Business Is Taking the Lead in Worldwide Sustainability Movement

It’s just as Bruce Piasecki predicted in his book World, Inc: large corporations are taking a leadership role in creating sustainable environments. How far this has gone was demonstrated to me today in an Environmental Leader story about Tokyo Electric Power Company (TEPCO), which is buying emissions reductions from a Biomass Clean Development Mechanism Project in Chile being sold by Arauco, the largest forestry company in Latin America. CantorCO2e, a subsidiary of Cantor Fitzgerald, is facilitating the transaction and most of the information about it is on CantorCO2e’s website. Cantor, which many remember as the company that lost many of its partners and staff in the 9/11 tragedy, has developed a special subsidiary to deal in environmental solutions.

Apparently, Arauco will create energy through the burning of Sustainable Biomass (wood waste) which will then be dispatched to the Chilean electricity grid, thereby reducing CO2 and methane emissions equivalent to 500,000 tons of carbon dioxide, using the latest and cleanest technology available. Much of the biomass will come from Arauco’s own pine plantations and none of it is taken from native forest. These emission reductions will be sold to Tokyo Electric Power Company, one of the largest power suppliers in Japan.

Why this is noteworthy? First, because it shows a partnership that is global in nature and dedicated to a sustainable solution. Second, because the facilitator is a subsidiary of a company that has long been known to broker and trade in corporate debt, providing liquidity to major global corporations. Market mechanisms are being used to further environmental objectives. So this is not a feel-good initiative, but one with sound economic underpinnings.

Add comment June 26th, 2007

Newmont Mining Sets New Standard for Forward-Thinking EH&S Policies

Newmont Mining is a Denver-based gold exploration company that’s listed on the S&P 500. I was searching online for interesting EH&S statistics and information, and when I typed EH&S into Google, Newmont came up on the first page of search results! That’s huge for a mining company.

And then I went to the website and saw the company’s sustainability initiative,
which it calls “Beyond the Mine.” This initiative is probably responsible for Newmont’s “Google juice” in EH&S searches. As part of this initiative, the company has instituted a three person board-level committee on health and safety, which is part of its corporate governance structure. The purpose of this committee is to advise and oversee management on environmental health and safety issues. The committee has the power to “investigate any activity of the Corporation and its subsidiaries relating to environmental, health or safety matters. The Committee has been, and shall be, granted unrestricted access to all information and all employees have been, and shall be, directed to cooperate as requested by members of the Committee. The Committee has the authority to retain, at the Corporation’s expense, persons having special competencies (including, without limitation, legal or other consultants and experts) to assist the Committee in fulfilling its responsibilities.”

This strikes me as a very forward-thinking policy for a company that does business globally, as Newmont does. And if you read further into it, the policy is designed to help them attract and retain workers, as well as exhibit corporate social responsibility.

I’m glad to see Newmont going in this direction.

Add comment June 22nd, 2007

Court Rules Feds Liable For Pollution At Its Own Projects

Usually when a toxic spill occurs, regulators can issue fines or take legal action to force companies to clean up emissions. Yesterday the U.S. Supreme Court turned the tables on the government by ruling that the government can be liable for a portion of costs incurred when contractors clean up toxic spills while doing work for federal agencies.

The court decided that the federal government is liable for costs incurred when Atlantic Research Corp., a Virginia-based government contractor, proactively cleaned up a site in Camden, Arkansas where rocket propellant had leaked from the worksite into the soil and groundwater. The company had been hired to retrofit rocket motors.

This is a case where a private entity chose to act based on its own commitment to environmental stewardship instead of waiting on government sanctions.

In short, the court’s decision says that the government is subject to its own environmental laws. The Bush administration opposed sharing the cleanup costs, arguing that Atlantic had no standing to sue because the federal regulators had not cited the company for any violations of federal law. It was a move widely seen as an attempt by government officials to avoid financial liability for pollution that happens during federally-sponsored projects.

The government is widely regarded as one of the nation’s leading polluters. The court’s unanimous decision is expected to impact several other federally-sponsored projects where the government’s position previously discouraged companies from removing contaminants. It is estimated that thousands of sites nationwide that are contaminated with hazardous materials could be cleaned up as a result of the decision. Waiting for regulators to initiate enforcement actions could mean years of delays. That’s why the court’s decision is so important, because now companies can proceed with clean up actions without waiting for prior federal approval.

In this case, the company was willing to act while regulators chose not to act. As I have previously noted more and more companies are taking proactive steps to show they have solid environmental stewardship practices, in accordance with their corporate governance commitments. Companies now want to avoid the perception that they pollute without regard to sustainability.

Now it’s the private sector that is moving to address sustainability issues, while the government is slow to respond. That is a trend that bodes well for the future.

Add comment June 14th, 2007

Coca Cola Launches Water Conservation Initiative in China

Throughout history, explorers and later marketers have entered new territories to find new markets. But the carrying of one country’s customs to another can lead to both good and bad. Fortunately, American companies are beginning to realize that when they open manufacturing plants on other continents to tap those lucrative markets and supply them with American products, such as computers and soft drinks, they also have to think about the demands they make on the new market’s natural resources.

Again, the most interesting aspect of this to me is the way corporate boardrooms are taking the lead on examining the sustainability of their corporate operations. This week, Coca Cola announced a major environmental initiative in China aimed at water conservation. Coke will reduce the amount of water used in rinsing and sanitizing its bottles, and will also recycle waste water.

This is not an insignificant move. The amount of water Coca Cola uses a year in its products amounts to a two month supply of water for New York City, and Coke has begun to look at water use as a strategic factor in the sustainability of its business.

The Chinese government has also begun to look at the practices of multinational corporations that look at China as a new, lucrative market and create environmental problems as they tap that market. The companies are responding with both social programs and creative sustainability initiatives like Coca Cola’s.

Our client in China, PetroChina, is one of the most forward-thinking local Chinese companies on the issue of sustainability. It is rolling out Essential Suite™ across all of its sites, allowing it to track information and create new strategies. Perhaps China will be better at its sustainability initiatives than the U.S. was in the beginning of its own industrialization.

Add comment June 12th, 2007

GHG Emissions Reduced By Changing Product Contents

More organizations every day try to be green. Some do it, as the Vatican will, by installing solar panels on a church roof.

This is a step, but nothing like when a company such as US Concrete decides to change its entire manufacturing process and supply chain.

The company has decided that it will replace Portland cement, which has always been a major ingredient in concrete, the one that binds it together, with a combination of fly ash and slag, to cut down on the emission of GHGs. Apparently, concrete manufacturing is responsible for 6 to 8 percent of the greenhouse gas emissions worldwide. Also, US Concrete says, the creation of one ton of cement releases one ton of carbon dioxide into the atmosphere. Power plants emit fly ash, and collect it in electrostatic filters to lower their own emissions.

This fly ash used to be deposited in landfills until someone discovered that it had cement-like properties. Now it will be recycled and will replace limestone in concrete manufacturing. Since the process for making concrete had been the same for a long time, this kind of change represents a great step forward for a major worldwide industry player in moving toward sustainability.

Add comment June 8th, 2007