agreed to allow independent researchers to assess the effectiveness of the respective schemes and recommend an industry standard for widespread adoption within the next 18 months.

Note created Aug 7, 2006
FT.com / Home UK / UK - M&S sees big growth in healthy food range - www.ft.com/...

BP employees issued early warning of Prudhoe corrosion


BP employees issued early warning of Prudhoe corrosion

By Sheila McNulty in Houston

Published: August 9 2006 03:00 | Last updated: August 9 2006 03:00

BP's board and London-based executives were informed of widespread corrosion at the UK oil giant's Alaska field two years before the company was forced to shut it down this week, citing "unexpectedly severe corrosion".

On May 22 2004, Chuck Hamel, an advocate for BP workers in Alaska, took the charges directly to Walter E. Massey, chairman of the environment committee of BP's non-executive board.

In the letter, Mr Hamel told Mr Massey that in the previous four years BP employees and contract workers had brought to him concerns about safety, health and threats to the environment at Prudhoe Bay, Alaska.

"They seek to see the corrosion problem addressed and corrective action undertaken without further delay and before any of their colleagues at Prudhoe are harmed," he wrote in the letter, a copy of which was given to the Financial Times at the time.

"I believe their concerns mirror those of your Environment Committee, London upper management, BP shareholders and the US public interests,'' Mr Hamel said.

Mr Hamel warned Mr Massey that, as a board member, he owed it to shareholders to investigate. "I believe that your committee will determine that these experts are correct and order London to institute immediate remedial action before public disclosure is required and prior to public exposure by the federal regulators,'' Mr Hamel said.

"However, intimidation and harassment at Prudhoe has effectively prevented the truth from reaching London upper management and your committee.''

Mr Hamel told Mr Massey he would facilitate interviews with BP engineers and corrosion experts if his committee provided assurances they would not suffer retaliation by BP.

On July 27 2004, Mr Massey wrote to Mr Hamel urging him to provide BP management "sufficient specificity" but without offering the requested protection.

Workers told Mr Hamel that Vinson Elkins, BP's Houston lawyer, went to Alaska with questions that seemed aimed more at identifying whistleblowers than uncovering corrosion.

Mr Massey referred questions by the FT at the time to BP, which said corrosion was under control. Ronnie Chappell, BP spokesman, said yesterday BP had looked into the concerns raised by Mr Hamel. He said spending on corrosion inspection and prevention had increased 80 per cent since 2000 and would reach $72m in Alaska this year.

Mr Hamel had told Mr Massey he had first taken the charges to Greg Coleman, then BP vice-president of health, safety and environment, who told him to take the complaints to the state regulators unless he was prepared to identify his informants.

Note created Aug 9, 2006
FT.com / Home UK / UK - BP employees issued early warning of Prudhoe corrosion - www.ft.com/...

Barclays ’ corporate responsibility report 2005 - Steady as she goes


Barclays’ corporate responsibility report 2005 - Steady as she goes
Tobias Webb, Editor
31 Jul 06


Making progress on responsible business reporting


Juliet Hepker and Tobias Webb find much evidence of Barclays’ responsible banking ambitions. But as Ethical Corporation has found in previous reviews, Barclays could be more transparent on difficult issues
In the foreword to Barclays’ most recent CSR report, group chief executive John Varley writes that he was surprised when he heard that the banking sector is regarded by many as a bit of a laggard on corporate responsibility.

He should not have been. In general big banks have long hidden behind traditional tendencies towards parsimonious disclosure on responsible business practices.

When the UK’s Daily Telegraph newspaper, not known for its ethical business coverage, is pointing this out, as Varley notes, you can be pretty sure the rest of the responsible business world already knows.

In the last three years in particular, though, the sector's poor reputation has been improving.

The much-discussed Equator Principles, which govern social and environmental standards attached to project finance, now represent some 85% of such finance.

The Equator Principles were recently relaunched to make them more nuanced.

The International Finance Corporation also tightened up its own social and environmental standards in 2006, preparations for which spurred the Equator Banks to voluntarily upgrade their standards.

Bigger banks like ABN AMRO, Barclays, HSBC and Citigroup have become leaders in their sector, winning awards from the Financial Times and waking up to a whole swathe of global issues – and making some efforts to tackle them.

An issues-based approach


In its recently published seventh corporate responsibility report, Barclays responds to earlier stakeholder feedback by adopting an issues-based approach that focuses clearly on some of the most material concerns it feels it faces when it comes to responsible banking.

Under this umbrella of responsible banking, these include financial inclusion, responsible lending, the financing of large-scale development projects, as well as carbon trading. A separate broad sub-section covers the bank’s more direct impacts on employees, the environment and the community.

Barclays has opted to bundle a host of other important issues that fall outside these categories into a section entitled, “Where we stand on key issues” – for example, governance, human rights and the supply chain.

This is helpful but somewhat disjointed. Of interest is what these key issues mean in practice, and how policy is applied in the course of day-to-day activities.

Future reports might also take into account the bank’s economic impact, at a minimum including estimated payments to key stakeholder groups (shareholders, government, employees etc). The bank's tax payments are mentioned, but the terminology used is somewhat baffling.

Barclays reports against a selection of GRI indicators but does not make use of the financial services sector supplement or explain why. Not that GRI is a reporting panacea, but companies ought to offer a statement on the basis of “comply or explain” with regard to GRI.

Corporate governance left out


On the subject of of “comply or explain”, for a leading bank, a total omission of discussion about corporate governance in the report is puzzling. The information is made available in the annual report and accounts. However, since corporate governance is such an essential starting point for good CSR practice in future Barclays ought to consider devoting serious space to governance issues. In particular the role of non-executive and executive directors in driving CSR strategy needs to be addressed.

As a company that sees itself as global, and may one day soon (once Asia and Latin America are cracked) be just that, future omission of governance information will serve to re-inforce the views of activists who claim CSR is detached from core business and purpose in many companies.

Return to South Africa


Of particular interest in this year’s report is the coverage of Barclays’ decision announced in May 2005 to return to South Africa, 19 years after it left the country. At the time anti-apartheid activists claimed victory after a concerted campaign to force the bank out.

Barclays’ £2.6 billion purchase of a majority stake in Absa, South Africa's largest retail bank, is the biggest international deal Barclays has ever done and means that some 25% of the bank’s employees are now based there.

The deal is also the largest foreign direct investment in the history of post-apartheid South Africa – a vote of confidence that many hope will encourage further investment. Lack of reporting on Absa in the 2005 corporate responsibility report, though, is a mistake.

Accepting that the acquisition is a recent one, there ought to be at least some disclosure on the upcoming challenge of embedding a unified ethics approach across the “new”, truly multi-national Barclays.

Unsurprisingly, the move has not been universally welcomed. Barclays is among 22 international companies facing a legal action brought by a South African activist group for the companies’ alleged support of the apartheid regime. The court hearing began in New York earlier this year. It is a pity that Barclays’ report does not directly address such opposition and other concerns arising from the takeover.

However, Barclays does acknowledge the need to “set standards” and “lead by example” in the African context. There is evidence of this in the bank’s bold approach to key issues, particularly financial inclusion and HIV/Aids. Barclays is providing free anti-retroviral treatment to those employees who are HIV-positive, as well as up to three members of their family.

Putting principle into practice


Barclays – the third largest project lender in the world – has attracted much praise for its role in drafting the original and updated Equator Principles. More than 30 banks have adopted the new, tighter Equator Principles over the last month. Barclays made progress towards embedding the Equator Principles into mainstream processes by training over 350 staff in 2005.

The report goes further than most in showing the impact of the Principles by disclosing the number of project finance deals, by sector and category, accepted or rejected. While client confidentiality rules out complete transparency, it is encouraging that Barclays is taking the lead in developing a series of anonymous case-studies in the report.

It is a pity, however, that Barclays has opted not to respond to criticism of its association with specific projects, such as the $524 million Trans-Thai Malaysian pipeline which is the subject of a lawsuit.

NGOs, including Friends of the Earth, allege the environmental impact of the pipeline threatens the livelihood of local villagers. The case studies in the current 2005 Barclays report are a little vague and there are no web links to further information.

Human rights


As with the Equator Principles, Barclays is a leader in the banking sector in terms of its support for human rights.

Notably, the bank was a founding member of the Business Leaders Initiative on Human Rights, intended in part to “road test” the UN Norms on Business and Human Rights.

Barclays also recently adopted its own Statement on Human Rights which explicitly supports the Universal Declaration of Human Rights. However, as a WWF-Bank Track report published this year points out, the policy is somewhat “vague and aspirational”. Barclays might consider in future developing clear guidance to support policy implementation.

Performance in other areas


Barclays performs particularly well in the areas of workplace diversity and the environment. It was the first UK bank to set up a dedicated carbon trading desk, and has committed itself to carbon neutrality in the UK (although not internationally).

Much more could be done, though, to offer green financial products such as mortgages. As Toyota has shown, sometimes companies have to lead the market.

With regards to financial inclusion, the report focuses mainly on successful efforts in the UK – all the bank’s targets relate to activity here. An overview of Barclays’ involvement in schemes in less-developed countries would also be of interest.

Barclays’ report provides evidence of its efforts to be a leader in responsible banking but there remains room for improvement (as no doubt the bank would recognise).

Stakeholder voices needed


Notably, there is little evidence of stakeholder engagement. Aside from an independent assurance statement, much more coherent and challenging than past statements, external voices are not captured in the report.

And for a company with such a high proportion of female employees (over 60%) little is said about how the company plans to integrate more women executives into senior positions.

Anglo-Saxon companies are notoriously poor reporters on human capital, and in its next report Barclays might consider taking a lead in this area.

A more focused discussion of Barclays’ vision of responsible banking, and specific risks and challenges in different operational / geographic areas would also be of interest.

Finally, consideration might also be given to how the potential value of the report itself as a communication and management tool is maximised.

All in all, Barclays remains ahead of the pack and its reporting improves year on year, while other banks, particularly in the US, often remain not far off the starting grid.

As a result, peer benchmarking beyond HSBC, Citigroup, and few others, remains of limited use for Barclays.

Better to look to other leading companies outside their sector, such as top firms in the Business in the Community Corporate Responsibility Index for comparative inspiration for the next report, particularly with regard to integrating corporate responsibility issues into product development and marketing.

For that must be the Holy Grail for banks, along with everyone else.

Note created Aug 4, 2006
Ethical Corporation: Report Reviews - Barclays’ corporate responsibility report 2005 - Steady as she - www.ethicalcorp.com/...

MPs call for steeper air taxes to reduce emissions


MPs call for steeper air taxes to reduce emissions

By Ben Hall,Political Correspondent

Published: August 7 2006 03:00 | Last updated: August 7 2006 03:00

International air passengers should face a raft of new taxes, a committee of MPs urges on Monday, issuing a fresh attack on government for failing to reduce carbon emissions from transport.

The environmental audit committee urges the Department for Transport to "urgently accelerate its efforts" to curb greenhouse gases, setting its sight on international air travel which now produces twice as much carbon dioxide as in 1990.

The government and airline industry were proving "intransigent" towards reducing emissions from overseas flights.

The MPs seek higher air passenger duty, bilateral agreements between European Union countries for new air taxes - the proceeds of which could be ploughed into new high-speed rail links - and a compulsory charge on all airline tickets to pay for offsetting the carbon produced by the flight.

They also demand a rethink of airport expansion plans and call for air passenger duty to be levied per aircraft rather than per person to promote fuller loads and greater efficiency.

Despite the government's support for including airlines in the EU's emissions trading scheme, the committee warns that such a step is years away.

Elsewhere, the MPs call for an increase in road tax for "gas-guzzling" cars and a possible reduction in the 70mph limit on motorways.

While overall carbon emissions declined by 5.6 per cent between 1990 and 2004, emissions from road transport rose by 10 per cent and from international flights by 111 per cent.

Along with international flights and shipping from UK ports, transport accounts for a growing share of carbon emissions, up from 27 per cent in 1990 to 33 per cent in 2004.

International air travel's share of emissions is set to grow fivefold, while other industrial sectors are all being asked to account for proportionately less.

The MPs point out that emissions from the increase in road traffic in the 20 years to 2010 outstrip the combined reductions under transport department programmes.

Tim Yeo, the committee's Conservative chairman, accused the departmentof adopting a "fatalistic attitude which sees carbon-intensive activities and economic growth as going hand in hand".

Note created Aug 7, 2006
FT.com / World / UK - MPs call for steeper air taxes to reduce emissions - www.ft.com/...

BP seeks to head off US regulatory attack with safety and ethics review


BP seeks to head off US regulatory attack with safety and ethics review
By Stephen Foley in New York
Published: 10 August 2006

BP is to conduct a wide-scale review of the safety and ethics of its North American operations, to try to head off criticism over its record in the US and prevent any more environmental and safety disasters.

It is setting up an internal task force to make flying visits to the company's operations and to report back on whether proper safety procedures are being followed. The plan comes as BP faces questions over how pipelines at its vital Alaskan oilfield, Prudhoe Bay, became so corroded that it has been forced to shut down the whole operation. It is likely to decide tomorrow if it can keep half the field open.

The crisis follows an explosion at a BP refinery in Texas last year in which 15 employees died, and on charges this year against the company's US energy trading division, where workers are accused of manipulating the propane market.

The decision to launch a safety and ethics review was taken by Bob Malone, who was appointed head of BP in North America at the start of the year. It implicitly acknowledges how the string of disasters has tarnished BP's reputation in the US, and will form part of the company's defence if politicians and regulators step up their attacks on the company.

The FBI is talking to employees and former employees in Alaska who claim BP ignored their warnings about a poor inspection regime for the pipelines at Prudhoe Bay. The criminal investigation and possible action by regulators was sparked when 200,000 gallons of oil leaked from the corroded pipeline in March, Alaska's worst-ever on-land spill. And last weekend, BP said it would shut Prudhoe Bay to allow 16 miles of pipelines to be replaced.

Charles Hamel, a former oil broker who acted as a go-between for whistleblowers on BP's staff in Alaska, said: "Prudhoe Bay is an ageing field, BP knows it needs maintenance. They deferred the maintenance. They are cheap and they are playing Russian roulette."

Mr Malone said BP's problems in the US were isolated, rather than evidence of a wider malaise. However, he has appointed a new vice-president of compliance and ethics, Rick Cape, to lead a review of safety and compliance issues.

"We are staffing up with world-class operational integrity experts who will report directly to me," Mr Malone said, "and with compliance and ethics staff, whose charge will be to visit facilities and assure me of the safety and integrity of our operations."

Note created Aug 10, 2006
Independent Online Edition > Business News - news.independent.co.uk/...

BAT shredded evidence helpful to dying smokers' claims, judge says


BAT shredded evidence helpful to dying smokers' claims, judge says

·
Company plans appeal against 'vile' US findings
·
Australian in-house lawyer turned whistleblower

Simon Bowers
Tuesday August 22, 2006

The Guardian

A man smoking a cigarette. Photograph: Graham Turner/Guardian
 


British American Tobacco lawyers are planning to appeal against what the company called "vile" findings against it - particularly in relation to its systematic shredding of legally sensitive documents - contained in a 1,700-page judicial opinion delivered at the end of one of the largest civil trials ever heard in the US.

Management at BAT, one of five tobacco majors against which a racketeering claim was pursued in the US, is understood to be furious at some of Judge Gladys Kessler's views, published last week. They include her opinion about the firm's worldwide attempts to shred or hide sensitive documents, which could be helpful to dying smokers looking to sue.


Judge Kessler said: "Members of BAT group ... destroyed documents, routed them from one country or BAT facility to another, erased a useful litigation database as well as the fact that documents it contained had ever existed, as soon as the pre-existing judicial hold was lifted, and constantly exhorted their many employees to avoid putting anything in writing.

"All these activities were taken for one overriding purpose: to prevent disclosure of evidence in litigation."

A BAT spokesman said: "This is one judge in one court and undoubtedly it will end up on appeal."

BAT's worldwide document destruction policy came to light accidentally during a case in Australia brought four years ago by a dying smoker, Rolah McCabe, who contracted lung cancer after almost 40 years of smoking cigarettes made by BAT companies.

A critical memo written in 1990 by Andrew Foyle, then a partner at the London law firm Lovells and an adviser to BAT, was ordered to be disclosed during the trial. It revealed elements of BAT's internationally coordinated document management policy. The judge ruled that BAT's Australian subsidiary had "deliberately obliterated" documents, depriving Ms McCabe of the right to a fair trial.

BAT successfully appealed the ruling, and the Australian appeal court agreed the trial judge had mistakenly read something "sinister" into the Foyle memo, which should never have been disclosed to Ms McCabe's lawyers. The court also overturned a A$750,000 (£285,000) damages award to Ms McCabe.

Despite this reversal, the veil had been briefly lifted on BAT's systematic document destruction policy, attracting the attention of US justice department attorneys, who picked up where Ms McCabe's lawyers left off. They gathered evidence from around the world, including testimony from BAT's top internal lawyer, Nick Cannar, responsible for document management worldwide. Fred Gulson, an in-house lawyer at BAT's Australian subsidiary, Wills, turned whistleblower after Ms McCabe died. Travelling to the US to give evidence, he told the court that documents had been destroyed "due to litigation concerns".

He said: "The purpose of [Wills'] document retention policy [DRP] was twofold: to protect the litigation position of Wills, and to protect the litigation positions of other BAT group companies, especially our US affiliate, B&W [BAT's US division, Brown & Williamson, which has since been demerged], by ensuring that potentially damaging documents would not be discovered from Australia.

"While it was important that the DRP appear to be a rote housekeeping measure, of the kind that would normally be run by an audit or accounting department, the purpose ... was to protect Wills and BAT from litigation ... it was actually a document destruction policy."

He told the court his recollection of BAT's document retention policy came not from a written document but from explanations provided by Mr Cannar, Mr Foyle and others. Lovells said: "Foyle was not accused of any personal misconduct or impropriety of any kind."

Judge Kessler's judicial opinion also found training practices at B&W had encouraged staff to use oral rather than written communications. One internal manual advised: "Imagine the memo, note or letter you are about to write will be seen by the person that you would least like to read it ... send a 'mental copy' to a newspaper, one of your competitors, a government agency or a potential plaintiff. Now: would you still write the memo?"

Backstory

The case against the tobacco firms Philip Morris, RJ Reynolds, Brown & Williamson, Lorriard Tobacco and BAT started out, under the Clinton administration, as a $290bn (£180bn) lawsuit to recoup healthcare costs. But by the time Judge Gladys Kessler gave her ruling last week the US court of appeals had in effect neutered the claim, ruling the justice department could not pursue past profits.

The 29-week trial ended in a pyrrhic victory for the justice department after the judge ruled that tobacco majors had violated US racketeering laws, first used against the mafia. The firms published "corrective statements" - a penalty so light that tobacco shares rose.

Note created Aug 22, 2006
Guardian Unlimited Business | | BAT shredded evidence helpful to dying smokers' claims, judge says - business.guardian.co.uk/...

Toyota to expand hybrid car range in US


Toyota to expand hybrid car range in US

AFP, 18 July 2006 - Japanese automaker Toyota plans to expand its hybrid offerings in the United States as it struggles to meet demand for its popular Prius car, its top US executive said Tuesday.

Toyota Motor North America President Jim Press said the automaker was planning to start selling a sixth hybrid model in the United States from early next year.

"Early next year, we'll offer a sixth one, the world's first V-8 (engine) hybrid in our flagship Lexus LS sedan," Press said during a speech at the National Press Club. "And more will follow."

Press' signalled that Toyota, which has also started selling a hybrid sports utility vehicle (SUV) in the US market, is now firmly targetting the luxury end of the market with its dual-powered technology.

He claimed that Toyota has sold more hybrid vehicles in the US so far this year than Cadillac, Buick, or Mercedes Benz has sold cars.

"Toyota is not backing off its strong commitment to hybrids. We know they are absolutely essential to the future success of this industry," Press said.

The US citizen, the first non-Japanese executive to head Toyota in the world's biggest car market, recently traded in his family pickup truck for a Toyota Camry hybrid.

Press said hybrid technology can be offered in multiple ways to boost fuel efficiency, citing gasoline (petrol) engines, clean diesel, bio-diesel, ethanol, plug-in hybrids and hydrogen fuel cells.

"Toyota is (also) strongly considering introducing a flex-fuel vehicle program in the United States in the near term," Press said.

"We're already developing vehicles that can operate in ethanol-rich Brazil and we're optimistic that we can offer similar vehicles to American consumers," he said.

He said Toyota was also researching the potential of a plug-in hybrid vehicle that could be driven further without using its gas engine.

Press said Toyota's philosophy was not only to build more efficient cars, but to also manufacture cars that are less polluting and safer to drive.

He also related a "dream" of Toyota's global president Katsuaki Watanabe to create a car that could be driven across the United States on a single tank of fuel.

"It's a dream at this point," Press stressed, but added "that's where we're headed."

He said that rising interest rates and spiking raw material costs were presenting a challenge to car makers, but predicted the US industry would yield healthy sales of around 17 million this year.

And while the US remains the world's largest car market, Press noted that China is "rapidly becoming the world's second largest market."

Note created Aug 9, 2006
Toyota to expand hybrid car range in US - www.wbcsd.org/...

Corporate personality - does it help companies to play fair? "Competition can sometimes be fierce, but also must be fair and legal."


Corporate personality - does it help companies to play fair?
Mallen Baker
21 Jul 06


Differing values on display at Microsoft and PepsiCo can be put down to quality of leadership
Microsoft has had a tough couple of weeks in Europe, being fined by the European Commission for not playing fair with its competitors.

At the same time, PepsiCo has been bathing in the warm glow of approval after it spurned the offer to benefit from industrial espionage at Coca-Cola.

So what does it really mean, to operate within a culture of fair competition?

Microsoft would contend that this is a less easy equation that it would appear at first glance.

It has complained that the expectations of the European Commission as to what information it should share with its rivals in order to give them fair access to develop software for the Windows operating system have been unclear from the start.

If only it had been clearer, the company argues, it would have been able to comply sooner.

Its rivals believe this is nonsense, of course. They insist that this is a company intent on extracting maximum advantage from its near-monopoly for as long as it can possibly get away with.

It has responded to the previous European Commission ruling by taking actions that it can describe as meeting the requirements without actually fulfilling their intent.

Hard but fair


Not that operating within the spirit of fair play necessarily means being a soft touch.

PepsiCo competes hard with Coca-Cola. They are bitter rivals for market share, toughened in recent years by surviving all sorts of accusations and consumer response to fears of the role of soft drinks in contributing to obesity.

You would think that in such a cut-throat world, benefiting from stolen trade secrets would be par for the course.

When Joya Williams, an administrative assistant at Coca-Cola headquarters joined with two others in picking up trade secrets and attempting to sell them on for $1.5m, they were striking at the heart of the Coca-Cola empire.

The secrecy of its formula is a point of paramount importance for Coke. The company has no patent on its core formula since it has never wanted to have to publish details of what it consists of. This makes it vulnerable to intellectual property theft in a serious way.

Of course, what was on sale here was not the core formula - it was details around a new development. Nevertheless, it should have been attractive to PepsiCo to learn the details to enable them to produce a spoiler product.

Instead, they immediately notified Coca-Cola of the offer they had received, and co-operated with the FBI in setting up a sting operation to catch out the perpetrators.

PepsiCo spokesman Dave DeCecco said: "Competition can sometimes be fierce, but also must be fair and legal."

When ethics make sense


To recognise that there was a strong business case for PepsiCo to behave the way it did is not to diminish it.

If the company had accepted information under such circumstances, it would be as liable in law as if it had committed the theft itself.

Plenty of companies have done such things, of course, and have paid the fine if they got caught out and probably saw this as the natural consequence of doing business.

Even so, the value of the information being sold was probably less to the company than the value of the good publicity that has followed its actions.

So is there something serious here about corporate personality - the way that companies will naturally tend to respond to circumstances, even against their own short term interest?

Or is it simply about compliance, as both of these case studies might be taken to suggest?

Strong leadership


Really, the two examples of Microsoft and PepsiCo focus on quality of leadership.

It is Microsoft's senior executives that negotiated terms with the European Commission, and will then have instructed staff on how the final resolution was to be interpreted.

Whether the company is justly accused of doing as little as it can get away with can only really be answered by getting an insight into the intent of those individuals.

Likewise with PepsiCo, the approach from the intellectual property thieves would have been communicated immediately to the very top, who clearly then quickly and easily made the decision that they did. Different individuals with different values might have chosen alternative routes.

So both these examples are about personal leadership, not corporate personality. Does that mean that there is no such thing as corporate personality?

Shared values


If there is, then it surely exists in those companies that are so values driven that decision-making on such matters is driven throughout the layers of the business.

There are many companies that have a statement of values. They are pinned to the Chairman or President's wall. The senior management can recite them on demand. They are published in the company's CSR report.

But for every one company where these values actually affect the way that decisions are made, there will be ten where they get no further than the senior executive suite.

We're talking about companies like 3M, that have sustainability and innovation embedded into the organisation, and where any new CEO has to start by learning the unique corporate culture rather than expecting to be able to come in with grand sweeping visions of change.

We're talking about companies like Southwest Airlines, where employees at every level know all about what corporate policies have been established in key, sometimes controversial, areas and can act as ambassadors for these to customers.

We're talking about a small but distinguished group of other companies where employees feel empowered to 'do the right thing' when faced with a dilemma because they know this is the corporate culture.

The fact that these are successful companies that have helped to reshape their marketplace in highly competitive environments goes to show that creating such a corporate personality is not naivety in the face of hardnosed business cultures.

Indeed, the seminal Collins and Porras research 'Built to Last' that identified the key factors that had made certain companies enduringly great over a hundred year or more timescale, focused on this factor above all else.

Unfortunately, this is a difficult thing to measure. The Dow Jones Group Sustainability Index or Business in the Community's Corporate Responsibility Index would struggle to find a way to reliably identify companies that had created an effective corporate personality that supported their responsibility and their business success.

It's the kind of thing that will probably remain an 'I know it when I see it' quality.

Note created Aug 4, 2006
Ethical Corporation: Columnists - Corporate personality - does it help companies to play fair? - www.ethicalcorp.com/...

Moving target: Clobbering the motorist may not be the best approach


Transport emissions

Moving target

Aug 17th 2006
From The Economist print edition



Clobbering the motorist may not be the best approach



ALMOST a century ago, John Masefield celebrated the “dirty British coaster with a salt-caked smoke stack” in his poem, “Cargoes”. Nowadays, a poet might instead excoriate the dirty British car and its carbon-spewing exhaust pipe for its contribution to global warming.

Transport is the only sector of the economy in which carbon emissions have risen since 1990. It is also the only one in which they are expected to be above that year's level in 2020 (see chart). Road traffic, producing 95% of carbon emissions from transport, is the main culprit.

Cars are steadily getting cleaner thanks to technological advances. Manufacturers reckon that snazzy new engines cut carbon emissions from new vehicles by about 1% a year. But this saving is eroded by drivers' increasing fondness for safer, heavier and more gadget-infested vehicles, which guzzle more gas and so emit more carbon.

Such choices are also shaped by political reluctance to raise taxes on motorists. In Labour's early years of office, Gordon Brown carried on with the Tory policy of raising petrol taxes faster than inflation. However, the chancellor of the exchequer hastily dropped that approach after protests caused shortages and panic in 2000. Despite the subsequent increase in oil prices, petrol is now 7p per litre cheaper in real terms than it was in 1999.

In his spring budget Mr Brown made much of green measures to encourage purchases of cleaner cars by private consumers. But the reality was limper than the rhetoric. The chancellor raised the tax differential between the cleanest and the dirtiest petrol-using cars from £100 to £210 a year. Such an increase seems unlikely to deter drivers of expensive, polluting cars. Indeed, the system favours the dirtier: the driver of a sporty BMWX5, for example, pays £0.66 for each gram of carbon dioxide it emits, compared with £0.74 per gram for the driver of a greener Toyota Yaris.

MPs who track the government's green record are unhappy with its timid approach. In a report published on August 7th, the Environmental Audit Committee castigated the transport department for its “dismal failure of purpose”. The MPs called for a steep rise in excise duty on the dirtiest cars from £210 to £1,800. And they urged a return to the policy of raising fuel taxes faster than inflation. Both proposals would work. Fleet managers in firms, for example, face much stiffer duties on dirty cars than do private motorists. As a result, emissions from business fleets have fallen faster than those from private cars.

The snag is that a carbon crackdown would be very unpopular. Lowering the motorway speed limit to 60 mph, for example, would reduce carbon-dioxide emissions by around 18%. The committee concluded, unsurprisingly, that the transport department is too fearful of a public backlash to do so.

Yet opposition to higher taxes may be more than mere whingeing. Research by David Newbery, a professor of economics at Cambridge University, suggests that the cost to society imposed by the various pollutants, including carbon, produced from car engines works out to around 42p per litre of petrol burned and 47p for diesel. With fuel taxed at 47.1p per litre, this implies that road transport is, if anything, paying too much. By contrast, housing is getting off lightly, according to Mr Newbery. Heating fuel, for example, receives substantial tax breaks. But at a time of soaring utility bills, ending these concessions would be as politically unpalatable as squeezing motorists.

Last month Tony Blair described climate change as “probably the greatest long-term challenge facing the human race”. Transport's high and rising emissions make it an obvious target. But that does not mean it is the right one. Properly accounting for the costs of global warming does not necessarily imply less private motoring—which is, after all, a very valuable good. If cars are already paying their way, ministers should arguably look for carbon savings elsewhere.

Note created Aug 21, 2006
Economist.com | Articles by Subject | Transport emissions - www.economist.com/...

Australian states unveil emissions trading proposal




Australian states unveil emissions trading proposal

Environmental Finance, 17 August 2006 - Australia's states and territories have unveiled proposals for a national greenhouse gas trading scheme.

The proposals put the state and territory governments – all run by the opposition Labor Party – on a collision course with the federal government, which is opposed to emissions trading.

The scheme, which could be up and running by 2010, would initially target the electricity generating sector. It would set caps out to 10 years on a rolling basis, with indicative targets available for a further 10 years ahead, to attempt to give as much certainty to industry as possible.

The scheme would apply to electricity generators with a capacity greater than 30MW. This would cover about 100 generators that jointly account for 35% of Australia's total GHG emissions.

After five years, coverage would be extended to include all stationary energy sources emitting more than 25,000 tonnes of carbon dioxide or equivalent, as well as gas retailers and gas pipeline operators.

This would take in another 150 facilities, including pulp mills, cement kilns and the iron and steel sector, and would extend the scheme's coverage to include another 10% of the nation's emissions.

However, the proposal does not specify the caps to be imposed, instead presenting a number of scenarios – ranging from 5% below 2005 emissions by 2030, to 19% below.

The scheme would be open to carbon credits from the Kyoto Protocol's Clean Development Mechanism, and a domestic offsets programme would also be established.

According to Martijn Wilder, Sydney-based head of the global climate change practice of law firm Baker & McKenzie, the scheme "represents the first real step towards a long-term approach for capping Australia's national greenhouse emissions".

Wilder is also chair of the New South Wales Premier's Greenhouse Gas Advisory Panel.

However, Prime Minister John Howard was scathing of the proposal, claiming it would have "a devastating impact" on resource-exporting states.

"While ever we have control of policies in this area, we are not going to sell out the Australian resource sector and we are not going to sell out the workers in the resource industry," the PM told parliament.

The National Emissions Trading Secretariat is inviting comments on the proposed scheme by 22 December.

Note created Aug 22, 2006
Australian states unveil emissions trading proposal - www.wbcsd.org/...

GM Tops Motor Vehicles Sector Sustainability Reporting


GM Tops Motor Vehicles Sector Sustainability Reporting

GreenBiz.com, 7 August 2006 - General Motors achieved the highest ranking in environmental and sustainability reporting of the 30 companies in the motor vehicles and parts sector whose environmental and sustainability reporting was analyzed by the Roberts Environmental Center.

In the center's Pacific Sustainability Index, Volkswagen leapfrogged Ford, Toyota, BMW, and DaimlerChrysler to achieve second place. Japan's Denso moved from tenth place in 2005 to fourth place, the highest score in the parts section of the sector, with a grade of A; Johnson Controls (U. S.), the next highest scoring firm in the parts sector, achieved a respectable B.

The lowest scores, a result of failure to post more than a minimal amount of company-specific environmental or social information on their web sites, went to American aircraft maker Lear, Canada's Magna International, and the Turkish company Koc Holding, all with grades of D-.

According to the Roberts Center, "there is a moderate positive relationship between company size and quality of reporting, driven both by the low scores of the smallest companies in our sample and by the high scores of three of the largest players. Almost the full range of scores was seen in firms with revenues around $24 billion, with Denso much higher than average for its size. The smallest firm in the sector, the Man Group (Germany) obtained a slightly better than average C+."

All materials were scored using the Center's Pacific Sustainability Index, which also provides scores for six subcategories of reporting. The highest scores for these went to VW for expressed environmental intent, Denso for environmental reporting transparency, Toyota for quantitative environmental performance, GM for expressed social intent, VW for social reporting transparency, and VW for quantitative social performance.

In this sector the most reported environmental variables were energy use, waste recycled, product performance, and water use. The most reported social information was employee health and safety, community education and development, and consumer health and safety.

These findings are based on the information available on the web sites of the largest 30 companies in the motor vehicles and parts sector of the 2005 Fortune Global 500 and Fortune 1000 lists as of February 28, 2006. All firms were invited to review and comment on the analysis prior to publication, and many brought to our attention relevant information, unlinked, unreferenced, or otherwise "hidden" on their web sites that raised their scores. Better web site navigation tools for environmental and sustainability information are clearly needed on many sites.

Note created Aug 10, 2006
GM Tops Motor Vehicles Sector Sustainability Reporting - www.wbcsd.org/...

Bayer at centre of GM contamination scare


Bayer at centre of GM contamination scare
By Saeed Shah
Published: 22 August 2006

The European Commission came under pressure yesterday to ban imports of long-grain rice from the US after it emerged that crops there had been contaminated by genetically modified varieties.

Japan stopped US long-grain rice imports over the weekend, after news on Friday of the contamination.

Bayer, the German-based healthcare and agricultural products group, produced the variety of GM rice. It was never authorised by regulators but has now found its way into commercial rice crops. The issue threatens $1bn (£527m) of US rice exports.

GM rice is not allowed to be imported into the EU. A spokeswoman for the commission said: "The European Commission will write today to the US authorities to request specific information, in particular in relation to the risk assessment and to the detection method. In addition, the commission will meet company representatives today to get additional information. Based on this information, a decision on further actions, if necessary, will be taken."

That was not good enough for environmentalists, who called for an immediate ban. Liz Wright, of Friends of the Earth, said only the suspension of long-grain rice imports from the US could prevent the illegal variety entering our food. She said there should also be widespread testing to see if the rice was already on the shelves.

The Bayer rice variety, known as LLRICE 601, which is bred to resist a specific type of weedkiller, has not been fully tested for safety for human consumption. Most GM crops imported to the EU are used as animal feed, with the exception of GM corn and soya.

Ms Wright said: "This shows that that, even after 10 years of trials, the Americans are still not able to handle the coexistence of GM and non-GM crops."

The development comes at a delicate time in the UK, just as the Government is poised to announce rules that would allow the growing of GM crops in this country in a way designed to prevent non-GM crops being contaminated.

The US Food and Drug Administration insisted that the tainting of the rice crop "poses no food or feed safety concerns". Bayer field tested the LLRICE 601 variety between 1998 and 2001.

Bayer said the GM protein in the rice was well known to regulators and had been confirmed safe for food and feed use in a number of crops in countries, including the EU.

Note created Aug 22, 2006
Independent Online Edition > Business News - news.independent.co.uk/...

The Big Question: Is it possible to drill for oil without devastating the environment?


The Big Question: Is it possible to drill for oil without devastating the environment?
By Stephen Foley, US Business Correspondent
Published: 08 August 2006

Why is this question being asked afresh?

BP, formerly known as British Petroleum and now the second largest oil company in the world, is shutting down production from its giant oilfield in Alaska after finding another spill from a corroded pipeline.

It is a drastic response to the discovery that several chunks of the pipeline are corroded and close to breaking open. The temporary closure of wells producing 400,000 barrels of oil a day, 8 per cent of total production for the whole of the US, has sent oil prices soaring.

BP was shouting at the top of its voice yesterday about how it is prioritising the environment in this sensitive area inside the Arctic Circle. But environmentalists say the evidence of corrosion simply proves what they have been saying all along: that BP's Alaskan operations have an appalling environmental record that has only been exposed because of brave whistle-blowers inside the company.

The tests on the pipeline, which discovered this latest spill at the weekend, were instigated because of a much bigger disaster earlier this year. Oil had been leaking for five days from a corroded BP pipeline between facilities at Prudhoe Bay when a worker driving a deserted stretch of road noticed a strong petroleum smell and stopped to investigate. It was the worst oil spill in Alaska since the Exxon Valdez container ship was holed in 1989, and BP is now under criminal investigation for its safety record in the region.

Why is Alaska so environmentally sensitive?

Alaska's Arctic region is a vast wilderness, home to hundreds of animal species including bears, wolves, caribou, musk oxen, and millions of migratory birds. Conservationists argue that the tundra is fragile and will be irreparably harmed by development of the infrastructure that is required for drilling. The wildlife of the area is already being disturbed and displaced, they say, and an awe-inspiring wilderness will eventually be lost forever.

Green groups have mounted a strong campaign against plans by BP and other major oil companies to extend their drilling into the explicitly protected Arctic National Wildlife Reserve (ANWR), created to maintain a unique eco-system that span Arctic and sub- Arctic Alaska.

And if the impact of development on these areas is one thing, the potential effects of oil spills is quite another. There are about 500 spills reported annually across the North Slope, the north-western tip of the state where wells and pipelines are currently located.

Alaskans are still fighting Exxon for a settlement over the Exxon Valdez disaster which, they said, wiped out their livelihoods from fishing.

Is the environment lobby winning the political arguments in the US?

It is difficult to be hopeful that the ban on oil production in ANWR will be maintained, particularly if oil prices stay high and American consumers continue to feel the pinch of soaring petrol prices. The likelihood that there are billions of barrels of oil under the ground within the sanctuary, and even more gas, will tempt politicians looking for ways to bring down oil prices.

President George Bush, who supports drilling in ANWR, has also linked the issue to "energy security", that is, the need for the US to reduce its dependence on oil from the volatile Middle East. A new Bill to remove the protections from ANWR was introduced into Congress last month. To mute criticism, it would also introduce new financial incentives for oil companies to invest in renewable fuels.

What about in the rest of the world?

The concern is that exploration work is now moving away from the developed world, where governments have more or less strict environmental regulations in place, to areas where such protections are much lower down the political agenda. Friends of the Earth is currently campaigning against Shell's major project at Sakhalin Island, off the east coast of Russia, which goes near breeding grounds of endangered western grey whales. And green groups say unchecked development in rural Africa could be an environmental disaster.

Are oil companies doing enough to protect the environment?

One thing both the oil industry and the green movement would agree on is that it is impossible to drill for oil without having an impact on the environment. The question is whether the industry is doing as much as it can to minimise that impact; the larger debate is whether the damage is a price worth paying.

Undeniably, companies are telling us more about their activities. This is an era of environmental impact assessments and consultation with local communities. Most companies also have policies on the use of natural resources and clean-up operations. Advances in technology have also been able to limit damage, with multiple wells drilled from a single rig. The remote control device used by BP in the Alaskan pipelines spotted corrosion earlier than would have been possible before. Even Exxon Mobil, the bogeyman of the industry because it denies the link between carbon emissions and global warming, is committed to new technologies that reduce the greenhouse emissions of its refineries and other operations.

Environmentalists, though, insist that as long as the pursuit of profit is put above protection of the environment, the oil majors will make damaging choices.

Shouldn't we have switched to renewable fuels by now, anyway?

The answer to whether we can drill for oil without harming the environment is already no, in the narrow sense that no system will totally prevent spills or fail to alter a natural habitat for wildlife. But it is most certainly no if climate change is included in the equation. BP is still investing barely 5 per cent of its capital budget on renewable fuels, and most oil companies are putting in even less. It is clearly not enough to speed up the development of new fuel sources such as wind and solar power, or even biofuels made from sugar and other natural ingredients. Progress is being made outside of the big companies, but it remains painfully slow.

Is the oil industry doing enough to protect the environment?

Yes...

* Environmental protection has moved up the agenda inside every major oil company

* New technologies mean that drilling can be done with minimal impact on the environment

* Regulations in the West have got ever tighter and companies cannot afford to be fined or to lose their reputations

No...

* Small oil spills are widespread, and larger environmental disasters are inevitable

* Money-hungry oil companies will develop regions that have so far remained unspoilt

* Burning fossil fuels will destroy the environment through global warming

Note created Aug 8, 2006
Independent Online Edition > Environment - news.independent.co.uk/...

Biofuels Drive Fund Investments Into Crops

ANALYSIS - Biofuels Drive Fund Investments Into Crops
FRANCE : August 10, 2006

PARIS - Agricultural markets are joining other commodities in attracting huge money flows from investment funds that see strong potential returns from wheat, corn and sugar on growing demand for biofuel, analysts said on Wednesday.

"The biofuels and ethanol story has really caught the attention of the hedge fund and the investor community more generally," James Gutman, senior economist at Goldman Sachs in London, told Reuters.

"They have figured out this is a place in the investment landscape where they really need to be."

After a price explosion in commodities like copper, funds are turning their attention to crops. Long perceived as too risky for the serious investor, they are finding new markets in making ethanol and biodiesel, the new "green" fuels.

Record oil prices and political tensions in the Middle East have changed the picture. Crops like wheat and maize (corn) will face increasingly competing demand from traditional food makers as well as the burgeoning alternative fuel sector.

And while there may be short-term blips -- funds have recently sold off sugar due to a buildup in cane-derived biofuel stocks -- fund managers are positive on the medium-term outlook.

"Biofuels are going to be a big theme in the markets in the near future, the next 3-5 years," said Domenic Carratu, Managing Director of Commodities and Weather Derivatives at Rabobank.

"The extra demand created by the need for biofuels is over and above the existing need for these commodities for food or food inputs. You have a much larger demand and the same sort of supply and that's going to lead to demand pressure on prices."

The new funds typically invest in baskets of commodities or indicies linked to US futures, where liquidity is deeper.

"If you're creating a US$100 million ethanol plant, you probably want 3 to 4 years' hedging," Carratu said.

"There's suddenly a lot more people interested in long-dated corporate hedging. Those sorts of things indicate to us there's a fundamental shift happening in the market."


EUROPE LAGS THE US FOR NOW

Despite the US focus, Europe's grain markets have also benefited from an increase in investment activity as prices have risen on concerns over heatwave damage to this year's harvests.

Euronext.liffe said Paris milling wheat futures hit a record monthly volume in July at 37,860 lots, a figure still small compared to turnover in the Chicago markets.

Options also hit a monthly record at more than 5,000 lots.

Rapeseed futures have also been heavily traded with a daily record of 3,308 lots traded on July 5, the exchange said.

Despite a lack of volume in Europe, some big funds have exposure to Paris rapeseed futures, and the picture is changing.

"The liquidity in all these markets is growing astronomically. They've lagged the other commodity markets in terms of development in both prices and liquidity but I think liquidity is finally coming in," Carratu said.

Low volumes aside, some analysts said over-regulation in Europe also hindered investment inflows.

"I'd love to trade wheat in Paris, if only the political environment would change to favour that," said Christian Gerlach, analyst at Swiss-based Diapason Commodities Management.

"With the Common Agricultural Policy (CAP), the structural environment is not really favourable towards investments."

Diapason has around US$5 billion in commodities' investments with US$500 million in an agriculture-oriented fund.


NOT JUST BIOFUELS

While most fund managers cite biofuels as the primary driver, others say there is a compelling case for agricultural commodities based on other fundamental scenarios.

"You have structural forces now in place for most of them, meaning you have deficit supply/demand markets," Gerlach said.

"It's a demand-driven story. Biofuels are huge, but there is a more fundamental, structural story too."

Benjamin Louvet, chief investment officer at Paris-based PRIM Alternative Investment, said the company's basket of biofuel-oriented crops was also a play on two other investment strategies, including a future rise in Chinese demand.

PRIM has some US$85 million invested in commodities with currently some US$5 million in agriculture.

"The second strategy is that by investing in food products, we also have a play on a demographic evolution, and can bet on the development of new markets," Louvet said.

"We can use wheat and corn for this as we see China increasing this kind of consumption in the future," he said.

The third strategy was linked to projected higher investment in water supplies that are heavily used in crop cultivation.

"Soon we will have to invest in water and cereals will go higher based on those rising costs," he said.

And analysts see more fund involvment in the sector ahead.

"I don't get the sense they're getting ready to exit or that the flow in is simply going to evaporate," Gutman said.


Story by David Evans


Note created Aug 9, 2006
Planet Ark : ANALYSIS - Biofuels Drive Fund Investments Into Crops - www.planetark.com/...

Scientists flock to test 'free energy' discovery


Scientists flock to test 'free energy' discovery

David Smith
Sunday August 20, 2006

The Observer

A man who claims to have developed a free energy technology which could power everything from mobile phones to cars has received more than 400 applications from scientists to test it.

Sean McCarthy says that no one was more sceptical than he when Steorn, his small hi-tech firm in Dublin, hit upon a way of generating clean, free and constant energy from the interaction of magnetic fields. 'It wasn't so much a Eureka moment as a get-back-in-there-and-check-your-instruments moment, although in far more colourful language,' said McCarthy. But when he attempted to share his findings, he says, scientists either put the phone down on him or refused to endorse him publicly in case they damaged their academic reputations. So last week he took out a full-page advert in the Economist magazine, challenging the scientific community to examine his technology.

McCarthy claims it provides five times the amount of energy a mobile phone battery generates for the same size, and does not have to be recharged. Within 36 hours of his advert appearing he had been contacted by 420 scientists in Europe, America and Australia, and a further 4,606 people had registered to receive the results.


Note created Aug 21, 2006
The Observer | UK News | Scientists flock to test 'free energy' discovery - observer.guardian.co.uk/...

As France dries up, a town in Texas could help


As France dries up, a town in Texas could help
Char Miller International Herald Tribune
FRIDAY, AUGUST 4, 2006


SAN ANTONIO, Texas Water conservation

The last thing France needs is unsolicited advice from the United States. Even less might it desire counsel from Texas, the deep red heart of a Republican-dominated polity that spurns all things Gallic. As a local bumper sticker deadpans: "Texas: Bigger than France."

Yet no one has been laughing about France's grueling summer of record-breaking heat and desperate water shortages, and it is in this blistering context that San Antonio, Texas, may have something cool to offer. Our city knows all about hot and dry and how to live within those withering constraints.

The Spanish were the first Europeans to discover just how rough life here could be; in the late 17th century, as they explored the desiccated terrain of what is now southern Texas, they were attracted to the site they dubbed San Antonio de Béxar because of its two major streams. Struck by the watershed's lush beauty, Captain Domingo Ramón estimated that there "was sufficient water here for a city a quarter-league wide." At the time, he had no idea of the region's punishing summers, leaving it to those who founded the community in 1718 to endure devastating droughts.

These settlers succeeded in ways we would be wise to emulate, by making extensive use of cisterns. These water-storage systems, still in operation more than a century later, puzzled the visiting poet Sidney Lanier in the winter of 1873. He thought it peculiar that the town "was built along the banks of two limpid streams, yet it drinks rain-water collected in cisterns." Had he remained for the sizzling summer that followed, he would have better understood why San Antonians so carefully harvested rainfall.

We have had to relearn that critical lesson in sustainability. In the 1890s, water prospectors punched wells into the artesian plain, discovering the prodigious Edwards Aquifer, a gushing source that seemed infinite. For the next century, the city exploded in size on the basis of cheap water, happily ignoring key signs of environmental distress (the springs began drying up early in the 20th century). Devastating multiyear droughts in the 1950s, 1980s and 1990s, along with a swelling population that dangerously reduced the aquifer, forced San Antonio to rethink its water guzzling.

Through conservation outreach, financial incentives and regulatory action, the community has renounced its water-wasting ways. By educating the citizenry about conservation, raising prices, underwriting the transition to low-flow toilets and showers, and requiring homeowners and businesses to plug leaking faucets and pipelines, the city has greatly reduced consumption.

Another measure that has helped is the city's sizable investment in a water-recycling program that provides 29,000 gallons, or 109,777 liters, per day of "gray water" for golf courses, parks and other non- potable purposes. And for $215 million, the city built a facility that allows it to store more than 3.67 million gallons in another local aquifer. With this massive underground cistern, we have rediscovered what the Spanish settlers well knew: Conservation makes a difference.

Just how much of a difference? Since the mid- 1980s, and despite a growing population, water use has dropped by 32 percent, with a 45 percent decline predicted by 2015. San Antonio's per capita water consumption, once among the highest in Texas, is now the lowest.

The value of that transformation is manifest this summer. Despite the current six-month drought, with daily temperatures hovering above 96 degrees Fahrenheit (36 Celsius), San Antonio is only in a first-stage restriction, limiting hours of lawn watering; a decade earlier, without the benefit of rigorous conservation, we would have been in a much more dire situation.

As dire, perhaps, as the one France now confronts. On July 26, Nelly Olin, France's environment minister, confirmed that Paris's groundwater resources were at their lowest level in two decades, leading to the enactment of emergency restrictions. That's an important first step. But a rigorous long-term, year- round conservation strategy is essential if France is to avoid the shortages and deprivations that a warming planet will continue to produce.

Should the French seek a model for how to achieve a greater degree of water sustainability, they might consider heading west to study that water miser, San Antonio.

Char Miller, professor of history and director of urban studies at Trinity University in San Antonio, is editor of "Fluid Arguments: Five Centuries of Western Water Conflict."

Note created Aug 7, 2006
As France dries up, a town in Texas could help - Print Version - International Herald Tribune - www.iht.com/...

22.8.06

Voter fury fuels $2000 car subsidy


Thanks to Matt Davies

From Sydney Morning Herald:
Voter fury fuels $2000 car subsidy
Louise Dodson Chief Political Correspondent
August 14, 2006

THE Federal Government will subsidise solar energy and ethanol fuel production and give motorists up to $2000 to convert their cars to LPG - just as a poll reveals a fierce voter backlash to petrol prices and interest rate rises.

The Herald/ACNielsen poll, taken from Thursday to Saturday, shows 75 per cent of voters are dissatisfied with the Government's response to the petrol price rises, up 38 points since almost a year ago.

Labor now leads the Coalition by 53 to 47 per cent on two-party-preferred votes, up one point on a month ago. The Prime Minister, John Howard, has been acutely aware of the impact of petrol prices on household budgets, calling it the biggest challenge facing the Government.

Moving quickly to head off further anger in the electorate, the Government will give a $2000 subsidy to motorists to convert their existing cars to the cheaper liquefied petroleum gas. Those with new cars will get a $1000 subsidy to convert to LPG.

The measures - which could be announced as early as today - will also include programs to encourage the use of alternative power such as solar and subsidies for service stations to use more biofuels, such as ethanol, to cut petrol prices. This will include funding for ethanol bowsers.

The Government will also boost oil exploration.

The new poll contains damaging news for the Government on interest rates as well as petrol prices. A substantial majority of voters - 62 per cent - did not believe the Government's warning that interest rates would be higher under a Labor government.

On the Government's crucial rating as the best party to manage the economy, it also fell. With 54 per cent support to Labor's 33, the Government's rating remains high, but it has dropped by nine points since August 2004 and Labor's has risen by five points.

But the poll was not all bad for the Government. The survey of 1411 people showed 54 per cent with Mr Howard that the petrol price rises were "due to overseas forces beyond the Government's control" - even while three-quarters suggested they were unhappy with its response.

While most voters believed there would be no difference in interest rates if Labor were in government, 27 per cent thought they would be higher.

And while Labor increased its lead, the Opposition Leader, Kim Beazley, suffered a four-point drop in his approval rating - to 36 per cent. His disapproval rating rose two points to 53 per cent and he fell as preferred prime minister by three points to 35 per cent. Among Labor voters, his rating fell to 58 per cent, from 62 last month.

Mr Howard fared much better. After announcing he would remain as leader to fight the next election, his approval rating was down but only by one point to 51 per cent. His disapproval rating was steady at 43 per cent. Among Coalition voters Mr Howard's approval rating is 88 per cent.