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

The First Cap and Trade for Carbon Emissions . . . Almost

[fa icon="calendar'] Apr 11, 2011 5:15:00 AM / by Carol Pierson Holding

By Carol Pierson Holding

2356372732_b46a272377 Too bad for California. State voters passed the most ambitious climate bill in the country, AB32, which mandates emissions reductions to below 1990 levels—not up to Kyoto levels, but still the best in the U.S.—and also implements a cap and trade program for carbon emissions.

Voters then reinforced their support when they voted down a bill sponsored by two big oil refinery companies (check out their environmental ratings here — Tesoro and Valero). That bill would have disingenuously tied reducing emissions to employment, by delaying implementation until the state’s unemployment dropped to 5.5%...for four consecutive quarters. Voters could not have been more clear.

But the California Superior Court differed. Last month, San Francisco Judge Ernest Goldsmith ruled in favor of delaying the cap and trade portion of the bill. His rationale: that the California Air Resources Board violated state environmental law by failing to properly study alternatives such as a tax on emissions, a solution that is clearly economically and politically infeasible.

The irony is that the group that petitioned the court to delay cap and trade are environmental activists represented by The Center on Race, Poverty and the Environment. And I can see their argument: why not use this legislation to bring awareness to the disproportionately high levels of pollution in lower income neighborhoods? What I can’t see is why Judge Goldsmith is concurring. Or, for that matter, why anybody is against cap and trade.

I posed this question last night to a die-hard conservative capitalist who dismissed cap and trade as “collectivism,” which makes as much sense as his argument against climate change: “The scientists who support the idea are all making a living on research grants to prove it exists,” an idea he claims he picked up from the Wall Street Journal editorial pages. And you know those Journal readers, nothing will change their minds—not even the facts.

The facts are that we tried cap and trade in the 1990s to reduce acid rain and it worked so well that even that bastion of capitalism, The Economist, crowned it "probably the greatest green success story of the past decade” in 2002. The Environmental Defense Fund did the analysis: 100% compliance among refrigeration and aerosol manufacturers. Power plants jumped in too, taking advantage of the allowance banking provision to reduce SO2 emissions 22 percent below mandated levels. And the cost of the program was less than one-fifth of projections.

Picture 4

Ironically, the leader of the ozone trend-analysis team Professor Michael Newchurch cautioned that the ozone layer would not be out of danger until we addressed the lower stratosphere as well, where 80% of the ozone exists…and is being destroyed by greenhouse gases.

I give up.

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

Inset photo, Creative Commons courtesy of docentjoyce.

Inset chart, "The Cap and Trade Success Story," courtesy of the Environmental Defense Fund.  


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[fa icon="comment"] 0 Comments posted in Cap and Trade, climate change, corporate social responsibility, CSR, Valero, Uncategorized, sustainability, Tesoro, The Economist, Judge Ernest Goldsmith, Kyoto Protocol, AB32, California, California Air Resources Board, California climate bills, California Supreme Court, Carol Pierson Holding, Center on Race Poverty and the Environment, Environmental Defense Fund, Wall Street Journal

Shared Value: CSR Re-branded?

[fa icon="calendar'] Jan 17, 2011 10:31:41 PM / by Carol Pierson Holding

By Carol Pierson Holding


Harvard Business Review’s cover story this month, “Creating Shared Value,” should be a celebration of how far CSR (Corporate Social Responsibility) has taken us. Just look at how much closer we are to accepting CSR as a core competitive strategy. As fans of authors Michael Porter and Mark Kramer know, these two have been proponents of CSR for years, pushing the field forward with new ideas like “Strategic Philanthropy” and now, “Shared Value.” Most impressive about their latest article is its place on the cover of this conservative business journal.


Two years after Harvard Business School ran an alumni conference on the future of capitalism (which eerily coincided with Lehman’s collapse and market’s 900+ point drop), that institution’s journal leads with this article, subtitled “How to reinvent capitalism — and unleash a wave of innovation and growth.” Finally, the argument about whether CSR is key to our future or just window dressing seems to be put to rest.


I applaud the authors. But why, aside from promoting their consulting business, would they insist that CSR is discredited and should be replaced by Shared Value? They misstate CSR’s mission as “doing good” when in fact it is “doing well by doing good,” which is the same as their concept of Shared Value. In fact, until recently, they were huge supporters of CSR. In their 2006 article, “Strategy and Society: The Link Between Competitive Strategy and Corporate Social Responsibility,” they pointed out flaws in CSR but weighed in heavily in its support.


Whether you call it Shared Value, CSR, ESG, or Corporate Citizenship, or Sustainability, or Corporate Responsibility, or Triple Bottom Line or any of the other terms people use, we are all pushing the same agenda—to do well by doing good. And the term “CSR” is well known and accepted in business.


It has been written about extensively in the business press. Most controversially, it has appeared twice on the cover of The Economist. First, to dismiss it per Milton Friedman’s “The business of business is business,” then a second time, in support of the concept. CSR has a set of metrics in place through the 20+ year old SRI ratings, a self-reporting structure in GRI, and a requirement in many companies’ RFP’s for a CSR report. Insurance, risk assessment, accounting bodies including FASB and many other industries and institutions all have “CSR” or “Sustainability” efforts underway. Porter/Kramer do a great service in lifting the issue to the front page of business, but why would we want to abandon all the progress made under the CSR rubric?


With CSR finally accepted as a core business strategy, Porter/Kramer now jump into the fray not with ideas of how to move more companies into the “Doing well to do good” camp, but with arguments about why their new name and model is better than CSR. Worse, even though they have several branding pros on the staff of their consulting firm, they dismiss the value of communications in support of CSR as mere promotion, ignoring the importance of communication in changing consumer behavior. Many of the companies Porter/Kramer cite as examples of Shared Value have used their brand to change consumer behavior for the better (think ads and promotion for GE Energy Smart CFL light bulbs). Yet Porter/Kramer fail to mention this.


Watching TV last week, I came across a great example of CSR communications’ power to increase sales while saving the planet.  The EPA confirms that in many cities, “The personal automobile is the single greatest polluter.” A key component to reducing these emissions will be the Electric Vehicle. Current ads for the Chevy Volt, the leading American-made Electric Vehicle (EV), are clearly good for Chevy’s brand reputation. But dismissing the ads as mere promotion misses the more important story: the advertising reduces fear of the EV by showing how easy it is to recharge, thereby persuading more consumers to buy EVs.  If this is CSR, I’ll take it over Shared Value any day.



Carol Pierson Holding is a writer and an environmentalist; her articles on CSR can be found on her website at  http://www.holding.com/Index%20links/articles.html.




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[fa icon="comment"] 9 Comments posted in capitalism, corporate social responsibility, CSR, Electric vehicle, ERI, Harvard Business Review, Harvard Business School, strategic philanthropy, Uncategorized, Milton Friedman, sustainability, The Economist, Mark Kramer, Shared Value, Triple Bottom Line, Carol Pierson Holding, corporate citizenship, CSRHub, Michael Porter, Nissan Volt

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