All posts by Roger Straw

Editor, owner, publisher of The Benicia Independent
Carbon pricing systems, Corporate sustainability, Divestment in fossil-fuels, Socially responsible investment, Sustainability investments

Investing in socially responsible companies makes sense

Repost from the San Francisco Chronicle
[Editor:  Significant quote: “Studying the performance of over 2,000 companies in six sectors, the researchers discovered the stock price of companies that invested to improve sustainability in ways that were material to their businesses outperformed companies that did not.”  – RS]

Investing in socially responsible companies makes sense

By Tom Kiely, Lenny Mendonca and Steve Westly, September 17, 2015

What do CalPERS, and many of the world’s largest sovereign wealth funds from Scandinavia to the Mideast have in common? They’re betting big on sustainability.

In May, the California Public Employees’ Retirement System, a $307 billion retirement fund, said it will require its asset managers to factor environmental and social risks into their investment decisions. Norway’s giant national sovereign wealth fund, with $890 billion in assets built off its oil and gas reserves, is divesting from companies that mine or burn coal. A majority of the world’s largest institutional investors — pension funds, insurance companies, sovereign wealth funds — incorporate considerations about a business’s environmental and social track record into their investment decisions.

However, too many company managers are still under the spell of the myth that shareholders are the only stakeholders who count. For decades, neo-classical economists suggested — and business schools taught — that sustainability investments unnecessarily raise a firm’s costs, creating a competitive disadvantage. Invest in anything but the bottom line, and you risk your survival we’ve been told endlessly.

Shareholder idolatry holds executives back from making the investments they should to benefit the planet and their businesses in the long-term. For every corporate leader there is a regiment of laggards.

Sure, most of the Standard & Poor’s 500 companies issue sustainability or social responsibility reports each year, but try reading those reports — they are a catalog of the tepid. Few companies integrate social and environmental factors deeply into their business strategies. U.S business organizations, such as the Chamber of Commerce, have opposed government-led efforts to reduce climate risk as overly bureaucratic and costly for business, while doing little to further business-led initiatives to improve corporate sustainability.

That’s a big mistake. For instance, in one recent study, three Harvard Business School professors showed how “firms with good performance on material (our emphasis) sustainability issues significantly outperform firms with poor performance on these issues.”

When it comes to these investments, the materiality test is crucial. Companies make all kinds of investments in sustainability and in corporate social responsibility programs. But only some of these things have a material impact on performance. The researchers looked at a set of environmental, social, and governance measures that both companies and their investors deemed material and measured their impact on stock prices.

What did they find? Studying the performance of over 2,000 companies in six sectors, the researchers discovered the stock price of companies that invested to improve sustainability in ways that were material to their businesses outperformed companies that did not.

This makes sense to a growing number of investors. Smart sustainability investments allow companies to attract better employees, improve their brands to sell more or sustain a price premium.

What should be done? Companies must do a better job of compiling non-financial data on their environmental and social performance and report it to investors and other stakeholders. Fifty percent of institutional investors surveyed by PricewaterhouseCoopers in 2014 said they were dissatisfied with the environmental-social-governance information companies provided.

Business leaders need to step up and champion these efforts.

Also, executives should act like leaders in policy debates. In early June, 80 companies, including U.S.-based Coca-Cola and Mars, pressed the British government to fight for strong action against climate change in international talks, and to aggressively push for a long-term low-carbon plan for the United Kingdom.

Where are U.S. business leaders on this?

Business leaders should propose a concrete plan for pricing carbon, for instance. After all, more than 150 companies already factor a carbon price into their business planning decisions, according to a recent study by CDP, a sustainability measurement organization. Executives have the public clout to elevate the debate on carbon pricing, and the experience to propose pragmatic frameworks for getting this done.

Corporate executives need to stop thinking of sustainability as a political discussion, and see it for what it is: good business.

Tom Kiely is a member of the Standards Council of the Sustainability Accounting Standards Board. Lenny Mendonca is a consultant to leaders in the public and social sectors. Steve Westly, a former state controller, is managing director of the venture capital firm the Westly Group.
Air Quality, Bay Area Air Quality Management District (BAAQMD), Bay Area Refineries, Cap-and-trade, Carbon emissions, Emissions caps, Greenhouse gas emissions, Local Regulation, Public Health, San Francisco Bay Area

Letter to the Bay Area Air District: require strict emissions caps on refineries

Posted with permission

Benicia Resident Marilyn Bardet’s letter to the Chair of the Board, Bay Area Air Quality Management District (BAAQMD)

Direct staff to require numerical emissions caps on all refinery emissons
By Marilyn Bardet, Sept 16, 2015

Dear Chair Groom,

Marilyn Bardet
Marilyn Bardet, Benicia CA

In response to the overwhelming testimony the District has received from all corners of the Bay Area, as chair of the BAAQMD board of directors, you, with your board, have the authority to direct District staff to revise DRAFT Rules 12-15 and 12-16 as currently released, to require strict numerical emissions caps on all refinery emissions, including GHG.

By all means of public testimony over a two-year period, you have heard from concerned and affected members of the public, respected regional and national organizations (including Sierra Club, NRDC, CBE, 350 Bay Area, APEN, Sunflower Alliance) and other experts in the field who have recommended and put forward well-defined revisions that would impose strict numerical emissions caps on refinery emissions tied to current emissions baselines for TAC, VOCs, heavy metals and PM2.5, including GHG.

You know that oil companies in the region aim to acquire and process the most dangerously polluting crude in the world — tar sands. Refineries processing changed crude slates whose blends have increasing amounts of heavy crude, unconventional crudes such as Bakken oil, and/or tar sands will adversely impact regional and local air quality, especially affecting front-line communities and those “downwind communities.” Allowing emissions to “go up to” long ago established permitting levels (Valero Benicia’s permit was established in 2003) is tantamount to the District “giving in” to benefit the oil industries’ profit, not public health.

The District’s mandate is to clean up the air for the benefit of public health, and, in accordance with state mandates, to protect the climate by drastically reducing GHG. Oil refining is the biggest industrial source of GHG. Carbon trading by refineries will simply send “pollution credits” elsewhere and keep toxic emissions “at home” that kill thousands of people in the Bay Area each year. GHG emissions from fossil fuel combustion threaten to destroy our global climate and way of life.

Strong refinery rules that set numerical limits on toxic emissions tied to current baselines and limit GHGs are our best chance to protect public health and protect the climate.

We need your leadership more than ever now! I am writing to ask that you make it clear to your directors that the “highest good” must be done by BAAQMD in the name of public health and climate protection, such that, until revisions to Rules 12-15 and 12-16 are adopted that set refinery emission caps at today’s levels, including for GHG, the agency will suspend permitting for refinery projects.

This is a bold request, but these are very uncertain times that require every precaution and concerted action by leadership to create policies that protect people and the planet.

Thank you for your public service, and for you attention to my comments.

Respectfully,

Marilyn Bardet
Benicia
Air Quality, Particulate pollution, Public Health

Air pollution kills 3.3 million worldwide, may double, study says

Repost from the San Francisco Chronicle
[Editor:  Significant quote: “Air pollution kills more than HIV and malaria combined.”  Also: “The United States, with 54,905 deaths in 2010 from soot and smog….”  – RS]

Air pollution kills 3.3 million worldwide, may double, study says

Associated Press, September 16, 2015
A man covers his nose during a hazy day in Singapore. A new study notes that farming plays a large role in smog and soot deaths in industrial nations. Photo: Ng Han Guan, Associated Press
A man covers his nose during a hazy day in Singapore. A new study notes that farming plays a large role in smog and soot deaths in industrial nations. Photo: Ng Han Guan, Associated Press

WASHINGTON — Air pollution is killing 3.3 million people a year worldwide, according to a new study that includes this surprise: Farming plays a large role in smog and soot deaths in industrial nations.

Scientists in Germany, Cyprus, Saudi Arabia and Harvard University calculated the most detailed estimates yet of the toll of air pollution, looking at what caused it. The study also projects that if trends don’t change, the yearly death total will double to about 6.6 million by 2050.

The study, published Wednesday in the journal Nature, used health statistics and computer models. About three quarters of the deaths are from strokes and heart attacks, said lead author Jos Lelieveld at the Max Planck Institute for Chemistry in Germany.

The findings are similar to other less detailed pollution death estimates, outside experts said.

“About 6 percent of all global deaths each occur prematurely due to exposure to ambient air pollution. This number is higher than most experts would have expected, say, 10 years ago,” said Jason West, a University of North Carolina environmental sciences professor who wasn’t part of the study but praised it.

Air pollution kills more than HIV and malaria combined, Lelieveld said.

With nearly 1.4 million deaths a year, China has the most air pollution fatalities, followed by India with 645,000 and Pakistan with 110,000.

The United States, with 54,905 deaths in 2010 from soot and smog, ranks seventh highest for air pollution deaths. What’s unusual is that the study says that agriculture caused 16,221 of those deaths, second only to 16,929 deaths blamed on power plants.

In the U.S. Northeast, all of Europe, Russia, Japan and South Korea, agriculture is the No. 1 cause of the soot and smog deaths, according to the study. Worldwide, agriculture is the No. 2 cause with 664,100 deaths, behind the more than 1 million deaths from in-home heating and cooking done with wood and other biofuels in developing world.

The problem with farms is ammonia from fertilizer and animal waste, Lelieveld said. That ammonia then combines with sulfates from coal-fired power plants and nitrates from car exhaust to form the soot particles that are the big air pollution killers, he said. In London, for example, the pollution from traffic takes time to be converted into soot, and then it is mixed with ammonia and transported downwind to the next city, he said.

“We were very surprised, but in the end it makes sense,” Lelieveld said. He said the scientists had assumed that traffic and power plants would be the biggest cause of deadly soot and smog.

Bakken Crude, Bridge safety, Crude By Rail, Derailment, Explosion, Hazardous cargo transparency, High Hazard Flammable Trains (HHFTs), Local Regulation, Rail infrastructure, Water contamination, Water quality

Asked for info on bridge conditions, railroad carrying Bakken crude tells cities no

Repost from the Milwaukee Journal Sentinel

Asked for info on bridge conditions, railroad carrying Bakken crude tells cities no

By Lee Bergquist, Sept. 13, 2015
A flotilla of kayaks and boats and a small crowd onshore hold banners and beat drums Sunday to raise concerns about the transport by rail of oil through Milwaukee and across an aging railroad bridge at the confluence of the Menomonee and Milwaukee rivers near S. 1st Place.
A flotilla of kayaks and boats and a small crowd onshore hold banners and beat drums Sunday to raise concerns about the transport by rail of oil through Milwaukee and across an aging railroad bridge at the confluence of the Menomonee and Milwaukee rivers near S. 1st Place. | Michael Sears

Despite urging from a federal agency that railroads hand over more information on safety conditions of bridges, a carrier moving Bakken crude oil through Milwaukee says it doesn’t plan to provide such details.

Trains carrying Bakken crude go through downtown Milwaukee, leaving some residents afraid of what will happen if there is a spill. This train passes by the apartment of Brian Chiu on W. Oregon St. | Brian Chiu

Sen. Tammy Baldwin (D-Wis.) distributed a letter from Sarah Feinberg, acting administrator of the Federal Railroad Administration, in which the regulator urged railroad carriers to provide more information to municipalities on the safety status of bridges. Milwaukee officials have complained about the lack of information on the structural integrity of railroad bridges used by Canadian Pacific in the city.

“When a local leader or elected official asks a railroad about the safety status of a railroad bridge, they deserve a timely and transparent response,” Feinberg wrote.

“I urge you to engage more directly with local leaders and provide more timely information to assure the community that the bridges in their communities are safe and structurally sound.”

“CP’s position has not changed,” said Andy Cummings, a manager of media relations for the company.

“It is our policy to work directly with the Federal Railroad Administration, which is our regulator, on any concerns they have with our infrastructure.”

The exchange comes in the wake of growing concerns from communities along rail corridors used by railroads shipping a growing tide of oil from the Bakken region of North Dakota.

Those worries have been exacerbated by tanker accidents. The most notable is the July 2013 derailment of tankers that killed 47 people in Lac-Megantic, Quebec. The tankers had been routed through Milwaukee before the accident.

There have been no accidents involving crude in Wisconsin, but on March 5 a BNSF Railway train derailed and caught fire near Galena, Ill., after leaving Wisconsin. Twenty-one tankers derailed. Galena is about 10 miles south of the border.

In Milwaukee, one bridge in question is a 300-foot-long structure, known as a steel stringer bridge, at W. Oregon St. and S. 1st St. The bridge was constructed in 1919, according to Bridgehunter.com, which keeps a database of historic bridges.

Canadian Pacific said on Sept. 1 that it would encase 13 of the bridge’s steel columns with concrete to prevent further corrosion and to extend the life of the columns. The carrier said last week that a protective layer of concrete will be applied late this month.

Since last spring, neighbors have expressed worries about the integrity of the bridge, and since July city officials have sought details on the condition of the bridge.

In addition to the threat to human safety, environmental groups such as Milwaukee Riverkeeper say about three dozen bridges cross rivers and streams in the Milwaukee River basin.

On Sunday, a flotilla of kayaks and canoes paddled at the confluence of the Milwaukee and Menomonee rivers to underscore the connection between trains and the city’s waterways.

Bridges must be inspected annually by railroads. But railroads are not required to submit the information to the federal agency. Railroads also are not required to make the information available to the public.

Cummings said the bridge on S. 1st St. has been inspected by a railroad bridge inspector. “We are confident in its ability to safely handle freight and passenger train traffic,” Cummings said.

In her letter, Feinberg said the agency is “re-evaluating” its programs to determine whether it needs to take additional steps.

Common Council President Michael Murphy said he isn’t satisfied by Feinberg’s comments.

“I would liked to have seen a little more teeth in it,” he said.

Murphy said Canadian Pacific should be more transparent, adding that he expects the company to brief the council’s public safety panel soon on the bridge’s condition.

Baldwin and Minnesota Sen. Al Franken, also a Democrat, said in an editorial in the La Crosse Tribune last week that oil trains have put “hundreds of communities in Minnesota and Wisconsin at risk for the explosive crashes that come when an oil train derails.”

Nationally, trains carrying crude oil in the United States have jumped from 10,840 carloads in 2009 to 233,698 in 2012 to 493,127 in 2014, according to the Association of American Railroads.

Canadian Pacific is shipping seven to 11 Bakken crude trains a week through Wisconsin, including Milwaukee, according to the latest data sent to the Wisconsin Division of Emergency Management. BNSF is shipping 20 to 30 trainloads along the Mississippi River.

In a federal transportation bill that has passed the Senate but not yet the House, Baldwin and Franken said they added language that would make oil train information available for first responders. It would also give state and local officials access to inspection records of bridges.

Sunday’s paddle protest in Milwaukee was meant to highlight concerns by Milwaukee Riverkeeper and Citizens Acting for Rail Safety that the area’s aging bridges were not built to accommodate so much oil.

Cheryl Nenn of Riverkeeper said a rail accident that spilled crude could have long-lasting effects on the Milwaukee, Menomonee and Kinnickinnic rivers, and Lake Michigan, the city’s source of drinking water.

Complicating a potential oil spill in downtown Milwaukee is wave action from Lake Michigan, known as a seiche effect, where surging water from the lake can push water upstream, she said.

“The Milwaukee River is cleaner today than it has been in decades, and now we face a threat from crude oil,” Nenn said.