Conscious Capitalism

We started this blog back in 2008 but okay, here we go:

DAVOS — The powerful momentum of the global sustainability movement, driven by a younger generation, can carry a new era of stakeholder-focused capitalism forward, according to business and financial leaders speaking at the World Economic Forum this week.

At a CNBC panel on “Conscious Capitalism,” anchor Karen Tso talked to two members of the Business Roundtable, Nasdaq CEO Adena Friedman and EY chief executive Carmine Di Sibio, who were among the 181 signatories to the organisation’s statement in August, committing to the purpose of a corporation being to serve all stakeholders: customers, employees, communities and suppliers, as well as shareholders.

Di Sibio said the younger generation of employees (and customers) was a huge driver of this shift in emphasis for businesses. He said: “This is about talent, and it’s coming from the bottom up. People want to know you have a plan around sustainability when they join your company. We hire from college campuses all over the world and it’s the number one thing they want to talk about, and they are going to create more and more pressure.”

Friedman agreed: “The young generation who were at school ten years ago at the time of the crash are now moving up through organisations and expecting more of their companies. Regardless of the economic backdrop, the next generation of workers will demand more of their companies. Investment in climate change and social good is not just a bull market phenomenon.

And just when you thought it was safe to go skiing in the Alps with your favorite, enlightened global tech elites, don’t forget to cross check The Evil List.

Killing ‘carbon-capture’ Softly

You often hear – and I often write – about the unfashionable ‘need for more government regulation.’ Whether it is exotic financial instruments or greenhouse gas emissions, there is really no other entity who can handle reigning in our excesses at the scale of their own destructive impacts. The discussion is often set up as a public vs. big business, easy-to-understand (if not swallow) debate. But what gets less attention is how much big business needs sustained government policies, too.

American Electric Power, a huge utility company providing electricity mainly in the Midwest, is postponing or killing plans to build a full-scale “carbon capture” facility at its Mountaineer plant, in West Virginia.

Then Fallows hits on the implications:

Companies can’t do this without a sustained government policy. AEP, which is by no means a pinko organization — it is running acampaign now of complaint about burdensome EPA regulations — said the reason it was calling off the plans was governmental failure to set a clean energy/climate policy. By definition, any “cleaner” form of using coal will be more expensive than the current dirty approach, at least in the short run. This is true “by definition” because if the cleaner approaches were cheaper, the utilities would already have switched to them; because the cleanup technology is still in its developmental phase; and because in many places cleaner systems mean new capital investment.

You should also read his cover story on our future with coal, but this is an important addendum to it. It’s the other side of the story of companies needing to know what the regulations will be in order to plan. And whatever they are, companies will adapt. That means even if they hate it, which they will, they will still find a way to profit. Hint to EPA, Congress and the WH: go ahead and do something.

100 Years

So… the Earth is headed for 6C of warming.

Emissions rose by 29% between 2000 and 2008, says the Global Carbon Project.

All of that growth came in developing countries, but a quarter of it came through production of goods for consumption in industrialised nations.

The study comes against a backdrop of mixed messages on the chances of a new deal at next month’s UN climate summit.

According to lead scientist Corinne Le Quere, the new findings should add urgency to the political discussions.

“Based on our knowledge of recent trends and the time it takes to change energy infrastructure, I think that the Copenhagen conference next month is our last chance to stabilise at 2C in a smooth and organised way,” she told BBC News.

But don’t worry about all those nasty emissions that will have led to the increase, or the fact that they are from carbon-based fuels sources,which are finite, because we’ve got a 100-year supply of natural gas to rely on!

I saw the ad last night, and it’s pure amazing with an extra dose of stupid. There’s got to be a link somewhere. But just watch football on Thursday – you’ll see it. The Natural Gas coalition or whatever is really proud of themselves. We’re saved! The mother is telling her baby daughter not to worry, because we’ve got 100 years’ worth of natural gas to burn! The amazing unasked question, about her baby’s children and their children… oh yeah: screw them.

Paving Our Fate

Or cementing, if you like. An American Business Community that was way late on the short-sighted-ness of sprawl, commercial real estate and exotic financial instruments (but big on INNOVATION!) is now working to defeat healthcare reform legislation because it will… slow down the climate change legislation juggernaut. Synergy!

Corporate front groups and large business trade associations are funneling their resources into defeating health reform. Even though health reform will lower costs for small businesses and boost worker productivity economy-wide, it appears that corporate entities influenced by major polluters are hoping that the defeat of health care legislation will slow President Obama’s agenda and derail their true enemy: clean energy reform.

The West Virginia Chamber of Commerce, which is largely backed by the coal industry, candidly revealed this strategy in a letter released today to Sens. Jay Rockefeller (D-WV) and Robert Byrd (D-WV). The Chamber of Commerce demanded that the senators use “their clout and seniority” to obstruct the health reform debate until cap and trade legislation is taken off the table and the EPA is barred from regulating carbon dioxide as a pollutant. As Ken Ward of the Charleston Gazette noted, Rockefeller has already rejected a similar proposal of blocking health reform unless the EPA stops reviewing mountaintop removal permits. The coal lobby has also pressured West Virginia state legislators to pass resolutions opposing clean energy reform.

I’m kind of even bored with my own impulses toward snark on this, and maybe that’s a good sign. It’s simply not amusing, the way in which major financial interests in this country align their loyalties with short term infringements on their power instead of taking a longer view toward sustainable, if lower, profitability. That is the trade-off they choose to see. But it’s not a trade. It’s a fail. They appear wiling to sacrifice both for neither, as though activating some kind of compass in their Solomonic wisdom survival pack. But you have to wonder, the survival of exactly what?

Plus, in what kind of country is the true enemy clean energy reform? Explain your answer.

Living in the City

Ah… the immortal words of Lee Ving, via a lot of good research presented in this article by Ed Glaeser.

The five metropolitan areas with the lowest levels of carbon emissions are all in California: San Francisco, San Jose, San Diego, Los Angeles, and Sacramento. These areas have remarkably low levels of both home heating and electricity use. There are cold places, like Rochester, that don’t air-condition much and thus use comparably little electricity. There are warm places, like Houston, that don’t heat much and thus have comparably low heating emissions. But coastal California has little of both sorts of emissions, because of its extremely temperate climate and because California’s environmentalists have battled for rules that require energy-efficient appliances, like air conditioners and water heaters, and for green sources of electricity, such as natural gas and hydropower. (Some analysts argue that this greenness is partly illusory—see “California’s Potemkin Environmentalism,” Spring 2008—but certainly, by our measures, California homes use less energy.) Also, despite the stereotypes about California highways and urban sprawl, some of these five cities, like San Francisco, have only moderate levels of transportation emissions, since their residents actually live at relatively high densities, which cuts down on driving.

In one of the charts, they measured overall carbon emissions for cities, then differentiated emissions of central city residences from the suburbs. Surprises abound.

Boston and Philadelphia are the third and fifth cities on the list. Though hotter summers and more coal make Philadelphia browner than Boston, the city-suburb differences in both areas reflect the high density and abundant public transportation in their central cities. Nashville and Atlanta, on the other hand, rank second and fourth not because their central cities are particularly green but because extensive driving makes their far-flung suburbs particularly brown.

However, even these are not without their caveats, exceptions and reasons why. So you should read the whole thing. Land use patterns and incentives that shift us toward high energy-use locales instead of green ones – those are the issues.

Plus, it beats getting fat and dying your hair.

Shovel-ready

NYT reports that Obama is paving the way for a major change for vehicle emissions.

President Obama will direct federal regulators on Monday to move swiftly on an application by California and 13 other states to set strict automobile emission and fuel efficiency standards, two administration officials said Sunday.

Mr. Obama’s presidential memorandum will order the Environmental Protection Agency to reconsider the Bush administration’s past rejection of the California application. While it stops short of flatly ordering the Bush decision reversed, the agency’s regulators are now widely expected to do so after completing a formal review process.

Once they act, automobile manufacturers will quickly have to retool to begin producing and selling cars and trucks that get higher mileage than the national standard, and on a faster phase-in schedule. The auto companies have lobbied hard against the regulations and challenged them in court.

Anyone can correct me on this but, I’ve been in the market for a new car, trying to make the right decision based on a few variables discussed here at length. The trail is leading us to a very short list of extremely expensive vehicles, especially as I’m trying to buy a diesel for a family of four + dog. My understanding of the paucity of available models is that these particular kinds of cars must be 50-state compliant in a couple of environmental categories, to which most car makers simply say, “no thanks.”

This sort of opt-out posture had the effect of making California standards the de facto standards anyway, though it allowed car makers not to bother with any adjustment to their SOP. Again, the article

But the centerpiece of Monday’s anticipated announcement is Mr. Obama’s directive to the Environmental Protection Agency to begin work immediately on granting California a waiver, under the Clean Air Act, which allows the state, a longtime leader in air quality matters, to set standards for automobile emissions stricter than the national rules.

The Bush administration denied the waiver in late 2007, saying that recently enacted federal mileage rules made the action unnecessary and that allowing California and the 13 other states the right to set their own pollution rules would result in an unenforceable patchwork of environmental law.

The auto companies had advocated a denial, saying a waiver would require them to produce two sets of vehicles, one to meet the strict California standard and another that could be sold in the remaining states.

Those last eight words are/were what the car makers (such as they still exist) were aiming for; producing that other set of cars is their last ditch effort to play hard ball with the environment (!), I’m sure. The tactic, as in trying to isolate California and its inordinately stringent regulations, is typical yet nonsensical when you think about anything being at stake other than profits and business-as-usual, though one would think that what this strategy has done to both would cause the car makers (such as they still exist) to reconsider their position.

Anyway, serious news that the new administration should and will trumpet.

mg of CO2 per km

In a much simpler context, whenever consumerism is able to actively embrace and integrate its most earnest desires within the ‘go green’ phenomena, profound results will follow. Two examples:

Last year about this time, a very good friend in France hit a big birthday and I went over for a week to drink great champagne and deliver a present. This was an incredible hassle, as the present was a painting his wife bought from another friend over here; I built a plywood box around it, tacked on a handle and checked it at the airport. When I spotted it safe and sound at the luggage carousel at de Gaulle the next morning, my odyssey with this box had only begun. Customs officials, the Paris Metro, all sorts of stairs, taxis, a friend’s place, hotels… but there were all kinds of wonderful elements to a few days in the city, including my discovery of an arrondissement I’d never visited ( the XIXeme), this crazy David Lynch art show at the fondation Cartier, plus a stroll out to La Defense one evening – one evening when there happened to be small riot between some kids and the police at the Gare du Nord (this was about two weeks before Sarkozy’s election. If you want to see the underside of any country, visit it right before a national election.)

So, by mid-week I had dragged the box halfway around the city, all the way to the Gare du Lyon, where I waited with it for the TGV to take us both down to Valence. The recorded SNCF lady’s voice, reminding passengers of track changes and other crucial information, was so pleasant reverberating in that old station. It makes you look up at the somewhat ornate ceiling and forget for a minute about the non-existent place you might be able to stow an oddly shaped box somewhere in the second class compartment. There was a billboard that caught my eye, high above the din of arrivals and departures. Nothing high tech, just a static, color sign, an advertisement for some new Peugeot or something. As the SNCF lady was speaking, I noticed the copy on the billboard. They weren’t advertising its engine size, or on-board nav system, or even the fuel efficiency. The ad copy, streaming outside a glamorous profile shot of the sedan gliding across a wide landscape, merely and with a sort of halting understatement noted the vehicle’s amount of carbon emissions per kilometer. BAM. I was right back in the future.

There was a lot politics in discussions with my friend, his wife and their friends during the rest of my stay, most of it very depressing to me as an avowed admirer of most choses francaises. Their cynicism was very well-informed and convincing, and I could but go along and commiserate on most issues. But I kept holding onto that sign in the Gare du Lyon. Like most symbols, it stood for more than itself, particularly in a milieu that seemed like it was sliding back toward its own worst impulses. It was a small reminder that all was not lost; that company’s ad people had some pretty amazing confidence in the car buying public, and if they had it, then…

The other example, from the same trip. Near the end of the week, my friend and I went to grocery store so I could buy some of my wife’s favorite items to smuggle back: some wine, chocolate, jars of mustard, a little foie gras and tin of this delicious peasant food that we love. Anyway, we got all that plus a few more things and headed for the checkout. I paid with my debit card and went around to the end of the checkout counter to bag my buys. Now this was a huge grocery chain, like Le Clerc or Intermarche or something. But when I went around to the end of the counter and reached for some bags, a funny thing happened: there weren’t any.

I was honestly shocked. They were no longer providing free plastic shopping bags for customers, for every reason everyone already knows. But someone had made the decision, and some company had made it policy. No more, sorry. Perhaps it had been mandated by the government or they had started charging people some inordinate amount to use, make or dispose of them. Whatever it was, it worked. They were gone. My friend looked at me and apologized with sudden alarm that he had left his bags in the car, where they always now were. This little array of habits was splayed out embarrassingly for me, a sort of gratuitous display of acting sensibly that put most other actions in a very poor light. It made me wonder as we grabbed our stuff in our arms and darted out into the waiting drizzle, why do we still live this way, hemmed in so many sides by the little conveniences we demand?

It’s just a little thing, bringing bags to the grocery store or buying a car for its low emissions. But they are both on their way. You don’t have to feel especially empowered – or as though your liberty has been infringed upon – by doing the right thing, but you can.

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