In a presentation to a session at the GLOBE 2014 conference in Vancouver, former Enbridge President and CEO Patrick Daniel gave a very realistic overview of how corporate responsibility to various groups has evolved over his 40 years in industry. He said that companies used to consider that shareholders, employees and customers were their primary communities but in more recent times the whole of society has become much more important, possibly even exceeding the previous three groups in importance for corporate success.
At the same time Daniel admitted that only a very small number of companies have recognized this, that for the corporation it is not just a matter of handing money out for community activities but actually engaging with broader society and many of the groups that society includes, and that many companies are finding it especially challenging to address their corporate social responsibilities. He said that he expects that in future years the matter of social license to operate will impact many more companies.
This is a GallonDaily live report from the floor of the GLOBE 2014 conference.
The 2014 edition of the biennial Globe conferences opened in Vancouver this morning. Each issue of Globe introduces new environmental technologies and approaches to an audience of visitors from Canada and around the world.
Although the Government of Canada has in recent years substantially withdrawn from Globe, increasing participation from the private sector seems to have more than made up the difference. The opening plenary was packed, trade show exhibitor are reporting good attendance, and the trade show floor seems to be almost as packed as usual, though some of the pavilions are smaller than in past years. Program highlights so far have included clean energy trends, the municipal role in the sustainability space, climate action, the social license to operate, and many more. A challenge of Globe has always been to cover so many interesting parallel presentations.
The Globe conference program is at http://2014.globeseries.com/ For those close to Vancouver, or able to travel at short notice, There will be many more interesting presentations on the subject of the business of the environment on Thursday and Friday, 27 and 28 March.
The US Chamber of Commerce Foundation’s Corporate Citizenship Center has published a 55 page report Achieving Energy and Water Security: Scalable Solutions from the Private Sector which describes how 25 major corporations and organizations with US connections have implemented programs to improve their water efficiency, energy efficiency, or both. The companies, which cover a wide range of sectors and operations, include:
- American Water
- Caesars Entertainment
- CH2M HILL
- General Motors
- Hilex Poly Co. LLC
- Pepco Holdings, Inc.
- Sears Holdings Corporation
- The Dow Chemical Company
- United Airlines
- Veolia Environment North America
- Wells Fargo
The report describes what each company has done and the results that have been achieved. In many cases he results, both environmental and economic, are very significant. There is way too much information to summarize here but highlights will be provided in an issue of Gallon Environment Letter later this year. The report may be accessed through a link at http://ccc.uschamber.com/document/achieving-energy-and-water-security-scalable-solutions-private-sector
For the first time since 2008, except for a brief time following the BP spill in the Gulf of Mexico, Americans are telling Gallup pollsters by a 9% margin that the environment is more important than economic growth. Perhaps not surprisingly, the results are split between Republicans and Democrats: two-thirds of Democrats say the environment should be prioritized higher, while about one-third of Republicans say the same thing. Gallup states that this is the largest partisan gulf since 1997, mainly as result of the sharp rise among Democrats prioritizing the environment higher than economic growth:
The percentage of Democrats choosing the environment over economic growth surged 11 percentage points in the past year and 20 points since 2011. This increase suggests that Democrats may believe the economy is improving and it is now acceptable to favour protecting the environment, even if it curbs economic growth. The 66% of Democrats who prioritize the environment over economic growth is the highest since 2000.
The percentage giving priority to the environment appears to decline with age: 60% of 18-29 year olds choose environment over economic growth while only 39% of those aged 65 and over make the same choice.
A detailed analysis of the poll results, which were taken earlier this month and for which the margin of sampling error is ±4 percentage points at the 95% confidence level, is available at http://www.gallup.com/poll/168017/americans-again-pick-environment-economic-growth.aspx
In 2010 the European Environment Agency published its first assessment of “global megatrends”, intended to provide advice to policymakers on key issues that impact, and should be considered in. national and international policy. This year those megatrend assessments are being updated. Chapter 8, Growing demands on ecosystems, has recently been published. Gallon Environment Letter will publish a summary of all of the reports when the compendium is completed later this year.
The Growing demands on ecosystems update concludes that:
- The continuing degradation of ecosystems across the world affects Europe [and, GallonDaily adds, North America] directly and indirectly. Diminishing global natural capital stocks may limit Europe’s ability to draw on natural resources elsewhere, thereby increasing pressures on European [and North American] ecosystems.
- As the world’s poor are most directly reliant on functioning ecosystem services, widespread ecosystem degradation can negatively influence poverty and inequality, which may fuel conflict and instability in regions with fragile governance structures.
- Failing to take advantage of cost-effective ecosystem-based solutions for climate change mitigation in other parts of the world may impose increased costs on Europe. Moreover, if ecological systems reach critical tipping points (for example Amazon forest dieback) it could result in unprecedented global environmental, social and economic implications.
Some of the findings of the EEA reported in this chapter include:
- global population growth, increased earnings and shifting consumption patterns have resulted in steadily increasing human interventions into the natural environment. Humans harvest biomass to provide for many aspects of their existence, including essentials such as food, fuels, fibres and construction materials. The associated conversion of land has wide-ranging impacts on ecosystems and the services that they provide, including their ability to maintain a healthy, stable environment.
- over the last 50 years, global per capita annual consumption of meat has almost doubled, increasing from around 23 kg to some 42 kg per person.
- per capita economic output is projected to triple by 2050, bringing changes in consumption patterns including a shift to increased meat consumption, which is comparatively resource intensive.
- pressures on terrestrial ecosystems may be aggravated by a rapid expansion in land allocated to cultivating bioenergy crops, as a means of reducing dependence on fossil fuels. In addition to potentially increasing food prices, biofuels generated from food crops such as grains, sugar cane and vegetable oils can also have significant ecological impacts. For example, they have been linked to deforestation and other land conversions at the expense of natural areas.
- bioenergy crops can also contribute to freshwater scarcity. One study estimates that the global water footprint associated with cultivation of bioenergy crops (i.e. direct and indirect water use across the entire supply chain) will increase ten-fold in the period 2005–2030. Mitigating associated pressures on ecosystems will depend in part on the technological and commercial emergence of bioenergy produced from residues of agriculture and forestry that do not require additional land.
- scenarios on how to meet the world’s food demand in 2050 suggest that even if water use is made much more efficient, the absolute agricultural intensification needed could lead to severe water stress in many world regions. This implies a threat to both human water security and to the functioning of ecosystems, including their capacity to provide essential services.
- towards the mid-21st century, climate change, forestry and bioenergy are expected to become more important drivers of biodiversity loss.
- two types of ecosystems have been identified as particularly threatened by depletion and loss of biodiversity: drylands and wetlands. Drylands host about 2 billion people, mostly in developing countries. Their destruction is continuing at an alarming rate, driven by the transformation of rangeland into cultivated cropland, resulting in problems such as water stress and soil degradation. The irreversible conversion of peatland and coastal wetlands (e.g. mangroves) for agriculture, aquaculture and human infrastructure is also likely to continue at very high rates.
- unsustainable fishing strategies are likely to result in reduced wild catches, increasing demands for farmed fish. Such aquacultures are likely to put pressure on terrestrial ecosystems given the associated need for crop-based feed.
- the benefits of protecting ecosystems and their associated services often far outweigh the costs. However, market systems seldom convey the full social and economic values of ecosystem services. As a result, market prices often incentivise unsustainable and socially undesirable decision-making about resource use and ecosystem management.
- thresholds, amplifying feedbacks and time-lag effects leading to ‘tipping points’ are considered widespread and make the impacts of global change on biodiversity hard to predict and difficult to control once they begin. Some studies even suggest that a planetary-scale tipping point (i.e. radical changes in the global ecosystem as a whole) might be approaching.
The report notes that
it needs to be emphasised that the complexity of highly interconnected human and natural systems introduces considerable uncertainty into projections and forecasts. As much as anything, the assessment of megatrends aims to encourage readers to acknowledge this interdependence and uncertainty. In so doing, it may help point the way towards systems of planning and governance better adapted to meeting the challenges ahead.
The complete Chapter 8 of the EEA’s Global megatrend update is available at http://www.eea.europa.eu/publications/global-megatrend-update-8
The hypothesis was that most Americans manage their lawns with water and fertilizer in much the same way. The research showed that US lawn care behaviours are more differentiated in practice than in theory. The conclusion: “even if the biophysical outcomes of urbanization are homogenizing, managing the associated sustainability implications may require a multiscale, differentiated approach”.
The survey of 9500 residents in six US cities showed that, in the past year, 63 percent of respondents fertilized their yards and 79 percent watered them, but the variations between neighbourhoods and cities were quite significant. Clearly a ‘one size fits all’ approach to sustainability education is unlikely to achieve optimum success. Lead researcher Colin Polsky, Associate Professor in the Graduate School of Geography of Clark University in Worcester, Massachusetts, is quoted by NSF as stating “Responding to lawn care-related environmental challenges may require locally-tailored solutions in more cases than we thought”.
While this research focussed on the ways in which people manage their lawn monocultures, which GallonDaily considers to have generally escaped some much deserved environmental criticism, the concept of varied social practices in areas in which business and governments assume homogeneity, such as residential kitchen, recycling, composting, waste management, and personal transportation practices, may require further study and adaptation of educational and system-related practices, in Canada as well as in the US.
A National Science Foundation press release including quotes from the researchers can be found at http://www.nsf.gov/news/news_summ.jsp?cntn_id=130552&org=BIO&from=news
An abstract and a link to the full article, small fee required, is at http://www.pnas.org/content/early/2014/03/06/1323995111.abstract?sid=be65a9fc-7f1a-487c-8815-a4ba3ad05ec7
The April 2014 issue of Gallon Environment Letter will discuss some of the environmental problems associated with urban lawns. Subscribe now by visiting http://www.cialgroup.com/subscription.htm. New registrations to our free subscription will end on May 1st 2014, after which date only paid subscriptions will be available.
Walmart recently used its annual Global Sustainability Milestone Meeting to highlight progress with its Sustainability Index, an index used to track the environmental impact of its products, and to announce its future sustainability objectives. To date, the index has been applied to 200 product categories and 1,000 suppliers.
Dan Bartlett, Executive Vice President Corporate Affairs told the meeting that, for Walmart, sustainability is always a business-led process. Bartlett said that, to sustain over the long haul the type of achievements and objectives that Walmart has, sustainability has to be driven from within the business.
Among Walmart’s sustainability objectives:
- increased recycling and use of recycled materials
- reducing or eliminating the use of certain priority chemicals and their replacement with greener alternatives
- reducing fertilizer use in agriculture by requiring suppliers who use commodity grains, corn, wheat and soy in their products to develop a fertilizer optimization plan
- expanding the sustainability index to Walmart operations in Chile, Mexico, and South Africa
- improving energy efficiency throughout the supply chain
An approximately 90 minute video of the Milestone Meeting, which includes presentations on some of the initiatives already taken is available at http://news.walmart.com/events/global-sustainability-milestone-meeting-february-2014
Walmart’s 170-page 2013 Global Responsibility Report is at http://cdn.corporate.walmart.com/39/97/81c4b26546b3913979b260ea0a74/updated-2013-global-responsibility-report_130113953638624649.pdf
As the progress summary beginning on page numbered 152 of the Global Responsibility Report shows, Walmart does not always achieve its objectives (eg. packaging reduction), some objectives are adjusted while still in progress, and some are rather small, but overall Walmart sustainability initiatives provide useful ideas as well as some inspiration and leadership for other food and consumer products companies.
New Jersey is one of several states in the US that is using legislation to prevent Tesla Motors, the major manufacturer of 100% electric cars in the US, from selling its vehicles directly to consumers through company-owned outlets. Tesla’s view is that this is a barrier to sales of its innovative vehicles.
Tesla chairman Elon Musk has posted a letter To the People of New Jersey on this topic. Among the points made in the letter:
- under pressure from the New Jersey auto dealer lobby to protect its monopoly, the New Jersey Motor Vehicle Commission, composed of political appointees of the Governor [Christie], ended [the] right to purchase vehicles at a manufacturer store within the state.
- when Tesla came along as a new company with no existing franchisees, the auto dealers, who possess vastly more resources and influence than Tesla, nonetheless sought to force us to sell through them.
- the reason that we did not choose to do this is that the auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none.
- auto dealers have a conflict of interest in that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car. Also, all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer, so no visit to the service center is required for that either.
- I [Musk] have made it a principle within Tesla that we should never attempt to make servicing a profit center. It does not seem right to me that companies try to make a profit off customers when their product breaks. Overcharging people for unneeded servicing (often not even fixing the original problem) is rampant within the industry and happened to me personally on several occasions when I drove gasoline cars.
- the rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you! . . . As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.
- in North Carolina, a Triangle Business Journal poll found that 97 percent of people polled said Tesla should be allowed to sell cars directly. A poll by the Austin Business Journal showed that 86 percent of respondents were in favor of direct sales, and in a Los Angeles Times poll 99 percent of respondents came to the same conclusion.
- it should also be noted that this regulation deals only with sales, so our service centers will not be affected. Our stores will transition to being galleries, where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store. However, that can still be done at our Manhattan store just over the river in Chelsea or our King of Prussia store near Philadelphia.
- we would like to thank the many people who showed up in Trenton, New Jersey, on Tuesday to support Tesla and speak out against the MVC’s back-door tactics in passing this regulation change without public consultation or due process. It was an amazing response at very short notice and much appreciated.
It would seem that New Jersey and other states moving to regulate how electric cars are sold are seeking to prop up existing automobile dealership systems. That is about as wise as legislating that cars have to be serviced at blacksmith shops! Moving to a more sustainable society inevitably means change and that change can come about in one of two ways:
- existing businesses evolve to a more sustainable model; or
- existing businesses close and are replaced by new more sustainable businesses.
In reality, both models are likely to evolve simultaneously but successful companies are probably going to want to follow the former. Using regulations to try to protect those which do not wish to change is unlikely to be a viable pathway to a more sustainable future.
Elon Musk’s letter To the People of New Jersey can be found at http://www.teslamotors.com/blog/people-new-jersey. More information from Tesla’s perspective is at http://www.teslamotors.com/blog/defending-innovation-and-consumer-choice-new-jersey.
The whole flap seems to GallonDaily to be something of a tempest in a very small teapot. Bloomberg news experts project auto sales in the US will about 16 million this year. Tesla production in 2016 is projected to reach 100,000, or 0.6% of total sales if all Tesla’s built are sold in the USA. However, the battle is interesting because it is indicative of the corporate opposition sometimes faced by companies that introduce new more sustainable mass-market technologies.
Canada’s Prime Minister Harper announced the conclusion of a free trade agreement with South Korea earlier this week. There is still no full text for the agreement but Foreign Affairs, Trade and Development Canada has released an Overview and Final Agreement Summary document. It is unclear as to whether the agreement will put in place a separate environment agreement, as with NAFTA and other trade agreements which Canada has ratified or whether environment will be included in the main agreement. However, it appears that environment matters will be addressed by committees, working groups, or other bodies under the joint trade commission.
Key environmental elements of the agreement, as described in the summary, which appears to some extent to be a promotional document, include:
- Ambitious environmental obligations consistent with Canada’s other agreements, including commitments to:
- maintain high levels of environmental protection, effectively enforce environmental laws, not waive or derogate from such laws to promote trade or investment;
- ensure transparency and public participation in the making of such laws, if any; and
- reaffirm commitments to multilateral environmental agreements Canada and South Korea have ratified.
- A framework for cooperation in areas of mutual interest.
- A dispute resolution process to address any questions regarding compliance, including review by an independent panel of experts whose recommendations will be made publicly available.
- Canada’s industrial good sectors (such as chemicals and plastics, information and communications technology, aerospace, metals and minerals, medical devices, and textiles and apparel), agricultural and agri-food products, wines and spirits, fish and seafood, and forestry and value-added wood products, will benefit from more trading opportunities and duty-free access to South Korea.
- Canada’s world-class service sectors, including professional services, environmental services and business services, will also benefit from improved market access.
FATDC states that products of export interest include (incomplete list):
- unwrought and unalloyed aluminum, aluminum alloys, unwrought nickel, nickel powders, certain ferro-alloys, and cobalt powder.
- ethylene glycol, germanium oxides and carbides and catalysts.
- ethylene polymers, polyamides and self-adhesive flat plastics.
- antibiotics, certain other medicines and anti-tuberculosis medications.
- diagnostic/laboratory reagents, medical apparatus parts, and thermometers.
- certain nitrogenous, potassic and phosphatic fertilizers as well as fertilizers containing two or more of these elements.
- liquefied natural gas
- lumber, plywood and oriented strand board.
- wheat, pork and pork offal, hides, skins and furs, refined and crude canola oil, malt and prepared foods, meats, grains, oilseeds and pulses.
- rye whisky and ice wine.
Other measures of possible environmental interest, as described by the FATDC summary, include:
- WTO rights and obligations to help ensure that sanitary and phytosanitary measures, which governments use to regulate the protection of human, animal and plant life and health, are not used as a cover to unnecessarily restrict trade.
- Building on the WTO Agreement on Technical Barriers to Trade and incorporates its substantive provisions to encourage greater transparency and cooperation between Canada and South Korea on standards-related measures, including on conformity assessment.
- The Agreement will provide a level playing field for Canadian service suppliers against key competitors from the United States and the European Union, both of whom have implemented their own respective free trade agreements with South Korea.
- A “negative list” approach for listing reservations to the obligations of the cross-border trade in services chapter, which means that everything is open unless otherwise listed in a reservation.
- Any future changes designed to make it easier for Canada’s service providers to access the South Korean market (or for Canadian investors to obtain better treatment) will be locked in every time they result in improved access. This is referred to as the “ratchet mechanism.” This mechanism means that if South Korea liberalizes a law, policy or regulation that makes it easier for Canadians to conduct their services or investment activities in South Korea, the liberalization becomes South Korea’s new obligation under the Canada-Korea Free Trade Agreement.
- Nothing in the Canada-Korea Free Trade Agreement prevents governments from regulating in the public interest, including in areas related to the delivery of public services, the provision of preferences to Aboriginal peoples or the adoption of measures to protect or promote Canadian culture. For example, public services such as health, public education and other social services have been excluded from Canada-Korea Free Trade Agreement obligations.
- Temporary-entry provisions will provide new, preferential access to the South Korean market as well as increased transparency and predictability, facilitating movement between Canada and South Korea for business visitors, traders and investors, intra-company transferees, professionals (contract service suppliers and independent professionals) and their spouses.
- Canadian firms can send their employees to South Korea to fulfill service contracts, for instance, in the science, engineering and information technology fields. Canadian independent professionals (i.e. self-employed professionals contracted directly by a South Korean or South Korean company), such as architects, engineers, management consultants and veterinarians, may enter the South Korean market with a pre-arranged contract.
- Canadian businesses are to be treated no less favourably in South Korea than South Korean businesses, will further reduce the risks associated with investing abroad.
- The investment chapter provides protection against discriminatory treatment, protection from expropriation without prompt and adequate compensation, and access to independent international investor-state dispute settlement.
- Canadian suppliers will have additional access to procurement by South Korean central government agencies, for contracts valued above 100 million South Korean Won ($100,000). South Korea will have access to Canadian central government procurement opportunities for contracts valued above $100,000. Canada and South Korea will have commitments in relation to sub-national procurement (provincial, territorial or municipal government procurement) once the revised WTO GPA comes into force.
- Includes a provision on the relationship between Canada-Korea Free Trade Agreement obligations and certain multilateral environmental agreements (MEAs). This ensures that Canada will be able to fulfill its MEA obligations without facing trade challenges.
The complete text of the 51 page summary document is available at http://international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/korea-coree/overview-apercu.aspx#seven
The International Renewable Energy Agency was founded in 2009 with the objective of becoming a powerful force in advancing the widespread adoption and use of renewable energy. It is headquartered in Abu Dhabi and counts 130 countries, including Australia, the UK, the USA, and the European Union as members. Canada has not applied to become a member.
With the objective of encouraging a doubling of renewable energy’s global market share by 2030, IRENA has recently published a very useful and readable global Renewable Energy Roadmap. About Canada the research found that:
Canada has abundant renewable energy resources, and renewables can account for one-third of Canada’s Total Final Energy Consumption by 2030. Biomass-fired industrial combine d heat and power plants can double the sector’s renewable energy share, and a wide portfolio of renewable energy technologies would account for three-quarters of the country’s total power generation. Important policy initiatives exist on the state level.
The report urges a series of initiatives under the following headings if the doubling of renewable market share is to be achieved:
- Planning realistic but ambitious transition pathways
- Creating an enabling business environment
- Managing knowledge of technology options and their deployment
- Ensuring smooth integration into the existing infrastructure
- Unleashing innovation
The roadmap presents a series of pathway elements which it states will achieve a global renewable energy share of at least 30% by 2030. It concludes that the technologies are already available today to achieve this objective. Energy efficiency and improved energy access can advance the share of renewables in the global energy mix to as much as 36%. Going further will require thinking “outside the box”, with early retirement of conventional energy facilities, technology breakthroughs, and consumer-driven societal change.
On the matter of cost, another IRENA report, Renewable Power Generation Costs in 2012: An Overview, finds:
- Renewables account for almost half of new electricity capacity installed and costs are continuing to fall. The rapid deployment of renewables, working in combination with high learning rates, has produced a virtuous circle that is leading to significant cost declines and helping to fuel a renewable revolution.
- The levelised cost of electricity (LCOE – the price at which electricity must be generated to break even over the lifetime of the project) is declining for wind, solar PV, concentrated solar power, and some biomass technologies, while hydropower and geothermal electricity produced at good sites are still the cheapest way to generate electricity.
- The rapid growth in the deployment of solar and wind is driving a convergence in electricity generation costs.
- Further equipment cost reductions can be expected to 2020, which will lower the weighted average LCOE of renewables.
- Rapid cost reductions in renewable power generation technologies means that up-to-date data are required to evaluate support policies for renewables, while a dynamic analysis of the costs of renewables is needed to decide on the level of support.
The IRENA report REmap 2030: A Renewable Energy Roadmap – Summary of findings is available at http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID=375
The IRENA policy brief : Renewables becoming more competitive worldwide is available at http://www.irena.org/factsheet/index.aspx?mnu=cat&PriMenuID=16&CatID=146