Low Points in 2013
January 29, 2014
Your last communiqué from Crosslands Bulletin listed the 10 high points for environmental management in 2013. Now we are nearly at the end of the first month of the new year. We are freshened and fortified enough to reflect again and learn from the experiences of the 10 lowliest affairs Crosslands reported last year. Subscribers can click the links for the full articles (or search and retrieve from the home page).
Congress Gives Biodiesel a Windfall. The US House of Representatives retroactively reinstated the $1 per gallon tax incentive for biodiesel fuel for 2012 and extended the subsidy for 2013. The windfall expired on 31 December 2011.
The industry cheered the arrangement, which was part of the year-end fiscal package. Critics condemned the deal. It stole more than $2 billion from taxpayers.
“This would be an irresponsible move at the best of times, but is scandalous when Americans are preoccupied with a ballooning budget deficit,” said Mark Halle, vice-president of the International Institute for Sustainable (IISD), a public policy think-tank.
EU Squandered Money on Energy Retrofits. The EU spent almost €5 billion since 2000 in so-called Cohesion Policy funds on energy efficiency measures in buildings in member countries. But the European Court of Auditors found that the projects selected by national authorities “did not have rational objectives in terms of cost-effectiveness.”
“None of the projects we looked at had a needs assessment or even an analysis of the energy savings potential in relation to investments,” said Harold Wögerbauer, the audit court’s member responsible for the report.
Electric Utilities Evade Reporting Guidelines. In just the latest of such revelations, companies that claim to report according to the Global Reporting Initiative (GRI) indicators of environmental and social performance often really do not at all. The discrepancies are widespread and significant, according to the study by the Dutch independent non-profit Center for Research on Multinational Corporations (Stichting Onderzoek Multinationale Ondernemingen —Somo).
Working for the European Federation of Public Service Unions, Somo researchers Tim Steinweg and Joseph Wilde-Ramsing investigated the sustainability reports of 19 electric companies in Europe against 10 labor-related indicators in the GRI guidelines. More than 60% of the claims of “full” reporting on the indicators are “at least partly false or misleading,” the researchers concluded.
California Governor Grabs Auction Revenue. Gov. Jerry Brown raided the California cap-and-trade auction scheme to balance the state budget. Brown promised to give the $500 million in revenues back with interest in 2014. Brown’s revised budget plan had no details about how and when that would occur.
The move was predictable. Cap-and-trade revenues have proven to be too tempting for politicians to leave alone. So not only do emissions trading schemes not work, they give the political party in power a kind of slush fund.
Cap-and-Trade: Nothing Ventured, Nothing Gained. The most celebrated cap-and-trade program in the world — the EU’s emissions trading system — is grossly oversupplied. So many allowances are available for regulated industries to emit carbon that no increase in the cost to release a metric ton to the atmosphere can be expected before 2027. The forecast comes from a leading market analyst Thomson Reuters Point Carbon.
Cheaters Exploit Recycling Programs. Three warehouses in Yuma, Arizona, were loaded with what the Basel Action Network (BAN) environmental organization believed to be more than 9 million pounds of picture tubes from old TVs and computer monitors. The used products were originally collected in the California Department of Resources Recycling and Recovery (CalRecycle) electronic waste program.
Dow Management, the company that allegedly held the glass in Yuma, was paid more than $581,000 dollars by recyclers in California to take the glass. The recyclers were, in turn, paid $3.6 million with funds consumers pay when they buy a new TV or computer display. The advance recovery fees (ARF) then go to the designated recyclers to have the material processed properly.
In an ARF system, the state banks the money and doles it out. The “pure” expanded producer responsibility (EPR) method takes a different approach. Industry must exercise complete control of the takeback program from the waste collection through final disposal, and the added cost cannot be separately noted at the point of sale. In that case the manufacturers and importers are directly at risk to see that the system works properly.
Elderly Bilked in Carbon Credit Scams. Nineteen carbon credit companies that ripped off nearly £24 million ($39 million) from more than 1,500 investors were closed down by the UK Insolvency Service. The companies targeted mainly older people and sold them certified emission reduction units (CERs) — otherwise known as carbon credits — using high pressure sales techniques.
The UK agency said salesmen played on people’s keenness to “do their bit” to save the environment while making an investment at the same time. Investors were promised huge returns by selling these credits to corporate giants such as Marks and Spencer and British Airways. But instead most found there was no market for the relatively small amounts they held as companies that trade CERs only trade in high volumes.
Corporations Fail To Put Words into Action. The fifth annual research collaboration by MIT Sloan Management Review and The Boston Consulting Group lays bare a fact that green business media marketing outlets won’t admit. Corporations talk up a storm about sustainability, but they actually do very little to manage their material environmental and social business risks.
The 2013 survey is based mainly on 1,847 responses from commercial enterprises located around the world. The gulf between talk and action is wide. Just two-thirds of the respondents say social and environmental issues, such as pollution or employee health, are “significant” or “very significant” among their sustainability concerns. Of those assenting to the importance of the issues, only about 40% claim to be largely addressing them. Worse still, only 10% contend that their companies fully tackle the challenges.
Compromise on Turbine Risks Bodes Badly. The US Department of the Interior modified regulations that let wind energy farms kill or otherwise disturb golden and bald eagles. The changes do not satisfy the American Bird Conservancy (ABC). The conservationists think the final rule might even be a setback from the status quo.
“Remarkably, this approach relies exclusively on the for-profit wind industry to self-report bird fatalities, even when such information may prove detrimental to the industry’s bottom line,” complained George Fenwich, ABC’s president. “While some companies may play by the rules, others may not, making this system highly vulnerable to deception. I don’t see how such a system will work to protect eagles.”
Trends in Reporting Contain Some Surprises. The rate of increase in the number of corporations reporting on social responsibility for the first time has been diminishing since 2010, according to a new survey from the world’s largest library of non-financial disclosures. The results show clearly that attitudes towards corporate responsibility reporting are positive and optimistic. But the respondents generally agree that the quality of the reporting is patchy. It depends on the sector and the country of origin.
The responses hold true across all the stakeholder audiences, including professionals and support service providers. CorporateRegister says: “Sustainability reports, intended for a wide range of audiences, appear to have been disregarded by one important stakeholder audience: investors/analysts. This audience has insisted on examining only the ‘official’ annual (financial) reports, and appears to ignore all forms of CR report, including sustainability reports.”
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