CSRHub Blog Research on ESG metrics and comments on sustainability best practice

Greenwashing in the Oil Industry? Say It's Not True . . .

[fa icon="calendar'] Feb 14, 2011 3:31:13 PM / by Carol Pierson Holding

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By Carol Pierson Holding

In the past two weeks, there has been a lot of press about Chevron’s announcement that that it will sell all four of its US coal mines by the end of the year. The company says it is getting out of coal because the technology for converting coal to liquid won’t be available for another 10-15 years, and that even then technology might not be viable, and that the company will focus on “other operations.” In other words, it’s purely a business decision.

Chevron cites concern about its profits, which is a good thing, right? And its profits have been terrific, with 5-year returns over double those of its leading competitors. But what puzzled me is that I could not find a single story that even mentioned how Chevron’s coal mine sale supports its successful pro-environment platform.

After all, Chevron has committed to renewables and spent millions advertising this fact.  And even though Chevron’s business is only 13% renewables now, the company bravely re-branded itself several years ago with the aspirational tag “The Power of Human Energy: Finding Newer, Cleaner Ways to Power the Earth.” And its CSR ratings are among the highest in its industry, according to CSRHub.

So, thinking the media had simply left out the environmental piece, I went to Chevron’s web site to find its official press release about its decision to exit coal. To my surprise, there was none. Nothing at all.  Instead, I found two other remarkable tidbits. First, Chevron reported stunning profits for this quarter of $5.3 billion, an increase of 70% over last year’s Q4. The company credits higher prices for crude, which we knew. We all notice the higher prices at the pump. So how is it investing these profits and those it will make selling coal mines?

The second notable press release was about its $4 billion investment in another deep water drilling project in the Gulf of Mexico. The gist (which I gleaned from Oil and Gas Financial Journal, as this press release had been taken down since the first time I looked) is that Chevron’s unfortunately named Big Foot deep water drilling project, its sixth facility in the Gulf, will be located approximately 225 miles south of New Orleans, Louisiana.

Now I have to admit: I am truly a naif in the oil and gas extraction industry. But this seems a bit like a shell game to me, albeit a sophisticated one.

Rather than toot it’s own horn for getting out of the dirtiest of its businesses, coal, Chevron exits quietly, while in an equally soft voice, the company invests $4 billion in deep water drilling off the coast of New Orleans, site of a deep water oil spill that has been called the largest environmental disaster in US history. In the meantime, Chevron crows to the public not about its exit from coal but about its focus on renewables.

 And this is one of the best of the big oil lot?


Carol Pierson Holding is a writer and an environmentalist; her articles on CSR can be found on her website.

Image courtesy of Flickr user Iguanasan.

 

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[fa icon="comment"] 2 Comments posted in Big Food deep water drilling, corporate social responsibility, CSR, CSRHUB opinion, ESG, New Orleans, Louisiana, sustainability, oil, Carol Pierson Holding, Chevron, coal, coal mine, CSRHub, renewable energy, SRI

Avoiding the Cowardice of Groupthink

[fa icon="calendar'] Feb 2, 2011 7:06:00 AM / by Bahar Gidwani

By Bahar Gidwani

 

When your business involves Corporate Social Responsibility (CSR) ratings, it is easy to get depressed and discouraged.  So many companies have such low scores.  You start to wonder if corporations—and the people who run them—are fundamentally evil.

 

One day recently, when I was feeling this way, I stopped in to shop at my local supermarket.  An old woman with two cats of cat food was standing ahead of me in line.  When it was her turn to go through the scanner, I saw her lean towards the clerk and have a quiet discussion.  The clerk nodded, took some money from her pocket, and put it into her register.  The old lady then walked out the door with her cat food.

 

“What was that all about?” I asked, with my normal curiosity.  The clerk looked a bit embarrassed, and then told me that the old lady was a “regular” in the store.  Sometimes she had money; sometimes she didn’t.  When she didn’t have money, she’d get a little cat food (it wasn’t clear if it was for her cat or for herself!) and then she’d ask the clerk to pay for it.  Surprisingly, it seems that all of the clerks in the store had been asked to make this donation—and that most or all of them had done it.

 

My first thought was, what a good reminder that people are fundamentally good.  Supermarket clerks aren’t rich—but it seems they sure are kind and generous!  My second thought was, how telling it was that the clerk was a little embarrassed that I’d noticed her charity.  A common thread for philanthropists (at least in the U.S.) is that many of them give anonymously.  Their excuse may be that they don’t want to reveal their own wealth, etc.  But I think another reason is that most of us are strangely reluctant to let others see our goodness.

 

Just like countries and governments, individual people are good—it is groups of people that can be evil.  If the old lady had called all the clerks together and asked them for help as a group, they probably would have rejected her appeal.  But, privately, one at a time, they each reveal their true nature.
Perhaps this is one of the reasons companies don’t perform well on CSR ratings?  Are the managers and employees of the companies we follow ashamed of their good intentions, and unwilling to speak out internally for things they feel are right?  Could we empower employees—maybe via anonymous groups—to prod their companies to reflect their own inherent justice, kindness, and fairness?  Let’s try.

 

 


 

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.

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[fa icon="comment"] 2 Comments posted in Bahar Gidwani, corporate social responsibility, CSR, CSRHUB opinion, ESG, sustainability, CSRHub

Buying Our Way to Salvation

[fa icon="calendar'] Dec 8, 2010 6:14:36 PM / by Berit Anderson

Friday November 26th was “Buy Nothing Day”, an International Day of protest against consumerism led by Adbusters magazine, which describes it as, “[a] sudden unexpected moment of truth, a mass reversal of perspective, a global mindshift – from which the corporate/consumerist forces never fully recover.”

In spite of the organizer’s claims that it is “sudden” and “unexpected,” Buy Nothing Day was, in fact, scheduled to coincide with “Black Friday”— the Friday after Thanksgiving traditionally set to kick off the Christmas shopping season and perhaps, this year especially, save the economy from its doldrums. I daresay that the winner this year was Black Friday, since presumably most readers haven’t even heard of Buy Nothing Day and, anecdotally at least, people were buying. A friend on Facebook reported on a “Black Friday Traffic Jam” from the Hudson Valley:

“Last night taking late bus back from NYC after splendid day with sons and their friends and wonderful meal, the traffic was backed up 5 miles in every direction from Woodbury Commons trying to get to their midnight to midnight Black Friday sales... it was unbelievable. Talk about shop till you drop. Visa and Master Card are raking it in in the Northeast today.”

Although CSRHUB’s founders believe that business must be part of the solution, CSRHUB is more aligned with the forces of Buy Nothing Day than with Black Friday. As stated on CSRHUB’s “About Us’ page, the CSRHUB founders believe that business can be:

“an agent of positive social change. We believe that providing these corporate [ratings on environmental, social and governance performance] will increase the transparency . . . and encourage critical discussions of how companies treat their employees, impact the environment, adjust their carbon footprint, act in their community, provide innovative products and services for sustainable development, and govern themselves.”

But can businesses actually be a source of public good, and not just for today but for Seven Generations? Clearly, since the start of the Industrial Revolution, business has helped feed, employ and raise the living standards of billions of people.  But what good is this to our children and grandchildren if we have created ever increasing dead zones in our seas (405 dead zones worldwide, the largest 27,000 sq. miles), an ever increasing ozone hole in our skies (resulting in increasing ultraviolet radiation), widespread species extinction (according to a report published in Nature, 15-37% of known plant and animal species will be extinct by 2050 from climate change alone), and we are heading toward a literal climate meltdown?

If overconsumption is a problem, how can businesses -- generally motivated to maximize sales and profits -- solve that problem?  How can business be remade to be Triple Bottom Line – not just for profits, but for people and planet also?

One solution is to encourage companies to produce less or to manufacture products that have a social good, through tax and other incentives,.  Since corporations are individually chartered by the state, it’s possible to create a new type of corporate entity -- a “benefit corporation” -- that is highly protective of the environment, its employees and society in general, and to provide tax and other benefits to such entities.  One major step in this direction is the B Corporation movement, which requires B Corporations to: 1) achieve a passing score on the B Ratings System, a comprehensive tool to assess a company’s social and environmental performance; and 2) agree to legally expand the responsibilities of the corporation to include the interests of its employees, suppliers, consumers, community, and environment. So far there are 327 B Corporations with $1.6 billion in revenues in 54 industries (including CSRHUB which was recently approved).  And, indeed, earlier this year, two states, Maryland and Vermont, passed legislation actually codifying and making it possible for businesses to be chartered as “benefit corporations.”

Another possibility is to create mechanisms for businesses to make more money by selling less. Although this isn’t currently practical for most businesses, it is possible and is being done in regulated businesses.  In the electric utility business, for example, state public services commissions have decoupled profits from sales, and created a mechanism for utilities to make more money by selling less by utilizing efficiency and conservation methods.

CSRHUB seeks to solve this problem by “rewarding” businesses that perform well on environment, social and governance issues with good ratings.  CSRHUB Users, for example, can see which companies perform best on environmental issues and can make decisions about what to buy, who to work for, and who to do business with based upon those ratings.  CSRHUB also uses tags to allow users to identify companies that are involved in a wide range of behaviors such as coal production, nuclear power or pesticides and pollutants, or that have been rewarded for being one of the “100 Low Carbon Pioneers”, a member of the “Carbon Disclosure Project,” or an EPA Climate Leader.

So far, these are all small steps.  But for those of us who have been part of and watching this movement for numerous years, they are important ones that are starting to snowball and create new consciousness. CSRHUB is proud to part of this new ecology.

Stephen Filler is a CSRHUB Cofounder and Advisor. An intellectual property attorney, he is the Director of Business Development for Prism Solar Technologies, Inc., a solar photovoltaic module manufacturer. He has provided legal services to and served on the boards of sustainable, environmental and renewable energy businesses, technology and media companies, non-profit organizations and trade associations. Stephen serves on the Boards of NY Sloop Clearwater, NY Solar Energy Association, Sustainable Hudson Valley Business Network. He received his JD from Boston University Law School.

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[fa icon="comment"] 1 Comment posted in Berit Anderson, Black Friday, CSRHUB opinion, responsible business, Triple Bottom Line, Buy Nothing Day, consumption, CSRHub

Mapping the Road to a Climate Catastrophe Solution

[fa icon="calendar'] Nov 23, 2010 1:11:01 PM / by Cynthia Figge

What if the Chief Technology Officers of leading global technology companies turned their attention to solving climate change? That’s exactly what they did at the FiReGlobal conference in Seattle several weeks ago, which I attended to hear several of these technologists address “the most critical problem facing the planet – the climate catastrophe.” It was clear that these were scientists and not marketers sensitive to what consumers like to hear about climate change (no dire news please).

Several years ago Mark Anderson, CEO and founder of TheStrategicNewsService (SNS), challenged CTOs at the SNS FutureinReviewConference (FiRe), described by The Economist as “The best technology conference in the world,” to join in tackling the country’s most challenging design problems. Within the CTO Challenge framework, a group took on the problem of “Avoiding Climate Catastrophe.” Anderson was among the first to provide a platform for addressing the relationship of sustainability to technology and global trends, and as an Advisor to SNS FiRe, I’ve hosted the Sustainability conversation at FiRe for eight years.

Larry Smarr, Founding Director of the Calit2 Lab at UCSD/ UCSD/Irvine (the California Institute for Telecommunications and Information Technology) moderated the CTO panel at FiReGlobal. Smarr is a mathematician, physicist, and computer scientist. He is not a “sustainability” advocate. So when Smarr speaks, I listen anew.

“We knew what we needed to know 30 years ago,” he said – the data and models are just more refined now. Smarr showed a chart of the atmospheric CO2 levels for the last 800,000 years, which did not exceed 300 ppm (carbon dioxide concentration). Today we are at 388 ppm. And the 2100 Post-Copenhagen Agreements-MIT Model predicts 700-800 ppm. Please see www.globalchange.gov/publications/reports/scientific-assessments/us-impacts/download-the-report

In order to limit CO2 to 450 ppm “we have to peak four years from now,” Smarr says. “We have to de-carbonize over the next 50 years.” To rapidly reduce annual CO2 emissions, we must peak in 2015, and lower our emissions 50% by 2050, 80% by 2100.


Blue Scenario

How can we achieve this scenario? More clean energy adoption. A lot more. See the following chart for the contrast between our current level of clean energy adoption and the level of adoption needed to achieve the 2100 Ramanathan and Xu and International Energy Association (IEA) Blue Scenario (limiting CO2 to 450 ppm).

Average Annual Electricity Capacity additions for BLUE Map Scenario

The IEA, an agency of the Organisation for Economic Cooperation and Development, does the most detailed analysis of energy demand in the world. Their projections show we will double energy use by 2050. The question is, what fraction of this energy will be non-carbon?

There is already some movement toward de-carbonization in the corporate world. Smarr mentioned that a group of CEOs has formed the AmericanEnergyInnovationCouncil to convert the U.S. to non-carbon energy. The group includes Norman Augustine, Former CEO, Lockheed Martin, Ursula Burns, Chair and CEO, Xerox, John Doerr, Partner, Kleiner Perkins, Bill Gates, Chair, Microsoft, Chad Holiday, Chair, Bank of America, Jeff Immelt, Chair and CEO, GE, and Tim Solso, Chair and CEO, Cummins Engine.

The panel agreed that the incentive for consumers is information.

This has been a key impetus behind the founding of my new venture CSRHUB. Site visitors can see the Environmental performance of over 5,000 publicly traded companies worldwide, and CSRHUB subscribers can see these 5,000+ companies’ performance on Energy and Climate Change.

“Getting the world to low carbon is what really matters. Engagement is the most critical thing, not technology. I’m not a diplomat, I’m a scientist,” Smarr said. “In the 50s we used to litter and throw things out the window. We don’t do this anymore. Now we dump CO2 out the window. If the government sets the rules of the game, the private sector can respond.”

Our recent political stalemate makes it difficult to foresee a time when these government rules will prevail. In the meantime, let's take matters into our own hands and encourage companies to de-carbonize through our own purchasing power!

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[fa icon="comment"] 0 Comments posted in carbon dioxide, climate change, CSR, CSRHUB opinion, Cynthia Figge, energy, International Energy Agency, sustainability, MIT model, chief technologists, de-carbonization, environment

Environment, Social and Governance Factors Merge in Climate Justice

[fa icon="calendar'] Oct 28, 2010 9:19:52 AM / by Carol Pierson Holding

Recently, I met Jeni Krencicki Bareclos and Jennifer Marlow, co-founders of Three Degrees Warmer, a University of Washington-based project that provides legal protections for the victims of climate change. One of their inspirations is a legal case that the Native Alaskan Village of Kivalina brought against some of the nation’s largest producers of oil, gas, and electric power. Kivalina’s 400 members and 107 buildings have to be moved because the permafrost on which the community is built is melting. The plaintiff’s case argues that the damage, estimated at $95-400 million in relocation costs, should be paid by the oil and gas companies who are responsible.

Kivalina is basing its case on the same argument that was used successfully against the tobacco companies, where big tobacco was convicted of conspiring to suppress information about the health hazards from cigarette smoking. In this case, one argument is that the oil and gas companies conspired to create false “scientific” information that created questions about what would have otherwise been accepted as incontrovertable, that human action is responsible for global warming. The argument follows that these companies created enough doubt to delay serious efforts to limit or reverse climate change, thereby exacerbating the climate change that destroyed the Kivalina’s community habitat.

The case was dismissed in U.S. District Court and is currently on appeal to the Ninth Circuit Court. But whether or not Kivalina is successful, the fact that the argument has been heard in at least one court is validation that the key issues in corporate social responsibility are inextricably linked. This case proves the case for environmental justice, linking climate change to a devastating social injustice. If the case is truly the result of conspiracy and fraud as the plaintiffs claim  — and they say that records exist that will prove their argument in discovery — then good governance is a part of this as well.

All of which argues that you can’t have one CSR factor — or measurement — without factoring in the others as well.

Carol Pierson Holding is a writer and an environmentalist; her articles on CSR can be found on her website, www.holding.com.

 

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[fa icon="comment"] 0 Comments posted in Alaska, climate change, corporate social responsibility, CSR, CSRHUB opinion, ESG, governance, social injustice, University of Washington Climate Center, Three Degrees Warmer, tobacco, Kivalina, oil, Carol Pierson Holding, climate justice, environmental justice, gas and electric power

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