Tag: climate change

Digital Supply Chain, Climate 21, and Climate Change – a chat with Toby Croucher

It is April 2020 and we are currently in the middle of the Covid-19 Coronavirus pandemic, however we will develop a vaccine  for this virus, and so this crisis will finally pass. Unfortunately there is no similar “easy cure” for climate change.

With that in mind, a huge amount of an organisation’s carbon footprint comes from its supply chain, so when I heard about SAP’s new Climate 21 initiative, I was keen to get one of the core team, Toby Croucher to come on the podcast to talk about it.

Toby agreed and we had a great chat talking about how the Climate 21 initiative will help companies calculate, manage, and reduce the carbon footprint of their supply chain. Enjoy.

Click on the player above to hear our conversation and/or check out the transcript below:

Tom Raftery [00:00:00] Whereas if I’m looking down through my supply chain of different suppliers, it’s very difficult for me to tell who is using renewable energy or not, you know, which cloud provider do I choose? Because do I know their energy sources? Which logistics company do I use? Do I know which of them are using electric vehicles or which of them are using diesel? You know, that’s not exposed today.

 

Tom Raftery [00:00:27] Good morning, good afternoon or good evening. Wherever you are in the world, this is the digital supply chain podcast and I am your host, Tom Raftery.

 

Tom Raftery [00:00:38] Hi, everyone, welcome to the Digital Supply Chain podcast. My name is Tom Raftery with SAP and my special guest on the show today is Toby. Toby, would you like to introduce yourself?

 

Toby Croucher [00:00:47] Hi, Tom. Yeah thanks. My name’s Toby Croucher. I’m the energy and natural resource industry lead for the EMEA North region. There’s a Nordics and France UK, and Benelux. Good to talk with you Tom.

 

Tom Raftery [00:01:06] Thanks. Thanks. So when I want to get you on the show, Toby, because, you know, we’re gonna talk about a thing called an initiative of as SAP’s called Climate 21. And the reason I wanted to talk about that is because supply chains are a massive part of a company’s carbon footprint. And the Climate 21 initiative is is an initiative that SAP is, you know, getting into to try and address that. So and you’re you’re part of the core Climate 21 team. So I decided to have you on the show so we could talk a little bit about it. And, you know, some of the reasons behind it, what it hopes to address, where the future is going, that kind of thing. So could you, you know, maybe start off give me a little bit of a background of Climate 21. What is it and why is it.

 

Toby Croucher [00:01:58] Yeah, well, I mean, climate’s not been. It’s not it’s not a new issue. It’s not a new challenge, as it were, it’s been you know, it’s been in the in the public domain to varying degrees, you know, for decades, really. Certainly since the early 2000s. But but last year, last year in particular, there’s an entirely new level of exposure in society as to what’s happening with the climate. What was happening with our response and the gap between our ambition you know, globally, our ambition to stabilize our climate between one, half, two degrees from the from the Paris accord, the U.N. agreements that, you know, 73 countries now have signed up to be net zero. And a level of action going on, actually. And, you know, from an SAP perspective, you know, when you look at CO2, of all of the issues relating to sustainability, it’s the only one as a has a globally consistent currency. It means the same thing. And a ton of a ton of CO2 means the same thing wherever you are in the world.

 

Tom Raftery [00:03:11] There’s no there’s no difference between a French ton of CO2 and an American icon of CO2.

 

Toby Croucher [00:03:17] As as the head of the international agency said it, CO2 doesn’t need a passport. And you know, it can be converted. Different greenhouse gases can be converted into the equivalent CO2 now. So it really lends itself actually to a transactional system. And it’s spread. CO2 is spread in terms of it’s it’s it’s the output of CO2 across industries, through supply chains, all the way to customers, all the way from the lip of the primary energy industries. So it’s got it’s got a certain kind of attributes CO2 that really lend itself to SAp’s heritage. It’s it’s it relates to material flows. And, you know, to a large extent, all the issues around managing our approach to climate change have been you know, how do we get the accounting right globally? How do we get the accounting right all the way from the global system of accounting for CO2 down to the national decarbonisation targets, which which, you know, most of the countries we live in have; then down to an industry level. And that, you know, can be inside trading schemes like the EU have. And then inside to a company level. And then when you’re in a company, actually, you go start to look across all your activities globally. And that constitutes your footprint, whether that’s direct, scope one or indirect scope two or scope three, which is there all the way through your supply chain. And the moment the world doesn’t have an effective, reliable, consistent way of doing it, it fits over well with that SAP’s heritage and SAP’s capabilities. The program started off as week I think we set September, October last year, we started moving into action in this with, you know, with our Board level sponsorship.

 

Tom Raftery [00:05:17] OK. So before I turned the recorder on, we had a little bit of a discussion about this, and one of the topics that we said we would chat about was the idea of a carbon budget. Now, the idea of a carbon budget is something that a lot of people may be unfamiliar with. So I think the way I frame it to people and, you know, feel free to jump in. But the way I frame it to people is that we have, as you rightly pointed out from the Paris Climate Accord in 2015, we have internationally signed up to trying to limit the global warming to one and a half degrees C, between 1.5 degrees C and maximum 2 degrees C, ideally one and a half and at worst 2 degrees C is what, one hundred and ninety five countries signed off on. We know where we are today. We’re already at one. So that leaves us between a half and one degree C to go. And we know to get from where we are today to one and a half to two degrees C. We have to pump X gigatons of CO2 into the climate to reach our target of 1.5 to 2 degrees C and that X is known, it is just physics. It is about a thousand gigatons. And the issue around the carbon budget is that the fossil fuel companies have proven reserves of about 3000 gigatons. So it becomes kind of challenging, I think, for organizations. So but we do we have that budget. We know where we want to get to or where we want to stop at. And  I mean, for companies, for organizations to figure it out where they are themselves, they need some kind of accounting right?.

 

Toby Croucher [00:07:03] Yeah, and I think, you know, you’re absolutely you’re absolutely right. You know, I mean, I I’ve I’ve explained that, you know, when I explain to my children, I explain it in the same way you think about calories, you know. I mean, it’s there are ways in which there are ways in which the world can absorb carbon sinks, absorb, you know, oceans and forests that suck up. And there are their outputs. There are ways in which it’s produced. And we’ve got to get a gigaton is a lot. But actually, you know, current rates of our current rates of consumption or carbon emissions, we’re gonna get I think it’s between eight and ten years we’ve used up all our budget. OK, if you’re dieting and someone’s that you couldn’t go over 2500 calories a day, you know. You know, you’ve got there by lunchtime. You know, and it’s it’s not that many years left now as you start to as you start to cascade that down, because that’s very, very hard for an organisation. Is is you you cascade that down until what are you what are you what are your targets and where are you going to go? Now, the interesting thing is, you know, and you hear this now increasingly from, you know, from the large international companies, you know, both in the energy intensive, industries and the consumer end and all the way through the supply chains. You can’t do this alone. You know, you can’t as a company continue to and that’s where the analogy breaks down. You can’t continue to squeeze your own emissions. You’ve got to get visibility through them, through and through your transactions. So, you know, we had a discussion with a company only this morning that produces industrial materials. And they said, well, you know, we really want to supply these these pumps. So the electricity they use is less and less and less actually are ah, you know, our customers are able to run these in a low carbon way. But actually, we get inputs to build them. We want to know how much carbon is in there. And and essentially this you know, this budgetry challenge, this carbon budget challenge is going to have is going to have to two parts to it. One part is is leaving fossil fuels in the ground. And those assets investors are calling those assets stranded assets. And the valuation of those companies that used to have a reserve to production ratio, which is “I’ve got loads in the bank, we can burn later”. That’s not going to apply anymore. That’s half of it. So half of it is is decarbonizing primary energy supply, which is you know there is options for that around hydrogen and bio and green electrons. The other half actually is products and services and squeezing those and in the same way, you know, if you if you want to lose weight, you need a good pair of scales. That’s second half for that second half that, you know, that, you know, decarbonise and squeezing all of the grams and kilos and tons and kilotons, not the gigatons a billion tonnes, but making all those small decisions, you know, you know, now just, you know, not having milk in your coffee, type decisions to make those types of decisions actually is going to take a very, very different approach to your future and your transactional systems.

 

Tom Raftery [00:10:28] And I think it’s it’s important as well, because in in, you know, take your example in the idea of a diet. It’s very easy going through the the aisles of the grocery store to pick up the items and look at the label on them to see how many you know, how much carbohydrate is in them or how much protein or fat is in them, you know, per 100 grams or whatever it is. Whereas if I’m looking down through my supply chain at different suppliers, it’s very difficult for me to tell who is using renewable energy or not. You know, which cloud provider do I choose? Because do I know their energy sources? Which which logistics company do I use? Do I know which of them are using electric vehicles or which of them are using diesel? You know, that’s not exposed today.

 

Toby Croucher [00:11:18] No, it’s not. And you know that there’s a big element of trust. You know, public trust in relation to, you know, I mean, you saw with Volkswagen’s challenges around their , you know, that their emissions monitoring dieselgate. Exactly. Dieselgate. And I think, you know, what we’re starting to build when we start to look at Climate 21 is an ability to, you know, to have that visibility and to be able to manage that and have that ledger that passes through as those as those products and services move down through the industrial, ultimately to us as consumers I mean, the notion has been, you know, the notion has been, you know, presented that individuals should have a carbon budget, you know, depending on the population growth projections it’s somewhere between, you know, two tons and four tons or six tons. But it’s it’s a budget now at the moment you know, very few of us would know whether we were underweight or overweight in terms of are we doing the right thing. Now, you know, you know, you’ve got photovoltaics on your roof. You know, it’s a it’s a big decision to make in a way to dieting. You don’t eat cake. You don’t eat cake if you’re dieting. But the smaller decisions, the small decisions around how to source which which supplier will source materials, can you change? What’s the substitution options you’ve got? These traditionally these lifecycle assessments are these lifecycle assessments have been done on a on a singular basis for a single product or a single service. And the you know, the the oil and gas industry did it with biofuels. Right? Well, sort of biofuels, but it becomes. But to do it once is a manual exercise to do it systematically, continually across all your business process. I mean, that’s you know, that’s an entirely different undertaking. But actually, that’s the only way you’re going to get the assurance through your supply chain. You’re gonna get the visibility through your supply chain. You’re going to get an ability to have those numbers, not just assured, as they are currently in that scope three area. But verified, reported both to investors to say, I’m decarbonising my business and ultimately to your your customers, whether it b2b or b2c. And that level of trust is going to have to come with a completely transactional level. I mean, currently, you know, many of our customers, if not most report CO2 emissions reporting is very important. And that will remain important for lots of reasons. But it’s the longer term is the management of them that’s going to become so, so important. And the ability to tell a story about how you’re effectively managing and effectively decarbonizing not just your business strategy book, but your supply chains as well.

 

Tom Raftery [00:14:02] OK. So we’re going to help with the calculation and transparency of emissions. Where else is this going?

 

Toby Croucher [00:14:14] Well, I mean, if you if you look at it, if you if you look at the discussions we’re having with with many of our customers, if you look at the way you CO2 is not it’s not singular issue. It’s related to, you know, land-use change, for example. It’s related to, you know, there are in some parts of the world. It is a very really a good example. You take you know, you’re low carbon energy is is actually a secondary importance to air quality and NOxand SOx and those issues. And the intent here is not to have a singular transactional system around CO2. I mean CO2 as I said at the beginning, it got certain qualities. And it’s a it’s a it’s a global it’s it’s a global priority, of course, for reasons we know well. But if we start to look at our strategy, it’s very much towards saying, let’s look at let’s look at the traditional non-financial flows, things that fit under the broad banner of sustainability. Let’s look at the non-financial flows and see how we start to build those in into our our ERP proposition. So Climate 21 is it is it is a kind of leading program that’s gonna be followed with, you know, us evaluating how it’s up, to what extent can we build this transactional future that historically has been, you know, hasn’t been included in with an organisation decision making has been reported on up in the manage and optimise. How do we start to build that in strategically? And that’s it. I mean, that’s it’s incredibly. It is. It is something, actually. You know, the world. And I said this to you, Tom, before we started the call. This idea of, you know, ecosystem services and the services that nature provides, if you like. I mean, that’s, you know, since the beginning of time, the the ultimate supply chain has been that nature itself, which we benefitted from a tremendous reliability. You know, it’s it’s it’s free at point of consumption. I mean, it’s got all the qualities about it now. You know, if you start to build that into then and you’re in your industrial systems, it’s a huge leap. It’s a huge leap.

 

Tom Raftery [00:16:29] Very true. We are, today is the first of April we’re recording in the middle of a global pandemic. The Covid-19 Coronavirus pandemic. Are you seeing any parallels between what we’re seeing in the pandemic and the whole climate issue?

 

Toby Croucher [00:16:48] There’s an incredible amount being written actually at the moment about the link between current employment, I think, because, you know, for very obvious and actually rightfully so, you know that the Coronavirus situation has knocked climate change off the off the pedestal of global concerns. And that’s absolutely correct. I think what’s really interesting what is really interesting with Corona. And this is really this is really, I think, important for the climate debate is we’re seeing most of the reporting that we’re receiving as members of society is based around what the modelling is telling us, the data in terms of how we’re doing, you know, in terms of flattening the curve and the forecast and, you know, the idea of the idea of being, you know, relying on on data to see where you are, you know, modelling to see what could happen and then and then forecasting your interventions to see where that’s going to get you to against, certain outcomes you don’t want. That’s… And we’ve been very science led. I must say, I think that the way we’re responding as companies, we’re being led by the science. We certainly see that in the UK. It’s been you know, it’s that the science is leading our response. Now I think that’s very promising for the climate agenda, particularly in this next decade that is being called that the decade of delivery. If we don’t if we don’t crack, if we don’t crack some of these challenges in the next 10 years. And we’ve had 20 years to think about it. And we don’t get it in the next 10 years. We’re in a very, very difficult position. So so I think there’s something there’s something positive around corona. And we may see it. We may see a return to science and science based decision making being led by data, which, again, we have a role in. I think that’s very, very positive. I think the risk for me is the oil prices has dropped. It’s it’s it’s low. And actually one way to one way to stimulate, you know, the post-corona recovery could bake-in could lock in some sort of high carbon outcomes that will lose time. And we don’t have you know, we don’t have that time to lose. You know, I think the drop in in consumption during the Coronavirus. We’ll eat that up in a few months. That won’t really matter. It’s about trying to stimulate economies. And there’s such an oversupply of fossil fuels at the moment that if that squeezes, you know, other investments that could be made, that that would be challenging. The final thing I would say with corona is, is, you know, with running all the risk management, we can we’re doing as much as we can. As societies in the hope there’s going to be a remedy, a vaccine, something, something at some point in future, we know we’ll come in and take this particular problem away as long as we can reduce, reduce what’s happening in the interim. That silver bullet will not present herself with with climate change this decade. There isn’t you know, there isn’t a singular answer like that. And that’s, I think, why it’s been such an such a difficult challenge over the past couple decades, because there’s so many dimensions to it. You know, fiscal, technology, societal, I mean, it’s a hundred years worth of energy infrastructure has been built around the world, around, you know. And it’s a tremendously efficient oil and gas and coal as well are very energy dense think they’re great fuels. If it wasn’t for that pesky CO2. So I think right. I think it’s there’s some things we can learn from corona, I feel cautiously positive.

 

Tom Raftery [00:20:30] When one of the things that, hey, I try and get people to visualise is, you know, what is a ton? You know, you can think of like a Mini Cooper as being roughly a ton and a gigaton is one billion tons. So try and picture a billion Mini Coopers and then try and picture a way of hoovering 10 billion Mini Coopers out of the atmosphere, every year, and storing them somewhere. And that’s the kind of level of challenge we’re at, and 10 billion is probably not enough to be hoovering out of the atmosphere every year. We obviously need to stop putting it in, putting them into the atmosphere in the first place. But we’ll have to try and suck them out as well. And that’s an even bigger challenge, I think.

 

Toby Croucher [00:21:22] Yeah, I think we land use land use will play a role, you know, to kind of recarbonise reforestation. Yeah, that that will play a role. You know, it’s a policy decision as to whether that’s linked as an offset or not. You know, I think you have to be careful with with offsets, you know. But but and sequestrations, carbon capture and storage actually finding it and, you know, putting in an aquifer, putting in a geological formation. But there you need a you know, you you kind of need a big single point geography. The geography doesn’t work. So it’s you know, that’s that’s that’s challenging as well. And that’s where you start to look at you know, you start to look at solving this this challenge and you have to set as a lot of energy efficiency needed, a lot of land use changes. You’re going to have to rely on, you know, the three you know, the three kind of energy supply vectors around bio and hydrogen where appropriate. And then, you know, green electrons from renewables, you’re going to have to try and sequester. And then you’re going to have to have, you know, buildings and different industrial solutions. So buildings, heating, cooling buildings. Mobility is going to have to be addressed. And you start to see actually and the whole thing, that whole picture of activity is gonna have to it will generate a whole new set of business models of course. There’ll be a whole supply chain associated around it, but it’s going to in a whole system transaction to make sure that it all adds up. And there is a global accounting system which which links them on the micro to the macro. And I think it’s going to be it’s going to be very. Yeah, it’s gonna be very interesting to see how this how this plays.

 

Tom Raftery [00:23:12] Toby we’re coming to the end of the podcast. We’ve gone 22, 23 minutes at this point. Is there as a last question, is there any question I have not asked you that you wish I had?

 

Toby Croucher [00:23:27] No, I think, you know, I think it is a typical job interview, kind of question, where would you know where? Would you like to be in 10 years time or where would you like to where would you like to have got this agenda to in in in 10 years time? And that’s probably the question. Are you going to ask that question?

 

Tom Raftery [00:23:51] You asked it. Go ahead and answer it now!

 

Toby Croucher [00:23:57] Well, I think will be what I think will be great, actually. And I see I see that there’s very much there’s an element of the role with this in SAP is the market and markets and, you know, and customers and investors and employees over the next decade. Very much so if we’re to stand a chance of hitting our 2050 targets and seeing ourselves in a good place for, you know, future generations. The companies do well in this are going to have to be you know, it’s going to have to be clear they’re winning and they’re doing well and they are performing well. And I think that’s that’s where you start to see flows of talent, flows of capital, you know, access to markets, new markets, going to the companies that get this, you know, that really get this that really get the fact that they’ve got a build-in, you know, a new system of transaction. They’ve got to take these issues from being historically reported once a year, you know, in a report which often doesn’t really get read by very many people and pushed out the door, you know, with risks, all those associated risks of, you know, it being marketing, they’ve got to build it in actually all the routine way of running a business. And I think when that happens and when society responds and consumers respond, those companies will win. And that they’ll not just win in traditional ways, that they’ll win in terms of their market share. And I I think we’ve started to see that, you know, the early seeds of that we have done before, you know, but then we get hit with a financial crisis or other crisis. But I think if we’re looking for where I want to get to in 10 years time and the role SAP could play, I think it’s very much in shifting that, you know, shifting that gap between the companies that are really, you know, doing this and those that aren’t and that gap, you know, there’ll be a high penalty to pay for the companies that don’t manage to get across that gap and start building this way of working and become, you know, essentially sustainable businesses.

 

Tom Raftery [00:26:14] Yeah. Cool, cool, cool, Toby. If people want to know more about Toby or about SAP Climate 21 initiative or about, you know, any anything else you think they might want to know about or where we’re should/ where would I direct them to go?

 

Toby Croucher [00:26:36] Within SAP we have a Jam site. There’s an internal Jam site for our Internal employees. We have an external point of view. I mean, I know as I said, you know, I think just before we started the conversation Tom we’re in, build and develop, you know, where we were kind of, you know, a pretty early stages but we’re moving very, very fast. But either, you know, comes to me there’s a there’s a core team working this, you know, right now. I mean, you know, organizationally it will grow and expand over time as we start to build up, you know, our go to market and our, you know, engage with customers more widely. So use the jam internally. Or come through the Climate 21 core team. I’m happy to fill any any questions around our approach.

 

Tom Raftery [00:27:27] Super, super, Toby. That’s been fantastic. Thanks a million for joining me on the show today.

 

Toby Croucher [00:27:32] My pleasure. Thanks a lot.

 

Tom Raftery [00:27:37] OK, we’ve come to the end of the show. Thanks, everyone, for listening. If you’d like to know more about digital supply chains, head on over to SAP dot com slash digital supply chain or simply drop me an email to Tom Dot Raftery at SAP dot com. If you’d like to show, please don’t forget to subscribe to it in your podcast application to get new episodes right away as soon as they’re published. And also, please don’t forget to rate and review the podcast. It really does help new people. To find the show. Thanks. Catch you all next time.

 

 

And if you want to know more about any of SAP’s Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don’t forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.

And remember, stay healthy, stay safe, stay sane!

 

With great power comes great responsibility – or, Cloud companies need to get on-board

Spiderman
With great power comes great responsibility

This great quote from the movie Spider-Man, is just as true for technology, as it is for superheroes.

Technology has made possible tremendous changes in our quality of life in the last couple of decades. Everything from surgery to transportation, education to construction, space exploration and most other fields of human endeavour now depend heavily on IT. However, these great advances in our knowledge and abilities comes at a cost.

Information Technology’s carbon footprint, estimated by Gartner to be 2% of global carbon emissions in 2007, is rapidly increasing and by some estimates may even double by 2020. This is obviously an unsustainable situation. ICT, which can help so many organisations to reduce their carbon footprint, should itself be an shining example of low emissions.

To this end, the EU commission’s new ICT Footprint initiative is to be lauded. The announcement of the project on EU Commissioner Neelie Kroes blog gave the following details of the initiative:

This is why the European Commission has persuaded three leading standards development organisations and a prominent greenhouse gas accounting initiative to pool their measurement efforts. Under our new initiative these organisations will examine the whole sector, the whole lifecycle and the scalability of these methods.

That means measuring everything from the supply of raw materials to their recycling. Measuring not only what it takes to make products like a laptop, but also the impact of services like hosting data in the cloud. It means that in the near future we will be able to measure the ICT environmental footprint of whole cities or countries, including the positive environmental effects that ICT enables.

Several major ICT companies and organisations from Europe, Asia and the US are now trialling such measurement solutions. And from this month onwards, nearly 30 players have joined the European Commission to broaden and speed up the effort. We call on more and more such players to get involved.

It is tremendous to see this kind of global leadership from the EU. While this only applies to the EU, it does require the development of measurement and reporting systems for whole IT ecosystems and that can only be a good thing. In time, the hope would be that these systems are used well beyond the EU and by all IT providers…

Friday Green Numbers round-up for Feb 4th 2011

Green Numbers
And here is a round-up of this week’s Green numbers…

  1. Europe’s Energy

    Member States of the European Union have agreed on targets aimed at reducing greenhouse gas emissions by cutting energy consumption by 20% and increasing the share of renewables in the energy mix to 20% by 2020. The ‘Europe’s Energy’ project gives users a set of visual tools to put these targets into context and to understand and compare how progress is being made towards them in different countries.

  2. Survey results: Utilities executives on Energy Efficiency and the Smart Grid

    The survey asked 106 utility executives – the people that arguably know more about the energy supply and demand challenges our nation faces than anyone else – a range of questions on the smart grid, energy efficiency and related topics and issues.

    We issued a press release today with some of the highlights, but to help put this week’s news into context, we also wanted to share a full breakdown of the results. Nothing earth shattering, but worth keeping in mind as the week progresses…

  3. 10 Smart Grid Trends from Distributech

    The annual smart grid event Distributech kicked off in San Diego Tuesday morning and — as expected — unleashed a whole series of news from smart grid-focused firms. From new home energy management products, to plug-in car software, to distribution automation gear, this is a list of trends and news from the show.

  4. US Venture Capital Investment in Cleantech Grows to Nearly $4 Billion in 2010, an 8% Increase From 2009

    US venture capital (VC) investment in cleantech companies increased by 8% to $3.98 billion in 2010 from $3.7 billion in 2009 and deal total increased by 7% to 278, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. VC investment in cleantech in Q4 2010 reached $979 million with 72 financing rounds. VC investment in cleantech in Q4 2010 reached $979 million with 72 financing rounds, flat in terms of deals and down 14% in terms of capital invested compared to Q4 2009…

IBM Start – positive outcomes from the fabulous Sustainable Energy day

Waterfall

I have already written about how well the IBM Start event started out – well I wanted to dive a little deeper into one of the days in particular – the Smarter Energy for a Sustainable future day. Why? For me, it was by far the best day of the event.

IBM Start – Building the New Energy System

Why do I say that? A number of reasons –

  1. The speaker list was stellar with senior representation from EDF, BP, E.ON UK, British Gas, Water UK, OFGEM, Carbon Trust, Shell, B&Q, National Grid, Central Networks, WWF, Stagecoach, Power Perfector amongst others, as well as representatives from NGO’s, academia and research organisations.
  2. The delegate list was spectacular as well and consequently the networking on the day was through the roof and
  3. There was far more audience participation solicited than on any of the other days I attended Start

The discussions themselves were fantastic but there were far too many of them happening in parallel – I mean how do you decide between:

  • Building the new Energy System
  • Driven by Demand – Managing the New Infrastructure or
  • New Business Models for Energy in New Economies

I wanted to attend all of them!

A real surprise for me was the speech by Charles Hendry

Friday Green Numbers round-up 07/30/2010

Green Numbers
Photo credit Lauren Manning

And here are this week’s Green Numbers:

Friday Green Numbers round-up 05/28/2010

Green numbers
Photo credit Unhindered by Talent

And here is this week’s Green numbers:

Friday Green Numbers round-up 04/23/2010

Green numbers
Photo credit Unhindered by Talent

And here is this week’s Green numbers:

Posted from Diigo. The rest of my favorite links are here.

by-sa

Investors, the EPA and now the SEC are making pollution an increasingly unattractive option

Shareholder
Photo credit Neubie

A perfect storm consisting of the EPA, the Securities and Exchange Commission (SEC) and investors is pressuring companies to come clean on their environmental risks and performance.

I wrote a post a couple of weeks ago about FaceBook’s decision to use a primarily coal-burning utility to power its new data center where I asked should FaceBook’s investors be worried about the decision.

Now the SEC has started taking an interest in this area as well and recently clarified that companies’ have responsibilities [PDF] to report on:

  1. the direct effects of existing and pending environmental regulation, legislation, and international treaties on the company’s business, its operations, risk factors, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations
  2. the indirect effects of such legislation and regulation on a company’s business, such as changes in demand for products that create or reduce greenhouse gas emissions and
  3. the effect on a company’s business and operations related to the physical changes to our planet caused by climate change — such as rising seas, stronger storms, and increased drought. These changes to the environment could have a number of material effects on corporations, such as impairing the distribution and production of goods and damaging property, plant, and equipment

In announcing the clarification SEC Commissioner Luis A. Aguilar stated that the SEC will begin to be far more proactive on environmental reporting:

The Commission’s action today is a first step in an area where the Commission will begin to play a more proactive role, consistent with our mandate under the National Environmental Policy Act of 1969, to consider the environment in our regulatory action. The National Environmental Policy Act charged the Federal Government “to use all practicable means” to, among other things, “fulfill the responsibilities of each generation as trustee of the environment for succeeding generations.”

Noting the interest of the SEC and their clarification around companies’ environmental risk reporting requirements, investors are now becoming more vocal and are increasingly asking companies to report more information about their environmental risks and responsibilities. These investors need to look after the long term interests of their funds and the last thing they want is to have their monies disappear in some environment-related mishap like the Kingston Fossil Plant coal fly ash slurry spill or a class action litigation.

Ceres, the non-profit network, reported recently that investors filed a record 95 climate change resolutions, a 40% increase over the 2009 proxy season! And these are serious investors. Jack Ehnes, CEO of CalSTRS for example, manages $131 billion dollars in assets. That’s billion, with a b!

As Ceres notes:

Many of the investors are part of the Investor Network on Climate Risk (INCR), an alliance of more than 80 institutional investors with collective assets totaling more than $8 trillion.

$8 trillion! Investors with a war chest of $8 trillion wield a lot of clout.

Combine this with the fact that on Dec 29th 2009 the EPA’s Mandatory Reporting of Greenhouse Gases Rule came into effect and it states:

suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to EPA. The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).

So, the EPA is requiring the reporting of Greenhouse Gas Emissions from the top 10,000 emitters in the US, the SEC now has environmental risk reporting and transparency in its sights and investors with considerable resources are looking for more details on possible environmental risks from companies they invest in. You have to think that this is not a good time to be in the pollution business!

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Should FaceBook’s investors be worried that the site is sourcing energy for its new data center from coal?

Mountain-top removal
Photo credit: The Sierra Club

Should FaceBook’s investors be worried that the site is sourcing energy for its new data center from primarily coal-fired power?

FaceBook is fourth largest web property (by unique visitor count) and well on its way to becoming third. It is valued in excess of $10 billion and its investors include Russian investment company DST, Accel Partners, Greylock Partners, Meritech Capital and Microsoft.

FaceBook announced last month that it would be locating its first data center in Prinville Oregon. The data center looks to be all singing and dancing on the efficiency front and is expected to have a Power Usage Effectiveness (PUE) rating of 1.15. So far so good.

However, it soon emerged that FaceBook are purchasing the electricity for their data center from Pacific Power, a utility owned by PacifiCorp, a utility whose primary power-generation fuel is coal!

Sourcing power from a company whose generation comes principally from coal is a very risky business and if there is anything that investors shy away from, it is risk!

Why is it risky?

Coal has significant negative environmental effects from its mining through to its burning to generate electricity contaminating waterways, destroying ecosystems, generation of hundreds of millions of tons of waste products, including fly ash, bottom ash, flue gas desulfurisation sludge, that contain mercury, uranium, thorium, arsenic, and other heavy metals and emitting massive amounts of radiation.

And let’s not forget that coal burning is the largest contributor to the human-made increase of CO2 in the air [PDF].

The US EPA recently ruled that:

current and projected concentrations of the six key well-mixed greenhouse gases–carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)–in the atmosphere threaten the public health and welfare of current and future generations.

Note the wording “the public health and welfare of current and future generations”

Who knows what legislation the EPA will pass in the coming months and years to control CO2 emissions from coal-fired power plants in the coming months and years – and the knock on effects this will have on costs.

Now think back to the litigation associated with asbestos – the longest and most expensive tort in US history. Then note that climate change litigation is gaining ground daily, the decision to go with coal as a primary power source starts to look decidedly shaky.

Then GreenPeace decided to wade in with a campaign and FaceBook page to shame FaceBook into reversing this decision. Not good for the compay image at all.

Finally, when you factor in the recent revolts by investors in Shell and BP to decisions likely to land the companies in hot water down the road for pollution, the investors in FaceBook should be asking some serious questions right about now.

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UK’s Carbon reduction commitment legislation – the shape of things to come globally!

Climate change

Screenshot credit Tom Raftery – data from NASA

The world is getting warmer. 2008 was the 9th warmest year on record. 2009, barring a sudden, severe, global cold snap, will end up being the 4th or 5th warmest year on record and with El Niño coming on in the Pacific, 2010 looks likely to set a new temperature record for the hottest year in recorded history.

Climate change is real and it is here, now. So what you say, what does that have to do with me? Or more to the point, what does that have to do with my work?

Well, if you are based in the UK, there is a strong chance that next April, it will have a very direct impact on your job, company, or business. This is because the UK has passed legislation called the Carbon Reduction Committment (CRC).

The CRC is a groundbreaking piece of legislation designed to help the UK meet its carbon reduction targets by 2020. Basically, the CRC scheme will apply to organisations that had a half-hourly metered electricity consumption greater than 6,000 MWh per year in 2008. Organisations qualifying for CRC would have all their energy use covered by the scheme, this includes emissions from direct energy use as well as electricity purchased. Initially, it is estimated, around 5,000 organisations will qualify, including supermarkets, water companies, banks, local authorities and all central Government Departments. Qualifying organisations mostly fall below the threshold for the European Union Emissions Trading Scheme, but account for around 10% of the UK carbon emissions.

The organisations involved will need to register or make an information disclosure by 30 September 2010. A financial penalty (£5,000 plus a per diem charge for each subsequent working day an organisation fails to submit a report) will be imposed on organisations who fail to meet the deadline.

The first year of the scheme (April 2010-2011) is called the footprint year. Companies are required to submit an audited report of their emissions during the footprint year by 29 July 2011. Again financial penalties will be imposed for failing to meet the deadline.

In the second year, (2011-2012) participants will have to purchase emissions allowances to cover their forecast emissions for 2011/12. And in 2013 auctioning of carbon allowances begins, with all the income from the auctions recycled back to participants by the means of an annual payment based on participants’ average annual emissions since the start of the scheme.

There will be a bonus or penalty according to the organisation’s position in a CRC league table. The league table will be made public thereby enhancing the transparency of companies carbon reporting and hopefully shaming any egregious emitters into reducing their carbon footprint.

I have gone in to a bit of detail about the CRC here because it is difficult enough to find out information about the scheme and most UK business appear to be wholly unprepared for its implementation. The UK Department of Climate Change (I think it is interesting that the UK has a government department of climate change in the first place – how many other governments do?) has an easy to follow guide to the CRC [PDF] available for download which will help.

The CRC is going to be closely watched by other countries and you can be sure it will be used as a model by many to reduce their carbon emissions.

As I mentioned at the outset of this piece, climate change is here, it is real. Increasingly we are going to see bills like the CRC enacted so we can try to mitigate its effects.

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