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


Carbon Newsclips for 7 January 2010: Carbon labeling, carbon fraud

Global Investment Portfolios Filled with 'Hidden' Climate Risks, 6 January 2010 - Investment portfolios around the world are filled with "hidden risks" because their managers do not consider climate change when making investment decisions -- largely because asset owners aren't asking them to. 

In a 
survey of some of the world's largest asset managers, nearly half said climate change was either not on their client's radars, or had just surfaced as a concern. A trend toward short-term financial performance also make climate change assessment -- a long-term threat -- less likely. 

"Despite the growing recognition of the far-reaching impacts climate change will have on the global economy, only a handful of asset managers are integrating climate risks and opportunities throughout their investment practices," Mindy S. Lubber, president of 
Ceres and director of the Investor Network on Climate Risk, which commissioned the survey, said in a statement Wednesday. "These findings make clear that the investment community is overly focused on short-term performance and ignoring longer-term business trends such as climate-related risks and opportunities. The recent subprime mortgage meltdown is a painful reminder of the fallout for investors who ignored 'hidden' long-term risks." 

Nearly 75 percent of asset managers in the survey expressly exclude climate change in their overall due diligence. This is despite the fact that nearly half see significant climate change risk exposure for some sectors. 

Yet not all asset managers are ignoring climate change investment risks. The
California State Teachers' Retirement System (CalSTRS), the second largest public pension fund in the U.S., said Wednesday it would engage its active equity managers on their climate change analysis and push each manager to cultivate climate change and sustainable investment expertise and also tweak corporate governance voting processes to consider and address climate change. 

"As a long-term investor, CalSTRS wants to invest in well-managed companies that can address the physical risks of climate change and adapt to the changing regulatory and market realities of a carbon-constrained economy," CalSTRS CEO Jack Ehnes said in a statement. "Our asset managers need to ask the right questions and critically evaluate how companies are positioned so that we're sure that our investments will produce outstanding risk-adjusted returns for our members."  

More than 80 asset managers responsible for $8.6 trillion in assets completed the survey, which was conducted in early 2009 at the request of INCR.

UK Government Calls for Food Labels to Show Carbon Footprint
Posted By Environmental Leader On January 7, 2010 @ 8:13 am In Carbon FootprintFeatureFood & BeverageGovernmentLabels & CertificationsMajor PlayersProducts & Planning | 1 Comment
QuakerOatscerealSupermarket food in the UK will be labeled to show its carbon footprint, country of origin and animal welfare standards as part of the government's new food strategy for the next 20 years, reports the Telegraph [1]. The voluntary  "green" food labels will show how much carbon was produced in the manufacture and transportation of food, according to the article.

Companies such as Tesco [2]PepsiCo [3] and other leading brands already display a "carbon reduction label" on certain products showing the amount of carbon dioxide produced in grams in growing the food, packaging and transportation, reports the Telegraph.

Now the UK government wants other brands to consider measuring the carbon footprint of goods along with including country of origin and compliance to animal welfare standards on the labels, reports the Telegraph.

But environmental groups said in the article that the government needs legislation rather than a voluntary labeling scheme to really transform food and farming.

A government-supported body, the Carbon Trust, is currently working with the food industry, including big brands like Boots and Innocent [4], to help manufacturers determine and display the carbon footprint of different items.

Quaker Oats [3] and Quaker Simple, part of PepsiCo, was the first cereal brand to carry the Carbon Trust Carbon Reduction Label, according to Carbon Trust [5].

The government is also asking all retailers to join the Pigmeat Labeling Code of Practice, due to be published next month, which will show where the animals were born, reared and processed, reports the Telegraph.

Critics believe carbon labeling will do little to fight climate change unless more low carbon products become available, according to the article.

Other countries including Sweden also call [6] for labels listing the carbon dioxide emissions associated with the production of foods, which is expected to cut the nation's emissions from food production by 20 to 50 percent.

In Japan, about 30 companies said they would voluntarily start [7] carrying carbon footprint labels on food packaging and other products beginning in April 2009. This was followed by Australia's announcement to join [8] the UK in using the Carbon Trust's Carbon Reduction Label.

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Australia, Belgium Find More Cases of Carbon Fraud
Posted By Environmental Leader On January 7, 2010 @ 10:01 am In AustraliaCarbon FinanceCarbon Finance & OffsetsCarbon Offsets/RECsEuropeFinancialGlobalGovernmentPolicy & Law | No Comments
emissions-1More carbon fraud cases are popping up around the globe including Australia and Belgium as government watchdog organizations step up efforts to monitor the nascent green business sector.

As an example, the Australian Competition and Consumer Commission (ACCC) says it is closely watching the green business sector, reports SmartCompany [1]. ACCC recently forced a green power company, Global Green Plan, to purchase carbon credits it had promised to buy on behalf of customers, but never did, and is currently pursuing action against carbon capture company Prime Carbon over allegedly misleading claims made by the firm, according to the article.

In the case of Global Green Plan, the company had participated in a government program designed to encourage home owners to use green power, reports SmartCompany. Under the GreenPower scheme, Global Green accepted payments from customers and promised to purchase renewable energy certificates on their behalf, but the company was eventually deregistered from the program, and didn't use all the money to buy the certificates, according to the article.

Michael Schaper, acting ACCC chairman, told SmartCopmany that the two primary areas of concern are green marketing and carbon claims including carbon offsets, carbon sequestration and carbon reduction.

Schaper said in the article that small businesses who are involved in green-related businesses to be careful when making any claims about their credentials and about the way carbon credits are accounted for and sold.

In Belgium, authorities have charged three Britons suspected of value added taxes (VAT) fraud on CO2 emissions permits, reports [2].

Jean-Bertrand Cambier, a prosecutor in the Tournai, Belgium, said in the article that the Britons were arrested as part of an investigation into about three million euros of unpaid taxes. Cambier cites the lack of harmonized tax and VAT regimes across EU member states as a cause for fraud.

To cut down on fraud in the carbon trading market, the European Union has proposed [3] a reverse payment scheme for VAT on carbon trading.

Late last year, the biggest clean energy auditor in the world, SGS UK, had its accreditation suspended [4] by United Nations inspectors, because it did not properly audited projects in carbon trading markets, and DNV, a Norwegian auditor, was also accused of similar infractions.

In the European Union, fraud within the carbon trading community is estimated [5] to cost taxpayers more than $7 billion in the past 18 months.

In addition to carbon fraud, the carbon emissions trading industry is faced with low carbon pricing and a weak U.N. climate deal that has forced carbon traders to expand or diversify into other commodities, reports Reuters [6].

Reuters also reports that Paris-based COER2 Commodities will start trading in mid-January crude oil futures, natural gas, gold and base metals in addition to its existing carbon emissions trade, and Fortis Bank Netherlands diversified into other European energy markets at the end of last year.

Several large banks in the European Union's emissions trading scheme (EU ETS) also participate in other energy or commodities markets, reports Reuters.

EU permit prices fell by 21 percent last year and are now down nearly 60 percent from the high of 2008, reports Reuters, which was partly due to the economic downturn that resulted in lower industrial output.

A weak climate agreement in Copenhagen in December also contributed to lower demand and lower prices, reports Reuters.

The global market for carbon credits grew slightly to $136 billion last year, from $126 billion in 2008, according to Point Carbon, reports Reuters.

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(Water Management) Coming Up Short: What Water Conservation Means for Business

Coming Up Short: What Water Conservation Means for Business
Posted By Environmental Leader On January 4, 2010 @ 2:27 am In Guest ColumnStrategy & LeadershipWater | 2 Comments
Sharon NunesCompanies are increasingly focusing on "green" initiatives such as reducing greenhouse gas emissions and conserving energy. And while these goals are clearly important, many companies are overlooking what could become the most critical green initiative of them all — water conservation.

Though the total amount of water on this planet has never changed, the nature of that water is changing. Everything from where rain falls to the chemical makeup of the oceans is in flux. Immigration, population growth and climate change are affecting the way we all think about our relationship with the world's water supply. And by 2050, when the world's population is expected to peak at about 9.4 billion people, it is conceivable that water could become one of the world's scarcest and most valuable commodities in the world.

Already, a staggering 884 million people in the world lack access to safe drinking water. And, by the end of the year, over 3 million of those people will die from a water-related disease. But water isn't just a societal issue — it also affects businesses around the world.

Recently, my company conducted a survey of more than 100 public and private sector executives. Their responses concerning water challenges showed some surprising and, in some cases, alarming concerns.

For example, while the cost of treating and delivering water will continue to increase over the next 10 years, many companies do not know how to adapt. About 77 percent of those surveyed felt that water management was extremely critical to their business, yet 51 percent said they lacked formal guidelines for implementing it and an additional 63 percent of executives said they lacked access to integrated water management systems.

When you consider that many industries are water intensive — for example, beverage producers use about 300 billion liters of water a year — these numbers aren't just surprising, they're cause for serious alarm. For food processing, it takes 4,800 liters of water to make a single kilogram of pork. That number increases to 15,500 liters to get the same amount of beef ready for the grocery store freezer.

But water woes aren't just for the food and beverage industries. It takes 10 liters of water to produce one sheet of paper, 91 to make a pound of plastic, 10,855 for a single pair of jeans  — and for one kilogram of leather, 16,600 will be used.

When you consider both current consumption and the predicted future constraints on water, it's clear that businesses must begin taking steps toward conservation now, and they should consider the following as they proceed.

Make water conservation a priority

Cut costs and consumption by researching manufacturing practices and seeing where improvements can be made. Also make sure employees are encouraged to cut usage in offices.

Show your company's commitment to the environment by incorporating these practices into your company's corporate responsibility policies. Consider Starbucks, which landed a spot on Portfolio's Green 11 list in 2008. While the company uses a significant amount of water to produce its beverages — it takes 140 liters of water to make a cup of coffee — it uses water-saving technology in equipment specifications. Efficient dishwashers, high-pressure water, and employees trained to operate water-efficient tools help to minimize the company's water consumption.

Involve the community

Involving the company in a program with the local water treatment plant or a local environmental organization will not only prove the business' commitment to the cause, but also improve its reputation and aid the community.

My company has partnered with the Beacon Institute, a not-for-profit environmental research organization that advances research, education, and public policy regarding rivers and estuaries. This collaboration will result in the first technology-based monitoring and forecasting network for a major American river and estuary. These tools will allow for minute-to-minute monitoring of the New York's Hudson River via an integrated network of sensors, robotics and computational technology that signals hazards or dramatic changes in this historic and commercially vital body of water.

Also consider sponsoring local events to help educate the community about your commitment to water and how the resource is specifically important to your geographic area.

Reach out to other companies — even competitors

Take advantage of the opportunity to form a partnership similar to the Beverage Industry Environmental Roundtable. Created in 2006, the organization brought together twelve companies—including Coca-Cola, Diageo, Nestle, Anheuser Busch InBev and PepsiCo—to exchange information on water reduction, reuse, drought preparedness and stewardship. The organization also collects and shares data and leading practices relating to water conservation and resource protection.

Continue to set trends

Staying on top of an ever-growing "green" industry is no easy task. But, if you dedicate your company to being a leader in the "green" space, it will eventually pay off no matter what industry you're in.

For example Levi Strauss & Co. recently partnered with Goodwill to create new clothing labels that encourage consumers to wash garmetns in cold water, line dry when possible and donate to Goodwill instead of tossing old clothing. While it might seem like a small step, it shows that every organization can find away to reduce its environmental impact.


While reducing water consumption and being environmentally responsible might initially be a challenge, keep in mind the work you'll be doing for your business, society and the planet. There is no substitute for water, so we must make every single drop count.

Sharon Nunes is the Vice President of IBM Big Green Innovations [1], a program which oversees development of product and service initiatives regarding the environment.

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(Water Management) NYC Urges Ban On Shale Gas Drilling In Watershed

NYC Urges Ban On Shale Gas Drilling In Watershed
Date: 05-Jan-10

NYC Urges Ban On Shale Gas Drilling In Watershed Photo: Tim Shaffer
A glass of water taken from a residential well after the start of natural gas drilling in Dimock, Pennsylvania, March 7, 2009.
Photo: Tim Shaffer

Shale gas trapped deep underground is considered one of the most promising sources of U.S. energy, but environmentalists and small-town neighbors of drilling operations -- and now the biggest city in the United States -- are seeking to limit its exploitation.
The drilling process known as hydraulic fracturing, or "fracking," involves blasting through rock with a mixture of water, sand and a proprietary list of chemicals used to split the shale formation and free trapped gas.
Steven Lawitts, the city's top environmental official, called fracking techniques "unacceptable threats to the unfiltered fresh water supply of nine million New Yorkers," putting the city at odds with the gas industry, which considers shale drilling completely safe.
"Based on all the facts, the risks are too great and drilling simply cannot be permitted in the watershed," said Marc LaVorgna, a spokesman for Mayor Michael Bloomberg.
The 2,000-square-mile (5,200-square-km) watershed is tiny compared to the largest known U.S. shale formation, which extends below the surface in much of Pennsylvania and parts of New York, Ohio and West Virginia.
The opposition from New York City adds heft to the ranks of fracking critics and could embolden state and local authorities elsewhere, though many are strapped for cash and badly need the revenue that comes with drilling.
Geologists say the Marcellus Shale formation could satisfy U.S. natural gas demand for a decade or more, providing a relatively clean form of fossil fuel and helping promote U.S. energy independence.
New York state Governor David Paterson, who will play a major role in deciding the future of drilling next year as he slashes state services to close a $3.2 billion budget deficit, said he was still listening to "all points of view."
"We've actually extended the public comment period because of the grave concern that so many who we trust, like the mayor, are raising in this issue," Paterson told reporters.
Major natural gas producers and oilfield service companies like Schlumberger Ltd and Halliburton Co have a stake in shale gas production, and Exxon Mobil cited the potential for unconventional gas production in its $30 billion bid to take over XTO Energy this month.
The deal includes a clause that would allow Exxon Mobil to back out if the U.S. Congress bans or severely regulates the process used to extract gas from shale rock.
Some companies like Chesapeake Energy Corp had announced they would not seek to drill in the New York watershed, which lies about 90 miles north of the city.
Terry Engelder, a Penn State University professor of geosciences, said New York City's demand may improve prospects for passage of the "Frack Act," federal legislation that would require gas companies to disclose the chemicals they use.
"It shines a brighter light on the Frack Act because New York is a significant enough fraction of the U.S. population that care will be taken," he said.
Ray Deacon, an analyst with energy-focused Pritchard Capital, acknowledged the reluctance of companies to provide details on the fracking fluid because "it's kind of the secret sauce that makes the rock break apart."
Shale drilling companies say the industry maintains strict safeguards to prevent any danger to water supplies. But neighbors of drilling in several states report fouled water and increased illness since drilling began.
Earlier this year, New York state proposed new rules that would allow drilling for natural gas in the Marcellus Shale formation. New York City is asking the state to exclude the watershed from the areas that can be drilled.
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