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Big Oil Carbon Pricing Disclosure a Diversion?

[fa icon="calendar'] Dec 17, 2013 12:53:33 PM / by Carol Pierson Holding

By Carol Pierson Holding

One of the more solid tenets of Big Oil dogma has always been that carbon pricing, whetherCarbon pricing a simple tax or a market-based cap-and-trade system, is terrible and conservatives must stand in unison against it. Daily Caller reporter Michael Bastach, a former Koch Institute Intern, confirmed this recently: “This vote against a carbon tax in the (American Legislative Exchange Council) ALEC meeting in Chicago … comes after Republicans in both the House and the Senate voted unanimously against a carbon tax earlier this year.”

So it was a surprise to read the December 5 New York Times headline “Large Companies Prepared to Pay Price on Carbon.” Seemed a leap from what the real news was: according to the article, Carbon Disclosure Project, now CDP, released research findings that big companies have been figuring a carbon tax into their financial models for some time.

Well, of course they have, and we knew that.

CDP itself said as much. Its 2012 report predicts that companies will act ahead of regulation: “80% of the Carbon Disclosure Leadership Index (CDLI) include climate change information in their annual reports (non-CDLI: 49%).”

Shell’s New Lens Scenarios predicted that in 2020, “emissions are heavily taxed.”

And California is implementing Cap and Trade.

The non-news “news” made the top right hand column of the New York Times front page, placement reserved for the day’s most important story. The same story seemed to appear everywhere at once, from Huffington Post’s Politics Section to Reuters and a week later, Forbes.

But still, why is this major news? And why now?

Certainly, the media has recommitted to environmental coverage. New York Times Public Editor Margaret Sullivan ended her impassioned commitment to environmental reporting with a quote from Al Gore, “The survival of human civilization is at risk. The news media should be making this existential crisis the No. 1 topic they cover.” The heat is on.

But my bet is that the news included, for the first time, the specific price per ton for carbon that each company is using. Exxon’s bet is $60; BP and Shell use $40; the lowest number is $6. CDP’s mission is to give investors data they can use to motivate companies to disclose their environmental impacts and take action to reduce them. It’s difficult for investors to make risk projections based on generalized corporate statements of intent. Much easier when the company publishes actual cost projections, as the respondents to CDP did. More than just another admission of responsibility, this is vital news for investors and confirms that CDP respondents are serious about carbon pricing.

Or maybe CDP respondents finally took a hard look at what’s actually at stake.

According to CDP, if oil and gas companies don’t come out for carbon pricing, the risk is delayed projects, further divestment pressure and, at the worst, threats to their license to operate.

Even when carbon pricing is enacted, profits will be safe. Consumers will end up paying for carbon taxes in any guise through higher energy bills, as they have in the past.

Stock prices won’t be hurt – in fact, investors like the certainty of carbon pricing. MarketWatch said of the announcement, “Big Oil is straying from conservative orthodoxy and making long-term financial plans under the assumption the government will force them to pay a price for carbon pollution as a way to control global warming — and Exxon Mobil Corp is better prepared than others to face the new expense” because of its investments in natural gas, which has lower measurable emissions.

[csrhubwidget company="Exxon-Mobil-Corporation" size="650x100" hash="c9c0f7"]

The potential opportunity from Big Oil embracing carbon pricing and accepting its responsibilities, as Exxon did in openly acknowledging to the New York Times that carbon pollution from fossil fuels contributes to climate change? A reputational turn-around that could result in higher stock prices.

The most cynical explanation for the timing of the “news” is that that Big Oil is looking at carbon prices as a distraction from the real threat that fossil fuel production will be regulated out of business. They stimulated salacious delight in exposing their actual numbers and changed front page chatter from what had been dominant, that major public funding sources from the Ex-Im Bank to the World Bank would no longer lend to coal projects. When the administration nearly doubled its internal carbon price earlier this year, energy companies immediately jumped in – to demand the calculations be open to public comment. Carbon pricing wrangling could divert the media from more important stories.

Photo courtesy of Carbon Visuals via Flickr CC.


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 8,400+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,400+ companies from 135 industries in 104 countries. By aggregating and normalizing the information from 290+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.


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[fa icon="comment"] 0 Comments posted in ALEC, Carbon Disclosure Project, Carbon pricing, Ex-Im, Exxon, fossil fuels, World Bank, Shell, Uncategorized, Margaret Sullivan, BP, Carol Pierson Holding, CDP, Michael Bastach

Assigning Corporate Blame for Global Warming Now Possible

[fa icon="calendar'] Nov 26, 2013 10:08:51 AM / by Carol Pierson Holding

By Carol Pierson Holding

Three recent headlines offer disturbing news to climate advocates. Together, they show climate changecatastrophic aggression from the fossil fuel producers.

First, Huffington Post reported on predictions from the International Energy Agency (IEA) that the U.S. will by bypass both Saudi Arabia and Russia in oil production by 2016 “at the latest,” a year earlier than it predicted in 2012. The U.S. will be world leader in oil production, subsuming climate to energy self-sufficiency.

The second astonishing headline covered the Climate Accountability Institute’s most recent study, as reported by Suzanne Goldenberg for The Guardian: “Just 90 companies caused two-thirds of man-made global warming emissions.” The list is topped by state-owned monopolies in China and Russia, with well over 8% each, and includes 50 fossil fuel investor-owned firms, including such widely recognized brands as Chevron, Exxon, BP, Royal Dutch Shell, British Coal Corp, Peabody Energy and BHP Billiton.

[csrhubwidget company="Chevron-Corp" size="650x100" hash="c9c0f7"]

The list’s top 20 produced nearly 30% of historical emissions. Chevron alone produced 3.5% of total global emissions and Exxon produced 3.2%; the U.K.’s BP and Shell are close behind. We’ve known the primary sources of carbon emissions for some time, but this study quantifies the relative damage each has done. It’s shocking all over again.

The third depressing headline is about the failure of the UN Framework Convention on Climate Change which just concluded two weeks of meetings in Warsaw on Friday. As the New York Times reported, talks stalled because the developed countries refused to pay the $100 billion they’d promised to underdeveloped countries, which suffer the worst of climate change impacts.

But it’s not just developed countries that are responsible for emissions. As Naomi Oreskes, professor of the history of science at Harvard and co-founder of the Climate Accountability Institute, explained in The Guardian article, "There are all kinds of countries that have produced a tremendous amount of historical emissions that we do not normally talk about. We do not normally talk about Mexico or Poland or Venezuela. So then it's not just rich v poor, it is also producers v consumers, and resource rich v resource poor ."

Not surprisingly, the entities most at fault for carbon emissions flaunt their disdain for the U.N.’s process. As evidence, the environmental NGO 350.org cites this fact: “The Polish government not only allowed corporate sponsors for the talks, but co-sponsored a major coal summit during the negotiations. It’s hard to see the U.N. gaining any traction around proposed financial consequences for countries.

But there are consequences for investor-owned companies. We know who those companies are, and now we know how much each is to blame.

Compare the problem of assigning blame and penalties for emissions to the 2008 financial crisis. At first, the task seemed impossible. It was too complex. The problem was systemic. Those who might be at fault were just too powerful. There was no way to parse the blame.

But with the force of public outrage and regulatory will and enough time to unravel specific causes, that’s changing.

Five years later, JP Morgan is the first to be fined, $13 billion for corrupt mortgage practices alone. And while many argue that financial penalties have not hurt the bank, it suspended stock buybacks last year and more could happen again to accommodate growing fines and penalties. And at least one analyst, Oppenheimer’s Charles Peabody, cut the bank’s 2013 earnings estimate by 12.5%.

So far, the only blame fossil fuel companies have suffered has been for oil spills such as Chevron’s currently contested $19 billion fine for polluting in Ecuador. But fossil fuel industry hubris towards global warming is pushing the same combination of public outrage and regulatory will as resulted in financial penalties for powerful banks. And now, thanks to the IEA report, we have the piece that took longest in punishing the banks, a way to quantitatively parse blame.

It’s a long game but it looks like the most recent combination of events —the U.S. becoming the world’s top oil producer, specific emissions numbers making it easier to assign blame, and failure at the U.N. — might just enable a remedy, at least in the U.S., forcing financial penalties on fossil fuel companies that more accurately reflect their true costs.

Picture courtesy of lightsinmotion via Flickr cc.


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 8,400+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,400+ companies from 135 industries in 104 countries. By aggregating and normalizing the information from 290+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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[fa icon="comment"] 0 Comments posted in BHP Billiton, Climate Accountability Institute, climate change, Exxon, fines, fossil fuel companies, global warming, Huffington Post, International Energy Agency, Polish government, JP Morgan, Naomi Oreskes, Suzanne Goldenberg, Uncategorized, oil production, penalties, Royal Dutch Shell, The Guardian, UN Framework Convention on Climate Change, BP, Carol Pierson Holding, Chevron, global emissions, Peabody energy, stock buyback

Ikea’s UK Solar Is Boon For U.S. Brand

[fa icon="calendar'] Oct 8, 2013 11:02:18 AM / by Carol Pierson Holding

By Carol Pierson Holding

Ikea’s announcement that it would sell solar panel solutions in its UK stores was startlingUK solar for any number of reasons. Ikea may be a leader in renewable energy for its own operations, with over half a million solar panels installed on its store and factory roofs and a fleet of its own wind turbines. But solar power for its customers?

From a business perspective, it makes little sense. Margins on solar panels are very thin, especially at Ikea’s prices. And this year, with China suppliers awash in panel inventory, wholesale panel prices have been extraordinarily low.

Ikea’s one year pilot project at its Lakeside UK store near London sold “one photovoltaic (PV) system almost every day.” They’re not running out the door, despite generous government incentives in the UK.

PV systems require a new business model for Ikea, requiring installation and maintenance services. Ikea’s panel supplier is Hanergy Holding Group Ltd, a privately-held Chinese company whose panels may be subject to “quality, environmental, after- sale service and product warranty concerns.” One wonders how quickly other franchise owners will take on the reputational risk of the solar panel business.

If Ikea decides to roll out its solar panel program in the U.S., it will face competition from stores experienced in home installations such as Lowes and Home Depot, which has been advertising and installing solar panels since 2005 through its partnership with BP.

There are plenty of potential problems with Ikea’s solar panel business. But from a branding perspective, it makes total sense. As early as 2003, culture watchers, environmentalists and even designers have found fault with the underlying ethic of Ikea’s approach. In a short piece on ethics in graphic design, Ikea is charged with designing its products with planned obsolescence in mind. In 2009, Salon reviewed Cheap: The High Cost of Discount Culture, Ellen Ruppel Shell’s criticism of our cycle of consumption that is destroying the environment and harming labor as well. Focused on discount chains like Wal-Mart and Target, Shell “gently damns” Ikea for its cheap, disposable products that are as bad for the environment as Wal-Mart’s. The environmental blog along the trail aptly called Ikea “consumerism on steroids.”

[csrhubwidget company="IKEA-group" size="650x100" hash="c9c0f7"]

A recent glance at Ikea’s U.S. consumer web site reinforces this idea: most of the site’s new offerings are doo-dads and children’s toys.

Now, with its solar offerings, negative impressions associated with Ikea’s disposable “stuff” could be tempered by solar panels in the stores. The company’s 2012 Yearly Summary launched its campaign of “People & Planet Positive.” But the greenwashing of the last two decades has put consumers on alert to eco claims that are mere promotion. Ikea’s success with solar panels to generate energy for its own use has been much ballyhooed. Solar for consumers is its next big chance to reinforce its good guy mantle.

Not a moment too soon. A new study by BBMG, GlobeScan and SustainAbility found that—

“…the sustainability proposition has changed from being the ‘right thing to do’ to being the ‘cool thing to do’.  …For decades, green marketers have been speaking to the wrong consumers, assuming that by engaging the most committed ‘advocates’ we would create significant business growth, cultural relevance and change at scale. What makes Aspirationals so compelling is that they combine an authentic commitment to sustainability with a love of shopping, design and social status, aligning economic, cultural and social forces to shift the way we shop.”

For consumers, Ikea’s long-admired design sensibility is intertwined with its sustainability. The chain’s commitment to affordability doesn’t have to fight with perceptions of sustainability. But Ikea must tread very carefully to preserve all three. A potential money-loser like solar panels could boost its environmental reputation and enhance its brand’s coolness. After all, the announcement about its UK stores carrying solar panels was carried widely across U.S. consumer, environmental and business media. So far, it looks like a branding home run.

Photo courtesy of lydia_shiningbrightly via Flickr CC.


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 8,300+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,300+ companies from 135 industries in 104 countries. By aggregating and normalizing the information from 270+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.


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[fa icon="comment"] 0 Comments posted in Aspirationals, Ellen Ruppel Shell, GlobeScan, PV, Uncategorized, Lowes, People & Planet Positive, photovoltaic system, sustainability, Target, BBMG, BP, Carol Pierson Holding, Hanergy, Home Depot, Ikea, solar panels, WalMart

March Data Madness for CSRHub

[fa icon="calendar'] Mar 18, 2013 9:00:18 AM / by Bahar Gidwani

By Bahar Gidwani

CSRHub recently extended the historic data available to its subscribers back to 2008.  Our users can now study the month to month change in sustainability performance for thousands of companies from December 2008 to the present.

We current rate 7,200 companies, using data drawn from more than 200 sources.  Our data set has been growing steadily at about 100 new companies rated per month.

March Madness

We use the wide range of data types and perspectives our sources give us to adjust and normalize our data.  We used normalization factors based on our robust 2010 to 2012 data sets to adjust the more limited data sets we had for 2008 and 2009.  As a result, our ratings have remained remarkably stable.

CSRHub March data

Any registered CSRHub user can see a chart that shows the corporate social responsibility (CSR) performance of the companies we track, since 2008.  In many cases, the chart will show partial ratings for a number of months, and a gradual build towards a full rating.  The consequence of a CSR problem can often be tracked visually.  For instance, see these charts for BP following the Gulf Oil spill and the effects on Tepco’s ratings of the Fukishima meltdown.

BP

The Deepwater Horizon oil spill occurred in April of 2010.  By October, all of BP’s ratings had begun to fall.  The worst damage occurred in its Community category score—which fell from the low 60s to the low 40s.  BP’s overall score stabilized in the middle 50s by early 2011 and has remained in that area since then.

TEPCO

Japan was struck by a major tsunami on March 11, 2011.  Tepco’s Fukishima reactor became a worldwide center of attention in the weeks that followed.  Tepco’s environmental score took an immediate hit, followed by drops in its governance and employee scores as more details emerged of how the company had handled the event.  A number of governance changes in late 2011 and 2012 have brought that score now to a new high.

CSRHub professional level subscribers can “roll back” our system to any month in the period.  They can see which sources were available for each company in the system at any point in time.  They can also do historic benchmarks and analysis of long-term trends in corporate social responsibility (CSR) performance.

Several university researchers have already launched studies, using this newly expanded data set.  We expect their work to reveal many insights that we can share with you, as they become available.


Bahar Gidwani is a Cofounder and CEO of CSRHub. Formerly, he was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses and has experience building a multi-million visitor Web site. Bahar holds a CFA, was a partner at Kidder, Peabody & Co., and worked at McKinsey & Co. Bahar has consulted to both large companies such as Citibank, GE, and Acxiom and a number of smaller software and Web-based companies. He has an MBA (Baker Scholar) from Harvard Business School and a BS in Astronomy and Physics (magna cum laude) from Amherst College. Bahar races sailboats, plays competitive bridge, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 7,000+ companies from 135 industries in 91 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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[fa icon="comment"] 1 Comment posted in Bahar Gidwani, community, CSR, data, governance, Uncategorized, ratings, BP, CSRHub, employees, environment, gulf oil spill

Apartheid a Model for Climate Change?

[fa icon="calendar'] Aug 1, 2012 10:56:22 AM / by Carol Pierson Holding

By Carol Pierson Holding

How many of us remember the “Crying Indian” from the early 70s? In that public service ad, a Native American (played by an Italian-American actor) canoes down a gorgeous stream, encountering floating trash, smokestacks and a beach littered with refuse. As he passes a crowded highway, a passenger throws garbage out the window. The camera pans to his face, where one tear makes its way down his craggy cheek.

That unforgettable image marked the start of the mass ecology movement and became a symbol almost as powerful as Earth Day. It also reinforced Native Americans as powerless victims of our culture’s wanton appetites.

Last week, some forty years after the Crying Indian, Native Americans are taking mattersclimate change into their own hands. Four tribes from the Olympic Peninsula in Washington State hosted a symposium in Washington D.C. at the Smithsonian's National Museum of the American Indian to address climate change.

Called “First Stewards: Coastal Peoples Address Climate Change,” this gathering of coastal tribes from all regions in the US and its Pacific Island territories engaged sponsors from US land management services within the US Department of the Interior and partners from environmental organizations such as The Nature Conservancy.

As I read the daily blog from the symposium, I was struck by the heartbreaking stories of tribes whose livelihoods are built on the rapidly disappearing bounty of nature. These embattled peoples are once again suffering the brunt of our collective rapacity, this time in territory degradation and species loss.

But this time, Native Americans insist on being part of the solution. And some elements within our government agree. Daniel J. Basta, director, NOAA’s Office of National Marine Sanctuaries, says, “Coastal indigenous people have internalized thousands of years of rich, place-based knowledge of climate change and its impact on humans, and adaptive behavior. Their experience is extremely valuable today and can help all of us as the world looks for ways to adapt.”

We need knowledgeable people to offer ideas for adaptation. But we also need passionate leaders to lead the fight for a long-term solution. Native Americans have rarely been successful at holding off those with great power from doing exactly what they want. But Natives are angry. Ann Marie Chischilly, an environmental professional and Navaho tribe member, urges fellow Natives, “Get mad! Get motivated and get involved.” And what better symbol in the fight to stem climate change than America’s first inhabitants?

But any good fight requires an antagonist, the more ruthless the better. And who could we blame that could make any real difference? The car companies have already embraced higher mileage requirements and electric cars. Who else is there?

In his cover story for Rolling Stone, “Global Warming's Terrifying New Math,” Bill McKibben suggests a candidate for villain, the oil companies. His “terrifying new math” estimates the value of fossil fuel reserves held by the fossil fuel industry at tens of trillions of dollars. Hence the seemingly endless resources the oil industry spends to stop any attempt to regulate its businesses.

And if we burn all of those reserves as the oil companies and their investors hope? CO2 levels will rise way past the level at which the human race can survive.

Indeed, this all-powerful adversary can only be stopped through a planet-wide moral outrage not seen since the anti-Apartheid movement. McKibben quotes Bob Massie, a former anti-apartheid activist who helped found the Investor Network on Climate Risk:

"Given the severity of the climate crisis, a comparable demand that our institutions dump stock from companies that are destroying the planet would not only be appropriate but effective. The message is simple: We have had enough. We must sever the ties with those who profit from climate change – now."

The successful battle to end Apartheid had its clear villains, Apartheid supporters, its effective change agents in the international investment community, and its victims and symbols, the “non-whites.” We have our bad guys, a group already resented for spills like the Exxon Valdez and the BP Gulf Oil Spill.

[csrhubwidget company="BP-PLC" size="650x100"]

Click "Oil and Gas Extraction" in the CSRHub Sustainability Ratings widget above to see all the companies and their ratings in this industry.

McKibben suggests a divestment strategy kicked off by students outraged either by the threats to their own future or by the same empathy that drove their reaction to Apartheid.

While Natives have not had a lot of success going up against the powerful, they are effective and deeply moving as symbols as was seen with the Crying Indian. Only this time, they’ll be lending their own images in support of their own cause. And images of suffering Natives will be angry instead of sad. And they won’t be actors.


Carol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council's Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 5,000 companies worldwide. Carol holds degrees from Smith College and Harvard University.

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[fa icon="comment"] 1 Comment posted in apartheid, climate change, Exxon, First Stewards, NOAA, Uncategorized, Native Americans, BP, Carol Pierson Holding, National Museum of the American Indian

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