Recently, Elm posted a piece discussing comments from Kevin Parker, the CEO of Deutsche Asset Management, an investment firm with three-fourths of US$1 trillion under management. We expanded that original post for EHS Journal, who just published it. The expanded … Continue reading →
Yesterday, the world’s largest retailer and its cadre of sustainability advisors released the 61-page Walmart Supplier GHG Innovation Program: Guidance Document. Elm has read through this document and provides a brief overview of what we think are several important points. What follows is a combination of excerpts from the document combined with Elm comments. Not all of these points are implementation “how-to’s”. Some of our comments reflect potential problems that should be evaluated by suppliers who are impacted by Walmart’s supplier sustainability initiatives. The program will initially focus on the following product categories: Animal feed, apparel, candy, cheese, frozen food, fruit, grains, household detergents, meat, media, milk, motor oil, pharmaceuticals, produce, sanitary paper products, snacks, soap & shampoo, soft drinks & beverages, televisions, and vegetables. GIVING CREDIT WHERE CREDIT IS DUE (TO WALMART) In past articles, Elm discussed our view there is a true business risk – rather than competitive advantage – to first-mover adoption of GHG reduction programs. We had anticipated that such risk would be rooted in regulatory requirements. While that may still be a concern in the longer term, it appears now that the more significant risk relates to Walmart suppliers. The retailer has specified that no
Read more →NYT reports that Washington has abandoned hope of issuing carbon legislation this year, including cap-and-trade. The inaction is also dragging down regional/state programs as well, including the well-hyped RGGI trading program. This shouldn’t come as a real surprise to anyone. But it does continue to increase the business uncertainty surrounding emissions in the US. Tune in again next year. Or the year after….
Read more →Last night (April 20, 2010), CNBC aired an hour-long TV segment on the burgeoning industry labeled “carbon hunting”, the practice of finding, aggregating, marketing and selling carbon credits. While the story illustrated successful projects, it also highlighted a myriad of risks in the carbon trading industry. Check your local TV listings for the next airing.
Read more →Environmental Leader has reported that the Hungarian government sold 2 million previously used CERs, the market became tepid. Then when prices fell from more than 12 euro per credit to less than one euro, trading was suspended on two exchanges, Bluenext and Nord Pool. The NYT provided more details of the transaction, stating The credits appear to be part of massive blocks of CERs awarded to Eastern European states and Russia after the collapse of Soviet-era industry. This created a loophole used by Hungary to reintroduce used CERs back into the market… Carbon traders said countries like Hungary were exploiting the loophole to earn more money from the carbon trading system than they could by selling the credits that they had previously earned under the Kyoto system… The traders said at least one other E.U. member state had acted similarly earlier this year. The EU said they were “surprised and concerned” about the situation. BusinessWeek quoted others who expressed more urgency about the matter: “The supply and demand dynamics have been changed,” said Paul Kelly, chief executive officer of JPMorgan’s EcoSecurities unit. While the scope of the problem has yet to be determined, buyers are “questioning the authenticity” of what
Read more →Use of New Technology Tracks Public Perception of Companies’ Sustainability/Climate Programs In the Federal Register dated February 8, 2010 (75 Fed. Reg. 6290), The Securities and Exchange Commission (SEC) published its Interpretive Guidance on financial disclosure/reporting requirements as they apply to climate change matters, which is EFFECTIVE IMMEDIATELY. Among the specific risk factors that SEC highlighted in this Interpretive Guidance is the potential business risk associated public opinion/reputational risk. SEC stated: Another example of a potential indirect risk from climate change that would need to be considered for risk factor disclosure is the impact on a registrant’s reputation. Depending on the nature of a registrant’s business and its sensitivity to public opinion, a registrant may have to consider whether the public’s perception of any publicly available data relating to its greenhouse gas emissions could expose it to potential adverse consequences to its business operations or financial condition resulting from reputational damage. In response to this SEC mandate, The Elm Consulting Group International, LLC has partnered with Sentiment360, a global online monitoring company that delivers new media business intelligence SaaS solutions. With offices in the US, UK and the Philippines, Sentiment360 has a proven track record in collecting, analyzing, understanding and
Read more →As we previously reported, the SEC issued their interpretive guidance concerning the need for publicly-traded companies to identify, assess and (if necessary) report climate-related business risks within existing SEC reports. This interpretive guidance document was published in the Federal Register of February 8, 2010. Elm has reviewed this publication and provides the following excerpts that we feel may be most critical to companies who are looking to address the requirements of the new Interpretive Guidance. These excerpts may be slightly edited for length and clarity, but we have attempted to ensure that substantive information remains as in the publication. The Commission has not quantified … a specific future time period that must be considered in assessing the impact of a known trend, event or uncertainty that is reasonably likely to occur. As with any other judgment required by Item 303, the necessary time period will depend on a registrant’s particular circumstances and the particular trend, event or uncertainty under consideration. [Management] should not limit the information that management considers in making its determinations. Improvements in technology and communications in the last two decades have significantly increased the amount of financial and non-financial information that management has and should evaluate, as
Read more →In 2009, there was a general sense in the US that some regulatory and economic certainty would finally be established relative to greenhouse gases, and CO2 in particular. The current administration made highly public moves and statements to that effect, which were mirrored by action in Congress and the Senate. EPA issued its finding of endangerment. And there was significant optimism that the COP15 Copenhagen meeting would bear fruit. Fast forward to February 2010. There has been quite a shift in direction and now there is arguably more business risk related to CO2/GHG than there was going into 2009. Among recent highlights: Nike formally announced that they are abandoning the use of carbon offsets and Renewable Energy Certificates (RECs), citing, among other concerns: there is substantial scrutiny of the use of RECs, in particular related to whether they in fact help create new renewable power, or whether they are simply payment to a project that would have existed anyway. … Moving forward, however, our preference is to achieve climate neutrality through a combination of energy efficiency and the purchase of more direct forms of renewable energy, through on-site applications and other means. The German Emissions Trading Authority (DEHSt) computer system
Read more →According to EnvironmentalLeader.com, San Francisco’s federal court settled a lawsuit in which environmental groups and four U.S. cities accused the Export-Import Bank of the United States, the country’s official export-credit agency, and the Overseas Private Investment Corp., of financing energy projects overseas without considering impacts on global warming, Santa Monica Daily Press reports. Friends of the Earth, Greenpeace, Boulder, Colorado. and the California cities of Arcata, Oakland and Santa Monica, filed the lawsuit in 2002, claiming that “the two agencies provided more than $32 billion in financing and loan guarantees for fossil fuel projects over 10 years without studying their impact on global warming or the environment as required by the National Environmental Policy Act,” FoxReno.com reports. The cities claimed they would feel the environmental impacts of overseas projects. The two agencies have agreed to provide a combined $500 million in financing for renewable energy projects and take into account GHG emissions associated with projects each company supports. Under the settlement, Ex-Im agreed to develop a greenhouse gas policy and start considering CO2 emissions when evaluating fossil fuel projects for investment. OPIC agreed to reduce the GHG emissions associated with projects it supports by 20 percent over the next 10
Read more →The Securities and Exchange Commission (SEC) today voted to require public companies to disclose the financial risks they face related to climate change. In her opening remarks, SEC Chairman Mary Shapiro emphasized that we are not opining on whether the world’s climate is changing; at what pace it might be changing; or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics. The Commission is also not considering amending well-defined rules concerning public company reporting obligations, nor redefining long-standing interpretations of materiality. The vote requires that the SEC develop and issue an “interpretive release” – guidance that can help public companies in determining what does and does not need to be disclosed under existing rules. Specifically, the SEC’s interpretative guidance highlights the following areas as examples of where climate change may trigger disclosure requirements: Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic. Impact of International Accords: A company should consider, and
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