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By Marshall Connolly, Catholic Online (NEWS CONSORTIUM)
4/17/2013 (2 years ago)
Catholic Online (www.catholic.org)
For customers at nearly thirty supermarket chains across the nation, there's now an easier way to decipher the nutritional value of their product selections. Known as NuVal, a private scoring system has been developed to help consumers tell if they're really getting the nutrition they think they're buying.
By Marshall Connolly, Catholic Online (NEWS CONSORTIUM)
Catholic Online (www.catholic.org)
4/17/2013 (2 years ago)
Published in Home & Food
Keywords: NuVal, nutrition, food, system, label, stores, healthy, marketing
LOS ANGELES, CA (Catholic Online) - Reading labels is a time consuming process and few shoppers bother with it. It's not that they don't want to make healthy food choices, it's that they're busy. Instead of taking the time to read the labels, the make their decisions based on word-of-mouth advice, and marketing it's faster, but often a lot less accurate.
Unfortunately, marketing often borders on the deceptive and suggests you're getting more than you really are. Many foods marketed as "whole wheat" or "organic" are not as nutritious as you'd think. Many organic foods are still treated with chemicals.
Enter the NuVal system. The NuVal system isn't the final word on nutrition, but it does provide a snapshot of how nutritious an item is based on a single score.
Catholic Online had the opportunity to interview Robert Keane from NuVal and to learn a little more about this scoring system, which seems to be catching on across the country.
COL: Robert, what is Nuval and how does it work?
KEANE: The NuVal Nutritional Scoring System is a simple rating system that rates foods on a scale of 1 to 100. The higher the NuVal Score, the more nutritious the food. Scores are found on the shelf at more than 1,600 supermarkets across the country. NuVal Scores are calculated by assessing more than 30 different nutrients such as fiber, vitamins, sugar, fat, cholesterol, and sodium. These calculations result in a NuVal Score. You can learn more about how scores are calculated at this page.
COL: Why do you feel we need NuVal?
KEANE: Consumer need NuVal because despite our best efforts, it seems harder than ever to know the nutritional value of the food you buy. We have nutrition fact panels, but when you shop, how do you know if shredded wheat or Cheerios are better for you? What about trying to determine what yogurt or even what kind of potato chips have better nutrition? The NuVal System allows you to compare foods like an expert as easily as you compare prices.
COL: Who is behind NuVal?
KEANE: The algorithm that powers NuVal Scores was created by a panel of more than a dozen of the country's best minds in nutrition science led by Dr. David Katz, Co-founder and Director of the Yale-Griffin Prevention Research Center in Connecticut. They took two years of collaboration to determine just how to best score foods. The algorithm itself is based on Federal guidelines for nutrition. NuVal LLC is a joint venture formed in 2008 by Topco Associates, LLC, and Griffin Hospital.
COL: Who calculates NuVal scores and how is it done? (In a lab, etc?)
KEANE: The data upon which our scores are based are taken directly from the food products' nutrition fact panels and ingredient lists. Once we have this information, scores are calculated using a proprietary algorithm at a facility in Boston.
COL: Is there any independent verification of your scores to ensure they are fair and accurate?
KEANE: Yes, a team of dietitians review each new score as it is created. We also take it upon ourselves to review products on a regular basis to ensure we update the scores of products that may have been reformulated.
COL: What are the food manufacturers saying about NuVal?
KEANE: Our scores cover more than 90,000 different foods products from thousands of manufacturers. In this situation there can be disagreements on what a certain food receives as a score. However, we do our best to work with manufacturers and explain why foods score the way they do. In certain cases, we have had manufacturers change the way they process a food, making it more nutritious and raising the NuVal score!
COL: There's a lot of misinformation about our food out there. Companies know consumers will buy whatever they can cleverly market. Fads are real, such as gluten-free, whole wheat, and organic. Marketers slap these on the labels regardless of what's really in the product. Does NuVal address this issue?
KEANE: Absolutely. We have said all along that one of the biggest strengths of NuVal Scores is that they cut through all marketing messages. No matter what it says on the package, simply look at the shelf tag, and you'll see the NuVal Score, right next to the price. Just that one number can sum up the overall nutritional quality of a food and ensure you are choosing the best option for you and your family.
COL: If NuVal is so great, why not petition Congress to make NuVal or a system similar to it part of the labeling laws?
KEANE: The idea behind NuVal was actually proposed to the Government by Dr. David Katz. The Government decided not to act on it, so Dr. Katz took steps to create the system commercially. You can see it in his own words with this video.
COL: What if I like NuVal, but can't find it in my store. What can I do to get me NuVal scores? Is there a website or an app?
KEANE: Right now, scores are licensed to supermarkets, so they are the primary place where you can find NuVal Scores. However, we are exploring other options to get scores to consumers. For instance, users of Aetna's ActiveHealth can access now access all our scores online. We're now expanding our reach into the health and wellness field to reach even more customers.
COL: Robert, thank you for taking the time to answer these questions.
If you are interested in learning more about NuVal, visit the company website here.
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Equipped with twenty dollar bills in hand, nearly 40 people stormed Outdoor 76 on Friday afternoon as part of Venture Local Franklin's Cash Mob.
"The Cash Mob was absolutely incredible," said Outdoor 76 co-owner Corey McCall. "We had between 35-40 individuals participate. We were so blown away by the support from the community and Venture Local Franklin."

subset: commoncrawl


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So when more than 500 investors who hold the strings on the world's biggest purses—the heads of investment banks, insurance companies, pension funds, international development banks—descended on the UN headquaters in New York yesterday for a high-powered summit hosted by the sustainable business* nonprofit Ceres, you'd hope they would be ponying up for climate solutions.
There's just one problem: Investment is on the decline for the second year in a row, according to new statistics released yesterday by Bloomberg New Energy Finance. In 2013, investors worldwide put $254 billion into clean energy technology, 20 percent below 2011's record high.
"The figures this year are not great," BNEF CEO Michael Liebreich told the group, which together represent roughly $20 trillion in assets. "But we are by no means in as bad a place as we could be."
That might sound like damning with faint praise, but in fact analysts here insisted the numbers mask a more optimistic story of growing concern about climate change on Wall Street. One important factor behind the investment decline, Liebreich said, is the falling cost of renewable energy installations, meaning investors get more bang for fewer bucks. Just in the last 18 months, the cost of a typical solar panel system dropped 45 percent; from 2012 through 2013, the total number of installed systems worldwide grew 20 percent.
In other words, the volume of renewables on the grid is growing even though less is being spent on them. And overall, a range of green money analysts at the conference insisted that Google's $3.2 billion purchase this week of energy efficiency startup Nest is just the latest sign that mainstream investors are beginning to see moneymaking opportunities in climate protection.
So how are investors going green? Bank of America's Head of Global Capital Markets, Lisa Carnoy, told Climate Desk the biggest shift in 2014 is likely to be in the market for so-called "green bonds." Companies and governments sell bonds as a way to quickly raise cash. The money they get from issuing a bond to a bank or other investor gets put into a project, which generates profit the company uses to pay back the investor (with interest, of course). Green bonds are those that are dedicated exclusively to funding climate-friendly projects: Renewable energy, energy efficiency, etc. As of last November, clean energy projects worldwide had issued $7 billion in such bonds, according to a report Ceres released yesterday, which projects the market for clean energy bonds to grow to $18-40 billion annually by 2020, a noticeable chip out of the $1 trillion goal.
"This is the simplest, cleanest, most easily understood" way for investors to fight climate change, Carnoy said, "and this is the one that can take off first."
Bonds are typically reserved for stable, mature industries (railroad and water infrastructure, for example), that are guaranteed to turn around a return for whoever buys them. So if Carnoy is right and more investors begin to snap up green bonds as a reliable way to generate income, it will send a strong signal to policymakers that clean tech isn't just a fringe sector for eco wingnuts but a robust, growing industry, according to HSBC head climate analyst Nick Robins.
"So that's a very good signal for the clean economy," Robins said.
The other trend to watch in 2014 is a growing awareness of the threat of "stranded" assets. Investments and companies whose value is based on holdings of fossil fuel reserves could find the rug pulled out from under them if those reserves become worthless following a drop in demand as renewables become more widespread and more countries adopt a price on carbon. There could be as much as $7 trillion worth of fossil fuels that will need to stay in the ground; the Ceres report estimates that stranded assets could account for 10 percent of overall investor portfolio risk over the next 20 years. That could be bad news for, say, pension funds, that rely on steady investment returns to cut checks to retired government employees. Anne Simpson, a senior director of the California state pension fund, said that 70 cents of every dollar in the fund comes from investment returns.
So, she said, "there are serious consequences to getting this wrong."
*An earlier version of this story incorrectly identified Ceres as a "green banking nonprofit".]]>
It won't be easy. Global investment in renewable energy fell 12 percent in 2013 to $254 billion, according to data released by Bloomberg New Energy Finance (BNEF), casting a shadow over the notion of a "clean trillion."
Last year was the second decline in renewable investments since 2011's record-high $318 billion. Investors and climate-policy advocates including hedge-fund billionaire Tom Steyer and former U.S. Treasury Secretary Robert Rubin called for changes to financial markets that would boost investment. Financing must double by 2020 and double again to $1 trillion by 2030 in order to avoid global warming of more than 2 degrees Celsius, reports Ceres, the host of yesterday's conference.
These top-line numbers are fuzzy and paint a picture that's perhaps more bleak than reality. First, the price of solar energy continues to tumble, so more renewable energy is being generated with fewer dollars invested. Second, while BNEF's clean-energy tally is the most comprehensive for renewable energy, it's not all-encompassing; it doesn't include most energy-efficiency measures, fuel-efficiency gains or expanded public transportation.
The full accounting of current investment in clean energy is probably closer to $500 million a year, said Michael Liebreich, the CEO of BNEF, in an interview at the conference. But by that measure, we probably need to get to $2 trillion to prevent the worst affects of global warming, he said. The goal of quadrupling investment from its current state "is the right order of magnitude."
Whether it's one trillion or two, the benchmarks show there's clearly a long way to go. The will is there, and the price is right, but what's lagging, according to Ceres, is easy financing. That's what yesterday's conference was about.
A few proposals from the Ceres report:
1) Pension funds and other institutional investors should commit to a goal of investing five percent of their portfolios in clean energy. They currently invest less than 1 percent, according to the OECD.
2) Investors should increase scrutiny of companies that are responsible for high levels of emissions of carbon dioxide. Last year was a turning point in that regard. Read: Oil's Future Draws Blood and Gore in Investment Portfolios.
3) Bonds, bonds, bonds and asset-backed securities. Not all investors want to put solar on their roofs or can afford to build a field of panels. Banks need to create simple investment vehicles that help both retail investors and billion-dollar institutional investors access those markets. SolarCity, created by Tesla Founder Elon Musk, announced yesterday that within six months it will introduce an online system for retail investors to buy into rooftop solar projects.
Is the clean-energy story of 2014 going to be the adoption of green bonds? We'll see. In the meantime, you can read all 10 recommendations in the Ceres report here. Details from BNEF's tally of renewable energy investment can be found here.]]>
Talk of potential risk to humanity is not new. And we've seen more recently the actual devastation of record weather events like Hurricane Sandy and Typhoon Haiyan. But neither the scientific warnings nor the extreme storms have prompted enough action. However, now the risk we're talking about is financial, which, along with the enormous economic upside of taking action, may finally get the investment community moving.
The day before the stark story in the Times appeared, I attended a related conference, the Investor Summit on Climate Risk, held at the UN and run by the NGO Ceres. Hundreds of financial executives gathered, including some heavy-hitters, from state comptrollers to executives from large pension funds to former U.S. treasury secretary Robert Rubin, who declared, "climate change is an existential risk."
The conference was focused on the release of Ceres' new report, "Investing in the Clean Trillion." Created in conjunction with Carbon Tracker, the study lays out a plan for mobilizing much more capital toward building the clean economy. The trillion-dollar number is not random: The International Energy Agency (IEA) has estimated that the world needs to pour $36 trillion of investment into the clean economy between now and 2050 in order to keep the planet below the critical warming threshold of 3.6 degrees Fahrenheit (2oC). That's $1 trillion per year.
A key target for Ceres' work, and the main audience at the conference, is the group of institutional investors who manage tens of trillions of dollars in assets for long-term performance. The core argument to compel institutional investors to change how they influence companies and where they invest their money is simple: as the world pivots away from carbon-based energy to avoid devastating climate change, fossil fuel assets, like coal plants or off-shore oil rigs, will be "stranded" -- a wonky term for "worthless." The value of the companies owning and managing those assets, the logic goes, will plummet. As Nick Robins from the bank HSBC described to the audience, in a scenario of global peak fossil fuel use by 2020 "implies a 44% reduction in discounted cash flow value of fossil fuel companies" -- or in simpler terms, a decline in share price of 40 to 60 percent.
In another Ceres meeting last fall on this topic of stranded assets, Craig Mackenzie from the Scottish Widows Investment Partnership ($200 billion in assets) spoke about the "wake-up call" investors had gotten from recent shifts in the U.S. coal market. The 20 percent drop in coal demand was driven mainly by the incredible increase in natural gas production due to fracking technology, not from any concern over greenhouse gases. But the rapid shift demonstrated to Mackenzie and his firm the dangers of overexposure to a class of assets. So, he says, the fund "reduced exposure to pure play coal companies to nearly zero."
It's easy to point out a big flaw with the stranded assets discussion: uncertainty. I spoke with executives at a few big banks who said the big question for them is when will the assets be stranded. Nobody wants to leave profitable investments too early that gets you fired. But trying to time a bubble bursting is a dangerous game. How many investors got the timing right on the implosion of mortgage-backed security assets in 2008? Nearly none, and that systemic failure of vision contributed mightily to a global financial collapse.
Given what's at stake now -- not just financial system stability, but planetary, human-supporting system stability - it's more than prudent to avoid the game of timing the market perfectly. The investment community should be much more proactive about using its weight to a) pressure fossil fuel companies to quickly migrate their own portfolios to new forms of energy; and b) dedicate significant funds to investing directly in new technologies.
With the chilling, "it's going to be very costly" message of Gillis' article, and the warnings of trillions of stranded assets in the Ceres report, it's easy to miss the very big silver lining running underneath all the dire warnings: we have the technologies today to make the shift and do it profitably.
The Clean Trillion report cites the uplifting flip side of the IEA's calculations -- the $36 trillion of investment we need will yield $100 trillion in fuel savings between now and 2050. That's a lot of money to leave on the table, and a very good investment.
This post first appeared on the Harvard Business Review blog network.]]>
"Water use for hydraulic fracturing will continue to grow, triggering unprecedented county water demands," the report warns. Continued drought conditions and a population surge in areas where drilling is most prevalent are also key factors.
Ceres, a Boston-based analysis firm and sustainability advocacy group, analyzed tens of thousands of reports submitted by drilling companies to the FracFocus government database from 2011 to mid-2013. Of all the shale plays it analyzed nationwide, Ceres found that the county where water use was highest for fracking was Dimmit County, in the heart of the Eagle Ford Shale.
For the two-and-a-half year period examined, drillers used 3.9 billion gallons of water for hydraulic fracturing in Dimmit County, the report says. According to state data, the entire county used that much water in 2011. In the 10 South Texas counties that make up the Eagle Ford Shale, close to 20 billion gallons of water were used for fracking between 2011 and mid-2013, the report said, and the majority of the water is used in Dimmit, La Salle, and Karnes counties — where the majority of drilling activity is occurring.
The report warns investors in energy companies that they should pay attention to water availability for drillers before they decide where to invest their money.
"It's good for investors to ask their portfolio companies, 'How are they addressing this issue?'" said Steven Heim, managing director for the investment management firm Boston Common Asset Management, who wasn't involved in the study. "It's a limiting factor." While some of the water used may be brackish water that is unfit to drink, or recycled water, it is likely that the vast majority of it is freshwater underground, the report says.
Ceres also used data from the U.S. Geological Survey and other sources to determine that South Texas groundwater is in high demand, leading the report to call the area "water stressed" — no surprise to a number of landowners and groundwater regulation districts in the region who have voiced concerns about seeing low water levels in their own wells in recent years. Scientists at the Southwest Research Institute estimate that fracking uses up as much as a third of the overall water demand in some South Texas companies.
Oil and gas companies say they are ramping up their use of water recycling technologies, as well as drilling farther into the ground for poorer quality water that they can use in lieu of precious freshwater. But such practices are taking off mostly in West Texas' oil-rich Permian Basin, where Ceres found water use to be far less than in the Eagle Ford Shale. The water use there is still significant, however; between 2011 and mid-2013, close to 1.2 billion gallons of water was used for fracking in Irion County, home to the town of Barnhart, which famously ran out of water last year. The county used a total of 1.05 billion gallons for municipal, agricultural and all other activities in 2011.
Part of the reason less water is used in the Permian Basin is because that region is more in demand for its oil, which usually needs less water to extract via fracking, Ceres' analysis said. But oil and gas companies have also said that water-saving techniques like recycling are more difficult in the Eagle Ford Shale, where they are more needed. That's in part due to the geology of the South Texas shale play, the Ceres report said: When drillers send billions of gallons rushing down a well to be fracked, far less water comes back to them than in the Permian Basin.
"The use of brackish water as an alternative to freshwater is gaining popularity," analysts wrote, but added that even brackish water is important for the surrounding community. "Some brackish supplies may be needed in the future to meet local drinking water needs, so this water source should be carefully assessed."
Heim said that investors need to consider water availability for fracking a serious risk because the Eagle Ford Shale will be a region of drilling interest for a long time. Unlike other Texas oil booms, this one is due in large part to technology that will allow production of oil and gas to continue for decades.
"You'll just need more and more wells being drilled and more fracking needed, because they'll need to do it to keep up with the production," Heim said. "So at some point [water is] something they're going to have to work out."
The data is some of the most comprehensive to be collected on water use for fracking in Texas. Previous studies from the University of Texas at Austin suggested that drillers used 25 billion gallons of water for fracking in in 2012, and estimates they may need 40 billion gallons by 2020. That would still be less than 1 percent of the state's total projected water need, but because the demand is concentrated in certain local areas, it could make up a large portion of those areas' water needs.]]>
The unlinking of economic growth and emissions increases was a key takeaway in the report, said Dan Bakal, director of electric power with business sustainability group Ceres, which helped craft the annual study. So too were overall emissions declines in regions that have criticized regulations such as the proposed Environmental Protection Agency rule that would set carbon limits for power plants.
"You see some pretty consistent declines in areas like the Southeast and the Midwest," Bakal told the Washington Examiner. "It makes the case that more is achievable."
While the report demonstrates that electric utilities and states are already pursuing emissions reductions on their own, their pace is not aggressive enough to avoid locking in some of the effects of climate change, which most climate scientists say is largely caused by burning greenhouse gas-emitting fossil fuels.
The report, which was led by M.J. Bradley & Associates with assistance from Ceres, Bank of America, electric utility Calpine, the Natural Resources Defense Council and others, surveyed the top 100 electric utilities by generation, which covered 85 percent of the nation's electric power and 87 percent of the industry's emissions. It comes as the Tennessee Valley Authority, the government-run utility and sixth-largest emitter, announced a long-term plan Monday to add more renewable energy and natural gas by 2033.
While overall carbon emissions are above 1990 levels, a combination of the recession, falling natural gas and renewable energy prices and environmental regulations have pushed emissions downward in recent years. Between 2008 and 2013, power plant emissions fell 12 percent. Bakal said lower electricity demand accounted for about half of the initial carbon emissions drop in the first two years after the recession, but the other factors have kept emissions levels basically flat for the past two years even as the economy has grown, the report said.
"Even while we've seen some pretty solid economic growth for a while now, emissions have continued to decline," Bakal said.
Emissions levels in recent years have fluctuated based on how much power plants use coal, which is twice as carbon dense as natural gas. As natural gas prices trended rose in 2013, more utilities turned to coal and emissions rose 2 percent between 2012 and 2013, according to the EPA.
Although carbon emissions have increased from 1990, emissions of mercury, with a 74 percent drop, and sulfur dioxide (80 percent drop) are lower. And the emissions rate of utilities — pounds of carbon dioxide emitted per megawatt-hour of electricity produced — has decreased since 2000 as companies have shifted away from coal and boosted energy efficiency.
That has significant implications for the EPA's Clean Power Plan. The proposed rule sets targets for states to reduce their electric fleet's emissions intensity, which the agency says can be accomplished by improving power plant efficiency, shifting from coal to natural gas, adding renewable power and bolstering customer-side energy efficiency.
Duke Energy, the largest electric power company in terms of generation, underscores the development of utilities becoming more efficient.
The company uses the second-most coal in the country and produces the most carbon emissions from coal than any other utility — its carbon emissions "increased dramatically" since 2000 because of its mergers with coal-heavy Cinergy in 2006 and Progress Energy in 2012, the latter of which boosted the company's total generation by 60 percent.
Yet the company's carbon emissions intensity has risen just 10 percent, which the report partially attributed to "an increase in low- and non-emitting generation."
While Duke's emissions rate has increased, the bump is far less than the relative size of coal-fired generation it added to its fleet. At the same time, other coal-heavy stalwarts have shaved emissions. Southern, which at one point was almost synonymous with coal, has slashed its emissions rate 31 percent since 2000 as it shifted toward natural gas. Similarly, NextEra's emissions rate has plummeted 46 percent.
But it's not all rosy for utilities looking to slash carbon to comply with the power plant rule, which is due for finalization next month. Bigger utilities are large enough to make improvements to their fleets, and the state utility regulators who govern rate increases needed to pay for new investments might be forced to approve projects so states can meet the EPA rule.
Electric cooperatives, though, are a different story — and they're in a precarious position, as the report showed. Of the nine utilities with the highest carbon emissions intensity, seven are electric co-ops. Co-ops are small utilities that are owned, financed and operated by communities and exist largely in the West and in rural locations.
Co-ops have a difficult time paying for upgrades and have largely resisted the proposed power plant rule. Its trade group, the National Rural Electric Cooperative Association, is advising its members to tell states to submit a compliance plan to the EPA that would seek emissions cuts only through improving power plant efficiency. The group contends that is the only measure under which the EPA has authority to require cuts.
Bakal said that reducing the emissions rate at co-ops would be challenging. However, they're not large producers of electricity, as the biggest emitter was ranked 38th for overall emissions. That means states might be able to craft compliance plans that inflict less pain on them.
"There's still a lot of different options there. So some states will encourage increased energy efficiency and some will encourage solar or community solar ... they may look at options for trading either within or between states," Bakal said of states with a large presence of co-ops. "In some cases it could mean decreasing the utilization of some plants."]]>
Volatile weather has led to supply and price shocks that have rippled through 16 industries dependent on corn. From the meat industry to the ethanol industry, prices are higher for consumers.
Listen to the story.
Ceres, a Boston-based nonprofit network of investors, companies and public interest groups, focused in its report on climate change's effect on corn production. It said farmers and the companies they supply must deal with drought and other weather extremes, an increase in groundwater depleting irrigation, and more fertilizer use.
"Climate change and pressures on water supplies pose financial risk to our agricultural industry but it's not just the corn belt's problem," said Brooke Barton, water program director at Ceres and co-author of the report, which argues that increased corn production has depleted land and water resources in some areas and contributed to increased water pollution from fertilizer runoff.
"Companies that depend on U.S. corn have a big role to play in sending market signals that these issues matter," she said.
Food giants working with Ceres include General Mills and Unilever, both of which have adopted sustainability programs suggested by the organization that set specific goals for suppliers and farmers.
The report calls for the establishment of corporate policies for goals to reduce the environmental impact, procurement contracts that require sustainably grown crops, and efforts to identify areas of high water stress, groundwater pollution and overuse of fertilizer.
Ceres also recommends that companies substitute other grains for corn where environmental benefits are well demonstrated, and disclose to investors the company's exposure to climate and water-related risks in its agricultural supply chain.
General Mills, the maker of Cheerios, Wheaties and Green Giant vegetables, increasingly has been involved in providing money and support to improve the use of water and fertilizer since it began a sustainability program in 2005.
In the Root River region of southeastern Minnesota, the company contributed $300,000 to help vegetable farmers incorporate new conservation practices to reduce erosion into the river.
In Irapuato, Mexico, General Mills provided interest-free loans to farmers to help them invest in drip irrigation equipment to grow Green Giant vegetables, saving more than 1 billion gallons of water a year, the company said.
Corporations are taking on the additional expense to ensure future supplies, but also because of customer demand, said Jerry Lynch, chief sustainability officer for General Mills.
"More and more consumers are looking at what companies are doing in this area because that really demonstrates the care that a company takes with the ingredients which are the thing that a consumer cares most about in a food product," Lynch said.
Unilever, which makes products including Lipton tea and Hellmann's mayonnaise, is working with Iowa soybean farmers on a project to use a newly developed calculator that measures fertilizer use, water quality, energy use, and greenhouse gas emissions. Soybean oil is a major ingredient in mayonnaise.
Farmers committed 44,000 acres to the project in 2013 and that rose to 150,000 acres this year, said Jonathan Atwood, the company's vice president of sustainable living.
"The intent is to go on-farm and try and find a collection of like-minded farmers to come in and begin to measure at a much deeper level against some of the sustainability targets we have as a company," he said.
Unilever has set a goal of 100 percent sustainably sourced commodities by 2020. Atwood said the company began at 12 percent in 2010 and achieved 48 percent globally this year.
Ray Gaesser, who farms 6,000 acres of corn and soybeans in southwest Iowa near Corning, uses no-till farming, terraces on sloping land to prevent soil erosion, and has grass waterways to slow water runoff. The farm is testing cover crops that help hold the soil in place and retain nutrients.
Most farmers, he said, are willing to adopt new measures if they are shown to be beneficial to the land and water and do not reduce productivity.
"They want to be sure it's being done for more than just marketing reasons or to position a company to be in a better light with their consumers," Gaesser said. "It needs to be a sincere effort."]]>
Twenty-year government bonds and thirty-year mortgages are bumping into the horizons for serious damage to South Florida from rising seas. So far, those enormous risks haven't sent home prices tumbling, or sent borrowing costs skyrocketing. The trillion-dollar question is: When and how will the market start charging for those risks?
Financially, the most important piece of information about rising seas clobbering Miami and South Florida is the one nobody knows: When, exactly?
"Geologic time doesn't give us that answer," says John Englander, author of "High Tide on Main Street: Rising Sea Level and the Coming Coastal Crisis."
"It doesn't get us down to human time scale of, 'What decade will it happen?'" he says. "Or, 'What year will it happen?'"
As a Fort Lauderdale home-owner, Englander thinks that uncertainty works to his advantage, for now. He thinks he might sell in five or ten years — to get out while the getting is good — and he thinks his case isn't unusual. Even though the typical mortgage is 30 years, many home-owners think about their investment in five-year increments.
That's the same horizon bond-rating agencies use when they evaluate public-works plans. That's as far as they can look, says Geoff Buswick, who runs the public-finance infrastructure group at Standard and Poors.
"Once you get past that, the financial forecasts are softer," he says. "Fifteen years from now, it could be a completely different management team, and a completely different environment."
There's a reason big investors are OK with a five-year evaluations of what may be, on paper, a bond with a 20, or 30 or 100-year payoff.
"They're not planning on holding that for 30 or a hundred years," says Sharlene Leurig, who runs the sustainable water infrastructure program for the non-profit Ceres. "They're planning on flipping it, maybe in eight."
So, from all sides, the risks don't get priced into the market.
"Everyone thinks they're going to be the first to realize where the risk is, the first to liquidate," says Leurig. "And that there will be an opportunity to roll that capital into the next thing, which will be less risky."
Keith London seems like someone who should be especially concerned about the risks of South Florida real estate. He's a city commissioner and longtime homeowner in the Miami suburb of Hallandale Beach. Rising seas have already required some big spending there, just to protect the city's drinking water supply.
But he doesn't think his town has it worse. Just first.
"We are the canary in the coal mine," he says. "We have all the issues and all the problems. But this is a bigger problem than just South Florida. There's going to be global disruptions, everywhere."
He hopes that means global mobilization to address the challenges.
Meanwhile, he thinks South Florida is a fine place to live.
On September 27th, The Intergovernmental Panel on Climate Change, a United Nations-sponsored scientific body created in 1988 to examine the causes and effects of climate change, released a report (put together by an independent group of 800 scientists) that everyone knew was coming. The whole thing, really, can be summed by a few excerpts:
It is extremely likely that more than half of the observed increase in global average surface temperature from 1951 to 2010 was caused by the anthropogenic increase in greenhouse gas concentrations and other anthropogenic forcings together.
The atmospheric concentrations of carbon dioxide (CO2), methane, and nitrous oxide have increased to levels unprecedented in at least the last 800,000 years. CO2 concentrations have increased by 40% since pre-industrial times, primarily from fossil fuel emissions and secondarily from net land use change emissions.
When the IPCC says it's "extremely likely" that humans are contributing to climate change, the organization means that there's a 95% chance of that being the case (that's still 5% wiggle room, which is space to fit a lot of climate deniers). That's approximately the same confidence that scientists have about cigarettes being harmful to human health.
And according to the new IPCC report--the first of a series of climate change reports that will be released over the coming year--humans only have 30 years left until our "carbon budget" is spent. In other words, we have 30 years to fix this mess before warming irrevocably climbs past 2 degrees C, dramatically increasing the risk of sea level rise, fires, flooding, and all the other nasty side effects of climate change.
But who's actually paying attention to what the IPCC says? It's tempting to just say that the IPCC is preaching to the choir--and in some ways that's true.
Just a few hours after the report was released, I received an email from the conservative Heartland Institute, which was upset that "Over the history of the IPCC, each report has expressed a higher level of alarmism and a higher level of confidence in its certainty that man-made global warming will be harmful." The Heartland Institute instead directed my attention to a different climate change report created by a climate denial group with a name that sounds suspiciously like the IPCC: the Nongovernmental International Panel on Climate Change (NIPCC).
That's a bait and switch tactic that may work with some people, but probably not the business communities with the potential to be most affected by climate change. One of those communities, obviously, is the insurance industry.
"From the perspective of insurers, they're operating in an increasingly uncertain environment which is of course impacted by climate change, and based on the contents of the report should be of significant concern for how they plan and shape their business going forward," explained Lara Mowery, the Managing Director and Head of Global Property Specialty at Guy Carpenter & Company (a global risk and reinsurance specialist) during a conference call about the report. She cited the 2011 Thailand floods as an example of what could happen in the face of future climate disasters, when something like flooding closes hundreds of factories and creates parts shortages around the world.
Oil and gas companies are also probably scrutinizing the latest report. If the news about our dwindling carbon budget triggers policy changes--the IPCC writes that humans can burn less than one sixth of all fossil fuel reserves before going over the carbon budget--they may never get to extract a big portion of the oil and gas left in the ground. Mindy Lubber, the president of Ceres, wondered on the conference call: "What is the value of their company if some percentage of their assets gets stranded?"
Nick Robins, the head of HSBC's Climate Change Centre of Excellence, believes that the last IPCC report, released in 2007, spurred the investment community in general to really think about how climate change can affect different asset classes. "Many corporate strategies were conceived on the back of the last IPCC report. Now is a good time to revitalize commitments that corporations are making," he said. The problem, as reported in a recent U.N study, is that most CEOs of major corporations don't think that environmental sustainability is key to business success.
That makes no sense, of course. The Global Challenges Foundation ran the numbers on the IPCC report and came back with this comparison (explained in a press release):
The IPCC's calculation of a 1.8% risk of warming to 6 degrees C or more (if GHG rise to 450 parts per million) is equivalent in probability terms to more than 1480 fatal plane accidents per day--540,000 a year, compared to the actual figure of about 30 per year. This level of risk would not be tolerated for flying, the experts argue, and in terms of climate change, requires much greater mitigation than currently foreseen.
In any case, risk mitigation is just about the only thing corporations and governments can hope for at this point, unless there is suddenly a dramatic swing in human sentiment about climate change. In a New York Times interview, Myles R. Allen, a University of Oxford scientist and one of the IPCC report authors, said that he doubts we'll stop ourselves from going over the Earth's carbon budget: It is "is technically doable, but at the moment we're not going in the right direction."
In another move to address the impact of climate change, President Barack Obama ordered a bipartisan task force on Friday to help U.S. communities brace for longer heat waves, heavier downpours, more severe wildfires and worse droughts.
Friday's executive order set up a panel of governors, mayors, county officials and tribal leaders to advise the White House on how the federal government can respond to communities hit by the effects of a changing climate.
Federal agencies were also directed to modernize their programs in ways that will support investments that will help cities and towns gird against extreme weather. More than two dozen agencies will form a council on climate preparedness.
Because no federal legislation to curb climate-warming greenhouse gas emissions is likely to get through Congress due to widespread Republican opposition, the president has been using his executive authority as an alternative to new laws.
Friday's White House order builds on a Climate Action Plan unveiled in June, the centerpiece of which was new regulations to be applied to power plants, and comes three days after the anniversary of the landfall of Superstorm Sandy, which caused more than $60 billion in damage along the U.S. Atlantic coast.
Energy Secretary Ernest Moniz on Friday cited the damage caused by Sandy as a "stark reminder of how disruptions to our nation's critical infrastructure have far-reaching economic, health, safety and security impacts."
The task force is to report to the White House within a year on how the government can best "remove barriers, create incentives and otherwise modernize federal programs to encourage investments, practices and partnerships that facilitate increased resilience to climate impacts, including those associated with extreme weather."
No new federal funds were offered to support the task force.
Eight Democratic but no Republican governors are on the bipartisan panel, even though some of the states hardest hit by extreme weather conditions, including New Jersey, Florida, Arizona, New Mexico and Texas, are governed by Republicans.
States like Florida and Texas face acute financial exposure from extreme weather and climate-related events, according to a report this week by Ceres, a coalition of investors, companies and public interest groups that advocates for sustainable business practices.
Extreme weather events in 2012 cost U.S. taxpayers more than $300 apiece, or $100 billion in total, most of it to pay for federal crop, flood, wildfire and disaster relief, Ceres President Mindy Lubber said in a statement.
Daniel Weiss, a climate strategy expert at the Center for American Progress, said the task force should assess future costs to make communities better prepared and less vulnerable to extreme weather.
"This bipartisan group of state and local officials could be persuasive advocates to an otherwise recalcitrant Congress that federal investments in community resilience will reduce spending on disaster recovery," Weiss told Reuters.
The progressive think tank estimates that in fiscal 2011-2013, the U.S. government spent $6 on disaster recovery for every dollar on community preparedness.
A fact sheet on the new task force is available at
Separately on Friday, the Environmental Protection Agency released its draft climate change adaptation plan and called for public review and comment.
"EPA must help communities adapt to a changing climate," said EPA Administrator Gina McCarthy. "These implementation plans offer a roadmap."]]>
There are myriad lessons that have emerged from the storm, but here are four key issues deserving of special attention.
Floodwaters pour into the Hoboken PATH Station in Hoboken, N.J., near the time of high tide on Oct. 29, 2012, as Hurricane Sandy made landfall.
Credit: The Port Authority of New York and New Jersey.
First and foremost, Sandy drove home the need to rethink coastal development practices that encourage growth in vulnerable areas. Second, the storm, which was forecasted well in advance, proved the value of a robust weather and climate forecasting infrastructure at a time of budget austerity. Third, Sandy revealed a disconnect between the weather community, emergency management officials, and the public when it comes to warnings about an unusually complicated severe weather hazard.
Finally, while direct links between the storm and climate change are difficult to discern, it should be seen as ushering in a new era of consequences for coastal areas due to the combination of long-term, global warming-related sea level rise and storm surges from hurricanes, Nor'easters, and other storms.
Hurricane Sandy delivered a clear message that the relentless pursuit of coastal development needs to be rethought. According to the National Oceanic and Atmospheric Administration (NOAA), 39 percent of the U.S. population lives in counties directly on the shoreline, and if current population trends continue, that coastal population will grow to nearly 134 million from 122 million by 2020.
In Sandy's wake, federal flood insurance policies that subsidize growth in vulnerable areas are being re-evaluated, as are state and local regulations that have inadvertently put people in harms' way. One federally funded program in New York is allowing the government to buy out homeowners who have damaged property in the most prone locations, rather than encouraging them to rebuild.
But as the New York Times reported on April 26, that program is being met with mixed success, as many storm victims are choosing to rebuild rather than move.
New York Gov. Andrew Cuomo (D) has repeatedly emphasized the need to redevelop the state's coastline in a smarter, more storm-resistant way. "We can never make up for the hardship that people went through," he said at an April news conference, "but we can use this as a learning and an improving opportunity."
Coastal flooding in Mantoloking, N.J., as taken from a New Jersey Air National Guard Helicopter. Credit: NJNG/Scott Anema.
Cuomo's message, though, has not done much to change the status quo. Policy makers have not come anywhere close to settling on a broader plan to protect New York City from another damaging storm-surge event. Projects, such as building a surge barrier at the entrance to the harbor, for example, largely remain at the drawing-board stage.
"There has been much more talk than action in rethinking coastal development. Many landowners have chosen to rebuild in place, meaning they're willing to take the risk of another Sandy," said Michael Gerrard, a law professor who directs Columbia University's Center for Climate Change Law.
"Few, if any, firm rules have been issued by any agency," Gerrard said. "No announcements have been made of major changes in the siting of infrastructure. We seem to be witnessing, for the most part, a continuation of business as usual, with a twinge of anxiety and a lot of meetings."
For the insurance industry, Hurricane Sandy was another example of the rising costs of natural disasters, and a warning of the coming consequences due to sea level rise and extreme weather events. According to the reinsurance company Swiss Re, Hurricane Sandy cost at least $70 billion in total damage, with $35 billion in insured losses.
"Hurricane Sandy was a wake-up call that our coastlines are increasingly vulnerable to storm surges from rising sea levels. Low-lying coastal areas with dense concentrations of property may no longer be suitable for building and rebuilding. Difficult decisions will need to be made," said Cynthia McHale, who directs the insurance program at Ceres, which is a national coalition of investors and environmental organizations focused on sustainability. She said insurers are raising rates in coastal locations, while pushing for governmental action to reduce the risk of more damaging events.
"We have a choice: to either gamble on bigger long-term risks or preemptively invest to make vulnerable coastal cities more climate resilient, thereby making today's at-risk areas more insurable," McHale said.
For weather forecasters, Hurricane Sandy was largely a success story, as advances in remote sensing and computer-modeling techniques enabled meteorologists to accurately predict the storm's path nearly one week in advance. Crucially, computer models — particularly a model developed by the European Center for Medium Range Weather Forecasts — foresaw the westward turn that Sandy took after moving parallel to the East Coast. That left hook brought the storm into the Mid-Atlantic states at a perpendicular angle, which put areas along and to the north of the storm's center — all of New Jersey north of Atlantic City as well as southeastern New England — in the area of the strongest winds and highest seas, thereby maximizing the storm surge there.
Historical tracks of tropical storms and hurricanes in the Mid-Atlantic and Northeast, with Hurricane Sandy's track indicated.
Credit: NOAA via Bob Henson, UCAR.
As researchers have since shown, Sandy's track was likely unprecedented compared to the historical records of tropical storms and hurricanes in the region.
The storm clearly demonstrated the value of weather monitoring and forecasting technology, and the need to continue to invest in both, which has been an uphill fight on Capitol Hill, given the recent emphasis on budget cuts.
"I think Sandy helped with identifying for the public how crucial a national federal infrastructure is for these scale events," said Marshall Shepherd, a meteorology professor at the University of Georgia and the current president of the American Meteorological Society. "Sandy was not owned by one jurisdiction and required a coordinated federal response."
NOAA officials have repeatedly cited Sandy in their lobbying push for continued funding for the next-generation of polar-orbiting satellites, telling Congress and the public that forecasts would be far less accurate if just one satellite were to go dark.
While forecasters succeeded in accurately predicting the path and impacts of the storm, there were flaws in how the threat was communicated to the public. For starters, there were no hurricane watches or warnings issued north of the North Carolina coastline, since the National Hurricane Center in Miami, Fla., feared that confusion might result if they were to issue such warnings only to drop them once the storm transitioned from a purely tropical one to a "post-tropical" storm system, which it did on Oct. 29, 2012, shortly before landfall. In such a scenario, the public might wrongly think the danger had passed, NOAA officials said.
A computer model projection made on Oct. 28, for sea level pressure and winds a few thousand feet above the surface on Oct. 30, as Hurricane Sandy crosses the New Jersey coastline. Credit: Weatherbell.com.
During Sandy, the National Weather Service was operating under a set of rules — since changed — that restricted their ability to leave hurricane warnings in effect after a hurricane transitions into a post-tropical storm. According to the new guidelines, drawn up in Sandy's wake, forecasters will have the option of continuing tropical storm and hurricane warnings after a storm makes the post-tropical transition. It is not clear yet to what extent the lack of hurricane warnings played in evacuation decisions, but some have speculated that it may have contributed to New York Mayor Michael Bloomberg's decision to hold off on evacuation orders until just 24 hours in advance, which likely limited the number of evacuees.
Another communications challenge concerned the strength of the storm. Since Hurricane Sandy was a Category 1 storm on the Saffir-Simpson scale as it approached the Mid-Atlantic states, some may have dismissed it as a minor threat along the lines of Tropical Storm Irene, which hit in 2011 and caused comparatively minor damage in New Jersey and New York.
The Saffir-Simpson scale does not take into account a storm's size or its potential storm surge, making it an incomplete indicator of a storm's damage potential. A large Category 1 or 2 storm like Sandy can cause just as much coastal devastation as a small Category 3 storm, for example. Furthermore, sea level rise means that any storm, be it a weak or major hurricane, may be more damaging than a similar storm occurring several decades ago. Discussions are underway to try to communicate a more complete spectrum of storm threats, rather than having forecasters continue to stress the category designation alone.
One alternative to the Saffir-Simpson scale would provide some of the information that the public currently lacks — a measure of how a storm's size may contribute to its damage potential. This metric, known as "Integrated Kinetic Energy" or IKE, takes a storm's size as well as the strength of its winds into account. Hurricane Sandy was the largest hurricane on record, as measured by the diameter of its wind field. Because of its large size, it set a huge expanse of Atlantic Ocean water into motion, ultimately building seas to unprecedented heights at the entrance to New York Harbor .
The Integrated Kinetic Energy calculation was more than 300 terajoules for Hurricane Sandy, which was the largest IKE measurement for any hurricane between 1990 and 2006, which makes it larger than the IKE figure for Hurricane Katrina, which struck the Gulf Coast in 2005.
"If the public was aware that this number was so high, which is an indication of the large potential for damage from storm surge and waves, some of them might have been able to make better life- and property-saving decisions," said Vasu Misra, an associate professor of meteorology at Florida State University, in a press release.
For some, Hurricane Sandy became the new poster event of global warming. While attributing certain characteristics of the storm — such as its record size — to global warming is difficult, if not impossible at this time, it is clear that global warming exacerbated the damage by helping to boost sea levels in the affected areas.
Factors that contributed to the top 10 high-water events measured at New York's Battery Park from 1900 to present. The water height for each event is shown against the benchmark of mean lower low water averaged between 1983 and 2001. Sea level rise (about a foot since 1900) is depicted as a component of storm surge. Although Sandy's surge peaked close to high tide, other events had even higher tide levels.
Credit: Carlye Calvin and Bob Henson, UCAR; data courtesy Chris Zervas, NOAA National Ocean Service.
In New York City, for example, sea level has risen by about a foot during the past century, due to both sea level rise and local land subsidence. This meant that the record surge rode atop a higher baseline water level than it would have had the storm struck a century ago. And with scientists predicting up to 3 feet of sea level rise by 2100, coastal cities around the world will face even greater threats.
The coastal flooding from Sandy's storm surge played out nearly exactly as scientists had previously warned in a series of reports commissioned by state and city governments. All of the subway tunnels connecting Brooklyn and Queens with Manhattan were flooded, as was the tunnel linking Hoboken, N.J., and Manhattan. Air travel was paralyzed, too, as all three major New York area airports experienced coastal flooding and were closed for days, along with Teterboro Airport in northern New Jersey, which is the busiest general aviation airport in the country.
Hurricane Sandy fit into the extreme weather theme of 2012. The storm spun its way ashore in the midst of the hottest year on record in the U.S., when sea surface temperatures off the East Coast were also running well above average, and at the same time that one of the worst droughts since the Dust Bowl era of the 1930s was turning the normally productive soil of the Midwest into dust.
One of the more intriguing areas of research that could yield insights into the way climate change contributes to extreme events concerns the jet stream — the high-altitude ribbon of fast-moving air that steers weather systems around the world — and the rapidly warming Arctic, where sea ice plummeted to a record low in September 2012.
The shape of the jet stream that gave rise to Sandy was viewed with awe by some meteorologists, and suspicion by others.
As the storm began moving north-northeast away from the Bahamas, a massive area of High pressure aloft set up shop over northeastern Canada and Greenland. This high, fittingly known as a "blocking high," prevented Sandy from moving out to sea. At the same time, a deep dip in the jet stream began to dig southward into the Midwest, and the airflow around these two features scooped up Sandy and turned it northwestward, toward land.
Some studies have tied an increase in the "blocking highs" near Greenland, as well as a sharply undulating jet stream in general, to the melting Arctic sea ice, which is one of the most visible signs of a warming planet.
"Our research shows that northward swings, or ridges, in the jet stream have become more frequent in recent decades, exactly in the location where the large blocking high was parked when Sandy came along," said Jennifer Francis, a meteorology professor at Rutgers University and one of the leading proponents of the Arctic connection hypothesis, in an email conversation. "These ridges favor the development of blocks, and they are just the type of pattern we expect to increase as the Arctic continues to warm much faster than the rest of the northern hemisphere."
Marshall Shepherd, the president of the American Meteorological Society, said his graduate students have also investigated the Greenland block that was entrenched at the time that Sandy moved out of the tropics, concluding that it was "off the charts" in terms of its strength.
Andrew Kemp, a researcher at the University of Pennsylvania, said forthcoming research shows that sea level rise contributed to the coastal flooding from Sandy, but it was not the largest factor when compared to the timing of the high tide, the storm track, and other variables. Still, every inch counts, particularly when critical infrastructure is concerned.
"The risk, of course, is when flood heights exceed the physical thresholds of coastal defenses, and infrastructure is flooded. With all things being equal, sea level rise will make that happen more often," Kemp said in an email.
Regardless of whether global warming helped steer Sandy toward land, the coastal flooding it caused should have been an urgent call to action. The failure of coastal cities to implement any large-scale plans to boost climate and extreme-weather resilience in the wake of Sandy is troubling. It suggest New York, or any other coastal city, may get caught flat-footed once again.]]>
The idea that this cacophony could be harmonized — never mind quieted — has long been an unattainable dream for companies. This week, that dream moves one small step toward reality.
The nearly two years, a nonprofit called GISR — the Global Initiative for Sustainability Ratings — has been working to create a standard for company-level sustainability ratings. It is doing this, it says, "to accelerate the integration of environmental, social and governance (ESG) issues and indicators in investment decision-making" by "building a new standard that equips investors, companies and other stakeholders with the tools to recognize true excellence in corporate sustainability."
That is, to get Wall Street and its counterparts around the world singing from the same hymnal on sustainability.
GISR does not intend to rate companies on sustainability. Instead, it will accredit other sustainability ratings, rankings or indices that new to its principles, issues and indicators.
GISR, like the Global Reporting Initiative and Ceres, take an investor-centric perspective, with eye on how shareholder interest can move management and markets. Indeed, all three organizations are linked to the Tellus Institute, a Boston-based nonprofit research and policy organization. GISR is a joint program of Ceres and Tellus, as was GRI, which the two groups spun off as a separate organization, now based in Amsterdam.
At the center of both GRI and GISR is Allen White, vice president and senior fellow at Tellus, who directs the institute's program on "corporate redesign." White is credited with co-founding GRI and served as its acting CEO until 2002. In 2004, he co-founded and now directs of Corporation 2020, an initiative focused on "designing future corporations to create and sustain social mission."
This week, at the Ceres conference in San Francisco, White and Mark Tulay, the GISR program manager (and former program director at Ceres) are unveiling GISR's first major initiative: a beta version of GISR's 12 principles, the core attributes of a ratings framework required to achieve credibility among key stakeholders. The principles are the first step in a multi-year process of building an accreditation process that ratings organizations can begin to use.
This week, GISR also will announce that UPS and McDonald's have committed to participate in its Supporting Stakeholder program. They join other companies that already are playing an active role in GISR's standard development process, including Bloomberg, Deloitte, Intel, Pax World, TIAA-CREF, and UBS.
The ratings system GISR envisions could be a boon to companies suffering from survey fatigue from the dozens of organizations currently rating companies, both multi-issue ratings organizations — such as Dow Jones/SAM, FTSE, MSCI, Oekom, Sustainalytics, Thomson Reuters, and Vigeo — and issue-specific raters — CDP, Climate Counts, Newsweek, Oxfam, Trucost and many others.
According to White, early company response to GISR has been largely positive. "We haven't had almost a single negative comment or skepticism," White told me last week. "Ratings are a fact of life for CEOs, who have to get up in the morning and see that they've been shoved off the Dow Jones Sustainability Index or dropped down from the Iris score or some other scorecard, and they don't like it."
On the other hand, says White, "They feel disempowered because they are the rated entity. They're asked to fill surveys out, sometimes dozens of surveys every year. And then the scores are published via Newsweek or Corporate Knights or others. The outcomes can be wildly volatile: on a list one year, off the next year; a leader by one rater in the same year, a laggered by another rater in the same year."
Moreover, he says, companies' ability to seek recourse for erroneous data or misperceptions can be challenging. "More than occasionally they'll be met with a black box. They'll be told that 'This is intellectual property and we can't disclose of any of it,' or in some cases, 'We can disclose, but it'll cost you.'"
"Every single company that we've spoken to said there's extreme volatility in these ratings outcomes, coupled with too many surveys and too many indicators," says Tulay. "They also express concerns about how to engage with these raters. Sometimes there's a fee associated with getting information on why a company achieved a certain score."
GISR's principles aim to address such challenges. For example, one them, "Value Chain," states that "a rating should apply to all portions of a rated company's value chain over which the company exercises control or significant influence." The principle "Transparency" states that "A rating should be transparent to those whose decisions are affected by the application of such rating." (All 12 principles can be viewed at the end of this article.)
Some of this may seem like common sense, but creating such principles isn't easy. Take Transparency. There's a natural tension between raters, who want to maintain their intellectual property, and the rated, who want visibility into what's behind the ratings. Or Comprehensiveness: While ratings systems themselves need not be comprehensive — many look at just one issue, like greenhouse gas emissions — they need to be comprehensive in the way they look at things.
For example, White explains, "If you're rated on carbon emissions and all that the carbon rater does is to say your emissions went up or your down, or are more or less per dollar of revenue than some other company, that's actually a very narrowly defined concept of disclosure of carbon emission. There are many, many ways to reduce carbon, some of which have very favorable or positive effects on society, on the economy, on communities, on labor practices relative to others. What about all the aspects of those impacts, positive and negative, quite apart from the absolute up and down numbers?" GISR will require that raters address such issues.
GISR joins an emerging ecosystem of players working to provide investors and others with reliable information on companies' sustainability performance. It includes
While each of these organizations has a distinct mission and methodology, they share the goal of elevating sustainability among investors by creating a set of relevant tools for measuring, reporting and comparing companies' sustainability performance. The theory is that once this is possible, investors will reward leaders and punish laggards, moving companies further and faster than regulations and other policy mechanisms.
This week's release of the 12 principles will precede a public comment period during June and July, followed by the creation of a public registry of sustainability ratings, including the indicators used by each, eventually contained in a searchable database. After that, GISR will produce a guide for asset managers and asset owners to use to assess the suitability of different sustainability ratings for their purposes. GISR also plans to look into developing a sustainability questionnaire app "to help companies address survey fatigue by automating the information pipeline of sustainability information with raters."
A number of sustainability executives are no doubt panting expectantly right about now.
GISR, for its part, isn't short of high expectations. I asked White where he sees his organization's impact five years from now. "Our big vision is that we are a major market mover, equivalent to the way financial ratings have an enormous impact on who raises capital, at what cost, and who gets boxed out of the market because of poor credit standings."
Will companies eventually be boxed out of markets because of poor sustainability ratings? It's a pipe dream, at least for now. But if corporate sustainability performance can't eventually affect markets, the idea of companies collectively moving the needle on sustainability issues is essentially a pipe dream, too.
For the past quarter century, Ceres (www.ceres.org ) has mobilized hundreds of companies and investors managing trillions of dollars toward building a global economy that does not sacrifice the environment in the name of profit. This has required fundamental changes in how these key capital market players analyze and respond to a range of sustainability threats, from climate change and exploitation of scarce water resources, to vulnerable supply chains, to the health and human rights of workers and communities.
Ceres worked to catalyze this change by launching the Global Reporting Initiative (www.globalreporting.org ), which has spurred companies around the world to report on and address sustainability challenges from greenhouse gas emissions to the resiliency of supply chains. Ceres also introduced the term "climate risk" into the economic lexicon, galvanizing mainstream investor attention to climate change, and prompting both the U.S. Securities and Exchange Commission and the National Association of Insurance Commissioners to issue mandatory climate risk reporting requirements for companies.
Now we're doing the same for "water risk," as the historic drought afflicting California has awakened many businesses and investors to the risks they face from water scarcity. Twenty-five years ago, few companies or investors even conceived of these risks. Now, the world's largest companies and investors are integrating climate and water risk management across their operations and overall strategies.
However, this shift towards sustainability isn't happening fast enough or broadly enough. Climate change, perhaps our biggest sustainability challenge, is accelerating more aggressively than anyone predicted a decade ago. Time for meaningful action is running out, and progress is still hampered by continued short-term thinking by many policymakers, corporations, investors and other economic actors.
Take the oil and gas industry, for example. Oil and gas companies continue to invest massively – more than a half-trillion dollars a year – to find and extract fossil fuels from more challenging and unconventional places, including oil sands in Canada (where the oil is bound up in sand), deep in layers of shale formations (where hydraulic fracturing and horizontal drilling technologies are being used to extract the oil and gas) and in the polar seas, the most hostile of all environments.
Yet, we can't possibly use or burn all of this oil without running headlong off the climate cliff – the point where climate change becomes catastrophic to both the environment and the economy.
We need to curb our reliance on fossil fuels, not build our energy future around them. It is now well-accepted climate science that the upper limit on climate change, before widespread global disruption takes place, is two degrees Celsius above pre-industrial levels. If existing oil reserves are burned, we will blow right through that ceiling. This is the trajectory we're on right now.
Some welcome this new era of "cheap" unconventional oil and gas, but it isn't really cheap at all. It is "cheap" only because the economic costs of climate change, including the costs of rising sea levels, climate-driven severe weather events and the pubic health consequences of a warmer Earth are never part of the calculation. The hundreds of billions of economic damages caused by stronger, more damaging storm events, including Superstorm Sandy, are the most obvious example. The disruptive impacts of changing weather patterns on agriculture and key commodity markets aren't figured into the cost of carbon-based fuels either. In short, as climate change causes larger economic ripples across the globe, those costs are never factored into the price of a barrel of oil and won't be borne by those reaping hefty profits from their production. That's why when critics argue that clean renewable energy – solar and wind, for example – are less cost-competitive with carbon, it's only because in our collective myopia we never calculate the true societal costs of carbon pollution that remains largely unregulated.
This same short sightedness is also evident when it comes to water risks. Populations continue to swell in the country's most arid, water-stressed regions, including much of the West and Southwest. Water infrastructure is aging and inefficient and investment is lagging, in large part due to water being undervalued and underpriced by local water utilities. Many regions where hydraulic fracturing is especially concentrated are also areas reeling from prolonged droughts, depleted aquifers and growing water competition from farmers, homeowners, industry and other users. (See Ceres' new report on this topic).
The simple truth is that short-termism is still all too prevalent in corporate and investor decision-making. It underpins all of our sustainability threats. We remain mired in quarterly capitalism — a system that drives far too many CEOs, directors, investors and analysts to focus on short-term performance at the expense of long-term value creation and global sustainability.
A 2012 research paper by Generation Investment Management, Sustainable Capitalism, offers sobering news in this regard. When a group of top asset managers attending a conference sponsored by Morgan Stanley were asked about their investment time horizon, 55 percent said a quarter or less; only 20 percent said more than a year. Another survey revealed that 78 percent of managers would reject a net-present-value-positive project if it would lower quarterly earnings below consensus expectations, and 80 percent would focus on this short-term metric at the expense of building long-term shareholder value.
This should alarm every investor looking for long-term value creation, because climate regulatory risks alone could cost investment funds $8 trillion by 2030, according to the international consultancy Mercer.
But it's not hard to see why this short-termism is so pervasive. Average CEO tenure has dropped from eight years to four over the past generation, giving CEOs incentives to manage for the near term and to avoid decisions that might make long-term sense even though they don't immediately improve the bottom line.
For example, managing the long-term risks of climate change might require near-term investments and commitments to new technologies, product innovation and new risk assessment tools that a CEO might just as soon leave to his or her successor. But most compensation packages are linked not to long-term value creation and skillful management of long-term risks, but to quarterly or annual bottom-line performance. Investors, too, demand quarterly performance and oftentimes fail to examine how companies are preparing to manage climate and other environmental risks, or even to exploit promising opportunities in clean energy innovation that are our best defense against catastrophic climate change impacts.
So, what is Ceres doing to shift this dangerous paradigm?
• First, we have created the basic tools companies and investors need to begin operating in ways that contribute to a sustainable economy, tools designed to catalyze long-term thinking about how sustainability risks and opportunities will impact business and investing in the 21st century. The Ceres Roadmap for Sustainability is a framework and practical guide that hundreds of companies are using to become more sustainable. The 21st Century Investor: The Ceres Blueprint for Sustainable Investing is a how-to guide to help investors, particularly large institutional investors, integrate sustainability risks and opportunities across their decision-making.
• Second, through our investor-led Carbon Asset Risk initiative, we are drawing attention to the risks fossil fuel companies are running in developing new reserves that might be unusable as the low-carbon global economy takes hold. Due to a variety of trends, including escalating carbon-reducing regulations, renewable energy sourcing and other low-carbon technologies, many coal and oil reserves being developed today may ultimately be worthless as global demand for fossil fuels begins declining. Fossil fuel reserves that have both expensive production costs and a high carbon footprint are considered most at risk of being unusable, thus becoming stranded assets, in the future economy. Ceres and Carbon Tracker are coordinating the effort by nearly 100 institutional investors who are pressing the world's 45 largest fossil fuel companies on these concerns.
• Third, Ceres is challenging powerful capital market players to meet global clean energy investment requirements by 2030. The International Energy Agency states that to keep global warming below the critical two degree Celsius threshold, global clean energy investment by governments, companies and investors must be increased by an average of $1 trillion a year for next 36 years. Ceres calls this the Clean Trillion energy challenge, and we have called for a doubling of clean energy investing to $500 billion a year by 2020 and to $1 trillion a year by 2030. Our report, Investing in the Clean Trillion: Closing the Clean Energy Investment Gap contains 10 specific action steps towards this goal in three broad areas: mobilizing investor action to scale up clean energy investment, promotion of green banking and debt capital market, and reforming climate, energy and financial policies.
Finally, company by company, investor by investor, we are making the business case for sustainability. Sustainability isn't a luxury, it's an essential strategy for economic survival. It is, therefore, incumbent on companies, large institutional investors and other key market players to stop sitting on the sidelines of the climate debate and get in the ring. They can have a powerful influence in moving policies that will help secure a stronger, sustainable economy based on the recognition that a strong economy depends upon integrating the risks of climate change and other sustainability challenges and moving capital to the opportunity side of the sustainability equation.
This is starting to happen. Our Investor Network on Climate Risk now comprises more than 100 institutional investors with more than $12 trillion under management, and similar networks have emerged in the Asia-Pacific, Europe and Australia/New Zealand. Major corporations from every sector of the economy, from Ford Motor Co. to Nike, are making sustainability a core business value integrated into every aspect of business operations. More than 750 leading companies, including General Motors, Apple, Unilever and KB Home, have signed the Ceres' Climate Declaration calling for concerted action to combat climate change and for seizing the huge business opportunities in clean technology, renewable energy efficiency.
The challenge is great, our time is short, and the stakes couldn't be higher.
Article by Mindy Lubber is president of Ceres, a nonprofit organization mobilizing business and investor leadership on climate change and other sustainability challenges. Learn more at www.ceres.org and follow on Twitter @CeresNews]]>
That's why CalPERS and dozens of other investors petitioned the U.S. Securities and Exchange Commission for climate disclosure guidance in 2007 and applauded the SEC's decision to issue formal interpretive guidance in 2010. Since then, more companies are mentioning climate issues in financial filings, but the breadth and quality of the disclosures with the SEC are still lacking.
These shortcomings were a key point in a major report issued recently, "Risky Business: The Economic Risks of Climate Change in the United States," by three Wall Street heavyweights: Michael Bloomberg, Henry Paulson and Robert Rubin. "Businesses and investors have largely been kept in the dark about how climate change will impact specific industries or specific regions, and that puts American businesses and the American economy in an extremely vulnerable position," Bloomberg told reporters earlier this summer.
]]>Just as companies need to step up their disclosure efforts, more investors should be scrutinizing material climate risk data that are being provided in corporate 10-K filings. But doing so requires an efficient way to easily find and analyze climate disclosures in 10-Ks.A new web-based climate search tool from the nonprofit sustainability group Ceres and CookESG Research will be helpful in filling this void. Available at www.ceres.org/secsearchtool it covers annual SEC filings by all of the largest publicly traded U.S. companies in the Russell 3000. It automatically excerpts climate information from 10-K filings, such as reporting on regulatory risks, renewable energy opportunities and extreme weather impacts.
This tool is valuable for companies, analysts and investors. For companies, it provides an efficient way to understand how industry peers view material climate risks. For analysts, it can demonstrate gaps between voluntary and mandatory reporting to highlight financially material issues. And investors can be better equipped to engage directly with companies on the quality of their responses to climate change.
A new Ceres analysis derived from the tool shows that 62 percent of S&P 500 companies provided climate disclosure in their 2014 filings. But the tool finds a wide range in the quality of that disclosure, from quantified information on financial impacts to less than useful cryptic boilerplate language. Many of these companies acknowledge climate risks but provide no information on financial exposure and efforts to reduce that exposure.
Investors require better climate disclosure in securities filings to avoid risky investments. Whereas voluntary climate reporting provides helpful data for investors, it often contains incomplete information and is not focused on material issues. Also, some S&P 500 companies and many smaller ones provide no voluntary disclosure at all.
In truth, securities regulators are the best positioned of any regulator to obtain comparable, quantified and detailed information from companies about climate risks. Long-standing SEC rules require disclosure of forward-looking material risks, and climate change is one of the biggest such risks that companies and investors face.
Reflecting such concerns, CalPERS's newly adopted ten "Investment Beliefs" are meant to provide a basis for strategic management of our investment portfolio, inform organizational priorities and ensure alignment between our board and staff. Belief No. 9 states that "risk to CalPERS is multifaceted and is not fully captured through measures such as volatility or tracking error." It expands by noting that as a long-term investor, CalPERS must consider risk factors that are slow to develop, such as climate change and natural resource availability.
Fully incorporating all risks, including climate change, into the investment-decision-making process will have a tangible impact in shifting significant capital away from high-carbon emitters toward clean energy alternatives.
To further accelerate this shift, CalPERS is an active participant in two important initiatives: carbon asset risk and green bonds. Climate disclosure is a critical element of both efforts.
The carbon asset risk initiative, which includes 75 investors managing $3.5 trillion in assets, asks some of the world's largest oil and gas, coal and electric power companies to stress-test the financial risks that global warming poses to their businesses. The issue is especially relevant to oil and gas firms that are investing billions of dollars a year developing high-cost, high-carbon projects that could potentially be stranded as carbon-reducing regulations and renewable energy take hold globally in the coming decades. This effort resulted in new, detailed responses from companies like Exxon Mobil Corp. and Royal Dutch Shell, which illustrate, unfortunately, their unwillingness to seriously wrestle with these issues. An expectation that this risk will be discussed in more detail in SEC filings is part of the solution.
CalPERS is also eager to explore growing opportunities with fixed-income climate bonds and green bonds, a market that has exploded in the past two years. Although many factors are still in play in this emerging market, it goes without saying that better disclosure around these bonds is important for achieving even bigger growth and acceptance.
The bottom line: CalPERS is a big believer in the philosophy that what gets measured gets managed, and what gets disclosed gets done. Stronger climate disclosure is a hugely important step in managing the colossal climate challenge.
Anne Stausboll is CEO of the $300 billion California Public Employees' Retirement System. CalPERS is a member of the Investor Network on Climate Risk,a network of 110 institutional investors with collective assets totaling $12 trillion.
Every fracking job requires 2 million to 4 million gallons of water, according to the Groundwater Protection Council. The Environmental Protection Agency, or EPA, has estimated that the 35,000 oil and gas wells used for fracking consume between 70 billion and 140 billion gallons of water each year. That's about equal, EPA says, to the water use in 40 to 80 cities with populations of 50,000 people, or one to two cities with a population of 2.5 million each.
Some of the most intensive oil and gas development in the nation is occurring in regions where water is already at a premium. A paper published last month by Ceres, a nonprofit that works on sustainability issues, looked at 25,000 shale oil and shale gas wells in operation and monitored by an industry-tied reporting website called FracFocus. Ceres found that 47 percent of these wells were in areas "with high or extremely high water stress" because of large withdrawals for use by industry, agriculture, and municipalities. In Colorado, for example, 92 percent of the wells were in extremely high water-stress areas, and in Texas more than half were in high or extremely high water-stress areas.
"Given projected sharp increases in production in the coming years and the potentially intense nature of local water demands, competition and conflicts over water should be a growing concern for companies, policymakers and investors," the Ceres report concluded. It goes on to say that:
Prolonged drought conditions in many parts of Texas and Colorado last summer created increased competition and conflict between farmers, communities and energy developers, which is only likely to continue. … Even in wetter regions of the northeast United States, dozens of water permits granted to operators had to be withdrawn last summer due to low levels in environmentally vulnerable headwater streams.
Another recent study by the University of Texas looked at past and projected water use for fracking in the Barnett, Eagle Ford, and Haynesville shale plays in Texas, and found that fracking in 2011 was using more than twice as much water in the state as it was three years earlier. In Dimmit County, home to the Eagle Ford shale development in South Texas, fracking accounted for nearly a quarter of overall water consumption in 2011 and is expected to grow to a third in a few years, according to the study.
Moreover, an April report by the Western Organization of Resource Councils found that fracking is using 7 billion gallons of water a year in four western states: Wyoming, Colorado, Montana, and North Dakota. "Fracking's growing demand for water can threaten availability of water for agriculture and western rural communities," said Bob Leresche, a Wyoming resident and board member of the group.
The national oil and gas trade association, American Petroleum Institute, correctly notes that the "industry's water use is small when compared to other industrial and recreational activities." But even though hydraulic fracturing usually accounts for just 1 percent or 2 percent of states' overall water use, the Ceres study notes that "it can be much higher at the local level, increasing competition for scarce supplies."
Not surprisingly, the oil and gas industry, along with companies drawn by the opportunity to profit from a better way to frack, are all seeking ways to reduce and even eliminate fracking's thirst.
A new company in Texas, Alpha Reclaim Technology, sees using treated wastewater from municipal sewage-treatment plants as part of the answer. Founded in 2011, the company has signed up cities to provide about 21 million gallons of treated wastewater a day and is negotiating with oil and gas exploration and production companies to make the switch in the Eagle Ford shale play.
With regard to water use and fracking, Jeremy Osborne, the company's vice president and general counsel, says, "We are really in a collision course here in Texas"—a course he says is accelerated by drought and population growth.
But Jillian Ryan, Alpha Reclaim Technology's vice president for government affairs, said changing longstanding practices in the oil and gas industry can be a challenge. While the industry talks a good game about conserving water, Ryan says, "We can have a hard time getting oil and gas companies to live up to what they are talking about. Nobody wants to change. It's easier to drill a water well where they are drilling [for oil and gas]."
Another player in this oil and gas niche is GASFRAC Energy Services, a Canadian company that says it has successfully fracked about 2,000 wells using liquid propane gas in place of water. Most of these wells are in Canada, but about 100 of them are in Texas.
Environmentalists and fracking critics, however, are alarmed at the thought of fracking with propane. Prompted by the possibility that GASFRAC would be employed in New York state and could evade a state moratorium on fracking by using propane instead of water, environmental groups, including the Sierra Club and the Natural Resources Defense Council, protested to the commissioner of the state's Department of Environmental Conservation. Similar to water-based fracking, the groups said, fracking with propane also requires "the addition of toxic chemicals." Because GASFRAC's method is proprietary, the groups said in their letter that "there is little publicly-available information on the process" and the exact chemicals it uses.
Propane is also very flammable, and in two cases in Alberta in 2011, fires broke out during GASFRAC fracking operations, injuring a total of 15 workers.
Cornell University engineering professor Anthony Ingraffea is among those who are very skeptical of fracking in shale formations with propane and other alternatives to water. Ingraffea has been studying fracturing since doing research for his doctorate in the 1970s. He finds that even modern fracking practices, using millions of gallons of water per well to yield what he says is just 10 percent to 15 percent of oil and gas out, are "very inefficient and inelegant."
Using propane or a propane-butane combination, Ingraffea says, has a positive side in that it eliminates a key problem with water-based fracking: the disposal of vast quantities of flowback water that returns to the surface after fracking is completed and is often contaminated with things such as salts and radioactivity.
But, he added, no one has yet clearly demonstrated that fracking with propane or some of the other alternatives—such as using a nitrogen or carbon dioxide gel—can compete on economics with water. Propane, he said, "is expensive and nobody really knows how much it takes to develop a typical shale gas well with a lateral that is a mile or two long."
Oil and gas service companies such as Halliburton and Schlumberger have thrown a lot of money and bright minds at seeking efficiencies over many years, said Ingraffea, and if there was a "silver bullet you would think those companies would have hit it very hard."
As the Ceres report concludes:
Shale energy development highlights the fact that our water resources were already vulnerable before additional demands were introduced. Regulators, water managers and ultimately all significant economic players who rely on abundant supplies of water must double-down their efforts to better manage this limited and most precious resource.
Tom Kenworthy is a Senior Fellow at the Center for American Progress.]]>