Ceres and the “inside” game

Oil-rig-pumpIt’s been 45 years since the first Earth Day, and, as I was reminded when reading this brief history, some 20 million Americans — one in 10 of us — participated on April 22, 1970. That took organizing. And it delivered results: the Clean Air Act, the Clean Water Act, laws regulating the disposal of hazardous waste and the quality of drinking water, and the Toxic Substances Control Act, regulating chemicals in food, drugs and cosmetics. Such was the power of the environmental movement.

I’m inclined to think that environmentalists today ought to devote more of our money and time towards building or rebuilding that movement. Some–Bill McKibben, 350.org, the Sierra Club, Greenpeace–are trying to do so, but other, big, well-funded organizations continue to play the “inside” game, working to persuade elites–federal, state and local officials, corporate executives, investors–to change. Success will require both grass-roots power and policy change, to be sure, but without a more powerful movement, “inside” strategies aren’t going to get us where we need to go.

Last week in The Guardian, I wrote about the Carbon Asset Risk initiative, a campaign coordinated by Ceres and Carbon Tracker, with support from the Global Investor Coalition. To succeed, this campaign will require action by the SEC, investors and the boards of directors and executives of oil companies who, if all goes according to plan, will shift their capital outlays into low-carbon energy.

Here’s how my story begins:

Can fossil fuel companies be transformed into allies in the fight against climate change?

As unlikely as it might seem, a coalition of environmental groups and investors is trying to persuade coal, oil and gas companies to turn away from carbon-polluting sources of energy and invest in low-carbon alternatives.

Ceres, a Boston-based network of investors, companies and nonprofits, andCarbon Tracker, a London-based nonprofit that has popularized the notion of a “carbon bubble,” have organized a new campaign around carbon asset risks.

The campaign aims to get fossil fuel companies first to disclose the risks created by their dependence on carbon-intensive assets, and then, as Ceres puts it, “ensure they are using shareholder capital prudently” in a world that takes “the economic threat of climate change seriously.” Not today’s world, needless to say, but a world that the groups fervently hope will arrive in the not too distant future.

I dearly hope to be proven wrong but, much as I admire the people at Ceres, my gut reaction to this strategy is….are you kidding me?

As The Guardian reported last week, BP (“Beyond Petroleum”) invested billions of dollars in clean and low-carbon energy in the 1980s and 1990s “but later abandoned meaningful efforts to move away from fossil fuels.”

Now Ceres wants the SEC and Wall Street to persuade BP to invest in clean energy. Again.

I’m tempted to wrap up with the overused cliche about insanity, but I’ll resist.

You can read the rest of my story here.

With friends like these, who needs enemies?

59a428e7-4ca9-4d6c-a14e-79964bedde8c-1020x612Back in January, I wrote a blog post headlined A modest proposal for big green NGOs that suggested, in what was intended to be a helpful way, that the Environmental Defense Fund, the World Wildlife Fund and The Nature Conservancy urge their corporate allies to speak up in support of the EPA’s proposed rules to regulate coal plants, a cornerstone of the Obama administration climate policy.

They all assured me that they are doing the very best they can to persuade big companies to do so.

Well, it turns out they’re not having much success.

Today, The Guardian published my story about those corporate allies, headlined Why Corporate America is Reluctant to Take a Stand on Climate Action. I surveyed 50 companies that have worked with EDF, WWF or The Nature Conservancy asking them for their position on the EPA Clean Power Plan.

Guess how many of the 50 told me that they are working alongside their environmental partners to support the plan? Three–Google, Mars and Starbucks.

Most are staying out of the fight but as Anne Kelly of Ceres, which is lobbying for the plan, told me, their “silence isn’t neutrality.” Instead, their silence allows the US Chamber of Commerce and other conservative trade associations to speak for the business community on climate and energy issues. And, as you probably know, the chamber is no fan of climate regulation.

Here’s how my story begins:

Many environmental groups consider the Obama administration’s plan to regulate carbon-spewing coal plants, which aims to cut carbon pollution by 30%, as one of our last chances to win the fight against climate change.

But the vast majority of their top corporate partners – companies like Coca-Cola, PepsiCo, FedEx, UPS, Target and Walmart, which have worked with environmental NGOs for years – aren’t backing them up, according to a Guardian survey.

The survey consisted of calls and emails to nearly 50 corporations that work with three environmental groups – Environmental Defense Fund, The Nature Conservancy and the World Wildlife Fund US – that have identified the Environmental Protection Agency’s Clean Power Plan as a top priority. These are Fortune 500 global companies that tout their sustainability efforts and celebrate their environmental partnerships.

Just three of them – Starbucks, Mars and Google – support the Clean Power Plan, which is a cornerstone of the Obama administration’s climate change efforts. Caterpillar and CSX Corp, a coal-carrying railroad, oppose the EPA plan. The vast majority take no position.

The reluctance of companies to take a stand raises questions about the depth of partnerships between companies and NGOs. By remaining quiet, these companies make it harder for the EPA to roll out the plan in the face of vehement opposition from fossil fuel companies and Republicans. “Silence isn’t neutral,” says Anne Kelly of Ceres, who is organizing companies to support the EPA.

The lack of public support could jeopardize the clean power plan, and – if the US isn’t able to make a strong climate commitment as a result – could ultimately undermine the success of the global climate talks in Paris this year.

The companies that won’t get involved say it’s because the regulation of power plant emissions is not core to their business. Environmentalists maintain that climate change is everybody’s business.

I hope you’ll take the time to read the rest of the story, and share it. I also put together a sidebar compiling the corporate responses that I collected to my survey.

I’m sorry to say that all of this points to the shallowness of much  corporate rhetoric about “sustainability.” It also tells me that, more than ever, we need a political movement to demand government action to stop climate pollution. Companies need to know that if they don’t take a stand on behalf of the climate, they’re going to hear about it from activist groups (where are you, Greenpeace, now that we need you?) and they’re going to risk losing the support of their employees and customers.

Put simply, without a whole lot more people pushing them in the right direction, GE, Goldman Sachs, IBM and Walmart aren’t going to get us where we need to go. Not even close.

If I sound frustrated, it’s because I’m feeling that way. I must add that none of this is personal. I like and respect the people I know at EDF, WWF and The Nature Conservancy. They’re smart, dedicated and hard-working. But they’re mostly playing the same insiders game that failed to get climate legislation through Congress back in 2009.

I also admire the sustainability executives at many of the companies that are sitting on the sidelines of the climate fight. They’re great internal advocates for the cause, and they’re not to blame for this widespread corporate indifference. It’s their CEOs who need a wake-up call.

In the end, the issue of global warming is really not all that complicated: It’s time to stop using the atmosphere as a waste dump for carbon pollution. That’s just wrong, and that’s why the EPA rules should be everybody’s business.

A modest proposal for big green NGOs

da9cdecb-7922-49b2-b8a2-3ff0969881e4-1020x612Here’s an idea for big environmental NGOs that work with corporate partners: Kindly recommend to those partners that they raise their voices in Washington in support of the EPA’s proposed coal plant rules.

The coal plant rules are the cornerstone of the Obama administration’s climate change policy. Yet they are being strongly opposed by mainstream Washington business lobbies like the US Chamber of Commerce and the National Association of Manufacturers (NAM).

The big corporate partners of the green groups could make a difference. They could support the rules on their own–few have done so–and, just as important, speak up inside the halls of the chamber and NAM, asking them to halt their opposition to the rules.

No climate issue matters more, Mindy Lubber of Ceres told me, for a story posted the other day at Guardian Sustainable Business, which we’ll get to in a moment.

In a report on corporate engagement [PDF], WWF lists more than a dozen “corporate engagements with an annual budget greater than US$250,000.” Partners include Avon Products, Bank of America, The Coca-Cola Co., Domtar, Ecolab, Google, Johnson & Johnson, Kimberly-Clark, Mars, McDonald’s, Procter & Gamble, Sealed Air, Sodexo and Toyota.

The Nature Conservancy says on its website that “the private sector has an important role to play in advancing our conservation mission” and publishes a long list of partners, including 3M, Alaska Airlines, AT&T, Avon, Bank of America, BHP Billiton, Boeing, BP, Bunge, Cargill, Caterpillar, CH2MHill, Coca-Cola, CSX Transportation, Delta, Disney, Dow Chemical, EcoLab, General Mills, Goldman Sachs, Harley Davidson, IBM, JPMorgan Chase, Kimpton Hotels, Lowe’s, Macy’s, Monsanto, Mosaic, Patagonia, PepsiCo, Rio Tinto, SABMiller, Shell, Target, TDBank, Uber and Xerox.

The Environmental Defense Fund, for its part, works with AT&T, Caterpillar, DuPont,  KKR, McDonald’s, Ocean Spray, Starbucks and Walmart, among others.

I could go on but you get the point. Now contrast those lists with the challenges faced by Mindy Lubber and Ceres, as they try to line up companies to back the EPA rules. That’s why my story is about, and here is how it begins:

As the US political fight over climate change moves from Washington DC to 50 state capitals, companies that are serious about sustainability need to support theEPA’s proposed rules to curb carbon pollution from existing power plants.

So, at least, says Mindy Lubber, the president of Ceres, a nonprofit that brings together companies, investors and public-interest groups to advocate for sustainability.

“Companies have the strength and power – the footprint to make a huge difference,” Lubber told me at a lunch earlier this month. Ceres celebrates its 25th anniversary Tuesday.

It’s hard to overstate the importance of the proposed power plant rules, which are the cornerstone of President Barack Obama’s climate agenda. Power plants account for nearly 40% of all US greenhouse gas emissions.

What Ceres has found, Mindy told me, is that it’s hard to get big companies to support  the EPA and the president, and overcome their habitual, instinctive resistance to government regulation.

Last month, as I wrote in the Guardian, Ceres released a statement supporting the rules that was signed by more than 200 companies but most were small or midsized. Big firms to sign on included Ikea, Kellogg, Levi Strauss, Mars, Nestle, Nike, Novelis, VF and Unilever. They are to be commended.

Ceres’s list would carry a lot more weight if other NGOS like WWF, The Nature Conservancy and Environmental Defense persuaded  most or all their corporate partners to sign on.

Until they do, conservative trade associations like the US Chamber, NAM, the National Mining Association and the American Farm Bureau Federation, which have joined together to oppose the EPA rules, will speak for business in Washington. I’ve never understood why so many companies that profess to care about the environment — and, in my view, actually do care about the environment — have allowed that to happen.

You can read the rest of my story here.

General Motors, Coca-Cola, NRG Energy: Sustainability leaders at Brainstorm Green

General Motors' Dan Akerson at Brainstorm Green

General Motors’ Dan Akerson at Brainstorm Green

Dan Akerson, the chief of executive of General Motors, loves the Chevy Volt. Bea Perez of Coca-Cola is backing inventor Dean Kamen, who wants to take a water-purification machine to the global south. David Crane, the chief executive of NRG Energy, would like to see solar panels on half the rooftops in America.

They all spoke at Fortune Brainstorm Green, the magazine’s conference about business and the environment conference, last week in Laguna Niguel, CA. I’ve been co-chair of Brainstorm Green since its launch in 2008, and, as I wrote the other day, I’ve felt uncomfortable at times when the tone of the event becomes too celebratory, given the scale of the environmental problems we face. Having said that, today I want to showcase a few business executives who are emerging as sustainability leaders.

One is Dan Akerson of GM, the stodgiest and most bureaucratic of the US automakers. A newcomer to Detroit–he is a Naval Academy graduate who made a fortune in private equity at Carlyle, before taking over at GM in 2010–Akerson that his predecessors had been “part of the problem, rather than the solution” when they stood in the way of  regulators who wanted to raise fuel-efficiency standards for cars, and he said the auto industry had been slow to recognize the threat of climate change. Hours after he spoke at Brainstorm Green, GM became the biggest company and the first automaker to endorse the climate declaration from CERES and its BICEP (Business for Innovative Climate & Energy Policy) coalition. [click to continue…]

The eerie quiet of the insurance industry

If there’s one industry that ought to be concerned about the threat of global warming, it’s the insurance industry. OK, the ski industry, too, but I digress.

Dave Jones, California’s insurance commissioner, recently put it this way: “Climate change is an obvious physical threat to us all, but increasingly it also poses a serious financial threat to the insurance industry…” When extreme weather causes damage, insurers pay.

So you’d expect insurance companies to be among the most forceful voices in corporate America calling for the regulation greenhouse gas emissions.

Uh, no. They’ve been eerily quiet.

And, at the least, you’d expect them to be proudly steering some of their massive investments to clean energy or energy efficiency projects aimed at reducing emissions of greenhouse gases.

Wrong again.

“It’s surprising, in a sense, because they have so much to lose from climate change,” says Sharlene Leurig, senior manager of the insurance program at Ceres, a nonprofit coalition of investor and environmental groups. But, she notes, insurance is a conservative business. The industry is all about risk, but it doesn’t want to take the risk of speaking out on climate change. [click to continue…]

Climate, insurance and the next financial meltdown

Miami Beach oceanfront properties

Well-to-do Brazilians are buying up luxury condos on the beach in Miami, The Times reported last week. “They are taking Miami by storm,” one real estate executive declared.

It’s an unfortunate metaphor.

That’s because, sooner or later, storms will likely damage or destroy much of the property on the Florida shoreline. And, while a beachfront real estate revival may be welcomed by developers who, according to the Times, are “starting or restarting ambitious condo projects,” the risks are being borne not by the developers or by the condo buyers or even by private insurance companies but, for the most part, by a state-run, not-for-profit, tax-exempt corporation called the Citizens Property Insurance Company. Citizens has become the biggest insurance company in Florida since it was created in 2002, and many of its policies ($232 billion worth, according to a 2009 story in the Miami Herald, referenced here) are written on riskier, coastal properties. As a government-sponsored entity, Citizens has the implicit backing of Florida taxpayers who, you can be sure, will turn to the rest of us for help if the big one hits.

“Who’s on the hook when a wall of water hits the coast of south Florida? You and me,” says Sharlene Leurig, senior manager of the insurance program at Ceres, a nonprofit alliance of investors and environmental groups. Her  job is to raise awareness of climate risk within the insurance industry, and to prod the industry to respond.

It’s not just a problem in Florida–many states are assuming the risk of natural disasters, despite the rising costs of extreme weather events, which are more frequent and more severe because of climate change, scientists say. So is the federal government: The National Flood Insurance Program (NFIP) has $1 trillion in exposure, according to Ceres, and it’s $20 billion in debt. Although no individual storm can be attributed to climate change, the rising prevalence and intensity of storms, floods, droughts and wildfires are consistent with what scientists say can be expected as global temperatures rise.

Sharlene Leurig

Today, I’m devoting the first of two blogposts to the insurance business and climate change. Have another cup of coffee if you must, but this is important. According to Leurig and a September 2011 report from Ceres, the insurance industry has yet to fully recognize the risks posed by climate change. This isn’t just their problem. It’s ours because what Ceres describes as he industry’s “sluggish and uneven response to the ever-increasing ripples from global climate change” threatens not just the insurance business but the stability of the global economy.

[click to continue…]

A historic win for green investors

ceres_logoSometimes, history is made quietly.

For decades, shareholder activists have filed dozens, if not hundreds, of resolutions with public companies asking them to improve their environmental policies and practices. Not one passed—until this year.

The breakthrough vote came in May at IdaCorp.,  a $988-million a year utility company and independent power producer based in Boise, Idaho. Despite the usual opposition from management, the owners of 51.2 percent of IdaCorp.’s shares voted to ask the company to adopt greenhouse gas reduction goals.

Hardly anyone noticed at the time because, well, it was Idaho and not even the shareholder activists expected a victory. “I expected a vote of about 25%,” said Michael Passoff of As You Sow, a nonprofit group that organized the investor vote.

Since then, the company responded. Legally, it didn’t have to act because, as you may know, most shareholder votes are “precatory,” a fancy legal term meaning that management can ignore even a majority of the company’s owners. In any event, IdaCorp. agreed to adopt goals for curbing the heat-trapping gases that cause global warming, issued its first request for a proposal for a wind farm and submitted a “smart grid” proposal, hoping to tap into the federal government’s stimulus money to upgrade the grid. [click to continue…]

The World Bank’s coal problem

So much is going on in the world of business and sustainability that no one can keep up with it all. I’ve decided, as a result, to occasionally feature guest posts  from smart people who follow topics I don’t. Today’s post comes from Mindy Lubber of Ceres, a coalition of institutional investors and environmental groups that works to integrate sustainability into capital markets. Mindy has spoken at FORTUNE’s Brainstorm Green conference, and she’s one of those people who moves easily between the world of advocacy and the realities of corporate America. Her topic today is the folly of financing new coal plants in the developing world.

ceres_logo_color_bigIn Washington, it’s a popular climate conundrum everyone talks about: Even if the U.S. lowers its greenhouse gas emissions, China and India are on track to dwarf the entire Western World’s as they build enormous coal-fired power plants. Politicians regularly say we must get China and India to use less coal, the dirtiest of fossil fuels, to power their emerging economies.

But who do you think is financing all these new coal plants in the developing world?

Try the World Bank, the Asian Development Bank and other international public financial institutions supported by the world’s wealthiest nations.
[click to continue…]

Brainstorm Green 2009

Not long ago, Big Business and environmental activists were sworn enemies. No more. Today, companies and NGOs come together to work creatively around a variety of issues—from climate change to recycling to protecting the Amazon, from cleaning up dirty businesses like gold mining and to “greening” professional sports. One place they literally come together is at Brainstorm Green, FORTUNE’s conference about business and the environment, which will be back on Earth Day, 2009.

Helping to create Brainstorm Green was a highlight of my 12 years at FORTUNE, and I’m pleased that I’ll be back this year, co-chairing the event with my colleague Brian Dumaine, FORTUNE’s global editor. The program for this year’s Brainstorm Green is still a work in progress, but a group of us got a draft agenda down on paper last week and I’m confident that it will again be a lively, exciting, information-packed event. The theme, once again, will be: How can business help solve the world’s biggest environmental problems?

We’ll discuss and debate climate change regulation, “clean coal,” nuclear power, electric cars, the smart grid, investing in green, renewable energy, sustainable consumption (if there is such a thing), carbon finance and too many other topics to list here.

What makes Brainstorm Green special is the diversity of the crowd. This year, we’ll again hear from many of America’s most important environmental leaders, including Fred Krupp of Environmental Defense, Glenn Prickett of Conservation International, Mark Tercek of The Nature Conservancy (who was there last year on behalf of Goldman Sachs), David Hawkins of the Natural Resources Defense Council, Mindy Lubber of Ceres and Mike Brune of Rainforest Action Network. At least two dozen CEOs of big and medium-sized companies have agreed to speak, including Shai Agassi of Better Place (the electric car company), Ray Anderson of Interface, Carl Bass of Autodesk, David Crane of NRG Energy, Jeff Hollender of Seventh Generation, Fisk Johnson of S.C. Johnson, Donald Knauss of Clorox, Mike Morris of American Electric Power, Ralph Peterson of CH2M Hill, Jim Rogers of Duke Energy and Tom Werner of SunPower.

Other companies sending speakers include Wal-Mart, McDonald’s, Coca-Cola, Goldman Sachs, Mars, Intel, Boeing, McKinsey, the private-equity firm KKR and architectural firm HOK. That list is sure to grow.

We’ll also be joined by speakers whose ideas are shaping the sustainability debate. I’m looking forward to spending time with Paul Hawken, whose books have shaped much of my own thinking about business and the environment. The dynamic Van Jones, who is profiled in the current issue of The New York by Betsy Kolbert,  will talk about green jobs. The always-inspiring Janine Benyus, who spoke last year, will be back to show us how biomimicry works in practice. My friend Joel Makower, the guru of green business and author of Strategies for the Green Economy, will return as well.

Venture capitalists from some of America’s top firms and entrepreneurs touting exciting startups will round out the group. We’re hoping to attract senior officials from the new Obama administration as well.

You can find a full list of speakers on the Brainstorm Green website. That’s also the best place to propose new speakers or to sign up for the event. (FORTUNE screens all participants.) We’ll meet in a beautiful setting—the Ritz Carlton Hotel in Laguna Niguel, CA, and I’m looking forward to seeing many of you blogreaders there.