Does Climate Change Have Time for Transition Plans?

By Carol Pierson Holding

 

The USDA Forest Service is pushing through the sale of nearly 6,200 acres of Tongassrainforest rainforest’s old growth timber for 10-15 years of logging, claiming that’s what the timber industry needs to “transition” to second-growth timber management. Only the U.S. Fish and Wildlife Department’s investigation of possible violation of the endangered species act is forestalling the tragic event.

 

Forgive me if I’m cynical about transition plans, particularly in this irreplaceable natural treasure, where ancient giant trees greater than 10 feet in diameter can grow for many centuries, and support the habitat for five species of Pacific salmon, Steelhead, brown bear, black bear, wolves, Sitka blacktailed deer, river otter and marten.

 

The USDA’s 2013 Tongass sale was announced in a press release as “the logical transition to young growth timber harvests.” But back in 2010, the same U.S.D.A.Secretary Tom Vilsack pledged over three years to “end large-scale, old-growth timber harvest while…supporting bright spots in the regional economy such as fishing, tourism, visitor services, mariculture and alternative energy.”

 

In fact, old-growth logging is less than 1% of Southeast Alaska’s economy. Fishing brings in $6.4 billion, employs 94,000 people. Tourism accounts for another $2.42 billion and accounts for one in eight Alaskan jobs. Both industries are vulnerable to the proposed habitat destruction of logging.

 

Yet here we are. Again.

 

The struggle between the Tongass temperate rainforest and timber interests has been ongoing for 25 years. Didn’t The Tongass Timber Reform Act put in place in 1990 for practical purposes end logging in Tongass and force the two pulp mills there to shut down? Didn’t President Clinton, in 2001, pass protections for roadless areas?  And didn’t the house add an amendment to the Act in 2007 to specifically ban road construction in the Tongass forest?

 

So why now?

 

The New York Times reported that the Forest Service needs to raise money because it overspent fighting wildfires at the 2013 season peak and diverted $600 million from timber, recreation and other areas.

 

The drought was caused by climate change, which rainforests are uniquely designed to counter.

 

The irony is overwhelming.

 

To add a truly Kafkaesque twist: the Forest Service does not make a profit overall on Tongass timber, and by one analysis, has lost $1 billion since 1990.

 

Tongass timber companies have had since 1990 to “transition” out of old growth. Now they’re getting another 10-15 years. This in a country whose democratic capitalism demands constant reinvention. So when I hear that word “transition” applied to other climate change legislation, it sounds alarms.

 

Those alarms were clanging loudly when EPA Administrator Gina McCarthy touted the new power plant regulations plan for an “orderly transition” from coal.

 

Writing in this week’s Time Magazine, Michael Grunwald examines the plan’s 2030 goal: to reduce emissions from power plants by 30% from 2005 levels and coal generated electricity by 30% as well. But electricity from coal is already down 20% and another 10% of coal plants are scheduled for retirement. Its projections for renewable development are absurdly low.

 

In Grunwald’s words, the plan “undershoots the current pace of decarbonization in electricity.”

 

The EPA justifies its less than ambitious plan by asserting that its “transition” plan will forestall objections and lawsuits, especially from the big coal states. And objections have been muted so far. The American Coalition for Clean Coal Electricity contends the rules will stress state-based power grids, increase electric bills and increase the risk of rolling blackouts, but so far, it’s just a PR gambit.

 

Lawmakers in fossil-fuel rich Louisiana are also condemning the plan, with Bill Cassidy, who is currently running for the Senate on an anti-Obama platform, summing up objections: “President Obama is proposing regulations that hamstring the economy, raising utility costs for families and destroying tens of thousands of jobs.”

 

As for potential lawsuits, that door was effectively closed Monday when the Supreme Court sustained EPA regulation of power plants by a vote of 7 to 2.

 

Maybe I’m wrong to be suspicious of “transition” plans that pull us back from where we were already headed. Certainly the Tongass old-growth sale, if it goes through, reverses course. Then again, sometimes, if you just stall, people sort things out for themselves. Obama stalled for 6 years on climate action against power plants, and even so, we’re already half-way to a 30% reduction in emissions by 2030. Now, there is an appetite for serious reduction in coal.

 

And Tongass? On June 10, with the summer timber harvest season about to start , a group of environmental NGOs brought suit against the U.S. Fish and Wildlife Service for delaying Endangered Species Act protection for the Alexander Archipelago wolf, a rare and visually stunning creature found only in the old-growth forests of southeast Alaska.

 

What does that mean for transition plans? Maybe they’re just another part of climate change itself — unpredictable, sometimes Kafkaesque, often devastating and in the end, inevitable. Hopefully, the inevitability of both climate change and their politics will converge in time to save the planet.

 

 


 

Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 8,900+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900+ companies from 135 industries in 102 countries. By aggregating and normalizing the information from 325+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 


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Sustainability Performance Benchmark for Costco Wholesale Corporation

CSRHub

 

 

Corporate Social Responsibility (CSR) and Sustainability metrics site CSRHub recently updated its ratings on Costco Wholesale Corporation and the 30 companies in the Grocery and Related Product Wholesalers industry.  Costco’s overall rating currently is 53 after the most recent updates to their CSRHub page.
 

Please note the Sustainability Ratings Widget will continually update and show the latest ratings on CSRHub.

 

The average rating for the other companies in the Grocery and Related Product Wholesalers industry is 56. Costco moved up and is currently in 10th place on the list, using the CSRHub average user profile. You can see more information about Costco Wholesale Corporation at their CSRHub page here.

 

Costco has a score of 56 in the Environment area.  This is due to a score in the Energy and Climate Change category of 58—above the average for this industry of 54.  The area with the greatest opportunity for improvement for Costco is the Community Dev and Philanthropy category.  Here, Costco gets a 33—well below the industry average which is 52.

 

See Costco Wholesale Corporation’s Social Responsibility website here.

 

CSRHub ratings are on a scale of 0 to 100, with 100 being the highest. To see more on how CSRHub creates a score and the CSRHub rating rules, visit here.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900 companies from 135 industries in 102 countries. By aggregating and normalizing the information from 325+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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Reason for Hope

By Bahar Gidwani

 

For some reason, I encountered more skeptics than usual last week.  Two people told meheavy traffic that we will never see a shift in consumer behavior towards sustainable purchasing.  Two others said that corporations only care about money and view sustainability only as a kind of social window dressing.  Add in the normal flow of data on how bad things are (and how bad they are going to be if we don’t do something soon!), and I should have been pretty depressed.

 

Instead, the last few weeks have contained many reasons to hope, for the future.  For instance, we had the announcement that the EU would require companies with more than 500 people to report material sustainability issues; former New York Mayor Bloomberg’s and former SEC Chair Mary Schapiro’s decisions to lead the board of SASB; and the announcement that the US Environmental Protection Agency would (finally) start to regulate power plant carbon emissions.  There were also positive CSRHub news items—including a partnership with the CCEG and the release of five more million pieces of CSR data.  (Our site now contains 52 million pieces of data and rates almost 9,000 companies in 102 countries.)

 

However, I got an additional, more personal, reason to hope over the weekend.  I was driving home from a day on the water when my car suddenly stalled.  The battery was dead and I was stuck in the middle of heavy traffic on one of the approach ramps to the 59th Street Bridge.

 

I put up my hood and called for a tow truck.  As I finished my call, a nice-looking guy in a white shirt and black pants pulled up into the space in front of me and jumped out.  He asked, “Can I help?”  He had a battery pack in his car (jumper cables wouldn’t reach) and we tried—but no luck.  I thanked him profusely and then, he drove off…Only to be soon replaced by an older Indian man and his wife…Then, by a black man and his children…Then by a Hispanic man…  A cab driver (Sikh) and a livery driver (Hispanic) who were going the other way on the ramp each offered me gasoline (if I had run out of gas).  I got advice, sympathy, and offers for a push.  Finally, an Asian man in a large SUV had a battery pack that had enough power to get me started.  I’d been on the bridge ramp for more than an hour (the tow truck never showed up), but I was never alone and I never felt I was in danger.

 

Isn’t my experience a great reason for hope?  It is personal proof that many people want to help others—even when there is no opportunity for gain for themselves, besides the satisfaction of doing something good.  It is proof that people prepare in advance to help others—with cables, battery packs, and gas cans when they are driving and with spare food, clothes, and other emergency items when they are at home or at work.

 

This was my personal “Red Cross” moment—the time when I needed help and someone came to help me.  It renewed my faith in human kindness and reassured me that we have a broad spectrum of fellow citizens who care enough about society as a whole—and the fate of an individual stranger—to take action to improve the world.  It gave me another reason to hope, and I hope it does the same, for you.

 

Photo courtesy of Tammra McCauley via Flickr CC.

 


 

Bahar GidwaniBahar Gidwani is CEO and Co-founder of CSRHub. He has built and run large technology-based businesses for many years. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. Bahar has consulted to a number of major companies and currently serves on the board of several software and Web companies. He has an MBA from Harvard Business School and an undergraduate degree in physics and astronomy. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900+ companies from 135 industries in 102 countries. By aggregating and normalizing the information from 300+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 
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CSR Insight Media Partner Announcement: Press Release and Event Listing

CSRI

ESG ISSUES ON THE BOARD AGENDA—

Regulatory and Investor Focus on Corporate ESG:

New and Upcoming Developments; Board and C-Suite Focus.

JUNE 24, 2014, 12:00pm-1:30pm ET

 

NEW YORK, NY – Global ESG Regulatory Academy™ and CSR Insight™ LLC are hosting an online, live, 90-minute Webinar event:  ESG Issues on the Board Agenda, June 24, 2014, featuring an exciting international roster of experts.  The Program provides a comprehensive Briefing and expert Commentary on key global ESG regulatory and market developments, and ESG reporting issues and challenges, that all Board and C-Suite executives should be considering NOW to respond to new regulatory requirements, new investor expectations, and new competitive pressures.  In addition, Speakers will reveal what is on the drawing board for ESG regulation and ESG capital market investment for the remainder of 2014.  A live Q&A will provide the opportunity to ask questions directly of the Speakers.

Registration is now open.  This event has limited capacity; early registration is recommended.  US$249 for U.S. registrants; US$259 for non-U.S. registrants; group registration discounts; 10% discount for CSRHub readers (Discount Code CSRH10refid0614).  All registrants, regardless of whether you attend the live Webinar, will receive the Webinar archived recording and all Speaker slide presentation materials to review at your leisure.

 

Event Summary:  http://www.cvent.com/d/64qx7p

Event Registration:  http://www.cvent.com/d/64qx7p/4W

Mobile Event Hub:  http://www.cvent.com/d/64qx7p/5C?dvce=2

Mobile Event Registration:  http://www.cvent.com/d/64qx7p/4W?dvce=2

 

Program and Speaker Summary:

 

TOPIC 1:  Increasing ESG Regulatory and Market Focus Around the World: New Developments and Initiatives—Speakers:

 

·         Linda Lowson, Esq., CEO, Global ESG Regulatory Academy™: Legal and Regulatory Developments Overview

§  New and emerging national securities regulation

§  New and emerging stock exchange listing requirements

§  Recent SEC developments

 

·         Alison Dempsey, Esq., Director of Research, Global ESG Regulatory Academy™: Market-Based Drivers Overview

§  Investor focus: institutional and active investor scrutiny

§  Voluntary reporting as the new baseline

 

·         Evan Harvey, Managing Director, Corporate Sustainability, The NASDAQ OMX Group, Inc.

§  CERES Proposed Listing Standards

§  Sustainable Stock Exchange (SSE) Initiative Key Developments

§  World Federation of Exchanges (WFE) Sustainability Working Group Developments

 

TOPIC 2:  Increasing Investor Focus and Competitive Pressure:  Board Oversight; Shareholder Resolutions and Proxy Voting; New ESG Indices and Ratings—Speakers:

 

·         Peter DeSimone, Co-Founder, Deputy Director, Sustainable Investments Institute (Si2)

§  Board Oversight of ESG Issues:  Key Findings of April 2014 Report published by Investor Responsibility Research Center Institute (IRRCI)

§  Shareholder resolutions and Proxy Voting:  Key Trends for the 2014 Proxy Season

 

·         Julia Kochetygova, Senior Director, Product Management, S&P Dow Jones Indices

§  Overview of Role of Sustainability Indices from Investor Perspective; Historical Phases and Recent Trends.

§  What New Sustainability Indices Mean for Boards.

§  Conceptual Framework for New S&P Dow Jones ESG Tilted Indices.

 

TOPIC 3:  Increasing Risk: New Financial Reporting Challenges—Speaker:

 

·         Cecilia Thorn, Head of International Relations, Financial Reporting Council

§ 2014 EU Non-Financial Reporting Directive: Reporting Requirements and Impacts.

§  Forthcoming European Commission’s ESG/CSR Initiatives on the Drawing Board for 2014.

 

Previous Global ESG Regulatory Academy™ Webinar Series recordings are now available for a very limited time on demand at a discount, with all Speaker slide presentations.

 

·         WINTER 2014 ANNUAL WRAP-UP: ESG Regulatory and Voluntary Reporting: Most Important 2013 Developments, Radar 2014, and Key Policy Issues

·         FUTURE OF ESG REPORTING AND KEY ACTORS: What You Need to Know About ESG Regulatory and Voluntary Reporting.

·         SEC ESG COMPLIANCE—Where the Rubber Meets the Road: SEC ESG Requirements, Liabilities, and Challenges for Public Companies, Boards, Auditors, and Asset Owners and Managers.

For Registration, Speaker, and Sponsor Queries:  Contact Linda Lowson, Esq., HERE.

About the Global ESG Regulatory Academy™:

The Global ESG Regulatory Academy™ provides the first-ever independent professional education on global ESG regulation, ESG regulatory and voluntary reporting, and ESG capital market issues.  The Global ESG Regulatory Academy™ also provides customized, on-site educational seminars and workshops for companies, boards, asset owners and managers, and NGOs.  Its parent company, CSR Insight™ LLC, founded in 2007, completed a comprehensive 5-year, US$5.5 million Global ESG Regulatory and Capital Market Research Program to develop the Knowledge Base content foundation for this unique, important, and sophisticated professional education.

CSRI logo

MEDIA PARTNERS:

CSRwire, G&A, CSRHub

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Newsweek’s Green Rankings Is Back

By Bahar Gidwani

 

After an eighteen month break, Newsweek has re-launched its Green Rankings.  NewsweekOn June 5, it issued new ratings for the 809 companies that are on either the US 500 or Global 500 lists. The Green Rankings list is likely to continue to draw attention to corporate social responsibility performance and we are glad to have it back. We hope that Newsweek will continue to publish and promote work in this area.

 

Over the past few years, Newsweek’s Green Rankings had become one of the best known corporate CSR rating metrics partly because of its simplicity (everyone likes a top to bottom ranking) and because Newsweek’s large circulation put it in front of millions of ordinary consumers.

 

For several reasons we explain below, the Newsweek Rankings may not be a good benchmarking or best practices discovery tool for the sustainability professional.  In fact, as in past years, the new rankings are likely to continue to generate anxiety and confusion, as we all try to puzzle out and decode the signals they offer on how the world’s largest companies are performing. 

 

Newsweek’s methodology for calculating the ratings has changed several times.  This year’s revamp is pretty radical.  The initial data set for the 2014 list was supplied by Bloomberg and RepRisk.  Bloomberg captures a wide range of environment, social, and governance (ESG) from company financial disclosures, sustainability reports, and other public documents.  Bloomberg also ingests data from CDP—formerly the Carbon Disclosure Project—on carbon and water-related issues.  RepRisk has one of the world’s largest databases of corporate risk information.  Newsweek arranged for Corporate Knights, a well-respected Canadian research firm, to review these data sets.  It also sent a survey to 775 of the 809 companies. It is interesting that they could only find contact info for 95% of these very large companies—and that only 363 of them or 45% of the sample set responded.  Corporate Knights may also have consulted some of the other data sources it has available, such as MSCI’s Intangible Value Assessment (IVA) and Thomson Reuters Asset4 databases.

 

The 2012 Newsweek list included data from Sustainalytics—a full service ESG ratings firm—and Trucost—one of the leading suppliers of carbon, water, and other environmental information.  The 2012 list dropped an interesting and deep source of CSR data that was in the 2011 list—expert opinions on CSR performance that had been gathered by Corporate Register. The 2012 list had a strong emphasis on environmental performance, driven perhaps by a desire to make the list a “Green” ranking.  For the 2014 list, Corporate Knights decided to explicitly include corporate risk, board involvement, management compensation, and credit for outside assurance to its criteria.

We have ingested most of the sources from both years’ methodologies into our database, including RepRisk, Trucost, Asset4, CDP, and MCSI’s IVA.  As do many of the 300+ sources we studied, Corporate Knights studied the publicly-disclosed information that Bloomberg collects.  So, we would expect to see a fairly high correlation between our ratings (which measure the overall perceived sustainability performance of companies) and Newsweek’s scores.  The chart below shows that we had a 35% correlation between our scores and the Green Ranking scores, for the 2014 US data.

 

2014 Newsweek ratings correlation to CSRHub ratings

 

Interestingly, this year’s ratings for the US 500 seem somewhat less correlated with our overall ratings than they were in the past.

 

2012 Newsweek ratings

 

We believe these factors may have driven this shift:

 

    • The old index gave more weight to environmental issues than the new one does.  Environment is probably the most/best studied area within corporate social responsibility.  As a result, there is less variation among expert opinions within the environmental area than with other parts of CSR such as employee, community, or governance performance.  There was a 55% correlation between the 2012 Newsweek rating (based on an average of their four reported subcategories) and our Environment category rating (which includes climate change, transparency/reporting, and resource management issues).  There was only a 25% correlation between Newsweek’s ratings and our Environment category in 2014.
       
      Newsweek ratings correlation to CSRHub environment ratings

 

    • The new ratings methodology includes a penalty for “disclosure.” Rather than trying to fill in missing items, Corporate Knights decided in 2014 to penalize companies that fail to disclose a required item.  CSRHub has so much data that it is generally able to automatically fill data gaps. This methodological difference may have introduced a new source of variation between our ratings and reduced the correlation between them.

 

    • The CSRHub database has grown substantially since 2012.  We currently have 53 million data points and cover 9,000 companies in 102 countries.  In 2012, we had only 13 million data points and covered only 6,500 companies in 83 countries.  As we add more information to our system, it is natural that our correlation with any individual and more limited data source, will drop.

 

As with any rating system, we could find fault with some of the individual results within the Newsweek Green Rankings.  For instance, Campbell Soup has a 67 overall rating in CSRHub.  This puts it third in the list of 216 food companies that we track.  Campbell supports BCCCC, CECP, and the Sustainable Packaging Coalition.  It was on Corporate Knight’s own Global 100 list in both 2013 and 2014.  But, Campbell gets only a 39.6% score in the Green Rankings system.

 

Inconsistencies between rating systems reinforce the need for corporate sustainability managers to focus on broad measures of performance that are stable across industries, geographies and time. Again, we applaud Newsweek for raising awareness of sustainability across a wide audience. Professionals in the field should feel free to use CSRHub data dating back to 2008 to get an independent perspective on the hundreds of sustainability metrics that are produced each year.

 


 

Bahar GidwaniBahar Gidwani is CEO and Co-founder of CSRHub. He has built and run large technology-based businesses for many years. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. Bahar has consulted to a number of major companies and currently serves on the board of several software and Web companies. He has an MBA from Harvard Business School and an undergraduate degree in physics and astronomy. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900 companies from 135 industries in 102 countries. By aggregating and normalizing the information from 325+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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