When to Dismount a Dead Horse
Posted by Cindy Mehallow March 19th, 2010 
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The Economist’s Corporate Citizenship Conference “Doing Well by Doing Good” wrapped up earlier last week and provided a variety of perspectives on what exactly needs to be done, how and by whom to restore our economy, corporate ethics and public trust. It was no surprise that the bleak economic situation was a recurring theme echoed by the speakers, but I was struck by the dichotomy of opinions, with some speakers expressing optimism, while others took a bleaker outlook on the economy and the role of corporate citizenship. One issue all the speakers did agree on was the need to replace failed policies, practices and attitudes, at societal, corporate and personal levels with a truly sustainable approach.
The Road from Ruin
Economist US Business Editor and New York Bureau Chief Matt Bishop kicked off the conference by pronouncing that the economic crisis offers the opportunity to reshape capitalism (no small feat). He admitted that he and the Economist have moved away from their belief that “The business of business is business” a la Milton Friedman. Given the magnitude of the problems facing our world, Bishop maintains that it is imperative for organizations the size of today’s global corporations to step up to the plate.
Reframing Cap and Trade
Posted by 3p Guest Author March 18th, 2010 View Comments
By Peter Fusaro, Founder, Wall Street Green Trading Summit
Cap and Trade has been hijacked, the wind taken out of its sails by climate change skeptics. More specifically, the issue of market-based solutions for addressing environmental problems has been utterly distorted. The truth of the matter is that markets have worked to drive efficient, environmental results.
One of the prime examples of this is the acid rain problem. In the US Northeast, it has been remediated in a cost effective way using environmental financial markets since 1995. The urban ozone (smog) problem has been lessened in 22 states due to the use of markets to reduce nitrous oxide (NOX) emissions since 1999. In fact, in the US today, there are 38 environmental financial markets that remediate environmental problems for air quality and water quality and protect endangered species.
What this means is that it’s time for the issue of cap and trade to be reframed. My argument is that environmental trading is only the facilitator to the implementation of cleaner technology and renewable energy. Cap and trade facilitates scaling of cleaner technologies by generating needed capital. And it has proven to be cost effective and adopted by industry with little violation of the law due to financial sanctions.
Can We Put a Price on Solving Climate Change?
Posted by Amelia Timbers March 18th, 2010 View Comments
Earlier this week, Lisa Zelljadt from Point Carbon wrote of her company’s new “Carbon 2010” report, which is a worthy attempt at covering the complex set of variables involved in creating and sustaining markets for carbon allowances. The report quantifies the responses from their proprietary data and marketing survey of approximately 1,500 carbon professionals who are all involved in some way in carbon markets/ resource finance (and who are disproportionately carbon traders).
It looks at the success of market-based carbon initiatives, with particular focus on the EU Emission Trading System, where problems may be used as case studies for the eventual U.S. carbon market (as sixty percent of the respondents still think will happen by 2015).
Thus far, most people involved in the day-to-day of carbon markets come from regulated organizations (output sources) and dealers—aggregators or middlemen between governments distributing allowances and the firms that need them for compliance. Europe is suffering from an EUA (EU Emission Allowance) oversupply, and illustrates some of the problems that can occur with mispriced carbon.
Carbon Markets: Trading to Stop Climate Change
Posted by 3p Guest Author March 16th, 2010 View Comments
By Elizabeth (Lisa) Zelljadt, Senior Analyst, Point Carbon
Every morning Mike walks into his London office and logs on to the Intercontinental Exchange, where he and most of his colleagues do all their work. He surveys the news for major political developments related to greenhouse gas emissions, then checks current and forward prices of fuels, and throws an eye on the weather. Finally, he sells or buys a few hundred thousand tons…of carbon.
Mike is a carbon trader, one of many financial sector workers who specialize in a commodity that is like pork bellies, scrap metal, or crude oil contracts—but was created entirely by an environmental policy called cap-and-trade.
With all the hype in the news, most people know how cap-and-trade works: regulators set a tonnage limit on the amount of pollution—a cap—that declines over time, and then allocate enough permits to equal the cap. Each permit is worth one metric ton of carbon dioxide equivalent (tCO2e). Emissions from all the entities covered by this cap cannot exceed that limit collectively, but on an individual basis, each can cut its carbon output in whatever way works best
ExxonMobil Gushing with Cash and Confidence
Posted by Bill DiBenedetto March 16th, 2010 View Comments
Here’s a news flash of sorts: ExxonMobil (XOM), the world’s largest publicly traded oil and gas company, has barrels of money and plans $28 billion in capital spending this year and about $25-$30 billion each year thereafter through 2014.
The company made more than $19 billion last year and generated cash flow of $28.4 billion. Flush with money and confidence, XOM says it is “well positioned for future growth” despite a volatile industry environment across a “range of market conditions.”
“Each of our three business segments, Upstream, Downstream and Chemical, outpaced our competitors,” Rex W. Tillerson, chairman and chief executive officer, said last week during the company’s annual presentation to investment analysts at the New York Stock Exchange.
A Light in the Dark: The Success of the U.S. Renewable Energy Certificate (REC) Market
Posted by 3p Guest Author March 16th, 2010 View Comments
By Dan Kalafatas, President, 3Degrees
It is tempting for environmental market advocates (like myself) to gnash their teeth as climate change misinformation and standard Washington gridlock continue to delay passage of climate change legislation that would create a national carbon market. However, in doing so, we are ignoring a bright light amidst the darkness – the stunning growth and impressive success of the U.S. renewable energy certificate (REC) market.
Driven by state Renewable Portfolio Standards (RPS), growing individual and organizational voluntary demand for renewable energy, and the development of a widely accepted standard and trusted registries, today’s vibrant and mature REC market is accelerating the development of a renewable energy economy. Perhaps if we are more vocal about the success of the REC market we can build the political support required to pass federal climate change legislation that uses markets to achieve our environmental goals.
Defining Corporate Citizenship
Posted by Cindy Mehallow March 15th, 2010 View Comments
How much of a role should business play in tackling global questions such as climate change, unemployment, restoring trust in the aftermath of the financial crisis and distributing international aid? What is the nature and extent of the private sector’s responsibility in resolving these issues? At what point should corporations step alongside government and help shoulder some of the burden? These questions, which go to the very heart of defining corporate citizenship and corporate social responsibility, are some of the issues that will be discussed at the Economist’s 2010 Corporate Citizenship Conference kicking off this week. In light of the financial crisis, this year’s convocation will rightfully explore restoring trust and increasing transparency in the financial markets and job creation, in addition to balance in international aid and post-Copenhagen strategies for moving forward.
The conference line-up features a veritable who’s who of big names in sustainability and leading thinkers from the public sector including: Diana Taylor managing director of Wolfensohn & Co. and former president of the World Bank; US Department of Labor deputy secretary Seth Harris; Loews Hotels chairman and CEO Jonathan M. Tisch; and Steve Case, co-founder of America Online and chairman and CEO of Revolution. A highlight will be a conversation with President Bill Clinton who will likely provide an update on the Clinton Global Initiative.
How Carbon Markets Can Deliver Local, Sustainable Development Throughout the World
Posted by 3p Guest Author March 9th, 2010 View Comments
Images courtesy of Kincentricity Social Carbon
By Boyd Cohen, co-founder, Kincentricity Social Carbon
Carbon trading is a $100+ billion global industry driven largely by the regulated markets in Europe, where most of the offset trading is done on the European Union Trading System (EUTS). The primary tool resulting from the Kyoto Accord for generating offsets for the EUTS is the Clean Development Mechanism (CDM). CDM is an instrument originally designed to enable countries and companies from the developed world to develop lower-cost, high quality carbon offset projects in developing countries.
While it has arguably succeeded with that goal, it has fallen well short of achieving one of its secondary goals, which is to enable local, sustainable development in the developing world.
Yes, massive new hydroelectric power plants in China create renewable energy sources for their population, but they also have detrimental impacts on local ecosystems and often cause the displacement of thousands of local villagers. Methane capture from an oil refinery in Argentina also can generate sizable amount of offsets for a profit but can easily lack local impact.
eBay Aquisition: Has World of Good Sold Out?
Posted by RP Siegel March 8th, 2010 View Comments
World of Good Inc., a company that has made a business of connecting artisans in developing countries with mainstream consumer markets, announced last week that eBay has fully acquired its brand and related assets. The company also announced that GreaterGood, a division of Charity USA has acquired its wholesale division and line of designer Fair Trade products. Existing relationships with retailers and artisan partners will be maintained. The terms of the transactions were not disclosed, but given eBay’s track record of significant acquisitions, we know that this is a company that believes in the adage, “you have to spend money to make money.”
We spoke with World of Good CEO Priya Haji, to understand the logic behind the sale and to ask her, “Has World of Good sold out?”
Triple Pundit: So what was the question you were trying to answer that ultimately led you to become a part of eBay?
Priya Haji: We started World of Good almost six years ago with the goal of opening much larger mainstream markets for small producers doing fair trade and sustainable products.
SEC Climate Change Guidelines Lead to New Shareholder Resolutions
Posted by 3p Guest Author March 5th, 2010 View Comments
By Dale Wannen
If recent talk about climate change hasn’t already rattled every CEO’s corporate cage, then yesterday’s news regarding shareholder resolutions should do the trick. It was announced during a phone-based news conference today that investors filed a record 95 climate change resolutions against companies ranging from coal mining to big box retailers. That’s a 40 percent increase over last year.
This is mostly due to the SEC’s recent guidance talk on climate change disclosure. As the SEC starts to keep a closer eye on these behemoth companies and their long-term impact on the environment, investors are clawing at an opportunity to voice themselves and have the SEC standing co-pilot.
Socially Responsible Financing For-Profit: An Emerging Opportunity
Posted by Bill DiBenedetto March 4th, 2010 View Comments
This is what the triple bottom line should be all about but maybe a Harvard Business Review article will put a firmer imprimatur on an emerging business opportunity for CEOs in the for-profit finance sector: Linking entrepreneurs and their companies with the necessary resources needed to create lasting social change.
Writing in HBR’s blog this week, Bill Drayton, the founder, chairman and CEO of Ashoka: Innovators for the Public Since 1980, says that since the late 1980s the financial industry has not kept up with the rapid change and growth occurring in the “citizen sector.” As a result, the “change makers of the citizen sector lack the financing options they need to make their projects successful and scalable.”
Without new sources of private capital “the citizen sector has to continue to rely on funding by governments and foundations,” Drayton continues. And “that’s far from ideal.”
3p on Carbon Trading: Will Markets Solve the Climate Crisis?
Posted by Tom Schueneman March 2nd, 2010 View Comments
Carbon offsets, carbon exchange markets, emissions credits, cap and trade, emissions trading. These assorted terms all describe the various forms of carbon trading, from the individual wishing to offset his or her airline flight, to heavy industry compliance with federally mandated emissions reductions schemes, to the speculator simply plying the market for profit. While the mechanics may differ from one program to the next, the fundamental idea is the same – the commoditization of carbon emissions.
By putting a price on carbon, market forces are brought to bear on the costs of emissions on the environment, sustainability, and human health. Costs that without such a mechanism are simply externalized. But sooner or later these market externalities must be accounted for. When the true costs are assessed through carbon trading, emissions are reduced, and investments in the transition to the coming new energy economy are given priority. Or at least that is the idea. What is the reality?
Follow along with Triple Pundit’s new carbon trading series as we pick the brains of some of the top experts in the field of carbon trading, carbon markets, and emissions reduction programs.
Carbon Emissions Meets Financial Reporting: No Time to Waste
Posted by 3p Guest Author March 2nd, 2010 View Comments
Image Source: Responsible Investor
By Lawrence E. Goldenhersh, president and CEO, Enviance, Inc.
In January of this year, the Environmental Protection Agency (EPA) and Security and Exchange Commission (SEC) implemented unprecedented new reporting that mandate thousands of companies—many for the first time—track and report their carbon emissions for 2010. Companies have quickly realized that auditable GHG data tracking and management will quickly move from a “nice-to-have” to a mandatory component of financial reporting. (Editor’s Note: for more info on the SEC reporting, please see our Gina-Marie Cheeseman’s coverage from January).
Because of the financial implications of carbon going on the balance sheet, organizations must be able to verify CO2 emissions, not just loosely estimate them with “spreadsheet” data collection. The snowball effect of GHG emissions included in financial reporting is a heightened risk for inaccurate data, but also a call-to-action for companies to reduce carbon emissions to meet EPA and SEC regulations.
What’s in Store for Waste Management?
Posted by Amie Vaccaro March 1st, 2010 View Comments
Ever since I was a small child I’ve wondered what happened to things when we threw them “away.” When I figured it out, I did all I could to prevent the tossing out of anything.
From the little experience I’ve had in the waste management industry in general, I’ve learned that landfill disposal can be very profitable, recycling can be profitable when played right but has tighter margins, and radical ideas like composting may not add to the bottom line at all, except to make your tree-hugging stakeholders happy. Knowing that, and knowing just how many of us there are producing tons of waste, I’ve always seen waste as a key problem area in need of attention and innovation.
It is for that reason that I have the good fortune of being able to attend Waste Management’s Industry Summit next week in Florida.
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